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HomeMy WebLinkAboutResolution 2006-076 N.C.S. 05/01/2006 Resolution No. 2006-076 N.C.S. of the City of Petaluma, California A RESOLUTION OF INTENTION TO ESTABLISH A SPECIAL TAX DISTRICT CITY OF PETALUMA Special Tax District No. 2006-01 (Theatre District Area) WHEREAS, under the City of Petaluma Special Tax Procedure Code (the "Code"), which is located at Chapter 4.40 of Title 4 of the Petaluma Municipal Code, this Council is authorized to establish a special tax district and to act as the legislative body for a special tax district; and, WHEREAS, this Councii, now desires to proceed with the establishment of a special tax district in order to finance costs of public infrastructure and services necessary or incident to development in the proposed special tax district. NOW, THEREFORE, BE IT RESOLVED as follows: 1. Authority. This Council proposes to conduct proceedings to establish a special tax district pursuant to the Code. 2. Name of TD. The name proposed for the Special Tax District is "City of Petaluma Special Tax District No. 2006-01 (Theatre District Area)" (the "TD"). 3. Boundaries Described. The proposed boundaries of the TD are as shown on the map of it on file with the City Clerk, which boundaries are hereby preliminarily approved and to which map reference is hereby made for further particulars. The City Clerk is hereby directed to record, or cause to be recorded, the map of the boundaries of the TD in the office of the Sonoma County Recorder within 15 days of the date of adoption of this Resolution, but in any event at least 15 days prior to the public hearing specified below. 4. Facilities and Services. (i) Facilities. The type of public facilities proposed to be financed by the TD and pursuant to the Code shall consist of those listed as facilities on Exhibit A hereto and hereby incorporated herein (the "Facilities The Council hereby determines that the Facilities are necessary to meet increased demands placed upon local agencies as the result of development occurring within the TD. The Council hereby finds and determines that the public interest will not be served by allowing the property owners in the TD to enter into a contract in accordance with Section 53329.5(a) of the Mello-Roos Community Facilities Act of 1982, as amended (the "Act"), which is incorporated in the Code pursuant to Section 4.40.130 of the Code. Notwithstanding the foregoing, the Resolution No. 2006-076 N.C.S. Page 1 Council, on behalf of the TD, may enter into one or more contracts directly with any of the property owners with respect to the construction and/or acquisition of the any portion of the Facilities. The City Manager is hereby authorized and directed to enter into joint community facilities agreements with any entity that will own or operate any of the Facilities, as may be necessary to comply with the provisions of Section 4.40.240 of the Code. The Council hereby declares that such joint agreements will be beneficial to residents in the area of the TD. (ii) Services. The type of services proposed to be financed by the TD and pursuant to the Code shall consist of those listed on Exhibit A hereto and hereby incorporated herein (the "Services"). The Council hereby determines that the Services are necessary to meet increased demands placed upon local agencies as the result of development occurring within the area of the TD. 5. Special Tax. Except to the extent that funds are otherwise available, the City will levy a special tax (the "Special Tax") to pay (i) directly for the Facilities and/or pay the principal and interest on bonds of the City issued to finance the Facilities and (ii) for the Services. The Special Tax will be secured by recordation of a continuing lien against all non-exempt real property in the TD, will be levied annually within the TD, and collected in the same manner as ordinary ad valorem property taxes, or in such other manner as this Board or its designee shall determine, including direct billing of the affected property owners. The proposed rate and method of apportionment of the Special Tax among the parcels of real property within the TD in sufficient detail to allow each landowner within the proposed TD to estimate the maximum amount such owner will have to pay, are described in Exhibit B attached hereto and hereby incorporated herein. In the case of any Special Tax to pay for the Facilities and to be levied against any parcel used for private residential purposes: (i) the maximum special tax shall be specified as a dollar amount which shall be calculated and thereby established not later than the date on which the parcel is first subject to the tax because of its use for private residential purposes and which amount shall not be increased over time over two percent per year; (ii) the tax year after which no further Special Tax subject to this sentence shall be levied or collected shall be as set forth in Exhibit B hereto; and (iii) under no circumstances will the Special Tax levied against any parcel subject to this sentence be increased as a consequence of delinquency or default by the owner of any other parcel within the TD by more than ten percent. For the purposes hereof, a parcel is used for "private residential purposes" not later than the date on which an occupancy permit for private residential use is issued. This Council hereby finds that the provisions of Section 53313.6, 53313.7 and 53313.9 of the .Act (relating to adjustments to ad valorem property taxes and schools financed by a special tax district) are inapplicable to the proposed TD. 6. Exempt Property. Except. as may otherwise be provided by law or by the rate and method. of apportionment of the Special Tax -for the TD, all lands owned by any public entity, including the United States, the State of California and/or the Resolution No. 2006-076 N.C.S. Page 2 City, or any departments or political subdivisions thereof, shall be omitted from the levy of the Special Tax to be made to cover the costs and expenses of the Facilities and the TD. In the event that a portion of the property within the TD shall become for any reason exempt, wholly or in part, from the levy of the Special Tax, this Council will, on behalf of the TD, increase the levy to the extent necessary upon the remaining property within the TD which is not exempt in order to yield the required debt service payments and other annual expenses of the TD, if any, subject to the provisions of the rate and method of apportionment of the Special Tax. 7. Election. The levy of the Special Tax shall be subject to the approval of the qualified electors of the TD at a special election. The proposed voting procedure shall be by mailed or hand-delivered ballot among the landowners in the proposed TD, with each owner having one vote for each acre or portion of an acre such owner owns in the TD. 8. Special Tax .Bonds. It is the intention of this Council, acting as the legislative body for the TD, to cause bonds of the City to be issued .for the TD pursuant to the Code to finance in whole or in part the construction and/or acquisition of the Facilities. The bonds shall be in the aggregate principal amount of not to exceed $4,500,000, shall be issued in such series and bear interest payable semi-annually or in such other manner as this Council shall determine, at a .rate not to exceed the maximum rate of interest as may be authorized by applicable law at the time of sale of such bonds, and shall mature not to exceed 40 years from the date of the issuance thereof. 9. TD Report. The City's Director of Economic Development, as the officer having charge and control of the Facilities and the Services in and for the TD, or the designee of such officer, is hereby directed to study said proposed Facilities and to make, or cause to be made, and file with the City Clerk a report in writing, (the "TD Report") presenting the following: (i) With respect to the Facilities: (a) A description of the Facilities by type which will be required to adequately meet the needs of the TD. (b) An estimate of the fair and reasonable cost of the Facilities including the cost of acquisition of lands, rights-of--way and easements, any physical facilities required in conjunction therewith and incidental expenses in connection therewith, including the costs of the proposed bond financing and all other related costs as provided in Section 53345.3 of the Act. (ii) With respect to the Services: (a) A description of the Services by type which will be required to adequately meet the needs of the TD. (b) An estimate of the fair and reasonable cost of the Services. Resolution No. 2006-076 N.C.S. Page 3 The TD Report shall be made a part of the record of the public hearing specified below. 10. Public Hearing. June 19, 2006 at 3:00 p.m. or as soon as possible thereafter, in the Council Chambers, 11 English Street, Petaluma, California, and the same are hereby appointed and fixed as the time and place when and where this Council, as legislative body for the TD, will conduct a public hearing on the establishment of the TD and consider and finally determine whether the public interest, convenience and necessity require the formation of the TD and the levy of the Special Tax. 11. Notice of Hearing. The City Clerk is hereby directed to cause notice of the public hearing to be given by publication one time in a newspaper published in the area of the TD. The publication shall be completed at least five days before the date of the public hearing specified above. The City Clerk may also cause notice of the hearing to be given to each property owner within the TD by first class mail, postage prepaid, to each such owner's address as it appears on the most recent tax records of Sonoma County or as otherwise known to the City Clerk to be correct. Each of the notices shall be substantially in the form specified in Section 53322 of the Act, with the form summarizing the provisions hereof hereby specifically approved. Under the power and authority conferred upon this Council by the Charter of said City. REFERENCE: I hereby certify the foregoing Resolution was introduced and adopted by the A r ved a to Council of the City of Petaluma at a Regular meeting on the 1 S` day of May, 2006, f~rm: by the following vote: City Atto~ AYES: Vice Mayor Canevaro, Healy, Nau, Torliatt NOES: None ABSENT: Mayor Glass, Harris, O'Brien ABSTAIN: None ATTEST: City Clerk a' r Resolution No. 2006-076 N.C.S. Page 4 EXHIBIT A CITY OF PETALUMA Special Tax District No. 2006-01 (Theatre District Area) Description of Facilities and Services to be Financed by the TD Facilities The Facilities shown below are proposed to be financed by Special Tax District No. 2006-O1 (Theatre District Area) (the "TD") of the City of Petaluma (the "City"). The Facilities shall include the attributable costs of engineering, design, planning and coordination, together with the expenses related to the issuance and sale of any special tax bonds, including underwriters' discount, appraisals, reserve fund, capitalized interest, bond counsel, special tax consultant, bond and official statement printing and all other expenses incidental thereto. The Facilities shall be constructed, whether or not acquired in their completed states, pursuant to the plans and specifications approved by the City and the officials thereof, including the City Engineer. The Facilities include water, sewer and stormwater improvements; demolition and construction of streets and sidewalks; acquisition and installation of street signals and street lights; landscaping; undergrounding of existing utility lines; street furniture (including, but not limited to, tree grates, water fountains, art, bike racks, benches, and trash receptacles); and remediation of contaminated soil. Services The TD will finance, in whole or in part, the following public services (the "Services") ("services" shall have the meaning given that term in Section 4.40.170(c) of the City of Petaluma Special Tax Procedure Code), including all related administrative costs, related reserves for replacement of vehicles and equipment, and expenses: • Landscaping services. o Services relating to streets (.including curbs and gutters), streetlighting, street signals and street signs. Resolution No. 2006-076 N.C.S. Page 5 Exhibit B RATE AND METHOD OF APPORTIONMENT FOR CITY OF PETALUMA SPECIAL TAX DISTRICT NO. 2006-01 (THEATRE DISTRICT AREA) March 27, 2006 A Special Tax as hereinafter defined shall be levied on all Assessor's Parcels in City of Petaluma Special Tax District No. 2006-O1 (Theatre District Area) ("TD No. 2006-01 and collected each fiscal year commencing in Fiscal Year 2006-07, in an amount determined by the City Council through the application of the appropriate Special Tax as described below. All of the real property in TD No. 2006-01, unless exempted by law or by the provisions hereof, shall be taxed for the purposes, to the extent and in the manner herein provided. A. DEFINITIONS The terms hereinafter set forth have the following meanings: "Acre or Acreage" means the land area (excluding public rights-of-way) of an Assessor's Parcel as shown on an Assessor's Parcel Map, or if the land area is not shown on an Assessor's Parcel Map, the land area shown on the applicable final map, parcel map, condominium plan, or other recorded parcel map (excluding public rights-of-way). If the land area is presented in square footage, then the Acreage equals the parcel square footage divided by 43,560 square feet. "Act" means the City of Petaluma Special Tax Procedure Code, being Chapfer 4.40, Title 4, of the Petaluma Municipal Code. "Administrative. Expenses" means the following actual or reasonably estimated costs directly related to the administration of TD No. 2006-01: the costs of computing the Special Taxes and preparing the annual Special Tax collection schedules (whether by the City or designee thereof or both); the costs of collecting the Special Taxes (whether by the County, the City or otherwise); the costs of remitting the Special Taxes to the Trustee; the costs of the Trustee (including its legal counsel) in the discharge of the duties required of it under the Indenture; the costs to the City, TD No. 2006-01 or any designee thereof of complying with arbitrage rebate requirements; the costs to the City, TD No. 2006-O1 or any designee thereof of complying with disclosure requirements of the City, TD No. 2006-01 or obligated persons associated with applicable federal and state securities laws and the Act; the costs associated with preparing Special Tax disclosure statements and responding to public inquiries regarding the Special Taxes; the costs of the City, TD No. 2006-01 or any designee thereof related to any appeal of the Special Tax; the costs associated with the release of funds from an escrow or appeals account, including appraisal costs; and the City's annual administration fees and third party expenses. Administrative Expenses shall also include amounts estimated by the TD Administrator or advanced by the City or TD No. 2006-01 for any other administrative purposes of TD No. 2006-01, including attorney's fees and other costs related to commencing and pursuing to completion any foreclosure of delinquent Special Taxes. "Assessor's Parcel" means a parcel shown in an Assessor's Parcel Map with an assigned Assessor's parcel number. "Assessor's Parcel Map" means an official map of the Assessor of the County of Sonoma designating parcels by Assessor's Parcel number. "Assigned Improvement Special Tax" means the Improvement Special Tax for each Taxable Property, as determined in accordance with Section C below. Resolution No. 2006-076 N.C.S. Page 6 "Assigned Maintenance Special Tax" means the Maintenance Special Tax for each Taxable Property, as determined in accordance with Section I below. "Backup Improvement Special Tax" means the Improvement Special Tax applicable to each Assessor's Parcel of Taxable Property, as determined in accordance with Section C (1) below. "Bonds" means any binding obligation including bonds or other debt (as defined in Section 53317(d) of the California Government Code), whether in one or more series, issued by TD No. 2006-O1 under the Act. "TD Administrator" means the person or firm that the City of Petaluma chooses to make responsible for determining the Special Tax Requirement and providing for the levy and collection of the Special Taxes. "TD No. 2006-01" means City of Petaluma Special Tax District No. 2006-01 (Theatre District Area). "City" means the City of Petaluma located in the County of Sonoma, State of California. "City Council" means the City Council of the City of Petaluma, acting as the legislative body of TD No. 2006-O1. "County" means the County of Sonoma. "Exempt Property" means any property not subject to the Special Tax as described under Section M. "Final Map" means (i) a final map or parcel map, or portion thereof, approved by the City pursuant to the Subdivision Map Act (California Government Code Section 66410 et seq.) that creates individual lots for which building permits may be issued, or (ii) for condominiums, a final map approved by the City and a condominium plan recorded pursuant to California Civil Code Section 1352 creating such individual lots. "Fiscal Year" means the period starting July 1 and ending on the following June 30. . "Improvement Special Tax" means the special tax to be levied in each Fiscal Year on each Assessor's Parcel to fund the Improvement Special Tax Requirement. "Improvement Special Tax Requirement" means that amount required in any Fiscal Year for TD No. 2006-O1 to pay the sum of: (i) debt service on all Outstanding Bonds which is due in the calendar year that commences in such fiscal year; (ii) periodic costs on the Bonds, including but not limited to, credit enhancement and rebate payments on the Bonds; (iii) Administrative Expenses; (iv) any amounts required to establish or replenish any reserve funds for all Bonds issued or to be issued by TD No. 2006-O1; and (v) any amounts required for construction of facilities eligible under the Act. In arriving at the Improvement Special Tax Requirement, the TD Administrator shall take into account the reasonably anticipated delinquent Improvement Special Taxes based on the delinquency rate for Improvement Special Taxes levied in the previous Fiscal Year (and such other reasonable factors identified by the TD Administrator and/or the City) and shall give a credit for funds available to reduce the annual Improvement Special Tax levy. "Indenture" means the indenture, fiscal agent agreement, resolution or other instrument pursuant to which Bonds are issued, as modified, amended andJor supplemented from time to time, and any instrument replacing or supplementing the same. Resolution No. 2006-076 N.C.S. Page 7 "Maintenance Expenses" means the expenses of the City, whether by the City or designee of the City, or both, in the furnishing of services and materials for the ordinary and usual maintenance, operation and servicing, including repair, removal or replacement of all or part of any of the landscaping, street or appurtenant facilities within the boundaries of TD No. 2006-01; Maintenance means the furnishing of services and materials for the ordinary and usual operation, maintenance and servicing of the street improvements or appurtenant facilities including the cleaning, sandblasting, and painting of the improvements to remove or cover graffiti, and also providing for the life, growth, health and beauty of the landscaping, including cultivation, irrigation, trimming, spraying, fertilizing and treating for disease or injury; the removal of trimmings, rubbish, debris and other solid waste. This includes the furnishing of water for the irrigation and the furnishing of electric current or energy for any irrigation facilities or appurtenant facilities. "Maintenance Special Tax" means the special tax to be levied in each Fiscal Year on each Assessor's Parcel to fund the Maintenance Special Tax Requirement. "Maintenance Special Tax Requirement" means that amount required in any Fiscal Year for TD No. 2006-O1 to pay the sum of: (i) Maintenance Expenses; (ii) Administrative Expenses; and (iii) any amounts required to establish or replenish any operating reserve funds. In arriving at the Maintenance Special Tax Requirement, the TD Administrator shall take into account the reasonably anticipated delinquent Maintenance Special Taxes based on the delinquency rate for Maintenance Special Taxes levied in the previous Fiscal Year (and such other reasonable factors identified by the TD Administrator and/or the City) and shall give a credit for funds available to reduce the annual Maintenance Special Tax levy. "Maximum Improvement Special Tax" means the maximum Improvement Special Tax, determined in accordance with Section C below that can be levied in any Fiscal Year on any Assessor's Parcel. "Maximum Maintenance Special Tax" means the maximum Maintenance Special Tax, determined in accordance with Section I below that can be levied in any Fiscal Year on any Assessor's Parcel. "Outstanding Bonds" means all Bonds that are deemed to be outstanding under the Indenture. "Parcel" means an Assessor's Parcel. "Proportionately" means, in any Fiscal Year, that the ratio of the actual Special Tax levy to the Assigned Special Tax is equal for all Assessor's Parcels, or where the Backup Improvement Special Tax is being levied, that the ratio of the actual Special Tax levy to the Maximum Special Tax is equal for all Assessor's Parcels upon which a Backup Improvement Special Tax is being levied. "Public Property" means any property within the boundaries of TD No. 2006-O1 that is transferred to a public agency on or after the date of formation of TD No. 2006-O1 and is used for rights-of-way, or any other purpose and is owned by or dedicated to the federal government, the State of California, the County, the City or any other public agency; provided however that any property leased by a public agency to a private entity and subject to taxation under Section 53340.1 of the California Government Code shall be taxed and classified in accordance with its use. Privately-owned property that is otherwise completely constrained by public use and necessity through easement, lease or license shall be considered Public Property. "Special Taxes" means, collectively or individually, as applicable, the Improvement Special Tax and the Maintenance Specidl Tax. Resolution No. 2006-076 N.C.S. Page 8 "State" means the State of California. "Taxable Property" means all of the Assessor's Parcels within the boundaries of TD No. 2006-01, which are not exempt from the Special Tax pursuant to law or Section M below. "Trustee" means the trustee, fiscal agent, or paying agent under the Indenture. B. CLASSIFICATION OF PROPERTIES Each Fiscal Year, all Property within TD No. 2006-01 shall be classified as Taxable Property or Exempt Property as of May 1 and shall be subject to Special Taxes in accordance with the rate and method of apportionment determined pursuant to Sections C, D, I and J unless otherwise exempted by Section M. Once classified as Taxable Property, a parcel may not be subsequently changed to Exempt Property without the Improvement Special Tax being paid off in full in accordance with Section G. C. IMPROVEMEfVT SPECIAL TAX RATE Assigned Improvement Special Tax The initial Assigned .Improvement Special Tax for each property is $26,91 b per acre. Increase in the Assigned Improvement Special Tax The initial Assigned Improvement Special Taxes shall be applicable for Fiscal Year 2006- 07, and shall increase thereafter, commencing on July 1, 2007 and on July 1 of each Fiscal Year thereafter, by an amount equal to two percent (2%) of the Assigned Improvement Special Tax for the previous Fiscal Year. Backup Improvement Special Tax The initial Backup Improvement Special Tax shall be equal to the amounts shown in Table 1 below. The Map No. refers to the Proposed Boundary Map for TD No. 2006-O1, a reduced copy of which is provided at the end of this Rate and Method of Apportionment. TABLE 1 Initial Backup Improvement Special Tax Backup Backup Backup Map Improvement Map Improvement Map Improvement No. APN Special Tax No. APN Special Tax No. APN Special Tax 2 008-067-003 $7,536.48 14 008-124-005 $16,418.76 28 008-066-007 $3,499.08 3 008-069-002 $16,957.08 15 008-122-005 $18,302.88 29 008-066-006 $7,536.48 5 008-121-001 $11,304.72 16 008-122-006 $15,611.28 30 008-066-002 $7,805.64 6 008-121-007 $9,420.60 18 008-068-003 $9,420.60 31 008-066-003 $6,190.68 7 008-121-008 $15,880.44 20 008-068-002 $9,151.44 32 008-066-009 $12,112.20 8 008-121-009 $15,880.44 21 008-068-001 $9,151.44 33 008-123-001 $4,306.56 9 008-121-010 $12,112.20 23 008-054-005 $23,686.08 34 008-123-015 $12,381.36 10 008-121-011 $9,689.76 24 008-065-005 $4,844.88 44 008-064-010 $9,151.44 11 008-121-012 $15,072.96 25 008-065-004 $4;844.88 45 008-064-002 $9,420.60 12 008-124-007 $12,112.20 26 00$-065-002 $22,609.44 46 008-063-007 $13,727.16 13 008-124-006 $12,112.20 27 008-065-003 $4,037.40 Resolution No. 2006-076 N.C.S. Page 9 In the event an Assessor's Parcel subdivides, the Backup Improvement Special Tax shall be apportioned to the newly subdivided lots based on the Acreage of the new lots. If two or more Assessor's Parcels combine, the Backup Improvement Special Tax for each Assessor's Parcel shall be combined. The Backup Improvement Special Tax shall not change in the event an Assessor's Parcel experiences a reduction in Acreage due to the dedication or irrevocable dedication of public property, public right-of-way, or public easement. Increase in the Backup Improvement Special Tax The initial Backup Improvement Special Taxes shall be applicable for Fiscal Year 2006-07, and shall increase thereafter, commencing on July 1, 2007 and on July 1 of each Fiscal Year thereafter, by an amount equal to two percent (2%) of the Backup Improvement Special Tax for the previous Fiscal Year. Maximum Improvement Special Tax The Maximum Improvement Special Tax for each Assessor's Parcel shall be the greater of (i) the amount derived by application of the Assigned Improvement Special Tax or (ii) the amount derived by application of the Backup Improvement Special Tax. D. METHOD OF APPORTIONMENT OF THE IMPROVEMENT SPECIAL TAX Commencing with Fiscal Year 2006-07 and for each following Fiscal Year, the City Council shall levy the Improvement Special Tax until the amount of Improvement Special Tax levied equals the Improvement Special Tax Requirement. The Improvement Special Tax shall be levied each Fiscal Year as follows: First: The Improvement Special Tax shall be levied proportionately on each Assessor's Parcel at up to 100% of the applicable Assigned Improvement Special Tax; Second: If additional monies are needed to satisfy the Improvement Special Tax Requirement after the first step has been completed, then the levy of the Improvement Special Tax on each Assessor's Parcel whose Maximum Improvement Special Tax is determined through the application of the Backup Improvement Special Tax shall be increased Proportionately from the Assigned Improvement Special Tax up to the Maximum Special Tax for each such Assessor's Parcel. E. MANNER OF COLLECTION OF IMPROVEMENT SPECIAL TAX The Improvement Special Tax shall be collected in the same manner and at the same time as ordinary ad valorem property taxes; provided, however, that TD No. 2006-01 may directly bill the Improvement Special Tax; may collect Improvement Special Taxes at a different time or in a different manner if necessary to meet its financial obligations, and may covenant to foreclose and may actually foreclose on delinquent Assessor's Parcels as permitted by the Act. F. PREPAYMENT OF IMPROVEMENT SPECIAL TAX PRIOR BOND ISSUE Full prepayments of Improvement Special Taxes may be made for any Parcel(s) subject to the levy of the Improvement Special Taxes prior to the issuance of Bonds if the request to make a prepayment is received by the TD Administrator no less than 30 days prior to the sale of Bonds. A Parcel's entire Improvement Special Tax obligation may be prepaid prior to the issuance of Bonds at 100% of the Maximum Improvement Special Tax as described in Section G. With respect to any Parcel that is prepaid, the City Council shall cause a suitable notice to be recorded in compliance with the Act, to indicate the prepayment of Improvement Resolution No. 2006-076 N.C.S. Page ] 0 Special Taxes and the release of the Improvement Special Tax lien on such Parcel, and the obligation of such Parcel to pay the Improvement Special Tax shall cease. G. PREPAYMENT OF IMPROVEMENT SPECIAL TAX AFTER BOND ISSUE The following definitions apply to this Section G: "TD Public Facilities Costs" means either $15,070,665 in 2005 dollars, which shall increase by the Construction Inflation Index (as defined below) on July 1, 2007, and on each July 1 thereafter, or such lower number as (i) shall be determined by the TD Administrator as sufficient to provide the public facilities to be provided by TD No. 2006-01 under the authorized bonding program for TD No. 2006-O1, or (ii) shall be determined by the Council concurrently with a covenant that it will not issue any more Bonds to be supported by the Improvement Special Tax levied under this Rate and Method of Apportionment as described in Section C. "Construction Fund" means an account specifically identified in the Indenture to hold funds which are currently available for expenditure to acquire or construct public facilities eligible under the Act. "Construction Inflation Index" means the annual percentage change in the Engineering News-Record Building Cost Index for the City of San Francisco, measured as of the calendar year which ends in the previous Fiscal Year. In the event this index ceases to be published, the Construction Inflation Index shall be another index as determined by the TD Administrator that is reasonably comparable fo the Engineering News-Record Building Cost Index for the City of San Francisco. "Future Facilities Costs" means the STD Public Facilities minus (i) public facility costs previously paid from the Construction Fund, (ii) moneys currently on deposit in the Construction Fund, and (iii) moneys currently on deposit in an escrow fund that are expected to be available to finance facilities costs. "Outstanding Bonds" means all Previously Issued Bonds which are deemed to be outstanding under the Indenture after the first interest and/or principal payment date following the current Fiscal Year. "Previously Issued Bonds" means all Bonds that have been issued by TD No. 2006-01 prior to the date of prepayment. The obligation of an Assessor's Parcel to pay the Improvement Special Tax may be prepaid and .permanently satisfied after issuance of bonds as described within this Section G; provided that a prepayment may be made only for Assessor's Parcels if there are no delinquent Special Taxes with respect to such Assessor's Parcel at the time of prepayment. An owner of an Assessor's Parcel intending to prepay the Improvement Special Tax obligation shall provide the TD Administrator with written notice of intent to prepay. Within 30 days of receipt of such written notice, the TD Administrator shall notify such owner of the prepayment amount of such Assessor's Parcel. The TD Administrator may charge a reasonable fee for providing this service. Prepayment must be made not less than 45 days prior to the next occurring date that notice of redemption of Bonds from the proceeds of such prepayment may be given to the Trustee pursuant to the Indenture, unless waived by the City. The Improvement Special Tax Prepayment Amount (defined below) shall be calculated as summarized below (capitalized terms as defined below): Bond Redemption Amount plus Redemption Premium plus Future Facilities Amount plus Defeasance Amount plus Administrative .Fees and Expenses Resolution No. 2006-076 N.C.S: Page 11 less Reserve Fund Credit less Capitalized Interest Credit Total: equals Improvement Special Tax Prepayment Amount As of the proposed date of prepayment, the Improvement Special Tax Prepayment Amount (defined below) shall be calculated as follows: Paragraph No.: 1. Confirm that no Special Tax delinquencies apply to such Assessor's Parcel. 2. Compute the Assigned Improvement Special Tax and Backup Improvement Special Tax applicable for the Assessor's Parcel to be prepaid. 3. (a) Divide the Assigned Improvement Special Tax computed pursuant to paragraph 2 by the total estimated Assigned Improvement Special Taxes for TD No: 2006-01 based on the Improvement Special Taxes which could be charged in the current Fiscal Year, excluding any Assessor's Parcels which have been prepaid, and (b) Divide the Backup Improvement Special Tax computed pursuant to paragraph 2 by the estimated total Backup Improvement Special Taxes, excluding any Assessor's Parcels which have been prepaid. 4. Multiply the larger quotient computed pursuant to paragraph 3(a) or 3(b) by the Outstanding Bonds to compute the amount of Outstanding Bonds to be retired and prepaid (the "Bond Redemption Amount"). 5. Multiply the Bond Redemption Amount computed pursuant to paragraph 4 by the applicable redemption premium (e.g., the applicable percentage or excess of the par amount of the Bonds to be redeemed), if any, on the Outstanding Bonds to be redeemed (the "Redemption Premium"). 6. Compute the current Future Facilities Costs 7. Multiply the larger quotient computed pursuant to paragraph 3(a) or 3(b) by the amount determined pursuant to paragraph 6 to compute the amount of Future Facilities Costs to be prepaid (the "Future Facilities Amount"). 8. Compute the amount needed to pay interest on the Bond Redemption Amount from the first bond interest and/or principal payment date following the written notice of intent to prepay until the redemption date for the Outstanding Bonds. 9. Determine the Improvement Special Tax levied on the Assessor's Parcel in the current Fiscal Year which has not yet been paid. 10. Add the amounts computed pursuant to paragraphs 8 and 9 (the "Defeasance Amount"). 1 1. Verify the administrative fees and expenses of TD No. 2006-O1, including the costs of computation of the prepayment, the costs to invest the prepayment proceeds, the costs of redeeming Bonds, and the costs of recording any notices to evidence the prepayment and the redemption (the "Administrative Fees and Expenses"). 12. If reserve funds for the Outstanding Bonds, if any, are at or above 100% of the Reserve Requirement (as defined in the Indenture) on the prepayment date, a reserve fund credit shall be calculated as a reduction in the applicable reserve fund for the Outstanding Bonds to be redeemed pursuant to the prepayment (the "Reserve Fund Resolution No. 2006-076 N.C.S. Page 12 Credit"). No Reserve Fund Credit shall be granted if reserve funds are below 100% of the Reserve Requirement. 13. If any capitalized interest for the Outstanding Bonds will not have been expended at the time of the first interest and/or principal payment following the current Fiscal Year, a capitalized interest credit shall be calculated by multiplying the larger quotient computed pursuant to paragraph 3(a) or 3(b) by the expected balance in the capitalized interest fund after such first interest and/or principal payment (the "Capitalized Interest Credit"). 14. The Special Tax prepayment is equal to the sum of the amounts computed pursuant to paragraphs 4, 5, 7, 10 and 1 1, less the amounts computed pursuant to paragraphs 12 and 13 (the "Prepayment Amount"). 15. From the Prepayment Amount, the amounts computed pursuant to paragraphs 4, 5, 10, 12 and 13 shall be deposited into the appropriate fund as established under the Indenture and be used to retire Outstanding Bonds or make debt service payments. The amount computed pursuant to paragraph 7 shall be deposited into the Construction Fund. The amount computed pursuant to paragraph 11 shall be retained by TD No. 2006-01. The Improvement Special Tax Prepayment Amount may be sufficient to redeem other than a $5,000 increment of Bonds. In such cases, the increment above $5,000 or integral multiple thereof will be retained in the appropriate fund established under the Indenture to be used with the next prepayment of bonds or to make debt service payments. If moneys remain after the redemption of the Outstanding Bonds allocable to the parcel(s) making prepayment as discussed in this section, then such amounts shall be refunded to the party making payment. As a result of the payment of the current Fiscal Year's Special Tax levy as determined under paragraph 9 (above), the TD Administrator shall remove the current Fiscal Year's Improvement Special Tax levy for such Assessor's Parcel from the County tax rolls. With respect to any Assessor's Parcel that is prepaid, the Council shall cause a suitable notice to be recorded in compliance with the Act, to indicate the prepayment of the Improvement Special Tax and the release of the Improvement Special Tax lien on such Assessor's Parcel, and the obligation of such Assessor's Parcel to pay the Improvement Special Tax shall cease. Notwithstanding the foregoing, no Improvement Special Tax prepayment shall be allowed unless the amount of Assigned Improvement Special Taxes that may be levied on Taxable Property within TD No. 2006-O1 both prior to and after the proposed prepayment is at least 1.1 times the maximum annual debt service on all Outstanding Bonds. H. TERM OF IMPROVEMENT SPECIAL TAX The Improvement Special Tax shall be levied on an Assessor's Parcel for a period not to exceed 60 Years. I. MAINTENANCE SPECIAL TAX RATE Assigned Maintenance Special Tax The initial Assigned Maintenance Special Tax for each property is $9,659 per acre. Increase in the Assigned Maintenance Special Tax Resolution No. 2006-076 N.C.S. Page 13 The initial Assigned Maintenance Special Taxes shall be applicable for Fiscal Year 2006- 07, and shall increase thereafter, commencing on July 1, 2007 and on July 1 of each Fiscal Year thereafter, by an amount equal to the annual change in the Engineering News Record (ENR) Construction Cost Index for the San Francisco area, as of February of each year. Maximum Maintenance Special Tax The Maximum Maintenance Special Tax for each Assessor's Parcel shall be the Assigned Maintenance Special Tax. J. METHOD OF APPORTIONMENT OF THE MAINTENANCE SPECIAL TAX Commencing with Fiscal Year 2006-07 and for each following Fiscal Year, the City Council shall levy the Maintenance Special Tax until the amount of Maintenance Special Tax levied equals the Maintenance Special Tax Requirement. The Maintenance Special Tax shall be levied each Fiscal Year proportionately on each Assessor's Parcel of Taxable Property at up to 100% of the applicable Assigned Maintenance Special Tax. K. MANNER OF COLLECTION MAINTENANCE SPECIAL TAX The Maintenance Special Tax shall be collected in the same manner and at the same time as ordinary ad valorem property taxes; provided, however, that TD No. 2006-O1 may directly bill the Maintenance Special Tax and may collect Maintenance Special Taxes at a different time or in a different manner if necessary to meet its financial obligations. L. TERM OF MAINTENANCE SPECIAL TAX The Maintenance Special Tax shall be levied on Assessor's Parcels in perpetuity. M. EXEMPTIONS Property is exempt from special taxes when owned by a public agency. Should an Assessor's Parcel no longer be Public Property, its tax-exempt status will be revoked. Resolution No. 2006-076 N.C.S. Page 14 PROPOSED BOUNDARY OF CITY OF PETALUMA SPECIAL TAX DISTRICT No. 2006-1 (THEATRE DISTRICT AREA) COUNTY OF SONOMA, STATE OF CALIFORNIA ASSESSOR'S PARCEL NUMBERS I APN ~ APN x 1 008067004 28 008066007 3 2 008067003 29 008066006 a xx 3 008069002 30 008066002 z3 xo ~sr f ~r 6 a 4 008069001 31 008066003 s x~ xl 1° T x 5 008121001 32 008066009 ° u 76 ~ Ta a 6 008121007 33 008123001 n xa ~~Ef>- T la ID IT 7 008121008 34 008123015 So ~ zo 3037 Is 8 008121009 35 008123002 T ~ 33 ~ 1• 9 008121010 36 008123003 ~ t~ ~ 13 ~ ° 3< 3x Tx 10 008121011 37 008123012 it 008121012 38 008123013 H MTh " 12 008124007 39 008123014 t3 008124006 40 008123010 rr ax 14 008124005 41 008123009 sl O 15 008122005 42 008111001 ax 16 008122006 43 008064005 17 008122002 44 008064010 18 008068003 45 008064002 tEf~NQ 19 008068004 46 008063007 Ass~'S PN~ IWE 20 008068002 47 008063006 ® pSIRICT BOUNDART 21 008068001 48 008063011 7 AsgssaR•s pyy~ Map 22 006067001 49 008063008 23 008054005 50 008063009 24 008065005 51 008062009 25 008065004 52 008112001 26 008065002 27 008065003 scALe: I'-zoo' FNED W THE OFF7CE OF THE QTY CiEIM Di THE ptt tF PETALUMA THK DAY OF ~00a. . tl CLE1tK OF 711E tltt PETAUMA 1 NER®Y CER71fY THAT 1NE M7HW MM S710NINC Tiff PROPOSED BOUNDARIES DF THE p7Y OF PETALINIA SPEtlAL TAX OISTRMT N0. 200x-1. COUNTY OF SONp1A, STATE OF CALIFORNIA WAS APPRO~fD BY THE QTY COVNtlI OF THE tltt a PETN.UYA: AT A REQJLARLY SCHEDULED 11EEiMC THEREOF. HELD ON IHE OAY DF 100x. BY ITS RESOWRON No. p tltt OF PETALUMA FILED THIS _ DAY aF x006. AT 7NE HpW OF O'CLOCK~M. M BOOK_ aF MAPS OF ASSESSMENT AND CWMUIbtt FACLL111E$ DISiRICi$ PACE NOS_7HROU4N__ AS M57RUMENi N0. M 1HE OFT7CE aF iNE COUNTY RECORDER W iME COUNtt OF SONOMA STALE OF CALIFORMA COON CORDER THE COUNTY Of SONOMA • FEE REFERENCE 7NE SCNp1A COUNTY ASSESSORY MAPS FOR A OETNLED DESCRtl'7NW aF PMCEL lMES AND OWENSIONS PROPOSED 80UNDARY NiAP CITY OF PETALUIEA SPECIAL TAR DISTRICT No. 2008-1 HARRIS k ASSOCIATES (TtQ+r?TRS DIS1'RtCT AREA) 170 Mown Ckd~ COUNTY O? SONOY~ C3IDOBM~ OannN, G fI5x0 (fls) en-~foo a FN pn) en-~fe1 ~ ®L..E L OT L A: V.w..W.+~\r.Awoa..f wAtA+. Resolution No. 2006-076 N.C.S. Page 15