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2016-04-12 - AGENDA REPORTS - COMM FACILITIES VISTA CYN (2)
Agenda Item: S CITY OF SANTA CLARITA . ' AGENDA REPORT PUBLIC HEARINGS CITY MANAGER APPROVAL: b1 14�4 3 DATE: April 12, 2016 SUBJECT: FORMATION OF CITY OF SANTA CLARITA COMMUNITY FACILITIES DISTRICT NO. 2016-1 (VISTA CANYON) DEPARTMENT: Administrative Services PRESENTER: Elena Galvez RECOMMENDED ACTION City Council: 1. Conduct a public hearing on the a) formation of Community Facilities District No. 2016-1 (Vista Canyon), b) levy of special taxes, and c) issuance of special tax bonds secured by the special taxes. 2. If no majority protest exists at the public hearing, adopt a resolution determining the validity of prior proceedings, establishing the Community Facilities District No. 2016-1 (Vista Canyon), and approving a funding and acquisition agreement. 3. Adopt a resolution determining the necessity to incur bonded indebtedness within Community Facilities District No. 2016-1 (Vista Canyon) and calling a special election. 4. Open and review ballots, and if the proposition passes with a 2/3 vote, adopt a resolution canvassing the results of the election held within Community Facilities District No. 2016-1 (Vista Canyon). 5. Introduce and pass to second reading an ordinance entitled, "AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SANTA CLARITA, ACTING AS THE LEGISLATIVE BODY OF THE CITY OF SANTA CLARITA COMMUNITY FACILITIES DISTRICT NO. 2016-1 (VISTA CANYON), AUTHORIZING THE LEVY OF SPECIAL TAXES." Page 1 Packet Pg. 51 0 BACKGROUND The Vista Canyon project was approved by City Council on April 26, 2011. Resolution No. 11-23 was also approved by City Council on April 26, 2011, that included the Final Conditions of Approval and the Transit Funding Agreement that contemplated the creation of a community facilities district over the commercial properties within the Vista Canyon project and required Vista Canyon's commitment to allocate 15% of the net construction proceeds of the CFD bonds to the construction of the Transit Station. Community facilities districts are a form of financing district that can be used by cities, counties, school districts, and special districts. A district has the authority to levy a special tax to finance a variety of public improvements or services. If there are more than 12 eligible voters, the special tax must be approved by a two-thirds vote of the registered voters within the district; otherwise, the property owners can vote to approve the special tax. A community facilities district can be formed to finance a wide list of improvements, which include roads, parking facilities, water facilities, sewers, and schools. They are also used to finance ongoing maintenance services of the facilities or for services such as landscaping, streets, and lighting and drainage facilities. The taxes are secured by a continuing lien and levied against benefitting property within the district on an annual basis. The revenue stream is used to pay debt service on bonds, finance facilities on a pay-as-you-go basis, and to pay for services, or a combination thereof. The City received a Petition (including consent and waiver) to form a community facilities district with respect to the Vista Canyon development from Vista Canyon Ranch, LLC and Vista Canyon Phase I, LLC, who are the owners of the property in the proposed development (collectively, Owner). Located at the end of Lost Canyon Road near Sand Canyon, the approved Vista Canyon development will include up to 1,100 dwelling units (apartments, townhomes, and detached single family), as well as 950,000 square feet of commercial uses (office, retail, restaurants, hotel(s) and a theater). Land development is underway, and the applicant is moving forward on the initial phase of the project. Phase 1 includes apartments, the first office/retail building, and the first parking structure. The Owner requested that the City move forward and declare its intent to form a community facilities district designated as "City of Santa Clarita Community Facilities District No. 2016-1 (Vista Canyon)" (the "CFD"), and issue bonds secured by special taxes within the CFD to fund up to three parking structures and a portion of the approved Transit Station, totaling up to $45 million (the "Project"). Fifteen percent (15%) of net construction proceeds of each bond issue will be set aside for the Vista Canyon Transit Station. On February 23, 2016, the City Council declared its intention to form the new CFD and issue bonds and called a public hearing for April 12, 2016, on all matters relating to the CFD including the special tax formula or the Rate and Method of Apportionment (RMA). Under the RMA, parcels for apartments and commercial use will be subject to the special tax. Parcels for single- and multi -family (for -sale) residential units are not subject to the CFD tax. Provided there is no majority protest at the public hearing, a) the CFD may be formed and a Page 2 Packet Pg. 52 funding and acquisition agreement with the Owner may be approved, and b) an election may be called. The funding and acquisition agreement provides for the method and terms for the CFD to acquire completed parking facilities from the Owner using the future bond proceeds. A waiver regarding election time limits was received from the Owner, so a special election can be called for this evening to authorize a) the levy of special taxes, b) the issuance of special tax bonds not to exceed $45 million, and c) an appropriations limit for the CFD. Should the proposition pass with a two-thirds vote from the qualified voters (the Owner), the City Council may conduct the first reading of an Ordinance levying the special tax. The second reading and adoption of the Ordinance is scheduled for the next City Council meeting on April 26, 2016. Once the CFD is formed and the election concluded, it is the intent of the CFD to issue two or more series of bonds secured by special taxes relating to the facilities within the CFD when market conditions allow. Currently, it is not expected that bonds will be authorized for issuance or sale until the Project construction is well underway and the first parking structure is at or near completion, at which time documents relating to the issuance and sale of the bonds will be brought to the Council for its approval. This is not expected to occur until April of 2017. The CFD is comprised of two tax zones. The financing meets or will meet (at the time of issuance if a waiver is not requested) all City policies and procedures with respect to financing the parking structure and transit station. The only exception to the City's Public Financing Policy will be that the proposed financing provides for bond debt service and special taxes to increase at 2% per year through the proposed 30 -year term of any series of bonds. Staff is recommending an exception to the Policy, since there will be no single and multi -family (for - sale) residential taxpayers. The City in its sole discretion will determine the final amount of bonds issued. The proposed maximum bond authorization is $45,000,000. The "not to exceed" bond amount for the CFD is based on Project costs and available special taxes and has been reviewed by the City Financial Advisor. The facilities and services proposed to be financed and the RMA of the special tax proposed to be levied, as well as the proposed boundaries of the CFD, are described on the exhibits to the resolution of formation. It is the intent to have the property owner association pay for ongoing maintenance and operation of the parking structure. An annual special tax for such services is included in the CFD and would only be implemented in the unlikely event the association did not cover these costs. Harris & Associates, as special tax consultant for the City, has prepared a CFD Report describing the proposed CFD. Although the City of Santa Clarita forms the CFD, the debt issuances are not obligations of the City, but rather obligations of the CFD. Therefore, the formation of the CFD does not obligate the City to make any expenditure or proceed with the project or obligate the City or the CFD to issue any bonds. Finally, the finances and bonds of the CFD are unrelated to, do not rely upon, and do not impact the credit rating of the City. Page 3 Packet Pg. 53 ALTERNATIVE ACTIONS 1. The City Council may choose not to form the CFD and opt for a different financing method. 2. Other action as determined by the City Council. FISCAL IMPACT There is no impact to the City General Fund. All expenses associated with the creation of the CFD will be provided by the developer deposit and bond proceeds. ATTACHMENTS Public Notice Funding and Acquisition Agreement CFD Report Resolution of Formation & Exhibit A - Rate and Method of Apportionment Resolution Calling Election & Exhibit A - Ballot Resolution Canvassing Election Ordinance Page 4 Packet Pg. 54 NOTICE OF THE PUBLIC HEARING ON THE ESTABLISHMENT OF CITY OF SANTA CLARITA COMMUNITY FACILITIES DISTRICT NO. 2016-1 (VISTA CANYON), THE PROPOSED RATE AND METHOD OF APPORTIONMENT OF THE SPECIAL TAX AND THE PROPOSED DEBT ISSUE NOTICE IS HEREBY GIVEN that at 6:00 o'clock pm, or as soon thereafter as practicable, on April 12, 2016, at the regular meeting place of the City Council, City Council Chambers, City of Santa Clarita, 23920 Valencia Boulevard, Santa Clarita, 91355, the City Council (the "Council") of the City of Santa Clarita (the "City") will hold a public hearing on the establishment of the City of Santa Clarita Community Facilities District No. 2016-1 (Vista Canyon) (the "CFD"), the proposed rate and method of apportionment of the special tax (the "Special Tax") to be levied on certain property within the CFD, and the proposed debt issue. On February 23, 2016, the Council adopted Resolution No. 16-05 stating its intention to form the CFD pursuant to the Mello -Roos Community Facilities Act of 1982, as amended, commencing with Section 53311 of the California Government Code (the "Act"), and adopted Resolution No. 16-06 stating its intention to incur bonded indebtedness in the aggregate amount not to exceed $45,000,000, the repayment of which is to be secured by the Special Tax. Summaries of Resolution No. 16-05 and Resolution No. 16-06 are attached hereto as Attachment A and B, respectively. At the hearing, the testimony of all interested persons or taxpayers for or against the establishment of the CFD, the extent of the CFD, or the furnishing of specified types of public facilities and services, or the proposed debt issuance, will be heard. If the owners of one-half or more of the area of the land in the territory proposed to be included in the CFD and not exempt from the Special Tax file written protests against the establishment of the CFD, and protests are not withdrawn so as to reduce the value of the protests to less than a majority, no further proceedings to create the specified CFD or to levy the specified Special Tax shall be taken for a period of one year from the date of the decision of the Council. If the majority protests of the registered voters or the landowners are only against the furnishing of a specified type or types of facilities, or against levying a specified special tax, those types of facilities or the specified special tax shall be eliminated from the resolution of formation. The voting procedure shall be conducted by hand delivered or mailed ballot election. Dated: April 2, 2016 CITY OF SANTA CLARITA, CALIFORNIA By: Kevin Tonoian, City Clerk 8.a i 42205271.1 Packet Pg. 55 a� 0 z U 3 a m E L U R r.+ Q ATTACHMENT A RESOLUTION OF INTENTION OF THE CITY COUNCIL OF THE CITY OF SANTA CLARITA, CALIFORNIA, TO ESTABLISH CITY OF SANTA CLARITA COMMUNITY FACILITIES DISTRICT NO. 2016-1 (VISTA CANYON) The City Council (the "City") of the City of Santa Clarita (the "City") proposes to institute proceedings for the formation of a community facilities district under the terms of the Act. The name of the proposed community facilities district shall be "City of Santa Clarita Community Facilities District No. 2016-1 (Vista Canyon)" (the "CFD"). The exterior boundaries of the CFD are specified and described to be as shown on that certain map now on file in the office of the City Clerk entitled "Map of Proposed Boundaries City of Santa Clarita Community Facilities District No. 2016-1 (Vista Canyon)." The facilities proposed to be financed by the CFD are public infrastructure facilities and other governmental facilities with an estimated useful life of five years or longer, which the CFD is authorized by law to construct, own or operate and that are necessary to meet increased demands placed upon the City as a result of development occurring within the proposed CFD, including, but not limited to, all or a portion of up to three parking structures and a transit station and related costs including designs, inspections, professional fees, and acquisition costs (the "Facilities"). Such Facilities need not be physically located within the CFD. The types of services proposed to be provided for and financed by the CFD include, but shall not limited to, labor, material, administration, personnel, equipment and utilities necessary to maintain and operate the Facilities (the "Services"), if required, which Services are in addition to and do not supplant those services already provided in the territory within the CFD prior to the establishment of the CFD. Except where funds are otherwise available, it is the intention of the Council to levy annually in accordance with procedures contained in the Act (i) a special tax within the CFD sufficient to pay for the costs of financing the acquisition and/or construction of the Facilities (the "Special Tax For Facilities"), and (ii) a special tax within the CFD sufficient to pay for the costs of financing the Services (the "Special Tax For Services," and together with Special Tax For Facilities, the "Special Tax"), including the principal of and interest on two or more series of the bonds proposed to be issued to finance the Facilities and other periodic costs, the establishment and replenishment of reserve funds, the remarketing, credit enhancement and liquidity fees, the costs of administering the levy and collection of the Special Tax and all other costs of the levy of the Special Tax and issuance of the bonds, including any foreclosure proceedings, architectural, engineering, inspection, legal, fiscal, and financial consultant fees, discount fees, interest on bonds (but not to exceed two years), election costs and all costs of issuance of the bonds, including, but not limited to, fees for bond counsel, disclosure counsel, financing consultants and printing costs, and all other administrative costs of the tax levy and bond issues. Upon recordation of a notice of special tax lien pursuant to Section 3114.5 of the Streets and Highways Code of the State of California, a continuing lien to secure each levy of the Special Taxes shall attach to all nonexempt real property in the CFD, and that lien shall continue in force and effect until collection of the Special Tax ceases. In the first year in which such a Special Tax is levied, the levy shall include a sum sufficient to repay to the City all amounts, if any, transferred to the CFD pursuant to Section 53314 of the Act and interest thereon. The schedule of the rate and method of apportionment (the "RMA") and manner of collection of the Special Tax is described in detail and is on file with the City Clerk of the City. The Special Tax is based upon the cost of financing the Facilities and the Services in the CFD, the demand that each parcel will place on the Facilities and the Services and the benefit (direct and/or indirect) received by each parcel from the Facilities and the Services. The RMA provides sufficient detail to allow each owner of nonexempt real property within the CFD to estimate the maximum amount that such person will have to pay for the Facilities and the Services. 42205271.1 Packet Pg. 56 8.a The Special Tax is apportioned to each parcel on the foregoing basis pursuant to Section 53325.3 of the Act and as described in the RMA and such Special Tax is not levied on or based upon the value or ownership of real property. In the event that a portion of the property within the CFD shall become for any reason exempt, wholly or partially, from the levy of the Special Tax, the Council shall, on behalf of the CFD, increase the levy to the extent necessary upon the remaining property within the CFD which is not delinquent or exempt in order to yield the required payments, subject to the maximum tax. Under no circumstances, however, shall the Special Tax For Facilities levied in any fiscal year against any parcel used for private residential purposes be increased as a consequence of delinquency or default by the owner or owners of any other parcel or parcels within the CFD by more than 10 percent above the amount that would have been levied in that fiscal year had there never been any such delinquencies or defaults. Furthermore, the maximum Special Tax For Facilities authorized to be levied against any parcel used for private residential purposes shall not be increased over time in excess of 2 percent per year. Special Tax For Facilities shall not be levied or collected after fiscal year 2060-61, except that Special Tax For Facilities that was lawfully levied in or before such final tax year and that remains delinquent may be collected in subsequent years. Given that no single family residential parcel will be subject to the Special Tax, the City Council waives its prohibition on a special tax escalator under City policy and determines that the Special Tax may include an increase of no more than 2 percent per year as described in the RMA. Each officer of the City who is or will be responsible for the Facilities and the Services to be financed by the CFD, if it is established, is directed to study the proposed CFD and file a report with the Council, containing a brief description of the Facilities and Services by type which will in his or her opinion be required to adequately meet the needs of the CFD and his or her estimate of the cost of providing the Facilities and Services. The City may accept advances of funds from any sources, including private persons or private entities, and is authorized and directed to use such funds for any authorized purpose, including any cost incurred by the City in creating the CFD. The City may enter into an agreement to repay all of such funds as are not expended or committed for any authorized purpose at the time of the election on the levy of the Special Tax, if the proposal to levy such tax should fail, and to repay all of such funds advanced if the levy of the Special Tax shall be approved by the qualified electors of the CFD. The Council hereby reserves to itself, in its sole discretion, the right and authority by subsequent resolution to allow any owner of property within the CFD, subject to the provisions of Section 53344.1 of the Act and those conditions as it may impose, and any applicable prepayment penalties as prescribed in the bond indenture or comparable instrument or document, to tender to the CFD treasurer in full payment or part payment of any installment of the special taxes or the interest or penalties thereon which may be due or delinquent, but for which a bill has been received, any bond or other obligation secured thereby, the bond or other obligation to be taken at par and credit to be given for the accrued interest shown thereby computed to the date of tender. 42205271.1 Packet Pg. 57 8.a ATTACHMENT B RESOLUTION OF INTENTION OF THE CITY COUNCIL OF THE CITY OF SANTA CLARITA, CALIFORNIA, TO INCUR BONDED INDEBTEDNESS IN THE AMOUNT NOT TO EXCEED $45,000,000 WITHIN THE PROPOSED CITY OF SANTA CLARITA COMMUNITY FACILITIES DISTRICT NO. 2016-1 (VISTA CANYON) The City Council (the "City Council") of the City of Santa Clarita (the "City") has adopted Resolution No. 16-05 (the "Resolution of Intention"), stating the City Council's intention to establish City of Santa Clarita Community Facilities District No. 2016-1 (Vista Canyon) (the "CFD"), pursuant to the Mello -Roos Community Facilities Act of 1982, as amended, commencing with Section 53311 of the California Government Code (the "Act"), to finance the acquisition and construction of facilities with an estimated useful life of five years or longer, which the CFD is authorized by law to construct, own or operate and that are necessary to meet increased demands placed upon the City as a result of development occurring within the proposed CFD, including, but not limited to, all or a portion of up to three parking structures and a transit station and related costs including designs, inspections, professional fees, and acquisition costs (the "Facilities"). In order to finance the Facilities it is necessary to incur bonded indebtedness on behalf of the CFD in the amount not to exceed $45,000,000, the repayment of which is to be secured by certain special taxes levied in accordance with Section 53340 et seq. of the Act on all property within the CFD, other than those properties exempted from taxation as provided in the rate and method of apportionment attached as Exhibit A to the Resolution of Intention. The bonded indebtedness will be incurred for the purpose of financing the costs of designing, constructing and acquiring the Facilities, the acquisition of necessary equipment and property therefor and fulfilling contractual commitments and carrying out the powers and purposes of the CFD, including, but not limited to, the financing of the costs associated with the issuance of the bonds and all other costs necessary to finance the Facilities which are permitted to be financed pursuant to the Act. It is the intent of the City Council, acting as the legislative body of the CFD, to authorize the sale of bonds in one or more series, in the maximum aggregate principal amount not to exceed $45,000,000, bearing interest payable semi-annually or in such other manner as the City Council shall determine at a maximum interest rate of 12 percent per annum or such rate not in excess of the maximum rate permitted by law at the time the bonds are issued. The term of the bonds of each series shall be determined pursuant to a resolution of the City Council authorizing the issuance of the bonds of such series, but such term shall in no event exceed 40 years or such longer term as is then permitted by law. Given that no single family residential parcel will be subject to the special tax of the CFD, the City Council hereby waives its level debt service requirement under City policy for any series of bonds and determines that the annual debt service of a series of bonds may escalate. A special community facilities district election shall be conducted on April 12, 2016. The special election shall be conducted by hand delivered or mailed ballot election with return postage prepaid. The ballots shall be returned to the office of the election officer no later than 11:00 o'clock pm on April 12, 2016. 42205271.1 Packet Pg. 58 8.b FUNDING AND ACQUISITION AGREEMENT THIS FUNDING AND ACQUISITION AGREEMENT, dated as of April _, 2016 (this "Agreement"), is by and between (i) the City of Santa Clarita, California (the "City"), acting on behalf of City of Santa Clarita Community Facilities District No. 2016-1 (Vista Canyon) (the "District"), and (ii) Vista Canyon Ranch LLC, a California limited liability company, and Vista Canyon Phase I, LLC, a Delaware limited liability company (collectively, the "Owner"). RECITALS WHEREAS, the City has undertaken proceedings to form the District, authorize the levy of special taxes within the District, and authorize the issuance of Bonds secured by such special taxes levied by the District pursuant to the Mello -Roos Community Facilities Act of 1982 (the "Act") to fund the acquisition and construction of the Public Facilities (as defined below) and related costs. The City will use the proceeds of the Bonds to, among other things, finance the payment of the Purchase Price of the Public Facilities. WHEREAS, the Public Facilities consists primarily of one or more parking structures within the vicinity of and beneficial to the City, and the City and the Owner will benefit from a coordinated plan of financing, designing, engineering and construction of the Public Facilities. WHEREAS, the Owner and the City wish to finance the acquisition and construction of the Public Facilities and the payment therefor by entering into this Agreement for the financing of the acquisition of the Public Facilities and payment thereof as shown in Exhibit A hereto (as it may be amended and supplemented) with CFD Sources, including funds in the Acquisition and Construction Fund. WHEREAS, Owner and City will cooperate to enter into an agreement by which Owner may acquire one or more parking spaces (based on the construction cost of said spaces) in the Public Facilities to service the development being constructed by Owner. WHEREAS, the City has determined that they will obtain no advantage from undertaking the construction of the Public Facilities, and that the provisions of this Agreement require that the Public Facilities constructed by the Owner and completed after formation of the District be constructed as if they had been constructed under the direction and supervision of the City. Notwithstanding the foregoing, upon mutual agreement of the City and the Owner, the City or its designee may construct any of the Public Facilities, financed in whole or in part with CFD Sources, including funds in the Acquisition and Construction Fund as set forth in Section 3.7 below. WHEREAS, in consideration of the mutual promises and covenants set forth herein, and for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the City and the Owner agree that the foregoing recitals, as applicable to each, are true and correct and further make the agreements set forth herein. NOW, THEREFORE, for and in consideration of the mutual promises and covenants herein contained, the parties hereto agree as follows: Packet Pg. 59 ARTICLE I DEFINITIONS Section 1.1 Definitions. The following terms shall have the meanings ascribed to them in this Section 1.1 for purposes of this Agreement. Unless otherwise indicated, any other terms, capitalized or not, when used herein shall have the meanings ascribed to them in the Fiscal Agent Agreement (as hereinafter defined). "Acceptance Date" means the date the City approves a Payment Request. "Acceptable Title" means title to land or interest therein, in form acceptable to the City, free and clear of all liens, taxes, assessments, leases, easements and encumbrances, whether or not recorded, other than exceptions that do not materially interfere with the actual or intended use of the land or interest therein or as shall have otherwise been approved by the City. "Acquisition and Construction Fund" means the Acquisition and Construction Fund, and any accounts established therein, established by a Fiscal Agent Agreement relating to the issuance of a series of the Bonds, from which the Purchase Price of a Public Facility shall be paid and from which Actual Costs of a Public Facility may be financed in accordance with the Construction Election. "Act" means The Mello -Roos Community Facilities Act of 1982, being Chapter 2.5 of Part 1 of Division 2 of Title 5 (commencing with Section 53311) of the California Government Code. "Actual Cost" means the cost of a Public Facility, which cost may include: (i) the actual hard costs for the construction of such Public Facility, including labor, materials and equipment costs, (ii) the costs incurred in preparing the Plans for such Public Facility and the related costs of environmental evaluations of the Public Facility, (iii) the fees paid to governmental agencies for, and other costs incurred in connection with, obtaining permits, licenses or other governmental approvals for such Public Facility, (iv) professional costs associated with such Public Facility, such as engineering, legal, accounting, inspection, construction staking, materials testing and similar professional services; (v) costs directly related to the construction and/or acquisition of a Public Facility, such as costs of payment, performance and/or maintenance bonds, and insurance costs (including costs of any title insurance required hereunder); (vi) costs of construction management and supervision equal to five percent (5%) of the amount set forth in (i) above for a Public Facility; and (vii) the value of any real property or interests therein ("Real Estate") that (1) are required for the development of any Public Facility such as temporary construction easements, haul roads, etc., or (2) are required to be conveyed with the Public Facility, in an amount equal to the actual cost of the Real Estate purchased from an independent third party or the fair market value of the land as determined by the City. Actual Cost shall not include any internal or overhead costs of the Owner other than the amount for construction management and supervision set forth in clause (vi) above. "Affiliate" means any entity owned, controlled or under common ownership or control by or with, as applicable, the Owner and includes all general partners of any entity which is a 41756522.4 2 8.b . Packet Pg. 60 partnership. Control shall mean ownership of more than fifty percent (50%) of the voting power of or ownership interest in the respective entity. "Agreement" means this Funding and Acquisition Agreement, together with any Supplement hereto. "Bonds" means the bonds, notes or other indebtedness of the District issued to generate proceeds for the Acquisition and Construction Fund. "CFD Sources" is defined in Section 2.2 herein. "City" means the City of Santa Clarita, California. "Construction Election" shall have the meaning set forth in Section 3.7 below. "County" means the County of Los Angeles, California. "Director" means the Director of Public Works of the City, or the written designee of such officer acting as such under this Agreement. "District" means City of Santa Clarita Community Facilities District No. 2016-1 (Vista Canyon), a community facilities district organized and existing under the laws of the State of California. "District Representative" means the City Manager of the City, or the written designee of such officer. "Fiscal Agent" means the fiscal agent identified in a Fiscal Agent Agreement, or any successor thereto acting as fiscal agent under the Fiscal Agent Agreement. "Fiscal Agent Agreement" means a fiscal agent agreement between the City and the Fiscal Agent, providing for, among other matters, the issuance of the Bonds and the establishment of an Acquisition and Construction Fund, as it may be amended or supplemented from time to time. "Improvement Agreement" shall have the meaning set forth in Section 2.3 below. "Owner" means, collectively, Vista Canyon Ranch LLC, a California limited liability company, and Vista Canyon Phase I, LLC, a Delaware limited liability company, and their respective successors and assigns. "Party" means either the City or the Owner; "Parties" mean the Owner and the City. "Payment Request" means a document, substantially in the form of Exhibit B hereto, to be used in requesting a payment of a Purchase Price. "Plans" means the plans, specifications, schedules and related construction contracts for any Public Facility approved pursuant to applicable standards of the City, inclusive of all change orders, if any. As of the date of this Agreement, the City standards for construction are the 41756522.4 3 Packet Pg. 61 Greenbook Standard Specifications for Public Works Construction and the Los Angeles County Design Standards and Guidelines, as amended or modified from time to time. "Project" means the development within the District commonly known as "Vista Canyon." "Public Facility" or "Public Facilities" means one or more of the public facilities described in Exhibit A hereto, as it may be amended or supplemented, which are to be owned, operated, and maintained by the City and are eligible to be financed out of the Acquisition and Construction Fund; provided in no event shall any payment be made for any Public Facility unless such Public Facility, as determined by the Director in its sole discretion, (i) has been completed in accordance with the Plans therefor and (ii) is functional and capable of serviceable use for its intended purpose. "Purchase Price" means the amount paid by the District for a Public Facility in an amount equal to the lesser of the Actual Cost or the value of such Public Facility, as determined in accordance with Section 4.4 below. "Rate and Method" means the rate and method of apportionment of special taxes approved for the District. "Risk Manager" shall mean the person acting in the capacity of Risk Manager for the City. "Supplement" means a written document amending, supplementing or otherwise modifying this Agreement and any exhibit hereto, including any amendments to the list of Public Facilities in Exhibit A, and/or the addition to Exhibit A of additional Public Facilities to be financed with CFD Sources, including the proceeds of the Bonds deposited in the Acquisition and Construction Fund. ARTICLE II FUNDING Section 2.1 Proceedings. The City shall conduct all necessary proceedings under the Act for the issuance, sale and delivery of each series of Bonds. Bonds may not be issued unless and until the City receives an executed notice from the Owner requesting such issuance. Upon the City's receipt of such issuance notice, the Owner and the City staff will meet regarding the amount, timing and other material aspects of each series of the Bonds, but the legal proceedings and the series, principal amounts, rates, terms and conditions and timing of the sale of the Bonds shall in all respects be solely determined by the City Council of the City, acting as the governing body of the District. Subject to the foregoing discretion of the governing body of the District, the District may issue one or more series of Bonds with maturities determined solely by the District with the advice of its financial adviser, in coordination with the Owner's timing of development within the District, and subject to sound municipal finance practices and then current industry standards. Upon the City Manager's request, the Owner shall deposit funds with the City to pay for reasonable costs to be incurred by the City related to the issuance of such Bonds including, without limitation, appraisal, market absorption study, special tax consultant, 41756522.4 4 8.b Packet Pg. 62 8.b bond and issuer's counsel, and city attorney and staff costs. Any funds deposited by the Owner and expended by the City shall be subject to reimbursement solely out of the proceeds of the applicable Bonds. Any unexpended funds deposited by the Owner with the City pursuant to this Section 2.1 and remaining on deposit with the City following the issuance of the applicable series of Bonds or the abandonment of efforts to issue such Bonds shall be returned to the Owner. Section 2.2 Bond Proceeds and Special Taxes. The City shall not be obligated to pay the Purchase Price of any Public Facility, except from amounts on deposit in the Acquisition and Construction Fund(s), prepayments of special taxes that are collected for construction of Public Facilities both before and after Bonds have been issued, and special taxes collected directly for the construction of Public Facilities, less amounts allocated for the Transit Station described in Section 2.3 (collectively, the "CFD Sources"). The City makes no warranty, express or implied, that the CFD Sources, and any investment earnings thereon, will be sufficient to pay the Purchase Price of all of the Public Facilities. To the extent allowed under the Rate and Method, the City agrees that special taxes shall be levied on property in the District to pay directly for Public Facilities, if Bonds have not previously been issued secured by such special taxes. Such special taxes levied and collected by the City and any prepayment of special taxes collected prior to the issuance of Bonds, following deduction for administrative expenses o the District, shall be held by the City and disbursed 85% to pay the Purchase Price of Public Facilities and 15% to fund the Transit Station specified in Section 2.3, and, upon the issuance of Bonds, such special taxes still held by the City shall be allocable 85% for deposit in the Acquisition and Construction Fund and 15% for the Transit Station. Section 2.3 Issuance of Bonds. It is anticipated that two or more series of Bonds will be issued. The term of each series of Bonds shall be determined by the District in its sole discretion with the advice of its financial advisor. The total amount of the Bonds to be issued shall be based on projected annual special taxes upon buildout of the Project providing for funding of 110% of the combined scheduled debt service on all series of Bonds. The parties anticipate that the debt service for each series of Bonds is expected to increase by two percent each year. The priority for application of the proceeds of each series of Bonds shall be as follows: (i) First Priority: To allocate such amount of capitalized interest for the Bonds up to 24 months or such lesser term requested by the Owner; (ii) Second Priority: To deposit in the Cost of Issuance Fund (as defined in the Fiscal Agent Agreement) an amount sufficient to pay the costs of issuing the Bonds and reimbursing the Owner any deposits provided to the City for formation of the District, together with all other un -reimbursed costs incurred by the City to such date in connection with the issuance of the Bonds, as authorized under the Act; (iii) Third Priority: To deposit to the Reserve Fund (defined in the Fiscal Agent Agreement), an amount sufficient to fund the reserve requirement for the Bonds; 41756522.4 5 Packet Pg. 63 (iv) Fourth Priority: To fund an amount for the Transit Station (as defined in the Transit Funding Agreement between Owner and District) equal to 15% of the amount of Bond proceeds remaining after funding the first, second and third priorities above; and (v) Fifth Priority: To deposit all remaining Bond proceeds in the Acquisition and Construction Fund for financing of the Public Facilities in the priority set forth in Exhibit A (it being understood and agreed that a Public Facility higher in priority must be financed in full before a Public Facility lower in priority may be financed). Section 2.4 Proceeds. The proceeds of each series of Bonds shall be deposited, held, invested, reinvested and disbursed as provided above and in the Fiscal Agent Agreement. A portion of the proceeds of the Bonds will be set aside in the Acquisition and Construction Fund. Moneys in the Acquisition and Construction Fund shall be deposited, held, invested, reinvested and disbursed therefrom in accordance with the provisions of the Fiscal Agent Agreement and the applicable provisions hereof for payment of all or a portion of the Purchase Price of the Public Facilities, all as herein provided. Unless otherwise requested in writing by the Owner prior to issuance of each series of Bonds, earnings on amounts in the Acquisition and Construction Fund shall be retained therein and shall be available to pay the Purchase Price of Public Facilities until either (i) all Public Facilities have been financed, as evidenced by a certificate provided by the Owner, or (ii) the Owner provides a certificate to the District indicating that the funds on deposit in the Acquisition and Construction Fund are sufficient to finance the remaining Public Facilities for which the Owner expects to submit a Payment Request, at which time any earnings shall be transferred to pay debt service on the Bonds. Earnings on amounts in the reserve fund(s) created under the Fiscal Agent Agreement, shall be deposited as set forth in the Fiscal Agent Agreement. The Owner acknowledges that any lack of availability of CFD Sources, including amounts in the Acquisition and Construction Fund, to pay the Purchase Price of any Public Facility, shall in no way diminish any obligation of the Owner with respect to the construction of or contributions for public facilities (including the Public Facilities) and mitigation measures required in connection with the Project by any development or other agreement to which the Owner is a party, or any governmental approval to which the Owner is subject (collectively, the "Improvement Agreements"). The Owner may provide a written notice to District indicating that it shall not request the issuance of Bonds. Upon receipt of such notice and the Owner's advance of the City's costs of preparing and recording a notice of cancellation of special taxes and extinguishment of lien ("Notice of Cancellation") with respect to all property within the District, the City shall record the Notice of Cancellation terminating the authority to levy special taxes in the District pursuant to the Rate and Method. Section 2.5 Continuing Disclosure Agreement. The Owner agrees to provide to the City, and to require each transferee or assignee to provide to the City all information regarding the development within the District, including the financing plan for such development, which is necessary to ensure that the City complies with its continuing disclosure obligations under the Fiscal Agent Agreement and all other applicable federal and state securities laws. 41756522.4 6 8.b Packet Pg. 64 8.b ARTICLE III CONSTRUCTION OF PUBLIC FACILITIES Section 3.1 Plans. To the extent and at the time required by the Improvement Agreements, the Owner shall cause Plans to be prepared for each Public Facility. The Owner shall obtain the written approval of the Plans in accordance with applicable ordinances and regulations of the City. Section 3.2 Construction. This Agreement shall not expand, limit or otherwise affect any obligation of the Owner under any Improvement Agreements. All Public Facilities shall be constructed in accordance with the Improvement Agreements and the approved Plans. Section 3.3 Relationship to Public Works. This Agreement is for the acquisition of and payment for the Public Facilities thereof by the City from CFD Sources and is not intended to be a public works contract. Notwithstanding the above, the City and the Owner agree that the Public Facilities shall be constructed by the Owner as if they had been constructed under the direction and supervision of the City, and the Owner shall award all contracts for the construction of the Public Facilities to be constructed by the Owner as provided herein, and that this Agreement is necessary to assure the timely and satisfactory completion of such Public Facilities. From time to time at the request of the District, the District Representative or the Owner, the Owner and the Director and/or the District Representative, as applicable, shall meet and confer regarding matters arising hereunder with respect to the Public Facilities, the progress in constructing and acquiring the same, and as to any other matter related to the Public Facilities or this Agreement. Section 3.4 Labor Code Provisions. The Owner agrees to comply with the provisions of Sections 1720 et seq. of the Labor Code with respect to prevailing wages. In addition, the Owner represents and warrants that with respect to any and all contracts awarded prior to the date of this Agreement for any Public Facility, the Owner has complied with any applicable law or regulation for the payment of prevailing wages, including without limitation the provisions of Sections 1720 et seq. of the Labor Code with respect to prevailing wages. Section 3.5 Contractor. In performing this Agreement, the Owner is an independent contractor and not an agent or employee of the City. Except from the CFD Sources as provided in this Agreement, the City shall not be responsible for making any payments to any contractor, subcontractor, agent, consultant, employee or supplier of the Owner. Section 3.6 Contracts and Change Orders. The Owner shall be responsible for entering into all contracts and any supplemental agreements (commonly referred to as "change orders") required for the construction of the Public Facilities to be constructed by the Owner. The Owner shall be required to show evidence that the Owner complied with the procedures set forth in Exhibit "D" to this Agreement for the construction of each Public Facility for which the Owner submits a Payment Request. 41756522.4 7 Packet Pg. 66 Except for a contract for any Public Facility that pursuant to Section 53313.5 of the Act, was completed (as determined by and at the sole discretion of the Director) before the City Council's adoption on April 12, 2016 of Resolution No. 2016- to establish the District, the Owner will represent and warrant that all contracts for Public Facilities for which the Owner submits a Payment Request were entered into pursuant to a public bid process consistent with Exhibit "D" of this Agreement. Section 3.7 Construction Election. The Owner and the City may mutually elect in writing (the "Construction Election") to cause any or all of the applicable Public Facilities to be constructed by the City, and financed out of the CFD Sources in accordance with the terms and conditions described in this Section 3.7 and the Improvement Agreements and subject to the availability of sufficient funds, including the proceeds of the Bonds. If the Owner and the City make the Construction Election with respect to a Public Facility, the Owner shall transfer Acceptable Title to the land or right-of-ways then owned by the Owner on and over such real property on which the Public Facility is to be constructed. Upon completion of a Public Facility for which a Construction Election has been made, payment shall be made pursuant to Article IV below for the Purchase Price thereof incurred by the Owner prior to the Construction Election. Section 3.8 Notice of Completion and Lien Releases. Upon completion of the construction of a Public Facility, the Owner shall notify the Director in writing of such completion and shall prepare and execute a Notice of Completion for such Public Facility in the form prescribed by Section 8182 of the California Civil Code (including without limitation, execution by the Owner as an owner, and recital of the name and address of the City as an owner of an interest as a vendee under a contract of purchase), and in a form acceptable to the Director, and shall record such notice in the Official Records of the County of Los Angeles. The Owner shall cause its contractors to provide unconditional lien releases for such Public Facility in accordance with Section 8138 of the Civil Code. ARTICLE IV ACQUISITION AND PAYMENT Section 4.1 Inspection. No payment hereunder shall be made by the City to the Owner for a Public Facility until the Public Facility has been inspected by the City. Unless otherwise provided in a Supplement, the City shall make or cause to be made regular on-going site inspections of the Public Facilities to be acquired hereunder. Section 4.2 Agreement to Sell and Purchase Public Facilities. The Owner hereby agrees to sell to the City (or a related entity as designated by the City), and the City (or a related entity designated by the City) hereby agrees to purchase from the Owner, the Public Facilities constructed by the Owner for their respective Purchase Prices, subject to the terms and conditions hereof. The purchase may also include the land underlying the Public Facility. The City shall not be obligated to purchase any Public Facility until the Public Facility is completed and the acceptance by the City for such Public Facility has occurred. 41756522.4 8 Packet Pg. 66 Section 4.3 Requests. In order to receive the Purchase Price for a completed Public Facility, inspection thereof under Section 4. 1, if applicable, shall have been made and the Owner shall deliver to the District Representative and the Director: (i) a Payment Request in the form of Exhibit B hereto for such Public Facility, and (ii) if payment is requested for a completed Public Facility, (a) if the property on which the Public Facility is located is not owned by the City at the time of the request, a copy of the recorded documents conveying to the City Acceptable Title to the real property on, in or over which such Public Facility is located, as described in Section 5.1 hereof, (b) a copy of the recorded notice of completion of such Public Facility (meeting the requirements of Section 3.9), (c) an assignment of the warranties and guaranties for such Public Facility, as described in Section 5.5 hereof, in a form acceptable to the City, and (d) to the extent paid for with the proceeds of the Bonds, an assignment to the District of any reimbursements that may be payable with respect to the Public Facility, such as public or private utility reimbursements. Section 4.4 Determination of Value for a Public Facility. The value of a Public Facility shall be equal to the (i) Actual Cost of construction of such Public Facility, less such portion of such cost of construction which the Director has, in his or her reasonable professional opinion, determined would not have been incurred had such Public Facility been constructed pursuant to a public works contract awarded by the City, and (ii) the value of the underlying land, if such land is conveyed to the City along with the Public Facility. As a non-exclusive example, if the Owner pays overtime to complete the construction of street improvements to provide access to a parcel by a date certain as required by the Owner's lease obligations to a tenant occupying such parcel, the cost of such overtime will be deducted from the overall cost of construction of such Public Facility to determine the value of such Public Facility. The costs shown in Exhibit A are estimates only and shall not prevent the financing of the Actual Cost of the Public Facility. Notwithstanding the above, the Purchase Price of a Public Facility shall exclude the value of any portion of the Public Facility which portion of the Public Facility, or its contemplated use, would make the Bonds "private activity bonds" under Section 141 of the Internal Revenue Code, or would constitute an unconstitutional gift of public funds. Disputes by the Owner related to the determination of value shall be presented to and resolved by the City Manager, and the City Manager's decision in the matter shall be final. Section 4.5 Payment Requests. Upon receipt of a Payment Request (and all accompanying documentation), the Director shall conduct a review in order to confirm that such request is complete, that such Public Facility identified therein was constructed substantially in accordance with the Plans therefor, and to verify and approve the Purchase Price of such Public Facility specified in such Payment Request. The Director shall conduct each such review in an expeditious manner and the Owner agrees to reasonably cooperate with the Director in conducting each such review and to provide the Director with such additional information and documentation as is reasonably necessary for the Director to conclude each such review. Within twenty (20) business days of receipt of any Payment Request, the Director shall notify the Owner whether such Payment Request is complete, and, if not, what additional documentation must be provided. If such Payment Request is complete, the Director will provide a written approval or denial of the request within twenty (20) business days of its submittal. If the Director disapproves any Payment Request, the Director shall provide written notice of disapproval to the 41756522.4 9 8.b Packet Pg. 67 Owner within such twenty (20) business day period stating in reasonable detail the reasons for such disapproval and the changes to the Payment Request necessary to obtain the Director's approval. The Director's review of any Payment Request shall be made on a Public Facility basis such that the Director shall approve for payment any Public Facilities covered by a Payment Request that comply with the requirements of this Agreement even if the Director disapproves other Public Facilities included as part of the same Payment Request. If the Director disputes the Actual Cost of any Public Facility covered by the Payment Request, the Director shall approve for payment a Purchase Price in an amount the Director determines is appropriate (which shall not be less than the amounts of contracts and change orders previously approved by the Director) and shall deliver notice of disapproval of the remaining amount. If the Director disapproves any revised Payment Request, the Director will provide a written notice of approval or denial to the Owner within fifteen (15) business days after receipt of the revised Payment Request, which notice shall describe in reasonable detail the reason for the denial, if applicable. The Director shall only be entitled to withhold approval for payment of any Public Facility if (i) a notice of completion meeting the requirements of Section 3.9 has not been recorded for the Public Facility and final conditional lien releases for labor and materials provided in connection with such Public Facilities have not been submitted to the Director, (ii) the Public Facility has not been constructed substantially in accordance with the Plans, (iii) the Director disputes the Actual Cost of any Public Facility stated in the Payment Request, (iv) the Owner is delinquent in paying its special taxes or (v) the City Council has not taken final action to accept dedication of, or transfer of title to, the Public Facility. Nothing in this Agreement shall be deemed to prohibit the Owner from contesting in good faith the validity or amount of any mechanics' or materialman's lien nor limit the remedies available to the Owner with respect thereto so long as such delay in performance shall not subject the Public Facilities thereof to foreclosure, forfeiture or sale. In the event that any such lien is contested, the Owner shall only be required to post or cause the delivery of a bond in an amount equal to the amount in dispute with respect to any such contested lien, so long as such bond is drawn on an obligor and is otherwise in a form acceptable to the Director. Section 4.6 Payment. Upon approval of the Payment Request (or any portion thereof) by the Director, the Director shall sign the Payment Request and forward the same to the District Representative. Upon receipt of the approved Payment Request, the District Representative shall, within five (5) business days of receipt of the approved Payment Request, cause the same to be paid, to the extent of CFD Sources, including funds then on deposit in the Acquisition and Construction Fund. Any approved Payment Request not paid due to an insufficiency of CFD Sources shall be paid promptly following the receipt of CFD Sources, including the deposit into the Acquisition and Construction Fund of additional proceeds of the Bonds, earnings on the Acquisition and Construction Fund or other funds transferred pursuant to the Fiscal Agent Agreement. The Purchase Price paid hereunder for any Public Facility shall constitute payment in full for such Public Facility, including, without limitation, payment for all labor, materials, equipment, tools and services used or incorporated in the work, supervision, administration, overhead, expenses and any and all other things required, furnished or incurred for completion of such Public Facility, as specified in the Plans. 41756522.4 10 8.b Packet Pg. 68 Section 4.7 Restrictions on Payments. Notwithstanding any other provisions of this Agreement, the following restrictions shall apply to any payments made to the Owner under Sections 4.5 and 4.6 hereof: A. Amounts of Payments. Payments for each Public Facility will be made only in the amount of the Purchase Price for the respective Public Facility. The City agrees that the Actual Cost of a Public Facility may fluctuate from the budgeted amounts. The City agrees that the Owner has the latitude to increase or decrease the reimbursement of a Public Facility, as the Purchase Price is determined. In no case will the total Purchase Price paid exceed the total amount of CFD Sources from time to time, including funds available in the Acquisition and Construction Fund. Nothing herein shall require the City in any event (i) to pay more than the Purchase Price of a Public Facility; or (ii) to make any payment beyond the CFD Sources available from time to time for such Public Facilities. The Parties hereto acknowledge and agree that all payments to the Owner for the Purchase Prices of Public Facilities are intended to be reimbursed to the Owner for services provided or costs incurred by the Owner or moneys already expended or incurred by the Owner to third parties in respect of such Public Facilities. B. Frequency. No more than one Payment Request shall be submitted in any calendar month although a Payment Request may relate to more than one Public Facility. Section 4.8 Defective or Nonconforming Work. If any of the work done or materials furnished for a Public Facility are found by the Director to be defective or not in substantial accordance with the applicable Plans: (i) if such finding is made prior to payment for the Purchase Price of such Public Facility hereunder, the Director may withhold payment therefor until such defect or nonconformance is corrected, or (ii) if such finding is made after payment of the Purchase Price of such Public Facility, the City and the Owner shall act in accordance with the applicable Improvement Agreement, if any. Section 4.9 Modification of Public Facilities. The District, the City, and the Owner may make modifications in the composition and description of the Public Facilities whenever the District, the City, and the Owner deem such modifications to be appropriate. Any such modification shall be approved and implemented by the Director and the Owner executing a supplement to Exhibit A containing a description of the modified Public Facility. Upon the execution of any such supplement to Exhibit A, the description of the Public Facility in Exhibit A shall be deemed to have been modified in accordance therewith. Any such modification shall not diminish the overall public facilities to be provided pursuant to the Improvement Agreements. Section 4.10 Expectations of the Parties. The City understands and agrees that (i) Owner will be constructing Public Facilities prior to the availability of CFD Sources that will be used to pay for such Public Facilities, (ii) the City may be inspecting such Public Facilities and processing and completing Payment Requests for the payment on such Public Facilities with knowledge that there may be insufficient CFD Sources available at such time, (iii) the Public Facilities may be conveyed to and accepted by the City when there are insufficient CFD Sources to pay the Purchase Prices of such Public Facilities, (iv) in any such case, the payment of any 41756522.4 11 Packet Pg. 69 approved payment requests for the Purchase Prices of such Public Facilities will be deferred until there are CFD Sources available to pay all or part of the Purchase Prices of such Public Facilities, and (v) the City shall make payments from time to time in as many installments as necessary as additional CFD Sources become available until such time as the entire Purchase Price of a Public Facility is paid in full. At all times, Owner will be constructing such Public Facilities with the expectation that the Purchase Prices for such Public Facilities will be paid from the CFD Sources. The conveyance of Public Facilities to the City prior to receipt of the Purchase Prices for such Public Facilities shall not be construed as a dedication or gift, or a waiver of the payment of the Purchase Prices, or any part thereof, for such Public Facilities. ARTICLE V OWNERSHIP AND TRANSFER OF PUBLIC FACILITIES Section 5.1 Conveyance of Land and Easements for the City. Acceptable Title to all property on, in or over which each Public Facility to be acquired by the City will be located, shall be conveyed to the City by way of grant deed, quitclaim, or dedication or irrevocable offer of dedication of such property, or easement thereon, in accordance with the applicable Improvement Agreement, if any. The Owner agrees to provide the City such documents as are required to obtain Acceptable Title with respect to these Public Facilities funded pursuant to this Agreement. Completion of the transfer of title to land shall be accomplished prior to the payment of the Purchase Price for a Public Facility and shall be evidenced by recordation of the acceptance thereof by the City. Notwithstanding the foregoing, the City and Owner may agree to (i) convey only the Public Facility and not the underlying land, and/or (ii) convey some or all of the Public Facility as a condominium. Section 5.2 Evidence and Insurance. Within fifteen (15) calendar days following the request of the City, the Owner shall furnish to the City a preliminary title report for such land not previously dedicated or otherwise conveyed to the City, for review and approval prior to the transfer of Acceptable Title to a Public Facility to the City. Within ten (10) calendar days thereafter, the Director shall approve the preliminary title report unless it reveals a matter which, in the judgment of the Director, could materially affect the City's use of any part of the property or easement covered by the preliminary title report for the purpose for which such property or easement is being conveyed. In the event the Director does not approve the preliminary title report, the City shall not be obligated to accept title to such Public Facility or pay the Purchase Price for such Public Facility until such objections to title have been cured to the satisfaction of the Director. The failure of the Director to provide written approval to the Owner shall be deemed to be a disapproval. Section 5.3 Facilities Constructed on Private Lands. If any Public Facilities to be acquired are located on privately -owned land, the owner thereof shall retain title to the land and the completed Public Facilities until acquisition of the Public Facilities under Article V hereof. Pending the completion of such transfer and where the Owner has received any payment for any such Public Facility, the Owner shall be responsible for maintaining the land and any Public Facilities in good and safe condition. 41756522.4 12 8.b Packet Pg. 70 Section 5.4 Facilities Constructed on City Land. If the Public Facilities to be acquired are on land owned by the City, the City hereby grants to the Owner a license to enter upon such land for purposes related to the construction (and maintenance pending acquisition) of the Public Facilities. The provisions for inspection and acceptance of such Public Facilities otherwise provided herein shall apply. Section 5.5 Maintenance and Warranties. The Owner shall maintain each Public Facility constructed by the Owner in good and safe condition until the Acceptance Date of the Public Facility. Prior to the Acceptance Date, the Owner shall be responsible for performing any required maintenance on any Public Facility constructed by the Owner. On or before the Acceptance Date of the Public Facility, the Owner shall assign to the City, to the extent assignable, all of the Owner's rights in any warranties, guarantees, maintenance obligations or other evidence of contingent obligations of third persons with respect to such Public Facility. After the Acceptance Date, the Owner shall not be responsible for maintaining such Public Facility. Any warranties, guarantees or other evidences of contingent obligations of third parties with respect to the Public Facilities to be acquired by the City shall be delivered to the Director as part of the transfer of title. ARTICLE VI INSURANCE Section 6.1 Requirements. The Owner shall, at all times prior to the final Acceptance Date of all Public Facilities, maintain, deliver to the City evidence of and keep in full force and effect, or cause to be maintained, delivered to the City evidence of and kept in full force and effect, the insurance policies and endorsements required pursuant to the Improvement Agreements or if a Public Facility is not subject to an Improvement Agreement, the insurance policies meeting the coverage requirements set forth in Section 6.1.J. below. A. Time for Compliance. The Owner shall not commence any physical work on the Public Facilities until it has provided evidence satisfactory to the Risk Manager that it has secured all insurance required under this Section 6.1. In addition, the Owner shall not allow any subcontractor to commence work on any subcontract until it has provided evidence satisfactory to the City that the subcontractor has secured all insurance required under this Section 6.1. Any insurance policy or endorsement required pursuant to this Section 6.1 shall be procured by the Owner at its expense (but subject to reimbursement to the extent permitted as an Actual Cost). B. Insurance Endorsements. The insurance policies required pursuant to this Section 6.1 (including any insurance policy required pursuant to any Improvement Agreement) shall contain the following provisions, or the Owner shall provide endorsements on forms supplied or approved by the Risk Manager to add the following provisions to its insurance policies: 1. General Liability. (a) The City, the District, and their respective Councilmembers, directors, officials, officers, employees, consultants, agents, and volunteers shall be covered as additional insureds with respect to the construction of the Public Facilities or operations performed by or on behalf of the Owner, including materials, parts or equipment 41756522.4 13 8.b Packet Pg. 71 furnished in connection with such work; (b) the insurance coverage shall be primary and non- contributing insurance as respects the City, the District, and their respective Councilmembers, directors, officials, officers, employees, consultants, agents and volunteers, or if excess, shall stand in an unbroken chain of coverage excess of the Owner's scheduled underlying coverage; and (c) any failure to comply with reporting provisions of the policy shall not affect coverage provided to the City, the District, and their respective Councilmembers, directors, officials, officers, employees, consultants, agents, and volunteers. Any insurance or self-insurance maintained by the City, the District, and their respective Councilmembers, directors, officials, officers, employees, consultants, agents, and volunteers shall be excess of the Owner's insurance and shall not be called upon to contribute with it. 2. Automobile Liability. (a) The City, the District, and their respective Councilmembers, directors, officials, officers, employees, consultants, agents and volunteers shall be covered as additional insureds with respect to the ownership, operation, maintenance, use, loading or unloading of any auto owned, leased, hired or borrowed by the Owner or for which the Owner is responsible; (b) the insurance coverage shall be primary insurance as respects the City, the District, and their respective Councilmembers, directors, officials, officers, employees, consultants, agents, and volunteers, or if excess, shall stand in an unbroken chain of coverage excess of the Owner's scheduled underlying coverage; and (c) any failure to comply with reporting provisions of the policy shall not affect coverage provided to the City, the District, and their respective Councilmembers, directors, officials, officers, employees, consultants, agents, and volunteers. Any insurance or self-insurance maintained by the City, its directors, officials, officers, employees, consultants, agents and volunteers shall be excess of the Owner's insurance and shall not be called upon to contribute with it in any way. 3. Workers' Compensation and Employer's Liability Coverage. The insurer shall agree to waive all rights of subrogation against the City, the District, and their respective Councilmembers, directors, officials, officers, employees, consultants, agents and volunteers for losses paid under the terms of the insurance policy which arise from work performed by the Owner. 4. All Coverages. Each insurance policy required by this Agreement shall be endorsed to state that: (a) coverage shall not be suspended, voided, reduced (in coverage or in limits) or canceled except after thirty (30) days prior written notice by certified mail, return receipt requested, has been given to the Risk Manager; and (b) any failure to comply with reporting or other provisions of the policies, including breaches of warranties, shall not affect coverage provided to the City, the District, and their respective Councilmembers, directors, officials, officers, employees, consultants, agents, and volunteers. Liability coverage shall not be limited to the vicarious liability or supervising role of any additional insured nor shall there be any limitation with the severability clause. Coverage shall contain no limitation endorsements and there shall be no endorsement or modification limiting the scope of coverage for liability arising from pollution, explosion, collapse, underground property damage or employment related practices. All liability insurance shall be on an occurrence basis. Insurance on a claims made basis will be rejected. There shall be no cross policy exclusion. 41756522.4 14 8.b Packet Pg. 72 8.b C. Separation of Insureds; No Special Limitations. All insurance required by this Section 6.1 shall contain standard separation of insureds provisions. In addition, such insurance shall not contain any special limitations on the scope of protection afforded to the City, the District, and their respective Councilmembers, directors, officials, officers, employees, consultants, agents, and volunteers. D. Professional Liability Insurance. All architects, engineers, consultants or design professionals retained by the Owner shall also procure and maintain, for a period of five (5) years following acceptance (pursuant to the terms of this Agreement) of all Public Facilities, errors and omissions liability insurance with a limit of not less than $1,000,000 per occurrence. E. Deductibles and Self -Insurance Retentions. Any deductibles or self- insured retentions must be declared to and approved by the Risk Manager. The Owner shall guarantee that, at the option of the City, either: (1) the insurer shall reduce or eliminate such deductibles or self-insured retentions as respects the City, the District, and their respective Councilmembers, officers, directors, officials, employees, consultants, agents, and volunteers; or (2) the Owner shall procure a bond guaranteeing payment of losses and related investigation costs, claims and administrative and defense expenses. F. Acceptability of Insurers. Insurance is to be placed with insurers authorized to do business in the State of California and with a minimum "Best's" Insurance Guide rating of "A+:VII." Self-insurance will not be considered to comply with these insurance specifications. G. Verification of Coverage. The Owner shall furnish the City with certificates of insurance and endorsements, duly authenticated, evidencing coverage required by this Agreement on forms satisfactory to the Risk Manager and with other evidence of coverage as may be reasonably required by the Risk Manager. The certificates and endorsements for each insurance policy shall be signed by a person authorized by that insurer to bind coverage on its behalf, and shall be on forms supplied or approved by the Risk Manager. All certificates and endorsements must be received and approved by the Risk Manager before work commences. The Risk Manager reserves the right to require complete, certified copies of all required insurance policies, at any time. H. Reduction, Cancellation, Void or Suspended Policy. In the event that any required insurance is reduced in coverage, canceled for any reason, voided or suspended, the Owner agrees that the City may arrange for insurance coverage as specified, and the Owner further agrees that administrative and premium costs may be deducted from any deposits or bonds the City may have, or from the Acquisition and Construction Fund under the Fiscal Agent Agreement. A reduction or cancellation will be grounds for termination of this Agreement and will cause a halt to payment for any Public Facilities until the insurance is reestablished. I. Subcontractors. All contractors and subcontractors shall meet the requirements of this Section 6.1 before commencing any physical work on the Public Facilities. The Owner shall also require all of its contractors and subcontractors to procure and maintain the same insurance required for Owner hereunder until acceptance (pursuant to the terms of this Agreement) of all Public Facilities. In addition, the Owner shall include all contractors and 41756522.4 15 Packet Pg. 73 8.b , subcontractors as insureds under its policies or shall furnish separate certificates and endorsements for each contractor and subcontractor, in form and substance acceptable to the Risk Manager, prior to the contactor and subcontractor entering the job site. All coverages for contractors and subcontractors shall be subject to all of the requirements stated herein. J. Minimum Requirements. If any Public Facility is not subject to an Improvement Agreement, the Owner shall procure and maintain, until acceptance pursuant to the terms of this Agreement of all such Public Facilities, insurance against claims for injuries to persons or damages to property which may arise from or in connection with the performance of the work covered by this Agreement by the Owner, its agents, representatives, employees or subcontractors. Such insurance shall meet at least the following minimum levels of coverage: 1. Minimum Scope of Insurance. Coverage shall be at least as broad as the latest version of the following: (a) General Liability: Insurance Services Office Commercial General Liability coverage (occurrence form CG 0001); (b) Automobile Liability: Insurance Services Office Business Auto Coverage form number CA 0001, code 1 (any auto); (c) Workers' Compensation and Employers' Liability: Workers' Compensation insurance as required by the State of California and Employer's Liability Insurance; and (d) Builders'/All Risk: Builders'/All Risk insurance covering for all risks of loss, including explosion, collapse, underground excavation and removal of lateral support (and including earthquakes and floods if requested by the City). 2. Minimum Limits of Insurance. The Owner shall maintain limits no less than: (a) General Liability: $1,000,000 per occurrence for bodily injury, personal injury and property damage. The general aggregate limit shall apply separately to each construction contract for a Public Facility that is separately bid and shall be $2,000,000. If multiple Public Facilities are aggregated under one construction contract, the Risk Manager may in its sole discretion require a higher general aggregate limit; (b) Automobile Liability: $1,000,000 per accident for bodily injury and property damage; (c) Workers' Compensation and Employer's Liability: Workers' compensation limits as required by the Labor Code of the State of California. Employers Liability limits of $1,000,000 per accident for bodily injury or disease; and (d) Builders'/All Risk: Completed value of the project. 41756522.4 16 Packet Pg. 74 The foregoing requirements as to the insurance coverage to be maintained by the Owner are not intended to and shall not in any manner limit or qualify the liabilities and obligations assumed by the Owner under this Agreement. Section 6.2 Evidence of Insurance. The Owner shall furnish to the City, from time to time upon request, a certificate of insurance regarding each insurance policy required to be maintained by the Owner hereunder. ARTICLE VII REPRESENTATIONS, WARRANTIES AND COVENANTS Section 7.1 Covenants and Warranties of the Owner. Each of Vista Canyon Ranch LLC and Vista Canyon Phase I, LLC represent and warrant as to themselves for the benefit of the City as follows: , A. Organization. The Owner is in compliance in all material respects with the laws of its state of organization, and has the limited liability company power and authority to own its property and assets and to carry on its business as now being conducted and as now contemplated. B. Authorily. The Owner has the power and authority to enter into this Agreement, and has taken all action necessary to cause this Agreement to be executed and delivered, and this Agreement has been duly and validly executed and delivered by the Owner. C. BindinObligation. This Agreement is a legal, valid and binding obligation of the Owner, enforceable against the Owner in accordance with its terms. D. Financial Records. Until one year after the final acceptance of all the Public Facilities, the Owner covenants to maintain proper books of record and account for the construction of the Public Facilities and all costs related thereto. Such accounting books shall be maintained in accordance with generally accepted accounting principles, and shall be available for inspection by the City or its agent at any reasonable time during regular business hours on reasonable notice. E. Plans. The Owner represents that it has obtained or will obtain approval of the Plans for the Public Facilities constructed by the Owner from all appropriate departments of the City and from any other public entity or public utility from which such approval must be obtained. The Owner further agrees that the Public Facilities constructed by the Owner have been or will be constructed in compliance with such approved Plans and any supplemental agreements (change orders) thereto, as approved in the same manner. Section 7.2 Indemnification and Hold Harmless. The Owner and its successors and assigns shall assume the defense of, indemnify, protect and save harmless the City, the District, and each of their respective Councilmembers, directors, officials, officers, employees, consultants, agents, and volunteers (each an "Indemnified Party"), and each and every one of them (including independent contractors who serve as the City's or District's officers or officials), from and against all suits, actions, or other legal proceedings, demands, damages, 41756522.4 17 8.b Packet Pg. 75 injuries, claims, losses, causes of action, liabilities, costs, or expenses of every type and description to which they may be subjected or put, whether known or unknown, existing or potential, anticipated or unanticipated, in law or equity, to property or persons, including wrongful death, by reason of, or resulting or in any manner arising from or incident to, the performance by the Owner (or any of its officers, members, agents, servants, employees, contractors, subcontractors, materialmen, or suppliers) of its obligations under this Agreement, the construction of the Public Facilities (including, but not limited to, failure of the Owner to pay any amount due to any contractor hired by the Owner for the construction of any Public Facility and any fines or penalties arising therefrom, and all damages to property or personal injury by reason of, or in the course of, performing work, which may be caused by any willful or negligent act or omission by the Owner or any of the Owner's employees, or any subcontractor), the presence of any hazardous materials on or in any land conveyed by the Owner to the City hereunder (but excluding hazardous materials which are introduced in or on such land by an Indemnified Party or after the expiration of the period for which the Owner is responsible for maintenance of the related Public Facility pursuant to Section 5.5. hereof), or an alleged misstatement or omission of fact relating to the Owner or its development of the property within the District in any official statement for the District or the Bonds (including, but not limited to, any statements regarding the presence of any hazardous materials or endangered species thereon or therein), including without limitation the payment of all consequential damages and attorneys' fees and other related costs and expenses. No provision of this Agreement shall in any way limit the extent of the Owner's responsibility for payment of damages resulting from the operations of the Owner and its contractors, subcontractors and servants; provided, however, that the Owner shall not be required to indemnify an Indemnified Party as to damages resulting from the negligence or willful misconduct of an Indemnified Party in performing its obligations under this Agreement. The Owner shall defend, at the Owner's own cost, expense and risk, any and all such aforesaid suits, actions or other legal proceedings of every kind that may be brought or instituted against the City or the District, or their respective directors, officials, officers, employees, consultants, agents or volunteers. The Owner shall pay and satisfy any judgment, award or decree that may be rendered against City or the District, or their Councilmembers, directors, officials, officers, employees, consultants, volunteers or agents, in any such suit, action or other legal proceeding. The Owner shall reimburse City, the District, and their respective Councilmembers, directors, officials, officers, employees, consultants, agents and/or volunteers, for any and all legal expenses and costs incurred by each of them in connection therewith or in enforcing the indemnity herein provided. The City and District do not, and shall not, waive any rights against the Owner which either may have by reason of the aforesaid hold harmless agreements because of the acceptance by the City, or deposit with the City by the Owner of any insurance policies described in Section 6.1. The aforesaid hold harmless agreement by the Owner shall apply to all damages and claims for damages of every kind suffered, or alleged to have been suffered by reasons of any of the aforesaid operations of the Owner, or any contractor, subcontractor or servant, regardless of whether or not such insurance policies are determined to be applicable to any of such damages or claims for damages. 41756522.4 18 Packet Pg. 7& Except for the negligence or willful misconduct of the Indemnified Parties, no act by the City, the District, or their respective representatives in processing or accepting any plans, in releasing any bond, or in inspecting or accepting any work, shall in any respect relieve the Owner or anyone else from any legal responsibility, obligation or liability it might otherwise have. The indemnification and hold harmless provisions of this Section 7.2 shall survive the termination of this Agreement, the completion of construction of the Public Facilities, and the conveyance of title thereto to the City. No provision of this Agreement shall in any way limit the Owner's responsibility for payment of damages resulting from the operations of the Owner and its agents, employees or contractors. ARTICLE VIII DEFAULT AND REMEDIES Section 8.1 Default Remedies. Failure by either Party to perform any action or covenant required by this Agreement within the time periods provided herein following Notice and failure to cure as described hereafter, constitutes a "Default" under this Agreement. A Party claiming a Default shall give written Notice of Default to the other Party specifying such Default. Except as otherwise expressly provided in this Agreement, the claimant shall not institute any proceeding against any other Party, and the other Parry shall not be in Default if such party within thirty (30) days from receipt of such Notice immediately, with due diligence, commences to cure, correct or remedy such failure or delay and shall complete such cure, correction or remedy with diligence. Section 8.2 Institution of Legal Actions. The Parties shall be entitled to seek any remedy available at law and in equity for the other Party's Default. All legal actions must be instituted in the Superior Court of the County of Los Angeles, State of California, or in the United States District Court for District of California in which Los Angeles County is located. Section 8.3 Acceptance of Service of Process. In the event that any legal action is commenced by the Owner against the City, service of process on the City shall be made by personal service upon the City Clerk or in such other manner as may be provided by law. In the event that any legal action is commenced by the City against the Owner, service of process on the Owner shall be made in such manner as may be provided by law. Section 8.4 Rights and Remedies Are Cumulative. Except as otherwise expressly stated in this Agreement, the rights and remedies of the Parties are cumulative, and the exercise by either Party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same Default or any other Default by the other Party. Section 8.5 Inaction Not a Waiver of Default. Any failures or delays by either Party in asserting any of its rights and remedies as to any Default shall not operate as a waiver of any Default or of any such rights or remedies, or deprive either such Party of its right to institute and 41756522.4 19 8.b Packet Pg. 77 ` maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. Section 8.6 Applicable Law. The laws of the State of California shall govern the interpretation and enforcement of this Agreement. Section 8.7 Attorneys' Fees. In any action between the Parties to interpret, enforce, reform, rescind or otherwise in connection with any of the terms or provisions of this Agreement, the prevailing party in the action or other proceeding shall be entitled, in addition to damages, injunctive relief or any other relief to which it might be entitled, reasonable costs and expenses including, without limitation, litigation costs, expert witness fees and reasonable attorneys' fees. ARTICLE IX GENERAL Section 9.1 Mutual Consent. This Agreement may be terminated by the mutual written consent of the City and the Owner, and all or any portion of the CFD Sources, including moneys in the Acquisition and Construction Fund, may be used to pay for same, and the Owner shall have no claim or right to any further payments for the Purchase Price of Public Facilities, except as otherwise may be provided in such written consent. Section 9.2 Audit. The City shall have the right, during normal business hours and upon the giving of five (5) business days' prior written notice to the Owner, to review all books and records of the Owner pertaining to costs and expenses incurred by the Owner in relation to any of the Public Facilities, and any bids taken or received for the construction thereof or materials therefor. Section 9.3 Notices, Demands and Communications Between the Parties. Any notices, requests, demands, documents, approvals or disapprovals given or sent under this Agreement from one Party to another (collectively, "Notices") may be personally delivered (including by commercial courier service), transmitted by facsimile (FAX) transmission, deposited with the United States Postal Service for mailing, postage prepaid, or sent by overnight delivery to the address of the other Party as stated in this Section, and shall be deemed to have been given or sent at the time of personal delivery or FAX transmission or, if mailed, on the third day following the date of deposit in the course of transmission with the United States Postal Service or if sent by overnight delivery, on the day following its deposit with the overnight carrier. Notices shall be sent as follows: 41756522.4 If to the City: City of Santa Clarita Attn: Director of Administrative Services 23920 Valencia Boulevard Santa Clarita, California 91355 email address: dhemandez&santa-clarita.com 20 Packet Pg. 78 With copies to: Norton Rose Fulbright US LLP Attn: Maryann Goodkind 555 South Flower Street, 41" Floor Los Angeles, CA 90071 Facsimile No. (213) 892-9328 If to the Owner: Vista Canyon Ranch LLC Vista Canyon Phase I, LLC Attn: Jim Backer 27451 Tourney Road, Suite 250 Santa Clarita, California 91355 email address: JBaker@isbdev.com Vista Canyon Ranch LLC Vista Canyon Phase I, LLC Attn: Glenn Adamick 27451 Tourney Road, Suite 250 Santa Clarita, California 91355 email address: GAdamick&jsbdev.com With Copy to: Holland & Knight LLP Attn: Robert M. Haight Jr. 50 California Street, Suite 2800 San Francisco, California 94111 email address: rhaip-ht@hklaw.com Section 9.4 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the successors and assigns of the Parties hereto. The Owner may assign its rights pursuant to this Agreement to a purchaser (an "Assignee") of a portion or portions of the property which is/are located within the District (the "Property") only with the prior written consent of the City and the District, which consent shall not be unreasonably withheld. In connection with any such consent of the City or the District, the City or the District, as applicable, may condition its consent upon the acceptability of the relevant experience and financial condition of the proposed assignee, the assignee's express assumption of all obligations of the Owner hereunder, and/or upon any other factor which the City or District, as applicable, deems relevant in the circumstances. If any such factors may adversely affect the security for the Bonds, as determined by the City and the District, in their sole discretion after consultation with the City's and/or District's financial advisor, bond counsel, and underwriters, the City's withholding or conditions of such consent shall be deemed to be reasonable. In any event, any such assignment shall be in writing, shall clearly identify the scope of the rights and/or 41756522.4 21 8.b Packet Pg. 79 obligations assigned, and shall not be effective until approved in writing by the City and the District. Subject to the foregoing, the Owner may assign to the Assignee the responsibility for the construction of all or a portion of the Public Facilities which remain to be constructed and the right to receive payment of the Purchase Price for Public Facilities previously completed by the Owner. The. Owner and Assignee shall provide to the City such reasonable proof as the City may require that such Assignee is the purchaser of the Property within the District. Such Assignee shall, as a condition to receiving payment of a Purchase Price, enter into an assignment and assumption agreement with the City and the Owner, in the form attached hereto as Exhibit C, whereby such Assignee agrees, except as may be otherwise specifically provided therein, to assume the obligations of the Owner pursuant to this Agreement with respect to such Public Facilities, and to be bound thereby. No assignment, whether or not consented to by the City and the District, shall release the Owner from its obligations and liabilities under this Agreement unless such release is expressly agreed to by the City and the District in writing, which shall not be unreasonably withheld. Section 9.5 Relationship Between the City and the Owner. It is hereby acknowledged by the Owner that the relationship between the City and the Owner is not that of a partnership or joint venture and that the City and the Owner shall not be deemed or construed for any purpose to be the agent of the other. Accordingly, except as expressly provided herein or in the Attachments hereto, the City shall have no rights, powers, duties or obligations with respect to the development, operation, maintenance or management of the Project. Except for the negligence or willful misconduct of the City or its Councilmembers, directors, officials, officers, employees, consultants, agents, and volunteers, the Owner agrees to indemnify, hold harmless and defend the City from any claim made against the City arising from a claimed relationship of partnership or joint venture between the City and the Owner with respect to the development, operation, maintenance or management of the property within the District. Section 9.6 No Third Party Rights. The Parties intend that no rights or remedies be granted to any third party as a beneficiary of this Agreement or of any covenant, duty, obligation or undertaking established herein. Section 9.7 Counterparts. This Agreement may be signed in multiple counterparts which, when signed by all Parties, shall constitute a binding agreement. This Agreement is executed in five (5) originals, each of which is deemed to be an original. Section 9.8 Other Agreements. The obligations of the Owner hereunder shall be that of a Party hereto. Nothing herein shall be construed as affecting the City's or the Owner's rights, or duties to perform their respective obligations, under Improvement Agreements, other agreements, use regulations or subdivision requirements relating to the development of the property within the District. This Agreement shall not confer any additional rights, or waive any rights given, by either Party hereto under any development or other agreement to which they are a party. Section 9.9 Titles and Captions. Titles and captions are for convenience of reference only and do not define, describe or limit the scope or the intent of this Agreement or of any of its terms. References to section numbers are to sections in this Agreement, unless expressly stated otherwise. 41756522.4 22 Packet Pg. 80 Section 9.10 Interpretation. As used in this Agreement, masculine, feminine or neuter gender and the singular or plural number shall each be deemed to include the others where and when the context so dictates. The word "including" shall be construed as if followed by the words "without limitation." This Agreement shall be interpreted as though prepared jointly by both Parties. Section 9.11 No Waiver. A waiver by either Party of a breach of any of the covenants, conditions or agreements under this Agreement to be performed by the other Party shall not be construed as a waiver of any succeeding breach of the same or other covenants, agreements, restrictions or conditions of this Agreement. Section 9.12 Modifications. Any alteration, change or modification of or to this Agreement, in order to become effective, shall be made in writing and in each instance signed on behalf of each Party. Section 9.13 Severability. If any term, provision, condition or covenant of this Agreement or its application to any party or circumstances shall be held, to any extent, invalid or unenforceable, the remainder of this Agreement, or the application of the term, provision, condition or covenant to persons or circumstances other than those as to whom or which it is held invalid or unenforceable, shall not be affected, and shall be valid and enforceable to the fullest extent permitted by law. Section 9.14 Computation of Time. The time in which any act is to be done under this Agreement is computed by excluding the first day (such as the day a Payment Request is received), and including the last day, unless the last day is a holiday or Saturday or Sunday, and then that day is also excluded. The term "holiday" shall mean all holidays as specified in Section 6700 and 6701 of the California Government Code. The term "business day" shall mean any day other than a holiday or Saturday or Sunday. If any act is to be done by a particular time during a day, that time shall be Pacific Time Zone time. Section 9.15 Legal Advice. Each Parry represents and warrants to the other the following: it has carefully read this Agreement, and in signing this Agreement it does so with full knowledge of any right which it may have; it has received independent legal advice from its respective legal counsel as to the matter set forth in this Agreement, or have knowingly chosen not to consult legal counsel as to the matters set forth in this Agreement; and, it has freely signed this Agreement without any reliance upon any agreement, promise, statement or representation by or on behalf of the other Party, or its respective agents, employees, or attorneys, except as specifically set forth in this Agreement, and without duress or coercion, whether economic or otherwise. Section 9.16 Cooperation. Each Party agrees to reasonably cooperate with the other in this transaction and, in that regard, to sign any and all documents which may be reasonably necessary, helpful, or appropriate to carry out the purposes and intent of this Agreement including, but not limited to, releases or additional agreements. Section 9.17 Conflicts of Interest. No member, official or employee of the City shall have any personal interest, direct or indirect, in this Agreement, nor shall any such member, 41756522.4 23 8.b Packet Pg. 81 official or employee participate in any decision relating to the Agreement which affects his personal interests or the interests of any corporation, partnership or association in which he is directly or indirectly interested. Section 9.18 Non -Liability of Officials and Employees of the City. No Councilmember, official, officer or employee of the City shall be personally liable to the Owner, or any successor in interest, in the event of any Default or breach by the City or for any amount which may become due to the Owner or its successors, or on any obligations under the terms of this Agreement. The Owner hereby waives and releases any and all claims it may have against the Councilmembers, officials, officers or employees of the City with respect to any Default or breach by the City under this Agreement or for any amount under this Agreement which may become due to the Owner or its successors, or on any obligations under the terms of this Agreement. Section 9.19 Notice of Special Tax. The Owner, or the successor or assigns of the Owner, shall prepare and provide written notice to all potential purchasers or lessees, if the special taxes are to be passed through to such lessees, of lots in the form prescribed by California Government Code Section 53341.5 advising the potential owner or lessee, as applicable, of the fact of the proposed or confirmed District, with said document being executed by the potential purchaser or lessee, as applicable. Such notice shall be provided to the potential purchaser or lessee, as applicable, before the potential purchaser becomes contractually committed to purchase the lot or the lessee enters into the lease of the lot so that the potential purchaser or lessee, as applicable, may knowingly consider the impact of the special tax in the decision to purchase or lease the lot. 41756522.4 24 8.b Packet Pg. 82 IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above. FOR CITY OF SANTA CLARITA: KENNETH W. STRIPLIN, CITY MANAGER By: City Manager ATTEST: By: City Clerk APPROVED AS TO FORM: JOSEPH M. MONTES, CITY ATTORNEY City Attorney FOR OWNER: VISTA CANYON RANCH LLC, a California Limited Liability Company By: JSJ PARTNERS, LLC, a California Limited Liability Company, its Manager By: JSB Development, Inc., a California Corporation, Member James S. Backer, President By: Valencia Realty Partners, LLC, a California limited liability Company, Member Stephen F. Valenziano, Manager 41756522.4 25 Packet Pg. 83 8.b VISTA CANYON PHASE I, LLC, a Delaware Limited Liability Company By: JSJ PARTNERS, LLC, a California Limited Liability Company, its Manager By: JSB Development, Inc., a California Corporation, Member James S. Backer, President By: Valencia Realty Partners, LLC, a California limited liability Company, Member Stephen F. Valenziano, Manager 41756522.4 26 Packet Pg. 84 8.b EXHIBIT A ELIGIBLE PUBLIC FACILITIES LIST All or part of three parking structures, including the Cooper Street Parking Garage with approximately 612 parking spaces, the Vista Canyon Boulevard Parking Garage with approximately 1,115 parking spaces, and the Metrolink Parking Garage with approximately 800 parking spaces. In addition, the CFD will contribute 15% of the net construction proceeds of the CFD Sources toward funding the construction of a transit center (estimated contribution is $4,015,145). City of Santa Clarita CFD No. 2016-1 (Vista Canyon) Estimated Costs of Public Facilities (Parking Structures) Priority Description Estimated Spaces Estimated Cost 1 Cooper Street Parking Garage 612 $10,686,076 2 Vista Canyon Blvd. Parking Garage 1,115 $16,399,943 3 Metrolink Parking Garage 800 $12,867,751 41756522.4 41756522.4 27 Packet Pg. 85 8.b EXHIBIT B PAYMENT REQUEST NO. The undersigned (the "Owner") hereby requests payment in the total amount of $ for the Public Facility (as defined in the Funding and Acquisition Agreement, dated as of , 2016 (the "Agreement"), by and between the City of Santa Clarita (the "City") and Vista Canyon Ranch LLC, a California limited liability company, and Vista Canyon Phase I, LLC, a Delaware limited liability company, and described in Exhibit A to that Agreement), all as more fully described in Attachment 1 hereto. In connection with this Payment Request, the undersigned hereby represents and warrants to the City and the District as follows (all capitalized terms used but not otherwise defined herein shall have the respective meanings ascribed to such terms in the Agreement): 1. He/She is a duly authorized officer of the Owner, qualified to execute this Payment Request for payment on behalf of the Owner and is knowledgeable as to the matters set forth herein. 2. To the extent that this Payment Request is with respect to a completed Public Facility, the Owner has submitted or submits herewith to the City, if applicable, as -built drawings or similar plans and specifications for the items to be paid for as listed in Attachment 1 hereto with respect to any such Public Facility, and such drawings or plans and specifications, as applicable, are true, correct and complete. 3. All costs of the Public Facilities for which payment is requested hereby are Actual Costs (as defined in the Agreement referenced above) and have not been inflated in any respect. The items for which payment is requested have not been the subject of any prior payment request submitted to the City. 4. Supporting documentation (such as third parry invoices, lien releases and cancelled checks) is attached with respect to each cost for which payment is requested. 5. The Public Facilities for which payment is requested was constructed in accordance with the requirements of the Agreement and in compliance with any applicable prevailing wage requirements. 6. The Owner is in compliance with the terms and provisions of the Agreement and no portion of the amount being requested to be paid was previously paid. 7. The Purchase Price for the Public Facilities (a detailed calculation of which is shown in Attachment 1 hereto for each Public Facility) has been calculated in conformance with the terms of Section 4.4 of the Agreement. 41756522.4 B-1 Packet Pg. 86 I hereby declare under penalty of perjury that the above representations and warranties are true and correct. OWNER: CITY: a Payment Request Approved for Submission to City Manager By: , a By: Director of Public Works By: [Title] Date: 41756522.4 Amount Approved: $ Date: Payment Request Approved for Submission to Fiscal Agent By: City Manager Amount Approved: $ Date: 8.b Packet Pg. 87 8.b ATTACHMENT 1 SUMMARY OF PUBLIC FACILITIES TO BE ACQUIRED AS PART OF PAYMENT REQUEST NO. Disbursement Ref. No. Public Facility Actual Cost Requested [List here all Public Facilities for which payment is requested, and attach support documentation] 41756522.4 B-3 Packet Pg. 88 EXHIBIT C FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT Pursuant to a Funding and Acquisition Agreement dated as of April _, 2016 (the "Agreement") by and between the City of Santa Clarita ("City") and Vista Canyon Ranch LLC, a California limited liability company, and Vista Canyon Phase I, LLC, a Delaware limited liability company, which Agreement is hereby incorporated herein by this reference, and for good and valuable consideration, receipt of which is hereby acknowledged, the undersigned agree as follows: 1. The assignment and assumption provided for under this Assignment and Assumption Agreement ("Assignment") is made together with the sale, transfer or assignment of all or a part of the property subject to the Agreement. The property sold, transferred or assigned together with this Assignment is included within the District and described in "Attachment 1" attached hereto and incorporated herein by this reference (the "Subject Property"). 2. , as the assignor hereof (the "Assignor") hereby grants, sells, transfers, conveys assigns and delegates to ("Assignee"), all of Assignor's rights, title, interest, benefits, privileges, duties and obligations arising under or from the Agreement with respect to the Subject Property and the Public Facilities authorized to be funded with respect to the District except for the following: 3. Assignee hereby accepts the foregoing assignment and unconditionally assumes and agrees to perform all of the duties and obligations of Assignor arising under or from the Agreement as owner of the Subject Property and the Assignor shall be released with respect to such obligations. 4. The sale, transfer or assignment of the Subject Property and the assignment and assumption provided for under this Assignment are the subject of additional agreements between Assignor and Assignee. Notwithstanding any term, condition or provision of such additional agreements, the rights of the City arising under or from the Agreement and this Assignment shall not be affected, diminished or defeated in any way, except upon the express written agreement of the City. 5. Assignor and Assignee execute this Assignment pursuant to Section 9.4 of the Agreement, and the City evidences its consent to this Assignment by signing below. 41756522.4 C-1 8.b Packet Pg. 89 IN WITNESS WHEREOF, the parties have executed this Assignment on 41756522.4 ASSIGNOR: By: _ Name: Title: &XR11"LlI By: _ Name: Title: CITY: CITY OF SANTA CLARITA By: Its: City Manager C-2 8.b Packet Pg. 90 8.b ATTACHMENT 1 DESCRIPTION OF SUBJECT PROPERTY 41756522.4 C-3 Packet Pg. 91 EXHIBIT D DESIGN, BID AND CONTRACT REQUIREMENTS FOR PUBLIC FACILITIES (i) Owner shall prepare a bid package and the form of the required notices for review, comment and approval by the City Engineer. (ii) Owner shall solicit three bids, or such lesser amount if the nature of the contract does not allow for three bids. (ii) Owner shall mail notices inviting formal bids. The notices shall be mailed no later than thirty (30) calendar days before the opening date of the bids. The notices shall distinctly describe the project and state the time and place for submission of bids. (iii) Bids shall be submitted to the Owner either via hard copy or email. (iv) Owner shall submit to the City written evidence of compliance with the competitive bidding procedures set forth herein, including evidence of the required noticing, a listing of all responsive bids and their amounts and the name or names of the contractor or contractors to whom Owner proposed to award the contracts for such construction. (v) After consultation with the City, the contract for the construction of a Public Facility shall be awarded to the responsible bidder submitting the lowest responsive bid for the construction of such Public Facility. D-1 41756522.4 8.b Packet Pg. 92 Community Facilities District Report for the City of Santa Clarita Community Facilities District No. 2016-1 (Vista Canyon) County of Los Angeles, California April 12, 2016 Packet Pg. 93 City of Santa Clarita CFD No. 20164 (Vista Canyon) COMMUNITY FACILITIES DISTRICT REPORT Table of Contents 8.c April 12, 2016 Page Introduction..............................................................................1 Project Description...................................................................2 Description of Facilities.............................................................3 IV. Facilities Cost Estimate.............................................................4 V. Services Cost Estimate..............................................................5 VI. Bonded Indebtedness and Incidental Expenses ........................6 VII. Rate & Method of Apportionment of the Special Tax ...............7 VIII. Boundaries of CFD No. 2016-1 ................................................11 IX. General Terms and Conditions................................................12 X. Certification............................................................................13 Exhibit A — Boundary Map Exhibit B — Rate and Method of Apportionment Exhibit C— Property Owner List CFD 2016-1 (Vista Canyon)- CFD Report.2016-04-01.r00.docx Packet Pg. 94 c d x a 0 U. c 0. c _N v 0 CL m a: 0 U - U a� E s 8.c City of Santa Clarita April 12, 2016 CFD No. 2016-1 (Vista Canyon) Page 1 COMMUNITY FACILITIES DISTRICT REPORT I. Introduction WHEREAS, the City Council of the City of Santa Clarita (hereinafter referred to as the "Council'), pursuant to the provisions of the Mello -Roos Community Facilities Act of 1982, being Chapter 2.5, Part 1, Division 2, Title 5 of the Government Code of the State of California (hereinafter referred to as the "Act") did establish its intentions to form a community facilities district, consisting of the territory described in Exhibit A, and did expressly order the filing of a written "Report" with the Council for the proposed community facilities district. This community facilities district shall hereinafter be referred to as City of Santa Clarita Community Facilities District No. 2016-1 (Vista Canyon) (hereinafter referred to as "CFD No. 2016-1"); and WHEREAS, the Resolution of Intention of the City Council of the City of Santa Clarita to establish City of Santa Clarita Community Facilities District No. 2016-1 (Vista Canyon), to authorize the levy of a Special Tax to pay the costs of acquiring, constructing, or maintaining certain facilities and expenses of CFD No. 2016-1 and to pay debt service on bonded indebtedness, did direct that said Report generally contain the following: a. A brief description of the public facilities, by type, which will be required to adequately meet the needs of CFD No. 2016-1; and b. An estimate of the cost of providing those public facilities, including the cost of environmental evaluations of such facilities, and an estimate of the fair and reasonable cost of any incidental expenses to be incurred. NOW, THEREFORE, I, Dennis A. Anderson, authorized representative of Harris & Associates, pursuant to the provisions of the Act, do hereby submit the following report. CFD 2016-1 (Vista Canyon)- CFD Report.2016-04-01.r00.docx Packet Pg. 95 8.c City of Santa Clarita April 12, 2016 CFD No. 2016-1 (Vista Canyon) Page 2 COMMUNITY FACILITIES DISTRICT REPORT II. Project Description Pursuant to land use entitlements approved by (i) the City of Santa Clarita, California (the "City"), and (ii) Vista Canyon Ranch, LLC, a California limited liability company, and Vista Canyon Phase I, LLC, a Delaware limited liability company (collectively, the "Developer"), the Developer plans to construct approximately 780 multi -family attached apartment units, approximately 213,700 square feet of retail space, approximately 605,400 square feet of office space, and a hotel with approximately 200 rooms in a development to be known as Vista Canyon. The City has proposed to form one community facilities district for the purpose of financing certain public facilities and maintenance for the benefit of Vista Canyon. CFD No. 2016-1 will be formed to finance the construction and maintenance of the facilities of the community services district. See Section III for a description of the facilities to be constructed and maintenance services to be funded. CFD 2016-1 (Vista Canyon)- CFD Report.2016-04-01.r00.docx Packet Pg. 96 8.c City of Santa Clarita April 12, 2016 CFD No. 2016.1 (Vista Canyon) Page 3 COMMUNITY FACILITIES DISTRICT REPORT III. Description of Facilities & Services A community facilities district may provide for the purchase, construction, expansion or rehabilitation of any real or other tangible property with an estimated useful life of five (5) years or longer which is necessary to meet increased demands placed upon local agencies as a result of development occurring within a community facilities district. In addition, a community facilities district may provide for the on-going costs for services and infrastructure maintenance as long as those services are in addition to services already received by the property within the district. Facilities The facilities described in the Report are all facilities which the City is authorized, pursuant to the Act, to own, construct, or finance, and which are required to adequately meet the needs of CFD No. 2016- 1. The facilities described herein are those currently expected to be required to adequately meet, in part, the needs of CFD No. 2016-1. Because the actual needs of CFD No. 2016-1 arising as development progresses therein may differ from those currently anticipated, the City reserves the right to modify the facilities proposed herein to the extent the City deems necessary, in its sole discretion, to meet those needs. CFD No. 2016-1 will be authorized to finance the construction of all or part of three parking structures, including the Cooper Street Parking Garage with approximately 612 parking spaces, the Vista Canyon Boulevard Parking Garage with approximately 1,115 parking spaces, and the Metrolink Parking Garage with approximately 800 parking spaces. In addition, the CFD will contribute 15% of the net construction proceeds of the CFD Bonds toward funding the construction of a transit center. Services In addition to the improvements above, the CFD is authorized to cover the on-going costs for maintenance and operation of two of the parking structures, including the Cooper Street Parking Garage and the Vista Canyon Boulevard Parking Garage. A Special Tax for Services will only be implemented in the unlikely event that the property owner's association does not cover these costs. CFD 2016-1 (Vista Canyon)- CFD Report.2016-04-01.r00.docx Packet Pg. 97 8.c City of Santa Clarita April 12, 2016 CFD No. 2016-1 (Vista Canyon) Page 4 COMMUNITY FACILITIES DISTRICT REPORT IV. Facilities Cost Estimate The cost estimate for the facilities described in Section III is set forth below. The actual facilities to be financed will ultimately be determined in accordance with the Acquisition Agreement between the City and Developer. City of Santa Clarita Community Facilities District No. 2016-1 (Vista Canyon) Estimated Facilities Costs Priority Parking Garages 1 2 Item Cooper Street Vista Canyon Blvd Garage Superstructure $ 7,955,000 $ 12,500,000 Design & Preconstruction 450,000 525,000 General Conditions 262,050 402,150 Site Work & Demo 330,000 380,000 General Liability Insurance 33,140 51,520 General Contractor Fee 262,050 402,150 Contingency (15%) 1,393,836 2,139,123 Total $ 10,686,076 $ 16,399,943 Parking Spaces 612 1,115 Cost Per Space $ 17,461 $ 14,708 Private Spaces 75 155 Public Spaces 537 960 Estimated Cost of Public Spaces $ 9,376,508 $ 14,120,130 Estimated Land Cost 465,000 713,000 Estimated Public Facilities Cost - Priority 1 and 2 $ 9,841,508 $ 14,833,130 Estimated Public Facilities Cost - All Facilities Estimated CFD Transit Funding (15% of net bond proceeds) $ 4,015,145 Priority 1- Cooper Street Parking Garage 9,841,508 Priority 2 -Vista Canyon Boulevard Parking Garage 14,833,130 Priority 3- Metrolink Parking Garage * 12,868,000 Total Estimated Public Facilities Cost $ 41,557,783 * The cost for the Metrolink Parking Garage is estimated at $16,085 per spacefor 800 spaces. It should be noted that the facilities cost estimates include all indirect costs such as project management, design engineering, right-of-way engineering, soils engineering and testing, plan checking, permits, fees, advertisement and award costs and inspections. Actual costs may differ from the amounts shown, which are estimates only and are not intended to be maximum limits in what may be expended. CFD 2016-1 (Vista Canyon)- CFD Report.2016-04-01.r00.docx Packet Pg. 98 City of Santa Clarita CFD No. 2016-1 (Vista Canyon) COMMUNITY FACILITIES DISTRICT REPORT V. Services Cost Estimate 8.c April 12, 2016 Page 5 The cost estimate for the services described in Section III is set forth below. The actual services to be financed will ultimately be determined in accordance with a Maintenance Agreement between the City and Property Owners Association. City of Santa Clarita Community Facilities District No. 2016-1 (Vista Canyon) Estimated Services Costs CFD 2016-1 (Vista Canyon)- CFD Report.2016-04-01 AO.doex Packet Pg. 99 as c m x a D LL 0 0 cc U Ma u� t= 0 CL 0 D LL V c m E r Q Priority Parking Garages 1 2 Item Cooper Street Vista Canyon Blvd Backflow and Testing Certification $ 85 $ 85 CCN and Call Box Maintenance 2,500 3,500 Electricity for Lighting and Elevators 24,000 45,000 Electrical Repair for Lighting 1,250 3,500 Elevator Maintenance Contract 10,000 20,000 Elevator Additional Costs 3,750 5,000 Elevator State Permit Fees and Testing 4,500 6,000 Fire/Life Safety Costs 1,500 1,500 Janitorial Services 12,500 16,500 Insurance - Liability - - Insurance - Property - - Maintenance and Repair 5,000 6,000 LIVID Fees - - CFD Fees - - Pest Control 2,400 2,400 Property Taxes - - Pressure Washing 2,500 5,000 Security 51,928 93,672 Security Cart Repairs - - Signage Repair and Maintenance 1,000 2,000 Telephone Costs for Elevator Phones 1.800 2.400 Total Estimated Services Cost $ 124,713 $ 212,557 CFD 2016-1 (Vista Canyon)- CFD Report.2016-04-01 AO.doex Packet Pg. 99 as c m x a D LL 0 0 cc U Ma u� t= 0 CL 0 D LL V c m E r Q 8.c City of Santa Clarita April 12, 2016 CFD No. 2016-1 (Vista Canyon) Page 6 COMMUNITY FACILITIES DISTRICT REPORT VI. Bonded Indebtedness and Incidental Expenses A. Projected Bond Sales The maximum authorized bonded indebtedness for CFD No. 2016-1 is $45,000,000. B. Incidental Bond Issuance Expenses to be included in the Proposed Bonded Indebtedness Pursuant to Section 53345.3 of the Act, bonded indebtedness may include all costs and estimated costs incidental to, or connected with, the accomplishment of the purpose for which the proposed debt is to be incurred, including, but not limited to, the costs of legal, fiscal, and financial consultant fees; bond and other reserve funds; discount fees; interest on any bonds of the district due and payable prior to the expiration of one year from the date of completion of the facilities, not to exceed two years; election costs; and all cost of issuance of the bonds, including, but not limited to, fees for bond counsel, costs of obtaining credit ratings, bond insurance premiums, fees for letters of credit, and other credit enhancement costs, and printing costs. For the bonds proposed to be issued by CFD No. 2016-1, capitalized interest is estimated for 12 months, the reserve fund, and all other incidental bond issuance expenses at approximately 5.0 percent of the face amount of the bonds. The reserve fund may be equal to either 125% of annual average debt service on the bonds or 10% of the gross bond amount, depending on interest rates at the time of bond issuance. C. Incidental Expenses to be Included in the Annual Levy of Special Taxes Pursuant to Section 53340 of the Act, the proceeds of any special tax may only be used to pay, in whole or part, the cost of providing public facilities, services and incidental expenses. As defined by the Act, incidental expenses include, but are not limited to, the cost of planning and designing public facilities to be financed, including the cost of environmental evaluations of those facilities; the costs associated with the creation of the district, issuance of bonds, determination of the amount of taxes, collection of taxes, payment of taxes, or costs otherwise incurred in order to carry out the authorized purposes of the district; any other expenses incidental to the construction, completion, and inspection of the authorized work; and the retirement of existing bonded indebtedness. While the actual cost of administering CFD No. 2016-1 may vary, it is anticipated that the amount of special taxes which can be collected will be sufficient to fund at least $25,000 in annual administrative expenses. CFD 2016-1 (Vista Canyon)- CFD Report.2016-04-01.r00.docx Packet Pg. 100 8.c City of Santa Clarita April 12, 2016 CFD No. 2016-1 (Vista Canyon) Page 7 COMMUNITY FACILITIES DISTRICT REPORT VII. Rate and Method of Apportionment of the Special Tax All of the property located within CFD No. 2016-1, unless exempted by law or by the Rate and Method of Apportionment, shall be taxed for the purpose of providing necessary facilities to serve CFD No. 2016-1. Pursuant to Section 53325.3 of the Act, the tax imposed "is a Special Tax and not a special assessment, and there is no requirement that the tax be apportioned on the basis of benefit to any property." The Special Tax "may be based on benefit received by parcels of real property, the cost of making facilities or authorized services available to each parcel or other reasonable basis as determined by the legislative body," although the Special Tax may not be apportioned on an ad valorem basis pursuant to Article XIIIA of the California Constitution. As shown in Exhibit B, the Rate and Method of Apportionment approved in the Resolution of Intention provides information sufficient to allow each property owner within CFD No. 2016-1 to estimate the maximum annual Special Tax he or she will be required to pay. Sections A through C, below, provide additional information on the Rate and Method of Apportionment of the Special Tax for CFD No. 2016-1, as is proposed to be adopted in the Resolution of Formation for CFD No. 2016-1. Please note that all capitalized terms used herein, unless otherwise indicated, shall have the meanings defined in the Rate and Method of Apportionment. A. Explanation for Special Tax Apportionment When a community facilities district (a "CFD") is formed, a special tax may be levied on each parcel of taxable property within the CFD to pay for the construction, acquisition and 4 rehabilitation of public facilities, to pay for authorized services or to repay bonded indebtedness or other related expenses incurred by the CFD. This special tax must be apportioned in a reasonable manner; however, the tax may not be apportioned on an ad valorem basis. When more than one type of land use is present within a CFD, several criteria may be considered m when apportioning the special tax. Generally, criteria based on building square footage, acreage, 1Z and land use are selected, and categories based on such criteria are established to differentiate v between parcels of property. These categories are a direct result of the projected product mix, and are reflective of the proposed land use types within that CFD. Specific special tax levels are assigned to each land use class, with all parcels within a land use class assigned the same special r tax rate. a The facilities to be funded by CFD No. 2016-1 are generally parking structure improvements. These improvements are required for the orderly development of the property within CFD No. 2016-1. Each property will benefit from the improvements in several ways: 1) traffic circulation, 2) site access, and 3) overall quality of life enhancement. The special tax can be apportioned using several different factors related to each property, including density, land area, traffic generation, and building square footage. For the Special Tax for Facilities, six Land Use Classes have been established for Developed Property, as shown in Table 1 below. The Special Tax for apartment property, condominium conversion property, and hotel property will be determined based on a per unit or per room basis. The Special Tax for retail property, office property, and other non-residential property will be determined based on a per square foot of building space basis. The Special Tax for CFD 2016-1 (Vista Canyon)- CFD Report.2016-04-01.r00.docx Packet Pg. 101 8.c City of Santa Clarita April 12, 2016 CFD No. 2016-1 (Vista Canyon) Page 8 COMMUNITY FACILITIES DISTRICT REPORT Taxable Property Owner Association Property, Taxable Public Property, Taxable Religious Property and Undeveloped Property will be determined by the acreage of the property. In addition, a maintenance special tax (Special Tax for Services) has been established to cover the on-going costs of maintenance of two of the parking structures to be built within CFD No. 2016- 1, if needed. The Special Tax for Services will be apportioned in a manner similar to the apportionment of the Special Tax for Facilities. For the Special Tax for Services, six Land Use Classes have been established for Developed Property, as shown in Table 2 below. The Special Tax for apartment property, condominium conversion property, and hotel property will be determined based on a per unit or per room basis. The Special Tax for retail property, office property, and other non- residential property will be determined based on a per square foot of building space basis. The Special Tax for Taxable Property Owner Association Property, Taxable Public Property, Taxable Religious Property and Undeveloped Property will be determined by the acreage of the property. Based on the types of public facilities that are proposed for CFD No. 2016-1 and the factors described above, the Special Taxes assigned to specific land uses are generally proportionate to the relative benefits received by them, and, accordingly, the Special Taxes in CFD No. 2016-1 can be considered fair and reasonable. B. Maximum Special Tax Rates Special Tax for Facilities Table 1, on the following page, lists the Assigned Special Tax for Facilities for fiscal year 2016- 17 that are proposed to be levied against Developed Property within CFD No. 2016-1. The Maximum Special Taxes for Facilities cannot exceed the rates shown in Table 1 for fiscal year 2016-17, except when the Backup Special Tax is used as discussed in Section C below. The Maximum Special Taxes for Facilities will increase at a rate of two percent per year. Special Tax for Services Table 2, on the following page, lists the Assigned Special Tax for Services for fiscal year 2016- 17 that are proposed to be levied against Developed Property within CFD No. 2016-1. The Maximum Special Taxes for Services cannot exceed the rates shown in Table 2. The Maximum Special Taxes for Services will increase each year by a rate equal to the greater of (i) annual percent increase, as of December 2016 and each December thereafter, in the Bureau of Labor Statistics' Consumer Price Index for All Urban Consumers (CPI -U) for the Los Angeles - Riverside -Orange County area and (ii) 0%. C. Backup Special Tax Pursuant to the Rate and Method of Apportionment, the Maximum Special Tax for Facilities for Developed Property is the greater of (i) the amount derived by application of the Assigned Special Tax or (ii) the amount derived by application of the Backup Special Tax. The Backup Special Tax for Facilities for Assessor's Parcels of Developed Property in Zone 1 shall equal $46,721 per Acre for Fiscal Year 2016-17, and the Backup Special Tax for Facilities for Assessor's Parcels of r" 0 CL 0 W 0 U. 0 41 C 0 E t 0 R a CFD 2016-1 (Vista Canyon)- CFD Report.2016-04-01.t00.docx Packet Pg.102 City of Santa Clarita CFD No. 2016-1 (Vista Canyon) COMMUNITY FACILITIES DISTRICT REPORT 8.c April 12, 2016 Page 9 Developed Property in Zone 2 shall equal $115,908 per Acre for Fiscal Year 2016-17. The Backup Special Tax will increase at a rate of two percent per year. TABLE 1 City of Santa Clarita Community Facilities District No. 2016-1 (Vista Canyon) Zone 1 and Zone 2 Assigned Special Taxes for Developed Property Fiscal Year 2016-17 Land Use Class Description Assigned Special Tax for Facilities 1 Apartment Property $667 per Apartment Unit 2 Office Property $1.15 per square foot of Floor Area 3 Retail Property 4 Non -Residential Property 5 Hotel Property 6 Condominium Conversion Property Land Use Class TABLE 2 $3.00 per square foot of Floor Area $1.15 per square foot of Floor Area $300 per Hotel Room $667 per Unit City of Santa Clarita Community Facilities District No. 2016-1 (Vista Canyon) Zone 1 and Zone 2 Maximum Special Taxes for Developed Property Fiscal Year 2016-17 Description 1 Apartment Property 2 Office Property 3 Retail Property 4 Non -Residential Property 5 Hotel Property 6 Condominium Conversion Property Assigned Special Tax for Services $120.50 per Apartment Unit $0.21 per square foot of Floor Area $0.54 per square foot of Floor Area $0.21 per square foot of Floor Area $54.18 per Hotel Room $120.50 per Unit CFD 2016-1 (Vista Canyon)- CFD Report.2016-04-01.00.docx Packet Pg. 103 8.c City of Santa Clarita April 12, 2016 CFD No. 2016-1 (Vista Canyon) Page 10 COMMUNITY FACILITIES DISTRICT REPORT D. Accuracy of Information In order to establish the Assigned Special Tax rates, the Backup Special Tax rates and the Maximum Special Tax rates as set forth in the Rate and Method of Apportionment for CFD 2016- 1, the Special Tax Consultant has relied on information including, but not limited to, absorption, land use types, building square footage, and net taxable acreage which were provided to the Special Tax Consultant by others. The Special Tax Consultant did not independently verify such data and disclaims responsibility for the impact of inaccurate data provided by others, if any, on the Rate and Method of Apportionment for CFD No. 2016-1, including the inability to meet the financial obligations of CFD No. 2016-1. CFD 2016-1 (Vista Canyon)- CFD Report.2016-04-01.r00.docx Packet Pg. 104 8.c City of Santa Clarita April 12, 2016 CFD No. 2016-1 (Vista Canyon) Page 11 COMMUNITY FACILITIES DISTRICT REPORT VIII. Boundaries of CFD No. 2016-1 The boundaries of CFD No. 2016-1 include all land on which special taxes may be levied. A copy of the Boundary Map for CFD No. 2016-1 is included as Exhibit A. 2 CFD 2016-1 (Vista Canyon)- CFD Report.2016-04-0Lr00.docx Packet Pg. 705 8.c City of Santa Clarita April 12, 2016 CFD No. 2016-1 (Vista Canyon) Page 12 COMMUNITY FACILITIES DISTRICT REPORT IX. General Terms and Conditions A. Substitution Facilities The description of the public facilities, as set forth herein, are general in their nature. The final nature and location of improvements and facilities will be determined upon the preparation of final plans and specifications. The final plans may show substitutes, in lieu or modifications to the proposed work in order to accomplish the work of improvement, and any such substitution shall not be a change or modification in the proceedings as long as the facilities provide a service and are of a type substantially similar to that as set forth in this Report. CFD 2016-1 (Vista Canyon)- CFD Report.2016-04-01.r00.docx Packet Pg. 106 8.c City of Santa Clarita April 12, 2016 CFD No. 2016.1 (Vista Canyon) Page 13 COMMUNITY FACILITIES DISTRICT REPORT X. Certification Based on the information provided herein, it is my opinion that the facilities and services described herein are necessary to meet increased demands placed upon the City as a result of development occurring within the boundaries of CFD No. 2016-1 and benefit the lands within said CFD No. 2016-1. Further, it is my opinion that the special tax rates and method of apportionment, as set forth herein, are fair and equitable, uniformly applied and not discriminating or arbitrary. Dated: April 12, 2016 Harris & Associates Dennis A. Anderson Director V- 0 CL d D U. V c as E r a CFD 2016-1 (Vista Canyon)- CFD Report.2016-04-01.r00.docx Packet Pg.107' \\ CN C ƒ -CL CL -to, 2 w CL ■ � � 2 § 0 m (BuNeG H mmnd'Q]o uoAu eo mmA:L 90 podeN Q]o:ju ©w43e n¥ 0 a � k a m§r ||r! \!- ! � § �§*®2!~ § \ \) [ � k ° ■2§ � )\}§(� `�§( § k ) �}) ■ I[ T6;62 r Ing 0 | K )�} ,¥!B=%° M §\ - ��■r■� . I�� ! w / r�m )§§ KE|, __� & � ±§ 0z U �§a�2 2 «wo«§ c=»0, z-zo; D c -. 0 < L) 7g/�2 wom!_ n<a�� oLL -aco 04 § �2 0 0 o � } \ !/ } z �2 _ __ &6 )§ - §§ §e { § §�)n 0 a � k a City of Santa Clarita CFD No. 2016-1 (Vista Canyon) Exhibit "B" Rate and Method of Apportionment April 12, 2016 Page B-1 8.c r- 0 CL 0 O LL V c d E s 0 w Q CFD 2016-1 (Vista Canyon) - CFD Report.2016-04-01.r00.docx Packet Pg. 909 City of Santa Clarita CFD No. 2016-1 (Vista Canyon) Exhibit "C" Propertv Owner List April 12, 2016 Page C-1 City of Santa Clarita Community Facilities District No. 2016-1 (Vista Canyon) Property Owner List APN Owner Acreage 2840-004-017 VISTA CANYON RANCH LLC 11.670 2840-004-021 VISTA CANYON PHASE 1 LLC 30.074 2840-004-036 VISTA CANYON PHASE 1 LLC 39.183 Total Acreage 80.927 v- 0 CL 0 0 U. v u c as E r �o a CFD 2016-1 (Vista Canyon) - CFD Report.2016-04-01.r00.docx Packet Pg. 110 8.d RESOLUTION NO. 16- A RESOLUTION OF FORMATION OF THE CITY COUNCIL OF THE CITY OF SANTA CLARITA, CALIFORNIA, DETERMINING THE VALIDITY OF PRIOR PROCEEDINGS AND ESTABLISHING CITY OF SANTA CLARITA COMMUNITY FACILITIES DISTRICT NO. 2016-1 (VISTA CANYON) AND APPROVING THE EXECUTION AND DELIVERY OF A FUNDING AND ACQUISITION AGREEMENT WHEREAS, the City Council (Council) of the City of Santa Clarita (City) has heretofore adopted Resolution No. 16-05 (Resolution of Intention) stating its intention to form City of Santa Clarita Community Facilities District No. 2016-1 (Vista Canyon) (CFD) pursuant to the Mello -Roos Community Facilities Act of 1982, as amended, commencing with Section 53311 of the California Government Code (Act); and WHEREAS, a copy of the Resolution of Intention is on file with the City Clerk and incorporated herein by reference; and WHEREAS, pursuant to the Act and in accordance with applicable laws, this Council held a public hearing on the formation of the CFD and the incurring of bonded indebtedness with respect to the CFD; and WHEREAS, prior to the commencement of the public hearing, there was filed with the City Council a Community Facilities District Report prepared by Harris & Associates (CFD Report) containing a boundary map, a description, and estimate of the facilities and services and incidental expense to be financed by the CFD. The CFD Report has been reviewed by the Council and is incorporated herein and made a part of the record of the public hearing; and WHEREAS, at said hearing, all persons not exempt from the special taxes desiring to be heard on all matters pertaining to the formation of the CFD were heard, and a full and fair hearing was held; and WHEREAS, at said hearing, evidence was presented to the Council on said matters before it, and this Council, at the conclusion of said hearing is fully advised in the premises. NOW, THEREFORE, the City Council of the City of Santa Clarita does hereby resolve as follows: SECTION 1. Pursuant to Section 53325.1(b) of the Government Code, the Council finds and determines that the proceedings prior hereto were valid and in conformity with the requirements of the Act. SECTION 2. A Community Facilities District to be designated "City of Santa Clarita Community Facilities District No. 2016-1 (Vista Canyon)" is hereby established pursuant to the Act. Packet Pg. 111 SECTION 3. The description and map of the boundaries of the CFD on file in the City Clerk's office and as described in the Resolution of Intention and incorporated herein by reference, shall be the boundaries of the CFD. The map of the proposed boundaries of the CFD has been recorded in the Office of the County Recorder of Los Angeles County, California (Book 194 of Maps of Assessment and Community Facilities District at page 43 and as Instrument No. 2016-0380136). SECTION 4. The facilities proposed to be financed by the CFD are public infrastructure facilities and other governmental facilities with an estimated useful life of five years or longer, which the CFD is authorized by law to construct, own, or operate and that are necessary to meet increased demands placed upon the City as a result of development occurring within the proposed CFD, including but not limited to, all or a portion of up to three parking structures and a transit station and related costs including designs, inspections, professional fees, and acquisition costs (Facilities). Such Facilities need not be physically located within the CFD. The types of services proposed to be provided for and financed by the CFD include, but shall not limited to, labor, material, administration, personnel, equipment and utilities necessary to maintain and operate the Facilities (Services), if required, which Services are in addition to and do not supplant those services already provided in the territory within the CFD prior to the establishment of the CFD. The Facilities and Services are more fully described in the CFD Report presented to this Council at the public hearing. SECTION 5. Except where funds are otherwise available, it is the intention of the Council to levy annually in accordance with procedures contained in the Act (i) a special tax within the CFD sufficient to pay for the costs of financing the acquisition and/or construction of the Facilities (Special Tax For Facilities), and (ii) a special tax within the CFD sufficient to pay for the costs of financing the Services (Special Tax For Services, and together with Special Tax For Facilities, the Special Tax), including the principal of and interest on two or more series of the bonds proposed to be issued to finance the Facilities and other periodic costs, the establishment and replenishment of reserve funds, the remarketing, credit enhancement and liquidity fees, the costs of administering the levy and collection of the Special Tax and all other costs of the levy of the Special Tax and issuance of the bonds, including any foreclosure proceedings, architectural, engineering, inspection, legal, fiscal, and financial consultant fees, discount fees, interest on bonds (but not to exceed two years), election costs and all costs of issuance of the bonds, including, but not limited to, fees for bond counsel, disclosure counsel, financing consultants and printing costs, and all other administrative costs of the tax levy and bond issues. The Special Tax will be secured by recordation of a continuing lien against all non- exempt real property in the CFD. In the first year in which such a Special Tax is levied, the levy shall include a sum sufficient to repay to the City all amounts, if any, transferred to the CFD pursuant to Section 53314 of the Act and interest thereon. 2 Packet Pg. 112 The schedule of the rate and method of apportionment (RMA) and manner of collection of the Special Tax is described in detail in Exhibit A attached hereto and by this reference incorporated herein. The Special Tax is based upon the cost of financing the Facilities and the Services in the CFD, the demand that each parcel will place on the Facilities and the Services, and the benefit (direct and/or indirect) received by each parcel from the Facilities and the Services. The Special Tax is apportioned to each parcel on the foregoing basis pursuant to Section 53325.3 of the Act and as described in the RMA. In the event that a portion of the property within the CFD shall become for any reason exempt, wholly or partially, from the levy of the Special Tax, the Council shall, on behalf of the CFD, increase the levy to the extent necessary upon the remaining property within the CFD which is not delinquent or exempt in order to yield the required payments, subject to the maximum tax. Under no circumstances, however, shall the Special Tax for Facilities levied in any fiscal year against any parcel used for private residential purposes be increased as a consequence of delinquency or default by the owner or owners of any other parcel or parcels within the CFD by more than 10 percent above the amount that would have been levied in that fiscal year had there never been any such delinquencies or defaults. Furthermore, the maximum Special Tax for Facilities authorized to be levied against any parcel used for private residential purposes shall not be increased over time in excess of 2 percent per year. Special Tax for Facilities shall not be levied or collected after Fiscal Year 2060-61, except that Special Tax for Facilities that was lawfully levied in or before such final tax year and that remains delinquent may be collected in subsequent years. Pursuant to Section 53340 of the Act, the annual Special Taxes shall be collected in the same manner as ordinary ad valorem property taxes are collected or in such other manner as this Council shall determine, including without limitation, direct billing of the affected property owners and shall be subject to the same penalties and the same procedure, sale, and lien priority in case of delinquency, as is provided for ad valorem taxes. SECTION 6. Upon recordation of a Notice of Special Tax Lien pursuant to Section 3114.5 of the Streets and Highways Code, a continuing lien to secure each levy of the Special Tax shall attach to all non-exempt real property in the CFD, and the lien with respect to the Special Tax for Facilities shall continue in force and effect until the Special Tax for Facilities obligation is prepaid or otherwise permanently satisfied and the lien canceled in accordance with law and the lien with respect to the Special Tax for Services shall continue in force and effect until collection of the Special Tax for Services by the CFD ceases. SECTION 7. Neither the proposed Special Tax for Facilities nor the Special Tax for Services to be levied in the CFD has been precluded by protests by owners of one-half or more of the land in the territory included in the CFD pursuant to Government Code Section 53324. SECTION 8. The Report is ordered to be kept on file with the minutes of these proceedings and open for public inspection. 3 s.a Packet Pg. 113 SECTION 9. Pursuant to and in compliance with the provisions of Government Code Section 50075.1, the Council hereby establishes the following accountability measures pertaining to the levy by the CFD of the Special Tax for Facilities and the Special Tax for Services: a) Such Special Tax for Facilities and the Special Tax for Services shall be levied for the specific purposes set forth herein. b) The proceeds of the levy of such Special Tax for Facilities and the Special Tax for Services shall be applied only to the specific purposes set forth herein. c) The CFD shall establish an account or accounts into which the proceeds of such Special Tax for Facilities and Special Tax for Services shall be deposited. d) The Director of Administrative Services/Deputy City Manager, or his or her designee, acting for and on behalf of the CFD, shall annually file a report with the Council as required pursuant to Government Code Section 50075.3. SECTION 10. The Director of Administrative Services/Deputy City Manager, 23920 Valencia Boulevard, Santa Clarita, California 91355, or his designee, is designated to be responsible for preparing or causing to be prepared annually a current roll of Special Tax for Facilities and the Special Tan for Services levy obligations by assessor's parcel number and for estimating future Special Tax levies pursuant to Section 53340.1 of the Government Code. SECTION 11. The voting procedure with respect to the imposition of the Special Tax, incurring bonded indebtedness and establishing an appropriations limit of the CFD, shall be by hand delivery or mailed ballot election. SECTION 12. The City may accept advances of funds from any sources, including private persons or private entities, and is authorized and directed to use such funds for any authorized purpose, including any cost incurred by the City in creating the CFD. The City has entered into a deposit agreement to repay all of such funds as are not expended or committed for any authorized purpose at the time of the election on the levy of the Special Tax, if the proposal to levy such tax should fail, and to repay all of such funds advanced if the levy of the Special Tax shall be approved by the qualified electors of the CFD. SECTION 13. The City hereby approves the Funding and Acquisition Agreement, substantially in the form submitted to the City Clerk, with such revisions, amendments, and completions as shall be approved by the Mayor, the City Manager, Director of Administrative Services/Deputy City Manager, or any designee of any of them, with the advice of counsel to the City, such approval to be conclusively evidenced by the execution and delivery thereof. Any work in-kind accepted and reimbursed by the CFD contemplated by the Funding and Acquisition Agreement shall be performed or constructed as if the work had been performed or constructed under the direction and supervision, or under the authority of, the City or the CFD. SECTION 14. The City Clerk is directed to certify and attest to this Resolution and to take any and all necessary acts to call, hold, canvass and certify an election or elections on the 4 8.d Packet Pg. 114 incurring of bonded indebtedness, the levy of the Special Tax, and the establishment of the appropriation limit. SECTION 15. The City Clerk shall certify to the adoption of this Resolution. PASSED, APPROVED, AND ADOPTED this 12'h day of April 2016. ATTEST: CITY CLERK DATE: 5 MAYOR 8.d Packet Pg. 115 STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) ss. CITY OF SANTA CLARITA ) I, Kevin Tonoian, City Clerk of the City of Santa Clarita, do hereby certify that the foregoing Resolution was duly adopted by the City Council of the City of Santa Clarita at a regular meeting thereof, held on the 12'h day of April 2016, by the following vote: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: M CITY CLERK 8.d Packet Pg. 116 EXHIBIT A RATE AND METHOD OF APPORTIONMENT FOR CITY OF SANTA CLARITA COMMUNITY FACILITIES DISTRICT NO. 2016-1 (VISTA CANYON) 8.d A Special Tax as hereinafter defined shall be levied on all Assessor's Parcels in City of Santa Clarita Community Facilities District No. 2016-1 (Vista Canyon) ("CFD No. 2016-1") and collected each Fiscal Year commencing in Fiscal Year 2016-17, in an amount determined by the City Council through the application of the Rate and Method of Apportionment as described below. All of the real property in CFD No. 2016-1, 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 terms hereinafter set forth have the following meanings: "Acre" or "Acreage" means the land area of an Assessor's Parcel as shown on an Assessor's Parcel Map, or if the land area is not identified on an Assessor's Parcel Map, the land area identified on the applicable final map, parcel map, condominium plan, or other recorded County parcel map. "Act" means the Mello -Roos Community Facilities Act of 1982, as amended, being Chapter 2.5, Division 2 of Title 5 of the Government Code of the State of California. "Administrative Expenses" means the following actual or reasonably estimated costs directly related to the administration of CFD No. 2016-1: the costs of computing the Special Taxes and preparing the annual Special Tax collection schedules (whether by the City or designee thereof or both); the costs of collecting the Special Taxes (whether by the City or otherwise); the costs of remitting the Special Taxes to the Trustee; the costs of the Trustee (including its legal counsel) in the discharge of the duties required of it under the Indenture; the costs to the City, CFD No. 2016-1 or any designee thereof of complying with arbitrage rebate requirements; the costs to the City, CFD No. 2016-1 or any designee thereof of complying with disclosure requirements of the City, CFD No. 2016-1 or obligated persons associated with applicable federal and state securities laws and the Act; the costs associated with preparing Special Tax disclosure statements and responding to public inquiries regarding the Special Taxes; the costs of the City, CFD No. 2016-1 or any designee thereof related to an appeal of any Special Tax levy; the costs associated with the release of funds from an escrow account; and the City's annual administration fees and third party expenses. Administrative Expenses shall also include amounts estimated by the CFD Administrator or advanced by the City or CFD No. 2016-1 for any other administrative purposes of CFD No. 2016-1, including attorney's fees and other costs related to commencing and pursuing to completion any foreclosure action to collect delinquent Special Taxes. City of Santa Clarita CFD No. 2016-1 (Vista Canyon) Rate and Method of Apportionment February 4, 2016 Page 1 Packet Pg. 117 8.d "Apartment Property" means any Assessor's Parcel for which one or more building permits have been issued for attached residential units, all of which are made available for rental, but not purchase, by the general public. "Apartment Unit" means a for -rent residential unit located on an Assessor's Parcel of Apartment Property. "Assessor's Parcel" means a lot or parcel shown on an Assessor's Parcel Map 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. "Assigned Special Tax for Facilities" means the Special Tax for each Land Use Class of Developed Property, as determined in accordance with Section C below. "Backup Special Tax for Facilities" means the Special Tax applicable to each Assessor's Parcel of Developed Property, as determined in accordance with Section C below. "Bonds" means any bonds or other debt (as defined in Section 53317(d) of the Act), whether in one or more series, issued by CFD No. 2016-1 under the Act. "CFD Administrator" means an official of the City, or designee thereof, responsible for determining the Special Tax Requirement for Facilities, the Special Tax Requirement for Services, as described in Section I, and providing for the levy and collection of the Special Taxes. "CFD No. 2016-1" means City of Santa Clarita Community Facilities District No. 2016-1 (Vista Canyon). "City" means the City of Santa Clarita. "Condominium Conversion Property" means any Assessor's Parcel previously classified as Apartment Property, or any portion thereof, that has converted to condominium units for purchase by the general public. "Council" means the City Council of the City of Santa Clarita, acting as the legislative body of CFD No. 2016-1. "County" means the County of Los Angeles, California. "Developed Property" means, for each Fiscal Year, all Taxable Property, exclusive of Taxable Property Owner Association Property, Taxable Public Property, and Taxable Religious Property, for which a building permit for new construction was issued prior to May 1 of the prior Fiscal Year. Notwithstanding the foregoing, (a) if a building permit is revoked, expired or otherwise cancelled and a new building permit is issued for the same property prior to the issuance of Bonds, then, the building square footage and building type as indicated on the new building permit shall thereafter be used for purposes of determining the Land Use Class, (b) if a building permit is revoked, expired or otherwise cancelled and a new building permit is issued for the City of Santa Clarita CFD No. 2016-1 (Vista Canyon) Rate and Method of Apportionment February 4, 2016 Page 2 Packet Pg. 118 8.d same property after the issuance of Bonds, and the amount of Assigned Special Tax for Facilities which may be levied pursuant to the new building permit is greater than the Assigned Special Tax for Facilities which may be levied pursuant to the original building permit, then the building square footage and building type as indicated on the new building permit shall thereafter be used for purposes of determining the Land Use Class, otherwise the Land Use Class pursuant to the original building permit shall continue to be used, and (c) if a building permit is revoked, expired or otherwise cancelled and no new building permit is issued for the same property, then the property will continue to be considered Developed Property and taxed based on the original building permit. "Fiscal Year" means the period starting July 1 and ending on the following June 30. "Floor Area" means the total building square footage of the building(s) located on an Assessor's Parcel, measured from outside wall to outside wall, not including space devoted to stairwells, public restrooms, lighted courts, vehicle parking and areas incident thereto, and mechanical equipment incidental to the operation of such building(s). The determination of Floor Area shall be made by reference to the building permit(s) issued for such Assessor's Parcel and/or to the appropriate records kept by the City, as reasonably determined by the CFD Administrator. "Hotel Property" means Assessor's Parcels of Developed Property for which a building permit has been issued by the City permitting the construction of a non-residential structure that constitutes a place of lodging providing sleeping accommodations and related facilities for travelers. "Hotel Room" means a hotel room or suite available for overnight lodging located on an Assessor's Parcel of Hotel Property. "Indenture" means the indenture, fiscal agent agreement, resolution or other instrument pursuant to which Bonds are issued, as modified, amended and/or supplemented from time to time, and any instrument replacing or supplementing the same. "Land Use Class" means any of the classes listed in Table 1 below. "Maximum Special Tax for Facilities" means for each Fiscal Year for each Assessor's Parcel, the maximum Special Tax for Facilities, determined in accordance with Section C below, that can be levied on such Assessor's Parcel in such Fiscal Year. "Non -Residential Property" means all Assessor's Parcels of Developed Property, exclusive of Office Property, Retail Property and Hotel Property, for which a building permit(s) was issued for a non-residential use. "Office Property" means Assessor's Parcels of Developed Property for which a building permit has been issued by the City permitting the construction of one or more non-residential facilities which is primarily used for: professional or medical offices, or for any other uses that are consistent with office land use designations, as determined by the City. "Outstanding Bonds" means all Bonds which are deemed to be outstanding under the Indenture. City of Santa Clarita CFD No. 2016-1 (Vista Canyon) Rate and Method of Apportionment February 4, 2016 Page 3 Packet Pg. 119 8.d "Partial Prepayment Amount" means the amount required to prepay a portion of the Special Tax obligation for an Assessor's Parcel as described in Section G. "Prepayment Amount" means the amount required to prepay the Special Tax obligation for an Assessor's Parcel as described in Section G. "Property Owner Association Property" means, for each Fiscal Year, any property within the boundaries of CFD No. 2016-1 that is owned in fee or by easement, or dedicated to, a property owner association, including any master or sub -association as of January 1 of the prior Fiscal Year. "Proportionately" means (i) with respect to the Special Tax for Facilities, (A) for Developed Property that the ratio of the actual Special Tax for Facilities levy to the Assigned Special Tax for Facilities is equal for all Assessor's Parcels of Developed Property within CFD No. 2016-1, (B) for Undeveloped Property, that the ratio of the actual Special Tax for Facilities levy per Acre to the Maximum Special Tax for Facilities per Acre is equal for all Assessor's Parcels of Undeveloped Property in CFD No. 2016-1, and (C) for Taxable Public Property, Taxable Property Owner Association Property and Taxable Religious Property, that the ratio of the actual Special Tax for Facilities levy per Acre to the Maximum Special Tax for Facilities per Acre is equal for all Assessor's Parcels of Taxable Public Property, Taxable Property Owner Association Property or Taxable Religious Property, as applicable, and (ii) with respect to the Special Tax for Services, for Developed Property that the ratio of the actual Special Tax for Services levy to the Maximum Special Tax for Services is equal for all Assessor's Parcels of Developed Property within CFD No. 2016-1. "Public Property" means, for each Fiscal Year, any property within the boundaries of CFD No. 2016-1 that is used for rights-of-way or any other purpose and is owned by, dedicated to, or irrevocably offered for dedication to the federal government, the State of California, the City or any other public agency as of January 1 of the prior Fiscal Year; provided however that any property leased by a public agency to a private entity and subject to taxation under Section 53340.1 of the Act shall be taxed and classified in accordance with its use. In order to ensure that such property is correctly classified as Public Property, the owner of such property shall provide the CFD Administrator with a copy of any applicable documents. "Religious Property" means, for each Fiscal Year, all property within the boundaries of CFD No. 2016-1 which (i) is either (a) used primarily as a place of worship or (b) vacant land or land under construction that is intended to be used primarily as a place of worship as determined by the CFD Administrator; and (ii) is exempt from ad valorem property taxes because it is owned by a religious organization as of January 1 of the prior Fiscal Year. Religious Property, without limitation, does not include any Assessor's Parcels used primarily for religious schools, day care centers, or congregate care facilities. "Residential Property" means all Assessor's Parcels of Developed Property, not including Apartment Property or Condominium Conversion Property, for which a building permit has been issued for purposes of constructing one or more for -sale residential dwelling units. City of Santa Clarito CFD No. 2016-1 (Vista Canyon) Rate and Method of Apportionment February 4, 2016 Page 4 Packet Pg. 120 8.d "Retail Property" means Assessor's Parcels of Developed Property for which a building permit has been issued by the City permitting the construction of one or more non-residential facilities which is primarily used for: the sale of general merchandise, hard goods, personal services, and other items directly to consumers, or other uses that are consistent with retail land use designations, as determined by the City. "Special Tax" means, as applicable, the Special Tax for Facilities or the Special Tax for Services. "Special Tax for Facilities" means the special tax to be levied in each Fiscal Year on each Assessor's Parcel of Taxable Property by CFD No. 2016-1 pursuant to the Act to fund the Special Tax Requirement for Facilities. "Special Tax Requirement for Facilities" means for each Fiscal Year, that amount required for CFD No. 2016-1 to pay the sum of: (i) debt service on all Outstanding Bonds or Bonds expected to be issued in such Fiscal Year; (ii) periodic costs on the Bonds, including but not limited to, credit enhancement and rebate payments on the Bonds; (iii) Administrative Expenses related to the Special Tax for Facilities; (iv) any amounts required to establish a reserve fund for Bonds expected to be issued in such Fiscal Year or replenish any reserve funds established by the Indenture for any Outstanding Bonds to the extent such replenishment has not been included in the computation of the Special Tax Requirement for Facilities in a previous Fiscal Year; and (v) any amounts required for construction of facilities eligible to be constructed or acquired by CFD No. 2016-1 under the Act, provided that such amounts do not increase the Special Tax for Facilities levied on Undeveloped Property, Taxable Public Property, Taxable Religious Property, and Taxable Property Owners' Association Property. In arriving at the Special Tax Requirement for Facilities, the CFD Administrator shall take into account the reasonably anticipated delinquent Special Tax for Facilities based on the delinquency rate for Special Tax for Facilities levied in the previous Fiscal Year and shall give a credit for funds available to reduce the annual Special Tax for Facilities levy. "State" means the State of California. "Taxable Property" means all of the Assessor's Parcels within the boundaries of CFD No. 2016-1 which are not exempt from the Special Tax for Facilities pursuant to law or Section E below. "Taxable Property Owner Association Property" means all Assessor's Parcels of Property Owner Association Property that are not exempt pursuant to Section E below. "Taxable Public Property" means all Assessor's Parcels of Public Property that are not exempt pursuant to Section E below. "Taxable Religious Property" means all Assessor's Parcels of Religious Property that are not exempt pursuant to Section E below. "Trustee" means the trustee, fiscal agent, or paying agent under the Indenture. "Undeveloped Property" means, for each Fiscal Year, all Taxable Property not classified as Developed Property, Taxable Property Owner Association Property, Taxable Public Property, or Taxable Religious Property. City of Santa Clarito CFD No. 2016-1 (Vista Canyon) Rate and Method of Apportionment February 4, 2016 Page 5 Packet Pg. 121 s.a , "Zone" means any one of the separate geographic areas within CFD No. 2016-1 designated on Exhibit A herein as: Zone 1 or Zone 2. B. ASSIGNMENT TO LAND USE CATEGORIES Each Fiscal Year, commencing with Fiscal Year 2016-17, each Assessor's Parcel of Taxable Property within Zone 1 and each Assessor's Parcel of Taxable Property within Zone 2 shall be classified as Developed Property, Taxable Public Property, Taxable Property Owner Association Property, Taxable Religious Property, or Undeveloped Property, and shall be subject to Special Tax for Facilities in accordance with the rate and method of apportionment determined pursuant to Sections C and D below. The Assigned Special Tax for Facilities for each Assessor's Parcel of Developed Property shall be based on the Land Use Class for such Assessor's Parcel. C. MAXIMUM SPECIAL TAX FOR FACILITIES 1. Developed Property a. Maximum Special Tax for Facilities The Maximum Special Tax for Facilities for each Assessor's Parcel classified as Developed Property shall be the greater of (i) the amount derived by application of the Assigned Special Tax for Facilities or (ii) the amount derived by application of the Backup Special Tax for Facilities for the Zone in which such Assessor's Parcel is located. b. Assigned Special Tax for Facilities The Assigned Special Tax for Facilities for each Land Use Class for Fiscal Year 2016-17 is shown below in Table 1. TABLE 1 Zone 1 and Zone 2 For Fiscal Year 2016-17 City of Santa Clarita CFD No. 2016-1(Vista Canyon) Rate and Method of Apportionment February 4, 2016 Page 6 Packet Pg. 122 Assigned Special Tax for Facilities for Developed Property 8.d Land Use Description Assigned Special Tax Class for Facilities $667.00 per 1 Apartment Property Apartment Unit $1.15 per square 2 Office Property foot of Floor Area $3.00 per square 3 Retail Property foot of Floor Area $1.15 per square 4 Non -Residential Property foot of Floor Area $300.00 per 5 Hotel Property Hotel Room 6 Condominium Conversion Property $667.00 per Unit c. Multiple Land Use Classes In some instances an Assessor's Parcel of Developed Property may contain more than one Land Use Class. In such cases, the Acreage of the Assessor's Parcel shall be allocated between the different Land Use Classes based on the site plan or other available information. The Maximum Special Tax for Facilities that can be levied on such Assessor's Parcel shall be the sum of the Maximum Special Tax for Facilities that can be levied on each type of property located on that Assessor's Parcel. d. Backup Special Tax for Facilities The Backup Special Tax for Facilities for Assessor's Parcels of Developed Property in Zone 1 shall equal $46,721 per Acre for Fiscal Year 2016-17, and the Backup Special Tax for Facilities for Assessor's Parcels of Developed Property in Zone 2 shall equal $115,908 per Acre for Fiscal Year 2016-17. City of Santa Clarita CFD No. 2016-1 (Vista Canyon) Rate and Method of Apportionment February 4, 2016 Page 7 Packet Pg. 1123 8.d e. Increase in the Assigned Special Tax for Facilities and Backup Special Tax for Facilities On each July 1, commencing on July 1, 2017, the Assigned Special Tax for Facilities and the Backup Special Tax for Facilities for Developed Property shall be increased by an amount equal to two percent (2%) of the amount in effect for the previous Fiscal Year. 2. Taxable Property Owner Association Property, Taxable Public Property, Taxable Religious Property, and Undeveloped Property a. Maximum Special Tax for Facilities For Fiscal Year 2016-17, the Maximum Special Tax for Facilities for Taxable Property Owner Association Property, Taxable Public Property, Taxable Religious Property, and Undeveloped Property shall equal $46,721 per Acre for Assessor's Parcels in Zone 1 and $115,908 per Acre for Assessor's Parcels in Zone 2. b. Increase in the Maximum Special Tax for Facilities On each July 1, commencing on July 1, 2017, the Maximum Special Tax for Facilities for Taxable Property Owner Association Property, Taxable Public Property, Taxable Religious Property, and Undeveloped Property shall be increased by an amount equal to two percent (2%) of the amount in effect for the previous Fiscal Year. D. METHOD OF APPORTIONMENT OF THE SPECIAL TAX FOR FACILITIES Commencing with Fiscal Year 2016-17 and for each following Fiscal Year, the City shall levy the Special Tax for Facilities until the amount of Special Tax for Facilities levied equals the Special Tax Requirement for Facilities. The Special Tax for Facilities shall be levied each Fiscal Year as follows: 1. Apportionment of Special Tax for Facilities prior to Completion of Development First: The Special Tax for Facilities shall be levied Proportionately on each Assessor's Parcel of Developed Property within Zone 1 at up to 100% of the applicable Assigned Special Tax for Facilities as needed to satisfy the Special Tax Requirement for Facilities; Second: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after the first step has been completed, the Special Tax for Facilities shall be levied Proportionately on each Assessor's Parcel of Undeveloped Property within Zone 1 at up to 100% of the Maximum Special Tax for Facilities for Undeveloped Property; Third: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after the first two steps have been completed, then the Special Tax for Facilities shall be levied Proportionately on each Assessor's Parcel of Developed Property within Zone 2 at up to 100% of the applicable Assigned Special Tax for Facilities; Fourth: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after the first three steps have been completed, the Special Tax for Facilities shall be levied City of Santa Clarito CFD No. 2016-1(Visto Canyon) Rate and Method of Apportionment February 4, 2016 Page 8 Packet Pg. 124 8.d Proportionately on each Assessor's Parcel of Undeveloped Property within Zone 2 at up to 100% of the Maximum Special Tax for Facilities for Undeveloped Property; Fifth: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after the first four steps have been completed, then the levy of the Special Tax for Facilities on each Assessor's Parcel of Developed Property in Zone 1 and each Assessor's Parcel of Developed Property in Zone 2 for which the Maximum Special Tax for Facilities is determined through the application of the Backup Special Tax for Facilities shall be increased Proportionately from the Assigned Special Tax for Facilities up to the Maximum Special Tax for Facilities for each such Assessor's Parcel; Sixth: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after the first five steps have been completed, then the Special Tax for Facilities shall be levied Proportionately on each Assessor's Parcel of Taxable Property Owner Association Property or Taxable Religious Property at up to the Maximum Special Tax for Facilities for Taxable Property Owner Association Property or Taxable Religious Property. Seventh: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after the first six steps have been completed, then the Special Tax for Facilities shall be levied Proportionately on each Assessor's Parcel of Taxable Public Property at up to the Maximum Special Tax for Facilities for Taxable Public Property. 2. Apportionment of Special Tax for Facilities upon Completion of Development Once the CFD Administrator has determined that there is no Undeveloped Property in both Zone 1 and Zone 2, the Special Tax for Facilities shall be levied each Fiscal Year as follows: First: The Special Tax for Facilities shall be levied Proportionately on each Assessor's Parcel of Developed Property within Zone 1 and Zone 2 at up to 100% of the applicable Assigned Special Tax for Facilities as needed to satisfy the Special Tax Requirement for Facilities; Second: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after the first step has been completed, then the levy of the Special Tax for Facilities on each Assessor's Parcel of Developed Property in Zone 1 and each Assessor's Parcel of Developed Property in Zone 2 for which the Maximum Special Tax for Facilities is determined through the application of the Backup Special Tax for Facilities shall be increased Proportionately from the Assigned Special Tax for Facilities up to the Maximum Special Tax for Facilities for each such Assessor's Parcel; Third: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after the first two steps have been completed, then the Special Tax for Facilities shall be levied Proportionately on each Assessor's Parcel of Taxable Property Owner Association Property or Taxable Religious Property at up to the Maximum Special Tax for Facilities for Taxable Property Owner Association Property or Taxable Religious Property; Fourth: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after the first three steps have been completed, then the Special Tax for Facilities shall be City of Santa Clarita CFD No. 2016-1(Vista Canyon) Rate and Method of Apportionment February 4, 2016 Page 9 Packet Pg.125 8.d levied Proportionately on each Assessor's Parcel of Taxable Public Property at up to the Maximum Special Tax for Facilities for Taxable Public Property. Notwithstanding the above, under no circumstances will the Special Tax for Facilities levied in a Fiscal Year against any Assessor's Parcel of Apartment Property or Condominium Conversion Property for which an occupancy permit for private residential use has been issued be increased by more than ten percent (10%) above the amount that would have been levied in that Fiscal Year as a consequence of delinquency or default by the owner of any other Assessor's Parcel within CFD No. 2016-1. To the extent that the levy of the Special Tax for Facilities on Residential Property is limited by the provision in the previous sentence, the levy of the Special Tax for Facilities on all other Assessor's Parcels shall continue in equal percentages at up to 100% of the Maximum Special Tax for Facilities. E. EXEMPTIONS No Special Tax for Facilities shall be levied on any Assessor's Parcels of Residential Property. In addition, the CFD Administrator shall classify Property Owner Association Property, Public Property, and Religious Property as exempt from the Special Tax for Facilities, provided that no such classification would reduce the Acreage of Taxable Property to less than 14.75 Acres in Zone 1 and 10.60 Acres in Zone 2. Special Taxes for Facilities shall not be levied on any Assessor's Parcel, or portion thereof, not within Zone 1 or Zone 2. Tax-exempt status will be assigned to Assessor's Parcels by the CFD Administrator in the chronological order in which such Assessor's Parcels become Property Owner Association Property, Public Property, or Religious Property. However, should an Assessor's Parcel no longer be classified as Property Owner Association Property, Public Property, or Religious Property its tax-exempt status will be revoked and it will thereafter be classified as Developed Property or Undeveloped Property in accordance with Section D above. Property Owner Association Property, Public Property, or Religious Property that is not exempt from Special Tax for Facilities under this section shall be subject to the levy of the Special Tax for Facilities and shall be taxed Proportionately as part of the sixth and seventh steps, respectively, in Section D above, at up to 100% of the applicable Maximum Special Tax for Facilities for Taxable Property Owner Association Property, Taxable Public Property, or Taxable Religious Property. F. MANNER OF COLLECTION The Special Tax for Facilities shall be collected in the same manner and at the same time as ordinary ad valorem property taxes; provided, however, that CFD No. 2016-1 may directly bill the Special Tax for Facilities, may collect the Special Tax for Facilities at a different time or in a different manner if necessary to meet its financial obligations, and may covenant to foreclose and may actually foreclose on delinquent Assessor's Parcels as permitted by the Act. Tenders of Bonds may be accepted for payment of the Special Tax for Facilities upon the terms and conditions established by the Act and permitted by CFD No. 2016-1. The use of Bond tenders shall only be allowed on a case-by-case basis as specifically approved by the Council. City of Santa Clarita CFD No. 2016-1 (Vista Canyon) Rate and Method of Apportionment February 4, 2016 Page 10 Packet Pg. 126 8.d G. PREPAYMENT OF SPECIAL TAX FOR FACILITIES The following definitions apply to this Section G: "CFD Public Facilities Cost" means either $29,000,000 million in 2016 dollars, which shall increase by the Construction Inflation Index on July 1, 2017, and on each July 1 thereafter, or such lower number as (i) shall be determined by the CFD Administrator as sufficient to provide the public facilities to be provided by CFD No. 2016-1 under the authorized bonding program for CFD No. 2016-1, or (ii) shall be determined by the Council concurrently with a covenant that it will not issue any more Bonds to be supported by the Special Tax for Facilities levied under this Rate and Method of Apportionment as described in Section D. "Construction Fund" means an account specifically identified in the Indenture to hold funds which are currently available for expenditure to acquire or construct public facilities eligible under the Act. "Construction Inflation Index" means, for a Fiscal Year, the annual percentage change in the Engineering News -Record Building Cost Index for the City of Los Angeles, measured as of the calendar year which ends in the previous Fiscal Year. In the event this index ceases to be published, the Construction Inflation Index shall be another index as determined by the CFD Administrator that is reasonably comparable to the Engineering News -Record Building Cost Index for the City of Los Angeles. "Future Facilities Costs" means the CFD Public Facilities Cost minus (i) public facility costs previously paid from the Construction Fund, (ii) moneys currently on deposit in the Construction Fund, and (iii) moneys currently on deposit in an escrow fund that are expected to be available to finance facilities costs. "Outstanding Bonds" means all Previously Issued Bonds which are deemed to be outstanding under the Indenture after the first interest and/or principal payment date following the current Fiscal Year. "Previously Issued Bonds" means all Bonds that have been issued by CFD No. 2016-1 prior to the date of prepayment. 1. Prepayment in Full The obligation to pay the Special Tax for Facilities for an Assessor's Parcel may be prepaid and permanently satisfied as described herein; provided that there are no delinquent amounts of Special Tax for Facilities with respect to such Assessor's Parcel at the time of prepayment. An owner of an Assessor's Parcel intending to prepay the Special Tax for Facilities obligation shall provide the CFD Administrator with written notice of intent to prepay. Within 30 days of receipt of such written notice, the CFD Administrator shall notify such owner of the prepayment amount for such Assessor's Parcel. The CFD Administrator may charge a reasonable fee for providing this figure. Prepayment must be made not less than 45 days prior to the next occurring date that notice of redemption of Bonds from the proceeds of such prepayment may be given to the Trustee pursuant to the Indenture. City of Santa Clarita CFD No. 2016-1(Vista Canyon) February 4, 2016 Rate and Method of Apportionment Page 11 Packet Pg.227 8.d The Prepayment Amount (defined below) shall be calculated as summarized below (capitalized terms as defined below): As of the proposed date of prepayment, the Prepayment Amount shall be calculated as follows: Paragraph No.: 1. For Assessor's Parcels of Developed Property, compute the Assigned Special Tax for Facilities and Backup Special Tax for Facilities applicable for the Assessor's Parcel to be prepaid. For Assessor's Parcels of Undeveloped Property for which a building permit has been issued, compute the Assigned Special Tax for Facilities and Backup Special Tax for Facilities for that Assessor's Parcel as though it was already designated as Developed Property, based upon the building permit which has already been issued for that Assessor's Parcel. For Assessor's Parcels of Undeveloped Property for which a building permit has not been issued, Taxable Property Owner Association Property, Taxable Public Property, or Taxable Religious Property, compute the Maximum Special Tax for Facilities for the Assessor's Parcel to be prepaid. 2. (a) For an Assessor's Parcel of Developed Property or Undeveloped Property for which a building permit has been issued (i) Divide the Assigned Special Tax for Facilities computed pursuant to paragraph 1 by the total estimated Assigned Special Tax for Facilities for the entire CFD No. 2016-1 based on the Developed Property Special Tax for Facilities which could be charged in the current Fiscal Year on all expected development through buildout of CFD No. 2016-1, excluding any Assessor's Parcels which have been prepaid, and (ii) Divide the Backup Special Tax for Facilities computed pursuant to paragraph 1 by the total estimated Backup Special Tax for Facilities for the entire CFD No. 2016-1 based on the Backup Special Tax for Facilities which could be charged in the current Fiscal Year on all expected development through buildout of CFD No. 2016-1, excluding any Assessor's Parcels which have been prepaid. (b) For Assessor's Parcels of Undeveloped Property for which a building permit has not been issued, Taxable Property Owner Association Property, Taxable Public Property, or Taxable Religious Property, divide the Maximum Special Tax for Facilities computed pursuant to paragraph 1 by the total estimated Maximum Special Tax for Facilities for the entire CFD No. 2016-1 based on the Maximum Special Tax for Facilities which could be charged in the current Fiscal Year on all expected development through buildout of CFD No. 2016-1, excluding any Assessor's Parcels which have been prepaid. City of Santa Clarita CFD No. 2016-1 (Vista Canyon) February 4, 2016 Rate and Method of Apportionment Page 12 Packet Pg. 128 Bond Redemption Amount plus Redemption Premium plus Future Facilities Amount plus Defeasance Amount plus Administrative Fees and Expenses less Reserve Fund Credit less Capitalized Interest Credit equals Prepayment Amount As of the proposed date of prepayment, the Prepayment Amount shall be calculated as follows: Paragraph No.: 1. For Assessor's Parcels of Developed Property, compute the Assigned Special Tax for Facilities and Backup Special Tax for Facilities applicable for the Assessor's Parcel to be prepaid. For Assessor's Parcels of Undeveloped Property for which a building permit has been issued, compute the Assigned Special Tax for Facilities and Backup Special Tax for Facilities for that Assessor's Parcel as though it was already designated as Developed Property, based upon the building permit which has already been issued for that Assessor's Parcel. For Assessor's Parcels of Undeveloped Property for which a building permit has not been issued, Taxable Property Owner Association Property, Taxable Public Property, or Taxable Religious Property, compute the Maximum Special Tax for Facilities for the Assessor's Parcel to be prepaid. 2. (a) For an Assessor's Parcel of Developed Property or Undeveloped Property for which a building permit has been issued (i) Divide the Assigned Special Tax for Facilities computed pursuant to paragraph 1 by the total estimated Assigned Special Tax for Facilities for the entire CFD No. 2016-1 based on the Developed Property Special Tax for Facilities which could be charged in the current Fiscal Year on all expected development through buildout of CFD No. 2016-1, excluding any Assessor's Parcels which have been prepaid, and (ii) Divide the Backup Special Tax for Facilities computed pursuant to paragraph 1 by the total estimated Backup Special Tax for Facilities for the entire CFD No. 2016-1 based on the Backup Special Tax for Facilities which could be charged in the current Fiscal Year on all expected development through buildout of CFD No. 2016-1, excluding any Assessor's Parcels which have been prepaid. (b) For Assessor's Parcels of Undeveloped Property for which a building permit has not been issued, Taxable Property Owner Association Property, Taxable Public Property, or Taxable Religious Property, divide the Maximum Special Tax for Facilities computed pursuant to paragraph 1 by the total estimated Maximum Special Tax for Facilities for the entire CFD No. 2016-1 based on the Maximum Special Tax for Facilities which could be charged in the current Fiscal Year on all expected development through buildout of CFD No. 2016-1, excluding any Assessor's Parcels which have been prepaid. City of Santa Clarita CFD No. 2016-1 (Vista Canyon) February 4, 2016 Rate and Method of Apportionment Page 12 Packet Pg. 128 8.d 3. Multiply the larger of quotient (i) and (ii) computed pursuant to paragraph 2(a) for Assessor's Parcels of Developed Property or Undeveloped Property for which a building permit has been issued, or the quotient computed pursuant to paragraph 2(b) for Assessor's Parcels of Undeveloped Property for which a building permit has not been issued, Taxable Property Owner Association Property, Taxable Public Property, or Taxable Religious Property, by the Outstanding Bonds to compute the amount of Outstanding Bonds to be retired and prepaid (the "Bond Redemption Amount"). 4. Multiply the Bond Redemption Amount computed pursuant to paragraph 3 by the applicable redemption premium, if any, on the Outstanding Bonds to be redeemed (the "Redemption Premium"). 5. Compute the current Future Facilities Costs. 6. Multiply the larger of quotient (i) and (ii) computed pursuant to paragraph 2(a) for Assessor's Parcels of Developed Property or Undeveloped Property for which a building permit has been issued, or the quotient computed pursuant to paragraph 2(b) for Assessor's Parcels of Undeveloped Property for which a building permit has not been issued, Taxable Property Owner Association Property, Taxable Public Property, or Taxable Religious Property, by the amount determined pursuant to paragraph 5 to compute the amount of Future Facilities Costs to be prepaid (the "Future Facilities Amount"). 7. Compute the amount needed to pay interest on the Bond Redemption Amount from the first bond interest and/or principal payment date following the current Fiscal Year until the earliest redemption date for the Outstanding Bonds. 8. Confirm that no Special Tax for Facilities delinquencies apply to such Assessor's Parcel. 9. Determine the amount of Special Tax for Facilities levied on the Assessor's Parcel in the current Fiscal Year which have not yet been paid. 10. Compute the minimum amount the CFD Administrator reasonably expects to derive from the reinvestment of the Prepayment Amount less the Future Facilities Amount and the Administrative Fees and Expenses from the date of prepayment until the redemption date for the Outstanding Bonds to be redeemed with the prepayment. 11. Add the amounts computed pursuant to paragraphs 7 and 9 and subtract the amount computed pursuant to paragraph 10 (the "Defeasance Amount"). 12. Verify the administrative fees and expenses of CFD No. 2016-1, including 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"). 13. The reserve fund credit (the "Reserve Fund Credit") 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 City of Santa Clarita CFD No. 2016-1(Vista Canyon) Rate and Method of Apportionment February4, 2016 Page 13 Packet Pg. 129 8.d (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. 14. If any capitalized interest for the Outstanding Bonds will not have been expended at the time of the first interest and/or principal payment following the current Fiscal Year, a capitalized interest credit shall be calculated by multiplying the larger of quotient (i) and (ii) computed pursuant to paragraph 2(a) for Assessor's Parcels of Developed Property or Undeveloped Property for which a building permit has been issued, or the quotient computed pursuant to paragraph 2(b) for Assessor's Parcels of Undeveloped Property for which a building permit has not been issued, Taxable Property Owner Association Property, Taxable Public Property, or Taxable Religious Property, by the expected balance in the capitalized interest fund after such first interest and/or principal payment (the "Capitalized Interest Credit"). 15. The Special Tax for Facilities prepayment is equal to the sum of the amounts computed pursuant to paragraphs 3, 4, 6, 11 and 12, less the amounts computed pursuant to paragraphs 13 and 14 (the "Prepayment Amount"). 16. From the Prepayment Amount, the amounts computed pursuant to paragraphs 3, 4, 11, 13 and 14 shall be deposited into the appropriate fund as established under the Indenture and be used to retire Outstanding Bonds or make debt service payments. The amount computed pursuant to paragraph 6 shall be deposited into the Construction Fund. The amount computed pursuant to paragraph 12 shall be retained by CFD No. 2016-1. The Prepayment Amount may be sufficient to redeem other than a $5,000 increment of Bonds. In such cases, the increment above $5,000 or integral multiple thereof will be retained in the appropriate fund established under the Indenture to be used with the next prepayment of Bonds or to make debt service payments. As a result of the payment of the current Fiscal Year's Special Tax for Facilities levy as determined under paragraph 9 (above), the CFD Administrator shall remove the current Fiscal Year's Special Tax for Facilities levy for such Assessor's Parcel from the County tax rolls. With respect to any Assessor's Parcel for which the Special Tax for Facilities is prepaid, the City shall cause a suitable notice to be recorded in compliance with the Act, to indicate the prepayment of Special Tax for Facilities and the release of the Special Tax for Facilities lien on such Assessor's Parcel, and the obligation to pay the Special Tax for Facilities for such Assessor's Parcel shall cease. Notwithstanding the foregoing, no prepayment will be allowed unless (i) the amount of Maximum Special Tax for Facilities that may be levied on Taxable Property (based on expected development at build out), after the proposed prepayment, less expected Administrative Expenses, shall be at least 1.1 times the regularly scheduled annual interest and principal payments on all Outstanding Bonds (excluding Bonds to be redeemed by such prepayment and all prior prepayments) in each future Fiscal Year and (ii) the amount of City of Santa Clarito CFD No. 2016-1 (Vista Canyon) February 4, 2016 Rate and Method of Apportionment Page 14 Packet Pg. 130 Maximum Special Tax for Facilities that may be levied on non -delinquent Taxable Property (based on expected development at build out) after the proposed prepayment, less expected Administrative Expenses, shall be at least equal to the regularly scheduled annual interest and principal payments on all Outstanding Bonds (excluding Bonds to be redeemed by such prepayment and all prior prepayments) in each future Fiscal Year. 2. Prepayment in Part The Special Tax for Facilities for 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 = HPE -AE) x F] + AE These terms have the following meaning: AE = the Administrative Fees and Expenses PP = the partial prepayment amount PE = the Prepayment Amount calculated according to Section G.1 F = the percentage by which the owner of the Assessor's Parcel is partially prepaying the Special Tax for Facilities. The owner of any Assessor's Parcel who desires such prepayment shall notify the CFD Administrator of such owner's intent to partially prepay the Special Tax for Facilities and the percentage by which the Special Tax for Facilities shall be prepaid. The CFD Administrator shall provide the owner with a statement of the amount required for the partial prepayment of the Special Tax for Facilities for an Assessor's Parcel within thirty (30) days of the request and may charge a reasonable fee for providing this service. With respect to any Assessor's Parcel for which the Special Tax for Facilities is partially prepaid, CFD No. 2016-1 shall (i) distribute the funds remitted to it according to Section G.1, and (ii) indicate in the records of CFD No. 2016-1 that there has been a partial prepayment of the Special Tax for Facilities and that a portion of the Special Tax for Facilities with respect to such Assessor's Parcel, equal to the outstanding percentage (1.00 - F) of the Assigned Special Tax for Facilities, Backup Special Tax for Facilities and Maximum Special Tax for Facilities, shall continue to be levied on such Assessor's Parcel pursuant to Section D. Notwithstanding the foregoing, no partial prepayment will be allowed unless (i) the amount of Maximum Special Tax for Facilities that may be levied on Taxable Property (based on expected development at build out), after the proposed partial prepayment, less expected Administrative Expenses, shall be at least 1.1 times the regularly scheduled annual interest and principal payments on all Outstanding Bonds (excluding Bonds to be redeemed by such prepayment and all prior prepayments) in each future Fiscal Year and (ii) the amount of Maximum Special Tax for Facilities that may be levied on non -delinquent Taxable Property (based on expected development at build out) after the proposed partial prepayment, less expected Administrative Expenses, shall be at least equal to the regularly scheduled annual interest and principal payments on all Outstanding Bonds (excluding Bonds to be redeemed by such prepayment and all prior prepayments) in each future Fiscal Year. City of Santa Clarita CFD No. 2016-1(Vista Canyon) February 4, 2016 Rate and Method of Apportionment Page 15 Packet Pg. 131 8.d H. TERM OF SPECIAL TAX FOR FACILITIES The Special Tax for Facilities shall be levied until the final maturity of the last series of Bonds, provided that that the Special Tax for Facilities shall not be levied later than Fiscal Year 2060-61. I. SPECIAL TAX FOR SERVICES 1. Definitions The following definitions apply to this Section I: "Annual Escalation Factor" means the greater of (i) annual percent increase, as of December 2016 and each December thereafter, in the Bureau of Labor Statistics' Consumer Price Index for All Urban Consumers (CPI -U) for the Los Angeles -Riverside -Orange County area and (ii) 0%. "Maintenance Costs" means for each Fiscal Year, the estimated costs to maintain Parking Structure 1 and Parking Structure 2 which have been accepted and maintained by the City or are reasonably expected to be accepted and maintained by the City during the current Fiscal Year, "Maximum Special Tax for Services" means for each Fiscal Year and for each Assessor's Parcel, the maximum Special Tax for Services that can be levied by CFD No. 2016-1 on such Assessor's Parcel. "Operating Fund" means a fund that shall be maintained for CFD No. 2016-1 for any Fiscal Year to pay for the actual costs of maintenance related to the Service Area, and the applicable Administrative Expenses. "Operating Fund Balance" means the amount of funds in the Operating Fund at the end of the preceding Fiscal Year. "Parking Structure I" means the parking structure known as the Cooper Street Parking Garage. "Parking Structure 2" means the parking structure known as the Vista Canyon Boulevard Parking Garage. "Service Area" means parking structure maintenance within the boundary of CFD No. 2016-1, which may include, but is not limited to: automated gate maintenance, parking space restriping, concrete repair and elevator maintenance. "Special Tax for Services" means any of the special taxes authorized to be levied within CFD No. 2016-1 pursuant to the Act to fund the Special Tax Requirement for Services. "Special Tax Requirement for Services" means for each Fiscal Year, the amount determined for CFD No. 2016-1 equal to (i) the Maintenance Costs, (ii) Administrative Expenses related to the Special Tax for Services and (iii) anticipated delinquent Special Taxes for Services based on the delinquency rate in CFD No. 2016-1 for the previous Fiscal Year, less (iv) the Operating Fund Balance, as determined by the CFD Administrator. City of Santa Clarita CFD No. 2016-1 (Vista Canyon) February 4, 2016 Rate and Method of Apportionment Page 16 Packet Pg. 132 2. Maximum Special Tax for Services 8.d Developed Property Land Use Classes, as identified in Section B, shall be used in assigning the Maximum Special Tax for Services amount for each Assessor's Parcel of Developed Property within CFD No. 2016-1 as shown in Table 2 below. TABLE 2 Zone 1 and Zone 2 For Fiscal Year 2016-17 Maximum Special Tax for Services for Developed Property Land Maximum Special Tax for Use Description Services Class $120.50 1 Apartment Property per Apartment Unit $0.21 per square foot 2 Office Property of Floor Area $0.54 per square foot 3 Retail Property of Floor Area $0.21 per square foot 4 Non -Residential Property of Floor Area $54.18 per 5 Hotel Property Hotel Room 6 Condominium Conversion Property $120.50 per Unit On each July 1, commencing on July 1, 2017, the Maximum Special Tax for Services shall be increased by an amount equal to the Annual Escalation Factor multiplied by the Maximum Special Tax for Services in effect for the previous Fiscal Year. 3. Method of Apportionment of the Special Tax for Services Commencing the Fiscal Year following the determination that a property owner association is not maintaining Parking Structure 1 or Parking Structure 2 in accordance with a maintenance agreement with the City and for each subsequent Fiscal Year for which a property owner association is not maintaining Parking Structure 1 or Parking Structure 2, the City shall levy Special Taxes for Services Proportionately on all Developed Property within CFD No. 2016-1, up to the applicable Maximum Special Tax for Services to fund the Special Tax Requirement for Services. City of Santa Clarita CFD No. 2016-1(Vista Canyon) Rate and Method of Apportionment February 4, 2016 Page 17 Packet Pg. 133 4. Duration of the Special Tax for Services 8.d The Special Tax for Services shall be levied in perpetuity to fund the Special Tax Requirement for Services, unless no longer required as determined at the sole discretion of the Council. 5. Exemptions from the Special Tax for Services No Special Tax for Services shall be levied on Residential Property, Undeveloped Property, Property Owner Association Property, Public Property and Religious Property. 6. Manner of Collection of the Special Tax for Services The Special Tax for Services shall be collected in the same manner and at the same time as ordinary ad valorem property taxes, provided, however, that CFD No. 2016-1 may collect the Special Tax for Services at a different time or in a different manner, including direct billing, if necessary to meet its funding requirements. 7. Prepayment of the Special Tax for Services The Special Tax for Services may not be prepaid. J. APPEALS AND INTERPRETATIONS Any landowner who feels that the amount of the Special Taxes levied on their Assessor's Parcel is in error may submit a written appeal to the CFD Administrator. The CFD Administrator shall review the appeal. If the City concurs, no refund shall be given; however, the amount of the Special Taxes levied shall be appropriately reduced in the following Fiscal Year(s). The CFD Administrator may interpret this Rate and Method of Apportionment for purposes of clarifying any ambiguities and make determinations relative to the annual administration of the Special Taxes and any landowner appeals. City of Santa Clarita CFD No. 2016-1(Vista Canyon) Rate and Method of Apportionment February 4, 2016 Page 18 Packet Pg. 134 8.d EXHIBIT A CITY OF SANTA CLARITA COMMUNITY FACILITY DISTRICT NO. 2016-1 (VISTA CANYON) TAX ZONE DESIGNATION Legend M CFD Boundary OTax Zone Boundary TTM 69164 (4/26/11) l A Clggq Zone 2 :Y City of Santa Clarita CFD No. 2016-1 (Vista Canyon) February 4, 2016 Rate and Method of Apportionment Page 19 Packet Pg. 135 RESOLUTION NO. 16- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA CLARITA, CALIFORNIA, ACTING AS THE LEGISLATIVE BODY OF THE CITY OF SANTA CLARITA COMMUNITY FACILITIES DISTRICT NO. 2016-1 (VISTA CANYON), DECLARING THE NECESSITY TO INCUR BONDED INDEBTEDNESS IN THE AGGREGATE AMOUNT OF NOT TO EXCEED $45,000,000 AND CALLING A SPECIAL ELECTION WHEREAS, the City Council (Council) of the City of Santa Clarita (City) has heretofore adopted Resolution No. 16- (Resolution of Formation), which formed the City of Santa Clarita Community Facilities District No. 2016-1 (Vista Canyon) (CFD), pursuant to the Mello -Roos Community Facilities Act of 1982, as amended, commencing with Section 53311 of the California Government Code (Act), to finance the purchase, construction, expansion, or rehabilitation of certain real and other tangible property with an estimated useful life of five years or longer, which the CFD is authorized by law to construct, own, or operate, including but not limited to all or a portion of up to three parking structures, a transit station, and related costs including designs, inspections, professional fees, and acquisition costs (Facilities), and to finance certain services if required, including but not limited to labor, material, administration, personnel, equipment, and utilities necessary to maintain and operate the Facilities, that are in addition to those provided in the territory within the CFD prior to the formation of the CFD (Services); and WHEREAS, a copy of the Resolution of Formation is on file with the City Clerk and incorporated herein by reference; and WHEREAS, in order to finance the Facilities it is necessary to incur bonded indebtedness in the aggregate amount of not to exceed $45,000,000, the repayment of which is to be secured by special taxes for facilities levied in accordance with Section 53340 et seq. of the Act on certain properties within the CFD; and WHEREAS, the Council wishes to present to the qualified electors of the CFD propositions for the levy of special taxes on property within the CFD and the authorization of bonded indebtedness secured by the special tax for the Facilities pursuant to the Act and the establishment of an annual appropriations limit for the CFD as defined by subdivision (h) of Section 8 of Article XIIIB of the California Constitution. NOW, THEREFORE, the City Council of the City of Santa Clarita, acting as the legislative body of the City of Santa Clarita Community Facilities District No. 2016-1 (Vista Canyon), does hereby resolve as follows: SECTION 1. The above recitals are true and correct. 8.e Packet Pg. 136 8.e SECTION 2. It is necessary for the CFD to incur bonded indebtedness in the aggregate amount of not to exceed $45,000,000 to finance the costs of the Facilities. The CFD has determined that the whole of the CFD shall pay for the bonded indebtedness. SECTION 3. The bonded indebtedness will be incurred for the purpose of financing the costs of acquiring the Facilities, the financing of the costs associated with the issuance of the bonds, and all other costs necessary to finance the Facilities which are permitted to be financed pursuant to the Act. SECTION 4. The bonds shall be issued in one or more series bearing interest payable semi-annually or in such other manner as the Council shall determine at a maximum interest rate of 12 percent per annum or such rate not in excess of the maximum rate permitted by law at the time the bonds are issued. The term of the bonds shall be determined pursuant to a resolution of the Council authorizing the issuance of the bonds, but such term shall in no event exceed 40 years or such longer term as is then permitted by law. SECTION 5. Pursuant to and in compliance with the provisions of Article 1.5 (commencing with Section 53410) of Chapter 3 of Part 1 of Division 2 of Title 5 of the Government Code, the Council hereby establishes the following accountability measures pertaining to any bonded indebtedness incurred by or on behalf of the City: a) Such bonded indebtedness shall be incurred for the specific purposes set forth in Section 3 above. b) The proceeds of any such bonded indebtedness shall be applied only to the specific purposes identified in Section 3 above. c) The document or documents establishing the terms and conditions for the issuance of any such bonded indebtedness shall provide for the creation of an account or accounts into which the proceeds of such bonded indebtedness shall be deposited. d) The Director of Administrative Services/Deputy City Manager, or his or her designee, acting for and on behalf of the City, shall annually file a report with the Council as required by Government Code Section 53411. SECTION 6. Pursuant to Government Code Sections 53326 and 53353.5, the Council hereby determines to submit to the qualified electors of the CFD a combined proposition (Proposition) to: 1) levy the Special Tax for Facilities on property within the CFD in accordance with the rate and method of apportionment specified in the Resolution of Formation, 2) levy the Special Tax for Services on property within the CFD in accordance with the rate and method of apportionment specified in the Resolution of Formation, 3) incur bonded indebtedness in the amounts not to exceed $45,000,000 to be secured by the Special Tax for Facilities, and 4) establish an annual appropriations limit as defined by subdivision (h) of Section 8 of Article XIIIB of the California Constitution. Said annual appropriations limit shall initially equal the maximum amount of bonded indebtedness authorized to be incurred for the CFD. The form of the Proposition is attached as "Exhibit A." Packet Pg. 137 SECTION 7. A special election is hereby called for the CFD on the Proposition set forth in Section 6 above. SECTION 8. The Council hereby directs that the election be conducted by the City Clerk of the City of Santa Clarita, as the elections official. SECTION 9. The time for notice having been waived by the qualified electors, the date of the special election for the CFD on the Proposition shall be on the 12th day of April 2016. There being no registered voters residing within the territory of the CFD at the time of the protest hearing and ninety (90) days prior thereto, there being only two landowners in the CFD, and the requirements of Section 53326 of the Act having been waived by each such landowner, the ballot for the special election shall be hand delivered to the landowners within the CFD. Each landowner shall have one (1) vote for each acre or portion thereof that it owns within the CFD, as provided by Section 53326 of the Act. The voter ballots shall be returned to the City Clerk at 23920 Valencia Boulevard, Santa Clarita, California 91355, no later than 11:00 o'clock p.m. on April 12, 2016. However, the election may be closed within the concurrence of the City Clerk, as soon as all of the ballots are returned. SECTION 10. Notice of said election and written argument for or against the measure have been waived by the landowners. SECTION 11. The CFD shall constitute a single election precinct for the purpose of holding said election. SECTION 12. The City Clerk shall certify to the adoption of this Resolution. PASSED, APPROVED, AND ADOPTED this 12th day of April 2016. MAYOR ATTEST: CITY CLERK DATE: 8.e Packet Pg. 138 STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) ss. CITY OF SANTA CLARITA ) I, Kevin Tonoian, City Clerk of the City of Santa Clarita, do hereby certify that the foregoing Resolution was duly adopted by the City Council of the City of Santa Clarita, acting as the legislative body of the City of Santa Clarita Community Facilities District No. 2016-1 (Vista Canyon), at a regular meeting thereof, held on the 12th day of April 2016, by the following vote: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: CITY CLERK 8.e Packet Pg. 139 EXHIBIT A OFFICIAL BALLOT CITY OF SANTA CLARITA COMMUNITY FACILITIES DISTRICT NO. 2016-1 (VISTA CANYON) SPECIAL TAX ELECTION April 12, 2016 To vote, mark an "X" in the voting square after the word "YES" or after the word "NO." All marks otherwise made are forbidden. This ballot is provided to , a , as owner or authorized representative of such owner of land within City of Santa Clarita Community Facilities District No. 2016-1 (Vista Canyon) and represents votes. If you wrongly mark, tear, or deface this ballot, please return it to the City Clerk of the City of Santa Clarita at 23920 Valencia Boulevard, Santa Clarita, California 91355. PROPOSITION: (I) Shall the City of Santa Clarita Community Facilities District No. 2016-1 (Vista Canyon) (CFD), subject to the accountability measures provided for in the Resolution Declaring Necessity to Incur Bonded Indebtedness and Calling a Special Election adopted on April 12, 2016, a) be authorized to levy special taxes thereof to finance certain authorized facilities (Facilities), including for the payment of principal and interest on indebtedness and bonds to finance the Facilities, all pursuant to the rate and method of apportionment of special taxes (RMA) set forth in the Resolution of Formation adopted on April 12, 2016, (Resolution of Formation), b) be authorized to levy special taxes thereof for certain authorized services (Services) pursuant to the RMA set forth in the Resolution of Formation, c) incur an indebtedness and be authorized to issue bonds in the aggregate amount of not to exceed $45 million with interest at a rate or rates established at such time as the bonds are sold in one or more series at fixed or variable interest rates, however, not to exceed any applicable statutory rate for such bonds, the proceeds of which will be used to finance the Facilities as described in Resolution of Formation, and (II) shall an annual appropriations limit be established for the CFD pursuant to Article XIIIB of the California Constitution, said initial annual appropriations limit to be equal to $45 million? YES NO 8.e Packet Pg. 140 8.f RESOLUTION NO. 16- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA CLARITA, CALIFORNIA, ACTING AS THE LEGISLATIVE BODY OF THE CITY OF SANTA CLARITA COMMUNITY FACILITIES DISTRICT NO. 2016-1 (VISTA CANYON), CANVASSING THE RESULTS OF THE ELECTION HELD WITHIN THE CITY OF SANTA CLARITA COMMUNITY FACILITIES DISTRICT NO. 2016-1 (VISTA CANYON) WHEREAS, the City Council (Council) of the City of Santa Clarita (City) has previously conducted proceedings pursuant to the Mello -Roos Community Facilities Act of 1982, as amended, commencing with Section 53311 of the Government Code of the State of California (Act), pertaining to the formation of the City of Santa Clarita Community Facilities District No. 2016-1 (Vista Canyon) (CFD), the rate and method of apportionment of special taxes (Special Tax for Facilities) to pay the principal and interest on bonds issued or other debt to finance certain facilities including but not limited to all or a portion of up to three parking structures and a transit station (Facilities), the rate and method of apportionment of special taxes (Special Tax for Services) to finance certain services if required, including but not limited to the services necessary to maintain and operate the Facilities (Services), the establishment of an annual appropriations limit for the CFD and the calling of an election in regard to the foregoing; WHEREAS, on April 12, 2016, an election was held within the CFD relative to the authorization of not to exceed $45,000,000 of indebtedness within the CFD, levy of the Special Tax for Facilities and Special Tax or Services (collectively, Special Tax) pursuant to the rate and method of apportionment, and the establishment of an annual appropriations limit; and WHEREAS, at such election the proposal for incurring the bonded indebtedness, the rate and method of apportionment and manner of collection of the Special Tax, and establishing an appropriations limit for the CFD was approved by the requisite 2/3 of the votes cast by qualified electors of the CFD. NOW, THEREFORE, the City Council of the City of Santa Clarita, acting as the legislative body of the City of Santa Clarita Community Facilities District No. 2016-1 (Vista Canyon), does hereby resolve as follows: SECTION 1. It is hereby determined that the special election conducted within the CFD was duly and validly conducted. SECTION 2. The Council, acting as the legislative body of the CFD, is authorized to levy the Special Tax For Facilities on behalf of the CFD, as specified in Resolution No. 16 - (Resolution of Formation) adopted by the Council on April 12, 2016. SECTION 3. The Council, acting as the legislative body of the CFD, is authorized to levy the Special Tax for Services on behalf of the CFD, if required, as specified in the Resolution of Formation. Packet Pg. 141 SECTION 4. The CFD is authorized to incur indebtedness in the aggregate maximum amount of $45,000,000. SECTION 5. The annual appropriations limit for the CFD as defined by subdivision (h) of Section 8 of Article XIIIB of the California Constitution is set at $45,000,000 for Fiscal Year 2016-17. SECTION 6. The City Clerk is hereby directed and authorized to record notice of the Special Tax by recording a Notice of Special Tax Lien of City of Santa Clarita Community Facilities District No. 2016-1 (Vista Canyon) in the office of the County Recorder of the County of Los Angeles within fifteen (15) days of the date hereof pursuant to Section 3114.5 of the California Streets and Highways Code SECTION 7. The City Clerk shall certify to the adoption of this Resolution. PASSED, APPROVED, AND ADOPTED this 12th day of April 2016. MAYOR ATTEST: CITY CLERK DATE: 8.f Packet Pg. 142 STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) ss. CITY OF SANTA CLARITA ) I, Kevin Tonoian, City Clerk of the City of Santa Clarita, do hereby certify that the foregoing Resolution was duly adopted by the City Council of the City of Santa Clarita, acting as the legislative body of the City of Santa Clarita Community Facilities District No. 2016-1 (Vista Canyon), at a regular meeting thereof, held on the 12th day of April 2016, by the following vote: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: CITY CLERK 8.f Packet Pg. 143 ORDINANCE NO. 16 - AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SANTA CLARITA, CALIFORNIA, ACTING AS THE LEGISLATIVE BODY OF THE CITY OF SANTA CLARITA COMMUNITY FACILITIES DISTRICT NO. 2016-1 (VISTA CANYON), AUTHORIZING THE LEVY OF SPECIAL TAXES WHEREAS, on February 23, 2016, the City Council (Council) of the City of Santa Clarita (City) adopted Resolution No. 16-05 (Resolution of Intention) stating its intention to form City of Santa Clarita Community Facilities District No. 2016-1 (Vista Canyon) (CFD) pursuant to the Mello -Roos Community Facilities Act of 1982, as amended, commencing with Section 53311 of the California Government Code (Act), to finance the purchase, construction, expansion, or rehabilitation of certain real and other tangible property with an estimated useful life of five years or longer, which the CFD is authorized by law to construct, own, or operate, including but not limited to all or a portion of up to three parking structures, a transit station, and related costs including designs, inspections, professional fees, and acquisition costs (Facilities), and to finance certain services if required, including but not limited to labor, material, administration, personnel, equipment, and utilities necessary to maintain and operate the Facilities, that are in addition to those provided in the territory within the CFD prior to the formation of the CFD (Services); and WHEREAS, on February 23, 2016, the Council also adopted Resolution No. 16-06 stating its intention and the necessity to incur bonded indebtedness in the amount of not to exceed $45,000,000 to be issued for the purpose of financing the purchase, construction, expansion, or rehabilitation of the Facilities; and WHEREAS, notice was published as required by law relative to the intention of the d Council to form the CFD and to incur bonded indebtedness in the aggregate amount of not to = �a exceed $45,000,000 within the boundaries of the CFD; and O WHEREAS, on April 12, 2016, this Council held a noticed public hearing as required by c E law relative to the determination to proceed with the formation of the CFD and the rate and method of apportion and manner of collection of the special taxes to be levied within the CFD, a and relative to the necessity for authorizing the bonds, the purpose for which the bonds are to be issued, the amount of the proposed debt, the maximum term of the bonds, and the maximum annual rate of interest to be paid; and WHEREAS, at said hearing all persons desiring to be heard on all matters pertaining to the formation of the CFD, the levy of the special taxes, and the incurring of bonded indebtedness by the CFD were heard, and a full and fair hearing was held; and WHEREAS, the Council subsequent to said hearing, adopted Resolution No. 16 - (Resolution of Formation) determining the validity of prior proceedings and establishing the CFD; and Packet Pg. 144 WHEREAS, the Council subsequent to said hearing adopted Resolution No. 16 - which called an election within the CFD for April 12, 2016, on the propositions of levying the special taxes, incurring bonded indebtedness, and setting an appropriations limit; and WHEREAS, on April 12, 2016, an election was held within the CFD in which the eligible electors approved by more than two-thirds vote the proposition of levying the special taxes, incurring bonded indebtedness, and setting an appropriations limit. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA CLARITA, CALIFORNIA, DOES HEREBY ORDAIN AS FOLLOWS: SECTION 1. A special tax (Special Tax For Facilities) is levied within the boundaries of the CFD pursuant to the formulas set forth in "Exhibit A" attached hereto and incorporated by reference, or as may be modified or amended from time to time by a resolution of change or annexation adopted pursuant to the provisions of the Act (RMA), in an amount necessary to pay all of the costs of providing the Facilities, periodic costs, and costs of the tax levy and collection, and all other costs including amounts payable with respect to the bonded indebtedness. SECTION 2. A special tax (Special Tax for Services) is levied within the boundaries of the CFD pursuant to the formula set forth in the RMA, in an amount necessary to pay all of the costs of providing the Services, periodic costs, costs of the tax levy and collection, and all other costs. SECTION 3. [[This legislative body is hereby further authorized each year, by resolution adopted]] or [[The Director of Administrative Services/Deputy City Manager is hereby further authorized]] as provided in section 53340 of the Act on or before June 30 of each year to determine the specific special tax rate and amount to be levied for the next fiscal year in accordance with the RMA and to prepare or cause to be prepared a list of all nonexempt parcels within the CFD and the specific amount of the special taxes for each parcel, except that the special tax rates to be levied shall not exceed the maximum rates contained in the RMA. SECTION 4. All of the collections of the Special Tax for Facilities and the Special Tax for Services shall be used as provided for in the Act and the Resolution of Formation and any resolution of change or annexation adopted from time to time by the Council. The Special Tax for Facilities shall be levied only so long as needed for its purpose as described in Resolution of Intention. SECTION 5. The above authorized Special Tax for Facilities and the Special Tax for Services shall be collected in the same manner as ordinary ad valorem property taxes are collected and shall be subject to the same penalties and procedure, sale, and lien priority in cases of delinquency as is provided for ad valorem taxes; provided, however, the CFD may collect the Special Tax for Facilities and the Special Tax for Services at a different time or in a different manner if necessary to meet its financial obligations. SECTION 6. The Mayor shall sign this Ordinance, and the City Clerk shall attest to such signature. The City Clerk is directed to cause the title and summary or text of this Ordinance, Packet Pg. 145 together with the vote thereon, to be published within fifteen (15) days after its passage at least once in a newspaper of general circulation published and circulated within the territorial jurisdiction of the City and to post at the offices of the City a certified copy of the full text of the adopted Ordinance along with the names of the Councilmembers voting for and against the Ordinance. SECTION 7. This Ordinance relating to the levy of the special taxes takes effect and shall be in force immediately after the date of final passage. A copy of this Ordinance shall be transmitted to the Assessor and the Treasurer -Tax Collector of Los Angeles County. PASSED, APPROVED, AND ADOPTED this day of , 2016. MAYOR ATTEST: CITY CLERK DATE: _ U N STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) ss. CITY OF SANTA CLARITA ) I, Kevin Tonoian, City Clerk of the City of Santa Clarita, do hereby certify that the foregoing Ordinance was introduced by the City Council of the City of Santa Clarita at a regular p meeting thereof, held on day of , 2016, and was duly adopted at a regular meeting of the City Council, held on the day of , 2016, by the following vote: a AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: CITY CLERK Packet Pg. 146 EXHIBIT A RATE AND METHOD OF APPORTIONMENT FOR CITY OF SANTA CLARITA COMMUNITY FACILITIES DISTRICT NO. 2016-1 (VISTA CANYON) 8.g A Special Tax as hereinafter defined shall be levied on all Assessor's Parcels in City of Santa Clarita Community Facilities District No. 2016-1 (Vista Canyon) ("CFD No. 2016-1") and collected each Fiscal Year commencing in Fiscal Year 2016-17, in an amount determined by the City Council through the application of the Rate and Method of Apportionment as described below. All of the real property in CFD No. 2016-1, 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 terms hereinafter set forth have the following meanings: "Acre" or "Acreage" means the land area of an Assessor's Parcel as shown on an Assessor's Parcel Map, or if the land area is not identified on an Assessor's Parcel Map, the land area identified on the applicable final map, parcel map, condominium plan, or other recorded County parcel map. "Act" means the Mello -Roos Community Facilities Act of 1982, as amended, being Chapter 2.5, Division 2 of Title 5 of the Government Code of the State of California. "Administrative Expenses" means the following actual or reasonably estimated costs directly related to the administration of CFD No. 2016-1: the costs of computing the Special Taxes and preparing the annual Special Tax collection schedules (whether by the City or designee thereof or both); the costs of collecting the Special Taxes (whether by the City or otherwise); the costs of remitting the Special Taxes to the Trustee; the costs of the Trustee (including its legal counsel) in the discharge of the duties required of it under the Indenture; the costs to the City, CFD No. 2016-1 or any designee thereof of complying with arbitrage rebate requirements; the costs to the City, CFD No. 2016-1 or any designee thereof of complying with disclosure requirements of the City, CFD No. 2016-1 or obligated persons associated with applicable federal and state securities laws and the Act; the costs associated with preparing Special Tax disclosure statements and responding to public inquiries regarding the Special Taxes; the costs of the City, CFD No. 2016-1 or any designee thereof related to an appeal of any Special Tax levy; the costs associated with the release of funds from an escrow account; and the City's annual administration fees and third party expenses. Administrative Expenses shall also include amounts estimated by the CFD Administrator or advanced by the City or CFD No. 2016-1 for any other administrative purposes of CFD No. 2016-1, including attorney's fees and other costs related to commencing and pursuing to completion any foreclosure action to collect delinquent Special Taxes. City of Santa Clarita CFD No. 2016-1 (Vista Canyon) Rate and Method of Apportionment February 4, 2016 Page 1 Packet Pg. 147 8.g "Apartment Property" means any Assessor's Parcel for which one or more building permits have been issued for attached residential units, all of which are made available for rental, but not purchase, by the general public. "Apartment Unit" means a for -rent residential unit located on an Assessor's Parcel of Apartment Property. "Assessor's Parcel" means a lot or parcel shown on an Assessor's Parcel Map 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. "Assigned Special Tax for Facilities" means the Special Tax for each Land Use Class of Developed Property, as determined in accordance with Section C below. "Backup Special Tax for Facilities" means the Special Tax applicable to each Assessor's Parcel of Developed Property, as determined in accordance with Section C below. "Bonds" means any bonds or other debt (as defined in Section 53317(d) of the Act), whether in one or more series, issued by CFD No. 2016-1 under the Act. "CFD Administrator" means an official of the City, or designee thereof, responsible for determining the Special Tax Requirement for Facilities, the Special Tax Requirement for Services, as described in Section I, and providing for the levy and collection of the Special Taxes. "CFD No. 2016-1" means City of Santa Clarita Community Facilities District No. 2016-1 (Vista Canyon). "City" means the City of Santa Clarita. "Condominium Conversion Property" means any Assessor's Parcel previously classified as Apartment Property, or any portion thereof, that has converted to condominium units for purchase by the general public. "Council" means the City Council of the City of Santa Clarita, acting as the legislative body of CFD No. 2016-1. "County" means the County of Los Angeles, California. "Developed Property" means, for each Fiscal Year, all Taxable Property, exclusive of Taxable Property Owner Association Property, Taxable Public Property, and Taxable Religious Property, for which a building permit for new construction was issued prior to May 1 of the prior Fiscal Year. Notwithstanding the foregoing, (a) if a building permit is revoked, expired or otherwise cancelled and a new building permit is issued for the same property prior to the issuance of Bonds, then, the building square footage and building type as indicated on the new building permit shall thereafter be used for purposes of determining the Land Use Class, (b) if a building permit is revoked, expired or otherwise cancelled and a new building permit is issued for the City of Santa Clarita CFD No. 2016-1(Vista Canyon) February 4, 2016 Rate and Method of Apportionment Page 2 Packet Pg. 148 8.g same property after the issuance of Bonds, and the amount of Assigned Special Tax for Facilities which may be levied pursuant to the new building permit is greater than the Assigned Special Tax for Facilities which may be levied pursuant to the original building permit, then the building square footage and building type as indicated on the new building permit shall thereafter be used for purposes of determining the Land Use Class, otherwise the Land Use Class pursuant to the original building permit shall continue to be used, and (c) if a building permit is revoked, expired or otherwise cancelled and no new building permit is issued for the same property, then the property will continue to be considered Developed Property and taxed based on the original building permit. "Fiscal Year" means the period starting July 1 and ending on the following June 30. "Floor Area" means the total building square footage of the building(s) located on an Assessor's Parcel, measured from outside wall to outside wall, not including space devoted to stairwells, public restrooms, lighted courts, vehicle parking and areas incident thereto, and mechanical equipment incidental to the operation of such building(s). The determination of Floor Area shall be made by reference to the building permit(s) issued for such Assessor's Parcel and/or to the appropriate records kept by the City, as reasonably determined by the CFD Administrator. "Hotel Property" means Assessor's Parcels of Developed Property for which a building permit has been issued by the City permitting the construction of a non-residential structure that constitutes a place of lodging providing sleeping accommodations and related facilities for travelers. "Hotel Room" means a hotel room or suite available for overnight lodging located on an Assessor's Parcel of Hotel Property. "Indenture" means the indenture, fiscal agent agreement, resolution or other instrument pursuant to which Bonds are issued, as modified, amended and/or supplemented from time to time, and any instrument replacing or supplementing the same. "Land Use Class" means any of the classes listed in Table 1 below. "Maximum Special Tax for Facilities" means for each Fiscal Year for each Assessor's Parcel, the maximum Special Tax for Facilities, determined in accordance with Section C below, that can be levied on such Assessor's Parcel in such Fiscal Year. "Non -Residential Property" means all Assessor's Parcels of Developed Property, exclusive of Office Property, Retail Property and Hotel Property, for which a building permit(s) was issued for a non-residential use. "Office Property" means Assessor's Parcels of Developed Property for which a building permit has been issued by the City permitting the construction of one or more non-residential facilities which is primarily used for: professional or medical offices, or for any other uses that are consistent with office land use designations, as determined by the City. "Outstanding Bonds" means all Bonds which are deemed to be outstanding under the Indenture. City of Santa Clarito CFD No. 2016-1 (Vista Canyon) February 4, 2016 Rate and Method of Apportionment Page 3 Packet Pg. 149 8.g "Partial Prepayment Amount" means the amount required to prepay a portion of the Special Tax obligation for an Assessor's Parcel as described in Section G. "Prepayment Amount" means the amount required to prepay the Special Tax obligation for an Assessor's Parcel as described in Section G. "Property Owner Association Property" means, for each Fiscal Year, any property within the boundaries of CFD No. 2016-1 that is owned in fee or by easement, or dedicated to, a property owner association, including any master or sub -association as of January 1 of the prior Fiscal Year. "Proportionately" means (i) with respect to the Special Tax for Facilities, (A) for Developed Property that the ratio of the actual Special Tax for Facilities levy to the Assigned Special Tax for Facilities is equal for all Assessor's Parcels of Developed Property within CFD No. 2016-1, (B) for Undeveloped Property, that the ratio of the actual Special Tax for Facilities levy per Acre to the Maximum Special Tax for Facilities per Acre is equal for all Assessor's Parcels of Undeveloped Property in CFD No. 2016-1, and (C) for Taxable Public Property, Taxable Property Owner Association Property and Taxable Religious Property, that the ratio of the actual Special Tax for Facilities levy per Acre to the Maximum Special Tax for Facilities per Acre is equal for all Assessor's Parcels of Taxable Public Property, Taxable Property Owner Association Property or Taxable Religious Property, as applicable, and (ii) with respect to the Special Tax for Services, for Developed Property that the ratio of the actual Special Tax for Services levy to the Maximum Special Tax for Services is equal for all Assessor's Parcels of Developed Property within CFD No. 2016-1. "Public Property" means, for each Fiscal Year, any property within the boundaries of CFD No. 2016-1 that is used for rights-of-way or any other purpose and is owned by, dedicated to, or irrevocably offered for dedication to the federal government, the State of California, the City or any other public agency as of January 1 of the prior Fiscal Year; provided however that any property leased by a public agency to a private entity and subject to taxation under Section 53340.1 of the Act shall be taxed and classified in accordance with its use. In order to ensure that such property is correctly classified as Public Property, the owner of such property shall provide the CFD Administrator with a copy of any applicable documents. "Religious Property" means, for each Fiscal Year, all property within the boundaries of CFD No. 2016-1 which (i) is either (a) used primarily as a place of worship or (b) vacant land or land under construction that is intended to be used primarily as a place of worship as determined by the CFD Administrator; and (ii) is exempt from ad valorem property taxes because it is owned by a religious organization as of January 1 of the prior Fiscal Year. Religious Property, without limitation, does not include any Assessor's Parcels used primarily for religious schools, day care centers, or congregate care facilities. "Residential Property" means all Assessor's Parcels of Developed Property, not including Apartment Property or Condominium Conversion Property, for which a building permit has been issued for purposes of constructing one or more for -sale residential dwelling units. City of Santa Clarita CFD No. 2016-1 (Vista Canyon) Rate and Method of Apportionment February 4, 2016 Page 4 Packet Pg. 150 8.g "Retail Property" means Assessor's Parcels of Developed Property for which a building permit has been issued by the City permitting the construction of one or more non-residential facilities which is primarily used for: the sale of general merchandise, hard goods, personal services, and other items directly to consumers, or other uses that are consistent with retail land use designations, as determined by the City. "Special Tax" means, as applicable, the Special Tax for Facilities or the Special Tax for Services "Special Tax for Facilities" means the special tax to be levied in each Fiscal Year on each Assessor's Parcel of Taxable Property by CFD No. 2016-1 pursuant to the Act to fund the Special Tax Requirement for Facilities. "Special Tax Requirement for Facilities" means for each Fiscal Year, that amount required for CFD No. 2016-1 to pay the sum of: (i) debt service on all Outstanding Bonds or Bonds expected to be issued in such Fiscal Year; (ii) periodic costs on the Bonds, including but not limited to, credit enhancement and rebate payments on the Bonds; (iii) Administrative Expenses related to the Special Tax for Facilities; (iv) any amounts required to establish a reserve fund for Bonds expected to be issued in such Fiscal Year or replenish any reserve funds established by the Indenture for any Outstanding Bonds to the extent such replenishment has not been included in the computation of the Special Tax Requirement for Facilities in a previous Fiscal Year; and (v) any amounts required for construction of facilities eligible to be constructed or acquired by CFD No. 2016-1 under the Act, provided that such amounts do not increase the Special Tax for Facilities levied on Undeveloped Property, Taxable Public Property, Taxable Religious Property, and Taxable Property Owners' Association Property. In arriving at the Special Tax Requirement for Facilities, the CFD Administrator shall take into account the reasonably anticipated delinquent Special Tax for Facilities based on the delinquency rate for Special Tax for Facilities levied in the previous Fiscal Year and shall give a credit for funds available to reduce the annual Special Tax for Facilities levy. "State" means the State of California. "Taxable Property" means all of the Assessor's Parcels within the boundaries of CFD No. 2016-1 which are not exempt from the Special Tax for Facilities pursuant to law or Section E below. "Taxable Property Owner Association Property" means all Assessor's Parcels of Property Owner Association Property that are not exempt pursuant to Section E below. "Taxable Public Property" means all Assessor's Parcels of Public Property that are not exempt pursuant to Section E below. "Taxable Religious Property" means all Assessor's Parcels of Religious Property that are not exempt pursuant to Section E below. "Trustee" means the trustee, fiscal agent, or paying agent under the Indenture. "Undeveloped Property" means, for each Fiscal Year, all Taxable Property not classified as Developed Property, Taxable Property Owner Association Property, Taxable Public Property, or Taxable Religious Property. City of Santa Clarita CFD No. 2016-1(Vista Canyon) February 4, 2016 Rate and Method of Apportionment Page 5 Packet Pg. 151 8.g "Zone" means any one of the separate geographic areas within CFD No. 2016-1 designated on Exhibit A herein as: Zone 1 or Zone 2. B. ASSIGNMENT TO LAND USE CATEGORIES Each Fiscal Year, commencing with Fiscal Year 2016-17, each Assessor's Parcel of Taxable Property within Zone 1 and each Assessor's Parcel of Taxable Property within Zone 2 shall be classified as Developed Property, Taxable Public Property, Taxable Property Owner Association Property, Taxable Religious Property, or Undeveloped Property, and shall be subject to Special Tax for Facilities in accordance with the rate and method of apportionment determined pursuant to Sections C and D below. The Assigned Special Tax for Facilities for each Assessor's Parcel of Developed Property shall be based on the Land Use Class for such Assessor's Parcel. C. MAXIMUM SPECIAL TAX FOR FACILITIES 1. Developed Property a. Maximum Special Tax for Facilities The Maximum Special Tax for Facilities for each Assessor's Parcel classified as Developed Property shall be the greater of (i) the amount derived by application of the Assigned Special Tax for Facilities or (ii) the amount derived by application of the Backup Special Tax for Facilities for the Zone in which such Assessor's Parcel is located. b. Assigned Special Tax for Facilities The Assigned Special Tax for Facilities for each Land Use Class for Fiscal Year 2016-17 is shown below in Table 1. TABLE 1 Zone 1 and Zone 2 For Fiscal Year 2016-17 City of Santa Clarita CFD No. 2016-1(Vista Canyon) Rate and Method of Apportionment February 4, 2016 Page 6 Packet Pg. 152 Assigned Special Tax for Facilities for Developed Property 8.g Land Use Description Assigned Special Tax Class for Facilities $667.00 per 1 Apartment Property Apartment Unit $1.15 per square 2 Office Property foot of Floor Area $3.00 per square 3 Retail Property foot of Floor Area $1.15 per square 4 Non -Residential Property foot of Floor Area $300.00 per 5 Hotel Property Hotel Room 6 Condominium Conversion Property $667.00 per Unit c. Multiple Land Use Classes In some instances an Assessor's Parcel of Developed Property may contain more than one Land Use Class. In such cases, the Acreage of the Assessor's Parcel shall be allocated between the different Land Use Classes based on the site plan or other available information. The Maximum Special Tax for Facilities that can be levied on such Assessor's Parcel shall be the sum of the Maximum Special Tax for Facilities that can be levied on each type of property located on that Assessor's Parcel. d. Backup Special Tax for Facilities The Backup Special Tax for Facilities for Assessor's Parcels of Developed Property in Zone 1 shall equal $46,721 per Acre for Fiscal Year 2016-17, and the Backup Special Tax for Facilities for Assessor's Parcels of Developed Property in Zone 2 shall equal $115,908 per Acre for Fiscal Year 2016-17. City of Santa Clorita CFD No. 2016-1(Vista Canyon) Rate and Method of Apportionment February 4, 2016 Page 7 Packet Pg. 153 8.g , e. Increase in the Assigned Special Tax for Facilities and Backup Special Tax for Facilities On each July 1, commencing on July 1, 2017, the Assigned Special Tax for Facilities and the Backup Special Tax for Facilities for Developed Property shall be increased by an amount equal to two percent (2%) of the amount in effect for the previous Fiscal Year. 2. Taxable Property Owner Association Property, Taxable Public Property, Taxable Religious Property, and Undeveloped Property a. Maximum Special Tax for Facilities For Fiscal Year 2016-17, the Maximum Special Tax for Facilities for Taxable Property Owner Association Property, Taxable Public Property, Taxable Religious Property, and Undeveloped Property shall equal $46,721 per Acre for Assessor's Parcels in Zone 1 and $115,908 per Acre for Assessor's Parcels in Zone 2. b. Increase in the Maximum Special Tax for Facilities On each July 1, commencing on July 1, 2017, the Maximum Special Tax for Facilities for Taxable Property Owner Association Property, Taxable Public Property, Taxable Religious Property, and Undeveloped Property shall be increased by an amount equal to two percent (2%) of the amount in effect for the previous Fiscal Year. D. METHOD OF APPORTIONMENT OF THE SPECIAL TAX FOR FACILITIES Commencing with Fiscal Year 2016-17 and for each following Fiscal Year, the City shall levy the Special Tax for Facilities until the amount of Special Tax for Facilities levied equals the Special Tax Requirement for Facilities. The Special Tax for Facilities shall be levied each Fiscal Year as follows: 1. Apportionment of Special Tax for Facilities prior to Completion of Development C 10 First: The Special Tax for Facilities shall be levied Proportionately on each Assessor's Parcel =_ of Developed Property within Zone 1 at up to 100% of the applicable Assigned Special Tax O for Facilities as needed to satisfy the Special Tax Requirement for Facilities; 1 m Second: If additional monies are needed to satisfy the Special Tax Requirement for Facilities t after the first step has been completed, the Special Tax for Facilities shall be levied Proportionately on each Assessor's Parcel of Undeveloped Property within Zone 1 at up to a 100% of the Maximum Special Tax for Facilities for Undeveloped Property; Third: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after the first two steps have been completed, then the Special Tax for Facilities shall be levied Proportionately on each Assessor's Parcel of Developed Property within Zone 2 at up to 100% of the applicable Assigned Special Tax for Facilities; Fourth: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after the first three steps have been completed, the Special Tax for Facilities shall be levied City of Santa Clarita CFD No. 2016-1 (Vista Canyon) February 4, 2016 Rate and Method of Apportionment Page 8 Packet Pg. 154 8.g Proportionately on each Assessor's Parcel of Undeveloped Property within Zone 2 at up to 100% of the Maximum Special Tax for Facilities for Undeveloped Property; Fifth: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after the first four steps have been completed, then the levy of the Special Tax for Facilities on each Assessor's Parcel of Developed Property in Zone 1 and each Assessor's Parcel of Developed Property in Zone 2 for which the Maximum Special Tax for Facilities is determined through the application of the Backup Special Tax for Facilities shall be increased Proportionately from the Assigned Special Tax for Facilities up to the Maximum Special Tax for Facilities for each such Assessor's Parcel; Sixth: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after the first five steps have been completed, then the Special Tax for Facilities shall be levied Proportionately on each Assessor's Parcel of Taxable Property Owner Association Property or Taxable Religious Property at up to the Maximum Special Tax for Facilities for Taxable Property Owner Association Property or Taxable Religious Property. Seventh: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after the first six steps have been completed, then the Special Tax for Facilities shall be levied Proportionately on each Assessor's Parcel of Taxable Public Property at up to the Maximum Special Tax for Facilities for Taxable Public Property. 2. Apportionment of Special Tax for Facilities upon Completion of Development Once the CFD Administrator has determined that there is no Undeveloped Property in both 'r° N Zone 1 and Zone 2, the Special Tax for Facilities shall be levied each Fiscal Year as follows: '> First: The Special Tax for Facilities shall be levied Proportionately on each Assessor's Parcel le of Developed Property within Zone 1 and Zone 2 at up to 100% of the applicable Assigned Special Tax for Facilities as needed to satisfy the Special Tax Requirement for Facilities; c M Second: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after the first step has been completed, then the levy of the Special Tax for Facilities on each 0 Assessor's Parcel of Developed Property in Zone 1 and each Assessor's Parcel of Developed c Property in Zone 2 for which the Maximum Special Tax for Facilities is determined through m E the application of the Backup Special Tax for Facilities shall be increased Proportionately from the Assigned Special Tax for Facilities up to the Maximum Special Tax for Facilities for Q each such Assessor's Parcel; Third: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after the first two steps have been completed, then the Special Tax for Facilities shall be levied Proportionately on each Assessor's Parcel of Taxable Property Owner Association Property or Taxable Religious Property at up to the Maximum Special Tax for Facilities for Taxable Property Owner Association Property or Taxable Religious Property; Fourth: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after the first three steps have been completed, then the Special Tax for Facilities shall be City of Santa Clorita CFD No. 2016-1(Vista Canyon) February 4, 2016 Rate and Method of Apportionment Page 9 Packet Pg. 155 8.g levied Proportionately on each Assessor's Parcel of Taxable Public Property at up to the Maximum Special Tax for Facilities for Taxable Public Property. Notwithstanding the above, under no circumstances will the Special Tax for Facilities levied in a Fiscal Year against any Assessor's Parcel of Apartment Property or Condominium Conversion Property for which an occupancy permit for private residential use has been issued be increased by more than ten percent (10%) above the amount that would have been levied in that Fiscal Year as a consequence of delinquency or default by the owner of any other Assessor's Parcel within CFD No. 2016-1. To the extent that the levy of the Special Tax for Facilities on Residential Property is limited by the provision in the previous sentence, the levy of the Special Tax for Facilities on all other Assessor's Parcels shall continue in equal percentages at up to 100% of the Maximum Special Tax for Facilities. E. EXEMPTIONS No Special Tax for Facilities shall be levied on any Assessor's Parcels of Residential Property. In addition, the CFD Administrator shall classify Property Owner Association Property, Public Property, and Religious Property as exempt from the Special Tax for Facilities, provided that no such classification would reduce the Acreage of Taxable Property to less than 14.75 Acres in Zone 1 and 10.60 Acres in Zone 2. Special Taxes for Facilities shall not be levied on any Assessor's Parcel, or portion thereof, not within Zone 1 or Zone 2. Tax-exempt status will be assigned to Assessor's Parcels by the CFD Administrator in the chronological order in which such Assessor's Parcels become Property Owner Association Property, Public Property, or Religious Property. However, should an Assessor's Parcel no longer be classified as Property Owner Association Property, Public Property, or Religious Property its tax-exempt status will be revoked and it will thereafter be classified as Developed Property or Undeveloped Property in accordance with Section D above. Property Owner Association Property, Public Property, or Religious Property that is not exempt from Special Tax for Facilities under this section shall be subject to the levy of the Special Tax for Facilities and shall be taxed Proportionately as part of the sixth and seventh steps, respectively, in Section D above, at up to 100% of the applicable Maximum Special Tax for Facilities for Taxable Property Owner Association Property, Taxable Public Property, or Taxable Religious Property. F. MANNER OF COLLECTION The Special Tax for Facilities shall be collected in the same manner and at the same time as ordinary ad valorem property taxes; provided, however, that CFD No. 2016-1 may directly bill the Special Tax for Facilities, may collect the Special Tax for Facilities at a different time or in a different manner if necessary to meet its financial obligations, and may covenant to foreclose and may actually foreclose on delinquent Assessor's Parcels as permitted by the Act. Tenders of Bonds may be accepted for payment of the Special Tax for Facilities upon the terms and conditions established by the Act and permitted by CFD No. 2016-1. The use of Bond tenders shall only be allowed on a case-by-case basis as specifically approved by the Council. City of Santa Clarita CFD No. 2016-1(Vista Canyon) February 4, 2016 Rate and Method of Apportionment Page 10 Packet Pg. 156 8.g G. PREPAYMENT OF SPECIAL TAX FOR FACILITIES The following definitions apply to this Section G: "CFD Public Facilities Cost" means either $29,000,000 million in 2016 dollars, which shall increase by the Construction Inflation Index on July 1, 2017, and on each July 1 thereafter, or such lower number as (i) shall be determined by the CFD Administrator as sufficient to provide the public facilities to be provided by CFD No. 2016-1 under the authorized bonding program for CFD No. 2016-1, or (ii) shall be determined by the Council concurrently with a covenant that it will not issue any more Bonds to be supported by the Special Tax for Facilities levied under this Rate and Method of Apportionment as described in Section D. "Construction Fund" means an account specifically identified in the Indenture to hold funds which are currently available for expenditure to acquire or construct public facilities eligible under the Act. "Construction Inflation Index" means, for a Fiscal Year, the annual percentage change in the Engineering News -Record Building Cost Index for the City of Los Angeles, measured as of the calendar year which ends in the previous Fiscal Year. In the event this index ceases to be published, the Construction Inflation Index shall be another index as determined by the CFD Administrator that is reasonably comparable to the Engineering News -Record Building Cost Index for the City of Los Angeles. "Future Facilities Costs" means the CFD Public Facilities Cost minus (i) public facility costs previously paid from the Construction Fund, (ii) moneys currently on deposit in the Construction Fund, and (iii) moneys currently on deposit in an escrow fund that are expected to be available to finance facilities costs. "Outstanding Bonds" means all Previously Issued Bonds which are deemed to be outstanding under the Indenture after the first interest and/or principal payment date following the current Fiscal Year. "Previously Issued Bonds" means all Bonds that have been issued by CFD No. 2016-1 prior to the date of prepayment. 1. Prepayment in Full The obligation to pay the Special Tax for Facilities for an Assessor's Parcel may be prepaid and permanently satisfied as described herein; provided that there are no delinquent amounts of Special Tax for Facilities with respect to such Assessor's Parcel at the time of prepayment. An owner of an Assessor's Parcel intending to prepay the Special Tax for Facilities obligation shall provide the CFD Administrator with written notice of intent to prepay. Within 30 days of receipt of such written notice, the CFD Administrator shall notify such owner of the prepayment amount for such Assessor's Parcel. The CFD Administrator may charge a reasonable fee for providing this figure. Prepayment must be made not less than 45 days prior to the next occurring date that notice of redemption of Bonds from the proceeds of such prepayment may be given to the Trustee pursuant to the Indenture. City of Santa Clarita CFD No. 2016-1 (Vista Canyon) February 4, 2016 Rate and Method of Apportionment Page 11 Packet Pg. 157 8.g The Prepayment Amount (defined below) shall be calculated as summarized below (capitalized terms as defined below): As of the proposed date of prepayment, the Prepayment Amount shall be calculated as follows: Paragraph No.: 1. For Assessor's Parcels of Developed Property, compute the Assigned Special Tax for Facilities and Backup Special Tax for Facilities applicable for the Assessor's Parcel to be prepaid. For Assessor's Parcels of Undeveloped Property for which a building permit has been issued, compute the Assigned Special Tax for Facilities and Backup Special Tax for Facilities for that Assessor's Parcel as though it was already designated as Developed Property, based upon the building permit which has already been issued for that Assessor's Parcel. For Assessor's Parcels of Undeveloped Property for which a building permit has not been issued, Taxable Property Owner Association Property, Taxable Public Property, or Taxable Religious Property, compute the Maximum Special Tax for Facilities for the Assessor's Parcel to be prepaid. 2. (a) For an Assessor's Parcel of Developed Property or Undeveloped Property for which a building permit has been issued (i) Divide the Assigned Special Tax for Facilities computed pursuant to paragraph 1 by the total estimated Assigned Special Tax for Facilities for the entire CFD No. 2016-1 based on the Developed Property Special Tax for Facilities which could be charged in the current Fiscal Year on all expected development through buildout of CFD No. 2016-1, excluding any Assessor's Parcels which have been prepaid, and (ii) Divide the Backup Special Tax for Facilities computed pursuant to paragraph 1 by the total estimated Backup Special Tax for Facilities for the entire CFD No. 2016-1 based on the Backup Special Tax for Facilities which could be charged in the current Fiscal Year on all expected development through buildout of CFD No. 2016-1, excluding any Assessor's Parcels which have been prepaid. (b) For Assessor's Parcels of Undeveloped Property for which a building permit has not been issued, Taxable Property Owner Association Property, Taxable Public Property, or Taxable Religious Property, divide the Maximum Special Tax for Facilities computed pursuant to paragraph 1 by the total estimated Maximum Special Tax for Facilities for the entire CFD No. 2016-1 based on the Maximum Special Tax for Facilities which could be charged in the current Fiscal Year on all expected development through buildout of CFD No. 2016-1, excluding any Assessor's Parcels which have been prepaid. City of Santa Clarita CFD No. 2016-1(Vista Canyon) February 4, 2016 Rate and Method of Apportionment Page 12 Packet Pg. 158 Bond Redemption Amount plus Redemption Premium plus Future Facilities Amount plus Defeasance Amount plus Administrative Fees and Expenses less Reserve Fund Credit less Capitalized Interest Credit equals Prepayment Amount As of the proposed date of prepayment, the Prepayment Amount shall be calculated as follows: Paragraph No.: 1. For Assessor's Parcels of Developed Property, compute the Assigned Special Tax for Facilities and Backup Special Tax for Facilities applicable for the Assessor's Parcel to be prepaid. For Assessor's Parcels of Undeveloped Property for which a building permit has been issued, compute the Assigned Special Tax for Facilities and Backup Special Tax for Facilities for that Assessor's Parcel as though it was already designated as Developed Property, based upon the building permit which has already been issued for that Assessor's Parcel. For Assessor's Parcels of Undeveloped Property for which a building permit has not been issued, Taxable Property Owner Association Property, Taxable Public Property, or Taxable Religious Property, compute the Maximum Special Tax for Facilities for the Assessor's Parcel to be prepaid. 2. (a) For an Assessor's Parcel of Developed Property or Undeveloped Property for which a building permit has been issued (i) Divide the Assigned Special Tax for Facilities computed pursuant to paragraph 1 by the total estimated Assigned Special Tax for Facilities for the entire CFD No. 2016-1 based on the Developed Property Special Tax for Facilities which could be charged in the current Fiscal Year on all expected development through buildout of CFD No. 2016-1, excluding any Assessor's Parcels which have been prepaid, and (ii) Divide the Backup Special Tax for Facilities computed pursuant to paragraph 1 by the total estimated Backup Special Tax for Facilities for the entire CFD No. 2016-1 based on the Backup Special Tax for Facilities which could be charged in the current Fiscal Year on all expected development through buildout of CFD No. 2016-1, excluding any Assessor's Parcels which have been prepaid. (b) For Assessor's Parcels of Undeveloped Property for which a building permit has not been issued, Taxable Property Owner Association Property, Taxable Public Property, or Taxable Religious Property, divide the Maximum Special Tax for Facilities computed pursuant to paragraph 1 by the total estimated Maximum Special Tax for Facilities for the entire CFD No. 2016-1 based on the Maximum Special Tax for Facilities which could be charged in the current Fiscal Year on all expected development through buildout of CFD No. 2016-1, excluding any Assessor's Parcels which have been prepaid. City of Santa Clarita CFD No. 2016-1(Vista Canyon) February 4, 2016 Rate and Method of Apportionment Page 12 Packet Pg. 158 8.g 3. Multiply the larger of quotient (i) and (ii) computed pursuant to paragraph 2(a) for Assessor's Parcels of Developed Property or Undeveloped Property for which a building permit has been issued, or the quotient computed pursuant to paragraph 2(b) for Assessor's Parcels of Undeveloped Property for which a building permit has not been issued, Taxable Property Owner Association Property, Taxable Public Property, or Taxable Religious Property, by the Outstanding Bonds to compute the amount of Outstanding Bonds to be retired and prepaid (the "Bond Redemption Amount"). 4. Multiply the Bond Redemption Amount computed pursuant to paragraph 3 by the applicable redemption premium, if any, on the Outstanding Bonds to be redeemed (the "Redemption Premium"). 5. Compute the current Future Facilities Costs. 6. Multiply the larger of quotient (i) and (ii) computed pursuant to paragraph 2(a) for Assessor's Parcels of Developed Property or Undeveloped Property for which a building permit has been issued, or the quotient computed pursuant to paragraph 2(b) for Assessor's Parcels of Undeveloped Property for which a building permit has not been issued, Taxable Property Owner Association Property, Taxable Public Property, or Taxable Religious Property, by the amount determined pursuant to paragraph 5 to compute the amount of Future Facilities Costs to be prepaid (the "Future Facilities Amount"). 7. Compute the amount needed to pay interest on the Bond Redemption Amount from the first bond interest and/or principal payment date following the current Fiscal Year until the earliest redemption date for the Outstanding Bonds. 8. Confirm that no Special Tax for Facilities delinquencies apply to such Assessor's Parcel. 9. Determine the amount of Special Tax for Facilities levied on the Assessor's Parcel in the current Fiscal Year which have not yet been paid. 10. Compute the minimum amount the CFD Administrator reasonably expects to derive from the reinvestment of the Prepayment Amount less the Future Facilities Amount and the Administrative Fees and Expenses from the date of prepayment until the redemption date for the Outstanding Bonds to be redeemed with the prepayment. 11. Add the amounts computed pursuant to paragraphs 7 and 9 and subtract the amount computed pursuant to paragraph 10 (the "Defeasance Amount"). 12. Verify the administrative fees and expenses of CFD No. 2016-1, including 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"). 13. The reserve fund credit (the "Reserve Fund Credit") 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 City of Santa Clarita CFD No. 2016-1 (Vista Canyon) February 4, 2016 Rate and Method of Apportionment Page 13 Packet Pg. 159 8.g (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. 14. If any capitalized interest for the Outstanding Bonds will not have been expended at the time of the first interest and/or principal payment following the current Fiscal Year, a capitalized interest credit shall be calculated by multiplying the larger of quotient (i) and (ii) computed pursuant to paragraph 2(a) for Assessor's Parcels of Developed Property or Undeveloped Property for which a building permit has been issued, or the quotient computed pursuant to paragraph 2(b) for Assessor's Parcels of Undeveloped Property for which a building permit has not been issued, Taxable Property Owner Association Property, Taxable Public Property, or Taxable Religious Property, by the expected balance in the capitalized interest fund after such first interest and/or principal payment (the "Capitalized Interest Credit"). 15. The Special Tax for Facilities prepayment is equal to the sum of the amounts computed pursuant to paragraphs 3, 4, 6, 11 and 12, less the amounts computed pursuant to paragraphs 13 and 14 (the "Prepayment Amount"). 16. From the Prepayment Amount, the amounts computed pursuant to paragraphs 3, 4, 11, 13 and 14 shall be deposited into the appropriate fund as established under the Indenture and be used to retire Outstanding Bonds or make debt service payments. The amount computed pursuant to paragraph 6 shall be deposited into the Construction Fund. The amount computed pursuant to paragraph 12 shall be retained by CFD No. 2016-1. The Prepayment Amount may be sufficient to redeem other than a $5,000 increment of Bonds. In such cases, the increment above $5,000 or integral multiple thereof will be retained in the appropriate fund established under the Indenture to be used with the next prepayment of Bonds or to make debt service payments. As a result of the payment of the current Fiscal Year's Special Tax for Facilities levy as determined under paragraph 9 (above), the CFD Administrator shall remove the current Fiscal Year's Special Tax for Facilities levy for such Assessor's Parcel from the County tax rolls. With respect to any Assessor's Parcel for which the Special Tax for Facilities is prepaid, the City shall cause a suitable notice to be recorded in compliance with the Act, to indicate the prepayment of Special Tax for Facilities and the release of the Special Tax for Facilities lien on such Assessor's Parcel, and the obligation to pay the Special Tax for Facilities for such Assessor's Parcel shall cease. Notwithstanding the foregoing, no prepayment will be allowed unless (i) the amount of Maximum Special Tax for Facilities that may be levied on Taxable Property (based on expected development at build out), after the proposed prepayment, less expected Administrative Expenses, shall be at least 1.1 times the regularly scheduled annual interest and principal payments on all Outstanding Bonds (excluding Bonds to be redeemed by such prepayment and all prior prepayments) in each future Fiscal Year and (ii) the amount of City of Santa Clarita CFD No. 2016-1 (Vista Canyon) February 4, 2016 Rate and Method of Apportionment Page 14 Packet Pg. 160 8.g Maximum Special Tax for Facilities that may be levied on non -delinquent Taxable Property (based on expected development at build out) after the proposed prepayment, less expected Administrative Expenses, shall be at least equal to the regularly scheduled annual interest and principal payments on all Outstanding Bonds (excluding Bonds to be redeemed by such prepayment and all prior prepayments) in each future Fiscal Year. 2. Prepayment in Part The Special Tax for Facilities for 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 = [(PE -AE) x F] + AE These terms have the following meaning: AE = the Administrative Fees and Expenses PP = the partial prepayment amount PE = the Prepayment Amount calculated according to Section G.1 F = the percentage by which the owner of the Assessor's Parcel is partially prepaying the Special Tax for Facilities. The owner of any Assessor's Parcel who desires such prepayment shall notify the CFD Administrator of such owner's intent to partially prepay the Special Tax for Facilities and the percentage by which the Special Tax for Facilities shall be prepaid. The CFD Administrator shall provide the owner with a statement of the amount required for the partial prepayment of the Special Tax for Facilities for an Assessor's Parcel within thirty (30) days of the request and may charge a reasonable fee for providing this service. With respect to any Assessor's Parcel for which the Special Tax for Facilities is partially prepaid, CFD No. 2016-1 shall (i) distribute the funds remitted to it according to Section G.1, and (ii) indicate in the records of CFD No. 2016-1 that there has been a partial prepayment of the Special Tax for Facilities and that a portion of the Special Tax for Facilities with respect to such Assessor's Parcel, equal to the outstanding percentage (1.00 - F) of the Assigned Special Tax for Facilities, Backup Special Tax for Facilities and Maximum Special Tax for Facilities, shall continue to be levied on such Assessor's Parcel pursuant to Section D. Notwithstanding the foregoing, no partial prepayment will be allowed unless (i) the amount of Maximum Special Tax for Facilities that may be levied on Taxable Property (based on expected development at build out), after the proposed partial prepayment, less expected Administrative Expenses, shall be at least 1.1 times the regularly scheduled annual interest and principal payments on all Outstanding Bonds (excluding Bonds to be redeemed by such prepayment and all prior prepayments) in each future Fiscal Year and (ii) the amount of Maximum Special Tax for Facilities that may be levied on non -delinquent Taxable Property (based on expected development at build out) after the proposed partial prepayment, less expected Administrative Expenses, shall be at least equal to the regularly scheduled annual interest and principal payments on all Outstanding Bonds (excluding Bonds to be redeemed by such prepayment and all prior prepayments) in each future Fiscal Year. City of Santa Clarita CFD No. 2016-1(Vista Canyon) February 4, 2016 Rate and Method of Apportionment Page 15 Packet Pg. 161 8.g H. TERM OF SPECIAL TAX FOR FACILITIES The Special Tax for Facilities shall be levied until the final maturity of the last series of Bonds, provided that that the Special Tax for Facilities shall not be levied later than Fiscal Year 2060-61. I. SPECIAL TAX FOR SERVICES 1. Definitions The following definitions apply to this Section I: "Annual Escalation Factor" means the greater of (i) annual percent increase, as of December 2016 and each December thereafter, in the Bureau of Labor Statistics' Consumer Price Index for All Urban Consumers (CPI -U) for the Los Angeles -Riverside -Orange County area and (ii) 0%. "Maintenance Costs" means for each Fiscal Year, the estimated costs to maintain Parking Structure 1 and Parking Structure 2 which have been accepted and maintained by the City or are reasonably expected to be accepted and maintained by the City during the current Fiscal Year, "Maximum Special Tax for Services" means for each Fiscal Year and for each Assessor's Parcel, the maximum Special Tax for Services that can be levied by CFD No. 2016-1 on such Assessor's Parcel. "Operating Fund" means a fund that shall be maintained for CFD No. 2016-1 for any Fiscal Year to pay for the actual costs of maintenance related to the Service Area, and the applicable Administrative Expenses. "Operating Fund Balance" means the amount of funds in the Operating Fund at the end of the preceding Fiscal Year. "Parking Structure 1" means the parking structure known as the Cooper Street Parking Garage. "Parking Structure 2" means the parking structure known as the Vista Canyon Boulevard Parking Garage. "Service Area" means parking structure maintenance within the boundary of CFD No. 2016- 1, which may include, but is not limited to: automated gate maintenance, parking space restriping, concrete repair and elevator maintenance. "Special Tax for Services" means any of the special taxes authorized to be levied within CFD No. 2016-1 pursuant to the Act to fund the Special Tax Requirement for Services. "Special Tax Requirement for Services" means for each Fiscal Year, the amount determined for CFD No. 2016-1 equal to (i) the Maintenance Costs, (ii) Administrative Expenses related to the Special Tax for Services and (iii) anticipated delinquent Special Taxes for Services City of Santa Clarita CFD No. 2016-1(Vista Canyon) February 4, 2016 Rate and Method of Apportionment Page 16 Packet Pg. 162 8.g based on the delinquency rate in CFD No. 2016-1 for the previous Fiscal Year, less (iv) the Operating Fund Balance, as determined by the CFD Administrator. 2. Maximum Special Tax for Services Developed Property Land Use Classes, as identified in Section B, shall be used in assigning the Maximum Special Tax for Services amount for each Assessor's Parcel of Developed Property within CFD No. 2016-1 as shown in Table 2 below. TABLE 2 Zone 1 and Zone 2 For Fiscal Year 2016-17 Maximum Special Tax for Services for Developed Property Land Maximum Special Tax for Use Description Services Class $120.50 1 Apartment Property per Apartment Unit $0.21 per square foot 2 Office Property of Floor Area $0.54 per square foot 3 Retail Property of Floor Area $0.21 per square foot 4 Non -Residential Property of Floor Area $54.18 per 5 Hotel Property Hotel Room 6 Condominium Conversion Property $120.50 per Unit On each July 1, commencing on July 1, 2017, the Maximum Special Tax for Services shall be increased by an amount equal to the Annual Escalation Factor multiplied by the Maximum Special Tax for Services in effect for the previous Fiscal Year. 3. Method of Apportionment of the Special Tax for Services Commencing the Fiscal Year following the determination that a property owner association is not maintaining Parking Structure 1 or Parking Structure 2 in accordance with a maintenance agreement with the City and for each subsequent Fiscal Year for which a property owner association is not maintaining Parking Structure 1 or Parking Structure 2, the City shall levy Special Taxes for Services Proportionately on all Developed Property City of Santa Clarita CFD No. 2016-1 (Vista Canyon) February 4, 2016 Rate and Method of Apportionment Page 17 Packet Pg. 163 8.g within CFD No. 2016-1, up to the applicable Maximum Special Tax for Services to fund the Special Tax Requirement for Services. 4. Duration of the Special Tax for Services The Special Tax for Services shall be levied in perpetuity to fund the Special Tax Requirement for Services, unless no longer required as determined at the sole discretion of the Council. 5. Exemptions from the Special Tax for Services No Special Tax for Services shall be levied on Residential Property, Undeveloped Property, Property Owner Association Property, Public Property and Religious Property. 6. Manner of Collection of the Special Tax for Services The Special Tax for Services shall be collected in the same manner and at the same time as ordinary ad valorem property taxes, provided, however, that CFD No. 2016-1 may collect the Special Tax for Services at a different time or in a different manner, including direct billing, if necessary to meet its funding requirements. 7. Prepayment of the Special Tax for Services The Special Tax for Services may not be prepaid. J. APPEALS AND INTERPRETATIONS Any landowner who feels that the amount of the Special Taxes levied on their Assessor's Parcel is in error may submit a written appeal to the CFD Administrator. The CFD Administrator shall review the appeal. If the City concurs, no refund shall be given; however, the amount of the Special Taxes levied shall be appropriately reduced in the following Fiscal Year(s). The CFD Administrator may interpret this Rate and Method of Apportionment for purposes of clarifying any ambiguities and make determinations relative to the annual administration of the Special Taxes and any landowner appeals. City of Santa Clarita CFD No. 2016-1 (Vista Canyon) Rate and Method of Apportionment February 4, 2016 Page 18 Packet Pg. 164 EXHIBIT A CITY OF SANTA CLARITA COMMUNITY FACILITY DISTRICT NO. 20164 (VISTA CANYON) TAX ZONE DESIGNATION � m . Legend C3 CFD Boundary OTax Zone Boundary TTM 69164 (4/26/11) City of Santa Clarita CFD No. 2016-1 (Vista Canyon) Rate and Method of Apportionment 8.9 February 4, 2016 Page 19 Packet Pg. 165