Agenda packet — Milpitas City Council, February 15, 2022 (part 4 of 4)

570

ESSENTIAL HOUSING RENT SAVINGS
80% 100% 120% TOTAL SAVINGS TARGET UNITS PER BUCKET
Market Rents (per
Costar data) as of: Market Rent* Asking Rent Rent Savings From Market
Max Allowable
Authority Rent
VAR between
Max and Asking Market Rent* Asking Rent Rent Savings From Market
Max Allowable
Authority Rent
VAR between
Max and Asking Market Rent* Asking Rent Rent Savings From Market
Max Allowable
Authority Rent
VAR between
Max and Asking
Monthly Rent
Savings Per Unit
vs. Market Rents
Yearly Rent
Savings Per Unit
% Savings off
Market
Total Savings per
Year

ASSET / UNIT COUNT
11/30/2021 777 Place
50% AMI instead of 80%
1 BR (346 Units) $2,045 $1,380 $665 $1,380 ($0) $2,045 $1,475 $570 $2,759 $1,284 $2,045 $1,522 $523 $3,311 $1,789 2 BR (126 Units) $2,428 $1,552 $876 $1,552 ($0) $2,428 $1,935 $493 $3,103 $1,168 $2,428 $1,996 $432 $3,724 $1,728 AVG $2,147 $1,426 $721 $1,426 ($0) $2,147 $1,598 $549 $2,851 $1,253 $2,147 $1,649 $499 $3,421 $1,773 $590 $7,083 27.49% $3,343,139 11/23/2021 Westgate I
96 BMR units at the property, accounted for in
80% "Asking Rent".
0 BR (96 Units) $2,521 $1,399 $1,122 $1,932 $533 $2,521 $2,233 $288 $2,415 $182 $2,521 $2,279 $242 $2,898 $619 1 BR (207 Units) $2,792 $1,588 $1,205 $2,207 $619 $2,792 $2,759 $33 $2,759 $0 $2,792 $2,892 ($100) $3,311 $419 2 BR (177 Units) $3,717 $1,740 $1,977 $2,483 $743 $3,717 $3,103 $614 $3,103 $0 $3,717 $3,724 ($7) $3,724 $0 AVG $3,138 $1,630 $1,509 $2,290 $660 $3,138 $2,843 $295 $2,862 $19 $3,138 $3,165 ($27) $3,435 $270 $696 $8,356 22.19% $4,011,054 TOTAL SAVINGS $689 $8,271 22.81% $30,602,303

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571

Appendix C

Waterford / CSCDA Essential Housing Proposal – Turing – Milpitas, CA

572
“MIDDLE INCOME”

WORKFORCE HOUSING PROGRAM
100 BAYVIEW CIRCLE, SUITE 4500
NEWPORT BEACH, CA 92660
949.529.3530
WWW.WATERFORDCO.COM
573

PROJECT TEAM

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WATERFORD PROPERTY COMPANY
➢ Waterford Property Company “Waterford” is an experienced owner and developer of institutional “Class A” multifamily rental projects throughout the State of California. Since its founding in 2014, Waterford has acquired over $2.8 billion in real estate assets. ➢ Waterford is an expert in the development of affordable housing. Sean Rawson, Co-Owner of Waterford, has developed and has been a principal and owner of over 3,000 affordable residential units during his career.
➢ Since 2021, Waterford has closed and acquired over $2 billion across 15 Class-A multifamily assets (4,014 units) in California cities through the middle-income housing program.

CALIFORNIA STATEWIDE COMMUNITIES DEVLOPMENT AUTHORITY (CSCDA) ➢ The CSCDA was created in 1988 by the League of California Cities and California State Association of Counties, under California’s Joint Exercise of Powers Act, to provide California’s local governments with an effective tool for the timely financing of community based public benefits projects. ➢ The CSCDA has 533 member cities as well as counties and special districts throughout California. CSCDA helps local governments build community infrastructure, provide affordable housing, create jobs and provide access to quality healthcare. CSCDA has issued over $63 billion in bonds for local governments throughout California.

GOLDMAN SACHS
➢ Goldman Sachs is an expert in municipal bond offerings for public infrastructure and housing projects. ➢ In 2021 alone, Goldman Sachs led or passively managed the underwriting of $76.5 billion of municipal bond offerings. ➢ Goldman Sachs will be the lead investment banker and underwriter for the project.

GREYSTAR
➢ Greystar operates in more than 210 markets globally with approximately a 748,000-unit portfolio. In California alone, Greystar has 116,286 units under management. ➢ Greystar will serve as Property Manager following the acquisition of the project. 574

CRISIS, CAUSE, SOLUTION

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(THE CRISIS) CALIFORNIA HAS FAILIED ITS MIDDLE-
INCOME WORKFORCE…
❑ Our nurses, teachers, librarians, bank tellers, first responders and civil servants earn above “very low” and “low” income households, yet are still priced out of the communities they serve
❑ The ripple effects of these housing shortfalls include congestion, pollution, crime, homelessness, health issues, poor student performance and social unrest and dislocation
❑ The effects of the dislocation of “middle income” employees is harmful to California employers, as they may have positions that go unfilled cost impacts of workers commutes.
(THE CAUSE) CALIFORNIA’S MIDDLE-INCOME
HOUSING CRISIS IS COMPLEX…
❑ Restrictive land use policies
❑ Organized Not In My Back Yard (NIMBY) policies
❑ Record high construction costs
❑ Widening income inequality
❑ Insufficient housing choices
❑ Nonexistent middle-income housing supply
(THE SOLUTION) WATERFORD’S BEST IN CLASS

TEAM TO PROVIDE INNOVATIVE HOUSING
SOLUTIONS TO CALIFORNIA’S SUPPLY PROBLEM…
✓ Preserve Existing Tenant Population
✓ Create “Middle Income” Housing with no public
subsidies and no equity investments
✓ Restrict Annual rent increased to 4%
✓ Impose “Middle Income” Regulatory Agreements
575

TARGET DEMOGRAPHIC

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THE “MISSING-MIDDLE”
➢ California has a significant shortage of available essential housing for the “Missing Middle”. These are individuals and families that earn too much to qualify for traditional affordable housing, but not enough to afford the market rate rents within the communities they work and serve.
➢ Essential housing (also known as moderate-income housing) is housing for individuals and families earning between 80% and 120% of the Area Median Income (AMI).
➢ Typically, the “Missing Middle” is the most difficult segment of the population to provide housing for because the rents are not low enough to make projects eligible for government subsidies, but the rents are still too low to justify the construction costs. 576

OVERVIEW OF ESSENTIAL HOUSING PROGRAM

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PROCESS
➢ CSCDA and its Projects Administrator (Waterford) acquires new or existing rental multifamily communities and records a regulatory agreement restricting rents to the property between 80% and 120% AMI
➢ All properties are financed through CSCDA tax exempt governmental bonds ➢ The City enters into a Public Benefits Agreement whereby the City (along with the County and School District) receive all surplus revenue upon the sale of the property.

PROPERTY TARGETS
➢ CSCDA and its Projects Administrator (Waterford) plan to acquire Class A or B existing multifamily properties in core supply-constrained markets targeted to the “Missing Middle” while maintaining their Class A or B designation
➢ All properties will be professionally managed and be operated as if there is no “income restriction” in place
➢ Since all residual cash flow will be used to pay down the outstanding balance and because the local government is the ultimate financial beneficiary to all developed equity in the asset, Waterford and its team will have ample capital to reinvest back into the property and guarantee that all properties are operated in a best -in-class manner CAMEO
262 UNITS - ORANGE, CA

OCEANAIRE
216 UNITS - LONG BEACH, CA

THE PARAMOUNT
400 UNITS - ANAHEIM, CA
577

OVERVIEW OF WATERFORD ESSENTIAL HOUSING

PORTFOLIO

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➢Total Waterford Essential Housing Communities in CA: 15 ➢Total Waterford Essential Housing Units: 4,014

THE PARAMOUNT
400 UNITS - ANAHEIM, CA
RENT SAVINGS / YEAR: $5,419,765

PARALLEL
386 UNITS - ANAHEIM, CA
RENT SAVINGS / YEAR: $4,356,407
ALTANA
507 UNITS - GLENDALE, CA
RENT SAVINGS / YEAR: $3,474,867

WESTGATE (PHASES II & III)
340 UNITS - PASADENA, CA
RENT SAVINGS / YEAR: $2,683,740

THE HUDSON
173 UNITS - PASADENA, CA
RENT SAVINGS / YEAR: $1,332,102

OCEANAIRE
216 UNITS - LONG BEACH, CA
RENT SAVINGS / YEAR: $1,652,548
CAMEO
262 UNITS - ORANGE, CA
RENT SAVINGS / YEAR: $793,180

GARRISON
94 UNITS - ORANGE, CA
RENT SAVINGS / YEAR: $311,878
THEO
105 UNITS - PASADENA, CA
RENT SAVINGS / YEAR: $458,223
1818
265 UNITS - ANAHEIM, CA
RENT SAVINGS / YEAR: $2,755,032
ALTANA
507 UNITS - GLENDALE, CA

WESTGATE (PHASE I)
480 UNITS - PASADENA, CA
RENT SAVINGS / YEAR: $3,997,061
777 PLACE
472 UNITS - POMONA, CA
RENT SAVINGS / YEAR: $3,343,139
ALCOVE
112 UNITS - ESCONDIDO, CA
RENT SAVINGS / YEAR: $376,954
ROWAN
126 UNITS - ESCONDIDO, CA
RENT SAVINGS / YEAR: $390,887
HAVEN76
76 UNITS - ESCONDIDO, CA
RENT SAVINGS / YEAR: $283,109
578

FLOW CHART OF MIDDLE-INCOME TRANSACTIONS

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A California City
Joins CSCDA
Community
Improvement
Authority (the
“Authority”)
CSCDA acquires a
market-rate
multifamily
project in that City
CSCDA finances
the property with
municipal bonds
CSCDA limits the
rents to 80 - 120%
AMI household
affordability levels
(set periodically
by the county)
Waterford, with its
best-in-class asset
management
team, operates the
property and acts
as the Project
Administrator
1 2 3 4 5
579

PUBLIC BENEFITS TO CITY

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HOUSING POLICY
➢ Since 2012, the cost to build multifamily projects in California has risen nearly 40% ➢ In order to make new multifamily projects financially feasible, developers have continued to increase rents at record levels.Average rent growth in California was +42% in the last 8 years. Statewide rent growth is projected to average +12% from June 2021 – June 2022 alone ➢ In urban and suburban areas where developable land is scarce and higher density construction is required, the only way to make multifamily projects viable is to utilize Low Income Housing Tax Credits (LIHTC) for “low” and “very low” income households or build project that target households earning in excess of 120% AMI
➢ The result is the creation of very few 80% to 120% AMI residential units

FINANCIAL BENEFITS
➢ Under the Public Benefit Agreement, the City, at its sole discretion, may force a sale of the property between Year 15 and Year 30 (the end of the life) of the bonds, and the City, along with other taxing agencies (including the County and School District) would receive the net sale proceeds. ➢ All properties are financed through the issuance of tax-exempt bonds and have no equity partners which means that after paying off the bond payments upon a sale, all excess sales proceeds go to the City and other taxing agencies.

COMMUNITY BENEFITS
➢ Cities can provide much needed “middle income” housing without using financial resources to build it ➢ Cities will reap large financial windfalls starting in Year 15 and can be accessed at their discretion ➢ Cities will ensure that all properties in the program are operated to highest standards and best practices because all excess cash flow after servicing the bonds will be invested back into the assets
580

CITY CONTROL

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OWNERSHIP
➢ Assets are owned by CSCDA and Waterford is the Project Administrator ➢ Waterford will oversee all operations of the assets and maintain the business plan in conjunction with its property manager

FINANCIAL REPORTING
➢ CSCDA shall provide annual reports to the City regarding the status of its acquisition, financing and operation of property ➢ City is allowed to review and audit all financials for the property

PUBLIC BENEFIT AGREEMENT
➢ The City, at its sole discretion, may force a sale of the assets of the property between Year 15 and Year 30 ➢ The project is financed through the issuance of limited obligation bonds; bonds issued will be indebtedness solely for the Authority, and payable from revenues of the project.
➢ No financial expenditures, liabilities, or obligations are created by joining the Authority or executing the public benefit agreement.

REGULATORY AGREEMENT
➢ Restrict occupancy to moderate income households or lower (80%-120% AMI) ➢ Limit annual rent increases to a maximum of four percent (4%) annually ➢ Prevent displacement of existing residents that do not meet income eligibility requirements 581
A POTENTIAL SOLUTION TO MILPITAS’S LONG

TERM FINANCIAL ISSUES

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CALPERS
➢ In order to fund future liabilities, CalPERS will need to achieve outsized returns in excess of 7% on its $389 billion in assets to fund future obligations ➢ In its 2020 fiscal year which ended June 30, CALPERS earned a 4.7% return ➢ CalPERS reports that it is 70% funded for future needs; this means it is $170 billion short of future obligations

UN-FUNDED PENSION OBLIGATIONS
➢ State and local agencies are required to pay their required contributions to fund their employee pensions ➢ Deferred payments result in higher costs in the future ➢ “The challenge for the underfunded liability has been a structural challenge. Its the same as Social Security and Medicare. More money goes out than goes in.” Sanjay Varshney, finance professor, California State University Sacramento

MIDDLE INCOME HOUSING FINANCIAL BENEFITS
➢ All properties are financed through the issuance of tax-exempt bonds and have no equity partners, meaning all excess sale proceeds are paid to the City and other taxing agencies
➢ These proceeds from the sale of the property could be a large windfall to the City to help cover future pension contributions 582
PROJECT PROPOSAL – TURING

THE PROPERTY
Located at 1355 McCandles Drive, Turing is a 371-unit luxury multifamily community in Milpitas.

Project Overview:
o Completion: 2019
o Total Units: 371 units
o Property Type: “Class A” Multifamily Community
o Unit Mix: Studios-19, 1B/1b-193, and 2B/2b-150 and 3B/2b-9 o Amenities: Luxury, “Resort-Style”
o Location Proximity: Located within The Fields, the luxury retail and lifestyle center in Milpitas adjacent to the Milpitas BART transit station and close proximity to the 880 and 680 freeway entrances

T U R I N G

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583
PROJECT PROPOSAL – TURING

FINANCING STRUCTURE
➢ The acquisition of Turing will be financed through the issuance of tax-exempt bonds ➢ Upon the acquisition of the property, CSCDA will restrict the rents to the following income categories:
o 40% of the units designated to households earning less than 80% of the Area Median Income (AMI) o 20% of the units designated to households earning between 81% and 100% of the AMI o 40% of the units designated to households earning between 101% and 120% of the AMI ➢ Maximum allowable rents for each income category will not exceed 30% of the respective income limit for Santa Clara County, adjusted for household size, as published annually by HUD and utilized by the California Tax Credit Allocation Committee
TURING

ROOFTOP POOL DECK
Max Allowable Rent
80% AMI 100% AMI 120% AMI
0B 2,320$ 2,900$ 3,480$
1B 2,652$ 3,315$ 3,978$
2B 2,984$ 3,730$ 4,476$
3B 3,314$ 4,143$ 4,971$
Year 1 program rents are 12.4% lower than current in-place rents $1.8M in total resident rent savings in the first year
CSCDA Resident
Unit Type Type Total Units SF In-Place
Rent Units 80% AMI
Rents Units 100% AMI
Rents Units 120% AMI
Rents
Total
Units
Wtd. Avg.

Rent
% Discount
to In-Place
Annual Rent
Savings
0 BR Market 19 563 $2,495 8 $2,196 4 $2,246 8 $2,295 19 $2,246 10.0% $56,886 1 BR Market 193 778 $2,943 77 $2,590 39 $2,649 77 $2,708 193 $2,649 10.0% $681,599 2 BR Market 150 1,157 $3,815 60 $2,984 30 $3,434 60 $3,510 150 $3,284 13.9% $955,404 3 BR Market 9 1,667 $5,500 4 $3,314 2 $4,143 4 $4,971 9 $4,143 24.7% $146,610 Total/Wtd. Avg 371 942 $3,335 148 $2,747 74 $2,982 148 $3,066 371 $2,921 12.4% $1,840,499 CSCDA Pro Forma Rent

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584

RESIDENT RENT SAVINGS ANALYSIS & GUIDELINES

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➢ Upon the acquisition of the property, existing tenants will not be displaced ➢ Existing tenants who qualify will be granted income restricted rents at the time that their lease expires ➢ Rent increases will be subject to a 4% annual cap per the regulatory agreement; properties bought through the middle-income housing program by Waterford/CSCDA will be limited to 3% annual rent increases.
➢ Capital Expenses & Capital Reserves: Turing Milpitas will be kept in its current “Class A” condition. Total Upfront Capital Expenses Funds amount to $7,008,544, which will be funded upfront through the bond issuance for on-site maintenance. In addition, $10,776,709 will be annually distributed in capital reserves over the 30 year hold period as such: $300 per unit in annual “Op-ex” reserves in year 1. This annual distribution will increase by 3% annually from years 2 - 9 and will increase again to $700 per unit starting in year 10, increasing thereafter by 3% per year. ➢ Local Preference Guidelines in Regulatory Agreement: Waterford proposes to include language in the Regulatory Agreement that incorporates local preference guidelines for employees of all Milpitas schools. “In reviewing and considering applications from prospective tenants, the Owner shall provide a preference to households which include one or more persons who are employed by a public school district or public higher education institution within the City of Milpitas”.

2. RENT GUIDELINES

1. RESIDENT RENT SAVINGS AT TURING WILL INCREASE SUBSTANTIALLY OVER TIME

1. As illustrated in the chart to the left, the difference between market rents and income- restricted rents will increase more and more each year due to the compounded growth of market rents versus the annual rent growth caps set in place for Essential Housing properties.

2. Over the 30-yr hold period, residents at Turing Milpitas will be able to save $309M in aggregate rent expenses…that’s $833K in rent savings per household

3. Middle-income resident rent savings amount to over 30x greater than the City’s property tax forbearance during the same period

4. Moreover, the City will be the sole owner of the asset once the bonds are paid off, amounting to $390M in net surplus proceeds (post tax forbearance) in year 30. 585
CASE STUDY – THE PARAMOUNT PLATINUM

TRIANGLE IN ANAHEIM, CA

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LOW RENT AND RENT GROWTH COMPARED TO MARKET
➢ In February 2021, Waterford/CSCDA acquired Jefferson Platinum Triangle (since renamed “The Paramount”), a 400-unit community in Anaheim, CA.
➢ Since the beginning of the leasing period at acquisition until November 2021, Waterford has successfully signed 150 new leases through the Essential Housing program at The Paramount.
➢ By having The Paramount as an Essential Housing option in Anaheim, our residents are able to live comfortably within the city in which they work, saving an average of $1,129 in rent per month ($13,551/resident/year) when compared to the November 2021 rents of nearby market rate communities.
➢ As exhibited by the table below, one-bedroom rents have increased by an average of 31.6% over the past year at The Paramount’s closest comparable market-rate properties. Over the same period, Paramount’s 1-bedroom increased by only 1% due to the Waterford/CSCDA Essential Housing Program
Source: Costar

THE PARAMOUNT PLATINUM TRIANGLE

COMMON AREAS

THE PARAMOUNT PLATINUM TRIANGLE

POOL DECK
Property Address Year Built Distance From
Subject Property
Average 1 BR Rent
Per Unit
Average
Rent/SF
Annual Change (as
of November 2021)
Jefferson Rise (same developer as Subject) 2019 0.7 Miles $2,939 $3.52 +26.8% Core 2018 0.3 Miles $2,898 $3.78 +41.2%
The George 2017 0.9 Miles $2,876 $3.71 +15.0%
Vivere Flats 2017 0.9 Miles $2,753 $3.58 +43.2%
The Paramount 2017 - $1,936 $2.58 +1.0%

ONE-BEDROOM RENT COMPARABLES
586

NEXT STEPS

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THE CITY OF MILPITAS
➢ Place the item on City Council Agenda within 30 days
➢ City Council adopts one single resolution (CSCDA has Provided a Draft Resolution to City Staff in April 2021) ➢ City approves the Public Benefit Agreement (CSCDA has Provided a Draft Resolution to City Staff in April 2021), this agreement ratifies the City’s ability to receive surplus revenue from the project ➢ The City incurs no fees, costs, liability or administrative responsibilities in connection with the program or individual programs

PARTNERS
➢ CSCDA/Waterford views this socially beneficial and financially beneficial structure as a true partnership with the City of Milpitas ➢ CSCDA/Waterford are active participants and investors in the Cities where they do business ➢ CSCDA/Waterford is excited about the opportunity to reinvest in this beautiful transcendent property and become long term partners with the City
587
100 BAYVIEW CIRCLE, SUITE 4500
NEWPORT BEACH, CA 92660
949.529.3530
WWW.WATERFORDCO.COM
Contact Information

SEAN RAWSON
Co-Founder
949.529.3534
[email protected]

JOHN DRACHMAN
Co-Founder
949.529.3535
[email protected]

PHIL CHRISTIAN
Director of Asset Management
949.529.3532
[email protected]

COLE TAIT
Associate
949.529.3533
[email protected]

SEAN GULIAN
Director of Acquisitions
949.529.3530
[email protected]
588

Appendix D

Bond Underwriter’s Cash Flow (DRAFT) – Turing – Milpitas, CA

Goldman Sachs

589
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TABLE OF CONTENTS

CSCDA COMMUNITY IMPROVEMENT AUTHORITY
Essential Housing Revenue Bonds
Series 2022AB
(Turing-Milpitas) (Social Bonds)
*** Preliminary, Subject to Change ***
Report Page
Series 2022 Bonds (Milpitas)
Sources and Uses of Funds . ........................1
Bond Summary Statistics . .........................2
Bond Maturity Table . ...........................3
Bond Pricing ................................ 5
Aggregate Debt Service . ..........................7
Underwriter's Discount . ..........................1 0
Form 8038 Statistics . ...........................1 1
Series 2022A Senior Bonds
Bond Debt Service . ............................1 3
Series 2022B Mezzanine Bonds
Bond Debt Service . ............................1 5
Series 2022C Subordinate Bonds
Bond Debt Service . ............................1 8
Series 2022 Bonds (Milpitas)
Disclaimer ................................. 21
590
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SOURCES AND USES OF FUNDS

CSCDA COMMUNITY IMPROVEMENT AUTHORITY
Essential Housing Revenue Bonds
Series 2022AB
(Turing-Milpitas) (Social Bonds)
*** Preliminary, Subject to Change ***
Dated Date 03/09/2022
Delivery Date 03/09/2022
Series 2022B Series 2022C
Series 2022A Mezzanine Subordinate
Sources: Senior Bonds Bonds Bonds Total
Bond Proceeds:

Par Amount 232,490,000.00 65,500,000.00 5,000,000.00 302,990,000.00 Original Issue Discount (21,629,506.60) (8,387,275.00) (30,016,781.60) 210,860,493.40 57,112,725.00 5,000,000.00 272,973,218.40 Series 2022B Series 2022C
Series 2022A Mezzanine Subordinate
Uses: Senior Bonds Bonds Bonds Total
Project Fund Deposits:

Purchase Price 181,239,058.36 51,060,941.64 232,300,000.00 Other Fund Deposits:

Debt Service Reserve Fund 7,987,150.00 2,620,000.00 10,607,150.00 Capitalized Interest 1,332,000.00 1,310,000.00 2,642,000.00 Capitalized Admin Expenses 1,092,271.55 307,728.45 1,400,000.00 Operating Reserve Fund 612,452.26 172,547.74 785,000.00 Extraordinary Reserve Fund 390,096.98 109,903.02 500,000.00 Capital Expense Reserve Fund 4,525,125.00 1,274,875.00 5,800,000.00 Operating Account 408,041.44 114,958.56 523,000.00
Coverage Reserve 2,121,430.00 2,121,430.00
16,347,137.23
8,031,442.77 24,378,580.00
Delivery Date Expenses:

Cost of Issuance 936,774.99 263,920.01 1,200,695.00
Underwriter's Discount 3,194,658.12 865,636.09 4,060,294.21 Initial Payment to Project Admin 3,000,000.00 3,000,000.00 CSCDA Fee 2,363,909.70 665,990.30 3,029,900.00
Consideration for Purchase Rights to the Project 5,000,000.00 5,000,000.00 9,495,342.81
1,795,546.40 5,000,000.00 16,290,889.21
Other Uses of Funds:

Contingency 3,778,955.00 (3,775,205.81) 3,749.19
210,860,493.40 57,112,725.00 5,000,000.00 272,973,218.40 Note: Underwriter's Discount includes all underwriting expenses. 591
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BOND SUMMARY STATISTICS

CSCDA COMMUNITY IMPROVEMENT AUTHORITY
Essential Housing Revenue Bonds
Series 2022AB
(Turing-Milpitas) (Social Bonds)
*** Preliminary, Subject to Change ***
Series 2022A Series 2022B Series 2022C
Senior Bonds Mezzanine Bonds Subordinate Bonds Aggregate Dated Date 03/09/2022 03/09/2022 03/09/2022 03/09/2022
Delivery Date 03/09/2022 03/09/2022 03/09/2022 03/09/2022 Last Maturity 03/01/2054 09/01/2056 09/01/2056 09/01/2056 Arbitrage Yield 4.253398% 4.253398% 4.253398% 4.253398% True Interest Cost (TIC) 4.179362% 4.861517% 7.667525% 4.437225% Net Interest Cost (NIC) 3.906325% 4.425061% 7.474533% 4.151239% All-In TIC 4.382759% 4.959583% 4.736134%
Average Coupon 3.460112% 4.000000% 7.474533% 3.723714%
Average Life (years) 23.929 33.234 46.127 26.307
Weighted Average Maturity (years) 23.916 33.234 46.127 26.272 Duration of Issue (years) 15.557 17.483 15.868 16.075
Par Amount 232,490,000.00 65,500,000.00 5,000,000.00 302,990,000.00 Bond Proceeds 210,860,493.40 57,112,725.00 5,000,000.00 272,973,218.40 Total Interest 192,496,339.03 87,073,777.78 17,238,888.89 296,809,005.70 Net Interest 217,320,503.75 96,326,688.87 17,238,888.89 330,886,081.51 Total Debt Service 424,986,339.03 152,573,777.78 22,238,888.89 599,799,005.70 Maximum Annual Debt Service 21,347,012.50 25,422,900.00 7,298,316.46 33,170,275.00 Average Annual Debt Service 13,290,052.30 4,425,278.76 645,020.95 17,396,684.02 Underwriter's Fees (per $1000)
Average Takedown
Other Fee 13.741056 13.215818 13.400753
Total Underwriter's Discount 13.741056 13.215818 13.400753 Bid Price 89.322481 85.873418 100.000000 88.753069
Par Average Average PV of 1 bp
Bond Component Value Price Coupon Life change
Series 2021C Deferred Interest (1,798,316.46) 100.000 (1,078.99) Series 2021A-1 Bonds 60,000,000.00 91.072 3.250% 14.794 91,200.00 Series 2021A-2 Bonds 172,490,000.00 90.566 3.500% 27.107 303,582.40 Series 2021B-1 Bonds 65,500,000.00 87.195 4.000% 33.234 100,870.00 Series 2021C Deferred Interest (Paid) 1,798,316.46 100.000 34.478 6,384.02 Series 2021C Principal 5,000,000.00 100.000 10.000% 34.478 4,800.00 302,990,000.00 26.319 505,757.43
All-In Arbitrage
TIC TIC Yield
Par Value 302,990,000.00 302,990,000.00 302,990,000.00
+ Accrued Interest
+ Premium (Discount) (30,016,781.60) (30,016,781.60) (30,016,781.60) - Underwriter's Discount (4,060,294.21) (4,060,294.21)
- Cost of Issuance Expense (1,200,695.00)
- Other Amounts (11,029,900.00)
Target Value 268,912,924.19 256,682,329.19 272,973,218.40 Target Date 03/09/2022 03/09/2022 03/09/2022
Yield 4.437225% 4.736134% 4.253398%
592
Jan 10, 2022 10:43 am (\...\workforc ehousingcs\660241_1\california\waterford (eastdil)\projects\milpitas\Milpitas WFH DBC (2022.01.10):_V01-DEBT) Page 3

BOND MATURITY TABLE

CSCDA COMMUNITY IMPROVEMENT AUTHORITY
Essential Housing Revenue Bonds
Series 2022AB
(Turing-Milpitas) (Social Bonds)
*** Preliminary, Subject to Change ***
Series 2021C Series 2021C
Maturity Series 2021A-1 Series 2021A-2 Series 2021B-1 Series 2021C Deferred Deferred Date Bonds Bonds Bonds Principal Interest Interest (Paid) Total 09/01/2022 0000 (238,888.89) (238,888.89)
03/01/2023 0000 (244,174.59) (244,174.59)
09/01/2023 0000 (250,000.00) (250,000.00)
03/01/2024 0000 (250,000.00) (250,000.00)
09/01/2024 0000 (250,000.00) (250,000.00)
03/01/2025 0000 (250,000.00) (250,000.00)
09/01/2025 0000 (157,626.49) (157,626.49)
03/01/2026 0000 (157,626.49) (157,626.49)
09/01/2026 0000 0 . 0 0 0 . 0 0
03/01/2027 0000 0 . 0 0 0 . 0 0
09/01/2027 190,00 0000 0 . 0 0 190,000.00
03/01/2028 185,00 0000 0 . 0 0 185,000.00
09/01/2028 360,00 0000 0 . 0 0 360,000.00
03/01/2029 365,00 0000 0 . 0 0 365,000.00
09/01/2029 555,00 0000 0 . 0 0 555,000.00
03/01/2030 560,00 0000 0 . 0 0 560,000.00
09/01/2030 760,00 0000 0 . 0 0 760,000.00
03/01/2031 770,00 0000 0 . 0 0 770,000.00
09/01/2031 6,975,00 0000 0 . 0 0 6 , 975,000.00
03/01/2032 1,045,00 0000 0 . 0 0 1 , 045,000.00
09/01/2032 1,145,00 0000 0 . 0 0 1 , 145,000.00
03/01/2033 1,170,00 0000 0 . 0 0 1 , 170,000.00
09/01/2033 1,390,00 0000 0 . 0 0 1 , 390,000.00
03/01/2034 1,415,00 0000 0 . 0 0 1 , 415,000.00
09/01/2034 1,650,00 0000 0 . 0 0 1 , 650,000.00
03/01/2035 1,675,00 0000 0 . 0 0 1 , 675,000.00
09/01/2035 1,920,00 0000 0 . 0 0 1 , 920,000.00
03/01/2036 1,955,00 0000 0 . 0 0 1 , 955,000.00
09/01/2036 2,205,00 0000 0 . 0 0 2 , 205,000.00
03/01/2037 2,245,00 0000 0 . 0 0 2 , 245,000.00
09/01/2037 2,515,00 0000 0 . 0 0 2 , 515,000.00
03/01/2038 2,555,00 0000 0 . 0 0 2 , 555,000.00
09/01/2038 2,835,00 0000 0 . 0 0 2 , 835,000.00
03/01/2039 2,880,00 0000 0 . 0 0 2 , 880,000.00
09/01/2039 3,170,00 0000 0 . 0 0 3 , 170,000.00
03/01/2040 3,225,00 0000 0 . 0 0 3 , 225,000.00
09/01/2040 3,530,00 0000 0 . 0 0 3 , 530,000.00
03/01/2041 3,590,00 0000 0 . 0 0 3 , 590,000.00
09/01/2041 3,905,00 0000 0 . 0 0 3 , 905,000.00
03/01/2042 3,260,000 710,00 0 0 0 0.00 3,970,000.00
09/01/2042 0 4,305,00 0 0 0 0.00 4,305,000.00
03/01/2043 0 4,380,00 0 0 0 0.00 4,380,000.00
09/01/2043 0 4,735,00 0 0 0 0.00 4,735,000.00
03/01/2044 0 4,815,00 0 0 0 0.00 4,815,000.00
09/01/2044 0 5,185,00 0 0 0 0.00 5,185,000.00
03/01/2045 0 5,280,00 0 0 0 0.00 5,280,000.00
09/01/2045 0 5,660,00 0 0 0 0.00 5,660,000.00
03/01/2046 0 5,765,00 0 0 0 0.00 5,765,000.00
09/01/2046 0 6,165,00 0 0 0 0.00 6,165,000.00
03/01/2047 0 6,270,00 0 0 0 0.00 6,270,000.00
09/01/2047 0 6,695,00 0 0 0 0.00 6,695,000.00
03/01/2048 6,815,000 0 0 0.00 6,815,000.00
09/01/2048 7,250,000 0 0 0.00 7,250,000.00
03/01/2049 7,380,000 0 0 0.00 7,380,000.00
09/01/2049 7,840,000 0 0 0.00 7,840,000.00
03/01/2050 7,975,000 0 0 0.00 7,975,000.00
09/01/2050 8,460,000 0 0 0.00 8,460,000.00
03/01/2051 8,605,000 0 0 0.00 8,605,000.00
09/01/2051 9,105,000 0 0 0.00 9,105,000.00
03/01/2052 9,265,000 0 0 0.00 9,265,000.00
09/01/2052 9,790,000 0 0 0.00 9,790,000.00
03/01/2053 9,965,000 0 0 0.00 9,965,000.00
09/01/2053 10,505,000 0 0 0.00 10,505,000.00
03/01/2054 9,570,000 9,110, 000 0 0.00 18,680,000.00
09/01/2054 0 11,385,000 0 0.00 11,385,000.00
03/01/2055 0 11,615,000 0 0.00 11,615,000.00
09/01/2055 0 12,240,000 0 0.00 12,240,000.00
593
Jan 10, 2022 10:43 am (\...\workforc ehousingcs\660241_1\california\waterford (eastdil)\projects\milpitas\Milpitas WFH DBC (2022.01.10):_V01-DEBT) Page 4

BOND MATURITY TABLE

BOND PRICING

CSCDA COMMUNITY IMPROVEMENT AUTHORITY
Essential Housing Revenue Bonds
Series 2022AB
(Turing-Milpitas) (Social Bonds)
*** Preliminary, Subject to Change ***
Maturity
Bond Component Date Amount Rate Yield Price
Series 2021C Deferred Interest:
09/01/2022 (238,888.89) 0.000% 100.000
03/01/2023 (244,174.59) 0.000% 100.000
09/01/2023 (250,000.00) 0.000% 100.000
03/01/2024 (250,000.00) 0.000% 100.000
09/01/2024 (250,000.00) 0.000% 100.000
03/01/2025 (250,000.00) 0.000% 100.000
09/01/2025 (157,626.49) 0.000% 100.000
03/01/2026 (157,626.49) 0.000% 100.000
03/01/2028 0.000% 100.000
(1,798,316.46)
Series 2021A-1 Bonds:
09/01/2027 190,000.00 3.250% 3.800% 91.072
03/01/2028 185,000.00 3.250% 3.800% 91.072
09/01/2028 360,000.00 3.250% 3.800% 91.072
03/01/2029 365,000.00 3.250% 3.800% 91.072
09/01/2029 555,000.00 3.250% 3.800% 91.072
03/01/2030 560,000.00 3.250% 3.800% 91.072
09/01/2030 760,000.00 3.250% 3.800% 91.072
03/01/2031 770,000.00 3.250% 3.800% 91.072
09/01/2031 6,975,000.00 3.250% 3.800% 91.072
03/01/2032 1,045,000.00 3.250% 3.800% 91.072
09/01/2032 1,145,000.00 3.250% 3.800% 91.072
03/01/2033 1,170,000.00 3.250% 3.800% 91.072
09/01/2033 1,390,000.00 3.250% 3.800% 91.072
03/01/2034 1,415,000.00 3.250% 3.800% 91.072
09/01/2034 1,650,000.00 3.250% 3.800% 91.072
03/01/2035 1,675,000.00 3.250% 3.800% 91.072
09/01/2035 1,920,000.00 3.250% 3.800% 91.072
03/01/2036 1,955,000.00 3.250% 3.800% 91.072
09/01/2036 2,205,000.00 3.250% 3.800% 91.072
03/01/2037 2,245,000.00 3.250% 3.800% 91.072
09/01/2037 2,515,000.00 3.250% 3.800% 91.072
03/01/2038 2,555,000.00 3.250% 3.800% 91.072
09/01/2038 2,835,000.00 3.250% 3.800% 91.072
03/01/2039 2,880,000.00 3.250% 3.800% 91.072
09/01/2039 3,170,000.00 3.250% 3.800% 91.072
03/01/2040 3,225,000.00 3.250% 3.800% 91.072
09/01/2040 3,530,000.00 3.250% 3.800% 91.072
03/01/2041 3,590,000.00 3.250% 3.800% 91.072
09/01/2041 3,905,000.00 3.250% 3.800% 91.072
03/01/2042 3,260,000.00 3.250% 3.800% 91.072
09/01/2047 3.250% 3.800% 91.072
60,000,000.00
Series 2021A-2 Bonds:
03/01/2042 710,000.00 3.500% 4.000% 90.566
09/01/2042 4,305,000.00 3.500% 4.000% 90.566
03/01/2043 4,380,000.00 3.500% 4.000% 90.566
09/01/2043 4,735,000.00 3.500% 4.000% 90.566
03/01/2044 4,815,000.00 3.500% 4.000% 90.566
09/01/2044 5,185,000.00 3.500% 4.000% 90.566
03/01/2045 5,280,000.00 3.500% 4.000% 90.566
09/01/2045 5,660,000.00 3.500% 4.000% 90.566
03/01/2046 5,765,000.00 3.500% 4.000% 90.566
09/01/2046 6,165,000.00 3.500% 4.000% 90.566
03/01/2047 6,270,000.00 3.500% 4.000% 90.566
09/01/2047 6,695,000.00 3.500% 4.000% 90.566
03/01/2048 6,815,000.00 3.500% 4.000% 90.566
09/01/2048 7,250,000.00 3.500% 4.000% 90.566
03/01/2049 7,380,000.00 3.500% 4.000% 90.566
09/01/2049 7,840,000.00 3.500% 4.000% 90.566
03/01/2050 7,975,000.00 3.500% 4.000% 90.566
09/01/2050 8,460,000.00 3.500% 4.000% 90.566
03/01/2051 8,605,000.00 3.500% 4.000% 90.566
09/01/2051 9,105,000.00 3.500% 4.000% 90.566
03/01/2052 9,265,000.00 3.500% 4.000% 90.566
09/01/2052 9,790,000.00 3.500% 4.000% 90.566
03/01/2053 9,965,000.00 3.500% 4.000% 90.566
09/01/2053 10,505,000.00 3.500% 4.000% 90.566
03/01/2054 9,570,000.00 3.500% 4.000% 90.566
595
Jan 10, 2022 10:43 am (\...\workforc ehousingcs\660241_1\california\waterford (eastdil)\projects\milpitas\Milpitas WFH DBC (2022.01.10):_V01-DEBT) Page 6

BOND PRICING

CSCDA COMMUNITY IMPROVEMENT AUTHORITY
Essential Housing Revenue Bonds
Series 2022AB
(Turing-Milpitas) (Social Bonds)
*** Preliminary, Subject to Change ***
Maturity
Bond Component Date Amount Rate Yield Price
Series 2021A-2 Bonds:
09/01/2057 3.500% 4.000% 90.566
172,490,000.00
Series 2021B-1 Bonds:
03/01/2054 9,110,000.00 4.000% 4.750% 87.195
09/01/2054 11,385,000.00 4.000% 4.750% 87.195
03/01/2055 11,615,000.00 4.000% 4.750% 87.195
09/01/2055 12,240,000.00 4.000% 4.750% 87.195
03/01/2056 12,485,000.00 4.000% 4.750% 87.195
09/01/2056 8,665,000.00 4.000% 4.750% 87.195
09/01/2057 4.000% 4.750% 87.195
65,500,000.00
Series 2021C Principal:
09/01/2056 5,000,000.00 10.000% 10.000% 100.000
09/01/2057 10.000% 10.000% 100.000
5,000,000.00
Series 2021C Deferred Interest (Paid):
09/01/2056 1,798,316. 46 0.000% 100.000
09/01/2057 0.000% 100.000
1,798,316.46
302,990,000.00
Dated Date 03/09/2022
Delivery Date 03/09/2022
First Coupon 09/01/2022
Par Amount 302,990,000.00
Original Issue Discount (30,016,781.60)
Production 272, 973,218.40 90.093144%
Underwriter's Discount (4,060,294.21) (1.340075%)
Purchase Price 268,912,924.19 88.753069%
Accrued Interest
Net Proceeds 268,912,924.19
596
Jan 10, 2022 10:43 am (\...\workforc ehousingcs\660241_1\california\waterford (eastdil)\projects\milpitas\Milpitas WFH DBC (2022.01.10):_V01-DEBT) Page 7

AGGREGATE DEBT SERVICE

CSCDA COMMUNITY IMPROVEMENT AUTHORITY
Essential Housing Revenue Bonds
Series 2022AB
(Turing-Milpitas) (Social Bonds)
*** Preliminary, Subject to Change ***
Series 2022B Series 2022C
Series 2022A Mezzanine Subordinate Aggregate
Date Senior Bonds Bonds Bonds Debt Service
09/01/2022 3,816,082.78 1, 251,777.78 5,067,860.56
03/01/2023 3,993,575. 00 1,310,000.00 5, 825.41 5,309,400.41 09/01/2023 3,993,575.00 1, 310,000.00 5,303,575.00
03/01/2024 3,993,575.00 1, 310,000.00 5,303,575.00
09/01/2024 3,993,575.00 1, 310,000.00 5,303,575.00
03/01/2025 3,993,575.00 1, 310,000.00 5,303,575.00
09/01/2025 3,993,575. 00 1,310,000.00 92, 373.51 5,395,948.51 03/01/2026 3,993,575. 00 1,310,000.00 92, 373.51 5,395,948.51 09/01/2026 3,993,575. 00 1,310,000.00 250, 000.00 5,553,575.00 03/01/2027 3,993,575. 00 1,310,000.00 250, 000.00 5,553,575.00 09/01/2027 4,183,575. 00 1,310,000.00 250, 000.00 5,743,575.00 03/01/2028 4,175,487. 50 1,310,000.00 250, 000.00 5,735,487.50 09/01/2028 4,347,481. 25 1,310,000.00 250, 000.00 5,907,481.25 03/01/2029 4,346,631. 25 1,310,000.00 250, 000.00 5,906,631.25 09/01/2029 4,530,700. 00 1,310,000.00 250, 000.00 6,090,700.00 03/01/2030 4,526,681. 25 1,310,000.00 250, 000.00 6,086,681.25 09/01/2030 4,717,581. 25 1,310,000.00 250, 000.00 6,277,581.25 03/01/2031 4,715,231. 25 1,310,000.00 250, 000.00 6,275,231.25 09/01/2031 10,907,718. 75 1,310,000.00 250, 000.00 12,467,718.75 03/01/2032 4,864,375. 00 1,310,000.00 250, 000.00 6,424,375.00 09/01/2032 4,947,393. 75 1,310,000.00 250, 000.00 6,507,393.75 03/01/2033 4,953,787. 50 1,310,000.00 250, 000.00 6,513,787.50 09/01/2033 5,154,775. 00 1,310,000.00 250, 000.00 6,714,775.00 03/01/2034 5,157,187. 50 1,310,000.00 250, 000.00 6,717,187.50 09/01/2034 5,369,193. 75 1,310,000.00 250, 000.00 6,929,193.75 03/01/2035 5,367,381. 25 1,310,000.00 250, 000.00 6,927,381.25 09/01/2035 5,585,162. 50 1,310,000.00 250, 000.00 7,145,162.50 03/01/2036 5,588,962. 50 1,310,000.00 250, 000.00 7,148,962.50 09/01/2036 5,807,193. 75 1,310,000.00 250, 000.00 7,367,193.75 03/01/2037 5,811,362. 50 1,310,000.00 250, 000.00 7,371,362.50 09/01/2037 6,044,881. 25 1,310,000.00 250, 000.00 7,604,881.25 03/01/2038 6,044,012. 50 1,310,000.00 250, 000.00 7,604,012.50 09/01/2038 6,282,493. 75 1,310,000.00 250, 000.00 7,842,493.75 03/01/2039 6,281,425. 00 1,310,000.00 250, 000.00 7,841,425.00 09/01/2039 6,524,625. 00 1,310,000.00 250, 000.00 8,084,625.00 03/01/2040 6,528,112. 50 1,310,000.00 250, 000.00 8,088,112.50 09/01/2040 6,780,706. 25 1,310,000.00 250, 000.00 8,340,706.25 03/01/2041 6,783,343. 75 1,310,000.00 250, 000.00 8,343,343.75 09/01/2041 7,040,006. 25 1,310,000.00 250, 000.00 8,600,006.25 03/01/2042 7,041,550. 00 1,310,000.00 250, 000.00 8,601,550.00 09/01/2042 7,311,150. 00 1,310,000.00 250, 000.00 8,871,150.00 03/01/2043 7,310,812. 50 1,310,000.00 250, 000.00 8,870,812.50 09/01/2043 7,589,162. 50 1,310,000.00 250, 000.00 9,149,162.50 03/01/2044 7,586,300. 00 1,310,000.00 250, 000.00 9,146,300.00 09/01/2044 7,872,037. 50 1,310,000.00 250, 000.00 9,432,037.50 03/01/2045 7,876,300. 00 1,310,000.00 250, 000.00 9,436,300.00 09/01/2045 8,163,900. 00 1,310,000.00 250, 000.00 9,723,900.00 03/01/2046 8,169,850. 00 1,310,000.00 250, 000.00 9,729,850.00 09/01/2046 8,468,962. 50 1,310,000.00 250, 000.00 10,028,962.50 03/01/2047 8,466,075. 00 1,310,000.00 250, 000.00 10,026,075.00 09/01/2047 8,781,350. 00 1,310,000.00 250, 000.00 10,341,350.00 03/01/2048 8,784,187. 50 1,310,000.00 250, 000.00 10,344,187.50 09/01/2048 9,099,925. 00 1,310,000.00 250, 000.00 10,659,925.00 03/01/2049 9,103,050. 00 1,310,000.00 250, 000.00 10,663,050.00 09/01/2049 9,433,900. 00 1,310,000.00 250, 000.00 10,993,900.00 03/01/2050 9,431,700. 00 1,310,000.00 250, 000.00 10,991,700.00 09/01/2050 9,777,137. 50 1,310,000.00 250, 000.00 11,337,137.50 03/01/2051 9,774,087. 50 1,310,000.00 250, 000.00 11,334,087.50 09/01/2051 10,123,500. 00 1,310,000.00 250, 000.00 11,683,500.00 03/01/2052 10,124,162. 50 1,310,000.00 250, 000.00 11,684,162.50 09/01/2052 10,487,025. 00 1,310,000.00 250, 000.00 12,047,025.00 03/01/2053 10,490,700. 00 1,310,000.00 250, 000.00 12,050,700.00 09/01/2053 10,856,312. 50 1,310,000.00 250, 000.00 12,416,312.50 03/01/2054 9,737,475. 00 10,420,000.00 250, 000.00 20,407,475.00 09/01/2054 12,512,800.00 250,000.00 12,762,800.00
598
Jan 10, 2022 10:43 am (\...\workforc ehousingcs\660241_1\california\waterford (eastdil)\projects\milpitas\Milpitas WFH DBC (2022.01.10):_V01-DEBT) Page 9

AGGREGATE DEBT SERVICE

UNDERWRITER'S DISCOUNT

CSCDA COMMUNITY IMPROVEMENT AUTHORITY
Essential Housing Revenue Bonds
Series 2022AB
(Turing-Milpitas) (Social Bonds)
*** Preliminary, Subject to Change ***
Series 2022B
Series 2022A Mezzanine
Senior Bonds Bonds Total
Takedown 3,162,907.40 856,690.88 4,019,598.28
CUSIP Fee (3 CUSIPs) 479.04 134.96 614.00
CDIAC Fee 3,900. 97 1,099.03 5,000.00
Ipreo Bookrunning Fee 3 ,860.42 1,087.60 4,948.02
Ipreo Electronic Order Entry Fee 937.00 263.98 1,200.98 Ipreo Gameday Fee 937.00 263.98 1,200.98
Ipreo Wire Fee 128.73 36.27 165.00
Taxes on Ipreo Fees 520.35 146.60 666.95
DTC 897.22 252.78 1,150.00
Internet Roadshow (only if billed to GS) 3,705. 92 1,044.08 4,750.00 GS Out-of-Pocket Expenses 11,702.91 3, 297.09 15,000.00 Verification Agent 4, 681.16 1,318.84 6,000.00
3,194,658.12 865,636. 09 4,060,294.21
600
Jan 10, 2022 10:43 am (\...\workforc ehousingcs\660241_1\california\waterford (eastdil)\projects\milpitas\Milpitas WFH DBC (2022.01.10):_V01-DEBT) Page 11 FORM 8038 STATISTICS

CSCDA COMMUNITY IMPROVEMENT AUTHORITY
Essential Housing Revenue Bonds
Series 2022AB
(Turing-Milpitas) (Social Bonds)
*** Preliminary, Subject to Change ***
Dated Date 03/09/2022
Delivery Date 03/09/2022
Redemption
Bond Component Date Principal Coupon Price Issue Price at Maturity Series 2021A-1 Bonds:
09/01/2027 190,000.00 3.250% 91.072 173,036.80 190,000.00 03/01/2028 185,000.00 3.250% 91.072 168,483.20 185,000.00 09/01/2028 360,000.00 3.250% 91.072 327,859.20 360,000.00 03/01/2029 365,000.00 3.250% 91.072 332,412.80 365,000.00 09/01/2029 555,000.00 3.250% 91.072 505,449.60 555,000.00 03/01/2030 560,000.00 3.250% 91.072 510,003.20 560,000.00 09/01/2030 760,000.00 3.250% 91.072 692,147.20 760,000.00 03/01/2031 770,000.00 3.250% 91.072 701,254.40 770,000.00 09/01/2031 6,975,000.00 3.250% 91.072 6,352, 272.00 6,975,000.00 03/01/2032 1,045,000. 00 3.250% 91.072 951, 702.40 1,045,000.00 09/01/2032 1,145,000.00 3.250% 91.072 1,042, 774.40 1,145,000.00 03/01/2033 1,170,000.00 3.250% 91.072 1,065, 542.40 1,170,000.00 09/01/2033 1,390,000.00 3.250% 91.072 1,265, 900.80 1,390,000.00 03/01/2034 1,415,000.00 3.250% 91.072 1,288, 668.80 1,415,000.00 09/01/2034 1,650,000.00 3.250% 91.072 1,502, 688.00 1,650,000.00 03/01/2035 1,675,000.00 3.250% 91.072 1,525, 456.00 1,675,000.00 09/01/2035 1,920,000.00 3.250% 91.072 1,748, 582.40 1,920,000.00 03/01/2036 1,955,000.00 3.250% 91.072 1,780, 457.60 1,955,000.00 09/01/2036 2,205,000.00 3.250% 91.072 2,008, 137.60 2,205,000.00 03/01/2037 2,245,000.00 3.250% 91.072 2,044, 566.40 2,245,000.00 09/01/2037 2,515,000.00 3.250% 91.072 2,290, 460.80 2,515,000.00 03/01/2038 2,555,000.00 3.250% 91.072 2,326, 889.60 2,555,000.00 09/01/2038 2,835,000.00 3.250% 91.072 2,581, 891.20 2,835,000.00 03/01/2039 2,880,000.00 3.250% 91.072 2,622, 873.60 2,880,000.00 09/01/2039 3,170,000.00 3.250% 91.072 2,886, 982.40 3,170,000.00 03/01/2040 3,225,000.00 3.250% 91.072 2,937, 072.00 3,225,000.00 09/01/2040 3,530,000.00 3.250% 91.072 3,214, 841.60 3,530,000.00 03/01/2041 3,590,000.00 3.250% 91.072 3,269, 484.80 3,590,000.00 09/01/2041 3,905,000.00 3.250% 91.072 3,556, 361.60 3,905,000.00 03/01/2042 3,260,000.00 3.250% 91.072 2,968, 947.20 3,260,000.00 Series 2021A-2 Bonds:
03/01/2042 710,000.00 3.500% 90.566 643,018.60 710,000.00 09/01/2042 4,305,000.00 3.500% 90.566 3,898, 866.30 4,305,000.00 03/01/2043 4,380,000.00 3.500% 90.566 3,966, 790.80 4,380,000.00 09/01/2043 4,735,000.00 3.500% 90.566 4,288, 300.10 4,735,000.00 03/01/2044 4,815,000.00 3.500% 90.566 4,360, 752.90 4,815,000.00 09/01/2044 5,185,000.00 3.500% 90.566 4,695, 847.10 5,185,000.00 03/01/2045 5,280,000.00 3.500% 90.566 4,781, 884.80 5,280,000.00 09/01/2045 5,660,000.00 3.500% 90.566 5,126, 035.60 5,660,000.00 03/01/2046 5,765,000.00 3.500% 90.566 5,221, 129.90 5,765,000.00 09/01/2046 6,165,000.00 3.500% 90.566 5,583, 393.90 6,165,000.00 03/01/2047 6,270,000.00 3.500% 90.566 5,678, 488.20 6,270,000.00 09/01/2047 6,695,000.00 3.500% 90.566 6,063, 393.70 6,695,000.00 03/01/2048 6,815,000.00 3.500% 90.566 6,172, 072.90 6,815,000.00 09/01/2048 7,250,000.00 3.500% 90.566 6,566, 035.00 7,250,000.00 03/01/2049 7,380,000.00 3.500% 90.566 6,683, 770.80 7,380,000.00 09/01/2049 7,840,000.00 3.500% 90.566 7,100, 374.40 7,840,000.00 03/01/2050 7,975,000.00 3.500% 90.566 7,222, 638.50 7,975,000.00 09/01/2050 8,460,000.00 3.500% 90.566 7,661, 883.60 8,460,000.00 03/01/2051 8,605,000.00 3.500% 90.566 7,793, 204.30 8,605,000.00 09/01/2051 9,105,000.00 3.500% 90.566 8,246, 034.30 9,105,000.00 03/01/2052 9,265,000.00 3.500% 90.566 8,390, 939.90 9,265,000.00 09/01/2052 9,790,000.00 3.500% 90.566 8,866, 411.40 9,790,000.00 03/01/2053 9,965,000.00 3.500% 90.566 9,024, 901.90 9,965,000.00 09/01/2053 10,505,000.00 3.500% 90.566 9,513, 958.30 10,505,000.00 03/01/2054 9,570,000.00 3.500% 90.566 8,667, 166.20 9,570,000.00 Series 2021B-1 Bonds:
03/01/2054 9,110,000.00 4.000% 87.195 7,943, 464.50 9,110,000.00 09/01/2054 11,385,000.00 4.000% 87.195 9,927, 150.75 11,385,000.00 03/01/2055 11,615,000.00 4.000% 87.195 10,127, 699.25 11,615,000.00 09/01/2055 12,240,000.00 4.000% 87.195 10,672, 668.00 12,240,000.00 03/01/2056 12,485,000.00 4.000% 87.195 10,886, 295.75 12,485,000.00 09/01/2056 8,665,000.00 4.000% 87.195 7,555, 446.75 8,665,000.00 601
Jan 10, 2022 10:43 am (\...\workforc ehousingcs\660241_1\california\waterford (eastdil)\projects\milpitas\Milpitas WFH DBC (2022.01.10):_V01-DEBT) Page 12 FORM 8038 STATISTICS

CSCDA COMMUNITY IMPROVEMENT AUTHORITY
Essential Housing Revenue Bonds
Series 2022AB
(Turing-Milpitas) (Social Bonds)
*** Preliminary, Subject to Change ***
Redemption
Bond Component Date Principal Coupon Price Issue Price at Maturity Series 2021C Deferred Interest:
09/01/2022 (238,888.89) 0.000% 100.000 (238,888.89) (238,888.89) 03/01/2023 (244,174.59) 0.000% 100.000 (244,174.59) (244,174.59) 09/01/2023 (250,000.00) 0.000% 100.000 (250,000.00) (250,000.00) 03/01/2024 (250,000.00) 0.000% 100.000 (250,000.00) (250,000.00) 09/01/2024 (250,000.00) 0.000% 100.000 (250,000.00) (250,000.00) 03/01/2025 (250,000.00) 0.000% 100.000 (250,000.00) (250,000.00) 09/01/2025 (157,626.49) 0.000% 100.000 (157,626.49) (157,626.49) 03/01/2026 (157,626.49) 0.000% 100.000 (157,626.49) (157,626.49) Series 2021C Principal:
09/01/2056 5,000,000.00 10.000% 100.000 5,000, 000.00 5,000,000.00 Series 2021C Deferred Interest (Paid):
09/01/2056 1,798,316.46 0.000% 100.000 1,798, 316.46 1,798,316.46 302,990,000.00 272,973, 218.40 302,990,000.00
Stated Weighted
Maturity Interest Issue Redemption Average
Date Rate Price at Maturity Maturity Yield
Final Maturity 09/01/2056 5. 589% 14,353,763.21 15,463,316.46 Entire Issue 274,771,534. 86 304,788,316.46 26.1142 4.2534% Proceeds used for accrued interest 0.00
Proceeds used for bond issuance costs (including underwriters' discount) 5,260,989.21 Proceeds used for credit enhancement 0.00
Proceeds allocated to reasonably required reserve or replacement fund 22,978,580.00 602
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BOND DEBT SERVICE
Milpitas-Turing - Model v01
Series 2022A Senior Bonds
Dated Date 03/09/2022
Delivery Date 03/09/2022
Period Bond Total
Ending Principal Coupon Interest Debt Service Balance Bond Value 09/01/2022 3,816,082. 78 3,816,082.78 232, 490,000 232,490,000 09/01/2023 7,987,150. 00 7,987,150.00 232, 490,000 232,490,000 09/01/2024 7,987,150. 00 7,987,150.00 232, 490,000 232,490,000 09/01/2025 7,987,150. 00 7,987,150.00 232, 490,000 232,490,000 09/01/2026 7,987,150. 00 7,987,150.00 232, 490,000 232,490,000 09/01/2027 190,000 3.250% 7,987,150.00 8,177,150. 00 232,300,000 232,300,000 09/01/2028 545,000 3.250% 7,977,968.75 8,522,968. 75 231,755,000 231,755,000 09/01/2029 920,000 3.250% 7,957,331.25 8,877,331. 25 230,835,000 230,835,000 09/01/2030 1,320,000 3.250% 7,924,262.50 9,244,262. 50 229,515,000 229,515,000 09/01/2031 7,745,000 3.250% 7,877,950.00 15,622,950. 00 221,770,000 221,770,000 09/01/2032 2,190,000 3.250% 7,621,768.75 9,811,768. 75 219,580,000 219,580,000 09/01/2033 2,560,000 3.250% 7,548,562.50 10,108,562. 50 217,020,000 217,020,000 09/01/2034 3,065,000 3.250% 7,461,381.25 10,526,381. 25 213,955,000 213,955,000 09/01/2035 3,595,000 3.250% 7,357,543.75 10,952,543. 75 210,360,000 210,360,000 09/01/2036 4,160,000 3.250% 7,236,156.25 11,396,156. 25 206,200,000 206,200,000 09/01/2037 4,760,000 3.250% 7,096,243.75 11,856,243. 75 201,440,000 201,440,000 09/01/2038 5,390,000 3.250% 6,936,506.25 12,326,506. 25 196,050,000 196,050,000 09/01/2039 6,050,000 3.250% 6,756,050.00 12,806,050. 00 190,000,000 190,000,000 09/01/2040 6,755,000 3.250% 6,553,818.75 13,308,818. 75 183,245,000 183,245,000 09/01/2041 7,495,000 3.250% 6,328,350.00 13,823,350. 00 175,750,000 175,750,000 09/01/2042 8,275,000 ** % 6,077, 700.00 14,352,700.00 167,475,000 167,475,000 09/01/2043 9,115,000 3.500% 5,784,975.00 14,899,975. 00 158,360,000 158,360,000 09/01/2044 10,000,000 3.500% 5,458,337.50 15,458,337. 50 148,360,000 148,360,000 09/01/2045 10,940,000 3.500% 5,100,200.00 16,040,200. 00 137,420,000 137,420,000 09/01/2046 11,930,000 3.500% 4,708,812.50 16,638,812. 50 125,490,000 125,490,000 09/01/2047 12,965,000 3.500% 4,282,425.00 17,247,425. 00 112,525,000 112,525,000 09/01/2048 14,065,000 3.500% 3,819,112.50 17,884,112. 50 98,460,000 98,460,000 09/01/2049 15,220,000 3.500% 3,316,950.00 18,536,950. 00 83,240,000 83,240,000 09/01/2050 16,435,000 3.500% 2,773,837.50 19,208,837. 50 66,805,000 66,805,000 09/01/2051 17,710,000 3.500% 2,187,587.50 19,897,587. 50 49,095,000 49,095,000 09/01/2052 19,055,000 3.500% 1,556,187.50 20,611,187. 50 30,040,000 30,040,000 09/01/2053 20,470,000 3. 500% 877,012.50 21,347,012. 50 9,570,000 9,570,000 09/01/2054 9,570,000 3.500% 167,475.00 9,737,475.00
232,490,000 192,496,339. 03 424,986,339.03
603
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BOND DEBT SERVICE
Milpitas-Turing - Model v01
Series 2022A Senior Bonds
Dated Date 03/09/2022
Delivery Date 03/09/2022
Period Annual Bond Total
Ending Principal Coupon Interest Debt Service Debt Service Balance Bond Value 03/09/2022 232,490,000 232,490,000
09/01/2022 3,816,082.78 3,816,082.78 3,816,082. 78 232,490,000 232,490,000 03/01/2023 3,993,575. 00 3,993,575.00 232, 490,000 232,490,000 09/01/2023 3,993,575.00 3,993,575.00 7,987,150. 00 232,490,000 232,490,000 03/01/2024 3,993,575. 00 3,993,575.00 232, 490,000 232,490,000 09/01/2024 3,993,575.00 3,993,575.00 7,987,150. 00 232,490,000 232,490,000 03/01/2025 3,993,575. 00 3,993,575.00 232, 490,000 232,490,000 09/01/2025 3,993,575.00 3,993,575.00 7,987,150. 00 232,490,000 232,490,000 03/01/2026 3,993,575. 00 3,993,575.00 232, 490,000 232,490,000 09/01/2026 3,993,575.00 3,993,575.00 7,987,150. 00 232,490,000 232,490,000 03/01/2027 3,993,575. 00 3,993,575.00 232, 490,000 232,490,000 09/01/2027 190,000 3.250% 3,993, 575.00 4,183,575.00 8,177, 150.00 232,300,000 232,300,000 03/01/2028 185,000 3.250% 3,990,487.50 4,175,487. 50 232,115,000 232,115,000 09/01/2028 360,000 3.250% 3,987, 481.25 4,347,481.25 8,522, 968.75 231,755,000 231,755,000 03/01/2029 365,000 3.250% 3,981,631.25 4,346,631. 25 231,390,000 231,390,000 09/01/2029 555,000 3.250% 3,975, 700.00 4,530,700.00 8,877, 331.25 230,835,000 230,835,000 03/01/2030 560,000 3.250% 3,966,681.25 4,526,681. 25 230,275,000 230,275,000 09/01/2030 760,000 3.250% 3,957, 581.25 4,717,581.25 9,244, 262.50 229,515,000 229,515,000 03/01/2031 770,000 3.250% 3,945,231.25 4,715,231. 25 228,745,000 228,745,000 09/01/2031 6,975,000 3.250% 3, 932,718.75 10,907,718. 75 15,622,950.00 221, 770,000 221,770,000 03/01/2032 1,045,000 3.250% 3,819,375.00 4,864,375. 00 220,725,000 220,725,000 09/01/2032 1,145,000 3.250% 3, 802,393.75 4,947,393. 75 9,811,768.75 219, 580,000 219,580,000 03/01/2033 1,170,000 3.250% 3,783,787.50 4,953,787. 50 218,410,000 218,410,000 09/01/2033 1,390,000 3.250% 3, 764,775.00 5,154,775. 00 10,108,562.50 217, 020,000 217,020,000 03/01/2034 1,415,000 3.250% 3,742,187.50 5,157,187. 50 215,605,000 215,605,000 09/01/2034 1,650,000 3.250% 3, 719,193.75 5,369,193. 75 10,526,381.25 213, 955,000 213,955,000 03/01/2035 1,675,000 3.250% 3,692,381.25 5,367,381. 25 212,280,000 212,280,000 09/01/2035 1,920,000 3.250% 3, 665,162.50 5,585,162. 50 10,952,543.75 210, 360,000 210,360,000 03/01/2036 1,955,000 3.250% 3,633,962.50 5,588,962. 50 208,405,000 208,405,000 09/01/2036 2,205,000 3.250% 3, 602,193.75 5,807,193. 75 11,396,156.25 206, 200,000 206,200,000 03/01/2037 2,245,000 3.250% 3,566,362.50 5,811,362. 50 203,955,000 203,955,000 09/01/2037 2,515,000 3.250% 3, 529,881.25 6,044,881. 25 11,856,243.75 201, 440,000 201,440,000 03/01/2038 2,555,000 3.250% 3,489,012.50 6,044,012. 50 198,885,000 198,885,000 09/01/2038 2,835,000 3.250% 3, 447,493.75 6,282,493. 75 12,326,506.25 196, 050,000 196,050,000 03/01/2039 2,880,000 3.250% 3,401,425.00 6,281,425. 00 193,170,000 193,170,000 09/01/2039 3,170,000 3.250% 3, 354,625.00 6,524,625. 00 12,806,050.00 190, 000,000 190,000,000 03/01/2040 3,225,000 3.250% 3,303,112.50 6,528,112. 50 186,775,000 186,775,000 09/01/2040 3,530,000 3.250% 3, 250,706.25 6,780,706. 25 13,308,818.75 183, 245,000 183,245,000 03/01/2041 3,590,000 3.250% 3,193,343.75 6,783,343. 75 179,655,000 179,655,000 09/01/2041 3,905,000 3.250% 3, 135,006.25 7,040,006. 25 13,823,350.00 175, 750,000 175,750,000 03/01/2042 3,970,000 ** % 3,071, 550.00 7,041,550.00 171,780,000 171,780,000 09/01/2042 4,305,000 3.500% 3, 006,150.00 7,311,150. 00 14,352,700.00 167, 475,000 167,475,000 03/01/2043 4,380,000 3.500% 2,930,812.50 7,310,812. 50 163,095,000 163,095,000 09/01/2043 4,735,000 3.500% 2, 854,162.50 7,589,162. 50 14,899,975.00 158, 360,000 158,360,000 03/01/2044 4,815,000 3.500% 2,771,300.00 7,586,300. 00 153,545,000 153,545,000 09/01/2044 5,185,000 3.500% 2, 687,037.50 7,872,037. 50 15,458,337.50 148, 360,000 148,360,000 03/01/2045 5,280,000 3.500% 2,596,300.00 7,876,300. 00 143,080,000 143,080,000 09/01/2045 5,660,000 3.500% 2, 503,900.00 8,163,900. 00 16,040,200.00 137, 420,000 137,420,000 03/01/2046 5,765,000 3.500% 2,404,850.00 8,169,850. 00 131,655,000 131,655,000 09/01/2046 6,165,000 3.500% 2, 303,962.50 8,468,962. 50 16,638,812.50 125, 490,000 125,490,000 03/01/2047 6,270,000 3.500% 2,196,075.00 8,466,075. 00 119,220,000 119,220,000 09/01/2047 6,695,000 3.500% 2, 086,350.00 8,781,350. 00 17,247,425.00 112, 525,000 112,525,000 03/01/2048 6,815,000 3.500% 1,969,187.50 8,784,187. 50 105,710,000 105,710,000 09/01/2048 7,250,000 3.500% 1, 849,925.00 9,099,925. 00 17,884,112.50 98, 460,000 98,460,000 03/01/2049 7,380,000 3.500% 1,723,050.00 9,103,050. 00 91,080,000 91,080,000 09/01/2049 7,840,000 3.500% 1, 593,900.00 9,433,900. 00 18,536,950.00 83, 240,000 83,240,000 03/01/2050 7,975,000 3.500% 1,456,700.00 9,431,700. 00 75,265,000 75,265,000 09/01/2050 8,460,000 3.500% 1, 317,137.50 9,777,137. 50 19,208,837.50 66, 805,000 66,805,000 03/01/2051 8,605,000 3.500% 1,169,087.50 9,774,087. 50 58,200,000 58,200,000 09/01/2051 9,105,000 3.500% 1, 018,500.00 10,123,500. 00 19,897,587.50 49, 095,000 49,095,000 03/01/2052 9,265,000 3. 500% 859,162.50 10,124,162. 50 39,830,000 39,830,000 09/01/2052 9,790,000 3.500% 697, 025.00 10,487,025.00 20,611, 187.50 30,040,000 30,040,000 03/01/2053 9,965,000 3. 500% 525,700.00 10,490,700. 00 20,075,000 20,075,000 09/01/2053 10,505,000 3.500% 351, 312.50 10,856,312.50 21,347, 012.50 9,570,000 9,570,000 03/01/2054 9,570,000 3. 500% 167,475.00 9,737, 475.00 9,737,475.00 232,490,000 192,496,339.03 424, 986,339.03 424,986,339.03 604
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BOND DEBT SERVICE
Milpitas-Turing - Model v01
Series 2022B Mezzanine Bonds
Dated Date 03/09/2022
Delivery Date 03/09/2022
Period Bond Total
Ending Principal Coupon Interest Debt Service Balance Bond Value 09/01/2022 1,251,777. 78 1,251,777.78 65, 500,000 65,500,000 09/01/2023 2,620,000. 00 2,620,000.00 65, 500,000 65,500,000 09/01/2024 2,620,000. 00 2,620,000.00 65, 500,000 65,500,000 09/01/2025 2,620,000. 00 2,620,000.00 65, 500,000 65,500,000 09/01/2026 2,620,000. 00 2,620,000.00 65, 500,000 65,500,000 09/01/2027 2,620,000. 00 2,620,000.00 65, 500,000 65,500,000 09/01/2028 2,620,000. 00 2,620,000.00 65, 500,000 65,500,000 09/01/2029 2,620,000. 00 2,620,000.00 65, 500,000 65,500,000 09/01/2030 2,620,000. 00 2,620,000.00 65, 500,000 65,500,000 09/01/2031 2,620,000. 00 2,620,000.00 65, 500,000 65,500,000 09/01/2032 2,620,000. 00 2,620,000.00 65, 500,000 65,500,000 09/01/2033 2,620,000. 00 2,620,000.00 65, 500,000 65,500,000 09/01/2034 2,620,000. 00 2,620,000.00 65, 500,000 65,500,000 09/01/2035 2,620,000. 00 2,620,000.00 65, 500,000 65,500,000 09/01/2036 2,620,000. 00 2,620,000.00 65, 500,000 65,500,000 09/01/2037 2,620,000. 00 2,620,000.00 65, 500,000 65,500,000 09/01/2038 2,620,000. 00 2,620,000.00 65, 500,000 65,500,000 09/01/2039 2,620,000. 00 2,620,000.00 65, 500,000 65,500,000 09/01/2040 2,620,000. 00 2,620,000.00 65, 500,000 65,500,000 09/01/2041 2,620,000. 00 2,620,000.00 65, 500,000 65,500,000 09/01/2042 2,620,000. 00 2,620,000.00 65, 500,000 65,500,000 09/01/2043 2,620,000. 00 2,620,000.00 65, 500,000 65,500,000 09/01/2044 2,620,000. 00 2,620,000.00 65, 500,000 65,500,000 09/01/2045 2,620,000. 00 2,620,000.00 65, 500,000 65,500,000 09/01/2046 2,620,000. 00 2,620,000.00 65, 500,000 65,500,000 09/01/2047 2,620,000. 00 2,620,000.00 65, 500,000 65,500,000 09/01/2048 2,620,000. 00 2,620,000.00 65, 500,000 65,500,000 09/01/2049 2,620,000. 00 2,620,000.00 65, 500,000 65,500,000 09/01/2050 2,620,000. 00 2,620,000.00 65, 500,000 65,500,000 09/01/2051 2,620,000. 00 2,620,000.00 65, 500,000 65,500,000 09/01/2052 2,620,000. 00 2,620,000.00 65, 500,000 65,500,000 09/01/2053 2,620,000. 00 2,620,000.00 65, 500,000 65,500,000 09/01/2054 20,495,000 4.000% 2,437,800.00 22,932,800. 00 45,005,000 45,005,000 09/01/2055 23,855,000 4.000% 1,567,900.00 25,422,900. 00 21,150,000 21,150,000 09/01/2056 21,150,000 4.000% 596,300.00 21,746,300.00
65,500,000 87,073,777. 78 152,573,777.78
605
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BOND DEBT SERVICE
Milpitas-Turing - Model v01
Series 2022B Mezzanine Bonds
Dated Date 03/09/2022
Delivery Date 03/09/2022
Period Annual Bond Total
Ending Principal Coupon Interest Debt Service Debt Service Balance Bond Value 03/09/2022 65,500,000 65,500,000
09/01/2022 1,251,777.78 1,251,777.78 1,251,777. 78 65,500,000 65,500,000 03/01/2023 1,310,000. 00 1,310,000.00 65, 500,000 65,500,000 09/01/2023 1,310,000.00 1,310,000.00 2,620,000. 00 65,500,000 65,500,000 03/01/2024 1,310,000. 00 1,310,000.00 65, 500,000 65,500,000 09/01/2024 1,310,000.00 1,310,000.00 2,620,000. 00 65,500,000 65,500,000 03/01/2025 1,310,000. 00 1,310,000.00 65, 500,000 65,500,000 09/01/2025 1,310,000.00 1,310,000.00 2,620,000. 00 65,500,000 65,500,000 03/01/2026 1,310,000. 00 1,310,000.00 65, 500,000 65,500,000 09/01/2026 1,310,000.00 1,310,000.00 2,620,000. 00 65,500,000 65,500,000 03/01/2027 1,310,000. 00 1,310,000.00 65, 500,000 65,500,000 09/01/2027 1,310,000.00 1,310,000.00 2,620,000. 00 65,500,000 65,500,000 03/01/2028 1,310,000. 00 1,310,000.00 65, 500,000 65,500,000 09/01/2028 1,310,000.00 1,310,000.00 2,620,000. 00 65,500,000 65,500,000 03/01/2029 1,310,000. 00 1,310,000.00 65, 500,000 65,500,000 09/01/2029 1,310,000.00 1,310,000.00 2,620,000. 00 65,500,000 65,500,000 03/01/2030 1,310,000. 00 1,310,000.00 65, 500,000 65,500,000 09/01/2030 1,310,000.00 1,310,000.00 2,620,000. 00 65,500,000 65,500,000 03/01/2031 1,310,000. 00 1,310,000.00 65, 500,000 65,500,000 09/01/2031 1,310,000.00 1,310,000.00 2,620,000. 00 65,500,000 65,500,000 03/01/2032 1,310,000. 00 1,310,000.00 65, 500,000 65,500,000 09/01/2032 1,310,000.00 1,310,000.00 2,620,000. 00 65,500,000 65,500,000 03/01/2033 1,310,000. 00 1,310,000.00 65, 500,000 65,500,000 09/01/2033 1,310,000.00 1,310,000.00 2,620,000. 00 65,500,000 65,500,000 03/01/2034 1,310,000. 00 1,310,000.00 65, 500,000 65,500,000 09/01/2034 1,310,000.00 1,310,000.00 2,620,000. 00 65,500,000 65,500,000 03/01/2035 1,310,000. 00 1,310,000.00 65, 500,000 65,500,000 09/01/2035 1,310,000.00 1,310,000.00 2,620,000. 00 65,500,000 65,500,000 03/01/2036 1,310,000. 00 1,310,000.00 65, 500,000 65,500,000 09/01/2036 1,310,000.00 1,310,000.00 2,620,000. 00 65,500,000 65,500,000 03/01/2037 1,310,000. 00 1,310,000.00 65, 500,000 65,500,000 09/01/2037 1,310,000.00 1,310,000.00 2,620,000. 00 65,500,000 65,500,000 03/01/2038 1,310,000. 00 1,310,000.00 65, 500,000 65,500,000 09/01/2038 1,310,000.00 1,310,000.00 2,620,000. 00 65,500,000 65,500,000 03/01/2039 1,310,000. 00 1,310,000.00 65, 500,000 65,500,000 09/01/2039 1,310,000.00 1,310,000.00 2,620,000. 00 65,500,000 65,500,000 03/01/2040 1,310,000. 00 1,310,000.00 65, 500,000 65,500,000 09/01/2040 1,310,000.00 1,310,000.00 2,620,000. 00 65,500,000 65,500,000 03/01/2041 1,310,000. 00 1,310,000.00 65, 500,000 65,500,000 09/01/2041 1,310,000.00 1,310,000.00 2,620,000. 00 65,500,000 65,500,000 03/01/2042 1,310,000. 00 1,310,000.00 65, 500,000 65,500,000 09/01/2042 1,310,000.00 1,310,000.00 2,620,000. 00 65,500,000 65,500,000 03/01/2043 1,310,000. 00 1,310,000.00 65, 500,000 65,500,000 09/01/2043 1,310,000.00 1,310,000.00 2,620,000. 00 65,500,000 65,500,000 03/01/2044 1,310,000. 00 1,310,000.00 65, 500,000 65,500,000 09/01/2044 1,310,000.00 1,310,000.00 2,620,000. 00 65,500,000 65,500,000 03/01/2045 1,310,000. 00 1,310,000.00 65, 500,000 65,500,000 09/01/2045 1,310,000.00 1,310,000.00 2,620,000. 00 65,500,000 65,500,000 03/01/2046 1,310,000. 00 1,310,000.00 65, 500,000 65,500,000 09/01/2046 1,310,000.00 1,310,000.00 2,620,000. 00 65,500,000 65,500,000 03/01/2047 1,310,000. 00 1,310,000.00 65, 500,000 65,500,000 09/01/2047 1,310,000.00 1,310,000.00 2,620,000. 00 65,500,000 65,500,000 03/01/2048 1,310,000. 00 1,310,000.00 65, 500,000 65,500,000 09/01/2048 1,310,000.00 1,310,000.00 2,620,000. 00 65,500,000 65,500,000 03/01/2049 1,310,000. 00 1,310,000.00 65, 500,000 65,500,000 09/01/2049 1,310,000.00 1,310,000.00 2,620,000. 00 65,500,000 65,500,000 03/01/2050 1,310,000. 00 1,310,000.00 65, 500,000 65,500,000 09/01/2050 1,310,000.00 1,310,000.00 2,620,000. 00 65,500,000 65,500,000 03/01/2051 1,310,000. 00 1,310,000.00 65, 500,000 65,500,000 09/01/2051 1,310,000.00 1,310,000.00 2,620,000. 00 65,500,000 65,500,000 03/01/2052 1,310,000. 00 1,310,000.00 65, 500,000 65,500,000 09/01/2052 1,310,000.00 1,310,000.00 2,620,000. 00 65,500,000 65,500,000 03/01/2053 1,310,000. 00 1,310,000.00 65, 500,000 65,500,000 09/01/2053 1,310,000.00 1,310,000.00 2,620,000. 00 65,500,000 65,500,000 03/01/2054 9,110,000 4.000% 1,310,000.00 10,420,000. 00 56,390,000 56,390,000 09/01/2054 11,385,000 4.000% 1, 127,800.00 12,512,800. 00 22,932,800.00 45, 005,000 45,005,000 606
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BOND DEBT SERVICE
Milpitas-Turing - Model v01
Series 2022B Mezzanine Bonds
Period Annual Bond Total
Ending Principal Coupon Interest Debt Service Debt Service Balance Bond Value 03/01/2055 11,615,000 4. 000% 900,100.00 12,515,100. 00 33,390,000 33,390,000 09/01/2055 12,240,000 4.000% 667, 800.00 12,907,800.00 25,422, 900.00 21,150,000 21,150,000 03/01/2056 12,485,000 4. 000% 423,000.00 12,908,000. 00 8,665,000 8,665,000 09/01/2056 8,665,000 4. 000% 173,300.00 8,838, 300.00 21,746,300.00 65,500,000 87,073,777.78 152, 573,777.78 152,573,777.78 607
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BOND DEBT SERVICE
Milpitas-Turing - Model v01
Series 2022C Subordinate Bonds
Dated Date 03/09/2022
Delivery Date 03/09/2022
Period Bond Total
Ending Principal Coupon Interest Debt Service Balance Bond Value 09/01/2022 (238,888.89) 238,888.89 5,238,888. 89 5,238,888.89 09/01/2023 (494,174.59) 500,000.00 5,825.41 5, 733,063.48 5,733,063.48 09/01/2024 (500,000.00) 500,000.00 6,233,063. 48 6,233,063.48 09/01/2025 (407,626.49) 500,000.00 92,373.51 6, 640,689.97 6,640,689.97 09/01/2026 (157,626.49) 500,000.00 342,373.51 6, 798,316.46 6,798,316.46 09/01/2027 500,000.00 500,000.00 6,798,316. 46 6,798,316.46 09/01/2028 500,000.00 500,000.00 6,798,316. 46 6,798,316.46 09/01/2029 500,000.00 500,000.00 6,798,316. 46 6,798,316.46 09/01/2030 500,000.00 500,000.00 6,798,316. 46 6,798,316.46 09/01/2031 500,000.00 500,000.00 6,798,316. 46 6,798,316.46 09/01/2032 500,000.00 500,000.00 6,798,316. 46 6,798,316.46 09/01/2033 500,000.00 500,000.00 6,798,316. 46 6,798,316.46 09/01/2034 500,000.00 500,000.00 6,798,316. 46 6,798,316.46 09/01/2035 500,000.00 500,000.00 6,798,316. 46 6,798,316.46 09/01/2036 500,000.00 500,000.00 6,798,316. 46 6,798,316.46 09/01/2037 500,000.00 500,000.00 6,798,316. 46 6,798,316.46 09/01/2038 500,000.00 500,000.00 6,798,316. 46 6,798,316.46 09/01/2039 500,000.00 500,000.00 6,798,316. 46 6,798,316.46 09/01/2040 500,000.00 500,000.00 6,798,316. 46 6,798,316.46 09/01/2041 500,000.00 500,000.00 6,798,316. 46 6,798,316.46 09/01/2042 500,000.00 500,000.00 6,798,316. 46 6,798,316.46 09/01/2043 500,000.00 500,000.00 6,798,316. 46 6,798,316.46 09/01/2044 500,000.00 500,000.00 6,798,316. 46 6,798,316.46 09/01/2045 500,000.00 500,000.00 6,798,316. 46 6,798,316.46 09/01/2046 500,000.00 500,000.00 6,798,316. 46 6,798,316.46 09/01/2047 500,000.00 500,000.00 6,798,316. 46 6,798,316.46 09/01/2048 500,000.00 500,000.00 6,798,316. 46 6,798,316.46 09/01/2049 500,000.00 500,000.00 6,798,316. 46 6,798,316.46 09/01/2050 500,000.00 500,000.00 6,798,316. 46 6,798,316.46 09/01/2051 500,000.00 500,000.00 6,798,316. 46 6,798,316.46 09/01/2052 500,000.00 500,000.00 6,798,316. 46 6,798,316.46 09/01/2053 500,000.00 500,000.00 6,798,316. 46 6,798,316.46 09/01/2054 500,000.00 500,000.00 6,798,316. 46 6,798,316.46 09/01/2055 500,000.00 500,000.00 6,798,316. 46 6,798,316.46 09/01/2056 6,798,316.46 ** % 500,000.00 7,298,316.46
5,000,000.00 17,238, 888.89 22,238,888.89
608
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BOND DEBT SERVICE
Milpitas-Turing - Model v01
Series 2022C Subordinate Bonds
Dated Date 03/09/2022
Delivery Date 03/09/2022
Period Annual Bond Total
Ending Principal Coupon Interest Debt Service Debt Service Balance Bond Value 03/09/2022 5,000,000.00 5,000,000.00
09/01/2022 (238,888.89) 238,888.89 5,238,888. 89 5,238,888.89 03/01/2023 (244,174.59) 250,000.00 5,825.41 5, 483,063.48 5,483,063.48 09/01/2023 (250,000.00) 250,000.00 5,825.41 5, 733,063.48 5,733,063.48 03/01/2024 (250,000.00) 250,000.00 5,983,063. 48 5,983,063.48 09/01/2024 (250,000.00) 250,000.00 6,233,063. 48 6,233,063.48 03/01/2025 (250,000.00) 250,000.00 6,483,063. 48 6,483,063.48 09/01/2025 (157,626.49) 250,000.00 92,373.51 92,373.51 6,640,689. 97 6,640,689.97 03/01/2026 (157,626.49) 250,000.00 92,373.51 6, 798,316.46 6,798,316.46 09/01/2026 250,000.00 250, 000.00 342,373.51 6,798, 316.46 6,798,316.46 03/01/2027 250,000.00 250,000.00 6,798,316. 46 6,798,316.46 09/01/2027 250,000.00 250, 000.00 500,000.00 6,798, 316.46 6,798,316.46 03/01/2028 250,000.00 250,000.00 6,798,316. 46 6,798,316.46 09/01/2028 250,000.00 250, 000.00 500,000.00 6,798, 316.46 6,798,316.46 03/01/2029 250,000.00 250,000.00 6,798,316. 46 6,798,316.46 09/01/2029 250,000.00 250, 000.00 500,000.00 6,798, 316.46 6,798,316.46 03/01/2030 250,000.00 250,000.00 6,798,316. 46 6,798,316.46 09/01/2030 250,000.00 250, 000.00 500,000.00 6,798, 316.46 6,798,316.46 03/01/2031 250,000.00 250,000.00 6,798,316. 46 6,798,316.46 09/01/2031 250,000.00 250, 000.00 500,000.00 6,798, 316.46 6,798,316.46 03/01/2032 250,000.00 250,000.00 6,798,316. 46 6,798,316.46 09/01/2032 250,000.00 250, 000.00 500,000.00 6,798, 316.46 6,798,316.46 03/01/2033 250,000.00 250,000.00 6,798,316. 46 6,798,316.46 09/01/2033 250,000.00 250, 000.00 500,000.00 6,798, 316.46 6,798,316.46 03/01/2034 250,000.00 250,000.00 6,798,316. 46 6,798,316.46 09/01/2034 250,000.00 250, 000.00 500,000.00 6,798, 316.46 6,798,316.46 03/01/2035 250,000.00 250,000.00 6,798,316. 46 6,798,316.46 09/01/2035 250,000.00 250, 000.00 500,000.00 6,798, 316.46 6,798,316.46 03/01/2036 250,000.00 250,000.00 6,798,316. 46 6,798,316.46 09/01/2036 250,000.00 250, 000.00 500,000.00 6,798, 316.46 6,798,316.46 03/01/2037 250,000.00 250,000.00 6,798,316. 46 6,798,316.46 09/01/2037 250,000.00 250, 000.00 500,000.00 6,798, 316.46 6,798,316.46 03/01/2038 250,000.00 250,000.00 6,798,316. 46 6,798,316.46 09/01/2038 250,000.00 250, 000.00 500,000.00 6,798, 316.46 6,798,316.46 03/01/2039 250,000.00 250,000.00 6,798,316. 46 6,798,316.46 09/01/2039 250,000.00 250, 000.00 500,000.00 6,798, 316.46 6,798,316.46 03/01/2040 250,000.00 250,000.00 6,798,316. 46 6,798,316.46 09/01/2040 250,000.00 250, 000.00 500,000.00 6,798, 316.46 6,798,316.46 03/01/2041 250,000.00 250,000.00 6,798,316. 46 6,798,316.46 09/01/2041 250,000.00 250, 000.00 500,000.00 6,798, 316.46 6,798,316.46 03/01/2042 250,000.00 250,000.00 6,798,316. 46 6,798,316.46 09/01/2042 250,000.00 250, 000.00 500,000.00 6,798, 316.46 6,798,316.46 03/01/2043 250,000.00 250,000.00 6,798,316. 46 6,798,316.46 09/01/2043 250,000.00 250, 000.00 500,000.00 6,798, 316.46 6,798,316.46 03/01/2044 250,000.00 250,000.00 6,798,316. 46 6,798,316.46 09/01/2044 250,000.00 250, 000.00 500,000.00 6,798, 316.46 6,798,316.46 03/01/2045 250,000.00 250,000.00 6,798,316. 46 6,798,316.46 09/01/2045 250,000.00 250, 000.00 500,000.00 6,798, 316.46 6,798,316.46 03/01/2046 250,000.00 250,000.00 6,798,316. 46 6,798,316.46 09/01/2046 250,000.00 250, 000.00 500,000.00 6,798, 316.46 6,798,316.46 03/01/2047 250,000.00 250,000.00 6,798,316. 46 6,798,316.46 09/01/2047 250,000.00 250, 000.00 500,000.00 6,798, 316.46 6,798,316.46 03/01/2048 250,000.00 250,000.00 6,798,316. 46 6,798,316.46 09/01/2048 250,000.00 250, 000.00 500,000.00 6,798, 316.46 6,798,316.46 03/01/2049 250,000.00 250,000.00 6,798,316. 46 6,798,316.46 09/01/2049 250,000.00 250, 000.00 500,000.00 6,798, 316.46 6,798,316.46 03/01/2050 250,000.00 250,000.00 6,798,316. 46 6,798,316.46 09/01/2050 250,000.00 250, 000.00 500,000.00 6,798, 316.46 6,798,316.46 03/01/2051 250,000.00 250,000.00 6,798,316. 46 6,798,316.46 09/01/2051 250,000.00 250, 000.00 500,000.00 6,798, 316.46 6,798,316.46 03/01/2052 250,000.00 250,000.00 6,798,316. 46 6,798,316.46 09/01/2052 250,000.00 250, 000.00 500,000.00 6,798, 316.46 6,798,316.46 03/01/2053 250,000.00 250,000.00 6,798,316. 46 6,798,316.46 09/01/2053 250,000.00 250, 000.00 500,000.00 6,798, 316.46 6,798,316.46 03/01/2054 250,000.00 250,000.00 6,798,316. 46 6,798,316.46 09/01/2054 250,000.00 250, 000.00 500,000.00 6,798, 316.46 6,798,316.46 609
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BOND DEBT SERVICE
Milpitas-Turing - Model v01
Series 2022C Subordinate Bonds
Period Annual Bond Total
Ending Principal Coupon Interest Debt Service Debt Service Balance Bond Value 03/01/2055 250,000.00 250,000.00 6,798,316. 46 6,798,316.46 09/01/2055 250,000.00 250, 000.00 500,000.00 6,798, 316.46 6,798,316.46 03/01/2056 250,000.00 250,000.00 6,798,316. 46 6,798,316.46 09/01/2056 6,798,316.46 ** % 250,000.00 7,048,316. 46 7,298,316.46 5,000,000.00 17,238,888.89 22,238,888.89 22,238,888.89
610
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DISCLAIMER

CSCDA COMMUNITY IMPROVEMENT AUTHORITY
Essential Housing Revenue Bonds
Series 2022AB
(Turing-Milpitas) (Social Bonds)
*** Preliminary, Subject to Change ***
GOLDMAN SACHS IS NOT ACTING AS A MUNICIPAL ADVISOR. The information contained herein is for discussion purposes only in connection with serving as underwriter of securities offered by or on behalf of you. The primary role of Goldman, Sachs & Co. ('GS'), as an underwriter, is to purchase securities, for resale to investors, in an arm's-length commercial transaction between the issuer and GS and GS has financial and other interests that differ from those of the issuer and obligated person(s), as applicable. GS is not acting as a municipal advisor or financial advisor to you and GS has not assumed a fiduciary to you or any other person or entity in connection with these materials or the matters contemplated herein. The information provided is not intended to be and should not be construed as a recommendation that you take any action contemplated herein. Prior to taking any actions contemplated herein, you should consult with your own financial and/or municipal, legal, accounting, tax and other advisors to the extent you deem appropriate. This material is not a commitment by you or GS to undertake any transaction contemplated herein.

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611
Goal Performance Measure Comply? Comments
A. AFFORDABILITY LEVEL A1. Housing units below market-rate and affordable to Moderate-Income Households per HCD
standards for Santa Clara County. Units for Low
Income Households encouraged.

No Based on HCD standards, only 60% of the units would be affordable to Moderate-Income Households and no units would be affordable to Low-Income Households. CSCDA CIA program allows for higher CTCAC rent and income limits.

A2. Rents based on Moderate Income Households
paying maximum 30% of gross household income
for housing costs (rent and utilities).

No Project Team agrees to base rents on 30% of gross household income, but utility expenses are not included in calculating maximum rents per HUD standards.

B. RENT INCREASES B1. Annual rent increases will not exceed 4% or the annual allowable percentage rent increase
established by HUD, whichever is lower.

Yes Regulatory Agreement includes this provision.

B2. Owner agrees to submit proposed rent
increases for City review and approval.

No Project Team does not agree to allowing for City review and approval of rent increases.

B3. Owner agrees to submit an annual report to City
certifying compliance with affordability covenants.

Yes Project Team agrees to submit annual certification.

C. EXISTING TENANTS C1. Non-Qualified Tenants (exceeding 120% AMI) allowed to remain in unit paying market rents.

Yes Non-Qualified Tenants (exceeding 120% AMI) will be allowed to stay in their units.

C2. Qualified Tenants (120% AMI or below) will
benefit from a minimum 10% rent reduction.

No Project Team proposes 12-18% rent reduction from current rents for existing qualifying tenants, but provision not included in Regulatory or Public Benefit Agreement (PBA).

ATTACHMENT 5
Turing CSCDA Proposal
Conformance to Draft Goals and Performance Measures

AFFORDABILITY CONSIDERATIONS
7-Feb-22
612
Goal Performance Measure Comply? Comments
D. LOCAL PREFERENCE POLICY D1. Owner will administer a tenant preference program in compliance with state and federal fair
housing regulations.

No Project Team has agreed to implment a local preference program, but provision needs to be added into Regulatory or PBA.

D2. Preference to teachers and staff employed in
public education institutions in Milpitas.

No Project Team has agreed to this preference, but provision needs to be added into Regulatory or PBA.

E. RHNA CREDIT E1. Project qualifies for full or partial RHNA credit, if feasible.

No Project Team has agreed to a 55-year affordability term, but other state requirements must be met to receive RHNA credit.

F. QUALIFICATIONS OF PROJECT
TEAM
F1: Project Administrator demonstrates extensive
development, management and financial
experience.

Yes CSCDA proposes Waterford Property Company, LLC, to serve as Project Administrator.

F2. Property Manager demonstrates extensive
residential management experience, including
affordable housing and preference programs.

Yes CSCDA proposes Greystar Management Services, LP, to serve as Property Manager.

G. CITY EVALUATION OF

PROPOSALS
G1. Project proponent deposits funds for
consultants to analyze proposal.

Yes Project Team has provided funds to cover staff, City Attorney, and consultant costs.

H. CITY REVENUES H1. Project backfills lost City property tax and PTILVLF revenues through annual Host Fee.

Yes Project will fully backfill Milpitas's share of property taxes and PTILVLF with annual 2% increase.

H2. Host Fee is guaranteeed and in a senior lien
position.

Yes Project Team has agreed to pay Host Fee before administrator fees and principal and interest.

H3. Property taxes for non-residential portion of the
property will continue to be paid.

Yes Taxes for retail portion will continue to be paid with apportionment adjustment.

FINANCIAL CONSIDERATIONS

Page 2 of 5 ends

613
Goal Performance Measure Comply? Comments
x H4. Annual Infrastructure Fee will be paid
equivalent to City CFD 2008-1 special tax.

No Project Team has agreed to continue paying CFD 2008-1 special tax for the property, but provision needed in PBA.

I. PROJECT FINANCIAL VIABILITY I1. Income/expense assumptions conservatively reflect historical trends for residential projects in
Milpitas or Santa Clara County.

No City's consultant recommends modeling cashflow with more conservative assumptions. Current model assumes 5% vacancy rate, 3% annual rent increase, and three-year tenant turnover.

I2. Project demonstrates a minimum 1.0 Debt
Coverage Ratio (DCR) with rental income based on
Affordability Goals A and B.

No Rental income based on higher CTCAC income/rent limits. Applying recommended HCD standards and other adjustments, Project will not cover debt and expenses and could affect City's ability to acquire property at end of bond term.

I3. Ability to make amortized principal and interest
bond payments.

No Cashflow analysis shows income shortfall and inability to pay down principal based on conservative assumptions.

J. CITY FINANCIAL RISK/BOND

STRUCTURE
J1-J6. Include recommendations from bond advisor
on bond structure and City risk.

No PBA with included recommendations provided to Turing Project Team for response.

J7. PBA includes indemnification clause to limit
City’s liability and exposure.

No Project Team has not agreed to adding indemnification for City into PBA.

J8. City will be entitled to 100% of the property’s
reversion value at the end of the bond term.

Yes Project Team has agreed to amend PBA to remove uncertainty in City obligation.

K. DEBT REFINANCING K1. PBA includes City approval authority for debt refinancing or restructuring.

No Project Team has not agreed to City review and approval of any potential refinancing; indicate that refinancing is highly unlikely.

L. CAPITAL IMPROVEMENTS L1. Capital improvement needs and costs are determined for entire bond period.

Yes Project Team revised Project Conditions Report to reflect estimated cost of approximately $17.8 million for capital needs during the 35-year bond period.

LEVEL OF CAPITAL INVESTMENT

Page 3 of 5 ends

614
Goal Performance Measure Comply? Comments
L2. Capital improvement needs and costs covered
by project reserves and operating income during
entire bond period.

No Uncertain conclusion since based on higher CTCAC rental income and more aggressive cashflow assumptions.

L3. Capital improvement assessment prepared at
least every ten years.

Yes Provision included in PBA.

L4. Owner agrees to fund independent consultant
to prepare Capital Needs Assessment and adjust
reserve funds, if necessary.

No Project Team has agreed to this provision in PBA, but staff recommends amending language to allow for greater City
oversight.

M. CITY ENFORCEMENT

AUTHORITY
M1. City authority with remedies to enforce
compliance with the affordability requirements.

No Project Team has not agreed to add provision for City oversight of affordability covenant into Public Benefit Agreement.

M2. City enforcement abilities, remedies, and
consequences if project out of compliance.

No Project Team has not agreed to add provision for City enforcement remedies into Public Benefit Agreement.

N. MONITORING AND

REPORTING
N1. Owner submits annual Certificate of Continuing
Program Compliance.

Yes Provision included in PBA.

N2. Owner submits annual Property Financial,
Management, and Maintenance Reports.

Yes Provision included in PBA.

N3. City reserves the right to require independent
consultant to review annual report.

No Staff recommends adding this oversight provision into PBA.

N4. Owner agrees to submit annual monitoring fee
to cover City oversight and monitoring costs.

No Project Team proposes that Monitoring Fee is included in the Host Fee.

TRANSPARENCY AND OVERSIGHT

Page 4 of 5 ends

615
Goal Performance Measure Comply? Comments
O. PROJECT ADMINISTRATION

AND MANAGEMENT
O1. Owner agrees to submit management and
maintenance plans.

No Project Team has agreed to this requirement, but provision needs to be added into PBA.

O2. City authority to approve any replacement
Project Administrator or Property Manager.

No Staff recommends amendment to provision in Public Benefit Agreement to more fully comply with this measure.

Page 5 of 5 ends

616
ATTACHMENT 6
Turing Project Team Submittal
4137-0164-9970.3

RECORDING REQUESTED BY
CSCDA Community Improvement Authority

WHEN RECORDED RETURN TO:

Orrick, Herrington & Sutcliffe LLP
405 Howard Street
San Francisco, CA 94105
Attention: Steffi Chan

THIS DOCUMENT IS EXEMPT FROM RECORDING FEES PURSUANT TO SECTION 27383 OF THE

CALIFORNIA GOVERNMENT CODE

PUBLIC BENEFIT AGREEMENT

By and Between

CSCDA COMMUNITY IMPROVEMENT AUTHORITY

and

THE CITY OF MILPITAS

_________________________

Dated as of ___________________

_________________________

Relating to

CSCDA COMMUNITY IMPROVEMENT AUTHORITY
ESSENTIAL HOUSING SENIOR LIEN REVENUE BONDS, SERIES 2021A (TURING-MILPITAS) (SOCIAL BONDS)

CSCDA COMMUNITY IMPROVEMENT AUTHORITY
ESSENTIAL HOUSING MEZZANINE LIEN REVENUE BONDS, SERIES 2021B (TURING-MILPITAS) (SOCIAL BONDS)

and

CSCDA COMMUNITY IMPROVEMENT AUTHORITY
ESSENTIAL HOUSING SUBORDINATE LIEN REVENUE BONDS, SERIES 2021C (TURING-MILPITAS)
617
ATTACHMENT 6
Turing Project Team Submittal
4137-0164-9970.3

PUBLIC BENEFIT AGREEMENT
This PUBLIC BENEFIT AGREEMENT (“Agreement ”) is dated as of _______________ by and between the CSCDA COMMUNITY IMPROVEMENT AUTHORITY a joint exercise of powers agency organized and existing under the laws of the S tate of California (including its successors and assigns, “Owner”) and THE CITY OF MILPITAS (“Host”).

BACKGROUND
WHEREAS, Owner proposes to issue Bonds (as hereinafter defined) to finance Owner’s acquisition of the certain multifamily rental housing project (the “ Project”) located at 1355 McCandles Drive, Milpitas , California, located on the real property site described in Exhibit A hereto; and
WHEREAS, Owner intends to sell the Project at the instigation of the Host or upon the retirement of all Project Debt (as defined herein) pursuant to this Agreement.

AGREEMENT
In consideration of the mutual covenants herein contained, and such other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, Owner and Host mutually agree as follows:

Section 1. Right to Cause Sale. Host shall have the right to cause (“Sale Right”) Owner to sell the Property (as herein defined) upon pay ment by the purchaser thereof (the “Purchaser”) of the applicable Sale Price (as herein provided) within the Sale Right Term (as herein defined) as provided in Section 4 hereof or following the Sale Right Term as provided in Section 5 hereof, and in each case, in compliance with and observance of all of the terms and conditions of this Agreement.

Section 2. Definitions. Capitalized terms used in this Agreement shall have the meanings assigned to them in this Section 2; capitalized terms used in this Agreement and not defined in this Section 2 or elsewhere herein shall have the meanings assigned to them in the Indenture (herein defined).
(a) “Bonds” – collectively, (i) the CSCDA Community Improvement Authority Essential Housing Senior Lien Revenue Bonds , Series 2021A ( Turing-Milpitas) (Social Bonds) (the “Series A Bonds”), (ii) the CSCDA Community Improvement Authority Essential Housing Mezzanine Lien Revenue Bonds , Series 2021B ( Turing-Milpitas) (Social Bonds) (the “Series B Bonds”), and (iii) the CSCDA Community Improvement Authority Essential Housing Subordinate Lien Revenue Bonds , Series 2021C ( Turing-Milpitas) (the “Series C Bonds”), with such other series and sub- series designations as may be set forth in the Indenture, originally issued to finance Owner’s acquisition of the Project and related transaction costs. (b) “Bond Trustee ” – Wilmington Trust, National Association or any successor trustee under the Indenture.
(c) “Closing” – shall have the meaning set forth in Section 8 hereof. 618
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(d) “Conveyance” – that transaction or ser ies of transactions by which Owner shall transfer, bargain, sell and convey any and all right, title or interest in and to the Property. (e) “Extraordinary Costs and Expenses ” – shall have the meaning set forth in the Indenture.
(f) “Indenture” – the Trust Indenture between Owner, as issuer, and Bond Trustee, as trustee, pursuant to which the Bonds were issued.
(g) “Minimum Sale Price ” – means the lowest price at which the Property may be sold, as described in Section 4(c) hereof.
(h) “Outstanding” – with respect to Bonds, as of any given date, all Bonds which have been authenticated and delivered by the Trustee under the Indenture, except: (i) Bonds cancelled at or prior to such date or delivered to or acquired by the Trustee at or prior to such date for cancellation; (ii) Bonds deemed to be paid in accordance with Article VIII of the Indenture; and (iii) Bonds in lieu of which other Bonds have been authenticated under the Indenture. (i) “Owner Indemnified Person” – Owner and each of its officers, governing members, directors, officials, employees, attorneys, agents and members. (j) “Project Administrator” – Waterford Property Company, LLC and its successors and assigns.
(k) “Project Debt ” – any debt secured by the Proje ct and incurred to finance or refinance Owner’s acquisition of the Project and related transaction costs, including any portion of the Bonds and any bonds, notes or other indebtedness issued by Owner to improve the Project or to refund the Bonds in whole or in part.
(l) “Property” – means all of Owner’s right, title and interest (which includes fee simple title to the real property) in and to all property and assets used in or otherwise related to the operation of the Project including, without limitation, all real property and interests in real property, all tangible and intangible personal property including furniture, fixtures, equipment, supplies, intellectual property, licenses, permits, approvals, and contractual rights of any kind or nature together with the right to own and carry on the business and operations of the Project. (m) “Regulatory Agreement” – means the Regulatory Agreement and Declaration of Restrictive Covenants by and between Owner and Bond Trustee, relating to the Bonds. (n) “Sale Price” – purchase price of the Property to be paid by the Purchaser upon sale of the Property by Owner pursuant to Host’s Sale Right in compliance with Section 4 hereof or sale by Owner pursuant to Section 5 hereof.
(o) “Sale Right ” – means the right of Host to cause Owner to sell the Property pursuant to Section 1 hereof.
(p) “Sale Right Exercise Date” – the date fifteen (15) years from the issuance of the Bonds.
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(q) “Sale Right Term” – shall commence on the Sale Right Exercise Date and, if not exercised, shall terminate on the date on which no Project Debt remains outstanding. (r) “Transaction Costs” – to the extent not otherwise described herein, any costs or expenses of any kind or nature associated with or incurred by Owner and/or Bond Trustee in connection with the consummati on of the Conveyance , regardless of whether such costs and expenses are customarily borne by the seller or purchaser in a ny such transaction, including but not limited to taxes, recording fees and other impositions, Owner’s and Bond Trustee’s legal and other professional fees, fees for verification agents, bidding agents, escrow agents, custodians or trustees, assumption fees, prepayment fees, the cost of the appraisal, brokers’ fees and expenses, surveys, inspections, title commitments, title insurance premiums and other title-related fees, and all amounts required for indemnification of Owner, Bond Trustee and Project Administrator.

Section 3. Effectiveness; Term and Termination . The Sale Right shall become effective on the Sale Right Exercise Date and may be exercised during the Sale Right Term. Owner agrees that it will not enter into any agreement to sell all or any part of the Property during the Sale Right Term other than as may be required by the Indenture (e.g., in the event of default) , without the specific written request of the Host and delivery of an Opinion of Bond Counsel to Bond Trustee substantially to the effect that such sale will not, in and of itself, adversely affect the exclusion of interest on the Bonds from gross income for purposes of federal income taxation.

Section 4. Manner of Exercise.
(a) Host’s Notice . To exercise the Sale Right , Host shall provide a notice (an “Exercise Notice”) to Owner (with a copy to the Project Administrator) at any time during the Sale Right Term.
(b) Owner’s Best Efforts to Sell. Unless Host notifies Owner in writing that it is withdrawing its Exercise Notice within fifteen (15) business days of delivering the Exercise Notice under Section 4(a) hereof, Owner shall exercise its best efforts in selling and conveying good and marketable title to the Property within ninety (90) days following receipt of the Exercise Notice , or as soon as possible thereafter , but only if it can sell at or above the Minimum Sale Price. The obligation of Owner to sell and convey the Property shall be on a best efforts basis. Owner shall endeavor to sell the Property at a commercially reasonable price, subject to subsection (c) of this Section, by such means as it shall determine to be suitable for such purpose; provided that Host may direct Owner to sell the Property to Host, to a non- profit corporation designated by Host or to a limited partnership (that has a non-profit corporation as a general partner) designated by Host at a price less than commercially reasonable but at o r above the Minimum Sale Price; provided further that Owner’s determination of the manner of sale and Sale Price shall be final and incontestable, and Owner shall incur no liability to any party as a result of or otherwise in connection with the sale or failure to sell. Subject to subsection (c), nothing herein shall require or prevent Owner selling the Property subject to the restrictions set forth in the Regulatory Agreement or similar types of restrictions established by Owner with the approval of Host. Owner shall direct the Bond Trustee in the foregoing as and to the extent necessary or appropriate. 620
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(c) Sale Price. T he Sale Price shall be at least equal to the sum of the amounts set forth below (net of any adjustments or prorations of the type described in Section 8(b)) (the “Minimum Sale Price”):
i. an amount sufficient to either prepay, redeem in whole or fully defease for redemption on the earliest call date all Project Debt; plus ii. any fees or other amounts not identified in clause (i) that may be necessary to effect the complete release from and discharge of any lien, mortgage or other encumbrance on the Property; plus
iii. any amounts due to Owner (including Owner Indemnified Persons, as provided in the Indenture), the Bond Trustee or any predecessor or successor, or any other Person under any indenture, loan agreement, bond, note or other instrument relating to any Project Debt (including, without limitation, indemnification amounts, Owner’s Extraordinary Costs and Expenses, recurrent and extraordinary fees and expenses, and reimbursable costs and expenses of any kind or nature); plus
iv. Transaction Costs; minus
v. Any funds held by or for Owner under the Indenture applied to the retirement of Project Debt. Owner may retain such portion of moneys in the Extraordinary Expense Fund or similar fund under the Indenture it deems reasonable as a reserve against future expected costs and expenses of the type described in subparagraph (iii). Owner’s determination of this amount shall be final and incontestable.

Section 5. Mandatory Conveyance. Upon the retirement of all Project Debt, Owner shall use its best efforts to effect a Conveyance within ninety (90) days thereafter , subject to Section 4(c) hereof; provided, however, that Host, by notice to Owner within two (2) weeks af ter notice from Owner that no Project Debt remains outstanding, shall have the option to cause Owner to sell the Property (i) to a non- profit corporation or a limited partnership (that has a non- profit corporation as a general partner) designated by Host upon payment by such non-profit corporation or limited partnership, as applicable, of a sale price approved by Host, which sale price shall be at least equal to the Minimum Sale Price, or (ii) to Host upon payment of the Minimum Sale Price .

Nothing herein shall require or prevent Owner selling the Property subject to the restrictions set forth in the Regulatory Agreement or similar types of restrictions established by Owner with the approval of Host.

Section 6. Surplus Cash; Surplus Conveyance Proceeds. Upon a Conveyance of the Property, Owner shall apply the proceeds of such Conveyance (i) to redeem the Bonds then Outstanding, (ii) to prepay, redeem in whole or fully defease any other Project Debt, and (iii) to pay any fees or other amounts listed in Sec tion 4(c)(ii) – (iv). Any proceeds remaining following the foregoing payments (such remaining amounts hereinafter referred to as “ Surplus Conveyance Proceeds”) shall be transferred to Host and Host shall share such Surplus Conveyance Proceeds 621
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with other ta xing agencies selected by Host, and in the amounts determined by Host in its sole discretion and responsibility.

Section 7. Terms of Conveyance.
(a) The Conveyance shall be in the nature of a grant deed to Purchaser in which Owner shall deliver one or more deeds, bills of sale, or other instruments of transfer without recourse or warranty of any kind or nature.
(b) The Property will be conveyed to Purchaser in AS IS CONDITION, WITH ALL FAULTS, and without representations or warranties of any kind or nature as to the condition of the Property.
(c) There shall be no partial transfer and that, upon consummation of the Conveyance, Owner shall be fully divested of any and all right, title or interest in and to the Property.

Section 8. Closing.
(a) The closing of the Conveyance (“ Closing”) shall take place, in the case of a Conveyance pursuant to Section 4 hereof, not later than the ninetieth (90th) calendar day following Owner’s receipt of the Exercise Notice, or as soon as possible thereafter, and in the case of a mandatory conveyance pursuant to Section 5 hereof , not later than the ninetieth (90th) calendar day following the retirement of all Project Debt, or as soon as possible thereafter. (b) Prorations. All general and special real property taxes and assessments, and rents shall be prorated as of the Closing, with Purchaser responsible for all such items to the extent arising or due at any time following the C losing. General real property taxes shall be prorated at the time of Closing based on the net general real property taxes for the year of Closing.

Section 9. Recording. This Agreement, and any amendment thereto, shall be recorded with the recorder’s office of the County; provided , that upon termination of the term of this Agreement, Host shall cooperate with Owner to remove any such recorded Agreement or amendment thereto from title to the Property upon Owner’s reasonable request therefor and, in any event, by no later than thirty (30) days after the expiration of the original term of this Agreement.

In the event that, within said time, Host fails to so cooperate and provide its original signature to a termination of such recorded Agreement or amendment thereto , then Host hereby irrevocably constitutes and appoints Owner as Host’s tr ue and lawful attorney (and agent -in-fact) to execute in Host’s name any such termination.

Section 10. Subordination. This Agreement shall be subordinate to any claim, pledge or interest in the Property securing the Bonds or any Project Debt.

Section 11. Maintenance of Membership. In order to preserve the Property’s exemption from property tax, Host agrees to remain a member of Owner joint powers authority so long as any Bonds remain Outstanding.
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Section 12. Assignment. Neither party to this Agreement shall assign its interests, obligations, rights and/or responsibilities under this Agreement without the prior written consent of the other party.

Section 13. Limitation on Liability.
(a) Owner shall not be directly, indirectly, contingently or otherwise liable for any costs, expenses, losses, damages, claims or actions, of any conceivable kind on any conceivable theory, under or by reason of or in connection with this Agreement or any sale or Conveyance or failure or price thereof or application of proceeds thereof, except only as to moneys available therefor under and in accordance with the Indenture or this Agreement. (b) No Owner Indemnified Person shall be individually or personally liable for the payment of any sum hereunder or be subject to any personal liability or accountability by reason of the execution and delivery of this Agreement , or by any proceedings for the sale or Conveyance or failure or price thereof, or Host’s exercise or waiver of same, or otherwise except in the case of such Owner Indemnified Person’s own willful misconduct.

Section 14. Notices, Governing Law, Binding Effect and Other Miscellaneous Provisions.
(a) Notices. All notices provided for in this Agreement shall be in writing and shall be given to Owner or Host at the address set forth below or at such other address as they individually may specify thereafter by written notice in accordance herewith:

If to Owner or
Designated Agent:

CSCDA Community Improvement Authority
1700 North Broadway, Suite 405
Walnut Creek, California 94596
Attention: Jon Penkower
Email: [email protected]
With a copy to: Waterford Property Company, LLC
130 Newport Center, Suite 230
Newport Beach, California 92660
Attention: John Drachman
Email: [email protected]

If to Host: The City of Milpitas
455 East Calaveras Blvd.

Milpitas, California 95035
Attention: City Manager
Such notices shall be deemed effective upon actual delivery or upon the date that any such delivery was attempted and acceptance thereof was refused, or if mailed, certified return receipt requested, postage prepaid, properly addressed, three (3) days after posting. 623
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(b) Consents and Approvals. All consents and approvals a nd waivers required or asserted hereunder shall be in writing, signed by the party from whom such consent, approval, waiver or notice is requested.
(c) Non-liability of Host or Owner Officers and Employees . No officer or employee of the Host shall be personal ly liable to the Owner, or any successor in interest, in the event of any default or breach by Host of any obligation of the terms of this Agreement. No officer or employee of the Owner shall be personally liable to Host, or any successor in interest, in the event of any default or breach by Owner of any obligation of the terms of this Agreement. (d) Pronouns. Where appropriate to the context, words of one gender include all genders, and the singular includes the plural and vice versa. (e) Amendments. This Agreement may not be modified except in a written instrument signed by Host and Owner.
(f) Complete Agreement; Benefits . This Agreement together with all schedules and exhibits attached hereto and made part thereof supersedes all previous agreements, understandings and representations made by or between the parties hereto. This Agreement shall inure solely and exclusively to the benefit of the Owner and Host, and no other party shall have any right, remedy or claim under or by reason of this Agreement. (g) Governing Law . This Agreement shall be governed by and construed in accordance with the laws of the State of California, without regard to conflicts of law principles.

All claims of whatever character arising out of this Agreement , or under any statute or common law relating in any way, directly or indirectly, to the subject matter hereof or to the dealings between Owner and any other party hereto, if and to the extent that such claim potentially could or actually does involve Owner, shall be filed and maintained in the Superior Court of California, County of Sacramento, California. By executing and delivering this Agreement, each party hereto irrevocably: (i) accepts generally and unconditionally the exclusive jurisdiction and venue of such court; (ii) waives any defens e of forum non -conveniens; and (iii) agrees not to seek removal of such proceedings to any court or forum other than as specified above. The foregoing shall not be deemed or construed to constitute a waiver by Owner of any prior notice or procedural requirements applicable to actions or claims against or involving governmental units and/or political subdivisions of the State of California that may exist at the time of and in connection with such matter.
(h) Legal Construction. In case any one or more of the provisions contained in this Agreement shall for any reason be held by a court of competent jurisdiction to be invalid, illegal or unenforceable in any respect, such invalid provision shall be deemed severable, and shall not affect the validity or enforceabil ity of any other provisions of this Agreement , all of which shall remain fully enforceable.
(i) Term. This Agreement shall terminate upon the Conveyance. (j) Captions. The captions used in this Agreement are solely for convenience, and shall not be deemed to constitute a part of the substance of the Agreement for purpose of its construction.
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(k) Counterparts. This Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original; and all such counterparts shall together constitute but one and the same Agreement. (l) Host City Charge. Owner, or Bond Trustee on its behalf, shall pay to Host on each anniversary of the date hereof, commencing with the first anniversary and terminating upon Conveyance, an annual host city charge of $361,970 with annual increases of two percent (2.00%); provided, however, that such fee shall be payable as an Operating Expense solely from revenues of the Project available therefor under and in accordance with the Indenture and to the extent permitted by law, and Owner shall not otherwise be liable therefor. (m) Regulatory Agreement Reporting. Owner shall provide or cause to be provided to Host the Certificate of Continuing Program Compliance in accordance with Section 4(e) of the Regulatory Agreement.
(n) Capital Needs Assessment. Commencing in January 2031, and on every ten year anniversary thereafter, Owner shall provide Host with the Capital Needs Assessment conducted by an independent consultant selected by the Project Administrator assess ing capital needs of the Project over the subsequent ten years.

1. Property Management. During the term of this Agreement, Host shall have the authority to review the selection of the original and any replacement property management company and the management agreement with that company for the Project. If Host determines that the management of the Project during the term of this Agreement is deficient in any manner, Host may provide notice of the deficiency to Owner, and Host and Owner shall meet and confer in good faith to discuss the alleged management deficiency and attempt to reach agreem ent upon one or more appropriate remedies to address the alleged management deficiency. Upon Host’s acquisition of the Project, Host shall not be obligated to continue the contracts with any property management company for the Project.
(o) Property Maintenance Report . Beginning on January 31, 2023 and continuing annually thereafter during the term of this Agreement, Owner shall, or cause Project Administrator to, submit an annual property maintenance report to Host by January 31st of each calendar y ear that (i) provides an overview of all capital expenditures at the Property for the previous year, (ii) a projected schedule of capital expenditures for the current year, and (iii) a description and reasonable photo documentation of the Project’s general condition..Project Refinancing. Host shall have the authority to review and approve any debt refinancing or restructuring that may be proposed by the Owner during the term of the Public Benefit Agreement until Conveyance.

[SIGNATURE PAGE TO FOLLOW)
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set forth above.

CSCDA COMMUNITY IMPROVEMENT

AUTHORITY

By:

Jon Penkower
Authorized Signatory

626
[Type here]

THE CITY OF MILPITAS

By:

Steven McHarris
City Manager

ATTEST:

By: ___________________________
____________________
City Clerk

APPROVED AS TO FORM

By: ___________________________
___________________
City Attorney

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[Type here]

A Notary Public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

State of California )
County of ______________________ )
On _________________________, before me, ,
(insert name and title of the officer)
Notary Public, personally appeared ,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Signature (Seal)

628
[Type here]

EXHIBIT A

LEGAL DESCRIPTION OF REAL PROPERTY

The Land referred to herein is situated in the State of California, County of Santa Clara, City of Milpitas, and described as follows:
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RESOLUTION NO._______________

RESOLUTION APPROVING, AUTHORIZING AND DIRECTING

EXECUTION OF A JOINT EXERCISE OF POWERS AGREEMENT

RELATING TO THE CSCDA COMMUNITY IMPROVEMENT
AUTHORITY, AND THE FORM OF A PUBLIC BENEFIT AGREEMENT;

AND APPROVING THE ISSUANCE OF REVENUE BONDS BY THE

AUTHORITY FOR THE PURPOSE OF FINANCING THE ACQUISITION,

CONSTRUCTION OR IMPROVEMENT OF A PROJECT
WHEREAS, pursuant to Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California (the “Act”), certain public agencies (the “Members”) have entered into a Joint Exercise of Powers Agreement Relating to the CSCDA Community Improvement Authority, dated as of October 15, 2020 (the “Agreement”), in order to form the CSCDA Community Improvement Authority (the “Authority”), for the purpose of promoting economic, cultural and community development, and in order to exercise any powers common to the Members or granted by the Act, including by the issuance of bonds, notes or other evidences of indebtedness; and WHEREAS, the City of Milpitas (the “City”), has determined that it is in the public interest and for the public benefit that the City become an Additional Member of the Authority pursuant to Section 12 of the Agreement in order to facilitate the promotion of economic, cultural and community development activities in the City, including the financing of projects therefor by the Authority; and
WHEREAS, the Agreement has been filed with the City , and the members of the City Council of the City (the “City Council”) , with the assistance of its staff, h ave reviewed said document; and
WHEREAS, the Authority is authorized to issue and sell revenue bonds for the purpose, among others, of financing or refinancing the construction, acquisition and rehabilitation of capital projects; and
WHEREAS, among project s that may be financed by the Authority, the Authority proposes to issue from time to time its governmental purpose revenue bonds (the “Bonds”) to finance the acquisition, construction, development and certain related costs of a multifamily housing development within the City known as “ Turing at the Fields Apartments” and located at 1355 McCandless Drive, Milpitas, California 95035 (the “Project”); and WHEREAS, the Authority proposes to grant to the City in connection with the financing of the Project the right to cause the Authority to sell such Project, starting upon the date fifteen (15) years from the issuance of the Bonds pursuant to a Public Benefit Agreement (the “Public Benefit Agreement”), by and between the Authority and the City , the form of which is attached hereto as Exhibit A; and
WHEREAS, it is in the public interest and for the public benefit that the City Council approve the issuance of the Bonds by the Authority for the aforesaid purposes; ATTACHMENT 7
630
2 NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL , AS FOLLOWS:

Section 1. The foregoing recitals are true and correct.

Section 2. The City hereby requests to become an Additional Member of the Authority pursuant to Section 12 of the Agreement. The Agreement is hereby approved and the Mayor or the designee thereof is hereby authorized and directed to execute said document, and the City Clerk or such Clerk’s designee is hereby authorized and directed to attest thereto.

Section 3. The proposed form of Public Benefit Agreement attached hereto as Exhibit A is hereby approved. In connection with the Project, the City Manager or the designee thereof is hereby authorized and directed to execute an agreement in substantially said form, with such changes therein as such officer executing the same may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof. It is the in tent of this Resolution that the City Manager or the designee thereof be empowered to approve any changes to the form of Public Benefit Agreement submitted to this meeting, whether or not such changes may be deemed material, including any changes to any re lated documents, without the need of returning to City Council, unless the changes are to the timing or pricing of sales of the Project that the City may cause the Authority to undertake and are materially adverse to the interests of the City.

Section 4. The City Council hereby approves the issuance of Bonds by the Authority to finance the Project within the City from time to time . For the avoidance of doubt, any future issuance of bonds by the Authority to finance the acquisition, construction, development and certain related costs of other multifamily housing developments within the City shall be subject to approval by the City Council.

Section 5. The issuance of Bonds shall be subject to the approval of the Authority of all financing documents relating thereto to which the Authority is a party. The City shall have no responsibility or liability whatsoever with respect to the Bonds.

Section 6. The adoption of this Resolution shall not obligate the City or any department thereof to (i) provide any financing to acquire or construct any Project or any refinancing of any Project; (ii) approve any application or request for or take any other action in connection with any planning approval, permit or other action necessary for the acquisition, construction, rehabilitation or operation of any Project; (iii) make any contribution or advance any funds whatsoever to the Authority; or (iv) except as provided in thi s Resolution, take any further action with respect to the Authority or its membership therein.

Section 7. The executing officers(s), the City Clerk and all other proper officers and officials of the City are hereby authorized and directed to execute such other agreem ents, documents and certificates, and to perform such other acts and deeds, as may be necessary or convenient to effect the purposes of this Resolution and the transactions herein authorized.

Section 8. The City Clerk shall forward a certified copy of this Resolution and an originally executed Agreement to the Authority:
631
3 CSCDA Community Improvement Authority
1100 K Street, Suite 101
Sacramento, California 95814
Attention: Chair

Section 9. This resolution shall take effect immediately upon its passage.

ADOPTED by the City Council of the City of Milpitas at a regular meeting of the City Council held on the _____ day of February, 2022, by the following vote:

AYES:

NOES:

ABSTAIN:

ABSENT:

_________________________________________
Mayor

ATTEST:

___________________________________
City Clerk
632

SIGNATURE PAGE FOR JPA AGREEMENT

IN WITNESS WHEREOF, the CITY OF MILPITAS has caused this Agreement to be executed and attested by its duly authorized representatives as of the ___ day of February, 2022.

Additional Member:

CITY OF MILPITAS

By
Name:

Title:

ATTEST:

__________________________________
Clerk

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2 EXHIBIT A:

Public Benefit Agreement
[TO BE INSERTED]
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RECORDING REQUESTED BY
CSCDA Community Improvement Authority
WHEN RECORDED RETURN TO:

Orrick, Herrington & Sutcliffe LLP
405 Howard Street
San Francisco, CA 94105
Attention: Steffi Chan
THIS DOCUMENT IS EXEMPT FROM RECORDING FEES PURSUANT TO SECTION 27383 OF THE

CALIFORNIA GOVERNMENT CODE

PUBLIC BENEFIT AGREEMENT
By and Between

CSCDA COMMUNITY IMPROVEMENT AUTHORITY
and

THE CITY OF MILPITAS
_________________________
Dated as of ___________________
_________________________
Relating to

CSCDA COMMUNITY IMPROVEMENT AUTHORITY
ESSENTIAL HOUSING SENIOR LIEN REVENUE BONDS, SERIES 2021A (TURING-MILPITAS) (SOCIAL BONDS)

CSCDA COMMUNITY IMPROVEMENT AUTHORITY
ESSENTIAL HOUSING MEZZANINE LIEN REVENUE BONDS, SERIES 2021B (TURING-MILPITAS) (SOCIAL BONDS)
and

CSCDA COMMUNITY IMPROVEMENT AUTHORITY
ESSENTIAL HOUSING SUBORDINATE LIEN REVENUE BONDS, SERIES 2021C (TURING-MILPITAS)
Redlined version w/staff recommendations

CITY REVISED DRAFT TO CSCDA FORM

RECOMMENDED DELETION

RECOMMENDED ADDITIONS

AREAS OF DISAGREEMENT IN HIGHLIGHT
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PUBLIC BENEFIT AGREEMENT
This PUBLIC BENEFIT AGREEMENT (“Agreement”) is dated as of _______________ by and between the CSCDA COMMUNITY IMPROVEMENT AUTHORITY a joint exercise of powers agency organized and existing under the laws of the State of California (including its successors and assigns, “Owner”) and THE CITY OF MILPITAS (“Host” ).

BACKGROUND
WHEREAS, Owner proposes to issue Bonds (as hereinafter defined) to finance Owner’s acquisition of the certain multifamily rental housing project (the “Project”) located at 1355 McCandlesMcCandless Drive, Milpitas, California, located on the real property site described in Exhibit A hereto; and
WHEREAS, Owner intends to sell the Project at the instigation of the Host or upon the retirement of all Project Debt (as defined herein) pursuant to this Agreement.

Section 1. Section 1. Right to Cause Sale. Host shall have the right to cause (“Sale Right”) Owner to sell the Property (as herein defined) upon payment by the purchaser thereof (the “Purchaser”) of the applicable Sale Price (as herein provided) within the Sale Right Term (as herein defined) as provided in Section 4 hereof or following the Sale Right Term as provided in Section 5 hereof, and in each case, in compliance with and observance of all of the terms and conditions of this Agreement.

Section 2. Section 2. Definitions. Capitalized terms used in this Agreement shall have the meanings assigned to them in this Section 2; capitalized terms used in this Agreement and not defined in this Section 2 or elsewhere herein shall have the meanings assigned to them in the Indenture (herein defined).
a. (a) “Bonds” – collectively, (i) the CSCDA Community Improvement Authority
Essential Housing Senior Lien Revenue Bonds, Series 2021A (Turing-Milpitas) (Social Bonds) (the “Series A Bonds”), (ii) the CSCDA Community Improvement Authority Essential Housing Mezzanine Lien Revenue Bonds, Series 2021B (Turing-Milpitas) (Social Bonds) (the “Series B Bonds”), and (iii) the CSCDA Community Improvement Authority Essential Housing Subordinate Lien Revenue Bonds, Series 2021C (Turing-Milpitas) (the “Series C Bonds”), with such other series and sub-series designations as may be set forth in the Indenture, originally issued to finance Owner’s acquisition of the Project and related transaction costs.
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b. (b) “Bond Trustee” – Wilmington Trust, National Association or any successor trustee under the Indenture.
c. (c) “Closing” – shall have the meaning set forth in Section 8 hereof. d. (d) “Conveyance” – that transaction or series of transactions by which Owner shall transfer, bargain, sell and convey any and all right, title or interest in and to the Property.
e. (e) “Extraordinary Costs and Expenses” – shall have the meaning set forth in the Indenture.
f. (f) “Indenture” – the Trust Indenture between Owner, as issuer, and Bond Trustee, as trustee, pursuant to which the Bonds were issued., provided that principal payment for all Bonds shall be paid in parity or at same priority level as bond interest payments, and that Owner shall pay at least twenty-five percent (25%) of all Bond principal within 10 years of Bond issuance; bond term shall not extend beyond 35 years; and Host shall receive timely notification of any changes to management, financial, or physical conditions, or other significant matters. g. (g) “Minimum Sale Price” – means the lowest price at which the Property may be sold, as described in Section 4(c) hereof.
h. (h) “Outstanding” – with respect to Bonds, as of any given date, all Bonds which have been authenticated and delivered by the Trustee under the Indenture, except: (i) Bonds cancelled at or prior to such date or delivered to or acquired by the Trustee at or prior to such date for cancellation; (ii) Bonds deemed to be paid in accordance with Article VIII of the Indenture; and (iii) Bonds in lieu of which other Bonds have been authenticated under the Indenture.
i. (i) “Owner Indemnified Person” – Owner and each of its officers, governing members, directors, officials, employees, attorneys, agents and members. j. (j) “Project Administrator” – Waterford Property Company, LLC and its successors and assigns.
k. (k) “Project Debt” – any debt secured by the Project and incurred to finance or refinance Owner’s acquisition of the Project and related transaction costs, including any portion of the Bonds and any bonds, notes or other indebtedness issued by Owner to improve the Project or to refund the Bonds in whole or in part. l. (l) “Property” – means all of Owner’s right, title and interest (which includes fee simple title to the real property) in and to all property and assets used in or otherwise related to the operation of the Project including, without limitation, all real property and interests in real property, all tangible and intangible personal property including furniture, fixtures, equipment, supplies, intellectual property, licenses, permits, approvals, and contractual rights of any kind or nature together with the right to own and carry on the business and operations of the 637
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Project. The definition of Property does not include any non-residential portion of the Project, which will be under separate ownership and not owned by Owner. m. (m) “Regulatory Agreement” – means the Regulatory Agreement and Declaration of Restrictive Covenants by and between Owner and Bond Trustee, relating to the Bonds.
n. (n) “Sale Price” – purchase price of the Property to be paid by the Purchaser upon sale of the Property by Owner pursuant to Host’s Sale Right in compliance with Section 4 hereof or sale by Owner pursuant to Section 5 hereof. o. (o) “Sale Right” – means the right of Host to cause Owner to sell the Property pursuant to Section 1 hereof.
p. (p) “Sale Right Exercise Date” – the date fifteen (15) years from the issuance of the Bonds.
q. (q) “Sale Right Term” – shall commence on the Sale Right Exercise Date and, if not exercised, shall terminate on the date on which no Project Debt remains outstanding. r. (r) “Transaction Costs” – to the extent not otherwise described herein, any costs or expenses of any kind or nature associated with or incurred by Owner and/or Bond Trustee in connection with the consummation of the Conveyance, regardless of whether such costs and expenses are customarily borne by the seller or purchaser in any such transaction, including but not limited to taxes, recording fees and other impositions, Owner’s and Bond Trustee’s legal and other professional fees, fees for verification agents, bidding agents, escrow agents, custodians or trustees, assumption fees, prepayment fees, the cost of the appraisal, brokers’ fees and expenses, surveys, inspections, title commitments, title insurance premiums and other title-related fees, and all amounts required for indemnification of Owner, Bond Trustee and Project Administrator.

Section 3. Section 3. Effectiveness; Term and Termination. The Sale Right shall become effective on the Sale Right Exercise Date and may be exercised during the Sale Right Term. Owner agrees that it will not enter into any agreement to sell all or any part of the Property during the Sale Right Term other than as may be required by the Indenture (e.g., in the event of default), without the specific written request of the Host and delivery of an Opinion of Bond Counsel to Bond Trustee substantially to the effect that such sale will not, in and of itself, adversely affect the exclusion of interest on the Bonds from gross income for purposes of federal income taxation.

Section 4. Section 4. Manner of Exercise.
a. (a) Host’s Notice. To exercise the Sale Right, Host shall provide a notice (an “Exercise Notice”) to Owner (with a copy to the Project Administrator) at any time during the Sale Right Term. Upon request of the Host, Owner shall prepare and submit to Host within 60 days of Host’s request a new Property Conditions Assessment and appraisal prepared by qualified independent consultants approved by the Host. 638
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b. (b) Owner’s Best Efforts to Sell. Unless Host notifies Owner in writing that it is withdrawing its Exercise Notice within fifteen (15) business days of delivering the Exercise Notice under Section 4(a) hereof, Owner shall exercise its best efforts in selling and conveying good and marketable title to the Property within ninety (90) days following receipt of the Exercise Notice, or as soon as possible thereafter, but only if it can sell at or above the Minimum Sale Price. The obligation of Owner to sell and convey the Property shall be on a best efforts basis. Owner shall endeavor to sell the Property at a commercially reasonable price, subject to subsection (c) of this Section, by such means as it shall determine to be suitable for such purpose; provided that Host may direct Owner to sell the Property to Host, to a non-profit corporation designated by Host or to a limited partnership (that has a non-profit corporation as a general partner) designated by Host at a price less than commercially reasonable but at or above the Minimum Sale Price; provided further that Owner’s determination of the manner of sale and Sale Price shall be final and incontestable, and Owner shall incur no liability to any party as a result of or otherwise in connection with the sale or failure to sell. Subject to subsection (c), nothing herein shall require or prevent Owner selling the Property subject to the restrictions set forth in the Regulatory Agreement or similar types of restrictions established by Owner with the approval of Host. Owner shall direct the Bond Trustee in the foregoing as and to the extent necessary or appropriate.
c. (c) Sale Price. The Sale Price shall be at least equal to the sum of the amounts set forth below (net of any adjustments or prorations of the type described in Section 8(b)) (the “Minimum Sale Price”):
i. an amount sufficient to either prepay, redeem in whole or fully defease for redemption on the earliest call date all Project Debt; plus
ii. any fees or other amounts not identified in clause (i) that may be necessary to effect the complete release from and discharge of any lien, mortgage, or other encumbrance on the Property; plus iii. any amounts due to Owner (including Owner Indemnified Persons, as provided in the Indenture), the Bond Trustee or any predecessor or successor, or any other Person under any indenture, loan agreement, bond, note, or other instrument relating to any Project Debt (including, without limitation, indemnification amounts, Owner’s Extraordinary Costs and Expenses, recurrent and extraordinary fees and expenses, and reimbursable costs and expenses of any kind or nature); plus
iv. Transaction Costs; minus
v. Any funds held by or for Owner under the Indenture applied to the retirement of Project Debt. Owner may retain such portion of moneys in the Extraordinary Expense Fund or similar fund under the Indenture it deems reasonable as a reserve against future expected costs and expenses of the type described in subparagraph 639
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(iii). Owner’s determination of this amount shall be final and incontestable.

Section 5. Section 5. Mandatory Conveyance. Upon the retirement of all Project Debt, Owner shall use its best efforts to effect a Conveyance within ninety (90) days thereafter, subject to Section 4(c) hereof; provided, however, that Host, by notice to Owner within two (2) weeks after notice from Owner that no Project Debt remains outstanding, shall have the option to cause Owner to sell the Property (i) to a non-profit corporation or a limited partnership (that has a non-profit corporation as a general partner) designated by Host upon payment by such non-profit corporation or limited partnership, as applicable, of a sale price approved by Host, which sale price shall be at least equal to the Minimum Sale Price, or (ii) to Host upon payment of the Minimum Sale Price. Nothing herein shall require or prevent Owner selling the Property subject to the restrictions set forth in the Regulatory Agreement or similar types of restrictions established by Owner with the approval of Host.

Section 6. Section 6. Surplus Cash; Surplus Conveyance Proceeds. Upon a Conveyance of the Property, Owner shall apply the proceeds of such Conveyance (i) to redeem the Bonds then Outstanding, (ii) to prepay, redeem in whole or fully defease any other Project Debt, and (iii) to pay any fees or other amounts listed in Section 4(c)(ii) – (iv). Any proceeds remaining following the foregoing payments (such remaining amounts hereinafter referred to as “Surplus Conveyance Proceeds”) shall be transferred to Host and Host shall share such Surplus Conveyance Proceeds with other taxing agencies selected by Host, and in the amounts determined by Host in its sole discretion and responsibility.

Section 7. Section 7. Terms of Conveyance.
a. (a) The Conveyance shall be in the nature of a grant deed to Purchaser in which Owner shall deliver one or more deeds, bills of sale, or other instruments of transfer without recourse or warranty of any kind or nature.
b. (b) The Property will be conveyed to Purchaser in AS IS CONDITION, WITH ALL FAULTS, and without representations or warranties of any kind or nature as to the condition of the Property.good and clean order, except for ordinary wear and tear, with all capital improvements completed as recommended in Section 14(o) below. c. (c) There shall be no partial transfer and that, upon consummation of the Conveyance, Owner shall be fully divested of any and all right, title or interest in and to the Property.

Section 8. Section 8. Closing.
a. (a) The closing of the Conveyance (“Closing”) shall take place, in the case of a Conveyance pursuant to Section 4 hereof, not later than the ninetieth (90th) calendar day following Owner’s receipt of the Exercise Notice, or as soon as possible thereafter, and in the case of a mandatory conveyance pursuant to Section 5 hereof, not later than the ninetieth (90th) calendar day following the retirement of all Project Debt, or as soon as possible thereafter. 640
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b. (b) Prorations. All general and special real property taxes and assessments, and rents shall be prorated as of the Closing, with Purchaser responsible for all such items to the extent arising or due at any time following the Closing. General real property taxes shall be prorated at the time of Closing based on the net general real property taxes for the year of Closing.

Section 9. Section 9. Recording. This Agreement, and any amendment thereto, shall be recorded with the recorder’s office of the County; provided, that upon termination of the term of this Agreement, Host shall cooperate with Owner to remove any such recorded Agreement or amendment thereto from title to the Property upon Owner’s reasonable request therefor and, in any event, by no later than thirty (30) days after the expiration of the original term of this Agreement. In the event that, within said time, Host fails to so cooperate and provide its original signature to a termination of such recorded Agreement or amendment thereto, then Host hereby irrevocably constitutes and appoints Owner as Host’s true and lawful attorney (and agent-in-fact) to execute in Host’s name any such termination.

Section 10. Section 10. Subordination. ThisAfter the initial issuance of the Bonds, this Agreement shall only be subordinate to any claim, pledge or interest in the Property securing the Bonds or any Project Debtmatters approved by the Host.

Section 11. Section 11. Maintenance of Membership. In order to preserve the Property’s exemption from property tax, Host agrees to remain a member of Owner joint powers authority so long as any Bonds remain Outstanding.

Section 12. Section 12. Assignment. Neither party to this Agreement shall assign its interests, obligations, rights and/or responsibilities under this Agreement without the prior written consent of the other party.

Section 13. Section 13. Limitation on Liability.
a. (a) Owner shall not be directly, indirectly, contingently or otherwise liable for any costs, expenses, losses, damages, claims or actions, of any conceivable kind on any conceivable theory, under or by reason of or in connection with this Agreement or any sale or Conveyance or failure or price thereof or application of proceeds thereof, except only as to moneys available therefor under and in accordance with the Indenture or this Agreement. b. (b) No Owner Indemnified Person shall be individually or personally liable for the payment of any sum hereunder or be subject to any personal liability or accountability by reason of the execution and delivery of this Agreement, or by any proceedings for the sale or Conveyance or failure or price thereof, or Host’s exercise or waiver of same, or otherwise except in the case of such Owner Indemnified Person’s own willful misconduct. c. Host shall not be directly, indirectly, contingently or otherwise liable for any costs, expenses, losses, damages, claims or actions, of any conceivable kind on any conceivable theory, under or by reason of or in connection with this Agreement or any sale or Conveyance or failure or price thereof or application of proceeds thereof. Host shall not be 641
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If to Owner or
Designated Agent:

If to Host:

CSCDA Community Improvement Authority
1700 North Broadway, Suite 405
Walnut Creek, California 94596
Attention: Jon Penkower
Email: [email protected]
The City of Milpitas
455 East Calaveras Blvd.

Milpitas, California 95035
Attention: City Manager
individually or personally liable for the payment of any sum hereunder or be subject to any personal liability or accountability by reason of the execution and delivery of this Agreement.

Section 14. Section 14. Notices, Governing Law, Binding Effect and Other Miscellaneous Provisions.
a. (a) Notices. All notices provided for in this Agreement shall be in writing and shall be given to Owner or Host at the address set forth below or at such other address as they individually may specify thereafter by written notice in accordance herewith:

Such notices shall be deemed effective upon actual delivery or upon the date that any such delivery was attempted and acceptance thereof was refused, or if mailed, certified return receipt requested, postage prepaid, properly addressed, three (3) days after posting. b. (b) Consents and Approvals. All consents and approvals and waivers required or asserted hereunder shall be in writing, signed by the party from whom such consent, approval, waiver, or notice is requested.
c. (c) Non-liability of Host or Owner Officers and Employees. No officer or employee of the Host shall be personally liable to the Owner, or any successor in interest, in the event of any default or breach by Host of any obligation of the terms of this Agreement. No officer or employee of the Owner shall be personally liable to Host, or any successor in interest, in the event of any default or breach by Owner of any obligation of the terms of this Agreement. d. (d) Pronouns. Where appropriate to the context, words of one gender include all genders, and the singular includes the plural and vice versa. e. (e) Amendments. This Agreement may not be modified except in a written instrument signed by Host and Owner.

With a copy to: Waterford Property Company, LLC
130 Newport Center, Suite 230
Newport Beach, California 92660
Attention: John Drachman
Email:
[email protected]@waterfordco.com
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f. (f) Complete Agreement; Negotiated Benefits. This Agreement together with all schedules and exhibits attached hereto and made part thereof supersedes all previous agreements, understandings and representations made by or between the parties hereto. This Agreement shall inure solely and exclusively to the benefit of the Owner and Host, and no other party shall have any right, remedy, or claim under or by reason of this Agreement. The parties understand that any amount paid to Host under this Agreement is the result of a negotiated agreement and is not imposed for purposes of Article XIII C, section 1 of the California Constitution.
g. (g) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California, without regard to conflicts of law principles. All claims of whatever character arising out of this Agreement, or under any statute or common law relating in any way, directly or indirectly, to the subject matter hereof or to the dealings between Owner and any other party hereto, if and to the extent that such claim potentially could or actually does involve Owner, shall be filed and maintained in the Superior Court of California, County of Sacramento, California. By executing and delivering this Agreement, each party hereto irrevocably: (i) accepts generally and unconditionally the exclusive jurisdiction and venue of such court; (ii) waives any defense of forum non-conveniens; and (iii) agrees not to seek removal of such proceedings to any court or forum other than as specified above. The foregoing shall not be deemed or construed to constitute a waiver by Owner of any prior notice or procedural requirements applicable to actions or claims against or involving governmental units and/or political subdivisions of the State of California that may exist at the time of and in connection with such matter.
h. (h) Legal Construction. In case any one or more of the provisions contained in this Agreement shall for any reason be held by a court of competent jurisdiction to be invalid, illegal or unenforceable in any respect, such invalid provision shall be deemed severable, and shall not affect the validity or enforceability of any other provisions of this Agreement, all of which shall remain fully enforceable. i. (i) Term. This Agreement shall terminate upon the Conveyance. j. (j) Captions. The captions used in this Agreement are solely for convenience, and shall not be deemed to constitute a part of the substance of the Agreement for purpose of its construction.
k. (k) Counterparts. This Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original; and all such counterparts shall together constitute but one and the same Agreement. l. (l) Host City ChargeFee. Owner, or Bond Trustee on its behalf, shall pay to Host on each anniversary of the date hereof, commencing with the first anniversary and terminating upon Conveyance, an annual Host Fee of $361,970 with annual increases of two percent (2.00%) on the residential portion of the Project (the “Host Fee”); provided, however, that such fee shall be payable as an Operating Expense solely from revenues of the Project available therefor under and in accordance with the Indenture and to the extent permitted by law.

The annual Host Fee shall be paid to Host before any annual payments of any kind to Owner and 643
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Project Administrator are made and shall accrue to Host and be paid from future years Operating Revenue if insufficient Operating Revenue is available to meet this obligation at any time during the term of the Public Benefit Agreement until Conveyance. The non-residential portion the Project shall be required to pay all taxes and assessments. m. Infrastructure Fee. Owner, or Bond Trustee on its behalf, shall pay to Host on each anniversary of the date hereof, commencing with the first anniversary and terminating upon Conveyance, an annual Infrastructure Fee of $275,693 with annual increase of CPI. The annual Infrastructure Fee shall be paid to Host before any annual payments of any kind to Owner and Project Administrator are made and shall accrue to Host and be paid from future years Operating Revenue if insufficient Operating Revenue is available to meet this obligation at any time during the term of the Public Benefit Agreement until Conveyance. n. (m) Regulatory Agreement Reporting. Owner shall provide or cause to be provided to Host the Certificate of Continuing Program Compliance in accordance with Section 4(e) of the Regulatory Agreement.
o. (n) CapitalProperty Needs Assessment. The Property was evaluated by a Property Needs Assessment dated October 7, 2021. Commencing in January 2031, and on every ten year anniversary thereafter, or as requested by the Host, Owner shall provide Host with thea Capital Needs Assessment conducted by an independent consultant selected by the Project Administrator assessingwith approval of the Host to assess the capital needs of the Project over the subsequent ten years.and the sufficiency of reserve funds and operating income to fund capital costs for the remaining bond term. Reserve funds shall be adjusted as necessary to fully cover revised capital needs based on the Property Needs Assessment. p. (o) Property Management. During the term of this Agreement, Host shall have the authority to review the selection of the original and any replacement property management company and theProperty Administrator or Property Manager and the administration or management agreement with that company for the Project. If Host determines that the management of the Project during the term of this Agreement is deficient in any manner, Host may provide notice of the deficiency to Owner, and Host and Owner shall meet and confer in good faith to discuss the alleged management deficiency and attempt to reach agreement upon one or more appropriate remedies to address the alleged management deficiency. If no remedy is agreed upon, then Host may select the Property Administrator and Property Manager. Upon Host’s acquisition of the Project, Host shall not be obligated to continue the contracts with any property management company for the Project.
q. (p) Property Financial, Management, and Maintenance Report. Beginning on January 31, 2023 and continuing annually thereafter during the term of this Agreement, Owner shall, or cause Project Administrator to, submit an annual property maintenance report to Host by January 31st of each calendar year that includes, but are not limited to: (i) provides an overview of all capital expenditures at the Property for the previous year,; (ii) a projected schedule of capital expenditures for the current year,following year; (iii) current rent roll; (iv) current vacancy rate; (v) past year’s and next year’s operating income and expenses; (vi) cash flow projection, current operating funds, and current reserve funds; (vii) bond interest and 644
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redemption payments and all bond specific payments; and (iii) a description and reasonable photo documentation of the Project’s general condition. i. Host reserves the right to have the Owner or Project Administrator fund an independent property and/or financial management consultant to review the annual report and provide an assessment of the Property based on industry standards and best practices for management of multi-family residential property.
ii. Owner or Project Administrator will submit to the Host an annual monitoring fee of $100 per unit or $37,100 for 2023 to cover City staff costs for project oversight and monitoring with an annual increase of two percent (2.00%) (“Monitoring Fee”). The annual Monitoring Fee shall be paid to Host before any annual payments of any kind to Owner and Project Administrator are made and shall accrue to Host and be paid from future years Operating Revenue if insufficient Operating Revenue is available to meet this obligation at any time during the term of the Public Benefit Agreement until Conveyance.
r. Affordability Covenant.
i. The affordability covenant provisions below shall be reflected and contained in the Regulatory Agreement
ii. Owner shall use its best efforts to ensure that the following income restrictions are met as soon as practicable following the date of issuance of the Bonds and thereafter, at all times: 40% units shall be units in which the aggregate gross income of all tenants in the household therein does not exceed 80% of area median income (AMI) for Santa Clara County (as defined by the California Department of Housing and Community Development), with
adjustments for family size; 20% units shall be units in which the aggregate gross income of all tenants in the household therein does not exceed 100% of AMI for Santa Clara County, with adjustments for family size; and 40 % units shall be units in which the aggregate gross income of all tenants in the household therein does not exceed 120% of AMI for Santa Clara County, with adjustments for family size; and studios, one-, two-, and three- bedroom units shall be distributed pro rata across income categories. iii. Maximum rents for all income categories shall not exceed 30% of the aggregate gross income of all tenants in the household, adjusted for household size and less estimated utility costs paid by tenants.
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iv. Owner shall submit an annual report to the Host that certifies compliance with the affordability covenant. Owner shall submit proposed rent increases for review and approval by the Host to verify compliance with the affordability covenant. Host shall be allowed up to 30 days to review proposed rent increases; if no response is received from the Host, rent increase shall be deemed approved.
v. Rent reduction for existing Project qualifying tenants: 18% reduction from current rents for low-income households; 12% reduction from current rents for median income households; and 10% reduction from current rents for moderate-income households. s. Local Preference Policy. Subject to review and approval by the Host, Owner shall direct the Property Administrator or Property Manager to establish and administer a tenant preference program with administrative guidelines, screening procedures, and a marketing plan to attract income-qualified teachers and administrative, maintenance, and support staff that are employed by public education institutions located within the City of Milpitas. The Local Preference Policy shall comply with state and federal fair housing laws. t. Project Refinancing. Host shall have the authority to review and approve any debt refinancing, or restructuring, or increase in debt encumbrance that may be proposed by the Owner during the term of the Public Benefit Agreement until Conveyance. u. Indemnification. Host shall have the same indemnification status as an Owner Indemnified Person and this shall extend to each of Host’s officers, governing members, directors, officials, employees, attorneys, agents, and members. v. Documents for Review by Host: The following will be further outlined in the Regulatory Agreement and the Owner or Project Administrator shall submit to the Host the following for review and approval by the Host prior to issuance of the Bonds:

1. Tenant Leasing Plan

2. Local Preference Policy per Section 14(s)

3. Maintenance Plan

4. Property Management Plan, including staffing

5. Marketing Plan
w. Defaults and Remedies:

1. Default. Failure or delay by either party to perform any term or provision of this Agreement, which is not cured within 30 days after receipt of notice from the other party, constitutes a default under this Agreement. The party who so fails or delays must immediately commence to cure, correct or remedy such failure or delay, and shall complete such cure, correction or remedy with due diligence. The injured party shall give written notice of default to 646
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the party in default specifying the default complained of by the injured party. Except as required to protect against further damages, the injured party may not initiate proceedings against the party in default until 30 days after giving such notice. Failure or delay in giving such notice shall not constitute a waiver of any default, nor shall it change the time of default.

2. Remedies.
(a) Any uncured violation of this Agreement by Owner
and Project Administrator shall cause all annual
payments of any kind to Owner and Project
Administrator to be suspended until compliance
with this Agreement is achieved during the term of
the Public Benefit Agreement until Conveyance.
(b) Host may institute any appropriate legal actions or proceedings necessary to ensure compliance with
this Agreement, including but not limited to:
(i) Actions for monetary damages; and
(ii) Actions for injunctive relief or damages
[SIGNATURE PAGE TO FOLLOW]
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By:

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set forth above.

Jon Penkower
Authorized Signatory

CSCDA COMMUNITY IMPROVEMENT

AUTHORITY
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By:

Steven McHarris
City Manager
ATTEST:

By: ___________________________
____________________
City Clerk

APPROVED AS TO FORM
By: ___________________________
___________________
City Attorney

THE CITY OF MILPITAS
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A Notary Public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Signature (Seal)
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EXHIBIT A

LEGAL DESCRIPTION OF REAL PROPERTY
The Land referred to herein is situated in the State of California, County of Santa Clara, City of Milpitas, and described as follows:
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ATTACHMENT 8
City of Milpitas
California State Communities
Development Authority (CSCDA)
Community Improvement Authority
(Turing Apartments)
Bond Proposal Review
February 7, 2022
P
repared by:

Fieldman, Rolapp & Associates, Inc.

One Sansome Street, Suite 3500
San Francisco, CA 94104
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CSCDA TURING APARTMENTS BOND PROPOSAL REVIEW

Table of Contents
BACKGROUND ......................................................................................................................................... 3 SOURCE INFORMATION ....................................................................................................................... 4 EXECUTIVE SUMMARY ........................................................................................................................ 5 FINANCIAL STRUCTURE ...................................................................................................................... 6 A. SOURCES AND USES ............................................................................................................................. 6 B. BOND STRUCTURE ................................................................................................................................ 7 PRO FORMA FLOW OF FUNDS. ......................................................................................................... 10 KEY FINANCIAL RISKS TO CITY...................................................................................................... 12 CITY OF MILPITAS’ DEBT MANAGEMENT POLICY .................................................................. 13 KEY BOND RECOMMENDATIONS .................................................................................................... 13

Attachments:

Attachment A - Preliminary Bond Cash Flows as of January 25, 2022 Attachment B – Financial Pro Forma as of January 25, 2022 provided by Waterford and Financial Pro Forma as of January 12, 2022 provided by Goldman Sachs

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BACKGROUND
The City of Milpitas (“City”) was approached by the California State Communities Development Authority (“CSCDA”) and the Waterford Property Company, LLC (“Waterford”) with a proposal to acquire the existing Turing Apartments (Project) comprised of 371 market rate multi- family units and create the equivalent number of moderate -income housing units. CSCDA would accomplish this by lowering rent levels in the Project to existing income eligible residents by approximately 10% with an average rent reduction of $323 per month and capping these rent levels annually to maintain this moderate-income level for the life of any bonds issued in connection with the Project acquisition. In addition, annual rent growth will be limited to no more than 4%. As current tenants’ leases expire, they will be eligible to go through the income qualification process.

If they do not qualify for the restricted rents, they would have the option to remain at their current market rent. All other residents who qualify, would have their rent restricted and capped as described above.

Under this proposal, CSCDA would acquire the property by financing the acquisition price through the issuance of the following tax-exempt governmental bonds:

CSCDA Community Improvement Authority, Essential Housing Revenue Bonds $232,490,000
1 Series 2022A (“Senior Bonds”),
$65,500,0001 Series 2022B (“Mezzanine Bonds”),
$5,000,0001 Series 2022C (“Subordinate Bonds”), and together (the “Bond” or “Bonds”).

This would make the property exempt from property tax, resulting in the loss of such revenues for impacted taxing entities such as the City , the County of Santa Clara, and the San Jose-Evergreen Community College District. Lost property tax revenue for the Milpitas Unified School District would be backf illed by the State. Additionally, w hile the debt obligations would no longer be levied on the property, property taxes on other taxable properties in the various jurisdictions would increase in order to meet the debt obligation on existing debt as well as for any future bonds backed by property taxes that may be issued by these municipal entities. The City would enter into a Public Benefit Agreement (PBA) with CSCDA whereby the City, along with the other impacted taxing entities, would receive any potenti al surplus revenue if and when the property is sold or refinanced. Under the PBA, the City, at its sole discretion, may force a sale of the property beginning in year 15 from the issuance date to the final maturity date of the tax -exempt bonds, upon which it would receive the net sale proceeds.

As part of the City’s due diligence review of the Project and related Bonds, the City engaged Fieldman, Rolapp & Associates, Inc. (“Fieldman”) to review the proposed Bond financing structure as it relates to the City, and the potential financial risk exposure to the City in the event of default and fiscal stress on the Project.

1 Preliminary, subject to change. Provided by Goldman Sachs on January 25, 2022. 655

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SOURCE INFORMATION
Fieldman’s review of the Bonds was based on the information provided by Goldman Sachs, the underwriter on the Bonds (the “Underwriter”), Waterford, the City, and the City’s consultants. The key documents and the basis of our analysis are the bond cash flows provided by the Underwriter and the financial pro forma s provided by Waterford and the Underwriter. Copies of these source documents are attached to this report as Attachment A and Attachment B, respectively. For purposes of our analysis, we have based our analysis primarily on the pro forma provided by the Underwriter as this was the pro forma that reflected the latest detailed bond cash flows provided to the City. However, we note that the City’s annual host fee is not reflected in the Underwriter’s pro forma but was reflected in the Waterford pro forma model. Additionally, we note that a copy of the draft Indenture for the Bonds was not reviewed by Fieldman as a copy of the draft Indenture was not available at the time of this report.2

We have also reviewed City Council Meeting staff reports and viewed Council Meetings related to the Project. Lastly, we participated in several conference calls/virtual meetings with City staff, CSCDA, Waterford and the Underwriter to discuss the Project and related cash flows.

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2 Per a conference call held on January 12, 2022, with Fieldman, City staff, and representatives from the Underwriter and Waterford.
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EXECUTIVE SUMMARY
In order to reduce and to mitigate the level of risk of the Project to the City, Fieldman recommends the following:

• Utilize conservative growth rate assumptions in the Project pro forma and require limits on bond structure. Key bond structure limits should include:
o Minimum of 25% of total aggregate principal paid down within the first 10 years of bond issuance;
o Limit term of bond financing to be no greater than 35 years; and o Utilize an optional redemption feature of a minimum of 10 years with no call premium. • Require bond principal redemptions to be on parity with bond interest payments. • Require annual fee payment s to the bond issuer (CSCDA) and to the Project Administrator (Waterford) be payable after payment of bond interest and principal payments , and any bond reserve fund deposits, and payable with annual excess cash flow only. • Require the annual City’s host fee and CFD payments be in a senior position to Bond interest and principal payments, deposits to Bond reserve funds, and annual fee paid to the bond issuer and Project Administrator.
• Require limits to bond issuance expenses such as limiting the fees to the bond issuer and the Project Administrator to be in line with other similar middle income housing programs in California.
• Require the City’s written consent prior to the issuance of any future additional bonds in the form of new money and/or refunding bonds.
• Require the bond issuer send the City notification of any material changes in connection with the Project as long as the Bonds are outstanding.

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FINANCIAL STRUCTURE3
A. Sources and Uses
The table below provides a breakdown of the preliminary Bond Sources and Uses of funds for the Project.

The upfront bond issuance expenses of $16.29 million represents approximately 5.38% of the total principal amount issued of $302.99 million. For comparison, for typical municipal investment grade rated financings, issuance expenses are generally around 2% of the total principal amount.

A recent study by Keyser Marston Associates (“KMA”) compar ed bond issuer and Project Administrator fees for middle income housing programs by the California Community Housing

3 Preliminary, subject to change. Provided by the Underwriter on January 25, 2022. 658

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Agency (“CalCHA”), CSCDA, and California Municipal Finance Authority (“CMFA”) , and provided the following issuance expense comparisons:

CalCHA CSCDA CMFA
Upfront Issuer Fee $500,000 Flat Fee 1% of Bonds $250,000 Flat Fee* Annual Administration Fee $125,000 no
escalations
$250,000 no
escalations
$62,500 no
escalations*
*25% of fees shared with local jurisdiction, 25% of fees shared with local charity.

B. Bond Structure
As discussed earlier, the purchase of the Project would be funded through a tax-exempt bond issue.

Neither CSCDA nor Waterford provide any equity or other investment and since the Project is already well established, there is no development risk to Waterford. The Bonds are structured based on cash flow projections assuming annual revenue growth of 3% beginning in 2025 through the final term of the Bonds. The resulting debt service coverage ratio of annual net revenues to annual Bond interest and principal payments is estimated at 1.00x in each year. The financing structure as currently contemplated poses certain risks and uncertainties that necessitate further discussion.

Original Issue Discount Bonds. An original issue discount bond is a bond that is sold for less than its face value and specifically , when the coupon rate of a bond is lower than the yield purchased by investors. In the case of the proposed Bonds, the financing is structured with multiple term bonds with significant level of original issue discount totaling approximately $30.02 million.

The original issue discount bond structure is utilized to cover the high issuance costs and fees as outlined in the Sources and Uses table above, and to create a cash flow to maintain the 1.00x debt service coverage ratio for Bond interest and principal payments . In our view this is an extreme structure and has similarities to a capital appreciation bond structure. The following table provides the preliminary bond structure summary with respect to the Series 2022A Bonds and the Series 2022B Bonds.

Bond Principal Estimated
Final
Maturity
Coupon
Rate
Yield Price Total
Discount
Series 2022A-1 $60,000,000 9/1/2047 3.25% 3.80% $91.072 $5,356,800 Series 2022A-2 $172,490,000 9/1/2057 3.50% 4.00% $90.566 $16,272,707 Series 2022B-1 $65,500,000 9/1/2057 4.00% 4.75% $87.195 $8,387,275 Totals $297,990,000 $30,016,782

The Series 2022C Bonds are structured as a bullet term bond with a principal of $5,000,000 maturing in 2056. This Bond carries a 10% interest rate and the interest payment is deferred with initial interest payments paid from net revenues beginning in March 1, 2026 through September 1, 2056. As shown in the Sources and Uses table above, no financing costs are applied to the Series 2022C Bond and the entire $5,000,000 bond proceeds will be delivered to Waterford. This is essentially a type of “preferred equit y” or deferred development fee and is paid to Waterford in exchange for Waterford’s assignment of its purchase and sale agreement for the Project asset to 659

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CSCDA. This is in addition to other upfront and ongoing fees that Waterford will receive through the term of the Bonds.

Turbo Bonds and Financing Term . The financing includes multiple term bonds structured as turbo bonds. The initial principal amortization for turbo bonds represents the anticipated paydown schedule and is not mandatory which is the more typical structure for tax-exempt municipal bonds.

Principal redemption of turbo bonds will be paid only when annual cash flows produce excess revenues. If there are no excess revenues, then principal is not paid and will be deferred. While the financing term is currently estimated at 35 years with the final maturity due in 2057, the final term of the financing is market driven and will be determined when bonds are sold. Therefore, each bond series could have a final term of up to 40 years.

Principal Amortization. Assuming annual revenue growth at 3% as presented by Waterford and the Underwriter, the Bonds are currently anticipated to have a term up to 35 years with 100% of principal paid in year 34. However, at the end of year 15, over 91% of the principal amount of the Series 2022A bonds would remain outstanding, while 100% of the Series 2022B and Series 2022C bonds would be outstanding. In fact, the Series 2022A bonds do not begin to amortize principal until 2027, and at the end of 30 years, 67% of the initial par amount would remain outstanding. As indicated by CSCDA, these Bonds are not contemplated to be refunded during the life of the Bonds and with the Turbo Bond structure, there is a very large risk of the potential inability to pay off the outstanding bond principal and interest payments at the end of the financing. Provided below is a current amortization schedule of the Bonds.

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In contrast to the Bonds which are non-rated, investment grade rated financings typically amortize principal at a much faster pace. For instance, Standard & Poor’s generally favors 25% of principal amortized in the first five years and 50% of the debt retired within the first ten years. The paydown ratios for the Bonds are 0.1% and 4.3% in the first five and ten years, respectively.

Optional Redemption. Based on information provided by the Underwriter, the Series 2022A and Series 2022B bonds will be structured with a standard municipal bond 10-year optional redemption with no premium at 100%. The Series 2022C bonds will be optionally callable between year 10 and year 35 with a premium at 110%. After year 35, there will be no premium and the call price Ye ar
Maturity
Date
Series
2022A
Series
2022B
Series
2022C Total Annual Cumulative
1 9/1/2023 - - - - 0.0% 2 9/1/2024 - - - - 0.0% 3 9/1/2025 - - - - 0.0% 4 9/1/2026 - - - - 0.0% 5 9/1/2027 190,000 - - 190,000 0.1% 0.1% 6 9/1/2028 545,000 - - 545,000 0.2% 0.2% 7 9/1/2029 920,000 - - 920,000 0.3% 0.5% 8 9/1/2030 1,320,000 - - 1,320,000 0.4% 1.0% 9 9/1/2031 7,745,000 - - 7,745,000 2.6% 3.5% 10 9/1/2032 2,190,000 - - 2,190,000 0.7% 4.3% 11 9/1/2033 2,560,000 - - 2,560,000 0.8% 5.1% 12 9/1/2034 3,065,000 - - 3,065,000 1.0% 6.1% 13 9/1/2035 3,595,000 - - 3,595,000 1.2% 7.3% 14 9/1/2036 4,160,000 - - 4,160,000 1.4% 8.7% 15 9/1/2037 4,760,000 - - 4,760,000 1.6% 10.2% 16 9/1/2038 5,390,000 - - 5,390,000 1.8% 12.0% 17 9/1/2039 6,050,000 - - 6,050,000 2.0% 14.0% 18 9/1/2040 6,755,000 - - 6,755,000 2.2% 16.3% 19 9/1/2041 7,495,000 - - 7,495,000 2.5% 18.7% 20 9/1/2042 8,275,000 - - 8,275,000 2.7% 21.5% 21 9/1/2043 9,115,000 - - 9,115,000 3.0% 24.5% 22 9/1/2044 10,000,000 - - 10,000,000 3.3% 27.8% 23 9/1/2045 10,940,000 - - 10,940,000 3.6% 31.4% 24 9/1/2046 11,930,000 - - 11,930,000 3.9% 35.3% 25 9/1/2047 12,965,000 - - 12,965,000 4.3% 39.6% 26 9/1/2048 14,065,000 - - 14,065,000 4.6% 44.2% 27 9/1/2049 15,220,000 - - 15,220,000 5.0% 49.3% 28 9/1/2050 16,435,000 - - 16,435,000 5.4% 54.7% 29 9/1/2051 17,710,000 - - 17,710,000 5.8% 60.5% 30 9/1/2052 19,055,000 - - 19,055,000 6.3% 66.8% 31 9/1/2053 20,470,000 - - 20,470,000 6.8% 73.6% 32 9/1/2054 9,570,000 20,495,000 - 30,065,000 9.9% 83.5% 33 9/1/2055 23,855,000 - 23,855,000 7.9% 91.4% 34 9/1/2056 21,150,000 5,000,000 26,150,000 8.6% 100.0% 35 9/1/2057
36 9/1/2058
37 9/1/2059
38 9/1/2060
39 9/1/2061
40 9/1/2062
Total 232,490,000 65,500,000 5,000,000 302,990,000 % of TotalPrincipalTerm
Current final term date
Potential final term date
Preliminary Principal Amortization Schedule
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would be at 100%. This higher call premium would essentially make it less likely to refinance for economic savings in the future.

Additional Debt. Per the Underwriter, issuance of future additional bonds would be allowed for any senior refunding bonds, mezzanine refunding bonds, or mezzanine new money bonds. If the debt service coverage ratio on the mezzanine bonds fall short of 1.20x, then consents would be required. At present, the City is not a party to receive any consents and it is unclear which party would provide the consents to issue additional bonds. Any issuance of additional new money bonds, refunding bonds or any encumbrances is a risk factor to the City as the City would have no control in the structure of the debt issuance.

PRO FORMA FLOW OF FUNDS.

If Excess Cash Flow is available, funds will be applied to Bond Principal Redemption If no Excess Cash Flow is available, Bond Principal Redemption will be delayed Less, Series 2022C (Subordinate Bonds)
Interest Payments
Less, Payments to Waterford and CSCDA
Less, Series 2022B (Mezzanine Bonds)
Interest Payments
Less, Series 2022A (Senior Bonds)
Interest Payments
Plus/Less, Certain Fees and Revenues
(Includes City's Host Fees )
Less, Total Operating Expenses
Total Operating Revenue
Bond Payment Flow of Funds
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Based on the provided pro formas from Waterford and the Underwriter, any net operating income goes first toward the Series 2022A and Series 2022B bonds interest payments, then to the payment of the annual ongoing fees to Waterford as Project Administrator and CSCDA as the issuer plus the funding of administration and Authority reserve fund part of which is used in year 10. Only then, if there are positive cash flows, does interest on the Series 2022C bonds get paid, after which any excess net income can be applied toward bond principal repayment. As mentioned previously, the cash flows provided by the Underwriter do not currently reflect the City’s host fee which is estimated to be initially at $361,970 payable in 2023 and increasing annually by 2% over the entire term of the financing. Based on our understanding, the City’s host fee would be paid ahead of any bond interest payment. We note that in order to incorporate the City’s annual host fee into the pro forma, a larger original issue discount and/or a longer deferred principal amortization schedule would need to be utilized.

The financing structure, coupled with the high ongoing fees, limits the Project’s flexibility to absorb any changes in the economy that would impact the market for rental housing, leasing rates, and rent payment conditions, and its ability to accommodate major maintenance and repair costs and unforeseen capital expenditures. In fact, the financial structure provides for projected repair and maintenance expenses of $ 9.3 million over 3 5 years and projected capital reserve of $ 7.7 million. Over this same period of time, Waterford will receive $15.1 million and CSCDA will receive $15.8 million and this is in addition to the upfront fees that they will receive from Bond proceeds as outlined in the Sources and Uses table mentioned previously. Thus, it is unclear if there would be sufficient resources from the Project to cover major renovations down the roa d.

Provided in the above chart is an illustration of the Bond payment flow of funds.

Pro forma Performance and Stress Test Scenarios . As indicated above, the pro forma as presented produces a debt service coverage ratio of approximately 1.00x to cover the payment of interest and principal on the Bonds and assumes an annual rental growth rate of 3% beginning in 2025 and on. Supplementing the Underwriter’s and Waterford’s base case analysis, Fieldman reviewed additional scenarios of the pro forma assuming re ntal revenue growth rates of 2% 4 and
0% and assuming the bond interest and principal paydown schedules as presented in the Underwriter’s pro forma. In the 2% Revenue Scenario, net revenues will be able to support the payment of all interest and approximat ely 59% of principal. In this scenario, unpaid principal in the amount of approximately $125 million would be deferred. In the 0% Revenue Scenario, net revenues will be insufficient by approximately $18.6 million to pay all interest due and will not support any principal redemption. The chart below illustrates the net revenue projections assuming growth rates of 3%, 2% and 0%, as well as the projected annual interest and principal payments.

4 As part of the City’s due diligence process in reviewing the Project, the City KMA to review the merits and the affordability of the Project in 2021. Based on KMA’s review, KMA recommended that rental rates assume a lower growth rate of 2%. 663

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Although the PBA affords the City the opportunity to force the sale of the Project any time after the 15th year, it is highly unlikely that the City would be willing to do so at that time for a number of reasons. First and foremost, the majority of the B onds would still be outstanding at that time (nearly 91% of the Series 2022A and 100% of the Series 2022B and Series 2022C bonds), so the City would first need to pay off those B onds with the sale proceeds. Selling the property would also raise issues related to the future rent affordability of the Project and if it were to be converted to market rate units, a change in the tenant composition of the Project would be required. Even though the Bonds are callable after 10 years (but the City can require the sale or refinancing after 15 years), the City cannot predict what the bond market conditions would be like after 15 years and if such refinancing would be economical. Moreover, since the B onds are not issued by the City, even though it could request a refinancing be considere d, it would not be in a position to ensure that it occurs.

KEY FINANCIAL RISKS TO CITY
Revenue Insufficiency. Since the City of Milpitas is not a direct party to the issuance of the Bonds, the City is not responsible for curing any shortfalls in revenue for the repayment of the Bonds.

However, as illustrated in the stress test scenarios, if rent were to grow at a lower rate than 3% and vacancies were higher, revenues would be insufficient and presume that the Bonds cannot be paid off at the end of the financing term except from the potential sale proceeds of the Project. However, it is uncertain what the real estate market would be like at that time, what the demand for housing would be then and what the physical condition and market value of the P roject would be. Thus, the overall potential financial benefit to the City from CSCDA’s proposal is dependent on a series of assumptions such as, but not limited to, rent growth, vacancy rates, and real estate market $0
$5
$10
$15
$20
$25
$30
2023 2025 2027 2029 2031 2033 2035 2037 2039 2041 2043 2045 2047 2049 2051 2053 2055 2057 Millions
Projected Annual Net Revenues,
Net Bond Interest and Principal Payments
Series 2022A Interest Series 2022B Interest Series 2022C Interest Subordinate Fees Series 2022A Principal Series 2022B Principal Series 2022C Principal Revenue at 3% Revenue at 2% Revenue at 0%
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conditions during the life of the bonds and at the time of potential sale of the Project. This does not include the potential risk of additional bonds and refundings without the City’s consent.

Slightly offsetting this risk is the City’s annual host fee payment with the total estimate over a 35- year period at approximately $17.96 million. Considering all this and the uncertainty of the Project’s market value at that time, there could be a scenario under which the City and the other taxing entities cannot recover their foregone property tax reve nues or make a profit. Since these projects are relatively new and there is no operating history, there is no way for the City to vet the proposed assumptions and know if the Project would be successful.

However, we note that in the relatively short history of other similar bond programs in California, the $189.335 million Workforce Housing Revenue Bonds Series 2019A (Annadel Apartments) issued by the California Community Housing Agency for a project in the City of Santa Rosa, projected revenues have fallen short of the bond interest costs. In the case of this financing, the project administrator infused cash three time in the last 14 months totaling $1.3 million in exchange for notes bearing 10% annual interest. This cure in the cash flow prevented a bond default and also prevented potential greater headline risk of harming future similar programs. 5 Other examples of
similar financings that have gone into default and bankruptcies are the bond financings issued by the Illinois Finance Authority.

CITY OF MILPITAS’ DEBT MANAGEMENT POLICY
The City adopted its current debt management policy on October 17, 2017. The policy provides guidance to the City in the prudent issuance and management of long- term and short -term debt issued by the City, assessment distric t, community facilities district or other special district, and conduit-type financing by a covered entity for multifamily housing or industrial development projects. While the City is not a direct party to the issuance of the Bonds, we note the Bonds as currently contemplated would not fall within the parameters of the City’s current debt management policy. Under the City’s policy goals, we note that “it is a policy goal of the City and the Covered Entities to protect taxpayers, ratepayers (if applicable) and constituents by utilizing conservative financing methods and techniques so as to obtain the highest practical credit ratings (if applicable) and the lowest practical borrowing costs.”

KEY BOND RECOMMENDATIONS
• Bond Structure and Project Pro Forma. Fieldman agrees with the findings of KMA’s analysis of utilizing a more prudent and conservative revenue growth rate assumption of 2%.

Additionally, we recommend limiting the bond financing term to be no greater than 35 years , utilizing a minimum 10-year o ptional redemption with no call premium for all bonds , and incorporating a minimum principal paydown of 25% within the first 10 years of the Bond issuance date. Using a more conservative growth rate assumption and incorporating these bond parameters will reduce the level of risk to the City and will ensure a more timely paydown of principal.

5 “California Scheming,” Forbes, December 2, 2021.
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• Lien Levels / Order of Bond Principal and Interest Payments. In order to ensure the timely payment of principal, we recommend that bond principal redemptions be made on the same lien level as the corresponding bond interest payments. • Bond Issuance and Project Expenses , and Priority of Expenses . We recommend limiting certain upfront and ongoing issuance expenses of the Project to be no greater than the fees charged by other similar bond programs in the State. These expenses include the fees to the bond issuer (CSCDA) and to the Project Administrator (Waterford). Additionally, we recommend that all ongoing expenses to CSCDA and to Waterford be subordinate to all Bond principal and interest payments including any required deposits to reserve funds. Ongoing payments to CSCDA and to Waterford should be paid from annual excess revenues only.

• City’s Host Fee. We recommend that the City receive a minimum of 5% or approximately $900,000 of the City’s host fee upfront, payable from Bond proceeds.

• Additional Bonds. We recommend that any issuance of additional bonds either in the form of new money bonds or refunding bonds require the written consent of the City. We r ecommend that this provision be included in the Bond Indenture where there will be assurance of enforceability.

• Bond Disclosures. We recommend that the City be a party to receive any event -based disclosures. This will ensure that the City receives timely notification of any material changes or events. We recommend that this requirement be reflected in the Bond Continuing Disclosure Agreement.
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CSCDA TURING APARTMENTS BOND PROPOSAL REVIEW

- Attachment A -

Attachment A - Preliminary Bond Cash Flows as of January 25, 2022 667

CITY OF MILPITAS

CSCDA TURING APARTMENTS BOND PROPOSAL REVIEW

- Attachment B -

Attachment B – Financial Pro Formas

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Milpitas City CouncilFebruary 15, 2022

Milpitas City Council
February 15, 2022