R-115-16 Adopting the Local Goals and Policies concerning districts formed pursuant to the Mello-Roos Community Facilities Act of 1982

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Equity of Tax Allocation Formulas It is a goal of the City that any special tax levied pursuant to the Act be allocated equitably against all similar parcels within any CFD. Towards this end, the City will engage a qualified special tax consultant to assist in the development of the rate and method of apportionment for any special tax proposed in connection with a CFD. Rate and Method of Apportionment of Special Taxes The Rate and Method of Apportionment ("RMA") of the special tax for any CFD shall adhere to the following requirements: 1. The RMA must be structured so as to produce special tax revenues sufficient to (a) pay scheduled debt service on all bonds issued for the CFD, (b) pay the annual cost of authorized Services, if applicable, (c) pay an amount equal to any anticipated shortfall in special tax revenues due to delinquencies or projected delinquencies in the payment of special taxes, (d) fund any amounts required.to establish or replenish any reserve fund established for such bonds, (e) pay the costs of formation of the City or reimburse the City for the costs of formation of the CFD previously paid out of City funds, and (f) pay reasonable and necessary annual administrative expenses of the CFD. Additionally, the RMA may be structured so as to produce amounts sufficient to fund (a) amounts to pay directly the costs of facilities eligible to be financed by the CFD, (b) the accumulation of funds reasonably required for the payment of future debt service on bonds, (c) remarketing, credit enhancement or liquidity fees, and (d) any other costs or payments permitted by law. The special tax revenues necessary to fund all required expenses or deposits for a CFD may be referred to as the "Special Tax Requirement' 2. In any case, the RMA must be structured such that the projected maximum special tax that could be levied in any Fiscal Year would produce special tax revenues at least equal to (a) 110% of projected annual debt service on all bonds for the calendar year commencing in such Fiscal Year, plus (b) projected administrative expenses of the CFD for the calendar year commencing in such Fiscal Year; 3. An option to permit the prepayment, in whole or in part, of the special tax obligation for an individual parcel for any special tax authorized to finance facilities shall be included in the RMA for any such special tax. Such prepayment shall be permitted only if (a) the payment of all special taxes for such a parcel is current and (b) following such prepayment, the projected maximum special taxes that could be levied in any fiscal year on all remaining taxable property within the CFD will produce the special tax revenues required in paragraph 2 above. However, neither the City nor the CFD shall be obligated to pay for the cost of determining the prepayment amount, which is to be paid by the applicant; The prepayment, in whole or in part, of the special tax obligation for any special tax authorized to be levied to finance Services shall not be permitted; 4