Northwest 1/4 of said Section 24, lying in the Jurupa Rancho and in Riverside County, according to the Official Plat thereof. Excepting therefrom that portion conveyed to the City of Ontario by Deeds recorded July 8, 2008 as Instrument No. 2008-0307387 and 2008-0307388 and be Deed recorded May 25, 2017, as Instrument No. 2017-216939, all of Official Records.
Parcel 3: The South 30 acres of the North 60 acres of the West 80 acres of the land comprised of Lots 1, 2, 5, 6 and 7, Section 24, Township 2 South, Range 7 West, San Bernardino Meridian, in the City of Ontario, County of San Bernardino, State of California, and the fractional Northwest 1/4 of Section 24, Township 2 South, Range 7 West, San Bernardino Meridian, as shown by Sectionized Survey of the Jurupa Rancho, recorded in Book 9, Page 33 of Maps, in the office of the County Recorder of said County, said fractional Northwest 1/4 being all that portion of the Northwest 1/4 of said Section 24, lying in the Jurupa Rancho, and in Riverside County, according to the Official Plat thereof. Except therefrom that portion conveyed to the City of Ontario by Deed recorded May 25, 2017 as Instrument No. 2017-216939 of Official Records.
Parcel 3:
The west 80 acres of the following described property: Lots 1, 2, 5, 6 and 7, Section 24, Township 2 South, Range 7 West, San Bernardino Meridian, in the County of San Bernardino, State of California, according to the Official Plat of said land filed in the District Land Office July 9, 1887 and the fractional northwest quarter, Section 24, Township 2 South, Range 7 West, San Bernardino Meridian, as shown by Sectionized Survey of the Jurupa Rancho, recorded in Book 9 of Maps, page 33 in the office of the County Recorder of San Bernardino, State of California, said fractional northwest quarter being all that portion of the northwest quarter of said Section 24, lying in the Jurupa Rancho and in Riverside County, EXCEPTING from said 80 acres the North 60 acres thereof. ALSO EXCEPTING any portion lying with the boundaries of Tract 30633 as filed in book 350, page(s) 51 through 61, inclusive, of maps records of Riverside County, State of California.
673
43 Assessor's Parcel Numbers(s):
1: 1073-171-04
2: 1073-171-08
3: 1073-171-09
4: 0218-331-14
674
44 EXHIBIT "B"
TO DEVELOPMENT AGREEMENT
Map showing Property and its location
675
45 EXHIBIT "C"
TO DEVELOPMENT AGREEMENT
Existing Development Approvals
On September 26, 2006, the Planning Commission:
a) Issued Resolution No. PC06-095 recommending City Council adopt and certify the Subarea 29 (Park place) Environmental Impact Report; b) Issued Resolution No. PC06-096 recommending City Council approval of the General Plan Amendment (PGPA06-003); and
c) Issued Resolution No. PC06-097 recommending City Council approval of the Subarea 29 (Park Place) Specific Plan (PSP03-003).
On October 19, 2006, the City Council:
a) Issued Resolution No. 2006-089 certifying the Subarea 29 (Park place) Environmental Impact Report; and
b) Issued Resolution No. 2006-090 approving the General Plan Amendment (PGPA06-003).
On November 7, 2006, the City Council:
a) Issued Ordinance No. 2845 approving of the Subarea 29 (Park Place) Specific Plan (PSP03-003).
On March 27, 2007, the Planning Commission:
a) Issued Resolution No. PC07-036 recommending City Council approval of an amendment to the Subarea 29 Specific Plan (PSPA07-007).
On May 1, 2007, the City Council:
a) Issued Resolution No. 2007-053 approving an amendment to the Subarea 29 Specific Plan.
On August 28, 2013, the Zoning Administrator:
a) Issued Decision No. 2013-025 approving a minor amendment to the Subarea 29 Specific Plan (PSPA13-002).
676
46 EXHIBIT "C"
TO DEVELOPMENT AGREEMENT
Existing Development Approvals (Continued)
On March 24, 2015, the Planning Commission:
a) Issued Resolution No. PC15-035 recommending City Council approval of an amendment to the Subarea 29 Specific Plan (PSPA14-002).
On April 21, 2015, the City Council:
a) Issued Resolution No. 2015-030 approving an amendment to the Subarea 29 Specific Plan.
677
47 EXHIBIT "D"
TO DEVELOPMENT AGREEMENT
Existing Land Use Regulations
These documents are listed for reference only:
1. Subarea 29 (Park place) Environmental Impact Report, Resolution No. 2006-089
2. Subarea 29 (Park Place) General Plan Amendment (PGPA06-003), Resolution No. 2006-090
3. Subarea 29 (Park Place) Specific Plan (PSP03-003), Ordinance No. 2845
4. Amendment to the Subarea 29 Specific Plan (PSPA07-003), Resolution No. 2007-053
5. Amendment to the Subarea 29 Specific Plan (PSPA13-002), Decision No. 2013- 025
6. Amendment to the Subarea 29 Specific Plan (PSPA14-002), Resolution No. 2015-030
7. City of Ontario Municipal Code
a. Six – Sanitation & Health
b. Seven – Public Works
c. Eight – Building Regulations
d. Nine – Development Code
e. Ten – Parks & Recreation
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48 EXHIBIT "E"
TO DEVELOPMENT AGREEMENT
Description of Required Infrastructure Improvements
OWNER shall design, construct, and complete all improvements including but not limited to Sewer (SW), Potable Water (PW), Recycled Water (RW), Storm Drain (SD), Fiber Optic (FO), and Street (ST) improvements necessary to serve the Property, prior to the request of any Production Units.
PHASE 1 IMPROVEMENTS
1. PW on Haven Avenue, between Eucalyptus Avenue and Bellegrave Avenue.
2. RW on Haven Avenue, between Eucalyptus Avenue and Bellegrave Avenue.
3. FO on Haven Avenue, between Eucalyptus Avenue and Bellegrave Avenue.
4. FO on Streets “A”, “B”, “C”, “D”,“E”, “F”, and “G”.
5. ST improvements on Haven Avenue, between Eucalyptus Avenue and Bellegrave Avenue.
6. SD on Haven Avenue and Street “A”.
7. Traffic Signal at Haven Avenue and Street “D”.
8. Traffic Signal at Haven Avenue and Street “A”.
9. Traffic Signal at Haven Avenue and Eucalyptus Avenue.
PHASE 2 IMPROVEMENTS
1. All Phase 1 Improvements are required for Phase 2.
2. SW on Eucalyptus Avenue, between Haven Avenue and Street “G”
3. ST improvements on Eucalyptus Avenue, between Haven Avenue and Street “G”.
4. Traffic Signal at Eucalyptus Avenue and Street “G”.
PHASE 3 IMPROVEMENTS
1. PW on Bellegrave Avenue, between Haven Avenue and Mill Creek Avenue.
2. RW on Bellegrave Avenue, between Haven Avenue and Mill Creek Avenue.
3. ST improvements on Bellegrave Avenue, between Haven Avenue and easterly tract boundary.
4. ST improvements on Bellegrave Avenue, between Haven Avenue and easterly tract boundary.
5. Traffic Signal at Bellegrave Avenue and Haven Avenue.
6. Traffic Signal at Bellegrave Avenue and Delicious Way. 679
49 EXHIBIT “F”
TO DEVELOPMENT AGREEMENT
Depiction of required Infrastructure Improvements
(SEE ATTACHED EXHIBITS)
680
50 681
51 682
52 683
53 684
54 EXHIBIT “G”
TO DEVELOPMENT AGREEMENT
Form of Plume Disclosure Letter
685
Department: Financial Services
Prepared By: Jennifer Schaefer
Staff Member Presenting: Armen Harkalyan,
Executive Director of Finance
Reviewed By: Claudia Hernandez, Doreen Nunes
Approved By:
Submitted To: Council/OHA
Approved: _______________________________
Continued To: ___________________________
Denied: __________________________________
Item No: 21
SUBJECT:
A RESOLUTION AUTHORIZING THE ISSUANCE OF CITY OF ONTARIO COMMUNITY FACILITIES DISTRICT NO. 66 (OLIVE AND OLEANDER FACILITIES) SPECIAL TAX BONDS, SERIES 2024 AND RELATED MATTERS
CITY OF ONTARIO
Agenda Report
June 18, 2024
SECTION:
ADMINISTRATIVE
REPORTS/DISCUSSION/ACTION
RECOMMENDATION:
That the City Council take the following actions:
A
.
Consider and adopt a Resolution authorizing the issuance of City of Ontario Community Facilities District No. 66 (Olive and Oleander Facilities) Special Tax Bonds, Series 2024, in an aggregate principal amount not-to-exceed $12 million, authorizing the execution and delivery of an Indenture, a Bond Purchase Agreement, a Continuing Disclosure Agreement, and an Amended and Restated Acquisition and Funding Agreement, authorizing the distribution of an Official Statement, authorizing the execution of necessary documents and certificates and related actions;
B
.
Consider and adopt a Resolution of the City of Ontario making a declaration of official intent to reimburse facilities expenditures with bond proceeds and related actions; C
.
Authorize the issuance of special tax bonds for public improvements required to facilitate the development of the Olive and Oleander Facilities project and the Ontario Ranch development; D
.
Approve the forms of the Indenture, the Bond Purchase Agreement, the Continuing Disclosure Agreement, the Amended and Restated Acquisition and Funding Agreement, and the Preliminary Official Statement;
E
.
Authorize a negotiated sale of the special tax bonds to Samuel A. Ramirez & Co., in accordance with the terms of the Bond Purchase Agreement; and F
.
Authorize the execution of the Indenture, the Bond Purchase Agreement, the Continuing Disclosure Agreement, a deemed final certification in connection with the Preliminary Official Statement, a final Official Statement and other documents in connection with the issuance of the bonds by the City Manager or the other specified authorized officers.
THE FOLLOWING COUNCIL GOALS ARE BEING ACHIEVED:
Operate in a Businesslike Manner
Focus Resources in Ontario's Commercial and Residential Neighborhoods Invest in the City's Infrastructure (Water, Streets, Sewers, Parks, Storm Drains and Public 686
Facilities)
Ensure the Development of a Well Planned, Balanced, and Self-Sustaining Community in Ontario Ranch
FISCAL IMPACT:
The use of Mello-Roos financing for public facilities in the residential development of the Olive and Oleander Facilities project in the Ontario Ranch development, is estimated to generate approximately $12 million in bond proceeds based on current market interest rates.
These funds will be used to help fund a portion of the public infrastructure improvements that will serve the project area. The Resolution authorizing the issuance of City of Ontario Community Facilities District No. 66 (Olive and Oleander Facilities) Special Tax Bonds, Series 2024, and related matters, limits the principal amount of the bonds to $12 million. The City currently expects the bonds to be sold no later than December 2024; however, such schedule could change based on market volatility and market conditions. Since Mello-Roos bonds are not a direct obligation of the City and are paid from special taxes levied on each taxable parcels in the applicable community facilities district, there is no direct impact to the General Fund from the issuance of Mello-Roos bonds. Annual approval by the City Council will be required to process the special tax levies necessary to fund the ongoing debt service obligations of the Ontario Community Facilities District No. 66 (Olive and Oleander Facilities).
BACKGROUND & ANALYSIS:
The Mello-Roos Community Facilities Act of 1982 provides local government, with the requisite consent and approval from the property owners, the authority to establish community facilities districts for levying special taxes to fund governmental services and finance various kinds of public infrastructure facilities. Under the Mello-Roos Act, the initial steps in the formation of a community facilities district to finance public improvements are adopting a Resolution declaring the City's intention to establish a community facilities district and levy special taxes, a Resolution to issue bonds, and a Resolution of the City of Ontario making a declaration of official intent to reimburse facilities expenditures with bond proceeds and related matters. On May 17, 2022, the City Council, in accordance with the Mello-Roos Act, took the initial steps in the formation of the District with the adoption of Resolution No. 2022-042, declaring the City's intention to establish the District and to authorize the levy of special taxes, and Resolution No. 2022-043 deeming it necessary for the District to incur bonded indebtedness. On June 21, 2022, the City Council adopted Resolution No. 2022-061 forming the District. Based on a successful property owner election held on June 21, 2022, the City Council adopted Ordinance No. 3215 on July 5, 2022, authorizing the levy of special taxes within the District to finance public improvements related to the Olive and Oleander Facilities project.
The public improvements to be financed by the District are as follows:
Storm Drain System Facilities;
Fiber Optic System Facilities;
Sewer System Facilities;
Water and Recycled Water System Facilities; and
Streets and Traffic Circulation System Facilities.
The Olive and Oleander Facilities project addresses the residential development of approximately
21.09 gross acres located south of Ontario Ranch Road, west of Hamner Avenue, east of Mill Creek 687
Avenue, and north of Edison Avenue. At build out, the project is projected to include 224 units, comprised of 137 attached residential units and 87 detached residential units.
The proposed Resolutions references several bond documents and other matters related to the proposed issuance of bonds by City of Ontario Community Facilities District No. 66 (Olive and Oleander). The documents are listed below and are on file with the Records Management Department:
Indenture;
Bond Purchase Agreement;
Continuing Disclosure Agreement;
Amended and Restated Acquisition and Funding Agreement; and Preliminary Official Statement.
688
RESOLUTION NO. ________
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ONTARIO,
CALIFORNIA, AUTHORIZING THE ISSUANCE OF CITY OF ONTARIO COMMUNITY FACILITIES DISTRICT NO. 66 (OLIVE AND OLEANDER FACILITIES) SPECIAL TAX BONDS, SERIES 2024, IN AN AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED $12,000,000,
AUTHORIZING THE EXECUTION AND DELIVERY OF AN INDENTURE,
A BOND PURCHASE AGREEMENT, A CONTINUING DISCLOSURE
AGREEMENT AND AN AMENDED AND RESTATED ACQUISITION AND
FUNDING AGREEMENT, AUTHORIZING THE DISTRIBUTION OF AN
OFFICIAL STATEMENT IN CONNECTION THEREWITH AND
AUTHORIZING THE EXECUTION OF NECESSARY DOCUMENTS AND
CERTIFICATES AND RELATED ACTIONS
WHEREAS, the City Council (the “City Council”) of the City of Ontario (the “City”) has formed City of Ontario Community Facilities District No. 66 (Olive and Oleander Facilities) (the “Community Facilities District”) under the provisions of the Mello-Roos Community Facilities Act of 1982 (the “Act”); WHEREAS, the Community Facilities District is authorized under the Act to levy a special tax (the “Special Tax”) to pay for the costs of certain public facilities (the “Facilities”) and to issue bonds payable from the Special Tax; WHEREAS, in order to provide funds to finance certain of the Facilities, the Community Facilities District proposes to issue its City of Ontario Community Facilities District No. 66 (Olive and Oleander Facilities) Special Tax Bonds, Series 2024 (the “Series 2024 Bonds”), in the aggregate principal amount of not to exceed $12,000,000;
WHEREAS, in order to provide for the authentication and delivery of the Series 2024 Bonds, to establish and declare the terms and conditions upon which the Series 2024 Bonds are to be issued and secured and to secure the payment of the principal thereof, premium, if any, and interest thereon, the Community Facilities District proposes to enter into an Indenture with Zions Bancorporation, National Association, as trustee (the “Trustee”) (such Indenture, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the “Indenture”);
WHEREAS, Samuel A. Ramirez & Co., Inc. (the “Underwriter”), has presented the Community Facilities District with a proposal, in the form of a Bond Purchase Agreement, to purchase the Series 2024 Bonds from the Community Facilities District (such Bond Purchase Agreement, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the “Purchase Agreement”);
689
WHEREAS, Rule 15c2-12 promulgated under the Securities Exchange Act of 1934 (“Rule 15c2-12”) requires that, in order to be able to purchase or sell the Series 2024 Bonds, the underwriter thereof must have reasonably determined that the Community Facilities District, as the issuer of the Series 2024 Bonds, has undertaken in a written agreement or contract for the benefit of the holders of the Series 2024 Bonds to provide disclosure of certain financial information and certain listed events on an ongoing basis;
WHEREAS, in order to cause such requirement to be satisfied, the Community Facilities District desires to enter into a Continuing Disclosure Agreement with the Trustee (such Continuing Disclosure Agreement, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the “Continuing Disclosure Agreement”); WHEREAS, a form of the Preliminary Official Statement to be distributed in connection with the public offering of the Series 2024 Bonds has been prepared (such Preliminary Official Statement, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the “Preliminary Official Statement”); WHEREAS, the City and Shea Homes Limited Partnership (the “Developer”) previously entered into the Acquisition and Funding Agreement, dated as of June 1, 2022 (the “Original Acquisition Agreement”), pursuant to which, in accordance with the terms set forth therein, the Developer is to construct or cause to be constructed certain of the Facilities that, upon satisfaction of the conditions specified therein, the City is to acquire and take title to, and the Developer is to be paid the purchase price of, determined as set forth therein, which purchase price is to be paid from the proceeds of the special tax or bonds of the Community Facilities District; WHEREAS, the Original Acquisition Agreement provides that the Original Acquisition Agreement may be amended by an instrument in writing executed and delivered by the City and the Developer;
WHEREAS, the City and the Developer desire to amend certain provisions of, and restate, the Original Acquisition Agreement;
WHEREAS, there has been presented to this meeting a form of an Amended and Restated Acquisition and Funding Agreement that so amends and restates the Original Acquisition Agreement (such Amended and Restated Acquisition and Funding Agreement, in the form presented to this meeting, with such changes, insertions and omissions as are made pursuant to this Resolution, being referred to herein as the “Amended and Restated Acquisition Agreement”); WHEREAS, there have been prepared and submitted to this meeting forms of:
(a) the Indenture;
690
(b) the Purchase Agreement;
(c) the Continuing Disclosure Agreement;
(d) the Preliminary Official Statement; and
(e) the Amended and Restated Acquisition Agreement;
WHEREAS, Kitty Siino & Associates, Inc. has prepared and provided to the Community Facilities District an appraisal report, dated May 13, 2024 (the “Appraisal”), providing an opinion of value of the property in the Community Facilities District, which has been submitted to this meeting;
WHEREAS, Section 5852.1 of the California Government Code requires that the City Council obtain from an underwriter, financial advisor or private lender and disclose, in a meeting open to the public, prior to authorization of the issuance of the Series 2024 Bonds, good faith estimates of (a) the true interest cost of the Series 2024 Bonds, (b) the sum of all fees and charges paid to third parties with respect to the Series 2024 Bonds, (c) the amount of proceeds of the Series 2024 Bonds expected to be received net of the fees and charges paid to third parties and any reserves or capitalized interest paid or funded with proceeds of the Series 2024 Bonds, and (d) the sum total of all debt service payments on the Series 2024 Bonds calculated to the final maturity of the Series 2024 Bonds plus the fees and charges paid to third parties not paid with the proceeds of the Series 2024 Bonds;
WHEREAS, in compliance with Section 5852.1 of the California Government Code, the City Council has obtained from Urban Futures, Inc., as the Community Facilities District’s municipal advisor (the “Municipal Advisor”), the required good faith estimates, which the Municipal Advisor has prepared in consultation with the Underwriter, and such estimates are disclosed and set forth in Exhibit A attached hereto;
WHEREAS, the Community Facilities District desires to proceed to issue and sell the Series 2024 Bonds and to authorize the execution of such documents and the performance of such acts as may be necessary or desirable to effect the offering, sale and issuance of the Series 2024 Bonds; and
WHEREAS, the City Council is the legislative body of the Community Facilities District;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Ontario as follows:
Section 1. The foregoing recitals are true and correct, and the City Council so finds and determines.
691
Section 2. Subject to the provisions of Section 3 hereof, the issuance of the Series 2024 Bonds, in an aggregate principal amount of not to exceed $12,000,000, on the terms and conditions set forth in, and subject to the limitations specified in, the Indenture, be and the same is hereby authorized and approved. The Series 2024 Bonds shall be dated, shall bear interest at the rates, shall mature on the dates, shall be subject to call and redemption, shall be issued in the form and shall be as otherwise provided in the Indenture, as the same shall be completed as provided in this Resolution.
Section 3. The Indenture, in substantially the form submitted to this meeting and made a part hereof as though set forth herein, be and the same is hereby approved. Each of the Mayor of the City, and such other member of the City Council as the Mayor may designate, the City Manager of the City, the Assistant City Manager of the City, the Executive Director of Finance of the City, the Deputy City Treasurer of the City, and such other officer or employee of the City as the City Manager may designate (the “Authorized Officers”) is hereby authorized, and any one of the Authorized Officers is hereby directed, for and in the name of the Community Facilities District, to execute and deliver the Indenture in the form submitted to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the Indenture by such Authorized Officer; provided, however, that such changes, insertions and omissions shall not authorize an aggregate principal amount of Series 2024 Bonds in excess of $12,000,000, shall not result in a final maturity date of the Series 2024 Bonds later than September 1, 2055, and shall not result in a true interest cost for the Series 2024 Bonds in excess of 6.00%.
Section 4. The Purchase Agreement, in substantially the form submitted to this meeting and made a part hereof as though set forth in full herein, be and the same is hereby approved. Each of the Authorized Officers is hereby authorized, and any one of the Authorized Officers is hereby directed, for and in the name of the Community Facilities District, to execute and deliver the Purchase Agreement in the form presented to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the Purchase Agreement by such Authorized Officer; provided, however, that such changes, insertions and omissions shall not result in an aggregate underwriter’s discount (not including any original issue discount) from the principal amount of the Series 2024 Bonds in excess of 1.50% of the aggregate principal amount of the Series 2024 Bonds. The City Council hereby finds and determines that the sale of the Series 2024 Bonds at negotiated sale as contemplated by the Purchase Agreement will result in a lower overall cost.
Section 5. The Continuing Disclosure Agreement, in substantially the form submitted to this meeting and made a part hereof as though set forth in full herein, be and the same is hereby approved. Each of the Authorized Officers is hereby authorized, and any one of the Authorized Officers is hereby directed, for and in the name of the Community Facilities District, to execute and deliver the Continuing Disclosure Agreement in the form presented to this meeting, with such changes, insertions and 692
omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the Continuing Disclosure Agreement by such Authorized Officer.
Section 6. The Preliminary Official Statement, in substantially the form presented to this meeting and made a part hereof as though set forth in full herein, with such changes, insertions and omissions therein as may be approved by an Authorized Officer, be and the same is hereby approved, and the use of the Preliminary Official Statement in connection with the offering and sale of the Series 2024 Bonds is hereby authorized and approved. Each of the Authorized Officers is hereby authorized, and any one of the Authorized Officers is hereby directed, to certify on behalf of the Community Facilities District that the Preliminary Official Statement is deemed final as of its date, within the meaning of Rule 15c2-12 (except for the omission of certain final pricing, rating and related information as permitted by Rule 15c2-12).
Section 7. The preparation and delivery of a final Official Statement (the “Official Statement”), and its use in connection with the offering and sale of the Series 2024 Bonds, be and the same is hereby authorized and approved. The Official Statement shall be in substantially the form of the Preliminary Official Statement, with such changes, insertions and omissions as may be approved by an Authorized Officer, such approval to be conclusively evidenced by the execution and delivery thereof. Each of the Authorized Officers is hereby authorized, and any one of the Authorized Officers is hereby directed, for and in the name of the Community Facilities District, to execute the final Official Statement and any amendment or supplement thereto.
Section 8. The Amended and Restated Acquisition Agreement, in substantially the form submitted to this meeting and made a part hereof as though set forth in full herein, be and the same is hereby approved. Each of the Authorized Officers is hereby authorized, and any one of the Authorized Officers is hereby directed, for and in the name of the City, to execute and deliver the Amended and Restated Acquisition Agreement in the form presented to this meeting, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the Amended and Restated Acquisition Agreement by such Authorized Officer.
Section 9. Based upon the value of the property within the Community Facilities District reported in the Appraisal and the value-to-lien information for such property set forth in the Preliminary Official Statement, the City Council, for purposes of Section 53345.8 of the Act, hereby finds and determines that the value of the real property that would be subject to the Special Tax to pay debt service on the Series 2024 Bonds will be at least three times the principal amount of the Series 2024 Bonds to be sold and the principal amount of all other bonds outstanding that are secured by a special tax levied pursuant to the Act on property within the Community Facilities District or a special assessment levied on property within the Community Facilities District.
Section 10. If and to the extent that any feature or aspect of the Series 2024 693
Bond structure, the rate and method of apportionment of the Special Tax, the method of financing the Facilities, the appraisal, the absorption study or other components of the Series 2024 Bond issue approved and authorized hereby is inconsistent or in conflict with any requirement, standard, measure or procedure set forth in the City’s Mello-Roos Community Facilities Act of 1982 Local Goals and Policies, such requirement, standard, measure or procedure is, to the extent necessary to eliminate such inconsistency or conflict, hereby waived, and the City Council hereby finds and determines that benefit inures to the ultimate property owners, the Community Facilities District and/or the City as a result of such waiver.
Section 11. The City Council hereby approves the execution and delivery of all agreements, documents, certificates and instruments referred to herein with electronic signatures as may be permitted under the California Uniform Electronic Transactions Act and digital signatures as may be permitted under Section 16.5 of the California Government Code using DocuSign.
Section 12. All actions heretofore taken by the officers, employees and agents of the City with respect to the issuance and sale of the Series 2024 Bonds, or in connection with or related to any of the agreements, documents, certificates or instruments referred to herein, are hereby approved, confirmed and ratified.
Section 13. The Authorized Officers and the officers, employees and agents of the City are, and each of them is, hereby authorized and directed, for and in the name of the Community Facilities District to take all actions and do any and all things and to execute and deliver any and all agreements, documents, certificates or instruments that they, or any of them, may deem necessary or advisable in order to consummate the transactions contemplated by this Resolution and otherwise to carry out, give effect to and comply with the terms and intent of this Resolution not inconsistent with the provisions hereof.
Section 14. This Resolution shall take effect immediately upon its adoption.
The City Clerk of the City of Ontario shall certify as to the adoption of this Resolution.
PASSED, APPROVED, AND ADOPTED this 18th day of June, 2024. _____________________________________
PAUL S. LEON, MAYOR
694
ATTEST:
____________________________________
SHEILA MAUTZ, CITY CLERK
APPROVED AS TO FORM:
____________________________________
BEST BEST & KRIEGER LLP
CITY ATTORNEY
695
STATE OF CALIFORNIA )
COUNTY OF SAN BERNARDINO )
CITY OF ONTARIO )
I, SHEILA MAUTZ, City Clerk of the City of Ontario, DO HEREBY CERTIFY that foregoing Resolution No. 2024- was duly passed and adopted by the City Council of the City of Ontario at their regular meeting held June 18, 2024 by the following roll call vote, to wit:
AYES: COUNCIL MEMBERS:
NOES: COUNCIL MEMBERS:
ABSENT: COUNCIL MEMBERS:
____________________________________
SHEILA MAUTZ, CITY CLERK
(SEAL)
The foregoing is the original of Resolution No. 2024- duly passed and adopted by the Ontario City Council at their regular meeting held June 18, 2024. _____________________________________
SHEILA MAUTZ, CITY CLERK
(SEAL)
696
EXHIBIT A
GOOD FAITH ESTIMATES
The good faith estimates set forth herein are provided with respect to the Series 2024 Bonds in accordance with Section 5852.1 of the California Government Code.
Such good faith estimates have been provided to the Community Facilities District by the Municipal Advisor, which the Municipal Advisor has prepared in consultation with the Underwriter.
Principal Amount. The Municipal Advisor has informed the Community Facilities District that, based on the Community Facilities District’s financing plan and current market conditions, its good faith estimate of the aggregate principal amount of the Series 2024 Bonds to be issued and sold is $10,050,000 (the “Estimated Principal Amount”), which does not include approximately $78,458 of net premium estimated to be generated based on current market conditions. Net premium is generated when, on a net aggregate basis for a single issuance of bonds, the price paid for such bonds is higher than the face value of such bonds. Such Estimated Principal Amount and such estimated net premium amount would produce approximately $10,128,458 of gross proceeds.
True Interest Cost of the Series 2024 Bonds . The Municipal Advisor has informed the Community Facilities District that, assuming that the Estimated Principal Amount of the Series 2024 Bonds is issued and sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the true interest cost of the Series 2024 Bonds, which means the rate necessary to discount the amounts payable on the respective principal and interest payment dates to the purchase price received for the Series 2024 Bonds, is 5.32%.
Finance Charge of the Series 2024 Bonds . The Municipal Advisor has informed the Community Facilities District that, assuming that the Estimated Principal Amount of the Series 2024 Bonds is issued and sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the finance charge for the Series 2024 Bonds, which means the sum of all fees and charges paid to third parties (or costs associated with the Series 2024 Bonds), is $425,750.
Amount of Proceeds to be Received . The Municipal Advisor has informed the Community Facilities District that, assuming that the Estimated Principal Amount of the Series 2024 Bonds is issued and sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the amount of proceeds expected to be received by the Community Facilities District for sale of the Series 2024 Bonds, less the finance charge of the Series 2024 Bonds, as estimated above, and any reserves or capitalized interest paid or funded with proceeds of the Series 2024 Bonds, is $9,023,789.
Total Payment Amount . The Municipal Advisor has informed the Community Facilities District that, assuming that the Estimated Principal Amount of the Series 2024 Bonds is issued and sold, and based on market interest rates prevailing at the time of 697
preparation of such estimate, its good faith estimate of the total payment amount, which means the sum total of all payments the Community Facilities District will make to pay debt service on the Series 2024 Bonds, plus the finance charge for the Series 2024 Bonds, as described above, not paid with the proceeds of the Series 2024 Bonds, calculated to the final maturity of the Series 2024 Bonds, is $20,296,146, which excludes any reserves (or interest accrued thereon) or capitalized interest funded or paid with proceeds of the Series 2024 Bonds (which may offset such total payment amount).
The foregoing estimates constitute good faith estimates only and are based on market conditions prevailing at the time of preparation of such estimates. The actual principal amount of the Series 2024 Bonds issued and sold, the true interest cost thereof, the finance charges thereof, the amount of proceeds received therefrom and total payment amount with respect thereto may differ from such good faith estimates due to (a) the actual date of the sale of the Series 2024 Bonds being different than the date assumed for purposes of such estimates, (b) the actual principal amount of Series 2024 Bonds issued and sold being different from the Estimated Principal Amount, (c) the actual amortization of the Series 2024 Bonds being different than the amortization assumed for purposes of such estimates, (d) the actual market interest rates at the time of sale of the Series 2024 Bonds being different than those estimated for purposes of such estimates, (e) other market conditions, or (f) alterations in the Community Facilities District’s financing plan, or a combination of such factors. The actual date of sale of the Series 2024 Bonds and the actual principal amount of Series 2024 Bonds issued and sold will be determined by the Community Facilities District based on the timing of the need for proceeds of the Series 2024 Bonds and other factors. The actual interest rates borne by the Series 2024 Bonds will depend on market interest rates at the time of sale thereof. The actual amortization of the Series 2024 Bonds will also depend, in part, on market interest rates at the time of sale thereof. Market interest rates are affected by economic and other factors beyond the control of the Community Facilities District.
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RESOLUTION NO. _________
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ONTARIO,
CALIFORNIA, MAKING A DECLARATION OF OFFICIAL INTENT TO
REIMBURSE FACILITIES EXPENDITURES WITH BOND PROCEEDS
AND RELATED ACTIONS
WHEREAS, the City Council (the “City Council”) of the City of Ontario (the “City”) has formed City of Ontario Community Facilities District No. 66 (Olive and Oleander Facilities) (the “Community Facilities District”) under the provisions of the Mello-Roos Community Facilities Act of 1982 (the “Act”);
WHEREAS, the Community Facilities District is authorized under the Act to levy a special tax (the “Special Tax”) to pay for the costs of certain public facilities (the “Facilities”) and to issue bonds payable from the Special Tax; WHEREAS, in order to provide funds to finance certain of the Facilities, the Community Facilities District proposes to issue its City of Ontario Community Facilities District No. 66 (Olive and Oleander Facilities) Special Tax Bonds, Series 2024 (the “Series 2024 Bonds”);
WHEREAS, beginning the 60-day period prior to the date hereof, the City has paid or incurred, or expects to pay or incur, costs with respect to the Facilities prior to the issuance of the Series 2024 Bonds in order to finance the Facilities; WHEREAS, the City also may pay or incur certain ‘preliminary expenditures’ in connection with the Facilities, which term includes architectural, engineering, surveying, soil testing, reimbursement bond issuance, and similar costs that are incurred prior to commencement of acquisition, construction, or rehabilitation of a project, other than land acquisition, site preparation, and similar costs incident to commencement of construction;
WHEREAS, in order to reimburse itself for the payment, or pay unpaid costs, of the Facilities, the City anticipates it will issue Series 2024 Bonds in an amount not expected to exceed $12,000,000 for the purpose of financing costs of the Facilities; WHEREAS, proceeds of the Series 2024 Bonds will be allocated to reimbursement expenditures no later than 18 months after the later of (i) the date the cost is paid, or (ii) the date the Facilities (or each component thereof) is placed in service or abandoned (but in no event more than three years after the cost is paid); WHEREAS, Section 1.150-2 of the Treasury Regulations requires the City to declare its reasonable official intent to reimburse prior expenditures for the Facilities with proceeds of indebtedness; and
WHEREAS, the City wishes to declare its official intent to use proceeds of indebtedness (such as the Series 2024 Bonds) to reimburse expenditures of the 699
Facilities paid before its obligations are issued and to finance the Facilities costs on a long-term basis with the proceeds of such indebtedness.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Ontario as follows:
Section 1. The foregoing recitals are true and correct, and the City Council so finds and determines.
Section 2. This Resolution is adopted by the City Council solely for purposes of establishing compliance with the requirements of Section 1.150-2 of the Treasury Regulations. Unless otherwise defined, terms used herein shall have the meaning set forth in the Internal Revenue Code of 1986 and in Section 1.150-2 of the Treasury Regulations. This Resolution does not bind the City to make any expenditure, incur any indebtedness, or proceed with construction of the Facilities.
Section 3. All actions heretofore taken by the officers, employees and agents of the City with respect to the actions set forth above are hereby approved, confirmed and ratified.
Section 4. The officers, employees and agents of the City are, and each of them is, hereby authorized and directed, for and in the name of the Community Facilities District to take all actions and do any and all things that they, or any of them, may deem necessary or advisable in order to consummate the transactions contemplated by this Resolution and otherwise to carry out, give effect to and comply with the terms and intent of this Resolution not inconsistent with the provisions hereof.
Section 5. This Resolution shall take effect immediately upon its adoption.
The City Clerk of the City of Ontario shall certify as to the adoption of this Resolution.
PASSED, APPROVED, AND ADOPTED this 18th day of June, 2024. _____________________________________
PAUL S. LEON, MAYOR
ATTEST:
____________________________________
SHEILA MAUTZ, CITY CLERK
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APPROVED AS TO FORM:
____________________________________
BEST BEST & KRIEGER LLP
CITY ATTORNEY
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STATE OF CALIFORNIA )
COUNTY OF SAN BERNARDINO )
CITY OF ONTARIO )
I, SHEILA MAUTZ, City Clerk of the City of Ontario, DO HEREBY CERTIFY that foregoing Resolution No. 2024- was duly passed and adopted by the City Council of the City of Ontario at their regular meeting held June 18, 2024 by the following roll call vote, to wit:
AYES: COUNCIL MEMBERS:
NOES: COUNCIL MEMBERS:
ABSENT: COUNCIL MEMBERS:
____________________________________
SHEILA MAUTZ, CITY CLERK
(SEAL)
The foregoing is the original of Resolution No. 2024- duly passed and adopted by the Ontario City Council at their regular meeting held June 18, 2024. _____________________________________
SHEILA MAUTZ, CITY CLERK
(SEAL)
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