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HomeMy WebLinkAbout13 Res 2021-05 and 2021-06 Inten to Establish CFD Dist. No. 2021-1 University Park STAFF REPORT CITY OF PALM DESERT FINANCE DEPARTMENT MEETING DATE: March 11, 2021 PREPARED BY: Veronica Tapia, Senior Management Analyst REQUEST: Adopt Resolution Nos. 2021-_05_ and 2021-_06_, Resolutions of Intention of the City Council of the City of Palm Desert to: 1) establish City of Palm Desert Community Facilities District No. 2021-1 (University Park) and authorize the levy of a special tax therein, and 2) incur bonded indebtedness within the proposed City of Palm Desert Community Facilities District No. 2021-1 (University Park), respectively. ________________________________________________________________________ Recommendation That the City Council waive further reading and adopt 1) Resolution No. 2021-_05___, A Resolution of Intention of the City Council of the City of Palm Desert to establish City of Palm Desert Community Facilities District No. 2021-1 (University Park) and to authorize the levy of a special tax within the City of Palm Desert Community Facilities District No. 2021-1 (University Park); and 2) Resolution No. 2021-_06___, A Resolution of Intention of the City Council of the City of Palm Desert to incur bonded indebtedness within the proposed City of Palm Desert Community Facilities District No. 2021-1 (University Park) Strategic Plan Approval of the attached resolutions supports the Land Use, Housing and Open Space Priority 2 by taking the initial steps for a funding mechanism to assist in financing further development of University Park. Executive Summary University Park Investor, LLC (“UPI”) is one of the property owners in the area known as University Park and the developer of approximately 170 acres located therein. UPI has requested that the City form a new Mello-Roos Community Facilities District (CFD) to be known as City of Palm Desert Community Facilities District No. 2021-1 - University Park (“CFD 2021-1”) and implement a coordinated plan of refunding consisting of the issuance of CFD 2021-1 Bonds and the refunding of the existing City of Palm Desert 2005-1 - University Park (“CFD 2005-1”) Bonds for special tax savings to all the property owners in the CFD. UPI has also requested that the City include authorization for the CFD 2021- 1 bonds to finance additional facilities required as conditions of its development. The March 11, 2021 - Staff Report Adopt Reso 2021-05 of Intent to Establish CFD 2021-1 and Levy Special Tax Adopt Reso 2021-06 of Intent to Incur Bonded Indebtedness within CFD 2021-1 Page 2 of 4 W:\Staff Reports - Shared 2\Staff Reports 3-11-2021\4 -City Clerk - 03-11-2021\UPI Refunding\01 SR - Adopt Resolution to Approve Reso of Intent and Tax Levy for UP 3-1- 21.docx approval of the two resolutions is a necessary step to begin the process to form CFD 2021-1 and to facilitate the financing needs of the development. Background CFD 2005-1 issued two series of debt in 2006 and 2007 with a combined par amount of $67.915 million. The repayment of that debt is a burden that is carried by the property owners within the boundaries of CFD 2005-1. At the time of issuance, it was anticipated that the properties would be developed with a mix of residential, commercial, office, and open space. Due to timing, market conditions and subsequent market downturn, only about 23% of the properties in CFD 2005-1 have been developed to date. The remaining 77% is now owned by UPI (63%) and the remaining 6 parcels (14%), are owned by other parties. UPI has completed the entitlement process with the Planning Department and commenced grading on February 1, 2021. While actively engaged in the development process, UPI has also requested that staff assist with refunding the outstanding debt if sufficient savings can be recognized. When a CFD is substantially undeveloped, the cooperation of the owner(s) of significant portions of undeveloped property in the CFD is required for the refunding bonds process in order to elicit and provide the appropriate information to potential investors of the refunding bonds. In 2019, staff and UPI began the process to refund the CFD 2005-1 debt for savings. A few months into the process, UPI asked staff to pause the refunding. In August of 2020, UPI requested that the City resume the refunding process and include in the process the formation of the new CFD to facilitate the financing of new facilities and costs required for UPI’s project without adversely affecting the special taxes for the other properties within CFD 2005-1. In preparation of the next possible debt call in September of 2021, the City Council in September of 2020 approved extension agreements with the Financing Team. On January 14, 2021 City Council approved the deposit and reimbursement agreement with UPI for reimbursement of the City’s costs associated with the formation of a CFD for the University Park project development and the issuance of the refunding and new money bonds. By a Petition submitted to the City in February 2021, UPI has formally initiated the process under the Mello-Roos Act for the City to institute proceedings to form CFD 2021-1 and cause the CFD to issue bonds to finance public facilities costs related to the development of UPI’s property. The Petition includes a proposed CFD boundary map encompassing UPI’s property, a proposed list of facilities to be financed by CFD 2021-1 (the “Facilities”), and a proposed rate and method of apportionment of special taxes to be levied by CFD March 11, 2021 - Staff Report Adopt Reso 2021-05 of Intent to Establish CFD 2021-1 and Levy Special Tax Adopt Reso 2021-06 of Intent to Incur Bonded Indebtedness within CFD 2021-1 Page 3 of 4 W:\Staff Reports - Shared 2\Staff Reports 3-11-2021\4 -City Clerk - 03-11-2021\UPI Refunding\01 SR - Adopt Resolution to Approve Reso of Intent and Tax Levy for UP 3-1- 21.docx 2021-1. The next steps in that process are to consider approval of the Resolution of Intent to Establish CFD 2021-1 and Levy Special Tax and the Resolution of Intent to Incur Bonded Indebtedness within CFD 2021-1. The bonded indebtedness will be incurred for the purpose of financing the costs of the Facilities, including, but not limited to, the funding of reserve funds for the bonds, any remarketing, credit enhancement and liquidity facility fees (including such fees for instruments which serve as the basis of a reserve fund in lieu of cash), financing of the costs associated with the issuance of the bonds, and all other costs necessary to finance the Facilities which are permitted to be financed pursuant to the Act. The Facilities as identified by the Mello Roos Act may include the acquisition, purchase, construction, expansion, improvement, modification, or rehabilitation of certain public facilities necessary to meet the increased demands placed upon the public infrastructure, the City, and the Coachella Valley Water District as a result of the development of the property within the boundaries of the District, including development impact fees. Approval of the attached resolutions will meet the requirements of the Mello-Roos Act, as amended, commencing with Section 53311 of the California Government Code and start the process for formulation of the district and the issuance of bonds. Pursuant to the Mello-Roos Act, the attached resolutions will also fix the time and date of a public hearing to be held on April 22, 2021 on the proposed establishment of CFD 2021-1 and the proposed CFD 2021-1 bonds. Staff recommends approval of the Resolution of Intent to Establish CFD 2021-1 and Levy Special Tax and the Resolution of Intent to Incur Bonded Indebtedness within CFD 2021- 1 as they relate to the Formation of CFD 2021-1 and issuance of Refunding Bonds for CFD 2005-1. Fiscal Analysis The costs of formation of CFD 2021-1 and issuance of the Refunding Bonds will be included and may be paid from proceeds of the Refunding Bonds, if and when issued. If the Refunding Bonds are not issued, any non-contingent costs will be paid by the developer pursuant to the deposit and reimbursement agreement. March 11, 2021 - Staff Report Adopt Reso 2021-05 of Intent to Establish CFD 2021-1 and Levy Special Tax Adopt Reso 2021-06 of Intent to Incur Bonded Indebtedness within CFD 2021-1 Page 4 of 4 The savings generated by the refunding will benefit the current and future property owners within the University Park CFD. LEGAL REVIEW DEPT. REVIEW FINANCIAL REVIEW ASSISTANT CITY MANAGER WLS � . 7%%new �p„ yr/. ?flanm� ,Andy Firestine William L. Strausz Janet M. Moore Janet M. Moore Andy Firestine Bond Counsel Director of Finance Director of Finance Assistant City Manager Todd Hileman, City Manager: L. TOCd FfUevwavl. ATTACHMENTS: Petition to Establish a CFD Resolution No. 2021-_05_ Resolution No. 2021- 06 CITY COUNCIL�CCTION APPROVED ✓✓ DENIED RECEIVED OTHER AYES: (tam6 s NOES:. Al ABSENT: LIQ ABSTAIN: 14 VERIFIED BY: Original on File with City Clerk's Office W:1Steff Reports -Shared 21Statf Reports 3-11-2021W -City Clerk-03.11-2021WPI Refunding%01 SR -Adopt Resolution to Approve Reso of Intent and Tax Levy for UP 3-1- 21.docx CITY OF PALM DESERT Community Facilities District No. 2021-1 (University Park) PETITION To Establish a Community Facilities District Dated February 24, 2021 To the Honorable City Council CITY OF PALM DESERT 73-510 FRED WARING DRIVE PALM DESERT, CA 92260 Members of the Council: This is a petition to request the institution of proceedings to create a community facilities district under the Mello -Roos Community Facilities Act of 1982, Sections 53311 et seq. of the California Government Code (the "Act"), and it states as follows: 1. Owner. The undersigned University Park Investor, LLC, a Delaware limited liability company (the "Owner"), is the owner of record of that certain land located within City of Palm Desert (the "City") and described and set forth in Exhibit B hereto and incorporated herein (the "UPI Property"). 2. Proceedings Requested. The Owner requests that the City Council institute proceedings under the Act (a) to establish a community facilities district pursuant to the Act, to be designated "City of Palm Desert Community Facilities District No. 2021-1 (University Park)" ("CFD 2021-1"), (b) to levy special taxes in CFD 2021-1, and (c) to authorize special tax bonds for CFD 2021-1 in an aggregate principal amount not to exceed $50 million. 3. Boundaries. The Owner requests that the territory to be included in the boundaries of CFD 2021-1 consist of that shown on Exhibit A, attached hereto and incorporated herein. The UPI Property comprises at least 10% of the area of land proposed to be included within CFD 2021- 1 and not proposed to be exempt from special taxes proposed to be levied by CFD 2021-1. 4. Purpose. The Owner requests that CFD 2021-1 be established and that special taxes be levied by CFD 2021-1 to finance the acquisition, purchase, construction, expansion, improvement, modification, or rehabilitation of the public facilities (the "Facilities") shown on Exhibit C attached hereto and incorporated herein, including those facilities previously financed by special taxes levied, and bonds issued, by City of Palm Desert Community Facilities District No. 2005-1 (University Park) ("CFD 2005-1"), which CFD 2005-1 special taxes are proposed be prepaid by the District to refinance the prior facilities financed by CFD 2005-1. The Facilities shall include the incidental expenses to be incurred, including but not limited to, the cost of engineering, planning and designing the Facilities; all costs associated with the establishment of -1- P6401-1052\25003100.doc CFD 2021-1, issuance of bonds by CFD 2021-1, the determination of the amount of special taxes to be levied, the collection of such special taxes, the payment of such special taxes, and costs otherwise incurred in order to carry out the authorized purposes of CFD 2021-1; and any other expenses incidental to the construction, acquisition, modification, completion and inspection of the Facilities. 5. Special Taxes; Bonds. The Owner requests that the City Council authorize the issuance of one or more series bonds by CFD 2021-1 in an aggregate principal amount not to exceed $50 million. The Owner further requests that the City Council authorize the levy of special taxes in CFD 2021-1 to pay the costs of the Facilities (including incidental expenses) described in paragraph 4 above, to pay principal of, interest and premium, if any, on the bonds of CFD 2021-1 in order to contribute to the financing of the Facilities described in paragraph 4 above, including the maintenance of reserves therefor, and for the payment of administrative expenses of CFD 2021- 1. The Owner agrees that it has reviewed and preliminarily approves the rate and method of apportionment of special taxes attached hereto as Exhibit D and incorporated herein (the "Rate and Method"), which Rate and Method is proposed to be used by the City for the levy of special taxes in CFD 2021-1 to pay for the costs described in the foregoing sentence, subject to the completion of all proceedings by the City under the Act. 6. Election. The Owner asks that the special elections to be held under the Act to authorize the special taxes and to establish any appropriations limits for CFD 2021-1 be conducted by the City and its officials, using a mailed or hand -delivered ballot and that such ballot be canvassed and the results certified at the same meeting of the City Council as the public hearing on CFD 2021-1 under the Act or as soon thereafter as possible. 7. Waiver. To expedite the completion of the proceedings for CFD 2021-1, the Owner hereby waives all notices of hearings (other than published notices required under the Act) and all notices of election, all applicable waiting periods under the Act for the election, all ballot analysis and arguments for the election, and all requirements as to the form of the ballot. The Owner further agrees to execute such additional or supplemental agreements or documents as may be required by the City in furtherance of this Section 7 and to provide for any of the actions and conditions under this Petition. By executing this Petition, the Owner agrees to all of the foregoing. Sincerely, UNIVERSITY PARK INVESTOR, LLC, a Delaware limited liability company By: (?., r Name: / o Title: vAar.a4L,/ The address of the above Owner for receiving notices and ballots is: University Park Investor, LLC c/o Mission Valley Properties 801 San Ramon Valley Blvd., Suite F Danville, CA 94526 -2- P6401-1052\2500310vI doc EXHIBIT A BOUNDARIES [see attached] A-1 P6401-1052\2500310v3.doc UV11 UV10 UV9 UV1 UV13 UV3 UV5 UV7 UV4 UV8 UV6 UV2 UV12 UNIVERSITY PARK DR JULIE LN TECHNOLOGYDRC OLLEGE DR GERAL D F ORDDRVARNE R R D PACIFIC AVECOOK STI 1 0 PORTOLA AVEMAP OF PROPOSED BOUNDARIES OF COMMUNITY FACILITIES DISTRICT NO. 2021-1(UNIVERSITY PARK) CITY OF PALM DESERT COUNTY OF RIVERSIDE STATE OF CALIFORNIA FILED IN THE OFFICE OF THE CITY CLERK THIS ____________ DAY OF ___________, 20__. I HEREBY CERTIFY THAT THE WITHIN MAP SHOWING PROPOSED BOUNDARIES OF COMMUNITY FACILITIES DISTRICT NO. 2021-1 (UNIVERSITY PARK), CITY OF PALM DESERT, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, WAS APPROVED BY THE CITY COUNCIL OF THE CITY OF PALM DESERT AT A REGULAR MEETING THEREOF, HELD ON THE _____________, DAY OF _____________, 20__, BY ITS RESOLUTION NO. _____________________. _____________________________________ CITY CLERK CITY OF PALM DESERT FILED THIS ___________ DAY OF _____________, 20__, AT THE HOUR OF ______________ O'CLOCK ___.M. IN BOOK ______ OF MAPS OF ASSESSMENT AND COMMUNITY FACILITIES DISTRICTS AT PAGE(S) ______, IN THE OFFICE OF THE COUNTY RECORDER, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA. PETER ALDANA, ASSESSOR-COUNTY CLERK-RECORDER _____________________________________ BY DEPUTY COUNTY RECORDER COUNTY OF RIVERSIDE STATE OF CALIFORNIA THE LINES AND DIMENSIONS OF EACH LOT OR PARCEL SHOWN ON THIS DIAGRAM SHALL BE THOSE LINES AND DIMENSIONS AS SHOWN ON THE RIVERSIDE COUNTY ASSESSOR'S MAPS FOR THOSE PARCELS LISTED. THE RIVERSIDE COUNTY ASSESSOR'S MAPS SHALL GOVERN FOR ALL DETAILS CONCERNING THE LINES AND DIMENSIONS OF SUCH LOTS OR PARCELS. VICINITY MAP §¨¦10SITE Legend Proposed CFD Boundary Map Reference Number Zone 1 Zone 2 Zone 3 SHEET 1 OF 1 27368 VIA INDUSTRIA, SUITE #200 TEMECULA, CA 92590 (951) 587-3500 1 / Legend CITY OF PALM DESERT 14 MAP REFERENCE NUMBER ASSESSOR'S PARCEL NUMBER MAP REFERENCE NUMBER ASSESSOR'S PARCEL NUMBER 1 694-190-010 8 694-190-056 2 694-190-031 9 694-190-058 3 694-190-035 10 694-190-070 4 694-190-037 11 694-190-072 5 694-190-038 12 694-190-079 6 694-190-053 13 694-200-013 7 694-190-055 14 694-200-014 EXHIBIT B PROPERTY OWNED BY OWNER The land referred to herein is situated in the State of California, County of Riverside and described as follows: Parcel A: That certain portion of land situated in the City of Palm Desert, being all of Parcel 9 and Parcel 15 of Parcel Map No. 31730, filed in Book 211 pages 63-75, of Parcel Maps, Records of Riverside County, California; Together with all of that land described in a Grant Deed to the Palm Desert Redevelopment Agency recorded December 9, 2002 as Instrument No. 02.734132 of Official Records of Riverside County, California; Excepting therefrom the following described portion of land: That certain portion of land situated in the City of Palm Desert, being portions of Parcels 1, 2, 3 and 5 and all of Parcel 4 of Certificate of Compliance for Parcel Map Waiver, P.M.W. No. 99-11, recorded January 4, 2000 as Instrument No. 00.2896 of Official Records, more particularly described as follows: Commencing at the centerline intersection of Frank Sinatra Drive and Portola Avenue, being the southwest corner of Section 33, Township 4 South, Range 6 East, San Bernardino Base and Meridian; Thence North 00°05'32" West 3664.39 feet along the centerline of Portola Avenue, said line also being the West line of said Section 33, to the true point of beginning; Thence leaving said centerline and West line North 89°54'28" East 311.19 feet to the beginning of a tangent curve concave Northerly and having a radius of 1013 feet; Thence along said curve Easterly 267.13 feet through a central angle of 15°06'33"; Thence radially from said curve South 15012'05" East 95.73 feet; Thence South 32'01'27" East 138.08 feet; Thence South 37°44'05" East 373.26 feet to the beginning of a tangent curve concave northeasterly and having a radius of 536 feet; Thence along said curve Southeasterly 291.92 feet through a central angle of 31°12'18"; thence tangent from said curve South 68°56'23" East 69.74 feet to a point on a non -tangent curve concave northeasterly and having a radius of 534 feet, a radial line of said curve from said point bears North 80°00'56" East; Thence along said curve Southeasterly 451.08 feet through a central angle of 48°23'57" to a point of reverse curvature with a curve concave Southwesterly and having a radius of 866 feet, a radial line of said curve from said point bears South 31 °36'59" West; Thence along said curve Southeasterly 93.89 feet through a central angle of 06°12'44"; Thence non -tangent from said curve South 41°55'34" East 49.31 feet; Thence South 39°47'30" East 498.31 feet; P6401-1052\2500310vIdoc Thence South 46'52'11" East 259.34 feet to the beginning of a tangent curve concave Southwesterly and having a radius of 866 feet; Thence along said curve Southeasterly 224.43 feet through a central angle of 14°50'55" to a point of reverse curvature with a curve concave northeasterly and having a radius of 434 feet, a radial line of said curve from said point bears North 57°58'44" East; Thence along said curve Southeasterly 326.73 feet through a central angle of 43008'03" to a point of reverse curvature with a curve concave Southwesterly and having a radius of 50 feet, a radial line of said curve from said point bears South 14°50'41" West; Thence along said curve Southeasterly 54.34 feet through a central angle of 62'16'13" to a point of reverse curvature with a curve concave northeasterly and having a radius of 484 feet, a radial line of said curve from said point bears North 77°06'54" East; Thence along said curve Southeasterly 311.53 feet through a central angle of 36°52'42" to a point of reverse curvature with a curve concave Southwesterly and having a radius of 1266 feet, a radial line of said curve from said point bears South 40'14'12" West; Thence along said curve Southeasterly 166.75 feet through a central angle of 07°32'48"; Thence tangent from said curve South 42°13'00" East 186.14 feet to the beginning of a tangent curve concave Southwesterly and having a radius of 1066 feet; Thence along said curve Southeasterly 131.96 feet through a central angle of 07°55'33"; Thence non -tangent from said curve South 25'01'56" East 74.98 feet; Thence South 31 °06'49" East 61.06 feet to the beginning of a tangent curve concave northeasterly and having a radius of 154 feet; Thence along said curve Southeasterly 74.69 feet through a central angle of 27°47'21 Thence tangent from said curve South 58'54'10" East 106.28 feet; Thence South 53'16'24" East 182.10 feet to a point on a non -tangent curve concave Southeasterly and having a radius of 600 feet, a radial line of said curve from said point bears South 53°16'24" East, said point also being on the centerline of College Drive as shown on aforementioned Parcel Map 31730; Thence along said centerline of College Drive through the following courses: Southerly along last said curve, 386.33 feet through a central angle of 36°53'30"; Thence tangent from said curve, South 00°09'54" East 296.89 feet to a point on a line being parallel with and 50 feet Northerly from the centerline of said Frank Sinatra Drive; Thence leaving said centerline of College Drive, along said parallel line South 89°50'06" West 3132.42 feet; Thence leaving said parallel line, North 45°08'22' West 32.55 feet to a point on the Easterly right(s) of way line of Portola Avenue, said line being parallel with and 50 feet Easterly from the centerline of said Portola Avenue; Thence along said parallel line North 00°05'32" West 2591.58 feet to the East-West quarter section line of said Section 33; Thence leaving said parallel line South 89°51'l2" West 50 feet along said quarter section line to the West quarter corner of said Section 33, said point also being on the centerline of said Portola Avenue; Thence along said West line of Section 33 and said centerline of Portola Avenue, North 00°05'32" West 999.77 feet to the point of beginning. Said property is also shown and set forth as Exhibit A, in that certain Certificate of Compliance No. 05-01, recorded August 24, 2005 as Instrument No. 05.696754 of Official Records; 1' j P6401-1052\2500310vldoc Excepting therefrom said property granted to the City of Palm Desert for park site recorded October 8, 2008 as Instrument No. 08.544124 of Official Records. APN: 694-190-053, 694-200-013 and 694-200-014 Parcel B: Parcel 1 together with those portions of Parcels 2 and 3 of Parcel Map No. 31730, in the City of Palm Desert, County of Riverside, State of California, as shown by map on file in Book 211 pages 63-75, of Parcel Maps, Records of Riverside County, California, described as follows: Beginning at a point which bears South 89°56'07" West 847.65 feet from the Easterly terminus of that certain course in the Northerly line of said Parcel 2 shown as "N 89°56'07" E 1196.32"; Thence leaving said Northerly line South 00°03'53" East 145.76 feet; Thence South 12°30'25" West 46.11 feet; Thence South 00°05'31" East 358.31 feet; Thence North 72°39'29" East 42.12 feet; Thence North 82°39'19" East 75.76 feet; Thence South 00°03'53" East 138.11 feet to the Northerly line of the land described in the Grant Deed recorded December 29, 2006 as Instrument No. 06.951880 of Official Records of Riverside County, California; Thence Westerly, Southwesterly, Southerly, Southeasterly and Easterly along the Northerly, Northwesterly, Westerly, Southwesterly and Southerly line of the land described in said Grant Deed the following five courses: North 90°00'00" West 12.00 feet to the beginning of curve concave to the Southeast having a radius of 96.50 feet; Thence Westerly, Southwesterly and Southerly angle of 90°00'00"; Thence South 00°00'00" West 18.00 feet to the having a radius of 96.50 feet; Thence Southerly, Southeasterly and Easterly 151 of 90°00'00" 151.58 feet along said curve, through a central beginning of a curve concave to the Northeast 58 feet along said curve through a central angle Thence North 90°00'00" East 73.85 feet; Thence leaving said Northerly, Northwesterly, Westerly, Southwesterly and Southerly line of Grant Deed South 00°05'32" East 375.93 feet to the beginning of a curve concave to the Northeast having a radius of 166.00 feet; Thence Southeasterly 55.55 feet along said curve through a central angle of 19°10'25"; Thence non -tangent to said curve South 67°46'51" East 50.41 feet; Thence South 20°59'12" East 10.00 feet to a point on the Southerly line of said Parcel 3, said point being the beginning of a non -tangent curve concave to the Southeast having a radius of 1335.00 feet and to which point a radial line bears North 20°59'12" West; Thence along said Southerly line and the Westerly line of said Parcel 3 and the Westerly and Northerly line of said Parcel 3 and the Westerly and Northerly line of said Parcel 1 and the Northerly line of said Parcel 2 the following courses: Southwesterly 207.73 feet along said curve through a central angle of 08°54'55" to the beginning of a reverse curve concave to the Northwest and having a radius of 975.00 feet, a radial line through said beginning of reverse curve bears North 29°54'07" West; P6401-1052\2500310vldoc Thence Southwesterly 507.27 feet along said curve through a central angle of 29°48'35"; Thence South 89°54'28" West 67.94 feet to the beginning of a curve concave to the North having a radius of 325.00 feet; Thence Westerly 43.27 feet along said curve through a central angle of 07°37'41" to the beginning of a reverse curve concave to the South having a radius of 353.00 feet a radial line through said beginning of reverse curve bears South 07°32'09" West; Thence Westerly 47.00 feet along said curve through a central angle of 07°37'41 Thence South 89°54'28" West 80.25 feet; Thence North 4741'41" West 31.14 feet; Thence North 00°05'32" West 1272.32 feet; Thence North 89°56'07" East 25.00 feet; Thence North 00°05'32" West 237.02 feet; Thence North 44°55'l8" East 24.05 feet; Thence North 89°56'07" East 665.30 feet to the point of beginning; Excepting therefrom the land described in the Grant Deed recorded December 5, 2008 as Instrument No. 08.640595 of Official Records of Riverside County, California. APN: 694-190-079 Said legal is pursuant to that certain Certificate of Compliance Waiver of Parcel Map PMW 10- 167 recorded September 3, 2010 as Instrument No. 10.425283 of Official Records. Parcel C: Those portions of Parcels 2 and 3 of Parcel Map No. 31730, in the City of Palm Desert, County of Riverside, State of California, as shown by map on file in Book 211 pages 63-75, of Parcel Maps, Records of Riverside County, California, described as follows: Beginning at a point which bears South 89°56'07" West 847.65 feet from the Easterly terminus of that certain course in the Northerly line of said Parcel 2 shown as "N 89°56'07" E 1196.32"; Thence along the Northerly and Easterly line of said Parcel 2 and the Northerly and Easterly line of said Parcel 3 the following five courses: North 89°56'07" East 847.65 feet; Thence South 45°03153" East 24.04 feet; Thence South 00°03'53" East 535.08 feet; Thence North 89°56'07" East 16.00 feet; Thence South 00°03'53" East 206.06 feet; Thence leaving said Easterly line of Parcel 3 South 89°56'07" West 421.04 feet to a point on the Easterly line of the land described in the Grant Deed recorded December 29, 2006 as Instrument No. 06.951880 of Official Records of Riverside County, California, said point being the beginning of a non -tangent curve concave to the Southwest having a radius of 96.50 feet to which point a radial line bears North 87°43'36" East; Thence along said Easterly line and the northeasterly and Northerly line of the land described in said Grant Deed the following two courses: Northerly, Northwesterly and Westerly 147.75 feet along said curve through a central angle of 87°43'35"; P6401-1052\2500310vIdoc Thence South 90°00'00" West 257.78 feet; Thence leaving said Easterly, northeasterly and Northerly line North 00°03'53" West 13 8. 11 feet; Thence South 82°39'19" West 75.76 feet; Thence South 72°39'29" West 42.12 feet; Thence North 00°05'31" West 358.31 feet; Thence North 12°30'25" East 46.11 feet; Thence North 00°03'53" West 145.76 feet to the point of beginning. APN: 694-190-072 Said legal is pursuant to that certain Certificate of Compliance Waiver of Parcel Map PMW 10- 167 recorded September 3, 2010 as Instrument No. 10.425283 of Official Records. Parcel D: That portion of Parcel 3 of Parcel Map No. 31730, in the City of Palm Desert, County of Riverside, State of California, as shown by map on file in Book 211 pages 63-75, of Parcel Maps, Records of Riverside County, California, described as follows: Beginning at a point which bears South 00°03'53" East 206.06 feet from the Northerly terminus of that certain course in the Easterly line of said Parcel 3 shown as "N 00°03'53" W 217.72"; Thence along said Easterly line and the Southeasterly and Southerly line of said Parcel 3 the following four courses: South 00°03'53" East 11.66 feet to the beginning of a curve concave to the West having a radius of 3089.00 feet; Thence Southerly 442.94 feet along said curve through a central angle of 08°12'57" to the beginning of a compound curve concave to the Northwest having a radius of 46.00 feet; Thence Southerly, Southwesterly and Westerly 68.99 feet along said curve to the beginning of a reverse curve concave to the Southeast having a radius of 1335.00 feet, a radial line through said beginning of reverse curve bears South 04°05'08" West; Thence Westerly 584.19 feet along said curve through a central angle of 25°04'20" to a radial line of said curve which bears North 20°59'12" West; Thence leaving said Easterly, Southeasterly and Southerly line and on the prolongation of said radial 10.00 feet; Thence North 67°46'51" West 50.41 feet to the beginning of a non -tangent curve concave to the Northeast having a radius of 166.00 feet and to which beginning a radial line bears South 70°44'03" West; Thence Northerly 5 5.5 5 feet along said curve through a central angle of 1990'25"; Thence North 00°05'32 West 375.93 feet to the Southerly line of the land described in the Grant Deed recorded December 29, 2006 as Instrument No. 06.951880 of Official Records of Riverside County, California; Thence along said Southerly line and the Southeasterly and Easterly line of the land described in said Grant Deed the following four courses: North 90°00'00" East 195.87 feet to the beginning of a curve concave to the Northwest having a radius of 96.50 feet; Thence Easterly, northeasterly and Northerly 151.23 feet along said curve through a central angle of 89°47'27"; P6401-1052\2500310vldoc Thence North 00°12'33" East 18.00 feet to the beginning of a curve concave to the West having a radius of 96.50 feet; Thence Northerly 4.18 feet along said curve through a central angle of 02°28'57"; Thence leaving said Southerly, Southeasterly and Easterly line and along a non -tangent line North 89°56'07" East 421.04 feet to the point of beginning. Said legal is pursuant to that certain Certificate of Compliance Waiver of Parcel Map PMW 10- 167 recorded September 3, 2010 as Instrument No. 10.425283 of Official Records. APN: 694-190-070 Parcel E: Parcels 4, 5 and 6, of Parcel Map No. 31730, as shown by Map on file in Book 211 pages 63-75, of Parcel Maps, Records of Riverside County, California. Excepting therefrom said property deeded to the City of Palm Desert recorded December 29, 2006 as Instrument No. 06.951883 of Official Records for a park dedication. Excepting therefrom said property deeded to the Coachella Valley Water District recorded December 5, 2008 as Instrument No. 08.640594 of Official Records for well site. APN: 694-190-010, 694-190-37 and 694-190-055 Parcel F: That certain parcel of land situated in the City of Palm Desert, County of Riverside, State of California, being a portion of Parcel 7, as shown on Parcel Map No. 31730 filed in Book 211, Pages 63 through 75, of Parcel Maps, records of Riverside County, California, more particularly described as follows: Beginning at a point on a non -tangent curve concave Northeasterly and having a radius of 1075 feet, said point being on the Southerly right(s) of way line of Gerald Ford Drive, said point also being the Northeasterly corner of said Parcel 7; Thence along said Southerly right(s) of way line along said curve Southerly 390.59 feet through a central angle of 20 Degrees 49' 04"; Thence non -tangent from said curve South 50 Degrees 53' 34" West 181.44 feet; Thence South 50 Degrees 06' 39" West 364.36 feet to a point on the Northerly right(s) of way line of College Drive as shown on said Parcel Map No. 31730; Thence along the Southwesterly line of said Parcel 7; along said Northerly right(s) of way line of College Drive, North 39 Degrees 53' 21" West 63.45 feet to the beginning of a tangent curve concave Southwesterly and having a radius of 1035 feet; Thence along said curve Northwesterly 360.82 feet through a central angle of 19 Degrees 58' 28"; Thence leaving said Northerly right(s) of way line along the Northeasterly prolongation of the radial line from said curve North 30 Degrees 08' 11" East 213.25 feet to the beginning of a tangent curve concave Southeasterly and having a radius of 500 feet; :. P6401-1052\25003100.doc Thence along said curve Northeasterly 480.87 feet through a central angle of 55 Degrees 06' 13"; Thence tangent from said curve North 85 Degrees 14' 25" East 136.40 feet to the point of beginning. Said legal is pursuant to that certain Certificate of Compliance Waiver of Parcel Map PMW 10- 167 recorded September 3, 2010 as Instrument No. 10.425283 of Official Records. APN: 694-190-031 APN: 694-190-010, 694-190-053, 694-190-055, 694-190-037, 694-190-070, 694-190-072, 694- 190-079, 694-190-031, 694-200-013, and 694-200-014 (End of Legal Description) P6401-1052\2500310vl doc EXHIBIT C DESCRIPTION OF FACILITIES The public facilities (the "Facilities") described below are proposed to be financed by City of Palm Desert Community Facilities District No. 2021-1 (University Park) (the "District') and include storm drainage facilities, street improvements, landscaping and irrigation facilities, public open space and recreational facilities, water facilities, and sewer improvements, together with all appurtenances and appurtenant work, such as related clearing and grubbing, grading, and any removal or temporary signage or markings related thereto. The cost of the Facilities shall include incidental expenses, including costs associated with forming the District, issuance of bonds, determination of the amount of the Special Tax, collection of the Special Tax, payment of the Special Tax, costs incurred in order to carry out the authorized purposes of the District, and the costs of engineering, inspecting, coordinating, completing, planning and designing the Facilities, including the costs of environmental evaluations. Any of the Facilities to be constructed shall be constructed, whether or not acquired in their completed states, pursuant to plans and specifications approved by the City of Palm Desert (or the Coachella Valley Water District, as applicable) and the officials thereof, including the City Engineer. In addition, inasmuch as the District is proposed to prepay special taxes levied by City of Palm Desert Community Facilities District No. 2005-1 (University Park) ("CFD 2005- 1"), the Facilities include such special tax prepayment and those facilities previously financed by CFD 2005-1 and proposed to be refinanced by such special tax prepayment (including, but not limited to, street improvements, water improvements, traffic signals, sewer improvements, storm drain improvements, utilities improvements, park improvement and park site land acquisition, and landscaping). The Facilities are necessary to meet the increased demands placed upon the public infrastructure, the City of Palm Desert, and the Coachella Valley Water District as a result of the development of the property within the boundaries of the District, including development impact fees therefor (including, but not limited to, City of Palm Desert development impact fees for traffic signals, drainage, parks, Art in Public Places, and fire facilities, and Coachella Valley Water District development impact fees for water and sewer facilities). The final nature and location of the Facilities will be determined upon the preparation of final plans and specifications for such Facilities. C-1 P6401-1052\25003 I 00.doc EXHIBIT D RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES [see attached] D-1 P6401-1052\2500310v3.doc 1 RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX For the City of Palm Desert Community Facilities District No. 2021-1 (University Park), County of Riverside, State of California A Special Tax shall be levied on all Taxable Property within the boundaries of the City of Palm Desert Community Facilities District No. 2021-1 (University Park) (“CFD No. 2021-1”) and collected each Fiscal Year commencing in Fiscal Year 2021-22, in an amount determined by the CFD Administrator through the application of the procedures described below. All of the real property within CFD No. 2021-1, unless exempted by law or by the provisions hereof, shall be taxed for the purposes, to the extent, and in the manner herein provided. A. DEFINITIONS The terms hereinafter set forth have the following meanings: “Acre” or “Acreage” means the land area of an Assessor’s Parcel as shown on an Assessor’s Parcel Map, or if the land area is not shown on an Assessor’s Parcel Map, the land area shown on the applicable Final Map. An Acre means 43,560 square feet of land. “Act” means the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5 of Part 1 of Division 2 of Title 5 of the Government Code of the State of California. “Administrative Expenses” means the actual or reasonably estimated costs related to the administration of CFD No. 2021-1 including, but not limited to: the costs of preparing and computing the Special Tax (whether by the City or designee thereof or both); the costs of collecting the Special Taxes (whether by the City, the County or otherwise); the costs of remitting the Special Taxes to the Trustee; the costs of the Trustee (including its legal counsel) in the discharge of the duties required of it under the Indenture; the costs to the City, CFD No. 2021-1, or any designee thereof complying with arbitrage rebate requirements, including without limitation rebate liability costs and periodic rebate calculations; the costs to the City, CFD No. 2021-1, or any designee thereof complying with disclosure or reporting requirements of the City or CFD No. 2021-1, associated with applicable federal and State laws; the costs associated with preparing Special Tax disclosure statements and responding to public inquiries regarding the Special Taxes; the costs to the City, CFD No. 2021-1, or any designee thereof related to an appeal of the Special Tax; and the City’s annual administration fees and third party expenses. Administrative Expenses shall also include amounts estimated or advanced by the City or CFD No. 2021-1 for any other administrative purposes of CFD No. 2021-1, including but not limited to attorney’s fees and other costs related to commencing and pursuing any foreclosure of delinquent Special Taxes. “Annual Special Tax” means the Special Tax actually levied in any Fiscal Year on any Assessor’s Parcel. “Apartment Property” means an Assessor’s Parcel of Developed Property on which all or any portion of a structure or structures with multiple Apartment Units are located, and such Apartment Units are offered for rent and are not available for sale to individual owners. If Apartment Property is subsequently reclassified as Single Family Property, Special Taxes levied on such reclassified Assessor’s Parcels shall be 2 modified to match those of Single Family Property, provided that the Building Square Footage of such Single Family Property can be determined by the CFD Administrator. Otherwise, the property will continue to be classified as Apartment Property. “Apartment Unit” means one (1) for-rent residential unit on Apartment Property. “Approved Property” means all Assessor’s Parcels of Taxable Property: (i) that are included in a Final Map that was recorded prior to the January 1st preceding the Fiscal Year in which the Special Tax is being levied, and (ii) that have not been issued a Building Permit on or prior to the May 1st preceding the Fiscal Year in which the Special Tax is being levied. “Assessor” means the Assessor of the County of Riverside. “Assessor’s Parcel” means a lot or parcel shown on an Assessor’s Parcel Map with an assigned Assessor’s Parcel Number. “Assessor’s Parcel Map” means an official map of the Assessor designating parcels by Assessor’s Parcel Number. “Assessor’s Parcel Number” means the number assigned to an Assessor’s Parcel by the County for purposes of identification. “Assigned Special Tax” means the Special Tax of that name described in Section C.1 below. “Backup Special Tax” means the Special Tax of that name described in Section C.2 below. “Bonds” means any bonds or other Debt of CFD No. 2021-1, whether in one or more series, secured by the levy of Special Taxes. “Building Permit” means a building permit for construction of a Residential Unit within CFD No. 2021-1 issued by the City. “Building Square Footage” means all of the square footage of usable area within the perimeter of a residential structure or dwelling unit, as applicable, not including any carport, walkway, garage, overhang, or similar area. The determination of Building Square Footage shall be made by reference to the Building Permit(s) issued for such Assessor’s Parcel and/or by reference to appropriate records kept by the City. “Calendar Year” means the period commencing January 1st of any year and ending the following December 31. “CFD Administrator” means an authorized representative of the City, or designee thereof, responsible for determining the Special Tax Requirement, for preparing the Special Tax roll and/or calculating the Backup Special Tax. “CFD No. 2021-1” means the City of Palm Desert Community Facilities District No. 2021-1 (University Park). “City” means the City of Palm Desert, California. “Council” means the City Council of the City acting as the legislative body of CFD No. 2021-1 under the Act. 3 “County” means the County of Riverside, California. “Debt” means any binding obligation to pay or repay a sum of money, including obligations in the form of bonds, certificates of participation, long-term leases, loans from government agencies, or loans from banks, other financial institutions, private businesses, or individuals, or long-term contracts. “Debt Service” means for each Fiscal Year, the total amount of principal and interest payable on any Outstanding Bonds during the Calendar Year commencing on January 1st of such Fiscal Year. “Developed Property” means for each Fiscal Year, all Taxable Property, exclusive of Provisional Property, for which a Building Permit was issued prior to May 1st of the previous Fiscal Year. An Assessor’s Parcel classified as Developed Property but for which the Building Permit that caused such Assessor’s Parcel to be classified as Developed Property has been cancelled and/or voided prior to the Fiscal Year for which Special Taxes are being levied shall be reclassified as Approved Property, provided that and only if the levy of the Special Tax less Administrative Expenses after such reclassification shall not be less than 1.1 times the annual Debt Service on all Outstanding Bonds. If Bonds have not been issued, an Assessor’s Parcel classified as Developed Property for which such a Building Permit has been cancelled and/or voided shall be reclassified as Approved Property. “Exempt Property” means for each Fiscal Year, all Assessor’s Parcels designated as being exempt from Special Taxes pursuant to Section H below. “Final Map” means a subdivision of property by recordation of a final map, parcel map, or lot line adjustment, pursuant to the Subdivision Map Act (California Government Code Section 66410 et seq.) or recordation of a condominium plan pursuant to California Civil Code 4285 that creates individual Lots for which Building Permits may be issued without further subdivision. “Fiscal Year” means the period starting on July 1 and ending the following June 30. “Indenture” means the indenture, fiscal agent agreement, resolution or other instrument pursuant to which Bonds are issued, as modified, amended and/or supplemented from time to time, and any instrument replacing or supplementing the same. “Land Use Class” means any of the classes listed in Table 1 and Table 2 under Section C.1 below. “Lot” means a parcel created by a Final Map capable of conveyance or rental, separate from adjacent parcels or dwelling units and/or on which one or more Residential Units can be constructed. “Lower Income Households Welfare Exemption Property” means, for each Fiscal Year, an Assessor’s Parcel that is entitled to a welfare exemption under subdivision (g) of Section 214 of the California Revenue and Taxation Code (or any successor statute), as indicated in the County Assessor’s roll finalized as of January 1 of the previous Fiscal Year; provided that such property is not exempt from the Special Tax if debt is outstanding and the property was subject to the Special Tax prior to receiving the exemption, in which case the property shall remain subject to the Special Tax and the Special Tax shall be enforceable against the property. “Maximum Special Tax” means for each Assessor’s Parcel, the maximum Special Tax, determined in accordance with Sections C.3 and C.4 below, which may be levied in a given Fiscal Year on such Assessor’s Parcel of Taxable Property. 4 “Non-Residential Property” means all Assessor’s Parcels of Developed Property for which a building permit has been issued for the purpose of constructing one or more non-residential units or facilities. “Outstanding Bonds” means all Bonds, which are deemed to be outstanding under the Indenture. “Prepayment Amount” means the amount required to prepay the Special Tax Obligation in full for an Assessor’s Parcel as described in Section F.1 below or in part for an Assessor’s Parcel as described in Section F.2 below. “Property Owner Association Property” means any Assessor’s Parcel within the boundaries of CFD No. 2021-1 owned in fee by a property owner association, including any master or sub- association. “Proportionately” or “Proportionate” means for Developed Property, that the ratio of the actual Special Tax levy to the applicable Assigned Special Tax or Backup Special Tax is equal for all Assessor’s Parcels of Developed Property. For Approved Property or Undeveloped Property, “Proportionately” means that the ratio of the actual Special Tax levy per Acre to the Maximum Special Tax per Acre is equal for all Assessor’s Parcels of Approved Property or Undeveloped Property. “Proportionately” may similarly be applied to other categories of Taxable Property as listed in Section D below. “Provisional Property” means all Assessor’s Parcels of Public Property, Property Owner Association Property, Non-Residential Property or property that would otherwise be classified as Exempt Property pursuant to the provisions of Section H, but cannot be classified as Exempt Property because to do so would reduce the Acreage of all Taxable Property below the required minimum Acreage as set forth in Section H. “Public Property” means any property within the boundaries of CFD No. 2021-1, which is owned by, or irrevocably offered for dedication to the federal government, the State of California, the County, the City or any other public agency; provided however that (i) any property owned by a public agency and leased to a private entity and subject to taxation under Section 53340.1 of the Act and (ii) any property subject to taxation pursuant to Section 53317.3 of the Act shall be taxed and classified in accordance with its use. “Residential Property” means all Assessor’s Parcels of Developed Property for which a Building Permit has been issued for the purpose of constructing one or more Residential Units. “Residential Unit” means each separate residential dwelling unit that comprises an independent facility capable of conveyance or rental, separate from adjacent residential dwelling units. “Single Family Property” means all Assessor’s Parcels of Residential Property not classified as Apartment Property. “Special Tax” means any special tax levied within CFD No. 2021-1 pursuant to the Act and this Rate and Method of Apportionment of Special Tax. “Special Tax Obligation” means the total obligation of an Assessor’s Parcel of Taxable Property to pay the Special Tax for the remaining life of CFD No. 2021-1. “Special Tax Requirement” means that amount required in any Fiscal Year to: (i) pay regularly scheduled Debt Service on all Outstanding Bonds; (ii) pay periodic costs on the Outstanding Bonds, including but not limited to, credit enhancement and rebate payments on the Outstanding Bonds; (iii) pay Administrative Expenses; (iv) pay any amounts required to establish or replenish any reserve funds for all Outstanding 5 Bonds; (v) accumulate funds to pay directly for acquisition or construction of facilities, provided that the inclusion of such amount does not cause an increase in the Special Tax to be levied on Approved Property, Undeveloped Property, or Provisional Property, until the date that all Bonds have been issued; and (vi) pay for reasonably anticipated delinquent Special Taxes based on the delinquency rate for Special Taxes levied in the previous Fiscal Year; less (vii) a credit for funds available to reduce the Special Tax levy, as determined by the CFD Administrator pursuant to the Indenture. “State” means the State of California. “Taxable Property” means all of the Assessor’s Parcels within the boundaries of CFD No. 2021-1, which are not exempt from the levy of the Special Tax pursuant to law or Section H below. “Trustee” means the trustee or fiscal agent under the Indenture. “Undeveloped Property” means, for each Fiscal Year, all Taxable Property not classified as Developed Property, Approved Property or Provisional Property. “Zone 1” means the area within CFD No. 2021-1 depicted as such in Exhibit A hereto. “Zone 2” means the area within CFD No. 2021-1 depicted as such in Exhibit A hereto. “Zone 3” means the area within CFD No. 2021-1 depicted as such in Exhibit A hereto. B. LAND USE CLASSIFICATION Each Fiscal Year, beginning with Fiscal Year 2021-22, each Assessor’s Parcel within CFD No. 2021-1 shall be classified as Taxable Property or Exempt Property. In addition, all Taxable Property shall further be classified as Developed Property, Approved Property, Undeveloped Property or Provisional Property, and all such Taxable Property shall be subject to the levy of Special Taxes in accordance with this Rate and Method of Apportionment of Special Tax determined pursuant to Section C below. Furthermore, each Assessor’s Parcel of Developed Property shall be classified as Single Family Property, Apartment Property, or Non-Residential Property. Finally, each Assessor’s Parcel of Single Family Property shall be classified according to its applicable Land Use Class based on its Building Square Footage. C. SPECIAL TAX RATES 1. Assigned Special Tax for Developed Property The Assigned Special Tax applicable to an Assessor’s Parcel classified as Developed Property commencing in Fiscal Year 2021-22 shall be determined pursuant to Tables 1 and 2 below. 6 Table 1 Zone 1 Assigned Special Tax Rates Land Use Class Land Use Type Building Square Footage Assigned Special Tax 1 Single Family Property ≥ 2,500 $2,300 per Residential Unit 2 Single Family Property 2,400 – 2,499 $2,225 per Residential Unit 3 Single Family Property 2,300 – 2,399 $2,175 per Residential Unit 4 Single Family Property 2,200 – 2,299 $2,100 per Residential Unit 5 Single Family Property 2,100 – 2,199 $2,025 per Residential Unit 6 Single Family Property 2,000 – 2,099 $1,925 per Residential Unit 7 Single Family Property 1,900 – 1,999 $1,600 per Residential Unit 8 Single Family Property 1,800 – 1,899 $1,550 per Residential Unit 9 Single Family Property < 1,800 $1,275 per Residential Unit 10 Non-Residential Property NA NA 7 Table 2 Zone 2 Assigned Special Tax Rates Land Use Class Land Use Type Building Square Footage Assigned Special Tax 1 Single Family Property ≥ 3,400 $3,025 per Residential Unit 2 Single Family Property 3,200 – 3,399 $2,975 per Residential Unit 3 Single Family Property 3,000 – 3,199 $2,875 per Residential Unit 4 Single Family Property 2,800 – 2,999 $2,800 per Residential Unit 5 Single Family Property 2,600 – 2,799 $2,675 per Residential Unit 6 Single Family Property 2,400 – 2,599 $2,625 per Residential Unit 7 Single Family Property 2,200 – 2,399 $2,600 per Residential Unit 8 Single Family Property 2,000 – 2,199 $2,575 per Residential Unit 9 Single Family Property < 2,000 $2,475 per Residential Unit 10 Non-Residential Property NA NA 8 Table 3 Zone 3 Assigned Special Tax Rates Land Use Class Land Use Type Building Square Footage Assigned Special Tax 1 Single Family Property ≥ 2,500 $2,300 per Residential Unit 2 Single Family Property 2,400 – 2,499 $2,225 per Residential Unit 3 Single Family Property 2,300 – 2,399 $2,175 per Residential Unit 4 Single Family Property 2,200 – 2,299 $2,100 per Residential Unit 5 Single Family Property 2,100 – 2,199 $2,025 per Residential Unit 6 Single Family Property 2,000 – 2,099 $1,925 per Residential Unit 7 Single Family Property 1,900 – 1,999 $1,600 per Residential Unit 8 Single Family Property 1,800 – 1,899 $1,550 per Residential Unit 9 Single Family Property < 1,800 $1,275 per Residential Unit 10 Apartment Property NA $750 per Residential Unit 11 Non-Residential Property NA NA 9 On each July 1, commencing July 1, 2022, the Assigned Special Tax for Developed Property shall be increased by two percent (2%) of the amount in effect in the prior Fiscal Year. 2. Backup Special Tax for Developed Property The Backup Special Tax for Developed Property commencing in Fiscal Year 2021-22 shall be $15,419 per Acre for Zone 1, $19,322 per Acre for Zone 2 and $22,662 per Acre for Zone 3. Each July 1, commencing July 1, 2022, the Backup Special Tax for Developed Property shall be increased by two percent (2%) of the amount in effect in the prior Fiscal Year. For the purpose of calculating the Backup Special Tax, the land area applicable to Apartment Property shall be computed from the Acreage of the Lot on which the Apartment Property is located, with the Acreage for such Lot allocated equally among all of the Apartment Property located or to be located on such Lot. 3. Maximum Special Tax for Developed Property The Maximum Special Tax for Developed Property shall be the greater of the Assigned Special Tax for Developed Property or the Backup Special Tax for Developed Property. 4. Maximum Special Tax for Provisional Property, Approved Property and Undeveloped Property The Maximum Special Tax for Provisional Property, Approved Property, and Undeveloped Property commencing in Fiscal Year 2021-22 shall be $15,419 per Acre for Zone 1, $19,322 per Acre for Zone 2 and $22,662 per Acre for Zone 3. Each July 1, commencing July 1, 2022, the Maximum Special Tax for Provisional Property, Approved Property and Undeveloped Property shall be increased by two percent (2%) of the amount in effect in the prior Fiscal Year. D. METHOD OF APPORTIONMENT For each Fiscal Year, commencing Fiscal Year 2021-22, the CFD Administrator shall levy the Special Tax on all Taxable Property in accordance with the following steps: Step 1: The Special Tax shall be levied Proportionately on each Assessor’s Parcel of Developed Property at up to 100% of the applicable Assigned Special Tax as needed to satisfy the Special Tax Requirement. Step 2: If additional monies are needed to satisfy the Special Tax Requirement after Step 1 has been completed, the Special Tax shall be levied Proportionately on each Assessor’s Parcel of Approved Property in an amount up to 100% of the Maximum Special Tax for Approved Property. 10 Step 3: If additional monies are needed to satisfy the Special Tax Requirement after Step 2 has been completed, the Special Tax shall be levied Proportionately on each Assessor’s Parcel of Undeveloped Property in an amount up to 100% of the Maximum Special Tax for Undeveloped Property. Step 4: If additional monies are needed to satisfy the Special Tax Requirement after the first three steps have been completed, then the Special Tax amount determined in Step 1 shall be increased Proportionately on each Assessor’s Parcel of Developed Property in an amount up to 100% of the Maximum Special Tax for Developed Property. Step 5: If additional monies are needed to satisfy the Special Tax Requirement after the first four steps have been completed, then the Special Tax shall be levied Proportionately on each Assessor’s Parcel of Provisional Property in an amount up to 100% of the Maximum Special Tax for Provisional Property. Notwithstanding the above, under no circumstances will the Special Tax levied in any Fiscal Year against any Assessor’s Parcel of Residential Property for which an occupancy permit for private residential use has been issued be increased as a result of a delinquency or default in the payment of the Special Tax applicable to any other Assessor’s Parcel within CFD No. 2021-1 by more than ten percent (10%) above what would have been levied in the absence of such delinquencies or defaults. E. COLLECTION OF SPECIAL TAXES Collection of the Special Tax shall be made by the County in the same manner as ordinary ad valorem property taxes are collected and the Special Tax shall be subject to the same penalties and the same lien priority in the case of delinquency as ad valorem taxes; provided, however, that the Council may provide for (i) other means of collecting the Special Tax, including direct billings thereof to the property owners; and (ii) judicial foreclosure of delinquent Special Taxes. F. PREPAYMENT OF SPECIAL TAX OBLIGATION 1. Prepayment in Full Property owners may prepay and permanently satisfy the Special Tax Obligation by a cash settlement with the City as permitted under Government Code Section 53344. The following definitions apply to this Section F: “CFD Public Facilities Costs” means $30,000,000 or such lower number as (i) shall be determined by the CFD Administrator as sufficient to acquire or construct the facilities to be financed under the Act and financing program for CFD No. 2021-1, or (ii) shall be determined by the Council concurrently with a covenant that it will not issue any more Bonds (except refunding bonds). “Construction Fund” means the fund (regardless of its name) established pursuant to the Indenture to hold funds, which are currently available for expenditure to acquire or construct the facilities or pay fees authorized to be funded by CFD No. 2021-1. “Future Facilities Costs” means the CFD Public Facilities Costs minus (i) costs previously paid from the Construction Fund to acquire or construct the facilities, (ii) monies currently on deposit in the Construction 11 Fund, and (iii) monies currently on deposit in an escrow or other designated fund that are expected to be available to finance CFD Public Facilities Costs. “Outstanding Bonds” means all Previously Issued Bonds, which remain outstanding as of the first interest and/or principal payment date following the current Fiscal Year excluding Bonds to be redeemed at a later date with proceeds of prior Special Tax prepayments. “Previously Issued Bonds” means all Bonds that have been issued prior to the date of prepayment. The Special Tax Obligation applicable to an Assessor’s Parcel of Developed Property, Approved Property, Undeveloped Property, or Provisional Property that has been included in a Final Map may be prepaid and the obligation to pay the Special Tax for such Assessor’s Parcel permanently satisfied as described herein, provided that a prepayment may be made with respect to a particular Assessor’s Parcel only 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 eligible to prepay the Special Tax Obligation shall provide the CFD Administrator with written notice of intent to prepay and designate or identify the company or agency that will be acting as the escrow agent, if any. The CFD Administrator shall provide the owner with a statement of the Prepayment Amount for such Assessor’s Parcel within thirty (30) days of the request and may charge a reasonable fee for providing this service. Prepayment must be made at least 60 days prior to any redemption date for the CFD No. 2021-1 Bonds to be redeemed with the proceeds of such prepaid Special Taxes, unless a shorter period is acceptable to the Trustee and the City. The Prepayment Amount shall be calculated for each applicable Assessor’s Parcel or group of Assessor’s Parcels as follows (capitalized terms are defined below): Bond Redemption Amount plus Redemption Premium plus Future Facilities Costs plus Defeasance Amount plus Administrative Fees and Expenses less Reserve Fund Credit less Capitalized Interest Credit Equals: Prepayment Amount The Prepayment Amount shall be determined as of the proposed prepayment date as follows: 1. Confirm that no Special Tax delinquencies apply to such Parcel. 2. For an Assessor’s Parcel of Developed Property, compute the Maximum Special Tax for the Assessor’s Parcel as though all Assessor’s Parcels of Taxable Property within CFD No. 2021-1 have been built out. For an Assessor’s Parcel of Approved Property or Undeveloped Property for which a Building Permit has been issued, compute the Maximum Special Tax for the Parcel as though it was already designated as Developed Property, based upon the Building Permit which has been issued for the Assessor’s Parcel. For an Assessor’s Parcel of Approved Property or Undeveloped Property for which a Building Permit has not been issued or Provisional Property to be prepaid, compute the Maximum Special Tax for the Assessor’s Parcel. 3. Divide the Maximum Special Tax derived pursuant to paragraph 2 by the estimated total amount 12 of Special Taxes that could be levied at build out of all Assessor’s Parcels of Taxable Property based on the applicable Maximum Special Tax for all such Assessor’s Parcels of Taxable Property not including any Parcels for which the Special Tax obligation has been previously prepaid. 4. Multiply the quotient derived pursuant to paragraph 3 by the principal amount of the Outstanding Bonds to determine the amount of Outstanding Bonds to be redeemed with the Prepayment Amount (the “Bond Redemption Amount”). 5. Multiply the Bond Redemption Amount by the applicable redemption premium, if any, on the Outstanding Bonds to be redeemed (the “Redemption Premium”). 6. Determine the Future Facilities Costs. 7. Multiply the quotient derived pursuant to paragraph 3 by the amount determined pursuant to paragraph 6 to determine the portion of the Future Facilities Costs applicable to the Assessor’s Parcel (the “Future Facilities Amount”). 8. Determine the amount needed to pay interest on the Bond Redemption Amount from the first bond interest and/or principal payment date following the current Fiscal Year until the earliest redemption date for the Outstanding Bonds on which Bonds can be redeemed from Special Tax prepayments. 9. Determine the Special Taxes levied on the Assessor’s Parcel in the current Fiscal Year which have not yet been paid. 10. Determine the amount the CFD Administrator reasonably expects to derive from the investment of the Bond Redemption Amount and the Redemption Premium from the date of prepayment until the redemption date for the Outstanding Bonds to be redeemed with the Prepayment Amount. 11. Add the amounts derived pursuant to paragraphs 8 and 9 and subtract the amount derived pursuant to paragraph 10 (the “Defeasance Amount”). 12. Verify the administrative fees and expenses associated with the prepayment, including the cost to invest the Prepayment Amount, the cost of redeeming the Outstanding Bonds, and the cost of recording notices to evidence the prepayment of the Special Tax obligation for the Assessor’s Parcel and the redemption of Outstanding Bonds (the “Administrative Fees and Expenses”). 13. The reserve fund credit (the “Reserve Fund Credit”) shall equal the lesser of: (a) the expected reduction in the reserve requirement (as defined in the Indenture), if any, associated with the redemption of Outstanding Bonds as a result of the prepayment, or (b) the amount derived by subtracting the new reserve requirement (as defined in the Indenture) in effect after the redemption of Outstanding Bonds as a result of the prepayment from the balance in the reserve fund on the prepayment date, but in no event shall such amount be less than zero. 14. If any capitalized interest for the Outstanding Bonds will not have been expended at the time of the first interest and/or principal payment following the current Fiscal Year, a capitalized interest credit shall be calculated by multiplying the quotient computed pursuant to paragraph 3 by the 13 expected balance in the capitalized interest fund after such first interest and/or principal payment (the “Capitalized Interest Credit”). 15. The amount to prepay the Special Tax Obligation is equal to the sum of the Bond Redemption Amount, the Redemption Premium, the Future Facilities Amount, the Defeasance Amount and the Administrative Fees and Expenses, less the Reserve Fund Credit and the Capitalized Interest Credit. 16. From the Prepayment Amount, the Bond Redemption Amount, the Redemption Premium, and Defeasance Amount shall be deposited into the appropriate fund as established under the Indenture and be used to redeem Outstanding Bonds or make Debt Service payments. The Future Facilities Amount shall be deposited into the Construction Fund. The Administrative Fees and Expenses shall be retained by the CFD. The Prepayment Amount may be sufficient to redeem an amount other than a $5,000 increment of CFD No. 2021-1 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 redeem CFD No. 2021-1 Bonds to be used with the next prepayment of CFD No. 2021-1 Bonds. The CFD Administrator will confirm that all previously levied Special Taxes have been paid in full. With respect to any Assessor’s Parcel for which the Special Tax Obligation is prepaid in full, once the CFD Administrator has confirmed that all previously levied Special Taxes have been paid, the Council shall cause a suitable notice to be recorded in compliance with the Act, to indicate the prepayment of the Special Tax and the release of the Special Tax lien on such Assessor’s Parcel, and the obligation of the owner of such Assessor’s Parcel to pay the Special Tax shall cease. Notwithstanding the foregoing, no Special Tax prepayment shall be allowed unless the aggregate amount of Maximum Special Taxes less Administrative Expenses that may be levied on Taxable Property, respectively, after the proposed prepayment is at least 1.1 times the Debt Service on all Outstanding Bonds in each Fiscal Year. 2. Partial Prepayment The Special Tax on an Assessor’s Parcel of Developed Property, Approved Property, Undeveloped Property, or Provisional Property that has been included in a Final Map may be partially prepaid. The amount of the prepayment shall be calculated as in Section F.1; except that a partial prepayment shall be calculated according to the following formula: PP = (PE-A) x F+A These terms have the following meaning: PP = the partial prepayment PE = the Prepayment Amount calculated according to Section F.1 F = the percentage by which the owner of the Assessor’s Parcel(s) is partially prepaying the Special Tax Obligation A = the Prepayment Administrative Fees and Expenses from Section F.1 14 The owner of any Assessor’s Parcel who desires such partial prepayment shall notify the CFD Administrator of (i) such owner’s intent to partially prepay the Special Tax Obligation, (ii) the percentage by which the Special Tax Obligation shall be prepaid, and (iii) the company or agency that will be acting as the escrow agent, if any. The CFD Administrator shall provide the owner with a statement of the amount required for the partial prepayment of the Special Tax Obligation for an Assessor’s Parcel within sixty (60) days of the request and may charge a reasonable fee for providing this service. With respect to any Assessor’s Parcel that is partially prepaid, the City shall (i) distribute the funds remitted to it according to Section F.1., and (ii) indicate in the records of CFD No. 2021-1 that there has been a partial prepayment of the Special Tax Obligation and that a portion of the Special Tax with respect to such Assessor’s Parcel, equal to the outstanding percentage (1.00 - F) of the Maximum Special Tax, shall continue to be levied on such Assessor’s Parcel. Notwithstanding the foregoing, no partial prepayment shall be allowed unless the aggregate amount of Maximum Special Taxes less Administrative Expenses that may be levied on Taxable Property, respectively, after the proposed partial prepayment is at least 1.1 times the Debt Service on all Outstanding Bonds in each Fiscal Year. G. TERM OF SPECIAL TAX The Special Tax shall be levied as long as necessary to meet the Special Tax Requirement for a period not to exceed forty-five (45) Fiscal Years commencing with Fiscal Year 2021-22, provided however that the Special Tax will cease to be levied in an earlier Fiscal Year if the CFD Administrator has determined that all required interest and principal payments on CFD No. 2021-1 Bonds have been paid. H. EXEMPTIONS The CFD Administrator shall classify as Exempt Property (i) Assessor’s Parcels of Public Property, (ii) Assessor’s Parcels of Property Owner Association Property, (iii) Assessor’s Parcels which are used as places of worship and are exempt from ad valorem property taxes because they are owned by a religious organization, (iv) Assessor’s Parcels with public or utility easements making impractical their utilization for other than the purposes set forth in the easement, (v) Lower Income Households Welfare Exemption Property, and (vi) Assessor’s Parcels classified as Non-Residential Property as determined reasonably by the CFD Administrator, provided that no such classification would reduce the sum of all Taxable Property in CFD No. 2021-1 to less than 44.86 Acres in Zone 1, 48.84 Acres in Zone 2 or 11.12 Acres in Zone 3. Assessor’s Parcels which cannot be classified as Exempt Property because such classification would reduce the sum of all Taxable Property in CFD No. 2021-1 to less than 44.86 Acres in Zone 1, 48.84 Acres in Zone 2 or 11.12 Acres in Zone 3 shall be classified as Provisional Property and will continue to be subject to the CFD No. 2021-1 Special Taxes accordingly. Tax exempt status for the purpose of this paragraph will be assigned by the CFD Administrator in the chronological order in which property becomes eligible for classification as Exempt Property, except for Non-Residential Property, which will be assigned tax exempt status only after all other eligible property types have been classified as Exempt Property. If the use of an Assessor’s Parcel of Exempt Property changes so that such Assessor’s Parcel is no longer classified as one of the uses set forth in the first paragraph of Section H above that would make such 15 Assessor’s Parcel eligible to be classified as Exempt Property, such Assessor’s Parcel shall cease to be classified as Exempt Property and shall be deemed to be Taxable Property. I. APPEALS AND INTERPRETATIONS Any property owner claiming that the amounts or application of the Special Taxes is not correct may file a written notice of appeal with the CFD Administrator not later than twelve months after having paid the first installment of the Special Taxes that are disputed. The CFD Administrator shall promptly review the appeal, and if necessary, meet with the property owner, consider written and oral evidence regarding the amount of the Special Taxes, and rule on the appeal. If the decision of the CFD Administrator requires that the Special Taxes for an Assessor’s Parcel be modified or changed in favor of the property owner, a cash refund shall not be made but an adjustment shall be made to the Special Taxes on that Assessor’s Parcel in the subsequent Fiscal Year(s) to compensate for the overpayment of the Special Taxes. Any landowner who pays the Special Tax and claims the amount of the Special Tax levied on his or her Assessor’s Parcel is in error shall first consult with the CFD Administrator regarding such error not later than thirty-six (36) months after first having paid the first installment of the Special Tax that is disputed. If following such consultation, the CFD Administrator determines that an error has occurred, then the CFD Administrator shall take any of the following actions, in order of priority, in order to correct the error: i. Amend the Special Tax levy on the landowner’s Assessor’s Parcel(s) for the current Fiscal Year prior to the payment date, ii. Require the CFD to reimburse the landowner for the amount of the overpayment to the extent of available CFD funds, or iii. Grant a credit against, eliminate or reduce the future Special Taxes on the landowner’s Assessor’s Parcel(s) in the amount of the overpayment. If following such consultation and action by the CFD Administrator the landowner believes such error still exists, such person may file a written notice of appeal with the Council. Upon the receipt of such notice, the Council or designee may establish such procedures as deemed necessary to undertake the review of any such appeal. If the Council or designee determines an error still exists, the CFD Administrator shall take any of the actions described as (i), (ii) and (iii) above, in order of priority, in order to correct the error. The Council or designee thereof shall interpret this Rate and Method of Apportionment of Special Tax for purposes of clarifying any ambiguities and make determinations relative to the administration of the Special Tax and any landowner appeals. The decision of the Council or designee shall be final. A-1 Exhibit A Zone Descriptions A-2 -1- W:\Staff Reports - Shared 2\Staff Reports 3-11-2021\4 -City Clerk - 03-11-2021\UPI Refunding\03 Reso of Intention to Establish CFD (Palm Desert Univ. Park CFD 2021-1) 3.11.21 Final.docx RESOLUTION NO. 2021-05 A RESOLUTION OF INTENTION OF THE CITY COUNCIL OF THE CITY OF PALM DESERT TO ESTABLISH CITY OF PALM DESERT COMMUNITY FACILITIES DISTRICT NO. 2021-1 (UNIVERSITY PARK) AND TO AUTHORIZE THE LEVY OF A SPECIAL TAX WITHIN CITY OF PALM DESERT COMMUNITY FACILITIES DISTRICT NO. 2021-1 (UNIVERSITY PARK) RECITALS: WHEREAS, the City Council of the City of Palm Desert (the “City Council”) has received a petition (the “Petition”) signed by the owner of certain of the land which is proposed for inclusion in a proposed community facilities district which meets the requirements of Sections 53318 and 53319 of the Mello-Roos Community Facilities Act of 1982, as amended, commencing with Section 53311 of the California Government Code (the “Act”); and WHEREAS, the Act authorizes the City Council to establish a community facilities district and to levy special taxes within that district; and WHEREAS, in accordance with the request set forth in the Petition, the City Council desires to undertake proceedings to establish a community facilities district pursuant to the Act, to finance the acquisition, purchase, construction, expansion, improvement, modification, or rehabilitation of certain public facilities necessary to meet the increased demands placed upon the public infrastructure, the City, and the Coachella Valley Water District as a result of the development of the property within the boundaries of the District, including development impact fees therefor, and to prepay the special taxes of an existing community facilities district (the “CFD No. 2005-1 Special Tax”) and refinance the facilities previously financed thereby, all as hereinafter described; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF PALM DESERT DOES HEREBY RESOLVE, FIND, DECLARE AND ORDER AS FOLLOWS: Section 1. Intention. In accordance with the request set forth in the Petition, the City Council hereby declares its intention to conduct proceedings for the formation of a community facilities district under the terms of the Act. Section 2. Name of District. The name of the proposed community facilities district is “City of Palm Desert Community Facilities District No. 2021-1 (University Park)” (the “District”). Section 3. Boundaries of District. The exterior boundaries of the District and the zones therein are shown on the map now on file in the office of the City Clerk entitled “Map of Proposed Boundaries, Community Facilities District No. 2021-1 (University Park)” (the “Map”). The Map indicates, by a boundary line, the extent of the territory included in the proposed District and the extent of the territory in each zone and shall govern for all details as to the extent of the District and the zones. On the original RESOLUTION NO. 2021-05 -2- W:\Staff Reports - Shared 2\Staff Reports 3-11-2021\4 -City Clerk - 03-11-2021\UPI Refunding\03 Reso of Intention to Establish CFD (Palm Desert Univ. Park CFD 2021-1) 3.11.21 Final.docx and one copy of the Map, the City Clerk shall endorse the certificate evidencing the date and adoption of this Resolution. The City Clerk shall file the original of the Map in her office and, within fifteen (15) days after the adoption of this Resolution, the City Clerk shall file a copy of the Map so endorsed in the records of the County Recorder, County of Riverside, State of California, and in any event the Map shall be filed no later than fifteen (15) days before the public hearing specified in Section 7 below. Section 4. Facilities. The types of public facilities proposed to be financed, or refinanced, under the Act shall consist of those facilities set forth on Exhibit “A”, attached hereto and incorporated herein by reference. The Facilities have a useful life of five years or longer and are public facilities as defined by the Act, which the City and the Coachella Valley Water District are authorized by law to construct, acquire, own, operate, or contribute revenue to. The City Council intends to execute a joint community facilities agreement with the Coachella Valley Water District. The City Council hereby finds and determines that the description of the Facilities herein is sufficiently informative to allow taxpayers within the proposed District to understand what the funds of the District may be used to finance. The City Council hereby finds that the proposed Facilities, including development impact fees therefor, are necessary to meet increased demands placed upon the public infrastructure, the City, and the Coachella Valley Water District as a result of development occurring in the proposed District. Section 5. Special Tax. (a) Except where funds are otherwise available, it is the intention of the City Council to levy annually in accordance with procedures contained in the Act a special tax (the “Special Tax”) within the District sufficient to pay for (1) the Facilities (including without limitation the prepayment of the CFD 2005-1 Special Tax to refinance those facilities previously financed by CFD 2005-1), and (2) the principal and interest and other periodic costs on bonds or other indebtedness issued by the District to finance the Facilities, including without limitation, the establishment and replenishment of any reserve funds deemed necessary by the District, any remarketing, credit enhancement and liquidity facility fees (including such fees for instruments which serve as the basis of a reserve fund in lieu of cash), financing of the costs associated with the issuance of the bonds, and all other costs necessary to finance the Facilities which are permitted to be financed pursuant to the Act. The Special Tax will be secured by recordation of a continuing lien against all non-exempt real property in the District and will be collected in the same manner as ordinary ad valorem property taxes are collected, or in such other manner as may be provided by the City Council including, without limitation, direct billing of the affected property owner, and shall be subject to the same penalties, procedure, sale and lien priority in case of delinquency as applicable for ad valorem property taxes. In the first year in which the Special Tax is levied, the levy shall include a sum sufficient to repay to the City all amounts, if any, transferred to the District pursuant to Section 53314 of the Act and interest thereon. (b) The proposed rate and method of apportionment of the Special Tax among parcels of real property in the District (the “Rate and Method”), in sufficient detail to allow each resident or landowner within the proposed District to estimate the maximum RESOLUTION NO. 2021-05 -3- W:\Staff Reports - Shared 2\Staff Reports 3-11-2021\4 -City Clerk - 03-11-2021\UPI Refunding\03 Reso of Intention to Establish CFD (Palm Desert Univ. Park CFD 2021-1) 3.11.21 Final.docx amount such resident or owner will have to pay, is shown in Exhibit “B,” attached hereto and incorporated herein by reference. The City Council hereby determines the Rate and Method set forth in Exhibit “B” to be reasonable. The obligation to pay the Special Tax may be prepaid as set forth in Exhibit “B.” (c) In the case of any Special Tax to pay for the Facilities 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 (2%) 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 used for private residential purposes be increased as a consequence of delinquency or default by the owner of any other parcel within the District by more than ten percent (10%). 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. Section 6. Bonds. It is the intent of the City Council, acting as the legislative body of the District, to cause one or more series of bonds to be issued under the Act by the District to finance, in whole or in part, the Facilities. If so issued, bonds will be in the aggregate principal amount of not to exceed $50 million. All such bonds issued by the District shall bear interest payable semi-annually or in such other manner as the City Council shall determine at a maximum interest rate not in excess of twelve percent (12%) per annum or such rate not in excess of the maximum rate permitted by law at the time the bonds are issued, and the term of the bonds of each series shall not exceed forty (40) years from the date of issuance of such series thereof or such longer term as is then permitted by law. Section 7. Hearing. A public hearing on the establishment of the District, the extent of the District, the furnishing of Facilities to meet increased demands on infrastructure as a result of development in the District, and the proposed Rate and Method (the “Hearing”) shall be held on April 22, 2021, at 4:00 p.m., or as soon thereafter as practicable, at the chambers of the City Council of the City of Palm Desert, 73-510 Fred Waring Drive, Palm Desert, California 92260. At the Hearing, any interested person or taxpayer, including all persons owning lands or registered to vote within the proposed District, may appear and be heard. Section 8. Report. Each City officer who is or will be responsible for the Facilities to be financed by the District, if it is established, is hereby directed to study the proposed District and, at or before the time of the above-mentioned Hearing, file, or cause to be filed, a report with the City Council, which is to be made a part of the record of the Hearing, containing the following: (a) a brief description of the Facilities which will, in the City officer’s opinion, be required to adequately meet the needs of the District; and RESOLUTION NO. 2021-05 -4- W:\Staff Reports - Shared 2\Staff Reports 3-11-2021\4 -City Clerk - 03-11-2021\UPI Refunding\03 Reso of Intention to Establish CFD (Palm Desert Univ. Park CFD 2021-1) 3.11.21 Final.docx (b) an estimate of the fair and reasonable cost of financing the Facilities. Section 9. In accordance with Section 53314.9 of the Act, the City and/or District may accept advances of funds or work in-kind from any source, including, but not limited to, private persons or private entities, and is authorized and directed to use such funds or that work in-kind for any authorized purpose, including, but not limited to, paying any cost incurred by the City in creating the District. The City and/or District may enter into an agreement with the person or entity advancing the funds or work-in-kind, to repay all or a portion of the funds advanced, or to reimburse the person or entity for the value, or cost, whichever is less, of the work-in-kind, as determined by the City Council, with or without interest. Without limiting the foregoing, the District is hereby authorized to reimburse University Park Investor, LLC, for moneys advanced pursuant to the terms of that certain Deposit and Reimbursement Agreement dated as of January 14, 2021 and previously entered into by and between University Park Investor, LLC, and the City, a copy of which agreement is on file in the office of the City Clerk. Section 10. Published Notice. The City Clerk is hereby directed to publish a notice of the Hearing (“Notice”) pursuant to Section 6061 of the California Government Code in a newspaper of general circulation published in the area of the proposed District. Such Notice shall be substantially in the form specified in Section 53222 of the Act. Publication of the Notice shall be completed at least seven (7) days prior to the date of the Hearing. Section 11. Mailed Notice. The City Clerk is hereby directed to send a copy of the Notice of the Hearing by first-class mail, postage prepaid, to each registered voter and to each landowner within the proposed District as shown on the last equalized assessment roll. Mailing of the Notice shall be completed at least fifteen (15) days prior to the date of the Hearing. Section 12. Voting. Should the City Council determine to form the District, a special election will be held within the District to authorize the issuance of bonds and the levy of the Special Tax in accordance with the procedures contained in Section 53326 of the Act. If held, the proposed voting procedure at the election will be a landowner vote with each landowner who is the owner of record of land within the District at the close of the Hearing, or the authorized representative thereof, having one vote for each acre or portion thereof owned within the District. Ballots for the special election may be distributed by mail with return postage prepaid or by personal service. Section 13. Tender of Bonds. Except to the extent limited in any bond resolution or trust indenture related to the issuance of bonds, the City Council hereby reserves to itself all rights and powers set forth in Section 53344.1 of the Act (relating to tenders of bonds in full or partial payment of any installment of the Special Tax or the interest or penalties thereon which may be due or delinquent). Section 14. Exemptions from Special Tax. Except as may otherwise be provided in Exhibit “B” hereto or by law, all lands owned by any public entity, including the United States, the State of California and/or the City, or any departments or political RESOLUTION NO. 2021-05 -5- W:\Staff Reports - Shared 2\Staff Reports 3-11-2021\4 -City Clerk - 03-11-2021\UPI Refunding\03 Reso of Intention to Establish CFD (Palm Desert Univ. Park CFD 2021-1) 3.11.21 Final.docx subdivisions thereof, shall be omitted from the levy of the Special Tax to be made to cover the costs and expenses of the Facilities. In addition, reference is hereby made to Exhibit “B” hereto for a description of other lands which shall be omitted from the levy of the Special Tax. Section 15. Election to Perform Work. Pursuant to 53329.5(c) of the Act, the City Council finds that, in its opinion, the public interest will not be served by allowing property owners in the District to enter into a contract pursuant to Section 53329.5(a). This Section is not intended to prevent the City from entering into an agreement with any property owner pursuant to which it agrees to acquire the Facilities or any portion thereof, from that property owner. Section 16. Effective Date. This Resolution shall take effect immediately upon adoption. PASSED, APPROVED and ADOPTED by the City Council of the City of Palm Desert, California, on this 11th day of March, 2021, by the following vote, to wit: AYES: NOES: ABSENT: ABSTAIN: ________________________________ KATHLEEN KELLY, MAYOR ATTEST: __________________________________ GRACE L. ROCHA, ACTING CITY CLERK CITY OF PALM DESERT, CALIFORNIA A-1 W:\Staff Reports - Shared 2\Staff Reports 3-11-2021\4 -City Clerk - 03-11-2021\UPI Refunding\03 Reso of Intention to Establish CFD (Palm Desert Univ. Park CFD 2021-1) 3.11.21 Final.docx EXHIBIT "A" DESCRIPTION OF FACILITIES The public facilities (the “Facilities”) described below are proposed to be financed by City of Palm Desert Community Facilities District No. 2021-1 (University Park) (the “District’) and include storm drainage facilities, street improvements, landscaping and irrigation facilities, public open space and recreational facilities, water facilities, and sewer improvements, together with all appurtenances and appurtenant work, such as related clearing and grubbing, grading, and any removal or temporary signage or markings related thereto. The cost of the Facilities shall include incidental expenses, including costs associated with forming the District, issuance of bonds, determination of the amount of the Special Tax, collection of the Special Tax, payment of the Special Tax, costs incurred in order to carry out the authorized purposes of the District, and the costs of engineering, inspecting, coordinating, completing, planning and designing the Facilities, including the costs of environmental evaluations. Any of the Facilities to be constructed shall be constructed, whether or not acquired in their completed states, pursuant to plans and specifications approved by the City of Palm Desert (or the Coachella Valley Water District, as applicable) and the officials thereof, including the City Engineer. In addition, inasmuch as the District is proposed to prepay special taxes levied by City of Palm Desert Community Facilities District No. 2005- 1 (University Park) (“CFD 2005-1”), the Facilities include such special tax prepayment and those facilities previously financed by CFD 2005-1 and proposed to be refinanced by such special tax prepayment (including, but not limited to, street improvements, water improvements, traffic signals, sewer improvements, storm drain improvements, utilities improvements, park improvement and park site land acquisition, and landscaping). The Facilities are necessary to meet the increased demands placed upon the public infrastructure, the City of Palm Desert, and the Coachella Valley Water District as a result of the development of the property within the boundaries of the District, including development impact fees therefor (including, but not limited to, City of Palm Desert development impact fees for traffic signals, drainage, parks, Art in Public Places, and fire facilities, and Coachella Valley Water District development impact fees for water and sewer facilities). The final nature and location of the Facilities will be determined upon the preparation of final plans and specifications for such Facilities. B-1 W:\Staff Reports - Shared 2\Staff Reports 3-11-2021\4 -City Clerk - 03-11-2021\UPI Refunding\03 Reso of Intention to Establish CFD (Palm Desert Univ. Park CFD 2021-1) 3.11.21 Final.docx EXHIBIT "B" RATE AND METHOD OF APPORTIONMENT FOR CITY OF PALM DESERT COMMUNITY FACILITIES DISTRICT NO. 2005-1 (UNIVERSITY PARK) [see attached] 1 RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX For the City of Palm Desert Community Facilities District No. 2021-1 (University Park), County of Riverside, State of California A Special Tax shall be levied on all Taxable Property within the boundaries of the City of Palm Desert Community Facilities District No. 2021-1 (University Park) (“CFD No. 2021-1”) and collected each Fiscal Year commencing in Fiscal Year 2021-22, in an amount determined by the CFD Administrator through the application of the procedures described below. All of the real property within CFD No. 2021-1, unless exempted by law or by the provisions hereof, shall be taxed for the purposes, to the extent, and in the manner herein provided. A. DEFINITIONS The terms hereinafter set forth have the following meanings: “Acre” or “Acreage” means the land area of an Assessor’s Parcel as shown on an Assessor’s Parcel Map, or if the land area is not shown on an Assessor’s Parcel Map, the land area shown on the applicable Final Map. An Acre means 43,560 square feet of land. “Act” means the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5 of Part 1 of Division 2 of Title 5 of the Government Code of the State of California. “Administrative Expenses” means the actual or reasonably estimated costs related to the administration of CFD No. 2021-1 including, but not limited to: the costs of preparing and computing the Special Tax (whether by the City or designee thereof or both); the costs of collecting the Special Taxes (whether by the City, the County or otherwise); the costs of remitting the Special Taxes to the Trustee; the costs of the Trustee (including its legal counsel) in the discharge of the duties required of it under the Indenture; the costs to the City, CFD No. 2021-1, or any designee thereof complying with arbitrage rebate requirements, including without limitation rebate liability costs and periodic rebate calculations; the costs to the City, CFD No. 2021-1, or any designee thereof complying with disclosure or reporting requirements of the City or CFD No. 2021-1, associated with applicable federal and State laws; the costs associated with preparing Special Tax disclosure statements and responding to public inquiries regarding the Special Taxes; the costs to the City, CFD No. 2021-1, or any designee thereof related to an appeal of the Special Tax; and the City’s annual administration fees and third party expenses. Administrative Expenses shall also include amounts estimated or advanced by the City or CFD No. 2021-1 for any other administrative purposes of CFD No. 2021-1, including but not limited to attorney’s fees and other costs related to commencing and pursuing any foreclosure of delinquent Special Taxes. “Annual Special Tax” means the Special Tax actually levied in any Fiscal Year on any Assessor’s Parcel. “Apartment Property” means an Assessor’s Parcel of Developed Property on which all or any portion of a structure or structures with multiple Apartment Units are located, and such Apartment Units are offered for rent and are not available for sale to individual owners. If Apartment Property is subsequently reclassified as Single Family Property, Special Taxes levied on such reclassified Assessor’s Parcels shall be 2 modified to match those of Single Family Property, provided that the Building Square Footage of such Single Family Property can be determined by the CFD Administrator. Otherwise, the property will continue to be classified as Apartment Property. “Apartment Unit” means one (1) for-rent residential unit on Apartment Property. “Approved Property” means all Assessor’s Parcels of Taxable Property: (i) that are included in a Final Map that was recorded prior to the January 1st preceding the Fiscal Year in which the Special Tax is being levied, and (ii) that have not been issued a Building Permit on or prior to the May 1st preceding the Fiscal Year in which the Special Tax is being levied. “Assessor” means the Assessor of the County of Riverside. “Assessor’s Parcel” means a lot or parcel shown on an Assessor’s Parcel Map with an assigned Assessor’s Parcel Number. “Assessor’s Parcel Map” means an official map of the Assessor designating parcels by Assessor’s Parcel Number. “Assessor’s Parcel Number” means the number assigned to an Assessor’s Parcel by the County for purposes of identification. “Assigned Special Tax” means the Special Tax of that name described in Section C.1 below. “Backup Special Tax” means the Special Tax of that name described in Section C.2 below. “Bonds” means any bonds or other Debt of CFD No. 2021-1, whether in one or more series, secured by the levy of Special Taxes. “Building Permit” means a building permit for construction of a Residential Unit within CFD No. 2021-1 issued by the City. “Building Square Footage” means all of the square footage of usable area within the perimeter of a residential structure or dwelling unit, as applicable, not including any carport, walkway, garage, overhang, or similar area. The determination of Building Square Footage shall be made by reference to the Building Permit(s) issued for such Assessor’s Parcel and/or by reference to appropriate records kept by the City. “Calendar Year” means the period commencing January 1st of any year and ending the following December 31. “CFD Administrator” means an authorized representative of the City, or designee thereof, responsible for determining the Special Tax Requirement, for preparing the Special Tax roll and/or calculating the Backup Special Tax. “CFD No. 2021-1” means the City of Palm Desert Community Facilities District No. 2021-1 (University Park). “City” means the City of Palm Desert, California. “Council” means the City Council of the City acting as the legislative body of CFD No. 2021-1 under the Act. 3 “County” means the County of Riverside, California. “Debt” means any binding obligation to pay or repay a sum of money, including obligations in the form of bonds, certificates of participation, long-term leases, loans from government agencies, or loans from banks, other financial institutions, private businesses, or individuals, or long-term contracts. “Debt Service” means for each Fiscal Year, the total amount of principal and interest payable on any Outstanding Bonds during the Calendar Year commencing on January 1st of such Fiscal Year. “Developed Property” means for each Fiscal Year, all Taxable Property, exclusive of Provisional Property, for which a Building Permit was issued prior to May 1st of the previous Fiscal Year. An Assessor’s Parcel classified as Developed Property but for which the Building Permit that caused such Assessor’s Parcel to be classified as Developed Property has been cancelled and/or voided prior to the Fiscal Year for which Special Taxes are being levied shall be reclassified as Approved Property, provided that and only if the levy of the Special Tax less Administrative Expenses after such reclassification shall not be less than 1.1 times the annual Debt Service on all Outstanding Bonds. If Bonds have not been issued, an Assessor’s Parcel classified as Developed Property for which such a Building Permit has been cancelled and/or voided shall be reclassified as Approved Property. “Exempt Property” means for each Fiscal Year, all Assessor’s Parcels designated as being exempt from Special Taxes pursuant to Section H below. “Final Map” means a subdivision of property by recordation of a final map, parcel map, or lot line adjustment, pursuant to the Subdivision Map Act (California Government Code Section 66410 et seq.) or recordation of a condominium plan pursuant to California Civil Code 4285 that creates individual Lots for which Building Permits may be issued without further subdivision. “Fiscal Year” means the period starting on July 1 and ending the following June 30. “Indenture” means the indenture, fiscal agent agreement, resolution or other instrument pursuant to which Bonds are issued, as modified, amended and/or supplemented from time to time, and any instrument replacing or supplementing the same. “Land Use Class” means any of the classes listed in Table 1 and Table 2 under Section C.1 below. “Lot” means a parcel created by a Final Map capable of conveyance or rental, separate from adjacent parcels or dwelling units and/or on which one or more Residential Units can be constructed. “Lower Income Households Welfare Exemption Property” means, for each Fiscal Year, an Assessor’s Parcel that is entitled to a welfare exemption under subdivision (g) of Section 214 of the California Revenue and Taxation Code (or any successor statute), as indicated in the County Assessor’s roll finalized as of January 1 of the previous Fiscal Year; provided that such property is not exempt from the Special Tax if debt is outstanding and the property was subject to the Special Tax prior to receiving the exemption, in which case the property shall remain subject to the Special Tax and the Special Tax shall be enforceable against the property. “Maximum Special Tax” means for each Assessor’s Parcel, the maximum Special Tax, determined in accordance with Sections C.3 and C.4 below, which may be levied in a given Fiscal Year on such Assessor’s Parcel of Taxable Property. 4 “Non-Residential Property” means all Assessor’s Parcels of Developed Property for which a building permit has been issued for the purpose of constructing one or more non-residential units or facilities. “Outstanding Bonds” means all Bonds, which are deemed to be outstanding under the Indenture. “Prepayment Amount” means the amount required to prepay the Special Tax Obligation in full for an Assessor’s Parcel as described in Section F.1 below or in part for an Assessor’s Parcel as described in Section F.2 below. “Property Owner Association Property” means any Assessor’s Parcel within the boundaries of CFD No. 2021-1 owned in fee by a property owner association, including any master or sub- association. “Proportionately” or “Proportionate” means for Developed Property, that the ratio of the actual Special Tax levy to the applicable Assigned Special Tax or Backup Special Tax is equal for all Assessor’s Parcels of Developed Property. For Approved Property or Undeveloped Property, “Proportionately” means that the ratio of the actual Special Tax levy per Acre to the Maximum Special Tax per Acre is equal for all Assessor’s Parcels of Approved Property or Undeveloped Property. “Proportionately” may similarly be applied to other categories of Taxable Property as listed in Section D below. “Provisional Property” means all Assessor’s Parcels of Public Property, Property Owner Association Property, Non-Residential Property or property that would otherwise be classified as Exempt Property pursuant to the provisions of Section H, but cannot be classified as Exempt Property because to do so would reduce the Acreage of all Taxable Property below the required minimum Acreage as set forth in Section H. “Public Property” means any property within the boundaries of CFD No. 2021-1, which is owned by, or irrevocably offered for dedication to the federal government, the State of California, the County, the City or any other public agency; provided however that (i) any property owned by a public agency and leased to a private entity and subject to taxation under Section 53340.1 of the Act and (ii) any property subject to taxation pursuant to Section 53317.3 of the Act shall be taxed and classified in accordance with its use. “Residential Property” means all Assessor’s Parcels of Developed Property for which a Building Permit has been issued for the purpose of constructing one or more Residential Units. “Residential Unit” means each separate residential dwelling unit that comprises an independent facility capable of conveyance or rental, separate from adjacent residential dwelling units. “Single Family Property” means all Assessor’s Parcels of Residential Property not classified as Apartment Property. “Special Tax” means any special tax levied within CFD No. 2021-1 pursuant to the Act and this Rate and Method of Apportionment of Special Tax. “Special Tax Obligation” means the total obligation of an Assessor’s Parcel of Taxable Property to pay the Special Tax for the remaining life of CFD No. 2021-1. “Special Tax Requirement” means that amount required in any Fiscal Year to: (i) pay regularly scheduled Debt Service on all Outstanding Bonds; (ii) pay periodic costs on the Outstanding Bonds, including but not limited to, credit enhancement and rebate payments on the Outstanding Bonds; (iii) pay Administrative Expenses; (iv) pay any amounts required to establish or replenish any reserve funds for all Outstanding 5 Bonds; (v) accumulate funds to pay directly for acquisition or construction of facilities, provided that the inclusion of such amount does not cause an increase in the Special Tax to be levied on Approved Property, Undeveloped Property, or Provisional Property, until the date that all Bonds have been issued; and (vi) pay for reasonably anticipated delinquent Special Taxes based on the delinquency rate for Special Taxes levied in the previous Fiscal Year; less (vii) a credit for funds available to reduce the Special Tax levy, as determined by the CFD Administrator pursuant to the Indenture. “State” means the State of California. “Taxable Property” means all of the Assessor’s Parcels within the boundaries of CFD No. 2021-1, which are not exempt from the levy of the Special Tax pursuant to law or Section H below. “Trustee” means the trustee or fiscal agent under the Indenture. “Undeveloped Property” means, for each Fiscal Year, all Taxable Property not classified as Developed Property, Approved Property or Provisional Property. “Zone 1” means the area within CFD No. 2021-1 depicted as such in Exhibit A hereto. “Zone 2” means the area within CFD No. 2021-1 depicted as such in Exhibit A hereto. “Zone 3” means the area within CFD No. 2021-1 depicted as such in Exhibit A hereto. B. LAND USE CLASSIFICATION Each Fiscal Year, beginning with Fiscal Year 2021-22, each Assessor’s Parcel within CFD No. 2021-1 shall be classified as Taxable Property or Exempt Property. In addition, all Taxable Property shall further be classified as Developed Property, Approved Property, Undeveloped Property or Provisional Property, and all such Taxable Property shall be subject to the levy of Special Taxes in accordance with this Rate and Method of Apportionment of Special Tax determined pursuant to Section C below. Furthermore, each Assessor’s Parcel of Developed Property shall be classified as Single Family Property, Apartment Property, or Non-Residential Property. Finally, each Assessor’s Parcel of Single Family Property shall be classified according to its applicable Land Use Class based on its Building Square Footage. C. SPECIAL TAX RATES 1. Assigned Special Tax for Developed Property The Assigned Special Tax applicable to an Assessor’s Parcel classified as Developed Property commencing in Fiscal Year 2021-22 shall be determined pursuant to Tables 1 and 2 below. 6 Table 1 Zone 1 Assigned Special Tax Rates Land Use Class Land Use Type Building Square Footage Assigned Special Tax 1 Single Family Property ≥ 2,500 $2,300 per Residential Unit 2 Single Family Property 2,400 – 2,499 $2,225 per Residential Unit 3 Single Family Property 2,300 – 2,399 $2,175 per Residential Unit 4 Single Family Property 2,200 – 2,299 $2,100 per Residential Unit 5 Single Family Property 2,100 – 2,199 $2,025 per Residential Unit 6 Single Family Property 2,000 – 2,099 $1,925 per Residential Unit 7 Single Family Property 1,900 – 1,999 $1,600 per Residential Unit 8 Single Family Property 1,800 – 1,899 $1,550 per Residential Unit 9 Single Family Property < 1,800 $1,275 per Residential Unit 10 Non-Residential Property NA NA 7 Table 2 Zone 2 Assigned Special Tax Rates Land Use Class Land Use Type Building Square Footage Assigned Special Tax 1 Single Family Property ≥ 3,400 $3,025 per Residential Unit 2 Single Family Property 3,200 – 3,399 $2,975 per Residential Unit 3 Single Family Property 3,000 – 3,199 $2,875 per Residential Unit 4 Single Family Property 2,800 – 2,999 $2,800 per Residential Unit 5 Single Family Property 2,600 – 2,799 $2,675 per Residential Unit 6 Single Family Property 2,400 – 2,599 $2,625 per Residential Unit 7 Single Family Property 2,200 – 2,399 $2,600 per Residential Unit 8 Single Family Property 2,000 – 2,199 $2,575 per Residential Unit 9 Single Family Property < 2,000 $2,475 per Residential Unit 10 Non-Residential Property NA NA 8 Table 3 Zone 3 Assigned Special Tax Rates Land Use Class Land Use Type Building Square Footage Assigned Special Tax 1 Single Family Property ≥ 2,500 $2,300 per Residential Unit 2 Single Family Property 2,400 – 2,499 $2,225 per Residential Unit 3 Single Family Property 2,300 – 2,399 $2,175 per Residential Unit 4 Single Family Property 2,200 – 2,299 $2,100 per Residential Unit 5 Single Family Property 2,100 – 2,199 $2,025 per Residential Unit 6 Single Family Property 2,000 – 2,099 $1,925 per Residential Unit 7 Single Family Property 1,900 – 1,999 $1,600 per Residential Unit 8 Single Family Property 1,800 – 1,899 $1,550 per Residential Unit 9 Single Family Property < 1,800 $1,275 per Residential Unit 10 Apartment Property NA $750 per Residential Unit 11 Non-Residential Property NA NA 9 On each July 1, commencing July 1, 2022, the Assigned Special Tax for Developed Property shall be increased by two percent (2%) of the amount in effect in the prior Fiscal Year. 2. Backup Special Tax for Developed Property The Backup Special Tax for Developed Property commencing in Fiscal Year 2021-22 shall be $15,419 per Acre for Zone 1, $19,322 per Acre for Zone 2 and $22,662 per Acre for Zone 3. Each July 1, commencing July 1, 2022, the Backup Special Tax for Developed Property shall be increased by two percent (2%) of the amount in effect in the prior Fiscal Year. For the purpose of calculating the Backup Special Tax, the land area applicable to Apartment Property shall be computed from the Acreage of the Lot on which the Apartment Property is located, with the Acreage for such Lot allocated equally among all of the Apartment Property located or to be located on such Lot. 3. Maximum Special Tax for Developed Property The Maximum Special Tax for Developed Property shall be the greater of the Assigned Special Tax for Developed Property or the Backup Special Tax for Developed Property. 4. Maximum Special Tax for Provisional Property, Approved Property and Undeveloped Property The Maximum Special Tax for Provisional Property, Approved Property, and Undeveloped Property commencing in Fiscal Year 2021-22 shall be $15,419 per Acre for Zone 1, $19,322 per Acre for Zone 2 and $22,662 per Acre for Zone 3. Each July 1, commencing July 1, 2022, the Maximum Special Tax for Provisional Property, Approved Property and Undeveloped Property shall be increased by two percent (2%) of the amount in effect in the prior Fiscal Year. D. METHOD OF APPORTIONMENT For each Fiscal Year, commencing Fiscal Year 2021-22, the CFD Administrator shall levy the Special Tax on all Taxable Property in accordance with the following steps: Step 1: The Special Tax shall be levied Proportionately on each Assessor’s Parcel of Developed Property at up to 100% of the applicable Assigned Special Tax as needed to satisfy the Special Tax Requirement. Step 2: If additional monies are needed to satisfy the Special Tax Requirement after Step 1 has been completed, the Special Tax shall be levied Proportionately on each Assessor’s Parcel of Approved Property in an amount up to 100% of the Maximum Special Tax for Approved Property. 10 Step 3: If additional monies are needed to satisfy the Special Tax Requirement after Step 2 has been completed, the Special Tax shall be levied Proportionately on each Assessor’s Parcel of Undeveloped Property in an amount up to 100% of the Maximum Special Tax for Undeveloped Property. Step 4: If additional monies are needed to satisfy the Special Tax Requirement after the first three steps have been completed, then the Special Tax amount determined in Step 1 shall be increased Proportionately on each Assessor’s Parcel of Developed Property in an amount up to 100% of the Maximum Special Tax for Developed Property. Step 5: If additional monies are needed to satisfy the Special Tax Requirement after the first four steps have been completed, then the Special Tax shall be levied Proportionately on each Assessor’s Parcel of Provisional Property in an amount up to 100% of the Maximum Special Tax for Provisional Property. Notwithstanding the above, under no circumstances will the Special Tax levied in any Fiscal Year against any Assessor’s Parcel of Residential Property for which an occupancy permit for private residential use has been issued be increased as a result of a delinquency or default in the payment of the Special Tax applicable to any other Assessor’s Parcel within CFD No. 2021-1 by more than ten percent (10%) above what would have been levied in the absence of such delinquencies or defaults. E. COLLECTION OF SPECIAL TAXES Collection of the Special Tax shall be made by the County in the same manner as ordinary ad valorem property taxes are collected and the Special Tax shall be subject to the same penalties and the same lien priority in the case of delinquency as ad valorem taxes; provided, however, that the Council may provide for (i) other means of collecting the Special Tax, including direct billings thereof to the property owners; and (ii) judicial foreclosure of delinquent Special Taxes. F. PREPAYMENT OF SPECIAL TAX OBLIGATION 1. Prepayment in Full Property owners may prepay and permanently satisfy the Special Tax Obligation by a cash settlement with the City as permitted under Government Code Section 53344. The following definitions apply to this Section F: “CFD Public Facilities Costs” means $30,000,000 or such lower number as (i) shall be determined by the CFD Administrator as sufficient to acquire or construct the facilities to be financed under the Act and financing program for CFD No. 2021-1, or (ii) shall be determined by the Council concurrently with a covenant that it will not issue any more Bonds (except refunding bonds). “Construction Fund” means the fund (regardless of its name) established pursuant to the Indenture to hold funds, which are currently available for expenditure to acquire or construct the facilities or pay fees authorized to be funded by CFD No. 2021-1. “Future Facilities Costs” means the CFD Public Facilities Costs minus (i) costs previously paid from the Construction Fund to acquire or construct the facilities, (ii) monies currently on deposit in the Construction 11 Fund, and (iii) monies currently on deposit in an escrow or other designated fund that are expected to be available to finance CFD Public Facilities Costs. “Outstanding Bonds” means all Previously Issued Bonds, which remain outstanding as of the first interest and/or principal payment date following the current Fiscal Year excluding Bonds to be redeemed at a later date with proceeds of prior Special Tax prepayments. “Previously Issued Bonds” means all Bonds that have been issued prior to the date of prepayment. The Special Tax Obligation applicable to an Assessor’s Parcel of Developed Property, Approved Property, Undeveloped Property, or Provisional Property that has been included in a Final Map may be prepaid and the obligation to pay the Special Tax for such Assessor’s Parcel permanently satisfied as described herein, provided that a prepayment may be made with respect to a particular Assessor’s Parcel only 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 eligible to prepay the Special Tax Obligation shall provide the CFD Administrator with written notice of intent to prepay and designate or identify the company or agency that will be acting as the escrow agent, if any. The CFD Administrator shall provide the owner with a statement of the Prepayment Amount for such Assessor’s Parcel within thirty (30) days of the request and may charge a reasonable fee for providing this service. Prepayment must be made at least 60 days prior to any redemption date for the CFD No. 2021-1 Bonds to be redeemed with the proceeds of such prepaid Special Taxes, unless a shorter period is acceptable to the Trustee and the City. The Prepayment Amount shall be calculated for each applicable Assessor’s Parcel or group of Assessor’s Parcels as follows (capitalized terms are defined below): Bond Redemption Amount plus Redemption Premium plus Future Facilities Costs plus Defeasance Amount plus Administrative Fees and Expenses less Reserve Fund Credit less Capitalized Interest Credit Equals: Prepayment Amount The Prepayment Amount shall be determined as of the proposed prepayment date as follows: 1.Confirm that no Special Tax delinquencies apply to such Parcel. 2.For an Assessor’s Parcel of Developed Property, compute the Maximum Special Tax for the Assessor’s Parcel as though all Assessor’s Parcels of Taxable Property within CFD No. 2021-1 have been built out. For an Assessor’s Parcel of Approved Property or Undeveloped Property for which a Building Permit has been issued, compute the Maximum Special Tax for the Parcel as though it was already designated as Developed Property, based upon the Building Permit which has been issued for the Assessor’s Parcel. For an Assessor’s Parcel of Approved Property or Undeveloped Property for which a Building Permit has not been issued or Provisional Property to be prepaid, compute the Maximum Special Tax for the Assessor’s Parcel. 3.Divide the Maximum Special Tax derived pursuant to paragraph 2 by the estimated total amount 12 of Special Taxes that could be levied at build out of all Assessor’s Parcels of Taxable Property based on the applicable Maximum Special Tax for all such Assessor’s Parcels of Taxable Property not including any Parcels for which the Special Tax obligation has been previously prepaid. 4.Multiply the quotient derived pursuant to paragraph 3 by the principal amount of the Outstanding Bonds to determine the amount of Outstanding Bonds to be redeemed with the Prepayment Amount (the “Bond Redemption Amount”). 5.Multiply the Bond Redemption Amount by the applicable redemption premium, if any, on the Outstanding Bonds to be redeemed (the “Redemption Premium”). 6.Determine the Future Facilities Costs. 7.Multiply the quotient derived pursuant to paragraph 3 by the amount determined pursuant to paragraph 6 to determine the portion of the Future Facilities Costs applicable to the Assessor’s Parcel (the “Future Facilities Amount”). 8.Determine the amount needed to pay interest on the Bond Redemption Amount from the first bond interest and/or principal payment date following the current Fiscal Year until the earliest redemption date for the Outstanding Bonds on which Bonds can be redeemed from Special Tax prepayments. 9.Determine the Special Taxes levied on the Assessor’s Parcel in the current Fiscal Year which have not yet been paid. 10.Determine the amount the CFD Administrator reasonably expects to derive from the investment of the Bond Redemption Amount and the Redemption Premium from the date of prepayment until the redemption date for the Outstanding Bonds to be redeemed with the Prepayment Amount. 11.Add the amounts derived pursuant to paragraphs 8 and 9 and subtract the amount derived pursuant to paragraph 10 (the “Defeasance Amount”). 12.Verify the administrative fees and expenses associated with the prepayment, including the cost to invest the Prepayment Amount, the cost of redeeming the Outstanding Bonds, and the cost of recording notices to evidence the prepayment of the Special Tax obligation for the Assessor’s Parcel and the redemption of Outstanding Bonds (the “Administrative Fees and Expenses”). 13.The reserve fund credit (the “Reserve Fund Credit”) shall equal the lesser of: (a) the expected reduction in the reserve requirement (as defined in the Indenture), if any, associated with the redemption of Outstanding Bonds as a result of the prepayment, or (b) the amount derived by subtracting the new reserve requirement (as defined in the Indenture) in effect after the redemption of Outstanding Bonds as a result of the prepayment from the balance in the reserve fund on the prepayment date, but in no event shall such amount be less than zero. 14.If any capitalized interest for the Outstanding Bonds will not have been expended at the time of the first interest and/or principal payment following the current Fiscal Year, a capitalized interest credit shall be calculated by multiplying the quotient computed pursuant to paragraph 3 by the 13 expected balance in the capitalized interest fund after such first interest and/or principal payment (the “Capitalized Interest Credit”). 15.The amount to prepay the Special Tax Obligation is equal to the sum of the Bond Redemption Amount, the Redemption Premium, the Future Facilities Amount, the Defeasance Amount and the Administrative Fees and Expenses, less the Reserve Fund Credit and the Capitalized Interest Credit. 16.From the Prepayment Amount, the Bond Redemption Amount, the Redemption Premium, and Defeasance Amount shall be deposited into the appropriate fund as established under the Indenture and be used to redeem Outstanding Bonds or make Debt Service payments. The Future Facilities Amount shall be deposited into the Construction Fund. The Administrative Fees and Expenses shall be retained by the CFD. The Prepayment Amount may be sufficient to redeem an amount other than a $5,000 increment of CFD No. 2021-1 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 redeem CFD No. 2021-1 Bonds to be used with the next prepayment of CFD No. 2021-1 Bonds. The CFD Administrator will confirm that all previously levied Special Taxes have been paid in full. With respect to any Assessor’s Parcel for which the Special Tax Obligation is prepaid in full, once the CFD Administrator has confirmed that all previously levied Special Taxes have been paid, the Council shall cause a suitable notice to be recorded in compliance with the Act, to indicate the prepayment of the Special Tax and the release of the Special Tax lien on such Assessor’s Parcel, and the obligation of the owner of such Assessor’s Parcel to pay the Special Tax shall cease. Notwithstanding the foregoing, no Special Tax prepayment shall be allowed unless the aggregate amount of Maximum Special Taxes less Administrative Expenses that may be levied on Taxable Property, respectively, after the proposed prepayment is at least 1.1 times the Debt Service on all Outstanding Bonds in each Fiscal Year. 2. Partial Prepayment The Special Tax on an Assessor’s Parcel of Developed Property, Approved Property, Undeveloped Property, or Provisional Property that has been included in a Final Map may be partially prepaid. The amount of the prepayment shall be calculated as in Section F.1; except that a partial prepayment shall be calculated according to the following formula: PP = (PE-A) x F+A These terms have the following meaning: PP = the partial prepayment PE = the Prepayment Amount calculated according to Section F.1 F = the percentage by which the owner of the Assessor’s Parcel(s) is partially prepaying the Special Tax Obligation A = the Prepayment Administrative Fees and Expenses from Section F.1 14 The owner of any Assessor’s Parcel who desires such partial prepayment shall notify the CFD Administrator of (i) such owner’s intent to partially prepay the Special Tax Obligation, (ii) the percentage by which the Special Tax Obligation shall be prepaid, and (iii) the company or agency that will be acting as the escrow agent, if any. The CFD Administrator shall provide the owner with a statement of the amount required for the partial prepayment of the Special Tax Obligation for an Assessor’s Parcel within sixty (60) days of the request and may charge a reasonable fee for providing this service. With respect to any Assessor’s Parcel that is partially prepaid, the City shall (i) distribute the funds remitted to it according to Section F.1., and (ii) indicate in the records of CFD No. 2021-1 that there has been a partial prepayment of the Special Tax Obligation and that a portion of the Special Tax with respect to such Assessor’s Parcel, equal to the outstanding percentage (1.00 - F) of the Maximum Special Tax, shall continue to be levied on such Assessor’s Parcel. Notwithstanding the foregoing, no partial prepayment shall be allowed unless the aggregate amount of Maximum Special Taxes less Administrative Expenses that may be levied on Taxable Property, respectively, after the proposed partial prepayment is at least 1.1 times the Debt Service on all Outstanding Bonds in each Fiscal Year. G. TERM OF SPECIAL TAX The Special Tax shall be levied as long as necessary to meet the Special Tax Requirement for a period not to exceed forty-five (45) Fiscal Years commencing with Fiscal Year 2021-22, provided however that the Special Tax will cease to be levied in an earlier Fiscal Year if the CFD Administrator has determined that all required interest and principal payments on CFD No. 2021-1 Bonds have been paid. H. EXEMPTIONS The CFD Administrator shall classify as Exempt Property (i) Assessor’s Parcels of Public Property, (ii) Assessor’s Parcels of Property Owner Association Property, (iii) Assessor’s Parcels which are used as places of worship and are exempt from ad valorem property taxes because they are owned by a religious organization, (iv) Assessor’s Parcels with public or utility easements making impractical their utilization for other than the purposes set forth in the easement, (v) Lower Income Households Welfare Exemption Property, and (vi) Assessor’s Parcels classified as Non-Residential Property as determined reasonably by the CFD Administrator, provided that no such classification would reduce the sum of all Taxable Property in CFD No. 2021-1 to less than 44.86 Acres in Zone 1, 48.84 Acres in Zone 2 or 11.12 Acres in Zone 3. Assessor’s Parcels which cannot be classified as Exempt Property because such classification would reduce the sum of all Taxable Property in CFD No. 2021-1 to less than 44.86 Acres in Zone 1, 48.84 Acres in Zone 2 or 11.12 Acres in Zone 3 shall be classified as Provisional Property and will continue to be subject to the CFD No. 2021-1 Special Taxes accordingly. Tax exempt status for the purpose of this paragraph will be assigned by the CFD Administrator in the chronological order in which property becomes eligible for classification as Exempt Property, except for Non-Residential Property, which will be assigned tax exempt status only after all other eligible property types have been classified as Exempt Property. If the use of an Assessor’s Parcel of Exempt Property changes so that such Assessor’s Parcel is no longer classified as one of the uses set forth in the first paragraph of Section H above that would make such 15 Assessor’s Parcel eligible to be classified as Exempt Property, such Assessor’s Parcel shall cease to be classified as Exempt Property and shall be deemed to be Taxable Property. I. APPEALS AND INTERPRETATIONS Any property owner claiming that the amounts or application of the Special Taxes is not correct may file a written notice of appeal with the CFD Administrator not later than twelve months after having paid the first installment of the Special Taxes that are disputed. The CFD Administrator shall promptly review the appeal, and if necessary, meet with the property owner, consider written and oral evidence regarding the amount of the Special Taxes, and rule on the appeal. If the decision of the CFD Administrator requires that the Special Taxes for an Assessor’s Parcel be modified or changed in favor of the property owner, a cash refund shall not be made but an adjustment shall be made to the Special Taxes on that Assessor’s Parcel in the subsequent Fiscal Year(s) to compensate for the overpayment of the Special Taxes. Any landowner who pays the Special Tax and claims the amount of the Special Tax levied on his or her Assessor’s Parcel is in error shall first consult with the CFD Administrator regarding such error not later than thirty-six (36) months after first having paid the first installment of the Special Tax that is disputed. If following such consultation, the CFD Administrator determines that an error has occurred, then the CFD Administrator shall take any of the following actions, in order of priority, in order to correct the error: i.Amend the Special Tax levy on the landowner’s Assessor’s Parcel(s) for the current Fiscal Year prior to the payment date, ii.Require the CFD to reimburse the landowner for the amount of the overpayment to the extent of available CFD funds, or iii.Grant a credit against, eliminate or reduce the future Special Taxes on the landowner’s Assessor’s Parcel(s) in the amount of the overpayment. If following such consultation and action by the CFD Administrator the landowner believes such error still exists, such person may file a written notice of appeal with the Council. Upon the receipt of such notice, the Council or designee may establish such procedures as deemed necessary to undertake the review of any such appeal. If the Council or designee determines an error still exists, the CFD Administrator shall take any of the actions described as (i), (ii) and (iii) above, in order of priority, in order to correct the error. The Council or designee thereof shall interpret this Rate and Method of Apportionment of Special Tax for purposes of clarifying any ambiguities and make determinations relative to the administration of the Special Tax and any landowner appeals. The decision of the Council or designee shall be final. A-1 Exhibit A Zone Descriptions A-2 [This page has intentionally been left blank.] -1- W:\Staff Reports - Shared 2\Staff Reports 3-11-2021\4 -City Clerk - 03-11-2021\UPI Refunding\04 Reso of Intention to Incur Bonded Indebtedness (Palm Desert Univ. Park CFD 2021-1) 3.11.21 Final.DOCX RESOLUTION NO. 2021-06 A RESOLUTION OF INTENTION OF THE CITY COUNCIL OF THE CITY OF PALM DESERT TO INCUR BONDED INDEBTEDNESS WITHIN PROPOSED CITY OF PALM DESERT COMMUNITY FACILITIES DISTRICT NO. 2021-1 (UNIVERSITY PARK) RECITALS: WHEREAS, the City Council (the “City Council”) of the City of Palm Desert, (the “City”), upon receipt of a petition as provided in Government Code Section 53318, has heretofore adopted Resolution No. ____ (the “Resolution of Intention”), stating the City Council's intention to form City of Palm Desert Community Facilities District No. 2021- 1 (University Park) (the “District”), pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, commencing with Section 53311 of the California Government Code (the “Act”), to finance certain facilities described therein and summarized as follows (collectively, the “Facilities”): the acquisition, purchase, construction, expansion, improvement, modification, or rehabilitation of certain public facilities necessary to meet the increased demands placed upon the public infrastructure, the City, and the Coachella Valley Water District as a result of the development of the property within the boundaries of the District, including development impact fees therefor, and the prepayment of special taxes levied by City of Palm Desert Community Facilities District No. 2005-1 (University Park) (“CFD 2005-1”) and those facilities previously financed by CFD 2005-1 and proposed to be refinanced by such special tax prepayment; and including incidental expenses to be incurred in financing the Facilities and forming and administering the District; all as further provided in the Resolution of Intention and in Exhibit A hereto and incorporated herein by reference; and WHEREAS, the City Council estimates that the amount required to finance the Facilities is $50 million; and WHEREAS, in order to finance the Facilities it is necessary to incur bonded indebtedness on behalf of the District in the amount not to exceed $50 million, the repayment of which is to be secured by special taxes levied in accordance with Section 53340 et seq. of the Act on all non-exempt property within the District; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF PALM DESERT DOES HEREBY RESOLVE, FIND, DECLARE AND ORDER AS FOLLOWS: Section 1. Bonded Indebtedness. It is necessary to incur bonded indebtedness within the boundaries of the proposed District in an amount not to exceed $50 million to finance the costs of the Facilities, as permitted by the Act. Section 2. Purpose. The bonded indebtedness will be incurred for the purpose of financing the costs of the Facilities, including, but not limited to, the funding of reserve funds for the bonds, any remarketing, credit enhancement and liquidity facility fees (including such fees for instruments which serve as the basis of a reserve fund in lieu of cash), financing of the costs associated with the issuance of the bonds, and all RESOLUTION NO. 2021-06 -2- W:\Staff Reports - Shared 2\Staff Reports 3-11-2021\4 -City Clerk - 03-11-2021\UPI Refunding\04 Reso of Intention to Incur Bonded Indebtedness (Palm Desert Univ. Park CFD 2021-1) 3.11.21 Final.DOCX other costs necessary to finance the Facilities which are permitted to be financed pursuant to the Act. Section 3. Terms. It is the intent of the City Council, acting as the legislative body of the District, to authorize the issuance and sale of one or more series of bonds in the maximum aggregate principal amount of $50 million, bearing interest payable semi-annually or in such other manner as this City Council shall determine, at a maximum interest rate of twelve (12%) percent per annum or such rate not in excess of the maximum rate permitted by law at the time the bonds are issued. The term of the bonds of each series shall be determined pursuant to a resolution of the City Council authorizing the issuance of such series, but such term shall in no event exceed forty (40) years from the date of issuance of such series of bonds or such longer term as is then permitted by law. Section 4. Hearing. A public hearing on the proposed debt issues (the “Hearing”) shall be held on April 22, 2021, at 4:00 p.m., or as soon thereafter as practicable, at the chambers of the City Council of the City of Palm Desert, 73-510 Fred Waring Drive, California 92260. Any interested persons, including all persons owning land or registered to vote within the proposed District, may appear and be heard at the Hearing. Section 5. Voting. The proposition to incur bonded indebtedness in the maximum aggregate principal amount of $50 million shall be submitted to the qualified electors of the District at a special election. Ballots shall be distributed to the qualified electors by mail with return postage prepaid or by personal service. Section 6. Published Notice. The City Clerk is hereby directed to publish a notice of the Hearing and the special bond election (“Notice”) pursuant to Section 6061 of the California Government Code in a newspaper of general circulation circulated within the proposed District. Such Notice shall be substantially in the form specified in Section 53346 of the Act. The publication of the Notice shall be completed at least seven (7) days before the date herein set for the Hearing. Section 7. Mailed Notice. The City Clerk is hereby directed to send a copy of the Notice of the Hearing by first-class mail, postage prepaid, to each registered voter and to each landowner within the proposed District as shown on the last equalized assessment roll. Mailing of the Notice shall be completed at least fifteen (15) days prior to the date of the Hearing. Section 8. Effective Date. This Resolution shall take effect immediately upon adoption. RESOLUTION NO. 2021-06 -3- W:\Staff Reports - Shared 2\Staff Reports 3-11-2021\4 -City Clerk - 03-11-2021\UPI Refunding\04 Reso of Intention to Incur Bonded Indebtedness (Palm Desert Univ. Park CFD 2021-1) 3.11.21 Final.DOCX PASSED, APPROVED and ADOPTED by the City Council of the City of Palm Desert, California, on this 11th day of March, 2021, by the following vote, to wit: AYES: NOES: ABSENT: ABSTAIN: ________________________________ KATHLEEN KELLY, MAYOR ATTEST: __________________________________ GRACE L. ROCHA, ACTING CITY CLERK CITY OF PALM DESERT, CALIFORNIA