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Fixed Route Service
200,000
180,000
160,000
140,000
120,000
100,000
80,000
60,000
40,000
20,000
174,152 175,013
176,546
103,757
23,494
55,585
71,982
79,180
FY 16/17 FY 17/18 FY 18/19 FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24 Projected Proposed
Paratransit Services
The chart below depicts the trend for Dial -A -Ride (DAR) passenger boardings from FY 2017 to FY 2022, as well as the anticipated boardings for 2023 and 2024. The chart illustrates that passenger boardings on DAR have been declining year over year since before the pandemic.
Nonetheless, the pandemic accelerated the decline in ridership. When compared to FY 19, FY 20 had a 34% decline in passenger boardings. The decline continued in FY 21, with a 77% decline in comparison to FY 20. In FY 22, the DAR system experienced a small recovery, an increase of 16% in passenger boardings when compared to FY 21. The recovery of the system has extended into FY 23 as we anticipate a 51% increase from FY 22.
For FY 23, Beaumont's paratransit system is projected to be in service for 1,910 revenue hours, 20,530 revenue miles, and 3,646 passenger boardings. This equates to 2 passengers per revenue hour and 1 passenger for every 5 revenue miles. Consistent with our fixed route system, Dial -a -Ride passenger boardings in FY 23 are approximately 41% of pre -pandemic levels.
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Dial -A -Ride Service
12,000
10,000
8,000
6,000
4,000
2,000
10,884
10,211
— 8,862
5,820
,071
2,408
3,646
4,011
FY 16/17 FY 17/18 FY 18/19 FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24 Projected Proposed
Commuter Link Service
The chart below depicts the rise and decline of passenger boardings for Beaumont Transit's commuter link services. From FY 17-19, passenger boardings increased year over year due to the expansion of service on the Commuter 120 and 125. In FY 20 the service saw the first decline in passenger boardings since its debut. This was a 4% decline when compared to FY 19.
In FY 21, the impacts of the pandemic were much more prominent, a 22% decline from FY 20.
The decline continued in FY 22, and passenger boardings fell an additional 23%.
For FY 23, Beaumont's commuter link system is projected to be in service for 7,919 revenue hours, 223,065 revenue miles, and 11,426 passenger boardings. This equates to a 9% increase in passenger boardings from FY 22. Upon review, it is evident that the Commuter Link Service showed the most resiliency during the pandemic. The service reached a low in FY 22, but the service retained 57% of its ridership from FY 19. This is the only service provided by Beaumont to retain more than 50% of its passengers throughout the pandemic.
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Commuter Service
20,000
18,000
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
12,4
11,341
18,252 17,567
3,636
10,464
11,426
12,569
FY 16/17 FY 17/18 FY 18/19 FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24 Projected Proposed
1.5 Current Fare Structure
Fixed Route
Currently, passengers pay general fare unless they qualify for a discounted fare. Discounted fares are available to seniors, persons with disabilities, veterans, or active military. Children 46" tall or under ride for $0.25 with a paying adult. The following is the current fare structure:
Fare Category
General
Base Fare Day Pass
Child (46" tall or under) Accompanied by
a paying adult. Limit 2
Senior/Disabled (60+)
$1.25
10 Ticket
Book
Monthly
Pass
$3.10
$12.50
$39.13
$0.25
N/A
N/A
N/A
$0.75
$1.90
$7.50
$24.80
Military Veterans
$0.75
$1.90
$7.50
$24.80
Deviations (Route 3 and 4)
$0.50
N/A
N/A
N/A
Active Military
Free
N/A
N/A
N/A
Paratransit Services
Fare Categories
Base Fare
10 -Ride Punch Card
One -Way
$2.00
$18.00
Companion & Child $3.00
N/A
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PCA (with ID)
No Show
Regional Express Bus Service
Fare Categories
General
Free
Free
$2.00
N/A
Base Fare
10 Ride Punch
Card
Day Pass
Monthly
Pass
$3.50
$31.50
$8.00
$75.00
Child (46" tall or under) Accompanied by
a paying adult. Limit 2
Senior/Disabled (60+)
Military Veterans
Active Military
$2.50
$2.50
$2.50
Free
$22.50
$22.50
$22.50
N/A
$6.00
$6.00
$6.00
N/A
$50.00
$50.00
$50.00
N/A
Fare Collection Systems
There are a variety of options available to passengers to pay fares. Passengers can purchase monthly passes at the Beaumont Civic Center where cash, checks and credit cards are accepted forms of payment. Onboard the bus, passengers can purchase ticket books, punch cards, and day passes from the driver using cash or check. Beaumont Transit has also partnered with Token Transit to offer an additional cashless fare payment system. With Token Transit, passengers can purchase their fare media and store it on their phone.
Incentive Programs and Ridership Promotion
Beaumont Transit actively participates in many community events throughout the calendar year, including the annual Cherry Festival parade, Trunk -or -Treat, Veteran's Expo, Stuff -the -Bus, holiday light parade and Operation Santa. The COVID-19 pandemic halted most of these events, but as of FY 22 these events have been restored.
In FY 22, Beaumont Transit applied for and received funding for a free fare promotion through the Low Carbon Transit Operations Program (LCTOP). This has allowed seniors, veterans, students and the disabled to ride free systemwide for 7 months in FY 23. This free fare promotion began in August 2022 and ended in February 2023.
In FY 23, Beaumont has been allocated funding for a discounted fare promotion through LCTOP.
This will provide discounted fares to all passengers systemwide. The planned fares will be 25 cents on fixed routes, $1.00 on commuter links and 50 cents on Dial -A -Ride. It is anticipated this promotion will last for 3 years, making it Beaumont's longest fare promotion to date.
In FY 23, Beaumont implemented Swiftly, a real-time bus tracking system that provides passengers with predictions on bus arrival times. This real-time bus tracking is accessible on a free smart phone app or via the web. This software gives passengers the ability to track the bus, view system announcements and eliminate unnecessary waiting.
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1.6 Revenue Fleet
Beaumont Transit's fleet consists of 22 vehicles, 13 of which are CNG fueled, 7 gasoline fueled, and 2 electric shuttles as shown in Tables 1.1. Four additional CNG vehicles have been ordered and should be delivered in FY 24. The CNG fueled vehicles meet the emission mitigation standards mandated by the California Air Resources Board (CARB).
Beaumont maximizes the life of vehicles in our fleet. Most of the vehicles are considered Medium Duty vehicles under Federal Transit Administration (FTA) and have a 7 -year, 200,000 - mile life expectancy'. Beaumont maintenance keeps vehicles in service longer than FTA guidelines. All vehicles meet the ADA accessibility requirements and are equipped with bike racks. Vehicle capacity ranges in size from 16 passengers to 43 passengers.
PrRIYENSIDE
RUNTY
TRANSPORTATION
COMMISSION
Bus (Motorbus) / Directly Operated
Table 1.1 - Fleetlnventory
FY 2023/24 Short Range Transit Plan
City of Beaumont
Lift and Fuel
Year Mfg. Model Seating Ramp Vehicle Type
Built Code Code Capacity Equipped Length Code
# of
Active
Vehicles
FY 2022/
23 # of
Contingency
Vehicles
FY 2022/23
Average Lifetime
Life to Date Miles Per Active
Life to Date Vehicle Miles Vehicle As Of
Vehicle Miles through Year -To -Date
Prior Year End March (e.g., March)
FY 2D21/22 FY 2022/23 FY 2022/23
2010 CMD C 5500 28 1 32 CN 248,766 249,770
2011 EDN EDN 30 1 33 GA 321,345 333,213
2016 EDN FORD E450 20 I 24 CN 76,748 92,327
2011 EDN FORD F550 30 1 33 GA 367,267 382,370
2011 EDN FORD F550 30 1 33 GA 391,185 404,084
2019 GLV GLV 28 1 33 CN 37,522 73,876
2019 GLV GLV 28 1 33 CN 41,125 81,759
2009 GMC C-5500 28 1 32 CN 196,374 203,583
2009 STR C-5500 28 1 32 CN 234,276 239,901
2010 STR C-5500 30 1 32 GA 377,870 389,805
Totals:
280 10
https://www.transitwiki.org/TransitWiki/images/6/64/Useful_Life_of_Buses.pdf 2,292,478 2,450,688
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RIVERSIDE
COUNTY
TRANSPORTATION
COMMISSION
Commuter Bus / Directly Operated
Table 1.1 - Fleet Inventory
FY 2023/24 Short Range Transit Man
City of Beaumont
Average Lifetime
# of Life to Date Miles Per Active
Active # of Life to Date Vehicle Miles Vehicle As Of
Lift and Fuel Vehicles Contingency Vehicle Miles through Year -To -Date Year Mfg. Model Seating Ramp Vehicle Type FY2022/ Vehicles Prior Year End March (e.g., March) Built Code Code Capacity Equipped Length Code 23 FY 2022/23 FY 2021122 FY 2022/23 FY 2022/23 2015 EBC XHF40 43 40 CN 85,804 91,026
2011 EDN EDN 30 1 33 CN 189,883 193,731
2018 EDN EZRlder II 30 1 32 CN 169,657 182,590
2016 EDN FORD F550 30 1 33 CN 147,731 156,075
2015 EDN XHF40 43 1 40 CN 90,332 93,978
2015 EDN XHF40 43 40 CN 81,138 87,521
2010 FRD Ford 5450 16 1 24 GA 409,304 435,411
2010 FRD Ford 0-450 16 1 24 GA 419,762 443,963
2010 FRD Ford E-450 16 1 24 GA 422,206 425,394
2019 GLV GLV 28 1 33 CN 45,317 83,768
Totals:
RIVERSIDE
COUNTY
TRANSPORTATION
COMMISSION
295 10
Demand Response / Directly Operated
2,061,134 2,193,457
Table 1.1 - Fleet Inventory
FY 2023/24 Short Range Transit Plan
City of Beaumont
Average Lifetime
# of Life to Date Miles Per Active
Active # of Life to Date Vehicle Miles Vehicle As Of
Lift and Fuel Vehicles Contingency Vehicle Miles through Year -To -Date Year Mfg. Model Seating Ramp Vehicle Type FY 2022/ Vehicles Prior Year End March (e.g., March) Built Code Code Capacity Equipped Length Code 23 FY 2022/23 FY 2021/22 FY 2022/23 FY 2022/23 2019 ZZZ EVStar
2019 ZZZ EVStar
10 10
1 25 EB 5,344 10,341
1 25 EB 2,378 13,784
Totals:
20 2
7,722 24,125
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1.7 Existing Facilities and Bus Stop Amenities
Existing Transit Facilities
Administrative services for Beaumont Transit are in downtown Beaumont at the Beaumont Civic Center, 550 E. 6th Street, Building D. It is at this location where dispatch, administrative services, and the operations yard are located. The vehicle maintenance facility is located at 550 California Ave, approximately 1 mile from the administrative building.
Customer service is provided from both the Civic Center's main building and Building D. Service is provided to walk in customers at the main building, and service is provided via phone or email from Building D.
Bus Stop Amenities
Beaumont has 23 bus shelters, 157 bus stops, and a dozen stops with benches. In FY 22, Transit Staff worked with the City of Beaumont Engineering Department to create plans to improve the Walmart Bus Stop. The Walmart location connects passengers with four agencies and is an important asset to the public transit system. In FY 18, Beaumont was allocated funding for bus stop rehabilitation through the Low Carbon Transit Operations Program (LCTOP). This funding allowed Beaumont to increase attractiveness in the growing commercial area with the anticipation of appealing to more choice riders and gaining more passengers.
For FY 24, Beaumont is requesting capital funding to develop a bus stop improvement plan as well as funding to execute the plan. This improvement plan will outline the rehabilitation or upgrades for bus stops throughout Beaumont's service area.
1.8 Existing Coordination Between Transit Agencies
Public transportation access is limited in the San Gorgonio Pass area to connect with other areas of the region. Geographically isolated from the Coachella Valley, other cities in western Riverside Short Range Transit Plan FY 24 - 26
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County, and San Bernardino County, passengers rely on Beaumont Transit, Sunline, and Riverside Transit Agency to travel between regions.
Beaumont has entered into multiple agreements with surrounding transit operators, including Banning Connect, Omnitrans, Riverside Transit Agency (RTA), and Victor Valley Transit Authority (VVTA). The 2019 interagency agreement with Banning has an added feature of a paper transfer system, reminiscent of the early 2000s.
Agreements with other agencies are focused on adding value for connecting passengers between agencies. Agreements with Omnitrans, RTA, and VVTA are similar in nature and are in effect until either Beaumont or the other agency withdraw the agreements. In summary, the following are the highlights of the agreements with these three agencies:
• Passengers presenting a Beaumont multi -use (day or month) pass can connect to any of the three agencies for free at locations where Beaumont and the other agency connect.
• Passengers presenting a multi -use pass from one of the other three agencies (day, week, or month) will receive a $1.00 discount on Beaumont's commuter service or free connection with Beaumont fixed route service, wherever the agencies connect.
The current agreement with the City of Banning, Banning Connect, began in FY 20, and is renewed annually. FY 24 will be the fourth year this agreement has been in place. The agreement is summarized below:
• In Banning city limits, Beaumont Transit may only stop at San Gorgonio Pass Hospital and have no more than 3 buses stop there in an hour.
• In Beaumont city limits, Banning Connect may only stop at Beaumont Walmart and have no more than 3 buses stop there in an hour.
• It is only at Walmart and the Hospital that passengers can connect with the other agency and shall provide a free transfer for passengers at these locations only.
Transfers are valid for one hour after the paper transfer is issued. • Each agency will accept the other's commuter multi -use pass (day or month) for a $1 discount for the other's commuter service.
1.9 Prior or Existing Studies and Plans
Beaumont completed a Comprehensive Operations Analysis (COA) in November 2020. There are three phases to implementing a five-year action plan outlined by the independent consultant. The five-year action plan includes short, mid, and long-term recommendations.
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Short-term recommendations (to be completed by June 2021) have largely been implemented.
Below is what remains to be addressed for the short-term recommendations:
• Update the City's bus stop placement policy.
Note: Beaumont plans to revise the bus stop placement policy concurrent with the Bus Stop Improvement Plan.
Mid-term recommendations (July 1, 2021, to December 31, 2022) include:
• Fare adjustment of 20% increase
• Enhance service to industrial center including Amazon and other distribution centers. o Permanent service, shuttle, or vanpool options.
• Integrate service to new operations facility on 4t"/Veile. • Build a Bus Stop Improvement plan.
Note: Beaumont plans to incorporate a fare increase July 1St, 2023. In addition, Beaumont is enhancing service to the industrial side of Beaumont with the expansion of service on the Casino Express.
Longer -term recommendation (January 1, 2023 -June 30, 2025) include:
• Expand local service to emerging residential neighborhoods. • Transition to an alternative fuel transit fleet and infrastructure.
Note: The planned changes for Route 7-2 will expand peak service into the newer residential neighborhoods, it is expected to launch July 1st, 2023. In addition, Beaumont is finalizing its Zero -Emission Bus Rollout Plan for submission this June. Beaumont will continue working with RCTC to complete a plan for implementation.
CHAPTER 2 - EXISTING SERVICE AND ROUTE PERFORMANCE
Due to the pandemic, Beaumont Transit's systemwide passenger boardings have suffered in recent years. Systemwide passenger trips for FY 21 ended with 39,201 passenger trips. This is a 69% decline in passenger trips when compared to FY 20 and an 81% decline compared to FY 19.
In FY 22, passenger boarding increased by 75% when compared to FY 21 and total boardings for the year reached 68,457. In FY 23, passenger boardings are projected to be 87,054 or about 43% of pre -pandemic levels. As we proceed in the post -pandemic environment, passenger boardings are struggling to recover. Despite the return to pre -pandemic lifestyles for most people, many riders have not returned to public transit. The chart below shows the volatility throughout the past five years, as well as projections for the current fiscal year and upcoming fiscal year.
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Systemwide Passengers
250,000
200,000
150,000
100,000
50,000
197,667
FY 17/18
203,660
127,144
FY 18/19 FY 19/20
68,457
39,201
FY 20/21 FY 21/22
87,054
95,760
FY 22/23 FY 23/24
Projected Proposed
2.1 Key Performance Indicators
Beaumont Transit monitors performance indicators throughout the year to ensure the system is performing productively and to implement corrective actions that can improve operational efficiency. Customer satisfaction is a top priority and community input, comments, complaints, and suggestions are recorded to better understand the wants and needs of our passengers.
Gathering this information is essential to help resolve complaints, and to assist in the development of future plans for our services and projects. We encourage feedback and plan to conduct satisfaction surveys throughout the upcoming year to gauge satisfaction, comfort, ease of use, reliability, and on -time performance. Our vehicle maintenance team keeps our fleet maintained through frequent preventative maintenance inspections to ensure the safety and reliability of our vehicles. In the post -pandemic environment, we are continuing to clean and sanitize the fleet regularly to encourage the return to public transit. Routine administrative policies and processes are reviewed throughout the year which includes the operation of the department, the collection of revenues, and monitoring of expenses.
In Table 2.0, Key Performance Indicators are set. There are seven discretionary indicators and one mandatory indicator. Beaumont Transit meets all but one discretionary indicator in FY 23 when calculated through the 3rd quarter. However, although these items are met at this time, historically, Beaumont Transit's major expenses come in the 4th quarter of the FY and these numbers and ratios are subject to change.
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rIVER4bE
RANT
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TRANSPORTATION
[nMMRSI4N
Table 2.0 -- Service Provider Performance Targets Report FY 2022123 Short Range Transit Plan Review
City of Beaumont
Dam Elements
FY 2012123 Plan
FY 2022123 Target
FY 2022/23
Year to Date
Through 4th Quarter
Year to Date
Performance
Scorecard
Unlinked Passenger Trips
77,022
Passenger Mlles
656,877
Total Actual vehicle Revenue Flours
18,791.0
Total Actin Vehicle Revenue Niles
381,861.0
Total Actual vehicle Miles
404,102.0
Total Opeatng Expenses
$2,731,617
Total Pager Fare Revenue
$80,000
Net Operam9 Evvenses
$2,651,617
Performance Indicators
Mandatory:
1. Firebox Reowery Ratio 10.32%1 a. 10.00% 1 13.59%� Meets Target Oieuxtlonary:
1. Operating Cost Per Revenue Naar
$145.37
c. $118.59
$131.80
Fails to Meet Target
2. Subsidy Per Passenger
$34.43
>e $2350 and c. $31.80
$22.87
Better Than Target
3. Subsidy Per Passenger Pale
$4.04
as $4.90 and t. $6.62
$4.78
Better Than Target
4. Subsidy Per !lour
$141.11
a. $89.95 and c. $121.69
$113.89
Meets Target
5. Subsidy Per Mlle
$6.94
as $4.39 and t. $5.95
$5.64
Meets Target
6_ Passengers Per Revenue MON1
4.10 a. 3.26 and ce 4.40
4.98 Better Than Target
7. Passengers Per Revenue Mile
0.20 a. 0.16 and c. 0.22
0.25 Better Than Target
Note: Must sea at least 9 o.t of 7 uacrenonary Pe roe Indh2rtus Productivity Performance Summary:
Service Provider Comments:
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2.2 SRTP Performance Report
In FY 22, when the SRTP was prepared for FY 23, Beaumont established a plan for service performance. RCTC in turn set targets for Beaumont Transit's operations to keep in mind as the FY progresses to ensure that targets are being reached.
The following table, Table 2.1, compares what current FY 23 3rd quarter to date actuals are and lists what past year actuals were. Additionally, the FY 24 plan is outlined, and targets are set by RCTC. The targets set are then applied as a scorecard wherein the plan set by the agency is evaluated. A good plan will have a scorecard of 'Meets Target' or 'Better Than Target'. Too many 'Fails to Meet Target' would mean that the plan should be reevaluated.
Beaumont Transit is struggling to regain passengers post pandemic. This is evident in Beaumont's plan and scorecard. Beaumont Transit service offerings are expanding to entice, gain, and regain passengers as we move post -pandemic. Unfortunately, until ridership recovers, the operating costs per revenue hour, mile, passenger, and subsidies are scored unfavorably compared to plan.
Iff11100511
coven
TRANSPORTATION
oo@MISION
FY 2023/24 - Table 2.1 -- SRTP Performance Report
Service Provider: City of Beaumont
All Routes
Performance Ind icata rs
FY 20219 22
End of Year
Actual
FY 2022/23
3rd Quarter
Year -to -Date
FY 2023/24
Plan
FY 2073/24 Target
Plan Performance
Scorecard (a)
Passengers
68,466
70,173
95,332
Now
Passenger HIN%
328,646
335,671
717,191
None
Revenue Hours
19,908.1
14,689.1
19,605.0
None
Total Hours
22,242.5
15,8813
21,624.0
None
Revenue Hiles
376,813.9
264,444.0
414,016.0
None
Total Miles
402,107.2
302,167.0
437,511.0
Now
Operating Casts
$2,149,467
$1,656,044
$2,993,669
None
Passenger Revenue
$233,031
$252,306
$39,025
None
Pleasure -3 Revenue
9169,000
None
1.CTOP Revenue
9129,145
Now
Operating Subsidy
51,915,531
$1,604,636
$2,554,649
None
Operating Casts Per Revenue Hour
$1.07.97
$131.85
$152.00
A. 3142.65
Fails to Meet Target
Operating Cost Per Revenue Mile
$5.70
96.53 97.23
None
Operating Casts Per Passenger
931.39
926.41
$31.40
None
Farebaa Recovery Raba
1.0.684.
1230%
11.264.
a.0.1
MCCts Target
Subsidy Per Passenger
927.98
922.87
930.90
a. 91.9.44 and <. 926.30
Fails to Meet Target
Subsidy Per Passenger Mlle
$5.83
94.76 94.12
a. 94.06 and A. 95.50
Meets Target
Subsidy Per Revenue Hour
996.22
91.13.89 9150.02
a. 906.61 and <. 913037
Fails to Meet Target
Subsidy Per Revenue Mile
$5.06
95.54 $7.11
a= $4.79 and <. 96.49
Fails to Meet Target
Pasengers PCr Rev3004 ra0ur
3.44 4.96
4.84 0.4.23 Mid A. 5.73
Meets Target
Passengers PCr Revenue Mae
5.16 0.25
0.25 0.0.21 and <. 0.29
Meets Target
a} The Plan Performance Scorecard column s the resin d mmpahng the FY 2023/24 Plan to the FY 2023/24 Primary Target Short Range Transit Plan FY 24 - 26
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2.3 SRTP Service Summary
The following reports give insight on the performance of the services offered by Beaumont Transit in FY 23 compared to the plan that was set in FY 22. Additionally, the 3rd quarter's actuals are compared to the previous year's audited information and how it all compares to the proposed plan for next FY.
The first table provided; Table 2.2 Service Summary is for all Beaumont Transit Routes.
Therefore, it is a systemwide summary of the system including both excluded and non -excluded routes.
Key points of interest:
• Systemwide ridership is expected to reach 75% of FY 20. • Farebox recovery for FY 24 is planned at 11.26% systemwide.
OFR11051151
COUNTY
TRANSPORTATION
Cam011512N
Table 2.2 -- City of Beaumont -- SRTP Service Summary
FY 2023/24 Short Range Transit Plan
All Routes
FY 2020121
Audited
FY 2021/22
Audited
FY 2022/23
Plan
FY 2022/23
3rd Qtr Retool
FY 2023/24
Plan
Fleet Characteristics
Peak -Hour FILM
_
6 10
u
12 Financial Data
Total Operating ExpCr1S3
12.516.503
12.159.567
$2,731,617
11,855.951
$2,993,669
Total Passenger Fare RCvelue
1290.429
1213.931
0252,000
5212.706
$337,174
Net 0per1Lng Expenses (Subsidies)
12.256.082
11.915.536
52.651.017
-- •::74.23,:
$2,954,644
Operating Characteristics
Unlinked Passenger Trips
35.014
68.468
77.022
IL.-.:
95,332
Passenger Mlles
166,417
328646
656,877
335,671
717,191
Total Actual Vchide Revenue Fears (a)
14,909.6
19,908.1
16,791.0
14,089-1
19,695.
Total Actual Vehicle Revenue MIIes (h)
331,663.0
376,613.9
381,861.0
284,444-0
414,016.0
Total Actual Vehicle Miles
346,130.0
402,107.2
404,102.0
302,187-0
437,5113
Performance Characteristics
Operating Lost per Revenue Hour
$170.80
$107.97
$145.37
$131.00
$152.00
Farebox Recovery Ratio
11.40%
10.86%
10.32%
13.59%
11.2696
Subsidy per Passenger
$57.83
$27.06
$34.43
$22.57
$30.99
Subsidy per Passenger Mlle
$12.10
$5.53
$4.04
$1.78
$4.12
Subsidy per Revenue Flour (a)
$151.32
$98.22
$141.L1
$113.69
$150.02
Subsidy per Revenue Mile(b)
$6.00
45.08 46.41
45.64 $7.14
Passenger per Revenue Flour (a)
26 3.4
4.1 5A
4.8 Passenger per Revenue Mle[0)
0-12
0.18 0.20
_ __
0.23 (a} Train Hours for Rail Made. (0) Car Mlks for gall Modes The previous page is a summary of all routes, and in the following tables the system is broken down further into Excluded and Non -Excluded Routes.
In FY 23, Beaumont has two routes to be excluded from the calculation of the farebox recovery ratio. These routes are the Casino Express and Commuter Link 125. Excluded Routes are new routes or routes that have recently experienced a change of 25% or greater. Being excluded gives a grace period for the route to perform and gain passenger ridership for three years.
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Table 2.2 Excluded Routes, reports only on the routes excluded. Given that there are two routes excluded in FY 23 and only one excluded in FY 24, the data will be skewed, and each column is not necessarily comparable to another FY. Details on the excluded routes for FY 24 are outlined in Table 2.2A.
OFRIVERSIDE
COUNTY
1RANSPOR ATION
COMMISSION
Table 2.2 -- City of Beaumont -- SRTP Service Summary
FY 2023/24 snort Range Transit Plan
Excluded Routes
FY 2020121
Audited
FY 2021/22
Audited
FY 2022/23
Plan
FY 2022/23
3rd Qtr Rehm!
FY 2023/24
Plan
Fleet Characteristics
Peak -Hour Fleet
2 2
Financial Data
Total Operating Expenses
$1,588,790
51,214,022
1022.162
$453,111
5305,635
Total Passenger Fare Revenue
$&4,250
1144.657
676.500
621.191
$3,900
Net Operating ExpenY1 (Subsidies)
$1,504,454
51069,365
6613,662
$304,656
Operating Characteristics
Unlinked Passenger TripS
20,606
14.731
5,326
..... .
3,250
Passenger Hiles
99,293
70,752
68.759
13,030
15,600
Total Actual vehicle Revenue Flan (a)
9,716.9
10,490 8
0,170.0
2,649.6
1,922.0
-fatal Actual Vchidc Revenue Mlles (h)
246,645.0
279,578.0
96,697.0
65,133.0
45,751.0
-fatal Actual Vehicle Miles
255,079.0
293,309.0
1.01,046.0
68,6420
46,012.0
Performance Characteristics
i
operating Lost per Revenue Hour
$163.48
$1L5.63
$149.20
$171.01
$1_59.02
Farebox Recopy Rd11D
5.31%
11.92%
12.2996
4.68%
1.14%
Subsidy per Passenger
$72.73
$72.56
$11_5.22
$146.62
$93.74
Subsidy per Passenger Mile
$13.13
$LS.12
$6.92
$51.21
$19.53
Subsidy per Revenue Maur (a)
$154.51
$102.03
$147.1.6
$163.01
$1_56.51
Subsidy per Revenue Mile (h}
$6.10
$3.52
$6.33
$6.63
$6.65
555senger per Revenue Maui (a)
2.1 1.4
1.3 1.1
1.7 Passenger per Revenue Mile (h)
0.09 0.05
0.05 0.01
0.07 (a) Train Flaws for Rail Modes. (6) Car Mlles for Rail Modes.
Short Range Transit Plan FY 24 - 26 23 1 Page
Pages 1 F1 of 7RF
�'��►U����NT
TRANSIT
Table 2.2 Non -Excluded Routes consists of the remaining routes and services Beaumont Transit offers. These non -excluded routes are services that have been established without any major changes in the last 3 years.
115RIVERsiDE
COUNTY
TRANSPORTATION
COMMISSION
Table 2.2 -- City of Beaumont -- SRTP Service Summary
FY 2023/24 Short Range Transit Plan
Non -Excluded Routes
FY 2020/21
Audited
FY 2021/22
Audited
FT 2022/23
Plan
FY 2022/23
3rd Qtr Actual
FY 2023/24
Plan
Fleet Characteristics
Peak -Hour Fleet
3 4
8 •I
11 Financial Data
Total Operating Expenses
$957,719
$935,444
$2,109,455
$1,403,833
$2,638,0134
Tatdl Passenger Fara Revenue
$206,133
$89,274
$205,500
$231,114
$333,674
Net Operating txpenscs (Subsidies)
$751,586
8846,171
$2.037.955
$1,172,719
$2,649,988
Operating Characteristics
Unlinked Passenger Trips
18,328
53,730
71.696
G:.,:.
92,082
Passenger Miles
87,124
257,904
588,118
321,873
701,591
Total Actual Vehicle Revenue Main (ay
5,191,2
9,427.3
14,621.0
11,439.5
17,7710
Taal Actual Vch ide Revenue Miles (h)
85,0180
97,235.9
284,964.0
219,311.0
368,235.0
Total Actual Vehicle Niles
91,0510
108,798.2
303,056.0
233,345.0
389,499.0
Performance Characteriati.
■
Operating Cost per Revenue Hour
$184.49
$99.23
$144.28
$122.72
$151.24
FarebOx RceWe-y Ratio
21.52%
9.54%
9.74%
16.46%
12.41%
Subsidy per Passenger
$41.01
$15.75
$28.42
$17.43
$28.78
Subsidy per Passenger Mile
$8.63
$3.28
$3.47
$3.64
$3.78
Subsidy per Revenue t4nur(a)
$144.78
$89.75
$139.39
$102.52
$149.10
Subsidy per Revenue Mile (b).
$9.84
$8.70
$7.15
$5.35
$7.20
Passenger per Revenue tour (a)
3.5 5.7
4.9 5.9
5.2 Passenger per Revenue Mile (6).
0.22 0.55
0.25 0.31
0.25 (a) Traln Haas for Ran Mod.. (b) car MIks for Rail Modes.
Short Range Transit Plan FY 24 - 26 24 1 Page
Pala 1 F7 of 7AR
l"'AU FONT
TRANSIT
Beaumont Transit's service is further broken down by dividing up the service into programs.
Beaumont Transit has two programs. One program is the BUS program which is all fixed route and commuter link services. The second program is the DAR program which is our Dial -A -Ride or paratransit program.
Table 2.2 BUS shows all routes within this program. Key notes of interest:
• Passenger Trips on the fixed and commuter links remain lower than pre -pandemic figures, but FY 23 and the plan for FY 24 show a positive trend upwards. • The farebox recovery ratio for all routes, excluding DAR, is planned at 11.51%.
Table 2.2 DAR shows the Dial A Ride or paratransit program. Key notes of interest:
• Demand response paratransit service is offered to those certified under the Americans with Disabilities Act (ADA).
• This curb -to -curb service is offered throughout city limits, and has a higher cost than the fixed route services.
• The farebox ratio for DAR is planned to be lower than the BUS program. This is primarily due to the nature of demand -response service.
• The projected farebox ratio for FY 23 has well exceeded the plan. For FY 24, it is anticipated the system will see an additional increase in the farebox recovery ratio.
Short Range Transit Plan FY 24 - 26 25 1 Page
l'AU FONT
TRANSIT
OFRIVERSIDE
GOONEY
TRANSPORTATION
COMMISSION
Table 2.2 -- Beaumont -BUS -- SRTP Service Summary
FY 2023124 Short Range Transit Plan
All Routes
FY 2020121
Audited
FY 2021/22
Audited
FY 2022123
Plan
FY 2022.123
3rd Qtr Actual
FY 2023124
Plan
Fleet Characteristics
Pn]k-'lox Fleet
_
6 9
/
10 Financial Data
Total Operating Expenses
$2386,671
$1,994,853
$2,569,579
$1,733,099
$2,601,584
TOta1 Passenger Fare Revenue
$285,299
$226,412
$275,000
$244,009
$322,650
Net 0pl ating btpenses(Subsidies)
$2,101,373
$1,768,441
02,496,579
$1,499,090
$2,764,372
Operating Characteristics
Unlinked Passenger Trips
36,940
65,977
74,562
67,340
91,525
Passenger Mlles
177,312
316,690
696,299
323,256
700,476
MIA Adua! vehicle Revenue Man (a)
14,269.9
17,232.9
17,625.0
12,662.6
17,365.3
Total Actual Vehicle Revenue Mlles (h)
317,533.0
364,174.0
368,746.0
268,994.0
390,91.6.0
Total Actual Vehicle Miles
329,776.0
387,635.0
589,097.0
284,660.0
411,270.0
Performance Characteristics
1 1
Operating Cost per Revenue Hour
$167.25
$115.76
$145.79
$136.67
$1.61..34
Farebol Recovery Ratio
11.9596
113596
10.7016
14.0646
11.5196
Subsidy per Passenger
$56.69
$26.80
$3348
$22.11
$30.20
Subsidy per Passenger Mile
$11.65
$5.58
$3.66
$4.61
$3.95
Subsidy per Revenue Maur( a)
$147.26
$102.62
$141.65
$117.60
$159.19
Subsidy per Revenue Mile{9)
$6.62
$4.66
$6.77
$5.54
$7.07
Passenger per Revenue Maur (a)
2.6 3.8
4.2 5.3
53 Passenger per Revenue Mlle On)
0.12 0.18
0.20 0.23
0.23 {a) Train Maur for Ref Mader. [6) Car Mlles for Rail Modes.
Short Range Transit Plan FY 24 - 26 26 1 Page
l'AU FONT
TRANSIT
IDVIA. DI.
Fr4s Fn R -mini,
ram,'sma
Table 22 -- Beaumont -DAR -- SRTP Service Summary
FY 2023/24 Short Range Transit Plan
All Routes
FY 2020/21
Audited
FY 2021)22
Audited
FY 2022/23
Plan
FY 2022f23
3rd Qtr Actual
FY 2023124
Plan
Fleet Characteristics
Pork .1.r I Ice..
1 1
1 L
2 Financial Data
Total Operatmg Ezpuns.
5159,839
5154.614
$162,038
$12'5,845
5192,085
Total Passenger Fare Revenue
55.130
57.519
$7,000
$8,297
419,529
Net Opciatrg Experts. (Subsidies)
5154.707
4197095
3155,036
$115,548
5190,272
Operating Characteristics
Unlink2 Passenger Trips
2,079
2,951
2,960
7,820
3,667
Pa414114 r Miles
9,105
11,957
10,578
12,915
16,713
Total Actual Vehicle Revenue Hours la)
639.7
2,675.3
1,166.0
1,426.6
2,330.0
Total Actual Vehicle Revenue Miles (3)
14,130.0
12639.9
13,115.0
15,450$
2%100.0
Total Actual Vehicle Miles
16,354.0
19,472.2
15,005.0
17,527.0
26,241.0
Performance Characteristic
Operating Lost per Revenue Hour
4249.68
$57.79
4138.97
556.61
$62.44
Parehoz Recovery Ratio
3.21%
4.8696
4.3196
6.70%
7.5696
Subsidy per Passenger
474.59
455.05
$63.02
540.06
$45.96
Subsidy per Passenger Mlle
41.6.99 412.30
414.66
59.31 411.36
Subsidy 3. Revenue hour (a)
$241.85
$59.96
4132.97
561.00
$61.66
Subsidy per Revenue Nile (179
$10.95
$11.64
$11.82
17_48
48.24 Passenger per Revenue 510ur (a)
3.2 0.9
2.1 _._
1.6 Passenger pe- Revenue Mile (b).
0.15 0.20
0.19 2.16
(a) Train Hogs for Rail t4odes. (6) Car Mlles tar Rail Modes.
Short Range Transit Plan FY 24 - 26 27 1 Page
�'��►U����NT
TRANSIT
The following table outlines the routes to be excluded from the Farebox Recovery Ratio in FY
24. The Casino Express was a new route started in FY 20 to offer express service for passengers to Casino Morongo and Desert Hills Outlets, a major employment and recreational area for the region. Due to low ridership, community input, and a COA recommendation, the route has been re -designed for FY 24 to service industrial Beaumont located south of the 1-10 and Highway 60.
This change will be further discussed in Chapter 3.
rte,
BEAUMONkT
-CAL 1 F 4 R N 1 -
Beaumont Transit
Short Range Transit Plan
FY 2023/2024
Table 2.2A Excluded Routes
BEAUI`'ONT
TRANSIT
Excluded Routes are new routes or new service extensions that are eligible for exemptions from the farebox recovery requirements Route # Mode Service Route Description Date of Exemption End (FR/DAR) Type Implementation Date
(DO/CO)
Casino
Express
FR
DO Monday -Friday: From
Walmart to Casino
Morongo and Industrial
Beaumont.
July 2023
July 2026
Short Range Transit Plan FY 24 - 26 28 1 Page
Pala 1 FR of 7AR
BFAUMONT
TRANSIT
2.4 Service Performance
Beaumont Transit operates six local fix routes, two of which are peak routes, and two commuter links. During the last quarter of FY 20, COVID-19 led to an unprecedented change to Beaumont Transit's operations, along with other public transportation agencies. Primarily, there was a noticeable decline in passenger boardings. The stay-at-home order, rising infections and near non-existent ridership made it necessary to adjust public transit services across the nation.
Prior to the pandemic, Beaumont Transit was already experiencing a decline in passenger boardings. FY 20 was the first year that the Pass Transit Agency was dissolved. Pass Transit unified the cities of Beaumont and Banning under one brand but allowed transit services to be operated by each city independently. Due to unfortunate circumstances, Beaumont and Banning split ways in FY 20 and the Pass Transit branding was disbanded and each city became responsible for their independent identity. More notably, the dissolution created an environment where passengers could no longer take a one -seat trip into the other city. Prior to FY 20, fixed routes could enter the other's city limits, but the disbandment led to the prohibition of one agency providing services in the other city. Passengers originating in Beaumont will need to transfer Banning Connect to reach social services exclusively offered in the City of Banning. The FY 20 Interagency Agreement is renewed annually.
Due to the inability to traverse city boundaries, Beaumont has been unable to capture the passenger boardings from Banning. In FY 20 statistics, the impact is evident prior to the effects of the pandemic in the 4th quarter. This is an important notation when reviewing the statistics for each route in the coming section. For this reason, statistics compared to FY 19 and before should be acknowledged that service during that timeframe extended into the City of Banning and allowed passengers to seek social service and county aid without the need to transfer buses. This transfer requirement is a major reason for the decline in passenger boardings in FY 20, besides the pandemic. Due to the inconvenience and additional time required to transfer, it is believed that some passengers have found other ways of getting to and from their appointments.
Beaumont has been thoroughly evaluating ridership data and route performance throughout the pandemic and currently ridership has recovered to 44% of pre -pandemic levels. Proactively, Beaumont has created an action plan to help promote an increase in ridership among the Casino Express, Commuter 125, Route 7, and Route 3. These changes incorporate an increase in service frequency, the modification of timepoints, or the addition of bus stop locations. This plan is reflective of Beaumont Transit's goals to increase operational efficiency, increase revenues, meet farebox ratio compliance standards, and improve upon our provided services to the community.
Short Range Transit Plan FY 24 - 26 29 1 Page
Pala 1 R7 of 7RR
�'��►U����NT
TRANSIT
Fixed Route Service
The following chart compares the total passenger trips by route and by year for the local fixed route.
The chart below shows the trend of passenger boardings for each fixed route over the last five years including a projection for FY 23. Passenger boardings began to decline in FY 20 and experienced a sharp decline in FY 21. Passenger boardings began to recover in FY 22, and recovery has continued into FY 23.
It is worth noting that the Casino Express began service in FY 21 and has not established ridership.
In addition, Route 3/4 was put into service as a combination route during most of FY 21 when Routes 3 and 4 were suspended due to the pandemic. This accounts for the increase in passenger boardings for the 3/4.
Fixed Route
40,000
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0 FY 18 FY 19
FY 20 FY 21
FY 22 FY 23 Projection
Casino Express Route 3 Route 4 Route 7 Route 9 Route 3/4 Short Range Transit Plan FY 24 - 26 30 1 Page
Pala 1 FR of 7RR
�'��►U����NT
TRANSIT
Casino Express
The Casino Express is a weekday service that began in August 2020 as an express service from Beaumont Walmart to Casino Morongo and the Desert Hills Outlets. These destinations are major employers and recreational centers for the area.
Casino Express
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0 4,025
2,645
2,194
FY 21 FY 22 FY 23 Projection
Passenger Boardings
In its inaugural year, the Casino Express had 4,025 passenger boardings. There has been a declining trend in ridership year -over -year since inauguration. FY 23 is projected to end with a decline in passengers boardings of 20% compared to FY 22. The Casino Express currently makes up 2.22% of passengers systemwide. The Casino Express is the only fixed route with a projected decline in passenger boardings for FY 23 when compared to FY 22. Due to this, the route is anticipated to be restructured in FY 24, these changes will be further discussed in Chapter 3.
Short Range Transit Plan FY 24 - 26 31 1 Page
Pala 1 RQ of 7AR
Beaumont I Casino Morongo I Outlet Mall
WEEKDAY SERVICE 1 No Service on Holidays
TRANSFER TIME POINT
8th Street
BEAUMONT WALMART
Beaumont: 3, 4,
Commuter Links 120 & 125
Banning: 1, 5 & 6
El
Walmart
RTA: 31
Highland Springs Ave
SAN GORGONIO HOSPITAL
3 I Beaumont: 3 8t 4
SAN GORGONIO
OU TS
Banning: 1, 5 & 6
-79
2 MORC MGO
Route 3
Route 3 operates weekdays with a one -hour headway and services the north area of Beaumont, residential community of Sundance, and Walmart. This route connects passengers with Sundance community, both middle schools, the community center, the high school, and three elementary schools. For six months, service on Route 3 was suspended because of the pandemic. The suspension began in April 2020 (FY 20) and ended in October 2020 (FY 21).
Route 3 returned to pre -pandemic service level in FY 22 and has continued to provide this level of service in FY 23.
Short Range Transit Plan FY 24 - 26 32 1 Page
Pane 1 Rfl of 7RR
l'AU FONT
TRANSIT
Route 3
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0 29,566
FY 17 FY 18
26,480
25,326
19,066
FY 19 FY 20
Passenger Boardings
11,275
1,927
FY 21 FY 22
13,642
FY 23
Projection
In FY 23, Route 3 is projected to finish the fiscal year with 13,642 passenger boardings and is a 28% decline when compared to FY 20 and a 46% decline compared to FY 19. Route 3 currently makes up 15.18% of passengers systemwide.
Since this route is operating at its pre -pandemic service level, the decline in passengers can be attributed to lower youth passengers. When Beaumont Unified School District closed the last quarter of FY 20, the City of Beaumont eliminated its day -camp afterschool program at the community center. It remains closed and it is not anticipated that the program will be reinstated. A strong number of passengers on Route 3 were youth passengers that rode this route after school to the community center where the day -camp service was offered. Since this after -school program has been eliminated, many youth passengers are no longer using the public transportation service.
Short Range Transit Plan FY 24 - 26 33 1 Page
'''' AUK D N T
TRANSIT
Beaumont 1 Cherry Valley
Vineland St
Cherry Valley Blvd
its 2
Cougar Way
SOUTH SIDE OF COUGAR
WAY & BEAUMONT AVE
Beaumont: 4
fa
d
WEEKDAY SERVICE 1 No Service on Holidays
Brookside Ave
a
a ▪ ▪ Oak Valley Pkwy
6 NOBLE CREEK
APARTMENTS
Beaumont 4
REAL-TIME BUS ARRIVALS
DOWNLOAD 0 -171
transits
CEEB
3 BEAUMONT
TRANSIT
N
Starlight Dr
BEAUMONT WALMART
Beaurnont:4. Casino Express,
Banning: 1, 5 & 6
RTA: 31
Short Range Transit Plan FY 24 - 26
NORTHBOUND
SOUTHBOUND
TRANSFER POINT El
TIME POINT
SAN GORGONIO HOSPITAL
Beaumont:
4 ath Street
101
Walmart
Banning:
1r 5.and 6
0 L5
SAN GORGGKI6
Rout&1g find timetables. subject to change.
34 1 Page
�'��►U����NT
TRANSIT
Route 4
Route 4 operates on weekdays with a one -hour headway and services the downtown, commercial and residential areas of Beaumont. The residential area is largely identified as a disadvantaged community (DAC) by Senate Bill 535. This route connects passengers with the local library, two elementary schools, the community center, both middle schools, the high school, and the commercial shopping area surrounding Walmart. Route 4 also offers deviations upon request to 3 Rings Ranch, Rangel Park, and Amazon.
Route 4
30,000
25,000
20,000
15,000
10,000
5,000
0 24,691 23,657
FY 17
FY 18 FY 19
25,589
18,148
FY 20 FY 21
-Passenger Boardings
11,543
19,072
17,422
FY 22 FY 23
In FY 23, Route 4 is projected to finish the fiscal year at 19,072 passenger boardings. This is a 5% increase compared to FY 20 and a 25% decline in passenger trips compared to FY 19. This route makes up 20.05% of passengers systemwide.
Route 4 has not experienced the sharp declines that other routes have seen. There are two theories for why the impacts of the pandemic have been less significant for this route. First, the declines may be less due to the location serviced by this route. Servicing the low-income and disadvantage communities identified by SB 535, it may be that those using public transit in the area are dependent on the system. Second, in response to the interagency agreement with Banning, Beaumont Transit eliminated Route 2 which serviced Beaumont Ave and 6th Street into the City of Banning. Route 4 is now the only route that services this area and appears to have gained passengers for it.
Short Range Transit Plan FY 24 - 26 35 1 Page
Pala 1 RR of 7P.R
'''' AUK D N T
TRANSIT
4 Beaumont 1 6th Street
WEEKDAY SERVICE 1 No Service on Holidays
TRANSFER El
TIME POINT
Cherry Valley Blvd
A• G
Ring Ranch Rd
w
amazon
4th Street
BEAUMONT
TRANISFT
DEVIATION ALT. MORNING •
BEAUMONT HIGH SCHOOL
Beaumont: 3
WESTBOUND
EASTBOUND
3. Oak Valley
SAN GORGONIO
HOSPITAL
Beaumont_
3 & Casino
Express
BEAUMONT CIVIC CENTER
Beialmnont± 3,
Commuter Links 121)&125
BEAUMONT WALMART
Beaumont 3, Casino Express,
i�mmuterLinks 120 & 125
Banning: 1, 5 & 5
Short Range Transit Plan FY 24 - 26
RTA 31
Roaring and t rn€tobfes serb)ect to change
Banning:
1.5&6
ti. {i��Ix�ri.M
AUGUST 2022
36 1 Page
�'��►U����NT
TRANSIT
Route 7
Route 7 is a weekday peak hour service and follows the Beaumont Unified School District (BUSD) academic calendar. This route is designed to service passengers during the peak hours of the morning and afternoon to connect the westernmost portion of Beaumont residential areas with schools and connecting routes. The route services the masterplan communities commonly known in Beaumont as Fairway Canyon and Tournament Hills, providing transportation to both middle schools, as well as Beaumont High School.
Route 7
40,000
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0 32,374
34,479
FY 17 FY 18
31,269
19,410
FY 19 FY 20
PassengerBoardings
15,192
FY 21 FY 22
25,546
FY 23
Projection
In March of FY 20 and throughout FY 21, Route 7 was suspended with the closing of BUSD due to the stay-at-home orders arising from COVID-19. Prior to the shutdown, Route 7 was serviced by two buses and a sweeper. The Route was reinstated with its normal schedule when BUSD went back to in -person learning in August 2021.
Service on Route 7 was reduced to a single bus in October 2021. This reduction was in response to lower ridership. In FY 22, passenger boardings were down by 22% in comparison to FY 20 and 51% in comparison to FY 19. In FY 23, we have surpassed FY 20 passenger boardings, and project to end the year with 17% less boardings compared to FY 19. Currently, Route 7 accounts for 30.37% of passengers systemwide. In FY 24, Beaumont will implement changes to the sweeper. The 7-2 will still serve as a sweeper but will also provide service to additional communities.
Short Range Transit Plan FY 24 - 26 37 1 Page
Pala 1 RR of 7RR
' 'AU KDNT
TRANSIT
7-1
Tournament Hills I Fairway Canyon
TRANSFER POINT fl
TIME POINT
Palmer
w
BEN 'ONT
TRANSIT
WEEKDAY SERVICE 1 When school is in session
mar
Champions Dr
•\
Oak Valley Parkway
HIGH SCHOOL
Beaumont 3 &9
Cherry Valley Blvd 0
Brookside Ave
116
•
1 1
SOUTH SIDE OF
COUGAR WAY &
BEAUMONT AVE
1 Beaumont 3 & 9 1
C
1 MEI
REAL-TIME BUS ARRIVALS
DOWNLOAD 0
transit.
❑
ar
4 a
Short Range Transit Plan FY 24 - 26 38 1 Page
PAOP 1 RR of 7P.R
�'��►U����NT
TRANSIT
Route 9
Like Route 7, Route 9 is also a weekday peak hour service and follows the Beaumont Unified School District (BUSD) academic calendar. This route is designed to connect passengers during the morning and afternoon with the southernmost masterplan residential community commonly known as Seneca Springs with both middle schools, the high school, and connecting routes.
Route 9
16,000
14,000
12,000 10,921
10,000
8,000
6,000
4,000
2,000
0 13,831
FY 17 FY 18
11,609 11,528
8,108
FY 19 FY 20
Passenger Boardings
7,350
FY 21 FY 22
FY 23
Projection
From March of 2020 and throughout FY 21, Route 9 was suspended with the closing of BUSD due to the stay-at-home orders arising from COVID-19. The route resumed service when the school district went back into session in FY 22. The Route 9 schedule and level of service is unchanged from its pre -pandemic service.
Route 9 experienced a slight shortfall in FY 22 in comparison to FY 20. However, compared to FY 19 there was a decline of 37%. In FY 23, passenger boardings are projected to exceed FY 19 boardings by 1%. Currently, Route 9 accounts for 13.54% of passengers systemwide.
It is worth noting, since this is primarily a school route its success is contingent on middle school and high school students using the service. As students graduate and move on, there may be a fluctuation of passenger boardings year over year.
Short Range Transit Plan FY 24 - 26 39 1 Page
Pala 1 R7 of 7RR
'''' AUK D N T
TRANSIT
9 Vineland St
Seneca Springs 1 High School
Cherry Valley Blvd
101 454
HIGH SCHOOL
Beaumont: 3 &
SOUTH SIDE OF COUGAR
WAY & BEAUMONT AVE
Beaumont: 3, and 1
WEEKDAY SERVICE 1 When school is in session
ORCHARD PARK APT.
Beaumont:4
PENN. AVE &
8TH STREET
Beaumont 4
L
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Short Range Transit Plan FY 24 - 26
Cougar Way
N
TRANSFER POINT fl
TIME POINT
BEAUMONT WALMART
Beaumont: 3. 4, Casino Express,
Commuter Links 120 & 125
Banning: 1, 5 816
RTA: 31
3 101
Walmart
REAL-TIME BUS ARRIVALS
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Route 3/4
Route 3/4 is a one -hour headway service provided on Saturdays and on recognized limited - service holidays. This route is a combination of the weekday service areas of Route 3 and Route 4 and connects the downtown residential areas with places of interest such as the local library, the community center, several churches, schools, the downtown area, and the commercial area of Walmart.
Route 3/4
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0 2,739 2,813
2,447
FY 17 FY 18
6,712
FY 19 FY 20
-Passenger Boardings
5,999
1,701
2,208
FY 21 FY 22 Proj FY 23 Proj
The Route 3/4, prior to March 2020, was a weekend route operating on Saturday and Sunday.
For 6 -months, the last quarter of FY 20 and the first quarter of FY 21, Sunday service was suspended, and the route took the place of Route 3 and Route 4 on weekdays. Operating 6 days a week, Route 3/4 continued to offer service during the pandemic. This resulted in an upswing of passenger boardings in FY 20 and FY 21 when compared to previous years. In FY 22, Routes 3 and 4 went back into service and Route 3/4 became a Saturday service.
In FY 23, Route 3/4 is projected to have 2,208 passenger boardings. FY 23 will not be compared to FY 20 and 21 because the level of service was significantly more than prior to the pandemic.
Instead, compared to FY 19, FY 23 is projected to be a 22% decline. Compared to FY 18, it is a 19% decrease. The decline is attributable to the decline in the service offered. Where service was offered on both Saturday and Sunday prior to the pandemic, it is now only a Saturday service. Route 3/4 accounts for 2.16% of passengers systemwide.
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3/4
Vineland St
1 Downtown Beaumont 1 Cherry Valley
SATURDAY SERVICE Limited Holiday Service
NORTHBOUND
SOUTHBOUND
Cherry Valley Blvd
TRANSFER POINT El
TIME POINT
Brookside Ave
SAN GORGONIO HOSPITAL
BEAUMONT CIVIC CENTER
Beaumont: Commuter Link 120
Banning: 1 & Combo 5}6
BEAUMONT WALMART
Beaumont: Commuter Link 120
Banning: 1 & Combo 5)6
N BEAUMONT
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RTA: 31
4 o.
CA
2 2
Routing orrd timetables subject to change.
OCTOBER 2020
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Commuter Link 120
The Commuter Link (CL) 120 provides service Monday through Friday via two buses and has approximately a 45 -minute headway from Beaumont to San Bernardino Transit Center (SBTC).
The CL 120 transports passengers from the Beaumont Walmart and Beaumont Civic Center to SBTC. CL 120 operates on Saturdays and on recognized limited -service holidays. On Saturday schedules, the CL 120 extends service and connects passengers to Casino Morongo and the Desert Hills Outlets via the 1-10 freeway.
Commuter Link 120
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0 11,341
FY 17
13,720
12,443 12,309
FY 18 FY 19
8,816
8,642
FY 20 FY 21
Passenger Boardings
9,780
FY 22 FY 23
During the last quarter of FY 20 (March 2020), the CL 120 passenger boardings dropped from an average of 101 passengers a day to 32. Due to the pandemic, and in response to the decline in passengers, service hours on CL 120 were reduced. Additionally, due to the pause in service on CL 125, one of the two CL 120 buses was transformed into a combination route, CL 120/125. In July of FY 22 the CL 120 resumed full service with two buses along with adjustments to the route schedule.
The projected passenger boardings for FY 23 represent a 20% decline from FY 20 and a 28% decline from FY 19. CL 120 accounts for 10.54% of passenger boardings systemwide and 84.8% of passengers using commuter link services.
The decline in passengers could be attributed to two factors. First, commuting passengers may not need to commute because they are working remotely. Second, there is an additional commuting option for Beaumont passengers to Cal State San Bernardino; Sunline's Route 10.
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120
Beaumont I SB Transit Center
WEEKDAY SERVICE No Service on Holidays
TRANSFER fl TIME POINT
SAN BERNARDINO TRANSIT CENTER
Orn nitrans: 1. 14. 1 S, 215. 290. 3C6
Metrolink
W Rialto Arne
0 3
Victor Valley Transit
RTA: 200
Mountain Transit: Sand b
BEAUMONT CIVIC CENTER
IBeaumont: 4, Commuter Links 125
CI 2
6th Street
Drop off Drily
CASINO SERVICED ON
SATURDAY AND HOLIDAYS
ONLY
3BEAUMONT
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Short Range Transit Plan FY 24 - 26
us
W
BEAUMONT WALMART
Beaumont: 3. 4, Casino Express, &
Commuter Link 125
Banning: 1, 5 St 6 I RTA: Route 31
0 1
Walmart
2nd Street
MOROHG.,
Highland 5pringsAv
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Commuter Link 125
The Commuter Link (CL) 125 provides service on weekdays from Beaumont Walmart to Redlands and Loma Linda. Originating from the Beaumont Walmart, CL 125 connects with the Redlands Transit Center, Kaiser Medical Offices, and Loma Linda Veterans Affairs Hospital.
Commuter Link 125
5,000
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0 4,532
FY 19
3,431
2,042
FY 20 FY 21
Passenger Boardings
1,822
1,646
FY 22 FY 23 Projection
Launching in FY 19, CL 125 provided the opportunity for passengers to use public transportation to medical, recreational and employment opportunities in the Redlands/Loma Linda area. At the onset of the Stay -at -Home order in March 2020, the CL 125 service was suspended. The area normally serviced by the CL 125 was now served by a combination Route 120/125. The CL 125 service was suspended for 6 months, from March 2020 to October 2020.
In FY 23, CL 125 is projected to have 1,646 passenger boardings, this is a decline of 52% passenger boardings compared to FY 20 and a 63% decline compared to FY 19. CL 125 currently accounts for 1.89% of passengers systemwide and 15.2% of passengers using commuter link services.
The decline in passenger boardings is likely attributable to the reduction in service and prolonged effects of the pandemic. A significant portion of passengers are traveling to doctor appointments at the Loma Linda VA. In response to the pandemic, passengers may be using other modes of transportation due to health concerns. The VA Hospital had also suspended in - person appointments during the height of the pandemic. Planned changes for FY 24, will be discussed in Chapter 3.
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125
Benton Rd
4 Barton Rd
Beaumont Redlands 1 Loma Linda V
WEEKDAY SERVICE No Service on Holidays
LOMA LINDA VETERANS
AFFAIRS HOSPITAL
0rnnuTrana:
R T A :
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CENTER
I0mn1Tran : Sr 15 & 1$ n 3
W Redlands Blvd
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CENTER
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Lugonia Ave
un 1fl6 a
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uJ 0
N TRANSFER POINT
TIME POINT
San Bernardino Ave
BEAUMONT WALMART
Seaumonl: 3, 4, Casino Express &
Carnmuter 120
Banning: 1, 5 &.
RTA: 31
El
Walmart
2nd Street
Routing and timetables subject to change.
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Dial A Ride (Paratransit)
Beaumont Dial -A -Ride (DAR) is a reservation -based curb -to -curb, federally mandated, service for qualified passengers residing in Beaumont and parts of Cherry Valley.
In March of FY 20, qualified passengers were limited to those certified under the Americans with Disability Act (ADA). Prior to this time DAR services were offered to ADA as well as Senior (65+) passengers. Beaumont Transit honors and recognizes those passengers carrying ADA compliant identification cards from other agencies such as RTA and Omnitrans.
Dial -A -Ride
12,000
10,000
8,000
6,000
4,000
2,000
0 10,884
10,211
FY 17 FY 18
8,862
5,820
FY 19 FY 20
Passenger Boardings
2,071
2,408
FY 21 FY 22
3,646
FY 23
Projection
In FY 23, DAR is projected to finish the fiscal year with 3,646 passenger boardings and is a 51% increase compared to FY 22. When comparing FY 23 to FY 20 and prior fiscal years it is important to consider that service was extended to senior passengers at the time. It is evident that offering service only to ADA passengers has contributed to the projected shortfall of 59% in passenger boardings for FY 23 when compared to FY 19. DAR currently accounts for 4.13% of passengers systemwide.
The following tables provide key statistics for the planned services in FY 24. The information is broken down by route to better understand the individual operational impact. The line item "BEA-1" is the established budget for the administrative and vehicle maintenance departments.
These expenses are external to the individual routes and account for the costs of doing business including salaries, utilities, office supplies, etc.
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Table 2.3 - SRTP Route Statistics
Clty of Beaumont -- 2
FY 2923124
All Routes
Route • Day Type
Peal, Passenger Revenue Total Revenue Tod 1perratlrq Passenger Measure -8 ILTOP Vehicles Passengers Mlles Nour. *bur. Mike 1411e. Cart Revenue Revenue Revenue BEA-1 ABDays
BBA-229 611 Bays
BEA.125 weekly
BEA-3 Weekday
BEA-3/4 Se1sile,
BEA4 Weepy
BEA-7 Weepy
BEA-D Weepy
BEACExp Weepy
BEAAAR 68 Days
1 2
12 $652,516 $16,000
9,995 279,660 6,058 5,595 176,595 169,262 $580,951 93,633 $89,500 $23,167 1,926 38,520 2,108 2,393 73,908 75,688 $121,575 $991 579,506 $1,009 14,912 71,577 2,659 2,903 33,449 35,535 5171,056 53, L50 $0 518,953 1,850 5,860 452 572 6,480 7,075 596,148 $675 $0 51,875
20,683 99,276 2,926 3,125 33,399 35,485 $232,164 $3,300 $0 519,750 26,884 129,093 725 1,111 12,616 16,389 5134,447 $3,370 50 533,165 12,025 57,720 455 545 6,685 9,622 557,062 52,914 $9 519,998 3,250 L5,600 1,922 2,232 45,781 48,012 5305,635 $979 93 52,521 3,807 16,713 2,330 2,198 23,100 26,245 $192,085 51,613 03 112,711 95,332 717,151 19,695 21,674 414,016 432,511 52,996,669 039,025 4169,000 9139,146 Short Range Transit Plan FY 24 - 26 48 1 Page
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OTI (MTV
roAERSIOF1A3109
MMISSION
Performance Indicators
rabic 2.3 - SRTP Route Statistics
City, of Beaumont -- 2
FY 2023/24
All Routes
Operating Operating Farebea Subsidy Per Sub -tidy Per Subsidy Per Nat Cast Per Cost Per Cost Per Recovery Subsidy Per Passenger Revenue Revenue Passengers Passengers Route. Day Type Subsidy Revenue Mile Revenue Mlle Passenger Ratio Passenger Mile Hour Mile Per Hour Per Mile 3EA-L A11 Days $834,3113 2.SL%
BEA-120 All bays $577,126 $9S43 $3.25 $36.13 20.05% $57.74 32111 $94.60 13.21 1 b9 0,06 BEA-125 Weekday $420,582 3199.99 $5.74 8208.89 20.04% 821932 $10.92 $19352 95.43 0.91 0.03 BEA-3 Weekday $167,908 $64.33 $5.11 $41.47 11.75% $11.6 $235 $83.15 $502 5.61 0.45 BEA-374 SaNMay $45,471 $95.74 $7,12 924.94 5.52% $24.58 $5,12 $94.34 $7.02 3,84 0,29 BE/64 Weekday $226,984 $79.35 86.95 90023 932% $11.07 $2.31 $79.22 $6.65 7.07 0.62 BEA-7 Weekday $131,077 $145.44 $10.66 $5.00 27.17% $4.86 $1.02 $180.80 $10.39 37,08 2.13 BEA-9 Weekday $54,346 $125.41 $8.29 $4.75 31.39% $4.30 $0.94 $113.01 97.66 24.43 1.70 BPA-CEep Weekday 4304,656 $15902 $6.66 $94.04 1.14% $93.74 $19.53 $156.51 96.05 1.69 0.07 BFA-0411 All bays $190,272 $9444 $8.32 $53.46 7.56% $43.46 $11.38 $81.66 80.24 1.63 0,16 $2,954,644 $152.3 $723 $3040 11.26% $30.99 $4,12 $150.02 $7,14 4,84 0,23 Short Range Transit Plan FY 24 - 26 49 1 Page
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2.5 Productivity Improvement Efforts
Beaumont encourages participation and involvement from our passengers and the public.
Customer satisfaction is our number one priority, and we encourage the community to provide comments, suggestions, and feedback. Additionally, customer complaints are recorded and generally resolved immediately. Insights and requests that require significant service changes or changes that cannot be immediately resolved are recorded and taken into consideration at minimum annually during the development of the Short Range Transit Plan.
The pandemic resulted in the reduction of service throughout the transit industry, making it more difficult for passengers that require transfers to reach their destination. However, as routes and schedules begin to stabilize, Beaumont is monitoring and modifying its schedules in correspondence with other agencies. Metrolink, RTA, Omnitrans, and Banning Connect schedules are reviewed and changes are intended to increase connectivity and ease of use for our passengers.
Currently, Beaumont uses several products to keep passengers connected with system information and announcements. These products are Facebook, Instagram, Swiftly, Transit App and Google Transit.
As mentioned previously, a comprehensive operations analysis (COA) was completed in late 2020, when the pandemic altered the travel patterns and predictability of passengers. The findings of the study offered recommendations for a five-year action plan with three phases.
Many recommendations have already been implemented, while other recommendations are in the planning stages as we move into post -pandemic service. A more extensive discussion of the COA can be found in chapter 3 of this document.
2.6 Major Trip Generators
It is estimated that 60% of Beaumont Transit's current passengers are students. Primary travel patterns are between residential neighborhoods and the K-12 schools during peak hours in the morning and afternoon. Unfortunately, as identified in the COA, this type of service is problematic for transit operators. Operating at peak hours typically involves multiple vehicles and staff operating during a concentrated period and around the school start and end times.
School service requires a significant amount of resources for the level of service that is provided. The COA recommends Beaumont Transit incorporate the service of schools within its regular routes where possible rather than having specific peak hour service.
Earlier, in Chapter 1.2, demographics of Beaumont state that 62.5% of Beaumont's population over the age of 16 participate in the workforce. Further, the average commute to work for Beaumont residents is 35 minutes. This means that most of Beaumont's adult population drives over 30 minutes to get to work and is generally not in town for the majority of the day. As a result, Beaumont Transit identifies a need to continue to focus on regional transportation as a Short Range Transit Plan FY 24 - 26 50 1 Page
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means of sustainability. Beaumont Transit offers two commuter link services that connect passengers to regional transportation agencies. Historically, leading up to FY 20, Commuter Link 120 gained more passengers year over year than any other route.
2.7 Recent Service Changes
Beaumont Transit suspended and reorganized service on many routes late FY 20 and early FY 21 due to the pandemic. Service was still provided but accomplished through combination routes.
In FY 22 service resumed on all routes, albeit some with shortened schedules. As we move forward into the post -pandemic environment, we are continuing to increase and modify schedules to encourage the use of the public transit system once again. Below are recent service changes unrelated to the effects of the pandemic. We will discuss our planned service changes for FY 24 in Chapter 3.
Casino Express
The Casino Express began service in August 2020. It is an express service from Beaumont Walmart to Casino Morongo and the Outlet Malls. When Route 2 was dissolved, the Casino Express was created as a direct response from passengers needing transportation to their places of employment.
Commuter Link 125
In cooperation with Omnitrans, additional stops were added to the Commuter Link 125 to increase efficiency and connectivity. Additional eastbound and westbound stops at the Redlands Transit Center were added. The Redlands Transit Center connects Beaumont with Omnitrans offering connections to San Bernardino, Redlands, and Yucaipa. This eliminates the need for passengers to travel all the way to San Bernadino to transfer onto other buses that will backtrack to Yucaipa, and other locations.
CHAPTER 3 - FUTURE SERVICE PLANS, FARE CHANGES, CAPITAL
PLANNING, AND MARKETING
3.1 Planned Service Changes
The COA completed in November 2020 outlines several recommendations for service enhancements for short and long term. As previously mentioned in Chapter 1, most of these recommendations have been implemented. Beaumont Transit has identified connectivity and convenience as an issue of importance for FY 24. As we move into the post -pandemic environment, many agencies have been adjusting frequency, timepoints, and service area.
These changes have interfered with the timepoints that connect passengers with other agencies. In order to better accommodate our passengers' needs, Beaumont has identified 5 routes to modify in FY 24.
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• Adjust timepoints on Route 3 to service needs of Cherry Valley and the K-12 school schedules.
• Adjust and increase service on CL 125 for better connectivity with Omnitrans and the Arrow.
• Revamp the Casino Express to extend service into new areas, including the industrial side of Beaumont.
• Expand the service area on Route 7 by utilizing a deviated route for the tripper, the 2nd bus. The service will be identified as Route 7-2 and will provide service to the newly developed communities in Beaumont.
• Coordinate connectivity with Banning Connect, RTA, and Metrolink to meet passenger needs, increase convenience and enhance passenger's experience.
Casino Express
The proposed route changes shown below lay out our plans to increase ridership and close a gap in our service area to provide a better service to our community. As mentioned in Chapter 2, the Casino Express is the only fixed route experiencing a decline in ridership for FY 23.
Ridership for this route has been declining since its inauguration and it is unsustainable at current ridership levels.
As the City of Beaumont is growing, our working class is growing as well. Many are employed in the warehouses located on the south side of 1-10 and Highway 60, and the proposed changes would fill the lack of service to these locations. The changes would also alleviate two timely deviations to Rangel Park and Amazon currently offered on Route 4. This will assist in increasing Route 4's on -time performance and implement changes from both passenger suggestions and a recommendation from Beaumont's COA. The new map for the Casino Express is on the following page.
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CASINO
EXPRESS
amazon
Prime Dr 4
Beaumont 1 Amazon I Casino Morongo
WEEKDAY SERVICE No Service on Holidays
TRANSFER fl TIME POINT STOP al
1ST ST St BEAUMONT AVE
(EASTBOUN D)
BEAUMONT WALMART
Beaumont 3, 4,
Commuter Links 120 & 125
Banning: 1, 5 & 6
D'
Walnart
2nd Street
RTA 331
Short Range Transit Plan FY 24 - 26
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RTA:31
OUTLETS
WESTBOU ND
EASTBOUN D
D'
Wal ma rt
moR.DNGQ
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Commuter Link 125
In FY 24, Beaumont plans to increase service trips on the CL 125 by cutting long layovers, and removing Kaiser Redlands Medical Offices while providing peak service to the Loma Linda VA.
This plan has resulted from one month of passenger surveys and data collection. The data revealed only 1.6% of passengers utilize the Kaiser bus stop and, in an effort to attract more riders, a more frequent service between Beaumont and Redlands is needed. This will increase connectivity throughout the day and offer passengers more opportunities to connect with Omnitrans and Metrolink to reach their final destination. 125
Beaumont 1 Redlands 1 Loma Linda VA
WEEKDAY SERVICE No Service an Holidays
TRANSFER POINT El
TIME POINT
LOMA LINDA VETERANS
AFFAIRS HOSPITAL
OmniTrans: 2 & SEX I RTA: 14
110 x
Barton Rd
BEAUMONT CIVIC
CENTER
1 Beaumont 4 & Commuter 120 I
6th Street
6 WELLJs
Po
Drop Off Only
EAUMONT
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Short Range Transit Plan FY 24 - 26
N
REDLANDS TRANSIT
CENTER
IOmniTrans: E. 15 & 19
Metrolink: Arrow
BEAUMONT WALMART
Beaumont 3, 4, Casino Express &
Commuter 120
Banning: 1, S & 5
RTA: 31
E'
Walmart
2nd Street
REAL-TIME BUS ARRIVALS
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Route 7
For FY 24, in response to new developments in Beaumont, modifications to Route 7 are necessary. Due to high ridership, Route 7 currently utilizes one bus and one sweeper. The proposed changes below provide two deviations from the original Route 7, which incorporates service to new communities. The route changes offer service to new areas; however, the route maintains an identical service area and will still ensure there is sufficient capacity for our riders. 7-2
Olivevvood I Tukwet Canyon
TRANSFER POINT fl
H
TIME POINT
Champions Dr
Oak Valtiey Pkwy
Short Range Transit Plan FY 24 - 26
WEEKDAY SERVICE 1 i fler) school is in session
2 HIGH SCHOOL
1 Beaumont 3, 9& 7 1 1
Cherry Valley Blvd
Brookside Ave
2 z
ORCHARD PARK APT.
Beaumont:
SOUTH SIDE OF COUGAR
WAY & BEAUMONT AVE
I Beaumont 3, 4, 7.1 &S I
4th St
s
1 0
Cougarwsy
•
E
CIVIC CENTER
Beaumont_ 1 120, 125.
6th 5t LP
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3.2 Future Marketing Plans, Studies, and Promotions to Promote Ridership Free Fare Promotion
Beaumont Transit has been allocated $323,000 for a discounted fare promotion. This promotion will allow all passengers to receive discounted fare on Paratransit, Commuter Link and Fixed Route services. The Fixed Route fare will be 25 cents, Commuter Links will be $1.00, and Dial -a -Ride will be 50 cents for ADA passengers and $1.00 for companions.
This promotion will begin once funding is received, likely August 2023, and is projected to last 3 years or until funding is exhausted. Beaumont will rely heavily upon free advertising methods for this project in an effort to maximize the impact for our passengers. It is planned that any cost -associated advertising for this project will be concurrent with other outreach efforts and utilize other funding sources.
Advertising
Beaumont Transit's baseline ridership has declined significantly due to COVID. Funding for advertising has been included in the operations budget to promote our services and gain/regain passengers. As Beaumont transitions from a rural to urban agency, we are taking steps to promote the system by conducting surveys, rider contests, and providing additional facetime to the community.
Increase Community Involvement
Throughout the year our service is promoted through participation in community events. The opportunity to present our services and fleet to a captive audience has had positive effects with the community that would have normally not considered public transportation.
Beaumont Transit participates in local parades, free rides to all Veterans during the annual Veteran's Expo, the "Stuff the Bus" food drive, and multiple community presentations and events. Additionally, staff provides informational booths at back -to -school nights and orientations. Shuttle service is provided at no cost to the annual signature event, the Cherry Festival, located in the downtown area of Beaumont. This annual festival, arts/crafts, food, and live entertainment gathering is a four -day event with attendance of over 50,000 throughout the four days. All of these efforts are beneficial and help ensure that the public is aware of the services provided to them. These efforts also assist in increasing ridership by exposing choice riders to public transportation.
Micro -transit Feasibility Analysis
The COA proposed incorporating a regular schedule in the outlying areas of Beaumont to the west in the area known as Olivewood, Fairway Canyon, and Tournament Hills. In the past, service to this area has been unsuccessful and buses would drive empty for most of the day. As a result, service is offered only during the peak hours. However, as the community grows and demographics change, it may be possible to offer a different form of service to the area during the off-peak hours using a micro transit service. In FY 23, Beaumont began to explore the Short Range Transit Plan FY 24 - 26 56 1 Page
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potential for a micro -transit service. In FY 24, Beaumont anticipates the completion of a Micro - transit feasibility analysis which will determine if the service is feasible. The analysis would also evaluate potential zoning, pricing, and scale of the service.
Enhance Bus Prediction Platform
In FY 23, Beaumont Transit implemented the software Swiftly. Swiftly provides real-time bus predictions on all of our routes. This software will show our passengers in real time how far away the bus is from where they are standing as well as an estimated time of arrival. This is an ideal platform as we move toward implementation of ADA required onboard announcements of upcoming stops and places of interest while on the bus. In addition, this software integrates with other applications. Our route information feeds into Google Maps, Apple Maps, and Transit app which will allow passengers to easily plan out their trips. This technology will be especially useful in enhancing connectivity with the Redlands and San Bernardino Transit Centers.
Travel Training
Beaumont Travel Training program was suspended during the pandemic. However, in FY 23, the program has returned. This program shows passengers how to ride Beaumont Transit to the San Bernardino Transit Center and connect with the Metrolink for trips outside of the region. In the past, we have connected passengers to Los Angeles Union Station, West Hollywood, Oceanside, and Downtown Disney.
Year to date we have offered two travel training opportunities, one to Hollywood and one to LA Union Station. In FY 24, we plan to increase travel training opportunities to resemble pre - pandemic figures more closely. Prior to the pandemic, travel training was offered approximately twelve times per year. Staff is currently planning and coordinating future trips and dates for LA Union Station, Hollywood, San Clemente, and Downtown Disney.
3.3 Projected Ridership Growth
Projecting ridership growth has been problematic for agencies since the pandemic. However, it is reassuring that passenger boardings have continued to recover in FY 23. In FY 22, passenger boardings increased by 74% when compared to the record low in FY 21. In FY 23, we project to end the year with an additional increase of 27% in passenger boardings. Following the trend of a slower recovery year -over -year, we are projecting a 10% increase in passenger boardings for FY 24.
As Beaumont and other agencies collect more data, it is apparent that it will take time to return to FY 19 statistics. Usually, agencies strive for a 2-3% increase in passengers year over year, however, given the circumstances Beaumont Transit is optimistic and projects a 10% increase.
Even with this 10% increase, ridership will still be down 24.6% compared to FY 20.
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3.4 Proposed Fare Structure Changes
Beaumont's Comprehensive Operational Analysis, completed in 2020, recommended a 20% fare increase. Due to the pandemic, Beaumont delayed the implementation of any fare increases. In July 2023, Beaumont plans to implement a fare increase of twenty-five cents on Fixed Route Services and Commuter Link Services. For paratransit services, fares will increase by one dollar.
On both fixed routes and commuter links, passengers pay general fare unless they qualify for a discounted fare. Discounted fares are available to seniors, persons with disabilities, veterans, PCA's or active military.
The following is the planned fare schedule for each of the different services Beaumont offers:
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TRANSIT
FARE SCHEDULE
FIXED ROUTE FARES
PURCHASE MOBILE PASSES
DOWNLOAD
',0
n Token Transit
g App Store
Fare Categories
Base Fare
Day Pass
-
10 Ticket Boo
Monthly Pas
General
$1.50
$3.50
$15.00
$45.00
Child (46" tall or under)**
$0.50
N/A
N/A
N/A
Seniors (60+)/Disabled*
$1.00
$2.50
$10.00
$30.00
Military Veterans*
$1.00
$2.50
$10.00
$30.00
Active Military*
FREE
N/A
N/A
N/A
Deviations (Route 4)
$0.50
N/A
-
N/A
-
COMMUTER LINK FARES
Fare Catego r'
General
Base Fare
$3.75
10 Ride Punch Card
$34.00
Day Pass***
$8.50
onthly Pass
$80.00
Child (46" tall or under)**
$2.75
$25.00
$6.50
$60.00
Seniors (60+)/Disabled*
$2.75
$25.00
$6.50
$60.00
Military Veterans*
$2.75
$25.00
$6.50
$60.00
Active Military*
FREE
N/A
N/A
N/A
*You must show proper ID for discounted fare.
**Must be accompanied by a paying adult. Limit 2 children at discounted fare. ***Day and Monthly Commuter Link passes are valid on Commuter link buses and local fixed routes.
DIAL -A -RIDE FARES
Fare Categories
Base Fare
10 Ride Punch Card
■
One -Way
$3.00
$27.00
Companion & Child
$4.00
N/A
PCA(w/ID)
FREE
FREE
No -Show
$3.00
N/A
Dial -A -Ride is a door-to-door, advanced rese vation transportation service for persons certified under the American with Disabilities Act (ADA).
Short Range Transit Plan FY 24 - 26
Have exact fare ready when bus arrives.
Drivers cannot make change.
NO REFUNDS.
BEAUMONT
TRANSIT
QUESTIONS? (951) 769-8530
BEAUMONTCA.GOV/TRANSIT
JULY 2023
59 1 Page
BFAUMONT
TRANSIT
3.5 Capital Improvement Planning
4th & Veile Master Plan
Beaumont Transit currently owns a 6.15 -acre parcel located on 4th & Veile in conjunction with the City of Beaumont. Beaumont Transit and Beaumont City Hall are coordinating the development of a master plan for the parcel. It is anticipated that this property will house a CNG Fueling Station, administrative operations facility, and vehicle maintenance facility. In regard to ownership, currently Transit owns approximately 40% of the property and the City owns 60%. It is expected that Transit will share office space in the administrative facility, and a storage area for the public works department.
Thirteen of Beaumont Transit's twenty-two buses are CNG fueled. At this time, Beaumont Transit does not have a fueling station and must use the school district's station, or other stations in Redlands and San Bernadino. The station will be open to the public, providing fast -fill stations as well as slow -fill stations for the buses. The planned CNG station will be fully owned and operated by the Transit department.
In FY 23, Beaumont Transit worked with CTE and RCTC to develop a Zero -Emission Bus Rollout Plan. Beaumont City Council approved the mixed -fleet composition in April 2023. This plan was developed in response to the ICT Regulation adopted by the California Air Resources Board.
Given our current fleet composition and ZEB rollout plan, it is expected the property will also have electric vehicle charging infrastructure. Since this property will house not only these facilities, but also the entire Transit fleet, we are evaluating the land usage to potentially include a hydrogen fueling station on this property.
Bus Stop Placement Policy and Improvement Plan
In the COA, it is recommended that Beaumont Transit develops a Bus Stop Placement Policy.
This policy would clearly define how far apart bus stops should be placed as well as the activity level needed to add amenities (such as shelters/benches) to the stop. The policy will also set guidelines for the addition or removal of bus stops.
In FY 24, Beaumont plans to develop a Bus Stop Placement Policy in conjunction with the development of a Bus Stop Improvement Plan. This plan will outline the need for bus stop locations throughout the service area. This includes necessary upgrades to pre-existing bus stops, as well as the implementation of new bus stops. This plan will be essential to enhance the rider experience, appeal to choice -riders, and improve the ease of use and convenience of the public transit system.
Short Range Transit Plan FY 24 - 26 60 1 Page
Pala 1 RR of 7RR
TRANSIT
Beaumont Transit
Short Range Transit Plan
FY 2023/2024
Table 3 Highlights
• Discounted Fare Promotion for all passengers.
• Continue advertising and passenger outreach.
• Increase community involvement and visibility.
• Complete our micro -transit feasibility analysis.
• Increase trips for the travel training program.
• Implement Fare increase.
• Launch the Proposed Route Changes.
Type
FY 20/21 Audited
FY 21/22 Audited
FY 22/23
Estimated
FY 23/24
Plan
Systemwide Ridership
39,201
68,457
87,054
95,760
Expenses
3,203,538
3,049,072
2,766,250
2,993,669
Revenues
300,115
130,597
306,803
337,174
Farebox Recovery Ratio
22.52%
6.38%
11.09%
11.26%
Short Range Transit Plan FY 24 - 26
61 1 Page
Pages 1 RQ of 7RR
BFAUMONT
TRANSIT
CHAPTER 4 - FINANCIAL PLANNING
4.1 Operating and Capital Budget
Operating Budget
As shown in Table 4, represented on the following page, Beaumont Transit projects $2,993,669 in total expenses for FY 24. This is the expected amount to fully operate Beaumont Transit's services and correlates to an 11.26% farebox recovery ratio systemwide without exemptions.
Included in that amount is:
• $2,656,495 from Local Transit Funds,
• $169,000 in Measure A funding,
• $21,025 in farebox revenues projection,
• $129,149 in LCTOP Subsidy for the Discounted Fare Promotion • $18,000 in other income. Primarily revenues from electric vehicle charging stations.
This correlates to an increase of 8% in requested funding compared to FY 23. This increase is attributable to inflation, proposed route changes and union negotiated raises for drivers.
Operational funding is allocated to 80% in personnel, 10% in maintenance and operations, and 10% in contractual services.
Short Range Transit Plan FY 24 - 26 62 1 Page
Pala 1 Qn of 7RR
�'��►U����NT
TRANSIT
11111r
RIERIIIIL
NIINIFORINANI
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Table 4.0 - Summary of Funding Requests - FY 2023/24
City of Beaumont
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Short Range Transit Plan FY 24 - 26 63 1 Page
�'��►U����NT
TRANSIT
Tables 4A
7 - EZ Rider II CNG Buses (Project 24-01)
In FY 24, Beaumont Transit proposes to purchase seven CNG EZ Rider II buses. These buses are full size transit buses and have a seated capacity of thirty passengers. These buses will replace the aging vehicles in the fleet.
RIVERSIDE
COUNTY
TRANSPORTATION
COMMISSION
FY 2023/24 SRTP
City of Beaumont
Table 4.0 A - Capital Project Justification
Original
Project Number: 24-01
Project Name: 24-01 Seven EZ Rider II CNG Buses
Category: Bus
Sub -Category: Replacement
Fuel Type: CNG
Project Description: Purchase of seven CNG EZ Rider II buses.
Proiact Justification: Aging vehicle replacement.
Proiact Schedule:
Start Date
Completion Date
PROJECT FUNDING SOURCES IREQUESTEDI:
Fund Type
Fiscal Year
Amount
STAPUC99313
FY 2023124
$6,350,000
Total
$6,350,000
FTIP No: Not Assigned - New Project
PRIOR YEAR PROJECTS OF A SIMILAR NATURE WITH UNEXPENDED BALANCE INCLUDING PROJECTS
APPROVED BUT NOT YET ORDERED
FTA Grant No.
FTIP ID No,
RCTC/SRTP
Project No.
Description
Short Range Transit Plan FY 24 - 26
64 1 Page
Pala 197 of 7AR
TRANSIT
Support Vehicles (Project 24-02)
The Vehicle Maintenance department currently utilizes three support vehicles that have served their useful life. These vehicles were all retired and donated to Transit from the Police Department approximately 10 years ago.
RIVERSIDE
COUNTY
TRANSPORTATION
COMMISSION
FY 2023/24 SRTP
City of Beaumont
Table 4.0 A - Capital Project Justification
Original
Project Number: 24-02 FTIP No: Not Assigned - New Project Project Name: 24-02 Support Vehicles
Category: Support Vehicles
Sub -Category: Replacement
Fuel Type: Other
Project Description: Replace 2 support vehicles for our vehicle maintenance department and 1 for Transit admin.
Project Justification: These vehicles have served their useful life and it is necessary to replace these vehicles with newer, and more fuel -efficient vehicles.
Project Schedule:
Start Date
Completion Date
PROJECT FUNDING SOURCES (REQUESTED):
Fund Type
Fiscal Year
Amount
STA -OB
FY2023/24
$116,638
STAPUC99313
FY2023/24
$3,362
Total
$120,000
PRIOR YEAR PROJECTS OF A SIMILAR NATURE WITH UNEXPENDED BALANCE INCLUDING PROJECTS
APPROVED BUT NOT YET ORDERED
FTAGrant No.
FTIP ID No.
RCTCISRTP
Project No.
Description
Short Range Transit Plan FY 24 - 26
65 1 Page
Pang 1 QR of 7RR
�'��►U����NT
TRANSIT
Bus Stop Placement and Improvement Plan (Project 24-03) As mentioned previously, the COA completed in 2020 recommended that Beaumont establishes a Bus Stop Placement Policy. This project will allow for the concurrent completion of both the policy and a plan that will outline the implementation of new bus stops and the improvements to be made to pre-existing stops.
ORIVERSIDE
COUNTY
TRANSPORTATION
COMMISSION
FY 2023!24 SRTP
City of Beaumont
Table 4.0 A - Capital Project Justification
Original
Project Number: 24-03
Project Name: 24-03 Bus Stop Placement and Improvement Plan Category: Planning(Feasibility
Sub -Category: Study
Fuel Type: NIA
FTIP No: Not Assigned - New Project
Project Description: Conduct a study to create a bus stop improvement plan that details bus stop locations and necessary improvements for the stops.
Project Justification: Beaumont currently does not have a placement or improvement plan. This will help to better use resources to ensure stops are spaced adequately and have the appropriate amenities Project Schedule:
Start Date
Completion Date
PROJECT FUNDING SOURCES (REQUESTED!:
Fund Type
Fiscal Year
Amount
STA PUC99313
FY 2023124
$2,404
STA PUC99314
FY 2023!24
$37,596
Total
$40,000
PRIOR YEAR PROJECTS OF A SIMILAR NATURE WITH UNEXPENDED BALANCE INCLUDING PROJECTS
APPROVED BUT NOT YET ORDERED
FTA Grant No.
FTIP ID No.
RCTCISRTP
Project No.
Description
Short Range Transit Plan FY 24 - 26
66 1 Page
Pala 1 Cid of 7AR
TRANSIT
Bus Stop Improvements and Amenities (Project 24-04)
This project will fund the implementation and improvements of bus stops outlined in the City's completed Bus Stop Placement and Improvement Plan (Project 24-03).
RIVERSIDE
COUNTY
TRANSPORTATION
COMMISSION
FY 2023/24 SRTP
City of Beaumont
Table 4.0 A - Capital Project Justification
Original
Project Number: 24-04 FTIP No: Not Assigned - New Project Project Name: 24-04 Bus Stop Improvements and Amenities Category: Bus Stop and Amenities
Sub -Category: Rehabilitationllmprovement
Fuel Type: N/A
Project Description: This project will improve existing bus stops and provide better amenities for our customers Project Justification: Many bus stops in the City do not have the adequate features that customers are accustomed to.
This project would enhance customer experience at stops throughout the City. Implementation will take place after the plan is developed.
Project Schedule:
Start Date
Completion Date
PROJECT FUNDING SOURCES (REQUESTED):
Fund Type
Fiscal Year
Amount
SGR PUC99313
FY 2023124
$56,616
SGR PUC99314
FY 2023/24
$3,384
Total
$60,000
PRIOR YEAR PROJECTS OF A SIMILAR NATURE WITH UNEXPENDED BALANCE INCLUDING PROJECTS
APPROVED BUT NOT YET ORDERED
FTAGrant No.
FTIP ID No.
RCTC/SRTP
Project No.
Description
Short Range Transit Plan FY 24 - 26
67 1 Page
Pala 1 of 7AR
TRANSIT
4th & Veile Construction (Project 24-05)
As discussed in Chapter 3, the City of Beaumont and Beaumont Transit are coordinating the development of a master plan for the property located on 4th & Veile in Beaumont. This project combines previously allocated funding for the individual projects to be completed at this location. The property is expected to house a CNG Station, Administrative Operations Facility and Vehicle Maintenance Facility.
RIVERSIDE
COUNTY
TRANSPORTATION
CUMMISSICIN
FY 2023/24 SRTP
City of Beaumont
Table 4.0 A - Capital Project Justification
Original
protect Number: 24.05
Project Name: 24-05 4th & Veile Construction
s; qv: Buildings and Facilities
Sub-Categorv: Expansion
Fuel Type: NIA
/TIP Nn: Not Assigned • New Project
Pr jsct Descnotion: Beaumont Transit. in conjunction with City Hall, owns a property located on 4th & Veile. This property is expected to house a CNG Station, a fleet maintenance facility and an administrative operations facility. If feasible, this property will also include a hydrogen fueling station.
Project Justification: This project compiles funding for the individual projects and is not a request for additional funding. project Schedule:
Start Dote
Completion Date
PROJECT FUNDING SOURCES IREOUESTED1:
Fund Type
Fiscal Year
Amount
SGR-OB PUC99313
FY 2023/24
5151.170
SGR-OR PUC99314
FY 2023/24
524,453
STA • OB
FY 2023+24
53.275.239
Total
53.450; 892
PRIOR YEAR PROJECTS OF A SJMJLAR NATURE WITH UNEXPENDED BALANCE INCLUDING PROJECTS
APPROVED BUT NOT YET ORDERED
FTA Grant No.
FTIP ID No.
RCTGISRTP
Project No.
Description
Short Range Transit Plan FY 24 - 26
68 1 Page
PAOP 1 QR of 7RR
BFAUMONT
TRANSIT
Fare Revenue Calculation
Table 4B reflects the historical and planned farebox recovery ratio. This table provides the farebox recovery ratio with and without exclusions.
The FY 22 Audit reflects an unfavorable favorable farebox recovery ratio primarily due to the exclusion of services. Excluded routes for FY 22 included CL 120, CL 125, Route 3/4, and the Casino Express. The exclusion of Measure A funding for the Commuter Links negatively impacted the Farebox Recovery Ratio and is reflected in this audit. As transit agencies are still recovering from the pandemic this funding is essential for the sustainability of commuter services.
The estimated farebox ratios for FY 23 and FY 24 reflect a rising farebox recovery ratio, both with exclusions and systemwide. This is attributable to recovering ridership and the inclusion of Measure A funding for the operations of the commuter links. In FY 23, the CL 120 became an included service for the farebox recovery ratio. In FY 24, CL 125 will also be included, and the Casino Express will be the only route excluded from the farebox recovery calculation.
In Table 4B, audited figures account for system depreciation which decreases total expenses. In the estimates for FY 23 and FY 24, depreciation is not accounted for. It is also worth noting that in FY 22 the auditors did not include Measure A funding as gross revenue. While this does not affect the farebox recovery ratio with exclusions, as both commuter links were excluded in this FY, this does reflect a lower systemwide farebox recovery ratio than the correctly calculated ratio.
Short Range Transit Plan FY 24 - 26 69 1 Page
Pala 1 Q7 of 7RR
BEAUMONT
'''' AUK D N T
TRANSIT
Beaumont Transit
Short Range Transit Plan
FY 2020/21- 2022/23
Table 4B Fare Revenue Calculation
(Consistent with RCTC Farebox Recovery Policy 3/12/2008
BEAUMONT
• TRANSIT
#
Revenue Sources Included in
Farebox Calculation
FY 20/21
Audited
FY 21/22
Audited
FY 22/23
Projected
FY 23/24
Plan
1 Passenger Fares
18,116
88,117
74,438
21,025
Clther Inrnme
1 1 cR
4 nn;
7R 'I c
1R nnn
2 LCTOP/Local Funds/ Measure A
3 278,846
38,475
204,000
298,149
4 Gross Revenue
300,115
130,597
306,803
337,174
Revenue Exclusion
-9,394
-43,683
-65,193
-3,500
5 (Excluded Routes)
6 Net Revenue (1-4)
290,721
86,914
241,610
333,674
7 Gross Expenses
3,203,538
3,049,072
2,766,250
2,993,669
Total Exclusions
-1,912,655
-1,687,079
-590,175
-305,635
8 (Excluded routes)
Net Expense (6-7)
1,290,883
1,361,993
2,176,075
2,688,034
9 Farebox Recovery Ratio with
Exclusions
10 (Line 6 / Line 9)
22.52%
6.38%
11.10%
12.41%
Farebox Recovery Ratio systemwide -
9.37%
4.28%
11.09%
11.26%
11 no exclusions (Line 4 / Line 7)
Short Range Transit Plan FY 24 - 26
70 I Page
4.2 Beaumont
and
SGR
As
2020
the
other
In
evaluating
capitalize
revenues
be
understanding
Transit
submit
FY
In
this
income
over
Short
)l'i7►U HONT
TRANSIT
Funding Plans to Support Proposed Operating and Capital Program Transit continues to explore all available funding options to support transit operating capital costs. Current secured funding includes STA, LTF, Measure A, LCTOP, Carl Moyer, and and is void of any federal funding.
Beaumont proceeds in the post -pandemic environment and into an urban setting from the population census, our funding needs are speculative in nature currently. Depending on farebox recovery ratio set beyond FY 24, additional funding will need to be secured from sources.
anticipation of the implementation of a graduated farebox recovery ratio, Beaumont is next steps to potentially receive federal funding. Beaumont is also creating plans to preventative maintenance, sell advertising space, among other methods to increase and decrease operating expenses. To provide a baseline scenario, the next 3 FY's will budgeted without additional funding or revenues. This scenario will help provide a better of the need for, or lack of, additional funding in the coming years. Beaumont will continue to make steps towards the graduated farebox recovery ratio and will final plans upon receival of official requirements.
25 Proposed Budget
FY 25, Beaumont Transit proposes an operational budget 3% higher than that proposed in FY 24 budget when a 12% farebox recovery is the goal. LTF, Measure A, LCTOP, and other is budgeted with a 3% increase. Farebox collection is anticipated to have a 6% increase that proposed in FY 24.
Table 4.1 - Summary of Funding Requests - FY 2024(25
m..�: o
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WT
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6201,5.
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611100
S9,oe9,s58
35,ST6,000
SRO 00.3
55 MO
Range Transit Plan FY 24 - 26 71 1 Page
Pang, 1 QQ of 7RR
FY
In
FY
Farebox
farebox
come
Short
''�►Ur
TRANSIT
26 Proposed Budget
FY 26, Beaumont Transit continues to propose an operational budget of a 3% increase over
25. LTF, Measure A, LCTOP, and other income is budgeted with a 3% increase over FY 24. collection is anticipated at a 6% increase over that proposed in FY 24. The increase in should reflect the growth of passengers as the system recovers and outreach efforts to fruition
Table 4.2 - Summary of Funding Requests - FY 2025126
wN5llsslox city of Beaumont
Original
o N T
Operen.°
Pyru
el Fonds
DAM
ITT
LCTOP
p 622.027
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019
LTF
MAIN
STA wG.9n9
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4 bI.IA WrlinN 125
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51 Gown EN,99.6
5) limree am alnrInDom
9022.200
6461.601
9627.404
Noon
DOA.
61,113
El.Ux
62 ,099
swan
5221,090
1,2021
S
CAW
55,175
21,452,91.
WA.
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6922.476
926,000
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69,295,200
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FARE
LCTOP AUC99119
LGTOP p,9291.216
LTF
LMID
Teal EMF.91m op0nW0 Fdn22,12599.1
DTA 2.89312
Total Mad CWtaS Fund*, 222222292
Add Fund, ATNL•291
ied.we
316.066
3110.750
65.925
81,&96.659
6160.002
69206.700
60,950200
212.556,702
Range Transit Plan FY 24 - 26 72 1 Page
Parry Inn of 7PR
l"'AU FONT
TRANSIT
4.3 Regulatory and Compliance Requirements
The American with Disabilities Act of 1990
The Dial -A -Ride service provides complimentary paratransit services as a required element of ADA. Although Beaumont Transit does not have an internal application process due to staffing constraints, all other public transit operators' identification cards are accepted as verification on all routes. For those passengers requiring DAR services, ADA applications are submitted and processed with Riverside Transit Agency (RTA).
California Air Resources Board — ICT Regulation
The California Air Resources Board has adopted the Innovative Clean Transit Regulation, which outlines a goal for transitioning all public fleets to zero -emission vehicles by 2040. Beaumont is preparing for the transition and the City Council has approved a mixed fleet solution to reach this goal. This means Beaumont will gradually begin purchasing both hydrogen and battery - electric buses. As outlined in Beaumont's ZEB rollout plan, beginning in 2026, 25% of bus purchases will utilize zero -emission technology. In 2029, it is planned that 100% of purchases will be zero -emission.
Beaumont Transit System operates thirteen CNG buses, two electric shuttles, and six gasoline powered vehicles. Future vehicle purchases, like all current purchases, will follow the CARB ICT Regulation, as well as RCTC and SCAQMD policies.
DBE, EEO, and Title VI
Beaumont Transit System does not utilize federal funds for operating expenses. As such, DBE, EEO, and Title VI requirements do not currently apply to this public transit operator.
Triennial Performance Audit
RCTC retained the services of Michael Baker International to conduct the TDA triennial performance audit of the public transit operators under its jurisdiction in Riverside County, including Beaumont Transit, for Fiscal Years 2018-2019 through 2020-2021. Triennial audit recommendations from 2019-2021 are included in the following Table 4.5.
Short Range Transit Plan FY 24 - 26 73 1 Page
l'AU FONT
TRANSIT
Beaumont Transit
Short Range Transit Plan
FY 2023/2024
Table 4.5 TDA Triennial
FYs 2019-2021
Draft Recommendations
-C A L I F O R N I A-
BEAUMONT
TRANSIT
Audit Recommendations
Action Taken and Results
Prepare and submit separate State Controller
Transit Operators Financial Transactions
Reports for public transit and specialized
service.
Beaumont will request auditors to report the
information in this manner.
Ensure timely completion and submittal of
external TDA financial reports.
Beaumont submits information to auditors in
October. To help keep on schedule, it is
proposed that the hiring entity of the
auditors advise of the schedules for timely
completion.
Regularly update the vehicle fleet list in
TransTrack
This recommendation is due to an error on
the initial draft. Beaumont will continue to
update the vehicle inventory list regularly.
Re-engage with riders and collect user input
Beaumont Transit conducted surveys to
engage with passengers, as suggested, in
FY23. Beaumont plans to continue to
increase outreach in the coming years.
Short Range Transit Plan FY 24 - 26
74 1 Page
Pages 7f17 of 7P;
l'AU FONT
TRANSIT
4.4 Open Capital Projects
This concluding section provides a summary of open capital projects, and the unfunded balances outstanding for each project. On the following page, Table 4.6 defines the projects by element as shown in the legend below.
Legend
Project Elements:
1 Revenue Vehicle Purchases
2 Non -Revenue Vehicle Purchase
3 Vehicle Systems and Equipment
4 Building, Land and Facilities
5 Communication and Information Technology Systems
6 Transit Shelters and Amenities
7 Fixed Guideways and Tracks
8 Debt Service
9 Maintenance
10 Security
11 Planning Feasibility
Funding Category
1 Fully Funded
2 Partially Funded
Short Range Transit Plan FY 24 - 26 75 1 Page
TRANSIT
Beaumont Transit
Short Range Transit Plan
FY 2023/2024
BEAUMONT
Table 4.6 Open Projects
-CALIFORNIA-
BEAUMONT
TRANSIT
Project Name I SRTP
Capital
Project
No's
I Project
Element
Funding
Category
Project I Total
Timeline Project
Cost
Unfunded
Balance
CNG Station
19-01, 20-
4 1
FY 24 2,830,156 500,000
01, 21-01
Shop Building
17-4
4 1 Current 50,000 0
Maintenance
Shop Tools 20-05
9 1
Current
41,590
0 Mobile Lifts
22-04
9 1
Current
60,000
0 Brand & Logo
20-03
6 1
Current
156,000
0 Update
1 Bus Stop
20-04
6 2
Current
129,943
100,000
Amenities
Video Cameras
22-02
10 1
Current
140,000
0 Micro -transit
23-02
11 1
Current
100,000
0 Feasibility
Analysis
Administrative
20-02, 21-
4 2
FY 24-25
1,220,677
4,500,000
Operations
02, 19-04
Facility and
Vehicle
Maintenance
Facility
Bus
23-01, 22-
1 1
Awaiting
3,100,000
0 Replacements
01 Delivery
2 Hybrid Support
23-04
2 1
Awaiting
80,000
0 Vehicles
Delivery
Shop Truck
23-03
2 1
Current
150,000
0 Short Range Transit Plan FY 24 - 26
76 1 Page
BEAUMONTA O R N 1 -
Staff Report
TO: City Council
FROM: Elizabeth Gibbs, City Manager
DATE May 2, 2023
SUBJECT: Approval of Acquisition Agreement for Community Facilities District No. 2016-3 (Sundance) and Authorizing the Issuance of its Special Tax Bonds, Series 2023
Description Approval of Acquisition Agreement for Community Facilities District No. 2016-3 (Sundance) and Authorizing the Issuance of its Special Tax Bonds, Series 2023 Background and Analysis:
Pursuant to the terms of a settlement agreement dated February 7, 2017, by and between the City and Pardee Homes, the City formed the Community Facilities District ("CFD" or "District") 2016-3 on February 7, 2017, as part of a resolution of certain claims by Pardee Homes. Subsequent to a noticed public hearing on February 7, 2017, the City Council adopted resolutions which established the District, authorized the levy of a special tax within the District, determined the necessity to incur bonded indebtedness within the District, and called an election within the District on the proposition of incurring bonded indebtedness, levying a special tax and setting an appropriations limit within the District.
On February 7, 2017, an election was held within the District at which the landowners eligible to vote approved the issuance of bonds for the District in an amount not to exceed $22,000,000 and approved a rate and method of apportionment of special tax for the District.
The District is located in the northeastern part of the City and is bounded by Starlight Avenue to the west, North Highland Springs Avenue to the east and Cougar Way to the north. Tri Pointe Homes IE-SD, Inc., a California corporation ("Tri Pointe") as successor in interest to Pardee Homes, is developing the land within the District into a residential development of 704 age -restricted (55+) single family detached homes known as "Altis Beaumont."
As of February 1, 2023, the date of value of the Appraisal Report, of the 704 units planned, 416 had been completed and conveyed to individual homeowners, 24 units had been completed and were owned by the Developer, and 264 units were either in various stages of construction, finished lots or partially finished lots. As of February 1, 2023, 561 lots had building permits pulled and will be classified and levied against as Developed Property beginning in FY 2023-24. Between February 1 and April 10, 2023, an additional 8 units had been conveyed to individual homeowners, bringing the total to 424. As of April 10, 2023, there are 14 homes in escrow.
Ownership/Development Summary
10 -Apr -
1 -Feb -231 232
Completed - Individual
Homeowners 416 424
Completed - Developer 24 23
Under Construction/Lot Condition 264 257
Total 704 704
'Date of Value of the Appraisal Report. 2Most Recent Data Provided by the Developer.
Based on current market conditions, the proposed 2023 Special Tax Bonds ("2023 Bonds") are expected to be issued in an amount of $9,050,000 with a final maturity of September 1, 2053. Proceeds will be used primarily to reimburse Tri Pointe for the cost of public facilities constructed by Tri Pointe and for development impact fees paid by Tri Pointe. A description of such facilities and fees is contained in Exhibit A to the Acquisition Agreement and in the Preliminary Official Statement ("Facilities").
The attached resolutions approve the Acquisition Agreement, the issuance of the 2023 Bonds and forms of an Indenture, Bond Purchase Agreement, Continuing Disclosure Certificate and Preliminary Official Statement. The Preliminary Official Statement contains the SEC mandated disclosure related to the Cease and Desist Order and the Beaumont Financing Authority's compliance history with its continuing disclosure undertakings. As part of its obligations under federal securities laws, Council should review the Preliminary Official Statement. The Acquisition Agreement establishes the terms pursuant to which the District will reimburse Tri Pointe for the eligible facilities which Tri Pointe has completed and conveyed to the City or for certain development impact fees paid by Tri Pointe. The attached resolutions authorize the City and District to execute the Acquisition Agreement.
Pricing is currently scheduled for mid -May and closing is expected to occur two weeks later.
The table below highlights estimated financing statistics of the 2023 Bonds based on current market conditions.
Summary of Financing Statistics
Par Amount $9,050,000
Total Interest Cost 5.00%
Average Annual Debt Service 587,504
Total Debt Service 17,783,424
Average Projected Levy Per Developed Parcel (FYs 1,593
Preliminary, Subject to Change; Based on Current Market Conditions 'Projected Special Tax Levy Divided by Total Number of Developed Parcels (561) The bond documents allow for the future issuance of additional bonds payable from the Special Tax levy on parity with the 2023 Bonds. Parity bonds may be issued when the remaining units under construction or various lot conditions are conveyed to individual homeowners.
As required under Section 5852.1 of the California Government Code, good faith estimates have been provided to the City in Attachment A by Urban Futures, Inc., the Municipal Advisor, in consultation with Stifel, Nicolaus & Company, Incorporated, the underwriter of the 2023 Bonds. These amounts are estimates and the final costs will depend on market conditions and can be expected to vary from the estimated amounts outlined in Attachment A.
Fiscal Impact:
The 2023 Bonds are paid from special taxes levied in the District. There is no fiscal impact to the City's General Fund. The City will, however, be required to provide administration for the District, which will be funded as part of the annual special tax levy.
As previously mentioned, the average projected levy per developed parcel will be approximately $1,593 for Fiscal Years 2024-52.
Recommended Action:
Waive the full reading and adopt by title only, "A Resolution of the City Council of the City of Beaumont Authorizing the Execution and Delivery of an Acquisition Agreement
Relating to City of Beaumont Community Facilities District No. 2016-3 (Sundance) and Approving Certain Documents and Taking Certain other Actions in Connection Therewith" and
Waive the full reading and adopt by title only "A Resolution of the City Council of the City of Beaumont, Acting as the Legislative Body of the City of Beaumont Community Facilities District No. 2016-3 (Sundance), Authorizing the Issuance of Its 2023 Special Tax Bonds in an Aggregate Principal Amount not to Exceed $10,000 and Approving Certain Documents and Taking Certain Other Actions in Connection Therewith." Attachments:
1. Good Faith Estimates
2. City Resolution Approving the Acquisition Agreement
3. CFD No. 2016-3 Resolution Authorizing the Issuance of Bonds
4. Acquisition Agreement
5. Indenture of Trust
6. Bond Purchase Agreement
7. Continuing Disclosure Certificate
8. Preliminary Official Statement
ATTACHMENT A
GOOD FAITH ESTIMATES
The good faith estimates set forth herein are provided with respect to the 2023 Bonds in accordance with California Government Code Section 5852.1. Such good faith estimates have been provided to the District by Urban Futures, Inc., the District's Municipal Advisor, in consultation with the Underwriter, Stifel Nicolaus.
Principal Amount. The Municipal Advisor has informed the District that, based on the District's financing plan and current market conditions, its good faith estimate of the aggregate principal amount of the 2023 Bonds to be sold is $9,050,000 ("Estimated Principal Amount").
True Interest Cost of the Bonds. The Municipal Advisor has informed the District that, assuming that the respective Estimated Principal Amount of the Bonds is sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the true interest cost of the 2023 Bonds, which means the rate necessary to discount the amounts payable on the respective principal and interest payment dates to the purchase price received for the 2023 Bonds, is 5.00%.
Finance Charge of the Bonds. The Municipal Advisor has informed the District that, assuming that the Estimated Principal Amount of the 2023 Bonds is sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the finance charge for the 2023 Bonds, which means the sum of all fees and charges paid to third parties (or costs associated with the 2023 Bonds), is $336,321. Additionally, there will be an annual Trustee fee of roughly $2,000 for as long as the 2023 Bonds are outstanding.
Amount of Proceeds to be Received. The Municipal Advisor has informed the District that, assuming the Estimated Principal Amount of the Bonds is sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the amount of proceeds expected to be received by the District for sale of the 2023 Bonds, less the finance charge of the 2023 Bonds, as estimated above, and any reserves or capitalized interest paid or funded with proceeds of the 2023 Bonds, is $8,250,000.
Total Payment Amount. The Municipal Advisor has informed the District that, assuming that the Estimated Principal Amount of the 2023 Bonds is sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the total payment amount, which means the sum total of all payments the District will make to pay debt service on the 2023 Bonds, plus the finance charge for the 2023 Bonds, as described above, not paid with the respective proceeds of the 2023 Bonds, calculated to the final maturity of the 2023 Bonds, is $17,783,424. Additionally, there will be an annual Trustee fee of $2,000 for as long as the 2023 Bonds are outstanding.
The foregoing estimates constitute good faith estimates only and are based on market conditions prevailing at the time of preparation of such estimates. The actual principal amount of the 2023 Bonds issued and sold, the true interest cost thereof, the finance charges thereof, the amount of proceeds received therefrom and total payment amount with respect thereto may differ from such good faith estimates due to: (a) the actual date of the sale of the 2023 Bonds being different than the date assumed for purposes of such estimates, (b) the actual principal amount of 2023 Bonds sold being different from the respective Estimated Principal Amounts, (c) the actual amortization of the 2023 Bonds being different than the amortization assumed for purposes of such estimates, (d) the actual market interest rates at the time of sale of the 2023 Bonds being different than those estimated for purposes of such estimates, (e) other market conditions, or (f) alterations in the District's financing plan, or a combination of such factors. The actual date of sale of the 2023 Bonds and the actual principal amount of 2023 Bonds sold will be determined by the District based on various factors. The actual interest rates borne by the 2023 Bonds will depend on market interest rates at the time of sale thereof. The actual amortization of the 2023 Bonds will also depend, in part, on market interest rates at the time of sale thereof. Market interest rates are affected by economic and other factors beyond the control of the District.
RESOLUTION NO.
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
BEAUMONT, AUTHORIZING THE EXECUTION AND
DELIVERY OF AN ACQUISITION AGREEMENT RELATING TO
CITY OF BEAUMONT COMMUNITY FACILITIES DISTRICT
NO. 2016-3 (SUNDANCE) AND APPROVING CERTAIN
DOCUMENTS AND TAKING CERTAIN OTHER ACTIONS IN
CONNECTION THEREWITH
WHEREAS, the City Council (the "City Council") of the City of Beaumont, California (the "City"), located in Riverside County, California, has heretofore undertaken proceedings and declared the necessity to issue bonds by the City of Beaumont Community Facilities District 2016-3 (Sundance) (the "District") pursuant to the terms and provisions of the Mello -Roos Community Facilities Act of 1982, as amended, being Chapter 2.5, Part 1, Division 2, Title 5 of the Government Code of the State of California (the "Act"); and WHEREAS, pursuant to resolutions adopted by the City Council on February 7, 2017 and the Act, the City formed the District; and
WHEREAS, certain facilities (the "Facilities") are eligible to be financed from a special tax for facilities levied within the District; and
WHEREAS the City now desires to approve the form of an Acquisition Agreement relating to the Facilities, by and among the City, the District and Tri Pointe Homes IE-SD, Inc. (the "Acquisition Agreement"); and
NOW, THEREFORE, the City Council of the City of Beaumont does hereby resolve as follows:
SECTION 1. Each of the above recitals is true and correct, as is each of the findings and determinations set forth therein, and each of said recitals, findings and determinations is adopted by the City Council.
SECTION 2. The form of the Acquisition Agreement presented at this meeting is hereby approved; and any one of the Mayor, the City Manager, the Administrative Services Director, or the Finance Director of the City or the written designee of one of the foregoing (collectively, the "Authorized Officers") is hereby authorized and directed to execute the Acquisition Agreement in the form hereby approved, with such additions therein and changes thereto as the Authorized Officer or Authorized Officers executing the same deem necessary to cure any defect or ambiguity therein if such change does not materially alter the substance or content thereof, with such approval to be conclusively evidenced by the execution and delivery of such Acquisition Agreement.
SECTION 3. Each of the Authorized Officers and the other officers and staff of the City of Beaumont responsible for the fiscal affairs of the City are hereby authorized and directed to take any actions and to execute and deliver any and all documents as are necessary to accomplish the execution and delivery of the Acquisition Agreement and the issuance, sale and delivery of 1 4858-4483-9235v1/022599-0033
the "City of Beaumont Community Facilities District No. 2016-3 (Sundance) 2023 Special Tax Bonds" in accordance with the provisions of this Resolution and the fulfillment of the purposes of the Bonds as described in the Bond Indenture relating to such bonds. Any document authorized herein to be signed by the City Clerk may be signed by a duly -appointed deputy city clerk or assistant city clerk.
PASSED AND ADOPTED by the City Council of the City of Beaumont, California, this 2nd day of May, 2023, by the following vote:
AYES:
NAYS:
ABSENT:
ABSTAIN:
MAYOR OF THE CITY OF BEAUMONT
ATTEST:
CITY CLERK
2 4858-4483-9235v1/022599-0033
RESOLUTION NO.
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
BEAUMONT, ACTING AS THE LEGISLATIVE BODY OF THE
CITY OF BEAUMONT COMMUNITY FACILITIES DISTRICT
NO. 2016-3 (SUNDANCE), AUTHORIZING THE ISSUANCE OF
ITS 2023 SPECIAL TAX BONDS IN AN AGGREGATE
PRINCIPAL AMOUNT NOT TO EXCEED $10,000,000 AND
APPROVING CERTAIN DOCUMENTS AND TAKING CERTAIN
OTHER ACTIONS IN CONNECTION THEREWITH
WHEREAS, the City Council (the "City Council," and sometimes referred to as the "legislative body of the District") of the City of Beaumont, California (the "City"), located in Riverside County, California, has heretofore undertaken proceedings and declared the necessity to issue bonds by the City of Beaumont Community Facilities District No. 2016-3 (Sundance) (the "District") pursuant to the terms and provisions of the Mello -Roos Community Facilities Act of 1982, as amended, being Chapter 2.5, Part 1, Division 2, Title 5 of the Government Code of the State of California (the "Act"); and
WHEREAS, pursuant to resolutions adopted by the City Council on February 7, 2017 and the Act, the City formed the District; and
WHEREAS, pursuant to a resolution adopted by the City Council on February 7, 2017, a bond proposition was submitted to the qualified electors within the District and was approved by more than two-thirds of the votes cast at the elections held within the District on such date; and WHEREAS, based upon the aforesaid resolutions and election, the District is authorized pursuant to the Act to issue bonds in an aggregate principal amount not to exceed $22,000,000; and
WHEREAS, in order to effect the issuance of bonds in an aggregate principal amount not to exceed $10,000,000 to be designated as the "City of Beaumont Community Facilities District No. 2016-3 (Sundance) 2023 Special Tax Bonds" (the "Bonds"), the legislative body of the District desires to approve the forms, and authorize the execution and delivery, of a Bond Indenture, a Continuing Disclosure Certificate and a Bond Purchase Agreement for the Bonds; and
WHEREAS, in accordance with Government Code Section 53360.4, the legislative body of the District determines that a negotiated sale of the Bonds to Stifel, Nicolaus & Company, Incorporated (the "Underwriter") in accordance with the terms of the Bond Purchase Agreement for the Bonds to be entered into by the District and the Underwriter (the "Bond Purchase Agreement") will result in a lower overall cost to the District than a competitive sale; and WHEREAS, the legislative body of the District determines that it is prudent in the management of its fiscal affairs to issue the Bonds; and WHEREAS, the legislative body of the District desires to authorize the preparation of an appraisal of the taxable real property within the District (the "Appraisal") which shall be 1 4891-4669-0877v3/022599-0033
prepared for the District by Integra Realty Resources, a state -certified real estate appraiser, as defined in Section 11340 of the California Business and Professions Code, in order for the legislative body of the District to make the above determination; and WHEREAS, the legislative body of the District further wishes to approve the form of the Preliminary Official Statement with respect to the Bonds (the "Preliminary Official Statement"), presented at this meeting; and
WHEREAS, the legislative body of the District further desires to approve the form of an Acquisition Agreement relating to the District, by and among the City, the District and Tri Point Homes IE-SD, Inc. (the "Acquisition Agreement"); and
NOW, THEREFORE, the City Council of the City of Beaumont acting as the legislative body of City of Beaumont Community Facilities District No. 2016-3 (Sundance) does hereby resolve as follows:
SECTION 1. Each of the above recitals is true and correct, as is each of the findings and determinations set forth therein, and each of said recitals, findings and determinations is adopted by the legislative body of the District.
SECTION 2. The issuance of the Bonds in an aggregate principal amount not to exceed $10,000,000 is hereby authorized; and the exact principal amount to be issued shall be determined by the officer signing the Bond Purchase Agreement in accordance with Section 5 below. The Bonds shall mature on the dates and bear interest at the rates set forth in the Bond Purchase Agreement to be executed on behalf of the District in accordance with Section 5 hereof.
The Bonds shall be governed by the terms and conditions of the Bond Indenture between the District and Wilmington Trust, National Association, as trustee, presented at this meeting (the "Bond Indenture"). The Bond Indenture shall be executed by one or more of the Mayor, the City Manager, the Administrative Services Director, or the Finance Director of the City or the written designee of one of the foregoing (collectively, the "Authorized Officers") and attested to by the City Clerk, substantially in the form presented at this meeting, with such additions thereto and changes therein as the officer or officers executing the same deem necessary (a) to cure any ambiguity or defect therein, if such addition or change does not materially alter the substance or content thereof, (b) to insert the offering price(s), interest rate(s), selling compensation, principal amount per maturity, redemption dates and prices and such other related terms and provisions as limited by Section 5 hereof, or (c) to conform any provisions therein to the Bond Purchase Agreement or the Official Statement delivered to the purchasers of the Bonds. Approval of such changes shall be conclusively evidenced by the execution and delivery of the Bond Indenture by one or more Authorized Officers. Capitalized terms used in this Resolution which are not defined herein have the meanings ascribed to them in the Bond Indenture.
SECTION 3. The Bonds shall be executed on behalf of the District by the manual or facsimile signature of the Mayor and attested with the manual or facsimile signature of the City Clerk, and by the trustee to be selected by the City (the "Trustee") to act as Trustee for the Bonds.
2 4891-4669-0877v3/022599-0033
SECTION 4. The covenants set forth in the Bond Indenture above are hereby approved and shall be deemed to be covenants of the City Council, in its capacity as the legislative body of the District, and shall be complied with by the District and its officers.
SECTION 5. The form of the Bond Purchase Agreement presented at this meeting and the sale of the Bonds pursuant thereto are hereby approved, provided that the true interest cost on the Bonds does not exceed 5.75% and the discount at which the Underwriter purchases the Bonds (exclusive of original issue discount) does not exceed 1.40% of the principal amount thereof. Any one of the Authorized Officers is hereby authorized to execute the Bond Purchase Agreement, with such additions thereto and changes therein as the officer executing it may approve, such approval to be conclusively evidenced by the execution and delivery of the Bond Purchase Agreement. Each of the Mayor, or his designee, the City Manager, or her designee, the Administrative Services Director, or her designee, and the Finance Director, or her designee, is authorized to determine the day on which the Bonds are to be priced in order to attempt to produce the lowest borrowing cost for the District and may reject any terms presented by the Underwriter if determined not to be in the best interest of the District.
SECTION 6. The form of the Continuing Disclosure Certificate presented at this meeting is hereby approved; and any one of the Authorized Officers is hereby authorized and directed to execute the Continuing Disclosure Certificate in the form hereby approved, with such additions therein and changes thereto as the Authorized Officer or Authorized Officers executing the same deem necessary to cure any defect or ambiguity therein if such change does not materially alter the substance or content thereof, with such approval to be conclusively evidenced by the execution and delivery of such Continuing Disclosure Certificate.
SECTION 7. In accordance with the requirements of Section 53345.8 of the Act, the legislative body of the District hereby determines that the value of the real property in the District subject to the special tax to pay debt service on the Bonds is not less than three (3) times the principal amount of the Bonds and the principal amount of all other bonds outstanding that are secured by a special tax levied pursuant to the Act or a special assessment levied on property within the District. This determination is based on the appraised value of the property in the District subject to the special tax as set forth in the Appraisal, which Appraisal shall be made in a manner consistent with the District's policies adjusted pursuant to Section 53312.7 of the Act.
SECTION 8. The Preliminary Official Statement, in substantially the form presented to this meeting and made a part hereof is hereby approved, with such changes, insertions and omissions therein as may be approved by any of the Authorized Officers, acting alone, and the use of the Preliminary Official Statement in connection with the offering and sale of the Bonds is hereby authorized and approved. The Authorized Officers are each hereby authorized to certify on behalf of the District that the Preliminary Official Statement is deemed final as of its date, within the meaning of Rule 15c2-12 (except for the omission of certain final pricing, rating and related information as permitted by Rule 15c2-12).
SECTION 9. The preparation and delivery of the Official Statement, and its use in connection with the offering and sale of the Bonds is hereby authorized and approved. The Official Statement shall be in substantially the form of the Preliminary Official Statement, with such changes, insertions and omissions as may be approved by an Authorized Officer, such 3 4891-4669-0877v3/022599-0033
approval to be conclusively evidenced by the execution and delivery thereof. Each of the Authorized Officers is hereby authorized, and any one of the Authorized Officers is hereby directed, for and in the name of the District, to execute the final Official Statement and any amendment or supplement thereto.
SECTION 10. The form of the Acquisition Agreement presented at this meeting is hereby approved; and any one of the Authorized Officers is hereby authorized and directed to execute the Acquisition Agreement in the form hereby approved, with such additions therein and changes thereto as the Authorized Officer or Authorized Officers executing the same may deem necessary to cure any defect or ambiguity therein if such change does not materially alter the substance or content thereof, with such approval to be conclusively evidenced by the execution and delivery of such Acquisition Agreement.
SECTION 11. Each of the Authorized Officers is authorized to provide for all services necessary to effect the issuance of the Bonds. Such services shall include, but not be limited to, effecting the completion of the Appraisal, and obtaining legal services, municipal advisor services, special tax consultant services, trustee services and any other services deemed appropriate by an Authorized Officer. Any one of the Authorized Officers is authorized to pay for the cost of such services, together with other costs of issuance for the Bonds from the proceeds of the Bonds.
SECTION 12. The City Council hereby finds and declares that the issuance of the Bonds complies with the Debt Issuance and Management Policy adopted by the City with respect to debt financings (the "Debt Policy").
SECTION 13. The City Council acknowledges that the good faith estimates required by Section 5852.1 of the California Government Code are disclosed in the staff report and are available to the public at the meeting at which this Resolution is approved.
SECTION 14. Each of the Authorized Officers and the other officers and staff of the City of Beaumont and the District responsible for the fiscal affairs of the District are hereby authorized and directed to take any actions and to execute and deliver any and all documents as are necessary to accomplish the issuance, sale and delivery of the Bonds in accordance with the provisions of this Resolution and the fulfillment of the purposes of the Bonds as described in the Bond Indenture. Any document authorized herein to be signed by the City Clerk may be signed by a duly -appointed deputy city clerk or assistant city clerk.
PASSED AND ADOPTED by the City Council of the City of Beaumont, California, this 2nd day of May, 2023, by the following vote:
4 4891-4669-0877v3/022599-0033
AYES:
NAYS:
ABSENT:
ABSTAIN:
MAYOR OF THE CITY OF BEAUMONT
ATTEST:
CITY CLERK
5 4891-4669-0877v3/022599-0033
Stradling Yocca Carlson & Rauth
Draft of 4/17/23
BOND INDENTURE
Between
CITY OF BEAUMONT
COMMUNITY FACILITIES DISTRICT NO. 2016-3 (SUNDANCE)
and
WILMINGTON TRUST, NATIONAL ASSOCIATION,
as Trustee
Relating to
CITY OF BEAUMONT
COMMUNITY FACILITIES DISTRICT NO. 2016-3 (SUNDANCE)
2023 SPECIAL TAX BONDS
Dated as of May 1, 2023
4894-8942-0091v4/022599-0033
Table of Contents
Page
ARTICLE I
DEFINITIONS
Section 1.1. Definitions 1
ARTICLE II
GENERAL AUTHORIZATION AND BOND TERMS
Section 2.1. Amount, Issuance, Purpose and Nature of Bonds and Parity Bonds 11 Section 2.2. Type and Nature of Bonds and Parity Bonds 11 Section 2.3. Equality of Bonds and Parity Bonds and Pledge of Net Taxes 12 Section 2.4. Description of Bonds; Interest Rates 12
Section 2.5. Place and Form of Payment 13
Section 2.6. Form of Bonds and Parity Bonds 14
Section 2.7. Execution and Authentication 14
Section 2.8. Bond Register 15
Section 2.9. Registration of Exchange or Transfer 15
Section 2.10. Mutilated, Lost, Destroyed or Stolen Bonds or Parity Bonds 15 Section 2.11. Validity of Bonds and Parity Bonds 16
Section 2.12. Book -Entry System 16
Section 2.13. Representation Letter 17
Section 2.14. Transfers Outside Book -Entry System 17
Section 2.15. Payments to the Nominee 17
Section 2.16. Initial Depository and Nominee 17
Section 2.17. CUSIP Numbers 18
ARTICLE III
CREATION OF FUNDS AND APPLICATION OF PROCEEDS
Section 3.1. Creation of Funds; Application of Proceeds 18 Section 3.2. Deposits to and Disbursements from Special Tax Fund 19 Section 3.3. Administrative Expense Account of the Special Tax Fund 19 Section 3.4. Interest Account and Principal Account of the Special Tax Fund 20 Section 3.5. Redemption Account of the Special Tax Fund 20 Section 3.6. Reserve Account of the Special Tax Fund 22 Section 3.7. Rebate Fund 24
Section 3.8. Surplus Fund 26
Section 3.9. Acquisition and Construction Fund 27
Section 3.10. Investments 28
4894-8942-0091v4/022599-0033
Table of Contents
(continued)
Page
ARTICLE IV
REDEMPTION OF BONDS AND PARITY BONDS
Section 4.1. Redemption of Bonds 30
Section 4.2. Selection of Bonds and Parity Bonds for Redemption 33 Section 4.3. Notice of Redemption 33
Section 4.4. Partial Redemption of Bonds or Parity Bonds 34 Section 4.5. Effect of Notice and Availability of Redemption Money 34
ARTICLE V
COVENANTS AND WARRANTY
Section 5.1. Warranty 35
Section 5.2. Covenants 35
ARTICLE VI
AMENDMENTS TO INDENTURE
Section 6.1. Supplemental Indentures or Orders Not Requiring Owner Consent 39 Section 6.2. Supplemental Indentures or Orders Requiring Owner Consent 40 Section 6.3. Notation of Bonds or Parity Bonds; Delivery of Amended Bonds or Parity Bonds 41
ARTICLE VII
TRUSTEE
Section 7.1. Trustee 41
Section 7.2. Removal of Trustee 42
Section 7.3. Resignation of Trustee 43
Section 7.4. Liability of Trustee 43
Section 7.5. Merger or Consolidation 46
ARTICLE VIII
EVENTS OF DEFAULT; REMEDIES
Section 8.1. Events of Default 46
Section 8.2. Remedies of Owners 47
Section 8.3. Application of Revenues and Other Funds After Default 47 Section 8.4. Power of Trustee to Control Proceedings 48 Section 8.5. Appointment of Receivers 48
Section 8.6. Non -Waiver 48
Section 8.7. Limitations on Rights and Remedies of Owners 49 ii
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Table of Contents
(continued)
Page
Section 8.8. Termination of Proceedings 49
ARTICLE IX
DEFEASANCE AND PARITY BONDS
Section 9.1. Defeasance 50
Section 9.2. Conditions for the Issuance of Parity Bonds and Other Additional Indebtedness 51
ARTICLE X
MISCELLANEOUS
Section 10.1.
Section 10.2.
Section 10.3.
Section 10.4.
Section 10.5.
Section 10.6.
Section 10.7.
Section 10.8.
Section 10.9.
Section 10.10.
Signatures
Cancellation of Bonds and Parity Bonds 53
Execution of Documents and Proof of Ownership 53
Unclaimed Moneys 54
Provisions Constitute Contract; Governing Law; Venue 54 Future Contracts 55
Further Assurances 55
Entire Agreement; Severability 55
Notices 55
Execution in Counterparts 55
U.S.A. Patriot Act 55
S-1
EXHIBIT A FORM OF SPECIAL TAX BOND A-1
EXHIBIT B REQUISITION FOR DISBURSEMENT OF PROJECT COSTS B-1 4894-8942-0091v4/022599-0033
BOND INDENTURE
THIS BOND INDENTURE dated as of May 1, 2023, by and between CITY OF BEAUMONT COMMUNITY FACILITIES DISTRICT NO. 2016-3 (SUNDANCE) (the "District") and WILMINGTON TRUST, NATIONAL ASSOCIATION, as trustee (the "Trustee"), governs the terms of the City of Beaumont Community Facilities District No. 2016-3 (Sundance) 2023 Special Tax Bonds and any Parity Bonds issued in accordance herewith from time to time.
RECITALS :
A. The City Council of the City of Beaumont, located in the County of Riverside, California (the "City Council"), has undertaken proceedings and declared the necessity to issue bonds on behalf of the District pursuant to the terms and provisions of the Mello -Roos Community Facilities Act of 1982, as amended, being Chapter 2.5, Part 1, Division 2, Title 5, of the Government Code of the State of California (the "Act").
B. Based upon Resolution Nos. 2017-05, 2017-06 and 2017-07 adopted by the City Council on February 7, 2017 and Resolution No. 2023-_ adopted by the City Council on May 2, 2023 and an election held on February 7, 2017, authorizing the levy of a special tax and the issuance of bonds, the District is authorized to issue bonds in one or more series pursuant to the Act, in an aggregate principal amount not to exceed $22,000,000.
C. The District intends to finance various Project Costs (as defined herein) through the issuance of bonds in an aggregate principal amount of $ designated as the "City of Beaumont Community Facilities District No. 2016-3 (Sundance) 2023 Special Tax Bonds" (the "Bonds"); and
D. The District has determined that all requirements of the Act for the issuance of the Bonds have been satisfied.
NOW, THEREFORE, in order to establish the terms and conditions upon and subject to which the Bonds are to be issued, and in consideration of the premises and of the mutual covenants contained herein and of the purchase and acceptance of the Bonds by the Owners thereof, and for other valuable consideration, the receipt of which is hereby acknowledged, the District does hereby covenant and agree, for the benefit of the Owners of the Bonds and any Parity Bonds (as defined herein) which may be issued hereunder from time to time, as follows:
ARTICLE I
DEFINITIONS
Section 1.1. Definitions. Unless the context otherwise requires, the following terms shall have the following meanings:
Account. The term "Account" means any account created pursuant to this Indenture.
Acquisition and Construction Fund. The term "Acquisition and Construction Fund" means the fund by that name established pursuant to Section 3.1 hereof. 4894-8942-0091v4/022599-0033
Acquisition Agreement. The term "Acquisition Agreement" means that certain Acquisition Agreement by and among the City, the District and Tri Point Homes IE-SD, Inc., a California corporation, together with any amendments thereto.
Act. The term "Act" means the Mello -Roos Community Facilities Act of 1982, as amended, being Section 53311 et seq. of the California Government Code.
Administrative Expense Account. The term "Administrative Expense Account" means the account by that name created and established in the Special Tax Fund pursuant to Section 3.1 hereof.
Administrative Expenses. The term "Administrative Expenses" means the administrative costs with respect to the calculation and collection of the Special Taxes, including all attorneys' fees, expenses and other costs related thereto (including those of the Trustee's counsel), the fees and expenses of the Trustee, any fees and related costs for credit enhancement for the Bonds or any Parity Bonds which are not otherwise paid as Costs of Issuance, any costs related to the District's compliance with state and federal laws requiring continuing disclosure of information concerning the Bonds and the District, and any other costs otherwise incurred by City staff on behalf of the District in order to carry out the purposes of the District as set forth in the Resolution of Formation and any obligation of the District hereunder.
Administrative Expenses Cap. The term "Administrative Expenses Cap" means $30,000 per year, commencing July 1, 2023.
Alternate Penalty Account. The term "Alternate Penalty Account" means the account by that name created and established in the Rebate Fund pursuant to Section 3.1 hereof.
Annual Debt Service. The term "Annual Debt Service" means the principal amount of any Outstanding Bonds or Parity Bonds payable in a Bond Year either at maturity or pursuant to a Sinking Fund Payment and any interest payable on any Outstanding Bonds or Parity Bonds in such Bond Year, if the Bonds and any Parity Bonds are retired as scheduled.
Authorized Investments. The term "Authorized Investments" means any of the following which at the time of investment are legal investments under the laws of the State for the moneys proposed to be invested therein:
(1) For all purposes, including defeasance investments in refunding escrow accounts:
(a) cash; or
(b) obligations of, or obligations guaranteed as to principal and interest by, the U.S. or any agency or instrumentality thereof, when such obligations are backed by the full faith and credit of the U.S., including U.S. Treasury obligations, all direct or fully guaranteed obligations, Farmers Home Administration, General Services Administration, guaranteed Title XI financing, Government National Mortgage Association (GNMA) and State and Local Government Series; or (c) obligations of government -sponsored agencies that are not backed by the full faith and credit of the U.S. Government: Federal Home Loan Mortgage Corporation (FHLMC) debt obligations, Farm Credit System (formerly: Federal Land Banks, Federal Intermediate Credit Banks and Banks for Cooperatives), Federal Home Loan Banks (FHL Banks), Federal National Mortgage Association (FNMA) debt obligations, Financing Corp. (FICO) debt obligations, Resolution Funding 2 4894-8942-0091v4/022599-0033
Corp. (REFCORP) debt obligations and U.S. Agency for International Development (U.S.A.I.D.) guaranteed notes.
(2) For all purposes other than defeasance investments in refunding escrow accounts:
(a) obligations of any of the following federal agencies, which obligations represent the full faith and credit of the United States of America: Export -Import Bank, Rural Economic Community Development Administration, U.S. Maritime Administration, Small Business Administration, U.S. Department of Housing & Urban Development (PHAs), Federal Housing Administration and Federal Financing Bank;
(b) direct obligations of any of the following federal agencies, which obligations are not fully guaranteed by the full faith and credit of the United States of America: senior debt obligations issued by the Federal National Mortgage Association (FNMA) or Federal Home Loan Mortgage Corporation (FHLMC), obligations of the Resolution Funding Corporation (REFCORP) and senior debt obligations of the Federal Home Loan Bank System; (c) U.S. dollar denominated deposit accounts, federal funds and bankers' acceptances with domestic commercial banks (including those of the Trustee and its affiliates) which have a rating on their short term certificates of deposit on the date of purchase of "A-1" or "A-1+" by S&P and "P-1" by Moody's and maturing no more than 360 days after the date of purchase (ratings on holding companies are not considered as the rating of the bank); (d) commercial paper which is rated at the time of purchase in the single highest classification "A-1+" by S&P and "P-1" by Moody's and which matures not more than 270 days after the date of purchase;
(e) investments in a money market fund rated "AAm," "AAm-G" or better by S&P, including funds for which the Trustee or its affiliates provide investment advisory or other management services;
(0 pre -refunded municipal obligations defined as follows: any bonds or other obligations of any state of the United States of America, or any agency, instrumentality or local governmental unit of any such state, which are not callable at the option of the obligor prior to maturity or as to which irrevocable instructions have been given by the obligor to call on the date specified in the notice, and
(i) which are rated, based on irrevocable escrow account or fund (the "escrow"), in the highest rating category of S&P and Moody's or any successors thereto; or (ii) (1) which are fully secured as to principal and interest and redemption premium, if any, by an escrow consisting only of cash or obligations described in paragraph (1)(b) above, which escrow may be applied only to the payment of such principal of and interest and redemption premium, if any, on such bonds or other obligations on the maturity date or dates thereof or the specified redemption date or dates pursuant to such irrevocable instructions, as appropriate; and (2) which escrow is sufficient, as verified by a nationally recognized independent certified public accountant, to pay principal of and interest and redemption premium, if any, on the bonds or other obligations described in this paragraph on the maturity date or dates specified in the irrevocable instructions referred to above, as appropriate;
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(g) municipal obligations rated "Aaa/AAA" or general obligations of states with a rating of at least "Aa2/AA" or higher by both Moody's and S&P; (h) Investment Agreements (supported by appropriate opinions of counsel); and (i) the Local Agency Investment Fund of the State, created pursuant to Section 16429.1 of the California Government Code, to the extent that the Trustee is authorized to register such investment in its name.
The value of the above investments shall be determined as follows:
(a) for the purpose of determining the amount in any fund, all Authorized Investments credited to such fund shall be valued at market value. The Trustee shall determine the market value based on accepted industry standards, including the Trustee's internal systems, and from accepted industry providers. Accepted industry providers shall include, but are not limited to, pricing services provided by Financial Times Interactive Data Corporation, Bank of America Merrill Lynch or Salomon Smith Barney. Notwithstanding anything to the contrary herein, in making any valuation of investments hereunder, the Trustee may utilize computerized securities pricing services that may be available to it, including those available through its regular accounting system, and rely thereon;
(b) as to certificates of deposit and bankers acceptances: the face amount thereof, plus accrued interest thereon; and
(c) as to any investment not specified above: the value thereof established by prior agreement between the City and the Trustee.
Authorized Representative of the District. The term "Authorized Representative of the District" means the Mayor, City Manager, Administrative Services Director, Finance Director or City Clerk of the City, or any other officer or employee authorized by the City Council of the City or by an Authorized Representative of the District to undertake the action referenced in this Indenture as required to be undertaken by an Authorized Representative of the District.
Bond Counsel. The term "Bond Counsel" means Stradling Yocca Carlson & Rauth, a Professional Corporation, or another attorney at law or a firm of attorneys selected by the District of nationally recognized standing in matters pertaining to the tax-exempt nature of interest on bonds issued by states and their political subdivisions duly admitted to the practice of law before the highest court of any state of the United States of America or the District of Columbia.
Bond Register. The term "Bond Register" means the books which the Trustee shall keep or cause to be kept on which the registration and transfer of the Bonds and any Parity Bonds shall be recorded.
Bonds. The term "Bonds" means the District's 2023 Special Tax Bonds issued on May _, 2023 in the aggregate principal amount of $
Bond Year. The term "Bond Year" means the twelve-month period commencing on September 2 of each year and ending on September 1 of the following year, except that the first Bond Year for the Bonds or an issue of Parity Bonds shall begin on the Delivery Date and end on the first September 1 which is not more than 12 months after the Delivery Date. 4 4894-8942-0091v4/022599-0033
Business Day. The term "Business Day" means a day which is not a Saturday or Sunday or a day of the year on which banks or trust companies in New York, New York, Wilmington, Delaware, Los Angeles, California, or the city where the Principal Office of the Trustee is located, are not required or authorized by law, regulation or executive order, to close or to remain closed.
Certificate of an Authorized Representative. The term "Certificate of an Authorized Representative" means a written certificate or warrant request executed by an Authorized Representative of the District.
City. The term "City" means the City of Beaumont, County of Riverside, State of California.
City Council. The term "City Council" means the City Council of the City.
City Facilities Account. The term "City Facilities Account" means the account by that name created and established in the Acquisition and Construction Fund pursuant to Section 3.1 hereof.
Code. The term "Code" means the Internal Revenue Code of 1986, as amended, and any Regulations, rulings, judicial decisions, and notices, announcements, and other releases of the United States Treasury Department or Internal Revenue Service interpreting and construing it.
Continuing Disclosure Certificate. The term "Continuing Disclosure Certificate" means that certain Continuing Disclosure Certificate dated as April _, 2023, as originally executed by the District and as it may be from time to time amended or supplemented in accordance with its terms.
Costs of Issuance. The term "Costs of Issuance" means the costs and expenses incurred in connection with the formation of the District and the issuance and sale of the Bonds or any Parity Bonds, including the acceptance and initial annual fees and expenses of the Trustee and its counsel, legal fees and expenses, costs of printing the Bonds and Parity Bonds and the preliminary and final official statements for the Bonds and Parity Bonds, fees of financial consultants, costs of the appraisal and all other related fees and expenses, including reimbursement to property owners within the District for design, engineering and legal costs, as set forth in a Certificate of an Authorized Representative of the District.
Costs of Issuance Account. The term "Costs of Issuance Account" means the account by that name created and established in the Acquisition and Construction Fund pursuant to Section 3.1 hereof.
Delivery Date. The term "Delivery Date" means, with respect to the Bonds and each issue of Parity Bonds, the date on which the bonds of such issue were issued and delivered to the initial purchasers thereof.
Depository. The term "Depository" means The Depository Trust Company, New York, New York, and its successors and assigns as securities depository for the Bonds, or any other securities depository acting as Depository under Article II hereof.
Direct Debt for District Property. The term "Direct Debt for District Property" means that portion of the aggregate principal amount of the Outstanding Bonds and Parity Bonds which is allocable to the property in the District.
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District. The term "District" means City of Beaumont Community Facilities District No. 2016-3 (Sundance) established pursuant to the Act and Resolution No. 2017-06 adopted by the City Council of the City on February 7, 2017.
Event of Default. The term "Event of Default" means an event described in Section 8.1 hereof.
Fiscal Year. The term "Fiscal Year" means the period beginning on July 1 of each year and ending on the next following June 30.
Funds. The term "Funds" means any funds created pursuant to this Indenture.
Gross Taxes. The term "Gross Taxes" means the amount of all Special Taxes received by the District together with the proceeds collected from the sale of property pursuant to foreclosure for the delinquency of such Special Taxes remaining after the payment of all costs related to such foreclosure actions.
Indenture. The term "Indenture" means this Bond Indenture, together with any Supplemental Indenture approved pursuant to Article VI hereof.
Independent Financial Consultant. The term "Independent Financial Consultant" means a financial consultant or firm of such consultants generally recognized to be well qualified in the financial consulting field, appointed and paid by the District, who, or each of whom: (1) is in fact independent and not under the domination of the District or the City; (2) does not have any substantial interest, direct or indirect, in the District or the City; and (3) is not connected with the District or the City as a member, officer or employee of the District or the City, but who may be regularly retained to make annual or other reports to the District or the City.
Interest Account. The term "Interest Account" means the account by that name created and established in the Special Tax Fund pursuant to Section 3.1 hereof.
Interest Payment Date. The term "Interest Payment Date" means September 1, 2023 and each March 1 and September 1 thereafter; provided, however, that, if any such day is not a Business Day, interest up to the Interest Payment Date will be paid on the Business Day next succeeding such date.
Investment Agreement. The term "Investment Agreement" means one or more agreements for the investment of funds of the District complying with the criteria therefor as set forth in subsection (2)(h) of the definition of Authorized Investments herein.
Maximum Annual Debt Service. The term "Maximum Annual Debt Service" means the maximum sum obtained for any Bond Year prior to the final maturity of the Bonds and any Parity Bonds by adding the following for each Bond Year: (1) the principal amount of all Outstanding Bonds and Parity Bonds payable in such Bond Year either at maturity or pursuant to a Sinking Fund Payment; and (2) the interest payable on the aggregate principal amount of all Bonds and Parity Bonds Outstanding in such Bond Year if the Bonds and Parity Bonds are retired as scheduled.
Moody's. The term "Moody's" means Moody's Investors Service, Inc., its successors and assigns.
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Net Taxes. The term "Net Taxes" means Gross Taxes minus amounts set aside to pay Administrative Expenses.
Nominee. The term "Nominee" means the nominee of the Depository, which may be the Depository, as determined from time to time pursuant to Section 2.16 hereof.
Ordinance. The term "Ordinance" means Ordinance No. 1082 adopted by the City Council on February 21, 2017 providing for the levying of the Special Tax.
Outstanding. The terms "Outstanding" or "Outstanding Bonds and Parity Bonds" means all Bonds and Parity Bonds theretofore issued by the District, except: (i) Bonds and Parity Bonds theretofore cancelled or surrendered for cancellation in accordance with Section 10.1 hereof; (ii) Bonds and Parity Bonds for payment or redemption of which monies shall have been theretofore deposited in trust (whether upon or prior to the maturity or the redemption date of such Bonds or Parity Bonds), provided that, if such Bonds or Parity Bonds are to be redeemed prior to the maturity thereof, notice of such redemption shall have been given as provided in this Indenture or any applicable Supplemental Indenture for Parity Bonds; and (iii) Bonds and Parity Bonds which have been surrendered to the Trustee for transfer or exchange pursuant to Section 2.9 hereof or for which a replacement has been issued pursuant to Section 2.10 hereof.
Overlapping Debt. The term "Overlapping Debt" means with respect to any property within the District, the sum of (a) the aggregate amount of all unpaid assessments which are a lien on such property and which are pledged to secure the repayment of bonds, plus (b) a portion of the principal amount of any outstanding bonds of other community facilities districts which are payable at least partially from special taxes to be levied on such property (the "Other CFD Bonds") determined by multiplying the aggregate principal amount of the Other CFD Bonds by a fraction, the numerator of which is the amount of special taxes levied for the Other CFD Bonds on such property and the denominator of which is the total amount of special taxes levied for the Other CFD Bonds on all parcels of property which are subject to the levy of such special taxes, based upon information which is available for the then current Fiscal Year.
Owner. The term "Owner" means the person or persons in whose name or names any Bond or Parity Bond is registered.
Parity Bonds. The term "Parity Bonds" means all bonds, notes or other similar evidences of indebtedness hereafter issued, payable out of the Net Taxes and which, as provided in this Indenture or any Supplemental Indenture, rank on a parity with the Bonds.
Participants. The term "Participants" means those broker -dealers, banks and other financial institutions from time to time for which the Depository holds Bonds or Parity Bonds as securities depository.
Person. The term "Person" means natural persons, firms, corporations, partnerships, associations, trusts, public bodies and other entities.
Prepayments. The term "Prepayments" means any amounts paid by the District to the Trustee and designated by the District as a prepayment of Special Taxes for one or more parcels in the District made in accordance with the RMA.
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Principal Account. The term "Principal Account" means the account by that name created and established in the Special Tax Fund pursuant to Section 3.1 hereof.
Principal Office of the Trustee. The term "Principal Office of the Trustee" means the office of the Trustee located in Costa Mesa, California, or such other office or offices as the Trustee may designate from time to time by notice to the Owners and the District, or the designated office of any successor Trustee (or such other address as such successor Trustee may designate from time to time by notice to the Owners and the District), where it principally conducts and administers its corporate trust business under indentures pursuant to which municipal or governmental obligations are issued.
Project. The term "Project" means those public facilities described in the Acquisition Agreement which are to be acquired or constructed within and outside of the District, including all engineering, planning and design services and other incidental expenses related to such facilities and other facilities, if any, authorized by the qualified electors within the District from time to time.
Project Costs. The term "Project Costs" means the amounts necessary to finance the Project, to create and replenish any necessary reserve funds, to pay the initial and annual costs associated with the Bonds or any Parity Bonds, including, but not limited to, remarketing, credit enhancement, Trustee and other fees and expenses relating to the issuance of the Bonds or any Parity Bonds and the formation of the District, and to pay any other "incidental expenses" of the District, as such term is defined in the Act.
Rating Agency. The term "Rating Agency" means Moody's or S&P, or both, as the context requires.
Rebate Account. The term "Rebate Account" means the account by that name created and established in the Rebate Fund pursuant to Section 3.1 hereof.
Rebate Fund. The term "Rebate Fund" means the fund by that name established pursuant to Section 3.1 hereof in which there are established the Accounts described in Section 3.1 hereof.
Rebate Regulations. The term "Rebate Regulations" means any final, temporary or proposed Regulations promulgated under Section 148(0 of the Code.
Record Date. The term "Record Date" means the fifteenth day of the month preceding an Interest Payment Date, regardless of whether such day is a Business Day.
Redemption Account. The term "Redemption Account" means the account by that name created and established in the Special Tax Fund pursuant to Section 3.1 hereof.
Regulations. The term "Regulations" means the regulations adopted or proposed by the Department of Treasury from time to time with respect to obligations issued pursuant to Section 103 of the Code.
Representation Letter. The term "Representation Letter" means the Blanket Letter of Representations from the District to the Depository as described in Section 2.13 hereof.
Reserve Account. The term "Reserve Account" means the account by that name created and established in the Special Tax Fund pursuant to Section 3.1 hereof. 8 4894-8942-0091v4/022599-0033
Reserve Policy means a letter of credit, insurance policy, surety bond or other such funding instrument issued by a municipal bond insurance company rated least "Aa3" or higher by Moody's or "AA-" or higher by S&P, delivered to the Trustee for the purpose of providing all or a portion of the 2023 Bonds Reserve Requirement for the Bonds or all or a portion of the Reserve Requirement for a series of Parity Bonds.
Reserve Requirement. The term "Reserve Requirement" means, with respect to the Bonds, the 2023 Bonds Reserve Requirement, and with respect to a series of Parity Bonds, that amount as shall be set forth in the Supplemental Indenture executed and delivered in connection with such series of Parity Bonds.
Resolution of Formation. The term "Resolution of Formation" means Resolution No. 2017- 06 adopted by the City Council on February 7, 2017 pursuant to which the City Council established the District.
RMA. The term "RMA" means the Rate and Method of Apportionment of City of Beaumont Community Facilities District No. 2016-3 (Sundance) approved by the qualified electors of the District at the February 7, 2017 election.
Sinking Fund Payment. The term "Sinking Fund Payment" means the annual payment to be deposited in the Redemption Account to redeem a portion of the Term Bonds in accordance with the schedules set forth in Section 4.1(b) hereof and any annual sinking fund payment schedule to retire any Parity Bonds which are designated as Term Bonds.
Six -Month Period. The term "Six -Month Period" means the period of time beginning on the Delivery Date of each issue of Bonds or Parity Bonds, as applicable, and ending six consecutive months thereafter, and each six-month period thereafter until the latest maturity date of the Bonds and the Parity Bonds (and any obligations that refund an issue of the Bonds or Parity Bonds).
Special Tax Administrator. The term "Special Tax Administrator" means the individual or entity appointed by the City to administer the calculation and collection of the Special Taxes.
Special Tax Fund. The term "Special Tax Fund" means the fund by that name created and established pursuant to Section 3.1 hereof.
Special Taxes. The term "Special Taxes" means the taxes authorized to be levied by the District on property within the District in accordance with the Ordinance, the Resolution of Formation, the Act and the voter approval obtained at the February 7, 2017 election in the District, including any scheduled payments and any Prepayments thereof, the net proceeds of the redemption or sale of property sold as a result of foreclosure of the lien of the Special Taxes to the amount of said lien and penalties and interest thereon; provided that any delinquent Special Tax sold to an independent third -party or to the City for 100% of the delinquent amount shall no longer be pledged hereunder to the payment of the Bonds or Parity Bonds.
S&P. The term "S&P" means S&P Global Ratings, a Standard & Poor's Financial Services LLC business, its successors and assigns.
State. The term "State" means the State of California.
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Subaccount. The term "Subaccount" means any subaccount created pursuant to this Indenture.
Supplemental Indenture. The term "Supplemental Indenture" means any supplemental indenture amending or supplementing this Indenture.
Surplus Fund. The term "Surplus Fund" means the fund by that name created and established pursuant to Section 3.1 hereof.
Tax Certificate. The term "Tax Certificate" means the certificate by that name to be executed by the District on a Delivery Date to establish certain facts and expectations and which contains certain covenants relevant to compliance with the Code.
Tax -Exempt. The term "Tax -Exempt" means, with reference to an Authorized Investment, an Authorized Investment the interest earnings on which are excludable from gross income for federal income tax purposes pursuant to Section 103(a) of the Code, other than one described in Section 57(a)(5)(C) of the Code.
Taxable Property. The term "Taxable Property" has the meaning ascribed to it in the RMA.
Term Bonds. The term "Term Bonds" means the Bonds maturing on September 1, 20_, September 1, 20_ and September 1, 20_ and any term maturities of an issue of Parity Bonds as specified in a Supplemental Indenture.
Treasurer. The term "Treasurer" means the Treasurer -Tax Collector of the County of Riverside, or his or her written designee.
Trustee. The term "Trustee" means Wilmington Trust, National Association, a national banking association duly organized and existing under the laws of the United States, at its designated corporate trust office in Costa Mesa, California, and its successors or assigns, or any other bank or trust company which may at any time be substituted in its place as provided in Sections 7.2 or 7.3, and any successor thereto.
2023 Bonds Reserve Subaccount. The term "2023 Bonds Reserve Subaccount" means the Subaccount by that name created and established in the Reserve Account pursuant to Section 3.1 hereof.
2023 Bonds Reserve Requirement. The term "2023 Bonds Reserve Requirement" means that amount as of any date of calculation equal to the lesser of: (i) 10% of the initial principal amount of the Bonds; (ii) Maximum Annual Debt Service on the then Outstanding Bonds; (iii) 125% of average Annual Debt Service on the then Outstanding Bonds; provided, however, that the 2023 Bonds Reserve Requirement shall not exceed $
Underwriter. The term "Underwriter" means, with respect to the Bonds, Stifel Nicolaus & Company, Incorporated and with respect to each issue of Parity Bonds, the institution or institutions, if any, with whom the District enters into a purchase contract for the sale of such issue.
Value of District Property. The term "Value of District Property" means for all parcels of property in the District which are subject to the levy of the Special Taxes, either (i) the fair market value, as of the date of the appraisal provided for below of such parcels, including with respect to 10 4894-8942-0091v4/022599-0033
such parcels the value of the then existing improvements thereon, as estimated by an appraiser, who shall be a State of California certified general real estate appraiser selected and employed by the District, in an appraisal performed within ninety (90) days preceding the date of such determination based upon a methodology of valuation consistent with the City's policy for appraisals, provided that a mass appraisal methodology may be applied when valuing Developed Property (as defined in the RMA); (ii) the full cash value of any or all of such parcels, including with respect to such parcels the value of the improvements thereon, as set forth on the last equalized assessment roll of the County Assessor of the County of Riverside; or (iii) a combination of the value derived from the foregoing paragraphs (i) and (ii).
ARTICLE II
GENERAL AUTHORIZATION AND BOND TERMS
Section 2.1. Amount, Issuance, Purpose and Nature of Bonds and Parity Bonds.
Under and pursuant to the Act, the Bonds in the aggregate principal amount of $ , together with any Parity Bonds authorized by the City Council in accordance with Section 9.2 hereof, shall be issued for the purposes of financing and/or refinancing the Project, paying Costs of Issuance and funding the applicable Subaccount of the Reserve Account with respect to the Bonds or a series of Parity Bonds; provided that the aggregate principal amount of the Bonds and any Parity Bonds shall not exceed the total indebtedness presently authorized or subsequently authorized by the qualified electors within the District in accordance with the Act. The Bonds and any Parity Bonds shall be and are limited obligations of the District and shall be payable as to the principal thereof and interest thereon and any premiums upon the redemption thereof solely from the Net Taxes and the other amounts in the Special Tax Fund (other than amounts in the Administrative Expense Account of the Special Tax Fund and provided that amounts in the 2023 Bonds Reserve Subaccount shall only secure and be available to pay the principal of, redemption premium, if any, and interest on the Bonds, and amounts in the Subaccount of the Reserve Account established for a series of Parity Bonds shall secure only and be available to pay the principal of, redemption premium, if any, and interest on, only such series of Parity Bonds).
Section 2.2. Type and Nature of Bonds and Parity Bonds. Neither the faith and credit nor the taxing power of the City, the State of California, or any political subdivision thereof other than the District is pledged to the payment of the Bonds or any Parity Bonds. Except for the Net Taxes, no other taxes are pledged to the payment of the Bonds or any Parity Bonds. The Bonds and any Parity Bonds are not general or special obligations of the City nor general obligations of the District, but are limited obligations of the District payable solely from certain amounts deposited by the District in the Special Tax Fund (exclusive of the Administrative Expense Account), as more fully described herein. The District's limited obligation to pay the principal of, premium, if any, and interest on the Bonds and any Parity Bonds from amounts in the Special Tax Fund (exclusive of the Administrative Expense Account) is absolute and unconditional, free of deductions and without any abatement, offset, recoupment, diminution or set-off whatsoever. No Owner of the Bonds or any Parity Bonds may compel the exercise of the taxing power by the District (except as pertains to the Special Taxes) or the City or the forfeiture of any of their property. The principal of and interest on the Bonds and any Parity Bonds and premiums upon the redemption thereof, if any, are not a debt of the City, the State of California or any of its political subdivisions within the meaning of any constitutional or statutory limitation or restriction. The Bonds and any Parity Bonds are not a legal or equitable pledge, charge, lien, or encumbrance upon any of the District's property, or upon any of its income, receipts or revenues, except the Net Taxes and other amounts in the Special Tax Fund 11 4894-8942-0091v4/022599-0033
(exclusive of the Administrative Expense Account) which are, under the terms of this Indenture and the Act, set aside for the payment of the Bonds, any Parity Bonds and interest thereon, and neither the members of the legislative body of the District or the members of the City Council nor any persons executing the Bonds or any Parity Bonds are liable personally on the Bonds or any Parity Bonds, by reason of their issuance.
Notwithstanding anything to the contrary contained in this Indenture, the District shall not be required to advance any money derived from any source of income other than the Net Taxes for the payment of the interest on or the principal of the Bonds or any Parity Bonds, or for the performance of any covenants contained herein. The District may, however, advance funds for any such purpose, provided that such funds are derived from a source legally available for such purpose.
Section 2.3. Equality of Bonds and Parity Bonds and Pledge of Net Taxes. Pursuant to the Act and this Indenture, the Bonds and any Parity Bonds shall be equally payable from and secured by a first pledge of and lien on the Net Taxes and other amounts in the Special Tax Fund (exclusive of the Administrative Expense Account), without priority for number, date of the Bonds or Parity Bonds, date of sale, date of execution, or date of delivery, and the payment of the interest on and principal of the Bonds and any Parity Bonds and any premiums upon the redemption thereof, shall be exclusively paid from the Net Taxes and other amounts in the Special Tax Fund (exclusive of the Administrative Expense Account) which are hereby set aside for the payment of the Bonds and any Parity Bonds; provided that any delinquent Special Tax sold to an independent third -party or to the City for 100% of the delinquent amount shall no longer be pledged hereunder to the payment of the Bonds or Parity Bonds. Amounts in the Special Tax Fund (other than the Administrative Expense Account therein) shall constitute a trust fund held for the benefit of the Owners to be applied to the payment of the interest on and principal of the Bonds and any Parity Bonds and, so long as any of the Bonds and any Parity Bonds or interest thereon remain Outstanding, shall not be used for any other purpose, except as permitted by this Indenture or any Supplemental Indenture.
Notwithstanding any provision contained in this Indenture to the contrary, Net Taxes deposited in the Rebate Fund and the Surplus Fund shall no longer be considered to be pledged to the Bonds or any Parity Bonds, and none of the Rebate Fund, the Surplus Fund, the Acquisition and Construction Fund or the Administrative Expense Account of the Special Tax Fund shall be construed as a trust fund held for the benefit of the Owners.
Notwithstanding anything to the contrary contained in this Indenture, amounts in the 2023 Bonds Reserve Subaccount shall only secure and be available to pay the principal of, redemption premium, if any, and interest on the Bonds, and amounts in the Subaccount of the Reserve Account established for a series of Parity Bonds shall secure only and be available to pay the principal of, redemption premium, if any, and interest on, only such series of Parity Bonds.
Nothing in this Indenture or any Supplemental Indenture shall preclude: (i) subject to the limitations contained hereunder, the redemption prior to maturity of any Bonds or Parity Bonds subject to call and redemption and payment of said Bonds or Parity Bonds from proceeds of refunding bonds issued under the Act as the same now exists or as hereafter amended, or under any other law of the State of California; or (ii) the issuance, subject to the limitations contained herein, of Parity Bonds which shall be payable from Net Taxes.
Section 2.4. Description of Bonds; Interest Rates. The Bonds and any Parity Bonds shall be issued in fully registered form in denominations of $5,000 or any integral multiple thereof.
The Bonds and any Parity Bonds of each issue shall be numbered as desired by the Trustee. 12 4894-8942-0091v4/022599-0033
The Bonds shall be designated "City of Beaumont Community Facilities District No. 2016-3 (Sundance) 2023 Special Tax Bonds." The Bonds shall be dated as of their Delivery Date and shall mature and be payable on September 1 in the years and in the aggregate principal amounts and shall be subject to and shall bear interest at the rates set forth in the table below payable on September 1, 2023 and each Interest Payment Date thereafter:
Maturity Date Principal Interest
September 1 Amount Rate
*Term Bond
Interest shall be payable on each Bond and Parity Bond from the date established in accordance with Section 2.5 below on each Interest Payment Date thereafter until the principal sum of such Bond or Parity Bond has been paid; provided, however, that if at the maturity date of any Bond or Parity Bond (or if the same is redeemable and shall be duly called for redemption, then at the date fixed for redemption) funds are available for the payment or redemption thereof in full, in accordance with the terms of this Indenture, such Bonds and Parity Bonds shall then cease to bear interest. Interest due on the Bonds and Parity Bonds shall be calculated on the basis of a 360 -day year comprised of twelve 30 -day months.
Section 2.5. Place and Form of Payment. The Bonds and Parity Bonds shall be payable both as to principal and interest, and as to any premiums upon the redemption thereof, in lawful money of the United States of America. The principal of the Bonds and Parity Bonds and any premiums due upon the redemption thereof shall be payable upon presentation and surrender thereof at the Principal Office of the Trustee, or at the designated office of any successor Trustee. If the Nominee of the Bonds or Parity Bonds is registered to Cede & Co., payment of principal and any premiums shall be made without presentment. Interest on any Bond or Parity Bond shall be payable from the Interest Payment Date next preceding the date of authentication of such Bond or Parity Bond, unless: (i) such date of authentication is an Interest Payment Date, in which event interest shall be payable from such date of authentication; (ii) the date of authentication is after a Record Date but prior to the immediately succeeding Interest Payment Date, in which event interest shall be payable from the Interest Payment Date immediately succeeding the date of authentication; or (iii) the date of authentication is prior to the close of business on the first Record Date occurring after the issuance of such Bond or Parity Bond, in which event interest shall be payable from the dated date of such Bond or Parity Bond, as applicable; provided, however, that if at the time of authentication of such Bond or 13 4894-8942-0091v4/022599-0033
Page234of786
Parity Bond, interest is in default, interest on such Bond or Parity Bond shall be payable from the last Interest Payment Date to which the interest has been paid or made available for payment or, if no interest has been paid or made available for payment on such Bond or Parity Bond, interest on such Bond or Parity Bond shall be payable from its dated date. Interest on any Bond or Parity Bond shall be paid to the person whose name shall appear in the Bond Register as the Owner of such Bond or Parity Bond as of the close of business on the Record Date. Such interest shall be paid by check of the Trustee mailed by first class mail, postage prepaid, to such Owner at his or her address as it appears on the Bond Register. In addition, upon a request in writing received by the Trustee on or before the applicable Record Date from an Owner of $1,000,000 or more in principal amount of the Bonds or of any issue of Parity Bonds, payment shall be made on the Interest Payment Date by wire transfer in immediately available funds to an account within the United States of America designated by such Owner.
Section 2.6. Form of Bonds and Parity Bonds. The definitive Bonds may be printed from steel engraved or lithographic plates or may be typewritten. The Bonds and the certificate of authentication shall be substantially in the form attached hereto as Exhibit A, which form is hereby approved and adopted as the form of such Bonds and of the certificate of authentication. Each issue of Parity Bonds and the certificate of authentication therefor shall be in the form provided in the Supplemental Indenture for such issue of Parity Bonds.
Until definitive Bonds or Parity Bonds, as applicable, shall be prepared, the District may cause to be executed and delivered in lieu of such definitive Bonds or Parity Bonds temporary bonds in typed, printed, lithographed or engraved form and in fully registered form, subject to the same provisions, limitations and conditions as are applicable in the case of definitive Bonds or Parity Bonds, except that they may be in any denominations authorized by the District. Until exchanged for definitive Bonds or Parity Bonds, as applicable, any temporary bond shall be entitled and subject to the same benefits and provisions of this Indenture as definitive Bonds and Parity Bonds. If the District issues temporary Bonds or Parity Bonds, it shall execute and furnish definitive Bonds or Parity Bonds, as applicable, without unnecessary delay and thereupon any temporary Bond or Parity Bond may be surrendered to the Trustee at the Principal Office of the Trustee, without expense to the Owner and at the sole expense of the District, in exchange for a definitive Bond or Parity Bond of the same issue, maturity, interest rate and principal amount in any authorized denomination. All temporary Bonds or Parity Bonds so surrendered shall be cancelled by the Trustee and shall not be reissued.
Section 2.7. Execution and Authentication. The Bonds and Parity Bonds shall be signed on behalf of the District by the manual or facsimile signature of the Mayor of the City and countersigned by the manual or facsimile signature of the City Clerk of the City, or any duly appointed Deputy Clerk, in their capacity as officers of the District, and the seal of the City or the District (or a facsimile thereof) may be impressed, imprinted, engraved or otherwise reproduced thereon, and attested by the signature of the City Clerk of the City. In case any one or more of the officers who shall have signed or sealed any of the Bonds or Parity Bonds shall cease to be such officer before the Bonds or Parity Bonds so signed and sealed have been authenticated and delivered by the Trustee (including new Bonds or Parity Bonds delivered pursuant to the provisions hereof with reference to the transfer and exchange of Bonds or Parity Bonds or lost, stolen, destroyed or mutilated Bonds or Parity Bonds), such Bonds and Parity Bonds shall nevertheless be valid and may be authenticated and delivered as herein provided, and may be issued as if the person who signed or sealed such Bonds or Parity Bonds had not ceased to hold such office. 14 4894-8942-0091v4/022599-0033
Only the Bonds as shall bear thereon such certificate of authentication in the form set forth in Exhibit A attached hereto shall be entitled to any right or benefit under this Indenture, and no Bond shall be valid or obligatory for any purpose until such certificate of authentication shall have been duly executed by the Trustee.
Section 2.8. Bond Register. The Trustee will keep or cause to be kept, at its office, sufficient books for the registration and transfer of the Bonds and any Parity Bonds which shall upon reasonable prior notice be open to inspection by the District during all regular business hours, and, subject to the limitations set forth in Section 2.9 below, upon presentation for such purpose, the Trustee shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be transferred on said Bond Register, Bonds and any Parity Bonds as herein provided.
The District and the Trustee may treat the Owner of any Bond or Parity Bond whose name appears on the Bond Register as the absolute Owner of that Bond or Parity Bond for any and all purposes and the District and the Trustee shall not be affected by any notice to the contrary. The District and the Trustee may rely on the address of the Owner as it appears in the Bond Register for any and all purposes. It shall be the duty of the Owner to give prompt written notice to the Trustee of any change in the Owner's address so that the Bond Register may be revised accordingly.
Section 2.9. Registration of Exchange or Transfer. Subject to the limitations set forth in the following paragraph, the registration of any Bond or Parity Bond may, in accordance with its terms, be transferred upon the Bond Register by the person in whose name it is registered, in person or by his or her duly authorized attorney, upon surrender of such Bond or Parity Bond for cancellation at the office of the Trustee, accompanied by delivery of written instrument of transfer in a form acceptable to the Trustee and duly executed by the Owner or his or her duly authorized attorney.
Bonds or Parity Bonds may be exchanged at the office of the Trustee for a like aggregate principal amount of Bonds or Parity Bonds for other authorized denominations of the same maturity and issue. The Trustee shall not collect from the Owner any charge for any new Bond or Parity Bond issued upon any exchange or transfer, but shall require the Owner requesting such exchange or transfer to pay any tax or other governmental charge required to be paid with respect to such exchange or transfer. Whenever any Bonds or Parity Bonds shall be surrendered for registration of transfer or exchange, the District shall execute and the Trustee shall authenticate and deliver a new Bond or Bonds or a new Parity Bond or Parity Bonds, as applicable, of the same issue and maturity, for a like aggregate principal amount; provided that the Trustee shall not be required to register transfers or make exchanges of: (i) Bonds or Parity Bonds for a period of 15 days next preceding any selection of the Bonds or Parity Bonds to be redeemed; or (ii) any Bonds or Parity Bonds chosen for redemption.
The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer or exchange imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Bond or Parity Bond other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by the terms of, this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.
Section 2.10. Mutilated, Lost, Destroyed or Stolen Bonds or Parity Bonds. If any Bond or Parity Bond shall become mutilated, the District shall execute, and the Trustee shall authenticate 15 4894-8942-0091v4/022599-0033
and deliver, a new Bond or Parity Bond of like tenor, date, issue and maturity in exchange and substitution for the Bond or Parity Bond so mutilated, but only upon surrender to the Trustee of the Bond or Parity Bond so mutilated. Every mutilated Bond or Parity Bond so surrendered to the Trustee shall be cancelled by the Trustee pursuant to Section 10.1 hereof. If any Bond or Parity Bond shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Trustee and, if such evidence is satisfactory to the Trustee and, if any indemnity satisfactory to the Trustee shall be given, the District shall execute and the Trustee shall authenticate and deliver a new Bond or Parity Bond, as applicable, of like tenor, maturity and issue, numbered and dated as the Trustee shall determine in lieu of and in substitution for the Bond or Parity Bond so lost, destroyed or stolen. Any Bond or Parity Bond issued in lieu of any Bond or Parity Bond alleged to be mutilated, lost, destroyed or stolen shall be equally and proportionately entitled to the benefits hereof with all other Bonds and Parity Bonds issued hereunder. The Trustee shall not treat both the original Bond or Parity Bond and any replacement Bond or replacement Parity Bond as being Outstanding for the purpose of determining the principal amount of Bonds or Parity Bonds which may be executed, authenticated and delivered hereunder or for the purpose of determining any percentage of Bonds or Parity Bonds Outstanding hereunder, but both the original and replacement Bond or Parity Bond shall be treated as one and the same. Notwithstanding any other provision of this Section, in lieu of delivering a new Bond or Parity Bond which has been mutilated, lost, destroyed or stolen, and which has matured, the Trustee may make payment with respect to such Bonds or Parity Bonds.
Section 2.11. Validity of Bonds and Parity Bonds. The validity of the authorization and issuance of the Bonds and any Parity Bonds shall not be affected in any way by any defect in any proceedings taken by the District for the financing of the Project, or by the invalidity, in whole or in part, of any contracts made by the District in connection therewith, and shall not be dependent upon the completion of the financing of the Project or upon the performance by any Person of his or her obligation with respect to the Project, and the recital contained in the Bonds or any Parity Bonds that the same are issued pursuant to the Act and other applicable laws of the State shall be conclusive evidence of their validity and of the regularity of their issuance.
Section 2.12. Book -Entry System. The Bonds shall be initially delivered in the form of a separate single fully registered Bond (which may be typewritten) for each maturity of the Bonds.
Upon initial delivery, the ownership of each such Bond shall be registered in the registration books kept by the Trustee in the name of the Nominee as nominee of the Depository. Except as provided in Section 2.14 hereof, all of the Outstanding Bonds shall be registered in the registration books kept by the Trustee in the name of the Nominee. At the election of the District, any Parity Bonds may also be issued as book -entry bonds registered in the name of the Nominee as provided herein, in which case the references in Sections 2.12 through 2.15 to "Bonds" shall be applicable to such Parity Bonds.
With respect to Bonds registered in the Bond Register kept by the Trustee in the name of the Nominee, the District and the Trustee shall have no responsibility or obligation to any such Participant or to any Person on behalf of which such a Participant holds an interest in the Bonds.
Without limiting the immediately preceding sentence, the District and the Trustee shall have no responsibility or obligation with respect to: (i) the accuracy of the records of the Depository, the Nominee, or any Participant with respect to any ownership interest in the Bonds; (ii) the delivery to any Participant or any other Person, other than an Owner as shown in the registration books kept by the Trustee, of any notice with respect to the Bonds, including any notice of redemption; (iii) the selection by the Depository and its Participants of the beneficial interests in the Bonds to be redeemed in the event that the Bonds are redeemed in part; or (iv) the payment to any Participant or 16 4894-8942-0091v4/022599-0033
any other Person, other than an Owner as shown in the registration books kept by the Trustee, of any amount with respect to principal of, premium, if any, or interest due with respect to the Bonds. The District and the Trustee may treat and consider the Person in whose name each Bond is registered in the registration books kept by the Trustee as the holder and absolute owner of such Bond for the purpose of payment of the principal of, premium, if any, and interest on such Bond, for the purpose of giving notices of redemption and other matters with respect to such Bond, for the purpose of registering transfers with respect to such Bond and for all other purposes whatsoever. The Trustee shall pay all principal of, premium, if any, and interest due on the Bonds only to or upon the order of the respective Owner, as shown in the registration books kept by the Trustee, or their respective attorneys duly authorized in writing, and all such payments shall be valid and effective to satisfy and discharge fully the District's obligations with respect to payment of the principal, premium, if any, and interest due on the Bonds to the extent of the sum or sums so paid. No Person other than an Owner, as shown in the registration books kept by the Trustee, shall receive a Bond evidencing the obligation of the District to make payments of principal, premium, if any, and interest pursuant to this Indenture. Upon delivery by the Depository to the Trustee and the District of written notice to the effect that the Depository has determined to substitute a new nominee in place of the Nominee, and subject to the provisions herein with respect to Record Dates, the word Nominee in this Indenture shall refer to such new nominee of the Depository.
Section 2.13. Representation Letter. In order to qualify the Bonds and any Parity Bonds which the District elects to register in the name of the Nominee for the Depository's book -entry system, an Authorized Representative of the District is hereby authorized to execute from time to time and deliver to such Depository the Representation Letter. The execution and delivery of the Representation Letter shall not in any way limit the provisions of Section 2.12 or in any other way impose upon the District or the Trustee any obligation whatsoever with respect to persons having interests in the Bonds other than the Owners, as shown on the registration books kept by the Trustee.
The District agrees to take all action necessary to continuously comply with all representations made by it in the Representation Letter. In addition to the execution and delivery of the Representation Letter, the Authorized Representatives of the District are hereby authorized to take any other actions, not inconsistent with this Indenture, to qualify the Bonds for the Depository's book -entry program.
Section 2.14. Transfers Outside Book -Entry System. In the event that: (i) the Depository determines not to continue to act as securities depository for the Bonds; or (ii) the District determines that the Depository shall no longer so act, then the District will discontinue the book -entry system with the Depository. If the District fails to identify another qualified securities depository to replace the Depository then the Bonds so designated shall no longer be restricted to being registered in the registration books kept by the Trustee in the name of the Nominee, but shall be registered in whatever name or names Persons transferring or exchanging Bonds shall designate, in accordance with the provisions of Section 2.9 hereof.
Section 2.15. Payments to the Nominee. Notwithstanding any other provisions of this Indenture to the contrary, so long as any Bond is registered in the name of the Nominee, all payments with respect to principal, premium, if any, and interest due with respect to such Bond and all notices with respect to such Bond shall be made and given, respectively, as provided in the Representation Letter or as otherwise instructed by the Depository.
Section 2.16. Initial Depository and Nominee. The initial Depository under this Indenture shall be The Depository Trust Company, New York, New York. The initial Nominee shall be Cede & Co., as Nominee of The Depository Trust Company, New York, New York. 17 4894-8942-0091v4/022599-0033
Section 2.17. CUSIP Numbers. The District in issuing Bonds or Parity Bonds, as applicable, may use "CUSIP" numbers, and, if so, the Trustee shall use "CUSIP" numbers in notices of redemption as a convenience to Owners; provided that the Trustee shall have no liability for any defect in the "CUSIP" numbers as they appear on any Bond, Parity Bond, notice or elsewhere, and, provided further that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Bonds or Parity Bonds, as applicable, or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Bonds or Parity Bonds, as applicable, and any such redemption shall not be affected by any defect in or omission of such numbers. The District will promptly notify the Trustee in writing of any change in the "CUSIP" numbers.
ARTICLE III
CREATION OF FUNDS AND APPLICATION OF PROCEEDS
Section 3.1. Creation of Funds; Application of Proceeds. (a) There are hereby created and established and shall be maintained by the Trustee the following funds and accounts:
(1) The City of Beaumont Community Facilities District No. 2016-3 (Sundance) Special Tax Fund (the "Special Tax Fund") (in which there shall be established and created an Interest Account, a Principal Account, a Redemption Account, a Reserve Account (and within the Reserve Account, the 2023 Bonds Reserve Subaccount), and an Administrative Expense Account). (2) The City of Beaumont Community Facilities District No. 2016-3 (Sundance) Rebate Fund (the "Rebate Fund") (in which there shall be established a Rebate Account and an Alternate Penalty Account).
(3) The City of Beaumont Community Facilities District No. 2016-3 (Sundance) Acquisition and Construction Fund (the "Acquisition and Construction Fund") (in which there shall be established a City Facilities Account and a Costs of Issuance Account). (4) The City of Beaumont Community Facilities District No. 2016-3 (Sundance) Surplus Fund (the "Surplus Fund").
The amounts on deposit in the foregoing Funds, Accounts and Subaccounts shall be held by the Trustee. The Trustee shall invest and disburse the amounts in such Funds, Accounts and Subaccounts in accordance with the provisions of this Article III and shall disburse investment earnings thereon in accordance with the provisions of Section 3.10 hereof.
In connection with the issuance of any Parity Bonds as described in Section 9.2, the Trustee, at the written direction of an Authorized Representative of the District, may create new Funds, Accounts and Subaccounts, or may create additional Accounts and Subaccounts within any of the foregoing Funds and Accounts for the purpose of separately accounting for the proceeds of the Bonds and any Parity Bonds.
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(b) The proceeds of the sale of the Bonds, together with $ funds on hand from collected Special Taxes, shall be received by the Trustee on behalf of the District and deposited and transferred as follows:
(1) $ shall be transferred to the Costs of Issuance Account of the Acquisition and Construction Fund to pay the Costs of Issuance of the Bonds; (2) $ shall be transferred to the 2023 Bonds Reserve Subaccount of the Reserve Account to fund the 2023 Bonds Reserve Requirement; (3) $ shall be transferred to the City Facilities Account of the Acquisition and Construction Fund.
The Trustee may, in its discretion, establish temporary funds or accounts in its books and records to facilitate such transfers.
Section 3.2. Deposits to and Disbursements from Special Tax Fund. (a) Except for Prepayments, which shall be deposited to the Redemption Account of the Special Tax Fund, the Trustee shall, on each date on which the Special Taxes are received from the District, deposit the Special Taxes in the Special Tax Fund to be held in trust for the Owners. The Trustee shall transfer the Special Taxes on deposit in the Special Tax Fund on the dates and in the amounts set forth in the following Sections, in the following order of priority, to:
(1) the Administrative Expense Account of the Special Tax Fund up to the Administrative Expenses Cap;
(2) the Interest Account of the Special Tax Fund;
(3) the Principal Account of the Special Tax Fund;
(4) the Redemption Account of the Special Tax Fund;
(5) the Subaccounts of the Reserve Account of the Special Tax Fund, on a proportionate basis based on the outstanding principal amount of the Bonds and any Parity Bonds; (6) the Administrative Expense Account of the Special Tax Fund to the extent that Administrative Expenses exceed or are expected to exceed the Administrative Expense Cap; (7)
(8)
the Rebate Fund; and
the Surplus Fund.
(b) At maturity of all of the Bonds and Parity Bonds and, after all principal and interest then due on the Bonds and Parity Bonds then Outstanding have been paid or provided for and any amounts owed to the Trustee have been paid in full, moneys in the Special Tax Fund and any accounts therein may be used by the District for any lawful purpose.
Section 3.3. Administrative Expense Account of the Special Tax Fund. The Trustee shall transfer from the Special Tax Fund and deposit in the Administrative Expense Account of the 19 4894-8942-0091v4/022599-0033
Special Tax Fund from time to time amounts necessary to make timely payment of Administrative Expenses as set forth in a Certificate of an Authorized Representative of the District; provided, however, that, except as set forth in the following sentence, the total amount transferred with respect to a Bond Year shall not exceed the Administrative Expenses Cap until such time as there has been deposited to the Interest Account and the Principal Account an amount, together with any amounts already on deposit therein, that is sufficient to pay the interest and principal on all Bonds and Parity Bonds due in such Bond Year and to restore the 2023 Bonds Reserve Subaccount to the 2023 Bonds Reserve Requirement and any other Subaccount of the Reserve Account to the applicable Reserve Requirement. Notwithstanding the foregoing, amounts in excess of the Administrative Expenses Cap may be transferred to the Administrative Expense Account to the extent necessary to collect delinquent Special Taxes. Subject to Section 3.10, moneys in the Administrative Expense Account of the Special Tax Fund may be invested in any Authorized Investments as directed in writing by an Authorized Representative of the District and shall be disbursed as directed in a Certificate of an Authorized Representative.
Section 3.4. Interest Account and Principal Account of the Special Tax Fund. The principal of and interest due on the Bonds and any Parity Bonds until maturity, other than principal due upon redemption, shall be paid by the Trustee from the Principal Account and the Interest Account of the Special Tax Fund, respectively.
For the purpose of assuring that the payment of principal of and interest on the Bonds and any Parity Bonds will be made when due, after making the transfer required by Section 3.3, at least one Business Day prior to each March 1 and September 1, the Trustee shall make the following transfers from the Special Tax Fund first to the Interest Account and then to the Principal Account; provided, however, that to the extent that deposits have been made in the Interest Account or the Principal Account from the proceeds of the sale of an issue of the Bonds or any Parity Bonds, or otherwise, the transfer from the Special Tax Fund need not be made; and provided, further, that, if amounts in the Special Tax Fund (exclusive of the Reserve Account and the Administrative Expense Account) are inadequate to make the foregoing transfers, then any deficiency shall be made up by transfers from the Subaccounts of the Reserve Account:
(a) To the Interest Account, an amount such that the balance in the Interest Account one Business Day prior to each Interest Payment Date shall be equal to the installment of interest due on the Bonds and any Parity Bonds on said Interest Payment Date and any installment of interest due on a previous Interest Payment Date which remains unpaid. Moneys in the Interest Account shall be used for the payment of interest on the Bonds and any Parity Bonds as the same become due. (b) To the Principal Account, an amount such that the balance in the Principal Account one Business Day prior to September 1 of each year, commencing September 1, 2023, shall equal the principal payment due on the Bonds and any Parity Bonds maturing on such September 1 and any principal payment due on a previous September 1 which remains unpaid. Moneys in the Principal Account shall be used for the payment of the principal of such Bonds and any Parity Bonds as the same become due at maturity.
Section 3.5. Redemption Account of the Special Tax Fund. (a) With respect to each September 1 on which a Sinking Fund Payment is due, after the deposits have been made to the Administrative Expense Account, the Interest Account and the Principal Account of the Special Tax Fund as required by Sections 3.3 and 3.4 hereof, the Trustee 20 4894-8942-0091v4/022599-0033
shall next transfer into the Redemption Account of the Special Tax Fund from the Special Tax Fund the amount needed to make the balance in the Redemption Account one Business Day prior to each September 1 on which a Sinking Fund Payment is due equal to the Sinking Fund Payment due on any Outstanding Bonds and Parity Bonds on such September 1; provided, however, that, if amounts in the Special Tax Fund are inadequate to make the foregoing transfers, then any deficiency with respect to the Bonds shall be made up by an immediate transfer from the 2023 Bonds Reserve Subaccount and any deficiency with respect to a series of Parity Bonds shall be made up by an immediate transfer from the Subaccount of the Reserve Account for such series of Parity Bonds, if funded, pursuant to Section 3.6 below. Moneys so deposited in the Redemption Account shall be used and applied by the Trustee to call and redeem Term Bonds in accordance with the Sinking Fund Payment schedules set forth in Section 4.1(b) hereof, and to redeem Parity Bonds in accordance with any Sinking Fund Payment schedule in the Supplemental Indenture for such Parity Bonds. (b) After making the deposits to the Administrative Expense Account, the Interest Account and the Principal Account of the Special Tax Fund pursuant to Sections 3.3 and 3.4 above and to the Redemption Account for Sinking Fund Payments then due pursuant to subparagraph (a) of this Section, and in accordance with the District's election to call Bonds for optional redemption as set forth in Section 4.1(a) hereof, or to call Parity Bonds for optional redemption as set forth in any Supplemental Indenture for Parity Bonds, the Trustee shall transfer from the Special Tax Fund and deposit in the Redemption Account moneys available for the purpose and sufficient to pay the principal and the premiums, if any, payable on the Bonds or Parity Bonds called for optional redemption; provided, however, that amounts in the Special Tax Fund (other than the Administrative Expense Account therein) may be applied to optionally redeem Bonds and Parity Bonds only if immediately following such redemption the amount in the 2023 Bonds Reserve Subaccount will equal the 2023 Bonds Reserve Requirement and the amount in each other Subaccount of the Reserve Account will equal the related Reserve Requirement.
(c) Prepayments deposited to the Redemption Account shall be applied on the redemption date established pursuant to Section 4.1(c) hereof to the payment of the principal of, premium, if any, and interest on the Bonds and Parity Bonds to be redeemed with such Prepayments. (d) Moneys set aside in the Redemption Account shall be used solely for the purpose of redeeming Bonds and Parity Bonds and shall be applied on or after the redemption date to the payment of principal of and premium, if any, on the Bonds or Parity Bonds to be redeemed upon presentation and surrender of such Bonds or Parity Bonds, and, in the case of an optional redemption or an extraordinary redemption from Prepayments, to pay the interest thereon; provided, however, that in lieu or partially in lieu of such call and redemption, moneys deposited in the Redemption Account may be used to purchase Outstanding Bonds or Parity Bonds in the manner hereinafter provided. Purchases of Outstanding Bonds or Parity Bonds may be made by the District at public or private sale as and when and at such prices as the District may in its discretion determine but only at prices (including brokerage or other expenses) not more than par plus accrued interest, plus, in the case of moneys set aside for an optional redemption or an extraordinary redemption, the premium applicable at the next following call date according to the premium schedule established pursuant to Section 4.1(a) or 4.1(c) hereof, as applicable, or in the case of Parity Bonds the premium established in any Supplemental Indenture. Any accrued interest payable upon the purchase of Bonds or Parity Bonds may be paid from the amount reserved in the Interest Account of the Special Tax Fund for the payment of interest on the next following Interest Payment Date. 21 4894-8942-0091v4/022599-0033
Section 3.6. Reserve Account of the Special Tax Fund. There shall be maintained in the 2023 Bonds Reserve Subaccount an amount equal to the 2023 Bonds Reserve Requirement and in each other Subaccount of the Reserve Account established for a series of Parity Bonds, an amount equal to the Reserve Requirement for such series of Parity Bonds. The 2023 Reserve Requirement and the Reserve Requirement established for a series of Parity Bonds may be satisfied in whole or in part by cash, a Reserve Policy, or a combination thereof. The amounts in a Subaccount of the Reserve Account shall be applied as follows:
(a) Moneys in the 2023 Bonds Reserve Subaccount shall be used solely for the purpose of paying the principal of, including Sinking Fund Payments, and interest on the Bonds when due in the event that the moneys in the Interest Account and the Principal Account of the Special Tax Fund are insufficient therefor or moneys in the Redemption Account of the Special Tax Fund are insufficient to make a Sinking Fund Payment when due and for the purpose of making any required transfer to the Rebate Fund with respect to the Bonds pursuant to Section 3.7 hereof upon written direction from the District. Moneys in any other Subaccount of the Reserve Account established for a series of Parity Bonds shall be used solely for the purpose of paying the principal of, including Sinking Fund Payments, and interest on such series of Parity Bonds when due in the event that the moneys in the Interest Account and the Principal Account of the Special Tax Fund are insufficient therefor or moneys in the Redemption Account of the Special Tax Fund are insufficient to make a Sinking Fund Payment when due and for the purpose of making any required transfer to the Rebate Fund with respect to such series of Parity Bonds pursuant to Section 3.7 hereof upon written direction from the District.
If the amounts in the Interest Account, the Principal Account or the Redemption Account of the Special Tax Fund are insufficient to pay the principal of, including Sinking Fund Payments, or interest on any Bonds or Parity Bonds when due, or amounts in the Special Tax Fund are insufficient to make transfers to the Rebate Fund when required, the Trustee shall withdraw from the applicable Subaccount of the Reserve Account, first from the cash on deposit therein, and second from a draw on the Reserve Policy, if any, for deposit in the Interest Account, the Principal Account or the Redemption Account of the Special Tax Fund or the Rebate Fund, as applicable, moneys necessary for such purposes.
(b) Whenever moneys are withdrawn from a Subaccount of the Reserve Account, after making the required transfers referred to in Sections 3.3, 3.4 and 3.5 above, the Trustee shall transfer to each Subaccount of the Reserve Account from available moneys in the Special Tax Fund, or from any other legally available funds which the District elects to apply to such purpose, on a proportionate basis based on the outstanding principal amount of the Bonds and any Parity Bonds, the amount needed to restore the amount of each Subaccount of the Reserve Account to, with respect to the Bonds, the 2023 Bonds Reserve Requirement and, with respect to each series of Parity Bonds, the applicable Reserve Requirement for such series, by first, repaying any amounts due under each Reserve Policy, and second, to fund each Subaccount of the Reserve Account to, with respect to the Bonds, the 2023 Bonds Reserve Requirement and, with respect to each series of Parity Bonds, the applicable Reserve Requirement for such series. Moneys in the Special Tax Fund shall be deemed available for transfer to the Subaccounts of the Reserve Account only if the District certifies to the Trustee that such amounts will not be needed to make the deposits required to be made to the Administrative Expense Account, the Interest Account, the Principal Account or the Redemption Account of the Special Tax Fund on or before the next September 1. If amounts in the Special Tax Fund together with any other amounts transferred to replenish the Subaccounts of the Reserve Account are inadequate to restore the Subaccounts of the Reserve Account to, with respect to the 22 4894-8942-0091v4/022599-0033
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Bonds, the 2023 Bonds Reserve Requirement and, with respect to each series of Parity Bonds, the applicable Reserve Requirement for such series, including any amounts necessary to pay costs related to each Reserve Policy, if any, then the District shall include the amount necessary to restore the Subaccounts of the Reserve Account to, with respect to the Bonds, the 2023 Bonds Reserve Requirement and, with respect to each series of Parity Bonds, the applicable Reserve Requirement for such series, in the next annual Special Tax levy to the extent of the maximum permitted Special Tax rates.
(c) In connection with a redemption of Bonds pursuant to Section 4.1(a) or 4.1(c), or a partial defeasance of Bonds in accordance with Section 9.1 hereof, amounts in the 2023 Bonds Reserve Subaccount may be applied to such redemption or partial defeasance so long as the amount on deposit in the 2023 Bonds Reserve Subaccount following such redemption or partial defeasance equals the 2023 Bonds Reserve Requirement. The District shall set forth in a Certificate of an Authorized Representative the amount in the 2023 Bonds Reserve Subaccount to be transferred to the Redemption Account on a redemption date or to be transferred pursuant to the Indenture to partially defease Bonds, and the Trustee shall make such transfer on the applicable redemption or defeasance date, subject to the limitation in the preceding sentence.
In connection with a redemption of a series of Parity Bonds in accordance with any Supplemental Indenture, or a partial defeasance of such series of Parity Bonds in accordance with Section 9.1 hereof, amounts in the related Subaccount of the Reserve Account may be applied to such redemption or partial defeasance so long as the amount on deposit in such Subaccount of the Reserve Account following such redemption or partial defeasance equals the Reserve Requirement for such series of Parity Bonds. The District shall set forth in a Certificate of an Authorized Representative the amount in the Subaccount of the Reserve Account to be transferred to the Redemption Account on a redemption date or to be transferred pursuant to the Indenture to partially defease such Parity Bonds, and the Trustee shall make such transfer on the applicable redemption or defeasance date, subject to the limitation in the preceding sentence. (d) To the extent that the 2023 Bonds Reserve Subaccount is at the 2023 Bonds Reserve Requirement as of the first day of the final Bond Year for the Bonds, amounts in the 2023 Bonds Reserve Subaccount may be applied to pay the principal of and interest due on the Bonds in the final Bond Year for the Bonds. Moneys in the 2023 Bonds Reserve Subaccount in excess of the 2023 Bonds Reserve Requirement not transferred in accordance with the preceding provisions of this Section shall be withdrawn from the 2023 Bonds Reserve Subaccount on the Business Day before each March 1 and September 1 and shall be transferred to the Acquisition and Construction Fund or an Account therein, as directed by a Certificate of an Authorized Representative, until all amounts have been disbursed from the Acquisition and Construction Fund (or such fund is closed) and thereafter to the Interest Account of the Special Tax Fund. (e) To the extent that the Subaccount of the Reserve Account for a series of Parity Bonds is at the Reserve Requirement for such series as of the first day of the final Bond Year for such series of Parity Bonds, amounts in such Subaccount of the Reserve Account may be applied to pay the principal of and interest due on such series of Parity Bonds in the final Bond Year for such issue.
Moneys in the Subaccount of the Reserve Account for a series of Parity Bonds in excess of the Reserve Requirement for such series not transferred in accordance with the preceding provisions of this Section shall be withdrawn from such Subaccount of the Reserve Account on the Business Day before each March 1 and September 1 and shall be transferred to the Acquisition and Construction Fund or an Account therein, as directed by a Certificate of an Authorized Representative, until all 23 4894-8942-0091v4/022599-0033
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amounts have been disbursed from the Acquisition and Construction Fund (or such fund is closed) and thereafter to the Interest Account of the Special Tax Fund.
Section 3.7. Rebate Fund.
(a) The Trustee shall establish and maintain a fund separate from any other fund established and maintained hereunder designated as the Rebate Fund and shall establish a separate Rebate Account and Alternate Penalty Account therein. All money at any time deposited in the Rebate Account or the Alternate Penalty Account of the Rebate Fund shall be held by the Trustee in trust, for payment to the United States Treasury. A separate subaccount of the Rebate Account and the Alternate Penalty Account shall be established for the Bonds and each issue of Parity Bonds the interest on which is excluded from gross income for federal income tax purposes. All amounts on deposit in the Rebate Fund with respect to the Bonds or an issue of Parity Bonds shall be governed by this Section 3.7 and the Tax Certificate for such issue, unless the District obtains an opinion of Bond Counsel that the exclusion from gross income for federal income tax purposes of interest payments on the Bonds and Parity Bonds will not be adversely affected if such requirements are not satisfied.
(1) Rebate Account. The following requirements shall be satisfied with respect to each subaccount of the Rebate Account:
(i) Annual Computation. Within 55 days of the end of each Bond Year, the District shall calculate or cause to be calculated the amount of rebatable arbitrage for the Bonds and each issue of Parity Bonds to which this Section 3.7 is applicable, in accordance with Section 148(0(2) of the Code and Section 1.148-3 of the Rebate Regulations (taking into account any applicable exceptions with respect to the computation of the rebatable arbitrage described in the Tax Certificate for each issue (e.g., the temporary investments exceptions of Section 148(0(4)(B) and (C) of the Code), and taking into account whether the election pursuant to Section 148(f)(4)(C)(vii) of the Code (the "1'/2% Penalty") has been made), for this purpose treating the last day of the applicable Bond Year as a computation date, within the meaning of Section 1.148-1(b) of the Rebate Regulations (the "Rebatable Arbitrage"). The District shall obtain expert advice as to the amount of the Rebatable Arbitrage to comply with this Section.
(ii) Annual Transfer. Within 55 days of the end of each Bond Year for which Rebatable Arbitrage must be calculated as required by the Tax Certificate for each issue, upon the written direction of an Authorized Representative of the District, an amount shall be deposited to each subaccount of the Rebate Account by the Trustee from any funds so designated by the District if and to the extent required, so that the balance in the Rebate Account shall equal the amount of Rebatable Arbitrage so calculated by or on behalf of the District in accordance with clause (i) of this subsection (a)(1) with respect to the Bonds and each issue of Parity Bonds to which this Section 3.7 is applicable. In the event that immediately following any transfer required by the previous sentence, or the date on which the District determines that no transfer is required for such Bond Year, the amount then on deposit to the credit of the applicable subaccount of the Rebate Account exceeds the amount required to be on deposit therein, upon written instructions from an Authorized Representative of the District, the Trustee shall withdraw the excess from the appropriate subaccount of the Rebate Account and then credit the excess to the Special Tax Fund. 24 4894-8942-0091v4/022599-0033
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(iii) Payment to the Treasury. The Trustee shall pay, as directed in writing by an Authorized Representative of the District, to the United States Treasury, out of amounts in each subaccount of the Rebate Account:
(X) not later than 60 days after the end of: (A) the fifth Bond Year for the Bonds and each issue of Parity Bonds to which this Section 3.7 is applicable; and (B) each applicable fifth Bond Year thereafter, an amount equal to at least 90% of the Rebatable Arbitrage calculated as of the end of such Bond Year for the Bonds and each issue of Parity Bonds, as applicable; and
(Y) not later than 60 days after the payment or redemption of all of the Bonds or an issue of Parity Bonds, as applicable, an amount equal to 100% of the Rebatable Arbitrage calculated as of the end of such applicable Bond Year, and any income attributable to the Rebatable Arbitrage, computed in accordance with Section 148(f) of the Code.
In the event that, prior to the time of any payment required to be made from the Rebate Account, the amount in the Rebate Account is not sufficient to make such payment when such payment is due, the District shall calculate or cause to be calculated the amount of such deficiency and deposit an amount received from any legally available source equal to such deficiency prior to the time such payment is due. Each payment required to be made pursuant to this subsection (a)(1) shall be made to the Internal Revenue Service Center, Ogden, Utah 84201 on or before the date on which such payment is due, and shall be accompanied by Internal Revenue Service Form 8038-T, or shall be made in such other manner as provided under the Code. (2) Alternate Penalty Account.
(i) Six -Month Computation. If the 1'/2% Penalty has been elected for the Bonds or an issue of Parity Bonds, within 85 days of each particular Six -Month Period, the District shall determine or cause to be determined whether the 11/2% Penalty is payable (and the amount of such penalty) as of the close of the applicable Six -Month Period. The District shall obtain expert advice in making such determinations.
(ii) Six -Month Transfer. Within 85 days of the close of each Six -Month Period, the Trustee, at the written direction of an Authorized Representative of the District, shall deposit an amount in the appropriate subaccounts of the Alternate Penalty Account from any source of funds held by the Trustee pursuant to this Indenture and designated by the District in such written directions or provided to it by the District, if and to the extent required, so that the balance in each subaccount of the Alternate Penalty Account equals the amount of 1'/2% Penalty due and payable to the United States Treasury determined as provided in subsection (a)(2)(i) above. In the event that immediately following any transfer provided for in the previous sentence, or the date on which the District determines that no transfer is required for such Bond Year, the amount then on deposit in a subaccount of the Alternate Penalty Account exceeds the amount required to be on deposit therein to make the payments required by subsection (iii) below, the Trustee, at the written direction of an Authorized Representative of the District, may withdraw the excess from the applicable subaccount of the Alternate Penalty Account and credit the excess to the Special Tax Fund. (iii) Payment to the Treasury. The Trustee shall pay, as directed in writing by an Authorized Representative of the District, to the United States Treasury, out of amounts in a subaccount of the Alternate Penalty Account, not later than 90 days after the close of each Six -Month 25 4894-8942-0091v4/022599-0033
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Period the 11/2% Penalty, if applicable and payable, computed with respect to the Bonds and any issue of Parity Bonds in accordance with Section 148(0(4) of the Code. In the event that, prior to the time of any payment required to be made from a subaccount of the Alternate Penalty Account, the amount in such subaccount is not sufficient to make such payment when such payment is due, the District shall calculate the amount of such deficiency and direct the Trustee, in writing, to deposit an amount equal to such deficiency into such subaccount of the Alternate Penalty Account from any funds held by the Trustee pursuant to this Indenture and designated by the District in such written directions prior to the time such payment is due. Each payment required to be made pursuant to this subsection (a)(2) shall be made to the Internal Revenue Service, Ogden, Utah 84201 on or before the date on which such payment is due, and shall be accompanied by Internal Revenue Service Form 8038-T or shall be made in such other manner as provided under the Code. (b) Disposition of Unexpended Funds. Any funds remaining in the Accounts of the Rebate Fund with respect to the Bonds or an issue of Parity Bonds after redemption and payment of such issue and after making the payments described in subsections (a)(1)(iii) or (a)(2)(iii) (whichever is applicable), may be withdrawn by the Trustee at the written direction of the District and utilized in any manner by the District.
(c) Survival of Defeasance and Final Payment. Notwithstanding anything in this Section or this Indenture to the contrary, the obligation to comply with the requirements of this Section shall survive the defeasance and final payment of the Bonds and any Parity Bonds with respect to which an Account has been created in the Rebate Fund.
(d) Amendment Without Consent of Owners. This Section 3.7 may be deleted or amended in any manner without the consent of the Owners, provided that prior to such event there is delivered to the District an opinion of Bond Counsel to the effect that such deletion or amendment will not adversely affect the exclusion from gross income for federal income tax purposes of interest on the Bonds and any issue of Parity Bonds issued on a tax-exempt basis. (e) Trustee. The Trustee shall have no responsibility to monitor or calculate any amounts payable to the U.S. Treasury pursuant to this Section and shall be deemed constructively to have complied with its obligations hereunder if it follows the written instructions of the District given pursuant to this Section. The Trustee shall not be responsible for calculating rebate amounts or for the adequacy or correctness of any rebate report. The Trustee shall be deemed conclusively to have complied with the provisions of this Indenture and any other agreement relating to the Bonds or Parity Bonds regarding calculation and payment of rebate if it follows the directions of the District, and it shall have no independent duty to review or enforce the District's compliance with such rebate requirements. The Trustee may rely conclusively upon and shall be fully protected from all liability in relying upon the District's opinions, calculations, determinations, directions, and certifications required by this Section. Except to the extent expressly herein provided, the Trustee shall in no instance be responsible or liable for the tax treatment of the Bonds or the Parity Bonds, the District's compliance with the Code, or any other tax consequences in connection with the Bonds or the Parity Bonds.
Section 3.8. Surplus Fund. After making the transfers required by Sections 3.3, 3.4, 3.5,
3.6 and 3.7 hereof, as soon as practicable after each September 1, the Trustee shall transfer all remaining amounts in the Special Tax Fund to the Surplus Fund, unless on or prior to such date, it has received a Certificate of an Authorized Representative directing that certain amounts be retained in the Special Tax Fund because the District has included such amounts as being available in the 26 4894-8942-0091v4/022599-0033
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Special Tax Fund in calculating the amount of the levy of Special Taxes for such Fiscal Year pursuant to Section 5.2(b) hereof. Moneys deposited in the Surplus Fund will be transferred by the Trustee pursuant to a Certificate of an Authorized Representative: (i) to the Interest Account, the Principal Account or the Redemption Account of the Special Tax Fund to pay the principal of, including Sinking Fund Payments, premium, if any, and interest on the Bonds and any Parity Bonds when due in the event that moneys in the Special Tax Fund and the Subaccounts of the Reserve Account of the Special Tax Fund are insufficient therefor; (ii) to each Subaccount of the Reserve Account, on a proportionate basis based on the outstanding principal amount of the Bonds and any Parity Bonds, to replenish the 2023 Bonds Reserve Subaccount to the 2023 Bonds Reserve Requirement, and to each other Subaccount of the Reserve Account to the applicable Reserve Requirement; (iii) to the Administrative Expense Account of the Special Tax Fund to pay Administrative Expenses to the extent that the amounts on deposit in the Administrative Expense Account of the Special Tax Fund are insufficient to pay Administrative Expenses; (iv) to the Acquisition and Construction Fund to pay Project Costs; or (v) after all Project Costs have been paid, to the District, for any other lawful purpose of the District.
The amounts in the Surplus Fund are not pledged to the repayment of the Bonds or the Parity Bonds and may be used by the District for any lawful purpose. In the event that the District reasonably expects to use any portion of the moneys in the Surplus Fund to pay debt service on any Outstanding Bonds or Parity Bonds, the District shall notify the Trustee in a Certificate of an Authorized Representative and the Trustee shall segregate such amount into a separate subaccount and the moneys on deposit in such subaccount of the Surplus Fund shall, subject to Section 3.10, be invested at the written direction of the District in Authorized Investments the interest on which is excludable from gross income under Section 103 of the Code (other than bonds the interest on which is a tax preference item for purposes of computing the alternative minimum tax of individuals under the Code) or in Authorized Investments at a yield not in excess of the yield on the issue of Bonds or Parity Bonds to which such amounts are to be applied, unless, in the opinion of Bond Counsel, investment at a higher yield will not adversely affect the exclusion from gross income for federal income tax purposes of interest on the Bonds or any Parity Bonds which were issued on a tax-exempt basis for federal income tax purposes. Such amounts shall be disbursed as directed by an Authorized Representative of the District.
Section 3.9. Acquisition and Construction Fund.
(a) The moneys in the Costs of Issuance Account shall be disbursed by the Trustee pursuant to a Certificate of an Authorized Representative, and any balance remaining therein after 180 days shall be transferred by the Trustee to the City Facilities Account within the Acquisition and Construction Fund as directed in writing by an Authorized Representative of the District. Following such transfer to the Acquisition and Construction Fund, the Costs of Issuance Account shall be closed.
(b) The moneys in the Acquisition and Construction Fund and the Accounts therein (other than the Costs of Issuance Account) shall be applied exclusively to pay the Project Costs.
Amounts for Project Costs shall be disbursed by the Trustee from the Acquisition and Construction Fund or the Accounts therein (other than the Costs of Issuance Account), as specified in a Requisition for Disbursement of Project Costs, substantially in the form of Exhibit B-1 attached hereto. A properly executed Requisition for Disbursement of Project Costs must be submitted in connection with each requested disbursement and the Trustee may rely thereon without investigating the accuracy thereof. Amounts in an Account of the Acquisition and Construction Fund may be 27 4894-8942-0091v4/022599-0033
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transferred to another Account or Accounts therein pursuant to a Certificate of an Authorized Representative of the District. For purposes of complying with the requirements of this Section, the Trustee may conclusively rely and shall be protected in acting or refraining from acting upon the requisition signed by the authorized officer of the District. The Trustee shall not be bound to make an investigation into the facts or matters stated in any Requisition of the District. The Trustee shall not be responsible for determining whether the funds on hand in the Acquisition and Construction Fund are sufficient to complete the Project. The Trustee shall not be responsible to collect lien waivers.
(c) Upon receipt of a Certificate of an Authorized Representative of the District stating that all or a specified portion of the amount remaining in the Acquisition and Construction Fund or the Accounts therein (other than the Costs of Issuance Account) is no longer needed to pay Project Costs, the Trustee shall: (i) transfer all or such specified portion, as applicable, of the moneys remaining on deposit in the Acquisition and Construction Fund or the Accounts therein (other than the Costs of Issuance Account) to the Interest Account, the Principal Account or Redemption Account of the Special Tax Fund, to the Costs of Issuance Account or to the Surplus Fund, as directed in such certificate, provided that in connection with any direction to transfer amounts to the Surplus Fund there shall have been delivered to the Trustee with such certificate an opinion of Bond Counsel to the effect that such transfer to the Surplus Fund will not adversely affect the exclusion from gross income for federal income tax purposes of interest on the Bonds or any Parity Bonds which were issued on a tax-exempt basis for federal income tax purposes; and (ii) thereafter, close the Acquisition and Construction Fund.
Section 3.10. Investments. Moneys held in any of the Funds, Accounts and Subaccounts under this Indenture shall be invested at the written direction (which may include a facsimile transmission) of the District upon at least two (2) Business Days' notice in accordance with the limitations set forth below and to the extent permitted by law only in Authorized Investments (such direction to specify the particular Authorized Investment to be made) which shall be deemed at all times to be a part of such Funds, Accounts and Subaccounts. Any loss resulting from such Authorized Investments shall be credited or charged to the Fund, Account or Subaccount from which such investment was made, and any investment earnings on a Fund, Account or Subaccount shall be applied as follows: (i) investment earnings on all amounts deposited in the Acquisition and Construction Fund (including the Accounts therein), the Special Tax Fund, the Surplus Fund and the Rebate Fund and each Account therein (other than the Subaccounts of the Reserve Account of the Special Tax Fund) shall be deposited in those respective Funds, Accounts and Subaccounts; and (ii) investment earnings on all amounts deposited in the Subaccounts of the Reserve Account shall be deposited therein to be applied as set forth in Section 3.6. Moneys in the Funds, Accounts and Subaccounts held under this Indenture may be invested by the Trustee as directed in writing (which may include a facsimile transmission) by the District, from time to time, in Authorized Investments (such direction to specify the particular Authorized Investment to be made) subject to the following restrictions (provided that the Trustee is not required to verify compliance with such restrictions and may rely on the District's written instructions as evidence of such compliance):
(a) Moneys in the Acquisition and Construction Fund and the Accounts therein shall be invested in Authorized Investments which will by their terms mature, or in the case of an Investment Agreement are available without penalty, as close as practicable to the date the District estimates the moneys represented by the particular investment will be needed for withdrawal from the Acquisition and Construction Fund or the Accounts therein. Notwithstanding anything herein to the contrary, amounts in the Acquisition and Construction Fund or the Accounts therein three years after the 28 4894-8942-0091v4/022599-0033
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Delivery Date for the Bonds and the proceeds of each issue of Parity Bonds issued on a tax-exempt basis which are remaining on deposit in the Acquisition and Construction Fund on the date which is three years following the date of issuance of such issue of Parity Bonds shall be invested by the District only in Authorized Investments the interest on which is excluded from gross income under Section 103 of the Code (other than bonds the interest on which is a tax preference item for purposes of computing the alternative minimum tax of individuals under the Code) or in Authorized Investments at a yield not in excess of the yield on the issue of Bonds or Parity Bonds from which such proceeds were derived, unless in the opinion of Bond Counsel such restriction is not necessary to prevent interest on the Bonds or any Parity Bonds which were issued on a tax-exempt basis for federal income tax purposes from being included in gross income for federal income tax purposes. (b) Moneys in the Interest Account, the Principal Account, and the Redemption Account of the Special Tax Fund shall be invested only in Authorized Investments which will by their terms mature, or in the case of an Investment Agreement are available for withdrawal without penalty, on such dates so as to ensure the payment of principal of, premium, if any, and interest on the Bonds and any Parity Bonds as the same become due.
(c) Moneys in the 2023 Bonds Reserve Subaccount may be invested only in Authorized Investments (other than the Authorized Investment described in clause (2)(i) of the definition thereof) which, taken together, have a weighted average maturity not in excess of five years; provided that such amounts may be invested in an Investment Agreement to the later of the final maturity of the Bonds so long as such amounts may be withdrawn at any time, without penalty, for application in accordance with Section 3.6 hereof; and provided that no such Authorized Investment of amounts in the 2023 Bonds Reserve Subaccount shall mature later than the final maturity date of the Bonds.
Moneys in a Subaccount of the Reserve Account established for a series of Parity Bonds may be invested only in Authorized Investments (other than the Authorized Investment described in clause (2)(i) of the definition thereof) which, taken together, have a weighted average maturity not in excess of five years; provided that such amounts may be invested in an Investment Agreement to the later of the final maturity of such series of Parity Bonds so long as such amounts may be withdrawn at any time, without penalty, for application in accordance with Section 3.6 hereof; and provided that no such Authorized Investment of amounts in such Subaccount of the Reserve Account shall mature later than the respective final maturity date of such Parity Bonds. (d) Moneys in the Rebate Fund shall be invested only in Authorized Investments of the type described in clause (1) of the definition thereof which by their terms will mature, as nearly as practicable, on the dates such amounts are needed to be paid to the United States Government pursuant to Section 3.7 hereof or in Authorized Investments of the type described in clause (2)(e) of the definition thereof.
(e) In the absence of written investment directions from the District, the Trustee shall hold all funds hereunder uninvested as cash.
The Trustee shall sell, or present for redemption, any Authorized Investment whenever it may be necessary to do so in order to provide moneys to meet any payment or transfer to such funds and accounts or from such funds and accounts. Notwithstanding anything herein to the contrary, the Trustee shall not be responsible or liable for any loss, fee, tax or other charge from investments, reinvestments, liquidations, sales or transfers undertaken in accordance with the provisions of this Indenture. In the event of a loss on the sale of such investments (after giving effect to any interest or 29 4894-8942-0091v4/022599-0033
other income thereon except to the extent theretofore paid to the District), the Trustee shall have no responsibility or liability in respect of such loss except that the Trustee shall notify the District of the amount of such loss and the District shall promptly pay such amount to the Trustee to be credited as part of the moneys originally invested.
The Trustee may act as principal or agent in the making or disposing of any investment and shall be entitled to its customary fee for making such investment. The Trustee may sell at the best market price obtainable, or present for redemption, any Authorized Investment so purchased whenever it shall be necessary to provide moneys to meet any required payment, transfer, withdrawal or disbursement from the fund or account to which such Authorized Investment is credited, and, subject to the provisions of Section 7.4, the Trustee shall not be liable or responsible for any loss resulting from such investment. For investment purposes, the Trustee may commingle the funds and accounts established hereunder, but shall account for each separately. The Trustee is hereby authorized, in making or disposing of any investment permitted by this Section, to deal with itself (in its individual capacity) or which any one or more of its affiliates, whether it or such affiliate is acting as an agent of the Trustee or for any third person or dealing as principal for its own account. The parties acknowledge that the Trustee is not providing investment supervision, recommendations, or advice.
The District acknowledges that, to the extent that regulations of the Comptroller of the Currency or other applicable regulatory entity grant the District the right to receive brokerage confirmations of security transactions as they occur, the District specifically waives receipt of such confirmations to the extent permitted by law. The Trustee will furnish the District periodic cash transaction statements which include detail for all investment transactions made by the Trustee hereunder.
ARTICLE IV
REDEMPTION OF BONDS AND PARITY BONDS
Section 4.1. Redemption of Bonds.
(a) Optional Redemption. The Bonds may be redeemed at the option of the District from any source of funds on any Interest Payment Date on or after September 1, 20_, in whole or in part, from such maturities as are selected by the District and by lot within a maturity, at the following redemption prices, expressed as a percentage of the principal amount to be redeemed, together with accrued interest to the date of redemption:
Redemption Date Redemption Price
September 1, 20_ and March 1, 20_ %
September 1, 20_ and March 1, 20_
September 1, 20_ and March 1, 20_
September 1, 20_ and any Interest Payment Date thereafter In the event that the District elects to redeem Bonds as provided above, the District shall give written notice to the Trustee of its election to so redeem, the redemption date and the principal amount of the Bonds of each maturity to be redeemed. The notice to the Trustee shall be given at least 30 but no more than 60 days prior to the redemption date, or by such later date as is acceptable to the Trustee.
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(b) Mandatory Sinking Fund Redemption. The Bonds maturing on September 1, 20_ (the "20_ Term Bonds") shall be called before maturity and redeemed, from the Sinking Fund Payments that have been deposited into the Redemption Account established hereunder, on September 1, 20 , and on each September 1 thereafter prior to maturity, in accordance with the schedule of Sinking Fund Payments set forth below. The 20 Term Bonds so called for redemption shall be selected by the Trustee by lot and shall be redeemed at a redemption price for each redeemed 20 Term Bond equal to the principal amount thereof, plus accrued interest to the redemption date, without premium, as follows:
Term Bonds Maturing September 1, 20_
Sinking Fund Redemption Date
(September 1)
*
* Maturity.
Sinking Fund Payments
The Bonds maturing on September 1, 20_ (the "20_ Term Bonds") shall be called before maturity and redeemed, from the Sinking Fund Payments that have been deposited into the Redemption Account established hereunder, on September 1, 20_, and on each September 1 thereafter prior to maturity, in accordance with the schedule of Sinking Fund Payments set forth below. The 20_ Term Bonds so called for redemption shall be selected by the Trustee by lot and shall be redeemed at a redemption price for each redeemed 20_ Term Bond equal to the principal amount thereof, plus accrued interest to the redemption date, without premium, as follows:
Term Bonds Maturing September 1, 20_
Sinking Fund Redemption Date
(September 1)
*
* Maturity.
Sinking Fund Payments
The Bonds maturing on September 1, 20 (the "20 Term Bonds") shall be called before maturity and redeemed, from the Sinking Fund Payments that have been deposited into the Redemption Account established hereunder, on September 1, 20_ and on each September 1 thereafter prior to maturity, in accordance with the schedule of Sinking Fund Payments set forth below. The 20_ Term Bonds so called for redemption shall be selected by the Trustee by lot and shall be redeemed at a redemption price for each redeemed 20_ Term Bond equal to the principal amount thereof, plus accrued interest to the redemption date, without premium, as follows:
31 4894-8942-0091v4/022599-0033
Term Bonds Maturing September 1, 20_
Sinking Fund Redemption Date
(September 1)
*
* Maturity.
Sinking Fund Payments
$
If the District purchases Term Bonds during the Fiscal Year immediately preceding one of the sinking fund redemption dates specified above, the District shall notify the Trustee at least 45 days prior to the redemption date as to the principal amount purchased, and the amount purchased shall be credited at the time of purchase to the next Sinking Fund Payment for the Term Bond so purchased, to the extent of the full principal amount of the purchase. All Bonds purchased pursuant to this subsection shall be cancelled pursuant to Section 10.1 hereof.
In the event of a partial optional redemption or extraordinary redemption of the Term Bonds, each of the remaining Sinking Fund Payments for such Term Bonds shall be reduced, as nearly as practicable, on a pro rata basis.
(c) Extraordinary Redemption. The Bonds are subject to extraordinary redemption as a whole or in part on a pro rata basis among maturities and by lot within a maturity, on any Interest Payment Date on or after September 1, 2023 and shall be redeemed by the Trustee, from Prepayments deposited to the Redemption Account pursuant to Section 3.2, plus amounts transferred from the 2023 Bonds Reserve Subaccount pursuant to Section 3.6(c), at the following redemption prices, expressed as a percentage of the principal amount to be redeemed, together with accrued interest to the redemption date:
Redemption Date Redemption Price
Any Interest Payment Date from September 1, 2023, through March 1, % 20 ,
September 1, 20_, and March 1, 20_,
September 1, 20_, and March 1, 20_,
September 1, 20_, and any Interest Payment Date thereafter Prepayments will be allocated to the payment at maturity and redemption of Bonds and any Parity Bonds as nearly as practicable on a proportionate basis based on the outstanding principal amount of the Bonds and any Parity Bonds and such amounts shall be applied to redeem Bonds and Parity Bonds as nearly as practicable on a pro rata basis among maturities in increments of $5,000; provided, however, that, for Prepayments of less than $50,000, the District may specify in a Certificate of an Authorized Representative that Prepayments be applied to one or more maturities of the Bonds or Parity Bonds so long as there is delivered to the Trustee a certificate of the Independent Financial Consultant that, following such application of the Prepayments, the maximum Special Taxes that may be levied in each Fiscal Year on Taxable Property is not less than 110% of Annual 32 4894-8942-0091v4/022599-0033
Debt Service, plus the Administrative Expenses Cap, in the Bond Year that begins in such Fiscal Year.
(d) The redemption provisions for Parity Bonds shall be set forth in a Supplemental Indenture.
Section 4.2. Selection of Bonds and Parity Bonds for Redemption. If less than all of the Bonds or Parity Bonds Outstanding are to be redeemed, the portion of any Bond or Parity Bond of a denomination of more than $5,000 to be redeemed shall be in the principal amount of $5,000 or an integral multiple thereof. In selecting portions of such Bonds or Parity Bonds for redemption, the Trustee shall treat such Bonds or Parity Bonds, as applicable, as representing that number of Bonds or Parity Bonds of $5,000 denominations which is obtained by dividing the principal amount of such Bonds or Parity Bonds to be redeemed in part by $5,000. The procedure for the selection of Parity Bonds for redemption may be modified as set forth in the Supplemental Indenture for such Parity Bonds. The Trustee shall promptly notify the District in writing of the Bonds or Parity Bonds, or portions thereof, selected for redemption.
Section 4.3. Notice of Redemption. When Bonds or Parity Bonds are due for redemption under Section 4.1 above or under another redemption provision set forth in a Supplemental Indenture relating to any Parity Bonds, the Trustee shall give notice, in the name and at the expense of the District, of the redemption of such Bonds or Parity Bonds. Such notice of redemption shall:
(i) specify the CUSIP numbers (if any), the bond numbers and the maturity date or dates of the Bonds or Parity Bonds selected for redemption, except that where all of the Bonds or all of an issue of Parity Bonds are subject to redemption, or all of the Bonds or Parity Bonds of one maturity are to be redeemed, the bond numbers of such issue need not be specified; (ii) state the date fixed for redemption and surrender of the Bonds or Parity Bonds to be redeemed; (iii) state the redemption price; (iv) state the place or places where the Bonds or Parity Bonds are to be redeemed; (v) in the case of Bonds or Parity Bonds to be redeemed only in part, state the portion of such Bond or Parity Bond which is to be redeemed; (vi) state the date of issue of the Bonds or Parity Bonds as originally issued; (vii) state the rate of interest borne by each Bond or Parity Bond being redeemed; and (viii) state any other descriptive information needed to identify accurately the Bonds or Parity Bonds being redeemed as shall be specified by the Trustee. Such notice shall further state that on the date fixed for redemption, there shall become due and payable on each Bond, Parity Bond or portion thereof called for redemption, the principal thereof, together with any premium, and interest accrued to the redemption date, and that from and after such date, interest thereon shall cease to accrue and be payable. At least 30 days but no more than 45 days prior to the redemption date, the Trustee shall mail a copy of such notice of redemption, by first class mail, postage prepaid, to the respective Owners thereof at their addresses appearing on the Bond Register, and to the original purchaser of any Bonds or Parity Bonds; provided, however, so long as the Bonds and Parity Bonds are registered in the name of the Nominee, such notice shall be given in such manner as complies with the requirements of the Depository. The actual receipt by the Owner of any Bond or Parity Bond of notice of such redemption shall not be a condition precedent to redemption, and neither the failure to receive nor any defect in such notice shall affect the validity of the proceedings for the redemption of such Bonds or Parity Bonds, or the cessation of interest on the redemption date. A certificate by the Trustee that notice of such redemption has been given as herein provided shall be conclusive as against all parties and the Owner shall not be entitled to show that he or she failed to receive notice of such redemption.
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In addition to the foregoing notice, further notice shall be given by the Trustee as set out below, but no defect in said further notice nor any failure to give all or any portion of such further notice shall in any manner defeat the effectiveness of a call for redemption if notice thereof is given as above prescribed.
Each further notice of redemption shall be sent not later than the date that notice of redemption is given to the Owners pursuant to the first paragraph of this Section by first class mail or facsimile to the Depository and to any other registered securities depositories then in the business of holding substantial amounts of obligations of types comprising the Bonds and Parity Bonds and to one or more of the national information services that are in the business of disseminating notice of redemption of obligations such as the Bonds and Parity Bonds.
Upon the payment of the redemption price of any Bonds and Parity Bonds being redeemed, each check or other transfer of funds issued for such purpose shall to the extent practicable bear the CUSIP number identifying, by issue and maturity, the Bonds and Parity Bonds being redeemed with the proceeds of such check or other transfer.
With respect to any notice of optional redemption of Bonds or Parity Bonds, such notice may state that such redemption shall be conditional upon the receipt by the Trustee on or prior to the date fixed for such redemption of moneys sufficient to pay the principal of, premium, if any, and interest on such Bonds or Parity Bonds to be redeemed and that, if the District determines that such moneys will not be so received on or prior to the redemption date, said notice shall be of no force and effect and the Trustee shall not be required to redeem such Bonds or Parity Bonds. If any condition stated in the redemption notice for an optional redemption shall not have been satisfied on or prior to the redemption date: (i) the redemption notice shall be of no force and effect, (ii) the District shall not be required to redeem such Bonds or Parity Bonds, (iii) the redemption shall not be made, and (iv) the Trustee shall within a reasonable time thereafter give notice to the persons in the manner in which the conditional redemption notice was given that such condition or conditions were not met and that the redemption was canceled.
Section 4.4. Partial Redemption of Bonds or Parity Bonds. Upon surrender of any Bond or Parity Bond to be redeemed in part only, the District shall execute and the Trustee shall authenticate and deliver to the Owner, at the expense of the District, a new Bond or Bonds or a new Parity Bond or Parity Bonds of authorized denominations equal in aggregate principal amount to the unredeemed portion of the Bonds surrendered, with the same interest rate and the same maturity or, in the case of surrender of a Parity Bond, a new Parity Bond or Parity Bonds subject to the foregoing limitations.
Section 4.5. Effect of Notice and Availability of Redemption Money. Notice of redemption having been duly given, as provided in Section 4.3 hereof, and the amount necessary for the redemption having been made available for that purpose and being available therefor on the date fixed for such redemption:
(a) the Bonds and Parity Bonds, or portions thereof, designated for redemption shall, on the date fixed for redemption, become due and payable at the redemption price thereof as provided in this Indenture or in any Supplemental Indenture with respect to any Parity Bonds, anything in this Indenture or in the Bonds or the Parity Bonds to the contrary notwithstanding; 34 4894-8942-0091v4/022599-0033
(b) upon presentation and surrender thereof at the Principal Office of the Trustee, the redemption price of such Bonds and Parity Bonds shall be paid to the Owners thereof; (c) as of the redemption date the Bonds or the Parity Bonds, or portions thereof so designated for redemption shall be deemed to be no longer Outstanding and such Bonds or Parity Bonds, or portions thereof, shall cease to bear further interest; and (d) as of the date fixed for redemption no Owner of any of the Bonds, Parity Bonds or portions thereof so designated for redemption shall be entitled to any of the benefits of this Indenture or any Supplemental Indenture, or to any other rights, except with respect to payment of the redemption price and interest accrued to the redemption date from the amounts so made available.
ARTICLE V
COVENANTS AND WARRANTY
Section 5.1. Warranty. The District warrants that it shall preserve and protect the security pledged hereunder to the Bonds and any Parity Bonds against all claims and demands of all persons.
Section 5.2. Covenants. So long as any of the Bonds or Parity Bonds issued hereunder are Outstanding and unpaid, the District makes the following covenants with the Owners under the provisions of the Act and this Indenture (to be performed by the District or its proper officers, agents or employees), which covenants are necessary and desirable to secure the Bonds and Parity Bonds and tend to make them more marketable; provided, however, that said covenants do not require the District to expend any funds or moneys other than the Special Taxes and other amounts deposited to the Special Tax Fund:
(a) Punctual Payment; Against Encumbrances. The District covenants that it will receive all Special Taxes in trust for the Owners and will direct the Treasurer to deposit all Special Taxes with the Trustee as soon as reasonably practicable following their apportionment to the District, and the District shall have no beneficial right or interest in the amounts so deposited except as provided by this Indenture. All such Special Taxes shall be disbursed, allocated and applied solely to the uses and purposes set forth herein, and shall be accounted for separately and apart from all other money, funds, accounts or other resources of the District. Notwithstanding anything to the contrary herein, the Trustee shall have no duty to prepare or file any Federal or state tax report or return with respect to any funds held pursuant to this Indenture or any income earned thereon, except for the delivery and filing of tax information reporting forms required to be delivered and filed with the Internal Revenue Service.
The District covenants that it will duly and punctually pay or cause to be paid the principal of and interest on every Bond and Parity Bond issued hereunder, together with the premium, if any, thereon on the date, at the place and in the manner set forth in the Bonds and the Parity Bonds and in accordance with this Indenture to the extent that Net Taxes and other amounts pledged hereunder are available therefor, and that the payments into the Funds and Accounts created hereunder will be made, all in strict conformity with the terms of the Bonds, any Parity Bonds, and this Indenture, and that it will faithfully observe and perform all of the conditions, covenants and requirements of this Indenture and all Supplemental Indentures and of the Bonds and any Parity Bonds issued hereunder. 35 4894-8942-0091v4/022599-0033
The District will not mortgage or otherwise encumber, pledge or place any charge upon any of the Net Taxes except as provided in this Indenture, and will not issue any obligation or security having a lien or charge upon the Net Taxes superior to or on a parity with the Bonds, other than Parity Bonds. Nothing herein shall prevent the District from issuing or incurring indebtedness which is payable from a pledge of Net Taxes which is subordinate in all respects to the pledge of Net Taxes to repay the Bonds and the Parity Bonds, subject to compliance with the District's bonded indebtedness limit.
(b) Levy of Special Tax. Beginning in Fiscal Year 2023-24 and so long as any Bonds or Parity Bonds issued under this Indenture are Outstanding, subject to the limitations set forth in the Act and RMA, the legislative body of the District covenants to levy the Special Tax in an amount sufficient, together with other amounts on deposit in the Special Tax Fund, to pay: (1) the principal of and interest on the Bonds and any Parity Bonds when due; (2) the Administrative Expenses; and (3) any amounts required to replenish the 2023 Bonds Reserve Subaccount to the 2023 Bonds Reserve Requirement and any other Subaccount of the Reserve Account to the applicable Reserve Requirement, including any amounts to pay costs related to a Reserve Policy, if any. The District further covenants that it will take no actions that would discontinue or cause the discontinuance of the Special Tax levy or the District's authority to levy the Special Tax for so long as the Bonds and any Parity Bonds are Outstanding.
(c) Commence Foreclosure Proceedings. The District covenants for the benefit of the Owners of the Bonds and any Parity Bonds that it will: (i) commence judicial foreclosure proceedings against parcels with delinquent Special Taxes in excess of $2,500 by the December 1 following the close of each Fiscal Year in which such Special Taxes were due; (ii) commence judicial foreclosure proceedings against all parcels with delinquent Special Taxes by the December 1 following the close of each Fiscal Year in which it receives Special Taxes in an amount which is less than 95% of the total Special Tax levied; and (iii) diligently pursue such foreclosure proceedings until the delinquent Special Taxes are paid; provided that, notwithstanding the foregoing, the District may elect to defer foreclosure proceedings on any parcel so long as the amount in the 2023 Bonds Reserve Subaccount is at least equal to the 2023 Bonds Reserve Requirement and the amount in all other Subaccounts of the Reserve Account is at least equal to the applicable Reserve Requirement.
The District may, but shall not be obligated to, advance funds from any source of legally available funds in order to maintain the Subaccounts of the Reserve Account. The District may treat any delinquent Special Tax sold to an independent third -party or to the City for at least 100% of the delinquent amount as having been paid. Proceeds of any such sale up to 100% of the delinquent amount will be deposited in the Special Tax Fund.
The District covenants that it will deposit the net proceeds of any foreclosure in the Special Tax Fund and will apply such proceeds remaining after the payment of Administrative Expenses to make current payments of principal and interest on the Bonds and any Parity Bonds, to bring the amount on deposit in the 2023 Bonds Reserve Subaccount up to the 2023 Bonds Reserve Requirement and the amount on deposit in any other Subaccount of the Reserve Account to the applicable Reserve Requirement, and to pay any delinquent installments of principal or interest due on the Bonds and any Parity Bonds.
(d) Payment of Claims. The District will pay and discharge any and all lawful claims for labor, materials or supplies which, if unpaid, might become a lien or charge upon the Net Taxes or other funds in the Special Tax Fund (other than the Administrative Expense Account therein), or which might impair the security of the Bonds or any Parity Bonds then Outstanding; provided, 36 4894-8942-0091v4/022599-0033
however, that nothing herein contained shall require the District to make any such payments so long as the District in good faith shall contest the validity of any such claims. (e) Books and Accounts. The District will keep proper books of records and accounts, separate from all other records and accounts of the District, in which complete and correct entries shall be made of all transactions relating to the Project, the levy of the Special Tax and the deposits to the Special Tax Fund. Such books of records and accounts shall at all times during business hours be subject to the inspection of the Trustee or of the Owners or the Owners of any issue of Parity Bonds then Outstanding or their representatives authorized in writing. (f) Federal Tax Covenants. Notwithstanding any other provision of this Indenture, absent an opinion of Bond Counsel that the exclusion from gross income of interest on the Bonds and any Parity Bonds issued on a tax-exempt basis for federal income tax purposes will not be adversely affected for federal income tax purposes, the District covenants to comply with all applicable requirements of the Code necessary to preserve such exclusion from gross income and specifically covenants, without limiting the generality of the foregoing, as follows:
(1) Private Activity. The District will take no action or refrain from taking any action or make any use of the proceeds of the Bonds or any Parity Bonds or of any other monies or property which would cause the Bonds or any Parity Bonds issued on a tax-exempt basis for federal income tax purposes to be "private activity bonds" within the meaning of Section 141 of the Code. (2) Arbitrage. The District will make no use of the proceeds of the Bonds or any Parity Bonds or of any other amounts or property, regardless of the source, or take any action or refrain from taking any action which will cause the Bonds or any Parity Bonds issued on a tax-exempt basis for federal income tax purposes to be "arbitrage bonds" within the meaning of Section 148 of the Code.
(3) Federal Guaranty. The District will make no use of the proceeds of the Bonds or any Parity Bonds or take or omit to take any action that would cause the Bonds or any Parity Bonds issued on a tax-exempt basis for federal income tax purposes to be "federally guaranteed" within the meaning of Section 149(b) of the Code.
(4) Information Reporting. The District will take or cause to be taken all necessary action to comply with the informational reporting requirement of Section 149(e) of the Code.
(5) Hedge Bonds. The District will make no use of the proceeds of the Bonds or any Parity Bonds or any other amounts or property, regardless of the source, or take any action or refrain from taking any action that would cause the Bonds or any Parity Bonds issued on a tax-exempt basis for federal income tax purposes to be considered "hedge bonds" within the meaning of Section 149(g) of the Code unless the District takes all necessary action to assure compliance with the requirements of Section 149(g) of the Code to maintain the exclusion from gross income for federal income tax purposes of interest on the Bonds and any applicable Parity Bonds. (6) Miscellaneous. The District will take no action or refrain from taking any action inconsistent with its expectations stated in the Tax Certificate executed on the Delivery Date by the District in connection with the Bonds and any issue of Parity Bonds and will comply with the covenants and requirements stated therein and incorporated by reference herein. 37 4894-8942-0091v4/022599-0033
(7) Other Tax -Exempt Issues. The District will not use proceeds of other tax-exempt securities to redeem any Bonds or Parity Bonds without first obtaining the written opinion of Bond Counsel that doing so will not impair the exclusion from gross income for federal income tax purposes of interest on the Bonds and any Parity Bonds issued on a tax-exempt basis. (8) Subsequent Opinions. If the District obtains a subsequent opinion of Bond Counsel other than Stradling Yocca Carlson & Rauth, a Professional Corporation, where such opinion is required in connection with a change or amendment to this Indenture or the procedures set forth in the Tax Certificate, it will obtain an opinion substantially to the effect originally delivered by Stradling Yocca Carlson & Rauth, a Professional Corporation, that interest on the Bonds is excluded from gross income for federal income tax purposes.
(g) Reduction of Maximum Special Taxes. The District hereby finds and determines that, historically, delinquencies in the payment of special taxes authorized pursuant to the Act in community facilities districts in California have from time to time been at levels requiring the levy of special taxes at the maximum authorized rates in order to make timely payment of principal of and interest on the outstanding indebtedness of such community facilities districts. For this reason, the District hereby determines that a reduction in the maximum Special Tax rates authorized to be levied on parcels in the District below the levels provided in this Section 5.2(g) would interfere with the timely retirement of the Bonds and Parity Bonds. The District determines it to be necessary in order to preserve the security for the Bonds and Parity Bonds to covenant, and, to the maximum extent that the law permits it to do so, the District hereby does covenant, that it shall not initiate proceedings to reduce the maximum Special Tax rates for the District, unless, in connection therewith, the District receives a certificate from one or more Independent Financial Consultants which, when taken together, certify that: (i) such changes do not reduce the maximum Special Taxes that may be levied in each year on property within the District to an amount which is less than the Administrative Expense Cap plus 110% of the Annual Debt Service due in each corresponding future Bond Year with respect to the Bonds and Parity Bonds Outstanding as of the date of such proposed reduction; and (ii) the District is not delinquent in the payment of the principal of or interest on the Bonds or any Parity Bonds.
(h) Covenants to Defend. The District covenants that, in the event that any initiative is adopted by the qualified electors in the District which purports to reduce the maximum Special Tax below the levels specified in Section 5.2(g) above or to limit the power of the District to levy the Special Taxes for the purposes set forth in Section 5.2(b) above, it will commence and pursue legal action in order to preserve its ability to comply with such covenants. (i) Limitation on Right to Tender Bonds. The District hereby covenants that it will not adopt any policy pursuant to Section 53344.1 of the Act permitting the tender of Bonds or Parity Bonds in full payment or partial payment of any Special Taxes unless the District shall have first received a certificate from an Independent Financial Consultant that the acceptance of such a tender will not result in the District having insufficient Net Taxes to pay the principal of and interest on the Bonds and Parity Bonds when due.
(j) Continuing Disclosure. The District covenants to comply with the terms of the Continuing Disclosure Certificate and with the terms of any agreement executed by the District with respect to any Parity Bonds to assist the Underwriter in complying with Rule 15c2-12 adopted by the Securities and Exchange Commission; provided, however, that a failure to comply shall not be 38 4894-8942-0091v4/022599-0033
considered an event of default hereunder and the Owners shall be limited to enforcing the terms thereof in accordance with the terms of the Continuing Disclosure Certificate. (k) Further Assurances. The District shall make, execute and deliver any and all such further agreements, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of this Indenture and for the better assuring and confirming unto the Owners of the Bonds and any Parity Bonds of the rights and benefits provided in this Indenture.
ARTICLE VI
AMENDMENTS TO INDENTURE
Section 6.1. Supplemental Indentures or Orders Not Requiring Owner Consent. The District may from time to time, and at any time, without notice to or consent of any of the Owners, adopt Supplemental Indentures for any of the following purposes:
(a) to cure any ambiguity, to correct or supplement any provisions herein which may be inconsistent with any other provision herein, or to make any other provision with respect to matters or questions arising under this Indenture or in any additional resolution or order, provided that such action is not materially adverse to the interests of the Owners; (b) to add to the covenants and agreements of and the limitations and the restrictions upon the District contained in this Indenture other covenants, agreements, limitations and restrictions to be observed by the District which are not contrary to or inconsistent with this Indenture as theretofore in effect or which further secure Bond or Parity Bond payments; (c) to provide for the issuance of any Parity Bonds, and to provide the terms and conditions under which such Parity Bonds may be issued, subject to and in accordance with the provisions of this Indenture;
(d) to modify, amend or supplement this Indenture in such manner as to permit the qualification hereof under the Trust Indenture Act of 1939, as amended, or any similar federal statute hereafter in effect, or to comply with the Code or regulations issued thereunder, and to add such other terms, conditions and provisions as may be permitted by said act or similar federal statute, and which shall not materially adversely affect the interests of the Owners of the Bonds or any Parity Bonds then Outstanding;
(e) to modify, alter or amend the RMA in any manner, so long as the Trustee receives a certificate of an Independent Financial Consultant stating that: (i) such changes do not reduce the maximum Special Taxes that may be levied in each year on property within the District to an amount which is less than the Administrative Expense Cap plus 110% of the Annual Debt Service due in each corresponding future Bond Year with respect to the Bonds and Parity Bonds Outstanding as of the date of such amendment and (ii) based on the current development plan for parcels within the District, do not reduce the maximum Special Taxes which could be levied upon Taxable Property within the District to an amount which is less than the Administrative Expense Cap plus 110% of the Annual Debt Service due in each corresponding future Bond Year with respect to the Bonds and Parity Bonds Outstanding as of the date of such amendment; 39 4894-8942-0091v4/022599-0033
(f) to modify, alter, amend or supplement this Indenture in any other respect which is not materially adverse to the Owners; or
(g) to modify, alter, amend or supplement this Indenture in any other respect, as may be required to fund all or a portion of the 2023 Bonds Reserve Requirement or any other Reserve Requirement with respect to Parity Bonds with a Reserve Policy.
Section 6.2. Supplemental Indentures or Orders Requiring Owner Consent.
Exclusive of the Supplemental Indentures described in Section 6.1, the Owners of not less than a majority in aggregate principal amount of the Bonds and Parity Bonds Outstanding shall have the right to consent to and approve the adoption by the District of such Supplemental Indentures as shall be deemed necessary or desirable by the District for the purpose of waiving, modifying, altering, amending, adding to or rescinding, in any particular, any of the terms or provisions contained in this Indenture; provided, however, that nothing herein shall permit, or be construed as permitting: (a) an extension of the maturity date of the principal, or the payment date of interest on, any Bond or Parity Bond; (b) a reduction in the principal amount of, or redemption premium on, any Bond or Parity Bond or the rate of interest thereon; (c) a preference or priority of any Bond or Parity Bond over any other Bond or Parity Bond; or (d) a reduction in the aggregate principal amount of the Bonds and Parity Bonds the Owners of which are required to consent to such Supplemental Indenture, without the consent of the Owners of all Bonds and Parity Bonds then Outstanding.
If at any time the District shall desire to adopt a Supplemental Indenture, which pursuant to the terms of this Section shall require the consent of the Owners, the District shall so notify the Trustee and shall deliver to the Trustee a copy of the proposed Supplemental Indenture. The Trustee shall, at the expense of the District, cause notice prepared by counsel of the District of the proposed Supplemental Indenture to be mailed, by first class mail, postage prepaid, to all Owners at their addresses as they appear in the Bond Register. Such notice shall briefly set forth the nature of the proposed Supplemental Indenture and shall state that a copy thereof is on file at the Principal Office of the Trustee for inspection by all Owners. The failure of any Owners to receive such notice shall not affect the validity of such Supplemental Indenture when consented to and approved by the Owners of not less than a majority in aggregate principal amount of the Bonds and Parity Bonds Outstanding as required by this Section. Whenever at any time within one year after the date of the first mailing of such notice, the Trustee shall receive an instrument or instruments purporting to be executed by the Owners of not less than a majority in aggregate principal amount of the Bonds and Parity Bonds Outstanding, which instrument or instruments shall refer to the proposed Supplemental Indenture described in such notice, and shall specifically consent to and approve the adoption thereof by the District substantially in the form of the copy referred to in such notice as on file with the Trustee, such proposed Supplemental Indenture, when duly adopted by the District, shall thereafter become a part of the proceedings for the issuance of the Bonds and any Parity Bonds. In determining whether the Owners of a majority of the aggregate principal amount of the Bonds and Parity Bonds have consented to the adoption of any Supplemental Indenture, Bonds or Parity Bonds which are owned by the District or by any person directly or indirectly controlling or controlled by or under the direct or indirect common control with the District, shall be disregarded and shall be treated as though they were not Outstanding for the purpose of any such determination.
Upon the adoption of any Supplemental Indenture and the receipt of consent to any such Supplemental Indenture from the Owners of not less than a majority in aggregate principal amount of the Outstanding Bonds and Parity Bonds in instances where such consent is required pursuant to the provisions of this Section, this Indenture shall be, and shall be deemed to be, modified and amended 40 4894-8942-0091v4/022599-0033
in accordance therewith, and the respective rights, duties and obligations under this Indenture of the District and all Owners of Outstanding Bonds and Parity Bonds shall thereafter be determined, exercised and enforced hereunder, subject in all respects to such modifications and amendments.
Section 6.3. Notation of Bonds or Parity Bonds; Delivery of Amended Bonds or Parity Bonds. After the effective date of any action taken as hereinabove provided, the District may determine that the Bonds or any Parity Bonds may bear a notation, by endorsement in form approved by the District, as to such action, and in that case upon demand of the Owner of any Outstanding Bond or Parity Bond at such effective date and presentation of such Owner's Bond or Parity Bond for the purpose at the Principal Office of the Trustee or at such additional offices as the Trustee may select and designate for that purpose, a suitable notation as to such action shall be made on such Bonds or Parity Bonds at the District's expense. If the District shall so determine, new Bonds or Parity Bonds so modified as, in the opinion of the District, shall be necessary to conform to such action shall be prepared and executed, and in that case upon demand of the Owner of any Outstanding Bond or Parity Bond at such effective date such new Bonds or Parity Bonds shall be exchanged, at the sole cost of the District, at the Principal Office of the Trustee or at such additional offices as the Trustee may select and designate for that purpose, without cost to each Owner of Outstanding Bonds or Parity Bonds, upon surrender of such Outstanding Bonds or Parity Bonds.
The Trustee shall have the right to require such opinions of counsel as it deems necessary concerning: (i) the lack of material adverse effect of the amendment on Owners; and (ii) the fact that the amendment will not affect the tax status of interest with respect to the Bonds. In executing, or accepting the additional trusts created by, any Supplemental Indenture permitted by this Article or the modification thereby of the trusts created by this Indenture, the Trustee shall receive, and shall be fully protected in relying upon, a Certificate of an Authorized Representative and an opinion of counsel to the District stating that the execution of such Supplemental Indenture is authorized or permitted by this Indenture and that such Supplemental Indenture is the legal, valid and binding obligation of the District, enforceable against the District in accordance with its terms. The Trustee may, but shall not be obligated to, enter into any such Supplemental Indenture which affects the Trustee's own rights, duties or immunities under this Indenture or otherwise.
ARTICLE VII
TRUSTEE
Section 7.1. Trustee. Wilmington Trust, National Association, shall be the Trustee for the Bonds and any Parity Bonds unless and until another Trustee is appointed by the District hereunder. The Trustee represents that it has a combined capital (exclusive of borrowed capital) and surplus of at least $100,000,000. The District may, at any time, appoint a successor Trustee satisfying the requirements of Section 7.2 below for the purpose of receiving all money which the District is required to deposit with the Trustee hereunder and to allocate, use and apply the same as provided in this Indenture.
The Trustee is hereby authorized to and shall mail by first class mail, postage prepaid, or wire transfer in accordance with Section 2.5 above, interest payments to the Bondowners, to select Bonds and Parity Bonds that are not held in the name of the Nominee for redemption, and to maintain the Bond Register. The Trustee is hereby authorized to pay the principal of and premium, if any, on the Bonds and Parity Bonds when the same are duly presented to it for payment at maturity or on call and redemption, to provide for the registration of transfer and exchange of Bonds and Parity Bonds 41 4894-8942-0091v4/022599-0033