Rancho Cordova Municipal Code
Chapter 16.84 DEVELOPMENT IMPACT FEES TO
FINANCE THE COST OF TRANSPORTATION
FACILITIES
The Rancho Cordova Municipal Code is current through Ordinance 29-2022, passed November 7, 2022.
16.84.040 Establishment and administration of the Cc ity of Rancho Cordova transportation administration fund.
A. There is hereby created by the department of finance in the city treasury a special interest -bea ring trust fund entitled the city of Rancho Cordova transportation administration fund. All administration fees collected from Area 1 and Area 2 pursuant to this chapter shall be placed in said fund and shall be expended by the Cc ity of Rancho Cordova or its successor agency solely to pay the costs associated with administering the Ccity of Rancho Cordova transportation impact fee program.
B. Commencing with the updated nexus study adopted January 22, 2013February 7, 2022 , administrative costs are incorporated into the transportation development impact fee. The administrative portion of the transportation development impact fee shall be expended by the Ccity of Rancho Cordova or its successor agency solely to pay the costs associated with administering the transportation development impact fee program.
C. The transportation administration fund shall be administered by the Ddi rector. [Ord. 3-2013 § 1; Ord. 6-2006 § 3; Ord. 33-2005 § 3; Ord. 24-2005 § 3].
16.84.050 I mposition of transportation impact fee.
No change in a land use zoning designation shall be approved within the Cc i ty of Rancho Cordova unless payment of the transportation impact fees established by this chapter is required of the property owner as a condition of such approval. No building permit shall be approved for property within the Ccity of Rancho Cordova unless the development fees for that property are paid as required by this chapter. [Ord. 3- 2013 § 1; Ord. 6-2006 § 3; Ord. 33- 2005 § 3; Ord. 24-2005 § 3].
16.84.060 P ayment of transportation impact fees.
The transportation impact fees imposed pursuant to this chapter shall be paid by the property owner to the de
partment, in an amount calculated pursuant to RCMC 16.84.100090. The fees shall be calculated upon the approval of subdivision maps and shall be paid upon issuance of building permits. For projects that are subject to building permits, but not subdivision map approval, the fees shall be both calculated and paid upon issuance of the building permits. [Ord. 3-2013 § 1; Ord. 6-2006 § 3; Ord. 33-2005 § 3; Ord. 24-2005 § 3].
16.84.065 P
ayment of transportation impact fee – Deferral.
Notwithstanding any other requirement in RCMC 16.84.060, due to the continued effects of the nationwide slowdown in the housing market and the city’s desire to encourage quality development, the city manager, or his/her designee, shall have the authority to consider and approve requests to defer payment of development impact fees imposed pursuant to this chapter to the earlier of 24 hours prior to scheduling a final inspection, issuance of a temporary or final certificate of occupancy, or one year from the date the deferral is approved. [Ord. 8- 2019 § 2; Ord. 4-2016 § 2; Ord. 3-2015 § 2; Ord. 3-2013 § 1; Ord. 32-2010 § 3; Ord. 10-2009 § 3; Ord. 14-2008 § 2].
16.84.070 A
doption of the transportation system capital improvement plan and compliance with priority list of Ccity of Rancho Cordova transportation impact fee program.
A. The Ccouncil shall by resolution adopt the Ccity of Rancho Cordova transportation capital improvement plan of the Ccity of Rancho Cordova transportation system development impact fee program. The Cc ouncil shall review the transportation capital improvement plan not less than annually and may amend it by resolution at its discretion.
B. With the exception of facilities approved by the Ddir ector for construction by a property owner pursuant to RCMC 16.84.120, all facilities shall be funded in accordance with the Ppriority Llist established for the Ccity of Rancho Cordova transportation development impact fee program. [Ord. 3-2013 § 1; Ord. 6-2006 § 3; Ord. 33-2005 § 3; Ord. 24-2005 § 3].
16.84.080 E stablishment of transportation impact fees and creation of areas.
A. A separate transportation impact fee is hereby established for each of the following categories:
1. N ew development area transportation Specific plan transportation impact fee;
2. Infill transportation impactarea transportation fee;
3. Regional transportation impact fee;
ITEM 11.3.
ATTACHMENT 4
Rancho Cordova Municipal Code
Chapter 16.84 DEVELOPMENT IMPACT FEES TO
FINANCE THE COST OF TRANSPORTATION
FACILITIES
The Rancho Cordova Municipal Code is current through Ordinance 29-2022, passed November 7, 2022.
B. There are hereby created two initial areas of the Ccity of Rancho Cordova, as shown in Figure 2 of the nexus study for the transportation development impact fee program1, attached to the ordinance codified in this chapter and incorporated herein by reference.
C. The specific plan transportation impact fee shall apply to property within Area 2. The infill transportation impact fee shall apply to property within Area 1. The regional transportation impact fee shall apply to the Sunridge specific plan area and the Villages of Zinfandel special planning area within Area 2 and Area 1, respectively.
CD. Future areas of the transportation development impact fee program may be created as additional public facilities financing plans are implemented for remaining undeveloped areas outside of the Ccity of Rancho Cordova that may be annexed to the Ccity in the future. [Ord. 3-2013 § 1; Ord. 6-2006 § 3; Ord. 33-2005 § 3; Ord. 24-2005 § 3].
16.84.090 Establishment of costs per unit for land uses within the City of Rancho Cordova.
A. Fees per unit for various land uses identified in the fee resolution were established using an allocation of transportation system costs as identified in the transportation system capital improvement plan and total additional trip miles based on land use categories identified in the nexus study developed for the transportation impact fee program.
B. For specific land uses not identified in the fee resolution, the cost per dwelling unit equivalent established by the nexus study and the trip generation rates established by the Institute of Traffic Engineers or equivalent method shall be used to calculate the fee per dwelling unit. [Ord. 3-2013 § 1; Ord. 6-2006 § 3; Ord. 33-2005 § 3; Ord. 24-2005 § 3].
16.84.100090 Calculation of transportation impact fee.
A. For residential development, the transportation impact fee shall be calculated by multiplying the number of units per land use category by a per unit cost as identified in the transportation impact fee program and fee resolution.
B. For nonresidential development, the transportation impact fee shall be calculated by multiplying the number of building square feet per land use category by a per square foot cost as identified in the transportation development impact fee program and fee resolution.
C. For the purpose of calculating the transportation impact fee for land use categories not specifically named in the t
ransportation impact fee program and fee resolution, the planning director is hereby authorized to determine the land use category that corresponds most directly to the land use in question. Alternatively, the Pp lanning Ddirector can determine that no land use category adequately corresponds, and request t he Ppublic Wworks Ddirector to determine the transportation impact fee. Said transportation impact fee will be determined using the applicable trip generation factors as found in the Institute of Transportation Engineers Trip Generation Manual or equivalent method.
D. For the purpose of calculating the regional fee, the regional fee shall be calculated as the difference between the t
ransportation impact fee for Area 1 or Area 2 (depending on the location of the property at issue) and the transportation component of the specific plan fee, if any. If no specific plan fee exists, then the regional fee and the transportation impact fee are equivalent.
E. The transportation impact fees shall be paid by the property owner in the amount as calculated pursuant to subsections (A), (B), (C) and (D) of this section for the categories of facilities established by RCMC 16.84.080, and shall include an additional administrative fee per building permit which will be calculated as provided in the transportation development impact fee program nexus study.
F. For the purpose of calculating transportation impact fees pursuant to subsections (A), (B), (C), and (D) of this section for properties with an approved use permit which significantly changes the underlying use of the site or properties within a special planning area, the director is hereby authorized to determine the per -unit or per-square- foot costs for each fee category that corresponds most directly to the use and density.
G. For the purpose of calculating transportation i
mpact fees pursuant to subsections (A), (B), (C), and (D) of this section for building permits for land use categories not specifically named in this chapter or the transportation development impact fee program, the Ddirector is hereby authorized to determine the per-unit or per-square-foot ITEM 11.3.
ATTACHMENT 4
Rancho Cordova Municipal Code
Chapter 16.84 DEVELOPMENT IMPACT FEES TO
FINANCE THE COST OF TRANSPORTATION
FACILITIES
The Rancho Cordova Municipal Code is current through Ordinance 29-2022, passed November 7, 2022. costs for each fee category that corresponds most directly to the use and density. [Ord. 3- 2013 § 1; Ord. 6-2006 § 3; Ord. 33-2005 § 3; Ord. 24-2005 § 3].
16.84.100 E stablishment of costs per unit for land uses within the Ccity of Rancho Cordova.
A. Fees per unit for various land uses identified in the fee resolution were established using an allocation of transportation system costs as identified in the transportation system capital improvement plan and total additional trip miles based on land use categories identified in the nexus study developed for the transportation impact fee program.
B. For specific land uses not identified in the fee resolution, the cost per dwelling unit equivalent established by the nexus study and the trip generation rates established by the Institute of Traffic Engineers or equivalent method shall be used to calculate the fee per dwelling unit. [Ord. 3-2013 § 1; Ord. 6-2006 § 3; Ord. 33-2005 § 3; Ord. 24-2005 § 3].
16.84.110 Credit for construction of transportation facilities.
A. Upon application by the property owner or his authorized agent, the Ddi rector may authorize the construction of any transportation facilities, or portions thereof, in order of priority as designated on the priority list for the transportation development impact fee program in lieu of all, or a portion of, the transportation impact fee required by this chapter. If so authorized, the credit toward transportation impact fees, excluding the administrative fee, to be provided to the property owner for such in-lieu construction shall be equal to 80 percent of the programmed cost of the facility, as set forth in the transportation system development impact fee program in effect at the time when the in-lieu construction is so authorized, including, but not limited to, unit prices, quantities and project descriptions.
Prior to credit being given and/or issuance of any of the approvals set forth in RCMC 16.84.060 (e.g., approvals of building permits, subdivisions or zoning amendments), the construction of any facility authorized by this section must either be accepted by the Ddepartment, or the property owner must post security for the complete performance of the construction in a form acceptable to the Ddirector and the Ccity Aattorney.
B. Upon acceptance of the completed facility and after reconciliation of the final facility costs, the remaining 20 percent of the programmed cost as designated in the transportation system development impact fee program may be issued as a credit balance to the property owner that may be utilized within the Cc ity of Rancho Cordova as determined by the Ddirector.
C. Where the amount of the credit is less than the amount of the transportation impact fee otherwise applicable to the development in question, the property owner must pay to the Ccity the difference in accordance with RCMC
16.84.060.
D. Where the amount of the credit is greater than the amount of the transportation impact fee, the property owner sha
ll be paid the difference only from the applicable transportation fund within a reasonable time after the project is accepted by the Ddepartment pursuant to RCMC 16.84.120 in order of priority on the priority list in the transportation system development impact fee program when funds are available.
E. Where a facility is proposed for construction by the property owner, the Dd ire ctor at his discretion may either (1) provide the property owner with a credit pursuant to this section, or (2) enter into a reimbursement agreement with the property owner pursuant to RCMC 16.84.120. [Ord. 3-2013 § 1; Ord. 6-2006 § 3; Ord. 33-2005 § 3; Ord. 24- 2005 § 3].
16.84.120 Reimbursement for construction of transportation projects in advance of the transportation system development impact fee program priority list schedule.
A. Upon application by the property owner or his authorized agent, the Ddi rector may enter into a reimbursement agreement authorizing the construction of any transportation facilities, or portions thereof, designated in the transportation system development impact fee program. In addition to the requirements of subsection (D) of this section, the agreement shall set forth the amount to be reimbursed, the time and manner in which payments are to be made, and shall state that reimbursement by the Ccity will only be made from the applicable transportation fund when funds are available.
B. The amount of reimbursement shall be the actual cost of the facility up to the programmed cost of the facility as se
t forth in the transportation system development impact fee program in effect at the time the construction contract ITEM 11.3.
ATTACHMENT 4
Rancho Cordova Municipal Code
Chapter 16.84 DEVELOPMENT IMPACT FEES TO
FINANCE THE COST OF TRANSPORTATION
FACILITIES
The Rancho Cordova Municipal Code is current through Ordinance 29-2022, passed November 7, 2022. is awarded for that specific facility. The time of reimbursement shall be the end of the fiscal year in which the facility is scheduled for construction, based on the priority list in the transportation system development impact fee program, or as different timing is otherwise authorized by the Ddirector.
C. By entering into a reimbursement agreement, a property owner is not relieved of the obligation to pay the transportation impact fees in the manner and amount specified by this chapter.
D. If the Ddi
rector enters into an agreement authorized by subsection (A) of this section, or credit agreement as authorized by RCMC 16.84.110(C), the agreement shall provide that:
1. The general fund of the Ccit y is not liable for payment of any obligations arising from the agreement;
2. The credit or taxing power of the Ccity is not pledged for the payment of any obligations arising from the agreement;
3. The landowner shall not compel the exercise of the Ccit y taxing power or the forfeiture of any of its property to satisfy any obligations arising from the agreement; and
4. The obligation arising from the agreement is not a debt of the city, nor a legal or equitable pledge, charge, l
ien, or encumbrance, upon any of its property, or upon any of its income, receipts, or revenues, and is pa yable only from the transportation impact fees deposited in the applicable transportation fund.
E. The property owner or his authorized agent shall apply for reimbursement as set forth in subsections (A), (B), (C) and (D) of this section no later than four years after the transportation project is constructed and accepted. The property owner shall waive the right of reimbursement for construction costs payable under this section when the reimbursement is not applied for within said four-year limitation. [Ord. 3-2013 § 1; Ord. 6-2006 § 3; Ord. 33-2005 § 3; Ord. 24-2005 § 3].
16.84.130 Annual program fee adjustment.
Commencing January 1, 2014, and thereafter each year no later than January 15th, the finance director , or his or her designee, shall authorize the adjustment of the program fee per development unit for each type of development in each fee category, which shall be adjusted according to the methodology described in the transportation development impact fee program nexus study.
The estimated cost of the
facilities used in the transportation system capital improvement program and for calculating credits and reimbursements pursuant to RCMC 16.84.110 and 16.84.120 shall be adjusted annually using the same adjustment factor. [Ord. 3-2013 § 1; Ord. 5-2012 § 1; Ord. 3-2011 § 1; Ord. 5-2010 § 1; Ord. 7-2009 § 1; Ord. 6-2006 § 3; Ord. 33-2005 § 3; Ord. 24-2005 § 3].
16.84.140 Alternative method and compliance with other laws.
A. This chapter is intended to establish a supplemental method for funding the cost of certain facilities the need for w
hich is expected to be generated by the level and type of development proposed in the Cc ity of Rancho Cordova.
Except as provided in Section 4 of the ordinance codified in this chapter (continuance in effect of roadway and transit development fees established by Sacramento County), the provisions of this chapter shall not be construed to limit the power of the Ccouncil to impose any other fees or exactions or to continue to impose existing ones on development within the Ccity of Rancho Cordova, but shall be in addition to any other fees, exactions or other requirements that the Ccity is authorized to impose, or has previously imposed, as a condition of approving plans, rezonings or other entitlements within the Ccity of Rancho Cordova pursuant to state and local laws. In particular, individual property owners shall remain obligated to fund, construct, and/or dedicate the improvements, public facilities and/or pay other exactions authorized or required by, but not limited to: (1) the Cc ity of Rancho Cordova Ppublic Wworks Ddepartment improvement standards; (2) the Sacramento County municipal services agency improvement standards; (3) the Quimby Act (Section 66477 et seq. of the Government Code) and implementing ordinances (Chapter 22.40 RCMC); (4) school impact fees (Section 65970 et seq. of the Government Code) and implementing ordinances; and (5) Sacramento County drainage fees (county water agency Ordinance No. 1). Any credits or repayments pursuant to RCMC 16.84.110 and 16.84.120 shall not include credits or repayment for the funding, construction or dedications described in this section.
ITEM 11.3.
ATTACHMENT 4
Rancho Cordova Municipal Code
Chapter 16.84 DEVELOPMENT IMPACT FEES TO
FINANCE THE COST OF TRANSPORTATION
FACILITIES
The Rancho Cordova Municipal Code is current through Ordinance 29-2022, passed November 7, 2022.
B. The construction of facilities by a private owner pursuant to RCMC 16.84.110 and 16.84.120 shall be performed and contracted for only as required by law, including, but not limited to, compliance with the Dd epartment’s improvement standards and requirements for public works, if applicable to the particula r facility. [Ord. 3-2013 § 1; Ord. 6-2006 § 3; Ord. 33-2005 § 3; Ord. 24-2005 § 3].
ITEM 11.3.
ATTACHMENT 4
1 Public Works Code Updates
CityOfRanchoCordova.org
Dalia Fadl, Principal Engineer
August 21, 2023
ITEM 11.3.
ATTACHMENT 5
2 Goals
Inform City Council of proposed updates to the Rancho C
ordova Municipal Code including:
Make minor revisions for clarity.
Updates and additions to comply with latest State and F
ederal regulations.
The following titles are included in the update:
Titles: 3, 6, 10, 12, 15, 16
ITEM 11.3.
ATTACHMENT 5
3 Public Works Code Updates
• Titles Discussed in the August 7th City Council Meeting:
• Title 3: 3.60, 3.70
• Title 6: 6.20, 6.21
• Title 10
• Title 12
• Title 15: 15.10, 15.12
• Title 16: 16.44, 16.84
ITEM 11.3.
ATTACHMENT 5
4 Title 16-Buildings and Construction
Chapter 16.96- Floodplain Management Ordinance
A floodplain management ordinance is a set of regulations and guidelines i
mplemented to mitigate the impact of flooding by restricting certain activities and requiring mitigation measures in flood-prone areas, aiming to protect public safety and reduce damage during flood events. The City of Rancho Cordova currently implements the Sacramento County Fl
oodplain Management Ordinance.
In a recent audit by the CA Department of Water Resources, the state r
equired that the city adopt its own ordinance to continue to participate in the National Flood Insurance Program, which provides flood insurance within FEMA mapped floodplains.
ITEM 11.3.
ATTACHMENT 5
5 Title 16-Buildings and Construction
Chapter 16.96- Floodplain Management Ordinance
Chapter 16.96 Floodplain Management Ordinance replaces the City’s r
eliance on County code with a new City Ordinance as required by FEMA and State Department of Water Resources.
Chapter 16.96 uses the latest ordinance language required by FEMA and w
ill regulate floodplain management within the City.
The ordinance does not significantly change the City’s processes in r
egulating floodplains.
The new ordinance shall be approved by the end of August (FEMA deadl
ine).
ITEM 11.3.
ATTACHMENT 5
6 Title 16-Buildings and Construction
Chapter 16.96- Floodplain Management Ordinance
The proposed floodplain management ordinance (chapter 16.96) will meet General Plan Policy S
.2.1.2, which requires the city to participate in the National Flood Insurance Program by updating the floodplain management ordinance as necessary to help reduce future flood damage.
The proposed floodplain management ordinance does not supersede more restrictive General P
lan policies.
Per FEMA, consequences of not adopting the new floodplain management ordinance include:
No resident will be able to purchase a flood insurance policy. Existing flood insurance policies will not be renewed. No Federal grants or loans for development may be made in identified flood hazard areas under programs adm
inistered by Federal agencies.
No Federal disaster assistance may be provided to repair insurable buildings located in identified flood hazard ar
eas for damage caused by a flood.
No Federal mortgage insurance or loan guarantees may be provided in identified flood hazard areas.
ITEM 11.3.
ATTACHMENT 5
7 Chapter 16.96- Floodplain Management Ordinance
Additional Analysis & Updates
Staff performed additional analysis of CEQA exemptions and confirmed that the proposed or
dinance is exempt from CEQA for the following reasons:
Implementation of the ordinance would not differ substantially from implementation of the C
ounty ordinance, as currently applied. Therefore, it can be seen with certainty that there is no possibility that adoption of this ordinance will have a significant effect on the environment. This ordinance is also exempt from CEQA pursuant to CEQA Guidelines Sections 15307 and 15308.
The proposed ordinance regulates development within the floodplain in order to promote public health, safety, and general welfare in conjunction with maintenance, preservation, and restoration of floodplains for local creeks and the American River. City staff analyzed the proposed ordinance and added updates and clarifications:
The City, FEMA, and the Central Valley Flood Protection Board have jurisdiction over projects al
ong the American River Parkway. For proposed projects in this area, the most stringent floor elevation requirement applies.
The Floodplain Administrator is authorized to waive the submission of site plans, construction doc
uments, and other data that are required by these regulations but that are not required to be prepared by a qualified CA Licensed Land Surveyor or Civil Engineer, such as installation of a water heater, backyard awning, and other minor building improvements or permits, when it is found that the nature of the proposed development is such that the review of such submissions is not necessary to ascertain compliance with these regulations.
ITEM 11.3.
ATTACHMENT 5
8 Recommendation: Waive the first reading and
introduce the ordinance adding Chapter 16.96 and
amending Titles 3,6,10,12,15,16
Next Step- return on September 5, 2023 for second
reading of the ordinance.
Recommendations and Next Steps
ITEM 11.3.
ATTACHMENT 5
MEMORANDUM
City Council Staff Report - Page 1 of 3
ITEM 12.1.
DATE: August 21, 2023
TO: Honorable Mayor and Council Members
FROM: Michelle Mingay, Senior Finance Analyst
SUBJECT: A RESOLUTION AUTHORIZING THE ISSUANCE OF SPECIAL TAX
BONDS FOR AND ON BEHALF OF THE CITY OF RANCHO
CORDOVA ARISTA DEL SOL COMMUNITY FACILITIES DISTRICT
NO. 2022-1, IMPROVEMENT AREA NO. 1 APPROVING AND
DIRECTING THE EXECUTION OF A FISCAL AGENT AGREEMENT,
APPROVING THE FORM OF PRELIMINARY OFFICIAL STATEMENT,
APPROVING SALE OF SUCH BONDS, AND APPROVING OTHER
RELATED DOCUMENTS AND ACTIONS
RECOMMENDATION
Adopt the Resolution.
RESULT OF RECOMMENDED ACTION
Adoption of the Resolution would authorize the sale of Special Tax Bonds (the “Bonds”) for and on behalf of the Arista Del Sol Community Facilities District No. 2022-1 Improvement Area No. 1 for the purpose of providing money for the acquisition and construction of improvements and the payment of certain development impact fees related to the project within the Community Facilities District.
BACKGROUND
The Arista Del Sol Community Facilities District No. 2022-1 Improvement Area No. 1 (“CFD 2022-1”) or (the “District”) was formed in 2022 to assist in the financing of the acquisition and construction of certain public facilities and payment of certain fees within a portion of the Arista Del Sol project. Through various City Council actions, the City Council has declared the necessity to incur bonded indebtedness in a maximum principal amount not to exceed $50,000,000 for the CFD.
Based on the current status of the property within the District, the appraisal estimates the value of the property within the District at approximately $77.1 million. This has created an opportunity for the District to issue special tax bonds. Based on the expected par amount of $15.0 million, the property value compared to bonded debt lien would exceed the required 4:1 value to lien requirement, which is consistent with prior special tax bonds issued within the City and exceeds the 3:1 statutory minimum.
The proposed financing-related resolution approves: (i) the sale of the Bonds in an amount not
City Council Staff Report - Page 2 of 3
to exceed $17.5 million; (ii) a Fiscal Agent Agreement; (iii) the Preliminary Official Statement; (iv) Bond Purchase Agreement, and authorizes related documents on behalf of the District.
Descriptions of these documents are as follows:
• Fiscal Agent Agreement: This agreement allows U.S. Bank to act on behalf of the City to provide for the issuance of the Bonds, the disbursement of proceeds of the Bonds, the disposition of the special taxes securing the Bonds, and the administration and payment of the Bonds.
• Bond Purchase Agreement: This agreement is a legally binding document between the issuer (City on behalf of the District) and an underwriter (Piper Sandler & Co.) establishing the terms of the Bond sale. After the issuer delivers the Bonds to the underwriter, and the underwriter pays the issuer for them, the underwriter will put the Bonds on the market at the price and yield established during the Bond pricing call, currently scheduled for the week of September 4th, and investors will purchase the Bonds from the underwriter.
• Funding, Construction and Acquisition Agreement: This agreement is between the City and Developer (Woodside 05N, LLP) to provide for the acquisition of certain public facilities serving development of the project within CFD 2022-1 to be financed in whole or in part by the District, including payment of certain fees to fund such public facilities, using proceeds from issuance and sale of bonds for the District to finance the design and acquisition of such public facilities and expenses incidental thereto and to provide the terms of any reimbursement to Developer.
• Preliminary Official Statement: This document serves as the prospectus for the Bonds. It is the disclosure document relied on by Bond investors that details the underlying security for the Bonds and all associated investment risks. The Official Statement is the offering document used by the underwriter to market the Bonds and indicated how investors in the Bonds will be repaid.
Assuming the City Council approves this financing, staff will work with the Bond finance team to determining the final Bond sizing, and the preliminary Official Statement will be finalized and posted electronically for investors to review. Assuming the market remains stable, the City; NHA Advisors, LLC, the City’s Municipal Advisor; and Piper Sandler & Co., the bond underwriter, will hold a pre-pricing call the week of September 4th to review bond market conditions and the preliminary interest rates, after which, the Bonds will be sold. An authorized officer will then execute, on behalf of the City, a Bond Purchase Agreement with Piper Sandler & Co., finalizing the bond interest rates and setting the delivery date, which is anticipated to occur the week of September 18, 2023.
FISCAL IMPACT AND FUNDING SOURCE
There is no Fiscal Impact. The Special Tax Bonds are secured solely by the Special Taxes levied within the District and are not a debt of the City’s General Fund. Costs of issuance are payable solely from Bond proceeds.
In accordance with Government Code 5852.1, the following information consists of estimates of certain costs and charges for the Bonds that have been provided by NHA Advisors, LLC, the City’s municipal advisor, which has been represented by such party to have been provided in good faith: (1) estimated true interest cost of the Bonds: 5.67%; (2) estimated finance charge of the Bonds (sum of all fees and charges paid to third parties): $628,441; (3) estimated amount of proceeds of the Bonds received by the City (net of finance charges, reserves and capitalized interest, if any): $12,340,374; and (4) estimated total payment amount (sum total of all
City Council Staff Report - Page 3 of 3
payments to pay debt service on the Bonds plus the finance charge not paid with proceeds of the Bonds) calculated to the final maturity of the Bonds: $32,617,443.
ATTACHMENT(S)
1. Resolution
2. Fiscal Agent Agreement
3. Funding, Construction and Acquisition Agreement
4. Preliminary Official Statement
5. Bond Purchase Agreement
ITEM 12.1. ATTACHMENT 1 Resolution No. XX-2023 Page 1 of 5
CITY OF RANCHO CORDOVA
RESOLUTION NO. XX-2023
A RESOLUTION AUTHORIZING THE ISSUANCE OF SPECIAL TAX BONDS FOR AND ON BEHALF OF IMPROVEMENT AREA NO. 1 OF THE CITY OF
RANCHO CORDOVA ARISTA DEL SOL COMMUNITY FACILITIES DISTRICT NO. 2022-1, APPROVING AND DIRECTING THE EXECUTION OF A FISCAL
AGENT AGREEMENT AND AN ACQUISITION AGREEMENT, APPROVING
THE FORM OF PRELIMINARY OFFICIAL STATEMENT, APPROVING SALE
OF SUCH BONDS, AND APPROVING OTHER RELATED DOCUMENTS AND
ACTIONS
WHEREAS, the City Council has conducted proceedings under and pursuant to the Mello- Roos Community Facilities Act of 1982, as amended (the “Act”), to (i) establish the City of Rancho Cordova Arista Del Sol Community Facilities District No. 2022-1 (the “CFD”), (ii) designate within the CFD, “Improvement Area No. 1 of the City of Rancho Cordova Arista Del Sol Community Facilities District No. 2022-1” (“Improvement Area No. 1”), and (iii) establish a “City of Rancho Cordova Arista Del Sol Community Facilities District No. 2022-1 (Future Annexation Area)” for the CFD (the “Future Annexation Area”); and
WHEREAS, under the Act, the City Council is authorized to issue bonded indebtedness secured by special taxes levied within the CFD and improvement areas therein for the purpose of providing moneys for the construction and acquisition of improvements, and the payment of certain fees, authorized for the CFD; and
WHEREAS, on May 16, 2022, the City Council, as legislative body of the CFD and Improvement Area No. 1, established the bonded indebtedness limit for the CFD in the principal amount of not to exceed $50,000,000 (excluding bonds described in Section 53364.2(e) of the Act) (the “Authorization”), initially allocated as follows: (i) for Improvement Area No. 1, $25,000,000 and (ii) for land within the Future Annexation Area, $25,000,000; and WHEREAS, the City desires to issue the first series of special tax bonds for Improvement Area No. 1 of the CFD pursuant to the Authorization; and WHEREAS, there has been submitted to the City Council a Fiscal Agent Agreement, between the City and U.S. Bank Trust Company, National Association, as fiscal agent (the “Fiscal Agent Agreement”), providing for the issuance of a first series of special tax bonds of the City for Improvement Area No. 1, designated as the “City of Rancho Cordova Arista Del Sol Community Facilities District No. 2022-1 Improvement Area No. 1 Special Tax Bonds Series 2023” (the “Bonds”), and the City Council, with the aid of City staff, has reviewed the Fiscal Agent Agreement and found it to be in proper order for the purpose intended, and now desires to approve the Fiscal Agent Agreement and the issuance of the Bonds; and
WHEREAS, the City proposes to sell the Bonds to Piper Sandler & Co., as underwriter (the “Underwriter”), pursuant to the terms of a Bond Purchase Agreement (the “Bond Purchase Agreement”) by and between the City and the Underwriter, and the Underwriter proposes to offer the Bonds to the investing public by means of a Preliminary Official Statement (the “Preliminary Official Statement”); and
ITEM 12.1. ATTACHMENT 1 Resolution No. XX-2023 Page 2 of 5
WHEREAS, there has been placed on file with the City Clerk a form of Funding, Construction and Acquisition Agreement (the “Acquisition Agreement”) providing for certain CFD authorized facilities to be acquired by the City from Woodside 05N, LP, a California limited partnership, as the developer of the land within the District, or an affiliate or assignee, and the City Council, with the assistance of staff, has reviewed the Acquisition Agreement and found it to be in proper order, and now desires to approve such agreement; and WHEREAS, there has been placed on file with the City Clerk a form of a Joint Community Facilities Agreement by and between the City, for and on behalf of the CFD, and (i) the Cordova Recreation and Park District (CRPD) and (ii) the Sacramento County Water Agency (SCWA) (the “Joint Community Facilities Agreements”) providing for certain CFD authorized facilities to be acquired by CRPD and SCWA pursuant to Section 53316.2 of the Act, and the City Council, with the assistance of staff, has reviewed the Joint Community Facilities Agreements and found them to be in proper order, and now desires to approve such agreements; and WHEREAS, the information required to be obtained and disclosed with respect to the Bonds in accordance with Government Code Section 5852.1 is set forth in the staff report accompanying this Resolution; and
WHEREAS, all conditions, things and acts required to exist and to have been performed precedent to and with respect to the issuance of the Bonds and the levy of the special taxes securing the Bonds, as contemplated by this resolution and the Fiscal Agent Agreement, have happened and exist as required by the laws of the State of California, including the Act, and the actions to be performed in due time for the issuance of the Bonds conform in form and manner to the applicable laws of the State of California, including the Act.
NOW, THEREFORE, BE IT HEREBY RESOLVED BY THE CITY COUNCIL OF THE CITY OF RANCHO CORDOVA:
SECTION 1. Findings. This Council finds and determines that (i) it is prudent in the management and development of land in the City and the CFD to issue the Bonds to provide money for the construction and acquisition of improvements, and the payment of certain fees, authorized for the CFD, and (ii) the Bonds and the CFD are substantially in compliance with the City’s Statement of Policies and Procedures for Special Assessment and Community Facilities District Debt Financing Programs, with any deviations hereby approved.
SECTION 2. Law Applicable. For the purposes of these proceedings in and for the CFD, the Act shall be the authority for the issuance of the Bonds.
SECTION 3. Bonds Authorized. Pursuant to the Act, this Resolution and the Fiscal Agent Agreement, the Bonds, in an aggregate principal amount not to exceed $17,500,000, are hereby authorized to be issued. The Bonds shall be executed in the form set forth in, and otherwise as provided in, the Fiscal Agent Agreement. The Bonds shall be dated and executed in the forms, be in the principal amounts, denominations, mature, be payable at the place and in the priorities and bear interest at the rates as set forth in and otherwise as provided in the Fiscal Agent Agreement.
The Bonds shall not be issued unless the value of the real property within Improvement Area No. 1 subject to the special tax to pay debt service on the Bonds, based on assessed values and/or an appraisal by an independent appraiser hired by the City for the purpose of determining such value, is at least four times the proposed principal amount of the Bonds proposed to be
ITEM 12.1. ATTACHMENT 1 Resolution No. XX-2023 Page 3 of 5
issued and secured by a special tax levied pursuant to the Act on property within Improvement Area No. 1.
SECTION 4. Fiscal Agent Agreement. The Fiscal Agent Agreement in substantially the form on file with the City Clerk is hereby approved. The City Manager, Deputy City Manager, Administrative Services Director or such other person or persons as any of them may designate (each an “Authorized Officer”) are hereby separately authorized and directed to execute and deliver the Fiscal Agent Agreement, with such additions thereto or changes therein as are approved by the Authorized Officer upon consultation with the City’s bond counsel, and including but not limited to such additions or changes as are necessary or advisable to permit the timely issuance, sale and delivery of the Bonds; provided, however, that no additions or changes shall authorize the issuance of an aggregate principal amount of Bonds which would cause bonds issued for Improvement Area No. 1 to be in excess of the Authorization.
The date, manner of payment, interest rate or rates, interest payment dates, denominations, form, registration privileges, manner of execution, place of payment, terms of redemption and other terms of the Bonds shall be as provided in the Fiscal Agent Agreement, as finally approved and executed by an Authorized Officer. The terms and provisions of the Fiscal Agent Agreement, as finally executed, are incorporated herein by reference as if fully set forth herein. The approval of such additions or changes shall be conclusively evidenced by the execution and delivery of the Fiscal Agent Agreement by an Authorized Officer.
SECTION 5. Bond Preparation and Delivery; Sale of the Bonds. The Bonds, when executed, shall be delivered to the fiscal agent for authentication. The fiscal agent is hereby requested and directed to authenticate the Bonds by executing the fiscal agent’s certificate of authentication and registration appearing thereon, and to deliver the Bonds, when duly executed and authenticated, to the Underwriter in accordance with written instructions executed on behalf of the City by the Mayor and/or an Authorized Officer, which instructions are hereby authorized, for and in the name and on behalf of the City, to be delivered.
SECTION 6. Covenant to Foreclose. The City hereby covenants, for the benefit of the owners of the Bonds, to commence and diligently pursue to completion any foreclosure action regarding delinquent installments of any amount levied as a special tax for the payment of debt service on the Bonds, said foreclosure action to be commenced and pursued as more completely set forth in the Fiscal Agent Agreement.
SECTION 7. Approval of Preliminary Official Statement. The City Council hereby approves the Preliminary Official Statement in substantially the form presented to the City Council at this meeting. The Authorized Officers are each hereby authorized and directed to execute a final Official Statement (the “Official Statement”), for and in the name and on behalf of the City, in such form, together with any additions thereto or changes therein deemed necessary or advisable by the Authorized Officer executing such document upon consultation with the City’s bond counsel.
The City Council hereby authorizes and directs the Underwriter to distribute copies of the Preliminary Official Statement to persons who may be interested in the purchase of the Bonds and to deliver copies of the Official Statement to all actual purchasers of the Bonds. The City Council hereby authorizes the delivery of the Preliminary Official Statement and the Official Statement.
The City Council hereby authorizes and directs an Authorized Officer, on behalf of the City, to deem “final,” pursuant to Rule 15c2-12 of the Securities Exchange Act of 1934, the Preliminary Official Statement prior to its distribution to prospective purchasers of the Bonds.
ITEM 12.1. ATTACHMENT 1 Resolution No. XX-2023 Page 4 of 5
SECTION 8. Approval of Purchase Agreement. The City Council hereby approves the Bond Purchase Agreement; provided, however, that the aggregate principal amount of Bonds shall not exceed $17,500,000 or result in an Underwriter’s discount in excess of 1.35%, or a true interest cost in excess of 6.50%. Subject to the foregoing parameters, an Authorized Officer is hereby authorized and directed to execute the Bond Purchase Agreement in substantially the form on file with the City Clerk, together with such changes and additions thereto deemed advisable by the Authorized Officer executing the same. The City Council hereby finds and determines that the sale of the Bonds at negotiated sale as contemplated by the Bond Purchase Agreement will result in a lower overall cost.
SECTION 9. Approval of Acquisition Agreement. The City Council hereby approves the Acquisition Agreement. An Authorized Officer is hereby authorized and directed to execute the Acquisition Agreement in substantially the form on file with the City Clerk, together with such changes and additions thereto deemed advisable by the Authorized Officer executing the same.
SECTION 10. Approval of Joint Facilities Agreements. The City Council hereby approves the Joint Community Facilities Agreements and any other joint community facilities agreements which an Authorized Officer deems necessary or appropriate to finance the facilities and/or fees authorized to be funded by the CFD. An Authorized Officer is hereby authorized and directed to execute such Joint Community Facilities Agreements in substantially the form on file with the City Clerk, together with such changes and additions thereto deemed advisable by the Authorized Officer executing the same.
SECTION 11. Actions Authorized. All actions heretofore taken by the officers, employees and agents of the City with respect to the establishment of the CFD and the designation of Improvement Area No. 1 therein, and the sale and issuance of the Bonds are hereby approved, confirmed and ratified, and the Authorized Officers are hereby authorized and directed to do any and all things and take any and all actions and execute any and all certificates, agreements and other documents, which they, or any of them, may deem necessary or advisable in order to consummate the lawful issuance and delivery of the Bonds in accordance with this Resolution, and any certificate, agreement, and other document described in the documents herein approved.
All actions to be taken by an Authorized Officer as specified herein, may be taken by the Authorized Officer or any designee, with the same force and effect as if taken by such Authorized Officer.
SECTION 12. Effectiveness. This Resolution shall take effect immediately upon its adoption.
ITEM 12.1. ATTACHMENT 1 Resolution No. XX-2023 Page 5 of 5
PASSED AND ADOPTED by the City Council of the City of Rancho Cordova on the 21 st day of August 2023 by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
__________________________________
Linda Budge, Mayor
ATTEST:
Stacy Leitner, CMC
City Clerk
Jones Hall Draft 8.9.23
FI
SCAL AGENT AGREEMENT
by and between
CITY OF RANCHO CORDOVA
and
U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION,
as Fiscal Agent
Dated as of September 1, 2023
Relating to:
$_____________
City of Rancho Cordova
Arista Del Sol Community Facilities District No. 2022-1 Improvement Area No. 1
Special Tax Bonds
Series 2023
ITEM 12.1.
ATTACHMENT 2
i
TABLE OF CONTENTS
ARTICLE I
STATUTORY AUTHORITY AND DEFINITIONS
Section 1.01. Authority for this Agreement ........................................................................................ 2 Section 1.02. Agreement for Benefit of Bondowners ........................................................................ 2 Section 1.03. Definitions .................................................................................................................... 2
ARTICLE II
THE BONDS
Section 2.01. Principal Amount; Designation .................................................................................. 10 Section 2.02. Terms of 2023 Bonds ................................................................................................ 10 Section 2.03. Redemption ............................................................................................................... 11 Section 2.04. Form of Bonds ........................................................................................................... 14 Section 2.05. Execution of Bonds .................................................................................................... 14 Section 2.06. Transfer of Bonds ...................................................................................................... 14 Section 2.07. Exchange of Bonds ................................................................................................... 14 Section 2.08. Bond Register ............................................................................................................ 15 Section 2.09. Temporary Bonds ...................................................................................................... 15 Section 2.10. Bonds Mutilated, Lost, Destroyed or Stolen .............................................................. 15 Section 2.11. Limited Obligation ...................................................................................................... 15 Section 2.12. Book-Entry Only System ........................................................................................... 16 Section 2.13. No Acceleration ......................................................................................................... 17
ARTICLE III
ISSUANCE OF BONDS
Section 3.01. Issuance and Delivery of Bonds ................................................................................ 18 Section 3.02. Application of Proceeds of Sale of Bonds and Collection of Special Tax .................. 18 Section 3.03. Special Tax Fund ....................................................................................................... 18 Section 3.04. Improvement Fund .................................................................................................... 19 Section 3.05. Costs of Issuance Fund ............................................................................................. 20
ARTICLE IV
SPECIAL TAX REVENUES; BOND FUND AND RESERVE
FUND
Section 4.01. Pledge of Special Tax Revenues and Other Amounts. ............................................. 21 Section 4.02. Bond Fund ................................................................................................................. 21 Section 4.03. Reserve Fund ............................................................................................................ 22
ARTICLE V
OTHER COVENANTS OF THE CITY
Section 5.01. Punctual Payment ..................................................................................................... 25 Section 5.02. Limited Obligation ...................................................................................................... 25 Section 5.03. Extension of Time for Payment ................................................................................. 25 Section 5.04. Against Encumbrances .............................................................................................. 25 Section 5.05. Books and Accounts .................................................................................................. 25 Section 5.06. Protection of Security and Rights of Owners ............................................................. 25 Section 5.07. Compliance with Law; Completion of Project ............................................................ 26 Section 5.08. Private Activity Bond Limitation ................................................................................. 26 Section 5.09. Federal Guarantee Prohibition .................................................................................. 26 Section 5.10. Collection of Special Tax Revenues .......................................................................... 26 Section 5.11. Further Assurances ................................................................................................... 26 Section 5.12. No Arbitrage .............................................................................................................. 27 Section 5.13. Maintenance of Tax-Exemption ................................................................................. 27 Section 5.14. Annual State Reports ................................................................................................ 27 Section 5.15. Covenant to Foreclose .............................................................................................. 27 ITEM 12.1.
ATTACHMENT 2
ii
Section 5.16. Continuing Disclosure to Owners .............................................................................. 28 Section 5.17. No Additional Bonds .................................................................................................. 28 Section 5.18. Yield of the Bonds ..................................................................................................... 28
ARTICLE VI
INVESTMENTS; DISPOSITION OF INVESTMENT PROCEEDS;
LIABILITY OF THE CITY
Section 6.01. Deposit and Investment of Moneys in Funds ............................................................ 29 Section 6.02. Rebate of Excess Investment Earnings to the United States .................................... 30 Section 6.03. Limited Obligation ...................................................................................................... 30
ARTICLE VII
THE FISCAL AGENT
Section 7.01. Appointment of Fiscal Agent ...................................................................................... 31 Section 7.02. Liability of Fiscal Agent .............................................................................................. 31 Section 7.03. Information ................................................................................................................. 32 Section 7.04. Notice to Fiscal Agent ................................................................................................ 32 Section 7.05. Compensation, Indemnification ................................................................................. 33
ARTICLE VIII
MODIFICATION OR AMENDMENT OF THIS AGREEMENT
Section 8.01. Amendments Permitted ............................................................................................. 34 Section 8.02. Owners’ Meetings ...................................................................................................... 34 Section 8.03. Procedure for Amendment with Written Consent of Owners ..................................... 35 Section 8.04. Disqualified Bonds ..................................................................................................... 35 Section 8.05. Effect of Supplemental Agreement ............................................................................ 35 Section 8.06. Endorsement or Replacement of Bonds Issued After Amendments ......................... 36 Section 8.07. Amendatory Endorsement of Bonds ......................................................................... 36 Section 8.08. Opinion of Counsel Regarding Supplemental Agreement ......................................... 36
ARTICLE IX
MISCELLANEOUS
Section 9.01. Benefits of Agreement Limited to Parties .................................................................. 37 Section 9.02. Successor is Deemed Included in All References to Predecessor ........................... 37 Section 9.03. Discharge of Agreement ............................................................................................ 37 Section 9.04. Execution of Documents and Proof of Ownership by Owners .................................. 38 Section 9.05. Waiver of Personal Liability ....................................................................................... 38 Section 9.06. Notices to and Demands on City and Fiscal Agent ................................................... 38 Section 9.07. Partial Invalidity ......................................................................................................... 39 Section 9.08. Unclaimed Moneys .................................................................................................... 39 Section 9.09. Applicable Law .......................................................................................................... 39 Section 9.10. Conflict with Act ......................................................................................................... 39 Section 9.11. Conclusive Evidence of Regularity ............................................................................ 39 Section 9.12. Payment on Business Day ........................................................................................ 39 Section 9.13. Counterparts .............................................................................................................. 39
EXHIBIT A FORM OF BOND
ITEM 12.1.
ATTACHMENT 2
FISCAL AGENT AGREEMENT
THIS FISCAL AGENT AGREEMENT (the “Agreement”) is made and entered into and dated as of September 1, 2023 , by and between the City of Rancho Cordova, California, a municipal corporation and public body, corporate and politic, organized and existing under and by virtue of the Constitution and laws of the State of California (the “City”) for and on behalf of the City of Rancho Cordova Arista Del Sol Community Facilities District No. 2022 -1 (the “District”), and U.S. Bank Trust Company, National Association , a national banking association duly organized and existing under the laws of the United States of America with a corporate trust office located in Seattle, Washington, as fiscal agent (the “Fiscal Agent”).
W I T N E S S E T H :
WHEREAS, the City Council has conducted proceedings under and pursuant to the Mello- Roos Community Facilities Act of 1982, as amende d (the “Act”), to (i) establish the District (ii) designate within the District, “Improvement Area No. 1 of the City of Rancho Cordova Arista Del Sol Community Facilities District No. 2022-1” (“Improvement Area No. 1”), and (iii) establish a “City of Ranch o Cordova Arista Del Sol Community Facilities District No. 2022 -1 (Future Annexation Area)” for the District (the “Future Annexation Area”); and
WHEREAS, the City Council, as the legislative body of the District and Improvement Area No. 1, is authorized under the Act to levy special taxes to pay for the costs of facilities authorized for the District and to issue bonds secured by said special taxes under the Act;
WHEREAS, under the provisions of the Act, on May 16, 2022, the City Council of the City adopted its Resolution No. ________ (the “Resolution”), which resolution authorized the issuance of the City of Rancho Cordova Arista Del Sol Community Facilities District No. 2022 -1 Improvement Area No. 1 Special Tax Bonds Series 2023 to provide moneys for the construction and acquisition of improvements for the District and provided that said issuance would be in accordance with the Act and this Agreement, and authorized the execution hereof;
WHEREAS, it is in the public interest and for the benefit of the City, the District, the persons responsible for the payment of special taxes and the Owners of the Bonds that the City enter into this Agreement to provide for the issuance of the Bonds, the disbursement of proceeds of the Bonds, the disposi tion of the special taxes securing the Bonds authorized to be issued hereunder and the administration and payment of the Bonds; and
WHEREAS, the City has determined that all things necessary to cause the Bonds, when authenticated by the City for the Distr ict and issued as in the Act, the Resolution and this Agreement provided to be legal, valid and binding and special obligations of the City for the District in accordance with their terms, and all things necessary to cause the creation, authorization, execution and delivery of this Agreement and the creation, authorization, execution and issuance of the Bonds, subject to the terms hereof, have in all respects been duly authorized.
NOW, THEREFORE, in consideration of the covenants and provisions herein set forth and for other valuable consideration the receipt and sufficiency of which are hereby acknowledged, the parties hereto do hereby agree as follows:
ITEM 12.1.
ATTACHMENT 2
2 ARTICLE I
AUTHORITY AND DEFINITIONS STATUTORY AUTHORITY AND
DEFINITIONS
Section 1.01. Authority for this Agreement. This Agreement is entered into pursuant to the provisions of the Act and the Resolution.
Section 1.02. Agreement for Benefit of Bondowners . The provisions, covenants and agreements herein set forth to be performed by or on behalf of the City shall be for the equal benefit, protection and security of the Owners. All of the Bonds, without regard to the time or times of their issuance or maturity, shall be of equal rank without preference, priority or distinction of any of the Bonds over any other thereof, except as expressly provided in or permitted by this Agreement. The Fiscal Agent may become the Owner of any of the Bonds in its own or any other capacity with the same rights it would have if it were not Fiscal Agent.
Section 1.03. Definitions. Unless the context otherwise requires, the terms defined in this Section 1.03 shall, for all purposes of this Agreement, of any Supplemental Agreement, and of any certificate, opinion or other document herein mentioned, have the meanings herein specified. All references herein to “Articles,” “Sections” and other subdivisions are to the corresponding Articles, Sections or subdivisions of this Agreement, and the words “herein,” “hereof,” “hereunder” and other words of similar import refer to this Ag reement as a whole and not to any particular Article, Section or subdivision hereof.
“Acquisition Agreement” means the Funding, Construction and Acquisition Agreement, dated as of September 1, 2023 , by and between the City and Woodside 05N, LP , a California limited partnership, and any amendments thereto.
“Act” means the Mello -Roos Community Facilities Act of 1982, as amended, being Sections 53311 et seq. of the California Government Code.
“Additional Bonds” means any bonds other than the 2023 Bonds issued pursuant to Section 5.17 hereof.
“Administrative Expense Priority” means (i) for fiscal year 2023-24, $30,000, and (ii) for each subsequent year, an amount equal to the preceding fiscal year ’s Administrative Expense Priority plus an additional 2% of such amount.
“Administrative Expenses” means any or all of the following: the fees and expenses of the Fiscal Agent (including any fees or expenses of its counsel), the expenses of the City in carrying out its duties hereunder (including, but not limited to, the levying and collection of the Special Taxes, and the foreclosure of the liens of delinquent Special Taxes) including the fees and expenses of its counsel, an allocable share of the salaries of City staff directly related thereto and a proportionate amount of City general administrative overhead related thereto, any amounts paid by the City from its general funds pursuant to Section 6.02, and all other costs and expenses of the City or the Fiscal Agent incurred in connection with the issuance and administration of the Bonds and/or the discharge of their respective duties hereunder (including, but not limited to, the calculation of the levy of the Special Taxes, foreclosures with respect to delinquent taxes, and the calculation of amounts subject to rebate to the United States) and, in the case of the City, in any way related to the administration of the District and Improvement ITEM 12.1.
ATTACHMENT 2
3 Area No. 1. Administrative Expenses shall include any such expenses incurred in prior years but not yet paid, and any advances of funds by the City under Section 6.02 hereof.
“Administrative Services Director” means the Administrative Services Director, including any acting or interim Administrative Services Director, of the City, or person serving in a similar capacity, or a designee of such person.
“Agreement” means this Fiscal Agent Agreement, as it may be amended or supplemented from time to time by any Supplemental Agreement.
“Annual Debt Service” means, for each Bond Year, the sum of (i) the interest due on the Outstanding Bonds in such Bond Year, assuming th at the Outstanding Bonds are retired as scheduled, and (ii) the principal amount of the Outstanding Bonds, including any mandatory sinking fund payments, due in such Bond Year.
“Authorization” means a principal amount of Bonds for Improvement Area No. 1 not to exceed $25,000,000 (excluding bonds described in Section 53364.2(e) of the Act).
“Authorized Officer ” means the City Manager, Deputy City Manager, Administrative Services Director or any other officer or employee authorized by the City Council of the City or by an Authorized Officer to undertake the action referenced in this Agreement as required to be undertaken by an Authorized Officer.
“Bond Counsel ” means any attorney or firm of attorneys acceptable to the City and nationally recognized for expertise in rendering opinions as to the legality and tax-exempt status of securities issued by public entities.
“Bond Fund ” means the fund by that name established pursuant to Section 4.02(A) hereof.
“Bond Year” means each twelve -month period beginning on September 2 in any year and extending to the next succeeding September 1, both dates inclusive; except that the first Bond Year shall begin on the Closing Date and end on September 1, 2024.
“Bonds” means (i) the 2023 Bonds any (ii) Additional Bonds at any time Outstanding under this Agreement and any Supplemental Agreement.
“Business Day” means any day other than (i) a Saturday or a Sunday or (ii) a day on which banking institutions in the state in which the Principal Office of the Fiscal Agent is located are authorized or obligated by law or executive order to be closed.
“Capitalized Interest Account” means the fund by tha t name established pursuant to Section 4.02(A) hereof.
“CDIAC” means the California Debt and Investment Advisory Commission of the office of the State Treasurer of the State of California or any successor agency or bureau thereto.
“City” means the City of Rancho Cordova, California, and any successor thereto.
ITEM 12.1.
ATTACHMENT 2
4 “Closing Date” means the date upon which there is a physical delivery of the Bonds in exchange for the amount representing the purchase price of the Bonds by the Original Purchaser.
“Code” means the Internal Revenue Code of 1986 as in effect on the date of issuance of the Bonds or (except as otherwise referenced herein) as it may be amended to apply to obligations issued on the date of issuance of the Bonds, together with applicable temporary and final regulations promulgated, and applicable official public guidance published, under the Code.
“Continuing Disclosure Certificate” means the Continuing Disclosure Certificate, dated as of ____________, 2023, by and among the City and Goodwin Consulting Group, Inc., in its capacity as Dissemination Agent, as originally executed and as it may be amended from time to time in accordance with the terms thereof.
“Costs of Issuance” means items of expense payable or reimbursable directly or indirectly by the City and related to the authorization, sale and issuance of the Bonds, which items of expense shall include, but not be limited to, printing costs, costs of reproducing and binding documents, closing costs, filing and recording fees, initial fees, expenses and charges of the Fiscal Agent including its first annual administration fee, expenses incurred by the City in connection with the issuance of the Bonds, financial advisor fees, Bond (underwriter’s) discount or underwriting fee, legal fees and charges, including bond counsel, charges for execution, transportation and safekeeping of the Bonds and other costs, charges and fees in connection with the foregoing.
“Costs of Issuance Fund ” means the fund by that name established pursuant to Section 3.05(A) hereof.
“DTC” means the Depository Trust Company, and its successors and assigns.
“Debt Service ” means the scheduled amount of interest and amortization of principal payable on the Bonds during the period of computation, excluding amounts scheduled during such period which relate to principal which has been retired before the beginning of such period.
“Debt Service Account” means the account of the Special Tax Fund by that name established by Section 3.03(A) hereof.
“Depository” means (a) initially, DTC, and (b) any other Securities Depository acting as Depository pursuant to Section 2.12.
“District” means the City of Rancho Cordova Arista Del Sol Community Facilities District No. 2022-1, established pursuant to the Resolution of Formation.
“Fair Market Value ” means the price at which a willing buyer would purchase the investment from a willing seller in a bona fide, arm’s length transaction (determined as of the date the contract to purchase or sell the investment becomes bindi ng) if the investment is traded on an established securities market (within the meaning of Section 1273 of the Code) and, otherwise, the term “Fair Market Value” means the acquisition price in a bona fide arm ’s length transaction (as referenced above) if (i) the investment is a certificate of deposit that is acquired in accordance with applicable regulations under the Code, (ii) the investment is an agreement with specifically negotiated withdrawal or reinvestment provisions and a specifically negotiated in terest rate (for example, a guaranteed investment contract, a forward supply contract or other investment ITEM 12.1.
ATTACHMENT 2
5 agreement) that is acquired in accordance with applicable regulations under the Code, (iii) the investment is a United States Treasury Security —State and Local Government Series that is acquired in accordance with applicable regulations of the United States Bureau of Public Debt, or (iv) the investment is the Local Agency Investment Fund of the State of California, but only if at all times during which the investment is held its yield is reasonably expected to be equal to or greater than the yield on a reasonably comparable direct obligation of the United States.
“Federal Securities” means any of the following which are non -callable and which at the time of investment are legal investments under the laws of the State of California for funds held by the Fiscal Agent (the Fiscal Agent entitled to rely upon investment direction from the City as a certification that such investment constitutes a legal investment).
(i) Direct general obligations of the United States of America (including obligations issued or held in book-entry form on the books of the United States Department of the Treas ury) and obligations, the payment of principal of and interest on which are directly or indirectly guaranteed by the United States of America, including, without limitation, such of the foregoing which are commonly referred to as “stripped” obligations and coupons; or
(ii) Any of the following obligations of the following agencies of the United States of America: (i) direct obligations of the Export -Import Bank, (ii) certificates of beneficial ownership issued by the Farmers Home Administr ation, (iii) participation certificates issued by the General Services Administration, (iv) mortgage-backed bonds or pass-through obligations issued and guaranteed by the Government National Mortgage Association, (v) project notes issued by the United Stat es Department of Housing and Urban Development, and (vi) public housing notes and bonds guaranteed by the United States of America.
“Fiscal Agent ” means the Fiscal Agent appointed by the City and acting as an independent fiscal agent with the duties and powers herein provided, its successors and assigns, and any other corporation or association which may at any time be substituted in its place, as provided in Section 7.01.
“Fiscal Year” means the twelve-month period extending from July 1 in a calendar year to June 30 of the succeeding year, both dates inclusive.
“Improvement Area No. 1” means Improvement Area No. 1 of the City of Rancho Cordova Arista Del Sol Community Facilities District No. 2022-1, designated pursuant to the Resolution of Formation.
“Improvement Fund ” means the fund by that name established pursuant to Section 3.04(A) hereof.
“Interest Payment Dates” means March 1 and September 1 of each year, commencing March 1, 2024.
“Maximum Annual Debt Service” means the largest Annual Debt Service for any Bond Year after the calculation is made through the final maturity date of any Outstanding Bonds.
“Net Maximum Annual Special Taxes ” means the largest amount of Special Taxes allowed to be levied for any Bond Year, net of the Administrative Expense Priority.
ITEM 12.1.
ATTACHMENT 2
6 “Officer’s Certificate ” means a written certificate of the City signed by an Authorized Officer of the City.
“Ordinance” means any ordinance of the City levying the Special Taxes.
“Original Purchaser” means the first purchaser of the Bonds from the City.
“Outstanding,” when used as of any particular time with reference to Bonds, means (subject to the provisions of Section 8.04) all Bonds except (i) Bonds theretofore canceled by the Fiscal Agent or surrendered to the Fiscal Agent for cancellation; (ii) Bonds paid or deemed to have been paid within the meaning of Section 9.03; and (iii) Bonds in lieu of or in substitution for which other Bonds shall have been authorized, executed, issued and de livered by the City pursuant to the Agreement or any Supplemental Agreement.
“Owner” or “Bondowner” means any person who shall be the registered owner of any Outstanding Bond.
“Participating Underwriter” shall have the meaning ascribed thereto in the Continuing Disclosure Certificate.
“Permitted Investments” means any of the following, to the extent that they are lawful investments for City funds at the time of investment, and are acquired at Fair Market Value (the Fiscal Agent entitled to rely upon inve stment direction from the City as a certification that such investment constitutes a legal investment):
(i) Federal Securities;
(ii) any of following obligations of federal agencies not guaranteed by the United States of America: (a) debentures issued by the Federal Housing Administration; (b) participation certificates or senior debt obligations of the Federal Home Loan Mortgage Corporation or Farm Credit Banks (consisting of Federal Land Banks, Federal Intermediate Credit Banks or Banks for Cooperative s); (c) bonds or debentures of the Federal Home Loan Bank Board established under the Federal Home Loan Bank Act, bonds of any federal home loan bank established under said act and stocks, bonds, debentures, participations and other obligations of or issue d by the Federal National Mortgage Association, the Student Loan Marketing Association, the Government National Mortgage Association and the Federal Home Loan Mortgage Corporation; and bonds, notes or other obligations issued or assumed by the Internationa l Bank for Reconstruction and Development;
(iii) interest-bearing demand or time deposits (including certificates of deposit) in federal or State of California chartered banks (including the Fiscal Agent), provided that (a) in the case of a savings and lo an association, such demand or time deposits shall be fully insured by the Federal Deposit Insurance Corporation, or the unsecured obligations of such savings and loan association shall be rated in one of the top two rating categories by a nationally recognized rating service, and (b) in the case of a bank, such demand or time deposits shall be fully insured by the Federal Deposit Insurance Corporation, or the unsecured obligations of such bank (or the unsecured obligations of the parent bank holding compan y of which such bank is the lead bank) ITEM 12.1.
ATTACHMENT 2
7 shall be rated in one of the top two rating categories by a nationally recognized rating service;
(iv) repurchase agreements with a registered broker/dealer subject to the Securities Investors Protection Corporation Liquidation in the event of insolvency, or any commercial bank provided that: (a) the unsecured obligations of such bank shall be rated in one of the top two rating categories by a nationally recognized rating service, or such bank shall be the lead bank of a banking holding company whose unsecured obligations are rated in one of the top two rating categories by a nationally recognized rating service; (b) the most recent reported combined capital, surplus an undivided profits of such bank shall be not less than $100 million; (c) the repurchase obligation under any such repurchase obligation shall be required to be performed in not more than 30 days; (d) the entity holding such securities as described in clause (c) shall have a pledged first security interes t therein for the benefit of the Fiscal Agent under the California Commercial Code or pursuant to the book -entry procedures described by 31 C.F.R. 306.1 et seq. or 31 C.F.R. 350.0 et seq. and are rated in one of the top two rating categories by a nationally recognized rating service;
(v) bankers acceptances endorsed and guaranteed by banks described in clause (iv) above;
(vi) obligations, the interest on which is exempt from federal income taxation under Section 103 of the Code and which are rated in the one of the top two rating categories by a nationally recognized rating service;
(vii) money market funds which invest solely in Federal Securities or in obligations described in the preceding clause (ii) of this definition, or money market funds which are rated in the highest rating category by Standard & Poor ’s Ratings Services or Moody’s Investor Service, including funds which are managed or maintained by the Fiscal Agent;
(viii) units of a taxable government money market portfolio comprised solely of obligations listed in (i) and (iv) above;
(ix) any investment which is a legal investment for proceeds of the Bonds at the time of the execution of such agreement, and which investment is made pursuant to an agreement between the City or the Fiscal Agent or any successor Fiscal Agent and a financial institution or governmental body whose long term debt obligations are rated in one of the top two rating categories by a nationally recognized rating service;
(x) commercial paper of “prime” quality of the highest ranking or of the highest letter and numerical rating as provided for by Moody’s Investors Service, or Standard and Poor’s Corporation, of issuing corporations that are organized and operating within the United States and having total ass ets in excess of $500,000,000, and having a rating of at least “AA” (without regard to qualifier) for the issuer ’s debentures, other than commercial paper, as provided for by Moody’s Investors Service or Standard and Poor’s Corporation, and provided that p urchases of eligible commercial paper may not exceed 180 days maturity nor represent more than 10 percent of the outstanding paper of an issuing corporation;
ITEM 12.1.
ATTACHMENT 2
8 (xi) any general obligation of a bank or insurance company whose long term debt obligations are rated in one of the two highest rating categories of a national rating service;
(xii) shares in a common law trust established pursuant to Title 1, Division 7, Charter 5 of the Government Code of the State which invests exclusively in investments permitted by Section 53635 of Title 5, Division 2, Chapter 4 of the Government Code of the State, as it may be amended;
(xiii) shares in the California Asset Management Program;
(xiv) the Local Agency Investment Fund established pursuant to Section 16429.1 of the Government Code of the State of California, provided, however, that the Fiscal Agent will be permitted to make investments and withdrawals in its own name and the Fiscal Agent may restrict investments in the such fund if necessary to keep moneys available for the purposes of this Fiscal Agent Agreement; or
(xv) any other lawful investment for City funds.
“Prepayment Account” means the account of the Bond Fund by that name established by Section 4.02(A) hereof.
“Principal Office ” means the corporate trust office of the Fiscal Agent set forth in Section 9.06, or such other or additional offices as may be designated by the Fiscal Agent.
“Project” means the acquisitions and improvements described in the Resolution of Formation and pursuant to the Acquisition Agreement and any joint community facilities agreements.
“Qualified Reserve Fund Credit Instrument ” means an irrevocable standby or direct -pay letter of credit or surety bond issued by a commercial bank or insurance company and deposited with the Fiscal Agent pursuant to Section 4.03, provided that all of the following requirements are met: (i) the long-term credit rating of such bank or insurance company is rated in at least the “AA” category (without regard to qualifier) by S&P or Moody’s; (ii) such letter of credit or surety bond has a term of at least twel ve (12) months; (c) such letter of credit or surety bond has a stated amount at least equal to the portion of the Reserve Requirement with respect to which funds are proposed to be released pursuant to Section 4.03; and (d) the Fiscal Agent is authorized pursuant to the terms of such letter of credit or surety bond to draw thereunder an amount equal to any deficiencies which may exist from time to time in the Bond Fund for the purpose o f making payments required pursuant to Section 4.03.
“Rate and Method ” means the Rate and Method of Apportionment of Special Tax for Improvement Area No. 1, as initially approved and as may be amended.
“Record Date ” means the 15th day of the month next preceding the month of the applicable Interest Payment Date whether or not such day is a Business Day.
“Regulations” means temporary and permanent regulations promulgated under the Code.
“Reserve Fund” means the fund by that name established pursuant to Section 4.03(A) hereof.
ITEM 12.1.
ATTACHMENT 2
9 “Reserve Requirement” means the least of (i) 125% of the average Annual Debt Service on the Bonds; (ii) Maximum Annual Debt Service on the Bonds; and (iii) 10% of the original principal amount of the Bonds (or, if the Bonds have more than a de minimis amount of original issue discount or premium, 10% of the issue price of such Series of Bonds); provided, that in no event shall the City be obligated to deposit an amount in the Reserve Fund in excess of the amount permitted by the applicable provisions of the Code to be so deposited from the proceeds of tax-exempt bonds without having to re strict the yield of any investment purchased with any portion of such deposit and, if the amount of any such deposit is so limited, the Reserve Requirement shall be only the amount of such deposit as permitted by the Code , and provided further that the Reserve Requirement increase subsequent to the issuance of the Bonds.
“Resolution” means Resolution No. _______-, adopted by the City Council of the City on ________, 2023, which resolution authorized the issuance of the Bonds.
“Resolution of Formation” means Resolution No. ______, adopted by the City Council of the City on May 16, 2022, establishing the District and designating therein Improvement Area No.
1. “Securities Depositories” means The Depository Trust Company, and, in accordance with then current guidelines of the Securities and Exchange Commission, such other addresses and/or such other securities depositories as the City may designate in an Officer’ s Certificate delivered to the Fiscal Agent.
“Series” means any series of bonds aut horized for Improvement Area No. 1 pursuant to this Fiscal Agent Agreement or any Supplemental Agreement.
“Special Tax Fund” means the fund by that name established by Section 3.03(A) hereof.
“Special Tax Revenues” means the proceeds of the Special Tax es annually received by the City, less an amount equal to the Administrative Expense Priority , 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.
“Special Taxes” means the “Special Tax” as defined in the Rate and Method, levied within Improvement Area No. 1 pursuant to the Act, the Ordinance and this Agreement.
“Supplemental Agreement” means an agreement which is amendatory of or supplemental to this Agreement, but only if and to the extent that such agreement is specifically authorized hereunder.
“Surplus Account” means the account of the Special Tax Fund by that name established by Section 3.03(A) hereof.
“2023 Bonds” means the City of Rancho Cordova Arista Del Sol Community Facilities District No. 2022-1 Improvement Area No. 1 Special Tax Bonds Series 2023.
ITEM 12.1.
ATTACHMENT 2
10 ARTICLE II
THE BONDS
Section 2.01. Principal Amount; Designation . 2023 Bonds in the aggregate principal amount of $________ are hereby authorized to be issued by the City for Improvement Area No. 1 under and subject to the terms of the Resolution and this Agreement, the Act and other applicable laws of the State of Californi a. The 2023 Bonds shall be designated the “City of Rancho Cordova Arista Del Sol Community Facilities District No. 2022-1 Improvement Area No. 1 Special Tax Bonds Series 2023.”
Section 2.02. Terms of 2023 Bonds.
(A) Form; Denominations. The 2023 Bonds shall be issued as fully registered Bonds without coupons in the denomination of $5,000 o r any integral multiple of $5,000 in excess thereof. The 2023 Bonds shall be lettered and numbered in a customary manner as determined by the Fiscal Agent.
(B) Date of 2023 Bonds. The 2023 Bonds shall be dated the Closing Date for the 2023 Bonds.
(C) CUSIP Identification Numbers. “CUSIP” identification numbers shall be imprinted on the 2023 Bonds, but such numbers shall not constitute a part of the contract evidenced by the 2023 Bonds and any error or omission with respect thereto shall not constitute cause for refusal of any purchaser to accept delivery of and pay for the 2023 Bonds. In addition, failure on the part of the City or the Fiscal Agent to use such CUSIP numbers in any notice to Owners shall not constitute an event of default or any violation of the City ’s contract with such Owners and shall not impair the effectiveness of any such notice.
(D) Maturities. The 2023 Bonds shall be issued as serial bonds and term bonds and shall mature and become payable as follows:
Maturity Principal Interest CUSIP
(September 1) Amount Rate (75211R)
T = Term bonds.
(E) Interest. The 2023 Bonds shall bear interest at the rates set forth above payable on the Interest Payment Dates in each year. Interest shall be calculated on the basis of a 360-day year composed of twelve 30-day months. Each 2023 Bond shall 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 shall bear interest from such date ITEM 12.1.
ATTACHMENT 2
11 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 shall 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 shall bear interest from the Closing Date; provided, however, that if at the time of authentication of a 2023 Bond, interest is in default thereon, such 2023 Bond shall bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment thereon.
(F) Method of Payment . Interest on the 2023 Bonds (including the final interest payment upon maturity or earlier redemption) is payable by check of the Fiscal Agent mailed on the Interest Payment Dates 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 Record Date preceding the Interest Payment 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 2023 Bonds; provided that so long as any 2023 Bonds are in book-entry form, payments with respect to such 2023 Bonds shall be made by wire transfer or such other method acceptable to the Fiscal Agent to the Depository. The principal of the 2023 Bonds and any premium on the 2023 Bonds are payable in lawful money of the United States of America upon surrender of the 2023 Bonds at the Principal Office of the Fiscal Agent. All 2023 Bonds paid by the Fiscal Agent pursuant to this Section shall be cancelled by the Fiscal Agent.
The Fiscal Agent shall destroy the cancelled 2023 Bonds and issue a certificate of destruction thereof to the City.
Section 2.03. Redemption.
(A) Redemption Dates.
(i) Optional Redemption. The 2023 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 City 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 2023 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 any date thereafter 100
(ii) Mandatory Redemption From Prepayments. The 2023 Bonds shall be subject to mandatory redemption from prepayments of the Special Tax by property owners, in whole or in part among maturities as shall be specified by the City 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 2023 Bonds to be redeemed), plus accrued interest thereon to the date of redemption:
Redemption Dates Redemption
Price
Interest Payment Dates through and including March 1, ____ 103% ITEM 12.1.
ATTACHMENT 2
12 September 1, ____ and March 1, ____ 102
September 1, ____ and March 1, ____ 101
September 1, ____ and Interest Payment Dates thereafter 100
The proceeds of any such prepayment shall be deposited in the Prepayment Account of the Bond Fund and applied by the Fiscal Agent to pay the redemption price of the 2023 Bonds.
(iii) Mandatory Sinking Fund Redemption. The Term Bonds maturing September 1, ____ and September 1, ____ are subject to mandatory sinking payment redemption in part on September 1, ____ and September 1, ____, 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:
September 1, ____ Term Bonds
Mandatory
Redemption Date
(September 1)
Sinking Fund
Payment
September 1, ____ Term Bonds
Mandatory
Redemption Date
(September 1)
Sinking Fund
Payment
The amounts in the foregoing tables shall be reduced pro rata at the direction of the City in an Officer’s Certificate, in order to maintain substantially uniform debt service, as a result of any prior partial redemption of the 2023 Bonds pursuant to Section 2.03(A)(i) or (ii) above.
In lieu of redemption under this Section 2.03, moneys in the Bond Fund may be used and withdrawn by the Fiscal Agent for purchase of Outstanding 2023 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 2023 Bonds be purchased at a price in excess of the principal amount thereof, plus interest accrued to the date of purchase.
(B) Notice to Fiscal Agent. The City shall give the Fiscal Agent an Officer’s Certificate containing notice of its intention to redeem 2023 Bonds pursuant to subsections (A)(i) and (A)(ii) not less than 45 days prior to the applicable redemption date.
(C) Redemption Procedure by Fiscal Agent. The Fiscal Agent shall cause notice of any redemption to be mailed by first class mail, postage prepaid, at least 20 days but not more than 60 days prior to the date fixed for redemption, to the Securities Depositories and to the ITEM 12.1.
ATTACHMENT 2
13 Municipal Securities Rulemaking Board and to the Securities Depositories, 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 shall not be a condition precedent to such redemption and failure to mail or to receive any such notice, or any defect therein, shall not affect the validity of the proceedings for the redemption of such Bonds.
Such notice shall state the redemption date and the redemption price and, if less than all of the then Outstanding Bonds are to be called for redemption, shall 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 rede emed or shall 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, shall state as to any Bond called in part the principal amount thereof to be redeemed, and shall require that such 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 Bonds will not accrue from and after the redemption date.
The City has the right to rescind any notice of the redemp tion of Bonds under Section
2.03(A)(i) by written notice to the Fiscal Agent on or prior to two Business Days prior the date fixed for redemption. 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 Bonds then called for redemption, and such cancel lation shall not constitute an event of default. The City and the Fiscal Agent have no liability to the Owners or any other party related to or arising from such rescission of redemption. The Fiscal Agent shall mail notice of such rescission of redemption in the same manner as the original notice of redemption was sent under this Section.
Upon the payment of the redemption price of 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 Bonds bein g redeemed with the proceeds of such check or other transfer.
Whenever provision is made in this Agreement for the redemption of less than all of the Bonds of any maturity, the Fiscal Agent shall select the Bonds to be redeemed, from all Bonds or such given portion thereof of such maturity by lot in any manner which the Fiscal Agent in its sole discretion shall deem appropriate.
Upon surrender of Bonds redeemed in part only, the City shall execute and the Fiscal Agent shall authenticate and deliver to the registered Owner, at the expense of the City, 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.
(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 Bonds so called for redemption shall have been deposited in the Bond Fund, such 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.
ITEM 12.1.
ATTACHMENT 2
14 All 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 Bonds and issue a certificate of destruction thereof to the City.
Section 2.04. Form of Bonds . The Bonds, the form of Fiscal Agent ’s certificate of authentication and the form of assignment, to appear thereon, shall be substantially in the forms, respectively, set forth in Exhibit A attached hereto and by this reference incorporated herein, with necessary or appropriate variations, omissions and insertions, as permitted or required by this Agreement, the Resolution and the Act.
Section 2.05. Execution of Bonds. The Bonds shall be executed on behalf of the City by the Mayor and the City Clerk of the City who are in office on the date of adoption of this Agreement or at any time thereafter, and the seal of the City shall be impressed, imprinted or reproduced by facsimile signature thereon. If any officer w hose signature appears on any Bond ceases to be such officer before delivery of the Bonds to the Owner, such signature shall nevertheless be as effective as if the officer had remained in office until the delivery of the Bonds to the Owner. Any Bond may be signed and attested on behalf of the City by such persons as at the actual date of the execution of such Bond shall be the proper officers of the City although at the nominal date of such Bond any such person shall not have been such officer of the City.
Only such Bonds as shall bear thereon a certificate of authentication in substantially the form set forth in Exhibit A, 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 authentication of the Fiscal Agent shall be conclusive evidence that the Bonds registered hereunder have been duly authenticated, registered and delivered hereunder and are entitled to the benefits of this Agreement.
Section 2.06. Transfer of Bonds . Any Bond may, in accordance with its terms, be transferred, upon the books required to be kept pursuant to the provisions of Section 2.08 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 acceptable to the Fiscal Agent. The cost for any services rendered or any expenses incurred by the Fiscal Agent in connection with any such transfer shall be paid by the City. The Fiscal Agent shall collect from the Owner requesting such transfer any tax or other governmental charge required to be paid with respect to such transfer.
Whenever any Bond or Bonds shall be surrendered for transfer, the City shall execute and the Fiscal Agent shall authenticate and deliver a new Bond or Bonds, for a like aggregate principal amount of Bonds of authorized denominations and of the same maturity.
No transfers of Bonds shall be required to be made (i) within fifteen (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.
Section 2.07. Exchange of Bonds. Bonds may be exchanged at the Principal Office of the Fiscal Agent 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 exchange shall be paid by the City. The Fiscal Agent shall collect from the Owner requesting such exchange any tax or other governmental charge required to be paid with respect to such exchange.
ITEM 12.1.
ATTACHMENT 2
15 No exchanges of Bonds shall be required to be made (i) within fifteen (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.
Section 2.08. Bond Register. The Fiscal Agent will keep or cause to be kept, at its Principal Office, sufficient books for the registration and transfer of the Bonds (the “Bond Register”), which books shall show the series number, date, amount, rate of interest and Owner of each Bond and shall at all times be open to inspection by the City during regular business hours upon reasonable notice; and, upon presentation for such pur pose, the Fiscal Agent shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred, on said books, the ownership of the Bonds as hereinbefore provided.
Section 2.09. Temporary Bonds. The Bonds may be initially issued in temporary form exchangeable for definitive Bonds when ready for delivery. The temporary Bonds may be printed, lithographed or typewritten, shall be of such denominations as may be determined by the City, and may contain such reference to any of the provisions of this Agreement as may be appropriate.
Every temporary Bond shall be executed by the City upon the same conditions and in substantially the same manner as the definitive Bonds. If the City issues temporary Bonds it will execute and furnish definitive Bonds without delay and thereupon the temporary Bonds shall be surrendered, for cancellation, in exchange for the definitive Bonds at the Principal Office of the Fiscal Agent or at such other location as the Fiscal Agent shall designate, and the Fiscal Agent shall authenticate and deliver in exchange for such temporary Bonds an equal aggregate principal amount of definitive Bonds of authorized denominations. Until so exchanged, the temporary bonds shall be entitled to the same benefits under this Agreement as definitive Bonds authenticated and delivered hereunder.
Section 2.10. Bonds Mutilated, Lost, Destroyed or Stolen . If any Bond shall become mutilated, the City shall execute, and the Fiscal Agent shall authenticate and deliver, a new Bond of like tenor and principal amount in exchange and substitution for the Bond so mutilated, but only upon surrender to the Fiscal Agent of the Bond so mutilated. Every mutilated Bond so surrendered to the Fiscal Agent shall be canceled by it and destroyed by the Fiscal Agent who shall deliver a certificate of destruction thereof to the City. If any Bond shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Fiscal Agent and, if such evidence be satisfactory to it and indemnity for the Fiscal Agent and the City satisfactory to the Fiscal Agent shall be given, the City shall execute, and the Fiscal Agent shall authenticate and deliver, a new Bond of like tenor and principal amount in lieu of and in substitution for the Bond so lost, destroyed or stolen. The City may require payment of a sum not exceeding the actual cost of preparing each new Bond delivered under this Section and of the expenses which may be incurred by the City and the Fiscal Agent for the preparation, execution, authentication and delivery. Any Bond delivered under the provisions of this Section in lieu of any Bond alleged to be lost, destroyed or stolen shall constitute an original additional contractual obligation on the part of the City whether or not the Bond so alleged to be lost, destroyed or stolen is at any time enforceable by anyone, and shall be eq ually and proportionately entitled to the benefits of this Agreement with all other Bonds issued pursuant to this Agreement.
Section 2.11. Limited Obligation. All obligations of the City under this Agreement and the Bonds shall be special obligations of the City, payable solely from the Special Tax Revenues and the funds pledged therefore hereunder. Neither the full faith and credit nor the taxing power of the City (except to the limited extent set forth herein) or the State of California or any political subdivision thereof is pledged to the payment of the Bonds.
ITEM 12.1.
ATTACHMENT 2
16 Section 2.12. Book-Entry Only System. DTC shall act as the initial Depository for th e Bonds. One Bond for each maturity of the Bonds shall be initially executed, authenticated, and delivered as set forth herein as a separate fully registered certificate (in printed or typewritten form). Upon initial execution, authentication, and delivery, the ownership of the Bonds shall be registered in the Bond Register kept by the Fiscal Agent for the Bonds in the name of Cede & Co, as nominee of DTC or such nominee as DTC shall appoint in writing.
The Authorized Officers and the Fiscal Agent are he reby authorized to take any and all actions as may be necessary and not inconsistent with this Agreement to qualify the Bonds for the Depository ’s book- entry system, including the execution of the Depository ’s required representation letter.
With respect to Bonds registered in the Bond Register in the name of Cede & Co, as nominee of DTC, the Fiscal Agent shall not have any responsibility or obligation to any broker-dealer, bank, or other financial institution for which DTC holds Bonds as Depository from time to time (the “DTC Participants”) or to any person for which a DTC Participant acquires an interest in the Bonds (the “Beneficial Owners”). Without limiting the immediately preceding sentence, the Fiscal Agent shall not have any responsibility or oblig ation with respect to (i) the accuracy of the records of DTC, Cede & Co, or any DTC Participant with respect to any ownership interest in the Bonds, (ii) the delivery to any DTC Participant, any Beneficial Owner, or any other person, other than DTC, of any notice with respect to the Bonds, including any notice of redemption, (iii) the selection by the Depository of the beneficial interests in the Bonds to be redeemed in the event the City elects to redeem the Bonds in part, (iv) the payment to any DTC Participant, any Beneficial Owner, or any other person, other than DTC, of any amount with respect to the principal of or interest on the Bonds, or (v) any consent given or other action taken by the Depository as Owner of the Bonds.
The Fiscal Agent may treat as and deem DTC to be the absolute Owner of each Bond for which DTC is acting as Depository for the purpose of payment of the principal of and interest on such Bonds, for the purpose of giving notices of redemption and other matters with respect to such Bonds, for the purpose of registering transfers with respect to such Bonds, and for all purposes whatsoever. The Fiscal Agent shall pay all principal of and interest on the Bonds only to the Owners as shown on the Registration Books, and all such payments s hall be valid and effective to fully satisfy and discharge all obligations with respect to the principal of and interest on the Bonds to the extent of the sum or sums so paid.
No person other than an Owner, as shown on the Bond Register, shall receive a physical Bond. Upon delivery by DTC to the Fiscal Agent of written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co., and subject to the transfer provisions in Section 2.06 hereof, references to “Cede & Co.” in this Section 2.12 shall refer to such new nominee of DTC.
DTC may determine to discontinue providing its services with respect to the Bonds at any time by giving written notice to the Fiscal Agent and the City during any time that the Bonds are Outstanding, and discharging its responsibilities with respect thereto under applicable law.
The City may terminate the services of DTC with respect to the Bonds if it determines that DTC is unable to discharge its responsibilities with respect to the Bonds or tha t continuation of the system of book-entry transfers through DTC is not in the best interest of the Beneficial Owners, and the City shall mail notice of such termination to the Fiscal Agent.
ITEM 12.1.
ATTACHMENT 2
17 Upon the termination of the services of DTC as provided in the previous paragraph, and if no substitute Depository willing to undertake the functions hereunder can be found which is willing and able to undertake such functions upon reasonable or customary terms, or if the City determines that it is in the best interest of the Beneficial Owners of the Bonds that they be able to obtain certificated Bonds, the Bonds shall no longer be restricted to being registered in the Bond Register of the Fiscal Agent in the name of Cede & Co., as nominee of DTC, but may be registered in whatever name or name the Owners shall designate at that time, in accordance with Section 2.06.
To the extent that the Beneficial Owners are designated as the transferee by the Owners, in accordance with Section 2.06, the Bonds will be delivered to such Beneficial Owners as soon as practicable.
Section 2.13. No Acceleration . The principal of the Bonds shall not be subject to acceleration hereunder. Nothing in this Section 2.13 shall in any way prohibit the redemption of Bonds under Section 2.03 hereof, or the defeasance of the Bonds and discharge of this Agreement under Section 9.03 hereof.
ITEM 12.1.
ATTACHMENT 2
18 ARTICLE III
ISSUANCE OF BONDS
Section 3.01. Issuance and Delivery of Bonds . At any time after the execution of this Agreement, the City may issue the Bonds in the aggregate principal amount set forth in Section 2.01 or as aut horized in any supplemental agreement and deliver such Bonds to the Original Purchaser. The Authorized Officers of the City are hereby authorized and directed to deliver any and all documents and instruments necessary to cause the issuance of Bonds in accordance with the provisions of the Act, the Resolution and this Agreement, to authorize the payment of Costs of Issuance of the Bonds from the proceeds of the Bonds and to do and cause to be done any and all acts and things necessary or convenient for delivery of the Bonds to the Original Purchaser.
Section 3.02. Application of Proceeds of Sale of 2023 Bonds.
The proceeds of the purchase of the 2023 Bonds by the Original Purchaser in the amount of $_________ (representing the principal of amount of the Bonds, less an underwriter’s discount of $_________, minus net original issue discount of $_________), shall be paid to the Fiscal Agent, who shall forthwith deposit such proceeds on the Closing Date as follows:
(i) Deposit in the Improvement Fund $___________;
(ii) Deposit in the Reserve Fund $_________;
(iii) Deposit $_________ in the Capitalized Interest Account of Bond Fund; and
(iv) Deposit in the Costs of Issuance Fund $_________.
Section 3.03. Special Tax Fund.
(A) Establishment of Special Tax Fund. There is hereby established as a separate fund to be held by the Administrative Services Director , known as Arista Del Sol Community Facilities District No. 2022-1 Improvement Area No. 1 Special Tax Bonds, Series 2023, Special Tax Fund. Within the Special Tax Fund, the Administrative Services Director shall establish and maintain two accounts, (i) the Debt Service Account, to the credit of which the City shall deposit, immediately upon receipt, all S pecial Tax Revenue s received by the City, and any amounts required by Section 3.05(B) to be deposited in the Special Tax Fund, and (ii) the Surplus Account, to the credit of which the City shall deposit surplus Special Tax Revenues described in Section 3.03(B) below. Moneys in the Special Tax Fund shall be held in trust by the City for the benefit of the City and the Owners of the Bonds, shall be disbursed as provided below and, pending any disbursement, shall be subject to a lien in favor of the Owners of the Bonds.
Notwithstanding the foregoing, the City may semi -annually transfer from the Special Tax Fund so held an amount equal to one-half of the Administrative Expense Priority as necessary for the payment of Administrative Expense Priority.
(B) Disbursements. All Special Tax Revenues shall be deposited in the Debt Service Account upon receipt. No later than 10 Business Days prior to each Interest Payment Date, the City shall withdraw from the Debt Service Account of the Special Tax Fund and transfer (i) to the Fiscal Agent for deposit in the Reserve Fund an amount such that the amount then on deposit ITEM 12.1.
ATTACHMENT 2
19 therein is equal to the Reserve Requirement, and (ii) to the Fiscal Agent for deposit in the Bond Fund an amount, taking into account any amounts then on deposit in the Bo nd Fund such that the amount in the Bond Fund equals the principal, including any mandatory sinking fund payments, premium, if any, and interest due on the Bonds on the next Interest Payment Date.
After the transfers under subsections (i) and (ii) have be en made, the City may, on or after September 15th of each year transfer to the Surplus Account the amount remaining in the Debt Service Account.
From time to time, the City may withdraw from the Surplus Account of the Special Tax Fund amounts needed to pay costs of the Project or incidental expenses of the District authorized under the Act, including Administrative Expenses in excess of the Administrative Expense Priority.
Moneys in the Surplus Account may, at the City’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 and if not needed for those purposes shall be available, to the extent required under the Acquisition Agreement, to directly finance the Project (so- called pay-as-you- go funds).
(C) Investment. Moneys in the Special Tax Fund shall be invested and deposited in accordance with Section 6.01. Interest earnings and profits resulting from such investment and deposit shall be retained in the Special Tax Fund to be used for the purposes thereof.
Section 3.04. Improvement Fund.
(A) Establishment of Improvement Fund. There is hereby established as a separate fund to be held by the Fisc al Agent, known as Arista Del Sol Community Facilities District No. 2022-1 Improvement Area No. 1 Special Tax Bonds Improvement Fund to the credit of which a deposit shall be made as required by Section 3.02 and as required by Section 3.03. Moneys in the I mprovement Fund shall be held in trust by the Fiscal Agent and shall be disbursed as provided in subsection (B) of this Section for the payment or reimbursement of costs of the Project.
(B) Procedure for Disbursement. Disbursements from the Improvement Fund shall be made as determined by an Authorized Officer for the payment or reimbursement of the costs of the Project, including for costs of acquisition of portions of the Project, which may include authorized administrative expenses of the City, in acc ordance with the Acquisition Agreement, by submission of an Officer’s Certificate to the Fiscal Agent requesting disbursement of moneys.
The Fiscal Agent need not make any such payment if it has received notice of any lien, right to lien or attachment upon, or claim affecting the right to receive payment of, any of the moneys to be so paid, that has not been released or will not be released simultaneously with such payment.
The Fiscal Agent shall not incur any liability for any disbursement from the Impro vement Fund made in reliance upon any Officer’s Certificate.
(C) Investment. Moneys in the Improvement Fund 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 in the Improvement Fund to be used for the purposes of the Improvement Fund.
(D) 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 has be en 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 Authorized Officer shall request the Fiscal Agent to transfer the amount, if any, ITEM 12.1.
ATTACHMENT 2
20 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 3.05. Costs of Issuance Fund.
(A) Establishment of Costs of Issuance Fund . There is hereby established as a separate fund to be held by the Fiscal Agent, known as Arista Del Sol Community Facilities District No. 2022-1 Improvement Area No. 1 Special Tax Bonds Series Costs of Issuance Fund, to the credit of which a deposit shall be made as required by Section 3.02. Moneys in the Costs of Issuance Fund shall be held in trust by the Fiscal Agent and shall be disbursed as provided in subsection (B) of this Section for the payment or reimbursement of Costs of Issuance of the 2023 Bonds.
(B) Disbursement. Amounts in the Costs of Issuance Fund shall be disbursed from time to time to pay Costs of Issuance, as set forth in an Officer’s Certificate containing respective amounts to be paid to the designated payees, signed by the Administrative Services Director or a designee thereof and delivered t o the Fiscal Agent. The Fiscal Agent shall pay all Costs of Issuance of the 2023 Bonds 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 Costs of Issuance not listed on the initial Officer ’s Certificate delivered to the Fiscal Agent on the Closing Date of the 2023 Bonds. The Fiscal Agent shall maintain the Costs of Issuance Fund for a period of 2 months, from the Closing Date of the 2023 Bonds and then shall transfer any moneys remaining therein, including any investment earnings thereon, to the Improvement Fund, and if the Improvement Fund has been closed then to the Special Tax Fund, and the Costs of Issuance Fund shall be closed. Thereafter, every invoice received by the Fiscal Agent sha ll be submitted to the Administrative Services Director for payment from amounts on deposit in the Special Tax Fund.
(C) Investment. Moneys in the 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 Costs of Issuance Fund to be used for the purposes of such fund.
ITEM 12.1.
ATTACHMENT 2
21 ARTICLE IV
SPECIAL TAX REVENUES; BOND FUND AND RESERVE FUND
Section 4.01. Pledge of Special Tax Revenues and Other Amounts . All of the Special Tax Revenues and all money s deposited in the Bond Fund and, until disbursed as provided herein, the Improvement Fund and the Special Tax Fund are hereby pledged to secure the repayment of the Bonds. In addition, the 2023 Bonds shall be secured by a pledge of all amounts in the Reserve Fund, and a series of Additional Bonds may be secured by a reserve account within the Reserve Fund or a separate reserve fund, as provided in the applicable Supplemental Agreement for such Series. 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 herein) are hereby 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 herein and in the Act until all of the Bonds have been paid and retired or until moneys or Federal Securities have been set aside ir revocably for that purpose in accordance with Section 9.03.
Amounts in the Costs of Issuance Fund for any Series of Bonds 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 the repayment of the Bonds. Any proceeds of condemnation, destruction or other disposition of any facilities financed with the proceeds of the Bonds are not pledged to the repayment of the Bonds and are free and clear of any lien or obligation imposed hereunder.
Section 4.02. Bond Fund.
(A) Establishment of Bond Fund. There is hereby established as a separate fund to be held by the Fiscal Agent , known as Arista Del Sol Community Facilities District No. 2022-1 Improvement Area No. 1 Special Tax Bonds Bond Fund, to the credit of which deposits shall be made as required by Section 3.03(B)(ii), Section 4.03 and any other amounts required to be deposited therein by this Agreement or the Act. Within the Bond Fund, t he Fiscal Agent shall establish a Prepayment Account and deposit therein moneys received, if any, from prepayments of the Special Tax pursuant to Section 2.03(A)(ii). Moneys in the Bond Fund shall be held in trust by the Fiscal Agent for the benefit of th e Owners of the Bonds, shall be disbursed for the payment of the principal of, and interest and any premium on, the Bonds as provided below, and, pending such disbursement, shall be subject to a lien in favor of the Owners of the Bonds.
There is also hereby created within the Bond Fund a “Capitalized Interest Account” which account is hereby established for purposes of accounting for the disposition of 2 023 Bonds, a portion of the proceeds of which will be deposited to such Capitalized Interest Account pursuant to Section 3.02(a). The amount deposited to the Capitalized Interest Account and any investment earnings thereon shall be used solely to make payments on the 2023 Bonds through September 1, 2024. Any excess amounts therein on September 2, 202 4 shall be transferred to the Special Tax Fund, and the Capitalized Interest Account shall thereupon be closed.
(B) Disbursements. On each Interest Payment Date, the Fiscal Agent shall withdraw from the Bond Fund and pay to the Owners of the Bonds the princip al of, and interest and any premium, then due and payable on the Bonds, including any amounts due on the Bonds by ITEM 12.1.
ATTACHMENT 2
22 reason of the sinking payments set forth in Section 2.03(A)(iii) or any redemption of the Bonds as provided under Section 2.03(A)(i). Moneys in the Prepayment Account shall be disbursed for redemption of Bonds as instructed by the City.
In the event that amounts in the Bond Fund are insufficient to pay regularly scheduled payments of principal of and interest on the Bonds, the Fiscal Agent shall withdraw from the Reserve Fund to the extent of any funds therein, the amount of such insufficiency, and the Fiscal Agent shall provide written notice to the Administrative Services Director of the amounts so withdrawn from the Reserve Fund. Amounts so withdrawn from the Reserve Fund shall 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 shall apply the available funds first to the payment of interest on the Bonds, then to the payment of principal due on the Bonds other than by reason of sinking payments, and then to payment of principal due on the Bonds by reason of sinking payments.
Any sinking payment not made as scheduled shall be added to the sinking payment to be made on the next sinking payment date.
(C) Investment. Moneys in the Bond Fund shall be invested and deposited in accordance with Section 6.01. Interest earnings and profits resulting from such investment and deposit shall be retained in the Bond Fund to be used for the purposes of such fund.
(D) Deficiency. 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 shall report to the Administrative Services Director such fact. The City 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) in accordance with the procedures set forth in the Act for the purpose of curing Bond Fund deficiencies.
If on any Interest Payment Date the Fiscal Agent is unable to pay principal, interest and premium, if any, due on any Interest Payment Date for the Bonds due to insufficient funds in the Bond Fund, or if funds are withdrawn from the Reserve Fund to pay principal and/or interest on the Bonds the Fiscal Agent shall notify the Administrative Services Director in writing of such fact, and the Administrative Services Director shall notify CDIAC of such fact within 10 days of such Interest Payment Date. The Fiscal Agent has no obligation under this Agreement to provide notice or disclosure to the Bondowners of insufficient funds or anticipation of deficiency in the Bond Fund.
Section 4.03. Reserve Fund.
(A) Establishment of Fund . There is hereby established as a separate fund to be held by the Fiscal Agent , known as “Arista Del Sol Community Facilities District No. 2022 -1 Improvement Area No. 1 Special Tax Bonds Reserve Fund ,” to the credit of which a deposit shall be made as required by Section 3.02, and deposits shall be made as provided in Section 3.03(B). Moneys in the Reserve Fund shall be held in trust by the Fiscal Agent for the benefit of the Owners of the Bonds secured thereby as a reserve for the payment of principal of, and interest on, the Bonds and shall be subject to a lien in favor of the Owners of the Bonds.
ITEM 12.1.
ATTACHMENT 2
23 The City has the right at any time to cause the Fiscal Agent to release funds from the Reserve Fund, in whole or in part, by tendering to the Fiscal Agent: (1) a Qualified Reserve Fund Credit Instrument, and (2) an opinion of Bond Counsel stating that such release will not, of itself, cause the portion of the interest on the Bonds to become includable in gross income for purposes of federal income taxation. Upon tender of such items to the Fiscal Agent, the Fiscal Agent will transfer such funds from the Reserve Fund to the City.
(B) Use of Fund. Except as otherwise provided in this Section, all amounts deposited in the Reserve Fund shall 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 within five days prior to any Interest Payment Date in the Bond Fund of the amount required for payment of the principal of, and interest on, the Bonds secured by the Reserve Fund on such Interest Payment Date.
Whenever transfer is made from the Reserve Fund to the Bond Fund due to a deficiency in the Bond Fund, the Fiscal Agent shall provide written notice thereof to the Administrative Services Director.
(C) Transfer of Excess of Reserve Requirement . Whenever, on the Business Day prior to any Interest Payment Date, the amount in the Reserve Fund (or any account therein) exceeds the then applicable Reserve Requirement, the Fiscal Agent shall provide written notice to the Administrative Services Director of the amount of the excess and, following any transfer required pursuant to Section 4.03(D) below, shall transfer an amount equal to the excess from the Reserve Fund to the Improvement Fund, if the Project has not been completed as of the date of such transfer, or if the Project has been completed, to the Bond Fund to be used for the payment of the principal of and interest on the Bonds in accordance with Section 4.02.
(D) Transfer for Rebate Purposes. 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 Section 6.02.
(E) Transfer When Balance Exceeds Outstanding Bonds. 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 after making any transfer required under Section 4.03(D) above and upon receipt of an Officer’s Certificate directing it to do so, the Fiscal Agent shall 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, in accordance with Section 4.02 or 2.03 as applicable, of all of the Outstanding Bonds. In the event that the amount so transferred from the Reserve Fund to the Bond Fund exceeds the amount required to pay and redeem the Outstanding Bonds, the balance in the Reserve Fund shall be transferred to the City, after payment of any amounts due the Fiscal Agent hereunder, to be used for any lawful purpose of the City.
Notwithstanding the foregoing, no amounts shall be transferred from the Reserve Fund pursuant to this Section 4.03(E) until aft er the calculation, pursuant to Section 6.02, of any amounts due to the federal government following payment of the Bonds and withdrawal of any such amount under Section 4.03(D) for purposes of making such payment to the federal government, and payment of any fees and expenses due to the Fiscal Agent.
(F) Investment. Moneys in the Reserve Fund shall be invested and deposited in accordance with Section 6.01. Interest earnings and profits resulting from the investment of moneys in the Reserve Fund and other moneys in the Reserve Fund will remain therein until the balance exceeds the Reserve Requirement; any amounts in excess of the Reserve Requirement ITEM 12.1.
ATTACHMENT 2
24 will be transferred to the Improvement Fund, if the Project has not been completed, or if the Project has been completed, to the Bond Fund to be used for the payment of the principal of and interest on the Bonds secured by the Reserve Fund.
ITEM 12.1.
ATTACHMENT 2
25 ARTICLE V
OTHER COVENANTS OF THE CITY
Section 5.01. Punctual Payment. The City will punctually pay or cause to be paid the principal of, and interest and any premium on, the Bonds when and as due in strict conformi ty with the terms of this Agreement, and it will faithfully observe and perform all of the conditions covenants and requirements of this Agreement and all Supplemental Agreements and of the Bonds.
Section 5.02. Limited Obligation. The Bonds are limited obligations of the City on behalf of Improvement Area No. 1 of the District and are payable solely from and secured solely by the Special Tax Revenues and the amounts in the Bond Fund, the Reserve Fund and the Special Tax Fund created hereunder.
Section 5.03. Extension of Time for Payment . In order to prevent any accumulation of claims for interest after maturity, the City shall not, directly or indirectly, extend or consent to the extension of the time for the payment of any claim for interest on any of the Bonds and shall not, directly or indirectly, be a party to the approval of any such arrangement by purchasing or funding said claims for interest or in any other manner. In case any such claim for interest shall be extended or funded, whether or not with the consent of the City, such claim for interest so extended or funded shall not be entitled, in case of default hereunder, to the benefits of thi s Agreement, except subject to the prior payment in full of the principal of all of the Bonds then Outstanding and of all claims for interest which shall not have been so extended or funded.
Section 5.04. Against Encumbrances. The City will not encumber, pledge or place any charge or lien upon any of the Special Tax Revenues or other amounts pledged to the Bonds superior to or on a parity with the pledge and lien herein created for the benefit of the Bonds , except as permitted by this Agreement.
Section 5.05. Books and Accounts. The City will keep, or cause to be kept, proper books of record and accounts, separate from all other records and accounts of the C ity, in which complete and correct entries shall be made of all transactions relating to the expenditure of amounts disbursed from the Special Tax Fund and to the Special Tax Revenues. Such books of record and accounts shall at all times during business h ours be subject to the inspection of the Owners of not less than ten percent (10%) of the principal amount of the Bonds then Outstanding, or their representatives duly authorized in writing.
The Fiscal Agent will keep, or cause to be kept, proper books of record and accounts, separate from all other records and accounts of the Fiscal Agent, in which complete and correct entries shall be made of all transactions of the Fiscal Agent relating to the expenditure of amounts disbursed from funds and accounts hel d by the Fiscal Agent hereunder . Such books of record and accounts shall at all times during business hours and upon reasonable prior notice, be subject to the inspection of the City and the Owners of not less than ten percent (10%) of the principal amount of the Bonds then Outstanding, or their representatives duly authorized in writing.
Section 5.06. Protection of Security and Rights of Owners . The City will preserve and protect the security of the Bonds and the rights of the Owners, and will warrant and defend their rights against all claims and demands of all persons. From and after the delivery of any of the Bonds by the City, the Bonds shall be incontestable by the City.
ITEM 12.1.
ATTACHMENT 2
26 Section 5.07. Compliance with Law; Completion of Project. The City will comply with all applicable provisions of the Act and the law in completing the acquisition and construction of the Project; provided that the City shall have no obligation to advance any funds to complete the Project in excess of the amounts available therefor in the Improvement Fund.
Section 5.08. Private Activity Bond Limitation. The City shall assure that the proceeds of the Bonds are not so used as to cause the Bonds to satisfy the private business tests of Section 141(b) of the Code or the private loan financing test of Section 141(c) of the Code.
Section 5.09. Federal Guarantee Prohibition. The City shall not take any action or permit or suffer any action to be taken if the result of the same would be to cause any of the Bonds to be “federally guaranteed” within the meaning of Section 149(b) of the Code.
Section 5.10. Collection of Special Tax Revenues . The City shall comply with all requirements of the Act so as to assure the timely collection of Special Tax Revenues, including without limitation, the enforcement of delinquent Special Taxes.
On or within five Business Days of each June 1, the Fiscal Agent shall provide the Administrative Services Director with a notice stating the amount then on deposit in the Bond Fund and the Reserve Fund. The receipt of such notice by the Administrative Services Director shall in no way affect the obligations of the Administrative Services Director under the following two paragraphs. Upon receipt of such notice, the Administrative Services Director shall ascertain the relevant parcels on which the Special Taxes are to be levied, taking into account any parcel splits during the preceding and then current year.
The City shall effect the levy of the Special Taxes each Fiscal Year in accordance with the Ordinance such that the computation of the levy is complete before the final date on which the County Auditor will accept the transmission of the Special Tax amount s for the parcels within Improvement Area No. 1 for inclusion on the next secured real property tax roll. Upon the completion of the computation of the amounts of the levy, the City shall prepare or cause to be prepared, and shall transmit to the Administrative Services Director , such data as the County Auditor requires to include the levy of the Special Taxes on the next secured real property tax roll.
The City shall fix and levy the amount of Special Taxes within Improvement Area No. 1 required for the payment of principal of and interest on any Outstanding Bonds 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 Admin istrative Expenses during such year, all in accordance with the Rate and Method and the Ordinance.
The Special Taxes shall be payable and be collected in the same manner and at the same time and in the same installment as the general taxes on real property are payable, and have the same priority, become delinquent at the same times and in the same proportionate amounts and bear the same proportionate penalties and interest after delinquency as do the general taxes on real property. Notwithstanding the for egoing, the Special Taxes may be collected in such other manner as the City shall prescribe if necessary to pay the debt service on the Bonds.
Section 5.11. Further Assurances. The City will adopt, make, execute and deliver any and all such further resolutions, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of this Agreement, and for the better assuring and confirming un to the Owners of the rights and benefits provided in this Agreement.
ITEM 12.1.
ATTACHMENT 2
27 Section 5.12. No Arbitrage. The City shall not take, or permit or suffer to be taken by the Fiscal Agent or otherwise, any action with respect to the gross proceeds of the Bonds which if such action had been reasonably expected to have been taken, or had been deliberately and intentionally taken, on the Closing Date would have caused the Bonds to be “arbitrage bonds” within the meaning of Section 148 of the Code and Regulations.
Section 5.13. Maintenance of Tax-Exemption. The City shall take all actions necessary to assure the exclusion of interest on the Bonds from the gross income of th e Owners of the Bonds to the same extent as such interest is permitted to be excluded from gross income under the Code as in effect on the date of issuance of the Bonds.
Section 5.14. Annual State Reports . The following requirements shall apply to the Bonds:
(A) Annual Reporting. Not later than October 30 of each calendar year, beginning with the October 30 first succeeding the date of the Bonds, and in each calendar year thereafter until the October 30 following the final maturity of the Bonds, the Administrative Services Director shall prepare and supply the California Debt and Investment Advisory Commission, by mail, postage prepaid, with the information required under Section 53359.5(c) of the Act. The annual reporting shall be made using such form or forms as may be prescribed by CDIAC.
(B) Other Reporting. If within 10 days prior to any Interest Payment Date it appears to the Fiscal Agent that there is a danger of deficiency in the Bond Fund and t hat the Fiscal Agent may be unable to pay regularly scheduled debt service on the Bonds in a timely manner or if the Fiscal Agent is unable to pay principal, interest and premium, if any, due on any Interest Payment Date for the Bonds due to insufficient funds in the Bond Fund, or if funds are withdrawn from the Reserve Fund to pay principal and/or interest on the Bonds, the Administrative Services Director shall make the reports required under Section 4.02(D) hereof.
(C) Amendment. The reporting requirements of this Section 5.14 shall be amended from time to time, without action by the City or the Fiscal Agent, to reflect any amendments to Section 53359.5(b) or Section 53359.5(c) of the Act.
(D) No Liability . None of the City and its officers, agents and employees, the Administrative Services Director or the Fiscal Agent shall be liable for any inadvertent error in reporting the information required by this Section 5.14.
Section 5.15. Covenant to Foreclose. The City hereby covenants with and for the benefit of the Owners of the Bonds that it will annually on or before September 1 of each year review the public records of the County of Sacramento relating to the collection of the Special Tax in order to determine the amount of the Special Tax collected in the prior Fiscal Year, and if the City determines on the basis of such review that the amount so collected is deficient by more than 5% of the total amount of the Special Tax levied in such Fiscal Year , it will within 30 days thereafter, institute foreclosure proceedings as authorized by the Act in order to enforce the lien of the delinquent installment of the Special Tax against each separate lot or parcel of land in Improvement Area No. 1 for which such installment of the Special Tax is delinquent, and will diligently prosecute and pursue such foreclosure proceedings to judgment and sale; provided, that if the City determines on the basis of such review that
ITEM 12.1.
ATTACHMENT 2
28 (a) the amount so collected is deficient by less than 5% of the total amount of the Special Tax levied in Improvement Area No. 1 in such Fiscal Year, but that property owned by any single property owner in Improvement Area No. 1 is delinquent by more than $5,000 with respect to the Special Tax due and payable by such property owner in such Fiscal Year, or
(b) that property owned by any single property owner in Improvement Area No. 1 is delinquent on four consecutive semi-annual Special Tax installments (irrespective of the total delinquencies in Improvement Area No. 1),
then the City will institute, prosecute and pursue such foreclosure proceedings in the time and manner provided herein against each such property owner.
The Administrative Services Director shall notify the City Attorney of any such delinquency of which it is aware, and the City Attorney shall commence, or cause to be commenced, such proceedings.
Section 5.16. Continuing Disclosure to Owners. The City hereby covenants and agrees that it will comply with and carry out all of the provisions of the Continuing Disclosure Certificate.
Notwithstanding any other provision of this Agreement, failure of the City to comply with the Continuing Disclos ure Certificate shall not be considered a default hereunder; however, any Participating Underwriter or any holder or beneficial owner of the Bonds may take such actions as may be necessary and appropriate to compel performance by the City of its obligation s thereunder, including seeking mandate or specific performance by court order.
Section 5.17. No Additional Bonds. The City covenants not to issue Additional Bonds payable from Special Taxes and by the Special Tax Revenues equally and ratably with Bonds previously issued, except that the City may issue bonds to refund all or part of the Bonds.
Section 5.18. Yield of the Bonds. In determining the yield of the Bonds to comply with Section 5.13 and 6.02 hereof, the City will take into account optional and mandatory prepayment redemption (including premium, if any) in advance of maturity based on the reasonable expectations of the City, as of the Closing, without regard to whether or not redemption moneys are received or Bonds are redeemed.
ITEM 12.1.
ATTACHMENT 2
29 ARTICLE VI
INVESTMENTS; DISPOSITION OF INVESTMENT PROCEEDS;
LIABILITY OF THE CITY
Section 6.01. Deposit and Investment of Moneys in Funds. Subject in all respects to the provisions of Section 6.02, moneys in any fund or account created or established by this Agreement and held by the Fiscal Agent, shall be invested by the Fiscal Agent in Permitted Investments, as directed pursuant to an Officer ’s Certificate filed with the Fiscal Agent at lea st two (2) Business Days in advance of the making of such investments. In the absence of any such Officer’s Certificate, the Fiscal Agent shall invest any such moneys in Permitted Investments described in clause (vii) of the definition thereof which by their terms mature prior to the date on which such moneys are required to be paid out hereunder. Subject in all respects to the provisions of Section 6.02, moneys in any fund or account created or established by this Agreement and held by the Administrative Services Director shall be invested by the Administrative Services Director in any lawful investments that the City may make, which by their terms mature prior to the date on which such moneys are required to be paid out hereunder. Obligations purchased as an investment of moneys in any fund shall be deemed to be part of such fund or account, subject, however, to the requirements of this Agreement for transfer of interest earnings and profits resulting from investment of amounts in funds and accounts.
The Fiscal Agent or Administrative Services Director may act as principal or agent in the acquisition or disposition of any investment. Neither the Fiscal Agent nor the Administrative Services Director shall incur any liability for losses arising from any investments made pursuant to this Section. Any losses arising from any investments made pursuant to this Section shall be offset against interest earnings and profits retained in the same fund.
Except as otherwise provided in the next sentence, all investments of amounts deposited in any fund or account created by or pursuant to this Agreement, or otherwise containing gross proceeds of the Bonds (within the meaning of Section 148 of the Code), shall be acquired, disposed of, and valued (as of the date that valuation is required by this Agreement or the Code) at Fair Market Value. For purposes of any Fair Market Value determination hereunder, the Fiscal Agent shall be entitled to conclusively rely on an Officer’s Certificate of the City and shall be fully protected in relying thereon. Investments in funds or accounts (or portions thereof) that are subject to a yield restriction under applicable provisions of the Code and (unless valuation is undertaken at least annually) investments in the Reserve Fund shal l be valued at their present value (within the meaning of Section 148 of the Code).
Investments in any and all funds and accounts may be commingled in a separate fund or funds for purposes of making, holding and disposing of investments, notwithstanding p rovisions herein for transfer to or holding in or to the credit of particular funds or accounts of amounts received or held by the Fiscal Agent or the Administrative Services Director hereunder, provided that the Fiscal Agent or the Administrative Services Director, as applicable, shall at all times account for such investments strictly in accordance with the funds and accounts to which they are credited and otherwise as provided in this Agreement.
The Fiscal Agent or the Administrative Services Director , as applicable, shall sell or present for redemption, any investment security whenever it shall be necessary to provide moneys to meet any required payment, transfer, withdrawal or disbursement from the fund or account to which such investment security is c redited and neither the Fiscal Agent nor the ITEM 12.1.
ATTACHMENT 2
30 Administrative Services Director shall be liable or responsible for any loss resulting from the acquisition or disposition of such investment security in accordance herewith.
The City acknowledges that to the extent regulations of the Comptroller of the Currency or other applicable regulatory entity grant the City the right to receive brokerage confirmations of security transactions as they occur, the City specifically waives receipt of such confirmations t o the extent permitted by law. The Fiscal Agent will furnish the City periodic cash transaction statements which include detail for all investment transactions made by the Fiscal Agent hereunder.
Section 6.02. Rebate of Excess Investment Earnings to the United States. The City covenants to calculate and rebate to the federal government, in accordance with the Regulations, excess investment earnings to the extent required by Section 148(f) of the Code.
The City shall notify the Fiscal Agent of any amounts determined to be due to the federal government, and the Fiscal Agent shall, upon receipt of an Officer ’s Certificate of the City, withdraw such amounts from the Reserve Fund pursuant to Section 4.03(D), and pay such amounts to the federal government as required by the Code and the Regulations. In the event of any shortfall in amounts available to make such payments under Section 4.03(D), the Fiscal Agent shall notify the Administrative Services Director in writing of the amount of the shortfall and the Administrative Services Director shall make such payment from any amounts available in the Special Tax Fund. Any fees or expenses incurred by the Fiscal Agent or the City under or pursuant to this Section 6.02 shall be Administrative Expenses.
In order to provide fo r the administration of this Section 6.02, the City may provide for the employment of independent attorneys, accountants and consultants compensated on such reasonable basis as the City may deem appropriate.
Section 6.03. Limited Obligation. The City’s obligations hereunder are limited obligations of the City on behalf of Improvement Area No. 1 of the District and are payable solely from and secured solely by the Special Tax Revenues and the amounts in the Special Tax Fund, the Bond Fund and the Reserve Fund created hereunder.
ITEM 12.1.
ATTACHMENT 2
31 ARTICLE VII
THE FISCAL AGENT
Section 7.01. Appointment of Fiscal Agent . U.S. Bank Trust Company, National Association, at its Principal Office, is hereby appointed Fiscal Agent for the Bonds. The Fiscal Agent undertakes to perform such duties, and only such duties, as are specifically set forth in this Agreement, and no implied covenants or obligations shall be read into this Agreement against the Fiscal Agent.
Any company into which the Fiscal Agent may be merged or converted or with which it may be consolidated or any company resulting from any merger , conversion or consolidation to which it shall be a party or any company to which the Fiscal Agent may sell or transfer all or substantially all of its corporate trust business, provided such company shall be eligible under the following paragraph of this Section, shall be the successor to such Fiscal Agent without the execution or filing of any paper or any further act, anything herein to the contrary notwithstanding.
The City may remove the Fiscal Agent initially appointed, and any successor thereto, and may appoint a successor or successors thereto, but any such successor shall be a bank or trust company having a combined capital (exclusive of borrowed capital) and surplus of at least $50,000,000, including, for such purpose, the combined capital and surplus of any parent holding company, and subject to supervision or examination by federal or state authority. If such bank or trust company publishes a report of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority above referred to, then for the purposes of this Section 7.01, combined capital and surplus of such bank or trust company shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published.
The Fiscal Agent may at any time resign by giving written notice to the City and by giving to the Owners notice by mail of such resignation. Upon receiving notice of such resignation, the City shall promptly appoint a successor Fiscal Agent by an instrument in writing. Any resignation or removal of the Fiscal Agent shall become effective upon acceptance of appointment by the successor Fiscal Agent.
If no appointment of a successor Fiscal Agent shall be made pursuant to the foregoing provisions of this Section within 30 days after the Fiscal Agent shall have given to the City written notice or after a vacancy in the office of the Fiscal Agent shall have occurred by reason of its inability to act, the Fiscal Agent or any Bondowner may apply to any court of competent jurisdiction to appoint a successor Fiscal Agent. Said court may thereupon, after such notice, if any, as such court may deem proper, appoint a successor Fiscal Agent.
Section 7.02. Liability of Fiscal Agent. The recitals of facts, covenants and agreements herein and in the Bonds contained shall be taken as statements, covenants and agreements of the City, and the Fiscal Agent assumes no responsibility for the correctness of the same, or makes any representations as to the validity or sufficiency of this Agreement or of the Bonds, or shall incur any responsibility in respect thereof, other than in connection with the duties or obligations herein or in the Bonds assigned to or imposed up on it. The Fiscal Agent shall not be liable in connection with the performance of its duties hereunder, except for its own negligence or willful default. The Fiscal Agent assumes no responsibility or liability for any information, statement or recital in any offering memorandum or other disclosure material prepared or distributed with ITEM 12.1.
ATTACHMENT 2
32 respect to the issuance of the Bonds. The Fiscal Agent has no liability regarding the use of the proceeds from the purchase of the Bonds deposited in funds held by the City.
In the absence of bad faith, the Fiscal Agent may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Fiscal Agent and conforming to the requirements of this Agreement, including all Officer’s Certificates of the City meeting such requirements; but in the case of any such certificates or opinions by which any provision hereof are specifically required to be furnished to the Fiscal Agent, the Fiscal Agent shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Agreement. Except as provided above in this paragraph, the Fiscal Agent shall be protected and shall incur no liability in acting or proceeding, or in not acting or not proceeding, in good faith, reasonably and in accordance with the terms of this Agreement, upon any resolution, order, notice, request, consent or waiver, certificate, statement, affidavit, or other paper or document which it shall in good faith reasonably believe to be genuine and to have been adopted or signed by the proper person or to have been prepared and furnished pursuant to any provision of this Agreement, and the Fiscal Agent shall not be under any duty to make any investigation or inquiry as to any statements contained or matters referred to in any such instrument.
The Fiscal Agent shall not be liable for any error of judgment made in good faith by a responsible officer unless it shall be proved that the Fis cal Agent was negligent in ascertaining the pertinent facts.
No provision of this Agreement shall require the Fiscal Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it.
The Fiscal Agent shall be under no obligation to exercise any of the rights or powers vested in it by this Agreement at the request or direction of any of the Owners pursuant to this Agreement unless such Owners shall have offered to the Fiscal Agent reasonable security or indemnity against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction.
The Fiscal Agent may become the owner of the Bonds with the same rights it would have if it were not the Fiscal Agent.
Section 7.03. Information. The Fiscal Agent shall provide to the City such information relating to the Bonds and the funds and accounts maintained by the Fiscal Agent hereunder as the City shall reasonably request, including but not limited to quarterly statements reporting funds held and transactions by the Fiscal Agent.
Section 7.04. Notice to Fiscal Agent. The Fiscal Agent may rely and shall be protected in acting or refraining from acting u pon any Officer ’s Certificate, notice, resolution, request, consent, order, certificate, report, warrant, Bond or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or proper parties and given in accordance with the requirements hereof. The Fiscal Agent may execute any of the powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Fiscal Agent shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder. The Fiscal Agent may consult with ITEM 12.1.
ATTACHMENT 2
33 counsel, who may be counsel to the City, with regard to legal questions, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by it hereunder in good faith and in accordance therewith.
The Fiscal Agent shall not be bound to recognize any person as the Owner of a Bond unless and until such Bond is submitted for in spection, if required, and his title thereto satisfactorily established, if disputed.
Whenever in the administration of its duties under this Agreement the Fiscal Agent shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of willful misconduct on the part of the Fiscal Agent, be deemed to be conclusively proved and established by a certificate of the City, and such certificate shall be full warrant to the Fiscal Agent for any action taken or suffered under the provisions of this Agreement or any Supplemental Agreement upon the faith thereof, but in its discretion the Fiscal Age nt may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as to it may seem reasonable.
Section 7.05. Compensation, Indemnification. The City shall pay to the Fiscal Agent , but only from Special Tax Revenues, from time to time reasonable compensation for all services rendered as Fiscal Agent under this Agreement, and also all reasonable expenses, charges, counsel fees and other disbursements, including those of their attorneys, agents and employees, incurred in and about the performance of their powers and duties under this Agreement, but the Fiscal Agent shall not have a lien therefor on any funds at any time held by it under this Agreement. The City fu rther agrees, to the extent permitted by applicable law , and only from Special Tax Revenues as the source of funds , to indemnify and save the Fiscal Agent, its officers, employees, directors and agents harmless against any costs, claims, expenses or liabilities, including, without limitation, fees and expenses of its attorneys which it may incur in the exercise and performance of its powers and duties hereunder which are not due to its negligence or willful misconduct. The obligation of the City under this Section shall survive resignation or removal of the Fiscal Agent under this Agreement and payment of the Bonds and discharge of this Agreement.
ITEM 12.1.
ATTACHMENT 2
34 ARTICLE VIII
MODIFICATION OR AMENDMENT OF THIS AGREEMENT
Section 8.01. Amendments Permitted. This Agreement and the rights and obligations of the City and of the Owners of the Bonds 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 Section 8.04. No such modification or amendment shall (i) extend the maturity of any Bond or reduce the interest rate thereon, or otherwise alter or impair the obligation of the City 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 City 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 of California or this Agreement), or reduce the percentage of Bonds required for the amendment hereof. No such amendment may modify any of the rights or obligations of the Fiscal Agent without its written consent.
This Agreement and the rights and obligations of the City 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:
(A) to add to the covenants and agreements of the City in this Agreement contained, other covenants and agreements thereafter to be observed, or to limit or surrender any right or power herein reserved to or conferred upon the City;
(B) to make modifications not adversely affecting any outstanding series of Bonds of the City in any material respect;
(C) to make such provisions for the purpose of curing any ambiguity, or of curing, correcting or supplementing any defective provision contained in this Agreement, or in regard to questions arising under this Agreement, as the City and the Fiscal Agent may deem necessary or desirable, and which shall not adversely affect the rights of the Owners of the Bonds; or
(D) to make such additions, deletions or modifications as may be necessary or desirable to assure compliance with Section 148 of the 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 Regulations;
(E) to facilitate the issuance of Additional Bonds, to the extent permitted by Section 5.17.
Section 8.02. Owners’ Meetings. The City may at any time call a meeting of the Owners.
In such event the City is authorized to fix the time and place of said meeting and to provide for the giving of notice th ereof and to fix and adopt rules and regulations for the conduct of said meeting.
ITEM 12.1.
ATTACHMENT 2
35 Section 8.03. Procedure for Amendment with Written Consent of Owners. The City and the Fiscal Agent may at any time enter into a Supplemental Agreement amending the provisions of the Bonds or of this Agreement or any Supplemental Agreement, to the extent that such amendment is permitted by Section 8.01, to take effect when and as provided in this Section. A copy of such Supplemental Agreement, together with a request to Owners for their consent thereto, if such consent is required under Section 8.01, shall be mailed by first class mail, by the Fiscal Agent to each Owner of Bonds Outstanding, but failure to mail copies of such Supplemental Agreement and request shall not affect the validity of the Supplemental Agreement when assented to as in this Section provided.
If consent of the Owners is required under Section 8.01, such Supplemental Agreement shall not become effective unless there shall be filed with the Fiscal Agent the written consents of the Owners of at least 60% in aggregate principal amount of the Bonds then Outstanding (exclusive of Bonds disqualified as provided in Section 8.04) and a notice shall have been mailed as hereinafter in this Section provided. Each such consent shall be effective only if accompanied by proof of ownership of the Bonds for which such consent is given, which proof shall be such as is permitted by Section 9.04. Any such consent shall be binding upon the Owner of the Bonds giving such consent and on any subsequent Owner (whether or not such subsequent Owner has notice thereof) unless such consent is revoked in writing by the Owner giving such consent or a subsequent Owner by filing such revocation with the Fiscal Agent prior to the date when the notice hereinafter in this Section provided for has been mailed.
After the Owners of the required percentage of Bonds shall have filed their consents to the Supplem ental Agreement, the City shall mail a notice to the Owners in the manner hereinbefore provided in this Section for the mailing of the Supplemental Agreement, stating in substance that the Supplemental Agreement has been consented to by the Owners of the required percentage of Bonds and will be effective as provided in this Section (but failure to mail copies of said notice shall not affect the validity of the Supplemental Agreement or consents thereto). Proof of the mailing of such notice shall be filed w ith the Fiscal Agent. A record, consisting of the papers required by this Section 8.03 to be filed with the Fiscal Agent, shall be proof of the matters therein stated until the contrary is proved. The Supplemental Agreement shall become effective upon the filing with the Fiscal Agent of the proof of mailing of such notice, and the Supplemental Agreement shall be deemed conclusively binding (except as otherwise herein above specifically provided in this Article) upon the City and the Owners of all Bonds at the expiration of 60 days after such filing, except in the event of a final decree of a court of competent jurisdiction setting aside such consent in a legal action or equitable proceeding for such purpose commenced within such 60-day period.
Section 8.04. Disqualified Bonds. Bonds owned or held for the account of the City, excepting any pension or retirement fund, shall not be deemed Outstanding for the purpose of any vote, consent or other action or any c alculation of Outstanding Bonds provided for in this Article VIII, and shall not be entitled to vote upon, consent to, or take any other action provided for in this Article VIII. Upon request, the City shall provide an Officer ’s Certificate to the Fiscal Agent listing those Bonds which are disqualified pursuant to this Section 8.04.
Section 8.05. Effect of Supplemental Agreement . From and after the time any Supplemental Agreement becomes effec tive pursuant to this Article VIII, this Agreement shall be deemed to be modified and amended in accordance therewith, the respective rights, duties and obligations under this Agreement of the City and all Owners of Bonds Outstanding shall thereafter be de termined, exercised and enforced hereunder subject in all respects to such modifications and amendments, and all the terms and conditions of any such Supplemental ITEM 12.1.
ATTACHMENT 2
36 Agreement shall be deemed to be part of the terms and conditions of this Agreement for any and all purposes.
Section 8.06. Endorsement or Replacement of Bonds Issued After Amendments . The City may determine that Bonds issued and delivered after the effective date of any action taken as provided in this Article VIII shall bear a notation, by endorsement or otherwise, in form approved by the City, as to such action. In that case, upon demand of the Owner of any Bond Outstanding at such effective date and presentation of his Bond for that purpose at the Principal Office of the Fiscal Agent or at such other office as the City may select and designate for that purpose, a suitable notation shall be made on such Bond. The City may determine that new Bonds, so modified as in the opinion of the City is necessary to conform to such Owners’ action, shall be prepared, executed and delivered. In that case, upon demand of the Owner of any Bonds then Outstanding, such new Bonds shall be exchanged at the Principal Office of the Fiscal Agent without cost to any Owner, for Bonds then Outstanding, upon surrender of such Bonds.
Section 8.07. Amendatory Endorsement of Bonds . The provisions of this Article VIII shall not prevent any Owner from accepting any amendment as to the particular Bonds held by him, provided that due notation thereof is made on such Bonds.
Section 8.08. Opinion of Counsel Regarding Supplemental Agreement . The Fiscal Agent shall be furnished an opinion of counsel that any Supplemental Agreement entered into by the City and the Fiscal Agent complies with the provisions of this Article VIII, and the Fiscal Agent may conclusively rely upon such opinion.
ITEM 12.1.
ATTACHMENT 2
37 ARTICLE IX
MISCELLANEOUS
Section 9.01. Benefits of Agreement Limited to Parties . Nothing in this Agreement expressed or implied, is intended to give to any person other than the City, the Fiscal Agent and the Owners, any right, remedy, claim under or by reason of this Agreement. Any covenants, stipulations, promises or agreements in this Agreement contained by and on behalf of the City shall be for the sole and exclusive benefit of the Owners and the Fiscal Agent.
Section 9.02. Successor is Deemed Included in All References to Predecessor .
Whenever in this Agreement or any Supplemental Agreement either the City or the Fiscal Agent is named or referred to, such reference shall be deemed to include the successors or assigns thereof, and all the co venants and agreements in this Agreement contained by or on behalf of the City or the Fiscal Agent shall bind and inure to the benefit of the respective successors and assigns thereof whether so expressed or not.
Section 9.03. Discharge of Agreement. If the City shall pay and discharge the entire indebtedness on all or any portion of the Bonds Outstanding in any one or more of the following ways:
(A) by well and truly paying or causing to be paid the principal of, and interest and any premium on, such Bonds Outstanding, as and when the same become due and payable;
(B) by depositing with the Fiscal Agent or other fiduciary, at or before maturity, money which, together with (in the event that all of the B onds are to be defeased) the amounts then on deposit in the funds and accounts provided for in Sections 4.02 and
4.03, is fully sufficient to pay such Bonds Outstanding, including all principal, interest and redemption premiums; or
(C) by irrevocably depositing with the Fiscal Agent or other fiduciary , cash and Federal Securities in such amount as the City shall determine 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 Sections 4.02 and 4.03, 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 shall have been given as in this Agreement provided or provision satisfactory to the Fiscal Agent shall have been made for the giving of such notice, then, at the election of the City, and notwithstanding that any Bonds shall not have been surrendered for payment, the pledge of the Special Taxes and other funds provided for in this Agreement and all other obligations of t he City under this Agreement with respect to such Bonds Outstanding shall cease and terminate, except only the obligations of the City under Section 5.13 and to pay or cause to be paid to the Owners of the Bonds not so surrendered and paid all sums due the reon and all amounts owing to the Fiscal Agent pursuant to Section 7.05; and thereafter Special Taxes shall not be payable to the Fiscal Agent. Notice of such election shall be filed with the Fiscal Agent.
ITEM 12.1.
ATTACHMENT 2
38 Any funds thereafter held by the Fiscal Agent up on payments of all fees and expenses of the Fiscal Agent, which are not required for said purpose, shall be paid over to the City.
Section 9.04. Execution of Documents and Proof of Ownership by Owners. Any request, declaration or other instrument which this Agreement may require or permit to be executed by Owners may be in one or more instruments of similar tenor, and shall be executed by Owners in person or by their attorneys appointed in writing.
Except as otherwise herein expressly provided, the fact and date of the execution by any Owner or his attorney of such request, consent, declaration or other instrument, or of such writing appointing such attorney, may be prove d by the certificate of any notary public or other officer authorized to take acknowledgments of deeds to be recorded in the state in which he purports to act, that the person signing such request, declaration or other instrument or writing acknowledged to him the execution thereof, or by an affidavit of a witness of such execution, duly sworn to before such notary public or other officer.
Except as otherwise herein expressly provided, the ownership of registered Bonds and the amount, maturity, number and date of holding the same shall be proved by the registry books.
Any request, consent, declaration or other instrument or writing of the Owner of any Bond shall bind all future Owners of such Bond in respect of anything done or suffered to be do ne by the City or the Fiscal Agent in good faith and in accordance therewith.
Section 9.05. Waiver of Personal Liability. No member, officer, agent or employee of the City shall be individually or personally liable for the payment of the principal of, or interest or any premium on, the Bonds; but nothing herein contained shall relieve any such member, officer, agent or employee from the performance of any official duty provided by law.
Section 9.06. Notices to and Demands on City and Fiscal Agent. Any notice or demand which by any provision of this Agreement is required or permitted to be given or served by the Fiscal Agent to or on the City may be given or served by being deposited postage prepaid in a post office letter box, by overnight courier or by facsimile (with receipt confirmed by telephone) addressed (until another address is filed by the City with the Fiscal Agent) as follows:
City of Rancho Cordova
2729 Prospect Park Drive
Rancho Cordova, California 95670
Attention: Administrative Services Director
Any notice or demand which by any provision of this Agreement is required or permitted to be given or served by the City to or on the Fiscal Agent may be given or served by being deposited postage prepaid in a post office letter box, by overnight courier or by facsimile (with receipt confirmed by telephone) addressed (until another address is filed by the Fiscal Agent with the City) as follows:
ITEM 12.1.
ATTACHMENT 2
39 U.S. Bank Trust Company, National Association
1420 Fifth Avenue, 7th Floor
Mail Stop PD-WA-T7CT
Seattle, Washington 98101
Attention: Global Corporate Trust Services
Fax: (206) 344-4630
Section 9.07. Partial Invalidity. If any Section, paragraph, sentence, clause or phrase of this Agreement shall for any reason be held illegal or unenforceable, such holding shall not affect the validity of the remaining portions of this Agreement. The City hereby declares that it would have adopted this Agreement and each and every other Section, paragraph, sentence, clause or phrase hereof and authorized the issue of the Bonds pursuant thereto irrespective of the fact that any one or more Sections, paragraphs, sentences, clauses, or phrases of this Agreement may be held illegal, invalid or unenforceable.
Section 9.08. Unclaimed Moneys . Anything contained herei n to the contrary notwithstanding, any moneys held by the Fiscal Agent in trust for the payment and discharge of the principal of, and the interest and any premium on, the Bonds which remains unclaimed for two (2) years after the date when the payments of such principal, interest and premium have become payable, if such moneys was held by the Fiscal Agent at such date, shall be repaid by the Fiscal Agent to the City as its absolute property free from any trust, and the Fiscal Agent shall thereupon be releas ed and discharged with respect thereto and the Bond Owners shall look only to the City for the payment of the principal of, and interest and any premium on, such Bonds.
Section 9.09. Applicable Law. This Agreement shall be governed by and enforced in accordance with the laws of the State of California applicable to contracts made and performed in the State of California.
Section 9.10. Conflict with Act. In the event of a conflict between any provision of this Agreement with any provision of the Act as in effect on the Closing Date, the provision of the Act shall prevail over the conflicting provision of this Agreement.
Section 9.11. Conclusive Evidence of Regu larity. Bonds issued pursuant to this Agreement shall constitute conclusive evidence of the regularity of all proceedings under the Act relative to their issuance and the levy of the Special Taxes.
Section 9.12. Payment on Business Day. In any case where the date of the maturity of interest or of principal (and premium, if any) of the Bonds or the date fixed for redemption of any Bonds or the date any action is to be taken pursuant to this Agreement is other than a Business Day, the payment of interest or principal (and premium, if any) or the action need not be made on such date but may be made on the next succeeding day which is a Business Day with the same force and effect as if made on the date required and no interest shall accrue for the period from and after such date.
Section 9.13. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original.
ITEM 12.1.
ATTACHMENT 2
[Signature page to Fiscal Agent Agreement dated as of September 1, 2023]
IN WITNESS WHEREOF, the City has caused this Agreement to be executed in its name and the Fiscal Agent has caused this Agreement to be executed in its name, all as of September 1, 2023.
CITY OF RANCHO CORDOVA, for itself and
on behalf of CITY OF RANCHO CORDOVA
ARISTA DEL SOL COMMUNITY FACILITIES
DISTRICT NO. 2022-1
By:
Administrative Services Director
U.S. BANK TRUST COMPANY, NATIONAL
ASSOCIATION,
as Fiscal Agent
By:
Authorized Officer
ITEM 12.1.
ATTACHMENT 2
A-1
EXHIBIT A
FORM OF BOND
UNITED STATES OF AMERICA
STATE OF CALIFORNIA
No. ________ ***$__________***
CITY OF RANCHO CORDOVA
ARISTA DEL SOL COMMUNITY FACILITIES DISTRICT NO. 2022-1 IMPROVEMENT AREA NO. 1
SPECIAL TAX BONDS SERIES 2023
INTEREST RATE: MATURITY DATE: BOND DATE: CUSIP:
% September 1, 20__ __________, 2023
REGISTERED OWNER: CEDE & CO.
PRINCIPAL AMOUNT: ***______________ DOLLARS***
The City of Rancho Cordova (the “City”) for and on behalf of the City of Rancho Cordova Arista Del Sol Community Facilities District No. 2022-1 (the “District”) for Improvement Area No. 1 of the District , for value received, hereby promises to pay solely from the Special Tax (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 d efined) to which interest has been paid or duly provided for, semiannually on March 1 and September 1, commencing March 1, 2024 (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 St. Paul, Minnesota (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 t he month in which the Interest Payment Date occurs (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 delivere d 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 City Council of the City on September 6, 2023 (the “Resolution”) , pursuant to the Mello -Roos Community Facilities Act of 1982, as amended, Sections 53311, et seq. , of the California ITEM 12.1.
ATTACHMENT 2
A-2
Government Code (the “Mello-Roos Act”) for the purpose of providing moneys for the construction and acquisition of i mprovements for the District, and is one of the bonds designated “City of Rancho Cordova Arista Del Sol Community Facilities District No. 2022-1 Improvement Area No. 1 Special Tax Bonds Series 2023” (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, 2023, by and between the City and the Fiscal Agent (the “Agreement”) and this reference incorporates the Agreement herein, and by acceptance hereof the Owner of th is 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. Capitalized terms used but not defined herein are defined in the Agreement.
Pursuant to the Mello-Roos Act, the Agreement and the Resolution, the principal of and interest on this Bond are payable solely from the “Special Tax Revenues,” being the proceeds of the special taxes annually received by the City for Improvement Area No. 1 (the “Special Taxes”), less an amount equal to the Administrative Expense Priority, including all scheduled payments and delinquent payments thereof, interest and penalties thereon and proceeds of the redemption or sale of property sold a s a result of foreclosure of the lien of the Special Taxes , and certain funds held under the Agreement.
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 defaul t 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 City as may be permitted by law. The Bonds do not constitute obligations of the City for which the City 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 City 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 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 any date thereafter 100
The Bonds shall be subject to mandatory redemption from prepayments of the Special Tax by property owners, in whole or in part among maturities as shall be specified by the City 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 the date of redemption:
ITEM 12.1.
ATTACHMENT 2
A-3
Redemption Dates Redemption
Price
Interest Payment Dates through 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 proceeds of any such prepayment shall be deposited in the Prepayment Account of the Bond Fund and applied by the Fiscal Agent to pay the redemption price of the Bonds.
The Term Bonds maturing September 1, ____ and September 1, ____ are subject to mandatory sinking payment redemption in part on September 1, ____ and September 1, ____, 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 prem ium, in the aggregate respective principal amounts as set forth in the following tables:
September 1, ____ Term Bonds
Mandatory
Redemption Date
(September 1)
Sinking Fund
Payment
September 1, ____ Term Bonds
Mandatory
Redemption Date
(September 1)
Sinking Fund
Payment
The amounts in the foregoing tables shall be reduced pro rata at the direction of the City in an Officer’s Certificate, in order to maintain substantially uniform debt service, as a result of any prior partial redemption of the Bonds.
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.
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 ITEM 12.1.
ATTACHMENT 2
A-4
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 Fis cal 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 City 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 City, does not exceed any debt limit prescribed by the laws or Constitution of the State of California.
Unless this Bond is pres ented 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.
ITEM 12.1.
ATTACHMENT 2
A-5
IN WITNE SS WHEREOF, the City of Rancho Cordova has caused this Bond to be executed in its name by the manual or facsimile signature of its Mayor and attested by the manual or facsimile signature of its City Clerk.
CITY RANCHO CORDOVA
By:
Mayor
Attested:
By:
City Clerk
FISCAL AGENT’S CERTIFICATE OF AUTHENTICATION
This is one of the Bonds described in the Resolution and the Agreement.
Dated: _____________, 2023
U.S. BANK TRUST COMPANY, NATIONAL
ASSOCIATION,
as Fiscal Agent
By:
Authorized Officer
ITEM 12.1.
ATTACHMENT 2
A-6
FORM OF 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 an eligible
guarantor institution with membership in an approved
signature guarantee medallion program pursuant to
Securities and Exchange Commission Rule 17A(d)15.
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.
ITEM 12.1.
ATTACHMENT 2
Jones Hall Draft 8.9.23
FUNDI
NG, CONSTRUCTION AND ACQUISITION AGREEMENT
Dated as of September 1, 2023
by and between
CITY OF RANCHO CORDOVA
and
WOODSIDE 05N, LLP
RELATIVE TO THE
CITY OF RANCHO CORDOVA
ARISTA DEL SOL COMMUNITY FACILITIES DISTRICT NO. 2022-1 ITEM 12.1.
ATTACHMENT 3
This FUNDING, CONSTRUCTION AND ACQUISITION AGREEMENT (this “Agreement”) is entered into as of September 1, 2023, by and between the CITY OF RANCHO CORDOVA, a municipal corporation and general law city existing under the laws of the State of California (the “ City”), and WOODSIDE 05N, LLP , a California limited liability partnership (“Developer”).
RECITALS
WHEREAS, the City Council of the City (the “City Council”) has conducted proceedings under and pursuant to the Mello-Roos Community Facilities Act of 1982, as amended (the “Act”), to (i) establish the City of Rancho Cordova Arista Del Sol Community Facilities District No. 2022- 1 (the “District”), (ii) designate within the District, “Improvement Area No. 1 of the City of Rancho Cordova Arista Del Sol Community Facilities District No. 2022-1” (“Improvement Area No. 1 ”), and (iii) establish a “City of Rancho Cordova Arista Del Sol Community Facilities District No. 2022- 1 (Future Annexation Area)” for the District (the “Future Annexation Area”);
WHEREAS, land currently in the District and anticipated to annex from the Future Annexation Area in the future relates to the proposed development within the City commonly known as “Arista Del Sol” (the “Property”) owned by, or under option to, the Developer, and the District has been formed for the purpose of paying costs for certain public facilities and fees which are necessary to the development of the Property;
WHEREAS, the County of Sacramento approved the Specific Plan for the development of the Property (and properties owned by others) (the “Specific Plan”), the Developer proposes to construct improvements and to pay certain fees which will fund improvements to the portion of the Specific Plan that includes the Property (the development of such portion of the Specific Plan is defined herein as the “Project”) as required by the Project Approvals (as defined below). The Specific Plan sets forth a comprehensive land use plan and establishes detailed regulations, conditions and programs for development of the property that includes the Proper ty, the City approved tentative subdivision maps for the Project and final subdivision maps for portions of the Project, and the Specific Plan, the tentative subdivision maps, including conditions of approval, and other existing and subsequent approvals granted by City and agreements between Developer and City in implementation of the Project, as the same may be amended from time to time, including amendments thereto (these documents are herein collectively referred to as the “Project Approvals”);
WHEREAS, Section 53313.5 of the Act provides that a community facilities district may finance the construction and acquisition of facilities constructed after the adoption of the resolution of formation establishing the community facilities district if the facilities have been constructed as if they had been constructed under the direction and supervision, or under the authority of, the local agency whose governing body is conducting proceedings for the establishment of the district; and
WHEREAS, the purpose of this Agreement is to provide for the acquisition of certain public facilities serving development of the Project to be financed in whole or in part by the District, including payment of certain fees to fund such public facilities, using proceeds from issuance and sale of bonds for the District to finance the design and acquisition of such public facilities and expenses incidental thereto and to provide the terms of any reimbursement to Developer.
ITEM 12.1.
ATTACHMENT 3
-2-
AGREEMENTS
NOW, THEREFORE, in consideration of the preceding recitals and the mutual covenants hereinafter contained, the parties agree as follows:
Section 1. Establishment of District and Improvement Area No. 1 . The City has initiated and concluded proceedings pursuant to the Act for the establishment of the Dis trict, including designation of Improvement Area No. 1 therein, and identification of Future Annexation Area related thereto. Such proceedings included elections pursuant to Sections 53326 and 53327 of the California Government Code on (i) the question of the issuance of bonds for Improvement Area No. 1 of the District to finance the design, construction or acquisition of the below described authorized facilities, either directly or through the payment of fees charged by the City to fund capital improvements, (ii) the issue of the annual levy of special taxes on all taxable property within the Improvement Area No. 1 of the District pursuant to the terms of the Rate and Method of Apportionment of Special Taxes for Improvement Area No. 1 (for Improvement Area No. 1 and each future improvement area, an “RMA”), for the payment of principal and interest on the bonds of the District and the annual administrative expenses of the City and the District in levying and collecting such special taxes, paying the principa l and interest on such bonds and providing for the registration, exchange and transfer of such bonds, including the fees of fiscal agents and paying agents, and any necessary replenishment for the reserve fund for such bonds, accumulation of funds for future bond payments, or the acquisition of authorized facilities and payment of authorized costs from the proceeds of such special taxes, and (iii) the question of the establishment of an appropriations limit for Improvement Area No. 1. This Agreement applies to Improvement Area No. 1 and each future improvement area (each, an “Improvement Area”) designated out of the Future Improvement Area.
Section 2. Sale of Bonds; Authorized Facilities. The City intends to proceed with the sale of bonds in one or more s eries in each Improvement Area (herein, the “Bonds”) for the District for the purpose of raising money eligible for use as payment for Authorized Facilities and/or Authorized Fees (described below) in accordance with this Agreement and City policies, in the maximum aggregate principal amount of not to exceed $ 50,000,000 (excluding Bonds described in Section 53364.2(e) of the Act) (the “Authorization”), initially allocated as follows: (i) for Improvement Area No. 1, $2 5,000,000 and (ii) for land within the Future Annexation Area, $25,000,000. The timing of the issuance and sale of each series of Bonds, the aggregate principal amount thereof, and the terms and conditions upon which they shall be sold shall be determined by the City. If multiple series of Bonds are to be issued, this Agreement is applicable to proceeds from all such series of such Bonds.
The authorized facilities (the “ Authorized Facilities”) eligible for reimbursement from Bond proceeds and City -wide fees eligible for reimburs ement and advance funding (the “Authorized Fees”) from Bond proceeds are generally described in Exhibit A attached hereto.
The Authorized Facilities identified in Exhibit A represent all of the facilities that are eligible for acquisition; however Develop er may not construct all of the Authorized Facilities (e.g., some facilities may be constructed by City, other public agencies or utilities, or other developers that require the construction of such facilities, or in concert with other developers).
“Available Construction Proceeds” shall be the proceeds of the sale of the Bonds net of costs of issuance, less the Formation Fees and Costs, capitalized interest, and any administration costs to be deducted therefrom, plus any interest earnings on such proceeds (“Net Bond Proceeds”), plus any Special Taxes that are authorized to be used to finance Authorized Facilities and Authorized Fees directly.
ITEM 12.1.
ATTACHMENT 3
-3-
Section 3. Tax Requirements. For any Bonds that are issued as federally tax - exempt, the City shall take all actions which, in the opinion of City’s bond counsel, are necessary in order to avoid classification of the Bonds as “arbitrage bonds” or the loss of tax exemption for the Bonds for any other reason.
Section 4. Amounts to Be Included in Bonds. The principal amount of each series of Bonds shall include an amount needed (i) to fund a reserve fund for the payment of principal and interest of such Bonds as is determined by the City to be necessary and appropriate, capitalized interest on such Bonds for such period as the City and the Developer shall determine is appropriate (if and to the extent not provided by the levy and collection of special taxes in advance of such Bond sale), (ii) the amount of the discount of the underwriter who purchases such Bonds, and (iii) other expenses incurred by the City in connection with the issuance and sale of such Bonds, including bond and disclosure counsel fees, legal fees, fees of the bank which will act as transfer agent, registrar and paying or fiscal agent for such Bonds , other fees and costs normally incidental to the sale of Bonds, and such other fees and costs enumerated in Section 53345.3 of the Act as the City determines are necessary and appropriate. The City may also include within the principal amount of a series of Bonds an amount determined by the City to equitably reimburse Developer, or any entities related thereto, for costs and expenses incurred by them which are related to the establishment of the District; provided that the City shall determine the amount to be so reimbursed on the basis of detailed itemizations of costs provided by Developer. (All of the foregoing fees, costs, and expenses described in this paragraph are hereinafter “Formation Fees and Costs.”) In no event shall Developer be reimbursed from Bond proceeds for (i) in- house administrative overhead (except that Developer shall be entitled to payment equal to four percent (4%) of actual construction costs as and for project and construction management services), (ii) interest expense incurred b y Developer on moneys advanced during the proceedings for formation of the District and issuance of Bonds, and during construction of the Authorized Facilities, and (iii) any other costs and expenses incurred by Developer which are not authorized by the Act.
Section 5. Design of Authorized Facilities.
(a) Conformance with Standards. Authorized Facilities to be acquired by the City shall be designed in conformance with all applicable City standards and requirements. Upon completion of the design of each such Authorized Facility to the satisfaction of the City; and when Developer has paid to the City all applicable plan checking and other fees, Developer shall notify City that the design of the Authorized Facility is completed.
(b) Reimbursement for Design . Developer may be reimbursed out of Available Construction Proceeds for such expenses incurred in designing those Authorized Facilities set forth in Exhibit A hereto, including all applicable plan checking and other fees paid, subject to the City’s determination of the amount to be so reimbursed pursuant to the terms hereof, and subject to the limitation that reimbursement in all cases is to be made from Available Construction Proceeds only. Reimbursement for design and for plan check services related to approval of the design for each Authorized Facility shall be made in one or more lump sum payments as and when the design for each Authorized Facility is approved, but only after City has received and approved all invoices for such services associated with the design of such Authorized Facility.
(c) Assumption of Design by City . Notwithstanding the preceding provisions of this Section, if the City determines that Developer is not proceeding with the design of an Authorized Facility to be constructed by Developer for acquisition by City on a reasonable schedule which ITEM 12.1.
ATTACHMENT 3
-4-
will enable the City to insure that construction of such Authorized Facility can be completed within the time specified in Section 6 hereof, the City may take over the design of the Authorized Facility by giving Developer written notice thereof. Upon receipt of such a notice, Developer shall surrender to the City all plans and specifications which have then been completed or which are in progress with respect to such Authorized Facility.
If the City takes over the design of an Authorized Facility as provided above, the City shall reimburse Developer from the Available Construction Proceeds for the approved expenses incurred in connection with the design of the Authorized Facility which have not previously been reimbursed, provided there are sufficient funds remaining, after payment for the Authorized Facilities, to do so. City shall be reimbursed from Available Construction Proceeds the expenses incurred to complete the design . If the City takes over the design of other Authorized Facilities commenced by Developer, the cost of a portion of the plans for such Authorized Facilities taken over shall be eligible for fee credits to the extent fee credits are applicable hereunder fo r Authorized Facilities.
Section 6. Construction for Acquisition. The City shall only be required to acquire from Developer, and otherwise pay Developer for, the Authorized Facilities set forth in Exhibit A.
For those Authorized Facilities which Develo per constructs, Developer shall proceed with the construction thereof in accordance with the approved plans and specifications.
For construction of Authorized Facilities under this Section, Developer shall comply with all of the following requirements to insure that the Authorized Facilities will be constructed as if they had been constructed under the direction and supervision, or under the authority of the City:
(a) Approval by City. The plans and specifications and form of contract documents shall be approved by the City Engineer and City Attorney for conformance with City Codes and policy.
(b) Contract Requirements . Developer shall require, and the specifications and contract documents shall require, all such contractors to pay prevailing wages in accordance with the California Labor Code.
To the extent bidding is required by the City the following shall apply:
(i) The bidding and contract award procedures shall be approved by the City Engineer for conformance with City codes and policy. Based on q ualifications submitted by the contractors, the Developer, in consultation with the City Engineer, shall select a list of qualified bidders for each element of work. If the Developer determines that the nature of a particular element of the construction do es not require a pre- qualified bid list, the Developer may allow a particular element of the work to be bid without a pre-qualified bid list.
(ii) The specifications and bid and contract documents shall require all contractors and subcontractors, to pay prevailing wages in accordance with the California Labor Code.
(iii) All contractors and subcontractors shall be required to provide proof of insurance coverage throughout the term of the construction of the Authorized Facilities.
(iv) No contractor or subcontractor may be listed on a bid proposal for the Authorized Facilities unless registered with the Department of Industrial Relations pursuant to Labor ITEM 12.1.
ATTACHMENT 3
-5-
Code Section 1725.5. No contractor or subcontractor may work on the Authorized Facilities unless registered with the Department of Industrial Relations pursuant to Labor Code Section 1725.5. Developer shall be responsible for ensuring that these contractor registration requirements are adhered to since construction of the Authorized Facilities is subject to compliance monitoring and enforcement by the Department of Industrial Relations.
(v) Developer shall notify the Department of Industrial Relations within five (5) days of the award of the initial prime contract for the Authorized Facilities.
(vi) Developer shall comply with all federal, state and local laws, ordinances and regulations applicable to the construction of the Authorized Facilities.
(c) Proof of Insurance/Completion of Construction . All such contractors shall be required to provide proof of insurance coverage throughout the term of the construction of the Authorized Facilities which they will construct in conformance with the City’s standard procedures and requirements. Developer shall cause the Authorized Facilities to be constructed in an expeditious manner as determined by the City to be in accordance with project approv als and development progress. If Developer fails to expeditiously prosecute such construction of the Authorized Facilities to be constructed by Developer for acquisition by the City, the City shall have the right and may elect to take over the constructio n of such Authorized Facilities, or any part thereof, if it determines it is necessary for it to so proceed in order to protect the City’s interests.
If the City elects to so proceed, it shall notify Developer in writing that if Developer does not satisfy the City that construction is proceeding expeditiously on the construction of an Authorized Facility within 30 days after receipt of such notice, the City will take over the construction of such Authorized Facilities. If after receiving such a written no tification Developer does not satisfy the City that they are proceeding expeditiously to construct that portion of the Authorized Facilities identified in the written notification to the satisfaction of the City, within 30 days from the date of receipt thereof, Developer shall relinquish to the City all design documents, and shall cooperate with the City in every way to ensure that the construction of the Authorized Facilities will be completed expeditiously.
Notwithstanding the provisions of this Section, the sources of funds to be utilized by the City for the construction of any such Authorized Facilities may include (i) the proceeds of the sale of Bonds of the District, (ii) the proceeds of applicable City development fees collected pursuant to the appli cable codes, ordinances and policies of the City, (iii) proceeds from the sale of the bonds of another community facilities district or assessment district established over and including, property in the City, (iv) interest earnings on the reserve fund or improvement fund for Bonds of the District, to the extent such earnings are determined by the City to be available for construction of the Authorized Facilities, (v) the Developer’s subdivision bond or bonds to the extent applicable, (vi) any other performance security that may have been provided by Developer, and (vii) the Developer’s and/or contractors’ performance bonds. To the extent that such sources may be insufficient to pay for the construction of an Authorized Facility which will be constructed by the City pursuant to this Section, the City may either construct only those Authorized Facilities which can be constructed with such sources of funds which are available therefor, or the City may proceed to complete the Authorized Facilities and charge the Developer, the Developer’s bond or any contractor’s bond for the costs thereof. Nothing contained herein and no take -over of construction of Authorized Facilities by the City shall relieve a Developer of any of its responsibilities under any development agreement or project approval relating to the Property.
Following completion of the Authorized Facilities taken over by the City, the City shall use the above-referenced sources to reimburse the Developer for any costs incurred by the Developer in ITEM 12.1.
ATTACHMENT 3
-6-
the construction of the Authorized Facilities that were not previously reimbursed to the Developer.
Section 7. Inspection and Approval of Construction. The City shall provide such level of inspection of the progress of construction of the Authorized Facilities to be constructed by Developer for acquisition or reimbursement therefor by the City as it deems necessary. The City may provide engineering and inspection services using City staff, contracting with the Sacramento County Public Works Agency, or contracting with any other entity for these services (in all cases referred to as the “City Inspectors”). City Inspectors shall have access to the const ruction sites at all reasonable times for the purpose of conducting their inspections. Developer and its contractors shall reasonably cooperate in every way with the City Inspectors to ensure that they are afforded an adequate opportunity to inspect each and every aspect of the progress of construction of each and every such Authorized Facility.
Section 8. Liens. Upon the expiration of the time for the recording of claims of liens as prescribed by Section 3115 and 3116 of the California Civil Code, Dev eloper shall provide to the City (as set forth in paragraph 9(a) below) such evidence or proof as the City shall reasonably require that all persons, firms and corporations supplying work, labor, materials, supplies and equipment to the construction of the Authorized Facilities, or portion thereof, constructed by Developer for acquisition by the City have been paid, and that no claims of liens have been recorded by or on behalf of any such person, firm or corporation. During construction of the Authorized Facilities, Developer shall provide, or cause its contractors to provide, conditional lien releases with respect to pending Requests for Payment (and unconditional lien releases for previously paid Requests for Payment), in accordance with the statutory re quirements and as may be requested by City.
Section 9. Payment of Acquisition Price.
(a) Request for Payment of Acquisition Price. On the 30th day of each month following commencement of construction of any of the Authorized Facilities, or such other dates as are mutually agreeable by City and Developer, Developer will submit to City an invoice, or other form of request, for payment (the “Request for Payment”) of the Acquisition Price (as determined below) for the portion of each Authorized Facility co nstructed during the previous month. The Request for Payment shall be made on the form attached hereto as Exhibit B and include such necessary information (including invoices, receipts, worksheets and other evidence) in sufficient detail to allow the City to verify the Acquisition Price of such portions of the Authorized Facilities.
With the Request for Payment, Developer shall also submit copies of verifications of inspections conducted pursuant to Section 7 and lien releases pursuant to Section 8 above f or the portions of the Authorized Facilities for which the Request for Payment is submitted.
(b) Determination of Acquisition Price/City Inspection. Upon submittal of a complete (as reasonably determined by City) Request for Payment, the City or the City and Other Public Entity, shall determine the Acquisition Price (or in the case of a reimbursement, the reimbursement amount, which hereinafter is included in the term “Acquisition Price”) to be paid by the City for the acquisition from Developer of the po rtions of the Authorized Facilities constructed by Developer during said prior month. City Inspectors shall verify the type and quantity of work described in the Request for Payment as having been completed and confirms said work is completed in a satisfac tory manner. City Inspectors shall transmit to the City’s Finance Department the findings of its review and then consult with the Finance Department as needed to determine the Acquisition Price. The Acquisition Price for the portion of an Authorized Facility shall include the actual cost of construction (or payment) thereof as determined by the contract prices as set forth in contracts and purchase orders entered into by Developer with its ITEM 12.1.
ATTACHMENT 3
-7-
contractors, and suppliers, in accordance with standards and proce dures therefor as prescribed by the City. The City shall use its best efforts to determine the Acquisition Price within twenty (20) business days from receipt of a Request for Payment to determine the Acquisition Price. Upon determining the Acquisition P rice, City shall promptly notify Developer in writing of such Acquisition Price.
(c) Payment of Acquisition Price. Within forty-five (45) days after receipt of a complete (as reasonably determined by City) Request for Payment, the City, through its fiscal agent, shall pay from the Available Construction Proceeds the Acquisition Price then due to Developer. If the Payment Request indicates that Developer is withholding from its contractor a retention of a least five percent (5%) of the contract price for the portion of the constructed Authorized Facility, then the full amount of the approved Acquisition Price shall be authorized for payment to Developer; if the Payment Request does not indicate the withholding by Developer of such five percent (5%) retention, then the amount to be paid to Developer shall be equal to the Acquisition Price, less a retention of five percent (5%) of the contract price for the portion of the constructed Authorized Facility. Upon completion of such Authorized Facility in its entirety, including all “Punch List” work, and acceptance of the Authorized Facility by the City, the City, through its fiscal agent, shall pay from the Available Construction Proceeds the balance of the Acquisition Price then due Developer for such Facility, including any 5% progress retention then paid by Developer or any 5% retentions previously retained by City with respect thereto. City may withhold payment from a Developer if the Developer requesting payment owes the City money on outstanding invoices or is delinquent in the payment of any special taxes, until such balance is brought to zero. For the purposes of clarity, acceptance of a completed Authorized Facility is not a condition precedent to the payment of the Acquisition Price of the Authorized Facility in accordance with this subsection.
(d) Payment Limited to Available Construction Proceeds . As noted hereunder, payments to Developer shall be payable solely from the Available Construction Proceeds. The amount to be paid to Developer shall be a reimbursement for actual costs incurred as determined by the City in accordance with this Agreement and shall not exceed the Developer’s cost thereof as reasonably determined by the City to be eligible under the Act to be part of the Acquisition Price of A uthorized Facilities. All portions of the Authorized Facilities not acquired with the Available Construction Proceeds shall nonetheless be constructed by the Developer, to the extent required by the project approvals. In the event Available Construction Proceeds are insufficient to pay the eligible Acquisition Price, any shortfall shall be the responsibility of the Developer, however Developer may request that all or any portion of such shortfall be reimbursed from additional series of Bonds for the Distr ict if and when such additional Bonds are issued, and in such event the deferred amount will be eligible for reimbursement from proceeds of such future Bonds, to the extent funds are available.
Developer shall not be entitled to reimbursement for costs allocable to any Authorized Facility which has previously been acquired by the City and reimbursed from other sources, if, in the opinion of the City, such reimbursement would create a double payment to Developer(s) for such Authorized Facility, or component thereof.
(e) Annual Accounting of Available Construction Proceeds . At the request of Developer, which shall be not more than once a year during the term of this Agreement, City shall prepare and provide to Developer an accounting (an “Annual Accounting”) of the following: (i) the total amount of Available Construction Proceeds then on deposit in the Improvement Fund hereunder and deposited thereto from the prior fiscal year; (ii) the fiscal year tax roll submitted to the County Auditor-Controller; (iii) the amount of all charges and credits to the Improvement Fund during the prior fiscal year, including interest earnings on the funds therein and charges for City ITEM 12.1.
ATTACHMENT 3
-8-
administration and any third party consultant or administration fees; (iv) the amount of Authorized Fees then advanced on behalf of Developer pursuant to Section 16 below; and (v) the amount, if any, of outstanding payments then approved for payment to Developer pursuant to approved Requests for Payment.
Section 10. Acquisition/Ownership of Facilities.
(a) Dedication of Authorized Facilities . Upon determination by Developer that an Authorized Facility is complete and ready for acceptance by the City, Developer shall execute and submit to City or other public agency or utility that will own and operate such Authorized Facility an offer of dedication (or other such instrument acceptable to the City or applicable public entity) irrevocably offering to transfer ownership of the Authorized Facility (the “Offer of Dedication”).
(b) Review of Completed Construction. Upon delivery to City or other public agency or utility of the Offer of Dedication and upon (i) completion of the construction of an Authorized Facility, (ii) receipt of written notification from City’s Inspectors that construction thereof has been completed in accordance with the plans and specifications thereof and the City’s or other entity’s standard requirements, and (iii) receipt of satisfactory proof, based on the records of Developer and the City and such certifications as th e City may require, that the requirements of Section 6 hereof have been satisfied, the City shall notify Developer in writing that the construction of the Authorized Facility has been satisfactorily completed. Upon receiving such notification of a completed Authorized Facility, Developer shall forthwith file with the County Recorder of the County of Sacramento a Notice of Completion pursuant to the provision of Section 3093 of the California Civil Code. Developer shall furnish to the City a duplicate copy of each such Notice of Completion showing thereon the date of filing with the County Recorder. The costs incurred by the City in inspecting and approving the construction of the Authorized Facilities shall be paid by Developer, subject to reimbursement f rom Available Construction Proceeds. Upon recordation of a Notice of Completion, the City or other entity shall accept the Authorized Facility offered and the one-year warranty period provided in paragraph 11(c) shall commence.
(c) Ownership of Facilitie s. Notwithstanding the fact that some of the Authorized Facilities, or components or segments thereof, to be constructed by Developer for acquisition by the City or other public agency or utility may be constructed in dedicated street rights -of-way or on property which has been or will be dedicated or offered for dedication to the City, District or other entity, such Authorized Facilities, or components or segments, shall be and remain the property of Developer, and Developer shall be responsible for any l oss or damage thereto or liability arising therefrom, until they are acquired by the City or other entity as provided in this Agreement. Such ownership by Developer shall likewise not be affected by any agreement which Developer may enter into with the Ci ty pursuant to the provisions of the Subdivision Map Act (Section 66410 et seq. of the California Government Code) which agreement may contain or include provisions with respect to the construction and ownership of Authorized Facilities which provisions may seem to be contradictory to the provision of this Agreement. The provisions of this Section shall control.
(d) Maintenance of Authorized Facilities . Until an Authorized Facility is acquired by the City or other public agency or utility, Developer shall maintain it, and shall keep the same free of any liens and in good operating condition. Upon the acceptance of an Offer of Dedication of an Authorized Facility by the City or other entity, the City or other entity shall, except as otherwise provided in the Project Approvals, become responsible for its maintenance, subject to the warranty period in section 11(c).
ITEM 12.1.
ATTACHMENT 3
-9-
(e) Dedication of Rights -of-Way. Notwithstanding the preceding provisions of this Section, the City will not acquire any Authorized Facilities, unless and until the street, drainage or other utility rights of way where they are located have been irrevocably offered to the City for dedication.
(f) Expectations of the Parties. The City understands and agrees that (i) Developer may be constructin g Authorized Facilities prior to the availability of Available Construction Proceeds that will be used to pay for such Authorized Facilities, (ii) the City or the other public agencies that will own and operate such Authorized Facilities may be inspecting such Authorized Facilities and processing and completing payment requests for the payment on such Authorized Facilities with knowledge that there may be insufficient Available Construction Proceeds available at such time, (iii) the Authorized Facilities may be conveyed to and accepted by the City or other local agency that will own and operate such Authorized Facilities when there are insufficient Available Construction Proceeds to pay the Acquisition Prices of such Authorized Facilities, and (iv) in any such case, the payment of any approved payment requests for the Acquisition Prices of such Authorized Facilities will be deferred until there are sufficient Available Construction Proceeds available to pay the Acquisition Prices of such Authorized Facilities , at which time the City will, from time to time and in as many installments as necessary, promptly make such payments in accordance with this Agreement. At all times, Developer will be constructing such Authorized Facilities with the expectation that the Acquisition Prices for such Authorized Facilities will be paid solely from the Available Construction Proceeds. The conveyance of Authorized Facilities to the City or a local agency that will own and operate such Authorized Facilities prior to receipt of t he Acquisition Prices for such Authorized Facilities shall not be construed as a dedication or gift, or a waiver of the payment of the Acquisition Prices, or any part thereof, for such Authorized Facilities.
Section 11. Improvement Security.
(a) Security Prior to Final Maps . Notwithstanding the provisions of this Agreement, Developer shall be required to agree to construct and to secure the construction and completion of construction of the Authorized Facilities, or portions thereof, as a conditi on precedent to the approval of final subdivision or parcel maps for portions of Developer’s Property as required by the City pursuant to Section 66462 and Sections 66499 through 66499.10 of the Government Code.
(b) Reduction in Amount of Improvement Bonds. The aggregate principal amount of the improvement bonds or other security provided by Developer pursuant to this Section shall be reduced by such amount as the City shall reasonably determine is appropriate upon receipt of the proceeds from the sale of the Bonds. The amount of the reduction of such aggregate principal amount shall be determined by the City based on the amount of each such improvement bond or other security which relates to the Authorized Facilities to be constructed or acquired with th e Available Construction Proceeds provided by the sale of the Bonds and Special Tax Revenues.
(c) Performance Bonds-One Year Warranty. Developer warrants to the City or other public agency or utility having jurisdiction that the Authorized Facilities constructed by Developer and acquired by the City shall be free from defects in workmanship or materials for a period of one year from the date of acceptance by the City. All subdivision and performance bonds shall provide, among other things, that the princ ipal thereof, whether that be Developer or its contractor(s), guarantees that the completed Authorized Facilities shall be free from defects resulting from faulty workmanship and materials for a period of one (1) year from the date of ITEM 12.1.
ATTACHMENT 3
-10-
acceptance by the City or other public entity, and the obligation of the surety shall extend to the fulfilling of that guarantee. At the end of said one -year period, and subject to certification from the City Engineer that any defects have been corrected, the obligation of the principal and surety named therein shall cease. For purposes of this Section 11, the correction of any defects in the Authorized Facility shall not mean the day -to-day upkeep or correction of normal wear and tear of the Authorized Facility (such as water ing or weeding for landscape improvements, painting, graffiti removal, etc.).
Section 12. Gap Shortfall.
(a) “Gap Shortfall” Defined. The parties anticipate that a shortfall will occur between:
(i) the anticipated cost of the Authorized Facilities as determined from the actual construction and design contracts and related invoices therefor and the actual costs of all other Authorized Facilities, and (ii) the Net Bond Proceeds (hereafter referred to as the “Gap Shortfall.”)
(b) Reimbursement of Gap Shortfall to Developer . To cov er the Gap Shortfall, Developer agrees with the City to defer payment of the Gap Shortfall until and to the extent the District can impose and collect annual special taxes in excess of the amounts required annually to pay req uired debt service, replenish the debt service reserve fund, cure bond delinquencies and pay City administration costs associated therewith (“Available Special Tax Revenues”). In consideration of such deferral of payment of the Gap Shortfall, City covenants and agrees that the City shall levy and collect the special taxes against all properties within the District at the maximum rate permitted under the District and annually pay, after September 1st of each year, to Developer from Available Special Tax Revenues payments towards such deferred Gap Shortfall, for a period of ten (10) years (unless the Gap Shortfall is sooner paid in full) beginning with Available Special Tax Revenues in the first year the special tax is levied in the District (the “Gap Shortfall Period”); provided however, the Developer may elect to begin the 10 year period prior to the issuance of Bonds by giving a written request to the City; the levy shall thereafter be as defined in, permitted by and in accordance with Section E(1) o f the RMA . After the expiration of the Gap Shortfall Period, City may use Available Special Tax Revenues for any other purpose authorized for the District, as determined by the City in its sole discretion. The method described herein of funding Authorized Facilities from accumulated Available Special Tax Revenues is known as the “Pay-As-You-Go” method of funding.
(c) Personal to Developer . Regardless of who pays the cost for any Authorized Facilities, the reimbursement of the Gap Shortfall hereunder shall be personal to Developer, shall not run with the land, and shall not be assigned by Developer without the written consent of the City, which shall not be unreasonably withheld.
(d) Payment of Authorized Fees in Advance of Available Construction Proceeds. The Developer may be required pursuant to the conditions of approval or the fee ordinance to pay the Authorized Fees for an Improvement Area prior to the availability of the Available Construction Proceeds to pay such Authorized Fees. In the event such A uthorized Fees are paid prior to the availability of such Available Construction Proceeds, the amounts paid to the City shall be deemed to be deposits (each a “Deposit”) that are subject to refund by the City to Developer in the manner set forth in this Section 12. Any Deposits made to the City shall be deposited in a separate capital facilities account(s) and may be expended by the City in the ordinary course of business. The Developer acknowledges that the City may finance Authorized Fees with proceeds of tax-exempt bonds only if the City can meet certain requirements of federal tax law.
(e) Return of Deposits . If the Developer has made any Deposits, then following ITEM 12.1.
ATTACHMENT 3
-11-
deposit of Available Construction Proceeds with the City for the corresponding Authorized Fees, the City shall return to the Developer from the capital account in which the Deposits were deposited an amount equal to the Deposits paid by the Developer, without interest or other earnings thereon. The City shall be so obligated to return an amount equal to such Deposits to the Developer only to the extent that an amount equivalent to the amount of the Deposits made by the Developer or merchant builder is deposited with the City from the Available Construction Proceeds. An amount equal to such Deposits may be returned to the Developer from time to time as additional Available Construction Proceeds become available.
(f) Deposits Allocated First. Available Construction Proceeds used to pay Authorized Fees shall be allocated first for return of all D eposits prior to being allocated to the payment of Authorized Fees not previously deposited by the Developer. For example, if the Developer has paid $10,000 in Deposits, and Available Construction Proceeds become available in the amount of $15,000, the Ci ty shall apply the first $10,000 of the Available Construction Proceeds to the payment of the Authorized Fees that were paid by the Deposits (and, thereafter, return the Deposits to the Developer) and use the remaining $5,000 of the Available Construction Proceeds to the payment of Authorized Fees not previously paid by the Deposits and identified in the payment request.
(g) Application of Deposits . Any Deposits that have not been returned to the Developer at the time it is determined that there will be no further Available Construction Proceeds available (now or in the future) shall be retained by the City and may be used (to the extent it has not already been so used) for the purposes for which the Authorized Fee was required, and the unrefunded Deposits shall constitute full and final payment for such Authorized Fees, without any increase of any kind.
(h) Expectations. The Developer may pay Authorized Fees (as Deposits) prior to the availability of Available Construction Proceeds to pay such Authorized Fees. Any Authorized Fees paid (as Deposits) by the Developer for an Improvement Area shall be made with the understanding that such Deposits will be returned from the Available Construction Proceeds if, and when, such Available Construction Pr oceeds become available. The payment of Deposits prior to the availability of the Available Construction Proceeds shall not be construed as a dedication or gift of the Authorized Fees, or a waiver of the return of the Deposits, it being the intention that the Authorized Fees be paid by the Available Construction Proceeds to the extent of the Available Construction Proceeds.
Section 13. Construction of Joint Community Facilities. The parties acknowledge that the Developer requested the City to into a “JCF A” with the Cordova Recreation and Park District (“CRPD”) and Sacramento County Water Agency (“SCWA”) pursuant to Section 53316.2 of the Act, with respect to the payment of impact fees or improvements benefitting CRPD and SCWA respectively, authorized to be paid in whole or in part from the Special Taxes or proceeds of Bonds of the District. The City and Developer agree to comply with the JCFA requirements and to perform any and all covenants and agreements applicable to them under the JCFA.
Section 14. Construction of Other Facilities. Developer shall also proceed expeditiously with the design and construction of the other improvements and facilities, other than the Authorized Facilities, which are necessary to the development of the Specific Plan and the provision of municipal services within the District and to the residents therein. Such other public improvements and facilities shall be designed and constructed on a schedule which will not delay or interfere in any way with the design and construction of the Authorized Facilities. The provisions of this Section shall not supersede those of any other agreement between Developer ITEM 12.1.
ATTACHMENT 3
-12-
and the City.
Section 15. Indemnification; Insurance.
(a) Indemnity. Developer shall defend, indemnify and hold harmless the City, the District, and their officers, agents and employees from any and all liability, cost and expense in connection with the construction of the Authorized Facilities to be constructed by Developer for acquisition by the City, including, but not limit ed to, liability, costs, expense and claims arising under the procedures set forth in Section 6 of this Agreement. Developer shall also defend, indemnify and hold harmless the City, the District, and their officers, agents and employees from any and all liability, cost and expense in connection with the ownership of the Authorized Facilities to be constructed by Developer for acquisition by the City prior to the time the City accepts the Authorized Facilities, whether or not such Authorized Facilities are to be acquired with Bond proceeds. The indemnity obligations of Developer as set forth herein shall terminate upon the end of the warranty period provided for in section 11(c).
(b) General Liability Insurance . Developer shall procure and provide, until construction of all of the Authorized Facilities to be constructed by Developer is completed and acceptance thereof by the City has occurred, a broad form comprehensive general liability policy of insurance, in a form acceptable to the City, naming the Ci ty, the District and their officers, agents and employees as additional insureds, having a single aggregate liability limit as to all coverages provided thereby in the amount of $2,000,000. Before commencing the construction of any Authorized Facility, De veloper shall provide the City with a certification of insurance and endorsement as to such insurance, in a form acceptable to the City, and Developer shall upon each renewal of such insurance policy provide the City with a new certificate of insurance wit h respect thereto.
(c) Workers’ Compensation Insurance. Developer shall also furnish to the City, prior to commencing the construction of any Authorized Facility to be constructed by Developer for acquisition by the City, a certificate of insurance evidencing that Developer has procured and have in force a c urrent policy of workers’ compensation insurance in compliance with California law as to all workers to be employed by Developer in connection with the design and construction of the Authorized Facilities. Developer shall require each person, firm or corporation with whom it contracts in connection with the design and construction of the Authorized Facilities to provide and maintain such workers’ compensation insurance and a broad form comprehensive general liability insurance policy in the amount hereinabove specified and in a form acceptable to the City.
Developer shall provide to the City proof, in such form and at such intervals as set forth below, that each contractor with whom it contracts has procured and is maintaining such insurance.
(d) Reimbursement for Insurance Premiums . The premiums paid by Developer for the insurance required by this Section may be included in the Acquisition Price to be paid by the City for the Authorized Facilities to be constructed by Developer as an incidental cost.
Section 16. Advances of Authorized Fees. At any time Developer may request that City pay or prepay any Authorized Fees from Available Construction Proceeds, however acceptance of any Developer request to pay or prepay Authorized Fees shall be subject to the sole discretion of the City. To facilitate the tracking and administration of such fee advances, the City may require that such request be submitted in a specific format. The City does not expect to allow the use of Bond proceeds to prepay any other fees (other than Authorized Fees) unless such advance payment of fees serves a need of the City, as determined at the City’s sole discretion.
ITEM 12.1.
ATTACHMENT 3
-13-
In the event Authorized Fees are paid or Authorized Facilities are funded from Available Construction Proceeds, Developer shall be entitled to fee credits, pursuant to City policies on fee credits, for Authorized Facilities that are acquired or constructed by the City and that are also included in the City’s fee programs.
If an Authorized Facility or component thereof has been acquired from the Developer using Available Construction Proceeds, any reimbursement to the City for such item which comes from other revenue sources and which is otherwise payable to the Developer will be paid to the District and will be used first to pay for other Authorized Facilities and, thereafter, to reduce outstanding Bonds. Other revenue sources include fee revenues paid by other development projects not owned by the Developer or direct reimbursements from other development projects. If only a portion of the Acquisition Price for an Au thorized Facility is paid to Developer using Available Construction Proceeds, then any reimbursement for such Authorized Facility which comes from other revenue sources shall be paid first to Developer until the balance of the Acquisition Price is paid to Developer, and thereafter any additional reimbursement from other revenue sources shall be paid to the City as provided above.
City acquisition or construction of an Authorized Facility shall not prevent Developer from receiving refunds of fees paid by development within the District that would have been off-set by fee credits, but for the timing of completion of the Authorized Facility. In particular, the City’s fee credits policy requires 20% of the anticipated fee credits to be reserved until the imp rovement generating such fee credits is accepted and a final accounting is completed. If the 80% amount allowed to be taken as fee credits is exhausted prior to completion of an Authorized Facility, City policy provides that some or all of the 20% amount reserved for fee credits will be paid by the City as a fee reimbursement, instead of being taken as fee credits, to the extent development within the District continues and fees for such improvement are paid prior to such completion. Payment of the Acquisition Price for such Authorized Facility shall not prevent City from providing any such fee refunds pursuant to City policy.
Section 17. Binding on Community Facilities District. The District is deemed to be a party to this Agreement to the extent permitted by California law, and all provisions hereof which apply to the City shall so apply to the District. The City Council of the City, acting for the District, shall perform all parts of this Agreement which require performance on the part of the District.
Section 18. Assignment. Developer may not assign this Agreement or any right or duty hereunder without the express written approval of the City. The City may condition any such approval on proof of the financial responsibility and experience of a pro posed assignee to undertake and perform the duties and responsibilities of Developer under this Agreement. The City’s approval of an assignment of this Agreement and the rights and duties of Developer hereunder shall not be unreasonably withheld or delayed.
Section 19. Prompt Action. All consents, approvals and determinations required of either the City or Developer pursuant to this Agreement shall be promptly given or made, and shall not be unreasonably withheld.
Section 20. General. This Agreement co ntains the entire agreement between the parties with respect to the matters herein provided for, and may be amended by a subsequent written agreement signed on behalf of both parties. This Agreement is for the exclusive benefit of the parties and shall not be construed to confer any rights or benefits upon any persons other than the City and Developer. This Agreement shall, however, inure to the benefit of and be ITEM 12.1.
ATTACHMENT 3
-14-
binding upon the successors and assigns of the parties. This Agreement shall be construed and governed by the Constitution and laws of the State of California. Should either party to this Agreement commence a court action or proceeding against the other party with respect to this Agreement or the design and acquisition or construction of the Aut horized Facilities, the party prevailing in such action or proceeding shall be entitled to receive from the losing party its attorney’s fees, expert witness’ fees, court costs, and other costs incurred by it in prosecuting or defending such action or proceeding. The captions of the sections of this Agreement are provided for convenience only, and shall not have any bearing on the interpretation of any section hereof.
This Agreement may be executed in several counterparts, each of which shall be an original of the same Agreement.
[Signatures on following page.]
ITEM 12.1.
ATTACHMENT 3
[Signature page to Funding, Construction and Acquisition Agreement dated as of September 1, 2023]
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the date first above written.
CITY OF RANCHO CORDOVA,
a municipal corporation
By: _______________________________
Kim Juran
Administrative Services Director
WOODSIDE 05N, LLP,
a California limited liability partnership
By: _______________________________
Name: ____________________________
Title: _____________________________
ITEM 12.1.
ATTACHMENT 3
A-1
EXHIBIT A
List of Authorized Facilities and Authorized Fees
The City of Rancho Cordova Arista Del Sol Community Facilities District No. 2022-1 (the “CFD”), Improvement Area No. 1 of the CFD, and each Improvement Area designated in the future in conjunction with subsequent annexations of all or any part of the Future Annexation Area or any other property is authorized to finance all or a portion of the costs of acquisition, construction, and improvement of facilities generally described as follows:
Facilities
The Facilities which are proposed to be financed with the proceeds of the sales of bonds of the proposed CFD, or the payment of the fees to the appropriate jurisdiction with respect to such facilities proposed to be financed with the proceeds of the sale of bonds of the proposed CFD, are generally described as follows:
- Park Improvements
- Chrysanthy Blvd Improvements
- Americanos Blvd Improvements
- In-tract Improvements for development within the CFD
Impact, Development Agreement and Specific Plan Fees for Facilities
- Transportation Impact Fee
- Sunrise Douglas Community Plan Roadway Impact Fee
- City Supplemental Transportation Fee
- Park Renovation Fee
- Sunrise Douglas Park Fee
- Sacramento County Water Agency Zone 40 Water Fee
Other
- Any other facilities serving substantially the same purpose as the above described facilities.
- Any other facilities permitted under the Mello -Roos Community Facilities Act of 1982, including the facilities described in Section 53313.5 of the California Government Code, as amended from time to time, p rovided that such facilities satisfy at least one of the following criteria: 1) augment, improve or expand existing District facilities that are primarily for the benefit of the District, or 2) repair or rehabilitate existing District facilities.
The foregoing description of the type of Facilities eligible to be financed is general in nature and includes any appurtenant work and incidental expenses related to the Facilities. The final nature and location of the facilities will be determined upon the prepa ration of final plans and specifications for such facilities.
ITEM 12.1.
ATTACHMENT 3
B-1
EXHIBIT B
Payment Request Form
City of Rancho Cordova
Arista Del Sol Community Facilities District No. 2022-1
Request for Payment
The undersigned (the “Developer ”) hereby requests payment pursuant to the Funding, Construction and Acquisition Agreement dated _________, 2022 (the “ Agreement”), between the City of Rancho Cordova and WOODSIDE 05N, LLP (“Developer”), in the total amount of $____________. (Capitalized terms used herein unless otherwise defined herein shall have the meanings ascribed thereto in the Agreement.) The payment requested is for the portion of the Authorized Facility that has been completed by Developer (the “ Completed Work”) and is the subject of this request for payment, as more fully described in Schedule 1 attached hereto.
In connection with this request for payment, the undersigned hereby represents and warrants to City as follows:
1. The person executing this request on behalf of the Developer is duly authorized to do so and is knowledgeable as to the matters set forth herein.
2. The Completed Work described in Schedule 1 hereto has been constructed in accordance with the approved plans therefor.
3. The true and correct actual cost of the Completed Work for which payment is requested is set forth in Schedule 1.
4. Attached hereto are invoices, receipts, worksheets and other evidence of actual cost that are in sufficient detail to allow City Inspectors and City consultants to verify the actual cost of the Completed Work for which payment is requested. The amount requested hereby [excludes a retention of 5% of the amounts invoiced] [includes an amount previously retained from payment] pursuant to the terms of a construction contract.
5. There has not been filed with or served upon the Developer notice of any lien, right to lien or attachment upon, or claim affecting the right to receive the payment requested herein that has not been released or will not be released simultaneously with the payment of such obligation, other than materialman’s or mechanics’ liens accruing by operation of law. Copies of lien releases for all Completed Work for which payment is requested hereunder are attached hereto.
6. The Develop er is in compliance with the terms and provisions of the Agreement.
Payment of the amount requested hereby should be made payable to:
and sent to:
at the following address:
ITEM 12.1.
ATTACHMENT 3
B-2
I(we) hereby declare under penalty of perjury that the above representations and warranties are true and correct.
Developer:
WOODSIDE 05N, LLP,
a California limited liability partnership
By: _______________________________
Name: ____________________________
Title: ______________________________
_________________________________________________________________________
(ATTACHMENT)
SCHEDULE 1
Description of Completed Work and Cost
ITEM 12.1.
ATTACHMENT 3
Jo
nes Hall Draft of 8.9.23
PRELI
MINARY OFFICIAL STATEMENT DATED ___________, 2023
NEW ISSUE-FULL – BOOK ENTRY NOT RATED
In the opinion of Jones Hall, A Professional Law Corporation, San Francisco, California, Bond Counsel, subject, however to ce rtain qualifications described herein, under existing law, the interest on the Bonds is excluded from gross income for federal inco me tax purposes and such interest is not an item of tax preference for purposes of the federal alternative minimum tax. Interest on the Bonds may be subject to the corporate alternative minimum tax. In the further opinion of Bond Counsel, such interest i s exempt from California personal income taxes. See “TAX MATTERS” herein.
$___________*
CITY OF RANCHO CORDOVA
ARISTA DEL SOL COMMUNITY FACILITIES DISTRICT NO. 2022-1 IMPROVEMENT AREA NO. 1
SPECIAL TAX BONDS
SERIES 2023
Dated: Date of Delivery Due: September 1, as shown on inside cover Authority for Issuance. The above-captioned bonds (the “Bonds”), are being issued by the City of Rancho Cordova (the “City”) by and through Improvement Area No. 1 (the “Improvement Area No. 1”) of the City of Rancho Cordova Arista Del Sol Community Facilities District No. 2022-1 (the “District”). The Bonds are special tax obligations of the City, authorized pursuant to the Mello -Roos Community Facilities Act of 1982, as amended, being California Government Code Section 53311, et seq. (the “Mello-Roos Act”), and are issued pursuant to a Fiscal Agent Agreement, dated as of September 1, 2023 (the “Fiscal Agent Agreement”) by and between the City and U.S. Bank Trust Company, National Association , as fiscal agent (the “Fiscal Agent”). See “THE BONDS – Authority for Issuance.” Security and Sources of Payment. The Bonds are secured by and payable from a pledge of Special Tax Revenues (as defined herein) consisting of Special Taxes levied on proper ty within Improvement Area No. 1 according to a rate and method of apportionment of special tax described herein , including from the proceeds of any foreclosure actions brought following a delinquency in the payment of the Special Taxes (as defined herein) , and from amounts held in certain funds under the Fiscal Agent Agreement, all as more fully described herein. The taxable r eal property within Improvement Area No. 1 consists of parcels under development into single family residential homes. Unpaid Special Taxes do not constitute a personal indebtedness of the owners of the parcels within Improvement Area No. 1. 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 such Special Tax even though financially able to do so. To provide funds for payment of the Bonds and the interest thereon as a result of any delinquent installments, the City will establish a Reserve Fund from Bond proceeds, as described herein. See “SECURITY FOR THE BONDS.”
Property in Improvement Area No. 1 subject to the Special Tax is comprised of land in the City of Rancho Cordova, Sacramento County, California, currently being developed as 366 single-family homes in four neighborhoods, with model homes open and home construction and marketing underway. It is part of a larger development being undertaken by Woodside 05N, LP , a California limited liability partnership (“Woodside”). Land in Improvement Area No. 1 and a Future Annexation Area design ated for the District is anticipated to consist of a total of 740 single-family homes at build-out. See “IMPROVEMENT AREA NO. 1” and “OWNERSHIP OF PROPERTY WITHIN IMPROVEMENT AREA NO. 1.” Use of Proceeds. The Bonds are being issued to (i) construct and acquire certain public facilities, including payment of fees related to public facilities, authorized for the District and Improvement Area No. 1 ; (ii) provide for a deposit into the debt service reserve fund for the Bonds; (iii) pay capitalized interest on a portion of the Bonds through and including September 1, 202 4; and (iv) pay the costs of issuance of the Bonds. See “FINANCING PLAN.”
Bond Terms. Interest on the Bonds is payable semiannually on March 1 and September 1 of each year , commencing March 1, 202 4. The Bonds will be issued in the denomination of $5,000 or integral multiples of $5,000 in excess thereof. The Bonds, when delivered, will be initially registered in the name of Cede & Co., as nominee of The Depository Trust Company ( “DTC”). DTC will act as securi ties depository for the Bonds.
See “THE BONDS – Description of the Bonds” and “APPENDIX G – DTC and the Book-Entry Only System.” Redemption. The Bonds are subject to optional redemption, mandatory sinking fund redemption, and special mandatory redemption from prepaid Special Taxes. See “THE BONDS – Redemption.”
THE BONDS ARE SPECIAL LIMITED OBLIGATIONS OF THE CITY, PAYABLE SOLELY FROM THE SPECIAL TAX REVENUES AND CERTAIN OTHER FUNDS AND AMOUNTS HELD BY THE FISCAL AGENT UNDER THE FISCAL AGENT AGREEMENT. THE INFORMATION SET FORTH IN THIS OFFICIAL STATEMENT, INCLUDING INFORMATION UNDER THE HEADING “BOND OWNERS ’ RISKS,” SHOULD BE READ IN ITS ENTIRETY.
MATURITY SCHEDULE
(see inside cover)
This cover page contains certain information for quick reference only. It is not a summary of essential information about th e Bonds. Potential investors should read this entire Official Statement to obtain information essential for making an informed investment decisi on. Investment in the Bonds involves risks that may not be appropriate for some investors. See “BOND OWNERS ’ RISKS” for a discussion of special risk factors that should be considered in evaluating the investment quality of the Bonds.
The Bonds are offered when, as and if issued by the City and accepted by the Underwriter, subject to approval as to their legality by Jones Hall, A Professional Law Corporation, San Francisco, California, Bond Counsel, and subject to certain other conditions. Jones Hall also serves as disclosure counsel to the City. Certain matters will be passed upon for the City by Meyers Nave, A Professional Law Corporation, Sacramento, California, as City Attorney. Certain legal matters will be passed upon for the Underwriter by its counsel, Kutak Rock LLP, Irvine, Ca lifornia . It is anticipated that the Bonds, in book-entry form, will be available for delivery through the facilities of DTC on or about ________, 2023. [PIPER LOGO]
The
date of this Official Statement is: _________, 2023.
__________
* 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 shall this Preliminary Official Statement constitu te an offer to sell or a solicitation of an offer to buy nor shall there be any sale of these securities in any jurisdiction in which such offer solicitation or sale would be unlawful prior to registration or qualification under t he securities laws of such jurisdiction.
ITEM 12.1.
ATTACHMENT 4
MATURITY SCHEDULE
$__________ Serial Bonds
(Base CUSIP†: _______)
Maturity Principal Interest CUSIP†
(September 1) Amount Rate Yield Price ( )
$________ _____% Term Bond due September 1, ____, Yield: _____%, Price: _____%; CUSIP† _____
† CUSIP Global Services (CGS) is managed on behalf of American Bankers Association by FactSet Research Systems Inc. CopyrightÓ 2023 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 Ò numbers are provided for convenience of reference only. None of the City, the Fiscal Agent or the Underwr iter take any responsibility for the accuracy of the CUSIP data.
ITEM 12.1.
ATTACHMENT 4
CITY OF RANCHO CORDOVA
City Council
Linda Budge, Mayor
David M. Sander, Ph.D., Vice Mayor
Garrett Gatewood, Councilmember
Siri Pulipati, Councilmember
Donald Terry, Councilmember
Staff
Micah Runner, City Manager
Kim Juran-Karageorgiou, Administrative Services Director Stacy Leitner, City Clerk
Adam Lindgren of Meyers Nave, A Professional Law Corporation, City Attorney
SPECIAL SERVICES
Bond Counsel and Disclosure Counsel
Jones Hall, A Professional Law Corporation
San Francisco, California
Municipal Advisor
NHA Advisors, LLC
San Rafael, California
Special Tax Consultant
Goodwin Consulting Group, Inc.
Sacramento, California
Appraiser
Integra Realty Resources
Sacramento, California
Fiscal Agent
U.S. Bank Trust Company, National Association
Seattle, Washington
ITEM 12.1.
ATTACHMENT 4
TABLE OF CONTENTS
Page Page
INTRODUCTION ............................................ 1 FINANCING PLAN ......................................... 5 THE BONDS .................................................. 6 Authority for Issuance ................................. 6 Description of the Bonds ............................ 6 Redemption ................................................ 7 Transfer or Exchange of Bonds ................ 10
SECURITY FOR THE BONDS ..................... 11
Special Taxes ........................................... 11 Rate and MethodError! Bookmark not defined.
Special Tax Fund ...................................... 15 Deposit and Use of Proceeds of Bonds .... 16
Delinquent Payments of Special Tax;
Covenant for Foreclosure ..................... 16
Reserve Fund ........................................... 18 Improvement Fund ................................... 19 Additional Bonds ....................................... 20
DEBT SERVICE SCHEDULE AND
COVERAGE ............................................. 21 IMPROVEMENT AREA NO. 1 ..................... 23
Formation and Background ...................... 23
Description and Location .......................... 23
Development in the District ....................... 27
Environmental Matters .............................. 29 THE FACILITIES .......................................... 30 Eligible Facilities ....................................... 30 Acquisition by the City and other Local
Agencies ............................................... 30
OWNERSHIP OF PROPERTY WITHIN
IMPROVEMENT AREA NO. 1 .................. 31
VALUE OF PROPERTY WITHIN
IMPROVEMENT AREA NO. 1 .................. 32
Appraised Values and Building PermitsError! Bookmark not defined.
Appraised Values ..................................... 32 Value to Special Tax Burden Ratios ......... 35
Priority of Lien ........................................... 39 Estimated Tax Burden on Single-Family
Home .................................................... 42 Special Tax Collections and
Delinquencies ........................................... 43 BOND OWNERS’ RISKS ............................. 43
Limited Obligation of the City to Pay Debt
Service .................................................. 43 Concentration of Ownership of
Undeveloped Property .......................... 43
Levy and Collection of the Special Tax ..... 44
Property Tax Delinquencies ...................... 45
Property Values and Risks Related to
Development ........................................ 46 Future Property Development ................... 48
Other Possible Claims Upon the Value of
Taxable Property .................................. 49
Exempt Properties .................................... 49 FDIC/Federal Government Interests in
Properties ............................................. 50 Depletion of Reserve Fund ....................... 51
Bankruptcy Delays .................................... 52 Disclosure to Future Purchasers .............. 54
No Acceleration Provisions ....................... 54
Loss of Tax Exemption ............................. 54
IRS Audit of Tax-Exempt Bond Issues ..... 54
Voter Initiatives ......................................... 55 Case Law Related to the Mello-Roos Act
Voting .................................................... 55 Secondary Market for Bonds .................... 57
Pandemic DiseasesError! Bookmark not defined.
Cyber Security .......................................... 57 Potential Early Redemption of Bonds from
Prepayments ......................................... 58 LEGAL MATTERS ........................................ 58 Legal Opinion ............................................ 58 No Litigation .............................................. 58 TAX MATTERS ............................................. 59 CONTINUING DISCLOSURE ....................... 60
The City .................................................... 60 Woodside .... Error! Bookmark not defined.
NO RATING .................................................. 61 UNDERWRITING ......................................... 61 PROFESSIONAL FEES ............................... 62
EXECUTION ................................................. 62
APPENDIX A Rate and Method of Apportionment of Special Tax APPENDIX B The Appraisal
APPENDIX C Summary of Certain Provisions of the Fiscal Agent Agreement APPENDIX D Sacramento County and City of Rancho Cordova Demographic Information APPENDIX E Form of Opinion of Bond Counsel
APPENDIX F Form of Continuing Disclosure Undertakings
APPENDIX G DTC and the Book-Entry Only System
ITEM 12.1.
ATTACHMENT 4
-1-
__________________________________
OFFICIAL STATEMENT
__________________________________
$__________*
CITY OF RANCHO CORDOVA
ARISTA DEL SOL COMMUNITY FACILITIES DISTRICT NO. 2022-1 IMPROVEMENT AREA NO. 1
SPECIAL TAX BONDS
SERIES 2023
This Official Statement, including the cover page and all appendices hereto, is provided to furnish certain information in connection with the issuance by the City of Rancho Cordova (the “City”) of the above-captioned bonds (the “Bonds”), for and on behalf of its Improvement Area No. 1 (“ Improvement Area No. 1 ”) of the City of Rancho Cordova Arista Del Sol Community Facilities District No. 2022-1 (the “District”).
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 a nd 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 shall have the meaning set forth in the Fiscal Agent Agreement. See APPENDIX C.
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 ap pendices, 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 Bonds to potential investors is made only by means of the entire Official Statement.
The District, Improvement Area No. 1 and Future Annexation Area. The District was established, Improvement Area No. 1 was designated as an improvement area within the District, and a future annexation area was created for the District (the “Future Annexation Area”), pursuant to proceedings conducted by the City under the Mello- Roos Community Facilities Act of 1982, as amended (Sections 53311, et seq., of the Government Code of the State of California) (the “Mello-Roos Act”). The Bonds represent the first and are expected to be the only series of special tax bonds, other than possible refunding bonds, issued for Improvement Area No. 1.
The Bonds. The Bonds are issued pursuant to the p rovisions of the Mello-Roos Act, a Fiscal Agent Agreement, dated as of September 1, 2023 (the “Fiscal Agent Agreement ”) between the City and U.S. Bank Trust Company, National Association , as fiscal agent (the “Fiscal Agent”), and a resolution adopted on August 21, 2023 by the City Council of the City, which authorized the issuance of the Bonds (the “Resolution”).
* Preliminary, subject to change.
ITEM 12.1.
ATTACHMENT 4
-2-
Registration of Ownership of the Bonds. The Bonds are issued only as fully registered bonds in book-entry form, registered in the name of Cede & Co., as nominee of The Depository Trust Company ( “DTC”), without coupons, in the denomination of $5,000 or any integral multiple thereof and shall be dated as o f and bear interest from the date of delivery thereof at the rate or rates set forth on the cover page hereof. Interest on the Bonds is payable on March 1 and September 1 of each year (each an “Interest Payment Date ”), commencing March 1, 2024. 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 shall mean Cede & Co., and shall not mea n the ultimate purchasers of the Bonds. Payments of the principal, premium, if any, and interest on the 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 Bonds. Disbursements of suc h 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 G – DTC and the Book-Entry Only System.”
Use of Proceeds. Proceeds of the Bonds will primarily be used to finance a portion of the costs of acquiring and constructing , and/or paying impact fees for, certain public infrastructure improvements necessary for development in the District (the “Facilities,” as described herein). The Facilities consist generally of roadway and transportation improvements, park improvements, in-tract improvements and other miscellaneous infrastructure improvements necessary for development of property within the District, as well as certain development impact fees imposed by the City and other local agencies . Proceeds of the Bonds will also be used t o make a deposit in the Reserve Fund (defined herein), provide capitalized interest on a portion of the Bonds through and including September 1, 2024, and pay the cost of issuance of the Bonds.
Security and S ources of Payment of the Bonds. The Bonds are secured by, and payable from , “Special Tax Revenues ,” which are defined as the proceeds of the Special Taxes annually received by the City, less an amount equal to the Administrative Expense Priority, including all scheduled payments and delinquent payment s 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 . “Special Taxes” means the special tax levied on taxable real property within the boundaries of Improvement Area No. 1 under the Rate and Method of Apportionment of Special Tax for Improvement Area No. 1 (the “Rate and Method”), and “Administrative Expense Priority” means (i) for Fiscal Year 2023-24, $30,000, and (ii) for each subsequent year, an amount equal to the preceding fiscal year ’s Administrative Expense Priority plus an additional 2% of such amount.
The Bonds are also payable from amounts held in certain funds and accounts pursuant to the Fiscal Agent Agreement, including the Reserve Fund, all as more fully described herein.
The Special Tax applicable to each taxable parcel in Improvement Area No. 1 will be levied and collected annually according to the tax liability determined by the application of the Rate and Method, which is set forth in APPENDIX A hereto. The Special Taxes represent fixed liens on the parcels of land subject to a Special Tax in Improvement Area No. 1 and failure to pay the Special Taxes could result in proceedings to foreclose tit le to the delinquent prop erty. The Special Taxes do not constitute the personal indebtedness of the owners of taxed parcels and no proceedings to collect directly from an owner is permitted. See “SECURITY FOR THE BONDS – Rate and Method ” and “APPENDIX A – Rate and Method of Apportionment of Special Tax.”
ITEM 12.1.
ATTACHMENT 4
-3-
Pursuant to the Mello-Roos Act, the Resolution of Formation (as defined herein), and the Fiscal Agent Agreement, so long as any Bonds are outstanding, the City will annually levy the Special Tax against all taxable land within Improvement Area No. 1 in accordance with the proceedings for the authorization and issuance of the Bonds and to make provision for the collection of the Special Tax in amounts which will be sufficient to pay interest on, principal of and redemption premium (if any) on the Bonds as such becomes due and payable and to replenish the Reserve Fund (as defined herein) as necessary. See “SECURITY FOR THE BONDS – Special Taxes” herein.
On May 16, 2022, the City Council, as legislative body of the CFD and Improvement Area No. 1, established the bonded indebtedness limit for the District in the principal amount of not to exceed $ 50,000,000 (excluding refunding bonds described in Section 53364.2(e) o f the Mello-Roos Act) (the “ Authorization”), initially allocated as follows: (i) for Improvement Area No. 1, $25,000,000 and (ii) for land within the Future Annexation Area, $25,000,000. The Bonds are the first series of bonds being issued by the City for Improvement Area No. 1, no additional bonds are currently expected, except that additional bonds secured on parity with the Bonds may be issued for refunding purposes. Land within the Future Annex ation Area is expected to annex into the District as one or more separate improvement areas, and is not expected to provide security for the Bonds.
In connection with the issuance of the Bonds, the City will direct the Fiscal Agent to establish a “Reserve Fund ,” which will be funded in an amount equal to the Reserve Requirement (described herein) with respect to the Bonds. Amounts in the Reserve Fund are available for payment of the Bonds in the event of delinquencies in the payment of the Special Taxes to the extent of such delinquencies. See “SECURITY FOR THE BONDS – Reserve Fund.” If there are additional delinquencies after depletion of funds in the Reserve Fund, the City is not obligated to pay the Bonds, or supplement the Reserve Fund.
Property Subject to the Special Tax. Improvement Area No. 1 consists of 366 residential lots subject to the Special Tax . The lots are under development by Woodside Home Company (described herein) into four single family residential detached residential neighborhoods currently being marketed as “Valley Oaks at Cypress,” “Palo Verde at Cypress,” “Sycamore at Cypress,” and “Acacia II at Cypress.” As of the July 31, 2023 date of the appraisal described herein, development of the project comprised 7 homes owned by individual homeowners, 68 homes under construction, 277 partially improved lots, and 14 completed homes currently serving as models. Marketing in all neighbor hoods is ongoing, with 26 homes under contract to homeowners.
Improvement Area No. 1 is the first phase of a larger development being undertaken by the current owner of all the parcels within Improvement Area No. 1, Woodside 05N, LP, a California limited liability partnership ( “Woodside”). Land in Improvement Area No. 1 and the Future Annexation Area comprises Woodside’s “Arista Del Sol” development project anticipated to consist of a total of 740 single-family homes, as well as anticipated public and commercial uses at build-out. The Bonds are secured only by the parcels in Improvement Area No. 1.
Value of Property. Property in Improvement Area No. 1 is security for the Special Tax.
The City ordered preparation of an appraisal report (the “Appraisal”), of the estimated value of the taxable land within Improvement Area No. 1 as of a July 31, 2023 date of value, prepared by Integra Realty Resources, Sacramento, California (the “Appraiser”). The Appraiser indicated a value estimate of $77,114,000 as of the date of value, subject to the conditions and qualifications set forth therein. The Appraisal is set forth in its entirety as APPENDIX B hereto.
ITEM 12.1.
ATTACHMENT 4
-4-
The description herein of the Appraisal is intended for limited purposes only; the Appraisal should be read in its entirety. In considering the estimates of value evidenced by the Appraisal, it should be noted that the Appraisal is based upon a number of sta ndard and special assumptions that affected the estimates as to value, in addition to the assumption of completion of the Facilities expected to be funded with the proceeds of the Bonds. See “VALUE OF PROPERTY WITHIN IMPROVEMENT AREA NO. 1.”
The principal amount of the direct and overlapping debt in Improvement Area No. 1 is $15,837,441*, which consists of the estimated amount of Bonds ($15,500,000*) and $337,441 of overlapping general obligation and CFD bond debt. Consequently, the estimated value of property in Improvement Area No. 1 subject to the Special Tax lien ($77,114,000), is approximately 4.9* times the principal amount of the direct and overlapping debt in Improvement Area No. 1 . This is an average , and individual parcels may have value -to-lien ratios that are different. See “VALUE OF PROPERTY WITHIN IMPROVEMENT AREA NO. 1 – Value to Special Tax Burden Ratios.”
Land may annex into Improvement Area No. 1 or , more likely, a separate improvement area established for the District, from the Future Annexation Area upon the unanimous approval of the owner(s) thereof, without any further proceedings of the City Council . Currently, no annexations into Improvement Area No. 1 are contemplated and per the Fisc al Agent Agreement, bonds can only be issued for refunding purposes.
Risks of Investment. Investment in the Bonds involves risks that may not be appropriate for some investors. See “BOND OWNERS’ RISKS” 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 City. The general fund of the City is not liable and the full faith and credit of the City 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 pledge of or charge, lien or encumbrance upon any property of the City or any of its income or receipts, except the Special Tax Revenues and amounts in certain funds established under the Fiscal Agent Agreement as described herein . The Bonds are special limited obligations of the City, and neither the City Council, the City nor any officer or employee thereof shall be liable for the payment of the interest on or principal of or redemption premiums, if any, on the Bonds other than from the Special Tax Revenues and amounts in certain funds established under the Fiscal Agent Agreement as described herein.
* Preliminary, subject to change.
ITEM 12.1.
ATTACHMENT 4
-5-
Summary of Inf ormation. Brief descriptions of certain provisions of the Fiscal Agent Agreement 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 City. 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. See “APPENDIX C – Summary of Certain Provisions of 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 City or Improvement Area No. 1 since the date hereof.
FINANCING PLAN
The Bonds are being issued to (i) construct and acquire certain public facilities , which may include payment of f ees related to public facilities , authorized for the District ; (ii) deposit into the Reserve Fund an amount equal to the Reserve Requirement with the Bonds; (iii) fund capitalized interest on a portion of the Bonds through and including September 1, 2024; and (iv) pay the costs of issuance of the Bonds.
A summary of the estimated sources and uses of funds associated with the sale of the Bonds follows:
Estimated Sources of Funds:
Principal Amount of the Bonds $
Plus/less: [Net] Original Issue Premium/Discount
Total $
Estimated Uses of Funds:
Deposit to Improvement Fund $
Deposit to Reserve Fund(1)
Deposit to Capitalized Interest Account of Bond Fund(2) Costs of Issuance(3)
Total $
(1) Equal to the Reserve Requirement for the Bonds.
(2) Used to pay capitalized interest on a portion of the Bonds through and including September 1, 2024.
(3) Used to pay costs of issuance of the Bonds, including initial fees, expenses and charges of the Fiscal Agent, costs of printing the preliminary and final Official Statements, administrative fees of the City, Underwriter’s discount, Municipal Advisor, fees of Bond Counsel and Disclosure Counsel, and other costs of issuance.
ITEM 12.1.
ATTACHMENT 4
-6-
THE BONDS
Authority for Issuance
The Bonds are issued pursuant to the Fiscal Agent Agreement, the Resolution adopted by the City Council on April 21, 2023, and the Mello-Roos Act.
On May 16, 2022 , the City Council, as legislative body of the CFD and Improvement Area No. 1, established the bonded indebtedness limit for the CFD in the principal amount of not to exceed $50,000,000 (excluding refunding bonds described in Section 53364.2(e) of the Act) (the “Authorization”), initially allocated as follows: (i) for Improvement Area No. 1, $2 5,000,000 and (ii) for land within the Future Annexation Area, $ 25,000,000. Under the provisions of the Mello-Roos Act, since there were fewer than 12 registered voters residing within Improvement Area No. 1 at any point during the 90-day period preceding the adoption of the City ’s resolution forming the District on May 16, 2022 (the “Resolution of Formation”), the sole qualified elector was the developer/landowner who was entitled to cast one vote for each acre or portion of an acre of land owned within Improvement Area No. 1 . The landowner voted to incur the indebtedness and to approve the annual levy of Special Taxes to be collected within Improvement Area No. 1 , for the purpose of paying for the Facilities, including repaying a ny indebtedness of Improvement Area No. 1, replenishing reserve funds and paying administrative expenses.
The Bonds are the first series of bonds being issued by the City for Improvement Area No. 1 and the District; after issuance of the Bonds, additional bonds secured on parity with the Bonds may only be issued for refunding purposes.
Description of the Bonds
The Bonds are being issued as fully registered bonds, registered in the name of Cede & Co. as nominee of The Depository Trust Company ( “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. Ultimate purchasers of Bonds will not receive phys ical 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 shall mean Cede & Co., and shall not mean the ultimate purchasers of the Bonds. Payments of the principal, premium, if any, and interest on the Bonds will be made directly to DTC, or its nominee, Cede & Co., by U.S. Bank Trust Company, National Association, as the fiscal agent, registrar and transfer agent (the “Fiscal Agent”) for the Bonds, 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 G – DTC and the Book-Entry Only System.”
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 principal of the Bonds and premiums due upon the redemption thereof, if any, will be paya ble in lawful money of the United States of America at the principal corporate trust office of the Fiscal Agent in Seattle, Washington , or such other place as designated by the Fiscal Agent, upon presentation and surrender of the Bonds.
ITEM 12.1.
ATTACHMENT 4
-7-
Interest on the Bonds, computed on the basis of a 360-day year consisting of twelve 30- day months, will be paid in lawful money of the United States of America semiannually on March 1 and September 1 of each year (each an “Interest Payment Date ”), commencing March 1, 202 4. 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 calendar month preceding the Interest Payment Date (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 shall be made by wire transfer, or such other method acceptable by the Fiscal Agent, to DTC. See “APPENDIX G – DTC and the Book-Entry Only System.”
Each Bond shall 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 shall 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 shall 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 shall bear interest from the dated date; provided, however, that if at the time of authentication of a Bond, interest is in default thereon, such Bond shall 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 dir ectly 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, a s more fully described herein.
See “APPENDIX G - DTC and the Book-Entry Only System.”
Redemption
Optional Redemption. 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 City and by lot within a maturity, on any date on and after September 1, 20__ 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
September 1, 20___ through August 31, 20__ 103%
September 1, 20__ through August 31, 20__ 102
September 1, 20__ through August 31, 20__ 101
September 1, 20__ and any date thereafter 100
ITEM 12.1.
ATTACHMENT 4
-8-
Mandatory Redemption from Prepayments. The Bonds are subject to mandatory redemption from prepayments of the Special Tax by property owners, in whole or in part among maturities as shall be specified by the City 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 through and including March 1, 20__ 103% September 1, 20__ and March 1, 20__ 102
September 1, 20__ and March 1, 20__ 101
September 1, 20__ and any Interest Payment Date thereafter 100
See “BOND OWNERS’ RISKS – Potential Early Redemption of Bonds from Prepayments” for a discussion of the potential for the Bonds to be priced with original issue premium and then be redeemed from Special Tax prepayments prior to maturity.
Mandatory Sinking Fund Redemption. The Bonds maturing September 1, 20__ and September 1, 20__ (the “Term Bonds”) are subject to mandatory sinking payment redemption in part on September 1, 20__ and September 1, 20__, and on each September 1 thereafter to maturity, by lot, at a redemption price equal to one hundred percent (100%) of the principal amount thereof to be redeemed, without premium, in the aggregate respective principal amounts as set forth in the following tables:
September 1, 20__ Term Bonds
Mandatory
Redemption Date
(September 1)
Sinking Fund
Payment
September 1, 20__ Term Bonds
Mandatory
Redemption Date
(September 1)
Sinking Fund
Payment
The amounts in the foregoing table shall be reduced pro rata, in order to maintain substantially uniform debt service, as a result of any prior partial optional redemption or mandatory redemption of the Bonds.
In lieu of redemption, moneys in the Bond Fun d 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 an d 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.
ITEM 12.1.
ATTACHMENT 4
-9-
Redemption Procedure by Fiscal Agent. The Fiscal Agent shall cause notice of any redemption to be mailed by first class mail, postage prepaid, at least 20 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 r espective 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 shall not be a condition precedent to such redemption and failure to mail or to receive any such notice, or any defect therein, shall not affect the validity of the proceedings for the redemption of such Bonds.
Such notice shall state the redemption date and the redemption price and, if less than all of the then Outsta nding Bonds are to be called for redemption, shall designate the CUSIP numbers and bond numbers of the Bonds to be redeemed by giving the individual CUSIP number and number of each Bond to be redeemed or shall state that all Bonds between two stated numbers, both inclusive, are to be redeemed or that all of the Bonds of one or more maturities have been called for redemption, shall state as to any Bond called in part the principal amount thereof to be redeemed, and shall require that such 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 Bonds will not accrue from and after the redemption date.
The City has the right to rescind any notice of the optional redemption of Bonds. 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 pa yment in full of the Bonds then called for redemption, and such cancellation shall not constitute an event of default.
Upon the payment of the redemption price of 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, the Bonds being redeemed with the proceeds of such check or other transfer.
Whenever provision is made in the Fiscal Agent Agreement for the redemption of less than all of the Bonds of any maturity, the Fiscal Agent shall select the Bonds to be redeemed, from all Bonds or such given portion thereof of such maturity by lot in any manner which the Fiscal Agent in its sole discretion shall deem appropriate. Upon surrender of Bonds redeemed in part only, the City shall execute and the Fiscal Agent shall authenticate and deliver to the registered Owner, at the expense of the City, a new Bond or Bonds, of the same series and maturity, of authorized denominations in aggregate pri ncipal amount equal to the unredeemed portion of the Bond or Bonds.
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 shall have been deposited in the Bond Fund, such Bonds so called shall 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 shall accrue thereon on or af ter the redemption date specified in such notice.
ITEM 12.1.
ATTACHMENT 4