A Guide for Prospective and New Home Owners of Plan C Developments

Includes information regarding:
CFD 97-1
CFD 98-1
CFD 98-3
LD 98-2

What You Should Know About Special Taxes, Assessments and Charges

Prepared by: City of Tracy Finance Department

Overview of Community Facilities Districts

When property is within the boundaries of a Community Facilities District (CFD) it is subject to an annual authorized maximum special tax that can be levied on the property. These special taxes are used to service bonds that have been issued or to provide direct funding for development of public facilities.

How is a CFD formed?
A CFD is formed by the City Council or other public agency and must be approved by a two-thirds vote of the property owners (for land with less than 12 registered voters) or by a two-thirds vote of the registered voters within the district if there are 12 or more registered voters.

Why were CFD 98-1, CFD 98-3 and CFD 97-1 formed?
Plan C includes 6,200 homes. The first of these homes began construction in 1998. Two Community Facilities Districts (CFD 98-1 and CDF 98-3) have been formed to issue Mello-Roos bonds to pay for sewer and water improvements. In addition, CFD 97-1 has been formed by Tracy Unified School District to pay for schools but no bonds will be issued.

How are CFD taxes paid?
CFD taxes appear as a separate line item on a homeowner's property tax bill prepared by the County. These taxes are paid at the same time and manner as property taxes in two installments each fiscal year (the first being delinquent after December 10 and the second installment delinquent after April 10). Homeowners paying property taxes via impound accounts with their mortgage companies should alert their mortgage companies to include the amount of CFD taxes and other assessments in the impounds in addition to the standard property taxes.

For How Many Years Will CFD Taxes Be Levied?
The amount of special tax, authorized bonds (if any), and expected number of years the tax will be levied , varies from one CFD to another. It is important to note the specifics of the districts in place for Plan C homes. A discussion of each CFD and special district appears in this brochure.

Can CFD taxes be paid off?
Yes, but the amount must be officially calculated. A property owner may pay this amount and the CFD lien on the property will be canceled.

CFD 98-1

Most homes in Plan C are a part of CFD 98-1. The maximum special tax for a home in CFD 98-1 is $1,000 per year for zone 1 (Edgewood Estates) and $1,080 per year for zone 2 (all other areas). Both zones are subject to an annual increase of 2%. A total of $63,100,000 in bonds have been authorized for issuance in CFD 98-1. It is anticipated that these bonds will be issued in separate series over time as development in Plan C progresses. Therefore, until the last bond series has been issued, it is not possible to provide a final year that CFD 98-1 taxes will expire.

CFD 98-3

This district covers 268 lots (out of 356) in the Westgate subdivision and 120 lots (out of 188) in the Huntington Park subdivision. It is expected the CFD 98-3 homes will be the first to be built within these subdivisions. The remaining lots in these subdivisions are in CFD 98-1. The maximum annual tax in CFD 98-3 per home is $900. This is fixed and cannot be increased. The amount of bonds authorized to be issued in CFD 98-3 is $4,500,000. The tax will be levied until the bonds are paid off which is anticipated to be in 2024.

CFD 97-1

CFD 97-1 has been formed by Tracy Unified School District to pay for schools however, no bonds will be issued. CFD 97-1 covers most Plan C developments and is in addition to either CFD 98-1 or CFD 98-3. The required CFD 97-1 amount may be paid in one lump sum in the amount of $9,702 when paid at issuance of building permit or $10,076 when paid at escrow. A third option is to pay $6,327 at the close of escrow plus payment of annual special taxes in the amount of $897 per year for a period of seven years. It is important that prospective homeowners understand that generally the up front payments are included in the sales price of the home, whereas, payments of annual special taxes will become the responsibility of the homeowner.

LD 98-2

Landscaping District (LD) 98-2 also covers most Plan C developments. This district was formed to provide annual funding to pay for the care and maintenance of landscaping improvements in Plan C including, but not limited to, those associated with arterial roadways, parkways, tract perimeters, entryways and small parks. There are no bonds issued for LD 98-2. Properties are simply levied an annual charge as a separate line item on the property tax bill. The initial (beginning in FY 98-99) maximum charge varies by zone with the average being $100 per single family home. This charge as well as an annual inflation adjustment of a maximum of 3% was approved by voters of the district. A property owner cannot pay off any lump sum amount for LD 98-2. This annual charge and inflationary adjustment will continue indefinitely. Each year the City Council reviews and approves the annual assessments based on the estimated cost to maintain the improvements. The charge cannot be increased beyond the maximum inflation adjustment without a majority approval of the property owners.

Comparing CFD Taxes in Plan C to Other Areas in Tracy

Since the late 1980s, many new homes have been constructed in Tracy. The City has used planning areas to guide the development of this growth. Each planning area has unique financing arrangements to cover the cost of providing necessary public infrastructure for the new housing.

Planning areas within Tracy City limits currently under way include:

• The Residential Specific Plan (RSP)
• The I-205 Specific Plan
• Tracy Hills
• Plan C

Residential Specific Plan (RSP)

The RSP covers approximately 7,200 homes. The first homes were begun in 1988 and about 85% have been constructed. Schools in the RSP were financed by creating Community Facilities District (CFD) 87-1 and issuing Mello-Roos bonds for their construction. Sewer and water plant expansions were financed by forming Assessment Districts (AD) 84-1 (sewer) and 87-3 (water) and issuing bonds. Roads, parks, drainage systems and government buildings are financed with development impact fees paid by the builder and collected as each building permit is issued. RSP homes also participate in Landscape District (LD) 88-01 for annual maintenance expenses of street landscaping and mini parks located throughout the RSP.

A typical home in the RSP pays Mello-Roos taxes of about $550 per year for CFD 87-1 bonds, $300 per year for AD 84-1 and AD 87-3 bonds and about $100 LD 88-01. This is a total of approximately $950 per year which is in addition to the standard property tax of one percent of the value of the home. The CFD 87-1 tax is expected to drop in future years.

I-205 Specific Plan

Homes in the I-205 Specific Plan have also financed infrastructure. There are approximately 1200 units scheduled to be built in the I-205 Developments of Woodfield Estates, Pheasant Run, Bridle Creek, Laurel Brook, Heartland, and Meadow Wood. The I-205 Specific Plan homes are in a variety of assessment districts which were formed to issue bonds to pay for all city infrastructure including sewer and water improvements. Schools were financed by the developer paying a cash fee (or cash payoff of CFD 97-1) with each building permit issued. These homes are also in Landscaping District 88-01.

Homes in the I-205 developments pay from $800 to $1200 per year in assessment district levies plus approximately $100 per year for LD 88-01. A separate and detailed brochure has been prepared for each I-205 assessment district and is available at the Finance Department of the City of Tracy.

Tracy Hills

The financing plan for Tracy Hills is anticipated to be finalized in 1999. Homes in Tracy Hills will likely also be subject to special taxes and assessments. This area will include 5,500 homes.

Additional Information and Questions

How will other Plan C infrastructure be financed?
Remaining city infrastructure of roads, drainage systems, government buildings and parks will be constructed over time as cash fees are collected with each building permit issued in Plan C. There are no taxes or assessments levied on the property to build these facilities.

Are there exceptions to the various Plan C extra taxes or assessments?
Yes, there are a number of exceptions and variations. It is estimated that at the build-out of the Residential Specific Plan there will be approximately 680 to 1000 units of excess sewer and water plant capacity. This excess capacity can be transferred to certain lots in Plan C developments. As sewer and water capacity for these homes has already been paid through the acquisition of excess capacity, these homes will not be subject to CFD 98-1 (remember CFD 98-1 was formed to pay for sewer and water improvements). The following developments currently have excess RSP capacity that has been transferred. The number of transferred capacity units is also listed.

Alden Meadow 159 units Larkspur Estates 120 units Glenbriar 340 units Pebblebrook 100 units A buyer considering purchasing a home within these developments should be advised by the developer if the home being considered is a unit which has received excess RSP capacity. Such a home will not be subject to CFD 98-1, whereas other units within these developments will be subject to these taxes.

All homes in the Glenbriar and Pebblebrook subdivisions are not in CFD 97-1 for schools but rather a long standing CFD (87-1) used to build schools. The current CFD 87-1 payoff amount is about half of that of CFD 97-1 (the CFD 97-1 payoff amount also includes the developer fee of $2.05 per square foot whereas this fee is paid with building permit in CFD 87-1). A home buyer in adjacent Glenbriar should inquire if the builder has paid off CFD 87-1 or whether the homeowner will be responsible to assume the annual special tax (approximately $400 per year).

308 homes (out of 661) in the Eastlake subdivision are currently required to cash fund water and sewer improvements and therefore are not in CFD 98-1 or CFD 98-3. In addition, all homes in Eastlake are not in the Landscape District 98-2 and will not be subject to this annual charge. Homes in this subdivision are in a homeowner's association which will collect a charge for the care and maintenance of various landscaping and facilities within this development. The Edgewood Estates development is in the Jefferson School District. Therefore, its CFD 97-1 obligation only funds high school facilities with Tracy Unified School District. The CFD 97-1 obligation for Edgewood is $3,200 per home paid at time of building permit, or $3,473 at close of escrow, or $1,380 at close of escrow with $350 per year in special taxes due each year for 7 years. By separate agreement with Jefferson School District, the builder will be required to pay in cash $6665 per home to the Jefferson district.

For Additional Information About Plan C Taxes and Assessments

The title report for any property will list any applicable special districts. All buyers should discuss with the developer or seller the status of the property as it relates to being within any special district and the resulting annual tax load and lien against the property. Sellers of property within a Mello-Roos District (CFD) are required by law to provide specific disclosure in this regard.

Prepayment and other tax information may also be obtained from MBIA Munifinancial Services at (800) 755-6864.

Information concerning school financing and construction can be obtained by calling the Facilities Development Department of the Tracy Unified School District at (209) 831-5032.

Additional information is also available from the City of Tracy Finance Department at (209) 831-4120.

This guide has been prepared for general information purposes only. The City of Tracy does not represent that this guide satisfies any disclosure obligations imposed by the laws of the State of California with respect to the matters discussed herein.

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A Guide for Prospective and New Home Owners of the Presidio Planning Area

Lourence Ranch/Standard Pacific
Country Vista/Bright Development

Includes information regarding:

CFD 2000-01
plus
CFD 97-1
LLD 98-2

What You Should Know About Special Taxes, Assessments and Charges

Prepared by: City of Tracy Finance Department

Overview of Community Facilities Districts

When property is within the boundaries of a Community Facilities District (CFD) it is subject to an annual authorized maximum special tax that can be levied on the property. These special taxes are used to service bonds that have been issued or to provide direct funding for development of public facilities.

How is a CFD formed?
A CFD is formed by the City Council or other public agency and must be approved by a two thirds vote of the property owners (for an area with less than 12 registered voters) or by a two-thirds vote of the registered voters within the district if there are 12 or more registered voters.

Why were CFD 2000-01 and CFD 97-1 formed?
The Presidio Planning Area is planned for 550 homes. The first of these homes began construction in 2001. CFD 2000-01 was formed to issue Mello-Roos bonds to pay for sewer, water and drainage improvements. In addition, CFD 97-1 has been formed by Tracy Unified School District to pay for schools but no bonds will be issued.

How are CFD taxes paid?
CFD taxes appear as a separate line item on a homeowner's property tax bill prepared by the County. These taxes are paid at the same time and manner as property taxes in two installments each fiscal year (the first being delinquent after December 10 and the second installment delinquent after April 10). Homeowners paying property taxes via impound accounts with their mortgage companies should alert their mortgage companies to include the amount of CFD taxes and other assessments in the impounds in addition to the standard property taxes.

Can CFD taxes be paid off?
Yes, but the amount must be officially calculated. A property owner may pay this amount and the CFD lien on the property will be canceled.

Are CFD taxes deductible for income tax purposes?
The Internal Revenue Service has never made clear the tax deductibility of CFD taxes and therefore, the City cannot represent that CFD taxes should be claimed as a deduction. Many homeowners do however, view CFD taxes as additional property related taxes and therefore claim the CFD taxes as a deduction. Homeowner's should consult their tax professional for advice in this regard.

CFD 2000-01

Homes in the Presidio Planning Area are in CFD 2000-01. The maximum special tax for a home in CFD 2000-01 is $1,500 per unit. These maximum taxes were specified in the formation of the district in 2000 but each can be increased by 2% per year. The maximum tax is the same from lot to lot regardless of the size of the home. A total of $13.5 million in bonds have been authorized for issuance in CFD 2000-01. It is anticipated these bonds will be issued in two separate series. The final year that CFD 2000-01 taxes will expire will be approximately in the year 2029.

CFD 97-1

CFD 97-1 has been formed by the Tracy Unified School District to pay for school construction but no bonds will be issued. The Presidio Planning Area is also within CFD 97-1. The required CFD 97-1 amount may be paid in one lump sum in the amount of $9,702 when paid at issuance of building permit or $10,076 when paid at escrow. A third option is to pay $6,327 at close of escrow plus payment of annual special taxes in the amount of $897 per year. These amounts may be adjusted in future years.

It is important prospective homeowners understand that generally the up front CFD 97-1 payments are included in the sales price of the home, whereas, payments of annual special taxes will become the responsibility of the homeowner. Inquiry should be made of the developer/seller how the CFD 97-1 school amount was or is to be satisfied. If the CFD 97-1 amount has been paid in full, a homeowner may desire to insure the property title has been cleared of this obligation.

LLD 98-2

The Presidio Planning Area is also included in Lighting and Landscaping District (LLD) 98-2. This district was formed to provide annual funding to pay for the care and maintenance of landscaping improvements including, but not limited to, those associated with arterial roadways, parkways, tract perimeters, entryways and small parks. There are no bonds issued for LLD 98-2. Properties are simply levied an annual charge as a separate line item on the property tax bill. The exact charge varies by zone but has been approximately $100 per single family home. This charge, as well as an annual inflation adjustment of 3%, was approved by voters in the district. There is no lump sum pay off amount for LLD 98-2. This annual charge plus inflationary adjustment will continue indefinitely. Each year the City Council reviews and approves the annual assessments based on the estimated cost to maintain the improvements. The charge cannot be increased beyond the maximum inflation adjustment without a majority approval of the property owners.

Comparing CFD Taxes in Presidio to Other Areas in Tracy

Most subdivisions built after 1987 in Tracy are subject to a variety of special taxes. The City has used planning areas to guide the development of this growth with each having its own unique financing arrangements to pay for necessary public infrastructure improvements.

These areas are:

• The Residential Specific Plan (RSP)
• The I-205 Specific Plan
• Plan C
• South MacArthur and Presidio Planning Areas

Special assessments and taxes in the RSP total about $800 per year. Homes in the I-205 Specific Plan pay about $1200 per year. Plan C special taxes range from about $1000 to $1200 per year. The Presidio Planning area is estimated to have approximately $1600 per year in special taxes.

For Additional Information About the Presidio Planning Area Taxes and Assessments

The title report for any property will list any applicable special districts. All buyers should discuss with the developer or seller the status of the property as it relates to being within any special district and the resulting annual tax load and lien against the property. Sellers of property within a Mello-Roos District (CFD) are required by law to provide specific disclosure in this regard.

Prepayment and other tax information may also be obtained from MBIA Munifinancial Services at (800) 755-6864. Please have your Assessor's Parcel Number (APN) available when calling.

Information concerning school financing and construction can be obtained by calling the Facilities Development Department of the Tracy Unified School District at (209) 831-5032.

Additional information is also available from the City of Tracy Finance Department at (209) 831-4120.

Please note that only the amount of special taxes and charges for lighting and landscaping districts are determined by the City of Tracy. Assessed value and other general property tax matters are determined by the San Joaquin County Assessor.

This guide has been prepared for general information purposes only. The City of Tracy does not represent that this guide satisfies any disclosure obligations imposed by the laws of the State of California with respect to the matters discussed herein.

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A Guide for Prospective and New Home Owners of the South MacArthur Planning Area

Elissagaray Ranch/Suncrest Homes
Country Vista/Bright Development

Includes information regarding:

CFD 99-2
plus
CFD 97-1
LLD 98-2

What You Should Know About Special Taxes, Assessments and Charges

Prepared by: City of Tracy Finance Department

Overview of Community Facilities Districts

When property is within the boundaries of a Community Facilities District (CFD) it is subject to an annual authorized maximum special tax that can be levied on the property. These special taxes are used to service bonds that have been issued or to provide direct funding for development of public facilities.

How is a CFD formed?

A CFD is formed by the City Council or other public agency and must be approved by a two thirds vote of the property owners (for an area with less than 12 registered voters) or by a two-thirds vote of the registered voters within the district if there are 12 or more registered voters.

Why were CFD 99-2 and CFD 97-1 formed?

The South MacArthur Planning Area is planned for 601 homes. The first of these homes began construction in late 2000. CFD 99-2 was formed to issue Mello-Roos bonds to pay for sewer, water and drainage improvements. In addition, CFD 97-1 has been formed by Tracy Unified School District to pay for schools but no bonds will be issued.

How are CFD taxes paid?

CFD taxes appear as a separate line item on a homeowner's property tax bill prepared by the County. These taxes are paid at the same time and manner as property taxes in two installments each fiscal year (the first being delinquent after December 10 and the second installment delinquent after April 10). Homeowners paying property taxes via impound accounts with their mortgage companies should alert their mortgage companies to include the amount of CFD taxes and other assessments in the impounds in addition to the standard property taxes.

Can CFD taxes be paid off?

Yes, but the amount must be officially calculated. A property owner may pay this amount and the CFD lien on the property will be canceled.

Are CFD taxes deductible for income tax purposes?

The Internal Revenue Service has never made clear the tax deductibility of CFD taxes and therefore, the City cannot represent that CFD taxes should be claimed as a deduction. Many homeowners do however, view CFD taxes as additional property related taxes and therefore claim the CFD taxes as a deduction. Homeowner's should consult their tax professional for advice in this regard.

CFD 99-2

Homes in the South MacArthur Planning Area are in CFD 99-2. The maximum special tax for a home in CFD 99-2 is $1,540 per unit in the Elissagaray Estates area and $1,110 in the Country Vista (Bright) development. These maximum taxes were specified in the formation of the district in 1999 but each can be increased by 2% per year. The maximum tax is the same from lot to lot within each of the developments regardless of the size of the home. A total of $11,500,000 in bonds have been authorized for issuance in CFD 99-2. It is anticipated these bonds will be issued in separate series over time as development progresses. Therefore, until the last bond series is issued, it is not possible to provide a final year that CFD 99-2 taxes will expire. This date however, will be approximately 25 years after the last bond series is issued.

CFD 97-1

CFD 97-1 has been formed by the Tracy Unified School District to pay for school construction but no bonds will be issued. The South MacArthur Planning area is also within CFD 97-1. The required CFD 97-1 amount may be paid in one lump sum in the amount of $9,702 when paid at issuance of building permit or $10,076 when paid at escrow. A third option is to pay $6,327 at close of escrow plus payment of annual special taxes in the amount of $897 per year. These amounts may be adjusted in future years.

It is important prospective homeowners understand that generally the up front CFD 97-1 payments are included in the sales price of the home, whereas, payments of annual special taxes will become the responsibility of the homeowner. Inquiry should be made of the developer/seller how the CFD 97-1 school amount was or is to be satisfied. If the CFD 97-1 amount has been paid in full, a homeowner may desire to insure the property title has been cleared of this obligation.

LLD 98-2

The South MacArthur Planning Area is also included in Lighting and Landscaping District (LLD) 98-2. This district was formed to provide annual funding to pay for the care and maintenance of landscaping improvements including, but not limited to, those associated with arterial roadways, parkways, tract perimeters, entryways and small parks. There are no bonds issued for LLD 98-2. Properties are simply levied an annual charge as a separate line item on the property tax bill. The exact charge varies by zone but has been approximately $100 per single family home. This charge, as well as an annual inflation adjustment of 3%, was approved by voters in the district. There is no lump sum pay off amount for LLD 98-2. This annual charge plus inflationary adjustment will continue indefinitely. Each year the City Council reviews and approves the annual assessments based on the estimated cost to maintain the improvements. The charge cannot be increased beyond the maximum inflation adjustment without a majority approval of the property owners.

Comparing CFD Taxes in South Macarthur to Other Areas in Tracy

Most subdivisions built after 1987 in Tracy are subject to a variety of special taxes. The City has used planning areas to guide the development of this growth with each having its own unique financing arrangements to pay for necessary public infrastructure improvements.

These areas are:

• The Residential Specific Plan (RSP)
• The I-205 Specific Plan
• Plan C
• South MacArthur and Presidio Planning Areas

Special assessments and taxes in the RSP total about $800 per year. Homes in the I-205 Specific Plan pay about $1200 per year. Plan C special taxes range from about $1000 to $1200 per year. The Presidio Planning area is estimated to have approximately $1600 per year in special taxes.

For Additional Information About the South Macarthur Planning Area Taxes and Assessments

The title report for any property will list any applicable special districts. All buyers should discuss with the developer or seller the status of the property as it relates to being within any special district and the resulting annual tax load and lien against the property. Sellers of property within a Mello-Roos District (CFD) are required by law to provide specific disclosure in this regard.

Prepayment and other tax information may also be obtained from MBIA Munifinancial Services at (800) 755-6864. Please have your Assessor's Parcel Number (APN) available when calling.

Information concerning school financing and construction can be obtained by calling the Facilities Development Department of the Tracy Unified School District at (209) 831-5032.

Additional information is also available from the City of Tracy Finance Department at (209) 831-4120.

Please note that only the amount of special taxes and charges for lighting and landscaping districts are determined by the City of Tracy. Assessed value and other general property tax matters are determined by the San Joaquin County Assessor.

This guide has been prepared for general information purposes only. The City of Tracy does not represent that this guide satisfies any disclosure obligations imposed by the laws of the State of California with respect to the matters discussed herein.