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JOINT COMMUNITY FACILITIES AGREEMENT
by and among
CITY OF FONTANA
CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 109
(NARRA HILLS)
and
WEST VALLEY WATER DISTRICT
Dated as of June 1, 2022
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JOINT COMMUNITY FACILITIES AGREEMENT
THIS JOINT COMMUNITY FACILITIES AGREEMENT (this “Facilities Agreement”), dated as of June 1, 2022, is by and among the CITY OF FONTANA, a general law city organized and existing under the laws of the State of California (the “City”), CITY OF FONTANA COMMUNITY FACILITIES DISTRICT NO. 109 (NARRA HILLS), a community facilities district organized and existing under the laws of the State of California (the “Community Facilities District”) , and the WEST VALLEY WATER DISTRICT , a municipal water district organized and existing under the laws of the State of California (the “Water District”).
W I T N E S S E T H:
WHEREAS, the City Council of the Ci ty (the “City Council”) has, pursuant to the provisions of the Mello -Roos Community Facilities Act of 1982 (the “Act”), established the Community Facilities District;
WHEREAS, pursuant to the Act, the proceedings of the City Council and an election held within the Community Facilities District, the Community Facilities District is authorized to issue special tax bonds (the “Bonds”) secured by special taxes (the “Special Taxes”) levied within the Community Facilities District to finance certain public facilities (the “Facilities”); WHEREAS, the Facilities proposed to be financed by the Community Facilities District include certain Facilities to be owned and operated by the City (the “City Facilities”) , certain Facilities to be owned and operated by the Water District (the “Water District Facilities”) and certain Facilities to be owned and operated by certain other public agencies (the “Other Agency Facilities”);
WHEREAS, Section 53316.2 of the Act provides that a community facilities district may finance facilities to be owned or operated by a public agency other than the agency that created the community facilities district only pursuant to a joint community facilities a greement or a joint exercise of powers agreement adopted pursuant to said Section; WHEREAS, Section 53316.2 of the Act further provides that at any time prior to the adoption of the resolution of formation creating a community facilities district or a res olution of change to alter a district, or a resolution or resolutions authorizing issuance of bonds pursuant to Section 53356 of the Act, the legislative bodies of two or more local agencies may enter into a joint community facilities agreement pursuant to said Section and Sections 53316.4 and 53316.6 of the Act to exercise any power authorized by the Act with respect to the community facilities district being created if the legislative body of each entity adopts a resolution declaring that such a joint agreement would be beneficial to the residents of that entity; WHEREAS, no resolution authorizing the issuance of any Bonds has been adopted; WHEREAS, the City Council and the Board of Directors of the Water District have each adopted a resolution declaring that such a joint agreement would be beneficial to the residents of that entity;
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WHEREAS, LS-FONTANA LLC (the “Developer”) is developing the property within the boundaries of the Community Facilities District;
WHEREAS, development of such property will require the acquisition, construction and installation of certain Water District Facilities;
WHEREAS, in order to provide for the acquisition, construction and installation of such Water District Facilities, the Water District and the Developer are entering into an Acquisition and Funding Agreement (the “Acquisition Agreement”), pursuant to which the Developer will acquire, construct and install, or cause to be acquired, constructed and installed, certain of the Water District Facilities and, upon satisfaction of the conditions specified therein, the Water District will acquire and take title to such Water District Facilities and that the Developer will be paid the purchase price thereof from proceeds of Special Taxes or Bonds ( collectively, “District Proceeds”) made available for such purpose by the Community Facilities District; and WHEREAS, the City, the Community Facilities District and the Water District desire to enter into this Facilities Agreement in accordance with Sections 53316.2, 53316.4 and 53316.6 of the Act in order to provide for the financing of the Water District Facilities with District Proceeds; NOW, THEREFORE, for and in consideration of the mutual promises and covenants herein contained, the parties hereto agree as follows:
Section 1. Issuance of Bonds. (a) It is anticipated that the Community Facilities District will issue Bonds to finance the acquisition, construction and installation of the City Facilities, the Water District Facilities and the Other Agency Facilities . The City Council , acting as the legislative body of the Community Facilities District, shall, in its sole discr etion, determine whether, when, under what conditions and to what extent Bonds shall be issued to finance the acquisition, construction and installation of the City Facilities, the Water District Facilities or the Other Agency Facilities, or any combination thereof. In no event shall the Water District have any right to compel the Community Facilities District to issue Bonds to finance the acquisition, construction and installation of Water District Facilities or to disburse Bond proceeds to pay the costs of the acquisition, construction and installation of Water District Facilities. (b) It is anticipated that the Community Facilities Distric t may make proceeds of Special Taxes available to finance the acquisition, construction and installation of the City Facilities, the Water District Facilities and the Other Agency Facilities. The City Council, acting as the legislative body of the Community Facilities District, shall, in its sole discretion, determine whether, when, under what conditions and to what extent any such Special Tax proceeds shall be made available to finance the acquisition, construction and installation of the City Facilities, the Water District Facilities or the Other Agency Facilities, or any combination thereof. In no event shall the Water District have any right to compel the Community Facilities District to make proceeds of Special Taxes available to finance the acquisition, construction and installation of Water District Facilities or to disburse such Special Tax proceeds to pay the costs of the acquisition, construction and installation of Water District Facilities.
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Section 2. Water District Facilities. (a) The Water District Facilities, including any real or tangible property that is to be purchased, constructed, expanded or rehabilitated, are described in Exhibit A attached hereto.
(b) It is anticipated that the Community Facilities District will make District Proceeds available to finance the acquisition, construction and installatio n of the Water District Facilities.
If the Community Facilities District makes District Proceeds available for such purpose , the Community Facilities District shall notify the Water District of the amount of such District Proceeds available for such purpos e within 15 days of such District Proceeds becoming so available. The Community Facilities District makes no representation that, if District Proceeds are made available to finance the acquisition, construction and installation of the Water District Facilities, such District Proceeds will be sufficient to finance the acquisition, construction and installation of all of the Water District Facilities, and neither the City nor the Community Facilities District shall have any liability to the Water District if such District Proceeds are insufficient for such purpose. If the Community Facilities District determines not to make District Proceeds available to finance the acquisition, construction and installation of the Water District Facilities, neither the City nor the Community Facilities District shall have any obligation to provide any amounts to finance or pay the costs of the acquisition, construction and installation of the Water District Facilities.
Section 3. Disbursements. (a) District Proceeds available for the acquisition, construction and installation of the Water District Facilities shall be deposited in a special account (howsoever denominated, the “Water District Facilities Account”), which (i) prior to the issuance of Bonds, is to be established and held by or on behalf of the Community Facilities District , and (ii) upon the issuance of Bonds is to be established and held under the Indenture pursuant to which the Bonds are issued. Moneys on deposit in the Water District Facilities Account shall be invested and disbursed at the direction of the Community Facilities District. (b) To the extent that moneys are available therein, the Community Facilities District shall cause disbursements to be made from the Water District Facilities Account from time to time to pay the costs of the acquisition, construction and installation of the Water District Facilities upon submission of a written request of the Water District stating (i) the name and address of the person to whom payment is to be made, (ii) the amount to be paid, (iii) that an obligation in such amount has been i ncurred by the Water District, (iv) the purpose for which the obliga tion to be paid was incurred, (v ) that each item of the obligation to be paid constitutes a cost of the Water District Facilities, (vi) that the obligation to be paid has not been the subject of a prior Water District request for disbursement from the Water District Facilities Account, (vii) that each portion of the Water District Facilities for which payment is requested was constructed under the direction and supervision, or under the authority of, the Water District or was constructed as if it had been constructed under the direction and supervision, or under the authority of, the Water District, and (viii) that each portion of the Water District Facilities for which payment is requested is being acquired and purchased in accordance the provisions of the Act and the Acquisition Agreement.
The Community Facilities District shall process in a timely manner written requests for disbursements received from the Water District that conform to the requirements hereof.
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Section 4. Construction, Ownership and Maintenance of City Facilities and Water District Facilities. (a) The Water District shall have no responsibility for the acquisition, construction and installation of the City Facilities. The City Facilities shall be and remain the sole and separate property of the City and shall be operated, maintained and utilized by the City. The Water District shall not have any ownership interest in the City Facilities, and the Water District shall have no responsibility for the operation, maintenance or utilization of the City Facilities. (b) Neither the City nor the Community Facilities District shall have any responsibility for the acquisition, construction and installation of the Water District Facilities or the Other Agency Facilities. The Water District Facilities shall be and remain the sole and separate property of the Water District and shall be operated, maintained and utilized by the Water District, and the Other Agency Facilities financed by the Community Facilities District for a local agency shall be and remain the sole and separate property of such local agency and shall be operated, maintai ned and utilized by such local agency. Neither the City nor the Community Facilities District shall have any ownership interest in the Water District Facilities or the Other Agency Facilities, and neither the City nor the Community Facilities District shall have any responsibility for the operation, maintenance or utilization of the Water District Facilities or the Other Agency Facilities.
Section 5. Tax Matters. In connection with the issuance of any Bonds, a portion of the proceeds of which are to be made available to finance the acquisition, construction and installation of the Water District Facilities, the Water District shall execute and deliver such certifications and agreements as may be reasonably required in order for bond counsel to conclude that interest on such Bonds will be excluded from gross income under Section 103 of the Internal Revenue Code of 1986.
Section 6. Indemnification. (a) The City agrees to protect, indemnify, defend and hold the Water District, and its officers, employees and agents, and each of them, harmless from and against any and all claims, losses, expenses, suits actions, decrees, judgments, awards, attorneys’ fees and cour t costs which the Water District, or its officers, employees and agents, or any combination thereof, may suffer or which may be sought against or recovered or obtained from the Water District, or its officers, employees or agents, or any combination thereo f, as a result of or by reason of or arising out of or in consequence of the acquisition, construction, installation, operation, maintenance or utilization of the City Facilities. If the City fails to do so, the Water District shall have the right, but not the obligation, to defend the same and charge all of the direct and incidental costs of such defense, including any attorneys’ fees or court costs, to and recover the same from the City.
No indemnification is required to be paid by the City for any claim, loss or expense arising from the willful misconduct or negligence of the Water District, or its officers, employees or agents.
(b) The Water District agrees to protect, indemnify, defend and hold the City and the Community Facilities District, and their respe ctive officers, employees and agents, and each of them, harmless from and against any and all claims, losses, expenses, suits actions, decrees, judgments, awards, attorneys’ fees and court costs which the City or the Community Facilities District, or their respective officers, employees and agents, or any combination thereof, may suffer or which may be sought against or recovered or obtained from the City or the Community Facilities
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District, or their respective officers, employees or agents, or any combina tion thereof, as a result of or by reason of or arising out of or in consequence of the acquisition, construction, installation, operation, maintenance or utilization of the Water District Facilities. If the Water District fails to do so, the City and the Community Facilities District shall have the right, but not the obligation, to defend the same and charge all of the direct and incidental costs of such defense, including any attorneys’ fees or court costs, to and recover the same from the Water District.
No indemnification is required to be paid by the Water District for any claim, loss or expense arising from the willful misconduct or negligence of the City or the Community Facilities District, or their respective officers, employees or agents.
Section 7. Nature of Agreement; Allocation of Special Taxes . This Facilities Agreement shall constitute a joint community facilities agreement entered into pursuant to Sections 53316.2, 53316.4 and 53316.6 of the Act. The entire amount of the proceeds of the Special Taxes shall be allocated and distributed to the City.
Section 8. Limitation of Rights to Parties . Nothing in this Facilities Agreement expressed or implied is intended or shall be construed to give to any person other than the City, the Community Facilities District and the Water District any legal or equitable right, remedy or claim under or in resp ect of this Facilities Agreement or any covenant, condition or provision herein contained; and all such covenants, conditions and provisions are and shall be held to be for the sole and exclusive benefit of the City, the Community Facilities District and the Water District.
Section 9. Notices. All written notices to be given hereunder shall be given to the party entitled thereto at its address set forth below, or at such other address as such party may provide to the other parties in writing from time to time, namely:
If to the City:
City of Fontana
8353 Sierra Avenue
Fontana, CA 92335
Attention: Chief Financial Officer, Management Services If to the Community Facilities District:
City of Fontana Community Facilities
District No. 109 (Narra Hills)
c/o City of Fontana
8353 Sierra Avenue
Fontana, CA 92335
Attention: Chief Financial Officer, Management Services
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If to the Water District:
West Valley Water District
Post Office Box 920
Rialto, CA 92377-0920
Attention: General Manager
Each such notice, statement, demand, consent, approval, authorization, offer, designation, request or other communication hereunder shall be deemed delivered to the party to whom it is addressed (a) if given by courier or delivery service or if personally served or delivered, upon delivery, (b) if given by telecopier, upon the sender’s receipt of an appropriate answerback or other written acknowledgment, (c) if given by electronic mail, on the date sent, but only if confirmation of the receipt of such electronic mail is received or if notice is concurrently sent by another means specified herein, (d) if given by registered or certified mail, return receipt requested, deposited with the United States mail postage prepaid, 72 hours after such notice is deposited with the United States mail, o r (e) if given by any other means, upon delivery at the address specified in this Section.
Section 10. Severability. If any part of this Facilities Agreement is held to be illegal or unenforceable by a court of competent jurisdiction, the remainder of this Faciliti es Agreement shall be given effect to the fullest extent reasonably possible.
Section 11. Successors. This Facilities Agreement shall be binding upon and inure to the benefit of the successors of the parties hereto.
Section 12. Amendments. This Facilities Agreement may be amended, supplemented or otherwise modified only by an instrument in writing executed and delivered by each of the parties hereto.
Section 13. Governing Laws. This Facilities Agreement shall be governed and construed in accordance with the laws of the State of California.
Section 14. Counterparts. This Facilities Agreement may be executed in counterparts, each of which shall be deemed an original and all of which shall constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Facilities Agreement as of the date first written above.
CITY OF FONTANA
By:
Matthew C. Ballantyne,
City Manager
CITY OF FONTANA COMMUNITY
FACILITIES DISTRICT NO. 109
(NARRA HILLS)
By:
Matthew C. Ballantyne,
City Manager of the City of Fontana
WEST VALLEY WATER DISTRICT
By:
Shamindra Manbahal,
General Manager
A-1
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EXHIBIT A
DESCRIPTION OF WATER DISTRICT FACILITIES
The types of facilities to be owned and operated by the Water District and financed by the District Proceeds are water distribution facilities, together with appurtenances and appurtenant work.