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10/26/2020 Financed improvements may be privately owned in the specific circumstances, and subject to the conditions, set forth in the Special Tax Financing Law or the Mello -Roos Act. Services. The services eligible to be financed by a CFD (the "Services") are those identified in the Special Tax Financing Law or the Mello -Roos Act. Subject to the conditions set forth in the Special Tax Financing Law or the Mello -Roos Act, if applicable, priority for public services to be financed by a CFD shall be given to services which are (a) necessary for the public health, safety and welfare and (b) would otherwise be paid from the City's general fund. The City may finance services to be provided by another local agency if it determines the public convenience and necessity require it to do so, although the City prioritizes financing services to be provided by the City. II. Credit Quality to be Re uired of Bond Issues. Including Criteria to be Used in Evaluating the Credit Quality. It is the policy of the City to refrain from the issuance of any CFD bonds unless at the time of issuance of any CFD bonds, (i) special tax revenues from that CFD are reasonably expected to provide at least one hundred ten percent (110%) debt service coverage for each year of the term of such bonds; and (ii) such CFD establishes, and covenants to cause special taxes to be levied in an amount sufficient to maintain, for the term of such bonds (provided, however, that depletion may occur to pay debt service in the last two (2) years of such term), a reserve fund securing such bonds in an amount equaling the lowest of (i) ten percent (10%) of the original proceeds of such bonds, or (ii) the largest amount, for any bond year during the term of such bonds, of principal and interest payable on such bonds, or (iii) one hundred twenty-five percent (125%) of the average amount payable, for any bond year, of principal and interest on the outstanding bonds of such bond issue. Further, it is the policy of the City to comply with all provisions of the Mello -Roos Act including, but not limited to, Section 53345.8, as such Section may be amended from time to time. If the criteria set forth above are met, such bond issues need not be rated by nationally -recognized rating agencies. III. Steps to be Taken to Ensure that Prospective Property Purchasers are Fullu Informed About Their Tanaying Obligations. It is the goal of the City that all taxpayers residing within, or owning property within, the boundaries of a CFD heretofore or hereafter established by the City will receive the form of notice required by Section 53341.5 of the Mello -Roos Act, at the time set forth therein, as such Section may be amended from time to time. In order to comply with this goal, it is the policy of the City to provide a Section 53340.2 notice of special tax to any individual requesting such notice or any owner of property subject to a special tax levied by the City within five (5) working days of receiving a request for such notice. ATTY/RESO.0119/CC RESO LOCAL GOALS AND POLICIES FOR COMMUNITY FACILITIES DISTRICTS RESO. NO. 15899 REV: 10-21-2020 VR MUFF NO. 506 Page 3 of 4