CITY OF DIXON COMMUNITY FACILITIES DISTRICT NO (VALLEY GLEN NO. 2) CFD TAX ADMINISTRATION REPORT FISCAL YEAR

Transcription

1 CITY OF DIXON COMMUNITY FACILITIES DISTRICT NO (VALLEY GLEN NO. 2) CFD TAX ADMINISTRATION REPORT FISCAL YEAR January 8, (University(Ave,(Suite(160( (Sacramento,(CA(95825 Phone:(d916l( ( (Fax:(d916l(

2 Community Facilities District No CFD Tax Administration Report TABLE OF CONTENTS Section Page Executive Summary... i I. Introduction...1 II. Purpose of Report...2 III. Special Tax Requirement...3 IV. Special Tax Levy...4 V. Development Status...7 VI. Authorized Facilities...8 VII. CFD Funds...9 VIII. Prepayments...11 IX. Delinquencies...12 X. Foreclosure Covenant...13 XI. Senate Bill 165 Reporting Requirements...14 XII. Assembly Bill 1666 Requirements...15 XIII. Arbitrage Rebate Calculation...16 Appendix A Summary of Fiscal Year Special Tax Levy Appendix B Fiscal Year Special Tax Levy for Individual Assessor s Parcels Appendix C Rate and Method of Apportionment of Special Tax Appendix D Boundary Map of Community Facilities District No Appendix E Assessor s Parcel Maps for Fiscal Year

3 EXECUTIVE SUMMARY The following summary provides a brief overview of the main points from this report regarding the City of Dixon Community Facilities District No (Valley Glen No. 2) ( CFD No or CFD ): Fiscal Year Special Tax Levy Number of Taxed Parcels Total Special Tax Levy 32 $74,493 For further detail regarding the special tax levies, or special tax rates, please refer to Section IV of this report. Development Status for Fiscal Year Type of Property Developed Property, SFD Lots: < 7,000 Sq. Ft. 7,000 and < 10,000 Sq. Ft. 10,000 Sq. Ft. Other Property Final Map Property, SFD Lots: < 7,000 Sq. Ft. 7,000 and < 10,000 Sq. Ft. 10,000 Sq. Ft. Taxable Public Property Undeveloped Property Units or Acres 18 Units 12 Units 2 Units 0.0 Acres 46 Units 29 Units 3 Units 0.0 Acres 0.0 Acres For more information regarding the status of development in the CFD, please see Section V of this report. Delinquency Summary Fiscal year is the first year that a special tax will be levied on property within CFD No ; therefore, there are no special tax delinquencies to report. City of Dixon i Fiscal Year CFD No (Valley Glen No. 2) CFD Tax Administration Report

4 Outstanding Bond Summary Special Tax Bonds, Series 2017 Issuance Date Original Principal Amount Retired Current Amount Outstanding September 2017 $4,770,000 $0* $4,770,000 * * As of the date of this report City of Dixon ii Fiscal Year CFD No (Valley Glen No. 2) CFD Tax Administration Report

5 I. INTRODUCTION City of Dixon Community Facilities District No (Valley Glen No. 2) On April 28, 2015, the City Council of the City of Dixon (the City ) established CFD No In a landowner election held on the same day, the qualified landowner electors within the CFD authorized the levy of a Mello-Roos special tax on property within CFD No The landowners also voted to incur bonded indebtedness, secured by special taxes levied in the CFD, in an amount not to exceed $15,000,000. On September 12, 2017, CFD No issued Special Tax Bonds, Series 2017 (the Series 2017 Bonds or Bonds ) in the principal amount of $4,770,000. Proceeds of the Series 2017 Bonds were used to finance certain public improvements, to establish a reserve fund for the Bonds, to pay the City s expenses in connection with the issuance of the Bonds, and to pay interest on the Bonds through September 1, CFD No consists of approximately gross acres located at the southeastern edge of the City, along West Cherry Street, west of State Highway 113, in a subdivision known as Valley Glen. The development plan for the property within the CFD includes construction of 114 single family residential units. The Mello-Roos Community Facilities Act of 1982 The reduction in property tax revenue that resulted from the passage of Proposition 13 in 1978 required public agencies and real estate developers to look for other means to fund public infrastructure. The funding available from traditional assessment districts was limited by certain requirements of the assessment acts, and it became clear that a more flexible funding tool was needed. In response, the California State Legislature (the Legislature ) approved the Mello-Roos Community Facilities Act of 1982, which provides for the levy of a special tax within a defined geographic area, namely a community facilities district, if such a levy is approved by two-thirds of the qualified electors in the area. Community facilities districts can generate funding for a broad range of facilities, and special taxes can be allocated to property in any reasonable manner other than on an ad valorem basis. A community facilities district is authorized to issue tax-exempt bonds that are secured by land within the district. If a parcel does not pay the special tax levied on it, a public agency can foreclose on the parcel and use the proceeds of the foreclosure sale to ensure that bondholders receive interest and principal payments on the bonds. Because bonds issued by a community facilities district are land-secured, there is no risk to a public agency s general fund or taxing capacity. In addition, because the bonds are tax-exempt, they typically carry an interest rate that is lower than conventional construction financing. City of Dixon 1 Fiscal Year CFD No (Valley Glen No. 2) CFD Tax Administration Report

6 II. PURPOSE OF REPORT This CFD Tax Administration Report (the Report ) presents findings from research and financial analysis performed by Goodwin Consulting Group, Inc. to determine the fiscal year special tax levy for CFD No The Report is intended to provide information to interested parties regarding CFD No , including the current financial obligations of the CFD, special taxes to be levied in fiscal year , development status, and public facilities authorized to be funded by CFD No The remainder of the Report is organized as follows: Section III identifies financial obligations of CFD No for fiscal year Section IV provides a summary of the methodology that is used to apportion the Special Tax among parcels in the CFD. Section V summarizes the status of development within the CFD. Section VI identifies facilities authorized to be financed by the CFD. Section VII provides information regarding funds and accounts established for the Bonds, including the current balances in such funds and accounts. Section VIII identifies parcels, if any, that have prepaid their special tax obligation. Section IX provides information regarding special tax delinquencies in the CFD. Section X provides information regarding bond foreclosure covenants and foreclosure proceedings, if any. Section XI provides information on the reporting requirements set forth in Senate Bill 165, the Local Agency Special Tax and Bond Accountability Act. Section XII presents information on requirements set forth in Assembly Bill Section XIII provides information regarding arbitrage rebate obligations for the Bonds. City of Dixon 2 Fiscal Year CFD No (Valley Glen No. 2) CFD Tax Administration Report

7 III. SPECIAL TAX REQUIREMENT Pursuant to the Rate and Method of Apportionment of Special Tax (the RMA ), which was adopted as an exhibit to the Resolution of Formation for CFD No , the Special Tax Requirement means the amount necessary in any fiscal year to: (i) pay principal and interest on bonds that is due in the calendar year which begins in such fiscal year; (ii) create and/or replenish reserve funds for the Bonds to the extent such replenishment has not been included in the computation of the Special Tax Requirement in the previous fiscal year; (iii) cure any delinquencies in the payment of principal or interest on bonds which have occurred in the prior fiscal year; (iv) pay administrative expenses; and (v) pay directly for authorized facilities so long as the direct payment for authorized facilities does not increase the special taxes on Undeveloped Property. The amounts referred to in clauses (i) and (ii) of the preceding sentence may be reduced in any fiscal year by: (i) interest earnings on or surplus balances in funds and accounts for bonds to the extent that such earnings or balances are available to apply against debt service pursuant to the Indenture; (ii) proceeds from the collection of penalties associated with delinquent special taxes; and (iii) any other revenues available to reduce the Special Tax Requirement as determined by the administrator. For fiscal year , the Special Tax Requirement is $74,493 and is calculated in the table below. Community Facilities District No Special Tax Requirement Fiscal Year Debt Service Payments March 1, 2018 Interest Payment $83,238 September 1, 2018 Interest Payment $88,656 September 1, 2018 Principal Payment $0 Total Debt Service $171,895 Capitalized Interest ($98,147) CFD Administrative Expenses $744 Special Tax Requirement for Fiscal Year $74,493 *Figures may not total due to rounding City of Dixon 3 Fiscal Year CFD No (Valley Glen No. 2) CFD Tax Administration Report

8 IV. SPECIAL TAX LEVY Special taxes within CFD No are levied pursuant to the methodology set forth in the RMA. Among other things, the RMA establishes various special tax categories against which the special tax may be levied, the maximum special tax rates, and the methodology by which the special tax is applied. Special Tax Categories Special tax categories for CFD No include Developed Property, Final Map Property, Undeveloped Property, and Taxable Public Property. Developed Property is defined as all taxable property for which a building permit for new construction was issued on or before June 30 of the prior fiscal year. Final Map Property is defined as all Single Family Detached Property for which a final map was recorded on or before June 30 of the preceding fiscal year and which has not yet become Developed Property. Developed Property and Final Map Property are subsequently divided into more detailed land use categories, as described in the paragraphs below. Undeveloped Property is defined as all parcels of taxable property that are not yet Developed Property or Final Map Property. Taxable Public Property includes any property within the CFD that, based on reference to Attachment 1 of the RMA, was expected to be Single Family Detached Property and instead becomes public property. As discussed above, Developed Property is further classified into two distinct land use categories: Single Family Detached Property and Other Property. Single Family Detached Property is defined as all parcels of taxable property which a building permit was issued or is permitted to be issued for construction of a residential unit. Maximum Special Tax rates are assigned to the following lot sizes: (i) less than 7,000 square feet; (ii) greater than or equal to 7,000 and less than 10,000 square feet; and (iii) greater than 10,000 square feet. Other Property includes all parcels of Developed Property that are not Single Family Detached Property or Taxable Public Property. As discussed above, Final Map Property is further classified into the following lot size categories: (i) less than 7,000 square feet; (ii) greater than or equal to 7,000 and less than 10,000 square feet; and (iii) greater than 10,000 square feet. City of Dixon 4 Fiscal Year CFD No (Valley Glen No. 2) CFD Tax Administration Report

9 Maximum Special Tax Rates The Maximum Special Tax rates applicable to each category of Taxable Property in the CFD are set forth in Section C of the RMA. The following tables summarize the maximum special taxes for fiscal year that can be levied on property in the CFD. Community Facilities District No Maximum Special Tax Rates Fiscal Year Type of Property Developed Property, SFD Lots: < 7,000 Sq. Ft. 7,000 and < 10,000 Sq. Ft. 10,000 Sq. Ft. Other Property Final Map Property, SFD Lots: < 7,000 Sq. Ft. 7,000 and < 10,000 Sq. Ft. 10,000 Sq. Ft. Taxable Public Property Undeveloped Property FY Maximum Special Tax Rate* $2, per Unit $2, per Unit $2, per Unit $17, per Acre $2, per Unit $2, per Unit $2, per Unit $17, per Acre $17, per Acre * Pursuant to the RMA, on July 1, 2016 and on each July 1 thereafter, the maximum facilities special tax rates shown in the above table shall be increased by an amount equal to 2% of the amount in effect for the prior fiscal year. Apportionment of Special Taxes Each fiscal year, as set forth in Section F of the RMA, the administrator shall determine the Special Tax Requirement and shall levy the Special Tax as follows: First, the Special Tax shall be levied proportionately on each parcel of Developed Property up to 100% of the Maximum Special Tax for such fiscal year until the amount levied on Developed Property is equal to the Special Tax Requirement prior to applying any Capitalized Interest that is available. If additional revenue is needed after the first step and after applying Capitalized Interest to reduce the Special Tax Requirement, the special tax shall be levied proportionately on each parcel of Final Map Property up to 100% of the Maximum Special Tax for each parcel for such fiscal year. If additional revenue is needed after the second step, the Special Tax shall be levied proportionately on each parcel of Undeveloped Property up to 100% of the Maximum Special Tax for each parcel for such fiscal year. If additional revenue is needed after applying the first three steps, the Special Tax shall be levied proportionately on each parcel of Taxable Public Property, up to 100% of the Maximum Special Tax for each parcel for such fiscal year. City of Dixon 5 Fiscal Year CFD No (Valley Glen No. 2) CFD Tax Administration Report

10 From July 1, 2016 to June 30, 2017, building permits have been issued by the City for new construction of 32 units. No building permits have been issued for the construction of Other Property. For fiscal year , 32 Units will be taxed at the maximum rates based on their lot size. This will generate $74,493 of Special Tax revenue, assuming no delinquencies, which is equal to the Special Tax Requirement for fiscal year City of Dixon 6 Fiscal Year CFD No (Valley Glen No. 2) CFD Tax Administration Report

11 V. DEVELOPMENT STATUS As of June 30, 2017, a total of 32 parcels within CFD No have had a building permit issued for new construction. There is no Other Property or Taxable Public Property in CFD No Based on the current status of development in CFD No , the following table summarizes the allocation of parcels to the special tax categories established in the RMA: Community Facilities District No Allocation to Special Tax Categories For Fiscal Year Type of Property Developed Property, SFD Lots: < 7,000 Sq. Ft. 7,000 and < 10,000 Sq. Ft. 10,000 Sq. Ft. Other Property Final Map Property, SFD Lots: < 7,000 Sq. Ft. 7,000 and < 10,000 Sq. Ft. 10,000 Sq. Ft. Taxable Public Property Undeveloped Property Units or Acres 18 Units 12 Units 2 Units 0.0 Acres 46 Units 29 Units 3 Units 0.0 Acres 0.0 Acres City of Dixon 7 Fiscal Year CFD No (Valley Glen No. 2) CFD Tax Administration Report

12 VI. AUTHORIZED FACILITIES CFD No was formed to provide a portion of the financing for construction of certain facilities. A description of the facilities authorized to be funded by the CFD is outlined below: Facilities authorized to be funded by the CFD No generally include: Street Improvements On Site and Off Site Sanitary Sewer Systems Storm Drainage Systems On Site and Off Site Water Facilities Street Light Improvements Street Signage Dry Utilities The facilities eligible to be financed are to include the costs of design, engineering and planning, the costs of any environmental or other studies, surveys or reports, the costs of any required environmental mitigation, soils testing, permits, plan check and inspection fees, insurance, legal and related overhead costs, coordination and supervision, City staff and consultant costs, and any other costs or appurtenances related to any of the public improvements to be financed. City of Dixon 8 Fiscal Year CFD No (Valley Glen No. 2) CFD Tax Administration Report

13 VII. CFD FUNDS Funds were established pursuant to the Fiscal Agent Agreement between the City of Dixon and MUFG Union Bank, N.A. (the Fiscal Agent ). Following is a brief description of the purpose of each fund. The Reserve Fund is held and maintained by the Fiscal Agent. This fund was established as a reserve for the payment of principal and interest on the Bonds in the event the balance in the Bond Fund is insufficient to make debt service payments. Whenever, on or before any interest payment date, or any other date at the request of the City of Dixon Finance Director (the Finance Director ), the amount in the Reserve Fund exceeds the Reserve Requirement (i.e., $357,562 as of September 12, 2017), the Fiscal Agent shall provide written notice to the Finance Director of the amount of the excess and shall transfer an amount equal to the excess from the Reserve Fund to the Bond Fund, to be used to pay interest on the Bonds on the next interest payment date. The Bond Fund is held and maintained by the Fiscal Agent. Moneys in the Bond Fund shall be disbursed for the payment of the principal of, and interest and any premium on, the Bonds pursuant to the provisions in the Fiscal Agent Agreement. Within this fund, there is a Capitalized Interest Account, with funds therein shall be used and withdrawn by the Fiscal Agent solely for the payment of interest on the Bonds. When the amount in the Capitalized Interest Account is fully expended for the payment of interest, the account shall be closed. The Special Tax Fund is held and maintained by the Fiscal Agent. This fund was created to hold special tax receipts apportioned to CFD No The Fiscal Agent shall disburse all money received from special tax revenues pursuant to the provisions in the Fiscal Agent Agreement. The Administrative Expense Fund is held and maintained by the City. All money in the Administrative Expense Fund shall be withdrawn by the Finance Director only to pay for administrative expenses or costs of issuance. On the last day of each fiscal year, the Finance Director shall withdraw from the Administrative Expense Fund and transfer to the Fiscal Agent for deposit into the Special Tax Fund any amount in excess of that which is needed to pay any administrative expenses incurred but not yet paid and which is not otherwise encumbered. The Improvement Fund is held and maintained by the Fiscal Agent. Moneys in the Improvement Fund shall be disbursed for the payment or reimbursement of the costs of the project. Upon the filing of an officer s certificate stating that the project has been completed and that all costs of the project have been paid or are not required to be paid from the Improvement Fund, the Fiscal Agent shall transfer the amount, if any, remaining in the Improvement Fund to the Bond Fund for application to debt service payments due on the next succeeding interest payment date and the Improvement Fund shall be closed. City of Dixon 9 Fiscal Year CFD No (Valley Glen No. 2) CFD Tax Administration Report

14 Fund Balances As of September 12, 2017, the various CFD funds and accounts had the following balances: Community Facilities District No Fund and Account Balances As of September 12, 2017* Reserve Fund $357,562 Bond Fund $0 Capitalized Interest Account $98,147 Special Tax Fund $0 Cost of Issuance Fund $165,000 Improvement Fund $4,033,138 * The issuance date of the Bonds. City of Dixon 10 Fiscal Year CFD No (Valley Glen No. 2) CFD Tax Administration Report

15 VIII. PREPAYMENTS CFD No allows property owners to fully payoff (i.e., prepay) their special tax obligation if they so choose. To date, no property owner has prepaid his/her special tax obligation for CFD No City of Dixon 11 Fiscal Year CFD No (Valley Glen No. 2) CFD Tax Administration Report

16 IX. DELINQUENCIES Fiscal year is the first year that a special tax will be levied on property within CFD No ; therefore, there are no special tax delinquencies to report. City of Dixon 12 Fiscal Year CFD No (Valley Glen No. 2) CFD Tax Administration Report

17 X. FORECLOSURE COVENANT The City has covenanted in the Fiscal Agent Agreement with and for the benefit of the owners of the Bonds that on or about September 1 of each fiscal year, the Finance Director shall compare the amount of the special taxes levied in the CFD to the amount of special tax revenues received by the City, and: Individual Delinquencies. If the Finance Director determines that any single parcel subject to the special tax in the CFD is delinquent in the payment of special taxes for more than one full year s special tax levy on such parcel, then the Finance Director shall send or cause to be sent a notice of delinquency (and a demand for immediate payment thereof) to the property owner within 45 days of such determination, and (if the delinquency remains uncured) foreclosure proceedings shall be commenced by the City within 90 days of such determination. Aggregate Delinquencies. If the Finance Director determines that the total amount of delinquent special tax for the prior fiscal year for the entire CFD, exceeds five percent of the total special tax due and payable for the prior fiscal year, the Finance Director shall notify or cause to be notified property owners who are then delinquent in the payment of special taxes (and demand immediate payment of the delinquency) within 45 days of such determination, and shall commence foreclosure proceedings within 90 days of such determination against each parcel of land in the CFD with a special tax delinquency Notwithstanding the foregoing, the Finance Director need not take any such actions with respect to a delinquent parcel if (i) the CFD is then participating in the Alternative Method of Distribution of Tax Levies and Collections, and (ii) the amount in the Reserve Fund is at least equal to the Reserve Requirement. As of the date of this Report, the City has not been required to initiate foreclosure proceedings on parcels in CFD No City of Dixon 13 Fiscal Year CFD No (Valley Glen No. 2) CFD Tax Administration Report

18 XI. SENATE BILL 165 REPORTING REQUIREMENTS On September 18, 2000, former Governor Gray Davis signed Senate Bill 165 which enacted the Local Agency Special Tax and Bond Accountability Act. In approving the bill, the Legislature declared that local agencies need to demonstrate to the voters that special taxes and bond proceeds are being spent on the facilities and services for which they were intended. To further this objective, the Legislature added Sections and to the California Government Code setting forth annual reporting requirements relative to special taxes collected and bonds issued by a local public agency. Pursuant to Sections and 53411, the chief fiscal officer of the public agency will, by January 1, 2002, and at least once a year thereafter, file a report with the governing body setting forth the following information. Section Item (a): Identify the amount of special taxes that have been collected and expended. Fiscal year is the first fiscal year in which special taxes will be levied in CFD No ; therefore, no prior special taxes have been collected or expended. Item (b): Identify the status of any project required or authorized to be funded by the special taxes. The authorized facilities to be funded from special taxes are outlined in Section VI of this Report. Since fiscal year is the first fiscal year in which special taxes will be levied in CFD No , no Authorized Facilities have been funded by special taxes from prior fiscal years. Section Item (a): Identify the amount of bonds that have been collected and expended. The Series 2017 Bonds were issued by the City on September 12, 2017 in the principal amount of $4,770,000. The Bonds were sold at an original issue discount of $16,840 and an underwriter s discount of $79,313. Upon issuance of the Bonds, $4,033,138 from bond proceeds was deposited into the Improvement Fund. An additional $165,000 was placed in the Cost of Issuance Fund. Approximately $357,562 was deposited in the Reserve Fund, $98,147 was deposited in the Capitalized Interest Account, and the remaining $20,000 was deposited in the Administrative Expense Account. Item (b): Identify the status of any project required or authorized to be funded from bond proceeds. The authorized improvements to be funded from bond proceeds are summarized in Section VI of this Report and are being constructed with monies within the Improvement Fund. Construction, or acquisition, of the authorized public improvements is ongoing. City of Dixon 14 Fiscal Year CFD No (Valley Glen No. 2) CFD Tax Administration Report

19 XII. ASSEMBLY BILL 1666 REQUIREMENTS On July 25, 2016, Governor Jerry Brown signed Assembly Bill No. 1666, adding Section to the California Government Code ( GC ). The bill enhances the transparency of community facilities districts by requiring that certain reports be accessible on a local agency s web site. Pursuant to Section , a local agency that has a web site shall, within seven months after the last day of each fiscal year of the district, display prominently on its web site the following information: Item (a): A copy of an annual report, if requested, pursuant to GC Section The report required by Section includes CFD budgetary information for the prior fiscal year and is only prepared by a community facilities district at the request of a person who resides in or owns property in the community facilities district. If the annual report has not been requested to be prepared, then a posting to the web site would not be necessary. Item (b): A copy of the report provided to the California Debt and Investment Advisory Commission ( CDIAC ) pursuant to GC Section Under Section , local agencies must provide CDIAC with the following: (i) notice of proposed sale of bonds; (ii) annual reports on the fiscal status of bonded districts; and (iii) notice of any failure to pay debt service on bonds, or of any draw on a reserve fund to pay debt service on bonds. Item (c): A copy of the report provided to the State Controller s Office pursuant to GC Section This section refers to the parcel tax portion of a local agency s Financial Transactions Report that is prepared for the State Controller s Office annually. Note that school districts are not subject to the reporting required by GC Section City of Dixon 15 Fiscal Year CFD No (Valley Glen No. 2) CFD Tax Administration Report

20 XIII. ARBITRAGE REBATE CALCULATION As of June 30, 2017, no arbitrage rebate calculation has been completed for the Series 2017 Bonds. The required five-year arbitrage rebate will be calculated after the end of the fifth bond year, which is September 1, City of Dixon 16 Fiscal Year CFD No (Valley Glen No. 2) CFD Tax Administration Report

21 APPENDIX A Summary of Fiscal Year Special Tax Levy

22 City of Dixon Community Facilities District No (Valley Glen No. 2) Fiscal Year Special Tax Levy Summary FY FY FY Maximum Actual Units/ Total Special Product Type Special Tax Special Tax Acres Tax Levy Single Family Detached Property (per Residential Unit) < 7,000 Sq. Ft. $2, $2, Units $40,263 > 7,000 and < 10,000 Sq. Ft. $2, $2, Units $29,027 > 10,000 Sq. Ft. $2, $2, Units $5,202 (per Acre) Other Property $17, $17, Acres $0 Final Map Property (per SFD Lot) < 7,000 Sq. Ft. $2, $ Units $0 > 7,000 and < 10,000 Sq. Ft. $2, $ Units $0 > 10,000 Sq. Ft. $2, $ Units $0 (per Acre) Undeveloped Property $17, $ Acres $0 (per Acre) Taxable Public Property $17, $ Acres $0 Total FY Special Tax Levy $74,493 Goodwin Consulting Group, Inc.

23 APPENDIX B Fiscal Year Special Tax Levy for Individual Assessor s Parcels

24 City of Dixon Community Facilities District No (Valley Glen No. 2) Fiscal Year Special Tax Levy FY FY Assessor's Development Lot Maximum Actual Parcel Number Status Size Special Tax Special Tax Final Map $2, $ Final Map $2, $ Developed 10,970 $2, $2, Developed 10,914 $2, $2, Developed 9,781 $2, $2, Developed 6,854 $2, $2, Developed 5,148 $2, $2, Developed 7,332 $2, $2, Developed 7,586 $2, $2, Developed 9,572 $2, $2, Developed 7,579 $2, $2, Developed 5,250 $2, $2, Developed 6,367 $2, $2, Developed 6,365 $2, $2, Developed 5,250 $2, $2, Developed 5,627 $2, $2, Developed 6,481 $2, $2, Developed 7,293 $2, $2, Developed 8,231 $2, $2, Developed 8,308 $2, $2, Developed 7,132 $2, $2, Developed 7,529 $2, $2, Developed 5,687 $2, $2, Developed 7,443 $2, $2, Developed 7,814 $2, $2, Final Map $2, $ Developed 6,453 $2, $2, Developed 5,250 $2, $2, Developed 6,792 $2, $2, Final Map $2, $ Final Map $2, $ Final Map $2, $ Final Map $2, $ Final Map $2, $ Final Map $2, $ Final Map $2, $ Developed 5,977 $2, $2, Developed 5,459 $2, $2, Developed 5,459 $2, $2, Final Map $2, $ Developed 5,459 $2, $2, Developed 5,437 $2, $2, Final Map $2, $ Developed 6,456 $2, $2, Final Map $2, $ Final Map $2, $ Final Map $2, $ Final Map $2, $ Final Map $2, $ Final Map $2, $ Final Map $2, $0.00 Page 1 of 3

25 City of Dixon Community Facilities District No (Valley Glen No. 2) Fiscal Year Special Tax Levy FY FY Assessor's Development Lot Maximum Actual Parcel Number Status Size Special Tax Special Tax Final Map $2, $ Final Map $2, $ Final Map $2, $ Final Map $2, $ Final Map $2, $ Final Map $2, $ Final Map $2, $ Final Map $2, $ Final Map $2, $ Final Map $2, $ Final Map $2, $ Final Map $2, $ Final Map $2, $ Final Map $2, $ Final Map $2, $ Final Map $2, $ Final Map $2, $ Final Map $2, $ Final Map $2, $ Final Map $2, $ Final Map $2, $ Final Map $2, $ Final Map $2, $ Final Map $2, $ Final Map $2, $ Final Map $2, $ Final Map $2, $ Final Map $2, $ Final Map $2, $ Final Map $2, $ Final Map $2, $ Final Map $2, $ Final Map $2, $ Final Map $2, $ Final Map $2, $ Final Map $2, $ Final Map $2, $ Final Map $2, $ Final Map $2, $ Final Map $2, $ Final Map $2, $ Final Map $2, $ Final Map $2, $ Final Map $2, $ Final Map $2, $ Final Map $2, $ Final Map $2, $ Final Map $2, $ Final Map $2, $ Final Map $2, $ Final Map $2, $0.00 Page 2 of 3

26 City of Dixon Community Facilities District No (Valley Glen No. 2) Fiscal Year Special Tax Levy FY FY Assessor's Development Lot Maximum Actual Parcel Number Status Size Special Tax Special Tax Final Map $2, $ Final Map $2, $ Final Map $2, $ Final Map $2, $ Final Map $2, $ Final Map $2, $ Final Map $2, $ Final Map $2, $0.00 Total Special Tax Levy for FY $255, $74, Goodwin Consulting Group, Inc. Page 3 of 3

27 APPENDIX C Rate and Method of Apportionment of Special Tax

28 EXHIBIT A CITY OF DIXON COMMUNITY FACILITIES DISTRICT NO (VALLEY GLEN NO. 2) RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX A Special Tax applicable to each Assessor s Parcel in the City of Dixon Community Facilities District No (Valley Glen No. 2) shall be levied and collected according to the tax liability determined by the City or its designee, through the application of the appropriate amount or rate for Taxable Property, as described below. All of the property in the CFD, unless exempted by law or by the provisions of Section H below, shall be taxed for the purposes, to the extent, and in the manner herein provided, including property subsequently annexed to the CFD unless a separate Rate and Method of Apportionment of Special Tax is adopted for the annexation area. A. DEFINITIONS The terms hereinafter set forth have the following meanings: Acre means each acre of the land area making up 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 or other recorded County parcel map. Act means the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5, (commencing with Section 53311), Division 2 of Title 5 of the California Government Code. Administrative Expenses means any or all of the following: the fees and expenses of any fiscal agent or trustee (including any fees or expenses of its counsel) employed in connection with any Bonds, and the expenses of the City in carrying out its duties with respect to the CFD and the Bonds, including, but not limited to, the levy and collection of Special Taxes, the fees and expenses of its legal counsel, costs related to annexing property into the CFD, charges levied by the County in connection with the levy and collection of Special Taxes, costs related to property owner inquiries regarding the Special Tax, costs associated with appeals or requests for interpretation associated with the Special Tax and this RMA, amounts needed to pay rebate to the federal government with respect to the Bonds, costs associated with complying with any continuing disclosure requirements with respect to the Bonds and the Special Tax, costs associated with foreclosure and collection of delinquent Special Taxes and all other costs and expenses of the City and County in any way related to the establishment or administration of the CFD. Administrator means the person or firm designated by the City to administer the Special Tax according to this RMA. CFD No (Valley Glen No. 2) 1 March 16, 2015

29 Assessor s Parcel or 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 County Assessor designating parcels by Assessor s Parcel number. Authorized Facilities means the public facilities authorized to be financed, in whole or in part, by the Facilities Special Tax proceeds. Bonds means any bonds or other debt (as defined in Section 53317(d) of the Act), whether in one or more series, issued by the City pursuant to the authority granted by the CFD under the Act. Capitalized Interest means funds in any capitalized interest account available to pay debt service on Bonds. CFD means the City of Dixon Community Facilities District No (Valley Glen No. 2). CFD Formation means the date on which the Resolution of Formation to form CFD No was adopted by the City Council. City means the City of Dixon. City Council means the City Council of the City of Dixon, acting as the legislative body of the CFD. County means the County of Solano. Developed Property means, in any Fiscal Year, all Taxable Property for which a building permit for new construction was issued on or before June 30 of the prior Fiscal Year. Development Class means, individually, Developed Property, Final Map Property, and Undeveloped Property. Expected Land Uses means the total number of Residential Units or acres of Other Property that, as of CFD Formation or upon annexation into the CFD, were expected to be developed within the CFD, as identified in Attachments 1 and 2 hereto and, for annexations, as identified in the Unanimous Approval Form. Pursuant to Sections D and E of this RMA, the Administrator shall update Attachments 1 and 2 each time there is a Land Use Change or property is annexed into the CFD. Expected Maximum Special Tax Revenue means the amount that could be collected if the Maximum Special Tax was levied on the Expected Land Uses. The Expected Maximum Special Tax Revenue as of CFD Formation is shown in Attachment 2, and such amount may be adjusted pursuant to Sections D and E of this RMA, or if Parcels within the CFD prepay all or a portion of the Special Tax obligation. CFD No (Valley Glen No. 2) 2 March 16, 2015

30 Final Map means a final map, or portion thereof, approved by the City pursuant to the Subdivision Map Act (California Government Code Section et seq) that creates SFD Lots. The term Final Map shall not include any large lot subdivision map, Assessor s Parcel Map, or subdivision map or portion thereof, that does not create SFD Lots, including Assessor s Parcels that are designated as remainder parcels. Final Map Property means, in any Fiscal Year, all Single Family Detached Property for which a Final Map was recorded prior to June 30 of the preceding Fiscal Year and which has not yet become Developed Property. Fiscal Year means the period starting July 1 and ending on the following June 30. Future Annexation Area means that geographic area that, at the time of CFD Formation, was considered potential annexation area for the CFD and which was, therefore, identified as future annexation area on the recorded CFD boundary map. Such designation does not mean that any or all of the Future Annexation Area will annex into the CFD, but should property designated as Future Annexation Area choose to annex, the annexation may be processed pursuant to the streamlined annexation procedures provided in the Act. Indenture means the bond 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. Land Use Change means a proposed or approved change to the Expected Land Uses. Maximum Special Tax means the greatest amount of Special Tax that can be levied on an Assessor s Parcel in any Fiscal Year determined in accordance with Sections C, D and E below. Other Property means, in any Fiscal Year, all Parcels of Developed Property that are not Single Family Detached Property or Taxable Public Property. Proportionately means, (a) for Developed Property that is not Taxable Public Property, that the ratio of the actual Special Tax levied in any Fiscal Year to the Maximum Special Tax authorized to be levied in that Fiscal Year is equal for all Assessor s Parcels of Developed Property that are not Taxable Public Property, (b) for Final Map Property, that the ratio of the actual Special Tax levied in any Fiscal Year to the Maximum Special Tax authorized to be levied in that Fiscal Year is equal for all Assessor s Parcels of Final Map Property, (c) for Undeveloped Property, that the ratio of the actual Special Tax levied to the Maximum Special Tax is equal for all Assessor s Parcels of Undeveloped Property, and (d) for Taxable Public Property, that the ratio of the actual Special Tax levied to the Maximum Special Tax is equal for all Assessor s Parcels of Taxable Public Property. Public Property means any property within the boundaries of the CFD that is owned by the federal government, State of California, City, or other public agency. CFD No (Valley Glen No. 2) 3 March 16, 2015

31 Required Coverage means the amount by which the Maximum Special Tax Revenue must exceed the Bond debt service and priority Administrative Expenses (if applicable), as set forth in the Indenture, Certificate of Special Tax Consultant, or other formation or bond document that sets forth the minimum required debt service coverage. Residential Unit means one single-family detached residential unit. RMA means this Rate and Method of Apportionment of Special Tax. SFD Lot means an individual residential lot, identified and numbered on a recorded Final Map, on which a building permit was or is permitted to be issued for construction of a Residential Unit without further subdivision of the lot and for which no further subdivision of the lot is anticipated pursuant to an approved tentative map. Single Family Detached Property means, in any Fiscal Year, all Parcels of Taxable Property for which a building permit was issued or is permitted to be issued for construction of a Residential Unit. Special Tax means a Special Tax levied in any Fiscal Year to pay the Special Tax Requirement. Special Tax Requirement means the amount necessary in any Fiscal Year to: (i) pay principal and interest on Bonds that is due in the calendar year that begins in such Fiscal Year; (ii) create and/or replenish reserve funds for the Bonds to the extent such replenishment has not been included in the computation of Special Tax Requirement in a previous Fiscal Year; (iii) cure any delinquencies in the payment of principal or interest on Bonds which have occurred in the prior Fiscal Year; (iv) pay Administrative Expenses; and (v) pay directly for Authorized Facilities so long as the direct payment for Authorized Facilities does not increase the Special Taxes on Undeveloped Property. The amounts referred to in clauses (i) and (ii) of the preceding sentence may be reduced in any Fiscal Year by: (i) interest earnings on or surplus balances in funds and accounts for the Bonds to the extent that such earnings or balances are available to apply against debt service pursuant to the Indenture; (ii) proceeds received from the collection of penalties associated with delinquent Special Taxes; and (iii) any other revenues available to reduce the Special Tax Requirement as determined by the Administrator. Taxable Property means all of the Assessor s Parcels within the boundaries of the CFD that are not exempt from the Special Tax pursuant to law or Section H below. Taxable Public Property means any property within the CFD that, based on reference to Attachment 1, was expected to be Single Family Detached Property and instead becomes Public Property. Notwithstanding the foregoing, if the Administrator determines that, in the Fiscal Year in which the Parcel would first be categorized as Taxable Public Property, an equal amount of Acreage within the CFD that was expected to be Public Property is rezoned and, based on this rezoning, is subject to the levy of the Special Tax, that Parcel of Public Property can be deemed exempt from the Special Tax if the Administrator determines that there is no loss in Expected Maximum Special Tax Revenue from granting such exemption. CFD No (Valley Glen No. 2) 4 March 16, 2015

32 Unanimous Approval Form means that form executed by the record owner of fee title to a Parcel or Parcels included within the Future Annexation Area and annexed into the CFD, which form constitutes the property owner s approval and unanimous vote in favor of annexing the property into the CFD and authorizing the levy of the Special Tax against his/her Parcel or Parcels pursuant to this RMA. Undeveloped Property means, in any Fiscal Year, all Parcels of Taxable Property that are not yet Developed Property or Final Map Property. B. DATA FOR ANNUAL ADMINISTRATION On or about July 1 of each Fiscal Year, the Administrator shall identify the current Assessor s Parcel numbers for all Parcels of Taxable Property. The Administrator shall also determine: (i) whether each Assessor s Parcel of Taxable Property is Developed Property, Final Map Property, or Undeveloped Property, (ii) for Developed Property, which Parcels are Single Family Detached Property, Other Property, or Taxable Public Property, and (iii) the Special Tax Requirement. In any Fiscal Year, if it is determined that: (i) a parcel map for property in the CFD was recorded after January 1 of the prior Fiscal Year (or any other date after which the Assessor will not incorporate the newly-created parcels into the then current tax roll), (ii) because of the date the parcel map was recorded, the Assessor does not yet recognize the new parcels created by the parcel map, and (iii) one or more of the newly-created parcels is in a different Development Class than other parcels created by the subdivision, the Administrator shall calculate the Special Tax for the property affected by recordation of the parcel map by determining the Special Tax that applies separately to the property within each Development Class, then applying the sum of the individual Special Taxes to the Parcel that was subdivided by recordation of the parcel map. In addition, the Administrator shall, on an ongoing basis, monitor whether Land Use Changes have been proposed that will affect the Expected Land Uses and whether Final Maps that have been proposed for approval by the City Council are consistent with the Expected Land Uses. If changes to the Expected Land Uses are proposed, the Administrator shall apply the steps set forth in Section D below. C. MAXIMUM SPECIAL TAX 1. Developed Property Table 1 below identifies the Maximum Special Tax for Parcels of Developed Property, subject to potential adjustments that may occur pursuant to Section D below. CFD No (Valley Glen No. 2) 5 March 16, 2015

33 TABLE 1 MAXIMUM SPECIAL TAX FOR DEVELOPED PROPERTY Type of Property Single Family Detached Property: SFD Lots 10,000 square feet SFD Lots 7,000 and < 10,000 square feet SFD Lots < 7,000 square feet Other Property Taxable Public Property Maximum Special Tax Fiscal Year * $2,500 per Residential Unit $2,325 per Residential Unit $2,150 per Residential Unit $16,715 per Acre $16,715 per Acre * On July 1, 2016 and on each July 1 thereafter, all figures shown in Table 1 above shall be increased by an amount equal to 2.0% of the amount in effect for the prior Fiscal Year. 2. Final Map Property Table 2 below identifies the Maximum Special Tax for Parcels of Final Map Property, subject to potential adjustments that may occur pursuant to Section D below. TABLE 2 MAXIMUM SPECIAL TAX FOR FINAL MAP PROPERTY SFD Lot Size SFD Lots 10,000 square feet SFD Lots 7,000 and < 10,000 square feet SFD Lots < 5,000 square feet Maximum Special Tax Fiscal Year * $2,500 per SFD Lot $2,325 per SFD Lot $2,150 per SFD Lot * On July 1, 2016 and on each July 1 thereafter, all figures shown in Table 2 above shall be increased by an amount equal to 2.0% of the amount in effect for the prior Fiscal Year. 3. Undeveloped Property The Maximum Special Tax for Undeveloped Property is $16,715 per Acre for Fiscal Year and shall, on July 1, 2016 and on each July 1 thereafter, increase by an amount equal to 2.0% of the amount in effect for the prior Fiscal Year. CFD No (Valley Glen No. 2) 6 March 16, 2015

34 D. ADJUSTMENTS TO THE MAXIMUM SPECIAL TAX The Expected Maximum Special Tax Revenue was calculated based on the Expected Land Uses at CFD Formation; both the Expected Maximum Special Tax Revenue and Expected Land Uses shall be adjusted upon each annexation of property into the CFD, as set forth in Section E below. The Administrator shall review Final Maps, tentative map revisions, and other approvals and land use changes and compare the revised land uses to the Expected Land Uses to evaluate the impact on the Expected Maximum Special Tax Revenue. If, at any point in time, a Land Use Change is proposed that will result in a reduction in the Expected Maximum Special Tax Revenue, but such reduction does not reduce debt service coverage on outstanding Bonds below the Required Coverage, no action will be needed pursuant to this Section D. Upon approval of the Land Use Change, the Administrator shall update Attachment 2 to show the reduced Expected Maximum Special Tax Revenue, which amount shall be used to size any subsequent Bond issues. If a Land Use Change is proposed that will result in a reduction in the Expected Maximum Special Tax Revenue that would reduce debt service coverage on outstanding Bonds below the Required Coverage, the following steps shall be applied: Step 1: Step 2: Step 3: By reference to Attachment 2 (which will be updated by the Administrator each time a Land Use Change has been processed according to this Section D), the Administrator shall identify the existing Expected Maximum Special Tax Revenue. The Administrator shall calculate the Maximum Special Tax Revenue that could be collected from Taxable Property if the Land Use Change is approved. Unless the landowner requesting the Land Use Change prepays a portion of the Expected Maximum Special Tax Revenue in an amount that corresponds to the reduction in revenue that would occur due to the Land Use Change, then the Maximum Special Tax for each Parcel of Taxable Property in the area affected by the Land Use Change shall be increased proportionately until the existing Expected Maximum Special Tax Revenue (prior to the Land Use Change) is maintained. If multiple Land Use Changes are proposed simultaneously by a single land owner (which may include approval of multiple Final Maps at one time), the Administrator may consider the combined effect of all the Land Use Changes to determine if there is a reduction in Expected Maximum Special Tax Revenue. If there is a reduction, the Administrator shall increase the Maximum Special Tax proportionately on Parcels in all of the Final Maps being proposed by the landowner until the aggregate amount that can be levied within the Final Maps is equal to the amount that could have been levied prior to the proposed Land Use Changes. If Land Use Changes are proposed simultaneously by multiple landowners, the Administrator shall consider the proposed Land Use Changes individually. CFD No (Valley Glen No. 2) 7 March 16, 2015

35 The duties imposed on the Administrator pursuant to this Section D to review Land Use Changes, and to review Final Maps and make certain calculations, are intended only to facilitate the administration of the Special Tax and to better assure the sufficiency of tax capacity to pay debt service on Bonds. Such duties are not intended to give any developer, subdivider or owner of property any right to receive notice of the potential impact of a Land Use Change on the Special Tax applicable to a Parcel, and each developer, subdivider or owner of property whose property is the subject of a Land Use Change shall be responsible for understanding the impact thereof on the Special Tax applicable to such property. E. ANNEXATIONS If, in any Fiscal Year, a property owner within the Future Annexation Area wants to annex property into the CFD, the Administrator shall apply the following steps as part of the annexation proceedings: Step 1: Step 2: Step 3: Step 4: Working with City staff and the landowner, the Administrator shall determine the Maximum Special Tax that will apply to Single Family Detached Property and Other Property within the area to be annexed. Once determined, the Maximum Special Taxes for the annexing area shall be identified in the Unanimous Approval Form which will be signed by the property owner as part of the annexation process. The Administrator shall ensure that a Notice of Special Tax Lien is recorded against all Parcels that are annexed to the CFD. The Administrator shall prepare and keep on file an updated Attachment 2 that adds the annexed property and identifies the Expected Land Uses and revised Expected Maximum Special Tax Revenue for the CFD. After the annexation is complete, the application of Sections D, F and I of this RMA shall be based on the adjusted Expected Land Uses and Expected Maximum Special Tax Revenue including the newly annexed property. The Administrator shall recalculate the Public Facilities Requirement used in the prepayment calculation in Section I below to include the estimated net proceeds that can be generated to fund Authorized Facilities based on the Maximum Special Tax capacity from the annexed area. The adjusted Public Facilities Requirement shall be calculated by (i) dividing the increased Expected Maximum Special Tax Revenue that can be collected after the annexation by the Expected Maximum Special Tax Revenue that was in place prior to the annexation, and (ii) multiplying the quotient by the Public Facilities Requirement that was in place prior to the annexation. CFD No (Valley Glen No. 2) 8 March 16, 2015

36 F. METHOD OF LEVY OF THE SPECIAL TAX The Administrator shall determine the Special Tax Requirement to be collected each Fiscal Year, and the Special Tax shall be levied according to the steps outlined below. Step 1: Step 2: Step 3: Step 4: The Special Tax shall be levied Proportionately on each Parcel of Developed Property within the CFD, not including Taxable Public Property, up to 100% of the Maximum Special Tax for each Parcel for such Fiscal Year until the amount levied on Developed Property that is not Taxable Public Property is equal to the Special Tax Requirement prior to applying any Capitalized Interest that is available in the CFD accounts. If additional revenue is needed after Step 1, and after applying Capitalized Interest to the Special Tax Requirement, the Special Tax shall be levied Proportionately on each Parcel of Final Map Property within the CFD, up to 100% of the Maximum Special Tax for each Parcel of Final Map Property for such Fiscal Year. If additional revenue is needed after applying the first two steps, the Special Tax shall be levied Proportionately on each Parcel of Undeveloped Property, up to 100% of the Maximum Special Tax for each Parcel of Undeveloped Property for such Fiscal Year. If additional revenue is needed after applying the first three steps, the Special Tax shall be levied Proportionately on each Parcel of Taxable Public Property, exclusive of property exempt from the Special Tax pursuant to Section H below, up to 100% of the Maximum Special Tax for each Parcel of Taxable Public Property for such Fiscal Year. G. COLLECTION OF SPECIAL TAX The Special Tax shall be collected in the same manner and at the same time as ordinary ad valorem property taxes, provided, however, that prepayments are permitted as set forth in Section I below and provided further that the City may directly bill the Special Tax, may collect Special Taxes at a different time or in a different manner, and may collect delinquent Special Taxes through foreclosure or other available methods. The Special Tax shall be levied and collected until principal and interest on Bonds have been repaid, costs of constructing or acquiring Authorized Facilities from Special Tax proceeds have been paid, and all Administrative Expenses have been paid or reimbursed. However, in no event shall a Special Tax be levied after Fiscal Year Under no circumstances may the Special Tax on a Parcel in residential use be increased in any Fiscal Year as a consequence of delinquency or default in payment of the Special Tax levied on another Parcel or Parcels by more than ten percent (10%) CFD No (Valley Glen No. 2) 9 March 16, 2015

37 above the amount that would have been levied in that Fiscal Year had there never been any such delinquencies or defaults. H. EXEMPTIONS Notwithstanding any other provision of this RMA, no Special Tax shall be levied on the following: (i) Public Property, except Taxable Public Property, (ii) Parcels that are designated as permanent open space or common space on which no structure is permitted to be constructed, (iii) Parcels owned by a public utility for an unmanned facility, (iv) Parcels subject to an easement that precludes any use on the Parcel other than that permitted by the easement, and (v) Parcels that have fully prepaid the Special Tax obligation, as determined pursuant to the formula set forth in Section I below. Notwithstanding the foregoing, if a Parcel has been Taxable Property in prior Fiscal Year, and the entire Parcel subsequently meets the criteria for any of the exempted categories above, the Parcel shall remain subject to the Special Tax levy unless and until a prepayment is made to release the Parcel from its Special Tax obligation. If, in any Fiscal Year, a Parcel of Public Property is converted to private use, such Parcel shall be subject to the levy of the Special Tax. I. PREPAYMENT OF SPECIAL TAX The following definitions apply to this Section I: Construction Fund means the account (regardless of its name) identified in the Indenture to hold funds which are currently available for expenditure to acquire or construct Authorized Facilities. Outstanding Bonds means all Previously Issued Bonds which remain outstanding, with the following exception: if a Special Tax has been levied against, or already paid by, a Parcel making a prepayment, and a portion of the Special Tax will be used to pay a portion of the next principal payment on the Bonds that remain outstanding (as determined by the Administrator), that next principal payment shall be subtracted from the total Bond principal that remains outstanding, and the difference shall be used as the amount of Outstanding Bonds for purposes of this prepayment formula. Previously Issued Bonds means all Bonds that have been issued on behalf of the CFD prior to the date of prepayment. Public Facilities Requirement means either (i) $3,005,000 in 2015 dollars, which shall increase on January 1, 2016, and on each January 1 thereafter, by two percent (2%) of the amount in effect in the prior year, or (ii) such other number as shall be determined by the Administrator to be an appropriate estimate of the net construction proceeds that will be generated from all Bonds that have been or are expected to be issued on behalf of the CFD, and from the increased Expected Maximum Special Tax Revenue that may be added from future annexations, as set forth in Section E above. CFD No (Valley Glen No. 2) 10 March 16, 2015

38 Remaining Facilities Costs means the Public Facilities Requirement minus the cost of Authorized Facilities that have been funded by Previously Issued Bonds and Special Tax revenues. 1. Full Prepayment The Special Tax obligation applicable to a Parcel in the CFD may be fully prepaid and the obligation of the Parcel to pay the Special Tax permanently satisfied as described herein, provided that a prepayment may be made only if there are no delinquent Special Taxes with respect to such Parcel at the time of prepayment. An owner of a Parcel intending to prepay the Special Tax obligation shall provide the City with written notice of intent to prepay. Within 30 days of receipt of such written notice, the Administrator or its designee shall notify such owner of the prepayment amount for such Assessor s Parcel. Prepayment must be made not less than 75 days prior to any redemption date for Bonds to be redeemed with the proceeds of such prepaid Special Taxes. The Prepayment Amount shall be calculated as follows: (capitalized terms as defined below): Bond Redemption Amount plus Remaining Facilities Amount plus Redemption Premium plus Defeasance Requirement plus Administrative Fees and Expenses less Reserve Fund Credit equals Prepayment Amount As of the proposed date of prepayment, the Prepayment Amount shall be determined by application of the following steps: Step 1. Step 2. Step 3. Step 4. Step 5. Compute the total Maximum Special Tax that could be collected from the Parcel based on the Expected Land Uses for the Parcel at the time the prepayment is calculated. Divide the Maximum Special Tax from Step 1 by the then-current Expected Maximum Special Tax Revenue for the CFD. Multiply the quotient computed pursuant to Step 2 by the Outstanding Bonds to compute the amount of Outstanding Bonds to be retired and prepaid (the Bond Redemption Amount ). Compute the current Remaining Facilities Costs (if any). Multiply the quotient computed pursuant to Step 2 by the amount determined pursuant to Step 4 to compute the amount of Remaining Facilities Costs to be prepaid (the Remaining Facilities Amount ). CFD No (Valley Glen No. 2) 11 March 16, 2015

39 Step 6. Step 7. Step 8. Step 9. Step 10. Step 11. Step 12. Multiply the Bond Redemption Amount computed pursuant to Step 3 by the applicable redemption premium, if any, on the Outstanding Bonds to be redeemed (the Redemption Premium ). Compute the amount needed to pay interest on the Bond Redemption Amount starting with the first Bond interest payment date after which the prepayment has been received until the earliest redemption date for the Outstanding Bonds, which, depending on the Bond offering document, may be as early as the next interest payment date. Compute the amount of interest the City reasonably expects to derive from reinvestment of the Bond Redemption Amount plus the Redemption Premium from the first Bond interest payment date after which the prepayment has been received until the redemption date for the Outstanding Bonds. Take the amount computed pursuant to Step 7 and subtract the amount computed pursuant to Step 8 (the Defeasance Requirement ). Determine the costs of computing the prepayment amount, the costs of redeeming Bonds, and the costs of recording any notices to evidence the prepayment and the redemption (the Administrative Fees and Expenses ). If and to the extent so provided in the indenture pursuant to which the Outstanding Bonds to be redeemed were issued, a reserve fund credit shall be calculated as a reduction in the applicable reserve fund for the Outstanding Bonds to be redeemed pursuant to the prepayment (the Reserve Fund Credit ). The Special Tax prepayment is equal to the sum of the amounts computed pursuant to Steps 3, 5, 6, 9, and 10, less the amount computed pursuant to Step 11 (the Prepayment Amount ). Step 13. From the Prepayment Amount, the amounts computed pursuant to Steps 3, 6, and 9 shall be deposited into the appropriate fund as established under the Indenture and be used to retire Outstanding Bonds or make debt service payments. The amount computed pursuant to Step 5 shall be deposited into the Construction Fund. The amount computed pursuant to Step 10 shall be retained in the account or fund that is established to pay Administrative Expenses. Once a full prepayment of a Parcel s Special Tax obligation has been received, a Notice of Cancellation of Special Tax Lien shall be recorded against the Parcel to reflect the discharge of the Parcel s obligation to pay the Special Tax. However, a Notice of Cancellation of Special Tax Lien CFD No (Valley Glen No. 2) 12 March 16, 2015

40 shall not be recorded until all Special Taxes levied on the Parcel in the current or prior Fiscal Years have been collected. 2. Partial Prepayment A partial prepayment may be made in an amount equal to any percentage of full prepayment desired by the party making a partial prepayment, except that the full amount of Administrative Fees and Expenses determined in Step 10 shall be included in the partial prepayment. The Maximum Special Tax that can be levied on a Parcel after a partial prepayment is made shall be determined as follows: Step 1. Step 2. Step 3. Step 4. Calculate the full prepayment (not including the amount collected for Administrative Fees and Expenses) that would be due from the Parcel if the entire Special Tax obligation were being prepaid pursuant to Section I.1 above. Divide the partial prepayment amount for the Parcel (not including the amount collected for Administrative Fees and Expenses) by the amount computed in Step 1 to determine a percentage. Subtract the percentage computed in Step 2 from 100% to determine the Remaining Percentage. Multiply the Remaining Percentage from Step 3 by the Maximum Special Tax for the Parcel to determine the new Maximum Special Tax that will be in effect for the Parcel after the partial prepayment is applied. When a partial prepayment is received, the proceeds shall be deposited as follows: The amount computed pursuant to Step 10 in Section I.1 shall be deposited into the account or fund that is established to pay Administrative Expenses The sum of the amounts computed pursuant to Steps 3, 6, and 9 in Section I.1 shall be multiplied by the percentage determined in Step 2 of this Section I.2, and the product shall be the amount deposited into the appropriate fund established under the Indenture to be used to retire Outstanding Bonds or make debt service payments. The amount computed pursuant to Step 5 in Section I.1 shall be multiplied by the percentage determined in Step 2 of this Section I.2, and the product shall be the amount deposited into the Construction Fund. Once a partial prepayment has been received, an Amendment to Special Tax Lien shall be recorded against the Parcel. However, an Amendment to Special Tax Lien shall not be recorded until all Special Taxes levied on the Parcel in the current or prior Fiscal Years have been collected. CFD No (Valley Glen No. 2) 13 March 16, 2015

41 J. INTERPRETATION OF SPECIAL TAX FORMULA The City may interpret, clarify, and revise this RMA to correct any inconsistency, vagueness, or ambiguity, by resolution and/or ordinance, that does not create a material adverse effect on the levy and collection of the Special Taxes and any security for any Bonds. CFD No (Valley Glen No. 2) 14 March 16, 2015

42 ATTACHMENT 1 City of Dixon Community Facilities District No (Valley Glen No. 2) Identification of Expected Land Uses in Initial CFD Boundaries and Future Annexation Area

43

44 ATTACHMENT 2 City of Dixon Community Facilities District No (Valley Glen No. 2) Expected Land Uses and Expected Maximum Special Tax Revenue REFLECTS LAND USES FROM ANNEXATION #1 Land Use Expected Units/Acres Estimated Maximum Special Tax (FY ) * Expected Maximum Special Tax Revenue (FY ) * SFD Lots, > 10,000 sqft 5 Residential Units $2,500 per Residential Unit $12,500 SFD Lots, > 7,000 sqft and < 10,000 sqft 43 Residential Units $2,325 per Residential Unit $99,975 SFD Lots, < 7,000 sqft 62 Residential Units $2,150 per Residential Unit $133,300 Other Property 0 Acres $16,715 per Acre $0 Total 106 Units/ 0 Acres N/A $245,775 * On July 1, 2016 and each July 1 thereafter, the Estimated Maximum Special Tax and the Expected Maximum Special Tax Revenue shall be increased by two percent (2%) of the amount in effect in the prior Fiscal Year.

45 APPENDIX D Boundary Map of Community Facilities District No

46 > ~ VIClNITY MAP ~- 11<-0)-017 f'ufur( ~,,,._03"_= -, "--G-o:t::J "._O~ 11'-0l-1H'J ,--- t = $OIIl :',, / --,>-:;>-- - =_ltl[/ ~~MEoI I / // I I,/'-',k[ / $" ;//"Ii?'" ' -, :I.. u.. (.'n J'~ /.t-i!' )\,- /;/,,~ '< t( "-\..(,i'" / " «..:j ) "'..l>.c.' //~ / I / ( / (,(" I~_...J '-, I '" I _.- +, i 1 I 1- :C,! -, ~ i,,-.~- -.--~J.. Ct.liRK'S MAP FlUNG S-rAmr.mNT ~ F'UO.. THII OfPlOX or TN[ on' a.d!i( III THII CIIT Of man. $'!&It Of e.our-. 11<1$ _0I<'r., ~.. ~ 0 >n '"cj ~ ~ tii'f ~- DI' OOOON, SD.1C Of Cltf"QIIW. 0 '"cj 0..\JfiNT CLERK'S MAP STATP r:jl, MOIQIJ conrr lmt I)C _...,.. _ PI!QPO$(~ ~ II'JI.OO'oIIts Of ertr Of 0_ o:jiii~ ~.oc..om II$1IICf!II), aoi>1 (\OIo,I, T ClDo ) errr \If ~ QlI.IIom' Of $CUNO, Cl Sn.1C Of ~ ~T A..:thtIG n.cte:or. one (/If TH[ _ DoIoY ~ lg,!t.... IT$ ~IfIlOIt..o. 0::1 0 ~.. Cl (""fif' 'l:of'~ - ~,~- :> ~ ~ - r:jl ~ 0::1 0 >n,., ~ruddrder~stat~~ ~M ~'.IOO5,III'IO[_ar eb.oci:_"''' (j OF.r5 OF ~,.. _ rjoc:ulg ~ :> 111_ c:#net CI' _ c:di.oii'i' _ett II 1'1< eauntf01 >n 5(UIl(l.Sl'oUtOf~ 0 ~ ~ CI:lU~I'I'~ Cl ~~~ MAP OF PROPOSED BOUNDARIES OF CITY OF DIXON COMMUNITY FACIUTIES DISTRICT NO (VALLEY GLEN NO.2) ~ -~ COlINTO' Ol' SOIJ\NC). ~T.\1'1'.(lt'C.M~I'OI'INI'\ ~ CITY(JOI'IliXO~ _'C!!!5!5l~-f!~. e~...s.=:, " 0 '... 4'..."'" Sheet 1 of 1,:,0,1\\' Z 0 Z ~ ~ :>

47 APPENDIX E Assessor s Parcel Maps for Fiscal Year

48