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8.B. - Page 35 Other liens for taxes and assessments may already exist on the property located within the District and others could come into existence in the future. See "SPECIAL RISK FACTORS—Parity Taxes and Special Assessments." There is no assurance that any owner of a Taxable Parcel will be financially able to pay the annual Special Taxes or that it will pay such taxes even if financially able to do so. See "SPECIAL RISK FACTORS." For historical information regarding the payment of, or delinquencies with respect to, Special Taxes in the District, see "THE DISTRICT—Special Tax Levies and Delinquencies." Special Tax Fund Deposit of Special Tax Revenues. The City is obligated by the Fiscal Agent Agreement to deposit in the Special Tax Fund held by the City, immediately upon receipt by the City, all Special Tax Revenue received by the City (except for amounts necessary to pay the Annual Administrative Expense Deposit, which will be deposited to the Administrative Expense Fund). The City will also deposit into the Special Tax Fund certain amounts transferred from the Costs of Issuance Fund and the Surplus Fund pursuant to the Fiscal Agent Agreement. Notwithstanding the foregoing, (i) in each Fiscal Year, from the first remittance of Special Taxes received from the County, the City will transfer an amount equal to that year's Annual Administrative Expense Deposit to the Administrative Expense Fund, and (ii) any proceeds of Special Tax Prepayments shall be transferred by the Director of Finance to the Fiscal Agent for deposit by the Fiscal Agent in the Series 2013 Prepayments Account established pursuant to the Fiscal Agent Agreement. "Annual Administrative Expense Deposit," as defined in the Fiscal Agent Agreement, means, in each Fiscal Year, an amount of Special Taxes initially equal to $31,706.00; increasing, commencing in Fiscal Year 2013/14 and in each Fiscal Year thereafter, by an amount equal to two percent (2%) of the Annual Administrative Expense Deposit for the previous Fiscal Year. Moneys in the Special Tax Fund will be held in trust by the City for the benefit of the Owners of the Bonds, will be disbursed as described below and, pending such disbursement, will be subject to a lien in favor of the Owners of the Bonds. Disbursements. No later than ten (10) Business Days prior to each Interest Payment Date, the City shall withdraw from the Special Tax Fund and transfer, in the following order of priority: (i) to the Fiscal Agent for deposit in the Bond Fund an amount, taking into account any amounts then on deposit in the Bond Fund such that the amount in the Bond Fund equals the principal, premium, if any, and interest due on the Bonds on the next Interest Payment Date, and (ii) to the Reserve Fund an amount such that the amount then on deposit therein is equal to the Reserve Requirement. Any remaining Special Taxes and other amounts, if any, shall remain in the Special Tax Fund until the end of the Bond Year. At the end of the Bond Year any remaining funds in the Special Tax Fund which are not required to cure a delinquency in the payment of principal and interest on then-outstanding Bonds, or to restore the Reserve Fund to the amount of the Reserve Requirement, shall, without further action by any party, be deposited in the Surplus Fund and used in accordance with the Fiscal Agent Agreement and shall be free and clear of any lien thereon or pledge under the Fiscal Agent Agreement; provided, any funds which are required to cure any delinquency described above shall be retained in the Special Tax Fund and expended or transferred, at the earliest possible date, for such purpose. Summary of Rate and Method General. The Special Tax is levied and collected according to the Rate and Method set forth in"APPENDIX B - Rate and Method." The qualified electors of the District approved the Rate and Method on July 30, 1999. The following is a brief summary of the Rate and Method. -13-