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HomeMy WebLinkAbout95-44 - Special Improvement District 95-1 CIOSARESOLUTION NO. 95 -44 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH DECLARING INTENTION TO ESTABLISH A SPECIAL IMPROVEMENT DISTRICT AND TO AUTHORIZE THE LEVY OF SPECIAL TAXES • WHEREAS, the City Clerk of the City of Newport Beach (the "City ") has received a written petition (the "Petition ") from the owners of not less than 10% of the area of land proposed to be included within a special improvement district (the "District "), the proceedings for the formation of which District are as hereafter provided; WHEREAS, under the City of Newport Beach Special Improvement District Financing Code (the "Code "), the City Council of the City (the "City Council ") is the legislative body for the proposed District and is empowered with the authority to establish the District; and WHEREAS, on the date hereof the City Council adopted a Resolution acknowledging receipt of the Petition and now desires to proceed with the establishment of the District as contemplated by said Resolution; NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Newport Beach as follows: Section 1. The City Council proposes to conduct proceedings to establish a special improvement district pursuant to the Code. • - 1 - Section 2. The name proposed for the District is "City of Newport Beach Special Improvement District No. 95 -1 (CIOSA) ". Section 3. The proposed boundaries of the District are as shown on the map of the District on file with the City Clerk, which boundaries are hereby preliminarily approved and to • which map reference is hereby made for further particulars. The City Clerk is hereby directed to record, or cause to be recorded, said map of the boundaries of the District in the office of the County Recorder within fifteen days of the date of adoption of this Resolution. Section 4. The public facilities proposed to be financed by the District and pursuant to the Code shall consist of those items listed as facilities on Exhibit A hereto and by this reference incorporated herein (the "Facilities'). The City Council hereby finds and determines that the public interest will not be served by allowing the property owners in the District to enter into a contract in accordance with Section 323 of the Code; however the City may enter into one or more contracts directly with any of the property owners with respect to the construction and/or operation of the Facilities. Section 5. Except to the extent that funds are otherwise available to the District to pay for the Facilities and /or the principal and interest as it becomes due on bonds of the District issued to finance the Facilities, a special tax sufficient to pay the costs thereof, secured by recordation of a continuing lien against all non - exempt real property in the District, will be levied annually within the District, and collected in the same manner as ordinary ad valorem property taxes or in such other manner as the City Council or its designee shall determine, including direct billing of the affected property owners. The proposed rate and method of apportionment of the special tax among the parcels of real property within the District, in sufficient detail to allow each landowner within the proposed District to estimate the maximum amount such owner will have to pay, are described in Exhibit B attached hereto • and by this reference incorporated herein. The conditions under which the obligation to pay the specified special tax may be prepaid and permanently satisfied are specified in Exhibit B hereto. -2- In the case of any special tax to pay for the Facilities and to be levied against any parcel used for private residential purposes, (i) the maximum special tax shall be specified as a dollar amount which shall be calculated and thereby established not later than the date on which the parcel is first subject to the tax because of its use for private residential purposes, which amount shall not be increased over time except that it may be increased by an amount not to exceed 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 subject to this sentence 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 %. For purposes of this paragraph, a parcel shall be considered "used for private residential purposes" not later than the date on which an occupancy permit for private residential use is issued. Section 6. It is the intention of the City Council acting as the legislative body for the District to cause bonds of the City to be issued for the District pursuant to the Code to finance in whole or in part the construction of the Facilities. Said bonds shall be in the aggregate principal amount of not to exceed $29,000,000, shall bear interest payable semi - annually or in such other manner as the City Council shall determine, at a rate not to exceed the maximum rate of interest as may be authorized by applicable law at the time of sale of such bonds, and shall mature not to exceed 40 years from the date of the issuance thereof. Section 7. 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 mailed or hand - delivered ballot among the landowners in said proposed District, with each owner having one vote for each acre or portion of an acre such owner owns in the District. • Section 8. The Director of Public Works /City Engineer of the City, as the officer having charge and control of the Facilities in and for the District, is hereby directed to study said proposed Facilities and to make, or cause to be made, and file with the City Clerk a -3- report in writing, presenting the following: (a) A brief description of the Facilities by type which will be required to adequately meet the needs of the District. • (b) An estimate of the fair and reasonable cost of the Facilities, including the cost of acquisition of lands, rights -of -way and easements, any physical facilities required in conjunction therewith and incidental expenses in connection therewith, including the costs of the proposed bond financing and all other related costs as provided in Section 702 of the Code. Said report shall be made a part of the record of the public hearing provided for below. Section 9. Monday, June 12, 1995, at 7:00 p.m., in the regular meeting place of the City Council, Council Chambers, City Hall, 3300 Newport Boulevard, Newport Beach, California, be, and the same are hereby appointed and fixed as the time and place when and where the City Council, as legislative body for the District, will conduct a public hearing on the establishment of the District and consider and finally determine whether the public interest, convenience and necessity require the formation of the District and the levy of said special tax. Section 10. The City Clerk is hereby directed to cause notice of said public hearing to be given by publication one time in a newspaper published in the area of the District. The publication of said notice shall be completed at least seven days before the date herein set for said hearing. Said notice shall contain the information prescribed by Section 3.07 of the Code. • Section 11. The officers and employees 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. 4- Section 12. This Resolution shall take effect immediately upon its adoption. BE IT FURTHER RESOLVED by the City Council of the City of Newport Beach as follows: 0 ADOPTED, this 8th day of May, 1995. ATTEST: c6 \.1\F=bT... • Ah-ki D John W. Hedges, Mayor 5- EXHIBIT A NEWPORT BEACH CIOSA ASSESSOR PARCELS Upper Castaways 117 - 801 -12 Bayview Landing 440 -132 -06 . • 440 -132 -08 Newporter North 440 - 132 -21 440- 132 -24 San Diego Creek 442 -061 -09 442 -061 -11 442- 061 -14 Corporate Plaza West 442- 011 -54 Corporate Plaza 442 -271 -09 442- 271 -11 442- 271 -19 442 - 271 -21 Newport Village 442 -014 -24 Block 800 442 - 262 -04 PCH/MacArthur 442- 014 -28 442 -272 -03 442 - 272 -04 Freeway Reservation 458 -142 -07 Pueu20952— I41I61B2495.44 EXHIBIT A -1 05/08/95 EXHIBIT B RATE AND METHOD OF APPORTIONMENT FOR CITY OF NEWPORT BEACH SPECIAL EUPROVEMENT DISTRICT NO. 95 -1 ( CIOSA) A Special Tax (the "Special Tax ") shall be levied and collected in Newport Beach Special Improvement District No. 95 -1 ( CIOSA) (the " CIOSA District ") each Fiscal Year in an amount • determined by the City Council of the City of Newport Beach, or its designee, as described below. Commencing in Fiscal Year 1995 -96 all of the property within the CIOSA District shall be subject to the Special Tax for the purposes, to the extent and in the manner herein provided. A. Definitions The terms hereinafter set forth have the following meanings: "Administrative Expenses" means any reasonably necessary or appropriate expenses incurred by the City in the administration of the CIOSA District. "Advance Amount" means the amount of the Advance as defined in the CIOSA Agreement. "Assessor's Parcel" means a lot or parcel with an assigned Assessor's Parcel number shown in an Assessor's Parcel Map. "Assessor's Parcel Map" means an official map of the County Assessor of the County of Orange designating parcels by Assessor's Parcel numbers. hereto. "Bayview Landing" means that portion of the CIOSA District described in Exhibit A "Block 800" means that portion of the CIOSA District described in Exhibit A hereto. "Bond Year" means, with respect to each issue of Bonds, the period which commences on the date on which such Bonds are issued and, subsequent to such issuance, on each September 2, and ends on the following September 1. "Bonds" means bonds, notes or other evidences of indebtedness issued by or on behalf of the CIOSA District pursuant to the Code which are payable from Special Taxes. " CIOSA Agreement" means the Circulation Improvement and Open Space Agreement dated June 30, 1993 by and between the City and The Irvine Company as the same may be amended from time to time. " CIOSA Agreement Amount" means the sum of (a) the Fair Share Fees Amount, (b) the Frontage Improvements Amount and (c) the Advance Amount. eueL:20952_141161132495.44 05/08/95 " CIOSA District" means Newport Beach Special Improvement District No. 95 -1 ( CIOSA) as formed by the City pursuant to the Code and as it may be amended from time to time. " CIOSA District Improvement Fund" means the fund established and maintained by or on behalf of the City separate and apart from its other funds and accounts into which money is to be deposited and from which money is to be expended as provided herein and as may be provided in an agreement by and between the City and The Irvine Company. • " CIOSA District Improvement Fund Requirement" means, as of any date of calculation, the CIOSA Agreement Amount as of such date, less the total amount deposited in the CIOSA District Improvement Fund on or before such date from (a) proceeds from the sale of Bonds, (b) Special Taxes, (c) the prepayment of Special Taxes, (d) repayments from the City pursuant to Section 3.7 of the CIOSA Agreement and (e) earnings derived from the investment of the foregoing. "City" means the City of Newport Beach. "City Council" means the City Council of the City of Newport Beach, acting as the legislative body of the CIOSA District, or its designee. "City Engineer" means the City Engineer of the City or such other person or firm as may from time to time be authorized and directed by the City Council to undertake the duties of the City Engineer hereunder. "Code" means the City of Newport Beach Special Improvement District Financing Code. "Corporate Plaza" means that portion of the CIOSA District described in Exhibit A hereto. "Corporate Plaza West" means that portion of the CIOSA District described in Exhibit A hereto. "Debt Service Requirement" means for each Fiscal Year the sum of (a) one hundred percent (100 %) of the principal of and intere§f on Bonds coming due in the Bond Year which ends in the next subsequent Fiscal Year, except to the extent such principal or interest is expected to be paid from proceeds from the sale of Bonds or other amounts then available in the applicable debt service fund for such purpose, (b) the product of the amount described in clause (a) times the larger of (i) the rate of delinquency in the payment of the Special Tax during the Fiscal Year immediately preceding the Fiscal Year for which the Debt Service Requirement is being determined or (ii) ten percent (10 %), (c) the sum of all deposits then required to be made into any reserve fund established with respect to any Bonds, and (d) the reasonably estimated Administrative Expenses for the Bond Year referred to in clause (a). "Developed Property" means for any Fiscal Year all Taxable Property within a Zone in which is located an Assessor's Parcel for which a building permit (other than a building permit for a structure in a model home complex) was issued prior to May I of the preceding Fiscal Year. eusL:20952 -141 161B2495.44 B -2 OVOU95 "Fair Share Fees Amount" means the total amount of the Fair Share Fees as defined in the CIOSA Agreement. "Fiscal Year" means the period starting July 1 and ending on the following June 30. "Freeway Reservation" means that portion of the CIOSA District described in Exhibit A hereto. "Frontage Improvements Amount" means the total cost of the Frontage Improvements as • defined in the CIOSA Agreement. "Initial Final Subdivision Map" means for each Zone the first final subdivision map permitting the sale of lots for single family residential uses within the Zone. . "Maximum Special Tax" means the highest Special Tax, determined in accordance with Sections C and H, that can be levied by the City Council on an Assessor's Parcel in any Fiscal Year. "Newport Village" means that portion of the CIOSA District described in Exhibit A hereto. "Newporter North" means that portion of the CIOSA District described in Exhibit A hereto. "Parcel Area" means the square footage of an Assessor's Parcel determined by the City Engineer from the subdivision map or parcel map creating such Assessor's Parcel. "PCH - MacArthur" means that portion of the CIOSA District described in Exhibit A hereto. "Property Owner Association Property" means any Assessor's Parcel which is owned by a property owner association or which the City Engineer determines from the subdivision map or parcel map creating such Assessor's Parcel is intended to be so owned. "Proportionately" means, with respect to Developed Property, that the ratio of the actual Special Tax levy to the Maximum Special Tax is equal for all Assessor's Parcels and, with respect to Undeveloped Property, means that the ratio of the actual Special Tax levy to the Maximum Special Tax is equal for all Assessor's Parcels. "Public Property" means any property within the boundaries of the CIOSA District owned by or dedicated to the federal government, the State of California, the City or any other public agency, provided that any leasehold or other possessory interest in such property (which leasehold or other possessory interest is not owned by a public agency) shall not be considered Public Property. "San Diego Creek" means that portion of the CIOSA District described in Exhibit A hereto. "Share of Zone Area" shall mean: (1) in the case of an Assessor's Parcel within a Zone which contains no Single Family Residential Property, the quotient obtained by dividing the Parcel Area of the Assessor's Parcel by the Zone Area of the Zone; and Pusu20952_141161 B2495.44 $ -3 05108/95 (2) in the case of an Assessor's Parcel within a Zone which contains any Single Family Residential Property: (a) prior to the recordation of the Initial Final Subdivision Map, the quotient obtained by dividing the Parcel Area of the Assessor's Parcel by the Zone Area of the Zone; (b) from and after the recordation of the Initial Final Subdivision Map, but (in the case of any Assessor's Parcel within the Zone not included within the Initial • Final Subdivision Map) prior to the recordation of a Subsequent Final Subdivision Map: (i) for each Assessor's Parcel included within the Initial Final Subdivision Map which is Taxable Property other than Single Family Residential Property, the quotient obtained by dividing the Parcel Area of the Assessor's Parcel by the sum of the aggregate Parcel Area of all Assessor's Parcels included within the Initial Final Subdivision Map which are Taxable Property plus the aggregate area which the City Engineer estimates (pursuant to clause (iii) hereof), at the time Initial Final Subdivision Map is recorded, will be Taxable Property of all Assessor's Parcels not included within the Initial Final Subdivision Map; (ii) for each Assessor's Parcel included within the Initial Final Subdivision Map which is Single Family Residential Property, the product of a fraction the numerator of which is the aggregate Parcel Area of all Assessor's Parcels included within the Initial Final Subdivision Map which are Single Family Residential Property and the denominator of which is the sum of the aggregate Parcel Area of all Assessor's Parcels included within the Initial Final Subdivision Map which are Taxable Property plus the aggregate area which the City Engineer estimates (pursuant to clause (iii) hereof), at the time Initial Final Subdivision Map is recorded, will be Taxable Property of all Assessor's Parcels not included within the Initial Final Subdivision Map, times a fraction the numerator of which is one (1) and the denominator of which is the number of Assessor's Parcels included within the Initial Final Subdivision Map which 'areSingle Family Residential Property; and (iii) for each Assessor's Parcel within the Zone not included within the Initial Final Subdivision Map, the quotient obtained by dividing the area of the portion thereof which the City Engineer estimates, at the time the Initial Final Subdivision Map is recorded, will be Taxable Property upon the subdivision thereof by the sum of the aggregate Parcel Area of all Assessor's Parcels included within the Initial Final Subdivision Map which are Taxable Property plus the aggregate area which the City Engineer estimates, at the time Initial Final Subdivision Map is recorded, will be Taxable Property of all Assessor's Parcels within the Zone not included within the Initial Final Subdivision Map; and eust.:20952_141161 62495.44 $-4 05/08/95 (c) subsequent to the recordation of each Subsequent Final Subdivision Map (in each case, for Assessor's Parcels within the Zone which had not theretofore been included within either the Initial Final Subdivision Map or a Subsequent Final Subdivision Map): (i) for each Assessor's Parcel included within such Subsequent Final Subdivision Map which is Taxable Property other than Single Family Residential Property, the product of a fraction the numerator of which is the Parcel Area of the Assessor's Parcel and the denominator of which is the • actual total of the area of all the Assessor's Parcels included in such Subsequent Final Subdivision Map which are Taxable Property, times a fraction the numerator of which is the area which the City Engineer estimated would be Taxable Property pursuant to clause (b)(iii) of all the Assessor's Parcels included in such Subsequent Final Subdivision Map (as a whole, and not individually) and the denominator of which is the sum of the aggregate Parcel Area of all Assessor's Parcels described in clauses (b)(i) and (b)(ii) plus the aggregate area which the City Engineer estimated pursuant to clause ( b)(iii) would be Taxable Property of all Assessor's Parcels within the Zone which were not included within the Initial Final Subdivision Map; (ii) for each Assessor's Parcel included within the Subsequent Final Subdivision Map which is Single Family Residential Property, the product of a fraction the numerator of which is the total Parcel Area of all Assessor's Parcels included within the Subsequent Final Subdivision Map which are Single Family Residential Property and the denominator of which is the actual total of the area of all the Assessor's Parcels included in such Subsequent Final Subdivision Map which are Taxable Property, times a fraction the numerator of which is the area which the City Engineer estimated would be Taxable Property pursuant to clause (b)(iii) of all the Assessor's Parcels included in such Subsequent Final Subdivision Map (as a whole, and not individually) and the denominator of which is the sum of the aggregate Parcel Area of all Assessor's Parcels described in clauses (b)(i) and (b)(ii) plus the aggregate area which the City Engineer estimated pursuant to clause (b)(iii) would be Taxable Property of all Assessor's Parcels within the Zone which were not included withih the'Initial Final Subdivision Map, times a fraction the numerator of which is 1 and the denominator of which is the number of Assessor's Parcels which are included within such Subsequent Final Subdivision Map and which are Single Family Residential Property; and (iii) for each Assessor's Parcel within the Zone which is not included within such Subsequent Final Subdivision Map, the quotient obtained by dividing the area of such Assessor's Parcel which the City Engineer estimated would be Taxable Property pursuant to clause (b)(iii) by the sum of the aggregate Parcel Area of all Assessor's Parcels described in clauses (b)(i) and (b)(ii) plus the aggregate area which the City Engineer estimated pursuant to clause (b)(iii) would be Taxable Property of all Assessor's Parcels within the Zone which were not included within the Initial Final Subdivision Map. eusL:20952_141161 B2495.44 B -5 05/09/95 "Single Family Residential Property" means all Assessor's Parcels which are used, or are permitted under the City's planning and zoning laws to be used, as the site of one single family dwelling unit (either detached or attached) or a condominium unit, provided that Single Family Residential Property shall not include any Assessor's Parcel which is Property Owner Association Property or Public Property. "Special Tax" means the Special Tax, if any, to be levied in each Fiscal Year on each Assessor's Parcel within the CIOSA District. • "Special Tax Reduction" means the product of 0.69 times a fraction the numerator of which is $14,300,000 minus the Advance Amount and the denominator of which is $14,300,000. "Subsequent Final Subdivision Map" means for each Zone a final subdivision map permitting the sale of lots for single family residential uses within the Zone which is recorded subsequent to the Initial Final Subdivision Map. "Taxable Property" means all of the Assessor's Parcels within the boundaries of the CIOSA District which are not exempt from the Special Tax pursuant to law or Section E below. "Undeveloped Property" means for any Fiscal Year all Taxable Property which is not classified as Developed Property for such Fiscal Year. "Upper Castaways" means that portion of the CIOSA District described in Exhibit A hereto. "Zone" means Bayview Landing, Block 800, Corporate Plaza, Corporate Plaza West, Freeway Reservation, Newport Village, Newporter North, PCH - MacArthur, San Diego Creek or Upper Castaways, as the case may be. "Zone Area" means the sum of the Parcel Area of each Assessor's Parcel of Taxable Property included in such Zone. "Zone Prepayment Amount" means the respective amount set forth in the following table minus the product of such amount times the Special Tax Reduction, if any: Zone Prepayment Amount Bayview Landing $ 95,000 Block 800 1,370,000 Corporate Plaza 1,400,000 Corporate Plaza West 1,925,000 Freeway Reservation 1,585,000 Newport Village 435,000 Newporter North 7,950,000 PCH - MacArthur 2,140,000 San Diego Creek 2,890,000 Upper Castaways 6,960,000 Pum�.20952_14116 82495.44 B -6 05/08/95 "Zone Special Tax" means, for Fiscal Year 1995 -96, the respective amount set forth in the following table and, for each Fiscal Year subsequent to Fiscal Year 1995 -96, one hundred two percent (102 %) of the amount for the preceding Fiscal Year, minus in each case the product of such amount (as increased in each Fiscal Year) times the Special Tax Reduction, if any. Zone Bayview Landing Block 800 • Corporate Plaza Corporate Plaza West Freeway Reservation Newport Village PCH - MacArthur Newporter North San Diego Creek Upper Castaways B. Determination as to Type of Property Special Tax $ 7,920 116,865 119,910 164,406 135,270 37,304 182,718 678,397 246,600 593,810 For each Fiscal Year, all Taxable Property within the CIOSA District shall be classified as Developed Property or Undeveloped Property and shall be subject to the Special Tax in accordance with the rate and method of apportionment determined pursuant to Sections C, D and H below. C. Maximum Special Tax Rate The Maximum Special Tax in each Fiscal Year for an Assessor's Parcel of Taxable Property shall be the product obtained by multiplying the Share of Zone Area for such Assessor's Parcel times the Zone Special Tax then applicable to the Zone in which such Assessor's Parcel is located. Notwithstanding the foregoing, the Maximum Special Tax for an Assessor's Parcel shall be reduced to reflect a prepayment of the Special Tax applicable thereto as provided for in Section H. D. Method of Apportionment of Special Tax For each Fiscal Year, commencing with Fiscal Year 1995 -96 until the earlier of (i) the date on which the CIOSA District Improvement Fund Requirement has been reduced to zero and there are no Bonds outstanding, or (ii) June 30, 2036, the City Council shall levy the Special Tax as follows: First: Until the CIOSA District Improvement Fund Requirement has been reduced to zero, the Special Tax shall be levied on each Assessor's Parcel of Developed Property at a rate equal to its Maximum Special Tax; Second: To the extent additional money is needed in order to equal the Debt Service Requirement prior to the reduction of the CIOSA District Improvement Fund Requirement to zero, the Special Tax shall be levied Proportionately on all Undeveloped Property in an amount not in excess of the Maximum Special Tax; euay.20952- 14 1 161 82495.44 B -7 05108195 Third: After the CIOSA District Improvement Fund Requirement has been reduced to zero, the Special Tax shall be levied Proportionately on each Assessor's Parcel of Developed Property such that the total thereof will equal the Debt Service Requirement, provided, however, that in no event shall the amount of the Special Tax so levied exceed the Maximum Special Tax; and Fourth: After the CIOSA District Improvement Fund Requirement has been reduced to zero, to the extent additional money is needed in order to equal the Debt Service Requirement, the Special Tax shall be levied Proportionately on all Undeveloped Property, provided, however, that in no event shall the amount of the Special Tax so levied exceed the Maximum Special Tax. • E. Exemptions The City Council shall not levy a Special Tax on either (a) Property Owner Association Property, except the Property Owner Association Property within a Zone which was included in the estimate of Taxable Property made pursuant to clause (b)(iii) of the definition of "Share of Zone Area" and which first became Property Owner Association Property subsequent to the date of recordation of the Initial Final Subdivision Map or (b) Public Property, except the Public Property within a Zone which was included in the estimate of Taxable Property made pursuant to clause ( b)(iii) of the definition of "Share of Zone Area" and which first became Public Property subsequent to the date of recordation of the Initial Final Subdivision Map as a result of acquisition through a negotiated transaction (other than the CIOSA Agreement) or by gift or devise or through eminent domain proceedings, provided that in the case of such property acquired through eminent domain proceedings the obligation to pay the Special Tax shall be treated as if it were a special annual assessment. F. Appeals Any landowner or resident who feels that the amount of the Special Tax is in error may file a notice with the CIOSA District appealing the amount of the Special Tax; provided, however, that if Bonds are outstanding any appeal must be accompanied by payment in full of the actual Special Tax levied. A representative of the CIOSA District will then review the appeal and, if necessary, meet with the applicant. If the findings of the CIOSA District representative verify that the amount of the Special Tax should be modified or changed, then, as appropriate, the Special Tax levy shall be corrected, or if the amount has been paid, then it shall be refunded from available Special Taxes levied and collected in the following Fiscal Year. — G. Manner of Collection The Special Tax will be collected in the same manner and at the same time as ordinary ad valorem property taxes, provided, however, the CIOSA District may collect Special Taxes at a different time or in a different manner if necessary to meet its financial obligations and may covenant to foreclose on delinquent parcels as permitted by the Code. PUaL:20952_14 16 B2495.44 B -8 05/08/95 H. Prepayment of Special Tax 1. Prior to the initial issuance of Bonds, the Special Tax applicable to any Assessor's Parcel may be prepaid in whole by paying to the City Treasurer seventy -seven percent (77 %) of the product obtained by multiplying the Share of Zone Area for such Assessor's Parcel times the Zone Prepayment Amount applicable to the Zone in which such Assessor's Parcel is located. Prior to the initial issuance of Bonds, the Special Tax applicable to any Assessor's Parcel may be prepaid in part by paying to the City Treasurer a specific dollar amount in lieu of the amount determined pursuant to the preceding sentence; and from and after the City Treasurer's receipt of such partial prepayment, is the Maximum Special Tax applicable to such Assessor's Parcel shall be the product of the Maximum Special Tax which would have otherwise been applicable thereto times a fraction the numerator of which is the specific amount paid in lieu of the amount described in the first sentence of this paragraph and the denominator of which is the amount described in said sentence. 2. Subsequent to the initial issuance of Bonds, during any Fiscal Yew in which the aggregate amount of the Special Taxes applicable to all Developed Property is sufficient to satisfy the Debt Service Requirement for such Fiscal Year (determined without any credit for capitalized interest), the Special Tax applicable to any Assessor's Parcel which is then classified as Undeveloped Property may be prepaid in whole by paying to the City Treasurer seventy -seven percent (77 %) of the product obtained by multiplying the Share of Zone Area for such Assessor's Parcel times the Zone Prepayment Amount applicable to the Zone in which such Assessor's Parcel is located. During any Fiscal Year described in the preceding sentence, the Special. Tax applicable to any Assessor's Parcel may be prepaid in part by paying to the City Treasurer a specific dollar amount in lieu of the amount determined pursuant to the preceding sentence; and from and after the City Treasurer's receipt of such partial prepayment, the Maximum Special Tax applicable to such Assessor's Parcel shall be the product of the Maximum Special Tax which would have otherwise been applicable thereto times a fraction the numerator of which is the specific amount paid in lieu of the amount described in the first sentence of this paragraph and the denominator of which is the amount described in said sentence. 3. Except as otherwise provided in the preceding two paragraphs, the Special Tax applicable to any Assessor's Parcel may be prepaid in whole by paying to the City Treasurer the sum of: (a) The remainder of (i) thd product obtained by multiplying the Share of Zone Area for such Assessor's Parcel times the Zone Prepayment Amount applicable to the Zone in which such Assessor's Parcel is located minus (ii) the portion of said product which would have been amortized as principal through the application of the portion of the Special Taxes attributable to the principal of and interest on Bonds theretofore paid with respect to said Assessor's Parcel (as determined by the City Treasurer) assuming that said product had borne interest at an annual rate equal to the highest rate borne by any Bond (or, if no Bond is then outstanding, nine percent (9 %)) and that it had been payable in annual installments (each of which is two percent (2 %) larger than the prior year's installment) over the same number of years as the Bond with the longest maturity, measured from the date of issuance of such Bond (or, if no Bond is then outstanding, twenty -five (25) years); and PUBLa0952_141161 62495.44 B -9 0510805 (b) The amount of any delinquent Special Taxes applicable to said Assessor's Parcel, together with penalties, interest, and Administrative Expenses incurred as a result of said delinquencies accrued to the date of prepayment; and (c) An amount equal to the product of the amount determined pursuant to paragraph (a) above times the highest redemption premium applicable to any Bond at the next call date (as defined in paragraph (e) below); and (d) A reasonable fee, fixed by the City Treasurer, for the cost of administering • the prepayment and, if applicable, the advance redemption of Bonds; and (e) Interest to the next call date on the amount determined pursuant to paragraph (a) above, computed at the highest interest rate then applicable to any Bond. For purposes of this paragraph and paragraph (c) above, the next call date is the next Bond interest payment date which is not less than 90 days after the date of prepayment. A credit against the foregoing shall be given, or a refund paid, for the Special Tax applicable to said Assessor's Parcel posted to the current tax roll and actually paid. The Special Tax applicable to any Assessor's Parcel may be prepaid in part by paying to the City Treasurer a portion (in increments of five thousand dollars ($5,000)) of the amount determined pursuant to paragraph (a) above plus the respective amounts relative thereto described in paragraphs (b) through (e) above. From and after the City Treasurer's receipt of any such partial prepayment, the Maximum Special Tax applicable to such Assessor's Parcel shall be the product of the Maximum Special Tax which would have otherwise been applicable thereto times a fraction the numerator of which is the specific amount paid in lieu of the amount described in paragraph (a) above and the denominator of which is the amount described in paragraph (a) above. POBL.20952 141I61B2495.44 B -10 05/08/95