3. Purchases of Securities under the DTC system must be made by or through Direct Participants, which will receive a credit for the Securities on DTC’s records. The ownership interest of each actual purchaser of each Security (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Securities, except in the event that use of the book-entry system for the Securities is discontinued.
4. To facilitate subsequent transfers, all Securities deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Securities with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Securities; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Securities are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.
5. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Securities may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Securities, such as redemptions, tenders, defaults, and proposed amendments to the Security documents. For example, Beneficial Owners of Securities may wish to ascertain that the nominee holding the Securities for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them.
6. Redemption notices shall be sent to DTC. If less than all of the Securities within an issue are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed.
7. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Securities unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to Issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting G-3
rights to those Direct Participants to whose accounts Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy).
8. Redemption proceeds, distributions, and dividend payments on the Securities will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from Issuer or Agent, on payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC, Agent, or Issuer, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of Issuer or Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.
9. DTC may discontinue providing its services as depository with respect to the Securities at any time by giving reasonable notice to Issuer or Agent. Under such circumstances, in the event that a successor depository is not obtained, Security certificates are required to be printed and delivered.
10. Issuer may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, Security certificates will be printed and delivered to DTC.
11. The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that Issuer and Agent believe to be reliable, but neither Issuer nor Agent takes no responsibility for the accuracy thereof.
Stradling Yocca Carlson &Rauth
Draft of 5/30/23
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$__________
CITY OF ROSEVILLE
CREEKVIEW COMMUNITY FACILITIES DISTRICT NO. 1 (PUBLIC FACILITIES) IMPROVEMENT AREA NO. 2
SPECIAL TAX BONDS
SERIES 2023
BOND PURCHASE AGREEMENT
_____, 2023
City of Roseville
311 Vernon Street,
Roseville, California 95678
Ladies and Gentlemen:
Piper Sandler & Co. (the “Underwriter”), acting not as a fiduciary or agent for you, but on behalf of itself, offers to enter into this Bond Purchase Agreement (the “Purchase Agreement”) with the City of Roseville, California (the “City”) acting on behalf of the City of Roseville Creekview Community Facilities District No. 1 (Public Facilities) (the “District”) which, upon acceptance, will be binding upon the City and upon the Underwriter. This offer is made subject to acceptance of it by the City on the date hereof, and if not accepted will be subject to withdrawal by the Underwriter upon notice delivered to the City at any time prior to the acceptance hereof by the City.
The City acknowledges and agrees that: (i) the purchase and sale of the Bonds (defined below) pursuant to this Purchase Agreement is an arm’s-length commercial transaction between the City and the Underwriter; (ii) in connection therewith and with the discussions, undertakings and procedures leading up to the consummation of such transaction, the Underwriter is and has been acting solely as principal and is not acting as a Municipal Advisor (as defined in Section 15B of the Securities Exchange Act of 1934, as amended); (iii) the Underwriter has not assumed an advisory or fiduciary responsibility in favor of the City with respect to the offering contemplated hereby or the discussions, undertakings and procedures leading thereto (irrespective of whether the Underwriter has provided other services or is currently providing other services to the City on other matters); and (iv) the City has consulted its own legal, financial and other advisors to the extent it has deemed appropriate for this transaction.
1. Purchase, Sale and Delivery of the Bonds.
(a) Subject to the terms and conditions and in reliance upon the representations, warranties and agreements set forth herein, the Underwriter agrees to purchase from the City, and the City agrees to sell to the Underwriter, all (but not less than all) of the City of Roseville Creekview Community Facilities District No. 1 (Public Facilities) Improvement Area No. 2 Special Tax Bonds, Series 2023 (the “Bonds”) in the aggregate principal amount specified in Exhibit A hereto. The Bonds shall be dated the Closing Date (hereinafter defined), and bear interest from said date (payable semiannually on March 1 and September 1 in each year, commencing September 1, 2023) at the rates 2 4877-4926-1158v2/024667-0123
per annum and maturing on the dates and in the amounts set forth in Exhibit A hereto. The purchase price for the Bonds shall be the amount specified as such in Exhibit A hereto. (b) The Bonds shall be substantially in the form described in, shall be issued and secured under the provisions of, and shall be payable and subject to redemption as provided in, the Fiscal Agent Agreement dated as of _____ 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”), and approved by a resolution adopted by the City Council of the City (the “City Council”), acting as the legislative body of the District, on _____, 2023 (the “Resolution of Issuance”). The Bonds and interest thereon will be payable from a special tax (the “Special Tax”) levied and collected on the taxable land within the District in accordance with a Resolution of Intention adopted by the City Council on October 2, 2019, a Resolution of Formation adopted by the City Council on November 6, 2019 (together with the Resolution of Intention, the “Resolution of Formation”) and the [Unanimous Consent and Waiver of the Master Developer (as defined herein) (the “Unanimous Consent”) allowing for the annexation of Improvement Area No. 2 (“Improvement Area No. 2”) to the District]. Proceeds of the sale of the Bonds will be used in accordance with the Fiscal Agent Agreement and the Mello-Roos Community Facilities Act of 1982, as amended (Sections 53311 et seq. of the Government Code of the State of California) (the “Law”), to (i) construct and/or acquire certain authorized public facilities, (ii) provide for a deposit to a debt service reserve account for the Bonds, (iii) provide capitalized interest for debt service due on the Bonds through and including September 1, 2021, and (iv) pay costs of issuance of the Bonds. The Resolution of Issuance, the Resolution of Formation and [Ordinance No. 6163, adopted by the City Council on December 4, 2019], are collectively referred to herein as the “District Resolutions.” (c) At or prior to the acceptance hereof by the City, the City shall cause to be delivered to the Underwriter a 15c2-12 Certificate of the City, dated as of the date of this Purchase Agreement (the “City Certificate”), in substantially the form attached hereto as Exhibit B, with only such changes therein as shall have been accepted by the Underwriter. (d) Subsequent to its receipt of the City Certificate deeming the Preliminary Official Statement for the Bonds, dated _____, 2023 (which Preliminary Official Statement, together with the cover page and all appendices thereto, is herein collectively referred to as the “Preliminary Official Statement”), final for purposes of Rule 15c2-12 of the Securities and Exchange Commission (“Rule 15c2-12”), the Underwriter has distributed copies of the Preliminary Official Statement. The City hereby ratifies the use by the Underwriter of the Preliminary Official Statement and authorizes the Underwriter to use and distribute the final Official Statement dated the date hereof (including all information previously permitted to have been omitted by Rule 15c2-12, and any supplements and amendments thereto as have been approved by the City as evidenced by the execution and delivery of such document by an officer of the City (the “Official Statement”), the Fiscal Agent Agreement, the Continuing Disclosure Certificate of the City (the “City Disclosure Certificate”), this Purchase Agreement and any other documents or contracts to which the City or the District is a party related to the Bonds, and all information contained therein, and all other documents, certificates and statements furnished by the City to the Underwriter in connection with the transactions contemplated by this Purchase Agreement, in connection with the offer and sale of the Bonds by the Underwriter. The Underwriter hereby agrees to deliver a copy of the Official Statement to the Municipal Securities Rulemaking City Council (the “MSRB”) through the Electronic Municipal Marketplace Access website of the MSRB on or before the Closing Date and otherwise to comply with all applicable statutes and regulations in connection with the offering and sale of the Bonds, including, without limitation, MSRB Rule G-32 and Rule 15c2-12. 3 4877-4926-1158v2/024667-0123
(e) At 8:00 A.M., Pacific Daylight Time, on _____, 2023, or at such earlier time or date as shall be agreed upon by the Underwriter and the City (such time and date being herein referred to as the “Closing Date”), the City will deliver (i) to the Depository Trust Company in New York, New York, the Bonds in definitive form (all Bonds being in book-entry form registered in the name of Cede & Co. and having the CUSIP numbers assigned to them printed thereon), duly executed by the officers of the City, as provided in the Fiscal Agent Agreement, and (ii) to the Underwriter, at the offices of Jones Hall, A Professional Law Corporation, as bond counsel to the City (“Bond Counsel”), or at such other place as shall be mutually agreed upon by the City and the Underwriter, the other documents herein mentioned; and the Underwriter shall accept such delivery and pay the purchase price of the Bonds in immediately available funds (such delivery and payment being herein referred to as the “Closing”). Notwithstanding the foregoing, the Underwriter may, in their discretion, accept delivery of the Bonds in temporary form upon making arrangements with the City which are satisfactory to the Underwriter relating to the delivery of the Bonds in definitive form.
2. Public Offering and Establishment of Issue Price.
(a) The Underwriter agrees to make a bona fide public offering of the Bonds at the initial public offering price or prices set forth on the inside cover page of the Final Official Statement (as defined herein) and in Exhibit A hereto and subject to Section 2(c) and 2(d) hereof, the Underwriter reserves the right to change such initial public offering prices as the Underwriter deems necessary or desirable, in its sole discretion, in connection with the marketing of the Bonds, and to sell the Bonds to certain dealers (including dealers depositing the Bonds into investment trusts) and others at prices lower than the initial offering prices set forth in the Final Official Statement. A “bona fide public offering” shall include an offering to institutional investors or registered investment companies, regardless of the number of such investors to which the Bonds are sold. (b) The Underwriter agrees to assist the City in establishing the issue price of the Bonds and shall execute and deliver to the City at Closing (defined below) an “issue price” or similar certificate, together with copies of supporting pricing wires or equivalent communications, substantially in the form attached hereto as Exhibit C, with such modifications as may be appropriate or necessary, in the reasonable judgment of the Underwriter, the City and Bond Counsel to accurately reflect, as applicable, the sales price or prices or the initial offering price or prices to the public of the Bonds. All actions to be taken by the City under this section to establish the issue price of the Bonds may be taken on behalf of the City by the City’s municipal advisor, Hilltop Securities Inc. (the “Municipal Advisor”) and any notice or report to be provided to the City may be provided to the City’s Municipal Advisor.
(c) Except as otherwise set forth in Exhibit A attached hereto, the City will treat the first price at which 10% of each maturity of the Bonds (the “10% test”), identified under the column “10% Test Used” in Exhibit A, is sold to the public as the issue price of that maturity. At or promptly after the execution of this Purchase Agreement, the Underwriter shall report to the City the price or prices at which it has sold to the public each maturity of Bonds. If at that time the 10% test has not been satisfied as to any maturity of the Bonds, the Underwriter agrees to promptly report to the City the prices at which it sells the unsold Bonds of that maturity to the public. That reporting obligation shall continue, whether or not the Closing Date has occurred, until either (i) the Underwriter has sold all Bonds of that maturity or (ii) the 10% test has been satisfied as to the Bonds of that maturity, provided that, the Underwriter’s reporting obligation after the Closing Date may be at reasonable periodic intervals or otherwise upon request of the City or Bond Counsel. For purposes 4 4877-4926-1158v2/024667-0123
of this section, if Bonds mature on the same date but have different interest rates, each separate CUSIP number within that maturity will be treated as a separate maturity of the Bonds.
The Underwriter confirms that it has offered the Bonds to the public on or before the date of this Purchase Agreement at the offering price or prices (the “initial offering price”), or at the corresponding yield or yields, set forth in Exhibit A attached hereto, except as otherwise set forth therein. Exhibit A also sets forth, identified under the column “Hold the Offering Price Rule Used,” as of the date of this Purchase Agreement, the maturities, if any, of the Bonds for which the 10% test has not been satisfied and for which the City and the Underwriter agree that the restrictions set forth in the next sentence shall apply, which will allow the City to treat the initial offering price to the public of each such maturity as of the sale date as the issue price of that maturity (the “hold-theoffering-price rule”). So long as the hold-the-offering-price rule remains applicable to any maturity of the Bonds, the Underwriter will neither offer nor sell unsold Bonds of that maturity to any person at a price that is higher than the initial offering price to the public during the period starting on the sale date and ending on the earlier of the following.
(1) the close of the fifth (5th) business day after the sale date; or (2) the date on which the Underwriter has sold at least 10% of that maturity of the Bonds to the public at a price that is no higher than the initial offering price to the public.
The Underwriter will advise the City promptly after the close of the fifth (5th) business day after the sale date whether it has sold 10% of that maturity of the Bonds to the public at a price that is no higher than the initial offering price to the public. (d) The Underwriter confirms that:
(1) any selling group agreement and any third-party distribution agreement relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain language obligating each dealer who is a member of the selling group and each broker-dealer that is a party to such thirdparty distribution agreement, as applicable:
(A) (i) to report the prices at which it sells to the public the unsold Bonds of each maturity allocated to it, whether or not the Closing Date has occurred, until either all Bonds of that maturity allocated to it have been sold or it is notified by the Underwriter that the 10% test has been satisfied as to the Bonds of that maturity, provided that, the reporting obligation after the Closing Date may be at reasonable periodic intervals or otherwise upon request of the Underwriter, and (ii) to comply with the hold-the-offering-price rule, if applicable, if and for so long as directed by the Underwriter, (B) to promptly notify the Underwriter of any sales of Bonds that, to its knowledge, are made to a purchaser who is a related party to an underwriter participating in the initial sale of the Bonds to the public (each such term being used as defined below), and
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(C) to acknowledge that, unless otherwise advised by the dealer or broker-dealer, the Underwriter shall assume that each order submitted by the dealer or broker-dealer is a sale to the public.
(2) any selling group agreement relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain language obligating each dealer that is a party to a third-party distribution agreement to be employed in connection with the initial sale of the Bonds to the public to require each broker-dealer that is a party to such third-party distribution agreement to (A) report the prices at which it sells to the public the unsold Bonds of each maturity allocated to it, whether or not the Closing Date has occurred, until either all Bonds of that maturity allocated to it have been sold or it is notified by the Underwriter or the dealer that the 10% test has been satisfied as to the Bonds of that maturity, provided that, the reporting obligation after the Closing Date may be at reasonable periodic intervals or otherwise upon request of the Underwriter or the dealer, and (B) comply with the hold-the-offering-price rule, if applicable, if and for so long as directed by the Underwriter or the dealer and as set forth in the related pricing wires. (e) The City acknowledges that, in making the representations set forth in this section, the Underwriter will rely on (i) in the event a selling group has been created in connection with the initial sale of the Bonds to the public, the agreement of each dealer who is a member of the selling group to comply with the requirements for establishing issue price of the Bonds, including, but not limited to, its agreement to comply with the hold-the-offering-price rule, if applicable to the Bonds, as set forth in a selling group agreement and the related pricing wires, and (ii) in the event that a third-party distribution agreement was employed in connection with the initial sale of the Bonds to the public, the agreement of each broker-dealer that is a party to such agreement to comply with the requirements for establishing issue price of the Bonds, including, but not limited to, its agreement to comply with the hold-the-offering-price rule, if applicable to the Bonds, as set forth in the third-party distribution agreement and the related pricing wires. The City further acknowledges that the Underwriter shall not be liable for the failure of any dealer who is a member of a selling group, or of any broker-dealer that is a party to a third-party distribution agreement, to comply with its corresponding agreement to comply with the requirements for establishing issue price of the Bonds, including, but not limited to, its agreement to comply with the hold-the-offering-price rule, if applicable to the Bonds.
(f) The Underwriter acknowledges that sales of any Bonds to any person that is a related party to an underwriter participating in the initial sale of the Bonds to the public (each such term being used as defined below) shall not constitute sales to the public for purposes of this section.
Further, for purposes of this section:
(1) “public” means any person other than an underwriter or a related party;
(2) “underwriter” means (A) any person that agrees pursuant to a written contract with the City (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the public and (B) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (A) to participate in the initial sale of the Bonds to the public 6 4877-4926-1158v2/024667-0123
(including a member of a selling group or a party to a third-party distribution agreement participating in the initial sale of the Bonds to the public); (3) a purchaser of any of the Bonds is a “related party” to an underwriter if the underwriter and the purchaser are subject, directly or indirectly, to (i) more than 50% common ownership of the voting power or the total value of their stock, if both entities are corporations (including direct ownership by one corporation of another), (ii) more than 50% common ownership of their capital interests or profits interests, if both entities are partnerships (including direct ownership by one partnership of another), or (iii) more than 50% common ownership of the value of the outstanding stock of the corporation or the capital interests or profit interests of the partnership, as applicable, if one entity is a corporation and the other entity is a partnership (including direct ownership of the applicable stock or interests by one entity of the other); and
(4) “sale date” means the date of execution of this Purchase Agreement by the City and the Underwriter.
3. Representations, Warranties and Agreements of the City. The City represents, warrants and covenants to and agrees with the Underwriter that:
(a) The City is a municipal corporation and charter city duly organized and existing under the laws of the State of California (the “State”) and has duly authorized the formation of the District and the designation of Improvement Area No. 2 therein, pursuant to the Resolution of Formation, [the Unanimous Consent] and the Law. The City Council, as the legislative body of the District, has duly adopted the District Resolutions, and has caused to be recorded in the real property records of Placer County a Notice of Special Tax Lien (the “Notice of Special Tax Lien”) (such District Resolutions, [Unanimous Consent] and Notice of Special Tax Lien being collectively referred to herein as the “Formation Documents”). Each of the Formation Documents remains in full force and effect as of the date hereof and has not been amended. The District is duly organized and validly existing as a community facilities district under the laws of the State of California and Improvement Area No. 2 therein has been properly designated. The City has, and at the Closing Date will have, as the case may be, full legal right, power and authority (i) to execute, deliver and perform its obligations under this Purchase Agreement and the City Disclosure Certificate, and to carry out all transactions on its part contemplated by each of such agreements, (ii) to issue, sell and deliver the Bonds to the Underwriter pursuant to the Resolution of Issuance and the Fiscal Agent Agreement as provided herein, and (iii) to carry out, give effect to and consummate the transactions on its part contemplated by the Formation Documents and by the Fiscal Agent Agreement, this Purchase Agreement, and the City Disclosure Certificate (collectively, the “District Documents”) and the Official Statement.
(b) The City has complied, and will at the Closing Date be in compliance, in all material respects, with the Formation Documents and the District Documents, and any immaterial compliance by the City, if any, will not impair the ability of the City to carry out, give effect to or consummate the transactions on its part contemplated by the foregoing. From and after the date of issuance of the Bonds, the City will continue to comply with the covenants of the City contained in the District Documents that are applicable to such time period. 7 4877-4926-1158v2/024667-0123
(c) The City Council has duly and validly: (i) adopted the District Resolutions, (ii) called, held and conducted in accordance with all requirements of the Law, elections within the District to approve the levy of the Special Tax within Improvement Area No. 2 of the District and the issuance of the Bonds and recorded the Notice of Special Tax Lien which established a continuing lien on the land within Improvement Area No. 2 of the District securing the payment of the Special Tax, (iii) authorized and approved the execution, delivery and due performance by the City for the District of the Bonds and the District Documents, (iv) authorized the preparation, delivery and distribution of the Preliminary Official Statement and the Official Statement, and (v) authorized and approved the performance by the City of its obligations contained in, and the taking of any and all action as may be necessary to carry out, give effect to and consummate the transactions on its part contemplated by, each of the District Documents (including, without limitation, the collection of the Special Tax), the Bonds and the Official Statement and at the Closing Date, the Formation Documents will be in full force and effect and the District Documents and the Bonds will constitute the valid, legal and binding obligations of the City for the District and (assuming due authorization, execution and delivery by other parties thereto, where necessary) will be enforceable upon the City in accordance with their respective terms, subject to bankruptcy, insolvency, reorganization, moratorium and other laws affecting the enforcement of creditors’ rights in general and to the application of equitable principles if equitable remedies are sought. (d) To the best of the City’s knowledge, neither the District nor the City is in breach of or default under any applicable law or administrative rule or regulation of the State or the United States, or of any department, division, agency or instrumentality thereof, or under any applicable court or administrative decree or order, or under any loan agreement, note, resolution, trust agreement, contract, agreement or other instrument to which the District or the City is a party or is otherwise subject or bound, a consequence of which would be to materially and adversely affect the performance by the District or the City of their obligations under the Bonds, the Formation Documents or the District Documents, and compliance with the provisions of each thereof will not conflict with or constitute a breach of or default under any applicable law or administrative rule or regulation of the State or the United States, or of any department, division, agency or instrumentality thereof, or under any applicable court or administrative decree or order, or a material breach of or default under any loan agreement, note, resolution, trust agreement, contract, agreement or other instrument to which the District or the City, as the case may be, is a party or is otherwise subject or bound.
(e) Except for compliance with the blue sky or other states securities law filings, as to which the City makes no representations, all approvals, consents, authorizations, elections and orders of or filings or registrations with any State governmental authority, board, agency or commission having jurisdiction which would constitute a condition precedent to, or the absence of which would materially adversely affect, the performance by the City of its obligations hereunder, or under the Formation Documents or the District Documents, have been obtained and are in full force and effect.
(f) The Special Tax constituting the security for the Bonds has been duly and lawfully authorized and may be levied under the Law, the State Constitution and the applicable laws of the State, and the Special Tax, when levied, will constitute a valid and legally binding continuing lien on the properties on which it has been levied.
(g) The City shall not supplement or amend the Official Statement or cause the Official Statement to be supplemented or amended without the prior written consent of the 8 4877-4926-1158v2/024667-0123
Underwriter. Until the date which is twenty-five (25) days after the “end of the underwriting period” (as hereinafter defined), if any event shall occur of which the City is aware, as a result of which it may be necessary to supplement the Official Statement in order to make the statements in the Official Statement, in light of the circumstances existing at such time, not misleading, the City shall forthwith notify the Underwriter of any such event of which it has knowledge and shall cooperate fully in furnishing any information available to it for any supplement to the Official Statement necessary, in the Underwriter’s opinion, so that the statements therein as so supplemented will not be misleading in light of the circumstances existing at such time and the City shall promptly furnish to the Underwriter a reasonable number of copies of such supplement. As used herein, the term “end of the underwriting period” means the later of such time as (i) the City delivers the Bonds to the Underwriter, or (ii) the Underwriter does not retain, directly or as a member of an underwriting syndicate, an unsold balance of the Bonds for sale to the public. Unless the Underwriter gives notice to the contrary, the “end of the underwriting period” shall be deemed to be the Closing Date. Any notice delivered pursuant to this provision shall be written notice delivered to the City at or prior to the Closing Date, and shall specify a date (other than the Closing Date) to be deemed the “end of the underwriting period.”
(h) The Fiscal Agent Agreement creates a valid pledge of the Special Tax Revenues (as defined in the Fiscal Agent Agreement) and the moneys deposited in the Bond Fund and the Reserve Fund established pursuant to the Fiscal Agent Agreement, including the investments thereof, subject in all cases to the provisions of the Fiscal Agent Agreement permitting the application thereof for the purposes and on the terms and conditions set forth therein. Until such time as moneys have been set aside in an amount sufficient to pay all then outstanding Bonds at maturity or to the date of redemption if redeemed prior to maturity, plus unpaid interest thereon to maturity or to the date of redemption if redeemed prior to maturity, and premium, if any, the City will faithfully perform and abide by all of its covenants and undertakings, and the provisions contained in the Fiscal Agent Agreement.
(i) Except as disclosed in the Preliminary Official Statement, no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, regulatory agency, public board or body is pending with respect to which the City has been served with process or, to the best knowledge of the City, threatened (i) which would materially adversely affect the ability of either the City or the District to perform their obligations under the Bonds, the Formation Documents or the District Documents, or (ii) seeking to restrain or to enjoin the issuance, sale or delivery of the Bonds, the application of the proceeds thereof in accordance with the Fiscal Agent Agreement, or the collection or application of the Special Tax pledged or to be pledged to pay the principal of and interest on the Bonds, or the pledge thereof, or in any way contesting or affecting the validity or enforceability of the Bonds, the Formation Documents, the District Documents, or any action contemplated by any of said documents, or (iii) in any way contesting the completeness or accuracy of the Official Statement or the powers or authority of the City or the District with respect to the Bonds, the Formation Documents, the District Documents, or any action of the City or the District contemplated by any of said documents; nor is there any action pending with respect to which the City has been served with process or, to the best knowledge of the City, threatened against the City or the District which alleges that interest on the Bonds is not excludable from gross income for federal income tax purposes or is not exempt from California personal income taxation, or (iv) which would affect or restrain the ability of the owners of property within the District to develop their property as described in the Preliminary Official Statement. 9 4877-4926-1158v2/024667-0123
(j) The City will furnish such information, execute such instruments and take such other action in cooperation with the Underwriter as the Underwriter may reasonably request in order for the Underwriter to qualify the Bonds for offer and sale under the “Blue Sky” or other securities laws and regulations of such states and other jurisdictions of the United States as the Underwriter may designate; provided, however, the City shall not be required to register as a dealer or a broker of securities or to consent to service of process in connection with any blue sky filing. (k) Any certificate signed by any official of the City authorized to do so and delivered to the Underwriter in connection with the Bonds or this Purchase Agreement shall be deemed a representation and warranty to the Underwriter as to the statements made therein. (l) The City will apply the proceeds of the Bonds in accordance with the Fiscal Agent Agreement as described in the Official Statement. (m) The information contained in the Preliminary Official Statement (other than under the captions “IMPROVEMENT AREA NO. 2 PLANNED DEVELOPMENT,” “THE MASTER DEVELOPER” and “MERCHANT BUILDER INFORMATION,” as to which no view is expressed) was as of the date thereof, and the information contained in the Official Statement (other than under the captions “IMPROVEMENT AREA NO. 2 PLANNED DEVELOPMENT,” “THE MASTER DEVELOPER” and “MERCHANT BUILDER INFORMATION,” as to which no view is expressed) as of its date and on the Closing Date shall be, true and correct in all material respects and such information does not and shall not contain any untrue or misleading statement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. (n) The Preliminary Official Statement heretofore delivered to the Underwriter has been deemed final by the City as of its date, except for the omission of such information as is permitted to be omitted in accordance with paragraph (b)(1) of Rule 15c2-12. The City hereby covenants and agrees that, within seven (7) business days from the date hereof, the City shall cause a final printed form of the Official Statement to be delivered to the Underwriter in a quantity mutually agreed upon by the Underwriter and the City so that the Underwriter may comply with paragraph (b)(4) of Rule 15c2-12 and Rules G-12, G-15, G-32 and G-36 of the Municipal Securities Rulemaking Board.
(o) Except as otherwise disclosed in the Preliminary Official Statement, the City is, and has always been, in material compliance with respect to all reporting obligations in the last five years that it has undertaken under Rule 15c2-12 for all indebtedness issued by the City. (p) Except as otherwise disclosed in the Preliminary Official Statement, the Formation Documents have not been amended, terminated, rescinded or modified. (q) The City shall not voluntarily undertake any course of action inconsistent with satisfaction of the requirements applicable to the City as set forth in this Purchase Agreement. (r) The City shall cooperate with the Underwriter in the qualification of the Bonds for offering and sale and the determination of their eligibility for investment under the laws of such jurisdictions as the Underwriter may designate.
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(s) The City shall not knowingly take or omit to take any action that, under existing law, may adversely affect the exemption from state income taxation or the exclusion from gross income for federal income tax purposes of the interest on the Bonds.
4. Conditions to the Obligations of the Underwriter. The obligations of the Underwriter to accept delivery of and pay for the Bonds on the Closing Date shall be subject, at the option of the Underwriter, to the accuracy in all material respects of the representations and warranties of the City contained herein, as of the date hereof and as of the Closing Date, to the accuracy in all material respects of the statements of the officers and other officials of the City made in any certificates or other documents furnished pursuant to the provisions hereof, to the performance by the City of its obligations to be performed hereunder at or prior to the Closing Date and to the following additional conditions:
(a) At the Closing Date, the Formation Documents and the District Documents shall be in full force and effect, and shall not have been amended, modified or supplemented, except as may have been agreed to in writing by the Underwriter, and there shall have been taken in connection therewith, with the issuance of the Bonds and with the transactions contemplated thereby and by this Purchase Agreement, all such actions as, in the opinion of Bond Counsel, and Stradling Yocca Carlson & Rauth, a Professional Corporation (“Stradling”), counsel to the Underwriter, shall be necessary and appropriate;
(b) The information contained in the Official Statement will, as of the Closing Date and as of the date of any supplement or amendment thereto pursuant to Section 3(g) hereof, be true and correct in all material respects and will not, as of the Closing Date or as of the date of any supplement or amendment thereto pursuant to Section 3(g) hereof, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (c) Between the date hereof and the Closing Date, the market price or marketability of the Bonds at the initial offering prices set forth in the Official Statement shall not have been materially adversely affected, in the judgment of the Underwriter (evidenced by a written notice to the City terminating the obligation of the Underwriter to accept delivery of and pay for the Bonds), by reason of any of the following:
(1) legislation introduced in or enacted (or resolution passed) by the Congress of the United States of America or recommended to the Congress by the President of the United States, the Department of the Treasury, the Internal Revenue Service, or any member of Congress, or favorably reported for passage to either House of Congress by any committee of such House to which such legislation had been referred for consideration or a decision rendered by a court established under Article III of the Constitution of the United States of America or by the Tax Court of the United States of America, or an order, ruling, regulation (final, temporary or proposed), press release or other form of notice issued or made by or on behalf of the Treasury Department or the Internal Revenue Service of the United States of America, with the purpose or effect, directly or indirectly, of imposing federal income taxation upon the interest that would be received by the owners of the Bonds beyond the extent to which such interest is subject to taxation as of the date hereof; 11 4877-4926-1158v2/024667-0123
(2) legislation introduced in or enacted (or resolution passed) by the Congress of the United States of America, or an order, decree or injunction issued by any court of competent jurisdiction, or an order, ruling, regulation (final, temporary or proposed), press release or other form of notice issued or made by or on behalf of the Securities and Exchange Commission (the “SEC”), or any other governmental agency having jurisdiction of the subject matter, to the effect that obligations of the general character of the Bonds, or the Bonds are not exempt from registration under or other requirements of the Securities Act of 1933, as amended, or that the Fiscal Agent Agreement is not exempt from qualification under or other requirements of the Trust Indenture Act of 1939, as amended, or that the issuance, offering or sale of obligations of the general character of the Bonds, or of the Bonds, as contemplated hereby or by the Official Statement or otherwise is or would be in violation of the federal securities laws, rules or regulations as amended and then in effect; (3) any amendment to the federal or California Constitution or action by any federal or California court, legislative body, regulatory body or other authority materially adversely affecting the tax status of the City or the District, their property, income or securities (or interest thereon), the validity or enforceability of the Special Tax as contemplated by the Formation Documents, the District Documents or the Official Statement;
(4) any event occurring, or information becoming known, which, in the judgment of the Underwriter, makes untrue in any material respect any statement or information contained in the Preliminary Official Statement or the Official Statement, or results in the Preliminary Official Statement or the Official Statement containing any untrue statement of a material fact or omitting to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; (5) the declaration of war or the escalation of, or engagement in, military hostilities by the United States or the occurrence of any other national or international emergency or calamity relating to the effective operation of the government of, or the financial community in, the United States which, in the judgment of the Underwriter, makes it impracticable or inadvisable to proceed with the offering or the delivery of the Bonds on the terms and in the manner contemplated in the Preliminary Official Statement or the Official Statement;
(6) the declaration of a general banking moratorium by federal, State of New York or State of California authorities, or the general suspension of trading on any national securities exchange or minimum or maximum prices for trading shall have been fixed and be in force, or maximum ranges for prices for securities shall have been required and be in force on the New York Stock Exchange or other national securities exchange, whether by virtue of determination by that exchange or by order of the SEC or any other governmental authority having jurisdiction that, in the Underwriter’s reasonable judgment, makes it impracticable for the Underwriter to market the Bonds or enforce contracts for the sale of the Bonds; (7) the imposition by the New York Stock Exchange or other national securities exchange, or any governmental authority, of any material restrictions not 12 4877-4926-1158v2/024667-0123
now in force with respect to the Bonds or obligations of the general character of the Bonds or securities generally, or the material increase of any such restrictions now in force, including those relating to the extension of credit by, or the charge to the net capital requirements of, the Underwriter;
(8) the entry of an order by a court of competent jurisdiction which enjoins or restrains the City from issuing permits, licenses or entitlements within Improvement Area No. 2 or which order, in the reasonable opinion of the Underwriter, otherwise materially and adversely affects proposed development of property within the Improvement Area No. 2;
(9) a material disruption in securities settlement, payment or clearance services affecting the Bonds shall have occurred;
(10) there shall have been any material adverse change in the affairs of the City that in the Underwriter’s reasonable judgment will materially adversely affect the market for the Bonds or the ability of the Underwriter to enforce contracts for the sale of the Bonds;
(11) there shall be established any new restriction on transactions in securities materially affecting the free market for securities (including the imposition of any limitation on interest rates) or the extension of credit by, or a change to the net capital requirements of, underwriters established by the New York Stock Exchange, the SEC, any other federal or State agency or the Congress of the United States, or by Executive Order;
(12) a stop order, release, regulation, or no-action letter by or on behalf of the SEC or any other governmental agency having jurisdiction of the subject matter shall have been issued or made to the effect that the issuance, offering, or sale of the Bonds, including all the underlying obligations as contemplated hereby or by the Official Statement, or any document relating to the issuance, offering or sale of the Bonds is or would be in violation of any provision of the federal securities laws at the Closing Date, including the Securities Act, the Exchange Act, and the Trust Indenture Act of 1939, as amended; or
(13) filing of or threat of litigation of the type described in Section 3(i) hereof.
(d) On the Closing Date, the Underwriter shall have received counterpart originals or certified copies of the following documents, in each case satisfactory in form and substance to the Underwriter:
(1) The Formation Documents and the District Documents, together with a certificate dated as of the Closing Date of the City Clerk of the City to the effect that each Formation Document is a true, correct and complete copy of the one duly adopted by the City Council;
(2) The Official Statement;
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(3) An approving opinion for the Bonds, dated the Closing Date and addressed to the City, of Bond Counsel, in the form attached to the Preliminary Official Statement as Appendix D, and an unqualified letter of such counsel, dated the Closing Date and addressed to the Underwriter, to the effect that such approving opinion addressed to the City may be relied upon by the Underwriter to the same extent as if such opinion was addressed to it;
(4) A supplemental opinion, dated the Closing Date and addressed to the Underwriter, of Bond Counsel, to the effect that (i) this Purchase Agreement and the City Disclosure Certificate have been duly authorized, executed and delivered by the City, and, assuming such agreements constitute a valid and binding obligation of the other respective parties thereto, constitute the legally valid and binding agreements of the City for the District enforceable in accordance with their respective terms, except as enforcement may be limited by bankruptcy, moratorium, insolvency or other laws affecting creditor’s rights or remedies and may be subject to general principles of equity (regardless of whether such enforceability is considered in equity or at law); (ii) the Bonds are not subject to the registration requirements of the Securities Act of 1933, as amended, and the Fiscal Agent Agreement is exempt from qualification under the Trust Indenture Act of 1939, as amended; and (iii) the information contained in the Official Statement on the cover and under the captions “INTRODUCTION,” “THE BONDS” (other than information relating to DTC and its Book-Entry Only System), “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS,” “TAX MATTERS” and Appendices D and F thereof is accurate, insofar as such information purports to summarize or replicate certain provisions of the Law, the Bonds and the Fiscal Agent Agreement and the exclusion from gross income for federal income tax purposes and exemption from State of California personal income taxes of interest on the Bonds;
(5) An opinion, dated the Closing Date and addressed to the Underwriter, of Stradling, as counsel for the Underwriter, in form and substance acceptable to the Underwriter;
(6) A certificate or certificates, dated the Closing Date and signed by an authorized officer of the City, ratifying the use and distribution by the Underwriter of the Preliminary Official Statement and the Official Statement in connection with the offering and sale of the Bonds; and certifying that (i) the representations and warranties of the City contained in Section 3 hereof are true and correct in all material respects on and as of the Closing Date with the same effect as if made on the Closing Date; (ii) to the best of his or her knowledge, no event has occurred since the date of the Official Statement affecting the matters contained therein which should be disclosed in the Official Statement for the purposes for which it is to be used in order to make the statements and information contained in the Official Statement not misleading in any material respect, and the Bonds, the Formation Documents and the District Documents conform as to form and tenor to the descriptions thereof contained in the Official Statement; and (iii) the City has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied under the Formation Documents, the District Documents and the Official Statement at or prior to the Closing Date;
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(7) An opinion, dated the Closing Date and addressed to the Underwriter, of the City Attorney, to the effect that (i) to its current actual knowledge and except as disclosed in the Official Statement, no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, regulatory agency, public board or body is pending with respect to which the City has been served with process or is known to such counsel to be threatened, as to which the City is or would be a party, which would materially adversely affect the ability of the City or the District to perform their obligations under the Bonds, the Formation Documents or the District Documents, or which seeks to restrain or enjoin the issuance, sale and delivery of the Bonds or exclusion from gross income for federal income tax purposes or State of California personal income taxes of interest on the Bonds, or the application of the proceeds thereof in accordance with the Fiscal Agent Agreement, or the collection or application of the Special Tax to pay the principal of and interest on the Bonds, or which in any way contests or affects the validity or enforceability of the Bonds, the Formation Documents or the District Documents or the accuracy of the Official Statement, or any action of the City contemplated by any of said documents or the development of property within the District; (ii) the City is duly organized and validly existing as a public entity under the laws of the State of California, the District is duly organized and validly existing as a community facilities district under the laws of the State of California and Improvement Area No. 2 has been properly designated therein; (iii) the City has full legal right, power and authority to issue the Bonds and to perform all of its obligations under the Formation Documents and the District Documents; (iv) the City has obtained all approvals, consents, authorizations, elections and orders of or filings or registrations with any State governmental authority, board, agency or commission having jurisdiction which constitute a condition precedent to the levy of the Special Tax, the issuance of the Bonds or the performance by the City of its obligations thereunder or under the Fiscal Agent Agreement, except that no opinion need be expressed regarding compliance with blue sky or other securities laws or regulations, whatsoever; (v) the City Council has duly and validly adopted the Formation Documents at meetings of the City Council which were called and held pursuant to law and with all public notice required by law and at which a quorum was present and acting throughout, and the Formation Documents are now in full force and effect and have not been amended; and (vi) the City has duly authorized, executed and delivered the District Documents and the Bonds and has duly authorized the preparation and delivery of the Official Statement; (8) [One or more certificates dated the Closing Date from Willdan Financial Services (the “Special Tax Consultant”) addressed to the City and the Underwriter to the effect that (i) the amount of the Special Taxes that could be levied in each Fiscal Year on all Parcels (as defined in the Rate and Method of Apportionment of Special Tax for Improvement Area No. 2) of Taxable Property in Improvement Area No. 2 less Administrative Expenses (as defined in the Rate and Method of Apportionment of Special Tax for Improvement Area No. 2) of 1%, is at least one hundred ten percent (110%) of the total Annual Debt Service for each such Bond Year that begins in such Fiscal Year on the Bonds, and (ii) all information supplied by the Special Tax Consultant for use in the Official Statement is true and correct as of the date of the Official Statement and as of the Closing Date;] 15 4877-4926-1158v2/024667-0123
(9) A certificate of the City dated the Closing Date, in a form acceptable to Bond Counsel, to the effect that the Bonds are not arbitrage bonds within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended; (10) A certificate of the Fiscal Agent and an opinion of counsel to the Fiscal Agent dated the Closing Date and addressed to the City and the Underwriter to the effect that the Fiscal Agent has authorized the execution and delivery of the Fiscal Agent Agreement and that the Fiscal Agent Agreement is a valid and binding obligation of the Fiscal Agent enforceable in accordance with its terms; (11) A Letter of Representations of Anthem United Creekview Developments Limited Partnership, a Washington limited partnership, (the “Master Developer”) dated the date of the Preliminary Official Statement, substantially in the form attached as Exhibit D hereto (the “Master Developer Letter of Representations”) or as such certificate may be modified with the approval of the Underwriter and Stradling, and a closing certificate of the Master Developer dated the Closing Date, substantially in the form attached as Exhibit E hereto (the “Master Developer Closing Certificate”);
(12) A continuing disclosure certificate executed by the Master Developer in the form attached in Appendix E to the Preliminary Official Statement (the “Master Developer Continuing Disclosure Certificate”);
(13) One or more opinions of counsel to the Master Developer addressed to the District and the Underwriter to the effect that (i) the Master Developer is a Washington limited partnership, duly organized and existing under the laws of the State of Washington and qualified to do business in the State and (ii) except as set forth in the Official Statement, there is no litigation pending against the Master Developer (with service of process to the Master Developer having been duly given and completed) or overtly threatened against the Master Developer which would materially and adversely affect the validity or enforceability of the Master Developer Continuing Disclosure Certificate executed by the Master Developer or the Master Developer’s ability to pay the Special Taxes when due, and a negative assurance letter of counsel to the Master Developer, dated the Closing Date and substantially in the form attached as Exhibit F hereto, or as such letter may be modified with the approval of the Underwriter and Stradling;
(14) A Letter of Representations from each of Lennar Homes of California, LLC, a California limited liability company (“Lennar Homes”), Meritage Homes of California, Inc., a California corporation (“Meritage Homes”), Woodside 05M LP, a California limited partnership (“Woodside Homes”) and D.R. Horton CA2, Inc., a California corporation (“D.R. Horton Homes” and, together with Lennar Homes, Meritage Homes and Woodside Homes, the “Builders”) dated the date of the Preliminary Official Statement, substantially in the form attached as Exhibit G hereto (each a “Builder Letter of Representations”) or as such letters may be modified with the approval of the Underwriter and Stradling, and a closing certificate of each of the Builders dated the Closing Date, substantially in the form attached as Exhibit H hereto (each a “Builder Closing Certificate”); 16 4877-4926-1158v2/024667-0123
(15) A continuing disclosure certificate executed by each of the Builders in the form included in Appendix E to the Preliminary Official Statement (each a “Builder Continuing Disclosure Certificate”);
(16) One or more opinions of counsel to each of the Builders addressed to the District and the Underwriter, in form and substance acceptable to the Underwriter and Stradling, regarding (i) each Builder’s due organization and qualification to do business, (ii) the due authorization and execution of the Bulder Continuing Disclosure Certificate executed by such Builder, (iii) the absence of litigation pending against each Builder (with service of process to such Builder having been duly given and completed) or overtly threatened against such Builder which would materially and adversely affect the validity or enforceability of the Builder Continuing Disclosure Certificate executed by the Builder or the Builder’s ability to pay the Special Taxes when due, and (iv) negative assurance regarding the Preliminary Official Statement and the Official Statement;
(17) G-17 letter from the Underwriter acknowledged by the City; (18) A letter of Jones Hall, A Professional Law Corporation, as disclosure counsel to the City (“Disclosure Counsel”), addressed to the Underwriter and the City, to the effect that nothing has come to such counsel’s attention that would lead them to believe that the Preliminary Official Statement, as of its date, and the Official Statement, as of its date and as of the Closing Date (but excluding therefrom the appendices thereto, financial statements and statistical data, and information regarding The Depository Trust Company and its book-entry system, as to which no opinion need be expressed), contained or contains an untrue statement of a material fact or omitted or omits to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading;
(19) A certificate from Integra Realty Resources (the “Appraiser”) consenting to the inclusion of their appraisal report (the “Appraisal”) in the Preliminary Official Statement and the final Official Statement and certifying that (i) the information in the Official Statement relating to the Appraisal does not contain an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading and (ii) since the date of the Appraisal they are not aware of any facts that would materially affect the conclusions of value set forth therein; (20) Such additional legal opinions, certificates, instruments and other documents as the Underwriter may reasonably request to evidence the truth and accuracy, as of the date hereof and as of the Closing Date, of the statements and information contained in the Preliminary Official Statement and the Official Statement, of the City’s representations and warranties contained herein and the due performance or satisfaction by the City at or prior to the Closing of all agreements then to be performed and all conditions then to be satisfied by the City and the District in connection with the transactions contemplated hereby and by the Official Statement.
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If the City shall be unable to satisfy the conditions to the obligations of the Underwriter to purchase, accept delivery of and pay for the Bonds contained in this Purchase Agreement, or if the obligations of the Underwriter to purchase, accept delivery of and pay for the Bonds shall be terminated for any reason permitted by this Purchase Agreement, this Purchase Agreement shall terminate and neither the Underwriter nor the City shall be under any further obligation hereunder, except that the respective obligations of the City and the Underwriter set forth in Section 5, Section 6 and Section 8 hereof shall continue in full force and effect.
5. Conditions of the City’s Obligations. The City’s obligations hereunder are subject to the Underwriter’s performance of its obligations hereunder, and are also subject to the following conditions:
(a) As of the Closing Date, no litigation shall be pending or, to the knowledge of the duly authorized officer of the City executing the certificate referred to in Section 4(d)(6) hereof, threatened, to restrain or enjoin the issuance or sale of the Bonds or in any way affecting any authority for or the validity of the Bonds, the Formation Documents, the District Documents or the existence or powers of the City or the District, including Improvement Area No. 2 therein; and (b) As of the Closing Date, the City shall receive the approving opinion of Bond Counsel referred to in Section 4(d)(3) hereof, dated as of the Closing Date.
6. Expenses. Whether or not the Bonds are delivered to the Underwriter as set forth herein:
(a) The Underwriter shall be under no obligation to pay, and the City shall pay or cause to be paid (out of any legally available funds of the District) all expenses incident to the performance of the City’s obligations hereunder, including, but not limited to, the cost of printing, engraving and delivering the Bonds to the Underwriter, the cost of preparation, printing, distribution and delivery of the Fiscal Agent Agreement, the Preliminary Official Statement, the Official Statement and all other agreements and documents contemplated hereby (and drafts of any thereof) in such reasonable quantities as requested by the Underwriter; and the fees and disbursements of the Municipal Advisor, the Special Tax Consultant, the Fiscal Agent, Bond Counsel, Disclosure Counsel and any accountants, engineers or any other experts or consultants the City has retained in connection with the Bonds; and
(b) The City shall be under no obligation to pay, and the Underwriter shall pay, any fees of the California Debt and Investment Advisory Commission, the cost of preparation of any “blue sky” or legal investment memoranda and this Purchase Agreement; expenses to qualify the Bonds for sale under any “blue sky” or other state securities laws; and all other expenses incurred by the Underwriter in connection with its public offering and distribution of the Bonds (except those specifically enumerated in paragraph (a) of this section), including the fees and disbursements of its counsel and any advertising expenses.
7. Notices. Any notice or other communication to be given to the City under this Purchase Agreement may be given by delivering the same in writing to the City at 311 Vernon Street, Roseville, California 95678, Attention: Assistant City Manager/Chief Financial Officer; and any notice or other communication to be given to the Underwriter under this Purchase Agreement may be given by delivering the same in writing to Piper Sandler & Co., 3626 Fair Oaks Blvd. Suite 100, Sacramento, Ca 95864, Attention: Dennis McGuire.
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8. Parties in Interest. This Purchase Agreement is made solely for the benefit of the City, the District and the Underwriter (including their successors or assigns), and no other person shall acquire or have any right hereunder or by virtue hereof.
9. Survival of Representations and Warranties. The representations and warranties of the City set forth in or made pursuant to this Purchase Agreement shall not be deemed to have been discharged, satisfied or otherwise rendered void by reason of the Closing or termination of this Purchase Agreement and regardless of any investigations made by or on behalf of the Underwriter (or statements as to the results of such investigations) concerning such representations and statements of the City and regardless of delivery of and payment for the Bonds.
10. Effective. This Purchase Agreement shall become effective and binding upon the respective parties hereto upon the execution of the acceptance hereof by the City and shall be valid and enforceable as of the time of such acceptance.
11. No Prior Agreements. This Purchase Agreement supersedes and replaces all prior negotiations, agreements and understandings between the parties hereto in relation to the sale of Bonds for the City.
12. Governing Law. This Purchase Agreement shall be governed by the laws of the State applicable to contracts made and performed in the State.
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13. Counterparts. This Purchase Agreement may be executed simultaneously in several counterparts, each of which shall be an original and all of which shall constitute one and the same instrument.
Very truly yours,
PIPER SANDLER & CO., as Underwriter
By:
Authorized Officer
ACCEPTED:
CITY OF ROSEVILLE, CALIFORNIA, for and
on behalf of the City’s Creekview Community
Facilities District No. 1 (Public Facilities)
By:
Assistant City Manager/Chief Financial
Officer
Time: ____p.m.
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EXHIBIT A
MATURITY SCHEDULE
CITY OF ROSEVILLE
CREEKVIEW COMMUNITY FACILITIES DISTRICT NO. 1 (PUBLIC FACILITIES) IMPROVEMENT AREA NO. 2
SPECIAL TAX BONDS
SERIES 2023
Maturity Date
(September 1)
Principal
Amount Interest Rate Yield Price
10% Test
Used
Hold the
Offering
Price Used
C
Priced to the optional call date of September 1, 20__ at _____%.
T Term Bond.
The purchase price of the Bonds shall be $___________, which is the principal amount thereof ($__________) [plus/less] [net] original issue [premium/discount] of $__________ and less Underwriter’s discount of $__________.
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:
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Redemption Dates
Redemption
Price
September 1, 20__ through August 31, 20__ %
September 1, 20__ through August 31, 20__
September 1, 20__ through August 31, 20__
September 1, 20__ and any date thereafter
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 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
_____ 1, 20__ through and including March 1, 20__ %
September 1, 20__ and March 1, 20__
September 1, 20__ and March 1, 20__
September 1, 20__ and any Interest Payment Date thereafter Mandatory Sinking Fund Redemption. The Term Bonds maturing September 1, 20__ and September 1, 20__ are subject to mandatory sinking payment redemption in part on September 1, 20__ and September 1, 20__, respectively, and on each September 1 thereafter to maturity, by lot, at a redemption price equal to 100% of the principal amount thereof to be redeemed, without premium, in the aggregate respective principal amounts as set forth in the following tables:
Term Bonds Maturing September 1, 20
Sinking Fund
Redemption Date
(September 1)
Sinking Fund
Payment
(maturity)
Term Bonds Maturing September 1, 20__
Sinking Fund
Redemption Date
(September 1)
Sinking Fund
Payment
(maturity)
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The amounts in the foregoing tables will 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.
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EXHIBIT B
CITY OF ROSEVILLE
CREEKVIEW COMMUNITY FACILITIES DISTRICT NO. 1 (PUBLIC FACILITIES) IMPROVEMENT AREA NO. 2
SPECIAL TAX BONDS
SERIES 2023
RULE 15c2-12 CERTIFICATE
The undersigned hereby certifies and represents that he is the Assistant City Manager/Chief Financial Officer of the City of Roseville, California (the “City”), and, as such, is duly authorized to execute and deliver this certificate and further hereby certifies that:
(1) this certificate is being delivered in connection with the sale and issuance of the City of Roseville Creekview Community Facilities District No. 1 (Public Facilities) Improvement Area No. 2 Special Tax Bonds, Series 2023 (the “Bonds”) in order to enable the underwriter of the Bonds to comply with Rule 15c2-12 promulgated under the Securities Exchange Act of 1934, as amended (the “Rule”); (2) in connection with the sale and issuance of the Bonds, there has been prepared a Preliminary Official Statement dated _____, 2023 setting forth information concerning the Bonds and the City of Roseville Creekview Community Facilities District No. 1 (Public Facilities) Improvement Area No. 2 (the “Preliminary Official Statement”); and
(3) except for the Permitted Omissions, the Preliminary Official Statement is deemed final within the meaning of the Rule. As used herein, the term “Permitted Omissions” refers to the offering price(s), interest rates(s), selling compensation, aggregate principal amount, principal amount per maturity, delivery dates, ratings and other terms of the Bonds depending on such matters, all as set forth in the Rule.
IN WITNESS WHEREOF, I have hereunto set my hand as of _____, 2023.
CITY OF ROSEVILLE, CALIFORNIA
By:
Its: Assistant City Manager/Chief Financial Officer
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EXHIBIT C
FORM OF ISSUE PRICE CERTIFICATE
CITY OF ROSEVILLE
CREEKVIEW COMMUNITY FACILITIES DISTRICT NO. 1 (PUBLIC FACILITIES) IMPROVEMENT AREA NO. 2
SPECIAL TAX BONDS
SERIES 2023
The undersigned, on behalf of Piper Sandler & Co. (“Piper”) hereby certifies as set forth below with respect to the sale and issuance of the above-captioned bonds (the “Bonds”).
1. Sale of the General Rule Maturities. As of the date of this certificate, for each Maturity of the General Rule Maturities, the first price at which at least 10% of such Maturity was sold to the Public is the respective price listed in Schedule A.
2. [Initial Offering Price of the Hold-the-Offering-Price Maturities. (a) Piper offered the Hold-the-Offering-Price Maturities to the Public for purchase at the respective initial offering prices listed in Schedule A (the “Initial Offering Prices”) on or before the Sale Date. A copy of the pricing wire or equivalent communication for the Bonds is attached to this certificate as Schedule B.
(b) As set forth in the Bond Purchase Agreement, dated _____, 2023, by and between Piper and the Issuer, Piper has agreed in writing that, (i) for each Maturity of the Hold-theOffering-Price Maturities, it would neither offer nor sell any of the Bonds of such Maturity to any person at a price that is higher than the Initial Offering Price for such Maturity during the Holding Period for such Maturity (the “hold-the-offering-price rule”), and (ii) any selling group agreement shall contain the agreement of each dealer who is a member of the selling group, and any retail distribution agreement shall contain the agreement of each broker-dealer who is a party to the retail distribution agreement, to comply with the hold-the-offering-price rule. Pursuant to such agreement, no Underwriter (as defined below) has offered or sold any Maturity of the Hold-the-Offering-Price Maturities at a price that is higher than the respective Initial Offering Price for that Maturity of the Bonds during the Holding Period.]
3. Reserve Fund.
The establishment of the Reserve Fund for the in the amount of the Reserve Requirement (as such terms are defined in the Fiscal Agent Agreement dated as of _____ 1, 2023, by and between the City and U.S. Bank Trust Company, National Association, as fiscal agent, pursuant to which the Bonds are being issued) was vital to the marketing of the Bonds and reasonably required to assure payment of debt service on the Bonds.
4. Defined Terms.
(a) General Rule Maturities means those Maturities of the Bonds listed in Schedule A hereto as the “General Rule Maturities.”
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(b) [Hold-the-Offering-Price Maturities means those Maturities of the Bonds listed in Schedule A hereto as the “Hold-the-Offering-Price Maturities.” (c) Holding Period means, with respect to a Hold-the-Offering-Price Maturity, the period starting on the Sale Date and ending on the earlier of (i) the close of the fifth business day after the Sale Date _____, 2023), or (ii) the date on which Piper has sold at least 10% of such Holdthe-Offering-Price Maturity to the Public at prices that are no higher than the Initial Offering Price for such Hold-the-Offering-Price Maturity.]
(d) Issuer means the City of Roseville.
(e) Maturity means Bonds with the same credit and payment terms. Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate Maturities.
(f) Public means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a related party to an Underwriter.
The term “related party” for purposes of this certificate generally means any two or more persons who have greater than 50 percent common ownership, directly or indirectly. (g) [Sale Date means the first day on which there is a binding contract in writing for the sale of a Maturity of the Bonds. The Sale Date of the Bonds is _____, 2023. (h) Underwriter means (i) any person that agrees pursuant to a written contract with the Issuer (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public, and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (i) of this paragraph to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the Public).] The representations set forth in this certificate are limited to factual matters only. Nothing in this certificate represents Piper’s interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder.
The undersigned understands that the foregoing information will be relied upon by the Issuer with respect to certain of the representations set forth in a Certificate as to Arbitrage and Tax Compliance Procedures for the Bonds and with respect to compliance with the federal income tax rules affecting the Bonds, and by Jones Hall, A Professional Law Corporation in connection with rendering its opinion that the interest on the Bonds is excluded from gross income for federal income tax purposes, the preparation of the Internal Revenue Service Form 8038-G, and other federal income tax advice that it may give to the Issuer from time to time relating to the Bonds.
PIPER SANDLER & CO.
By:
Name:
Dated: _____, 2023
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SCHEDULE A
SALE PRICES OF THE GENERAL RULE MATURITIES [AND INITIAL OFFERING PRICES OF THE HOLD-THE-OFFERING-PRICE MATURITIES]
(Attached)
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[SCHEDULE B
PRICING WIRE OR EQUIVALENT COMMUNICATION
(Attached)]
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EXHIBIT D
CITY OF ROSEVILLE
CREEKVIEW COMMUNITY FACILITIES DISTRICT NO. 1 (PUBLIC FACILITIES) IMPROVEMENT AREA NO. 2
SPECIAL TAX BONDS
SERIES 2023
LETTER OF REPRESENTATIONS OF ANTHEM UNITED CREEKVIEW
DEVELOPMENTS LIMITED PARTNERSHIP
_____, 2023
In connection with the issuance and sale of the above-captioned bonds (the “Bonds”), and pursuant to Section 4(d)(11) of the Bond Purchase Agreement (the “Bond Purchase Agreement”) to be executed by and between City of Roseville, California (the “City”), for and on behalf of the City of Roseville Creekview Community Facilities District No. 1 (Public Facilities) (the “District”), and Piper Sandler & Co. (the “Underwriter”), Anthem United Creekview Developments Limited Partnership, a Washington limited partnership (the “Master Developer”), hereby represents, warrants and covenants to the City, the District and the Underwriter as of the date hereof as set forth herein. Unless otherwise indicated, capitalized terms used herein and not defined have the meaning given to them in the Bond Purchase Agreement.
1. The Master Developer is duly organized and validly existing under the laws of the State of Washington and has all requisite right, power, and authority to: (i) execute and deliver this Letter of Representations of Anthem United Creekview Developments Limited Partnership (the “Letter of Representations”) and the Master Developer Continuing Disclosure Certificate; and (ii) undertake all of the transactions on its part described in the Preliminary Official Statement.
2. As set forth in the Preliminary Official Statement, certain of the property within Improvement Area No. 2 of the District is held in the name of the Master Developer (herein, the “Property”). The undersigned, on behalf of the Master Developer, make the representations herein with respect to all such Property.
3. The Master Developer has, or will have prior to the Closing, duly authorized the execution and delivery of the Master Developer Continuing Disclosure Certificate at the Closing and the performance by the Master Developer of its obligations thereunder.
4. Except as disclosed in the Preliminary Official Statement, to the Actual Knowledge of the Undersigned,1(a) the Master Developer and its Affiliates,2are not in breach of or in default
1 “Actual Knowledge of the Undersigned” means the knowledge that the individuals signing on behalf of the Master Developer currently have as of the date of this Letter of Representations or have obtained through: (i) interviews with such current officers and responsible employees of the Master Developer and its Affiliates as the undersigned have determined are reasonably likely, in the ordinary course of their respective duties, to have knowledge of the matters that are set forth in this Letter of Representations; and/or (ii) review of documents that were reasonably available to the undersigned and which the undersigned have reasonably deemed necessary in order for the undersigned to obtain knowledge of the matters that are set forth in this Letter D-2
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under any applicable judgment or decree or any loan agreement, option agreement, development agreement, indenture, bond, or note (collectively, the “Material Agreements”) to which the Master Developer or its Affiliates are a party or otherwise subject, which breach or default could reasonably be expected to materially and adversely affect the Master Developer’s ability to develop the Property as described in the Preliminary Official Statement or to pay the Special Tax due with respect to the Property (to the extent the responsibility of the Master Developer) prior to delinquency and (b) no event has occurred and is continuing that with the passage of time or giving of notice, or both, would constitute such a breach or default.
5. Except as described in the Preliminary Official Statement, there is no material indebtedness of the Master Developer or its Affiliates that is secured by an interest in the Property.
To the Actual Knowledge of the Undersigned, neither the Master Developer nor any of its Affiliates is in default on any obligation to repay borrowed money, which default is reasonably likely to materially and adversely affect the Master Developer’s ability to develop the Property as described in the Preliminary Official Statement or to pay the Special Tax due with respect to the Property (to the extent the responsibility of the Master Developer) prior to delinquency.
6. Except as set forth in the Preliminary Official Statement, no action, suit, proceeding, inquiry, or investigation, at law or in equity, before or by any court, regulatory agency, public board or body is pending against the Master Developer (with proper service of process to the Master Developer having been accomplished) or, to the Actual Knowledge of the Undersigned, is pending against any Affiliate of the Master Developer (with proper service of process to such Affiliate having been accomplished) or to the Actual Knowledge of the Undersigned is overtly threatened in writing against the Master Developer or any such Affiliate which, if successful, is reasonably likely to materially and adversely affect the Master Developer’s ability to develop the Property as described in the Preliminary Official Statement or to pay the Special Tax (to the extent the responsibility of the Master Developer) prior to delinquency.
7. As of the date thereof, to the Actual Knowledge of the Undersigned, the Preliminary Official Statement, solely with respect to information contained therein with respect to the Master Developer, its Affiliates, ownership of the Property, the Master Developer’s development plan, the Master Developer’s financing plan, the Master Developer’s lenders, if any, and contractual arrangements of the Master Developer or any Affiliate of the Master Developer (including, if material to the Master Developer’s development plan or the Master Developer’s financing plan, other
of Representations. The undersigned have not conducted any extraordinary inspection or inquiry other than such inspections or inquiries as are prudent and customary in connection with the ordinary course of the Master Developer’s current business and operations. Officers and employees no longer working for the Master Developer or its Affiliates have not been contacted. 2 “Affiliate” means, with respect to the Master Developer, any other Person: (i) who directly, or indirectly through one or more intermediaries, is currently controlling, controlled by, or under common control with the Master Developer; and (ii) for whom information, including financial information or operating data, concerning such Person is material to potential investors in their evaluation of the Property and investment decision regarding the Bonds (i.e., information relevant to: (a) the Master Developer’s development plans with respect to the Property and ability to pay the Special Tax on the Property prior to delinquency; or (b) such Person’s assets or funds that would materially affect the Master Developer’s ability to develop the Property as described in the Preliminary Official Statement or to pay the Special Tax on the Property prior to delinquency). “Person” means an individual, a corporation, a partnership, a limited liability company, an association, a joint stock company, a trust, any unincorporated organization, or a government or political subdivision thereof. For purposes hereof, the term “control” (including the terms “controlling,” “controlled by” or “under common control with”) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.
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loans of such Affiliates) as set forth under the captions entitled “IMPROVEMENT AREA NO. 2 PLANNED DEVELOPMENT”, “THE MASTER DEVELOPER”, “SPECIAL RISK FACTORS— Property Values and Property Development—Endangered and Threatened Species” and “CONTINUING DISCLOSURE—The Merchant Builders—Master Developer Continuing Disclosure Compliance” (excluding therefrom, in each case, information which is identified as having been provided by a source other than the Master Developer), is true and correct in all material respects and does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
8. The Master Developer covenants that, while the Bonds or any refunding obligations related thereto are outstanding, the Master Developer and its Affiliates which it controls will not bring any action, suit, proceeding, inquiry or investigation, at law or in equity, before any court, regulatory agency, public board or body that in any way seeks to challenge or overturn the formation of the District, to challenge the adoption of the ordinance of the City levying the Special Tax within the District, to invalidate the District or any of the Bonds or any refunding bonds related thereto, or to invalidate the special tax liens imposed under Section 3115.5 of the Streets and Highways Code based on recordation of the notice of special tax lien relating thereto. The foregoing covenant shall not prevent the Master Developer or any Affiliate in any way from bringing any other action, suit, proceeding, inquiry or investigation, at law or in equity, before any court, regulatory agency, public board or body including, without limitation, (a) an action or suit contending that the Special Tax has not been levied in accordance with the methodologies contained in the District’s Rate, Method of Apportionment, and Manner of Collection of Special Tax pursuant to which the Special Tax is levied, (b) an action or suit with respect to the application or use of the Special Tax levied and collected, (c) an action or suit to enforce the obligations of the City and/or the District under the Formation Documents, the District Documents, or any other agreements among the Master Developer or its Affiliates, the City, and/or the District or to which the Master Developer or its Affiliates is a party or beneficiary (including, but not limited to, the Fiscal Agent Agreement).
9. Except as disclosed in the Preliminary Official Statement or as a matter of public record (including, without limitation, liens for ad valorem tax obligations), to the Actual Knowledge of the Undersigned, no public debt secured by a tax or assessment on the Property exists or is in the process of being authorized that would include any portion of the Property.
10. To the Actual Knowledge of the Undersigned, the Master Developer has not been delinquent to any material extent in the payment of any ad valorem property tax, special assessment or special tax on property owned by the Master Developer during the period of its ownership included within the boundaries of a community facilities district or an assessment district within California within the last five (5) years that (a) caused a draw on a reserve fund relating to such assessment district or community facilities district financing or (b) resulted in a foreclosure action being commenced in a court of law against the Master Developer.
11. The Master Developer intends to comply with the provision of the Mello-Roos Community Facilities District Act of 1982, as amended relating to the Notice of Special Tax described in Government Code Section 53341.5 in connection with the sale of the Property, or portions thereof.
12. To the Actual Knowledge of the Undersigned, the Master Developer is able to pay its bills as they become due and no legal proceedings are pending against the Master Developer (with D-4
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proper service of process to the Master Developer having been accomplished) or, to the Actual Knowledge of the Undersigned, overtly threatened in writing in which the Master Developer may be adjudicated as bankrupt or discharged from any and all of its debts or obligations, or granted an extension of time to pay its debts or obligations, or be allowed to reorganize or readjust its debts, or be subject to control or supervision of the Federal Deposit Insurance Corporation.
13. Based upon its current development plans, including, without limitation, its current budget, and subject to economic conditions and risks generally inherent in the development of real property, many of which are beyond the control of the Master Developer, and except as disclosed in the Preliminary Official Statement including in the sections entitled “IMPROVEMENT AREA NO. 2 PLANNED DEVELOPMENT” and “THE MASTER DEVELOPER,” the Master Developer currently expects that it will have sufficient funds and/or sources of funds to develop the Property as described in the Preliminary Official Statement and to pay the Special Tax (to the extent the responsibility of the Master Developer) levied against the Property prior to delinquency. The Master Developer reserves the right to change its development plan and financing plan for the Property at any time without notice.
14. Solely as to the limited information described in Paragraph 7 above (and subject to the limitations and exclusions set forth in Paragraph 7), the Master Developer agrees to indemnify and hold harmless, to the extent permitted by law, the City, the District, and their officials and employees, and each Person, if any (each, an “Indemnified Party” and together, the “Indemnified Parties”), who controls any of the foregoing within the meaning of Section 15 of the Securities Act of 1933, as amended, or of Section 20 of the Securities Exchange Act of 1934, as amended, against all claims, damages, or liabilities (collectively, “Claims”) incurred by an Indemnified Party under any statute or at law or in equity, to the extent that such Claims arise from an untrue statement by the Master Developer of a material fact contained in the information described in Paragraph 7 above (and subject to the limitations and exclusions set forth in Paragraph 7), as of the date of the Preliminary Official Statement, or the omission by the Master Developer to state in the Preliminary Official Statement, as of its date, a material fact necessary to make the statements made by the Master Developer contained therein, in light of the circumstances under which they were made not misleading. This indemnity provision shall not be construed as a limitation on any other liability which the Master Developer may otherwise have to any Indemnified Party, provided that in no event shall the Master Developer be obligated for double indemnification. Further, in no event shall the Master Developer’s liability under this indemnification provision extend to any claims, damages, liability, losses or costs arising out of or related to the negligence or willful misconduct of an Indemnified Party.
In the event that a covered Claim is brought against any Indemnified Party, such Indemnified Party shall promptly notify the Master Developer in writing; provided that the failure to notify the Master Developer shall not relieve it from any liability that it may have hereunder except to the extent that it has been materially prejudiced (through the forfeiture of substantive rights or defenses) by such failure; and provided, further, that the failure to notify the Master Developer shall not relieve it from any liability that it may have to an Indemnified Party otherwise than under the above paragraph unless such liability was also conditioned upon such notice. If any proceeding shall be brought or asserted against an Indemnified Party upon a covered Claim, and it shall have notified the Master Developer thereof, the Master Developer shall retain counsel reasonably satisfactory to the Indemnified Party (who may be counsel to the Master Developer) to represent the Indemnified Party in such proceeding regarding the covered Claim and shall pay the fees and expenses of such counsel solely with respect to such proceeding, as incurred. Any Indemnified Party shall have the right to retain its own counsel in such D-5
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proceeding, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party unless (i) the Master Developer and the Indemnified Party shall have mutually agreed to the contrary; (ii) the Master Developer has failed within a reasonable time to retain counsel reasonably satisfactory to the Indemnified Party; (iii) the Indemnified Party shall have reasonably concluded that there may be legal defenses available to it that are different from or in addition to those available to the Master Developer such that a material conflict of interest exists for such counsel; or (iv) the named parties in any such proceeding (including any impleaded parties) include both the Master Developer and the Indemnified Party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interest between them. It is understood and agreed that the Master Developer shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all Indemnified Parties, and that all such fees and expenses, to the extent reasonable, shall be paid or reimbursed as they are incurred. Any such separate firm shall be designated in writing by such Indemnified Parties. The Master Developer shall not be liable for any settlement of any proceeding effected without its written consent. The Master Developer shall not, without the written consent of the Indemnified Party, effect any settlement of any pending or threatened proceeding upon a covered Claim in respect of which any Indemnified Party is a party, unless such settlement (x) includes an unconditional release of such Indemnified Party, in form and substance reasonably satisfactory to such Indemnified Party, from all liability on claims that are the subject matter of such proceeding and (y) does not include any statement as to or any admission of fault, culpability or a failure to act by or on behalf of any Indemnified Party.
15. If, between the date hereof and the Closing Date, to the Actual Knowledge of the Undersigned, any event relating to or affecting the Master Developer, its Affiliates, ownership of the Property, the Master Developer’s development plan, the Master Developer’s financing plan, the Master Developer’s lenders, if any, and contractual arrangements of the Master Developer or any Affiliate of the Master Developer (including, if material to the Master Developer’s development plan or the Master Developer’s financing plan, other loans of such Affiliates) shall occur which the undersigned believe would cause the information under the sections of the Preliminary Official Statement indicated in Paragraph 7 hereof (and subject to the limitations and exclusions set forth in Paragraph 7), to contain an untrue statement of a material fact or to omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, the undersigned shall notify the City and the Underwriter and if in the opinion of counsel to the City or the Underwriter, such event requires the preparation and publication of a supplement or amendment to the Preliminary Official Statement, the Master Developer shall reasonably cooperate with the City in the preparation of an amendment or supplement to the Preliminary Official Statement in form and substance reasonably satisfactory to counsel to the City and to the Underwriter.
16. On behalf of the Master Developer, we have reviewed the contents of this Certificate and have met with counsel to the Master Developer for the purpose of discussing the meaning of its contents.
The undersigned have executed this Letter of Representations solely in their capacity as authorized representatives of the Master Developer and they will have no personal liability arising from or relating to this Letter of Representations.
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ANTHEM UNITED CREEKVIEW DEVELOPMENTS
LIMITED PARTNERSHIP,
a Washington limited partnership
By: Anthem United Creekview Management, LLC,
a Washington limited liability company,
its General Partner
By: _____________________________
Name: ___________________________
Title: ____________________________
By: _____________________________
Name: ___________________________
Title: ____________________________
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EXHIBIT E
CITY OF ROSEVILLE
CREEKVIEW COMMUNITY FACILITIES DISTRICT NO. 1 (PUBLIC FACILITIES) IMPROVEMENT AREA NO. 2
SPECIAL TAX BONDS
SERIES 2023
CLOSING CERTIFICATE OF ANTHEM UNITED CREEKVIEW DEVELOPMENTS
LIMITED PARTNERSHIP
Dated: _____, 2023
In connection with the issuance and sale of the above-captioned bonds (the “Bonds”), and pursuant to Section 4(d)(11) of the Bond Purchase Agreement (the “Bond Purchase Agreement”) to be executed by and between City of Roseville, California (the “City”), for and on behalf of the City of Roseville Creekview Community Facilities District No. 1 (Public Facilities) (the “District”), and Piper Sandler & Co. (the “Underwriter”), Anthem United Creekview Developments Limited Partnership, a Washington limited partnership (the “Master Developer”), hereby represents, warrants and covenants to the City, the District and the Underwriter as of the date hereof. Capitalized terms used herein that are not defined herein shall have the meanings ascribed to such terms in the Letter of Representations of Anthem United Creekview Developments Limited Partnership, dated _____, 2023 (the “Letter of Representations”), delivered by the Master Developer. (1) The undersigned are duly authorized to execute this Closing Certificate of Anthem United Creekview Developments Limited Partnership (the “Closing Certificate”) on behalf of the Master Developer.
(2) The Master Developer is duly authorized to execute, deliver and perform its Master Developer Continuing Disclosure Certificate.
(3) The Master Developer has duly executed and delivered the Master Developer Continuing Disclosure Certificate.
(4) Except as disclosed in the final Official Statement relating to the Bonds (the “Final Official Statement”), to the Actual Knowledge of the Undersigned, no event has occurred since the date of the Preliminary Official Statement which has materially and adversely affected or is reasonably expected to materially and adversely affect the business, properties, operations or financial condition of the Master Developer. (5) The representations and warranties made by the Master Developer in the Letter of Representations are true and correct in all material respects on and as of the date hereof, with the same effect as if made on the date hereof, except that all references to the Preliminary Official Statement in the Letter of Representations shall be deemed references to the Final Official Statement.
(6) For the period through 25 days after the “end of the underwriting period” as defined in the Bond Purchase Agreement to mean the Closing Date, if any event relating to or E-2
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affecting the Master Developer, its Affiliates, ownership of the Property, the Master Developer’s development plan, the Master Developer’s financing plan, the Master Developer’s lenders, if any, and contractual arrangements of the Master Developer or any Affiliates of the Master Developer (including, if material to the Master Developer’s development plan or the Master Developer’s financing plan, other loans of such Affiliates) shall occur as a result of which it is necessary, in the opinion of the Underwriter or counsel to the City, to amend or supplement the Official Statement in order to make the information under the sections of the Preliminary Official Statement indicated in Paragraph 7 of the Letter of Representations (and subject to the limitations and exclusions set forth in Paragraph 7 of the Letter of Representations) not misleading in the light of the circumstances existing at the time it is delivered to a purchaser, the Master Developer shall reasonably cooperate with the City and the Underwriter in the preparation of an amendment or supplement to the Official Statement in form and substance reasonably satisfactory to the Underwriter and Disclosure Counsel which will amend or supplement the Official Statement so that it will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing at the time the Official Statement is delivered to a purchaser, not misleading.
The undersigned have executed this Closing Certificate solely in their capacity as authorized representatives of the Master Developer and they will have no personal liability arising from or relating to this Closing Certificate.
ANTHEM UNITED CREEKVIEW DEVELOPMENTS
LIMITED PARTNERSHIP,
a Washington limited partnership
By: Anthem United Creekview Management, LLC,
a Washington limited liability company,
its General Partner
By: _____________________________
Name: ___________________________
Title: ____________________________
By: _____________________________
Name: ___________________________
Title: ____________________________
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EXHIBIT F
CITY OF ROSEVILLE
CREEKVIEW COMMUNITY FACILITIES DISTRICT NO. 1 (PUBLIC FACILITIES) IMPROVEMENT AREA NO. 2
SPECIAL TAX BONDS
SERIES 2023
FORM OF NEGATIVE ASSURANCE LETTER FROM COUNSEL TO THE MASTER
DEVELOPER
_____, 2023
City of Roseville Creekview Community
Facilities District No. 1 (Public Facilities)
311 Vernon Street
Roseville, California 95678
Piper Sandler & Co.
3626 Fair Oaks Blvd., Suite 100
Sacramento, California 95864
Re: $__________ City of Roseville Creekview Community Facilities District No. 1 (Public Facilities), Improvement Area No. 2, Special Tax Bonds, Series 2023 Ladies and Gentlemen:
We have acted as special counsel to Anthem United Creekview Developments Limited Partnership, a Washington limited partnership (the “Master Developer”), in connection with the development of certain property owned by the Master Developer (the “Property”) located within the boundaries of Improvement Area No. 2 of the City of Roseville Creekview Community Facilities District No. 1 (Public Facilities) (the “District”) and in connection with the issuance by the District of the City of Roseville Creekview Community Facilities District No. 1 (Public Facilities), Improvement Area No. 2, Special Tax Bonds, Series 2023 (the “Bonds”). The Bonds are described in that certain Official Statement dated _____, 2023 (the “Official Statement”).
The Bonds are being sold to Piper Sandler & Co., as underwriter (the “Underwriter”), pursuant to that certain Bond Purchase Agreement, dated _____, 2023 (the “Bond Purchase Agreement”), by and between the Underwriter and the City of Roseville (the “City”) on behalf of the District. This letter is provided for the benefit of the District and the Underwriter pursuant to Section 4(d)(13) of the Bond Purchase Agreement.
We advise you that we are not general counsel to the Master Developer and do not represent the Master Developer on a continuing basis. Rather, we represent the Master Developer as requested from time to time on specific matters.
The primary purpose of our professional engagement was not to establish or confirm factual matters or quantitative information. We are not passing upon and do not assume any responsibility F-2
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for the accuracy, completeness, or fairness of any of the statements contained in the Official Statement and make no representation that we have independently verified the accuracy, completeness, or fairness of any such statements. However, in our capacity as special counsel to the Master Developer, we reviewed those sections of the Official Statement described below and we participated in conferences with representatives of the Master Developer, the Underwriter, Jones Hall, as Bond and Disclosure Counsel, Stradling Yocca Carlson & Rauth, as Underwriter's Counsel, and others, during which conferences the contents of the Official Statement and related matters were discussed. We have reviewed only the electronic version of the Official Statement delivered to Robert M. Haight, Jr. ([email protected]) on __________, 2023, from _________ (the “Official Electronic Version”), and we assume that any printed version and all other electronic versions of the Official Statement are identical in all respects to such Official Electronic Version.
Our statements herein with respect to the Official Statement do not pertain to any printed or electronic version of the Official Statement that is not identical in all respects to the Official Electronic Version. We also reviewed certain written statements of officers and other representatives of the Master Developer and others as to the existence and consequence of certain factual and other matters.
Based on our participation, review, and reliance as described above, we advise you that no information came to the attention of the lawyers in our firm rendering legal services in connection with such representation that caused us to believe that, as of the date of the Official Statement and as of the date hereof, the statements contained in the Official Statement relating to the Master Developer and its Affiliates (as defined in the Letter of Representations of Anthem Creek United Developments Limited Partnership, dated _____, 2023), ownership of the Property, the Master Developer’s development plan, the Master Developer’s financing plan, the Master Developer’s lenders, if any, and contractual arrangements of the Master Developer or any Affiliate of the Master Developer (including, if material to the Master Developer’s development plan or the Master Developer’s financing plan, other loans of such Affiliates) as set forth under the captions entitled “IMPROVEMENT AREA NO. 2 PLANNED DEVELOPMENT”, “THE MASTER DEVELOPER”, “SPECIAL RISK FACTORS—Property Values and Property Development—Endangered and Threatened Species” and “CONTINUING DISCLOSURE—The Merchant Builders—Master Developer Continuing Disclosure Compliance” (but, under all captions, excluding any information cited as coming from a source other than the Master Developer, and excluding any information regarding any appraisal, any absorption study, and market value ratio and annual special tax ratio, and except that no belief or view is expressed as to (a) any financial statements and other financial, statistical, economic, demographic, or engineering data or forecasts, numbers, charts, tables, graphs, estimates, projections, assumptions, or expressions of opinion, or (b) any information about valuation, appraisals, market absorption, archaeological, or environmental matters), contained or contains any untrue statement of a material fact or omitted or omits a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. For purposes of this paragraph, “attention” refers to the conscious awareness of each of the lawyers in our firm who actively participated in rendering legal services in connection with such representation and “believe” refers to the actual, subjective, good faith belief of each of those lawyers. Please be advised that only Robert M. Haight, Jr. has rendered such legal services in connection with such representation.
We express no view or belief as to the applicability or effect on the subject transaction of the securities laws of the State of California or of the United States of America, including but not limited to the Securities Act of 1933, as amended.
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No attorney-client relationship has existed or exists between our firm and the City, the District, or the Underwriter in connection with the Bonds or by virtue of this letter. This letter is delivered as of the date hereof and is furnished solely for the benefit of the addressees in connection with the subject transaction and may not be relied upon for any other purpose or furnished to, used, circulated, quoted, or referred to by any other person without our prior written consent. This letter is not intended to, and may not, be relied upon by any owners of the Bonds.
Our engagement with respect to this matter has terminated as of the date hereof, and we do not undertake to advise you of any matters that may come to our attention subsequent to the date hereof that may affect the statements set forth herein.
This letter is limited to the matters expressly set forth herein, and no belief or assurance is implied or may be inferred beyond the matters expressly stated herein.
Sincerely yours,
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EXHIBIT G
CITY OF ROSEVILLE
CREEKVIEW COMMUNITY FACILITIES DISTRICT NO. 1 (PUBLIC FACILITIES) IMPROVEMENT AREA NO. 2
SPECIAL TAX BONDS
SERIES 2023
LETTER OF REPRESENTATIONS OF [___________]
_____, 2023
In connection with the issuance and sale of the above-captioned bonds (the “Bonds”), and pursuant to Section 4(d)(14) of the Bond Purchase Agreement (the “Bond Purchase Agreement”) to be executed by and between City of Roseville, California (the “City”), for and on behalf of the City of Roseville Creekview Community Facilities District No. 1 (Public Facilities) (the “District”), and Piper Sandler & Co. (the “Underwriter”), [__________], a [__________] (the “Builder”), hereby represents, warrants and covenants to the City, the District and the Underwriter as of the date hereof as set forth herein. Unless otherwise indicated, capitalized terms used herein and not defined have the meaning given to them in the Bond Purchase Agreement.
1. The Builder is duly organized and validly existing under the laws of the State of [__________] and has all requisite right, power, and authority to: (i) execute and deliver this Letter of Representations (the “Letter of Representations”) and a Builder Continuing Disclosure Certificate; and (ii) undertake all of the transactions on its part described in the Preliminary Official Statement.
2. As set forth in the Preliminary Official Statement, certain of the property within Improvement Area No. 2 of the District is held in the name of the Builder [or Winding Creek C-21 – Roseville, a California limited partnership] (herein, the “Property”). The undersigned, on behalf of the Builder, make the representations herein with respect to all such Property.
3. The Builder has, or will have prior to the Closing, duly authorized the execution and delivery of a Builder Continuing Disclosure Certificate at the Closing and the performance by the Builder of its obligations thereunder.
4. Except as disclosed in the Preliminary Official Statement, to the Actual Knowledge of the Undersigned,1(a) the Builder and its Affiliates,2are not in breach of or in default under any
1 “Actual Knowledge of the Undersigned” means the knowledge that the individuals signing on behalf of the Builder currently have as of the date of this Letter of Representations or have obtained through: (i) interviews with such current officers and responsible employees of the Builder and its Affiliates as the undersigned have determined are reasonably likely, in the ordinary course of their respective duties, to have knowledge of the matters that are set forth in this Letter of Representations; and/or (ii) review of documents that were reasonably available to the undersigned and which the undersigned have reasonably deemed necessary in order for the undersigned to obtain knowledge of the matters that are set forth in this Letter of Representations. The undersigned have not conducted any extraordinary inspection or inquiry other than such inspections or inquiries as are prudent and customary in connection with the ordinary course of the Builder’s current business and operations. Officers and employees no longer working for the Builder or its Affiliates have not been contacted.
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applicable judgment or decree or any loan agreement, option agreement, development agreement, indenture, bond, or note (collectively, the “Material Agreements”) to which the Builder or its Affiliates are a party or otherwise subject, which breach or default could reasonably be expected to materially and adversely affect the Builder’s ability to develop the Property as described in the Preliminary Official Statement or to pay the Special Tax due with respect to the Property (to the extent the responsibility of the Builder) prior to delinquency and (b) no event has occurred and is continuing that with the passage of time or giving of notice, or both, would constitute such a breach or default.
5. Except as described in the Preliminary Official Statement, there is no material indebtedness of the Builder or its Affiliates that is secured by an interest in the Property. To the Actual Knowledge of the Undersigned, neither the Builder nor any of its Affiliates is in default on any obligation to repay borrowed money, which default is reasonably likely to materially and adversely affect the Builder’s ability to develop the Property as described in the Preliminary Official Statement or to pay the Special Tax due with respect to the Property (to the extent the responsibility of the Builder) prior to delinquency.
6. Except as set forth in the Preliminary Official Statement, no action, suit, proceeding, inquiry, or investigation, at law or in equity, before or by any court, regulatory agency, public board or body is pending against the Builder (with proper service of process to the Builder having been accomplished) or, to the Actual Knowledge of the Undersigned, is pending against any Affiliate of the Builder (with proper service of process to such Affiliate having been accomplished) or to the Actual Knowledge of the Undersigned is overtly threatened in writing against the Builder or any such Affiliate which, if successful, is reasonably likely to materially and adversely affect the Builder’s ability to develop the Property as described in the Preliminary Official Statement or to pay the Special Tax (to the extent the responsibility of the Builder) prior to delinquency.
7. As of the date thereof, to the Actual Knowledge of the Undersigned, the Preliminary Official Statement, solely with respect to information contained therein with respect to the Builder, its Affiliates, ownership of the Property, the Builder’s development plan, the Builder’s financing plan, the Builder’s lenders, if any, and contractual arrangements of the Builder or any Affiliate of the Builder (including, if material to the Builder’s development plan or the Builder’s financing plan, other loans of such Affiliates) as set forth under the captions entitled “MERCHANT BUILDER INFORMATION—[__________]” and “CONTINUING DISCLOSURE—The Merchant Builders— [___________]” (excluding therefrom, in each case, information which is identified as having been provided by a source other than the Builder), is true and correct in all material respects and does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
2 “Affiliate” means, with respect to the Builder, any other Person: (i) who directly, or indirectly through one or more intermediaries, is currently controlling, controlled by, or under common control with the Builder; and (ii) for whom information, including financial information or operating data, concerning such Person is material to potential investors in their evaluation of the Property and investment decision regarding the Bonds (i.e., information relevant to: (a) the Builder’s development plans with respect to the Property and ability to pay the Special Tax on the Property prior to delinquency; or (b) such Person’s assets or funds that would materially affect the Builder’s ability to develop the Property as described in the Preliminary Official Statement or to pay the Special Tax on the Property prior to delinquency). “Person” means an individual, a corporation, a partnership, a limited liability company, an association, a joint stock company, a trust, any unincorporated organization, or a government or political subdivision thereof. For purposes hereof, the term “control” (including the terms “controlling,” “controlled by” or “under common control with”) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.
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8. The Builder covenants that, while the Bonds or any refunding obligations related thereto are outstanding, the Builder and its Affiliates which it controls will not bring any action, suit, proceeding, inquiry or investigation, at law or in equity, before any court, regulatory agency, public board or body that in any way seeks to challenge or overturn the formation of the District, to challenge the adoption of the ordinance of the City levying the Special Tax within the District, to invalidate the District or any of the Bonds or any refunding bonds related thereto, or to invalidate the special tax liens imposed under Section 3115.5 of the Streets and Highways Code based on recordation of the notice of special tax lien relating thereto. The foregoing covenant shall not prevent the Builder or any Affiliate in any way from bringing any other action, suit, proceeding, inquiry or investigation, at law or in equity, before any court, regulatory agency, public board or body including, without limitation, (a) an action or suit contending that the Special Tax has not been levied in accordance with the methodologies contained in the District’s Rate, Method of Apportionment, and Manner of Collection of Special Tax pursuant to which the Special Tax is levied, (b) an action or suit with respect to the application or use of the Special Tax levied and collected, (c) an action or suit to enforce the obligations of the City and/or the District under the Formation Documents, the District Documents, or any other agreements among the Builder or its Affiliates, the City, and/or the District or to which the Builder or its Affiliates is a party or beneficiary (including, but not limited to, the Fiscal Agent Agreement).
9. Except as disclosed in the Preliminary Official Statement or as a matter of public record (including, without limitation, liens for ad valorem tax obligations), to the Actual Knowledge of the Undersigned, no public debt secured by a tax or assessment on the Property exists or is in the process of being authorized that would include any portion of the Property.
10. To the Actual Knowledge of the Undersigned, the Builder has not been delinquent to any material extent in the payment of any ad valorem property tax, special assessment or special tax on property owned by the Builder during the period of its ownership included within the boundaries of a community facilities district or an assessment district within California within the last five (5) years that (a) caused a draw on a reserve fund relating to such assessment district or community facilities district financing or (b) resulted in a foreclosure action being commenced in a court of law against the Builder.
11. The Builder intends to comply with the provision of the Mello-Roos Community Facilities District Act of 1982, as amended relating to the Notice of Special Tax described in Government Code Section 53341.5 in connection with the sale of the Property, or portions thereof.
12. To the Actual Knowledge of the Undersigned, the Builder is able to pay its bills as they become due and no legal proceedings are pending against the Builder (with proper service of process to the Builder having been accomplished) or, to the Actual Knowledge of the Undersigned, overtly threatened in writing in which the Builder may be adjudicated as bankrupt or discharged from any and all of its debts or obligations, or granted an extension of time to pay its debts or obligations, or be allowed to reorganize or readjust its debts, or be subject to control or supervision of the Federal Deposit Insurance Corporation.
13. Based upon its current development plans, including, without limitation, its current budget, and subject to economic conditions and risks generally inherent in the development of real property, many of which are beyond the control of the Builder, and except as disclosed in the Preliminary Official Statement including in the sections entitled “MERCHANT BUILDER INFORMATION—[__________],” the Builder currently expects that it will have sufficient funds G-4
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and/or sources of funds to develop the Property as described in the Preliminary Official Statement and to pay the Special Tax (to the extent the responsibility of the Builder) levied against the Property prior to delinquency. The Builder reserves the right to change its development plan and financing plan for the Property at any time without notice.
14. Solely as to the limited information described in Paragraph 7 above (and subject to the limitations and exclusions set forth in Paragraph 7), the Builder agrees to indemnify and hold harmless, to the extent permitted by law, the City, the District, and their officials and employees, and each Person, if any (each, an “Indemnified Party” and together, the “Indemnified Parties”), who controls any of the foregoing within the meaning of Section 15 of the Securities Act of 1933, as amended, or of Section 20 of the Securities Exchange Act of 1934, as amended, against all claims, damages, or liabilities (collectively, “Claims”) incurred by an Indemnified Party under any statute or at law or in equity, to the extent that such Claims arise from an untrue statement by the Builder of a material fact contained in the information described in Paragraph 7 above (and subject to the limitations and exclusions set forth in Paragraph 7), as of the date of the Preliminary Official Statement, or the omission by the Builder to state in the Preliminary Official Statement, as of its date, a material fact necessary to make the statements made by the Builder contained therein, in light of the circumstances under which they were made not misleading. This indemnity provision shall not be construed as a limitation on any other liability which the Builder may otherwise have to any Indemnified Party, provided that in no event shall the Builder be obligated for double indemnification. Further, in no event shall the Builder’s liability under this indemnification provision extend to any claims, damages, liability, losses or costs arising out of or related to the negligence or willful misconduct of an Indemnified Party.
In the event that a covered Claim is brought against any Indemnified Party, such Indemnified Party shall promptly notify the Builder in writing; provided that the failure to notify the Builder shall not relieve it from any liability that it may have hereunder except to the extent that it has been materially prejudiced (through the forfeiture of substantive rights or defenses) by such failure; and provided, further, that the failure to notify the Builder shall not relieve it from any liability that it may have to an Indemnified Party otherwise than under the above paragraph unless such liability was also conditioned upon such notice. If any proceeding shall be brought or asserted against an Indemnified Party upon a covered Claim, and it shall have notified the Builder thereof, the Builder shall retain counsel reasonably satisfactory to the Indemnified Party (who may be counsel to the Builder) to represent the Indemnified Party in such proceeding regarding the covered Claim and shall pay the fees and expenses of such counsel solely with respect to such proceeding, as incurred. Any Indemnified Party shall have the right to retain its own counsel in such proceeding, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party unless (i) the Builder and the Indemnified Party shall have mutually agreed to the contrary; (ii) the Builder has failed within a reasonable time to retain counsel reasonably satisfactory to the Indemnified Party; (iii) the Indemnified Party shall have reasonably concluded that there may be legal defenses available to it that are different from or in addition to those available to the Builder such that a material conflict of interest exists for such counsel; or (iv) the named parties in any such proceeding (including any impleaded parties) include both the Builder and the Indemnified Party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interest between them. It is understood and agreed that the Builder shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all Indemnified Parties, and that all such fees and expenses, to the extent reasonable, shall be paid or reimbursed as they are incurred. Any such separate firm shall be designated in writing by such Indemnified Parties. The Builder shall not be liable for any settlement G-5
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of any proceeding effected without its written consent. The Builder shall not, without the written consent of the Indemnified Party, effect any settlement of any pending or threatened proceeding upon a covered Claim in respect of which any Indemnified Party is a party, unless such settlement (x) includes an unconditional release of such Indemnified Party, in form and substance reasonably satisfactory to such Indemnified Party, from all liability on claims that are the subject matter of such proceeding and (y) does not include any statement as to or any admission of fault, culpability or a failure to act by or on behalf of any Indemnified Party.
15. If, between the date hereof and the Closing Date, to the Actual Knowledge of the Undersigned, any event relating to or affecting the Builder, its Affiliates, ownership of the Property, the Builder’s development plan, the Builder’s financing plan, the Builder’s lenders, if any, and contractual arrangements of the Builder or any Affiliate of the Builder (including, if material to the Builder’s development plan or the Builder’s financing plan, other loans of such Affiliates) shall occur which the undersigned believe would cause the information under the sections of the Preliminary Official Statement indicated in Paragraph 7 hereof (and subject to the limitations and exclusions set forth in Paragraph 7), to contain an untrue statement of a material fact or to omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, the undersigned shall notify the City and the Underwriter and if in the opinion of counsel to the City or the Underwriter, such event requires the preparation and publication of a supplement or amendment to the Preliminary Official Statement, the Builder shall reasonably cooperate with the City in the preparation of an amendment or supplement to the Preliminary Official Statement in form and substance reasonably satisfactory to counsel to the City and to the Underwriter.
16. On behalf of the Builder, we have reviewed the contents of this Certificate and have met with counsel to the Builder for the purpose of discussing the meaning of its contents.
The undersigned have executed this Letter of Representations solely in their capacity as authorized representatives of the Builder and they will have no personal liability arising from or relating to this Letter of Representations.
[__________, a __________]
By: _____________________________
Name: ___________________________
Title: ____________________________
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EXHIBIT H
CITY OF ROSEVILLE
CREEKVIEW COMMUNITY FACILITIES DISTRICT NO. 1 (PUBLIC FACILITIES) IMPROVEMENT AREA NO. 2
SPECIAL TAX BONDS
SERIES 2023
CLOSING CERTIFICATE OF [___________]
Dated: _____, 2023
In connection with the issuance and sale of the above-captioned bonds (the “Bonds”), and pursuant to Section 4(d)(15) of the Bond Purchase Agreement (the “Bond Purchase Agreement”) to be executed by and between City of Roseville, California (the “City”), for and on behalf of the City of Roseville Creekview Community Facilities District No. 1 (Public Facilities) (the “District”), and Piper Sandler & Co. (the “Underwriter”), [__________], a [__________] (the “Builder”), hereby represents, warrants and covenants to the City, the District and the Underwriter as of the date hereof.
Capitalized terms used herein that are not defined herein shall have the meanings ascribed to such terms in the Letter of Representations executed by the Builder and dated _____, 2023 (the “Letter of Representations”), delivered by the Builder.
(1) The undersigned are duly authorized to execute this Closing Certificate (the “Closing Certificate”) on behalf of the Builder.
(2) The Builder is duly authorized to execute, deliver and perform its obligations under a Builder Continuing Disclosure Certificate.
(3) The Builder has duly executed and delivered the Builder Continuing Disclosure Certificate.
(4) Except as disclosed in the final Official Statement relating to the Bonds (the “Final Official Statement”), to the Actual Knowledge of the Undersigned, no event has occurred since the date of the Preliminary Official Statement which has materially and adversely affected or is reasonably expected to materially and adversely affect the business, properties, operations or financial condition of the Builder. (5) The representations and warranties made by the Builder in the Letter of Representations are true and correct in all material respects on and as of the date hereof, with the same effect as if made on the date hereof, except that all references to the Preliminary Official Statement in the Letter of Representations shall be deemed references to the Final Official Statement.
(6) For the period through 25 days after the “end of the underwriting period” as defined in the Bond Purchase Agreement to mean the Closing Date, if any event relating to or affecting the Builder, its Affiliates, ownership of the Property, the Builder’s development plan, the Builder’s financing plan, the Builder’s lenders, if any, and contractual arrangements of the Builder or any Affiliates of the Builder (including, if material to the Builder’s H-2
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development plan or the Builder’s financing plan, other loans of such Affiliates) shall occur as a result of which it is necessary, in the opinion of the Underwriter or counsel to the City, to amend or supplement the Official Statement in order to make the information under the sections of the Preliminary Official Statement indicated in Paragraph 7 of the Letter of Representations (and subject to the limitations and exclusions set forth in Paragraph 7 of the Letter of Representations) not misleading in the light of the circumstances existing at the time it is delivered to a purchaser, the Builder shall reasonably cooperate with the City and the Underwriter in the preparation of an amendment or supplement to the Official Statement in form and substance reasonably satisfactory to the Underwriter and Disclosure Counsel which will amend or supplement the Official Statement so that it will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing at the time the Official Statement is delivered to a purchaser, not misleading.
The undersigned have executed this Closing Certificate solely in their capacity as authorized representatives of the Builder and they will have no personal liability arising from or relating to this Closing Certificate.
[__________, a __________]
By: _____________________________
Name: ___________________________
Title: ____________________________
COUNCIL COMMUNICATION
CC #: 2809
File #: 0206-03-01
Title:
The Ranch at Sierra Vista Community Facilities District No. 1, Series 2023 - Bond Issuance
Contact: Jeannine Thrash 916-774-5473 [email protected] Dennis Kauffman 916-774-5313 [email protected]
Meeting Date: 6/21/2023
Item #: 9.2.
RECOMMENDATION TO COUNCIL
Staff recommends that the City Council adopt a resolution authorizing the issuance of special tax bonds for and on behalf of the City of Roseville The Ranch at Sierra Vista Community Facilities District No. 1 (Public Facilities), approving and directing the execution of a supplemental agreement to fiscal agent agreement and bond purchase agreement, approving the form of the preliminary official statement, approving sale of such bonds, and approving other related documents and actions.
BACKGROUND
The Ranch at Sierra Vista CFD No. 1 was formed on January 16, 2019 by Council adoption of Resolution No. 19-30. On September 17, 2020, the first series of bonds were issued for $20,875,000; and then on December 21, 2021, the second series of bonds were issued in the amount of $13,290,000.
The 2023 bonds are being issued at the request of the developer for the District to: (i) construct and acquire certain public facilities of benefit to the District, (ii) provide for a deposit to a debt service reserve account for the 2023 bonds, (iii) provide capitalized interest for debt service due on the 2023 bonds, and (iv) pay costs of issuance of the 2023 bonds. The 2023 bonds are the third series of bonds to be issued for the District and have a not-to-exceed amount of $16,000,000. The maximum aggregate principal indebtedness for the district is not to exceed $210,000,000.
FISCAL IMPACT
The CFD will generate special taxes that will be paid by the property owners sufficient to pay the costs of the debt service, CFD administration, and any authorized pay-as-you-go facilities, as well as provide funding in the future for maintenance/replacement of constructed facilities. The issuance of these bonds will not impact the City's General Fund.
ENVIRONMENTAL REVIEW
The California Environmental Quality Act (CEQA) does not apply to activities that will not result in a direct or reasonably foreseeable indirect physical change in the environment, or is otherwise not considered a project as defined by CEQA Statute §21065 and CEQA State Guidelines §15060(c)(3) and §15378. Adoption of the resolution and approval of the other related documents described herein meet the above criteria and are not subject to CEQA. No additional environmental review is required.
COMPLIANCE STATEMENT
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 the City's municipal financial advisor, which has been represented by such party to have been provided in good faith: (1) estimated true interest costs of the Bonds: 5.77%; (2) estimated finance charge of the Bonds (sum of all fees and charges paid to third parties): $375,000; (3) estimated amount of proceeds of the Bonds received by the City (net of finance charges, reserves and capitalized interest, if any):
$12,626,665; and (4) estimated total payment amount (sum total of all 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: $33,154,917.
CITY COUNCIL STRATEGIC PLAN/OVERARCHING GOALS
Goal F - Invest in well-planned infrastructure and growth Respectfully Submitted,
Jeannine Thrash, Management Analyst
Dennis Kauffman, Assistant City Manager/Chief Financial Officer _____________________________
Dominick Casey, City Manager
ATTACHMENTS:
Description
Resolution 23-290
Preliminary Official Statement
Supplment No. 2 Fiscal Agent Agreement
Bond PurchaseAgreement
RESOLUTION NO. 23-290
A RESOLUTION AUTHORIZING THE ISSUANCE OF SPECIAL TAX BONDS
FOR AND ON BEHALF OF THE CITY OF ROSEVILLE THE RANCH AT SIERRA VISTA COMMUNITY FACILITIES DISTRICT NO. 1 (PUBLIC
FACILITIES), APPROVING AND DIRECTING THE EXECUTION OF A
SUPPLEMENTAL AGREEMENT TO FISCAL AGENT AGREEMENT AND
BOND PURCHASE AGREEMENT, APPROVING THE FORM OF
PRELIMINARY OFFICIAL STATEMENT, APPROVING SALE OF SUCH
BONDS, AND APPROVING OTHER RELATED DOCUMENTS AND ACTIONS WHEREAS, this City Council (the “Council”) of the City of Roseville (the “City”) has conducted proceedings under and pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, Chapter 2.5 of Part 1 of Division 2 of Title 5, commencing at Section 53311, of the California Government Code (the “Act”), to form City of Roseville The Ranch at Sierra Vista Community Facilities District No. 1 (Public Facilities) (the “District”), to authorize the levy of special taxes upon the land within the District, and to issue bonds secured by said special taxes for the purpose of providing moneys for the construction and acquisition of authorized improvements for the District; and
WHEREAS, the Council, as legislative body of the District, previously authorized the issuance of special tax bonds of the City for the District in the maximum aggregate principal amount of not to exceed $210,000,000 (the “Bond Authorization”); and WHEREAS, the City previously issued for and on behalf of the District, its City of Roseville The Ranch at Sierra Vista Community Facilities District No. 1 (Public Facilities) Special Tax Bonds, Series 2020 (the “2020 Bonds”) in the initial principal amount of $20,875,000 and its City of Roseville The Ranch at Sierra Vista Community Facilities District No. 1 (Public Facilities) Special Tax Bonds, Series 2021 (the “2021 Bonds”) in the initial principal amount of $13,290,000, which 2020 Bonds and 2021 Bonds constituted the first and second series of bonds issued pursuant to the Bond Authorization; and WHEREAS, City now desires to issue a third series of the special tax bonds pursuant to the Bond Authorization, as described in more detail herein (the “Bonds”); and WHEREAS, there has been submitted to the Council a Supplemental Agreement No. 2 to Fiscal Agent Agreement (the “Supplement No. 2”), which will supplement and amend the Fiscal Agent Agreement, dated as of September 1, 2020, as supplemented by a Supplemental Agreement No. 1 to Fiscal Agent Agreement dated as of December 1, 2021 (as so supplemented, the “Fiscal Agent Agreement”), between the City and U.S. Bank Trust Company, National Association, as successor fiscal agent, providing for the issuance of the Bonds of the City for the District, and the Council, with the aid of City staff, has reviewed the Supplement No. 2 and found it to be in proper order, and now desires to approve the Supplement No. 2 and the issuance of the Bonds; and
WHEREAS, the City proposes to sell the Bonds to Stifel Nicolaus & Company, Incorporated, as underwriter (the “Underwriter”), pursuant to the terms of a 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, and the Council, with the aid of City staff, has reviewed the Bond Purchase Agreement and the Preliminary - 2 -
Official Statement and found them to be in proper order, and now desires to approve said documents; and
WHEREAS, the information required to be obtained and disclosed with respect to the Bonds by the Council in accordance with Section 5852.1 of the California Government Code is set forth in the staff report accompanying this Resolution; and WHEREAS, all conditions, things and acts required to exist, to have happened and to have been performed precedent to and in the issuance of the Bonds as contemplated by this Resolution and the documents referred to herein exist, have happened and have been performed in due time, form and manner as required by the laws of the State of California, including the Act.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF ROSEVILLE RESOLVES AS FOLLOWS:
1. Findings. This Council finds and determines that it is prudent in the management and development of land in the City and the District to issue the Bonds, on a parity with the 2020 Bonds and 2021 Bonds, for the purpose of providing moneys for the construction and acquisition of authorized improvements for the District.
2. Law Applicable. For the purposes of these proceedings in and for the District, the Act shall be the authority for the issuance of the Bonds.
3. Bonds Authorized. Pursuant to the Act, this Resolution and the Fiscal Agent Agreement, special tax bonds of the City for the District designated as “City of Roseville The Ranch at Sierra Vista Community Facilities District No. 1 (Public Facilities) Special Tax Bonds Series 2023” in an aggregate principal amount not to exceed $16,000,000 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 not be issued unless the value of the real property within the District subject to the special tax to pay debt service on the Bonds, the 2020 Bonds and the 2021 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 three (3) times the proposed principal amount of the outstanding bonds plus the Bonds proposed to be issued and secured by a special tax levied pursuant to the Act on property within the District.
4. Supplement No. 2. The Council hereby approves the Supplement No. 2 in the form presented to the Council at this meeting. The City Manager, Assistant City Manager/Chief Financial Officer, and such other person or persons as either of them may designate (collectively, the “Authorized Officers”), each acting alone or together with any other Authorized Officer, are each hereby authorized and directed to execute the Supplement No. 2, 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 Jones Hall, A Professional Law Corporation, as bond counsel to the City (“Bond Counsel”). The proceeds of the Bonds shall be applied by the City for the purposes and in the amounts as set forth in the Supplement No. 2. The Council hereby authorizes the delivery and performance by the City of the Supplement No. 2 and the Fiscal Agent Agreement.
- 3 -
5. 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 interest or principal of the Bonds, said foreclosure action to be commenced and pursued as more completely set forth in the Fiscal Agent Agreement.
6. Approval of Official Statement and Continuing Disclosure Certificate. The Council hereby approves the Preliminary Official Statement with respect to the Bonds, in substantially the form on file with the City Clerk. Distribution of the Preliminary Official Statement by the City and the Underwriter is hereby approved, and, prior to the distribution of the Preliminary Official Statement, and each Authorized Officer, each acting alone or together with any other Authorized Officer, is authorized and directed, on behalf of the City, to deem the Preliminary Official Statement “final” pursuant to Rule 15c2-12 under the Securities Exchange Act of 1934 (the “Rule”). The execution of the final Official Statement, which shall include such changes and additions thereto deemed advisable by the Authorized Officer executing the same, and such information permitted to be excluded from the Preliminary Official Statement pursuant to the Rule, is hereby approved for delivery to the purchasers of the Bonds, and each Authorized Officer, each acting alone or together with any other Authorized Officer, is authorized and directed to execute and deliver the final Official Statement for and on behalf of the City, with final pricing information included and with such changes and additions thereto deemed advisable by the Authorized Officer executing the same.
The Council hereby approves the Continuing Disclosure Certificate to be executed by the City, the form of which is attached as an exhibit to the Preliminary Official Statement. Each of the Authorized Officers is hereby authorized and directed to approve any changes in or additions to a final form of said Continuing Disclosure Certificate, and the execution thereof by an Authorized Officer shall be conclusive evidence of approval of any such changes and additions. The final Continuing Disclosure Certificate shall be executed in the name and on behalf of the City by an Authorized Officer.
7. Approval of Bond Purchase Agreement. The Council hereby approves the Bond Purchase Agreement between the City and the Underwriter, in substantially the form on file with the City Clerk; provided, that the aggregate principal amount of Bonds shall not exceed $16,000,000, the true interest cost of the Bonds shall not exceed 6.0%, and the Underwriter’s discount shall not exceed 1.75% of the par amount of the Bonds. 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 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.
8. Actions Authorized. All actions heretofore taken by the officers, employees and agents of the City with respect to the establishment of the District and the sale and issuance of the Bonds are hereby approved, confirmed and ratified, and the Authorized Officers of the City 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, including any acquisition agreement or amendment to acquisition agreement related to the Bonds, and any certificate, agreement, and other document described in the documents herein approved. All actions to be taken by a - 4 -
specified 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.
9. Effectiveness. This Resolution shall take effect upon its adoption. * * * * *
I hereby certify that the foregoing Resolution was duly adopted by the City Council of the City of Roseville, California, at a regularly scheduled meeting thereof, held on the ____ day of ________, 2023, by the following vote of the City Council:
AYES: COUNCILMEMBERS
NOES: COUNCILMEMBERS
ABSENT: COUNCILMEMBERS
ABSTAIN: COUNCILMEMBERS
_______________________________________
Mayor
ATTEST:
City Clerk
Jones Hall Draft of May30, 2023
PRELIMINARY 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 certain qualifications described herein, under existing law, the interest on the 2023 Bonds is excluded from gross income for federal income tax purposes and such interest is not an item of tax preference for purposes of the federal alternative minimum tax. Interest on the 2023 Bonds may be subject to the corporate alternative minimum tax. In the further opinion of Bond Counsel, such interest is exempt from California personal income taxes. See “TAX MATTERS” herein. $___________________*
CITY OF ROSEVILLE
THE RANCH AT SIERRA VISTA COMMUNITY FACILITIES DISTRICT NO. 1 (PUBLIC FACILITIES)
SPECIAL TAX BONDS
SERIES 2023
Dated: Date of Delivery Due: September 1, as shown below The bonds captioned above (the “2023 Bonds”), are being issued by the City of Roseville (the “City”) by and through its The Ranch at Sierra Vista Community Facilities District No. 1 (Public Facilities) (the “District”). The 2023 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 “Act”), and are issued pursuant to the Resolution of Issuance (as defined herein) and a Fiscal Agent Agreement dated as of September 1, 2020, as amended and supplemented by a Supplemental Agreement No. 1 to Fiscal Agent Agreement, dated as of December 1, 2021 and a Supplemental Agreement No. 2 to Fiscal Agent Agreement, dated as of July 1, 2023 (collectively, the “Fiscal Agent Agreement”) by and between the City and U.S. Bank Trust Company, National Association, as successor fiscal agent (the “Fiscal Agent”). The 2023 Bonds are being issued to (i) construct and acquire certain public facilities of benefit to the District, (ii) provide for a deposit to a debt service reserve account for the 2023 Bonds, (iii) pay capitalized interest on the 2023 Bonds through and including September 1, 2023, and (iv) pay costs of issuance of the 2023 Bonds. Interest on the 2023 Bonds is payable semiannually on March 1 and September 1 of each year, commencing September 1, 2023. The 2023 Bonds represent the third series of special tax bonds issued for the District, following issuance of special tax bonds for the District in 2020 and 2021 (the “2020 Bonds” and the “2021 Bonds,” respectively), and the issuance of additional parity bonds is contemplated in the future, subject to the conditions set forth in the Fiscal Agent Agreement. See “THE BONDS – Authority for Issuance” and “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS – Future Parity Bonds.” The 2023 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. See “APPENDIX G – DTC AND THE BOOK-ENTRY ONLY SYSTEM.” The 2023 Bonds, 2021 Bonds and 2020 Bonds and anticipated future parity bonds are secured by and payable from a pledge of Special Tax Revenues (as defined herein) derived from Special Taxes (as defined herein) to be levied by the City on taxable real property within the boundaries of the District, from the proceeds of any foreclosure actions brought following a delinquency in the payment of the Special Taxes, and from amounts held in certain funds under the Fiscal Agent Agreement, all as more fully described herein. Unpaid Special Taxes do not constitute a personal indebtedness of the owners of the parcels within the District. In the event of delinquency, proceedings may be conducted only against the parcel of real property securing the delinquent Special Tax. There is no assurance the owners will be able to pay the Special Tax or that they will pay a Special Tax even though financially able to do so. To provide funds for payment of the 2023 Bonds and the interest thereon as a result of any delinquent Special Taxes, the City will establish a debt service reserve account for the 2023 Bonds from proceeds of the 2023 Bonds, as described herein. The 2020 Bonds and 2021 Bonds are secured by separate debt service reserve accounts. See “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS.” Property currently in the District and subject to the Special Tax is planned for 1,163 single-family homes in the Sierra Vista Specific Plan area, which is located in the western portion of the City. Sierra Vista Communities, LLC, which is the master developer of the project (the “Master Developer”), has been undertaking the backbone infrastructure improvements, which are now nearly complete. In May 2022, the Master Developer and Lennar Homes of California, LLC sold 651 lots to a landbank with an option for Lennar Homes to purchase the lots over time. As of June 10, 2023 Lennar Homes had acquired 279 of the lots. As of the May 1, 2023 date of value in the Appraisal (described herein) 545 homes were owned by individual homeowners. For additional development information, see “OWNERSHIP OF PROPERTY WITHIN THE DISTRICT” and “DEVELOPMENT IN THE DISTRICT.” The 2023 Bonds are subject to optional and mandatory redemption prior to maturity as described herein. See “THE BONDS — Redemption.”
NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE CITY, THE COUNTY OF PLACER, THE STATE OF CALIFORNIA OR ANY POLITICAL SUBDIVISION THEREOF IS PLEDGED TO THE PAYMENT OF THE 2023 BONDS, EXCEPT TO THE LIMITED EXTENT DESCRIBED HEREIN. THE 2023 BONDS DO NOT CONSTITUTE A DEBT OF THE CITY WITHIN THE MEANING OF ANY STATUTORY OR CONSTITUTIONAL DEBT LIMITATION. THE INFORMATION SET FORTH IN THIS OFFICIAL STATEMENT, INCLUDING INFORMATION UNDER THE HEADING “SPECIAL RISK FACTORS,” SHOULD BE READ IN ITS ENTIRETY.
This cover page contains certain information for general reference only. It is not a summary of all of the provisions of the 2023 Bonds.
Prospective investors must read the entire Official Statement to obtain information essential to the making of an informed investment decision. See “SPECIAL RISK FACTORS” herein for a discussion of the special risk factors that should be considered, in addition to the other matters and risk factors set forth herein, in evaluating the investment quality of the 2023 Bonds.
The 2023 Bonds are offered when, as and if issued, subject to approval as to their legality by Jones Hall, a Professional Law Corporation, San Francisco, California, Bond Counsel. Certain legal matters will also be passed on by Jones Hall, as Disclosure Counsel, and Stradling, Yocca, Carlson & Rauth, a Professional Corporation, Newport Beach, California, as counsel to the Underwriter. Certain legal matters will be passed upon for the City by the City Attorney. It is anticipated that the 2023 Bonds will be available for delivery to DTC on or about July ____, 2023. [Stifel 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. Under no circumstances shall this Preliminary Official Statement constitute 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 the securities laws of such jurisdiction.
CITY OF ROSEVILLE
THE RANCH AT SIERRA VISTA COMMUNITY FACILITIES DISTRICT NO. 1 (PUBLIC FACILITIES)
SPECIAL TAX BONDS
SERIES 2023
MATURITY SCHEDULE
Maturity
(Sept. 1)
Principal
Amount
Interest
Rate Yield Price
CUSIP†
(_______)
$__________ _____% Term Bond Due September 1, 20___; 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. CUSIPÒ numbers are provided for convenience of reference only. None of the City, the Fiscal Agent or the Underwriter take any responsibility for the accuracy of the CUSIP data.
CITY OF ROSEVILLE, CALIFORNIA
City Council
Bruce Houdesheldt, Mayor (District 3)
Krista Bernasconi, Vice Mayor (District 4)
Scott Alvord, Councilmember (District 5)
Tracy Mendonsa, Councilmember (District 1)
Pauline Roccucci, Councilmember (District 2)
City Staff
Dominick Casey, City Manager
Dennis Kauffman, Assistant City Manager/Chief Financial Officer Michelle Sheidenberger, City Attorney
Carmen Avalos, City Clerk
____________________________
SPECIAL SERVICES
Bond Counsel and Disclosure Counsel
Jones Hall, A Professional Law Corporation
San Francisco, California
Municipal Advisor
Hilltop Securities Inc.
Encino, California
Appraiser
Integra Realty Resources
Sacramento, California
Special Tax Administrator
Willdan Financial Services
Temecula, California
Fiscal Agent
U.S. Bank Trust Company, National Association
San Francisco, California
GENERAL INFORMATION ABOUT THIS OFFICIAL STATEMENT
Use of Official Statement. This Official Statement is submitted in connection with the sale of the 2023 Bonds referred to herein and may not be reproduced or used, in whole or in part, for any other purpose. This Official Statement is not to be construed as a contract with the purchasers of the 2023 Bonds.
Estimates and Forecasts. When used in this Official Statement and in any continuing disclosure by the City, in any press release and in any oral statement made with the approval of an authorized officer of the City, the words or phrases “will likely result,” “are expected to”, “will continue”, “is anticipated”, “estimate”, “project,” “forecast”, “expect”, “intend” and similar expressions identify “forward looking statements.” Such statements are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated in such forward-looking statements. Any forecast is subject to such uncertainties. Inevitably, some assumptions used to develop the forecasts will not be realized and unanticipated events and circumstances may occur. Therefore, there are likely to be differences between forecasts and actual results, and those differences may be material. The information and expressions of opinion herein are subject to change without notice, and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, give rise to any implication that there has been no change in the affairs of the City since the date hereof.
Limit of Offering. No dealer, broker, salesperson or other person has been authorized by the City to give any information or to make any representations in connection with the offer or sale of the 2023 Bonds other than those contained herein and if given or made, such other information or representation must not be relied upon as having been authorized by the City or the Underwriter. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the 2023 Bonds by a person in any jurisdiction in which it is unlawful for such person to make such an offer, solicitation or sale.
Involvement of Underwriter. The Underwriter has reviewed the information in this Official Statement in accordance with, and as a part of, their responsibilities to investors under the Federal Securities Laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information. The information and expressions of opinions herein are subject to change without notice and neither delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the City since the date hereof. All summaries of the documents referred to in this Official Statement, are made subject to the provisions of such documents, respectively, and do not purport to be complete statements of any or all of such provisions.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE 2023 BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
THE 2023 BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, IN RELIANCE UPON AN EXCEPTION FROM THE REGISTRATION REQUIREMENTS CONTAINED IN SUCH ACT. THE 2023 BONDS HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE.
TABLE OF CONTENTS
Page Page
INTRODUCTION ........................................................2 ESTIMATED SOURCES AND USES OF FUNDS......8
THE BONDS...............................................................9 Authority for Issuance.............................................9 Description of the Bonds ........................................9 Redemption*.........................................................10 Transfer or Exchange of Bonds............................13
SECURITY AND SOURCES OF PAYMENT FOR
THE BONDS.........................................................14 Special Taxes.......................................................14 Special Tax Methodology .....................................15 Levy of Annual Special Tax; Maximum Special
Tax...................................................................17 Special Tax Fund..................................................18 Delinquent Payments of Special Tax; Covenant
for Superior Court Foreclosure ........................18 2023 Reserve Account of the Reserve Fund........20
Improvement Fund ...............................................22 Future Parity Bonds..............................................22 DEBT SERVICE SCHEDULE...................................25 THE SIERRA VISTA SPECIFIC PLAN.....................26
THE DISTRICT.........................................................27 Location and Description of the Project and the
Immediate Area................................................27
OWNERSHIP OF PROPERTY WITHIN THE
DISTRICT.............................................................30 Lennar Option Agreement with Landbank............30
Information Regarding the Master Developer.......36
Information Regarding Lennar Homes .................33
DEVELOPMENT WITHIN THE DISTRICT...............34
Entitlements and Anticipated Development..........34
Development Agreement......................................35 Environmental Matters..........................................36 Planned and Ongoing Development.....................36
THE IMPROVEMENTS ............................................39 Eligible Facilities...................................................39 Estimated Cost of the Improvements ...................39 VALUE OF PROPERTY WITHIN THE DISTRICT....41
The Appraisal .......................................................41 Value to Special Tax Burden Ratios.................... 42 Special Tax Collections and Delinquencies......... 45
Overlapping Liens and Priority of Lien................. 49 Estimated Tax Burden on Single-Family Home... 50
SPECIAL RISK FACTORS ...................................... 52 Limited Obligation of the City to Pay Debt
Service ............................................................ 52 Concentration of Ownership ................................ 52 Property Values ................................................... 53 Property Values and Property Development ....... 53
Levy and Collection of Special Taxes.................. 56 FDIC/Federal Government Interests in
Properties........................................................ 58 Bankruptcy and Foreclosure Delays.................... 58 Parity Taxes and Special Assessments; Private
Debt................................................................. 60 Tax Delinquencies ............................................... 61 No Acceleration Provisions.................................. 62 Ballot Initiatives.................................................... 62 Voter Initiatives .................................................... 62 Case Law Related to the Mello-Roos Act............ 63
Changes in Tax Law............................................ 64 Pandemic Diseases............................................. 65 Cyber Security ..................................................... 65 Potential Early Redemption of Bonds from
Prepayments................................................... 65
CONSTITUTIONAL LIMITATIONS ON TAXATION
AND APPROPRIATIONS .................................... 66 CONTINUING DISCLOSURE.................................. 67 The City ............................................................... 67 The Master Developer and Lennar Homes.......... 67
UNDERWRITING..................................................... 68 MUNICIPAL ADVISOR ............................................ 68 LEGAL OPINION ..................................................... 69 TAX MATTERS........................................................ 69 NO RATINGS........................................................... 70 NO LITIGATION....................................................... 71 EXECUTION ............................................................ 71 APPENDIX A – RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX APPENDIX B – THE APPRAISAL
APPENDIX C – THE CITY OF ROSEVILLE AND PLACER COUNTY
APPENDIX D – FORM OF OPINION OF BOND COUNSEL
APPENDIX E – FORMS OF CONTINUING DISCLOSURE UNDERTAKINGS APPENDIX F – SUMMARY OF CERTAIN PROVISIONS OF FISCAL AGENT AGREEMENT APPENDIX G – DTC AND THE BOOK-ENTRY ONLY SYSTEM
2 OFFICIAL STATEMENT
$____________*
CITY OF ROSEVILLE
THE RANCH AT SIERRA VISTA COMMUNITY FACILITIES DISTRICT NO. 1 (PUBLIC FACILITIES)
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 Roseville (the “City”) by and through its The Ranch at Sierra Vista Community Facilities District No. 1 (Public Facilities) (the “District”) of the bonds captioned above (the “2023 Bonds”).
Any statements made in this Official Statement involving matters of opinion or of estimates, whether or not so expressly stated, are set forth as such and not as representations of fact, and no representation is made that any of the estimates will be realized. Definitions of certain terms used herein and not defined herein have the meaning set forth in the Fiscal Agent Agreement. See APPENDIX F.
INTRODUCTION
This introduction is not a summary of this Official Statement. It is only a brief description of and guide to, and is qualified by, more complete and detailed information contained in the entire Official Statement, including the cover page and attached appendices, and the documents summarized or described in this Official Statement. A full review should be made of the entire Official Statement. The offering of the 2023 Bonds to potential investors is made only by means of the entire Official Statement.
The City. The City is located in the County of Placer (the “County”), which is located in the Sacramento Valley near the foothills of the Sierra Nevada mountain range, about 16 miles northeast of Sacramento and 110 miles east of San Francisco. The City presently occupies 43 square miles in the southwestern part of the County and is the largest city in the County as well as the residential and business center of the County. It is bordered by Sacramento County to the south, the City of Rocklin to the north and unincorporated County to the east and west. For additional information on the City and the County, see APPENDIX C.
The District. On November 28, 2018, the City Council of the City (the “City Council”), as legislative body of the District, adopted a Resolution of Intention to form the District under the Mello-Roos Community Facilities Act of 1982, as amended (the “Act”), to levy a special tax and to incur bonded indebtedness for the purpose of financing the Improvements and making contributions to certain public facilities. After conducting a noticed public hearing, on January 16, _________
* Preliminary; subject to change.
3 2019, the City Council adopted a Resolution of Formation (the “Resolution of Formation”), which established the District and a future annexation area for the District (the “Future Annexation Area”), set forth the Rate and Method within the District and set forth the necessity to incur bonded indebtedness in a total amount not to exceed $210,000,000. On the same day, an election was held within the District in which the qualified elector in the District approved the proposed bonded indebtedness and the levy of the Special Tax.
Since the District was formed, three annexations of property from the Future Annexation Area into the District have occurred. Property currently in the District and subject to the Special Tax is planned for 1,163 single-family homes in the Sierra Vista Specific Plan area, which is located in the western portion of the City. The entire project is planned for 1,281 residential units, which includes a 118-unit parcel in the Future Annexation Area zoned for high-density residential (HDR) uses. This does not include 99 acres of commercial, office or mixed-use development planned for the adjacent area. Only the land developing into 1,163 single-family homes within the District currently serves as security for the Bonds.
Sierra Vista Communities, LLC, a California limited liability company (the “Master Developer”), which is the master developer of the project, has been undertaking the backbone infrastructure improvements, which are now nearly complete. In May 2022, the Master Developer and Lennar Homes of California, LLC (“Lennar Homes”) sold 651 lots to AG EHC II (LEN) CA 2, L.P., a Delaware limited partnership (the "Landbank Owner") with an option for Lennar Homes to purchase the lots over time. As of June 10, 2023 Lennar Homes had acquired 279 of the lots pursuant to an option agreement and Lennar Homes is scheduled to acquire the remainder of the lots monthly through September 2025. For additional development information, see “OWNERSHIP OF PROPERTY WITHIN THE DISTRICT” and “DEVELOPMENT OF PROPERTY WITHIN THE DISTRICT.”
As of the May 1, 2023 date of the Appraisal (described herein) 545 homes have been sold by Lennar Homes to individual homeowners.
Authority for Issuance of the 2023 Bonds. The 2023 Bonds are issued pursuant to the Act, a resolution adopted by the City Council on June 21, 2023 (the “Resolution of Issuance”) and a Fiscal Agent Agreement dated as of September 1, 2020, as amended and supplemented by a Supplemental Agreement No. 1 to Fiscal Agent Agreement, dated as of December 1, 2021 and Supplemental Agreement No. 2 to Fiscal Agent Agreement, dated as of July 1, 2023 (collectively, the “Fiscal Agent Agreement”), between the City and U.S. Bank Trust Company, National Association, as successor fiscal agent (the “Fiscal Agent”).
Bond Terms. The 2023 Bonds will be dated as of and bear interest from the date of delivery thereof at the rate or rates set forth on the cover page of this Official Statement. Interest on the 2023 Bonds is payable on March 1 and September 1 of each year (each an “Interest Payment Date”), commencing September 1, 2023. The 2023 Bonds will be issued without coupons in denominations of $5,000 or any integral multiple thereof.
Registration of Ownership of 2023 Bonds. The 2023 Bonds will be 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”). Ultimate purchasers of 2023 Bonds will not receive physical certificates representing their interest in the 2023 Bonds. So long as the 2023 Bonds are registered in the name of Cede & Co., as nominee of DTC, references herein to the Owners will mean Cede & Co., and will not mean the ultimate purchasers of the 2023 Bonds. Payments of the principal, premium, if any, and interest on the 2023 Bonds will be made directly to DTC, or its 4 nominee, Cede & Co. so long as DTC or Cede & Co. is the registered owner of the 2023 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 Direct 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 2023 Bonds will primarily be used to finance a portion of the costs of acquiring and constructing certain public infrastructure improvements (the “Improvements,” as described herein) as part of the development being undertaken by the Master Developer in the District. The Improvements consist generally of water, wastewater, drainage, roadway and other infrastructure improvements necessary for development of property within the District and the surrounding area, as well as park and open space improvements (which include environmental mitigation costs) and related fees. See “THE IMPROVEMENTS.” Proceeds of the 2023 Bonds will also be used to fund a debt service reserve account for the 2023 Bonds, fund capitalized interest for the 2023 Bonds through and including September 1, 2023, and pay costs of issuance.
Security and Source of Payment of the 2023 Bonds. As security for the payment of the 2023 Bonds, outstanding parity bonds and any future parity bonds, a special tax applicable to each taxable parcel in the District will be levied and collected according to the tax liability determined by the City Council through the application of the Rate, Method of Apportionment, and Manner of Collection of Special Tax for the District, which has been amended to reflect the annexation of property subsequent to the formation of the District (as so amended, the “Rate and Method”). The Rate and Method is set forth in its entirety in APPENDIX A hereto. Pursuant to the Rate and Method, a “Facilities Special Tax” will be levied and collected until the earlier of (i) the Transition Year or (ii) Fiscal Year 2082-83, and a “Maintenance Special Tax” will be levied and collected beginning in the Transition Year. Only the “Facilities Special Tax” is pledged to the payment of the 2023 Bonds, and the definition of “Special Taxes” used in the Fiscal Agent Agreement and this Official Statement refers only to the “Facilities Special Tax” levied in accordance with the Rate and Method. See “SECURITY AND SOURCES OF PAYMENT OF THE BONDS – Special Tax Methodology.”
The 2023 Bonds are payable from the “Special Tax Revenues,” consisting of the proceeds of the Special Taxes received by the City, including all scheduled payments and delinquent payments thereof, interest thereon and proceeds of the redemption or sale of property sold as a result of foreclosure of the lien of the Special Taxes, net of the administration charge of the County (currently at 1%), but do not include any interest in excess of the interest due on the Bonds or any penalties collected in connection with any such foreclosure. The 2023 Bonds are also payable from amounts held in certain funds and accounts pursuant to the Fiscal Agent Agreement, including a reserve fund, all as more fully described herein. See “–2023 Reserve Account of the Reserve Fund,” below.
The Special Taxes represent liens on the parcels of land subject to a Special Tax, and failure to pay the Special Taxes could result in proceedings to foreclose the delinquent property.
The Special Taxes do not constitute the personal indebtedness of the owners of taxed parcels.
See “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS – Special Tax Methodology” and “APPENDIX A – RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX.” Parity Bonds. The maximum authorized indebtedness for the District is $210,000,000, and the 2023 Bonds constitute the third series of special tax bonds issued under this authorization.
The first series of special tax bonds for the District, the City of Roseville The Ranch at Sierra Vista 5 Community Facilities District No. 1 (Public Facilities) Special Tax Bonds Series 2020 (the “2020 Bonds”), were issued in the principal amount of $20,875,000. The second series of special tax bonds for the District, the City of Roseville The Ranch at Sierra Vista Community Facilities District No. 1 (Public Facilities) Special Tax Bonds Series 2021 (the “2021 Bonds”), were issued in the principal amount of $13,290,000. Following issuance of the 2023 Bonds in the principal amount of $______________*, remaining bond authorization for the District will be $_____________*. In addition, the bond authorization includes an expectation that the City may utilize a portion of the available authorized bond amount for the funding of certain deferred impact fees owed to the City, anticipated to occur subsequent to payment in full of the 2020 Bonds, the 2021 Bonds and the 2023 Bonds, as described herein.
Any future parity bonds of the District (“Additional Bonds” and collectively with the 2020 Bonds, 2021 Bonds and the 2023 Bonds, the “Bonds”) are required to meet certain conditions of issuance as set forth in the Fiscal Agent Agreement. See “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS – Future Parity Bonds.”
Additional Bonds may be issued in the future to pay for additional Improvements and/or to pay for the Development Impact Fee Deferral as described below. However, the actual aggregate amount of Additional Bonds to fund Improvements and the Development Impact Fee Deferral may vary depending on interest rates at the time of bond issuance, the timing of each bond issue and other factors that may impact the timing and size of each bond issue. 2023 Reserve Account of the Reserve Fund. In connection with the issuance of the 2020 Bonds, a Reserve Fund (the “Reserve Fund”) was established by the Fiscal Agent under the Fiscal Agent Agreement. For each series of Bonds, separate reserve accounts will be established within the Reserve Fund. Accordingly, at the time of issuance of the 2023 Bonds, a reserve account for the 2023 Bonds will be established within the Reserve Fund for the benefit of the 2023 Bonds (the “2023 Reserve Account”) in the amount of the Reserve Requirement (defined herein) for the 2023 Bonds. If there are additional delinquencies after depletion of funds in the 2023 Reserve Account of the Reserve Fund, the City is not obligated to pay the 2023 Bonds or supplement the 2023 Reserve Account of the Reserve Fund except to the extent Special Tax Revenues are available for such purpose. See “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS — Reserve Fund.”
Development and Ownership of Property in District. As noted above, property currently in the District and subject to the Special Tax is planned for 1,163 single-family homes in the Sierra Vista Specific Plan area, which is located in the western portion of the City. * Preliminary, subject to change.
The Master Developer, which began as a joint venture between Lennar Homes and certain other entities as described herein, is now 100% owned by Lennar Homes. Construction of infrastructure by the Master Developer is underway and mostly complete. Home construction and sales are ongoing in all phases of the project. As of May 1, 2023, 545 homes were owned by individual homeowners.
6 The Master Developer and Lennar Homes have transferred certain lots in the District to the Landbank Owner, as described herein. See “OWNERSHIP OF PROPERTY WITHIN THE DISTRICT” and “DEVELOPMENT OF PROPERTY WITHIN THE DISTRICT.” Value Estimate of Property in District. Taxable real property within the District is security for the Special Tax securing the Bonds. The County Assessor has reflected home values for 194 completed single family homes on the fiscal year 2023 assessment roll (the “Assessed Property”). For the balance of the taxable property in the District, the City authorized the preparation of an appraisal report with a May 1, 2023 date of value (the “Appraisal”) for property planned for 969 homes (collectively, the “Appraised Property”). The Assessed Property and the Apprised Property together provide a composite value for the District. As of the date of value, the total estimated value (the “Composite Value”) was estimated as follows:
Ownership
No. of
Parcels/Lots
Aggregate
Value
Aggregate Value of Appraised Properties 969 $311,000,000 Aggregate Value of Existing Homes based on Assessed Value 194 123,519,390 Total Composite Value 1,163 $434,519,390
A complete copy of the Appraisal is attached to this Official Statement as APPENDIX B.
In considering the estimates of value evidenced by the Appraisal, it should be noted that the Appraisal is based upon a number of standard and special assumptions and conditions which affect the estimates as to value and should be carefully reviewed by prospective investors in their entirety. See “VALUE OF PROPERTY WITHIN THE DISTRICT – The Appraisal.” Value-to-Lien Ratio. As shown above, the Composite Value of taxable land in the District as of May 1, 2023 was $434,519,390, which is approximately 7.86* times the $55,252,964* aggregate estimated principal amount of the Bonds (consisting of the 2020 Bonds, the 2021 Bonds and 2023 Bonds) and overlapping debt. Value-to-lien ratios on individual parcels may vary considerably from this average. See “APPENDIX B – The Appraisal” and “VALUE OF PROPERTY WITHIN THE DISTRICT – Value to Special Tax Burden Ratios” herein.
Risks of Investment. See the section of this Official Statement entitled “SPECIAL RISK FACTORS” for a discussion of special factors that should be considered, in addition to the other matters set forth herein, in considering the investment quality of the 2023 Bonds. In particular, no assurance can be given that the timing of construction of homes and/or sale of homes projected by Lennar Homes in this Official Statement will not be delayed as a result of the COVID-19 pandemic. Neither the City nor the Underwriter can predict the impact of COVID19 on home production and home sales activities or the willingness of owners of land in the District, including Lennar Homes, to pay the Special Taxes securing the 2023 Bonds.
See “SPECIAL RISK FACTORS – COVID-19 Pandemic.”
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 2023 Bonds. The 2023 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 money in the funds established and pledged to the 2023 Bonds under the ___________
* Preliminary; subject to change.
7 Fiscal Agent Agreement, and neither the payment of the interest on nor principal of or redemption premiums, if any, on the 2023 Bonds is a general debt, liability or obligation of the City. The 2023 Bonds do not constitute an indebtedness of the City within the meaning of any constitutional or statutory debt limitation or restrictions, and neither the City Council, the City nor any officer or employee thereof are liable for the payment of the interest on or principal of or redemption premiums, if any, on the 2023 Bonds other than from the proceeds of the Special Taxes and the money in the funds established and pledged to the 2023 Bonds, as provided in the Fiscal Agent Agreement.
Summary of Information. Brief descriptions of certain provisions of the Fiscal Agent Agreement, the Bonds and certain other documents are included herein. The descriptions and summaries of documents herein do not purport to be comprehensive or definitive, and reference is made to each such document for the complete details of all its respective terms and conditions, copies of which are available for inspection at the office of the Chief Financial Officer 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. 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 the District since the date hereof.
Any statements made in this Official Statement involving matters of opinion or of estimates, whether or not so expressly stated, are set forth as such and not as representations of fact, and no representation is made that any of the estimates will be realized. 8 ESTIMATED SOURCES AND USES OF FUNDS
A summary of the estimated sources and uses of funds associated with the sale of the 2023 Bonds follows:
Estimated Sources of Funds:
Principal Amount of 2023 Bonds $
Plus/Less: [Net] Original Issue Premium/Discount
Total $
Estimated Uses of Funds:
Deposit to Improvement Fund $
Deposit to 2023 Reserve Account of the 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 2023 Bonds. (2) Capitalized interest on the 2023 Bonds through and including September 1, 2023. (3) Includes fees of bond and disclosure counsel, fees, expenses and charges of the Fiscal Agent, printing costs, fees of the special tax administrator, appraiser, and municipal advisor, Underwriter’s discount, and other costs of issuance.
9 THE BONDS
Authority for Issuance
General. The 2023 Bonds are issued pursuant to the Fiscal Agent Agreement, the Resolution of Issuance and the Act.
On November 28, 2018, the City Council adopted a Resolution of Intention to form a community facilities district under the Act, to levy a special tax and to incur bonded indebtedness for the purpose of financing the Improvements and making contributions to certain public facilities.
After conducting a noticed public hearing, on January 16, 2019, the City Council adopted the Resolution of Formation, which established the District and the Future Annexation Area, set forth the Rate and Method within the District and set forth the necessity to incur bonded indebtedness in a total amount not to exceed $210,000,000. On the same day, an election was held within the District in which the Master Developer, as the sole qualified elector in the District, approved the proposed bonded indebtedness and the levy of the Special Tax.
In 2020 the City issued a first series of special tax bonds in the principal amount of $20,875,000, and in 2021 issued a second series in the amount of $13,290,000, Use of Bond Authorization for Development Impact Fee Deferral Bonds. In connection with the approval of development in the District, the City agreed that payment of certain impact fees owed by the Master Developer and Lennar Homes in the District will be deferred (referred to as the “Development Impact Fee Deferral” in the Rate and Method) to allow payment of the deferred fees after the 2020 Bonds have been fully paid. The City expects to receive payment for the deferred impact fees either through continued collection of Special Taxes or through the issuance of future bonds after the 2020 Bonds have matured. If the City chooses to issue bonds to pay deferred impact fees, the remaining authorization will be available to be utilized by the City as a means therefor.
Description of the Bonds
Bond Terms. The 2023 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 2023 Bonds are being issued in the denomination of $5,000 or any integral multiple thereof.
Interest on the 2023 Bonds will be payable semiannually on March 1 and September 1 of each year (each an “Interest Payment Date”), commencing September 1, 2023. The principal of the 2023 Bonds and premiums due upon the redemption thereof, if any, will be payable in lawful money of the United States of America at the designated corporate trust office of the Fiscal Agent, or such other place as designated by the Fiscal Agent, upon presentation and surrender of the 2023 Bonds; provided that so long as any 2023 Bonds are in book-entry form, payments with respect to such 2023 Bonds will be made by wire transfer, or such other method acceptable to the Fiscal Agent, to DTC.
Book-Entry Only System. The 2023 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 under the book-entry system maintained by DTC.
Ultimate purchasers of 2023 Bonds will not receive physical certificates representing their interest in the 2023 Bonds. So long as the 2023 Bonds are registered in the name of Cede & Co., as nominee of DTC, references herein to the Owners will mean Cede & Co., and will not mean the 10 ultimate purchasers of the 2023 Bonds. The Fiscal Agent will make payments of the principal, premium, if any, and interest on the 2023 Bonds directly to DTC, or its nominee, Cede & Co., so long as DTC or Cede & Co. is the registered owner of the 2023 Bonds. Disbursements of such payments to DTC’s Participants are the responsibility of DTC and disbursements of such payments to the Beneficial Owners are the responsibility of DTC’s Direct Participants and Indirect Participants, as more fully described herein. See “APPENDIX G – DTC AND THE BOOK-ENTRY ONLY SYSTEM.”
Calculation and Payment of Interest. Interest on the 2023 Bonds will be computed on the basis of a 360-day year consisting of twelve 30-day months. 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 each Interest Payment Date by first class mail to the registered Owner thereof at such registered Owner’s address as it appears on the registration books maintained by the Fiscal Agent at the close of business on the 15th day of the month preceding the month in which the Interest Payment Date occurs whether or not such day is a Business Day (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 will be made by wire transfer, or such other method acceptable to the Fiscal Agent, to DTC. See “APPENDIX G – DTC AND THE BOOK-ENTRY ONLY SYSTEM.”
Each 2023 Bond will bear interest from the Interest Payment Date next preceding the date of authentication thereof unless (i) it is authenticated on an Interest Payment Date, in which event it will bear interest from such date of authentication, or (ii) it is authenticated prior to an Interest Payment Date and after the close of business on the Record Date preceding such Interest Payment Date, in which event it will bear interest from such Interest Payment Date, or (iii) it is authenticated prior to the Record Date preceding the first Interest Payment Date, in which event it will bear interest from the closing date for the 2023 Bonds; provided, however, that if at the time of authentication of a 2023 Bond, interest is in default thereon, such 2023 Bond will bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment thereon. So long as the 2023 Bonds are registered in the name of Cede & Co., as nominee of DTC, payments of the principal, premium, if any, and interest on the 2023 Bonds will be made directly to DTC, or its nominee, Cede & Co. Disbursements of such payments to DTC’s Participants are the responsibility of DTC and disbursements of such payments to the Beneficial Owners are the responsibility of DTC’s Direct Participants and Indirect Participants, as more fully described herein. See “APPENDIX G – DTC AND THE BOOK-ENTRY ONLY SYSTEM.” Redemption*
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, 20__ 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:
__________
* Preliminary; subject to change.
11 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
Mandatory Redemption From Prepayments. The 2023 Bonds are subject to mandatory redemption from Prepayments of the Special Tax by property owners, in whole or in part among maturities as specified by the 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, 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 Prepayments will be allocated to the redemption of each series of Bonds as nearly as practicable on a proportionate basis based on the outstanding principal amount of each series.
Such allocations shall be applied to redeem each series as nearly as practicable on a pro rata basis among maturities of each respective series, in increments of $5,000; provided, however, that, for Prepayments of less than $50,000, the City may specify in an Officer’s Certificate that Prepayments be applied to one or more maturities of one or more series so long as there is delivered to the Fiscal Agent a Certificate of the Special Tax Consultant that, following such redemption from Prepayments, the maximum Special Taxes that may be levied in each Fiscal Year is not less than 110% of Maximum Annual Debt Service.
In connection with receipt of a Prepayment, the City may release from the Reserve Account related to each series of Bonds an amount corresponding to the applicable credit to be received based on the principal amount of each series prepaid, as determined by the City, provided that the release shall not cause the amount in each such Reserve Account to be less than the applicable Reserve Requirement.
See “SPECIAL RISK FACTORS – Potential Early Redemption of Bonds from Prepayments” for a discussion of the potential for the 2023 Bonds to be priced with original issue premium and then be redeemed from Special Tax prepayments prior to maturity.
Mandatory Sinking Fund Redemption. The Term 2023 Bonds maturing September 1, 20__ and September 1, 20__ are subject to mandatory sinking payment redemption in part on September 1, 20__ and September 1, 20__, respectively, and on each September 1 thereafter to maturity, by lot, at a redemption price equal to 100% of the principal amount thereof to be redeemed, without premium, in the aggregate respective principal amounts as set forth in the following tables:
12 Term 2023 Bonds Maturing September 1, 20__
Mandatory
Redemption Date
(Sept. 1)
Sinking Fund
Payment
(maturity)
Term 2023 Bonds Maturing September 1, 20__
Mandatory
Redemption Date
(Sept. 1)
Sinking Fund
Payment
(maturity)
The amounts in the foregoing tables may be reduced pro rata, in order to maintain substantially proportional debt service coverage, as a result of any prior partial optional redemption or mandatory redemption of the 2023 Bonds.
Purchase in Lieu of Redemption. In lieu of redemption, moneys in the Bond Fund may be used and withdrawn by the Fiscal Agent for purchase of Outstanding 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.
Redemption Procedure by Fiscal Agent. The Fiscal Agent will cause notice of any redemption to be mailed by first class mail, postage prepaid, at least 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 respective registered Owners of any 2023 Bonds designated for redemption, at their addresses appearing on the registration books in the Principal Office of the Fiscal Agent; but such mailing is not a condition precedent to such redemption and failure to mail or to receive any such notice, or any defect therein, will not affect the validity of the proceedings for the redemption of such 2023 Bonds.
Such notice will state the redemption date and the redemption price and, if less than all of the then Outstanding 2023 Bonds are to be called for redemption, will designate the CUSIP numbers and bond numbers of the 2023 Bonds to be redeemed by giving the individual CUSIP number and bond number of each 2023 Bond to be redeemed or will state that all 2023 Bonds between two stated bond numbers, both inclusive, are to be redeemed or that all of the 2023 Bonds of one or more maturities have been called for redemption, will state as to any 2023 Bond called in part the principal amount thereof to be redeemed, and will require that such 2023 Bonds be then surrendered at the Principal Office of the Fiscal Agent for redemption at the said redemption price, and will state that further interest on such 2023 Bonds will not accrue from and after the redemption date.
13 The City has the right to rescind any notice of the optional redemption of 2023 Bonds and such notice may 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 2023 Bonds then called for redemption.
Whenever provision is made in the Fiscal Agent Agreement for the redemption of less than all of the 2023 Bonds of any maturity, the City will select the 2023 Bonds to be redeemed, from all 2023 Bonds or such given portion thereof of such maturity by lot in any manner which the City in its sole discretion deems appropriate. Upon surrender of 2023 Bonds redeemed in part only, the City will execute and the Fiscal Agent will authenticate and deliver to the registered Owner, at the expense of the City, a new 2023 Bond or 2023 Bonds, of the same series and maturity, of authorized denominations in aggregate principal amount equal to the unredeemed portion of the 2023 Bond or 2023 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 2023 Bonds so called for redemption are deposited in the Bond Fund, such 2023 Bonds so called will cease to be entitled to any benefit under the Fiscal Agent Agreement other than the right to receive payment of the redemption price, and no interest will accrue thereon on or after the redemption date specified in such notice.
Transfer or Exchange of Bonds
So long as the 2023 Bonds are registered in the name of Cede & Co., as nominee of DTC, transfers and exchanges of 2023 Bonds will be made in accordance with DTC procedures. See “APPENDIX G – DTC AND THE BOOK-ENTRY ONLY SYSTEM.” Any 2023 Bond may, in accordance with its terms, be transferred or exchanged by the person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of such 2023 Bond for cancellation, accompanied by delivery of a duly written instrument of transfer in a form approved by the Fiscal Agent. Whenever any 2023 Bond or 2023 Bonds are surrendered for transfer or exchange, the City will execute and the Fiscal Agent will authenticate and deliver a new 2023 Bond or 2023 Bonds, for a like aggregate principal amount of 2023 Bonds of authorized denominations and of the same maturity. The cost for any services rendered or any expenses incurred by the Fiscal Agent in connection with any such transfer or exchange will be paid by the City. The Fiscal Agent will collect from the Owner requesting such transfer any tax or other governmental charge required to be paid with respect to such transfer or exchange. No transfers or exchanges of 2023 Bonds will be required to be made (i) within 15 days prior to the date established by the Fiscal Agent for selection of 2023 Bonds for redemption or (ii) with respect to a 2023 Bond after such 2023 Bond has been selected for redemption. 14 SECURITY AND SOURCES OF PAYMENT FOR THE BONDS
Special Taxes
The Bonds (consisting of the 2020 Bonds, the 2021 Bonds, the 2023 Bonds and any Additional Bonds that may be issued in the future) are payable from and secured by proceeds of the Special Taxes received by the City, 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 (but excluding any interest in excess of the interest due on the Bonds or any penalties collected in connection with any such foreclosure), and net of administration charges of the County (currently 1%) (the “Special Tax Revenues”). All of the Special Tax Revenues and all moneys deposited in the Bond Fund and, until disbursed as provided herein, in the Improvement Fund and the Special Tax Fund are pledged to secure the repayment of the Bonds. In addition, with respect to each Series of Bonds, all moneys in the applicable subaccount of the Reserve Fund for such Series is pledged to secure the repayment of the applicable Series. The Special Tax Revenues and all moneys deposited into such funds (except as otherwise provided in the Fiscal Agent Agreement) are dedicated to the payment of the principal of, including any mandatory sinking fund payments, and interest and any premium on, the Bonds as provided in the Fiscal Agent Agreement and in the Act until all of the Bonds have been paid and retired or defeased in accordance with the Fiscal Agent Agreement.
A Special Tax applicable to each taxable parcel in the District will be levied and collected according to the tax amount determined by the City Council through the application of the Rate and Method administered by Willdan Financial Services, Temecula, California (the “Special Tax Administrator”) and set forth in APPENDIX A hereto for all taxable properties in the District. In August 2021 the Rate and Method was amended to account for one of the three annexations of land into the District from the Future Annexation Area. See APPENDIX A.
Prior to remittance of the Special Tax collections to the City, the County deducts and retains a 1% County administration fee, as noted above. Interest and principal on the Bonds is payable from the annual Special Tax Revenues to be paid to the City from Special Tax levies and collections on taxable property within the District, from amounts held in certain funds and accounts established under the Fiscal Agent Agreement and from the proceeds, if any, from the sale of such property for delinquency of such Special Taxes.
The Special Taxes are exempt from the property tax limitation of Article XIIIA of the California Constitution, pursuant to Section 4 thereof as a “special tax” authorized by a two-thirds vote of the qualified electors. The levy of the Special Taxes was authorized by the City pursuant to the Act in an amount determined according to the Rate and Method approved by the City. See “Special Tax Methodology” below and “APPENDIX A – RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX.”
The amount of Special Taxes that the City may levy in any year, and from which principal and interest on the Bonds is to be paid, is strictly limited by the maximum rates approved by the qualified electors within the District, which is set forth in the Rate and Method. Under the Rate and Method, Special Taxes for the purpose of making payments on the Bonds will be levied annually in an amount not in excess of the maximum approved amount. The Special Taxes and any interest earned on the Special Taxes constitute a trust fund for the principal of and interest on the Bonds pursuant to the Fiscal Agent Agreement and, so long as the principal of and interest on these obligations remains unpaid, the Special Taxes and investment earnings thereon will not 15 be used for any other purpose, except as permitted by the Fiscal Agent Agreement, and will be held in trust for the benefit of the owners thereof and will be applied pursuant to the Fiscal Agent Agreement. The Rate and Method apportions the Annual Facilities Costs (as defined in the Rate and Method and described below) among the taxable parcels of real property within the District according to the rate and methodology set forth in the Rate and Method. See “Special Tax Methodology” below. See also “APPENDIX A – RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX.”
Special Tax Methodology
As security for the payment of the 2023 Bonds, a s well as the outstanding 2020 and 2021 parity bonds and any future parity bonds, a special tax applicable to each taxable parcel in the District will be levied and collected according to the tax liability determined by the City Council through the application of the Rate, Method of Apportionment, and Manner of Collection of Special Tax for the District, which has been amended to reflect the annexation of property subsequent to the formation of the District (as so amended, the “Rate and Method”). The Rate and Method is set forth in its entirety in APPENDIX A hereto.
Pursuant to the Rate and Method, a “Facilities Special Tax” will be levied and collected until the earlier of (i) the Transition Year or (ii) Fiscal Year 2082-83, and a “Maintenance Special Tax” will be levied and collected beginning in the Transition Year. For the definition of “Transition Year” and related matters, see APPENDIX A. Only the “Facilities Special Tax” is pledged to the payment of the Bonds, and the definition of “Special Taxes” used in the Fiscal Agent Agreement and this Official Statement refers only to the “Facilities Special Tax” levied in accordance with the Rate and Method. Capitalized terms set forth in this section and not otherwise defined have the meanings set forth in the Rate and Method.
The City may levy the Special Tax up to the amount of the Maximum Annual Facilities Special Tax set forth in the Rate and Method, if conditions so require. The City has covenanted to annually levy the Special Taxes in an amount at least sufficient to pay the Annual Facilities Costs (as defined below). Because each Special Tax levy is limited to the Maximum Annual Facilities Special Tax rates authorized as set forth in the Rate and Method, no assurance can be given that, in the event of Special Tax delinquencies, the amount of the Annual Facilities Costs will in fact be collected in any given year. In addition, Section 53321(d) of the Act provides that the special tax levied against any parcel for which an occupancy permit for private residential use has been issued may not be increased as a consequence of delinquency or default by the owner of any other parcel within a community facilities district by more than 10% above the amount that would have been levied in such Fiscal Year had there never been any such delinquencies or defaults. See “SPECIAL RISK FACTORS – Tax Delinquencies” herein. The Special Taxes are collected for the City by the County in the same manner and at the same time as ad valorem property taxes.
Determination of Annual Facilities Costs. Each year, the City will determine the Annual Facilities Costs of the District for the upcoming Fiscal Year. The “Annual Facilities Costs” includes the following amounts (less any available earnings on any reserve fund, special tax funds, available capitalized interest or any other available revenues):
(i) Debt Service to be paid from Facilities Special Taxes; 16 (ii) the amount needed to replenish bond reserve funds to the level required by Bond documents, to the extent not included in a computation of Annual Facilities Costs in a previous Fiscal Year;
(iii) Administrative Expenses for such Fiscal Year;
(iv) the amount needed to (1) cure any delinquencies in the payment of principal or interest on Bonds which have occurred in the prior Fiscal Year, and (2) to fund any foreseeable deficiency of the amount to be available for the payment of principal or interest on Bonds which are expected to occur in the current or any previous Fiscal Year, to the extent not already included in the calculation of Annual Facilities Costs; (v) the amount needed to (1) cure any delinquencies in the payment of the Facilities Special Taxes in the prior Fiscal Year, (2) to fund any foreseeable deficiency of the amount to be available for the payment of Facilities Special Taxes which are expected to occur in such Fiscal Year, in each case, to the extent not already included in the calculation of Annual Facilities Costs;
(vi) pay-as-you-go expenditures for authorized improvements; and (vii) during the Deferral Bonding Period, the amount needed to pay Development Impact Fee Deferrals not financed by Bonds.
The Annual Facilities Costs is the basis for the amount of Special Tax to be levied within the District. In no event may the City levy a Special Tax in any year above the Maximum Annual Facilities Special Tax identified for each parcel in the Rate and Method.
Parcels Subject to the Facilities Special Tax. For each fiscal year in which the Facilities Special Tax will be levied, the City will prepare a list of the parcels subject to the Special Tax using the records of the City and the County Assessor. The City will tax parcels within each zone within the District pursuant to the Rate and Method. Taxable Parcels that are acquired by a public agency after the District is formed will remain subject to the Facilities Special Tax unless a “trade” resulting in no loss of Facilities Special Tax revenue can be made, as described in the Rate and Method. See APPENDIX A.
Limitation on Increases in Levy of Facilities Special Tax. If owners are delinquent in the payment of Facilities Special Taxes, the City may not increase Facilities Special Tax levies to make up for delinquencies for prior Fiscal Years above the Maximum Facilities Special Tax rates specified for each category of property within the District. In addition, Section 53321(d) of the Act provides that the special tax levied against any parcel for which an occupancy permit for private residential use has been issued may not be increased as a consequence of delinquency or default by the owner of any other parcel within a community facilities district by more than 10% above the amount that would have been levied in such Fiscal Year had there never been any such delinquencies or defaults. In cases of significant delinquency, these factors may result in defaults in the payment of principal of and interest on the Bonds. See “SPECIAL RISK FACTORS.” Duration of the Facilities Special Tax; Transition Year. The Facilities Special Tax will be levied and collected (up to maximum allowable amount) until the earlier of (i) the Transition Year or (ii) Fiscal Year 2082-83. Transition Year means the first Fiscal Year following the Fiscal Year in which the Transition Event occurred, and Transition Event means the earlier of (i) after the period in which bonds are outstanding or refunded which financed costs other than the 17 Development Impact Fee Deferral (defined in the Rate and Method as the “Initial Bonding Period”), the Fiscal Year in which the Administrator determines the Development Impact Fee Deferral has been repaid in full to the City and the City determines funding is no longer needed for Annual Facilities Costs, or (ii) Fiscal Year 2083-84. Initial Bonding Period means the period in which Bonds are outstanding or refunded which financed Authorized Facilities costs other than the Development Impact Fee Deferral.
Prepayment of the Facilities Special Tax. The Rate and Method provides that landowners may prepay some of the Facilities Special Tax by a cash settlement with the City.
The amount of the prepayment required is to be calculated according to a formula set forth in the Rate and Method, which is generally based on the net present value of the remaining years in which the Facilities Special Tax will be collected, including the effect of a 2% per year escalation factor applicable for the time Bonds remain outstanding using a discount rate equal to the most current yield for the 30-year Treasury Constant Maturity as the discount factor, plus an amount representing the Development Impact Fee Deferral Amount (which amount is not available for prepayment of the Bonds), all as described in Section 8 of the Rate and Method set forth in APPENDIX A. Prepayment is only allowed if the City determines that the prepayment does not jeopardize its ability to make timely payments of debt service on outstanding Bonds.
Levy of Annual Special Tax; Maximum Special Tax
The annual Special Tax will be calculated by the City and levied to provide money for debt service on the Bonds, replenishment of the Reserve Fund, certain delinquencies, administration of the District, and for payment of pay-as-you-go expenditures (to the extent permitted by the City) for the authorized District-funded facilities not funded from Bond proceeds. In no event may the City levy a Special Tax in any year above the maximum identified for each parcel in the Rate and Method. The attachments to the Rate and Method set forth the maximum Special Tax that may be levied in each fiscal year. See APPENDIX A.
The annual Special Tax was first levied for fiscal year 2021-22. The Special Tax levy is calculated each year by determining the amount needed to be generated by all Taxable Parcels in the District. The Special Tax (up to the maximum allowable amount) is levied against each Taxable Parcel until the Special Tax revenue equals such amount, however the Rate and Method establishes a priority for which properties will be levied a Special Tax. First, the Special Tax will be levied against all “Developed Parcels” in the District. If additional amounts are needed, a levy is made against each “Small Lot Tentative Map Parcel” in the District, then each “Large Lot Parcel” in the District, then each “Undeveloped Parcel” in the District. For single-family detached property, Developed Parcels are parcels shown on a Final Small Lot Subdivision Map recorded prior to May 1 of the preceding Fiscal Year. See “APPENDIX A – RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX.”
The City covenants in the Fiscal Agent Agreement to fix and levy the amount of Special Taxes within the District required for the payment of principal of and interest on any outstanding Bonds of the District becoming due and payable during the ensuing year, including any necessary replenishment or expenditure of the Reserve Fund for the Bonds and an amount estimated to be sufficient to pay the Administrative Expenses during such year, all in accordance with the Rate and Method. The Special Tax is authorized to be levied in an amount not to exceed the Maximum Special Tax levy as described in the Rate and Method notwithstanding that a lower amount is sufficient to pay debt service on the Bonds. The Rate and Method provides a mechanism whereby the City may utilize the pay-as-you-go component to pay for and/or reimburse developers for a portion of the cost of Improvements not funded by proceeds of the bonds issued for the District. 18 Proceeds of the annual Special Tax levy will first be used to pay the “Annual Facilities Costs” (which include debt service payments on the Bonds) other than pay-as-you-go expenditures, and the City contemplates that the levy will include a pay-as-you-go component in an amount up to the Maximum Annual Facilities Special Tax on Developed Parcels, for deposit, after deducting for debt service and administration, into the Improvement Fund for authorized costs not funded from Bond proceeds. See “THE IMPROVEMENTS” and “VALUE OF PROPERTY WITHIN THE DISTRICT.” See also “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS – Special Tax Methodology” above. See “APPENDIX A – RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX” for a copy of the Rate and Method.
Special Tax Fund
When received, the Special Tax Revenues are required under the Fiscal Agent Agreement to be deposited into a Special Tax Fund to be held by the City in trust for the benefit of the City and the Owners of the Bonds. Within the Special Tax Fund, the City has established and will maintain the Surplus Account, to the credit of which the City will deposit surplus Special Tax Revenue, if any, as described below. Moneys in the Special Tax Fund will be disbursed as provided below and, pending any disbursement, will be subject to a lien in favor of the Owners of the Bonds.
All Special Tax Revenue will be deposited in the Special Tax Fund upon receipt. Prior to each Interest Payment Date, the City will withdraw from the Special Tax Fund and transfer (i) to the Fiscal Agent for deposit in the reserve accounts of the Reserve Fund, an amount which when added to the amount then on deposit therein is equal to the Reserve Requirement with respect to each series of Bonds, and (ii) to the Fiscal Agent for deposit in the Bond Fund an amount, taking into account any amounts then on deposit in the Bond Fund, such that the amount in the Bond Fund equals the principal, premium, if any, and interest due on the Bonds on the next Interest Payment Date; provided, however, that as soon as practicable after the receipt by the City of any prepayments of Special Taxes, but no later than 10 Business Days after such receipt, the City shall transfer such prepayments to the Fiscal Agent for deposit into the Prepayment Account of the Bond Fund to be used for the redemption of Bonds. At such time as deposits to the Special Tax Fund equal the principal, premium if any, and interest becoming due on the Bonds for the current Bond Year and the amount needed to restore the reserve accounts of the Reserve Fund balance to the Reserve Requirement with respect to each series of Bonds, the amount in the Special Tax Fund in excess of such amount may, at the discretion of the City, be transferred to the Surplus Account, which will occur on or after September 2nd of each year. From time to time, the City may withdraw from the Surplus Account of the Special Tax Fund amounts needed to pay the City’s administrative expenses and County fees; provided that such transfers will not be in excess of the portion of the Special Tax Revenues collected by the City that represent levies for administrative expenses. Moneys in the Surplus Account may also be transferred, at the City’s discretion, to the Improvement Fund to pay for costs of the Improvements (including reimbursements to developers for the cost of Improvements not funded from proceeds of bonds issued for the District) or authorized facility contributions, to pay the principal of, premium, if any, and interest on the Bonds or to replenish amounts in the Reserve Fund. See “THE IMPROVEMENTS – Construction and Acquisition of the Improvements.” Delinquent Payments of Special Tax; Covenant for Superior Court Foreclosure The Special Tax will be collected in the same manner and the same time as ad valorem property taxes, except at the City’s option, the Special Taxes may be billed directly to property owners or collected at a different time to meet the City’s financial obligations. In the event of a 19 delinquency in the payment of any installment of Special Taxes, the City is authorized by the Act to order institution of an action in superior court to foreclose the lien therefor.
The City has covenanted in the Fiscal Agent Agreement 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 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 the District 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 the District 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 (a) the amount so collected is deficient by less than 5% of the total amount of the Special Tax levied in the District in such Fiscal Year, but that property owned by any single property owner in the District 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) property owned by any single property owner in the District is delinquent cumulatively by more than $3,250 with respect to the current and past Special Tax due (irrespective of the total delinquencies in the District), then the City will institute, prosecute and pursue such foreclosure proceedings in the time and manner provided herein against each such property owner.
Under the Act, foreclosure proceedings are instituted by the bringing of an action in the superior court of the county in which the parcel lies, naming the owner and other interested persons as defendants. The action is prosecuted in the same manner as other civil actions. In such action, the real property subject to the special taxes may be sold at a judicial foreclosure sale for a minimum price that will be sufficient to pay or reimburse the delinquent special taxes.
The owners of the Bonds benefit from the 2023 Reserve Account of the Reserve Fund established pursuant to the Fiscal Agent Agreement; however, if delinquencies in the payment of the Special Taxes with respect to the Bonds are significant enough to completely deplete the 2023 Reserve Account of the Reserve Fund, there could be a default or a delay in payments of principal and interest to the owners of the Bonds pending prosecution of foreclosure proceedings and receipt by the City of the proceeds of foreclosure sales. Provided that it is not levying the Special Tax at the Maximum Annual Facilities Special Tax rates set forth in the Rate and Method, the City may adjust the Special Taxes levied on all property within the District subject to the Special Tax to provide an amount required to pay debt service on the Bonds and to replenish the reserve accounts within the Reserve Fund. However, such adjustment is subject to the Maximum Annual Facilities Special Tax and to the limitation described under the caption “–Special Tax Methodology” above.
Under current law, a judgment debtor (property owner) has at least 120 days from the date of service of the notice of levy to redeem the property to be sold. If a judgment debtor fails to redeem and the property is sold, his or her only remedy is an action to set aside the sale, which must be brought within 90 days of the date of sale. If, as a result of such an action a foreclosure sale is set aside, the judgment is revived and the judgment creditor is entitled to interest on the revived judgment as if the sale had not been made (California Code of Civil Procedure Section 701.680).
Foreclosure by court action is subject to normal litigation delays, the nature and extent of which are largely dependent upon the nature of the defense, if any, put forth by the debtor and 20 the condition of the calendar of the superior court of the county. Such foreclosure actions can be stayed by the superior court on generally accepted equitable grounds or as the result of the debtor’s filing for relief under the Federal bankruptcy laws. The Act provides that, upon foreclosure, the Special Tax lien will have the same lien priority as is provided for ad valorem taxes and special assessments. See “VALUE OF PROPERTY WITHIN THE DISTRICT – Priority of Lien.”
No assurances can be given that the real property subject to a judicial foreclosure sale will be sold or, if sold, that the proceeds of sale will be sufficient to pay any delinquent Special Tax installment. The Act does not require the District to purchase or otherwise acquire any lot or parcel of property foreclosed upon if there is no other purchaser at such sale.
Section 53356.6 of the Act requires that property sold pursuant to foreclosure under the Act be sold for not less than the amount of judgment in the foreclosure action, plus post-judgment interest and authorized costs, unless the consent of the owners of 75% of the outstanding Bonds is obtained. However, under Section 53356.6 of the Act, the District, as judgment creditor, is entitled to purchase any property sold at foreclosure using a “credit bid,” where the District could submit a bid crediting all or part of the amount required to satisfy the judgment for the delinquent amount of the Special Tax. If the District becomes the purchaser under a credit bid, the District must pay the amount of its credit bid into the redemption fund established for the Bonds, but this payment may be made up to 24 months after the date of the foreclosure sale. 2023 Reserve Account of Reserve Fund
In connection with the issuance of the 2020 Bonds, a Reserve Fund was established by the Fiscal Agent under the Fiscal Agent Agreement (the “Reserve Fund”). For each series of Bonds, separate reserve accounts have been and will be established within the Reserve Fund.
Accordingly, at the time of issuance of the 2023 Bonds, a reserve account for the 2023 Bonds will be established within the Reserve Fund for the benefit of the 2023 Bonds (the “2023 Reserve Account”) in the amount of the Reserve Requirement (defined herein) for the 2023 Bonds. If there are additional delinquencies after depletion of funds in the 2023 Reserve Account of the Reserve Fund, the City is not obligated to pay the 2023 Bonds or supplement the 2023 Reserve Account of the Reserve Fund except to the extent Special Tax Revenues are available for such purpose.
As used in the Fiscal Agent Agreement, “Reserve Requirement” means, with respect to any series of Bonds, the least of (i) 125% of the average Annual Debt Service with respect to the applicable series of Bonds; (ii) Maximum Annual Debt Service with respect to the applicable series of Bonds; and (iii) 10% of the original principal amount of the applicable series of Bonds (or, if the applicable series of Bonds has more than a de minimis amount of original issue discount or premium, 10% of the issue price of such series of Bonds); provided, that— (a) the Reserve Requirement for each series of Bonds shall not increase after the date of issuance of such series of Bonds;
(b) in no event shall the City be obligated to deposit an amount in any 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 restrict 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
21 (c) the City may meet all or a portion of the Reserve Requirement with respect to any series of Bonds by depositing a Qualified Reserve Fund Credit Instrument.
For each series of Additional Bonds, the Fiscal Agent shall establish a separate subaccount within the Reserve Fund for such series and moneys in each subaccount shall be held in trust by the Fiscal Agent for the benefit of the Owners of the respective series of Bonds.
The City has the right to either meet the Reserve Requirement at the time of issuance of a series of Bonds or at any time thereafter to cause the Fiscal Agent to release cash from the Reserve Fund, in whole or in part, by tendering to the Fiscal Agent: (1) a Qualified Reserve Fund Credit Instrument, and (2) in the case of a release, an opinion of Bond Counsel stating that such release will not, of itself, cause the portion of the interest on the Bonds secured thereby to become includable in gross income for purposes of federal income taxation. Upon tender of such items to the Fiscal Agent in connection with a release of cash, the Fiscal Agent will transfer such funds to the City. Prior to the expiration of any Qualified Reserve Fund Credit Instrument, if applicable, the City is obligated either to replace such Qualified Reserve Fund Credit Instrument with a new Qualified Reserve Fund Credit Instrument, or to deposit or cause to be deposited with the Fiscal Agent an amount of funds such that the funds on deposit in the Reserve Fund together with all Qualified Reserve Fund Credit Instruments held by the Fiscal Agent is at least equal to the Reserve Requirement (which funds may come from a draw by the Fiscal Agent on the Qualified Reserve Fund Credit Instrument prior to its expiration). “Qualified Reserve Fund Credit Instrument” means an irrevocable standby or directpay letter of credit or surety bond issued by a commercial bank or insurance company and deposited with the Fiscal Agent, provided that all of the following requirements are met: (a) the long-term credit rating of such bank or insurance company is rated in the top two categories (without regard to modifier) by S&P or Moody’s at the time of issuance; (b) such letter of credit or surety bond has a term of at least 12 months; (c) such letter of credit or surety bond has a stated amount at least equal to the portion of the Reserve Requirement being met by such instrument or with respect to which funds are proposed to be released pursuant to the Fiscal Agent Agreement; 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 of making payments required pursuant to the Fiscal Agent Agreement.
Whenever, on the Business Day prior to any Interest Payment Date, the amount in any reserve account within the Reserve Fund exceeds the Reserve Requirement for the applicable series of Bonds covered by such reserve account, the Fiscal Agent shall provide written notice to the Chief Financial Officer of the amount of the excess. The Chief Financial Officer shall advise the Fiscal Agent in writing of the amount, if any, of any transfer required pursuant to the Fiscal Agent Agreement, and otherwise direct the Fiscal Agent to transfer an amount equal to the excess 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 Outstanding Bonds covered by the applicable reserve account in accordance with the Fiscal Agent Agreement; provided, that to the extent that such excess results from the prepayment of Special Taxes and redemption of a portion of a series of Bonds, such amount shall be transferred to the Prepayment Account of the Bond Fund and applied to the redemption of the corresponding series of Bonds.
22 Whenever the balance in the Reserve Fund exceeds the amount required to redeem or pay the Outstanding Bonds, including interest accrued to the date of payment or redemption and premium, if any, due upon redemption, and make any other transfer required under the Fiscal Agent Agreement, the Fiscal Agent will transfer the amount in the Reserve Fund to the Bond Fund to be applied, on the next succeeding Interest Payment Date, to the payment and redemption of all of the Outstanding Bonds. If 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 will be transferred to the City, after payment of any amounts due the Fiscal Agent, to be used for any lawful purpose of the City.
Improvement Fund
Under the Fiscal Agent Agreement, there is established an Improvement Fund, which is to be held in trust by the Fiscal Agent and will be disbursed as provided in the Fiscal Agent Agreement for the payment or reimbursement of the costs of the construction and acquisition of the Improvements in accordance with the Acquisition Agreement (as described herein). Interest earnings from the investment of amounts in the Improvement Fund will be retained in the Improvement Fund to be used for the purposes of the Improvement Fund.
Upon completion of the Improvements and payment to the Master Developer or other entities that are due reimbursement for Improvements, the Fiscal Agent will transfer the amount, if any, remaining in the Improvement Fund to the Bond Fund for application to the payment of principal of and interest on the Bonds in accordance with the Fiscal Agent Agreement, and the Improvement Fund will be closed. See “THE IMPROVEMENTS.” Future Parity Bonds
In 2020 the City issued a first series of special tax bonds in the principal amount of $20,875,000, and in 2021 issued a second series in the amount of $13,290,000, The Resolution of Formation authorizes the issuance of up to $210,000,000 of special tax bonds for the District, of which the 2023 Bonds represent the third series. The City may, by a Supplemental Agreement, authorize the issuance of one or more additional series of Bonds (previously defined as the “Additional Bonds”) payable from Special Taxes and secured by the Special Tax Revenues on a parity with the 2020 Bonds, the 2021 Bonds and the 2023 Bonds, as development progresses in the District, and upon compliance by the City with the conditions set forth in the Fiscal Agent Agreement, which include the following:
(i) There shall be deposited into a reserve account of the Reserve Fund, an amount at least equal to the Reserve Requirement with respect to such Additional Bonds. (ii) For each Bond Year the Additional Bonds are Outstanding, projected Special Taxes Revenues, if levied at the maximum annual Special Tax rates per the Rate and Method, in each Fiscal Year are at least equal to 110% of Debt Service due in the Bond Year that begins in the corresponding Fiscal Year, as calculated by the special tax consultant to the City.
(iii) Both of the following conditions are met:
(A) Regarding All Parcels in the District: The aggregate value of all parcels in the District subject to the Special Tax, including then existing improvements and any facilities to be constructed or acquired with the proceeds 23 of the Additional Bonds, as determined by an MAI appraisal, assessed valuations shown on the then current County tax roll, or by a combination of both methods, is at least 3.00 times the sum of (1) the aggregate principal amount of all Bonds then Outstanding, plus (2) the aggregate principal amount of the Additional Bonds proposed to be issued, plus (3) the proportionate principal amount of any bonds then outstanding and payable from assessments which are a lien against property in the District, plus (4) a portion of the aggregate principal amount of all bonds issued under the Act, other than Bonds then Outstanding and the Additional Bonds, payable at least partially from special taxes to be levied on parcels of land subject to the Special Tax within the District (the “Other Mello-Roos Bonds”) equal to the aggregate principal amount of the Other Mello-Roos Bonds multiplied by a fraction, the numerator of which is the amount of special taxes levied for the Other Mello-Roos Bonds on parcels of land within the District subject to the Special Tax, and the denominator of which is the total amount of special taxes levied for the Other Mello-Roos Bonds on all parcels of land subject to the Special Tax against which the special taxes are levied to pay the Other Mello-Roos Bonds (such fraction to be determined based upon the special taxes which could be levied the year in which the Additional Bonds are issued, as determined by the City), based upon information from the most recent available Fiscal Year. (B) Regarding Recently Annexed Parcels: The aggregate value of the Recently Annexed Parcels, including then existing improvements and any facilities to be constructed or acquired with the proceeds of the Additional Bonds, as determined by an MAI appraisal, assessed valuations shown on the then current County tax roll, or by a combination of both methods, is at least 3.00 times the sum of (1) the Attributable Principal Amount of all Bonds then Outstanding, plus (2) the Attributable Principal Amount of the Additional Bonds proposed to be issued, plus (3) the proportionate amount of any bonds then outstanding and payable from assessments which are a lien against the Recently Annexed Parcels, plus (4) the allocation of Other Mello-Roos Bonds determined to be applicable to the Recently Annexed Parcels pursuant to subsection (A) directly above.
As used herein, “Recently Annexed Parcels” means all parcels in the District subject to the Special Tax which were annexed into the District following the closing date for the then-most recently issued series of Bonds, and “Attributable Principal Amount” means for the Bonds or any Additional Bonds, calculated separately, an amount equal to the aggregate outstanding principal amount of such Bonds and Additional Bonds multiplied by a fraction, the numerator of which is the amount of special taxes that will be levied for such Bonds and Additional Bonds on Recently Annexed Parcels in the first fiscal year in which the levy includes debt service for the applicable series of Additional Bonds, and the denominator of which is the total amount of special taxes that will be levied for the Bonds and Additional Bonds on all parcels of land in the District against which the special taxes are levied to pay the Bonds and Additional Bonds in such fiscal year.
Additional Bonds may be issued for the purpose of refunding any outstanding Bonds without meeting the foregoing conditions so long as debt service on the aggregate debt service on all Outstanding Bonds in each Bond Year after the refunding is less than aggregate debt service on the Bonds before the refunding. Nothing in the Fiscal Agent Agreement shall be interpreted to prohibit issuance of bonds or Additional Bonds secured on a subordinate basis to the Bonds.
24 In connection with the approval of development in the District, the City has agreed that payment of certain impact fees owed by the Master Developer and Lennar Homes in the District will be deferred (referred to as the “Development Impact Fee Deferral” in the Rate and Method) to allow payment of the deferred fees after the 2020 Bonds have been fully paid. The City expects to receive payment for the deferred impact fees either through continued collection of Special Taxes or through the issuance of future bonds after the 2020 Bonds have matured. If the City chooses to issue bonds to pay deferred impact fees, the remaining authorization will be available to be utilized by the City as a means therefor.
25 DEBT SERVICE SCHEDULE
The annual debt service on the 2020 Bonds and 2023 Bonds, based on the interest rates and maturity schedule for each series, and assuming no optional or extraordinary redemptions for prepayments, is set forth below.
City of Roseville
The Ranch at Sierra Vista Community Facilities District No. 1 (Public Facilities) Debt Service Schedule
Year
Ending
(Sept. 1)
2020 Bonds
Principal and
Interest
2021 Bonds
Principal and
Interest
2023 Bonds
Principal
2023 Bonds
Interest
Bonds
Total
2023
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
2044
2045
2046
2047
2048
2049
2050
2051
2052
2053
Totals
____________
Source: Underwriter.
26 THE SIERRA VISTA SPECIFIC PLAN
The Sierra Vista Specific Plan (“SVSP”) is the primary land use, policy and regulatory document used to guide development in the District and vicinity of the project area. The Specific Plan establishes a development framework for land use, affordable housing, resource protection, circulation, utilities and services, implementation and design. The intent is to promote the systematic and orderly development of the plan area. All subsequent development projects and related activities in the SVSP area are required to be consistent with the SVSP. The SVSP implements the goals and policies of the City of Roseville General Plan and augments these goals and policies by providing specific direction to reflect conditions unique to the project and Plan Area. The General Plan serves as the long-term policy guide for the physical, economic and environmental growth of the City. The property within the District was included within the SVSP at adoption, and is a component of the SVSP. The full text of the SVSP is available on the City’s website.
Land Use Concept. The SVSP area is planned primarily as a residential community, with a significant commercial and employment center along Baseline Road, which properties are not part of the District and not subject to the Special Taxes securing the Bonds. The overall mix and intensity of uses is similar to that found in adjacent portions of the City. The SVSP also provides for recreation, open space, employment and educational opportunities available to residents both within and outside the SVSP area.
The primary elements that comprise the form of the SVSP land use plan include: the residential neighborhoods; a range of commercial and employment uses, schools, parks and open space, as more particularly described below.
Residential Neighborhoods - A variety of housing styles similar to that found elsewhere in the City are planned, including affordable housing and designated age restricted neighborhoods. High density residential comprises approximately 30% of planned residential uses.
Commercial and Employment - A range of commercial and employment uses are proposed within the SVSP, including commercial mixed-use, business professional mixeduse, and community commercial uses. Conventional commercial sites are provided as well, typically along arterial roadways. The SVSP’s employment and service uses are intended to complement and further diversify the City’s employment, retail, service, and revenue base.
Neighborhood Parks - Neighborhood parks are proposed throughout the SVSP, some are located adjacent to the elementary schools and middle school sites, maximizing the potential for joint-use opportunities with the outdoor recreation facilities. Park facilities range from approximately one to approximately 10 acres in size. Some of the SVSP’s neighborhood parks would be linked to a system of paseos, providing a comprehensive network of pedestrian and bikeway connections to the SVSP’s parks and open space system. Neighborhood parks typically include a mix of soccer and baseball fields, tot lots, playgrounds, picnic area, and hard surface game courts.
Open Space - Approximately 317 acres of the SVSP are proposed as Open Space, comprising approximately 15 percent of the total project site acreage. Open Space land use and zoning is generally applied to lands that are environmentally sensitive or otherwise significant due to habitat, natural features, or man-made features. Open space 27 corridors provide for passive recreation opportunities, preservation of significant resources, viewsheds, potential floodwater conveyance and retention, resource mitigation, wildlife movement corridors, and can function to improve the interface between uses. In many locations, the preserve area accommodates a dedicated Class I pedestrian pathway to be shared with a vehicle maintenance road for maintenance activities. In addition, open space areas could accommodate utility lines and provide the conduit for drainage and space for storm water treatment and detention facilities within the SVSP area. Any disturbance or construction within open space preserve areas of the SVSP would comply with the provisions of the Army Corps of Engineers approved Open Space Management Plan and Section 404 permit requirements.
Land Use Plan. The SVSP land use plan includes a blend of residential, service, employment, open space and public uses. The SVSP is planned for a total of 8,679 dwelling units on approximately 2,064 gross acres. Proposed land uses include a total of approximately 317 acres set aside in open space; 106 acres for dedication to parks; 71 acres of public/quasi-public uses; 190 acres of community commercial; 27 acres of business professional; and 41 acres of commercial mixed use.
THE DISTRICT
Location and Description of the District and the Immediate Area Location. The District is located in the western part of the City and within the Sierra Vista Specific Plan area described above. The surrounding neighborhoods are primarily those from Blue Oaks Boulevard to the north, Woodcreek Oaks Boulevard to the east, Baseline Road to the south and the City limits to the west. Access to the District is via Westbrook Boulevard and Vista Grande Boulevard. Vista Grande Boulevard is an east-west surface street that connects with Fiddyment Road to the east. Westbrook Boulevard is a north-south surface street that provides access to the Westpark master planned community and currently terminates at the northern boundaries of the Sierra Vista Specific Plan area. Approximately 5 miles northeast of the District is State Highway 65, a north-south route that provides access to Lincoln, Wheatland and Yuba City to the north and Interstate 80 to the south.
District Overview. Property currently in the District and subject to the Special Tax is developing into 1,163 single-family homes in a development known as The Ranch at Sierra Vista.
The project is also planned to include an elementary school site of approximately 12 acres, and a multi-family site of approximately 7.5 acres planned for 118 high-density residential (HDR) units, for a total of 1,281 planned residential units.
Maps. A map showing the entire project, as well as land currently in the District, are shown on the following pages.
28 [Reserved for CFD Boundary Map (including annexations)] 29 [Reserved for Project Phasing Map]
30 OWNERSHIP OF PROPERTY WITHIN THE DISTRICT
In August 2018, Lennar Homes, Baseline 80 and Baseline P&R formed a new limited liability company called Sierra Vista Communities, LLC (the Master Developer herein). At the time of formation of the District, the Master Developer was the sole owner of all of the land in the initial District boundary. In December 2021, Lennar Homes entered into agreements with Baseline 80 and Baseline P&R pursuant to which Lennar Homes purchased and acquired all of the membership interests in Sierra Vista Communities, LLC owned by Baseline 80 and Baseline P&R.
As a result, Lennar Homes is presently the sole member and manager of Sierra Vista Communities, LLC (the Master Developer herein) and as of the date hereof, the Master Developer no longer owns any lots in the District.
Unpaid Special Taxes do not constitute a personal indebtedness of the owners of the property within the District. There is no assurance that the present property owners or any subsequent owners will have the ability to pay the Special Taxes or that, even if they have the ability, they will choose to pay the Special Taxes. An owner may elect to not pay the Special Taxes when due and cannot be legally compelled to do so. Neither the City nor any Bond Owner will have the ability at any time to seek payment directly from the owners of property within the District of the Special Tax or the principal or interest on the Bonds, or the ability to control who becomes a subsequent owner of any property within the District.
Lennar Homes has provided the information set forth in the section entitled, “OWNERSHIP OF PROPERTY WITHIN THE DISTRICT.” No assurance can be given that all information is complete. In addition, any Internet addresses included below are for reference only, and the information on those Internet sites is not a part of this Official Statement or incorporated by reference into this Official Statement.
No assurance can be given that development of land in the District will be completed, or that it will be completed in a timely manner, as described herein. The Special Taxes are not personal obligations of the Master Developer, Lennar Homes or of any subsequent landowners; the Bonds are secured only by the Special Taxes and moneys available under the Fiscal Agent Agreement. See “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS” and “SPECIAL RISK FACTORS” herein.
The following information restates or updates the corresponding information contained in the Official Statement or in any prior Periodic Reports, as applicable. Information contained in the Official Statement or in any prior Periodic Report that is not updated herein has not changed in any manner that would materially and adversely interfere with Master Developer's ability to develop the Property as described in the Official Statement.
Lennar Option Agreement with Landbank
The Master Developer no longer owns any lots within the District. The remaining undeveloped lots are subject to the Lennar Option Agreement, as described herein.
The Landbank Structure. In connection with a land banking transaction, Sierra Vista Communities, LLC, a California limited liability company ("Master Developer") and Lennar Homes of California, LLC, a California limited liability company ("Lennar Homes") transferred 651 lots in the District (the "Landbank Lots") to AG EHC II (LEN) CA 2, L.P., a Delaware limited partnership (the "Landbank Owner"). In connection therewith, Lennar Homes and the Landbank 31 Owner entered into that certain Option Agreement, dated May 27, 2022 (the "Lennar Option Agreement") whereby Lennar Homes has the option, but not the obligation, to purchase the Landbank Lots from the Landbank Owner pursuant to a takedown schedule agreed upon between Lennar Homes and the Landbank Owner.
Under the terms of the Lennar Option Agreement, the Landbank Owner agreed to provide Lennar Homes the exclusive right and option to purchase the Landbank Lots in consideration for (a) an initial option payment, which payment has been made to the Landbank Owner; (b) the covenants of Lennar Homes to timely pay the additional payments under the Lennar Option Agreement; and (c) upon exercise of the option, the payment of the purchase price for each set of lots acquired.
In addition to the Option Agreement, Lennar Homes and the Landbank Owner entered into a Construction Agreement ("Lennar Construction Agreement") requiring Lennar Homes to cause the completion and satisfaction of certain onsite and offsite improvements to the Landbank Lots (to the extent not previously completed). The Lennar Option Agreement and Lennar Construction Agreement also grant Lennar Homes the right and license to enter upon the Landbank Lots for the purpose of, among other things, constructing model homes and production dwelling units on the Landbank Lots before Lennar Homes acquires the Landbank Lots from the Landbank Owner.
During the term of the Lennar Option Agreement, Lennar Homes is obligated to pay all taxes on the Landbank Lots, including the Special Taxes.
The Landbank Lots must, in certain circumstances, be purchased in certain groups and in a specified order, although Lennar Homes may acquire more lots than scheduled and at earlier times so long as the minimum number of required lots are acquired by the applicable takedown date.
Takedown Schedule. Under the Lennar Option Agreement, the Landbank Lots must be acquired pursuant to the following schedule, although the Lennar Option Agreement contains a provision allowing for a limited number of one month extensions on acquisition of lots subject to the payment of an extension fee and other conditions. As of May 1, 2023 date of value in the Appraisal, Lennar Homes had acquired 239 of the Landbank Lots from the Landbank Owner. In accordance with the agreed upon schedule, as of June 10, 2023 Lennar Homes had acquired a total of 279 lots from the Landbank Owner. The remainder of the takedown schedule is shown in the table below.
32 Remaining Takedown Schedule
Under Lennar Option Agreement
Option
Period
Date Option
Period Expires
Number of
Lots to be
Acquired
14 07/10/2023 299
15 08/10/2023 319
16 09/10/2023 341
17 10/10/2023 363
18 11/10/2023 383
19 12/10/2023 401
20 01/10/2024 419
21 02/10/2024 437
22 03/10/2024 455
23 04/10/2024 473
24 05/10/2024 491
25 06/10/2024 505
26 07/10/2024 518
27 08/10/2024 528
28 09/10/2024 538
29 10/10/2024 548
30 11/10/2024 558
31 12/10/2024 568
32 01/10/2025 579
33 02/10/2025 585
34 03/10/2025 591
35 04/10/2025 597
36 05/10/2025 603
37 06/10/2025 609
38 07/10/2025 615
39 08/10/2025 621
40 09/10/2025 651
The takedown option under the Lennar Option Agreement expires on the earlier of (i) the last date permitted for the final takedown specified on the takedown schedule and the expiration of any applicable cure period, or (ii) the date Lennar Homes has acquired all of the Landbank Lots in accordance with the Lennar Option Agreement. The failure to timely acquire lots could result in the termination of the option and Lennar Homes will no longer have a right to purchase any of the remaining units under the Lennar Option Agreement.
In the event that Lennar Homes does not exercise its option on the Landbank Lots or the right to purchase the Landbank Lots expires or is terminated, the Landbank Owner being an investor only and not a homebuilder, would likely attempt to sell such Landbank Lots to another merchant builder.
The Landbank Owner. The Landbank is an affiliate of, and managed by, Angelo Gordon & Co., L.P. (“Angelo Gordon”). Angelo Gordon is a privately-held alternative investment firm founded in 1988 and headquartered in New York, with associated offices across the United States, Europe and Asia. Angelo Gordon manages approximately $52 billion across a broad range of credit and real estate strategies. Affiliates of the Landbank Owner have entered into landbanking arrangements with Lennar Corporation and its affiliated entities on approximately 216 residential development projects as of September 30, 2022. 33 Information Regarding Lennar Homes
Lennar Homes is based in Irvine, California. Lennar Homes has been in the business of developing residential real estate communities in California since 1996. On February 1, 2022, Lennar Homes of California, Inc., a California corporation, was converted to a California limited liability company and is now known as Lennar Homes of California, LLC, a California limited liability company (“Lennar Homes”). All references herein to Lennar Homes prior to February 1, 2022 shall mean Lennar Homes of California, Inc. a California corporation, and all references herein to Lennar Homes on and after February 1, 2022 shall mean Lennar Homes of California, LLC, a California limited liability company.
Lennar Homes is wholly-owned by U.S. Home, LLC, a Delaware limited liability company (“U.S. Home”). U.S. Home is wholly-owned by Lennar Corporation, which is based in Miami, Florida. Founded in 1954, Lennar Corporation completed its initial public offering in 1971 and listed its common stock on the New York Stock Exchange in 1972. Lennar Corporation’s Class A and Class B common stock are listed on the New York Stock Exchange under the symbols “LEN” and “LEN.B.” respectively. Lennar Corporation is one of the largest homebuilders in the United States based on home sales revenues and net earnings, and operates under a number of brand names, including Lennar Homes and U.S. Home. Lennar Homes primarily develops residential communities both within the Lennar family of builders and through consolidated and unconsolidated partnerships in which Lennar Homes maintains an interest.
Lennar Corporation is subject to the informational requirements of the Exchange Act and in accordance therewith files reports, proxy statements and other information with the SEC. Such filings, particularly the Annual Report on Form 10-K and its most recent Quarterly Report on Form 10-Q, set forth, among other things, certain data relative to the consolidated results of operations and financial position of Lennar Corporation and its consolidated subsidiaries, including Lennar Homes, as of such dates.
The SEC maintains a website that contains reports, proxy and other information statements and other information regarding registrants that file electronically with the SEC, including Lennar Corporation. The address of such website is www.sec.gov. All documents filed by Lennar Corporation pursuant to the requirements of the Exchange Act after the date of this Periodic Report will be available for inspection in such manner as the SEC prescribes.
Copies of Lennar Corporation’s Annual Report and related financial statements, prepared in accordance with generally accepted accounting standards, are available from Lennar Corporation’s website at www.lennar.com. The foregoing website addresses and references to filings with the SEC are given for reference and convenience only, and the information on such websites and on file with the SEC does not form a part of this Official Statement and is not incorporated by reference herein. No representation is made in this Official Statement as to the accuracy or adequacy of the information contained on such websites. Lennar Corporation and Lennar Homes are not obligated to advance funds for construction or development or to pay ad valorem property taxes or the Special Taxes and investors should not rely on the information and financial statements contained on such websites in evaluating whether to buy, hold or sell the Bonds. The information contained on such websites may be incomplete or inaccurate and has not been reviewed by the City or the Underwriter.
34 DEVELOPMENT WITHIN THE DISTRICT
Entitlements and Anticipated Development
The Master Developer and Lennar Homes have provided the following information with respect to entitlements and current and anticipated development of land in the District. No assurance can be given that all information is complete. No assurance can be given that development of land in the District will be completed, or that it will be completed in a timely manner. Since the ownership of the parcels is subject to change, the development plans outlined below may not be continued by the subsequent owners if parcels are sold, although development by any subsequent owner will be subject to the SVSP, the Development Agreement described herein and the policies and requirements of the City. No assurance can be given that the plans or projections detailed below will actually occur.
Overview. Land within the current District boundary is developing into 1,163 single-family homes, consistent with the SVSP land uses configured to reinforce the neighborhood identity and sense of community. See “THE SIERRA VISTA SPECIFIC PLAN” above.
Entitlements. The entitlements permit a development proposal related to a particular parcel to proceed through tentative map subdivision and design-review permitting processes to final mapping provided the development application is in accord with the entitlements and the final map conditions. The Master Developer received full land use approval in 2010, including, but not limited to, approval of Specific Plan Zoning and a Development Agreement, and subsequently received a Section 404 (wetlands) permit, California Water Board Section 401 Certification, and U.S. Fish and Wildlife Service Biological Opinion. The Master Developer also received a grading permit and site improvement plans to complete all planned 1,163 lots in the District from the City.
There are no units in the current District boundary that are designated as affordable highdensity residential units not subject to a Special Tax. The Master Developer may annex additional lots into the District in the future. However, the timing of each annexation and number of lots in each annexation may vary based on market conditions.
Table 1 on the following page shows the entitlements for all of the land within the current boundary of the District and remaining in the Future Annexation Area. 35 Table 1
City of Roseville
The Ranch at Sierra Vista Community Facilities District No. 1 (Public Facilities) Planned Taxable Residential Units in District and Future Annexation Area Current District Boundary
Village Land Use Net Acres
Planned
Units
Product
Name
FY 22-23
Max Tax
Rate/Unit
FY22-23
Max Tax
Revenues
KT-2 LDR 23.43 125 Lumiere $1,987 $248,418
KT-3A LDR 20.72 110 Meribel(2) 1,987 218,608
KT-3B LDR 17.55 97 Andorra 1,987 192,773
KT-4 LDR 15.64 82 Andorra 2,012 164,950
KT-5 LDR 23.66 140 St. Moritz 1,987 278,228
KT-21A MDR 17.41 135 Windham & Breckenridge 2,448 330,480 KT-21B MDR 20.35 152 Windham & Breckenridge 2,448 372,096 KT-1A & 1B LDR 31.8 155 Meribel & Lumiere 3,009 [307,985] KT-20A & 20B MDR 23.1 167 Windham & Breckenridge 2,550 [408,816] Total 193.66 1,163
Future Annexation Area (Not in District)
Village Land Use Net Acres
Planned
Units
KT-30 HDR 7.5 118
KT-61 School 12.1 --
KT-52 Park 7.7 --
KT-51 Park 4.3 --
KT-80B Open Space 17.3 --
Total 103.8 118
___________
(1) KT-3A is planned to include 88 Meribel homes and a mix of Andorra, Lumiere and St. Moritz model homes.
Development Agreement
General. The City entered into a Development Agreement, dated March 19, 2010 (the “Development Agreement”) with Baseline P&R, LLC, a California limited liability company (“Baseline P&R”), which subsequently assigned its rights and obligations thereunder to the Master Developer. All of the property in the District and Future Annexation Area is subject to the requirements of the Development Agreement, as well as the SVSP. The Development Agreement was entered into in accordance with Sections 65864 through 65869.5 of the California Government Code, as implemented through Article V, Chapter 19.84 of the City’s Zoning Ordinance No. 802.
The Development Agreement is the primary implementation tool for the SVSP and is intended to create a binding contract between the City and the Master Developer, and their assigned successors in interest, which set forth the needed infrastructure improvements, park dedication requirements, timing and method for financing improvements and other specific performance obligations of the City and the Master Developer and its successors, including obligations related to development of the property in the District, with the terms, conditions, rules, regulations, entitlements, vested rights and other provisions relating to the development of the property in the District according to the SVSP entitlements. Included are provisions relating to 36 infrastructure improvements, public dedication requirements, landscaping amenities and other obligations of the parties. The Development Agreement has a 30-year term, runs with the property, and may be modified only by mutual consent of the City and the Master Developer and in a manner consistent with the SVSP. With the Development Agreement in place, subject to compliance with the terms of the Development Agreement, construction of homes within the District may occur upon City approval of subdivision maps, satisfaction of certain design requirements and conditions of such maps and issuance of building permits.
Land use and development entitlements granted under the Development Agreement for property in the District are consistent with the SVSP as described under the caption “THE SIERRA VISTA SPECIFIC PLAN” and summarized above.
Improvements. The Development Agreement sets forth the responsibility of the Master Developer and its successors for a portion of the costs of certain public improvements required for its development within the Sierra Vista Specific Plan; Lennar Homes does not believe any of these improvements will impair its ability to timely obtain building permits.
Funding of the Improvements with the 2023 Bonds and Additional Bond proceeds will satisfy a portion, but not all, of the relevant obligations of the District for infrastructure improvements required by the Development Agreement. See Table 5 herein for a sources and uses table. The improvements not funded from the 2023 Bonds and Additional Bond proceeds or Special Taxes are required to be funded by the Master Developer and subsequent successors in interest. See “THE IMPROVEMENTS” below.
No Affordable Units. There are no affordable unit requirements within the current District boundary.
Information Regarding the Master Developer
Environmental Matters
Flood Hazard Map Information. According to the Federal Emergency Management Agency’s flood insurance rate maps (Flood Area Panel Number 060243, with an effective date of November 2, 2018), the developable portions of the property in the District are located within Flood Zone X, described as areas of minimal flooding (outside of the 100 and 500-year floodplains).
Seismic Conditions. The property expected to be developed as part of the project (including land in the District) is not located within a seismic special studies zone, designated by the California State Division of Mines and Geology, in accordance with the Alquist-Priolo Special Study Zone Act of 1972.
Environmental Mitigation. According to the Master Developer, all environmental mitigation requirements have been met for all of the lots within the current boundary of the District.
Planned and Ongoing Development
Backbone Infrastructure. The Master Developer is responsible for the cost of construction of the infrastructure improvements and other costs required to complete development in the District boundary. Upon completion of various components of such infrastructure, the Master Developer is eligible to be reimbursed for the cost thereof from proceeds 37 of the Bonds as provided in an acquisition agreement entered into with the City, provided such proceeds are available. See “THE IMPROVEMENTS – Estimated Cost of the Improvements.” As of May 1, 2023, the Master Developer had completed the vast majority of the backbone and in-tracts infrastructure for the project, with approximately $12.2 million remaining. For additional details on the costs expended by the Master Developer and its projected development timeline, see Table 4 herein.
In-Tract Infrastructure. The in-tract infrastructure required for phase 1 and phase 2 have the project has been 100% completed by the Master Developer.
Utilities. All typical urban utility services for finished lots are available at the lots in the District or will be extended to the lots at the time of home-building activties. These utilities include electric power, natural gas, telephone, cable television, water, refuse, and sanitary sewer and storm water facilities. The City provides electric, water, sewer refuse and storm water facilities, and police and fire services. Pacific Gas & Electric provides natural gas.
Home Plans and Sizes Lennar Homes expects to continue development in the District into six distinct neighborhoods: “Lumiere,” “Meribel,” “St. Moritz,” “Andorra,” “Windham,” and “Breckenridge. Production home construction has been ongoing, with 23 model homes (in KT-3A and KT-21A) completed and 545 homes sold as of May 1, 2023. The following table sets forth Lennar Homes’ expectations as of June 1, 2023 with respect to floorplans and sizes of homes of the remaining 618 homes planned for the land currently in the District. Sales prices shown are subject to change and exclude options, upgrades, lot premiums and any incentives or price reductions being offered. The pace of home construction in the District will be determined by Lennar Homes, largely by market conditions and demand for homes. Additional details regarding Lennar Homes’ planned sales activities are set forth in the table[s] below. However, no assurance can be given that such timing will be accomplished.
Table 2A
City of Roseville
The Ranch at Sierra Vista Community Facilities District No. 1 (Public Facilities) Planned Home Sale Plans and Sizes - Lennar Homes
As of May 1, 2023
Final Map
Village(s)
Neighborho
od
Name
No.
Lots
Lot
Size Sq. Feet Range
Base Price
Range
Production
Start
Last
Close
KT-2A-2B Lumiere 55x105 2,197-3,569
KT-3A (part) Meribel (1) 60x100 2,362-3,312
KT-3A (part)-3B-4 Andorra (1) 55x100 1,772-3,001
KT-5 St. Moritz 50x100 2,119-3,033
KT-21A-21B Windham 45x80 1,774-2,190
KT-21A-21B
Breckenridg
e 50x80 2,307-2,804
TOTAL 618
Sold Homes 545
TOTAL 1,163
(1) Village KT-3A is planned to include 88 Meribel homes and a mix of Andorra, Lumiere and St. Moritz model homes.
Source: Lennar Homes.
38 Table 2B
City of Roseville
The Ranch at Sierra Vista Community Facilities District No. 1 (Public Facilities) Development and Sale Status for Residential Parcels
As of May 1, 2023
Village
HS Size/ Land
Use Product
# of
HS Permits Sales Closed Complete
Phase 1 -
KT-2A 55x105 Lumiere 70 70 70 70 70
KT-2B 55x105 Lumiere 55 55 41 34 34
KT-3A 60x100 Meribel 83 65 65 65 65
KT-3A 60x100 Lumiere (Mod) 4 4 0 0 4
KT-3A 60x100 Meribel (Mod) 3 3 0 0 3
KT-3A 60x100
St. Mortiz
(Mod) 4 4 0 0 4
KT-3A 60x100 Andorra (Mod) 4 4 0 0 4
KT-5A 50x100 St. Mortiz 69 69 69 69 69
KT-5A 50x100 St. Mortiz 71 67 43 35 35
KT-3A 55x100 Meribel 2 0 0 0 0
KT-3A 55x100 Andorra 10 8 8 5 5
KT-3B 55x100 Andorra 97 97 96 96 96
KT-4 55x100 Andorra 82 28 10 0 0
TOTAL PHASE 1 554 374 474 389 403
Phase 2 -
KT-21A 45x80 Windham 65 63 64 48 48
KT-21A 45x80 Windham 4 4 0 0 4
KT-21B 45x80 Windham 36 16 5 0 0
KT-21A 50x80 Breckenridge 62 61 59 50 50
KT-21A 50x80 Breckenridge 4 4 0 0 4
KT-21B 50x80 Breckenridge 116 23 1 0 0
KT-1A 60x105-110 Meribel 60 46 30 16 16
KT-1B 60x105-110 Meribel 19 19 19 19 19
KT-1B 55x60-110 Lumiere 76 12 0 0 0
KT-20A 50x80 Breckenridge 99 0 0 0 0
KT-20B 45x80 Windham 68 0 0 0 0
TOTAL 1,163 722 581 507 530
________________________
Source: Lennar Homes.
39 THE IMPROVEMENTS
Eligible Facilities
The Bonds will provide a funding source for moneys expended to finance the public infrastructure and facilities authorized to be financed by the levy of Special Taxes in the District, which are referred to herein as the Improvements. The list of eligible Improvements is set forth in Exhibit A to the Resolution of Formation, adopted by the City Council, as the legislative body of the District. These Improvements generally consist of backbone roads and other transportation improvements, potable and non-potable water system improvements, drainage system improvements, wastewater system improvements, solid waste improvements, parks and paseos, and open space.
Estimated Cost of the Improvements
Funding Sources. In connection with the issuance of the Bonds, the City and the Master Developer have entered into a Funding, Construction and Acquisition Agreement (the “Acquisition Agreement”) which provides that the Master Developer will construct (or cause to be constructed or funded) the Improvements and related facilities, and the City, upon completion of construction and acceptance by the City, or through progress payments prior to completion of the entire improvement, will purchase the Improvements or reimburse the Master Developer for expended amounts using a portion of the proceeds of the Bonds pursuant to the terms of the Acquisition Agreement. The Master Developer will be responsible for the portion of the cost of construction of the Improvements not paid with Bond proceeds. There are currently no construction loans or deeds of trust encumbering the property in the initial boundary of the District.
The Rate and Method provides that the funding of improvement costs can also be made from collections of the Special Tax available as the “pay-as-you-go” component of Special Taxes.
The pay-as-you-go funding component is expected to provide for funding of the cost of a portion of the Improvements in excess of the amount provided from bond proceeds (if such proceeds are not sufficient) through annual Special Tax collections in excess of the amount needed to pay the debt service. The City contemplates utilizing this funding mechanism during the time the Bonds are outstanding. Additionally, after the final maturity date of the Bonds and any additional bonds issued to reimburse developers for costs of the Improvements, the City expects to continue to levy Special Taxes for payment of the “Development Impact Fee Deferral” (as defined in the Rate and Method) which levy may secure future bonds issued after payment in full of the Bonds and any additional bonds issued under the Fiscal Agent Agreement. See “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS – Special Tax Methodology” and “ – Special Tax Fund.
Sources and Uses. The following table shows the Master Developer’s estimated sources and uses of funds for the construction of the backbone infrastructure and in-tract infrastructure needed for all 1,163 lots planned for The Ranch at Sierra Vista development project. A portion of these costs are eligible for reimbursement from the proceeds of the Bonds and other District sources.
40 Table 3
City of Roseville
The Ranch at Sierra Vista Community Facilities District No. 1 (Public Facilities) Proposed Financing Plan of Master Developer
As of May 1, 2023
CASH FLOW Total
Complete
5/1/23
Complete
5/1/23
Remainder
of Project
INFLOW
Land Sales $101,260,301 100% $101,260,301 $0
2020 Bond proceeds 19,759,674 100% 19,759,674 0
2021 Bond proceeds 12,987,170 100% 12,987,170 0
Estimated 2023 Bond proceeds 9,710,000 0% 0 9,710,000
Credits/Reimb
Gas/JT 5,566,603 27% 1,479,669 4,086,934
Credits: SVSP & Other 66,574,441 45% 30,023,967 36,550,474 PH1 Cost Reimb. From Adjacent Commercial Owners 12,607,156 100% 12,607,156 0 Cost Share Adjacent Owners 3,000,000 62% 1,871,957 1,128,043 Total $231,465,345 78% $179,989,894 $51,475,451
OUTFLOW
Land Purchase $37,317,747 100% $37,317,747 $0
Intracts - PH1 30,891,144 100% 30,891,144 0
Intracts - PH2 35,165,862 84% 29,519,970 5,645,892
Infrastructure
Baseline Rd. 1 & 2 $18,983,274 86% $16,356,343 $2,626,931 Westbrook/Vista Grande Blvd. 16,305,462 99% 16,130,223 175,239 Spine Streets 28,805,649 99% 28,640,972 164,677
Offsite Sewer/Water 13,104,351 78% 10,271,011 2,833,340 Common Costs 4,490,728 82% 3,673,638 817,090
Fish & Game/Wetland 4,813,080 100% 4,813,080 0
PH1 Credits given to Adjacent Commercial Owners 12,607,156 100% 12,607,156 0 Total $202,484,453 94% $190,221,284 $12,263,169
Net $28,980,892 ($10,231,390) $39,212,282
Developer Self Fund Amount $0 $10,231,390
______________________ Source: Master Developer
41 VALUE OF PROPERTY WITHIN THE DISTRICT
The Appraisal
General. Integra Realty Resources, Sacramento, California (the “Appraiser”) prepared an appraisal report, with a date of value of May 1, 2023 (the “Appraisal”). The Appraisal was prepared at the request of the City. The Appraisal is set forth in APPENDIX B hereto. The description herein of the Appraisal is intended for limited purposes only; the Appraisal should be read in its entirety.
The conclusions reached in the Appraisal are subject to certain assumptions and qualifications which are set forth in the Appraisal.
Property Appraised. The Appraised Property consist of all of the taxable property currently in the District, which is developing into 1,163 single-family residential units. As of the date of value (May 1, 2023), the land was owned by (i) Lennar Homes, (ii) the Landbank Owner, and (iii) individual homeowners. The Appraised Property excludes property in the District designated for public and quasi-public purposes. See “THE DISTRICT.”
Value Estimates. The Appraisal provides an estimated value of the Appraised Property.
With respect to homes owned by individual homeowners and by Lennar Homes, a value per parcel was assigned based on the smallest floor plan for each applicable product type. With respect to land owned by the Landbank Owner, the Appraiser provided a market value, in bulk, as of the date of value (based on the hypothetical condition the improvements to be financed by the 2023 Bonds were in place as of the date of valuation). The bulk sale value represents the most probable price, in a sale of parcels within the District, to a single purchaser or sales to multiple buyers, over a reasonable absorption period discounted to present value. The valuation accounts for the impact of the lien of the Special Tax and represents the estimated market value (based on the hypothetical condition and other conditions and limitations of the Appraisal) of all the taxable land in the District.
The County Assessor has reflected home values for 194 completed single family homes on the fiscal year 2023 assessment roll (the “Assessed Property”). For the balance of the taxable property in the District, the City authorized the preparation of an appraisal report with a May 1, 2023 date of value (the “Appraisal”) for property planned for 969 homes (collectively, the “Appraised Property”). The Assessed Property and the Apprised Property together provide a composite value for the District. As of the May 1, 2023 date of value, using the methodologies described in the Appraisal and subject to the limiting conditions and special assumptions set forth in the Appraisal, and based on the ownership of the property as of that date, together with the assessed value of property in the District not appraised, is $434,519,390, as follows:
Ownership
No. of
Parcels/Lots
Aggregate
Value
Aggregate Value of Appraised Properties 969 $311,000,000 Aggregate Value of Existing Homes based on Assessed Value 194 123,519,390 Total Composite Value 1,163 $434,519,390
Hypothetical Condition. The value estimate is subject to a hypothetical condition, defined as that which is contrary to what exists but is supposed for the purposes of analysis. For purposes of the hypothetical condition, the Appraiser assumed that certain proceeds of the 2023 Bonds are available to finance the completion of certain infrastructure improvements. 42 Assumptions and Limiting Conditions. In considering the estimate of value evidenced by the Appraisal, the Appraisal is based upon a number of standard and special assumptions which affect the estimates as to value, some of which include the following. See “APPENDIX B – THE APPRAISAL.”
• According to the Master Developer, total remaining development costs are $12,263,169. Estimated bond construction funds for the project are $9,710,000, which are eligible to be used for infrastructure costs and/or impact fees. As such, only $2,553,169 in infrastructure costs will be accounted for in the appraiser’s analysis. If, at some future date, it is determined that cost estimates or input factors yielding the anticipated Developer contribution for remaining costs are different than actual, the values contained herein could be affected.
Exposure Time. Exposure time is the length of time the subject property would have been exposed for sale in the market had it sold on the effective valuation date at the concluded market value. Exposure time is always presumed to precede the effective date of the Appraisal. Based on the Appraiser’s review of recent sales transactions for similar properties and its analysis of supply and demand in the local land market, the Appraiser’s opinion was that the probable exposure time for the appraised property at the concluded market value stated previously is 12 months.
Marketing Time. Marketing time is an estimate of the amount of time it might take to sell a property at the concluded market value immediately following the effective date of value. As the Appraiser foresees no significant changes in market conditions in the near term, the Appraiser’s opinion was that a reasonable marketing period for the appraised property in bulk is likely to be the same as the exposure time. Accordingly, the Appraiser estimated the marketing period at 12 months.
No assurance can be given that a sale of the property in bulk by Lennar Homes could be achieved or attained over an extended period of time; real estate is cyclical in nature, and it is impossible to accurately forecast and project specific demand over a particular period. See “SPECIAL RISK FACTORS – Property Values and Property Development.” Limitations of Appraisal Valuation. Property values may not be evenly distributed throughout the District; thus, certain parcels may have a greater value than others. This disparity is significant because in the event of nonpayment of the Special Tax, the only remedy is to foreclose against the delinquent parcel.
No assurance can be given that the foregoing valuation can or will be maintained during the period of time that the 2023 Bonds are outstanding in that the City has no control over the market value of the property within the District or the amount of additional indebtedness that may be issued in the future by other public agencies, the payment of which, through the levy of a tax or an assessment, may be on a parity with the Special Taxes. See “–Overlapping Liens and Priority of Lien” below.
For a description of certain risks that might affect the assumptions made in the Appraisal, see “SPECIAL RISK FACTORS” herein.
Value to Special Tax Burden Ratios
In comparing the value of the real property within the District and the principal amount of the Bonds, it should be noted that only the real property upon which there is a delinquent Special 43 Tax can be foreclosed upon, and the real property within the District cannot be foreclosed upon as a whole to pay delinquent Special Taxes of the owners of such parcels within the District unless all of the property is subject to a delinquent Special Tax. In any event, individual parcels may be foreclosed upon separately to pay delinquent Special Taxes levied against such parcels.
Other public agencies whose boundaries overlap those of the District could, without the consent of the City and in certain cases without the consent of the owners of the land within the District, impose additional taxes or assessment liens on the land within the District. Property owners can also voluntarily add Property Assessed Clean Energy (PACE) assessment liens on their property to finance energy efficiency improvements. The lien created on the land within the District through the levy of such additional taxes or assessments may be on a parity with the lien of the Special Tax. In addition, construction loans may be obtained by Lennar Homes, and home loans may be obtained by ultimate homeowners. The deeds of trust securing such debt on property within the District, however, will be subordinate to the lien of the Special Tax. 44 Value to Lien Ratios. The following table sets forth appraised value, maximum special tax, allocable District debt, and value to lien ratios for each of the villages in the District, based on the estimated value of land in the District as of May 1, 2023 (the Appraiser’s date of value), and on the projected special tax levy for Fiscal Year 2023-24 given development as of such date.
Table 4
City of Roseville
The Ranch at Sierra Vista Community Facilities District No. 1 (Public Facilities) Value to Lien Ratios – By Phase, Ownership and Development Status as of May 1, 2023
Phase / Property Owner /
Development Status (1)
No of
Parcels
Planned
Units
Composite
Value (2)
FY 2023-
24 Maximum
Tax (4)
Projected
FY 2023-
24 Special
Tax Levy *
(3)
Allocable
Debt CFD
Bonds * (5)(6)
% of Total
CFD
Bonded
Debt (6)
Overlapping
Debt (7)
Total Direct
&
Overlapping
Debt *
Average
Value to
Lien
Ratio *
Individual Homeowner - Complete (8) 545 545 $332,382,262 $1,201,261 $1,201,261 $22,959,678 46% $4,527,211 $27,486,889 12.1 Lennar/Landbank owned
Completed homes 30 30 16,827,128 66,921 66,921 1,279,060 3% 349,822 1,566,446 10.7 Under Construction (9) 208 208 38,823,130 511,943 511,943 9,784,756 20% 135,274 9,442,395 4.1 Finished Lots 213 213 28,496,721 535,235 535,235 10,229,936 20% 150,897 9,881,461 2.9 Final Map Lots (MDR) KT-20B 68 68 7,198,882 176,868 176,868 3,380,475 7% 40,621 3,256,079 2.2 Undeveloped (MDR) KT-20A 1 99 10,791,266 257,499 123,272 2,356,095 5% 59,139 4,740,467 2.3 Total 1,065 1,163 $434,519,389 $2,749,727 $2,615,500 $49,990,000 100% $5,262,964 $56,373,737 7.7 * Preliminary, subject to change. (1) Ownership and development status as of May 1, 2023 . For the purposes of determining each parcel's development status for the District's FY 2023-24 Special Tax levy, each parcel for which a Final Small Lot Subdivision Map was recorded prior to May 1, 2023 is considered a Developed Parcel and shall be taxed at 100% of its Maximum Special Tax before any other taxable parcels are levied. Any parcel for which a Small Lot Tentative Map was approved prior to May 1, 2023 and which has not recorded a Small Lot Final Map by May 1, 2022 is considered a Tentative Map Parcel.
(2) Composite Value represents the Appraised Values as of May 1, 2023 or the latest Assessed Value. Those parcels not appraised are instead valued above using Assessed Value. Existing single-family homes showing a complete assessed value for both land and improvements were not appraised. (3) Special Tax and the Projected Special Tax Levy in this table refer to Special Facilities Tax (4) Maximum Tax in this table refers to Maximum Annual Facilities Special Tax. (5) Represents the outstanding balance of the 2020 Bonds and 2021 Bonds together with the estimated par amount of $15,960,000* of the 2023 Bonds. (6) This table allocates the CFD Bonded Debt based upon each parcel's share of the District's FY 2023-24 Maximum Special Tax. (7) Overlapping debt of the District parcels as of June 1, 2023 as summarized under the “Direct and Overlapping Tax and Assessment Debt” table prepared by California Municipal Statistics, Inc. No direct charges related to PACE liens secured by Special Taxes were levied onto the District parcels in FY 2022-23. (8) Represents homes within the District held by individual homeowners as of May 1, 2023 per Appraiser and Master Developer. (9) A partially completed home represents a single family lot upon which a building permit has been issued together with construction towards the completion of the structure footings or more.
Sources: Phase, Ownership and Development Status - Appraiser and Developer; Land Use and Number of Units - Sierra Vista Specific Plan; Appraised Values - Integra Realty Resources, Inc.; Assessed Values - Placer County; Overlapping Debt - California Municipal Statistics, Inc, as compiled by Willdan Financial Services and Maximum Facilities Special Tax - Willdan Financial Services.
45 Special Tax Collections and Delinquencies
The following table shows special tax collection and delinquencies for the District.
Table 5
City of Roseville
The Ranch at Sierra Vista Community Facilities District No. 1 (Public Facilities) Special Tax Collections and Delinquencies
as of May 15, 2023
Fiscal Year
Annual
Special Tax
Levy
No. of
Parcels
Levied
Amount
Collected (1)
Amount
Delinquent (1)
No. of
Parcels
Delinquent
Percent of
Levy
Delinquent
2021/22 $1,067,598 351 $1,067,598 $0 0 0.00%
2022/23 $1,772,667 936 $871,373 $14,960 15 0.84%
(1) Delinquent amounts and collections shown above do not include penalties, interest or fees.
Source: Placer County Tax Collector, compiled by Willdan Financial Services. 46 Table 5A
City of Roseville
The Ranch at Sierra Vista Community Facilities District No. 1 (Public Facilities) Value to Lien Ratios by Ownership and Development
CFD Bonded Debt Allocated by Projected Special Tax Levy Status as of May 1, 2023
Property Owner /
Development Status (1)
No of
Parcels
Planned
Units
Composite
Value (2)
FY 2023-24
Maximum
Tax (3)
Projected FY
2023-24
Special Tax
Levy * (4)(5)
% of Total
CFD Bonded
Debt (7)
Allocable
Debt CFD
Bonds * (6)(7)
Overlapping
Debt (8)
Total Direct
&
Overlapping
Debt *
Average
Value to Lien
Ratio * (7)
Individual Homeowner - Completed
Homes (9) 545 545 $332,382,262 $1,201,261 $1,201,261 $22,959,671 $4,527,211 45.93% $27,486,882 12.09 Lennar/Landbank Owned Completed
Homes 30 30 $16,827,128 $66,921 $66,921 $1,279,061 $349,822 2.56% $1,628,883 10.33 Homes Under Construction (10) 208 208 38,823,131 511,943 511,943 9,784,759 135,275 19.57% 9,920,034 3.91 Finished Lots (LDR) 117 117 16,830,840 295,527 295,527 5,648,397 92,664 11.30% 5,741,060 2.93 Finished Lots (MDR) 96 96 11,665,881 239,708 239,708 4,581,538 58,233 9.16% 4,639,771 2.51 Final Map Lots (MDR) KT-20B 68 68 7,198,882 176,868 176,868 3,380,474 40,620 6.76% 3,421,094 2.10 Undeveloped (MDR) KT-20A 1 99 10,791,266 257,499 123,272 2,356,101 59,138 4.71% 2,415,239 4.47 Subtotal - Lennar/Landbank Owned 520 618 $102,137,128 $1,548,466 $1,414,239 $27,030,330 $735,752 54.06% $27,766,081 3.68 Total 1,065 1,163 $434,519,390 $2,749,727 $2,615,500 $49,990,000 $5,262,964 100.00% $55,252,964 7.86 * Preliminary, subject to change.
(1) Ownership and development status as of May 1, 2023 . (2) Composite Value represents the Appraised Values as of May 1, 2023 or the latest Assessed Value. Existing single-family homes showing a complete assessed value for both land and improvements were not appraised.
Those parcels not appraised are instead valued above using Assessed Value. (3) Maximum Tax in this table refers to Maximum Annual Facilities Special Tax. (4) Special Tax and the Projected Special Tax Levy in this table refer to Special Facilities Tax (5) The Projected FY 2023-24 Special Tax Levy assumes the levy of the District's Final Map ("Developed") Property at 100% of the Maximum Special Tax while the District's undeveloped parcel would be taxed at approximately 48% of its Maximum Special Tax.
(6) Represents the $34,030,000 outstanding principal balance of the 2020 Bonds and 2021 Bonds together with the [estimated]* par amount of 2023 Bonds. (7) This table allocates the CFD Bonded Debt using each parcel's share of the District's Projected FY 2023-24 Special Tax levy. This allocation method results in the District's undeveloped parcel receiving a higher value to lien
ratio than if the bonded debt was allocated by each parcel's share of the total Maximum Special Tax. (8) General Obligation Bonded debt of the District parcels as of June 1, 2023 as summarized under the “Direct and Overlapping Tax and Assessment Debt” table prepared by California Municipal Statistics, Inc. No direct charges
related to PACE liens secured by Special Taxes were levied onto the District parcels in FY 2022-23. (9) Represents homes within the District held by individual homeowners as of May 1, 2023. (10) Each Home Under Construction represents a single family lot upon which a building permit has been issued together with construction towards the completion of either the structure's footings or more.
Sources: Phase, Ownership and Development Status - Appraiser and Developer; Land Use and Number of Units - Sierra Vista Specific Plan; Appraised Values - Integra Realty Resources, Inc.; Assessed Values - Placer County; Overlapping Debt - California Municipal Statistics, Inc, as compiled by Willdan Financial Services and Maximum Facilities Special Tax - Willdan Financial Services. 47 Table 5B
City of Roseville
The Ranch at Sierra Vista Community Facilities District No. 1 (Public Facilities) Value to Lien Ratios by Ownership and Development
CFD Bonded Debt Allocated by Maximum Facilities Tax
Status as of May 1, 2023
Property Owner/
Development Status (1)
No of
Parcels
Planned
Units
Composite
Value (2)
FY 2023-
24 Maximum
Tax (3)
Projected
FY 2023-
24 Special
Tax Levy*
(4)(5)
Allocable
Debt CFD
Bonds *
(6)(7)
% of
Total
CFD
Bonded
Debt (7)
Overlapping
Debt (8)
Total Direct
&
Overlapping
Debt *
Average
Value to
Lien
Ratio *(7)
Homeowner- Completed Homes( 9) 545 545 $332,382,262 $1,201,261 $1,201,261 $21,838,904 43.69% $4,527,211 $26,366,115 12.61 Lennar/Landbank Owned
Completed Homes 30 30 $16,827,128 $66,921 $66,921 $1,216,624 2.43% $349,822 $1,566,446 10.74 Homes Under Construction (10) 208 208 38,823,131 511,943 511,943 9,307,120 18.62% 135,275 9,442,395 4.11 Finished Lots (LDR) 117 117 16,830,840 295,527 295,527 5,372,673 10.75% 92,664 5,465,337 3.08 Finished Lots (MDR) 96 96 11,665,881 239,708 239,708 4,357,892 8.72% 58,233 4,416,125 2.64 Final Map Lots (MDR) KT-20B 68 68 7,198,882 176,868 176,868 3,215,458 6.43% 40,621 3,256,079 2.21 Undeveloped (MDR) KT-20A 1 99 10,791,266 257,499 123,272 4,681,329 9.36% 59,138 4,740,467 2.28 Subtotal - Lennar/Landbank Owned 520 618 $102,137,128 $1,548,466 $1,414,239 $28,151,096 56.31% $735,753 $28,886,849 3.54 Total 1,065 1,163 $434,519,390 $2,749,727 $2,615,500 $49,990,000 100.00% $5,262,964 $55,252,964 7.86 * Preliminary, subject to change.
(1) Ownership and development status as of May 1, 2023. (2) Composite Value represents the Appraised Values as of May 1, 2023 or the latest Assessed Value. Existing single-family homes showing a complete assessed value for both land and improvements were not appraised. Those parcels not appraised are instead valued above using Assessed Value. (3) Maximum Tax in this table refers to Maximum Annual Facilities Special Tax. (4) Special Tax and the Projected Special Tax Levy in this table refer to Special Facilities Tax (5) The Projected FY 2023-24 Special Tax Levy assumes the levy of the District's Final Map ("Developed") Property at 100% of the Maximum Special Tax while the District's undeveloped parcel would be taxed at approximately 48% of its Maximum Special Tax.
(6) Represents the $34,030,000 outstanding principal balance of the 2020 Bonds and 2021 Bonds together with the [estimated]* par amount of 2023 Bonds. (7) This table allocates the CFD Bonded Debt based upon each parcel's share of the District's FY 2023-24 Maximum Special Tax. (8) General Obligation Bonded debt of the District parcels as of June 1, 2023 as summarized under the “Direct and Overlapping Tax and Assessment Debt” table prepared by California Municipal Statistics, Inc. No direct
charges related to PACE liens secured by Special Taxes were levied onto the District parcels in FY 2022-23. (9) Represents homes within the District held by individual homeowners as of May 1, 2023. (10) Each Home Under Construction represents a single family lot upon which a building permit has been issued together with construction towards the completion of either the structure's footings or more.
Sources: Phase, Ownership and Development Status - Appraiser and Developer; Land Use and Number of Units - Sierra Vista Specific Plan; Appraised Values - Integra Realty Resources, Inc.; Assessed Values - Placer County; Overlapping Debt - California Municipal Statistics, Inc, as compiled by Willdan Financial Services and Maximum Facilities Special Tax - Willdan Financial Services. 48 Table 5C
City of Roseville
The Ranch at Sierra Vista Community Facilities District No. 1 (Public Facilities) Value to Lien Ratio Categories
CFD Bonded Debt Allocated by Projected Special Tax Levy Value-to-Lien
Ratio Range * (1)
No. of
Parcels
No. of
Planned
Units
Composite
Value (2)
FY 2023-24
Maximum
Tax (3)
FY 2023-24
Projected
Special Tax
Levy * (3)
Allocable
Debt CFD
Bonds (1)(4) *
% of
Total CFD
Bonded
Debt (1)
Overlapping
Debt (5)
Total Direct &
Overlapping
Debt *
Average
Value to Lien
Ratios * (1)
15:1 to 15.99:1 72 72 $43,099,121 $145,951 $145,951 $2,789,552 5.58% $49,878 $2,839,430 15.18 10:1 to 14.99:1 456 456 280,143,529 1,011,633 1,011,633 19,335,330 38.68 4,215,386 23,550,716 11.90 5:1 to 9.99:1 103 103 37,790,492 224,115 224,115 4,283,502 8.57 649,874 4,933,376 7.66 3:1 to 4.99:1 214 312 47,199,892 779,578 645,351 12,334,579 24.67 202,274 12,536,853 3.76 2:1 to 2.99:1 220 220 26,286,356 588,450 588,450 11,247,037 22.50 145,552 11,392,589 2.31 Total 1,065 1,163 $434,519,390 $2,749,727 $2,615,500 $49,990,000 100.00% $5,262,964 $55,252,964 7.86 * Preliminary, subject to change.
(1) This table allocates the CFD Bonded Debt using each parcel's share of the District's total projected FY 2023-24 Special Tax levy rather than allocating based upon Maximum Special Tax.
This allocation method results in the District's undeveloped parcel receiving a higher value to lien ratio than if the bonded debt was allocated by each parcel's share of the District's total Maximum Special Tax.
(2) Composite Value represents the Appraised Values as of May 1, 2023 or the latest Assessed Value. Existing single-family homes showing a complete assessed value for both land and improvements were not appraised. Those parcels not appraised are instead valued above using Assessed Value. (3) Maximum Tax in this table refers to Maximum Annual Facilities Special Tax; Special Tax and the Projected Special Tax Levy in this table refer to Special Facilities Tax. (4) Represents the $34,030,000 outstanding principal balance of the 2020 Bonds and 2021 Bonds together with the [estimated]* par amount of 2023 Bonds. (5) General Obligation Bonded debt of the District parcels as of June 1, 2023 as summarized under the “Direct and Overlapping Tax and Assessment Debt” table prepared by California Municipal Statistics, Inc. No direct charges related to PACE liens secured by Special Taxes were levied onto the District parcels in FY 2022-23. No direct charges related to PACE liens secured by Special Taxes were levied onto the District parcels in FY 2022-23.
Sources: Planned Residential Units - Rate and Method; Appraised Value - Integra Realty Resources; Assessed Values - Placer County July 1, 2022 Secured Property Roll; Overlapping Debt - California Municipal Statistics, Inc, as compiled by Willdan Financial Services and PACE Lien Direct Charges - Placer County 49 Overlapping Liens and Priority of Lien
The principal of and interest on the Bonds are payable from the Special Tax authorized to be collected within the District, and payment of the Special Tax is secured by a lien on certain real property within the District. Such lien is co-equal to and independent of the lien for general taxes and any other liens imposed under the Act, regardless of when they are imposed on the property in the District. The imposition of additional special taxes, assessments and general property taxes will increase the amount of independent and co-equal liens which must be satisfied in foreclosure. The City, the County and certain other public agencies are authorized by the Act to form other community facilities districts and improvement areas and, under other provisions of State law, to form special assessment districts, either or both of which could include all or a portion of the land within the District.
Set forth below is an overlapping debt table showing the existing direct and overlapping bonded debt payable with respect to property within the District. This table has been prepared by California Municipal Statistics Inc. as of the date indicated, and is included for general information purposes only. The City has not reviewed the data for completeness or accuracy and makes no representations in connection therewith. In addition to bonded debt, property in the District is also subject to special taxes levied on behalf of the City’s Sierra Vista Community Facilities District No. 2 (Public Services) and Community Facilities District No. 3 (Municipal Services) for municipal services, which districts provide for escalating annual special taxes on residential property (as shown in Table 8 below), and subject to annual escalation of up to 4% each fiscal year.
50 Table 6
City of Roseville
The Ranch at Sierra Vista Community Facilities District No. 1 (Public Facilities) Summary of Overlapping Debt
As of June 1, 2023
2022-23 Local Secured Assessed Valuation: $171,547,540
DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT: % Applicable Debt Sierra Joint Community College District SFID No. 4 General Obligation Bonds 0.201% $ 298,031 Center Joint Unified School District General Obligation Bonds 4.883 4,964,933 City of Roseville The Ranch at Sierra Vista CFD No. 1 100.000 34,030,000 (1) TOTAL DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT $39,292,964 (2) Ratios to 2022-23 Assessed Valuation:
Direct Debt ($34,030,000)........................................... 19.84% Total Direct and Overlapping Tax and Assessment Debt 22.90% ______________ (1) Excludes the 2023 Bonds to be sold.
(2) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and non-bonded capital lease obligations.
Source: California Municipal Statistics, Inc.
There can be no assurance that Lennar Homes or subsequent owners will not petition for the formation of other community facilities districts and improvement areas or for a special assessment district or districts and that parity special taxes or special assessments will not be levied by the County or some other public agency to finance additional public facilities; however, no other special districts are currently contemplated by the City or Lennar Homes.
Private liens, such as deeds of trust securing loans obtained by Lennar Homes or another merchant builder, may be placed upon property in the District at any time. Under California law, the Special Taxes have priority over all existing and future private liens imposed on property subject to the lien of the Special Taxes.
Estimated Tax Burden on Single-Family Home
Based on sales price information provided by Lennar Homes to the Appraiser prior to the date of value of the Appraisal and tax rates for Fiscal Year 2022-23, the Special Tax Consultant projected that the estimated overall tax burden for homes in the District would be as shown in the following table. Since that time, Lennar Homes has increased the base price range of some of the homes it is selling in the District, as shown in Table 2. In addition, the projected overall tax burden for more expensive homes is expected to be smaller and the projected overall tax burden for less expensive homes is expected to be larger, as a percentage of the projected assessed value of the homes, respectively.
51 Table 7
City of Roseville
The Ranch at Sierra Vista Community Facilities District No. 1 (Public Facilities) Projected Overall Tax Burden for Single-Family Residential Parcels Fiscal Year 2022-23
Net Taxable Value MDR LDR
Representative Values (1) $530,000 $815,000
Less: Homeowner's Exemption (7,000) (7,000)
Net Taxable Value $523,000 $808,000
Ad Valorem Property Taxes
2022-23
Rate (2) Taxes Taxes
Base Property Tax 1.000000% $5,230 $8,080
Sierra Coll SFID #4 B&I 2018 Series A 0.002407 13 19
Sierra Coll SFID #4 B&I 2018 Series B 0.016193 85 131
Center Joint Unif B&I 0.104100 544 841
Center Joint Unif B&I 2008 Series 2020A 0.007000 37 57
Center Joint Unif B&I 2008 Series 2020A Refunding 0.030700 161 248 Center Joint Unif B&I 2008 Series 2020B Refunding 0.002200 12 18 Center Joint Unif B&I 2008 Series 2021B Refunding 0.010000 52 81 Total Ad Valorem Property Taxes 1.172600% $6,133 $9,475 Parcel Charges, Special Taxes and Assessments (3)
Charges Charges
Placer Mosquito & Vector (4)
City of Roseville The Ranch at Sierra Vista CFD 1 (Public Facilities) (5) $6 $6 City of Roseville Sierra Vista CFD 2 (Public Services) (6) 2,601 3,069 City of Roseville CFD 3, Municipal Services (7) 566 573 Total Parcel Charges, Assessments, and Special Taxes 309 528 3,482 4,176
Total Projected Taxes and Direct Charges $9,615 $13,651 Total Effective Tax Rate 1.81% 1.67%
(1) Representative new home prices from the "Ability to Pay" section of the Appraisal. (2) 2022-23 Ad Valorem Rates.
(3) Assumes no PACE related Special Taxes.
(4) FY 2022-23 Charge.
(5) Equal to the applicable Maximum Public Facilities Special Tax for FY 2023-24. (6) Equal to the applicable Maximum Public Services Special Tax for FY 2023-24. (7) Projected applicable Maximum Municipal Services Special Tax for FY 2023-24.
Sources: FY 2022-23 Ad Valorem Tax Rates of TRA 005070 and Placer Mosquito & Vector charges - Placer County; Representative new home prices -Integra Realty Resources, Inc and Developer; Maximum Special Tax Rates CFD Nos. 1, 2 and 3 - Willdan Financial Services
52 SPECIAL RISK FACTORS
The purchase of the 2023 Bonds described in this Official Statement involves a degree of risk that may not be appropriate for some investors. The following includes a discussion of some of the risks that should be considered before making an investment decision.
Limited Obligation of the City to Pay Debt Service
The City has no obligation to pay principal of and interest on the 2023 Bonds in the event Special Tax collections are delinquent, other than from amounts, if any, on deposit in the 2023 Reserve Account of the Reserve Fund or funds derived from the tax sale or foreclosure and sale of parcels on which levies of the Special Tax are delinquent, nor is the City obligated to advance funds to pay such debt service on the 2023 Bonds. The 2023 Bonds are not general obligations of the City but are limited obligations of the City and the District payable solely from the proceeds of the Special Tax and certain funds held under the Fiscal Agent Agreement, including amounts deposited in the 2023 Reserve Account of the Reserve Fund and investment income thereon, and the proceeds, if any, from the sale of property in the event of a foreclosure. See “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS.”
Concentration of Ownership
As of May 10, 2023, nearly half of land in the District was owned by Lennar Homes or the Landbank Owner. Owners of property are not personally obligated to pay the Special Tax attributable to their property. Rather, the Special Tax is an obligation only against the parcel of property, secured by the amount which could be realized in a foreclosure proceeding against the property, and not by any promise of the owner to pay. If the value of the property is not sufficient, taking into account other obligations also constituting a lien against the property, the City, Fiscal Agent and owners of the Bonds have no recourse against the owner, such as filing a lawsuit to collect money.
Failure of Lennar Homes, the Landbank Owner or any future owner of significant property subject to the Special Taxes in the District to pay installments of Special Taxes when due could cause the depletion of amounts in the 2023 Reserve Account of the Reserve Fund prior to reimbursement from the resale of foreclosed property or payment of the delinquent Special Tax and, consequently, result in the delinquency rate reaching a level that would cause an insufficiency in collection of the Special Tax to meet the District’s obligations on the 2023 Bonds.
For a description of Lennar Homes, see “OWNERSHIP OF PROPERTY WITHIN THE DISTRICT.” In that event, there could be a delay or failure in payments on the 2023 Bonds. See “– Bankruptcy and Foreclosure Delays” below and “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS – Delinquent Payments of Special Tax; Covenant for Superior Court Foreclosure.”
53 Property Values
The Appraisal included in APPENDIX B estimates the market value of 969 parcels of taxable property within the District. This market value is merely the present opinion of the Appraiser, and is subject to the assumptions and limiting conditions stated in the Appraisal. In addition to the appraised parcels, the estimated valuation of property in the District includes the current County assessed valuation of 194 completed single family homes. Both the appraised value and the County assessed values are value estimates and may not reflect market values of parcels. The City has not sought the present opinion of any other appraiser of the value of the taxable parcels. A different present opinion of value might be rendered by a different appraiser.
The opinion of value relates to sale by a willing seller to a willing buyer as of the date of valuation, each having similar information and neither being forced by other circumstances to sell or to buy. Consequently, the opinion is of limited use in predicting the selling price at a foreclosure sale, because the sale is forced and the buyer may not have the benefit of full information.
In considering the estimates of value evidenced by the Appraisal, it should be noted that the Appraisal is based upon a number of standard and special assumptions which affect the estimates as to value, in addition to hypothetical conditions, as set forth in the Appraisal (see APPENDIX B hereto). The opinion is a present opinion of the Appraised and is based upon present facts and circumstances. Differing facts and circumstances may lead to differing opinions of value. The appraised market value is not evidence of future value because future facts and circumstances may differ significantly from the present.
No assurance can be given that any of the property in the District could be sold in a foreclosure for the estimated market values. Such sale is the primary remedy available to Bondowners if that property should become delinquent in the payment of Special Taxes.
Property Values and Property Development
The value of Taxable Parcels within the District is a critical factor in determining the investment quality of the 2023 Bonds. If a property owner defaults in the payment of the Special Tax, the District’s only remedy is to foreclose on the delinquent property in an attempt to obtain funds with which to pay the delinquent Special Tax. Land development and land values could be adversely affected by economic and other factors beyond the City’s control, such as: a general economic downturn; adverse judgments in future litigation that could affect the scope, timing or viability of development; relocation of employers out of the area; stricter land use regulations; shortages of water, electricity, natural gas or other utilities; destruction of property caused by earthquake, flood or other natural disasters; environmental pollution or contamination.
TNo assurance can be given that the value estimates set froth in this Official Statement are accurate or that the values will not decline in the future if one or more events, such as natural disasters or adverse economic conditions, occur. See “Property Values” above.
Neither the Underwriter nor the City has evaluated development risks. Since these are largely business risks of the type that property owners customarily evaluate individually, and inasmuch as changes in land ownership may well mean changes in the evaluation with respect to any particular parcel, the City is issuing the 2023 Bonds without regard to any such evaluation.
Thus, the creation of the District and the issuance of the 2023 Bonds in no way implies that the District, the Underwriter, or the City has evaluated these risks or the reasonableness of these risks.
54 The following is a discussion of specific risk factors that could affect the timing or scope of property development in the District or the value of property in the District.
Land Development. Land values are influenced by the level of development in the area in many respects.
First, undeveloped or partially developed land is generally less valuable than developed land and provides less security to the owners of the 2023 Bonds should it be necessary for the District to foreclose on undeveloped or partially developed property due to the nonpayment of Special Taxes.
Second, failure to complete development on a timely basis could adversely affect the land values of those parcels that have been completed. Lower land values would result in less security for the payment of principal of and interest on the 2023 Bonds and lower proceeds from any foreclosure sale necessitated by delinquencies in the payment of the Special Tax. See “VALUE OF PROPERTY WITHIN THE DISTRICT – Value to Special Tax Burden Ratios.” No assurance can be given that the proposed development within the District will be completed, and in assessing the investment quality of the 2023 Bonds, prospective purchasers should evaluate the risks of noncompletion.
Neither the Master Developer nor Lennar Homes provides any assurances to the City that the project will be developed or that sources of financing that will actually be available will be sufficient to complete the currently projected development. Neither the Master Developer nor Lennar Homes has an obligation to the City or to owners of the 2023 Bonds to complete the project.
Risks of Real Estate Investment Generally. Continuing development of land within the District may be adversely affected by changes in general or local economic conditions, fluctuations in the real estate market, increased construction costs, development, financing and marketing capabilities of individual property owners, water or electricity shortages, and other similar factors. Development in the District may also be affected by development in surrounding areas, which may compete with the District. In addition, land development operations are subject to comprehensive federal, state and local regulations, including environmental, land use, zoning and building requirements. There can be no assurance that proposed land development operations within the District will not be adversely affected by future government policies, including, but not limited to, governmental policies to restrict or control development, or future growth control initiatives. There can be no assurance that land development operations within the District will not be adversely affected by these risks.
Natural Disasters. The value of the parcels in the District in the future can be adversely affected by a variety of natural occurrences, particularly those that may affect infrastructure and other public improvements and private improvements on the parcels in the District and the continued habitability and enjoyment of such private improvements. For example, the areas in and surrounding the District, like those in much of California, may be subject to earthquakes or other unpredictable seismic activity, however, the District is not located in a seismic special studies zone.
Other natural disasters could include, without limitation, landslides, floods, droughts, wildfires or tornadoes. One or more natural disasters could occur and could result in damage to improvements of varying seriousness. Although the District is not in a high-risk area for 55 landslides, floods, wildfires or tornadoes, natural disasters such as these are unpredictable and may occur anywhere throughout the State, with devastating consequences. The damage may entail significant repair or replacement costs and that repair or replacement may never occur either because of the cost, or because repair or replacement will not facilitate habitability or other use, or because other considerations preclude such repair or replacement. Under any of these circumstances there could be significant delinquencies in the payment of Special Taxes, and the value of the parcels may well depreciate.
Drought. California is subject to droughts from time-to-time. Although the City does not believe the recently ended or any future drought would impact development in the District, no assurances can be given in this regard.
The City employs a portfolio approach to its water supplies which includes the use of surface water, groundwater and recycled water. This portfolio approach is designed to provide a more reliable water supply. Surface water is the City’s primary water supply which is delivered from the Folsom Reservoir under contracts with the Bureau of Reclamation and the Placer County Water Agency. The City also uses groundwater to supplement its surface water supplies during emergency and drought conditions. These groundwater wells are designated to accommodate Aquifer Storage and Recovery (“ASR”). The City’s ASR program allows for the storage of treated surface water in the groundwater basin through direct injection through the ASR wells. This water can be extracted later from the same wells for use during emergency or drought conditions. This water “banking” allows the City to use groundwater without significant impact to the groundwater table when surface water supplies are limited. The City also uses recycled water generated from its wastewater treatment facilities for irrigation purposes in commercial landscaping, public rightsof way, parks and golf courses. The use of recycled water reduces the demand for treated water for these purposes and leaving more for domestic use.
The City indicates it has adequate surface water and groundwater supplies to meet the allocation for all phases of planned development for the project in accordance with applicable law and regulations. However, in the event that the City’s water supply is severely limited or cut off by virtue of future actions beyond its control resulting from ongoing or future drought conditions, development within the District may be delayed or even stopped. The Development Agreement provides that should the City need to restrict development it must do so City-wide and cannot single out the property in the District in restricting development activity. In turn, the anticipated diversity of land ownership within the District could also be reduced, making the owners of the 2023 Bonds more dependent upon owners of undeveloped land for the timely payment of the Special Taxes levied on undeveloped property. Furthermore, such an increased period of concentrated ownership of undeveloped land increases the potential negative impact of any bankruptcy or other financial difficulties experienced by the Landbank Owner, Lennar Homes or successor owners. Any reduction or interruption in the water supply would also likely cause a reduction in the land value and thus a reduction in the security in the event of a need to foreclose on land within the District following a delinquency in the payment of Special Taxes.
Legal Requirements. Other events that may affect the value of a parcel include changes in the law or application of the law. Such changes may include, without limitation, local growth control initiatives, local utility connection moratoriums and local application of statewide tax and governmental spending limitation measures. Development in the District may also be adversely affected by the application of laws protecting endangered or threatened species.
Hazardous Substances. Any discovery of a hazardous substance detected on property within the District would affect the marketability and the value of some or all of the property in the 56 District. In that event, the owners and operators of a parcel within the District may be required by law to remedy conditions of the parcel relating to releases or threatened releases of hazardous substances. The federal Comprehensive Environmental Response, Compensation and Liability Act of 1980, sometimes referred to as “CERCLA” or the “Superfund Act,” is the most well-known and widely applicable of these laws. California laws with regard to hazardous substances are also applicable to property within the District and are as stringent as the federal laws. Under many of these laws, the owner (or operator) is obligated to remedy a hazardous substance condition of property whether or not the owner (or operator) has anything to do with creating or handling the hazardous substance. The effect, therefore, should any of the parcels be contaminated by a hazardous substance is to reduce the marketability and value of the parcel by the costs of remedying the condition, because the purchaser, upon becoming owner, will become obligated to remedy the condition just as is the seller.
The values set forth in the Appraisal do not take into account the possible reduction in marketability and value of any of the parcels within the District by reason of the possible liability of the owner (or operator) for the remedy of a hazardous substance condition on a parcel.
Although the City is not aware that the owner (or operator) of any of the property within the District has a current liability for a hazardous substance with respect to any of the parcels, it is possible that such liabilities do currently exist and that the City is not aware of them.
Further, it is possible that liabilities may arise in the future with respect to any of the parcels within the District resulting from the existence, currently, on the parcel of a substance presently classified as hazardous but which has not been released or the release of which is not presently threatened, or may arise in the future resulting from the existence, currently, on the parcel of a substance not presently classified as hazardous but which may in the future be so classified.
Further, such liabilities may arise not simply from the existence of a hazardous substance but from the method of handling it. All of these possibilities could significantly affect the value of a parcel within the District that is realizable upon a foreclosure sale.
Endangered and Threatened Species. It is illegal to harm or disturb any plants or animals in their habitat that have been listed as endangered species by the United States Fish & Wildlife Service under the Federal Endangered Species Act or by the California Fish & Game Commission under the California Endangered Species Act without a permit. Although the Master Developer and Lennar Homes believe that no federally listed endangered or threatened species would be affected by the proposed development within the District, other than any that are permitted by the entitlements already received (which allow for the impact of development and specify the mitigation required), the discovery of an endangered plant or animal could delay development of vacant property in the District or reduce the value of undeveloped property.
Levy and Collection of Special Taxes
General. The principal source of payment of principal of and interest on the 2023 Bonds is the proceeds of the annual levy and collection of the Special Tax against property within the District.
Limitation on Maximum Special Tax Rate. The annual levy of the Special Tax is subject to the Maximum Annual Facilities Special Tax rate authorized in the Rate and Method. The levy cannot be made at a higher rate even if the failure to do so means that the estimated proceeds of the levy and collection of the Special Tax, together with other available funds, will not be sufficient to pay debt service on the 2023 Bonds.
57 In addition to the Maximum Annual Facilities Special Tax rate limitation in the Rate and Method, Section 53321(d) of the Act provides that the special tax levied against any parcel for which an occupancy permit for private residential use has been issued may not be increased as a consequence of delinquency or default by the owner of any other parcel within a community facilities district by more than 10% above the amount that would have been levied in such Fiscal Year had there never been any such delinquencies or defaults. In cases of significant delinquency, these factors may result in defaults in the payment of principal of and interest on the 2023 Bonds.
No Relationship Between Property Value and Special Tax Levy. Because the Rate and Method is not based on property value, the levy of the Special Tax will rarely, if ever, result in a uniform relationship between the value of particular parcels of Taxable Property and the amount of the levy of the Special Tax against those parcels. Thus, there will rarely, if ever, be a uniform relationship between the value of the parcels of Taxable Property and their proportionate share of debt service on the 2023 Bonds, and certainly not a direct relationship.
Factors that Could Lead to Special Tax Deficiencies. The following are some of the factors that might cause the levy of the Special Tax on any particular parcel of Taxable Property to vary from the Special Tax that might otherwise be expected:
Transfers to Governmental Entities. The number of parcels of Taxable Property could be reduced through the acquisition of Taxable Property by a governmental entity and failure of the government to pay the Special Tax based upon a claim of exemption or, in the case of the federal government or an agency thereof, immunity from taxation, thereby resulting in an increased tax burden on the remaining taxed parcels.
Property Tax Delinquencies. Failure of the owners of Taxable Property to pay property taxes (and, consequently, the Special Tax), or delays in the collection of or inability to collect the Special Tax by tax sale or foreclosure and sale of the delinquent parcels, could result in a deficiency in the collection of Special Tax revenues. See “– Tax Delinquencies” below. There is currently no history of tax levies in the District.
Delays Following Special Tax Delinquencies and Foreclosure Sales. The Fiscal Agent Agreement generally provides that the Special Tax is to be collected in the same manner as ordinary ad valorem property taxes are collected and, except as provided in the special covenant for foreclosure described in “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS – Delinquent Payments of Special Tax; Covenant for Superior Court Foreclosure” and in the Act, is subject to the same penalties and the same procedure, sale and lien priority in case of delinquency as is provided for ordinary ad valorem property taxes. Under these procedures, if taxes are unpaid for a period of five years or more, the property is deeded to the State and then is subject to sale by the County.
If sales or foreclosures of property are necessary, there could be a delay in payments to owners of the 2023 Bonds pending such sales or the prosecution of foreclosure proceedings and receipt by the City of the proceeds of sale if the Reserve Fund is depleted. See “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS – Delinquent Payments of Special Tax; Covenant for Superior Court Foreclosure.”
The ability of the City to collect interest and penalties specified by State law and to foreclose against properties having delinquent Special Tax installments may be limited in certain respects with regard to properties in which the Federal Deposit Insurance Corporation (the 58 “FDIC”) has or obtains an interest. The FDIC would obtain such an interest by taking over a financial institution that has made a loan that is secured by property within the District. See “ – FDIC/Federal Government Interests in Properties” below.
Other laws generally affecting creditors’ rights or relating to judicial foreclosure may affect the ability to enforce payment of Special Taxes or the timing of enforcement of Special Taxes.
For example, the Soldiers and Sailors Civil Relief Act of 1940 affords protections such as a stay in enforcement of the foreclosure covenant, a six-month period after termination of military service to redeem property sold to enforce the collection of a tax or assessment and a limitation on the interest rate on the delinquent tax or assessment to persons in military service if the court concludes the ability to pay such taxes or assessments is materially affected by reason of such service.
FDIC/Federal Government Interests in Properties
General. The ability of the District to foreclose the lien of delinquent unpaid Special Tax installments may be limited with regard to properties in which the Federal Deposit Insurance Corporation (the “FDIC”), the Drug Enforcement Agency, the Internal Revenue Service, or other federal agency has or obtains an interest.
Federal courts have held that, based on the supremacy clause of the United States Constitution, in the absence of Congressional intent to the contrary, a state or local agency cannot foreclose to collect delinquent taxes or assessments if foreclosure would impair the federal government interest.
The supremacy clause of the United States Constitution reads as follows: “This Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the contrary notwithstanding.” This means that, unless Congress has otherwise provided, if a federal governmental entity owns a parcel that is subject to Special Taxes within the District but does not pay taxes and assessments levied on the parcel (including Special Taxes), the applicable state and local governments cannot foreclose on the parcel to collect the delinquent taxes and assessments.
Moreover, unless Congress has otherwise provided, if the federal government has a mortgage interest in the parcel and the District wishes to foreclose on the parcel as a result of delinquent Special Taxes, the property cannot be sold at a foreclosure sale unless it can be sold for an amount sufficient to pay delinquent taxes and assessments on parity with the Special Taxes and preserve the federal government’s mortgage interest. In Rust v. Johnson (9th Circuit; 1979) 597 F.2d 174, the United States Court of Appeal, Ninth Circuit held that the Federal National Mortgage Association (“FNMA”) is a federal instrumentality for purposes of this doctrine, and not a private entity, and that, as a result, an exercise of state power over a mortgage interest held by FNMA constitutes an exercise of state power over property of the United States.
Bankruptcy and Foreclosure Delays
The payment of the Special Tax and the ability of the District to foreclose the lien of a delinquent unpaid tax, as discussed in “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS – Delinquent Payments of Special Tax; Covenant for Superior Court Foreclosure,” may 59 be limited by bankruptcy, insolvency or other laws generally affecting creditors’ rights or by the laws of the State of California relating to judicial foreclosure. The various legal opinions to be delivered concurrently with the delivery of the 2023 Bonds (including Bond Counsel’s approving legal opinion) will be qualified as to the enforceability of the various legal instruments by bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors’ rights, by the application of equitable principles and by the exercise of judicial discretion in appropriate cases.
Although bankruptcy proceedings would not cause the Special Taxes to become extinguished, bankruptcy of a property owner could result in a delay in prosecuting superior court foreclosure proceedings and could result in the possibility of delinquent Special Tax installments not being paid in full. Such a delay would increase the likelihood of a delay or default in payment of the principal of and interest on the 2023 Bonds. To the extent that property in the District continues to be owned by a limited number of property owners, the chances are increased that the 2023 Reserve Account of the Reserve Fund established for the 2023 Bonds could be fully depleted during any such delay in obtaining payment of delinquent Special Taxes. As a result, sufficient moneys would not be available in the 2023 Reserve Account of the Reserve Fund for transfer to the Bond Fund to make up shortfalls resulting from delinquent payments of the Special Tax and thereby to pay principal of and interest on the 2023 Bonds on a timely basis.
To the extent that bankruptcy or similar proceedings were to involve a large property owner, the chances would increase the likelihood that the 2023 Reserve Account of the Reserve Fund could be fully depleted during any resulting delay in receiving payment of delinquent Special Taxes. As a result, sufficient monies would not be available in the 2023 Reserve Account of the Reserve Fund for transfer to the Bond Fund to make up any shortfalls resulting from delinquent payments of the Special Tax and thereby to pay principal of and interest on the 2023 Bonds on a timely basis.
On July 30, 1992, the United States Court of Appeals for the Ninth Circuit issued its opinion in a bankruptcy case entitled In re Glasply Marine Industries. In that case, the court held that ad valorem property taxes levied by Snohomish County in the State of Washington after the date that the property owner filed a petition for bankruptcy were not entitled to priority over a secured creditor with a prior lien on that property. The court upheld the priority of unpaid ad valorem taxes imposed before the bankruptcy petition (the “pre-petition taxes”), but unpaid taxes imposed after the filing of the bankruptcy petition (“post-petition taxes”) were declared to be unsecured “administrative expenses” of the bankruptcy estate, and were therefore held to be payable from the bankruptcy estate only after payment of all secured creditors. As a result, the secured creditor of the property was able to foreclose on the property and retain all of the proceeds of the sale except for the amount of the pre-petition taxes.
According to the court’s ruling, as administrative expenses, post-petition taxes would have to be paid, but only if the debtor had sufficient assets not subject to other perfected security interests to do so. In certain circumstances, payment of such administrative expenses may also be allowed to be deferred. Once the property is transferred out of the bankruptcy estate (through foreclosure or otherwise) it would at that time again become subject to and would secure liens for then current and future ad valorem taxes.
Glasply was controlling precedent on bankruptcy courts in the State of California for several years subsequent to the date of the Ninth Circuit’s holding. Pursuant to state law, the lien date for general ad valorem property taxes levied in the State of California is the January 1 preceding the fiscal year for which the taxes are levied. Under the Glasply holding, a bankruptcy 60 petition filing would have prevented the lien for general ad valorem property taxes levied in fiscal years subsequent to the filing of a bankruptcy petition from attaching and becoming a lien so long as the property was a part of the estate in bankruptcy. However, the Glasply holding was for the most part subsequently rendered inoperative with respect to the imposition of a lien for and the collection of ad valorem taxes by amendments to the federal Bankruptcy Code (Title 11 U.S.C.) which were part of the Bankruptcy Reform Act of 1994 (the “Bankruptcy Reform Act”) passed by Congress during the later part of 1994. The Bankruptcy Reform Act added a provision to the automatic stay section of the Bankruptcy Code which, pursuant to Section 362(b)(18) thereof, excepts from the Bankruptcy Code’s automatic stay provisions, “the creation of a statutory lien for an ad valorem property tax imposed by . . . a political subdivision of a state, if such tax comes due after the filing of the petition” by a debtor in bankruptcy court. The effect of this provision is to continue the secured interest of ad valorem taxes on real property (i.e., post-petition taxes) in effect during the period following the filing of a bankruptcy petition, including during the period bankruptcy proceedings are pending.
Without further clarification by the courts or Congress, the original rationale of the Glasply holding could, however, still result in the treatment of post-petition special taxes as “administrative expenses,” rather than as tax liens secured by real property, at least during the pendency of bankruptcy proceedings. This treatment might result from the fact that, although the lien of special taxes is of record from the date of the filing of a Notice of Special Tax Lien, the actual special tax is levied annually. As noted above, special taxes have a different lien date than the lien date for general ad valorem taxes in the State of California noted above. The lien of a Mello-Roos special tax attaches upon recordation of the notice of the special tax lien, as provided for in Section 53328.3 of the Act, as opposed to the annual January 1 lien date for general ad valorem taxes.
Thus, in deciding whether the original Glasply ruling is applicable to a bankruptcy proceeding involving special taxes rather than general ad valorem property taxes, a court might consider the differences in the statutory provisions for creation of the applicable tax lien (general ad valorem or special tax) in determining whether there is a basis for post petition special taxes to be entitled to a lien on the property during pending bankruptcy proceedings. If a court were to apply Glasply to eliminate the priority of the special tax lien as a secured claim against property with respect to post-petition levies of the Special Taxes made against property owners within the District who file for bankruptcy, collections of the Special Taxes from such property owners could be reduced as the result of being treated as “administrative expenses” of the bankruptcy estate. Also, and most importantly, is the fact that the original holding in Glasply and the mitigation of that holding by the Bankruptcy Reform Act of 1994 both appear to be applicable only to general ad valorem taxes, and, therefore, the exemption from the automatic stay in Section 362(b)(18) discussed above may not be applicable to special taxes since they were not expressly mentioned or provided for in this section, nor defined to be included within the term “ad valorem taxes.” Parity Taxes and Special Assessments; Private Debt
The City, the County and certain other public agencies are authorized by the Act to form other community facilities districts and improvement areas and, under other provisions of State law, to form special assessment districts, either or both of which could include all or a portion of the land within the District.
Property in the District is currently subject to certain overlapping tax and assessment liens, as shown in the overlapping debt statement. Property in the District is also subject to the special tax of two additional community facilities districts formed to fund services and known as the Sierra Vista Community Facilities District No. 2 (Public Services) and the City’s Community Facilities District No. 3 (Municipal Services). The property is not subject to any other special tax or 61 assessment liens (other than the lien of the Special Tax). See “VALUE OF PROPERTY WITHIN THE DISTRICT – Estimated Tax Burden on Single Family Home.” In addition, other governmental obligations may be authorized and undertaken or issued in the future, the tax, assessment or charge for which may become an obligation of one or more of the parcels of taxable property and may be secured by a lien on a parity with the lien of the Special Tax securing the Bonds. The principal of and interest on the Bonds are payable from the Special Tax authorized to be collected within the District, and payment of the Special Tax is secured by a lien on certain real property within the District. Such lien is co-equal to and independent of the lien for general taxes and any other liens imposed under the Act, regardless of when they are imposed on the property in the District. The imposition of additional special taxes, assessments and general property taxes will increase the amount of independent and coequal liens which must be satisfied in foreclosure if unpaid. The City, the County and certain other public agencies are authorized by the Act to form other community facilities districts and improvement areas and, under other provisions of State law, to form special assessment districts, either or both of which could include all or a portion of the land within the District. Although the Special Taxes will generally have priority over non-governmental liens on a parcel of taxable property, regardless of whether the non-governmental liens were in existence at the time of the levy of the Special Tax or not, this result may not apply in the case of bankruptcy. See “– Bankruptcy and Foreclosure Delays” above.
There can be no assurance that property owners within the District will not petition for the formation of other community facilities districts and improvement areas or for a special assessment district or districts and that parity special taxes or special assessments will not be levied by the County or some other public agency to finance additional public facilities. In addition to liens for special taxes or assessments to finance public improvements of benefit to land within the District, owners of property may obtain loans from banks or other private sources which loans may be secured by a lien on the parcels in the District. Such loans would increase amounts owed by the owner of such parcel with respect to development of its property in the District. However, the lien of such loans would be subordinate to the lien of the Special Taxes.
Tax Delinquencies
Under provisions of the Act, the Special Taxes will be billed to the properties within the District on the regular property tax bills sent to owners of such properties. Such Special Tax installments are due and payable, and bear the same penalties and interest for nonpayment, as do regular property tax installments. Special Tax installment payments cannot be made separately from property tax payments. Therefore, the unwillingness or inability of a property owner to pay regular property tax bills as evidenced by property tax delinquencies may also indicate an unwillingness or inability to make regular property tax payments and Special Tax payments in the future.
The annual Special Tax will be billed and collected in two installments payable without penalty by December 10 and April 10. In the event such Special Taxes are not timely paid, moneys available to pay debt service on the Bonds becoming due on the subsequent respective March 1 and September 1 may be insufficient, except to the extent moneys are available in the 2023 Reserve Account of the Reserve Fund.
In the event of non-payment of Special Taxes, funds in the 2023 Reserve Account of the Reserve Fund, if available, may be used to pay principal of and interest on the 2023 Bonds. If funds in the 2023 Reserve Account of the Reserve Fund for the 2023 Bonds are depleted, the 62 funds can be replenished from the proceeds of the levy and collection of the Special Tax that are in excess of the amount required to pay all amounts to be paid pursuant to the Fiscal Agent Agreement. However, no replenishment from the proceeds of a Special Tax levy can occur as long as the proceeds that are collected from the levy of the Special Tax against property within the District at the maximum Special Tax rates, together with other available funds, remains insufficient to pay all such amounts. Thus it is possible that the 2023 Reserve Account of the Reserve Fund will be depleted and not be replenished by the levy of the Special Tax.
See “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS – Delinquent Payments of Special Tax; Covenant for Superior Court Foreclosure” for a discussion of the provisions which apply, and procedures which the City is obligated to follow, in the event of delinquency in the payment of Special Taxes. See also “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS – Special Tax Methodology” for a discussion of a limitation imposed by the Act applicable to Special Tax increases on residential property.
No Acceleration Provisions
The 2023 Bonds do not contain a provision allowing for the acceleration of the 2023 Bonds in the event of a payment default or other default under the terms of the 2023 Bonds or the Fiscal Agent Agreement. Under the Fiscal Agent Agreement, a 2023 Bond holder is given the right for the equal benefit and protection of all 2023 Bond holders similarly situated to pursue certain remedies. So long as the 2023 Bonds are in book-entry form, DTC will be the sole 2023 Bond holder and will be entitled to exercise all rights and remedies of 2023 Bond holders.
Ballot Initiatives
From time to time, initiative measures qualify for the State ballot pursuant to the State’s constitutional initiative process, and those measures could be adopted by California voters. The adoption of any such initiative might place limitations on the ability of the State, the City, the County or other local districts to increase revenues or to increase appropriations or on the ability of the landowners to complete the development of the District. See “–Property Values and Property Development – Land Development” above. See also “–Voter Initiatives” below.
Voter Initiatives
Under the California Constitution, the power of initiative is reserved to the voters for the purpose of enacting statutes and constitutional amendments. Since 1978, the voters have exercised this power through the adoption of Proposition 13 and similar measures, including Proposition 218, which was approved in the general election held on November 5, 1996, and Proposition 26, which was approved on November 2, 2010.
Any such initiative may affect the collection of fees, taxes and other types of revenue by local agencies such as the District. Subject to overriding federal constitutional principles, such collection may be materially and adversely affected by voter-approved initiatives, possibly to the extent of creating cash-flow problems in the payment of outstanding obligations such as the 2023 Bonds.
Proposition 218—Voter Approval for Local Government Taxes—Limitation on Fees, Assessments, and Charges—Initiative Constitutional Amendment, added Articles XIIIC and XIIID to the California Constitution, imposing certain vote requirements and other limitations on the imposition of new or increased taxes, assessments and property-related fees and charges. 63 On November 2, 2010, California voters approved Proposition 26, entitled the “Supermajority Vote to Pass New Taxes and Fees Act”. Section 1 of Proposition 26 declares that Proposition 26 is intended to limit the ability of the State Legislature and local government to circumvent existing restrictions on increasing taxes by defining the new or expanded taxes as “fees.” Proposition 26 amended Articles XIIIA and XIIIC of the State Constitution. The amendments to Article XIIIA limit the ability of the State Legislature to impose higher taxes (as defined in Proposition 26) without a two-thirds vote of the Legislature. Article XIIIC requires that all new local taxes be submitted to the electorate before they become effective. Taxes for general governmental purposes require a majority vote and taxes for specific purposes (“special taxes”) require a two-thirds vote.
The Special Taxes and the issuance of special tax bonds of the District were each authorized by not less than a two-thirds vote of the landowners within the District who constituted the qualified electors at the time of such voted authorization. The District believes, therefore, that issuance of the 2023 Bonds does not require the conduct of further proceedings under the MelloRoos Act, Proposition 218 or Proposition 26.
Like their antecedents, Proposition 218 and Proposition 26 are likely to undergo both judicial and legislative scrutiny before the impact on the District can be determined. Certain provisions of Proposition 218 and Proposition 26 may be examined by the courts for their constitutionality under both State and federal constitutional law, the outcome of which cannot be predicted.
Case Law Related to the Mello-Roos Act
On August 1, 2014, the California Court of Appeal, Fourth Appellate District, issued its opinion in City of San Diego v. Melvin Shapiro, et al. (D063997). The case involved a Convention Center Facilities District (the “CCFD”) established by the City of San Diego. The CCFD is a financing district established under the City’s charter (the “Charter”) and was intended to function much like a community facilities district established under the Mello-Roos Act. The CCFD was comprised of all of the real property in the entire City. However, the CCFD special tax was to be levied only on properties in the CCFD that were improved with a hotel.
At the election to authorize the CCFD special tax, the CCFD proceedings limited the electorate to owners of hotel properties and lessees of real property owned by a governmental entity on which a hotel was located. Registered voters in the City of San Diego were not permitted to vote. This definition of the qualified electors of the CCFD was based on Section 53326(c) of the Mello-Roos Act, which generally provides that, if a special tax will not be apportioned in any tax year on residential property, the legislative body may provide that the vote shall be by the landowners of the proposed community facilities district whose property would be subject to the special tax.
The San Diego Court held that the CCFD special tax election did not comply with the City’s Charter and with applicable provisions of the California Constitution -- specifically Article XIIIA, section 4 (“Cities, Counties and special districts, by a two-thirds vote of the qualified electors of such district, may impose special taxes on such district….”) and Article XIIIC, section 2(d) (“No local government may impose, extend, or increase any special tax unless and until that tax is submitted to the electorate and approved by a two-thirds vote.”) -- because the electors in the CCFD election should have been the registered voters residing within the CCFD (the boundaries of which were coterminous with the boundaries of the City of San Diego). 64 As to the District, there were no registered voters within the District at the time of the election to authorize the Special Taxes. Significantly, the San Diego Court expressly stated that it was not addressing the validity of a landowner election to impose special taxes on residential property pursuant to the Mello-Roos Act in situations where there are fewer than 12 registered voters. Therefore, by its terms, the San Diego Court’s holding does not apply to the special tax election in the District.
Moreover, Sections 53341 and 53359 of the Act establish a limited period of time in which special taxes levied under the Mello-Roos Act may be challenged by a third party:
53341. Any action or proceeding to attack, review, set aside, void, or annul the levy of a special tax or an increase in a special tax pursuant to [the Mello-Roos Act] shall be commenced within 30 days after the special tax is approved by the voters….
53359. An action to determine the validity of bonds issued pursuant to [the MelloRoos Act] or the validity of any special taxes levied pursuant to [the Mello-Roos Act] … shall …. be commenced within 30 days after the voters approve the issuance of the bonds or the special tax …
Section 53326(b) of the Mello-Roos Act defines the authorized voters for an election in which the special taxes will be levied on residential property: “Except as otherwise provided in subdivision (c), if at least 12 persons, who need not necessarily be the same 12 persons, have been registered to vote within the territory of the proposed community facilities district for each of the 90 days preceding the close of the protest hearing, the vote shall be by the registered voters of the proposed district, with each voter having one vote. Otherwise, the vote shall be by the landowners of the proposed district and each person who is the owner of land at the close of the protest hearing, or the authorized representative thereof, shall have one vote for each acre or portion of an acre of land that he or she owns within the proposed community facilities district not exempt from the special tax….”
Landowner voters approved the Special Taxes and the issuance of bonds for the District in compliance with all applicable requirements of the Mello-Roos Act on April 16, 2014. Therefore, pursuant to Sections 53341 and 53359 of the Mello-Roos Act, the statute of limitations period to challenge the validity of the special tax has expired. Because the San Diego Court expressly stated that it did not consider the facts presented by the District and because the period for challenging the Special Taxes has passed, the City believes the Special Taxes are valid and cannot be challenged.
Changes in Tax Law
H.R. 1 of the 115th U.S. Congress, known as the “Tax Cuts and Jobs Act,” was enacted into law on December 22, 2017 (the “Tax Act”). The Tax Act made significant changes to many aspects of the Code that could have an impact on property development. The Tax Act reduced the amount of mortgage interest expense and state local income tax and property tax expense that individuals may deduct from their gross income for federal income tax purposes, which could increase the cost of home ownership within the District and could adversely affect the sale of homes by the Developer and the merchant homebuilders. Future changes in tax law could also have a material adverse impact on home sales in the District. 65 Pandemic Diseases
In recent years, public health authorities have warned of threats posed by outbreaks of disease and other public health threats. On February 11, 2020, the WHO announced the official name for the outbreak of COVID-19, an upper respiratory tract illness. COVID-19 has since spread across the globe. The spread of COVID-19 had significant adverse health and financial impacts throughout the world. The WHO declared the COVID-19 outbreak to be a pandemic, and states of emergency were declared by the Governor of the State and the President of the United States.
Taxpayer assistance measures may include deferral of due dates of property taxes, which was an assistance program during the COVID-19 pandemic, and with or without a deferral some taxpayers may be unable to make their property and Special Tax payments. No assurance can be given that the property tax payment dates will not be deferred in the future, which may cause a delay in the receipt of Special Taxes. In addition, home values may be affected by a reduction in demand stemming from personal finances, or general widespread economic circumstances resulting from pandemic diseases. Such actions may affect the ability of the Master Developer or Lennar Homes to complete their planned developments in the time periods and within the cost estimates described in this Official Statement.
Cyber Security
The City, like many other public and private entities, relies on computer and other digital networks and systems to conduct its operations. As a recipient and provider of personal, private or other sensitive electronic information, the City is potentially subject to multiple cyber threats, including without limitation hacking, viruses, ransomware, malware and other attacks. No assurance can be given that the City’s efforts to manage cyber threats and attacks will be successful in all cases, or that any such attack will not materially impact the operations or finances of the City or the District, or the administration of the Bonds. The City is also reliant on other entities and service providers in connection with the administration of the Bonds, including without limitation the County tax collector for the levy and collection of Special Taxes, the fiscal agent, and the dissemination agent. No assurance can be given that the City, the District and these other entities will not be affected by cyber threats and attacks in a manner that may affect the Bond owners.
Potential Early Redemption of Bonds from Prepayments
Property owners within the District, including the Developer, merchant homebuilders and individual homeowners, are permitted to prepay a portion of their Special Tax obligation at any time. Such prepayments could also be made from the proceeds of bonds issued by or on behalf of an overlapping special assessment district or community facilities district. Such prepayments will result in a redemption of the 2023 Bonds on the interest payment date for which timely notice may be given under the Fiscal Agent Agreement following the receipt of the prepayment. The resulting redemption of 2023 Bonds that were purchased at a price greater than par could reduce the otherwise expected yield on such 2023 Bonds.
66 CONSTITUTIONAL LIMITATIONS ON TAXATION AND APPROPRIATIONS Article XIIIA of the California Constitution, commonly known as “Proposition 13,” provides that each county will levy the maximum ad valorem property tax permitted by Proposition 13 and will distribute the proceeds to local agencies in accordance with an allocation formula based in part on pre-Proposition 13 ad valorem property tax rates levied by local agencies.
Article XIIIA limits the maximum ad valorem tax on real property to 1% of “full cash value,” which is defined as the County Assessor’s valuation of real property as shown on the 1975-76 tax bill under full cash value, or, thereafter, the appraised value of real property when purchased, newly constructed, or a change in ownership has occurred after the 1975 assessment. The full cash value may be adjusted annually to reflect increases of no more than 2% per year or decreases in the consumer price index or comparable local data, or declining property value caused by damage, destruction or other factors.
Article XIIIA exempts from the 1% tax limitation any taxes to repay indebtedness approved by the voters prior to July 1, 1978, and requires a vote of two-thirds of the qualified electorate to impose Special Taxes or any additional ad valorem, sales, or transaction taxes on real property.
In addition, Article XIIIA requires the approval of two-thirds of all members of the State Legislature to change any State laws resulting in increased tax revenues. On June 3, 1986, California voters approved an amendment to Article XIIIA of the California Constitution to allow local governments and school districts to raise their property tax rates above the constitutionally mandated 1% ceiling for the purpose of paying off certain new general obligation debt issued for the acquisition or improvement of real property and approved by two-thirds of the votes cast by the qualified electorate. If any such voter-approved debt is issued, it may be on a parity with the lien of the Special Tax on the parcels within the District.
State and local government agencies in the State, and the State itself are subject to annual appropriation limits, imposed by Article XIIIB of the State Constitution. Article XIIIB prohibits government agencies and the State from spending “appropriations subject to limitation” in excess of the appropriations limits imposed. “Appropriations subject to limitation” are authorizations to spend “proceeds of taxes,” which consist of tax revenues, certain state subventions and certain other funds, including proceeds from regulatory licenses, user charges or other fees to the extent that such proceeds exceed the cost reasonably borne by such entity in providing the regulation, product or service. No limit is imposed on appropriations of funds which are not “proceeds of taxes” such as debt service on indebtedness existing or authorized before January 1, 1979, or subsequently authorized by the voters, appropriations required to comply with mandates of courts or the federal government, reasonable user charges or fees and certain other non-tax funds. 67 CONTINUING DISCLOSURE
The City
The City has covenanted for the benefit of owners of the 2023 Bonds to provide certain financial information and operating data relating to the District by not later than nine months after the end of the City’s fiscal year (presently June 30) in each year (the “City Annual Report”) commencing with its report for the 2022-23 fiscal year (due April 1, 2024) and to provide notices of the occurrence of certain enumerated events.
The City Annual Report and notices of listed events will be filed with the Municipal Securities Rulemaking Board. The covenants of the City have been made in order to assist the Underwriter in complying with Securities Exchange Commission Rule 15c2-12(b)(5) (the “Rule”).
The specific nature of the information to be contained in the Annual Report and the notices of listed events by the City is summarized in “APPENDIX E – FORM OF CONTINUING DISCLOSURE UNDERTAKINGS.”
The City believes it currently is in material compliance with all of its continuing disclosure undertakings for the last five years. Notwithstanding the foregoing, in the last five years:
(1) The Annual Report for Fiscal Year 2019-20 for one series of the City’s outstanding bonds did not initially fulfill all content requirements; a remedial filing was done approximately 3 months later.
(2) The City has not in a timely manner filed all significant event notices of changes in the ratings of certain then-outstanding obligations resulting from changes in ratings to the bond insurers who insured such obligations or the underlying rates for such obligations. However, the City has submitted all undisclosed significant event notices of changes in ratings occurring during the last five years on all currently outstanding obligations.
The Master Developer and Lennar Homes
Neither the Master Developer nor Lennar Homes is an obligated party under the Rule, but the Master Developer has voluntarily agreed to provide, for the benefit of the owners of the Bonds, semiannual continuing disclosure and notice of certain enumerated events with respect to itself, Lennar Homes, and their respective property within the District. The Master Developer will enter into a Continuing Disclosure Certificate (Developer) and provide such information until the earlier of (i) the date that the property owned by the Master Developer and Lennar Homes combined is responsible for less than 20% of the special tax levy in the District or (ii) the date that the Master Developer and Lennar Homes own a combined 110 or fewer residential lots in the District (or property that may be subdivided into less than 110 or fewer residential lots in the District).
The specific nature of the information to be contained in its semiannual reports and the notices of listed events by the Master Developer is summarized in “APPENDIX E — FORM OF CONTINUING DISCLOSURE UNDERTAKINGS.” The continuing disclosure undertaking will be the second for the Master Developer.
The Master Developer has not failed in any material respect to comply with any previous undertaking to provide periodic continuing disclosure reports or notices of material events with 68 respect to community facilities districts or assessment districts in California within the past five years.
Lennar Homes represents that, other than as disclosed in this paragraph, to the actual knowledge of Lennar Homes, Lennar Homes has not failed in any material respect to comply with any previous undertaking by it to provide periodic continuing disclosure reports or notices of material events with respect to community facilities districts or assessment districts in California within the past five years. However, (i) in connection with the $16,780,000 California Municipal Finance Authority Special Tax Revenue Bonds BOLD Program Series 2020B, Lennar Homes inadvertently failed to file the initial Semi-Annual Report by the due date of May 1, 2021, but filed a curative report on May 21, 2021; and (ii) in connection with the $5,795,000 City of Rancho Cordova Grantline 208 Community Facilities District No. 2018-1 Special Tax Bonds, Series 2021B, Lennar Homes inadvertently failed to file the initial annual report by the due date of April 1, 2022, but filed a curative report on September 21, 2022..
UNDERWRITING
The 2023 Bonds were purchased through negotiation by Stifel, Nicolaus & Company, Incorporated, as underwriter (the “Underwriter”). The Underwriter agreed to purchase the 2023 Bonds at a price of $_____________ (which is equal to the par amount of the 2023 Bonds, plus/less an original issue premium/discount of $_____________ and less the Underwriter’s discount of $_____________). The initial public offering prices set forth on the cover page hereof may be changed by the Underwriter. The Underwriter may offer and sell the 2023 Bonds to certain dealers and others at a price lower than the public offering prices set forth on the cover page hereof.
The Underwriter has entered into an agreement with its affiliate, Vining-Sparks IBG, LLC for the distribution of certain municipal securities offerings at the original issue price. Pursuant to that distribution agreement, Vining-Sparks IBG, LLC may purchase the 2023 Bonds from the Underwriter at the original issue price less a negotiated portion of the selling concession applicable to any 2023 Bonds that Vining-Sparks IBG, LLC sells.
MUNICIPAL ADVISOR
The City has retained Hilltop Securities Inc., Encino, California, as registered municipal advisor (the “Municipal Advisor”) in connection with the issuance of the 2023 Bonds. The Municipal Advisor is not obligated to undertake, and has not undertaken to make, an independent verification or assume responsibility for the accuracy, completeness, or fairness of the information contained in this Official Statement. The fees of the Municipal Advisor are contingent upon the sale and delivery of the 2023 Bonds.
69 LEGAL OPINION
The validity of the 2023 Bonds and certain other legal matters are subject to the approving opinion of Jones Hall, a Professional Law Corporation, Bond Counsel. A complete copy of the proposed form of Bond Counsel opinion is contained in APPENDIX D to this Official Statement, and the final opinion will be made available to registered owners of the 2023 Bonds at the time of delivery. The fees of Bond Counsel are contingent upon the sale and delivery of the 2023 Bonds.
TAX MATTERS
Federal Tax Status. In the opinion of Jones Hall, A Professional Law Corporation, San Francisco, California, Bond Counsel, subject, however to the qualifications set forth below, under existing law, the interest on the 2023 Bonds is excluded from gross income for federal income tax purposes and such interest is not an item of tax preference for purposes of the federal alternative minimum tax. Interest on the Bonds may be subject to the corporate alternative minimum tax.
The opinions set forth in the preceding paragraph are subject to the condition that the District comply with all requirements of the Internal Revenue Code of 1986, as amended (the “Tax Code”) relating to the exclusion from gross income for federal income tax purposes of interest on obligations such as the 2023 Bonds. The District has made certain representations and covenants in order to comply with each such requirement. Inaccuracy of those representations, or failure to comply with certain of those covenants, may cause the inclusion of such interest in gross income for federal income tax purposes, which may be retroactive to the date of issuance of the 2023 Bonds.
Tax Treatment of Original Issue Discount and Premium. If the initial offering price to the public at which a 2023 Bond is sold is less than the amount payable at maturity thereof, then such difference constitutes “original issue discount” for purposes of federal income taxes and State of California personal income taxes. If the initial offering price to the public at which a 2023 Bond is sold is greater than the amount payable at maturity thereof, then such difference constitutes “original issue premium” for purposes of federal income taxes and State of California personal income taxes. De minimis original issue discount and original issue premium are disregarded.
Under the Tax Code, original issue discount is treated as interest excluded from federal gross income and exempt from State of California personal income taxes to the extent properly allocable to each owner thereof subject to the limitations described in the first paragraph of this section. The original issue discount accrues over the term to maturity of the 2023 Bond on the basis of a constant interest rate compounded on each interest or principal payment date (with straight-line interpolations between compounding dates). The amount of original issue discount accruing during each period is added to the adjusted basis of such 2023 Bonds to determine taxable gain upon disposition (including sale, redemption, or payment on maturity) of such 2023 Bond. The Tax Code contains certain provisions relating to the accrual of original issue discount in the case of purchasers of the 2023 Bonds who purchase the 2023 Bonds after the initial offering of a substantial amount of such maturity. Owners of such 2023 Bonds should consult their own tax advisors with respect to the tax consequences of ownership of 2023 Bonds with original issue discount, including the treatment of purchasers who do not purchase in the original offering, the allowance of a deduction for any loss on a sale or other disposition, and the treatment of accrued original issue discount on such 2023 Bonds under federal individual alternative minimum taxes. 70 Under the Tax Code, original issue premium is amortized on an annual basis over the term of the 2023 Bond (said term being the shorter of the 2023 Bond’s maturity date or its call date). The amount of original issue premium amortized each year reduces the adjusted basis of the owner of the 2023 Bond for purposes of determining taxable gain or loss upon disposition.
The amount of original issue premium on a 2023 Bond is amortized each year over the term to maturity of the 2023 Bond on the basis of a constant interest rate compounded on each interest or principal payment date (with straight-line interpolations between compounding dates).
Amortized 2023 Bond premium is not deductible for federal income tax purposes. Owners of premium 2023 Bonds, including purchasers who do not purchase in the original offering, should consult their own tax advisors with respect to State of California personal income tax and federal income tax consequences of owning such 2023 Bonds.
California Tax Status. In the further opinion of Bond Counsel, interest on the 2023 Bonds is exempt from California personal income taxes.
Other Tax Considerations. Current and future legislative proposals, if enacted into law, clarification of the Tax Code or court decisions may cause interest on the 2023 Bonds to be subject, directly or indirectly, to federal income taxation or to be subject to or exempted from state income taxation, or otherwise prevent beneficial owners from realizing the full current benefit of the tax status of such interest. The introduction or enactment of any such legislative proposals, clarification of the Tax Code or court decisions may also affect the market price for, or marketability of, the 2023 Bonds. It cannot be predicted whether or in what form any such proposal might be enacted or whether, if enacted, such legislation would apply to bonds issued prior to enactment.
The opinions expressed by Bond Counsel are based upon existing legislation and regulations as interpreted by relevant judicial and regulatory authorities as of the date of such opinion, and Bond Counsel has expressed no opinion with respect to any proposed legislation or as to the tax treatment of interest on the 2023 Bonds, or as to the consequences of owning or receiving interest on the 2023 Bonds, as of any future date. Prospective purchasers of the 2023 Bonds should consult their own tax advisors regarding any pending or proposed federal or state tax legislation, regulations or litigation, as to which Bond Counsel expresses no opinion.
Owners of the 2023 Bonds should also be aware that the ownership or disposition of, or the accrual or receipt of interest on, the 2023 Bonds may have federal or state tax consequences other than as described above. Other than as expressly described above, Bond Counsel expresses no opinion regarding other federal or state tax consequences arising with respect to the 2023 Bonds, the ownership, sale or disposition of the 2023 Bonds, or the amount, accrual or receipt of interest on the 2023 Bonds.
NO RATINGS
The City has not applied to a rating agency for the assignment of a rating to the 2023 Bonds and does not contemplate applying for a rating.
71 NO LITIGATION
At the time of delivery of and payment for the 2023 Bonds, the City Attorney will deliver his opinion that to the best of its knowledge there is no action, suit, proceeding, inquiry or investigation at law or in equity before or by any court or regulatory agency pending against the City affecting its existence or the titles of its officers to office or seeking to restrain or to enjoin the issuance, sale or delivery of the 2023 Bonds, the application of the proceeds thereof in accordance with the Fiscal Agent Agreement, or the collection or application of the Special Tax to pay the principal of and interest on the 2023 Bonds, or in any way contesting or affecting the validity or enforceability of the 2023 Bonds, the Fiscal Agent Agreement or any action of the City contemplated by any of said documents, or in any way contesting the completeness or accuracy of this Official Statement or any amendment or supplement thereto, or contesting the powers of the City or its authority with respect to the 2023 Bonds or any action of the City contemplated by any of said documents.
EXECUTION
The execution and delivery of this Official Statement by the City has been duly authorized by the City Council on behalf of the District.
CITY OF ROSEVILLE
By:
Assistant City Manager/
Chief Financial Officer
A-1
APPENDIX A
RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX
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APPENDIX B
THE APPRAISAL
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APPENDIX C
THE CITY OF ROSEVILLE AND PLACER COUNTY
The District is located in the City of Roseville (the “City”), which is located in southwestern Placer County (the “County”), California (the “State”). Certain financial and economic data for the City, County and State are presented in this appendix for information purposes only. The 2023 Bonds are not a debt or obligation of the City, County or State, but are a limited obligation of the City, secured solely by the Special Tax Revenues and other amounts pledged under the Fiscal Agent Agreement, all as described in more detail in this Official Statement.
General
The City is located in the County, which is located in the Sacramento Valley near the foothills of the Sierra Nevada mountain range, about 16 miles northeast of Sacramento and 110 miles east of San Francisco. The City presently occupies 43 square miles in the southwestern part of the County and is the largest city in the County as well as the residential and business center of the County. It is bordered by Sacramento County to the south, the City of Rocklin to the north and un-incorporated Placer County to the east and west. The estimated population of the City as of January 2023 was approximately 152,928.
The City has warm summers typical of central California, with an average July temperature of 77 degrees. Winter temperatures are moderate; the average January temperature is 46 degrees. The temperature drops below freezing an average of eight days per year. Rainfall averages 20 inches annually and falls mostly during the winter.
The City is predominately comprised of residential housing, small and large businesses, as well as numerous retail centers, the latter of which play a vital role in the economy of the City and contribute significantly to City and County sales tax receipts. The City has the thirteenth highest retail sales of all cities in the State, and the City is considered a regional shopping destination. The Westfield Galleria at Roseville is the main shopping center in the City and the second largest shopping mall in Northern California. Across from the Westfield Galleria lies the “Fountains at Roseville,” a 330,000 square foot retail center, containing additional stores and several recreation centers. Plans call for future construction of hotel, additional retail, and office buildings in connection with the Fountains at Roseville project. In addition to the Westfield Galleria and Fountains at Roseville, the City has many shopping plazas surrounding the Westfield Galleria and the Douglas Boulevard financial corridor. The City is also home to one of the largest auto malls in the United States and a popular water park, Roseville Golfland-SunSplash.
Municipal Government
The City was incorporated on April 10, 1909 and is a charter city. The City operates under the council-manager form of government, with a five-member City Council elected by district for staggered four-year terms.
City services include, among others, police and fire protection, library services, street maintenance, and parks and recreation. The City also owns two golf courses and provides its own electricity, water, sewer and refuse services to its citizens.
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Population
The following table sets forth population estimates for the City, County and State for the past five years.
POPULATION ESTIMATES
City, County and State
Calendar Years 2019 through 2023, as of January 1
Year
City of
Roseville Placer County State of California
2019 141,097 395,345 39,605,361
2020 143,493 399,015› 39,648,938
2021 148,736 406,688 39,286,510
2022 151,450 409,441 39,078,674
2023 152,928 410,305 38,940,231
Source: California State Department of Finance.
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Effective Buying Income
Effective buying income (“EBI”) is designated as personal income less personal tax and non-tax payments. Personal income is the aggregate of wages and salaries, other labor income (such as employer contributions to private pension funds), proprietor’s income, rental income (which includes imputed rental income of owner-occupants of non-farm dwellings), dividends paid by corporations, personal interest income from all sources, and transfer payments (such as pensions and welfare assistance). Deducted from this total are personal taxes (federal, state and local), non-tax payments (such as fines, fees, penalties), and personal contributions for social insurance. Effective buying income is a bulk measure of market potential. It indicates the general ability to buy and is essential in comparing, selecting and grouping markets on that basis. The following table demonstrates the growth in annual estimated EBI for the City, the County, the State and the United States.
EFFECTIVE BUYING INCOME (EBI)
City, County, State and United States
As of January 1, 2019 through 2023
Year Area
Total Effective
Buying Income
(000’s Omitted)
Median
Household
Effective Buying
Income
2019 City of Roseville $4,981,208 $75,784
Placer County 14,736,480 74,797
California 1,183,264,399 62,637
United States 9,017,967,563 52,841
2020 City of Roseville $4,834,974 $72,395
Placer County 14,333,583 72,431
California 1,243,564,816 65,870
United States 9,487,165,436 55,303
2021 City of Roseville $4,126,395 $66,668
Placer County 12,122,101 65,269
California 1,036,142,723 55,681
United States 8,132,748,136 48,043
2022 City of Roseville $6,165,433 $87,539
Placer County 18,491,490 88,051
California 1,452,426,153 77,058
United States 11,208,582,541 64,448
2023 City of Roseville $6,996,310 $92,853
Placer County 19,349,979 91,862
California 1,461,799,662 77,175
United States 11,454,846,397 65,326
Source: Claritas, LLC.
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Employment and Industry
The unemployment rate in the Sacramento--Roseville--Arden-Arcade MSA was 3.8 percent in April 2023, down from a revised 4.4 percent in March 2023, and above the year-ago estimate of 3.4 percent. This compares with an unadjusted unemployment rate of 4.3 percent for California and 3.1 percent for the nation during the same period. The unemployment rate was 3.6 percent in El Dorado County, 3.3 percent in Placer County, 3.9 percent in Sacramento County, and 4.3 percent in Yolo County.
The following table summarizes the civilian labor force, employment and unemployment, as well as employment by industry, in the Sacramento--Arden-Arcade--Roseville MSA for the years 2018 through 2022.
CIVILIAN LABOR FORCE, EMPLOYMENT AND UNEMPLOYMENT
Sacramento Arden Arcade Roseville Metropolitan Statistical Area (El Dorado, Placer, Sacramento, and Yolo Counties)
Civilian Labor Force, Employment and Unemployment
Annual Averages
2018 2019 2020 2021 2022
Civilian Labor Force (1) 1,088,500 1,101,200 1,095,600 1,107,800 1,124,500 Employment 1,047,200 1,061,100 998,400 1,036,700 1,082,500 Unemployment 41,200 40,100 97,200 71,100 42,000
Unemployment Rate 3.8% 3.6% 8.9% 6.4% 3.7%
Wage and Salary Employment (2)
Agriculture 9,100 8,700 8,300 9,000 8,600
Mining and Logging 400 500 500 500 500
Construction 64,500 69,400 70,200 74,900 76,800
Manufacturing 36,000 36,800 36,100 37,700 40,300
Wholesale Trade 28,400 28,600 26,600 26,900 28,300
Retail Trade 102,000 100,500 95,100 101,600 100,800
Transportation, Warehousing and Utilities 29,500 32,200 34,300 37,500 40,500 Information 12,400 11,900 10,200 10,100 10,500
Finance and Insurance 36,700 35,200 34,800 34,100 33,200 Real Estate and Rental and Leasing 16,800 17,300 16,900 17,700 19,100 Professional and Business Services 136,000 137,300 133,500 140,600 147,500 Educational and Health Services 159,800 166,600 164,000 168,800 175,400 Leisure and Hospitality 106,200 109,600 83,900 93,600 108,700 Other Services 34,200 35,400 31,000 33,300 36,100
Federal Government 14,100 14,200 14,800 14,500 14,300
State Government 120,400 121,900 121,700 127,300 128,700 Local Government 103,500 105,300 98,900 98,400 102,900
Total, All Industries (3) 1,009,900 1,031,300 980,700 1,025,400 1,072,300
(1) Labor force data is by place of residence; includes self-employed individuals, unpaid family workers, household domestic workers, and workers on strike.
(2) Industry employment is by place of work; excludes self-employed individuals, unpaid family workers, household domestic workers, and workers on strike.
(3) Totals may not add due to rounding.
Source: State of California Employment Development Department C-5
Major Employers
The following table lists the major employers within the County, in alphabetical order.
MAJOR EMPLOYERS
Placer County
(In Alphabetical Order)
May 2023
Employer Location Industry
Backyard Bar & BBQ Truckee Restaurants
City of Roseville Roseville Government Offices-City/Village & Twp City of Roseville California Roseville Government Offices-City/Village & Twp Costco Wholesale Roseville Wholesale Clubs
Golfland Sunsplash Roseville Roseville Golf Courses-Miniature Kaiser Permanente Roseville MD Roseville Hospitals
Northstar California Truckee Resorts
Oracle Rocklin Computer Software-Manufacturers
Palisades Tahoe-Alpine Meadows Alpine Meadows Resorts
Placer County Fire Dept Auburn Fire Departments
Placer County Food Stamps Auburn County Government-Social/Human Resources Placer County Sheriff Auburn Government Offices-County
Placer County Sheriff Dept Tahoe City Government Offices-County PRIDE Industries Roseville Employment Agencies & Opportunities Resort At Squaw Creek A Alpine Meadows Hotels & Motels
Roseville Toyota Roseville Automobile Dealers-New Cars
Sheriff’s Training Auburn Government Offices-County
Sierra Joint Cmnty Clg Dist Rocklin School Districts
Stagg Howard A Pro Corp Roseville Attorneys
Sutter Auburn Faith Hospital Auburn Hospitals
Sutter Roseville Med Ctr Fndtn Roseville Hospitals
TASQ Technology Roseville Importers (whls)
Thunder Valley Casino Lincoln Casinos
Union Pacific Railroad Co Roseville Railroads
Walmart Supercenter Roseville Department Stores
Source: State of California Employment Development Department, extracted from the America’s Labor Market Information System (ALMIS) Employer Database, 2023 2nd Edition.
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Principal Employers
The following table shows the principal employers in the City, as shown in the City’s Comprehensive Annual Financial Report for fiscal year ending June 30, 2022.
PRINCIPAL EMPLOYERS
City of Roseville
As of June 30, 2022
Employer
Number of
Employees
The Kaiser Permanente Medical Group & Foundation Group 5,900 PRIDE Industries 5,342
Sutter Roseville Medical Group 3,361
Adventist Health 1,500
City of Roseville 1,277
Union Pacific Railroad Company 1,150
Roseville City School District 1,133
Roseville Joint Union High School 1,005
Penumbra 600
Consolidated Communications 507
Total – Top Ten 21,865
Total City-Wide Employment 92,281
Source: City of Roseville Comprehensive Annual Financial Report for Fiscal Year 2021-22.
Construction Permits
The following table shows valuations of residential and non-residential building permits issued for calendar years 2018 through 2022. Annual figures are not yet available for 2023.
BUILDING PERMIT VALUATION
City of Roseville
(Valuation in Thousands of Dollars)
2018 2019 2020 2021 2022
Permit Valuation
New Single-family $220,813.8 $265,615.3 $322,748.5 $467,676.3 $420,490.6 New Multi-family 0.0 6,855.8 46,469.0 0.0 1,552.1
Res. Alterations/Additions 8,598.7 16,133.8 5,126.3 39,648.3 5,529.1 Total Residential $229,412.5 $288,604.9 $374,343.8 $507,324.6 $427,571.8 New Commercial $21,072.5 $24,136.7 $23,230.8 $16,627.7 $40,882.5 New Industrial 0.0 0.0 0.0 0.0 0.0
New Other 11,541.4 9,358.1 12,610.6 12,351.9 7,312.1
Com. Alterations/Additions 38,098.5 46,155.6 24,553.9 29,192.0 42,938.9 Total Nonresidential $70,712.4 $79,650.40 $60,395.3 $58,171.6 $91,133.5 New Dwelling Units
Single-Family 806 1,001 1,226 1,860 1,618
Multiple Family 0 65 372 0 18
Total New Dwelling Units 806 1,066 1,598 1860 1,636
Source: Construction Industry Research Board, Building Permit Summary.
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The County’s 2022-23 assessment roll totaled $97,541,982,154 as compared to the prior year’s assessment roll of $89,326,713,518, which reflected a 9.20% increase this year. These numbers over the last two years contrast with the real estate decline years of 2008 and after, where the County assessment roll experienced declines.
The following table shows residential and non-residential building permits issued within the County for calendar years 2018 through 2022. Annual figures are not yet available for 2023.
BUILDING PERMIT VALUATION
County of Placer
(Valuation in Thousands of Dollars)
2018 2019 2020 2021 2022
Permit Valuation
New Single-family $696,737.4 $693,647.7 $827,822.1 $1,323,114.6 $1,193,148.4 New Multi-family 23,384.7 7,896.7 72,442.8 11,183.1 40,312.6 Res. Alterations/Additions 99,341.6 86,964.2 52,440.8 107,613.1 82,331.3 Total Residential $819,463.7 $788,508.6 $952,705.7 $1,441,910.8 $1,315,792.3 New Commercial $90,424.4 $73,609.7 $58,855.0 $52,238.1 $105,124.2 New Industrial 7,956.4 268.7 25.0 1,155.5 0.0
New Other 68,208.3 110,951.1 76,576.0 73,032.7 116,224.1 Com. Alterations/Additions 84,271.0 78,159.7 49,149.7 58,371.2 80,371.0 Total Nonresidential $250,860.1 $262,989.2 $184,605.7 $184,797.5 $301,719.3 New Dwelling Units
Single-Family 1,963 2,080 2,552 4,176 3,701
Multiple Family 19 71 540 66 351
Total New Dwelling Units 1,982 2,151 3,092 4,242 4,052
Source: Construction Industry Research Board, Building Permit Summary. [Remainder of page intentionally left blank]
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Commercial Activity
A summary of historic taxable sales within the City and the County during the past five years in which data is available is shown in the following tables.
The total taxable sales during calendar year 2022 in the City were reported to be $5,934,936,479, a 5.63% increase from the total taxable sales of $5,618,718,251 reported during the calendar year 2021.
CITY OF ROSEVILLE
Taxable Transactions
Calendar Years 2018 through 2022
(Dollars in Thousands)
Retail Stores Total All Outlets
Number
of Permits
Taxable
Transactions
Number
of Permits
Taxable
Transactions
2018 3,705 4,048,870 5,393 4,767,160
2019 3,748 4,021,058 5,578 4,889,702
2020 3,912 3,692,180 5,968 4,425,817
2021 3,623 4,800,774 5,602 5,618,718
2022 3,676 5,039,926 5,847 5,934,936
Source: State Department of Tax and Fee Administration
The total taxable sales during calendar year 2022 in the County were reported to be $13,351,486,567, an 5.69% increase over the total taxable sales of $12,632,960,416 reported during calendar year 2021.
PLACER COUNTY
Taxable Transactions
Calendar Years 2018 through 2022
(Dollars in Thousands)
Retail Stores Total All Outlets
Number
of Permits
Taxable
Transactions
Number
of Permits
Taxable
Transactions
2018 8,717 7,724,326 13,794 9,909,906
2019 8,771 7,943,537 14,193 10,341,805
2020 9,165 7,931,068 15,141 10,319,123
2021 8,130 9,627,064 13,720 12,632,960
2022 8,201 10,051,067 14,163 13,351,487
Source: State Department of Tax and Fee Administration.
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Transportation
The County’s transportation network is an integral part of its development. Centrally located in the State, the area is the hub of several major highways. Interstate 80 runs through the County, connecting San Francisco to New York. Highway 65 runs north from I-80 to Lincoln and Marysville. Interstate 5, which is west of the County, runs north to Seattle and south to Los Angeles. In the City, the major highways in the area are Interstate 80 and Interstate 5, and State Highways 65, 50, and 99.
Union Pacific Railroad bought Southern Pacific in 1996 and the J.R. Davis Yard, located in Roseville, is the largest rail facility on the West Coast. Union Pacific owns and operates track in 23 states, primarily west of the Mississippi River. Amtrak provides passenger service daily to San Francisco and San Jose, and the California Zephyr connects the County to the Midwest and Chicago.
Greyhound operates a station in Roseville, providing interstate destination services.
Greyhound also operates throughout the County, with bus depots or regularly scheduled stops in most of the communities along major highways and roads.
Sacramento International Airport is serves the Roseville area. Served by ten major carriers and several commuter airlines, as well as air freight carriers, the airport handles passenger flights to over 140 cities with more than 130 scheduled departures per day and 4.3 million passengers annually. Nearby Auburn Municipal Airport serves charter and private aircraft for coastal, state and transcontinental flights. Executive air service is available as well. Auburn Municipal has an elevation of 1,520 feet and an east/west runway 3,100 feet in length.
Several trucking companies serve the County, ranging from interstate lines to local haulers, and transporting a wide variety of goods. United Parcel Service, with a distribution center in Rocklin, offers freight transportation services as well.
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APPENDIX D
FORM OF OPINION OF BOND COUNSEL
[Closing Date]
City Council
City of Roseville
311 Vernon Street
Roseville, California 95678
OPINION: $__________ City of Roseville The Ranch at Sierra Vista Community Facilities District No. 1 (Public Facilities) Special Tax Bonds Series 2023 Members of the City Council:
We have acted as bond counsel to the City of Roseville (the “City”) in connection with the issuance by the City of the $__________ City of Roseville The Ranch at Sierra Vista Community Facilities District No. 1 (Public Facilities) Special Tax Bonds Series 2023 (the “Bonds”), pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, constituting Section 53311, et seq. of the California Government Code (the “Act”) and a Fiscal Agent Agreement dated as of September 1, 2020, as amended and supplemented by a Supplemental Agreement No. 1 to Fiscal Agent Agreement, dated as of December 1, 2021 and a Supplemental Agreement No. 2 to Fiscal Agent Agreement, dated as of July 1, 2023 (collectively, the “Fiscal Agent Agreement”), by and between the City, on behalf of the City of Roseville The Ranch at Sierra Vista Community Facilities District No. 1 (Public Facilities), and U.S. Bank Trust Company, National Association, as successor fiscal agent. We have examined the law and such certified proceedings and other papers as we deem necessary to render this opinion.
As to questions of fact material to our opinion, we have relied upon representations of the City contained in the Fiscal Agent Agreement, and in the certified proceedings and other certifications of public officials furnished to us, without undertaking to verify the same by independent investigation.
Based upon the foregoing, we are of the opinion, under existing law, as follows:
1. The City is duly created and validly existing as a public body, corporate and politic, with the power to adopt the resolution authorizing the issuance of the Bonds, enter into Supplemental Agreement No. 2 to Fiscal Agent Agreement, dated as of July 1, 2023, to perform the agreements on its part contained therein and in the Fiscal Agent Agreement, and to issue the Bonds.
2. The Bonds have been duly authorized, executed and delivered by the City and are valid and binding limited obligations of the City, payable solely from the sources provided therefor in the Fiscal Agent Agreement.
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3. The Fiscal Agent Agreement has been duly entered into by the City and constitutes a valid and binding obligation of the City enforceable upon the City.
4. Pursuant to the Act, the Fiscal Agent Agreement creates a valid lien on the funds pledged by the Fiscal Agent Agreement.
5. The interest on the Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax.
Interest on the Bonds may be subject to the corporate alternative minimum tax. The opinions set forth in the preceding sentences are subject to the condition that the City comply with all requirements of the Internal Revenue Code of 1986, as amended, relating to the exclusion from gross income for federal income tax purposes of interest on obligations such as the Bonds. The City has made certain representations and covenants in order to comply with each such requirement. Inaccuracy of those representations, or failure to comply with certain of those covenants, may cause the inclusion of such interest in gross income for federal income tax purposes, which may be retroactive to the date of issuance of the Bonds.
6. The interest on the Bonds is exempt from personal income taxation imposed by the State of California.
We express no opinion regarding any other tax consequences arising with respect to the ownership, sale or disposition of, or the amount, accrual or receipt of interest on, the Bonds.
The rights of the owners of the Bonds and the enforceability of the Bonds are limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors’ rights generally, and by equitable principles, whether considered at law or in equity.
This opinion is given as of the date hereof, and we assume no obligation to revise or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention, or any changes in law that may hereafter occur. Our engagement with respect to this matter has terminated as of the date hereof.
Respectfully submitted,
A Professional Law Corporation
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APPENDIX E
FORMS OF CONTINUING DISCLOSURE UNDERTAKINGS
CONTINUING DISCLOSURE CERTIFICATE
(City)
This CONTINUING DISCLOSURE CERTIFICATE (this “Disclosure Certificate”) dated as of July 1, 2023, is executed and delivered by the CITY OF ROSEVILLE (the “City”) in connection with the execution and delivery of its City of Roseville The Ranch at Sierra Vista Community Facilities District No. 1 (Public Facilities) Special Tax Bonds Series 2023 (the “Bonds”). The Bonds are being executed and delivered pursuant to a Fiscal Agent Agreement dated as of September 1, 2020, as amended and supplemented by a Supplemental Agreement No. 1 to Fiscal Agent Agreement, dated as of December 1, 2021 and a Supplemental Agreement No. 2 to Fiscal Agent Agreement, dated as of July 1, 2023 (collectively, the “Fiscal Agent Agreement”), by and between the City and U.S. Bank Trust Company, National Association, as successor fiscal agent (the “Fiscal Agent”).
The District covenants and agrees as follows:
Section 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the City for the benefit of the holders and beneficial owners of the Bonds and in order to assist the Participating Underwriter in complying with S.E.C. Rule 15c2- 12(b)(5).
Section 2. Definitions. In addition to the definitions set forth above and in the Fiscal Agent Agreement, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section 2, the following capitalized terms shall have the following meanings:
“Annual Report” means any Annual Report provided by the City pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate. “Annual Report Date” means the date that is nine months after the end of the City’s fiscal year (currently April 1 based on the City’s fiscal year end of June 30). “Dissemination Agent” means Willdan Financial Services, or any successor Dissemination Agent designated in writing by the City and which has filed with the City a written acceptance of such designation.
“Listed Events” means any of the events listed in Section 5(a) of this Disclosure Certificate. “MSRB” means the Municipal Securities Rulemaking Board, which has been designated by the Securities and Exchange Commission as the sole repository of disclosure information for purposes of the Rule, or any other repository of disclosure information that may be designated by the Securities and Exchange Commission as such for purposes of the Rule in the future.
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“Official Statement” means the final official statement executed by the City in connection with the issuance of the Bonds.
“Participating Underwriter” shall mean any of the original underwriters of the Bonds. “Rule” means Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as it may be amended from time to time.
Section 3. Provision of Annual Reports.
(a) The City shall, or shall cause the Dissemination Agent to, not later than the Annual Report Date, commencing April 1, 2024, with the report for the 2022-23 fiscal year, provide to the MSRB, in an electronic format as prescribed by the MSRB, an Annual Report that is consistent with the requirements of Section 4 of this Disclosure Certificate. Not later than 15 Business Days prior to the Annual Report Date, the City shall provide the Annual Report to the Dissemination Agent (if other than the City). If by 15 Business Days prior to the Annual Report Date the Dissemination Agent (if other than the City) has not received a copy of the Annual Report, the Dissemination Agent shall contact the City to determine if the City is in compliance with the previous sentence. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may include by reference other information as provided in Section 4 of this Disclosure Certificate; provided that the audited financial statements of the City may be submitted separately from the balance of the Annual Report, and later than the Annual Report Date, if not available by that date. If the City’s fiscal year changes, it shall give notice of such change in the same manner as for a Listed Event under Section 5(b). The City shall provide a written certification with each Annual Report furnished to the Dissemination Agent to the effect that such Annual Report constitutes the Annual Report required to be furnished by the City hereunder.
(b) If the City does not provide (or cause the Dissemination Agent to provide) an Annual Report by the Annual Report Date, the City shall provide (or cause the Dissemination Agent to provide) in a timely manner to the MSRB, in an electronic format as prescribed by the MSRB, a notice in substantially the form attached as Exhibit A to this Disclosure Certificate. (c) With respect to each Annual Report, the Dissemination Agent shall:
(i) determine prior to each Annual Report Date the then-applicable rules and electronic format prescribed by the MSRB for the filing of annual continuing disclosure reports; and
(ii) if the Dissemination Agent is other than the City, file a report with the City certifying that the Annual Report has been provided pursuant to this Disclosure Certificate, and stating the date it was provided.
Section 4. Content of Annual Reports. The City’s Annual Report shall contain or incorporate by reference the following:
(a) The City’s audited financial statements prepared in accordance with generally accepted accounting principles as promulgated to apply to governmental entities from time to time by the Governmental Accounting Standards Board. If the City’s audited financial statements are not available by the Annual Report Date, the Annual Report shall contain unaudited financial statements in a format similar to the financial statements contained in the Official Statement, and E-5
the audited financial statements shall be filed in the same manner as the Annual Report when they become available.
(b) The following information, unless otherwise specified, as of September 30 of the preceding year:
(i) Principal amount of all outstanding bonds of the District. (ii) Balance in the Improvement Fund.
(iii) Balance in each reserve account of the Reserve Fund, and statement of the Reserve Requirement for the Bonds. Statement of projected draws on any reserve account in the Reserve Fund, if any.
(iv) Balance in other funds and accounts held by the City or fiscal agent related to the Bonds.
(v) Additional debt authorized by the City and payable from or secured by assessments or special taxes with respect to property within the District. (vi) The Special Tax levy, the delinquency rate, total amount of delinquencies, number of parcels delinquent in payment for the five most recent fiscal years. (vii) Notwithstanding the September 30 reporting date, the following information shall be reported as of the last day of the month immediately preceding the date of the Annual Report rather than as of September 30. Identity of each delinquent taxpayer responsible for 5 percent or more of total Special Tax levied, and the following information:
assessor parcel number, assessed value of applicable properties, amount of Special Tax levied, amount delinquent by parcel number and status of foreclosure proceedings. If any foreclosure has been completed, summary of results of foreclosure sales or transfers. (viii) Most recently available total assessed value of all parcels subject to the Special Tax.
(ix) List of landowners and assessor’s parcel number of parcels subject to 20% or more of the Special Tax levy including the following information: development status to the extent shown in City records, land use classification, assessed value (land and improvements).
(c) In addition to any of the information expressly required to be provided under this Disclosure Certificate, the City shall provide such further material information, if any, as may be necessary to make the specifically required statements, in the light of the circumstances under which they are made, not misleading.
(d) Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues of the City or related public entities, which are available to the public on the MSRB’s Internet web site or filed with the Securities and Exchange Commission. The City shall clearly identify each such other document so included by reference.
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Section 5. Reporting of Significant Events.
(a) The City shall give, or cause to be given, notice of the occurrence of any of the following Listed Events with respect to the Bonds:
(1) Principal and interest payment delinquencies.
(2) Non-payment related defaults, if material.
(3) Unscheduled draws on debt service reserves reflecting financial difficulties.
(4) Unscheduled draws on credit enhancements reflecting financial difficulties.
(5) Substitution of credit or liquidity providers, or their failure to perform. (6) Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the security, or other material events affecting the tax status of the security.
(7) Modifications to rights of security holders, if material. (8) Bond calls, if material, and tender offers.
(9) Defeasances.
(10) Release, substitution, or sale of property securing repayment of the securities, if material.
(11) Rating changes.
(12) Bankruptcy, insolvency, receivership or similar event of the City or other obligated person.
(13) The consummation of a merger, consolidation, or acquisition involving the City or an obligated person, or the sale of all or substantially all of the assets of the City or an obligated person (other than in the ordinary course of business), the entry into a definitive agreement to undertake such an action, or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material. (14) Appointment of a successor or additional fiscal agent or the change of name of the fiscal agent, if material.
(15) Incurrence of a financial obligation of the City, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a financial obligation of the City, any of which affect E-7
security holders, if material (for the definition of “financial obligation,” see clause (e)).
(16) Default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a financial obligation of the City, any of which reflect financial difficulties (for the definition of “financial obligation,” see clause (e)).
(b) Whenever the City obtains knowledge of the occurrence of a Listed Event, the City shall, or shall cause the Dissemination Agent (if not the City) to, file a notice of such occurrence with the MSRB, in an electronic format as prescribed by the MSRB, in a timely manner not in excess of 10 business days after the occurrence of the Listed Event. Notwithstanding the foregoing, notice of Listed Event described in subsection (a)(8) above need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to holders of affected Bonds under the Fiscal Agent Agreement.
(c) The City acknowledges that the events described in subparagraphs (a)(2), (a)(7), (a)(8) (if the event is a bond call), (a)(10), (a)(13), (a)(14) and (a)(15) of this Section 5 contain the qualifier “if material” and that subparagraph (a)(6) also contains the qualifier “material” with respect to certain notices, determinations or other events affecting the tax status of the Bonds.
The City shall cause a notice to be filed as set forth in paragraph (b) above with respect to any such event only to the extent that it determines the event’s occurrence is material for purposes of U.S. federal securities law. Whenever the City obtains knowledge of the occurrence of any of these Listed Events, the City will as soon as possible determine if such event would be material under applicable federal securities law. If such event is determined to be material, the City will cause a notice to be filed as set forth in paragraph (b) above. The Dissemination Agent shall not be responsible for determining whether an event is material. (d) For purposes of this Disclosure Certificate, any event described in paragraph (a)(12) above is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent, or similar officer for the City in a proceeding under the United States Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the City, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement, or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the City. (e) For purposes of Section 5(a)(15) and (16), “financial obligation” means a (i) debt obligation; (ii) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (iii) guarantee of (i) or (ii). The term financial obligation shall not include municipal securities as to which a final official statement has been provided to the MSRB consistent with the Rule.
Section 6. Identifying Information for Filings with the MSRB. All documents provided to the MSRB pursuant to this Disclosure Certificate shall be accompanied by identifying information as prescribed by the MSRB.
Section 7. Termination of Reporting Obligation. The City’s obligations under this Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment in E-8
full of all of the Bonds. If such termination occurs prior to the final maturity of the Bonds, the City shall give notice of such termination in the same manner as for a Listed Event under Section 5(b).
Section 8. Dissemination Agent. The City may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any Dissemination Agent, with or without appointing a successor Dissemination Agent. Any Dissemination Agent may resign by providing 30 days’ written notice to the City.
Section 9. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Certificate, the City may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, provided that the following conditions are satisfied:
(a) if the amendment or waiver relates to the provisions of Sections 3(a), 4 or 5(a), it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature, or status of an obligated person with respect to the Bonds, or type of business conducted; (b) the undertakings herein, as proposed to be amended or waived, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the primary offering of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and (c) the proposed amendment or waiver either (i) is approved by holders of the Bonds in the manner provided in the Fiscal Agent Agreement for amendments to the Fiscal Agent Agreement with the consent of holders, or (ii) does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the holders or beneficial owners of the Bonds.
If the annual financial information or operating data to be provided in the Annual Report is amended pursuant to the provisions hereof, the first Annual Report filed pursuant hereto containing the amended operating data or financial information shall explain, in narrative form, the reasons for the amendment and the impact of the change in the type of operating data or financial information being provided.
If an amendment is made to this Disclosure Certificate modifying the accounting principles to be followed in preparing financial statements, the Annual Report for the year in which the change is made shall present a comparison between the financial statements or information prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. The comparison shall include a qualitative discussion of the differences in the accounting principles and the impact of the change in the accounting principles on the presentation of the financial information, in order to provide information to investors to enable them to evaluate the ability of the City to meet its obligations. To the extent reasonably feasible, the comparison shall be quantitative.
A notice of any amendment made pursuant to this Section 9 shall be filed in the same manner as for a Listed Event under Section 5(b).
Section 10. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the City from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other E-9
information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Certificate. If the City chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Certificate, the City shall have no obligation under this Disclosure Certificate to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event.
Section 11. Default. If the City fails to comply with any provision of this Disclosure Certificate, the Participating Underwriter or any holder or beneficial owner of the Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City to comply with its obligations under this Disclosure Certificate. A default under this Disclosure Certificate shall not be deemed an Event of Default under the Fiscal Agent Agreement, and the sole remedy under this Disclosure Certificate in the event of any failure of the City to comply with this Disclosure Certificate shall be an action to compel performance.
Section 12. Duties, Immunities and Liabilities of Dissemination Agent. (a) The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and the City agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which they may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys’ fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent’s negligence or willful misconduct. The Dissemination Agent shall have no duty or obligation to review any information provided to it by the City hereunder and shall not be deemed to be acting in any fiduciary capacity for the City, the Bond holders, or any other party. The obligations of the City under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds. (b) The Dissemination Agent shall be paid compensation by the City for its services provided hereunder in accordance with its schedule of fees as amended from time to time, and shall be reimbursed for all expenses, legal fees and advances made or incurred by the Dissemination Agent in the performance of its duties hereunder.
Section 13. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the City, the Dissemination Agent, the Participating Underwriter and the holders and beneficial owners from time to time of the Bonds, and shall create no rights in any other person or entity.
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Section 14. Counterparts. This Disclosure Certificate may be executed in several counterparts, each of which shall be regarded as an original, and all of which shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Disclosure Certificate as of the date first above written.
CITY OF ROSEVILLE, for and on behalf of
City of Roseville The Ranch at Sierra Vista
Community Facilities District No. 1 (Public
Facilities)
By:
Name:
Title:
WILLDAN FINANCIAL SERVICES, as
Dissemination Agent
By:
Name:
Title:
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EXHIBIT A
NOTICE TO REPOSITORIES OF FAILURE TO FILE ANNUAL REPORT Name of Issuer: City of Roseville
Name of Bond Issue: $__________ City of Roseville The Ranch at Sierra Vista Community Facilities District No. 1 (Public Facilities) Special Tax Bonds Series 2023
Date of Issuance: ______________, 2023
NOTICE IS HEREBY GIVEN that the City of Roseville (the “City”) on behalf of City of Roseville The Ranch at Sierra Vista Community Facilities District No. 1 (Public Facilities) has not provided an Annual Report with respect to the above-named Bonds as required by the Fiscal Agent Agreement, dated as of September 1, 2020, as supplemented and amended (collectively, the “Fiscal Agent Agreement”) by and between the City and U.S. Bank Trust Company, National Association, as Fiscal Agent. The City anticipates that the Annual Report will be filed by _____________.
Dated: _______________
WILLDAN FINANCIAL SERVICES, as
Dissemination Agent, on behalf of City of
Roseville The Ranch at Sierra Vista
Community Facilities District No. 1 (Public
Facilities)
By:
Name:
Title:
cc: City of Roseville
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FORM OF CONTINUING DISCLOSURE CERTIFICATE
(Developer)
THIS CONTINUING DISCLOSURE AGREEMENT (the “Disclosure Certificate”) dated as of July 1, 2023, is executed by Sierra Vista Communities, LLC, a California limited liability company (the “Master Developer”) in connection with the execution and delivery by the City of Roseville of its City of Roseville The Ranch at Sierra Vista Community Facilities District No. 1 (Public Facilities) Special Tax Bonds Series 2023 (the “Bonds”). The Bonds are being executed and delivered pursuant to a Fiscal Agent Agreement, dated as of September 1, 2020, as amended and supplemented by a Supplemental Agreement No. 1 to Fiscal Agent Agreement, dated as of December 1, 2021 and a Supplemental Agreement No. 2 to Fiscal Agent Agreement, dated as of July 1, 2023 (together, the “Fiscal Agent Agreement”), by and between the City and U.S. Bank Trust Company, National Association, as successor fiscal agent (the “Fiscal Agent”).
The Master Developer covenants and agrees as follows:
Section 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the Master Developer for the benefit of the holders and beneficial owners of the Bonds.
Section 2. Definitions. In addition to the definitions set forth above and in the Fiscal Agent Agreement, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section, the following capitalized terms shall have the following meanings:
“Affiliate” of another Person means (a) a Person directly or indirectly owning, controlling, or holding with power to vote, 5% or more of the outstanding voting securities of such other Person, (b) any Person, 5% or more of whose outstanding voting securities are directly or indirectly owned, controlled, or held with power to vote, by such other Person, and (c) any Person directly or indirectly controlling, controlled by, or under common control with, such other Person.
For purposes hereof, “control” means the power to exercise a controlling influence over the management or policies of a Person, unless such power is solely the result of an official position with such Person. For purposes of this Disclosure Certificate, Lennar Homes shall be considered an Affiliate of the Master Developer, and the Master Developer will provide information pursuant to this Disclosure Certificate regarding Lennar Homes and the Property owned by Lennar Homes. “Assumption Agreement” means an undertaking of a Major Owner, or an Affiliate thereof, for the benefit of the holders and beneficial owners of the Bonds containing terms substantially similar to this Disclosure Certificate (as modified for such Major Owner’s development and financing plans with respect to the District), whereby such Major Owner or Affiliate agrees to provide periodic reports and notices of significant events, setting forth the information described in sections 4 and 5 hereof, respectively, with respect to the portion of the property in the District owned by such Major Owner and its Affiliates and, at the option of the Master Developer or such Major Owner, agrees to indemnify the Dissemination Agent (if any) pursuant to a provision substantially in the form of Section 11 hereof. Notwithstanding the foregoing, the sale of all or a portion of the Property to Lennar Homes shall not require an Assumption Agreement because the Master Developer has agreed to provide information on Lennar Homes and its property under this Disclosure Certificate.
“Dissemination Agent” means a dissemination agent designated in writing by the Master Developer, and which has filed with the Master Developer and the City a written acceptance of E-13
such designation, and which is experienced in providing dissemination agent services such as those required under this Disclosure Certificate. The initial Dissemination Agent shall be the Master Developer.
“District” means the City of Roseville The Ranch at Sierra Vista Community Facilities District No. 1 (Public Facilities).
“Lennar Homes” means Lennar Homes of California, LLC, a California limited liability company.
“Listed Events” means any of the events listed in Section 5(a) of this Disclosure Certificate. “Major Owner” means, as of any Report Date, an owner of land in the District that (i) is to be developed into 110 or more residential lots or (ii) is responsible in the aggregate for 20% or more of the Special Taxes in the District anticipated to be levied at any time during the thencurrent fiscal year. “MSRB” means the Municipal Securities Rulemaking Board, which has been designated by the Securities and Exchange Commission as the sole repository of disclosure information for purposes of the Rule, or any other repository of disclosure information that may be designated by the Securities and Exchange Commission as such for purposes of the Rule in the future. “Official Statement” means the final official statement executed by the City in connection with the issuance of the Bonds.
“Participating Underwriter” means Stifel, Nicolaus & Company, Incorporated, the original Underwriter of the Bonds.
“Periodic Report” means any Periodic Report provided by the Master Developer pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate. “Person” means an individual, a corporation, a partnership, a limited liability company, an association, a joint stock company, a trust, any unincorporated organization or a government or political subdivision thereof.
“Property” means the property owned by the Master Developer or Lennar Homes in the District.
“Report Date” means May 1 and November 1 of any fiscal year. “Rule” means Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. “Special Taxes” means the special taxes of the District levied on taxable property within the District.
Section 3. Provision of Periodic Reports.
(a) Until the Master Developer’s obligations under this Disclosure Certificate are terminated in accordance with Section 6 herein, the Master Developer shall, or, upon written direction of the Master Developer the Dissemination Agent shall, not later than the Report Date, E-14
commencing November 1, 2023, file or cause to be filed with the MSRB a Periodic Report which is consistent with the requirements of Section 4 of this Disclosure Certificate with a copy to the Participating Underwriter and the City. Not later than 15 calendar days prior to the Report Date, the Master Developer shall provide the Periodic Report to the Dissemination Agent (if different from the Master Developer). The Master Developer shall provide a written certification with (or included as a part of) each Periodic Report furnished to the Dissemination Agent (if different from the Master Developer), the Participating Underwriter and the City to the effect that such Periodic Report constitutes the Periodic Report required to be furnished by it under this Disclosure Certificate. The Dissemination Agent, the Participating Underwriter and the City may conclusively rely upon such certification of the Master Developer and shall have no duty or obligation to review the Periodic Report. The Periodic Report may be submitted as a single document or as separate documents comprising a package, and may incorporate by reference other information as provided in Section 4 of this Disclosure Certificate.
(b) If the Dissemination Agent does not receive a Periodic Report by 15 calendar days prior to the Report Date, the Dissemination Agent shall send a reminder notice to the Master Developer that the Periodic Report has not been provided as required under Section 3(a) above.
The reminder notice shall instruct the Master Developer to determine whether its obligations under this Disclosure Certificate have terminated (pursuant to Section 6 below) and, if so, to provide the Dissemination Agent with a notice of such termination in the same manner as for a Listed Event (pursuant to Section 5 below). If the Master Developer does not provide, or cause the Dissemination Agent to provide, a Periodic Report to the MSRB by the Report Date as required in subsection (a) above, the Dissemination Agent shall, in a timely manner, send a notice to the MSRB in substantially the form attached hereto as Exhibit A, with a copy to the City and the Participating Underwriter.
(c) With respect to the Periodic Report, the Dissemination Agent shall, to the extent the Periodic Report has been furnished to it, file the Periodic Report with the MSRB and file a report with the Master Developer (if the Dissemination Agent is other than the Master Developer), the City and the Participating Underwriter certifying that the Periodic Report has been provided pursuant to this Disclosure Certificate, stating the date it was provided to and filed with the MSRB.
Section 4. Content of Periodic Reports. The Master Developer’s Periodic Report shall contain or incorporate by reference the information set forth in Exhibit B relating to the Master Developer (which information shall track the format of Table 2 to the Official Statement, to the extent possible), any or all of which may be included by specific reference to other documents, including official statements of debt issues, which have been submitted to the MSRB or the Securities and Exchange Commission. If the document included by reference is a final official statement, it must be available from the MSRB. The Master Developer shall clearly identify each such other document so included by reference.
In addition to any of the information expressly required to be provided in Exhibit B, the Master Developer’s Periodic Report shall include such further information, if any, as may be necessary to make the statements required by Exhibit B, in the light of the circumstances under which they are made, not misleading.
Section 5. Reporting of Significant Events.
(a) Until the Master Developer’s obligations under this Disclosure Certificate are terminated in accordance with Section 6 herein, the Master Developer shall give, or cause to be E-15
given, notice of the occurrence of any of the following Listed Events with respect to itself or the Property, if material:
(i) bankruptcy or insolvency proceedings commenced by or against the Master Developer and Lennar Homes and, if known, any bankruptcy or insolvency proceedings commenced by or against any Affiliate of the Master Developer that is reasonably likely to have a significant impact on the Master Developer’s or Lennar Homes’ ability to pay Special Taxes or to sell or develop the Property; (ii) failure to pay any taxes, special taxes (including the Special Taxes) or assessments due with respect to the Property owned by the Master Developer or Lennar Homes on or prior to the delinquency date;
(iii) filing of a lawsuit of which the Master Developer is aware against the Master Developer, Lennar Homes, or an Affiliate seeking damages, which is reasonably likely to have a significant impact on the Master Developer’s or Lennar Homes’ ability to pay Special Taxes or to sell or develop the Property;
(iv) material damage to or destruction of any of the improvements on the Property; and
(v) any payment default or other material default by the Master Developer or Lennar Homes on any loan with respect to the construction of improvements on the Property.
(b) Whenever the Master Developer obtains knowledge of the occurrence of a Listed Event, the Master Developer shall as soon as possible determine if such event would be material under applicable Federal securities law.
(c) If the Master Developer determines that knowledge of the occurrence of a Listed Event would be material under applicable Federal securities law, the Master Developer shall, or shall cause the Dissemination Agent to, promptly file a notice of such occurrence with the MSRB, with a copy to the City and the Participating Underwriter.
Section 6. Duration of Reporting Obligation.
(a) All the Master Developer’s obligations hereunder shall commence on the date hereof and terminate (except as provided in Section 11) on the earliest to occur of the following:
(i) upon the legal defeasance, prior redemption or payment in full of all the Bonds, or
(ii) the earlier of (i) the date that the property owned by the Master Developer and Lennar Homes combined is responsible for less than 20% of the special tax levy in the District or (ii) the date that the Master Developer and Lennar Homes combined own less than 110 residential lots in the District (or property that may be subdivided into less than 110 residential lots in the District), or
(iii) the date on which the Master Developer prepays in full all of the Special Taxes attributable to the Property owned by the Master Developer and Lennar Homes.
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The Master Developer shall give notice of the termination of its obligations under this Disclosure Certificate in the same manner as for a Listed Event under Section 5. (b) If a portion of the Property owned by the Master Developer, or any Affiliate of the Master Developer, is conveyed to a Person that, upon such conveyance, will be a Major Owner, the obligations of the Master Developer hereunder with respect to the property in the District owned by such Major Owner and its Affiliates may be assumed by such Major Owner or by an Affiliate thereof, and if so assumed the Master Developer’s obligations hereunder with respect to such portion of the Property will be terminated. In order to effect such an assumption, such Major Owner or Affiliate shall enter into an Assumption Agreement. If not so assumed, the Master Developer shall report the information, as applicable to the transferee, required herein so long as the transferee is a Major Owner.
Section 7. Dissemination Agent. The Master Developer may, from time to time, appoint or engage a Dissemination Agent to assist the Master Developer in carrying out its obligations under this Disclosure Certificate, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. The Dissemination Agent may resign by providing thirty days’ written notice to the City, the Master Developer and the Participating Underwriter.
Section 8. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Certificate, the Master Developer may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, provided that the following conditions are satisfied (provided, however, that the Dissemination Agent shall not be obligated under any such amendment that modifies or increases its duties or obligations hereunder without its written consent thereto):
(a) if the amendment or waiver relates to the provisions of sections 3(a), 4 or 5(a), it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature, or status of an obligated person with respect to the Bonds, or type of business conducted; and (b) the proposed amendment or waiver either (i) is approved by holders of the Bonds in the manner provided in the Fiscal Agent Agreement, with the consent of holders, or (ii) does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the holders or beneficial owners of the Bonds.
Section 9. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the Master Developer from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Periodic Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Certificate. If the Master Developer chooses to include any information in any Periodic Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Certificate, the Master Developer shall have no obligation under this Disclosure Certificate to update such information or include it in any future Periodic Report or notice of occurrence of a Listed Event.
Section 10. Default. In the event of a failure of the Master Developer to comply with any provision of this Disclosure Certificate, the Participating Underwriter and any holder or beneficial owner of the Bonds may, take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the Master Developer to comply E-17
with its obligations under this Disclosure Certificate. A default under this Disclosure Certificate shall not be deemed an Event of Default under the Fiscal Agent Agreement, and the sole and exclusive remedy under this Disclosure Certificate in the event of any failure of the Master Developer to comply with this Disclosure Certificate shall be an action to compel performance.
Section 11. Duties, Immunities and Liabilities of Dissemination Agent. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and the Master Developer agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents (each, an “Indemnified Party”), harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the reasonable costs and expenses (including attorneys’ fees) of defending against any claim of liability, but excluding loss, liabilities, costs and expenses due to an Indemnified Party’s negligence or willful misconduct or failure to perform its duties hereunder. If the Dissemination Agent is someone other than the Master Developer, the Dissemination Agent shall be paid compensation for its services provided hereunder in accordance with its schedule of fees as amended from time to time, which schedule, as amended, shall be reasonably acceptable, and all reasonable expenses, reasonable legal fees and advances made or incurred by the Dissemination Agent in the performance of its duties hereunder. If the Dissemination Agent is someone other than the Master Developer, the Dissemination Agent shall have no duty or obligation to review any information provided to it hereunder. The Dissemination Agent shall not be deemed to be acting in any fiduciary capacity for the City, the Master Developer, the Bond owners, or any other party. The obligations of the Master Developer under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds.
Section 12. Notices. Any notice or communications to be among any of the parties to this Disclosure Certificate may be given by regular, overnight or electronic mail as follows:
To the Master Developer Sierra Vista Communities, LLC
1025 Creekside Ridge Drive, Suite 240
Roseville, CA 95678
Email: [email protected]
Email: [email protected]
To the Issuer/City: City of Roseville
311 Vernon Street
Roseville, CA 95678
Attn: CFD Administrator
Email: [email protected]
To the Participating
Underwriter: Stifel, Nicolaus & Company, Incorporated
One Montgomery Street
San Francisco, CA 94104
Attn: Eileen Gallagher
Email: [email protected]
Any person may, by written notice to the other persons listed above, designate a different address or telephone number(s) to which subsequent notices or communications should be sent.
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Section 13. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the City, the Master Developer (its successors and assigns), the Dissemination Agent, the Participating Underwriter and holders and beneficial owners from time to time of the Bonds, and shall create no rights in any other person or entity. All obligations of the Master Developer hereunder shall be assumed by any legal successor to the obligations of the Master Developer as a result of a sale, merger, consolidation or other reorganization.
Section 14. Counterparts. This Disclosure Certificate may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the Master Developer has executed this Disclosure Certificate as of the date first above written.
MASTER DEVELOPER:
SIERRA VISTA COMMUNITIES, LLC,
a California limited liability company
By: LENNAR HOMES OF CALIFORNIA,
LLC,
a California limited liability company,
Its: Manager
By:
Name:
Its:
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EXHIBIT A
NOTICE TO REPOSITORIES OF FAILURE TO FILE PERIODIC REPORT Name of Issuer: City of Roseville
Name of Bond Issue: $__________ City of Roseville, The Ranch at Sierra Vista Community Facilities District No. 1 (Public Facilities), Special Tax Bonds, Series 2023
Date of Issuance: __________, 2023
NOTICE IS HEREBY GIVEN that _______________ (the “Major Owner”) has not provided a Periodic Report with respect to the above-named Bonds as required by the Continuing Disclosure Certificate of the Master Developer dated as of July 1, 2023. The Master Developer anticipates that the Periodic Report will be filed by _____________.
Dated: _______________
___________________________________,
Dissemination Agent
By: __________________________________
Its: __________________________________
cc: Master Developer
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EXHIBIT B
PERIODIC REPORT
This Periodic Report is hereby submitted under Section 4 of the Continuing Disclosure Certificate (the “Disclosure Certificate”) dated July 1, 2023, executed by the undersigned (the “Master Developer”) in connection with the issuance of the Bonds by the City of Roseville (the “City”) with respect to its City of Roseville The Ranch at Sierra Vista Community Facilities District No. 1 (Public Facilities) (the “District”).
Capitalized terms used in this Periodic Report but not otherwise defined have the meanings given to them in the Disclosure Certificate.
I. Property Ownership and Development
The information in this section is provided as of ____________________ (this date must be not more than 60 days before the date that this Periodic Report is due for filing).
A. Property currently owned by the Master Developer and Lennar Homes in the District (the “Property”):
Development name:
Number of lots (acreage, if un-subdivided):
B. Status of land development or construction activities:
______________________________________________________________________ ______________________________________________________________________ C. Status of building permits and any significant amendments to land use or development entitlements:
______________________________________________________________________ ______________________________________________________________________ D. Aggregate property sold, optioned or leased by the Master Developer and Lennar Homes to end users or merchant builders:
Since the Date of Issuance
of the Bonds
Since the Last Periodic
Report
Acres* ____
Lots ____
Bldg. Sq. Ft. ____
Acres* ____
Lots ____
Bldg. Sq. Ft. ____
* For bulk land sales only (excluding sales of finished lots or completed buildings).
E. Status of any land purchase contracts with regard to the Property, whether acquisition of land in the District by the Master Developer or sales of land in the District to other E-21
property owners, distinguishing between (i) end users (e.g., condominiums), (ii) developers and (iii) merchant builders.
______________________________________________________________________ ______________________________________________________________________ II. Legal and Financial Status of Master Developer and Lennar Homes Unless such information has previously been included or incorporated by reference in a Periodic Report, describe any change in the legal structure of the Master Developer and Lennar Homes or the financial condition and financing plan of the Master Developer and Lennar Homes that would materially and adversely interfere with its ability to complete its development plan described in the Official Statement.
______________________________________________________________________ ______________________________________________________________________ III. Change in Development or Financing Plans
Unless such information has previously been included or incorporated by reference in a Periodic Report, describe any development plans or financing plans relating to the Property that are materially different from the proposed development and financing plan described in the Official Statement.
______________________________________________________________________ ______________________________________________________________________ IV. Official Statement Updates
Unless such information has previously been included or incorporated by reference in a Periodic Report, describe any other significant changes in the information relating to the Master Developer and Lennar Homes or the Property contained in the Official Statement under the heading “OWNERSHIP OF PROPERTY WITHIN THE DISTRICT” that would materially and adversely interfere with the Master Developer’s or Lennar Homes’ ability to develop and sell the Property as described in the Official Statement.
______________________________________________________________________ ______________________________________________________________________ V. Other Material Information
In addition to any of the information expressly required above, provide such further information, if any, as may be necessary to make the specifically required statements, in the light of the circumstances under which they are made, not misleading. _____________________________________________________________________ ______________________________________________________________________ E-22
Certification
The undersigned Master Developer hereby certifies that this Periodic Report constitutes the Periodic Report required to be furnished by the Master Developer under the Disclosure Certificate.
ANY STATEMENTS REGARDING THE MASTER DEVELOPER, THE DEVELOPMENT OF THE PROPERTY, THE MASTER DEVELOPER’S FINANCING PLAN OR FINANCIAL
CONDITION, OR THE BONDS, OTHER THAN STATEMENTS MADE BY THE MASTER
DEVELOPER IN AN OFFICIAL RELEASE, OR FILED WITH THE MUNICIPAL SECURITIES RULEMAKING BOARD, ARE NOT AUTHORIZED BY THE MASTER DEVELOPER. THE
MASTER DEVELOPER IS NOT RESPONSIBLE FOR THE ACCURACY, COMPLETENESS OR FAIRNESS OF ANY SUCH UNAUTHORIZED STATEMENTS.
THE MASTER DEVELOPER HAS NO OBLIGATION TO UPDATE THIS PERIODIC REPORT OTHER THAN AS EXPRESSLY PROVIDED IN THE DISCLOSURE CERTIFICATE.
Dated:
MASTER DEVELOPER: _____________________
By: _____________________________
_____________________________
_____________________________
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APPENDIX F
SUMMARY OF CERTAIN PROVISIONS OF FISCAL AGENT AGREEMENT G-1
APPENDIX G
DTC AND THE BOOK-ENTRY ONLY SYSTEM
The following description of the Depository Trust Company (“DTC”), the procedures and record keeping with respect to beneficial ownership interests in the 2023 Bonds, payment of principal, interest and other payments on the 2023 Bonds (herein, the “Securities”) to DTC Participants or Beneficial Owners, confirmation and transfer of beneficial ownership interest in the Securities and other related transactions by and between DTC, the DTC Participants and the Beneficial Owners is based solely on information provided by DTC. Accordingly, no representations can be made concerning these matters and neither the DTC Participants nor the Beneficial Owners should rely on the foregoing information with respect to such matters, but should instead confirm the same with DTC or the DTC Participants, as the case may be.
Neither the issuer of the Securities (the “Issuer”) nor the fiscal agent appointed with respect to the Securities (the “Agent”) takes any responsibility for the information contained in this Appendix.
No assurances can be given that DTC, Direct Participants or Indirect Participants will distribute to the Beneficial Owners (a) payments of interest, principal or premium, if any, with respect to the Securities, (b) certificates representing ownership interest in or other confirmation or ownership interest in the Securities, or (c) redemption or other notices sent to DTC or Cede & Co., its nominee, as the registered owner of the Securities, or that they will so do on a timely basis, or that DTC, Direct Participants or Indirect Participants will act in the manner described in this Appendix. The current “Rules” applicable to DTC are on file with the Securities and Exchange Commission and the current “Procedures” of DTC to be followed in dealing with DTC Participants are on file with DTC.
1. The Depository Trust Company (“DTC”) will act as securities depository for the securities (the “Securities”). The Securities will be issued as fully-registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered Security certificate will be issued for each issue of the Securities, each in the aggregate principal amount of such issue, and will be deposited with DTC. If, however, the aggregate principal amount of any issue exceeds $500 million, one certificate will be issued with respect to each $500 million of principal amount, and an additional certificate will be issued with respect to any remaining principal amount of such issue.
2. DTC, the world’s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates.
Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding G-2
company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). DTC has a Standard & Poor’s rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com. The information contained on this Internet site is not incorporated herein by reference.
3. Purchases of Securities under the DTC system must be made by or through Direct Participants, which will receive a credit for the Securities on DTC’s records. The ownership interest of each actual purchaser of each Security (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Securities, except in the event that use of the book-entry system for the Securities is discontinued.
4. To facilitate subsequent transfers, all Securities deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Securities with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Securities; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Securities are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.
5. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Securities may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Securities, such as redemptions, tenders, defaults, and proposed amendments to the Security documents. For example, Beneficial Owners of Securities may wish to ascertain that the nominee holding the Securities for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them.
6. Redemption notices shall be sent to DTC. If less than all of the Securities within an issue are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed.
7. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Securities unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to Issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting G-3
rights to those Direct Participants to whose accounts Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy).
8. Redemption proceeds, distributions, and dividend payments on the Securities will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from Issuer or Agent, on payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC, Agent, or Issuer, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of Issuer or Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.
9. DTC may discontinue providing its services as depository with respect to the Securities at any time by giving reasonable notice to Issuer or Agent. Under such circumstances, in the event that a successor depository is not obtained, Security certificates are required to be printed and delivered.
10. Issuer may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, Security certificates will be printed and delivered to DTC.
11. The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that Issuer believes to be reliable, but Issuer and Agent take no responsibility for the accuracy thereof.
Jones Hall Draft of May 30, 2023
SUPPLEMENTAL AGREEMENT NO. 2 TO
FISCAL AGENT AGREEMENT
by and between
CITY OF ROSEVILLE
and
U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION,
as Fiscal Agent
Dated as of June 1, 2023
Relating to:
$______________
City of Roseville
The Ranch at Sierra Vista Community Facilities District No. 1 (Public Facilities) Special Tax Bonds
Series 2023
-iTABLE OF CONTENTS
SECTION 1. Supplement to Original Fiscal Agent Agreement ...............................................................2
ARTICLE XI
2023 BONDS
Section 11.01. Definitions ....................................................................................................... 2 Section 11.02. Authorization of 2023 Bonds........................................................................... 3 Section 11.03. Terms of 2023 Bonds...................................................................................... 4 Section 11.04. Redemption of 2023 Bonds ............................................................................ 4 Section 11.05. Form of 2023 Bonds; Authentication and Delivery.......................................... 8 Section 11.06. Application of Proceeds of Sale of 2023 Bonds.............................................. 8 Section 11.07. 2023 Costs of Issuance Fund ......................................................................... 9 Section 11.08. Procedure for Disbursement of 2023 Improvement Account ........................ 10 Section 11.09. Security for 2023 Bonds................................................................................ 10 Section 11.10. Effect of this Article XI................................................................................... 10 SECTION 2. Attachment of Exhibit D....................................................................................................10 SECTION 3. Additional Amendments to Original Fiscal Agent Agreement...........................................10 SECTION 4. Fiscal Agent Disclaimer....................................................................................................13 SECTION 5. Partial Invalidity ................................................................................................................12 SECTION 6. Execution in Counterparts ................................................................................................12 SECTION 7. Governing Law .................................................................................................................13 EXHIBIT A - FORM OF 2023 BONDS
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SUPPLEMENTAL AGREEMENT NO. 2 TO FISCAL AGENT AGREEMENT
THIS SUPPLEMENTAL AGREEMENT NO. 2 TO FISCAL AGENT AGREEMENT (this “Supplemental Agreement No. 2” or “Agreement”), dated as of June 1, 2023, is by and between the CITY OF ROSEVILLE, a charter city 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 Roseville The Ranch at Sierra Vista Community Facilities District No. 1 (Public Facilities) (the “District”), and U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, as successor to The Bank of New York Mellon Trust Company, N.A., as fiscal agent (the “Fiscal Agent”) under a Fiscal Agent Agreement, dated as of September 1, 2020 (the “Original Fiscal Agent Agreement”) by and between the Fiscal Agent and the City.
RECITAL S :
WHEREAS, the City Council of the City has formed the District under the provisions of the Mello-Roos Community Facilities Act of 1982, as amended (constituting Section 53311 et seq. of the California Government Code) (the “Act”) and Resolution No. 19-30 of the City Council adopted on January 16, 2019; and
WHEREAS, the City Council, as the legislative body of the District, is authorized under the Act to levy special taxes to pay for the costs of facilities within the District and to authorize the issuance of bonds secured by said special taxes under the Act; and WHEREAS, the Council, as legislative body of the District, previously authorized the issuance of special tax bonds of the City for the District in the maximum aggregate principal amount of not to exceed $210,000,000 (the “Bond Authorization”); and WHEREAS, the City has previously issued, for and on behalf of the District, its City of Roseville The Ranch at Sierra Vista Community Facilities District No. 1 (Public Facilities) Special Tax Bonds Series 2020 (the “2020 Bonds”) in the initial principal amount of $20,875,000 and its City of Roseville The Ranch at Sierra Vista Community Facilities District No. 1 (Public Facilities) Special Tax Bonds Series 2021 (the “2021 Bonds”) in the initial principal amount of $13,290,000, for the purpose of financing various public improvements authorized to be funded by the District, which 2020 Bonds and 2021 Bonds constituted the first and second series of bonds issued pursuant to the Bond Authorization; and
WHEREAS, Section 5.17 of the Original Fiscal Agent Agreement authorizes the issuance by Supplemental Agreement of Additional Bonds (as such terms are defined in the Original Fiscal Agent Agreement) payable on parity with the 2020 Bonds, and the 2021 Bonds were so issued under Supplemental Agreement No. 1 to Fiscal Agent Agreement, dated December 1, 2021; and
WHEREAS, after due investigation and deliberation, the City has determined that it is in the interests of the City and the District at this time for the City, for and on behalf of the District, to provide for the issuance of its City of Roseville The Ranch at Sierra Vista Community Facilities District No. 1 (Public Facilities) Special Tax Bonds Series 2023 (the “2023 Bonds”), to provide moneys needed to construct and acquire additional facilities necessary for development of property within the District; and
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WHEREAS, this Supplemental Agreement No. 2 is a “Supplemental Agreement” as defined in Section 1.03 of the Original Fiscal Agent Agreement and the 2023 Bonds are “Additional Bonds” as defined in Section 1.03 of the Original Fiscal Agent Agreement and secured under the Original Fiscal Agent Agreement, as amended and supplemented by Supplemental Agreement No. 1 and this Supplemental Agreement No. 2, on parity with the 2020 Bonds and 2021 Bonds;
WHEREAS, the City and the Fiscal Agent desire to enter into this Supplemental Agreement No. 2 pursuant to Sections 5.17 of the Original Fiscal Agent Agreement to provide for the issuance of the 2023 Bonds;
WHEREAS, in providing for the issuance of the 2023 Bonds, it is necessary to supplement and amend the Original Fiscal Agent Agreement, as more particularly provided in Section 1 and Section 2 hereof, as such supplements and amendments are authorized by Sections 5.17 and 8.01 of the Original Fiscal Agent Agreement; and WHEREAS, the City has determined that all acts and proceedings required by law necessary to make the 2023 Bonds, when executed by the City for the District, authenticated and delivered by the Fiscal Agent and duly issued, the valid, binding and legal special obligations of the City for the District, and to constitute the Original Fiscal Agent Agreement, as amended and supplemented by this Supplemental Agreement No. 2, a valid and binding agreement for the uses and purposes herein and therein set forth, in accordance with its terms, have been done or taken and the execution and delivery of this Supplemental Agreement No. 2 have been in all respects duly authorized.
AG REEMENT :
NOW, THEREFORE, in consideration of the premises and the mutual agreements herein contained, and for other consideration the receipt and sufficiency of which are hereby acknowledged, the parties hereto do hereby agree as follows:
SECTION 1. Supplement to Original Fiscal Agent Agreement. In accordance with the provisions of Section 5.17 and 8.01 of the Original Fiscal Agent Agreement, the Original Fiscal Agent Agreement is hereby amended by adding a new article thereto, to be designated as Article XI. Such Article XI shall read in its entity as follows:
ARTICLE XI
2023 BONDS
Section 11.01. Definitions. The Original Fiscal Agent Agreement is amended to add and/or modify the following definitions to Section 1.03. “Article XI” means this Article XI which has been incorporated in and made a part of this Agreement pursuant to Supplemental Agreement No. 2, together with all amendments of and supplements to this Article XI entered into pursuant to the provisions of Section 8.01. “Closing Date” means with respect to each series of Bonds, 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 thereof, for the 2023 Bonds being __________, 2023. -3-
“Continuing Disclosure Certificate” means (i) with respect to the 2020 Bonds, the Continuing Disclosure Certificate, dated as of September 17, 2020, and (ii) with respect to the 2021 Bonds, the Continuing Disclosure Certificate, dated as of December 21, 2023, and (iii) with respect to the 2023 Bonds, the Continuing Disclosure Certificate, dated as of __________, 2023, each by and among the City and Willdan Financial Services in its capacity as Dissemination Agent (as defined therein), as originally executed and as may be amended from time to time in accordance with the terms thereof. “Interest Payment Dates” means (i) with respect to the 2020 Bonds, March 1 and September 1 of each year, commencing March 1, 2020, (ii) with respect to the 2021 Bonds, March 1 and September 1 of each year, commencing March 1, 2023, and (iii) with respect to the 2023 Bonds, March 1 and September 1 of each year, commencing September 1, 2023. “Supplemental Agreement No. 2” means this Supplemental Agreement No. 2 to Fiscal Agent Agreement, dated as of June 1, 2023, between the City, for and on behalf of the District, and the Fiscal Agent.
“2023 Bonds” means the City of Roseville The Ranch at Sierra Vista Community Facilities District No. 1 (Public Facilities) Special Tax Bonds Series 2023, authorized to be issued under Section 11.02.
“2023 Capitalized Interest Account” means the account by that name established in Section 3(D) of this Supplemental Agreement No. 2.
“2023 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 2023 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 2023 Bonds, financial advisor fees, 2023 Bond (underwriter’s) discount or underwriting fee, expenses and charges, including bond counsel, disclosure counsel, charges for execution, transportation and safekeeping of the 2023 Bonds and other costs, charges and fees in connection with the foregoing. “2023 Costs of Issuance Fund” means the fund by that name established and held by the Fiscal Agent pursuant to Section 11.07.
“2023 Improvement Account” means the account by that name established in Section 3(B) of this Supplemental Agreement No. 2.
“2023 Reserve Account of the Reserve Fund” means the account by that name established in Section 11.06(B).
“Term 2023 Bonds” means the 2023 Bonds maturing September 1, _____, September 1, _____ and September 1, _____.
Section 11.02. Authorization of 2023 Bonds. 2023 Bonds in the aggregate principal amount of $____________ are hereby authorized to be issued as Additional Bonds under and subject to the terms of this Agreement, the Act, and other applicable laws of the State of California.
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Section 11.03. 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 or any integral multiple of $5,000 in excess thereof.
(B) Date of 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. The Fiscal Agent shall have no liability for any defect in the CUSIP numbers as they appear on any Bond, notice or elsewhere, and any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Bonds or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Bonds, and any such redemption shall not be affected by any defect in or omission of such numbers. The City will promptly notify the Fiscal Agent in writing of any change in the CUSIP numbers. 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, Interest Rates. The 2023 Bonds shall mature and become payable on September 1 in each of the years, and shall bear interest at the rates per annum (based on a 360-day year composed of 12 30-day months) as follows:
Maturity
(Sept. 1)
Principal
Amount
Interest
Rate
CUSIP
(777870)
(E) Interest and Method of Payment. Interest on the 2023 Bonds shall be payable as provided in Section 2.02(E) of this Agreement, with the Closing Date as used therein being the Closing Date as defined in Section 1.03, and payments shall be made on the 2023 Bonds as provided in Section 2.02(F), with the first Interest Payment Date being March 1, 2023.
Section 11.04. Redemption of 2023 Bonds.
(A) Redemption.
(i) Optional Redemption. The 2023 Bonds may be redeemed prior to maturity at the option of the City from any source of available funds other than prepayment of the Special Tax by property owners, as a whole or in part, on any date on -5-
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 on any Interest Payment Date, in whole or in part among maturities, and by lot within a maturity, and among the 2023 Bonds and any Additional Bonds, as shall be specified by the City, 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, 2029 103% September 1, ______ and March 1, ______ 102
September 1, ______ and March 1, ______ 101
September 1, ______ and any Interest Payment Date
thereafter
100
(iii) Mandatory Sinking Payment Redemption. The Term 2023 Bonds maturing September 1, _______, September 1, _____ and September 1, _____ are subject to mandatory sinking payment redemption in part on September 1, _______, 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 table:
Term 2023 Bonds Maturing September 1, _____
Mandatory
Redemption Date
(Sept. 1)
Sinking Fund
Payment
(maturity)
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Term 2023 Bonds Maturing September 1, _____
Mandatory
Redemption Date
(Sept. 1)
Sinking Fund
Payment
(maturity)
Term 2023 Bonds Maturing September 1, _____
Mandatory
Redemption Date
(Sept. 1)
Sinking Fund
Payment
(maturity)
The amounts in the foregoing tables 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 2023 Bonds as directed by the City in an Officer’s Certificate. In the event of a redemption pursuant to Section 11.04(A)(i) or (ii), the City shall provide the Fiscal Agent with a revised sinking fund schedule giving effect to the redemption so completed. (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, unless waived by the Fiscal Agent.
(C) Purchase of Bonds in Lieu of Redemption. In lieu of redemption under Section
11.04(A), 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 and any premium which would otherwise be due if such 2023 Bonds were to be redeemed in accordance with this Agreement. (D) Redemption Procedure by Fiscal Agent. The Fiscal Agent shall cause notice of any redemption to be mailed by electronic or 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 Municipal Securities Rulemaking Board, and to the respective registered Owners of any 2023 Bonds designated for redemption, at their addresses appearing on the 2023 Bond registration books in the designated 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 2023 Bonds.
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Such notice shall state the redemption date and the redemption price and, if less than all of the then Outstanding 2023 Bonds are to be called for redemption, shall designate the CUSIP numbers and 2023 Bond numbers of the 2023 Bonds to be redeemed by giving the individual CUSIP number and 2023 Bond number of each 2023 Bond to be redeemed or shall state that all 2023 Bonds between two stated 2023 Bond numbers, both inclusive, are to be redeemed or that all of the 2023 Bonds of one or more maturities have been called for redemption, shall state as to any 2023 Bond called in part the principal amount thereof to be redeemed, and shall require that such 2023 Bonds be then surrendered at the designated Principal Office of the Fiscal Agent for redemption at the said redemption price, and shall state that further interest on such 2023 Bonds will not accrue from and after the redemption date.
The City has the right to rescind any notice of the optional redemption of 2023 Bonds under Section 11.04(A)(i) by written notice to the Fiscal Agent on or prior to two Business Days prior to 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 2023 Bonds then called for redemption, and such cancellation 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 2023 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 2023 Bonds being 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 2023 Bonds of any maturity, the Fiscal Agent shall select the 2023 Bonds to be redeemed, from all 2023 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 2023 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 2023 Bond or 2023 Bonds, of the same series and maturity, of authorized denominations in aggregate principal amount equal to the unredeemed portion of the 2023 Bond or 2023 Bonds. (E) 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 2023 Bonds so called for redemption shall have been deposited in the Bond Fund, such 2023 Bonds so called shall cease to be entitled to any benefit under this Agreement other than the right to receive payment of the redemption price, and no interest shall accrue thereon on or after the redemption date specified in such notice.
All 2023 Bonds redeemed and purchased by the Fiscal Agent pursuant to this Section shall be canceled by the Fiscal Agent. The Fiscal Agent shall dispose of the canceled 2023 Bonds in accordance with its then-customary procedures and issue a certificate of disposal thereof to the City upon the written request of the City. -8-
Section 11.05. Form of 2023 Bonds; Authentication and Delivery. (A) Form of 2023 Bonds. The 2023 Bonds, the form of Fiscal Agent’s certificate of authentication, and the form of assignment to appear thereon, shall be substantially in the respective forms set forth in Exhibit D attached hereto and by this reference incorporated herein, with necessary or appropriate variations, omissions and insertions, as permitted or required by this Agreement and the Act.
(B) Execution of 2023 Bonds. The 2023 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 whose signature appears on any 2023 Bond ceases to be such officer before delivery of the 2023 Bonds to the Owner, such signature shall nevertheless be as effective as if the officer had remained in office until the delivery of the 2023 Bonds to the Owner. Any 2023 Bond may be signed and attested on behalf of the City by such persons as at the actual date of the execution of such 2023 Bond shall be the proper officers of the City although at the nominal date of such 2023 Bond any such person shall not have been such officer of the City.
Only such of the 2023 Bonds as shall bear thereon a certificate of authentication in the form set forth in Exhibit D, manually or electronically executed and dated by the Fiscal Agent, shall be valid or obligatory for any purpose or entitled to the benefits of this Agreement, and such certificate of the Fiscal Agent shall be conclusive evidence that such 2023 Bonds have been duly authenticated and delivered hereunder and are entitled to the benefits of this Agreement.
(C) Authentication and Delivery of 2023 Bonds. At any time after the execution of Supplemental Agreement No. 2 and delivery by the City of an Officer’s Certificate that the requirements of Section 5.17 for the issuance of the 2023 Bonds as Additional Bonds have been met, the City may issue the 2023 Bonds for the District in the aggregate principal amount set forth in Section 11.02 and deliver the 2023 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 the 2023 Bonds in accordance with the provisions of the Act and this Agreement, as supplemented by Supplemental Agreement No. 2, to authorize the payment of 2023 Costs of Issuance and costs of the Project by the Fiscal Agent from the proceeds of the 2023 Bonds and to do and cause to be done any and all acts and things necessary or convenient for delivery of the 2023 Bonds to the Original Purchaser. The provisions of Sections 2.06 through 2.13 of the Original Fiscal Agent Agreement shall apply to the 2023 Bonds in a like manner as applied to the 2023 Bonds.
Section 11.06. Application of Proceeds of Sale of 2023 Bonds. (A) The proceeds of the purchase of the 2023 Bonds by the Original Purchaser in the amount of $______________ (which is equal to the par amount of the 2023 Bonds, plus an original issue premium of $_____________ and less the underwriter’s discount of $_____________), shall be paid to the Fiscal Agent, who shall forthwith set aside, pay over and deposit such proceeds on the Closing Date as follows:
(i) Deposit in the 2023 Improvement Account of the Improvement Fund $_____________;
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(ii) Deposit in the 2023 Reserve Account of the Reserve Fund $_____________, which is equal to the Reserve Requirement for the for the 2023 Bonds;
(iii) Deposit in the 2023 Capitalized Interest Account of the Bond Fund $_____________; and
(iv) Deposit in the 2023 Costs of Issuance Fund $_____________. (B) In accordance with Section 4.03(A), the Fiscal Agent shall establish a separate subaccount within the Reserve Fund known as the “2023 Reserve Account,” into which the amounts set forth in Section 11.06(A)(ii) shall be deposited. The 2023 Reserve Account shall be held by the Fiscal Agent within the Reserve Fund, and administered as set forth in this Agreement. Amounts available in the 2023 Reserve Account shall be available to pay interest and principal on the 2023 Bonds in accordance with this Agreement. (c) The Fiscal Agent may, in its discretion, establish a temporary fund or account in its books and records to facilitate transfers required under this Section 11.06.
Section 11.07. 2023 Costs of Issuance Fund. There is hereby established a separate fund to be known as the “2023 Costs of Issuance Fund”, which shall be held by the Fiscal Agent in trust. Amounts in the Costs of Issuance Fund shall be disbursed from time to time to pay 2023 Costs of Issuance, as set forth in an Officer’s Certificate containing respective amounts to be paid to the designated payees, signed by an Authorized Officer and delivered to the Fiscal Agent. The Fiscal Agent shall pay all 2023 Costs of Issuance upon receipt of an invoice from any such payee which requests payment in an amount which is less than or equal to the amount set forth with respect to such payee in such Officer’s Certificate, or upon receipt of an Officer’s Certificate requesting payment of a 2023 Costs of Issuance not listed on the initial Officer’s Certificate delivered to the Fiscal Agent on the Closing Date. Each such Officer’s Certificate shall be sufficient evidence to the Fiscal Agent of the facts stated therein and the Fiscal Agent shall have no duty to confirm the accuracy of such facts. With respect to each such Officer’s Certificate, the City certifies that it has reviewed any wire instructions set forth in such written disbursement direction to confirm such wire instructions are accurate. The Fiscal Agent shall maintain the 2023 Costs of Issuance Fund until 60 days after the Closing Date, and shall transfer any moneys remaining therein on such date, including any investment earnings thereon, to the 2023 Improvement Account. Thereafter, every invoice received by the Fiscal Agent shall be paid from amounts on deposit in the 2023 Improvement Account and the Fiscal Agent shall close the 2023 Costs of Issuance Fund. Moneys in the 2023 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 2023 Costs of Issuance Fund to be used for the purposes of such fund.
Section 11.08. Procedure for Disbursement of 2023 Improvement Account.. (A) Disbursements. Disbursements from the 2023 Improvement Account shall be made by the Fiscal Agent according to the procedure set forth in Section 3.04, and an Officer’s Certificate substantially in the form of Exhibit B to the Original Fiscal Agent Agreement (except that in such Officer’s Certificate, reference shall be made to the 2023 Improvement Account and to the 2023 Bonds).
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(B) Investment. Moneys in the Improvement Fund and the accounts established thereunder shall be invested and deposited in accordance with Section 6.01. Interest earnings and profits from the investment of amounts in the 2023 Improvement Fund shall be retained by the Fiscal Agent in the 2023 Improvement Fund to be used for the purposes of the 2023 Improvement Fund.
(C) Closing of Fund. Upon the filing of an Officer’s Certificate stating that the portion of the Project to be financed from the 2023 Improvement Fund and the accounts established thereunder have been completed and that all costs of such portion of the Project have been paid or are not required to be paid from the 2023 Improvement Fund, the Fiscal Agent shall transfer the amount, if any, remaining in the 2023 Improvement Fund to the Bond Fund for application to the payment of principal of and interest on the 2023 Bonds in accordance with Section 4.02 and the 2023 Improvement Fund shall be closed.
Section 11.09. Security for 2023 Bonds. The 2023 Bonds shall be Additional Bonds which shall be secured in the manner and to the extent set forth in Articles IV and V, and in this Article XI.
Section 11.10. Effect of this Article XI. Except as in this Article XI expressly provided or except to the extent inconsistent with any provision of this Article XI, the 2023 Bonds shall be deemed to be “Bonds” under and within the meaning of Section 1.03, and every term and condition contained in the foregoing provisions of this Agreement shall apply to the 2023 Bonds with full force and effect, with such omissions, variations and modifications thereof as may be appropriate to make the same conform to this Article XI.
SECTION 2. Attachment of Exhibit D. The Original Fiscal Agent Agreement is hereby further amended by incorporating therein an Exhibit D setting forth the form of the 2023 Bonds, which shall read in its entirety as set forth in Exhibit A attached hereto and hereby made a part hereof.
SECTION 3. Additional Amendments to Original Fiscal Agent Agreement. The Original Fiscal Agent Agreement was previously amended and is hereby further amended as follows:
(A) Section 2.03(A)(ii) of the Original Fiscal Agent Agreement was amended in 2021 to replace the last paragraph thereof with the following:
Prepayments will be allocated to the redemption of each series of Bonds as nearly as practicable on a proportionate basis based on the outstanding principal amount of each series.
Such allocations shall be applied to redeem each series as nearly as practicable on a pro rata basis among maturities of each respective series, in increments of $5,000; provided, however, that, for Prepayments of less than $50,000, the City may specify in an Officer’s Certificate that Prepayments be applied to one or more maturities of one or more series so long as there is delivered to the Fiscal Agent a Certificate of the Special Tax Consultant that, following such redemption from Prepayments, the maximum Special Taxes that may be levied in each Fiscal Year is not less than 110% of Maximum Annual Debt Service.
In connection with receipt of a Prepayment, the City may release from the Reserve Account related to each series of Bonds an amount corresponding to the applicable credit to be received based on the principal amount of each series prepaid, as determined by the City, provided that the release shall not cause the amount in each such Reserve Account to be less than the applicable Reserve Requirement.
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(B) Section 2.06 of the Original Fiscal Agent Agreement was amended in 2020 to add an additional paragraph thereto at the beginning of the Section which reads as follows:
“Prior to any transfer of the Bonds outside the book-entry system (including, but not limited to, the initial transfer outside the book-entry system) the transferor shall provide or cause to be provided to the Fiscal Agent all information necessary to allow the Fiscal Agent to comply with any applicable tax reporting obligations, including without limitation any cost basis reporting obligations under Internal Revenue Code Section 6045, as amended. The Fiscal Agent shall conclusively rely on the information provided to it and shall have no responsibility to verify or ensure the accuracy of such information.”
(C) Section 3.04(A) of the Original Fiscal Agent Agreement is hereby amended by adding thereto, as a new third sentence thereof, the following: “There is also hereby created within the Improvement Fund a separate account designated as the “2023 Improvement Account” of the Improvement Fund, which account is hereby established for purposes of accounting for the use and disposition of 2023 Bond proceeds directed to the Improvement Fund pursuant to Section 11.06 and 11.08.
(D) Section 4.02(A) of the Original Fiscal Agent Agreement is hereby amended by adding thereto, as a new last sentence of the first paragraph thereof, the following: “There is also hereby created within the Bond Fund a “2023 Capitalized Interest Account” which account is hereby established for purposes of accounting for the disposition of 2023 Bonds, a portion of the proceeds of which will be deposited to such 2023 Capitalized Interest Account pursuant to Section 11.06. The amount deposited to the 2023 Capitalized Interest Account and any investment earnings thereon shall be used solely to make payments on the 2023 Bonds, and the amount deposited to the 2023 Capitalized Interest Account and any investment earnings thereon shall be applied solely to make payments on the 2023 Bonds as follows:
September 1, 2023: The amount necessary, taking into account any amounts then on deposit in the Bond Fund available for such
purpose, to pay interest on the 2023 Bonds on such
Interest Payment Date.
(E) Subsection (a) of the definition of “Reserve Requirement” is amended to read as follows:
“(a) the Reserve Requirement for each series of Bonds shall not increase after the date of issuance of such series of Bonds;”
(F) Subsection 4.03 of the Original Fiscal Agent Agreement is amended to add the following:
Establishment of 2023 Reserve Account of the Reserve Fund. There is hereby established as a separate account within the Reserve Fund to be held by the Fiscal Agent, the “2023 Reserve Account,” to the credit of which a deposit shall be made as required by Section
11.06(A)(ii) and deposits shall be made as applicable to each series of Bonds as provided in Section 4.03(B). Moneys in the 2023 Reserve Account shall be held in trust by the Fiscal Agent for the benefit of the Owners of the 2023 Bonds for the payment of principal of, and interest on, -12-
all Outstanding 2023 Bonds and shall be subject to a lien in favor of the Owners of the 2023 Bonds on an equal basis.
(G) The second paragraph of Section 8.01 of the Agreement was previously amended by deleting the period at the end of clause (D) thereof and by inserting therein, in lieu thereof, the following: “; and (E) in connection with the issuance of Additional Bonds under Section 5.17 hereof.”
(H) References in the Original Fiscal Agent Agreement to any particular series of Bonds which, if the context requires reference to all series of Bonds in order to maintain the parity relationship of all series of Bonds and the security therefor, shall be deemed to refer to “Bonds” as defined in the Original Fiscal Agent Agreement rather than any particular series. (I) Article V of the Agreement was amended in 2021 by adding thereto, as a new and additional section, designated Section 5.19, the following:
“Section 5.19. No Enforced Sanctions. The City covenants and represents that (i) neither it nor any of its subdivisions affiliates, subsidiaries, directors or officers are the target or subject of any sanctions enforced by the US Government, (including, the Office of Foreign Assets Control of the US Department of the Treasury (“OFAC”)), the United Nations Security Council, the European Union, HM Treasury, or other relevant sanctions authority (collectively “Sanctions”); and (ii) neither it nor any of its subdivisions affiliates, subsidiaries, directors or officers will use any payments made pursuant to this Agreement (i) to fund or facilitate any activities of or business with any person who, at the time of such funding or facilitation, is the subject or target of Sanctions, (ii) to fund or facilitate any activities of or business with any country or territory that is the target or subject of Sanctions, or (iii) in any other manner that will result in a violation of Sanctions by any person.”
SECTION 4. Fiscal Agent Disclaimer. The Fiscal Agent accepts the amendments of the Original Fiscal Agent Agreement effected by this Supplemental Agreement No. 2, on the terms and conditions set forth in the Original Fiscal Agent Agreement, including the terms and provisions defining and limiting the liabilities and responsibilities of the Fiscal Agent. The Fiscal Agent shall not be responsible in any manner whatsoever for or with respect to any of the recitals contained herein or with respect to (i) the validity or sufficiency of this Supplemental Agreement No. 2 or any of the terms or provisions hereof, (ii) the proper authorization hereof by the City by action or otherwise, or (iii) the due execution hereof by the City.
SECTION 5. Partial Invalidity. If any section, paragraph, sentence, clause or phrase of this Supplemental Agreement No. 2 shall for any reason be held illegal, invalid or unenforceable, such holding shall not affect the validity of the remaining portions of this Supplemental Agreement No. 2. The City hereby declares that it would have entered into this Supplemental Agreement No. 2 and each and every other Section, paragraph, sentence, clause or phrase hereof and authorized the issue of the 2023 Bonds pursuant thereto irrespective of the fact that any one or more Sections, paragraphs, sentences. clauses, or phrases of this Supplemental Agreement No. 2 may be held illegal, invalid or unenforceable.
SECTION 6. Execution in Counterparts. This Supplemental Agreement No. 2 may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. The exchange of copies of this Supplemental Agreement No. 2 and of signature pages by facsimile or PDF transmission shall constitute effective execution and delivery of this Supplemental Agreement No. 2 as to the parties hereto -13-
and may be used in lieu of the original Supplemental Agreement No. 2 and signature pages for all purposes.
SECTION 7. Governing Law. This Supplemental Agreement No. 2 shall be construed and governed in accordance with the laws of the State of California applicable to contracts made and performed in such State.
[Signature Page to Supplemental Agreement No. 2 to
Fiscal Agent Agreement dated as of June 1, 2023]
IN WITNESS WHEREOF, the City and the Fiscal Agent have caused this Supplemental Agreement No. 2 to Fiscal Agent Agreement to be executed as of June 1, 2023.
CITY OF ROSEVILLE, a municipal corporation,
for and on behalf of the City of Roseville The
Ranch at Sierra Vista Community Facilities
District No. 1 (Public Facilities)
By:
DOMINICK CASEY
City Manager
U.S. BANK TRUST COMPANY, NATIONAL
ASSOCIATION, as Fiscal Agent
By:
Vice President
ATTEST:
By:
CARMEN AVALOS
City Clerk
APPROVED AS TO FORM:
By:
MICHELLE SHEIDENBERGER
City Attorney
APPROVED AS TO SUBSTANCE:
By:
DENNIS KAUFFMAN
Assistant City Manager/Chief Financial Officer
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EXHIBIT A TO SUPPLEMENTAL AGREEMENT NO. 2 TO FISCAL AGENT AGREEMENT
EXHIBIT D
FORM OF 2023 BONDS
UNITED STATES OF AMERICA
STATE OF CALIFORNIA
No. $
CITY OF ROSEVILLE
THE RANCH AT SIERRA VISTA
COMMUNITY FACILITIES DISTRICT NO. 1 (PUBLIC FACILITIES)
SPECIAL TAX BOND
SERIES 2023
INTEREST RATE MATURITY DATE BOND DATE CUSIP
September 1, ____ ____________, 2023 777870___
REGISTERED OWNER: CEDE & CO.
PRINCIPAL AMOUNT: DOLLARS
The City of Roseville (the “City”) for and on behalf of the City of Roseville The Ranch at Sierra Vista Community Facilities District No. 1 (Public Facilities) (the “District”), for value received, hereby promises to pay solely from the Special Tax (as hereinafter defined) to be collected in the District or amounts in certain funds and accounts held under the Agreement (as hereinafter defined), to the Registered Owner named above, or registered assigns (the “Owner”), on the Maturity Date set forth above, unless redeemed prior thereto as hereinafter provided, the Principal Amount set forth above, and to pay interest on such principal amount from the Bond Date shown above, or from the most recent Interest Payment Date (as hereinafter defined) to which interest has been paid or duly provided for, semiannually on March 1 and September 1, commencing September 1, 2023 (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 2023 Bond is payable to the Owner hereof in lawful money of the United States of America upon presentation and surrender of this 2023 Bond at a designated Principal office of U.S. Bank Trust Company, National Association (the “Fiscal Agent”). Interest on this 2023 Bond shall be paid by check of the Fiscal Agent mailed by first class mail on each Interest Payment Date to the Owner hereof as of the close of business on the 15th day of the month preceding the month in which the Interest Payment Date occurs (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 delivered to the Fiscal Agent by the applicable Record Date of any Owner of $1,000,000 or more in aggregate principal amount of 2023 Bonds.
A-2
This 2023 Bond is one of a duly authorized issue of bonds approved by resolution of the City Council of the City on __________, 2023 (the “Resolution”), pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, Sections 53311, et seq., of the California Government Code (the “Mello-Roos Act”) for the purpose of providing moneys for the construction and acquisition of improvements within the District, and is one of the bonds designated “City of Roseville The Ranch at Sierra Vista Community Facilities District No. 1 (Public Facilities) Special Tax Bonds Series 2023” (the “2023 Bonds”). The issuance of the 2023 Bonds and the terms and conditions thereof are provided for by a Fiscal Agent Agreement, dated as of September 1, 2020, as amended and supplemented, including by Supplemental Agreement No. 1 to Fiscal Agent Agreement dated as of December 1, 2021 and Supplemental Agreement No. 2 to Fiscal Agent Agreement dated as of June 1, 2023 (together, the “Agreement”), by and between the City and the Fiscal Agent and this reference incorporates the Agreement, as supplemented, herein, and by acceptance hereof the Owner of this 2023 Bond assents to said terms and conditions. The Agreement is authorized under, this 2023 Bond is issued under and both are to be construed in accordance with, the laws of the State of California.
Pursuant to the Mello-Roos Act, the Agreement and the Resolution, the principal of and interest on this 2023 Bond are payable, on parity with bonds previously issued by the City for the District in 2020 and 2021, solely from the annual special tax authorized under the MelloRoos Act to be collected within the District (the “Special Tax”) and certain funds held under the Agreement.
Interest on this 2023 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 2023 Bond Date shown above; provided however, that if at the time of authentication of this 2023 Bond, interest is in default hereon, this 2023 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 2023 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 2023 Bonds may be redeemed prior to maturity at the option of the City from any source of available funds other than prepayment of the Special Tax by property owners, as a whole or in part, 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
A-3
The 2023 Bonds shall be subject to mandatory redemption from prepayments of the Special Tax by property owners on any Interest Payment Date, in whole or in part among maturities, and by lot within a maturity, and among the 2023 Bonds and any Additional Bonds, as shall be specified by the City, 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, 2029 103% September 1, ______ and March 1, ______ 102
September 1, ______ and March 1, ______ 101
September 1, ______ and any Interest Payment Date
thereafter
100
The Term 2023 Bonds maturing September 1, _______, September 1, _____ and September 1, _____ are subject to mandatory sinking payment redemption in part on September 1, ______, 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 table:
Term 2023 Bonds Maturing September 1, _____
Mandatory
Redemption Date
(Sept. 1)
Sinking Fund
Payment
(maturity)
Term 2023 Bonds Maturing September 1, _____
Mandatory
Redemption Date
(Sept. 1)
Sinking Fund
Payment
(maturity)
A-4
Term 2023 Bonds Maturing September 1, _____
Mandatory
Redemption Date
(Sept. 1)
Sinking Fund
Payment
(maturity)
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 2023 Bonds as directed by the City in an Officer’s Certificate.
Notice of redemption with respect to the 2023 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 2023 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 2023 Bond shall be entered by the Fiscal Agent in books kept by it for this purpose and authenticated by its manual signature upon the certificate of authentication endorsed hereon.
No transfer or exchange hereof shall be valid for any purpose unless made by the registered owner, by execution of the form of assignment endorsed hereon, and authenticated as herein provided, and the principal hereof, interest hereon and any redemption premium shall be payable only to the registered owner or to such Owner’s order. The Fiscal Agent shall require the Owner requesting transfer or exchange to pay any tax or other governmental charge required to be paid with respect to such transfer or exchange. No transfer or exchange hereof shall be required to be made (i) within 15 days prior to the date established by the Fiscal Agent for selection of 2023 Bonds for redemption or (ii) with respect to a 2023 Bond after such 2023 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 2023 Bonds is not subject to acceleration upon a default under the Agreement or any other document.
This 2023 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 2023 Bond have existed, happened and been performed in due time, form and manner as required by law, and that the amount of this 2023 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 2023 Bond is presented by an authorized representative of The Depository Trust Company to the Fiscal Agent for registration of transfer, exchange or payment, and any 2023 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 A-5
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.
IN WITNESS WHEREOF, the City of Roseville has caused this 2023 Bond to be dated June 1, 2023, to be signed by the manual or facsimile signature of its Mayor and attested by the manual or facsimile signature of its City Clerk.
CITY OF ROSEVILLE
By:
Mayor
Attested:
By:
City Clerk
FORM OF FISCAL AGENT’S CERTIFICATE OF AUTHENTICATION
This is one of the 2023 Bonds described in the Resolution and the Agreement.
Dated: _____________, 2023
U.S. BANK TRUST COMPANY, NATIONAL
ASSOCIATION, as Fiscal Agent
By:
Authorized Signatory
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.
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.
Stradling Yocca Carlson & Rauth
Draft of May 30, 2023
1 4880-9648-2407v2/200356-0568
$__________
CITY OF ROSEVILLE
THE RANCH AT SIERRA VISTA COMMUNITY FACILITIES DISTRICT NO. 1 (PUBLIC FACILITIES)
SPECIAL TAX BONDS
SERIES 2023
BOND PURCHASE AGREEMENT
_____, 2023
City of Roseville
311 Vernon Street,
Roseville, California 95678
Ladies and Gentlemen:
Stifel, Nicolaus & Company, Incorporated (the “Underwriter”), acting not as a fiduciary or agent for you, but on behalf of the Underwriter, offers to enter into this Bond Purchase Agreement (the “Purchase Agreement”) with the City of Roseville, California (the “City”) acting on behalf of The Ranch at Sierra Vista Community Facilities District No. 1 (Public Facilities) (the “District”) which, upon acceptance, will be binding upon the City and upon the Underwriter. This offer is made subject to acceptance of it by the City on the date hereof, and if not accepted will be subject to withdrawal by the Underwriter upon notice delivered to the City at any time prior to the acceptance hereof by the City.
The City acknowledges and agrees that: (i) the purchase and sale of the Bonds (defined below) pursuant to this Purchase Agreement is an arm’s-length commercial transaction between the City and the Underwriter; (ii) in connection therewith and with the discussions, undertakings and procedures leading up to the consummation of such transaction, the Underwriter is and has been acting solely as principal and is not acting as a Municipal Advisor (as defined in Section 15B of the Securities Exchange Act of 1934, as amended); (iii) the Underwriter has not assumed an advisory or fiduciary responsibility in favor of the City with respect to the offering contemplated hereby or the discussions, undertakings and procedures leading thereto (irrespective of whether the Underwriter has provided other services or is currently providing other services to the City on other matters); and (iv) the City has consulted its own legal, financial and other advisors to the extent it has deemed appropriate for this transaction.
1. Purchase, Sale and Delivery of the Bonds.
(a) Subject to the terms and conditions and in reliance upon the representations, warranties and agreements set forth herein, the Underwriter agrees to purchase from the City, and the City agrees to sell to the Underwriter, all (but not less than all) of the City of Roseville The Ranch at Sierra Vista Community Facilities District No. 1 (Public Facilities) Special Tax Bonds, Series 2023 (the “Bonds”) in the aggregate principal amount specified in Exhibit A hereto. The Bonds shall be 2 4880-9648-2407v2/200356-0568
dated the Closing Date (hereinafter defined), and bear interest from said date (payable semiannually on March 1 and September 1 in each year, commencing _____, 2023) at the rates per annum and maturing on the dates and in the amounts set forth in Exhibit A hereto. The purchase price for the Bonds shall be the amount specified as such in Exhibit A hereto. (b) The Bonds shall be substantially in the form described in, shall be issued and secured under the provisions of, and shall be payable and subject to redemption as provided in, the Fiscal Agent Agreement dated as of September 1, 2020, as amended and supplemented by a Supplemental Agreement No. 1 to Fiscal Agent Agreement dated as of December 1, 2021 and a Supplemental Agreement No. 2 to Fiscal Agent Agreement dated as of _____ 1, 2023 (collectively, the “Fiscal Agent Agreement”), each by and between the City and U.S. Bank Trust Company, National Association, as successor fiscal agent (the “Fiscal Agent”), approved by a resolution adopted by the City Council of the City (the “City Council”), acting as the legislative body of the District, on _____, 2023 (the “Resolution of Issuance”). The Bonds and interest thereon will be payable from a special tax (the “Special Tax”) levied and collected on the taxable land within the District in accordance with a Resolution of Intention adopted by the City Council on November 28, 2018, and a Resolution of Formation adopted by the City Council on January 16, 2019 (together with the Resolution of Intention, the “Resolution of Formation”) on a parity with the City of Roseville The Ranch at Sierra Vista Community Facilities District No. 1 (Public Facilities) Special Tax Bonds Series 2020 (the “2020 Bonds”) and the City of Roseville The Ranch at Sierra Vista Community Facilities District No. 1 (Public Facilities) Special Tax Bonds Series 2021 (the “2021 Bonds” and, together with the 2020 Bonds, the “Parity Bonds”). Proceeds of the sale of the Bonds will be used in accordance with the Fiscal Agent Agreement and the Mello-Roos Community Facilities Act of 1982, as amended (Sections 53311 et seq. of the Government Code of the State of California) (the “Law”), to (i) construct and acquire certain public facilities of benefit to the District, (ii) provide for a deposit to a debt service reserve account for the Bonds, (iii) provide capitalized interest for debt service due on the Bonds through _____ 1, 20__, and (iv) pay costs of issuance of the Bonds. The Resolution of Issuance, the Resolution of Formation, and Ordinance No. 6055, adopted by the City Council on February 20, 2019, are collectively referred to herein as the “District Resolutions.” (c) At or prior to the acceptance hereof by the City, the City shall cause to be delivered to the Underwriter a 15c2-12 Certificate of the City, dated as of the date of this Purchase Agreement (the “City Certificate”), in substantially the form attached hereto as Exhibit B, with only such changes therein as shall have been accepted by the Underwriter. (d) Subsequent to its receipt of the City Certificate deeming the Preliminary Official Statement for the Bonds, dated _____, 2023 (which Preliminary Official Statement, together with the cover page and all appendices thereto, is herein collectively referred to as the “Preliminary Official Statement”), final for purposes of Rule 15c2-12 of the Securities and Exchange Commission (“Rule 15c2-12”), the Underwriter has distributed copies of the Preliminary Official Statement. The City hereby ratifies the use by the Underwriter of the Preliminary Official Statement and authorizes the Underwriter to use and distribute the final Official Statement dated the date hereof (including all information previously permitted to have been omitted by Rule 15c2-12, and any supplements and amendments thereto as have been approved by the City as evidenced by the execution and delivery of such document by an officer of the City (the “Official Statement”)), the Fiscal Agent Agreement, the Continuing Disclosure Certificate of the City (the “City Disclosure Certificate”), this Purchase Agreement and any other documents or contracts to which the City or the District is a party related to the Bonds, and all information contained therein, and all other documents, certificates and statements furnished by the City to the Underwriter in connection with the transactions contemplated by this 3 4880-9648-2407v2/200356-0568
Purchase Agreement, in connection with the offer and sale of the Bonds by the Underwriter. The Underwriter hereby agrees to deliver a copy of the Official Statement to the Municipal Securities Rulemaking City Council (the “MSRB”) through the Electronic Municipal Marketplace Access website of the MSRB on or before the Closing Date and otherwise to comply with all applicable statutes and regulations in connection with the offering and sale of the Bonds, including, without limitation, MSRB Rule G-32 and Rule 15c2-12.
(e) At 8:00 A.M., Pacific Daylight Time, on _____, 2023 , or at such earlier time or date as shall be agreed upon by the Underwriter and the City (such time and date being herein referred to as the “Closing Date”), the City will deliver (i) to the Depository Trust Company in New York, New York, the Bonds in definitive form (all Bonds being in book-entry form registered in the name of Cede & Co. and having the CUSIP numbers assigned to them printed thereon), duly executed by the officers of the City, as provided in the Fiscal Agent Agreement, and (ii) to the Underwriter, at the offices of Jones Hall, A Professional Law Corporation, as bond counsel to the City (“Bond Counsel”), or at such other place as shall be mutually agreed upon by the City and the Underwriter, the other documents herein mentioned; and the Underwriter shall accept such delivery and pay the purchase price of the Bonds in immediately available funds (such delivery and payment being herein referred to as the “Closing”). Notwithstanding the foregoing, the Underwriter may, in their discretion, accept delivery of the Bonds in temporary form upon making arrangements with the City which are satisfactory to the Underwriter relating to the delivery of the Bonds in definitive form.
2. Public Offering and Establishment of Issue Price.
(a) The Underwriter agrees to make a bona fide public offering of the Bonds at the initial public offering price or prices set forth on the inside cover page of the Final Official Statement (as defined herein) and in Exhibit A hereto and subject Section 2(c) and 2(d) hereof, the Underwriter reserves the right to change such initial public offering prices as the Underwriter deems necessary or desirable, in its sole discretion, in connection with the marketing of the Bonds, and to sell the Bonds to certain dealers (including dealers depositing the Bonds into investment trusts) and others at prices lower than the initial offering prices set forth in the Final Official Statement. A “bona fide public offering” shall include an offering to institutional investors or registered investment companies, regardless of the number of such investors to which the Bonds are sold. (b) The Underwriter agrees to assist the City in establishing the issue price of the Bonds and shall execute and deliver to the City at Closing (defined below) an “issue price” or similar certificate, together with copies of supporting pricing wires or equivalent communications, substantially in the form attached hereto as Exhibit I, with such modifications as may be appropriate or necessary, in the reasonable judgment of the Underwriter, the City and Bond Counsel to accurately reflect, as applicable, the sales price or prices or the initial offering price or prices to the public of the Bonds. All actions to be taken by the City under this section to establish the issue price of the Bonds may be taken on behalf of the City by the City’s municipal advisor, First Southwest, a Division of Hilltop Securities Inc. (the “Municipal Advisor”) and any notice or report to be provided to the City may be provided to the City’s Municipal Advisor.
(c) Except as otherwise set forth in Exhibit A, the City will treat the first price at which 10% of each maturity of the Bonds (the “10% test”), identified under the column “10% Test Used” in Exhibit A, is sold to the public as the issue price of that maturity. At or promptly after the execution of this Purchase Agreement, the Underwriter shall report to the City the price or prices at which it has sold to the public each maturity of Bonds. If at that time the 10% test has not been satisfied 4 4880-9648-2407v2/200356-0568
as to any maturity of the Bonds, the Underwriter agrees to promptly report to the City the prices at which it sells the unsold Bonds of that maturity to the public. That reporting obligation shall continue, whether or not the Closing Date has occurred, until either (i) the Underwriter has sold all Bonds of that maturity or (ii) the 10% test has been satisfied as to the Bonds of that maturity, provided that, the Underwriter’s reporting obligation after the Closing Date may be at reasonable periodic intervals or otherwise upon request of the City or Bond Counsel. For purposes of this section, if Bonds mature on the same date but have different interest rates, each separate CUSIP number within that maturity will be treated as a separate maturity of the Bonds.
(d) The Underwriter confirms that it has offered the Bonds to the public on or before the date of this Purchase Agreement at the offering price or prices (the “initial offering price”), or at the corresponding yield or yields, set forth in Exhibit A, except as otherwise set forth therein.
Exhibit A also sets forth, identified under the column “Hold the Offering Price Rule Used,” as of the date of this Purchase Agreement, the maturities, if any, of the Bonds for which the 10% test has not been satisfied and for which the City and the Underwriter agree that the restrictions set forth in the next sentence shall apply, which will allow the City to treat the initial offering price to the public of each such maturity as of the sale date as the issue price of that maturity (the “hold-the-offering-price rule”).
So long as the hold-the-offering-price rule remains applicable to any maturity of the Bonds, the Underwriter will neither offer nor sell unsold Bonds of that maturity to any person at a price that is higher than the initial offering price to the public during the period starting on the sale date and ending on the earlier of the following:
(1) the close of the fifth (5th) business day after the sale date; or (2) the date on which the Underwriter has sold at least 10% of that maturity of the Bonds to the public at a price that is no higher than the initial offering price to the public. (e) The Underwriter shall promptly advise the City when it has sold 10% of that maturity of the Bonds to the public at a price that is no higher than the initial offering price to the public, if that occurs prior to the close of the fifth (5th) business day after the sale date. (f) The Underwriter confirms that:
(1) any selling group agreement and any third-party distribution agreement relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain language obligating each dealer who is a member of the selling group and each broker-dealer that is a party to such third-party distribution agreement, as applicable:
(A) (i) to report the prices at which it sells to the public the unsold Bonds of each maturity allocated to it, whether or not the Closing Date has occurred, until either all Bonds of that maturity allocated to it have been sold or it is notified by the Underwriter that the 10% test has been satisfied as to the Bonds of that maturity, provided that, the reporting obligation after the Closing Date may be at reasonable periodic intervals or otherwise upon request of the Underwriter, and (ii) to comply with the hold-the-offering-price rule, if applicable, if and for so long as directed by the Underwriter, 5 4880-9648-2407v2/200356-0568
(B) to promptly notify the Underwriter of any sales of Bonds that, to its knowledge, are made to a purchaser who is a related party to an underwriter participating in the initial sale of the Bonds to the public (each such term being used as defined below), and
(C) to acknowledge that, unless otherwise advised by the dealer or broker-dealer, the Underwriter shall assume that each order submitted by the dealer or broker-dealer is a sale to the public.
(2) any selling group agreement relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain language obligating each dealer that is a party to a third-party distribution agreement to be employed in connection with the initial sale of the Bonds to the public to require each broker-dealer that is a party to such third-party distribution agreement to (A) report the prices at which it sells to the public the unsold Bonds of each maturity allocated to it, whether or not the Closing Date has occurred, until either all Bonds of that maturity allocated to it have been sold or it is notified by the Underwriter or the dealer that the 10% test has been satisfied as to the Bonds of that maturity, provided that, the reporting obligation after the Closing Date may be at reasonable periodic intervals or otherwise upon request of the Underwriter or the dealer, and (B) comply with the hold-theoffering-price rule, if applicable, if and for so long as directed by the Underwriter or the dealer and as set forth in the related pricing wires. (g) The City acknowledges that, in making the representations set forth in this section, the Underwriter will rely on (i) in the event a selling group has been created in connection with the initial sale of the Bonds to the public, the agreement of each dealer who is a member of the selling group to comply with the requirements for establishing issue price of the Bonds, including, but not limited to, its agreement to comply with the hold-the-offering-price rule, if applicable to the Bonds, as set forth in a selling group agreement and the related pricing wires, and (ii) in the event that a thirdparty distribution agreement was employed in connection with the initial sale of the Bonds to the public, the agreement of each broker-dealer that is a party to such agreement to comply with the requirements for establishing issue price of the Bonds, including, but not limited to, its agreement to comply with the hold-the-offering-price rule, if applicable to the Bonds, as set forth in the third-party distribution agreement and the related pricing wires. The City further acknowledges that the Underwriter shall not be liable for the failure of any dealer who is a member of a selling group, or of any broker-dealer that is a party to a third-party distribution agreement, to comply with its corresponding agreement to comply with the requirements for establishing issue price of the Bonds, including, but not limited to, its agreement to comply with the hold-the-offering-price rule, if applicable to the Bonds.
(h) The Underwriter acknowledges that sales of any Bonds to any person that is a related party to an underwriter participating in the initial sale of the Bonds to the public (each such term being used as defined below) shall not constitute sales to the public for purposes of this section.
Further, for purposes of this section:
(1) “public” means any person other than an underwriter or a related party; (2) “underwriter” means (A) any person that agrees pursuant to a written contract with the City (or with the lead underwriter to form an underwriting syndicate) 6 4880-9648-2407v2/200356-0568
to participate in the initial sale of the Bonds to the public and (B) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (A) to participate in the initial sale of the Bonds to the public (including a member of a selling group or a party to a third-party distribution agreement participating in the initial sale of the Bonds to the public);
(3) a purchaser of any of the Bonds is a “related party” to an underwriter if the underwriter and the purchaser are subject, directly or indirectly, to (i) more than 50% common ownership of the voting power or the total value of their stock, if both entities are corporations (including direct ownership by one corporation of another), (ii) more than 50% common ownership of their capital interests or profits interests, if both entities are partnerships (including direct ownership by one partnership of another), or (iii) more than 50% common ownership of the value of the outstanding stock of the corporation or the capital interests or profit interests of the partnership, as applicable, if one entity is a corporation and the other entity is a partnership (including direct ownership of the applicable stock or interests by one entity of the other); and (4) “sale date” means the date of execution of this Purchase Agreement by all parties.
3. Representations, Warranties and Agreements of the City. The City represents, warrants and covenants to and agrees with the Underwriter that:
(a) The City is a municipal corporation and charter city duly organized and existing under the laws of the State of California (the “State”) and has duly authorized the formation of the District pursuant to the Resolution of Formation and the Law, including the annexation of a additional property into the District in August 2021 (the “Annexed Property”) via a unanimous approval consent form executed by Sierra Vista (as defined herein) (the “Unanimous Consent”). The City Council, as the legislative body of the District, has duly adopted the District Resolutions, and has caused to be recorded in the real property records of Placer County a Notice of Special Tax Lien, including as amended to reflect the annexation of the Annexed Property via the Unanimous Consent (the “Notice of Special Tax Lien”) (such District Resolutions and Notice of Special Tax Lien being collectively referred to herein as the “Formation Documents”). Each of the Formation Documents remains in full force and effect as of the date hereof and has not been amended. The District is duly organized and validly existing as a community facilities district under the laws of the State of California. The City has, and at the Closing Date will have, as the case may be, full legal right, power and authority (i) to execute, deliver and perform its obligations under this Purchase Agreement and the City Disclosure Certificate, and to carry out all transactions on its part contemplated by each of such agreements, (ii) to issue, sell and deliver the Bonds to the Underwriter pursuant to the Resolution of Issuance and the Fiscal Agent Agreement as provided herein, and (iii) to carry out, give effect to and consummate the transactions on its part contemplated by the Formation Documents and by the Fiscal Agent Agreement, this Purchase Agreement, and the City Disclosure Certificate (collectively, the “District Documents”) and the Official Statement.
(b) The City has complied, and will at the Closing Date be in compliance, in all material respects, with the Formation Documents and the District Documents, and any immaterial compliance by the City, if any, will not impair the ability of the City to carry out, give effect to or consummate the transactions on its part contemplated by the foregoing. From and after the date of issuance of the Bonds, the City will continue to comply with the covenants of the City contained in the District Documents that are applicable to such time period. 7 4880-9648-2407v2/200356-0568
(c) The City Council has duly and validly: (i) adopted the District Resolutions, (ii) called, held and conducted in accordance with all requirements of the Law elections within the District to approve the levy of the Special Tax within the District and the issuance of the Bonds and recorded the Notice of Special Tax Lien which established a continuing lien on the land within the District securing the payment of the Special Tax, (iii) authorized and approved the execution, delivery and due performance by the City for the District of the Bonds and the District Documents, (iv) authorized the preparation, delivery and distribution of the Preliminary Official Statement and the Official Statement, and (v) authorized and approved the performance by the City of its obligations contained in, and the taking of any and all action as may be necessary to carry out, give effect to and consummate the transactions on its part contemplated by, each of the District Documents (including, without limitation, the collection of the Special Tax), the Bonds and the Official Statement and at the Closing Date, the Formation Documents will be in full force and effect and the District Documents and the Bonds will constitute the valid, legal and binding obligations of the City for the District and (assuming due authorization, execution and delivery by other parties thereto, where necessary) will be enforceable upon the City in accordance with their respective terms, subject to bankruptcy, insolvency, reorganization, moratorium and other laws affecting the enforcement of creditors’ rights in general and to the application of equitable principles if equitable remedies are sought. (d) To the best of the City’s knowledge, neither the District nor the City is in breach of or default under any applicable law or administrative rule or regulation of the State or the United States, or of any department, division, agency or instrumentality thereof, or under any applicable court or administrative decree or order, or under any loan agreement, note, resolution, trust agreement, contract, agreement or other instrument to which the District or the City is a party or is otherwise subject or bound, a consequence of which would be to materially and adversely affect the performance by the District or the City of their obligations under the Bonds, the Formation Documents or the District Documents, and compliance with the provisions of each thereof will not conflict with or constitute a breach of or default under any applicable law or administrative rule or regulation of the State or the United States, or of any department, division, agency or instrumentality thereof, or under any applicable court or administrative decree or order, or a material breach of or default under any loan agreement, note, resolution, trust agreement, contract, agreement or other instrument to which the District or the City, as the case may be, is a party or is otherwise subject or bound. (e) Except for compliance with the blue sky or other states securities law filings, as to which the City makes no representations, all approvals, consents, authorizations, elections and orders of or filings or registrations with any State governmental authority, board, agency or commission having jurisdiction which would constitute a condition precedent to, or the absence of which would materially adversely affect, the performance by the City of its obligations hereunder, or under the Formation Documents or the District Documents, have been obtained and are in full force and effect.
(f) The Special Tax constituting the security for the Bonds has been duly and lawfully authorized and may be levied under the Law, the State Constitution and the applicable laws of the State, and the Special Tax, when levied, will constitute a valid and legally binding continuing lien on the properties on which it has been levied.
(g) The City shall not supplement or amend the Official Statement or cause the Official Statement to be supplemented or amended without the prior written consent of the Underwriter. Until the date which is twenty-five (25) days after the “end of the underwriting period” (as hereinafter defined), if any event shall occur of which the City is aware, as a result of which it may 8 4880-9648-2407v2/200356-0568
be necessary to supplement the Official Statement in order to make the statements in the Official Statement, in light of the circumstances existing at such time, not misleading, the City shall forthwith notify the Underwriter of any such event of which it has knowledge and shall cooperate fully in furnishing any information available to it for any supplement to the Official Statement necessary, in the Underwriter’s opinion, so that the statements therein as so supplemented will not be misleading in light of the circumstances existing at such time and the City shall promptly furnish to the Underwriter a reasonable number of copies of such supplement. As used herein, the term “end of the underwriting period” means the later of such time as (i) the City delivers the Bonds to the Underwriter, or (ii) the Underwriter do not retain, directly or as a member of an underwriting syndicate, an unsold balance of the Bonds for sale to the public. Unless the Underwriter gives notice to the contrary, the “end of the underwriting period” shall be deemed to be the Closing Date. Any notice delivered pursuant to this provision shall be written notice delivered to the City at or prior to the Closing Date, and shall specify a date (other than the Closing Date) to be deemed the “end of the underwriting period.” (h) The Fiscal Agent Agreement creates a valid pledge of the Special Tax Revenues (as defined in the Fiscal Agent Agreement) and the moneys deposited in the Bond Fund and the Reserve Fund established pursuant to the Fiscal Agent Agreement, including the investments thereof, subject in all cases to the provisions of the Fiscal Agent Agreement permitting the application thereof for the purposes and on the terms and conditions set forth therein. Until such time as moneys have been set aside in an amount sufficient to pay all then outstanding Bonds at maturity or to the date of redemption if redeemed prior to maturity, plus unpaid interest thereon to maturity or to the date of redemption if redeemed prior to maturity, and premium, if any, the City will faithfully perform and abide by all of its covenants and undertakings, and the provisions contained in the Fiscal Agent Agreement.
(i) Except as disclosed in the Preliminary Official Statement, no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, regulatory agency, public board or body is pending with respect to which the City has been served with process or, to the best knowledge of the City, threatened (i) which would materially adversely affect the ability of either the City or the District to perform their obligations under the Bonds, the Formation Documents or the District Documents, or (ii) seeking to restrain or to enjoin the issuance, sale or delivery of the Bonds, the application of the proceeds thereof in accordance with the Fiscal Agent Agreement, or the collection or application of the Special Tax pledged or to be pledged to pay the principal of and interest on the Bonds, or the pledge thereof, or in any way contesting or affecting the validity or enforceability of the Bonds, the Formation Documents, the District Documents, or any action contemplated by any of said documents, or (iii) in any way contesting the completeness or accuracy of the Official Statement or the powers or authority of the City or the District with respect to the Bonds, the Formation Documents, the District Documents, or any action of the City or the District contemplated by any of said documents; nor is there any action pending with respect to which the City has been served with process or, to the best knowledge of the City, threatened against the City or the District which alleges that interest on the Bonds is not excludable from gross income for federal income tax purposes or is not exempt from California personal income taxation, or (iv) which would affect or restrain the ability of the owners of property within the District to develop their property as described in the Preliminary Official Statement.
(j) The City will furnish such information, execute such instruments and take such other action in cooperation with the Underwriter as the Underwriter may reasonably request in order for the Underwriter to qualify the Bonds for offer and sale under the “Blue Sky” or other securities laws and regulations of such states and other jurisdictions of the United States as the Underwriter may 9 4880-9648-2407v2/200356-0568
designate; provided, however, the City shall not be required to register as a dealer or a broker of securities or to consent to service of process in connection with any blue sky filing. (k) Any certificate signed by any official of the City authorized to do so and delivered to the Underwriter in connection with the Bonds or this Purchase Agreement shall be deemed a representation and warranty to the Underwriter as to the statements made therein. (l) The City will apply the proceeds of the Bonds in accordance with the Fiscal Agent Agreement as described in the Official Statement. (m) The information contained in the Preliminary Official Statement (other than under the captions “THE BONDS — Description of the Bonds” as they relate to DTC and the BookEntry Only System, “OWNERSHIP OF PROPERTY WITHIN THE DISTRICT” and in Appendix G thereto, as to which no view is expressed) was as of the date thereof, and the information contained in the Official Statement (other than under the captions “THE BONDS — Description of the Bonds” as they relate to DTC and the Book-Entry Only System, “OWNERSHIP OF PROPERTY WITHIN THE DISTRICT” and in Appendix G thereto, as to which no view is expressed) as of its date and on the Closing Date shall be, true and correct in all material respects and such information does not and shall not contain any untrue or misleading statement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.
(n) The Preliminary Official Statement heretofore delivered to the Underwriter has been deemed final by the City as of its date, except for the omission of such information as is permitted to be omitted in accordance with paragraph (b)(1) of Rule 15c2-12. The City hereby covenants and agrees that, within seven (7) business days from the date hereof, the City shall cause a final printed form of the Official Statement to be delivered to the Underwriter in a quantity mutually agreed upon by the Underwriter and the City so that the Underwriter may comply with paragraph (b)(4) of Rule 15c2-12 and Rules G-12, G-15, G-32 and G-36 of the Municipal Securities Rulemaking Board. (o) Except as otherwise disclosed in the Preliminary Official Statement, the City is, and has always been, in material compliance with respect to all reporting obligations in the last five years that it has undertaken under Rule 15c2-12 for all indebtedness issued by the City. (p) Except as otherwise disclosed in the Preliminary Official Statement, the Formation Documents have not been amended, terminated, rescinded or modified. (q) The City shall not voluntarily undertake any course of action inconsistent with satisfaction of the requirements applicable to the City as set forth in this Purchase Agreement. (r) The City shall cooperate with the Underwriter in the qualification of the Bonds for offering and sale and the determination of their eligibility for investment under the laws of such jurisdictions as the Underwriter may designate.
(s) The City shall not knowingly take or omit to take any action that, under existing law, may adversely affect the exemption from state income taxation or the exclusion from gross income for federal income tax purposes of the interest on the Bonds. 10 4880-9648-2407v2/200356-0568
4. Conditions to the Obligations of the Underwriter. The obligations of the Underwriter to accept delivery of and pay for the Bonds on the Closing Date shall be subject, at the option of the Underwriter, to the accuracy in all material respects of the representations and warranties of the City contained herein, as of the date hereof and as of the Closing Date, to the accuracy in all material respects of the statements of the officers and other officials of the City made in any certificates or other documents furnished pursuant to the provisions hereof, to the performance by the City of its obligations to be performed hereunder at or prior to the Closing Date and to the following additional conditions:
(a) At the Closing Date, the Formation Documents and the District Documents shall be in full force and effect, and shall not have been amended, modified or supplemented, except as may have been agreed to in writing by the Underwriter, and there shall have been taken in connection therewith, with the issuance of the Bonds and with the transactions contemplated thereby and by this Purchase Agreement, all such actions as, in the opinion of Bond Counsel, and Stradling Yocca Carlson & Rauth, a Professional Corporation (“Stradling”), counsel to the Underwriter, shall be necessary and appropriate;
(b) The information contained in the Official Statement will, as of the Closing Date and as of the date of any supplement or amendment thereto pursuant to Section 3(g) hereof, be true and correct in all material respects and will not, as of the Closing Date or as of the date of any supplement or amendment thereto pursuant to Section 3(g) hereof, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (c) Between the date hereof and the Closing Date, the market price or marketability of the Bonds at the initial offering prices set forth in the Official Statement shall not have been materially adversely affected, in the judgment of the Underwriter (evidenced by a written notice to the City terminating the obligation of the Underwriter to accept delivery of and pay for the Bonds), by reason of any of the following:
(1) legislation introduced in or enacted (or resolution passed) by the Congress of the United States of America or recommended to the Congress by the President of the United States, the Department of the Treasury, the Internal Revenue Service, or any member of Congress, or favorably reported for passage to either House of Congress by any committee of such House to which such legislation had been referred for consideration or a decision rendered by a court established under Article III of the Constitution of the United States of America or by the Tax Court of the United States of America, or an order, ruling, regulation (final, temporary or proposed), press release or other form of notice issued or made by or on behalf of the Treasury Department or the Internal Revenue Service of the United States of America, with the purpose or effect, directly or indirectly, of imposing federal income taxation upon the interest that would be received by the owners of the Bonds beyond the extent to which such interest is subject to taxation as of the date hereof; (2) legislation introduced in or enacted (or resolution passed) by the Congress of the United States of America, or an order, decree or injunction issued by any court of competent jurisdiction, or an order, ruling, regulation (final, temporary or proposed), press release or other form of notice issued or made by or on behalf of the Securities and Exchange Commission (the “SEC”), or any other governmental agency having jurisdiction of the subject matter, to the effect that obligations of the general 11 4880-9648-2407v2/200356-0568
character of the Bonds, or the Bonds are not exempt from registration under or other requirements of the Securities Act of 1933, as amended, or that the Fiscal Agent Agreement is not exempt from qualification under or other requirements of the Trust Indenture Act of 1939, as amended, or that the issuance, offering or sale of obligations of the general character of the Bonds, or of the Bonds, as contemplated hereby or by the Official Statement or otherwise is or would be in violation of the federal securities laws, rules or regulations as amended and then in effect; (3) any amendment to the federal or California Constitution or action by any federal or California court, legislative body, regulatory body or other authority materially adversely affecting the tax status of the City or the District, their property, income or securities (or interest thereon), the validity or enforceability of the Special Tax as contemplated by the Formation Documents, the District Documents or the Official Statement;
(4) any event occurring, or information becoming known, which, in the judgment of the Underwriter, makes untrue in any material respect any statement or information contained in the Preliminary Official Statement or the Official Statement, or results in the Preliminary Official Statement or the Official Statement containing any untrue statement of a material fact or omitting to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; (5) the declaration of war or the escalation of, or engagement in, military hostilities by the United States or the occurrence of any other national or international emergency or calamity relating to the effective operation of the government of, or the financial community in, the United States which, in the judgment of the Underwriter, makes it impracticable or inadvisable to proceed with the offering or the delivery of the Bonds on the terms and in the manner contemplated in the Preliminary Official Statement or the Official Statement;
(6) the declaration of a general banking moratorium by federal, State of New York or State of California authorities, or the general suspension of trading on any national securities exchange or minimum or maximum prices for trading shall have been fixed and be in force, or maximum ranges for prices for securities shall have been required and be in force on the New York Stock Exchange or other national securities exchange, whether by virtue of determination by that exchange or by order of the SEC or any other governmental authority having jurisdiction that, in the Underwriter’s reasonable judgment, makes it impracticable for the Underwriter to market the Bonds or enforce contracts for the sale of the Bonds;
(7) the imposition by the New York Stock Exchange or other national securities exchange, or any governmental authority, of any material restrictions not now in force with respect to the Bonds or obligations of the general character of the Bonds or securities generally, or the material increase of any such restrictions now in force, including those relating to the extension of credit by, or the charge to the net capital requirements of, the Underwriter;
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(8) the entry of an order by a court of competent jurisdiction which enjoins or restrains the City from issuing permits, licenses or entitlements within the District or which order, in the reasonable opinion of the Underwriter, otherwise materially and adversely affects proposed development of property within the District; (9) a material disruption in securities settlement, payment or clearance services affecting the Bonds shall have occurred;
(10) there shall have been any material adverse change in the affairs of the City that in the Underwriter’s reasonable judgment will materially adversely affect the market for the Bonds or the ability of the Underwriter to enforce contracts for the sale of the Bonds;
(11) there shall be established any new restriction on transactions in securities materially affecting the free market for securities (including the imposition of any limitation on interest rates) or the extension of credit by, or a change to the net capital requirements of, underwriters established by the New York Stock Exchange, the SEC, any other federal or State agency or the Congress of the United States, or by Executive Order;
(12) a stop order, release, regulation, or no-action letter by or on behalf of the SEC or any other governmental agency having jurisdiction of the subject matter shall have been issued or made to the effect that the issuance, offering, or sale of the Bonds, including all the underlying obligations as contemplated hereby or by the Official Statement, or any document relating to the issuance, offering or sale of the Bonds is or would be in violation of any provision of the federal securities laws at the Closing Date, including the Securities Act, the Exchange Act, and the Trust Indenture Act of 1939, as amended; or
(13) filing of or threat of litigation of the type described in Section 2(i) hereof.
(d) On the Closing Date, the Underwriter shall have received counterpart originals or certified copies of the following documents, in each case satisfactory in form and substance to the Underwriter:
(1) The Formation Documents and the District Documents, together with a certificate dated as of the Closing Date of the City Clerk of the City to the effect that each Formation Document is a true, correct and complete copy of the one duly adopted by the City Council;
(2) The Official Statement;
(3) An approving opinion for the Bonds, dated the Closing Date and addressed to the City, of Bond Counsel, in the form attached to the Preliminary Official Statement as Appendix D, and an unqualified letter of such counsel, dated the Closing Date and addressed to the Underwriter, to the effect that such approving opinion addressed to the City may be relied upon by the Underwriter to the same extent as if such opinion was addressed to it;
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(4) A supplemental opinion, dated the Closing Date and addressed to the Underwriter, of Bond Counsel, to the effect that (i) this Purchase Agreement and the City Disclosure Certificate have been duly authorized, executed and delivered by the City, and, assuming such agreements constitute a valid and binding obligation of the other respective parties thereto, constitute the legally valid and binding agreements of the City for the District enforceable in accordance with their respective terms, except as enforcement may be limited by bankruptcy, moratorium, insolvency or other laws affecting creditor’s rights or remedies and may be subject to general principles of equity (regardless of whether such enforceability is considered in equity or at law); (ii) the Bonds are not subject to the registration requirements of the Securities Act of 1933, as amended, and the Fiscal Agent Agreement is exempt from qualification under the Trust Indenture Act of 1939, as amended; and (iii) the information contained in the Official Statement on the cover and under the captions “INTRODUCTION,” “THE BONDS” (other than information relating to DTC and its Book-Entry Only System), “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS,” “TAX
MATTERS” and Appendices D and F thereof is accurate, insofar as such information purports to summarize or replicate certain provisions of the Law, the Bonds and the Fiscal Agent Agreement and the exclusion from gross income for federal income tax purposes and exemption from State of California personal income taxes of interest on the Bonds;
(5) An opinion, dated the Closing Date and addressed to the Underwriter, of Stradling, as counsel for the Underwriter, in form and substance acceptable to the Underwriter;
(6) A certificate or certificates, dated the Closing Date and signed by an authorized officer of the City, ratifying the use and distribution by the Underwriter of the Preliminary Official Statement and the Official Statement in connection with the offering and sale of the Bonds; and certifying that (i) the representations and warranties of the City contained in Section 3 hereof are true and correct in all material respects on and as of the Closing Date with the same effect as if made on the Closing Date; (ii) to the best of his or her knowledge, no event has occurred since the date of the Official Statement affecting the matters contained therein which should be disclosed in the Official Statement for the purposes for which it is to be used in order to make the statements and information contained in the Official Statement not misleading in any material respect, and the Bonds, the Formation Documents and the District Documents conform as to form and tenor to the descriptions thereof contained in the Official Statement; and (iii) the City has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied under the Formation Documents, the District Documents and the Official Statement at or prior to the Closing Date; (7) An opinion, dated the Closing Date and addressed to the Underwriter, of the City Attorney, to the effect that (i) to its current actual knowledge and except as disclosed in the Official Statement, no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, regulatory agency, public board or body is pending with respect to which the City has been served with process or is known to such counsel to be threatened, as to which the City is or would be a party, which would materially adversely affect the ability of the City or the District to perform their obligations under the Bonds, the Formation Documents or the District Documents, or 14 4880-9648-2407v2/200356-0568
which seeks to restrain or enjoin the issuance, sale and delivery of the Bonds or exclusion from gross income for federal income tax purposes or State of California personal income taxes of interest on the Bonds, or the application of the proceeds thereof in accordance with the Fiscal Agent Agreement, or the collection or application of the Special Tax to pay the principal of and interest on the Bonds, or which in any way contests or affects the validity or enforceability of the Bonds, the Formation Documents or the District Documents or the accuracy of the Official Statement, or any action of the City contemplated by any of said documents or the development of property within the District; (ii) the City is duly organized and validly existing as a public entity under the laws of the State of California and the District is duly organized and validly existing as a community facilities district under the laws of the State of California, and the City has full legal right, power and authority to issue the Bonds and to perform all of its obligations under the Formation Documents and the District Documents; (iii) the City has obtained all approvals, consents, authorizations, elections and orders of or filings or registrations with any State governmental authority, board, agency or commission having jurisdiction which constitute a condition precedent to the levy of the Special Tax, the issuance of the Bonds or the performance by the City of its obligations thereunder or under the Fiscal Agent Agreement, except that no opinion need be expressed regarding compliance with blue sky or other securities laws or regulations, whatsoever; (iv) the City Council has duly and validly adopted the Formation Documents at meetings of the City Council which were called and held pursuant to law and with all public notice required by law and at which a quorum was present and acting throughout, and the Formation Documents are now in full force and effect and have not been amended; and (v) the City has duly authorized, executed and delivered the District Documents and the Bonds and has duly authorized the preparation and delivery of the Official Statement;
(8) One or more certificates dated the Closing Date from Economic & Planning Systems, Inc. (the “Special Tax Consultant”) addressed to the City and the Underwriter to the effect that (i) the amount of the Special Taxes that could be levied in each Fiscal Year on all Parcels (as defined in the Rate and Method of Apportionment of Special Tax for the District) of Taxable Property in the District less Administrative Expenses (as defined in the Rate and Method of Apportionment of Special Tax for the District) of 1%, is at least one hundred ten percent (110%) of the total Annual Debt Service for each such Fiscal Year on the Bonds and the Parity Bonds, and (ii) all information supplied by the Special Tax Consultant for use in the Official Statement is true and correct as of the date of the Official Statement and as of the Closing Date; (9) A certificate of the City dated the Closing Date, in a form acceptable to Bond Counsel, to the effect that the Bonds are not arbitrage bonds within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended; (10) A certificate of the Fiscal Agent and an opinion of counsel to the Fiscal Agent dated the Closing Date and addressed to the City and the Underwriter to the effect that the Fiscal Agent has authorized the execution and delivery of the Fiscal Agent Agreement and that the Fiscal Agent Agreement is a valid and binding obligation of the Fiscal Agent enforceable in accordance with its terms; 15 4880-9648-2407v2/200356-0568
(11) A Letter of Representations of Sierra Vista Communities, LLC, a California limited liability company (“Sierra Vista”) dated the date of the Preliminary Official Statement, substantially in the form attached as Exhibit D hereto (the “Sierra Vista Certificate”) or as such certificate may be modified with the approval of the Underwriter and Stradling, and a closing certificate of Sierra Vista dated the Closing Date, to the effect that the representations in the Sierra Vista Certificate are true and correct as of the Closing Date (except that all references to the Preliminary Official Statement in the Sierra Vista Certificate shall be deemed references to the final Official Statement);
(12) A continuing disclosure certificate executed by Sierra Vista in the form attached in Appendix E to the Preliminary Official Statement (the “Sierra Vista Continuing Disclosure Certificate”);
(13) An opinion letter or opinion letters from counsel to Sierra Vista, dated the Closing Date and addressed to the City and the Underwriter substantially in the form attached hereto as Exhibit E;
(14) A Letter of Representations of Lennar Homes of California, LLC., a California limited liability company (“Lennar”) dated the date of the Preliminary Official Statement, substantially in the form attached as Exhibit F hereto (the “Lennar Certificate”) or as such certificate may be modified with the approval of the Underwriter and Stradling, and a closing certificate of Lennar dated the Closing Date, to the effect that the representations in the Lennar Certificate are true and correct as of the Closing Date (except that all references to the Preliminary Official Statement in the Lennar Certificate shall be deemed references to the final Official Statement); (15) An opinion letter or opinion letters from counsel to Lennar, dated the Closing Date and addressed to the City and the Underwriter substantially in the form attached hereto as Exhibit G;
(16) A Certificate of AG EHC II (LEN) CA 2, L.P., a Delaware limited partnership (the “Landbank”) dated the date of the Preliminary Official Statement, substantially in the form attached as Exhibit H hereto (the “Landbank Certificate”) or as such certificate may be modified with the approval of the Underwriter and Stradling, and a closing certificate of Landbank dated the Closing Date, to the effect that the representations in the Landbank Certificate are true and correct as of the Closing Date (except that all references to the Preliminary Official Statement in the Landbank Certificate shall be deemed references to the final Official Statement); (17) G-17 letter from the Underwriter acknowledged by the City; (18) A letter of Jones Hall, A Professional Law Corporation, as disclosure counsel to the City (“Disclosure Counsel”), addressed to the Underwriter and the City, to the effect that nothing has come to such counsel’s attention that would lead them to believe that the Preliminary Official Statement, as of its date, and the Official Statement, as of its date and as of the Closing Date (but excluding therefrom the appendices thereto, financial statements and statistical data, and information regarding The Depository Trust Company and its book-entry system, as to which no opinion need 16 4880-9648-2407v2/200356-0568
be expressed), contained or contains an untrue statement of a material fact or omitted or omits to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (19) A certificate from Integra Realty Resources (the “Appraiser”) consenting to the inclusion of their appraisal report (the “Appraisal”) in the Preliminary Official Statement and the final Official Statement and certifying that (i) the information in the Official Statement relating to the Appraisal does not contain an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading and (ii) since the date of the Appraisal they are not aware of any facts that would materially affect the conclusions of value set forth therein; (20) The certificate required by Section 5.17 of the Fiscal Agent Agreement stating that the requirements of Section 5.17(A) of the Fiscal Agent Agreement for the issuance of the Bonds as Additional Bonds under the Fiscal Agent Agreement have been met.
(21) The Unanimous Consent duly executed by Sierra Vista; (22) Such additional legal opinions, certificates, instruments and other documents as the Underwriter may reasonably request to evidence the truth and accuracy, as of the date hereof and as of the Closing Date, of the statements and information contained in the Preliminary Official Statement and the Official Statement, of the City’s representations and warranties contained herein and the due performance or satisfaction by the City at or prior to the Closing of all agreements then to be performed and all conditions then to be satisfied by the City and the District in connection with the transactions contemplated hereby and by the Official Statement.
If the City shall be unable to satisfy the conditions to the obligations of the Underwriter to purchase, accept delivery of and pay for the Bonds contained in this Purchase Agreement, or if the obligations of the Underwriter to purchase, accept delivery of and pay for the Bonds shall be terminated for any reason permitted by this Purchase Agreement, this Purchase Agreement shall terminate and neither the Underwriter nor the City shall be under any further obligation hereunder, except that the respective obligations of the City and the Underwriter set forth in Section 5, Section 6 and Section 8 hereof shall continue in full force and effect.
5. Conditions of the City’s Obligations. The City’s obligations hereunder are subject to the Underwriter’s performance of its obligations hereunder, and are also subject to the following conditions:
(a) As of the Closing Date, no litigation shall be pending or, to the knowledge of the duly authorized officer of the City executing the certificate referred to in Section 4(d)(6) hereof, threatened, to restrain or enjoin the issuance or sale of the Bonds or in any way affecting any authority for or the validity of the Bonds, the Formation Documents, the District Documents or the existence or powers of the City or the District; and
(b) As of the Closing Date, the City shall receive the approving opinion of Bond Counsel referred to in Section 4(d)(3) hereof, dated as of the Closing Date. 17 4880-9648-2407v2/200356-0568
6. Expenses. Whether or not the Bonds are delivered to the Underwriter as set forth herein:
(a) The Underwriter shall be under no obligation to pay, and the City shall pay or cause to be paid (out of any legally available funds of the District) all expenses incident to the performance of the City’s obligations hereunder, including, but not limited to, the cost of printing, engraving and delivering the Bonds to the Underwriter, the cost of preparation, printing, distribution and delivery of the Fiscal Agent Agreement, the Preliminary Official Statement, the Official Statement and all other agreements and documents contemplated hereby (and drafts of any thereof) in such reasonable quantities as requested by the Underwriter; and the fees and disbursements of the Municipal Advisor, the Special Tax Consultant, the Special Tax Administrator, the Fiscal Agent, Bond Counsel, Disclosure Counsel and Lumesis and any accountants, engineers or any other experts or consultants the City has retained in connection with the Bonds; and (b) The City shall be under no obligation to pay, and the Underwriter shall pay, any fees of the California Debt and Investment Advisory Commission, the cost of preparation of any “blue sky” or legal investment memoranda and this Purchase Agreement; expenses to qualify the Bonds for sale under any “blue sky” or other state securities laws; and all other expenses incurred by the Underwriter in connection with its public offering and distribution of the Bonds (except those specifically enumerated in paragraph (a) of this section), including the fees and disbursements of its counsel and any advertising expenses.
7. Notices. Any notice or other communication to be given to the City under this Purchase Agreement may be given by delivering the same in writing to the City at 311 Vernon Street, Roseville, California 95678, Attention: City Manager; and any notice or other communication to be given to the Underwriter under this Purchase Agreement may be given by delivering the same in writing to Stifel, Nicolaus & Company, Incorporated, One Montgomery Street, 35th Floor, San Francisco, California 94104, Attention: Eileen Gallagher, Managing Director.
8. Parties in Interest. This Purchase Agreement is made solely for the benefit of the City, the District and the Underwriter (including their successors or assigns), and no other person shall acquire or have any right hereunder or by virtue hereof.
9. Survival of Representations and Warranties. The representations and warranties of the City set forth in or made pursuant to this Purchase Agreement shall not be deemed to have been discharged, satisfied or otherwise rendered void by reason of the Closing or termination of this Purchase Agreement and regardless of any investigations made by or on behalf of the Underwriter (or statements as to the results of such investigations) concerning such representations and statements of the City and regardless of delivery of and payment for the Bonds.
10. Effective. This Purchase Agreement shall become effective and binding upon the respective parties hereto upon the execution of the acceptance hereof by the City and shall be valid and enforceable as of the time of such acceptance.
11. No Prior Agreements. This Purchase Agreement supersedes and replaces all prior negotiations, agreements and understandings between the parties hereto in relation to the sale of Bonds for the City.
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12. Governing Law. This Purchase Agreement shall be governed by the laws of the State applicable to contracts made and performed in the State.
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13. Counterparts. This Purchase Agreement may be executed simultaneously in several counterparts, each of which shall be an original and all of which shall constitute one and the same instrument.
Very truly yours,
STIFEL, NICOLAUS & COMPANY,
INCORPORATED, as Underwriter
By:
Managing Director
ACCEPTED:
CITY OF ROSEVILLE, CALIFORNIA, for and on
behalf of the City’s The Ranch at Sierra Vista
Community Facilities District No. 1 (Public
Facilities)
By:
Chief Financial Officer
Time: _____ p.m.
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EXHIBIT A
MATURITY SCHEDULE
CITY OF ROSEVILLE
THE RANCH AT SIERRA VISTA COMMUNITY FACILITIES DISTRICT NO. 1 (PUBLIC FACILITIES)
SPECIAL TAX BONDS
SERIES 2023
Maturity Date
(September 1)
Principal
Amount Interest Rate Yield Price
10% Test
Used
Hold the
Offering
Price Used
C
Priced to the optional call date of September 1, 20__ at ______%.
T Term Bond.
The purchase price of the Bonds shall be $__________, which is the principal amount thereof ($__________) [plus/less] [net] original issue [premium/discount] of $__________ and less Underwriter’s discount of $__________.
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:
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Redemption Dates
Redemption
Price
September 1, 20__ through August 31, 20__ %
September 1, 20__ through August 31, 20__
September 1, 20__ through August 31, 20__
September 1, 20__ and any date thereafter
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 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
_____ 1, 20__ 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 Mandatory Sinking Fund Redemption. The Bonds maturing September 1, 20__, September 1, 20__, September 1, 20__ and September 1, 20__ are subject to mandatory sinking payment redemption in part on September 1, 20__, September 1, 20__, September 1, 20__ and September 1, 20__ respectively, and on each September 1 thereafter to maturity, by lot, at a redemption price equal to 100% of the principal amount thereof to be redeemed, without premium, in the aggregate respective principal amounts as set forth in the following tables:
Term Bonds Maturing September 1, 20__
Sinking Fund
Redemption Date
(September 1)
Sinking Fund
Payments
(maturity) 375,
Term Bonds Maturing September 1, 20__
Sinking Fund
Redemption Date
(September 1)
Sinking Fund
Payments
(maturity)
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Term Bonds Maturing September 1, 20__
Sinking Fund
Redemption Date
(September 1)
Sinking Fund
Payments
(maturity)
Term Bonds Maturing September 1, 20__
Sinking Fund
Redemption Date
(September 1)
Sinking Fund
Payments
(maturity)
The amounts in the foregoing tables will 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 Term Bonds.
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EXHIBIT B
CITY OF ROSEVILLE
THE RANCH AT SIERRA VISTA COMMUNITY FACILITIES DISTRICT NO. 1 (PUBLIC FACILITIES)
SPECIAL TAX BONDS
SERIES 2023
RULE 15c2-12 CERTIFICATE
The undersigned hereby certifies and represents that he is the Chief Financial Officer of the City of Roseville, California (the “City”), and, as such, is duly authorized to execute and deliver this certificate and further hereby certifies that:
(1) this certificate is being delivered in connection with the sale and issuance of the City of Roseville The Ranch at Sierra Vista Community Facilities District No. 1 (Public Facilities) Special Tax Bonds, Series 2023 (the “Bonds”) in order to enable the underwriter of the Bonds to comply with Rule 15c2-12 promulgated under the Securities Exchange Act of 1934, as amended (the “Rule”); (2) in connection with the sale and issuance of the Bonds, there has been prepared a Preliminary Official Statement dated _____, 2023 setting forth information concerning the Bonds and the City of Roseville The Ranch at Sierra Vista Community Facilities District No. 1 (Public Facilities) (the “Preliminary Official Statement”); and
(3) except for the Permitted Omissions, the Preliminary Official Statement is deemed final within the meaning of the Rule. As used herein, the term “Permitted Omissions” refers to the offering price(s), interest rates(s), selling compensation, aggregate principal amount, principal amount per maturity, delivery dates, ratings and other terms of the Bonds depending on such matters, all as set forth in the Rule.
IN WITNESS WHEREOF, I have hereunto set my hand as of _____, 2023.
CITY OF ROSEVILLE, CALIFORNIA
By:
Its: Chief Financial Officer
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EXHIBIT C
FORM OF ISSUE PRICE CERTIFICATE
CITY OF ROSEVILLE
THE RANCH AT SIERRA VISTA COMMUNITY FACILITIES DISTRICT NO. 1 (PUBLIC FACILITIES)
SPECIAL TAX BONDS
SERIES 2023
The undersigned, on behalf of Stifel, Nicolaus & Company, Incorporated (“Stifel”) hereby certifies as set forth below with respect to the sale and issuance of the above-captioned bonds (the “Bonds”).
1. Sale of the General Rule Maturities. As of the date of this certificate, for each Maturity of the General Rule Maturities, the first price at which at least 10% of such Maturity was sold to the Public is the respective price listed in Schedule A.
2. Initial Offering Price of the Hold-the-Offering-Price Maturities. (a) Piper offered the Hold-the-Offering-Price Maturities to the Public for purchase at the respective initial offering prices listed in Schedule A (the “Initial Offering Prices”) on or before the Sale Date. A copy of the pricing wire or equivalent communication for the Bonds is attached to this certificate as Schedule B.
(b) As set forth in the Bond Purchase Agreement, dated _____, 2023, by and between Piper and the Issuer, Piper has agreed in writing that: (i) for each Maturity of the Hold-the-Offering-Price Maturities, it would neither offer nor sell any of the Bonds of such Maturity to any person at a price that is higher than the Initial Offering Price for such Maturity during the Holding Period for such Maturity (the “hold-the-offering-price rule”); and (ii) any selling group agreement shall contain the agreement of each dealer who is a member of the selling group, and any retail distribution agreement shall contain the agreement of each broker-dealer who is a party to the retail distribution agreement, to comply with the hold-the-offering-price rule. Pursuant to such agreement, no Underwriter (as defined below) has offered or sold any Maturity of the Hold-the-Offering-Price Maturities at a price that is higher than the respective Initial Offering Price for that Maturity of the Bonds during the Holding Period.
3. Reserve Fund.
The deposit to the Reserve Fund required to bring the amount on deposit therein to the Reserve Requirement (as such terms are defined in the Fiscal Agent Agreement dated as of September 1, 2020, as supplemented by a Supplemental Agreement No. 1 to Fiscal Agent Agreement dated as of December 1, 2021 and a Supplemental Agreement No. 2 to Fiscal Agent Agreement dated as of _____ 1, 2023, each by and between the City and U.S. Bank Trust Company, National Association, as successor fiscal agent, pursuant to which the Bonds are being issued) was vital to the marketing of the Bonds at the initial offering prices and reasonably required to assure payment of debt service on the Bonds.
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4. Defined Terms.
(a) General Rule Maturities means those Maturities of the Bonds listed in Schedule A hereto as the “General Rule Maturities.”
(b) Hold-the-Offering-Price Maturities means those Maturities of the Bonds listed in Schedule A hereto as the “Hold-the-Offering-Price Maturities.” (c) Holding Period means, with respect to a Hold-the-Offering-Price Maturity, the period starting on the Sale Date and ending on the earlier of (i) the close of the fifth business day after the _____, 2023 (the Sale Date), or (ii) the date on which the Underwriter has sold at least 10% of such Hold-the-Offering-Price Maturity to the Public at prices that are no higher than the Initial Offering Price for such Hold-the-Offering-Price Maturity.
(d) Issuer means the City of Roseville.
(e) Maturity means Bonds with the same credit and payment terms. Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate Maturities.
(f) Public means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a related party to an Underwriter.
The term “related party” for purposes of this certificate generally means any two or more persons who have greater than 50 percent common ownership, directly or indirectly. (g) Sale Date means the first day on which there is a binding contract in writing for the sale of a Maturity of the Bonds. The Sale Date of the Bonds is _____, 2023. (h) Underwriter means: (i) any person that agrees pursuant to a written contract with the Issuer (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public; and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (i) of this paragraph to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the Public).
The representations set forth in this certificate are limited to factual matters only. Nothing in this certificate represents Stifel’s interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The undersigned understands that the foregoing information will be relied upon by the Issuer with respect to certain of the representations set forth in a Certificate as to Arbitrage and Tax Compliance Procedures for the Bonds and with respect to compliance with the federal income tax rules affecting the Bonds, and by Jones Hall, A Professional Law Corporation in connection with rendering its opinion that the interest on the Bonds is excluded from gross income for federal income tax purposes, the preparation of the Internal Revenue Service Form 8038-G, and other federal income tax advice that it may give to the Issuer from time to time relating to the Bonds.
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STIFEL, NICOLAUS & COMPANY,
INCORPORATED
By:
Name:
By:
Name:
Dated: _____, 2023
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SCHEDULE A
SALE PRICES OF THE GENERAL RULE MATURITIES AND INITIAL OFFERING
PRICES OF THE HOLD-THE-OFFERING-PRICE MATURITIES
(Attached)
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SCHEDULE B
PRICING WIRE OR EQUIVALENT COMMUNICATION
(Attached)
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EXHIBIT D
CITY OF ROSEVILLE
THE RANCH AT SIERRA VISTA COMMUNITY FACILITIES DISTRICT NO. 1 (PUBLIC FACILITIES)
SPECIAL TAX BONDS
SERIES 2023
LETTER OF REPRESENTATIONS OF SIERRA VISTA COMMUNITIES, LLC In connection with the issuance and sale of the above-captioned bonds (the “Bonds”), and pursuant to Section 4(d)(11) of the Bond Purchase Agreement (the “Bond Purchase Agreement”) to be executed by and between City of Roseville, California (the “City”), for and on behalf of the City of Roseville The Ranch at Sierra Vista Community Facilities District No. 1 (Public Facilities) (the “District”), and Stifel, Nicolaus & Company, Incorporated (the “Underwriter”), Sierra Vista Communities, LLC, a California limited liability company (“Sierra Vista”), hereby represents, warrants and covenants to the City, the District and the Underwriter as of the date hereof that:
1. Sierra Vista is duly organized and validly existing under the laws of the State of California, is qualified to transact business in the State of California and has all requisite limited liability company right, power and authority to: (i) execute and deliver this Letter of Representations and the Sierra Vista Continuing Disclosure Certificate; and (ii) develop the Property (as defined below) as described in the Preliminary Official Statement.
2. As set forth in the Preliminary Official Statement, certain property within the District is held in the name of Sierra Vista (herein, the “Property”). Except as otherwise described in the Preliminary Official Statement, Sierra Vista is the party responsible for the development of the Property.
3. Sierra Vista has, or will have prior to the Closing, duly authorized the execution and delivery at the Closing of the Sierra Vista Continuing Disclosure Certificate and the performance by Sierra Vista of its obligations thereunder and under the Development Agreement (as defined in the Preliminary Official Statement).
4. Except as disclosed in the Preliminary Official Statement, to the Actual Knowledge of the Undersigned,1 Sierra Vista and its Affiliates2have not violated any applicable law or administrative
1 As used in this Certificate, the phrase “Actual Knowledge of the Undersigned” shall mean the actual (as opposed to constructive) knowledge that the undersigned currently has as of the date of this Certificate or has obtained from (i) interviews with such current officers and responsible employees of Sierra Vista as the undersigned has determined are likely, in the ordinary course of their respective duties, to have knowledge of the matters set forth in this Certificate, and/or (ii) a review of such documents as the undersigned determined were reasonably necessary to obtain knowledge of the matters set forth in this Certificate. The undersigned has not conducted any extraordinary inspection or inquiry other than such inspections or inquiries as are prudent and customary in connection with the ordinary course of Sierra Vista’s current business and operations. The undersigned has not contacted individuals who are no longer employed by Sierra Vista. 2 “Affiliate” means, with respect to a Person (i) any other Person directly, or indirectly through one or more intermediaries, controlling, controlled by or under common control with such Person, and (ii) for whom information, including financial information or operating data, concerning such Person referenced in clause (i) is material to an evaluation of the District and the Bonds (i.e., information relevant to Sierra Vista’s development plans with respect to its Property and the payment of its Special Tax, or such Person’s assets or funds that would materially affect Lennar’s ability to develop its Property as described in the Preliminary Official Statement or to pay its Special Tax (to the extent the responsibility of Sierra Vista) prior to delinquency).
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regulation of the State of California or the United States of America, or any agency or instrumentality of either, which violation could reasonably be expected to materially and adversely affect Sierra Vista’s ability to pay Special Taxes due with respect to the Property.
5. Except as disclosed in the Preliminary Official Statement, to the Actual Knowledge of the Undersigned, (a) Sierra Vista and its Affiliates are not in breach of or in default under any applicable judgment or decree or any loan agreement, option agreement, development agreement, indenture, bond or note (collectively, the “Material Agreements”) to which Sierra Vista or its Affiliates are a party or otherwise subject, which breach or default could reasonably be expected to materially and adversely affect Sierra Vista’s ability to complete the development of the Property as proposed in the Preliminary Official Statement or to pay the Special Taxes due with respect to the Property (to the extent the responsibility of Sierra Vista) prior to delinquency, and (b) no event has occurred and is continuing that with the passage of time or giving of notice, or both, would constitute such a breach or default.
6. Except as described in the Preliminary Official Statement, there is no material indebtedness of Sierra Vista or its Affiliates that is secured by an interest in the Property. To the Actual Knowledge of the Undersigned, neither Sierra Vista nor any of its Affiliates is in default on any obligation to repay borrowed money, which default is reasonably likely to materially and adversely affect Sierra Vista’s ability to complete the development of the Property as proposed in the Preliminary Official Statement or to pay the Special Taxes due with respect to the Property (to the extent the responsibility of Sierra Vista) prior to delinquency.