APPENDIX A
GENERAL, ECONOMIC AND DEMOGRAPHIC INFORMATION
RELATING TO THE CITY AND THE COUNTY
The following information concerning the City of Marina and Monterey County is included only for the purpose of supplying general information regarding the City and the County. The Certificates are not a debt of the County, the State or any of its political subdivisions, and none of the County, the State nor any of their political subdivisions, except for the City, are liable therefor.
Although reasonable efforts have been made to include up -to-date information in this Appendix A, some of the information is not current due to delays in reporting of information by various sources. It should not be assumed that the trends indicated by the following data would continue beyond the specific periods reflected herein.
Introduction
The City . The City of Marina, California (the “City”) is located in Monterey County, California (the “County”). The City is located along the central coast of California, 8 miles west of the City of Salinas, and 8 miles north of the City of Monterey. The City is also connected to Monterey, California by California State Route 1, which also connects it with Santa Cruz, California, after driving for about 35 miles. The City lies at an elevation of 43 feet.
The City was incorporated in 1975 and is the newest city on t he Monterey Peninsula. The City includes part of the California State University, Monterey Bay campus, the Monterey Bay Education, Science and Technology Center branch research center of the University of California Santa Cruz, and the Veterans Transition Center (VTC).
According to the United States Census Bureau, the City has a total area of 9.8 square miles, of which 8.9 square miles is land and 0.9 square miles is water.
The City’s history is intertwined with that of Fort Ord. Fort Ord lands were used as an infantry training center since the Mexican– American War. Major growth took place in 1938 with the first joint Army and Navy maneuvers held in 1940. Fort Ord was selected in 1991 for decommissioning and the post formally closed after troop reassignment in 1994. In July 1994 the first academic year of California State University, Monterey Bay opened, and barracks were soon transformed into dorms. As a result of base closure, some of the last undeveloped natural wildlands on the Monterey Peninsula are now overseen by the Bureau of Land Management, including 86 miles of trails for the public to explore on foot, bike or horseback. In 2012, President Barack Obama designated 14,000 acres of the closed base as a National Monument managed by the BLM.
The County. Monterey County, described as the “greatest meeting of land and sea” celebrated its quadricentennial in 2002. In 1602, Spanish merchant Sebastian Vizcaino became the first European on the Monterey Peninsula. He christened Monterey after the viceroy of New Spain, Count de Monte Rey. Eventually, the City of Monterey served as California’s first capital, where the State constitution was signed in 1849. The County is one of the 27 original California counties, incorporating in 1850.
With an area of abo ut 3,300 square miles, the County borders the Pacific Ocean almost at the midpoint of California with 99 miles of coastline. The County is located about 100 miles south of San Francisco and 240 miles north of Los Angeles. It is bordered by Santa Cruz Count y to the north, San Benito (originally part of Monterey County), Fresno and Kings Counties to the east and San Luis Obispo County to the south.
There are two distinct sub-regions in the County. One is the Monterey Peninsula, world famous for beautiful ocean views, opulent homes, the 17 -mile drive, seafood and golf courses. The other, the Salinas Valley, is equally renowned as an area full of fertile farmland, running almost the entire length of the County and is one of the world’s major vegetable producing areas.
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The Department of Defense has a number of installations located in the County: Fort Hunter-Liggett, Camp Roberts, the Naval Postgraduate School, the Defense Language Institute and some support facilities for the Naval Postgraduate School and the Defense Language Institute and certain other functions at what used to be Fort Ord. The Monterey Peninsula, famed for its scenic beauty, is a year -round tourist attraction. Pebble Beach, Cypress Point, Spyglass Hill, Poppy Hills and The Links at Spanish Ba y are well known Monterey Peninsula golf courses. The Monterey Bay Aquarium and the City of Carmel-By-The-Sea also are attractions that draw tourists to the Monterey Peninsula.
The County also benefits from two wilderness areas set aside for recreational enjoyment, consisting of 468,538 total acres. The Los Padres National Forest has 304,035 acres and the Ventana Wilderness totals 164,503 acres.
Population
The table below summarizes population of the City, the County, and the State for the last five years.
CITY OF MARINA, MONTEREY COUNTY, and CALIFORNIA
Population
Year
City of
Marina
Monterey
County
State of
California
2018 22,342 438,639 39,519,535
2019 22,704 440,199 39,605,361
2020 22,372 440,393 39,648,938
2021 21,271 435,721 39,303,157
2022 21,457 433,716 39,185,605
Source: California Department of Finance, E -4 Population Estimate for Cities, Counties, and the State, 201 0-22, with 2010 Census Benchmark.
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Employment
The following table summarizes historical employment and unemployment for the County, the State and the United States:
MONTEREY COUNTY, CALIFORNIA, and UNITED STATES
Civilian Labor Force, Employment, and Unemployment
(Annual Averages)
Unemployment
Year Area Labor Force Employment Unemployment Rate (1)
2017 Monterey County 220,200 204,400 15,800 7.2
California 19,312,000 18,393,100 918,900 4.8
United States 160,320,000 153,337,000 6,982,000 4.4
2018 Monterey County 224,100 210,000 14,000 6.3
California 19,398,200 18,582,800 815,400 4.2
United States 162,075,000 155,761,000 6,314,000 3.9
2019 Monterey County 222,500 208,700 13,800 6.2
California 19,411,600 18,627,400 784,200 4.0
United States 163,539,000 157,538,000 6,001,000 3.7
2020 Monterey County 213,500 190,400 23,100 10.8
California 18,821,200 16,913,100 1,908,100 10.1
United States 160,742,000 147,795,000 12,947,000 8.1
2021(2) Monterey County 211,900 194,300 17,500 8.3
California 18,923,200 17,541,900 1,381,200 7.3
United States 161,204,000 152,581,000 8,623,000 5.3
Source: California Employment Development Department, Monthly Labor Force Data for Counties, Annual Average 2010 -21, and US Department of Labor.
(1) The unemployment rate is computed from unrounded data ; therefore, it may differ from rates computed from rounded figures available in this table.
(2) Latest available full-year data.
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Major Employers in the City and the County
The following table lists the top 10 employers within the City for the 2020 calendar year.
CITY OF MARINA
Top 10 Employers
For the 2020 Calendar Year(1)
% of
Employer Employees Total
Monterey Peninsula College 264 2.18%
Walmart 218 1.80
Monterey Peninsula USD 196 1.62
Target 166 1.37
Monterey Regional Waste Mgmt. Dist. 117 0.97
City of Marina 89 0.74
Scudder Roofing Company 83 0.69
Kohl’s 73 0.60
Monterey One Water Treatment Plant 70 0.58
REI 48 0.40
Total Top 10 1,324 10.94%
Source: City of Marina 2019-20 Annual Comprehensive Financial Report. (1) Latest available full-year data.
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The table below sets forth a list of major employers in Monterey County in 2021.
MONTEREY COUNTY
2021 Major Employers
Employer Name Location Industry
Al Pak Labor Soledad Labor Contractors
Azcona Harvesting Greenfield Harvesting-Contract
Bud of California Soledad Fruits & Vegetables-Growers & Shippers Carol Hatton Breast Care Ctr Monterey Diagnostic Imaging Centers County-Monterey Behavioral King City Health Services
Fort Hunter Liggett Military Jolon Military Bases
Growers Co Salinas Fruits & Vegetables & Produce-Retail Hilltown Packing Co Inc Salinas Harvesting-Contract
Mann Packing Co Inc Salinas Fruits & Vegetables-Growers & Shippers Mee Memorial Hospital King City Hospitals
Middlebury Institute-Intl Stds Monterey Schools-Universities & Colleges Academic Misionero Vegetables Gonzales Fruits & Vegetables-Growers & Shippers Monterey County Social Svc Dpt Salinas Government Offices-County Monterey Peninsula College Monterey Junior-Community College-Tech Institutes Natividad Medical Ctr Salinas Hospitals
Pebble Beach Co Pebble Beach Resorts
Pebble Beach Co Pebble Beach Resorts
Pebble Beach Resorts Pebble Beach Resorts
Premium Harvesting & Packing Salinas Labor Contractors
Quality Farm Labor Gonzales Labor Contractors
R C Packing Gonzales Packing & Crating Service
Rancho Canada Golf Club Carmel Golf Courses
Salinas Valley Meml Healthcare Salinas Health Care Management
Source: America’s Labor Market Information System (ALMIS) Employer Database, 2022 1st Edition.
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Appendix A
Construction Activity
The following table reflects the five-year history of building permit valuation for the City and the County:
CITY OF MARINA
Building Permits and Valuation
(Dollars in Thousands)
2017 2018 2019 2020 2021(2)
Permit Valuation:
New Single-family $ 25,210 $ 60,820 $ 15,811 $ 22,705 $ 58,235 New Multi-family 8,360 - - 88,360 850
Res. Alterations/Additions 1,411 15,105 2,734 3,396 2,378 Total Residential 34,982 75,925 18,546 34,462 61,464
Total Nonresidential 3,896 3,237 1,862 13,258 3,234
Total All Building 38,879 79,163 20,409 47,720 64,698
New Dwelling Units:
Single Family 94 206 48 79 209
Multiple Family 47 - - 47 11
Total 141 206 48 126 220
MONTEREY COUNTY
Building Permits and Valuation
(Dollars in Thousands)
2017 2018 2019 2020 2021(2)
Permit Valuation:
New Single-family $ 165,341 $ 199,194 $ 142,474 $ 113,829 $ 128,255 New Multi-family 33,318 51,460 23,669 29,377 33,842
Res. Alterations/Additions 73,317 88,972 65,196 41,230 80,409 Total Residential 271,977 339,627 231,340 184,437 242,508 Total Nonresidential 171,630 151,103 195,621 143,658 159,229 Total All Building 443,608 490,731 426,961 328,096 401,737
New Dwelling Units:
Single Family 523 611 574 361 473
Multiple Family 178 212 116 199 277
Total 701 823 690 560 750
Source: Construction Industry Research Board: “Building Permit Summary.” Note: Columns may not sum to totals due to independent rounding. (1) Latest available full year data.
Household Effective Buying Income
“Effective Buying Income” is defined as personal income less personal tax and nontax payments, a number often referred to as “disposable” or “after-tax” income. Personal income is the aggregate of wages and salaries, other labor-related income (such as employer contributions to private pension f unds), proprietor’s income, rental income (which includes imputed rental income of owner -occupants of non-farm dwellings), dividends paid by corporations, interest income from all sources, and transfer payments (such as pensions and welfare assistance). Deducted from this total are personal taxes (federal, state and local), nontax payments (fines, fees, penalties, etc.) and personal
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contributions to social insurance. According to U.S. government definitions, the resultant figure is commonly known as “disposable personal income.”
The following table summarizes the median household effective buying income for the City, the County, the State and the nation for the past five years.
CITY OF MARINA, MONTEREY COUNTY,
STATE OF CALIFORNIA AND UNITED STATES
Median Household Effective Buying Income
2017 2018 2019 2020 2021
Marina $ 50,129 $ 55,938 $ 61,719 $ 63,319 $ 68,077
Monterey County 56,609 60,275 65,078 65,426 74,498
California 59,646 62,637 65,870 67,956 77,058
United States 50,735 52,841 55,303 56,790 64,448
Source: Nielsen, Inc.
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Appendix B
APPENDIX B
ANNUAL COMPREHENSIVE FINANCIAL REPORT OF THE CITY
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
The Auditor was not requested to consent to the inclusion of its report in this Appendix B and it has not undertaken to update financial statements included in this Appendix B. No opinion is expressed by the Auditor with respect to any event subsequent to its report.
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Appendix C
APPENDIX C
INVESTMENT POLICY OF THE CITY
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Appendix D
APPENDIX D
FORM OF SPECIAL COUNSEL OPINION
[Letterhead of Quint & Thimmig LLP]
[Closing Date]
City Council of the
City of Marina
211 Hillcrest Avenue
Marina, California 93933
OPINION: $______* Certificates of Participation (2022 Transportation Infrastructure Financing Project) Evidencing Direct, Undivided Fractional Interests of the Owners Thereof in Lease Payments to be Made by the City of Marina, as the Rental for Certain Property Pursuant to a Lease Agreement with the Public Property Financing Corporation of California
Members of the City Council:
We have acted as special counsel in connection with the delivery by the City of Marina (the “City”), of its $______* Lease Agreement, dated as of June 1, 2022, by and between the Public Property Financing Corporation of California (the “Corporation”) and the City (the “Lease Agreement”), pursuant to the California Government Code.
The Corporation has, pursuant to the Assignment Agreement, dated as of June 1, 2022 (the “Assignment Agreement”), by and between the Corporation and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”), assigned certain of its rights under the Lease Agreement, including its right to receive a portion of the lease payments made by the City thereunder (the “Lease Payments”), to the Trustee. Pursuant to the Trust Agreement, dated as of June 1, 2022, by and among the Trustee, the Corporation and the City (the “Trust Agreement”), the Trustee has ex ecuted and delivered certificates of participation (the “Certificates”) evidencing direct, undivided fractional interests of the owners thereof in the Lease Payments. We have examined the law and such certified proceedings and other papers as we deem necessary to render this opinion.
As to questions of fact material to our opinion, we have relied upon representations of the City contained in the Lease Agreement and in the certified proceedings and certifications of public officials and others furnished to us without undertaking to verify the same by independent investigation.
Based upon our examination, we are of the opinion, under existing law, as follows:
1. The City is duly created and validly existing as a municipal corporation and general law city organized and existing under the laws of the State of California with the power to enter into the Site and Facility Lease (as defined in the Trust Agreement), the Lease Agreement and the Trust Agreement and to perform the agreements on its part contained therein.
2. The Site and Facility Lease, the Lease Agreement and the Trust Agreement have been duly authorized, executed and delivered by the City and are obligations of the City valid, binding and enforceable against the City in accordance with their respective terms.
* Preliminary, subject to change.
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3. The Assignment Agreement is valid, binding and enforceable in accordance with their terms.
4. Subject to the terms and provisions of the Lease Agreement, the Lease Payments to be made by the City are payable from general funds of the City lawfully available therefor. By virtue of the Assignment Agreement, the owners of the Certificates are entitled to receive their fractional share of the Lease Payments in accordance with the terms and provisions of the Trust Agreement.
5. Subject to the C ity’s compliance with certain covenants, interest with respect to the Certificates is excludable from gross income of the owners thereof for federal income tax purposes and is not included as an item of tax preference in computing the alternative minimum tax for individuals under the Internal Revenue Code of 1986, as amended. Failure to comply with certain of such covenants could cause interest with respect to the Certificates to be includable in gross income for federal income tax purposes retroactively to the date of delivery of the Certificates.
6. The portion of the Lease Payments designated as and comprising interest and received by the owners of the Certificates is exempt from personal income taxation imposed by the State of California.
Ownership of the Certificates may result in other tax consequences to certain taxpayers, and we express no opinion regarding any such collateral consequences arising with respect to the Certificates.
The rights of the owners of the Certificates and the en forceability of the Site and Facility Lease, the Lease Agreement, the Assignment Agreement and the Trust Agreement may be subject to the Bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors’ rights heretofore or hereafter enacted and also may be subject to the exercise of judicial discretion in accordance with general principles of equity.
Our opinion represents our legal judgment based upon such review of the law and the facts that we deem relevant to render our opinion and is not a guarantee of a result. This opinion is given as of the date hereof and we assume no obligation to revise or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention or any changes in law that may hereafter occur.
Respectfully submitted,
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Appendix E
APPENDIX E
SUMMARY OF THE PRINCIPAL LEGAL DOCUMENTS
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Appendix F
APPENDIX F
DTC’S BOOK-ENTRY ONLY SYSTEM
The information in this Appendix F, concerning The Depository Trust Company, New York, New York (“DTC”), and DTC’s book-entry system, has been furnished by DTC for use in official statements and the City takes no responsibility for the completeness or accuracy thereof. The City cannot and does not give any assurances that DTC, DTC Participants or Indirect Participants will distribute to the Beneficial Owners (a) payments of interest or principal with respect to the Certificates, (b) certificates representing ownership interest in or other confirmation of ownership interest in the Certificates, or (c) redemption or other notices sent to DTC or Cede & Co., its nominee, as the registered owner of the Certificates, or that they will so do on a timely basis, or that DTC, DTC Participants or DTC Indirect Participants will act in the manner described in this Appendix F. The c urrent “Rules” applicable to DTC are on file with the Securities and Exchange Commission and the current “Procedures” of DTC to be followed in dealing with DTC Participants are on file with DTC. Information Furnished by DTC Regarding its Book-Entry Only System
1. The Depository Trust Company ( “DTC”), New York, NY, will act as securities depository for the Certificates (as used in this Appendix FE, the “Securities”). The Securities will be issued as fully-registered securities registered in the name of Ced e & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully- registered Security certificate will be issued for each maturity of the Securities, in the aggregate principal amount of such issue, and will be deposited with DTC. If, however, the aggregate principal amount of any issue exceeds $500 million, one certificate will be issued with respect to each $500 million of principal amount, and an additional certificate will be issued with respect to any remaining principal amount of such issue.
2. DTC, the world ’s largest securities depository, is a limited- purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments from over 100 countries that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post -trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book -entry transfers and pledges between Direct Participants ’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non -U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ( “Indirect Participants”). DTC is rated AA+ by Standard & Poor’s. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com and www.dtc.org.
3. Purchases of Securities under the DTC system must be made by or through Direct Participants, which will receive a credit for the Securities on DTC’s records. The ownership interest of each actual purchaser of each Security (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants ’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Securities, except in the event that use of the book-entry system for the Securities is discontinued.
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4. To facilitate subsequent transfers, all Securities deposited by Direct Participants with DTC are registered in the name of DTC ’s partnership nominee, Cede & Co., or such other name as may be requeste d by an authorized representative of DTC. The deposit of Securities with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not affect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Securities; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Securities are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.
5. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time.
Beneficial Owners of Securities may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Securities, such as redemptions, tenders, defaults, and proposed amendments to the Security documents. For example, Beneficial Owners of Securities may wish to ascertain that the nominee holding the Securities for their benefit has agreed to obtain and transmit the notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them.
6. Redemption notices shall be sent to DTC. If less than all of the Securities within an issue are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed.
7. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the Securities unless authorized by a Direct Participant in accordance with DTC ’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the City as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co. ’s consenting or voting rights to those Direct Participants to whose accounts the Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy).
8. Redemption proceeds, distributions, and dividend payments on the Securities will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from the City or the paying agent or bond trustee, on payable date in accordance with their respective holdings shown on DTC ’s records.
Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC nor its nominee, the paying agent or bond trustee, or the City, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the City or the paying agent or bond trustee, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.
9. DTC may discontinue providing its services as depository with respect to the Securities at any time by giving reasonable notice to the City or the paying agent or bond trustee. Under such circumstances, in the event that a successor depository is not obtained, Security certificates are required to be printed and delivered.
10. The City may decide to discontinue use of the system of book -entry-only transfers through DTC (or a successor securities depository). In that event, Security certificates will be printed and delivered to DTC.
11. The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that the City believes to be reliable, but the City takes no responsibility for the accuracy thereof.
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Appendix G
APPENDIX G
FORM OF CONTINUING DISCLOSURE CERTIFICATE
This CONTINUING DISCLOSURE CERTIFICATE (the “Disclosure Certificate”) is executed and delivered by the CITY OF MARINA (the “City”) in connection with the execution and delivery of $______ * Certificates of Participation (2022 Transportation Infrastructure Financing Project) (the “Certificates”). The Certificates are being executed and delivered pursuant to a Trust Agreement, dated as of June 1, 2022, by and among U.S. Bank Trust Company, Nat ional Association, as trustee (the “Trustee”), the City and the Public Property Financing Corporation of California (the “Trust Agreement”). Pursuant to Section 11.08 of the Trust Agreement, the City covenants and agree as follows:
Section 1. Definitions. In addition to the definitions set forth above and in the Trust Agreement which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section 1, the following capitalized terms shall have the following meanings:
“Annual Report” means any Annual Report provided by the City pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate.
“Annual Report Date” means the date that is nine months after the end of the City’s fiscal year (currently March 31 based on the City’s fiscal year end of June 30).
“Dissemination Agent” shall mean, initially, _______________, doing business as Applied Best Practices, or any successor Dissemination Agent designed in writing by the City and which has been filed with the then current Dissemination Agent a written acceptance of such designation.
“Fiscal Year” means any twelve –month period beginning on July 1 in any year and extending to the next succeeding June 30, both dates inclusive, or any other twelve–month period selected and designated by the City as its official fiscal year period under a Certificate of the City filed with the Trustee.
“MSRB” means the Municipal Securities Rulemaking Board, which has been designated by the Securities and Exchange Commissio n as the sole repository of disclosure information for purposes of the Rule, or any other repository of disclosure information that may be designated by the Securities and Exchange Commission as such for purposes of the Rule in the future.
“Official Statement” means the final official statement executed by the City in connection with the issuance of the Certificates.
“Participating Underwriter” means Stifel, Nicolaus & Company, Incorporated, the original underwriter of the Certificates.
“Rule” means Rule 15c2–12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as it may be amended from time to time.
“Significant Events” means any of the events listed in Section 5(a) of this Disclosure Certificate.
Section 2. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the City for the benefit of the holders and beneficial owners of the Certificates and in order to assist the Participating Underwriter in complying with S.E.C. Rule 15c2– 12(b)(5).
* Preliminary, subject to change.
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Appendix G
Section 3. Provision of Annual Reports.
(a) The City shall, or shall cause the Dissemination Agent to, not later than the Annual Report Date, commencing March 31, 2023, with the report for fiscal year 2021-22 provide to the MSRB, in an electronic format as prescribed by the MSRB, an Annual Report that is consistent with the requirements of Section 4 of this Disclosure Certificate. Not later than 15 Business Days prior to the Annual Report Date, the City shall provide the Annual Report to the Dissemination Agent (if other than the City). If by 15 Business Days prior to the Annual Report Date the Dissemination Agent (if other than the City) has not received a copy of the Annual Report, the Dissemination Agent shall contact the City to determine if the City is in compliance with the previous sentence. The Annual Report may be submitted as a single document or as separate documents comprising a package and may include by reference other information as provided in Section 4 of this Disclosure Certificate; provided that the audited financial statements of the City may be submitted separately from the balance of the Annual Report, and later than the Annual Report Date, if not available by that date. If the City’s fiscal year changes, it shall give notice of such change in the same manner as for a Significant Event under Section 5(b). The City shall provide a written certification with each Annual Report furnished to the Dissemination Agent to the effect that such Annual Report constitutes the Annual Report required to be furnished by the City hereunder.
(b) If the City does not provide (or cause the Dissemination Agent to provide) an Annual Report by the Annual Report Date, the City in a timely manner shall provide (or c ause the Dissemination Agent to provide) to the MSRB, in an electronic format as prescribed by the MSRB, a notice in substantially the form attached as Exhibit A.
(c) With respect to each Annual Report, the Dissemination Agent shall:
(i) determine each year prior to the Annual Report Date the then –applicable rules and electronic format prescribed by the MSRB for the filing of annual continuing disclosure reports; and
(ii) if the Dissemination Agent is other than the City, file a report with the City cert ifying that the Annual Report has been provided pursuant to this Disclosure Certificate, and stating the date it was provided.
Section 4. Content of Annual Reports. The City’s Annual Report shall contain or incorporate by reference the following:
(a) The City’s audited financial statements prepared in accordance with generally accepted accounting principles as promulgated to apply to governmental entities from time to time by the Governmental Accounting Standards Board. If the City’s audited financial sta tements are not available by the Annual Report Date, the Annual Report shall contain unaudited financial statements in a format similar to the financial statements contained in the final Official Statement, and the audited financial statements shall be filed in the same manner as the Annual Report when they become available.
(b) Unless otherwise provided in the audited financial statements filed on or prior to the annual filing deadline for Annual Reports provided for in Section 3 above, financial information and operating data with respect to the City for preceding fiscal year, substantially similar to that provided in the Official Statement, as follows:
(i) The principal amount of Certificates outstanding, including principal amounts and years of maturity of the Certificates, if any, called for redemption in advance of maturity; (ii) General Fund Statement of Revenues, Expenditures and Changes in Fund Balances; (iii) General Fund Balance Sheet;
(iv) General Fund Tax Revenues by Source; and
(v) Assessed Valuations.
(c) In addition to any of the information expressly required to be provided under this Disclosure Certificate, the City shall provide such further material information, if any, as may be necessary to make the specifically required statements, in the light of the circumstances under which they are made, not misleading.
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Appendix G
(d) Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues of the City or related public entities, which are available to the public on the MSRB’s Internet web site or filed with the Securities and Exchange Commission. The City shall clearly identify each such other document so included by reference.
Section 5. Reporting of Significant Events.
(a) The City shall give, or cause to be given, notice of the occurrence of any of the following Significant Events with respect to the Certificates:
(i) Principal and interest payment delinquencies;
(ii) Non–payment related defaults, if material;
(iii) Unscheduled draws on debt service reserves reflecting financial difficulties;
(iv) Unscheduled draws on credit enhancements reflecting financial difficulties;
(v) Substitution of credit or liquidity providers, or their failure to perform;
(vi) Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701 –TEB) or other material notices or determinations with respect to the tax status of the security, or other material events affecting the tax status of the security;
(vii) Modifications to rights of security holders, if material;
(viii) Bond calls, if material, and tender offers;
(ix) Defeasances;
(x) Release, substitution, or sale of property securing repayment of the securities, if material;
(xi) Rating changes;
(xii) Bankruptcy, insolvency, receivership or similar event of the City or other obligated person;
(xiii) The consummation of a merger, consolidation, or acquisition involving the City or an obligated person, or the sale of all or substantially all of the assets of the City or an obligated person (other than in the ordinary course of business), the entry into a definitive agreement to undertake such an action, or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material;
(xiv) Appointment of a successor or additional trustee or the change of name of a trustee, if material;
(xv) The incurrence of a financial obligation of the City or other obligated person, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a financial obligation of the City or other obligated person, any of which affect security holders, if material; and
(xvi) A d efault, event of acceleration, termination event, modification of terms, or other similar events under the terms of a financial obligation of the City or other obligated person, any of which reflect financial difficulties.
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(b) The City shall, or shall cause the Dissemination Agent (if not the City) to, file a notice of such occurrence with the MSRB, in an electronic format as prescribed by the MSRB, in a timely manner not in excess of 10 business days after the occurrence of the Significant Event. Notwithstanding the foregoing, notice of Significant Events described in subsection (a)(viii) above need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to holders of affected Certificates under the Trust Agreement.
(c) The City acknowledges that the events described in subparagraphs (a)(ii), (a)(vii), (a)(viii) (if the event is a bond call), (a)(x), (a)(xiii), (a)(xiv) and (a) (xv) of this Section 5 contain the qualifier “if material.” The City shall cause a notice to be filed as set forth in paragraph (b) above with respect to any such event only to the extent that the City determines the event’s occurrence is material for purposes of U.S. federal securities law. The City intends that the words used in paragraphs (xv) and (xvi) and the definition of “financial obligation” to have the meanings ascribed thereto in the Rule.
(d) For purposes of this Disclosure Certificate, any event described in paragraph (a)(xii) above is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent, or similar officer for the City or an obligated person in a proceeding under the United States Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the City or an obligated person, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subj ect to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement, or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the City.
Section 6. Identifying Information for Filings with the MSRB. All documents provided to the MSRB under this Disclosure Certificate shall be accompanied by identifying information as prescribed by the MSRB.
Section 7. Termination of Reporting Obligation. The City’s obligations under this Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Certificates. If such termination occurs prior to the final maturity of the Certificates, the City shall give notice of such termination in the same manner as for a Significant Event under Section 5(b).
Section 8. Dissemination Agent. The City may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any Dissemination Agent, with or without appointing a successor Dissemination Agent. Any Dissemination Agent may resign by providing 30 days’ written notice to the City.
Section 9. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Certificate, the City may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, provided that the following conditions are satisfied:
(a) if the amendment or waiver relates to the provisions of Sections 3(a), 4, 5(a), 5(b) or 5(c), 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 t he identity, nature, or status of an obligated person with respect to the Certificates, or type of business conducted;
(b) the undertakings herein, as proposed to be amended or waived, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the primary offering of the Certificates, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and
(c) the proposed amendment or waiver eithe r (i) is approved by holders of the Certificates in the manner provided in the Trust Agreement for amendments to the Trust Agreement with the consent of holders, or (ii) does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the holders or beneficial owners of the Certificates.
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If the annual financial information or operating data to be provided in the Annual Report is amended pursuant to the provisions hereof, the first annual financial information filed pursuant hereto containing the amended operating data or financial information shall explain, in narrative form, the reasons for the amendment and the impact of the change in the type of operating data or financial information being provided.
If an amendment is made to the undertaking specifying the accounting principles to be followed in preparing financial statements, the annual financial information for the year in which the change is made shall present a comparison between the financial statements or information prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. The comparison shall include a qualitative discussion of the differences in the accounting principles and the impact of the change in the accounting principles on the presentation of the financial information, in order to provide information to investors to enable them to evaluate the ability of the City to meet its obligations. To the extent reasonably feasible, the comparison shall be quantitative.
The Dissemination Agent shall not be obligated to enter into any amendment increasing or affecting its duties or obligations hereunder.
A notice of any amendment made pursuant to this Section 9 shall be filed in the same manner as for a Significant Event under Section 5(b).
Section 10. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the City from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Significant Event, in addition to that which is required by this Disclosure Certificate. If the City chooses to include any information in any Annual Report or notice of occurrence of a Significant Event in addition to that which is specifically required by this Disclosure Certificate, the City shall have no obligation under this Disclosure Certificate to update such information or include it in any future Annual Report or notice of occurrence of a Significant Event.
Section 11. Default. If the City fails to comply with any provision of this Disclosure Certificate, the Participating Underwriter or any holder or beneficial ow ner of the Certificates may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City to comply with its obligations under this Disclosure Certificate. A default under this Di sclosure Certificate shall not be deemed an Event of Default under the Trust Agreement, and the sole remedy under this Disclosure Certificate in the event of any failure of the City to comply with this Disclosure Certificate shall be an action to compel performance.
Section 12. Duties, Immunities and Liabilities of Dissemination Agent.
(a) Article VIII of the Trust Agreement is hereby made applicable to this Disclosure Certificate as if this Disclosure Certificate were (solely for this purpose) contained in the Trust Agreement. The Dissemination Agent shall be entitled to the protections and limitations from liability afforded to the Trustee thereunder. The Dissemination Agent shall have only such duties as are specifically set forth in this Disc losure Certificate, and the City agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which they may incur arising out of or in the exercise or performance o f its powers and duties hereunder, including the costs and expenses (including attorneys’ fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent’s negligence or willful misconduct. The Dissemination Agen t shall have no duty or obligation to review any information provided to it by the City hereunder and shall not be deemed to be acting in any fiduciary capacity for the City, the Bond holders or any other party. The obligations of the City under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Certificates.
(b) The Dissemination Agent shall be paid compensation by the City for its services provided hereunder in accordance with its schedule of fees as amended from time to time, and shall be reimbursed for all expenses, legal fees and advances made or incurred by the Dissemination Agent in the performance of its duties hereunder.
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Section 13. Beneficiaries. This Disclosure Certificate shall inure solely to the be nefit of the City, the Dissemination Agent, the Participating Underwriter and the holders and beneficial owners from time to time of the Certificates and shall create no rights in any other person or entity.
Section 14. Counterparts. This Disclosure Certificate may be executed in several counterparts, each of which shall be regarded as an original, and all of which shall constitute one and the same instrument.
Date: [Closing Date]
CITY OF MARINA
By
Name
Title
ACKNOWLEDGED:
_________________, as Dissemination Agent
By
Authorized Officer
EXHIBIT F
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Appendix G
EXHIBIT A
NOTICE TO MSRB OF FAILURE TO FILE ANNUAL REPORT
Name of Obligor: City of Marina
Name of Issue: $______ Certificates of Participation (2022 Transportation Infrastructure Financing Project) Evidencing Direct, Undivided Fractional Interests of the Owners Thereof in Lease Payments to be made by the City of Marina, as the Rental for Certain Property Pursuant to a Lease Agreement with the Public Property Financing Corporation of California
Date of Issuance: [Closing Date]
NOTICE IS HEREBY GIVEN that the Obligor has not provided an Annual Report with respect to the above- named Issue as required by the Continuing Disclosure Certificate, dated [Closing Date], furnished by the Obligor in connection with the Issue. The Obligor anticipates that the Annual Report will be filed by _________________.
Date: ________________
_________________, as Dissemination Agent
By
Authorized Officer
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Quint & Thimmig LLP 03/11/22
03/31/22
13072.01
CONTINUING DISCLOSURE CERTIFICATE
This
CONTINUING DISCLOSURE CERTIFICATE (the “Disclosure Certificate”) is executed and delivered by the CITY OF MARINA (the “City”) in connection with the execution and delivery of $______ Certificates of Participation (2022 Transportation Infrastructure Financing Project) (the “Certificates”). The Certificates are being executed and delivered pursuant to a Trust Agreement, dated as of June 1, 2022 , by and among U.S. Bank Trust Company, National Association , as trustee (the “Trustee”), the City and the Public Property Financing Corporation of California (the “Trust Agreement”). Pursuant to Section 11.08 of the Trust Agreement, the City covenants and agree as follows:
Section 1. Definitions. In addition to the definitions set forth above and in the Trust Agreement which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section 1, the following capitalized terms shall have the following meanings:
“Annual Report ” means any Annual Report provided by the City pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate. “Annual Report Date” means the date that is nine months after the end of the City’s fiscal year (currently March 31 based on the City’s fiscal year end of June 30). “Dissemination Agent” shall mean, initially, Applied Best Practices, LLC , doing business as Applied Best Practices, or any successor Dissemination Agent designed in writing by the City and which has been filed with the then current Dissemination Agent a written acceptance of such designation.
“Fiscal Year ” means any twelve– month period beginning on July 1 in any year and extending to the next succeeding June 30, both dates inclusive, or any other twelve –month period selected and designated by the City as its official fiscal year period under a Certificate of the City filed with the Trustee.
“MSRB” means the Municipal Securities Rulemaking Board, which has been designated by the Securities and Exchange Commission as the sole repository of disclosure information for purposes of the Rule, or any other repository of disclosure information that may be designated by the Securities and Exchange Commission as such for purposes of the Rule in the future. “Official Statement” means the final official statement executed by the City in connection with the issuance of the Certificates.
“Participating Underwriter” means Stifel, Nicolaus & Company, Incorporated, the original underwriter of the Certificates.
“Rule” means Rule 15c2– 12(b)(5) adopted by the Securities and Exchange Commissio n under the Securities Exchange Act of 1934, as it may be amended from time to time. “Significant Events ” means any of the events listed in Section 5(a) of this Disclosure Certificate.
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Section 2. Purpose of the Disclosure Certificate . This Disclosure Certificate is being executed and delivered by the City for the benefit of the holders and beneficial owners of the Certificates and in order to assist the Participating Underwriter in complying with S.E.C. Rule 15c2– 12(b)(5).
Section 3. Provision of Annual Reports.
(a) The City shall, or shall cause the Dissemination Agent to, not later than the Annual Report Date, commencing March 31, 202 3, with the report for fiscal year 2021-22 provide to the MSRB, in an electronic format as prescri bed by the MSRB, an Annual Report that is consistent with the requirements of Section 4 of this Disclosure Certificate. Not later than 15 Business Days prior to the Annual Report Date, the City shall provide the Annual Report to the Dissemination Agent (if other than the City). If by 15 Business Days prior to the Annual Report Date the Dissemination Agent (if other than the City) has not received a copy of the Annual Report, the Dissemination Agent shall contact the City to determine if the City is in compliance with the previous sentence. The Annual Report may be submitted as a single document or as separate documents comprising a package and may include by reference other information as provided in Section 4 of this Disclosure Certificate; provided that th e audited financial statements of the City may be submitted separately from the balance of the Annual Report, and later than the Annual Report Date, if not available by that date. If the City’s fiscal year changes, it shall give notice of such change in the same manner as for a Significant Event under Section 5(b). The City shall provide a written certification with each Annual Report furnished to the Dissemination Agent to the effect that such Annual Report constitutes the Annual Report required to be furnished by the City hereunder.
(b) If the City does not provide (or cause the Dissemination Agent to provide) an Annual Report by the Annual Report Date, the City in a timely manner shall provide (or cause the Dissemination Agent to provide) to the MSRB, in an electronic format as prescribed by the MSRB, a notice in substantially the form attached as Exhibit A.
(c) With respect to each Annual Report, the Dissemination Agent shall:
(i) determine each year prior to the Annual Report Date the then–applicable rules and electronic format prescribed by the MSRB for the filing of annual continuing disclosure reports; and
(ii) if the Dissemination Agent is other than the City, file a report with the City certifying that the Annual Report has been provided pursuant to this Disclosure Certificate, and stating the date it was provided.
Section 4. Content of Annual Reports . The City’s Annual Report shall contain or incorporate by reference the following:
(a) The City’s audited financial statements prepared in accorda nce with generally accepted accounting principles as promulgated to apply to governmental entities from time to time by the Governmental Accounting Standards Board. If the City’s audited financial statements are not available by the Annual Report Date, the Annual Report shall contain unaudited financial statements in a format similar to the financial statements contained in the final Official Statement, and the audited financial statements shall be filed in the same manner as the Annual Report when they become available.
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(b) Unless otherwise provided in the audited financial statements filed on or prior to the annual filing deadline for Annual Reports provided for in Section 3 above, financial information and operating data with respect to the City for preceding fiscal year, substantially similar to that provided in the Official Statement, as follows:
(i) The principal amount of Certificates outstanding, including principal amounts and years of maturity of the Certificates, if any, called for redemption in advance of maturity;
(ii) General Fund Statement of Revenues, Expenditures and Changes in Fund Balances;
(iii) General Fund Balance Sheet;
(iv) General Fund Tax Revenues by Source; and
(v) Assessed Valuations.
(c) In addition to any of the information expressly required to be provided under this Disclosure Certificate, the City shall provide such further material information, if any, as may be necessary to make the specifically required statements, in the light of the circumstances under which they are made, not misleading.
(d) Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues of the City or related public entities, which are available to the public on the MSRB’s Internet web site or filed with the Securities and Exchange Commission. The City shall clearly identify each such other document so included by reference.
Section 5. Reporting of Significant Events.
(a) The City s hall give, or cause to be given, notice of the occurrence of any of the following Significant Events with respect to the Certificates:
(i) Principal and interest payment delinquencies;
(ii) Non–payment related defaults, if material;
(iii) Unscheduled draws on debt service reserves reflecting financial difficulties;
(iv) Unscheduled draws on credit enhancements reflecting financial difficulties;
(v) Substitution of credit or liquidity providers, or their failure to perform;
(vi) Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701–TEB) or other material notices or determinations with respect to the tax status of the security, or other material events affecting the tax status of the security;
(vii) Modifications to rights of security holders, if material;
(viii) Bond calls, if material, and tender offers;
(ix) Defeasances;
(x) Release, substitution, or sale of property securing repayment of the securities, if material;
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(xi) Rating changes;
(xii) Bankruptcy, insolvency, receivership or similar event of the City or other obligated person;
(xiii) The consummation of a merger, consolidation, or acquisition involving the City or an obligated person, or the sale of all or substantially all of the assets of the City or an obligated person (other than in the ordinary course of business), the entry into a definitive agreement to undertake such an action, or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material;
(xiv) Appointment of a successor or additional trustee or the change of name of a trustee, if material;
(xv) The incurrence of a financial obligation of the City or other obligated person, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a financial obligation of the City or other obligated person, any of which affect security holders, if material; and
(xvi) A default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a financial obligation of the City or other obligated person, any of which reflect financial difficulties.
(b) The City shall, or shall cause the Dissemination Agent (if not the City) to, file a notice of such occurrence with the MSRB, in an electronic format as prescribed by the MSRB, in a timely manner not in excess of 10 business days after the occurrence of the Significant Event.
Notwithstanding the foregoing, notice of Significant Events described in subsection (a)(viii) above need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to holders of affected Certificates under the Trust Agreement.
(c) The City acknowledges that the events described in subparagraphs (a)(ii), (a)(vii), (a)(viii) (if the event is a bond call), (a)(x), (a)(xiii), (a)(xiv) and (a) (xv) of this Section 5 contain the qualifier “if material.” The City shall cause a n otice to be filed as set forth in paragraph (b) above with respect to any such event only to the extent that the City determines the event’s occurrence is material for purposes of U.S. federal securities law. The City intends that the words used in paragraphs (xv) and (xvi) and the definition of “financial obligation” to have the meanings ascribed thereto in the Rule.
(d) For purposes of this Disclosure Certificate, any event described in paragraph (a)(xii) above is considered to occur when any of the foll owing occur: the appointment of a receiver, fiscal agent, or similar officer for the City or an obligated person in a proceeding under the United States Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the City or an obligated person, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to t he supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement, or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the City.
Section 6. Identifying Information for Filings with the MSRB. All documents provided to the MSRB under this Disclosure Certificate shall be accompanied by identifying information as prescribed by the MSRB.
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Section 7. Termination of Reporting Obligation . The City’s obligations under this Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Certificates. If such termination occurs prior to the fina l maturity of the Certificates, the City shall give notice of such termination in the same manner as for a Significant Event under Section 5(b).
Section 8. Dissemination Agent. The City may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any Dissemination Agent, with or without appointing a successor Dissemination Agent. Any Diss emination Agent may resign by providing 30 days’ written notice to the City.
Section 9. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Certificate, the City may amend this Disclosure Certificate, and any provision of this Disclo sure Certificate may be waived, provided that the following conditions are satisfied:
(a) if the amendment or waiver relates to the provisions of Sections 3(a), 4 , 5(a), 5(b) or 5(c), it may only be made in connection with a change in circumstances that a rises 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 Certificates, or type of business conducted;
(b) the undertakings herein, as proposed to be amended or waived , would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the primary offering of the Certificates, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and
(c) the proposed amendment or waiver either (i) is approved by holders of the Certificates in the manner provided in the Trust Agreement for amendments to the Trust Agreement with the consent of holders, or (ii) does not, in t he opinion of nationally recognized bond counsel, materially impair the interests of the holders or beneficial owners of the Certificates.
If the annual financial information or operating data to be provided in the Annual Report is amended pursuant to the provisions hereof, the first annual financial information filed pursuant hereto containing the amended operating data or financial information shall explain, in narrative form, the reasons for the amendment and the impact of the change in the type of operating data or financial information being provided.
If an amendment is made to the undertaking specifying the accounting principles to be followed in preparing financial statements, the annual financial information for the year in which the change is made shall present a comparison between the financial statements or information prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. The comparison shall include a qualitative discussion of the differences in the accounting principles and the impact of the change in the accounting principles on the presentation of the financial information, in order to provide information to investors to enable them to evaluate the ability of the City to meet its obligations. To the extent reasonably feasible, the comparison shall be quantitative.
The Dissemination Agent shall not be obligated to enter into any amendment increasing or affecting its duties or obligations hereunder.
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A notice of any amendment made pursuant to this Section 9 shall be filed in the same manner as for a Significant Event under Section 5(b).
Section 10. Additional Information . Nothing in this Disclosure Certificate shall be deemed to prevent the City from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Significant Event, in addition to that which is r equired by this Disclosure Certificate. If the City chooses to include any information in any Annual Report or notice of occurrence of a Significant Event in addition to that which is specifically required by this Disclosure Certificate, the City shall have no obligation under this Disclosure Certificate to update such information or include it in any future Annual Report or notice of occurrence of a Significant Event.
Section 11. Default. If the City fails to comply with any provision of this Disclosure Certificate, the Participating Underwriter or any holder or beneficial owner of the Certificates may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City to comply with its obligations under this Disclosure Certificate. A default under this Disclosure Certificate shall not be deemed an Event of Default under the Trust Agreement, and the sole remedy under this Disclosure Certificate in the event of any failure of the City to comply with this Disclosure Certificate shall be an action to compel performance.
Section 12. Duties, Immunities and Liabilities of Dissemination Agent.
(a) Article VIII of the Trust Agreement is hereby made applicable to this Disclosure Certificate as if this Disclosure Certificate were (solely for this purpose) contained in the Trust Agreement. The Dissemination Agent shall be entitled to the protections and limitations from liability afforded to the Trustee thereunder. The Dissemination Agent shall h ave only such duties as are specifically set forth in this Disclosure Certificate, and the City agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which they may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys’ fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent’s negligence or willful misconduct. The Dissemination Agent shall have no duty or obligation to review any information provided to it by the City hereunder and shall not be deemed to be acting in any fiduciary capacity for the City, the Bond holders or any other party. The obligations of the City under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Certificates.
(b) The Dissemination Agent shall be paid compensation by the City for its services provided hereunder in accordance with its schedule of fees as amended from time to time, and shall be reimbursed for all expenses, legal fees and advances made or incurred by the Dissemination Agent in the performance of its duties hereunder.
Section 13. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the City, the Dissemination Agent, the Participating Underwriter and the holders and beneficial owners from time to time of the Certificates and shall create no rights in any other person or entity.
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Section 14. Counterparts. This Disclosure Certificate may be exe cuted in several counterparts, each of which shall be regarded as an original, and all of which shall constitute one and the same instrument.
Date: June 16, 2022
CITY OF MARINA
By
Name
Title
ACKNOWLEDGED:
APPLIED BEST PRACTICES, LLC, as
Dissemination Agent
By
Authorized Officer
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247
Exhibit A
EXHIBIT A
NOTICE TO MSRB OF FAILURE TO FILE ANNUAL REPORT
Name of Obligor: City of Marina
Name of Issue: $______ Certificates of Participation (2022 Transportation Infrastructure Financing Project ) Evidencing Direct, Undivided Fractional Interests of the Owners Thereof in Lease Payments to be made by the City of Marina, as the Rental for Certain Property Pursuant to a Lease Agreement with the Public Property Financing Corporation of California
Date of Issuance: June 16, 2022
NOTICE IS HEREBY GIVEN that the Obligor has not provided an Annual Report with respect to the above -named Issue as required by the Continuing Disclosure Certificate, dated June 16, 2022, furnished by the Obligor in connection with the Issue. The Obligor anticipates that the Annual Report will be filed by _________________.
Date: ________________
APPLIED BEST PRACTICES, LLC, as
Dissemination Agent
By
Authorized Officer
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248
May 12, 2022 Item No. 11d
Honorable Mayor and Members City Council Meeting
of the Marina City Council of May 17, 2022
CITY COUNCIL CONSIDER ADOPTING RESOLUTION NO. 20 22-,
AMENDING THE RATE ADJUSTMENT CALCULATION OF THE
FRANCHISE AGREEMENT WITH GREEN WASTE RECOVERY
UTILIZING A SECTOR SPECIFIC UNIFORM PERCENTAGE
ADJUSTMENT AND APPROVING MAXIMUM RATES TO BE
CHARGED BY GREENWASTE RECOVERY EFFECTIVE JULY 1, 20 22
FOR COLLECTION OF FRANCHISED SOLID WASTE, RECYCLING,
AND ORGANICS.
REQUEST:
It is requested that the City Council consider:
1. Adopting Resolution No. 20 22- amending the rate adjustment calculation of the franchise agreement with Green Waste Recovery utilizing a sector specific uniform percentage adjustment and approving maximum rates to be charged by Gre en Waste Recovery effective July 1, 2022 for collection of franchised solid waste, recycling, and organics.
BACKGROUND:
On August 19, 2014 , the City Council adopted Resolution No. 2014 -98, and entered into a new exclusive 15 -year Franchise Agreement with Green Waste Recovery (GRW) to provide solid waste, recycling, and organics collection services for the City of Marina. The Agreement provides for automatic annual rate adjustments for GWR’s services calculated following either a multi-index rate adjustment methodology or a cost-based rate adjustment methodology.
On November 2, 20 21, the City Council adopted Resolution No. 20 21-114, approving an amendment to the Franchise Agreement with Green Waste Recovery (GRW) to incorporate changes required by Sena te B ill 1383 (SB 1383) to divert organic waste from landfills. The amended Agreement retained provisions for automatic annual rate adjustments for GWR’s services calculated following either a multi -index rate adjustment methodology or a cost -based rate adjustment methodology.
Cost-based Rate Adjustment Methodology
The cost-based adjustment involves an extensive and detailed review of GWR’s actual cost of operations, changes in inflation, the number of customers, and the service level provided and comparing t his to actual gross receipts collected to determine GWR’s compensation for the current rate period and to forecast the future rates. The cost to perform this review is estimated at $50,000 - $100,000 (which cost w ould be passed onto the rate payer) . A cost-based rate adjustment was performed for rate period 5 in 2019 . Adjustments to the GreenWaste compensation resulted in rate-payer surplu ses of $540,298 in rate perio d 5 , $258,203 in rate period 6, and $175,891 in rate period 7. As a result of the surpluses, rates for marina customers have been fixed at the rates set in 2018.
Multi-index Rate Adjustment Methodology
Each service level rate in the Franchise Agreement rate schedule is comprised of an oper ating component, disposal/processing component and a fee component. The annual rate adjustment consists of adjusting each of the rate components as follows:
1 Operating Component Factor:
• Labor Component: Labor costs from the prior year are adjusted by the a nnual percentage change in the Employment Cost Index (ECI)
• Fuel Component: Fuel costs from the prior year are adjusted by the actual volume of fuel purchased in the prior year and the annual percentage change in the Fuel Index • Other Component: Non labor/fuel related costs from the prior year are adjusted by the annual percentage change of the Consumer Price Index (CPI) Disposal/Processing Component : This component is automatically adjusted as a direct pass - through based on MRWMD fees and the City’s pri or year’s tonnages by material type. The disposal and processing component(s) are based on th e difference between the City’s actual tonnage by material type and what was proposed by GWR in their initial proposal to the City.
The disposal and processing components also consider the tipping fee charged by the Monterey Regional Waste Management Distr ict (MRWMD). At their meeting on May 18 th, 2018 , the MRWMD Board of Directors considered a 7% increase on tipping fees . The public hearing on rate increases is likely to be held at the June 17th, 2022 MRWMD Board of Directors meeting.
The proposed tipping fee increase has been factored into the proposed fee increase for GWR customers. MRWMD rationale for the increased tipping fees is to cover the increased cost due to SB 1383, supply chain and labor cost increases over the past 2 years.
Fee Component : This comp onent is a direct pass through of Franchise fees, calculated as a percent of the total rate by service level.
The rate adjustment for the 20 22/2023 fiscal year was conducted using a variation of the multi- index methodology which was distributed across sect ors by weighted averages in accordance with the methodology agreed upon in 2016 . The changes implemented in 2016 allow for a uniform percentage increase for services.
The Franchise Agreement stipulates that the City of Marina shall make a good faith effort to approve the accuracy of the calculated rates by June 1 of each year, and such ra tes shall be effective on each subsequent July 1. This allows noticing all customers of rate increases. If rates are not effective by July 1 due to a delay caused solely by the City of Marina, GWR may retroactively bill customers for the amount of the rate increase.
ANALYSIS:
GWR provided the City, by way of HF&H Consultants (who represents the City), with the annual rate adjustment calculation (“EXHIBIT B”). “EXHIBIT A” is an executive summary from HF&H reporting the finding that the application for the annual rate adjustment by GWR is consistent with the methodology approved in the prior year.
At the September 15th, 2020 meeting, City Council asked staff to analyze an equitable method of returning the surplus from rate periods 5 and 6 to the rate-payers that paid into the surplus. Staff requested a proposal from HF&H to analyze historical customer data which has been p rovided by GWR. Approval of an agreement with HF&H to p erform this work is an item on tonight’s City Council agenda. If approved, the analysis will be performed over the next few weeks and staff will return with recomme ndations. This process is not tied to the rate increase deadline of July 1st.
Subsequently, a surplus of $175,891 was generated in rate period 7. Given the increase s due to SB 1 383, staff is recommending that the rate period 7 surplus be used to offset rate incre ases over the next two years. Applying $89,227 of the surplus reduces the rate period 8 rate increase from 5.82% to 3.10%.
2 Staff is recommending the sector-based adjustment be used for calculating rates for 2022/2023 in keeping with the methodology approved in 2016.
At the November 2nd, 2021 meeting, City Council expressed an interest in a senior rate structure that is not income qualified . City staff requested that HF&H estimate the impact of creating a discounted rate for senior citizens with 32-gallon waste container service . HF&H modeled the effects of the discount at either a 20% rate reduction, aligning with the CARE program, or a 50% rate reduction. To provide the discounted rate, the other classes would have an additional rate increase above the index rate adjustment to subsidize the loss of revenue from the migratio n to discounted service.
HF&H pulled population data from the United States Census Bureau for the City of Marina to estimate the percentage of the population eligible for the senior discount (+65 years old) o f
13.8%. Using the City’s quarterly reports, HF&H applied the senior popu lation percentage across the residential cart subscription levels to estimate the maximum number of customers that could migrate from standard to discounted service. By calculating th e difference from the standard to the discounted rates, multiplied by the number of eligible customers, HF&H was able to estimate the additional revenue required for the subsidy of these discounted rates.
For a 20% senior discount, an additional $52,311 ( a 1.35% additional rate increase) would need to be subsidized by the othe r rate classes. For a 50% senior discount, an additional $92,145 (a
2.39% additional rate increase) would be subsidized by the other rate classes.
FISCAL IMPACT:
The FY2022/2023 proposed rate adjustment woul d have no effect on City expenses, as this is a cost to the rate payers. The Franchise Agreement has a 15% franchise fee of gross receipts. Any rate increase provides a corresponding increase in franchise fee revenue to the City.
CONCLUSION:
This request is submitted for City Council consideration and possible action.
Respectfully submitted,
____________________________
Brian McMinn, P.E., P.L.S.
Public Works Director/City Engineer
City of Marina
REVIEWED/CONCUR:
____________________________
Layne Long
City Manager
City of Marina
3 RESOLUTION NO. 2022-
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MARINA AMENDING THE
RATE ADJUSTMENT CALCULATION OF THE FRANCHISE AGREEMENT WITH
GREEN WASTE RECOVERY UTILIZING A SECTOR SPECIFIC UNIFORM
PERCENTAGE ADJUSTMENT AND APPROVING MAXIMUM RATES TO BE CHARGED BY GREENWASTE RECOVERY EFFECTIVE JULY 1, 2022, FOR COLLECTION OF FRANCHISED SOLID WASTE, RECYCLING, AND ORGANICS.
WHEREAS, the City of Marina entered into a franchise agreement with GreenWaste Recovery (GWR) on August 19, 2014 for solid waste, recycling, and organics collection services for the period of August 1, 2015 through July 31, 2030, and;
WHEREAS, Section 8. 2 of the Franchise Agreement describes the process for an automatic annual adjustment to maximum customer rates on July 1 of each year, based on agreed upon cost indices, changes in tipping fees as the Monterey Regiona l Waste Management District, and the a ctual tonnage for materials collected by GWR, and;
WHEREAS, on November 2, 2021, the City Council adopted Resolution No. 2021 -114, approving an amendment to the Franchise Agreement with Green Waste Recovery (GRW) to i ncorporate c hanges required by Senate Bill 1383 (SB 1383) to divert organic waste from landfills. The amended Agreement retained provisions for automatic annual rate adjustments for GWR’s services calculated following either a multi-index rate adjustment methodology or a cost-based rate adjustment methodology, and;
WHEREAS, a cost-based rate adjustment was performed for rate period 5 in 2019. Adjustments to the GreenWaste compensation resulted in rate-payer surpluses of $540,298 in rate period 5, $258,203 in rate period 6, a nd $175,891 in rate period 7. As a result of the surpluses, rates for marina customers have been fixed at the rates set in 2018.
WHEREAS, City staff and third party consultant, HF&H, have reviewed GWR’s calculation of the rate adjustments for FY 2022/2023 and finds the calculations to be accurate and consistent with the methodology and requirements of the franchise agreement, and;
WHEREAS, given the increases due to SB 1383, staff is recommending that the rate period 7 surplus be used to offset rate increases over the next two years. Applying $89,227 of the surplus reduces the rate period 8 rate increase from 5.82% to 3.10%.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Marina hereby resolves to approve the rates in Exhibit B that incorporate a 3.1% increase to all single family residential maximum rates authorized to be charged by GWR under the Franchise Agreement, effective July 1, 2022.
PASSED AND ADOPTED by the City Council of the City of Marina at a regular meeting duly held on the 17th day of May 2022, by the following vote:
AYES: COUNCIL MEMBERS:
NOES: COUNCIL MEMBERS:
ABSENT: COUNCIL MEMBERS:
ABSTAIN: COUNCIL MEMBERS:
Bruce C. Delgado, Mayor
ATTEST:
Anita Sharp, Deputy City Clerk
4 EXHIBIT A
5 6
7 8
9 10
EXHIBIT B
11 12