12/12/2023 Item No.2.
as the case may be, have ratings at the time of issuance of strch policy or surety bond or lettel of credit equal to .,AA,, or highei (w'ithout regard to qualifier) assigned by Fitch or "Aa" or higher (withouf r.egard to qualifier) assigned gy Moody's or "AA" or higher (without regard to quaiifier) assfgned by Standard & Poor's.
ible Of{rcer clf the Trustee
.,Responsible Officer of the Trustee" means arry officer within the corporate trust division (or a1y u.rt.".ro, group or department of the Trustee) including any vice president, assistant vice president, assiitant secretary or any other officer or assistant officer ofthe Trustee customarily performing functions sirnilarlo those performed by the persons who at the time shall be such officers, r-espectively, with responsibility for the administration of this Indenture' Series ?0?4 Bond Reserve Ac-count
',Series 2024 Bond Reserve Account" means the account within the Bond Reserve Fund referred to by that name established pursuant to Section 2.13(a).
Services
.,services" means the "Authorized Services" pursuant to the Rate and Method.
Services Tax
.,services Special Tax" means the annual Special Tax to be levied in each Fiscal year on each Assessor's parcel of Taxable Property to fund the Services Special Tax Requirement (each as defined in the Rate and Method).
Sinlcinu Funcl Subaccottt'lt
..Sinking Fund Subaccount" rleans the subaccount in the Redemption Account referred to by that name established pursuant to Section 2.04.
Special_.I'ax
,,Special Tax" means the special tax authori zed to be levied and collected annually on all Taxable pr:operty in the Improvement Area under and pursuant to the Law at the special election held in the Improvernent Area on March 28,2023, including both the Facilities Special Tax and the Services SPecial Tax.
Special Taxluld
,,Special Tax Fund" means the City of Folsom Community Facilities District No. 23 (Folsom Ranch) Improvement Area No. 2 Special Tax Fund established pursuant to Section 4.01.
4 l (r5-6930-3 8t|i.5
IJ
12/12/2023 Item No.2.
Standald & Pool's
"standard & Poor's" means S&P Globai Ratings, a business of Standard & Poor's Financial Ser-vices LLC, and its successors or assigns, except that if such entity shall be dissolved or liquidated or shall no longer perfbrm the functions of a securities rating agency, then the term .,staridard & poor's" slrall bL deerned to refer to any other nationally recognized secudties rating agency selected by the Community Facilities District.
Supplemenlal Indentr.rre
"supplemental Indenture" means any indenture then in fuil force and effect that has been made a1d enteied into by the Community Faciiities District and the TLustee, amendatory of or supplemental hereto; but only to the extent that such Supplemental Indentule is specifically authorized hereunder.
Tax Celtificate
"Tax Cefii{icate" means the certificate or certificates delivered upon the issuance of any series of the Bonds relating to Section 148 of the Code, or any functionally similar replacement certifi cate.
Taxable Pronertv
"Taxable Property" means all propelty within the Improvement Area taxable under the Law in accordance with ihe proceedings for the authorization of the issuance of the Bonds and the levy and collection of the Special Tax'
Trust Agreenrent
"Trust Agreement" means that certain Trust Agreement, dated as of January 1, 2024, among the Folsom Ranch Financing Authority, the Community Facilities District and the Trustee, as Authority Trustee for the Authority Bonds.
frustee
'"Trustee" means U.S. Bank Trust Company, National Association, a national balking association duly organized and existing under and by vifiue of the laws of the United States of America and authorized to accept and execute trusts of the character helein set forth, at its Cor-porate Trust Office, and its successors or assigns, or any other bank or trust company having a designated corporate trust office in California which may at any time be substituted in its place as provided in Section 6.01.
Value
"Value" means the current assessed valuation of the Taxable Property and/or the appraised value of the Taxable Property determined by an MAI appraiser'. uesl ol'
'.Written Request of the Community Facilities Distt'ict" means an instrument in wriring sigped by the City Manager or the Finance Director', or by any other officer of lhe City 4 1 65-691{)-381t3 5
14
12/12/2023 Item No.2.
duly authorized by the city council, as legislative body of tlie community Facilities District, for that purpose.
Sectiol 1.02. Eqr.ral Security. In consideration of the acceptance of the Bonds by the Holder.s thereof, th" Ind"rffi*huil b" deemed to be and shall constitute a contract between the Cornmu'ity Facilities District and the Hoiders fronr tirne to time to secure the full and final payment of the interest on and principal of and redemption premiunts, if any, on all Bonds which may from time to time be auihorized, sold, executed, authenticated and delivered hereunder' subject to the agreements, conditions, covenants and terms contained herein; and ali agreements, conditions, covenants and terms contained herein required to be observed or performed by or on behalf of the comrnunity Facilities District shall be for tlie equal and proportionate benefit, security and protection oi all Holders without distinction, preference or priority as to security or otherwise of any Bonds ovel any other Bonds by reason ol the number thereof or the time of execution, authentication or delivery thereof or otherwise for ally cause whatsoeveL, except as expressly provided herein or therein.
ARTICLE II
U C
Section 2.01. A and P
(a) The City Council, as legislative body of the Community Facilities District, has reviewed all procledings heretofore taken relative to the authorization of the Bonds and has found, as a result ofiuch review, and hereby finds and determines that all acts, conditions and things required by law to exist, happen and be performed precedent to and in the issuance of tUI gonAs do exist, have happened and have been performed in due time, form and manner as required by the Law, and the Community Facilities District is now authorized, pursuant to each ancl evely requirement of the Law and hereof' to issue the Bonds in one or more series as fiom time to time shall be authorized and established by the Community Facilities District pursuant to the Lar,v and pursuant hereto and pursuant to one or mor.e Supplemental Indentures, which selies shall be entitled to the benefit, protection und ,""ur.ity of the provisions hereof, shall be designated the "City of Folsom bom*unity Facilities District No. 23 (Folsom Ranch) Improvement Area No' 2 Special Tax Bonds," together with such further appropriate particular designation added to or incorporated in the title of the Bonds of each series as the comrnunity Facilities District may ietermine or as shall be required by the Law, and each Bond shall bear upon its face the designation so determined for the series to which it belongs. Additionally, the Bonds .uy .oituin or have endolsed thereon such descriptive provisions, specifications and *o.d, not incolsistent with the provisions hereof as lnay be desirable or necessary to comply with custom or the rules of any seculities exchange or commission or brokerage board or otherwise as may be determin"o ry the Community Facilities District prior to the deiivery thereof. An initial series of Bonds shall be issued hereunder to be designated the ,,City of Folsom Community Facilities District No. 23 (Folsoni Ranch) Improvement Area No. 2 Special Tax Bonds, Series 2074'"
(b) The purpose fol which the Bonds are to be issued is to provide funds to pay costs of the acquisition and construction of the Facilities, including the repaymeut S
f
.l ! 65-(r930-3883,5
15 Page 122
12/12/2023 Item No.2.
of funds advanced by the city ibr the community Facilities Distlict and the t'epayrneut under any agreemeni of advances of funds or reimbursement for the lesser of the value or cost of work i1-kind provicled by any person for the Cotnmunity Facilities District, and i'cluding the paymei-,t of costs incidental to or connected with such acquisition and construction.
(c) From and aftel the issuance of any series of the Bonds, the findings and determinations of the city councii, as legislative body of the Comrnunity Facilities District, ,.sp.lting such series of the Bonds shall be conclusive evidence of the existence of the facts so found and deterrnined in any action or proceeding in any- court in which the validity of any Bonds of such seties is atissue, and no bona fide purchaser of any of the Bonds of such series shall be required to see to the existence of any fact or to the performance of any condition or to the taking of any proceeding required prior to such issuance or to the application of the purchase price paid for such series of the Bonds' The validity of the issuance of the Bonds of any series shall not be dependent on or affected in any way bv (i) any proceedings taken uy itie city for the acquisition and construction of any Facilities, or (ii) any contracts made by the city or the community Facilities District in connection'therewith, or (iii) the failure io complete the acquisition and construction of a'y Facilities. The recital contained in the Bonds that the Bonds are issued under and pursuant to the Law and under and pursuant hereto and under and pursriant to a Supplemental Indenture shall be conclusive evidence of their validity and of the regularity of their issuance and all Bonds shall be incontestable from and after their issuance' The g";d;,lr"ll be deemed to be issued, within the meaning hereof, whenever the definitive Bonds (or any temporary Bonds exchangeable therefor) have been delive|ed to the purchaser ther-Lof and tlie purchase price thereof received.
Seclion 2.02. Adciitional Boncls; Surborclinate Boncls. The Community Facilities District may atany time issue addiiionuT Bondipayable from the proceeds of the Special rax net of priority Admi*istrative Expenses as provided-herein on a parity with all other Bonds and Additional Bonds theretofore issued or to be issued hereunder, but only subject to the following conditions, which are hereby made conditions precedent to the issuance of such Additional Bonds:
(a) The issuance of Additional Bolds shall have been authorized pursuant to the Law and pursuant hereto and shal1 have been provided for by a bupplemental Indenture which shall specify the following:
(i) The purpose fol which the Additional Bonds are to be issued; proui.teil, that the pio".eOr of sale of suoh Additional Bonds sha1l be applied SGfV fot the purpose of financing the acquisition and construction of the Faciiities, including the repayffrent of funds advanced by the City lor the Community FaciliJes nistiict and tlre repayment under any agreement of advances of filnds or reimbulsements fol the lesser of the value ol cost of work in-kind providecl by any pefsorl for the community Facilities District, ald includilg the paymenl of costs incidental to ot connected with sr'rch acquisitio', consti.,ctio' a*d payment, and payment of the Costs of issuance, or fol the refunding of Outstanding Bonds;
4 I 65-(1910-3883 5
16 Page 123
12/12/2023 Item No.2.
(ii) The plilcipai arlount and designatiop of the Additional Bonds and the denomination or denominations of the Additional Bonds; (iii) The date, the rnatulity date or dates, the interest payment dates and the dates on which Minimum Sinking Fuld Account Payments are due, if any, fbr such Additional Bonds; providecl, that (i) the Serial Bonds of such Aclditional Bonds shall be payable as to principal on september 1 of each year in which principal of such Additional Bonds falis due, and the Term Bonds of such Additional Bonds shall be subject to mandatory redemption on September 1 of each year in which Minimum Sinking Fund Account Payments for such Additional Bonds are due; (ii) the Additional Bonds shall be payable as to intelest sen:iannually on March 1 and September I of each year, except that the first installment of interest may be payable on either March I or September 1 and shall be for a period of not longer than twelve (12) months and the interest shall be payable thereafter semiannually on March I and September 1, (iii) all the Additional Bonds of a series of like maturity shall be identical in all r'espects, except as- to number or denomination, and (iv) serial maturities of Serial Bonds of such Additional Bonds or Minimum Sinking Fund Account Payments for Term Bonds of such Additional Bonds, or any combination thereof, shall be established to provide for the redemption or payment of the Additional Bonds on or before their respective maturity dates;
(iv) The redemption premiums and redemption tems, if any, for such Additional Bonds;
(v) The form of the Additional Bonds;
(vD The amount, if any, to be deposited from the proceeds of sale of such Additional Bonds in the Redemption Account, and its use to pay interest on such Additional Bonds;
(vii) The amount to be deposited from the proceeds of sale of such Additional Bonds in the applicable Bond Reserve Account; provided, that the applicable Bond Reserve Account shall eqtral, at the tirne that such Addiiitnd Bonds become Outstanding, the Required Bond Reserve for such Additional Bonds, and an amount at least equal to the Required Bond Reserve for such Additional Bonds shall theleafter be maintained in lire applicable Bond Reserve Account;
(viii) The amounts to be deposited from the proceeds of sale of such Additional Bonds in the separate accounts for each series of Additiorral Bonds to be established in the Acquisition and Constn-rction Fund and in the Costs of Issuance Fund; and
(ix) Such other provisions tirat are appropriate or necessaty and are not inconsistent with the provisions hereol
4 I 6r-6q30-iit8i 5
17 Page 124
12/12/2023 Item No.2.
(b) The Comrnunity Facilities District shall be in compliance with all agreements, .oniitions, covenants and terms contained herein and in all Supplemental Iidentures r.equired to be observeci or perfonned by it, and no Event of Default hereunder or undel any dupplemental Indenture shall have occuned arid sliall be then continuing; and (c) in each year-until the rnaturity date fol the Additional Bonds, the Maximum Facilities Special Tax for Taxabie Propelty classified as Developed Property, plus the Effective Tax Rate Evaluation Minimum Facilities Revenue for Taxable Propetly not classified as Developed Property less Priority Administrative Expenses is estimated to equal at least one hundred ten percent (1 10%) of the sum of the Annual Debt Service for "ach
y"ar on the Bonds, including such Additional Bonds, and the Value of all Taxable Proper-ty, in aggregate, is at leasi three (3) times the aggregate Lien on such Taxable Property.
(d) The Community Facilities District may issue one or more series of Bonds (the ..Refunding Bonds") without cornplying with this Section 2-02(c) if' after the issuance and delivery lf s,r"h fefunding Bonds, either (i) none of the Bonds theretofore issued hereunder wiii te outstanding or 1ii; the Debt Service in each Bond Year that begins after the issuance of such Refunding Bonds is not incleased by reason of the issuance of such Refunding Bonds'
(e) The Community Faciiities District lnay issue bonds or other obligations puyJt" from the proceecli of the Special Tax on a basis subordinate to the Bonds without complying with this Section 2'02(a), (b) and (c)' Section 2.03. proeedtue for the Issuarrce of Additional Bonds. At any time after the sale of any Additional Bonds in ;"""tdar* *ittt the Law, the Additional Bonds shall be executed by the Community Facilities District and shall be delivered to the Trustee and thereupon shall be authenticated and delivered by the Trustee, but only upon receipt by the Trustee of the following documents:
(a) An executed copy of the Sgpplemer"rtal Indenture authorizing the issuance of such Additional Bonds;
(b) A Written Requesr of the Comrnunity Facilities District as to the delivery of the Additional Bonds;
(c) One or more Opinions of Counsel to the effect that (i) the Comrnunity Facilities District has the iight and power under the Law to execute the Indenture and the Supplemental Inclenture, and the Indenture and Supplemental Indenture have each been dulj and lawfully executed ancl clelivered by the Community Facilities District and are in full force and effect and ale valicl and binding uporl the Community Facilities District and enforceable in accoLdance with their terms (except as enforcement rnay be limited by bankruptcy, insolvency. reorganization, arrangement, fraudulent conveyance, moratoriu* und other la*'s relating to or affecting creditors' rights, by the application of equitable principles, by tlie exercise of judicial discretion in appropriate cases and by the iimitations on legal rernedies against cities in the State of California) and no other. authorization for the execution thereof is required; arrd (ii) the Additional Bonds 4 I (r5-69i0-3883 5
18 Page 125
12/12/2023 Item No.2.
are valid and binding special tax obligarions of the Community Facilities District payable frorn the proceeds of tnl Special Tax net of Priority Administrative Expenses and the other funds provided herein for such payment as provided herein and are enforceable in accoldance with their terms (except as enforcement may be iimited by bankruptcy' insolvency, Leorganization, arlangement, fraudulent conveyance, moratorium and Other laws relating to or.affecting cr-editors' rights, by the application of equitable principles, by the exercise of judicial discretion in appropriate cases and by the limitations on legal remedies against cities in the State of California) and the terms of the Law and of the Indenture and the Supplemental Indenture and the Additional Bonds have been duly and validly authorized, ,old, .*...rted, authenticated and delivered in accordance with the Law and with the Indentut'e and the Supplemental Indenture; (d) A Cerrificate of an Independent Consultant containing such statements as may be reasonably necessary to show compliance with the requirements of Section 2.02(c);
(e) A Certificate of the Community Facilities District containing such statements aS may be reasonably necessaty to show compliance with the requirements of Section 2.02; and
(0 The proceeds of the sale of such Additional Bonds'
Section 2.
Fund Account P
and shall be numbered consecutively from one (1) uPward in order of issuance. The dates, maturtty dates, interest rates, and Minimum Sinking Fund Account Payments for any Additional Bonds shail be set forth in the SUPPlemental Indenture relating thereto The 2024 Bonds shall be dated the date of the deliverY thereof, and shall mature on the dates and in the principal amounts and shall bear interest at the rates per annum as set forth in the following schedule:
Principal
Payment Date
(September 1)
Principal
Amount
Interest
Rate
$ %
'lernr Bontls
.l l(r5-6930-i883.5
19 Page 126
12/12/2023 Item No.2.
Milimum Sinking Fund Account Payments are heleby established for the mandatory redemption and payrnent of the Term Bonds of the 2024 Bonds, which payments shal1 become due duririg the yeais ending on the dates and in the amounts as set forth in the foilowing schedr.rle (except that ii any of the Term Bonds of the 2024 Bonds shall have been redeemed pursuant to Seciion 3.01, the amounts of the Minimum Sinking Fund Account Payments shall be ieduced proportionately by the principal amount of all such Term Bonds of the 2024 Bonds so redeemed), namely:
Term Bond Maturing SeptembeJ l. 30[
'l
Year Ending Minimurn Sinking
September I Fund Account Payment
$
Maturitv
Te::In Forid Maturine Seplemher 1.20[ I
Year Ending Minimum Sinking
September 1 Fund Account Payment
$
Maturiry
All such Minimum Sinking Fund Account Payments shall be deposited in the Sinki'g Fund Subaccount, which subaccount is hereby established and which subaccount the Comrn*unity Facilities District hereby agrees and covenants to cause to be maintained by the Trustee so long as any of the Term Bonds are Outstanding. All money in the Sinking Fund Subaccount shall be used and withdrawn by the Trustee (upon receipt of a Written Request of the Community Facilities District) at any time for the purchase of the Term Bonds at public ol private sales as and when and at such prices (including brokerage and other"charges) as the Community Facilities District lnay in its diicretion determine, but not to exceed the principal amount of such Terr' Bonds. All.o,r.y in the Sinking Fund Subaccount on September 1 of each year during the period beginning on Sepiemb er 1,201], and ending on September 1, 20L1, both dales inclusive, shall be r,rsed and withdrawn by the Trustee on such Septembel I for tlie mandatory redemption or payment of the Term Bonds of the 2A24Bonds maturing on September 1,20L1; and all money in the Sinking Fund Subaccount on September 1 of each year during the period beginning on Septe'rber t,2011, and ending on September 1,20L-1, both dates inclusive, shall be ttsed and wiihdrawn by th-i.ustee on such September 1 for the rnandatory ledemption or payment of the Term Bonds of the 2A24Bonds rnatuiing on September 1,20L-1, and the Community Facilities District hereby agrees and covenants with the Holders of the Telm Bonds to call aud redeem in ..1 i(r5-{$30-i881 5
20
12/12/2023 Item No.2.
accordance with Article Iil or pay the Term Bonds fiorn the Minimurn Sinking Fund Account Payments deposited in the Sinling Fund Subaccount put'suant to this paragraph whenever on September I of arry year there is money in the Sinking Fund Subaccount available for such purpose.
Section 2.05. Interest P Dates of B Interest on the Bonds shall be computed on the basis of a 360-day year of twelve (12) 30-day calendar months, and shall be payable on September 7, 2A24, and semiannually thereafter on September 1 and March 1 in each year until the PrinciPal sum of the Bonds has been Paid' Tlre Bonds shall bear interest from the interest payment date next preceding the date ofregistlation there of, unless they are registered on a day during the Period from the sixteenth (16th) day of the month next preceding an interest payment date to such interest PaYment date, both inclusive, in which event they shall bear interest fi'om such interest PaYment date, or unless theY are re gistered on a day on or before the fifteenth (15fi) day of the month next Preceding the first (1't) interest payment date, in which event theY shall bear interest from their dated date; provicled, that if at the time of registration of anY Bond interest is then in default on the Outstanding Bonds, such Bond shall bear interest fi'orn the interest payment date to which interest has previously been paid or made available for payment on the Outstanding Bonds.
Section 2.06. Form of Boncls. The Bonds and the authentication and registration endorsement and assignment to upp"uith.r"on shall be substantially in the form appearing in Exhibit A.
Section 2.07. paJment of Bonds. The interest on and principal of and redemption premiums, if any, on the Bonds ilail b. puyuUt" in lawful money of the United States of America ut tt . corporateTrust office of the Trusiee, and the Community Facilities District and the Trustee shall be entitled to conclusively treat the registered owner of any Bond as the absoiute owner of such Bond for all purpores hereof, whethei strch Bond shall be overdue oI not, and neither the community Facilitiesbistrict nor the Trustee shall be affected by any notice or knowledge to the contrary. payme't of interest on the Bonds due on or before the rnaturily or plior redemption thereof shall be made only to the person whose name appears in the registration books required to be kept by the Trustee plrsuantio Section 2.09 as the registered owner thereof at the close of business as of the fifteenttr (15th) day of the month next preceding each interest payment date' such interest to be paid by .h*ck inaiied by first class mail on each such interest payment date to such registered owner at iris or her address as it appears on such books, except that in the case of a Holder of one million dollars ($1,000,000) or tnore in principal amount of Bonds then Outstanding, payment shall be made at such Holder's option by wire iransfer on each such interest payment ai.'oi immecliately availabie funds to an account in a bank or trust company or savings bank that is a member of theiederal Reserve Systenr and is located in the continental United States of America according to written instluctions provided by such Hoider io the Trustee at least fifteen (15) days before ,r"h int.r.st payment date. Payment of the principal of and redemption premiums, if any, on the Bonds sliatl be made only to the person whose name appears in the registration books 1equired to be kept by the Tlustee purcuant to Section 2.a9 as the registered owner thereof, such principal and reiemption premiums. if any, to be paid only on the sutrender of the Bonds at the borpoiut. Trust Offlrce olthe Trustee at maturity or on redemption prior to maturity. Ail such payments of interest ancl principal artd redemption premiums, if any, on any 4l (r5-6930-3 883.-5
21 Page 128
12/12/2023 Item No.2.
Bond shall be valid ancl effectual to satisfy and dischalge the liability on such Bond to the extent of the sum or surns so Paid.
Notwithstanding the for-egoing, a Holder of any Bond may, in lieu of surrendering the sarne fbr a new Bond, endorse o,r ,.r.h Bond a record of partial payment of the principal of such Bond in the form set forth below (which shall be typed or printed on such Bond):
PAYMBNTS ON ACCOUNT OF PRINCIPAL
Principal Balance of PrinciPal
Amount Paid Amount UnPaid
Signature
of Registered Holder
The Trustee shall maintain a record of each such partial payment made in accordance with the foregoing agreement and sucir record of the Trustee sha1l be conclusive. Such parlial payment shall be vaiid upon payment of the amount thereof to the Registered Holder of such Bbncl, and the Community ra.ititles District and the Trustee shall be fully released and discharged fi.om all liability to the extent of such payment regardless of whether such endorsement shall or shall not have been made upon such Bond by the Holder thereof and regardless of any error or omission in such endorsement.
Payment Date
Section 2.08. Execution of Bonds. The Bonds shall be signed on behalf of the community Facilities District by tl* -""r"t "t'f"csimile signature of the Mayor and countersigned
by the manual or facsimile signature of the City Clerk, and any Bond may be signed on behalf of the Community Facilities Dislrict by any person who, on the actual date of the execution of such Bond, shall be the proper officer olthe City and member of the City Council, as legislalive body of the Community Fu"iliti", District, although on the nominal date of such Bond such per son shall not have been such officer of the City. In case any such officer, who shall have signed any of the Bonds, shall cease to be such officer before the Bonds so signed shall have been delivered to the purchaser by the Trustee, such Bonds may neveftheless be delivered and issued and, upon such ielivery und irrrun.e, shall be as binding upon the Community Facilities District as though such officer who signed the same had continued to be such officer until such delivery and issuance.
Only those gonds that bear thereon a certificate of authentication executed by the Trustee shall be entitlecl to any benefit, protection ol security hereunder or be valid or obligatory fol any purpose, and such certificate of ihe Trustee shall be conclusive evidence that the Borrds so authenticated have bee' d'ly authofized,sold, executed, authenticated and delivered hereunder and are entitled to the benefits hereof.
Section 2.09.
Corpot'ate "I'rust Office sufficient books for the transfer and exchange of the Bonds, wliich books shall at all tirnes during not'nl al business hours with reasonable prior written notice be open to inspection by the CommunitY Facilities District or by any Holder'(or his replesentative authorized in wliting). Any Bond ntaY, in accordance with its terms, be tansferued or exchanged otr such Transfer and Exchanse IJr:ncls. The Trustee shall keeP at its :l l(r5-6930-38ti3.5
22
12/12/2023 Item No.2.
books by the persol] in whose name it is registered, in person or by his or her duly authorized attor-ney, Lrpoll payment by the Holder requesting such transfer or exchattge of any tax or other gou..,r-.nial cSarge requir"ed to be paid with respect to such transfel ot' exchange and upon iurrender- of such Bond for cancellation accompanied by delivery of a duly executed written instrument of transfer or exchange in a form approved by the Trustee. Wirenever any Bond ol Bonds shall be surrendered for lransfer or exchange, the Community Facilities District shall execute and the Tr.ustee shall authenticate and deliver a new Bond or Bonds of the same series and maturity date for tl.ie same aggregare principal amount, except that neither the Community Facilities District nor the Trustee shall be required (i) to transfer or exchange any Bonds during the fifteen-ciay period prior to the selection of any Bonds for redemption nnder Article III, or (ii) to tr.ansfer or exchange any Bond which has been selected for redernption in whole or in paft, except the unrede.*"d portion of such Bond selected fol redemption in pafi, from and after the day itrat such Bond has been selected for redemption in whole or in part under Alticle III.
Section 2.10 Mutilated. T)estroved- Stolen or Lost Bonds. In case any Bond shall become mutilated in respect of the body of such Bond or shall be believed by the Community Facilities District to have been destroyed, stolen or lost, upon proof of ownership satisfactory to the Community Facilities District and the Trustee and upon the surrender of such mutilated Bond at the Corporate Trust Office of the Trustee, or upon the receipt of evidence satisfactory to the Cornniuniiy Facilities District and the Trustee of such destruction, theft or loss and upon receipt of indemnity satisfactory to the Community Facilities District and the Tr"ustee, and also upon payment of all "*p"nr"i
incurred by the Community Facilities District and the Trustee in the p..-ir"r and receipt of each of indemnity satisfactory to them, the Community Facilities District shall execute and the Trustee shall authenticate and deliver at the Corporate Trust Office a new Bold or Bonds of the same series and maturity date for the same aggregate plincipal amount of like tenor an<l date and bearing such numbers and notations as shall be appropriate in exchange and substitution for and upon cancellation of the mutilated Bond or in lieu of and in substitution for the Bond so destroyed, stolen or lost.
If any such destroyed, stolen or lost Bond shall have matured or shall have been called for redemption, payrnent ol the amount due thereon shall be made by the Trttstee, at the wr-itte' direction of the-Community Facilities District, upon receipt of like proof, indernnity and payment of expenses.
Any replacement Bonds issued pursuant to this Section shall be entitled to equal and proportionate benefits with all other Bonds issued hereunder, and the Conrmunity Facilities Distiict and the Trustee shall not be required to treat both the original Bond and any replacement Bond as being Outstanding for the purpose of determining the principal amount of Bonds which may be issued hereunder oi fot the purpose of delermining any percentage of Bonds Outstanding herlunder, but both the origirial and the replacemenl Bond shall be tleated as one and the same' Section 2.1 1. Resistration of the Bonds. The Borrds shall be registered i1 tlie name of the Authority and delivered to the Authority Tlustee upon the issuance thereof in accordance with the provisions of the Local Obligation Purchase Contract Section 2 12. CUSIP Numbers. The Cornmuni ty Facilities District in issuing the Bonds may, but shall not be required to, use "CUSIP" numbers (if then gerrerally in use ,1 165-69.10-3Ii8:i i
/)
), and, if
12/12/2023 Item No.2.
Llsed, the Trustee shall use "CUSIp" numbers in notices of redemption as a convenience to Flolders; p.ouid.d that the Trustee shall have no liability fol any defect in the "CUSIP" numbers as they upp.u, on any Bond, notice or elsewirere, and, provicled further that any such notice may state that #r"pr"r"*tation is made as to the correctness of such numbers either as printed onthe Bonds or as contained in any notice of a redenrption and that leliance may be placed only on the other identification numbers printed on the Bonds, and any such redemplion shall not be affected by any defect in or omission of such numbers. The Community Facilities District shall promptly notify the Trustee in writing of any change ir-r "CUSIP" numbers, if any. The Community Facilities District does not "*p."t
to use "CUSIP" numbers for the 2024 Borrds'
Section 2.13. Application of Proceeds of Sale of 2024 Bond-E, _
Upon the receipt of
payment of the purchase pri." olfr. 2024 Bondt *h"n lhe 2A24 Bonds shall have been duly sold ty'the Community Facilities District, the Trustee shall deposit such proceeds of sale of the 2024 Bonds into a temporary account called the Proceeds Fund which tire Trustee shall establish, rnaintain and hold in trust, and which shall be clisbursed in full on the date of receipt (whereupon said temporary account shall be closed) in the following order:
(a) The Trustee shall deposit in the Series 2024 Bond Reserve Account the amount of $;Reserve Fund Deposit], being a suln equal to the Required Bond Resetve' which such account is hereby created in lhe Bond Reserve Fund; (b) Tl-re Trustee shall deposit in the Acquisition and Construction Fund the amount of $fAcquisition Fund Deposit];
(c) The Trustee shall deposit in the Capitalized Interest Account the amount of $[CaP I DePosit]; and
(d) The Trustee shall deposit in the Costs of Issuance Fund the amount of $[COI DePosit].
Section 2.14. Capitalized Interest Account. There is hereby established a fund to beknownastheCityofffiFacilitiesDistrictNo'23(FolsomRanch) Improvement Area No. Z Special Tax Bonds Capitalized Interest Account' On each of the foliowing dates, the Trustee shail transfer the respective amounts fi'om the capitahzed Interest Account to the Redemption Account fol the payment of interest due on the 2024 Bonds:
Date of Transfer Amount
March 1.2024 $
Septerlber I,2024
If at any time the Trustee is required by a Suppiemental Indenture to deposit any amount of funds therein, the Trustee shall reestablish and maintain a fund to be known as the City of Folsom Comm*nity Facilities District No. 23 (Folsorn Ranch) hnprovement Area No. 2 Special Tax Borids Capitalized Interest Account. on each of the dates set forth in any table set forlh in a Suppleme'tal ir-rdenture, the amouut set iorth shall be transfelred frorn the Capitalized Interest 4 I 65-(;910-3883 5
24 Page 131
12/12/2023 Item No.2.
Account to the Redelnption Account for the payment of interest due on the Bonds. The Capitalized Interest Account will be closed following the last date of transfer.
Section 2.15.
fund to be known as the Ci
isition and There is heleby establislied a
ty of Folsom Community Facilities District No. 23 (Folsom Ranch) Improvement Area No. 2 SPecial Tax Bonds Acquisition and Construction Fund, to be held and administered by the Trustee. All money in the Acquisition and Construction Fund shall be used by the Trustee for payment of the costs of the acquisition and construction of the Facilities, including the lepayrnent of funds advanced by the City for the Community Facilities District and the repayment under any agleement of advances of funds or reimbursement for the lesser of the value or cost of work in'kind plovided by any person for the Community Facilities District, upon receipt of a Written Request of the Community Facilities District filed with the Trustee, each of which shall be sequentially numbered and shall state the person to whom payment is to be made, the amoriut to be paid, the purpose fol which tire obligation was incurred and that such payment is a pr:oper charge against such fund; providgd, that any remaining amount therein after the completion of such pulpose (as set forth in a Certificate of the Community Facilities District so determining filed with the Trustee) shali be transferred by the Trustee to the Redemption Account.
The Acquisi tion and Construction Fund will be closed following the last date of transfer Section 2.16 Costs of Issuance Fund. There is hereby established a fund to be known as the City of Folsom Community Facilities DistrictNo.23 (Folsom Ranch) Improvement Area No. 2 Special Tax Bonds Costs of Issuance Fund, to be held and administered by the Trustee.
All money in the Costs of Issuance Fund shall be used and withdrawn by the Trustee to pay the Costs of Issuance upon receipt of a Written Request of the Community Facilities District filed with the Trustee, each of which shall be sequentially numbered and shall state the person to whom payment is to be rnade, the amount to be paid, the purpose for which the obligation was incuned uni tnut such payment is a proper charge against such fund; provided, that on lJuly 24,2A241, or upon a prior deter-mination by tlie Community Facilities District that all Costs of Issuance have U".n puia (as set forth in a Certificare of the Cornrnunity Facilities District so determining filed with the Trustee), arry balance of money remaining in the Costs of Issuance Fund shali be withdrawn from the Costs of Issuance Fund by the Trustee and transfen'ed to the Acquisition and Construction Fund. The Costs of lssuance Fund will be closed following the last date of transfer' ARTICLE IiI
REDEMPTI ON OR EXCHANGE OF BONDS
Section 3.01. RedernDtron Prices and Terms of Bonds Any Supplemental Indenture may set forth the provisions for ledemption of any Additional BonCs. (a) Mandatorv Sinkin s Fund Accolr Redemnti on of the 2024 Bonds.
The 2024 Bolds maturing on September 1, 2ALl, are subject to mandatory redemption by tlie Comrnunity Facilities District prior to theil maturity date in part on September I in eaclr of tlre years 20f_] through 2}I_l,both years inclusive; and the 2A24Bands maturing o1 Septernber 1, 20[ ], are subject to mandatory redemption by the Community Facilities Disrrict prior. to their tnaturity date in part on September 1 in each of the years 20L-] tlrr-ongh^201_), botlr years inclusive, in each case solely frorn Minimum Sinking Fund 4 l(ri-6930--ltilii 5
25
12/12/2023 Item No.2.
Account Payments deposited in the Sinking Futrd Subaccount, upon rnailed notice as frovided heiein, at a redemptio' price equal to one hundt'ed percent (100%) of the principal amount thereof called for r-edemption together with accrued interest thereon to the date fixed for redemPtion.
(b) of the 202 The 2024 Bonds are
subject to optional redemption bY the CommunitY Facilities District prior to their respective maturity dates as a whole or in Pafi on any date on or after September 1,20[ ], fi'om funds derived by the CommunitY Facilities District from anY source other than such Minimum Sinking Fund Account PaYments deposited in the Sinking Fund Subaccount or such prep ayments of the SPecial Tax, upon mailed notice as Prnvided herein, at the following redemption prices (cornPuted uPon the principal amount'of the 2024 Bonds or Portions thereof called for redemption) together with accrued interest thereon to the date fixed for ledemption:
103%if redeemed on any ddrte on or after September 1, 20L-] through August 31,20[ l;
rcz%if redeemed on any date fi'om september |,2}L-Jtluough August 31,201 );
101%if redeemed on any date from September I,20| l thror.rgh August 3t,20|. l;
100% if redeemed on September 1, 20Ll and any date thereafter (c) on the 4 "Ihe2024 Bonds are
subj ect to extraordinarY redemPtion by the CommunitY Facilities District prior to their respective maturitY dates, as a whole or in part on any interest payment date on and after September 1, 201 l, from funds derived by the Community Facilities District from plepaymen ts of the Special Tax, upon mailed notice as Provided herein, at the foll0wmg redernption Prlces (computed upon the princiPal amount of the 2024 Bonds 0r Portlons thereof called for redemPtion) together with accrued interest thereon to the date fixed for redemption, to wttl
rc3% if redeemed on any interest payment date on or after September I , 20[ I through March 1,201];
102% if redeemed on an interest payrnent date on September 1, 20L-l or March l,20ll;
rcl%ifredeemedonaninterestpaymentdateonSeptemberl,
20L-l or March 1, 20[-]; and
rca% if redeemed on September l, 20L-] or any interest payment date thereafter'
4 l 6i-6910-3s{il 5
1,t) Page 133
12/12/2023 Item No.2.
Section 3.02. Selection sf Bouls fol Reclenrption. If less than all the Outstanding Bondsaretoberedeemeou,uffiitheSpecialTaxatanyonetime,tlreBonds shall be ledeemed pro rata by matur-ity.- tfleis than all the outstanding Bonds are to be redeemed at the option of the Community Faciliiies District at any one time, the Bonds of the latest naturity date or dates shall be recleenied prior to ol simultaneously with the redemption of the Bonds maturing priorthereto, and if lessihan all the outstanding Bonds of any one maturity date are io be redeemed at any one time, the Trustee shaii select the Bonds or the portions thereof of such maturity date to be redeemed in integral multiples of five thousand dollars ($5,000) in a mauner that it deems appropriate and fair
Section 3.03. Notice of At the Written Request of and at the sole cost and exPense of the CommunitY Facilities Di str'ict, received by the Trustee at least ten (10) days in advance of so sending, srich Written Request to contain the information to be contained in the notice of redemption to be sent to Holdels, as set forth below, the Tlustee shall mail at least twenty (20) and not more than sixtY (60) days prior to the date fixed for redemptron, notice of redemPtion Pursuant to Section 10.14 to the respective Holders of all Bonds selected for redemption in whole or in part and to all securities depositories and securities inforrnation services selected by the Comm Facilities District to comply with custom or the rules of any securltlesunlty exchange or commission or brokerag e board or otherwise as may be determined by the community Facilities District in its sole discretion, but neither failure to receive any such rnailed notice nor any immaterial defect contained therein shall affect the sufficiency or the validity of such proceedings for redemption; p1gYfulec!, that no notice of redemption need be given to the Authority for any Bonds for which the AuthoritY is the Holder. Such notice shall state the date of such notice, the Bonds to be redeemed, the date of issue of such Bonds, the redemption date, the redemption pr1ce, the place of redemPtion (including the name and aPProPriate address of the Trustee), and, if less than all of any such maturitY, the numbers of the Bonds of such maturity to be redeemed and, in the case of Bonds to be redeemed in part only, the respective portions of the principal amount thereof to be redeemed, and shall give notice that further interest on such Bonds or the portions thereof to be redeemed will not acclue from and after the redemption date, and shall require that such Bonds be then sunendered for redemption at the address of the Trustee so designated' If any Bond so chosen for redemption shall not be redeemab le in whole, such notice shall also state that such Bond is to be redeemed in Part only and that uPon Presentatton of such Bond fol redemPtion there will be issued in lieu of the uruedeemed portion of princiPal thereof a new Bond or Bonds of the same series and maturity date equal in agglegate principal amount to such umedeemed portion In the event of an optional redemption of Bonds, the Trustee shall mail a notice of redemption, in the same manner as aforesaid, only after receipt of a written Request of the community Facilities District at least i 0 days prioi to the date on which the Trustee must send notice to the Holders of the Bonds; pleivictecl, however, if sufficient monies fol the payment of the redemption price of all Bonds to b"Ed..m"o are not then on deposit witl, the Trustee, such notice shall state that such redemption shall be conditioned upon the timely deposit of sufficient funds therefor with the Trustee.
Any notice of optionai redernption rray be rescinded by wlitten notice given by the comrnunity Facilities District to the Trusteeio later than three (3) Business Days prior to the date specified for redemption. The Trustee shall give r-rotice of rescission of the notice of optiorral redemption or no'-satisfaction of any conditions specified in tlie notice of optional redemption as .i l(r5-(:930-3U83 5
27 Page 134
12/12/2023 Item No.2.
soolt as practicable to the same parties and in the same malrler as the notice of ledernptiolt was given pursuant to this Section'
Section 3.04. Partial em of Bonds Upon sunendet of anY Bond redeemed in part only, the Cornrnunity Facilities Distlict sira1l execute authenticat. und d.li,rer to the registered owner thereof at the expense of the District a new Bond ot' Bonds of the same series and maturity date equal and the Trustee sliall
Cornmunity Faciiities
in aggregate principal
amount to the unredeemed portion of the Bond sunendered' Section 3.05. b,ll'ect ol'Redemption of Bonds. If notice of redemption has been duly given and not rescincled ur ufor.ruid and money sufhcient for the payment of the principal of und rid"-ption premiums, if any, on, together with intelest to the redemption date on, the Bonds or portions theretf so callecl for redemption has been irrevocably deposited with the Trustee, then orrih. redemption date designated in such notice such Bonds or such portions thereof shall become irrevocably due and payable, and from and aftel the date so designated interest on the Bonds or' such portions thereof so called fbr redemption shall cease to accrue and the Holders of such Bonds shall iave no rights in respect thereof except to receive payment of the principal of such Bonds or such portions thereof ani the redemption premiums, if any, thereon and the interest accrued thereon to the redemption date; prqyklgd, that redemption of Bonds other than from Minimum Sinking Fund Account payments shall be made only frorn and to the extent of funds on deposit with the Trustee and available fbr such purpose on the date of redemption'
ARTICLE IV
SPECIAL TAX
liofSection 4.01
to the S
of Tax in
Fu The Community Facilities District agrees andT
covenants that it will deposit the Special Tax proceeds in the City of Folsom Community Facilities District No. 23 (Folsom Ranch) Improvement Area No. 2 Cornmunity Facilities Fund (the "Community Facillties Fund"), which fund is hereby established in the treasury of the City, for' and on behalf of the Comrnuuity Facilities District, and which fund the Community Facilities District hereby agrees and covenants to maintain so long as any Bonds are Outstanding hereunder All money in the CommunitY Facilities Fund shall be used and withdrawn by the Comrnunity Facilities District solely for the benefit of the Community Facilities District in accordauce with the Law, including payment of Expenses and Services. The Cornmunity Facilities District agiees and covenants that, after payment of its Pliority Administrative Expenses, it will transfet'to the Truslee from the Community Facilities Fund amounts sufficient and in srifficient lime for the Trustee to make the transfers required by Section 4.02 (less any amounts to be trausferred pursuant to Section
2.14), and the Trustee shail deposit such proceeds as and when received in the City of Folsom Community Facilities DistrictNo. 23 (Folsom Ranch) Improvement Area No. 2 Special Tax Fund, which firnd the Trustee shall estabiish and maintain so long as Bonds t"emain Outstanding hereunder, and all money in such fund shall be held by the Trustee in trust hereundet and shall be disbursed, allocated and applied solely to the uses and putp oses hereinafter set forth in this Ar-ticle Section 4.02. Allocation of Monev in the Soecial Tax Fund. All money irr tlie Special Tax Fuld shall be set aside by the Trustee in the fbllowing respective spect 4 t 65-6930-3833 5
28 al accounts and
12/12/2023 Item No.2.
fund within rhe Special Tax Fund (each of which accounts and flnd is hereby created) in the following order.of priority, and all morrey in each of snch accounts and fund shall be applied, used and witlidraw' only for tie purposes herei'after authorized i' this Section, namely:
(1) RedemPtion Account; and
(2) Bond Reserve Fund'
(a) Redemption Acgqqnt. On or before September I and March I in each year, beginning o" S.pt"*b* lJA24,the Trustee shall, from the money in the Special Tax Find, trlisfer to and deposit in the Redemption Account an amount of money equal to the aggregate arnount of interest becoming due and payable-on all Outstanding Bonds on ,u.f,[l*h 1 or September 1, as the case may be, and on or before September I in each year, beginning on September 1,2024,the Trustee shall, flom the then remaining money in ttre Sfecial lax Fund, transfer to and deposit in the Redemption Account an amount of *oney eqgal to the aggregatearnount of principal becoming due and payable on all outsta'aing's"iiul Bonds i-" ru"h September 1 plus a1l Minimurn Sinking Fund Account fayn"errts required to be made on such September 1 into the Sinking Fund Subaccountiprovided, ihut ull of the aforesaid payments shall be made without priority of any payment over any other payment, and in thi event that rnoney in the Special Tax Fund on any March I or September I is noi equal to the atnount of interest becoming due on all Bonds on such date, or in the event that the money in the Special Tax Fund on any September i is not equal to the amount of principal of the Bonds becoming due on such date, as the case,ouy^b", then such money shall be applied pro rata in such proportion as such i'terest and principal and Minimum Sinking Fund Account Payments bear to each other.
No deposit need be made into the Redemption Account if the amount of money contained theiein is at least equai to the amount required by the terms of the preceding paragrapir to be deposited therein at the times and in the amounts herein provided.
All money in the Redernption Account shall be used and withdlawn by the Trustee to pay the interest on the Bonds as it shall become due and payable (including accrued interest on any Bonds purchased or redeemed prior to maturity) plus the plincipal of and redemption pr.roi.,.nu, if any, on the Bonds as they shall lnatule or upon the prior redemption th"reof, except thai any money in the Sinking Fund Subaccount shall be used oniy to purchase or redeem or letire the Term Bonds as provided herein' (b) Bond Reserve Fund. On ol before Malch i and September 1 in each year, beginning on tM"*h 1, 2024Fh. Trustee shall, from the then lemaining lnoney in the Special tai puna, transfer to and deposit in each Bond Reserve Accoui'tt within tire Bond Reserve Fund such arnount of money as shall be lequired to restore each such Bond Reserve Account to a sum equal to tire Required Boncl Reserve for the applicable series o.f Bonds, pro rata,to the extenl that amounts are available in the Special Tax Fund for such puryose; and for tliis purpose a1l investments in each Bond Reserve Account shall (begi'ning on fMarch t,zoz+]lbe valued on Marcli 1 and September 1 of each yeal at the face value thereof if such inl estrnents mature within twelve (i 2) rnonths from the date of 4 I (ri-69i0-3883.5
29 Page 136
12/12/2023 Item No.2.
valuation, or if such investments mature more than twelve (12) rnonths after the date of valuation, at the pr.ice at which such investments at'e t'edeemable by the Holder at his or her option, if so redeemable, or if not so redeemable, at the lesser of (i) the cost of such investments plus the amorti zation of any premium ol minus the arnortization of any discount, or 1ii1 the marftet value of such investments. For purposes of allocating rernaining money in the Special Tax Fund between mole than one Bond Reserve Account, any such transfers to anddeposits in each Boud Reserve Account shall be made equally and ratably in proportion to thi Required Bond Reserve for each series of Bonds' No deposit need be made into a Bond Reserve Account if the value of the investments cbntained therein is at least equal to the Required Bond Reserve for the applicable series of Bonds.
All money in each Bond Reserve Account shall be used and withdrawn by the Trustee solely for the purpose of paying the intel'est on or principal of the corresponding series of Bonds in the event there is insufficient money in the Redemption Account available for this purpose; providecl, that if as a result of any of the foregoing valuations or as a result of any property owner prepayment it is determined that the amount of money in a Bond Reserve Account exceeds or will exceed the Requiled Bond Reserve for the applicable series of Bonds, the Trustee shall withdraw the amount of rnoney representing such excess from sgch fund and shall deposit such amount of money in the Redemption Account as provided in the last paragrapir of Section 10.05. For the avoidance of doubt, amou'ts in a Bond Reserve Account are rot available to make up a deficiency for the payment of principal and interest on any Bonds otirer than the specific series of Bonds to which the Bond Reserve Account relates'
(c) Surplns Amounts. On or before March 1 and September 1 in each year, begi'ning on M;il2024hh. Trustee shall, fiom the then remaining money in iir" Sp.Cut fax f'una, transfer all amounts remaining in the Special Tax Fund after the tr.ansiers specified in subsections (a) and (b) above to the City for deposit in the comrnunity Facilities Fund.
ARTICLE V
COVEN AN"IS OF THE COMM IJNITY FACILITIES DIS CT
Section5.0l. Punctual Payment and Perfor{nance. The Community Facilities District will punctually pay th" n to=rt or, and plincipal of and redemption premium, if any, to become due on every'B;"; issued hereunder in strict conformity with the terms of the Law and hereof and of the Bonds, and wili faithfuliy observe and perform all the agreements, conditions, covenants and terms coniained helein and in the Boncls required to be observed and performed by Sectiol5.02. Against Indebtedness and Encumbrances. The Communtty Facilities District will riot i$*itry *iO.n* of indebtedness payable fi'om the proceeds of the Special Tax except as provided hellirr, and will not create, nol pet'tnit the creation of, any pledge, liln, cliarge or other encnrnbrance upolr auy money in the Speciai Tax Fund other than as provided rt.
416-5-6930-3883 5
30 Page 137
12/12/2023 Item No.2.
herein; pIg-yidgd, that the Community Facilities Distlict may at any time, or fi'om time to time, ir.u" .ufr.,r.., of indebtedless for any lawful purpose of the Comrnunity Facilities District whicli are payable fi-on any motley in the Community Facilities Fund as may fi'om tirne to tirne be deposited therein so long as any payments due thereunder sirall be subordinate in al1 r'espects to the use of the proceeds of the Special Tax as provided herein.
Section 5.03. A ederal Taxation
(a) To the extent a series of Bonds (the "Tax-Exempt Bonds") are acq,ir-ed by the Authority using the proceeds of a series of Authority Bonds for which the Auihor.ity iras obtained an opinion of Bond Counsel that interest on such Authority Bonds is excluied from gross income for federal income tax purposes (the "Tax-Exempt Authority Bolds"),1he Community Facilities District will not take any action, or fail to take any action, if such action or failure to take such action would advelsely affect the exclusion from gloss income of the interest on the Tax-Exempt Authority Bonds pursuant to Secrion 103 ;f the Code, and specifically the Community Facilities District will not directly or indirectly use or make any use of the proceeds of the Tax-Exempt Bonds or any other funds of the Cornmunity Facilities District or take or omit to take any action that would cause the Tax-Exempt Authority Bonds to be "arbitrage bonds" subject to federal income taxation by reason of Section 148 of the Code or "private activity bonds" subject to federal income taxation by reason of Section l4l(a) of the Code or obligations subject to federal income taxation because they are "federally guaranteed" as provided in Section 149(b) of the Code; and to that end the Community Facilities District, with respect to the pro"..d, of the Tax-Exernpt Bonds and such other funds, will comply with all requirements tf such sections of the Code and all regulations of the United States Deparlment of the Treasury issued thereunder to the extent that such regulations are, at the time, applicable and i' effect; proviclecl, that if the Community Facilities District shall obtain an opinion of nationally .*ig"ir.a bond counsel to the effect that any action required under the provisions of ttre Indenture described in this subsection is no longer required, or to the "ff."t
that some further action is required, to maintain the exclusion from gross income of the inter-est on the Tax-Exempt Authority Bonds pursuant to Section 103 of the Code, the Community Facilities District may rely conclusively orr such opinion in complying with the provisions of the Indenture. In the event that at any time the Comrnunity Facilities District is of the opinion that for purposes of the provisions of the Indenture described in this subsection it is necessary to restlict or limit the yield on the investment of any money held by the Finance Director, for and on behalf of the Community Facilities District, under the Indelture or otherwise, the Comrnunity Facilities District shall so instruct tlie Finance Director or the Trustee, as the case may be, in writing, and the Finance Director or the Tlrstee, as the case may be, shall take such action as may be necessary in accordance with such instruclions.
(b) Without limiting the generality of the foregoing, the Community Facilities District wiil pay from time to time all amonnts required to be rebated to the United States of Amer-ica pursuant to Section l4S(f) of the Code and all regulations of the United States Departnent of the Treasury issued thereunder to the extent that such r.egulatior.rs are, at ihe time, applicable and in effect, which obligation shall survive payment inlull or defeasance of the Bonds, and to that end, there is hereby established in the tl'easury 'l
1 65-69i0-3lis3 5
31 Page 138
12/12/2023 Item No.2.
of the City, for ancl on behalf of the Community Facilities District, a fund to be known as tlie City of Folro,r, Community Facilities District No. 23 (Folsorn Ranch) Inrprovement Ar.ea No. 2 Special Tax Bonds Rebate Fund to be held in trust and administered by the Finance Direcior for and on behalf of the Community Facilities District. The Community Facilities District will comply with the provisions of the Tax Celtificate with respect to making deposits in the Rebate Fund, and all money held in the Rebate Fund is pledged to provide payments to the United States of America as provided herein and in the Tax Certificate and no other person shall have claim to such money except as provided in the Tax Certificate.
Section 5.04. payrnent qf Clainrs. The Community Facilities Distlict will pay and discharge any and all lawful "fuirot *fri.i,, ii"npuid, might become payable from the proceeds of the Special Tax or any part thereof oI upon any funfs in the hands of the Community Facilities Districl or the Trustee allocated to the payment of the interest on or principal of or redemption premiums, if any, on the Bonds, or which might impair the security of the Bonds' Section 5.05. Expense and Services Budsets. The City Council, as legislative bodyoftlreCommurrityFacilffinorbeforeJu1y1ineachyear,adoptabudget setting forth the costs
-of
the estimated Expenses and Services for the period from such July 1 through the next succeeding June 30; prouil*d, that any budget adopted in accordance with this Section may be amended by the City Council at any time' (a) The Community Facilities District will keep, or in the case of transactions made by the Trustee it will cause the Trustee to keep, appropriate accounting records in which complete and correct entries shall be made of all transactions relating to the receipt, investment, disbursement, allocation and application of the proceeds of the Special Tax and of the proceeds of the Bonds, which accounting records shali at all times during business hours *itll. ,.uronable prior written notice. be subiect to the inspeciion of uny iiold.. (or his or her representative authorized in writing). The Trustee shall furnish the Community Facilities District periodic cash transaction statements which include detaii for all investment transactions effected by the Tlustee or brokers selected by the Community Facilities District. Upon the Community Facilities District's election, such statements will be delivered via the Trustee's online service and upon electing such service, paper statements will be provided only upon request. The Community Facilities District *ui,r., the right to receive blokerage confirmations of security transactions effected by the Trustee as they occur, to the extent permitted by larv. The Cornrnunity Facilities District fufiher. u'derstands that trade confirmations for securities transactions effected by the Trustee will be available upon written request and at no additional cost and other trade confirrnations may be obtained from the applicable broker. (b) The Community Facilities District will plepare annually not ntore rhan two hundred seventy (270) days after the close of each Fiscal Year (commencing with tlre Fiscal Year ending Jlne IO,ZOZ+1a summary repofi showing in reasonable detaii the proceeds of the Specia-l Tax levied and collected and the costs of the Expenses and Services ior the prececlingFiscal Year and containing a general statement of the physical condition Section 5.06 Accountins Records: Financial Statements and Other Reoorts. + t65-69-10-3|t81.5
32 Page 139
12/12/2023 Item No.2.
of the Facilities. The Conmunity Facilities District will furnish a copy of such summary report without charge to any Holder (or his or her representative authorized in writing) and to any investment banker, security dealer or other person interested in the Bonds requesting a copy thereof.
(c) The Comrnunity Facilities Distlict will prepare annually not later than October. 30 of each year (beginning in 2024) and file with the California Debt and Investment Advisory Commission by maii, postage prepaid, all necessary infonnation required to be filed under the Law, including:
(1) The principal amount of the Bonds Outstariding;
(2) The balance in each Bond Reserve Account;
(3) The balance in the Redemption Account constituting capitalized interest, if any;
(4) The number ofparcels securing the Bonds which are delinquent withrespect to their Special Tax payments, the amount that each delinquent parcel is delinquent, the length of time that each delinquent parcel has been delinquent and when foreclosure was commenced for each delinquent parcel; and
(5) The assessed value of all parcels subject to the levy of the Special Tax to repay the Bonds, as shown on the most equalized assessment roll of the County of Sacramento.
Additionally, the Community Facilities District will notifu the Califomia Debt and Investment Advisory Commission by mail, postage prepaid, within ten (10) days if the Community Facilities District oithe Trustee fails to pay any interest on or principal of any of the Bonds on any scheduled payment date, or if fuilds are withdrawn from a Bond Reserve Acoount to pay any interest on or principal of a series of the Bonds.
Section 5.07 of Ri The Community
Facilities District will preselve and protect the security of the Bonds and the rights of and will warrant ald defend their rights against all claims and demands of all persons. the Holders
Section 5.08 Pavment of Governmental Charges and Comoliance with Governrnental Regulation5 The Community Facilities District w'ill pay and discharge all taxes or payments in lier,r of taxes, assessments and other governmental charges or liens that may be levied, assessed or charged r"rpon the Facilities or any pat-t theleof promptly as and when the same shall become due and payable, except that the Community Facilities Distr-ict shall not be required to pay any such governmental charges so long as the application or validity thereof shall be contested in good laith and the Cornmunity Facilities District shall have set aside reserves to cover such charges. The Cornmunity Facilities District will duly observe and conforrn with all valid regulations and requirements of any governmental autholity relative lo the operation of the Facilities or any part thereof, except that the Community Facilities District shall nol be required to comply with any such regulations or requirements so long a shall be contested in good faith'
41(r-r-(1930-3l'i83 5
JJ
s the application or validity theleof
12/12/2023 Item No.2.
Section 5.09. Levy and Collection of the Special Tax. The Cotntnunity Facilities District,so1ongaSanyeon@arrnual1ylevytheSpecia1Taxagairrstall Taxable property in tlie Improvement Area and make provision for tire collection of the Special Tax in amounts wliich *itt t. sulficient, together with the money then on deposit in the Redemption Accclunt, after making reasonable aliowances for contingencies and erLors in the estimates, to yield proceeds equal to the amounts required for compliance with the agreements' conditions, covenants and terms contained herein, and which in any event will be sufficient to pay the interest on and principal of and Minimum Sinking Fund Account payments for and redemption premiums, if any, on rh; Bonds as they become dul an{ payable and to replenish each Bond Reserve Account and to pay all cutrent litp.nr", and Services as they become due and payable in accordance r.vitli the p.o,ririon, and terms hereof. The Special rax shall be collected in the same manner as ordinary ad valorem plopelty taxes are collected and, except as otherwise provided i1 Section 5.10 or by the Law, siralf be subject to the same penalties and the same collection procedure, sale, and lien prio.ity in case oi d"linqu.ncy as is provided for ad valorem property taxes.
Section5.l0.FQleclosur.egfSpccialTaxLiens.Th:ComnrunityFacilities Districtsha1]arrnuallyono,u@-"hy"u'leviewthepublicrecordsofthe county of Sacramento relating to the coilection of the Special Tax in older to determine the arnount of the Special Tax collected in the prior Fiscal Year, and if the community Facilities District determines on the basis of such review that the amount so collected is deficient by more tharl five percent (5%) of the total amount of the Special Tax levied in such Fiscai Year, it will within sixty (60) days thereafler institute foreclosure ploceedings as authorized by the Law in order to enforce the lien of the delinquent installment, of th" speciat Tax against each lot or parcel of land in the Improvement Area, an<J will diligently prosecute and pursue such foreclosure proceedings to judgment and sale; provide-ct, that inesplciive of the foregoing if the Community Facilities District determines on the basis of such review that property owned by any single property owner in the Improvement Area is delinquent by four misied payments with respect to the Special rax due and payable by such property owner by such delinquency date, then the Community Facilities District will institute, prosecute and pursue such foreclo.ur. pro.redings in the tirne and mannel provided herein against such property owner; l:roviclecl furlher- that any actions taken to enfot'ce delinquent Special Tax liens,tuli u"-tut"n only *irtent with Sections 53356.1 through 53356'7, both inclusive, of the Government Code of the State of California; and provided furthel, that the Community Facilities District shall not be obligated to enforce the lien of any delinquent installmenr of the Special rax for any Fiscal Year in which the community Facilities Distlict shall have received one hundr-ed percent iroox) of the amount of such installment fi'om the County of Sacramento putsuant to the so-called "Teeter Plan'"
Section 5.1 1 . Furtlter Assurances' The Community Facilities District will adopt' deliver, execute, make and file any and all further assurances, insttuments and resolutions as may be reasonably necessary or proper to carry out the intention ol to facilitate the performance heleof and for the better urrrri,lg'and confirming unto the Holders of the rights and benefits provided herein, including w-ithout limitation the filing of all financing statements, agreenents, instruments or other documents in the {brms and in tlte locations necessary to perfect alld protect, and to continue the perfection of" tlie pledge of the Special Taxes provided heleitt to the fullest extetrt possible under applicable law of the State of caiifornia. Fulther, the community Facilities Distlict covenants to 'ot
uppro.r. any amendments, changes or modifications relating to development o1' 4165-(1930-38ii3 5
34 Page 141
12/12/2023 Item No.2.
the property within the hnproven-ient Area that would reduce the atnount of tlie Maximum paciiities Special Tax less pliority Adrninistrative Expenses to equal less than one hundred ten perce't (11b%) of the surn of the Annual Debt Service on the Bonds in any year until the maturity date for the Bonds.
ARTICLE VI
THE TRUSTEE
Seotion 6.01. The U.S. Bank Trust Company, National Association at its Corporate Trust Office in San Francisco, California, is hereby appointed Trustee for the purpose of receiving ail money which the Community Facilities District is requiled io transfer to it hereunder and fot'applying and using such money as provided herein for the purpose of paying the interest on and plincipai of and redemption premiums,
Facilities District agrees that it will at all times maintain trust office in Los Angeles or San Francisco, Califbrnia' if any, on the Bonds. The CommunitY
a Trustee having a designated corporate
The Trustee and the Community Facilities District shall, prior to an Event of Default, and after the curing or waiver of all Events of Default which may have occurred, perform sgch duties and only such Juties as are specifically set forth in tliis Indenture. The Trustee shali, during the existence of any Event of Default (which has not been cured or waived), exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise u, u pn-rdent person would exercise or use under the circumstances in the conduct of his or her own affairs.
The Community Facilities District may remove the Trustee initially appointed and any successor thereto and may appoint a successor or successors thereto by an instrument in writing; plQ.vidgd, that any such successor shall be a bank or trust company doing business and havinf uT.rlgrrut.d corporate trust office in Los Angeles or San Francisco, California, having a combined "upitul
(exclusive of bor"rowed capital) and sr,uplus of at least one hundled million doilar-s ($100,000,000) and subject to supervision or examination by a federal or state banking authority. If such bank or trust company publishes a report of condition at least amuaily, pursuant to law oi to the requirements of any supervising or examining authority above ref'erred to, then for the purpose of thii Section the combined capitai ancl surplus of such bank or trust company shall be d-eemed to be its cornbined capital and surplus as set forth in its most recent report of condition so published. The Trustee may at any time resign by giving writtelr notice of such resignation to tlie Comrnunity Facilities District and by giving notice of such resignation by mail pursuant to Section 10.14 to the Holders, and upon receiving such notice of resignation, the Cornmunity Facilities District shall pr-omptly appoint a successor Trustee by an itrstrument in writing having the qualifications r-equired hereby.
-Auy
resigriatior-r or rerroval of a Trustee and appointment of a ,r"..rro, Trustee sirall becorne effective only upon the acceplance of appointnent by the successor Trustee. If within thirty (30) days after notice of the removal or lesignation of the Trustee no successor Tr-ustee shall have been appointed by the Community Facilities District and shall have accepted such appointment, the removed or resiguing Tmstee rrray pelition, at the expense of the Community Facilities District, any cour'l of competent julisdiction for the appointment of a successor Tmstee, which court may thereupon. after such notice. if any, as it rnay 'l I 65-69i0-3883 5
35
12/12/2023 Item No.2.
deem pr.oper.and prescribe and as may be required by law, appoint a successot'Trustee having the qualifi cations required herebY.
Any cornpany into which the Tlustee shall be rnerged or converted or with which it may be consolidated or any company resulting fi'om any lRerger, convelsation or consolidation to which it shall be a par-ty or any company to which the Trustee nray sell or trausfer all or substantially all of its corpor"ate trust burin"tt, so long as such company shali meet the requiremenis set forth in this Section, shall be the successol'to the Trustee and shall be vested with all of the trusts, powers, discretions, immunities, privileges and all other matters as was its predecessor, without the execution or filing of any paper or furlher act, anything herein to the contrary notwithstanding.
Section 6.02. Liability of the TruStqq. The lecitals of facts, agreements and covenants contained herein und in tl't. Bo"dr shall be taken as statements, agreements and covenants of the community Facilities District, and the Trustee shall not assume any responsibility for the correctness of the iame and does not make any representation as to the sufficiency or validity hereof or of tire Bonds or of ti're Special l'ax, or as to the financial or technical feasibility of the acquisition and construction of any of the Facilities, and shall not incur any responsibility in respecithereof other than in connection with the rights and obligations expressiy assigned to or imposed upon it herein or in the Bonds, and shail not be liable in connection with the performance of its duties hereunder except for its own negligence or willful misconduct. The Trustee shall not be liable for any enor of judgment made in good faith, unless it shall be proved that the Trustee was negligent in ascertaining-the pertinent facts, and no provision hereof shall require the Trustee to .xpelrior risk its own nrnas or otherwise incur any liability for the performance of its duties hereunder, or in the exercise of any of its lights or powelS hereunder' The Trustee shall not be liable for any error ofjudgment made in good faith by a Responsible officer unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts, and the Trustee shall be entitled to advice of counsel of its selection conceming all matters of trust and its duties hereunder and the advice of such counsei or any Opinion of Counsel shall be fuil and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in r.liut .. thereon. The Trustee may execute any of the trusts o' powers set forth ierein and perform the duties required of it hereunder by or through attorneys, agents or attorneys, and the Trustee shall not be liable for the negligence or misconduct of any agent, attorney or certified public accountant selected by it with due care' The Trustee shall, at all rimes, perfoun such duties and only such duties as are specifically set forth herein, ancl no implied duties or obligations shall be read herein against the Trustee. At no tirne shall the Trustee be a fiducialy or have fiduciary duties hereunder.
The Trustee shall not be bound to recognize any person as the Holder of a Bond unless and until such Bond is submitted for inspection, if required, and such Holder's title thereto is certified to the Trustee in a w'ritten instrument, upon which the Trustee sliall be entitled to conclusively rely.
The Tnrstee shall lot be liable witl'r lespect to any action taken or omitted to be taken by it in good faith il accordance with the direction of the Holders of not less than a majority 4 l 65-6930-3litii 5
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in aggregate prilcipal amount of the Bonds exercising any trust or power confetred upon the Trr,rstee hereunder.
The Trustee has no obligation to the Holders and shall incur no liability for the payment of the interest on, principal of or redemption premiums, if any, with respect to the Bonds fi"om its own funds. l-he duties and obligations of the Tlustee shall be deterrnined solely by the express provisions of this Indenture, and the Trustee shall perform such duties and obligations as ur. ,p""ifi.ally set forth in this Indenture and shall not be liable except for its negligence or wiilful misconduct, and no implied covenants or obligations shall be read into this Indenture against the Trustee.
The Trustee shall not be deemed to have knowledge of any Event of Default hereulder unless and until a Responsible Officer at the Trustee's Corporate Trust Office responsible for the administr.ation of the Trustee's duties and obligations hereunder shall have actual knowledge thereof or the Trustee shall have received written notice thereof at its Corporate Trust Office. The Trustee shall not be bound to ascertain or to inquire as to the performance or observance of any of the agreements, conditions, covenants or terms herein or of any of the documents executed in connection with the Bonds, or as to the existence of an Event of Default hereunder.
No provision hereof shall require the Trustee to expeud or risk its own funds or otherwise i'cur any financial liability in the performance or exercise of any of its duties hereunder, or in the exercise of its rights or powers. The Trustee shall be entitled to interest on all amounts advanced to it hereunder. at its prime rate plus two percent (2%),but not greater than twelve percent {12%) per annum.
The Trustee shall have no responsibility, opinion or liability with respect to any information, Staternent or tecital in any offering memorandum or other disciosure material prepared or distributed witli respect to the issuance of the Bonds.
All rights, privileges, immunities, indemnifications and releases from liability granted herein to the lrustie shall extend to the directors, employees, officers and agents thereof' In no evelt sha1l the Trustee be responsible or liable for special, indirect, punltlve or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) iriespective of whethei the Trustee has been advised ol the iikelihood of such loss or danrage and regardless of the forrn of action'
Section 6.03 Comoensation and cation of the "[*r'rrstee. The ComrnunitY Facilities District agrees 10 pay to the Trustee from time to time, and the Trustee shall recerve compensatlon for all services rendered by it in the exercrse and performance of any of the duties and obligati ons of the Trustee hereunder, as mutually and previously agreed upon in writing, and the ComrnttnitY Facilities District will pay or reimburse the Trustee upon its request for all expenses, disbursem ts and advances incun'ed or made by the'frustee and its affiliates, directors,en employees or agents in accordance with any of the provi sions hereof (including the reasonable compensation and the expenses and disbursements of its counsel and ofall persons not regulally in its employ) excePt ar:Y such expense, disbursement or advance 4 r 65-6930-iti83 :
37 as may arise from its negligence
12/12/2023 Item No.2.
or willful misco'duct. The Community Facilities District, to the extent pelnritted by law, agrees to indemnify, defend and hold harmless the Trustee against any and all loss, datnages, clainrs' iiability or expense incurled without negligence or willful misconduct on the part of the Trustee aLisi'g out oi or in connection with (i) ihe exercise or performance of any of its duties or obligations hereunder, or (ii) any untrue siatement or alleged untrue statement of any material fact or omission or alleged omission to state a material fact necessary to make the statements made, in the light of the circumstances under which they were made, not misleading in any official statement or oti'er. offering circular utilized in connection with the sale of any of the Bonds, including costs and expenses (including attorneys' fees and expenses) of defending itself against any claim or liability in connectior, ]witt ths exercise ol perforrnance of any of its duties and obligations l.,ereunier. The rights of the Trustee and the obligations of the cornmunity Facilities District under this section shall survive the discharge of the Bonds and the resignation or lemoval of the Trustee' Section 6.04. Notice to the Trustee. The Trustee shall be protected in acting upon any Bond, certificate, "ons.rrt, noti."3pittion, repolt,- request, resolution or other document or pup", believed by it to be genuine and to have been signed or plesented by the ploper pafiy or parties. The Trustee may-consult with counsel of its selection, including, without lirnitation, counsel to the Community Facilities District, with regard to legal questions, and the opinion of such counsel shall be fuli and complete authori zation and protection with lespect to any action taken or suffered hereunder in good faith and in accordance therewith' Whenever in the administration of its rights and obligations hereunder the Trustee shall deem it necessary or desirable that a matter be established or proved prior to taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specificllly prescribed) may, inthe absence of negligence ol willful misconduct on the part of the Trustee, bl ieemed to'be conclusively established or proved by a certificate of the Community Facilities District or an Accountant's Report, which shall be full warrant to the Trustee for any action taken or suffered under the provisions hereof upon the faith thereof, and on which the Trustee rnay conclusively rely, but ln its reasonable judgment the Trustee may, in lieu thereof, aceept other evidence of such matter or may require such additional evidence as it may deem reasonable.
ARTICLE VII
I]MI]NT OF OR SU TO THE IND ]ITE
Section 7.0i Procedure for ofor S lement e Indenture
(a) Amendment or supplement -with coDsent of . Hgldels. The Indentureandthe'ieh@eConrmunityFacilitiesIJistrictandofthe Holders may be uro.lnd.d ol- ,.tppl.*ented at any time by the execution and delivery of a Supplemenial Indenture by thl Community Facilities Distlict and the Trustee, which S.,ppt"-.ntal Indenture shall become binding when the written consents of the Holders of ,i"iy p"r".nt (60%) or more in aggregate principal amount of the Bonds then Outstanding, exclusive of Bonds disqualified as providld in Section 7.02, shall have been filed with tlie Tr.ustee; prgvjdsd, that no such amendrnent or supplement shall (1) extend the rnaturity of J r 65-6930-i883 5
38 Page 145
12/12/2023 Item No.2.
or reduce the inter-est rate on or otherwise alter ol irnpair the obligation of the Community Facilities District to pay the intelest on or principal of ol Minimurn Sinking Fund Account payment for or redeinption premium, if any, on any Bond at the tirne and place and at the rate and in the currency and from the funds provided herein without the express written consent ofthe Holder of such Bond, or (2) permit the issuance by the Community Facilities District of any obligations payable from the proceeds of the Special Tax other than the Bonds as provided herein, or jeopardize the ability of the Community Facilities District to levy and iollect the Special Tax, or (3) reduce the percentage of Bonds required for the written consent to any such amendment or supplement, or (4) modify any rights or obligations of the Trustee without its prior written assent thereto. (b) Amqndment or Supplement Without Consent of Holders, The Indenture and the righii and obligations of the Community Facilities District and of the Holders may also be amended or supplemented at any time by the execution and delivery of a Supplemental Indenture by the Community Facilities District and the Trustee, which Supplemental Indenture shall become binding upon execution without the prior written conient of any Holders, but only to the extent permitted by law and after receiving an Opinion of Counsel, stating that the Supplemental Indenture is the valid and binding obligation of the Community Facilities District, and only for any one or more of the following pul'poses
(i) To add to the agreements and covenants required herein to be performed by the Community Facilities District other agreements and covenalts thereafter to be performed by the Community Facilities District which shall not (in the opinion of the Community Facilities District) adversely affect the interests of the Holders, ot to surrender any r^ight or power reserved herein to or confened herein upon the Community Facilities birtti"t which shall not (in the opinion ofthe Community Facilities District) adversely affect the interests of the Holders;
(ii) To make such provisions for the purpose of curing any arnbiguity or of curing, correcting or supplementing any defective provision contained herein or in regard to questions arising hereunder which the Community Facilities District may deern desirable or necessary and not inconsistent herewith and which shall not (in the opinion of the Community Facilities Distlict) adversely affect the interests of the Holders; (iii) To autliorize the issuance of Additional Bonds and to provide the conditions and tenns under which the Additional Bonds rnay be issued;
(i") To autholize the issuance under and subject to the Law of any refuncling bonds for any of the Bonds and to provide the conditions and terms under u,hich sttch refunding bonds may be issued, (v) To make sucli additions, deletions or rnodifications as may be necessary oI applopriate to ensure compliance with Section 148(f) of the 4 I 6.5 -(r930--i 8113.-5
39
12/12/2023 Item No.2.
Community Facilities District shall not be deemed Outstanding for the purpose other action or any caleulation of Outstanding Bonds provided for in this Article and shall not be entitled to consent to or take any other action provided for in Code relating to the reqtiiled rebate of excess investment earnirigs to the United Statei of Arnerica, or otherwise as may be necessary to eusut'e the exclusion fi.om gross inconre for purposes of federal income taxation of the interest on the Bonds or the exemption of such interest fi'orn State of California personal income taxes; or
("i) To make such additions, deletions or modifications as may be necessary or appropriate to maintain any then current rating on the Bonds.
Section 7.02 Disqualified Boncls. Bonds owned ol held for the account of the ofany consent or
ol in Article VIII,
this Article ol in
Afticle VIII
Section 7.03 Endorsement or Reolacement of Bonds After Amendment ot Suunlenreut. After the effective date of anY action taken as hereinabove provided, the Community Facilities District may determine that the Bonds may bear a notation by endorsement in fonn approved by it as to such action, and in that case upon demand of the Holder of any Bond Outstanding on such effective date and presentation of his or her Bond for such purpose at the Corporate Trust Office of the Trustee a suitabie notation as to such action shail be made on such Bond. If the CommunitY Facilities District shall so determine, new Bonds so modified as, in the opinion of the CommunitY Facilities District, shall be necessary to conform to such action shall be prepared and executed, and in that case upon demand of the Holder of any Bond Outstanding on such effective date such
exchanged at the CorPora
then Outstanding.
new Bonds shall, uPon surrender of such Outstanding Bonds, be te Trust Ofhce of the Trustee, without cost to each Holder, for Bonds Section 7.04 Amendment or SupPl bv Mutuai Consent The provisions of or supplement as to anY
s made on such Bonds.
this Arlicle shall not prevent any Holder from accepting any amendment particular Bonds held by him or her; plovided, that due notation thereof i
ARTICLE VIII
OFD A
Section 8.01 Events of Default and Remedies of Holders. If one or more of the following events (herein "Events of Defauit") shall happen, that is to say:
(a) if default sliail be made by the Community Facilities District in the due and pulctuai payment of any interest on or principal of or Minimum Sinking Fund Account payment for uny of the Bonds when and as the same shall become due and payable;
(b) if default sliall be made by the Community Facilities District in the obselvance o, p"iforrlrance of any of the other agleetnents or covenants contained liereirr required to be observed or perfbrmed by it, and such default shall have cotltinued for a 40 4 165-f)930-3883 i Page 147
12/12/2023 Item No.2.
period of thir-ty (30) days after the Community Facilities District shall have been given notice in writing of such default by the Tlustee;
(c) if default shall be made by the Conrmunity Facilities District in the due ald puuctual payment of any indebtedness on a parity with or senior to the Bonds; or (d) if the Community Facilities District shall file a petition or arlswer seeking arrangement or reorganization under the federal bankruptcy laws or any other applicable law of the United States of America or any state therein, or if a court of ctmpetent jurisdiction shall approve a petition filed with or without the consent of the Community Facilities Districl seeking al'rangement or reorganization under the federal bankruptcy laws or any other applicable law of the United States of America or any state therein, orl if under the provisions of any other" law for the relief or aid of debtors any court of competent jurisdiction shall assume custody or control of the Community Facilities District or of the whole or any substantial part of its properly; the' in each and every such case duling the continuance of such Event of Default any Holder shall have the right for the equal benefit and protection of all Holdels similarly situated:
(a) by mandamus or other suit or proceeding at law or in equity to enforce his rights against the City Council or the Community Facilities Distlict or any of the offrce6 oi ,*p'ioyees of the Community Facilities District, and to cornpel tlie City Co,ncil or the Community Facilities District or any such officels or employees to perform and carry out their duties under the Law and the agreements and covenants with the Holders contained herein;
(b) by suit in equity to enjoin any acts ol things which are unlawful or violate the rights of the Holders; or
(c) by suit in equity upon the nonpayment of the Bonds to require the City Coulcil or tlie Community Facilities District or its officet's and employees to account as the trustee ofan exPress trust.
Non-Waiver. Nothing in this Article or in any other provision herein or impair the obligati on of the Community Facilities District, which is absolute aud unconditional, to pay the interest on and principal of and redemption premiums, if any , on the Bonds to the respective Holders of the Bonds at the respective dates of maturity or upon redemption pdor to matultty as pro
otirer funds as provided herein, or shall
absolute and unconditional, to institute
embodied helein and in the Bonds.
vided herein from the proceeds of the Special Tax and the affect or impair the right of such Holders, which is also snit to enforce such payment by virtue of the contract
A waiver of any Event of Default or breach of duty or contract by any Holder shall not aflect any subsequent Event of Default or breach of duty or contract and shall not impair any rights or remedie, on uny such subsequent Event of Default or breacl-r of duty ot' contract. No dJay or- omission by any Holder to exercise any right or remedy accrtting Llpon any Event of Default or breach of Outy or contract shall impair any such light or renredy or shall be construed to be a waiver of any such Event of Default or bleach of duty or contract or an acquiescence Section 8.02
or in the Bonds shall affect
a l6-5-(,910-38ti-] 5
41
12/12/2023 Item No.2.
therein, ald every light and lernedy cont-erled upou the Holders by the Law ol hereby may be enforced and exercised from tirne to time and as often as shall be deemed expedient by the Holders.
If a1y action, proceeding or suit to enfbrce any right or exercise any remedy is abandoned or determined advelsely to any Holder, tlie Community Facilities District and such Holder shall be restored to their former positions, rights and remedies as if such action, proceeding or suit had not been brought or taken-
Section 8.03. Remedies Not Exclusive. No remedy herein conferred upon or reserved to the Holders is intended to be exclusive of any other remedy, and every such remedy shall be cumulative and shall be in addition to evely other remedy given hereunder or now or hereafter existing at law or in equity or by statute or otherwise, and may be exercised without exhausting and without regard to any other remedy conferred by the Law or any other law.
ARTICLE IX
DEFEASANCE
Section 9'01 ' Discharge of tllq llonds'
(a) If the Community Facilities District shall pay or cause to be paid or there shall otherwise be paid to the Holders of all Outstanding Bonds the interest thereon and the principal thereof and the redemption premiums, if any, thereon at the times and in the manner slipulated therein and herein, then all agreements, covenants and other obligations of the Community Facilities District to the Holders of such Bonds hereunder shali ther.eupon cease, terminate and become void and be discharged and satisfied. In such event, the Trustee shall execute and deliver to the Community Facilities District all such instruments as may be necessaly ol desilable to evidence such discharge and satisfaction, and the Trustee shall pay over or deliver to the Community Facilities District for deposit in the Cornmunity Facilities Fund all money ol securities held by it pursuant hereto which are not required for the payment of the interest on and principal of and ledemption premiums, if any, on such Bonds.
(b) Any Outstanding Bonds shall on the maturity date or redemption date thereof be deemed to have been paid within the meaning of and with the effect explessed in subsection (a) of tiris Section if there shall have been irevocably deposited with the Trustee money wiiich is sufficient to pay the interest due on such Bonds on such date and the principal and redei-nptior: premiums, if any, due on such Bonds on such date. (c) Any Outstanding Bonds shall prior to the maturity date or redemption date thereof be deemecl to Jtave been paid within the meaning and with the effectixpressed in subsection (a) of tliis Section if (1) in case any of such Bonds are to be redeemed on any date prior to their rnaturity date, the Community Facilities District shall have agreed to mail a notice of redeniption pursuant to Section 10.14 to the respective Hoideri of all sucl-r Outstanding Bonds and to the securities depositories or securities information services selectecl by it pursuant to Section 3.03, (2) there shall have been filed with the Commurrity Facilities District and the Trustee an Opinion of Counsel to the effect 4165-6910-3s83 5
A')-tL
12/12/2023 Item No.2.
that the payment of such Bonds has been provided for in the manner set forth herein and that all obligations of the Community Facilities District with respect to such Bonds have been discharged and satisfied and there shall have been deposited with an escrow agellt meeting the iequirements of a successor trustee set forth in Section 6.01 or the Trustee either 11 mon.y in an amount which shall be sufficient to pay when due tlie interest on and principal of ani r-edemption premiums, if any, due and to become due on such Bonds on unO piioL to the date scheduled for redemption or maturity date thereoi as the case may be and/or (ii) Federal Securities whicli are not subject to redemption except by the holder thereof prior to maturity (including any Federal Securities issued or held in book-entty form op the books of the Department of the Treasury of the United States of America), the interest on and principal of which when paid will provide money which, logether with the money, if any, d.porit.d with such escrow agent meeting the requirements of a successor trustee set forth in Section 6.01 or the Trustee at the same time, shall be sufficient to pay when due the interest on and principal of and redemption premiums, if any, due and to become due on such Bonds on and prior to the date scheduled for redemption or matulity date thereof, as the case may be, as evidenced by an Accountant's Report on file with the Commu'ity Facilities District and the Trustee, and (3) in the event such Bonds are not by their terrns subject to redemption within the next succeeding sixty (60) days, the Community Facilities District shall have agreed to mail pursuant to Section 10.14 a uotice to the Holders of such Bonds and to the securities depositories and securities information services selected by it pursuant to Section 3,03 that the deposit required by clause (2) above has beep made with such escrow agent meeting the requirements of a successor trustee set forth in Section 6.01 or the Trustee and that such Bonds are deemed to have beerr paid in accordance with this Section and stating the maturity dates or redemption dates, as the case may be, upol which money will be available for the payment of the principal of and redemption premiums, if any, on such Bonds'
Section 9.02. Unclaimed lyhley. Anything contained herein to the contrary notwithstalding, any money h.ld by th" Tt"st." in trust for the payment and discharge of any of the Bonds o. uny inierest thereon which remains unclaimed for two (2) years after the date when such Bonds or interest thereon have become due and payable, either at their stated maturity dates or by call for redemption prior to maturity, if such money was held by the Trustee on such date, or for iwo (2) years after thl date of deposit of such money if deposited with the Trustee after the date when such Bonds or interest thereon became due and payable, shall be repaid by the Trustee to the Comrn,niiy Facilities District as its absolute property free from trust for deposit in the Community Faciiities Fund and for use in accordance with the Law, and the Trustee shall thereupon te released and discharged with respect thereto and the Holders shall look only to the Cornmunity Faciiities District fol ihe payment of such Bonds and interest thereon; plqvglgg[, that before the Trustee shall be required to rrake any such repayment the Community Facilities District shall mail pursuant to Section 10.14 a notice to the Holders of all Outstanding Bonds and to such securities depositor-ies and seculities information services selected by it pursuant to Section 3.03 that such money remains unclaimed and that after a date named in such notice, whicli date shall 'ot be less than thirty (30) days after the date of the mailing of such notice, the balance of such rnoney then *nclaimed will be r.eturned to the Community Facilities District for deposit in the Community Facilities Fund.
.l r65-6930-38lJ3 5
AAL+J
12/12/2023 Item No.2.
ARTICLE X
MIS US
Section 10.01 .
Tax
Cornrnunity Facilities District shall not be required to advance any money delived frorn anY source of income other than the Proceeds of the Special Tax net of Priority Administrative ExPenses and the other funds provided herein for
premiums, if anY, on the Bonds.
the payment of the interest on or plincipal of or redemPtion The Bonds are special tax obligations of the Comrnunity Facilities District and the interest on and principal of ani redemption premiums, if any, on the Bonds are payable solely fi.om the p.o.".i, oiirt" special rax (including uny prepayments thereof and proceeds frorn the sale of property collected pursuant to the foreclosure provisions of the_ Indenture for the delinquency of the Special Tax), net of Priority Administrative Expenses, and amounts in cerlain funds and accounts established in the Indenture, and the Cornmunity Facilities District is not obligated to pay the Bonds except from such funds. The General Fund of the city and the funds of the Community Facilities Diitrict are not liable, and neither the full faith and credit of the Cornmunity Facilities District nor the City are pledged _for the payment of the interest on or principal of o, ,.a".rrption premiums, if any, on ihe Bonds, and no tax or assessment other than ine speclat Tax shali "ve, b" levied or collected to pay the interest on or principal of or redemption pr"*iu.nr, if a1y, on the Bonds. The Bonds are not securecl by a legal or equitable pledge of or charge, lien or encumbrance upon any property of the community Facilities District or any of its income or receipts except th. pror".dt of tltt" Special Tax (including any prepayments thereof and proceeds from tire ,al. of prop"rly collected pursuant.to the foreclosure provisions of the Indenture for the delinquency ortne speciat Tax), net of Priority Administlative Expenses, and amounts in certain funds and accounts established in the Indenture, and neither the payment of the interest on or principal of or redemption premiums, if a1y, o1 the Bonds is a general debt, liability ot' obligation of the Community Facilities District. The Bonds do not constitute an indebtedness of the Community Facilities District within the meaning of any constitutional ol statutory debt limitation or restriction, and neither the city council nor the community Facilities District nor any officer o,.
"*ploy*e
thereof shall be liabie for the payment of the interest on or principal of or reiemption pr.*iu*r, if any, on the Bonds otherwise than from the proceeds of the Special Tax, net of priority Administrative Expenses, and such othel funds as provided in the Indenture.
Section 10.02. Benefits of the Indenture Limited to Cefiai! Parties' Nothing containedlrerein,eXpIeSSo'i@etoanyentityoIpeISonot]rertharitheCity Council, the Community Facilities District, the Trustee, and the Holdels any right, remedy or claim under oi by 1..uron hereof, and any agreement or covenant requir-ed herein to b_e perforrned by or on behalf of the city council or'the community Facilities Distlicl or ariy officer or employee thereof shall be for the sole and exclusive benefit of the Tt'ustee and the Holders.
Sectiori 10.03. Successor Is Deemed Included in All References.to PredeqEssQt'. whenever either the city cor*it or th" crn*unity Facilities District or any officer or employee thereof or of the City is naro"d or refeued to herein, such reference shall be deemed to include the successor to the po**ru, duties and functions with respect to the administration, control and 4 i65-6930 3833 5
44 Page 151
12/12/2023 Item No.2.
management of the Community Facilities Distlict that are presently vested in the City Council or the Coriimunity Facilities District or such officer ol employee, and all agreements and covenants required herein to be perforrned by or on behalf of the City Council or the Cornmunity Facilities District or any officei or employee theleof shall bind and inure to the benefit of the respective successors thereofwhether so expressed or not'
Section 10.04. Execution olDocurnents by Flolelers. Any declaration, request or other instrlment which is permitted or required herein to be executed by Holders may be in one or more instruments of similar tenor, and may be executed by Holders in person or by their attorneys duly authorized in writing. The fact and date of the execution by any Holder or his attorney of any declaration, request or other instrument or of any writing appointing such attorney may be proved by the certificaie of any notary public or other officer authorized to take acknowledgments of deeds to be recorded in the state oi territory in which he or she purports to act that the person signing such declaration, request or other instrument or writing acknowledged to him or her the execution thereof, or by a1 affidavit of a witness to such execntion duly sworn to before such notary public or other officer, The ownership of Bonds and the anount, maturity, number and date of holding the same shall be provided by the registration books required to be kept by the Trustee pursuant to Section 2.09.
Any declaration, request or othel instrument or writing of the Holder of any Bond shall bind all future Holders of such Bond with respect to anything done or suffered to be done by the Community Facilities District in good faith and in accordance therewith' Section 10.05. Investment il1 and F All
money held by the Trustee in any accounts and funds established helein shall be deposited in time or demand deposits in any state or nationally chafteled bank or trust company, including the Trustee, or any state or federal savings and loan association, and shall be secured at all tirnes by such obligations as are required by law and to the fuliest extent required by law, except such money that is at the time invested in accordance with tiris Section. Any money in the Acquisition and Construction Fund and in tlie Special Tax Funrl and iu the Redemption Account shall be invested by the Trustee pursuant to a Written Request of the Comrnunity Facilities District received by the Trustee at least three (3) days before making any such investment in those Permitted Investments specified in such Written Request of the Comtnunity Facilities District that mature not later than the date on which it is estimated that such money wtli be required to be paid out heteunder, and any money in a Bond Reserve Account shall be invested by the Trustee pursuant to a Written Request of the CornrnunitY Facilities District received by the Trustee at least three (3) days before making any such investment in those Pennitted Investments specified in such Written Request of the Community Facilities District that mature not more than five (5) years from the date of purchase by the Trustee, or the final maturity date of any Outstanding Bonds, whichever is earlier; and the Trustee may conclusivelY relY and clelennine that any investment specified in any such Written Request of the Community Facilities Distlict is a Permitted Investment ot a Federal Security, as the case may be, heleunder; plqrlggd, that in the absence of written instructions from the Comrnunity Facilities District regalding such iuvestments, such money shall be held uninvested. The Trustee (or any affiliate theleof) may act as principal or agent in the making of any investment hereunder and may impose its customary charges therefor, and shall not be responsible fol any losses, taxes, fees or other charge sullbre d in connection with any iuvestment, relnvestment or liquidation of investments made iri acco 4 I 65-(,930-1883 5
45 rdance helewith. Notwithstar-rding
12/12/2023 Item No.2.
anything in the Indenture to the contrary, for purposes of any time lirnitation ou the maturity of an i'vestment of moneys in the funds and accounts held thereunder, such investment shall be deemed to satisfy such tirrre limitatiorr ii by its ter.ms and within such time limitation, the Conmr'lnity Facilities District or the Trustee has the right, fol any purpose pennitted or required under the Indeltur-e, to demand the repurchase, redemption, withdrawal or termination of such iuveslment and to receive at least the outstanding par amount thereof plus accrued interest, without penalty' All interest leceived ol1 any such money so deposited or invested which exceeds the requirements of the account or fund from which such money was deposited or invested shall (as specified in a Written Request of the Community Facilities District filed with the Tlustee) isubjfct to rhe requirements oi Section 5.03) be deposited in the Redemption Account, and all io*.r on any ..,"h *on.y so deposited or invested shall be borne by the account or fund frorn which the deposit or investment was made.
Section 10.06. Waiver of No member of the City Council or Community Facilities District, shalloffrcel or employee of the City, acting for and on behalf of the be individually or personally liable for the payment of the interest on or principal of or redemption premiurns, if any, on the Bonds, but nothing herein contained shall relieve any membel of the CitY Council or officer oI employee of the City from the performance hereby or by the Law or by any other applicable provisions of ]aw. of any official duty provided
Section 10.07 SI of Bonds un1 Facilities All Bonds
acquired by the Community Facilities District, whether by purchase or gift or otherwise, surienclered to the Trustee for cancellation and destruction by it, and the Trustee shall shall be
send the
Community Facilities District a certificate of such destruction.
Section 10.08. Content of Certifi cates and Renorts. Every cerlificate or report with respect to compliance with an agreement, condition, covenant or term provided herein shall include (a) a statement that the person or persons making or giving such certificate or report have read such agreement, condition, covenant or term and the definitions herein relating thereto; (b) a brief statement as to the nature and scope of the examination or investigation upon which the opinion contained in such certificate or report is based; (c) a statement that, in the opinion of the signers, they have made or caused to be made such examination or investigation as is necessary to enable them to express an inforrned opinion as to whether or not such agreement, conditioll, covenant or term has been complied with; and (d) a statement as to whether, in the opinion of the signers, such agreement, condition, covenant or term has been complied with' A1y such celtificate made or given by an officer of the City, for and on behalf of the Commsnity Facilities District, may be based, insofar as it relates to legal tnatters, Llpon a representation made in an Opinion of Counsel unless such officer knows that the representation with r.spect to the matters upon which liis certificate may be based, as aforesaid, is erroneoLls, or in the exer-cise of reasonable care should have known that the same was effoneous. Ar-ry such Opinion of Couusel may be based, insofar as it lelates to factual matters inforniation rvith tespect to which is in the possession of the Cornmunity Facilities District, upon a represelttation by an officer or officers of the City unless the counsel giving such Opinion of Counsel knou's lhat the representation with respect to the matters upon which his representation may be based, as 4 l6i-6930-3S83 -5
46
12/12/2023 Item No.2.
aforesaid, is erroneous, or in the exercise of reasonabie care should have known that the same was Section 10.10. cl and The
headings or titles of the several articles and sections hereof and the table of contents aPPended hereto shall be solely for convenience ofreference and shall not affect the construction, effect or meaning hereof, and words of any gender shall be deemed and construed to inciude all genders All references herein to "Articles," "sections" and other subdivisions are to the corresponding articles, sections or subdivisions hereof; and the words "hel'eby," "hefein," "he eof," "hgretor" "herewith" and''hereunder" and other words of similar import refer to the Indenture as a whole and not to any particular article, section or subdivision hereof.
Section 10.11. partial Invaliclitv. If any one or more of the agreements, conditions, covenants or ter-ms o, portions th..*f r"qnired hereby to be observed or performed by the Community Facilities Dstrict or the Trustee should be contrary to law, then such agreement or agreementi, such condition or conditions, such covenant ol' covenants or such tetm or terms or stlch portions thereof shali be null and void and shall be deemed separable from the remaining agreements, conditions, covenants or terms or portions theleof and shall in no way affect the ,rltiaity hereof or of the Bonds; and the Holders shall retairr all the rights and benefits accorded to them under the Law or any other applicable provisions of law. The Community Facilities District hereby declares that it would bave executed the Indenture and each and every other article, section, paragraph, subdivision, senterlce, clause and phrase hereof and would have authorized the issuance of the Bonds pursuant hereto irrespective of ihe fact that any one or more of the articles, sections, paragraphs, ,ubdiuirions, sentencls, clauses or pluases hereof ot the application thereof to any p..ron or circurnstance may be held to be unconstitutional, unenforceable ol invalid.
Section 10.09. Maintenance o1'Accounts and Fuuds. Any account or fund required herein to be established ond rrruintuin.a by th.lrustee may be rnaintained by the Trustee in its accounting lecords in its customaly manner either aS an account or a fund, and may, for the pulposes if such accounting records, any audits thereof and any financial reports or statements witir respect thereto, be treaied either as an account or as a fr.rnd; but all such accounting lecords with respect to all such accornts and funds shall at all times be maintained by the Trustee in accordance with trust industry standards.
Sectio' 10,12. Execution in Counterparts and Electronie Execution. The Indenture_ may be executecl in several "*nt"rpurt., r*tr of which shail be deemed an original, and all of whlch shall constitute but one ancl the same instrument. TJre exchange of copies of the Indenture and of signature pages by facsimile or PDF transmission shall constitute effective execution and delivery ortn.lnde-nture-as to the parlies hereto and may be used in lieu of the original Indenture and signature pages for. all purpor.t. Each party agrees thal the electronic siguatures, whether digitaior enciypied, of the paities included in this Inclenture are intended to authenticate this wr-iting and to have the .um. forr. and effect as manual signatures. Electronic signature means any electronic sound, symbol, or process attached to ol logically associated with a record and executed a1d adoptej Uy
" paily with the intent to sign such record, inclr-rding l'acsimile or email effoneous
electronic signatures
4165-(r930-38li.l 5
47 Page 154
12/12/2023 Item No.2.
Section 10.13. (iovenrins, l,aw. The Indenture shall be governed by and construed and interpleted in accordallce with the laws of the State of California' Section 10.14. Notices. All written notices to be given hereunder shall be given by mail or electronic means to the piLty errtitled thereto at its address set forlh below, or at such other address as such party may provide to the other parties in writing from time to time, nanrely:
If to the Commulrity Faciiities District:
City of Folsom
50 Natoma Stleet
Folsom, California 9563 0
Attention: Finance Director
Fax:916-985-0870
Email: [email protected]
If to the Trustee:
U.S. Bank Trust Compally, National Association
One California Street, Suite 1000
San Francisco, CA 94111
Attention: Global CorPorate Trust
Fax: (41 5) 677-3596
Email: [email protected]
Each such notice, statement, demand, consent, approval, authorization, offer, designation, request or other communication hereunder shall be deemed delivered to the parly io whom it is addressed (a) if personally served or delivered, upon delivery, (b) if givenby electronic communication, upon the sender's receipt of an appropriate answer back or olher wr-itten acknowiedgment or confirmation of receipt of the entire notice, approval, demand, report or other communication, (c) if given by first class mail deposited with the United States mail postage plepaid, seventy-two (72) hours after suchnotice is deposited with the United States mail, (d) if given by overnight courier, with courier charg"s prepaid, twenty-four Q$ hours after delivery to said overnight courier, or (e) if given Ui any other means, Lrpon delivery at the address specified in this Section.
The Trustee shall have the right to accept and act upon instructions, including fulds transfer instructions ("Instructions") given pursuant to this Indenture and delivereJ using Electronic Means ("Electronic Means" shall mean the following communications methods: e-mail, facsimile transmission, secure electronic transmission containing applicable autholization codes, passwords andlor authentication keys issued by the Trustee, or another metl-rod ol system specified by the Trustee as available for use in connection with its servjces heler-rnder); provided, however, that the Community Facilities District shall pr-ovide to the Trustee an incumbency certificate listing officers with the Comrnunjty Facilities District to provide such Instructions and containing specimen signatnres of such officers, which ircumbency certificate shall be amended by the Clmmulity Facilities District whenever a per son is to be added or deleted from the listilig' 4 l 65-6930-3Ssi 5
48 Page 155
12/12/2023 Item No.2.
If the Commulity Facilities District elects to give the Trustee Instructious using Electronic Means and the Trustee in its reasonable judgment elects to act upon such lnstructions, the Trustee's uncierstandilg of such Instructions shall be deemed controlling. The Community Facilities District undeistands and agrees that the Trustee cannot detelmine the identity of the actual sender of such Instructions and that the Trustee shall be entitled to conclusively presume without liability that dilections that purpofi to have been sent by an officer listed tn the incumbency certificate provided to the Trustee have been sent by such officer. The Community Facilities District shall be responsible for ensuring that only officers transmit such Instructions to the Trustee and that the Community Facilities District and all officers a1e solely responsible to safeguard the use aud confidentiality of applicable user and authorization iodes, passwords and/or authentication keys upon receipt by the Community Facilities District. The Trustee shall not be liabie fot any losses, costs claims, or expenses arising directly or indirectly from the Trustee's reliance upon and compliance with such Instr-uctions notwithstanding the fact that such directions conflict or are inconsistent with a subsequent written instruction. The Community Facilities District agrees: (i) to assume all r"isks arising out of the use of Electronic Means to submit Instructions to the Trustee, including without limitation the risk of the Trustee acting on unauthorized Instructions, and tlie risk of interception and misuse by third parties; (ii) that it is f'ully informed of the protectiols and risks associated with the various methods of transmitting Instructions to the Trustee and that there may be more secure methods of transmitting Instructions than the merhod(s) selected by the Community Facilities District; (iii) that the security procedures (li unyl to be foliowed in connection with its transmission of Instructions provide to it a commercially reasonable degree of protection in light of its particular needs and circunstances; and (iv) to notify the Trustee in writing immediately upon learning of any compromise or unauthorized use of the security procedures.
Section 10.1 5. U.S A. Patriot Act The parlies hereto acknowledge that rn accordance with Section326 of the U.S.A. Patriot Act, the Trustee, like all financial institutions and in order to help fight the funding of terrodsm and rnoney laundering, is required to obtain, verify, and record ilformation that identifies each person or legal entity that establisires a relationship or opens an account with the Trustee. The parties to this Indenture agree that they will provide the trustee with such information as it may request in order for the Trustee to satisfy the requirements of the U.S.A. Patriot Act.
Section 1 0.16 Force Maieure. In no event shall the Trustee be responsible or iiable for any failute or delay in the performance of its obligations hereunder arising out of or caused by, dilectly or indilectly, forces beyond its control, including, without limitation, strikes, wolk stoppages, accidents, acts of war or terorism, pandemics, epidernics, quarautine restrictions, recognized public emergencies, civil or military disturbances, nuclear or natural catastrophes or acts of God, and intelluptions, loss or malfunctions of utilities, communications or conrputer software ancl hardware) services; it being understood that the Trustee shall use reasonable effofis which are consistent with accepted practice
soorl as practicable under the circumstances.
s in the banki ng industry to tesume performance as
Section 10.17 Effective Date of the Indenture. The Indenture shall take effect tiom and aftel its execution and delivery
.l t {'j-6930-3881 5
49
12/12/2023 Item No.2.
fRernainder of page intentionally left blank]
,l l6r-69i0--38ti3 5
5i) Page 157
12/12/2023 Item No.2.
IN WITNESS WHEREOF, the City of Folsom Community Facilities District No. 23 (Folsom Ranch) has caused the Indenture to be signed in its narne by the Finance Director' of the iity of Folsom and U.S. Bank Trust Company, National Association, as Trustee, in token of its acclptance of the trusts created hereunder, has caused the Indenture to be signed in its corporate r*rn" by its officer thereunto duly authorized, all as of the date and year first above written.
CITY OF FOLSOM COMMUNITY FACILITIES
DTSTRICT NO. 23 (FOLSOM RANCH)
B
Finance Director of the of Folsom
U.S, BANK TRUST COMPANY, NATIONAL
ASSOCIATION,
as Trustee
By
Authorized Officer
4 I 65-6930-3883-5
Signature Page to lndenture
12/12/2023 Item No.2.
EXHIBIT A
IFORM OF BONDS]
LINITED STATES OF AMERICA
STATE OF CALIFORNIA
COLINTY OF SACRAMENTO
CITY OF FOLSOM
COMMI.'NITY FACILITIES DISTRICT NO. 23
(FOLSOM RANCH) IMPROVEMENT AREA NO. 2
SPECIAL TAX BOND, SERIES 2024
$No.
Interest
Rate
Maturity
Date
Bond
Date
% September 1,
-
[Closing Date]
REGISTERED OWNER: U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, AS
TRUSTE,E FOR THE FOLSOM RANCH FINANCING AUTHORITY
PRINCIPAL AMOUNT DOLI-ARS
The City of Folsom Community Faciiities District No. 23 (Folsorn Ranch), organized and existing under and pursuant to the laws of the State of California (the "Community Facilities District"), for value received hereby promises to pay (but only out of the proceeds of the Special Tax hereinafter refened to, net of Priority Adrninistrative Expenses (as defined in the Indenture hereinafter refeued to), and certain other funds as described herein) to the legistered owner set forth above on the maturity date set forth above (subject to any right of plior redemption herei'after provided fbr) the principal amount set forth above, together with intelest thereon computed o., t6. basis of a 360-day year of twelve (12) 30-day calendar months from the interest payment date next preceding the date of registration of this Bond (unless this Bond is registered fna day cluring the period from the sixteenth (1611') day of the rnonth next preceding an interest puy*.nt date to ,urir int.r.st payment date, both inclusive, in which event it shall bear interest from such interest payment date, or unless this Bond is registered on a day on or before tlie fifteenth (15,h) aay otitre month next preceding the first intelest payment date, in which event it shall bear ilterest fi.om its dated date) until the principal heleof shall have been paid- at the interest rate per annum set fbrth above, payable on September l, 2024, and semiannually thereafter on September 1 alcl March l in eacliyear. The interest on and plincipal of and redenrption premium, 4 I (:5-(:930-3883 i
A-1
12/12/2023 Item No.2.
if any, on this Bold are payable in lawful lnoney of the United States of America at the Corporate Tr.,-rst office (as that term is defined in the Indenture hereinalter lefetred to, and herein the ..Corporate Trust Office") of U.S. Bank Trust Conrpany, National Associatiorl, or any other bank or trust company at its corporate Trust office, which may at any time be substituted in its place as provided in the Indenture hereinafter described, the Trustee of the Conrmunity Facilities District foi tt,e Bonds (the ,.Trustee"). The intelest on this Bond due on ol' before the maturity or prior redemption heieof shall be payable only to the person whose nalne appeals in the registlation books required to be kept by-the Trustee as the registered owner hereof at the close of business as of the fifteenth ( 1 5th) auy of *," rnonth next preceding each interest payment date, such interest to be paid by check mailedby first class mail on each such interest payment date to such registered owner at his or her addreis as it appears on such books, except that in the case of a registered owner of one million dollar.s ($t,OOb,oO0) or more in principal amount of Bonds then Outstanding, payment shall be made at such owner's option by wire transfel on each such interest payment date of immediately available funds to an acciunt in a bank or trust company or savings bank that is a member of the Federal Reserve System and that is located in the continental United States of America according to written instructions provided by such ownel to the f'rustee at least fifteen (15) days before such interest payment date. The principal of and redemption premium, if any, on this Bond shall be payable oniy-to the person whose name appears in such registration books as the register.d owner h.reof, such principal and redemnt]o.n premium, if any, to be paid only on the surre'der of this Bold at the corporate Trust office of the Trustee at maturity or on redemption prior 1o maturitY.
Notwithstandilg the foregoing, the Trustee may agree with the Holder of this Bond that such Holder may, in lieu of sun'endering the same for a new Bond, endorse on this Bond a record of pafiial payment of the principal of this Bond as foilows:
PAYMENTS ON ACCOUNT OF PRINCIPAL
Principal Balance of PrinciPal
Amount Paid Amount UnPaid
Signature
of HolderPayment Date
This Bond is one of a dulY authorized issue of Bonds in the aggregate principal amount of dollars ($[Par Amount]) issued by the Cornrlunity Facilities District located irr the City of Folsom (the "City"), designated the "City of Folsom Community Facilities District No. 23 (Folsom Ranch ) Inrprovernetrt Area No. 2 Special Tax Bonds, Series 2024" (the "Bonds"), which Bonds are issued uuder and pursuant to the Mello-Roos CommunttY Facilities Act of 1982, as ameuded (being Sections 53311 et seq. of the Goverrunent Code of the State of California), and all iaws amendatory thereof ol supplenrerrtal 4 I 65-6t30-1381 a
A-2
thereto (the "Law") and under and
12/12/2023 Item No.2.
pursuant to the provisions of an Inclenttire dated as of January 7,2024 (the "Indenture") betweeu tlre Comrnunity Faciiities Distr.ict and U.S. Bank Trust Company, National Association, as Trustee, all of like tenor and date (except for such va|iations, if any, as may be required to designate varying numbers, maturities, inteiest rates or redernption provisions), and all capitalized terms used herein not otherwise defi1ed shall have the rneanings contained in the indenture. All the Bonds are equally and ratably secured in accordance with the terms and conditions of the Indenture (copies of which are on file at the office of the City Clerk of the City and at the Corporate Trust Office of the Trustee), and reference is hereby made to the Law and to the Indenture and any and all amendments thereof and supplements thereto for a description of the terms on which the Bonds are issued and for the rights of tn. registered owners of the Bonds; and all the terms of the Law and the Indenture are hereby incorporated herein and constitute a contract between the Community Facilities District and the registered owner from time to time of this Bond, to all the provisions of which the registered owner of tnit Bond, by his or her acceptance hereof, agrees and consents; and each taker and subsequent registerecl owner hereof shall have recourse to all the provisions of the Law and the Indelture and shall be bound by all the terms and conditions thereof- The Bonds are issued to provide funds to pay costs of the acquisition and construction of the Facilities. The Bonds aie special tax obligations of the Community Facilities District and the interest on and principal of and redemption premiums, if any, on the Bonds are payable solely from tire proceedi of the Special Tax, net of Priority Administrative Expenses, and certain other funds, as provided in the Indenture, and the Community Facilities District is not obligated to pay them except fi.om the proceeds of the Special Tax, net of Priority Administrative Explnses,,ia su"6 other funds. The General Fund of the City and the funds of the community Facilities District are not liable and neither the full faith and credit of the Community Facilities District nor the City are pledged for the payment of the interest on or principal of or redemption premiums, if any, on the bondr, and no tax or assessment other than the Special Tax shall ever be levied or collected to pay the interest on or principal of or redemption premiums, if any, on the Bonds. The Bonds ur"not secured by a legal ol equitable pledge of or charge, lien or encumbrance upon any property of the Community Facilities District or any of its income or receipts except the pio"".a, of t-rr. Special Tax, net of Priority Aclministrative Expenses, and such other funds, and neither the payment of the interest o:r or principal of or redemption prerniums, if any, on the Bonds is a generai a.Ut, liability or obligation of the Comrrunity Facilities District.
The Bonds maturing on September 1,201-], are subject to mandatory redemption by the Comrnulity Facilities District prioi to their rnaturity date in part on September 1 in each of the years 21l)ilirough 20L_), both years inclusive; and the Bonds maturing on September l, Z1Ll, are s'bject to ilandatoty redemption by the Community Facilities District prior to their *ut*-iiy date in part o1 September I in each of the years 20[ ] through 20L-], both years inclusive, in each case solely fi'orn Minimum Sinking Fund Account Payments deposited in the Sinking Fund Subaccount, upon rnailecl notice as hereinafter provided, at a redemption price of o'e hundred percent (100%)'of the principal amount thereof called for redemption together with accrued interest thereon to the date of redemption'
The Bonds ar-e subject to optional redemption by the Community Facilities District prior to their respective maturity dates as a whole ol in part on any date on or after September 1, )oL'*-], from funds clerived by the Commnnity Facilities District from any source other than such Miiim'nr Si*king Funcl Accotrnt Payments deposited in the Sinking Fund Subaccount or such 4 165-(,930-.18lt3 5
A-3 Page 161
12/12/2023 Item No.2.
prepaynellts of the Special Tax, upon mailed notice as hereinafter provided, at the foilowing r.edemption pdces (computed upon ih" principal amount of the Bonds or portions thereof called lor r.edemption) togethei with accrued interest thereon to the date fixed for redemption, to wit:
rc3% if redeemed on any date on or after September 1, 20L_] through August 31,2A1 1;
102Vo if redeemed on any date from September 1, 20L-] through August 31,20[
-l;
101% if redeemed on any date from September 1,20f I through August 31,2011; and
rcA%if redeemed on September l,20LJ and any date thereafter.
The Bonds are subject to extraordinary redemption by the Community Facilities District prior.to their lespective maturity dates, as a whole or in part on any interest payment date on and after September l, 201 1, from funds derived by the Community Facilities District from prepayments oi the Special Ta>! upon mailed notice as hereinafter provided, at the following iedemption prices (computed upon the principal amount of the Bonds or portions thereof called for redemption) togethei with accrued interest thereon to the date fixed for redemption, to wit:
103% if redeemed on any interest payment date on or after September 1, 20f I through March 1, 20[-];
102% if redeemed on an interest payment date on Septernber 1, 20|- I or March 1, 20L-l;
10]rh if redeemed on an interest payment date on September l, 201 1or March l, 20[-]; and
100% if redeemed on September 1,20L] or any interest payment date thereafter.
If less than all the Outstanding Bonds are to be redeemed as a result of prepayments of the Special Tax at any one time, the Bonds shall be redeemed pro rata by maturity. If less than all the dutstanding Bonds are to be redeemed at the option of the Community Facilities District at any one time, the Bonds of the latest maturity date or dates shall be redeemed prior to or si'rultaneously with the redemption of the Bonds maturing prior thereto, and if less than all the Outstanding Iionds of any one inaturity date are to be redeemed at any one time, the Trustee shall select the Bolds or the portions thereof of such maturity date to be redeemed in integral multiples of five thousand dollars ($5,000) in a manner that it deems appropriate and fair.
Notice of r"edemption of this Bond or any portion hereof shall be mailed by the Trustee to the registered o*n.. hereof and to those securities depositories and securities infnrmatiol services selected by the Community Facilities District in accordance with the I'de'ture. but neither.lailure to receive any such mailed notice nor any immaterial defect contained therein shall affect the sufJiciency or validity of such ploceedings for redemption. Any notice of 4 r 65-6930-3Slii 5
A-4 Page 162
12/12/2023 Item No.2.
optional redemption may be rescinded by wlitten notice given by the Community Facilities District to tlie Trustee no later than thlee (3) Business Days prior to the date specified for redernption. The Trustee shall give notice of r-escission of the notice of optional redemption or non-satisfaction of a'y conditioni specified in the notice of optional redernption as soolt as practicabie to the same parties and in the same manner as the notice of redernption was given pursuant to the Indenture.
If notice of redemption has been duly given and not rescinded as aforesaid and money sufficient for the payment of the principal of and redemption premiums, if any, on, together with interest to the redemption date on, this Bond or portion thereof so called for redemption has been irrevocably deposited with the Trustee, then this Bond or the por"tion theleof to be ledeemed shall, on the redemption date designated in such notice, become due and payabie at the above- described redemption price; and frorn and after the date so designated interest on this Bond or the portion thereof to be redeemed shall cease to accrue and the registered owner of this Bond shall iruu" no rights in respect hereof except to receive paymeut of the redemption price of this Bond or the portiorithereof to be redeemed, and upoll surrender of this Bond if redeemed in parl only, the Community Facilities District shall execute and the Trustee shall authenticate and deliver to the registered o*n", he1eof at the expense of the Community Facilities District a new Bond or Bonds equal in aggregate principai amount to the unredeetned portion of this Bond so surrendered.
The Comrnunity Facilities District has covenanted that, so long as any Bonds are Outstalding, it will annually levy the Special Tax against all Taxable Property in the Improvement Area and.ttuk. provision for the collection of the Special Tax in amounts which will be sufficient, together with the money then on deposit in the Redemption Account, after making reasonable allowances for contingencies and errors in the estimates, to yield proceeds equal to the amounts required for compliance with the agreements, conditions, covenants and terms contained in the Indenture, and wirich in any event wiil be sufficient to pay the interest on and principal of and Minimum Sinking Fund Account Payments for and redemption premiums, if any, on the Bonds as they becorne due and payable and to replenish each Bond Reserve Account established under the Indenture and to p*a uil current Expenses and Services as they become due and payable in accordance with the provisions and terms of the Indenture' The Bonds are issuable in the fonn of'fully registered bonds. The registered owner of any Bond or Bonds may surrender the same (together with a written instrument of transfer satisfactory to the Trustee duly executed by the registered owner or his or her duly authorized attorney) in exchange for an equal aggregate priricipal amount of Bonds of the same series and maturiiy date in thekanner, suLject to the conditions and upon payment of the charges provided in the Indenture.
The registration of this Bond is transferable on the registration books kept by the Trustee by the registered owner hereof or by liis or ]rer duly authorized attorney upon surrender of this Bondtogetherwith awritten instrument of transfer satisfactory to the Trustee duly executed by the registJred owner or his or her duly authorized attolney, and theleupon a new Bond or Bonds of the same series and maturity date in the same aggregate principal amount will be issued to the transferee in exchange therefor in the rnanner, subject to the conditions and terms and upon payme't of the charges pr.ovided in the Indenture. The Community Facilities District and the Trustee shall be entitled fo conclusively treat the person in wlrose name this Bond is registered as 4I (r-i-6930-18tt3.5
A-5
12/12/2023 Item No.2.
the absolute owner hereof for the purpose of receiving payment of, oI on account of, the principal heleof and redemption premium, if auy, hereon and for aii other purposes' The rights and obligations of the Cornmunity Facilities District and of the registered owners of the BondsLay be amended at any time in the marurer, to the extent and upon the terms provided in the Indentuie, and in certain circumstances without the consent of such registered o*rr.rr, but no such amendment shall (1) extend the maturity of this Bond or t'educe the intelest rate hereon or otherwise alter or impair the obligation of the Community Facilities District to pay the interest heleon or principal hereof or Minimum Sinking Fund Account Payment herefor or redemption premium, if any, hereon at the time and place and at the rate and in the curency and from tire funds provided heiein without the express written consent of the registered owner of this Bond, or (2) pe'mit the issuance by the Community Facilities District of any obligations payable fromihe pr.oceeds of the Special tax other than as provided in the Indenture, or jeopardizelhe ability ofitre Community Facilities District to levy and collect the Special Tax, or (3) reduce the p"r.*tug" of Bonds required for the written consent to an amendment of the Indenture, or (4) modiff any rights or obligations of the Trustee without its prior written assent thereto; all as more fully set forth in the Indenture.
The Bonds do not constitute an indebtedness of the Community Facilities District within the meaning of any constitutional or statutory debt limitation or restriction, and neither the City Council of the City nor the Community Facilities District nor any officer or employee thereof ol. of the City shall be iiable for the payment of the interest on or principal of or redemption premiums, if any, on the Bonds otherwise than from the proceeds of the Special Tax, net of Priority Administrative Expenses, and such other funds, as provided in the Indenture.
This Bond shall not be entitled to any benefits under the Indenture or become valid or obligatory for any pul.pose until the cerlificate of authentication and registration hereon eldorsed shall have been manually signed by an authorized signatory of the Trustee' It is hereby certified that all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in the issuance of this Bond do exist' have trappened and have been peiformed in due time, form and manner as required by law and that the amount of this Bond, tog.ilr., with all other obligations of the Community Facilities District, does not exceed any lirnit piescribed by the iaws of the State of california and is not in excess of the principal amount of the Bonds pelmitted to be issued under the Indenture. 4 I 65-6930-3883 5
A-6 Page 164
12/12/2023 Item No.2.
IN WITNESS WHEREOF, the City cf Folsom Community Facilities District No. 23 (Folsom Ranch) has caused this Bond to be executed in its name and on its behalf by the manual or facsimile signature of the Mayor of the City and countersigned by the manual or ' facsimile signature of tf,e City Clerk of the City, and has caused this Bond to be dated [Closing Datel.
City Clerk of the City of Folsom
CITY OF FOLSOM COMMUNITY FACILITIES
DTSTRICT NO. 23 (FOLSOM RANCH)
Mayor of the City of Folsom
By
Countersigned
4 l 6s-6930-3883.5
A-7 Page 165
12/12/2023 Item No.2.
IFORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION
TO APPEAR ON BONDSI
This is one of the Bonds desclibed in the within-mentioned Indenturc which has been authenticated on [Closing Date].
U.S. BANK TRUST COMPANY, NATIONAL
ASSOCIATION,
as Trustee
By
Authorized Signatory
tFoRM OF ASSIGNMENT TO APPEAR ON BONDSI
For valge received the undersigned do(es) hereby sell, assign and transfer unto the within Bond and do(es) hereby irevocably constitute and appoint attorney to transfer the same on the bond register of the Trustee, with full power of substitution in the Premises.
Dated:
SIGNATURE GUARANTEED BY:
Note: Signatures must be gualanteed by an "eligible guarantor institution" meeting the requiiements of membership or participation in the Security Transfer Agent Medaliion Program ("STAMP") or such other "signature guarantee program" as may be determlned in substitution for STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.
Social Security Number, Taxpayer Iclentification Number or other identifying number of Assignee; ,
-
4 l 65-6930-3883 5
A-8Page 166
12/12/2023 Item No.2.
ATTACHMENT 5
12/12/2023 Item No.2.
OH&S DRAFT
llt28l23
PRELIMINARY OFFICIAL STATEMENT DATED l-*** *---,1,2023
NEW ISSUE-BOOK-ENTRY ONLY NOT RATED
In the opinion of Orrich Herrington & Sutclffi LLP, Bond Counsel to the Authority, based upon an analysis of existing laws, regulationi, rulrngi and court deciiions, and assuming, among other matters, the accuracy of certain representations and compliaice with certaii covenants, interest on lhe Bonds is excluded from gross income for federal income tax purposes under Seciion' 103 of the Internal Revenue Code of 1986 and is exemptfrom State of Caldornia persanal income taxes' In thefurther opinion of Bind Counsel, interes! on lhe Bonds is not a specific preference item for purposes of the federal individual alternative minimum tax. Bond Counse! observes that interest on the Bonds included in adjusted tinancial statemenl income of certcin corporations is not excludedfrom the federal corporate alternative minimum tax. Bond Caunsel expresses no opinian regarding any ather tax consequences ielated to-the ownership or disposttion of, or lhe amount, accrual or receipl ofinterest on' tlte Bonds- See "TAX MATTERS."
$10,250,000'
FOLSOM RANCH FINANCING AUTHORITY
CITY OF FOLSOM COMMUNITY FACILITIES DISTRICT NO.23
(FOLSOM RANCH) IMPROVEMENT AREA NO.2
SPECIAL TAX REVENUE BONDS
SERIES 2024
Dated: Date of Delivery Due: September l, as shown on inside front cover The Folsom Ranch Financing Authority City of Folsom Community Facilities District No. 23 (Folsom Ranch) Improvement Area No. 2 Special Tax Reienue Bonds, Series 2024 (the "Bonds") are being issued by the Folsom Ranch Financing Auihorty (the .,Authorityi) to provide funds to finance the purchase of limited obligation special tax bonds (the "Local obligations;"), issued by tihe'City of Folsom Community Facilities District No. 23 (Folsom Ranch) (the "Districf '). The purchase price"ofthe Local Obligationr *ill be used to finance the acquisition ofcertain,public facilities, fund a debt service reserve account' iund capitalized intereJt on a portion of the Bonds through September 1, 2024, and pay certain costs of issuance of the Local Obligations and Bonds.
The Bonds are being issued by the Authority pursuant to a Trust Agreement (the " trust Agreement") among tho Districl" the Authority, and U.S. BanliTrust Company, National Association, as trustee (the "Trustee") and will be secured by a pledge of the Trust Esiate, as defined herein. See "SECURITYAND SOURCES OF PAYMENT FORTFIE BONDS'" The Bonds are special, limited obtigations of the Authority. The Bonds are payable solely from and secured by the Trust Estate of the Authority pledged under the Trust Agreement, consisting primarily of payments received by the Authority from the District under the Local Obligations, which payments are secured by a lien of the Special Taxes (defined herein) levied upon property within Improvement Ir€a No, 2 of thl District (the "lmprovement Area"), as more fully described herein. Payments under it r t o.ut Obligations are calculated to be sufficient to permit the Authority to pay the principal of, and interest on, the Bonds when due.
The Local obligations lndenture (defined herein) lor the Local obligations establishes a debt service reserve fund (the ..Local Obligations Reserie Fund") with a debt service reserve account therein for the Local Obligations (the "Local Obligations Reserve Account"). pursuant to the Local Obligations indenture, a deposit is being made to the Local Obligations Reserve Account for the Local Obligations. Amounts available from the Local Obligations Reserve Account are not available to make up a deficiency for the payment of principal of and interest on the Bonds. See "SECURITY AND SOURCES OF PAYMENT FOR THE BONDS-Terms of the Local Obligations-Local Obligations Reserve Account-"' The Bonds are being issued only as fully registered bonds registered in the name of Cede & Co., as nominee of The Depository Trust Company, N-ew york, NLw York ("DTC") and interest thereon is payable on March I and September I of each y"*, .o**.ncing Sepiem-ber l, zAZ4, by the Trustee to DTC. DTC will in turn remit principal or redemption price and intots-st_to irr. brc particip-anb; which will in tum remit such principal or redemption price and interest to the Beneficial owners of the Bonds, as descrited herein. DTC will act as securities depository for the Bonds, Individual purchases will be made in book-entry only form in the principal amount of g5,000 or integral multiple thereof. Purchasers of the Bonds will not receive instruments repiesenting their intereit in the Bonds purchased. See APPENDIX F-"DTC AND THE BOOK-ENTRY ONLY SYS'|EM'" The Bonds are subject to optional, extraordinary and mandatory redemption as described herein.' See "THE BONDS- Redemption Provisions."
NEITI{ER THE FAITH AND CREDIT NOR'IHE TAXING POWER OF THE CTI'Y OF- FOLSOM (THE "CITY''), THE AUTHOruTY, THE STATE OF CAI,iFORNIA OR ANY OTHER POLITICAL SUBDIVISION TI]EREOF IS PLEDGED TO THE PAYMENT OF THE BONDS. THE AUTHORITY HAS NO TAXING POWER. EXCEPT FORTHE TRUST ESTATE, NO OTHER REVENUES OR TAXES ARE PLEDCED TO THE PAYMENT OF THE BONDS. ]'HE BONDS ARE t Preliminary, subject to change.
12/12/2023 Item No.2.
NOT GENERAL OBLIGATIONS OF THE AUTHORITY, THE DISTRICT OR THE CITY, BUT ARE LIMITED OBI.IGATIONS OF THE AUTHORITY PAYABLE SOLELY FROM THE TRUST ESTATE, DERIVED PRIMARILY FROM
PAYMENT ON THE LOCAL OBLIGATIONS FROM THE PAYMENT OF THE SPECIAL TAXES LEVIED WITHIN THE IMPROVEMENT AREA AS MORE FULLY DESCRIBED HEREIN.
The Bonds are not rated by any rating agency. Investment in the Bonds involves a substantial degree of risk that may not be appropriate for some investors. See "CERTAIN RISKS TO BONDHOLDERS" for a discussion of special risk factors that should be considered, in addition to the other mafters set forth herein, in evaluating the investment quality ofthe Bonds.
This cover page contains information for general reference only and it is not a complete summary of the Bonds. Investors should read the entire O?ficial Statement to obtain information essential to the making of an informed investment decision.
Maturity Schedule, Interest Rates, Prices and CUSIPS
(See inside front cover)
The Bonds are offered when, as and if issued, subject to the approval as to their legality by Onick, Henington & Sutcliffe LLp, Bond Counsel to the Authority, and cefiain other conditions. Certain legal matters will be passed on for the Authority and the District by the City Attorney. Certain legal matters will be passed upon for the Underwriter by Stradiing, Yocca, Carlson & Rau&, a professional Corporation. It is anticipated that the Bonds in book-entry form will be available for delivery through the facilities of The Depository Trust Company in New York, New York on or about I 1,2024' Piper Sandler & Co.
The date of this Official Statement is .2424
12/12/2023 Item No.2.
$10,250ooo0.
FOLSOM RANCH FINANCING AUTHORITY
CITY OF FOLSOM COMMUNITY FACILITIES DISTRICT NO.23
(FOLSOM RANCTT) TMPROVEMENT AREA NO- 2
SPECIAL TAX REVENUE BOIIDS
SERIES 2024
MATURITY SCHEDULE,INTEREST RATES, PRICES AND CUSIPS
Maturity
(September l)
Principal
Amount
Interest
Rate Price
CUSIPNo.t
(344414)
s o/o
$ % Term Bond maturing
-
o/oTerm Bond maturing
-
1,z}-Price
-Vo
(CUSIP No.r 344414-)
l, 20 _Price
-Yo
(CUSIP No.t 3444 14J$
t
Preliminary, subject to change.
CUSIP@ is a registered trademark of the American Bankers Association. CUSIP Global Services (CGS) is managed on behalf of the American Bankers Association by FactSet Research systems Inc. Copyright@ 2023 CUSIP Global services' All rights reserved. CUSipcl data herein is irovided by CUSF Global Services. This data is not intended to creat€ a database and does not serve in -y *uy as a substitute foi the cGS .dryb1;e CUSIP numbers are provided for convenience of reference only. The Authority, the bistrict, the Underwriter, and the cily take no responsibility lor the accuracy of such numbers.
12/12/2023 Item No.2.
No dealer, broker, salesperson or other person has been authorized by the Authority, the District or the Underwriter to give any information or to make any representations other than as contained in this official Statement, and if given ir made, such other information or representations must not be relied upon as having been^ authorized by any of the foretoing. This official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall ther; be;ny sale of the Bonds by any person, in any jurisdiction in which it is unlawful for such person to make such offer, soliiitation or sale. fnisbffrciat Statement is not to be construed as a conffact with the purchasers of the Bonds. Statements contained in this official statement which involve estimates' forecasts or maffers of opinion, whether or not expressly so described herein, are intended solely as such and are not to be construed as representations of fact.
The information set forth herein has been obtained from sources which are believed to be reliable, but such information is neither guaranteed as to ac'curacy or completeness, nor is it to be constued as a representation of such by the Authority, the District or the Underwriter. The information and expressions of opinion stated herein are suUlect to change without notice; and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication thit there has been no change in the affairs of the Authorify, the District or the propefly owners in theimpiovement Area, or in the condition of the property in the Improvement Area, since the date hereof-
The summaries and references to the Trust Agreement, the Mello-Roos Act' the Local Obligations Indenture and to other statutes and documents refered to herein do not purport to be comprehensive or definitive and are qualified in their entireties by reference to each such statute and document. This Official Statement including any amendment or supplement hereto is intended to be deposited with one or more depositories' The Underwriter has provided the following sentence for inclusion in this Official Statement' The underwriter has reviewed the information in this oirrciat Statement in accordance with, and as part of, their responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information'
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PzuCE OF THE BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING' IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. THE LINDERWRITER MAY OFFER AND SELL THE BONDS TO CERTAIN DEALERS AND OTHERS AT PzuCES LOWER THAN THE PUBLIC OFFERING
PRICES SET FORTH ON THE INSIDE FRONT COVER PAGE HEREOF AND SUCH PUBLIC OFFERING PRICES MAY BE CHANGED FROM TIME TO TIME BY THE UNDERWRITER.
THE BONDS HAVE NOT BEEN REGISTERED UNDER THE SECUzuTIES ACT OF 1933' AS
AMENDED, IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS CONTAINED IN SUCH ACT. THE BONDS HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECUzuTIES LAWS OF ANY STATE.
certain statements included or incorporated by reference in this official Statement constitute forward- looking statements. such statements are generally identlRable by the terminology used such as 'oplano" "expect," ,.estimate,,, ,.budgef' or similar words. Tlie achievement of certain results or other expectations contained in such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements described to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements'
12/12/2023 Item No.2.
UNSERT REGIONAL AND CITY CONTEXT MAPSI
12/12/2023 Item No.2.
CITY OF FOLSOM
COMMUNTY FACILITIES DISTRICT NO. 23
(FOLSOM RANCIT)
IMPROVEMENT AREA NO. 2
llnsert aerial photosl
photos taken [ ] ,2023.The approximate boundaries of the Improvement Area have been outlined'
12/12/2023 Item No.2.
AUTHORITY GOVERNING BOARD/CITY COUNCIL
Rosario Rodriguez, Chair / MaYor
YK Chalamcherla, Vice Chair / Yice Mayor
Sarah Aquino, Member / Councilmember
Mike Kozlowski, Member / Councilmember
Anna Rohrbaugh, Member / Councilmember
AUTI{ORITY/CITY STAFF
Elaine Andersen, Executive Director / City Manager
Stacey Tamagni, Treasurer / Finance Director
Steven Wang, Esq., General Counsel / City Attorney
Christa Freemantle, Secretary / City Clerk
SPECIAL SERVICES
BOND AND DISCLOSURE COT]NSEL
Orrick, Herrington & Sutcliffe LLP
TRUSTEE
U.S. Bank Trust Company, National Association
APPRAISER
Integta Realty Resources
MUNICIPAL ADVISOR
Fieldman, Rolapp & Associates, Inc
SPECIAL TAX CONSULTANT
NBS
12/12/2023 Item No.2.
INTRODUCTION.........
General
Authority for Issuance
Purpose......
Security for the Bonds.............
The Improvement Area ......'....
Properly Ownership and
Development Status
Property Values........
Bondholders Risks
Continuing Disclosure..
Summaries Not Definitive........
FOLSOM PLAN AREA ........
General Folsom Plan Area Plan
of Finance..
Public Facilities Financing PIan.......,...
Folsom Plan Area Development ...'."..".
PLAN OF FINANCE..............
Facilities to be Financed.
Description of the Bonds.
Redemption Provisions
ESTIMATED SOURCES AND USES
OF FUNDS
DEBT SERVTCE SCHEDULE
SECURITY AND SOURCES OF
PAYMENT FOR THE BONDS
General
Flow of Funds ...............
Description of Local
Obligations
Issuance of Local Obligations
Payment of the Local
Obligations........
Local Obligations Flow of
Special Tax Authorization.'.'....
Covenant for Foreclosure......'...'..'.....
No Required Advances from
Available Surplus Funds
Terms of the Local Obligations
Special Tax Analysis'.'...'.."...'.
Special Tax Calculation ............,,,.... "
The Teeter Plan ...........
THE AUTHORITY.......
THE CITY.
THE IMPROVEMENT AREA...........,
General Description and
TABLE OF CONTENTS
Page
10 14
ls
17 t7
Page
Properly Values........ ..'.'..'38
Value-to-Lien Analysis.....................'.3 8
Estimated Tax Burden on Single
Family Home ...........'.'.'..'40
Overlapping Debt........................'......'4 I
Historical Special Tax Levy ............-'.42
PROPOSED PROPERTY
DEVELOPMENT........... .......42
Development Entitlements.................. 42
Properly Ownership .......'.51
Development Plan and Status of
Development.....................................-.5 5
Development Plan of Finance.,......,....60
CERTAIN RISKS TO
BONDHOLDERS ..................61
Levy of the Special Tax.....................'61
Collection of Special Tax 62
Concentration of Ownership ...,........... 63
Payment of the Special Tax is
Not a Personal Obligation of a
Property Owner.........
Potential Early Redemption of
Bonds from Prepaid Special
Taxes.............
Special Tax Delinquencies.................
Teeter Plan Termination
Land Values .................
Appraisal Risks..........
Exempt Properties...
Maximum Special Tax............ .......,.... 66
No Acceleration Provision 66
Loss of Tax Exemption
Parity Taxes and Special
Assessments.................
Future Private Indebtedness...
Disclosures to Future
Purchasers
Bankruptcy
FDIC/Federal Government
Interests in Properties..........................
Zoning and Land Use Decisions.........
Ballot Initiatives and Measures..,........
Shapiro v. San Diego
Recent Changes to Federal
Income Tax Law
Risks of Real Estate Secured
Investments Generally
Current Challenges to the
Homebuilding Industry ..................'.... 7 1
5 6
7 8
8 9
9 9
6 63
64 64
64 64
65 65
66 68
68 70
70 70
7l
7r
19 20
22 z3
24 l8
l8
',,.'.,.,'.'67
.,.,.''..,''67
............67
Location
12/12/2023 Item No.2.
Increasing Mortgage Interest
Rates and Banking UncertaintY
Failure to Develop.
No Independent Review of
Valuation or Viability of
Completed Projects
Potential Impact of Global
Health Crises or Concerns..
Cybersecurity .......
Geologic, Topographic and
Climatic Conditions
Endangered Species
APPENDIX A -
APPENDIX B
-
APPENDIX C
-APPENDIX D -APPENDIX E
-APPENDIX F
-APPENDIX G
-
TABLE OF CONTENTS
(continued)
Page
72 naIL
...........73
73 74
74 76
Page
Hazardous Substances.. .......................7 6
Naturally Occurring Asbestos.'... ...'..,.7 7
LEGAL MATTERS .......,",............77
TAX MATTERS.....
NO LITIGATION...
NO RATING...........
MUNICIPAL ADVISOR .......................,........80
I.JNDERWzuTING 80
CONTINUING DISCLOSURE............."......... 8 I
The District 81
The Homebuilders............,...,...... "....... 8 1
MISCELLANEOUS 82
77 .80
.80
AMENDED RATE, METHOD OF APPORTIONMENT AND MANNER OF
COLLECTION OF SPECIAL TAX
ECONOMIC AND DEMOGRAPHIC INFORMATION RELATING TO THE
CITY OF FOLSOM
SUMMARY OF PRINCIPAL DOCUMENTS
FORMS OF CONTINUING DISCLOSURE UNDERTAKINGS
PROPOSED FORM OF OPTNION OF BOND COL|NSEL
DTC AND THE BOOK-ENTRY ONLY SYSTEM
APPRAISAL
ll
12/12/2023 Item No.2.
$1o,250,ooo.
FOLSOM RANCH FINANCING AUTIIORITY
CITY OF FOLSOM COMMUNITY FACILITIES DISTRICT NO. 23
(FOLSOM RANCIT) IMPROVEMENT AREA NO.2
SPECIAL TAX REVENUE BONDS
SERIES 2024
TNTRODUCTION
The description and summaries of various documents hereinafter set forth do not purport to be comprehensive or definitive, and reference is made to each document for the complete details of all terms and londitions. All statements herein are qualified in their entirety by reference to each document' All capitalized terms used in this Official Statement and not otherwise defined herein have the same meaning as in the Trust Agreement (defined below) or the Local obligations Indenture (defined below), as applicable.
General
This Official Statement, including the cover page, the inside cover page and the Appendices hereto, is provided to furnish certain information in connection with the issuance and sale by the Folsom Ranch Financing Authority (the "Authority") of $10,250,000' aggregate principal amount of Folsom Ranch Financing Authority'City of Folsom Community Facilities District No. 23 (Folsom Ranch) Improvement Area No. 2 Special Tax Revenue Bonds, Series 2A24 $he "Bonds")' Authority for Issuance
The Bonds will be issued pursuant to the provisions of the Trust Agreement (the "Trust Agreement,,) among the Authority, tire Cify of Folsom Community Facilities District No' 23 (Folsom Rinch) lthe ,.District"), and U.S. bank Trust Company, National Association, as trustee (the "Trustee"), as authoiized pu..uaniio a resolution of the Authority. The Bonds will be issued pursuant to the Marks- Roos Local Bond pooling Act of 1985, as amended, constituting Article 4 of Chapter 5, Division 7, Title I of the GovernmeniCod* of the State of California. The Bonds will be issued as fully registered bonds in book-entry form, in denominations of $5,000 each or any integral multiple thereof and will be dated the date of ditivery thereof and bear interest at the rates set forth on the inside front cover page hereof. See "THE BoNDs-Description of the Bonds'"
Purpose
The Bonds are being issued to finance the purchase of the limited obligation special tax bonds (the ,.Local Obligations,), Issued by the District pursuant to an Indenture (the "Local Obligations indenture',) between the bistrict und u.S. Bank Trust Company, National Association, as trustee (the ,.Local Obiigations Trustee'o). The purchase price of the Local Obligations will be used to finance the acquisition Jf certain public facilities, fund a debt service reserye account, fund capitalized interest on a ponion of the Bonds through September 1, 2024, and pay certain costs of issuance of the Local bbligations and Bonds. See ''PLAN OF FINANCE" and "THE IMPROVEMENT AREA." * Preliminary, subject to change.
12/12/2023 Item No.2.
The Local Obligations are authorized pursuant to (i) the provisions of the Mello-Roos community Facilities Acl of 1982, as amended, constituting section 53311, et seq. of the california Government code (the ,.Mello-Roos Act"), (ii) a resolution of the city Council of the City of Folsom (the ..City,,) as legislative body of the District'adopted on December 12,2023, and (iii)the Local Obligations Indenture. The Local obiigations are payable from the special taxes authorized to be levied and collected annually upon taxabl" ,"uf prop"rty within Improvement Area No. 2 of the District (the "Improvement Area,,). See .,SECURITY ANi SOURCES OF PAYMENT FOR THE BOND$-Qsns1nl." Security for the Bonds
The Bonds are special, limited obligations of the Authority, payable from and secured by the Trust Estate (as defined herein) received by the Authority consisting primarily of payments received from the District as debt service payments on the Local obligations.
The Local obligations will be issued with an annual scheduled debt service that results in at least ll00/o annual debt."rii"" coverage for the Local Obligations from Effective Tax Rate Evaluation Maximum Facilities Special Tax revenues for Developed Property as of october 19,2023, and Effective Tax Rate Evaluation Minirnu* Facilities Revenues for the remaining Taxable Property expected to be generated in the Improvement Area, net of Priority Administrative Expenses (each as defined below). ittho,rgn the scheduled payments under the Local obligations are sufficient, in the aggregate, toprovide the Aui-hority with -on"y, to pay the principal of, premium,l! uny, and interest on the Bonds when due (see ..sECU:RITy AND souRaEs oF PAYMENT FoR THE BONDS"), investment in the Bonds involves a substantial degree of risk that may not be appropriate for some investors' See "CERTAIN zuSKS TO BONDHOLDERS" below.
The Local Obligations are secured by a pledge of special taxes (including both the Facilities Special rax and the Seriices Special rax for ih" Imp.ov"ment Area, each as defined herein) received by the District (the ,.Special Tax" or the "special Taxes," as the context requires) (including any prepayment thereof and proceeis from foreclosure sales pursuant to the Local obligations Indenture), net of Priority Administrative Expenses, and the Local Obligations Reserve Account established for the Local obligations under tie Local obligations Indenture. See "SECURITY AND SOURCES oF PAYMENT FOR THE BONDS." The Special Taxes are included on the regular property tax bill sent to the record owners of taxable properties within the Improvement Area. The District has covenanted in the Local Obligations Indenture to commence judicial foreclosure proceedings against property with delinquent SpeJiat Taxes and to diligently pur.u" such proceedings to completion; provided, however, that the District is not obligated uider the Local obligations Indenture to commence such judicial foreclosure proceedings on any delinquent installment of the Special Tax for any Fiscal Year in_which the District has received one hundred percent (100%) of the amount of such installment from the County of Sacramento (the ,.county,,; pursuant to the Teeter Plan (described below). See "SECURITY AND SOURCES OF PAYMENT FOR THE BONDS-payment of the Local obligations," "-special Tax Authorization," ('-Qgvglnnt for Foreclosure" and ((-Jhg Teeter Plan'"
The Special Taxes secure only the Local Obligations. For this reason, a delinquency or default in the payment oispecial raxes could cause a default in the payments of principal and interest on the Bonds if moneys in the Local obligations Reserve Account are insufficient to make up the deficit in debt service for the Local obligations caused by such delinquency or nonpayment.
NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING POWER OF THE CITY' THE DISTRICT, THE AUTHOzuTY, THE STATE OF CALIFORNIA (THE "STATE") OR ANY
OTHER POLITICAL SUBDIVISION THEREOF IS PLEDGED TO THE PAYMENT OF THE BONDS. THE AUTHORITY HAS NO TAXING POWER. EXCEPT FOR THE TRUST ESTATE' NO 2 Page 178
12/12/2023 Item No.2.
OTHER REVENUES OR TAXES ARE PLEDGED TO THE PAYMENT OF THE BONDS. THE
BONDS ARE NOT GENERAL OBLIGATIONS OF THE AUTHORITY, THE DISTRICT OR THE
CITY, BUT ARE LIMITED OBLIGATIONS OF THE AUTHORITY PAYABLE SOLELY FROM THE
TRUST ESTATE, DERIVED PRIMARILY FROM DEBT SERVICE PAYMENTS ON THE LOCAL
OBLIGATIONS FROM THE PAYMENT OF THE SPECIAL TAXES LEVIED WITHTN THE IMPROVEMENT AREA AS MORE FULLY DESCRIBED HEREIN.
The Improvement Area
General. The Improvement Area is located in the southem portion of the City, east of East Bidwell Street, north of Irriangini parkway and south of U.S. Highway 50 and consists of over 49 total gross acres, of which approximately 31 acres are subjecttothe Special Tax. Presently, the Improvement Lrea includes properties in varying stages of development, including finished lots, homes under construction, and completed homes.-collectively, these properties are planned to include 291 single family homes. The Improvement Area also includes approximately 5.8 acres that are expected to be devel,oped into a tsz-unit affordable housing site that will receive a welfare'exemption and be exempt from the Special Tax.
Formation Proceedings. The District was formed by the City pursuant to the Mello-Roos Act' The Mello-Roos Act was en-acted by the California legislature to provide an alternative method of financing certain public capital facilities and services, especially in developing ar€as of the State. Any locd agJncy (as defined in the Mello-Roos Act) may establish a community facilities district to provide for and finance the cost of eligible public facilities, development-related fees, and services. Subject to approval by two-thirds of the votes cast at an election and compliance with the other provisions of the v"tto-noo. Act, a legislative body of a local agency may issue bonds for a comrnunity facilities district and may levy and collect a special tax within such district to repay such indebtedness' pursuant to the Mello-Roos Act, the City Council undertook proceedings to form the District, initially designating six separate improvement areas therein, including the lmprovement Area, and called an election to authorize tire incurring of bonded indebtedness and authorize the levy of special taxes within the District. on May 26,2020, elections were held within the District for each improvement area therein at which the eligible voters in each improvement area approved the levy of special taxes in accordance with the respictive Rate and Method of Apportionment of Special Tax for such irnprovement area. In addition, the etigiUte voters in the Improvement Area authorized the issuance of bonds in an amount not to exceed $36,000,000 for the Improvement Area. In December 2021, a seventh improvement area was designated within the District, and in March 2023 change proceedings for the Improvement Area were held, whereby the eligible voters in the Improvement Area approved an Amended Rate and Method of Apportionment ior ciry;f Folsom community Facilities District No. 23 (Folsom Ranch) lmprovement Area ilJo. 2 (the ,,Amended Rate and Method of Apportionment"). The Amended Rate and Method of Apportionment is included as APPENDIX A hereto and summarized herein under 'SECURITY AND SOi;nCeS OF pAYMENT FOR THE BONDS - Special Tax Analysis." Property Ownership and l)evelopment Status
The properly within the Improvement Area is under development, with homes completed and sold to individual homeown"rs, homls under construction and being marketed to individual homeowners, and finished lots. As of October lg,2023,the Taxable Properfy within the Improvement Area was owned by Tri pointe Homes Holdings, [nc., a Delaware corporation ("Tri Pointe"); AG EHC II (LEN) CA 2, L.p., u Delaware limited paJnership (the "Landbank"), as land bank for Lennar Homes of Califomia, LLC, a Califomia limited liability company ("Lennar Homes" and, together with Tri Pointe, the .,Homebuilders,' and each a "Homebuilder"); and individual homeowners. See "PROPOSED J Page 179
12/12/2023 Item No.2.
pROpERTY DEVELOPMENT-Property Ownership." At full buildout, the Improvement Area is expected to include 291 single family homes. To date, final maps have been approved and recorded for ali Taxable Property within the Improvement Area. Also, Arcadian Improvement Company, LLC (the ,,Original Deveioper") has nearly completed all of the infrastructure development for the Improvement AreJrequired for the construction and sale of all expected 291 homes within the Improvement Area. The only remaining required infrastructure is the completion of a traffic signal at the intersection of Mangini tarkway and Savannah Parkway, which is required to be fully constructed prior to the first home o..upun"y in Village 4 within the Improvement Area. The Original Developer has commenced construction on this traffic signal and expects to have it fully constructed and operational by March2024.
The lmprovement Area is being developed in 4 separate villages (each a "Village")' Villages l, 2, and 3 include the lots that are owned and being developed by Tri Pointe. Village 4 includes the lots that are owned by the Landbank and that expected to be developed by Lennar Homes. Tri Pointe's lots in the Improve."ni Ar.u are being developed and sold across two separate product lines known as Canterly at Folsom Ranch (Village l) und Lariaiat Folsom Ranch (Villages 2 and 3). Lennar Homes'lots in the Improvement Area are being developed and sold across a single product line known as Rockcress lI at Folsom Ranch.
The Canterly at Folsom Ranch product line is being developed on lots of approximately 3,000 square feet and includes four separate floor plans for two-story homes ranging in size from 1,705 square feet to 2,239 sqtare feet, each with 3-4 bedrooms and 2.5-3 bathrooms. The Lariat at Folsom Ranch product iine is being developed on lots.of approximately 3,400 or 4,000 square feet and includes three separate floor plansTor two-story homes ranging in size from 1,822 square feet to 2,220 sqtare feet, each with 3-4 bedrooms and 2.5-3 bathrooms. The Rockcress II at Folsom Ranch product line is being developed on lots of approximately 3,015 square feet and includes 4 separate floor plans for two-story homes ranging in size-ftrom 1,632 square feet to 2,024 square feet, with 3 to 4 bedrooms and 2.5 to 3 bathrooms.
As of October 79,2023 (the date of value of the Appraisal), the ImprovementArea included 41 completed homes that had closed escrow to individual homeowners, an additional 8 completed homes that had not yet closed escrow to individual homeowners, 63 homes under construction (including 4 model homes being constructed by Lennar Homes), and 179 finished lots without vertical home construction' Homes under contract may not result in closed escrows as sales contracts are subject to cancellation.
Property Values
An appraisal of the Taxable Property (as defined in the Local Obligations Indenture) within the Improvemenf A..u dated November 20, 2023 (the "Appraisal") was prepared by Integra Realty Resources, Sacramento, California (the "Appraiser"). The purpose of the appraisal was to estimate the aggregate value of the fee simple interest, subject to the special tax and based upon a hypothetical r6nOition, for all of the Taxable Property within the Improvement Area. Subject to the assumptions, hypothetical condition and limiting conditions contained in the Appraisal, the Appraiser estimated that the Taxable Property within the Improvement Area had an estimated aggregate value of $84,653,000 as of october 19,2a23. see "THE IMPROVEMENT AREA-Property Values." Bondholders Risks
Investment in the Bonds involves a substantial degree of risk that may not be appropriate for some investors. For a discussion of certain considerations relevant to an investment in the Bonds, in addition to the other matters set forth herein, see "CERTAIN zuSKS TO BONDHOLDERS." Investors 4 Page 180
12/12/2023 Item No.2.
should read the entire Official Statement to obtain information essential to the making of an informed investment decision.
Continuing Disclosure
The District will agree to provide certain annual financial information and operating data by not later than April 1 in each y"u., "o..encing April i, 2024 (the "Annual Report"), and to provide notices of the occurrence of certain enumerated events. The Annual Report and notices will be filed with the Municipal Securities Rulemaking Board's Elecffonic Municipal Market Access database ("EMMA")' The specific nature of the information to be contained in the Annual Report or the notices of enumerated events is set forth in APPENDIX D-"FORMS OF CONTINUING DISCLOSURE LINDERTAKINGS'" These covenants have been made in order to assist the Underwriter in complying with S.E'C.
Rule l5c2-12.
Tri pointe and Lennar Homes will each covenant for the benefit of the Bondholders to provide certain information relating to it and its development within the Improvement Area no later than March3l and.september 3b in each year, commencing March 31,2024 (collectively, the "Disclosure Reports,'), and to provide notices of the occurrence of certain enumerated events. The Disclosure Reports anj notices will be filed with EMMA. The specific nature of the information to be contained in the Disclosure Reports or the notices of enumerated events is set forth in APPENDIX D-"FORMS oF CONTINUING DISCLOSURE LINDERTAKINGS." The obligations of Tri Pointe and Lennar Homes will terminate upon the occurrence of certain events as set forth in the applicable Continuing Disclosure Certificate, including at such time as Tri Pointe and Lennar Homes (and each of their Affiliates (as defined in the applicible Continuing Disclosure Agreement)) own or have the option to acquire less than 54 of the residential lots within the Improvement Area.
Summaries Not Definitive
Brief descriptions of the Bonds; the Local Obligations; the security for the Bonds; the City, the District, the Improvement Area; and the status of development within the Improvement Area are included in this Official Statement together with summaries of certain provisions of the Bonds, the Trust Agreement, and the Local Obligations Indenture. Such descriptions do not purport to be comprehensive oid.finitiu". All references herein to the Trust Agreement and the Local Obligations Indenture are qualified in their entirety by reference to such documents, copies of which are available for inspection at the office of Trustee.
FOLSOM PLAN AREA
General Folsom Plan Area Plan of Finance
In 2001, the City commenced plans to expand its sphere of influence area to include an area south of US Route 50. The aiea, known ur ih" Folsom Plan Area is bordered to the west by Prairie City Road, the east by the Sacramento/El Dorado County boundary line, the north by US Route 50, and the south by White Rock Road. In November 2004, the citizens of the City adopted Measure W ("Measure W"), which specified certain requirements for annexing the Folsom Plan Area into the City. In June 2011, the City adopted its Folsom plan Area Specific Plan (the "Specific Plan"). The Local Agency Formation Commisiion approved the City's plan to annex the Folsom Plan Area on January 18,2012.
As described below, the Folsom Plan Area is an area of approximately 3,500 acres in the southem portion of the City that has been approved for development of approximately 11,461 units of residential ievelopment, plui 214.5 acresof commercial/industrial development (including mixed use development). 5 Page 181
12/12/2023 Item No.2.
Over the build out of the propefty, the City has used and anticipates continuing to use community facilities districts under the Melio-Roos Act to finance a large portion of the public infrastructure required for the development, plus certain maintenance obligations of public improvements and facilities.
Two community facilities districts formed by the City to finance public infrastructure, maintenance and services benefiting the Folsom Plan Area include Community Facilities District No. 17 (willow Hill pipeline) (,.cFD 17") and community Facilities District No. 18 (Folsom Plan Area - Area- Wide Improvements and Service*j1"cFD l8'). cFD 17 encompasses nearly all of the properly within the Folsom plan Area, excluding approximately 190 acres bordering El Dorado County in the eastern portion of the City south of US nouie S0. CFD 18 encompasses all of the property within the Folsom blan Area, overlapping all of CFD l7 and the additional 190 acres bordering El Dorado County. The city has issued bonds for 6fn 17 in the principal amount of $6,675,000, of which $[5,575,000] are currently outstanding. CFD 18 is authorized to issue up to $200,000,000 in bonds. The timing of issuance of bonds for CFD 1g is dependent upon market conditions and development within the Folsom Plan Area.
The city currently anticipates thaf an initial series of CFD 18 bonds will be issued in the second quarter of Z0Z4 tohelp finance the phase 24 water Facilities (as defined herein). See "PROPOSED PROPERTY DEVELOpMENT-Development Entitlements-Water Supply Infrastructure." The Improvement t"u represents approximatety t.iOVrby acres of CFD 17 and approximately 1.58% by acres of CFD 18' The aliocable portion of bonds previlusly issued for cFD 17 and any bonds to be issued for cFD 18 constitute overlapping debt. See'THE IMPROVEMENT AREA-Overlapping Debt'" Public Facilities Financing Plan
Measure W, adopted by City of Folsom residents in November 2004, required, among other things, that residents north of US Route 50 not bear the cost for infrastructure and public facilities serving the Folsom plan Area. The Cify adopted a Public Facilities Financing Plan ("PFFP") for the Folsom Plan Area on January 14,2014. The pFFp provides an overview of how the infrastructure required for the development ofthe Folsom plan Area will be financed and constructed and how various public facilities will be financed and maintained to ensure that public facilities and infrastructure will be available for the orderly development of the Folsom plan Area without cost to the residents of the City north of US Route 50 and without an adverse impact on the service levels provided to future residents of the Folsom Plan Area.
The pFFp contemplates that the primary sources of funding for the construction of the public infrastructure and facilities in the Folsom Plan Area are community facilities districts, development impact fees collected upon permit issuance (including development impact fees of the Folsom Cordova Unified School District), diiect developer financing, and matching state school grants and other school funding (including the school facilitiei improvement district described under "THE IMPROVEMENT AREA]-bverlapplng Debt"). Subdivision improvements are not included as part of the PFFP On September 8, 2015, the City approved Resolution No. 9641, in which the City Council adopted a Nexus Study to collect certain impact fees for the Specific Plan to be collected in accordance wittr City ordinance l.io. 1234. [n addition, on the same date, the City approved Resolution No' 9642, in which the City Council adopted a Nexus Study for the Specific Plan Infrastructure Fees (the "SPIF") to be collected for the Specific plan and in accordance with ordinance No. 1235 and Chapter 3.130 of the Folsom Municipal'Code. Most recently, on January 9,2018, the City of Folsom approved Resolution No. 10040, amending Resolution No. 9641, to adjust the initial Folsom Plan Area Development Impact Fees. on the same-date, the City approved Reiolution No. 10059, adopting the Nexus Study Fiscal year 2017-lg Update for the SplF, and setting the updated infrastructure fees. On July 28,2020' the City approved Resolution No. 10491, in which th;ciry adopted the Nexus Study Fiscal Year 2a2a-2l update for the Folsom plan Area SpIF. On this date, the City also introduced and had the first reading for City 6 Page 182
12/12/2023 Item No.2.
Ordinance No. 1307, in which the City amended sections 3.130.010(JJ) and 3.130.030(E)(tXc) of the Folsom Municipal Code pertaining to tire SPIF Set-Aside component of the SPIF. The SPIF SetAside was amended to include a new SFIF Off-Site Water Set-Aside pomponent to repay the City for water treatment plant costs the City had previously incurred. On August25,2020' the City conducted the second reading and approved Ordinance No' 1307'
The estimated remaining cost of the backbone infrastructure and public facilities for the Folsom plan Area at build-out is $403,4-82,461 (in 2020 dollars), of which the City anticipates that a portion will be financed through the Folsom plan Area SPIF and the issuance of bonds for CFD 18, the Improvement Area or other community facilities districts and improvement areas. This estimate is subject to a variety of construction and *urk.t .irkr. The city and the District can provide no assurances that the overall costs will not increase, even significantly, in the future' phasing of Development. For purposes of setting the PFFP costs, the City projected single family units would be sold and occupied witirin'13 years, mulii-f"amity low density units within 15 years, and multi-family medium and high density units within 18 years' Backbone Infrastructure. The PFFP provides for the financing or collection of impact fees for and the conskuction of the backbone infrastructure required before construction in the Folsom Plan Area can proceed. Specifically, the PFFP recognizes the need for roadway improvements, on-site water system i*piou",n"nts, tff-site water system impiovements, recycled water system improvements, sanitary sewer system improvements, storm drainage system improvements, habitat mitigation, and construction of two fieeway inierchanges and improvements to an existing freeway interchange' public Facilities - the Folsom plan Area. The PFFP describes plans for the financing of public schools, parks, transit services, trails, police and fire facilities and equipment, municipal service center, a .orpo.utio,, yard, solid waste facilitiis, a library, general capital improvements, transportation, and- a community and aquatic center. The pFFP anticipates that the land for the public facilities will be dedicated to the City without cost to the City'
The Folsom plan Area is currently being served by the existing fire resources of the City as well as other Sacramento County, El Dorado county and Placer County fire agencies through mutual aid agreements with the City. As noted in the PFFP, the City's goal is to maintain a level of service that rJpresents a rate of I station per 12,000 population. Jhe _C-i!1 commenced construction on the first fire station servicingthe Folsom plan Areaduring September 2022. The City cunently expects construction of this first fire itation to be completed during the third quafter of 2024.
Development within the Folsom Plan Area, including within the Improvement Area, is dependent upon completion of certain of the above described infrastructure. For more information on status of construction of improvements and development necessary for development to occur within the Improvement Area, see "PROPOSED PROPERTY DEVELOPMENT." See also "THE IMPROVEMENT AREA-Overlappin g Debt'"
Folsom Plan Area DeveloPment
The Folsom plan Area is comprised of approximately 3,500 acres zoned for 11,460 residential units and 2.g million square feet of commercial, offo" and industrial space. Through multiple acquisitions beginning in 2072, ufi,liut". of Westland Capital Pafners, L.P. ("Westland") acquired nearly 2,400 acres within the Folsom plan Area, including approximately 8,350 dwelling units, 1'2 million square feet of commercial, office and industrial space, as-well as several sites for elementary, middle and high schools.
7 Page 183
12/12/2023 Item No.2.
Since development began in May 2017, Westland affiliates have invested more than $250 million into backbone infrastruiture and subdivision improvements to support the development of nearly 3,000 single-family dwelling units, as well as three separate sites for multifamily development. Many of the regiori,s largest public and private homebuilders have been actively building in the Folsom Plan Area including Tri Point-e, Lennar Homes, Toll Brothers West, Taylor Morrison, KB HOME Sacramento, Beazer fro*". Holdings, Meritage Homes, Richmond American, The New Home Company, Signature Homes, Van Daele Homes, A.G. Spanos Company, and St. Anton Communities' Other community developments in the Folsom Plan Area include, but are not limited to, Russell Ranch and White Rock Springs Ranch, which consist of an additional 1,500 units of single-family housing. Infrastructure investment in these two communities, as of April 2022, was estimated by East Carpenter Improvement Company ("ECIC"), one of the master developers responsible for the initial improvement of a portion of ihe District, to have exceeded $200 million since development began in 2A17.
Affiliates of Pacific Coast Capital Partners (*PCCP-), known as the Eagle group of companies (,,Eagle,,), own a majority of the non-residential land uses in the Folsom Plan Area. In two separate tians-actions, Eagle roid 4b-u"t" development parcels to Dignity Health and UC Davis Health, two of the region,s *u;o. f,ealthcare providers, for hospital and medical campus facilities. Development for the Dignity Heaith campus began in 2A21, and significant investments in land development have been made thJre. The UC Davis Health property commenced development in August 2023.
Westland affiliates' remaining land holdings include nearly 3,500 dwelling units and 1.2 million square feet of commercial and office uses. Lennar Homes, PCCP, UC Davis Health, Dignity Health, gitiott Homes and other landowners control an additional2,50A residential lots and 1 .5 million square feet of commercial development space. Infrastructure planning, design and engineering is underway to support the development of these remaining properties and, as of April 2022, was anticipated by ECIC to exceed $200 million over the next three to five years,
The Folsom Plan Area, including Folsom Ranch and Russell Ranch, is widely considered to be the premier master-planned community in the Sacramento region. ln 2022 alone, over 780 building permits were issued in the Folsom Plan Area, and homebuilders have enjoyed sustained demand and pricing power as they continue to build out some of the most attractive housing in Northern California'
PLAN OF FINANCE
Facilities to be Financed
The Bonds are issued for the purpose of providing funds to purchase the Local Obligations. The Local Obligations are being issued to finance the acquisition of certain public capital improvements more particularllidesqibed in G Resolution of Formation adopted by the City Council of the City on May 26, )OZO. rn. City and Arcadian Improvement Company, LLC (the "Original Developer") have entered into an acquisition and shortfall agreement (the "Acquisition Agreement") wherein the City has agreed to use a portion of the proceeds of the Local Obligations to finance the acquisition from the Original Developer of those facilities set forth in the Acquisition Agreement. Such facilities are expected to consist of certain transportation improvements, water system improvements, recycled water system improvements, drainage system improvements, wastewater system improvements, park, parkway and open space improvements, Specific plan lnfrastructure Fee program improvements and certain Specific Plan Infrastructure Fee ofligations (collectively, the "Facilities"). Construction of the Facilities is required for development within the Improvement Area and the District to be completed.
I Page 184
12/12/2023 Item No.2.
proceeds from the Local Obligations are expected to finance some, but not all, of the Facilities eligible to be financed within the District, and the District expects to issue one or more series of bonds to fin-ance the acquisition of additional facilities in the future. See "PROPOSED PROPERTY DEVELOPMENT-Development Plan and Status of Development-status of Development."
THE BONDS
General
The Bonds are secured by a pledge of amounts paid with respect to the Local Obligations' The Local Obligations are secured by a pledge of Special Taxes (including both the Facilities Special Tax and the Servic-es Special Tax, each as defined herein), levied against Taxable Property within the Improvement Aiea, net of Priority Administrative Expenses. See "DEBT SERVICE SCHEDULE" and ,,SiCURITY AND SOURCES OF PAYMENT FOR THE BONDS." The Local Obligations are secured by a pledge of Special Taxes (net of Priority Administrative Expenses) on parity with any Additional Local Obligations (defined below)'
The Local Obligations Indenture establishes a Local Obligation Reserve Fund and a Local Obligations Reserve Account therein with respect to the Local Obligations. Amounts available from the Locai OUtigations Reserve Account are available to pay debt service on the Local Obligations. The Local Obligations Indenture requires the funding of separate debt service reserve accounts for the Local Oblilations and any Additional Local obligations, each of which may be used only to pay the principal of and interest on the related series of special tax bonds issued under the Local Obligations Indenture' There is no reserve fund with respect to the Bonds. Amounts available from the Local Obligations Reserve Account are not available to cure a deficiency generally in the Trust Estate to make debt service payments on the Bonds.
Description of the Bonds
General. The Bonds will be dated their date of delivery and mature on September I, as set forth on the inside front cover page hereof (each, a "Principal Payment Date"). Interest is payable semiannually on March 1 and September 1 of each year, commencing September l, 2024 (each, an "lnterest Payment Date").
The Bonds will be issued as fully registered bonds, without coupons, in denominations of $5,000, or any integral multiple thereof. The Bonds will be issued in book-entry only form and will be registered in the naml of Cede & Co., as nominee of The Depository Trust Company, New York, New York (..DTC"). DTC will act as securities depository for the Bonds. So long as the Bonds are in book-entry only forrn, principal of and redemption premium, if any, on the Bonds will be payable to DTC or its no*in.", wiro wiit in turn remit such payments to DTC Participants for subsequent disbursement to the Beneficial Owners. See APPENDIX F-"DTC AND THE BOOK-ENTRY ONLY SYSTEM'" principal of, and redemption premium, if any, on the Bonds is payable at the corporate trust office of the Trustee- Interest on the Bonds will be paid only to the registered owners as shown on the Trustee's books as of the fifteenth day of the calendar month next preceding each Interest Payment Date (the ..Record Date"), except that in the case of an owner of $1,000,000 or more in aggregate principal amount of Bonds outstanding, payment will be made at the owner's option by wire transfer of immediately available funds to an account in a bank or trust company or savings bank that is a member of the Federal Reserve System and that is located in the continental United States of America according to instructions provided 6y such owner to the Trustee and received no later than the Record Date for such lnterest Payment Date.
9 Page 185
12/12/2023 Item No.2.
The Bonds are special, limited obligations of the Authority. The Bonds are payable solely from and secured by the Trust Estate of the AuthJri[ pledged under the Trust Agreement, consisting primarily of payments received by the Authority from the District under the Local Obligations, which payments are ...ur"o by a lien of *re Special Taxes (defined herein) (net of Priority Administrative Expenses) levied .rpon prop"rty within the improvement Area, as more fully described herein' See "SECURITY AND
SOURCES OF PAYMENT FOR THE BONDS'''
payments under the Local Obligations are calculated to be sufficient to permit the Authority to pay the principal of, and interest on, the Bonds when due. Pursuant to the Local Obligations Indenture, a Locd obtigatlons Reserve Account is established for the Local obligations. Amounts available from the Local Oblilations Reserve Account are not available to cure a deficiency in the Trust Estate available to pay debt ,.i-lni"* of the Bonds. See "SECURITY AND SOURCES OF PAYMENT FOR THE BONDS- Terms of the Local Obligations-Local Obligations Reserve Account." No Additional Bonds under the Trust Agreement. The Trust Agreement does not permit the Authority to issue any additional bonds on parity with the Bonds. However, subject to certain conditions contained in the Locat OUtigations Indentuie, the District may at any time issue bonds (the "Additional Local Obligations',) payabi! from the net proceeds of the Special Tax (after payment of Priority Administrxive Expenses; on parity with the Local Obligations. See "SECUzuTY AND SOURCES oF pAyMENT FOR iHE BONDS-Terms of the Local Obligations-Additional Local Obligations;' Redemption Provisions*
Optional Redemption. The Bonds are subject to optional redemption by the Authority prior to their respective maturitY dates as a whole or in part on any date on or after 20_, from any source of available funds other than Minimum Sinking Fund Payments and Special Tax Prepayments, at the following redemption prices (computed upon the principal amount of the Bonds or portions thereof called for redemption) together with accrued interest thereon to the date fixed for redemPtion:
103% if redeemed on any date on or after
-,24-through 20_;
lO2% if redeemed on any date from ..---...-...-, 20-
through 20.
101% if redeemed on any date from
through ,20-; and
2A
100% if redeemed on 20_ and any date thereafter.
IREMATNDER OF PAGE TNTENTIONALLY LEFT BLANK]
- Preliminary" subject to change.
10 Page 186
12/12/2023 Item No.2.
Extraordinary Redemption from Prepayment of Special Taxes. The Bonds are subject to extraordinary redemption by tfie Authority prior to their respective maturity dates, as a whole or in part on any Interesi payment Date on or after 20. , solely from funds derived from the exiraordinary redemption of Local outigations rrom Special Tax Prepayments, at the following redemption prices (computed upon the principal amount of_the Bonds or portions thereof called for redemption) together with accrued interest thereon to the date fixed for redemption:
103% if redeemed on any Interest Payment Date on or after _,20- through , 20-;
102% if redeemed on an Interest Payment Date on ,20_
and ,20-;
101% if redeemed on an Interest Payment Date on 2A
and 20-_; and
prepayments from prepaid Special Taxes could be made by any of the owners of any of the properqy *itttin the Imprwement Area, including the Homebuilders and the Landbank, any other i"u"top"rr or homebuildLrs owning Taxable Property in the Improvement Area or any individual owner; and they could also be made from the proceeds ofbonds issued by or on behalfofan overlapping special assessment district or community facilities district. The resulting redemption of Bonds that were purchased at a price greater than the applicable redemption price could reduce the otherwise expected yield on such lionds. See ,,CERTAIN RISKS To BoNDHoLDERS-Potential Early Redemption of Bonds from Prepaid SpecialTaxes'"
Mandatory Sinking Fund Redemption of Bonds. The Bonds maturing on September 1, 20- are subject to mandatory redemption in part on September 1 of each year commencing September 1, 20-, at a ridemption price equal to one hundred percent (100%) of the principal amount thereof called for redemption together with accrued interest thereon to the date fixed for redemption:
100% if redeemed on
thereafter.
20_ and any Interest Payment Date
Bonds
Minimum Sinking Fund
Payment Date
(September 1) Minimum Sinking Fund Payment
$
1 Maturity
IREMATNDER OF PAGE INTENTIONALLY LEFT BLANK]
1l
12/12/2023 Item No.2.
The Bonds maturing on September 1,20- are subject to mandatory redemption in part on September 1 of each y"* "J*r"ncing
September t,20-, at a redemption price equal to one hundred percent (100%) of the principal amount thereof called for redemption together with accrued interest thereon to the date fixed for redemption:
Minimum Sinking Fund
Payment Date Bonds
(September 1) Minimum Sinking Fund Payment
$
i MaturitY.
If the Bonds subject to mandatory redemption are redeemed in part prior to their stated maturity date other than from Minimum Sinking Fund Payments, the Minimum Sinking Fund Payments for such Bonds shall be reduced proportionately by the principal amount of such Bonds so redeemed.
Redemption Instructions. Upon any prepaymen! of a Local Obligation, the Authority shall deliver to the Trustee a Written order of the Auihority designating the amounts and maturities of the Bonds to be redeemed, which shall be in the manner necessary to enable the Authority to deliver a -ca9h
Flow Certificate satisffing the requirements described below. In the event only a portion of the Outstanding Bonds or anv maturity are to be redeemed at any one time, the Trustee shall select the particular donds of each maturity date to be redeemed in accordance with DTC procedures (which, at the time of the issuance of the Bonis, would be a redemption by lot) or, if the Bonds are not then in book- entry, in a manner that it deems appropriate and faii. The Trustee shall redeem Bonds in Authorized Denominations.
Upon any redemption of a portion but not all of the Outstanding Bonds, the Authority shall deliver to the Trustee a Cash Flow ienificate to the effect that, assuming all payments are made with respect to the Local Obligations, (i) the Revenues, together with moneys on deposit in other funds and accounts held under the irust Agreement, will be sufficient to pay all Principal Installments, Minimum Sinking Fund payments and interist payments on the Bonds when due; and (ii) the redemption premiums, if any,"on the Local Obligations, together with other Revenues available to the Trustee for such purpose, are sufficient to offset un! diff"r.nr" b.t"""n-the interest to accrue on the Bonds to be paid or redeemed with the proceeds of prepayment of such Local Obligations (plus any redemption premium payable upon redemption of such rionO*j and the income to be earned on any investment of such proceeds (assured as of the date of payment thereof, in each case until the date of payment or redemplion of Bonds, such that in no event *itt th" piepayment of Local obligations cause the Trustee to have insufficient funds to pay debt service on the Bonds when due'
ln no event shall Bonds be redeemed if upon such redemption the principal amount of the Local obligations remaining outstanding will be less than the total principal amount of outstanding Bonds.
Such Written order-of the Authority may specifl that optional redemption of the Bonds will be conditioned upon receipt offunds or other events'
t2
12/12/2023 Item No.2.
Notice of Redemption. Subject to receipt of the written order of the Authority described under .,-Redemption Instrucfrons," the Trustee shall give notice of redemption; prsy-ided, that Bold;, identified by cuSlp numbers, serial numbers and maturity date, have been called for redemption and, in the case of Bonds to be redeemed in part only, thd portion of the principal amount thereof that has been called for redemption (or if all the Ouistanding Bonds are to be redeemed, so stating, in which event such serial numbers may be omitted), that they *itt ur due and payable on the date fixed for redemption (speciffing such date) upon surender thereof to the Trustee at its Corporate Trust Office, subject to any conditions to such reiemption specified in the written order of the Authority, at the redemption price (speciffing such price), together with any accrued interest to such date, and that all interest on the Bonds ior potiiotit thereof) ,o to f," redeemed will cease to accrue on and after such date and that from and after such date such Bond (or such portion thereof) shall no longer be entitled to any lien, benefit or security under the Trust Agreement, and the owner thereof shall have no rights in respect of such redeemed Bond or such portion except to receive payment from such money of such redemption price plus accrued interest to the date fixed for redempiion. If sufficient monies for the payment of the redemption price. of all Bonds to be redeemed are not then on deposit with the Trustee, such notice shall also state that redemption is conditioned upon the timely deposit of sufficient funds therefor with the Trustee.
Such notice shall be mailed by first class mail, in a sealed envelope, postage prepaid, at- least thirty (30) but not more than sixty (60j days before the date.fixed for redemption, to the Owners of such nonir'1o, portions thereof) ro "atia for redemption, at their-respective addresses as the same shall last appear on the Bond Register; provided, that neither the failure of an Owner to receive notice of redemption of Bonds nor"any."ilr ir-*ch notice shall affect the validity of the proceedings for the redemption of Bonds.
Any notice of optional redemption may be rescinded by written notice given by the Authority to the Trustee no later than three Business Days piior to the date specified for redemption. The Trustee shall give notice of rescission of the notice of optional redemption or non-satisfaction of any conditions Jpecified in the notice of optional redemption as soon as practicable to the same parties and in the same manner as the notice of redemption was given'
So long as the Bonds are in book-entry only form, notices of redemption will be given directly by the Trustee to DTC and not to the Beneficial Owners of the Bonds. See APPENDIX F-"DTC AND THE BOOK-ENTRY ONLY SYSTEM."
purchase in Lieu of Redemptian. ln lieu of redemption of any Bond, amounts on deposit in the proceeds Fund, the principal Fund or in the Redemption Fund may be used and withdrawn by the Trustee at any time prior to a notice of redemption having been delivered, upon a Written order for the purchase of such Bonds at public or private iale as and when and at such prices as the Authority may in its discretion determine, but not ir,
"*".r,
of the lower of the highest or then current redemption price thereof plus accrued interest to the purchase date; and all Bonds so purchased shall be delivered to the Trustee for cancellation.
payment of Redeemed Bonds. If notice of redemption has been given and not rescinded and if the conditions to such redemption specified therein, if any, have been satisfied, each as provided in the Trust Agreement, tt "
gond, or portions thereof called for rldemption will become irrevocably due and payable on the date fixed for redemption at the redemption price thereof, together with accrued interest to the date fixed for redemption, upon pr"r"ntation and *rr.nd"t of the Bonds to be redeemed at the office specified in the notice of redempiion. tf less than the full principal amount of a Bond is called for redemption, the Authority is required to execute and deliver and ihe Trustee is required to authenticate, upon surrender of such Bond, and without charge to the Owner thereof, Bonds of like interest rate and maturity in an IJ Page 189
12/12/2023 Item No.2.
aggregate principal amount equal to the unredeemed portion of the principal amount of the Bonds so .Jiena".eo in such Authorized Denominations as specified by the owner.
If any Bond or any portion thereof has been duly called for redemption and payment of the redemption price, togeth". *itt unpaid interest accrued to the date fixed for redemption, has been made or provided foi uy the Authorify, then interest on such Bond or such portion will cease to accrue from such iate, and from and after such date such Bond or such portion will no longer be entitled to any lien, benefit or security under the Trust Agreement, and the ownei thereof will have no rights in respect of such Bond or such portion except to receive payment of such redemption price, and unpaid interest accrued to the date fixed for redemPtion.
ESTIMATED SOURCES AND USES OF FUNDS
The proceeds from the sale of the Bonds will be used to purchase the Local Obligations. -Tl" proceeds of itre Local obligations in turn will be used to finance construction and acquisition of the Facilities and pay costs of ilsuance of the Local obligations and Bonds. The following table sets forth the sources und ut"t ofthe funds as allocated to the Bonds:
Sources of Funds
Principal Amount
I P lu s / Le s s]; [Net] Ori gi nal I ssue [Prem ium/D i scount] Total Sources
Uses ofFunds
Acquisition and Construction Fund
Underwriter's Discount
Deposit to Local Obligations Reserve Account(l)
Deposit to Local Obligations Capitalized Interest Account(2) Deposit to Costs of Issuance Fund(3)
Total Uses
IREMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
$
$
$
$
(r) A ponion of the purchase price of the Local obligations will be {?osited into the Local obligations Reserve Account for the Local Obligations. See "SgCUR1TY AND SOIURCES OF PAYMENT FORTHE BONDS'" (2) To pay interest on u portion of the Local obligations and, in hrm, a portion of the Bonds' through September 1,2a24' (3) A portion or tne pulJase price of the Loca'i obligations will be used to pay costs of issuance including lees of Bond Counsel and the ruf"nl"ipa idui.or, the initial fees ofthe Trustee, noncontingent fees ofthe Appraiser' printing costs and other miscellaneous exPenses'
14 Page 190
12/12/2023 Item No.2.
DEBT SDRVICE SCIIEDULE
The annual scheduled debt service for the Bonds, assuming no early redemption other than from mandatory sinking fund installments, is set forth in Table I below. The Local Obligations are sized to provide tbOX of itre debt service on the Bonds when due and have the same principal amortization as the Bonds. The Local Obligations will be issued with an annual scheduled debt service that results in at least l10o^ annual debt.*-'i"" coverage from the revenues of the Effective Tax Rate Evaluation Maximum Facilities Special Tax (as defined herein) for Developed Property as of October 19, 2023, and the Effective Tax Rate Evaluation Minimum Facilities Revenues for the remaining Taxable Propefty expected to be generated in the Improvement Area, net of Priority Administrative Expenses (defined beiow). The Diitrict expects that Additional Local obligations will be issued on parity with the Local Obligations as the Improvement Area develops. See "SECURITY AND SOURCES OF PAYMENT FOR}HE BONDS-Terms of the Local Obligations-Additional Local Obligations;' Table I
Folsom Ranch Financing AuthoritY
city of Folsom Community Facilities District No.23 (Folsom Ranch) Improvement Area No.2
Special Tax Revenue Bonds, Series 2024
Debt Service Schedule(r)
Period Ending
(September l) PrinciPal
@------$-
2025
2026
2027
2028
2A29
2030
2031
2032
2033
2034
2435
2036
2037
2038
2039
2040
2041
2042
2A43
2044
2045
2046
2447
2048
2049
2050
2051
2052
2053
lnterest
$
Total Debt
Service
$
TOTAL
Amounts rounded to the nearest dollar.
Debt service on a portion of the Local Obligations capitalized through September 1,2024. $$$
(r)
(2)
Source: Piper Sandler & Co.
l5 Page 191
12/12/2023 Item No.2.
The following table shows the expected debt service coverage for the Local Obligations for calendar year 2A25,ta"king into account the debt service on the Local Obligations for that year, based on the projected Fiscal year 2024-25 revenues from the Maximum Facilities Special Tax for all Taxable property in the Improvement Area, net of Priority Administrative Expenses in the amount of $20,400' Table 2
city of Folsom community Facilities District No.23 (Folsom Ranch) Improvement Area No.2
Fiscal Year 2024'25
Debt service and Debt seryice coverage - Local obligations Priority
Administrative
Expense(2)
2024.25 s658,221 $20,400 $637,821 $576,800 |lo.6v'
ol-*T[; Maximum Facilities Special Tax Rates escalate annually at 2o/o. Based on the development status of the Taxable Property as of October 19,2023.
(2) The prioriry Administrative Expense amount was established at $20,000 for Fiscal Yeu 2023-24 and escalales annually atZYo.
Source: piper Sandler & Co. for Local Obligations debt sewice figures; NBS for all other amounts.
SECURITYANDSOURCESoFPAYMENTFORTHEBONDS
The Bonds are secured by a lien on and pledge of the Trust Estate, consisting primarily of payments received by the Authority from the District under the Local Obligations, which payments are .eiurea by Special Tu*", (net of Priority Administrative Expenses) levied upon property within the Improvement Area and received by the District'
NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE CITY, THE DISTRICT, THE AUTHOzuTY, THE, STATE OF CALIFORNIA OR ANY OTHER POLITICAL SUBDIVISION THEREOF IS PLEDGED TO THE PAYMENT OF THE BONDS. THE AUTHORITY FIAS NO TAXING POWER. EXCEPT FOR THE TRUST ESTATE, NO OTHER REVENUES OR TAXES ARE PLEDGED TO THE PAYMENT OF THE BONDS. THE BONDS ARE NOT GENERAL OBLIGATIONS OF THE AUTHOzuTY, THE DISTRICT OR CITY, BUT ARE LIMITED
OBLIGATIONS OF THE AUTHORITY PAYABLE SOLELY FROM THE TRUST ESTATE' DERIVED PRIMAzuLY FROM PAYMENTS ON THE LOCAL OBLIGATIONS FROM THE
PAYMENT OF THE SPECIAL TAXES LEVIED WITHTN THE IMPROVEMENT AREA AS MORE FULLY DESCRIBED HEREIN.
The Trust Agreement does not permit the Authority to issue any additional bonds on parity with the Bonds. HowevJr, subject to certa-in conditions contained in the Local Obligations Indenture, the District may at any time issue Additional Local obligations payable from the net proceeds of the Special Tax (after payment of priority Administrative Expenses) on parity with the Local Obligations' See ..SECURITY AND SOURCES Or PAYMENT FOR THE BONDS-TETMS Of thc LOCAI ObIigAtiONS- Additional Local Obligations'"
Fiscal
Year
Maximum
Facilities
Special Tax
Revenue(1)
Net
Maximum
Facilities
Special Tax
Revenue
Local
Obligations
Debt
Service
CFD Debt
Service
Coverage
l6 Page 192
12/12/2023 Item No.2.
General
The Trust Estate consists of the Revenues, the amounts in certain of the funds established and held under the Trust Agreement, and the Local Obligations. The Revenues consist of amounts received by the Trustee as the iayment of interest on, or the equivalent thereof, and the payment or return of principal of, or redempiion premiums, if any, on, or the equivalent thereof, the Local Obligations, whether as a result of scheduled payments, o. ,"dt.ption premiums, special Tax Prepayments or remedial proceedings taken in the event of a default thereon, and all investment earnings on any money held in the Funds held under the Trust Agreement (except the Rebate Fund)' The principal of and the interest on the Local Obligations are payable from the annual Special Taxes levied and to be collected on all real properly within the Improvement Area subject to the Special Taxes and the proceeds, if any, from the sale of such property for delinquency of such Special Taxes, after payment of priority Administrative Expenses. The Special Taxes securing the Local obligations include both the Facilities Special Tax and thi Services Special Tax (each as defined herein) levied within the Improvement Area. Thb Local Obligations are secured by a pledge on the Special Taxes (net of priority Administrative Expensesy on paiity with the pledge of such Special raxes for any Additional Local bbligations issued under the Local obligations Indenture. See "SECURITY AND SOURCES oF pAyMENT FOR THE BONDS-payment of ine Local Obligations" and "SECURITY AND SOURCES oF PAYMENT FOR THE BONDS-Terms of the Local obligations." The District may not issue indebtedness payable from the Special Taxes except as provided in,the Local Obligarions Indenture. See APPENDIX C-"SUMMARY OF PRINCIPAL DOCUMENTS- suMMARi oF THE LocAL OBLIGATIONS INDENTURE-Authorization and Issuance of Bonds- Additional Bonds; Subordinate Bonds." The City has, however, formed CFD l?, which has issued bonds secured by special taxes with a co-equal lien on property within the Improvement Area and has formed cFD 1g, which is authorized to issue bonds secured by special taxes with a co-equal lien on properry within the Improvement Area. See "FOLSOM PLAN AREA.' The Authority, the District and the City have no contiol over the amount of additional debt payable from taxes or assessments on all or any portion of the property within the Improvement Area that may be issued in_ the future by other lovernmental entlties or districts having jurisdiction over all or a portion of the land within the i*p.or"..nt Area. To the extent such Jebt is payable from other assessments or special taxes levied puisuant to the applicable law, such assessments or special taxes may have a lien on the property within ih" I-prou"ment Area on parity with the lien of the Special Taxes.
Flow of Funds
Receipt and Deposit of Revenues. As noted above, Revenues consist of amounts received by the Trustee as the payment of interest on, or the equivalent there_of,-and the payment or return of principal of, or redemption pr".iu*s, if any, on, or the equivalent thereof, all Local Obligations, whether as a result of scheduled payments, ot i"O"-ption-premiums, Special Tax Prepayments or remedial proceedings taken in the event of a default thereon, and ail investment earnings on any money held under the Trust Agreement (except the Rebate Fund). All Revenues, other than Revenues derived from the early redemption of Local duligutlon, from Special Tax prepayments received by the Trustee from the Authority, will be deposited into ihe Revenue Fund. on each Interest Payment Date and each Principal Payment Date, the Trustee will transfer Revenues from the Revenue Fund, in the amounts required in the order of priority as set forth below, with the requirements of each fund being fully satisfied, leaving no deficiencies therein, prior to any deposit into any fund later in priority:
17 Page 193
12/12/2023 Item No.2.
First: To the Interest Fund, an amount of Revenues which together with amounts on deposit therein, is equal to the interest due and payable on the Bonds due on such Interest PaYment Date;
Second: To the Principal Fund (i) on each Principal Payment Date from the Revenue Fund an amount of Revenues which, together with any amounts then on deposit in the Principal Fund (other than amounts previously deposited on account of any Bonds which have matured but which have not been presented for payment) is sufficient to pay the principal Installments on the Bonds due on such Principal Payment Date and (ii) on each deptember 1 on which a Minimum Sinking Fund Payment is required to be made_ (for deiosit in the Sinking Fund Account) from the Revenue Fund an amount of Revenues which is equal to the Minimum Sinking Fund Payment due and payable on such date. On each Principal Payment Date, the Trustee shall pay the principal or redemption price due and payable on the Bonds on such date from the Principal Fund.
Following such deposits, any remaining money in the Revenue Fund is required to be transferred to the Local Obligations Trustee for application under the Local Obligations Indenture. For additional information ..gurding the Flow of Funds, see "SECURITY AND SOURCES OF PAYMENT FOR THE BONDS-Local Obligations Flow of Funds'"
Revenues Derived from Special Tax Prepayments. All Revenues derived from early redemption of Local obligations from Special Tax Prepayments received by the Trustee will be immediately deposited into the Redemption Fund to be applied to the extraordinary redemption of Bonds. See "THE BoNDS-Redemption Provisions-Ex traardinary Redemption from Prepayment of Special Taxes-" Description of Local Obligations
The District will issue the Local Obligations in the principal amount of $10,250,000.* The Local Obligations are secured solely by the Special Taxes (net of Priority Administrative Expenses) levied upon certa]n real properly within the Improvement Area and proceeds of foreclosure sales in the Improvement Area.
The pledge of Special Taxes (net of Priority Administrative Expenses) levied within the Improvement'Arei is on parity with the pledge thereof securing any Additional Local Obligations issued under the Local Obligations Indenture. The District may issue Additional Local Obligations secured on parity with the pled"ge of the Special Taxes (net of Priority Administrative Expenses) within _the i*piou"*"nt Area oily in u".ordun." with the Local obligations Indenture. See APPENDIX C- ..SUMMARY oF PRiNCIPAL DoCUMENTS-SUMMARY OF THE LOCAL OBLIGATIONS INDENTIJRE-Authorization and Issuance of Bonds-l dditional Bonds; Subordinate Bonds." A description of the Improvement Area is set forth under the caption, "THE IMPROVEMENT AREA.''
Issuance of Local Obligations
The Local Obligations are authorized pursuant to the Mello-Roos Act and are issued under a resolution of the City C-ouncil of the City, as legislative body of the District and the Local Obligations Indenture. The Mello-Roos Act was enacted by the State Legislature to provide an altemate method of financing certain essential public capital facilities and services, especially in developing areas of the State' * Preliminary, subject to change.
l8 Page 194
12/12/2023 Item No.2.
Subject to approval by a two-thirds vote of qualified electors and compliance with the provisions -of the Meilo-Roos'Act, a lelislative body of a locai agency may issue bonds for a community facilities district and may levy and collect a special tax within such district to repay such indebtedness.
The Local Obligations constitute special tax obligations of the District payable as to both principal and interest froh tne annual SpeciaiTax (after payment of the District's Priority Administrative b,*p.nr".; to be levied by the District on land within the Improvement Area, including proceeds frgm tf9 sale of properry within the Improvement Area collected as a result of foreclosure of the lien of the Special Taxes and'certain funds and accounts held under the Local Obligations Indenture. The District's sole recourse in the event of a delinquency or failure to pay Special Taxes on a particular parcel is to institute foreclosure proceedings with respect io that parcel. However, the District is not obligated under the Local obligations'lndentureito enforce the lien olany delinquent installment of the Special Tax for any Fiscal year in which the District has received one hundred percent (100%) of the amount of such installment from the County pursuant to the Teeter Plan. See "SECURITY AND SOURCES OF PAYMENT FOR THE BONDS-Covenant for Foreclosure" and *SECURITY AND SOURCES OF PAYMENT FOR THE BONDS-The Teeter Plan" herein.
Payment of the Local Obligations
The Local Obligations constitute the limited obligations of the District payable as to both principal and interest troir the annual Special Tax (net of Priority Administrative Expenses) levied by the District on Taxable property within the Improvement Area, including proceeds from the sale of property within the Improve*"r,t Ai"u collected as a result of foreclosure of the lien on the Special Taxes and certain funds and accounts held under the Local Obligations Indenture. The District's sole recourse in the event of a delinquency or failure to pay Special Taxes on a particular parcel is to institute foreclosure proceedings with respect to that parcel.
The term ,.priority Administrative Expenses'o means an amount equal to (a) for Fiscal year 2023-24, $20,000, uni 6; for any subsequent Fiscal Year, the amount resulting from increasing the priority Administrative'Expenses on each July 1, from and including the July I immediately following the end of the then current Fiscal year to and inciuding the July I in such Fiscal Year by 2% of the amount in effect for the previous Fiscal Year.
THE LOCAL OBLIGATIONS ARE SPECIAL TAX OBLIGATIONS OF THE DISTRICT,
AND THE INTEREST ON AND PRINCIPAL OF AND REDEMPTION PREMIUMS, IF ANY, ON
THE LOCAL OBLIGATIONS ARE PAYABLE SOLELY FROM THE PROCEEDS OF THE SPECIAL
TAX (INCLUDING ANY PREPAYMENTS THEREOF AND PROCEEDS FROM THE SALE OF
PROPERTY COLLECTED PURSUANT TO THE FORECLOSURE PROVISIONS OF THE LOCAL
OBLIGATIONS INDENTURE FOR THE DE,LINQUENCY OF THE SPECIAL TAX)' NET OF PRIORITY ADMINISTRATIVE EXPENSES, AND AMOI"INTS IN CERTAIN FLTNDS AND ACCOI.JNTS ESTABLISHED IN THE LOCAL OBLIGATIONS INDENTURE, AND THE DISTRICT IS NOT OBLIGATED TO PAY THE LOCAL OBLIGATIONS EXCEPT FROM SUCH FLINDS. THE
GENERAL FTJND OF THE CITY AND THE FLINDS OF THE DISTRICT ARE NOT LIABLE, AND
NEITHER THE FULL FAITH AND CREDIT OF THE DISTRICT NOR THE CITY ARE PLEDGED
FOR THE PAYMENT OF THE INTEREST ON OR PRINCIPAL OF OR REDEMPTION PREMIUMS' IF ANY, ON THE LOCAL OBLIGATIONS. NO TAX OR ASSESSMENT OTHER THAN THE
SPECIAL TAX SHALL EVER BE LEVIED OR COLLECTED TO PAY THE INTEREST ON OR
PRINCIPAL OF OR REDEMPTION PREMIUMS, IF ANY, ON THE LOCAL OBLIGATIONS, THE
LOCAL OBLIGATIONS ARE NOT SECURED BY A LEGAL OR EQUITABLE PLEDGE OF OR
CHARGE, LIEN OR ENCUMBRANCE UPON ANY PROPERTY OF THE DISTRICT OR ANY OF
ITS INCOME OR RECEIPTS EXCEPT THE PROCEEDS OF THE SPECIAL TAX (INCLUDING 19 Page 195
12/12/2023 Item No.2.
ANY PREPAYMENTS THEREOF AND PROCEEDS FROM THE SALE OF PROPERTY
COLLECTED PURSUANT TO THE FORECLOSURE PROVISIONS OF THE LOCAL
OBLIGATIONS INDENTURE FOR THE DELINQUENCY OF THE SPECIAL TAX), NET OF PRIOzuTY ADMINISTRATIVE EXPENSES, AND AMOLiNTS IN CERTAIN FLJNDS AND
ACCOUNTS ESTABLISHED IN THE LOCAL OBLIGATIONS TNDENTURE, AND NEITHER THE
PAYMENT OF THE INTEREST ON OR PRINCIPAL OF OR REDEMPTION PREMIUMS, IF ANY'
ON THE LOCAL OBLIGATIONS IS A GENERAL DEBT, LIABILITY OR OBLIGATION OF THE CITY OR THE DISTzuCT. THE LOCAL OBLIGATIONS DO NOT CONSTITUTE AN
INDEBTEDNESS OF THE CITY OR THE DISTRICT WITHTN THE MEANTNG OF ANY CONSTITUTIONAL OR STATUTORY DEBT LIMITATION OR RESTzuCTION, AND NEITHER
THE CITY COLTNCIL NOR THE DISTRICT NOR ANY OFFICER OR EMPLOYEE THEREOF
SHALL BE LIABLE FOR THE PAYMENT OF THE TNTEREST ON OR PRINCIPAL OF OR
REDEMPTION PREMIUMS, IF ANY, ON THE LOCAL OBLIGATIONS OTHERWISE THAN
FROM THE PROCEEDS OF THE SPECIAL TAX (INCLUDING ANY PREPAYMENTS THEREOF
AND PROCEEDS FROM THE SALE OF PROPERTY COLLECTED PURSUANT TO THE
FORECLOSURE PROVISIONS OF THE LOCAL OBLIGATIONS INDENTURE FOR THE
DELINQUENCY OF THE SPECIAL TAX), NET OF PRIORITY ADMINISTRATIVE EXPENSES, AND AMOLTNTS IN CERTAIN FLINDS AND ACCOI.'NTS ESTABLISHED IN THE LOCAL OBLIGATIONS INDENTURE.
Although the Special Tax will constitute a lien on properly subject to taxation in the Improvement Area, it will noi constitute a personal indebtedness of the owners of such property. There is no assurance that the owners will be financially able to pay the annual Special Tax or that they will pay such tax even jf financially able to do so. The risk of nonpayment by propefty owners is more fully described in *CERTAiN RISKS TO BONDHOLDERS-Collection of Special Tax'" Local Obligations Flow of Funds
Application of Speciat Tax Fund. Pursuant to the Local Obligations Indenture, the District agrees and covenants that it wlil oeposit the Special Tax proceeds in the community Facilities Fund, which fund is established in the treasury of the City. All money in the Community Facilities Fund shall be used and withdrawn by the District solely for the benefit of the District in accordance with the Mello-Roos Act, including payment of Expenses and Services. Pursuant to the Local obligations Indenture, the District further "#".
and covenunts that, after payment of Priority Administrative Expenses, it will transfer to the Local Obligations Trustee from the Community Facilities Fund amounts sufficient and in suffrcient time for the Local obligations Trustee to make the transfers required by it, and the Local obligations Trustee shall deposit sulh proceeds as and when received in the Special Tax Fund' All money in the Special rax Funi is required to be set aside by the Local obligations Trustee in the following respective special account and fund within the Special rax Fund in the following order of priority, and all money in each such account and fund shall be applied, used and withdrawn only for the purposes specified in the Local Obligations Indenture:
(1) RedemPtion Account; and
(2) Local Obligations Reserve Fund.
Redemption Account. On or before March 1 and September 1 in each year, the Local Obligations Trustee shall, from the money in the Special Tax Fund, transfer to and deposit in the Redemption Account an amount of money "quui to the aggregate amount of interest becoming due and payable on all outstanding Local obligutions and any Additional Local obligations on such March 1 or September 1, as the case n.,uy b", and orior before September I in each year, the Local obligations Trustee shall' from the 20 Page 196
12/12/2023 Item No.2.
then remaining money in the Special Tax Fund, transfer to and deposit in the Redemption Account an amount of money equal to the aggregate amount of principal becoming due and payable on all outstanding seriai Local obligations "na
uny Additional Local obligations on such September I plus all Minimum Sinting Fund Account payments required to be made on such September I into the Sinking Fund Subaccount; provided, that all of the aforesaid payments shall be made without priority of any payment over any'other payment, and in the event that money in the Special Tax Fund on any March I or 'september I is not equal-to the amount of interest becoming due on all Local Obligations and any Additional Local Obligations on such date, or in the event that the money in the Special Tax Fund on any September I is not etual to the amount of principal of the Local Obligations and Additional Local Obligations becoming due on such date, as the case may be, then such money shall be applied pro rata in suchlroportion as s-uch interest and principal and Minimum Sinking Fund Account Payments bear to each other.
No deposit need be made into the Redemption Account if the amount of money contained therein is at least.quul to the amount required by the terms of the preceding paragraph to be deposited therein at the times and in the amounts provided in the Local Obligations Indenture.
All money in the Redemption Account shall be used and withdrawn by the Local Obligations Trustee to pay the interest on the Local obligations and any Additional Local obligations as it shall become dui and payable (including accrued inlerest on any Local obligations or any Additional Local obligations pur"hurld o. i"dee*.Jprior to maturity) plus the principal of and redemption premiums, if uny,"on the Local Obligations and any Additional Local Obligations as they shall mature or upon the prior reiemption thereof, "*i"pt
that any money in the Sinking Fund Subaccount shall be used only to purchase or redeem or retire the term Locai orligations and any Additional Local obligations as provided in the Local Obligations Indenture.
Local Obligations Reseme Fund. On or before March 1 and September i in each year, the Local Obligations Trustee shall, from the then remaining money in the Special Tax Fund, transfer to and deposit ln "if, Local obligations Reserve Account within the Local Obligations Reserve Fund such amount of money as shall be required to restore each such Local Obligations Reserve Account to a sum equalto the Required Bond Reserve (as defined herein) for the applicable series of Local obligations or Additional Local Obligations, pro rata,to the extent that amounts are available in the Special Tax Fund for such purpose; un-d to. this purpose all investments in each Local Obligations Reserve Account shall be valued ^on
tvturch 1 and Septernfer 1 of each year at the face value thereof if such investments mature within twelve (12) month, fro. the date of valuation, or if such investments mature more than twelve (12) months after the date of valuation, at the price at which such investments are redeemable by the holder at his option, if so redeemable, or if not so iedeemable, at the lesser of (i) the cost of such investments plus the amortization of any premium or minus the amortization of any discount, or (ii) the market value of such investments. noi purposes of allocating remaining money in the Special Tax Fund between more than one Local obligations Reserve Account, any such transfers to and deposits in each Local Obligations Reserve Account shall be made equally and ratably.
No deposit need be made into a Local Obligations Reserve Account if the value of the investments contained therein is at least equal to the Required Bond Reserve for the applicable series of Local Obligations or Additional Local Obligations'
Al1 money in each Local Obligations Reserve Account shall be used and withdrawn by the Local Obligations Trusiee solely for the purpose of paying the interest on or principal of the corresponding seriei of Local Obligation, o. Additional Local Obligations in the event there is insufficient money in the Redemption Accouit available for this purpose; provided, that if as a result of any of the foregoing valuations or due to redemption as a result of pioperty owner prepayments it is determined that the 21 Page 197
12/12/2023 Item No.2.
amount of money in a Local Obligations Reserve Account exceeds or will exceed the Required Bond Reserve for the applicable series of Local obligations or Additional Local obligations, the Local Obligations Trustee shall withdraw the amount of money representing such excess from such fund and shalldeposit such amount of money in the Redemption Account. For the avoidance of doubt, amounts in a Locaf obligations Reserve Account are not available to make up a deficiency for the payment of principal andlnterest on any series of Local obligations or Additional Local Obligations, other than the specific series of Local obligations or Additional Local obligations to which that Local obligations Reserve Account relates.
Surplus Amounts. On or before March 1 and September I in each year, the Local Obligations Trustee shall, from the then remaining money in the Special Tax Fund, transfer all amounts remaining in the Special Tax Fund after the transfeis specified in the immediately preceding paragraphs to the City for deposit in the Community Facilities Fund.
Special Tax Authorization
The Special Tax is to be levied and collected against all Taxable Property within the Improvement Area in accordance with the Amended Rate and Method of Apportionment. S_":
APPENDIX A-"AMENDED RATE, METHOD OF APPORTIONMENT AND MANNER OF COLLECTION OF SPECIAL TAX." The Special Tax is to be collected in the same manner as ordinary ad valoremproperly taxes are collected, and, except as otherwise provided in the covenant for foreclosure and in the Mello-Roos Act, is to be subject to the same penalties and the same procedure, sale and lien priority in case of delinquency as is provided for ad valorem property taxes' See "SECURITY AND.souncg,s OF PAYMENT FOR THEBONDS-CovENANI fOr FOTECIOSUTE,' ANd ..CERTATN RISKS TO BONDHOLDERS-Collection of Special Tax."
The Amended Rate and Method of Apportionment of the Special Tax, subject to the maximum rates set forth therein, apportions the total debt service requirement (principal, interest, and mandatory sinking fund payments), restoration of the Required Bond Reserve, current annual expenses, pay as you go improvement costs and other costs each year among the Taxable Properly in the Improvement Area.
SEE APPENDIX A-.'AMENDED RATE, METHOD OF APPORTIONMENT AND MANNER OF COLLECTION OF SPECIAL TAX.'
pursuant to the Local Obligations Indenture, so long as any Local Obligations or Additional Local Obligations are Outstanding, ihe District is required annually to levy the Special Tax against all Taxable property in the Improvernent Area and make provision for the collection of such Special Tax in amounts which will be sufficient, after making reasonable allowances for contingencies and errors in the estimates, to yield proceeds equal to the amounts required for compliance with the agreements, conditions, covenants and terms contained in the Local Obligations Indenture, and which in any event will be sufficient to pay the interest on and principal of and Minimum Sinking Fund Account Payments for and redemption premiums, if any, on the Local obligations and any Additional Local Obligations as they becom" du" und payable, to replenish each reserve account within the Local Obligations Reserve p'und to the RequireO g-onO Reserve and to pay all current Expenses as they become due and payable' Under the Amended Rate and Method of Apportionment, the Facilities Special Tax (as defined herein) levied in any fiscal year against any Assessor's Parcel (as defined in the Amended Rate and Method of Apportionment) oiD"u.lop"d Property classifred as ResidentialProperly may not be increased as a consequence of delinquency or default by the owner or owners of any other parcel or parcels within the Improvement Area by'more than l0% above the amount that would have been levied against such Assessbr,s parcel in that fiscal year had there never been any such delinquencies or defaults. Pursuant to the Amended Rate and Method of Apportionment, properly is considered "Residential Property" once a .", Page 198
12/12/2023 Item No.2.
building permit could be issued for the purposes of constructing one or more Residential Units, including either si"ingle family detached homes or multi-family attached properties, such as apartments, and properly is considered ,,Developed property" if a building permit for new construction was issued prior to June 30 of the previous fiscal year. See *CERTAIN RISKS TO BONDHoLDERS-Maximum Special Tax." Covenant for Foreclosure
The Local Obligations Indenture provides that the Special Tax is to be collected in the same manner as ordinary ai valorem properly taxes are collected and, except as provided in the special covenant for foreclosure described-beiow and in the Mello-Roos Act, is subject to the same penalties and the same procedure, sale, and lien priority in case of delinquency as is provided for ad valorem properly taxes.
pursuant to Section 53356.1 of the Mello-Roos Act, in the event of any delinquency in the payment of the Special Tax, the District may order the institution of a Superior Court action to foreclose the lien therefor within specified time limits. In such an action, the real property subject to the unpaid amount may be sold at u;uAi"iut foreclosure sale. Such judicial foreclosure action is not mandatory.
However, the District has Jovenanted in the Local Obligations Indenture that it will annually on or before September I of each year review the public records of the County relating to the collection of the Special Tax in order to determine the amount of the Special Tax collected in the prior Fiscal Year, and if it determines on the basis of such review that the amount so collected is deficient by more than five percent (5%) of the total amount of the Special Tax levied in such Fiscal Year within the improvement Area, it will'within sixty (60) days thereafter institute foreclosure proceedings as authorized by the Mello-Roos Act in order to enforce the lien of the delinquent installments of the Special Tax against each lot or parcel of land in the Improvement Area, and will diligently prosecute and pursue such foreclosure proceedings to judgment and sale; provided, that irrespective of the foregoing if the District determines on the basis of such .evie* that p.op&ty owi"d by any iingle property owner in the Improvement Area is delinquent by four missed payments *ith r"tp""i to itr. Special Tax due and payable by such property owner by such delinquency
^daie,
then the Distiict will institute, prosecute and pursue such foreclosure proceedings in the time and manner provided in the Local obligations Indenture against such property owner, prqvid.94 further, that any u.iion, taken to enforce delinquent Special Tax liens shall be taken only consistent with Sections 53356.1 through 53356.7,both inclusive, of the Government Code of the State of California; and provided further, that the District is not obligated under the Local Obligations Indenture to enforce the ii"n or unv a"rinquent installment of the Special Tax for any Fiscal Year in which the District has received one hundred percent (100%) of the amount of such installment from the County pursuant to the Teeter Plan (described herein).
In the event that sales or foreclosures of properly are necessary, there could be a delay in paymentsto Owners of the Bonds (if the Local Obligations ReserveAccounthas been depleted) pending su"h .ules or the prosecution of such foreclosure proceedings and receipt by the District ofthe proceeds of sale. However, within the limits of the Special Tax, the District may adjust the Special Tax levied on Taxable property in the Improvement Area (subject to the limitation on the Maximum Facilities Special Tax, defined herein;, to piovide an amount required to pay interest on and principal of the Local Obligations and any-addiiional obligations payable from.the Special Tax,. and the amount, if any, n"".ir*y to replenish each subaccount of th"-Local obligations Reserve Fund to an amount equal to the Requirej BondReserve and to pay all current Expenses for the Improvement Area. There is, however, no urrurun". that the total amouni of tn. Special Tax that could be levied and collected against Taxable property (as defined in the Amended Rate and Method of Apportionment) in the Improvement Area will be at all times sufficient to pay the amounts required to be paid by the Local Obligations Indenture, even if the Special Tax is levied ai the Maximum Facilities Special Tax rates. See "CERTAIN RISKS To BONDHOLDERS-Maximum Special Tax."
23 Page 199
12/12/2023 Item No.2.
No assurance can be given that the real propefty subject to sale or foreclosure will be sold, or if sold, that the proceeds of sale will be sufficient to pay any delinquent installments of the Special Tax' The Mello-Roos Act does not require the District to purchase or otherwise acquire any lot or parcel of property to be sold if there is no other purchaser at such sale. The Mello-Roos Act and the Local bUiigation. Indenture do speci$ that the Special Tax will have the same lien priority as for ad valorem propi.ty taxes in the case of d"linquency. Section 53356.6 of the Mello-Roos Act requires that propefty witirin ih" I1np.ou"ment Area that is sold pursuant to foreclosure under the Mello-Roos Act be sold for not less than the amount ofjudgment in the foreclosure action, plus post judgment interest and authorized costs, unless the consent ofihe owners of at least 75Yo of the Local Obligations and any Additional Local Obligations issued under the Local Obligations Indenture is obtained.
No Required Advances from Available Surplus Funds
Neither the City nor the District is obligated to advance available surplus funds available from the City treasury to pay debt service on the Local Obligations or to replenish the Local Obligations Reserve Account; prauiOeO, that nothing shall affect the right of the District under the Mello-Roos Act to make advances to cure any deficiencies.
Terms of the Local Obligations
General. The City Council of the City established the District and designated the Improvement Area therein on May 26,2020. On that same date, the eligible voters of the District in the Improvement Area authorized the issuance of bonds in an amount not to exceed $36,000,000 for the Improvement Area.
The Local Obligations will be the first issuance of bonds for the Im,provement Area. The Local Obligations will be issued in the aggregate principal amount of $ 10,250,000* pursuant to the Mello-Roos Act and the Local Obligations Indenture. The Local Obligations will be dated the date of delivery of the Bonds. The Local Obligations are secured by a pledge of the Special Taxes (net of Priority Administrative Expenses) levied within the Improvement Area. The District may issue Additional Local Obligations on puiity with the Local Obligations in accordance with the Local Obligations Indenture.
Based on the expected Special Tax revenues at build-out, the District expects that, following the issuance of the Local Obligationi, Additional Local Obligations will be issued to finance the Facilities in the Improvement Area in a total amount of approximately $ 1 , 1 00,000.' This amount may vary depending on the timing of the issuance of the Additional Local Obligations, the size of the homes built and resulting Special Tax revenues, and the applicable interest rates at the time of any such issuance.
Local Obtigations Reserve Account. The Local Obligations Indenture establishes, for this series of the Local Obliga*tions specifically, a Local Obligations Reserve Account within the Local Obligations Reserve Fund to be held Uy tne Local Obligations Trustee. The Local Obligations Indenture requires that there be maintained in thi Local Obligations Reserve Account an amount equal to the Required Bond Reserve. .'Required Bond Reserve" is defined to mean, for the Local Obligations specifically, as of any date of calculation, the least ofi (a) the Maximum Annual Debt Service, (b) one hundred twenty-five percent (lZS%) of the Average Annual Debt Service or (c) ten (10%) percent of the original proceeds of ihe Local obiigations; p.ouid"d that the Required Bond Reserve shall be calculated on the date of issuance of the Local Obligations issued under the Local Obligations Indenture and shall not increase thereafter; and provided further that such requirement (or any portion thereof) may be satisfied by the provision of one or more policies of municipal bond insurance or surety bonds issued by a municipal tond insurer or by a letter of credit issued by a bank, the obligations insured by which insurer or issued by which bank, as the case may be, have ratings at the time of issuance of such policy or surety bond or letter *
Preliminary, subject to change.
24 Page 200
12/12/2023 Item No.2.
of credit equal to ooAA" or higher (without regard to qualifier) assigned by Fitch or "Aa" or higher (without regard to qualifier) assigned by Moody's or "AA" or higher (without regard to qualifier) assigned by S&P.
The Local Obligations Reserve Account is established specifically for the Local Obligations, and amounts in the Local Obligations Reserve Account are not available to make up a deficiency for the payment of principal and interest on any Additional Local Obligations. Pursuant to the Local Obligations inienture, each reserve account within the Local Obligations Reserve Fund is only available for paying the interest on or principal of the corresponding series of Local obligations or any Additional Local Obligations for which it was created.
The Required Bond Reserve with respect to the Local Obligations upon their date of issuance will be$
All money in the Local Obligations Reserve Account will be used and withdrawn by the Local Obligations Trustie solely for the purpose of paying the interest on and principal of the Local Obligations in thi event there is insufficient money available for the purpose; provided. that if as a result of any of the valuation of a Required Bond Reserve or as a result of any propefi owner prepayment it is determined that the amount ofmoney in the Local Obligations Reserve Account exceeds the Required Bond Reserve, the Local Obligations Trustee shall withdraw the amount of money representing such excess from such fund and shall deposit such amount of money in the Redemption Account. Amounts on deposit in the Local Obligations Reserve Account are not available to cure a deficiency in Revenues available to pay debt service on the Bonds.
Additional Local Obligations. The District may at any time, by a supplement to the Local Obligations Indenture, issue Additional Local Obligations that are payable from the proceeds of the Speciat Tax (after payment of Priority Administrative Expenses) on parity with the Local Obligations, subject to the following conditions, which conditions are precedent to the issuance of such Additional Local Obligations:
(i) The District shall be in compliance with all agreements, conditions, covenants and terms contained in the Local Obligations Indenture and in all Supplemental Indentures required to be observed or performed by it, and no Event of Default under the Local Obligations Indenture or under any Supplemental Indenture shall have occurred and shall be then continuing; (ii) The District shall establish a separate subaccount of the Local Obligations Reserve Fund for the payment of such Additional Local Obligations in an amount equal to the Required Bond Reserve; and
(iii) (a) In each year until the maturity date for the Additional Local Obligations, the Maximum Facilities Special Tax for Taxable Property classified as Developed Property, plus the Effective Tax Rate Evaluation Minimum Facilities Revenue (as defined in the Amended Rate and Method of Apportionment) for Taxable Property not classified as Developed Property less Priority Administrative expenses is estimated to cover at least one hundred ten percent (ll0%) of the sum of the Annual Debt Service for each year on the Local Obligations and all Additional Local Obligations, including such Additional Local bbligations to be issued, and (b) the Value of all Taxable Property, in aggregate, is at least three (3) times the aggregate Lien on such Taxable Property. "Facilities Special Tax" is the annual Special Tax to be levied in each Fiscal Year on each Assessor's Parcel of Taxable Property to fund the Facilities Special Tax Requirement in accordance with 25 Page 201
12/12/2023 Item No.2.
the Amended Rate and Method of Apportionment (each as defined in the Amended Rate and Method of Apportionment).
.,Developed propefly" means, for purposes of the requirement described above relating to the issuance of Rdbitional
'Local Obligations, Taxable Property for which a building permit for new construction has been issued as ofthe date ofcalculation' ..Maximum Facilities Special Tax" is the total maximum annual Facilities Special Tax, determined in accordance with the provisions of Section C of the Amended Rate and Method of Apportionment, which may be levied in any Fiscal Year on any Assessor's Parcel of Taxable Properly leatn as defined in the Amended Rate and Method of Apportionment). .,Value,, is defined as the current assessed valuation of the Taxable Prope(y and/or the appraised value of the Taxable property determined by a MAI appraiser. "Lien" is defined in the Local obligations Indenture as the aggregate irincipal amount of all overlapping debt and bon-d1 (including the Local obligations ana any aJaitional Local obligations) outstanding that are secured by a special tax levied purriunt to the Meilo-Roos Act or a special assessment levied on property within the Improvement Area, including any overlapping debt or bonds for community facilities districts or special assessment districts that is reasonably allocated to properfy within the Improvement Area.
Notwithstanding the foregoing, the District may issue one or more series of Additional Local Obligations (the .,Refu"nding Loiat 6bligations") without meeting the requirements summarized in para!.aph (iii) above if, aftei the issuance and delivery of such Refunding Local obligations, either (i) none of the Local obiigations and Additional Local obligations theretofore issued under the Local obligations Indenture *iil b" outstanding or (ii) the Debt Service in each Bond Year that begins after the issuance of such Refunding Local obligations is not increased by reason of the issuance of such Refunding Local Obligations.
Redemption of the Local Obligations. The Local Obligations are subject to extraordinary redemption by the pistrict from funds derived by the District from prepayments 9f the Special Tax, The^ mcal bbliguiion. are also subject to optional ani mandatory redemption by the District. A description of the redempiion prices and terms of the Local obligations is set forth under APPENDIX C-"SUMMARY OF PRTN.CIPAL DOCUMENTS-SUMMARY OF THE LOCAL OBLIGATIONS INDENTURE- Redemption of Bonds."
Selection of Local obligations for Redemption. lf less than all the outstanding Local obligations and any Additionai Local obligltions are to be redeemed as a result of prepayments of the Special Tax at uny onl time, the Local obligu-tion. and any Additional. Local Obligations shall be redeemed pro rata by -uturity. If less than all the-outstanding Local obligations and any Additional Local obligations are to be redeemed at the option of the Districiat any one time, the Local obligations and any Additional Local obligations of the latest maturity date or daies shall be redeemed prior to or simultaneously with the redeirption of the Local obligations and any Additional Local obligations maturing prior thereto, and if less than all the outstanding Lical obligations and any Additional Local obligations of any one maturity date are to be redeemed at iny one time, the Trustee shall select the Local Obligations and any Additional Local Obligations or the portion* thereof of such maturity date to be redeemed in integral multiples of five thousand dollars ($5,000) in a manner that it deems appropriate and fair' Special Tax AnalYsis
The following is a synopsis of the provisions of the Amended Rate and Method of Apportionment, which- should bL read in conjunclion with the complete text of the Amended Rate and 26 Page 202
12/12/2023 Item No.2.
Method of Apportionment which is attached as APPENDIX A. The definitions of the capitalized terms used under this caption .,-special Tax Analysis" are as set forth in APPENDIX A. This section provides only a summary of the Amended Rate and Method of Apportionment, and is qualified by more complete and detailed information contained in the entire Amended Rate and Method of Apportionment attached as APPENDIX A.
The Special Tax is to be levied and collected against all Taxable Property within the Improvement Area in accordance with the Amended Rate and Method of Apportionment approved by the landowner electors of the Improvement Area. The total annual levy of the Special Tax is calculated to .utirry the annual debt service during the ensuing Fiscal Year, to replenish the reserve fund for the Local Obligations, the allocable portion of administrative expenses, the amount necessary to cure any deliriquencils or to fund any deficiency of the amount to be available for the payment of principal or interest on bonds which are expected to occur in the ensuing Fiscal Year, to fund authorized facilities funded on a pay-as-you-go basis, to fund authorized services expenses and to pay amounts required to establish or.epienisir c"iain funds related to authorized services, less any available capitalized interest and earningt on th" funds that may be used to fund the aforementioned costs' Assignment to Land Use Categories. Each Fiscal Year, all Assessor's Parcels within the Improvement A..u will be classified as either Taxable Properly or Exempt Property. Taxable Propefty will be further classified as Developed Property, Small Lot Final Map Properly, Permit Ready Multi- FamilyA.{on-Residential Property, Large Loi Property, or Undeveloped Property and shall be subject to the levy ofthe annual SPecial Tax.
,,Developed property" means, for each Fiscal Year, all Taxable Property for which a building permit for new construction was issued prior to June 30 of the previous Fiscal Year. ,,Small Lot Final Map Property" means, for each Fiscal Year, all Taxable Property for which a Small Lot Final Subdivision Map was recorded prior to June 30 of the previous Fiscal Year. ,,permit Ready Multi-Family/Non-Residential Propertl/" means an Assessor's Parcel of Taxable property zoned for multi-family or non-residential land use for which all discretionary entitlements have b""n obtained, including without limitation, development plan review and improvement plan app-roval, such that building p..*lt, may be issued without further approvals for the construction of multi-family Residential Units or non-residential buildings within such Assessor's Parcel. The City shall have sole discretion, based upon available development information, in classifoing an Assessor's Parcel as Permit Ready Multi-FamilyAJon-Res idential Propefty'
,olarge Lot property" means, for each Fiscal Year, all Taxable Property for which a Large Lot Map was recirded prioito june 30 of the previous Fiscal Year, excluding any portion(s) thereof classified as Developed property, small Lot Final Map Property or Permit Ready MultiFamilyA'lon-Residential property. Large Lot pioperty also means, foi each Fiscal Year, all raxable Properly classified as Small Lot Final Map Remainder Property as of June 30 of the previous Fiscal Year' ,,Small Lot Final Map Remcinder Propert)" means an Assessor's Parcel that is created from the subdivision of Large Lot properry by the recordation of a Small Lot Final Subdivision Map that has not yet been mapped ?or final d^"n*iop*"nt approval. Small Lot Final Map Remainder Property is that portion of property for which the Small Lol Final Subdivision Map definition does not apply (i.e., does not contain individual lots for which building permits may be issued for Residential Units without further subdivision of such prope(y). Each Fiscal Year, all Taxable Property classified as Small Lot Final Map Remainder property, as of June 30 of the previous Fiscal Year, will be considered Large Lot Propefty. 27 Page 203
12/12/2023 Item No.2.
,,(Jndeveloped Property" means, for each Fiscal Year, all Taxable Property not classified as Developed property, Small Lot Final Map Property, Permit Ready Multi-FamilyA',lon-Residential Properly or Large Lot ProPertY.
,,Single-Family Detached Property - MLD Zoning" means, for each Fiscal Year, all Taxable property tor-wtrich a building permit could be issued for purposes of constructing one or more detached o. atta"-h"d Residential Units with a permiffed density range of ?-12 Residential Units per Acre, which is more fully described in the Folsom Plan Area Specific Plan adopted on June 28,2011 and as amended by the City Council.
,,Single-Family Detached Property - SF/SFHD Zoningl'means, for each Fiscal Year, all Taxable properly for-whictr a building permit could be issued for purposes of constructing one or more Residential Uniis.
-Single-Family
Detached properly - SF/SFHD Zoning shall consist of either single-family properly with a p"ti.titt"d density range of l-4 Residential units per Acre or single-family high density properly with a permitted density range of 4-7 Residential Units per Acre, which is more fully described in the Folsonr-Plan Area Specific Plan adopted on June 28,2071 and as amended by the City Council. ,'MMD Multi-Family Attached Property" means all Assessor's Parcels for which a building permit could be issued for purposes of constructing one or more attached Residential Units per Assessor's irarcel with a permitted density range of 12-20 Residential Units per Acre, which is more fully described in the Folsom Plan Area Specific Plan adopted on June 28,2011 and as amended by the City Council' *MHD Mutti-Family Attached Property" means all Assessor's Parcels for which a building permit could be issued for purposes of constructing one or more attached Residential Units per Assessor's irurcel with a permitted density range of greater than 20 Residential Units per Acre, which is more fully described in the Folsom Plan Area Specific Plan adopted on June 28,2011 and as amended by the City Council. MHD Multi-Family Attached Property shall also include an Assessor's Parcel or that portion of an Assessor's Parcel designated as a Mixed Use Residential Parcel. ,,Mixed (Ise Residential Parcel' means a mixed use Assessor's Parcel that is designated for residential land use. lf the mixed use Assessor's Parcel contains a combination of residential land use and non-residential land use, onlythatportion of an Assessor's Parcel designated forresidential land use shall be classified as a Mixed Use Risidential Parcel and the remaining non-residential land use of the Assessor's Parcel shall be classified as Non-Residential Property. ,,Non-Residential Properqf' means, for each Fiscal Year, all Taxable Properly for which a building permit could be issued for purposes of constructing non-residential buildings.
Maximum Special Tax. The Amended Rate and Method of Apportionment is used to allocate the amount of the SpecLl Tax required among the Taxable Properfy, based upon land use categories, subject to the Maximum Facilities Special Tax rate that may be levied against each land use category.
The following table shows the Effective Tax Rate Evaluation Minimum Facilities Special Tax rates and the Maximum Special Tax rates (for both the Facilities Special Tax and the Services Special Tax) within the lmprovemlnt Area for all anticipated allocable land use categories in Fiscal Year 2024'
25. The Effective Tax Rate Evaluation Minimum Facilities Special Tax rates are the minimum rates for the Effective Tax Rate Evaluation Maximum Facilities Special Tax. 28 Page 204
12/12/2023 Item No.2.
Table 3
CitY of Folsom
Communities Facilities District No.23 (Folsom Ranch)
Improvement Area No.2
Maximum Special Tax Rate Categories
Fiscal Ye;ar2024-25
Tax Categora
Residential
Floor Area
Effective
Tax Rate
Evaluation
Minimum
Facilities
Special
Tax Rate(l)
Effective Tax
Rate
Evaluation
Maximum
Facilities
Special Tax
Rate(r)
Maximum
Services
Special
Tax Rate(2)
Maximum
Annual
Special
Tax(3)
Developed Property ($ amounts per residential unit)
Detached Residential:
Single-Family Detached Property - SF/SFHD Zoning
Single-Family Detached Property - SF/SFHD Zoning
Single-Family Detached Property - SF/SFHD Zoning
Single-Family Detached Property - SF/SFHD Zoning
Single-Family Detached Property - SF/SFHD Zoning
Single-Family Detached Properly - SF/SFHD Zoning
Single-Family Detached Property - MLD Zoning
Single-Family Detached Property - MLD Zoning
Single-Family Detached Property - MLD Zoning
Single-Family Detached Propertry - MLD Zoning
Single-Family Detached Property - MLD Zoning
Single-Family Detached Property - MLD Zouing
Developed Property ($ amounts per acre)
MMD MultiFamily Attached Property
MHD Multi-Family Attached Property
Non-Residential Property
Small Lot Final Map ProPertY
($ amounts per residential lot)
Single-Family Detached Properly - SF/SFHD Zoning
Single-Family Detached Property - MLD Zoning
Permit Ready Multi-FamilyA{on-Residential
Property (S amounts Per acre)
Large Lot Property ($ amounts per acre)
Undeveloped Property ($ amounts per acre)
> 3,600
3,200 - 3,599
2,800 - 3,199
2,400 - 2,799
2,0a0 -2,399
< 2,000
> 3,600
3,240 - 3,599
2,900 - 3,199
2,400 - 2,799
2,000 - 2,399
< 2,000
$2,663
2,663
2,663
2,663
2,663
2,663
2,214
2,ZlA
2,210
2,210
2,210
2,210
s32,473
72,664
12,664
N/A
N/A
NIA
N/A
N/A
$2,663
2,663
2,663
2,663
2,663
2,663
2,663
2,663
2,663
2,663
2,455
2,210
$32,473
12,664
12,664
$2,663
2,210
$31,391
$3 1 ,391
$22s
22s
225
))<
225
225
116
116
116
116
116
1i6
$563
1,126
7,126
s225
116
$ 1,126
$1,126
s2,888
2,888
2,988
2,888
2,888
2,ggg
2,779
2,779
) 1'to
2,779
2,571
2,326
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
s12,664 $1,126 $ 13,790
$33,036
13,790
13,790
$2,888
2,326
$32,516
$32,516
(t) Increases by 2o/o eacb Fiscal Year.
(2) Increases by the annual June consumer price index change for the San Francisco-Oakland-San Jose are4 not to exceed 4Yo each Fiscal Year' Available to pay debt service on tbe Local Obligations and any Additional Local Obligations in the event of a shortfall in the Facilities Special Tax (as iefined in the Local Obligations Indenture). Estimated to increase by 2Yo for Fiscal Year 2024'25. (3) tie sum of the Effective Tax Rate Evaluation Maximum Facilities Special Tax and the Maximum Services Special Tax.
Source: NBS and the District.
29
12/12/2023 Item No.2.
The total Special Tax generated by the Improvement Area may change from time to time if there are amendments or modifications to the development plan. The District covenants in the Local Obligations Indenture to not approve any amendments, changes or modifications relating to development of thi property within the Impiove*".,i Ar"u that would reduce the amount of the Maximum Facilities SpeciaiTax less priority Administrative Expenses to ggual_ less than one hundred ten percent(110%) of the sum of the Annual bebt service on the Local obligations and any Additional Local obligations in any year until the maturity date for the Local Obligations and any Additional Local Obligations.
Tables 4 and 5 under ..-special Tax Calculation" collectively show the estimated maximum and projected actual amounts of Speciai Tax revenue for Fiscal Year 2024-25 using the development status of ihe properties as of ocrober ig, zozl (unless otherwise noted). Table 4 shows the Fiscal Year 2024-25 estimated Effective Tax Rate Evaluation Maximum Facilities Special Tax revenues, based on the development status of the properties as of october 19,2023 (unless otherwise noted). If changes are made to development plans flr the Improvement Area, the projected Effective Tax Rate Evaluation Maximum Facilities Splcial Tax revenues may decrease from the amounts shown in that table, but in no event will the Effective Tax Rate Evaluation Maximum Facilities Special Tax revenues decrease below the Effective Tax Rate Evaluation Minimum Facilities Revenue. Table 5 shows the estimated total Special Tax levy for Fiscal year 2024-25 based on the properties' development status as of october 19, zb23 lunless otherwise noted), including both the estimated Facilities special rax levy and the estimated Services Special Tax levy foi piscal year2024-25, and the percentage of the estimated Special Tax levy allocable to each of the projected property owners'
Included below are additional relevant defined terms used in the Amended Rate and Method of Apportionment.
,,Effective Tax Rate Evaluation Minimum Facilities Revenue" means, following the Effective Tax Rate Evaluation, the total minimum amount of CFD No. 23 IA2 Effective Tax Rate Evaluation Maximum Facilities Special Tax, as adjusted annually by the Facilities Special Tax Escalation Factor after the Fiscal year in which the Effective Tax Rate Evaluation occurs, less any Effective Tax Rate Evaluation Maximum Facilities Special Tax amounts prepaid and permanently satisfied pursuant to Section K of the Amended Rate and Method of Apportion*"nt. The Effective Tax Rate Evaluation Minimum Facilities Revenue, based on planned Development, is set forth in Attachment D of the Amended Rate and Method of Apportionment.
,,Effective Tax Rate Evaluation Maximum Facilities Special Tax" means the total maximum annual Fac,ilities Special Tax, as determined during the Effective Tax Rate Evaluation, which may be levied in any FiscaLYear on any Assessor's Parcel of Taxable Property' ,,Effective Tax Rate Evaluation" means an evaluation of the Total Effective Tax Rate of Residential property at the time of such evaluation. The Effective Tax Rate Evaluation will be based upon a prrpur.d price point Study to determine the Total Effective Tax Rate for Residential Property, based uponthe calculated Total Estimated Tax Burden'
,,Total ffiective Tax Rdle" means the percentage of the Total Estimated Tax Burden as compared to the estimated average sales price identified in the Price Point Study for each land use category of Residential ProPerlY.
,,Tolal Estimaled Tax Burden" means the total amount of overlapping properly taxes anticipated to be levied upon a Residential Unit, based upon the estimated average sales price identified in the Price point Study and existing properly tax rates for the current Fiscal Year. Existing property tax rates shall 30 Page 206
12/12/2023 Item No.2.
reflect the actual property tax rates levied upon Taxable Property in the Fiscal Year that the Effective Tax Rate Evaluation is comPleted.
Futurelssessor's parcel Changes * After an Efective Tax Rate Evaluation. The Effective Tax Rate Evaluation Maximum Facilities Special Tax shall be assigned to all future Assessor's Parcel(s) created from a subdivision, lot line adjuitment, or merger of one or more Assessor's Parcels so thatthe revised sum of the total Effective Tax Rate Evaluation Maximum Facilities Special Tax revenue is not less than the total Effective Tax Rate Evaluation Minimum Facilities Revenue amount described in the Amended Rate and Method of Apportionment'
Method of Apportionment - Facilities Special Tax.-.After an Effective Tax Rate Evaluation. The CFD No. 23 IAZ Ad'ministrator shall determine the Facilities Special Tax Requirement and levy the Facilities Special rax until the amount of Facilities Special raxes equals the Facilities Special rax Requiremeni. The Facilities Speeial Tax shall be levied each Fiscal Year as follows:
First: The Facilities Special Tax shall be levied Proportionately on all Developed Properly at a rate up to 100% of the Effective Tax Rate Evaluation Maximum Facilities Special Tax in order to satisfr the Facilities special Tax Requirement.
Second: If additional monies are needed to satisfo the Facilities Special Tax Requirement after the first step has been completed, ihe Facilities Special Tax shall be levied proportionat"ly on all Small Lot Final Map Properly at a rate up to 100% of the Effective Tax
-Rate
Evaluation Maximum Facilities Special Tax' The Facilities Special Tax shall be levied on Small Lot Final Map Property for the entire portion of the Facilities Special Tax Requirement, excluding only Pay As You Go Costs' Third: If additional monies are needed to satisfl' the Facilities Special Tax Requirement after the first two steps have been completed, the Facilities Special Tax shall be levied proportionately on all Permit Ready Multi-FamilyAlon-Residenlial Property at a rate up io 100% of *t" Effective Tax Rate Evaluation Maximum Facilities Special Tax' The Facilities Special Tax shatl be levied on Permit Ready Multi-FamilyAlon- Residential lroperfy for the entire portion of the Facilities Special Tax Requirement, excluding onlY PaY As You Go Costs'
Fourth: If additional monies are needed to satisfi the Facilities Special Tax Requirement after the first three steps have been completed, the Facilities Special Tax shall be levied proportionately on all Large Lot Properry at arate up to 100% of the Effective Tax Rate Evaluation Maximuni Facilities Special Tax. The Facilities Special Tax shall be levied on Large Lot Property for the entire portion of the Facilities Special Tax Requirement, excluding only Pay As You Go Costs'
F{th: If additional monies are needed to satisfu the Facilities Special Tax Requirement after the first four steps have been completed, the Facilities Special Tax shall be levied proportionately on all Undeveloped Property at arate up to 100% of the Effective Tax RatL Evaluation Maximum Facilities Special Tax. The Facilities Special Tax shall be levied on Undeveloped Properry for the entire portion of the Facilities Special Tax Requirement, excluding only Pay As You Go Costs'
3l Page 207
12/12/2023 Item No.2.
Method of Apportionment - Serviees Special Tax. The CFD No' 23 IAZ Administrator shall determine the Services Special Tax Requir"-"ni and levy the Services Special Tax until the amount of Services Special Taxes eiuals the Services Special Tax Requirement. The Services Special Tax shall be levied each Fiscal Year as follows:
First: The Services Special Tax shall be levied Proportionately on all Developed Properly at a rate up to lbg% of the Maximum Services Special Tax in order to satisfu the Services Special Tax Requirement'
Second: If additional monies are needed to satis! the Services Special Tax Requirement after the first step has been completed, the Services Special Tax shall be levied Proportionatiy on all Small Lot Final Map Property at a rate up to 100%o ofthe Maximum Serryices Special Tax in order to satisfu the Services Special Tax Requirement.
If additional monies are needed to satisff the Services Special Tax Requirement after the first two steps have been completed, the services Special Tax shall be levied Proportionately on all Permit Ready Multi-FamilyA',lon-Residential Propefi at a rate up io 100% of the Maximum Services Special Tax in order to satisfu the Services Special Tax Requirement.
If additional monies are needed to satisff the Services Special Tax Requirement after the first three steps have been completed, the Services Special Tax shall be levied Proportionately on all Large Lot Property at a rate up to_100% of the Maximum Services Special Tax in order to satisff the Services Special Tax Requirement' Third:
,,Special Tax" meansthe annual Facilities Special Tax and Services Special Tax to be levied in each Fiscal year on each Assessoros Parcel of Taxable Property to fund the Facilities Special Tax Requirement and the Services Special Tax Requirement'
,,Facilities Special Tax Requirement" means that amount of Special Tax revenue required in any Fiscal year for the Improv"..nt Area to: (i) Pay Facilities Adminishative Expenses in an amount designated by the City; (ii) pay annual debt service on all outstanding Bonds due in the Bond Year begi"nning in such risll'yeariliii; puy other periodic costs on outstanding Bonds, including but not liriited to-, credit enhancement and rebate payments on Outstanding Bonds; (iv) pay any amounts required to establish or replenish any reserve funds for all Outstanding Bonds in accordance with the Local Obligations Indeniure; (u) puy for reasonably anticipated delinquent Special Taxes based on the delinquency rate ioi 'Sp""iul Taxes levied in the previous Fiscal Year and known upcoming delinquencies; and (vi) pay for Pay As You Go Costs; less (vii) a credit for funds available to reduce the annual Facilities Splcial Tax levy as determined by the CFD No. 23l\z Administrator pursuant to the Local Obligations Indenture.
,,Authorized Services" means the landscape corridor, enhanced open space and street light maintenance, services, and expenses authorized to be financed by the Improvement Area' ,,services Special Tax" means the annual Special Tax to be levied in each Fiscal Year on each Assessor's parcel oiTaxable Proper{y to fund the Services Special Tax Requirement' Fourth:
32 Page 208
12/12/2023 Item No.2.
,,services Special Tax Requirement" means the amount of Services Special Tax revenue required in any Fiscal year for the Improvement Area to: (i) Pay Services Administrative Expenses in an amount aesignated by the City; (ii) pay Authorized Services expenses; (iii) pay any amounts required to esta6lish or replenish uny r"puii and contingency funds, capital improvement funds, or reserve funds related to the Authorized Services expenses; (iu; .ou"t any shortfalls that exist if; in any Fiscal Year, the levy of the Facilities Special Tax on each Assessor's Parcel of Taxable Propeffy is insufficientto pay the Facilities Special Tax Requirement in that Fiscal Year (Facilities Special Tax Requirement shortfalls shall not include pay As you Go Costs), and (v) pay for reasonably anticipated delinquent Services Special Taxes based on the delinquency rate for Services Special Taxes levied in the previous Fiscal y"ar; less (vi) a credit for funds available to reduce the annual Services Special Tax levy as determined by the CFD No. 23IAZ Administrator.
In accordance with the flow of Special Tax proceeds under the Local Obligations Indenture, in the event of a shortfall in the Facilities Special Tax to pay the Facilities Special Tax Requirement, the proceeds of the Services Special Tax wili be applied to help cover the Facilities Special Tax shortfall tefore being applied to fu;d Authorized Services. See "SECURITY AND SOURCES OF PAYMENT FOR THE gONIS-Local Obligations Flow of Funds'"
Residential property Limitation. Under no circumstances will the Facilities Special Tax levied-in any fiscal year against any Assessor's Parcel of Developed Property classified as Residential Property be increased as a consequence of delinquency or default by the owner or owners of any other parcel or parcels within the Improvement Area by more than 10% above the amount that would have been levied against such Assessois parcel in that fiscal year had there never been any such delinquencies or defaults. pursuant to the Amended Rate and Method of Apportionment, propefty is considered "Residential propefty,, once a building permit could be issued for ihe purposes of constructing one or more Residential Uniis, including either
"single family detached homes or multi-family attached propefties, such. as apartments, and prope4y is-considered "Developed Property" if a building permit for new construction was issued priorio jun" :o of the previous fiscal year. See "CERTAIN RISKS To BONDHOLDERS- Maximum Special Tax."
Special Tax Calculation
The following tables reflect the estimated Effective Tax Rate Evaluation Maximum Facilities Special Tax revenues"for Fiscal year 2024-25 (Table 4) and the estimated total Special Tax levy for Fiscal year 2024-25 (Table 5), each based on the development status of the properties as of October 19,2023 (unless otherwise noied). The following tables do not necessarily reflect the Special Tax that will be actually levied in any year.
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33 Page 209
12/12/2023 Item No.2.
Table 4
City of Folsom
Community Facitities District No. 23 (Folsom Ranch)
Improvement Area No.2
Estimated 2024-25 Effective Tax Rate Evaluation Maximum Facilities Revenue Development status as of october 19,2023 (unless otherwise noted) Fiscal Year 2024-25
Planned
Units
Appraised
Value(l)
Estimated 2024-25
Effective Tax Rate
Evaluation Maximum
Facilities llsvsnus(2x3)
Percentage of
Estimated 2024-25
Effective Tax Rate
Evaluation Maximum
Facilities Revenue(a)
29%
29o/"
56Yo
560h
Propertv
Developed Property:
Single-Family Detached Property - MLD Zoning
Developed ProPertY Total:
Small Lot Final MaP ProPertY:
Single'Family Detached Froperty - MLD Zoning
Small Lot Final MaP ProPertY Total:
83 s24,513,294 $ 193,942
83 524,513,294 $ 193,942
167 $ 36,869,706 $ 369,024
167 S 36,869,706 $ 369,024
Individual Hom eowners:
Single-Family Detached Property - MLD Zoning
Individual Homeowners Total:
Totals:
4t $ 23,270,000 $ 95,254 l4Yo
4l $ 23,270,000 $ 95,254 l4o/o
291 $ 84,653,000 $ 658,221 l00Vo
(l)Appraised value amounts provided by the Appraiser'
(2) Increases by 2o/o each Fiscal Year.
(3rThe 2024-25 Effective Tax Rate Evaluation Minimum Facilities Revenue amount is $?07,619. This includes 564,589 of Effective Tax Rate Evaluation Minimum Facilities Revenue associated with property that is welfare exempt and not subject to the Special Tax. The Effective Tax Rate Evaluation Minimum Facilities Revenue for the taxable 291 single family units is $643,030.
(a) Tohls may not sum due to rounding.
Source: NBS.
34 Page 210
12/12/2023 Item No.2.
Table 5
city of Folsom community Facitities District No.23 (Folsom Ranch) ImProvement Area No. 2
Estimated 2024'25 Special Tax Levy
Development Status as of october 19,2A23 (unless otherwise noted) Planned
Units
Estimated
2424-25
Facilities Special
Tax Levv(l)
Estimated
2024-25
Services Special
Tax Levy
$ 464
12.870
Estimated
2024-25
Total Special
Tax Levy
$ 9,548
216.s86
$ 194,018
109,268
$ 303,287
$ 100,008
Percent of
Estimated Total
Special Tax Levy(3)
2%
34%
360/"
3lYo
17o/o
480h
16%
Owner
Lennar
Lennar Homes(z)
Total for Lennar Homes(2):
Tri Pointe
Tri Pointe
Total for Tri Pointe:
Individual Homeowners
Totals:
Development Status
Developed PropertY
Small Lot Final Map ProPertY
Developed PropertY
Small Lot Final MaP ProPertY
Developed ProPertY
4 s 9,084
lll 203 716
115 s 212,800
$ 184,859
- 102.775
4t
$ 287,634
$ 95,254
$ 13,334 S 226,133
79 56
135
$ 9,160
6.493
$ 15,653
(l) Based on estimated debt service requirements for the Bonds plus Priority Administrative Expenses of $20,400' The capitatized interest on a portion of the Local Obligations and, in tum, a portion of the Bonds, through September 1,2024' (2) lncludes lots owned by the Landbank'
(3) Totals may not sum due to rounding.
Source: NBS.
29r $ 595,688
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S4 754
$ 33,740 s 629,427 lO0o/o
estimated levy amount does not reflect thc
35 Page 211
12/12/2023 Item No.2.
The Teeter Plan
In 1949, the State Legislature enacted an alternative method for the distribution of secured property taxes io local agenc-ies. This method, known as the Teeter Plan, is now set forth in Sections 4701-4117 of the California Revenue and Taxation Code. Upon adoption and implementation of the Teeter plan by a county board ofsupervisors, local agencies for which the county acts as "bank" and ceftain other pubiic ug"n"i". and taxing areas located in the county receive annually the full amount of their share of properry"taxes on the secrired roll, including delinquent property taxes which have yet to be collected. While a county benefits from the penalties associated with these delinquent taxes when they are paid, the Teeter plan provides participating local agencies with stable cash flow and the elimination of collection risk.
To implement a Teeter Plan, the board of supervisors of a county generally must elect to do so by July 15 of the fiscal year in which it is to apply. The sacramento County Board of Supervisors has adopted the Teeter plan. once adopted, u
"ounty'r
Teeter Plan will remain in effect in perpetuity unless
the board of supervisors orders its iiscontinuance or unless prior to the commencement of a fiscal year a petition for discontinuance is received and joined in by resolutions of the governing bodies of not less than two-thirds of the participating districts in the county. An electing county may, however, opt to discontinue the Teeter plan with respect to any levying agency in the county if the board of supervisors, by action taken not later than July 15 of a fiscal year, elects to discontinue the procedure with respect to such levying agency and the ratgof secured tax delinquencies in that agency in any year exceeds 370 9-f the total of all taxes and assessments levied on the secured roll by that agency. See "CERTAIN RISKS TO BONDHOLDERS-Teeter Plan Termination'"
Upon making a Teeter Plan election, a county must initially provide a participating local age[cY with 95% of the estimated amount of the then accumulated tax delinquencies (excluding penalties) for that agency. In the case of the initial year distribution of special taxes and assessments (if a county has elected to include assessments), 100% of the special tax delinquencies (excluding penalties) are to. be apportioned to the participating local agency *hi.tt levied the special tax. After the initial distribution, eactr parti"ipating local alen"f receives annually 100% of the secured property tax levies to which it is otherwise entitleJ, regardless of whether the county has actually collected the levies.
If any tax or assessment which was distributed to a Teeter Plan participant is subsequently changed by correction, cancellation or refund, a pro rata adjustment for the amount of the change is made on th-e rectrds of the i."urur", and auditor of the counfy. Such adjustment for a decrease in the tax or assessment is treated by the County as an interest-free offset against future advances oftax levies under the Teeter Plan.
The Special Tax for the District will be submitted to the County for direct levy' By submitting the Special Tax to the County, the District has agreed to allow the District to participate in the County's Teeter plan. The County annually determines whether to include a particular direct levy and may make that determination on u iirt.i"t by district basis or a parcel by parcel basis. In addition, the County may not decide to include a particulariarcel or district tha-t had been included in its Teeter Plan in the previous year. The District can provide nb urrr.un.e that the County will continue to include the District or any irprou".. nt areatherein, including the Improvement Area, in the Teeter Plan' To the extent that the County's Teeter Plan continues in existence and is carried out as adopted, the County,s Teeter plan may help protect the owners of the Bonds from the risk of delinquencies in Special Taxes.
36
12/12/2023 Item No.2.
THE AUTHORITY
The Authority was created by a Joint Exercise of Powers Agreement, effective April 20' 2015 (the ,,JpA Agreemeni,), between the city and the city of Folsom South of 50 Parking Authority. The^ JpA Agreement was entered into pursuant to the Joint Exercise of Powers Act, Chapter 5 of Division 7 of Title I of the Government Code of the State. The Authority was created for the purpose of facilitating financing of public improvement facilities within the city south of uS Route 50.
THE CITY
The Improvement Area is located in the City, which is located in the easterly section of the^ Sacramento metropolitan area approximately 22 miles east of the central business district of the City of Sacramento.
Certain economic and demographic information with respect to the City is contained in AppENDIX B. This information is presented solely as background information. The Local Obligations are not general obligations of the City but, rather, aie special tax obligations of the District secured solely by the special Taxes to be paid uy trre owners of pioperty in the Improvement Area and funds held pursuant to the Local Obligations Indenture'
THE IMPROVEMENT AREA
General Description and Location
The District is a community facilities district organized by the City Co-uncil as the legislative body of the District under the Meilo-Roos Act for the purpose of providing for the acquisition and construction of certain public improvements and the financing of certain services to serve propefy within the District. The city established the District on May 26,2020,and designated six separate improvement areas therein, including the Improvement Area. on May 26,202a, elections were held within the District for each improvemen i ur"u therein at which the eligibie voters in each improvement area approved the levy of special taxes in accordance with the respective Rate and.Method of Apportionment of Special Tax for such improvemen t area. In addition, the eligible voters in the Improvement Area authorized the issuance of bonds in an amount not to exceed $36,000'000 for the Improvement Area' In December 2021' a seventh improvementareawas designated within the District, and in March 2023 change proceedings for the lmprovement Area were held, whereby the eligible voters in the lmprovement Area approved the Amended Rate and Method of Appo(ionment'
The District expeots that such bonds and any bonds issued for the other improvement areas within the District from time io time will be issued to finance the authorized public facilities for the benefit of the District. with respect to the Improvement Area, such bonds will be issued only in accordance with the provisions of the Local obligaiions Indenture. The total bonded indebtedness authorized in the Improvement Area will be limitedby the requirements-of{he Local obligations Indenture, including the following.rquir.*"nt, relating to any Additional Local obligations: a 3:1 overlapping value to lien ratio on all land projected to be subject to the levy of the Special Tax and 1 10%o annual coverage from the Maximum Facilities Special tai for Taxable Propertry classified as Developed Property (as defined in the Local obligations lnd'enture), plus the Effective- Tai Rate Evaluation Minimum Facilities Revenue for Taxable properfy not classifiei as Developed Property__(as defined in the Local Obligations Indenture) t"., friority'Administrative Expenses. See "SSCiJRITY AND SOURCES OF PAYMENT FOR THE BONDS- Terms of the Local obligations-Additional Local obligations;' 37 Page 213
12/12/2023 Item No.2.
The lmprovement Area is located in the southern portion of the City, east of East Bidwell Street, north of Mangini parkway and south of U.S. Highway 50 and consists of over 49 total gross acres, of which approxlmately 31 acres are subject to the Special Tax. The maps appearing on the inside cover pages show the general location of the District and the Improvement Area' presently, the Improvement Area includes properties in varying stages of development, including finished lots, homes under construction, and completed homes. Collectively, these properties are planned to include 291 single family homes that are in the process of being constructed and sold by the Homebuilders. The Improvement Area also includes approximately 5.8 acres that are expected to be developed into a 152-unit affordable housing site that will receive a welfare exemption and be exempt from the Special Tax. Construction of the public improvements and backbone infrastructure in the Improvemept A..u is nearly complete, as more particularly described "PROPOSED PROPERTY DEVELOpMENT-Development plans of Finance." The only remaining infrastructure required in connection with the construction and sale of all expected 291 homes within the Improvement Area is the completion of a traffic signal at the intersection of Mangini Parkway and Savannah Parkway' which is required to be fully constiucted prior to the first home occupancy in Village 4 within the Improvement Area. The Original Developer has commenced construction on this traffic signal and expects to have it fully constructed and operational by March2024.
The Improvement Area is located southwest of a residential community under current development known as Russell Ranch that is expected to include over 1,000 single family dwellings at full build-out, is immediately east of Mangini Ranch, a partially developed residential community that is also expected to includ" ou". 1,000 single family dwelling units at full build-out, and is west of an additional residential community known as White Rock Springs that is also under development and expected to include over 420 single family dwellings'
Property Values
An appraisal of the T61<able Property within the Improvement Area has been prepared by the Appraiser in connection with the issuance of ihe Bonds. The appraisal estimaGs the properfy $ry -T-91 otiober lg,z0Z3 (the,.Appraisal"). The Appraisal is attached to this official Statement as APPENDIX G.
As of the date of inspection, the Appraiser notes that development of the prope(y is underway' The subject property was valued based on the hypothetical conditions that proceeds from the Bonds will be used to reimburse infrastructure improvements completed and/or fees. The Appraisal is based on property values at the time of inspection'
Subject to the assumptions, hypothetical condition and limiting conditions, the Appraiser estimated that the value of the 'iaxable rroperry within the Improvement Area, as of October 19,2023, in aggregate, is $g4,653,000. See .,pRoposgo pRopERTY DEVELOPMENT-Development Plan and Status of Development" below and APPENDIX G - *APPRAISAL'" Value-to-Lien AnalYsis
The following table sets forth the ratios of the appraised property values of the Taxable Properly to the total liens on th-e property in the Improvement Area based on the development status of the property as of October 19,Za2i. ihe-following table shows the value-to-lien ratios for the Improvement Area based on the development status of tne Taxable Property as of October 19, 2023, for (i) Developed parcels and Small Lot finat Map parcels, (ii) the four villages within the Improvement Area (Village l, Village 2, Village 3, and Village 4;, and (iii) the owners of the Taxable Properly (which in some cases reflects the expected futur" owner). See "PROPOSED PROPERTY DEVELOPMENT-Development 38 Page 214
12/12/2023 Item No.2.
Entitlements.,, The following table also shows the estimated Facilities Special Tax levy for Fiscal Year 2024-25 based on the propJrties' current map status as Developed Property and Small Lot Final Map property. The value-to-lien ratio for the Improvement Area based solely on the Local Obligations and the app.ais"a value of the land within the Improvement Area is 8.3*:1.0. The overall value to overlapping dett ratio, including certain overlapping general obligation tax and assessment debt and CFD 17 special o* d.bt, is7.2':L0"1tr"..-Overlaiping-Debt"). Any bonds secured by special assessments or special taxes issued from time to time rnuy'h"u" the effect of reducing the value to lien ratio on property within the Improvement Area.
Table 6
City of Folsom Community Facilities District No. 23 (Folsom Ranch) ImProvement Area No.2
Appraised Value-to-Lien Ratios
Development Status as of October 1912023
Planned
Estimated
2024-25
Maximum
Facilities
Units Revenue(r) Tax Levy(2)
ShareofLocal OverlaPPing
Obligationsta)' Debt
Estimated
202425
Facilities
Special Appraised
Value(3)
Local
Obligations
Value to
tri.n(s)'
Overall
Value to
Lien(s)'
By Development Status
Developed
Small Lot Final Map
Total
By Village and Developer:
Villagel-TriPointe
Village2-TriPointe
Village3-TriPointe
Village4-LennarHomes
Total
Bv Ownershio Groun:
Gffi--
Tri Pointe
Individual Homeowners
Total
$289, I 96
369,024
$289,196 s47,783,294
306,491 36,869,706
s4,9'.76,203
5,273,797
$ 684,850 9.6 8.4124
167 852,644 7.0 .. 6.0
291 $658,221 $595,688 $84rs3J00 $10,250,000 $1,537n491 8.3 7.2 100
41 35
115
$22s,628
96,969
81,260
254,364
$21 1,399 $31,680,000
95,097 18,012,000
76,393 8,902,000
212,800 26,059,000
$ 512,387 8.7
236,681 I1.0
168,719 6.8
7.6 9.6
6.0 $3,637,538
1,636,329
r,314,489
3,661,645 6t9,704 7.1 6.1
291 $658,221 $595,688 $84,653,000 $10n250,000 $1,537n491 8.3 7.2 ll5
135
4l
$2s4,364
308,603
95,254
$658,221
$3,661,645
4,949,321
t,639,034
$ 619,704
116,994
200,792
7.1 7.1
14.2 6.r
6.2 12.6
$212,800 $26,059,000
287,634 35,324,000
95,254 23,270,000
$595,688 $84,653,000 $10,250,000 $t,5370491 8.3 17291
' Preliminary, subject to change.
(t) Increases Ly 2% each Fiscil year. The2024-25 Effective Tax Rate Evaluation Minimum Facilities Revenue amount is $707,61g. This includes $64,5gg of Effective Tax Rate Evaluation Minimum Facilities Revenue associated with Property that is weifare exempt and not subject to.the Special Tax. The Effective Tax Rate Evaluation Minimum Facilities Revenue for the taxable 291 single family units is $643'030.
(2) Based on estimated debi service requirements for the Bonds plus Priority Administrative Expenses of $20,400. The e stimaled levy amount does not reflect the capitalized interest on a portion of the Local Obligations and, in tum, a portion of the Bonds, through September 1, 2024.
{r) Appriir"d value amounts provided by the Appraiser. See "-Property Values'" (a) Ailocated based on the projected Fiscal Year 2024-25 Facilities Special Tax levy. (j) Value io lien ratio is foi ttre Local Obligations. Local Obligations are issued in the same principal amount of the Bonds. (6) Reflects lots lor which Lennar Homes has an option to purchase' Source: Except as otherwise noled, NBS'
*
Preliminary, subject to change.
39 Page 215
12/12/2023 Item No.2.
Estimated Tax Burden on Single Family Home'
The following table sets forth the estimated total tax burden on multi-family low density- residential property 0r4ln) within the Improvement Area, presented as an estimate of the majority of proposed homes to be
"onstructed
in the Improvement Area, based on estimated tax rates for Fiscal Year 2023-24.
Table 7
City of Folsom
Community Facilities District No.23 (Folsom Ranch)
ImProvement Area No.2
Single Family Residential Property Sample Property Tax Bill Estimated Charges for Fiscal Year 2023'24
MLD
Assessed Value(l)
Less: Homeowner ExemPtion
Net Assessed Value
Ad Valorem(2)
General Purpose Ad Valorem Tax (Proposition l3)
Los Rios College Generai Obligation
Folsom-Cordova Unified School District Improvement Dist' 2 Folsom-Cordova Unified School District Improvement Dist' 3 Total Ad Valorem Taxes
SpeciaVDirect Assessments and Taxes
Folsorn community Facilities District No. 23 (Folsom Ranch) - Imp- Area No. 2(3) Folsorn conrmunity Facilities District No, 23 (Folsom Ranch) - Imp'-Area No. 2 (a) Folsom Community Facilities District No. 17 (Willow Hill Pipeline){s) Folsom Community Facilities District No. l8 (Folsom PIan Area)(6) Sacramento Area Flood Control(?)
Total Special/Direct Assessments and Taxes
Total Estimated Annual Property Taxes
Effective Tax Rate(8)
s 550,000
,000)
Tax Rate
L0000%
0.0192%
a.0206%
0.2063%
$ 543,000
$ 5,430.00
104.26
r 11.86
t,120.21
l.246lYo S 6,766-32
$ 2,406.60
1t3.67
48.67 794.t1
1.50 $ 3,364.55
$10,130.87
1.8420Vo
(1t- Estimated based upon appraised value amount provided by the Appraiser, for a sample residential unit' (2) Based upon Fy 2til3-z4'sacramento County ad valorem propeffy tax rates for TRA 04-035. (3) Fiscal year Z0Z3-24 Effective Tax Rate Evaluation Maximum Annual Facilities Special Tax for a multi-family low density unit with residential floor area between 2,000 and 2,399 square feet. The Effective Tax Rate Evaluation Maximum Annual Facilitiss Special Tax escalates anotallY at 2Yo.
{4) Fiscal year 2023-24 Maximum Annual Services Special Tax for a multi-family low density unit with residential floor area between 2,000 and 2,399 square feet. The Maximum Annuai Services Special Tax escalates annually based upon the annual June cPI change' for the San Francisco-Oakland-San Jose are, not to exceed 4%o' (5) Fiscal year 2023-24 Maximum Annual Special Tax. The Maximum Annual Special Tax escalates ann]ually at20/o. {6) Fiscal year 2023-Z4Maximum Annual Special Tax. The Maximum Annual Special Tax excludes the Willow Hill Pipeline Special Tax, which is currently reflected under Folsom community Facilities District No. 17 (willow Hill Pipeline). The Area-wide Special rax escalates annually at 2vo andthe Maintenance Special rax and rDM Services Special Tax escalate annualiy based upon the annual June CPI Change, for the San Francisco-Oakland-San Jose are' not to exceed 47o' (?) Approximate assessmeot for residential lots. Based upon lot size' (s) Estimate of annual properly taxes does not include uny n.* special_financing district fees, assessments, andlor special taxes imposed by the state, county, or local agencies that are yet to Le established or uny frture annexation into,existing special financing districts required by conditions for approval of development or any other imposed requirement. Information contained within is based upon reiords and official documenti provided by various govemmental agencies and third-parly sources, 40 Page 216
12/12/2023 Item No.2.
Overlapping Debt
Set forth below is an overlapping debt table showing the existing authorized indebtedness payable with respect to property within the'Impiovement Area. Additional indebtedness could be authorized by other pullic agencies it uny time. Funher, a portion of the overlapping debt shown in the table below is based on the assessed value of the underlying property, which can be expected to increase over time as development occurs and the assessed value grows. Thiq table has been prepared by California Municipal Statistics, Inc. as of Novembe r 1,2023,and is included for general information purposes only' other than- with respect to cFD 17, the table below allocates overlapping debt based on the assessed value of properfy and not on taxes paid. The District and the Authority have not reviewed the data for completeness or accuracy andmake no representations in connection therewith.
The City authorized the issuance of up to $8,000,000_of bonds for CFD 17, of which $6,675,000 has been issued. Further, the City authorized the issuance of up to $200,000,000 in bonds for CFD 18' The timing of issuance of bonds for CFD 18 is dependent upon market conditions and development within the Folsom plan Area. The City currently anticipates that an initial series of CFD 18 bonds will be issued to finance the phase 24 Water Facilities (as defined herein), although the timing and amount of any CFD 1g bond issuance is not yet known. A portion of any bonds issued for CFD 18 will constitute ovlrlapping debt. other community facilities districts formed in the Folsom Ranch area will overlap CFD ili aricl potentially CFD 17 buf are not expected to overlap the Improvement Area. The lien of the Special Taxes for the i*p.oo"*"nt Area is on parity with the lien of the special taxes for CFD 17 and cFD 18.
Direct assessments and levies payable with respect to property within the Improvement Area could potentially include up to $750
-*iuion of general obligation bonds fo1 the School Facilities Improvement District No.3 of the Folsom Cordova Unified School District ("SFID 3"), approved by voters on March zj,20a:,. 5FID 3 encompasses approximately 52.6 square miles of land including the District and additional territory outside of ihe District, including territory in the city of Rancho cordova and unincorporated Sacramento County. As of November 73, 2023, general obligation bonds jn !h:
aggregate principal amount of approximately $195.6 million.had been issued and approximately $182'2 million were outstanding for Sfffi :. At the-time of the election approving the SFID 3 general obligation bonds, the ballot ,u*riury indicated the average tax rate per $100,000 assessed valuation would be $73.61 . For 2023-z4,the actual SFID 3 tax rate per $100,000 was approximately $206'30' The following table sets forth the ad valorem tax rates for SFID 3 over the past five years. The future tax levy per property owner in SFID 3 may vary depending on future bond issuance andlor changes in assessed value.
Table 8
City of Folsom
Community Facilities District No.23 (Folsom Ranch)
ImProvement Area No. 2
SFID 3 Ad Valorem Rates
Year Rate(t)
2023-24
2022-23
2021-22
2020-21
2A19-20
2018-19
201'l-18
0.2063%
0.2758%
0.388r%
0.2065%
0.1366%
a.r45l%
0.1878%
(r) 1p,4 94-935
Source: NBS.
41 Page 217
12/12/2023 Item No.2.
Table 9
CitY of Folsom
Community Facilities District No.23 (Folsom Ranch)
ImProvement Area No. 2
OverlaPPing Debt
?023-24 Local SeoursdA$B$secl-y3luatlgg: $35,094,315 (Land and Improvements) DITTECI'AND OVERLAPPING TAX AW:
Los Rios Community College District
Folsom-Cordova Unified School District School Facilities Improvement District No. 2 Folsom-cordova unified School District School Facilities Improvement District No. 3 City of Folsom Community Facilities District No. l7
City of Folsom Community Facilities District No.23' I'A' 2
TOTAL DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT
OVERLAPPING GENERAL EUNL DEBI:
Sacramento County General Fund Obligations
Sacramento County Pension Obligation Bonds
Sacramento County Board of Education Certificates of Participation City of Folsom General Fund Obligations
rbrer- cRoss ovERLAPPING GENERAL FLND DEBT
Less: Sacramento County supported obligations
TOTAL NET OVERLAPP'NG GENSRAL FIJND DEBT
9zo Anpliesbls
0.013%
0.185
0.758
l.s l4
100.
0.0t6%
0.016
0.016
0.1 80
Debt I l/l/23
$ s2,756
18,688
1,381,620
84,421
0(r)
$1,537,491
$ 16,784
68,628
341
l.l 18
$ 86,871
r.752
$ 85,1 19
GROSS COMBINED TOTAL DEBT
NET COMBINED TOTAL DEBT
$1,624,362Q)
$l,622,610
(r) Excludes Mello-Roos Bonds to be sold.
(z) Excludss tax and revenue anticipation notes, enterprise revenue, mortgage revsnue and non-bonded capital lease obligations' Ratios to ?023-24 l-ocal Sccurcd Asscsssd Valuntion:
Direct Debt ($0)..'....'........ """""""""""' 0'00%
Total Direct and-Overlapping Tax and Assessment Debt"""""""' """""4'38o/o GROSS Combined Total Debt...'.."..." """4'63%
Net Combined Total Debt,.... """"""""""'4'620/o
Source: Califomia Municipal Statistics, lnc.
Historical Special Tax LevY
The Special Tax (including both the Facilities SpecialTax and the Services Special Tax) was first levied in the Improvement Area for Fiscal Year2022-23 in the total amount of $11,911.44' The Fiscal year 2022-2-3 Special Tax was levied upon six parcels. As of November 1, 2023, no parcels in the Improvement ArLa were currently delinquent. Foi Fiscal Year 2023-24, the Special Tax (including both the Facilities Special Tax and the Services Special Tax) will be levied on all 291 lots comprising the Taxable Property in the aggregate amount of $202,515'50'
PROPOSED PROPERTY DEVELOPMENT
Development Entitlements
Speci{ic plan. On June 28,2011, the City Council approved the Specific Plan for the deuelopililiii t02t0 residential homes along with commercial, industrial/office park, open space, public schools, parks, infrastructure and other land uses on the 3,573.4 acre site of the Folsom Plan Area. 42 Page 218
12/12/2023 Item No.2.
At build out, projected to occur over a 2}-year time frame, the_Folsom Plan Area is projected to have a population of'approxim ately 24,362 persons. Along with the 1,455.6 acres of residential development ihe adopted sp""ln" plan called for 511.3 acres of "otn."."ial, office/industrial and mixed-use,309'5
acres of public uno quasi-public use (public and private schools, parks and infrastructure);173-6 acres of major roads and 1,063 acres ofopen space'
Various property owners have submitted and received approvals of Specific Plan Amendments (,,SpA,s,,) since ih" ZOf i City Council adoption. These approved SPA's have resulted in various land use "hung.,
compared to the Specific Plan thai was originally approved in 2011, including an increasein the total entitled unit count to i l,+61 dwelling units anJ reduction to approximately 2.8 million square feet of commercial, office/industrial and mixed use'
The Specific plan is designed to guide and regulate the development for the area within the City south of US Route 50.
Fi"WI.Mapping. To date, final maps have been- approved and recorded for all Taxable Propeffy within the lmprovemlnt Area. bevelopment within the Improvement Area is entitled for 291 single family homes. tnesign ,euiew approval, which provides for City review of the home plans, architecture and conformance to Jertain deveiopment standards, has been completed for all 291 units'] Based on the final subdivision maps and zoning entitlements, the property within the Improvement Area is entitled to be developid into 291.-multi-family low density units, which the Homebuilders expect to construct as detached single-family homes. Multi-family low density zoned properties, including the Taxable Property in the Improvement Area, can include 7 to 12 dwelling units per gross acre.
Sile Access. External access to the project site will.be provided via Savannah Parkway to the east una vuffiTirt*ay to the north. pedestiian circulation is provided by a combination of street- separated- sidewalks," open space trails, park trails and pathway connections' Proposed on-site improvements incluie: underground utilitiei, drainage improvements, retaining walls, driveways' on- strlet parking, curbs/gutters, s"idewalks, pathways, trails, fencing, site lighting, site landscaping, and park enhancements.
Design Guidefilrys. The Folsom Ranch Central District Design Guidelines (of which the I.prou"ilffiA* is a part) were approved by the city concurrent with the Tentative Map approvals on June23,2015. The design guidelines provide for the orderly development of the proposed single family residential subdivision.
- Tf,e primary purpose of these disign guidelines is to articulate the general architectural and design expfctations- foi the proposed residential neighborhood, the landscapes, hardscapes, op"n rpu""i fencing, entry features and site lighting. The goal ofthe design guidelines is to establish a regulatory iru*.*oi[ for the design of individual homes on the residential lots' The final design details-of th"'hor". are subject to review and approval by the city's Planning commission as part of a future Design Review application.
Develonment Cenditions/Bttilclina. Pqrnlit Lintitgttions. Certain provisions of the PFFP for the FolsomPlanArea,visionmapconditions,p1acelimitson.the
number of building p.r i" ,rr" can be iss'ued before certain facilities and/or backbone infrastructure is in place. These prouirionr/conditions could, but are not expected to, affect build-out of the Improvement Area.
For example, tentative map conditions require a fire station to be operational prior to the occupancy of the l,5dOth home in the Folsom Plan ArLa. See "FoLSoM PLAN AREA-Public Facilities 43 Page 219
12/12/2023 Item No.2.
Financing plan-public Facilities - the Folsom Plan Area" for details on the City's plans for construction of the fire station. The City is responsible for building and operating this fire station and would expect to waive or modi! this condition as it deems necessary to balance development within the Folsom Plan Area and the increasing fire service needs of the Folsom Plan Area as development progresses' rne -c]! commenced construction on the first fire station servicing the Folsom Plan Area during September 2022'^ The city currently exfects construction of this first fire .tation to be completed during the third quarter of 2024.
phase 2 Water lnfrastructurg. The City estimates the Phase 1 Water Facilities (as defined herein) have a sustained *uri-i*Juy aorand of up to 2 million gallons. A study prepared by Peterson Brustad, Inc. in April2019 thenestimated that water usage would equal or exceed a-.sustained maximum day demand of up to 2 million gallons when approximately 2,800 to 3,300 dwelling units within the Folsom plan Area had been occui-ied. Certain waier backbone facilities are required to be constructed to provide expanded water transmission conveyance capabilities_to deliver water from the water treatment plant to tG Folro* plan Area (collectively, the "Phase 2._Water Facilities"). These water backbone facilities include a water pipeline (the "Phase 2A Water Facilities") along with water tanks and a booster pump station (the ..Remaining phase 2 Water Facilities") that will also be needed following the "ornpt"tion
of the phase 24 Water Facilities to allow for full buildout of the Folsom Plan Area.
See ..pROposED pROpERTy DEVELOPMENT - Development Entitlements - water supply Infrastructure,, below for a more detailed discussion of the Phase 2 Water Facilities and their expected timing and cost.
Developers within the Folsom Plan Area have requested that the Phase 2 Water Facilities be funded in whole or in partthrough bonds issued for CFD 18 and certain pay-go proceeds from CFD 17 and CFD lg special taxes. See "FoLSoM PLAN AREA-Folsom Plan Area Development" for a discussion of certain development and investment that has already occurred within the Folsom Plan Area and additional future development and investment that is anticipated as the Folsom Plan Area continues to be developed. The timing tf irruun"" of bonds for CFD 18 is dependent upon market conditions and development within the F:olsom plan Area and there can be no assurance that bond proceeds-will be available when needed to construct the Phase 2 Water Facilities or to reimburse the developers for costs expended therefor.
Based on the current stage of planning for the Phase 2A Water Facilities, the Homebuilders and the District do not believe that these conditions will materially impede developrnent of the lmprovement Area as currently planned. However, multiple other development projects are underway in the Folsom plan Area, and ilthere were an unforeseen and significant delay in construction in the Improvement frga it is possible that other development within the Folsom Plan Area will overtake development of the Improvement Area, resulting in ttre need for completion of the Phase 2A Water Facilities before all development could be completed within the Improvement Area.
On May 22, 2014, the U'S. ArmY Corps of Engineers (the
Lg'esments and Sqgtlan |06 Compliqnce'
'USRCOE") issued a Record of Decision ("ROD") for the Folsom South of U S. Highway 50 Specific Plan Project City of Folsom Backbone Infrastructure. This wetland permit covered the wetland permitting requirements for the entire backbone infrastructure necessary to serye the Folsom Plan Area' To the extent backbone infrastructure was required within a properly owner's land, the backbone wetland permit authorized the fitling of waters of the U S. necessary for such construction. Each landowner thereafter is required to obtain their own wetland permit for the fill ofjurisdictional wetlands not included in the footprint of the backbone wetland Permit. As di
required environmental PermitsArea has received all
44 scussed in greater detail below, the Folsom Plan