HomeMy WebLinkAboutCity Council Resolution 16-061 -Community facilities districtRESOLUTION NO. 16-061
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SARATOGA
OF INTENTION TO ESTABLISH A COMMUNITY FACILITIES DISTRICT
AND TO AUTHORIZE THE LEVY OF SPECIAL TAXES
WHEREAS, the City Council (the "City Council") of the City of Saratoga (the "City")
has received a written petition (the "Petition") from over 10% of the landowners (by area) to be
included within the community facilities district (the "Landowners") requesting the institution of
proceedings for the establishment of a community facilities district (the "District"); and
WHEREAS, the Landowners have represented and warranted to the City Council that
the Landowners are collectively owners of over 10% of the area of land proposed to be included
within the District; and
WHEREAS, under the Mello -Roos Community Facilities Act of 1982 (the "Act"), the
City Council is authorized to establish the District; and
WHEREAS, Section 53314.9 of the Act provides that, at any time either before or after
the formation of a community facilities district, the legislative body may accept advances of
funds from any source, including, but not limited to, private persons or private entities and may
provide, by Resolution, for the use of those funds for any authorized purpose, including, but not
limited to, paying any cost incurred by the local agency in creating a community facilities
district; and
WHEREAS, the City and the Arrowhead Cooperative Company, Inc. (the "Arrowhead
Cooperative"), on behalf of all landowners located within the proposed District, entered into a
Deposit Agreement, dated as of April 6, 2016 (the "Deposit Agreement"), that provides for the
advancement of funds by the Landowner to be used to pay costs incurred in connection with the
establishment of the District and the issuance of special tax bonds thereby; and
WHEREAS, on May 18, 2016, the City Council adopted Local Goals and Policies for
Community Services Districts (Resolution No. 16-032) pursuant to Section 53312.7(a) of the
Act; and
WHEREAS, the Facilities will be constructed, owned, and operated by San Jose Water
Company ("Company") as described in the water facilities offer letter dated July 14, 2016 from
the Company to Arrowhead Cooperative; and
WHEREAS, the July 14, 2016 letter requires an upfront payment of estimated
construction costs (approximately $2.6 million as of July 2016) before the Company will begin
constructing the Facilities; and
NOW, THEREFORE BE IT RESOLVED by the City Council of the City of Saratoga as
follows:
The City Council hereby finds that the Petition is signed by the requisite number of owners of
land proposed to be included in the District.
The City Council proposes to establish a community facilities district under the terms of the Act.
The boundaries of the territory proposed for inclusion in the District are described in the map
showing the proposed District (the "Boundary Map") on file with the City Clerk of the City (the
"City Clerk"), which boundaries are hereby preliminarily approved and to which map reference
is hereby made for further particulars. The City Clerk is hereby directed to sign the original
Boundary Map and record, or cause to be recorded, the Boundary Map with all proper
endorsements thereon in the office of the Santa Clara County Recorder within 15 days of the date
of adoption of this Resolution, all as required by Section 3111 of the California Streets and
Highways Code.
The name proposed for the District is "City of Saratoga Community Facilities District No. 16-
001 (Arrowhead)".
The public facilities (the "Facilities") proposed to be financed by the District pursuant to the Act
are described under the caption "Facilities" on Exhibit A hereto, which is by this reference
incorporated herein.
Except where funds are otherwise available, a special tax sufficient to pay for all Facilities,
secured by recordation of a continuing lien against all nonexempt real property in the District,
will be annually levied within the District. The rate and method of apportionment of the special
tax (the "Rate and Method"), in sufficient detail to allow each landowner within the proposed
District to estimate the maximum amount that he or she will have to pay, is described in
Exhibit B attached hereto, which is by this reference incorporated herein. The conditions under
which the obligation to pay the special tax may be prepaid and permanently satisfied are
specified in the Rate and Method. The special tax will be collected in the same manner as
ordinary ad valorem property taxes or in such other manner as the City Council shall determine,
including direct billing of the affected property owners.
Should the total costs for the Facilities be lower than the bond amount issued, the remaining
bond funds will be refunded. Upon project completion, San Jose Water will reconcile project
costs and submit final payment request or remit excess deposit funds back to the City of
Saratoga. The City of Saratoga will reconcile all project construction funds with all outstanding
expenses or funding holds to determine the final excess construction funding amount, if any.
The excess amount will be disbursed to the property owners in the following manner:
• Excess funding to be divided by 39, representing the total number of property owners
with equal construction cost contributions.
• Distribution checks will be prepared and remitted to the property owners who contributed
the full construction cost cash payment up front, in the amount of 1/39th share of the
excess funds.
• The remaining excess construction funds will be held in the Bond Fund's Debt Service
Payment Reserve, to be used to lower the debt service tax levies over the bond's lifetime.
Once the remaining excess funds are remitted to the Debt Service Reserve, the pro -rata
distribution is dissolved; the remaining excess funding is no longer reimbursable to
individual property owners who subsequently pay off their share of bond debt.
The tax year after which no further special tax will be levied against any parcel used for private
residential purposes is specified in the Rate and Method. Under no circumstances shall the
special tax 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 or parcels within the
District by more than 10% above the amount that would have been levied in that fiscal year had
there never been any such delinquencies or defaults. For purposes of this paragraph, all parcels in
the District shall be considered "used for private residential purposes."
Pursuant to Section 53344.1 of the Act, the City Council hereby reserves to itself the right and
authority to allow any interested owner of property within the District, subject to the provisions
of said Section 53344.1 and to those conditions as it may impose, and any applicable prepayment
penalties as prescribed in the bond indenture or comparable instrument or document, to tender to
the District treasurer in full payment or part payment of any installment of the special taxes or
the interest or penalties thereon which may be due or delinquent, but for which a bill has been
received, any bond or other obligation secured thereby, the bond or other obligation secured
thereby, in the manner described in Section 53344.1 of the Act.
The City Council hereby fixes December 7, 201.6 at 7:00 p.m., or as soon thereafter as the City
Council may reach the matter, at 13777 Fruitvale Avenue, Saratoga, CA 95070, as the time and
place when and where the City Council will conduct a public hearing on the establishment of the
District.
The City Clerk is hereby directed to publish, or cause to be published, a notice of said public
hearing one time in a newspaper of general circulation published in the area of the District. The
publication of said notice shall be completed at least seven days prior to the date herein fixed for
said hearing. Said notice shall be substantially in the form attached hereto as Exhibit C.
The levy of said proposed special tax shall be subject to the approval of the qualified electors of
the District at a special election. The proposed voting procedure shall be by mail ballot among
the registered voters residing in the District.
Prior to the public hearing, Arrowhead Cooperative and/or the Company shall study the proposed
Facilities and to cause to be made, and file with the City Clerk, a report in writing to the City
Manager, presenting the following: (1) a brief description of the Facilities, and (2) an estimate of
the cost of providing the Improvements and whether the Improvements will adequately meet the
needs of the Communities Facilities District. Such estimates and adequacy determination shall be
solely based on information provided by and representations of the Arrowhead Cooperative and
its contractors and consultants. Said report shall be made a part of the record of the public
hearing provided for below.
Arrowhead Cooperative has heretofore advanced certain funds, and may advance additional
funds, which have been or may be used to pay costs incurred in connection with the
establishment of the District and the issuance of special tax bonds thereby and, if necessary,
indemnification. The City Council proposes to repay all or a portion of such funds expended for
such purpose, solely from the proceeds of such bonds, pursuant to the Deposit Agreement.
As a condition of proceeding with the public hearing on District formation, Arrowhead shall
execute an Agreement regarding funding procedures and limiting the City's potential liability in
connection with claims arising from District formation. The Agreement shall be in a form
acceptable to the City Attorney.
The officers, employees and agents of the City are hereby authorized and directed to take all
actions and do all things which they, or any of them, may deem necessary or desirable to
accomplish the purposes of this Resolution and not inconsistent with the provisions hereof.
This Resolution shall take effect immediately upon its adoption.
The above and foregoing resolution was passed and adopted at a regular meeting of the Saratoga
City Council held on the 2nd day of November 2016 by the following vote:
AYES: Mayor E. Manny Cappello, Vice Mayor Emily Lo, Council Member Mary -Lynne
Bemald, Howard A. Miller, Rishi Kumar
NOES:
ABSENT:
ABSTAIN:
ATTEST: (X�
Bothelio, City tY Clerk
E. Manny Cappello, Mayor
DATE: 'L/ '') OI,\C
EXHIBIT A
FACILITIES
The types of facilities to be financed by the District are water storage, transmission and
delivery facilities, including but not limited to: pump stations, motor control center, storage
tanks, pipes, valves, related buildings, fire hydrants, and other related facilities. Such facilities
will be owned and operated by the San Jose Water Company, or another public utility (as defined
under the Act).
The District may also finance the following:
1) Bond related expenses, including underwriter's discount, reserve fund, capitalized
interest, related legal and consultant fees and other incidental expenses (including expenses of
the City).
2) Administrative fees of the bond trustee or fiscal agent related to the District and any
bonded indebtedness of the District.
3) Reimbursement of costs related to the formation of the District advanced by the City,
Arrowhead Cooperative, or any landowner, for other purposes of the Communities Facility
District.
EXHIBIT B
RATE AND METHOD
RATE AND METHOD OF APPORTIONMENT FOR
CITY OF SARATOGA
COMMUNITY FACILITIES DISTRICT NO. 2016-1
(Arrowhead Water Infrastructure Project)
A Special Tax as hereinafter defined shall be levied on each Assessor's Parcel of Taxable
Property within the City of Saratoga Community Facilities District No. 2016-1 (Arrowhead Water
Infrastructure Project) and collected each Fiscal Year commencing in Fiscal Year 2017-2018 in
an amount determined by the City Council through the application of the appropriate Special
Tax as described below. All Taxable Property within CFD No. 2016-1, 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 meaning:
"Acre or Acreage" means the land area of an Assessor's Parcel as shown on County
records, such as an Assessor's Parcel Map and secured roll data. If the land area is not
available, the Acreage of such land area shall be determined by the City Engineer of the
City or designee thereof.
"Act" means the Mello -Roos Community Facilities Act of 1982, as amended, being Chapter
2.5, Division 2 of Title 5 of the Government Code of the State of California.
"Administrative Expenses" means the actual or reasonably estimated costs directly
related to the administration of CFD No. 2016-1 including, but not limited to, the following:
the costs of computing the Special Taxes and preparing the annual Special Tax collection
schedules (whether by the City or designee thereof or both); the costs of collecting the
Special Taxes (whether by the County, the City, or otherwise); the costs of remitting the
Special Taxes to the Trustee; the costs of the Trustee (including its legal counsel) in the
discharge of the duties required of it under the Indenture; the costs to the City, CFD No.
2016-1 or any designee thereof of complying with arbitrage rebate requirements or
responding to questions from the IRS pertaining to any Bonds or any audit of any Bonds by
the IRS; the costs to the City, CFD No. 2016-1 or any designee thereof of providing
continuing disclosure regarding the Bonds pursuant to applicable state or federal securities
law; the costs associated with preparing Special Tax disclosure statements and responding
to public inquiries regarding the Special Taxes; the costs of the City, CFD No. 2016-1 or any
designee thereof related to any appeal of the levy or application of the Special Tax; and the
costs associated with the release of funds from an escrow account, if any. Administrative
Expenses shall also include amounts estimated or advanced by the City or CFD No. 2016-1
for any other administrative purposes, including, but not limited to, attorney's fees and other
costs related to commencing and pursuing to completion any foreclosure of delinquent
Special Taxes.
"Assessor's Parcel" means a lot or parcel shown in an Assessor's Parcel Map with an
assigned Assessor's Parcel number.
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"Assessor's Parcel Map" means an official map of the Assessor of the County designating
parcels by an Assessor's Parcel number.
"Bonds" means any bonds or other debt (as defined in the Act), whether in one or more
series, issued by CFD No. 2016-1 under the Act.
"Bond Year" means a one-year period beginning on September 2nd in each year and
ending on September 1st in the following year, unless defined differently in the applicable
Indenture.
"CFD Administrator" means an official of the City, or designee thereof, responsible for
determining the Special Tax Requirement and providing for the levy and collection of the
Special Taxes.
"CFD No. 2016-1" means City of Saratoga Community Facilities District No. 2016-1
(Arrowhead Water Infrastructure Project).
"City" means the City of Saratoga.
"Council" means the City Council of the City, acting as the legislative body of CFD No.
2016-1.
"County" means the County of Santa Clara.
"Developable Property" means, for Successor Parcels, that in each Fiscal Year, all
Taxable Property for which a building permit could be issued for new construction.
"Exempt Property" means all Assessors' Parcels that are exempt from the Special Tax
pursuant to Section F.
"Finance Director" means the chief financial officer of the City.
"Fiscal Year" means the period starting July 1 and ending on the following June 30.
"Indenture" means the indenture, fiscal agent agreement, trust 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.
"Open Space Property" means property within the boundaries of CFD No. 2016-1 which
(a) has been designated with specific boundaries and acreage on a Final Subdivision Map
as open space, (b) is classified by the County Assessor as open space, (c) has been
irrevocably offered for dedication as open space to the federal government, the State of
California, the County, the City, any other public agency, or (d) is encumbered by an
easement or other restriction required by the City limiting the use of such property to open
space.
"Original Parcel" means an Assessor's Parcel listed in the table of Attachment A to this
Rate and Method of Apportionment.
"Outstanding Bonds" mean all Bonds, which remain outstanding as defined in the
Indenture pursuant to which such Bonds were issued.
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"Property Owner Association Property" means any property within the boundaries of
CFD No. 2016-1 which is (a) owned by a property owner association or (b) designated with
specific boundaries and acreage on a Final Subdivision Map as property owner association
property. As used in this definition, a property owner association includes any master or
sub -association.
"Proportionately" means for Taxable Property that the ratio of the Special Tax levy to the
Maximum Special Tax is equal for all Assessors' Parcels of Taxable Property within CFD
No. 2016-1.
"Public Property" means any property within the boundaries of CFD No. 2016-1 which (a)
is owned by a public agency, (b) has been irrevocably offered for dedication to a public
agency, or (c) is designated with specific boundaries and acreage on a Final Subdivision
Map as property which will be owned by a public agency. For purposes of this definition, a
public agency includes the federal government, the State of California, the County, the City
or any other public agency.
"Special Tax" means the annual special tax to be levied in each Fiscal Year on each
Assessor's Parcel of Taxable Property to fund the Special Tax Requirement.
"Special Tax Requirement" means that amount of Special Tax revenue required in any
Fiscal Year for CFD No. 2016-1 to: (i) Pay Administrative Expenses as designated by the
City; (ii) pay annual debt service on all Outstanding Bonds due in the Bond Year beginning
in such Fiscal Year; (iii) pay other periodic costs on Outstanding Bonds, including but not
limited to, credit enhancement and rebate payments on Outstanding Bonds; (iv) pay any
amounts required to establish or replenish any reserve funds for all Outstanding Bonds in
accordance with the Indenture; to the extent such replenishment has not been included in
the Special Tax Requirement in any prior Fiscal Year; (v) to cure any delinquencies in the
payment of debt service on all Outstanding Bonds in the prior Fiscal Year; and (vi) pay for
reasonably anticipated delinquent Special Taxes based on the delinquency rate for Special
Taxes levied in the previous Fiscal Year; and (vii) pay directly for the acquisition and/or
construction of public improvements which are authorized to be financed by CFD No. 2016-
1 ; less (viii) a credit for funds available to reduce the annual Special Tax levy as determined
by the CFD Administrator pursuant to the Indenture.
"State" means the State of California.
"Successor Parcel" means an Assessor's Parcel located within the boundaries of CFD
2016-1 that is the result of a parcel change of an Original Parcel.
"Taxable Property" means all of the Assessor's Parcels within the boundaries of CFD No.
2016-1 that are not exempt from the Special Tax pursuant to law or that are classified as
Exempt Property.
"Trustee" means the financial institution appointed pursuant to an Indenture to act as the
trustee, fiscal agent, or paying agent or a combination thereof for a series of Bonds for and
on behalf of CFD No. 2016-1 and the City under such Indenture.
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ASSIGNMENT OF PARCEL CLASSIFICATIONS
Each Fiscal Year, all Assessor's Parcels within CFD No. 2016-1 shall be classified as
Taxable Property or Exempt Property. Taxable Property shall be further classified as an
Original Parcel or a Successor Parcel. Taxable Property shall be subject to the levy of
annual Special Taxes determined pursuant to Section C below.
C. MAXIMUM SPECIAL TAX RATE
1. Taxable Property
The Maximum Annual Special Tax for each Original Parcel shall be $9,542.00.
a. Assessor's Parcel changes
When an Original Parcel changes, merges or subdivides, the Maximum Special Tax
shall be apportioned to each Successor Parcel so that there is no net loss in
aggregate Maximum Special Tax revenue for CFD 2016-1. The process for
apportioning the Maximum Special Tax of an Original Parcel(s) to the Successor
Parcel(s) is as follows:
Step 1: Identify the number of Successor Parcels created by the Original
Parcel(s) change, merger or subdivision that are considered Developable
Property. Successor Parcels classified as Public Property, Property
Owner Association Property, Open Space Property or that cannot be
considered Developable Property will not be considered in the
identification of newly created parcels.
Step 2: Multiply the number of parcels from Step 1 by the Maximum Annual
Special Tax for Taxable Property.
Step 3: Sum the Maximum Annual Special Tax for the Original Parcel(s) being
changed, merged or subdivided.
Step 4: If the result of Step 2 exceeds the results of Step 3, assign the Maximum
Special Tax to each Successor Parcel.
Step 5: If the result of Step 2 is less than the result of Step 3, the result of Step 3
will be divided by the number of Successor Parcels identified in Step1 to
determine the Maximum Annual Special Tax for the Successor Parcels.
Once created, if a Successor Parcel further changes or subdivides, the steps shall
be repeated to determine the Maximum Special Tax for each additional Successor
Parcel created from the change or subdivision.
E. METHOD OF APPORTIONMENT OF THE SPECIAL TAX
Commencing with Fiscal Year 2017-2018 and for each following Fiscal Year, the Council
shall determine the Special Tax Requirement and shall levy the Special Tax until the amount
of Special Taxes equals the Special Tax Requirement. The Special Tax shall be levied
each Fiscal Year as follows:
The Special Tax shall be levied Proportionately on each Assessor's Parcel of Taxable
Property at a rate up to 100% of the applicable Maximum Special Tax to satisfy the Special
City of Saratoga - Community Facilities District No. 2016-1
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Tax Requirement.
Notwithstanding the above, under no circumstances will the Special Tax levied against any
Assessor's Parcel used for residential purposes be increased by more than ten percent
(10%) above what the Assessor's Parcel would have been levied had there been no
delinquencies.
F. EXEMPTIONS
1. Parcels that are not considered Developable Property are exempt from Special Taxes
under this section.
2. Open Space Property, Property Owner Association Property, or Public Property is
exempt from Special Taxes under this section.
3. The Maximum Special Tax obligation for any property which would be classified as
Public Property upon its transfer or dedication to a public agency but which is classified
as Developable Property pursuant to Section B above shall be prepaid in full by the
seller pursuant to Section J, prior to the transfer/dedication of such property to such
public agency. Until the Maximum Special Tax obligation for any such property is
prepaid, the property shall continue to be subject to the levy of the Special Tax as
Developed Property regardless of ownership.
4. If the use of an Assessor's Parcel changes so that such Assessor's Parcel is no longer
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.
G. REVIEW/APPEAL COMMITTEE
Any landowner or resident who feels that the amount of the Special Tax levied on their
Assessor's Parcel is in error shall first consult with the CFD Administrator regarding such
error. If following such consultation, the CFD Administrator determines that an error has
occurred, the CFD Administrator may amend the amount of the Special Tax levied on such
Assessor's Parcel and any other Assessor's Parcel affected by the error. If following such
consultation and action (if any by the CFD Administrator), the landowner or resident believes
such error still exists, such person may file a written notice with the City appealing the
amount of the Special Tax levied on such Assessor's Parcel. The City may establish such
procedures, as it deems necessary to undertake the review of any such appeal. The City
shall interpret this Rate and Method of Apportionment and make determinations relative to
the annual administration of the Special Tax and any landowner or resident appeals, as
herein specified. The decision of the City shall be final and binding to all persons.
H. INTERPRETATIONS
Interpretations may be made by the Council, by ordinance or resolution, for purposes of
clarifying any vagueness or ambiguity as it relates to this Rate and Method of
Apportionment.
I. MANNER OF COLLECTION
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The annual Special Tax shall be collected in the same manner and at the same time as
ordinary ad valorem property taxes; provided, however, that CFD No. 2016-1 may, at the
sole discretion of the City, directly bill the Special Tax, may collect Special Taxes at a
different time or in a different manner as necessary to meet its financial obligations, and may
covenant to foreclose and may actually foreclose on Assessor's Parcels of Taxable Property
that are delinquent in the payment of Special Taxes.
J. PREPAYMENT IN FULL
The following definitions apply to this Section J:
"Outstanding Bonds" means all previously issued Bonds which will remain outstanding
after the first principal payment date following the then current Fiscal Year, excluding Bonds
to be redeemed at a later date with the proceeds of prior prepayments of Maximum Special
Taxes.
1. Prepayment in Full
The Maximum Special Tax obligation of an Assessor's Parcel of Taxable Property may be
prepaid and permanently satisfied as described herein; provided that there are no
delinquent Special Taxes with respect to such Assessor's Parcel at the time of prepayment.
An owner of an Assessor's Parcel intending to prepay the Maximum Special Tax obligation
shall provide the CFD Administrator with written notice of intent to prepay. Within 30 days of
receipt of such written notice, the CFD Administrator shall notify such owner of the
prepayment amount of such Assessor's Parcel. Prepayment must be made not Tess than 60
days prior to the next occurring date that notice of redemption of Bonds from the proceeds
of such prepayment may be given to the Trustee pursuant to the Indenture. The CFD
Administrator may charge a fee for providing this service.
The Prepayment Amount (defined below) shall be calculated as summarized below
(capitalized terms as defined below):
Bond Redemption Amount
plus
plus
plus
less
less
Total: equals
As of the proposed date of prepayment,
be calculated as follows:
Step Number:
Redemption Premium
Defeasance Amount
Administrative Fees and Expenses
Reserve Fund Credit
Capitalized Interest Credit (if any)
Prepayment Amount
the Prepayment Amount (defined below) shall
1. Confirm that no Special Tax delinquencies apply to such Assessor's Parcel.
2. Determine the Maximum Special Tax for the Assessor's Parcel.
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3. Divide the Maximum Special Tax from Step 2 by the total Maximum Special Taxes
for the entire CFD No. 2016-1, excluding any Assessor's Parcels which have prepaid
the Maximum Special Tax.
4. Multiply the quotient computed pursuant to Step 3 by the Outstanding Bonds to
compute the amount of Outstanding Bonds to be retired and prepaid (the "Bond
Redemption Amount".
5. Multiply the Bond Redemption Amount computed pursuant to Step 4 by the
applicable redemption premium, if any, on the Outstanding Bonds to be
redeemed (the "Redemption Premium').
6. Compute 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.
7. Compute the amount the Administrator reasonably expects to derive from the
reinvestment of the Prepayment Amount less the Administrative Fees and Expenses
from the date of prepayment until the redemption date for the Outstanding Bonds to
be redeemed with the prepayment.
8. Add the amounts computed pursuant to Steps 6 and 7 and subtract the amount
computed pursuant to Step 9 (the "Defeasance Amount).
9. Verify the administrative fees and expenses, including the costs of computation of
the prepayment, the costs to invest the prepayment proceeds, the costs of
redeeming the Outstanding Bonds, and the costs of recording any notices to
evidence the prepayment and the redemption (the "Administrative Fees and
Expenses'').
10. A 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.
11. 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 Step 3 by the expected balance in the capitalized interest fund
after such first interest and/or principal payment (the "Capita/ized/nterestCredit).
12. The Maximum Special Tax prepayment is equal to the sum of the amounts
computed pursuant to Steps 4, 5, 8 and 9, less the amount computed pursuant to
Steps 10 and 11.
The Prepayment Amount may be sufficient to redeem other than a $5,000 increment of
Bonds. In such cases, the increment amount that is not $5,000 or integral multiple thereof
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will be retained in the appropriate fund established under the Indenture to be used with the
next prepayment of bonds or to make debt service payments.
In addition, the City's Finance Director has the authority to adjust the prepayment amount
per Taxable Parcel calculated above if the Property Owner has paid a portion or all of their
current property tax bill and the portion attributable to the payment of Special Taxes has not
been used to make an interest and/or principal payment on the Bonds.
Notwithstanding the foregoing, no Special Tax prepayment shall be allowed unless the
amount of Maximum Special Taxes that may be levied on Taxable Property after the
proposed prepayment is at least 1.1 times the maximum annual debt service on all
Outstanding Bonds.
2. Prepayment in Part
The Maximum Special Tax obligation of an Assessor's Parcel of Developed Property may be
partially prepaid in increments of $5,000. The amount of the prepayment shall be calculated
as in Section J; 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 Amount
PE = the Prepayment Amount calculated according to Section J
A = the Administrative Fees and Expenses calculated according to Section J
F = the percent by which the owner of the Assessor's Parcel(s) is partially prepaying
the Maximum Special Tax obligation.
The owner of an Assessor's Parcel who desires to partially prepay the Maximum Special
Tax obligation shall notify the CFD Administrator of (i) such owner's intent to partially prepay
the Maximum Special Tax obligation, (ii) the amount of partial prepayment expressed in
increments of $5,000, and (iii) the company or agency that will be acting as the escrow
agent, if applicable. Partial prepayment must be made not less than 60 days prior to the
next occurring date that notice of redemption of Bonds from the proceeds of such partial
prepayment may be given to the Trustee pursuant to the Indenture. The CFD Administrator
may charge a fee for providing this service.
With respect to any Assessor's Parcel that is partially prepaid, the Administrator shall
indicate in the records of CFD No. 2016-1 that there has been a partial prepayment of the
Maximum Special Tax obligation and that a portion of the Maximum Special Tax obligation
equal to the outstanding percentage (1.00 - F) of the remaining Maximum Special Tax
obligation shall continue to be authorized to be levied on such Assessor's Parcel pursuant to
Section E.
Notwithstanding the foregoing, no partial prepayment will be allowed unless the amount of
Maximum Special Taxes that may be levied on Taxable Property after the proposed partial
prepayment is at least 1.1 times the maximum annual debt service on all Outstanding
Bonds.
City of Saratoga - Community Facilities District No. 2016-1
(Arrowhead Water Infrastructure Project)
August 5, 2016
Page 8
K. TERM OF SPECIAL TAX
The Maximum Special Tax shall be levied commencing in Fiscal Year 2017-18 to the extent
necessary to fully satisfy the Special Tax Requirement and shall be levied for a period no
longer than the 2049-2050 Fiscal Year.
City of Saratoga - Community Facilities District No. 2016-1 August 5, 2016
(Arrowhead Water Infrastructure Project) Page 9
Attachment A
City of Saratoga
Community Facilities District No. 2016-1
(Arrowhead Water Infrastructure Project)
Original Parcels
(Fiscal Year 2016-2017)
Assessor's Parcel Number
366-06-004
366-06-030
366-06-047
366-06-005
366-06-031
366-06-048
366-06-010
366-06-032
366-07-004
366-06-011
366-06-034
366-07-006
366-06-012
366-06-038
366-07-007
366-06-014
366-06-039
366-07-008
366-06-016
366-06-040
366-07-009
366-06-019
366-06-041
366-07-014
366-06-021
366-06-042
366-07-015
366-06-022
366-06-043
366-07-016
366-06-025
366-06-044
366-31-002
366-06-026
366-06-045
366-31-003
366-06-027
366-06-046
366-32-007
City of Saratoga - Community Facilities District No. 2016-1
(Arrowhead Water Infrastructure Project)
August 5, 2016
Page 10
EXHIBIT C
NOTICE OF PUBLIC HEARING
Notice is hereby given that on November 2, 2016, the City Council (the "City Council")
of the City of Saratoga (the "City") adopted a Resolution entitled "A Resolution of the City
Council of the City of Saratoga, California of Intention to Establish a Community Facilities
District and to Authorize the Levy of Special Taxes". Pursuant to the Mello -Roos Community
Facilities Act of 1982 (the "Law") the City Council of the City hereby gives notice as follows:
A. The text of said Resolution of Intention is as follows:
[insert final resolution text]
B. The exhibits to the Resolution which describe the improvements to be financed and
the rate and method of apportionment of the special taxes for the district are on file in the office
of the City Clerk of the City.
C. The time and place established under said Resolution for the public hearing required
under the Act is December 7, 2016, at 7:00 p.m. or as soon thereafter as the matter may be heard,
in the regular meeting place of the City Council of the City of Saratoga, 13777 Fruitvale Avenue,
Saratoga, CA 95070.
D. At said hearing, the testimony of all interested persons or taxpayers for or against the
establishment of the district, the extent of the district or the furnishing of the specified types of
improvements will be heard. Any person interested may file a protest in writing with the City
Clerk of the City. If fifty percent or more of the registered voters residing in the territory
proposed to be included in the district, or the owners of one-half or more of the area of land in
the territory proposed to be included in the district and not exempt from the special tax file
written protests against the establishment of the district and the protests are not withdrawn to
reduce the value of the protests to less than a majority, the City Council shall take no further
action to establish the district or levy the special taxes for a period of one year from the date of
the decision of the Board, and if the majority protests of the registered voters or the landowners
are only against the furnishing of a type or types of improvements within the district, or against
levying a specified special tax, those types of improvements or the specified special tax will be
eliminated from the proceedings to form the district.
E. The proposed voting procedure shall be by mailed ballot to the registered voters within
the territory proposed to be included in the district.
Dated: , 2016
824593.2
/s/ Crystal Bothelio
City Clerk of the City of Saratoga