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Ordinance No. 855500 ORDINANCE NO. 855 ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CYPRESS AUTHORIZING THE LEVY OF A SPECIAL TAX WITHIN THE COMMUNITY FACILITIES DISTRICT NO. 1 (SORRENTO HOMES) OF THE CITY OF CYPRESS WHEREAS, on August 6, 1990, the City Council (the "City Council ") of the City of Cypress (the "City ") adopted Resolution No. 3800 stating its intention to form Community Facilities District No. 1 (Sorrento Homes) of the City of Cypress (the "District ") pursuant to the Mello -Roos Community Facilities Act of 1982, as amended (the "Act "); and WHEREAS, on August 6, 1990, the City Council adopted Resolution No. 3801 stating its intention to incur bonded indebtedness in the amount not to exceed $15,500,000 within the proposed District for the purpose of financing the construction, acquisition, modification, expansion or rehabilitation of certain real and other tangible property with an estimated useful life of 5 years or longer, including the funding, financing, construction, rehabilitation, installation and acquisition of certain public facilities and appurtenances including streets and highways, drainage facilities, sewer facilities, traffic and safety lighting facilities, parkway landscaping improvements and school facilities, together with appurtenances and appurtenant work, including equipment, real property and other property and the incidental expenses to be incurred in connection therewith, all as more fully described in Resolution No. 3820 adopted by the City Council on September 1Q, 1990 (the "Facilities ") to serve the area within the District; and WHEREAS, notice was published as required by law relative to the intention of the City to form the proposed District and to incur bonded indebtedness in the amount not to exceed $15,500,000 within the boundaries of the proposed District and to levy a special tax to pay for the Facilities (as defined in Resolution No. 3800); and WHEREAS, on September 10, 1990, the City Council held a noticed public hearing as required by law to determine whether it should proceed with the formation of the District, issue bonds to pay for the Facilities and authorize the rate and method of apportionment of a special tax to be levied within the District for the purpose of paying for the Facilities, paying the annual costs associated with the bonds proposed to be issued to finance the Facilities, including, but not limited to, the principal and interest on the bonds, and paying any incidental expenses of the District as set forth in the Act and Resolution Nos. 3800 and 3801; and WHEREAS, at said hearing all persons desiring to be heard on all matters pertaining to the formation of the District, the levy of a special tax and the issuance of bonds to pay for a portion of the Facilities were heard and a full and fair hearing was held; and WHEREAS, on September 10, 1990, the City Council adopted Resolution No. 3820 which established the District, authorized the levy of a special tax within the District and called an election within the District by mail or personal delivery in which ballots were to be received on September 10, 1990, on the proposition of incurring bonded indebtedness and levying a special tax; and WHEREAS, on September 10, 1990, the City Council also adopted Resolution No. 3821 which determined the necessity to incur bonded indebtedness in the amount not to exceed $15,500,000 within the District and called an election within the District by mail or personal delivery in which ballots were to be received on September 10, 1990, on the proposition of incurring bonded indebtedness and levying a special tax; and WHEREAS, on September 10, 1990, an election was held within the District and ballots were received by the Election Official in which the qualified electors approved by more than a two - thirds vote the proposition of incurring bonded indebtedness not to exceed $15,500,000 and levying a special tax as set forth in Resolution No. 3821 ; and WHEREAS, on September 10, 1990, the City Council adopted Resolution No. 3823 which certified the results of the election conducted by the Election Offical, which results showed that more than two - thirds of the votes cast were in favor of the proposition to incur bonded indebtedness and levy the special tax; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF CYPRESS ACTING IN ITS CAPACITY AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 1 (SORRENTO HOMES) DOES ORDAIN AS FOLLOWS: SECTION 1. The above recitals are all true and correct. SECTION 2. By the passage of this ordinance, the City Council authorizes the levy of a special tax at the rate and formula set forth in Exhibit B to Resolution No. 3820 and which for reference purposes is attached hereto as Exhibit 1 and incorporated by reference. SECTION 3. The City Council is hereby further authorized to determine, by ordinance, or by resolution if permitted by then applicable law, on or before August 1 of each year, the specific special tax to be levied on each parcel of land in the District. The special tax to be levied shall not exceed the maximum rates set forth in Exhibit 1, but the special tax may be levied at a lower rate. The City Clerk is authorized to file with the county auditor on or before the 10th day of August of each tax year a certified copy of such ordinance or resolution accompanied by a list of all parcels subject to the special tax levy with the tax to be levied on each parcel. SECTION 4. Properties or entities of the state, federal or other local governments shall be exempt from the above - referenced and approved special tax only to the extent set forth in Resolution No. 3820 and in the definition of CYP1 -ORD1 -2- "Exempt Property" in Exhibit 1 hereto and otherwise shall be subject to tax consistent with the provisions of the Act in effect as of the date of adoption of this Ordinance. SECTION 5. All of the collections of the special tax shall be used only as provided for in the Act and Resolution No. 3820 . The special tax shall be levied only so long as needed to accomplish the purposes described in Resolution No. 3820 . SECTION 6. The special tax shall be collected in the same manner as ordinary ad valorem taxes are collected and shall be subject to the same penalties and the same procedure and sale in cases of delinquency as provided for ad valorem taxes as such procedure may be modified by law or this City Council from time to time. SECTION 7. As a cumulative remedy, if any amount levied as a special tax for payment of bond interest or principal, together with any penalties and other charges accruing under this ordinance, are not paid when due, the City Council may, not later than four years after the due date of the last installment of principal on the Bonds, order that the same be collected by an action brought in the superior court to foreclose the lien of such special tax. SECTION 8. This Ordinance relating to the levy of the special tax shall take effect immediately upon its final passage in accordance with the provisions of Section 36937(a) of the Government Code, and this specific authorization for adoption is pursuant to the provisions of Section 53340 of the Government Code. SECTION 9. The City Clerk is hereby authorized and directed to certify as to the adoption of this Ordinance and to cause copies hereof to be posted in three public places throughout the City. FIRST READ at a regular meeting of the City Council of said City held on the 10th day of September 1990, and finally adopted and ordered posted at a regular meeting held on the 24th day of September 1990. ATTEST: CITY E? H ACC A OR OF THE CITY 0 CYPRESS Y OF CYPRESS STATE OF CALIFORNIA ) SS COUNTY OF ORANGE ) I, DARRELL ESSEX, City Clerk of the City of Cypress, DO HEREBY CERTIFY that the foregoing Ordinance was duly adopted at a regular meeting of the said City Council held on the 24th day of September 1990; by the following roll call vote: AYES: 4 NOES: 0 ABSENT: 0 ABSTAINED: 1 COUNCIL MEMBERS: Arnold, Bowman, Kanel and Kerry COUNCIL MEMBERS: None COUNCIL MEMBERS: None COUNCIL MEMBEIjS : Age CIT CLERK OF THE ITY OF CYPRESS EXHIBIT 1 COMMUNITY FA I ITIES DISTRICT REPORT COMMUNITY FACILITIES DISTRICT NO. 1 (Sorrento Homes) City of Cypress MEL LO -ROOS COMMUNITY FACILITIES ACT OF 1982 RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX Introduction The special tax to be levied upon each assessor's parcel in Community Facilities District No. 1 (Sorrento Homes) ("CFI)" or "District") of the City of Cypress shall be levied by the District by application of the appropriate rate as described below. All of the property in the CFD, unless exempt by law or by the provisions herein, shall be taxed for the purposes, to the extent, and in the manner herein provided. This Exhibit D conforms to the Rate and Method of Apportionment of Special Tax contained in the Resolution of Intention adopted by the City Council and the ballot to be voted on by the landowner, however, in the event of discrepancies between this Exhibit D and Resolutions or the ballot, the resolutions and /or ballot will control. Definitioua The terms used in this Exhibit have the following meaning: "Acre" or "Acreage" The area of a parcel as shown on an assessor parcel map, a recorded tract or Parcel Map, or other recorded map, or as determined by the City Engineer. "Alternate Maximum Special Tar Rate" A tax that may be levied against the area of a parcel in the event that the • maximum special tax for developed and undeveloped property is insufficient. "Amount of Annual Levy" The amount necessary to pay interest and principal of the bonds, replenish bond reserves, and to fund incidental and /or administrative expenses previously incurred or estimated to be incurred in the current Fiscal Year. The administrative expenses shall not exceed S20,000 a year escalating 3% each year beginning Fiscal Year 1992 -93. The amount of the above shall be reduced by any bond reserve earnings except those earnings that may be required for rebate purposes. "Bond Year" The period beginning the day after a bond principal payment date and ending with the following bond principal payment date. "Developed Property" Assessor Parcels in the CFD for which a subdivision map has been recorded prior to March 1 of the preceding Fiscal Year for sale of residential or non- residential lots. "Exempt Property" Parcels shown on the Vesting Tentative Tract Map 13228, that meet, or upon final recordation will meet, one of the following conditions are exempt from the annual levy of the special tax. 1. Property owned by a public agency or which is in public use (such as streets, sewer easements, etc.) 2. Property which is an unmanned utility property 3. Property irrevocably dedicated to a public agency for a public use 4. Property designated as park or as open space 5. Other property which has no intrinsic value upon foreclosure, such as sliver parcels at entries, monuments, landscaped parcels on a perimeter, etc. 6. Property exempt by operation of law. "Fiscal Year" The period starting July 1 and ending the following June 30. 2 "Full Dereiopmau" Occurs when the last subdivision or parcel map is recorded to allow construction of 671 units (or such adjusted number of units allowed by the City of Cypress) within the CFD. "Maximum Special Tar Rate" The maximum tax rate that may be levied by the District in any Fiscal Year for each class of Developed Property and Undeveloped Property. "SFR" A single family residence which is not attached to another residential unit. "Taxable Property" All property within the CFD which is not Exempt Property. "Undeveloped Property" All property within the CFD not classified as Developed Property or Exempt Property. "Zone A Lot" A lot designated in the Sorrento Specific Plan and the Vesting Tentative Tract Map 13228 as a minimum 5,000 square foot lot and shown on the District Boundary Map as a part of Zone A. "Zone B Lot" A lot designated in the Sorrento Specific Plan and the Vesting Tentative Tract Map 13228 as a minimum 6,000 square foot lot and shown on the District Boundary Map as part of Zone B. Maximum Special Tax Rat{ Undeveloped Property The Maximum Special Tax Rate for Undeveloped Property shall be S20,000 per Acre per year as shown in Table 1. Developed Property The Maximum Special Tax Rate for Developed Property shall be the Maximum Special Tax Rate as shown in Table 1 or, if the conditions of paragraph 4, under Method of Apportionment of Special Tax apply, Alternate Maximum Special Tax Rate of 50.4302 per parcel square foot. See the Method of Apportionment of Special Tax for further detail. Table 1 Maximum Special Tax Rate Maximum Special Category Classification Tax Rate 0 Undeveloped per Acre S20,000 1 Developed per Zone A Lot 2,151 2 Developed per Zone B Lot 2,581 3 Exempt 0 Method of Apportionment of Special Tax The District will determine the Amount of Annual Levy for the Fiscal Year to be collected from Taxable Property in the CFD for that Fiscal Year. Such determination will begin with the Fiscal Year following District formation. The District will levy the special tax as follows: 1. All property will be classified as Developed Property, Undeveloped Property, or Exempt according to the categories listed on Table 1 as of March 1 of the preceding fiscal year. 2. The special tax shall be levied on each parcel of Developed Property at the Maximum Special Tax Rate for Developed Property from Table 1. 3. The total of 2. shall be subtracted from the Amount of Annual Levy: a. if the Amount of Annual Levy is less than the total of 2., then the special tax on Developed Property shall be reduced, pro rata, to the Amount of Annual Levy. b. if the Amount of Annual Levy is more than the total of 2., then the special tax shall be levied upon Undeveloped Property pro rata on an Acreage basis, to the extent necessary, when added to the total of 2. to equal the Amount of Annual Levy, but not to exceed the Maximum Special Tax Rate for Undeveloped Property. 4. If the Maximum Special Tax Rates for Developed Property and Undeveloped Property, when applied, produce an amount less than the Amount of Annual Levy, then the Alternate Maximum Special Tax Rate shall be used in the manner described below. a. Determine the Alternate Maximum Special Tax for each parcel of Developed and Undeveloped Property by multiplying the parcels' square feet by the Alternate Maximum Special Tax Rate of $0.4302 per parcel square foot. b. Compare the sum of the Alternate Maximum Special Tax from a., to the Amount of Annual Levy. If the Alternate Maximum Special Tax is greater than the Amount of Annual Levy, reduce the Alternate Maximum Special Tax per parcel, pro rata, on a parcel square footage basis, but not lower than the Maximum Special Tax Rates shown in Table 1. Discharge of Special Tax Obligation Any owner of property subject to the special tax may discharge the special tax obligation in full, partial discharge is not permitted, by mating payment as follows: 1. Prior to Full Development of all parcels within the CFD: a. Compute the present value of the remaining payments of special tax at the average coupon rate of the outstanding bonds using the Maximum Special Tax Rate for the parcel; b. To the result of a. add; i) call premium as required in the bond instrument; ii) interest on a. at the applicable bond rate for each year, if any, to the next bond call date; iii) unpaid special taxes which have been entered on the assessor's roll; iv) a $250 administrative fee; and v) subtract the parcel's pro rata share of the bond reserve fund. c. To the result of a. and b. subtract the interest earnings to be generated at the reinvestment rate as determined by the District and from the discharge date to the next bond call date. 2. After Full Development of all parcels within the CFD: a. Divide the special tax of the parcel for the first Fiscal Year, for which the special tax obligation is to be discharged, by the total special tax for all parcels for the Fiscal Year. b. Multiply the bond principal to be outstanding at the end of the current. bond year, by the quotient obtained in a. c. To the result of b. add; i) call premium as required in the bond instrument; ii) interest on b. at the applicable bond rate for each year, if any, to the next bond call date; iii) unpaid special taxes which have been entered on the assessor's roll; iv) a $250 administrative fee; and v) subtract the parcel's pro rata share of the bond reserve fund. d. To the result of b. and c., subtract the interest earnings to be generated at the reinvestment rate as determined by the District and from the discharge date to the next bond call date. Manner of Collection The special tax shall be collected in the same manner and at the same time as ordinary ad valorem property taxes, provided, however, that the special tax may be collected at a different time or in a different manner if necessary to meet its financial obligations. The special tax shall be subject to the same penalties and procedures, sale and lien priority in 6 case of delinquency u is provided for ad valorem taxes. In the event of a delinquency, the District will pursue foredosure in a timely manner. Review /Appeal Council The District shall establish as part of its proceedings and administration of the special tax a three- member Review /Appeal Council which shall consist of those persons currently holding the positions of City Manager, Finance Director, and Director of Planning for the City of Cypress. Any owner subject to the special tax who desires to protest the accuracy of the amount of the special tax imposed on the owner's parcel may file a notice with the Review /Appeal Council, appealing the amount of the special tax assigned to such parcel. The Review /Appeal Council shall make determinations relative to the annual administration of the special tax pursuant to this Rate and Method of Apportionment of the Special Tax and of any owner appeals hereunder, as herein specified and shall perform the duties specified in Sec. 533402 Gov., C.A., as amended. The annual roll of special tax levy obligations shall be presented to the District and placed on the Consent Calendar of the appropriate meeting for action by the District's governing body. Any owner of property subject to the lien of the special tax may appeal the determination of the Review /Appeal: Council to the District's governing body. 7