8.3 Packet Pg. 519
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Such notice shall state the redemption date and the redemption price and, if less than all of the then Outstanding 2026 Bonds are to be called for redemption, shall designate the CUSIP numbers and 2026 Bond numbers of the 2026 Bonds to be redeemed by giving the individual CUSIP number and 2026 Bond number of each 2026 Bond to be redeemed or shall state that all 2026 Bonds between two stated 2026 Bond numbers, both inclusive, are to be redeemed or that all of the 2026 Bonds of one or more maturities have been called for redemption, shall state as to any 2026 Bond called in part the principal amount thereof to be redeemed, and shall require that such 2026 Bonds be then surrendered at the Principal Office of the Fiscal Agent for redemption at the said redemption price, and shall state that further interest on such 2026 Bonds will not accrue from and after the redemption date.
Upon the payment of the redemption price of 2026 Bonds being redeemed, each check or other transfer of funds issued for such purpose shall, to the extent practicable, bear the CUSIP number identifying, by issue and maturity, of the 2026 Bonds being redeemed with the proceeds of such check or other transfer.
The Authority has the right to rescind any notice of the redemption of 2026 Bonds under Section 11.04(A)(i) by written notice to the Fiscal Agent on or prior to two Business Days prior the date fixed for redemption, in which case such redemption shall be cancelled and annulled and such cancellation shall not constitute an event of default. Any notice of redemption shall be cancelled and annulled if for any reason funds will not be or are not available on the date fixed for redemption for the payment in full of the 2026 Bonds then called for redemption, and such cancellation shall not constitute an event of default. The Authority and the Fiscal Agent have no liability to the Owners or any other party related to or arising from such rescission or cancellation of redemption. The Fiscal Agent shall mail notice of such rescission and cancellation of redemption in the same manner as the original notice of redemption was sent under this Section.
Whenever provision is made in this Agreement for the optional redemption of less than all of the 2026 Bonds of any maturity, the Fiscal Agent as directed by the Authority shall select the 2026 Bonds to be redeemed, from all 2026 Bonds or such given portion thereof of such maturity by lot in any manner which the Authority in its sole discretion shall deem appropriate.
Upon surrender of 2026 Bonds redeemed in part only, the Authority shall execute and the Fiscal Agent shall authenticate and deliver to the registered Owner, at the expense of the Authority, a new 2026 Bond or 2026 Bonds, of the same series and maturity, of authorized denominations in an aggregate principal amount equal to the unredeemed portion of the 2026 Bond or 2026 Bonds.
(D) Effect of Redemption. From and after the date fixed for redemption, if funds available for the payment of the principal of, and interest and any premium on, the 2026 Bonds so called for redemption shall have been deposited in the Bond Fund or other fund for the benefit of the 2026 Bonds, such 2026 Bonds so called shall cease to be entitled to any benefit under this Agreement other than the right to receive payment of the redemption price, and no interest shall accrue thereon on or after the redemption date specified in such notice.
All 2026 Bonds redeemed and purchased by the Fiscal Agent pursuant to this Section shall be canceled by the Fiscal Agent. The Fiscal Agent shall destroy the cancelled 2026 Bonds and issue a certificate of destruction thereof to the Authority.
8.3 Packet Pg. 520
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Section 11.05. Form of 2026 Bonds; Authentication and Delivery. (A) Form of 2026 Bonds. The 2026 Bonds, the form of Fiscal Agent’s certificate of authentication, and the form of assignment to appear thereon, shall be substantially in the respective forms set forth in Exhibit C attached hereto and by this reference incorporated herein, with necessary or appropriate variations, omissions and insertions, as permitted or required by this Agreement and the Act.
(B) Execution of 2026 Bonds. The 2026 Bonds shall be executed on behalf of the Authority by the Executive Director and the Secretary of the Authority who are in office on the date of adoption of this Supplemental Agreement No. 2 or at any time thereafter, and the seal of the Authority shall be impressed, imprinted or reproduced by facsimile signature thereon. If any officer whose signature appears on any 2026 Bond ceases to be such officer before delivery of the 2026 Bonds to the Owner, such signature shall nevertheless be as effective as if the officer had remained in office until the delivery of the 2026 Bonds to the Owner. Any 2026 Bond may be signed and attested on behalf of the Authority by such persons as at the actual date of the execution of such 2026 Bond shall be the proper officers of the Authority although at the nominal date of such 2026 Bond any such person shall not have been such officer of the Authority.
Only such of the 2026 Bonds as shall bear thereon a certificate of authentication in the form set forth in Exhibit A hereto, manually executed and dated by the Fiscal Agent, shall be valid or obligatory for any purpose or entitled to the benefits of this Agreement, and such certificate of the Fiscal Agent shall be conclusive evidence that such 2026 Bonds have been duly authenticated and delivered hereunder and are entitled to the benefits of this Agreement. (C) Authentication and Delivery of 2026 Bonds. At any time after the execution of Supplemental Agreement No. 2 and delivery by the Authority of an Officer’s Certificate that the requirements of Section 5.17 for the issuance of the 2026 Bonds as Additional Bonds have been met, the Authority may issue the 2026 Bonds for the District in the aggregate principal amount set forth in Section 11.02 and deliver the 2026 Bonds to the Original Purchaser. The Authorized Officers of the Authority are hereby authorized and directed to deliver any and all documents and instruments necessary to cause the issuance of the 2026 Bonds in accordance with the provisions of the Act and this Agreement, as supplemented by Supplemental Agreement No. 2, to authorize the payment of 2026 Costs of Issuance and costs of the Project by the Fiscal Agent from the proceeds of the 2026 Bonds and to do and cause to be done any and all acts and things necessary or convenient for delivery of the 2026 Bonds to the Original Purchaser. The provisions of Sections 2.06 through 2.13 of the Original Fiscal Agent Agreement shall apply to the 2026 Bonds in a like manner as applied to the 2026 Bonds.
Section 11.06. Application of Proceeds of Sale of 2026 Bonds. (A) The proceeds of the purchase of the 2026 Bonds by the Original Purchaser in the amount of $___________ (which is equal to the par amount of the 2026 Bonds, plus a net original issue premium of $___________ and less an Underwriter’s discount of $___________), shall be paid to the Fiscal Agent, who shall forthwith set aside, pay over and deposit such proceeds on the Closing Date as follows:
(i) Deposit in the 2026 Improvement Account of the Improvement Fund $___________;
8.3 Packet Pg. 521
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(ii) Deposit in the 2026 Reserve Account of the Reserve Fund $___________, equaling the initial amount of the Reserve Requirement for the 2026 Bonds; and
(iii) Deposit in the 2026 Costs of Issuance Fund $___________. (B) In accordance with Section 4.03(A), the Fiscal Agent shall establish a separate subaccount within the Reserve Fund known as the “2026 Reserve Account,” into which the amount set forth in Section 11.06(A)(ii) shall be deposited as the initial Reserve Requirement.
The Reserve Requirement may be recalculated according to the definition thereof and decrease but shall not increase.
The 2026 Reserve Account shall be held by the Fiscal Agent within the Reserve Fund, and administered as set forth in the Agreement. Amounts available in the 2026 Reserve Account shall be available to pay interest and principal on the 2026 Bonds in accordance with this Agreement.
(C) The Fiscal Agent may, in its discretion, establish a temporary fund or account in its books and records to facilitate transfers required under this Section 11.06.
Section 11.07. 2026 Costs of Issuance Fund. There is hereby established a separate fund to be known as the “2026 Costs of Issuance Fund,” which shall be held by the Fiscal Agent in trust. Amounts in the Costs of Issuance Fund shall be disbursed from time to time to pay 2026 Costs of Issuance, as set forth in an Officer’s Certificate containing respective amounts to be paid to the designated payees, signed by an Authorized Officer and delivered to the Fiscal Agent. The Fiscal Agent shall pay all 2026 Costs of Issuance upon receipt of an invoice from any such payee which requests payment in an amount which is less than or equal to the amount set forth with respect to such payee in such Officer’s Certificate, or upon receipt of an Officer’s Certificate requesting payment of a 2026 Costs of Issuance not listed on the initial Officer’s Certificate delivered to the Fiscal Agent on the Closing Date. The Fiscal Agent shall maintain the 2026 Costs of Issuance Fund until 6 months after the Closing Date, and shall transfer any moneys remaining therein on such date, including any investment earnings thereon, to the 2026 Improvement Account. Thereafter, every invoice received by the Fiscal Agent shall be paid from amounts on deposit in the 2026 Improvement Account and the Fiscal Agent shall close the 2026 Costs of Issuance Fund. Moneys in the 2026 Costs of Issuance Fund shall be invested and deposited in accordance with Section 6.01. Interest earnings and profits resulting from said investment shall be retained by the Fiscal Agent in the 2026 Costs of Issuance Fund to be used for the purposes of such fund.
Section 11.08. Procedure for Disbursement of 2026 Improvement Account.. (A) Disbursements. Disbursements from the 2026 Improvement Account shall be made by the Fiscal Agent according to the procedure set forth in Section 3.04, and an Officer’s Certificate substantially in the form of Exhibit B to the Agreement (except that in such Officer’s Certificate, reference shall be made to the 2026 Improvement Account and to the 2026 Bonds). (B) Investment. Moneys in the Improvement Fund and the accounts established thereunder shall be invested and deposited in accordance with Section 6.01. Interest earnings and profits from the investment of amounts in the Improvement Fund shall be retained by the Fiscal Agent in the Improvement Fund to be used for the purposes of the Improvement Fund.
8.3 Packet Pg. 522
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(C) Closing of Fund. Upon the filing of an Officer’s Certificate stating that the portion of the Project to be financed from the Improvement Fund and the accounts established thereunder has been completed and that all costs of such portion of the Project have been paid or are not required to be paid from the Improvement Fund, the Fiscal Agent shall transfer the amount, if any, remaining in the Improvement Fund to the Bond Fund for application to the payment of principal of and interest on the Bonds in accordance with Section 4.02 and the Improvement Fund shall be closed.
Section 11.09. Security for 2026 Bonds. The 2026 Bonds shall be Additional Bonds which shall be secured in the manner and to the extent set forth in Articles IV and V, and in this Article XI.
Section 11.10. Effect of this Article XI. Except as in this Article XI expressly provided or except to the extent inconsistent with any provision of this Article XI, the 2026 Bonds shall be deemed to be “Bonds” under and within the meaning of Section 1.03, and every term and condition contained in the foregoing provisions of this Agreement shall apply to the 2026 Bonds with full force and effect, with such omissions, variations and modifications thereof as may be appropriate to make the same conform to this Article XI.
SECTION 2. Attachment of Form of 2026 Bond. The Original Fiscal Agent Agreement is hereby further amended by incorporating therein an Exhibit C setting forth the form of the 2026 Bonds, which shall read in its entirety as set forth in Exhibit A attached hereto and hereby made a part hereof.
SECTION 3. Additional Amendments to Original Fiscal Agent Agreement. The Original Fiscal Agent Agreement is hereby further amended as follows:
(A) Section 3.04(A) of the Agreement is hereby amended by adding thereto, as a new third sentence thereof, the following: “There is also hereby created within the Improvement Fund a separate account designated as the “2026 Improvement Account” of the Improvement Fund, which account is hereby established for purposes of accounting for the use and disposition of 2026 Bond proceeds directed to the Improvement Fund pursuant to Section 11.06 and 11.08.
(B) Section 4.03(A) is amended to add a new third paragraph as follows:
There is hereby established as a separate account within the Reserve Fund to be held by the Fiscal Agent, the 2026 Reserve Account, to the credit of which a deposit shall be made as required by Section 11.06(A)(ii). Moneys in the 2026 Reserve Account shall be held in trust by the Fiscal Agent for the benefit of the Owners of the 2026 Bonds for the payment of principal of, and interest on, all Outstanding 2026 Bonds and shall be subject to a lien in favor of the Owners of the 2026 Bonds on an equal basis.
(D) References in the Original Fiscal Agent Agreement to the 2015 Bonds which, if the context requires reference to the 2015 Bonds, 2021 Bonds, 2026 Bonds and any Additional Bonds in order to maintain the parity relationship of the 2015 Bonds, 2021 Bonds, 2026 Bonds and any Additional Bonds and the security therefor, shall be deemed to refer to “Bonds” as defined in the Original Fiscal Agent Agreement rather than “2015 Bonds.”
8.3 Packet Pg. 523
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SECTION 4. Partial Invalidity. If any section, paragraph, sentence, clause or phrase of this Supplemental Agreement No. 2 shall for any reason be held illegal, invalid or unenforceable, such holding shall not affect the validity of the remaining portions of this Supplemental Agreement No. 2. The Authority hereby declares that it would have entered into this Supplemental Agreement No. 2 and each and every other Section, paragraph, sentence, clause or phrase hereof and authorized the issue of the 2026 Bonds pursuant thereto irrespective of the fact that any one or more Sections, paragraphs, sentences. clauses, or phrases of this Supplemental Agreement No. 2 may be held illegal, invalid or unenforceable.
SECTION 5. Execution in Counterparts. This Supplemental Agreement No. 2 may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.
SECTION 6. Governing Law. This Supplemental Agreement No. 2 shall be construed and governed in accordance with the laws of the State of California applicable to contracts made and performed in such State.
SECTION 7. Execution By Electronic Means. The parties agree that the Electronic Signature of a party to this Supplemental Agreement No. 2, including all acknowledgements and attestations, shall be as valid as an original signature of such party and shall be effective to bind such party to this Supplemental Agreement No. 2. The parties agree that any Electronically Signed Document, including this Supplemental Agreement No. 2, shall be deemed (i) to be “written” or “in writing,” (ii) to have been signed, and (iii) to constitute a record established and maintained in the ordinary course of business and an original written record when printed from electronic files. For purposes hereof, “Electronic Signature” means a manually signed original signature that is transmitted by Electronic Means, including without limitation in the form of a pdf (portable document format) or other replicating image attached to an e-mail message; and “Electronically Signed Document” means a document transmitted by Electronic Means and containing, or to which there is affixed, an Electronic Signature.
SECTION 8. Concerning the Fiscal AgentIn entering into and acting under this Supplemental Agreement No. 2, and with respect to all matters arising hereunder, the Fiscal Agent shall have and be entitled to all of the rights, immunities, indemnities and protections afforded or granted to it under the Original Fiscal Agent Agreement.
8.3 Packet Pg. 524
[Signature Page to Supplemental Agreement No. 2 to
Fiscal Agent Agreement dated as of ________ 1, 2026]
IN WITNESS WHEREOF, the Authority and the Fiscal Agent have caused this Supplemental Agreement No. 2 to Fiscal Agent Agreement to be executed, all as of ________ 1, 2026.
WEST PATTERSON FINANCING
AUTHORITY, for and on behalf of
WEST PATTERSON FINANCING
AUTHORITY COMMUNITY FACILITIES
DISTRICT NO. 2005-1 (WEST
PATTERSON BUSINESS PARK)
By:
Executive Director
Attest:
Secretary
U.S. BANK TRUST COMPANY, NATIONAL
ASSOCIATION, as Fiscal Agent
By:
Authorized Officer
8.3 Packet Pg. 525
A-1
EXHIBIT A TO SUPPLEMENTAL AGREEMENT NO. 2
TO FISCAL AGENT AGREEMENT
EXHIBIT C
FORM OF 2026 BONDS
UNITED STATES OF AMERICA
STATE OF CALIFORNIA
No. __________ $____________
WEST PATTERSON FINANCING AUTHORITY
COMMUNITY FACILITIES DISTRICT NO. 2005-1 (WEST PATTERSON BUSINESS PARK) SPECIAL TAX BOND, SERIES 2026
INTEREST RATE: MATURITY DATE: BOND DATE: CUSIP:
% September 1, 20__ ______, 2026 ________
REGISTERED OWNER: Cede & Co.
PRINCIPAL AMOUNT: DOLLARS
The West Patterson Financing Authority (the “Authority”) for and on behalf of the West Patterson Financing Authority Community Facilities District No. 2005-1 (West Patterson Business Park) (the “District”), for value received, hereby promises to pay solely from the Special Tax Revenues (as hereinafter defined) or amounts in certain funds and accounts held under the Agreement (as hereinafter defined), to the Registered Owner named above, or registered assigns (the “Owner”), on the Maturity Date set forth above, unless redeemed prior thereto as hereinafter provided, the Principal Amount set forth above, and to pay interest on such principal amount from the Bond Date shown above, or from the most recent Interest Payment Date (as hereinafter defined) to which interest has been paid or duly provided for, semiannually on March 1 and September 1, commencing September 1, 2026 (the “Interest Payment Dates”), at the Interest Rate set forth above, until the principal amount hereof is paid or made available for payment. The principal of this Bond is payable to the Owner hereof in lawful money of the United States of America upon presentation and surrender of this Bond at the principal corporate trust office of U.S. Bank Trust Company, National Association, in Los Angeles, California, as fiscal agent (the “Fiscal Agent”). Interest on this Bond shall be paid by check of the Fiscal Agent mailed by first class mail on each Interest Payment Date to the Owner hereof as of the close of business on the 15th day of the month preceding the month in which the Interest Payment Date occurs whether or not such day is a Business Day (the “Record Date”) at such Owner’s address as it appears on the registration books maintained by the Fiscal Agent, or by wire transfer made on such Interest Payment Date upon written instructions
8.3 Packet Pg. 526
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delivered to the Fiscal Agent by the applicable Record Date of any Owner of $1,000,000 or more in aggregate principal amount of Bonds.
This Bond is one of a duly authorized issue of bonds approved by resolution of the Board of Directors of the Authority adopted on November 2, 2026 (the “Resolution”), pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, Sections 53311, et seq., of the California Government Code (the “Mello-Roos Act”) for the purpose of providing moneys for the construction and acquisition of authorized improvements for the District, and is one of the bonds designated “West Patterson Financing Authority Community Facilities District No. 2005-1 (West Patterson Business Park) Special Tax Bonds Series 2026” (the “Bonds”). The issuance of the Bonds and the terms and conditions thereof are provided for by a Fiscal Agent Agreement, dated as of September 1, 2015, as amended by Supplemental Agreement No. 1 to Fiscal Agent Agreement, dated as of December 1, 2021 by Supplemental Agreement No. 2 to Fiscal Agent Agreement, dated as of __________ 1, 2026, by and between the Authority and the Fiscal Agent (as so supplemented and amended, the “Agreement”), and this reference incorporates the Agreement herein, and by acceptance hereof the Owner of this Bond assents to said terms and conditions. The Agreement is authorized under, this Bond is issued under and both are to be construed in accordance with, the laws of the State of California.
Pursuant to the Mello-Roos Act, the Agreement and the Resolution, the principal of and interest on this Bond are payable solely from Special Tax Revenues and the amounts in certain funds held under the Agreement. “Special Tax Revenues" means the proceeds of the special taxes (“Special Taxes”) levied under the Mello-Roos Act in the District that are received by the Authority, including all scheduled payments and delinquent payments thereof, interest and penalties thereon and proceeds of the redemption or sale of property sold as a result of foreclosure of the lien of the special taxes, net of an administration charge of Stanislaus County, California (as such charge may be changed in the future).
Interest on this Bond shall be payable from the Interest Payment Date next preceding the date of authentication hereof, unless (i) it is authenticated on an Interest Payment Date, in which event it shall bear interest from such Interest Payment Date, or (ii) such date of authentication is after a Record Date but on or prior to an Interest Payment Date, in which event interest will be payable from such Interest Payment Date, or (iii) such date of authentication is prior to the first Record Date, in which event interest will be payable from the Bond Date shown above; provided however, that if at the time of authentication of this Bond, interest is in default hereon, this Bond shall bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment hereon.
Any tax for the payment hereof shall be limited to the Special Tax, except to the extent that provision for payment has been made by the Authority as may be permitted by law. The Bonds do not constitute obligations of the Authority for which the Authority is obligated to levy or pledge, or has levied or pledged, general or special taxation other than described herein above.
The Bonds are subject to optional redemption from any source of available funds (other than Prepayments of the Special Tax by property owners), in whole or in part among maturities as specified by the Authority and by lot within a maturity, on any date on and after September 1, ______ at the following respective redemption prices (expressed as percentages of the principal amount of the 2026 Bonds to be redeemed), plus accrued interest thereon to the date of redemption:
8.3 Packet Pg. 527
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Redemption Dates
Redemption
Price
September 1, _____ through August 31, _____ 103%
September 1, _____ through August 31, _____ 102
September 1, _____ through August 31, _____ 101
September 1, _____ and thereafter 100
The Bonds are subject to mandatory redemption from Prepayments of the Special Tax by property owners, in whole or in part among maturities of the Bonds and Additional Bonds as specified by the Authority, and by lot within a maturity, on any Interest Payment Date at the following respective redemption prices (expressed as percentages of the principal amount of the Bonds to be redeemed), plus accrued interest thereon to the date of redemption:
Redemption Dates
Redemption
Price
Interest Payment Dates to and including March 1, _____ 103% September 1, _____ and March 1, _____ 102
September 1, _____ and March 1, _____ 101
September 1, _____ and Interest Payment Dates
thereafter
100
The Bonds maturing September 1, _____ and September 1, _____, respectively, and on each September 1 thereafter to maturity, by lot, at a redemption price equal to 100% of the principal amount thereof to be redeemed, without premium, in the aggregate respective principal amounts as set forth in the following tables:
Term Bonds Maturing on September 1, _____
Mandatory
Redemption Date
(September 1)
Sinking Fund
Payment
(Maturity)
Term Bonds Maturing on September 1, _____
Mandatory
Redemption Date
(September 1)
Sinking Fund
Payment
(Maturity)
Notice of redemption with respect to the Bonds to be redeemed shall be given to the Owners thereof, in the manner, to the extent and subject to the provisions of the Agreement.
8.3 Packet Pg. 528
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This Bond shall be registered in the name of the Owner hereof, as to both principal and interest. Each registration and transfer of registration of this Bond shall be entered by the Fiscal Agent in books kept by it for this purpose and authenticated by its manual signature upon the certificate of authentication endorsed hereon.
No transfer or exchange hereof shall be valid for any purpose unless made by the registered owner, by execution of the form of assignment endorsed hereon, and authenticated as herein provided, and the principal hereof, interest hereon and any redemption premium shall be payable only to the registered owner or to such Owner’s order. The Fiscal Agent shall require the Owner requesting transfer or exchange to pay any tax or other governmental charge required to be paid with respect to such transfer or exchange. No transfer or exchange hereof shall be required to be made (i) within 15 days prior to the date established by the Fiscal Agent for selection of Bonds for redemption or (ii) with respect to a Bond after such Bond has been selected for redemption.
The Agreement and the rights and obligations of the Authority thereunder may be modified or amended as set forth therein. The principal of the Bonds is not subject to acceleration upon a default under the Agreement or any other document. This Bond shall not become valid or obligatory for any purpose until the certificate of authentication hereon endorsed shall have been dated and manually signed by the Fiscal Agent. It is hereby certified, recited and declared that all acts, conditions and things required by law to exist, happen and be performed precedent to and in the issuance of this Bond have existed, happened and been performed in due time, form and manner as required by law, and that the amount of this Bond, together with all other indebtedness of the Authority, does not exceed any debt limit prescribed by the laws or Constitution of the State of California.
Unless this Bond is presented by an authorized representative of The Depository Trust Company to the Fiscal Agent for registration of transfer, exchange or payment, and any Bond issued is registered in the name of Cede & Co. or such other name as requested by an authorized representative of The Depository Trust Company and any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein.
8.3 Packet Pg. 529
A-5
IN WITNESS WHEREOF, the West Patterson Financing Authority has caused this Bond to be executed by the facsimile signatures of the Executive Director and the Secretary of the Authority, all as of the Bond Date stated above.
WEST PATTERSON FINANCING
AUTHORITY
Executive Director
Secretary
*************************
FISCAL AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Bonds described in the Resolution and the Agreement.
Dated: ________, 2026
U.S. BANK TRUST COMPANY, NATIONAL
ASSOCIATION, as Fiscal Agent
By:
Authorized Signatory
8.3 Packet Pg. 530
A-6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned do(es) hereby sell, assign and transfer unto (Name, address and Tax Identification Number of Assignee) the within-mentioned registered Bond and hereby irrevocably constitute(s) and appoint(s) , attorney,
to transfer the same on the registration books of the Fiscal Agent with full power of substitution in the premises.
Dated:
Signature Guaranteed:
NOTE: Signature(s) must be guaranteed by a
member firm of the New York Stock Exchange or
a commercial bank or trust company.
NOTE: The signature(s) on this Assignment must
correspond with the name(s) as written on the face of
the within Bond in every particular without alteration or enlargement or any change whatsoever.
8.3 Packet Pg. 531
Jones Hall draft 4.16.26
PRELIMINARY OFFICIAL STATEMENT DATED ___________, 2026
NEW ISSUE-FULL BOOK ENTRY NOT RATED
In the opinion of Jones Hall LLP, San Mateo, California, Bond Counsel, subject, however, to certain qualifications described in this Official Statement, under existing law, the interest on the 2026 Bonds is excluded from gross income for federal income tax purposes and such interest is not an item of tax preference for purposes of the federal alternative minimum tax. Interest on the 2026 Bonds may be subject to the corporate alternative minimum tax. In the further opinion of Bond Counsel, interest on the 2026 Bonds is exempt from State of California personal income tax. See “TAX MATTERS.”
$10,310,000*
WEST PATTERSON FINANCING AUTHORITY
COMMUNITY FACILITIES DISTRICT NO. 2005-1 (WEST PATTERSON BUSINESS PARK)
SPECIAL TAX BONDS
SERIES 2026
Dated: Date of Delivery Due: September 1, as shown on inside cover The bonds captioned above (the “2026 Bonds”) are being issued by the West Patterson Financing Authority (the “Authority”) by and through its Community Facilities District No. 2005-1 (West Patterson Business Park) (the “District”). The 2026 Bonds are special tax obligations of the Authority, authorized pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, being California Government Code Section 53311, et seq. (the “Act”), and are issued pursuant to a Fiscal Agent Agreement dated as of September 1, 2015 as supplemented and amended, including by a Supplemental Agreement No. 2 to Fiscal Agent Agreement dated as of ________, 2026 (collectively, the “Fiscal Agent Agreement”) by and between the Authority and U.S. Bank Trust Company, National Association as fiscal agent (the “Fiscal Agent”). The 2026 Bonds are being issued to (i) construct and acquire certain public facilities authorized for the District, (ii) provide for the establishment of a reserve account, and (iii) pay the costs of issuance of the 2026 Bonds. Interest on the 2026 Bonds is payable semiannually on March 1 and September 1 of each year, commencing September 1, 2026.
The 2026 Bonds are being issued as fully registered bonds, registered in the name of Cede & Co. as nominee of The Depository Trust Company, New York, New York (“DTC”), and will be available to ultimate purchasers in the denomination of $5,000 or any integral multiple thereof, under the book-entry system maintained by DTC. See “APPENDIX F – DTC AND THE BOOK-ENTRY SYSTEM.” The 2026 Bonds are secured by and payable from a pledge of Special Tax Revenues (as defined herein), on parity with bonds issued in 2015 and 2021 (the 2026 Bonds and bonds issued in 2015 and 2021 are collectively referred to herein as the “Bonds”), derived from Special Taxes (as defined herein) to be levied by the Authority on real property within the boundaries of the District, from the proceeds of any foreclosure actions brought following a delinquency in the payment of the Special Taxes, and from amounts held in certain funds under the Fiscal Agent Agreement, all as more fully described herein. Unpaid Special Taxes do not constitute a personal indebtedness of the owners of the parcels within the District. In the event of delinquency, proceedings may be conducted only against the parcel of real property securing the delinquent Special Tax. There is no assurance the owners will be able to pay the Special Tax or that they will pay a Special Tax even though financially able to do so. To provide funds for payment of the 2026 Bonds and the interest thereon as a result of any delinquent Special Taxes, the Authority will establish a Reserve Fund account from proceeds of the 2026 Bonds, as described herein. Additional bonds are expected to be issued as development in the District progresses. See “SECURITY FOR THE BONDS.” Property in the District subject to the Special Tax described herein securing the Bonds comprises approximately _____ acres in the City of Patterson, in Stanislaus County, California, and is currently partially developed primarily as industrial warehouse property, and to a lesser extent other commercial and nonresidential uses. An additional ___ acres is subject to the Special Tax but owned by public entities. The District also contains approximately _____ acres of undeveloped property, and an adjacent future annexation area currently containing approximately ______ acres, which property is not currently subject to the levy of the Special Tax. See “THE DISTRICT” and “VALUE OF PROPERTY WITHIN THE DISTRICT.”
The 2026 Bonds are subject to optional and mandatory redemption prior to maturity as described herein. See “THE BONDS – Redemption.”
NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE AUTHORITY, THE CITY OF PATTERSON, THE COUNTY
OF STANISLAUS, THE STATE OF CALIFORNIA OR ANY POLITICAL SUBDIVISION THEREOF IS PLEDGED TO THE PAYMENT OF THE BONDS. THE BONDS DO NOT CONSTITUTE A DEBT OF THE AUTHORITY WITHIN THE MEANING OF ANY STATUTORY OR CONSTITUTIONAL DEBT LIMITATION. THE INFORMATION SET FORTH IN THIS OFFICIAL STATEMENT, INCLUDING INFORMATION UNDER THE HEADING “SPECIAL RISK FACTORS,” SHOULD BE READ IN ITS ENTIRETY.
This cover page contains certain information for general reference only. It is not a summary of all of the provisions of the 2026 Bonds.
Prospective investors must read the entire Official Statement to obtain information essential to the making of an informed investment decision. See “SPECIAL RISK FACTORS” herein for a discussion of the special risk factors that should be considered, in addition to the other matters and risk factors set forth herein, in evaluating the investment quality of the 2026 Bonds.
The 2026 Bonds are offered when, as and if issued, subject to approval as to their legality by Jones Hall LLP, San Mateo, California, Bond Counsel. Certain legal matters will also be passed on for the Authority by Jones Hall LLP, as Disclosure Counsel and by White Brenner LLP as counsel to the Authority. Certain legal matters will also be passed on for the Underwriter by _______, _____, California, as counsel to the Underwriter. It is anticipated that the 2026 Bonds will be available for delivery through the facilities of DTC on or about __________, 2026*.
[Hilltop Securities logo]
The date of this Official Statement is _______, 2026
________________
* Preliminary, subject to change.
This Preliminary Official Statement and the information contained herein are subject to completion or amendment. These securities may not be sold nor may offers to buy be accepted prior to the time the Official Statement is delivered in final form. Under no circumstances will this Preliminary Official Statement constitute an offer to sell or a solicitation of an offer to buy nor will there be any sale of these securities in any jurisdiction in which such offer solicitation or sale would be unlawful.
8.3 Packet Pg. 532
MATURITY SCHEDULE
SERIAL BONDS
Maturity Date
(September 1)
Principal
Amount
Interest
Rate
Price or
Yield
CUSIP†
(____)
$ % %
$___________ _______% Term Bond Due September 1, ____ Price: _______% CUSIP†: _______
$___________ _______% Term Bond Due September 1, ____ Price: _______% CUSIP†: _______
______________
† CUSIP Global Services (CGS) is managed on behalf of American Bankers Association by FactSet Research Systems Inc. Copyright 2026 CUSIP Global Services. This data is not intended to create a database and does not serve in any way as a substitute for the CGS database. CUSIP numbers are provided for convenience of reference only. None of the City, the Authority the Trustee or the Underwriters take any responsibility for the accuracy of the CUSIP data.
8.3 Packet Pg. 533
WEST PATTERSON FINANCING AUTHORITY
CITY OF PATTERSON
(STANISLAUS COUNTY, CALIFORNIA)
Board of Directors
Michael Clauzel, Chair / Mayor (At Large)
Gabriela Hernandez, Board member / Council member (District A) Jessica Romero, Board member / Council member (District B) Kendra Mora, Board member / Council member (District C) Carlos Roque, Board member / Council member (District D) Authority Staff
Fernando Ulloa, Executive Director / City Manager
Mike Willett, Assistant City Manager
Kevin Williams, Treasurer / Finance Director
Aracely Alegre, Secretary / City Clerk
____________________________
SPECIAL SERVICES
Bond Counsel
Jones Hall LLP
San Mateo, California
Fiscal Agent
U.S. Bank Trust Company, National Association
Los Angeles, California
Municipal Advisor
Del Rio Advisors, LLC
Modesto, California
Appraiser
Integra Realty Resources
Sacramento, California
Special Tax Consultant
Goodwin Consulting Group, Inc.
Sacramento, California
Disclosure Counsel
Jones Hall LLP
San Mateo, California
8.3 Packet Pg. 534
GENERAL INFORMATION ABOUT THIS OFFICIAL STATEMENT
No Offering May Be Made Except by this Official Statement. No dealer, broker, salesperson or other person has been authorized by the Authority, the Participating Member or the Underwriter to give any information or to make any representations with respect to the Bonds other than as contained in this Official Statement, and if given or made, such other information or representation must not be relied upon as having been authorized by the Authority, or the Underwriter. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy in any state in which such offer or solicitation is not authorized or in which the person making such offer or solicitation is not qualified to do so or to any person to whom it is unlawful to make such offer or solicitation.
Effective Date. This Official Statement, deemed final by the Authority, speaks only as of its date, and the information and expressions of opinion contained in this Official Statement are subject to change without notice. Neither the delivery of this Official Statement nor any sale of the Bonds will, under any circumstances, create any implication that there has been no change in the affairs of the Authority or the Improvement Areas or any other municipalities or parties described in this Official Statement, or in the condition of property within the Improvement Areas since the date of this Official Statement. The Preliminary Official Statement has been deemed final by the Authority.
Use of this Official Statement. This Official Statement is submitted in connection with the sale of the Bonds referred to herein and may not be reproduced or used, in whole or in part, for any other purpose. This Official Statement is not a contract with the purchasers of the Bonds.
Preparation of this Official Statement. The information contained in this Official Statement has been obtained from sources that are believed to be reliable, but this information is not guaranteed as to accuracy or completeness.
The Underwriter has provided the following sentence for inclusion in this Official Statement: The Underwriter has reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information.
Document References and Summaries. All references to and summaries of the Indenture or other documents contained in this Official Statement are subject to the provisions of those documents and do not purport to be complete statements of those documents.
Stabilization of and Changes to Offering Prices. The Underwriter may overallot or take other steps that stabilize or maintain the market price of the Bonds at a level above that which might otherwise prevail in the open market. If commenced, the Underwriter may discontinue such market stabilization at any time. The Underwriter may offer and sell the Bonds to certain dealers, dealer banks and banks acting as agent at prices lower than the public offering prices stated on the cover page of this Official Statement, and those public offering prices may be changed from time to time by the Underwriter.
Bonds are Exempt from Securities Laws Registration. The issuance and sale of the Bonds have not been registered under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, in reliance upon exemptions for the issuance and sale of municipal securities provided under Section 3(a)(2) of the Securities Act of 1933 and Section 3(a)(12) of the Securities Exchange Act of 1934.
Estimates and Forecasts. When used in this Official Statement and in any continuing disclosure by the City, in any press release and in any oral statement made with the approval of an authorized officer of the City, the words or phrases “will likely result,” “are expected to”, “will continue”, “is anticipated”, “estimate”, “project,” “forecast”, “expect”, “intend” and similar expressions identify “forward looking statements.” Such statements are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated in such forward-looking statements. Any forecast is subject to such uncertainties. Inevitably, some assumptions used to develop the forecasts will not be realized and unanticipated events and circumstances may occur. Therefore, there are likely to be differences between forecasts and actual results, and those differences may be material. The information and expressions of opinion herein are subject to change without notice, and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, give rise to any implication that there has been no change in the affairs of the City since the date hereof.
8.3 Packet Pg. 535
TABLE OF CONTENTS
Page
INTRODUCTION............................................... 1 THE BONDS ..................................................... 5 Authority for Issuance.................................... 5 Description of the Bonds ............................... 6 Redemption ................................................... 7 Transfer or Exchange of Bonds..................... 9
ESTIMATED SOURCES AND USES OF
FUNDS ........................................................ 10 SECURITY FOR THE BONDS........................ 11
Limited Obligation........................................ 11 Pledge of Special Tax Revenues and Other
Amounts .................................................. 11 Special Taxes.............................................. 12 Special Tax Methodology ............................ 13 Levy of Annual Special Tax; Maximum
Special Tax.............................................. 16 Special Tax Fund......................................... 17 Delinquent Payments of Special Tax;
Covenant for Superior Court Foreclosure 18
Deposit and Use of Proceeds of Bonds....... 20
Reserve Fund.............................................. 20 Bond Fund................................................... 21 Improvement Fund ...................................... 22 Future Parity Bonds..................................... 23 Discharge of Fiscal Agent Agreement......... 25
Amendment of Fiscal Agent Agreement...... 25
DEBT SERVICE SCHEDULE ......................... 27
THE AUTHORITY ........................................... 28 THE DISTRICT................................................ 29 Location and Description of the District....... 29
Development in the District.......................... 31 Environmental Matters................................. 32
OWNERSHIP OF PROPERTY IN THE
DISTRICT.................................................... 34 Ownership of Developed and Undeveloped
Property in the District............................. 34 Ownership of Property in Future
Annexation Area...................................... 38
VALUE OF PROPERTY WITHIN THE
DISTRICT.................................................... 39 Assessed Valuations ................................... 39 Appraisal ......................................................40 Projected Special Tax Levy by Owner.........43
Special Tax Collection and Delinquency
Rate .........................................................44 Value to Special Tax Burden Ratios ............45
Estimated Maximum Special Tax Proceeds
and Debt Service Coverage.....................48
Overlapping Liens and Priority of Lien .........49
THE IMPROVEMENTS....................................51
Eligible Facilities ..........................................51 Estimated Cost of the Improvements...........52
SPECIAL RISK FACTORS ..............................53
Limited Obligation of the Authority to Pay
Debt Service ............................................53 Property Values and Property Development53
Levy and Collection of Special Taxes ..........56
Concentration of Ownership ........................57
Risks Associated with Commercial Real
Estate.......................................................58 Appraised Values.........................................58 Bankruptcy and Foreclosure Delays ............59
Parity Taxes and Special Assessments;
Private Debt .............................................59 Tax Delinquencies .......................................60 No Acceleration Provisions ..........................61 Ballot Initiatives ............................................61 Voter Initiatives ............................................61 Recent Case Law Related to the MelloRoos Act ..................................................62 Cyber Security .............................................63
CONSTITUTIONAL LIMITATIONS ON
TAXATION AND APPROPRIATIONS .........64
CONTINUING DISCLOSURE..........................65
UNDERWRITING.............................................65 MUNICIPAL ADVISOR ....................................65 LEGAL OPINION .............................................66 TAX MATTERS................................................66 NO RATINGS...................................................67 NO LITIGATION...............................................67 EXECUTION....................................................68 APPENDIX A – The City of Patterson and Stanislaus County Demographic Information APPENDIX B – Rate and Method of Apportionment of Special Tax APPENDIX C – The Appraisal
APPENDIX D – Form of Continuing Disclosure Undertaking
APPENDIX E – Form of Opinion of Bond Counsel
APPENDIX F – DTC and the Book-Entry System
8.3 Packet Pg. 536
OFFICIAL STATEMENT
$10,310,000*
WEST PATTERSON FINANCING AUTHORITY
COMMUNITY FACILITIES DISTRICT NO. 2005-1
(WEST PATTERSON BUSINESS PARK)
SPECIAL TAX BONDS
SERIES 2026
This Official Statement, including the cover page and all appendices hereto, is provided to furnish certain information in connection with the issuance by the West Patterson Financing Authority (the “Authority”) by and through its Community Facilities District No. 2005-1 (West Patterson Business Park) (the “District”) of the bonds captioned above (the “2026 Bonds”).
Any statements made in this Official Statement involving matters of opinion or of estimates, whether or not so expressly stated, are set forth as such and not as representations of fact, and no representation is made that any of the estimates will be realized. Definitions of certain terms used herein and not defined herein have the meaning set forth in the Fiscal Agent Agreement.
INTRODUCTION
This introduction is not a summary of this Official Statement. It is only a brief description of and guide to, and is qualified by, more complete and detailed information contained in the entire Official Statement, including the cover page and attached appendices, and the documents summarized or described in this Official Statement. A full review should be made of the entire Official Statement. The offering of the 2026 Bonds to potential investors is made only by means of the entire Official Statement.
Authority for Issuance. The 2026 Bonds are issued pursuant to the provisions of the Mello-Roos Community Facilities Act of 1982, as amended (Sections 53311, et seq., of the Government Code of the State of California) (the “Act”) and pursuant to a Fiscal Agent Agreement dated as of September 1, 2015 as supplemented and amended by a Supplemental Agreement No. 1 to Fiscal Agent Agreement dated as of December 1, 2021 and by a Supplemental Agreement No. 2 to Fiscal Agent Agreement dated as of _______, 2026 (collectively, the “Fiscal Agent Agreement”) between the Authority and U.S. Bank Trust Company, National Association, California, as successor fiscal agent (the “Fiscal Agent”) and a resolution adopted by the Board of Directors of the Authority (the “Board”) on November 2, 2021 (the “Resolution of Issuance”), which authorized the issuance of the 2026 Bonds payable from Special Taxes (as defined herein) levied on property within the District according to a methodology approved by the Authority.
___________
* Preliminary, subject to change.
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The Authority. The Authority is a joint exercise of powers authority organized and existing under and pursuant to the provisions of the California Government Code. The Authority was formed on June 5, 2001 and is a separate legal entity from the City and the District, constituting a public instrumentality of the State located in the County. The Authority is governed by a five-member Board. The members of the City Council of the City constitute the members of the Board. See “THE AUTHORITY.”
The District. The District is located in the City of Patterson (the “City”), in Stanislaus County (the “County”), California (the “State”) and currently includes completed industrial warehouse property and land being developed primarily as industrial warehouse property, and to a lesser extent other commercial and nonresidential uses. Development within the District is ongoing. Bonds were issued for the District in 2015 and 2021 and additional bonds are expected to be issued in the future.
Property in the District subject to the Special Tax described herein securing the Bonds comprises approximately _____ acres in the City. An additional ____ acres is subject to the Special Tax but owned by public entities. The District also contains approximately ____ acres of undeveloped property, and an adjacent future annexation area currently containing approximately ____ acres, which property is not currently subject to the levy of the Special Tax.
The District was formed with an adjacent future annexation area, certain parcels of which have been annexed into the District and all or part of the remaining parcels of which may be annexed into the District in the future. See “THE DISTRICT.”
The City lies in the Central Valley of the State, approximately 90 miles southeast of San Francisco and 90 miles south of Sacramento. The City is located on State Route 33, adjacent to U.S. Interstate 5 and approximately 18 miles southwest of Modesto. For additional demographic information on the City and County, see “APPENDIX A – The City of Patterson and Stanislaus County Demographic Information.”
Bond Terms. The 2026 Bonds will be dated as of and bear interest from the date of delivery thereof at the rate or rates set forth on the cover page of this Official Statement.
Interest on the 2026 Bonds is payable on March 1 and September 1 of each year (each an “Interest Payment Date”), commencing September 1, 2026. The 2026 Bonds will be issued without coupons in denominations of $5,000 or any integral multiple thereof.
Registration of Ownership of Bonds. The 2026 Bonds will be issued as fully registered bonds in book-entry form, registered in the name of Cede & Co., as nominee of The Depository Trust Company (“DTC”). Ultimate purchasers of 2026 Bonds will not receive physical certificates representing their interest in the 2026 Bonds. So long as the 2026 Bonds are registered in the name of Cede & Co., as nominee of DTC, references herein to the Owners will mean Cede & Co., and will not mean the ultimate purchasers of the 2026 Bonds. Payments of the principal, premium, if any, and interest on the 2026 Bonds will be made directly to DTC, or its nominee, Cede & Co. so long as DTC or Cede & Co. is the registered owner of the 2026 Bonds. Disbursements of such payments to DTC’s Participants is the responsibility of DTC and disbursements of such payments to the Beneficial Owners is the responsibility of DTC’s Participants and Indirect Participants, as more fully described herein.
Use of Proceeds. Proceeds of the 2026 Bonds will primarily be used to finance a portion of the costs of acquiring and constructing certain public infrastructure improvements (the “Improvements”), as further described herein, some of which have already been completed.
The Improvements consist generally of water, wastewater, roadway and other infrastructure
8.3 Packet Pg. 538
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improvements (including environmental impact report mitigation measure improvements) necessary for development of property within the District. Construction of Improvements, mostly by the City, began in July 2004. See “THE IMPROVEMENTS.” Proceeds of the 2026 Bonds will also be used to establish a reserve account (described below) available for payment on the 2026 Bonds, and to pay cost of the issuance of the 2026 Bonds.
Source of Payment of the Bonds. The 2026 Bonds are payable from and secured by Special Tax Revenues (the “Special Tax Revenues”), on parity with the Authority’s Special Tax Bonds, Series 2015 (the “2015 Bonds”) and the Authority’s Special Tax Bonds, Series 2021 (the “2021 Bonds”, and collectively with the 2026 Bonds, the “Bonds”), derived from proceeds of special taxes (the “Special Taxes”) received by the Authority, including all scheduled payments and delinquent payments thereof, interest and penalties thereon and proceeds of the redemption or sale of property sold as a result of foreclosure of the lien of the Special Taxes, net of administration charges of the County. The Special Taxes are to be levied by the Authority on taxable real property within the boundaries of the District. The Bonds are also payable from amounts held in certain funds and accounts pursuant to the Fiscal Agent Agreement, including a reserve fund, all as more fully described herein. The Special Tax applicable to each taxable parcel in the District will be levied and collected according to the tax liability determined by the Board through the application of a rate and method of apportionment of Special Tax for the District (the “Rate and Method”), which has been approved by the Board acting as the legislative body of the District. The Special Taxes represent liens on the parcels of land subject to a Special Tax and failure to pay the Special Taxes could result in proceedings to foreclose the delinquent property. The Special Taxes do not constitute the personal indebtedness of the owners of taxed parcels. See “SECURITY FOR THE BONDS – Special Tax Methodology” and “APPENDIX B – Rate and Method of Apportionment of Special Tax.” Reserve Fund. In the Fiscal Agent Agreement, the Authority directs the Fiscal Agent to establish an account (the “2026 Reserve Account”) in the Reserve Fund established in connection with the 2015 Bonds, and the 2021 Bonds (the “Reserve Fund”) from 2026 Bond proceeds in the amount of the Reserve Requirement for the 2026 Bonds, which amount is available to be transferred to the Bond Fund in the event of delinquencies in the payment of the Special Taxes, to the extent of such delinquencies. The 2026 Reserve Account is required to be maintained at the Reserve Requirement for the 2026 Bonds from moneys available under the Fiscal Agent Agreement. See “SECURITY FOR THE BONDS – Reserve Fund.” If there are additional delinquencies after depletion of funds in the Reserve Fund, the Authority is not obligated to pay the 2026 Bonds or supplement the 2026 Reserve Account of the Reserve Fund.
Additional Parity Bonds. The maximum authorized indebtedness for the District is $45,000,000. In 2015, the Authority issued the 2015 Bonds in the original principal amount of $9,630,000 and outstanding in the principal amount of $_________; in 2021, the Authority issued the 2021 Bonds in the original principal amount of $6,800,000 and outstanding in the principal amount of $_________, and the 2026 Bonds are the third series of bonds being issued by the District and additional bonds are expected to be issued in the future for additional public infrastructure. So long as the Bonds are outstanding, any future bonds issued for the District and secured on parity with the Bonds (herein, “Additional Bonds”) are required to meet certain conditions of issuance as set forth in the Fiscal Agent Agreement and no bonds having a lien senior to the lien of the Bonds are allowed. See “SECURITY FOR THE BONDS – Future Parity Bonds.”
8.3 Packet Pg. 539
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Redemption of Bonds Before Maturity. The 2026 Bonds are subject to optional redemption, mandatory sinking fund redemption and special mandatory redemption from prepaid Special Taxes. See “THE BONDS – Redemption.”
Property Subject to the Special Tax and in Future Annexation Area. The master development plan adopted by the City and County in 2003 relating to property in the District and in the future annexation area covered approximately 814 acres proposed for light industrial, commercial and business park development. The land in the District is zoned IL-West Patterson Light Industrial District and West Patterson Industrial Business Park (“WPIBP”).
According to the City of Patterson Municipal Code, the West Patterson Light Industrial Zone is consistent with the Light Industrial land use designation of the City’s general plan. The IL zoning district is applied to areas appropriate for light industrial and manufacturing, warehousing, offices, and assembly uses. The WPIBP district is applied to areas appropriate for light industrial and business park land uses, including low-intensity manufacturing and assembly processes, research and development, corporate headquarters, offices, medical and health facility uses, and other similar uses. The land uses allowed and development standards required within the WPIBP district are intended to protect adjacent areas from impacts while allowing indoor, clean, and quiet industry. Land uses in the WPIBP zoning district are often organized as a business park, with tenants that may include some commercial and office activities. See “THE DISTRICT.”
Value of Property in the District; Appraisal. Payment of Special Taxes on real property in the District is security for the Special Tax. The assessed value of property in the District, excluding taxable parcels owned by public entities) subject to the payment of the Special Tax in Fiscal Year 2025-26, as set forth on the County’s 2025-26 tax roll, was $447,030,375. The developing parcels in the District, collectively referred to as the “Appraised Parcels,” the Authority authorized the preparation of an appraisal report for such parcels, which sets forth an appraised value, as of March 15, 2026 (the date of value of the appraisal), for the Appraised Parcels (which included one parcel owned by a school district) is $31,390,000. The appraised values account for the impact of the lien of the Special Tax. See “VALUE OF PROPERTY WITHIN THE DISTRICT – Appraisal.” Accordingly, the total valuation of taxable parcels in the District excluding taxable parcels owned by public entities is $469,044,981.
In considering the estimates of value, it should be noted that the Appraisal is based upon a number of assumptions and limiting conditions which affect the estimates as to value. The combined value of property subject to the Special Tax, using the appraised value of the Appraised Parcels and the assessed value of all other taxable property, equals $469,044,981, which is approximately 18.3* times the $29,310,000* aggregate principal amount of the 2026 Bonds and outstanding 2015 Bonds and 2021 Bonds. These figures do not include Taxable Public Property (as defined herein). See “VALUE OF PROPERTY WITHIN THE DISTRICT.” Risks of Investment. See the section of this Official Statement entitled “SPECIAL RISK FACTORS” for a discussion of special factors that should be considered, in addition to the other matters set forth herein, in considering the investment quality of the Bonds.
Limited Obligation of the Authority. The Authority is not liable (except as specifically set forth in the Fiscal Agent Agreement) and the full faith and credit of the Authority is not pledged for the payment of the interest on, or principal of or redemption premiums, if any, on the Bonds. The Bonds are not secured by a legal or equitable ____________
* Preliminary; subject to change.
8.3 Packet Pg. 540
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pledge of or charge, lien or encumbrance upon any property of the Authority or any of its income or receipts, except the money in certain funds established under the Fiscal Agent Agreement, and neither the payment of the interest on nor principal of or redemption premiums, if any, on the Bonds is a general debt, liability or obligation of the Authority.
The Bonds do not constitute an indebtedness of the Authority within the meaning of any constitutional or statutory debt limitation or restrictions and neither the Board, the Authority nor any officer or employee thereof are liable for the payment of the interest on or principal of or redemption premiums, if any, on the Bonds other than from the proceeds of the Special Taxes and the money in certain funds established under the Fiscal Agent Agreement, as provided in the Fiscal Agent Agreement.
Summary of Information. Brief descriptions of certain provisions of the Fiscal Agent Agreement, the Bonds and certain other documents are included herein. The descriptions and summaries of documents herein do not purport to be comprehensive or definitive, and reference is made to each such document for the complete details of all its respective terms and conditions, copies of which are available for inspection at the office of the Authority. All statements herein with respect to certain rights and remedies are qualified by reference to laws and principles of equity relating to or affecting creditors’ rights generally. Capitalized terms used in this Official Statement and not otherwise defined herein have the meanings ascribed to such terms in the Fiscal Agent Agreement. The information and expressions of opinion herein speak only as of the date of this Official Statement and are subject to change without notice. Neither delivery of this Official Statement, any sale made hereunder, nor any future use of this Official Statement shall, under any circumstances, create any implication that there has been no change in the affairs of the Authority or the District since the date hereof.
Any statements made in this Official Statement involving matters of opinion or of estimates, whether or not so expressly stated, are set forth as such and not as representations of fact, and no representation is made that any of the estimates will be realized.
THE BONDS
Authority for Issuance
The Bonds are issued by the Authority pursuant to the Fiscal Agent Agreement, the Resolution of Issuance, and the Act.
On October 18, 2005, the Board adopted Resolution No. 2005-04 (the “Resolution of Formation”), which formed the District and followed a Resolution of Intention adopted by the Board on August 16, 2005. The District was established and authorized to incur bonded indebtedness in an aggregate principal amount not to exceed $45,000,000 at a special election in the District held on the same day. Under the provisions of the Act, since there were fewer than 12 registered voters residing within the District at a point during the 90-day period preceding the adoption of the Resolution of Formation, the qualified electors entitled to vote in the special election consisted solely of Keystone Pacific Business Park LLC (the “Developer”), an affiliate of Keystone Corporation, Raleigh, North Carolina, the master developer of the land in the District, the only eligible landowner/voter in the District, who cast one vote for each gross acre or portion of an acre of land owned within the District. The landowner voted to incur the indebtedness and to approve the annual levy of Special Taxes to be collected within the District, for the purpose of paying for the Improvements, including repaying any indebtedness of the District and paying the administrative expenses of the District.
8.3 Packet Pg. 541
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Description of the Bonds
Bond Terms. The Bonds will be dated as of and bear interest from the date of delivery thereof at the rates and mature in the amounts and years, as set forth on the cover page hereof.
The Bonds are being issued in the denomination of $5,000 or any integral multiple thereof.
Interest on the Bonds will be payable semiannually on March 1 and September 1 of each year (each an “Interest Payment Date”), commencing September 1, 2026. The principal of the Bonds and premiums due upon the redemption thereof, if any, will be payable in lawful money of the United States of America at the principal corporate trust office of the Fiscal Agent in Los Angeles, California, or such other place as designated by the Fiscal Agent, upon presentation and surrender of the Bonds; provided that so long as any Bonds are in book-entry form, payments with respect to such Bonds will be made by wire transfer, or such other method acceptable to the Fiscal Agent, to DTC.
Book-Entry Only System. The Bonds are being issued as fully registered bonds, registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York (“DTC”), and will be available to ultimate purchasers under the book-entry system maintained by DTC. Ultimate purchasers of Bonds will not receive physical certificates representing their interest in the Bonds. So long as the Bonds are registered in the name of Cede & Co., as nominee of DTC, references herein to the Owners will mean Cede & Co., and will not mean the ultimate purchasers of the Bonds. The Fiscal Agent will make payments of the principal, premium, if any, and interest on the Bonds directly to DTC, or its nominee, Cede & Co., so long as DTC or Cede & Co. is the registered owner of the Bonds. Disbursements of such payments to DTC’s Participants is the responsibility of DTC and disbursements of such payments to the Beneficial Owners is the responsibility of DTC’s Participants and Indirect Participants, as more fully described herein. See “APPENDIX F – DTC and the Book-Entry System” below.
Calculation and Payment of Interest. Interest on the Bonds will be computed on the basis of a 360-day year consisting of twelve 30-day months. Interest on the Bonds (including the final interest payment upon maturity or earlier redemption) is payable by check of the Fiscal Agent mailed on each Interest Payment Date by first class mail to the registered Owner thereof at such registered Owner’s address as it appears on the registration books maintained by the Fiscal Agent at the close of business on the 15th day of the month immediately preceding an Interest Payment Date, whether or not such day is a Business Day (the “Record Date”), or by wire transfer made on such Interest Payment Date upon written instructions received by the Fiscal Agent on or before the Record Date preceding the Interest Payment Date, of any Owner of $1,000,000 or more in aggregate principal amount of Bonds; provided that so long as any Bonds are in book-entry form, payments with respect to such Bonds will be made by wire transfer, or such other method acceptable to the Fiscal Agent, to DTC. See “APPENDIX F – DTC and the Book-Entry System” below.
Each Bond will bear interest from the Interest Payment Date next preceding the date of authentication thereof unless (i) it is authenticated on an Interest Payment Date, in which event it will bear interest from such date of authentication, or (ii) it is authenticated prior to an Interest Payment Date and after the close of business on the Record Date preceding such Interest Payment Date, in which event it will bear interest from such Interest Payment Date, or (iii) it is authenticated prior to the Record Date preceding the first Interest Payment Date, in which event it will bear interest from the Dated Date; provided, however, that if at the time of authentication
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of a Bond, interest is in default thereon, such Bond will bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment thereon. So long as the Bonds are registered in the name of Cede & Co., as nominee of DTC, payments of the principal, premium, if any, and interest on the Bonds will be made directly to DTC, or its nominee, Cede & Co. Disbursements of such payments to DTC’s Participants is the responsibility of DTC and disbursements of such payments to the Beneficial Owners is the responsibility of DTC’s Participants and Indirect Participants, as more fully described herein.
See “APPENDIX F – DTC and the Book-Entry System” below.
Redemption*
Optional Redemption. The 2026 Bonds are subject to optional redemption from any source of available funds prior to maturity, in whole, or in part among maturities as specified by the Authority and by lot within a maturity, on any date on or after September 1, ______, at the following respective redemption prices (expressed as percentages of the principal amount of the 2026 Bonds to be redeemed), plus accrued interest thereon to the date of redemption:
Redemption Dates
Redemption
Price
September 1, _____ through August 31, _____ 103%
September 1, _____ through August 31, _____ 102
September 1, _____ through August 31, _____ 101
September 1, _____ and thereafter 100
Mandatory Redemption From Prepayments. The 2026 Bonds are subject to mandatory redemption from prepayments of the Special Tax by property owners, in whole or in part among maturities as specified by the Authority and by lot within a maturity, on any Interest Payment Date at the following respective redemption prices (expressed as percentages of the principal amount of the 2026 Bonds to be redeemed), plus accrued interest thereon to the date of redemption:
Redemption Dates
Redemption
Price
September 1, _______ through March 1, _____ 103%
September 1, _____ and March 1, _____ 102
September 1, _____ and March 1, _____ 101
September 1, _____ and Interest Payment Dates thereafter 100 Mandatory Sinking Fund Redemption. The 2026 Bonds maturing September 1, ______ and ______ (the “Term Bonds”) are subject to mandatory sinking payment redemption in part on September 1, ______ and September 1, _______, respectively, and on each _____1 thereafter to maturity, by lot, at a redemption price equal to 100% of the principal amount thereof to be redeemed, without premium, in the aggregate respective principal amounts as set forth in the following tables:
Term Bonds of _________
____________
* Preliminary; subject to change.
8.3 Packet Pg. 543
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Mandatory
Redemption Date
(September 1)
Sinking Fund
Payment
$
Term Bonds of _________
Mandatory
Redemption Date
(September 1)
Sinking Fund
Payment
$
The amounts in the foregoing tables will be reduced pro rata, in order to maintain a substantially similar debt service profile, as a result of any prior partial optional redemption or mandatory redemption of the 2026 Bonds.
Purchase In Lieu of Redemption. In lieu of redemption, moneys in the Bond Fund may be used and withdrawn by the Fiscal Agent for purchase of Outstanding Bonds, upon the filing with the Fiscal Agent of an Officer’s Certificate requesting such purchase, at public or private sale as and when, and at such prices (including brokerage and other charges) as such Officer’s Certificate may provide, but in no event may Bonds be purchased at a price in excess of the principal amount thereof, plus interest accrued to the date of purchase.
Redemption Procedure by Fiscal Agent. The Fiscal Agent will cause notice of any redemption to be mailed by first class mail, postage prepaid, at least 30 days but not more than 60 days prior to the date fixed for redemption, to the Securities Depositories and to one or more Information Services, and to the respective registered Owners of any Bonds designated for redemption, at their addresses appearing on the Bond registration books in the Principal Office of the Fiscal Agent; but such mailing is not a condition precedent to such redemption and failure to mail or to receive any such notice, or any defect therein, will not affect the validity of the proceedings for the redemption of such Bonds.
Such notice will state the redemption date and the redemption price and, if less than all of the then Outstanding Bonds are to be called for redemption, will designate the CUSIP numbers and Bond numbers of the Bonds to be redeemed by giving the individual CUSIP number and Bond number of each Bond to be redeemed or will state that all Bonds between two stated Bond numbers, both inclusive, are to be redeemed or that all of the Bonds of one or more maturities have been called for redemption, will state as to any Bond called in part the principal amount thereof to be redeemed, and will require that such Bonds be then surrendered at the Principal Office of the Fiscal Agent for redemption at the said redemption price, and will state that further interest on such Bonds will not accrue from and after the redemption date.
Whenever provision is made in the Fiscal Agent Agreement for the optional redemption of less than all of the Bonds of any maturity, the Fiscal Agent as directed by the Authority will select the Bonds to be redeemed, from all Bonds or such given portion thereof of such maturity
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by lot in any manner which the Authority in its sole discretion deems appropriate. Upon surrender of Bonds redeemed in part only, the Authority will execute and the Fiscal Agent will authenticate and deliver to the registered Owner, at the expense of the Authority, a new Bond or Bonds, of the same series and maturity, of authorized denominations in aggregate principal amount equal to the unredeemed portion of the Bond or Bonds.
Rescission of Notice of Redemption. The Authority has the right to rescind any notice of the optional redemption of Bonds under the Fiscal Agent Agreement by written notice to the Fiscal Agent on or prior to two Business Days prior the date fixed for redemption. Any notice of redemption will be cancelled and annulled if for any reason funds will not be or are not available on the date fixed for redemption for the payment in full of the Bonds then called for redemption Neither the Authority nor the Fiscal Agent will have any liability to the Owners or any other party related to or arising from such rescission of redemption.
Effect of Redemption. From and after the date fixed for redemption, if funds available for the payment of the principal of, and interest and any premium on, the Bonds so called for redemption are deposited in the Bond Fund, such Bonds so called will cease to be entitled to any benefit under the Fiscal Agent Agreement other than the right to receive payment of the redemption price, and no interest will accrue thereon on or after the redemption date specified in such notice.
Transfer or Exchange of Bonds
So long as the Bonds are registered in the name of Cede & Co., as nominee of DTC, transfers and exchanges of Bonds will be made in accordance with DTC procedures. See “APPENDIX F – DTC and the Book-Entry System.” Any Bond may, in accordance with its terms, be transferred or exchanged by the person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of such Bond for cancellation, accompanied by delivery of a duly written instrument of transfer in a form approved by the Fiscal Agent.
Whenever any Bond or Bonds are surrendered for transfer or exchange, the Authority will execute and the Fiscal Agent will authenticate and deliver a new Bond or Bonds, for a like aggregate principal amount of Bonds of authorized denominations and of the same maturity.
The cost for any services rendered or any expenses incurred by the Fiscal Agent in connection with any such transfer or exchange will be paid by the Authority. The Fiscal Agent will collect from the Owner requesting such transfer any tax or other governmental charge required to be paid with respect to such transfer or exchange.
No transfers or exchanges of Bonds will be required to be made (i) within 15 days prior to the date established by the Fiscal Agent for selection of Bonds for redemption or (ii) with respect to a Bond after such Bond has been selected for redemption.
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ESTIMATED SOURCES AND USES OF FUNDS
A summary of the estimated sources and uses of funds associated with the sale of the 2026 Bonds follows:
Estimated Sources of Funds:
Principal Amount of Bonds $
Less/Plus [Net] Original Issue Discount/Premium
Total $
Estimated Uses of Funds:
Deposit to Improvement Fund $
Deposit to Reserve Fund(1)
Costs of Issuance(2)
Total $
(1) Equal to the Reserve Requirement for the 2026 Bonds. (2) Includes fees of bond and disclosure counsel, initial fees, expenses and charges of the Fiscal Agent, costs of printing the Official Statement, administrative fees of the Authority, special tax consultant fees, appraiser fees, Underwriter’s discount, fees of the municipal advisor, and other costs of issuance.
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SECURITY FOR THE BONDS
The Bonds are limited obligations and not general obligations of the Authority, payable solely from the Special Taxes and the funds pledged therefor under the Fiscal Agent Agreement. Neither the faith and credit of the Authority nor of the City, the State or any political subdivision thereof is pledged to the payment of the Bonds.
Although the Special Tax as described herein is levied against taxable parcels within the District, it does not constitute a personal indebtedness of the owners of property within the District. There is no assurance that the property owners will be financially able to pay the annual Special Tax or that they will pay such tax even if financially able to do so. See “SPECIAL RISK FACTORS.”
THE AUTHORITY HAS NO OBLIGATION TO REPLENISH THE RESERVE FUND AS
DESCRIBED HEREIN EXCEPT FROM SPECIAL TAXES, INCLUDING DELINQUENT SPECIAL TAXES THAT ARE PAID OR COLLECTED FROM FORECLOSURE SALES.
Limited Obligation
The Bonds are special, limited obligations of the Authority, payable and secured by the Special Tax and certain amounts held in funds under the Fiscal Agent Agreement. The Bonds do not constitute a charge against the general credit of the Authority, and under no circumstances is the Authority obligated to pay principal of or redemption premiums, if any, or interest on the Bonds except from the Special Taxes and other moneys pledged thereto under the Fiscal Agent Agreement. Neither the City, the State nor any public agency (other than the Authority) is obligated to pay the principal of or redemption premiums, if any, or interest on the Bonds, and neither the faith and credit nor the taxing power of the Authority, the City, the State or any public agency thereof is pledged to the payment of the principal of or redemption premiums, if any, or interest on the Bonds. The payment of the principal of or redemption premiums, if any, or interest on the Bonds does not constitute a debt, liability or obligation of the Authority, the City, the State or any public agency (other than the Authority, to the limited extent set forth in the Fiscal Agent Agreement).
Pledge of Special Tax Revenues and Other Amounts
All of the Special Tax Revenues and all moneys deposited in the Bond Fund and, until disbursed as provided in the Fiscal Agent Agreement, in the Improvement Fund and the Special Tax Fund are pledged to secure the repayment of the Bonds. Such pledge shall constitute a first lien on the Special Tax Revenues and said amounts. The Special Tax Revenues and all moneys deposited into such funds (except as otherwise provided in the Fiscal Agent Agreement) are dedicated in their entirety to the payment of the principal of, including any mandatory sinking fund payments, and interest and any premium on, the Bonds as provided in the Fiscal Agent Agreement and in the Act until all of the Bonds have been paid and retired or until moneys or Federal Securities have been set aside irrevocably for that purpose in accordance with the Fiscal Agent Agreement.
Amounts in a Costs of Issuance Fund created for any Series of Bonds are not pledged to the repayment of any Series of the Bonds. The facilities acquired with the proceeds of the Bonds are not in any way pledged to pay the debt service on the Bonds. Any proceeds of condemnation, destruction or other disposition of any facilities financed with the proceeds of the Bonds are not pledged to pay the debt service on the Bonds and are free and clear of any lien or obligation imposed hereunder.
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Special Taxes
The Bonds are payable from and secured by proceeds of the Special Taxes received by the Authority, including all scheduled payments and delinquent payments thereof, interest and penalties thereon and proceeds of the redemption or sale of property sold as a result of foreclosure of the lien of the Special Taxes net of administration charges of the County (the “Special Tax Revenues”). All of the Special Tax Revenues and all moneys deposited in the Bond Fund, the Reserve Fund and, until disbursed as provided in the Fiscal Agent Agreement, in the Improvement Fund and the Special Tax Fund are pledged to secure the repayment of the Bonds. Such pledge will constitute a first lien on the Special Tax Revenues and said amounts.
The Special Tax Revenues and all moneys deposited into the such funds (except as otherwise provided in the Fiscal Agent Agreement) are dedicated to the payment of the principal of, including any mandatory sinking fund payments, and interest and any premium on, the Bonds as provided in the Fiscal Agent Agreement and in the Act until all of the Bonds have been paid and retired or defeased in accordance with the Fiscal Agent Agreement.
Amounts in the Costs of Issuance Fund are not pledged to the repayment of the Bonds.
The facilities acquired with the proceeds of the Bonds are not in any way pledged to pay the debt service on the Bonds. Any proceeds of condemnation, destruction or other disposition of any facilities financed with the proceeds of the Bonds are not pledged to pay the debt service on the Bonds and are free and clear of any lien or obligation imposed under the Fiscal Agent Agreement.
A Special Tax applicable to each taxable parcel in the District will be levied and collected according to the tax amount determined by the Board, acting as the legislative body of the District, through the application of the Rate and Method prepared by Goodwin Consulting Group, Inc., Sacramento, California (the “Special Tax Consultant”) and set forth in APPENDIX B hereto for all taxable properties in the District. Prior to remittance of the Special Tax collections to the Authority, the County deducts and retains a County administration fee.
Interest and principal on the Bonds is payable from the annual Special Tax Revenues to be paid to the Authority from Special Tax levies and collections on taxable property within the District, from amounts held in the funds and accounts established under the Fiscal Agent Agreement and from the proceeds, if any, from the sale of such property for delinquency of such Special Taxes.
The Special Taxes are exempt from the property tax limitation of Article XIIIA of the California Constitution, pursuant to Section 4 thereof as a “special tax” authorized by a twothirds vote of the qualified electors. The levy of the Special Taxes was authorized by the Authority pursuant to the Act in an amount determined according to the Rate and Method approved by the Authority. See “–Special Tax Methodology” below and “APPENDIX B – Rate and Method of Apportionment of Special Tax.”
The amount of Special Taxes that the District may levy in any year, and from which principal and interest on the Bonds is to be paid, is strictly limited by the maximum rates approved by the qualified electors within the District which are set forth as the annual “Maximum Special Tax” in the Rate and Method. Under the Rate and Method, Special Taxes for the purpose of making payments on the Bonds will be levied annually in an amount not in excess of the Maximum Special Tax. The Special Taxes and any interest earned on the Special Taxes constitute a trust fund for the principal of and interest on the Bonds pursuant to the Fiscal Agent Agreement and, so long as the principal of and interest on these obligations remains
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unpaid, the Special Taxes and investment earnings thereon will not be used for any other purpose, except as permitted by the Fiscal Agent Agreement, and will be held in trust for the benefit of the Owners thereof and will be applied pursuant to the Fiscal Agent Agreement. The Rate and Method apportions the Special Tax Requirement (as defined below) among the taxable parcels of real property within the District according to the rate and methodology set forth in the Rate and Method. See “–Special Tax Methodology” below.
The Authority may levy the Special Tax at the applicable Maximum Special Tax rates set forth in the Rate and Method. The Authority will levy the Special Taxes in an amount at least sufficient to pay the Special Tax Requirement (as defined below). Because each Special Tax levy is limited to the Maximum Special Tax rates authorized as set forth in the Rate and Method, no assurance can be given that, in the event of Special Tax delinquencies, an amount equal to the Special Tax Requirement will in fact be collected in any given year. See “SPECIAL RISK FACTORS – Tax Delinquencies.”
Special Tax Methodology
The Special Tax authorized under the Act applicable to land within the District will be levied and collected according to the tax liability determined by the Authority through the application of the appropriate amount or rate as described in the Rate and Method. The Rate and Method was adopted by the Authority in 2005, and supplemented by resolution of the Authority in 2015. Capitalized terms set forth in this section and not otherwise defined have the meanings set forth in the Rate and Method. See “APPENDIX B – Rate and Method of Apportionment of Special Tax” for a copy of the Rate and Method, as supplemented.
Determination of Special Tax Requirement. Each fiscal year, the Authority will determine the Special Tax Requirement of the District for the upcoming Fiscal Year. The “Special Tax Requirement” includes the following items:
(i) debt service on the bonds issued for the District;
(ii) administrative expenses and County fees;
(iii) amounts to cure any delinquencies in the payment of principal or interest on Bonds which have occurred in the prior Fiscal Year or (based on delinquencies in the payment of Special Taxes which have already taken place) are expected to occur in the Fiscal Year in which the tax will be collected; (iv) any amounts needed to replenish bond reserve accounts; and (v) pay-as-you-go expenditures for authorized improvements.
The Special Tax Requirement is the basis for the amount of Special Tax to be levied within the District. In no event may the Authority levy a Special Tax in any year above the Maximum Special Tax identified for each parcel set forth in the Rate and Method.
Parcels Subject to the Special Tax; Exemptions. The Rate and Method designates five zones within the District. The Authority will prepare a list of the parcels subject to the Special Tax for each Fiscal Year using the records of the Authority and the County Assessor.
The Authority will tax parcels within each zone within the District pursuant to the Rate and Method. Eleven annexations into the District have occurred since the formation of the District,
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resulting in the addition of twenty-two Assessor’s Parcels becoming subject to the Special Tax (created out of an original fourteen Assessor’s Parcels). No Special Tax will be levied on Public Property, except as otherwise provided in Sections 53317.3 and 53317.5 of the Act. “Public Property” means any property within the boundaries of the District that is owned by or irrevocably offered for dedication to the federal government, State of California or other local governments or public agencies. See “APPENDIX B – Rate and Method of Apportionment of Special Tax,” for identification of the tax zones and current parcels subject to the Special Tax pursuant to the Rate and Method.
Maximum Special Tax Rates. The base year Maximum Special Tax rates were set for Fiscal Year 2005-06. Beginning July 1, 2006 and each July 1 thereafter, the Maximum Special Taxes shall be adjusted by applying the “Annual Tax Escalation Factor,” which is defined as the greater of (i) 2% or (ii) the increase, if any, in the Engineering News - Record Construction Cost Index for the San Francisco region that occurred in the one-year period concluding with January 1 of the prior Fiscal Year.
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The projected Maximum Special Tax applicable to each taxable parcel, as determined in accordance with in the Rate and Method for Fiscal Year 2026-27, is as follows:
Table 1
West Patterson Financing Authority
Community Facilities District No. 2005-1 (West Patterson Business Park) Projected Maximum Special Tax for Fiscal Year 2026-27(1) Assessor's Parcel
Number Acres
Building
Sq. Ft.
Owner Name
(Per 2025-26 Tax Roll)
FY 2026-27
Projected
Special Tax (2)
Developed Property
021-026-058-000(3) 21.22 0 BIT HOLDINGS SEVENTY-SEVEN INC $115,987.64 021-026-059-000(3) 33.78 1,015,740 BIT HOLDINGS SEVENTY-SEVEN INC 184,640.08 021-026-074-000 1.77 50,161 GILL HOSPITALITY LLC 9,674.74 021-026-075-000 1.17 6,180 PMRN INC 6,395.18
021-085-024-000 28.41 529,970 LBA RV-COMPANY XVII LP 155,287.88 021-085-028-000 45.99 800,358 W W GRAINGER INC 251,370.14 021-085-036-000 43.36 819,938 ROGERS ROAD LLC 237,003.96 021-088-001-000 2.22 23,875 GEA MECHANICAL EQUIPMENT US INC 12,134.42 021-088-002-000 2.25 31,067 525 BALDWIN LLC 12,298.40
021-088-003-000 1.70 16,647 KEYSTONE PARK LLC 9,292.12
021-088-006-000 0.58 6,887 525 BALDWIN LLC 3,170.26
021-088-008-000 0.66 8,903 MKMG - KEYSTONE LLC 3,607.54 021-088-013-000 2.50 15,836 VALLEY PROPERTY AND EQUIPMENT RENTAL INC 13,664.90 021-088-016-000 3.33 3,864 INDIVIDUAL OWNER 18,201.64
021-088-018-000 34.57 712,101 WESTCORE ALPHA PATTERSON LLC 188,958.20 021-092-001-000 1.93 28,900 INDIVIDUAL OWNER 10,549.30
021-092-002-000 0.92 28,900 INDIVIDUAL OWNER 5,028.68
021-092-003-000 1.02 28,900 INDIVIDUAL OWNER 5,575.28
021-092-004-000 1.04 28,900 INDIVIDUAL OWNER 5,684.60
021-092-005-000 0.92 28,900 INDIVIDUAL OWNER 5,028.68
021-093-002-000 1.74 3,867 EAGLE VALLEY INVESTMENTS 9,510.76 021-093-003-000 14.29 23,000 LOVES COUNTRY STORES OF CALIFORNIA INC 78,108.54 021-093-010-000 0.63 4,100 RPG PROPERTIES LLC 3,443.56
021-093-012-000 10.05 19,564 MDHE ENTERPRISES LLC 54,932.88 021-093-013-000 1.99 19,935 PATTERSON CENTER LLC 10,877.26 021-093-014-000 0.50 862 PATTERSON CENTER LLC 2,732.98
021-094-001-000 11.30 14,636 PILOT TRAVEL CENTERS LLC 61,765.34 021-094-003-000 0.52 2,306 ROSANA HOLDINGS LLC 2,842.30 021-095-009-000 2.00 16,629 HAMEN EXPRESS LLC 10,931.92 021-095-010-000 26.53 102,073 S2A INVESTMENTS 2 LLC 145,011.88 021-098-011-000 1.64 9,832 APRICOT WORLD PROPERTIES LLC 8,964.18 Subtotal 300.53 4,402,831 $1,642,675.24
Undeveloped Property
021-085-006-000 5.29 0 INDIVIDUAL OWNER $0.00
021-085-017-000 5.00 0 INDIVIDUAL OWNER 0.00
021-085-031-000 0.03 0 T8 ULYSSES SITE MANAGEMENT LLC 0.00 021-085-032-000 5.52 0 KEYSTONE PACIFIC BUSINESS PARK LLC 0.00 021-085-033-000 5.45 0 KEYSTONE PACIFIC BUSINESS PARK LLC 0.00 021-085-034-000 8.00 0 2501 KEYSTONE LLC 0.00
021-085-035-000 1.02 0 KEYSTONE PACIFIC BUSINESS PARK LLC 0.00 021-088-011-000 4.00 0 YOSEMITE COMMUNITY COLLEGE DISTRICT 0.00 021-092-006-000 1.02 0 INDIVIDUAL OWNER 0.00
021-092-007-000 1.29 0 INDIVIDUAL OWNER 0.00
021-092-008-000 1.43 0 INDIVIDUAL OWNER 0.00
021-094-002-000 1.90 0 INDIVIDUAL OWNER 0.00
021-098-013-000 14.39 0 EAGLE VALLEY INVESTMENTS 0.00
Subtotal 54.34 0 $0.00
[Table 1 and footnotes continued on following page]
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Assessor's Parcel
Number Acres
Building
Sq. Ft.
Owner Name
(Per 2025-26 Tax Roll)
FY 2026-27
Projected
Special Tax (2)
Excluded Properties (4)
021-088-004-000 1.56 15,200 PATTERSON JOINT UNIFIED SCHOOL DISTRICT $8,526.90 021-088-007-000 0.89 10,655 PATTERSON UNIFIED SCHOOL DISTRICT 4,864.70 021-088-009-000 0.68 11,440 DEL PUERTO HEALTH CARE DISTRICT 3,716.86 021-088-010-000 0.85 9,095 DEL PUERTO HEALTH CARE DISTRICT 4,646.06 Subtotal 3.98 46,390 $21,754.52
Total (5) 354.87 4,402,831 $1,642,675.24
(1) Does not include parcels 021-085-014-000 and 021-085-021-000, both of which have prepaid their Special Tax obligation. The table includes both Developed Property and Undeveloped Property, although the Special Tax is only levied upon Developed Property under the Special Tax Formula. (2) Assumes that WPFA will levy the Maximum Special Tax on all Taxable Parcels in Fiscal Year 2026-27. (3) The Amazon Fulfillment Center stretches across two Assessor's Parcels. The building square footage has been assigned to parcel 021-026-059-000 exclusively.
(4) Consists of parcels that are taxable, but owned by public agencies as of Fiscal Year 2025-26. (5) Does not include the Excluded Properties.
Sources: Stanislaus County Assessor's Office, City of Patterson, Goodwin Consulting Group, Inc.
Manner of Collection. The Special Taxes are collected for the Authority by the County in the same manner and at the same time as ad valorem property taxes. However, the Authority may directly bill the Special Tax, may collection Special Taxes at a different time or in a different manner, and may collection delinquent Special Taxes through foreclosure or other available methods.
Prepayment of the Special Tax. The Special Tax obligation applicable to an Assessor’s Parcel in the District may be prepaid and the obligation of the Assessor’s Parcel to pay the Special Tax permanently satisfied, in full or in part, under the conditions described in the Rate and Method, provided that a prepayment may be made only if there are no delinquent Special Taxes with respect to such Assessor’s Parcel at the time of prepayment. The Prepayment Amount is generally calculated based on the Bond Redemption Amount plus the Remaining Facilities Amount, Redemption Premium, Defeasance Requirement and other fees and expenses, all as specified in APPENDIX B. A partial prepayment may be made in an amount equal to any percentage of full prepayment desired by the party making a partial prepayment. The Maximum Special Tax that can be levied on a Parcel after a partial prepayment is made will be determined as set forth in the Rate and Method.
Termination of the Special Tax. The Special Tax will be levied and collected for as long as needed to pay the principal and interest on the Bonds and other costs incurred in order to complete the construction of the authorized District-funded facilities. However, the Rate and Method further provides that the Special Tax may not be levied on any parcel used for private residential purposes after Fiscal Year 2054-55.
Levy of Annual Special Tax; Maximum Special Tax
The annual Special Tax will be calculated by the Authority and levied to provide money for debt service on the Bonds, replenishment of the Reserve Fund, cure certain delinquencies, administration of the District, and for payment of pay-as-you-go expenditures (to the extent permitted by the Authority) of the authorized District-funded facilities not funded from Bond proceeds. In no event may the Authority levy a Special Tax in any year above the Maximum Special Tax identified for each parcel as set forth in the Rate and Method.
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Each Fiscal Year the Administrator determines the Special Tax Requirement, and the Special Tax is levied Proportionately on each Parcel of Developed Property up to 100% of the Maximum Special Tax assigned to each Parcel until the amount levied is equal to the Special Tax Requirement. See “APPENDIX B – Rate and Method of Apportionment of Special Tax.” The Rate and Method provides that the Maximum Special Tax may be increased by the Annual Tax Escalation Factor each Fiscal Year. See “–Special Tax Methodology – Maximum Special Tax Rates” above. The Authority has covenanted in the Fiscal Agent Agreement to apply the Annual Tax Escalation Factor provided for in the Rate and Method in each Fiscal Year in accordance with the terms thereof.
The Authority has also covenanted in the Fiscal Agent Agreement to fix and levy the amount of Special Taxes within the District required for the payment of principal of and interest on any outstanding Bonds of the District becoming due and payable during the ensuing year, including any necessary replenishment or expenditure of the Reserve Fund for the Bonds and an amount estimated to be sufficient to pay the Administrative Expenses during such year, all in accordance with the Rate and Method. The Special Tax is authorized to be levied in an amount not to exceed the Maximum Special Tax levy as described in the Rate and Method notwithstanding that a lower amount is sufficient to pay debt service on the Bonds. See “APPENDIX B – Rate and Method of Apportionment of Special Tax” for a copy of the Rate and Method.
_____ parcels in the District have been levied a Special Tax for Fiscal Year 2026-27, but do not have any assessed value. These parcels are collectively referred to in this Official Statement as the “Taxable Public Property.” ______ parcels of the Taxable Public Property are owned by the Patterson Joint Unified School District and ______ are owned by the Del Puerto Health Care District. Although a Special Taxes are levied on each of these parcels, given the public or quasi-public ownership of these parcels, the Authority makes no representation that it could successfully foreclose upon such parcels to enforce the payment of such Special Tax.
Accordingly, these parcels have not been included in the Appraisal and will not be taken into account when determining the value to burden ratios on parcels in the District set forth under “VALUE OF PROPERTY WITHIN THE DISTRICT – Value to Special Tax Burden Ratios.” [[The 2026 Bonds have been sized such that Special Taxes levied on these parcels is not needed to pay debt service on the Bonds.]] [[Or indicate coverage?]] The Rate and Method provides a mechanism whereby the Authority may utilize the payas-you-go component to pay for costs of Improvements not funded by proceeds of the bonds issued for the District. In the event the pay-as-you-go component is utilized, proceeds of the annual Special Tax levy will first be used to pay the Special Tax Requirement (which include debt service payments on the Bonds) other than pay-as-you-go expenditures. See “THE IMPROVEMENTS” and “VALUE OF PROPERTY WITHIN THE DISTRICT.” Special Tax Fund
When received, the Special Tax Revenues are required under the Fiscal Agent Agreement to be deposited into a Special Tax Fund to be held by the Treasurer in trust for the benefit of the Authority and the Owners of the Bonds. Within the Special Tax Fund, the Authority will establish and maintain a Prepayment Account and a Surplus Account, to the credit of which the Authority will respectively deposit prepayments of Special Taxes and surplus Special Tax revenue, if any, as described below. Moneys in the Special Tax Fund will
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be disbursed as provided below and, pending any disbursement, will be subject to a lien in favor of the Owners of the Bonds.
As soon as practicable after the receipt by the Authority of any Special Tax Revenues, other than from prepayments of Special Taxes, or the transfer of amounts to the Special Tax Fund pursuant to the terms of the Fiscal Agent Agreement, but no later than ten Business Days after such receipt or transfer, the Treasurer shall withdraw from the Special Tax Fund and transfer to the Fiscal Agent:
(i) for deposit in the Bond Fund, an amount, taking into account any amounts then on deposit in the Bond Fund, such that the amount in the Bond Fund equals the principal, premium, if any, and interest due on the Bonds during the thencurrent Bond Year; and (ii) for deposit in the Reserve Fund, an amount, taking into account amounts then on deposit in the Reserve Fund, so that the amount in the Reserve Fund equals the Reserve Requirement.
At such time as deposits to the Special Tax Fund other than from prepayment of Special Taxes equal the principal, premium if any, and interest becoming due on the Bonds for the current Bond Year and the amount needed to restore the Reserve Fund balance to the Reserve Requirement for the Bonds, the amount in the Special Tax Fund in excess of such amount shall be transferred by the Authority, on or after September 2nd of each year, to the Surplus Account and such moneys transferred shall be free of the pledge for payment of the Bonds.
Prepayment Account. As soon as practicable after the receipt by the Authority of any Special Tax Revenues derived from prepayments of the Special Tax, the Authority shall, from the money in the Special Tax Fund constituting such prepayments, deposit in the Prepayment Account the amount of money constituting such prepayments, and all money in the Prepayment Account shall be used and withdrawn by the Authority for deposit in the Bond Fund to implement a mandatory redemption of Bonds.
Surplus Account. From time to time, the Authority may withdraw from the Surplus Account of the Special Tax Fund amounts needed to pay Administrative Expenses, costs of the acquisition and construction of Facilities or any other District costs authorized under the Act.
Moneys in the Surplus Account may, at the Authority’s discretion, also be used to pay the principal of, premium, if any, and interest on the Bonds or to replenish the Reserve Fund to the amount of the Reserve Requirement for each series of Bonds.
Delinquent Payments of Special Tax; Covenant for Superior Court Foreclosure The Special Tax will be collected in the same manner and the same time as ad valorem property taxes, except at the Authority’s option, the Special Taxes may be billed directly to property owners or collected at a different time to meet the Authority’s financial obligations. In the event of a delinquency in the payment of any installment of Special Taxes, the Authority is authorized by the Act to order institution of an action in superior court to foreclose the lien therefor.
The Authority has covenanted in the Fiscal Agent Agreement with and for the benefit of the Owners of the Bonds that it will order, and cause to be commenced as provided in the Fiscal Agent Agreement, and thereafter diligently prosecute to judgment (unless such
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delinquency is theretofore brought current), an action in the superior court to foreclose the lien of any Special Tax or installment thereof not paid when due as follows:
Determination Dates. On or about February 15 and June 15 of each Fiscal Year, the Authority will compare the amount of Special Taxes theretofore levied in the District to the amount of Special Tax Revenues theretofore received by the Authority.
Individual Delinquencies. If the Authority determines that any single parcel subject to the Special Tax in the District is delinquent in the payment of Special Taxes in the aggregate amount of $5,000 or more, then the Authority will send or cause to be sent a notice of delinquency (and a demand for immediate payment thereof) to the property owner within 45 days of such determination, and (if the delinquency remains uncured) foreclosure proceedings shall be commenced by the Authority within 90 days of such determination. Notwithstanding the foregoing, the Authority may defer such action if the amount in the Reserve Fund is at least equal to the Reserve Requirement for each series of Bonds.
Aggregate Delinquencies. If the Authority determines that the total amount of delinquent Special Tax for the prior Fiscal Year for the entire District (including the total of delinquencies described in the preceding paragraph), exceeds 5% of the total Special Tax due and payable for the prior Fiscal Year, the Authority shall notify or cause to be notified property owners who are then delinquent in the payment of Special Taxes (and demand immediate payment of the delinquency) within 45 days of such determination, and the Authority shall commence foreclosure proceedings within 90 days of such determination against each parcel of land in the District with a Special Tax delinquency.
Under the Act, foreclosure proceedings are instituted by the bringing of an action in the superior court of the county in which the parcel lies, naming the owner and other interested persons as defendants. The action is prosecuted in the same manner as other civil actions. In such action, the real property subject to the special taxes may be sold at a judicial foreclosure sale for a minimum price, which will be sufficient to pay or reimburse the delinquent special taxes.
The owners of the Bonds benefit from the Reserve Fund established pursuant to the Fiscal Agent Agreement; however, if delinquencies in the payment of the Special Taxes with respect to the Bonds are significant enough to completely deplete the Reserve Fund, there could be a default or a delay in payments of principal and interest to the owners of the Bonds pending prosecution of foreclosure proceedings and receipt by the Authority of the proceeds of foreclosure sales. Provided that it is not levying the Special Tax at the Maximum Special Tax rates set forth in the Rate and Method, the Authority may adjust (but not to exceed the Maximum Special Tax and subject to the limitation described under the caption “–Special Tax Methodology – Limitation on Increases in Special Tax Levy” above) the Special Taxes levied on all property within the District subject to the Special Tax to provide an amount required to pay debt service on the Bonds and to replenish the Reserve Fund.
Under current law, a judgment debtor (property owner) has at least 120 days from the date of service of the notice of levy in which to redeem the property to be sold. If a judgment debtor fails to redeem and the property is sold, his or her only remedy is an action to set aside the sale, which must be brought within 90 days of the date of sale. If, as a result of such an action a foreclosure sale is set aside, the judgment is revived and the judgment creditor is
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entitled to interest on the revived judgment as if the sale had not been made (California Code of Civil Procedure Section 701.680).
Foreclosure by court action is subject to normal litigation delays, the nature and extent of which are largely dependent upon the nature of the defense, if any, put forth by the debtor and the condition of the calendar of the superior court of the county. Such foreclosure actions can be stayed by the superior court on generally accepted equitable grounds or as the result of the debtor’s filing for relief under the Federal bankruptcy laws. The Act provides that, upon foreclosure, the Special Tax lien will have the same lien priority as is provided for ad valorem taxes and special assessments. See “VALUE OF PROPERTY WITHIN THE DISTRICT – Overlapping Liens and Priority of Lien.”
No assurances can be given that the real property subject to a judicial foreclosure sale will be sold or, if sold, that the proceeds of sale will be sufficient to pay any delinquent Special Tax installment. The Act does not require the District to purchase or otherwise acquire any lot or parcel of property foreclosed upon if there is no other purchaser at such sale.
Section 53356.6 of the Act requires that property sold pursuant to foreclosure under the Act be sold for not less than the amount of judgment in the foreclosure action, plus postjudgment interest and authorized costs, unless the consent of the owners of 75% of the outstanding Bonds is obtained. However, under Section 53356.6 of the Act, the District, as judgment creditor, is entitled to purchase any property sold at foreclosure using a “credit bid,” where the District could submit a bid crediting all or part of the amount required to satisfy the judgment for the delinquent amount of the Special Tax. If the District becomes the purchaser under a credit bid, the District must pay the amount of its credit bid into the redemption fund established for the Bonds, but this payment may be made up to 24 months after the date of the foreclosure sale.
Deposit and Use of Proceeds of Bonds
The Bonds are additionally secured by certain amounts generated from proceeds of the Bonds, together with interest earnings thereon pledged under the Fiscal Agent Agreement.
The proceeds of the Bonds will be paid to the Fiscal Agent, who will deposit such proceeds in the Reserve Fund, Improvement Fund and Costs of Issuance Fund established under the Fiscal Agent Agreement. See “– Reserve Fund” and “– Improvement Fund” below. Amounts in the Costs of Issuance Fund are not available to pay debt service on the Bonds.
Reserve Fund
A Reserve Fund (the “Reserve Fund”) held by the Fiscal Agent was established under the Fiscal Agent Agreement. Within the Reserve Fund a 2015 Reserve Account was established for the 2015 Bonds and a 2021 Reserve Account was established for the 2021 Bonds. Upon delivery of the 2026 Bonds, a 2026 Reserve Account (the “2026 Reserve Account”) will be established to further secure the 2026 Bonds by depositing certain proceeds of the 2026 Bonds in the amount of the “Reserve Requirement” for the 2026 Bonds, which is the lesser of 10% of the original principal amount of the 2026 Bonds, 100% of maximum annual debt service on the 2026 Bonds, or 125% of average annual debt service on the 2026 Bonds.
The Authority is required to maintain an amount of money or other security equal to the Reserve Requirement for the 2026 Bonds in the 2026 Reserve Account at all times that the 2026 Bonds are outstanding. All amounts deposited in the 2026 Reserve Account of the
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Reserve Fund will be used and withdrawn by the Fiscal Agent solely for the purpose of making transfers to the Bond Fund in the event of any deficiency at any time in the Bond Fund of the amount then required for payment of the principal of, and interest on, the 2026 Bonds.
Whenever transfer is made from the Reserve Fund to the Bond Fund due to a deficiency in the Bond Fund, the Fiscal Agent will provide written notice thereof to the Authority.
Whenever, on the Business Day prior to any Interest Payment Date, the amount in the 2026 Reserve Account of the Reserve Fund exceeds the then applicable Reserve Requirement for the 2026 Bonds, the Fiscal Agent will provide notice to the Authority of the amount of the excess. The Authority will advise the Fiscal Agent of the amount, if any, of any transfer required to be made under the Fiscal Agent Agreement, and otherwise direct the Fiscal Agent to transfer an amount equal to the excess from the 2026 Reserve Account of Reserve Fund to the Improvement Fund, if the Improvements have not been completed as of the date of such transfer, or if the Improvements have been completed, to the Bond Fund to be used for the payment of the principal of and interest on the 2026 Bonds in accordance with the Fiscal Agent Agrement. However, to the extent that such excess results from the prepayment of Special Taxes and redemption of 2026 Bonds in accordance with the Fiscal Agent Agreement, such amount will be transferred to the Prepayment Account and applied to the corresponding redemption of 2026 Bonds.
Investment earnings on amounts in the Reserve Fund may be withdrawn from the Reserve Fund for purposes of making payment to the federal government to comply with the rebate provisions of the Fiscal Agent Agreement.
Whenever the balance in the Reserve Fund exceeds the amount required to redeem or pay the outstanding bonds, including interest accrued to the date of payment or redemption and premium, if any, due upon redemption, and make any other transfer required under the Fiscal Agent Agreement, the Fiscal Agent will transfer the amount in the Reserve Fund to the Bond Fund to be applied, on the next succeeding Interest Payment Date, to the payment and redemption of all of the outstanding bonds of the series of bonds to which the excess relates. If the amount so transferred from the Reserve Fund to the Bond Fund exceeds the amount required to pay and redeem the outstanding bonds of such series, the balance in the Reserve Fund will be transferred to the Authority, after payment of any amounts due the Fiscal Agent, to be used for any lawful purpose of the Authority.
Moneys in the Reserve Fund will be invested and deposited in accordance with the Fiscal Agent Agreement and investment income thereon will be subject to rebate requirements under applicable tax laws.
Bond Fund
A Bond Fund (the “Bond Fund”) for the Bonds will be established under the Fiscal Agent Agreement, to be held by the Fiscal Agent. Moneys in the Bond Fund will be held in trust by the Fiscal Agent for the benefit of the Owners of the Bonds, will be disbursed for the payment of the principal of, and interest and any premium on, the Bonds as provided in the Fiscal Agent Agreement, and, pending such disbursement, will be subject to a lien in favor of the Owners of the Bonds.
Within the Bond Fund there will be established the “Prepayment Account,” which will be used exclusively for the administration of any prepayments of Special Taxes to assure the timely redemption of Bonds. Monies in the Prepayment Account will be used to redeem Bonds
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on the redemption date specified in the notice to the Fiscal Agent given pursuant to the Fiscal Agent Agreement. In the event all of the Special Taxes are prepaid in full, the Prepayment Account will be closed.
On each Interest Payment Date, the Fiscal Agent will withdraw from the Bond Fund and pay to the Owners of the Bonds the principal of, and interest and any premium, then due and payable on the Bonds, including any amounts due on the Bonds by reason of the sinking payments or any optional redemption of the Bonds.
If amounts in the Bond Fund are insufficient to pay regularly scheduled payments of principal of and interest on any series of bonds, the Fiscal Agent shall withdraw from the respective reserve account within the Reserve Fund established for such series of bonds to the extent of any funds therein, the amount of such insufficiency, and the Fiscal Agent will provide written notice to the Authority of the amounts so withdrawn from the Reserve Fund.
Amounts so withdrawn from the Reserve Fund will be deposited in the Bond Fund.
If, after the foregoing transfer, there are insufficient funds in the Bond Fund to make the payments provided for to pay regularly scheduled payments of principal of and interest on the Bonds, the Fiscal Agent will apply the available funds:
(i) first to the payment of interest on the Bonds,
(ii) then to the payment of principal due on the Bonds other than by reason of sinking payments, and
(iii) then to payment of principal due on the Bonds by reason of sinking payments.
Any sinking payment not made as scheduled will be added to the sinking payment to be made on the next sinking payment date.
Moneys in the Bond Fund shall be invested and deposited in accordance with the Agreement. If ten days before any Interest Payment Date it appears to the Fiscal Agent that there is a danger of deficiency in the Bond Fund and that the Fiscal Agent may be unable to pay regularly scheduled debt service on the Bonds in a timely manner, the Fiscal Agent will report to the Authority such fact. The Authority covenants to increase the levy of the Special Taxes in the next Fiscal Year (subject to the maximum amount authorized by the Resolution of Formation and set forth in the Rate and Method) in accordance with the procedures set forth in the Act for the purpose of curing Bond Fund deficiencies.
Improvement Fund
Under the Fiscal Agent Agreement, there is established an Improvement Fund, which is to be held in trust by the Fiscal Agent and will be disbursed as provided in the Fiscal Agent Agreement for the payment or reimbursement of the costs of the construction and acquisition of the Improvements. Interest earnings from the investment of amounts in the Improvement Fund will be retained in the Improvement Fund to be used for the purposes of the Improvement Fund. Prior to disbursement, amounts on deposit in the Improvement Fund will be subject to a lien in favor of the Owners of the Bonds.
Disbursements from the Improvement Fund will be made by the Fiscal Agent upon
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receipt of a certificate from the Authority substantially in the form attached to the Fiscal Agent Agreement, which will (i) set forth the amount required to be disbursed, the purpose for which the disbursement is to be made, the person to which the disbursement is to be paid and state that such disbursement is for a reimbursable cost; and (ii) certify that no portion of the amount then being requested to be disbursed was set forth in any certificate previously filed requesting disbursement.
Upon completion of the Improvements, the Fiscal Agent will transfer the amount, if any, remaining in the Improvement Fund to the Bond Fund for application to the payment of principal of and interest on the Bonds in accordance with the Fiscal Agent Agreement, and the Improvement Fund will be closed. See “THE IMPROVEMENTS.” Future Parity Bonds
The Resolution of Formation authorizes the issuance of up to $45,000,000 of bonds, of which the 2026 Bonds represent the third series. The Authority expects that it will, by a Supplemental Agreement to the Fiscal Agent Agreement, authorize the issuance of one or more additional Series of Bonds (“Additional Bonds”) payable from Special Taxes and secured by the Special Taxes on a parity with the 2015 Bonds, 2021 Bonds and 2026 Bonds, as development progresses in the District and upon compliance by the Authority with the conditions set forth in the Fiscal Agent Agreement, which include the following:
(i) No default in the Bonds will have occurred and then be continuing; (ii) The Supplemental Agreement providing for the issuance of the Additional Bonds will specify the purpose for which such Additional Bonds are being issued, which will be to provide moneys needed to construct and acquire the facilities, by depositing into the Improvement Fund the proceeds of such Additional Bonds to be so applied, or to refund all or part of the Bonds or Additional Bonds then outstanding, by depositing in trust with the Fiscal Agent, moneys or Federal Securities in the amount necessary to discharge all liability of the Authority with respect to the bonds to be refunded as provided in the Fiscal Agent Agreement; (iii) The Supplemental Agreement providing for the issuance of the Additional Bonds will also require that there be deposited into a subaccount in the Reserve Fund, or into a separate parity reserve fund, forthwith upon the receipt of the proceeds of the sale of such series, an amount at least equal to the reserve requirement with respect to the outstanding Additional Bonds of the series to which it relates, which deposit may be made from the proceeds of the sale of such series or by the Authority or from both such sources, as provided in the Supplemental Agreement;
(iv) The Additional Bonds of such series will be payable as to principal on September 1 in each year in which principal becomes due, and will be payable as to interest semiannually on March 1 and September 1, except that the first installment of interest may be payable on either March 1 or September 1;
(v) Fixed serial maturities or sinking fund payments, or any combination thereof, will be established in amounts sufficient to provide for the retirement of all of the Additional Bonds of such series on or before their respective maturity dates; (vi) After giving effect to the issuance of such series of Additional Bonds:
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(a) For each Bond Year that the Bonds and Additional Bonds will be outstanding, projected Maximum Special Taxes (net of County administration charges) in each Fiscal Year are equal to or greater than one hundred ten percent (110%) of maximum Debt Service due in the Bond Year that begins in the corresponding Fiscal Year; and
(b) The aggregate value of all parcels in the District subject to the Special Tax and not delinquent in the payment of any Special Taxes then due and owing, including then existing improvements and any facilities to be constructed or acquired with the proceeds of the proposed series of Bonds, as determined by an MAI appraisal or, in the alternative, the assessed value of all such parcels and improvements thereon (and improvements to be financed from proceeds of the Bonds proposed to be issued) as shown on the then current County tax roll, or by a combination of both methods is at least 4.00 times the sum of (1) the aggregate principal amount of all Bonds then outstanding plus (2) the aggregate principal amount of the series of Bonds proposed to be issued, plus (3) the aggregate principal amount of any bonds then outstanding and payable from assessments which are a lien against property in the District, plus (4) a portion of the aggregate principal amount of all Mello-Roos bonds, other than Bonds then outstanding, and payable at least partially from special taxes to be levied on parcels of land subject to the Special Tax within the District (the “Other Mello-Roos Bonds”) equal to the aggregate principal amount of the Other Mello-Roos Bonds multiplied by a fraction, the numerator of which is the amount of special taxes levied for the Other Mello-Roos Bonds on parcels of land within the District subject to the Special Tax and not delinquent in the payment of any Special Taxes then due and owing, and the denominator of which is the total amount of special taxes levied for the Other Mello-Roos Bonds on all parcels of land subject to the Special Tax against which the special taxes are levied to pay the Other Mello-Roos Bonds and not delinquent in the payment of any Special Taxes then due and owing (such fraction to be determined based upon the special taxes which could be levied the year in which maximum annual debt service on the Other Mello-Roos Bonds occurs), based upon information from the most recent available fiscal year.
Notwithstanding the foregoing, if a developer or developers of property in the District deposit with the Fiscal Agent cash or a letter of credit from a reputable bank which is acceptable to the Authority, in an amount (the “Letter of Credit Amount”) equal to the shortfall in the valuation of the property in the District to meet the value-to-lien requirement set forth in the preceding paragraph, the Letter of Credit Amount will be excluded from the debt computation under the foregoing clause (vi)(b). Any such letter of credit deposited with the Fiscal Agent will remain in effect, and the Letter of Credit Amount will not be reduced or the letter of credit thereafter terminated, until satisfaction of the foregoing clause (vi)(b) with respect to the amount by which the letter of credit is proposed to be reduced, or with respect to the Letter of Credit Amount in connection with the proposed termination of the letter of credit.
Nothing in the Fiscal Agent Agreement will prevent or be construed to prevent the Supplemental Agreement providing for the issuance of Additional Bonds from pledging or otherwise providing, in addition to the security given or intended to be given by the Fiscal Agent Agreement, additional security for the benefit of such Additional Bonds or any portion thereof.
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Discharge of Fiscal Agent Agreement
Under the Fiscal Agent Agreement, if the Authority pays and discharges the entire indebtedness on all or any portion of the bonds outstanding under the Fiscal Agent Agreement in any one or more of the following ways:
(i) by well and truly paying or causing to be paid the principal of, and interest and any premium on, such outstanding bonds, as and when the same become due and payable; (ii) by depositing with the Fiscal Agent, in trust, at or before maturity, money which, together with (in the event that all of the bonds are to be defeased) the amounts then on deposit in the funds and accounts provided for in the Fiscal Agent Agreement, is fully sufficient to pay such outstanding bonds, including all principal, interest and redemption premiums; or (iii) by irrevocably depositing with the Fiscal Agent, in trust, cash and federal securities in such amount as the Authority determines as confirmed by an independent certified public accountant will, together with the interest to accrue thereon and (in the event that all of the bonds are to be defeased) moneys then on deposit in the fund and accounts provided for in the Fiscal Agent Agreement, be fully sufficient to pay and discharge the indebtedness on such bonds (including all principal, interest and redemption premiums) at or before their respective maturity dates;
and if such bonds are to be redeemed prior to the maturity thereof, notice of such redemption will have been given as in the Fiscal Agent Agreement provided or provision satisfactory to the Fiscal Agent will have been made for the giving of such notice, then, at the election of the Authority, and notwithstanding that any bonds will not have been surrendered for payment, the pledge of the Special Taxes and other funds provided for in the Fiscal Agent Agreement and all other obligations of the Authority under the Fiscal Agent Agreement with respect to such outstanding bonds will cease and terminate, except only the obligations of the Authority assuring (a) the exclusion of interest on the bonds from the gross income of the Owners of the bonds as provided in the Fiscal Agent Agreement and (b) the payment to the Owners of the bonds not so surrendered and paid all sums due thereon and all amounts owing to the Fiscal Agent; and thereafter Special Taxes will not be payable to the Fiscal Agent.
Amendment of Fiscal Agent Agreement
The Fiscal Agent Agreement and the rights and obligations of the Authority and of the Owners of the bonds issued under the Fiscal Agent Agreement may be modified or amended at any time by a Supplemental Agreement pursuant to the affirmative vote at a meeting of Owners, or with the written consent without a meeting, of the Owners of at least 60% in aggregate principal amount of the bonds then outstanding, exclusive of bonds disqualified as provided in the Fiscal Agent Agreement. No such modification or amendment will (i) extend the maturity of any bond or reduce the interest rate thereon, or otherwise alter or impair the obligation of the Authority to pay the principal of, and the interest and any premium on, any bond, without the express consent of the Owner of such bond, or (ii) permit the creation by the Authority of any pledge or lien upon the Special Taxes superior to or on a parity with the pledge and lien created for the benefit of the bonds (except as otherwise permitted by the Act, the laws of the State or the Fiscal Agent Agreement), or reduce the percentage of bonds required for the amendment hereof.
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The Fiscal Agent Agreement and the rights and obligations of the Authority and of the Owners may also be modified or amended at any time by a Supplemental Agreement, without the consent of any Owners, only to the extent permitted by law and only for any one or more of the following purposes:
(i) to add to the covenants and agreements of the Authority contained in the Fiscal Agent Agreement, other covenants and agreements thereafter to be observed, or to limit or surrender any right or power herein reserved to or conferred upon the Authority;
(ii) to make modifications not adversely affecting any outstanding series of bonds in any material respect;
(iii) to make such provisions for the purpose of curing any ambiguity, or of curing, correcting or supplementing any defective provision contained in the Fiscal Agent Agreement, or in regard to questions arising thereunder, as the Authority and the Fiscal Agent may deem necessary or desirable, and which shall not adversely affect the rights of the Owners of the bonds; and
(iv) to make such additions, deletions or modifications as may be necessary or desirable to assure compliance with Section 148 of the Tax Code relating to required rebate of excess investment earnings to the United States or otherwise as may be necessary to assure exclusion from gross income for federal income tax purposes of interest on the bonds or to conform with the temporary and permanent regulations promulgated under the Tax Code.
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DEBT SERVICE SCHEDULE
The annual debt service on the Bonds, based on the interest rates and maturity schedule set forth on the cover of this Official Statement, is set forth below.
Table 2
West Patterson Financing Authority
Community Facilities District No. 2005-1 (West Patterson Business Park) Special Tax Bonds Series 2026
Debt Service
Year Ending
(Sept. 1) Principal Interest Total
2015 Bonds
Debt Service
2021 Bonds
Debt Service
2015, 2021 &
2026 Bonds
Total
2026 $560,544 $282,188
2027 568,569 291,738
2028 580,769 296,063
2029 592,169 300,275
2030 607,475 304,375
2031 616,425 313,363
2032 629,525 322,125
2033 641,181 325,663
2034 656,744 329,088
2035 665,994 342,400
2036 684,150 343,800
2037 695,250 355,000
2038 710,000 360,600
2039 723,175 365,800
2040 739,775 375,600
2041 754,575 379,800
2042 767,575 388,600
2043 783,775 396,800
2044 797,950 409,400
2045 815,100 416,200
2046 0 1,252,400
2047 0 1,279,800
2048 0 1,304,400
2049 0 1,331,200
2050 0 0
2051 0 0
2052 0 0
2053 0 0
2054 0 0
2055 0 0
2056 0 0
________________
Source: Underwriter.
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THE AUTHORITY
The following information relating to the Authority is included only for the purpose of supplying general information regarding the Authority. The Bonds are not payable from any of the Authority’s revenues or assets other than the Special Tax Revenues and amounts specifically pledged therefor under the Fiscal Agent Agreement.
The Authority was established as a joint exercise of powers authority pursuant to Section 6500, et seq., of the California Government Code (the “Joint Powers Act”) and a Joint Exercise of Powers Agreement, by and between the City and the former Redevelopment Agency of the City, dated June 5, 2001. The Authority is authorized, among other things, to provide financing for public capital improvements and working capital for the City and the former Redevelopment Agency, and to purchase obligations of local agencies, all as authorized by the Joint Powers Act. The Authority is governed by a five-member Board, which is comprised of the individuals who also act as members of the City Council of the City.
THE SPECIAL TAX BONDS ARE PAYABLE SOLELY FROM THE PROCEEDS OF THE
SPECIAL TAX TO BE LEVIED ANNUALLY ON TAXABLE PROPERTY IN THE DISTRICT AND AMOUNTS IN CERTAIN FUNDS ESTABLISHED UNDER THE FISCAL AGENT AGREEMENT.
NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE CITY, THE
AUTHORITY, THE STATE OR ANY OTHER POLITICAL SUBDIVISION THEREOF (OTHER
THAN OF THE AUTHORITY FOR THE DISTRICT, TO THE LIMITED EXTENT SET FORTH IN
THE FISCAL AGENT AGREEMENT) IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON THE BONDS. THE BONDS ARE NOT SECURED
BY A LEGAL OR EQUITABLE PLEDGE OF OR CHARGE, LIEN OR ENCUMBRANCE UPON
ANY OF THE PROPERTY OF THE AUTHORITY, EXCEPT AS SET FORTH IN THE FISCAL AGENT AGREEMENT; AND THE PAYMENT OF THE DEBT SERVICE ON THE BONDS IS NOT A GENERAL DEBT, LIABILITY OR OBLIGATION OF THE AUTHORITY OR THE CITY.
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THE DISTRICT
Location and Description of the District
General. The District is located in the City, which lies in the Central Valley of the State, approximately 90 miles southeast of San Francisco and 90 miles south of Sacramento. The City is located on State Route 33, adjacent to U.S. Interstate 5 and approximately 18 miles southwest of Modesto. Interstate 5 is a major north-south freeway that travels to Sacramento and Redding to the north, before continuing on into Oregon, Washington and eventually Canada. To the south, Interstate 5 provides access to the metropolitan areas of Los Angeles and San Diego, before terminating at the Mexico border. State Highway 99 is also located in reasonable proximity to the City and generally parallels Interstate 5, providing access to Sacramento to the north, and Fresno and Bakersfield to the south, before merging with Interstate 5 at the Grapevine.
To the west of and abutting the District is the West Patterson Financing Authority Community Facilities District No. 2015-1 (Arambel-KDN), a business park area that was created by the Authority in June 2015, currently comprising one parcel presently occupied by Restoration Hardware for warehousing and distribution. Community Facilities District No. 2015- 1 was formed with an adjacent future annexaton area and undeveloped land therein is available and anticipted to be used for similar commercial uses in the future, at which time it may be annexed into Community Facilities District No. 2015-1.
Master Development Plan. A master development plan entitled, “The West Patterson Business Park Master Development Plan” was adopted by the City and County in 2003. This plan related to property in the District and in the future annexation area, and covered approximately 814 acres. The master development plan established various categories of recommended land use for such property. Of these 814 acres, 772 acres were recommended for light industrial uses, 34 acres were recommended for highway commercial uses and the remaining 8 acres were recommended were public uses (including a fire station and Caltrans work yard). A copy of The West Patterson Business Park Master Development Plan is available from the Authority at 1 Plaza, Patterson, California 95363.
Land in the District is sometimes referred to as the “West Patterson Business Park.” The West Patterson Business Park is a partially developed business park currently occupied by Amazon, Kohls, CVS, ________ and others, primarily as tenants utilizing the parcels for warehouse and distribution activities, and to a lesser extent, commercial office uses. The site was incorporated into the City in 2005, and consists of both developed parcels and undeveloped land available for further subdivision and development.
Boundaries of CFD and Future Annexation Area. A map showing the current boundaries of the District, as well as the remaining parcels in the future annexation area, is shown on the following page. In accordance with the Resolution of Formation, parcels within the future annexation area will be annexed into the District (and become subject to the Special Tax) only with the unanimous approval of the owner or owners of each parcel at the time of the proposed annexation, without any requirement for further public hearings or proceedings.
Various annexations into the District have occurred since formation, and additional annexations are anticipated as undeveloped parcels within the future annexation area are conditioned, as part of their development process, to annex into the District.
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[Reserved for boundary map]
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Development in the District
Overview. Parcels in the District and subject to the Special Tax securing the Bonds are comprised of various developed parcels that are owned by private entities (some of which are owner-occupied and others of which are leased); there are also certain undeveloped parcels in the District not yet subject to the Special Tax given their current development status. CVS Health (owner of Assessor’s Parcel Number 021-085-021) and Kohls Department Stores (owner of Assessor’s Parcel Number 021-085-014) have prepaid their Special Tax obligations in full.
See “OWNERSHIP OF PROPERTY IN THE DISTRICT” below.
Building Permits. The following table sets forth the number of building permits issued in the District over the years indicated.
Table 3
West Patterson Financing Authority
Community Facilities District No. 2005-1 (West Patterson Business Park) Building Permits Issued
Fiscal Year 2005-06 through 2026-27
Fiscal
Year
Number of
Building
Permits
Issued (1)
Total
Building
Permits Issued
2005-06 2 2
2006-07 6 8(2)
2007-08 0 8
2008-09 1 9
2009-10 0 9
2010-11 1 10
2011-12 0 10
2012-13 0 10
2013-14 1 11(3)
2014-15 0 11
2015-16 0 11
2016-17 0 11
2017-18 0 11
2018-19 3 14
2019-20 3 17
2020-21 2 19
2021-22 1 20
2022-23 2 22
2023-24 3 25
2024-25 0 25
2025-26 3 28
2026-27 2 30
(1) Building permits are counted in the first fiscal year in which they would trigger a Developed Property classification pursuant to the RMA. Does not include building permits issued on parcels owned by public agencies as of 2025-26. (2) Includes building permits issued for parcels 021-085-014-000 and 021-085-021- 000, both of which have prepaid their special tax obligation. (3) Includes one permit issued for construction on parcels 021-026-058-000 and 021-026-059-000.
Sources: City of Patterson, Goodwin Consulting Group, Inc.
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Backbone Infrastructure. The City has undertaken responsibility for construction of the majority of infrastructure improvements and other costs in the District. The majority of the basic (sometimes referred to as “backbone”) infrastructure has been completed in the District (including major roads and offsite improvements) and an approved tentative map has been put into place for most of the parcels in the District. These improvements include the major streets, sidewalks, water, sewer, drainage, concrete curb, gutter and paving in the District.
Infrastructure construction to facilitate the existing development began in July 2004.
Infrastructure to facilitate additional development is planned to proceed as market conditions warrant. Proceeds of the 2026 Bonds and any Additional Bonds will provide a portion of the cost of Improvements and the remainder will be contributed by the landowners, fees or other sources available to the City. See “–Estimated Cost of the Improvements” below. Bonds for the District are expected to be issued in multiple series as development progresses.
Zoning. All of the property in the District has all land use entitlements necessary for development of property to be used as permitted by the applicable zoning.
The land in the District is zoned IL-West Patterson Light Industrial District and West Patterson Industrial Business Park (“WPIBP”). According to the City of Patterson Municipal Code, the West Patterson Light Industrial Zone is consistent with the Light Industrial land use designation of the City’s general plan. The IL zoning district is applied to areas appropriate for light industrial and manufacturing, warehousing, offices, and assembly uses. The WPIBP district is applied to areas appropriate for light industrial and business park land uses, including low-intensity manufacturing and assembly processes, research and development, corporate headquarters, offices, medical and health facility uses, and other similar uses. The land uses allowed and development standards required within the WPIBP district are intended to protect adjacent areas from impacts while allowing indoor, clean, and quiet industry. Land uses in the WPIBP zoning district are often organized as a business park, with tenants that may include some commercial and office activities. The WPIBP zoning district is consistent with the light industrial land use designation of the City’s general plan.
Utilities. All typical urban utility services for land in the District are available at the lots in the District, or will be extended to the lots. These utilities include electric power, natural gas, telephone, cable television, water, refuse, sanitary sewer and storm water facilities. The City provides water, refuse, sanitary sewer, and storm water facilities, and police and fire services.
The Turlock Irrigation District provides electricity to the District. Pacific Gas & Electric provides natural gas. Telecommunications are provided by Frontier Communications.
Environmental Matters
Flood Hazard Map Information. According to the Federal Emergency Management Agency’s flood insurance rate maps (Community-Panel Number 06099C-0731E, with an effective date of September 26, 2008), property in the District is located within Flood Zone X, described as areas of minimal flooding (outside of the 100 and 500-year floodplains).
Wetland Conditions. According to the City’s planning department, development of land in the District does not affect wetland development or require any permits related to wetlands.
Seismic Conditions. According to the Seismic Safety Commission, property in the District is located within Zone 3, which is considered to be the lowest risk zone in California.
There are only two zones in California: Zone 4, which is assigned to areas near major faults;
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and Zone 3, which is assigned to all other areas of more moderate seismic activity. In addition, property in the District is not located in a Fault-Rupture Hazard Zone (formerly referred to as an Alquist-Priolo Special Study Zone), as defined by Special Publication 42 (revised January 1994) of the California Department of Conservation, Division of Mines and Geology.
Wildfire Risks. The Fire and Resource Assessment Program of CAL FIRE has classified areas of the subject’s County by Fire Hazard Severity Zone. A portion of the District along Interstate 5 has been classified as an area of concern.
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OWNERSHIP OF PROPERTY IN THE DISTRICT
Unpaid Special Taxes do not constitute a personal indebtedness of the owners of the property within the District. There is no assurance that the present property owners or any subsequent owners will have the ability to pay the Special Taxes or that, even if they have the ability, they will choose to pay the Special Taxes. An owner may elect to not pay the Special Taxes when due and cannot be legally compelled to do so. Neither the Authority nor any Bond Owner will have the ability at any time to seek payment directly from the owners of property within the District of the Special Tax or the principal or interest on the Bonds, or the ability to control who becomes a subsequent owner of any property within the District.
Owners and/or developers of certain of the properties in the District have provided certain of the information set forth in this section. No assurance can be given that all information is complete. In addition, any Internet addresses included below are for reference only, and the information on those Internet sites is not a part of this Official Statement or incorporated by reference into this Official Statement.
No assurance can be given that development of the undeveloped property within the District will be completed, or that it will be completed in a timely manner. The Special Taxes are not personal obligations of the current owners of land in the District or of any subsequent landowners; the Bonds are secured only by the Special Taxes and moneys available under the Fiscal Agent Agreement. See “SECURITY FOR THE BONDS” and “SPECIAL RISK FACTORS” herein.
The pace of sales of undeveloped parcels in the District will be determined by the owners of such undeveloped parcels, largely by market conditions and demand for lots for commercial, light industrial and office uses.
Ownership of Developed and Undeveloped Property in the District The developed parcels located in the District that are subject to the Special Tax, as well as the undeveloped parcels located in the District that may be subject to the Special Tax in the future, are as set forth on the following pageas follows.
Developed Parcels. Special Taxes are levied only on parcels of Developed Property within the District. Information about certain owners of Developed Property follows below and is is derived from sources considered by the Authority to be reliable but is not guaranteed as to accuracy or completeness.
BIT Holdings Seventy-Seven Inc. (Amazon.com, Inc.) The two parcels owned by BIT Holdings Seventy-Seven Inc. have been developed into an Amazon Fulfillment Center that stretches across two Assessor’s Parcels. The building square footage has been assigned to parcel 021-026-059-000 exclusively. BIT Holdings Seventy-Seven Inc. is a limited purpose entity that owns the two parcels that are leased to Amazon.
Amazon.com, Inc. was incorporated in 1994 in the state of Washington and reincorporated in 1996 in the state of Delaware. Its principal corporate offices are located in Seattle, Washington, and its common stock is listed on the NASDAQ Global Select Market under the symbol “AMZN.” Amzon.com, Inc. is subject to the informational requirements of the Securities Exchange Act of 1934, as amended, and in accordance therewith files reports, proxy statements and other information with the SEC. Such filings, particularly the Annual Report on
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Form 10-K and its most recent Quarterly Report on Form 10-Q, may be inspected and copied at the public reference facilities maintained by the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. Such files can also be accessed over the Internet at the SEC’s website at www.sec.gov. Copies of such material can be obtained from the public reference section of the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. In addition, the aforementioned material may also be inspected at the office of the NASDAQ, One Liberty Plaza, 165 Broadway, New York, New York 10006. Additionally, Amazon, Inc. provides investor relations information on its website.
For further information on Amazon, see its Internet homepage for investors located at https://ir.aboutamazon.com/overview/default.aspx. The website address is given for reference and convenience only, and the information on the website may be incomplete or inaccurate and has not been reviewed by the Authority or the Underwriter. Nothing on this website is a part of this Official Statement or incorporated into this Official Statement by reference.
W.W. Grainger, Inc. The parcel owned by W.W. Grainger, Inc. is used as a distribution center by the company. W.W. Grainger, Inc., incorporated in Illinois in 1928, is a broad-line distributor of maintenance, repair and operating supplies and other related products and services used by businesses and institutions primarily in the United States and Canada, with presence also in Europe, Asia and Latin America. Grainger uses a combination of multichannel and single channel online business models to provide customers with a range of options for finding and purchasing products, utilizing sales representatives, contract centers, direct marketing materials, catalogs and eCommerce. Grainger serves more than 3 million customers worldwide. Its stock trades under the symbol “GWW” on the NYSE.
W.W. Grainger, Inc. is subject to the informational requirements of the Securities Exchange Act of 1934, as amended, and in accordance therewith files reports, proxy statements and other information with the SEC. Such filings, particularly the Annual Report on Form 10-K and its most recent Quarterly Report on Form 10-Q, may be inspected and copied at the public reference facilities maintained by the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. Such files can also be accessed over the Internet at the SEC’s website at www.sec.gov. Copies of such material can be obtained from the public reference section of the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. In addition, the aforementioned material may also be inspected at the office of the NYSE at 20 Broad Street, New York, New York 10005. Additionally, W.W. Grainger, Inc. provides investor relations information on its website.
For further information on W.W. Grainger, Inc., see its Internet homepage located at www.grainger.com. The website address is given for reference and convenience only, and the information on the website may be incomplete or inaccurate and has not been reviewed by the Authority or the Underwriter. Nothing on this website is a part of this Official Statement or incorporated into this Official Statement by reference.
Westcore Alpha Patterson LLC (Pacific Distribution Center). The parcel owned by Westcorer Alpha Patterson LLC is known as the “Pacific Distribution Center,” a Class A, 712,000-square-foot warehouse distribution center at 400 Park Center Drive in the City. It was purchased by Westcore Alpha Patterson LLC from Keystone Corporation in 2018. Westcore Alpha Patterson LLC, is a special-purpose limited liablilty company owned by Westore Properties, a real estate investment company headquartered in Irvine, California. Westcore Properrties was founded in 2000 by Marc Brutten and, since that time, has been involved in more than $6 billion of real estate transactions. For further information on Westcore Properties,
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see its Internet homepage located at https://www.westcore.net/about-us/. The website address is given for reference and convenience only, and the information on the website may be incomplete or inaccurate and has not been reviewed by the Authority or the Underwriter.
Nothing on this website is a part of this Official Statement or incorporated into this Official Statement by reference.
LBA RV-Company XVII LP (Platt Electric Distribution Center). The parcel owned by LBA RV-Company XVII LP is being used as the Platt Electric Distribution Center located at 2701 Keystone Pacific Parkway in the City. LBA RV-Company XVII LP is a limited purpose entity that owns the two parcels that are leased to Platt.
Platt is a value-added service company that supplies a broad range of products and services to the utility, industrial, electrical, construction, solar, datacomm/security and commercial markets. The company was founded by Isadore and Morrie Platt in 1953, and today serves customers throughout the western United States from a network of over 136 full service stocking locations and distribution centers in Salt Lake City, Utah, Beaverton, Oregon, and Patterson, California. For further information on Platt, see its Internet homepage located at https://www.platt.com. The website address is given for reference and convenience only, and the information on the website may be incomplete or inaccurate and has not been reviewed by the Authority or the Underwriter. Nothing on this website is a part of this Official Statement or incorporated into this Official Statement by reference.
Pilot Travel Centers LLC. The parcel owned by Pilot Travel Centers LLC is operated as a Pilot/Flying J gas station/convenience store. Pilot Flying J is the largest operrator of travel centers in North America, with more than 750 locations in 44 states and 6 Canadian provinces.
Headquartered in Knoxville, Tennessee, the company employs more than 28,000 people. The first Pilot gas station opened in Gate City, Virginia in 1958. The company’s CEO is Jimmy Haslam and it serves more than 1.6 million guests per day. For further information on Pilot Flying J, see its Internet homepage located at https://www.pilotflyingj.com. The website address is given for reference and convenience only, and the information on the website may be incomplete or inaccurate and has not been reviewed by the Authority or the Underwriter.
Nothing on this website is a part of this Official Statement or incorporated into this Official Statement by reference.
GEA Mechanical Equipment US Inc. GEA Mechnical Equipment US Inc. is a United States affiliate of GEA Group AG, which is headquarted in Germany. GEA Group AG is a supplier for the food processing industry and generated consolidated sales of approximately EUR 4.5 billion in 2014. Its stock trades on the Deutsche Borse Xetra trading system. For further information on GEA Group AG, see its Internet homepage for investors located at http://www.gea.com/global/en/investor-relations/index.jsp. The website address is given for reference and convenience only, and the information on the website may be incomplete or inaccurate and has not been reviewed by the Authority, or the Underwriter. Nothing on this website is a part of this Official Statement or incorporated into this Official Statement by reference.
525 Baldwin LLC and Keystone Flex II Associates LLC (HPL Contract). The two sites owned by 525 Baldwin LLC and single site owned by Keystone Flex II Associates LLC in the District are leased to HPL Contract, which has an office at 525 Baldwin Road in the City. HPL Contract provides office furniture to customers, including a benching system, private offices, reception areas and workstations, conference rooms and training rooms and tables. HPL Contract is privately held. For further information on HPL Contract, see its Internet homepage
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located at http://www.hplcontract.com. The website address is given for reference and convenience only, and the information on the website may be incomplete or inaccurate and has not been reviewed by the Authority, the District or the Underwriter. Nothing on this website is a part of this Official Statement or incorporated into this Official Statement by reference.
Loves Country Stores of California Inc. The parcel owned by Loves Country Stores of California Inc. is developing into a Love’s Travel Center. Loves is a privately-held travel stop owner/operator that is based on Oklahoma City, Oklahoma. It was founded in 1964 and since that time, has grown to operate morer than 560 travel stops and country stores in 41 states. It has 33,000 employees. For further information on Loves, see its Internet homepage located at https://www.loves.com/en/news/media-resources. The website address is given for reference and convenience only, and the information on the website may be incomplete or inaccurate and has not been reviewed by the Authority or the Underwriter. Nothing on this website is a part of this Official Statement or incorporated into this Official Statement by reference.
Valley Property and Equipment Rental Inc. This parcel is operated as an equipment rental business, with a mailing address of 515 Keystone Boulevard in the City. To the Authority’s knowledge, this is a privately-held corporation.
John J & Brenda J Ramos (West Side Storage). The three developed parcels owned by John and Brenda Ramos in the District are operated as West Side Storage with a mailing address of 167 Baldwin Road in the City. West Side Storage has three locations in the City.
MKMG – Keystone LLC (Innovative Dialysis of Patterson). This parcel is operated as a dialysis clinic with the name of Innovative Dialysis of Patterson. To the Authority’s knowledge, both MKMG – Keystone LLC and Innovative Dialysis of Patterson are privately-held entities.
Others. To the Authority’s’ knowledge, the parcels owned by Gill Hospitality LLC, El Central Corner Petroleum LLC, and Kashmir Singh Hundal are being used as a Hampton Inn, Arco AM/PM gas station, and truck wash & lube business, respectively.
Undeveloped Parcels. There are 13 undeveloped parcels in the District, __ of which are owned by John and Brenda Ramos, local owners/developers in the City, 3 of which are owned by the Developer, and one of which is owned by a public agency (Yosemite Community College District). Undeveloped Property in the District is not subject to the Special Tax unless and until it becomes Developed Property. Thus, none of these undeveloped parcels are currently subject to the levy of the Special Tax. Information about the owners of certain of these undeveloped parcels summarized below is derived from sources considered by the Authority to be reliable but is not guaranteed as to accuracy or completeness.
Keystone Pacific Business Park LLC. Keystone Pacific Business Park LLC is a North Carolina limited liability company, and affiliate of Keystone Corporation. Founded in 1979, Keystone Corporation is an international real estate developer headquartered in Raleigh, North Carolina that specializes in the acquisition, development, leasing and management of a range of commercial and residential properties. With over 35 years of experience, Keystone Corporation has built properties in seven states and five countries. The company has developed over 6 million square feet of commercial business parks, over 7,000 single-family lots, 1.5 million square feet of Class A luxury apartments, as well as 650,000 square feet of townhome and condominium communities.
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For further information on Keystone Corporation, see its Internet homepage located at www.keystonecorporation.com. The website address is given for reference and convenience only, and the information on the website may be incomplete or inaccurate and has not been reviewed by the Authority, or the Underwriter. Nothing on this website is a part of this Official Statement or incorporated into this Official Statement by reference.
S2A Investments 2 LLC (S2
A Modular). The parcel owned by S2A Investments 2 LLC is developing into a building to be used by S2A Modular for its modular buildings. It plans to build residential and commercial structures from “megafactories” to be constructed in 35 sites across the United States. John Rowland is the president and co-founder of by S2 A Modular. For further
information on S2
A Modular, see its Internet homepage located at https://www.s2amodular.com.
The website address is given for reference and convenience only, and the information on the website may be incomplete or inaccurate and has not been reviewed by the Authority or the Underwriter. Nothing on this website is a part of this Official Statement or incorporated into this Official Statement by reference.
Ownership of Property in Future Annexation Area
In addition to the 13 undeveloped parcels in the District, there are a number of parcels in the future annexation area. Parcels in the future annexation area are not subject to the Special Tax unless and until they are annexed into the District and are issued under a building permit by the City.
The land currently located in the future annexation area totals approximately 338.8 acres, and is currently owned by various individuals and/or entities. Owners of land in the future annexation area are currently offering parcels of land in the future annexation area for sale to third parties that may want to purchase the land to occupy themselves or lease to others. This is expected to be done in sizes of property similar to the parcels that are currently in the District.
Final mapping of any parcels to be sold by owners of land in the future annexation area to any third party will occur in connection with the closing of the sale of such property. Representatives of owners of land in the future annexation area represent that the time between the signing of a purchase contract for land in the future annexation area to the closing of such transaction (including the availability of a final map for such land) is expected to be 60 to 180 days.
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VALUE OF PROPERTY WITHIN THE DISTRICT
Assessed Valuations
In connection with valuing property in the District, the Authority has obtained the 2026-27 County assessed valuation (the “Assessed Valuation”) of the property in the District. The “full cash” assessed values of all of the taxable parcels in the District as of the FY 2026-27 Special Tax Levy (excluding Taxable Public Property) has been established by the County Assessor for Fiscal Year 2025-26 in the amount of $447,030,375.
The following table summarizes the historical assessed valuation of taxable parcels in the District since the formation of the District.
Table 5
West Patterson Financing Authority
Community Facilities District No. 2005-1 (West Patterson Business Park) Annual Assessed Valuation Totals
Fiscal Year 2005-06 through 2025-26 (1)
Fiscal
Year
Number of
Taxable
Parcels
Total
Assessed
Value % Change
2005-06 3 $4,860,300 N/A
2006-07 11 8,749,100 80.0%
2007-08 10 9,170,381 4.8
2008-09 11 13,933,340 51.9
2009-10 11 35,901,730 157.7
2010-11 12 46,710,939 30.1
2011-12 11 69,572,734 48.9
2012-13 11 135,412,974 94.6
2013-14 13 136,042,981 0.5
2014-15 13 191,300,590 40.6
2015-16 12 198,999,616 4.0
2016-17 (2) 12 177,472,268 (10.8)
2017-18 11 208,286,569 17.4
2018-19 14 227,075,424 9.0
2019-20 17 286,665,090 26.2
2020-21 19 301,572,698 5.2
2021-22 20 303,336,097 0.6
2022-23 21 316,570,327 4.4
2023-24 24 336,037,985 6.1
2024-25 25 368,688,551 9.7
2025-26 (3) 31 448,255,418 21.6
(1) Does not include taxable parcels which were owned by public agencies as of January 1 of each fiscal year, Undeveloped Property upon which the Special Tax is not levied under the Special Tax Formula, or prepaid parcels.
(2) The County did not assess any "other value" on parcel 021-085-028 in fiscal year 2016-17. (3) Includes the three additional parcels annexed into the CFD after the FY2025-26 tax roll submission. The three parcels have a total 2025-26 assessed value of $1,225,043.
Sources: Stanislaus County Assessor’s Office, Goodwin Consulting Group, Inc.
Due to the ongoing nature of development in the District, the County assessed valuations are not in all cases reflective of most current development status, as is the case with certain properties in the District. As provided by Article XIIIA of the State Constitution, county assessors’ assessed values are to reflect market value as of the date the property was last
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assessed (or 1975, which ever is more recent), increased by a maximum of 2% per year.
Properties may be reassessed by the County only upon a change of at least 51% ownership of existing property or upon new construction. The assessed values of parcels in the District thus reflect, for undeveloped parcels, the estimate of the County Assessor (the “Assessor”) of market value when acquired (or 1975, whichever is later), possibly increased by 2% per year, and for parcels on which construction has occurred since their date of acquisition, the Assessor’s estimate of market value as of the time of construction, possibly increased by 2% per year. The actual market value of parcels in the District, if sold at foreclosure, may be higher or lower than the Assessor’s assessed values, depending upon the date of the Assessor’s most recent assessment. The actual fair market value of any parcel can often be more accurately established through an arms-length sale or an appraisal by an independent appraiser.
Because of the general limitation to 2% per year in increases in full cash value of properties which remain in the same ownership, the County tax roll does not reflect values uniformly proportional to actual market values. No assurance can be given that should a parcel with delinquent Special Taxes be foreclosed and sold for the amount of the delinquency, that any bid will be received for such property, or if a bid is received that such bid will be sufficient to pay such delinquent installments.
Appraisal
General. In addition to obtaining the Assessed Valuation, to comply with internal policies and in order to provide a more accurate valuation of the parcels within the District that recently developed, the Authority orderered an appraisal. The six noncontiguous parcels (together, “Appraised Parcels”) with various improvements comprising the property appraised are summarized in the following table.
Assessor’s
Parcel Number
(APN) Owner Improvements
Buildering
Area
Land Area
(Acres) Zoning
021-088-007 Patterson Unified School District Industrial Condo with 100% office build out 10,655 0.89 LI 021-093-002 Eagle Valley Investments Vacant land - proposed McDonalds -- 1.74 GC 021-093-012 MDHE Enterprises LLC Truck Terminal - Oak Harbor Frieght 19,564 10.05 GC 021-093-014 Patterson Center LLC Drive thru retail - Dutch Bros 862 0.50 GC 021-095-010 S2A Investments 2 LLC Industrial manufacturing 102,073 26.53 LI 021-098-011 Apricot World Properties LLC Under Construction - Retail Office 9,832 1.64 GC Total - City of Patterson CFD No. 2005-1 (ptn.) 41.35
Integra Realty Resources, Sacramento, California (the “Appraiser”) prepared an appraisal report with a date of value of March 15, 2026, for the Appraised Parcels (the “Appraisal”). The Appraisal was prepared at the request of the Authority.
Value Estimate. Based on the valuation analysis in the accompanying Appraisal Report, and subject to the hypothetical condition, definitions, assumptions, and limiting conditions expressed in the report, the concluded opinions of value for the Appraised Parcels, as of the date of value, is as follows:
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Assessor’s
Parcel Number
(APN) Owner
Conclusion of
Value
021-088-007 Patterson Unified School District $2,080,000 021-093-002 Eagle Valley Investments 1,890,000
021-093-012 MDHE Enterprises LLC 15,760,000
021-093-014 Patterson Center LLC 2,230,000
021-095-010 S2A Investments 2 LLC 8,500,000
021-098-011 Apricot World Properties LLC 930,000
$31,390,000
The Appraisal is set forth in its entirety in APPENDIX C, which includes more detailed descriptions of the Appraised Parcels. The description herein of the Appraisal is intended for limited purposes only; the Appraisal should be read in its entirety. The conclusions reached in the Appraisal are subject to certain assumptions and qualifications which are set forth in the Appraisal.
The combined estimated value of the properties in the District using the assessed valuation for a portion of the properties and the appraised value for other properties is as follows:
Parcels Source of Valuation
Conclusion of
Value
Assessed Value Parcels (1) FY 2025-26 Assessed Value $439,734,981 Appraised Parcels (2) Appraisal 29,310,000
TOTAL $469,044,981
(1) Does not include taxable parcels which were owned by public agencies, Undeveloped Property upon which the Special Tax is not levied under the Special Tax Formula, or prepaid parcels. (2) Does not include school district parcel which was appraised.
Assumptions and Limiting Conditions. In considering the estimate of market value evidenced by the Appraisal, the Appraisal is based upon a number of standard and special assumptions which affect the estimates as to value, some of which include the following:
• No responsibility is assumed for the legal description provided or for matters pertaining to legal or title considerations. Title to each Appraised Parcel is assumed to be good and marketable unless otherwise stated in the Appraisal. • Each Appraised Parcel is appraised free and clear of any or all liens or encumbrances unless otherwise stated in the Appraisal.
• The Appraiser has assumed that there is no hazardous material on or in the Appraised Parcels that would cause a loss in value.
See “APPENDIX C – The Appraisal” for a description of all of the assumptions and qualification made by the Appraiser.
Because the Appraiser arrived at an estimate of current market value of each Appraised Parcel based upon certain assumptions which may or may not be fulfilled, no assurance can be given that should any Appraised Parcel become delinquent due to unpaid Special Taxes, and be foreclosed upon and offered for sale for the amount of the delinquency, that any bid would be received for such property or, if a bid is received, that such bid would be sufficient to pay such delinquent Special Taxes.
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Exposure Time and Marketing Time. Exposure time is the period a property interest would have been offered on the market prior to the hypothetical consummation of a sale at market value on the effective date of the Appraisal. In attempting to estimate a reasonable exposure time for the Appraised Parcels, the Appraiser looked at both the historical exposure times of a number of sales, as well as current and past economic conditions. According to the Appraisal, a transfer of comparable projects in the region typically occurs within 12 months of exposure, and it is estimated the exposure time for each Appraised Parcel would have been within 12 months of initial exposure.
Marketing time reflects the time it might take to sell an interest in real property at its estimated market value during the period immediately after the effective date of the Appraisal.
According to the Appraisal, market participants, local commercial real estate brokers and developers indicate that, if appropriately priced, each Appraised Parcel could be marketed within a 12-month time frame. Further, it is the opinion of the Appraiser that there is no indication potential marketing times should differ significantly from historical exposure times.
Consequently, the Appraisal states that a marketing time equal to the previously concluded exposure time of 12 months is considered reasonable for the subject property, assuming appropriate pricing and a professional marketing strategy.
No assurance can be given that the estimated exposure time or marketing time assumed for purposes of the Appraisal will or could be achieved or attained over an extended period of time; real estate is cyclical in nature, and it is impossible to accurately forecast and project specific demand over a projected period. See “SPECIAL RISK FACTORS – Property Values and Property Development.”
Limitations of Appraisal Valuation. No assurance can be given that the valuation of the Appraised Parcels set forth in the Appraisal can or will be maintained during the period of time that the Bonds are outstanding in that the Authority has no control over the market value of the Appraised Parcels or the amount of additional indebtedness that may be issued in the future by other public agencies, the payment of which, through the levy of a tax or an assessment, may be on a parity with the Special Taxes. See “–Overlapping Liens and Priority of Lien” below.
For a description of certain risks that might affect the assumptions made in the Appraisal, see “SPECIAL RISK FACTORS” herein.
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Projected Special Tax Levy by Owner
The following table lists the projected owners of land in the District subject to Special Taxes in the District, based on the projected Special Tax levy for Fiscal Year 2026-27.
Table 6
West Patterson Financing Authority
Community Facilities District No. 2005-1 (West Patterson Business Park) Summary of Projected FY 2026-27 Tax Levy by Owner (1)
Owner
No. of
Taxable
Parcels
Total
Acres
Total
Building
Sq. Ft.
Projected
FY 2026-27
Special Tax
Levy (2)
Percent of
Projected
FY 2026-
27 Special
Tax Levy
FY 2026-27
Total
Combined
Value (3)
BIT HOLDINGS SEVENTY-SEVEN INC 2 55.00 1,015,740 $300,628 18.3% $87,601,021 GILL HOSPITALITY LLC 1 1.77 50,161 9,675 0.6% 10,525,069 PMRN INC 1 1.17 6,180 6,395 0.4% 7,690,440
LBA RV-COMPANY XVII LP 1 28.41 529,970 155,288 9.5% 33,634,645 W W GRAINGER INC 1 45.99 800,358 251,370 15.3% 102,481,928 ROGERS ROAD LLC 1 43.36 819,938 237,004 14.4% 59,131,012 GEA MECHANICAL EQUIPMENT US INC 1 2.22 23,875 12,134 0.7% 3,153,090 525 BALDWIN LLC 2 2.83 37,954 15,469 0.9% 3,895,379
KEYSTONE PARK LLC 1 1.70 16,647 9,292 0.6% 2,706,079
MKMG - KEYSTONE LLC 1 0.66 8,903 3,608 0.2% 1,829,968
VALLEY PROPERTY AND EQUIPMENT
RENTAL INC 1 2.50 15,836 13,665 0.8% 1,913,875
WESTCORE ALPHA PATTERSON LLC 1 34.57 712,101 188,958 11.5% 63,961,103 EAGLE VALLEY INVESTMENTS 1 1.74 3,867 9,511 0.6% 1,890,000
LOVES COUNTRY STORES OF
CALIFORNIA INC 1 14.29 23,000 78,109 4.8% 25,774,058
RPG PROPERTIES LLC 1 0.63 4,100 3,444 0.2% 692,968
MDHE ENTERPRISES LLC 1 10.05 19,564 54,933 3.3% 15,760,000 PATTERSON CENTER LLC 2 2.49 19,935 13,610 0.8% 9,338,069 PILOT TRAVEL CENTERS LLC 1 11.30 14,636 61,765 3.8% 13,416,635 ROSANA HOLDINGS LLC 1 0.52 2,306 2,842 0.2% 942,472
HAMEN EXPRESS LLC 1 2.00 16,629 10,932 0.7% 3,212,592
S2A INVESTMENTS 2 LLC 1 26.53 102,073 145,012 8.8% 8,500,000 APRICOT WORLD PROPERTIES LLC 1 1.64 9,832 8,964 0.5% 930,000 INDIVIDUAL OWNER 6 9.16 0 50,068 3.0% 10,064,578
Total 31 300.53 4,253,605 $1,642,675 100.0% $469,044,981 (1) Does not include parcels 021-088-004, 021-088-007, 021-088-009, and 021-088-010, which are taxable, but owned by public agencies as of FY 2025-26.
(2) Assumes that WPFA will levy the Maximum Special Tax on all Taxable Parcels in Fiscal Year 2026-27. (3) Reflects the appraised values for parcels 021-093-002, 021-093-012, 021-093-014, 021-095-010, and 021-098-011, and the FY 2025-26 assessed value for all other parcels.
Sources: Stanislaus County Assessor's Office, Goodwin Consulting Group, Inc., Integra Realty Resources
8.3 Packet Pg. 579
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Special Tax Collection and Delinquency Rate
The following table shows annual Special Tax levies and amounts delinquent for the fiscal years indicated. Delinquencies in the payment of the Special Taxes with respect to property in the District could result in draws on the Reserve Fund established, and perhaps, ultimately, a default in the payment on the Bonds. See “SPECIAL RISK FACTORS.” Table 7
West Patterson Financing Authority
Community Facilities District No. 2005-1 (West Patterson Business Park) Special Tax Levy & Delinquencies
Fiscal Years 2009-10 through Fiscal Year 2025-26
As of the End of Each Fiscal Year As of September 15, 2021 Fiscal Year
Annual
Special
Tax Levied
Number of
Parcels
Levied
Number of
Delinquent
Parcels
Amount
Delinquent (1)
Percentage
Delinquent
Amount
Collected (1)
Remaining
Number of
Delinquent
Parcels
Remaining
Amount
Delinquent (1)
Remaining
Percentage
Delinquent
Remaining
Amount
Collected (1)
2009-10 $130,602 12 1 $6,787 5.2% $123,816 0 $0 0.0% $0 2010-11 274,699 13 1 6,922 2.5 267,777 0 0 0.0 0
2011-12 285,887 13 1 7,204 2.5 278,683 0 0 0.0 0
2012-13 291,604 13 0 0 0.0 291,604 0 0 0.0 0
2013-14 480,652 15 0 0 0.0 480,652 0 0 0.0 0
2014-15 505,495 15 0 0 0.0 505,495 0 0 0.0 0
2015-16 514,744 14 0 0 0.0 514,744 0 0 0.0 0
2016-17 525,039 14 2 12,275 2.3 512,764 0 0 0.0 0
2017-18 544,859 14 0 0 0.0 544,859 0 0 0.0 0
2018-19 703,039 17 1 6,069 0.9 696,970 0 0 0.0 0
2019-20 711,340 20 1 12,018 1.7 699,322 0 0 0.0 711,340 2020-21 719,256 22 1 11,968 1.7 707,288 0 0 0.0 719,256 2021-22 876,215 23 3 21,264 2.4 854,951 0 0 0.0 876,215 2022-23 1,029,578 25 1 9,505 0.9 1,020,072 1 9,505 0.9 1,020,072(2) 2023-24 1,269,998 28 2 78,625 6.2 1,191,373 1 10,301 0.8 1,259,697(2) 2024-25 1,295,398 29 2 149,888 11.6 1,145,510 1 10,507 0.8 1,284,891(2) 2025-26 1,610,305 32 N/A N/A N/A N/A 2 11,307 1.4% 793,846(2)(3) (1) Does not include penalties, interest, or fees.
(2) The County reports that parcel 021-095-009-000 is delinquent for fiscal years 2022-23, 2023-24, 2024-25, and the first installment of 2025-26. (3) Reflects only the unpaid taxes from the first installment of the fiscal year 2025-26 special tax levy.
Source: Stanislaus County Auditor-Controller’s Office, Goodwin Consulting Group, Inc.
8.3 Packet Pg. 580
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Value to Special Tax Burden Ratios
The value of the land within the District is a critical factor in determining the investment quality of the Bonds. If a property owner defaults in the payment of a Special Tax, the County’s only remedy is to foreclose on the delinquent property in an attempt to obtain funds with which to pay the delinquent Special Taxes. See “SECURITY FOR THE BONDS – Delinquent Payments of Special Tax; Covenant to Commence Superior Court Foreclosure” and “SPECIAL RISK FACTORS – Bankruptcy and Foreclosure Delays.” Reductions in District property values due to a downturn in the economy, natural disasters such as earthquakes or floods, stricter land use regulations or other events could have an adverse impact on the security for payment of the Special Taxes. The Special Tax is levied on each parcel within the District and only the respective individual parcel is responsible for its allocated Special Tax.
In comparing the value of the real property within the District and the principal amount of the Bonds, it should be noted that only the real property upon which there is a delinquent Special Tax can be foreclosed upon, and the real property within the District cannot be foreclosed upon as a whole to pay delinquent Special Taxes of the owners of such parcels within the District unless all of the property is subject to a delinquent Special Tax. In any event, individual parcels may be foreclosed upon separately to pay delinquent Special Taxes levied against such parcels.
The three parcels of Taxable Public Property in the District are subject to the Special Tax. The County assigns no assessed value to these properties and they have not been appraised. Accordingly, no valuation for them has been included in the total valuation of property in the District.
The Appraisal estimates the appraised value of the Appraised Parcels, subject to the conditions and assumptions stated therein, as described under “– Appraisal” above. In addition, the City has obtained the 2025-26 County assessed valuation of the other taxable property in the District. The combined value of property subject to the Special Tax, using the appraised value of the Appraised Parcels and the assessed value of all other taxable property, equals $469,044,981, which is approximately 18.3* times the $29,310,000* aggregate principal amount of the 2026 Bonds and outstanding 2015 Bonds and 2021 Bonds. These figures do not include Taxable Public Property. See “VALUE OF PROPERTY WITHIN THE DISTRICT.” Details regarding value-to-lien ratios in the District are shown in the table on the following page.
____________
* Preliminary; subject to change.
8.3 Packet Pg. 581
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Table 8
West Patterson Financing Authority
Community Facilities District No. 2005-1 (West Patterson Business Park) Value to Burden Ratios for Taxable Property(1)
Assessor's
Parcel
Number Acres
Building
Sq. Ft.
FY 2025-26
Land
Assessed
Value
Appraised
Value (3)
Combined
Value
Percent of
Projected
FY 2026-27
Special Tax
Levy
Percent of
Projected
FY 2026-27
Special Tax
Levy
Allocable
Bonds* (4)
Aggregate
Value-toBurden
Ratio*
021-026-058-000 21.22 0 $33,726,392 $0 $33,726,392 $115,988 7.1% $1,812,533 18.6 021-026-059-000 33.78 1,015,740 53,874,629 0 53,874,629 184,640 11.2 2,885,361 18.7 021-026-074-000 1.77 50,161 10,525,069 0 10,525,069 9,675 0.6 151,187 69.6 021-026-075-000 1.17 6,180 7,690,440 0 7,690,440 6,395 0.4 99,937 77.0 021-085-024-000 28.41 529,970 33,634,645 0 33,634,645 155,288 9.5 2,426,676 13.9 021-085-028-000 45.99 800,358 102,481,928 0 102,481,928 251,370 15.3 3,928,148 26.1 021-085-036-000 43.36 819,938 59,131,012 0 59,131,012 237,004 14.4 3,703,648 16.0 021-088-001-000 2.22 23,875 3,153,090 0 3,153,090 12,134 0.7 189,624 16.6 021-088-002-000 2.25 31,067 3,171,265 0 3,171,265 12,298 0.7 192,186 16.5 021-088-003-000 1.70 16,647 2,706,079 0 2,706,079 9,292 0.6 145,207 18.6 021-088-006-000 0.58 6,887 724,114 0 724,114 3,170 0.2 49,541 14.6 021-088-008-000 0.66 8,903 1,829,968 0 1,829,968 3,608 0.2 56,375 32.5 021-088-013-000 2.50 15,836 1,913,875 0 1,913,875 13,665 0.8 213,541 9.0 021-088-016-000 3.33 3,864 2,006,960 0 2,006,960 18,202 1.1 284,436 7.1 021-088-018-000 34.57 712,101 63,961,103 0 63,961,103 188,958 11.5 2,952,840 21.7 021-092-001-000 1.93 28,900 1,101,798 0 1,101,798 10,549 0.6 164,853 6.7 021-092-002-000 0.92 28,900 914,077 0 914,077 5,029 0.3 78,583 11.6 021-092-003-000 1.02 28,900 1,300,741 0 1,300,741 5,575 0.3 87,125 14.9 021-092-004-000 1.04 28,900 2,539,415 0 2,539,415 5,685 0.3 88,833 28.6 021-092-005-000 0.92 28,900 2,201,587 0 2,201,587 5,029 0.3 78,583 28.0 021-093-002-000 1.74 3,867 532,075 1,890,000 1,890,000 9,511 0.6 148,624 12.7 021-093-003-000 14.29 23,000 25,774,058 0 25,774,058 78,109 4.8 1,220,598 21.1 021-093-010-000 0.63 4,100 692,968 0 692,968 3,444 0.2 53,812 12.9 021-093-012-000 10.05 19,564 1,762,421 15,760,000 15,760,000 54,933 3.3 858,433 18.4 021-093-013-000 1.99 19,935 7,108,069 0 7,108,069 10,877 0.7 169,978 41.8 021-093-014-000 0.50 0 198,281 2,230,000 2,230,000 2,733 0.2 42,708 52.2 021-094-001-000 11.30 14,636 13,416,635 0 13,416,635 61,765 3.8 965,204 13.9 021-094-003-000 0.52 2,306 942,472 0 942,472 2,842 0.2 44,416 21.2 021-095-009-000 2.00 16,629 3,212,592 0 3,212,592 10,932 0.7 170,833 18.8 021-095-010-000 26.53 102,073 6,027,660 8,500,000 8,500,000 145,012 8.8 2,266,093 3.8 021-098-011-000 1.64 9,832 0 930,000 930,000 8,964 0.5 140,083 6.6 Total 300.53 4,401,969 $448,255,418 $29,310,000 $469,044,981 $1,642,675 100.0% $25,670,000 18.3 ___________
* Preliminary; subject to change.
(1) Does not include parcels 021-088-004, 021-088-007, 021-088-009, and 021-088-010, which are taxable, but owned by public agencies as of FY 2025-26. The FY 2026-27 projected maximum special tax levy for these parcels is $21,755. Does not include prepaid parcels. (2) As shown in the Appraisal Report dated April 3, 2026. (3) Reflects the appraised values for parcels 021-093-002, 021-093-012, 021-093-014, 021-095-010, and 021-098-011, and the FY 2025-26 assessed values for all other parcels.
8.3 Packet Pg. 582
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(4) Represents the $8,615,000 outstanding principal amount of the Series 2015 Special Tax Bonds, the $6,745,000 outstanding principal amount of the Series 2021 Special Tax Bonds, and the $10,310,000 preliminary par amount of the 2026 bonds. Does not include overlapping debt. (5) The Amazon Fulfillment Center stretches across two Assessor's Parcels. The building square footage has been assigned to parcel 021-026-059-000 exclusively.
Sources: Stanislaus County Assessor's Office, Integra Realty Resources, Hilltop Securities Inc., Goodwin Consulting Group, Inc.
8.3 Packet Pg. 583
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Estimated Maximum Special Tax Proceeds and Debt Service Coverage The Rate and Method is structured to produce Special Tax Revenues from the Maximum Special Tax which, when applied to the projected debt service on the Bonds, is anticipated to result in a debt service coverage ratio of at least 110% for the life of the Bonds (excluding any Special Tax Revenues received from the Taxable Public Property), as shown in the table below.
Table 9
West Patterson Financing Authority
Community Facilities District No. 2005-1 (West Patterson Business Park) Projected Revenues from Levy of Special Taxes and Project Debt Service Coverage(1) Year
Ending
Sept. 1
Projected
Maximum
Special Tax(2)
Less:
Estimated
Admin.
Expenses
Net Projected
Maximum
Special Tax(2)
2015 and
Bonds
Debt Service
2021 and
Bonds
Debt Service
2026 Bonds
Debt Service*
Total Debt
Service*
Projected
Debt
Service
Coverage*
2026 $1,588,977 ($71,143) $1,517,834 $560,544 $282,188 $119,711 $962,442 157.7% 2027 1,642,675 (72,566) 1,570,110 568,569 291,738 567,050 1,427,356 110.0% 2028 1,675,529 (74,017) 1,601,512 580,769 296,063 567,050 1,443,881 110.9% 2029 1,709,039 (75,497) 1,633,542 592,169 300,275 567,050 1,459,494 111.9% 2030 1,743,220 (77,007) 1,666,213 607,475 304,375 567,050 1,478,900 112.7% 2031 1,778,085 (78,547) 1,699,537 616,425 313,363 567,050 1,496,838 113.5% 2032 1,813,646 (80,118) 1,733,528 629,525 322,125 567,050 1,518,700 114.1% 2033 1,849,919 (81,721) 1,768,198 641,181 325,663 567,050 1,533,894 115.3% 2034 1,886,918 (83,355) 1,803,562 656,744 329,088 567,050 1,552,881 116.1% 2035 1,924,656 (85,022) 1,839,634 665,994 342,400 567,050 1,575,444 116.8% 2036 1,963,149 (86,723) 1,876,426 684,150 343,800 567,050 1,595,000 117.6% 2037 2,002,412 (88,457) 1,913,955 695,250 355,000 567,050 1,617,300 118.3% 2038 2,042,460 (90,226) 1,952,234 710,000 360,600 567,050 1,637,650 119.2% 2039 2,083,309 (92,031) 1,991,279 723,175 365,800 567,050 1,656,025 120.2% 2040 2,124,976 (93,871) 2,031,104 739,775 375,600 567,050 1,682,425 120.7% 2041 2,167,475 (95,749) 2,071,726 754,575 379,800 567,050 1,701,425 121.8% 2042 2,210,825 (97,664) 2,113,161 767,575 388,600 567,050 1,723,225 122.6% 2043 2,255,041 (99,617) 2,155,424 783,775 396,800 567,050 1,747,625 123.3% 2044 2,300,142 (101,609) 2,198,533 797,950 409,400 567,050 1,774,400 123.9% 2045 2,346,145 (103,642) 2,242,503 815,100 416,200 567,050 1,798,350 124.7% 2046 2,393,068 (105,714) 2,287,353 0 1,252,400 567,050 1,819,450 125.7% 2047 2,440,929 (107,829) 2,333,100 0 1,279,800 567,050 1,846,850 126.3% 2048 2,489,748 (109,985) 2,379,762 0 1,304,400 567,050 1,871,450 127.2% 2049 2,539,543 (112,185) 2,427,358 0 1,331,200 567,050 1,898,250 127.9% 2050 2,590,333 (114,429) 2,475,905 0 0 1,717,050 1,717,050 144.2% 2051 2,642,140 (116,717) 2,525,423 0 0 1,748,800 1,748,800 144.4% 2052 2,694,983 (119,052) 2,575,931 0 0 1,785,325 1,785,325 144.3% 2053 2,748,883 (121,433) 2,627,450 0 0 1,821,075 1,821,075 144.3% 2054 2,803,860 (123,861) 2,679,999 0 0 1,855,775 1,855,775 144.4% 2055 2,859,937 (126,339) 2,733,599 0 0 1,894,150 1,894,150 144.3% 2056 2,917,136 (128,865) 2,788,271 0 0 1,930,650 1,930,650 144.4% * Preliminary; subject to change.
(1) Does not include parcels 021-088-004, 021-088-007, 021-088-009, and 021-088-010, which are taxable, but owned by public agencies as of FY 2025-26.
(2) Assumes the minimum annual tax escalation factor of 2% will apply in future years. Assumes no development in future years. (3) Actual FY2025-26 Special Tax levy.
Hilltop Securities Inc., and Goodwin Consulting Group, Inc.
8.3 Packet Pg. 584
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Overlapping Liens and Priority of Lien
The principal of and interest on the Bonds are payable from the Special Tax authorized to be collected within the District, and payment of the Special Tax is secured by a lien on certain real property within the District. Such lien is co-equal to and independent of the lien for general taxes and any other liens imposed under the Act, regardless of when they are imposed on the property in the District. The imposition of additional special taxes, assessments and general property taxes will increase the amount of independent and co-equal liens which must be satisfied in foreclosure.
The Authority, the County and certain other public agencies are authorized by the Act to form other community facilities districts and improvement areas and, under other provisions of State law, to form special assessment districts, either or both of which could include all or a portion of the land within the District.
Set forth on the following page is an overlapping debt table showing the existing direct and overlapping bonded debt payable with respect to property within the District. This table has been prepared by California Municipal Statistics, Inc. as of the date indicated, and is included for general information purposes only. The Authority has not reviewed the data for completeness or accuracy and makes no representations in connection therewith.
In addition to bonded debt, property in the District is also subject to assessments and special taxes authorized to be levied on behalf of the City’s Community Facilities District 2003-1 and Community Facilities District 2013-1 for fire safety and public safety services, Keystone Pacific Business Park benefit assessment district and Keystone Pacific Business Park landscape maintenance district. For Fiscal Year 2025-26, these districts levied special taxes or assessments on property subject thereto in the respective annual amounts of $________ per building square foot for Community Facilities District 2003-1, $________ – $________ per acre for Community Facilities District 2013-1, $________ per equivalent unit (net acre or portion thereof) for the benefit assessment district and $________ per equivalent unit (net acre or portion thereof) for the landscape maintenance district.
There can be no assurance that any landowner within the District will not petition for the formation of other community facilities districts and improvement areas or for a special assessment district or districts and that parity special taxes or special assessments will not be levied by the Authority, the County or some other public agency to finance additional public facilities, however no other special districts are currently contemplated by the Authority or any landowner in the District.
Private liens, such as deeds of trust securing loans obtained by a landowner, may be placed upon property in the District at any time. Under State law, the Special Taxes have priority over all existing and future private liens imposed on property subject to the lien of the Special Taxes.
8.3 Packet Pg. 585
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Table 10
West Patterson Financing Authority
Community Facilities District No. 2005-1 (West Patterson Business Park) Summary of Overlapping Debt
As of April 1, 2026
2025-26 Local Secured Assessed Valuation: $523,322,039 (Land and Improvements) (1) DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT: % Applicable Debt 4/1/26 Yosemite Community College District General Obligation Bonds 0.585% $ 1,266,804 Patterson Joint Unified School District General Obligation Bonds 12.185 11,917,658 West Patterson Public Financing Authority CFD No. 2005-1 100. 15,360,000 (2) TOTAL DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT $28,544,462 OVERLAPPING GENERAL FUND DEBT:
Stanislaus County Certificates of Participation 0.790% $ 27,244 Patterson Joint Unified School District Certificates of Participation 12.185 1,124,644 City of Patterson General Fund Obligations 16.387 237,571 Turlock Mosquito and Vector Control District Pension Obligation Bonds 1.916 19,200 TOTAL OVERLAPPING GENERAL FUND DEBT $1,408,659
COMBINED TOTAL DEBT $29,953,121 (3)
(1) Excludes personal property valuation of $51,803,320. (2) Mello-Roos Act bonds to be sold.
(3) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and non-bonded capital lease obligations.
Ratios to 2025-26 Assessed Valuation:
Direct Debt ($15,360,000) ....................................................2.94% Total Direct and Overlapping Tax and Assessment Debt.......5.45% Combined Total Debt..............................................................5.72% Source: California Municipal Statistics, Inc.
8.3 Packet Pg. 586
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THE IMPROVEMENTS
Eligible Facilities
The Bonds will provide a funding source for moneys expended for a portion of the cost of the Improvements. The Improvements eligible to be financed by the District are set forth in Exhibit A to the Resolution of Intention, which was adopted by the Board on August 16, 2005, in connection with the formation of the District.
The eligible Improvements authorized as described in Exhibit A to the Resolution of Intention include, but are not limited to, the following:
Wastewater Treatment Plant Expansion. Includes expansion of detention ponds and treatment facilities to serve the West Patterson Business Park.
Water Transmission and Distribution Loop Pipeline. Includes a 14/16” transmission and distribution pipeline around the Northern part of the City to complete the loopwater system around the City.
Roadways. Roadways within and in the vicinity of the West Patterson Business Park, including curb, gutter, sidewalks, street lights, asphalt paving, etc.
Drainage. Water, sewer, storm drain distribution and collection infrastructure within West Patterson Business Park.
West Patterson Environmental Impact Report Mitigation Measure Improvements.
Includes various intersection improvements set forth in Exhibit A to the Resolution of Intention, some of which are located outside the City limits.
Formation, Administrative, and Incidental Expenses. The Improvements authorized to be financed by the District include the acquisition of right of way, the costs of design, engineering and planning, the costs of any environmental or demand, traffic or other studies, surveys or other reports, landscaping and irrigation, soils testing, permits, plan check and inspection fees, insurance, legal and related overhead costs, coordination and supervision and any other costs or appurtenances related to any of the foregoing.
In addition, the District may also finance any of the following:
(1) Bond related expenses, including underwriters’ discount, reserve fund, capitalized interest, bond and underwriters’ counsel and all other incidental expenses; (2) Administrative fees of the Authority, the City and the Bond trustee or fiscal agent related to the District and the Bonds; and
(3) Reimbursement of costs related to the formation of the District advanced by the Authority, the City or any related entity, or any landowner or developer within the District, as well as reimbursement of any costs advanced by the Authority or any related entity, or any landowner or developer within the District, for facilities, fees or other purposes or costs of the District.
8.3 Packet Pg. 587
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Estimated Cost of the Improvements
Construction of the Improvements has been ongoing by the City since July 2004. The City utilized the net proceeds of the 2015 Bonds ($8.2 million) on authorized Improvements for the District that have now been completed using those proceeds and other sources. The City will continue to finance additional authorized Improvements for the District as needed and as funding becomes available, including from the net proceeds of the 2026 Bonds. The additional Improvements are anticipated to be financed by a variety of sources available to the City, including (1) the net proceeds of the 2026 Bonds and planned future Additional Bonds, (2) pay-as-you-go Special Taxes that may be levied in the District, (3) development impact fees collected on property in the District, (4) special taxes and bond proceeds available from other community facilities districts in the City, and (5) potential grant funding available for portions of the Improvements.
The following table describes the Improvements that are anticipated to be financed in part from the proceeds of the 2026 Bonds. These amounts are estimates, and actual costs are expected to vary.
Table 11
West Patterson Financing Authority
Community Facilities District No. 2005-1 (West Patterson Business Park) Summary of Additional Improvements and Estimated Cost
Description Estimated Cost(1)
Wastewater Treatment Expansion
Interstate-5 Interchange Improvements
Water Tank expansion and loop connection
Total
(1) Only a portion of the estimated costs are anticipated to be financed with the 2026 Bonds.
Other sources of financing are also available to the City for the Improvements, as noted above.
Source: City of Patterson.
Construction of Improvements beyond those already existing and those set forth in the table above is anticipated to be completed in phases as additional development of parcels in the District and the future annexation area progresses, and may be financed in whole or in part with proceeds from the issuance of Additional Bonds. Over time, undeveloped parcels in the District are expected to be developed and therefore become subject to the levy of the Special Tax. In addition, over time the parcels that are currently in the future annexation area are expected to be sold to third parties, become developed and subject to the levy of the Special Tax.
The Rate and Method provides that the funding of Improvement costs can also be made from collections of the Special Tax available as the “pay-as-you-go” component of Special Taxes.
The pay-as-you-go funding component may provide for funding of the cost of a portion of the Improvements in excess of the amount provided from bond proceeds (if such proceeds are not sufficient) through annual Special Tax collections in excess of the amount needed to pay the debt service. The Authority may utilize this funding mechanism during the time the Bonds are outstanding. See “SECURITY FOR THE BONDS – Special Tax Methodology” and “–Special Tax Fund.”
8.3 Packet Pg. 588
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SPECIAL RISK FACTORS
The purchase of the Bonds described in this Official Statement involves a degree of risk that may not be appropriate for some investors. The following includes a discussion of some of the risks which should be considered before making an investment decision.
Limited Obligation of the Authority to Pay Debt Service The Authority has no obligation to pay principal of and interest on the Bonds in the event Special Tax collections are delinquent, other than from amounts, if any, on deposit in the Reserve Fund or funds derived from the tax sale or foreclosure and sale of parcels on which levies of the Special Tax are delinquent, nor is the Authority obligated to advance funds to pay such debt service on the Bonds. The Bonds are not general obligations of the Authority but are limited obligations of the Authority and the District payable solely from the proceeds of the Special Tax and certain funds held under the Fiscal Agent Agreement, including amounts deposited in the Reserve Fund and investment income thereon, and the proceeds, if any, from the sale of property in the event of a foreclosure. See “SECURITY FOR THE BONDS.” Any tax for the payment of the Bonds will be limited to the Special Tax to be collected within the jurisdiction of the District.
Property Values and Property Development
The value of taxable property within the District is a critical factor in determining the investment quality of the Bonds. If a property owner defaults in the payment of the Special Tax, the District’s only remedy is to foreclose on the delinquent property in an attempt to obtain funds with which to pay the delinquent Special Tax; although it is contemplated that parcels in the future annexation area may be annexed into the District in the future, no assurances can be given that this will occur, or if it does occur, when such annexations may occur. Land development and land values in the District and the future annexation area could be adversely affected by economic and other factors beyond the District’s control, such as: a general economic downturn; adverse judgments in future litigation that could affect the scope, timing or viability of development; relocation of employers out of the area; stricter land use regulations; shortages of water, electricity, natural gas or other utilities; destruction of property caused by earthquake, flood or other natural disasters; environmental pollution or contamination.
The Appraisal sets forth certain assumptions of the Appraiser in estimating the market value of the Appraised Parcels as of the date indicated. No assurance can be given that the land values are accurate if these assumptions are incorrect or that the values will not decline in the future if one or more events, such as natural disasters or adverse economic conditions, occur.
See “VALUE OF PROPERTY WITHIN THE DISTRICT – Appraisal” above.
Neither the District nor the Authority have evaluated development risks. Since these are largely business risks of the type that property owners customarily evaluate individually, and inasmuch as changes in land ownership may well mean changes in the evaluation with respect to any particular parcel, the District is issuing the Bonds without regard to any such evaluation. Thus, the creation of the District and the issuance of the Bonds in no way implies that the District or the Authority has evaluated these risks or the reasonableness of these risks.
The following is a discussion of specific risk factors that could affect the timing or scope of property development in the District or the value of property in the District.
8.3 Packet Pg. 589
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Land Development. Land values are influenced by the level of development in the area in many respects.
First, undeveloped or partially developed land is generally less valuable than developed land and provides less security to the owners of the Bonds should it be necessary for the District to foreclose on undeveloped or partially developed property due to the nonpayment of Special Taxes.
Second, failure to complete development on a timely basis could adversely affect the land values of those parcels that have been completed. Lower land values would result in less security for the payment of principal of and interest on the Bonds and lower proceeds from any foreclosure sale necessitated by delinquencies in the payment of the Special Tax. See “VALUE OF PROPERTY WITHIN THE DISTRICT – Value to Special Tax Burden Ratios.” No assurance can be given that the proposed development within the District and the future annexation area will be completed, and in assessing the investment quality of the Bonds, prospective purchasers should evaluate the risks of non-completion.
No property owner provides any assurances that the Improvements not yet constructed will be developed or that sources of financing that will actually be available to the Authority in amounts sufficient to complete projected development in the District. No property owner in the District has any obligation to the Authority or to owners of the Bonds to complete the Improvements that are not yet constructed.
Risks of Real Estate Investment Generally. Continuing development of land within the District may be adversely affected by changes in general or local economic conditions, fluctuations in the real estate market, increased construction costs, development, financing and marketing capabilities of individual property owners, water or electricity shortages, and other similar factors.
Development in the District may also be affected by development in surrounding areas, which may compete with the District. In addition, land development operations are subject to comprehensive federal, state and local regulations, including environmental, land use, zoning and building requirements. There can be no assurance that proposed land development operations within the District will not be adversely affected by future government policies, including, but not limited to, governmental policies to restrict or control development, or future growth control initiatives. There can be no assurance that land development operations within the District will not be adversely affected by these risks.
Natural Disasters. The value of the parcels in the District in the future can be adversely affected by a variety of natural occurrences, particularly those that may affect infrastructure and other public improvements and private improvements on the parcels in the District and the continued habitability and enjoyment of such private improvements. For example, the areas in and surrounding the District, like those in much of the State, may be subject to earthquakes or other unpredictable seismic activity; however, the District is not located in a seismic special studies zone.
Other natural disasters could include, without limitation, landslides, floods, droughts or tornadoes. One or more natural disasters could occur and could result in damage to improvements of varying seriousness. The damage may entail significant repair or replacement costs and that repair or replacement may never occur either because of the cost, or because repair or replacement will not facilitate habitability or other use, or because other considerations preclude such repair or replacement. Under any of these circumstances there could be significant delinquencies in the payment of Special Taxes, and the value of the parcels may well depreciate.
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Droughts. The State is subject from time-to-time to drought conditions, which could have an impact on future development in the District. Drought conditions have been present in the State numerous times in the recent past. Although much of the State, including property in the District, is now out of the worst drought category, the District cannot predict when worsening drought conditions and concomitant water-reduction requirements will return, what effect drought conditions could have on property values, or whether or to what extent water reduction requirements may affect the development of the District.
Legal Requirements. Other events that may affect the value of a parcel include changes in the law or application of the law. Such changes may include, without limitation, local growth control initiatives, local utility connection moratoriums and local application of statewide tax and governmental spending limitation measures. Development in the District may also be adversely affected by the application of laws protecting endangered or threatened species.
Hazardous Substances. Any discovery of a hazardous substance detected on property within the District would affect the marketability and the value of some or all of the property in the District. In that event, the owners and operators of a parcel within the District may be required by law to remedy conditions of the parcel relating to releases or threatened releases of hazardous substances. The federal Comprehensive Environmental Response, Compensation and Liability Act of 1980, sometimes referred to as “CERCLA” or the “Superfund Act,” is the most well-known and widely applicable of these laws. California laws with regard to hazardous substances are also applicable to property within the District and are as stringent as the federal laws. Under many of these laws, the owner (or operator) is obligated to remedy a hazardous substance condition of property whether or not the owner (or operator) has anything to do with creating or handling the hazardous substance. The effect, therefore, should any of the parcels be contaminated by a hazardous substance is to reduce the marketability and value of the parcel by the costs of remedying the condition, because the purchaser, upon becoming owner, will become obligated to remedy the condition just as is the seller.
The values set forth in the Appraisal do not take into account the possible reduction in marketability and value of the Appraised Parcels by reason of the possible liability of the owner (or operator) for the remedy of a hazardous substance condition on such parcel. Although the Authority is not aware that the owner (or operator) of any of the property within the District has a current liability for a hazardous substance with respect to any of the parcels, it is possible that such liabilities do currently exist and that the Authority is not aware of them.
Further, it is possible that liabilities may arise in the future with respect to any of the parcels within the District resulting from the existence, currently, on the parcel of a substance presently classified as hazardous but which has not been released or the release of which is not presently threatened, or may arise in the future resulting from the existence, currently, on the parcel of a substance not presently classified as hazardous but which may in the future be so classified.
Further, such liabilities may arise not simply from the existence of a hazardous substance but from the method of handling it. All of these possibilities could significantly affect the value of a parcel within the District that is realizable upon a foreclosure sale.
Endangered and Threatened Species. It is illegal to harm or disturb any plants or animals in their habitat that have been listed as endangered species by the United States Fish & Wildlife Service under the Federal Endangered Species Act or by the California Fish & Game Commission under the California Endangered Species Act without a permit. Although the Authority believes that no federally listed endangered or threatened species would be affected by the proposed development within the District, other than any that are permitted by the entitlements
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already received, the discovery of an endangered plant or animal could delay development of vacant property in the District or reduce the value of undeveloped property.
Levy and Collection of Special Taxes
General. The principal source of payment of principal of and interest on the Bonds is the proceeds of the annual levy and collection of the Special Tax against property within the District.
Limitation on Maximum Special Tax Rate. The annual levy of the Special Tax is subject to the Maximum Special Tax for each parcel authorized in the Rate and Method. The levy cannot be made at a higher rate even if the failure to do so means that the estimated proceeds of the levy and collection of the Special Tax, together with other available funds, will not be sufficient to pay debt service on the Bonds.
In addition to the Maximum Special Tax rate limitation in the Rate and Method, Section 53321(d) of the Act provides that the special tax levied against any parcel for which an occupancy permit for private residential use has been issued may not be increased as a consequence of delinquency or default by the owner of any other parcel within a community facilities district by more than 10% above the amount that would have been levied in such Fiscal Year had there never been any such delinquencies or defaults. In cases of significant delinquency, these factors may result in defaults in the payment of principal of and interest on the Bonds.
No Relationship Between Property Value and Special Tax Levy. Because the Rate and Method set forth in the Rate and Method is not based on property value, the levy of the Special Tax will rarely, if ever, result in a uniform relationship between the value of particular parcels of Taxable Property and the amount of the levy of the Special Tax against those parcels. Thus, there will rarely, if ever, be a uniform relationship between the value of the parcels of Taxable Property and their proportionate share of debt service on the Bonds, and certainly not a direct relationship.
Factors that Could Lead to Special Tax Deficiencies. The following are some of the factors that might cause the levy of the Special Tax on any particular parcel of Taxable Property to vary from the Special Tax that might otherwise be expected:
Ownership by Governmental Entities. The number of parcels of Taxable Property could be reduced through the acquisition of Taxable Property by a governmental entity and failure of the government to pay the Special Tax based upon a claim of exemption or, in the case of the federal government or an agency thereof, immunity from taxation, thereby resulting in an increased tax burden on the remaining Taxable Parcels (up to the Maximum Special Tax for each such Taxable Parcel) and, therefore, potentially insufficient funds available to pay det service on the Bonds.
Property owned by governmental entities is generally exempt from the levy of Special Taxes under the Act. However, pursuant to Section 53317.3 of the Act, if property not otherwise exempt from the Special Tax is acquired by a “public entity,” the Special Tax will continue to be levied on such property and will be enforceable against such public entity. Notwithstanding this provision of the Act, uncertainty exists as to whether property owned by a public entity could be successfully foreclosed upon to satisfy the amount of Special Taxes owed and there is no assurance that a governmental entity acquiring a parcel of Taxable Property (or currently owning a Taxable Public Property) would (or will) continue to pay the Special Taxes levied on such parcel.
Property Tax Delinquencies. Failure of the owners of Taxable Property to pay property taxes (and, consequently, the Special Tax), or delays in the collection of or inability to collect the Special Tax by tax sale or foreclosure and sale of the delinquent parcels, could result in a
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deficiency in the collection of Special Tax revenues. See “–Tax Delinquencies” below. For a summary of recent Special Tax collection and delinquency rates in the District, see “VALUE OF PROPERTY WITHIN THE DISTRICT – Special Tax Collection and Delinquency Rate.” Delays Following Special Tax Delinquencies and Foreclosure Sales. The Fiscal Agent Agreement generally provides that the Special Tax is to be collected in the same manner as ordinary ad valorem property taxes are collected and, except as provided in the special covenant for foreclosure described in “SECURITY FOR THE BONDS – Delinquent Payments of Special Tax; Covenant for Superior Court Foreclosure” and in the Act, is subject to the same penalties and the same procedure, sale and lien priority in case of delinquency as is provided for ordinary ad valorem property taxes. Under these procedures, if taxes are unpaid for a period of five years or more, the property is deeded to the State and then is subject to sale by the County.
If sales or foreclosures of property are necessary, there could be a delay in payments to owners of the Bonds pending such sales or the prosecution of foreclosure proceedings and receipt by the Authority of the proceeds of sale if the Reserve Fund is depleted. See “SECURITY FOR THE BONDS – Delinquent Payments of Special Tax; Covenant for Superior Court Foreclosure.” The ability of the Authority to collect interest and penalties specified by State law and to foreclose against properties having delinquent Special Tax installments may be limited in certain respects with regard to properties in which the Federal Deposit Insurance Corporation (the “FDIC”) has or obtains an interest. The FDIC would obtain such an interest by taking over a financial institution that has made a loan that is secured by property within the District.
Other laws generally affecting creditors’ rights or relating to judicial foreclosure may affect the ability to enforce payment of Special Taxes or the timing of enforcement of Special Taxes. For example, the Soldiers and Sailors Civil Relief Act of 1940 affords protections such as a stay in enforcement of the foreclosure covenant, a six-month period after termination of military service to redeem property sold to enforce the collection of a tax or assessment and a limitation on the interest rate on the delinquent tax or assessment to persons in military service if the court concludes the ability to pay such taxes or assessments is materially affected by reason of such service.
Concentration of Ownership
Parcels within the District are owned by multiple landowners, some with large holdings. The owner of property in the District is not personally obligated to pay the Special Tax attributable to the owner’s property. Rather, the Special Tax is an obligation only against the parcel of property, secured by the amount which could be realized in a foreclosure proceeding against the property, and not by any promise of the owner to pay. If the value of the property is not sufficient, taking into account other obligations also constituting a lien against the property, the Authority, Fiscal Agent and owners of the Bonds have no recourse against the owner, such as filing a lawsuit to collect money.
Failure of any landowner or any future owner of significant property subject to the Special Taxes in the District to pay installments of Special Taxes when due could cause the depletion of the Reserve Fund prior to reimbursement from the resale of foreclosed property or payment of the delinquent Special Tax and, consequently, result in the delinquency rate reaching a level that would cause an insufficiency in collection of the Special Tax to meet the District’s obligations on the Bonds. See “OWNERSHIP OF PROPERTY IN THE DISTRICT.” In that event, there could be a delay or failure in payments on the Bonds. See “SPECIAL RISK FACTORS – Bankruptcy and
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Foreclosure Delays” below and “SECURITY FOR THE BONDS – Delinquent Payments of Special Tax; Covenant for Superior Court Foreclosure.”
Risks Associated with Commercial Real Estate
Property in the District is commercial in nature. There are certain significant risks associated with commercial real estate property, as discussed in the following paragraphs.
Dependence on Tenants. The ability of certain property owners within the District to pay Special Taxes may depend on the ability of tenants to meet their financial obligations under their leases. In the event of defaults by tenants, delays may be experienced in enforcing rights and substantial costs may be incurred in protecting the property owner’s investment. Furthermore, at any time, a tenant could seek protection under bankruptcy laws, which could result in the termination of the tenant’s lease and an interruption or loss of rental income. The bankruptcy of a major tenant, followed by the closing of its business or the leasing of its space to a different tenant or for a different use, could adversely affect the desirability of the property and result in a decrease in consumer traffic and sales income which would adversely affect the ability of the other tenants to meet their obligations under their leases.
Factors Affecting Economic Performance and Value of Commercial Property. The economic performance and value of the Taxable Property in the District will be affected by a number of factors, including national economic conditions, regional economic conditions (which may be adversely affected by plant closings, industry slow-downs and other factors), local real estate conditions such as an oversupply of retail space or a reduction in the demand for commercial and light industrial space in the area, the attractiveness of the property to tenants, competition from other tenants, the quality of maintenance, the cost of insurance and management services, and increased operating costs. Other factors which may adversely affect the economic performance and value of the Taxable Property include changes in government regulations and other laws, rules and regulations governing real estate, zoning or taxes, increases in interest rates, the availability of financing and potential liability under environmental and other laws.
Due to these factors and other risks, there can be no assurance that commercial property in the District will remain economically viable throughout the term of the Bonds, or that the owners of the Taxable Property in the District will continue to have the ability throughout the term of the Bonds to pay the Special Taxes when due.
Appraised Values
The Appraisal estimates the market value of the Appraised Parcels, as the date of value specified therein. This market value is merely the present opinion of the Appraiser, and is subject to the assumptions and limiting conditions stated in the Appraisal. The Authority has not sought the present opinion of any other appraiser of the value of the Appraised Parcels or any other parcels subject to the Special Tax. A different present opinion of value might be rendered by a different appraiser.
The opinion of value relates to sale by a willing seller to a willing buyer as of the date of valuation, each having similar information and neither being forced by other circumstances to sell or to buy. Consequently, the opinion is of limited use in predicting the selling price at a foreclosure sale, because the sale is forced and the buyer may not have the benefit of full information.
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In considering the estimates of value evidenced by the Appraisal, it should be noted that the Appraisal is based upon a number of standard and special assumptions and qualifications which affect the estimates as to value, as set forth in the Appraisal. In addition, the opinion of the Appraiser set forth in the Appraisal is a present opinion. It is based upon present facts and circumstances. Differing facts and circumstances may lead to differing opinions of value. The appraised market value of the Appraised Parcels is not evidence of future value because future facts and circumstances may differ significantly from the present.
No assurance can be given that the Appraised Parcels could be sold in a foreclosure for the estimated market value contained in the Appraisal. Such sale is the primary remedy available to Bondowners if that property should become delinquent in the payment of Special Taxes.
Bankruptcy and Foreclosure Delays
The payment of the Special Tax and the ability of the District to foreclose the lien of a delinquent unpaid tax, as discussed in “SECURITY FOR THE BONDS – Delinquent Payments of Special Tax; Covenant for Superior Court Foreclosure,” may be limited by bankruptcy, insolvency or other laws generally affecting creditors’ rights or by the laws of the State of California relating to judicial foreclosure. The various legal opinions to be delivered concurrently with the delivery of the Bonds (including Bond Counsel’s approving legal opinion) will be qualified as to the enforceability of the various legal instruments by bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors’ rights, by the application of equitable principles and by the exercise of judicial discretion in appropriate cases.
Although bankruptcy proceedings would not cause the Special Taxes to become extinguished, bankruptcy of a property owner could result in a delay in prosecuting superior court foreclosure proceedings and could result in the possibility of delinquent Special Tax installments not being paid in full. Such a delay would increase the likelihood of a delay or default in payment of the principal of and interest on the Bonds. To the extent that property in the District continues to be owned by a limited number of property owners, the chances are increased that the Reserve Fund established for the Bonds could be fully depleted during any such delay in obtaining payment of delinquent Special Taxes. As a result, sufficient moneys would not be available in the Reserve Fund for transfer to the Bond Fund to make up shortfalls resulting from delinquent payments of the Special Tax and thereby to pay principal of and interest on the Bonds on a timely basis.
To the extent that bankruptcy or similar proceedings were to involve a large property owner, the chances would increase the likelihood that the Bond Reserve Fund could be fully depleted during any resulting delay in receiving payment of delinquent Special Taxes. As a result, sufficient monies would not be available in the Bond Reserve Fund for transfer to the Bonds Redemption Account to make up any shortfalls resulting from delinquent payments of the Special Tax and thereby to pay principal of and interest on the Bonds on a timely basis.
Parity Taxes and Special Assessments; Private Debt
The Authority, the City, the County and certain other public agencies are authorized by the Act to form other community facilities districts and improvement areas and, under other provisions of State law, to form special assessment districts, either or both of which could include all or a portion of the land within the District.
Property in the District is currently subject to certain overlapping tax and assessment liens, as shown in the overlapping debt statement. In addition to bonded debt, property in the District is
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also subject to assessment and special taxes authorized to be levied on property subject thereto.
See “VALUE OF PROPERTY WITHIN THE DISTRICT – Overlapping Liens and Priority of Lien.” In general, as long as the Special Tax is collected on the County tax roll, the Special Tax and all other taxes, assessments and charges also collected on the County tax roll are on a parity, that is, are of equal priority. Questions of priority become significant when collection of one or more of the taxes, assessments or charges is sought by some other procedure, such as foreclosure and sale. In the event of proceedings to foreclose for delinquency of Special Taxes securing the Bonds, the Special Tax will be subordinate only to existing prior governmental liens, if any. Otherwise, in the event of such foreclosure proceedings, the Special Taxes will generally be on a parity with the other taxes, assessments and charges, and will share the proceeds of such foreclosure proceedings on a pro-rata basis. Although the Special Taxes will generally have priority over non-governmental liens on a taxable parcel, regardless of whether the nongovernmental liens were in existence at the time of the levy of the Special Tax or not, this result may not apply in the case of bankruptcy. See “– Bankruptcy and Foreclosure Delays” above.
There can be no assurance that property owners within the District will not petition for the formation of other community facilities districts and improvement areas or for a special assessment district or districts and that parity special taxes or special assessments will not be levied by the Authority, the County or some other public agency to finance additional public facilities. In addition to liens for special taxes or assessments to finance public improvements of benefit to land within the District, owners of property may obtain loans from banks or other private sources which loans may be secured by a lien on the parcels in the District. Such loans would increase amounts owed by the owner of such parcel with respect to development of its property in the District. However, the lien of such loans would be subordinate to the lien of the Special Taxes.
Tax Delinquencies
Under provisions of the Act, the Special Taxes will be billed to the properties within the District on the regular property tax bills sent to owners of such properties. Such Special Tax installments are due and payable, and bear the same penalties and interest for nonpayment, as do regular property tax installments. Special Tax installment payments cannot be made separately from property tax payments. Therefore, the unwillingness or inability of a property owner to pay regular property tax bills as evidenced by property tax delinquencies may also indicate an unwillingness or inability to make regular property tax payments and Special Tax payments in the future.
The annual Special Tax will be billed and collected in two installments payable without penalty by December 10 and April 10. In the event such Special Taxes are not timely paid, moneys available to pay debt service on the Bonds becoming due on the subsequent respective March 1 and September 1 may be insufficient, except to the extent moneys are available in the Reserve Fund.
In the event of non-payment of Special Taxes, funds in the Reserve Fund, if available, may be used to pay principal of and interest on the Bonds. If funds in the Reserve Fund for the Bonds are depleted, the funds can be replenished from the proceeds of the levy and collection of the Special Tax that are in excess of the amount required to pay all amounts to be paid to the Bond holders pursuant to the Fiscal Agent Agreement. However, no replenishment from the proceeds of a Special Tax levy can occur as long as the proceeds that are collected from the levy of the Special Tax against property within the District at the Maximum Special Tax rates, together with
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other available funds, remains insufficient to pay all such amounts. Thus it is possible that the Reserve Fund will be depleted and not be replenished by the levy of the Special Tax.
See “SECURITY FOR THE BONDS – Delinquent Payments of Special Tax; Covenant for Superior Court Foreclosure” for a discussion of the provisions which apply, and procedures which the Authority is obligated to follow, in the event of delinquency in the payment of Special Taxes.
See also “SECURITY FOR THE BONDS – Special Tax Methodology” for a discussion of the limitations imposed by the Rate and Method and the Act applicable to Special Tax increases.
No Acceleration Provisions
The Bonds do not contain a provision allowing for the acceleration of the Bonds in the event of a payment default or other default under the terms of the Bonds or the Fiscal Agent Agreement. Under the Fiscal Agent Agreement, a Bond holder is given the right for the equal benefit and protection of all Bond holders similarly situated to pursue certain remedies. So long as the Bonds are in book-entry form, DTC will be the sole Bond holder and will be entitled to exercise all rights and remedies of Bond holders.
Ballot Initiatives
From time to time, initiative measures qualify for the State ballot pursuant to the State’s constitutional initiative process and those measures could be adopted by California voters. The adoption of any such initiative might place limitations on the ability of the State, the Authority, the County or other local districts to increase revenues or to increase appropriations or on the ability of the landowners to complete the development of the District. See “–Property Values and Property Development – Land Development” above. See also “–Voter Initiatives” below.
Voter Initiatives
Under the California Constitution, the power of initiative is reserved to the voters for the purpose of enacting statutes and constitutional amendments. Since 1978, the voters have exercised this power through the adoption of Proposition 13 and similar measures, including Proposition 218, which was approved in the general election held on November 5, 1996, and Proposition 26, which was approved on November 2, 2010.
Any such initiative may affect the collection of fees, taxes and other types of revenue by local agencies such as the District. Subject to overriding federal constitutional principles, such collection may be materially and adversely affected by voter-approved initiatives, possibly to the extent of creating cash-flow problems in the payment of outstanding obligations such as the Special Tax Bonds.
Proposition 218—Voter Approval for Local Government Taxes—Limitation on Fees, Assessments, and Charges—Initiative Constitutional Amendment, added Articles XIIIC and XIIID to the California Constitution, imposing certain vote requirements and other limitations on the imposition of new or increased taxes, assessments and property-related fees and charges.
On November 2, 2010, California voters approved Proposition 26, entitled the “Supermajority Vote to Pass New Taxes and Fees Act”. Section 1 of Proposition 26 declares that Proposition 26 is intended to limit the ability of the State Legislature and local government to circumvent existing restrictions on increasing taxes by defining the new or expanded taxes as “fees.” Proposition 26 amended Articles XIIIA and XIIIC of the State Constitution. The amendments
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to Article XIIIA limit the ability of the State Legislature to impose higher taxes (as defined in Proposition 26) without a two-thirds vote of the Legislature. Article XIIIC requires that all new local taxes be submitted to the electorate before they become effective. Taxes for general governmental purposes require a majority vote and taxes for specific purposes (“special taxes”) require a two-thirds vote.
The Special Taxes and the Bonds were each authorized by not less than a two-thirds vote of the landowners within the District who constituted the qualified electors at the time of such voted authorization. The District believes, therefore, that issuance of the Bonds does not require the conduct of further proceedings under the Act, Proposition 218 or Proposition 26.
Like their antecedents, Proposition 218 and Proposition 26 are likely to undergo both judicial and legislative scrutiny before the impact on the District can be determined. Certain provisions of Proposition 218 and Proposition 26 may be examined by the courts for their constitutionality under both State and federal constitutional law, the outcome of which cannot be predicted.
Recent Case Law Related to the Mello-Roos Act
On August 1, 2014, the California Court of Appeal, Fourth Appellate District, issued its opinion in City of San Diego v. Melvin Shapiro, et al. (D063997). The case involved a Convention Center Facilities District (the “CCFD”) established by the City of San Diego. The CCFD is a financing district established under San Diego’s city charter (the “Charter”) and was intended to function much like a community facilities district established under the Act. The CCFD was comprised of all of the real property in the entire city. However, the CCFD special tax was to be levied only on properties in the CCFD that were improved with a hotel.
At the election to authorize the CCFD special tax, the CCFD proceedings limited the electorate to owners of hotel properties and lessees of real property owned by a governmental entity on which a hotel was located. Registered voters in the City of San Diego were not permitted to vote. This definition of the qualified electors of the CCFD was based on Section 53326(c) of the Act, which generally provides that, if a special tax will not be apportioned in any tax year on residential property, the legislative body may provide that the vote shall be by the landowners of the proposed community facilities district whose property would be subject to the special tax.
The San Diego Court held that the CCFD special tax election did not comply with the Charter and with applicable provisions of the California Constitution -- specifically Article XIIIA, section 4 (“Cities, Counties and special districts, by a two-thirds vote of the qualified electors of such district, may impose special taxes on such district….”) and Article XIIIC, section 2(d) (“No local government may impose, extend, or increase any special tax unless and until that tax is submitted to the electorate and approved by a two-thirds vote.”) -- because the electors in the CCFD election should have been the registered voters residing within the CCFD (the boundaries of which were coterminous with the boundaries of the City of San Diego).
As to the District, there were no registered voters within the District at the time of the election to authorize the Special Taxes. Significantly, the San Diego Court expressly stated that it was not addressing the validity of a landowner election to impose special taxes on property pursuant to the Act in situations where there are fewer than 12 registered voters. Therefore, by its terms, the San Diego Court’s holding does not apply to the special tax election in the District.
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Moreover, Sections 53341 and 53359 of the Act establish a limited period of time in which special taxes levied under the Act may be challenged by a third party:
53341. Any action or proceeding to attack, review, set aside, void, or annul the levy of a special tax or an increase in a special tax pursuant to [the Act] shall be commenced within 30 days after the special tax is approved by the voters . . . . 53359. An action to determine the validity of bonds issued pursuant to [the Act] or the validity of any special taxes levied pursuant to [the Act] . . . shall . . . be commenced within 30 days after the voters approve the issuance of the bonds or the special tax . . . .
Landowner voters approved the Special Taxes and the issuance of bonds for the District in compliance with all applicable requirements of the Act in 2005. Therefore, pursuant to Sections 53341 and 53359 of the Act, the statute of limitations period to challenge the validity of the Special Tax has expired.
Because the San Diego Court expressly stated that it did not consider the facts presented by the District and because the period for challenging the Special Taxes has passed, the Authority believes the Special Taxes are valid and cannot be challenged.
Pandemic Diseases
In recent years, public health authorities have warned of threats posed by outbreaks of disease and other public health threats. Pandemic diseases arising in the future could have significant adverse health and financial impacts throughout the world, leading to loss of jobs and personal financial hardships, and/or actions by federal, State and local governmental authorities to contain or mitigate the effects of an outbreak.
Taxpayer assistance measures may include deferral of due dates of property taxes, which was an assistance program during the COVID-19 pandemic, and with or without a deferral some taxpayers may be unable to make their property and Special Tax payments. No assurance can be given that the property tax payment dates will not be deferred in the future, which may cause a delay in the receipt of Special Taxes. In addition, home values may be affected by a reduction in demand stemming from personal finances, or general widespread economic circumstances resulting from pandemic diseases.
Cyber Security
The City, like many other public and private entities, relies on computer and other digital networks and systems to conduct its operations. As a recipient and provider of personal, private or other sensitive electronic information, the City is potentially subject to multiple cyber threats, including without limitation hacking, viruses, ransomware, malware and other attacks. The City’s technology department has conducted cybersecurity training, the uses spam filtering, routinely sends out e-mails to staff regarding cyber security in an attempt to keep staff informed of cyber security risks, and plans a more robust to be in place by mid-2022. No assurance can be given that the City’s efforts to manage cyber threats and attacks will be successful in all cases, or that any such attack will not materially impact the operations or finances of the City or the District, or the administration of the Bonds. The City is also reliant on other entities and service providers in connection with the administration of the Bonds, including without limitation the County tax collector for the levy and collection of Special Taxes, the Fiscal Agent, and the dissemination
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agent. No assurance can be given that the City, the District and these other entities will not be affected by cyber threats and attacks in a manner that may affect the Bond owners.
CONSTITUTIONAL LIMITATIONS ON TAXATION AND APPROPRIATIONS Article XIIIA of the California Constitution, commonly known as “Proposition 13,” provides that each county will levy the maximum ad valorem property tax permitted by Proposition 13 and will distribute the proceeds to local agencies in accordance with an allocation formula based in part on pre-Proposition 13 ad valorem property tax rates levied by local agencies.
Article XIIIA limits the maximum ad valorem tax on real property to 1% of “full cash value,” which is defined as the County Assessor’s valuation of real property as shown on the 1975-76 tax bill under full cash value, or, thereafter, the appraised value of real property when purchased, newly constructed, or a change in ownership has occurred after the 1975 assessment. The full cash value may be adjusted annually to reflect increases of no more than 2% per year or decreases in the consumer price index or comparable local data, or declining property value caused by damage, destruction or other factors.
Article XIIIA exempts from the 1% tax limitation any taxes to repay indebtedness approved by the voters prior to July 1, 1978, and requires a vote of two-thirds of the qualified electorate to impose Special Taxes or any additional ad valorem, sales, or transaction taxes on real property. In addition, Article XIIIA requires the approval of two-thirds of all members of the State Legislature to change any State laws resulting in increased tax revenues. On June 3, 1986, California voters approved an amendment to Article XIIIA of the California Constitution to allow local governments and school districts to raise their property tax rates above the constitutionally mandated 1% ceiling for the purpose of paying off certain new general obligation debt issued for the acquisition or improvement of real property and approved by two-thirds of the votes cast by the qualified electorate. If any such voter-approved debt is issued, it may be on a parity with the lien of the Special Tax on the parcels within the District.
State and local government agencies in the State, and the State itself are subject to annual appropriation limits, imposed by Article XIIIB of the State Constitution. Article XIIIB prohibits government agencies and the State from spending “appropriations subject to limitation” in excess of the appropriations limits imposed. “Appropriations subject to limitation” are authorizations to spend “proceeds of taxes,” which consist of tax revenues, certain state subventions and certain other funds, including proceeds from regulatory licenses, user charges or other fees to the extent that such proceeds exceed the cost reasonably borne by such entity in providing the regulation, product or service. No limit is imposed on appropriations of funds which are not “proceeds of taxes” such as debt service on indebtedness existing or authorized before January 1, 1979, or subsequently authorized by the voters, appropriations required to comply with mandates of courts or the federal government, reasonable user charges or fees and certain other non-tax funds.
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CONTINUING DISCLOSURE
The Authority, for and on behalf of the District, has covenanted for the benefit of owners of the 2026 Bonds to provide certain financial information and operating data relating to the District by not later than nine months after the end of the Authority’s fiscal year (presently June 30) in each year (the “Authority Annual Report”) commencing with its report for the 2025-26 fiscal year (due April 1, 2027) and to provide notices of the occurrence of certain enumerated events.
The Authority Annual Report and notices of material events will be filed with the Municipal Securities Rulemaking Board. The covenants of the Authority have been made in order to assist the Underwriter in complying with Securities Exchange Commission Rule 15c2-12(b)(5) (the “Rule”). The specific nature of the information to be contained in the Authority Annual Report or the notices of material events by the Authority is summarized in “APPENDIX D — Form of Continuing Disclosure Undertaking.”
The Authority believes that for the past five year period it currently is in material compliance with all of its continuing disclosure undertakings. The Authority has engaged Goodwin Consulting Group to assist with the preparation and filing of its continuing disclosure reports, including as to the District, in order to ensure compliance with future continuing disclosure obligations.
UNDERWRITING
The 2026 Bonds were purchased through negotiation by Hilltop Securities Inc. (the “Underwriter”). The Underwriter agreed to purchase the 2026 Bonds at a price of $_________ (which is equal to the par amount of the 2026 Bonds, less a net original issue discount of $_________ and less the Underwriter’s discount of $_________). The initial public offering prices set forth on the cover page hereof may be changed by the Underwriter. The Underwriter may offer and sell the 2026 Bonds to certain dealers and others at a price lower than the public offering prices set forth on the cover page hereof.
MUNICIPAL ADVISOR
The Authority has retained Del Rio Advisors LLC of Modesto, California, as municipal advisor (the “Municipal Advisor”) in connection with the issuance of the 2026 Bonds. All financial and other information presented in this Official Statement has been provided by the Authority and others from their records. Unless otherwise footnoted, the Municipal Advisor takes no responsibility for the accuracy or completeness of the data provided by the Authority or others and has not undertaken to make an independent verification or does not assume responsibility for the accuracy, completeness, or fairness of the information contained in this Official Statement. The Municipal Advisor has assisted the Authority with the structure, timing and terms for the sale of the 2026 Bonds. The Municipal Advisor provides municipal advisory services only and does not engage in the underwriting, marketing, or trading of municipal securities or other negotiable instruments. The fee of the Municipal Advisor is contingent upon the successful closing of the 2026 Bonds.
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LEGAL OPINION
The validity of the 2026 Bonds and certain other legal matters are subject to the approving opinion of Jones Hall LLP, Bond Counsel. A complete copy of the proposed form of Bond Counsel opinion is set forth in “APPENDIX E – Form of Opinion of Bond Counsel,” and the final opinion will be made available to registered owners of the 2026 Bonds at the time of delivery. The fees of Bond Counsel are contingent upon the sale and delivery of the 2026 Bonds.
TAX MATTERS
In the opinion of Jones Hall LLP, San Mateo, California, Bond Counsel, subject, however to the qualifications set forth below, under existing law, the interest on the 2026 Bonds is excluded from gross income for federal income tax purposes and such interest is not an item of tax preference for purposes of the federal alternative minimum tax. Interest on the 2026 Bonds may be subject to the corporate alternative minimum tax.
The opinions set forth in the preceding paragraph are subject to the condition that the District comply with all requirements of the Internal Revenue Code of 1986, as amended (the “Tax Code”) that must be satisfied subsequent to the issuance of the 2026 Bonds. The District has covenanted to comply with each such requirement. Failure to comply with certain of such requirements may cause the inclusion of such interest in gross income for federal income tax purposes to be retroactive to the date of issuance of the 2026 Bonds.
If the initial offering price to the public (excluding bond houses and brokers) at which a Bond is sold is less than the amount payable at maturity thereof, then such difference constitutes “original issue discount” for purposes of federal income taxes and State of California personal income taxes. If the initial offering price to the public (excluding bond houses and brokers) at which a Bond is sold is greater than the amount payable at maturity thereof, then such difference constitutes “original issue premium” for purposes of federal income taxes and State of California personal income taxes. De minimis original issue discount and original issue premium is disregarded.
Under the Tax Code, original issue discount is treated as interest excluded from federal gross income and exempt from State of California personal income taxes to the extent properly allocable to each owner thereof subject to the limitations described in the first paragraph of this section. The original issue discount accrues over the term to maturity of the Bond on the basis of a constant interest rate compounded on each interest or principal payment date (with straight-line interpolations between compounding dates). The amount of original issue discount accruing during each period is added to the adjusted basis of such Bonds to determine taxable gain upon disposition (including sale, redemption, or payment on maturity) of such Bond. The Tax Code contains certain provisions relating to the accrual of original issue discount in the case of purchasers of the 2026 Bonds who purchase the 2026 Bonds after the initial offering of a substantial amount of such maturity. Owners of such Bonds should consult their own tax advisors with respect to the tax consequences of ownership of Bonds with original issue discount, including the treatment of purchasers who do not purchase in the original offering, the allowance of a deduction for any loss on a sale or other disposition, and the treatment of accrued original issue discount on such Bonds under federal individual and corporate alternative minimum taxes.
Under the Tax Code, original issue premium is amortized on an annual basis over the term of the Bond (said term being the shorter of the Bond’s maturity date or its call date). The amount
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of original issue premium amortized each year reduces the adjusted basis of the owner of the Bond for purposes of determining taxable gain or loss upon disposition. The amount of original issue premium on a Bond is amortized each year over the term to maturity of the Bond on the basis of a constant interest rate compounded on each interest or principal payment date (with straight-line interpolations between compounding dates). Amortized Bond premium is not deductible for federal income tax purposes. Owners of premium Bonds, including purchasers who do not purchase in the original offering, should consult their own tax advisors with respect to State of California personal income tax and federal income tax consequences of owning such Bonds.
In the further opinion of Bond Counsel, interest on the 2026 Bonds is exempt from California personal income taxes.
Owners of the 2026 Bonds should also be aware that the ownership or disposition of, or the accrual or receipt of interest on, the 2026 Bonds may have federal or state tax consequences other than as described above. Bond Counsel expresses no opinion regarding any federal or state tax consequences arising with respect to the 2026 Bonds other than as expressly described above.
NO RATINGS
The Authority has not applied to a rating agency for the assignment of a rating to the 2026 Bonds and does not contemplate applying for a rating.
NO LITIGATION
At the time of delivery of and payment for the 2026 Bonds, the Authority Attorney will deliver his opinion that to the best of its knowledge there is no action, suit, proceeding, inquiry or investigation at law or in equity before or by any court or regulatory agency pending against the Authority affecting its existence or the titles of its officers to office or seeking to restrain or to enjoin the issuance, sale or delivery of the 2026 Bonds, the application of the proceeds thereof in accordance with the Fiscal Agent Agreement, or the collection or application of the Special Tax to pay the principal of and interest on the 2026 Bonds, or in any way contesting or affecting the validity or enforceability of the 2026 Bonds, the Fiscal Agent Agreement or any action of the Authority contemplated by any of said documents, or in any way contesting the completeness or accuracy of this Official Statement or any amendment or supplement thereto, or contesting the powers of the Authority or its authority with respect to the 2026 Bonds or any action of the Authority contemplated by any of said documents.
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EXECUTION
The execution and delivery of this Official Statement by the Authority has been duly authorized by the Board on behalf of the District.
WEST PATTERSON FINANCING AUTHORITY
By:
Executive Director
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APPENDIX A
THE CITY OF PATTERSON AND STANISLAUS COUNTY DEMOGRAPHIC INFORMATION The District is located in the City of Patterson (“City”) in Stanislaus County (“County”), California (“State”). The financial and economic data for the City are presented for information purposes only. The Bonds are not a debt or obligation of the City, the West Patterson Financing Authority (“Authority”), the County or the State, but are a limited obligation of the Authority secured solely by the funds held pursuant to the Fiscal Agent Agreement.
The County is located approximately 90 minutes southeast from both the City of San Francisco and Silicon Valley, and is known as the heartland of California’s Central Valley. The City lies in the central area of the County.
The City is surrounded by agricultural land. With agriculture as its long time primary economic base, orchards of apricots, almonds and walnuts, as well as row crops of dry beans, tomatoes, broccoli, spinach, peas and melons play an important role in Patterson’s history.
Patterson markets itself as the apricot capital of the world. More recently light industrial and large warehouse development and uses along Interstate 5 have contributed overall growth in the area.
Municipal Government
The City Council of the City is composed of five members, a Mayor and four Council Members, elected at large by the citizens of Patterson. The Mayor serves a two-year term, and Council Members serve four-year overlapping terms. The Mayor presides over the meetings and performs other ceremonial duties. As the policy-making legislative body, the City Council is responsible for the enactment of all programs, policies and services of the City.
The City Council acts upon all legislative matters concerning the City, approving and adopting all ordinances, resolutions, contracts and other matters requiring overall policy decisions and leadership. The Council appoints the City Manager, City Attorney and various other commissions, boards and citizen advisory committees, all of which ensure broad-based input into the affairs of the City.
Population
The following table lists population figures for the County and City for the last five calendar years for which data is available.
Table A-1
CITY OF PATTERSON, STANISLAUS COUNTY,
STATE OF CALIFORNIA
Population Estimates, as of January 1
2021 2022 2023 2024 2025
City of Patterson 23,796 24,221 24,492 24,977 25,868
Stanislaus County 551,722 549,272 548,423 553,614 555,765 State of California 39,369,530 39,179,680 39,228,444 39,420,663 39,529,101 Source: California State Department of Finance.
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Principal Employers
The following table shows the principal employers in the City for fiscal year ending June 30, 2024.
PRINCIPAL EMPLOYERS
City of Patterson
As of June 30, 2024
Employer
Number of
Employees
Patterson Joint Unified School District 867
CVS Caremaker Distribution Center 544
Amazon Fulfillment Center 541
Grainger Distribution Center 397
Walmart Supercenter 330
City of Patterson 264
Traina Foods 161
King’s Roofing 139
Restoration Hardware Distribution Center 95
Advanced Linen Service 84
Total – Top Ten 3,422
Total City-Wide Employment 11,000
Source: City of Patterson Annual Comprehensive Financial Report for Fiscal Year 2023-24.
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Employment and Industry
The unemployment rate in Stanislaus County was 7.4 percent in January 2026, up from a revised 6.8 percent in December 2025, and unchanged the year-ago estimate of 7.4 percent.
This compares with an unadjusted unemployment rate of 5.5 percent for California and 4.7 percent for the nation during the same period.
The table below provides information about employment by industry type for the MSA for calendar years 2020 through 2024.
MODESTO MSA, STANISLAUS COUNTY
Civilian Labor Force, Employment and Unemployment; Employment by Industry (Annual Averages)
March 2024 Benchmark
2020 2021 2022 2023 2024
Civilian Labor Force (1)(2) 244,300 243,000 245,100 249,300 253,600 Employment 217,900 222,900 231,700 233,600 236,200
Unemployment 26,400 20,100 13,300 15,700 17,500
Unemployment Rate 10.8% 8.3% 5.4% 6.3% 6.9%
Wage and Salary Employment: (3)
Agriculture 14,500 14,000 13,900 12,500 12,700
Mining, Logging and Construction 9,800 10,700 11,300 10,700 11,100 Manufacturing 5,900 5,600 5,600 5,500 5,700
Wholesale Trade 21,900 23,000 23,100 22,800 22,800
Retail Trade 9,000 9,100 10,100 10,700 10,200
Transportation, Warehousing, Utilities 800 800 800 800 700 Information 5,100 4,900 5,000 4,800 4,800
Finance Activities 15,100 15,400 15,200 14,600 14,400
Professional and Business Services 34,600 35,000 35,600 36,900 38,900 Educational and Health Services 15,800 18,200 20,500 20,900 20,600 Leisure and Hospitality 5,100 5,500 6,000 6,100 6,100
Other Services 900 700 700 700 700
Federal Government 2,100 2,000 2,100 2,200 2,300
State Government 25,900 25,700 27,000 28,300 29,600
Local Government 14,500 14,000 13,900 12,500 12,700
Total all Industries 187,700 192,600 199,900 201,000 203,900 (1) Labor force data is by place of residence; includes self-employed individuals, unpaid family workers, household domestic workers, and workers on strike.
(2) Industry employment is by place of work; excludes self-employed individuals, unpaid family workers, household domestic workers, and workers on strike.
(3) Columns may not sum to totals due to rounding.
Source: California Employment Development Department.
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The following tables list the major employers in the County as of April 2026.
STANISLAUS COUNTY
Major Employers
(As of April 2026)
Employer Name Location Industry
Amazon Fulfillment Ctr Patterson Mail Order Fulfillment Service Bartles & Jaymes Co Modesto Wineries (mfrs)
Behavioral Health & Recovery Modesto Mental Health Services Community Services Agency Modesto Government Offices-County Conagra Brands Inc Oakdale Food Products (whls)
Duarte Nursery Inc Hughson Nurserymen
E & J Gallo Winery Modesto Wineries (mfrs)
Emanuel Medical Ctr Turlock Hospitals
Flory Industries Inc Salida Farm Equipment-Manufacturers Foster Farms Turlock Poultry Processing Plants (mfrs)
Frito-Lay Inc Modesto Potato Chips Corn Chips/Snacks (mfrs) Health Services Agency Modesto Clinics
Macdonald Group At PMZ Real Modesto Real Estate
Memorial Medical Ctr Modesto Hospitals
Modesto Police Dept Modesto Police Departments
Pacific Southwest Contnr LLC Modesto Corrugated & Solid Fiber Boxes (mfrs) Patterson City Sheriff Ofc Modesto City Government-Executive Offices Stanislaus County Ofc of Edu Modesto Education Centers
Storer Coachways Modesto Buses-Charter & Rental
Sysco Central Ca-Food Distr Modesto Grocers-Wholesale
Temsa Turlock Nonclassified Establishments
Turlock Irrigation District Turlock Utility Contractors Walmart Modesto Department Stores
Walmart Supercenter Patterson Department Stores
Walmart Supercenter Ceres Department Stores
Source: State of California Employment Development Department; extracted from America’s Labor Market Information System Employer Database, 2026 1st Edition.
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Building Activity
The following charts show the total number of residential building permits issued in the City and the County, the value of those permits and the value of non-residential permits, for each of the last five calendar years for which data is available, from calendar years 2020 through 2024.
CITY OF PATTERSON
Building Permit Valuation
(Dollars in Thousands)
2020 2021 2022 2023 2024
Permit Valuation
New Single-family $22,943.8 $24,297.3 $35,964.2 $69,985.6 $111,233.5 New Multi-family 0.0 0.0 5,040.2 0.0 508.3
Res. Alterations/Additions 83.6 210.7 1,473.6 1,075.8 279.7 Total Residential 23,027.4 24,508.0 42,478.0 71,061.4 112,021.5 New Commercial 1,609.9 2,504.1 3,997.1 141.1 406.8
New Industrial 0.0 0.0 0.0 0.0 0.0
New Other 888.0 1,616.0 4,209.2 1,323.4 16,976.0
Com Alterations/Additions 226.1 780.9 1,149.1 3,694.7 2,688.1 Total Nonresidential 2,724.0 4,901.0 9,355.4 5,159.2 20,070.9 New Dwelling Units
Single Family 98 86 84 188 300
Multiple Family 0 0 30 0 3
TOTAL 98 86 114 188 303
Source: Construction Industry Research Board, Building Permit Summary.
STANISLAUS COUNTY
Building Permit Valuation
(Dollars in Thousands)
Permit Valuation 2020 2021 2022 2023 2024
New Single-family $138,915.1 $165,543.8 $217,803.9 $270,120.0 $332,106.0 New Multi-family 18,152.6 17,992.0 12,867.1 6,394.3 5,795.2 Res. Alterations/Additions 31,153.3 27,562.7 40,236.7 35,460.9 54,574.9 Total Residential 188,221.0 211,098.5 270,907.7 311,975.2 392,476.1 New Commercial 665,798.9 167,721.6 131,558.5 165,228.6 61,778.7 New Industrial 17,429.8 14,000.0 120.0 1,442.0 13,273.6 New Other 30,371.3 34,862.0 54,393.4 112,108.4 131,391.6 Com. Alterations/Additions 68,270.3 47,614.7 155,867.6 141,622.9 138,101.1 Total Nonresidential 781,870.3 264,198.3 341,939.5 420,401.9 344,545.0 New Dwelling Units
Single Family 646 707 842 1,041 1,147
Multiple Family 110 80 109 85 47
TOTAL 756 787 951 1,126 1,194
Source: Construction Industry Research Board, Building Permit Summary.
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Taxable Sales
A summary of historic taxable sales within the City during the past five years in which data is available is shown in the following table. Total taxable sales during the first two quarters of calendar year 2025 in the City of Patterson were reported to be $526,309,857, a 2.58% increase over the total taxable sales of $513,089,337 reported during the first two quarters of calendar year 2024.
CITY OF PATTERSON
Taxable Transactions
(Dollars In Thousands)
Retail Stores Total All Outlets
Number
of Permits
Taxable
Transactions
Number
of Permits
Taxable
Transactions
2020 305 $256,562 472 $570,363
2021 317 751,927 463 1,061,667
2022 329 721,555 489 1,083,523
2023 311 720,640 466 1,106,992
2024 293 672,592 467 1,061,507
Source: State Department of Tax and Fee Administration.
A summary of historic taxable sales within the County during the past five years in which data is available is shown in the following table. Total taxable sales during the first two quarters of calendar year 2025 in the County were reported to be $6,148,488,824, a 0.19% decrease from the total taxable sales of $6,160,181,620 reported during the first two quarters of calendar year 2024.
STANISLAUS COUNTY
Taxable Transactions
(Dollars in Thousands)
Retail Stores Total All Outlets
Number
of Permits
Taxable
Transactions
Number
of Permits
Taxable
Transactions
2020 8,329 $6,882,397 13,500 $10,087,295
2021 7,848 8,695,930 12,854 12,336,565
2022 7,903 8,691,722 13,158 13,020,438
2023 7,641 8,722,391 12,837 12,803,798
2024 7,715 8,652,761 13,068 12,560,940
Source: State Department of Tax and Fee Administration.
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Effective Buying Income
“Effective Buying Income” is defined as personal income less personal tax and nontax payments, a number often referred to as “disposable” or “after-tax” income. Personal income is the aggregate of wages and salaries, other labor-related income (such as employer contributions to private pension funds), proprietor’s income, rental income (which includes imputed rental income of owner-occupants of non-farm dwellings), dividends paid by corporations, interest income from all sources, and transfer payments (such as pensions and welfare assistance). Deducted from this total are personal taxes (federal, state and local), nontax payments (fines, fees, penalties, etc.) and personal contributions to social insurance.
According to U.S. government definitions, the resultant figure is commonly known as “disposable personal income.”
The following table summarizes the total effective buying income for the City, the County, the State and the United States for the period 2022 through 2026.
CITY OF PATTERSON, STANISLAUS COUNTY,
STATE OF CALIFORNIA
Effective Buying Income
As of January 1, 2022 through 2026
Year Area
Total Effective
Buying Income
(000’s Omitted)
Median Household
Effective Buying
Income
2022 City of Patterson $541,652 $70,358
Stanislaus County 13,889,615 63,128
California 1,452,426,153 77,058
United States 11,208,582,541 64,448
2023 City of Patterson $561,791 $69,561
Stanislaus County 14,125,584 63,716
California 1,461,799,662 77,175
United States 11,454,846,397 65,326
2024 City of Patterson $699,712 $83,083
Stanislaus County 15,843,489 71,567
California 1,510,708,521 80,973
United States 11,987,185,826 67,876
2025 City of Patterson $667,129 $79,220
Stanislaus County 15,349,499 69,398
California 1,557,429,767 82,725
United States 12,525,577,707 69,687
2026 City of Patterson $762,621 $93,517
Stanislaus County 17,785,999 79,993
California 1,730,654,738 90,403
United States 13,932,177,817 75,433
Source: Claritas, LLC.
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APPENDIX B
RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX
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APPENDIX C
THE APPRAISAL
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APPENDIX D
FORM OF CONTINUING DISCLOSURE UNDERTAKING
This CONTINUING DISCLOSURE CERTIFICATE (this “Disclosure Certificate”) is executed and delivered by the WEST PATTERSON FINANCING AUTHORITY (the “Authority”) in connection with the execution and delivery of its West Patterson Financing Authority Community Facilities District No. 2005-1 (West Patterson Business Park) Special Tax Bonds Series 2026 (the “Bonds”). The Bonds are being executed and delivered pursuant to a Fiscal Agent Agreement, dated as of September 1, 2015, as supplemented and amended by a Supplemental Agreement No. 1 to Fiscal Agent Agreement dated as of December 1, 2021 and Supplemental Agreement No. 2 to Fiscal Agent Agreement dated as of _______, 2026 (collectively, the “Fiscal Agent Agreement”), by and between the Authority and U.S. Bank Trust Company, National Association, as fiscal agent (the “Fiscal Agent”).
The District covenants and agrees as follows:
Section 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the Authority for the benefit of the holders and beneficial owners of the Bonds and in order to assist the Participating Underwriter in complying with S.E.C. Rule 15c2-12(b)(5).
Section 2. Definitions. In addition to the definitions set forth above and in the Fiscal Agent Agreement, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section 2, the following capitalized terms shall have the following meanings:
“Annual Report” means any Annual Report provided by the Authority pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate. “Annual Report Date” means the date that is nine months after the end of the Authority’s fiscal year (currently April 1 based on the Authority’s fiscal year end of June 30). “Dissemination Agent” means Goodwin Consulting Group, Inc., or any successor Dissemination Agent designated in writing by the Authority and which has filed with the Authority a written acceptance of such designation.
“Listed Events” means any of the events listed in Section 5(a) of this Disclosure Certificate.
“MSRB” means the Municipal Securities Rulemaking Board, which has been designated by the Securities and Exchange Commission as the sole repository of disclosure information for purposes of the Rule, or any other repository of disclosure information that may be designated by the Securities and Exchange Commission as such for purposes of the Rule in the future. “Official Statement” means the final official statement executed by the Authority in connection with the issuance of the Bonds.
“Participating Underwriter” shall mean any of the original underwriters of the Bonds.
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“Rule” means Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as it may be amended from time to time.
Section 3. Provision of Annual Reports.
(a) The Authority shall, or shall cause the Dissemination Agent to, not later than the Annual Report Date, commencing April 1, 2027, with the report for the 2025-26 fiscal year, provide to the MSRB, in an electronic format as prescribed by the MSRB, an Annual Report that is consistent with the requirements of Section 4 of this Disclosure Certificate. Not later than 15 Business Days prior to the Annual Report Date, the Authority shall provide the Annual Report to the Dissemination Agent (if other than the Authority). If by 15 Business Days prior to the Annual Report Date the Dissemination Agent (if other than the Authority) has not received a copy of the Annual Report, the Dissemination Agent shall contact the Authority to determine if the Authority is in compliance with the previous sentence. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may include by reference other information as provided in Section 4 of this Disclosure Certificate; provided that the audited financial statements of the Authority may be submitted separately from the balance of the Annual Report, and later than the Annual Report Date, if not available by that date. If the Authority’s fiscal year changes, it shall give notice of such change in the same manner as for a Listed Event under Section 5(b). The Authority shall provide a written certification with each Annual Report furnished to the Dissemination Agent to the effect that such Annual Report constitutes the Annual Report required to be furnished by the Authority hereunder. (b) If the Authority does not provide (or cause the Dissemination Agent to provide) an Annual Report by the Annual Report Date, the Authority shall provide (or cause the Dissemination Agent to provide) to the MSRB, in an electronic format as prescribed by the MSRB, a notice to such effect in substantially the form prescribed by the MSRB. (c) With respect to each Annual Report, the Dissemination Agent shall:
(i) determine prior to each Annual Report Date the then-applicable rules and electronic format prescribed by the MSRB for the filing of annual continuing disclosure reports; and
(ii) if the Dissemination Agent is other than the Authority , file a report with the Authority certifying that the Annual Report has been provided pursuant to this Disclosure Certificate, and stating the date it was provided.
Section 4. Content of Annual Reports. The Authority’s Annual Report shall contain or incorporate by reference the following:
(a) The Authority’s audited financial statements prepared in accordance with generally accepted accounting principles as promulgated to apply to governmental entities from time to time by the Governmental Accounting Standards Board. If the Authority’s audited financial statements are not available by the Annual Report Date, the Annual Report shall contain unaudited financial statements in a format similar to the financial statements contained in the Official Statement, and the audited financial statements shall be filed in the same manner as the Annual Report when they become available.
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(b) The following information:
(i) Principal amount of all outstanding bonds of the District. (ii) Balance in the Improvement Fund.
(iii) Balance in debt service reserve fund, and statement of the reserve fund requirement. Statement of projected reserve fund draw, if any. (iv) Balance in other funds and accounts held by Issuer or fiscal agent related to the Bonds.
(v) Additional debt authorized by the Authority and payable from or secured by assessments or special taxes with respect to property within the District. (vi) The Special Tax levy, the delinquency rate, total amount of delinquencies, number of parcels delinquent in payment for the five most recent fiscal years. (vii) Notwithstanding the June 30th reporting date for the Annual Report, the following information shall be reported as of the last day of the month immediately preceding the date of the Annual Report rather than as of June 30th. Identity of each delinquent taxpayer responsible for 5 percent or more of total special tax/assessment levied, and the following information:
assessor parcel number, assessed value of applicable properties, amount of Special Tax levied, amount delinquent by parcel number and status of foreclosure proceedings. If any foreclosure has been completed, summary of results of foreclosure sales or transfers. (viii) Most recently available total assessed value of all parcels subject to the special tax or assessment.
(ix) List of landowners and assessor’s parcel number of parcels subject to 20 percent or more of the Special Tax levy including the following information: development status to the extent shown in Authority records, land use classification, assessed value (land and improvements).
(c) In addition to any of the information expressly required to be provided under this Disclosure Certificate, the Authority shall provide such further material information, if any, as may be necessary to make the specifically required statements, in the light of the circumstances under which they are made, not misleading.
(d) Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues of the Authority or related public entities, which are available to the public on the MSRB’s Internet web site or filed with the Securities and Exchange Commission. The Authority shall clearly identify each such other document so included by reference.
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Section 5. Reporting of Significant Events.
(a) The Authority shall give, or cause to be given, notice of the occurrence of any of the following Listed Events with respect to the Bonds:
(1) Principal and interest payment delinquencies.
(2) Non-payment related defaults, if material.
(3) Unscheduled draws on debt service reserves reflecting financial difficulties.
(4) Unscheduled draws on credit enhancements reflecting financial difficulties.
(5) Substitution of credit or liquidity providers, or their failure to perform. (6) Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the security, or other material events affecting the tax status of the security.
(7) Modifications to rights of security holders, if material. (8) Bond calls, if material, and tender offers.
(9) Defeasances.
(10) Release, substitution, or sale of property securing repayment of the securities, if material.
(11) Rating changes.
(12) Bankruptcy, insolvency, receivership or similar event of the City or other obligated person.
(13) The consummation of a merger, consolidation, or acquisition involving the City or an obligated person, or the sale of all or substantially all of the assets of the City or an obligated person (other than in the ordinary course of business), the entry into a definitive agreement to undertake such an action, or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material. (14) Appointment of a successor or additional trustee or the change of name of a trustee, if material.
(15) Incurrence of a financial obligation of the City, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a financial obligation of the City, any of which affect security holders, if material (for the definition of “financial obligation,” see clause (e) below).
(16) Default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a financial obligation of the City, any of which reflect financial difficulties (for the definition of “financial obligation,” see clause (e) below).
(b) Whenever the City obtains knowledge of the occurrence of a Listed Event, the City shall, or shall cause the Dissemination Agent (if not the City) to, file a notice of such occurrence with the MSRB, in an electronic format as prescribed by the MSRB, in a timely manner not in excess of 10 business days after the occurrence of the Listed Event.
Notwithstanding the foregoing, notice of Listed Events described in subsections (a)(8) and (9) above need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to holders of affected Bond holders.
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(c) The City acknowledges that the events described in subparagraphs (a)(2), (a)(7), (a)(8) (if the event is a Bond call), (a)(10), (a)(13), (a)(14) and (a)(15) of this Section 5 contain the qualifier “if material” and that subparagraph (a)(6) also contains the qualifier “material” with respect to certain notices, determinations or other events affecting the tax status of the Bonds.
The City shall cause a notice to be filed as set forth in paragraph (b) above with respect to any such event only to the extent that it determines the event’s occurrence is material for purposes of U.S. federal securities law. Whenever the City obtains knowledge of the occurrence of any of these Listed Events, the City will as soon as possible determine if such event would be material under applicable federal securities law. If such event is determined to be material, the City will cause a notice to be filed as set forth in paragraph (b) above. (d) For purposes of this Disclosure Agreement, any event described in paragraph (a)(12) above is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent, or similar officer for the City in a proceeding under the United States Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the City, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement, or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the City. (e) For purposes of Section 5(a)(15) and 5(a)(16), “financial obligation” means a (i) debt obligation; (ii) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (iii) guarantee of (i) or (ii). The term financial obligation shall not include municipal securities as to which a final official statement has been provided to the Municipal Securities Rulemaking Board consistent with the Rule.
Section 6. Identifying Information for Filings with the MSRB. All documents provided to the MSRB pursuant to this Disclosure Agreement shall be accompanied by identifying information as prescribed by the MSRB.
Section 7. Termination of Reporting Obligation. The Authority’s obligations under this Disclosure Agreement shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds. If such termination occurs prior to the final maturity of the Bonds, the Authority shall give notice of such termination in the same manner as for a Listed Event under Section 5(b).
Section 8. Dissemination Agent. The Authority may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Agreement, and may discharge any Dissemination Agent, with or without appointing a successor Dissemination Agent. Any Dissemination Agent may resign by providing 30 days’ written notice to the Authority.
Section 9. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Agreement, the Authority may amend this Disclosure Agreement, and any provision of this Disclosure Agreement may be waived, provided that the following conditions are satisfied:
(a) if the amendment or waiver relates to the provisions of Sections 3(a), 4 or 5(a), it may only be made in connection with a change in circumstances that arises from
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a change in legal requirements, change in law, or change in the identity, nature, or status of an obligated person with respect to the Bonds, or type of business conducted; (b) the undertakings herein, as proposed to be amended or waived, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the primary offering of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and (c) the proposed amendment or waiver either (i) is approved by holders of the Bonds in the manner provided in the Fiscal Agent Agreement for amendments to the Fiscal Agent Agreement with the consent of holders, or (ii) does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the holders or beneficial owners of the Bonds.
If the annual financial information or operating data to be provided in the Annual Report is amended pursuant to the provisions hereof, the first Annual Report filed pursuant hereto containing the amended operating data or financial information shall explain, in narrative form, the reasons for the amendment and the impact of the change in the type of operating data or financial information being provided.
If an amendment is made to this Disclosure Agreement modifying the accounting principles to be followed in preparing financial statements, the Annual Report for the year in which the change is made shall present a comparison between the financial statements or information prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. The comparison shall include a qualitative discussion of the differences in the accounting principles and the impact of the change in the accounting principles on the presentation of the financial information, in order to provide information to investors to enable them to evaluate the ability of the Authority to meet its obligations. To the extent reasonably feasible, the comparison shall be quantitative.
A notice of any amendment made pursuant to this Section 9 shall be filed in the same manner as for a Listed Event under Section 5(b).
Section 10. Additional Information. Nothing in this Disclosure Agreement shall be deemed to prevent the Authority from disseminating any other information, using the means of dissemination set forth in this Disclosure Agreement or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Agreement. If the Authority chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Agreement, the Authority shall have no obligation under this Disclosure Agreement to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event.
Section 11. Default. If the Authority fails to comply with any provision of this Disclosure Agreement, the Participating Underwriter or any holder or beneficial owner of the Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the Authority to comply with its obligations under this Disclosure Agreement. A default under this Disclosure Agreement shall not be deemed an Event of Default under the Fiscal Agent Agreement, and the sole remedy under this Disclosure Agreement in the event of any failure of the Authority to comply with this Disclosure Agreement shall be an action to compel performance.
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Section 12. Duties, Immunities and Liabilities of Dissemination Agent. (a) The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Agreement, and the Authority agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which they may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent’s negligence or willful misconduct. The Dissemination Agent shall have no duty or obligation to review any information provided to it by the Authority hereunder, and shall not be deemed to be acting in any fiduciary capacity for the Authority, the Bond holders or any other party. The obligations of the Authority under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds.
(b) The Dissemination Agent shall be paid compensation by the Authority for its services provided hereunder in accordance with its schedule of fees as amended from time to time, and shall be reimbursed for all expenses, legal fees and advances made or incurred by the Dissemination Agent in the performance of its duties hereunder.
Section 13. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit of the Authority, the Dissemination Agent, the Participating Underwriter and the holders and beneficial owners from time to time of the Bonds, and shall create no rights in any other person or entity.
Section 14. Counterparts. This Disclosure Agreement may be executed in several counterparts, each of which shall be regarded as an original, and all of which shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Disclosure Certificate as of the date first above written.
WEST PATTERSON FINANCING
AUTHORITY, for and on behalf of West
Patterson Financing Authority Community
Facilities District No. 2005-1 (West
Patterson Business Park)
By:
Authorized Officer
GOODWIN CONSULTING GROUP, INC.,
as Dissemination Agent
By:
Authorized Officer
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APPENDIX E
FORM OF OPINION OF BOND COUNSEL
________________, 2026
Board of Directors
West Patterson Financing Authority
1 Plaza
Patterson, California 95363
OPINION: $____________ West Patterson Financing Authority Community Facilities District No. 2005-1 (West Patterson Business Park) Special Tax Bonds Series 2026
Members of the Board:
We have acted as bond counsel in connection with the issuance by the West Patterson Financing Authority (the “Authority”) of $____________ West Patterson Financing Authority Community Facilities District No. 2005-1 (West Patterson Business Park) Special Tax Bonds Series 2026 (the “Bonds”), pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, constituting Section 53311, et seq. of the California Government Code (the “Act”) and a Fiscal Agent Agreement dated as of September 1, 2015 as supplemented and amended by a Supplemental Agreement No. 1 to Fiscal Agent Agreement dated as of December 1, 2021 and a Supplemental Agreement No. 2 to Fiscal Agent Agreement dated as of _______, 2026 (collectively, the “Fiscal Agent Agreement”) by and between the Authority, for and on behalf of the West Patterson Financing Authority Community Facilities District No. 2005-1 (West Patterson Business Park), and U.S. Bank Trust Company, National Association, as fiscal agent.
We have examined the law and such certified proceedings and other papers as we deem necessary to render this opinion.
As to questions of fact material to our opinion, we have relied upon representations of the Authority contained in the Fiscal Agent Agreement, and in the certified proceedings and other certifications of public officials furnished to us, without undertaking to verify the same by independent investigation.
Based upon the foregoing, we are of the opinion, under existing law, as follows:
1. The Authority is duly created and validly existing as a public body, corporate and politic, with the power to adopt the resolution authorizing the issuance of the Bonds (the “Resolution”), enter into the Fiscal Agent Agreement and perform the agreements on its part contained therein, and issue the Bonds.
2. The Bonds have been duly authorized, executed and delivered by the Authority and are valid and binding limited obligations of the Authority, payable solely from the sources provided therefor in the Fiscal Agent Agreement.
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3. The Fiscal Agent Agreement has been duly entered into by the Authority and constitutes a valid and binding obligation of the Authority enforceable upon the Authority.
4. Pursuant to the Act, the Fiscal Agent Agreement creates a valid lien on the funds pledged by the Fiscal Agent Agreement.
5. The interest on the Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax. The opinions set forth in the preceding sentence are subject to the condition that the Authority comply with all requirements of the Internal Revenue Code of 1986 that must be satisfied subsequent to the issuance of the Bonds in order that interest thereon be, or continue to be, excluded from gross income for federal income tax purposes. The Authority has covenanted to comply with each such requirement. Failure to comply with certain of such requirements may cause the inclusion of interest on the Bonds in gross income for federal income tax purposes to be retroactive to the date of issuance of the Bonds.
6. The interest on the Bonds is exempt from personal income taxation imposed by the State of California.
Interest on the Bonds may be subject to the corporate alternative minimum tax. We express no opinion regarding other federal tax consequences arising with respect to the ownership, sale or disposition of the Bonds, or the amount, accrual or receipt of interest on the Bonds.
The rights of the owners of the Bonds and the enforceability of the Bonds, the Resolution and the Fiscal Agent Agreement may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors’ rights generally, and by equitable principles, whether considered at law or in equity.
This opinion is given as of the date hereof, and we assume no obligation to revise or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention, or any changes in law that may hereafter occur. Moreover, our opinions are not a guarantee of a particular result, and are not binding on the Internal Revenue Service or any court; rather, our opinions represent our legal judgment based upon our review of existing law that we deem relevant to such opinions and in reliance upon the representations and covenants referenced above. Our engagement with respect to this matter has terminated as of the date hereof.
Respectfully submitted,
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APPENDIX F
DTC AND THE BOOK-ENTRY SYSTEM
Book-Entry System
DTC will act as securities depository for the Bonds. The Bonds will be issued as fullyregistered bonds registered in the name of Cede & Co. (DTC’s partnership nominee). One fully-registered Bond will be issued for each maturity of the Bonds, each in the aggregate principal amount of such maturity, and will be deposited with DTC. DTC is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds securities that its participants (the “Participants”) deposit with DTC. DTC also facilitates the settlement among Participants of securities transactions, such as transfers and pledges, in deposited securities through electronic computerized book-entry changes in Participants’ accounts, thereby eliminating the need for physical movement of securities certificates. “Direct Participants” include securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is owned by a number of its Direct Participants and by the New York Stock Exchange, Inc., the American Stock Exchange, Inc. and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as securities brokers and dealers, banks, and trust companies that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). The Rules applicable to DTC and its Participants are on file with the Securities and Exchange Commission.
Purchases of the Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC’s records. The ownership interest of each actual purchaser of each Bond (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase, but Beneficial Owners are expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction.
Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Bonds, except in the event that use of the book-entry system for the Bonds is discontinued. To facilitate subsequent transfers, all Bonds deposited by Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co. The deposit of Bonds with DTC and their registration in the name of Cede & Co. effect no change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC’s records reflect only the identity of the Direct Participants to whose accounts such securities are credited, which may or may not be the Beneficial Owners. The Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time.
Redemption notices shall be sent to Cede & Co. If less than all of the bonds within an issue are being redeemed, DTC’s practice is to determine by lot the amount of the interest of
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each Direct Participant in such issue to be redeemed. Neither DTC nor Cede & Co. will consent or vote with respect to the Bonds. Under its usual procedures, DTC mails an Omnibus Proxy to an issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts the Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).
Principal, mandatory redemption and interest payments on the Bonds will be made to DTC. DTC’s practice is to credit Direct Participants’ accounts on payment dates in accordance with their respective holdings shown on DTC’s records unless DTC has reason to believe that it will not receive payment on the date payable. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC, the Fiscal Agent or the Authority, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal and interest to DTC is the responsibility of the Authority or the Fiscal Agent, disbursement of such payments to Direct Participants shall be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners shall be responsibility of Direct and Indirect Participants.
The Authority cannot and does not give any assurances that DTC, DTC Participants or others will distribute payments of principal, interest or premium with respect to the Bonds paid to DTC or its nominee as the registered owner, or will distribute any redemption notices or other notices, to the Beneficial Owners, or that they will do so on a timely basis or will serve and act in the manner described in this Official Statement. The Authority is not responsible or liable for the failure of DTC or any DTC Participant to make any payment or give any notice to a Beneficial Owner with respect to the Bonds or an error or delay relating thereto.
The foregoing description of the procedures and record-keeping with respect to beneficial ownership interests in the Bonds, payment of principal, interest and other payments on the Bonds to DTC Participants or Beneficial Owners, confirmation and transfer of beneficial ownership interests in such Bonds and other related transactions by and between DTC, the DTC Participants and the Beneficial Owners is based solely on information provided by DTC.
Accordingly, no representations can be made concerning these matters and neither the DTC Participants nor the Beneficial Owners should rely on the foregoing information with respect to such matters, but should instead confirm the same with DTC or the DTC Participants, as the case may be.
Discontinuance of Book-Entry System
DTC may discontinue providing its services with respect to the Bonds at any time by giving notice to the Fiscal Agent and discharging its responsibilities with respect thereto under applicable law or the Authority may terminate participation in the system of book-entry transfers through DTC or any other securities depository at any time. In the event that the book-entry system is discontinued, the Authority will execute, and the Fiscal Agent will authenticate and make available for delivery, replacement Bonds in the form of registered bonds. In addition, the principal of and redemption premium, if any, on the Bonds will be payable as set forth in the Fiscal Agent Agreement and summarized in the Official Statement under the caption “THE BONDS – Description of the Bonds.” Bonds will be transferable and exchangeable on the terms and conditions provided in the Fiscal Agent Agreement and summarized in the Official Statement under the caption “THE BONDS – Transfer or Exchange of Bonds.”
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BOND PURCHASE AGREEMENT
$__________
WEST PATTERSON FINANCING AUTHORITY
COMMUNITY FACILITIES DISTRICT NO. 2005-1
(WEST PATTERSON BUSINESS PARK)
SPECIAL TAX BONDS
SERIES 2026
[BPA Date]
West Patterson Financing Authority
1 Plaza
P.O. Box 667
Patterson, California 95363
Ladies and Gentlemen:
The undersigned, Hilltop Securities Inc. (the “Underwriter”) offers to enter into the following agreement (this “Bond Purchase Agreement”) with the West Patterson Financing Authority (the “Authority”) acting for and on behalf of the West Patterson Financing Authority Community Facilities District No. 2005-1 (West Patterson Business Park) (the “Community Facilities District”), which, upon the acceptance by the Authority of this offer, will be binding upon the Authority and the Underwriter. This offer is made subject to the Authority’s written acceptance hereof on or before 11:59 p.m. Pacific time, on the date hereof, and, if not so accepted, will be subject to withdrawal by the Underwriter upon written notice delivered to the Authority at any time prior to the acceptance hereof by the Authority. Terms not otherwise defined in this Bond Purchase Agreement shall have the same meanings set forth in the Fiscal Agent Agreement (as defined herein) or in the Official Statement (as defined herein).
1. Purchase and Sale of the Bonds. Subject to the terms and conditions and in reliance upon the representations and agreements set forth herein, the Underwriter hereby agrees to purchase from the Authority, and the Authority hereby agrees to sell and deliver to the Underwriter, all, but not less than all, of the West Patterson Financing Authority Community Facilities District No. 2005- 1 (West Patterson Business Park) Special Tax Bonds, Series 2026 (the “Bonds”).
The principal amount of the Bonds to be issued, the dated date therefor, the maturities, redemption provisions and interest rates per annum are set forth in Exhibit A hereto and as further described in the Official Statement. The Bonds shall be as described in, and shall be issued and secured under and pursuant to the provisions of a Fiscal Agent Agreement, dated as of September 1, 2015 (the “2015 Fiscal Agent Agreement”) as supplemented and amended, including by a Supplemental Agreement No. 2 to Fiscal Agent Agreement dated as of _______ 1, 2026 (“Supplemental Agreement No. 2” and together with the 2015 Fiscal Agent Agreement and any supplement thereto, the “Fiscal Agent Agreement”), between the Authority and U.S. Bank Trust Company, National Association (“BNYM”), as fiscal agent (the “Fiscal Agent”). The Bonds are being issued pursuant to the Fiscal Agent Agreement and the Mello-Roos Community Facilities Act of 1982, as amended, being California Government Code Section 53311, et seq. (the “Act”).
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2 The Underwriter has agreed to purchase all (but not less than all) of the Bonds from the Authority at a purchase price of $_______ (being 100% of the aggregate principal amount thereof, plus a net original issue premium of $______ and less an Underwriter’s discount of $_____).
The Bonds are being issued to ((i) construct and acquire certain public facilities authorized for the Community Facilities District, (ii) provide for the establishment of a reserve account, and (iii) pay the costs of issuance of the Bonds. The Bonds are payable from the proceeds of an annual Special Tax to be levied on property located within the Community Facilities District, and from certain funds pledged under the Fiscal Agent Agreement. The Bonds are being issued on a parity with the Authority’s Community Facilities District No. 2005-1 (West Patterson Business Park) Special Tax Bonds, Series 2015 (the “2015 Bonds”) and the Authority’s Community Facilities District No. 2005-1 (West Patterson Business Park) Special Tax Bonds, Series 2021 (the “2021 Bonds”).
2. Public Offering. The Underwriter agrees to make a bona fide public offering of all of the Bonds at a price not to exceed the public offering price set forth on the inside cover of the Official Statement and as set forth in Exhibit A. The Underwriter may offer and sell Bonds to certain dealers (including dealers depositing Bonds into investment trusts) and others at prices lower than the public offering price stated on the cover of the Official Statement. The Underwriter shall indemnify and hold harmless the Authority and its members, officers, directors, employees, agents and attorneys against any and all claims, damages, liabilities, costs and expenses (including fees and disbursements of counsel) incurred by them or any of them, which arise out of a breach by the Underwriter of the representations and warranties contained in this paragraph.
The Underwriter has been duly authorized to execute this Bond Purchase Agreement and to act hereunder. Inasmuch as the purchase and sale of the Bonds represents a negotiated transaction, the Authority acknowledges and agrees that (i) the transaction contemplated by this Bond Purchase Agreement is an arm’s length, commercial transaction between the Authority and the Underwriter in which the Underwriter is acting solely as a principal and is not acting as a municipal advisor, financial advisor or fiduciary to the Authority; (ii) the Underwriter has not assumed any advisory or fiduciary responsibility to the Authority with respect to the transaction contemplated hereby and the discussions, undertakings and procedures leading thereto (irrespective of whether the Underwriter has provided other services or is currently providing other services to the Authority on other matters); (iii) the Underwriter is acting solely in its capacity as Underwriter for its own account; (iv) the only contractual obligations the Underwriter has to the Authority with respect to the transaction contemplated hereby expressly are set forth in this Bond Purchase Agreement; (v) the Underwriter has financial and other interests that differ from those of the Authority; and (vi) the Authority has consulted its own legal, accounting, tax, financial and other advisors, as applicable, to the extent it has deemed appropriate. Nothing in the foregoing paragraph is intended to limit the Underwriter’s obligations of fair dealing under MSRB Rule G-17 of the MSRB.
3. The Official Statement.
(a) The Authority hereby ratifies, confirms and approves of the use and distribution by the Underwriter prior to the date hereof of the preliminary official statement relating to the Bonds, dated [POS Date] (including the cover page and all appendices thereto and as supplemented, if any, the “Preliminary Official Statement”). The Authority hereby confirms that the Authority has deemed final the Preliminary Official Statement for purposes of Rule 15c2-12 promulgated under the Securities Exchange Act of 1934 (“Rule 15c2-12”). The Authority hereby agrees to deliver or cause
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3 to be delivered to the Underwriter, within seven (7) business days of the date hereof, copies of the final official statement, dated the date hereof, relating to the Bonds (including all information previously permitted to have been omitted by Rule 15c2-12 and any amendments or supplements as have been approved by the Authority and the Underwriter, the “Official Statement”) in such quantity as the Underwriter shall request in order to permit the Underwriter to comply with Rule 15c2-12. The Authority hereby approves of the use and distribution by the Underwriter of the Official Statement in connection with the offer and sale of the Bonds. (b) The Underwriter hereby agrees to file the Official Statement with the MSRB.
4. Representations and Agreements of the Authority. The Authority hereby represents to and agrees with the Underwriter that:
(a) The Authority is duly organized and validly existing as a joint powers authority under the laws of the State of California and has duly authorized the formation of the Community Facilities District pursuant to the Resolution of Formation (the “Resolution of Formation”) and the Act and the Board of Directors of the Authority (the “Board of Directors”), acting as the legislative body of the Community Facilities District, has duly adopted the District Resolutions (defined herein) and has caused to be recorded in the real property records of the County of Stanislaus a Notice of Special Tax Lien for the Community Facilities District (the “Notice of Special Tax Lien”) (such District Resolutions and Notice of Special Tax Lien being collectively referred to herein as the “Formation Documents”) and each of the Formation Documents remains in full force and effect as of the date hereof and the Authority has full power and authority to adopt on ______, 2026 its resolution authorizing the issuance of the Bonds (the “Resolution” and together with the “Resolution of Formation” the “District Resolutions”) and to enter into and to perform its obligations under the Fiscal Agent Agreement, the Continuing Disclosure Agreement and this Bond Purchase Agreement (collectively, the “Authority Documents”); and when executed and delivered by the respective parties thereto, the Authority Documents will constitute the legal, valid and binding obligations of the Authority enforceable against the Authority in accordance with their respective terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium and other laws relating to or affecting creditors' rights, to the application of equitable principles, to the exercise of judicial discretion in appropriate cases and to the limitations on legal remedies against joint powers agencies in the State of California; (b) By official action of the Authority prior to or concurrently with the acceptance hereof, the Authority has approved and authorized the distribution of the Preliminary Official Statement and the Official Statement and authorized and approved the execution and delivery of the Authority Documents and the consummation by the Authority of the transactions contemplated thereby;
(c) To the knowledge of the Authority, there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, governmental agency, public board or body pending against the Authority seeking to restrain or enjoin the sale or issuance of the Bonds, or in any way contesting or affecting any proceedings of the Authority taken concerning the sale thereof, the pledge or application of any moneys or security provided for the payment of the Bonds, in any way contesting the validity or enforceability of the Authority Documents or contesting in any way the completeness or accuracy of the Preliminary Official Statement or the Official Statement or the existence or powers of the Authority relating to the sale of the Bonds;
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4 (d) To the knowledge of the Authority, the statements and information relating to the Authority and the Community Facilities District contained in the Preliminary Official Statement, as of the date thereof, did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading in any material respect; (e) To the knowledge of the Authority, the statements and information relating to the Authority and the Community Facilities District contained in the Official Statement are true and correct in all material respects, and the information relating to the Authority and the Community Facilities District contained in the Official Statement does not contain an untrue statement of a material fact or omit any statement or information relating to the Authority and the Community Facilities District which is necessary to make such statements and information therein, in the light of the circumstances under which they were made, not misleading in any material respect; (f) The Special Tax has been duly and lawfully authorized and may be levied under the Act, the State Constitution and the applicable laws of the State; (g) The Authority will furnish such information, execute such instruments and take such other action in cooperation with the Underwriter, at the expense of the Underwriter as the Underwriter may reasonably request in endeavoring (i) to qualify the Bonds for offer and sale under the Blue Sky or other securities laws and regulations of such states and other jurisdictions of the United States as the Underwriter may designate and (ii) to determine the eligibility of the Bonds for investment under the laws of such states and other jurisdictions, and will use its best efforts to continue such qualification in effect so long as required for distribution of the Bonds; provided, however, that in no event shall the Authority be required to take any action which would subject it to general or unlimited service of process in any jurisdiction in which it is not now so subject; (h) The Fiscal Agent Agreement creates a valid pledge of the Special Tax Revenues and the moneys in the Special Tax Fund, the Bond Fund and the Reserve Fund established pursuant to the Fiscal Agent Agreement, including the investments thereof, subject in all cases to the provisions of the Fiscal Agent Agreement permitting the application thereof for the purposes and on the terms and conditions set forth therein;
(i) To the knowledge of the Authority, the execution and delivery by the Authority of the Authority Documents and compliance with the provisions on the Authority's part contained therein will not conflict with or constitute a material breach of or default under any law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the Authority is a party or is otherwise subject, nor will any such execution, delivery, adoption or compliance result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the properties or assets of the Authority under the terms of any such law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument, except as provided by the Authority Documents;
(j) If before the earlier of the date 25 days from the “end of the underwriting period” (as defined in Rule 15c2-12) or the date all of the Bonds are sold (which the Authority may assume is the Closing Date unless otherwise informed in writing by the Underwriter), an event occurs which, in the reasonable opinion of the Underwriter or its counsel, might or would cause the information contained in the Official Statement as then supplemented or amended, to contain an untrue statement of a
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5 material fact or to omit to state a material fact necessary to make such information therein, in the light of the circumstances under which it was presented, not misleading, the Authority, if requested by the Underwriter, will cooperate in amending or supplementing the Official Statement in a form and in a manner approved by the Underwriter;
(k) During the period described in the preceding paragraph, (i) the Authority will not participate in the issuance of any amendment of or supplement to the Official Statement to which, after being furnished with a copy, the Underwriter shall reasonably object in writing and (ii) if any event relating to or affecting the Authority shall occur as a result of which it is necessary, in the opinion of counsel for the Underwriter, to amend or supplement the Official Statement in order to make the Official Statement not misleading in the light of the circumstances existing at the time it is delivered to a purchaser of the Bonds, the Authority will cooperate with the Underwriter to prepare and furnish to the Underwriter a reasonable number of copies of an amendment of or supplement to the Official Statement (in form and substance satisfactory to counsel for the Underwriter) which will amend or supplement the Official Statement so that it will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances existing at the time the Official Statement is delivered to a purchaser of the Bonds, not misleading;
(l) Based on a review of its prior undertakings, and except as otherwise disclosed in the Preliminary Official Statement and Official Statement, within the last five years, the Authority has not failed to comply in all material respects with any reporting obligation that it has undertaken under Rule 15c2-12 for any indebtedness issued by the Authority; and (m) The execution and delivery of this Bond Purchase Agreement by the Authority shall constitute a representation by the Authority to the Underwriter that the representations and agreements contained in this Section are true as of the date hereof; provided, however, that as to all matters of law the Authority is relying on the advice of bond counsel to the Authority; and provided further, that no member, director, officer, agent or employee of the Authority shall be individually liable for the breach of any representation, warranty or agreement contained herein.
5. Closing. At 8:00 a.m., California time, on [Closing Date], (the “Closing Date”) or at such other time and date as shall have been mutually agreed upon by the Authority and the Underwriter (the “Closing”), the Authority will, subject to the terms and conditions hereof, deliver to the Underwriter the Bonds in definitive fully registered form, bearing CUSIP numbers without coupons, with one Bond for each maturity of the Bonds, registered in the name of Cede & Co., as nominee of DTC, and subject to the terms and conditions hereof and as provided in the Fiscal Agent Agreement, the Underwriter will accept such delivery and pay the purchase price of the Bonds by wire transfer to the Fiscal Agent payable in immediately available Federal funds. The Bonds shall be made available for inspection by the Underwriter at least one business day before the Closing.
6. Closing Conditions. The Underwriter has entered into this Bond Purchase Agreement in reliance upon the representations and agreements of the Authority contained herein, and in reliance upon the representations, warranties and agreements to be contained in the documents and instruments to be delivered at the Closing and upon the performance by the Authority of its obligations hereunder, both as of the date hereof and as of the date of the Closing. Accordingly, the Underwriter’s obligations under this Bond Purchase Agreement to purchase, to accept delivery of and to pay for the Bonds shall be conditioned upon the performance by the Authority of its obligations to be performed hereunder and under such documents and instruments at or prior to the
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6 Closing, and shall also be subject to the following additional conditions, including the delivery by the Authority of such documents as are enumerated herein, in form and substance reasonably satisfactory to the Underwriter:
(a) The Authority shall be in compliance with each of the agreements made by it in this Bond Purchase Agreement (unless such agreements are waived by the Underwriter); and there shall not have occurred an adverse change in the financial position, results of operations or financial condition of the Authority or the Community Facilities District that materially adversely affects the ability of the Authority to levy the Special Taxes, to pay principal and interest on the Bonds when due or otherwise perform any of its obligations under the Fiscal Agent Agreement; (b) The Authority Documents shall be in full force and effect, and shall not have been amended, modified or supplemented in any material respect from the forms of such documents which have been provided to the Underwriter as of the date hereof (except as may be agreed to by the Underwriter); and the Authority shall perform or shall have performed its obligations required under or specified in this Bond Purchase Agreement to be performed at or prior to the Closing; (c) At the time of the Closing, the Official Statement (as amended and supplemented) shall be true and correct in all material respects, and shall not contain any untrue statement of a material fact or omit any statement or information necessary to make the statements therein, in the light of circumstances under which they were made, not misleading; (d) Except as disclosed in the Official Statement, no decision, ruling or finding shall have been entered by any court or governmental entity since the date of this Bond Purchase Agreement (and not reversed on appeal or otherwise set aside) which in the reasonable opinion of the Underwriter materially adversely affects the market for the Bonds; (e) (i) No default by the Authority shall have occurred and be continuing in the payment of the principal of or premium, if any, or interest on any bond, note or other evidence of indebtedness issued by the Authority, and (ii) no bankruptcy, insolvency or other similar proceeding in respect of the Authority shall be pending nor to the knowledge of the Authority, contemplated; (f) At or prior to the Closing, the Underwriter shall receive the following documents:
(1) Bond Counsel Opinion. The opinion of Jones Hall LLP (“Bond Counsel”), dated the Closing Date, in substantially the form included in the Official Statement as Appendix E, addressed to the Authority.
(2) Supplemental Opinion. A supplemental opinion of Bond Counsel, substantially in the form attached hereto as Exhibit B. (3) Letter of Disclosure Counsel. A letter, dated the Closing Date and addressed to the Underwriter and the Authority, of Jones Hall LLP, acting as Disclosure Counsel, to the effect that no facts have come to the attention of the attorneys in such firm rending legal services in connection with the Bonds that cause them to believe that the Preliminary Official Statement as of its date and as of the date hereof and the Official Statement, as of its date or as of the date of Closing, contained or contains any untrue statement of a material fact or omitted or omits to state any material fact necessary to make the statement made therein, in light of the circumstances under which they were made, not misleading.
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7 (4) Opinion of Authority Counsel. An opinion of counsel to the Authority, in form and substance satisfactory to the Underwriter dated the Closing Date, addressed to the Underwriter, substantially to the effect that:
(i) to the best of their knowledge and except as disclosed in the Official Statement, no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, regulatory agency, public board or body is pending with respect to which the Authority has been served with process is otherwise known to be threatened which would materially adversely affect the ability of the Authority to perform its obligations under the Bonds, the Formation Documents or the Authority Documents, or seeking to restrain or to enjoin the issuance, sale or delivery of the Bonds or the application of the proceeds thereof in accordance with the Fiscal Agent Agreement, or the collection or application of the Special Tax to pay the principal of and interest on the Bonds, or in any way contesting or affecting the validity or enforceability of the Bonds, the Formation Documents or the Authority Documents or the accuracy of the Official Statement, or any action of the Authority contemplated by any of said documents;
(ii) the Authority is duly organized and validly existing as a joint powers authority under the laws of the State and the Community Facilities District is duly organized and validly existing as a community facilities district under the laws of the State, and the Authority has full legal right, power and authority to perform all of its obligations under the Formation Documents and the Authority Documents; (iii) the Board of Directors has duly and validly adopted the District Resolutions at meetings of the Board of Directors which were called and held pursuant to law and with all public notice required by law and at which a quorum was present and acting throughout and the District Resolutions are now in full force and effect; and
(iv) the Authority has duly authorized the Authority Documents and has duly authorized the preparation and delivery of the Official Statement and the Authority Documents constitute legal, valid and binding agreements of the Authority, enforceable against the Authority in accordance with their respective terms, subject to bankruptcy , insolvency, reorganization, moratorium and other laws affecting the enforcement of creditors’ rights in general and to the application of equitable principles if equitable remedies are sought and to the limitation on legal remedies against public agencies in the State.
(5) Closing Certificate of Authority. A certificate of the Authority, dated the date of the Closing, signed on behalf of the Authority by a duly authorized representative of the Authority to the effect that, (i) the representations contained in Section 4 of this Bond Purchase Agreement are true and correct in all material respects as of the Closing Date; (ii) to the best of his or her knowledge, no event has occurred since the date of the Official Statement or the date hereof affecting such matters contained therein which should be disclosed in the Official Statement for the purposes for which it is to be used in order to make the statements and information contained in the Official Statement not misleading in any material respect; and (iii) the Authority has complied with all the agreements and satisfied all
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8 the conditions on its part to be performed or satisfied under the Formation Documents and the Authority Documents at or prior to the Closing.
(6) 15c2-12 Certificate. A certificate, dated the date of the Preliminary Official Statement, from the Authority deeming the Preliminary Official Statement final for purposes of the Rule.
(7) Certificate of Fiscal Agent. A certificate, dated the Closing Date, signed by a duly authorized officer of the Fiscal Agent, to the effect that (i) the Fiscal Agent is a national banking association, duly organized and validly existing and in good standing under the laws of the United States, having full power and being qualified to enter into, accept its appointment under, and administer and perform its duties under, the Fiscal Agent Agreement and, (ii) all approvals, consents and orders of any governmental authority or agency having jurisdiction in the matter that would constitute a condition precedent to the performance by the Fiscal Agent of its duties and obligations under the Fiscal Agent Agreement have been obtained and are in full force and effect, and (iii) the acceptance of the duties and obligations of the Fiscal Agent under the Fiscal Agent Agreement and the consummation of the transactions on the part of the Fiscal Agent contemplated therein, and the compliance by the Fiscal Agent with the terms, conditions and provisions thereof do not contravene any provisions of applicable law of regulation or any order or decree, writ or injunction of the Articles of Incorporation or Bylaws of the Fiscal Agent, and, to the best of such officer’s knowledge, will not require the consent under, or result in a beach of or default under, any resolution, agreement or other instrument to which the Fiscal Agent is a party or by which it may be bound.
(8) Opinion of Counsel to Fiscal Agent. An opinion of counsel to the Fiscal Agent, dated the Closing Date, addressed to the Underwriter and the Authority, to the effect that (i) BNYM is duly organized and validly existing under the laws of the United States, having full power and being qualified to enter into, accept and agree to the provisions of the Fiscal Agent Agreement and (ii) Supplemental Agreement No. 2 has been duly authorized, executed and delivered by the Fiscal Agent and, assuming due authorization, execution and delivery by the other respective parties thereto, the Fiscal Agency Agreement constitutes the valid and binding obligation of the Fiscal Agent enforceable in accordance with its terms, subject to laws relating to bankruptcy, insolvency, moratorium, reorganization or other similar laws affecting creditors’ rights generally, to the application of equitable principles and to the exercise of judicial discretion in appropriate cases. (9) Resolution. A certified copy of the Resolution.
(10) Legal Documents. A copy of each of the Authority Documents and the Official Statement, duly executed and delivered by the respective parties thereto. (11) Tax Certificate. A Certificate as to Arbitrage and Tax Compliance Procedures of the Authority, in form satisfactory to Bond Counsel. (12) Certificate of Goodwin Consulting Group, Inc. A certificate dated the Closing Date from Goodwin Consulting Group, Inc. to the effect that (i) the Special Tax, if collected on the property within the Community Facilities District as identified in, and in the maximum amounts permitted pursuant to the Rate and Method of Apportionment of Special
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9 Taxes, as of the Closing Date would generate at least 110% of the maximum annual debt service payable with respect to the Bonds, the 2015 Bonds and the 2021 Bonds, based on such assumptions and qualifications as shall be acceptable to the Underwriter, and (ii) all information supplied by it for use in the Preliminary Official Statement, as of its date, and the Official Statement, as of its date and the date of the Closing, is true and correct. (13) Appraisal Report and Certificate. (i) The final appraisal report (the “Appraisal Report”) of Integra Realty Resources (the “Appraiser”) setting forth appraised values of land and improvements within the Community Facilities District at not less than the appraised values set forth in the Official Statement, and (ii) a certificate of the Appraiser in substantially the form of Exhibit C hereto, dated the Closing Date and addressed to the Underwriter and the Authority.
(14) Underwriter’s Counsel Opinion. An opinion of Kutak Rock LLP, counsel for the Underwriter (“Underwriter’s Counsel”), dated the date of the Closing, addressed to the Underwriter in form and substance acceptable to the Underwriter. (15) CDIAC Statements. Copies of the Notices of Sale required to be delivered to the California Debt and Investment Advisory Commission pursuant to Section 53583 of the California Government Code and Section 8855(g) of the California Government Code. (16) Other Items Requested by Counsel. Such additional certificates, instruments and other documents as the Underwriter or its counsel, or Bond Counsel, may reasonably deem necessary to evidence the truth and accuracy as of the time of the Closing of the representations of the Authority under this Bond Purchase Agreement and the due performance or satisfaction by the Authority at or prior to such time of all agreements then to be performed and all conditions then to be satisfied by the Authority.
7. Condition to the Obligations of the Authority.
(a) The Fiscal Agent Agreement, the Continuing Disclosure Agreement and this Bond Purchase Agreement shall have been executed and delivered by the other parties thereto. (b) No order, decree, injunction, ruling or regulation of any court, regulatory agency, public board or body shall have been issued nor shall any legislation have been enacted with the purpose of effect, directly or indirectly, of prohibiting the offering, sale or issuance of the Bonds as contemplated hereby or by the Official Statement.
(c) The Underwriter shall provide information to which it has access in its ordinary course of business that is requested by the Authority for purposes of its compliance with California Government Code Section 8855.
(d) As of the Closing Date, Bond Counsel shall have delivered the opinions referred to in Section 6(f)(1) and 6(f)(2) hereof and Disclosure Counsel shall have delivered the letter referred to in Section 6(f)(3), all dated as of the Closing Date
8. Termination. The Underwriter shall have the right to cancel its obligation to purchase the Bonds if, between the date of this Bond Purchase Agreement and the Closing, the
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10 market price or marketability of the Bonds shall be materially adversely affected, in the reasonable judgment of the Underwriter, by the occurrence of any of the following:
(a) Legislation shall be enacted by or introduced in the Congress of the United States or recommended to the Congress for passage by the President of the United States, or the Treasury Department of the United States or the Internal Revenue Service or any member of the Congress or the Legislature of the State or favorably reported for passage to either House of the Congress by any committee of such House to which such legislation has been referred for consideration, a decision by a court of the United States or of the State or the United States Tax Court shall be rendered, or an order, ruling, regulation (final, temporary or proposed), press release, statement or other form of notice by or on behalf of the Treasury Department of the United States, the Internal Revenue Service or other governmental agency shall be made or proposed, the effect of any or all of which would be to impose, directly or indirectly, federal income taxation or State income taxation upon interest received on obligations of the general character of the Bonds or, with respect to state taxation, of the interest on the Bonds as described in the Official Statement, or other action or events shall have transpired which may have the purpose or effect, directly or indirectly, of changing the federal income tax consequences or State income tax consequences of any of the transactions contemplated herein;
(b) Legislation introduced in or enacted (or resolution passed) by the Congress or an order, decree, or injunction issued by any court of competent jurisdiction, or an order, ruling, regulation (final, temporary, or proposed), press release or other form of notice issued or made by or on behalf of the Securities and Exchange Commission, or any other governmental agency having jurisdiction of the subject matter, to the effect that obligations of the general character of the Bonds, including any or all underlying arrangements, are not exempt from registration under or other requirements of the Securities Act of 1933, as amended, or that the Fiscal Agent Agreement is not exempt from qualification under or other requirements of the Trust Indenture Act of 1939, as amended, or that the issuance, offering, or sale of obligations of the general character of the Bonds, including any or all underlying arrangements, as contemplated hereby or by the Official Statement or otherwise, is or would be in violation of the federal securities law as amended and then in effect; (c) Any state Blue Sky or securities commission or other governmental agency or body shall have withheld registration, exemption or clearance of the offering of the Bonds as described herein, or issued a stop order or similar ruling relating thereto; (d) A general suspension of trading in securities on the New York Stock Exchange or the American Stock Exchange, the establishment of minimum prices on either such exchange, the establishment of material restrictions (not in force as of the date hereof) upon trading securities generally by any governmental authority or any national securities exchange, a general banking moratorium declared by federal, State of New York, or State officials authorized to do so; (e) The New York Stock Exchange or other national securities exchange or any governmental authority, shall impose, as to the Bonds or as to obligations of the general character of the Bonds, any material restrictions not now in force, or increase materially those now in force, with respect to the extension of credit by, or the charge to the net capital requirements of, Underwriter; (f) Any amendment to the federal or State Constitution or action by any federal or state court, legislative body, regulatory body, or other authority materially adversely affecting the tax
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11 status of the Authority, its property, income, securities (or interest thereon), or the validity or enforceability of the Special Taxes to pay principal of and interest on the Bonds; (g) Any event occurring, or information becoming known which, in the reasonable judgment of the Underwriter, makes untrue in any material respect any statement or information contained in the Official Statement, or has the effect that the Official Statement contains any untrue statement of material fact or omits to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (h) There shall have occurred any materially adverse change in the affairs or financial condition of the Authority or the Community Facilities District; (i) The United States shall have become engaged in hostilities which have resulted in a declaration of war or a national emergency or there shall have occurred any other outbreak or escalation of hostilities;
(j) There shall have occurred any national or international calamity or crisis in the financial markets of the United States;
(k) Any fact or event shall exist or have existed that, in the Underwriter’s reasonable judgment, requires or has required an amendment of or supplement to the Official Statement; (l) A material disruption in securities settlement, payment or clearance services affecting the Bonds shall have occurred; or
(m) The purchase of and payment for the Bonds by the Underwriter, or the resale of the Bonds by the Underwriter, on the terms and conditions herein provided shall be prohibited by any applicable law, governmental authority, board, agency or commission.
9. Expenses. The costs and expenses incurred by the parties hereto with respect to the Bonds and the proceedings for the sale and issuance thereof shall be paid as follows:
(a) Authority. The Authority acknowledges that it has had an opportunity, in consultation with such advisors as it may deem appropriate, if any, to evaluate and consider the fees and expenses being incurred as part of the issuance of the Bonds. The Authority shall pay or cause to be paid (but solely from the proceeds of the Bonds and not otherwise) the expenses incident to the performance of the obligations of the Authority hereunder, including but not limited to:
(1) the cost of preparation and printing of the Preliminary Official Statement and the final Official Statement in reasonable quantities and all other documents (other than as set forth in subsection (b) below) prepared in connection with the transactions contemplated hereby;
(2) the fees and disbursements of the Fiscal Agent and counsel to the Fiscal Agent in connection with the issuance of the Bonds;
(3) the fees and disbursements of Bond Counsel and any other experts or consultants retained by the Authority in connection with the transactions contemplated hereby;
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12 (4) the fees and expenses of disclosure counsel in connection with its preparation of the Preliminary Official Statement and the Official Statement and the rendering of its disclosure counsel letter; and
(5) the Authority shall also pay for any expenses (solely by means of its being included in the expense component of the Underwriter’s discount) incurred by the Underwriters which are incidental to implementing this Bond Purchase Agreement and the issuance of the Bonds, including, but not limited to meals, transportation and lodging, if any, and any other miscellaneous closing costs.
(b) Underwriter. The Underwriter shall pay:
(1) the cost of preparation and printing of Blue Sky and Legal Investment Memoranda if any, to be used by it;
(2) the fees and disbursements of Underwriter’s Counsel; (3) CUSIP® Service Bureau fees;
(4) all advertising expenses in connection with the public offering of the Bonds; and
(5) California Debt and Investment Advisory Commission fees.
10. Establishment of Issue Price.
(a) The Underwriter agrees to assist the Authority in establishing the issue price of the Bonds and shall execute and deliver to the Authority at Closing an “issue price” or similar certificate, together with the supporting pricing wires or equivalent communications, substantially in the form attached hereto as Exhibit D, with such modifications as may be appropriate or necessary, in the reasonable judgment of the Underwriter, the Authority and Bond Counsel, to accurately reflect, as applicable, the sales price or prices or the initial offering price or prices to the public of the Bonds. (b) Except as otherwise set forth in Exhibit A attached hereto, the Authority will treat the first price at which 10% of each maturity of the Bonds (the “10% test”) is sold to the public as the issue price of that maturity. At or promptly after the execution of this Bond Purchase Agreement, the Underwriter shall report to the Authority the price or prices at which it has sold to the public each maturity of Bonds. If at that time the 10% test has not been satisfied as to any maturity of the Bonds, the Underwriter agrees to promptly report to the Authority the prices at which it sells the unsold Bonds of that maturity to the public. That reporting obligation shall continue, whether or not the Closing Date has occurred, until either (i) the Underwriter has sold all Bonds of that maturity or (ii) the 10% test has been satisfied as to the Bonds of that maturity, provided that, the Underwriter’s reporting obligation after the Closing Date may be at reasonable periodic intervals or otherwise upon request of the Authority or Bond Counsel. For purposes of this Section, if Bonds mature on the same date but have different interest rates, each separate CUSIP number within that maturity will be treated as a separate maturity of the Bonds. (c) The Underwriter confirms that it has offered the Bonds to the public on or before the date of this Bond Purchase Agreement at the offering price or prices (the “initial offering price”), or at the corresponding yield or yields, set forth in Exhibit A attached hereto, except as
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13 otherwise set forth therein. Exhibit A also sets forth, as of the date of this Bond Purchase Agreement, the maturities, if any, of the Bonds for which the Underwriter represents that (i) the 10% test has been satisfied (assuming orders are confirmed by the close of the business day immediately following the date of this Bond Purchase Agreement) and (ii) the 10% test has not been satisfied and for which the Authority and the Underwriter agree that the restrictions set forth in the next sentence shall apply, which will allow the Authority to treat the initial offering price to the public of each such maturity as of the sale date as the issue price of that maturity (the “hold-the-offering-price rule”).
So long as the hold-the-offering-price rule remains applicable to any maturity of the Bonds, the Underwriter will neither offer nor sell unsold Bonds of that maturity to any person at a price that is higher than the initial offering price to the public during the period starting on the sale date and ending on the earlier of the following:
(A) the close of the fifth (5th) business day after the sale date; or (B) the date on which the Underwriter has sold at least 10% of that maturity of the Bonds to the public at a price that is no higher than the initial offering price to the public.
The Underwriter will advise the Authority promptly after the close of the fifth (5th) business day after the sale date whether it has sold 10% of that maturity of the Bonds to the public at a price that is no higher than the initial offering price to the public. (d) The Underwriter confirms that:
(i) any selling group agreement and any third-party distribution agreement relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain language obligating each dealer who is a member of the selling group and each broker-dealer that is a party to such third-party distribution agreement, as applicable:
(A)(i) to report the prices at which it sells to the public the unsold Bonds of each maturity allocated to it, whether or not the Closing Date has occurred, until either all Bonds of that maturity allocated to it have been sold or it is notified by the Underwriter that the 10% test has been satisfied as to the Bonds of that maturity, provided that, the reporting obligation after the Closing Date may be reasonable periodic intervals or otherwise upon request of the Underwriter and (ii) to comply with the hold-the-offering-price rule, if applicable, if and for so long as directed by the Underwriter,
(B) to promptly notify the Underwriter of any sales of Bonds that, to its knowledge, are made to a purchaser who is a related party to an underwriter participating in the initial sale of the Bonds to the public (each such term being used as defined below), and (C) to acknowledge that, unless otherwise advised by the dealer or brokerdealer, the Underwriter shall assume that each order submitted by the dealer or broker-dealer is a sale to the public.
(ii) any selling group agreement relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain language obligating each dealer that is a party to a third-party distribution agreement to be employed in connection with the initial sale of the Bonds to the public to require each broker-dealer that is a party to such third-party distribution
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14 agreement to (A) report the prices at which it sells to the public the unsold Bonds of each maturity allocated to it, whether or not the Closing Date has occurred, until either all Bonds of that maturity allocated to it have been sold or it is notified by the Underwriter or the dealer that the 10% test has been satisfied as to the Bonds of that maturity, provided that, the reporting obligation after the Closing Date may be at reasonable periodic intervals or otherwise upon request of the Underwriter or the dealer, and (B) comply with the hold-the-offering-price rule, if applicable, if and for so long as directed by the Underwriter or the dealer and as set forth in the related pricing wires. (e) The Authority acknowledges that, in making the representation set forth in this section, the Underwriter will rely on (i) in the event a selling group has been created in connection with the initial sale of the Bonds to the public, the agreement of each dealer who is a member of the selling group to comply with the requirements for establishing issue price of the Bonds, including, but not limited to, its agreement to comply with the hold-the-offering-price rule, if applicable to the Bonds, as set forth in a selling group agreement and the related pricing wires, and (ii) in the event that a third-party distribution agreement was employed in connection with the initial sale of the Bonds to the public, the agreement of each broker-dealer that is a party to such agreement to comply with the requirements for establishing issue price of the Bonds, including, but not limited to, its agreement to comply with the hold-the-offering-price rule, if applicable to the Bonds, as set forth in the third-party distribution agreement and the related pricing wires. The Authority further acknowledges that the Underwriter shall not be liable for the failure of any dealer who is a member of a selling group, or of any broker-dealer that is a party to a third-party distribution agreement, to comply with its corresponding agreement to comply with the requirements for establishing issue price of the Bonds, including, but not limited to, its agreement to comply with the hold-the-offeringprice rule, if applicable to the Bonds. (f) The Underwriter acknowledges that sales of any Bonds to any person that is a related party to an underwriter participating in the initial sale of the Bonds to the public (each such term being used as defined below) shall not constitute sales to the public for purposes of this section.
Further, for purposes of this section:
a. “public” means any person other than an underwriter or a related party;
b. “underwriter” means (A) any person that agrees pursuant to a written contract with the Authority (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the public and (B) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (A) to participate in the initial sale of the Bonds to the public (including a member of a selling group or a party to a third-party distribution agreement participating in the initial sale of the Bonds to the public); c. a purchaser of any of the Bonds is a “related party” to an underwriter if the underwriter and the purchaser are subject, directly or indirectly, to (A) more than 50% common ownership of the voting power or the total value of their stock, if both entities are corporations (including direct ownership by one corporation of another), (B) more than 50% common ownership of their capital interests or profits interests, if both entities are partnerships (including direct ownership by one partnership of another), or (C) more than 50% common ownership of the value of the outstanding stock of the corporation or the capital interests or profit interests of the partnership, as applicable, if one entity is a corporation and the other entity is a
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15 partnership (including direct ownership of the applicable stock or interests by one entity of the other); and
d. “sale date” means the date of execution of this Bond Purchase Agreement by the Authority and Underwriter.
11. Notices. Any notice or other communication to be given under this Bond Purchase Agreement to the Authority or the Underwriter may be given by delivering the same in writing at the addresses set forth below:
If to the Authority: West Patterson Financing Authority 1 Plaza
P.O. Box 667
Patterson, California 95363
Attention: Finance Director
If to the Underwriter: Hilltop Securities Inc.
2533 South Coast Highway 101, Suite 250
Cardiff by the Sea, California 92007
Attention: Public Finance
12. Entire Agreement. This Bond Purchase Agreement, when accepted by the Authority, shall constitute the entire agreement between the Authority and the Underwriter and is made solely for the benefit of the Authority and the Underwriter (including the successors or assigns of the Underwriter) and no other person shall acquire or have any right hereunder by virtue hereof.
All the Authority’s representations, warranties and agreements in this Bond Purchase Agreement shall remain operative and in full force and effect, regardless of (a) any investigation made by or on behalf of the Underwriter, (b) delivery of and payment for the Bonds hereunder, and (c) any termination of this Bond Purchase Agreement.
13. Counterparts. This Bond Purchase Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.
14. Reliance on Representations. The Authority hereby acknowledges that the Underwriter, in executing this Bond Purchase Agreement and in paying for the Bonds as provided herein, is relying upon the representations of the Authority set forth herein.
15. Severability. In case any one or more of the provisions contained herein shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision hereof, but this Bond Purchase Agreement shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein.
8.3 Packet Pg. 640
S-1
16. State of California Law Governs. The validity, interpretation and performance of this Bond Purchase Agreement shall be governed by the laws of the State of California applicable to contracts made and performed in California.
Very truly yours,
HILLTOP SECURITIES INC.
By:
Managing Director
The foregoing is hereby agreed to and
accepted as of the date first above written:
WEST PATTERSON FINANCING
AUTHORITY
By:
Authorized Officer
Time of Execution: _____________ California time
[EXECUTION PAGE OF BOND PURCHASE AGREEMENT - WEST PATTERSON FINANCING AUTHORITY COMMUNITY FACILITIES DISTRICT NO. 2005-1 (WEST PATTERSON BUSINESS PARK) SPECIAL TAX BONDS, SERIES 2026]
8.3 Packet Pg. 641
A-1
EXHIBIT A
$__________
WEST PATTERSON FINANCING AUTHORITY
COMMUNITY FACILITIES DISTRICT NO. 2005-1
(WEST PATTERSON BUSINESS PARK)
SPECIAL TAX BONDS
SERIES 2026
MATURITY SCHEDULE
Maturity
(September 1)
Principal
Amount
Interest
Rate Yield Price
10% Test
Satisfied*
10% Test
Not
Satisfied
Subject to
Hold-TheOfferingPrice Rule
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
20__(T)
20__(T)
20__(T)
20__(T)
(T) Term Bond.
(C) Priced to optional call at [par] on September 1, 20__. * At the time of execution of this Bond Purchase Agreement and assuming orders are confirmed by the close of the business day immediately following the date of this Bond Purchase Agreement.
8.3 Packet Pg. 642
B-1
EXHIBIT B
FORM OF SUPPLEMENTAL OPINION OF BOND COUNSEL
[Closing Date]
West Patterson Financing Authority
1 Plaza
P.O. Box 667
Patterson, California 95363
Hilltop Securities Inc.
2533 South Coast Highway 101, Suite 210
Cardiff by the Sea, CA 92007
Supplemental Opinion: $__________ West Patterson Financing Authority Community Facilities District No. 2005-1 (West Patterson Business Park) Special Tax Bonds, Series 2026
Members of the Board of Directors:
We have acted as bond counsel in connection with the issuance by the West Patterson Financing Authority (the “Authority”) of its $__________ aggregate principal amount of West Patterson Financing Authority Community Facilities District No. 2005-1 (West Patterson Business Park) Special Tax Bonds, Series 2026 (the “Bonds”), pursuant to the Mello-Roos Community Facilities Act of 1982, as amended (the “Act”), a Fiscal Agent Agreement, dated as of September 1, 2015 as supplemented and amended, including by a Supplemental Agreement No. 2 to Fiscal Agent Agreement dated as of ______ 1, 2026 (together, the “Fiscal Agent Agreement”), between the Authority and U.S. Bank Trust Company, National Association, as fiscal agent (the “Fiscal Agent”) and Resolution No. ____, adopted by the Board of Directors of the Authority on ______, 2026 (the “Resolution”).
In connection with this opinion, we have examined the law, the Fiscal Agent Agreement, the Bond Purchase Agreement, dated [BPA Date] (the “Purchase Agreement”) by and between the Authority and Hilltop Securities Inc., as underwriter for the Bonds (the “Underwriter”), the Official Statement dated [BPA Date] relating to the Bonds (the “Official Statement”), and such other documents, certifications, and opinions as we have considered necessary to render the opinions set forth herein. As to questions of fact material to our opinion, we have relied upon representations of the Authority contained in the Resolution and in the certified proceedings and certifications of public officials and others furnished to us, without undertaking to verify the same by independent investigation.
Based upon the foregoing, we are of the opinion, under existing law, as follows:
8.3 Packet Pg. 643
B-2
1. The Purchase Agreement has been duly authorized, executed and delivered by the Authority, and, assuming such agreement constitutes a valid and binding obligation of the Underwriter, constitutes a legally valid and binding agreement of the Authority enforceable in accordance with its terms, except as enforcement may be limited by bankruptcy, moratorium, insolvency or other laws affecting creditor’s rights or remedies and is subject to general principles of equity and to the exercise of judicial discretion in appropriate cases.
2. The Bonds are not subject to the registration requirements of the Securities Act of 1933, as amended, and the Fiscal Agent Agreement is exempt from qualification pursuant to the Trust Indenture Act of 1939, as amended.
3. The information contained in the Official Statement on the cover and under the captions “INTRODUCTION,” “THE BONDS,” “SECURITY FOR THE BONDS,” and “TAX MATTERS,” and in Appendix E thereof, is accurate insofar as such information purports to summarize or replicate certain provisions of the Act, the Bonds, the Fiscal Agent Agreement, and our opinion regarding the exclusion from gross income for federal income tax purposes and exemption from California personal income taxes of interest on the Bonds.
Respectfully submitted,
8.3 Packet Pg. 644
C-1
EXHIBIT C
WEST PATTERSON FINANCING AUTHORITY
COMMUNITY FACILITIES DISTRICT NO. 2005-1
(WEST PATTERSON BUSINESS PARK)
SPECIAL TAX BONDS SERIES 2026
CERTIFICATE OF APPRAISER
Hilltop Securities Inc.
Cardiff by the Sea, California
West Patterson Financing Authority
Patterson, California
The undersigned hereby states and certifies:
1. That he is an authorized principal of Integra Realty Resources (the “Appraiser”) and as such is familiar with the facts herein certified and is authorized and qualified to certify the same.
2. That the Appraiser has prepared an appraisal report dated ______, 2026 (the “Appraisal Report”) on behalf of the West Patterson Financing Authority Community Facilities District No. 2005-1 (West Patterson Business Park) (the “Community Facilities District”) and in connection with the Preliminary Official Statement dated [POS Date] (the “Preliminary Official Statement”) and the Official Statement dated [BPA Date] (“Official Statement”), for the West Patterson Financing Authority Community Facilities District No. 2005-1 (West Patterson Business Park) Special Tax Bonds, Series 2026 (the “Bonds”).
3. That the Appraiser hereby consents to the reproduction and use of the Appraisal Report appended to the Preliminary Official Statement and the Official Statement. The Appraiser also consents to the references to the Appraiser and the Appraisal Report made in the Preliminary Official Statement and the Official Statement.
4. In the opinion of the Appraiser the assumptions made in the Appraisal Report are reasonable.
5. That the Preliminary Official Statement and the Official Statement have been reviewed on behalf of the Appraiser and to the best knowledge of the Appraiser the statements concerning the Appraisal Report, and the value of the property in the Community Facilities District contained under the captions “VALUE OF PROPERTY WITHIN THE DISTRICT – Appraisal,” and “APPENDIX C - THE APPRAISAL,” and the information in Table 6 and Table 8 and the footnotes thereto referenced as provided by the Appraiser or from the Appraisal Report, are true, correct and complete in all material respects and do not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
6. Each of the parcels appraised by the Appraiser is encompassed within the Community Facilities District as set forth in the boundary map of the Community Facilities District.
8.3 Packet Pg. 645
C-2
7. That, as of the date of the Preliminary Official Statement, as of the date of the Official Statement and as of the date hereof, the Appraisal Report appended to the Preliminary Official Statement and the Official Statement, respectively, to the best of my knowledge and belief, and subject to all of the Limiting Conditions and Major Assumptions set forth in the Appraisal Report, did not and does not contain any untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements contained therein, in the light of the circumstances under which they were made, not misleading, and no events or occurrences have been ascertained by me or have come to my attention that would substantially change the estimated values stated in the Appraisal Report. However, I have not performed any procedures since the date of the Appraisal Report to obtain knowledge of such events or occurrences nor am I obligated to do so in the future.
8. The Authority and Hilltop Securities Inc., as underwriter, are entitled to rely on this Certificate.
Dated: [Closing Date] INTEGRA REALTY RESOURCES
By: _____________________________________
8.3 Packet Pg. 646
D-1
EXHIBIT D
FORM OF CERTIFICATE OF THE UNDERWRITER
$__________
WEST PATTERSON FINANCING AUTHORITY
COMMUNITY FACILITIES DISTRICT NO. 2005-1
(WEST PATTERSON BUSINESS PARK)
SPECIAL TAX BONDS
SERIES 2026
The undersigned, on behalf of Hilltop Securities Inc. (“Hilltop”), based on the information available to it, hereby certifies as set forth below with respect to the sale and issuance of the abovecaptioned obligations (the “Bonds”).
1. Sale of the Bonds. As of the date of this certificate, for each Maturity of the Bonds, the first price at which at least 10% of such Maturity was sold to the Public is the respective price listed in Schedule A.
2. Defined Terms.
(a) “Issuer” means the West Patterson Financing Authority. (b) “Maturity” means Bonds with the same credit and payment terms. Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate Maturities.
(c) “Public” means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a related party to an Underwriter.
The term “related party” for purposes of this certificate generally means any two or more persons who have greater than 50 percent common ownership, directly or indirectly. (d) “Underwriter” means (i) any person that agrees pursuant to a written contract with the Issuer (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public, and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (i) of this paragraph to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the Public).
The representations set forth in this certificate are limited to factual matters only.
Nothing in this certificate represents Hilltop’s interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. Accordingly, Hilltop makes no representation as to the legal sufficiency of the factual matters set forth herein. The undersigned understands that the foregoing information will be relied upon by the Issuer with respect to certain of the representations set forth in the arbitrage certificate and with respect to compliance with the federal income tax rules affecting the Bonds, and by Jones Hall LLP, in connection with rendering its opinion that the interest on the Bonds is excluded from gross income for federal income tax purposes, the preparation of the Internal Revenue Service Form 8038-G, and other federal income tax advice that it may give to the Issuer from time to
8.3 Packet Pg. 647
D-2
time relating to the Bonds. Except as expressly set forth above, the certifications set forth herein may not be relied upon or used by any third party for any other purpose.
HILLTOP SECURITIES INC., as Underwriter
By:
Its:
Dated: [Closing Date]
8.3 Packet Pg. 648
D-3
SCHEDULE A
SALE PRICES OF THE BONDS
[PRICING TO BE ATTACHED]
8.3 Packet Pg. 649
FINANCIAL SUMMARY
Pursuant to California Government Code Section 5852.1, the Municipal Advisor identified below has provided the following required information to the West Patterson Financing Authority (the “Authority”), at which meeting they will consider the authorization of the obligation identified below.
1. Municipal Advisor: Del Rio Advisors, LLC
2. Meeting Date: May 5, 2026
3. Obligation: West Patterson Financing Authority, Community Facilities District No. 2005-1 (West Patterson Business Park), Special Tax Bonds, Series 2026 (the “Bonds”)
4. The Municipal Advisor has provided the following required good faith estimates relating to the Bonds:
a. The true interest cost of the 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 new issue (to the nearest tenthousandth of one percent): 5.850667%. b. The finance charge of the Bonds, which means the sum of all fees and charges paid to third parties including the cost of credit enhancement: cost of issuance in the amount of $330,000.00 and underwriter’s discount in the amount of $92,790.00 for a total of $422,790.00.
c. The amount of proceeds received by the public body for sale of the Bonds, less the finance charge of the Bonds described in subparagraph (b) and any reserves or capitalized interest paid or funded with proceeds of the Bonds: $8,498,968.50.
d. The total payment amount, which means the sum total of all payments the public body will make to pay debt service on the Bonds plus the finance charge of the Bonds described in subparagraph (b) not paid with the proceeds of the Bonds (which total payment amount shall be calculated to the final maturity of the Bonds): $25,914,685.56.
The foregoing estimates constitute good faith estimates only. The actual principal amount of the Bonds issued, 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 variety of factors. The actual interest rate borne by the Bonds and the actual amortization of the Bonds will depend on market interest rates at the time of sale thereof. Market interest rates are affected by economics and other factors beyond the control of the Authority.
8.3 Packet Pg. 650
West Patterson Financing Authority
Community Facilities District No. 2005-1
(West Patterson Business Park)
Special Tax Bonds, Series 2026
Authority Meeting of May 5, 2026
8.3 Packet Pg. 651
The Mello-Roos Community Facilities Act of 1982
•Mello-Roos authorizes cities, counties, special
districts, school districts and other public entities:
(1)to collect a special tax to finance the
construction or acquisition of public facilities
and or the payment of developer fees, and
(2)to collect a special tax to pay for the ongoing
maintenance of public facilities and the
provision of public services
• The special taxes provide an additional source of
funding for facilities related to new development
• Special taxes are paid by property owners on their
annual property tax bill and collected as part of the
normal County tax collection process
2 8.3
Packet Pg. 652
Mello-Roos Bonds
• The CFD may issue bonds secured by the levy of
special taxes
•Bonds are payable from and secured by special
taxes, which are levied upon property located
within the CFD according to the Rate and Method
of Apportionment (“RMA”)
• Special taxes are levied upon real property and are
not a personal debt of the property owners
• The remedy for delinquencies is foreclosure
•Generally, a bond covenant to commence
foreclosure is faster than the standard County
process
• The bond is not a debt of the City
3 8.3
Packet Pg. 653
Boundary Map
4 8.3
Packet Pg. 654
Current Development Status
As of the Appraisal Date of Value, March 15, 2026
5 8.3
Packet Pg. 655
Proposed 2026 Bonds
• Estimated amount of bonds: $10.310 million
• Estimated project fund: $8.498 million
• “Not-to-exceed” amount: $12.00 million
• Estimated True Interest Cost (1): 5.85%
• “Not-to-exceed” interest cost: 6.50%
• Annual debt service (2): $201k (2022) to $1,284k (2051) • Debt service coverage: 1.10x – 1.44x
• Bond reserve fund (3): Cash funded @ $991k
6 Notes
(1) True Interest Cost based on preliminary estimates assuming market interest rates as of April 8, 2026, subject to change based on market conditions at the time of the sale (2) Special taxes escalate at 2.00% per year and the bonds are sized around the outstanding Special Tax Bonds, Series 2015 and Series 2021
(3) To be combined with the reserve fund from the Special Tax Bonds, Series 2015 and Series 2021
8.3 Packet Pg. 656
Projected Debt Service Coverage
7 8.3
Packet Pg. 657
Estimated Costs of Issuance
8 8.3
Packet Pg. 658
Proposed Remaining Financing Schedule
9 Date Item
Tuesday May 5th Authority
Meeting
Approve Financing and Related
Documents
Week of May 18th • Due Diligence Calls
• Post Preliminary Official
Statement
Week of June 1st Pre-Pricing and Pricing
Week of June 8th • Print and Post Final Official
Statement
• Documents Finalized and
Executed
Week of June 15th Closing and Transfer of Funds
8.3 Packet Pg. 659
Documents for Consideration
10 Supplemental Fiscal Agent Agreement No. 2: The Supplemental Fiscal Agent Agreement No. 2 provides the terms of the 2026 Bonds, including provisions for security and payment of the 2026 Bonds. The Supplemental Fiscal Agent Agreement No. 2 is in addition to Fiscal Agent Agreement No. 1, approved as part of the issuance of special tax bonds in 2021 and, the Fiscal Agent Agreement approved as part of the initial issuance of special tax bonds in 2015.
Official Statement: The official statement is the primary document used by the Underwriter to market the 2026 Bonds to investors. The official statement describes the 2026 Bonds in detail and all the information about CFD 2005-1 used by investors to make an informed purchase decision. The official statement is deemed final pursuant to Rule 15c-2-12 under the Securities Exchange Act of 1934. The only permitted items to be excluded from the draft are data and tables related to the final sale of the 2026 Bonds.
Continuing Disclosure Undertaking: Included as an attachment to the Official Statement, describes covenants of the Authority to provide ongoing disclosure to investors in the form of an annual report due by the end of March each year and posted to the electronic platform known as the Electronic Municipal Market Access (“EMMA”) system. In addition, and from time to time, the Authority covenants to provide notices of listed material events should they occur.
Bond Purchase Agreement: An agreement between the Authority and the Underwriter, when executed, will reflect the final interest rates, yields and prices of the various maturities of the 2026 Bonds sold to investors.
8.3 Packet Pg. 660
Resolution for Consideration
11 Resolution Authorizing the Issuance and Sale of Special Tax Bonds for and on behalf of the West Patterson Financing Authority Community Facilities District No. 2005-1 (West Patterson Business Park), Approving and Directing the
Execution of a Supplemental Fiscal Agent Agreement,
Approving the Form of the Preliminary Official Statement, Approving Sale of Such Bonds, and Approving Other Related Documents and Actions
8.3 Packet Pg. 661
Questions and Discussion
?
Questions and Discussion
8.3 Packet Pg. 662