4146-3340-8323.2
CONTINUING DISCLOSURE AGREEMENT
by and among
CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT NO. 99
(THE RETREAT)
U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION,
AS TRUSTEE
and
U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION,
AS DISSEMINATION AGENT
Dated as of _______ 1, 2023
City of Fontana
Community Facilities District No. 99
(The Retreat)
Special Tax Bonds, Series 2023
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CONTINUING DISCLOSURE AGREEMENT
THIS CONTINUING DISCLOSURE AGREEMENT (this “Disclosure Agreement”), dated as of _______ 1, 2023, is by and among CITY OF FONTANA COMMUNITY FACILITIES DISTRICT NO. 99 (THE RETREAT), a community facilities district organized and existing under the laws of the State of California (the “Community Facilities District”), U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association organized and existing under the laws of the United States of America, in its capacity as Trustee (the “Trustee”), and U.S.
BANK TRUST COMPANY, NATIONAL ASSOCIATION , a national banking association organized and existing under the laws of the United States of America, in its capacity as Dissemination Agent (the “Dissemination Agent”).
W I T N E S S E T H :
WHEREAS, the Community Facilities District has issued its City of Fontana Community Facilities District No. 99 (The Retreat) Special Tax Bonds, Series 2023 (the “Series 2023 Bonds”), in the aggregate principal amount of $_________, pursuant to the Indenture, dated as of _______ 1, 2023 (the “Indenture”), by and between the Community Facilities District and the Trustee; and
WHEREAS, this Disclosure Agreement is being executed and delivered by the Community Facilities District , the Trustee and the Dissemination Agent for the benefit of the owners and beneficial owners of the Series 2023 Bonds and in order to assist the underwriter of the Series 2023 Bonds in complying with Secur ities and Exchange Commission Rule 15c2 - 12(b)(5);
NOW, THEREFORE, for and in consideration of the mutual promises and covenants herein contained, the receipt whereof is hereby acknowledged, the parties hereto agree as follows:
Section 1. Definitions. Unless the conte xt otherwise requires, the terms defined in this Section shall for all purposes of this Disclosure Agreement have the meanings herein specified.
Capitalized undefined terms used herein shall have the meanings ascribed thereto in the Indenture. “Annual Rep ort” means any Annual Report provided by the Community Facilities District pursuant to, and as described in, Sections 2 and 3 hereof. “Annual Report Date” means the date in each year that is the first day of the month following the eighth month after the end of the Community Facilities District’s fiscal year, which date, as of the date of this Disclosure Agreement, is March 1. “Community Facilities District” means City of Fontana Community Facilities District No. 99 (The Retreat), a community facilities district organized and existing under the laws of the State, and its successors.
“Disclosure Representative” means the Chief Financial Officer, Management Services , of the City, or his or her designee, or such other person as the Community Facilities District shall designate in writing to the Trustee and the Dissemination Agent from time to time.
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“Dissemination Agent” means U.S. Bank Trust Company, National Association , acting in its capacity as Dissemination Agent hereunder, or any successor Di ssemination Agent designated in writing by the Community Facilities District and that has filed with the Trustee and the then existing Dissemination Agent a written acceptance of such designation. “Financial Obligation” means (a) a debt obligation of the Community Facilities District, (b) a derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation of the Community Facilities District, or (c) a guarantee of (i) a debt obli gation of the Community Facilities District, or (ii) a derivative instrument described in clause (b), above; provided, however, that the term “Financial Obligation” shall not include “municipal securities” (as such term is defined in the Securities Exchange Act of 1934, as amended) as to which a “final official statement” (as such term is defined in the Rule) has been provided to the MSRB consistent with the Rule.
“Indenture” means the Indenture, dated as of _______ 1, 2023 , by and between the Community Facilities District and U.S. Bank Trust Company, National Association, as Trustee, as originally executed and as it may be modified or amended from time to time in accordance with its terms.
“Listed Events” means any of the events listed in subsection (a) or subsection (b) of Section 4 hereof.
“MSRB” means the Municipal Securities Rulemaking Board or any other entity designated or authorized by the Securities and Exchange Commission to receive reports pursuant to the Rule.
Until otherwise designated by the MSRB or the Securities and Exchange Commission, filings with the MSRB are to be made through the Electronic Municipal Market Access (EMMA) website of the MSRB, currently located at http://emma.msrb.org.
“Participating Underwriter” means the original underwriter of the Series 2023 Bonds required to comply with the Rule in connection with the offering of the Series 2023 Bonds. “Rule” means Rule 15c2 -12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. “Trustee” means U.S. Bank Trust Company, National Association , as Trustee under the Indenture, or any successor thereto as Trustee thereunder substituted in its place as provided therein.
Section 2. Provision of Annual Reports. (a) The Community Facilities District shall, or shall cause the Dissemination Agent to, provide to the MSRB an Annual Report that is consistent with the requirements of Section 3 hereof, not later than the Annual Report Date, commencing with the report for the 2022-23 Fiscal Year. The Annu al Report may include by reference other information as provided in Section 3 hereof; provided, however, that the audited financial statements of the Community Facilities District, if any, may be submitted separately from the balance of the Annual Report, and later than the date required above for the filing of the Annual Report if they are not available by that date. If the Community Facilities District’s fiscal year changes, it shall, or it shall instruct the Dissemination Agent to, give notice of such ch ange in a filing with the MSRB.
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(b) Not later than 15 business days prior to the date specified in subsection (a) of this Section for the providing of the Annual Report to the MSRB, the Community Facilities District shall provide the Annual Re port to the Dissemination Agent. If by such date, the Dissemination Agent has not received a copy of the Annual Report, the Dissemination Agent shall contact the Community Facilities District to determine if the Community Facilities District is in complian ce with the first sentence of this subsection (b).
(c) If the Dissemination Agent has not received a copy of the Annual Report from the Community Facilities District by the date specified in subsection (a) of this Section, the Dissemination Agent shall, in a timely manner, send a notice to the MSRB in substantially the form attached as Exhibit A.
(d) The Dissemination Agent shall:
(i) provide each Annual Report received by it to the MSRB, as provided herein; and
(ii) file a report with th e Community Facilities District and the Trustee certifying that such Annual Report has been provided pursuant to this Disclosure Agreement and stating the date it was provided to the MSRB.
Section 3. Content of Annual Reports . The Community Facilities District’s Annu al Report shall contain or incorporate by reference the following:
(a) The Community Facilities District’s audited financial statements, if any, prepared in accordance with generally accepted accounting principles as promulgated to apply to governmental entit ies from time to time by the Governmental Accounting Standards Board. If the Community Facilities District’s audited financial statements, if any, are not available by the time the Annual Report is required to be filed pursuant to subsection (a) of Section 2 hereof, the Annual Report shall contain unaudited financial statements, in a format similar to that used for the Community Facilities District’s audited financial statements, and the audited financial statements, if any, shall be filed in the same manne r as the Annual Report when they become available.
(b) The following information:
(i) The principal amount of Series 2023 Bonds Outstanding as of the December 31 next preceding the Annual Report Date;
(ii) The principal amount of Additional Bonds, if any, Outstanding as of the December 31 next preceding the Annual Report Date;
(iii) The balance in the Reserve Fund, and a statement of the Reserve Requirement, as of the December 31 next preceding the Annual Report Date; (iv) The balance in the (A) Construction Account, and (B) the Community Benefit Facilities Account, as of the December 31 next preceding the Annual Report Date;
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(v) The total assessed value of all parcels within the Community Facilities District on which the Special Tax is levied, as shown on the assessment roll of the San Bernardino County Assessor last equalized prior to the December 31 next preceding the Annual Report Date, and a statement of assessed value -to- bonded debt ratios therefor, either by individual parcel or by categories (e.g., “below 3:1,” “3:1 to 4.99:1,” etc.);
(vi) Value-to-bonded debt information, based on the assessed values in the assessment roll of the San Ber nardino County Assessor last equalized prior to the December 31 next preceding the Annual Report Date, for (A) each property owner that owns four or more taxable parcels within the Community Facilities District, and (B) all other property owners, grouped together, owning taxable parcels within the Community Facilities District;
(vii) The Special Tax delinquency rate for all parcels within the Community Facilities District, as shown on the assessment roll of the San Bernardino County Assessor last equalized prior to the December 31 next preceding the Annual Report Date, the number of parcels within the Community Facilities District delinquent in payment of the Special Tax as of the December 31 next preceding the Annual Report Date, the amount of each delinquency , the length of time delinquent and the date on which foreclosure was commenced, or similar information pertaining to delinquencies deemed appropriate by the Community Facilities District; provided, however, that parcels with aggregate delinquencies of $5,000 or less (excluding penalties and interest) may be grouped together and such information may be provided by category;
(viii) The status of foreclosure proceedings and a summary of the results of any foreclosure sales as of the December 31 next preceding the A nnual Report Date;
(ix) The identity of any property owner representing more than 5% of the Special Tax levy delinquent in payment of the Special Tax as of the December 31 next preceding the Annual Report Date;
(x) A land ownership summary listing property owner s responsible for more than 5% of the annual Special Tax, as shown on the assessment roll of the San Bernardino County Assessor last equalized prior to the December 31 next preceding the Annual Report Date; and
(xi) A description of any changes to the Rate and Method approved by, or submitted for approval to, the qualified electors of the Community Facilities District during the period from the date of filing the prior year’s Annual Report to the date of filing such Annual Report.
Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues of the Community Facilities Dist rict or related public entities that have been made available to the public on the MSRB’s website . The
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Community F acilities District shall clearly identify each such other document so included by reference.
Section 4. Reporting of Significant Events. (a) Pursuant to the provisions of this Section, the Community Facilities District shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Series 2023 Bonds in a timely manner not later than ten business days after the occurrence of the event:
(i) Principal and interest payment delinquencies.
(ii) Unscheduled draws on debt service reserves reflecting financial difficulties. (iii) Unscheduled draws on credit enhancements reflecting financial difficulties. (iv) Substitution of credit or liquidity providers, or their failure to perform. (v) Adverse tax opinions or issuance by the Internal Re venue Service of proposed or final determination of taxability or of a Notice of Proposed Issue (IRS Form 5701 TEB).
(vi) Tender offers.
(vii) Defeasances.
(viii) Rating changes.
(ix) Bankruptcy, insolvency, receivership or similar event of the Community Facilities District.
(x) Default, event of acceleration, termination event, modification of terms or other similar events under the terms of a Financial Obligation, any of which reflect financial difficulties.
For purposes of the event identified in paragraph (ix) of this subsection , the event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for the Community Facilities District in a proceeding under the U.S. Bankruptcy Code or in any other proce eding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the Community Facilities District, or if such jurisdiction has been assumed by leaving the existing gov ernmental body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental autho rity having supervision or jurisdiction over substantially all of the assets or business of the Community Facilities District. (b) Pursuant to the provisions of this Section, the Community Facilities District shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Series 2023 Bonds, if material, in a timely manner not later than ten business days after the occurrence of the event:
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(i) Unless described in paragraph (v) of subsection (a) of this Section, material notices or determinations by the Internal Revenue Service with respect to the tax status of the Series 2023 Bonds or other material events affecting the tax status of the Series 2023 Bonds.
(ii) Modifications to rights of holders of the Series 2023 Bonds. (iii) Series 2023 Bond calls.
(iv) Release, substitution, or sale of property securing repayment of the Series 2023 Bonds.
(v) Non-payment related defaults.
(vi) The consummation of a merger, consolidation, or acquisition involving the Community Facilities District or the sale of all or substantially all of the assets of the Community Facilities District other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreemen t relating to any such actions, other than pursuant to its terms.
(vii) Appointment of a successor or additional Trustee or the change of name of a Trustee.
(viii) Incurrence of a Financial Obligation, or agreement to covenants, events of default, remedies, priority rights or other similar terms of a Financial Obligation, any of which affect holders of the Series 2023 Bonds. (c) The Trustee shall, within one business day of obtaining actual knowledge of the occurrence of any of the Listed Events, contact the Disclosure Representative and inform such person of the event.
(d) Whenever the Community Facilities District obtains knowledge of the occurrence of a Listed Event described in subsection (b) of this Section, the Community Facilities Dist rict shall determine if such event would be material under applicable Federal securities law. (e) Whenever the Community Facilities District obtains knowledge of the occurrence of a Listed Event described in subsection (a) of this Section, or determines that knowledge of a Listed Event described in subsection (b) of this Section would be material under applicable Federal securities law, the Community Facilities District shall, or shall cause the Dissemination Agent to, file a notice of the occ urrence of such Listed Event with the MSRB, within ten business days of such occurrence.
(f) Notwithstanding the foregoing, notice of Listed Events described in paragraph (iii) of subsection ( b) of this Section need not be given any earlier th an the notice (if any) of the underlying event is given to holders of affected Series 2023 Bonds pursuant to the Indenture.
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Section 5. Format for Filings with MSRB. Any report or filing with the MSRB pursuant to this Disclosure Agreement must be submitted in electron ic format, accompanied by such identifying information as is prescribed by the MSRB.
Section 6. Termination of Reporting Obligation . The Community Facilities District’s obligations under this Disclosure Agreement shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Series 2023 Bonds. If such termination occurs prior to the final maturity of the Series 2023 Bonds, the Community Facilities District shall give, or cause to be given, notice of such termination in a filing with the MSRB.
Section 7. Dissemination Agent. The Community Facilities District may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Agreement, and may discharge any such Dissemination Agent, with o r without appointing a successor Dissemination Agent. The Dissemination Agent may resign by providing 30 days’ written notice to the Community Facilities District and the Trustee.
Section 8. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Agreement, th e Community Facilities District, the Trustee and the Dissemination Agent may amend this Disclosure Agreement (and the Trustee and the Dissemination Agent shall agree to any amendment so requested by the Community Facilities District, so long as such amendment does not adversely affect the rights or materially increase the obligations of the Trustee or the Dissemination Agent), and any provision of this Disclosure Agreement may be waived, p rovided that the following conditions are satisfied:
(a) if the amendment or waiver relates to the provisions of subsection (a) of Section 2 hereof, Section 3 hereof or subsection (a) or (b) of Section 4 hereof, it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature or status of an obligated person with respect to the Series 2023 Bonds, or the type of business conducted; (b) the undertakings herein, as prop osed to be amended or waived, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the primary offering of the Series 2023 Bonds, after taking into account any amendments or interpretat ions of the Rule, as well as any change in circumstances; and
(c) the proposed amendment or waiver (i) is approved by Owners of the Series 2023 Bonds in the manner provided in the Indenture for amendments to the Indenture with the consent of Owners, or (ii) d oes not, in the opinion of nationally recognized bond counsel, materially impair the interests of Owners or Beneficial Owners of the Series 2023 Bonds.
In the event of any amendment or waiver of a provision of this Disclosure Agreement, the Community Facilities District shall describe such amendment or waiver in the next Annual Report, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the Community Facilities District. In
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addition, if the amendment relates to the accounting principles to be followed in preparing financial statements (i) notice of such change shall be given in a filing with the MSRB, and (ii) the Annual Report for the year in which the change is made shall present a comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles.
Section 9. Additional Information . Nothing in t his Disclosure Agreement shall be deemed to prevent the Community Facilities District from disseminating any other information, using the means of dissemination set forth in this Disclosure Agreement or any other means of communication, or including any other information in any Annual Report or notice required to be filed pursuant to this Disclosure Agreement, in addition to that which is required by this Disclosure Agreement. If the Community Facilities District chooses to include any information in any Annual Report or notice in addition to that which is specifically required by this Disclosure Agreement, the Community Facilities District shall have no obligation under this Disclosure Agreement to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event or any other event required to be reported.
Section 10. Default. In the event of a failure of the Community Facilities District, the Trustee or the Dissemination Agent to comply with any provision of this Disclosure Agr eement, the Trustee may (and, at the written direction of any Participating Underwriter or the Owners of at least 25% of the aggregate principal amount of Outstanding Series 2023 Bonds, shall, upon receipt of indemnification reasonably satisfactory to the Trustee), or any Owner or Beneficial Owner of the Series 2023 Bonds may, take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the Community Facilities District, the Trustee or the Dissemination Agent, as the case may be, to comply with its obligations under this Disclosure Agreement. A default under this Disclosure Agreement shall not be deemed an Event of Default under the Indenture, and the sole remedy under this Disclosure Agreement in the event of any failure of the Community Facilities District, the Trustee or the Dissemination Agent to comply with this Disclosure Agreement shall be an action to compel performance.
Section 11. Duties, Immunities and Liabilities of Trustee and Dissemination Agent.
Article VIII of the Indenture is hereby made applicable to this Disclosure Agreement as if this Disclosure Agreement were (solely for this purpose) contained in the Indenture. The Dissemination Agent shall be entitled to the protections and limitat ions from liability afforded to the Trustee thereunder. Neither the Trustee nor the Dissemination Agent shall be responsible for the form or content of any Annual Report or notice of Listed Event. The Dissemination Agent shall receive reasonable compensation for its services provided under this Disclosure Agreement. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Agreement. To the extent permitted by law, the Community Facilities District agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities that it may incur in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys’ fees) of defending against any claim of liability, and that are not due to its negligence or its willful misconduct. The obligations of the Community Facilities District under this Section shall survive resignation or removal of the Dissemination Agent and the termination of this Disclosure Agreement.
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The Dissemination Agent has no power to enforce performance on the part of the Community Facilities District. The Dissemination Agent shall not be responsible for the content of any notice or report prepared by the Community Facilities District pursuant to this Disclosure Agreement.
Section 12. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit of the Community Facilities District, the Trustee, the Dissemination Agent, the Par ticipating Underwriter and the Owners and Beneficial Owners from time to time of the Series 2023 Bonds, and shall create no rights in any other person or entity.
Section 13. Governing Laws . This Disclosure Agreement shall be governed by and construed in accordance with the laws of the State of California.
Section 14. Electronic Signature. Each of the parties hereto agrees that the transaction consisting of this Disclosure Agreement may be conducted by electronic means. Each party agrees, and acknowledges that it is such party’s intent, that if such party signs this Disclosure Agreement using an electronic signature, it is signing, adopting and accepting this Disclosure Agreement and that signing this Disclosure Agreement using an electronic signature is the legal equivalent of having placed its handwritten signature on this Disclosure Agreement on paper. Each party acknowledges that it is being provided with an electronic or paper copy of this Disclosure Agreement in a usable format.
Section 15. Counterparts. This Disclosure Agreement may be executed in several counterparts, each of which shall be 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 Di sclosure Agreement as of the date first above written.
CITY OF FONTANA
COMMUNITY FACILITIES DISTRICT
NO. 99 (THE RETREAT)
By:
U.S. BANK TRUST COMPANY,
NATIONAL ASSOCIATION, AS
TRUSTEE
By:
U.S. BANK TRUST COMPANY,
NATIONAL ASSOCIATION, AS
DISSEMINATION AGENT
By:
A-1
4146-3340-8323.2
EXHIBIT A
NOTICE OF FAILURE TO FILE ANNUAL REPORT
Name of Issuer: City of Fontana Community Facilities District No. 99 (The Retreat) Name of Issue: City of Fontana Community Facilities District No. 99 (The Retreat) Special Tax Bonds, Series 2023
Date of Issuance: ___________, 2023
NOTICE IS HEREBY GIVEN that City of Fontana Community Facilities District No. 99 (The Retreat ) (the “Community Facilities District”) has not provided an Annual Report with respect to the above-named Bonds as required by the Continuing Disclosure Agreement, dated as of _______ 1, 2023, by and among the Community Facilities District, U.S. Bank Trust Company, National Association , in its capacity as Trustee , and U.S. Bank Trust Company, National Association, in its capacity as Dissemination Agent. [The Commun ity Facilities District anticipates that such Annual Report will be filed by ____________.]
Dated: ____________
U.S. Bank Trust Company, National
Association, as Dissemination
Agent, on behalf of City of Fontana
Community Facilities District No. 99
(The Retreat)
cc: City of Fontana
Community Facilities District
No. 99 (The Retreat)