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Limitation on Maximum Special Tax Rate. The annual levy of the Special Tax is subject to the maximum annual Special Tax rate authorized in the Rate and Method. The levy cannot be made at a higher rate even if the failure to do so means that the estimated proceeds of the levy and collection of the Special Tax, together with other available funds, will not be sufficient to pay Debt Service on the 2025A Bonds.
No Relationship Between Property Value and Special Tax Levy. Because the Special Tax formula set forth in the Rate and Method is not based on property v alue, the levy of the Special Tax will rarely, if ever, result in a uniform relationship between the value of particular parcels of Taxable Property and the amount of the levy of the Special Tax against those parcels.
Thus, there will rarely, if ever, be a uniform relationship between the value of the parcels of Taxable Property and their proportionate share of Debt Service on the 2025A Bonds, and certainly not a direct relationship.
Factors that Could Lead to Special Tax Deficiencies. The following are some of the factors that might cause the levy of the Special Tax on any particular parcel of Taxable Property to vary from the Special Tax that might otherwise be expected:
Transfers to Governmental Entities. The number of parcels of Taxable Property could be reduced through the acquisition of Taxable Property by a governmental entity and failure of the government to pay the Special Tax based upon a claim of exemption or, in the case of the federal government or an agency thereof, immunity from taxatio n, thereby resulting in an increased tax burden on the remaining taxed parcels. See “ – Exempt Properties” below.
Property Tax Delinquencies. Failure of the owners of Taxable Property to pay property taxes (and, consequently, the Special Tax), or delays in the collection of or inability to collect the Special Tax by tax sale or foreclosure and sale of the delinquent parcels, could result in a deficiency in the collection of Special Tax revenues. See “ – Property Tax Delinquencies” below.
Delays Following Special Tax Delinquencies and Foreclosure Sales. The Fiscal Agent Agreement generally provides that the Special Tax is to be collected in the same manner as ordinary ad valorem property taxes are collected and, except as provided in the special covenant for foreclosure described in “SECURITY FOR THE 2025A BOND S – Covenant to Foreclose” and in the Act, is subject to the same penalties and the same procedure, sale and lien priority in case of delinquency as is provided for ordinary ad valorem property taxes. Under these procedures, if taxes are unpaid for a period of five years or more, the property is deeded to the State and then is subject to sale by the County.
If sales or foreclosures of property are necessary, there could be a delay in paym ents to owners of the 2025A Bonds pending such sales or the prosecution of foreclosure proceedings and receipt by the District of the proceeds of sale if the 2019 Reserve Fund is depleted. See “SECURITY FOR THE 2025A BONDS – Covenant to Foreclose.”
The a bility of the City to collect interest and penalties specified by State law and to foreclose against properties having delinquent Special Tax installments may be limited in certain respects with regard to properties in which a federal governmental agency has or obtains an interest. See “– FDIC/Federal Government Interests in Properties” below.
Other laws generally affecting creditors’ rights or relating to judicial foreclosure may affect the ability to enforce payment of Special Taxes or the timing of enf orcement of Special Taxes.
For example, the Soldiers and Sailors Civil Relief Act of 1940 affords protections such as a stay
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in enforcement of the foreclosure covenant, a six-month period after termination of military service to redeem property sold to enforce the collection of a tax or assessment , and a limitation on the interest rate on the delinquent tax or assessment to persons in military service if the court concludes the ability to pay such taxes or assessments is materially affected by reason of su ch service.
Property Tax Delinquencies
General. Delinquencies in the payment of property taxes and, consequently, the Special Taxes, can occur because the owners of delinquent parcels may not have received property tax bills from the County in a timely manner, including situations in which the County initially sent property tax bills to the property developer or merchant builder at a time when the parcels in question had already been sold to individual homeowners. Delinquencies can also reflect economic difficulties and duress by the property owner.
Numerous future delinquencies by the owners of Taxable Property in Improvement Area B in the payment of property taxes (and, consequently, the Special Taxes, which are collected on the ordinary property tax bills) when due could result in a deficiency in Special Tax revenues necessary to pay Debt Service on the 2025A Bonds, which could in turn result in the depletion of the 2019 Reserve Fund, prior to reimbursement from the resale of foreclosed property or payment of the delinquent Special Tax. See “SECURITY FOR THE 2025A BONDS – 2019 Reserve Fund,” and “THE DISTRICT AND IMPROVEMENT AREA B – Potential Consequences of Special Tax Delinquencies.”
Measures to Mitigate Consequences of Continuing Delinquencies. The City intends to take certain actions designed to mitigate the impact of future delinquencies, including: enforcing the lien of the S pecial Taxes through collection procedures that will include foreclosure actions under certain circumstances (see “SECURITY FOR THE 2025A BOND S – Covenant to Foreclose”); and increasing the levy of Special Taxes against non-delinquent property owners in Improvement Area B, to the extent permitted under the Rate and Method and the Act and to the extent the Special Taxes are not already being levied at the maximum Special Tax rate. See “THE DISTRICT AND IMPROVEMENT AREA B – Potential Consequences of Special Tax Delinquencies.”
Limitations on Increases in Special Tax Levy. If property owners are delinquent in the payment of the Special Tax, the City may not increase Special Tax levies to make up for delinquencies for prior fiscal years above the maximum annual Special Tax rates specified in the Rate and Method.
In addition, the City’s ability to increase Special Tax levies on residential property to make up for delinquencies for prior Fiscal Years is limited by Section 53321(d) of the Act, which provides that the special tax levied against any parcel for which an occupancy permit for private residential use has been issued may not be increased as a consequence of delinquency or default by the owner of any other parcel by more than 10% above the amount that would have been levied in such Fiscal Year had there never been any such delinquencies or defaults.
In cases of significant delinquency, these factors may result in defaults in the payment of principal of and interest on the 2025A Bonds.
Risks Related to Homeowners with High Loan to Value Ratios
Any future decline in home values in Improvement Area B could result in property owner unwillingness or inability to pay mortgage payments, as well as ad valorem property taxes and
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Special Taxes, when due. Under such circumstances, bankruptcies are likely to increase.
Bankruptcy by homeowners with delinquent Special Taxes would delay the commencement and completion of foreclosure proceedings to collect delinquent Special Taxes.
It is possible that laws could be enacted in the future to assist homeowners in default in the payment of mortgages and property taxes. It is further possible that federal laws could be enacted that would adversely impact the ability of the City to foreclose on parcels with delinquent Special Taxes. No assurance can be given that any such laws will be enacted, or if enacted will be effective in assisting affected homeowners.
Payment of Special Tax is not a Personal Obligation of the Property Owners
An owner of Taxable Property is not personally obligated to pay the Special Taxes.
Rather, the Special Taxes are an obligation running only against the parcels of Taxable Property.
If, after a default in the payment of the Special Tax and a foreclosure sale by the City, the resulting proceeds are insufficient, taking into account other obligations also constituting a lien against the affected parcels of Taxable Property, the City has no recourse against the owner.
Assessed Values
The City has not commissio ned an appraisal of the parcels in Improvement Area B in connection with the issuance of the 2025A Bonds. Therefore, the estimated valuations of all Taxable Property in Improvement Area B set forth in this Official Statement are based on the County Assessor’s values. The assessed value is not an indication of what a willing buyer might pay for a property. The assessed value is not evidence of future value because future facts and circumstances may differ significantly from the present.
No assurance can be given that any of the Taxable Property in Improvement Area B could be sold for the assessed value if that property should become delinquent and subject to foreclosure proceedings.
Property Values
The value of Taxable Property within Improvement Area B is a critical factor in determining the investment quality of the 2025A Bonds. If a property owner defaults in the payment of the Special Tax, the City’s only remedy is to foreclose on the delinquent property in an attempt to obtain funds with which to pay the delinquent Special Tax. Land values could be adversely affected by economic and other factors beyond the City’s control, such as a general economic downturn, relocation of employers out of the area, shortages of water, electricity, natural gas or other utilities, destruction of property caused by earthquake, flood, landslides, wildfires, or other natural disasters, environmental pollution or contamination, or unfavorable economic conditions.
The following is a discussion of specific risk factors that could affect the value of property in Improvement Area B.
Prolonged Economic Downturn. Land values are affected by economic conditions and to the extent that an economic downturn is prolonged, property values could decline or remain flat for an indefinite period. Declines in home values in Improvement Area B could also result in property owner unwillingness or inability to pay mortgage payments, as well as ad valorem property taxes and Special Taxes, when due. Under such circumstances, bankruptcies are likely to increase. Bankruptcy by homeowners with delinquent Special Taxes would delay the commencement and completion of foreclosure proceedings.
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Risks Related to A vailability of Mortgage Loans. The state of the world -wide capital markets may adversely affect the availability of mortgage loans to homeowners, including potential buyers of homes within Improvement Area B. Any such unavailability could hinder the ability of the current homeowners to resell their homes, or the sale of newly completed homes in the future.
Natural Disasters. The value of the Taxable Property in the future can be adversely affected by a variety of natural occurrences, particularly those that may affect infrastructure and other public improvements and private improvements on the Taxable Property and the continued habitability and enjoyment of such private improvements.
The City, like all northern California communities, is likely to be subject to unpredictable seismic activity, fires, floods or other natural disasters. If there were a severe seismic, flood or fire event or other natural disaster in the City, there could be substantial damage to and interference with the City.
Seismic Activity. The City is located along the eastern edge of the seismically active Coast Ranges of California. Active faults nea r the City include the Green Valley and Cordelia faults. Most large earthquakes in the Bay Area have occurred along the major faults including the San Andreas, Hayward, Calaveras faults, which are located 20 to 45 miles west and south of the City.
The closest mapped fault to Improvement Area B is the Vaca fault zone (Vaca fault, not considered active), located within approximately 500 feet of the northwest corner of the project site. The closest active fault displaying surface expression is the Green Valley fault, located approximately 8 miles west of Improvement Area B. The maximum magnitude earthquake (the “Mmax”) assumed for the Green Valley fault in this region is
6.8. The Mmax is the maximum earthquake believed possible for the fault.
Flooding Hazards. The District is located in an area of minimal flooding according to FEMA. In particular, Improvement Area B is located in an area designated by FEMA as being within Zone X, with a 0.02% chance of flooding in any given year.
Wildfire Hazards. Significant portions of the foothill watershed areas surrounding the City are threatened with wildfire risk, and these areas present a dangerous combination of factors. Land in California is divided generally into areas where either the State or local a gencies such as cities are responsible for wildfire protection and prevention, known respectively as the State Responsibility Area and Local Responsibility Areas. The California Department of Forestry and Fire Protection (“ Cal Fire”) has classified land wi thin the State Responsibility Area into Moderate, High, and Very High Fire Hazard Severity Zones based on fuel loading, slope, fire weather, and other factors.
While Cal Fire was previously required only to map Very High Fire Hazard Severity Zones within Local Responsibility Areas , a State law passed in 2021 extended Moderate and High Fire Hazard Severity Zones to Local Responsibility Areas. Cal Fire began releasing updated Fire Hazard Severity Zone maps for Local Responsibility Areas in February 2025.
In the City, Moderate and High Fire Hazard Severity Zones are located in the hilly areas to the west and northwest, the Cement Hill area, the hills above Green Valley and the hills above Interstate 80 and 680 just south of Cordelia. Improvement Area B is within the City’s Local Responsibility Area and is not within a High or Very High Fire Hazard Severity Zone.
Drought. With respect to droughts specifically, California has a history of suffering periodic drought conditions. Most recently, on May 10, 2021, the governor proclaimed a State of Emergency for 41 of the State’s 58 counties (including Solano County), citing above -average
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temperatures and dry conditions. In April 2022, the governor extended the State of Emergency to all counties in the State and ask ed all Californians to voluntarily reduce water usage by 15%.
While some drought -related water restrictions were eased in May 2023, no assurance can be given that drought conditions will not continue in future years or, subside only to return in the future, potentially impacting the development of property in Improvement Area B, the value of Taxable Property within Improvement Area B, or economic activity within Improvement Area B.
Legal Requirements. Other events that may affect the value of Taxable Property include changes in the law or application of the law. Such changes may include, without limitation, local growth control initiatives, local utility connection moratoriums and local application of statewide tax and governmental spending limitation measures.
Hazardous Substances. One of the most serious risks in terms of the potential reduction in the value of Taxable Property is a claim with regard to a hazardous substance. In general, the owners and operators of Taxable Property may be required by law to remedy conditions of the parcel relating to releases or threatened releases of hazardous substances. The federal Comprehensive Environmental Response, Compensation and Liability Act of 1980, s ometimes referred to as “CERCLA” or the “Superfund Act,” is the most well-known and widely applicable of these laws, but California laws with regard to hazardous substances are also stringent and similar.
Under many of these laws, the owner or operator is obligated to remedy a hazardous substance condition of property whether or not the owner or operator has anything to do with creating or handling the hazardous substance. The effect, therefore, should any of the Taxable Property be affected by a hazardous substance, is to reduce the marketability and value of the parcel by the costs of remedying the condition, because the purchaser, upon becoming owner, will become obligated to remedy the condition just as is the seller.
The property values set forth in this Official Statement do not take into account the possible reduction in marketability and value of any of the Taxable Property by reason of the possible liability of the owner or operator for the remedy of a hazardous substance condition of the parcel.
Although the City is not aware that the owner or operator of any of the Taxable Property has such a current liability with respect to any of the Taxable Property, it is possible that such liabilities do currently exist and that the City is not aware of them.
Further, it is possible that liabilities may arise in the future with respect to any of the Taxable Property resulting from the existence, currently, on the parcel of a substance presently classified as hazardous but that has not been released or the release of which is not presently threatened, or may arise in the future resulting from the existence, currently on the parcel of a substance not presently classified as hazardous but that may in the future be so classified.
Further, such liabilities may arise not simply from the existence of a hazardous substance but from the method of handling it. All of these possibilities could significantly affect the value of Taxable Property that is realizable upon a delinquency.
There can be no assurance that the discovery, release or classification of additional hazardous substances will not affect the value of Taxable Property in Improvement Area B.
Other Factors. Other factors that could adversely affect property values in Improvement Area B include, among others, relocation of employers out of the area, shortages of water, electricity, natural gas or other utilities, and destruction of property caused by man -made disasters.
Value to Lien Ratios
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Assessed or appraised value -to-lien ratios have traditionally been used in land -secured bond issues as a measure of the “collateral” supporting the willingness of property owners to pay their special taxes and assessment s (and, in effect, their general property taxes as well). The value-to-lien ratio is mathematically a fraction, the numerator of which is the value of the property as measured by assessed values or appraised values (in this case, the assessed value of taxable property within Improvement Area B as of the 2024-25 fiscal year) and the denominator of which is the “lien” of the allocable share of assessment or special tax bonds. A value to lien ratio should not, however, be viewed as a guarantee for credit -worthiness. Land values are sensitive to economic cycles. A downturn of the economy or other market factors may depress land values and lower the value -to-lien ratios. Although judicial foreclosure proceedings can be initiated rapidly, the process can take several years to complete, and the bankruptcy courts may impede the foreclosure action. No assurance can be given that, should a parcel with delinquent Special Taxes be foreclosed upon and sold for the amount of the delinquency, any bid will be received for such property or, if a bid is received, that such bid will be sufficient to pay all delinquent Special Taxes. Finally, local agencies may form overlapping community facilities districts or assessment districts. Local agencies typically do not coordinate th eir bond issuances. Debt issuance by another entity could dilute value to lien ratios.
Other Possible Claims Upon the Value of Taxable Property
While the Special Taxes are secured by the Taxable Property, the security only extends to the value of such T axable Property that is not subject to priority and parity liens and similar claims.
The tables in the sections entitled “THE DISTRICT AND IMPROVEMENT AREA B – Direct and Overlapping Governmental Obligations” and “THE DISTRICT AND IMPROVEMENT AREA B – Illustrative Tax Bill” show the presently outstanding amount of governmental obligations, the tax or assessment for which is or may become an obligation of one or more of the parcels of Taxable Property. The table s do not specifically identify which of th e governmental obligations are secured by liens on one or more of the parcels of Taxable Property.
In addition, other governmental obligations may be authorized and undertaken or issued in the future, the tax, assessment or charge for which may become an obligation of one or more of the parcels of Taxable Property and may be secured by a lien on a parity with the lien of the Special Tax securing the 2025A Bonds.
In general, as long as the Special Tax is collected on the County tax roll, the Special Tax and all other taxes, assessments and charges also collected on the tax roll are on a parity, that is, are of equal priority. Questions of priority become significant when collection of one or more of the taxes, assessments or charges is sought by some other procedure, such as foreclosure and sale. In the event of proceedings to foreclose for delinquency of Special Taxes securing the 2025A Bonds, the Special Tax will be subordinate only to existing prior governmental liens, if any.
Otherwise, in the event of such foreclosure proceedings, the Special Taxes will generally be on a parity with the other taxes, assessments and charges, and will share the proceeds of such foreclosure proceedings on a pro -rata basis. Although the Special Taxes will generally have priority over non-governmental liens on a parcel of Taxable Property, regardless of whether the non-governmental liens were in existence at the time of the levy of the Special Tax or not, this result may not apply in the case of bankruptcy. See “– Bankruptcy Delays” below.
Exempt Properties
Certain properties are exempt from the Special Tax in accordance with the Rate and Method and the Act, which provides that properties or entities of the state, federal or local
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government are exempt from the Special T ax; provided, however, that property within Improvement Area B acquired by a public entity through a negotiated transaction or by gift or devise, which is not otherwise exempt from the Special Tax, will continue to be subject to the Special Tax. See “SECURITY FOR THE 2025A BONDS – Rate and Method.”
In addition, although the Act provides that if property subject to the Special Tax is acquired by a public entity through eminent domain proceedings, the obligation to pay the Special Tax with respect to that property is to be treated as if it were a speci al assessment, the constitutionality and operation of these provisions of the Act have not been tested, meaning that such property could become exempt from the Special Tax. The Act further provides that no other properties or entities are exempt from the Special Tax unless the properties or entities are expressly exempted in a resolution of consideration to levy a new special tax or to alter the rate or method of apportionment of an existing special tax.
FDIC/Federal Government Interests in Properties
General. The ability of the City to foreclose the lien of delinquent unpaid Special Tax installments may be limited with regard to properties in which the FDIC, the Federal National Mortgage Association, the Drug Enforcement Agency, the Internal Revenue Se rvice, or other federal agency has or obtains an interest.
Federal courts have held that, based on the supremacy clause of the United States Constitution, in the absence of Congressional intent to the contrary, a state or local agency cannot foreclose to collect delinquent taxes or assessments if foreclosure would impair the federal government interest.
The supremacy clause of the United States Constitution reads as follows: “This Constitution, and the Laws of the United States which shall be made in Pur suance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the contrary notwithstanding.”
This means that, unless Congress has otherwise provided, if a federal governmental entity owns a parcel that is subject to Special Taxes but does not pay taxes and assessments levied on the parcel (including Special Taxes), the applicable state and local governments cannot foreclose on the parcel to collect the delinquent taxes and assessments.
Moreover, unless Congress has otherwise provided, if the federal government has a mortgage interest in the parcel and the City wishes t o foreclose on the parcel as a result of delinquent Special Taxes, the property cannot be sold at a foreclosure sale unless it can be sold for an amount sufficient to pay delinquent taxes and assessments on a parity with the Special Taxes and preserve the federal government’s mortgage interest. In Rust v. Johnson (9th Circuit; 1979) 597 F.2d 174, the United States Court of Appeal, Ninth Circuit held that the Federal National Mortgage Association (“FNMA”) is a federal instrumentality for purposes of this doctrine, and not a private entity, and that, as a result, an exercise of state power over a mortgage interest held by FNMA constitutes an exercise of state power over property of the United States.
The City has not undertaken to determine whether any federal governmental entity currently has, or is likely to acquire, any interest (including a mortgage interest) in any of the parcels subject to the Special Taxes, and therefore expresses no view concerning the likelihood that the risks described above will materialize while the 2025A Bonds are outstanding.
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FDIC. In the event that any financial institution making any loan which is secured by real property within Improvement Area B is taken over by the FDIC, and prior thereto or thereafter the loan or loans go into default, resulting in ownership of the property by the FDIC, then the ability of the City to collect interest and penalties specified by State law and to foreclose the lien of delinquent unpaid Special Taxes may be limited.
The FDIC’s policy statement regarding the payment of state and local real property taxes (the “Policy Statement”) provides that property owned by the FDIC is subject to state and local real property taxes only if those taxes are assessed according to the property’s value, and that the FDIC is immune from real property taxes assessed on any basis other than property value.
According to the Policy Statement, the FDIC will pay its property tax obligations when they become due an d payable and will pay claims for delinquent property taxes as promptly as is consistent with sound business practice and the orderly administration of the institution’s affairs, unless abandonment of the FDIC’s interest in the property is appropriate. Th e FDIC will pay claims for interest on delinquent property taxes owed at the rate provided under state law, to the extent the interest payment obligation is secured by a valid lien. The FDIC will not pay any amounts in the nature of fines or penalties and will not pay nor recognize liens for such amounts.
If any property taxes (including interest) on FDIC -owned property are secured by a valid lien (in effect before the property became owned by the FDIC), the FDIC will pay those claims. The Policy Statement further provides that no property of the FDIC is subject to levy, attachment, garnishment, foreclosure or sale without the FDIC’s consent. In addition, the FDIC will not permit a lien or security interest held by the FDIC to be eliminated by foreclosur e without the FDIC’s consent.
The Policy Statement states that the FDIC generally will not pay non -ad valorem taxes, including special assessments, on property in which it has a fee interest unless the amount of tax is fixed at the time that the FDIC acquires its fee interest in the property, nor will it recognize the validity of any lien to the extent it purports to secure the payment of any such amounts. Special taxes imposed under the Act and a special tax formula which determines the special tax due each year are specifically identified in the Policy Statement as being imposed each year and therefore covered by the FDIC’s federal immunity. The Ninth Circuit has issued a ruling on August 28, 2001 in which it determined that the FDIC, as a federal agenc y, is exempt from Mello -Roos special taxes.
The City is unable to predict what effect the application of the Policy Statement would have in the event of a delinquency in the payment of Special Taxes on a parcel within Improvement Area B in which the FDIC has or obtains an interest, although prohibiting the lien of the Special Taxes to be foreclosed out at a judicial foreclosure sale could reduce or eliminate the number of persons willing to purchase a parcel at a foreclosure sale. Such an outcome could cause a draw on the 2019 Reserve Fund and perhaps, ultimately, if enough property were to become owned by the FDIC, a default in payment on the 2025A Bonds.
Depletion of 2019 Reserve Fund
The 2019 Reserve Fund is to be maintained at an amount equal to the 2019 Reserve Requirement for the 2019A Bonds, the 2025A Bond s and any Related Parity Bonds . See “SECURITY FOR THE 2025A BONDS – 2019 Reserve Fund.” The 2019 Reserve Fund will be used to pay principal of and interest on the 2019A Bonds, the 2025A Bonds (and any Related Parity Bonds) if insufficient funds are available from the proceeds of the levy and collection of the Special Tax against property within Improvement Area B of the District. If the 2019 Reserve Fund is depleted, it can be replenished from the proceeds of the levy and collection of the Special Taxes that exceed the amounts to be paid to the owners of the 2019A Bonds and the 2025A Bonds (and any Related Parity Bonds) under the Fiscal Agent Agreement. However, because the Special
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Tax levy is limited to the maximum annual Special Tax rates, it is possible that no replenishment would be possible if the Special Tax proceeds, together with other available funds, remain insufficient to pay all such amounts. Thus , it is possible that the 2019 Reserve Fund will be depleted and not be replenished by the levy and collection of the Special Taxes.
[Risks Associated with the Reserve Policy Provider
The City may elect to fund the 2019 Reserve Fund with a Reserve Policy. The City can provide no assurances that the provider of the Reserve Policy will be able to meet its obligations under the Reserve Policy, if and when required to do so. In addition, any change in the ratings of the provider could impact the price of the 2025A Bonds in the secondary market.]
[Risks Associated with Bond Insurance
Before the delivery of the 2025A Bonds, the City will pay the premiums for the Policy and the Reserve Policy. The City can provide no assurances that the Bond Insurer will be able to meet its obligations under the Policy or the Reserve Policy, if and when required to do so. In addition, any change in the ratings of the Bond Insurer could impact the price of the 2025A Bonds in the secondary market.]
Bankruptcy Delays
The payment of the Special Tax and the ability of the City to foreclose the lien of a delinquent unpaid Special Tax, as discussed in “SECURITY FOR THE 2025A BONDS,” may be limited by bankruptcy, insolvency or other laws generally affecting creditors' rights or by the laws of the State of California relating to judicial foreclosure. The various legal opinions to be delivered concurrently with the delivery of the 2025A Bonds (including Bond Counsel's approving legal opinion) will be qualified as to the enforceability of the various legal instruments by bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights, by the application of equitable principles and by the exercise of judicial discretion in appropriate cases.
Although bankruptcy proceedings would not cause the Special Taxes to become extinguished, bankruptcy of a property owner or any other person claiming an interest in the property could result in a delay in superior court foreclosure proceedings and could result in the possibility of Special Tax installments not being paid in part or in full. Such a delay would increase the likelihood of a delay or default in payment of the principal of and interest on the 2025A Bonds.
In addition, the amount of any lien on property securing the payment of delinquent Special Taxes could be reduced if the value of the property were determined by the bankruptcy court to have become less than the amount of the lien, and the amount of the de linquent Special Taxes in excess of the reduced lien could then be treated as an unsecured claim by the court. Any such stay of the enforcement of the lien for the Special Tax, or any such delay or non-payment, would increase the likelihood of a delay or default in payment of the principal of and interest on the 2025A Bonds and the possibility of delinquent Special Taxes not being paid in full.
The chances are increased that the 2019 Reserve Fund established for the 2025A Bonds could be fully depleted during any such delay in obtaining payment of delinquent Special Taxes.
As a result, sufficient moneys would not be available in the 2019 Reserve Fund to make up shortfalls resulting from delinquent payments of the Special Tax and thereby to pay principal of and interest on the 2025A Bonds on a timely basis.
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Cyber Security
The City, like many other public and private entities, relies on computer and other digital networks and systems to conduct its operations. As a recipient and provider of personal, private or other sensitive electronic information, the City is potentially subject to multiple cyber threats, including without limitation hacking, viruses, ransomware, malware and other attacks. No assurance can be given that the City’s efforts to manage cyber threats and attacks will be successful in all cases, or that any such attack will not materially impact the operations or finances of the City or the District, or the administration of the 2025A Bonds. The City is also reliant on other entities and service providers in connection with the administration of the 2025A Bonds, including without limitation the County tax collector for the levy and collection of Special Taxes, the Fiscal Agent, and the Dissemination Agent. No assurance can be given that the City, the District and these other entities will not be affected by cyber threats and attacks in a manner that may affect the Bond owners.
Disclosure to Future Purchasers
The City has recorded a notice of the Special Tax lien in the Office of the County Recorder.
While title companies normally refer to such notices in tit le reports, there can be no guarantee that such reference will be made or, if made, that a prospective purchaser or lender will consider such special tax obligation in the purchase of a parcel of land or a home in Improvement Area B or the lending of money secured by property in Improvement Area B. The Act and the Goals and Policies require the subdivider of a subdivision (or its agent or representative) to notify a prospective purchaser or long-term lessor of any lot, parcel, or unit subject to a Mello-Roos special tax of the existence and maximum amount of such special tax using a statutorily prescribed form.
California Civil Code Section 1102.6b requires that in the case of transfers other than those covered by the above requirement, the seller must at least make a good faith effort to notify the prospective purchaser of the special tax lien in a format prescribed by statute. Failure by an owner of the property to comply with these requirements, or failure by a purchaser or lessor to consider or understand the nature and existence of the Special Tax, could adversely affect the willingness and ability of the purchaser or lessor to pay the Special Tax when due.
Public Health Emergencies
In recent years, public health authorities have warned of threats po sed by outbreaks of disease and other public health threats. Pandemic diseases arising in the future could have significant adverse health and financial impacts throughout the world, leading to loss of jobs and personal financial hardships, and/or actions by federal, State and local governmental authorities to contain or mitigate the effects of an outbreak.
Taxpayer assistance measures may include deferral of due dates of property taxes, which was an assistance program during the COVID-19 pandemic, and with or without a deferral some taxpayers affected by a public health emergency may be unable to make their property and Facilities Special Tax payments. No assurance can be given that the property tax payment dates will not be deferred in the future, which m ay cause a delay in the receipt of Facilities Special Taxes. In addition, home values may be affected by a reduction in demand stemming from personal finances, or general widespread economic circumstances resulting from pandemic diseases.
No Acceleration Provisions
The 2025A Bonds do not contain a provision allowing for their acceleration in the event of a payment default or other default under the terms of the 2025A Bonds or the Fiscal Agent
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Agreement. Under the Fiscal Agent Agreement, a Bondholder is given the right for the equal benefit and protection of all Bond owners similarly situated to pursue certain remedies. See “APPENDIX C – SUMMARY OF CERTAIN PROVISIONS OF THE FISCAL AGENT AGREEMENT.” So long as the 2025A Bond s are in book -entry form, DTC will be the sole Bondholder and will be entitled to exercise all rights and remedies of Bond holders.
Loss of Tax Exemption
As discussed under the caption “LEGAL MATTERS – Tax Exemption,” interest on the 2025A Bonds might become includable in gross income for purposes of federal income taxation retroactive to the date the 2025A Bonds were issued as a result of future acts or omissions of the City in violation of its covenants in the Fiscal Agent Agreement. The Fiscal Agent Agreement does not contain a special redemption feature triggered by the occurrence of an event of taxability.
As a result, if interest on the 2025A Bond s were to become inclu dable in gross income for purposes of federal income taxation, the 2025A Bonds would continue to remain outstanding until maturity unless earlier redeemed pursuant to optional or mandatory redemption or redemption upon prepayment of the Special Taxes. See “THE 2025A BONDS – Redemption.”
IRS Audit of Tax-Exempt Bond Issues
The Internal Revenue Service (the “ IRS”) has initiated an expanded program for the auditing of tax-exempt bond issues, including both random and targeted audits. It is possible that the 2025A Bonds will be selected for audit by the IRS. It is also possible that the market value of such 2025A Bonds might be affected as a result of such an audit of such 2025A Bonds (or by an audit of similar bonds or securities).
Impact of Legislative P roposals, Clarifications of the Code and Court Decisions on Tax Exemption
Future legislative proposals, if enacted into law, clarification of the Tax Code or court decisions may cause interest on the 2025A Bonds to be subject, directly or indirectly, to federal income taxation or to be subject to or exempted from state income taxation, or otherwise prevent Bondowners from realizing the full current benefit of the tax status of such interest.
Voter Initiatives
Under the California Constitution, the power of initiative is reserved to the voters for the purpose of enacting statutes and constitutional amendments. Since 1978, the voters have exercised this power through the adoption of Proposition 13 and similar measures, including Proposition 218, which was approved in the general election held on November 5, 1996, and Proposition 26, which was approved on November 2, 2010.
Any such initiative may affect the collection of fees, taxes and other types of revenue by local agencies such as the City. Subject to overriding federal constitutional principles, such collection may be materially and adversely affected by voter-approved initiatives, possibly to the extent of creating cash -flow problems in the payment of outstanding obligations such as the 2025A Bonds.
Proposition 218 —Voter Approval for Local Government Taxes —Limitation on Fees, Assessments, and Charges—Initiative Constitutional Amendment, added Articles XIIIC and XIIID to the California Constitution, imposing certain vote requirements and other limitat ions on the imposition of new or increased taxes, assessments and property-related fees and charges.
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On November 2, 2010, California voters approved Proposition 26, entitled the “Supermajority Vote to Pass New Taxes and Fees Act”. Section 1 of Proposition 26 declares that Proposition 26 is intended to limit the ability of the State Legislature and local government to circumvent existing restrictions on increasing taxes by defining the new or expanded taxes as “fees.” Proposition 26 amended Articles XIIIA and XIIIC of the State Constitution. The amendments to Article XIIIA limit the ability of the State Legislature to impose higher taxes (as defined in Proposition 26) without a two-thirds vote of the Legislature. Article XIIIC requires that all new local taxes be submitted to the electorate before they become effective. Taxes for general governmental purposes require a majority vote and taxes for specific purposes (“special taxes”) require a two-thirds vote.
The Special Taxes and the 2025A Bonds were each authorized by not less than a two - thirds vote of the landowners within Improvement Area B of the District who constituted the qualified electors at the time of such voted authorization. The City believes, therefore, that issuance of the 2025A Bonds does not require the conduct of further proceedings under the Act, Proposition 218 or Proposition 26.
Like their antecedents, Proposition 218 and Proposition 26 are likely to undergo both judicial and legislative scrutiny before the impact on the City and its obligations can be determined.
Certain provisions of Proposition 218 and Proposition 26 may be examined by the courts for their constitutionality under both State and federal constitutional law, the outcome of which cannot be predicted.
For example, in August 2014, in City of San Diego. v. Melvin Shapiro, an Appellate Court invalidated an election held by the City of San Diego to authorize the levying of special taxes on hotels city-wide pursuant to a city charter ordinance creating a convention center facilities district which specifically defined the electorate to consist solely of (1) the owners of real property in the city on which a hotel is located, and (2) the lessees of real property owned by a governmental entity on which a hotel is located. The court held that such landowners and lessees are neither “qualified electors” of the city for purposes of Articles XIII A, Section 4 of the California Constitution, nor a proper “electorate” under Article XIIIC, Section 2(d) of the California Constitution. The court specifically noted that the decision did not require the Court to consider the distinct question of whether landowner voting to impose special taxes under Section 53326(b) of the Act (which was the nature of the voter approval through which the District and Improvement Area B were formed) violates the California Constitution in districts that lack sufficient registered voters to conduct an election among registered voters. Accordingly, this case should have no effect on the levy of the Special Taxes by the City.
The City cannot predict the ultimate outcome or effect of any such judicial scrutiny, legislative actions, or future initiatives. These initiatives, and any future initiatives, may affect the collection of fees, taxes and other types of revenue by local agencies such as the City. Subject to overriding federal constitutional principles, such collection may be materially and adversely affected by voter-approved initiatives, possibly to the extent of creating cash-flow problems in the payment of outstanding obligations such as the 2025A Bonds.
Secondary Market for Bonds
There can be no guarantee that there will be a secondary market for the 2025A Bonds or, if a secondary market exists, that any 2025A Bonds can be sold for any particular price. Prices of bond issues for which a market is being made will depend upon then-prevailing circumstances.
Such prices could be substantially different from the original purchase price.
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No assurance can be given that the market price for the 2025A Bonds will not be affected by the introduction or enactment of any future legislation (including without limitation amendments to the Tax Code), or changes in interpretation of the Tax Code, or any action of the IRS, including but not limited to the publication of proposed or final regulat ions, the issuance of rulings, the selection of the 2025A Bonds for audit examination, or the course or result of any IRS audit or examination of the 2025A Bond s or obligations that present similar tax issues as the 2025A Bonds.
LEGAL MATTERS
Legal Opinions
The legal opinion of Jones Hall, A Professional Law Corporation, San Francisco, California, Bond Counsel, approving the validity of the 2025A Bonds will be made available to purchasers at the time of original delivery and is attached in substantially final form as Appendix F.
Jones Hall, A Professional Law Corporation, San Francisco, California, has also served as Disclosure Counsel to the City. Richards, Watson and Gershon, San Francisco, California , will pass upon certain legal matters for the City. Stradling Yocca Carlson & Rauth, LLP, Newport Beach, California, is serving as counsel to the Underwriter.
Tax Exemption
Federal Tax Status. In the opinion of Jones Hall, A Professional Law Corporation, San Francisco, California, Bond Counsel, subject, however to the qualifications set forth below, under existing law, the interest on the 2025A Bonds is excluded from gross income for federal income tax purposes, and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals; however, such interest on the 2025A Bonds may be taken into account for the purpose of computing the alternative minimum tax imposed on certain corporations.
The opinions set forth in the preceding paragraph are subject to the condition that the City comply with all requirements of the Internal Revenue Code of 1986, as amended (the “Tax Code”) that must be satisfied subsequent to the issuance of the 2025A Bonds in order that the interest thereon be, and continue to be, exclud able from gross income for federal income tax purposes.
The City has made certain representations and covenants in order to comply with each such requirement. Inaccuracy of those representations, or failure to comply with certain of those covenants, may cause the inclusion of such interest in gross income for federal income tax purposes, which may be retroactive to the date of issuance of the 2025A Bonds.
Tax Treatment of Original Issue Discount and Premium. If the initial offering price to the public at which a 2025A Bond is sold is less than the amount payable at maturity thereof, then such difference constitutes "original issue discount" for purposes of federal income taxes and State of California personal income taxes. If the initial offering price to the public at which a 2025A Bond is sold is greater than the amount payable at maturity thereof, then such difference constitutes "bond premium" for purposes of federal income taxes and State of California personal income taxes.
Under the Tax Code, original issue discount is treated as interest excluded from federal gross income and exempt from State of California personal income taxes to the extent properly allocable to each owner thereof subject to the limitations described in the first paragraph o f this section. The original issue discount accrues over the term to maturity of the 2025A Bond on the basis of a constant interest rate compounded on each interest or principal payment date (with
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straight-line interpolations between compounding dates). The amount of original issue discount accruing during each period is added to the adjusted basis of such 2025A Bonds to determine taxable gain upon disposition (including sale, redemption, or payment on maturity) of such 2025A Bond. The Tax Code contains certain provisions relating to the accrual of original issue discount in the case of purchasers of the 2025A Bonds who purchase the 2025A Bonds after the initial offering of a substantial amount of such maturity. Owners of such 2025A Bonds should consult their own tax advisors with respect to the tax consequences of ownership of 2025A Bonds with original issue discount, including the treatment of purchasers who do not purchase in the original offering to the public at the first price at which a substantial amount of such 2025A Bonds is sold to the public.
Under the Tax Code, bond premium is amortized on an annual basis over the term of the 2025A Bond (said term being the shorter of the 2025A Bond's maturity date or its call date). The amount of bond prem ium amortized each year reduces the adjusted basis of the owner of the 2025A Bond for purposes of determining taxable gain or loss upon disposition. The amount of bond premium on a 2025A Bond is amortized each year over the term to maturity of the 2025A Bond on the basis of a constant interest rate compounded on each interest or principal payment date (with straight-line interpolations between compounding dates). Amortized bond premium is not deductible for federal income tax purposes. Owners of premium 2025A Bonds, including purchasers who do not purchase in the original offering, should consult their own tax advisors with respect to State of California personal income tax and federal income tax consequences of owning such 2025A Bonds.
California Tax St atus. In the further opinion of Bond Counsel, interest on the 2025A Bonds is exempt from California personal income taxes.
Other Tax Considerations. Current and future legislative proposals, if enacted into law, clarification of the Tax Code or court de cisions may cause interest on the 2025A Bonds to be subject, directly or indirectly, to federal income taxation or to be subject to or exempted from state income taxation, or otherwise prevent beneficial owners from realizing the full current benefit of the tax status of such interest. The introduction or enactment of any such legislative proposals, clarification of the Tax Code or court decisions may also affect the market price for, or marketability of, the 2025A Bonds. It cannot be predicted whether or in what form any such proposal might be enacted or whether, if enacted, such legislation would apply to bonds issued prior to enactment.
The opinions expressed by Bond Counsel are based upon existing legislation and regulations as interpreted by releva nt judicial and regulatory authorities as of the date of such opinion, and Bond Counsel has expressed no opinion with respect to any proposed legislation or as to the tax treatment of interest on the 2025A Bonds, or as to the consequences of owning or receiving interest on the 2025A Bonds, as of any future date. Prospective purchasers of the 2025A Bonds should consult their own tax advisors regarding any pending or proposed federal or state tax legislation, regulations or litigation, as to which Bond Counsel expresses no opinion.
Owners of the 2025A Bonds should also be aware that the ownership or disposition of, or the accrual or receipt of interest on, the 2025A Bonds may have federal or state tax consequences other than as described above. Other than as expressly described above, Bond Counsel expresses no opinion regarding other federal or state tax consequences arising with respect to the 2025A Bonds, the ownership, sale or disposition of the 2025A Bonds, or the amount, accrual or receipt of interest on the 2025A Bonds.
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No Litigation
At the time of delivery of the 2025A Bonds, the City will certify that there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, public board or body, pending with respect to which the City has been served with process or threatened, which:
• in any way questions the powers of the City Council or the City or the District, or
• in any way questions the validity of any proceeding taken by the City Council in connection with the issuance of the 2025A Bonds, or
• wherein an unfavorable decision, ruling or finding could materially adversely affect the transactions contemplated by the purchase contract with respect to the 2025A Bonds, or
• which, in any wa y, could adversely affect the validity or enforceability of the resolutions of the City Council adopted in connection with the formation of the District and Improvement Area B or the issuance of the 2025A Bond s, the Fiscal Agent Agreement, the Continuing Disclosure Certificate or the purchase contract with respect to the 2025A Bonds, or
• to the knowledge of the City, in any way questions the exclusion from gross income of the recipients thereof of the interest on the 2025A Bonds for federal income tax purposes, or
• in any other way questions the status of the 2025A Bonds under State tax laws or regulations.
CONTINUING DISCLOSURE
The City. The City will covenant for the benefit of owners of the 2025A Bonds to provide certain financial information and operating data relating to Improvement Area B of the District and the 2025A Bonds by not later than nine months after the end of the City's fiscal year (currently March 31 based on the District’s fiscal year end of June 30) (the “Annual Report”) and to provide notices of the occurrence of certain listed events.
These covenants have been made in order to assist the Underwriter in complying with Securities Exchange Commission Rule 15c2 -12(b)(5) (the “ Rule”). The specific nature of the information to be contained in the Annual Report or the notices of listed events is set forth in “APPENDIX E – FORM OF CITY CONTINUING DISCLOSURE CERTIFICATE.”
The City previously entered into numerous disclosure undertakings under the Rule in connection with the issuance of long -term obligations. The City has not failed to comply in all material aspects with any previous undertakings with regard to the Rule in the past five years.
Any failure by the City to comply with the provisions of its undertaking will not constitute a default under the Fiscal Agent Agreement (although owners of the 2025A Bonds will have any remedy available at law or in equity as provided in the undertaking). Nevertheless, a failure to comply must be r eported in accordance with the Rule. Such a failure may adversely affect the transferability and liquidity of the 2025A Bonds.
To ensure compliance with its continuing disclosure undertakings under the Rule in the future, the City has appointed the City’s Finance Director to coordinate the preparation and filing of annual disclosure reports in accordance with the City’s disclosure undertakings and has adopted policies and procedures related thereto. The City has also engaged Willdan Financial
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Services to serve as its dissemination agent and assist the City in complying with its continuing disclosure undertakings.
[RATINGS]
[S&P Global Ratings is expected to assign its municipal bond rating of “__” to the 2025A Bonds with the understanding that the Bond Insurer will issue the Policy concurrently with the delivery of the 2025A Bonds. S&P Global Ratings has assigned an underlying rating of “__” to the 2025A Bonds.
Such ratings reflect only the views of such rating agency, and an explanation of the significance of such ratings, and any outlook associated with such ratings, may be obtained by contacting the rating agency at: S&P Global Ratings, 55 Water Street, New York, New York 10041. Such ratings are not a recommendation to buy, sell or hold the 2025A Bonds. There is no assurance that such ratings will continue for any given period of time or that such ratings will not be rev ised downward or withdrawn entirely by such organizations, if in the rating agency’s judgment circumstances so warrant. Any such downward revision or withdrawal of such ratings may have an adverse effect on the market price of the 2025A Bonds.]
UNDERWRITING
The 2025A Bonds are being purchased by Stifel, Nicolaus & Company, Incorporated (the “Underwriter”), at a purchase price of $_________ (which represents the aggregate principal amount of the 2025A Bonds ($_________), less a net original issue discount of $_________, less an Underwriter's discount of $_________).
The purchase agreement relating to the 2025A Bonds provides that the Underwriter will purchase all of the 2025A Bonds, if any are purchased, the obligation to make such purchase being subject to certain terms and conditions set forth in such purchase agreement.
The Underwriter may offer and sell the 2025A Bonds to certain dealers and others at prices lower than the offering prices stated on the inside cover page hereof. The offering prices may be changed from time to time by the Underwriter.
PROFESSIONAL FEES
In connection with the issuance of the 2025A Bonds, fees or compensation payable to certain professionals are contingent upon the issuance and delivery of the 2025A Bonds. Those professionals include:
the Underwriter;
Stradling Yocca Carlson & Rauth, LLP, as Underwriter’s Counsel; PFM Financial Advisors LLC, as municipal advisor;
Goodwin Consulting Group, Inc., as special tax consultant; The Bank of New York Mellon Trust Company, N.A., as Fiscal Agent.
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EXECUTION
The execution and delivery of the Official Statement by the City have been duly authorized by the City Council, acting as the legislative body of the District.
CITY OF FAIRFIELD
By:
Finance Director
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APPENDIX A
GENERAL INFORMATION ABOUT THE CITY OF FAIRFIELD AND SOLANO COUNTY
The following information concerning the City of Fairfield (the " City") and Solano County (the “ County”) are included only for the purpose of supplying general info rmation regarding the community. The 2025A Bonds are not a debt of the City, the County, the State of California (the “ State”) or any of its political subdivisions, and neither the City, the County, the State nor any of its political subdivisions is liable therefor.
General
The City, which comprises approximately 37 square miles, is located in the County approximately 44 miles northeast of San Francisco and 42 miles west of Sacramento. The City is served by Interstate 80, the major freeway link between San Francisco and Sacramento, as well as Highway 12, a connecting freeway from Interstate 80 to Napa Valley.
Historically, the City's economy has been based upon agriculture and related industries; the City has served as a commerce center for agriculture in its region for over 100 years. In recent years, the City has transformed its economic base as a result of significant residential, industrial and commercial building activity occurring over the past several years. The City has been proactive in providing commercial/industrial development opportunities, and has formed several assessment distr icts to finance public improvements required by new projects. This rapid expansion in manufacturing, logistics, warehousing and distribution has led to substantial growth in population and employment.
Another major contributor to the City’s economy is Tra vis Air Force Base, the largest employer of both the City and the County. As of September 30, 2019 (the date of Travis Air Force Base’s latest economic impact report), the partnership between Travis Air Force Base and the County generated 12,864 indirect jobs, totaling an estimated annual dollar value of $326,626,768.
Travis Air Force Base also awarded more than $211 million worth of contracts to local businesses for work on construction, operations and maintenance of base infrastructure projects.
Municipal Government
The City was incorporated in 1892 and operates under a council/manager form of government. All municipal departments operate under the supervision of the City Manager. The City Council consists of a Mayor elected at large for a four -year term and four other Council members elected at large for overlapping four-year terms.
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Population
The Fairfield area experienced significant growth over the 1980's. The population of the City was 58,099 as of the 1980 census. By January 1, 1990 the population of the City was estimated to be 77,211, a percentage increase of approximately 33% over this ten -year period.
Further growth occurred during the 1990's, when the population grew another 25% over this ten- year period. From 2000 to 2010, the population continued to expand, increasing by approximately
9.5% over that period.
Population estimates for calendar years 1980, 1990, 2000, 2010, and the past five years in the City, the County, and the State are shown in the following table.
CITY OF FAIRFIELD, COUNTY OF SOLANO AND STATE OF CALIFORNIA Population Estimates
Calendar Years 1980, 1990, 2000, 2010, and 2020 through 2024
Year City of Fairfield Solano County State of California 1980 58,099 235,203 23,668,562
1990 77,211 339,471 29,758,213
2000 96,178 394,930 33,873,086
2010 105,321 413,344 37,253,956
2020 120,447 453,491 39,538,223
2021 119,990 450,122 39,327,868
2022 119,395 447,027 39,114,785
2023 120,036 445,506 39,061,058
2024 120,339 446,426 39,128,162
Source: State Department of Finance estimates.
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Employment and Industry
The unemployment rate in the Solano County was 5.1% in December 2024, down from a revised 5.3% in November 2024, and above the year-ago estimate of 5.0%. This compares with an unadjusted unemployment rate of 5.2% for California and 3.8% for the nation during the same period.
The table below shows the Vallejo -Fairfield Metropolitan Statistical Area’s labor patterns during 2019 through 2023.
VALLEJO-FAIRFIELD METROPOLITAN STATISTICAL AREA
(SOLANO COUNTY)
Civilian Labor Force, Employment and Unemployment
(Annual Averages)
(March 2023 Benchmark)
2019 2020 2021 2022 2023
Civilian Labor Force (1) 208,100 201,800 200,200 200,900 203,100 Employment 200,200 182,100 185,400 192,300 193,600
Unemployment 7,900 19,700 14,900 8,600 9,400
Unemployment Rate 3.8% 9.7% 7.4% 4.3% 4.7%
Wage and Salary Employment: (2)
Agriculture 1,500 1,500 1,600 1,600 1,400
Mining and Logging 500 400 300 300 300
Construction 12,300 11,100 11,600 12,100 11,600
Manufacturing 11,100 10,900 10,900 11,200 11,100
Wholesale Trade 4,400 4,100 4,000 4,100 4,200
Retail Trade 17,800 16,700 17,500 17,600 17,500
Trans., Warehousing, Utilities 4,800 4,900 5,200 5,500 5,600 Information 1,200 800 800 900 900
Finance and Insurance 3,400 3,400 3,200 3,000 2,900
Professional and Business Services 10,200 9,700 10,400 10,900 11,000 Educational and Health Services 29,000 27,900 27,600 28,500 29,800 Leisure and Hospitality 16,100 12,300 13,600 15,500 16,000 Other Services 4,700 4,000 4,200 4,700 5,000
Federal Government 3,600 3,600 3,600 3,400 3,300
State Government 5,400 5,400 5,200 5,200 5,000
Local Government 15,800 14,400 14,100 14,800 15,500
Total all Industries (3) 143,400 132,800 135,400 141,100 143,000
(1) Labor force data is by place of residence; includes self-employed individuals, unpaid family workers, household domestic workers, and workers on strike.
(2) Industry employment is by place of work; excludes self-employed individuals, unpaid family workers, household domestic workers, and workers on strike.
(3) Totals may not add due to rounding.
Source: State of California Employment Development Department.
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Largest Employers
Employment in the City area traditionally is centered around food processing, financial and service employees and the public sector. The following table lists some of the largest employers located within the City.
CITY OF FAIRFIELD
Largest Employers
June 30, 2024
Employer Name Type Jobs
Travis Air Force Base Military Base 13,414
County of Solano Government 2,633
Fairfield-Suisun Unified School District Education 2,213 Northbay Medical Center Hospital 1,969
Solano Community College Education 750
Partnership Health Plan Healthcare Group 561
City of Fairfield Government 553
Jelly Belly Candy Co. Candy & Confections 489
Sutter Regional Medical Foundation Insurance 475
Westamerica Bancorporation Banking 418
Source: City of Fairfield Annual Comprehensive Financial Report for fiscal year ended June 30, 2024.
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Major Employers
The table below lists the major employers in the County as of February 2025, listed alphabetically.
Solano County
Major Employers
(Listed Alphabetically)
February 2025
Employer Name Location Industry
California Medical Facility Vacaville Hospitals
Collins Aerospace Fairfield Aircraft Components-Manufacturers Duravent Inc Vacaville Ventilating Equipment (whls)
Fairfield Medical Offices Fairfield Physicians & Surgeons Flatiron Construction Corp Benicia General Contractors
Guittard Chocolate Co Fairfield Chocolate & Cocoa-Manufacturers Jelly Belly Candy Co Fairfield Candy & Confectionery-Manufacturers Kaiser Permanente Vallejo Med Vallejo Hospitals
Macy's Fairfield Department Stores
Northbay Healthcare Green Vly Fairfield Health Services Northbay Medical Ctr Fairfield Hospitals
Northbay Vacavalley Hospital Vacaville Hospitals
Quick Lane Fairfield Tire-Dealers-Retail
River Delta Unified Sch Dist Rio Vista Schools
Six Flags Discovery Kingdom Vallejo Amusement & Theme Parks Solano County Fairfield General Government Support
Solano County Sheriff Fairfield Civil Enforcement
Solano County Special Edu Fairfield Schools
Sutter Solano Medical Ctr Vallejo Hospitals
Touro University California Vallejo University-College Dept/Facility/Office Travis Air Force Base Travis AFB Military Bases
USDA Forest Svc Vallejo Government Offices-Federal
Valero Benicia Refinery Benicia Crude Oil-Petroleum Refineries Vallejo City Manager's Office Vallejo City Government-Executive Offices Walmart Supercenter Dixon Department Stores
Source: State of California Employment Development Department, extracted from The America's Labor Market Information System (ALMIS) Employer Database, 2025 1st Edition.
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Effective Buying Income
"Effective Buying Income" is defined as personal income less personal tax and nontax payments, a number often referred to as "disposable" or "after-tax" income. Personal income is the aggregate of wages and salaries, other labor-related income (such as employer contributions to private pension funds), proprietor's income, rental income (which includes imputed rental income of owner -occupants of non -farm dwellings), dividends paid by corporations, interest income from all sources, and transfer payments (such as pensio ns and welfare assistance).
Deducted from this total are personal taxes (federal, state and local), nontax payments (fines, fees, penalties, etc.) and personal contributions to social insurance. According to U.S. government definitions, the resultant figure is commonly known as "disposable personal income."
The following table summarizes the total effective buying income for the City, the County, the State and the United States for the calendar years 2021 through 2025.
EFFECTIVE BUYING INCOME
For Calendar Years 2021 Through 2025
Year and Area
Total Effective
Buying Income
(000s omitted)
Median Household
Effective
Buying Income
2021 City of Fairfield $3,956,297 $78,067
County of Solano 14,937,066 74,976
California 1,290,894,604 67,956
United States 9,809,944,764 56,790
2022 City of Fairfield $4,177,793 $83,809
County of Solano 16,095,586 81,515
California 1,452,426,153 77,058
United States 11,208,582,541 64,448
2023 City of Fairfield $4,041,044 $81,551
County of Solano 16,044,120 81,403
California 1,461,799,662 77,175
United States 11,454,846,397 65,326
2024 City of Fairfield $4,182,467 $85,615
County of Solano 16,238,988 83,539
California 1,510,708,521 80,973
United States 11,987,185,826 67,876
2025 City of Fairfield $4,245,900 $84,469
County of Solano 16,525,335 83,205
California 1,557,429,767 82,725
United States 12,525,577,707 69,687
_______________________
Source: Claritas, LLC.
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Commercial Activity
A summary of historic taxable sales within the City and the County during the past five years in which data is available is shown in the following table.
Total taxable transactions in the City during the first three quarters of calendar year 2024 were reported to be $1,872,497,110, a 1.40% decrease from the total taxable transactions of $1,899,079,808 reported during the first three quarters of calendar year 2023.
CITY OF FAIRFIELD
Taxable Retail Sales
Number of Permits and Valuation of Taxable Transactions ($000s)
Retail Stores Total All Outlets
Number
of Permits
Taxable
Transactions
Number
of Permits
Taxable
Transactions
2019 1,631 $1,327,134 2,610 $2,058,847
2020 1,786 1,263,571 2,876 1,909,404
2021 1,680 1,569,006 2,711 2,320,891
2022 1,724 1,657,114 2,792 2,576,538
2023 1,626 1,649,372 2,662 2,520,549
Source: State Department of Tax and Fee Administration.
Total taxable transactions in the County during the first three quarters of calendar year 2024 were reported to be $7,472,699,049, a 2.23% decrease from the total taxable transactions of $7,643,361,407 reported during the first three quarters of calendar year 2023.
SOLANO COUNTY
Taxable Retail Sales
Number of Permits and Valuation of Taxable Transactions ($000s)
Retail Stores Total All Outlets
Number
of Permits
Taxable
Transactions
Number
of Permits
Taxable
Transactions
2019 6,490 $5,278,624 10,539 $8,251,272
2020 6,996 5,511,263 11,553 8,259,715
2021 6,598 6,414,957 11,000 9,733,516
2022 6,709 6,680,984 11,253 10,432,958
2023 6,430 6,580,055 10,898 10,322,605
Source: State Department of Tax and Fee Administration.
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Building Activity
The tables below summarize building activity in the City and the County for the past five available years.
CITY OF FAIRFIELD
Total Building Permit Valuations
(Valuations in Thousands)*
2019 2020 2021 2022 2023
Permit Valuation
New Single-family $111,515.6 $125,040.2 $99,108.8 $82,323.7 $69,791.3 New Multi-family 35,889.3 67,956.5 6,733.8 200.0 3,500.0 Res. Alterations/Additions 14,254.4 7,671.8 15,695.0 14,049.4 3,530.0 Total Residential 161,659.3 200,668.5 99,108.8 82,323.7 69,791.3
New Commercial 18,027.1 15,751.2 16,228.9 15,043.9 4,500.0 New Industrial 5,854.5 27,440.0 28,476.7 37,247.7 0.0
New Other 2,394.6 610.6 726.5 1,693.8 4,077.6
Com. Alterations/Additions 31,272.5 12,849.4 10,700.2 25,767.3 17,745.9 Total Nonresidential 57,548.7 56,651.2 56,132.3 79,752.7 26,323.5
New Dwelling Units
Single Family 450 411 311 272 266
Multiple Family 56 471 7 15 42
TOTAL 456 882 318 287 308
*Subtotals may not foot due to rounding.
Source: Construction Industry Research Board, Building Permit Summary.
COUNTY OF SOLANO
Total Building Permit Valuations
(Valuations in Thousands)*
2019 2020 2021 2022 2023
Permit Valuation
New Single-family $295,149.8 $268,545.4 $278,390.1 $236,769.7 $170,010.9 New Multi-family 35,889.3 98,968.6 79,671.6 132,532.4 19,997.5 Res. Alterations/Additions 69,033.4 36,717.8 43,676.2 44,527.5 33,662.2 Total Residential 400,072.5 404,231.8 401,737.9 413,829.6 233,670.6
New Commercial 99,650.4 52,595.3 56,714.4 55,844.8 20,040.0 New Industrial 7,350.2 29,922.0 35,643.2 38,282.4 0.0
New Other 20,518.4 18,403.6 26,915.0 37,414.5 32,133.3
Com. Alterations/Additions 79,382.4 71,558.4 32,691.6 58,833.6 44,167.2 Total Nonresidential 206,901.4 172,479.3 151,964.2 190,375.3 96,340.5
New Dwelling Units
Single Family 1,147 981 909 872 646
Multiple Family 56 716 347 603 144
TOTAL 1,203 1,697 1,256 1,475 790
*Subtotals may not foot due to rounding.
Source: Construction Industry Research Board, Building Permit Summary.
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APPENDIX B
RATE AND METHOD OF APPORTIONMENT FOR
IMPROVEMENT AREA B OF THE CITY OF FAIRFIELD
COMMUNITY FACILITIES DISTRICT NO. 2016-1
(VILLAGES AT FAIRFIELD)
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APPENDIX C
SUMMARY OF CERTAIN PROVISIONS OF THE FISCAL AGENT AGREEMENT
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APPENDIX D
DTC AND THE BOOK-ENTRY ONLY SYSTEM
The following description of the Depository Trust Company (“DTC”), the procedures and record keeping with respect to beneficial ownership interests in the 2025A Bonds, payment of principal, interest and other payments on the 2025A Bonds (herein, the “Securities”) to DTC Participants or Beneficial Owners, confirmation and transfer of beneficial ownership interest in the Securities and other related transactions by and between DTC, the DTC Participants and the Beneficial Owners is based s olely on information provided by DTC. Accordingly, no representations can be made concerning these matters and neither the DTC Participants nor the Beneficial Owners should rely on the foregoing information with respect to such matters, but should instead confirm the same with DTC or the DTC Participants, as the case may be.
Neither the issuer of the Securities (the “Issuer”) nor the trustee, fiscal agent or paying agent appointed with respect to the Securities (the “Agent”) takes any responsibility for the information contained in this Appendix.
No assurances can be given that DTC, DTC Participants or Indirect Participants will distribute to the Beneficial Owners (a) payments of interest, principal or premium, if any, with respect to the Securities, (b) certificates representing ownership interest in or other confirmation or ownership interest in the Securities, or (c) redemption or other notices sent to DTC or Cede & Co., its nominee, as the registered owner of the Securities, or that they will so do on a timely basis, or that DTC, DTC Participants or DTC Indirect Participants will act in the manner described in this Appendix. The current "Rules" applicable to DTC are on file with the Securities and Exchange Commission and the current "Procedures" of DTC to be followed in dealing with DTC Participants are on file with DTC.
1. The Depository Trust Company (“DTC”), New York, NY, will act as securities depository for the securities (the “Securities”). The Securities will be issued as fully -registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully -registered Security certificate will be issued for each issue of the Securities, each in the aggregate principal amount of such issue, and will be deposited with DTC.
If, however, the aggregate principal amount of any issue exceeds $500 million, one certificate will be issued with respect to each $500 million of principal amount, and an additional certificate will be issued with respect to any remaining principal amount of such issue.
2. DTC, the world’s largest securities depository, is a limited -purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non -U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC’s participants (“Direct Partic ipants”) deposit with DTC.
DTC also facilitates the post -trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book -entry transfers and pledges between Direct Partici pants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non -U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly -owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the
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DTC system is also available to others such as both U.S. and non -U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). DTC has a Standard & Poor’s rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com. The information contained on this Internet site is not incorporated herein by reference.
3. Purchases of Securities under the DTC system must be made by or through Direct Participants, which will receive a credit for the Securities on DTC’s records. The ownership interest of each actual purchaser of each Security (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase.
Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners wi ll not receive certificates representing their ownership interests in Securities, except in the event that use of the book-entry system for the Securities is discontinued.
4. To facilitate subsequent transfers, all Securities deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Securities with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Securities; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Securities are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.
5. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subj ect to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Securities may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Securities, such as redemptions, tenders, defaults, and proposed amendments to the Security documents. For example, Beneficial Owners of Securities may wish to ascertain that the nominee holding the Securities for their benefit has agreed to obtain and transmit notices t o Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them.
6. Redemption notices shall be sent to DTC. If less than all of the Securities within an issue are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed.
7. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Securities unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to Issuer as soon as possible after the record date.
The Omnibus Proxy assigns Cede & Co.’s con senting or voting rights to those Direct Participants to whose accounts Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy).
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8. Redemption proceeds, distributions, and dividend payments on the Securities will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from Issuer or Agent, on payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC, Agent, or Issuer, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of Issuer or Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.
9. DTC may discontinue providing its services as depository with respect to the Securities at any time by giving reason able notice to Issuer or Agent. Under such circumstances, in the event that a successor depository is not obtained, Security certificates are required to be printed and delivered.
10. Issuer may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, Security certificates will be printed and delivered to DTC.
11. The information in this section concerning DTC and DTC’s book -entry system has been obtained from sources that Is suer believes to be reliable, but Issuer takes no responsibility for the accuracy thereof.
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APPENDIX E
FORM OF CONTINUING DISCLOSURE CERTIFICATE
CONTINUING DISCLOSURE CERTIFICATE
$____________
IMPROVEMENT AREA B OF THE
CITY OF FAIRFIELD
COMMUNITY FACILITIES DISTRICT NO. 2016-1
(VILLAGES AT FAIRFIELD)
SPECIAL TAX BONDS, SERIES 2025A
This Continuing Disclosure Certificate (this “Disclosure Certificate”) is executed and delivered by the City of Fairfield (the “City”) in connection with the issuance of the bonds captioned above (the “ 2025A Bonds”). The 2025A Bonds are being issued pursuant to a Fiscal Agent Agreement dated as of August 1, 2019 (the “Master Fiscal Agent Agreement”), by and between the City and The Bank of New York Mellon, N.A., as fiscal agent (the “Fiscal Agent”) , as supplemented by a First Supplement to Fiscal Agent Agreement, dated as of April 1, 2025 (as supplemented, the “Fiscal Agent Agreement”). The City hereby covenants and agrees as follows:
Section 1. Purpose of the Disclosure Certificate . This Disclosure Certificate is being executed and delivered by the City for the benefit of the holders and beneficial owners of the 2025A Bonds and in order to assist the Participating Underwriter in complyin g with S.E.C. Rule 15c2-12(b)(5).
Section 2. Definitions. In addition to the definitions set forth above and in the Fiscal Agent Agreement, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section, the following capitalized terms shall have the following meanings:
“Annual Report ” means any Annual Report provided by the City pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate.
“Annual Report Date” means the date that is nine months after the end of the City 's fiscal year (currently March 31 based on the District’s fiscal year end of June 30).
“Dissemination Agent” means Willdan Financial Services, or any successor Dissemination Agent designated in writing by the City and which has filed with the City a written acceptance of such designation.
“District” means the City of Fairfield Community Facilities District No. 2016 -1 (Villages at Fairfield).
“Listed Events” means any of the events listed in Section 5(a) of this Disclosure Certificate.
“MSRB” means the Municipal Securities Rulemaking Board, which has been designated by the Securities and Exchange Commission as the sole repository of disclosure information for purposes of the Rule.
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“Official Statement” means the final official statement dated _________, 2025, executed by the City in connection with the issuance of the 2025A Bonds.
“Participating Underwriter” means Stifel, Nicolaus & Company, Incorporated, the original underwriter of the 2025A Bonds required to comply with the Rule in connection with offering of the 2025A Bonds.
“Rule” means Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as it may be amended from time to time.
Section 3. Provision of Annual Reports.
(a) The City shall, or shall cause the Dissemination Agent to, not later than the Annual Report Date, commencing March 31, 2026, with the report for the 2024-25 fiscal year, provide to the MSRB, in an electronic format as prescribed by the MSRB, an Annual Report that is consistent with the requirements of Section 4 of this Disclosure Certificate. Not later than 15 Business Days prior to the Annual Report Date, the City shall provide the Annual Report t o the Dissemination Agent (if other than the City). If by 15 Business Days prior to the Annual Report Date the Dissemination Agent (if other than the City) has not received a copy of the Annual Report, the Dissemination Agent shall contact the City to det ermine if the City is in compliance with the previous sentence. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may include by reference other information as provided in Section 4 of this Disclosure Certificate; provided that the audited financial statements of the City may be submitted separately from the balance of the Annual Report, and later than the Annual Report Date, if not available by that date. If the City's fiscal year changes, it shall give notice of such change in the same manner as for a Listed Event under Section 5(c).
(b) If the City does not provide, or cause the Dissemination Agent to provide, an Annual Report by the Annual Report Date as required in subsection (a) above, the Dissemination Agent shall provide a notice to the MSRB, in a timely manner, in an electronic format as prescribed by the MSRB.
(c) With respect to each Annual Report, the Dissemination Agent shall:
(i) determine each year prior to the Annual Report Date t he then-applicable rules and electronic format prescribed by the MSRB for the filing of annual continuing disclosure reports; and
(ii) if the Dissemination Agent is other than the City, file a report with the City and the Participating Underwriter certif ying that the Annual Report has been provided pursuant to this Disclosure Certificate, and stating the date it was provided.
Section 4. Content of Annual Reports . The City's Annual Report shall contain or incorporate by reference the following documents and information:
(a) The City's audited financial statements for the most recently completed fiscal year, prepared in accordance with Generally Accepted Accounting Principles as promulgated to apply to governmental entities from time to time by the Gover nmental Accounting Standards Board, together with the following statement:
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THE CITY'S ANNUAL FINANCIAL STATEMENT IS PROVIDED SOLELY TO COMPLY WITH THE SECURITIES EXCHANGE COMMISSION STAFF’S
INTERPRETATION OF RULE 15c2-12. NO FUNDS OR ASSETS OF THE CITY OR THE
DISTRICT, OTHER THAN SPECIAL TAX REVENUES FROM IMPROVEMENT AREA B
OF THE DISTRICT, ARE REQUIRED TO BE USED TO PAY DEBT SERVICE ON THE 2025A BOND S, AND NEITHER THE CITY NOR THE DISTRICT IS OBLIGATED TO ADVANCE AVAILABLE FUNDS TO COVER ANY DELINQUENCIES. INVESTORS
SHOULD NOT RELY ON THE FINANCIAL CONDITION OF THE CITY OR THE DISTRICT IN EVALUATING WHETHER TO BUY, HOLD OR SELL THE 2025A BONDS.
(b) To the extent not inclu ded in the audited financial statements, the following information:
(i) Total assessed value (per the Solano County Assessor’s records) of all parcels currently subject to the Special Tax within Improvement Area B of the District, showing the total secured assessed valuation for all property subject to the Special Tax, substantially in the form of Table 2 in the Official Statement.
(ii) The total dollar amount of delinquencies, if any, in Improvement Area B of the District as of August 1 of the prior cale ndar year and, if the total delinquencies within Improvement Area B of the District as of August 1 in the prior calendar year exceed 5% of the Special Tax for the previous fiscal year, delinquency information for each parcel responsible for more than $5,00 0 in the payment of Special Tax, amounts of delinquencies, length of delinquency and status of any foreclosure of each such parcel.
(iii) The amount of prepayments of the Special Tax for the prior Fiscal Year.
(iv) The principal amount of the 2025A Bonds and 2019A Bonds outstanding and the balance in the 2019 Reserve Fund (along with a statement of the 2019 Reserve Requirement) as of the September 30 next preceding the Annual Report Date, including the issuance date and principal amount of any additional bonds or obligations issued under the Fiscal Agent Agreement on a parity with the 2025A Bonds and the 2019A Bonds.
(vi) An u pdated table in substantially the form of Table 3 in the Official Statement based upon the assessed values within Improvement Area B as reflected in the most recent equalized tax roll prior to the September next preceding the Annual Report Date and solely with respect to Improvement Area B.
(vii) Any changes to the Rate and Method of Apportionment of Special Tax for the District set forth in Appendix B to the Official Statement.
(viii) A copy of the most recent annual information required to be filed by the City with the California Debt and Investment Advisory Commission pursuant to the Act and relating generally to outstanding Community Facilities District bond amounts, fund balances, assessed values, special tax delinquencies and foreclosure information.
(c) In addition to any of the information expressly required to be provided under paragraph (b) above, the City shall provide such further information, if any, as may be necessary to make the specifically required statements, in the light of the circums tances under which they are made, not misleading.
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(d) Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues of the City or related public entities, which are available t o the public on the MSRB’s Internet web site or filed with the Securities and Exchange Commission. The City shall clearly identify each such other document so included by reference.
Section 5. Reporting of Listed Events.
(a) The City shall give, or cause to be given, notice of the occurrence of any of the following Listed Events with respect to the Bonds:
(1) Principal and interest payment delinquencies.
(2) Non-payment related defaults, if material.
(3) Unscheduled draws on Debt S ervice reserves reflecting financial difficulties.
(4) Unscheduled draws on credit enhancements reflecting financial difficulties.
(5) Substitution of credit or liquidity providers, or their failure to perform.
(6) Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701 -TEB) or other material notices or determinations with respect to the tax status of the 2025A Bonds, or other material events affecting the tax status of the 2025A Bonds.
(7) Modifications to rights of security holders, if material.
(8) Bond calls, if material, and tender offers.
(9) Defeasances.
(10) Release, substitution, or sale of property securing repayment of the securities, if material.
(11) Rating changes.
(12) Bankruptcy, insolvency, receivership or similar event of the District.
(13) The consummation of a merger, consolidation, or acquisition involving the City, or the sale of all or substantially all of the assets of the City (other than in the ordinary course of business), the entry into a definitive agreement to undertake such an action, or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material.
(14) Appointment of a successor or additional Fiscal Agent or the change of name of the Fiscal Agent, if material.
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(15) Incurrence of a financial obligation of the obligated person, if material, or agreement to covenants, events of default, remedies, priority rights , or other similar terms of a financial obligation of the obligated person, any of which affect security holders, if material.
(16) Default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a financial obligation of the obligated person any of which reflect financial difficulties.
(b) Upon the occurrence of a Listed Event, the City shall, or shall cause the Dissemination Agent (if not the City) to, file a notice of such occurrence with the MSRB, in an electronic format as prescribed by the MSRB, in a timely manner not in excess of 10 business days after the occurrence of the Listed Event. Notwithstanding the foregoing, notice of Listed Events described in subsection (a)(8) above need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to holders of affected Bonds under the Fiscal Agent Agreement.
(c) The City acknowledges that the events described in subparagraphs (a)(2), (a)(7), (a)(8) (if the event is a bond call), (a)(10), (a)(13), (a)(14) and (a)(15) of this Section 5 contain the qualifier “if material” and that subparagraph (a)(6) also contains the qualifier "material" with respect to certain notices, determinations or other events affectin g the tax status of the 2025A Bonds. The City shall cause a notice to be filed as set forth in paragraph (b) above with respect to any such event only to the extent that it determines the event’s occurrence is material for purposes of U.S. federal securities law. Upon occurrence of any of these Listed Events, the City will as soon as possible determine if such event would be material under applicable federal securities law. If such event is determined to be material, the City will cause a notice to be filed as set forth in paragraph (b) above.
(d) For purposes of this Disclosure Certificate, any event described in paragraph (a)(12) above is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent, or similar offic er for the City in a proceeding under the United States Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the City, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement, or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the City.
(e) For purposes of Section 5(a)(15) and (16), “financial obligation” means a (i) debt obligation; (ii) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (iii) guarantee of (i) or (ii). The term financial obligation shall not include municipal securities as to which a final official statement has been provided to the Municipal Securities Rulemaking Board consistent with the Rule.
Section 6. Identifying Information for Filings with the MSRB . All documents provided to the MSRB under the Disclosure Certificate shall be accompanied by identifying information as prescribed by the MSRB.
Section 7. Termination of Reporting Obligation . The City's obligations under this Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment in
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full of all of the 2025A Bonds. If such termination occurs prior to the final maturity of the 2025A Bonds, the City shall give notice of such termination in the same manner as for a Listed Event under Section 5(c).
Section 8. Dissemination Agent. The City may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any Dissemination Agent, with or without appointing a successor Dissemination Agent. The initial Dissemination Agent will be Willdan Financial Services . Any Dissemination Agent may resign by providing 30 day’s prior written notice to the City.
Section 9. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Certificate, the City may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, provided that the following conditions are satisfied:
(a) if the amendment or waiver relates to the provisions of Sections 3(a), 4 or 5(a), it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature, or status of an obligated person with respect to the 2025A Bonds, or type of business conducted;
(b) the undertakings herein, as proposed to be amended or waived, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of th e Rule at the time of the primary offering of the 2025A Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and
(c) the proposed amendment or waiver either (i) is approved by holders of the 2025A Bonds in the manner provided in the Fiscal Agent Agreement for amendments to the Fiscal Agent Agreement with the consent of holders, or (ii) does not, in the opinion of the Fiscal Agent or nationally recognized bond counsel, materially impair the interests of the holders or beneficial owners of the 2025A Bonds.
If the annual financial information or operating data to be provided in the Annual Report is amended pursuant to the provisions hereof, the first annual financial information filed pursuan t hereto containing the amended operating data or financial information shall explain, in narrative form, the reasons for the amendment and the impact of the change in the type of operating data or financial information being provided.
If an amendment is made to the undertaking specifying the accounting principles to be followed in preparing financial statements, the annual financial information for the year in which the change is made shall present a comparison between the financial statements or informa tion prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. The comparison shall include a qualitative discussion of the differences in the accounting principles and the impact of the change in the accounting principles on the presentation of the financial information, in order to provide information to investors to enable them to evaluate the ability of the City to meet its obligations. To the extent reasonably feasible, the comparison shall be quantitative. A notice of the change in the accounting principles shall be filed in the same manner as for a Listed Event under Section 5(c).
Section 10. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the City from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed E vent, in addition to that
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which is required by this Disclosure Certificate. If the City chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Certificate, the City shall have no obligation under this Disclosure Certificate to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event.
Section 11. Default. In the event of a failure of the City to comply with any provision of this Disclosure Certificate, the Participating Underwriter or any holder or beneficial owner of the 2025A Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City to comply with its obligations under this Disclosure Certificate. A default under this Disclosure Certificate shall not be deemed an Event of Default under the Fiscal Agent Agreement, and the sole remedy under this Disclosure Certificate in the event of any failure of the City to comply with this Disclosure Certificate shall be an action to compel performance.
Section 12. Duties, Immunities and Liabilities of Dissemination Agent. The Dissemination Agent shall have only suc h duties as are specifically set forth in this Disclosure Certificate, and the City agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys ’ fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent's neglige nce or willful misconduct. The Dissemination Agent shall have no duty or obligation to review any information provided to it hereunder and shall not be deemed to be acting in any fiduciary capacity for the City, the Property Owner, the Fiscal Agent, the Bond owners or any other party. The obligations of the City under this Section shall survive resignation or removal of the Dissemination Agent and payment of the 2025A Bonds.
Section 13. Beneficiaries. This D isclosure Certificate shall inure solely to the benefit of the City, the Fiscal Agent, the Dissemination Agent, the Participating Underwriter and holders and beneficial owners from time to time of the 2025A Bonds, and shall create no rights in any other person or entity.
Section 14. Counterparts. This Disclosure Certificate may be executed in several counterparts, each of which shall be regarded as an original, and all of which shall constitute one and the same instrument.
Date: ______________, 2025
CITY OF FAIRFIELD
By:
City Manager
AGREED AND ACCEPTED:
WILLDAN FINANCIAL SERVICES,
as Dissemination Agent
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By:
Name:
Title:
Its:
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APPENDIX F
FORM OF OPINION OF BOND COUNSEL
_________, 2025
City Council
City of Fairfield
1000 Webster Street
Fairfield, CA 94533
OPINION: $_______ Improvement Area B of the City of Fairfield Community Facilities District No. 2016-1 (Villages at Fairfield) Special Tax Bonds, Series 2025A
Members of the City Council:
We have acted as bond counsel to the City of Fairfield (the “City”) in connection with the issuance by the City of the special tax bonds captioned above, dated as of the date first written above (the "Bonds").
In such capacity, we have examined such law and such certified proceedings, opinions, certifications and other documents as we have deemed necessary to render this opinion.
The Bonds are issued pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, being sections 53311 et seq. of the California Government Code (the “Act”), resolutions of the City Council adopted on March 18, 2025 (the “Resolution”), and a Fiscal Agent Agreement dated as of August 1, 2019 (the “Master Fiscal Agent Agreement”), between the City and The Bank of New York Mellon Trust Company, N.A., as Fiscal Agent (the “Fiscal Agent”), as supplemented by a First Supplement to Fiscal Agent Agreement, dated as of April 1, 2025 (as supplemented, the “Fiscal Agent Agreement”).
Under the Fiscal Agent Agreement, the City has pledged certain revenues (“Special Tax Revenues”) for the payment of principal, premium (if any) and interest on the Bonds when due.
Regarding questions of fact material to our opinion, we have relied on representations of the City contained in the Fiscal Agent Agreement, and in the certified proceedings and other certifications of public officials furnished to us, without undertaking to verify the same by independent investigation.
Based on the foregoing, we are of the opinion that, under existing law:
1. The City is a general law city duly organized and existing under the laws of the State of California, with the power to adopt the Resolution, enter into the Fiscal Agent Agreement and perform the agreements on its part contained therein, and issue the Bonds.
2. The Fiscal Agent Agreement has been duly authorized, executed and delivered by the City, and constitutes a valid and binding obligation of the City, enforceable against the City.
3. The Fiscal Agent Agreement creates a valid lien on the Special Tax Revenues and other funds pledged by the Fiscal Agent Agreement for the security of the Bonds, on a parity with other bonds issued or to be issued in accordance with the Fiscal Agent Agreement.
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4. The Bonds have been duly authorized and executed by the City and are valid and binding limited obligations of the City, payable solely from the Special Tax Revenues and other funds provided therefor in the Fiscal Agent Agreement.
5. The interest on the Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax. It should be noted however that interest on the Bonds may be subject to the corporate alternative minimum tax. The opinions set forth in the preceding sentences are subject to the condition that the City comply with all requirements of the Internal Revenue Code of 1986, as amended, that must be satisfied subsequent to the issuance of the Bonds in order that the interest thereon be, and continue to be, excludable from gross income for federal income tax purposes. The City has made certain representations and covenants in order to comply with e ach such requirement. Inaccuracy of those representations, or failure to comply with certain of those covenants, may cause the inclusion of such interest in gross income for federal income tax purposes, which may be retroactive to the date of issuance of the Bonds.
6. The interest on the Bonds is exempt from personal income taxation imposed by the State of California.
We express no opinion regarding any other tax consequences arising with respect to the ownership, sale or disposition of, or the amount, accrual or receipt of interest on, the Bonds.
The rights of the owners of the Bonds and the enforceability of the Bonds and the Fiscal Agent Agreement are limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights generally, and by equitable principles, whether considered at law or in equity.
This opinion is given as of the date hereof, and we assume no obligation to revise or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention, or any changes in law that may hereafter occur. Moreover, our opinions are not a guarantee of a particular result, and are not binding on the Internal Revenue Service or any court; rather, our opinions represent our legal judgment based upon our review of existing law that we deem relevant to such opinions, and any assumptions expressed herein, and in reliance upon the representations, and covenants referenced above. Our engagement with respect to this matter has terminated as of the date hereof.
Respectfully submitted,
A Professional Law Corporation
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APPENDIX G
COMMUNITY FACILITIES DISTRICT BOUNDARY MAP
Stradling Draft of 3/14/25
4909-5566-5704v2/029999-0000
$___________
IMPROVEMENT AREA B OF THE CITY OF FAIRFIELD
COMMUNITY FACILITIES DISTRICT NO. 2016-1 (VILLAGES AT FAIRFIELD) SPECIAL TAX BONDS, SERIES 2025A
BOND PURCHASE AGREEMENT
___________, 2025
City of Fairfield
Fairfield, California
Ladies and Gentlemen:
Stifel, Nicolaus & Company, Incorporated (the “ Underwriter”), acting not as a fiduciary or agent for you, but on behalf of itself, offers to enter into this Bond Purchase Agree ment (the “Purchase Agreement ”) with the City of Fairfield (the “ City”), acting on behalf of Community Facilities District No. 2016-1 (Villages at Fairfield) (the “District”) which, upon acceptance, will be binding upon the City and the Underwriter. This offer is made subject to acceptance by the City on the date hereof, and if not accepted will be subject to withdrawal by the Underwriter upon notice delivered to the City at any time prior to the acceptance hereof by the City.
The City acknowledges and agrees that: (a) the purchase and sale of the Bonds (as such term is defined herein) pursuant to this Purchase Agreement is an arm’s length commercial transaction between the City , on behalf of the District, and the Underwriter, and the only obligations that the Underwriter has to the City with respect to the transaction that is contemplated hereby expressly are set forth in this Purchase Agreement; (b) in connection therewith and with the discussions, undertakings and procedures leading up to the consummation of such transaction, the Underwriter is and has been acting solely as principal and is not acting as a Municipal Advisor (as such term is defined in Section 15B of The Securities Exchange Act of 1934, as amended) to the City; (c) the Underwriter has not assumed an advisory or fiduciary responsibility in favor of the City with respect to the offering that is contemplated hereby or the discussions, undertakings and procedures leading thereto (irrespective of whether the Underwriter has provided other services or is currently providing other services to the City on other matters); (d) the Underwriter has financial and other interests that may differ from and be adverse to those of the City; and (e) the City has consulted its own legal, financial, accounting, tax and other advisors to the extent that it has deemed appropriate.
1. Purchase, Sale and Delivery of the Bonds.
(a) Subject to the terms and conditions and in reliance upon the representations, warranties and agreements that are set forth herein, the Underwriter agrees to purchase from the City, and the City agrees to sell to the Underwriter, all (but not less than all) of the Improvement Area B of the City of Fairfield Community Facilities District No. 2016-1 (Villages at Fairfield ) Special Tax Bonds, Series 2025A (the “Bonds”) in the aggregate principal amount specified in Exhibit A. The Bonds shall be dated the Closing Date ( as such term is defined herein ), and bear interest from said date (payable semiannually on March 1 and September 1 of each year, commencing March 1, 202 2) at the rates per annum and maturing on the dates and in the amounts set forth in Exhibit A. The purchase price for the Bonds shall be the amount specified as such in Exhibit A.
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(b) The Bonds shall be substantially in the form that is described in, shall be issued and secured under the provisions of, and shall be payable and subject to redemption as provided in, the Fiscal Agent Agreement, dated as of December 1, 2021, as supplemented by the First Supplement to Fiscal Agent Agreement dated as of April 1, 2025 (the “Fiscal Agent Agreement”), by and between the City and The Bank of New York Mellon Trust Company, N.A. , as Fiscal Agent (the “ Fiscal Agent”), which was approved by a r esolution adopt ed by the City Council of the City (the “ City Council”), as the legislative body of the District, on __________, 2025 (the “ Resolution of Issuance”). The Bonds and interest thereon will be payable from the proceeds of Special Taxes (as such term is defined in the Fiscal Agent Agreement) that are levied and collected on the taxable land within Improvement Area B of the District (“Improvement Area B ”) in accordance with the Resolution of Formation and the Ordinance (as such terms are defined in the Fiscal Ag ent Agreement), on a parity with the $19,865,000 Improvement Area B of the City of Fairfield Community Facilities District No. 2016 -1 (Villages at Fairfield) Special Tax Bonds, Series 2019A .
Proceeds of the sale of the Bonds will be used in accordance wit h the Fiscal Agent Agreement and the Mello -Roos Community Facilities Act of 1982, as amended (Section 53311 et seq. of the Government Code of the State of California) (the “ Law”), to acquire certain public improvements as described in the Resolution of For mation. The Resolution of Issuance, the Resolution of Formation , Resolution No. 2016 -239 adopted on October 18, 2016 by the City Council of the City, the Resolution of Necessity (as such term is defined in the Fiscal Agent Agreement) and the Ordinance are collectively referred to herein as the “District Resolutions.” (c) Subsequent to its receipt of the certificate of the City (in substantially the form that is set forth in Exhibit B ) deeming final the Preliminary Official Statement for the Bonds, which Preliminary Official Statement, including the cover page and all appendices thereto, is herein referred to as the “ Preliminary Official Statement ”), for purposes of Rule 15c2-12 (“Rule 15c2-12”) promulgated by the Securities and Exchange Commission (the “SEC”), the Underwriter distributed copies of the Preliminary Official Statement. The City hereby ratifies the use by the Underwriter of the Preliminary Official Statement and authorizes the Underwriter to use and distribute the final Official Statement dated the date hereof (including all information that was previously permitted to have been omitted from the Preliminary Official Statement by Rule 15c2-12, and any supplements and amendments thereto as have been approved by the City, as evidenced by the execution and delivery of such document by an officer of the City, the “ Official Statement ”), the Fiscal Agent Agreement, the Continuing Disclosure Certificate of the City (the “City Disclosure Undertaking”), this Purchase Agreement, any other documents or contracts to which the City or the District is a party and all information contained therein , and all other documents, certificates and statements that are furnished by the City to the Underwriter in connection with the transactions that are contemplated by this Purchase Agreement, in connection with the offer and sale of the Bonds by the Underwriter. The Underwriter hereby agrees to deliver a copy of the Official Statement to the Municipal Securities Rulemaking Board (the “ MSRB”) through the Electronic Municipal M arketplace Access website of the MSRB on or before the Closing Date and otherwise to comply with all applicable statutes and regulations in connection with the offering and sale of the Bonds, including, without limitation, MSRB Rule G-32 and Rule 15c2-12.
(d) At 8:00 A.M., California Time, on April __, 2025, or at such earlier time or date as shall be agreed upon by the Underwriter and the City (such time and date being herein referred to as the “Closing Date”), the City will deliver: (i) to The Depository Trust Company in New York, New York, the Bonds in definitive form (all Bonds being in book -entry form registered in the name of Cede & Co. and having the CUSIP numbers that are assigned to them printed thereon), duly executed by the officers of the City, as provided in the Fiscal Agent Agreement; and (ii) to the Underwriter, at
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the offices of Jones Hall, A Professional Law Corporation (“ Bond Counsel ”), in San Francisco , California, or at such other place as shall be mutually agreed upon by the City and the Underwriter, the other documents that are mentioned herein; and the Underwriter shall accept such delivery and pay the purchase price of the Bonds in immediately available funds (such delivery and payment being referred to as the “ Closing”). Notwithstanding t he foregoing, the Underwriter may, in its discretion, accept delivery of the Bonds in temporary form upon making arrangements with the City which are satisfactory to the Underwriter relating to the delivery of the Bonds in definitive form. (e) Except as otherw ise disclosed and agreed to by the City, the Underwriter agrees to make a bona fide public offering of the Bonds at the initial public offering price or prices set forth on the inside cover page of the Official Statement and in Exhibit A; provided, however , that the Underwriter reserves the right to change such initial public offering prices as the Underwriter deems necessary or desirable, in its sole discretion, in connection with the marketing of the Bonds, and to sell the Bonds to certain dealers (includ ing dealers depositing the Bonds into investment trusts) and others at prices lower than the initial offering prices set forth in the Official Statement , subject to Section 12 . A “bona fide public offering” shall include an offering to institutional inves tors or registered investment companies, regardless of the number of such investors to which the Bonds are sold. The Underwriter shall provide to the District on the Closing Date a certificate in the form that is set forth in Exhibit D stating that the Underwriter made a bona fide public offering of the Bonds at the initial public offering price or prices that are set forth on the inside cover page of the Official Statement and in Exhibit A.
2. Representations, Warranties and Agreements of the City. The City represents, warrants and covenants to and agrees with the Underwriter that:
(a) The City is duly organized and validly existing as a general law city under the laws of the State of California and has duly authorized the formation of the District and Improvement Area B within the District pursuant to the Resolution of Formation and the Law. The City Council, as the legislative body of the District, has duly adopted the District Resolutions and has caused to be recorded in the real property records of the Count y of Solano a Notice of Special Tax Lien with respect to Improvement Area B (the “Notice of Special Tax Lien ”) (such District Resolutions and Notice of Special Tax Lien being collectively referred to herein as the “ Formation Documents”).
Each of the Forma tion Documents remains in full force and effect as of the date hereof and has not been amended. The District is duly organized and validly existing as a community facilities district under the laws of the State of California. The City has, and at the Closing Date will have, as the case may be, full legal right, power and authority: (i) to execute, deliver and perform its obligations under this Purchase Agreement , the Fiscal Agent Agreement and the City Disclosure Undertaking (collectively, the “ District Documents”) and to carry out all transactions that are contemplated by each of such agreements ; (ii) to issue, sell and deliver the Bonds to the Underwriter pursuant to the Resolution of Issuance and the Fiscal Age nt Agreement as provided herein; and (iii) to carry out, give effect to and consummate the transactions that are contemplated by the Formation Documents , the District Documents and the Official Statement;
(b) The City has complied, and will at the Closing Date be in compliance, in all material respects, with the Formation Documents and the District Documents, and any immaterial compliance by the City, if any, will not impair the ability of the City to carry out, give effect to or consummate the transactions that are contemplated by the foregoing. From and after the date of issuance of the Bonds, the City will continue to comply with the covenants of the City that are set forth in the District Documents;
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(c) The City Council has duly and validly: (i) adopted the District Resolutions ; (ii) called, held and conducted in accordance with all requirements of the Law an election within the District to approve the levy of the Special Tax es within Improvement Area B and the issuance of the Bonds; (iii) recorded the Notice of Special Tax Lien , which established a continuing lien on the land within Improvement Area B securing the Special Tax ; (iv) authorized and approved the execution, delivery and due performance of the Bonds and the District Documents ; (v) authorized the preparation, delivery and distribution of the Preliminary Official Statement and the Official Statement; and (v) authorized and approved the performance by the City of its obligations that are contained in, and the taking of any and all action as may be necessary to carry out, give effect to and consummate the transactions that are contemplated by, each of the District Documents (including, without limitation, the collection of the Special Tax es), the Bonds and the Official Statement ; and at the Closing Date, the Formation Docum ents will be in full force and effect and the District Documents and the Bonds will constitute the valid, legal and binding obligations of the City and the District and (assuming due authorization, execution and delivery by other parties thereto, where necessary) will be enforceable in accordance with their respective terms, subject to bankruptcy, insolvency, reorganization, moratorium and other laws affecting the enforcement of creditors’ rights in general and to the application of equitable principles if equitable remedies are sought; (d) To the best of the City’s knowledge, neither the District nor the City is in breach of or default under any applicable law or administrative rule or regulation of the State of California (the “State”) or the United States, or of any department, division, agency or instrumentality thereof, or under any applicable court order, administrative decree or order, or under any loan agreement, note, resolution, fiscal agent agreement, contract, agreement or other instrument to which th e District or the City is a party or is otherwise subject or bound, a consequence of which could be to materially and adversely affect the performance by the District or the City of its obligations under the Bonds, the Formation Documents or the District D ocuments, and compliance with the provisions of each thereof will not conflict with or constitute a breach of or default under any applicable law or administrative rule or regulation of the State or the United States, or of any department, division, agency or instrumentality thereof, or under any applicable court or der or administrative decree or order, or a material breach of or default under any loan agreement, note, resolution, trust agreement, contract, agreement or other instrument to which the Distric t or the City, as the case may be, is a party or is otherwise subject or bound;
(e) Except for compliance with blue sky or other state securities law filings, as to which the City makes no representations, all approvals, consents, authorizations, elections and orders of or filings or registrations with any State governmental authority, board, agency or commission having jurisdiction which would constitute a condition precedent to, or the absence of which would materially adversely affect, the performance by the City of its obligations hereunder, or under the Formation Documents or the District Documents, have been obtained and are in full force and effect; (f) The Special Tax es constituting the security for the Bonds ha ve been duly and lawfully authorized and may be levied under the Law, the State Constitution and the applicable laws of the State, and such Special Tax es, when levied, will constitute valid and legally binding continuing liens on the properties on which they have been levied; (g) The City shall not supplem ent or amend the Official Statement or cause the Official Statement to be supplemented or amended without the prior written consent of the Underwriter.
Until the date which is twenty-five (25) days after the “end of the underwriting period” (as such term is defined herein), if any event shall occur of which the City is aware, as a result of which it may be
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necessary to supplement the Official Statement in order to make the statements in the Official Statement, in light of the circumstances existing at such time, not misleading, the City shall forthwith notify the Underwriter of any such event of which it has knowledge and shall cooperate fully in furnishing any information that is available to it for any supplement to the Official Statement which is necessary, in the Underwriter’s opinion, so that the statements therein as so supplemented will not be misleading in light of the circumstances existing at such time , and the City shall promptly furnish to the Underwriter a reasonable number of copies of such supplement. As used herein, the term “end of the underwriting period ” means the later of such time as : (i) the City delivers the Bonds to the Underwriter; or (ii) the Underwriter does not retain, directly or as a member of an underwriting syndicate, an unsold balance of the Bonds for sale to the public. Unless the Underwriter gives notice to the contrary, the “end of the underwriting period” shall be deeme d to be the Closing Date. Any notice that is delivered pursuant to this provision shall be written notice delivered to the City at or prior to the Closing Date, and shall specify a date (other than the Closing Date) to be deemed the “end of the underwriting period;”
(h) The Fiscal Agent Agreement creates a valid pledge of the Special Taxes and the moneys in the Special Tax Fund, the Bond Fund and the 2029 Reserve Fund established pursuant to the Fiscal Agent Agreement, including the investments thereof, subjec t in all cases to the provisions of the Fiscal Agent Agreement permitting the application thereof for the purposes and on the terms and conditions that are set forth therein. Until such time as moneys have been set aside in an amount that is sufficient to pay all then outstanding Bonds at maturity or to the date of redemption if redeemed prior to maturity, plus unpaid interest thereon to maturity or to the date of redemption if redeemed prior to maturity, and premium, if any, the City will faithfully perform and abide by all of the covenants, undertakings and provisions that are contained in the Fiscal Agent Agreement; (i) Except as disclosed in the Official Statement, no acti on, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, regulatory agency, public board or body is pending or, to the best knowledge of the City, threatened: (i) which would materially adversely affect the ability of either the City or the District to perform its obligations under the Bonds, the Formatio n Documents or the District Documents ; (ii) that seeks to restrain or to enjoin the issuance, sale or delivery of the Bonds, the application of the proceeds thereof in accordance with the Fiscal Agent Agreement or the collection or application of the Speci al Taxes that are pledged or to be pledged to pay the principal of and interest on the Bonds, or the pledge thereof, or in any way contesting or affecting the validity or enforceability of the Bonds, the Formation Documents, the District Documents or any a ction contemplated by any of said documents ; or (iii) in any way contesting the completeness or accuracy of the Preliminary Official Statement or the powers or authority of the City or the District with respect to the Bonds, the Formation Documents, the Di strict Documents or any action of the City or the District contemplated by any of said documents; nor is there any action pending or, to the best knowledge of the City, threatened against the City or the District which alleges that interest on the Bonds is not excludable from gross income for federal income tax purposes or is not exempt from personal income taxation in the State; (j) The City will furnish such information, execute such instruments and take such other action in cooperation with the Underwriter a s the Underwriter may reasonably request in order for the Underwriter to qualify the Bonds for offer and sale under the blue sky or other securities laws and regulations of such states and other jurisdictions of the United States as the Underwriter may designate; provided, however, that the City shall not be required to register as a dealer or a broker of securities or to consent to service of process in connection with any blue sky filing;
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(k) Any certificate that is signed by any official of the City who is authorized to do so shall be deemed a representation and warranty to the Underwriter as to the statements made therein; (l) The City will apply the proceeds of the Bonds in accordance with the Fiscal Agent Agreement and as described in the Official Statement;
(m) The information contained in the Preliminary Official Statement (other than information relating to DTC and its book -entry system, as to which no view is expressed) was as of the date thereof, and the information contained in the Official Statement (other t han information relating to DTC and its book -entry system, as to which no view is expressed) as of its date and as of the Closing Date shall be, true and correct in all material respects , and such information does not and shall not contain any untrue or mi sleading statement of a material fact or omit to state any material fact that is necessary to make the statements therein, in light of the circumstances under which they were made, not misleading;
(n) The Preliminary Official Statement heretofore delivered to the Underwriter has been deemed final by the City as of its date, except for the omission of such information as is permitted to be omitted in accordance with paragraph (b)(1) of Rule 15c2-12. The City hereby covenants and agrees that, within seven (7) business days from the date hereof, the City shall cause a final form of the Official Statement to be delivered to the Underwriter in a quantity mutually agreed upon by the Underwriter and the City so that the Underwriter may comply with paragraph (b)(4) of Rule 15c2-12 and Rules G-12, G-15, G-32 and G-36 of the MSRB;
(o) Except as disclosed in the Preliminary Official Statement and the Official Statement, the City has not within the last five years failed to comply in any material respect with any continuing disclosure undertakings under Rule 15c2-12;
(p) Except as otherwise disclosed in the Preliminary Official Statement, the Formation Documents have not been amended, terminated, rescinded or modified; (q) The City shall not voluntarily undertake any course of action that is inconsistent with satisfaction of the requirements that are applicable to the City as set forth in this Purchase Agreement;
(r) The City shall cooperate with the Underwriter in the qualification of t he Bonds for offering and sale and the determination of their eligibility for investment under the laws of such jurisdictions as the Underwriter may designate; and
(s) The City shall not knowingly take or omit to take any action that, under existing law, may adversely affect the exemption from state income taxation or the exclusion from gross income for federal income tax purposes of the interest on the Bonds.
3. Conditions to the Obligations of the Underwriter. The obligations of the Underwriter to accept delivery of and pay for the Bonds on the Closing Date shall be subject, at the option of the Underwriter, to the accuracy in all material respects of the representations and warranties on the part of the City that are contained herein, as of the date hereof and as of the Closing Date, to the accuracy in all material respects of the statements of the officers and other officials of the City made in any certificates or other documents that are furnished pursuant to the provisions hereof, to the
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performance by the City of its obligations to be performed hereunder at or prior to the Closing Date and to the following additional conditions:
(a) At the Closing Date, the Formation Documents and the District Documents shall be in full force and effect, and shall not have been amended, modified or supplemented, except as may have been agreed to in writing by the Underwriter, and there shall have been taken in connection therewith, with the issuance of the Bonds and with the transactions contemplated thereby and by this Purchase Agreement, all such actions as, in the opinion of Bond Counsel and Stradling Yocca Carlson & Rauth LLP, counsel to the Underwriter, shall be necessary and appropriate; (b) The information that is contained in the Official Statement will, as of the Closing Date and as of the date of any supplement or amendment thereto pursuant to Section 2( g) hereof, be true, correct and complete in all material respects and will not, as of the Closing Date or as of the date of any supplement or amendment thereto pursuant to Sec tion 2(g) hereof, contain any untrue statement of a material fact or omit to state a material fact that is required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading;
(c) Between the date hereof and the Closing Date, the market price or marketability of the Bonds at the initial offering prices that are set forth in the Official Statement shall not have been materially adversely affected, in the judgment of the Underwrit er (evidenced by a written notice to the City terminating the obligation of the Underwriter to accept delivery of and pay for the Bonds), by reason of any of the following:
(1) legislation introduced in or enacted (or resolution passed) by the Congress of the United States of America or recommended to the Congress by the President of the United States, the Department of the Treasury, the Internal Revenue Service, or any member of Congress, or favorably reported for passage to either House of Congress by any com mittee of such House to which such legislation had been referred for consideration or a decision rendered by a court established under Article III of the Constitution of the United States of America or by the Tax Court of the United States of America, or a n order, ruling, regulation (final, temporary or proposed), press release or other form of notice issued or made by or on behalf of the Treasury Department or the Internal Revenue Service of the United States of America, with the purpose or effect, directl y or indirectly, of imposing federal income taxation upon the interest that would be received by the holders of the Bonds beyond the extent to which such interest is subject to taxation as of the date hereof;
(2) legislation introduced in or enacted (or resolu tion passed) by the Congress of the United States of America, or an order, decree or injunction issued by any court of competent jurisdiction, or an order, ruling, regulation (final, temporary or proposed), press release or other form of notice issued or m ade by or on behalf of the SEC, or any other governmental agency having jurisdiction of the subject matter, to the effect that obligations of the general character of the Bonds, or the Bonds, including any or all underlying arrangements, are not exempt from registration under or from other requirements of the Securities Act of 1933, as amended, or that the Fiscal Agent Agreement is not exempt from qualification under or from other requirements of the Trust Indenture Act of 1939, as amended, or that the issu ance, offering or sale of obligations of the general character of the Bonds, or of the Bonds, including any or all underwriting arrangements, as contemplated hereby or by the Official Statement or otherwise is or would be in violation of the federal securi ties laws, rules or regulations as amended and then in effect;
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(3) any amendment to the federal or State Constitution or action by any federal or State court, legislative body, regulatory body or other authority materially adversely affecting the tax status of the City or the District, its property, income, securities (or interest thereon), the validity or enforceability of the Special Taxes or the ability of the City to construct or acquire the improvements as contemplated by the Formation Documents, the District Documents or the Official Statement; (4) any event occurring, or information becoming known, which, in the judgment of the Underwriter, makes untr ue in any material respect any statement or information contained in the Preliminary Official Statement or the Official Statement, or results in the Preliminary Official Statement or the Official Statement containing any untrue statement of a material fact or omitting to state a material fact that is required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; (5) the declaration of war or the escalation of, or engagement in , military hostilities by the United States or the occurrence of any other national or international emergency or calamity or civil unrest relating to the effective operation of the government of, or the financial community in, the United States , or the oc currence of any epidemic or pandemic which, in the judgment of the Underwriter, makes it impracticable or inadvisable to proceed with the offering or the delivery of the Bonds on the terms and in the manner that are contemplated in the Preliminary Official Statement or the Official Statement;
(6) the declaration of a general banking moratorium by federal, State of New York or State of California authorities, or the general suspension of trading on any national securities exchange or minimum or maximum prices fo r trading shall have been fixed and be in force, or maximum ranges for prices for securities shall have been required and be in force on the New York Stock Exchange or other national securities exchange, whether by virtue of determination by that exchange or by order of the SEC or any other governmental authority having jurisdiction that, in the Underwriter’s reasonable judgment, makes it impracticable for the Underwriter to market the Bonds or enforce contracts for the sale of the Bonds;
(7) the imposition by the New York Stock Exchange or other national securities exchange, or any governmental authority, of any material restrictions that are not now in force with respect to the Bonds or obligations of the general character of the Bonds or securities generally, or the material increase of any such restrictions now in force, including those relating to the extension of credit by, or the charge to the net capital requirements of, the Underwriter; (8) the entry of an order by a court of competent jurisdiction which enj oins or restrains the City from issuing permits, licenses or entitlements within the District or which order, in the reasonable opinion of the Underwriter, otherwise materially and adversely affects the proposed development of property within the District;
(9) a material disruption in securities settlement, payment or clearance services affecting the Bonds shall have occurred;
(10) there shall have been any material adverse change in the affairs of the City that in the Underwriter’s reasonable judgment will material ly adversely affect the market for the Bonds or the ability of the Underwriter to enforce contracts for the sale of the Bonds;
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(11) there shall be established any new restriction on transactions in securities materially affecting the free market for securities (including the imposition of any limitation on interest rates) or the extension of credit by, or a change to the net capital requirements of, underwriters established by the New York Stock Exchange, the SEC, any other federal or State agency or the Congress of the United States, or by Executive Order; or (12) a stop order, release, regulation, or no-action letter by or on behalf of the SEC or any other governmental agency having jurisdiction of the subject matter shall have been issued or made to the effect tha t the issuance, offering, or sale of the Bonds, including all of the underlying obligations as contemplated hereby or by the Official Statement, or any document relating to the issuance, offering or sale of the Bonds is or would be in violation of any prov ision of the federal securities laws at the Closing Date, including the Securities Act of 1933, the Securities Exchange Act of 1934 and the Trust Indenture Act of 1939, as amended; and (d) On the Closing Date, the Underwriter shall have received counterpart or iginals or certified copies of the following documents, in each case satisfactory in form and substance to the Underwriter:
(1) The Formation Documents and the District Documents, together with a certificate dated as of the Closing Date of the City Clerk to the effect that each Formation Document is a true, correct and complete copy of the one that was duly adopted by the City Council; (2) The Official Statement , duly executed by the City for and on behalf of the District;
(3) An unqualified approving opinion for the B onds, dated the Closing Date and addressed to the City, of Bond Counsel, in the form attached to the Preliminary Official Statement as an appendix, and an unqualified letter of such counsel, dated the Closing Date and addressed to the Underwriter and the Fiscal Agent, to the effect that such approving opinion addressed to the District may be relied upon by the Underwriter and the Fiscal Agent to the same extent as if such opinion was addressed to it;
(4) A supplemental opinion, dated the Closing Date and addres sed to the Underwriter, of Bond Counsel, to the effect that : (i) the District Documents have been duly authorized, executed and delivered by the City, and, assuming that such agreements constitute valid and binding obligation s of the other parties thereto, constitute the legally valid and binding obligations of the City enforceable in accordance with their terms, except as enforcement may be limited by bankruptcy, moratorium, insolvency or other laws affecting creditors ’ rights or remedies and general principles of equity (regardless of whether such enforceability is considered in equity or at law); (ii) the Bonds are not subject to the registration requirements of the Securities Act of 1933, as amended, and the Fiscal Agent Agreement is exempt from qualific ation under the Trust Indenture Act of 1939, as amended; (iii) the information contained in the Official Statement on the cover and under the captions “INTRODUCTION,” “FINANCING PLAN,” “THE 2025 BONDS,” “SECURITY FOR THE 2025 BONDS,” “LEGAL MATTERS—Tax Exemption” and in Appendices C and G thereof (except that no opinion or belief need be expressed as to any financial or statistical data contained therein), insofar as it purports to summarize certain provisions of the Law, the Bonds , the Fiscal Agent Agreement and the exclusion from gross income for federal income tax purposes and exemption from State personal income taxes of interest on the Bonds, presents a fair and accurate summary of such provisions; (iv) the District is a communi ty facilities district that is duly organized
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and validly existing under and by virtue of the laws of the State; (v) the Special Taxes have been duly and validly authorized in accordance with the provisions of the Law and the Notice of Special Tax Lien was recorded at the time and in the form required by the Law ; and (vi) the execution and delivery by the City of the District Documents, and compliance by the City with the provisions thereof, under the circumstances contemplated thereby, do not and will not in any material respect conflict with or constitute a breach of or default under any law or administrative regulation to which the City or the District is subject to or by which it is bound , or the District Resolutions, the consequence of which could be a material and adverse effect on the performance by the City of its obligations under the District Documents;
(5) An opinion, dated the Closing Date and addressed to the Underwriter, of Stradling Yocca Carlson & Rauth LLP, counsel to the Underwriter, in form and substance satisfactory to the Underwriter;
(6) A certificate or certificates, dated the Closing Date and signed by an authorized officer of the City, ratifying the use and distribution by the Underwriter of the Preliminary Official Statement and the Official Statement in connection with the offering and sale of the Bonds; and certifying that: (i) the representations and warranties of the City in Section 2 are true and correct in all material respects on and as of the Closing Date with the same effect as if mad e on the Closing Date; (ii) to the best of his or her knowledge, no event has occurred since the date of the Official Statement affecting the matters contained therein which should be disclosed in the Official Statement for the purposes for which it is to be used in order to make the statements and information contained in the Official Statement not misleading in any material respect, and the Bonds, the Formation Documents and the District Documents conform as to form and tenor to the descriptions thereof contained in the Official Statement; (iii) the City has complied with all of the agreements and satisfied all of the conditions on its part to be performed or satisfied under the Formation Documents, the District Documents and the Official Statement at or prior to the Closing Date; (7) An opinion, dated the Closing Date and addressed to the Underwriter, of the City Attorney, to the effect that:
(A) the City is a municipal corporation that is duly organized and validly existing under and by virtue of the laws of the State;
(B) the District Resolutions were duly adopted at meeting s of the City Council that were each called and held pursuant to law and with all public notice required by law and at which a quorum was present and acting throughout, and the District Resolutions are in full force and effect and have not been modified, amended or rescinded as of the Closing Date; (C) the execution and delivery by the City of the District Documents, and compliance with the City with the provisions thereof, under the circumstances co ntemplated thereby, do not and will not in any material respect conflict with or constitute a breach of or default under any court decree, resolution (other than the District Resolutions) or agreement to which the City is subject to or by which it is bound , the consequence of which could be a material and adverse effect on the performance by the City of its obligations under the District Documents; and (D) except as otherwise disclosed in the Official Statement, there is no action, suit, proceeding, inquiry, or investigation, at law or in equity, before or by any court, regulatory agency, or public board or body, pending of which the City or the District has received
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service of process or, to the best knowledge of such counsel, threatened against the City or the District: (i) in any way questioning the existence of the City or the District or the titles of the officers thereof to their respective offices; ( ii) affecting, contesting or seeking to prohibit, restrain or enjoin the issuance of the Bonds or any of the District Documents, or the payment or collection of any amounts pledged or to be pledged to pay the Bonds, or in any way contesting or affecting the validity of the Bonds or the District Documents or the consummation of the transactions that are contemplated thereby or any proceeding of the City or the District taken with respect to any of the foregoing, or explicitly alleging that the interest that is payable on the Bonds is not exempt from taxation or contesting the powers of the City or the District and the authority to pledge the Special Taxes; (iii) that may result in any material adverse change relating to the City or the District that will materially adversely affect the ability to pay the Bonds when due; or (iv) contesting the completeness or accuracy of the Preliminary Official Statement or the Official Statement or any supplement or amendment thereto or asserting that the Preliminary Official S tatement or the Official Statement contained any untrue statement of a material fact or omitted to state any material fact that is necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading;
(8) One or more certificates dated the Closing Date from Goodwin Consulting Group (the “Special Tax Consultant”) addressed to the City and the Underwriter to the effect that :
(i) the amount of the Special Taxes that could be levied in each Fiscal Year on all parcels of Taxable Property (as such term is used in the herein -defined Rate and Method) in Improvement Area B is at least one hundred ten percent (110%) of the total Annual Debt Service (as such term is defined in the Fiscal Agent Agreement) for each such Fiscal Year on the proposed Bonds; (ii) the description of the Rate and Method (as such term is defined in the Fiscal Agent Agreement) that is appended to the Preliminary Official Statement and the Official Statement is a true, complete and correct recitation of the provisions thereof; and (iii) all information that has been supplied by the Special Tax Consultant for use in the Official Statement is true and correct as of the date of the Official Statement and as of the Closing Date;
(9) A certificate of the City dated the Closing Date, in a form acceptable to Bond Counsel, that the Bonds are not arbitrage bonds within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended;
(10) A certificate of the Fiscal Agent and an opinion of counsel to the Fiscal Agent dated the Closing Date and addressed to the City and the Underwriter to the effect that the Fiscal Agent has authorized the execution and delivery of the Fiscal Agent Agreement and that the Fiscal Agent Agreement is a valid and binding obliga tion of the Fiscal Agent enforceable in accordance with its terms;
(11) [A Letter of Representations of each of: (i) Rancho Tolenas Corporation, a California Corporation , and (ii) D.R. Horton BAY, Inc., a Delaware corporation (collectively, the “Developers”) in connection with the printing of the Preliminary Official Statement , each dated the date of the Preliminary Official Statement , substantially in the form that is set forth in Exhibit C, or as any such Letter of Representation may be modified with the approval of the Underwriter, and a Closing Certificate of each Developer dated the Closing Date, substantially in the form that is set forth in Appendix 1 to Exhibit C];
(12) A letter dated the Closing Da te from BBG, Inc. (the “Appraiser”) addressed to the Underwriter and the City to the effect that it has prepared the appraisal report (the
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“Appraisal”) with respect to the property located within Improvement Area B , and that : (a) the Appraisal that is appe nded to the Official Statement may be included in the Preliminary Official Statement and the Official Statement; (b) the Appraisal and the information in the Official Statement referring to the Appraisal does not contain any untrue statement of a material fact or omit to state a material fact that is necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; and (c) no events or occurrences have been ascertained by the Appraiser or have come to the Appraiser’s attention that would materially change the opinions set forth in the Appraisal;
(13) A negative assurance letter of Jones Hall, A Professional Law Corporation, as Disclosure Counsel to the City (“ Disclosure Counsel”), dated the Closing Date and addressed to the Underwriter, to the effect that, based on the information made available to it in its role as Disclosure Counsel, without having undertaken to determine independently the accuracy, completeness or fairness of the statements contained in the Preliminary Official Statement and the Official Statement, but on the basis of its participation in conferences with the Underwriter, counsel to the Underwriter , the City, the City Attorney, the Special Tax Consultant, PFM Financial Advisors, LLC, th e City’s municipal advisor (the “Municipal Advisor”), and others, and its examination of certain documents, no information has come to the attention of the attorneys in the firm rendering legal services in connection with the issuance of the Bonds which wo uld lead them to believe that the Preliminary Official Statement as of its date or the Official Statement as of its date and as of the Closing Date contained any untrue statement of a material fact or omitted to state any material fact that is necessary to make the statements therein, in light of the circumstances under which they were made, not misleading (except that no opinion or belief need be expressed as to any financial, statistical and demographic data or forecasts, numbers, charts, estimates, projections, assumptions or expressions of opinion, the engineer’s report, and information regarding DTC and its book -entry only system contained in the Preliminary Official Statement or the Official Statement); (14) A certified copy of the general resolution of the Fiscal Agent authorizing the execution and delivery of certain documents by certain officers of the Fiscal Agent, which resolution authorizes the execution and delivery of the Fiscal Agent Agreement and the authentication and delivery of the Bonds by the Fiscal Agent;
(15) Copies of the preliminary and final notices to the California Debt and Investment Advisory Commission relating to the Bonds;
(16) Evidence of the City’s and/or the District’s compliance with or exemption from Section 8855(i) of the California Government Code; (17) A copy of the executed Blanket Issuer Letter of Representations by and between the City and/or the District and The Depository Trust Company relating to the book entry system, or an acknowledgement from The Depository Trust Company that such a letter is on file with The Depository Trust Company;
(18) A fully executed copy of the Acquisition Agreement, by and between and the City, on behalf of the District, and Rancho Tolenas Corporation, a California Corporation, relating to the District, together with Amendment No. 1 thereto; and (19) Such additional legal opinions, certificates, instruments and other documents as the Underwriter may reasonably request to evidence the truth and accuracy, as of the date hereof
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and as of the Closing Date, of the statement s and information in the Preliminary Official Statement and the Official Statement, of the City’s representations and warranties herein and the due performance or satisfaction by the City at or prior to the Closing of all agreements then to be performed and all conditions then to be satisfied by the City and the District in connection with the transactions contemplated hereby and by the Official Statement.
If the City shall be unable to satisfy the conditions to the obligations of the Underwriter to purchase, accept delivery of and pay for the Bonds which are contained in this Purchase Agreement, or if the obligations of the Underwriter to purchase, accept delivery of and pay for the Bonds shall be terminated for any reason permitted by this Purchase Agreeme nt, this Purchase Agreement shall terminate and neither the Underwriter nor the City shall be under any further obligation hereunder, except that the respective obligations of the City and the Underwriter set forth in Sections 5, 6 and 8 shall continue in full force and effect.
4. Conditions to the Obligations of the City . The City’s obligations hereunder are subject to the Underwriter’s performance of its obligations hereunder, and are also subject to the following conditions:
(a) As of the Closing Date, no litigation shall be pending or, to the knowledge of the duly authorized officer of the City executing the certificate referred to in Section 3(d)(6) hereof, threatened, to restrain or enjoin the issuance or sale of the Bonds or in any way affecting any authority for or the validity of the Bonds, the Formation Documents, the District Documents or the existence or powers of the City; and
(b) As of the Closing Date, the City shall receive the approving opinion of Bond Counsel referred to in Section 3(d)(3) hereof, dated as of the Closing Date.
5. Expenses. Whether or not the Bonds are delivered to the Underwriter as set forth herein:
(a) The Underwriter shall be under no obligation to pay, and the City shall pay or cause to be paid (out of any legally available funds of the District) all expenses that are incident to the performance of the City’s obligations hereunder, including, but not limited to, the cost of printing, engraving and delivering the Bonds to the Underwriter, the cost of preparation, printing, distribution and delivery of the Fiscal Agent Agreement, the Preliminary Official State ment, the Official Statement and all other agreements and documents that are contemplated hereby (and drafts of any thereof) in such reasonable quantities as requested by the Underwriter (excluding the fees and disbursements of the Underwriter’s counsel) , reimbursement to the Underwriter for any meals and travel for City employees or officers that were paid for by the Underwriter , the fees and disbursements of the Fiscal Agent for the Bonds and Bond Counsel and any accountants, engineers or any other expert s or consultants that the City has retained in connection with the Bonds and any other expenses that are agreed to by the parties; and
(b) The City shall be under no obligation to pay, and the Underwriter shall pay, any fees of the California Debt and Investme nt Advisory Commission, the cost of preparation of any “blue sky” or legal investment memoranda and this Purchase Agreement; expenses to qualify the Bonds for sale under any “blue sky” or other state securities laws; and all other expenses that are incurred by the Underwriter in connection with its public offering and distribution of the Bonds (except those
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which are specifically enumerated in paragraph (a) of this section), including the fees and disbursements of its counsel and any advertising expenses.
6. Notices. Any notice or other communication to be given to the City under this Purchase Agreement may be given by delivering the same in writing to the City at 1000 Webster Street, Fairfield, California 94533, Attention: City Manager ; and any notice or othe r communication to be given to the Underwriter under this Purchase Agreement may be given by delivering the same in writing to Stifel, Nicolaus & Company, Incorporated, One Montgomery Street, 35th Floor, San Francisco, California 94104, Attention: Eric McKean.
7. Parties in Interest . This Purchase Agreement is made solely for the benefit of the City and the Underwriter (including their successors or assigns), and no other person shall acquire or have any right hereunder or by virtue hereof.
8. Survival of Repre sentations and Warranties . The representations and warranties of the City in or made pursuant to this Purchase Agreement shall not be deemed to have been discharged, satisfied or otherwise rendered void by reason of the Closing or termination of this Purchase Agreement and regardless of any investigations made by or on behalf of the Underwriter (or statements as to the results of such investigations) concerning such representations and statements of the City and regardless of delivery of and payment for the Bonds.
9. Effective. This Purchase Agreement shall become effective and binding upon the respective parties hereto upon the execution of the acceptance hereof by the City and shall be valid and enforceable as of the time of such acceptance.
10. No Prior Agre ements. This Purchase Agreement supersedes and replaces all prior negotiations, agreements and understandings between the parties hereto in relation to the sale of Bonds for the City.
11. Governing Law. This Purchase Agreement shall be governed by the laws of the State of California.
12. Establishment of Issue Price.
(a) The Underwriter agrees to assist the City in establishing the issue price of the Bonds and shall execute and deliver to the City at Closing an “issue price” or similar certificate, together with the supporting pricing wires or equivalent communications, substantially in the form attached hereto as Exhibit D, with such modifications as may be appropriate or necessary, in the reasona ble judgment of the Underwriter, the City and Bond Counsel, to accurately reflect, as applicable, the sales price or prices or the initial offering price or prices to the public of the Bonds. All actions to be taken by the City under this section to estab lish the issue price of the Bonds may be taken on behalf of the City by the Municipal Advisor, identified herein and any notice or report to be provided to the City may be provided to the Municipal Advisor.
(b) Except as otherwise set forth in Exhibit A, the City will treat the first price at which 10% of each maturity of the Bonds (the “ 10% test”) is sold to the public as the issue price of that maturity (if different interest rates apply within a maturity, each separate CUSIP number within that maturity will be subject to the 10% test). At or promptly after the execution of this Purchase Agreement, the Underwriter shall report to the City the price or prices at which it has sold to the
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public each maturity of Bonds. If at that time the 10% test has not been satisfied as to any maturity of the Bonds, the Underwriter agrees to promptly report to the City the prices at which it sells the unsold Bonds of that maturity to the public. That reporting obligation shall continue, whether or not the Closing Date has oc curred, until the 10% test has been satisfied as to the Bonds of that maturity or until all Bonds of that maturity have been sold to the public. (c) The Underwriter confirms that it has offered the Bonds to the public on or before the date of this Purchase Agreement at the offering price or prices (the “initial offering price”), or at the corresponding yield or yields, set forth in Exhibit A, except as otherwise set forth therein. Exhibit A also sets forth, identified under the column “Hold the Offering Price Rule Used,” as of the date of this Purchase Agreement, the maturities, if any, of the Bonds for which the 10% test has not been satisfied and for which the City and the Underwriter agree that the restrictions set forth in the next sentence shall apply, which will allow the City to treat the initial offering price to the public of each such maturity as of the sale date as the issue price of that maturity (the “ hold-the-offering-price rule”). So long as the hold -the-offering-price rule remains applicable to any maturity of the Bonds, the Underwriter will neither offer nor sell unsold Bonds of that maturity to any person at a price that is higher than the initial offering price to the public during the period starting on the sale date and ending on the earlier of the following:
(1) the close of the fifth (5th) business day after the sale date; or (2) the date on which the Underwriter has sold at least 10% of that maturity of the Bonds to the public at a price that is no higher than the initial offering price to the public.
The Underwriter shall promptly advise the City when it has sold 10% of that maturity of the Bonds to the public at a price that is no higher than the initial offering price to the public, if that occurs prior to the close of the fifth (5th) business day after the sale date. (d) The Underwriter confirms that any selling group agreement and any retail distribution agreement relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain langu age obligating each dealer who is a member of the selling group and each broker -dealer that is a party to such retail distribution agreement, as applicable, to : (1) report the prices at which it sells to the public the unsold Bonds of each maturity allotte d to it until it is notified by the Underwriter that either the 10% test has been satisfied as to the Bonds of that maturity or all Bonds of that maturity have been sold to the public; and (2) comply with the hold-the- offering-price rule, if applicable, in each case if and for so long as directed by the Underwriter. The City acknowledges that, in making the representation set forth in this subsection, the Underwriter will rely on: (A) in the event that a selling group has been created in connection with th e initial sale of the Bonds to the public, the agreement of each dealer who is a member of the selling group to comply with the hold -the-offering-price rule, if applicable, as set forth in a selling group agreemen t and the related pricing wires; and (B) in the event that a retail distribution agreement was employed in connection with the initial sale of the Bonds to the public, the agreement of each broker-dealer that is a party to such agreement to comply with the hold-the-offering-price rule, if applicable, as set forth in the retail distribution agreement and the related pricing wires. The City further acknowledges that the Underwriter shall not be liable for the failure of any dealer who is a member of a selling group, or of any broker -dealer that is a party to a retail distribution agreement, to comply with its corresponding agreement regarding the hold-the-offering-price rule as applicable to the Bonds.
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(e) The Underwriter acknowledges that sales of any Bonds to any person that is a related party to the Underwriter shall not constitute sales to the public for purposes of this section. Further, for purposes of this section:
(1) “public” means any person other than an underwriter or a related party; (2) “underwriter” means : (A) any person that agrees pursuant to a w ritten contract with the City (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the public ; and (B) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (A) to participate in the initial sale of the Bonds to the public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the public); (3) a purchaser of any of the Bonds is a “ related party” to an underwriter if the underwriter and the purchaser are subject, directly or indirectly, to : (A) at least 50% common ownership of the voting power or the total value of their stock, if both entities are corporations (including direct ownership by one corporation of another) ; (ii) more than 50% common ownership of their capital interests or profits interests, if both entities are partnerships (including direct ownership by one partnership of another) ; or (iii) more than 50% common ownership of the value of the outstanding stock of the corporation or the capital interests or profit interests of the partnership, as applicable, if one entity is a corporation and the other entity is a partnership (including direct ownership of the applicable stock or interests by one entity of the other); and (4) “sale date ” means the date of execution of this Purchase Agreement by all parties.
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13. Counterparts. This Purchase Agreement may be executed simultaneously in several counterparts, each of whic h shall be an original and all of which shall constitute one and the same instrument.
Very truly yours,
STIFEL, NICOLAUS & COMPANY,
INCORPORATED
By:
Authorized Representative
CITY OF FAIRFIELD, for and on behalf of City of
Fairfield Community Facilities District No. 2016 -1
(Villages at Fairfield)
By:
Authorized Officer
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EXHIBIT A
$___________
IMPROVEMENT AREA B OF THE CITY OF FAIRFIELD
COMMUNITY FACILITIES DISTRICT NO. 2016-1 (VILLAGES AT FAIRFIELD) SPECIAL TAX BONDS, SERIES 2025A
MATURITY SCHEDULE
Maturity
(September 1)
Principal
Amount
Interest
Rate Yield
Initial
Offering
Price
CUSIP No.
(304194)
10% Test
Used
Hold the
Offering Price
Rule Used
20__ $ % %
* Term Bond.
C Priced to first optional redemption date of ____ 1, 20__ at par.
The purchase price of the Bonds shall be $___________, which is the principal amount thereof ( $___________.00) plus a net original issue premium of $___________ and less Underwriter’s discount of $___________.
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EXHIBIT B
IMPROVEMENT AREA B OF THE CITY OF FAIRFIELD
COMMUNITY FACILITIES DISTRICT NO. 2016-1 (VILLAGES AT FAIRFIELD) SPECIAL TAX BONDS, SERIES 2025A
RULE 15c2-12 CERTIFICATE
The undersigned hereby certifies and represents that he is the City Manager of the City of Fairfield (the “ City”), and, as such, is duly authorized to execute and deliver this certificate and further hereby certifies that:
(1) this certificate is being delivered in connection with the sale and issuance of the Improvement Area B of the City of Fairfield Community Facilities District No. 2016 -1 (Villages at Fairfield) Special Tax Bonds, Series 2025A (the “Bonds”) in orde r to enable the underwriter of the Bonds to comply with Rule 15c2-12 promulgated under the Securities Exchange Act of 1934, as amended (the “Rule”);
(2) in connection with the sale and issuance of the Bonds, there has been prepared a Preliminary Official Statement dated the date of this certificate setting forth information concerning the Bonds and the City (the “Preliminary Official Statement”); and (3) except for the Permitted Omissions, the Preliminary Official Statement is deemed final within the meaning of the Rule. As used herein, the term “ Permitted Omissions” refers to the offering price(s), interest rates(s), selling compensation, aggregate principal amount, principal amount per maturity, delivery dates, ratings and other terms of the Bonds depending on such matters, all as set forth in the Rule.
___________, 2025.
CITY OF FAIRFIELD, for and on behalf of City of
Fairfield Community Facilities District No. 2016 -1
(Villages at Fairfield)
By:
Its: City Manager
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EXHIBIT C
IMPROVEMENT AREA B OF THE CITY OF FAIRFIELD
COMMUNITY FACILITIES DISTRICT NO. 2016-1 (VILLAGES AT FAIRFIELD) SPECIAL TAX BONDS, SERIES 2025A
LETTER OF REPRESENTATIONS OF
[RANCHO TOLENAS CORPORATION] [D.R. HORTON BAY, INC.]
___________, 2025
City of Fairfield
1000 Webster Street
Fairfield, California 94533
City of Fairfield Community Facilities District No. 2016-1 (Villages at Fairfield) 1000 Webster Street
Fairfield, California 94533
Stifel, Nicolaus & Company, Incorporated
One Montgomery Street, 35th Floor
San Francisco, California 94104
Ladies and Gentlemen:
Reference is made to the Improvement Area B of the City of Fairfield Community Facilities District No. 2016-1 (Villages at Fairfield) Special Tax Bonds, Series 2025A (the “Bonds”) and to the Bond Purchase Agreement (the “ Purchase Agreement”), by and between the City of Fairfield (the “City”) and Stifel, Nicolaus & Company, Incorporated (the “Underwriter”), to be entered into in connection therewith. This Letter of Representations of [Rancho Tolenas Corporation] [D.R. Horton BAY, Inc.] (the “Letter of Representations”) is delivered pursuant to and in satisfaction of Section 3(d)(11) of the Purchase Agreeme nt. Capitalized terms that are used herein and not otherwise defined have the meanings ascribed to them in the Purchase Agreement.
The undersigned certifies that the undersigned is familiar with the facts herein and is authorized and qualified to certify the same as an authorized officer or representative of [Rancho Tolenas Corporation, a California Corporation ] [D.R. Horton BAY, Inc., a Delaware corporation ] ([collectively,] the “Developer”), and the undersigned, on behalf of the Developer, further certif ies as follows:
1. The Developer is duly organized and validly existing under the laws of the State of [California] [Delaware], and has all requisite right, power and authority to execute and deliver this Letter of Representations regarding certain informa tion set forth in the Preliminary Official Statement relating to the Bonds dated the date hereof (the “Preliminary Official Statement”).
2. [D.R. HORTON]Except as set forth in the Preliminary Official Statement, no action, suit, proceeding, inquiry or inve stigation at law or in equity, before or by any court, regulatory agency, public board or body is pending against the Developer (with proper service of process to the Developer having been accomplished) or to the Actual Knowledge of the Undersigned is thre atened
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in writing against the Developer : (a) in any way contesting or affecting the validity of the Special Taxes; or (b) which is reasonably likely to materially and adversely affect the Developer’s ability to complete the sale of the remaining homes to be sold at its property (the “Property”) in Improvement Area B (the “ Improvement Area”) of City of Fairfield Community Facilities District No. 2016-1 (Villages at Fairfield) (the “Community Facilities District”) as described in the Preliminary Official Statement; or (c) in any way contesting or affecting the Developer’s obligation or ability to pay the Special Taxes due with respect to the Property (to the extent the responsibility of the Developer) prior to delinquency.
3. As of the date of the Preliminary Official Statement, to the Actual Knowledge of the Undersigned, the information that is contained therein solely with respect to the Developer, its Affiliates, the proposed development of the Property, ownershi p of the Property, the Developer’s development plan, the Developer’s financing plan, the Developer’s lenders, if any, and contractual arrangements of the Developer or any Affiliates (including, if material to the Developer’s development plan or the Develop er’s financing plan, loans of such Affiliates) as set forth under the captions of the Preliminary Official Statement entitled [RANCHO TOLENAS: “THE DISTRICT AND IMPROVEMENT AREA B—Description and Location” “ —Status of Bond Financed Public Infrastructure” a nd “ —Environmental Matters” and “PROPERTY OWNERSHIP AND DEVELOPMENT STATUS” —Property Ownership” and “ —The Master Developer” and “CONTINUING DISCLOSURE —Master Developer”] [ D.R. HORTON] : “PROPERTY OWNERSHIP AND DEVELOPMENT STATUS —D.R. Horton”] (excluding therefrom in all cases information regarding appraised or assessed values, market value ratios and annual special tax ratios, and information which is identified as having been provided by a source other than the Developer), is true and correct in all material respects does did not contain any untrue statement of a material fact or omit to state a material fact that is necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
4. [D.R. HORTON]Except as disclosed in the Preliminary Official Statement, there are no material loans that are outstanding and unpaid, and no material lines of credit of the Developer or its Affiliates, which are secured by an interest in the Property. Except as disclosed in the Preliminary Official Statement, to the Actual Knowledge of the Undersigned, the Developer and its Affiliates are not in breach of or in default under any applicable judgment or decree or any loan agreement, option agreement, development agreement, inden ture, fiscal agent agreement, bond or note to which the Developer or its Affiliates are a party or otherwise subject, which breach or default could reasonably be expected to materially and adversely affect the Developer’s ability to develop the Property as described in the Preliminary Official Statement or to pay the Special Taxes due with respect to the Property (to the extent the responsibility of the Developer) prior to delinquency.
5. To the Actual Knowledge of the Undersigned, the Developer is not awar e that any of the Property has a current liability with respect to the presence of a substance that is presently classified as hazardous under the federal Comprehensive Environmental Response, Compensation and Liability Act of 1980 or applicable State law or is adversely affected by the presence of endangered or threatened species or habitat for endangered or threatened species.
6. The Developer covenants that, while the Bonds or any refunding obligations related thereto are outstanding, the Developer and its Affiliates which it controls will not bring any action, suit, proceeding, inquiry or investigation at law or in equity, before any court, regulatory agency, public board or body, that in any way seeks to challenge or overturn the formation of the Improvement Area, to challenge the adoption of the Ordinance, to invalidate the Improvement Area
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or any of the Bonds or any refunding b onds related thereto, or to invalidate the Special Tax liens imposed under the Law based on recordation of the notices of Special Tax lien relating thereto. The foregoing covenant shall not prevent the Developer in any way from bringing any other action, suit or proceeding including, without limitation: (a) an action or suit contending that the Special Tax has not been levied in accordance with the methodologies that are contained in the Rate and Method (as such term is defined in the Fiscal Agent Agreemen t) pursuant to which the Special Taxes are levied ; (b) an action or suit with respect to the application or use of the Special Taxes levied and collected ; or (c) an action or suit to enforce the obligations of the City and/or the Community Facilities District under the District Resolutions, the Fiscal Agent Agreement or any other agreements among the Developer or an Affiliate , the City and/or the Community Facilities District or to which the Developer or an Affiliate is a beneficiary or a party.
7. The Developer consents to the issuance of the Bonds. The Developer acknowledges and agrees that the proceeds of the Bonds are expected to be used as described in the Preliminary Official Statement.
8. The Developer intends to comply with the provision of the Law relating to the notice of Special Tax described in California Government Code Section 53341.5 in connection with the sale of the Property, or portions thereof.
9. If between the date hereof and the Closing Date any event relating to or affecting the Developer or ownership of the Property shall occur of which the Developer has actual knowledge which would cause the information under the captions of the Preliminary Official Statement that are described in Paragraph 4 (and subject to the limitations and exclus ions contained in Paragraph 4) hereof to contain an untrue statement of a material fact or to omit to state a material fact that is necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, the Developer shall notify the City and the Unde rwriter. If in the reasonable opinion of counsel to the City or the Underwriter such event requires the preparation and publication of a supplement or amendment to the Preliminary Official Statement, the Develop er shall reasonably cooperate with the City in the preparation of an amendment or supplement to the Preliminary Official Statement in form and substance that is reasonably satisfactory to counsel to the City and to the Underwriter.
10. The Developer agrees to deliver a Closing Certificate dated the date of issuance of the Bonds at the time of issuance of the Bonds in substantially the form attached as Appendix 1.
11. On behalf of the Developer, I have reviewed the contents of this Letter of Representations and have met with counsel to the Developer for the purpose of discussing the meaning of the contents of this Letter of Representations. The Developer acknowledges and understands that a variety of state and federal securities laws, including, but not limi ted to the Securities Act of 1933, as amended, and Rule 10b -5 promulgated under the Securities Exchange Act of 1934, as amended, may apply to the Developer and that under some circumstances, certification as to the matters set forth in this Letter of Repre sentations, without additional disclosures or other action, may not fully discharge all duties and obligations of the Developer under such securities laws. [Remainder of page intentionally blank; Signature page follows]
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The undersigned has executed this Letter of Representations solely in the undersigned’s capacity as an officer or representative of the Developer and the undersigned will have no personal liability arising from or relating to this Letter of Representations . Any liability that arises from or relates to this Letter of Representations may only be asserted against the Developer. [RANCHO TOLENAS CORPORATION,
a California corporation
By: __________________________________
Name: __________________________________
Title: __________________________________
[D.R. HORTON BAY, INC., a Delaware corporation
By: __________________________________
Name: __________________________________
Title: __________________________________
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APPENDIX 1 to EXHIBIT C
IMPROVEMENT AREA B OF THE CITY OF FAIRFIELD
COMMUNITY FACILITIES DISTRICT NO. 2016-1 (VILLAGES AT FAIRFIELD) SPECIAL TAX BONDS, SERIES 2025A
CLOSING CERTIFICATE OF
[RANCHO TOLENAS CORPORATION] [D.R. HORTON BAY, INC.]
April __, 2025
City of Fairfield
1000 Webster Street
Fairfield, California 94533
City of Fairfield Community Facilities District No. 2016-1 (Villages at Fairfield) 1000 Webster Street
Fairfield, California 94533
Stifel, Nicolaus & Company, Incorporated
One Montgomery Street, 35th Floor
San Francisco, California 94104
Ladies and Gentlemen:
Reference is made to the Improvement Area B of the City of Fairfield Community Facilities District No. 2016-1 (Villages at Fairfield) Special Tax Bonds, Series 2025A (the “Bonds”) and to the Bond Purchase Agreement, dated ___________, 2025 (the “Purchase Agreement”), by and between the City of Fairfield and Stifel, Nicolaus & Company, Incorporated, entered into in connection therewith. This Closing Certificate of [Rancho Tolenas Corporation] [D.R. Horton BAY, Inc.] (the “Closing Certificate”) is delivered by [Rancho Tolenas Corporation, a California corporation] [D.R.
Horton BAY, Inc., a Delaware corporation ] (the “Developer”), pursuant to the Purchase Agreement.
Capitalized terms that are used herein and not otherwise defined have the meanings ascribed to them in the Letter of Representations of [Rancho Tolenas Corp oration, a California corporation] [D.R.
Horton BAY, Inc., a Delaware corporation ] dated ___________, 2025 (the “ Letter of Representations”), delivered by the Developer.
The undersigned certifies that the undersigned is familiar with the facts herein certified and is authorized and qualified to certify the same as an authorized officer or representative of the Developer. The undersigned, on behalf of the Developer, further certifies as follows:
1. The Developer has received the final Official Statement dated ___________, 2025 relating to the Bonds (the “ Final Official Statement ”). To the Actual Knowledge of th e Undersigned, each statement, representation and warranty that was made in the Letter of Representations is true and correct in all material respects on and as of the date hereof with the same effect as if made on the date hereof, except that all referenc es therein to the Preliminary Official Statement shall be deemed to be references to the Final Official Statement.
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2. To the Actual Knowledge of the Undersigned, no event has occurred since the date of the Preliminary Official Statement which affects the statements and information that are described in Paragraph 4 of the Letter of Representations (and subject to the limitations and exclusions contained in Paragraph 4 of the Letter of Representations) relating to the Developer, its ownership of the Property, the Developer’s development plan, the Developer’s financing plan and contractual arrangements of the Developer which should be disclosed in the Final Official Statement for the purposes for which it is to be used in order to make such statements and infor mation that are contained in the Final Official Statement not misleading in any material respect.
3. For the period through 25 days after the “ end of the underwriting period” (as such term is defined in the Purchase Agreement), if any event that relates to or affects the Developer or its ownership of the Property shall occur as a result of which it is necessary, in the opinion of the Underwriter or counsel to the City, to amend or supplement the Final Official Statement in order to make the information under the captions of the Final O fficial Statement that are described in Paragraph 4 of the Letter of Representations (and subject to the limitations and exclusions contained in Paragraph 4 of the Letter o f Representations) not misleading , in the light of the circumstances under which they were made , the Developer shall reasonably cooperate with the City and the Underwriter in the preparation of an amendment or supplement to the information described in the captions of the Final O fficial Statement that are described in Paragraph 4 of the Letter of Representations (and subject to the limitations and exclusions contained in Paragraph 4 of the Letter of Representations). Such amendment or supplement shall be in form and substance satisfactory to the Underwriter and counsel to the Community Facilities District and shall amend or supplement the Final Official Statement so that it will not contain an untrue statement of a material fact or omit to state a material f act that is necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. [Remainder of page intentionally blank; Signature page follows]
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4. The undersigned has executed this Closing C ertificate solely in the undersigned’s capacity as an officer or representative of the Developer and the undersigned will have no personal liability arising from or relating to this Closing Certificate. Any liability that arises from or relates to this Closing Certificate may only be asserted against the Developer. [RANCHO TOLENAS CORPORATION,
a California corporation
By: __________________________________
Name: __________________________________
Title: __________________________________
[D.R. HORTON BAY, INC., a Delaware corporation
By: __________________________________
Name: __________________________________
Title: __________________________________
D-1
4909-5566-5704v2/029999-0000
EXHIBIT D
$___________
IMPROVEMENT AREA B OF THE CITY OF FAIRFIELD
COMMUNITY FACILITIES DISTRICT NO. 2016-1 (VILLAGES AT FAIRFIELD) SPECIAL TAX BONDS, SERIES 2025A
UNDERWRITER’S CERTIFICATE
The undersigned, on behalf of Stifel, Nicolaus & Company, Incorporated (the “Underwriter”), hereby certifies as set forth below with respect to the sale and issuance of the above-captioned bonds (the “Bonds”).
1. Sale of the General Rule Maturities . As of the date of this certificate, for each Maturity of the General Rule Maturities, the first price at which at least 10% of such Maturity was sold to the Public is the respective price listed in Schedule A.
2. Initial Offering Price of the Hold-the-Offering-Price Maturities. (a) The Underwriter offered the Hold -the-Offering-Price Maturities to the Public for purchase at the respective initial offering prices listed in Schedule I (the “ Initial Offering Prices ”) on or before the Sale Date. A copy of the pricing wire or equivalent communication for the Bonds is attached to this certificate as Schedule II.
(b) As set forth in the Bond Purchase Contract, dated ___________, 2025 , by and between the Underwriter and the Issuer, the Underwriter has agreed in writing that: (i) for each Maturity of the Hold -the-Offering-Price Maturities, it would neither offer nor sell any of the Bonds of such Maturity to any person at a price that is higher than the Initial Offering Price for such Maturity during the Holding Period for such Maturity (the “ hold-the-offering-price rule ”); and (ii) any selling group agreement shall contain the agreement of each dealer who is a member of the selling group, and any retail distribution agreement shall contain the agreement of each broker-dealer who is a party to the retail distribution agreement, to comply with the hold -the-offering-price rule.
Pursuant to such agreement, no Underwriter (as defined below) has offered or sold any Maturity of the H old-the-Offering-Price Maturities at a price that is higher than the respective Initial Offering Price for that Maturity of the Bonds during the Holding Period.
3. Defined Terms.
(a) General Rule Maturities means those Maturities of the Bonds listed in Schedule I hereto as the “General Rule Maturities.”
(b) Hold-the-Offering-Price Maturities means those Maturities of the Bonds listed in Schedule I hereto as the “Hold-the-Offering-Price Maturities.” (c) Holding Period means, with respect to a Hold-the-Offering-Price Maturity, the period starting on the Sale Date and ending on the earlier of (i) the close of the fifth business day after ___________, 2025 (the Sale Date ), or (ii) the date on which the Underwrite r has sold at least 10% of such Hold -the-Offering-Price Maturity to the Public at prices that are no higher than the Initial Offering Price for such Hold-the-Offering-Price Maturity.
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(d) Issuer means the City of Fairfield, California, for and on behalf of City of Fairfield Community Facilities District No. 2016-1 (Villages at Fairfield). (e) Maturity means Bonds with the same credit and payment terms. Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest ra tes, are treated as separate maturities.
(f) Public means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a related party to an Underwriter.
The term “related party” for p urposes of this certificate generally means any two or more persons who have greater than 50 percent common ownership, directly or indirectly. (g) Sale Date means the first day on which there is a binding contract in writing for the sale of a Maturity of the Bonds. The Sale Date of the Bonds is ___________, 2025. (h) Underwriter means: (i) any person that agrees pursuant to a written contract with the Issuer (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public; and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (i) of this paragraph to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the Public).
The representations set forth in this certificate are limited to factual matters only. Nothing in this certificate represents the Underwriter’s interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The undersigned understands that the foregoing information will be relied upon by the Issuer with respect to certain of the representations set forth in the Tax Certificate and with respect to compliance with the federal income tax rules affecting the Bonds, and by Jones Hall, A Professional Law Corporation, as Bond Counsel, in connection with rendering their opinion that the interest on the Bonds is excluded from gross income for federal income tax purposes, the preparation of the Internal Revenue Service Form 8038 -G, and other federal income tax advice that it may give to the Issue r from time to time relating to the Bonds.
STIFEL, NICOLAUS & COMPANY,
INCORPORATED
By:
Name:
By:
Name:
Dated: April __, 2025
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Schedule I
SALE PRICES OF THE GENERAL RULE MATURITIES AND INITIAL OFFERING
PRICES OF THE HOLD-THE-OFFERING-PRICE MATURITIES
(Attached)
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Schedule II
PRICING WIRE OR EQUIVALENT COMMUNICATION
(Attached)
Agenda Draft
FIRST SUPPLEMENT TO FISCAL AGENT AGREEMENT
by and between the
CITY OF FAIRFIELD
and
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,
as Fiscal Agent
Dated as of April 1, 2025
RELATING TO
$[PRINCIPAL AMOUNT]
IMPROVEMENT AREA B OF THE
CITY OF FAIRFIELD
COMMUNITY FACILITIES DISTRICT NO. 2016-1 (VILLAGES AT FAIRFIELD) SPECIAL TAX BONDS, SERIES 2025A
- i -
FIRST SUPPLEMENT TO FISCAL AGENT AGREEMENT
TABLE OF CONTENTS
Section 1. Authorization ................................................................................................................. 3 Section 2. Equal Security ............................................................................................................... 3 Section 3. Supplement to Master Fiscal Agent Agreement ........................................................... 3
ARTICLE X
DEFINITIONS; AUTHORIZATION AND PURPOSE OF 2025A
BONDS; EQUAL SECURITY
Section 10.01. Definitions ..................................................................................................................... 3 Section 10.02. Rules of Construction .................................................................................................... 4
ARTICLE XI
TERMS OF 2025A Bonds
Section 11.01. General. ........................................................................................................................ 5 Section 11.02. Other Terms of the 2025A Bonds. ................................................................................ 6 Section 11.03. Redemption of 2025A Bonds. ....................................................................................... 7 Section 11.04. Continuing Disclosure ................................................................................................... 9 Section 11.05. Private Activity Bond Limitations ................................................................................... 9 Section 11.06. Federal Guarantee Prohibition ...................................................................................... 9 Section 11.07. Rebate Requirement ..................................................................................................... 9 Section 11.08. No Arbitrage ................................................................................................................ 10 Section 11.09. Yield of the 2025A Bonds ........................................................................................... 10 Section 11.10. Maintenance of Tax-Exemption .................................................................................. 10 Section 11.11. Record Retention ........................................................................................................ 10 Section 11.12. Compliance with Tax Certificate ................................................................................. 10
ARTICLE XII
ISSUE OF 2025A BONDS
Section 12.01. Issuance of 2025A Bonds ........................................................................................... 11 Section 12.02. Application of Proceeds of Sale of 2025A Bonds ....................................................... 11 Section 12.03. 2025 Costs of Issuance Fund ..................................................................................... 12 Section 12.04. 2025 Improvement Account ........................................................................................ 12 Section 4. Reserved ..................................................................................................................... 14 Section 5. Attachment of Exhibit E ............................................................................................... 14 Section 6. Attachment of Exhibit F ............................................................................................... 14 Section 7. Limitation on Principal Amount of Parity Bonds .......................................................... 14 Section 8. Applicable Law ............................................................................................................ 14 Section 9. Conflict with Act ........................................................................................................... 14 Section 10. Conclusive Evidence of Regularity ............................................................................. 14 Section 11. Confirmation of Master Fiscal Agent Agreement; Conflict With Master Fiscal Agent Agreement ................................................................................................... 14 Section 12. Electronic Signatures .................................................................................................. 14 Section 13. Counterparts ............................................................................................................... 15
APPENDIX 1 EXHIBIT E - FORM OF SERIES 2025A BONDS
APPENDIX 2 EXHIBIT F - OFFICER’S CERTIFICATE REQUESTING DISBURSEMENT FROM 2025A COSTS OF ISSUANCE FUND
1 FIRST SUPPLEMENT TO FISCAL AGENT AGREEMENT
THIS FIRST SUPPLEMENT TO FISCAL AGENT AGREEMENT, dated as of April 1, 2025 (the “ First Supplement to Fiscal Agent Agreement ”), by and between the CITY OF FAIRFIELD, a general law city organized and existing under and by virtue of the Constitution and laws of the State of California (the “ City”) for and on behalf of the "City of Fairfield Community Facilities District No. 2016-1 (Villages at Fairfield) " (the “CFD”) with respect to its “Improvement Area B of the City of Fairfield Community Facilities District No. 2016-1 (Villages at Fairfield)" (the “ Improvement Area B”), and THE BANK OF NE W YORK MELLON TRUST COMPANY, N.A., a national banking association duly organized and existing under the laws of the United States of America with a corporate trust office located in San Francisco, California, as fiscal agent (the “Fiscal Agent”);
W I T N E S S E T H :
WHEREAS, the City Council of the City (the “ City Council ”) previously conducted proceedings under and pursuant to the Mello -Roos Community Facilities Act of 1982, as amended, Chapter 2.5 of Part 1 of Division 2 of Title 5 (commencing with Section 53311) of the California Government Code (the “Act”), to form the CFD and Improvement Area B, to authorize the levy of special taxes (" Special Taxes") upon the land within Improvement Area B and to issue bonds secured by the Special Taxes for financing certain public improvements (“Facilities”), all as described in those proceedings; and
WHEREAS, pursuant to Resolution No. 2019-179, and a Fiscal Agent Agreement, dated as of August 1, 2019 (the “ Master Fiscal Agent Agreement ”; as supplemented, the “Agreement”), the City previously issued the Improvement Area B of the City of Fairfield Community Facilities District No. 2016-1 (Villages at Fairfield) Special Tax Bonds, Series 2019A, in the initial principal amount of $19,865,000 (the “2019A Bonds”); and
WHEREAS, the City wishes to provide for the issuance of a series of Parity Bonds and Related Parity Bonds (as defined in the Master Fiscal Agent Agreement) on behalf of the CFD with respect to Improvement Area B under Section 3.06 of the Master Fiscal Agent Agreement for the purpose of paying for the costs of acquiring and constructing the Facilities, which Parity Bonds shall be entitled “Improvement Area B of the City of Fairfield Community Facilities District No. 2016-1 (Villages at Fairfield) Special Tax Bonds, Series 2025A” (the “2025A Bonds”); and
WHEREAS, Section 8.01 (B)(v) of the Master Fiscal Agent Agreement provides that the Master Fiscal Agent Agreement and the rights and obligations of the City and of the Owners may be modified or amended at any time by a Supplemental Agreement in connection with the issuance of Parity Bonds, without the consent of any Owners, but with the written consent of the Fiscal Agent, after the Fiscal Agent has been furnished an opinion of counsel that the amendment complies with the provisions of Section 8.01 of the Master Fiscal Agent Agreement; and
WHEREAS, the Fiscal Agent has received an opinion of counsel that this First Supplement to Fiscal Agent Agreement, to the extent it amends the Master Fiscal Agent
2 Agreement as described in the preceding Whereas clause, complies with Section 8.01 of the Master Fiscal Agent Agreement; and
WHEREAS, on March 18, 2025 , the City Council adopted Resolution No. __________ (the “Resolution”) authorizing the issuance of the 2025A Bonds for and on behalf of the CFD with respect to Improvement Area B; and
WHEREAS, in order to provide for the authentication and delivery of the 2025A Bonds, to establish and declare the terms and conditions upon which the 2025A Bonds are to be issued and to secure the 2025A Bonds by a lien and charge upon the Special Taxes and the respective funds and accounts established under the Master Fiscal Agent Agreement equal to and on a parity with the lien and charge securing the outstanding 2019A Bond s, the City Council has authorized the execution and delivery of this First Supplement to Fiscal Agent Agreement; and
WHEREAS, it is in the public interest and for the benefit of the City, the CFD and the persons responsible for the payment of special taxes that the City enter into this First Supplement to Fiscal Agent Agreement to provide for the issuance of the 2025A Bond s hereunder to finance the acquisition and construction of facilities for the CFD and to provide for the disbursement of Proceeds of the 2025A Bonds, the disposition of the special taxes securing the 2025A Bonds and the administration and payment of the 2025A Bonds; and
WHEREAS, the City has determined that all acts and proceedings required by law and the Master Fiscal Agent Agreement necessary to make the 2025A Bonds, when executed by the City, authenticated and delivered by the Fiscal Agent and duly issued, the valid, binding and legal special obligations of the City , and to constitute this First Supplement to Fiscal Agent Agreement a valid and binding agreement for the uses and purposes herein set forth, in accordance with its terms, have been done and taken; and the execution and delivery of this First Supplement to Fiscal Agent Agreement have been in all respects duly authorized;
NOW, THEREFORE, in consideration of the covenants and provisions herein set forth and for other valuable consideration the receipt and sufficiency of which is hereby acknowledged, the parties hereto do hereby agree as follows:
3 Section 1. Authorization. Each of the parties represents and warrants that it has full legal authority and is duly empowered to enter into this First Supplement to Fiscal Agent Agreement and has taken all actions necess ary to authorize the execution of this First Supplement to Fiscal Agent Agreement by the officers and persons signing it.
Section 2. Equal Security. As Parity Bonds issued pursuant to Section 3.06 of the Master Fiscal Agent Agreement, the 2025A Bonds shall be secured by a lien and charge upon the Special Tax Revenues and all moneys deposited in the Bond Fund (including the Special Tax Prepayments Account), and, until disbursed as provided in the Fiscal Agent Agree ment, in the Special Tax Fund equal to and on a parity with the lien and charge securing the outstanding 2019A Bonds.
In addition, as Related Parity Bonds, the 2025A Bonds shall be secured by a first pledge of all moneys deposited in the 2019 Reserve Fund . The moneys in the 2019 Reserve Fund (except as otherwise provided herein) are hereby dedicated to the payment of the principal of, and interest and any premium on, the 2019A Bonds, the 2025A Bonds and all Related Parity Bonds as provided in the Agreement and in the Act until all of the 2019A Bonds, the 2025A Bonds and all Related Parity Bonds have been paid and retired or until moneys or Federal Securities have been set aside irrevocably for that purpose under Section 9.03.
In addition, the 2025A Bonds shall be secured by a first pledge of all moneys deposited in the 2025 Capitalized Interest Account.
Section 3. Supplement to Master Fiscal Agent Agreement . In accordance with the provisions of Section 8.01(v) of the Master Fiscal Agent Agreement , the Master Fiscal Agent Agreement is hereby amended by adding a supplement thereto consisting of new article s to be designated as Article X, XI and XII. Such Articles shall read in their entirety as follows:
ARTICLE X
DEFINITIONS; AUTHORIZATION AND PURPOSE OF 2025A BONDS; EQUAL
SECURITY
Section 10.01. Definitions. Unless the context otherwise requires, the terms defined in this Section 10.01 shall, for all purposes of Articles X, XI and XII and for other purposes of th is Agreement, to the extent applicable , have the respective meanings specified in this Section 10.01. All terms used in Articles X, XI and XII and not otherwise defined in this Section 10.01 shall have the respective meanings given to such terms in Section 1.03 of the Agreement.
“Interest Payment Date” for the 2025A Bond s means March 1 and September 1 of each year, commencing September 1, 2025.
“Original Purchaser” and “Participating Underwriter” means Stifel, Nicolaus & Company, Incorporated, as the first purchaser of the 2025A Bonds from the City.
“2019A Bond s” means the Improvement Area B of the City of Fairfield Community Facilities District No. 2016-1 (Villages at Fairfield) Special Tax Bonds, Series 2019A.
4 “2025 Capitalized Interest Account ” means the account within the Bond Fund designated the “ 2025 Capitalized Interest Account ” which fund is established pursuant to Section 12.02.
“2025 Closing Date” means the date of initial issuance and delivery of the 2025A Bonds hereunder.
“2025 Costs of Issuance Fund ” means the fund designated the “ 2025 Costs of Issuance Fund” which fund is established pursuant to Section 12.03.
“2025 Improvement Account” means the account within the Improvement Fund designated the “ 2025 Improvement Account” which fu nd is established pursuant to Section 12.04.
“2025A Bonds ” means the Bonds so designated and authorized to be issued under Section 11.01 hereof.
“2025A Term Bonds” means the 2025A Bond s maturing on September 1, ____, September 1, ____ and September 1, ___.
Section 10.02. Rules of Construction . All references herein to “Articles,” “Sections” and other subdivisions are to the corresponding Articles, Sections or subdivisions of the Agreement, and the words “herein,” “hereof,” “hereunder” and other words of similar import refer to the Agreement as a whole and not to any particular Article, Section or subdivision hereof.
5 ARTICLE XI
TERMS OF 2025A BONDS
Section 11.01. General.
(A) Principal Amount; Designation. The 2025A Bonds in the aggregate principal amount of $[Principal Amount] are hereby authorized to be issued by the City under and subject to the Resolution of Issuance, the Act, other applicable laws of the State of California and the terms of the Agreement.
The 2025A Bonds shall be designated the “ Improvement Area B of the City of Fairfield Community Facilities District No. 2016-1 (Villages at Fairfield) Special Tax Bonds, Series 2025A”.
(B) Maturity Dates; Interest Rates. The 2025A Bond s shall be dated the 2025 Closing Date, and shall mature on the dates and in the principal amounts and shall bear interest at the rates per annum set forth in the following schedule:
Maturity
(September 1)
Principal
Amount
Interest
Rate
(T)=2025A Term Bond
(C) Form; Denominations; Authentication. The 2025A Bonds shall be issued as fully registered Bonds without coupons. The 2025A Bonds shall be lettered and numbered in a customary manner as determined by the Fiscal Agent. The 2025A Bonds shall be issued in the denominations of $5,000 or any integral multiple in excess thereof.
The 2025A Bonds, the Fiscal Agent’s certificate of authentication and the assignment, to appear thereon, shall be substantially in the forms, respectively, set forth in Exhibit E-1 attached hereto and by this reference incorpora ted herein, with necessary or appropriate variations, omissions and insertions, as permitted or required by this Agreement, the Resolution and the Act.
6 (D) CUSIP Identification Numbers . “CUSIP” identification numbers may, at the election of the Original P urchaser of the 2025A Bonds, be imprinted on the 2025A Bonds, but such numbers shall not constitute a part of the contract evidenced by the 2025A Bonds and any error or omission with respect thereto shall not constitute cause for refusal of any purchaser t o accept delivery of and pay for the 2025A Bonds. In addition, failure on the part of the City or the Fiscal Agent to use such CUSIP numbers in any notice to Owners shall not constitute an event of default or any violation of the City’s contract with such Owners and shall not impair the effectiveness of any such notice.
(E) Interest. The 2025A Bonds shall bear interest at the rates set forth above payable on the Interest Payment Dates in each year. Interest on all 2025A Bonds shall be calculated on the basis of a 360 -day year composed of twelve 30 -day months. Each 2025A Bond shall bear interest from the Interest Payment Date next preceding the date of authentication thereof unless
(i) it is authenticated on an Interest Payment Date, in which event it shall bear interest from such date of authentication, or
(ii) it is authenticated prior to an Interest Payment Date and after the close of business on the Record Date preceding such Interest Payment Date, in which event it shall bear interest from such Interest Payment Date, or
(iii) it is authenticated on or before the Record Date preceding the first Interest Payment Date, in which event it shall bear interest from the Dated Date;
provided, however, that if at the time of authentication of a 2025A B ond, interest is in default thereon, such 2025A Bond shall bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment thereon.
(F) Method of Payment . Interest on the 2025A Bonds (including the fi nal interest payment upon maturity or earlier redemption), is payable on the applicable Interest Payment Date by check of the Fiscal Agent mailed by first class mail to the registered Owner thereof at such registered Owner’s address as it appears on the re gistration books maintained by the Fiscal Agent at the close of business on the Record Date preceding the Interest Payment Date, or by wire transfer to an account located in the United States of America made on such Interest Payment Date upon written instr uctions of any Owner of $1,000,000 or more in aggregate principal amount of Bonds delivered to the Fiscal Agent prior to the applicable Record Date, which instructions shall continue in effect until revoked in writing, or until such 2025A Bonds are transferred to a new Owner.
The principal of and any interest and premium on the 2025A Bonds are payable in lawful money of the United States of America upon surrender of the Bonds at the Principal Office of the Fiscal Agent. All 2025A Bonds paid by the Fiscal Agent pursuant to this Section shall be canceled by the Fiscal Agent. The Fiscal Agent shall destroy the canceled 2025A Bonds and, upon request of the City, issue a certificate of destruction of such Bonds to the City.
Section 11.02. Other Terms of the Bonds . Except as otherwise set forth in this Article XI, Sections 2.05-2.10 shall govern the 2025A Bonds.
7 Section 11.03. Redemption of 2025A Bonds.
(A) Redemption Provisions.
(i) Optional Redemption . The 2025A Bond s maturing on or before September 1, _____ are not subject to optional redemption prior to their stated maturity.
The 2025A Bonds maturing on or after September 1, _____, are subject to redemption, as a whole or in part at the election of the City among maturities on such basis as designated by the City and by lot within a maturity, at the option of the City, on September 1, _____, and on any date thereafter, at a redemption price equal to 100% of the principal amount of 2025A Bonds to be redeemed, together with accrued interest thereon to the date fixed for redemption, without premium.
(ii) Mandatory Sinking Fund Redemption . The 2025A Term Bond maturing on September 1, ____, is subject to mandatory redemption in part by lot, from sinking fund payments made by the City from the Bond Fund, at a redemption price equal to the principal amount thereof to be redeemed, plus accrued interest to the redemption date, without premi um, in the aggregate respective principal amounts all as set forth in the following table:
Sinking Fund
Redemption Date
(September 1)
Sinking Fund
Payments
* Maturity
The 2025A Term Bond maturing on September 1, ____, is subject to mandatory redemption in part by lot, from sinking fund payments made by the City from the Bond Fund, at a redemption price equal to the principal amount thereof to be redeemed, without premium, in the aggregate respective principal amounts all as set forth in the following table:
Sinking Fund
Redemption Date
(September 1)
Sinking Fund
Payments
* Maturity
The 2025A Term Bond maturing on September 1, ____, is subject to mandatory redemption in part by lot, from sinking fund payments made by the City from the Bond Fund, at a redemption price equal to the principal amount thereof to be redeemed,
8 without premium, in the aggregate respective principal amounts all as set forth in the following table:
Sinking Fund
Redemption Date
(September 1)
Sinking Fund
Payments
* Maturity
Provided, however, if some but not all of the 2025A Term Bonds of a given maturity have been redeemed under subsection (i) above or subsection (iii) below, the total amount of all future Sinking Fund Payments relating to such maturity shall be reduced by the aggregate principal amount of 2025A Term Bonds of such maturity s o redeemed, to be allocated among such Sinking Fund Payments on a pro rata basis in integral multiples of $5,000 as determined by the City, notice of which shall be given by the City to the Fiscal Agent and the notice shall include a revised sinking fund schedule.
(iii) Redemption from Special Tax Prepayments. Special Tax Prepayments and any corresponding transfers from the 2019 Reserve Fund pursuant to Section
4.03(F) shall be used to redeem 2025A Bonds on the next Interest Payment Date for which notice o f redemption can timely be given under Section 11.03(D), among series and maturities as provided in Section 2.03(D)(iii), at a redemption price (expressed as a percentage of the principal amount of the 2025A Bonds to be redeemed), as set forth below, together with accrued interest to the date fixed for redemption:
Redemption Dates
Redemption
Price
Any Interest Payment Date on or before March 1, ____
September 1, ____ and March 1, ____
September 1, ____ and March 1, ____
September 1, ____ and any Interest Payment Date thereafter
(B) Notice to Fiscal Agent. The City shall give the Fiscal Agent written notice of its intention to redeem Bonds under subsection (A)(i) and (A)(iii) not less than 45 days prior to the applicable redemption date or such lesser number of days as shall be authorized by the Fiscal Agent.
(C) Purchase of Bonds in Lieu of Redemption . In lieu of redemption under Section 11.03(A), moneys in the Bond Fund may be used and withdrawn by the Fiscal Agent for purchase of Outstandin g 2025A Bonds, upon the filing with the Fiscal Agent of an Officer’s Certificate requesting such purchase, at public or private sale as and when, and at such prices (including brokerage and other charges) as such Officer’s Certificate may provide, but in n o event may 2025A Bonds be purchased at a price in excess of the principal amount thereof, plus interest accrued to the date of purchase and any premium which would otherwise be due if such 2025A Bonds were to be redeemed in accordance with this Agreement. Any 2025A Bond s
9 purchased pursuant to this Section 11.03(C) shall be treated as outstanding 2025A Bond s under this Fiscal Agent Agreement, except to the extent otherwise directed by the Finance Director.
(D) Redemption Procedure by Fiscal Agent . The procedure set forth in Section
2.03(D) shall govern the redemption of the 2025A Bonds.
(E) Effect of Redemption . From and after the date fixed for redemption, if funds available for the payment of the principal of, and interest and any premium on, the 2025A Bonds so called for redemption shall have been deposited in the Bond Fund, such 2025A Bonds so called shall cease to be entitled to any benefit under this Agreement other than the right to receive payment of the redemption price, and no interest shall a ccrue thereon on or after the redemption date specified in the notice of redemption. All 2025A Bonds redeemed and purchased by the Fiscal Agent under this Section 11.03 shall be canceled by the Fiscal Agent.
The Fiscal Agent shall destroy the canceled 2025A Bonds in accordance with the Fiscal Agent’s retention policy then in effect.
Section 11.04. Continuing Disclosure. The City hereby covenants and agrees that it will comply with and carry out all of t he provisions of the Continuing Disclosure Certificate executed by the City on the 2025 Closing Date relating to the 2025A Bonds. Notwithstanding any other provision of the Master Fiscal Agent Agreement or this First Supplement to Fiscal Agent Agreement, failure of the City to comply with the Continuing Disclosure Certificate shall not be considered an Event of Default; however, the Fiscal Agent shall, at the request of any Participating Underwriter or the holders of at least 25% a ggregate principal amount of Outstanding 2025A Bonds, and upon receipt of indemnity satisfactory to the Fiscal Agent, or any holder or beneficial owner of the 2025A Bond s may, take such actions as may be necessary and appropriate to compel performance, inc luding seeking mandate or specific performance by court order.
Section 11.05. Private Activity Bond Limitations . The City shall assure that the proceeds of the 2025A Bond s are not so used a s to cause the 2025A Bond s to satisfy the private business tests of Section 141(b) of the Tax Code or the private loan financing test of Section 141(c) of the Tax Code.
Section 11.06. Federal Guarantee Prohibition. The City shall not take any action or permit or suffer any action to be taken if the result of the same would be to cause the 2025A Bonds to be “federally guaranteed” within the meaning of Section 149(b) of the Tax Code.
Section 11.07. Rebate Requirement. The City shall take any and all actions necessary to assure compliance with Section 148(f) of the Tax Code, relating to the rebate of excess investment earnings, if any, to the federal government, to the extent that such section is applicable to the 2025A Bond s. The Finance Director shall take note of any investment of monies hereunder in excess of the yield on the 2025A Bonds, and shall take such actions as are necessary to ensure compl iance with this Section 11.07, such as increasing the portion of the Special Tax levy for Administrative Expenses as appropriate to have funds available in the Administrative Expense Fund to satisfy any rebate liability under this Section. If necessary to satisfy its obligations under this Section 11.07, the City may use:
(A) Amounts in the 2019 Reserve Fund if the amount on deposit in the 2019 Reserve Fund, following the proposed transfer, is at least equal to the 2019 Reserve Requirement, and
10 amounts in any other reserve account for Parity Bonds that are not Related Parity Bonds to the extent permitted by the Supplemental Agreement;
(B) Amounts on deposit in the Administrative Expense Fund; and
(C) Any other funds available to the City, including am ounts advanced by the City, in its sole discretion, to be repaid as soon as practicable from amounts described in the preceding clauses (A) and (B).
Section 11.08. No Arbitrage. The City shall not take, or permit or suffer to be taken by the Fiscal Agent or otherwise, any action with respect to the proceeds of the 2025A Bond s which, if such action had been reasonably expected to have been taken, or had been deliberately and intentionally taken, on the date of is suance of the 2025A Bonds would have caused the 2025A Bonds to be “arbitrage bonds” within the meaning of Section 148 of the Tax Code.
Section 11.09. Yield of the 2025A Bond s. In determining the yield of the 2025A Bonds to comply with Sections 11.07 and 11.08, the City will take into account redemption (including premium, if any) in advance of maturity based on the reasonable expectations of the City, as of the 2025 Closing Date, regarding prepayments of Special Taxes and use of prepayments for redemption of the 2025A Bonds, without regard to whether or not prepayments are received or 2025A Bonds redeemed.
Section 11.10. Maintenance of Tax -Exemption. The City shall take all actions necessary to assure the exclusion of interest on the 2025A Bonds from the gross income of the Owners of the 2025A Bonds to the same extent as such interest is permitted to be excluded from gross income under the Tax Code as in effect on the date of issuance of the 2025A Bonds.
Section 11.11. Record Retention. The City will retain its records of all accounting and monitoring it carries out with respect to the 2025A Bonds for at least 3 years after the 2025A Bonds mature or are redeemed (whichever is earlier); however, if the 2025A Bond s are redeemed and refunded, the City will retain its records of accounting and monitoring at least 3 years after the earlier of the maturity or redemption of the obligations that refunded the 2025A Bonds.
Section 11.12. Compliance with Tax Certificate . The City will comply with the provisions of the Certificate as to Arbitrage and the Certificate Regarding Use of Proceeds with respect to the 2025A Bond s, which are incorporated herein as if fully set forth herein. The covenants of this Section will survive payment in full or defeasance of the 2025A Bonds.
11 ARTICLE XII
ISSUE OF 2025A BONDS
Section 12.01. Issuance of 2025A Bonds. Upon the execution and delivery of the First Supplement to Fiscal Agent Agreement and satisfaction of the requirements for issuance of Parity Bonds under Section 3.06, the City shall execute and deliver the 2025A Bond s in the aggregate principal amount set forth in Section 11.01 to the Fiscal Agent for authentication and delivery to the Original Purchaser thereof upon receipt by the Fiscal Agent of an Officer’s Certificate requesting authentication and delivery.
The Authorized Officers of the City are hereby authorized and directed to execute and deliver any and all documents and instruments necessary to cause the issuance of the 2025A Bonds in accordance with the provisions of the Act, the Resolution of Issuance and th is Agreement, to authorize the payment of Costs of Issuance and costs of the Project by the Fiscal Agent from the Proceeds of the 2025A Bonds and to do and cause to be done any and all acts and things necessary or convenient for the timely delivery of the 2025A Bonds to the Original Purchaser.
The Fiscal Agent is hereby authorized and directed to authenticate the 2025A Bonds and deliver them to the Original Purchaser, upon receipt of the purchase price for the 2025A Bonds.
Section 12.02. Application of Proceeds of Sale of 2025A Bonds.
The Proceeds of the 2025A Bonds received from the Original Purchaser in the amount of $_______ (which is equal to the principal amount of the 2025A Bonds, plus a net original issue premium of $_____ and less an underwriter’s discount of $_______) shall be paid to the Fiscal Agent, which shall deposit the Proceeds on the 2025 Closing Date, as follows:
(i) $________ into the 2025 Costs of Issuance Fund;
(ii) $______ into the 2019 Reserve Fund;
(iii) $_____________ into the Bond Fund maintained and administered by the Fiscal Agent in accordance with Section 4.0 4 (which shall represent capitalized interest and be deposited into a 2025 Capitalized Interest Account, which is hereby established); and
(iv) $________ into the 2025 Improvement Account to pay for Project costs.
Amounts on deposit in the 2025 Capitalized Interest Account shall be used and withdrawn by the Fiscal Agent solely for the payment of interest on the 2025A Bonds as follows:
$______ shall be used on September 1, 2025 , and any remaining amounts shall be used on March 1, 2026. When the amount in the 2025 Capitalized Interest Account is fully expended for the payment of interest, the account shall be closed.
12 Section 12.03. 2025 Costs of Issuance Fund.
(A) Establishment of 2025 Costs of Issuance Fund. The 2025 Costs of Issuance Fund is hereby established as a separate fund to be held by the Fiscal Agent, to the credit of which deposit shall be made as required by Section 12.02. Moneys in the 2025 Costs of Issuance Fund shall be held by the Fiscal Agent for the benefit of the City and shall be disbursed as provided in subsection (B) of this Section for the payment or reimbursement of Costs of Issuance attributable to the issuance of the 2025A Bonds.
(B) Disbursement. Amounts in the 2025 Costs of Issuance Fund shall be disbursed from time to time to pay Costs of Issuance attributable to the issuance of the 2025A Bonds, as set forth in a requisition substantially in the form of Exhibit G hereto, executed by the Finance Director, containing respective amounts to be paid to the designated payees and delivered to the Fiscal Agent. Each such requisition shall be sufficient evidence to the Fiscal Agent of the facts stated therein and the Fiscal Agent shall have no duty to confirm the accuracy of such facts.
(C) Investment. Moneys in the 2025 Costs of Issuance Fund shall be invested and deposited by the Fiscal Agent under Section 6.01. Interest earnings and profits resulting from such investment shall be retained by the Fiscal Agent in the 2025 Costs of Issuance Fund to be used for the purposes of such fund.
(D) Closing of Fund . The Fiscal Agent shall maintain the 2025 Costs of Issuance Fund for a period of 90 days from the 2025 Closing Date and then the Fiscal Agent shall deposit any moneys remainin g therein, including any investment earnings thereon, into the 2025 Improvement Account.
Section 12.04. 2025 Improvement Account.
(A) Establishment of the 2025 Improvement Account; Deposit. There is hereby established a separate account within the Improvement Fund to be held by the Fiscal Agent to be designated the “2025 Improvement Account,” to the credit of which deposit s shall be made as required by Section 12.02. Moneys in the 2025 Improvement Account shall be disbursed, except as otherwise provided in subsection ( D) of this Section, for the payment or reimbursement of the costs of the Project.
(B) Procedure for Disbursement . Disbursements from the 2025 Improvement Account shall be made by the F iscal Agent upon receipt of an Officer's Certificate substantially in the form of Exhibit B attached hereto which shall:
(i) set forth the amount required to be disbursed, the purpose for which the disbursement is to be made (which shall be for payment of a Project cost or to reimburse expenditures of the City or any other party for Project costs previously paid), and the person to which the disbursement is to be paid; and
(ii) certify that no portion of the amount then being requested to be disbursed was set forth in any Officers Certificate previously filed requesting disbursement.
13 Each such requisition shall be sufficient ev idence to the Fiscal Agent of the facts stated therein and the Fiscal Agent shall have no duty to confirm the accuracy of such facts.
(C) Investment. Moneys in the 2025 Improvement Account shall be invested in accordance with Section 6.01. Interest earnings and profits from such investment shall be retained in the related fund or accounts to be used for the purpose of such fund or accounts.
(D) Closing of Fund . Upon the filing of an Officer’s Certificate stating that the Project has been completed and that all costs of the Project have been paid or are not required to be paid from the Improvement Fund (including the 2025 Improvement Account), the Fiscal Agent shall transfer the amount, if any, remaining in the 2025 Improvement Account to the Bond Fund for application to Debt Service payments on the Bonds specified in the Officer’s Certificate.
14 Section 4. Reserved.
Section 5. Attachment of Exhibit E. The Master Fiscal Agent Agreement is hereby further amended by attaching thereto and incorporating therein an Exhibit E setting forth the form of the 2025A Bonds, which shall read substantially as set forth in Appendix 1 which is attached hereto and by this reference incorporated herein.
Section 6. Attachment of Exhibit F. The Master Fiscal Agent Agreement is hereby further amended by attaching thereto and incorporating therein an Exhibit F setting forth a form of requisition from the 2025 Costs of Issuance Fund, which shall read substantially as set forth in Appendix 2 which is attached hereto and by this reference incorporated herein.
Section 7. Limitation on Principal Amount of Parity Bonds . Notwithstanding the provisions of Section 5. 18 of the Master Fiscal Agent Agreement, following the issuance of the 2025A Bonds, the City will not issue more than $______ initial principal amount of Parity Bonds (exclusive of any Refunding Bonds).
Section 8. Applicable Law. This Agreement shall be governed by and enforced in accordance with the laws of the State of California applicable to contracts made and performed in the State of California.
Section 9. Conflict with Act. In the event of a conflict between any provision of this First Supplement to Fiscal Agent Agreement and any provision of the Act as in effect on the 2025 Closing Date, the provision of the Act shall prevail over the conflicting provision of this Agreement.
Section 10. Conclusive Evidence of Regularity . 2025A Bonds issued pursuant to this First Supplement to Fiscal Agent Agreement shall constitute conclusive evidence of the regularity of all proceedings under the Act relative to their issuance and the levy of the Special Taxes.
Section 11. Confirmation of Master Fiscal Agent Agreement; Conflict With Master Fiscal Agent Agreement . All representations, covenants, warranties and other provisions of the Master Fiscal Agent Agreement, unless specifically amended, modified or supplemented by this First Supplement to Fiscal Agent Agreement, are hereby confirmed as applicable to this First Supplement to Fiscal Agent Agreement. In the event of any conflict between the provisions of this First Supplement to Fiscal Agent Agreement and the Master Fiscal Agent Agreement, the provisions of this First Supplement to Fiscal Agent Agreement shall govern.
Section 12. Electronic Signatures. Any signature (including any electronic symbol or process attached to, or associated with, a contract or other record and adopted by a Person with the intent to sign, authenticate or a ccept such contract or record) hereto or to any other certificate, agreement or document related to this transaction, and any contract formation or record-keeping through electronic means shall have the same legal validity and enforceability as a manually executed signature or use of a paper -based recordkeeping system to the fullest extent permitted by applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the California Uniform Electronic Transaction Act , Government Code Section 16.5, or any similar state law, and the parties hereby waive any objection to the contrary.
15 Section 13. Counterparts. This First Supplement to Fiscal Agent Agreement may be executed in counterparts, each of which shall be deemed an original.
16 IN WITNESS WHEREOF, the City and the Fiscal Agent have caused this First Supplement to Fiscal Agent Agreement to be executed as of the date first written above.
CITY OF FAIRFIELD,
FOR AND ON BEHALF OF
CITY OF FAIRFIELD COMMUNITY FACILITIES
DISTRICT
NO. 2016-1 (VILLAGES AT FAIRFIELD)
By:
City Manager
THE BANK OF NEW YORK MELLON TRUST
COMPANY, N.A.,
as Fiscal Agent
By:
Authorized Officer
Exhibit E
APPENDIX 1
EXHIBIT E
FORM OF 2025A BOND
No. __ ***$______***
UNITED STATES OF AMERICA
STATE OF CALIFORNIA
IMPROVEMENT AREA B OF THE
CITY OF FAIRFIELD
COMMUNITY FACILITIES DISTRICT NO. 2016-1
(VILLAGES AT FAIRFIELD)
SPECIAL TAX BOND, SERIES 2025A
INTEREST RATE MATURITY DATE DATED DATE
____% September 1, ______ ___________
REGISTERED OWNER:
PRINCIPAL AMOUNT: *********DOLLARS
The City of Fairfield (the “City”) for and on behalf of the "City of Fairfield Community Facilities District No. 2016-1 (Villages at Fairfield)" (the “CFD”) with respect to its “Improvement Area B of the City of Fairfield Community Facilities District No. 2016-1 (Villages at Fairfield) " (“Improvement Area B”), for value received, hereby promises to pay solely from the Special Tax (as hereinafter defined) to be collected in Improvement Area B or amounts in certain funds and accounts held under the Agreement (as hereinafter defined), to the registered owner named above, or registered a ssigns, on the maturity date set forth above, unless redeemed prior thereto as hereinafter provided, the principal amount set forth above, and to pay interest on such principal amount from Dated Date set forth above, or from the most recent Interest Payment Date (as hereinafter defined) to which interest has been paid or duly provided for (unless this Bond is authenticated on or before an Interest Payment Date (as hereinafter defined) and after the close of business on the Record Date (as hereinafter define d) preceding such Interest Payment Date, in which event it shall bear interest from such Interest Payment Date, or unless this Bond is authenticated on or prior to August 15, 2025, in which event it shall bear interest from the Dated Date identified above, payable semiannually on each March 1 and September 1, commencing September 1, 2025 (each an “Interest Payment Date”), at the interest rate set forth above, until the principal amount hereof is paid or made available for payment provided, however, that if at the time of authentication of this Bond, interest is in default on this Bond, this Bond shall bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment.
Principal of and interest on the Bonds (including the final interest payment upon maturity or earlier redemption), is payable on the applicable Interest Payment Date by check of the
Exhibit E
Fiscal Agent (defined below) mailed by first class mail to the registered Owner thereof at such registered Owner' s address as it appears on the registration books maintained by the Fiscal Agent at the close of business on the Record Date preceding the Interest Payment Date, or by wire transfer made on such Interest Payment Date upon written instructions of any Owner of $1,000,000 or more in aggregate principal amount of Bonds delivered to the Fiscal Agent prior to the applicable Record Date. The principal of the Bonds and any premium on the Bonds are payable in lawful money of the United States of America upon surrender of the Bonds at the Principal Office of the Fiscal Agent or such other place as designated by the Fiscal Agent.
This Bond is one of a duly authorized issue of bonds in the aggregate principal amount of $[Principal Amount] approved by Resolution No. _____ of the City Council of the City , adopted on March 18, 2025 (the “Resolution”), under the Mello -Roos Community Facilities Act of 1982, as amended, sections 53311, et seq., of the California Government Code (the “Act”) for the purpose of funding certain facilities for the CFD, and is one of the series of bonds designated “Improvement Area B of the City of Fairfield Community Facilities District No. 2016-1 (Villages at Fairfield) Special Tax Bonds, Series 2025A ” (the “Bonds”). The issuance of the Bonds and the terms and conditions thereof are provided for by a Fiscal Agent Agreement, dated as of August 1, 2019, as supplemented by a First Supplement to Fiscal Agent Agreement, dated as of April 1, 2025 (as supplemented, the “Agreement”), between the City and The Bank of New York Mellon Trust Company, N.A., (the “Fiscal Agent”) and this reference incorporates the Agreement herein, and by acceptance hereof the owner of this Bond assents to said terms and conditions. The Agreement is authorized under, this Bond is issued under and both are to be construed in accordance with, the laws of the State of California.
Pursuant to the Act, the Resolution and the Agreement, the principal of and interest on this Bond are payable solely from the annual special tax authorized under the Act to be collected within Improvement Area B (the “Special Tax”) and certain funds held under the Agreement. Any tax for the payment hereof shall be limited to the Special Tax, except to the extent that provision for payment has been made by the City, as may be permitted by law. The Bonds are payable on a parity basis with the following outstanding Parity Bonds (as defined in the Agreement) : the $ 19,865,000 Improvement Area B of the City of Fairfield Community Facilities District No. 2016-1 (Villages at Fairfield) Special Tax Bonds, Series 2019A (the “2019A Bonds”). The Bonds constitute “ Related Parity Bonds” under the Agreement and are secured on a parity basis with the 2019A Bonds by a first pledge of all moneys deposited in the 2019 Reserve Fund.
The Bonds do not constitute obligations of the City for which the City is obligated to levy or pledge, or has levied or pledged, general or special taxation other than described hereinabove. Neither the faith and credit nor the taxing power of the City (except to the limited extent set forth in the Agreement) or the State of California or any political subdivision thereof is pledged to the payment of the Bonds.
Optional Redemption . The Bonds maturing on or before September 1, ____ are not subject to optional redemption prior to their stated maturity. The Bonds maturing on or after September 1, ____, are subject to redemption, as a whole or in part at the election of the City among maturities on such basis as designated by the City and by lot within a maturity, at the option of the City, on September 1, ____, and on any date thereafter, at a redemption price equal to 100% of the principal amount of Bonds to be redeemed, together with accrued i nterest thereon to the date fixed for redemption, without premium.
Exhibit E
Mandatory Sinking Fund Redemption . The Term Bond maturing on September 1, ___, is subject to mandatory redemption in part by lot, from sinking fund payments made by the City from the Bon d Fund, at a redemption price equal to the principal amount thereof to be redeemed, plus accrued interest to the redemption date, without premium, in the aggregate respective principal amounts all as set forth in the following table:
Sinking Fund
Redemption Date
(September 1)
Sinking Fund
Payments
* Maturity
The Term Bond maturing on September 1, ____, is subject to mandatory redemption in part by lot, from sinking fund payments made by the City from the Bond Fund, at a redemption price equal to the principal amount thereof to be redeemed, plus accrued interest to the redemption date, without premium, in the aggregate respective principal amounts all as set forth in the following table:
Sinking Fund
Redemption Date
(September 1)
Sinking Fund
Payments
* Maturity
The Term Bond maturing on September 1, ____, is subject to mandatory redemption in part by lot, from sinking fund payments made by the City from the Bond Fund, at a redemption price equal to the principal amount thereof to be redeemed, plus accrued interest to the redemption date, without premium, in the aggregate respective principal amounts all as set forth in the following table:
Exhibit E
Sinking Fund
Redemption Date
(September 1)
Sinking Fund
Payments
* Maturity
Provided, however, if some but not all of the Term Bonds of a given maturity have been redeemed under ”Optional Redemption” above or ”Redemption from Special Tax Prepayments” below, the total amount of all future Sinking Fund Payments relating to such matu rity shall be reduced by the aggregate principal amount of Term Bonds of such maturity so redeemed, to be allocated among such Sinking Fund Payments on a pro rata basis in integral multiples of $5,000 as determined by the City, notice of which shall be giv en by the City to the Fiscal Agent and the notice shall include a revised sinking fund schedule.
Redemption from Special Tax Prepayments . Special Tax Prepayments and any corresponding transfers from the 2019 Reserve Fund shall be used to redeem Bonds on t he next Interest Payment Date for which notice of redemption can timely be given , among series and maturities as provided in the Fiscal Agent Agreement, at a redemption price (expressed as a percentage of the principal amount of the Bonds to be redeemed), as set forth below, together with accrued interest to the date fixed for redemption:
Redemption Dates
Redemption
Price
Any Interest Payment Date on or before March 1, ____
September 1, ____and March 1, ____
September 1, ____and March 1, ____
September 1, ____and any Interest Payment Date thereafter
Under the terms of the Agreement, in the event the City pays and discharges the entire indebtedness on all or any portion on the Bonds Outstanding (as such term is defined therein) in one or more of the ways specified therein, the pledge of the Special Taxes and other funds provided for in the Agreement and all other ob ligations of the City under the Agreement with respect to such Bonds shall cease and terminate.
Notice of redemption with r espect to the Bonds to be redeemed shall be given to the registered owners thereof, in the manner, to the extent and subject to the provisions of the Agreement. The City has the right to rescind any notic e of the optional redemption of Bonds by written notice to the Fiscal Agent on or prior to the date fixed for redemption as further described in the Agreement.
Exhibit E
This Bond shall be registered in the name of the owner hereof, as to both principal and interest. Each registration and transfer of registration of this Bond shall be entered by the Fiscal Agent in books kept by it for this purpose and authenticated by its manual signature upon the certificate of authentication endorsed hereon.
No transfer or exchange hereof shall be valid for any purpose unless made by the registered owner, by execution of the form of assignment endorsed hereon, and authenticated as herein provided, and the principal hereof, interest hereon and any redemption premium shall be payable only to the registered owner or to such owner’s order. The Fiscal Agent shall require the registered owner requesting transfer or exchange to pay any tax or other governmental charge required to be paid with respect to such transfer or exchange. No transfer or exchange hereof shall be required to be m ade in the circumstances set forth in the Fiscal Agent Agreement.
The Agreement and the rights and obligations of the City thereunder may be modified or amended as set forth therein. The principal of the Bonds is not subject to acceleration upon a default under the Agreement or any other document.
This Bond shall not become valid or obligatory for any purpose until the certificate of authentication and registration hereon endorsed shall have been dated and signed by the Fiscal Agent.
IT IS HEREBY CERTIFI ED, RECITED AND DECLARED by the City that all acts, conditions and things required by law to exist, happen and be performed precedent to and in the issuance of this Bond have existed, happened and been performed in due time, form and manner as required by law, and that the amount of this Bond, together with all other indebtedness of the City, does not exceed any debt limit prescribed by the laws or Constitution of the State of California.
Unless this Bond is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”), to the Fiscal Agent for registration of transfer, exchange, or payment, and any Bond issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representa tive of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC),
ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein.
Exhibit E
IN WITNESS WHEREOF, City of Fairfield has caused this Bond to be to be signed by the facsimile signature of its City Manager and countersigned by the facsimile signature of the City Clerk with the seal of the City imprinted hereon.
[S E A L]
City Clerk City Manager
[FORM OF FISCAL AGENT’S CERTIFICATE OF AUTHENTICATION AND REGISTRATION]
This is one of the Bonds described in the Agreement which has been authenticated on , 20__.
THE BANK OF NEW YORK MELLON
TRUST COMPANY, N.A.,
as Fiscal Agent
By:
Authorized Signatory
Exhibit E
FORM OF ASSIGNMENT
For value received, the undersigned do(es) hereby sell, assign and transfer unto
(Name, Address and Tax Identification or Social Security Number of Assignee)
the within Bond and do(es) hereby irrevocably constitute and appoint , attorney, to transfer the same on the registration books of the Fiscal Agent, with full power of substitution in the premises.
Dated:
Signature Guaranteed:
NOTICE: Signature guarantee shall be
made by a guarantor institution participating
in the Securities Transfer Agents Medallion
Program or in such other guarantee
program acceptable to the Fiscal Agent.
NOTICE: The signature on this assignment
must correspond with the name(s) as
written on the face of the within Bond in
every particular without alteration or
enlargement or any change whatsoever.
Exhibit F
APPENDIX 2
EXHIBIT F
$[PRINCIPAL AMOUNT]
IMPROVEMENT AREA B OF THE
CITY OF FAIRFIELD
COMMUNITY FACILITIES DISTRICT NO. 2016-1 (VILLAGES AT FAIRFIELD) SPECIAL TAX BONDS, SERIES 2025A
OFFICER’S CERTIFICATE REQUESTING DISBURSEMENT
FROM 2025 COSTS OF ISSUANCE FUND
REQUISITION NO. _____
The undersigned hereby states and certifies that:
(i) I am the duly appointed, qualified and acting Finance Director of the City of Fairfield, a general law city duly organized and existing under the Constitution and the laws of the State of California (the “City”) and as such, am familiar with the facts herein certified and am authorized to certify the same;
(ii) I am an “Authorized Officer,” as such term is defined in that certain Fiscal Agent Agreement, dated as of August 1, 2019 (the “Master Fiscal Agent Agreement”), by and between the City and The Bank of New York Mellon Trust Company, N.A. , as fiscal agent (the “Fiscal Agent”), which agreement was supplemented by the First Supplement to Fiscal Agent Agreement, dated as of April 1, 2025 (the “First Supplement” ; together with the Master Fiscal Agent Agreement, the “Fiscal Agent Agreement”) by and between the City and the Fiscal Agent;
(iii) Under Section 12.03 of the Fiscal Agent Agreement, the undersigned hereby requests and authorizes the Fiscal Agent to disburse from the 2025 Costs of Issuance Fund established under the Fiscal Agent Agreement to each payee designated on Schedule A attached hereto and by this reference incorporated herein, the amount set forth in an invoice submitted by each such payee but no more than the amount set forth opposite such payee, for payment or reimbursement of previous payment of Costs of Issuance (as that term is defined in the Fiscal Agent Agreement) as described on attached Schedule A . Payments shall be ma de by check or wire transfer in accordance with the payment instructions set forth on Schedule A (or the invoice attached thereto) and the Fiscal Agent shall rely on such payment instructions as though given by the City with no duty to investigate or inqui re as to the authenticity of the invoice or the payment instructions contained therein or the authority under which they were given.
(iv) The disbursements described on the attached Schedule A constitute Costs of Issuance, and are properly chargeable to the 2025 Costs of Issuance Fund.
Dated:
Exhibit F
CITY OF FAIRFIELD
By:
Finance Director
Exhibit F
SCHEDULE A
PAYEE NAME AND ADDRESS
PURPOSE OF OBLIGATION
AMOUNT
Agenda Item No: P.1
AGENDA REPORT
DATE: April 1, 2025
TO: Mayor and Council
FROM: David Gassaway, City Manager
SUBJECT: Resolutions 2025-52 and 2025-53 CD North Texas Street Business Improvement District
Resolution 2025-52 Levying an Assessment for Calendar Year 2025 for the North Texas Street Business Improvement District; and
Resolution 2025-53 Approving an Agreement with the North Texas Street Business Association for the Calendar Year 2025 Operation and Administration of the North Texas Street Business Improvement District
Funding Source: N/A
Contact: Jennifer Rice, (707) 428-7727
RECOMMENDED ACTION
Hold public hearing and adopt resolutions.
STATEMENT OF ISSUE
A public hearing is necessary for the City Council to hear and consider protests, if any, to the resolution declaring its intention to levy and collect an assessment for the calendar year of 2025 for businesses in the North Texas Street Business Improvement District (BID).
In the event, there is not a majority protest to the levy of the assessment, the council is being asked to adopt a resolution approving an agreement (Agreement) that will allow the total anticipated assessments of $58,000 from the North Texas Street BID to pass through to the North Texas Street Business Association (NTSBA) to implement its work program and activities.
DISCUSSION
On February 3, 2025, NTSBA submitted the NTSBA Advisory Report for 2024 and Proposed Budget for Calendar Year 2025 (Report) to the City Clerk’s Office. These documents describe the method
and basis of levying the assessments for 2025 and identify the improvements and activities to be performed during the year.
On March 18, 2025, the council adopted Resolution 2025-46, approving the Report, and Resolution 2025-47, declaring the City’s intention to levy an assessment on businesses within the BID for calendar 2025 . The council also set April 1, 2025, as the time and place for a public hearing. The public hearing is necessary for the council to hear and consider protests to the levy of the assessment.
Collection of the assessments for the calendar year 2025 constitutes the period commencing on January 1, 2025, and ending on December 31, 2025. The total amount anticipated from the assessments is $58,000. The 2025 assessment amount is based on business type, location in the BID, and employment size. The assessments for the calendar ye ar 2025 are the same as those originally assessed in 2000. The Agreement is for a one -year term and requires the NTSBA to provide quarterly milestones to City staff regarding the status of projects, programs, activities, and expenses.
FINANCIAL IMPACT
No City funds are involved. The assessments are collected from BID members and are anticipated to total $58,000.
PUBLIC CONTACT/ADVISORY BODY RECOMMENDATION
The Daily Republic newspaper published a public hearing notice on Wednesday, March 19, 2024.
On February 3, 2025, the NTSBA Advisory Board approved the contract between NTSBA and the City.
ALTERNATIVE ACTION
The council may modify the proposed assessment or the type(s) of improvements and activities to be funded with the revenues from the assessments and modify the proposed terms of the agreement.
COORDINATED WITH
N/A
STAFF CONTACT
Jennifer Rice, Economic Development Specialist
(707) 428-7727
[email protected]
ATTACHMENTS
Attachment 2: Proposed Resolution – Levying Assessment
Attachment 3: Proposed Resolution – Approving Agreement Attachment 4: Exhibit A - NTSBA 2025 Operation and Administration Agreement
CITY OF FAIRFIELD
RESOLUTION NO. 2025-52
LEVYING AN ASSESSMENT FOR CALENDAR YEAR 2025 FOR THE NORTH TEXAS STREET
BUSINESS IMPROVEMENT DISTRICT
WHEREAS, the Parking and Business Improvement Area Law of 1989, California Streets and Highways Code Sections 36500 et seq. (Law), authorizes the City Council to levy an assessment against businesses within a parking and business improvement area, which is in addit ion to any assessments, fees, charges, or taxes imposed in the City; and
WHEREAS, pursuant to the Law, the council adopted Ordinance 99 -21 establishing the North Texas Street Business Improvement District (BID) in the City; and
WHEREAS, the boundaries of the BID are generally described to include all properties abutting North Texas Street and Texas Street between Clay Street to the south and Nelson Street to the north, as well as certain properties abutting these core properties. A map showing the boundaries of the BID and properties within the BID is on file in the City Clerk’s Office and is incorporated herein by reference; and
WHEREAS, by Resolution 2000 -280, the council appointed the North Texas Street Business Association to serve as the Advisory Board for the BID (Advisory Board); and
WHEREAS, on February 11, 2025, the North Texas Street Business Association (NTSBA) Advisory Board approved an assessment for calendar year 202 5 and execution of the contract between NTSBA and the City; and
WHEREAS, in accordance with Section 36533 of the Law, the Advisory Board prepared and filed with the City Clerk’s Office on February 3, 2025, a report entitled “NTSBA Advisory Report for 2024 and Proposed Budget for Calendar Year 2025 (Report);” and
WHEREAS, the Report describes the method and basis for levying the assessments for 202 5 and identifying the improvements and activities to be performed during that calendar year; and
WHEREAS, on March 18, 202 5, the council adopted Resolution 2025-46 that prelimi narily approved the Report; and
WHEREAS, on March 18, 202 5, the council adopted Resolution 2025-47, declaring the City’s intention to levy an assessment on businesses within the BID for 2025. Subject to a public hearing and setting April 1, 2025, beginning at 6:00 p.m., Harry T. Price Memorial Council Chamber, 1000 Webster Street, Fairfield, CA 94533 as the time and place for said public hearing.
RES. NO. 2025-52
NOW, THEREFORE, THE COUNCIL OF THE CITY OF FAIRFIELD HEREBY RESOLVES:
Section 1. On April 1, 2025, the council held a duly noticed public hearing pursuant to the Law, regarding the levy and collection of an assessment within the BID for the 2025 calendar year. All interested persons were afforded the opportunity to hear and to be heard regarding protes ts and objections to the levy and collection of the assessment for the calendar year 202 5. The council found that there was no majority protest within the meaning of the Law. All protests and objections to the levy and collection of the assessment and any and all other protests and objections are hereby overruled by the council.
Section 2. Based upon its review of the Report, a copy of which has been presented to the council and which has been filed with the City Clerk’s Office, and other reports and infor mation, the council hereby finds and determines that: (i) the businesses in the BID will be benefited by the expenditure of funds raised by the assessment; (ii) the BID includes all of the businesses so benefited; (iii) the net amount of the assessment levied within the BID for the 2025 calendar year in accordance with the Report is apportioned by formula and method which fairly distributes the net amount in proportion to the estimated benefits to be received by each such business.
Section 3. The council hereby confirms the Report as originally filed.
Section 4. Adopting this resolution constitutes the levy of an assessment for the calendar year 2025 (commencing January 1, 2025, and ending December 31, 2025).
Section 5. The council hereby declares that the proposed uses of the revenues derived from the assessments levied against businesses in the BID are for the following facilities and activities:
(a) The acquisition, construction, installation , or maintenance of tangible property with a useful life of five years or more, including, but not limited to, the following: (i) benches; (ii) trash receptacles; (iii) decorations; and (iv) permanent landscaping; (b) Promotion of public events which benefit businesses in the BID and which take place in public places within the BID;
(c) Furnishing of music in any public place in the BID; and (d) Activities that benefit businesses located and operating in the BID.
RES. NO. 2025-52
Section 6. The city manager is authorized and directed to do all things necessary to implement this resolution.
PASSED AND ADOPTED this 1st day of April 2025, by the following vote:
AYES: MEMBERS: MOY/BERTANI/CARR/PANDURO/SANDHU/TONNESEN/WILLIAMS NOES: MEMBERS: _____________________________________________________ ABSENT: MEMBERS: _____________________________________________________ ABSTAIN: MEMBERS: _____________________________________________________
_____________________________________________________
MAYOR
ATTEST:
___________________________
CITY CLERK
CITY OF FAIRFIELD
RESOLUTION NO. 2025-53
APPROVING AN AGREEMENT WITH THE NORTH TEXAS STREET BUSINESS ASSOCIATION FOR THE YEAR 2025 OPERATION AND ADMINISTRATION OF THE NORTH TEXAS STREET BUSINESS
IMPROVEMENT DISTRICT
WHEREAS, the City Council adopted Ordinance No. 99-21 on September 21, 1999, establishing a parking and business improvement area known as the North Texas Street Business Improvement District (BID), pursuant to Section 36500, et seq. of the California Streets and Highway Code (Act); and
WHEREAS, pursuant to the Ordinance and the Act, a system of charges has been assessed upon various classes of businesses located within the BID; and
WHEREAS, on March 18, 2025, the council adopted Resolution 2025-47, a resolution of intention, declaring its intention to levy and collect an assessment for calendar year 202 5 against the BID; and
WHEREAS, on April 1, 2025, the council conducted a duly noticed public hearing to hear and consider protests to the levy of the assessment; and
WHEREAS, the City desires to use charges levied and collected by the city to contract for the administration of programs and activities in connection with the BID for the calendar year 2025; and
WHEREAS, the North Texas Street Business Ass ociation proposes to administer programs and activities in connection with the BID for the calendar year 2025.
NOW, THEREFORE, THE COUNCIL OF THE CITY OF FAIRFIELD HEREBY RESOLVES:
Section 1. The council hereby approves and authorizes the execution of the Agreement by and between the City and North Texas Street Business Association for Calendar Year 2025 Operation and Administration of the North Texas Street Business Improvement District ( Exhibit A ) substantially in the form and content presented and attached hereto, with minor technical changes as approved by the city attorney.
Section 2. The city manager is hereby authorized to do everything necessary and properly implement the Agreement.
RES. NO. 2025-53
PASSED AND ADOPTED this 1st day of April 2025, by the following vote:
AYES: MEMBERS: MOY/BERTANI/CARR/PANDURO/SANDHU/TONNESEN/WILLIAMS NOES: MEMBERS: _________________________________________________ ABSENT: MEMBERS: _________________________________________________ ABSTAIN: MEMBERS: _________________________________________________
_________________________________________________
MAYOR
ATTEST:
___________________________
CITY CLERK
AGREEMENT BY AND BETWEEN THE CITY OF FAIRFIELD AND THE NORTH TEXAS STREET BUSINESS ASSOCIATION FOR THE CALENDAR YEAR 2025
OPERATION AND ADMINISTRATION OF THE NORTH TEXAS STREET BUSINESS
IMPROVEMENT DISTRICT
THIS AGREEMENT is made and entered into as of the _____ day of _________ , 2025, by and between the CITY OF FAIRFIELD, a municipal corporation ("City") and the North Texas Street Business Association, a California nonprofit mutual benefit corporation (the "Corporation").
WHEREAS, City Ordinance No. 99-21, adopted September 21, 1999 (the "Ordinance"), established the North Texas Street Business Improvement District (the "District") under the provisions of the Parking and Business Improvement Area Law of 1989, Section 36500 et seq. of the California Streets and Highways Code (the "Law"); and
WHEREAS, pursuant to the Law and the Ordinance, the City is authorized to levy and collect an annual assessment (the "Assessment") from businesses in the North Texas Street Business Improvement District for the purpose of acquiring, constructing, installing, or maintaining improvements and promoting activities which will benefit businesses within the District; and
WHEREAS, the City has appointed the Board of Directors of the Corporation (the "Board of Directors") as the advisory board for the District; and WHEREAS the Corporation has available personnel, resources, and expertise to undertake improvements and implement activities within the City which are permitted under the Law and the Ordinance to be funded with proceeds of the Assessment; and WHEREAS, the Corporation is qualified to undertake and administer such improvements and activities within the City and is willing to do so.
NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, the City and the Corporation hereby agree as follows:
1. CONTRACT ADMINISTRATION.
Except as expressly provided herein, the City's Real Estate Specialist II or his or her designated representative shall be the City's representative for the administration of this Agreement. All activities performed by the Corporation shall be coordinated•witll' .. --·. · ,; · this person.
The Corporation shall designate a person to be the Corporation's representative for the administration of this Agreement and, subject to the direction and authorization
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EXHIBIT A
of the Board of Directors, to be the contact person for, and in charge of, all actions to be taken on behalf of the Corporation pursuant to this Agreement.
2. TERM.
lnitial Term. The term of this Agreement commences on January 1,2025, and shall continue until December 31,2025, inclusive, unless earlier terminated in accordance with this Agreement.
Termination. The City may terminate this Agreement immediately upon any breach of Sections 15 (lnsurance Requirements) or 17 (Conflict of lnterest). ln addition, either the City or the Corporation, upon at least 30 days prior written notice, may terminate this Agreement with or without cause. Within 45 days of the effective date of any termination, the City shall reimburse the Corporation for work that has been performed as of the termination date or which is in progress and cannot reasonably be terminated early by virtue of contractual commitments. Unexpended and unencumbered funds provided to the Corporation by the City pursuant to this Agreement and all tangible assets purchased wholly with such funds shall be immediately returned to the City. The Corporation shall not purchase assets using a combination of funds derived from Assessments and other resources available to the Corporation without the prior written consent of the City.
3. SCOPE OF SERVICES.
Corporation shall administer the work program for the District including but not limited to the projects outlined below:
A. Organization/Membership Services:
a. Provide seminars and essential business tools to educate business owners and share best practices.
b. Provide Membership networking opportunities, which provide information regarding member benefits, and open committee and board positions. c. lntroduce NTBSA businesses to PG&E Energy Efficient Program for Small Businesses.
d. Continue working with City liaison and Crime Prevention Services to offer Business Watch seminars.
e. Work with City Liaison to assist potential new businesses with location and planning services.
f. Wetcome new businesses by visiting and providing welcome brochures with Association information.
g. Nominate Board Members in October and elect in November to assume duties in November 2025 if needed.
h. Evaluate the needs of the NTSBA Board to create a stronger, more efficient Board.
i. Evaluate the current communication process and make improvements where needed,
j. Conduct one-on-one meetings or surveys with businesses in the NTSBA to
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understand the needs of the members.
k. Produce and distribute the NTSBA e-newsletter 6-8 times per year.
B. Design/Beautification Committee:
a. Work with City liaison and business membership to provide assistance with sign requirements.
b. Communicate with City liaison on lighting, landscaping, and graffiti issues in the district.
c. Work with the Board of Directors on two annual projects in 2025 to increase exposure and branding of the NTSBA.
d. Work with City liaison and district members on re-branding campaign and work with members and Board to implement.
e. Create and maintain website; implement changes required for an updated and user-friendly website.
f. Work with City liaison to monitor Gity property and report issues as needed. g. Promote the City of Fairfield's MyFairfield App'
G. Economic Restructuring Gommittee:
a. Work with City liaison, membership, and professional as needed to evaluate, recommend, and implement changes regarding BID funding as appropriate. b. Communicate and educate the membership about State and local programs available to small businesses.
c. lnvite on a quarterly basis one of the following to speak at the NTSBA association meeting: Solano EDC, Chamber of Commerce, City of Fairfield Economic Development, and Crime Prevention Team/Homeless Task Force. d. Recruit potential merchants to join the board or committees. e. Work with the Small Business Development Center to provide input toward workshops geared toward market needs.
f. Continue to work with the Solano EDC to promote the Solano Energy Watch program creating substantial monthly energy bill savings for participating merchants.
D. Business Grime Watch Gommittee:
a. Continue assisting members in working with the Police Department to control crime in the District.
b. Goordinate monthly Business Crime Watch meetings, one block of the District at a time, to proactivety listen to business concerns and collaborate with the Fairfield Police Department to provide awareness, tools, and resources available for merchants to proactively prevent crime at their businesses. c. Coordinate additional Business Crime Watch meetings to respond to business concerns specific to locations, or industries. d. Distribute Crime prevention literature provided by the Fairfield Police Department on an ongoing basis.
e. Promote the Code of Conduct signage developed by the Fairfield Police to business owners and provide referrals to local sign companies as needed. f. Create awareness of the opportunity to file a No Trespassing letter with the
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Fairfield Police department to assist in resolving nuisance crime issues. g. When appropriate, refer businesses to the Fairfield Police Department's Crime Prevention team to request a Crime Prevention Through Environmental Design (CPTED) survey for their business.
F. Coordination of Advisory Board Report
a. Prepare the report of the North Texas Street Business lmprovement District Advisory Board for the calendar year 2025 and submit it to the City Clerk by October 15,2025.
4. TIMETABLE FOR PLANS AND REPORTS.
Corporation shall submit to the City project plans and reports, including the following:
Quarterly Reports - By the 30th day of the first month following each quarter, (i.e., April 30, 2025), submit a Quarterly Progress Report for the previous quarter to the Real Estate Specialist ll.
Annual Report - By February 28,2025, submit a report outlining the proposed work program and budget for the current calendar year. This report shall be coordinafed with information contained in the previous year's submittal of the Advisory Board Annual Report to the Fairfield City Clerk in connection with the proposed levy of an assessment against businesses in the District.
Statement of Income and Expenses - Notwithstanding the termination date of this Agreement, Corporation shall submit to City by February 28,2025, a statement of iniome and expenses of Corporation in relation to the District, covering the period from Janu ary 1,2024 to December 31, 2024, for the District. The City shall have the right to request that each statement of income and expenses of Colporation in relation to the District be prepared by an lndependent Certified Public Accountant.
5. DISBURSEMENTS.
The budget for calendar year 2024, commencing January 1,2025, and ending December i1,2025, will be equal to the amount charged and collected by City from businesses within the District during that period. This amount is expected to be $53,000. No more lhan 25 percent of the assessment collected will be used to cover District programs management including, but not limited to, District mailings, Board meetings and supplies. The remainder of the budget will be spent on District promotlon activities; acquisition, construction, installation or maintenance of public improvements; marketing and advertising activities.
Disbursements shall be subject to Corporation providing a progress report for the prior quarter to City with each disbursement request. Corporation shall submit a iequest each quarter for the disbursement of the amount charged to businesses within the Distiict for calendar year 2025. Such request can be made no earlier than the 30th day of the month following the end of a calenda.l year quarter. For example, for tne calendar year quarter ending March 30th, Corporation can submit a
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6 request for disbursement on April 30th. However, any such disbursement request must be accompanied by a Quarterly Progress Report to City and supporting documentation of expenditures incurred during the quarter of the calendar year, and an itemized list of proposed expenditures for the remaining quarters of calendar year 2025. City may withhold payment of funds if not satisfied with the Corporation's work. Disbursement request must also contain a statement that no revenues disbursed bv CITY have been or will be used for purposes other than those authorized bv this Aqreement. Corporation shall provide a Tax ldentification number to City for billing purposes.
tf, after review of the request, the Real Estate Specialist ll determines that such request is reasonable and within the projected revenues from the District, he or she shall authorize the Finance Division to disburse additionalfunds to Corporation as they are received. lf the amount of assessment funds projected to be collected is lesi than the total budget, work program adjustments will be made. The amount to be disbursed shall not exceed the amount received from businesses within the District for calendar year 2025 (notwithstanding the addition of any interest payments).
Payment shall be made to Corporation at the address identified pursuant to the Notices Section below.
CORPORATION AN INDEPENDENT CONTRACTOR.
The Corporation, in the performance of the rights and obligations existing under this Agreement, shall act as and be an independent contractor and not an agent or employee of the City. The City shall not exercise control over the Corporation's meitrob of performance of its obligations or duties, except as set forth herein, and desires to obtain only an end result. The City shall have no liability or responsibility for payments of any wages or benefits to the Corporation's employees for whom the Corporation shall bear sole responsibility and liability.
BOOKS AND RECORDS.
The Corporation shall keep all related books and records in connection with the services performed under this Agreement for a period of at least three years, and agrees, upon the City's request, to make them available to the City or any authorized representative of the City for inspection during normal business hours.
PUBLIC MEETINGS.
All meetings of the Board of Directors or any group of representatives of the Corporation that would constitute a "legislative body" as defined in California Government Code section 54952 (a "committee or subcommittee") where proposed or approved District activities and/or expenditures (collectively, "District Matters") will be discussed shall be open to the public, including without limitation meetings held at District businesses, as required by the Ralph M. Brown Act, Government Code section 54950, ef seg. (the "brown Act"). Prior notice of such meetings, including an 7 8
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agenda prepared and posted in accordance with the Brown Act, of the District Matters to be discussed and the time and location of the meeting, shall be given in accordance with the Brown Act. No District Matters shall be discussed at any meeting of the Board of Directors or a committee or subcommittee unless such public notice has been given.
Notwithstanding the foregoing, the Board of Directors shall be permitted to meet in sessions closed to the public, so long as any such closed session conforms to the requirements of the Brown Act.
The City shall, at the request of the Corporation, post notices and agendas prepared and provided by the Corporation for Corporation meetings on the City's website and other locations along with notices of other City meetings.
9. DATA SHARING.
Each party, upon the request of the other, shall make available to the other any additional information in its possession as may be reasonably necessary to operate and administer activities for the District.
10. COLLECTION OF ASSESSMENTS.
The Corporation understands and agrees that the levy of Assessments by the City shall be in the sole discretion of the City Council. No provision of this Agreement shall be construed as a promise, warranty or agreement by the City to levy Assessments against businesses in the District. The City shall have no liability to the Corporation for its decision to not levy Assessments or in connection with the amounts of any Assessments levied. The Corporation understands and agrees that the Ordinance may be amended from time to time by the City Council. In any calendar year, if the City levies Assessments against businesses in the North Texas Street Business District, pursuant to the terms of the Ordinance, the City shall collect Assessments to finance District improvements and activities.
11.USE OF FUNDS: AUDIT REPORT.
The Corporation may expend any funds received pursuant to this Agreement only for the purposes authorized by the Ordinance and only in accordance with the Annual Report, including the budget, as approved by the City Council for the applicable calendar year. The Corporation will establish and maintain on a current basis an adequate accrual accounting system in accordance with generally accepted accounting principles and standards. The system shall detail all costs chargeable to the Districi underthis Agreement and shall substantiate all such costs, meeting acceptable standards for major public entities in Northern California and complying with any applicable Federal standards. The system shall meet the minimum calendar and internal control requirements as reasonably determined by the City. In addition, within 120 days after the end of each calendar year or the effective date of a termination pursuant to Section 2 above, the City shall have the right to request
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that the Corporation submlt to the Economic Development Division Manager an audit report, prepared by a person or company reasonably approved by the City in accordance with the City's policies, of the District's expenditures and completed activities for the preceding calendar year.
l2.ASSIGNMENT.
The parties agree that the identity, expertise and experience of the Corporation are material considerations for this Agreement. The Corporation shall not assign or transfer any interest in this Agreement nor the performance of any of the Corporation's obligations hereunder without the prior written consent of the City. 1 3. NO OTHER CONTRACTS.
During the term of this Agreement, City agrees that it shall not contract with any other person or entity to operate and administer the District.
14. INDEMNIFICATION OF CIry.
Corporation shall hold harmless, defend and indemnify City and its elective and appointive boards, commissions, officials, officers, agents, employees, and volunteers from and against any and all liability, loss, damage, expense, costs (including, without limitation, attorney's fees and costs of litigation) of any nature arising out of or in connection with: (a) the negligence or willful misconduct of Corporation or its officlals, officers, agents, employees and volunteers; (b) Corporation's performance of its obligations and conduct of its agents under this Agreement; or (c) Corporation's failure to comply with any provision of this Agreement; except such loss or damage which was caused by the gross negligence oiwillful misconduct of the City or its officials, officers, agents, employees, and volunteers.
1 5. INSUMNCE REQUIREMENTS.
Without limiting the Corporation's indemnification of the City, the Corporation agrees to have and m-aintain the policies set forth in EXHIBIT A, entitled INSURANCE which is attached hereto and incorporated herein by this reference. All policies, endorsements, certificates and/or binders shall be subject to approval by the Risk Manager of City as to form and content. These requirements are subject to amendment or waiver if so approved in writing by the Risk Manager. The Corporation agrees to provide the City with copies of said policies, ce_rtificates and/or endorsementJbefore work commences under this Agreement. The City shall have the right to treat any violation of this Section as a material breach of this Agreement and shall have the right to terminate this Agreement immediately and pursue any and all legal or equitable remedies for such breach.
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1 6. NONDISCRIMI NATION.
The Corporation shall not discriminate, in any way, against any person on the basis of age, sex, race, color, creed, sexual orientation, marital status, disability or national origin in connection with or related to the performance of this Agreement.
17. CONFLICT OF INTEREST.
The Corporation shall at all times avoid conflict of interest or appearance of conflict of interest in the performance of this Agreement. The Corporation shall disclose to the City any conflict of interest, or potential conflict of interest, which exists or arises at any time during the term of this Agreement within a reasonable time after discovery of such conflict of interest by the Corporation. The City shall have the right to treat any violation of this Section as a material breach of this Agreement, and shall have the right to terminate this Agreement immediately and pursue any and all legal or equitable remedies for such breach.
18.WAIVER.
The City and the Corporation agree that waiver by the City or the Corporation of any breach or violation of any term or condition of this Agreement shall not be deemed to be a waiver of any other term or condition contained herein or a waiver of any subsequent breach or violation of the same or any other term or condition. 19, NOTICES.
All notices and other communications required or permitted to be given under this Agreement shall be in writing and shall be personally served or mailed, postage prepaid and return receipt requested, addressed to the respective parties as follows:
To City: Community Development Department
Economic DeveloPment Division
City of Fairfield
1000 Webster Street, 2nd Floor
Fairfield, CA 94533-4883
Attention: Jennifer Rice, Real Estate Specialist ll
Phone (707) 428-7727
Fax: (707) 425-2594
To Corporation:North Texas Street Business Association
1111 Webster Street
Fairfield, CA 94533
Attention: Executive Director
Phone (707) 425-4625
Fax (707) 425-0826
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or to Such other address or addressee as may be designated by notice in accordance with this Section. Notice shall be deemed effective on the date personally delivered or, if mailed, upon receipt.
A copy of any notice of a legal nature, including, but not limited to, any claims against the City, its officers or employees shall also be served in the manner specified above to the following address:
City of Fairfield
City Attorney
1000 Webster Street, 4th Floor
Fairfield, CA 94533-4883
20. PRIOR AGREEMENTS AND AMENDMENTS.
This Agreement, including all Exhibits attached hereto, represents the entire understanding of the parties as to the matters contained herein. No prior oral or written understanding shall be of any force or effect with respect to the matters covered hereunder. This Agreement may be modified only by a written amendment duly executed by both parties to this Agreement.
21. GOVERNING LAW.
This Agreement shall be governed by the laws of the State of California
22.TIME OF ESSENCE.
Time is of the essence of each and every provision of this Agreement.
23.ATTORNEY'S FEES.
lf a legal action or proceeding is brought by any party because of default under this Agreehent, or to enforce a provision hereof, the prevailing party therein_ shall be entitled, in addition to any other relief, to recover reasonable attorney's fees and court costs from the losing party as determined by the court in which said action or proceeding is pending.
WITNESS THE EXECUTION HEREOF the day and yearfirst hereinabove written. [Signatures appear on the following page.]