JOINT COMMUNITY FACILITIES AGREEMENT
by and between
CITY OF CATHEDRAL CITY
and
DESERT RECREATION DISTRICT
Relating to
CITY OF CATHEDRAL CITY
COMMUNITY FACILITIES DISTRICT NO. 2022-1
(CATHEDRAL CITY PARK & RECREATION SERVICES)
This Joint Community Facilities Agreement (this “Agreement”), dated as of ________, 2022, by and between the City of Cathedral City, a municipal corporation and general law city, duly organized and existing under the laws of the State of California (the “City”), and the Desert Recreation District, a park and recreation district duly organized and existing under the laws of the State of California (the “DRD,” and together with City, the “Parties”).
WITNESSETH:
WHEREAS, City is conducting proceedings under the Mello-Roos Community Facilities Act of 1982 (California Government Code section 53311 et seq.) (the “Act”) to form its City of Cathedral City Community Facilities District No. 2022-1 (Cathedral City Park & Recreation Services) (the “CFD”) to finance certain public services (the “Services”) and public facilities (the “Facilities”), which Services and Facilities are detailed in Exhibit A hereto; WHEREAS, if the CFD proceedings are successful, the City shall use the special tax revenues generated by the CFD to pay for the Services and to issue special tax bonds (the “Bonds”) to generate up-front monies to pay for some or all of the Facilities; WHEREAS, the CFD proceedings include a two-thirds vote of the registered voters within the boundary of the CFD, which boundary is coterminous with the boundary of the City; WHEREAS, DRD currently provides park and recreation services in the region surrounding the City, but not currently within the City, and plans to submit an application to the Riverside County Local Agency Formation Commission (“LAFCO”) to annex the territory within the City into the service area of the District;
WHEREAS, the City has determined that placing a local revenue measure on the ballot and the successful approval of the measure would provide long-term funding for park and recreation facilities and services to the territory within the City, whether provided by the City or by DRD, pursuant to the contemplated LAFCO proceedings or otherwise; WHEREAS, under Section 53316.2 of the Act, a community facilities district may finance facilities to be owned or operated by a public agency other than the agency that created the 2 district, or services to be provided by a public agency other than the agency that created the district, or any combination, pursuant to a joint community facilities agreement or a joint exercise of powers agreement adopted pursuant to said section;
WHEREAS, the City Council of the City and the Board of Directors of the DRD have both approved the form of this Agreement and determined the Agreement would be beneficial to their respective residents, as required by Section 53316.2 of the Act, and this Agreement is made under the authority of Section 53316.2 of the Act; and
WHEREAS, in consideration for the mutual undertakings of the Parties stated herein, the Parties agree as follows:
AGREEMENT:
1. Administration of CFD and Issuance and Administration of Bonds. Unless and until otherwise decreed pursuant to LAFCO proceedings involving DRD, the City shall administer the CFD, including employing and paying all consultants, annually levying the special tax, paying and administering the Bonds, and complying with all State and federal requirements appertaining to the CFD and the Bonds, including the requirements of the United States Internal Revenue Code of 1986, as amended (the “Code”).
The Parties understand and agree that the Bonds are anticipated to be issued as tax- exempt obligations under the Code and will work together with each other and with bond counsel to ensure that the proceeds of the Bonds are not used in a manner which would cause the Bonds to not qualify for or lose their tax-exempt status.
2. Agreement to Annually Create Budget and Allocate Funds. No later than May 1 of each year, the City and DRD shall mutually agree upon a budget for the expenditures of the CFD for the upcoming fiscal year. The budget shall take into account the projected costs and expenses incurred by the City and DRD for the fiscal year with respect to the CFD and the Bonds and allocate CFD special tax revenues and Bond proceeds accordingly. When received, the City shall hold CFD special tax revenues and Bond proceeds (in its own accounts and/or in the accounts of a fiscal agent or trustee for the Bonds) and disburse, or cause to be disbursed, such amounts pursuant to the agreed-upon annual budget.
3. Disbursements from City to DRD. CFD special taxes and Bond proceeds allocable to DRD pursuant to the annual budget shall be disbursed by, or on behalf of, the City pursuant to written requisitions of the DRD, in substantially the form attached hereto as Exhibit B and executed by the General Manager of the DRD or his or her designee (each, an “Authorized Officer”). The City and its designees, including any fiscal agent or trustee of the Bonds, may conclusively rely on such requisitions for purposes of making such disbursements. All disbursements to the DRD shall be made by wire transfer of immediately available funds or by check payable to the DRD’s bank account number at a bank located within the United States on file with City, unless another method of payment is requested in writing by an Authorized Officer.
4. Purchase of DRD Facilities. To the extent DRD is acquiring Facilities using Bond proceeds or CFD special taxes, DRD shall work with the contractors selected to construct such Facilities and to put in place all necessary agreements, certificates or other documents determined by the DRD to be required for the DRD to acquire such Facilities. Neither the City nor any of its agents shall be responsible for inspection or review of any such documents relating to such Facilities.
3 5. Amendments. This Agreement may be amended by a writing signed by the Parties.
6. Effectiveness and Term of this Agreement. The effectiveness of this Agreement is contingent on the approval by the requisite 2/3 vote of the voters of the City voting in favor of the CFD and shall never become effective if said vote is not obtained. Once effective, this Agreement shall remain in full force and effect for so long as the CFD remains effective.
7. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original.
8. Severability. Should any term or provision of this Agreement be determined to be illegal or in conflict with any law of the State of California, the validity of the remaining portions or provisions shall not be affected thereby, and each term or provision of this Agreement shall be valid and be enforced as written to the full extent permitted by law.
9. No Third-Party Beneficiaries. This Agreement shall inure solely to the benefit of the Parties hereto and shall create no rights in any other person or entity.
10. Assignment. This Agreement may not be assigned by one Parity without the written consent of the other Party hereto.
11. Governing Law. The validity, interpretation and performance of this Agreement shall be governed by the laws of the State of California applicable to contracts made and performed in California, without application of conflict of law principles. [Signatures on Following Page]
4 IN WITNESS WHEREOF the Parties have caused this Agreement to be executed by their authorized representatives as of the effective date stated above.
CITY OF CATHEDRAL CITY
By:__________________________
Name:
Title:
DESERT RECREATION DISTRICT
By: ___________________________
Name:
Title:
A-1
EXHIBIT A
LIST OF AUTHORIZED FACILITIES AND SERVICES
The public facilities, public services and incidental costs authorized to be financed by the special taxes levied in the CFD consist of the following:
Authorized Facilities. Authorized facilities consist of the purchase, construction, expansion, improvement, relocation or rehabilitation of any real or other tangible property with an estimated useful life of five years or longer undertaken by the City or another public agency that is recreation-related, including community centers, parks, parkways, open space, and including all direct or indirect costs and expenses related thereto. Authorized facilities also include payment of any bonds, notes, lease payments, indebtedness or other obligations for any authorized facility.
Authorized Services. Authorized services consist of (i) the operation, maintenance, repair and provision of any other services with respect to any authorized facility, including replacement and the funding of a reserve fund to pay for future repair and/or replacement of any authorized facility; such authorized services include, but are not limited to, all general or extraordinary activities deemed necessary or desirable by the City to provide for the use or enjoyment of any and all authorized facilities, whether provided by the City or any outside entity, including maintenance and operations contingencies and reserves with respect thereto; and (ii) any City services which protect public health, improve gang prevention efforts, and/or facilitate afterschool programs for at-risk youth.
Incidental Costs. In addition, costs eligible to be financed by the CFD shall include all costs and expenses incidental to the above and authorized by the Mello-Roos Community Facilities Act of 1982 that are determined by the City to be associated with the authorized facilities or the authorized services, the formation and ongoing administration of the CFD, the election, bonding, or levy and collection of special taxes, as well as all other costs incurred to carry out the authorized purposes of the CFD that are permitted by the Act.
B-1
EXHIBIT B
DISBURSEMENT REQUEST FORM
City of Cathedral City
Community Facilities District No. 2022-1
(Cathedral City Park & Recreation Services)
To:
City of Cathedral City
68700 Avenida Lalo Guerrero
Cathedral City, California 92234
The undersigned, a duly authorized officer of the Desert Recreation District (the “DRD”), hereby requests a disbursement from amounts held by or on behalf of the City of Cathedral City (the “City”) with respect to the above-referenced community facilities district (the “CFD”), in the amount(s) set forth below for the purpose(s) described herein:
Purpose(s) Amount(s)
[Description of Services and/or Facilities financed] $
Total:
[Applicable to all disbursement requests:]
1. These funds have been or will be used to pay for public services and/or public facilities that are authorized to be funded from the CFD.
2. None of the expenditures for which payment is requested have been previously reimbursed to DRD from the CFD or any other source. [Applicable only to disbursement of Bond proceeds:]
3. These funds have been or will be used to acquire and/or construct capital improvements, and this disbursement is not being made for the purpose of reinvestment.
4. These funds are being used to finance or refinance public infrastructure and/or facilities (the “Improvements”). DRD will own, and for the entire useful life of such Improvements reasonably expects to own, all of such Improvements. The Improvements consist of the following:
[Describe the improvements]
5. To the extent any of the Improvements are sold to an entity that is not a state or B-2
local government agency, DRD will seek the advice and approval of bond counsel prior to any such sale. DRD will not allow any of the Improvements to be used (for example, by lease or other contract) in the trade or business of any nongovernmental persons (other than in their roles as members of the general public). All of the Improvements will be used in the performance of essential governmental functions of DRD or another state or local government agency. The average expected useful life of such Improvements is at least [30] years. The representations and covenants contained in this paragraph are intended to support the conclusion that the interest paid on the bonds issued to finance the Improvements is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986 (the “Code”).
Dated:
Signature:
Name/Title: