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Home My WebLink About04-02-2019 Item 13 - Establishment of San Luis Ranch Community Facilities District No. 2019-1 Department Name: Community Development Cost Center: 2003 For Agenda of: April 2, 2019 Placement: Public Hearing Estimated Time: 30 Minutes FROM: Brigitte Elke, Finance Director Michael Codron, Community Development Director Prepared By: John Rickenbach, Contract Planner SUBJECT: ADOPTION OF A RESOLUTION OF FORMATION AND APPROVAL OF AN ORDINANCE ESTABLISHING A SPECIAL TAX TO FUND INFRASTRUCTURE; AND OTHER ACTIONS, INCLUDING HOLDING A PUBLIC HEARING AND CONDUCTING A SPECIAL ELECTION, NECESSARY FOR THE ESTABLISHMENT OF THE SAN LUIS RANCH COMMUNITY FACILITIES DISTRICT NO. 2019-1 RECOMMENDATION Advance the formation of the San Luis Ranch Community Facilities District (CFD) by taking the following actions: 1. Adopt a Resolution Modifying the Resolution of Intention and (Attachment A) Approving an Amended and Restated Rate and Method of Apportionment (Attachment J); and 2. Adopt a Resolution of Formation of the City of San Luis Obispo Community Facilities District (CFD) No. 2019-1 (San Luis Ranch), Authorizing the Levy of a Special Tax within the Community Facilities District and Establishing an Appropriations Limit for the Community Facilities District (Attachment B); and 3. Adopt a resolution deeming it necessary to incur bonded indebtedness within the City of San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch) (Attachment C); and 4. Adopt a Resolution calling for a Special Election (landowner approval) for City of San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch) (Attachment D); 5. Adopt a Resolution Declaring Results of Special Election and Directing Recording of Notice of Special Tax Lien (Attachment F); and 6. Introduce an Ordinance establishing the San Luis Ranch CFD Special Tax (Attachment H). REPORT-IN-BRIEF The holding of a public hearing and the adoption of the Resolution of Formation for the San Luis Ranch CFD furthers the CFD formation process that began on February 19, 2019 with the adoption of the Resolution of Intention. The Resolution of Formation is the next step in the Packet Pg. 201 Item 13 process and leads to an election required by statute. In this instance, the approval of the CFD formation relates to a single landowner within the proposed CFD, which follows the boundaries of the San Luis Ranch Specific Plan area. Because there is only one landowner within that area, the election requirement is satisfied through property owner approval to form a CFD. This action can occur after the public hearing is closed. Following this action, the City Council will introduce a Special Tax Ordinance as is specified in the San Luis Ranch Amended and Restated Rate and Method of Apportionment, which is included in the Final Hearing Report that describes the details of the CFD (Attachment I). DISCUSSION Background The approved San Luis Ranch Specific Plan allows for a variety of residential and non- residential development on 131 acres located in previously unincorporated San Luis Obispo County, generally between Madonna Road and U.S. Highway 101, south of Dalidio Drive, and is identified by assessor’s parcel number (APN) 067-121-022. The Specific Plan was approved on July 18, 2017. The Development Agreement and an amended Specific Plan that allowed for different project phasing provides the basis for the formation of the CFD, was approved by the City Council on July 17, 2018. On October 18, 2018 the San Luis Obispo Local Agency Formation Commission approved the City’s application to annex the San Luis Ranch site to the City of San Luis Obispo. A Final Tract Map for the first phase of the project was approved by the City Council on November 27, 2018. These actions were necessary to allow for future development to occur on the site, which will be facilitated to a large extent by the formation of the CFD. On February 19, 2019, the City Council held a public hearing regarding the potential formation of a CFD, after which it adopted a Resolution of Intention to form a CFD. The recommendation before the City Council includes approving a Resolution Modifying the Resolution of Intention and approving an Amended and Restated Rate and Method of Apportionment (RMA). The updated document includes minor clarifications that do not increase the maximum special tax or add territory to the District. The RMA serves as an exhibit to a number of attachments and for clarity is attached separately as Attachment J. The list of proposed changes to the RMA follows. Page A-1 Add “Amended” to the title Page A-6 In the definition of “Tax Escalation Factor”, second line, changed the word “Maximum” to “Minimum”. Page A-8 On the seventh line, corrected the spelling of “Minimum”. Page A-9 Under section e., added the words “the sum of” before the word “Maximum” in the term Maximum Annual Special Tax. Page A-10 First line in Section 6.a, changed the word “Maximum” to “Minimum”. Page A-11 In the first line, replaced the word “Sum” with “Calculate” and removed an extra space between “Tax and”. Page A-11 Under section 5., changed the word “sum” with “calculate”. Page A-11 Under sections 6. And 7., first line, changed the word “sum” to “amount”. Packet Pg. 202 Item 13 Community Facilities District 1. Basis for CFD Formation A CFD, as enabled by the Community Facilities District Act of 1982, allows a local jurisdiction to levy a special tax within a specified area to pay for public services and/or infrastructure needed within the area. Over the past three decades, CFDs have become a common mechanism for cities to fund services and finance development-related infrastructure. The levy of any special tax and any related bond issuance is subject to voter approval, if the area is inhabited approval by two-thirds of the voters in the area is required. If fewer than 12 voters are located in the area, approval by the landowners is required. At this time, there are no residents living within the proposed CFD area, which is owned by a single property owner, represented by a development team. The owners and developers of the San Luis Ranch property have requested, and the City has agreed, to consider formation of a CFD, as reflected in the San Luis Ranch entitlement documents. On February 19, 2019, the City Council adopted a Resolution of Intention, which is the first step in the process to form a CFD. The CFD will authorize the levy of a special tax on real property located within the designated boundary of the CFD for a range of purposes including funding reimbursement of investments made by the developer for regional transportation infrastructure and utility improvements. It is common for the special taxes to be used to service municipal bonds issued to fund new development-related infrastructure. 2. Analysis and Recommendations from Draft Hearing Report The following analysis and recommendations are presented reflecting extensive discussions with the developers and their consultants, City staff and their advisors, including special tax counsel, financial advisors, and underwriters. This information is presented to gain concurrence on those items that will enable the final structuring of the CFD. The information included in this section is summarized from the March 2019 Final Hearing Report prepared by EPS, which is included as Attachment I to this Agenda Report. Funding Capacity. The funding capacity of a CFD is based upon the type and amount of development in the boundary of the CFD upon which the special tax is levied and the amount of the tax per parcel. Special taxes levied as part of a CFD must be clearly specified by a Rate and Method of Apportionment (RMA, Attachment J) which defines the amount of the tax levied on each parcel and how the amount may be increased (indexed) over time to account for any inflationary cost increases. Generally, and as reflected in the City’s adopted policy, CFD special taxes are limited to a fraction of the one percent property tax allowed under Article 13 A of the State Constitution. The funding capacity of the San Luis Ranch Project, taking account of the type, amount, and market value of the proposed development, the existing general and special taxes, and the City’s established special tax “cap” of 1.8 percent, is estimated at approximately $2 million annually.1 Given economic cycle and market consideration, the local market being untested in terms of bond underwriting, and the 1 Annual revenues of approximately $2 million include value associated with commercial uses. Packet Pg. 203 Item 13 significant number of smaller and multifamily units and price-sensitive commercial lands, the tax revenue potential is likely to be below this maximum, resulting in total revenue in the range of $950,000. Based on industry standard assumptions (approximately 1.4%), it is estimated that this annual revenue can yield “net bond proceeds” of $14 million, the funding target set in the Financing Plan and Development Agreement. Purpose of the Special Tax. The RMA specifies the special tax to be levied as part of the San Luis Ranch CFD. In this case, the special tax will support the issuance of one or more bonds, the proceeds of which will be used primarily to reimburse the developer for costs related to transportation and utility infrastructure improvements. Administrative costs are also included. Detailed analysis of the required transportation and utility improvements, including costs and fair share allocations, has been conducted as part of ongoing staff work and negotiations with the San Luis Ranch Developer. Special Tax Rate Structure. Special property taxes are “parcel” taxes (a given rate per parcel). Varying taxes by use or intensity require a logical structure, often linked to service demand (may not be ad valorem). There are three residential product types in the San Luis Ranch: Low Density, Medium Density, and High Density. Within each of these categories, there are Workforce and Affordable Units included. A “flat tax” rate could be set for all residential uses based on the special tax revenue calculations; alternatively, a rate sensitive to unit characteristics (e.g., single family/multifamily and/or unit size) can be established. Complexities in the rate structure can be challenging from an administration perspective; however, in this case, it is recommended that the tax rate should vary based on unit size within each residential product type, with two-unit size categories with each product type. Exemption for Commercial Uses. Special taxes can be charged on commercial uses, and there is a substantial commercial component in the Project including 150,000 square feet of retail/service uses, 100,000 square feet of office uses, and a 200-room hotel. Given the economic sensitivity of commercial uses to special taxes, it is recommended that such uses be exempted from the special tax unless a change of use is subsequently approved. Nonresidential land uses tend to absorb more slowly than the single-family residential portions of a project even if there is no special tax burden, and the inclusion of the special tax on these uses will likely further slow absorption. As such, a special tax on nonresidential uses is a less secure funding source for the CFD bonds, and in this case, it is recommended that commercial uses not be taxed. Exemption for Workforce and Affordable Housing Units. Property owned by non-profit entities or with price restrictions in the deed are not categorically exempted from special taxes. There are 14 workforce units and 34 affordable units proposed. Taxing affordable housing units owned by non-profit entities will increase operating costs and thus may decrease feasibility for the non-profit entities or the subsidies that they can offer lower income households. Taxing deed restricted units at rates affordable to the market rate homeowners may not be feasible for income restricted households. Options include: 1) an exemption for the non-profit owned or deed restricted units; or 2) establishing a discounted special tax reflecting benefits to the City of providing workforce and affordable housing units. It is recommended that the workforce affordable units should not be taxed. Packet Pg. 204 Item 13 Other Exemptions. Certain types of property ownership are categorically exempt from special taxes, while others may be exempted by the RMA policy. Exemptions include government owned property; property-owners’ association property (common areas); assessor’s parcels consisting of public or utility easements; and property having conservation-oriented deed restrictions. It is recommended that these non-developed parcels be exempted from the special tax. Special Tax on Vacant Land. Special taxes can be levied on land that is designated for development but not yet developed. Such taxes are charged to generate cash flow to cover debt service or other bona fide CFD cost before the developing area subject to the special tax is fully developed. It is recommended that a vacant land tax be allowed at the time the Final Subdivision Map is approved and respective subdivision parcels are recorded. Any bonded indebtedness related to such vacant land taxes is limited by statute to a 3:1 value to lien ratio. Special Tax Rate Structure, Prioritization. The RMA will need to specify funding priorities for special tax revenue. Currently identified priorities: 1) CFD administrative expenses; 2) debt service on bonds issued for reimbursement of developer-advanced funding of their “fair share” allocation of regional transportation improvements; 3) replenishment of the bond reserve fund in the event of a draw upon reserves as a result of special tax collection delinquencies; 4) special tax levy contingencies for anticipated delinquent payment of the special taxes; and 5) for any funds not needed for the above, pay-as-you go reimbursement for bona fide developer costs pursuant to the Acquisition Agreement. Indexing for Cost Increases Over Time. Special taxes may be “indexed,” or increased, over time to protect the bonding capacity of the CFD. For CFDs used to support debt service, the index is limited by statute to 2 percent. It is recommended that the 2 percent index be applied to the special taxes. Duration of the Special Tax. The Rate and Method must specify the duration of the special tax. Special taxes that provide a source of debt service on CFD municipal bonds (or other capital expenditure) sunset when the bond debt is retired, typically a term of 30 years for each bond issue. If multiple issues are contemplated (i.e., likely issued over time under different tranches), such as with the San Luis Ranch project, the term of the CFD will need to extend for 30 years, following the second bond issue. 3. Voter/Landowner Approval to form a CFD Pursuant to Section 53326(a) of the Mello-Roos Community Facilities Act of 1982, the levy of any special tax and any related bond issuance is subject to voter approval; if the area is inhabited approval by two-thirds of the voters in the area is required. If fewer than 12 voters are located in the area, approval by the landowners is required. At this time, there are no residents living within the proposed CFD area, which is owned by a single property owner, and represented by a development team. The owners and developers of the San Luis Ranch property have requested, and the City has agreed, to consider formation of a CFD, as reflected in the San Luis Ranch entitlement documents. Packet Pg. 205 Item 13 During the meeting on April 2, 2019, the Mayor will conduct the process based on a script to be provided to ensure that the proper order of procedures is followed. First, the Council will consider a Resolution Modifying the Resolution of Intention (Attachment A) and Approving the Amended and Restated RMA (Attachment J). Next, the City Council is asked to formally hold a public hearing to inquire into the formation of the CFD, the levy of special taxes in the CFD, and the need to incur bonded indebtedness in the CFD. Next, the City Council is asked to formally seek approval of the property owner, as represented by the development team. With the formal consent of the property owner, the City Council may then introduce an Ordinance to levy a special tax within the defined CFD. To facilitate this process, the City Council must adopt a Resolution Calling for a Special Election for City of San Luis Obispo Community Facilities District No. 2019-1 (Attachment D). As the only voter in the CFD, the landowner must complete a Ballot in the affirmative in order to provide consent. After certifying the vote, the City Clerk then must complete one copy of the Canvass and Statement of Results of Election (Attachment F). Following the reporting out of the results of the election by the City Clerk , the City Council may proceed with adopting the resolutions detailing the election results and directing the recording of a notice of special tax lien, introduce the Ordinance to levy a special tax within the CFD, and conduct a First Reading of that Ordinance (Attachment H). 4. Resolution of Formation, Declaring Election Results and Ordinance to Levy a Special Tax With landowner approval, the City Council may proceed with adopting the following resolutions and introduce the Ordinance to levy a special tax within the CFD and conduct a First Reading of that Ordinance. The City Council is asked to take the following actions to form the CFD: 1. Adopt a Resolution Declaring Results of Special Election and Directing Recording of Notice of Special Tax Lien (Attachment F); and 2. First reading of an Ordinance of the City of San Luis Obispo, California Levying Special Taxes within City of San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch) (Attachment H) Previous Council or Advisory Body Action The Planning Commission considered and provided input on the originally-approved San Luis Ranch project on nine occasions from 2014 through 2017, before finally recommending approval in June 2017. The City Council approved the project on July 18, 2017. Prior to its July 2017 approval, the project was also considered before various City advisory bodies to consider specific aspects of the proposed project that relate to their purview. These advisory bodies included the Bicycle Advisory Committee (BAC), Parks and Recreation Commission (PRC), Architectural Review Commission (ARC), and Cultural Heritage Committee (CHC). These reviews helped inform the Planning Commission’s recommendation to the City Council, ultimately leading to project approval. Packet Pg. 206 Item 13 Policy Context The approved San Luis Ranch Specific Plan and related entitlements are consistent with the City’s adopted General Plan, and findings to that effect were made in both the original project approved in July 2017 as well as the amended project approval in August 2018. An evaluation of the project’s consistency with General Plan policies is discussed at length in Section 4.9 of the certified Final EIR. The Specific Plan requires that funding mechanisms be included to ensure that public infrastructure is coordinated with future development under the plan. The formation of a CFD is consistent with this requirement. A CFD, as enabled by the Community Facilities District Act of 1982, allows a local jurisdiction to levy a special tax within a specified area to pay for public services and/or infrastructure needed within the area. Over the past three decades, CFDs have become a common mechanism for cities to fund services and finance development-related infrastructure, and the use of a CFD in this case is consistent with the City’s Economic Development Strategic Plan and the General Plan. The General Plan provides specific policies related to the funding of infrastructure noted below: 1.13.6. Required Plans: The City shall not allow development of any newly annexed private land until the City has adopted a specific or development plan for land uses, open space protection, roads, utilities, the overall pattern of subdivision, and financing of public facilities for the area. 1.13.9. Costs of Growth: The City shall require the costs of public facilities and services needed for new development be borne by the new development, unless the community chooses to help pay the costs for a certain development to obtain community-wide benefits. The City shall consider a range of options for financing measures so that ne w development pays its fair share of costs of new services and facilities which are required to serve the project and which are reasonably related to the new growth attributable to the development. Public Engagement The Planning Commission considered and provided input on the originally-approved San Luis Ranch project on nine occasions from 2014 through 2017, before finally recommending approval in June 2017. As noted under “Previous Council or Advisory Body Action,” the approved project was considered in a variety of public workshops and hearings before many of the City’s advisory bodies from 2014 through project approval as amended in 2018. On February 19, 2019, the City Council held a public hearing regarding the potential formation of a CFD, after which it adopted a Resolution of Intention to form a CFD. Packet Pg. 207 Item 13 Next Steps in the CFD Formation Process The Resolution of Intention adopted by the City Council on February 19, 2019, established a statutory formation process that included the following steps: 1. Adopt Resolution of Intention 2. Record legal map of CFD boundary and conduct voter determination 3. Finalize Rate and Method of Apportionment 4. Adopt Resolution of Formation (ROF) 5. Conduct election (obtain landowner approval) 6. Adopt Ordinance to Levy Special Tax If the City Council follows the recommendation of this Agenda Report, all steps in the formation of the CFD (outlined above) will be completed, with the exception of Item 6 above. A second reading of the Ordinance to Levy a Special Tax will need to occur at a subsequent City Council meeting, and in anticipation of Council’s approvals it is currently scheduled to be considered on April 16, 2019, at which point all steps in the formation of the CFD will be completed. Within 15 days of adoption of the Special Tax Ordinance the City Clerk is obligated by the Statute to post the Ordinance with the names of Council members voting for and against the Ordinance, and within 15 days of the special election, prepare and record a Notice of Special Tax Lien with the County Recorder. The formation of both the Avila and San Luis Ranch CFDs work in coordination with the approved entitlements, reimbursement agreements, current AB 1600 fee program and planned CIP projects to facilitate both projects that will require significant ongoing and specialized financing expertise will be needed to align and support the ongoing administration of, and legal compliance, of these financing programs. Staff intends to recommend adding a position, primarily supported through fees associated with these financing programs, to support this staffing need as well as the Major City Goals to produce housing and be fiscally sustainable as part of the 2019-2021 Financial Plan. CONCURRENCES The City’s review of the CFD formation process has involved all City departments in the development review process. No additional conditions of approval or mitigation measures will be applied to the CFD formation process, but the CFD will facilitate the project’s implementation, which is subject to the conditions of approval and mitigation measures previously associated with the approved project, as most recently revised in July 2018. ENVIRONMENTAL REVIEW The City Council unanimously certified a Final Environmental Impact Report (FEIR) prepared pursuant to the California Environmental Quality Act (CEQA), and approved the project on July 18, 2017, as memorialized in City Council Resolution No. 10822 (2017 Series). A Notice of Determination (NOD) was prepared, and there were no legal challenges to the adequacy of the Final EIR during the 30-day statute of limitations associated with the NOD, pursuant to CEQA Packet Pg. 208 Item 13 (PRC Section 21167 and CEQA Guidelines Section 15094). A Supplement to the Final EIR (“Final Supplemental EIR” or “FSEIR”) was prepared to address the Specific Plan Amendment and certified in conjunction with the approval of that amendment on July 17, 2018. In addition, and Addendum to the Final EIR was prepared to address a minor modification to the Transportation Impact Study (TIS) that formed the basis for determining traffic-related impacts under CEQA. This Addendum was approved in July 2018 and is part of the CEQA record. Development and other related administrative actions related to project financing, including the Development Agreement and CFD, are collectively addressed in the Final EIR, Final Supplemental EIR and Addendum. The formation and implementation of the CFD itself may also be considered Categorically Exempt under CEQA, based on Section 15306 of the CEQA Guidelines. This provision of CEQA addresses actions such as “information gathering”, specifically as they relate to “basic data collection” or “research activities which do not result in a serious or major disturbance to an environmental resource. These may be strictly for information gathering purposes, or as part of a study leading to an action which a public agency has not yet approved, adopted, or funded.” In this case, the CFD represents a mechanism that implements research and data collected with respect to project financing and implements development that has already been evaluated under CEQA and previously approved. No further environmental impacts are anticipated as a result of the CFD. The CFD is also Statutorily Exempt from CEQA as part of “an ongoing project”, as defined in Section 15261 of the CEQA Guidelines. FISCAL IMPACT Budgeted: Yes Budget Year: 2019 Funding Identified: Yes Fiscal Analysis: Funding Sources Total Budget Available Current Funding Request Remaining Balance Annual Ongoing Cost General Fund State Federal Fees $60,690 $0 $0 Ongoing administrative costs funded through special tax proceeds. Other: Total: $60,690 $0 $0 $60,690 Packet Pg. 209 Item 13 There will be no net fiscal impact related to forming the CFD. While there will be City costs involved in establishing and administering the San Luis Ranch CFD, these costs can be funded by CFD special tax proceeds. All consultant costs associated with the formation of the CFD are paid for by the developer through reimbursement agreements. The City also charges a 30% fee on developer reimbursement agreements to cover the City’s administration costs. The financial analysis conducted for the formation process has considered and budgeted these costs. ALTERNATIVES 1. Do not adopt the Proposed Resolutions or Ordinance. The City Council could choose not to adopt the proposed resolutions and Special Tax Ordinance, in which case the CFD process is not completed. In this case, the project will not move forward without identifying and implementing an alternative financing mechanism to provide for needed public infrastructure that is a prerequisite for development under the approved Specific Plan. This action would also impair the ability to build the Prado Road Interchange in the near future, since that project depends in part on fees generated by the approved project. 2. Direct modifications and continue the Hearing to a Date Certain. The City Council may continue the hearing to a date certain if it feels additional technical information is needed to complete the CFD process. If additional information is needed, direction should be provided to staff so that it can be presented on that date. Attachments: a - Resolution modifying Resolution of Intention and approving Amended and Restated Rate and Method of Apportionment b - Resolution of Formation c - Resolution Deeming it Necessary to Incur Bonded Indebtedness d - Resolution Calling Election e - Concurrence of Election Official f - Resolution declaring results of special election (with election canvass) g - Notice of Special Tax Lien h - Ordinance Levying Special Tax i - Final Hearing Report j - Amended and Restated Rate and Method of Apportionment Packet Pg. 210 Item 13 RESOLUTION NO. _____ (2019 SERIES) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA, MODIFYING RESOLUTION OF INTENTION AND APPROVING AMENDED AND RESTATED RATE AND METHOD OF APPORTIONMENT WHEREAS, on February 19, 2019, the City Council (the “City Council”) of the City of San Luis Obispo (the “City”), pursuant to the Mello-Roos Community Facilities Act of 1982 (the “Act”), adopted a resolution entitled “A Resolution of the City Council of the City of San Luis Obispo, California of Intention to Establish a Community Facilities District and to Authorize the Levy of Special Taxes” (the “Resolution of Intention”), stating its intention to establish a community facilities district (the “Community Facilities District”) proposed to be named City of San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch), to authorize the levy of special taxes within the Community Facilities District to finance certain public facilities and setting April 2, 2019 as the date for a public hearing to be held on the establishment of the Community Facilities District; WHEREAS, pursuant to the Resolution of Intention, notice of said public hearing was published in the New Times on March 21, 2019, a newspaper of general circulation published in the area of the Community Facilities District, in accordance with the Act; WHEREAS, on this date, the City Council opened, conducted and closed said public hearing; WHEREAS, the rate and method of apportionment of the special tax (the “Original Rate and Method”) originally proposed to be levied within the Community Facilities District is described in Exhibit B to the Resolution of Intention; WHEREAS, it has been proposed that the Original Rate and Method be modified to make certain clarifications; WHEREAS, such modifications would not increase the maximum special tax or add territory to the Community Facilities District; WHEREAS, Section 53325 of the Act provides that the legislative body of a local agency may modify the resolution of intention by changing the rate or method of apportionment of the proposed special tax; and WHEREAS, the City Council desires to so modify the Original Rate and Method; NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of San Luis Obispo as follows: SECTION 1. The foregoing recitals are true and correct. Packet Pg. 211 Item 13 Resolution No. _____ (2019 Series) Page 2 R ______ SECTION 2. The Resolution of Intention is hereby modified so as to amend and restate the Original Rate and Method in its entirety, as reflected in the Amended and Restated Rate and Method of Apportionment for Special Tax attached hereto as Exhibit A, which is by this reference incorporated herein. SECTION 3. This Resolution shall take effect immediately upon its adoption. Upon motion of _______________________, seconded by _______________________, and on the following roll call vote: AYES: NOES: ABSENT: The foregoing resolution was adopted this _____ day of _____________________ 2019. ____________________________________ Mayor Heidi Harmon ATTEST: ____________________________________ Teresa Purrington City Clerk APPROVED AS TO FORM: _____________________________________ J. Christine Dietrick City Attorney IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of San Luis Obispo, California, this ______ day of ______________, _________. ____________________________________ Teresa Purrington City Clerk Packet Pg. 212 Item 13 Resolution No. _____ (2019 Series) Page 3 R ______ EXHIBIT A (ATTACHMENT J PROVIDED SEPARATELY AS AGENDA REPORT ATTACHMENT) PROPOSED AMENDED AND RESTATED RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX Packet Pg. 213 Item 13 RESOLUTION NO. _____ (2019 SERIES) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA, OF FORMATION OF THE CITY OF SAN LUIS OBISPO COMMUNITY FACILITIES DISTRICT NO. 2019-1 (SAN LUIS RANCH), AUTHORIZING THE LEVY OF A SPECIAL TAX WITHIN THE COMMUNITY FACILITIES DISTRICT AND ESTABLISHING AN APPROPRIATIONS LIMIT FOR THE COMMUNITY FACILITIES DISTRICT WHEREAS, on February 19, 2019, the City Council (the “City Council”) of the City of San Luis Obispo (the “City”), pursuant to the Mello-Roos Community Facilities Act of 1982 (the “Act”), adopted a resolution entitled “A Resolution of the City Council of the City of San Luis Obispo, California of Intention to Establish a Community Facilities District and to Authorize the Levy of Special Taxes” (the “Resolution of Intention”), stating its intention to establish a community facilities district (the “Community Facilities District”) proposed to be named City of San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch), to authorize the levy of special taxes within the Community Facilities District to finance certain public facilities and setting the date for a public hearing to be held on the establishment of the Community Facilities District; WHEREAS, pursuant to the Resolution of Intention, notice of said public hearing was published in the New Times, a newspaper of general circulation published in the area of the Community Facilities District, in accordance with the Act; WHEREAS, on this date, the City Council opened, conducted and closed said public hearing; WHEREAS, pursuant to the Resolution of Intention, each officer of the City who is or will be responsible for providing one or more of the proposed types of public facilities was directed to study, or cause to be studied, the proposed Community Facilities District and, at or before said public hearing, file a report with the City Council containing a brief description of the public facilities by type that will in his or her opinion be required to adequately meet the needs of the Community Facilities District, and his or her estimate of the cost of providing such public facilities; such officers were also directed to estimate the fair and reasonable cost of the public facilities proposed to be purchased as completed public facilities and of the incidental expenses proposed to be paid; WHEREAS, said report was so filed with the City Council and made a part of the record of said public hearing; WHEREAS, at the hearing, the City Council proposed to modify the Resolution of Intention so as to change the rate and method of apportionment of the special tax (the “Original Rate and Method”) originally proposed to be levied within the Community Facilities District to make certain clarifications; Packet Pg. 214 Item 13 Resolution No. _____ (2019 Series) Page 2 R ______ WHEREAS, at the hearing, the City Council adopted a resolution entitled “A Resolution of the City Council of the City of San Luis Obispo, California Modifying Resolution of Intention and Approving Amended and Restated Rate and Method of Apportionment” modifying the Resolution of Intention so as to amend and restate the Original Rate and Method in its entirety; WHEREAS, at the hearing, the testimony of all persons for or against the establishment of the Community Facilities District, the extent of the Community Facilities District and the furnishing of the specified types of public facilities was heard; WHEREAS, written protests against the establishment of the Community Facilities District, the furnishing of any specified type or types of facilities within the Community Facilities District or the levying of any specified special tax were not made or filed at or before said hearing by 50% or more of the registered voters, or six registered voters, whichever is more, residing within the territory proposed to be included in the Community Facilities District, or the owners of one- half or more of the area of land in the territory proposed to be included in the Community Facilities District and not exempt from the special tax; WHEREAS, there has been filed with the City Clerk of the City a letter from the Registrar of Voters of the County of San Luis Obispo indicating that no persons were registered to vote within the territory of the proposed Community Facilities District as of January 17, 2019, and, accordingly, that 12 or more persons have not been registered to vote within the territory of the proposed Community Facilities District for each of the 90 days preceding the close of said public hearing; WHEREAS, Section 53314.9 of the Act provides that, at any time either before or after the formation of a community facilities district, the legislative body may accept advances of funds from any source, including, but not limited to, private persons or private entities and may provide, by resolution, for the use of those funds for any authorized purpose, including, but not limited to, paying any cost incurred by the local agency in creating a community facilities district; WHEREAS, Section 53314.9 of the Act further provides that the legislative body may enter into an agreement, by resolution, with the person or entity advancing the funds, to repay all or a portion of the funds advanced, as determined by the legislative body, with or without interest, under all the following conditions: (a) the proposal to repay the funds is included in both the resolution of intention to establish a community facilities district adopted pursuant to Section 53521 of the Act and in the resolution of formation to establish a community facilities district pursuant to Section 53325.1 of the Act, (b) any proposed special tax is approved by the qualified electors of the community facilities district pursuant to the Act, and (c) any agreement shall specify that if the qualified electors of the community facilities district do not approve the proposed special tax, the local agency shall return any funds which have not been committed for any authorized purpose by the time of the election to the person or entity advancing the funds; WHEREAS, the City and MI San Luis Ranch, LLC (“MI San Luis Ranch”) entered into a Deposit and Reimbursement Agreement, dated as of February 1, 2019 (the “Deposit Agreement”), that provides for the advancement of funds by MI San Luis Ranch to be used to pay costs incurred in connection with the establishment of the Community Facilities District and the Packet Pg. 215 Item 13 Resolution No. _____ (2019 Series) Page 3 R ______ issuance of special tax bonds thereby, and provides for the reimbursement to MI San Luis Ranch of such funds advanced, without interest, from the proceeds of any such bonds issued by the Community Facilities District; and WHEREAS, in accordance with Section 53314.9 of the Act, the City desires to accept such advances and to reimburse MI San Luis Ranch pursuant to the Deposit Agreement, without interest, from the proceeds of special tax bonds issued by the Community Facilities District; WHEREAS, the City Council unanimously certified a Final Environmental Impact Report (FEIR) prepared pursuant to the California Environmental Quality Act (CEQA), and approved the project on July 18, 2017, as memorialized in City Council Resolution No. 10822 (2017 Series). A Notice of Determination (NOD) was prepared, and there were no legal challenges to the adequacy of the Final EIR during the 30-day statute of limitations associated with the NOD, pursuant to CEQA (PRC Section 21167 and CEQA Guidelines Section 15094). A Supplement to the Final EIR (“Final Supplemental EIR” or “FSEIR”) was prepared to address the Specific Plan Amendment and certified in conjunction with the approval of that amendment on July 17, 2018. In addition, and Addendum to the Final EIR was prepared to address a minor modification to the Transportation Impact Study (TIS) that formed the basis for determining traffic-related impacts under CEQA. This Addendum was approved in July 2018 and is part of the CEQA record. Development and other related administrative actions related to project financing, including the Development Agreement and CFD, are collectively addressed in the Final EIR, Final Supplemental EIR and Addendum. No further environmental impacts are anticipated as a result of the CFD. The CFD is also Statutorily Exempt from CEQA as part of “an ongoing project”, as defined in Section 15261 of the CEQA Guidelines. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of San Luis Obispo as follows: SECTION 1. The foregoing recitals are true and correct. SECTION 2. The Community Facilities District is hereby established pursuant to the Act. SECTION 3. The Community Facilities District is hereby named “City of San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch).” SECTION 4. The public facilities (the “Facilities”) proposed to be financed by the Community Facilities District pursuant to the Act are described under the caption “Facilities” on Exhibit A hereto, which is by this reference incorporated herein. All of the Facilities to be financed will have an estimated useful life of five years or longer. They are public improvements that the City or another governmental entity is authorized by law to construct, own or operate or to which they contribute revenue. The Facilities to be financed are necessary to meet increased demands placed upon the City as the result of the development planned to occur in the proposed Community Facilities District. The incidental expenses proposed to be incurred are identified under the caption “Formation, Administrative and Incidental Expenses” on Exhibit A hereto. All or any portion of the Facilities may be financed through a financing plan, including, but not limited to, a lease, lease- purchase or installment-purchase arrangement. To the extent the Facilities will not be constructed by the City, in the opinion of the City the public interest will not be served by allowing the property Packet Pg. 216 Item 13 Resolution No. _____ (2019 Series) Page 4 R ______ owners in the Community Facilities District to intervene in a public bidding process pursuant to Section 53329.5(a) of the Act. SECTION 5. The proposed special tax to be levied within the Community Facilities District has not been precluded by majority protest pursuant to Section 53324 of the Act. SECTION 6. Except where funds are otherwise available, a special tax sufficient to pay for all Facilities, secured by recordation of a continuing lien against all nonexempt real property in the Community Facilities District, will be annually levied within the Community Facilities District. The [amended and restated] rate and method of apportionment of the special tax (the “Rate and Method”), in sufficient detail to allow each landowner within the proposed Community Facilities District to estimate the maximum amount that he or she will have to pay, is described in Exhibit B attached hereto, which is by this reference incorporated herein. The conditions under which the obligation to pay the special tax to pay for Facilities may be prepaid and permanently satisfied are specified in the Rate and Method. The special tax will be collected in the same manner as ordinary ad valorem property taxes or in such other manner as the City Council shall determine, including direct billing of the affected property owners. SECTION 7. The tax year after which no further special tax to pay for Facilities will be levied against any parcel used for private residential purposes is specified in the Rate and Method. Under no circumstances shall the special tax to pay for Facilities 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 Community Facilities District by more than 10% above the amount that would have been levied in that fiscal year had there never been any such delinquencies or defaults. For purposes of this paragraph, a parcel shall be considered “used for private residential purposes” not later than the date on which an occupancy permit for private residential use is issued. SECTION 8. Pursuant to Section 53344.1 of the Act, the City Council hereby reserves to itself the right and authority to allow any interested owner of property within the Community Facilities District, subject to the provisions of said Section 53344.1 and to 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 Community Facilities District 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. SECTION 9. The name, address and telephone number of the office that will be responsible for preparing annually a current roll of special tax levy obligations by assessor’s parcel number and that will be responsible for estimating further special tax levies pursuant to Section 53340.2 of the Act are as follows: Community Development Director, City of San Luis Obispo, 990 Palm Street, San Luis Obispo, California 93401, (805) 781-7187. SECTION 10. Upon recordation of a notice of special tax lien pursuant to Section 3114.5 of the California Streets and Highways Code, a continuing lien to secure each levy of the special Packet Pg. 217 Item 13 Resolution No. _____ (2019 Series) Page 5 R ______ tax shall attach to all nonexempt real property in the Community Facilities District and this lien shall continue in force and effect until the special tax obligation is prepaid and permanently satisfied and the lien canceled in accordance with law or until collection of the tax by the City Council ceases. SECTION 11. The boundary map of the Community Facilities District has been recorded in San Luis Obispo County in Book [__] at Page [__] of Maps of Assessments and Community Facilities Districts in the San Luis Obispo County Recorder’s Office (Document No. [__________]). SECTION 12. The annual appropriations limit, as defined by subdivision (h) of Section 8 of Article XIII B of the California Constitution, of the Community Facilities District is hereby established at $2,500,000. SECTION 13. Pursuant to the provisions of the Act, the levy of the special tax and a proposition to establish the appropriations limit specified above shall be subject to the approval of the qualified electors of the Community Facilities District at a special election. The City Council hereby finds and determines that no persons were registered to vote within the territory of the proposed Community Facilities District as of January 17, 2019, and that 12 or more persons have not been registered to vote within the territory of the Community Facilities District for each of the 90 days preceding the close of the public hearing held by the City Council on the establishment of the Community Facilities District. Accordingly, pursuant to Section 53326 of the Act, the vote shall be by the landowners of the Community Facilities District and each person who is the owner of land as of the close of said public hearings, or the authorized representative thereof, shall have one vote for each acre or portion of an acre that he or she owns within the Community Facilities District not exempt from the special tax. The voting procedure shall be by mailed or hand-delivered ballot. SECTION 14. MI San Luis Ranch has heretofore advanced certain funds, and may advance additional funds, which have been or may be used to pay costs incurred in connection with the establishment of the Community Facilities District and the issuance of special tax bonds thereby. The City Council has previously approved the acceptance of such funds for the purpose of paying costs incurred in connection with the establishment of the Community Facilities District and the issuance of special tax bonds thereby. The City Council proposes to repay all or a portion of such funds expended for such purpose, solely from the proceeds of such bonds, pursuant to the Deposit Agreement. The Deposit Agreement is hereby incorporated herein as though set forth in full herein. SECTION 15. The City Council hereby finds and determines that all proceedings up to and including the adoption of this Resolution were valid and in conformity with the requirements of the Act. In accordance with Section 53325.1 of the Act, such finding shall be final and conclusive. SECTION 16. The officers, employees and agents of the City are hereby authorized and directed to take all actions and do all things which they, or any of them, may deem necessary or Packet Pg. 218 Item 13 Resolution No. _____ (2019 Series) Page 6 R ______ desirable to accomplish the purposes of this Resolution and not inconsistent with the provisions hereof. SECTION 17. This Resolution shall take effect immediately upon its adoption. Upon motion of _______________________, seconded by _______________________, and on the following roll call vote: AYES: NOES: ABSENT: The foregoing resolution was adopted this _____ day of _____________________ 2019. ____________________________________ Mayor Heidi Harmon ATTEST: ____________________________________ Teresa Purrington City Clerk APPROVED AS TO FORM: _____________________________________ J. Christine Dietrick City Attorney IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of San Luis Obispo, California, this ______ day of ______________, _________. ____________________________________ Teresa Purrington City Clerk Packet Pg. 219 Item 13 Resolution No. _____ (2019 Series) Page 7 R ______ EXHIBIT A FACILITIES In addition to the facilities described below, other expenses incidental to the below and authorized by the Act, including but not limited to: the cost of planning, permitting, and designing the facilities (including the cost of environmental evaluation, orthophotography, environmental remediation/mitigation); land acquisition and easement payments for the facilities; project management; construction staking; engineering studies and reports; utility relocation and demolition costs incidental to construction of the facilities, wetland/species mitigation purchase; reimbursements to other areas for infrastructure facilities or planning serving development in the Community Facilities District; legal, engineering, technical studies costs related to the facilities and any other expenses incidental to the construction, completion, and inspection of the facilities. Transportation Improvements Public roadway and bikeway improvements designed to meet the needs of the project, including those improvements identified in the San Luis Ranch Financing Plan, including but not limited to: Item # Item ROADWAYS 1 Froom Ranch Way (Prado to Oceanaire) Including Bridge 2 Froom Ranch Way (Oceanaire to Target Driveway) 3 Froom Ranch Way & LOVR Intersection Widening 4 Prado Road/US 101 Overpass and North Bound Lanes 5 Prado Road Southbound Ramps 6 Madonna & Dalidio/Prado Intersection Widening OTHER AREA ROADWAYS (MITIGATIONS) 7 Madonna & SB 101 Off Ramp - Lengthen EB Left Turn Pocket 8 Madonna & Oceanaire Pedestrian X-ing Enhancements 9 Madonna & San Luis Ranch Way Pedestrian X-ing Enhancement 10 LOVR & SB 101 Off Ramp - Lengthen Left Turn Pocket 11 LOVR & Higuera - Lengthen EB Right Turn Pocket 12 Higuera & South - Lengthen NB Right Turn Pocket OTHER AREA ROADWAY MITIGATIONS - FEE ONLY PROJECTS 13 Prado & Higuera Widening 14 Madonna Rd @ LOVR - Signal Timing Optimization 15 Madonna & Oceanaire Turn Lane Extensions 16 Madonna & LOVR - Turn Lane Extensions 17 LOVR & Auto Park Way Signalization 18 Higuera & Tank Farm - Lengthen NB Right Turn Pocket SLR BIKEWAYS 19 Prado Road Class I Path (Madonna to Froom) 20 Madonna Road Class I Path / Protected bikeway (Hwy 101 to Oceanaire) 21 Bob Jones Trail (Calle Joaquin to Froom Ranch Road) SLR BIKEWAYS - FEE ONLY PROJECTS 22 Prado Road Class I Path (NB Ramps to Higuera) 23 Bob Jones Trail (Madonna to Prado) Packet Pg. 220 Item 13 Resolution No. _____ (2019 Series) Page 8 R ______ Eligible roadway improvements include the following items: acquisition of land and easements; roadway design; project management; geotechnical engineering, testing and observations; bridge crossings and culverts; clearing, grubbing, and demolition; grading, soil import/export, paving (including slurry seal), and decorative/enhanced pavement concrete or pavers; power pole relocations; joint trenches, underground utilities, and undergrounding of existing utilities; dry utilities and appurtenances; curbs, gutters, sidewalks, bike trails (including on- and off-site), park and ride facilities, bus rapid transit improvements, including transfer stations and regional public transit improvements; retaining walls, sound walls, enhanced fencing, and access ramps; street lights, signalization, and traffic signal control systems; bus turnouts; signs and striping; erosion control; median and parkway landscaping and irrigation; entry monumentation; bus shelters; masonry walls; and other improvements related thereto. Eligible improvements for the roads listed above also include any and all necessary underground potable and non-potable water, sanitary sewer, and storm drainage system improvements. Potable and Non-Potable Water System Improvements Authorized facilities include any and all on- and off-site backbone water facilities designed to meet the needs of development of the project. These facilities include potable and non-potable mains, valves, services, and appurtenances; wells; and water treatment and storage facilities, and related improvements, including but not limited to: site clearing, grading, and paving; curbs and gutters; recycled water storage tanks, booster pump stations, and all appurtenances thereto; wells; water treatment; stand-by generator; site lighting, drainage, sanitary sewer, and water service; landscaping and irrigation; access gates and fencing; striping and signage; and the following: • Water lines in/associated with authorized facility roads. • Recycled water lines in/associated with authorized facility roads. Drainage System Improvements Authorized facilities include any and all on- and off-site backbone drainage and storm drainage improvements designed to meet the needs of development of the project. These facilities include mains, pipelines and appurtenances, outfalls and water quality measures, temporary drainage facilities, detention/retention basins, and drainage pretreatment facilities; drainage ways/channels, pump stations, landscaping, and irrigation; access roads, gates, and fencing; striping and signage; and the following: • All storm drain lines and facilities in/associated with authorized facility roadways. • Retention, detention, hydro-modification, and other drainage facilities. Wastewater System Improvements Authorized facilities include any and all on- and off-site backbone wastewater facilities designed to meet the needs of development of the project. These facilities include pipelines and all appurtenances thereto; manholes; tie-in to existing main line; force mains; lift stations; odor- control facilities; sewer treatment plant improvements and permitting related thereto; and related sewer system improvements, including but not limited to: • All wastewater facilities in/associated with authorized facility roadways. Solid Waste Improvements Packet Pg. 221 Item 13 Resolution No. _____ (2019 Series) Page 9 R ______ Authorized facilities include any and all backbone solid waste improvements designed to meet the needs of development of the project. Park and Landscape Corridor Improvements Authorized facilities include any and all improvements to parks and landscape corridors located in the project. Open Space Improvements Authorized facilities include any and all open space improvements designed to meet the needs of development of the project, including bike trails, bike/pedestrian bridges, storm drain crossings, storm drain detention/retention, wetland mitigation, tree mitigation, agricultural mitigation or wetland mitigation, property acquisition, endowment payments for open space management, landscaping and irrigation, access gates and fencing, and related open space improvements. Utilities Authorized facilities include any and all on- and off-site utility improvements designed to meet the needs of development of the project, including but not limited to: • New 24” HDPE Sewer Trunk Line. All utility improvements, easement payments, and land acquisition not located under or alongside transportation improvements are considered authorized facilities. Packet Pg. 222 Item 13 Resolution No. _____ (2019 Series) Page 10 R ______ FORMATION, ADMINISTRATIVE AND INCIDENTAL EXPENSES It is anticipated that the following incidental expenses may be incurred for the Community Facilities District: Engineering services Special tax consultant services City review and administration Bond counsel services Bond counsel expenses Disclosure counsel services Disclosure counsel expenses Independent municipal advisor services and expenses Appraiser services Market absorption study and real estate economist services Initial bond transfer agent, fiscal agent, registrar and paying agent fees Rebate calculation service set up charge Bond printing Offering memorandum printing and mailing costs Publishing, mailing and posting of notices Underwriter’s discount Bond reserve fund Capitalized interest Bond syndication costs Governmental notification and filing costs Credit enhancement costs Real estate acquisition costs Rating agency fees Charges and fees of City other than those waived Certain annual costs may be included in each annual special tax levy. These include: Annual bond transfer agent, fiscal agent, registrar and paying agent fees Annual rebate calculation costs Special tax consultant costs and administration expenses Other necessary consultant costs Costs of posting and collecting the special taxes Personnel and Administrative costs of the City Arbitrage rebate Continuing disclosure reporting and compliance Packet Pg. 223 Item 13 Resolution No. _____ (2019 Series) Page 1 R ______ EXHIBIT B (ATTACHMENT J PROVIDED SEPARATELY AS AGENDA REPORT ATTACHMENT) PROPOSED [AMENDED AND RESTATED] RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX Packet Pg. 224 Item 13 Resolution No. _____ (2019 Series) Page 2 R ______ CITY CLERK’S CERTIFICATE I, the undersigned, duly appointed and qualified City Clerk of the City of San Luis Obispo (the “City”), certify that attached is a full, true and correct copy of Resolution No. _______, adopted April 2, 2019, during a meeting of the City Council of the City. Such meeting was duly and legally held at the regular meeting place of the City Council. All of the members of said council had due notice of such meeting and a majority thereof was present at such meeting. I have carefully compared the same with the original minutes of said meeting on file and of record in my office, and the foregoing is a full, true and correct copy of such resolution adopted at said meeting and entered in said minutes. Said resolution has not been amended, modified or rescinded since the date of its adoption, and the same is now in full force and effect. Dated: By: City Clerk Packet Pg. 225 Item 13 R ______ RESOLUTION NO. _____ (2019 SERIES) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA, DEEMING IT NECESSARY TO INCUR BONDED INDEBTEDNESS WITHIN THE CITY OF SAN LUIS OBISPO COMMUNITY FACILITIES DISTRICT NO. 2019-1 (SAN LUIS RANCH) WHEREAS, on February 19, 2019, the City Council (the “City Council”) of the City of San Luis Obispo (the “City”), pursuant to the Mello-Roos Community Facilities Act of 1982 (the “Act”), adopted a resolution entitled “A Resolution of the City Council of the City of San Luis Obispo, California of Intention to Establish a Community Facilities District and to Authorize the Levy of Special Taxes” stating its intention to establish City of San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch) (the “Community Facilities District”) and to authorize the levy of special taxes within the Community Facilities District to finance certain public facilities; WHEREAS, on February 19, 2019, the City Council also adopted a resolution entitled “A Resolution of the City Council of the City of San Luis Obispo, California to Incur Bonded Indebtedness of the Proposed City of San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch)” (the “Resolution to Incur Bonded Indebtedness”) declaring the necessity for incurring bonded indebtedness and setting the date for a public hearing to be held on the proposed debt issue; WHEREAS, pursuant to the Resolution to Incur Bonded Indebtedness, notice of said public hearing was published in the New Times, a newspaper of general circulation published in the area of the Community Facilities District, in accordance with the Act; WHEREAS, on this date, the City Council opened, conducted and closed said public hearing; WHEREAS, at said public hearing, any person interested, including persons owning property within the area and desiring to appear and present any matters mater ial to the questions set forth in the Resolution to Incur Bonded Indebtedness appeared and presented such matters; WHEREAS, no oral or written protests against the proposed debt issue were made or filed at or before said public hearing by 50% or more of the registered voters, or six registered voters, whichever is more, residing within the territory proposed to be included in the Community Facilities District, or the owners of one-half or more of the area of land in the territory proposed to be included in the Community Facilities District and not exempt from the special tax; WHEREAS, on this date, the City Council adopted a resolution entitled “A Resolution of the City Council of the City of San Luis Obispo, California of Formation of the City of San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch), Authorizing the Levy of a Special Tax within the Community Facilities District and Establishing an Appropriations Limit for the Community Facilities District” (the “Resolution of Formation”); Packet Pg. 226 Item 13 Resolution No. _____ (2019 Series) Page 2 R ______ WHEREAS, the City Clerk of the City (the “City Clerk”) is the election official that will conduct the special election on the proposition to incur bonded indebtedness for the Community Facilities District; WHEREAS, there has been filed with the City Clerk a letter from the Registrar of Voters of the County of San Luis Obispo indicating that no persons were registered to vote within the territory of the proposed Community Facilities District as of [__________], 2019, and, accordingly, that 12 or more persons have not been registered to vote within the territory of the Community Facilities District for each of the 90 days preceding the close of said public hearing; WHEREAS, there has been filed with the City Clerk consents and waivers of all of the landowners of record in the Community Facilities District waiving any time limit specified by Section 53326 of the Act and any requirement pertaining to the conduct of said special election, including any time limit or requirement applicable to an election pursuant to Article 5 of the Act (commencing with Section 53345 of the Act), consenting to the holding of said special election on April 2, 2019, and waiving any impartial analysis, arguments or rebuttals, as set forth in Sections 53326 and 53327 of the Act; and WHEREAS, the City Clerk has concurred in said waivers and has concurred in holding said special election on April 2, 2019; NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of San Luis Obispo as follows: SECTION 1. The foregoing recitals are true and correct. SECTION 2. The City Council deems it necessary to incur the bonded indebtedness. SECTION 3. The bonded indebtedness will be incurred for the purpose of financing the costs of the Facilities (as defined in the Resolution of Formation), including all costs and estimated costs incidental to, or connected with, the accomplishment of such purpose. SECTION 4. In accordance with the previous determination of the City Council, the whole of the Community Facilities District will pay for the bonded indebtedness. SECTION 5. The maximum amount of debt to be incurred is $25,000,000. SECTION 6. The maximum term the bonds to be issued shall run before maturity is 30 years. SECTION 7. The maximum annual rate of interest to be paid shall not exceed the maximum interest rate permitted by applicable law at the time of sale of the bonds, payable semiannually or at such times as the City Council or its designee shall determine, the actual rate or rates and times of payment of such interest to be determined by the City Council or its designee at the time or times of sale of the bonds. SECTION 8. The proposition to incur the bonded indebtedness shall be submitted to the voters. Packet Pg. 227 Item 13 Resolution No. _____ (2019 Series) Page 3 R ______ SECTION 9. The City Council hereby finds and determines that no persons were registered to vote within the territory of the proposed Community Facilities District as of January 17, 2019, and that 12 or more persons have not been registered to vote within the territory of the Community Facilities District for each of the 90 days preceding the close of the public hearings held by the City Council on the proposed debt issue for the Community Facilities District. Accordingly, pursuant to Section 53326 of the Act, the vote shall be by the landowners of the Community Facilities District and each person who is the owner of land as of the close of said public hearings, or the authorized representative thereof, shall have one vote for each acre or portion of an acre that he or she owns within the Community Facilities District not exempt from the special tax. SECTION 10. The City Council hereby finds and determines that the qualified electors of the Community Facilities District have unanimously consented (a) to the waiver of any time limit specified by Section 53326 of the Act and any requirement pertaining to the conduct of said election, including any time limit or requirement applicable to an election pursuant to Article 5 of the Act (commencing with Section 53345 of the Act), and (b) to the holding of said election on April 2, 2019. The City Council hereby finds and determines that the City Clerk has concurred in said waivers and has concurred in holding said election on April 2, 2019. SECTION 11. The date of the special community facilities district election (which shall be consolidated with the special district election to levy a special tax within the Community Facilities District) at which time the proposition shall be submitted to the voters is April 2, 2019. SECTION 12. The election is to be conducted by mail ballot. The mailed ballots are required to be received in the office of the City Clerk no later than 6:00 p.m. on April 2, 2019; provided, however, that if all of the qualified electors have voted prior to such time, the election may be closed with the concurrence of the City Clerk. SECTION 13. The officers, employees and agents of the City are hereby authorized and directed to take all actions and do all things which they, or any of them, may deem necessary or desirable to accomplish the purposes of this Resolution and not inconsistent with the provisions hereof. Packet Pg. 228 Item 13 Resolution No. _____ (2019 Series) Page 4 R ______ SECTION 14.This Resolution shall take effect immediately upon its adoption. Upon motion of _______________________, seconded by _______________________, and on the following roll call vote: AYES: NOES: ABSENT: The foregoing resolution was adopted this _____ day of _____________________ 2019. ____________________________________ Mayor Heidi Harmon ATTEST: ____________________________________ Teresa Purrington City Clerk APPROVED AS TO FORM: _____________________________________ J. Christine Dietrick City Attorney IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of San Luis Obispo, California, this ______ day of ______________, _________. ____________________________________ Teresa Purrington City Clerk Packet Pg. 229 Item 13 Resolution No. _____ (2019 Series) Page 5 R ______ CITY CLERK’S CERTIFICATE I, the undersigned, duly appointed and qualified City Clerk of the City of San Luis Obispo (the “City”), certify that attached is a full, true and correct copy of Resolution No. _______, adopted April 2, 2019, during a meeting of the City Council of the City. Such meeting was duly and legally held at the regular meeting place of the City Council. All of the members of said council had due notice of such meeting and a majority thereof was present at such meeting. I have carefully compared the same with the original minutes of said meeting on file and of record in my office, and the foregoing is a full, true and correct copy of such resolution adopted at said meeting and entered in said minutes. Said resolution has not been amended, modified or rescinded since the date of its adoption, and the same is now in full force and effect. Dated: By: City Clerk Packet Pg. 230 Item 13 R ______ RESOLUTION NO. _____ (2019 SERIES) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA CALLING SPECIAL ELECTION FOR CITY OF SAN LUIS OBISPO COMMUNITY FACILITIES DISTRICT NO. 2019-1 (SAN LUIS RANCH) WHEREAS, on this date, the City Council (the “City Council”) of the City of San Luis Obispo (the “City”), pursuant to the Mello-Roos Community Facilities Act of 1982 (the “Act”), adopted a resolution entitled “A Resolution of the City Council of the City of San Luis Obispo, California of Formation of the City of San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch), Authorizing the Levy of a Special Tax within the Community Facilities District and Establishing an Appropriations Limit for the Community Facilities District” (the “Resolution of Formation”), establishing City of San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch) (the “Community Facilities District”), authorizing the levy of a special tax within the Community Facilities District and establishing an appropriations limit for the Community Facilities District; WHEREAS, on this date, the City Council also adopted a resolution entitled “A Resolution of the City Council of the City of San Luis Obispo, California Deeming it Necessary to Incur Bonded Indebtedness within City of San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch)” (the “Resolution Deeming it Necessary to Incur”), deeming it necessary to incur bonded indebtedness in the maximum amount of $25,000,000; WHEREAS, pursuant to the provisions of said resolutions, the propositions to incur bonded indebtedness, to levy a special tax within the Community Facilities District and to establish an appropriations limit for the Community Facilities District are to be submitted to the qualified electors of the Community Facilities District as required by the Act; WHEREAS, the City Council desires to designate the City Clerk of the City (the “City Clerk”) as the election official for the special election provided for herein; WHEREAS, there has been filed with the City Clerk a letter from the Registrar of Voters of the County of San Luis Obispo indicating that no persons were registered to vote within the territory of the proposed Community Facilities District as of [__________], 2019, and, accordingly, that 12 or more persons have not been registered to vote within the territory of the Community Facilities District for each of the 90 days preceding the close of the public hearings on the establishment of the Community Facilities District and the proposed debt issue for the Community Facilities District; WHEREAS, there has been filed with the City Clerk consents and waivers of all of the landowners of record in the Community Facilities District waiving any time limit specified by Section 53326 of the Act and any requirement pertaining to the conduct of said special election, including any time limit or requirement applicable to an election pursuant to Article 5 of the Act (commencing with Section 53345 of the Act), consenting to the holding of said special election on Packet Pg. 231 Item 13 Resolution No. _____ (2019 Series) Page 2 R ______ April 2, 2019 and waiving any impartial analysis, arguments or rebuttals, as set forth in Sections 53326 and 53327 of the Act; and WHEREAS, the City Clerk has concurred in said waivers and has concurred in holding said special election on April 2, 2019; NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of San Luis Obispo as follows: SECTION 1. The foregoing recitals are true and correct. SECTION 2. Pursuant to Sections 53351, 53326 and 53325.7 of the Act, the propositions to incur bonded indebtedness, to levy a special tax within the Community Facilities District and to establish an appropriations limit for the Community Facilities District shall be submitted to the qualified electors of the Community Facilities District at an election called therefor as provided below. SECTION 3. The City Clerk is hereby designated as the official to conduct said election. SECTION 4. As authorized by Section 53353.5 of the Act, the propositions to incur bonded indebtedness, to levy a special tax within the Community Facilities District and to establish an appropriations limit for the Community Facilities District shall be combined into one ballot proposition. SECTION 5. The City Council hereby finds and determines that no persons were registered to vote within the territory of the proposed Community Facilities District as of January 17, 2019, and that 12 or more persons have not been registered to vote within the territory of the Community Facilities District for each of the 90 days preceding the close of the public hearings heretofore held by the City Council on the establishment of the Community Facilities District and the proposed debt issue for the Community Facilities District. Accordingly, pursuant to Section 53326 of the Act, the vote shall be by the landowners of the Community Facilities District and each person who is the owner of land as of the close of said public hearings, or the authorized representative thereof, shall have one vote for each acre or portion of an acre that he or she owns within the Community Facilities District not exempt from the special tax. SECTION 6. The City Council hereby finds and determines that the qualified electors of the Community Facilities District have unanimously consented (a) to the waiver of any time limit specified by Section 53326 of the Act and any requirement pertaining to the conduct of said election, including any time limit or requirement applicable to an election pursuant to Article 5 of the Act (commencing with Section 53345 of the Act), (b) to the holding of said election on April 2, 2019, and (c) to the waiver of any impartial analysis, arguments or rebuttals, as set forth in Sections 53326 and 53327 of the Act. The City Council hereby finds and determines that the City Clerk has concurred in said waivers and has concurred in holding said election on April 2, 2019. Packet Pg. 232 Item 13 Resolution No. _____ (2019 Series) Page 3 R ______ SECTION 7. The City Council hereby calls a special election to submit to the qualified electors of the Community Facilities District the combined proposition to incur bonded indebtedness, to levy a special tax within the Community Facilities District and to establish an appropriations limit for the Community Facilities District, which election shall be held at 990 Palm Street, San Luis Obispo, California, on April 2, 2019. The City Council has caused to be provided to the City Clerk, as the official to conduct said election, the Resolution of Formation, the Resolution of Deeming it Necessary to Incur, a certified map of sufficient scale and clarity to show the boundaries of the Community Facilities District, and a sufficient description to allow the City Clerk to determine the boundaries of the Community Facilities District. The voted ballots shall be returned to the City Clerk not later than 6:00 p.m. on April 2, 2019; provided, however, that if all of the qualified electors have voted prior to such time, the election may be closed with the concurrence of the City Clerk. SECTION 8. Pursuant to Section 53326 of the Act, the election shall be conducted by mail or hand-delivered ballot pursuant to Section 4000 et. seq. of the California Elections Code. Except as otherwise provided in the Act, the provisions of law regulating elections of the City, insofar as they may be applicable, will govern the election. SECTION 9. The form of the ballot for said election is attached hereto as Exhibit A and by this reference incorporated herein, and such form of ballot is hereby approved. The City Clerk shall cause to be delivered to each of the qualified electors of the Community Facilities District a ballot in said form. Each ballot shall indicate the number of votes to be voted by the respective landowner to which it pertains. SECTION 10. Each ballot shall be accompanied by all supplies and written instructions necessary for the use and return of the ballot. SECTION 11. Analysis and arguments with respect to the ballot proposition are hereby waived, as provided in Section 53327 of the Act. SECTION 12. The City Clerk shall accept the ballots of the qualified electors in the office of the City Clerk at 990 Palm Street, San Luis Obispo, California, to and including 6:00 p.m. on April 2, 2019, whether said ballots be personally delivered or received by mail. The City Clerk shall have available ballots which may be marked at said location on the election day by said qualified electors. SECTION 13. The City Council hereby determines that the facilities financed by the Community Facilities District are necessary to meet increased demands placed upon local agencies as a result of development occurring in the Community Facilities District. SECTION 14. The specific purposes of the bonded indebtedness proposed to be incurred is the financing of the Facilities (as defined in the Resolution of Formation), including all costs and estimated costs incidental to, or connected with, the accomplishment of such purpose, and the proceeds of such bonded indebtedness shall be applied only to such specific purposes. Packet Pg. 233 Item 13 Resolution No. _____ (2019 Series) Page 4 R ______ Upon approval of the proposition to incur bonded indebtedness, and the sale of any bonds evidencing such indebtedness, the City Council shall take such action as may be necessary to cause to be established an account for deposit of the proceeds of sale of the bonds. For so long as any proceeds of the bonds remain unexpended, the Community Development Director of the City shall cause to be filed with the City Council, no later than January 1 of each year, a report stating (a) the amount of bond proceeds received and expended during the preceding year, and (b) the sta tus of any project funded or to be funded from bond proceeds. Said report may relate to the calendar year, fiscal year, or other appropriate annual period, as the Community Development Director of the City shall determine, and may be incorporated into the annual budget, audit, or other appropriate routine report to the City Council. SECTION 15. The officers, employees and agents of the City are hereby authorized and directed to take all actions and do all things which they, or any of them, may deem necessary or desirable to accomplish the purposes of this Resolution and not inconsistent with the provisions hereof. SECTION 14. This Resolution shall take effect immediately upon its adoption. Upon motion of _______________________, seconded by _______________________, and on the following roll call vote: AYES: NOES: ABSENT: The foregoing resolution was adopted this _____ day of _____________________ 2019. ____________________________________ Mayor Heidi Harmon ATTEST: ____________________________________ Teresa Purrington City Clerk Packet Pg. 234 Item 13 Resolution No. _____ (2019 Series) Page 5 R ______ APPROVED AS TO FORM: _____________________________________ J. Christine Dietrick City Attorney IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of San Luis Obispo, California, this ______ day of ______________, _________. ____________________________________ Teresa Purrington City Clerk Packet Pg. 235 Item 13 Resolution No. _____ (2019 Series) Page 6 R ______ EXHIBIT A OFFICIAL BALLOT CITY OF SAN LUIS OBISPO April 2, 2019 SPECIAL ELECTION This ballot is for a special, landowner election. The number of votes to be voted pursuant to this ballot is [___]. The landowner is [__________]. INSTRUCTIONS TO VOTERS: To vote on the measure, mark a cross (+) in the voting square after the word “YES” or after the word “NO”. All distinguishing marks or erasures are forbidden and make the ballot void. If you wrongly mark, tear, or deface this ballot, return it to the City Clerk of the City of San Luis Obispo and obtain another. CITY OF SAN LUIS OBISPO COMMUNITY FACILITIES DISTRICT NO. 2019-1 (SAN LUIS RANCH) MEASURE SUBMITTED TO VOTE OF VOTERS: Shall the City of San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch) (the “Community Facilities District”) be authorized to incur bonded indebtedness in a maximum amount of not to exceed $25,000,000 and levy a special tax in order to finance certain facilities and shall the annual appropriations limit of the Community Facilities District be established in the amount of $2,500,000, all as specified in the Resolution entitled “A Resolution of the City Council of the City of San Luis Obispo, California of Formation of the City of San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch), Authorizing the Levy of a Special Tax within the Community Facilities District and Establishing an Appropriations Limit for the Community Facilities District” and the Resolution entitled “A Resolution of the City Council of the City of San Luis Obispo, California Deeming it Necessary to Incur Bonded Indebtedness within City of San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch),” each adopted by the City Council of the City of San Luis Obispo on April 2, 2019? Yes: No: Packet Pg. 236 Item 13 Resolution No. _____ (2019 Series) Page 2 R ______ Certification for Special Election Ballot I declare under penalty of perjury that I am the owner of record or the authorized representative of the landowner entitled to vote this ballot and that I am the person whose name appears below. Executed on ___________________, 20___, at ________________________, City of _____________________________, California. Name: _________________________________________________________ Address: _______________________________________________________ Signature: ______________________________________________________ CITY CLERK’S CERTIFICATE I, the undersigned, duly appointed and qualified City Clerk of the City of San Luis Obispo (the “City”), certify that attached is a full, true and correct copy of Resolution No. _______, adopted April 2, 2019, during a meeting of the City Council of the City. Such meeting was duly and legally held at the regular meeting place of the City Council. All of the members of said council had due notice of such meeting and a majority thereof was present at such meeting. I have carefully compared the same with the original minutes of said meeting on file and of record in my office, and the foregoing is a full, true and correct copy of such resolution adopted at said meeting and entered in said minutes. Said resolution has not been amended, modified or rescinded since the date of its adoption, and the same is now in full force and effect. Dated: By: Teresa Purrington, City Clerk Packet Pg. 237 Item 13 CITY OF SAN LUIS OBISPO COMMUNITY FACILITIES DISTRICT NO. 2019-1 (SAN LUIS RANCH) CONCURRENCE OF ELECTION OFFICIAL I, Teresa Purrington, City Clerk of the City of San Luis Obispo (the “City”), hereby certify as follows: (a) that I am the election official responsible for conducting special elections in the City; and (b) that, pursuant to Section 53326(a) of the Mello-Roos Community Facilities Act of 1982 (the “Act”), I do hereby concur to (i) the holding of a special election on April 2, 2019, for the purpose of submitting to the qualified electors of City of San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch) (the “Community Facilities District”) the propositions to incur bonded indebtedness, to levy a special tax within the Community Facilities District and to establish an appropriations limit for the Community Facilities District, as provided in the resolution proposed to be adopted by the City Council of the City on April 2, 2019, entitled “A Resolution of the City Council of the City of San Luis Obispo, California Calling Special Election for City of San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch),” and (ii) with respect to such special election, the waiving by the qualified electors of the Community Facilities District of any time limit specified by Section 53326 of the Act, including any time limit or requirement applicable to an election pursuant to Article 5 of the Act (commencing with Section 53345 of the Act). Dated: April 2, 2019 Teresa Purrington, City Clerk Packet Pg. 238 Item 13 R ______ RESOLUTION NO. _____ (2019 SERIES) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA DECLARING RESULTS OF SPECIAL ELECTION AND DIRECTING RECORDING OF NOTICE OF SPECIAL TAX LIEN WHEREAS, on April 2, 2019, the City Council (the “City Council”) of the City of San Luis Obispo (the “City”), pursuant to the Mello-Roos Community Facilities Act of 1982 (the “Act”), adopted a resolution entitled “A Resolution of the City Council of the City of San Luis Obispo Calling Special Election for City of San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch)” (the “Resolution Calling Election”), calling for a special election of the qualified electors within City of San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch) (the “Community Facilities District”); WHEREAS, pursuant to the terms of the Resolution Calling Election and the provisions of the Act, the special election was held on April 2, 2019; and WHEREAS, the City Clerk of the City (the “City Clerk”) has certified the canvass of the returns of the election and has filed a Canvass and Statement of Results of Election (the “Canvass”), a copy of which is attached hereto as Exhibit A; NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of San Luis Obispo as follows: SECTION 1. The foregoing recitals are true and correct. SECTION 2. The City Council has received, reviewed and hereby accepts the Canvass. SECTION 3. The City Council hereby finds and declares that the ballot proposition submitted to the qualified electors of the Community Facilities District pursuant to the Resolution Calling Election has been passed and approved by such electors in accordance with Section 53328, Section 53355 and Section 53325.7 of the Act. SECTION 4. The City Clerk is hereby directed to execute and cause to be recorded in the office of the County Recorder of the County of San Luis Obispo a notice of special tax lien in the form required by the Act, said recording to occur no later than fifteen days following adoption by the City Council of this Resolution. SECTION 5. The officers, employees and agents of the City are hereby authorized and directed to take all actions and do all things which they, or any of them, may deem necessary or desirable to accomplish the purposes of this Resolution and not inconsistent with the provisions hereof. SECTION 6. This Resolution shall take effect immediately upon its adoption. Packet Pg. 239 Item 13 Resolution No. _____ (2019 Series) Page 2 R ______ Upon motion of _______________________, seconded by _______________________, and on the following roll call vote: AYES: NOES: ABSENT: The foregoing resolution was adopted this _____ day of _____________________ 2019. ____________________________________ Mayor Heidi Harmon ATTEST: ____________________________________ Teresa Purrington City Clerk APPROVED AS TO FORM: _____________________________________ J. Christine Dietrick City Attorney IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of San Luis Obispo, California, this ______ day of ______________, _________. ____________________________________ Teresa Purrington City Clerk Packet Pg. 240 Item 13 Resolution No. _____ (2019 Series) Page 3 R ______ EXHIBIT A [See attached] Packet Pg. 241 Item 13 Resolution No. _____ (2019 Series) Page 4 R ______ CITY OF SAN LUIS OBISPO COMMUNITY FACILITIES DISTRICT NO. 2019-1 (SAN LUIS RANCH) CANVASS AND STATEMENT OF RESULTS OF ELECTION I hereby certify that on April 2, 2019, I canvassed the returns of the special election held on April 2, 2019, for the City of San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch), that the total number of ballots cast in said Community Facilities District and the total number of votes cast for and against the proposition are as follows and that the totals as shown for and against the proposition are true and correct: Qualified Landowner Votes Votes Cast YES NO City of San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch) Special Election, April 2, 2019 132 MEASURE SUBMITTED TO VOTE OF VOTERS: Shall the City of San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch) (the “Community Facilities District”) be authorized to incur bonded indebtedness in a maximum amount of not to exceed $25,000,000 and levy a special tax in order to finance certain facilities and shall the annual appropriations limit of the Community Facilities District be established in the amount of $2,500,000, all as specified in the Resolution entitled “A Resolution of the City Council of the City of San Luis Obispo, California of Formation of the City of San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch), Authorizing the Levy of a Special Tax within the Community Facilities District and Establishing an Appropriations Limit for the Community Facilities District” and the Resolution entitled “A Resolution of the City Council of the City of San Luis Obispo, California Deeming it Necessary to Incur Bonded Indebtedness within City of San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch),” each adopted by the City Council of the City of San Luis Obispo on April 2, 2019? IN WITNESS WHEREOF, I HAVE HEREUNTO SET MY HAND this 2nd day of April 2019. By: Teresa Purrington, City Clerk Packet Pg. 242 Item 13 Resolution No. _____ (2019 Series) Page 5 R ______ CITY CLERK’S CERTIFICATE I, the undersigned, duly appointed and qualified City Clerk of the City of San Luis Obispo (the “City”), certify that attached is a full, true and correct copy of Resolution No. _______, adopted April 2, 2019, during a meeting of the City Council of the City. Such meeting was duly and legally held at the regular meeting place of the City Council. All of the members of said council had due notice of such meeting and a majority thereof was present at such meeting. I have carefully compared the same with the original minutes of said meeting on file and of record in my office, and the foregoing is a full, true and correct copy of such resolution adopted at said meeting and entered in said minutes. Said resolution has not been amended, modified or rescinded since the date of its adoption, and the same is now in full force and effect. Dated: By: Teresa Purrington, City Clerk Packet Pg. 243 Item 13 OHS DRAFT 02/27/19 4158-9011-2794.1 RECORDING REQUESTED BY AND AFTER RECORDATION RETURN TO: City Clerk City of San Luis Obispo 990 Palm Street San Luis Obispo, California 93401 NOTICE OF SPECIAL TAX LIEN CITY OF SAN LUIS OBISPO COMMUNITY FACILITIES DISTRICT NO. 2019-1 (SAN LUIS RANCH) Pursuant to the requirements of Section 3114.5 of the California Streets and Highways Code and Section 53328.3 of the Mello-Roos Community Facilities Act of 1982 (the “Act”), the undersigned City Clerk of the City of San Luis Obispo (the “City”), State of California, hereby gives notice that a lien to secure payment of a special tax is hereby imposed by the City Council of the City, State of California. The special tax secured by this lien is authorized to be levied for the purpose of (a) paying the principal of and interest on bonds, the proceeds of which are being used to finance the facilities described on Exhibit A attached hereto and hereby made a part hereof, and (b) providing such facilities. The special tax is authorized to be levied within the City of San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch) (the “Community Facilities District”) that has now been officially formed and the lien of the special tax is a continuing lien that shall secure each annual levy of the special tax and which shall continue in force and effect until the special tax obligation is prepaid, permanently satisfied and canceled in accordance with law or until the special tax ceases to be levied and a notice of cessation of special tax is recorded in accordance with Section 53330.5 of the Act. The rate, method of apportionment, and manner of collection of the authorized special tax is as set forth in Exhibit B attached hereto and hereby made a part hereof. Conditions under which the obligation to pay the special tax for facilities may be prepaid and permanently satisfied and the lien of such special tax canceled are as set forth in Exhibit B hereto. Notice is further given that upon the recording of this notice in the office of the County Recorder of the County of San Luis Obispo, the obligation to pay the special tax levy shall become a lien upon all nonexempt real property within the Community Facilities District in accordance with Section 3115.5 of the California Streets and Highways Code. The name(s) of the owner(s) and the assessor’s tax parcel number(s) of the real property included within the Community Facilities District and not exempt from the special tax are as set forth in Exhibit C attached hereto and hereby made a part hereof. Reference is made to the boundary map of the Community Facilities District recorded at Book [__] of Maps of Assessment and Community Facilities Districts at Page [__], in the office of Packet Pg. 244 Item 13 4158-9011-2794.1 the County Recorder for the County of San Luis Obispo, State of California, which map is now the final boundary map of the District. For further information concerning the current and estimated future tax liability of owners or purchasers of real property subject to this special tax lien, interested persons should contact the Community Development Director of the City of San Luis Obispo, 990 Palm Street, San Luis Obispo, California 93401, (805) 781-7109. Dated: __________, 2019 By: Teresa Purrington, City Clerk Packet Pg. 245 Item 13 A-1 4158-9011-2794.1 EXHIBIT A FACILITIES In addition to the facilities described below, other expenses incidental to the below and authorized by the Act, including but not limited to: the cost of planning, permitting, and designing the facilities (including the cost of environmental evaluation, orthophotography, environmental remediation/mitigation); land acquisition and easement payments for the facilities; project management; construction staking; engineering studies and reports; utility relocation and demolition costs incidental to construction of the facilities, wetland/species mitigation purchase; reimbursements to other areas for infrastructure facilities or planning serving development in the Community Facilities District; legal, engineering, technical studies costs related to the facilities and any other expenses incidental to the construction, completion, and inspection of the facilities. Transportation Improvements Public roadway and bikeway improvements designed to meet the needs of the project, including those improvements identified in the San Luis Ranch Financing Plan, including but not limited to: Item # Item ROADWAYS 1 Froom Ranch Way (Prado to Oceanaire) Including Bridge 2 Froom Ranch Way (Oceanaire to Target Driveway) 3 Froom Ranch Way & LOVR Intersection Widening 4 Prado Road/US 101 Overpass and North Bound Lanes 5 Prado Road Southbound Ramps 6 Madonna & Dalidio/Prado Intersection Widening OTHER AREA ROADWAYS (MITIGATIONS) 7 Madonna & SB 101 Off Ramp - Lengthen EB Left Turn Pocket 8 Madonna & Oceanaire Pedestrian X-ing Enhancements 9 Madonna & San Luis Ranch Way Pedestrian X-ing Enhancement 10 LOVR & SB 101 Off Ramp - Lengthen Left Turn Pocket 11 LOVR & Higuera - Lengthen EB Right Turn Pocket 12 Higuera & South - Lengthen NB Right Turn Pocket OTHER AREA ROADWAY MITIGATIONS - FEE ONLY PROJECTS 13 Prado & Higuera Widening 14 Madonna Rd @ LOVR - Signal Timing Optimization 15 Madonna & Oceanaire Turn Lane Extensions 16 Madonna & LOVR - Turn Lane Extensions 17 LOVR & Auto Park Way Signalization 18 Higuera & Tank Farm - Lengthen NB Right Turn Pocket SLR BIKEWAYS 19 Prado Road Class I Path (Madonna to Froom) 20 Madonna Road Class I Path / Protected bikeway (Hwy 101 to Oceanaire) 21 Bob Jones Trail (Calle Joaquin to Froom Ranch Road) SLR BIKEWAYS - FEE ONLY PROJECTS 22 Prado Road Class I Path (NB Ramps to Higuera) 23 Bob Jones Trail (Madonna to Prado) Packet Pg. 246 Item 13 A-2 4158-9011-2794.1 Eligible roadway improvements include the following items: acquisition of land and easements; roadway design; project management; geotechnical engineering, testing and observations; bridge crossings and culverts; clearing, grubbing, and demolition; grading, soil import/export, paving (including slurry seal), and decorative/enhanced pavement concrete or pavers; power pole relocations; joint trenches, underground utilities, and undergrounding of existing utilities; dry utilities and appurtenances; curbs, gutters, sidewalks, bike trails (including on- and off-site), park and ride facilities, bus rapid transit improvements, including transfer stations and regional public transit improvements; retaining walls, sound walls, enhanced fencing, and access ramps; street lights, signalization, and traffic signal control systems; bus turnouts; signs and striping; erosion control; median and parkway landscaping and irrigation; entry monumentation; bus shelters; masonry walls; and other improvements related thereto. Eligible improvements for the roads listed above also include any and all necessary underground potable and non-potable water, sanitary sewer, and storm drainage system improvements. Potable and Non-Potable Water System Improvements Authorized facilities include any and all on- and off-site backbone water facilities designed to meet the needs of development of the project. These facilities include potable and non-potable mains, valves, services, and appurtenances; wells; and water treatment and storage facilities, and related improvements, including but not limited to: site clearing, grading, and paving; curbs and gutters; recycled water storage tanks, booster pump stations, and all appurtenances thereto; wells; water treatment; stand-by generator; site lighting, drainage, sanitary sewer, and water service; landscaping and irrigation; access gates and fencing; striping and signage; and the following: • Water lines in/associated with authorized facility roads. • Recycled water lines in/associated with authorized facility roads. Drainage System Improvements Authorized facilities include any and all on- and off-site backbone drainage and storm drainage improvements designed to meet the needs of development of the project. These facilities include mains, pipelines and appurtenances, outfalls and water quality measures, temporary drainage facilities, detention/retention basins, and drainage pretreatment facilities; drainage ways/channels, pump stations, landscaping, and irrigation; access roads, gates, and fencing; striping and signage; and the following: • All storm drain lines and facilities in/associated with authorized facility roadways. • Retention, detention, hydro-modification, and other drainage facilities. Wastewater System Improvements Authorized facilities include any and all on- and off-site backbone wastewater facilities designed to meet the needs of development of the project. These facilities include pipelines and all Packet Pg. 247 Item 13 A-3 4158-9011-2794.1 appurtenances thereto; manholes; tie-in to existing main line; force mains; lift stations; odor- control facilities; sewer treatment plant improvements and permitting related thereto; and related sewer system improvements, including but not limited to: • All wastewater facilities in/associated with authorized facility roadways. Solid Waste Improvements Authorized facilities include any and all backbone solid waste improvements designed to meet the needs of development of the project. Park and Landscape Corridor Improvements Authorized facilities include any and all improvements to parks and landscape corridors located in the project. Open Space Improvements Authorized facilities include any and all open space improvements designed to meet the needs of development of the project, including bike trails, bike/pedestrian bridges, storm drain crossings, storm drain detention/retention, wetland mitigation, tree mitigation, agricultural mitigation or wetland mitigation, property acquisition, endowment payments for open space management, landscaping and irrigation, access gates and fencing, and related open space improvements. Utilities Authorized facilities include any and all on- and off-site utility improvements designed to meet the needs of development of the project, including but not limited to: • New 24” HDPE Sewer Trunk Line. All utility improvements, easement payments, and land acquisition not located under or alongside transportation improvements are considered authorized facilities. Packet Pg. 248 Item 13 A-4 4158-9011-2794.1 FORMATION, ADMINISTRATIVE AND INCIDENTAL EXPENSES It is anticipated that the following incidental expenses may be incurred for the Community Facilities District: Engineering services Special tax consultant services City review and administration Bond counsel services Bond counsel expenses Disclosure counsel services Disclosure counsel expenses Independent municipal advisor services and expenses Appraiser services Market absorption study and real estate economist services Initial bond transfer agent, fiscal agent, registrar and paying agent fees Rebate calculation service set up charge Bond printing Offering memorandum printing and mailing costs Publishing, mailing and posting of notices Underwriter’s discount Bond reserve fund Capitalized interest Bond syndication costs Governmental notification and filing costs Credit enhancement costs Real estate acquisition costs Rating agency fees Charges and fees of City other than those waived Certain annual costs may be included in each annual special tax levy. These include: Annual bond transfer agent, fiscal agent, registrar and paying agent fees Annual rebate calculation costs Special tax consultant costs and administration expenses Other necessary consultant costs Costs of posting and collecting the special taxes Personnel and Administrative costs of the City Arbitrage rebate Continuing disclosure reporting and compliance Packet Pg. 249 Item 13 B-1 4158-9011-2794.1 EXHIBIT B (ATTACHMENT J PROVIDED SEPARATELY AS AGENDA REPORT ATTACHMENT) [AMENDED AND RESTATED] RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX Packet Pg. 250 Item 13 C-1 4158-9011-2794.1 EXHIBIT C PROPERTY OWNER AND PROPERTY DESCRIPTION Name of Property Owner San Luis Obispo County Assessor’s Parcel Nos. MI San Luis Ranch, LLC 067-121-022 Packet Pg. 251 Item 13 R ______ ORDINANCE NO. _____ (2019 SERIES) AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA, LEVYING SPECIAL TAXES WITHIN THE CITY OF SAN LUIS OBISPO COMMUNITY FACILITIES DISTRICT NO. 2019- 1 (SAN LUIS RANCH) WHEREAS, on February 19, 2019, the City Council (the “City Council”) of the City of San Luis Obispo (the “City”), pursuant to the Mello-Roos Community Facilities Act of 1982 (the “Act”), adopted a resolution entitled “A Resolution of the City Council of the City of San Luis Obispo, California of Intention to Establish a Community Facilities District and to Authorize the Levy of Special Taxes” stating its intention to establish City of San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch) (the “Community Facilities District”) and to finance certain public facilities (the “Facilities”); WHEREAS, on April 2, 2019, the City Council held a noticed public hearing on the establishment of the Community Facilities District, as required by the Act; WHEREAS, subsequent to the close of said hearing, the City Council adopted resolutions entitled “A Resolution of the City Council of the City of San Luis Obispo, California of Formation of the City of San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch), Authorizing the Levy of a Special Tax within the Community Facilities District and Establishing an Appropriations Limit for the Community Facilities District” (the “Resolution of Formation”), “A Resolution of the City Council of the City of San Luis Obispo, California Deeming it Necessary to Incur Bonded Indebtedness within City of San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch)” and “A Resolution of the City Council of the City of San Luis Obispo, California Calling Special Election for City of San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch),” which resolutions established the Community Facilities District, authorized the levy of a special tax within the Community Facilities District and called an election within the Community Facilities District on the proposition of incurring indebtedness, levying a special tax within the Community Facilities District and establishing an appropriations limit for the Community Facilities District, respectively; and WHEREAS, on April 2, 2019, an election was held in which the qualified electors of the Community Facilities District approved said proposition by more than the two-thirds vote required by the Act; NOW, THEREFORE, BE IT ORDAINED , by the City Council of the City of San Luis Obispo as follows: SECTION 1. The City Council hereby authorizes and levies special taxes within the Community Facilities District pursuant to Sections 53328 and 53340 of the Act, at the rate and in accordance with the method of apportionment set forth in Exhibit B to the Resolution of Formation (the “Rate and Method of Apportionment”). The special taxes are hereby levied commencing in fiscal year 2019-20, and in each fiscal year thereafter until the last fiscal year in which such special taxes are authorized to be levied pursuant to the Rate and Method of Apportionment. Packet Pg. 252 Item 13 Ordinance No. _____ (2019 Series) Page 2 O ______ SECTION 2. The City Council may, in accordance with subdivision (b) of Section 53340 of the Act, provide, by resolution, for the levy of the special tax in future tax years at the same rate or at a lower rate than the rate provided by this Ordinance. In no event shall the special tax be levied on any parcel within the Community Facilities District in excess of the maximum tax specified therefor in the Rate and Method of Apportionment. SECTION 3. The special tax shall be levied on all of the parcels in the Community Facilities District, unless exempted by law or by the Rate and Method of Apportionment. SECTION 4. The proceeds of the special tax shall only be used to pay, in whole or in part, the cost of providing the Facilities and incidental expenses pursuant to the Act. SECTION 5. The special tax shall be collected in the same manner as ordinary ad valorem property taxes are collected and shall be subject to the same penalties and the same procedure, sale and lien priority in the case of delinquency as is provided for ad valorem taxes, unless another procedure is adopted by the City Council. SECTION 6. If for any reason any portion of this Ordinance is found to be invalid, or if the special tax is found inapplicable to any particular parcel within the Community Facilities District, by a court of competent jurisdiction, the balance of this Ordinance and the application of the special tax to the remaining parcels within the Community Facilities District shall not be affected. This Ordinance shall take effect and shall be in force 30 days after the date of its adoption and prior to the expiration of 15 days from the passage thereof shall be published at least once in the New Times, a newspaper of general circulation, printed and published in the City of San Luis Obispo, State of California, together with the names of the City Council members voting for and against the same. INTRODUCED on the 2nd day of April 2019, AND FINALLY ADOPTED by the Council of the City of San Luis Obispo on ____ day of _____________, 2019, on the following vote: AYES: NOES: ABSENT: ______________________________ Mayor Heidi Harmon ATTEST: Teresa Purrington Packet Pg. 253 Item 13 Ordinance No. _____ (2019 Series) Page 3 O ______ City Clerk APPROVED AS TO FORM: J. Christine Dietrick City Attorney IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of San Luis Obispo, California, this ____ day of _________________, 2019. Teresa Purrington City Clerk Packet Pg. 254 Item 13 Hea Cit Co No Prepa City Prepa Econ Marc EPS aring Re ty of Sa ommun o. 2019 ared for: of San Luis O ared by: omic & Plan ch 2019 #181049 eport an Luis nity Fac 9-1 (Sa Obispo ning System s Obisp cilities an Luis ms, Inc. (EPS po Distric s Ranch S) ct h) Packet Pg. 255 Item 13 Table of Contents 1. INTRODUCTION .................................................................................................... 1 Background .............................................................................................................. 1 Purpose of the CFD ................................................................................................... 1 Organization of the Report ......................................................................................... 3 2. LAND USES ........................................................................................................ 4 3. AUTHORIZED FACILITIES AND ESTIMATED FACILITY COSTS ................................................. 7 Authorized Facilities of the CFD .................................................................................. 7 Authorized Facilities Estimated Costs ......................................................................... 10 4. CFD BOND AUTHORIZATION, ANNUAL SPECIAL TAXES, AND ESTIMATED CFD BONDS ................ 12 CFD Bond Authorization and Funding Strategy ............................................................ 12 Minimum and Maximum Annual Special Tax ............................................................... 12 Estimated CFD Bond Issuance and Net Bond Proceeds ................................................. 16 Overall Tax Burden for Single-Family Residential ........................................................ 18 5. STRUCTURE OF THE CFD ....................................................................................... 20 Description of the CFD ............................................................................................. 20 The CFD Funding Program ........................................................................................ 20 Determining the Maximum Annual Special Tax ........................................................... 20 Base Year .............................................................................................................. 20 Annual Tax Escalation Factor .................................................................................... 20 Duration of the Special Tax ...................................................................................... 20 Definition of Annual Costs ........................................................................................ 21 Assignment of Maximum Annual Special Tax .............................................................. 23 Workforce/Affordable Units ...................................................................................... 24 Nonresidential Parcels Rezoned to Residential Uses ..................................................... 24 Transfer of the Assigned Special Tax ......................................................................... 25 Conversion of a Tax-Exempt Parcel to a Taxable Parcel ................................................ 25 Taxable Parcels Acquired by a Public Agency .............................................................. 25 Packet Pg. 256 Item 13 Determination of Parcels Subject to Special Tax .......................................................... 25 Setting the Special Tax Levy for Taxable Parcels ......................................................... 25 Prepayment of the Special Tax Obligation .................................................................. 26 Interpretation, Application, and Appeal of Special Tax Formula and Procedures .............. 26 Manner of Collection ................................................................................................ 27 Exhibits: Exhibit A: Amended Rate, Method of Apportionment, and Manner of Collection of Special Tax Exhibit B: List of Authorized Facilities List of Maps and Tables Map 1 City of San Luis Obispo CFD No. 2019-1 (San Luis Ranch) Boundary Map ........... 2 Map 2 San Luis Ranch Final Map .............................................................................. 5 Table 1 CFD Land Uses ............................................................................................ 6 Table 2 Estimated CFD Costs .................................................................................. 11 Table 3 Assignment of the Special Taxes to Original Parcels—Base Year ....................... 14 Table 4 Assignment of the Special Tax by Tax Category—Base Year ............................ 15 Table 5 Estimated CFD Bonds and Annual Costs at Buildout ........................................ 17 Table 6 Overall Tax Burden for Taxable Parcels ......................................................... 19 Packet Pg. 257 Item 13 Economic & Planning Systems, Inc. (EPS) 1 P:\182000\181049 San Luis Ranch CFD\Reports\181049 hr1Final 03-2019.docx 1. INTRODUCTION Background The City of San Luis Obispo (City) retained Economic & Planning Systems, Inc. (EPS) to support its efforts to create a Mello-Roos Community Facilities District (CFD) for the San Luis Ranch development (Project), located in the San Luis Ranch Specific Plan (SLRSP) area, located west of US Highway 101 in the southwest quadrant of the City. The objective of establishing a CFD is to create a land-secured funding mechanism to help fund construction of authorized facilities of the CFD. The boundaries of the proposed CFD are coterminous with the SLRSP. Overall, the Project area includes approximately 131.4 acres approved for up to 580 dwelling units and commercial development, including a 200-room hotel, 100,000 square feet of office space, and 150,000 square feet of retail and service commercial uses. The Project includes 7.8 acres of parks, waterways, and other interior open space. There will be 52.3 acres of farmed agricultural land in the Project area. All Project areas discussed will be included within the boundaries of the CFD. EPS prepared the “San Luis Ranch Financing Plan” (Financing Plan) in June 2018, which addressed how the infrastructure needed to serve the Project will be funded. The Financing Plan identified total infrastructure improvement costs of $54.2 million, of which approximately $22.8 million is attributable to the Project as a “fair-share” cost allocation for required infrastructure. Purpose of the CFD The CFD is being formed to fund major road improvements, potable and non-potable water system improvements, drainage system improvements, wastewater system improvements, solid waste improvements, park and paseo improvements, open space improvements, utilities, and other authorized facilities under the Mello-Roos Act, serving the Project as a condition of the City’s approval of the development. The CFD is authorized to issue up to $25 million in bonds. It is anticipated that more than one CFD bond issuance will occur as the Project is built out. The developer is seeking the first bond issuance as soon as possible upon formation of the CFD. Map 1 shows the proposed boundaries of the CFD. Packet Pg. 258 Item 13 1050 Southwood Drive San Luis Obispo, CA 93401 P 805.544.7407 F 805.544.3863 Map 1Packet Pg. 259 Item 13 San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch) Hearing Report March 2019 Economic & Planning Systems, Inc. (EPS) 3 P:\182000\181049 San Luis Ranch CFD\Reports\181049 hr1Final 03-2019.docx Organization of the Report This report consists of these 5 chapters and 2 exhibits:  Chapter 1 consists of this introduction.  Chapter 2 describes the proposed land uses in the CFD.  Chapter 3 describes authorized facilities to be funded in the CFD, the costs, and the cost allocations.  Chapter 4 describes the maximum CFD bond authorization and the maximum annual special tax.  Chapter 5 describes the structure of the CFD.  Exhibit A provides the Amended Rate, Method of Apportionment, and Manner of Collection of Special Tax (RMA).  Exhibit B provides the List of Authorized Facilities and Services. Packet Pg. 260 Item 13 Economic & Planning Systems, Inc. (EPS) 4 P:\182000\181049 San Luis Ranch CFD\Reports\181049 hr1Final 03-2019.docx 2. LAND USES The CFD will be formed over the entire Project area. The CFD consists of approximately 131.4 acres, with residential uses planned for approximately 31.6 acres, nonresidential commercial uses for approximately 18.5 acres, and the remaining acreage designated for public uses and local roads. Only residential uses will be taxable under the CFD. A tentative map was approved for the Project, and a final map for the Project was approved by the City Council on November 27, 2018. The final map identifies a lot number for all delineated parcels on the map. Lot numbers shown on the map (see Map 2) are used in the RMA to identify parcels in the assignment of the special taxes. Individual lot numbers are provided for each low-density residential (LDR) and medium-density residential (MDR) use parcel. Lot numbers 1 and 2 on the final map are planned for high-density residential (HDR) uses. Table 1 shows all land uses proposed for inclusion within the boundaries of the CFD. The total planned residential units are shown for each residential land use category. There are 198 LDR parcels and 83 MDR parcels identified in the table. Lot number ranges are shown in Table 1 for each single-family residential use density. Table 1 shows that 165 “for-sale” HDR units are planned for Lot 1 and 134 “for-rent” units are planned for Lot 2. The developer plans to build a minimum of 165 for-sale units but may build more if the market demand exists for such a product. HDR for-sale products will be taxable under the CFD, while HDR for-rent products will remain tax exempt. Three parcels are identified as nonresidential uses and will be developed as hotel, commercial, and office uses. These parcels shall remain tax exempt, unless they become rezoned to for-sale residential land uses in the future. Packet Pg. 261 Item 13 1050 Southwood DriveSan Luis Obispo, CA 93401P 805.544.7407 F 805.544.3863Packet Pg. 262Item 13 Table 1 City of San Luis Obispo CFD No. 2019-1 (San Luis Ranch) CFD Parcels and Land Uses Land Use Lot No.Acres Units Density [1] Residential Uses Low Density Residential (LDR)11-208 15.51 198 12.77 Medium Density Residential (MDR)220-302 5.14 83 16.15 High Density Residential (HDR) - For Sale [2] 1 6.62 165 24.92 High Density Residential (HDR) - For Rent 2 4.35 134 30.80 Residential Use Totals 31.62 580 Nonresidential Uses Commercial 7 11.44 Commercial 8 3.33 Commercial 9 3.81 Nonresidential Use Totals 18.58 Public Uses Parks 3.19 Open Space 7.81 Agricultural 52.32 Regional Road 9.00 Local Road 8.84 Public Use Totals 81.16 CFD Totals 131.36 580 "cfd_LU" Source: Cannon [1] Lot numbers are designated on the final map for the development. [2] Lot No. 1 is identified in the RMA as a Taxable Parcel with HDR For-Sale land uses. The RMA allows the developers to move this residential product to Lot No. 2 and designate Lot No. 1 as the tax-exempt HDR For-Rent product parcel. Prepared by EPS 3/11/2019 P:\182000\181049 San Luis Ranch CFD\Models\181049 model 4.xlsx 6 Packet Pg. 263 Item 13 Economic & Planning Systems, Inc. (EPS) 7 P:\182000\181049 San Luis Ranch CFD\Reports\181049 hr1Final 03-2019.docx 3. AUTHORIZED FACILITIES AND ESTIMATED FACILITY COSTS This chapter describes the authorized facilities eligible to be financed or otherwise funded through the CFD with the proceeds of CFD bonds and pay-as-you-go revenues from special taxes levied under the CFD. Authorized Facilities of the CFD The CFD is authorized to fund certain facilities required to serve the Project. Authorized facilities are identified in the List of Authorized Facilities (Exhibit B of this report). Authorized facilities and certain related incidental expenses are briefly discussed below. Transportation Improvements Public roadway and bikeway improvements designed to meet the needs of the Project, including those improvements identified in the Financing Plan, include: Item # Item ROADWAYS 1 Froom Ranch Way (Prado to Oceanaire) Including Bridge 2 Froom Ranch Way (Oceanaire to Target Driveway) 3 Froom Ranch Way & LOVR Intersection Widening 4 Prado Road/US 101 Overpass and North Bound Lanes 5 Prado Road Southbound Ramps 6 Madonna & Dalidio/Prado Intersection Widening OTHER AREA ROADWAYS (MITIGATIONS) 7 Madonna & SB 101 Off Ramp - Lengthen EB Left Turn Pocket 8 Madonna & Oceanaire Pedestrian X-ing Enhancements 9 Madonna & San Luis Ranch Way Pedestrian X-ing Enhancement 10 LOVR & SB 101 Off Ramp - Lengthen Left Turn Pocket 11 LOVR & Higuera - Lengthen EB Right Turn Pocket 12 Higuera & South - Lengthen NB Right Turn Pocket OTHER AREA ROADWAY MITIGATIONS - FEE ONLY PROJECTS 13 Prado & Higuera Widening 14 Madonna Rd @ LOVR - Signal Timing Optimization 15 Madonna & Oceanaire Turn Lane Extensions 16 Madonna & LOVR - Turn Lane Extensions 17 LOVR & Auto Park Way Signalization 18 Higuera & Tank Farm - Lengthen NB Right Turn Pocket SLR BIKEWAYS 19 Prado Road Class I Path (Madonna to Froom) 20 Madonna Road Class I Path / Protected bikeway (Hwy 101 to Oceanaire) 21 Bob Jones Trail (Calle Joaquin to Froom Ranch Road) SLR BIKEWAYS - FEE ONLY PROJECTS 22 Prado Road Class I Path (NB Ramps to Higuera) 23 Bob Jones Trail (Madonna to Prado) Packet Pg. 264 Item 13 San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch) Hearing Report March 2019 Economic & Planning Systems, Inc. (EPS) 8 P:\182000\181049 San Luis Ranch CFD\Reports\181049 hr1Final 03-2019.docx Eligible roadway improvements include the following items: acquisition of land and easements; roadway design; project management; geotechnical engineering, testing, and observations; bridge crossings and culverts; clearing, grubbing, and demolition; grading, soil import/export, paving (including slurry seal), and decorative/enhanced pavement concrete or pavers; power pole relocations; joint trenches, underground utilities, and undergrounding of existing utilities; dry utilities and appurtenances; curbs, gutters, sidewalks, bike trails (including on- and off-site), park and ride facilities, bus rapid transit improvements, including transfer stations and regional public transit improvements; retaining walls, sound walls, enhanced fencing, and access ramps; street lights, signalization, and traffic signal control systems; bus turnouts; signs and striping; erosion control; median and parkway landscaping and irrigation; entry monumentation; bus shelters; masonry walls; and other improvements related thereto. Eligible improvements for the roads listed above also include any and all necessary underground potable and non-potable water, sanitary sewer, and storm drainage system improvements. Potable and Non-Potable Water System Improvements Authorized facilities include any and all on- and off-site backbone water facilities designed to meet the needs of development of the Project. These facilities include potable and non-potable mains, valves, services, and appurtenances; wells; and water treatment and storage facilities, and related improvements, including site clearing, grading, and paving; curbs and gutters; recycled water storage tanks, booster pump stations, and all appurtenances thereto; wells; water treatment; stand-by generator; site lighting, drainage, sanitary sewer, and water service; landscaping and irrigation; access gates and fencing; striping and signage; and these:  Water lines in/associated with authorized facility roads.  Recycled water lines in/associated with authorized facility roads. Drainage System Improvements Authorized facilities include any and all on- and off-site backbone drainage and storm drainage improvements designed to meet the needs of development of the Project. These facilities include mains, pipelines and appurtenances, outfalls and water quality measures, temporary drainage facilities, detention/retention basins, and drainage pretreatment facilities; drainage ways/channels, pump stations, landscaping, and irrigation; access roads, gates, and fencing; striping and signage; and these:  All storm drain lines and facilities in/associated with authorized facility roadways.  Retention, detention, hydromodification, and other drainage facilities. Wastewater System Improvements Authorized facilities include any and all on- and off-site backbone wastewater facilities designed to meet the needs of development of the Project. These facilities include pipelines and all appurtenances thereto; manholes; tie-in to existing main line; force mains; lift stations; odor- control facilities; sewer treatment plant improvements and permitting related thereto; and related sewer system improvements, including all wastewater facilities in/associated with authorized facility roadways. Packet Pg. 265 Item 13 San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch) Hearing Report March 2019 Economic & Planning Systems, Inc. (EPS) 9 P:\182000\181049 San Luis Ranch CFD\Reports\181049 hr1Final 03-2019.docx Solid Waste Improvements Authorized facilities include any and all backbone solid waste improvements designed to meet the needs of development of the Project. Park and Landscape Corridor Improvements Authorized facilities include any and all improvements to parks and landscape corridors located in the Project. Open Space Improvements Authorized facilities include any and all open space improvements designed to meet the needs of development of the Project, including bike trails, bike/pedestrian bridges, storm drain crossings, storm drain detention/retention, tree mitigation, agricultural mitigation or wetland mitigation, property acquisition, endowment payments for open space management, landscaping and irrigation, access gates and fencing, and related open space improvements. Utilities Authorized facilities include any and all on- and off-site utility improvements designed to meet the needs of development of the Project, including new 24-inch HDPE Sewer Trunk Lines. All utility improvements, easement payments, and land acquisition not located under or alongside transportation improvements are considered authorized facilities. Formation, Administrative, and Incidental Expenses It is anticipated that the following incidental expenses may be incurred for the CFD:  Engineering services.  Special tax consultant services.  City review and administration.  Bond counsel services and expenses.  Disclosure counsel services and expenses.  Independent municipal advisor services and expenses.  Appraiser services.  Market absorption study and real estate economist services.  Initial bond transfer agent, fiscal agent, and registrar and paying agent fees.  Rebate calculation service set-up charge.  Bond printing.  Offering memorandum printing and mailing costs.  Publishing, mailing, and posting notices.  Underwriter’s discount.  Bond reserve fund.  Capitalized interest.  Bond syndication costs.  Governmental notification and filing costs.  Credit enhancement costs. Packet Pg. 266 Item 13 San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch) Hearing Report March 2019 Economic & Planning Systems, Inc. (EPS) 10 P:\182000\181049 San Luis Ranch CFD\Reports\181049 hr1Final 03-2019.docx  Real estate acquisition costs.  Rating agency fees.  Charges and fees of City other than those waived. Certain annual costs may be included in each annual special tax levy, including these:  Annual bond transfer agent, fiscal agent, registrar, and paying agent fees.  Annual rebate calculation costs.  Special tax consultant costs and administration expenses.  Other necessary consultant costs.  Costs of posting and collecting the special taxes.  Personnel and administrative costs of the City.  Arbitrage rebate.  Continuing disclosure reporting and compliance. Authorized Facilities Estimated Costs The Financing Plan for the Project identifies the authorized facilities to be constructed to serve new development in the CFD. Estimated construction costs for each facility are identified in the Financing Plan. Cost-sharing assumptions for each facility, with a percentage of the total amount assigned to either the developer or to City or regional funding sources are identified. Table 2 summarizes costs and cost-sharing allocations shown in the Financing Plan. Total facility costs are approximately $54.2 million. The developer is assigned an estimated $22.8 million of the costs, with the remaining $31.4 million assigned to City or regional funding sources. Packet Pg. 267 Item 13 Table 2 City of San Luis Obispo CFD No. 2019-1 (San Luis Ranch) Estimated CFD Costs (2018$) Facility Item Cost Percent Amount Percent Amount ROADWAYS Froom Ranch Way (Prado to Oceanaire) Including Bridge $7,071,277 100% $7,071,277 0%$0 Froom Ranch Way (Oceanaire to Target Driveway) $423,561 15%$63,534 85% $360,027 Froom Ranch Way & LOVR Intersection Widening $450,000 20% $90,000 80% $360,000 Prado Road/US 101 Interchange and North Bound Ramps $25,000,000 28% $7,000,000 72% $18,000,000 Prado Road Southbound Ramps $10,000,000 28% $2,800,000 72% $7,200,000 Madonna & Dalidio/Prado Intersection Widening $2,000,000 100% $2,000,000 0%$0 ROADWAYS, SUBTOTALS $44,944,838 $19,024,811 $25,920,027 OTHER AREA ROADWAYS (MITIGATIONS) Madonna & SB 101 Off Ramp - Lengthen EB Left Turn Pocket $50,000 100% $50,000 0%$0 Madonna & Oceanaire Pedestrian X-ing Enhancements $300,000 50%$150,000 50% $150,000 Madonna & San Luis Ranch Way Pedestrian X-ing Enhancement $150,000 100% $150,000 0%$0 LOVR & SB 101 Off Ramp - Lengthen Left Turn Pocket $250,000 100% $250,000 0%$0 LOVR & Higuera - Lengthen EB Right Turn Pocket $25,000 100% $25,000 0%$0 Higuera & South - Lengthen NB Right Turn Pocket $250,000 50% $125,000 50% $125,000 OTHER AREA ROADWAYS (MITIGATIONS), SUBTOTALS $1,025,000 $750,000 $275,000 OTHER AREA ROADWAY MITIGATIONS - FEE ONLY PROJECTS Prado & Higuera Widening $750,000 10% $75,000 90% $675,000 Madonna Rd @ LOVR - Signal Timing Optimization $2,500 0%$0 100% $2,500 Madonna & Oceanaire Turn Lane Extensions $25,000 100% $25,000 0%$0 Madonna & LOVR - Turn Lane Extensions $25,000 100% $25,000 0%$0 LOVR & Auto Park Way Signalization $200,000 11% $22,000 89% $178,000 Higuera & Tank Farm - Lengthen NB Right Turn Pocket $850,000 5% $42,500 95% $807,500 OTHER AREA ROADWAY MITIGATIONS - FEE ONLY PROJECTS, SUBTOTALS $1,852,500 $189,500 $1,663,000 SLR BIKEWAYS Prado Road Class I Path (Madonna to Froom)$1,500,000 100% $1,500,000 0%$0 Madonna Road Class I Path / Protected bikeway (Hwy 101 to Oceanaire) $800,000 60% $480,000 40% $320,000 Bob Jones Trail (Calle Joaquin to Froom Ranch Road) $1,000,000 16% $160,000 84% $840,000 SLR BIKEWAYS, SUBTOTALS $3,300,000 $2,140,000 $1,160,000 SLR BIKEWAYS - FEE ONLY PROJECTS Prado Road Class I Path (NB Ramps to Higuera)$500,000 28% $140,000 72% $360,000 Bob Jones Trail (Madonna to Prado)$1,500,000 3% $45,000 97% $1,455,000 SLR BIKEWAYS - FEE ONLY PROJECTS, SUBTOTALS $2,000,000 $185,000 $1,815,000 UTILITIES Install new 24" HDPE Sewer Line $1,078,700 50% $539,350 50% $539,350 COST TOTALS $54,201,038 $22,828,662 $31,372,377 "cfd_costs" Source: City Staff Regional Infrastructure database, dated October 9, 2017, with agreed-on costs for the Prado Road/US 101 Interchange (Item #4) and the Bob Jones Trail (Item #21). Developer/CFD Share City/Regional Share Prepared by EPS 3/11/2019 P:\182000\181049 San Luis Ranch CFD\Models\181049 model 4.xlsx 11 Packet Pg. 268 Item 13 Economic & Planning Systems, Inc. (EPS) 12 P:\182000\181049 San Luis Ranch CFD\Reports\181049 hr1Final 03-2019.docx 4. CFD BOND AUTHORIZATION, ANNUAL SPECIAL TAXES, AND ESTIMATED CFD BONDS This chapter will discuss the maximum CFD bond authorization and maximum annual special taxes as proposed by the developer for each taxable land use type. Special taxes of the CFD will be one of the funding sources for construction of authorized facilities. The City and the developer entered into a Development Agreement (DA), identifying funding options for authorized facilities, which included CFD special taxes and CFD bond proceeds. CFD Bond Authorization and Funding Strategy The DA authorized the use of the CFD to fund authorized facilities of the CFD and outlined a basic structure for the CFD. The DA identified the following sources of potential funding for authorized facilities of the CFD:  CFD bond proceeds.  CFD pay-as-you-go revenues.  Owner equity/private financing. Each funding source will be discussed below. Maximum CFD Bond Authorization The CFD is authorized to issue up to $25 million in bonds. The property owner is anticipated to ask the City to sell the first series of bonds as soon as possible following formation of the CFD. Depending on market conditions and the structure of the first series of CFD bonds, a second series of CFD bonds may be issued following the first CFD bond sale. CFD Pay-As-You-Go Special taxes levied and not needed to fund CFD bond debt service or City administration of the CFD may be used for pay-as-you-go expenditures for authorized CFD facilities not reimbursed with CFD bond proceeds. As memorialized in the DA, the City has agreed to provide pay-as-you- go funding to the developer for the first 20 years of the CFD. Owner Equity/Private Financing To the extent there are any shortfalls in the funding sources for authorized facilities, owner equity or private financing will be used to fund construction of such facilities. Minimum and Maximum Annual Special Tax A minimum annual special tax and maximum annual special tax is assigned to all taxable parcels at formation of the CFD. The minimum annual special tax is assigned to taxable residential parcels at formation based on land use densities (LDR, MDR, and HDR). The developer has Packet Pg. 269 Item 13 San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch) Hearing Report March 2019 Economic & Planning Systems, Inc. (EPS) 13 P:\182000\181049 San Luis Ranch CFD\Reports\181049 hr1Final 03-2019.docx requested a special tax structure that assigns a maximum annual special tax on residential units based on building square footage ranges once the building permit is issued for such uses. The special tax assignments are discussed below. Minimum Annual Special Tax The minimum annual special tax is assigned to all taxable parcels at formation of the CFD. The sum of the minimum annual special tax for all taxable parcels is the minimum amount of special tax that can be levied against taxable parcels at CFD formation. Each single-family land use category is assigned a minimum annual special tax per parcel for LDR and MDR uses. LDR uses are assigned a minimum annual special tax per unit of $2,630. MDR uses are assigned a minimum annual special tax per unit of $2,150. Table 3 (Attachment 1 of the RMA) shows the assignment of the minimum annual special tax to taxable parcels. The minimum annual special tax for HDR uses on Lot 1 is determined by multiplying a minimum annual special tax of $32,629 per acre by the parcel acreage of 6.62 to derive an assigned minimum annual special tax of $216,004 for Lot 1. Lot 2 is assigned a minimum annual special tax of $0, as it is planned for development of for-rent residential product. If Lot 2 is developed as for-sale product instead of Lot 1, the minimum annual special tax of $216,004 assigned to Lot 1 is intended to be transferred to Lot 2 under the RMA, and Lot 1 will be assigned a minimum annual special tax of zero. If both Lot 1 and Lot 2 are developed with for-sale residential uses, Lot 2 for-sale units also will be subject to the assignment of the minimum annual special tax and maximum annual special tax. In this instance, for-sale units on Lot 2 will be assigned the special taxes using Table 4 (Attachment 2 of the RMA) and the provisions of Sections 4 and 5 of the RMA. Maximum Annual Special Tax The maximum annual special tax is assigned to taxable parcels upon issuance of the building permit for residential uses. Each tax category (LDR, MDR, and HDR) is assigned two maximum annual special tax rates based on the range of building square footage sizes of homes being built (see Table 3; Attachment 1 of the RMA). LDR parcels are assigned a maximum annual special tax that is equal to the assigned minimum annual special tax in the building permit for the LDR parcel is for a structure of less than 1,850 building square feet ($2,630). If the home size is 1,850 building square feet or greater, the maximum annual special tax is $3,110. Table 3 shows that 94 lots are planned for smaller product and 99 lots are planned for larger product. These assumptions are used to derive the maximum annual special tax of $555,110 for LDR parcels at buildout. The mix of residential unit sizes may vary from the numbers shown in Table 3, resulting in a lower or higher total maximum annual special tax for LDR parcels at buildout. Packet Pg. 270 Item 13 Table 3 City of San Luis Obispo CFD No. 2019-1 (San Luis Ranch) Assignment of the Special Taxes to Original Parcels - Base Year Maximum Annual Minimum Minimum Special Tax Annual Annual For Developed Maximum Annual Original Special Tax Special Tax Parcels Special Tax Parcel Tax Categories Acres Units per Unit/Acre per Tax Category per Unit/Acre per Tax Category [1] [2][1] 067-121-022 Residential Uses per Unit per Unit Low Density Residential (LDR)15.51 1,850 sq. ft. and greater 99 $2,630 $260,370 $3,110 $307,890 Less than 1,850 sq. ft.94 $2,630 $247,220 $2,630 $247,220 Workforce/Affordable Units [3]5 $0 $0 $0 LDR Subtotal 198 $507,590 $555,110 Medium Density Residential (MDR)5.14 1,600 sq. ft. and greater 41 $2,150 $88,150 $2,630 $107,830 Less than 1,600 sq. ft.29 $2,150 $62,350 $2,150 $62,350 Workforce/Affordable Units [3]13 $0 $0 $0 MDR Subtotal 83 $150,500 $170,180 High Density Residential (HDR) - For Sale [2] Multifamily For-Sale 6.62 per Unit per Unit 1,200 sq. ft. and greater 67 $0 $0 $1,910 $127,970 Less than 1,200 sq. ft.68 $0 $0 $1,600 $108,800 Workforce/Affordable Units [3]30 $0 $0 $0 per Acre per Acre Lot 1 - Undeveloped Parcel [4]$32,629 $216,004 $0 $0 Lot 2 For Rent Multifamily 4.35 134 $0 $0 $0 HDR Subtotal 10.97 299 $216,004 $236,770 Residential Use Totals 31.62 580 $874,094 $962,060 Nonresidential Uses per Acre per Acre Commercial Lot 7 Nonresidential Use 11.44 $0 $0 $0 $0 Lot 8 Nonresidential Use 3.33 $0 $0 $0 $0 Lot 9 Nonresidential Use 3.81 $0 $0 $0 $0 Nonresidential Use Totals 18.58 Public Uses Parks 3.19 $0 $0 $0 $0 Open Space 7.81 $0 $0 $0 $0 Agricultural 52.32 $0 $0 $0 $0 Regional Road 9.00 $0 $0 $0 $0 Local Road 8.84 $0 $0 $0 $0 Public Use Totals 81.16 $0 Totals 131.36 $962,060 "att1" [1] The Minimum Annual Special Tax and Maximum Annual Special Tax per Unit/Acre are increased by 2% annually following the Base Year. [2] The Minimum Annual Special Tax for Final Map Parcels is equal to the Maximum Annual Special Tax assigned to a Tax Category and Building Square Footage range. [3] If there are a greater number of Workforce/Affordable Units Building Permits issued within a Tax Category (LDR, MDR, or HDR), the Administrator shall require the full Prepayment of the Maximum Annual Special Tax for each such Unit constructed. [4] Lot 1 is assigned an Undeveloped Parcel Minimum Annual Special Tax of $32,629 per Taxable Acre at formation of the CFD. Lot Numbers 11 to 208 Lot Numbers 220 to 302 Minimum Annual Special Tax Maximum Annual Special Tax Lot 1 Prepared by EPS 3/11/2019 P:\182000\181049 San Luis Ranch CFD\Models\181049 model 4.xlsx 14 Packet Pg. 271 Item 13 Table 4 City of San Luis Obispo CFD No. 2019-1 (San Luis Ranch) Assignment of the Special Tax by Tax Category - Base Year Minimum Maximum Annual Annual Special Tax Special Tax Tax Category per Unit per Unit/Acre [1][1] Residential Uses per Unit per Unit Low Density Residential (LDR) 1,850 sq. ft. and greater $2,630 $3,110 Less than 1,850 sq. ft. $2,630 $2,630 Workforce/Affordable Units $0 $0 Medium Density Residential (MDR) 1,600 sq. ft. and greater $2,150 $2,630 Less than 1,600 sq. ft. $2,150 $2,150 Workforce/Affordable Units $0 $0 High Density Residential (HDR) - For Sale [2] For-Sale Multifamily 1,200 sq. ft. and greater $0 $1,910 Less than 1,200 sq. ft. $0 $1,600 Less than 600 sq. ft. $1,199 $1,199 Workforce/Affordable Units $0 $0 For-Rent Multifamily $0 $0 Nonresidential Uses per Acre per Acre Commercial $0 $0 Office $0 $0 Hotel $0 $0 "att_2" [1] The Minimum Annual Special Tax and Maximum Annual Special Tax per Unit/Acre are increased by 2% annually following the Base Year. Prepared by EPS 3/11/2019 P:\182000\181049 San Luis Ranch CFD\Models\181049 model 4.xlsx 15 Packet Pg. 272 Item 13 San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch) Hearing Report March 2019 Economic & Planning Systems, Inc. (EPS) 16 P:\182000\181049 San Luis Ranch CFD\Reports\181049 hr1Final 03-2019.docx MDR parcels are assigned a maximum annual special tax that is equal to the assigned minimum annual special tax in the building permit for the MDR parcel is for a structure of less than 1,600 building square feet ($2,150). If the home size is 1,600 building square feet or greater, the maximum annual special tax is $2,630. These assumptions are used to derive the maximum annual special tax of $170,180 for MDR parcels at buildout. The mix of residential unit sizes may vary from the numbers shown in Table 3, resulting in a lower or higher total maximum annual special tax for MDR parcels at buildout. HDR parcels are assigned a maximum annual special tax of $1,600 for a unit of less than 1,200 building square feet. If the unit size is 1,200 building square feet or greater, the maximum annual special tax is $1,910. These maximum annual special tax rates apply to the 165 for-sale units the developer has planned for Lot 1. The developer may build more than 165 units of for-sale product, which may include “micro” units of less than 600 building square feet. Table 4 (Attachment 2 of the RMA) identified a maximum annual special tax of $1,199 per unit for such micro HDR units. These units potentially could be constructed on Lot 2. If they are developed as for-sale units on Lot 2, they will be subject to the special tax. Estimated CFD Bond Issuance and Net Bond Proceeds The DA specified that the City would allow for the formation of a CFD that could generate approximately $14 million in net construction proceeds, based on the assigned special tax rates to all taxable parcels. Table 3 shows a maximum annual special tax of $962,060 at buildout using the assumed number of structure sizes by tax category. This amount was derived as a “target” buildout amount that would provide sufficient special tax coverage to net approximately $14 million in net construction proceeds from the sale of CFD bonds. It is estimated that the bond market will require the issuance of two series of bonds because an initial bond issuance could be structured based on minimum assumptions of available special tax revenues, with a second issuance structured on the available total special tax revenues at or near buildout of taxable parcels in the CFD. For illustration purposes, EPS has developed an estimate of total CFD bonds and net construction proceeds, assuming the maximum annual special tax revenues, as shown in Table 3, are available in the initial year to fund debt service and other associated costs involved in the issuance of a single series of CFD bonds. Table 5 shows the assumed maximum annual special tax of $962,060 from Table 3 and the resulting total CFD bonds and net construction proceeds under three interest rate scenarios. Under these assumptions, total bonds range from approximately $16.8 million to $18.4 million in total CFD bonds, with approximate net construction proceeds ranging from $14.2 million to $16.1 million. Market conditions at the time of each bond issuance and the ultimate maximum annual special tax derived from all units (based on building square foot size) will determine the total amount of CFD bonds and net construction proceeds that will be available to fund authorized facilities and costs of the CFD. Packet Pg. 273 Item 13 Table 5City of San Luis Obispo CFD No. 2019-1 (San Luis Ranch)Estimated CFD Bonds and Annual Costs at Build Out (Base Year Dollars)ItemAssumptionsScenario 1 Scenario 2 Scenario 3Assumptions [1]Interest Rate4.50%5.00%5.50%Term30 years30 years 30 yearsAnnual Tax Escalation [2]2.00%2.00%2.00%Capitalized Interest121212Estimated Maximum Annual Special TaxEstimated Maximum Annual Special Tax$962,060$962,060 $962,060Less CFD Administration Costs3.00%($28,862) ($28,862) ($28,862)Less CFD Special Tax Coverage of Bonds10.00%($96,206) ($96,206) ($96,206)Adjusted Maximum Annual Special Tax$836,992 $836,992 $836,992Estimated CFD Bonds and CFD Bond ProceedsAdjusted Maximum Annual Special Tax$836,992 $836,992 $836,992Estimated Total CFD Bonds$15,700,000 $14,800,000 $14,000,000Adjustment of CFD Bonds for Escalating Debt Service [2]20.00%$3,140,000 $2,960,000 $2,800,000Estimated Total Bond Issuance $18,840,000 $17,760,000 $16,800,000Less Capitalized Interest ($706,500) ($740,000) ($770,000)Less Bond Reserve Fund ($1,570,000) ($1,480,000) ($1,400,000)Less Cost of Issuance 3.0% ($471,000) ($444,000) ($420,000)Total Estimated Bond Proceeds $16,092,500 $15,096,000 $14,210,000"bond"Source: EPS. term could be 25 to 30 years or more. This analysis is based on an assumed 30 years. [2] With an annual special tax escalation factor of 2%, EPS assumes approximately 20% more total bonds may be issued.Estimated Bonds and Bond Proceeds [1] Estimated bond sizing based on conservative assumptions. The interest rate will be determined at the time of bond sale; the bond Prepared by EPS 3/11/2019P:\182000\181049 San Luis Ranch CFD\Models\181049 model 4.xlsx17 Packet Pg. 274Item 13 San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch) Hearing Report March 2019 Economic & Planning Systems, Inc. (EPS) 18 P:\182000\181049 San Luis Ranch CFD\Reports\181049 hr1Final 03-2019.docx Maximum annual special taxes are increased 2 percent annually. This escalation of the special tax revenue will add to the bonding capacity of the CFD if bonds are issued beyond the initial years. Overall Tax Burden for Single-Family Residential City policies stipulate that the overall tax burden after formation of a CFD not exceed 1.95 percent of the estimated sales price of a single-family residential home. Estimated sales prices of residential homes were provided by the developer. Table 6 shows the estimated total effective tax rate for prototypical uses in the CFD. The test includes all current ad valorem property taxes and the CFD special tax. Three different residential products are shown in Table 6:  LDR.  MDR.  HDR. Ad valorem property tax rates were derived from copies of the Fiscal Year (FY) 2018-19 property tax bills. The overall tax burden for single-family residential homes proposed for the CFD ranges from 1.47 percent to 1.55 percent. The overall tax burden does not include Homeowner Association dues that may be applicable. Packet Pg. 275 Item 13 Table 6City of San Luis Obispo CFD No. 2019-1 (San Luis Ranch)Overall Tax Burden for Taxable ParcelsItem Low High Low High Low HighEstimated Home Price $381,818 $418,182 $469,937 $531,950 $602,365 $693,770Homeowner's Exemption ($7,000)($7,000)($7,000)($7,000)($7,000)($7,000)Assessed Value$374,818 $411,182 $462,937 $524,950 $595,365 $686,770Ad Valorem Property Taxes [1]Proposition 13 Property Tax 1.00000% $3,748 $4,112 $4,629 $5,250 $5,954 $6,868State Water Project 0.00400% $15 $16 $19 $21 $24 $27SL Coastal 2014 GO Bond 0.04900% $184 $201 $227 $257 $292 $337Cuesta CCD 2014 GO Bond 0.01925%$72$79$89$101$115$132Total Ad Valorem Property Taxes 1.07225% $4,019 $4,409 $4,964 $5,629 $6,384 $7,364Direct ChargesMax Tax CFD No. 2019-1 (San Luis Ranch) $1,600 $1,910 $2,150 $2,630 $2,630 $3,110Special taxes or Assessments for Services [2] $0 $0 $0 $0 $0 $0Total Ad Valorem Taxes and Direct Charges $5,619 $6,319 $7,114 $8,259 $9,014 $10,474Total Tax Burden 1.47% 1.51% 1.51% 1.55% 1.50% 1.51%"tax_burden"[1] Tax rates as shown on FY 2018-19 property tax bill for master parcel.[2] Maintenance costs associated with the development will be funded by a HOA. The HOA dues are not considered as part of the overall tax burden for CFD parcels but should be considered by home buyers when considering the overall annual cost burdens.MDRSFRHDRPrepared by EPS 3/11/2019P:\182000\181049 San Luis Ranch CFD\Models\181049 model 4.xlsx19 Packet Pg. 276Item 13 Economic & Planning Systems, Inc. (EPS) 20 P:\182000\181049 San Luis Ranch CFD\Reports\181049 hr1Final 03-2019.docx 5. STRUCTURE OF THE CFD Description of the CFD The CFD is being formed to fund a portion of the required infrastructure and other facilities, both local and regional, that will serve the Project. The attached exhibits are documents contained in the Resolution of Formation (ROF) of the CFD. Exhibit A is the CFD RMA. Exhibit B is the List of Authorized Facilities. The CFD Funding Program The CFD will be authorized to levy and collect the special tax to pay all annual costs of the CFD, including funding for authorized facilities not funded through CFD bond proceeds, which is anticipated to be paid on a pay-as-you-go basis, during the first 20 years of the special tax levy. Determining the Maximum Annual Special Tax The minimum annual special tax and the maximum annual special tax rates for the various tax categories were developed to provide sufficient funding for a targeted total amount of CFD bonds, while adhering to target overall tax burdens of approximately 1.5 percent of the estimated sales prices for residential units in the CFD. CFD funding public infrastructure for residential developments is new to the City and the housing markets in the region. The overall tax burden targets for the CFD were purposely adhered to with consideration to these factors. Table 3 shows the minimum annual special tax and maximum annual special tax rates by tax category for the special tax. Maximum annual special tax rates are further defined by tax category based on the building square footage of the homes to be built. Base Year The base year is FY 2018-19. A base year is defined in the RMA as a means of defining the special tax base in a given fiscal year that is allowed to increase by a given factor over a period of time. Annual Tax Escalation Factor The administrator will increase the minimum annual special tax and maximum annual special tax by the tax escalation factor in all fiscal years following the base year. The tax escalation factor is 2 percent. Duration of the Special Tax The special tax may be levied and collected until FY 2062-63. The special tax may be collected for as long as it is needed to pay annual costs of the CFD. Packet Pg. 277 Item 13 San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch) Hearing Report March 2019 Economic & Planning Systems, Inc. (EPS) 21 P:\182000\181049 San Luis Ranch CFD\Reports\181049 hr1Final 03-2019.docx Definition of Annual Costs The special taxes established under the RMA represent the maximum exposure to an annual special tax levy for a given parcel of land. The actual amount of the levy is derived through determining the “annual costs” of the CFD. The RMA identifies the annual costs components as follows: a. Administrative expenses for such fiscal year. b. Debt service to be paid from special taxes during the bond year commencing during such fiscal year. c. The amount needed to pay other periodic costs on the bonds, including credit enhancement and any rebate payments on the bonds. d. The amount needed to replenish the reserve fund for the bonds to the level required under the bond indenture, to the extent not included in a computation of annual costs in a previous fiscal year. e. The amount needed to (1) cure any delinquencies in the payment of principal or interest on bonds, which have occurred in the prior fiscal year, to the extent not otherwise included in a computation of annual costs in the current or any previous fiscal year, and (2) to fund any foreseeable deficiency of the amount to be available for the payment of principal or interest on bonds, which are expected to occur in such fiscal year, to the extent not included in a computation of annual costs in the current or any previous fiscal year. f. The amount needed to (1) cure any delinquencies in the payment of the special tax in the prior fiscal year, to the extent not otherwise included in a computation of annual costs in the current or any previous fiscal year, and (2) to fund any foreseeable deficiency in the payment of the special tax for that fiscal year which is expected to occur in such fiscal year, to the extent not included in a computation of annual costs in the current or any previous fiscal year. g. Costs of acquisition, construction, and improvements of authorized facilities to be funded on a pay-as-you-go basis, in amounts determined by the administrator. h. Less any capitalized interest and any credits provided under a bond indenture. i. Less any available earnings on the reserve fund, special tax funds, available capitalized interest, or any other available revenues of the CFD or the City that may be used to fund annual costs, to the extent determined by the administrator. Administrative Expenses Administrative expenses of the CFD are the reasonable costs of administering the CFD each fiscal year. Examples of administrative expenses are costs of computing facilities special taxes and preparing annual facilities special taxes collection schedules; costs of collecting the facilities special taxes; costs of remitting the facilities special taxes to the trustee; costs of the trustee (including its legal counsel) in the discharge of the duties required of it under the bond indenture; costs to the City, CFD, or their designees of complying with arbitrage rebate Packet Pg. 278 Item 13 San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch) Hearing Report March 2019 Economic & Planning Systems, Inc. (EPS) 22 P:\182000\181049 San Luis Ranch CFD\Reports\181049 hr1Final 03-2019.docx requirements; costs complying with the City, CFD, or obligated persons disclosure requirements; costs associated with preparing special taxes disclosure statements; costs incurred in responding to public inquiries regarding the facilities special taxes; costs related to any appeal of the facilities special taxes; and amounts advanced or estimated to be advanced by the City for any other administrative purposes, including attorney’s fees and other costs related to collection of the facilities special taxes and commencing and pursuing to completion any foreclosure of delinquent special taxes. Debt Service Debt service would be that portion of the special tax levy required to pay a parcel’s share of the debt service. The proposed financing structure of the CFD anticipates that up to two series of CFD bonds may be issued. Periodic Costs of Bonds A portion of the annual special tax levy that may be needed to pay other periodic costs on the bonds, including credit enhancement and any rebate payments on the bonds. Amount Needed to Replenish Reserve Fund In the event the reserve fund is drawn on to pay debt service or expenses of the CFD, a facilities special tax may be levied to replenish the bond reserve fund to required funding levels. A facilities special tax should be levied once for each draw on the bond reserve fund, to the extent the bond reserve fund can be brought back to required funding levels with just one such levy. If for any reason the bond reserve fund remains underfunded in a fiscal year following the fiscal year in which facilities special taxes were levied to replenish it, a second facilities special tax levy should not be required to replenish the bond reserve fund. Amounts for Unpaid Principal and Interest The RMA allows for the levy of a special tax to fund costs of unpaid principal and interest from a previous fiscal year or to fund anticipated principal and interest that may occur in the current fiscal year for which special taxes are being levied. To the extent an amount is levied for a past delinquency, a second special tax levy should not be levied for a principal and interest payment delinquency that has already been accounted for in a previous year special tax levy. Amounts for Unpaid Facilities Special Taxes and Anticipated Delinquencies The RMA allows for the levy of a special tax to fund costs of unpaid special taxes from a previous fiscal year or to fund anticipated special tax delinquencies that may occur in the current fiscal year for which special taxes are being levied. To the extent an amount is levied for a past delinquency, a second special tax levy should not be levied for a special tax delinquency that has already been accounted for in a previous year special tax levy. Generally, special taxes eventually are brought current, either through payment by a property owner or through judicial foreclosure proceedings. When special tax installments are paid current, the amount needed to fund debt service and CFD administration will have been collected Packet Pg. 279 Item 13 San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch) Hearing Report March 2019 Economic & Planning Systems, Inc. (EPS) 23 P:\182000\181049 San Luis Ranch CFD\Reports\181049 hr1Final 03-2019.docx for previous years, including additional amounts that were needed only to cover delinquencies that are now current. As such, these additional amounts should be considered as being available by the CFD to fund annual costs in the following fiscal year. Authorized Facilities Funded on a Pay-As-You-Go Basis During the first 20 years, the DA entitles the developer to use pay-as-you-go revenues to fund authorized facilities. As such, special tax revenues not needed to pay debt service during the first 20 years of the special tax levy may be used to fund authorized CFD costs not otherwise funded with CFD bond proceeds. Earnings on Reserve Funds, Special Tax Funds, and Other Funds All interest earnings on bond reserve funds, facilities special tax funds, or other funds should be used to offset annual costs when determining the amount required for the annual facilities special tax levy. To the extent it is available, capitalized interest funding by the CFD bonds will be used to fund debt service initially. Assignment of Maximum Annual Special Tax Sections 4 and 5 of the RMA describe in detail the precise method for assigning the minimum annual special tax and maximum annual special tax to parcels in the CFD. The RMA assigns a total minimum annual special tax and maximum annual special tax to taxable parcels based on parcel configurations at the time of formation of the CFD and then as subdivision maps are recorded. A final map has been approved by the City Council that delineates all single-family residential lots and shows larger lots designated for HDR and nonresidential uses. This map has not been recorded at this time. Original Parcels Original parcels are assigned a minimum annual special tax and maximum annual special tax using Attachment 1 of the RMA. Attachment 1 (Table 3 of this document) shows the total minimum annual special tax and maximum annual special tax per unit or per acre for each of the original parcels. Successor Parcels Successor parcels are created when original parcels are subdivided by the recording of large lot subdivision maps or other parcel reconfigurations, such as through a lot line adjustment, and further subdivided into buildable residential lots. The RMA provides specific detail and definitions used in allocating the minimum annual special tax and maximum annual special tax to parcels as parcel configurations change. Attachment 1 of the RMA (Table 3 of this document) shows the minimum annual special tax and maximum annual special tax for lots planned for each tax category. Attachment 1 also shows the number of planned units in each tax category that are assigned a maximum annual Packet Pg. 280 Item 13 San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch) Hearing Report March 2019 Economic & Planning Systems, Inc. (EPS) 24 P:\182000\181049 San Luis Ranch CFD\Reports\181049 hr1Final 03-2019.docx special tax based on building square footage of a home after issuance of the building permit. Each tax category assigns two different maximum annual special tax rates for parcels based on the home sizes. Each tax category also shows the number of planned units that will be designated as workforce/affordable units. These parcels or residential units are to be exempt from the special tax, but only up to the number of parcels or residential units shown for each tax category. If fewer units are realized at recordation of a final map defining buildable lots than shown in Table 3, the minimum annual special tax and maximum annual special tax for the tax category, the minimum annual special tax and maximum annual special tax rates are increased proportionately until the special tax revenues from all taxable parcels is equal to the amounts shown for the tax category in Table 3. If more residential units are created by recording of a final map than shown in Table 3, the minimum annual special tax and maximum annual special tax per unit is that amount shown in Table 3. The RMA is structured to ensure that the minimum annual special tax for a tax category is not reduced over time by anticipated development of each tax category. The maximum annual special tax revenue ultimately will be determined by the size of the housing units constructed on taxable parcels. Developed Parcels Parcels become classified as “developed parcels” upon issuance of the building permit for a residential unit. The maximum annual special tax is assigned to a single-family parcel or HDR unit based on the building square footage range shown in the initial building permit. The RMA does not consider building permits for future additions to a home when assigning the maximum annual special tax. Because it is uncertain how many homes will be constructed in each house size range under each tax category, the total amount of maximum annual special tax available from all taxable parcels will be unknown until all planned residential units have had building permits issued for construction. Workforce/Affordable Units The RMA recognizes workforce/affordable housing units to be built in the CFD. These units are considered tax exempt. Each tax category (LDR, MDR, and HDR) has several such units assigned to the category. If more such units are constructed in a tax category, those units constructed above the designated number of workforce/affordable units will be considered taxable and assigned a maximum annual special tax based on the size of the unit. Nonresidential Parcels Rezoned to Residential Uses Nonresidential parcels shown in Table 3 are tax exempt at formation of the CFD. If these parcels are rezoned to residential uses, the minimum annual special tax and the maximum annual special tax will be assigned to taxable residential uses using the provisions of Sections 4 and 5 of the RMA. Packet Pg. 281 Item 13 San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch) Hearing Report March 2019 Economic & Planning Systems, Inc. (EPS) 25 P:\182000\181049 San Luis Ranch CFD\Reports\181049 hr1Final 03-2019.docx Transfer of the Assigned Special Tax The City may, in its sole discretion, allow for a transfer of the minimum annual special tax and the maximum annual special tax from one large lot parcel to another. Such a transfer will be allowed only if (1) all adjustments are agreed to in writing by the affected property owners and the Finance Director and (2) there is no reduction in the CFD minimum annual special tax and maximum annual tax revenues as a result of the transfer. Provisions for such a transfer are discussed in Section 4.f of the RMA. Conversion of a Tax-Exempt Parcel to a Taxable Parcel If a tax-exempt parcel is not needed for public use or other nontaxable use and is converted to a taxable use or transferred to a private owner, it will become subject to the special tax. The maximum annual special tax for the newly assigned tax category for such a parcel is determined using the provisions of Sections 4 and 5 of the RMA. Taxable Parcels Acquired by a Public Agency A taxable parcel that is acquired by a public agency after the CFD is formed will remain subject to the applicable special tax unless the special tax obligation is satisfied pursuant to Section 53317.5 of the Government Code. An exception to this may be made if a public parcel, such as a school site, is relocated to a taxable parcel, in which case, the previously tax-exempt parcel of comparable acreage becomes a taxable parcel and the maximum annual special tax from the previously taxable parcel is transferred to the new taxable parcel. This trading of a parcel from a taxable parcel to a public parcel will be permitted to the extent there is no net loss in maximum CFD special tax revenue and the transfer is agreed to by the owners of the parcels involved in the transfer and the Finance Director. Determination of Parcels Subject to Special Tax By June 30 of each fiscal year, using the definitions in Section 2 of the RMA, the parcel records of the assessor’s secured tax roll as of January 1, and other City development approval records, the administrator will cause: 1. Each parcel to be classified as a taxable parcel or a tax-exempt parcel. 2. Each parcel to be classified as a developed parcel, a final map parcel, or an undeveloped parcel. Setting the Special Tax Levy for Taxable Parcels To determine the annual levy, the administrator will use the process presented in Section 7 of the RMA. In general, the provisions of Section 7 describe the following procedures to set the annual facilities special tax levy for each taxable parcel: Packet Pg. 282 Item 13 San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch) Hearing Report March 2019 Economic & Planning Systems, Inc. (EPS) 26 P:\182000\181049 San Luis Ranch CFD\Reports\181049 hr1Final 03-2019.docx  First, the administrator must compute the annual costs using the definitions in Section 2 of the RMA.  Next, the administrator will levy the special tax proportionately on all developed parcels, up to the amount of annual costs or 100 percent of the maximum annual special tax for developed property, whichever is less.  If additional revenue is needed for annual costs, the administrator will levy the special tax proportionately on all final map parcels, such that when added to the levy on developed parcels, is up to the amount of annual costs or up to 100 percent of the maximum special tax for final map parcels, whichever is less.  If additional revenue is needed for annual costs, the administrator will levy the special tax proportionately on all undeveloped parcels, such that when added to the levies on parcels described above, is up to the amount of annual costs or up to 100 percent of the maximum special tax for undeveloped parcels, whichever is less. Once the special tax levy is determined for a fiscal year, the administrator creates the tax schedule to deliver to the County Auditor-Controller. Prepayment of the Special Tax Obligation For residential uses, a property owner may at any time prepay 50 percent, but not more or less than 50 percent of the maximum annual facilities special tax. Full prepayment is permissible for nonresidential use parcels. In addition to the above, full or partial prepayment is permitted only under the following conditions:  The landowner prepaying the special tax on a parcel has paid any delinquent special tax and penalties on that parcel before prepayment.  Following prepayment, amounts in the reserve fund are equal to or greater than the reserve fund requirement.  The City determines the prepayment will not jeopardize its ability to make timely payments of debt service and maintain a 110 percent annual debt service coverage based on maximum annual special tax revenues in all years in which issued bonds will be outstanding. The full and partial prepayment calculations are described in detail in Section 7 of the RMA. Partial prepayments also must account for collection of any development impact fee deferral for a given parcel. Interpretation, Application, and Appeal of Special Tax Formula and Procedures Any taxpayer who feels the amount of the special tax assigned to a parcel is in error may file a notice with the administrator appealing the levy of the special tax. The administrator then will promptly review the appeal and, if necessary, meet with the applicant. If the administrator Packet Pg. 283 Item 13 San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch) Hearing Report March 2019 Economic & Planning Systems, Inc. (EPS) 27 P:\182000\181049 San Luis Ranch CFD\Reports\181049 hr1Final 03-2019.docx verifies the tax should be modified or changed, the special tax levy will be corrected and, if applicable in any case, a refund will be granted. Interpretations may be made by resolution of the City Council for purposes of clarifying any vagueness or ambiguity as it relates to the special tax rate, the method of apportionment, the classification of properties, or any definition applicable to the CFD. Without City Council approval, the administrator may make minor, non-substantive administrative and technical changes to the provisions of the RMA that do not materially affect the rate, the method of apportionment, or the manner of collection of the special tax for purposes of the administrative efficiency or convenience or to comply with new applicable federal, state, or local law. Manner of Collection The special tax will be collected in the same manner and at the same time as ad valorem property taxes. As specified in Section 9 of the RMA, the administrator or their designee may directly bill the special tax and may collect the special tax at a different time, such as on a monthly or other periodic basis, or in a different manner, if necessary, to meet the City’s financial obligations. Packet Pg. 284 Item 13 Exhibit Exhibit A: B: EXHIBIT Amende Apportio Collectio List of A Services TS: ed Rate, onment, on of Spe Authorize s Method and Man ecial Tax ed Facilit of nner of x ies and Packet Pg. 285 Item 13 Ammended Man E Rate, Me ner of C EXHIBIT ethod of ollection A: f Apportio of Spec onment, cial Tax and Packet Pg. 286 Item 13 Economic & Planning Systems, Inc. (EPS) A-1 F:\Active Projects\182000\181049 San Luis Ranch CFD\Rate and Method\181049 rm9.docx EXHIBIT A City of San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch) San Luis Obispo County, California AMENDED RATE, METHOD OF APPORTIONMENT, AND MANNER OF COLLECTION OF SPECIAL TAX 1. Basis of Special Tax Levy A Special Tax authorized under the Mello-Roos Community Facilities Act of 1982 (Act) applicable to the land in the City of San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch) (CFD) of the City of San Luis Obispo (City) shall be levied and collected according to the tax liability determined by the City through the application of the appropriate amount or rate, as described below. 2. Definitions “Acre” or “Acreage” means the land area of an Assessor’s Parcel as shown on an Assessor’s Parcel Map, or if the land area is not shown on an Assessor’s Parcel Map, the land area shown on the applicable final map or other Development Plan. “Act” means the Mello-Roos Community Facilities Act of 1982, as amended, Sections 53311 and following of the California Government Code. “Administrative Expenses” means the actual or reasonably estimated costs related to the administration of the CFD, including, but not limited to, these: a. Costs of computing Special Taxes and preparing annual Special Tax collection schedules (whether by the City or any designee thereof or both). b. Costs of collecting the Special Taxes (whether by the County, the City, or otherwise). c. Costs of remitting the Special Taxes to the Trustee. d. Costs of the Trustee (including its legal counsel) in the discharge of the duties required of it under the Bond Indenture. e. Costs to the City, CFD, or any designee thereof of complying with arbitrage rebate requirements. f. Costs to the City, CFD, or any designee thereof of complying with City, CFD, or obligated persons disclosure requirements. g. Costs associated with preparing Special Tax disclosure statements. Packet Pg. 287 Item 13 Rate, Method of Apportionment, and Manner of Collection of Special Tax Exhibit A March 7, 2019 Economic & Planning Systems, Inc. (EPS) A-2 F:\Active Projects\182000\181049 San Luis Ranch CFD\Rate and Method\181049 rm9.docx h. Costs incurred in responding to public inquiries regarding the Special Taxes. i. Costs to the City, CFD, or designee thereof related to any appeal of the Special Taxes. j. Costs associated with the release of funds from an escrow account, if any. k. Costs to the City for the issuance of Bonds authorized by the CFD that are not recovered through the Bond sale proceeds. l. Amounts estimated to be advanced or already advanced by the City for any other administrative purposes, including attorney’s fees and other costs related to collection of the Special Taxes and commencing and pursuing to completion any foreclosure of delinquent Special Taxes. “Administrator” means the City Manager of the City, or his or her designee. “Annual Costs” means, for any Fiscal Year, the total of these: a. Administrative Expenses for such Fiscal Year. b. Debt Service to be paid from Special Taxes during the Bond Year commencing during such Fiscal Year. c. The amount needed to pay other periodic costs on the Bonds, including but not limited to credit enhancement and any rebate payments on the Bonds. d. The amount needed to replenish the reserve fund for the Bonds to the level required under the Bond Indenture, to the extent not included in a computation of Annual Costs in a previous Fiscal Year. e. The amount needed to (1) cure any delinquencies in the payment of principal or interest on Bonds, which have occurred in the prior Fiscal Year, to the extent not otherwise included in a computation of Annual Costs in the current or any previous Fiscal Year, and (2) to fund any foreseeable deficiency of the amount to be available for the payment of principal or interest on Bonds, which are expected to occur in such Fiscal Year, to the extent not included in a computation of Annual Costs in the current or any previous Fiscal Year. f. The amount needed to (1) cure any delinquencies in the payment of the Special Tax in the prior Fiscal Year, to the extent not otherwise included in a computation of Annual Costs in the current or any previous Fiscal Year, and (2) to fund any foreseeable deficiency in the payment of the Special Tax for that Fiscal Year which is expected to occur in such Fiscal Year, to the extent not included in a computation of Annual Costs in the current or any previous Fiscal Year. g. Costs of acquisition, construction, and improvements of Authorized Facilities to be funded on a Pay-As-You-Go Basis, in amounts determined by the Administrator. h. Less any Capitalized Interest and any credits provided under a Bond Indenture. Packet Pg. 288 Item 13 Rate, Method of Apportionment, and Manner of Collection of Special Tax Exhibit A March 7, 2019 Economic & Planning Systems, Inc. (EPS) A-3 F:\Active Projects\182000\181049 San Luis Ranch CFD\Rate and Method\181049 rm9.docx i. Less any available earnings on the reserve fund, Special Tax funds, available capitalized interest or any other available revenues of the CFD or the City that may be used to fund Annual Costs, to the extent determined by the Administrator. “Anticipated Construction Proceeds” means the amount anticipated to be available through the CFD for acquiring or constructing Authorized Facilities, which is equal to $14.0 million at formation of the CFD. This amount is increased on July 1 of the current Fiscal Year for the prior calendar year by the average increase in the ENR-CCI. “Assessor’s Parcel” means a lot or Parcel with an assigned Assessor’s Parcel Number in the maps used by the County Assessor in preparing the tax roll. “Assessor’s Parcel Map” means an official map of the County Assessor designating Parcels by Assessor’s Parcel Number. “Assessor's Parcel Number” means the parcel identification as assigned by the County Assessor on the equalized tax roll. “Authorized Facilities” means those facilities and fees to be financed by the CFD. “Base Year” means the Fiscal Year beginning July 1, 2018, and ending June 30, 2019. “Benefit Share” means the Maximum Annual Special Tax for a Parcel divided by the Maximum Annual Special Tax Revenue for all Taxable Parcels and their assigned Maximum Annual Special Tax. “Bond(s)” means any bond(s) issued by the CFD under the Act and any other debt, as defined in the Act, payable from the Special Tax for the CFD. “Bond Indenture” means the indenture, resolution, fiscal agent agreement, or other financing document pursuant to which any Bonds are issued. “Bond Share” means the share of Outstanding Bonds assigned to a Parcel as specified in Section 7 hereof. “Building Permit” means a permit issued by the City for the construction of a Residential Use or Nonresidential Use. “Building Square Foot(age)” has the same meaning as that defined for the School Mitigation Fee by California Government Code Section 65995 for “Assessable Space,” which is “all of the square footage within the perimeter of a residential structure, not including any carport, walkway, garage, overhang, patio, enclosed patio, detached accessory structure, or similar area” as determined by the “as built” size of the structure for the initial Building Permit. Future additions to Residential Units are not to be considered for potential increases to the Special Tax. “Capitalized Interest” means funds in any capitalized interest fund available to pay debt service on Bonds. “CFD” means Community Facilities District No. 2019-1 (San Luis Ranch) of the City. “City” means the City of San Luis Obispo in San Luis Obispo County, California. “Council” means the City Council of the City acting for the CFD under the Act. Packet Pg. 289 Item 13 Rate, Method of Apportionment, and Manner of Collection of Special Tax Exhibit A March 7, 2019 Economic & Planning Systems, Inc. (EPS) A-4 F:\Active Projects\182000\181049 San Luis Ranch CFD\Rate and Method\181049 rm9.docx “County” means the County of San Luis Obispo, California. “Debt Service” means the total annual amount of Bond principal, interest, and the scheduled sinking fund payments of the Bonds in a calendar year. “Developed Parcel” means, in any Fiscal Year: a. For Single-Family Parcels: All Parcels for which a Building Permit for a Residential Use structure which consists of a single-family house that was issued before May 1 of the preceding Fiscal Year. b. For Multifamily Parcels: All Parcels for which a Building Permit for new construction of a Residential Use structure, other than a single-family house, that was issued before May 1 of the preceding Fiscal Year. Once a Parcel is defined as a Developed Parcel it shall be taxed as such under the provisions of this RMA. “Development Plan” means a condominium plan, apartment plan, site plan, or other development plan that identifies such information as the type of structure, acreage, square footage, or number of Units that are approved to be developed on Residential Use Parcels. “ENR-CCI” means the Engineering News Record—Construction Cost Index for Los Angeles in the prior calendar year, as determined on July 1 of the current Fiscal Year. “Final Map Parcel” means a Parcel designated for development of a single-family residence, which is part of a Final Subdivision Map as of May 1 of the preceding Fiscal Year. The Minimum Annual Special Tax for Final Map Parcels is shown in Attachment 1 by Tax Category. “Final Subdivision Map” means a recorded map designating the final Parcel Subdivision for individual Single-Family Parcels. “Fiscal Year” means the period starting July 1 and ending the following June 30. “Full Prepayment” means the complete fulfillment of a Parcel’s Special Tax obligation, as determined by following the procedures in Section 7. “Lot Number” means the numeric designation for all Parcels shown in Map 1 and Attachment 1 at formation of the CFD. “Market-Rate Unit” means a Unit that is not a Workforce/Affordable Unit. “Maximum Annual Special Tax” means the maximum amount of Special Taxes assigned to a Taxable Parcel, as applicable by Tax Category. “Maximum Annual Special Tax Revenue” means the greatest amount of Special Tax that can be collected in total from a group of Parcels (such as Developed Parcels) by levying the Maximum Annual Special Tax. “Minimum Annual Special Tax” means the minimum amount of Special Tax as assigned to Taxable Parcels, shown in Attachment 1, at formation of the CFD. Packet Pg. 290 Item 13 Rate, Method of Apportionment, and Manner of Collection of Special Tax Exhibit A March 7, 2019 Economic & Planning Systems, Inc. (EPS) A-5 F:\Active Projects\182000\181049 San Luis Ranch CFD\Rate and Method\181049 rm9.docx “Multifamily For-Rent” or “Multifamily For-Rent Parcel” means any Parcel designated or developed for more than one residential dwelling Unit per Parcel and where such units are initially offered for rent to the general public and cannot be purchased by individual homeowners. Such uses may consist of apartments or structures such as duplexes or triplexes. Each residential dwelling Unit within Multifamily For-Rent or Multifamily For-Rent Parcels is not expected to have its own distinct Assessor’s Parcel Number. “Multifamily For-Sale” or “Multifamily For-Sale Parcel” means any Parcel designated or developed for more than one residential dwelling Unit within a single building or structure and that may share at least one common wall where such units are not initially offered for rent to the general public and initially may be offered for sale to individual homeowners. Such uses may consist of condominiums, townhouses, or buildings such as half-plexes or time-share units. Multifamily For-Sale Parcels are anticipated to have their own distinct Assessor’s Parcel Number as is the case in residential condominium projects. Once designated as Multifamily For-Sale or Multifamily For-Sale Parcel, the Parcel shall remain so designated unless the original structures are demolished. “Nonresidential Use” means a Taxable Parcel zoned for land uses other than Residential Uses, such as hotel, commercial, office, or retail. Nonresidential Uses planned at CFD formation are tax-exempt. “Original Parcel” means a Parcel identified in Attachment 1 and Map 1 by Lot Number at formation of the CFD. “Outstanding Bonds” means the total principal amount of Bonds that have been issued and not fully repaid or legally defeased. “Parcel” means any Assessor’s Parcel in the CFD based on the equalized tax rolls of the County as of January 1 of each Fiscal Year. “Partial Prepayment” means the partial fulfillment of a Parcel’s Special Tax obligation, as determined by following the procedures in Section 7. “Pay-As-You-Go Basis” means that of the use of Special Tax revenues to directly fund the costs of acquisition, construction, and improvement of Authorized Facilities not financed by Bonds, as a part of an acquisition agreement or funding agreement with the City. “Prepayment” means the partial or complete fulfillment of a Parcel’s Special Tax obligation, as determined by following the procedures in Section 7. “Proportionately” means that the ratio of the actual Special Tax levy to the Maximum Annual Special Tax is equal for all Developed Parcels. For Final Map Parcels, Proportionately means that the ratio of the actual Special Tax levy to the Maximum Annual Special Tax is equal for all Final Map Parcels. For Undeveloped Parcels, Proportionately means that the ratio of the actual Special Tax levy to the Maximum Annual Special Tax is equal for all Undeveloped Parcels. “Public Parcel” means any Parcel that is or is intended to be publicly owned, as designated in any final map, that is normally exempt from the levy of general ad valorem property taxes under California law, including, but not limited to, public streets, schools, parks, and public drainageways, landscaping, wetlands, greenbelts, and open space. Packet Pg. 291 Item 13 Rate, Method of Apportionment, and Manner of Collection of Special Tax Exhibit A March 7, 2019 Economic & Planning Systems, Inc. (EPS) A-6 F:\Active Projects\182000\181049 San Luis Ranch CFD\Rate and Method\181049 rm9.docx “Remainder Parcel” means a portion of a unit of land that is created as a result of the recording of a Final Subdivision Map or other Subdivision, which results in a designated remainder as defined in Government Code Section 66424.6(a) (Remainder Parcel). Such a Remainder Parcel may contain taxable and tax-exempt uses, such as Residential Uses, and Public Parcels, such as park sites. “Remaining Facilities Costs” means the amount of Anticipated Construction Proceeds less construction proceeds from previous Bond issuances and less costs of Authorized Facilities funded on a Pay-As-You-Go Basis from the levy of the Special Tax. “Remaining Facilities Cost Share” means the Remaining Facilities Costs multiplied by the Benefit Share. “Reserve Fund” means any debt service reserve fund established pursuant to the Bond Indenture. “Reserve Fund Requirement” means the amount required to be held in any Reserve Fund. “Reserve Fund Share” means the amount on deposit in any Reserve Fund, but in any event not to exceed the Reserve Fund Requirement, multiplied by the Benefit Share for a given Parcel. “Residential Use” means a Parcel designated for residential use, such as single-family residential Units, residential condominiums, townhouses, or apartments. “RMA” means this Rate, Method of Apportionment, and Manner of Collection of Special Tax. “Single-Family Parcel” means, in any Fiscal Year, all Parcels in the CFD for which a building permit was issued or may be issued for construction of a Unit that is a single-family residential, residential condominium, or townhouse Unit. “Special Tax(es)” mean(s) any tax levy under the Act in the CFD. “Subdivision” or “Subdivided” means a division of a Parcel into two or more Parcels through Parcel reconfiguration, lot-line adjustments, or the Subdivision Map Act process. A Subdivision also may include the merging of two or more Parcels to create new Parcels. “Successor Parcel” means a Parcel created by the Subdivision of an Original Parcel or a Successor Parcel. “Tax Category” means the categories of taxable land uses shown in Attachments 1 and 2. “Tax Collection Schedule” means the document prepared by the Administrator for the County Auditor-Controller to use in levying and collecting the Special Taxes each Fiscal Year. “Tax Escalation Factor” means a factor of 2 percent by which the Maximum Annual Special Tax and Minimum Annual Special shall be increased annually following the Base Year. “Taxable Acreage” means that area of a Parcel determined by the Administrator to become a Taxable Parcel or Parcels upon further Subdivision. An example might be that a Final Subdivision Map creates a Remainder Parcel that, according to Attachment 1, contains both taxable uses and tax-exempt uses. “Taxable Parcel” means any Parcel that is not a Tax-Exempt Parcel. Packet Pg. 292 Item 13 Rate, Method of Apportionment, and Manner of Collection of Special Tax Exhibit A March 7, 2019 Economic & Planning Systems, Inc. (EPS) A-7 F:\Active Projects\182000\181049 San Luis Ranch CFD\Rate and Method\181049 rm9.docx “Tax-Exempt Parcel” means a Parcel not subject to the annual Special Tax. Tax-Exempt Parcels include (a) Nonresidential Use Parcels at the time of CFD formation, (b) Multifamily For- Rent Parcels at the time of CFD formation, (c) Public Parcels, and (d) Parcels owned by the City, school districts, special districts, or the state or federal government. A Taxable Parcel that is acquired by a public agency, the Parcel shall remain a Taxable Parcel as per the provisions of Section 4.m. Certain privately-owned Parcels also may be exempt from the levy of annual Special Taxes, including common areas owned by homeowner’s associations or property owner associations, wetlands, detention basins, water quality ponds, and open space, as determined by the Administrator. “Trustee” means a national banking association organized and existing under the laws of the United States acting as a trustee or fiscal agent for Bonds. “Undeveloped Parcel” means a Taxable Parcel that is not a Developed Parcel or Final Map Parcel. “Unit” means, for a Single-Family Parcel, the individual residential unit on such Parcel, or for a Multifamily For-Rent Parcel or Multifamily For-Sale Parcel, an individual residential unit in a multifamily building. “Workforce/Affordable Unit(s)” means Residential Use Units identified in Attachment 1 by Tax Category. If there are a greater number of Units for which Building Permits are to be issued within a Tax Category, the Administrator shall require that the Maximum Annual Special Tax is prepaid in fill using the Prepayment procedures in Section 7. 3. Duration of the Special Tax The Special Tax will be levied and collected for as long as it is needed to pay Annual Costs; however, in no event shall the Special Tax be levied on any Parcel in the CFD after Fiscal Year 2062-63. When all Authorized Facilities and other Annual Costs incurred by the CFD have been paid, the Special Taxes shall cease to be levied. The City shall direct the County Recorder to record a Notice of Cessation of Special Tax. Such notice will state that the obligation to pay the Special Tax has ceased and that the lien imposed by the Notice of Special Tax Lien is extinguished. In addition, the Notice of Cessation of Special Tax shall identify the book and page of the Book of Maps of Assessment and Community Facilities Districts where the map of the boundaries of the CFD is recorded. 4. Administrative Tasks Tasks required of the Administrator are discussed below: a. Annual Special Tax Escalation. The Administrator shall increase the Minimum Annual Special Tax and Maximum Annual Special Tax (for Developed Parcels, Final Map Parcels, and Undeveloped Parcels) by the Tax Escalation Factor in all Fiscal Years following the Base Year. b. Assignment of the Minimum Annual Special Tax and Maximum Annual Special Tax to Original Parcels. A Final Subdivision Map has been approved by the City creating all Taxable Parcels. Packet Pg. 293 Item 13 Rate, Method of Apportionment, and Manner of Collection of Special Tax Exhibit A March 7, 2019 Economic & Planning Systems, Inc. (EPS) A-8 F:\Active Projects\182000\181049 San Luis Ranch CFD\Rate and Method\181049 rm9.docx Attachment 1 identifies the Minimum Annual Special Tax and Maximum Annual Special Tax for each Original Parcel and Lot Number at CFD formation, as shown in Attachment 1. The Minimum Annual Special Tax for a Final Map Parcel is determined for each Tax Category and planned Building Square Footage per Unit based on the Minimum Annual Special Tax per Unit times the number of assigned Units for each Tax Category at CFD formation. The Minimum Annual Special Tax for an Undeveloped Parcel (Lot 1) is determined by multiplying the Minimum Annual Special Tax per Acre times the Acreage of the Parcel. The Maximum Annual Special Tax is determined for each Tax Category and planned Building Square Footage per Unit based on the Maximum Annual Special Tax per Unit times the number of assigned Units for each Tax Category at CFD formation. Map 1 shows the location of expected future Parcels in each Tax Category. Future Parcels are identified in Map 1 by land use designations and final map lot numbers. The Minimum Annual Special Tax assigned at CFD formation to each Original Parcel shall not be reduced as a result of future development approvals. The following procedures provide instructions for the assignment of the Minimum Annual Special Tax and Maximum Annual Special Tax as the CFD is built out. Once the Minimum Annual Special Tax and Maximum Annual Special Tax is assigned to a Parcel, it shall remain subject to that Special Tax unless fully prepaid using the provisions of Section 7, or the Special Taxes are transferred to another Parcel using the provisions of Section 4.i. c. Assignment of the Minimum Annual Special Tax and Maximum Annual Special Tax upon Recordation of a Final Subdivision Map: Attachment 1 assigns the number of anticipated Units for each Tax Category. If upon recordation of the Final Subdivision Map there are fewer Units created, perform the following procedures to assign the Minimum Annual Special Tax and Maximum Annual Special Taxes to Final Map Parcels. 1. Identify the number of Units assigned to the Tax Category by Building Square Footage range and Minimum Annual Special Tax and Maximum Annual Special Tax assigned to the Original or Successor Parcel in Attachment 1. (Assume that the number of Workforce/Affordable Units remain the same for each Tax Category). 2. Identify the number of Units created by the Final Subdivision Map for each Tax Category. 3. Reduce the number of Units shown in Attachment 1 for the Tax Category and Building Square Footage range by reducing the Units assigned to each Building Square Footage range equally until the total Units for the Tax Category match the Units created by the Final Subdivision Map. If the number of Units that must be reduced is an odd number, apply the remaining Unit reduction to the lower Building Square Footage range for the Tax Category. 4. Proportionately increase the Minimum Annual Special Tax per Unit and Maximum Annual Special Tax per Unit such that the amounts for each Taxable Parcel, when summed, equals the Minimum Annual Special Tax and Maximum Annual Special Tax assigned to the Original or Successor Parcel immediately prior Packet Pg. 294 Item 13 Rate, Method of Apportionment, and Manner of Collection of Special Tax Exhibit A March 7, 2019 Economic & Planning Systems, Inc. (EPS) A-9 F:\Active Projects\182000\181049 San Luis Ranch CFD\Rate and Method\181049 rm9.docx to such calculation. The Administrator shall update Attachment 1 showing the newly assigned Minimum Annual Special Tax and Maximum Annual Special Tax per Unit and to the Original or Successor Parcel. 5. If the number of Units are greater than or equal to the Units assigned in Attachment 1, assign the Maximum Annual Special Tax and Maximum Annual Special Tax per Unit as shown in Attachment 1. There shall be no loss of Minimum Annual Special Tax or Maximum Annual Special Tax for an Original or Successor Parcel as a result of the recordation of the final map. d. Assignment of the Maximum Annual Special Tax to Single-Family Parcels at Building Permit Issuance: At issuance of a Building Permit for Residential Uses, assign the Maximum Annual Special Tax shown in Attachment 1 for the Tax Category and Building Square Footage Range to the Taxable Parcel. In assigning the Maximum Annual Special Tax to the Developed Parcel, the Minimum Annual Special Tax may remain equal to the Maximum Annual Special Tax, or may be increased from the Minimum Annual Special Tax based upon the Building Square Footage identified in the Building Permit. The amount of the assigned Special Tax shall not decrease upon issuance of a Building Permit. e. Assignment of the Minimum Annual Special Tax and Maximum Annual Special Tax to Multifamily For-Sale Parcels at Building Permit Issuance: At formation of the CFD, the Minimum Annual Special Tax and Maximum Annual Special Tax, as shown in Attachment 1 for the Tax Category and Building Square Footage range, is assigned to each of the 135 Units assigned to Lot 1, as shown in Map 1. The sum of the Minimum Annual Special Tax and the sum of the Maximum Annual Special Tax for each Unit is the amount of each Special Tax assigned to Lot 1 at formation. As one or more Building Permits are issued for the construction of the Units, use the following procedures to assign the Minimum Annual Special Tax and Maximum Annual Special Tax to Taxable Parcels. 1. Identify the Minimum Annual Special Tax and Maximum Annual Special Tax assigned to Lot 1 in Attachment 1. 2. At issuance of a Building Permit for Multifamily For-Sale Parcels, assign the Maximum Annual Special Tax per Unit, as shown in Attachment 1 for the Tax Category and Building Square Footage range, to each Unit as shown in the Building Permit. 3. If the Building Permit has been issued to construct all planned Units (as shown in Attachment 1) for Lot 1, sum the Maximum Annual Special Tax assigned to each Unit. 4. If the sum of the amounts in Step 4.e.3 is equal to, or greater than, the amount of Maximum Annual Special Tax identified in Step 4.e.1, assign this Maximum Annual Special Tax to each Unit. 5. If the sum of the amounts in Step 4.e.3 is less than the amount identified in Step 4.e.1, Proportionately increase the Maximum Annual Special Tax per Unit for each Unit until the sum of the amount of the Maximum Annual Special Tax for each Unit is equal to the Packet Pg. 295 Item 13 Rate, Method of Apportionment, and Manner of Collection of Special Tax Exhibit A March 7, 2019 Economic & Planning Systems, Inc. (EPS) A-10 F:\Active Projects\182000\181049 San Luis Ranch CFD\Rate and Method\181049 rm9.docx amount identified in Step 4.e.1. The Administrator shall update Attachment 1 showing the newly assigned Maximum Annual Special Tax per Unit and to the Original or Successor Parcel. 6. If the construction of the proposed 135 Units is a phased build out over more than one Fiscal Year, assign the Maximum Annual Special Tax to Developed Parcels based upon the Building Square Footage of each Unit to each Unit (as shown in the Building Permit). a. Multiply the Maximum Annual Special Tax for each Unit (as shown in Attachment 1) times the number of Units identified in the Building Permit. b. Subtract the amount of Maximum Annual Special Tax from Step 4.e.6.a the amount of Maximum Annual Special Tax identified in Step 4.e.1. Assign this amount as the Maximum Annual Special Tax to be assigned to the Remainder Parcel c. Repeat the above procedures in the following Fiscal Year(s) to assign the Minimum Annual Special Tax and Maximum Annual Special Tax to the remaining Units assigned to the Remainder Parcel until the Special Taxes are assigned to 135 Units, or the Administrator determines that all Units have been constructed for Lot 1. f. Multifamily For-Rent Parcels Developed as Multifamily For-Sale Parcels: Lot 2 shown in Map 1 is designated under the RMA as a Multifamily For-Rent Parcel which is a Tax-Exempt Parcel. If Units identified in Attachment 1 as Multifamily For-Rent are developed as Multifamily For- Sale Parcels, assign the Minimum Annual Special Tax per Unit and Maximum Annual Special Tax per Unit to such Parcels using the amounts shown in Attachment 2 for the appropriate Building Square Footage of each Taxable Parcel. g. If a Nonresidential Use Original or Successor Parcel is Subdivided creating Residential Use Parcels: When Nonresidential Use Parcels shown in Attachment 1 are Subdivided into Successor Parcels that are Residential Use, use the procedure below to assign the Minimum Annual Special Tax and Maximum Annual Special Tax to Parcels. 1. Identify the Minimum Annual Special Tax and Maximum Annual Special Tax for the Tax Category shown in Attachment 2 for the proposed Residential Uses. 2. Assign the Minimum Annual Special Tax and Maximum Annual Special Tax to each planned Unit. h. Reassignment of the Minimum Annual Special Tax and Maximum Annual Special Tax upon Land Use Change or Remapping: If there is a land use change or remapping of Parcels shown in Map 1, the Maximum Annual Special Tax and Maximum Annual Special Tax will be reassigned to newly created Parcels using the following procedures. 1. Identify all Taxable Parcels in Attachment 1 and on Map 1 that are subject to the land use change or remapping. Packet Pg. 296 Item 13 Rate, Method of Apportionment, and Manner of Collection of Special Tax Exhibit A March 7, 2019 Economic & Planning Systems, Inc. (EPS) A-11 F:\Active Projects\182000\181049 San Luis Ranch CFD\Rate and Method\181049 rm9.docx 2. Calculate the Minimum Annual Special Tax and Maximum Annual Special Tax (by Building Square Footage range) for all Taxable Parcels identified in Step 4.h.1. 3. Identify land use categories for remapped Taxable Parcels. 4. Assign the corresponding Minimum Annual Special Tax and Maximum Annual Special Tax to remapped Taxable Parcels based upon Tax Categories and Building Square Footage ranges identified in Attachment 2. 5. Calculate the Minimum Annual Special Tax and Maximum Annual Special Tax for all Taxable Parcels from Step 4.h.4. 6. If the amount of the Minimum Annual Special Tax and Maximum Annual Special Tax from Step 4.h.2 is less than the amount summed in Step 4.h.4, assign the Minimum Annual Special Tax and Maximum Annual Special Tax per Unit (increased by the Tax Escalation Factor to the current Fiscal Year) to each Taxable Parcel. 7. If the amount of the Minimum Annual Special Tax and Maximum Annual Special Tax from Step 4.h.2 is greater than the amount summed in Step 4.h.4, increase the Minimum Annual Special Tax and Maximum Annual Special Tax per Unit (increased by the Tax Escalation Factor to the current Fiscal Year) Proportionately for each Taxable Parcel until the sum of the Minimum Annual Special Tax and Maximum Annual Special Tax for all Taxable Parcels is equal to the amount summed in Step 4.h.2. i. Workforce/Affordable Units Assigned at Formation of the CFD: For each Tax Category, the RMA assigns a number of Units defined as Workforce/Affordable Units. If there are more Workforce/Affordable Units constructed within a Tax Category than shown in Attachment 1, the Administrator shall require that the Maximum Annual Special Tax be prepaid using the provisions of Section 7. The Maximum Annual Special Tax for the Workforce/Affordable Units is assigned using Tax Categories in Attachment 2. j. Workforce/Affordable Units that Become Market-Rate Units. If, in any Fiscal Year, the Administrator, or his or her designee, determines that a Unit that previously had been designated as a Workforce/Affordable Unit no longer qualifies as such, the Administrator shall assign the Minimum Annual Special Tax and Maximum Annual Special Tax per Unit based on their Tax Category and Building Square Footage range as shown in Attachment 2, as adjusted by the Tax Escalation Factor. k. Transfer of the Special Tax from Taxable Parcel to Another. The Minimum Annual Special Tax and Maximum Annual Special Taxes shown in Attachment 1 were determined based on the expected Tax Categories for each Original Parcel shown in Attachment 1. If the number of planned residential Units is transferred from one Original or Successor Parcel to another, the City may, in its sole discretion, allow for a transfer of the Minimum Annual Special Tax and Maximum Annual Special Tax from one Taxable Parcel to another. Such a transfer shall be allowed only if (1) all adjustments are agreed to in writing by the affected property owners and the Administrator, and (2) there is no reduction in the total Minimum Annual Special Tax Packet Pg. 297 Item 13 Rate, Method of Apportionment, and Manner of Collection of Special Tax Exhibit A March 7, 2019 Economic & Planning Systems, Inc. (EPS) A-12 F:\Active Projects\182000\181049 San Luis Ranch CFD\Rate and Method\181049 rm9.docx and Maximum Annual Special Tax revenues as a result of the transfer. Should a transfer result in an amendment to Attachment 1 of the Notice of Special Tax Lien, the requesting property owner shall bear the costs to affect the transfer in the CFD records and prepare the required amendments to the Notice of Special Tax Lien and Attachment 1. Before the transfer, the City may require a deposit from the requesting property owner for such costs. l. Conversion of a Tax-Exempt Parcel to a Taxable Parcel. If a Tax-Exempt Parcel is not needed for public use and is converted to a taxable use or transferred to a private owner, it shall become subject to the Special Tax. The Minimum Annual Special Tax and Maximum Annual Special Tax for the newly Taxable Parcel will be determined using the provisions of Sections 4 and 5 of the RMA. m. Taxable Parcels Acquired by a Public Agency. A Taxable Parcel that is acquired by a public agency after the CFD is formed will remain subject to the applicable Special Tax unless the Special Tax obligation is satisfied pursuant to Section 53317.5 of the Government Code. An exception to this may be made if a Public Parcel, such as a park site, is relocated to a Taxable Parcel, in which case the previously Tax-Exempt Parcel of comparable acreage becomes a Taxable Parcel and the Minimum Annual Special Tax Maximum Annual Special Tax from the previously Taxable Parcel is transferred to the new Taxable Parcel. This trading of a Parcel from a Taxable Parcel to a Public Parcel will be permitted to the extent there is no net loss in Minimum Annual Special Tax and Maximum Annual Special Tax Levy for all Taxable Parcels in the CFD, and the transfer is agreed to by the owners of the Parcels involved in the transfer and the Finance Director. 5. Assignment of the Special Tax a. Classification of Parcels. For purposes of the next Fiscal Year tax levy, by June 30 of each Fiscal Year, using the Definitions in Section 2, the Parcel records of the Assessor’s secured tax roll as of January 1, and other City development approval records, the Administrator shall cause: 1. Each Parcel to be classified as a Taxable Parcel or Tax-Exempt Parcel. 2. Each Parcel to be classified as a Developed Parcel, a Final Map Parcel, or an Undeveloped Parcel. b. Assignment of the Minimum Annual Special Tax and Maximum Annual Special Tax to Taxable Parcels. The Special Taxes will be assigned to each Taxable Parcel each Fiscal Year using the procedures (not all steps may be applicable for each such Parcel) in Section 4. 6. Calculating Annual Special Taxes/Method of Ap po rtionment The Administrator will compute the Annual Cost and determine the annual Special Tax levy for each Taxable Parcel based on the assignment of the Special Tax in Sections 4 and 5. The Administrator then will determine the tax levy for each Taxable Parcel using the following process: a. Compute the Annual Costs using the definition of Annual Costs in Section 2. Packet Pg. 298 Item 13 Rate, Method of Apportionment, and Manner of Collection of Special Tax Exhibit A March 7, 2019 Economic & Planning Systems, Inc. (EPS) A-13 F:\Active Projects\182000\181049 San Luis Ranch CFD\Rate and Method\181049 rm9.docx Step 6.a.1: Levy the Special Tax Proportionately for each Developed Parcel up to the lesser of the Annual Cost calculated in Section 6.a and the Maximum Annual Special Tax for each Developed Parcel. Step 6.a.2: If the levy calculated in Step 6.a.1 is less than the Annual Cost, levy the Special Tax Proportionately for each Final Map Parcel, up to the amount that when added to the levy calculated in Step 6.a.1, equals the lesser of the Annual Cost and the Maximum Annual Special Tax for each Final Map Parcel. Step 6.a.3: If the total of the levy calculated in Step 6.a.1 and Step 6.a.2 is less than the Annual Cost, levy the Special Tax Proportionately for each Undeveloped Parcel, up to the amount that when added to the levy calculated in Step 6.a.1 and Step 6.a.2, equals the lesser of the Annual Cost and the Maximum Annual Special Tax for each Undeveloped Parcel. b. Levy on each Taxable Parcel the amount calculated above. c. Prepare the Tax Collection Schedule and, unless an alternative method of collection has been selected pursuant to Section 9, send it to the County Auditor requesting that it be placed on the general, secured property tax roll for the Fiscal Year. The Tax Collection Schedule will not be sent later than the date required by the County Auditor for such inclusion. The Administrator will make every effort to calculate the Special Tax correctly for each Parcel. It will be the burden of the taxpayer to correct any errors in determining which Parcels are subject to the tax and their Special Tax assignments. 7. Prepayment of the Special Tax Obligation A property owner may permanently or partially satisfy the Special Tax for a Taxable Parcel by a Full or Partial Prepayment, as permitted under Government Code Section 53344. Prepayments must be made by May 1 to have the Prepayment reflected in the following Fiscal Year’s Special Tax levy. Prepayment is permitted only under the following conditions: • The landowner prepaying the Special Tax on a Parcel has paid any delinquent Special Tax and penalties on that Parcel before Prepayment. • Following Prepayment, amounts in the reserve fund are equal to or greater than the reserve fund requirement. • The City determines that the Prepayment will not jeopardize its ability to make timely payments of Debt Service and maintain a 110-percent annual Debt Service coverage based on Maximum Annual Special Tax Revenues in all years in which issued Bonds will be outstanding. When permitted, the Administrator shall calculate Full Prepayments using the following steps: a. The Full Prepayment amount before any issuance of CFD Bonds shall be calculated using the following procedures: Packet Pg. 299 Item 13 Rate, Method of Apportionment, and Manner of Collection of Special Tax Exhibit A March 7, 2019 Economic & Planning Systems, Inc. (EPS) A-14 F:\Active Projects\182000\181049 San Luis Ranch CFD\Rate and Method\181049 rm9.docx Step 7.a.1. Determine the Maximum Annual Special Tax for the Parcel for which the Special Tax is to be prepaid using the provisions of Sections 4 and 5, treating such Parcel as a Developed Parcel. Step 7.a.2. Divide the amount from Step 7.a.1. by the Maximum Annual Special Tax Revenue, assuming all Taxable Parcels are Developed Parcels, to determine the Benefit Share for the Full Prepayment Parcel. Step 7.a.3. Multiply the Remaining Facilities Costs, as increased by ENR-CCI from the Base Year, by the Benefit Share to determine the Full Prepayment amount. Step 7.a.4. Add to the amount determined in Step 7.a.3. any costs to the City, including the costs of any City consultants, associated with the preparation of the Full Prepayment calculation. b. The Full Prepayment amount after the issuances of CFD Bonds shall be calculated using the following procedures: Step 7.b.1. Determine the Maximum Annual Special Tax for the Parcel for which the Special Tax is to be prepaid using the provisions of Sections 4 and 5. If the Parcel is not a Developed Parcel, assign the Maximum Annual Special Tax for the Tax Category for the Prepayment Parcel assuming the Building Square Footage is within the higher range of Maximum Annual Special Taxes for the Tax Category. Step 7.b.2. Divide the amount from Step 7.b.1. by the Maximum Annual Special Tax Revenue, assuming all Taxable Parcels are Developed Parcels, to determine the Benefit Share for the Parcel. Step 7.b.3. Multiply the Benefit Share by the total amount of Outstanding Bonds to determine the Bond Share for the Full Prepayment Parcel. Step 7.b.4. Multiply the Benefit Share by the Remaining Facilities Costs, as increased by ENR-CCI from the Base Year, to determine the Remaining Facilities Cost Share for the Full Prepayment Parcel. Step 7.b.5. Sum the Bond Share and Remaining Facilities Cost Share from Steps 7.b.3. and 7.b.4. Step 7.b.6. Determine the total amount of Bonds to be called by rounding the amount summed in Step 7.b.5. down to the nearest $5,000. Step 7.b.7. Multiply the amount calculated in Step 7.b.6. by the call premium for the next available call date. Step 7.b.8. Determine the Reserve Fund Share for the Full Prepayment Parcel by multiplying the Reserve Fund Requirement by the Benefit Share. Step 7.b.9. Reduce the amount calculated in Step 7.b.5. by the amount of the Reserve Fund Share in Step 7.b.8., provided the amount in the Reserve Fund equals the Reserve Fund Requirement after reduction. Packet Pg. 300 Item 13 Rate, Method of Apportionment, and Manner of Collection of Special Tax Exhibit A March 7, 2019 Economic & Planning Systems, Inc. (EPS) A-15 F:\Active Projects\182000\181049 San Luis Ranch CFD\Rate and Method\181049 rm9.docx Step 7.b.10. Determine the Full Prepayment amount by adding to the amount calculated in Step 7.b.9. any fees, call premiums, and interest to the next Bond call date not covered by Special Taxes already levied and collected for the prepaying Parcel, and expenses incurred by the CFD in connection with the Full Prepayment calculation or the application of the proceeds of the Full Prepayment to the call of Outstanding Bonds. Step 7.b.11. If the Special Taxes already have been levied but not collected, the Parcel shall not become a Full Prepayment Parcel until the owner of the Parcel has paid the Special Taxes included on the current property tax bill in addition to the Full Prepayment amount. c. Partial Prepayments are allowed only for Parcels owned by a property owner before the issuance of the initial Building Permit. A Partial Prepayment can occur only once per Assessor’s Parcel. The City may allow a Partial Prepayment if the City determines that the Partial Prepayment will not jeopardize its ability to make timely payments of Debt Service and maintain a 110-percent annual Debt Service coverage based on Maximum Annual Special Tax Revenues in all years where there will be Outstanding Bonds. Partial Prepayments will be calculated as described below: The amount of any Partial Prepayment must be either 25 percent or 50 percent of the Full Prepayment amount determined in Step 7.a.8. A Partial Prepayment may be made in an amount equal to 25 percent or 50 percent of the Full Prepayment desired by the party making a Partial Prepayment, except that the full amount of Administrative Expenses determined in Step 7.a.7 shall be included in the Partial Prepayment. The Maximum Annual Special Tax that can be levied on a Parcel after a Partial Prepayment is made is equal to the Special Tax that could have been levied before the Prepayment, reduced by the percentage of the Full Prepayment that the Partial Prepayment represents, all as determined by or at the direction of the Finance Director. For example, if the Partial Prepayment is equal to 25 percent, the Special Tax applied to the Parcel would be 75 percent of the Maximum Annual Special Tax. c. Upon Full Prepayment, the Administrator shall cause to be recorded a Notice of Cancellation of Special Tax Lien in accordance with Government Code Section 53344. 8. Interpretation, Application, and Appeal of S p ec ial Tax Formula and Procedures Any taxpayer who feels the amount of the Special Tax assigned to a Parcel is in error may file a notice with the Administrator appealing the levy of the Special Tax. The Administrator will then promptly review the appeal and, if necessary, meet with the applicant. If the Administrator verifies the tax should be modified or changed, the Special Tax levy will be corrected and, if applicable in any case, a refund will be granted. Interpretations may be made by resolution of the Council for purposes of clarifying any vagueness or ambiguity as it relates to the Special Tax rate, the method of apportionment, the classification of properties, or any definition applicable to the CFD. Packet Pg. 301 Item 13 Rate, Method of Apportionment, and Manner of Collection of Special Tax Exhibit A March 7, 2019 Economic & Planning Systems, Inc. (EPS) A-16 F:\Active Projects\182000\181049 San Luis Ranch CFD\Rate and Method\181049 rm9.docx Without Council approval, the Administrator may make minor, non-substantive administrative and technical changes to the provisions of this Exhibit that do not materially affect the rate, method of apportionment, and manner of collection of the Special Tax for purposes of the administrative efficiency or convenience or to comply with new applicable federal, state, or local law. 9. Manner of Collection The Special Tax will be collected in the same manner and at the same time as ad valorem property taxes, provided, however, the Administrator or its designee may directly bill the Special Tax and may collect the Special Tax at a different time, such as on a monthly or other periodic basis, or in a different manner, if necessary, to meet the City’s financial obligations. Packet Pg. 302 Item 13 Attachment 1 City of San Luis Obispo CFD No. 2019-1 (San Luis Ranch) Assignment of the Special Taxes to Original Parcels - Base Year Maximum Annual Minimum Minimum Special Tax Annual Annual For Developed Maximum Annual Original Special Tax Special Tax Parcels Special Tax Parcel Tax Categories Acres Units per Unit per Tax Category per Unit/Acre per Tax Category [1][1] 067-121-022 Residential Uses per Unit Low Density Residential (LDR)15.51 1,850 sq. ft and greater 99 $2,630 $260,370 $3,110 $307,890 Less than 1,850 sq. ft.94 $2,630 $247,220 $2,630 $247,220 Workforce/Affordable Units [2]5 $0 $0 $0 LDR Subtotal 198 $507,590 $555,110 Medium Density Residential (MDR) 5.14 1,600 sq. ft and greater 41 $2,150 $88,150 $2,630 $107,830 Less than 1,600 sq. ft.29 $2,150 $62,350 $2,150 $62,350 Workforce/Affordable Units [2]13 $0 $0 $0 MDR Subtotal 83 $150,500 $170,180 High Density Residential (HDR)10.97 Multifamily For-Sale 1,200 sq. ft and greater 67 $1,600 $107,200 $1,910 $127,970 Less than 1,200 sq. ft.68 $1,600 $108,800 $1,600 $108,800 Workforce/Affordable Units [2]30 $0 $0 $0 Lot 2 For Rent Multifamily 134 $0 $0 $0 HDR Subtotal 299 $216,000 $236,770 Residential Use Totals 31.62 580 $874,090 $962,060 Nonresidential Uses per Acre per Acre Commercial Lot 7 Nonresidential Use 11.44 $0 $0 $0 $0 Lot 8 Nonresidential Use 3.33 $0 $0 $0 $0 Lot 9 Nonresidential Use 3.81 $0 $0 $0 $0 Nonresidential Use Totals 18.58 Public Uses Parks 3.19 $0 $0 $0 $0 Open Space 7.81 $0 $0 $0 $0 Agricultural 52.32 $0 $0 $0 $0 Regional Road 9.00 $0 $0 $0 $0 Local Road 8.84 $0 $0 $0 $0 Public Use Totals 81.16 $0 Totals 131.36 $962,060 "att1" [1] The Minimum Annual Special Tax and Maximum Annual Special Tax per Unit/Acre are increased by 2-percent annually following the Base Year [2] If there are a greater number of Workforce/Affordable Units Building Permits issued within a Tax Category (LDR, MDR, or HDR), the Administrator shall require the full Prepayment of the Maximum Annual Special Tax for each such Unit constructed. Lot 1 Lot Numbers 11 to 208 Lot Numbers 220 to 302 Minimum Annual Special Tax Maximum Annual Special Tax Prepared by EPS 2/7/2019 F:\Active Projects\182000\181049 San Luis Ranch CFD\Models\181049 model 3 A-17 Packet Pg. 303 Item 13 Attachment 2 City of San Luis Obispo CFD No. 2019-1 (San Luis Ranch) Assignment of the Special Tax by Tax Category - Base Year Minimum Maximum Annual Annual Special Tax Special Tax Tax Category per Unit per Unit/Acre [1][1] Residential Uses per Unit per Unit Low Density Residential (LDR) 1,850 sq. ft and greater $2,630 $3,110 Less than 1,850 sq. ft.$2,630 $2,630 Workforce/Affordable Units $0 $0 Medium Density Residential (MDR) 1,600 sq. ft and greater $2,150 $2,630 Less than 1,600 sq. ft.$2,150 $2,150 Workforce/Affordable Units $0 $0 High Density Residential (HDR) For-Sale Multifamily 1,200 sq. ft and greater $1,600 $1,910 Less than 1,200 sq. ft.$1,600 $1,600 Less than 600 sq. ft.$1,199 $1,199 Workforce/Affordable Units $0 $0 For-Rent Multifamily $0 $0 Nonresidential Uses per Acre per Acre Commercial $0 $0 Office $0 $0 Hotel $0 $0 "att_2" [1] The Minimum Annual Special Tax and Maximum Annual Special Tax per Unit/Acre are increased by 2-percent annually following the Base Year Prepared by EPS 2/7/2019 F:\Active Projects\182000\181049 San Luis Ranch CFD\Models\181049 model 3 A-18 Packet Pg. 304 Item 13 1050 Southwood DriveSan Luis Obispo, CA 93401P 805.544.7407 F 805.544.3863Packet Pg. 305Item 13 List of E Authoriz EXHIBIT zed Facili B: ities andd Servicees Packet Pg. 306 Item 13 EXHIBIT B FACILITIES In addition to the facilities described below, other expenses incidental to the below and authorized by the Act, including but not limited to: the cost of planning, permitting, and designing the facilities (including the cost of environmental evaluation, orthophotography, environmental remediation/mitigation); land acquisition and easement payments for the facilities; project management; construction staking; engineering studies and reports; utility relocation and demolition costs incidental to construction of the facilities, wetland/species mitigation purchase; reimbursements to other areas for infrastructure facilities or planning serving development in the Community Facilities District; legal, engineering, technical studies costs related to the facilities and any other expenses incidental to the construction, completion, and inspection of the facilities. Transportation Improvements Public roadway and bikeway improvements designed to meet the needs of the project, including those improvements identified in the San Luis Ranch Financing Plan, including but not limited to: Item # Item ROADWAYS 1 Froom Ranch Way (Prado to Oceanaire) Including Bridge 2 Froom Ranch Way (Oceanaire to Target Driveway) 3 Froom Ranch Way & LOVR Intersection Widening 4 Prado Road/US 101 Overpass and North Bound Lanes 5 Prado Road Southbound Ramps 6 Madonna & Dalidio/Prado Intersection Widening OTHER AREA ROADWAYS (MITIGATIONS) 7 Madonna & SB 101 Off Ramp - Lengthen EB Left Turn Pocket 8 Madonna & Oceanaire Pedestrian X-ing Enhancements 9 Madonna & San Luis Ranch Way Pedestrian X-ing Enhancement 10 LOVR & SB 101 Off Ramp - Lengthen Left Turn Pocket 11 LOVR & Higuera - Lengthen EB Right Turn Pocket 12 Higuera & South - Lengthen NB Right Turn Pocket OTHER AREA ROADWAY MITIGATIONS - FEE ONLY PROJECTS 13 Prado & Higuera Widening 14 Madonna Rd @ LOVR - Signal Timing Optimization 15 Madonna & Oceanaire Turn Lane Extensions 16 Madonna & LOVR - Turn Lane Extensions 17 LOVR & Auto Park Way Signalization 18 Higuera & Tank Farm - Lengthen NB Right Turn Pocket SLR BIKEWAYS 19 Prado Road Class I Path (Madonna to Froom) 20 Madonna Road Class I Path / Protected bikeway (Hwy 101 to Oceanaire) 21 Bob Jones Trail (Calle Joaquin to Froom Ranch Road) SLR BIKEWAYS - FEE ONLY PROJECTS 22 Prado Road Class I Path (NB Ramps to Higuera) 23 Bob Jones Trail (Madonna to Prado) B-1 Packet Pg. 307 Item 13 Eligible roadway improvements include the following items: acquisition of land and easements; roadway design; project management; geotechnical engineering, testing and observations; bridge crossings and culverts; clearing, grubbing, and demolition; grading, soil import/export, paving (including slurry seal), and decorative/enhanced pavement concrete or pavers; power pole relocations; joint trenches, underground utilities, and undergrounding of existing utilities; dry utilities and appurtenances; curbs, gutters, sidewalks, bike trails (including on- and off-site), park and ride facilities, bus rapid transit improvements, including transfer stations and regional public transit improvements; retaining walls, sound walls, enhanced fencing, and access ramps; street lights, signalization, and traffic signal control systems; bus turnouts; signs and striping; erosion control; median and parkway landscaping and irrigation; entry monumentation; bus shelters; masonry walls; and other improvements related thereto. Eligible improvements for the roads listed above also include any and all necessary underground potable and non-potable water, sanitary sewer, and storm drainage system improvements. Potable and Non-Potable Water System Improvements Authorized facilities include any and all on- and off-site backbone water facilities designed to meet the needs of development of the project. These facilities include potable and non-potable mains, valves, services, and appurtenances; wells; and water treatment and storage facilities, and related improvements, including but not limited to: site clearing, grading, and paving; curbs and gutters; recycled water storage tanks, booster pump stations, and all appurtenances thereto; wells; water treatment; stand-by generator; site lighting, drainage, sanitary sewer, and water service; landscaping and irrigation; access gates and fencing; striping and signage; and the following: • Water lines in/associated with authorized facility roads. • Recycled water lines in/associated with authorized facility roads. Drainage System Improvements Authorized facilities include any and all on- and off-site backbone drainage and storm drainage improvements designed to meet the needs of development of the project. These facilities include mains, pipelines and appurtenances, outfalls and water quality measures, temporary drainage facilities, detention/retention basins, and drainage pretreatment facilities; drainage ways/channels, pump stations, landscaping, and irrigation; access roads, gates, and fencing; striping and signage; and the following: • All storm drain lines and facilities in/associated with authorized facility roadways. • Retention, detention, hydro-modification, and other drainage facilities. Wastewater System Improvements Authorized facilities include any and all on- and off-site backbone wastewater facilities designed to meet the needs of development of the project. These facilities include pipelines and all appurtenances thereto; manholes; tie-in to existing main line; force mains; lift stations; odor- B-2 Packet Pg. 308 Item 13 control facilities; sewer treatment plant improvements and permitting related thereto; and related sewer system improvements, including but not limited to: • All wastewater facilities in/associated with authorized facility roadways. Solid Waste Improvements Authorized facilities include any and all backbone solid waste improvements designed to meet the needs of development of the project. Park and Landscape Corridor Improvements Authorized facilities include any and all improvements to parks and landscape corridors located in the project. Open Space Improvements Authorized facilities include any and all open space improvements designed to meet the needs of development of the project, including bike trails, bike/pedestrian bridges, storm drain crossings, storm drain detention/retention, wetland mitigation, tree mitigation, agricultural mitigation or wetland mitigation, property acquisition, endowment payments for open space management, landscaping and irrigation, access gates and fencing, and related open space improvements. Utilities Authorized facilities include any and all on- and off-site utility improvements designed to meet the needs of development of the project, including but not limited to: • New 24” HDPE Sewer Trunk Line. All utility improvements, easement payments, and land acquisition not located under or alongside transportation improvements are considered authorized facilities. B-3 Packet Pg. 309 Item 13 FORMATION, ADMINISTRATIVE AND INCIDENTAL EXPENSES It is anticipated that the following incidental expenses may be incurred for the Community Facilities District: Engineering services Special tax consultant services City review and administration Bond counsel services Bond counsel expenses Disclosure counsel services Disclosure counsel expenses Independent municipal advisor services and expenses Appraiser services Market absorption study and real estate economist services Initial bond transfer agent, fiscal agent, registrar and paying agent fees Rebate calculation service set up charge Bond printing Offering memorandum printing and mailing costs Publishing, mailing and posting of notices Underwriter’s discount Bond reserve fund Capitalized interest Bond syndication costs Governmental notification and filing costs Credit enhancement costs Real estate acquisition costs Rating agency fees Charges and fees of City other than those waived Certain annual costs may be included in each annual special tax levy. These include: Annual bond transfer agent, fiscal agent, registrar and paying agent fees Annual rebate calculation costs Special tax consultant costs and administration expenses Other necessary consultant costs Costs of posting and collecting the special taxes Personnel and Administrative costs of the City Arbitrage rebate Continuing disclosure reporting and compliance B-4 Packet Pg. 310 Item 13 Economic & Planning Systems, Inc. (EPS) 1 F:\Active Projects\182000\181049 San Luis Ranch CFD\Rate and Method\181049 rm9 FINAL.docx City of San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch) San Luis Obispo County, California AMENDED AND RESTATED RATE, METHOD OF APPORTIONMENT, AND MANNER OF COLLECTION OF SPECIAL TAX 1. Basis of Special Tax Levy A Special Tax authorized under the Mello-Roos Community Facilities Act of 1982 (Act) applicable to the land in the City of San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch) (CFD) of the City of San Luis Obispo (City) shall be levied and collected according to the tax liability determined by the City through the application of the appropriate amount or rate, as described below. 2. Definitions “Acre” or “Acreage” means the land area of an Assessor’s Parcel as shown on an Assessor’s Parcel Map, or if the land area is not shown on an Assessor’s Parcel Map, the land area shown on the applicable final map or other Development Plan. “Act” means the Mello-Roos Community Facilities Act of 1982, as amended, Sections 53311 and following of the California Government Code. “Administrative Expenses” means the actual or reasonably estimated costs related to the administration of the CFD, including, but not limited to, these: a. Costs of computing Special Taxes and preparing annual Special Tax collection schedules (whether by the City or any designee thereof or both). b. Costs of collecting the Special Taxes (whether by the County, the City, or otherwise). c. Costs of remitting the Special Taxes to the Trustee. d. Costs of the Trustee (including its legal counsel) in the discharge of the duties required of it under the Bond Indenture. e. Costs to the City, CFD, or any designee thereof of complying with arbitrage rebate requirements. f. Costs to the City, CFD, or any designee thereof of complying with City, CFD, or obligated persons disclosure requirements. g. Costs associated with preparing Special Tax disclosure statements. Packet Pg. 311 Item 13 Rate, Method of Apportionment, and Manner of Collection of Special Tax Exhibit A March 7, 2019 Economic & Planning Systems, Inc. (EPS) 2 F:\Active Projects\182000\181049 San Luis Ranch CFD\Rate and Method\181049 rm9 FINAL.docx h. Costs incurred in responding to public inquiries regarding the Special Taxes. i. Costs to the City, CFD, or designee thereof related to any appeal of the Special Taxes. j. Costs associated with the release of funds from an escrow account, if any. k. Costs to the City for the issuance of Bonds authorized by the CFD that are not recovered through the Bond sale proceeds. l. Amounts estimated to be advanced or already advanced by the City for any other administrative purposes, including attorney’s fees and other costs related to collection of the Special Taxes and commencing and pursuing to completion any foreclosure of delinquent Special Taxes. “Administrator” means the City Manager of the City, or his or her designee. “Annual Costs” means, for any Fiscal Year, the total of these: a. Administrative Expenses for such Fiscal Year. b. Debt Service to be paid from Special Taxes during the Bond Year commencing during such Fiscal Year. c. The amount needed to pay other periodic costs on the Bonds, including but not limited to credit enhancement and any rebate payments on the Bonds. d. The amount needed to replenish the reserve fund for the Bonds to the level required under the Bond Indenture, to the extent not included in a computation of Annual Costs in a previous Fiscal Year. e. The amount needed to (1) cure any delinquencies in the payment of principal or interest on Bonds, which have occurred in the prior Fiscal Year, to the extent not otherwise included in a computation of Annual Costs in the current or any previous Fiscal Year, and (2) to fund any foreseeable deficiency of the amount to be available for the payment of principal or interest on Bonds, which are expected to occur in such Fiscal Year, to the extent not included in a computation of Annual Costs in the current or any previous Fiscal Year. f. The amount needed to (1) cure any delinquencies in the payment of the Special Tax in the prior Fiscal Year, to the extent not otherwise included in a computation of Annual Costs in the current or any previous Fiscal Year, and (2) to fund any foreseeable deficiency in the payment of the Special Tax for that Fiscal Year which is expected to occur in such Fiscal Year, to the extent not included in a computation of Annual Costs in the current or any previous Fiscal Year. g. Costs of acquisition, construction, and improvements of Authorized Facilities to be funded on a Pay-As-You-Go Basis, in amounts determined by the Administrator. h. Less any Capitalized Interest and any credits provided under a Bond Indenture. Packet Pg. 312 Item 13 Rate, Method of Apportionment, and Manner of Collection of Special Tax Exhibit A March 7, 2019 Economic & Planning Systems, Inc. (EPS) 3 F:\Active Projects\182000\181049 San Luis Ranch CFD\Rate and Method\181049 rm9 FINAL.docx i. Less any available earnings on the reserve fund, Special Tax funds, available capitalized interest or any other available revenues of the CFD or the City that may be used to fund Annual Costs, to the extent determined by the Administrator. “Anticipated Construction Proceeds” means the amount anticipated to be available through the CFD for acquiring or constructing Authorized Facilities, which is equal to $14.0 million at formation of the CFD. This amount is increased on July 1 of the current Fiscal Year for the prior calendar year by the average increase in the ENR-CCI. “Assessor’s Parcel” means a lot or Parcel with an assigned Assessor’s Parcel Number in the maps used by the County Assessor in preparing the tax roll. “Assessor’s Parcel Map” means an official map of the County Assessor designating Parcels by Assessor’s Parcel Number. “Assessor's Parcel Number” means the parcel identification as assigned by the County Assessor on the equalized tax roll. “Authorized Facilities” means those facilities and fees to be financed by the CFD. “Base Year” means the Fiscal Year beginning July 1, 2018, and ending June 30, 2019. “Benefit Share” means the Maximum Annual Special Tax for a Parcel divided by the Maximum Annual Special Tax Revenue for all Taxable Parcels and their assigned Maximum Annual Special Tax. “Bond(s)” means any bond(s) issued by the CFD under the Act and any other debt, as defined in the Act, payable from the Special Tax for the CFD. “Bond Indenture” means the indenture, resolution, fiscal agent agreement, or other financing document pursuant to which any Bonds are issued. “Bond Share” means the share of Outstanding Bonds assigned to a Parcel as specified in Section 7 hereof. “Building Permit” means a permit issued by the City for the construction of a Residential Use or Nonresidential Use. “Building Square Foot(age)” has the same meaning as that defined for the School Mitigation Fee by California Government Code Section 65995 for “Assessable Space,” which is “all of the square footage within the perimeter of a residential structure, not including any carport, walkway, garage, overhang, patio, enclosed patio, detached accessory structure, or similar area” as determined by the “as built” size of the structure for the initial Building Permit. Future additions to Residential Units are not to be considered for potential increases to the Special Tax. “Capitalized Interest” means funds in any capitalized interest fund available to pay debt service on Bonds. “CFD” means Community Facilities District No. 2019-1 (San Luis Ranch) of the City. “City” means the City of San Luis Obispo in San Luis Obispo County, California. “Council” means the City Council of the City acting for the CFD under the Act. Packet Pg. 313 Item 13 Rate, Method of Apportionment, and Manner of Collection of Special Tax Exhibit A March 7, 2019 Economic & Planning Systems, Inc. (EPS) 4 F:\Active Projects\182000\181049 San Luis Ranch CFD\Rate and Method\181049 rm9 FINAL.docx “County” means the County of San Luis Obispo, California. “Debt Service” means the total annual amount of Bond principal, interest, and the scheduled sinking fund payments of the Bonds in a calendar year. “Developed Parcel” means, in any Fiscal Year: a. For Single-Family Parcels: All Parcels for which a Building Permit for a Residential Use structure which consists of a single-family house that was issued before May 1 of the preceding Fiscal Year. b. For Multifamily Parcels: All Parcels for which a Building Permit for new construction of a Residential Use structure, other than a single-family house, that was issued before May 1 of the preceding Fiscal Year. Once a Parcel is defined as a Developed Parcel it shall be taxed as such under the provisions of this RMA. “Development Plan” means a condominium plan, apartment plan, site plan, or other development plan that identifies such information as the type of structure, acreage, square footage, or number of Units that are approved to be developed on Residential Use Parcels. “ENR-CCI” means the Engineering News Record—Construction Cost Index for Los Angeles in the prior calendar year, as determined on July 1 of the current Fiscal Year. “Final Map Parcel” means a Parcel designated for development of a single-family residence, which is part of a Final Subdivision Map as of May 1 of the preceding Fiscal Year. The Minimum Annual Special Tax for Final Map Parcels is shown in Attachment 1 by Tax Category. “Final Subdivision Map” means a recorded map designating the final Parcel Subdivision for individual Single-Family Parcels. “Fiscal Year” means the period starting July 1 and ending the following June 30. “Full Prepayment” means the complete fulfillment of a Parcel’s Special Tax obligation, as determined by following the procedures in Section 7. “Lot Number” means the numeric designation for all Parcels shown in Map 1 and Attachment 1 at formation of the CFD. “Market-Rate Unit” means a Unit that is not a Workforce/Affordable Unit. “Maximum Annual Special Tax” means the maximum amount of Special Taxes assigned to a Taxable Parcel, as applicable by Tax Category. “Maximum Annual Special Tax Revenue” means the greatest amount of Special Tax that can be collected in total from a group of Parcels (such as Developed Parcels) by levying the Maximum Annual Special Tax. “Minimum Annual Special Tax” means the minimum amount of Special Tax as assigned to Taxable Parcels, shown in Attachment 1, at formation of the CFD. Packet Pg. 314 Item 13 Rate, Method of Apportionment, and Manner of Collection of Special Tax Exhibit A March 7, 2019 Economic & Planning Systems, Inc. (EPS) 5 F:\Active Projects\182000\181049 San Luis Ranch CFD\Rate and Method\181049 rm9 FINAL.docx “Multifamily For-Rent” or “Multifamily For-Rent Parcel” means any Parcel designated or developed for more than one residential dwelling Unit per Parcel and where such units are initially offered for rent to the general public and cannot be purchased by individual homeowners. Such uses may consist of apartments or structures such as duplexes or triplexes. Each residential dwelling Unit within Multifamily For-Rent or Multifamily For-Rent Parcels is not expected to have its own distinct Assessor’s Parcel Number. “Multifamily For-Sale” or “Multifamily For-Sale Parcel” means any Parcel designated or developed for more than one residential dwelling Unit within a single building or structure and that may share at least one common wall where such units are not initially offered for rent to the general public and initially may be offered for sale to individual homeowners. Such uses may consist of condominiums, townhouses, or buildings such as half-plexes or time-share units. Multifamily For-Sale Parcels are anticipated to have their own distinct Assessor’s Parcel Number as is the case in residential condominium projects. Once designated as Multifamily For-Sale or Multifamily For-Sale Parcel, the Parcel shall remain so designated unless the original structures are demolished. “Nonresidential Use” means a Taxable Parcel zoned for land uses other than Residential Uses, such as hotel, commercial, office, or retail. Nonresidential Uses planned at CFD formation are tax-exempt. “Original Parcel” means a Parcel identified in Attachment 1 and Map 1 by Lot Number at formation of the CFD. “Outstanding Bonds” means the total principal amount of Bonds that have been issued and not fully repaid or legally defeased. “Parcel” means any Assessor’s Parcel in the CFD based on the equalized tax rolls of the County as of January 1 of each Fiscal Year. “Partial Prepayment” means the partial fulfillment of a Parcel’s Special Tax obligation, as determined by following the procedures in Section 7. “Pay-As-You-Go Basis” means that of the use of Special Tax revenues to directly fund the costs of acquisition, construction, and improvement of Authorized Facilities not financed by Bonds, as a part of an acquisition agreement or funding agreement with the City. “Prepayment” means the partial or complete fulfillment of a Parcel’s Special Tax obligation, as determined by following the procedures in Section 7. “Proportionately” means that the ratio of the actual Special Tax levy to the Maximum Annual Special Tax is equal for all Developed Parcels. For Final Map Parcels, Proportionately means that the ratio of the actual Special Tax levy to the Maximum Annual Special Tax is equal for all Final Map Parcels. For Undeveloped Parcels, Proportionately means that the ratio of the actual Special Tax levy to the Maximum Annual Special Tax is equal for all Undeveloped Parcels. “Public Parcel” means any Parcel that is or is intended to be publicly owned, as designated in any final map, that is normally exempt from the levy of general ad valorem property taxes under California law, including, but not limited to, public streets, schools, parks, and public drainageways, landscaping, wetlands, greenbelts, and open space. Packet Pg. 315 Item 13 Rate, Method of Apportionment, and Manner of Collection of Special Tax Exhibit A March 7, 2019 Economic & Planning Systems, Inc. (EPS) 6 F:\Active Projects\182000\181049 San Luis Ranch CFD\Rate and Method\181049 rm9 FINAL.docx “Remainder Parcel” means a portion of a unit of land that is created as a result of the recording of a Final Subdivision Map or other Subdivision, which results in a designated remainder as defined in Government Code Section 66424.6(a) (Remainder Parcel). Such a Remainder Parcel may contain taxable and tax-exempt uses, such as Residential Uses, and Public Parcels, such as park sites. “Remaining Facilities Costs” means the amount of Anticipated Construction Proceeds less construction proceeds from previous Bond issuances and less costs of Authorized Facilities funded on a Pay-As-You-Go Basis from the levy of the Special Tax. “Remaining Facilities Cost Share” means the Remaining Facilities Costs multiplied by the Benefit Share. “Reserve Fund” means any debt service reserve fund established pursuant to the Bond Indenture. “Reserve Fund Requirement” means the amount required to be held in any Reserve Fund. “Reserve Fund Share” means the amount on deposit in any Reserve Fund, but in any event not to exceed the Reserve Fund Requirement, multiplied by the Benefit Share for a given Parcel. “Residential Use” means a Parcel designated for residential use, such as single-family residential Units, residential condominiums, townhouses, or apartments. “RMA” means this Rate, Method of Apportionment, and Manner of Collection of Special Tax. “Single-Family Parcel” means, in any Fiscal Year, all Parcels in the CFD for which a building permit was issued or may be issued for construction of a Unit that is a single-family residential, residential condominium, or townhouse Unit. “Special Tax(es)” mean(s) any tax levy under the Act in the CFD. “Subdivision” or “Subdivided” means a division of a Parcel into two or more Parcels through Parcel reconfiguration, lot-line adjustments, or the Subdivision Map Act process. A Subdivision also may include the merging of two or more Parcels to create new Parcels. “Successor Parcel” means a Parcel created by the Subdivision of an Original Parcel or a Successor Parcel. “Tax Category” means the categories of taxable land uses shown in Attachments 1 and 2. “Tax Collection Schedule” means the document prepared by the Administrator for the County Auditor-Controller to use in levying and collecting the Special Taxes each Fiscal Year. “Tax Escalation Factor” means a factor of 2 percent by which the Maximum Annual Special Tax and Minimum Annual Special shall be increased annually following the Base Year. “Taxable Acreage” means that area of a Parcel determined by the Administrator to become a Taxable Parcel or Parcels upon further Subdivision. An example might be that a Final Subdivision Map creates a Remainder Parcel that, according to Attachment 1, contains both taxable uses and tax-exempt uses. “Taxable Parcel” means any Parcel that is not a Tax-Exempt Parcel. Packet Pg. 316 Item 13 Rate, Method of Apportionment, and Manner of Collection of Special Tax Exhibit A March 7, 2019 Economic & Planning Systems, Inc. (EPS) 7 F:\Active Projects\182000\181049 San Luis Ranch CFD\Rate and Method\181049 rm9 FINAL.docx “Tax-Exempt Parcel” means a Parcel not subject to the annual Special Tax. Tax-Exempt Parcels include (a) Nonresidential Use Parcels at the time of CFD formation, (b) Multifamily For- Rent Parcels at the time of CFD formation, (c) Public Parcels, and (d) Parcels owned by the City, school districts, special districts, or the state or federal government. A Taxable Parcel that is acquired by a public agency, the Parcel shall remain a Taxable Parcel as per the provisions of Section 4.m. Certain privately-owned Parcels also may be exempt from the levy of annual Special Taxes, including common areas owned by homeowner’s associations or property owner associations, wetlands, detention basins, water quality ponds, and open space, as determined by the Administrator. “Trustee” means a national banking association organized and existing under the laws of the United States acting as a trustee or fiscal agent for Bonds. “Undeveloped Parcel” means a Taxable Parcel that is not a Developed Parcel or Final Map Parcel. “Unit” means, for a Single-Family Parcel, the individual residential unit on such Parcel, or for a Multifamily For-Rent Parcel or Multifamily For-Sale Parcel, an individual residential unit in a multifamily building. “Workforce/Affordable Unit(s)” means Residential Use Units identified in Attachment 1 by Tax Category. If there are a greater number of Units for which Building Permits are to be issued within a Tax Category, the Administrator shall require that the Maximum Annual Special Tax is prepaid in fill using the Prepayment procedures in Section 7. 3. D uration of the Special Tax The Special Tax will be levied and collected for as long as it is needed to pay Annual Costs; however, in no event shall the Special Tax be levied on any Parcel in the CFD after Fiscal Year 2062-63. When all Authorized Facilities and other Annual Costs incurred by the CFD have been paid, the Special Taxes shall cease to be levied. The City shall direct the County Recorder to record a Notice of Cessation of Special Tax. Such notice will state that the obligation to pay the Special Tax has ceased and that the lien imposed by the Notice of Special Tax Lien is extinguished. In addition, the Notice of Cessation of Special Tax shall identify the book and page of the Book of Maps of Assessment and Community Facilities Districts where the map of the boundaries of the CFD is recorded. 4. Administrative Tasks Tasks required of the Administrator are discussed below: a. Annual Special Tax Escalation. The Administrator shall increase the Minimum Annual Special Tax and Maximum Annual Special Tax (for Developed Parcels, Final Map Parcels, and Undeveloped Parcels) by the Tax Escalation Factor in all Fiscal Years following the Base Year. b. Assignment of the Minimum Annual Special Tax and Maximum Annual Special Tax to Original Parcels. A Final Subdivision Map has been approved by the City creating all Taxable Parcels. Packet Pg. 317 Item 13 Rate, Method of Apportionment, and Manner of Collection of Special Tax Exhibit A March 7, 2019 Economic & Planning Systems, Inc. (EPS) 8 F:\Active Projects\182000\181049 San Luis Ranch CFD\Rate and Method\181049 rm9 FINAL.docx Attachment 1 identifies the Minimum Annual Special Tax and Maximum Annual Special Tax for each Original Parcel and Lot Number at CFD formation, as shown in Attachment 1. The Minimum Annual Special Tax for a Final Map Parcel is determined for each Tax Category and planned Building Square Footage per Unit based on the Minimum Annual Special Tax per Unit times the number of assigned Units for each Tax Category at CFD formation. The Minimum Annual Special Tax for an Undeveloped Parcel (Lot 1) is determined by multiplying the Minimum Annual Special Tax per Acre times the Acreage of the Parcel. The Maximum Annual Special Tax is determined for each Tax Category and planned Building Square Footage per Unit based on the Maximum Annual Special Tax per Unit times the number of assigned Units for each Tax Category at CFD formation. Map 1 shows the location of expected future Parcels in each Tax Category. Future Parcels are identified in Map 1 by land use designations and final map lot numbers. The Minimum Annual Special Tax assigned at CFD formation to each Original Parcel shall not be reduced as a result of future development approvals. The following procedures provide instructions for the assignment of the Minimum Annual Special Tax and Maximum Annual Special Tax as the CFD is built out. Once the Minimum Annual Special Tax and Maximum Annual Special Tax is assigned to a Parcel, it shall remain subject to that Special Tax unless fully prepaid using the provisions of Section 7, or the Special Taxes are transferred to another Parcel using the provisions of Section 4.i. c. Assignment of the Minimum Annual Special Tax and Maximum Annual Special Tax upon Recordation of a Final Subdivision Map: Attachment 1 assigns the number of anticipated Units for each Tax Category. If upon recordation of the Final Subdivision Map there are fewer Units created, perform the following procedures to assign the Minimum Annual Special Tax and Maximum Annual Special Taxes to Final Map Parcels. 1. Identify the number of Units assigned to the Tax Category by Building Square Footage range and Minimum Annual Special Tax and Maximum Annual Special Tax assigned to the Original or Successor Parcel in Attachment 1. (Assume that the number of Workforce/Affordable Units remain the same for each Tax Category). 2. Identify the number of Units created by the Final Subdivision Map for each Tax Category. 3. Reduce the number of Units shown in Attachment 1 for the Tax Category and Building Square Footage range by reducing the Units assigned to each Building Square Footage range equally until the total Units for the Tax Category match the Units created by the Final Subdivision Map. If the number of Units that must be reduced is an odd number, apply the remaining Unit reduction to the lower Building Square Footage range for the Tax Category. 4. Proportionately increase the Minimum Annual Special Tax per Unit and Maximum Annual Special Tax per Unit such that the amounts for each Taxable Parcel, when summed, equals the Minimum Annual Special Tax and Maximum Annual Special Tax assigned to the Original or Successor Parcel immediately prior Packet Pg. 318 Item 13 Rate, Method of Apportionment, and Manner of Collection of Special Tax Exhibit A March 7, 2019 Economic & Planning Systems, Inc. (EPS) 9 F:\Active Projects\182000\181049 San Luis Ranch CFD\Rate and Method\181049 rm9 FINAL.docx to such calculation. The Administrator shall update Attachment 1 showing the newly assigned Minimum Annual Special Tax and Maximum Annual Special Tax per Unit and to the Original or Successor Parcel. 5. If the number of Units are greater than or equal to the Units assigned in Attachment 1, assign the Maximum Annual Special Tax and Maximum Annual Special Tax per Unit as shown in Attachment 1. There shall be no loss of Minimum Annual Special Tax or Maximum Annual Special Tax for an Original or Successor Parcel as a result of the recordation of the final map. d. Assignment of the Maximum Annual Special Tax to Single-Family Parcels at Building Permit Issuance: At issuance of a Building Permit for Residential Uses, assign the Maximum Annual Special Tax shown in Attachment 1 for the Tax Category and Building Square Footage Range to the Taxable Parcel. In assigning the Maximum Annual Special Tax to the Developed Parcel, the Minimum Annual Special Tax may remain equal to the Maximum Annual Special Tax, or may be increased from the Minimum Annual Special Tax based upon the Building Square Footage identified in the Building Permit. The amount of the assigned Special Tax shall not decrease upon issuance of a Building Permit. e. Assignment of the Minimum Annual Special Tax and Maximum Annual Special Tax to Multifamily For-Sale Parcels at Building Permit Issuance: At formation of the CFD, the Minimum Annual Special Tax and Maximum Annual Special Tax, as shown in Attachment 1 for the Tax Category and Building Square Footage range, is assigned to each of the 135 Units assigned to Lot 1, as shown in Map 1. The sum of the Minimum Annual Special Tax and the sum of the Maximum Annual Special Tax for each Unit is the amount of each Special Tax assigned to Lot 1 at formation. As one or more Building Permits are issued for the construction of the Units, use the following procedures to assign the Minimum Annual Special Tax and Maximum Annual Special Tax to Taxable Parcels. 1. Identify the Minimum Annual Special Tax and Maximum Annual Special Tax assigned to Lot 1 in Attachment 1. 2. At issuance of a Building Permit for Multifamily For-Sale Parcels, assign the Maximum Annual Special Tax per Unit, as shown in Attachment 1 for the Tax Category and Building Square Footage range, to each Unit as shown in the Building Permit. 3. If the Building Permit has been issued to construct all planned Units (as shown in Attachment 1) for Lot 1, sum the Maximum Annual Special Tax assigned to each Unit. 4. If the sum of the amounts in Step 4.e.3 is equal to, or greater than, the amount of Maximum Annual Special Tax identified in Step 4.e.1, assign this Maximum Annual Special Tax to each Unit. 5. If the sum of the amounts in Step 4.e.3 is less than the amount identified in Step 4.e.1, Proportionately increase the Maximum Annual Special Tax per Unit for each Unit until the sum of the amount of the Maximum Annual Special Tax for each Unit is equal to the Packet Pg. 319 Item 13 Rate, Method of Apportionment, and Manner of Collection of Special Tax Exhibit A March 7, 2019 Economic & Planning Systems, Inc. (EPS) 10 F:\Active Projects\182000\181049 San Luis Ranch CFD\Rate and Method\181049 rm9 FINAL.docx amount identified in Step 4.e.1. The Administrator shall update Attachment 1 showing the newly assigned Maximum Annual Special Tax per Unit and to the Original or Successor Parcel. 6. If the construction of the proposed 135 Units is a phased build out over more than one Fiscal Year, assign the Maximum Annual Special Tax to Developed Parcels based upon the Building Square Footage of each Unit to each Unit (as shown in the Building Permit). a. Multiply the Maximum Annual Special Tax for each Unit (as shown in Attachment 1) times the number of Units identified in the Building Permit. b. Subtract the amount of Maximum Annual Special Tax from Step 4.e.6.a the amount of Maximum Annual Special Tax identified in Step 4.e.1. Assign this amount as the Maximum Annual Special Tax to be assigned to the Remainder Parcel c. Repeat the above procedures in the following Fiscal Year(s) to assign the Minimum Annual Special Tax and Maximum Annual Special Tax to the remaining Units assigned to the Remainder Parcel until the Special Taxes are assigned to 135 Units, or the Administrator determines that all Units have been constructed for Lot 1. f. Multifamily For-Rent Parcels Developed as Multifamily For-Sale Parcels: Lot 2 shown in Map 1 is designated under the RMA as a Multifamily For-Rent Parcel which is a Tax-Exempt Parcel. If Units identified in Attachment 1 as Multifamily For-Rent are developed as Multifamily For- Sale Parcels, assign the Minimum Annual Special Tax per Unit and Maximum Annual Special Tax per Unit to such Parcels using the amounts shown in Attachment 2 for the appropriate Building Square Footage of each Taxable Parcel. g. If a Nonresidential Use Original or Successor Parcel is Subdivided creating Residential Use Parcels: When Nonresidential Use Parcels shown in Attachment 1 are Subdivided into Successor Parcels that are Residential Use, use the procedure below to assign the Minimum Annual Special Tax and Maximum Annual Special Tax to Parcels. 1. Identify the Minimum Annual Special Tax and Maximum Annual Special Tax for the Tax Category shown in Attachment 2 for the proposed Residential Uses. 2. Assign the Minimum Annual Special Tax and Maximum Annual Special Tax to each planned Unit. h. Reassignment of the Minimum Annual Special Tax and Maximum Annual Special Tax upon Land Use Change or Remapping: If there is a land use change or remapping of Parcels shown in Map 1, the Maximum Annual Special Tax and Maximum Annual Special Tax will be reassigned to newly created Parcels using the following procedures. 1. Identify all Taxable Parcels in Attachment 1 and on Map 1 that are subject to the land use change or remapping. Packet Pg. 320 Item 13 Rate, Method of Apportionment, and Manner of Collection of Special Tax Exhibit A March 7, 2019 Economic & Planning Systems, Inc. (EPS) 11 F:\Active Projects\182000\181049 San Luis Ranch CFD\Rate and Method\181049 rm9 FINAL.docx 2. Calculate the Minimum Annual Special Tax and Maximum Annual Special Tax (by Building Square Footage range) for all Taxable Parcels identified in Step 4.h.1. 3. Identify land use categories for remapped Taxable Parcels. 4. Assign the corresponding Minimum Annual Special Tax and Maximum Annual Special Tax to remapped Taxable Parcels based upon Tax Categories and Building Square Footage ranges identified in Attachment 2. 5. Calculate the Minimum Annual Special Tax and Maximum Annual Special Tax for all Taxable Parcels from Step 4.h.4. 6. If the amount of the Minimum Annual Special Tax and Maximum Annual Special Tax from Step 4.h.2 is less than the amount summed in Step 4.h.4, assign the Minimum Annual Special Tax and Maximum Annual Special Tax per Unit (increased by the Tax Escalation Factor to the current Fiscal Year) to each Taxable Parcel. 7. If the amount of the Minimum Annual Special Tax and Maximum Annual Special Tax from Step 4.h.2 is greater than the amount summed in Step 4.h.4, increase the Minimum Annual Special Tax and Maximum Annual Special Tax per Unit (increased by the Tax Escalation Factor to the current Fiscal Year) Proportionately for each Taxable Parcel until the sum of the Minimum Annual Special Tax and Maximum Annual Special Tax for all Taxable Parcels is equal to the amount summed in Step 4.h.2. i. Workforce/Affordable Units Assigned at Formation of the CFD: For each Tax Category, the RMA assigns a number of Units defined as Workforce/Affordable Units. If there are more Workforce/Affordable Units constructed within a Tax Category than shown in Attachment 1, the Administrator shall require that the Maximum Annual Special Tax be prepaid using the provisions of Section 7. The Maximum Annual Special Tax for the Workforce/Affordable Units is assigned using Tax Categories in Attachment 2. j. Workforce/Affordable Units that Become Market-Rate Units. If, in any Fiscal Year, the Administrator, or his or her designee, determines that a Unit that previously had been designated as a Workforce/Affordable Unit no longer qualifies as such, the Administrator shall assign the Minimum Annual Special Tax and Maximum Annual Special Tax per Unit based on their Tax Category and Building Square Footage range as shown in Attachment 2, as adjusted by the Tax Escalation Factor. k. Transfer of the Special Tax from Taxable Parcel to Another. The Minimum Annual Special Tax and Maximum Annual Special Taxes shown in Attachment 1 were determined based on the expected Tax Categories for each Original Parcel shown in Attachment 1. If the number of planned residential Units is transferred from one Original or Successor Parcel to another, the City may, in its sole discretion, allow for a transfer of the Minimum Annual Special Tax and Maximum Annual Special Tax from one Taxable Parcel to another. Such a transfer shall be allowed only if (1) all adjustments are agreed to in writing by the affected property owners and the Administrator, and (2) there is no reduction in the total Minimum Annual Special Tax Packet Pg. 321 Item 13 Rate, Method of Apportionment, and Manner of Collection of Special Tax Exhibit A March 7, 2019 Economic & Planning Systems, Inc. (EPS) 12 F:\Active Projects\182000\181049 San Luis Ranch CFD\Rate and Method\181049 rm9 FINAL.docx and Maximum Annual Special Tax revenues as a result of the transfer. Should a transfer result in an amendment to Attachment 1 of the Notice of Special Tax Lien, the requesting property owner shall bear the costs to affect the transfer in the CFD records and prepare the required amendments to the Notice of Special Tax Lien and Attachment 1. Before the transfer, the City may require a deposit from the requesting property owner for such costs. l. Conversion of a Tax-Exempt Parcel to a Taxable Parcel. If a Tax-Exempt Parcel is not needed for public use and is converted to a taxable use or transferred to a private owner, it shall become subject to the Special Tax. The Minimum Annual Special Tax and Maximum Annual Special Tax for the newly Taxable Parcel will be determined using the provisions of Sections 4 and 5 of the RMA. m. Taxable Parcels Acquired by a Public Agency. A Taxable Parcel that is acquired by a public agency after the CFD is formed will remain subject to the applicable Special Tax unless the Special Tax obligation is satisfied pursuant to Section 53317.5 of the Government Code. An exception to this may be made if a Public Parcel, such as a park site, is relocated to a Taxable Parcel, in which case the previously Tax-Exempt Parcel of comparable acreage becomes a Taxable Parcel and the Minimum Annual Special Tax Maximum Annual Special Tax from the previously Taxable Parcel is transferred to the new Taxable Parcel. This trading of a Parcel from a Taxable Parcel to a Public Parcel will be permitted to the extent there is no net loss in Minimum Annual Special Tax and Maximum Annual Special Tax Levy for all Taxable Parcels in the CFD, and the transfer is agreed to by the owners of the Parcels involved in the transfer and the Finance Director. 5. Assignment of the Special Tax a. Classification of Parcels. For purposes of the next Fiscal Year tax levy, by June 30 of each Fiscal Year, using the Definitions in Section 2, the Parcel records of the Assessor’s secured tax roll as of January 1, and other City development approval records, the Administrator shall cause: 1. Each Parcel to be classified as a Taxable Parcel or Tax-Exempt Parcel. 2. Each Parcel to be classified as a Developed Parcel, a Final Map Parcel, or an Undeveloped Parcel. b. Assignment of the Minimum Annual Special Tax and Maximum Annual Special Tax to Taxable Parcels. The Special Taxes will be assigned to each Taxable Parcel each Fiscal Year using the procedures (not all steps may be applicable for each such Parcel) in Section 4. 6. Calculating Annual Special Taxes/Method of A pp ortionment The Administrator will compute the Annual Cost and determine the annual Special Tax levy for each Taxable Parcel based on the assignment of the Special Tax in Sections 4 and 5. The Administrator then will determine the tax levy for each Taxable Parcel using the following process: a. Compute the Annual Costs using the definition of Annual Costs in Section 2. Packet Pg. 322 Item 13 Rate, Method of Apportionment, and Manner of Collection of Special Tax Exhibit A March 7, 2019 Economic & Planning Systems, Inc. (EPS) 13 F:\Active Projects\182000\181049 San Luis Ranch CFD\Rate and Method\181049 rm9 FINAL.docx Step 6.a.1: Levy the Special Tax Proportionately for each Developed Parcel up to the lesser of the Annual Cost calculated in Section 6.a and the Maximum Annual Special Tax for each Developed Parcel. Step 6.a.2: If the levy calculated in Step 6.a.1 is less than the Annual Cost, levy the Special Tax Proportionately for each Final Map Parcel, up to the amount that when added to the levy calculated in Step 6.a.1, equals the lesser of the Annual Cost and the Maximum Annual Special Tax for each Final Map Parcel. Step 6.a.3: If the total of the levy calculated in Step 6.a.1 and Step 6.a.2 is less than the Annual Cost, levy the Special Tax Proportionately for each Undeveloped Parcel, up to the amount that when added to the levy calculated in Step 6.a.1 and Step 6.a.2, equals the lesser of the Annual Cost and the Maximum Annual Special Tax for each Undeveloped Parcel. b. Levy on each Taxable Parcel the amount calculated above. c. Prepare the Tax Collection Schedule and, unless an alternative method of collection has been selected pursuant to Section 9, send it to the County Auditor requesting that it be placed on the general, secured property tax roll for the Fiscal Year. The Tax Collection Schedule will not be sent later than the date required by the County Auditor for such inclusion. The Administrator will make every effort to calculate the Special Tax correctly for each Parcel. It will be the burden of the taxpayer to correct any errors in determining which Parcels are subject to the tax and their Special Tax assignments. 7. P repayment of the Special Tax Obligation A property owner may permanently or partially satisfy the Special Tax for a Taxable Parcel by a Full or Partial Prepayment, as permitted under Government Code Section 53344. Prepayments must be made by May 1 to have the Prepayment reflected in the following Fiscal Year’s Special Tax levy. Prepayment is permitted only under the following conditions: • The landowner prepaying the Special Tax on a Parcel has paid any delinquent Special Tax and penalties on that Parcel before Prepayment. • Following Prepayment, amounts in the reserve fund are equal to or greater than the reserve fund requirement. • The City determines that the Prepayment will not jeopardize its ability to make timely payments of Debt Service and maintain a 110-percent annual Debt Service coverage based on Maximum Annual Special Tax Revenues in all years in which issued Bonds will be outstanding. When permitted, the Administrator shall calculate Full Prepayments using the following steps: a. The Full Prepayment amount before any issuance of CFD Bonds shall be calculated using the following procedures: Packet Pg. 323 Item 13 Rate, Method of Apportionment, and Manner of Collection of Special Tax Exhibit A March 7, 2019 Economic & Planning Systems, Inc. (EPS) 14 F:\Active Projects\182000\181049 San Luis Ranch CFD\Rate and Method\181049 rm9 FINAL.docx Step 7.a.1. Determine the Maximum Annual Special Tax for the Parcel for which the Special Tax is to be prepaid using the provisions of Sections 4 and 5, treating such Parcel as a Developed Parcel. Step 7.a.2. Divide the amount from Step 7.a.1. by the Maximum Annual Special Tax Revenue, assuming all Taxable Parcels are Developed Parcels, to determine the Benefit Share for the Full Prepayment Parcel. Step 7.a.3. Multiply the Remaining Facilities Costs, as increased by ENR-CCI from the Base Year, by the Benefit Share to determine the Full Prepayment amount. Step 7.a.4. Add to the amount determined in Step 7.a.3. any costs to the City, including the costs of any City consultants, associated with the preparation of the Full Prepayment calculation. b. The Full Prepayment amount after the issuances of CFD Bonds shall be calculated using the following procedures: Step 7.b.1. Determine the Maximum Annual Special Tax for the Parcel for which the Special Tax is to be prepaid using the provisions of Sections 4 and 5. If the Parcel is not a Developed Parcel, assign the Maximum Annual Special Tax for the Tax Category for the Prepayment Parcel assuming the Building Square Footage is within the higher range of Maximum Annual Special Taxes for the Tax Category. Step 7.b.2. Divide the amount from Step 7.b.1. by the Maximum Annual Special Tax Revenue, assuming all Taxable Parcels are Developed Parcels, to determine the Benefit Share for the Parcel. Step 7.b.3. Multiply the Benefit Share by the total amount of Outstanding Bonds to determine the Bond Share for the Full Prepayment Parcel. Step 7.b.4. Multiply the Benefit Share by the Remaining Facilities Costs, as increased by ENR-CCI from the Base Year, to determine the Remaining Facilities Cost Share for the Full Prepayment Parcel. Step 7.b.5. Sum the Bond Share and Remaining Facilities Cost Share from Steps 7.b.3. and 7.b.4. Step 7.b.6. Determine the total amount of Bonds to be called by rounding the amount summed in Step 7.b.5. down to the nearest $5,000. Step 7.b.7. Multiply the amount calculated in Step 7.b.6. by the call premium for the next available call date. Step 7.b.8. Determine the Reserve Fund Share for the Full Prepayment Parcel by multiplying the Reserve Fund Requirement by the Benefit Share. Step 7.b.9. Reduce the amount calculated in Step 7.b.5. by the amount of the Reserve Fund Share in Step 7.b.8., provided the amount in the Reserve Fund equals the Reserve Fund Requirement after reduction. Packet Pg. 324 Item 13 Rate, Method of Apportionment, and Manner of Collection of Special Tax Exhibit A March 7, 2019 Economic & Planning Systems, Inc. (EPS) 15 F:\Active Projects\182000\181049 San Luis Ranch CFD\Rate and Method\181049 rm9 FINAL.docx Step 7.b.10. Determine the Full Prepayment amount by adding to the amount calculated in Step 7.b.9. any fees, call premiums, and interest to the next Bond call date not covered by Special Taxes already levied and collected for the prepaying Parcel, and expenses incurred by the CFD in connection with the Full Prepayment calculation or the application of the proceeds of the Full Prepayment to the call of Outstanding Bonds. Step 7.b.11. If the Special Taxes already have been levied but not collected, the Parcel shall not become a Full Prepayment Parcel until the owner of the Parcel has paid the Special Taxes included on the current property tax bill in addition to the Full Prepayment amount. c. Partial Prepayments are allowed only for Parcels owned by a property owner before the issuance of the initial Building Permit. A Partial Prepayment can occur only once per Assessor’s Parcel. The City may allow a Partial Prepayment if the City determines that the Partial Prepayment will not jeopardize its ability to make timely payments of Debt Service and maintain a 110-percent annual Debt Service coverage based on Maximum Annual Special Tax Revenues in all years where there will be Outstanding Bonds. Partial Prepayments will be calculated as described below: The amount of any Partial Prepayment must be either 25 percent or 50 percent of the Full Prepayment amount determined in Step 7.a.8. A Partial Prepayment may be made in an amount equal to 25 percent or 50 percent of the Full Prepayment desired by the party making a Partial Prepayment, except that the full amount of Administrative Expenses determined in Step 7.a.7 shall be included in the Partial Prepayment. The Maximum Annual Special Tax that can be levied on a Parcel after a Partial Prepayment is made is equal to the Special Tax that could have been levied before the Prepayment, reduced by the percentage of the Full Prepayment that the Partial Prepayment represents, all as determined by or at the direction of the Finance Director. For example, if the Partial Prepayment is equal to 25 percent, the Special Tax applied to the Parcel would be 75 percent of the Maximum Annual Special Tax. c. Upon Full Prepayment, the Administrator shall cause to be recorded a Notice of Cancellation of Special Tax Lien in accordance with Government Code Section 53344. 8. I nterpretation, Application, and Appeal of S pe cial Tax Formula and Procedures Any taxpayer who feels the amount of the Special Tax assigned to a Parcel is in error may file a notice with the Administrator appealing the levy of the Special Tax. The Administrator will then promptly review the appeal and, if necessary, meet with the applicant. If the Administrator verifies the tax should be modified or changed, the Special Tax levy will be corrected and, if applicable in any case, a refund will be granted. Interpretations may be made by resolution of the Council for purposes of clarifying any vagueness or ambiguity as it relates to the Special Tax rate, the method of apportionment, the classification of properties, or any definition applicable to the CFD. Packet Pg. 325 Item 13 Rate, Method of Apportionment, and Manner of Collection of Special Tax Exhibit A March 7, 2019 Economic & Planning Systems, Inc. (EPS) 16 F:\Active Projects\182000\181049 San Luis Ranch CFD\Rate and Method\181049 rm9 FINAL.docx Without Council approval, the Administrator may make minor, non-substantive administrative and technical changes to the provisions of this Exhibit that do not materially affect the rate, method of apportionment, and manner of collection of the Special Tax for purposes of the administrative efficiency or convenience or to comply with new applicable federal, state, or local law. 9. Manner of Collection The Special Tax will be collected in the same manner and at the same time as ad valorem property taxes, provided, however, the Administrator or its designee may directly bill the Special Tax and may collect the Special Tax at a different time, such as on a monthly or other periodic basis, or in a different manner, if necessary, to meet the City’s financial obligations. Packet Pg. 326 Item 13 Attachment 1 City of San Luis Obispo CFD No. 2019-1 (San Luis Ranch) Assignment of the Special Taxes to Original Parcels - Base Year Maximum Annual Minimum Minimum Special Tax Annual Annual For Developed Maximum Annual Original Special Tax Special Tax Parcels Special Tax Parcel Tax Categories Acres Units per Unit/Acre per Tax Category per Unit/Acre per Tax Category [1] [2][1] 067-121-022 Residential Uses per Unit per Unit Low Density Residential (LDR)15.51 1,850 sq. ft. and greater 99 $2,630 $260,370 $3,110 $307,890 Less than 1,850 sq. ft.94 $2,630 $247,220 $2,630 $247,220 Workforce/Affordable Units [3]5 $0 $0 $0 LDR Subtotal 198 $507,590 $555,110 Medium Density Residential (MDR) 5.14 1,600 sq. ft. and greater 41 $2,150 $88,150 $2,630 $107,830 Less than 1,600 sq. ft.29 $2,150 $62,350 $2,150 $62,350 Workforce/Affordable Units [3]13 $0 $0 $0 MDR Subtotal 83 $150,500 $170,180 High Density Residential (HDR) - For Sale [2] Multifamily For-Sale 6.62 per Unit per Unit 1,200 sq. ft. and greater 67 $0 $0 $1,910 $127,970 Less than 1,200 sq. ft.68 $0 $0 $1,600 $108,800 Workforce/Affordable Units [3]30 $0 $0 $0 per Acre per Acre Lot 1 - Undeveloped Parcel [4]$32,629 $216,004 $0 $0 Lot 2 For Rent Multifamily 4.35 134 $0 $0 $0 HDR Subtotal 10.97 299 $216,004 $236,770 Residential Use Totals 31.62 580 $874,094 $962,060 Nonresidential Uses per Acre per Acre Commercial Lot 7 Nonresidential Use 11.44 $0 $0 $0 $0 Lot 8 Nonresidential Use 3.33 $0 $0 $0 $0 Lot 9 Nonresidential Use 3.81 $0 $0 $0 $0 Nonresidential Use Totals 18.58 Public Uses Parks 3.19 $0 $0 $0 $0 Open Space 7.81 $0 $0 $0 $0 Agricultural 52.32 $0 $0 $0 $0 Regional Road 9.00 $0 $0 $0 $0 Local Road 8.84 $0 $0 $0 $0 Public Use Totals 81.16 $0 Totals 131.36 $962,060 "att1" [1] The Minimum Annual Special Tax and Maximum Annual Special Tax per Unit/Acre are increased by 2% annually following the Base Year. [2] The Minimum Annual Special Tax for Final Map Parcels is equal to the Maximum Annual Special Tax assigned to a Tax Category and Building Square Footage range. [3] If there are a greater number of Workforce/Affordable Units Building Permits issued within a Tax Category (LDR, MDR, or HDR), the Administrator shall require the full Prepayment of the Maximum Annual Special Tax for each such Unit constructed. [4] Lot 1 is assigned an Undeveloped Parcel Minimum Annual Special Tax of $32,629 per Taxable Acre at formation of the CFD. Lot Numbers 11 to 208 Lot Numbers 220 to 302 Minimum Annual Special Tax Maximum Annual Special Tax Lot 1 Prepared by EPS 3/13/2019 F:\Active Projects\182000\181049 San Luis Ranch CFD\Models\181049 model 4Packet Pg. 327 Item 13 Attachment 2 City of San Luis Obispo CFD No. 2019-1 (San Luis Ranch) Assignment of the Special Tax by Tax Category - Base Year Minimum Maximum Annual Annual Special Tax Special Tax Tax Category per Unit per Unit/Acre [1][1] Residential Uses per Unit per Unit Low Density Residential (LDR) 1,850 sq. ft. and greater $2,630 $3,110 Less than 1,850 sq. ft.$2,630 $2,630 Workforce/Affordable Units $0 $0 Medium Density Residential (MDR) 1,600 sq. ft. and greater $2,150 $2,630 Less than 1,600 sq. ft.$2,150 $2,150 Workforce/Affordable Units $0 $0 High Density Residential (HDR) - For Sale [2] For-Sale Multifamily 1,200 sq. ft. and greater $0 $1,910 Less than 1,200 sq. ft.$0 $1,600 Less than 600 sq. ft.$1,199 $1,199 Workforce/Affordable Units $0 $0 For-Rent Multifamily $0 $0 Nonresidential Uses per Acre per Acre Commercial $0 $0 Office $0 $0 Hotel $0 $0 "att_2" [1] The Minimum Annual Special Tax and Maximum Annual Special Tax per Unit/Acre are increased by 2% annually following the Base Year. Prepared by EPS 3/13/2019 F:\Active Projects\182000\181049 San Luis Ranch CFD\Models\181049 model 4Packet Pg. 328 Item 13 COMRWV (3)RMH (2)SPRINTL3PBPBPBPBPBPBPBPBDIDI1050 Southwood DriveSan Luis Obispo, CA 93401P 805.544.7407 F 805.544.3863 Map 1Packet Pg. 329Item 13 Page intentionally left blank. Packet Pg. 330 Item 13 4/2/2019 Item 13, Staff Presentation 1 San Luis Ranch Specific Plan 1035 Madonna Road SPEC-ANNX-ER-1502-2015 Public Hearing on Resolutions and Ordinance related to the San Luis Ranch Community Facilities District April 2, 2019 Applicant: MI San Luis Ranch, LLC Recommendation Adopt the following Resolutions related to the San Luis Ranch CFD: Adopt Resolution modifying the previously adopted Resolution of Intention to form a CFD Adopt Resolution of Formation of CFD 2019-1 (San Luis Ranch) Adopt Resolution to Incur Bond Indebtedness within CFD 2019-1 Adopt Resolution calling for a Special Election (landowner approval) Adopt Resolution Declaring Results of Special Election and Directing Recording of Notice of Special Tax Lien Introduce an Ordinance establishing the San Luis Ranch CFD Special Tax 2 1 2 4/2/2019 Item 13, Staff Presentation 2 Presentation Overview Brief Summary of Order of Proceedings Community Facilities District (CFD) Overview Basis for CFD Formation Recommendations from Draft Hearing Report Voter/Landowner Approval to form CFD Resolutions related to CFD Formation Introduction of Ordinance Levying Special Tax within CFD Summary of Previous Actions Taken related to the CFD Recommendation and Next Steps in the CFD Process 3 City Council Order of Proceedings Mayor asks if there are written protests, then opens public hearing Staff Presentation Public Comments Council closes public comment period Council considers and adopts Resolution modifying the previously adopted Resolution of Intention to form a CFD (amending the RMA) Council considers and adopts Resolution of Formation of CFD 2019-1 Resolution to Incur Bond Indebtedness Resolution calling for a Special Election (landowner approval) 4 3 4 4/2/2019 Item 13, Staff Presentation 3 City Council Order of Proceedings Mayor asks City Clerk for the results of the Special Election - Mayor states that if the results are in favor of incurring bond indebtedness, levying a special tax, and establishing an appropriations limit, the final actions to establish the CFD may be taken Council considers and takes the following actions: Adopts Resolution Declaring Results of Special Election and Directing Recording of Notice of Special Tax Lien First reading of an Ordinance Levying Special Taxes within CFD 2019-1 (San Luis Ranch) 5 6 Community Facilities District (CFD) Overview 5 6 4/2/2019 Item 13, Staff Presentation 4 CFD Overview 7 CFD enabled by Community Facilities District Act of 1982 Allows a special tax within a specified area to pay for needed infrastructure CFD special tax needs voter approval within area, or if less than 12 voters in the area, landowner approval For San Luis Ranch, the special tax needs landowner approval (since there are no residents) CFD Overview 8 CFD is an infrastructure funding mechanism called for in the adopted San Luis Ranch Development Agreement and Financing Plan (adopted July 17, 2018) CFD is necessary to make the project financially viable to the developer, while ensuring key City-serving infrastructure is built CFD raises money through special tax imposed on new residential development within San Luis Ranch 7 8 4/2/2019 Item 13, Staff Presentation 5 9 Summary of Previous Actions Taken Related to the CFD Process Previous Council Actions On February 19, 2019, the Council adopted the following Resolutions, and took action to initiate the formation of a Community Facilities District (CFD): Adopted Local CFD Goals and Policies Adopted Resolution of Intention (including a Rate and Method of Apportionment) to form a CFD Adopted Resolution To Incur Bonded Indebtedness Approved the Deposit and Reimbursement Agreement 10 9 10 4/2/2019 Item 13, Staff Presentation 6 11 Rate and Method of Apportionment (RMA) Overview RMA Overview 12 The heart of the CFD is the Rate and Method of Apportionment (RMA) The RMA determines the basis for the special tax, and how to calculate the cost given a specific land use or development type By initiating the CFD, the Council is approving the RMA as the basis for calculating the specific special tax that will apply to residential uses in the San Luis Ranch project 11 12 4/2/2019 Item 13, Staff Presentation 7 RMA: Minor Changes 13 Since Resolution of Intention was adopted, there have been minor changes to the RMA Minor changes to terminology to clarify intent No changes to that add territory to the CFD or modify the maximum special tax Updated Resolution Modifying the Resolution of Intention will address these changes 14 Recommendation and Next Steps in the CFD Process 13 14 4/2/2019 Item 13, Staff Presentation 8 Recommendation Adopt the following Resolutions related to the San Luis Ranch CFD: Adopt Resolution modifying the previously adopted Resolution of Intention to form a CFD Adopt Resolution of Formation of CFD 2019-1 (San Luis Ranch) Adopt Resolution to Incur Bond Indebtedness within CFD 2019-1 Adopt Resolution calling for a Special Election (landowner approval) Adopt Resolution Declaring Results of Special Election and Directing Recording of Notice of Special Tax Lien Introduce an Ordinance establishing the San Luis Ranch CFD Special Tax 15 Next Steps 16 April 2, 2019: Adopt revised Resolution of Intention (based on finalized Rate and Method of Apportionment) Adopt Resolution of Formation (ROF) Adopt/approve related actions included in tonight’s recommendation First Reading of Ordinance to Levy Special Tax Within 15 days following landowner approval, record Notice of Special Tax Lien April 16, 2019: Adopt Ordinance to Levy Special Tax (Second Reading) Within 15 days following final action, City Clerk to publish Ordinance This completes all steps related to forming a CFD 15 16 4/2/2019 Item 13, Staff Presentation 9 17 End of Presentation CFD: Development Agreement basis 18 CFD is based on fees and related information described in the Development Agreement Development Agreement requires developer to make a large investment in public infrastructure Development Agreement states the developer’s ”fair share” of infrastructure costs is $66.7 million Developer will be building $9.1 million of infrastructure beyond “fair share” 17 18 4/2/2019 Item 13, Staff Presentation 10 CFD: Financing Plan 19 SLR Financing Plan identified $54.2 million of needed Citywide improvements (roads, bikeways, utilities) Of this total, the Prado Road interchange (including NB and future SB ramps) would cost $35.0 million Developer’s share of these costs is $22.8 million, including $9.8 million for the Prado Road interchange Citywide share of these costs would be $31.4 million, or nearly 60% of the total City share to be funded through the Transportation Impact Fee Program, transportation grants, and General Fund resources including revenue generated by future development per the City/County tax sharing agreement Presented as Table 3 in Financing Plan Total infrastructure costs of $54.2 million Developer obligation of $22.8 million City/regional share of $31.4 The proposed CFD would provide the developer with funding for up to $14 million of these eligible costs Summary of Infrastructure Funding 20 19 20 4/2/2019 Item 13, Staff Presentation 11 RMA Overview 21 Amount of revenue that can be generated through a CFD (described in the RMA) is limited by local and state law related to property taxes Based on this, the maximum annual funding capacity through a special tax for San Luis Ranch is about $2 million, but likely will be less than that in practice RMA: Tax Allocation Method 22 For San Luis Ranch, special taxes will be paid by residential development only Commercial development is exempted, because of its economic sensitivity and likely slow absorption rate 21 22 4/2/2019 Item 13, Staff Presentation 12 RMA: Tax Allocation Method 23 Special taxes will be based on three residential densities and the size of dwellings within each category Generally the taxes would be higher for the lower density units and those dwellings that are larger in size Workforce, affordable and rental housing units would be exempt from special taxes RMA Tax Allocation by Parcel 24 23 24 4/2/2019 Item 13, Staff Presentation 13 RMA: Tax Allocation Method 25 RMA: Parcel Basis for Tax Allocation 26 25 26 4/2/2019 Item 13, Staff Presentation 14 Previous Approvals and Council Actions July 18, 2017: San Luis Ranch Project Approved October 18, 2018: Project Site Annexed to City November 27, 2018: Final Tract Map for Phase 1 approved 27 Previous Council Actions On February 19, 2019, the Council adopted the following Resolutions, and took action to initiate the formation of a Community Facilities District (CFD): Adopted Local CFD Goals and Policies Adopted Resolution of Intention to form a CFD Adopted Resolution to Incur Bond Indebtedness Approved the Deposit and Reimbursement Agreement Minor changes to the RMA since February 19 require an updated Resolution of Intention 28 27 28 NOTICE OF PUBLIC HEARING REGARDING ESTABLISHMENT OF COMMUNITY FACILITIES DISTRICT CITY OF SAN LUIS OBISPO COMMUNITY FACILITIES DISTRICT NO. 2019-1 (SAN LUIS RANCH) Notice is hereby given that on February 19, 2019, the City Council (the "ou City Cncil••) of the City of San Luis Obispo (the "City") adopted a Resolution entitled "A Resolution of the City Council of the City of San Luis Obispo of Intention to Establish a Community Facilities District and to Authorize the Levy of Special Taxes" (the "Resolution"l. Pursuant to Section 5?322 of the Mello -Roos Community Facilities Act of 1982, the City Council hereby gives notice as follows- A. The text of the Resolution is as follows: WHEREAS, the City Council {the "City Council") of the City of San Luis Obispo (the "City") has received a written petition (the "Petition") from MI San Luis Ranch, LLC, a Deiavoare limited liability company (the "farulowner"i, requesting the institution of proceedings for the establishment of a community facilities district Ithe "Community Facilities District"), describing the boundaries of the territory that is proposed for inclusion do the Community Facilities District and specifying the types of facilities to be financed by the Community Facilities District; WHEREAS, the Landowner has represented and warranted to the City Council that the Landowner is the owner of 100% of the territory proposed to be included within the Community Facilities District and not proposed to be exempt from the special tax and that there are no registered voters residing in the territory proposed to be .Zcluded within the Community Fatalities. District; WHEREAS, under the Mello -Roos Community Facilities Act of 1982 (the "Act"), the City Council is authorized to establish the Community Facilities District; WHEREAS, Section 53;114.9 of the Act provides that, at any time either before or after the formation of a community facilities district, the legislative body may accept advances of funds from any source, including, but not limited to, private persons or private entities and may provide, by resolution, for the use of those funds for any authorized purpose, inducting, but not limited to, paying any cost incurred b'1 the iocal agency in creating a community facilities district; WHEREAS, Section 53314.9 aJ the Act further provides that the legislative body may enter into an agreement, by resolution, with the person or entity advancing the funds, to repay all or a portion of the funds advanced, as determined by the legislative body, with or without interest, under all the following conditions: (a) the proposal to repay the funds is included in both the resolution of intention to establish a community facilities district adopted pursuant to Section 53321 of the Act and in the resolution of for to establish a community facilities district pursuant to Section 53325.1 of the Act. (b) any proposed special tax is approved by the qualified electors of the community facilities district pursuant to the Act, and lc1 any agreement shall specify that if the qualified electors of the community facilities district do not approve the proposed special tax, the local agency shall return any funds which have not 'been committed for any authorized purpose by the time of the election to the person or entity advancing the funds; WHEREAS, the City and the Landowner intend to enter into a Deposit and Reimbursement Agreement, dated as of February 1, 2019 (the "Deposit Agreement'), that provides for the advancement of funds by the Landowner to be used to pay costs incurred in connection with the establishment of the Community Facilities District and the issuance of special tax bands thereby, and provides for the reimbursement To the Landowner of such funds advanced, without interest, from the proceeds of any such bonds issued by the Community Facilities District and WHEREAS, the City desires to include in this Resolution, in accordance with Section 53314.9 of the Act, the proposal to repay funds pursuant to the Deposit Agreement; NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of San Luis Obispo as follows: Section 1. The foregoing recitals are true and -correct. Section 2. The City Council hereby finds that the Petition is signed by the owner of the requisite amount of land proposed to be included in the Community Facilities District. Section 3. The City Council proposes to establish a community facilities district under the terms of the Act. The boundaries of the territory proposed for Inclusion in the Community Facilities District aro described in the map showing the proposed Community Facilities District fthe "Boundary Map") on fila with the City Clerk of the City (the "City Clerk"i, which boundaries are hereby preliminarily approved and to which map reference is hereby made for further particulars. The City Cleric is hereby directed to sign the original Boundary Map and record, or rause to be recorded, the Boundary Map with all proper endorsements thereon in the office of the San Luis Obispo County Recorder within 15 days of the date of adoption of this Resolution, all as required by Section 3111 of the California Streets and Highways Code. Section 4. The name proposed for the Community Facilftlas District is "City of San Luis Obispo Community Facilities District No. 2079-1 (San Luis Ranch) Section 5. The public facilities (the "Facilities") proposed to be financed by the Community Facilities District pursuant to the Act are described under the caption "Facilities" on Exhibit A hereto, which is by this reference incorporated herein. All of the Facilities to be financed wiif have an estimated useful life of five years or longer. They are public improvements that the City or another govammentab entity is authorized by law to construct, own or operate or to which they contribute revenue. The Facilities to be financed are necessary to meet increased demands placed upon the City as the result of the development planned to occur in the proposed Community Facilities District. The incidental expenses proposed to he incurred are identified under the caption "Formation, Administrative and Incidental Expenses" on Exhibit A hereto. All or any portion of the Facilities may be financed through a financing plan, including. but not limited to. a lease, lease -purchase or installment -purchase arrangement. To the extent the Facilities will not be Constructed by the City, in the opinion of the City the public interest will not be served by allowing the property owners in the Community Facilities District to intervene in a public bidding process pursuant to Section 53329.5(a) of the Act. Section 6. Except where funds are otherwise available, a special tax sufficient topay for all Facilities, secured by recordation of a continuing lien against all nonexempt real property In the Community Facilities District, will be annually levied within the Community Facilities District. The rate and method of apportionment of the special tax (the "Elate and Method"), in sufficient detail to allow each landowner within the proposed Community Facilities District to estimate the maximum amount that he or she will have to pay, is described in Exhi6a B attached hereto, which is by this reference incorporated herein. The conditions under which the obligation to pay the special tax to pay for Facilities may be prepaid and permanently satisfied are specified in the Rate and Method. The special tax will be collected in the same manner as ordinary ad valorem property taxes or in such other manner as the City Council shall determine, including direct billing of the affected property owners. Section 7. The tax year after which no further special tact to pay for Facilities will be levied against any parcel used for private residential purposes is specified in the Rate and Method. Under no circumstances shatl the special tax to pay for Faalities 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 Community Facilities District by more than 10% above the amount that would have been levied in that fiscal year had there never been any such delinquencies or defaults. For purposes of this paragraph, a parcel shall be considered "used for private residential purposes '• not later than the date on which an occupancy permit for private residential use is issued. Section B. Pursuant to Section 53344.1 of the Act, the City Council hereby reserves to itself the right and authority to allow any interested owner of property within the Community Facilities District, subject to the provisions of said Section 5.3344.1 and to those conditions as it may impose, and any applicable prepay manI penalties as prescribed in the bond indenture or comparable instrument or document, to tender to the Community Facilities District treasurer in full payment OF part payment of any instal[inent of.thL- special taxes or the interest or penalties thereon which may be due c delinquent, but for which a bill has been received, any bond or other obligation secured thereby, the bored or other obligation to be taken at par and credit to be given for the accrued interest shorn thereby computed to the date of tender. Section 9. The City Council hereby fixes Tuesday, April 2, 2019, at 6:00 p.m„ or as soon thereafter as the City Council may reach the matter, at 990 Palm Street, San Luis Obdsm Ca]ifomia, as the time and place when and where the City Council will conduct a public hearing on the establishment of the Community Foci tities District. Section 10. The City Clerk is hereby directed to publish, or cause to be published, a notice o€ said public hearing one time in a newspaper of general circulation published in the area of the proposed Community Facilities District. The pubticatian of said notice shall be completed at [east seven clays prior to the date herein fixed for said public hearing- Said notice shall contain the information prescribed by Section 53322 of the Act - Section 11. The levy of said proposed special tax shall be subject to the appfoval of the qualified electors of the Community Facilities District at a special election. Because there are no registered voters in the proposed Community Facil ties District and there are expected to be no registered voters on the date of the election, the landowners will be the qualified electors pursuant to the Act. The proposed voting procedure shall be by mailed or hand -delivered ballot among the landowners in the Community Facilities District, with each owner having one vote for each acre or portion of an acre such owner owns in the Community Facilities District - Section 12. Each offioeraf the City who is or will be responsible for providing one or more of the proposed types of Facilities is hereby directed to study, or cause to be studied, the proposed Community Facilities Dist riat and, at or Wore said public hearing, file a report with the City Council containing a brief description or the Facilities try type which wiil in his or her opinion be required to adequately meet the needs of the Community Fa6lifies District• and his or her estimate of the cost of providing the Facilities. Such officers are hereby also directed 10 estimate the fair and reasonable cost of the Facilit[as proposed to be purchased as completed public facilities and of the incidental expenses proposed to be paid_ Such report shall be made a part of the record of said public hearing_ Section 13. The Deposit Agreement. in substantially the Form submitted to this meeting and made a part hereof as though set forth herein, be and the some is hereby approved. Each of the City Manager or Finance Director of the City, or the designee of such officer (each, an "Authorized Officer"), is hereby authorized, and any one of the Authorized Officers is hereby directed, f or and in the name of the City, to execute and deliver the Deposit Agreement in the form submitted to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approves, such requirement ar approval to be conclusively evidenced by the execution of the Deposit Agreement by such Authorized Officer. Section 14, The Landowner has heretofore advanced certain funds, and may advance additional funds, which have been or may be used to pay costs incurred in connection with the establishment of the Community Facilities District and the issuance of special tax bonds therapy. The City Council proposes to repay a I I or a portion of such funds expended for such purpose, solely from the proceeds of such bonds, pursuant to the Deposit Agreement_ Section 15. The officers, employees and agents of the City are hereby authorized and directed to take all actions and do all things which they, or any of them, may deem necessary or desirable to accomplish the purposes of this Resolution and not inconsistent with the provisions hereof. Section 16. This Resolution shall take effect immediately upon its adoption. B. The map of the Community Facilities District and the exhibits to the Resolution which describe the Facilities proposed to be financed by the Community Facilities District and the Rate and Method are on file in the office of the City Clerk and are hereby referred to for detail. C. The time and place of the hearing on the establishment of the Community Facilities District are Tuesday, April 2, 2019, at 6:00 p.m., or as soon thereafter as the City Council may reach the matter, at 990 Palm Street, San Luis Obispo, California. D. At the hearing, the testimony of all interested persons or taxpayers for or against the establishment of the Community Facilities District, the extent of the Community Facilities District or the furnishing of specified types of public facilities will be heard. At the hearing, protests against the establishment of the Community Fac lities District, the extent of the Community Facilities District or the furnishing of specified types of publie facilities within the Community Facilities District may be made orally or in writing by any interested person, as provided in Section 53323 of the Act. If 50 percent or more of the registered voters, or six registered voters. whichever is more, residing within the territory proposed to be included in the Community Facilities District, or the owners of one-half or more of the area of land in the territory proposed to be included in the Community Facilities District and not exempt from the special tax, file written protests against the establishment of the Community Facilrties District, and the protests are riot withdrawn so as to reduce the value Of the protests to less than a majority, no further proceedings to create the Community Facilities District w to authorize the special tax may he taken for a period of one year from the date of the decision of the City Council- If the majority protests of the registered voters or of the landowners are only against the furnishing of a specified type or types of facilities within the Community Facilities District or against levying a specified specie[ tax, those types of facilities or the specifiad special toxwilI be -eliminated from the resolution of formation- -E. The proposed voting procedure for the Community Facilities District is by mailed or harxi-delivered ballot among the landowners in the Community Facilities District, with each owner having one vote for each acre or portion of an acre such owner owns in the Community Facilities District. Teresa Purrington City Clerk City of San Luis Obispo March 21, 2019 cro r- � c o. � m C �, � r � `s � < � ~✓ a � �'' � �"� ppa�y.I =• " c �. - i - w =' a , co " = _O /rr �n coo o 00 CD c cD a Cc R. ry r rD ^r O 1 O S N Z rD rD CM zr CD CD D Q. � CD o z y r^.` ! y O rD ms °4 c r� -cos c �+• �. S OrePC x �' l~ w n y (") y r a ur w co m NOTICE OF PUBLIC HEARING REGARDING ESTABLISHMENT OF COMMUNITY FACILITIES DISTRICT CITY OF SAN LUIS OBISPO COMMUNITY FACILITIES DISTRICT NO. 2019-1 (SAN LUIS RANCH) Notice is hereby given that on February 19, 2019, the City Council (the "ou City Cncil••) of the City of San Luis Obispo (the "City") adopted a Resolution entitled "A Resolution of the City Council of the City of San Luis Obispo of Intention to Establish a Community Facilities District and to Authorize the Levy of Special Taxes" (the "Resolution"l. Pursuant to Section 5?322 of the Mello -Roos Community Facilities Act of 1982, the City Council hereby gives notice as follows- A. The text of the Resolution is as follows: WHEREAS, the City Council {the "City Council") of the City of San Luis Obispo (the "City") has received a written petition (the "Petition") from MI San Luis Ranch, LLC, a Deiavoare limited liability company (the "farulowner"i, requesting the institution of proceedings for the establishment of a community facilities district Ithe "Community Facilities District"), describing the boundaries of the territory that is proposed for inclusion do the Community Facilities District and specifying the types of facilities to be financed by the Community Facilities District; WHEREAS, the Landowner has represented and warranted to the City Council that the Landowner is the owner of 100% of the territory proposed to be included within the Community Facilities District and not proposed to be exempt from the special tax and that there are no registered voters residing in the territory proposed to be .Zcluded within the Community Fatalities. District; WHEREAS, under the Mello -Roos Community Facilities Act of 1982 (the "Act"), the City Council is authorized to establish the Community Facilities District; WHEREAS, Section 53;114.9 of the Act provides that, at any time either before or after the formation of a community facilities district, the legislative body may accept advances of funds from any source, including, but not limited to, private persons or private entities and may provide, by resolution, for the use of those funds for any authorized purpose, inducting, but not limited to, paying any cost incurred b'1 the iocal agency in creating a community facilities district; WHEREAS, Section 53314.9 aJ the Act further provides that the legislative body may enter into an agreement, by resolution, with the person or entity advancing the funds, to repay all or a portion of the funds advanced, as determined by the legislative body, with or without interest, under all the following conditions: (a) the proposal to repay the funds is included in both the resolution of intention to establish a community facilities district adopted pursuant to Section 53321 of the Act and in the resolution of for to establish a community facilities district pursuant to Section 53325.1 of the Act. (b) any proposed special tax is approved by the qualified electors of the community facilities district pursuant to the Act, and lc1 any agreement shall specify that if the qualified electors of the community facilities district do not approve the proposed special tax, the local agency shall return any funds which have not 'been committed for any authorized purpose by the time of the election to the person or entity advancing the funds; WHEREAS, the City and the Landowner intend to enter into a Deposit and Reimbursement Agreement, dated as of February 1, 2019 (the "Deposit Agreement'), that provides for the advancement of funds by the Landowner to be used to pay costs incurred in connection with the establishment of the Community Facilities District and the issuance of special tax bands thereby, and provides for the reimbursement To the Landowner of such funds advanced, without interest, from the proceeds of any such bonds issued by the Community Facilities District and WHEREAS, the City desires to include in this Resolution, in accordance with Section 53314.9 of the Act, the proposal to repay funds pursuant to the Deposit Agreement; NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of San Luis Obispo as follows: Section 1. The foregoing recitals are true and -correct. Section 2. The City Council hereby finds that the Petition is signed by the owner of the requisite amount of land proposed to be included in the Community Facilities District. Section 3. The City Council proposes to establish a community facilities district under the terms of the Act. The boundaries of the territory proposed for Inclusion in the Community Facilities District aro described in the map showing the proposed Community Facilities District fthe "Boundary Map") on fila with the City Clerk of the City (the "City Clerk"i, which boundaries are hereby preliminarily approved and to which map reference is hereby made for further particulars. The City Cleric is hereby directed to sign the original Boundary Map and record, or rause to be recorded, the Boundary Map with all proper endorsements thereon in the office of the San Luis Obispo County Recorder within 15 days of the date of adoption of this Resolution, all as required by Section 3111 of the California Streets and Highways Code. Section 4. The name proposed for the Community Facilftlas District is "City of San Luis Obispo Community Facilities District No. 2079-1 (San Luis Ranch) Section 5. The public facilities (the "Facilities") proposed to be financed by the Community Facilities District pursuant to the Act are described under the caption "Facilities" on Exhibit A hereto, which is by this reference incorporated herein. All of the Facilities to be financed wiif have an estimated useful life of five years or longer. They are public improvements that the City or another govammentab entity is authorized by law to construct, own or operate or to which they contribute revenue. The Facilities to be financed are necessary to meet increased demands placed upon the City as the result of the development planned to occur in the proposed Community Facilities District. The incidental expenses proposed to he incurred are identified under the caption "Formation, Administrative and Incidental Expenses" on Exhibit A hereto. All or any portion of the Facilities may be financed through a financing plan, including. but not limited to. a lease, lease -purchase or installment -purchase arrangement. To the extent the Facilities will not be Constructed by the City, in the opinion of the City the public interest will not be served by allowing the property owners in the Community Facilities District to intervene in a public bidding process pursuant to Section 53329.5(a) of the Act. Section 6. Except where funds are otherwise available, a special tax sufficient topay for all Facilities, secured by recordation of a continuing lien against all nonexempt real property In the Community Facilities District, will be annually levied within the Community Facilities District. The rate and method of apportionment of the special tax (the "Elate and Method"), in sufficient detail to allow each landowner within the proposed Community Facilities District to estimate the maximum amount that he or she will have to pay, is described in Exhi6a B attached hereto, which is by this reference incorporated herein. The conditions under which the obligation to pay the special tax to pay for Facilities may be prepaid and permanently satisfied are specified in the Rate and Method. The special tax will be collected in the same manner as ordinary ad valorem property taxes or in such other manner as the City Council shall determine, including direct billing of the affected property owners. Section 7. The tax year after which no further special tact to pay for Facilities will be levied against any parcel used for private residential purposes is specified in the Rate and Method. Under no circumstances shatl the special tax to pay for Faalities 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 Community Facilities District by more than 10% above the amount that would have been levied in that fiscal year had there never been any such delinquencies or defaults. For purposes of this paragraph, a parcel shall be considered "used for private residential purposes '• not later than the date on which an occupancy permit for private residential use is issued. Section B. Pursuant to Section 53344.1 of the Act, the City Council hereby reserves to itself the right and authority to allow any interested owner of property within the Community Facilities District, subject to the provisions of said Section 5.3344.1 and to those conditions as it may impose, and any applicable prepay manI penalties as prescribed in the bond indenture or comparable instrument or document, to tender to the Community Facilities District treasurer in full payment OF part payment of any instal[inent of.thL- special taxes or the interest or penalties thereon which may be due c delinquent, but for which a bill has been received, any bond or other obligation secured thereby, the bored or other obligation to be taken at par and credit to be given for the accrued interest shorn thereby computed to the date of tender. Section 9. The City Council hereby fixes Tuesday, April 2, 2019, at 6:00 p.m„ or as soon thereafter as the City Council may reach the matter, at 990 Palm Street, San Luis Obdsm Ca]ifomia, as the time and place when and where the City Council will conduct a public hearing on the establishment of the Community Foci tities District. Section 10. The City Clerk is hereby directed to publish, or cause to be published, a notice o€ said public hearing one time in a newspaper of general circulation published in the area of the proposed Community Facilities District. The pubticatian of said notice shall be completed at [east seven clays prior to the date herein fixed for said public hearing- Said notice shall contain the information prescribed by Section 53322 of the Act - Section 11. The levy of said proposed special tax shall be subject to the appfoval of the qualified electors of the Community Facilities District at a special election. Because there are no registered voters in the proposed Community Facil ties District and there are expected to be no registered voters on the date of the election, the landowners will be the qualified electors pursuant to the Act. The proposed voting procedure shall be by mailed or hand -delivered ballot among the landowners in the Community Facilities District, with each owner having one vote for each acre or portion of an acre such owner owns in the Community Facilities District - Section 12. Each offioeraf the City who is or will be responsible for providing one or more of the proposed types of Facilities is hereby directed to study, or cause to be studied, the proposed Community Facilities Dist riat and, at or Wore said public hearing, file a report with the City Council containing a brief description or the Facilities try type which wiil in his or her opinion be required to adequately meet the needs of the Community Fa6lifies District• and his or her estimate of the cost of providing the Facilities. Such officers are hereby also directed 10 estimate the fair and reasonable cost of the Facilit[as proposed to be purchased as completed public facilities and of the incidental expenses proposed to be paid_ Such report shall be made a part of the record of said public hearing_ Section 13. The Deposit Agreement. in substantially the Form submitted to this meeting and made a part hereof as though set forth herein, be and the some is hereby approved. Each of the City Manager or Finance Director of the City, or the designee of such officer (each, an "Authorized Officer"), is hereby authorized, and any one of the Authorized Officers is hereby directed, f or and in the name of the City, to execute and deliver the Deposit Agreement in the form submitted to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approves, such requirement ar approval to be conclusively evidenced by the execution of the Deposit Agreement by such Authorized Officer. Section 14, The Landowner has heretofore advanced certain funds, and may advance additional funds, which have been or may be used to pay costs incurred in connection with the establishment of the Community Facilities District and the issuance of special tax bonds therapy. The City Council proposes to repay a I I or a portion of such funds expended for such purpose, solely from the proceeds of such bonds, pursuant to the Deposit Agreement_ Section 15. The officers, employees and agents of the City are hereby authorized and directed to take all actions and do all things which they, or any of them, may deem necessary or desirable to accomplish the purposes of this Resolution and not inconsistent with the provisions hereof. Section 16. This Resolution shall take effect immediately upon its adoption. B. The map of the Community Facilities District and the exhibits to the Resolution which describe the Facilities proposed to be financed by the Community Facilities District and the Rate and Method are on file in the office of the City Clerk and are hereby referred to for detail. C. The time and place of the hearing on the establishment of the Community Facilities District are Tuesday, April 2, 2019, at 6:00 p.m., or as soon thereafter as the City Council may reach the matter, at 990 Palm Street, San Luis Obispo, California. D. At the hearing, the testimony of all interested persons or taxpayers for or against the establishment of the Community Facilities District, the extent of the Community Facilities District or the furnishing of specified types of public facilities will be heard. At the hearing, protests against the establishment of the Community Fac lities District, the extent of the Community Facilities District or the furnishing of specified types of publie facilities within the Community Facilities District may be made orally or in writing by any interested person, as provided in Section 53323 of the Act. If 50 percent or more of the registered voters, or six registered voters. whichever is more, residing within the territory proposed to be included in the Community Facilities District, or the owners of one-half or more of the area of land in the territory proposed to be included in the Community Facilities District and not exempt from the special tax, file written protests against the establishment of the Community Facilrties District, and the protests are riot withdrawn so as to reduce the value Of the protests to less than a majority, no further proceedings to create the Community Facilities District w to authorize the special tax may he taken for a period of one year from the date of the decision of the City Council- If the majority protests of the registered voters or of the landowners are only against the furnishing of a specified type or types of facilities within the Community Facilities District or against levying a specified specie[ tax, those types of facilities or the specifiad special toxwilI be -eliminated from the resolution of formation- -E. The proposed voting procedure for the Community Facilities District is by mailed or harxi-delivered ballot among the landowners in the Community Facilities District, with each owner having one vote for each acre or portion of an acre such owner owns in the Community Facilities District. Teresa Purrington City Clerk City of San Luis Obispo March 21, 2019 1010 Marsh St., San Luis Obispo, CA(805) 546-8208 . FAX (805) 546 PROOF OF PUBLICATION Proof of Publ (2015.5 C.C.P.) STATE OF CALIFORNIA, County of San Luis Obispo, I am a citizen of the United States and a resident of the county aforesaid; I am over the age of eighteen years, and not a party interested in the above entitled matter. I am the principal clerk of the printer of the New Tunes, a newspaper of general circulation, printed and published weekly in the City of San Luis Obispo, County of San Luis Obispo, and which has been adjudged a newspaper of general circulation by the Superior Court of the County of San Luis Obispo, State of California, under the date of February 5, 1993, Case number CV72789: that notice of which the annexed is a printed copy (set in type not smaller than nonpareil), has been published in each regular and entire issue of said newspaper and not in any supplement thereof on the following dates, to -wit: in the year 2019. 1 certify (or declare) under the the penalty of perjury that the foregoing is true and correct. Dated at San Luis Obispo, Calif rnia, this day_ _ ZI of. M �f� .2019. Patricia Horton, New Times Legals Admin K Pd;-NTMG Admin,NTMG 0(_'w,llSUSINCSSjYuhlic. NoIwcy Prof nl Pub 0 NOTICE OF PUBLIC HEARING REGARDING BONDED INDEBTEDNESS FOR COMMUNITY ADISTRICTES OF U5 OBISPO COMMUNrTYFACILITIESS DISTRICT NO. 2[119-1 (SAN LUIS RANCH) Notice is hereby 91van that on Nbruary 19, 2018, the City Councii Ithe "City Council") of the City of San Luls Obispo ithe "City'ri adapted a Resolution entilled 'A Resolution of the City Councii of the City of San Luis Obispo to Incur Son dad Indebtedness of the Proposed Cuy of San Luis Obispo Community Facilities District IVa. 2019-1 ;Sen Luis Ranch)" (the "Resolution"). Pursuant to Section 53348 of the Mello -Roos Community Facilfties Act of 7982, the City Council hereby gives notice as follows: A. The text of the Resolution is as follows: WHEREAS, the City Council [the "Citi, Council") of the City of San Luis Obispo Ithe "City ), pursuant to the Mello -Roos Community Facilities Act of 1982 it he Act"), has this date adopted its Resolution entitled A Resolution of the City Council of the City, of San Luis Obispo of intention to Estabilsh a Community Faciilties District and to Authorize the Levy of Special Taxes, stating its intention to astab}ish City of San Luis Obispo Community Facilities District No. 2019-1 (San Luis Randal (the "Community Facilities DistriQl"} for the purpose of financing certain pubic facilities (the 'Fad lities"), as further provided In said Resolution,- and WHEREAS, in order to finance the Facilities it is necessary to Incur bonded indebtedness in the amount of up to $25,000,800; NOW THEREFORE, BE IT RESOLVED b the City Council of the City of San Lu Is Obispo as follows: Section 1. The foregoing recitals are true and correct. Section 2. The City Council hereby declares that in order to finance the Facilities, it is necessary to incur bonded indebtedness, Section 3. The purpose for which the proposed debt is to be incurred is torovide the funds necessary to pay the costs of the Fac llities, including all costs and estimated costs incldan[aI to, or connected with, the accomplishment of said purpose and of the financing thereof, as permitted by Sact ion 53345.3 of the Act. Section 4. The maximum amount of the proposed debt is $25,000.000. Section 5. The City Council hereby fixes Tuesday, April 2, 2019, at 8:00 p.m., or as soon thereafter as the City Council may reach the matter, at 990 Palm Street, San Luis Obispo, California, as the time and place when and where the Cily Council will conduct a public hearing on the proposed debt authorizetion. Section 8. Tito City Clerk of the City is hereby directed to publish, or cause to be published a notice of said public hearing one time in a newspaper 01 general circulation pubtished in the area of the proposed Community Facilities District. The pubilcation of said notice shall be completed at least sever[ days prior to the date herein fixed for said publichearin Said notice shall contain the information prescribed by Section 53340 of the Ac I. Section 7. The. officers, employees and agents of the City are hereby authorized and directed to take nil actions and do all Things which they, or any of them, may deem necessary or desirable to accomplish the purpr�ses of this Resolution and not inconsistent with the provisions hereof. Section 8. This Resolution shall take efface Immediatetlyy upon Its adoption. a. I B time and place of the hearing on the proposal to issue debt of She Community Facilities District are Tuesday, April 2, 2019, at 8:00 p.m., or as soon thereafter as the City Council may reach the matter, at 990 Palm Street, San Luis Obispo, California. C. At the hearing, the testimony of all interested persons, including all persons owning property in lha area of the Community Facilities Dist not. for and against the proposed Community Facilities District debt issuance will be heard. Teresa Purrington City Clerk City of San Luis Obispo March 21, 2019 1010 Marsh St., San Luis Obispo, CA 93401 (805) 546-8208 . FAX (805) 546-8641 PROOF OF PUBLICATION (2015.5 C.C.P.) STATE OF CALIFORNIA, County of San Luis Obispo, I am a citizen of the united States and a resident of the county aforesaid; I am over the age of eighteen years, and not a party interested in the above entitled matter. I am the principal clerk of the printer of the New Times, a newspaper of general circulation, printed and published weekly in the City of San Luis Obispo, County of San Luis Obispo, and which has been adjudged a newspaper of general circulation by the Superior Court of the County of San Luis Obispo, State of California, under the date of February 5, 1993, Case number CV72789: that notice of which the annexed is a printed copy (set in type not smaller than nonpareil), has been published in each regular and entire issue of said newspaper and not in any supplement thereof on the following dates, to -wit: / ,L,c &� z ` in the year 2019. 1 certify (or declare) under the the penalty of perjury that the foregoing is true and correct. Dated at San Luis Obispo Calirbia. this day�of , 2019. Patricia Horton, New Times Legals Aft,! � Nr,o ,1!-NTMG?.Jini WNTM(1 OO ,013U.SINC,SS/ OF, Noi!0,,/Pw,f,4 VUM1 Proof of Publication of SLO CITY CLURK SAN LUIS OBISPO CITY COUNCIL NOTICE OF PUBLIC HEARING The San Luis Obispo City Council invites all interested persons to -attend a publli on Tuesday, April 2, 2019, at 6:00 p.m. In the City Hall Council Chamber, 980 Palm Street, San Luis Obispo, California, to consider the following items: SAN LUIS RANCH COMMUNITY FACILITIES DISTRICT - 1035 Madonna Road Introduce an Ordinance entitled; An Ordinance of the City of San Luis Obispo, Calllfomia, levying special taxes within the City of San Luis Obispo Community Facilities District No. 2019-1 (San Luis Ranch►." Introduce an 0rdin:ulc0 entille1, An Ord Inonce of the CI1.y of San Luis Obiapo, Cxllfomio. adding Chapter 2.43 o1 the City of San Luis Obispo Mon10pal Code aatablfshinu election boundary for Mello -Roos Community Facilltios Matrlat Initiative and Referendum Measures." •AVILA RANCH DEVELOPMENT AGREEMENT - 175 Venture Drive Review of an amendment to the Avila Ranch Development Agreement, specifically with respect to Section 5.04.2(b) and the timing of the contractual vested status of the Los Osos Valley Road Interchange Impact Fee. Case 1f: OTHR 0455- 2017; Avila Ranch, LLC, applicant. For more information, you are invited to contact Michael Codron of the City's Community Development Department at (805) 781-7187, or by email, mcodron®slocity.org. The City Council may also discuss other hearings or business items before or after the items listed above. If you challenge the proposed project in court, you may be limited to raising only those issues you or someone else raised at the public hearing described in this notice, or in written correspondence delivered to the City Council at, or prior to, the public hearing. Reports for this meeting will beavailable for review in the City Clerk's Office and online at www'slocity.org on March 27, 2019. Please call the City Clerk's Office at (805) 781- 7100 for more information. The City Council meeting will be televised live on Charter Cable Channel 20 and live streaming on www.slocity.org. Teresa Purrington City Clerk City of San Luis Obispo March 21, 2019