Redwood City Municipal Code § 32.801 District Established; Tax Levied

A. By the passage of Ordinance No. 2180 [adopted August 23, 1999], the Council authorizes the levy of a special tax at the rate and formula set forth in Exhibit C to Resolution No. 13611 and which for reference purposes is attached hereto as Exhibit A.

B. The Director of Finance of the City is hereby authorized and directed each fiscal year, without further action of this City Council, to determine, or cause to be determined, the specific special tax rate and amount to be levied for each parcel of real property within the District, in the manner and as provided in the Rate and Method of Apportionment attached as Exhibit A to Ordinance No. 2180. The special tax to be levied shall not exceed the maximum rates set forth in such Exhibit A, but the special tax may be levied at a lower rate.

C. Properties or entities of state, federal, or local governments shall be exempt from the above-referenced and approved special tax only to the extent set forth in Exhibit A hereto and otherwise shall be subject to tax consistent with the provisions of Section 53317.3 of the Act in effect as of the date of adoption of Ordinance No. 2180.

D. All of the collections of the special tax shall be used only as provided for in the Act and Resolution No. 13611. The special tax shall be levied only so long as needed to accomplish the purposes described in Resolution No. 13611.

E. The special tax shall be collected in the same manner as ordinary ad valorem taxes are collected and shall be subject to the same penalties and the same procedure and sale in cases of delinquency as provided for ad valorem taxes as such collection procedure may be modified by law or this Council from time to time.

F. As a cumulative remedy, bonds are outstanding, the Council may, not later than four years after the due date of the last installment of principal on the bonds, order that any delinquent special tax as levied in whole or in part for payment of the debt, together with any penalties, interest and costs accruing under this Article, be collected by an action brought in the superior court to foreclose the lien of such special tax.

G. This Article relating to the levy of the special tax shall take effect 30 days after its final passage in accordance with the provisions of Section 16 of the Charter of the City of Redwood City, and this authorization for adoption is pursuant to the provisions of Section 53340 of the Government Code.

(Ord. No. 2180, §§ 2—8, 8-23-99; Ord. No. 2394, § 2, 6-3-13)

EXHIBIT A RATE AND METHOD OF APPORTIONMENT REDWOOD SHORES COMMUNITY FACILITIES DISTRICT NO. 99-1 (SHORES TRANSPORTATION IMPROVEMENT PROJECT) OF THE CITY OF REDWOOD CITY

Section 1. Definitions.

The defined terms below shall apply wherever such terms are used in this Rate and Method of Apportionment.

"Act" means the Mello-Roos Community Facilities Act of 1982 (Chapter 2.5, Part 1, Division 2, Title 5 of the California Government Code), as amended from time to time.

"Administrative Expenses" means the actual or estimated costs incurred by the City to determine, levy and collect the Special Taxes, including salaries of City employees and the fees of consultants, corporate bond paying agents, fiscal agents and bond trustees; the costs of collecting installments of the Special Taxes; preparation and maintenance of required records and reports; preparation of financial audits; and any other costs required to administer the CFD.

"Annual Costs" means, for each Fiscal Year, the total of 1) an amount sufficient to pay Debt Service in a timely manner, 2) Administrative Expenses, and 3) any amounts needed to replenish bond reserve funds and to make up for any deficit caused by actual or estimated delinquencies in Special Taxes for the previous or current Fiscal Year.

"Annual Tax Revenues" means the amount of Special Taxes collected each Fiscal Year to pay the Annual Costs.

"Approved Commercial Parcel" means a Commercial Parcel that has been approved for commercial development by the City pursuant to a vested Development Agreement or a recorded final map approved by the City and is not a Developed Commercial Parcel.

"Approved Commercial Square Feet" means the maximum amount of commercial square feet that could be constructed on an Approved Commercial Parcel pursuant to a vested Development Agreement or a recorded final map approved by the City. If an Approved Commercial Parcel is subdivided, the City Manager may assign Approved Commercial Square Feet to successor Parcels provided that the total number of Approved Commercial Square Feet on such successor Parcels may not exceed the Approved Commercial Square Feet assigned to the predecessor Parcel.

"Auditor" means the Auditor for the County or his or her designee.

"CFD" means Redwood Shores Community Facilities District No. 99-1 (Shores Transportation Improvement Project) of the City of Redwood City.

"Classification Date" means each June 1.

"City" means the City of Redwood City, California.

"City Council" means the elected legislative body of the City.

"City Manager" means the city manager of the City.

"Commercial Parcel" means a Parcel which is designated for commercial use pursuant to the land use approved for such Parcel by the Redwood Shores Specific Plan or other land use planning document approved by the City. In the event the City has no official land use designation for a Parcel, the land use code on the secured tax rolls of the County may be used to classify such Parcel.

"County" means County of San Mateo, California.

"Coverage Factor" means a percentage rate equal to ten (10) percent.

"Debt Service" means the total amount of principal and interest due on outstanding bonds of the CFD that must be collected by the County in any Fiscal Year in order to make timely payments of principal and interest on such outstanding bonds.

"Developed Commercial Parcel" means any Commercial Parcel for which a building permit has been issued by the City.

"Developed Commercial Square Feet" means the number of square feet approved for construction as shown on a building permit that has been issued by the City for any Developed Commercial Parcel.

"Development Agreement" means a development agreement approved by the City which allows commercial development of one or more Parcels within the boundaries of the CFD.

"Fiscal Year" means the period beginning July 1 and ending the following June 30.

"Inactive Parcel" means a Parcel which is not classified as a Developed Commercial Parcel, Approved Commercial Parcel, Residential Parcel, or Public Parcel.

"Maximum Annual Special Tax Rate" means the maximum amount of Special Taxes per Approved Commercial Square Foot and Developed Commercial Square Foot that may be levied against a Taxable Parcel.

"Net Taxable Square Feet" means the total amount of Developed Commercial Square Feet and Approved Commercial Square Feet subject to taxation in any given Fiscal Year.

"Parcel" means any Parcel within the boundaries of the CFD that is identified by an Assessor's parcel number on the secured tax rolls of the County as of the January 1 lien date (or such other lien date as may be established by the Assessor) of each Fiscal Year.

"Parcel Classification" means the placement of each Parcel into its respective classification as such parcel exists each Classification Date.

"Prepaid Parcel" means any Parcel that has prepaid in full pursuant to this Rate and Method of Apportionment the Special Taxes to be levied against such Parcel in satisfaction of its pro rata share of Annual Costs.

"Principal Prepayment Amount" means the amount of unpaid outstanding bond principal and authorized but unissued bond principal allocable to each Taxable Parcel as of the date of such calculation.

"Public Parcel" means any Parcel that is, or is intended to be, publicly owned and which is normally exempt from ad valorem taxes under California law, including public streets, schools, school district administrative offices, police and fire facilities, parks, and public drainage ways, rights-of-way, landscaping, greenbelts and open space.

"Residential Parcel" means any Parcel zoned for single or multi-family residential use.

"Special Tax" or "Special Taxes" means any tax levy with respect to the CFD under the Act on Taxable Parcels.

"Special Tax Report" means the report prepared annually pursuant to Section 3 hereof.

"Tax Collection Schedule" means the document prepared by the City Manager for use by the Auditor in collecting the Special Taxes each Fiscal Year pursuant to Section 6 hereof.

"Taxable Classification Date" means the date on which a Parcel is first classified as a Taxable Parcel.

"Taxable Parcel" means any Developed Commercial Parcel or Approved Commercial Parcel which is not a Prepaid Parcel.

"Tax-Exempt Parcel" means any Parcel that is a Public Parcel or Residential Parcel. However, Taxable Parcels that are acquired by a public entity shall remain subject to the applicable Special Tax pursuant to Section 53317.4 of the Act.

Section 2. Basis of Special Tax Levy

A Special Tax under the Act applicable to each Taxable Parcel shall be levied and collected according to the tax liability determined by the City through the application of the procedures described below.

Section 3. Determination and Classification of Parcels Subject to Special Tax

Prior to the first issuance of bonds, and thereafter prior to July 1 of each Fiscal Year, the City Manager shall cause to be prepared a Special Tax Report setting forth: 1) the classification as of the Classification Date applicable for such Fiscal Year of each Parcel within the boundaries of the CFD, 2) a projected sources and uses of funds for the CFD in such Fiscal Year showing that projected Annual Tax Revenues are sufficient to pay projected Annual Costs, 3) the total number of Developed Commercial Square Feet attributable to Developed Commercial Parcels and Approved Commercial Square Feet attributable to Approved Commercial Parcels for such Fiscal Year and, in each case, the Maximum Annual Special Tax Rate applicable to such commercial square feet 4) the total number of Developed Commercial Square Feet and Approved Commercial Square Feet allocable to Prepaid Parcels, 5) the net taxable Developed Commercial Square Feet and Approved Commercial Square Feet allocable to Taxable Parcels for such Fiscal Year, 6) the Special Tax rate necessary to satisfy Annual Costs applicable to such Developed Commercial Square Feet and Approved Commercial Square Feet allocable to each Taxable Parcel for such Fiscal Year, 7) the amount of Special Taxes to be levied on each Taxable Parcel in the next ensuing Fiscal Year, 8) the annual Principal Prepayment Amount allocable to each Taxable Parcel, and 9) a Tax Collection Schedule.

Parcels shall be classified as of their status applicable in the next Fiscal Year on each Classification Date. The secured property tax roll, land use codes and plot map books maintained by the County Assessor of the County, in combination with official records maintained by the City regarding Development Agreements, recorded final maps, building permits issued, and other changes in parcel development status, will be the basis for classifying the Parcels in the CFD. If the land use code on the secured property tax roll is incorrect, the City may assign the appropriate code based on its review of the status of the property.

Commercial Parcels without Developed Commercial Square Feet or Approved Commercial Square Feet shall be classified as Inactive Parcels. Developed Commercial Parcels and Approved Commercial Parcels shall be classified as either Taxable Parcels or, if the Special Taxes for such Parcels have been prepaid, Prepaid Parcels. Residential Parcels and Public Parcels shall be classified as Tax-Exempt Parcels.

Once a Parcel is classified as a Taxable Parcel it may not be removed from such classification unless i) Special Taxes allocable to such Parcel have been prepaid pursuant to Section 7 hereof, in which case such Parcel shall be reclassified as a Prepaid Parcel, or ii) the City Manager determines that such removal shall not cause the Special Tax rate per commercial square foot on remaining Taxable Parcels to exceed their respective Maximum Annual Special Tax Rates. Once the number of Approved Commercial Square Feet and Developed Commercial Square Feet has been initially allocated to a Taxable Parcel (provided such initial allocation is not in error), such number may not be reduced unless the City Manager determines that such reduction shall not cause the Special Tax rate per commercial square foot on remaining Taxable Parcels to exceed their respective Maximum Annual Special Tax Rates. Approved Commercial Parcels may be reclassified as Developed Commercial Parcels and, if warranted, their taxable commercial square feet reduced subject to the preceding sentence.

The Special Tax shall be levied only on Taxable Parcels. The amount of the Special Tax for each Taxable Parcel shall be determined in accordance with the provisions of Section 6 hereof. Each Taxable Parcel's Special Tax for the next Fiscal Year shall be levied against such Parcel's assessor's parcel number as it was shown on the County Assessors records of Parcels in the CFD as of the prior January 1 lien date, or such other lien date established by the County Assessor.

Section 4. Termination of the Special Tax

When all of the CFD's Administrative Expenses and Debt Service obligations are satisfied and no bonds authorized for issuance by the CFD remain either unissued or outstanding, the City Council shall determine that the Special Tax shall cease to be levied. The City Council shall then direct the City Clerk to record a Notice of Cessation of Special Tax as provided by law. Notwithstanding the foregoing, in no event shall the Special Tax be levied after the Fiscal Year ending June 30, 2036.

Section 5. Maximum Annual Special Tax Rate

For each Taxable Parcel, the Maximum Annual Special Tax Rate shall be established for both Developed Commercial Square Feet and Approved Commercial Square Feet as that Maximum Annual Special Tax Rate applicable in the year in which such commercial square footage first becomes subject to taxation. The Maximum Annual Special Tax Rate applicable to particular Developed Commercial Square Feet or Approved Commercial Square Feet shall not increase after the year in which it is first so applied. A Taxable Parcel may have more than one Maximum Annual Special Tax Rate applicable to it. Maximum Annual Special Tax Rates shall be established in accordance with the following schedule.

Inactive Parcels, Prepaid Parcels and Tax-Exempt Parcels shall not be subject to the levy of Special Taxes.

Section 6. Apportionment, Levy and Selection of Special Tax Rates

A Special Tax rate per Developed Commercial Square Foot or Approved Commercial Square Foot allocable to each Taxable Parcel in the CFD shall be established annually by the City Council. The Special Tax rate or rates per Developed Commercial Square Foot or Approved Commercial Square Foot allocable to each Taxable Parcel shall then be multiplied by the Developed Commercial Square Feet or Approved Commercial Square Feet on each such Taxable Parcel to determine the Special Tax applicable to each such Taxable Parcel.

Prior to July 1 of each Fiscal Year for which Annual Costs are payable, the Special Tax rate per Developed Commercial Square Foot or Approved Commercial Square Foot allocable to each Taxable Parcel in the CFD shall be established as follows:

After each Parcel has been annually classified, the annual Special Tax and Principal Prepayment Amount for each Taxable Parcel has been calculated, and a Special Tax Report for such Fiscal Year has been approved by resolution of the City Council in July of each Fiscal Year, the City Manager shall forward a Tax Collection Schedule showing the annual Special Tax liability for each Taxable Parcel to the County Auditor, requesting that the Tax Collection Schedule be placed on the secured property tax roll for the applicable Fiscal Year. The Tax Collection Schedule shall be sent not later than August 10 or such other date required by the County Auditor for such placement.

The City shall make every effort to correctly assign the Special Tax rates and calculate the annual Special Tax liability for each Taxable Parcel and the annual Principal Prepayment Amount for each Taxable Parcel. It shall be the burden of the taxpayer to correct any errors in the determination and classification of the Parcels subject to the Special Tax and their respective Special Tax and Principal Prepayment Amount liabilities.

Section 7. Prepayment of Special Taxes

Prepayment Prior to the Initial Sale of Bonds. Prior to the sale of bonds secured by the Special Taxes, the owner of each Taxable Parcel shall have the option to prepay future Special Taxes to be levied against such Taxable Parcel with a single cash payment. The amount of such optional cash payment shall be determined as follows:

Notice shall be given by mail to each owner of Taxable Parcels within the CFD of a 30-day period prior to the initial sale of bonds within which cash payments may be made. Only cash payments in whole may be accepted in lieu of the payment of annual Special Taxes. Parcels for which the prepayment of Special Taxes in whole has been made shall be reclassified as Prepaid Parcels and shall no longer be subject to the levy of Special Taxes.

Prepayment Subsequent to the Initial Sale of Bonds. The owner of any Taxable Parcel may prepay the Special Taxes to be levied against such Parcel through the term to maturity of outstanding bonds and authorized but unissued bonds. Special Taxes may not be prepaid in part. Optional prepayment amounts for each Taxable Parcel subsequent to the sale of bonds shall be determined annually for each Fiscal Year at the same time annual Special Taxes are determined as follows.

In each Fiscal Year, the owner of a Taxable Parcel may prepay the future Special Tax obligations of such Parcel by paying in cash the sum of i) the amount of any delinquent and unpaid installments of Special Taxes levied against such Parcel, together with any penalties, interest and costs due thereon, ii) the Special Taxes levied against such Parcel in such Fiscal Year, iii) the Principal Prepayment Amount allocable to such Taxable Parcel in such Fiscal Year, iv) a prepayment premium in an amount equal to the prepayment premium required under the fiscal agent agreement to be paid on outstanding bonds to be called on the next permissible call date times the ratio that such Parcel's number of taxable commercial square feet bears to the total taxable commercial square feet in such Fiscal Year times the unpaid bond principal outstanding at the beginning of such Fiscal Year, v) a reasonable fee, fixed by the City, for the cost of administering the prepayment and the advance redemption of bonds, and vi) a credit for such Taxable Parcel's pro rata share of the reserve fund balance (if any) established under the fiscal agent agreement.

Section 8. Application of Surplus Tax Revenues

Any amounts collected in excess of Annual Costs shall be applied as stipulated in the fiscal agent agreement securing outstanding bonds of the CFD.

Section 9. Administrative Changes

The City Manager has the authority to make necessary administrative adjustments to the Rate and Method of Apportionment in order to remedy any portions of this Rate and Method of Apportionment that require clarification, provided that no such adjustment shall result in a tax levy on any Taxable Parcel in excess of the applicable Maximum Annual Special Tax Rate for such Taxable Parcel.

Any taxpayer that believes that the amount or formula of the Special Tax is in error may file a written notice with the City Manager appealing the Special Tax. Any such notice of appeal must be filed by January 1 of the fiscal year for which the Special Tax in question has been levied. The City Manager or his designee will then promptly review all such timely-filed appeals, and if necessary, meet with the appellant. If the findings of the City Manager verify that the Special Tax should be modified, a recommendation at that time will be made to the City Council and, as appropriate, the Special Tax shall be corrected and, if applicable, a refund shall be granted from such fund or account established under the fiscal agent agreement securing outstanding bonds of the CFD for which the payment of such refunds is authorized. The City Manager, in his sole discretion, may review appeals filed after the January 1 deadline, regardless of the merit of any such appeals. Under no circumstances will the City be obligated to grant refunds for a fiscal year extending beyond the fiscal year immediately preceding the fiscal year in which an appeal was filed.

Interpretations may be made by resolution of the City Council for purposes of clarifying any vagueness or ambiguity as it relates to the Special Tax or the Maximum Annual Special Tax Rates, the method of apportionment, the classification of properties, or any definition applicable to the CFD.

(Ord. No. 2180, Exh. A, 8-23-99)

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