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
65 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 City 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 a uthority 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 Improvement Area No. 2 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 City 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 City 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 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 2024 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
66 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 2024 Bonds. To the extent that property in Improvement Area No. 2 continues to be owned by a limited number of property owners, the chances are increased that the 2024 Reserve Account of the Reserve Fund established for the 2024 Bonds could be fully depleted during any s uch delay in obtaining payment of delinquent Special Taxes. As a result, sufficient moneys would not be available in the 2024 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 2024 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 2024 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 moneys would not be available in the 2024 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 2024 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 prior ity 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 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
67 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 t he 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 Improvement Area No. 2 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 Improvement Area No. 2.
Property in Improvement Area No. 2 is currently subject to certain overlapping tax and assessment liens, as shown in the overlapping debt statement. Property in Improvement Area No. 2 is also subject to the special tax of two additional community facilities districts formed to fund services and known as the Creekview Community Facilities District No. 2 (Public Services) and the City’s Community Facilities District No. 3 (Municipal Serv ices). The property is not subject to any other special tax or assessment liens (other than the lien of the Special Tax). See “VALUE OF PROPERTY WITHIN IMPROVEMENT AREA NO. 2 – 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 2024 Bonds. The principal of and interest on the 2024 Bonds are payable from the Special Tax authorized to be collected within Improvement Area No. 2, and payment of the Special Tax is secured by a lien on certain real property within Improvement Area No. 2. 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 Improvement Area No. 2. The imposition of
68 additional special taxes, assessments and general property taxes will increase the amount of independent and co-equal 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 Improvement Area No. 2. Although t he 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 Improvement Area No. 2 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. This includes PACE assessments which homeowners can request be placed on their home for financing energy improvements. In addition to liens for special taxes or assessments to finance public improvements of benefit to land within Improvement Area No. 2, owners of property may obtain loans from banks or other private sources which loans may be secured by a lien on the parcels in Improvement Area No. 2 . Such loans would increase amounts owed by the owner of such parcel with respect to development of its property in Improvement Area No. 2. However, the lien of such private 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 Improvement Area No. 2 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 2024 Bonds becoming due on the subsequent respective March 1 and September 1 may be insufficient, except to the extent moneys are available in the 2024 Reserve Account of the Reserve Fund.
In the event of non -payment of Special Taxes, funds in the 2024 Reserve Account of the Reserve Fund, if available, may be used to pay principal of and interest on the 2024 Bonds. If funds in the 2024 Reserve Account of the Reserve Fund for the 2024 Bonds are depleted, the funds can be replenished from the proceeds of the levy and collection of the Special Tax that are in excess of the amount required to pay all amounts to be paid to the 2024 Bond holders pursuant to the Fiscal Agent Agreement. However, no replenishment from the proceeds of a Special Tax levy can occur as long as the proceeds that are collected from the levy of the Special Tax against property within Improvement Area No. 2 at the maximum Special Tax rates, together with other available funds, remains insufficient to pay all such amounts. Thus it is possible that the 2024 Reserve Account of the Reserve Fund will be depleted and not be replenished by the levy of the Special Tax.
69 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 2024 Bonds do not contain a provision allowing for the acceleration of the 2024 Bonds in the event of a payment default or other default under the terms of the 2024 Bonds or the Fiscal Agent Agreement. Under the Fiscal Agent Agreement, a 2024 Bond holder is given the right for the equal benefit and protection of all 2024 Bond holders similarly situated to pursue certain remedies.
So long as the 2024 Bonds are in book-entry form, DTC will be the sole 2024 Bond holder and will be entitled to exercise all rights and remedies of 2024 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 Improvement Area No. 2. 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 City. 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 2024 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 limitati ons on the imposition of new or increased taxes, assessments and property-related fees and charges.
On November 2, 2010, California voters approved Proposition 26, entitled the “Supermajority Vote to Pass New Taxes and Fees Act”. Section 1 of Proposition 26 declares that Proposition 26 is intended to limit the ability of the State Legislature and local government to circumvent existing restrictions on increasing taxes by defining the new or expanded taxes as “fees.” Proposition 26 amended Articles XIIIA and XIIIC of the State Constitution. The amendments 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
70 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 levy of the Special Taxes and the issuance of special tax bonds of the City for Improvement Area No. 2 were each authorized by not less than a two-thirds vote of the landowners within Improvement Area No. 2 who constituted the qualified electors at the time of such voted authorization. The District believes, therefore, that issuance of the 2024 Bonds does not require the conduct of further proceedings under the Mello-Roos 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 Improvement Area No. 2 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).
As to the District (including Improvement Area No. 2), there were no registered voters within the District (including Improvement Area No. 2) 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 held for Improvement Area No. 2.
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:
71 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 Mello- Roos 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. Other wise, 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 Improvement Area No. 2 in compliance with all applicable requirements of the Mello-Roos Act in 2018. 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 Improvement Area No. 2 and because the period for challenging the Special Taxes has passed, the City believes the Special Taxes are valid and cannot be challenged.
Exempt Properties
Certain properties are exempt from the Special Tax in accordance with the Rate and Method and the Act, which provides that properties or entities of the state, federal or local government are exempt from the Special Tax; provided, however, that property within the District acquired by a public entity through a negotiated transaction or by gift or devise, which is not otherwise exempt from the Special Tax, will continue to be subject to the Special Tax.
In addition, although the Act provides that if property subject to the Special Tax is acquired by a public entity through eminent domain proceedings, the obligation to pay the Special Tax with respect to that property is to be treated as if it were a speci al assessment, the constitutionality and operation of these provisions of the Act have not been tested, meaning that such property could become exempt from the Special Tax. The Act further provides that no other properties or entities are exempt from the Special Tax unless the properties or entities are expressly exempted in a resolution of consideration to levy a new special tax or to alter the rate or method of apportionment of an existing special tax.
Pandemic Diseases
In recent years, public health authorities have warned of threats posed by outbreaks of disease and other public health threats. Pandemic diseases arising in the future could have significant adverse health and financial impacts throughout the world, leading to loss of jobs and
72 personal financial hardships, and/or actions by federal, State and local governmental authorities to contain or mitigate the effects of an outbreak.
Taxpayer assistance measures may include deferral of due dates of property taxes, which was an assistance program during the COVID -19 pandemic, and with or without a deferral some taxpayers may be unable to make their property and Special Tax payments. No assurance can be given that the property tax payment dates will not be deferred in the future, which may cause a delay in the receipt of Special Taxes. In addition, home values may be affected by a reduction in demand stemming from personal finances, or general widespread economic circumstances resulting from pandemic diseases.
Cyber Security
The City, like many other public and private entities, relies on computer and other digital networks and systems to conduct its operations. As a recipient and provider of personal, private or other sensitive electronic information, the City is potentially subject to multiple cyber threats, including without limitation hacking, viruses, ransomware, malware and other attacks. 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 administration of the 2024 Bonds. The City is also reliant on other entities and service providers in connection with the administration of the 2024 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 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 Improvement Area No. 2, including the Master Developer, the Merchant Builders and individual homeowners, are permitted to prepay 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 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 Bonds that were purchased at a price greater than par could reduce the otherwise expected yield on such Bonds.
73 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 t he 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 Improvement Area No. 2.
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.
CONTINUING DISCLOSURE
The City
The City has covenanted for the benefit of owners of the 2024 Bonds to provide certain financial information and operating data relating to Improvement Area No. 2 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 Fiscal Year 2023 -24 (due April 1, 2025) and to provide notices of the occurrence of certain enumerated events; provided, the first annual report due April 1, 2025 shall be satisfied by posting the City’s audited financial statements for Fiscal Year 2023-24.
74 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 or 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) For its Annual Report for Fiscal Year 2021 -22, while the City filed unaudited financial statements and then its audited financial statements when available, the unaudited financial statements were not timely filed with respect to certain bond issues.
(3) 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 City believes it has made corrective filings to address the know n instances during the last five years of past delayed or failure to file annual reports, omissions of required information and/or rating changes to be filed under its prior continuing disclosure undertakings.
The Merchant Builders
General. Each of the Merchant Builders has voluntarily covenanted for the benefit of owners of the 2024 Bonds to provide certain information and operating data relating to the property it or its affiliates owns or is under option to acquire in Improvement Area No. 2 by not later than May 1 and November 1 of each year, beginning with the report due May 1, 2025 (the “ Merchant Builder Periodic Reports”) and to provide notices of the occurrence of certain enumerated events. The obligation of the Merchant Builders to provide such information is in effect until such time as a Merchant Builder (and its affiliates ) no longer own or is under option to acquire property in Improvement Area No. 2 collectively responsible for 20% or more of the Special Taxes.
D.R. Horton Continuing Disclosure Compliance. D.R. Horton’s Sacramento Division is the division which will be responsible for complying with its obligations under its Developer Continuing Disclosure Certificate. D.R. Horton has advised the City that, based on a review of prior continuing disclosure obligations in Northern California, encompassing D.R. Horton’s Sacramento and Bay Area Divisions, D.R. Horton has not failed to comply in any material respect with any previous undertaking by it to provide periodic continuing disclosure reports or notice of listed events with respect to community facilities district or assessment district financings in Northern California within the past five years.
Lennar Homes Continuing Disclosure Compliance. Lennar Homes has advised the City that, other than as disclosed in this paragraph, to the actual knowledge of Lennar Homes, Lennar
75 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.
Meritage Prior Continuing Disclosure Compliance. Meritage’s Northern California division will be responsible for compliance with its obligations under its Continuing Disclosure Certificate. Meritage has advised the District that, except as described in the following paragraph, based on a review of prior continuing disclosure obligations in Northern California, Meritage has not failed to comply in any material respect with any previous undertaking by it to provide periodic continuing disclosure reports or notice of listed events with respect to community facilities district or assessment district bond issues in Northern California within the past five years.
However, in connection with a continuing disclosure obligation entered into with respect to the $14,735,000 Improvement Area No. 1 of the City of Dixon Community Facilities District No. 2019- 1 (Homestead) Special Tax Bonds, Series 2020, Meritage was late i n filing its first periodic report due June 15, 2021. The oversight was discovered in August 2021, and Meritage promptly filed a curative report on August 23, 2021 or approximately two months after the due date. Additionally, in connection with the phased acquisition of lots from the master developer of property within the City of Roseville Creekview Community Facilities District No. 1 (Public Facilities) Improvement Area No. 1 (“Roseville CFD No. 1, IA No. 1”), Meritage executed a Continuing Disclosure Certificate (Assumption by Builder), dated August 13, 2021 (the “CDC Assumption”), with respect to the acquisition of Villages C-11 (34 projected units), C-12 (95 projected units), C-14 (20 projected units), and C-15 (20 projected units). The CDC Assumption relates to the issuance of $10,905,000 City of Roseville Creekview Community Facilities District No. 1 (Public Facilities) Improvement Area No. 1 Special Tax Bonds Series 2020, and requires the filing of periodic reports by May 1 and November 1 of each year with respect to the property referenced, commencing November 1, 2021. Meritage was late in filing its first periodic report due November 1, 2021. The oversight was discovered in late April 2022, and Meritage promptly filed a curative report on April 28, 2022 or approximately six months after the due date. Identification of the above- described events does not constitute a representation by Meritage that such events were material.
Woodside Continuing Disclosure Compliance. Woodside’s Northern California Division is the division which will be responsible for complying with its obligations under its Developer Continuing Disclosure Certificate. Woodside has advised the City that, based on a review of prior continuing disclosure obligations in Northern California, Woodside has not failed to comply in any material respect with any previous undertaking by it to provide periodic continuing disclosure reports or notice of listed events with respect to community facilities district or assessment district financings in Northern California within the past five years.
Beazer Homes Continuing Disclosure Compliance. Beazer Homes has advised the City that, based on a review of prior continuing disclosure obligations in Northern California, Beazer Homes has not failed to comply in any material respect with any previous undertaking by it to provide periodic continuing disclosure reports or notice of listed events with respect to community facilities district or assessment district financings in Northern California within the past five years.
76 UNDERWRITING
The 2024 Bonds were purchased through negotiation by Piper Sandler & Co., as underwriter (the “ Underwriter”). The Underwriter agreed to purchase the 2024 Bonds at a price of $_____________ (which is equal to the par amount of the 2024 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 2024 Bonds to certain dealers and others at a price lower than the public offering prices set forth on the cover page hereof.
MUNICIPAL ADVISOR
The City has retained Hilltop Securities Inc., Encino, California, as registered municipal advisor (the “Municipal Advisor”) in connection with the issuance of the 2024 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 2024 Bonds.
LEGAL OPINION
The validity of the 2024 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 2024 Bonds at the time of delivery.
The fees of Bond Counsel are contingent upon the sale and delivery of the 2024 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 2024 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 2024 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 City 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 2024 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, m ay 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 2024 Bonds.
Tax Treatment of Original Issue Discount and Premium. If the initial offering price to the public at which a 2024 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 whi ch a 2024 Bond is sold is greater than the amount payable at maturity thereof, then such difference constitutes “original
77 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 2024 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 2024 Bonds to determine taxable gain upon disposition (including sale, redemption, or payment on maturity) of such 2024 Bond. The Tax Code contains certain provisions relating to the accrual of original issue discount in the case of purchasers of the 2024 Bonds who purchase the 2024 Bonds after the initial offering of a substantial amount of such maturity. Owners of such 2024 Bonds should consult their own tax advisors with respect to the tax consequences of ownership of 2024 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 2024 Bonds under federal individual alternative minimum taxes.
Under the Tax Code, original issue premium is amortized on an annual basis over the term of the 2024 Bond (said term being the shorter of the 2024 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 2024 Bond for purposes of determining taxable gain or loss upon disposition. The amount of original issue premium on a 2024 Bond is amortized each year over the term to maturity of the 2024 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 2024 Bond premium is not deductible for federal income tax purposes. Owners of premium 2024 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 2024 Bonds.
California Tax Status. In the further opinion of Bond Counsel, interest on the 2024 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 2024 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 2024 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 2024 Bonds, or as to the consequences of owning or receiving interest on the 2024 Bonds, as of any future date. Prospective purchasers of the 2024 Bonds should consult their own tax advisors regar ding any pending or proposed federal or state tax legislation, regulations or litigation, as to which Bond Counsel expresses no opinion.
78 Owners of the 2024 Bonds should also be aware that the ownership or disposition of, or the accrual or receipt of interest on, the 2024 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 2024 Bonds , the ownership, sale or disposition of the 2024 Bonds, or the amount, accrual or receipt of interest on the 2024 Bonds.
NO RATINGS
The City has not applied to a rating agency for the assignment of a rating to the 2024 Bonds and does not contemplate applying for a rating.
NO LITIGATION
At the time of delivery of and payment for the 2024 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 2024 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 2024 Bonds, or in any way contesting or affecting the validity or enforceability of the 2024 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 2024 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 of the City, as the legislative body of the District.
CITY OF ROSEVILLE
By:
Dennis Kauffman
Assistant City Manager/
Chief Financial Officer
A-1
APPENDIX A
RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX
B-1
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 2024 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 2020 through 2024, as of January 1
Year
City of
Roseville Placer County State of California
2020 147,104 404,739 39,538,223
2021 148,506 406,443 39,327,868
2022 150,626 407,539 39,114,785
2023 152,726 410,085 39,061,058
2024 154,329 412,844 39,128,162
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, 2021through 2025
Year
Area
Total Effective
Buying Income
(000’s Omitted)
Median
Household
Effective Buying
Income
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
2024 City of Roseville $7,496,807 $95,863
Placer County 20,125,715 93,505
California 1,510,708,521 80,973
United States 11,987,185,826 67,876
2025 City of Roseville $7,682,133 $96,592
Placer County 20,632,478 95,193
California 1,557,429,767 82,725
United States 12,525,577,707 69,687
Source: Claritas, LLC.
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Employment and Industry
The unemployment rate in the Sacramento--Roseville--Arden-Arcade MSA was 4. 7 percent in September 2024, up from a revised 5.2 percent in August 2024, and above the year- ago estimate of 4.4 percent. This compares with an unadjusted unemployment rate of 5.3 percent for California and 3.9 percent for the nation during the same period. The unemployment rate was
4.3 percent in El Dorado County, 4.2 percent in Placer County, 4.9 percent in Sacramento County, and 4.9 percent in Yolo County
The following table summarizes the civilian labor force, employment and unemployment, as well as employment by industry, in t he Sacramento--Arden-Arcade--Roseville MSA for the years 2019 through 2023.
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
2019 2020 2021 2022 2023
Civilian Labor Force (1) 1,099,300 1,093,500 1,105,400 1,112,100 1,129,200 Employment 1,059,200 996,600 1,034,400 1,069,700 1,080,500 Unemployment 40,100 96,900 71,000 42,400 48,600
Unemployment Rate 3.7% 8.9% 6.4% 3.8% 4.3%
Wage and Salary Employment (2)
Agriculture 8,700 8,300 9,000 8,600 9,100
Mining and Logging 500 500 500 500 500
Construction 69,400 70,200 74,900 77,100 74,700
Manufacturing 36,800 36,100 37,700 40,600 40,500
Wholesale Trade 28,600 26,600 26,900 28,300 28,500
Retail Trade 100,500 95,100 100,600 100,300 99,000
Transportation, Warehousing and
Utilities
32,200 34,300 37,500 40,800 41,600
Information 11,900 10,200 10,100 10,500 9,900
Finance and Insurance 35,200 34,800 34,100 33,000 30,500 Real Estate and Rental and Leasing 17,300 16,900 17,700 18,800 18,400 Professional and Business Services 137,200 132,600 137,200 139,700 134,400 Educational and Health Services 166,600 164,000 168,800 175,600 188,700 Leisure and Hospitality 109,600 83,900 93,600 108,700 112,500 Other Services 35,400 31,000 33,300 36,100 38,300
Federal Government 14,200 14,800 14,500 14,400 14,500
State Government 121,900 121,700 127,300 129,800 134,400 Local Government 105,300 98,900 98,400 102,700 107,400
Total, All Industries (3) 1,031,200 979,800 1,021,900 1,065,400 1,083,000
(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.
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Major Employers
The following table lists the major employers within the County, in alphabetical order.
MAJOR EMPLOYERS
Placer County
(In Alphabetical Order)
November 2024
Employer Name Location Industry
Backyard Bar & BBQ Truckee Restaurants
City of Roseville Roseville Alternative Fuels
City of Roseville California Roseville City Government-Executive Offices Costco Wholesale Roseville Wholesale Clubs
Golfland Sunsplash Roseville Roseville Golf Courses-Miniature Keller Williams Northeast Roseville Real Estate
Northstar California Truckee Resorts
Oracle Rocklin Software/Application/Platform Publishing Palisades Tahoe At Alpine Mdws Alpine Meadows Skiing Centers & Resorts 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 Olympic Valley Hotels & Motels
Roseville Toyota Roseville Automobile Dealers-New Cars
Sheriff's Training Auburn Government Offices-County
Sierra Joint Cmnty Clg Dist Rocklin School Districts
Superior Equipment Repair Lincoln Repair Shops & Related Services NEC Sutter Auburn Faith Hospital Auburn Hospitals
Sutter Roseville Med Ctr Fndtn Roseville Hospitals
Tasq Technology Roseville Importers (whls)
Thunder Valley Casino Resort Lincoln Casinos
Union Pacific Railroad Co Roseville Railroads
Walmart Supercenter Rocklin Department Stores
Walmart Supercenter Roseville Department Stores
Source: State of California Employment Development Department, extracted from the America’s Labor Market Information System (ALMIS) Employer Database, 2025 1st Edition. Employer information is provided by Data Axel
C-6
Principal Employers
The following table shows the principal employers in the City, as shown in the City’s Annual Comprehensive Financial Report for fiscal year ending June 30, 2023.
PRINCIPAL EMPLOYERS
City of Roseville
As of June 30, 2023
Employer
Number of
Employees
The Kaiser Permanente Medical Group & Foundation Group 5,760 Sutter Roseville Medical Group 5,080
TopGolf 1,970
City of Roseville 1,620
Adventist Health 1,620
Roseville City School District 1,240
Union Pacific Railroad Company 1,150
Roseville Joint Union High School 1,084
Flexcare LLC 1,000
Penumbra 810
Hewlett-Packard 630
Total – Top Ten 20,814
Total City-Wide Employment 80,543
Source: City of Roseville Annual Comprehensive Financial Report for Fiscal Year 2022-23.
Construction Permits
The following table shows valuations of residential and non- residential building permits issued for calendar years 2019 through 2023.
BUILDING PERMIT VALUATION
City of Roseville
(Valuation in Thousands of Dollars)
2019 2020 2021 2022 2023
Permit Valuation
New Single-family $265,615.3 $322,748.5 $467,676.3 $420,490.6 $384,082.0 New Multi-family 6,855.8 46,469.0 0.0 1,552.1 86,153.7
Res. Alterations/Additions 16,133.8 5,126.3 39,648.3 5,529.1 26,828.8 Total Residential $288,604.9 $374,343.8 $507,324.6 $427,571.8 $497,064.5
New Commercial $24,136.7 $23,230.8 $16,627.7 $40,882.5 $48,155.6 New Industrial 0.0 0.0 0.0 0.0 0.0
New Other 9,358.1 12,610.6 12,351.9 7,312.1 23,079.0
Com. Alterations/Additions 46,155.6 24,553.9 29,192.0 42,938.9 36,498.8 Total Nonresidential $79,650.40 $60,395.3 $58,171.6 $91,133.5 $107,733.40
New Dwelling Units
Single-Family 1,001 1,226 1,860 1,618 1,307
Multiple Family 65 372 0 18 1,547
Total New Dwelling Units 1,066 1,598 1860 1,636 2,854
Source: Construction Industry Research Board, Building Permit Summary.
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The County’s 2024-25 assessment roll totaled $110,562,469,152 as compared to the prior year’s assessment roll of $104,323,515,275, which reflected a 5.98 % 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 2019 through 2023.
BUILDING PERMIT VALUATION
County of Placer
(Valuation in Thousands of Dollars)
2019 2020 2021 2022 2023
Permit Valuation
New Single-family $693,647.7 $827,822.1 $1,323,114.6 $1,193,148.4 $1,128,885.0 New Multi-family 7,896.7 72,442.8 11,183.1 40,312.6 90,008.1 Res. Alterations/Additions 86,964.2 52,440.8 107,613.1 82,331.3 123,244.1 Total Residential $788,508.6 $952,705.7 $1,441,910.8 $1,315,792.3 $1,342,137.2
New Commercial $73,609.7 $58,855.0 $52,238.1 $105,124.2 $82,889.3 New Industrial 268.7 25.0 1,155.5 0.0 1,917.2
New Other 110,951.1 76,576.0 73,032.7 116,224.1 143,354.2 Com. Alterations/Additions 78,159.7 49,149.7 58,371.2 80,371.0 89,283.0 Total Nonresidential $262,989.2 $184,605.7 $184,797.5 $301,719.3 $317,443.70
New Dwelling Units
Single-Family 2,080 2,552 4,176 3,701 2,959
Multiple Family 71 540 66 351 1,588
Total New Dwelling Units 2,151 3,092 4,242 4,052 4,547
Source: Construction Industry Research Board, Building Permit Summary.
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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 the first two quarters of calendar year 2024 in the City were reported to be $2,942,911,583, a 2.70% increase in the total taxable sales of $2,865,607,686 reported during the same comparable quarter of calendar year 2023.
CITY OF ROSEVILLE
Taxable Transactions
Calendar Years 2019 through 2023
(Dollars in Thousands)
Retail Stores Total All Outlets
Number
of Permits
Taxable
Transactions
Number
of Permits
Taxable
Transactions
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 5,960,761
2023 3,600 4,925,006 5,725 5,811,774
Source: State Department of Tax and Fee Administration
The total taxable sales during the first two quarters of calendar year 2024 in the County were reported to be $6,517,056,616, a 4.11 % increase in the total taxable sales of $6,259,996,006 reported during the same comparable quarter of calendar year 2023.
PLACER COUNTY
Taxable Transactions
Calendar Years 2019 through 2023
(Dollars in Thousands)
Retail Stores Total All Outlets
Number
of Permits
Taxable
Transactions
Number
of Permits
Taxable
Transactions
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 13,392,761
2023 7,964 9,603,041 13,787 12,986,078
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 provi des 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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D-1
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 Creekview Community Facilities District No. 1 (Public Facilities) Improvement Area No. 2 Special Tax Bonds Series 2024
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 Creekview Community Facilities District No. 1 (Public Facilities) Improvement Area No. 2 Special Tax Bonds Series 2024 (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 July 1, 2023, as supplemented and amended by Supplemental Agreement No. 1 to Fiscal Agent Agreement dated as of December 1, 2024 (together, the “Fiscal Agent Agreement”), by and between the City, on behalf of the City of Roseville Creekview Community Facilities District No. 1 (Public Facilities), and U.S. Bank Trust Company, National Association, as fiscal agent. We have examined the law and such certified proceedings and other papers as we deem necessary to render this opinion.
As to questions of fact material to our opinion, we have relied upon representations of the 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 the Fiscal Agent Agreement and perform the agreements on its part contained t herein, 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 sentence 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 inc lusion 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 ___________, 2024, is executed and delivered by the CITY OF ROSEVILLE (the “City”) in connection with the execution and delivery of its City of Roseville Creekview Community Facilities District No. 1 (Public Facilities) Improvement Area No. 2 Special Tax Bonds Series 2024 (the “Bonds”). The Bonds are being executed and delivered pursuant to a Fiscal Agent Agreement dated as of July 1, 2023, as supplemented and amended by Supplemental Agreement No. 1 to Fiscal Agent Agreement dated as of _______, 2024 (together, the “Fiscal Agent Agreement”), by and between the City and U.S. Bank Trust Company, National Association, as fiscal agent (the “Fiscal Agent”).
The District covenants and agrees as follows:
Section 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the 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.
“Official Statement” means the final official statement executed by the City in connection with the issuance of the Bonds.
“Participating Underwriter” shall mean the original underwriter of the Bonds.
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“Rule” means Rule 15c2- 12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as it may be amended from time to time.
Section 3. Provision of Annual Reports.
(a) The City shall, or shall cause the Dissemination Agent to, not later than the Annual Report Date, commencing April 1, 2025 , with the report for Fiscal Year 2023-24, 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; provided, the first annual report due April 1, 2025 shall be satisfied by posting the City’s audited financial statements for Fiscal Year 2023-24. 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 a notice to such effect, in an electronic format as prescribed by the MSRB.
(c) With respect to each Annual Report, the Dissemination Agent shall:
(i) determine prior to each Annual Report Date the then- applicable rules and electronic format prescribed by the MSRB for the filing of annual continuing disclosure reports; and
(ii) if the Dissemination Agent is other than the 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 the audited financial statements shall be f iled in the same manner as the Annual Report when they become available.
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(b) The following information, unless otherwise specified, as of September 30 of the preceding year:
(i) Principal amount of all outstanding bonds of Improvement Area No. 2.
(ii) Balance in the Improvement Fund.
(iii) Balance in 2024 Reserve Account of the Reserve Fund, and statement of the Reserve Requirement for the Bonds. Statement of projected draws on the 2024 Reserve Account of 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 Improvement Area No. 2.
(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 and land use classification, to the extent shown in City records as of April 30 of the preceding fiscal year and 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 securi ty, 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 a 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 security holders, if material (for the definition of “financial obligation,” see clause (e)).
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(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 Events described in subsections (a)(8) and (9) above need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to holders of affected 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 qualifi er “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 cou rt 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 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).
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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 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
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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.
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.
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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 Creekview Community
Facilities District No. 1 (Public Facilities)
By:
Name:
Title:
WILLDAN FINANCIAL SERVICES, as
Dissemination Agent
By:
Name:
Title:
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CONTINUING DISCLOSURE CERTIFICATE
([Name of Merchant Builder])
THIS CONTINUING DISCLOSURE CERTIFICATE ([NAME OF MERCHANT BUILDER]) (the “Disclosure Certificate”) dated as of ________, 2024, is executed by ______________ (the “Builder”) in connection with the execution and delivery by the City of Roseville of its City of Roseville Creekview Community Facilities District No. 1 (Public Facilities) Improvement Area No. 2 Special Tax Bonds Series 2024 (the “Bonds”). The Bonds are being executed and delivered pursuant to a Fiscal Agent Agreement dated as of July 1, 2023, as supplemented and amended by Supplemental Agreement No. 1 to Fiscal Agent Agreement dated as of _______, 2024 (together, the “ Fiscal Agent Agreement ”), by and between the City and U.S. Bank Trust Company, National Association, as fiscal agent.
The Builder covenants and agrees as follows:
Section 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the Builder 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 herein, the following capitalized terms shall have the following meanings:
“Affiliate” means any person presently directly (or indirectly through one or more intermediaries) under managerial control of the Builder, and about whom information could be material to potential investors in their investment decision regarding the Bonds (including without limitation information relevant to the proposed development of the Property or to the Builder's ability to pay the Special Taxes levied on the Property prior to delinquency).
“Assumption Agreement” means an undertaking of a Major Owner 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 property owned by such Major Owner in Improvement Area No. 2), whereby such Major Owner 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 Improvement Area No. 2 owned by such Major Owner, at the option of the Builder or such Major Owner, agrees to indemnify the Dissemination Agent (if any) pursuant to a provision substantially in the form of Section 11 hereof.
“Dissemination Agent ” means the Builder, or any successor Dissemination Agent designated in writing by the Builder, and which has filed with the Builder, the City and the Participating Underwriter a written acceptance of such designation, and which is experienced in providing dissemination agent services such as those required under this Disclosure Certificate.
“District” means the City of Roseville Creekview Community Facilities District No. 1 (Public Facilities).
“Hearthstone Land Bank” means [FOR D.R. HORTON: Winding Creek C-21 – Roseville L.P.] [FOR LENNAR: Angelo Gordon & Co. ]; [FOR MERITAGE/ WOODSIDE: NOT APPLICABLE].
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“Improvement Area No. 2” means the improvement area designated as such within the District.
“Listed Events ” means any of the events listed in Section 5(a) of this Disclosure Certificate.
“Major Owner ” means, as of any date of determination, a Person that owns land in Improvement Area No. 2 that is collectively responsible for 20% or more of the Special Taxes in Improvement Area No. 2.
“MSRB” means the Municipal Securities Rulemaking Board, which has been designated by the Securities and Exchange Commission as the sole repository of disclosure information, or any other repository of disclosure information that may be designated by the Securit ies and Exchange Commission as such in the future.
“Official Statement” means the final Official Statement executed by the City in connection with the issuance of the Bonds.
“Option Agreement ” means that [FOR D.R. HORTON: Option and Development Agreement dated April 20, 2023 , between the Hearthstone Land Bank and the Builder] [FOR LENNAR: Angelo Gordon & Co.]; [FOR MERITAGE/LENNAR/WOODSIDE: NOT APPLICABLE].
“Participating Underwriter” means Piper Sandler & Co., the original Underwriter of the Bonds.
“Periodic Report” means any Periodic Report provided by the Builder 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, as of the date of determination, the real property within the boundaries of Improvement Area No. 2 that is owned by (i) the Builder, (ii) any Affiliate of the Builder, (iii) [FOR D.R. HORTON ONLY: Hearthstone Land Bank (during the term of the Option Agreement),] and (iv) the property in Improvement Area No. 2 that the Builder sold to a Major Owner who has not assumed the undertakings of this Disclosure Certificate under Section 6(b) and that is owned by such Major Owner.
“Report Date” means May 1 and November 1 of each year.
“Special Taxes” means the special taxes levied on the Property for Improvement Area No. 2.
Section 3. Provision of Periodic Reports.
(a) So long as Builder’s obligations under this Disclosure Certificate have not been terminated pursuant to Section 6 below, the Builder shall, or, upon written direction of the Builder the Dissemination Agent shall, not later than the Report Date, commenc ing May 1, 2025, file or cause to be filed with the MSRB a Periodic Report which is consistent with the requirements of
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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 Builder shall provide the Periodic Report to the Dissemination Agent (if different from the B uilder). The Builder shall provide a written certification with (or included as a part of) each Periodic Report furnished to the Dissemination Agent (if different from the Builder), 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 (if different than the Builder), the Participating Underwriter and the City may conclusively rely upon such certification of the Builder 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 (if different than the Builder) 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 Builder that the Periodic Report has not been provided as required under Section 3(a) above. The reminder notice shall instruct the Builder 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 Builder 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 send a notice to the MSRB to such effect, in substantially the form prescribed by the MSRB, with a copy to the City and the Participating Underwriter.
(c) The Dissemination Agent shall:
(i) determine prior to each Report Date the then- applicable rules and electronic format prescribed by the MSRB for the filing of continuing disclosure reports; and
(ii) to the extent the Periodic Report has been furnished to it, file a report with the Builder (if the Dissemination Agent is other than the Builder), the City and the Participating Underwriter certifying that the Periodic Report has been provided pursuant to this Disclosure Certificate, and stating the date it was provided.
Section 4. Content of Periodic Reports. Each Periodic Report shall contain or incorporate by reference the information set forth in Exhibit A relating to the Builder, any or all of which may be included by specific reference to other documents, including official statements of debt issues of the Builder 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. If the document included by reference is a final official statement, it must be available from the MSRB. The Builder 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 A, each Periodic Report shall include 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.
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Section 5. Reporting of Significant Events.
(a) So long as Builder’s obligations under this Disclosure Certificate have not been terminated pursuant to Section 6 below, the Builder shall give, or cause to be 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 Builder and, if known, any bankruptcy or insolvency proceedings commenced by or against any Affiliate of the Builder, that is reasonably likely to have a significant impact on the Builder’s 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 on or prior to the delinquency date to the extent such failure is not promptly cured by the Builder upon discovery thereof;
(iii) filing of a lawsuit of which the Builder is aware against the Builder or an Affiliate seeking damages, which, if successful, could have a material and adverse impact on the Builder’s ability to pay Special Taxes prior to delinquency or to sell or dev elop 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 Builder on any loan with respect to the construction of improvements on the Property that continues to exist beyond any applicable notice and cure periods on any loan with respect to the construction of improvements on the Property.
(b) Whenever the Builder obtains knowledge of the occurrence of a Listed Event, the Builder shall as soon as possible determine if such event would be material under applicable Federal securities law.
(c) If the Builder determines that knowledge of the occurrence of a Listed Event would be material under applicable Federal securities law, the Builder 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 Builder’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;
(ii) at such time as the Property in Improvement Area No. 2 is collectively responsible for less than 20% of the Special Taxes; or
(iii) the date on which all of the Special Taxes attributable to the Property are prepaid in full.
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The Builder 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 is conveyed to a Person that, upon such conveyance, will be a Major Owner, the obligations of the Builder hereunder with respect to the Property conveyed to the Major Owner may be assumed by such Major Owner, and the Builder’s obligations hereunder with respect to the Property conveyed will be terminated. In order to effect such assumption, such Major Owner shall enter into an Assumption Agreement in form and substance equivalent to this Disclosure Certificate or as otherwise satisfactory to the City and the Participating Underwriter. However, a Major Owner shall not be required to enter into an Assumption Agreement if such Major Owner is already a party to a continuing disclosure certificate in form and substance similar to this Disclosure Certificate with respect to the Bonds, and under which the Property conveyed to such Major Owner will become subject to future Periodic Reports. If a Major Owner required by this Section 6(b) to enter into an Assumption Agreement does not enter into an Assumption Agreement, then the Builder shall continue reporting on the Property conveyed to the Major Owner so long as it is owned by such Major Owner or until an Assumption Agreement is executed or until the Builder’s obligations may be terminated in accordance with Section 6(a).
Section 7. Dissemination Agent. The Builder may, from time to time, appoint or engage a Dissemination Agent to assist the Builder 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 Builder and the Participating Underwriter.
Section 8. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Certificate, the Builder 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 sta tus of the Builder 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 Builder 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 Builder 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 Builder 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.
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Section 10. Default. In the event of a failure of the Builder to comply with any provision of this Disclosure Certificate, the City, the Participating Underwriter, and any holder or beneficial owner of the Bonds may take such actions as may be necessary and appropriate, incl uding seeking mandate or specific performance by court order, to cause the Builder 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 and exclusive remedy under this Disclosure Certificate in the event of any failure of the Builder 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 Builder 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 (i) losses, liabilities, costs and expenses due to an Indemnified Party’s negligence or willful misconduct or failure to perform its duties hereunder and (ii) losses, expenses and liabilities due to the failure of the City to pay the fees and expenses of the Dissemination Agent. The Dissemination Agent (if other than the Builder) shall be paid compensation for its services provided hereunder from S pecial Taxes levied for administration of the CFD in accordance with the Dissemination Agent’s 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. The Dissemination Agent shall have no duty or obligation to review any information provided to it hereunder and shall not be deemed to be acting in any fiduc iary capacity for the City, the Builder, the Bond owners, or any other party. The obligations of the Builder under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds, but shall be assumed by a Major Owner from and after the date of such assumption when property is sold to a Major Owner and such Major Owner enters into an Assumption Agreement.
Section 12. Notices. Any notice or communications to be among any of the parties to this Disclosure Certificate may be given by electronic, regular, or overnight mail as follows:
To the Builder: ______________
______________
Attn: ______________
______________
______________
Email: ______________
To the City: City of Roseville
Attn: CFD Administrator
311 Vernon Street
Roseville, CA 95678
To the Participating
Underwriter: Piper Sandler & Co.
Attn: Managing Director
2321 Rosecrans Avenue, Suite 3200
El Segundo, CA 90245
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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.
Section 13. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the City, the Builder (its successors and assigns), the Dissemination Agent, the Participating Underwriter and holders and beneficial owners from time to time of the Bonds, and shall creat e no rights in any other person or entity. All obligations of the Builder hereunder shall be assumed by any legal successor to the obligations of the Builder as a result of a sale, merger, consolidation or other reorganization.
IN WITNESS WHEREOF, the Builder has executed this Disclosure Certificate as of the date first above written.
___________________________,
a _________________
By:
Name:
Title:
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EXHIBIT A
PERIODIC REPORT
[MAY 1, ____ / NOVEMBER 1, _____]
$____________
CITY OF ROSEVILLE
CREEKVIEW COMMUNITY FACILITIES DISTRICT NO. 1 (PUBLIC FACILITIES) IMPROVEMENT AREA NO. 2
SPECIAL TAX BONDS
SERIES 2024
This Periodic Report is hereby submitted under Section 4 of the Continuing Disclosure Certificate ([Name of Merchant Builder]) (the “ Disclosure Certificate”) dated _______, 2024, executed by the undersigned (the “ Builder”) in connection with the issuance of the above - captioned bonds by the City of Roseville (the “City”) with respect to its City of Roseville Creekview 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 due date of this Periodic Report).
A. Description of the Property in Improvement Area No. 2, in substance and form similar to such information in the Official Statement for the Bonds under the heading “MERCHANT BUILDER INFORMATION – [Lennar Homes] [Woodside] [Meritage] [D.R. Horton]”:
______________________________________________________________________
______________________________________________________________________
B. Updated information regarding land development and home construction activities with respect to the Property described in the Official Statement for the Bonds under the heading “MERCHANT BUILDER INFORMATION – [Lennar Homes] [Woodside] [Meritage] [D.R. Horton]” or the Periodic Report last filed in accordance with the Disclosure Certificate, [FOR D.R. HORTON and LENNAR : including the number of parcels acquired by the Builder from the Land Bank pursuant to the Option Agreement]:
______________________________________________________________________
______________________________________________________________________
C. Status of building permits and any material changes to the description of land use or development entitlements for the Property described in the Official Statement for the Bonds under the heading “MERCHANT BUILDER INFORMATION – [Lennar Homes] [Woodside] [Meritage] [D.R. Horton]” or the Periodic Report last filed in accordance with the Disclosure Certificate:
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______________________________________________________________________
______________________________________________________________________
D. Status of any land purchase contracts with regard to the Property, including sales of land in Improvement Area No. 2 to other property owners (other than individual homeowners).
______________________________________________________________________
______________________________________________________________________
II. Legal and Financial Status of Builder
Unless such information has previously been included or incorporated by reference in a Periodic Report, describe any material change in the legal structure of the Builder or the financial condition and financing plan of the Builder that would materially and adversely interfere with its ability to complete the development plan with respect to the Property described in the Official Statement.
To the extent that the ownership of the Builder has changed, describe all material terms of the new ownership structure.
______________________________________________________________________
______________________________________________________________________
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 for the Property described in the Official Statement or in a previous Periodic Report. ______________________________________________________________________
______________________________________________________________________
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 Builder or the Property contained in the Official Statement under the heading “MERCHANT BUILDER INFORMATION – [Lennar Homes] [Woodside] [Meritage] [D.R. Horton]” that would materially and adversely interfere with the Builder’s ability to develop and sell the Property as described in the Official Statement.
______________________________________________________________________
______________________________________________________________________
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V. Other Material Information
In addition to any of the information expressly required above, provide such further information, if any, with respect to the Property and the Builder as may be necessary to make the specifically required statements, in the light of the circumstances under which they are made, not misleading.
_____________________________________________________________________
______________________________________________________________________
Certification
On behalf of the Builder, the undersigned officer or authorized representative, based on actual knowledge after reasonable inquiry of employees of Builder and its affiliates, hereby certifies that this Periodic Report constitutes the Periodic Report requir ed to be furnished by the Builder under the Disclosure Certificate.
ANY OTHER STATEMENTS REGARDING THE BUILDER, THE DEVELOPMENT OF THE PROPERTY, THE BUILDER’S FINANCING PLAN OR FINANCIAL CONDITION, OR THE
BONDS, OTHER THAN STATEMENTS MADE BY THE BUILDER IN AN OFFICIAL RELEASE,
OR FILED WITH THE MUNICIPAL SECURITIES RULEMAK ING BOARD, ARE NOT AUTHORIZED BY THE BUILDER. THE BUILDER IS NOT RESPONSIBLE FOR THE
ACCURACY, COMPLETENESS OR FAIRNESS OF ANY SUCH UNAUTHORIZED STATEMENTS.
THE BUILDER HAS NO OBLIGATION TO UPDATE THIS PERIODIC REPORT OTHER THAN AS EXPRESSLY PROVIDED IN THE DISCLOSURE CERTIFICATE.
Dated:
__________________
By: _____________________________
_____________________________
_____________________________
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APPENDIX F
SUMMARY OF CERTAIN PROVISIONS OF FISCAL AGENT AGREEMENT
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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 2024 Bonds , payment of principal, interest and other payments on the 2024 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 pr ovided 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, 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, DTC Direct Participants or DTC Indirect Participants wi ll 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 Par ticipants 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
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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 s uch 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
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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.
Jones Hall Draft 10.28.24
SUPPLEMENTAL AGREEMENT NO. 1 TO
FISCAL AGENT AGREEMENT
by and between
CITY OF ROSEVILLE
and
U.S. BANK TRUST COMPANY, National Association,
as Fiscal Agent
Dated as of ________ 1, 2024
Relating to:
$___________
City of Roseville
Creekview Community Facilities District No. 1 (Public Facilities) Improvement Area No. 2
Special Tax Bonds
Series 2024
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TABLE OF CONTENTS
SECTION 1. Supplement to Original Fiscal Agent Agreement ................................................................ 2
ARTICLE X
2024 BONDS
Section 10.01. Definitions ........................................................................................................ 2 Section 10.02. Authorization of 2024 Bonds ........................................................................... 3 Section 10.03. Terms of 2024 Bonds ...................................................................................... 4 Section 10.04. Redemption of 2024 Bonds ............................................................................. 4 Section 10.05. Form of 2024 Bonds; Authentication and Delivery .......................................... 8 Section 10.06. Application of Proceeds of Sale of 2024 Bonds .............................................. 8 Section 10.07. 2024 Costs of Issuance Fund .......................................................................... 9 Section 10.08. Procedure for Disbursement of 2024 Improvement Account ........................ 10 Section 10.09. Security for 2024 Bonds ................................................................................ 10 Section 10.10. Effect of this Article X .................................................................................... 10
SECTION 2. Attachment of Exhibit C .................................................................................................... 10 SECTION 3. Additional Amendments to Original Fiscal Agent Agreement ........................................... 10 SECTION 4. Partial Invalidity ................................................................................................................. 12 SECTION 5. Execution in Counterparts ................................................................................................. 12 SECTION 6. Governing Law .................................................................................................................. 12
EXHIBIT A - FORM OF 2024 BONDS
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SUPPLEMENTAL AGREEMENT NO. 1 TO FISCAL AGENT AGREEMENT
THIS SUPPLEMENTAL AGREEMENT NO. 1 TO FISCAL AGENT AGREEMENT (this “Supplemental Agreement No. 1 ” or “Agreement”), dated as of ________ 1, 2024 , 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 Creekview Community Facilities District No. 1 (Public Facilities) (the “District”), and U.S. BANK TRUST COMPANY, N ATIONAL ASSOCIATION, as fiscal agent (the “Fiscal Agent”) under a Fiscal Agent Agreement, dated as of July 1, 2023 (the “Original Fiscal Agent Agreement ”) by and between the Fiscal Agent and the City.
R E C I T A L S:
WHEREAS, this City Council (the “Council”) of the City of Rose ville (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 the Creekview Community Facilities District No. 1 (Public Facilities) (the “District”) and establish the Creekview Community Facilities District No. 1 (Public Facilities) (Future Annexation Area) (the “Future Annexation Area”); to issue bonds secured b y said special taxes for the purpose of providing moneys for the construction and acquisition of authorized improvements for the District; and
WHEREAS, this Council has also authorized land to be annexed to the District from the Future Annexation Area by unanimous consent of the owner(s) of land proposed to be annexed, and pursuant to a Unanimous Consent, Waiver and Vote of Sole Landowner, dated July 6, 2022 land designated as Improvement Area No. 2 of the District (“Improvement Area No. 2”) was annexed to the District and bonded indebtedness for Improvement Area No. 2 was authorized in the amount not to exceed $111,000,000 (the “Authorization”); and
WHEREAS, pursuant to the provisions of the Act and the Original Fiscal Agent Agreement, on July 26, 2023, the City issued, for and on behalf of the District, $14,300,000 initial principal amount of City of Roseville Creekview Community Facilities District No. 1 (Public Facilities) Improvement Area No. 2 Special Tax Bonds, Series 2023 (the “2023 Bonds”) for the purpose of financing various public improvements authorized to be funded by the District , which 2023 Bonds constituted the first series of bonds issued pursuant to the 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) secured under the Original Fiscal Agent Agreement on parity with the 2023 Bonds; and
WHEREAS, after due investigation and de liberation 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 City of Roseville Creekview Community Facilities District No. 1 (Public Facilities) Improvement Area No. 2 Special Tax Bonds, Series 2024 (the “2024 Bonds”), to provide moneys needed to construct and acquire the facilities necessary for development of property within the City; and
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WHEREAS, in providing for the issuance of the 2024 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, this Supplemental Agreement No. 1 is a “Supplemental Agreement ” as defined in Section 1.03 of the Original Fiscal Agent Agreement and the 2024 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 this Supplemental Agreement No. 1, on parity with the 2023 Bonds; and
WHEREAS, the City and the Fiscal Agent desire to enter into this Supplemental Agreement No. 1 pursuant to Sections 5.17 of the Original Fiscal Agent Agreement to provide for the issuance of the 2024 Bonds; and
WHEREAS, the City has determined that all acts and proceedings required by la w necessary to make the 2024 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 F iscal Agent Agreement, as amended and supplemented by this Supplemental Agreement No. 1, 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. 1 have been in all respects duly authorized.
A G R E E M E N T:
NOW, THEREFORE, in consideration of the premises and the mutual agreements herein contained, and for other consideration the receipt and sufficiency of which a re 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 supplemented (as supplemented, the “Fiscal Agent Agreement”) by adding a new article thereto to be designated as Article X. Such Article X shall read in its entirety as follows:
ARTICLE X
2024 BONDS
Section 10.01. Definitions. The Original Fiscal Agent Agreement is amended to add and/or modify the following definitions to Section 1.03.
“Article X” means this Article X which has been incorporated in and made a part of this Agreement pursuant to Supplemental Agreement No. 1 , together with all amendments of and supplements to this Article X 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 2024 Bonds being ______, 2024.
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“Continuing Disclosure Certificate ” means (i) with respect to the 2023 Bond s, the Continuing Disclosure Certificate, dated as of July 26, 2023, by and among the City and Willdan Financial Services, and (ii) with respect to the 2024 Bonds, the Continuing Disclosure Certificate, dated as of ____________, 2024, by and among the City and Willdan Financial Services in its capacity as Dissemination Agent, as originally executed and as it may be amended from time to time in accordance with the terms thereof.
“Interest Payment Dates ” means (i) with respect to the 2023 Bond s, March 1 and September 1 of each year, commencing September 1, 2023, and (ii) with respect to the 2 024 Bonds, March 1 and September 1 of each year, commencing March 1, 2025.
“Supplemental Agreement No. 1” means Supplemental Agreement No. 1 to Fiscal Agent Agreement, dated as of ________ 1, 2024, between the City, for and on behalf of the District, and the Fiscal Agent.
“2024 Bonds” means the City of Roseville Creekview Community Facilities District No. 1 (Public Facilities) Improvement Area No. 2 Special Tax Bonds, Series 2024, authorized to be issued under Section 10.02.
“2024 Capitalized Interest Account ” means the account by that name established in Section 3(C) of this Supplemental Agreement No. 1.
“2024 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 2024 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 2024 Bonds, municipal advisor fees, 2024 Bond (underwriter’s) discount or underwriting fee, legal fees and charges, including bond counsel, disclosure counsel, charges for execution, transportation and safekeeping of the 2024 Bonds and other costs, charges and fees in connection with the foregoing.
“2024 Costs of Issuance Fund” means the fund by that name established and held by the Fiscal Agent pursuant to Section 10.07.
“2024 Improvement Account” means the account by that name established in Section 3(B) of this Supplemental Agreement No. 1.
“2024 Reserve Account of the Reserve Fund ” means the account by that name established in Section 10.06(B).
“Term 2024 Bonds” means the 2024 Bonds maturing September 1, ____, September 1, ____, September 1, ____ and September 1, ____
Section 10.02. Authorization of 2024 Bonds. 2024 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 10.03. Terms of 2024 Bonds.
(A) Form; Denominations. The 2024 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 2024 Bonds shall be dated the Closing Date for the 2024 Bonds.
(C) CUSIP Identification Numbers. “CUSIP” identification numbers shall be imprinted on the 2024 Bonds, but such numbers shall not constitute a part of the contract evidenced by the 2024 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 2024 Bonds. In addition, failure on the part of the City or the Fiscal Agent to use such CUSIP numbers in any notice to Owners shall not constitute an event of default or any violation of the City’s contract with such Owners and shall not impair the effectiveness of any such notice.
(D) Maturities, Interest Rates. The 2024 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 Date
(September
1)
Principal
Amount
Interest
Rate
CUSIP
(770870)
T Term Bond.
(E) Interest and Method of Payment. Interest on the 2024 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 2024 Bonds as provided in Section 2.02(F), with the first Interest Payment Date being March 1, 2025.
Section 10.04. Redemption of 2024 Bonds.
(A) Redemption Dates.
(i) Optional Redemption. The 2024 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 afte r September 1, ____ at the following respective
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redemption prices (expressed as percentages of the principal amount of the 2024 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 2024 Bonds are subject to mandatory redemption from Prepayments of the Special Tax by property owners, in whole or in part among maturities of the Bonds and Additional Bonds as specified by the 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
March 1, ____ through and including March 1, ____ 103%
September 1, ____ and March 1, ____ 102
September 1, ____ and March 1, ____ 101
September 1, ____and any Interest Payment Date thereafter 100
Prepayments and amounts released from the 2024 Reserve Account in connection with Prepayments will be allocated to the redemption of the 2 024 Bonds as nearly as practicable on a proportionate basis based on the outstanding principal amount of the 2024 Bonds and shall be applied to redeem 2024 Bonds as nearly as practicable on a pro rata basis among maturities in increments of $5,000; provided, however, that, for Prepayments of less than $50,000, the City may specify that Prepayments be applied to one or more maturities of the 2024 Bonds so long as there is delivered to the Fiscal Agent a certification of a Special Tax consultant or administrator that, following such redemption from Prepayments, the maximum Special Taxes that may be levied in each Fiscal Year on Developed Property in Improvement Area No. 2 is not less than 110% of Maximum Annual Debt Service.
(iii) Mandatory Sinking Payment Redemption . The Term 2 024 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, _____, 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:
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Term Bonds Maturing September 1, _____
Sinking Fund
Redemption Date
(September 1)
Sinking Fund
Payment
(maturity)
Term Bonds Maturing September 1, _____
Sinking Fund
Redemption Date
(September 1)
Sinking Fund
Payment
(maturity)
Term Bonds Maturing September 1, _____
Sinking Fund
Redemption Date
(September 1)
Sinking Fund
Payment
(maturity)
The amounts in the foregoing tables shall be reduced pro rata, at the direction of the City in an Officer’s Certificate, as a result of any prior partial optional or mandatory redemption of the Term 2024 Bonds pursuant to Section 10.04(A)(i) or (ii) above. In the event of a redemption pursuant to Section 10.04(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 2024 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
10.04(A), moneys in the Bond Fund may be used and withdrawn by the Fiscal Agent for purchase of Outstanding 2024 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 2024 Bonds be purchased at a price in excess of the principal amount thereof, plus interest accrued to
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the date of purchase and any premium which would otherwise be due if such 2024 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 regis tered Owners of any 2024 Bonds designated for redemption, at their addresses appearing on the 2024 Bond registration books in the Principal Office of the Fiscal Agent; but such mailing shall not be a condition precedent to such redemption and failure to mail or to receive any such notice, or any defect therein, shall not affect the validity of the proceedings for the redemption of such 2024 Bonds.
Such notice shall state the redemption date and the redemption price and, if less than all of the then Outstanding 2024 Bonds are to be called for redemption, shall designate the CUSIP numbers and 2024 Bond numbers of the 2024 Bonds to be redeemed by giving the individual CUSIP number and 2024 Bond number of each 2024 Bond to be redeemed or shall state that all 2024 Bonds between two stated 2024 Bond numbers, both inclusive, are to be redeemed or that all of the 2024 Bonds of one or more maturities have been called for redemption, shall state as to any 2024 Bond called in part the principal amount thereof to be redeemed, and shall require that such 2024 Bonds be then surrendered at the Principal Office of the Fiscal Agent for redemption at the said redemption price, and shall state that further interest on such 2024 Bonds will not accrue from and after the redemption date.
The City has the right to rescind any notice of the optional redemption of 2024 Bonds under Section 10.04(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 2024 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 2024 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 2024 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 2024 Bonds of any maturity, the Fiscal Agent shall select the 2024 Bonds to be redeemed, from all 2024 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 2024 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 2024 Bond or 2024 Bonds, of the same series and maturity, of authorized denominations in aggregate principal amount equal to the unredeemed portion of the 2024 Bond or 2024 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 2024 Bonds
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so called for redemption shall have been deposited in the Bond Fund, such 2024 Bonds so called shall cease to be entitled to any benefit under this Agreement other than th e 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 2024 Bonds redeemed and purchased by the Fiscal Agent pursuant to this Section shall be canceled by the Fiscal Agent. The Fiscal Agent shall destroy the canceled 2024 Bonds and issue a certificate of destruction thereof to the City.
Section 10.05. Form of 2024 Bonds; Authentication and Delivery.
(A) Form of 2024 Bonds. The 2024 Bonds, the form of Fiscal Agent ’s certificate of authentication, and the form of assignment to appear thereon, shall be substantially in the respective forms set forth in Exhibit C attached hereto and by this reference incorporated herein, with necessary or appropriate variations, omissions and insertions, as permitted or required by this Agreement and the Act.
(B) Execution of 2024 Bonds. The 2024 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 2024 Bond ceases to be such officer before delivery of the 2024 Bonds to the Owner, such signature shall nevertheless be as effective as if the officer had remained in office until the delivery of the 2024 Bonds to the Owner. Any 2024 Bond may be signed and attested on behalf of the City by such persons as at the actual date of the execution of such 2024 Bond shall be the proper officers of the City although at the nominal date of such 2024 Bond any such person shall not have been such officer of the City.
Only such of the 2024 Bonds as shall bear thereon a certificate of authentication in the form set forth in Exhibit C, 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 2024 Bonds have been duly authenticated and delivered hereunder and are entitled to the benefits of this Agreement.
(C) Authentication and Delivery of 2024 Bonds. At any time after the execution of Supplemental Agreement No. 1 and delivery by the City of an Officer ’s Certificate that the requirements of Section 5.17 for the issuance of the 2024 Bonds as Additional Bonds have been met, the City may issue the 2024 Bonds for the District in the aggregate principal amount set forth in Section 10.02 and deliver the 2024 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 2024 Bonds in accordance with the provisions of the Act and this Agreement, as supplemented by Supplemental Agreement No. 1 , to authorize the payment of 2024 Costs of Issuance and costs of the Project by the Fiscal Agent from the proceeds of the 2024 Bonds and to do and cause to be done any and all acts and things nece ssary or convenient for delivery of the 2024 Bonds to the Original Purchaser. The provisions of Sections
2.06 through 2.13 of the Original Fiscal Agent Agreement shall apply to the 2024 Bonds in a like manner as applied to the 2023 Bonds.
Section 10.06. Application of Proceeds of Sale of 2024 Bonds.
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(A) The proceeds of the purchase of the 2024 Bonds by the Original Purchaser in the amount of $_________, which is the principal amount thereof ($___________.00) plus original issue premium of $_________ and less 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 2024 Improvement Account of the Improvement Fund $_________;
(ii) Deposit in the 2024 Reserve Account of the Reserve Fund $_________, equaling the initial amount of the Reserve Requirement for the 2024 Bonds;
(iii) Deposit in the 2024 Capitalized Interest Account of the Bond Fund $_________; and
(iv) Deposit in the 2024 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 “2024 Reserve Account, ” into which the amounts set forth in Section 10.06(A)(ii) shall be deposited. The 2024 Reserve Account shall be held by the Fiscal Agent within the Reserve Fund, and administered as set forth in the Agreement.
Amounts available in the 2 024 Reserve Account shall be available to pay interest and principal on the 2024 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 10.06.
Section 10.07. 2024 Costs of Issuance Fund . There is hereby established a separate fund to be known as the “2024 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 2024 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 2024 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 2024 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. The Fiscal Agent shall maintain the 2024 Costs of Issuance Fund until 6 months after the Closing Date , and shall transfer any moneys remaining therein on such date , including any investment earnings th ereon, to the 2024 Improvement Account. Thereafter, every invoice received by the Fiscal Agent shall be paid from amounts on deposit in the 2024 Improvement Account and the Fiscal Agent shall close the 2024 Costs of Issuance Fund. Moneys in the 2024 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 2024 Costs of Issuance Fund to be used for the purposes of such fund.
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Section 10.08. Procedure for Disbursement of 2024 Improvement Account..
(A) Disbursements. Disbursements from the 2024 Improvement Acc ount shall be made by the Fiscal Agent according to the procedure set forth in Section 3.04 , and an Officer’s Certificate substantially in the form of Exhibit B to the Agreement (except that in such Officer ’s Certificate, reference shall be made to the 2024 Improvement Account and to the 2024 Bonds).
(B) Investment. Moneys in the Improvement Fund and the accounts established thereunder shall be invested and deposited in accordance with Section 6.01. Interest earnings and profits from the investment of amounts in the Improvement Fund shall be retained by the Fiscal Agent in the Improvement Fund to be used for the purposes of the Improvement Fund.
(C) Closing of Fund. Upon the filing of an Officer ’s Certificate stating that the portion of the Project to be financed from the Improvement Fund and the accounts established thereunder has been completed and that all costs of such portion of the Project have been paid or are not required to be paid from the Improvement Fund, the Fiscal Agent shall transfer the amount, if any, remaining in the Improvement Fund to the Bond Fund for application to the payment of principal of and interest on the Bonds in accordance with Section 4.02 and the Improvement Fund shall be closed.
Section 10.09. Security for 2024 Bonds. The 2024 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 X.
Section 10.10. Effect of this Article X. Except as in this Article X expressly provided or except to the extent inconsistent with any provision of this Article X, the 2024 Bonds shall be deemed to be “Bonds” under and within the meaning of Secti on 1.03, and every term and condition contained in the foregoing provisions of this Agreement shall apply to the 2024 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 X.
SECTION 2. Attachment of Exhibit C. The Original Fiscal Agent Agreement is hereby further supplemented and amended by incorporating therein an Exhibit C setting forth the form of the 2024 Bonds, which shall read in its entirety as set forth in Exhibit A attached hereto and hereby made a part hereof.
SECTION 3. Additional Amendments to Original Fiscal Agent Agreement . The Original Fiscal Agent Agreement is hereby further amended as follows:
(A) Section 2.06 of the Agreement is amended by adding 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 an d shall have no responsibility to verify or ensure the accuracy of such information.”
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(B) Section 3.04(A) of the Agreement is hereby amended by adding thereto, as a new third sentence thereof, the following: “There is also hereby created within the Improvement Fund a separate account designated as the “2024 Improvement Account” of the Improvement Fund, which account is hereby established for purposes of accounting for the use and disposition of 2024 Bond proceeds directed to the Improvement Fund pursuant to Section 10.06 and 10.08.
(C) Section 4.02(A) of the 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 “2024 Capitalized Interest Account ” which account is hereby established for purposes of accounting for the disposition of 2024 Bonds, a portion of the proceeds of which will be deposited to such 2024 Capitalized Interest Account pursuant to Section 10.06. The amount deposited to the 2024 Capitalized Interest Account and any investment earnings thereon shall be used solely to make payments on the 2024 Bonds, and the amount deposited to the 2024 Capitalized Interest Account and any investment earnings thereon shall be applied solely to make payments on the 2024 Bonds as follows:
March 1, 2025 and
September 1, 2025:
The amount necessary, taking into account any amounts
then on deposit in the Bond Fund available for such
purpose, to pay interest on the 2024 Bonds on the Interest Payment Date which occurs on such dates.
Any excess amounts therein on September 2, 2025 shall be transferred to the Special Tax Fund, and the 2024 Capitalized Interest Account shall thereupon be closed.
(D) The first paragraph of Section 4.03(A) is amended to add a new second paragraph as follows:
Establishment of 2024 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 2024 Reserve Account, to the credit of which a deposit shall be made as required by Section 10.06(A)(ii). Moneys in the 2024 Reserve Account shall be held in trust by the Fiscal Agent for the benefit of the Owners of the 2024 Bonds for the payment of principal of, and interest on, all Outstanding 2024 Bonds and shall be subject to a lien in favor of the Owners of the 2024 Bonds on an equal basis.
(E) Subsection (a) of the definition of “Reserve Requirement” is amended to read as follows:
“(a) the Reserve Requirement for the 2023 Bonds shall not increase after the date of issuance of the 2023 Bonds, nor shall the Reserve Requirement for any series of Additional Bonds increase after the date of issuance of such series;”
(F) References in the Fiscal Agent Agreement to the 2023 Bond s or 2024 Bonds which, if the context requires reference to the 2023 Bonds, 2024 Bonds and/or any Additional Bonds in order to maintain the parity relat ionship of the 2023 Bond s, 2 024 Bonds and any Additional Bonds and the security therefor, shall be deemed to refer to “Bonds” as defined in the Original Fiscal Agent Agreement rather than “2023 Bonds” or “2024 Bonds.”
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SECTION 4. Partial Invalidity. If any section, paragraph, sentence, clause or phrase of this Supplemental Agreement No. 1 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. 1. The City hereby declares that it would have entered into this Supplemental Agreement No. 1 and each and every other Section, paragraph, sentence, clause or phrase hereof and authorized the issue of the 2024 Bonds pursuant thereto irrespective of the fact that any one or more Sections, paragraphs, sentences. clauses, or phrases of this Supplemental Agreement No. 1 may be held illegal, invalid or unenforceable.
SECTION 5. Execution in Counterparts. This Supplemental Agreement No. 1 may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.
SECTION 6. Governing Law. This Supplemental Agreement No. 1 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. 1 to
Fiscal Agent Agreement dated as of ________ 1, 2024]
IN WITNESS WHEREOF, the City and the Fiscal Agent have caused this Supplemental Agreement No. 1 to Fiscal Agent Agreement to be executed as of ________ 1, 2024.
CITY OF ROSEVILLE, a municipal corporation,
for and on behalf of the City of Roseville
Creekview 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. 1 TO FISCAL AGENT AGREEMENT
EXHIBIT C
FORM OF 2024 BONDS
UNITED STATES OF AMERICA
STATE OF CALIFORNIA
No. __________ $________
CITY OF ROSEVILLE
CREEKVIEW COMMUNITY FACILITIES DISTRICT NO. 1 (PUBLIC FACILITIES) IMPROVEMENT AREA NO. 2
SPECIAL TAX BONDS
SERIES 2024
INTEREST RATE: MATURITY DATE: BOND DATE: CUSIP:
_____% September 1, 20__ _______, 2024
REGISTERED OWNER: CEDE & CO.
PRINCIPAL AMOUNT: DOLLARS
The City of Roseville (the “City”) for and on behalf of the City of Roseville Creekview Community Facilities District No. 1 (Public Facilities) (the “District”), for value received, hereby promises to pay solely from the Special Tax Revenues (as hereinafter defined) to be collected in Improvement Area No. 2 of 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 March 1, 2025 (the “Interest Payment Dates”), at the Interest Rate set forth above, until the principal amount hereof is paid or made available for payment. The principal of this Bond is payable to the Owner hereof in lawful money of the United States of America upon presentation and surrender of this Bond at the principal corporate trust office of U.S. Bank Trust Company, National Association, in San Francisco, California, as fiscal agent (the “Fiscal Agent”).
Interest on this Bond shall be paid by check of the Fiscal Agent mailed by first class mail on each Interest Payment Date to the Owner hereof as of the close of business on the 15th day of the month preceding the month in which the Interest Payment Date occurs whether or not such day is a Business Day (the “Record Date”) at such Owner’s address as it appears on the registration books maintained by the Fiscal Agent, or by wire transfer mad e on such Interest Payment Date
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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 Bonds.
This Bond is one of a duly authorized issue of bonds approved by resolution of the City Council of the City adopted on November 3, 2024 (the “Resolution”), pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, Sections 53311, et seq. , of the California Government Code (the “Mello-Roos Act”) for the purpose of providing moneys for the construction and acquisition of authorized improvements for the District, and is one of the bonds designated “City of Roseville Creekview Community Facilities District No. 1 (Public Facilities) Improvement Area No. 2 Special Tax Bonds Series 2024” (the “Bonds”). The issuance of the Bonds and the terms and conditions thereof are provided for by a Fiscal Agent Agreement, dated as of July 1, 2023, as amended by Supplemental Agreement No. 1 to Fiscal Agent Agreement, dated as of ________ 1, 2024 , by and between the City and the Fiscal Agent ( as so supplemented and amended, the “Agreement”) , and this reference incorporates the Agreement herein, and by acceptance hereof the Owner of this Bond assents to said terms and conditions. The Agreement is authorized under, this Bond is issued under and both are to be construed in accordance with, the laws of the State of California.
Pursuant to the Mello-Roos Act, the Agreement and the Resolution, the principal of and interest on this Bond are payable solely from Special Tax Revenues and the amounts in certain funds held under the Agreement. “Special Tax Revenues” m eans the proceeds of the facilities special tax (“Special Taxes”) levied under the Mello-Roos Act in Improvement Area No. 2 of the District that are 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 a 1% administration charge of the County of Placer (as such charge may be changed in the future), but not including interest in excess of the interest due on the Bonds or any penalties collected in connection with any such foreclosure.
Interest on this Bond shall be payable from the Interest Payment Date next preceding the date of authentication hereof, unless (i) it is authenticated on an Interest Payment Date, in which event it shall bear interest from such Interest Payment Date, or (ii) such date of authentication is after a Record Date but on or prior to an Interest Payment Date, in which event interest will be payable from such Interest Payment Date, or (iii) such date of authentication is prior to the first Record Date, in which event interest will be payable from the Bond Date shown above; provided however, that if at the time of authentication of this Bond, interest is in default hereon, this Bond shall bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment hereon.
Any tax for the payment hereof shall be limited to the Special Tax, except to the extent that provision for payment has been made by the City as may be permitted by law. The Bonds do not constitute obligations of the City fo r which the City is obligated to levy or pledge, or has levied or pledged, general or special taxation other than described herein above.
The Bonds are subject to optional redemption from any source of available funds (other than Prepayments of the Special Tax by property owners), in whole or in part among maturities as specified by the City and by lot within a maturity, on any date on and after September 1, ____ at the following respective redemption prices (expressed as percentages of the principal amount of the Bonds to be redeemed), plus accrued interest thereon to the date of redemption:
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Redemption Dates
Redemption
Price
September 1, ____ through August 31, ____ 103%
September 1, ____ through August 31, ____ 102
September 1, ____ through August 31, ____ 101
September 1, ____ and any date thereafter 100
The Bonds are subject to mandatory redemption from Prepayments of the Special Tax by property owners, in whole or in part among maturities of the Bonds and Additional Bonds as specified by the 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
March 1, ____ through and including March 1, ____ 103%
September 1, ____ and March 1, ____ 102
September 1, ____ and March 1, ____ 101
September 1, ____and any Interest Payment Date thereafter 100
Prepayments and amounts released from the 2 024 Reserve Account in connection with Prepayments will be allocated to the redemption of the Bonds and any Additional Bonds as nearly as practicable on a proportionate basis based on the outstanding principal amount of the Bonds and any Additional Bonds and shall be applied to redeem Bonds and Additional Bonds as nearly as practicable on a pro rata basis among maturities in increments of $5,000; provided, however, that, for Prepayments of less than $50,000, the City may specify that Prepayments be applied to one or more maturities of the Bonds or Additional Bonds so long as there is delivered to the Fiscal Agent a certification of a Special Tax consultant or administrator that, following such redemption from Prepayments, the maximum Special Taxes that may be levied in each Fiscal Year on Developed Property in Improvement Area No. 2 is not less than 110% of Maximum Annual Debt Service.
The Term 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, _____, 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:
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Term Bonds Maturing September 1, _____
Sinking Fund
Redemption Date
(September 1)
Sinking Fund
Payment
(maturity)
Term Bonds Maturing September 1, _____
Sinking Fund
Redemption Date
(September 1)
Sinking Fund
Payment
(maturity)
Term Bonds Maturing September 1, _____
Sinking Fund
Redemption Date
(September 1)
Sinking Fund
Payment
(maturity)
The amounts in the foregoing tables shall be reduced pro rata, at the direction of the City in an Officer’s Certificate, as a result of any prior partial optional or mandatory redemption of the Term Bonds.
Notice of redemption with respect to the Bonds to be r edeemed shall be given to the Owners thereof, in the manner, to the extent and subject to the provisions of the Agreement.
This Bond shall be registered in the name of the Owner hereof, as to both principal and interest. Each registration and transfer of registration of this Bond shall be entered by the Fiscal Agent in books kept by it for this purpose and authenticated by its manual signature upon the certificate of authentication endorsed hereon.
No transfer or exchange hereof shall be valid for any pu rpose 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
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Owner requesting transfer or exchange to pay any tax or other governmental charge required to be paid with respect to such transfer or exchange. No transfer or exchange hereof shall be required to be made (i) within 15 days prior to the date established by the Fiscal Agent for selection of Bonds for redemption or (ii) with respect to a Bond after such Bond has been selected for redemption.
The Agreement and the rights and obligations of the City th ereunder may be modified or amended as set forth therein. The principal of the Bonds is not subject to acceleration upon a default under the Agreement or any other document. This Bond shall not become valid or obligatory for any purpose until the certificate of authentication hereon endorsed shall have been dated and manually signed by the Fiscal Agent. It is hereby certified, recited and declared that all acts, conditions and things required by law to exist, happen and be performed precedent to and in the issuance of this Bond have existed, happened and been performed in due time, form and manner as required by law, and that the amount of this Bond, together with all other indebtedness of the City, does not exceed any debt limit prescribed by the laws or Constitution of the State of California.
Unless this Bond is presented by an authorized representative of The Depository Trust Company to the Fiscal Agent for registration of transfer, exchange or payment, and any Bond issued is registered in the name of Cede & Co. or such other name as requested by an authorized representative of The Depository Trust Company and any payment is made to Cede & Co., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the reg istered owner hereof, Cede & Co., has an interest herein.
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IN WITNESS WHEREOF, the City of Roseville has caused this Bond to be executed by the facsimile signatures of the Mayor and the City Clerk of the City, all as of the Bond Date stated above.
CITY OF ROSEVILLE, for and on behalf of the
CITY OF ROSEVILLE CREEKVIEW
COMMUNITY FACILITIES DISTRICT NO. 1
(PUBLIC FACILITIES)
By:
Mayor
By:
City Clerk
FISCAL AGENT’S CERTIFICATE OF AUTHENTICATION
This is one of the Bonds described in the Resolution and the Agreement.
Dated: _____________, 2024
U.S. BANK TRUST COMPANY, NATIONAL
ASSOCIATION, as Fiscal Agent
By:
Authorized Signatory
A-7
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned do(es) hereby sell, assign and transfer unto
(Name, address and Tax Identification Number of Assignee)
the within-mentioned registered Bond and hereby irrevocably constitute(s) and appoint(s) , attorney,
to transfer the same on the registration books of the Fiscal Agent with full power of substitution in the premises.
Dated:
Signature Guaranteed:
NOTE: Signature(s) must be guaranteed by a
member firm of the New York Stock Exchange or a
commercial bank or trust company.
NOTE: The signature(s) on this Assignment must
correspond with the name(s) as written on the face of the within Bond in every particular without alteration or
enlargement or any change whatsoever.
Stradling Yocca Carlson & Rauth
Draft of 10/28/24
1 4866-7581-7715v2/024667-0156
$__________
CITY OF ROSEVILLE
CREEKVIEW COMMUNITY FACILITIES DISTRICT NO. 1 (PUBLIC FACILITIES) IMPROVEMENT AREA NO. 2
SPECIAL TAX BONDS
SERIES 2024
BOND PURCHASE AGREEMENT
_____, 2024
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 disc ussions, 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 Un derwriter 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, al l (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 2024 (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 March 1, 2025) at the rates per 2 4866-7581-7715v2/024667-0156
annum and maturing on the dates and in the amounts set fo rth 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 s ubject to redemption as provided in, the Fiscal Agent Agreement dated as of July 1, 2023 , as supplemented by a Supplemental Agreement No. 1 to Fiscal Agent Agreement, dated as of _____ 1, 2024 (collectively, the “ Fiscal Agent Agreement”), each 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 _____, 2024 (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. The Bonds are payable from the Special Tax on a parity with the outstanding City of Roseville Creekview Community Facilities District No . 1 (Public Facilities) Improvement Area No. 2 Special Tax Bonds, Series 2023 (the “2023 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/or acquire certain authorized public facilities, (ii) provide for a deposit to a debt service reserve account for the Bonds, (iii) provide capitaliz ed interest for debt service due on the Bonds through and including September 1, 2025, 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 _____, 2024 (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 Secu rities 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 con tracts 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 3 4866-7581-7715v2/024667-0156
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 _____, 2024, 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 C ity, 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”). Notwithsta nding 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 incl ude 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 execut e 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 4 4866-7581-7715v2/024667-0156
the City the prices at which it sells the unsold Bonds of that maturity to the public. That reporting obligation shall continue, whethe r 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 D ate 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.
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-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 o f 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 t o 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 Underw riter 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 4866-7581-7715v2/024667-0156
(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 i n 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 distributio n 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 t hat 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 agreeme nt 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 ini tial 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 agree ment 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 (eac h 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;
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(2) “underwriter” means (A) any per son 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 direct ly 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 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 St ate 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 Pu rchase 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 th e City, if any, will not impair the ability of the City to carry out, give effect to or 7 4866-7581-7715v2/024667-0156
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 cove nants of the City contained in the District Documents that are applicable to such time period. (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, elec tions 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 prov isions 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 part y 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 Constitut ion and the applicable laws 8 4866-7581-7715v2/024667-0156
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 th e 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 t he 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 s upplemented 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 giv es 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 fo rth 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 redempt ion 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 Stateme nt, 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, th reatened (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 act ion 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 9 4866-7581-7715v2/024667-0156
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 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 u nder 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 Pre liminary 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 h ereby 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 bee n, 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. 10 4866-7581-7715v2/024667-0156
(r) The City s hall 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 o r 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 a nd 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 contemp lated thereby and by this Purchase Agreement, all such actions as, in the opinion of Bond Counsel, and Stradling Yocca Carlson & Rauth LLP (“Stradling”), counsel to the Underwriter, shall be necessary and appropriate;
(b) The information contained in the Offic ial 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 o f 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 Cong ress 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 o f 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 11 4866-7581-7715v2/024667-0156
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 enac ted (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 noti ce 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 issu ance, 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 prope rty, 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 contain ing 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 b e 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 g overnmental 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; 12 4866-7581-7715v2/024667-0156
(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 restrict ions 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 permit s, 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 s ale 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;
13 4866-7581-7715v2/024667-0156
(2) The Official Statement;
(3) An approving opinion for the Bonds, dated the Closing Date and addressed to t he 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 t he 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 th e 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), “SECUR ITY 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 fr om 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 for m 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 Offici al 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 des criptions 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 14 4866-7581-7715v2/024667-0156
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 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 o f 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 i ssue 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 government al 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, execut ed 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 t o 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 Yea r that begins in such Fiscal Year on the Bonds and the 2023 Bonds , and (ii) all information supplied by the Special Tax Consultant for use in the Official 15 4866-7581-7715v2/024667-0156
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 Agreem ent 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 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 05N LP, a California limited partnership (“ Woodside Homes”), D.R. Horton CA2, Inc., a California corporation (“ D.R. Horton Home s”), __________, a __________ (“Tri Pointe Homes ”) and __________, a __________ (“ Beazer Homes ” and , together with Lennar Homes, Meritage Homes , Woodside Homes, D.R. Horton Homes and Tri Pointe Homes, the “ Builders”) dated the date of the Preliminary Official Statement, substantially in the form attached as Exhibit F, G, H, I, J and K hereto, as applicable (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 L hereto (each a “Builder Closing Certificate”); (13) 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”);
(14) 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 Builder 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 execu ted by the Builder or the Builder’s ability to pay the 16 4866-7581-7715v2/024667-0156
Special Taxes when due, and (iv) negative assurance regarding the Preliminary Official Statement and the Official Statement;
(15) A Certificate of AG EHC II (LEN) CA 2, L.P., a Delaware limited partnership (the “ Lennar Landbank”) dated the date of the Preliminary Official Statement, substantially in the form attached as Exhibit M hereto (the “ Lennar Landbank Certificate”) or as such certificate may be modified with the approval of the Underwriter and Stradling, and a closing certificate of Lennar Landbank dated the Closing Date, to the effect that the representations in the Lennar Landbank Certificate are true and correct as of the Closing Date (except that all references to the Preliminary Official Statement in the Lennar Landbank Certificate shall be deemed references to the final Official Statement);
(16) A Certificate of Dragon – Roseville, a California limited partnership (the “Hearthstone Landbank”) dated the date of the Preliminary Official Statement, substantially in the form attached as Exhibit N hereto (the “Hearthstone Landbank Certificate”) or as such certificate may be modified with the approval of the Underwriter and Stradling, and a closin g certificate of Hearthstone Landbank dated the Closing Date, to the effect that the representations in the Hearthstone Landbank Certificate are true and correct as of the Closing Date (except that all references to the Preliminary Official Statement in th e Hearthstone 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 be expressed), contained or con tains 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 no t aware of any facts that would materially affect the conclusions of value set forth therein; (20) The certificate required by Section 5.17(A) of the Fiscal Agent Agreement stating that the requirements for the issuance of the Bonds as Additional Bonds under the Fiscal Agent Agreement have been met.
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(21) 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 st atements 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 agreeme nts 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 th is 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 an y “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 18 4866-7581-7715v2/024667-0156
the Underwriter in connection with its public offering an d 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 Under writer 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.
8. Parties in Interest . This Purchase Agreement is made solely for th e 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 warrant ies 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 investigatio ns 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 shal l 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 r eplaces 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 sh all 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 2024
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 (ex pressed as percentages of the principal amount of the Bonds to be redeemed), plus accrued interest thereon to the date of redemption:
Redemption Dates
Redemption
Price
September 1, 20__ through August 31, 20__ 103%
September 1, 20__ through August 31, 20__ 102
September 1, 20__ through August 31, 20__ 101
September 1, 20__ and any date thereafter 100
Mandatory Redemption from Prepayments. The Bonds are subject to mandatory redemption from Prepayments of the Special Tax by proper ty 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:
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Redemption Dates Redemption Price
March 1, 2025 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 Term 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
Payment
Term Bonds Maturing September 1, 20__
Sinking Fund
Redemption Date
(September 1)
Sinking Fund
Payment
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Term Bonds Maturing September 1, 20__
Sinking Fund
Redemption Date
(September 1)
Sinking Fund
Payment
Term Bonds Maturing September 1, 20__
Sinking Fund
Redemption Date
(September 1)
Sinking Fund
Payment
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 2024
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 2024 (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 prepare d a Preliminary Official Statement dated _____, 2024 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, aggregat e 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 _____, 2024.
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 2024
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 Purch ase Agreement, dated _____, 2024, 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 p rice 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 s elling 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 defi ned 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 R eserve Fund for the in the amount of the Reserve Requirement (as such terms are defined in the Fiscal Agent Agreement dated as of July 1, 2023, as supplemented by a Supplemental Agreement No. 1 to Fiscal Agent Agreement dated as of _____ 1, 2024, each 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 _____, 2024), or (ii) the date on which Piper 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 _____, 2024. (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 P ublic, 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 p arty 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: _____, 2024
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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 2024
LETTER OF REPRESENTATIONS OF ANTHEM UNITED CREEKVIEW
DEVELOPMENTS LIMITED PARTNERSHIP
_____, 2024
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 o f 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 he rein 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 (ii) undertake all of the transactions on its part described in the Preliminary Official Statement.
2. Except as disclose d in the Preliminary Official Statement, to the Actual Knowledge of the Undersigned, 1 (a) the Master Developer and its Affiliates, 2 are not in breach of or in default
1 “Actual Knowledge of the Undersigned ” means the actual (as opposed to constructive) 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 an d 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 th e matters that are set forth in this Letter of Representa tions; 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 Represe ntations. 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 th e Master Developer’s current business and operations. Off icers 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 c urrently 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 D-2
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under any applicable judgment or decree or any loan agreement, option agreement, developm ent 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 ability of the Master Developer or any of the Builders to develop the property within Improvement Area No. 2 of the District as described in the Preliminary Official Statement 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.
3. 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 ability of the Master Developer or any of the Builders to develop the property within Improvement Area No. 2 as described in the Preliminary Official Statement.
4. 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, the Master Developer’s development plan for the Winding Creek project , the Master Developer’s financing plan, the Mas ter 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” and “SPECIAL RISK FACTORS—Property Values and Property Development —Endangered and Threatened Species ” (excluding therefrom, in each ca se, 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 t o make the statements therein, in the light of the circumstances under which they were made, not misleading.
5. The Master Developer covenants that, while the Bonds or any refunding obligations related thereto are outstanding, the Master Developer and its Aff iliates 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 in vestigation, 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
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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not been levied in accordance with the methodologies contained in the Distr ict’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).
6. 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 Ac tual Knowledge of the Undersigned, no public debt secured by a tax or assessment on the property within Improvement Area No. 2 of the District exists or is in the process of being authorized that would include any portion of the property within Improvement Area No. 2 of the District.
7. 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 cont rol 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,” to the Actual Knowledge of the Undersigned, the Master De veloper currently expects that it will have sufficient funds and/or sources of funds to develop the Winding Creek project as described in the Preliminary Official Statement. The Master Developer reserves the right to change its development plan and financ ing plan for the property within Improvement Area No. 2 of the District and the Winding Creek project as a whole at any time without notice.
8. Solely as to the limited information described in Paragraph 4 above (and subject to the limitations and exclusions set forth in Paragraph 4), 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, again st 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 4 above (and subject to the limitations and exclusions set forth in Paragraph 4), 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 limitatio n 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 D-4
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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 proceeding, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party unless (i) the Master Develo per 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, an d 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 Indemnifi ed 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 proceedin g 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.
9. If, between the date hereof and the Closing Date, to the Actual Knowledge of the Undersigned, any event rela ting to or affecting the Master Developer, its Affiliates, 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 Pr eliminary 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 publicat ion 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.
10. 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.
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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.
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 2024
CLOSING CERTIFICATE OF ANTHEM UNITED CREEKVIEW DEVELOPMENTS
LIMITED PARTNERSHIP
Dated: ______, 2024
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”), Anthe m 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 tha t 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 _____, 2024 (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) 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. (3) The representations and warranties made by the Master Developer in the Letter of Representations are true and correct in all material r espects 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.
(4) 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 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 E-2
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the City, to amend or supplement the Official Statement in order to make the information under the sections of the 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 under which they were made, 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 under which they were made, 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 2024
LETTER OF REPRESENTATIONS OF LENNAR HOMES OF CALIFORNIA, LLC
_____, 2024
In connection with the issuance and sale of the above -captioned bonds (the “ Bonds”), and pursuant to Section 4(d)(12) 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”), Lennar Homes of California, LLC, a California limited liability company (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 California 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 as 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 AG EHC II (LEN) CA 2, L.P., a Delaware limited partnership, a nd under option to be acquired by the Builder (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 ex ecution 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, 2 are not in breach of or in default under any
1 “Actual Knowledge of the Undersigned ” means the actual (as opposed to constructive) knowledge that the undersigned currently has as of the date of this Letter of Representations or has obtained through: (i) interviews with such current offi cers and responsible employees of the Builder and its Affiliates as the undersigned has determined are reasonably likely, in the ordinar y 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 has reasonably deemed necessary in order for the undersigned to obtain knowledge of the matters that are set forth in this Letter of Representation s. 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 B uilder 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 th e 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 a ny 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 t he 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 mater ially 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 Act ual 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—Lennar Homes” and “CONTINUING DISCLOSURE —The Merchant Builders—Lennar Homes Continuing Disclosure Compliance ” (excluding therefrom, in each case, information which is identified as having been provided by a sou rce other than the Builder), is true and correct in all material respects and does not contain any untrue statement of a material fact or
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 un der 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 evaluat ion 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 abili ty 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, dir ect 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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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 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 Distric t, 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, or (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 Prelim inary 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 ta x 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 rela ting 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 F-4
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property, many of which are beyon d the control of the Builder, and except as disclosed in the Preliminary Official Statement including in the sections entitled “MERCHANT BUILDER INFORMATION—Lennar Homes,” the Builder currently expects that it will have sufficient funds and/or sources of f unds 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 deve lopment 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 h old 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, only 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 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 re garding 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 Indem nified 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 F-5
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any local c ounsel) 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 b e liable for any settlement 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 o f 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 mat ter 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 t he 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 t he 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 a mendment 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, I have reviewed the contents of this Letter of Representations and have met with counsel to the Builder for the purpose of discussing the meaning of its contents.
The undersigned has executed this Letter o f Representations solely in his or her capacity as an authorized representative of the Builder and he or she will have no personal liability arising from or relating to this Letter of Representations. Any liability arising from or relating to this Letter of Representations may only be asserted against Builder.
LENNAR HOMES OF CALIFORNIA, LLC
By: _____________________________
Name: ___________________________
Title: ____________________________
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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 2024
LETTER OF REPRESENTATIONS OF MERITAGE HOMES OF CALIFORNIA, INC.
_____, 2024
In connection with the issuance and sale of the above -captioned bonds (the “ Bonds”), and pursuant to Section 4(d)(12) 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”), Meritage Homes of California, Inc., a California corporation (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 California and has all requisite right, power, and autho rity to: (i) execute and deliver this Letter of Representations of Meritage Homes of California, Inc. (the “ Letter of Representations ”); (ii) to execute and deliver the Continuing Disclosure Certificate (Meritage Homes of California, Inc.) to be executed b y the Builder prior to the Closing (the “ 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 th e property within Improvement Area No. 2 of the District is held in the name of the Builder (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 the Builder Continuing Disclosure Certificate at the Closing and the performance by the Builder of its obligations thereunder.
4. Except as disclosed in the Pr eliminary Official Statement, to the Actual Knowledge of the Undersigned,1 (a) the Builder and its Relevant Entities 2 are not in breach of or in default under
1 “Actual Knowledge of the Undersigned” means the knowledge that t he 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 Relevant Entities as the un dersigned 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 Representat ions; 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 G-2
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any 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 Relevant Entities are a party or otherwise subject, which breach or default could reasonably be expected to materially and adversely affect the Builder’s abilit y to develop the Property as described in the Preliminary Official Statement or to pay the Special Tax levied against 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 Relevant Entities that is secured by an inte rest in the Property. To the Actual Knowledge of the Undersigned, neither the Builder nor any of its Relevant Entities is in default on any obligation to repay borrowed money, which default is reasonably likely to materially and adversely affect the Build er’s ability to develop the Property as described in the Preliminary Official Statement or to pay the Special Tax levied against the Property (to the extent the responsibility of the Builder) prior to delinquency.
6. Except as set forth in the Preliminary Off icial 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 Relevant Entity of the Builder (with proper service of process to such Relevant Entity having been accomplished) or to the Actual Knowledge of the Undersigned is overtly threatene d in writing against the Builder or any such Relevant Entity 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 Specia l Tax levied against the Property (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 t herein with respect to the Builder, its Relevant Entities, 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 Relevant Entity of the Bui lder (including, if material to the Builder’s development plan or the Builder’s financing plan, other loans of such Relevant Entities) as set forth under the captions entitled “MERCHANT BUILDER INFORMATION —Meritage” and “CONTINUING
inquiries as are prudent and customary in connection with the ordinary course of the Builder’s current business and operation s.
Officers and employees no longer working for the Builder or its Relevant Entities have not been contacted. 2 “Relevant Entities” 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 evaluat ion of the Property and investment decision regarding the Bonds (i.e., information relevant to: (a) the Build er’s development plans with respect to the Property and ability to pay the Special Tax levied against the Property (to the extent the responsibility of t he Builder) 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 levied against the Property (to the extent the responsibility of the Builder) prior to delinquency). “ Person” means an individual, a co rporation, a partnership, a limited liability company, an association, a joint stock company, a trust, any unincorporated organization, or a government or politi cal 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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DISCLOSURE—The Merchant Builders—Meritage Prior Continuing Disclosure Compliance ” (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.
8. The Builder covenants that, while the Bonds or any refunding oblig ations related thereto are outstanding, the Builder and its Relevant Entities 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 an y 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, o r 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 Relevant Entity 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 Relevant Entities, the City, and/or the District or to which the Builder or its Relevant Entities 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 th e 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) cau sed 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 Undersi gned, 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.
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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—Meritage,” the Builder currently expects that it will have suffici ent funds and/or sources of funds to develop the Property as described in the Preliminary Official Statement and to pay the Special Tax levied against the Property (to the extent the responsibility of the Builder) prior to delinquency. However, neither th e Builder nor its Relevant Entities are obligated to make any additional capital contribution or loan to the Builder at any time, and the Builder reserves the right to change its development plan and financing plan for the Property at any time without notice, and there is no recourse against the Builder for failure to pay Special Taxes other than the filing of a foreclosure action against the delinquent Property.
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 an d 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 sati sfactory 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 intere st exists for such G-5
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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 ad dition 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. Th e Builder shall not be liable for any settlement 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 cover ed 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 tha t 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 Kn owledge of the Undersigned, any event relating to or affecting the Builder, its Relevant Entities, 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 B uilder or any Relevant Entity of the Builder (including, if material to the Builder’s development plan or the Builder’s financing plan, other loans of such Relevant Entities) shall occur which the undersigned believes 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 reas onably satisfactory to counsel to the City and to the Underwriter.
16. On behalf of the Builder, the undersigned has reviewed the contents of this Certificate and has met with counsel to the Builder for the purpose of discussing the meaning of its contents.
The undersigned has executed this Letter of Representations solely in his or her capacity as authorized officer or representative of the Builder and he or she will have no personal liability arising from or relating to this Letter of Representations.
MERITAGE HOMES OF CALIFORNIA, INC., a
California corporation
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 2024
LETTER OF REPRESENTATIONS OF WOODSIDE 05N LP
_____, 2024
In connection with the issuance and sale of the above -captioned bonds (the “ Bonds”), and pursuant to Section 4(d)(12) 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”), Woodside 05N LP, a Calif ornia limited partnership (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 California and has all requisite right, power, and authority to: (i) execute and deliver this Letter of Representations of Woodside 05N LP (the “ Letter of Representations”); (ii) to execute and deliver the Continuing Disclosure Certificate (Woodside 05N LP)to be executed by the Builder prior to the Closing (the “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 (herein, th e “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 the Builder Continuing Disclosur e 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 Relevant Entities 2 are not in breach of or in default under
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 office rs and responsible employees of the Builder and its Relevant Entities as the undersigned have determined are reasonably likely, in t he ordinary course of their respective duties, to have knowledge of the matters that are set forth in this Letter of Represe ntations; 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 operation s.
Officers and employees no longer working for the Builder or its Relevant Entities have not been contacted.
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any 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 Relevant Entities are a party or o therwise 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 levied against 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 Prelim inary Official Statement, there is no material indebtedness of the Builder or its Relevant Entities that is secured by an interest in the Property. To the Actual Knowledge of the Undersigned, neither the Builder nor any of its Relevant Entities 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 levied against t he 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 a gency, 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 Relevant Entity of the Builder (with proper service o f process to such Relevant Entity having been accomplished) or to the Actual Knowledge of the Undersigned is overtly threatened in writing against the Builder or any such Relevant Entity which, if successful, is reasonably likely to materially and adversel y affect the Builder’s ability to develop the Property as described in the Preliminary Official Statement or to pay the Special Tax levied against the Property (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 Relevant Entities, ownership of the Property, the Builder’s develo pment plan, the Builder’s financing plan, the Builder’s lenders, if any, and contractual arrangements of the Builder or any Relevant Entity of the Builder (including, if material to the Builder’s development plan or the Builder’s financing plan, other loan s of such Relevant Entities) as set forth under the captions entitled “MERCHANT BUILDER INFORMATION —Woodside” and “CONTINUING DISCLOSURE—The Merchant Builders —Woodside Continuing Disclosure Compliance ” (excluding therefrom, in each case, information which is identified as having been provided by a
2 “Relevant Entities” 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 evaluat ion 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 levied against the Property (to the extent the responsibility of t he Builder) 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 levied against the Property (to the extent the responsibility of the Builder) 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 politi cal 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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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.
8. The Builder covenants that, while the Bonds or any refunding obligations related thereto are outstanding, the Builder and its Relevant Entities which it controls will not bring a ny 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 o f 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 rec ordation of the notice of special tax lien relating thereto. The foregoing covenant shall not prevent the Builder or any Relevant Entity 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 Mann er 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 Distr ict under the Formation Documents, the District Documents, or any other agreements among the Builder or its Relevant Entities, the City, and/or the District or to which the Builder or its Relevant Entities 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 pa yment 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 int ends 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.
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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—Woodside,” the Builder 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 levied against the Property (to the extent the responsibility of the Builder) prior to delinquency. However, neither the Builder nor its Relevant Entities are obligated to make any additional capital contribution or loan to the Builder at any time, and the Builder reserves the right to change its development plan and financing plan for the Property at any time without notice, and there is no recourse against the Builder for failure to pay Special Taxes other than the filing of a foreclosure action against the delinquent Property.
14. Solely as to the limited information described in Paragrap h 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 informatio n 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 th e 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, damage s, 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 H-5
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counsel; or (iv) the named parties in any such proceeding (includ ing 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 Bui lder 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 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 settlemen t (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 a s 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 Rele vant Entities, 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 Relevant Entity of the Builder (including, if material to the Builder’ s development plan or the Builder’s financing plan, other loans of such Relevant Entities) shall occur which the undersigned believes 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 State ment, 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, the undersigned has reviewed the contents of this Certificate and has met with counsel to the Builder for the purpose of discussing the meaning of its contents.
The undersigned has executed this Letter of Representations solely in his or her capac ity as authorized officer or representative of the Builder and he or she will have no personal liability arising from or relating to this Letter of Representations.
WOODSIDE 05N LP, a California limited partnership
By: _____________________________
Name: ___________________________
Title: ____________________________
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EXHIBIT I
CITY OF ROSEVILLE
CREEKVIEW COMMUNITY FACILITIES DISTRICT NO. 1 (PUBLIC FACILITIES) IMPROVEMENT AREA NO. 2
SPECIAL TAX BONDS
SERIES 2024
LETTER OF REPRESENTATIONS OF D.R. HORTON CA2, INC.
_____, 2024
In connection with the issuance and sale of the above-captioned bonds (the “ Bonds”), and pursuant to Section 4(d)(12) 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”), D.R. Horton CA2, Inc.. a California corporation (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 u nder the laws of the State of California and has all requisite right, power, and authority to: (i) execute and deliver this Letter of Representations of D.R. Horton CA2, Inc. (the “ Letter of Representations ”); (ii) to execute and deliver the Continuing Disclosure Certificate (D.R. Horton CA2, Inc.) to be executed by the Builder prior to the Closing (the “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 Dragon – Roseville, a California limited partnership, and under option to be acquired by the Builder ( 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 the 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 Relevant Entities 2 are not in breach of or in default under
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 Re presentations or have obtained through: (i) interviews with such current officers and responsible employees of the Builder and its Relevant Entities as the undersigned have determined are reasonably likely, in t he 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 undersign ed 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 Relevant Entities have not been contacted.
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any 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 Relevant Entities 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 levied against th e 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 Relevant Entities that is secured by an interest in the Property. To the Actual Knowledge of the Undersigned, neither the Builder nor any of its Relevant Entities 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 levied against 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, re gulatory 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 Relevant Entity of the Builder (with proper service of process to such Relevant Entity having been accomplished) or to the Actual Knowledge of the Undersigned is overtly threatened in writing against the Builder or any such Relevant Entity 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 levied against the Property (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 Relevant Entities, ownership of the Property, the Builder’s development plan, th e Builder’s financing plan, the Builder’s lenders, if any, and contractual arrangements of the Builder or any Relevant Entity of the Builder (including, if material to the Builder’s development plan or the Builder’s financing plan, other loans of such Rele vant Entities) as set forth under the captions entitled “MERCHANT BUILDER INFORMATION —D.R. Horton” and “CONTINUING DISCLOSURE—The Merchant Builders —D.R. Horton Continuing Disclosure Compliance ” (excluding therefrom, in each case, information which is ident ified as having been provided by a
2 “Relevant Entities” 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 informat ion, 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 levied agai nst the Property (to the extent the responsibility of the Builder) 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 levied against the Property (to the extent the responsibility of the Builder) prior to delinquency). “ Person” means an individual, a corporation, a partnership, a limited liability company, an association, a joint stock company, a tr ust, 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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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.
8. The Builder covenants that, while the Bonds or any refunding obligations related thereto are outstanding, the Builder and its Relevant Entities 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 Ci ty 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 Relevant Entity in any way from bringing any other action, suit, proceeding, inquiry or investigation, at law or in equity, before any court, r egulatory 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 Co llection 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 unde r the Formation Documents, the District Documents, or any other agreements among the Builder or its Relevant Entities, the City, and/or the District or to which the Builder or its Relevant Entities 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 las t 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 Ac tual 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.
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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—D.R. Horton,” the Builder curr ently 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 levied against the Property (to the extent the responsibility of the Builder) prior to delinquency. However, neither the Builder nor its Relevant Entities are obligated to make any additional capital contribution or loan to the Builder at any time, and the Builder reserves the right to change its development plan and financing plan fo r the Property at any time without notice, and there is no recourse against the Builder for failure to pay Special Taxes other than the filing of a foreclosure action against the delinquent Property.
14. Solely as to the limited information described in Paragr aph 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 (eac h, 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 a ll 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 informat ion 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, dama ges, 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 fa ilure; 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 Build er) 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 coun sel 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 I-5
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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 expense s 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 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 Relevant Entities, 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 Relevant Entity of the Builder (including, if material to the Builder’s development plan or the Builder’s financing plan, other loans of such Relevant Entities) shall occur which the undersigned believes 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 Unde rwriter, 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 Offici al Statement in form and substance reasonably satisfactory to counsel to the City and to the Underwriter.
16. On behalf of the Builder, the undersigned has reviewed the contents of this Certificate and has met with counsel to the Builder for the purpose of discussing the meaning of its contents.
The undersigned has executed this Letter of Representations solely in his or her capacity as authorized officer or representative of the Builder and he or she will have no personal liability arising from or relating to this Letter of Representations.
D.R. HORTON CA2, INC., a California corporation
By: _____________________________
Name: ___________________________
Title: ____________________________
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EXHIBIT J
CITY OF ROSEVILLE
CREEKVIEW COMMUNITY FACILITIES DISTRICT NO. 1 (PUBLIC FACILITIES) IMPROVEMENT AREA NO. 2
SPECIAL TAX BONDS
SERIES 2024
LETTER OF REPRESENTATIONS OF [TRI POINTE]
_____, 2024
In connection with the issuance and sale of the above -captioned bonds (the “ Bonds”), and pursuant to Section 4(d)(12) 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 California and has all requisite right, power, and authority to: (i) execute and deliver this Letter of Representations of __________ (the “ Letter of Representations ”); (ii) to execute and deliver the Continuing Disclosure Certificate (___________) to be executed by the Builder prior to the Closing (the “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 (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 the 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 Relevant Entities 2 are not in breach of or in default under
1 “Actual Knowledge of the Undersigned” means the knowledge that the individuals sign ing 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 Relevant Entities as the undersigned have dete rmined 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 Representat ions; and/or (ii) review of documents that were reasonably available to the undersigned and wh ich 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 operation s.
Officers and employees no longer working for the Builder or its Relevant Entities have not been contacted.
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any 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 Relevant Entities are a party or otherwise subject, which breac h 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 levied against the Property (to the extent the responsib ility 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, the re is no material indebtedness of the Builder or its Relevant Entities that is secured by an interest in the Property. To the Actual Knowledge of the Undersigned, neither the Builder nor any of its Relevant Entities is in default on any obligation to repa y 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 levied against the Property (to the extent th e 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 i s 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 Relevant Entity of the Builder (with proper service of process to such Relevant En tity having been accomplished) or to the Actual Knowledge of the Undersigned is overtly threatened in writing against the Builder or any such Relevant Entity which, if successful, is reasonably likely to materially and adversely affect the Builder’s abilit y to develop the Property as described in the Preliminary Official Statement or to pay the Special Tax levied against the Property (to the extent the responsibility of the Builder) prior to delinquency.
7. As of the date thereof, to the Actual Knowledge of th e Undersigned, the Preliminary Official Statement, solely with respect to information contained therein with respect to the Builder, its Relevant Entities, 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 Relevant Entity of the Builder (including, if material to the Builder’s development plan or the Builder’s financing plan, other loans of such Relevant Entities) as set forth under the captions entitled “MERCHANT BUILDER INFORMATION —Tri Pointe” and “CONTINUING DISCLOSURE—The Merchant Builders —Tri Pointe Continuing Disclosure Compliance ” (excluding therefrom, in each case, information which is identified as having been provided by a
2 “Relevant Entities” 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 informat ion, including financial information or operating data, concerning such Person is material to potential investors in their evaluat ion of the Property and investment decision regarding the Bonds (i.e., information relevant to: (a) the Builder’s development pl ans with respect to the Property and ability to pay the Special Tax levied against the Property (to the extent the responsibility of t he Builder) 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 levied against the Property (to the extent the responsibility of the Builder) prior to delinquency). “ Person” means an individual, a corporation, a partne rship, a limited liability company, an association, a joint stock company, a trust, any unincorporated organization, or a government or politi cal subdivision thereof. For purposes hereof, the term “ control” (including the terms “ controlling,” “ controlled b y” 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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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.
8. The Builder covenants that, while the Bonds or any refunding obligations related thereto are outstanding, the Builder and its Relevant Entities which it controls will not bring any action, suit, proceeding, inquiry or investiga tion, 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 relati ng thereto. The foregoing covenant shall not prevent the Builder or any Relevant Entity 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 D ocuments, or any other agreements among the Builder or its Relevant Entities, the City, and/or the District or to which the Builder or its Relevant Entities is a party or beneficiary (including, but not limited to, the Fiscal Agent Agreement).
9. Except as di sclosed 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 e xists 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 o n 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 Bu ilder 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 o r supervision of the Federal Deposit Insurance Corporation.
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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, ma ny 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—Tri Pointe,” the Builder 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 levied against the Property (to the extent the responsibility of the Builder) prior to delinquency. However, neither the Builder nor its Relevant Entities are obligated to make any additional capital contribution or loan to the Builder at any time, and the Builder reserves the right to change its development plan and financing plan for the Property at any time without notice, and there is no recourse against the Builder for failure to pay Special Taxes other than the filing of a foreclosure action against the delinquent Property.
14. Solely as to the limited information described in Paragraph 7 above (and subject to the limitations and e xclusions 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 t o 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 statement s 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 pr oceeding 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 t o 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 J-5
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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 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 i n 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 Relevant Entities, 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 Relevant Entity of the Builder (including, if material to the Builder’s development plan or the Builder’s financing plan, other loans of such Relevant Entities) shall occur which the undersigned believes would cause the information under the sections o f 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 state ments 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 sat isfactory to counsel to the City and to the Underwriter.
16. On behalf of the Builder, the undersigned has reviewed the contents of this Certificate and has met with counsel to the Builder for the purpose of discussing the meaning of its contents.
The undersig ned has executed this Letter of Representations solely in his or her capacity as authorized officer or representative of the Builder and he or she will have no personal liability arising from or relating to this Letter of Representations.
___________, a __________
By: _____________________________
Name: ___________________________
Title: ____________________________
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EXHIBIT K
CITY OF ROSEVILLE
CREEKVIEW COMMUNITY FACILITIES DISTRICT NO. 1 (PUBLIC FACILITIES) IMPROVEMENT AREA NO. 2
SPECIAL TAX BONDS
SERIES 2024
LETTER OF REPRESENTATIONS OF [BEAZER HOMES]
_____, 2024
In connection with the issuance and sale of the above -captioned bonds (the “ Bonds”), and pursuant to Section 4(d)(12) 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 California and has all requisite right, power, and authority to: (i) execute and deliver this Letter of Representations of __________ (the “ Letter of Representations ”); (ii) to execute and deliver the Continuing Disclosure Certificate (___________) to be executed by the Builder prior to the Closing (the “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 (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 the 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 Relevant Entities 2 are not in breach of or in default under
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 Relevant Entities 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 Representat ions; 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 un dersigned 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 operation s.
Officers and employees no longer working for the Builder or its Relevant Entities have not been contacted.
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any applicable judgment or decree or any loan agreement, option ag reement, development agreement, indenture, bond, or note (collectively, the “ Material Agreements”) to which the Builder or its Relevant Entities 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 levied against the Property (to the extent the responsibility of the Builder) prior to delinquency and (b) no event has oc curred 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 Relevant Enti ties that is secured by an interest in the Property. To the Actual Knowledge of the Undersigned, neither the Builder nor any of its Relevant Entities 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 levied against 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 t he Builder having been accomplished) or, to the Actual Knowledge of the Undersigned, is pending against any Relevant Entity of the Builder (with proper service of process to such Relevant Entity having been accomplished) or to the Actual Knowledge of the U ndersigned is overtly threatened in writing against the Builder or any such Relevant Entity 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 levied against the Property (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 res pect to information contained therein with respect to the Builder, its Relevant Entities, 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 Relevant Entity of the Builder (including, if material to the Builder’s development plan or the Builder’s financing plan, other loans of such Relevant Entities) as set forth under the captions entitled “MERCHANT BUILDER INFORMATION —Beazer Homes” and “ CONTINUING DISCLOSURE—The Merchant Builders —Beazer Homes Continuing Disclosure Compliance ” (excluding therefrom, in each case, information which is identified as having been provided by a
2 “Relevant Entities” means, with respect to the Builder, any other Person: (i) who directly, or indirectly through one or more intermediaries, is currently controlling, contro lled 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 evaluat ion 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 levied against the Property (to the extent the responsibility of t he Builder) 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 levied against the Property (to the extent the responsibility of the Builder ) 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 politi cal subdivision thereof. For purpos es 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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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.
8. The Builder covenants that, while the Bonds or any refunding obligations related thereto are outstanding, the Builder and its Relevant Entities 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 r efunding 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 Build er or any Relevant Entity 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 Relevant Entities, the City, and/or the District or to which the Builder or its Relevant Entities 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 o f 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 commu nity 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 relat ing 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.
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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—Beazer Homes,” the Builder 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 levied against the Property (to the extent the responsibility of the Builder) prior to delinquency. However, neither the Builder nor its Relevant Entities are obligated to make any additional capital contribution or loan to the Builder at any time, and the Builder reserves the right to change its development plan and financing plan for the Property at any time without notice, and there is no recourse against the Builder for failure to pay Sp ecial Taxes other than the filing of a foreclosure action against the delinquent Property.
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 i ndemnify 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 statut e 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 oblig ated 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 ha ve 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 K-5
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counsel; or (iv) the named parties in any such proc eeding (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 of any proceeding eff ected 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 a ny 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 Bui lder, its Relevant Entities, 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 Relevant Entity of the Builder (including, if material t o the Builder’s development plan or the Builder’s financing plan, other loans of such Relevant Entities) shall occur which the undersigned believes 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, the undersigned has reviewed the contents of this Certificate and has met with counsel to the Builder for the purpose of discussing the meaning of its contents.
The undersigned has executed this Letter of Representations solely in hi s or her capacity as authorized officer or representative of the Builder and he or she will have no personal liability arising from or relating to this Letter of Representations.
___________, a __________
By: _____________________________
Name: ___________________________
Title: ____________________________
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EXHIBIT L
CITY OF ROSEVILLE
CREEKVIEW COMMUNITY FACILITIES DISTRICT NO. 1 (PUBLIC FACILITIES) IMPROVEMENT AREA NO. 2
SPECIAL TAX BONDS
SERIES 2024
CLOSING CERTIFICATE OF [___________]
Dated: _____, 2024
In connection with the issuance and sale of the above-captioned bonds (the “ Bonds”), and pursuant to Section 4(d)(12) 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 _____, 2024 (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 t he 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 refe rences 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 Build er or any Affiliates of the Builder (including, if material to the Builder’s L-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 a mendment 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 fa ct 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: ____________________________
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EXHIBIT M
CITY OF ROSEVILLE
CREEKVIEW COMMUNITY FACILITIES DISTRICT NO. 1 (PUBLIC FACILITIES) IMPROVEMENT AREA NO. 2
SPECIAL TAX BONDS
SERIES 2024
CERTIFICATE OF AG EHC II (LEN) CA 2, L.P.
_____, 2024
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 Roseville Creekview Community Facilities District No. 1 (Public Facilities) (the “District”), and Piper Sandler & Co. (the “ Underwriter”), AG EHC II (LEN) CA 2, L.P., a Delaware limited partnership , a Delaware limited partnership (the “ Landowner”), hereby represents, warrants and covenants to the City, the District and the Underwriter as of the date hereof that:
1. The Landowner is a limited partnership validly existing and in good standing as a limited partnership under the laws of the State of Delaware and is duly registered to transact business in the State of California as a foreign limited partnership and is in good standing in the State of California and has all requisite right, power and authority: (i) to execute and deliver this Letter of Representations; and (ii) to undertake all of the tr ansactions on its part described in the Preliminary Official Statement.
2. As set forth in the Preliminary Official Statement, certain property within Improvement Area No. 2 of the District is held in the name of the Landowner (herein the “Property”). The undersigned, on behalf of the Landowner, makes the representations herein with respect to all such Property owned by Landowner.
3. As of the date thereof, the Preliminary Official Statement, solely with respect to information contained therein with respec t to the Landowner and ownership of the Property by Landowner as set forth under the caption “MERCHANT BUILDER INFORMATION —Lennar Homes—The Landbank Owner ” is true and correct in all material respects and did 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.
4. The Landowner covenants that, while the Bonds or any refunding obligations related thereto are outstanding, the Landowner 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, t o challenge the adoption of Ordinance No. 6055 of the City levying Special Taxes 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 amended notice of special tax lien relating thereto. The foregoing covenant shall not prevent the Landowner in any M-2
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way from bringing any other action, suit or proceeding including, without limi tation, (a) an action or suit contending that the Special Taxes have not been levied in accordance with the methodologies contained in the District’s Rate and Method of Apportionment of Special Taxes pursuant to which the Special Taxes are levied, or (b) a n action or suit with respect to the application or use of the Special Taxes levied and collected.
5. Except as disclosed in the Preliminary Official Statement, the Landowner is not aware that any other public debt secured by a tax or assessment on the Pro perty exists or is in the process of being authorized or any assessment districts or community facilities districts have been or are in the process of being formed that include any portion of the Property.
6. To the undersigned’s actual knowledge, the Land owner 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 Landowner within the boundaries of a community facilities district or an assessment district within California that (a) would have 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 against the Landowner.
The undersigned has executed th is Certificate solely in his or her capacity as the manager of the authorized agent of the Landowner and he or she will have no personal liability arising from or relating to this Certificate.
AG EHC II (LEN) CA 2, L.P.,
a Delaware limited partnership
By: Essential Housing Asset Management,
LLC, an Arizona limited liability company,
its Authorized Agent
By:
Steven S. Benson, its Manager
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EXHIBIT N
CITY OF ROSEVILLE
CREEKVIEW COMMUNITY FACILITIES DISTRICT NO. 1 (PUBLIC FACILITIES) IMPROVEMENT AREA NO. 2
SPECIAL TAX BONDS
SERIES 2024
CERTIFICATE OF DRAGON – ROSEVILLE, L.P.
_____, 2024
In connection with the issuance and sale of the above -captioned bonds (the “ Bonds”), and pursuant to Section 4(d)(16) 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 Roseville Creekview Community Facilities District No. 1 (Public Facilities) (the “District”), and Piper Sandler & Co. (the “ Underwriter”), Dragon – Roseville, L.P., a Delaware limited partnership (the “Landowner”), hereby represents, warrants and covenants to the City, the District and the Underwriter as of the date hereof that:
1. The Landowner is a limited partnership validly existing and in good standing under the laws of the State of Delaware and is registered to transact intrastate business in the State of California and has all requisite limited partnership right, power and authority: (i) to execute and deliver this Certificate of Dragon – Roseville, L.P. (the “Certificate”); and (ii) to undertake all of the transactions on its part described in the Preliminary Official Statement.
2. As set forth in the Preliminary Official Statement, certain property within Improvement Area No. 2 of the District is held in the name of the Landowner (herein the “Property”). The undersigned, on behalf of the Landowner, makes the representations herein with respect to all such Property owned by Landowner.
3. As of the date thereof, the Preliminary Official Statement, solely with respect to information contained the rein with respect to the Landowner and ownership of the Property by Landowner as set forth under the caption “MERCHANT BUILDER INFORMATION —D.R.
Horton—The Hearthstone Landbank” is true and correct in all material respects and did not contain any untrue sta tement 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.
4. The Landowner covenants that, while the Bonds or any refunding obligations related thereto are outstanding, the Landowner 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 formati on of the District, to challenge the adoption of Ordinance No. 6055 of the City levying Special Taxes 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 amended notice of special tax lien relating thereto. The foregoing covenant shall not prevent the Landowner in any way from bringing any other action, suit or proceeding in cluding, without limitation, (a) an action or N-2
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suit contending that the Special Taxes have not been levied in accordance with the methodologies contained in the District’s Rate and Method of Apportionment of Special Taxes pursuant to which the Special Taxes are levied, or (b) an action or suit with respect to the application or use of the Special Taxes levied and collected.
5. Except as disclosed in the Preliminary Official Statement, the Landowner is not aware that any other public debt secured by a tax or assessment on the Property exists or is in the process of being authorized or any assessment districts or community facilities districts have been or are in the process of being formed that include any portion of the Property.
6. To the undersigned’s actua l knowledge, the Landowner 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 Landowner within the boundaries of a community facilities district or an assessment district within California that (a) would have 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 against the Landowner.
The undersigned has executed this Certificate solely in his or her capacity as the manager of the authorized agent of the Landowner and he or she will have no personal liability arising from or relating to this Certificate.
DRAGON – ROSEVILLE, L.P.,
a Delaware limited partnership
By: ___________
By: ____________________________________
__________
Its: Authorized Representative
COUNCIL COMMUNICATION
CC #:
3634
File #:
0114
Title:
Priority Legislation Signed or Vetoed by the Governor
for 2024
Contact:
Mark Wolinski 916-774-5179 [email protected]
Meeting Date: 11/20/2024
Item #: 8.1.
RECOMMENDATION TO COUNCIL
Staff requests that the City Council receive an overview on priority bills that the Governor has signed or vetoed.
BACKGROUND
BACKGROUND
During this last stage of the legislative cycle, the Government Relations Team has closely monitored bills presented to the Governor for his consideration. This year, the Legislature introduced 2,531 bills between the two houses, with 1,729 in the Assembly and 802 in the Senate.
The Legislature worked right up to the midnight deadline on August 31 to complete a chaotic final week of the legislative session. A total of 1,206 bills advanced to Governor Newsom’s desk. The Governor had until September 30 to act on legislation. This year he signed 1,017 bills and vetoed 189 bills (18.5%). Last year, he signed 890 bills and vetoed 156 or about 17.5%. The Legislature can override vetoes, if the bill’s backers can win two-thirds majorities in both the Assembly and Senate. This doesn’t happen often, and in recent decades it almost never has.
Police, Fire, Building
This segment of the report focuses on bills that address critical issues ranging from organized retail theft and property crime to emergency medical services and clean energy infrastructure development. As Roseville continues to experience growth and navigate the challenges of public safety and sustainability, the enactment of these measures offers new tools and strategies for law enforcement, city services, and community protection. Each piece of legislation has been reviewed for its relevance and potential impact on the City, with specific attention to how it aligns with Roseville's priorities and operational needs.
The following 10 bills are new public safety laws which were signed by the Governor to “strengthen California’s existing law enforcement tools and better protect Californians.” The final bill in this section relates to a bill of importance to the building department.
New Laws - Signed
•
AB 1779 (Irwin) Theft: jurisdiction
– This bill will expand the jurisdiction of theft-related offenses, allowing multiple thefts committed in different counties to be prosecuted together in any of the counties where an offense occurred. It aims to streamline legal processes and improve enforcement against cross-county theft operations.
Staff comments: This legislation matters
to the City as it enhances the ability to prosecute theft rings operating across county lines, reducing organized crime impacting local businesses. (Signed by the Governor.)
•
AB 1802 (Jones-Sawyer) Crimes: organized theft
– This bill will increase penalties and
provide law enforcement with additional tools to combat organized theft rings, particularly in retail theft. It seeks to improve coordination between law enforcement agencies and boost efforts to prevent and punish large-scale theft operations.
Staff comments: Organized theft is a
significant issue for the City's retail sector. This legislation will aid local law enforcement in tackling complex theft operations, protecting the economic health of the community. (Signed by the Governor.)
•
AB 1972 (Alanis) Regional property crimes task force
– This bill will establish regional task
forces to focus on property crimes, particularly theft and burglary. The task forces aim to enhance collaboration among local law enforcement agencies and improve crime-solving and prevention strategies.
Staff comments: The City could benefit from participating in a regional task force, leveraging resources and expertise to better combat property crimes affecting residential and commercial areas. (Signed by the Governor.)
•
AB 2943 (Zbur and Rivas) Crimes: shoplifting
– This bill will increase penalties for repeat
shoplifters and introduce measures to address organized shoplifting crimes. It seeks to deter habitual offenders and organized theft rings that target retail businesses.
Staff comments: With
the City’s large retail centers, this legislation will help reduce repeat offenders and protect local businesses from escalating shoplifting incidents. (Signed by the Governor.)
•
AB 3209 (Berman) Crimes: theft: retail theft restraining orders – This bill will allow courts
to issue restraining orders against individuals convicted of retail theft, barring them from entering specific retail establishments. It aims to protect businesses from repeat offenders.
Staff
comments: Retail theft is a growing concern for businesses in Roseville and this legislation will give local businesses added protection from individuals who repeatedly target their stores. (Signed by the Governor.)
•
SB 905 (Wiener) Crimes: theft from a vehicle
– This bill will strengthen penalties for theft
from vehicles and provide clearer definitions for prosecuting such crimes. It seeks to address the increasing rate of vehicle break-ins and reduce these thefts.
Staff comments: Roseville is not
immune to vehicle break-ins, especially in parking lots of retail centers. This bill provides law enforcement with better tools to address this crime. (Signed by the Governor.)
•
SB 982 (Wahab) Crimes: organized theft
– This bill will enhance penalties for those involved
in organized theft operations. It aims to improve coordination between law enforcement and retailers to identify and prosecute individuals who engage in large-scale theft activities.
Staff
comments: Organized retail theft affects Roseville’s large shopping centers. This law will enhance cooperation between local businesses and police, improving the City's ability to combat theft rings. (Signed by the Governor.)
•
SB 1144 (Skinner) Marketplaces: online marketplaces
– This bill will enforce stricter
regulations on online marketplaces to curb the sale of stolen goods. It requires sellers to provide proof of identity and ownership for high-value goods, aiming to reduce the trafficking of stolen property online.
Staff comments: With Roseville's proximity to large metropolitan areas, stolen goods often circulate through online platforms. This legislation will help disrupt the market for stolen goods, protecting residents and businesses. (Signed by the Governor.)
•
SB 1242 (Min) Crimes: fires
- This bill will increase penalties for intentionally setting fires as part of theft or destruction during organized criminal activities. It aims to deter individuals from using arson as a tool for criminal operations, such as looting.
Staff comments: Wildfire risks in
the region make it critical for the City to support legislation that discourages arson, especially in conjunction with theft or criminal activities. (Signed by the Governor.)
•
SB 1416 (Newman) Sentencing enhancements: sale, exchange, or return of stolen property
– This bill will introduce sentencing enhancements for individuals who engage in the sale, exchange, or return of stolen property, particularly if the stolen items are part of an organized theft ring. It aims to target the downstream operations that fuel large-scale theft activities.
Staff
comments: The City will benefit from stronger deterrents against the fencing of stolen goods, helping reduce organized crime and protecting local businesses. (Signed by the Governor.)
•
SB 1418 (Archuleta) Hydrogen-fueling stations: expedited review – This bill will facilitate
the expansion of hydrogen-fueling infrastructure by mandating an expedited review process for the permitting and approval of new hydrogen-fueling stations. It aims to support California’s transition to zero-emission vehicles (ZEVs) by streamlining the approval process for hydrogen-fueling stations.
Staff comments: The City continues to invest in clean energy infrastructure; however staff is concerned with the City’s ability to maintain high standards of inspection and safety due to the compressed permitting and approval process.
Thorough oversight remains a priority for the City as it moves toward a sustainable future. The City will have until September 30, 2028 to become compliant with this new law. (Signed by the Governor)
Zoning, Housing, Elections, Homelessness
This year, 518 bills being tracked for the general fund departments were passed by the Legislature and sent to the governor for further consideration. Ultimately, 431 bills were signed into law and 87 were vetoed.
New Laws - Signed
•
SB 1037 (Wiener) - Planning and Zoning: Housing Element: Enforcement - The Planning
and Zoning Law requires a city or county to adopt a general plan for land use development within its boundaries that includes, among other things, a housing element. The Planning and Zoning Law requires the Department of Housing and Community Development (HCD) to determine whether the housing element is in substantial compliance with specified provisions of that law. This bill will create new legal remedies that can be used by the Attorney General to enforce the adoption of housing element revisions or to enforce any state law that requires a local government to ministerially approve any decision or application for a housing development project.
Staff
comments: The City opposed this bill for the fines that ultimately could be levied against a local government for being out of compliance with their housing elements and for the requirement that the penalty is automatic without an opportunity to cure. In addition, the bill does not consider whether a city is acting in good faith. Under existing law, cities can be subject to significant fines and penalties for violating certain housing laws. However, before fines are imposed, a city can correct the action. Enhanced fines are not imposed unless a city or county fails to follow a court’s order or acts in bad faith. (Signed by the Governor)
•
AB 1886 (Alvarez) - Housing Element Law: substantial compliance: Housing Accountability Act.
- This bill will provide that a housing element or amendment is considered substantially compliant with the Housing Element Law when the local agency has adopted a housing element or amendment, the department or a court of competent jurisdiction determines the adopted housing element or amendment to be in substantial compliance with the Housing Element Law, and the department’s compliance findings have not been superseded by subsequent contrary findings by the department or by a decision of a court of competent jurisdiction or the court’s decision has not been overturned or superseded by a subsequent court decision or by statute.
Staff comments: The City opposed this bill because it ignores a fundamental provision of housing element law, that a city may disagree with the Department of Housing and Community Development (HCD); explain why its housing element is in substantial compliance with the law; and then adopt that housing element which is thereafter considered “in substantial compliance with housing element law.” For years, cities have worked with HCD to draft housing plans accommodating their fair share of housing at all income levels.
These extensive and complex plans can take
years to develop, including public involvement and engagement and environmental review. Cities go to great lengths to ensure that their housing element substantially complies with the law, even if HCD disagrees.
Unfortunately, this measure fails to address the key struggles cities deal with when trying to comply with the law, including unclear guidance from HCD, staff turnover, and inconsistent guidance regarding what cities must do to comply with the law.
This
measure eliminates the “self-certification” process and gives HCD more power to determine when a city is certified without requiring them to provide detailed findings as to how the local jurisdictions can come into compliance. In addition, AB 1886 fails to provide a grace period for cities acting in good faith but are still unable to meet the statutory deadline for adopting a compliant housing element. (Signed by the Governor) •
AB 2023 (Quirk-Silva) - Housing element: inventory of land: substantial compliance:
rebuttable presumptions.
- Current law, commonly referred to as the Housing Element Law, prescribes requirements for a city’s or county’s preparation of, and compliance with, its housing element, and requires the Department of Housing and Community Development (HCD) to review and determine whether the housing element substantially complies with the Housing Element Law.
This bill will require for the 7th, and each subsequent revision of the housing element, that a local government complete the rezoning of sites within one year of the statutory deadline for the adoption of the housing element or 3 years and 90 days of the statutory deadline if the local government satisfies certain requirements, including submitting a draft element or draft amendment to the department for review within specified timeframes and adopting a draft element or draft amendment that the department finds to be in substantial compliance with the Housing Element Law.
Staff comments: The City opposed this bill which would create challenges for cities and increase the potential of failing to meet their statutory deadline to secure a certified housing element by creating an unnecessary obstacle to meeting the required deadlines. Adding 120 days to the adoption process each time the housing element is amended almost guarantees that housing elements will not be adopted by the statutory deadline. This will prohibit a city from accessing much-needed affordable housing funding and subject them to the “builder’s remedy.” Rather than requiring more review, California cities need meaningful, clear, and consistent direction from HCD that helps finalize local governments’ housing elements and put those plans to work to support much-needed housing construction.
(Signed by the Governor)
•
AB 3093 (Ward) - Land use: housing element: streamlined multifamily housing. –
This bill
will require a city or county to include in the report on the progress in meeting a city’s or county’s share of regional housing need the progress in meeting the need for the 6th and previous revisions of the housing element. Furthermore, the bill defines all income levels or all household income levels, acutely low, extremely low, very low, lower, low, moderate, and above moderate income for purposes of requirements applicable to the housing element and would make related changes.
Staff Comments: The City opposed this bill unless it was amended as it will require local governments to account for the housing needs of people experiencing homelessness in their housing elements without funding to develop the plans, implement strategies, or support the construction of affordable housing.
Specifically, AB 3093 adds two new income categories to the Regional Housing Needs Assessment (RHNA) framework: acutely low-income (ALI) and extremely low-income (ELI). While these new categories are intended to help assess the needs of homeless residents, they fall within the existing very low-income category, which already accounts for the needs of individuals in our cities earning between 0% and 50% of the area median income. (Signed by the Governor)
•
AB 2081 (Davies) - Substance abuse: recovery and treatment program s. - This bill will
require an operator of a licensed alcoholism or drug abuse recovery or treatment facility or certified alcohol or other drug program to include on its internet website and intake form paperwork a disclosure that an individual may check the internet website of the State Department of Health Care Services to confirm whether the facility’s license or program’s certification has been placed in probationary status, been subject to a temporary suspension order, been revoked, or the operator has been given a notice of operation in violation of law. The bill will require the disclosure to include a link to the department’s internet website that contains the Probationary Status, Temporary Suspension Order, Revoked and Notice of Operation in Violation of Law Program List.
The bill will authorize a violation of this requirement to be subject to penalty imposed by the department.
Staff Comments: The City supported this bill which will require a higher standard of transparency and greater protections for individuals seeking alcoholism or substance use treatment. AB 2081 will require the operator of a licensed recovery home to disclose to those seeking care that they can check the Department of Health Care Services website to confirm a facility’s compliance with state licensing laws. This should empower patients to make informed decisions about their care by easily knowing if the entity’s license or certification has been placed on probationary status, been subject to a temporary suspension order, been revoked, or if the operator has been given a notice of operation in violation of the law. (Signed by the Governor) •
AB 2574 - (Valencia) Alcoholism or drug abuse recovery or treatment programs and facilities: disclosures.
- This bill will require a program or a licensed facility to disclose to the department if any of its agents, partners, directors, officers, or owners own or have a financial interest in a recovery residence and whether it has contractual relationships with entities that provide recovery services to clients of certified programs or licensed facilities if the entity is not a part of a certified program or a licensed facility.
Staff Comments: The City supported this bill
for the expanded regulatory requirements for recovery residences. The bill will expand reporting requirements for licensed recovery home operators to enhance the Department of Health Care Services’ oversight of sober living homes that are operating as an integral part of a licensed drug treatment facility located elsewhere in the community.
Residential recovery housing provides a wide range of benefits to some of California’s most vulnerable residents, and it is critical that their needs are prioritized. Compliance with state licensing laws administered through the Department of Health Care Services is essential to safeguarding residents’ well-being and maintaining quality care. (Signed by the Governor)
•
AB 1782 (Ta) - Redevelopment: Successor Agencies: Low and Moderate Income Housing Asset Fund
- Existing law authorizes a housing successor, if it has fulfilled specified obligations regarding the replacement of dwelling units, to expend up to $250,000 per fiscal year for homeless prevention and rapid rehousing services, including the provision of short-term or medium-term rental assistance, contributions toward the construction of local or regional homeless shelters, and housing relocation and stabilization services. This bill will increase the amount that a housing successor may expend on those homeless prevention and rapid rehousing services to $500,000.
Staff comments: The City supported this bill for the additional funding that a successor agency could spend from their Low- and Moderate-Income Housing Asset Fund (LMIHAF) on homelessness prevention and rapid rehousing. Currently, successor agencies are only allowed to spend up to $250,000 per year on these services. This bill will allow cities that have available funds in their LMIHAF accounts to provide more funding to help prevent homelessness and offer essential services to the homeless. The City currently uses its LMIHAF funds toward homeless prevention and rapid rehousing. (Signed by the Governor.)
•
SB 1243 (Dodd) - Campaign Contributions: Agency Officers - The Political Reform Act of
1974 prohibits certain contributions of more than $250 to an officer of an agency by any party, participant, or party or participant’s agent in a proceeding while a proceeding involving a license, permit, or other entitlement for use is pending before the agency and for 12 months following the date a final decision is rendered in the proceeding, as specified. The act requires disclosure on the record of the proceeding, as specified, of certain contributions of more than $250 within the preceding 12 months to an officer from a party or participant, or party’s agent. The act disqualifies an officer from participating in a decision in a proceeding if the officer has willfully or knowingly received a contribution of more than $250 from a party or a party’s agent, or a participant or a participant’s agent, as specified. The act allows an officer to cure certain violations of these provisions by returning a contribution, or the portion of the contribution more than $250, within 14 days of accepting, soliciting, or receiving the contribution, whichever comes latest.
This bill will raise the threshold for contributions regulated by these provisions to $500, as specified. The bill will extend the period during which an officer may cure a violation to within 30 days of accepting, soliciting, or directing the contribution, whichever is latest. The bill specifies that a person is not a “participant” for the purposes of these provisions if their financial interest in a decision result solely from an increase or decrease in membership dues. The bill exempts from these provisions contracts valued under $50,000, contracts between 2 or more government agencies, contracts where no party receives financial compensation, and the periodic review or renewal of development agreements, as specified, from these provisions.
Staff Comments:
The
City supported this bill which is a realistic measure that would raise the threshold for contributions regulated by the Levine Act from $250 to $500. The measure would also extend the time allowed to cure certain violations by returning a contribution from 14 days to 30 days. This change will ensure that the time in which a local official can cure is uniform and allow for enough time to identify and correct a contribution without being penalized. (Signed by the Governor.)
•
AB 98 (Carrillo, Juan and Reyes)
- Planning and zoning: logistics use: truck routes – This bill will limit new or expanded logistics use developments and warehouses on existing and rezoned industrial sites within 900 feet of sensitive receptors (including homes, hospitals, schools, and public recreational areas) unless specific standards are met. The bill will also require all local governments to update their circulation elements logistic use development information, including truck routes, signage, parking, and idling, and would authorize the Attorney General to fine local jurisdictions $50,000 every six months if they are not in compliance.
Staff comments: The City
opposed this gut-and-amend bill that was introduced the last week of legislative session after months of private closed-door negotiations by a working group convened by the authors that excluded city and county associations and other key stakeholders. While the bill intentions are aimed at addressing air quality-related concerns adjacent to warehouse operations, this bill is problematic because it includes stringent requirements that will severely impact the ability for local jurisdictions to site based on unique geographic and community characteristics, and stifles economic and workforce development in their communities. (Signed by the Governor)
Vetoed
Fire
•
AB 1168 (Bennett) Emergency medical services (EMS): prehospital EMS – This bill would
have enhanced the regulation and oversight of prehospital emergency medical services (EMS) in California. It aimed to improve coordination between local EMS agencies and state-level bodies, ensuring consistent and effective emergency medical response across different regions.
Staff
comments: The City supported this legislation as it would have allowed a city or district with ambulance transport rights, and that is part of a Joint Powers Authority (JPA), to retain those rights when withdrawing from the JPA rather than ceding them to the County. While this bill did not directly affect Roseville, it is important to support the ability of public agencies to retain their transport rights when circumstances change. (Vetoed by the Governor.)
Housing/ Homelessness
•
SB 37 (Caballero, D) - Older Adults and Adults with Disabilities Housing Stability Act.
–
This bill would have required the Department of Housing and Community Development to begin developing the Older Adults and Adults with Disabilities Housing Stability Pilot Program as a component of various state programs identified to address homelessness, including the Interagency Council on Homelessness and the Homeless Emergency Aid program for the purpose of providing localities with one-time grant funds to address their immediate homelessness challenges.
Staff comments: The City supported this bill due to the fact that housing has become unaffordable for many people in California, and older adults and adults with disabilities are among those hit the hardest by the affordability crisis. Many of these Californians live on fixed incomes, such as Supplemental Security Income (SSI), which are inadequate to cover rising rents. This bill would have provided a rent subsidy targeted to those older adults and adults with disabilities who are homeless or are at high risk of experiencing homelessness. Such subsidies prevent and end homelessness for thousands of older and disabled adults. Studies show low-income renters accessing housing subsidies can remain housed or exit homelessness for good. (Vetoed by the Governor)
•
AB 1788 (Quirk-Silva) - Mental health multidisciplinary personnel team. - This bill would
have authorized counties to establish mental health multidisciplinary personnel teams with the goal of facilitating the expedited identification, assessment, and linkage of justice-involved persons diagnosed with a mental illness to supportive services within that county while incarcerated and upon release from county jail and to allow provider agencies and members of the personnel team to share confidential information, as specified, for the purpose of coordinating supportive services to ensure continuity of care. The bill would have required the sharing of information permitted under these provisions to be governed by protocols developed in each county and would have required each county to provide a copy of its protocols to the State Department of Health Care Services. The bill would also have required the information or records to be maintained in a manner that ensures the maximum protection of privacy and confidentiality rights.
Staff
comments: The City supported this bill because of the importance of integrating mental health services with the justice system which is recognized as a critical step towards addressing the complex needs of individuals with mental health conditions who find themselves enmeshed in the criminal justice system. By facilitating a collaborative approach among mental health professionals, social services workers, medical personnel, and legal representatives, AB 1788 aimed to ensure that justice-involved persons receive the comprehensive and continuous care necessary for their rehabilitation and reintegration into society. (Vetoed by the Governor)
•
AB 3068 (Haney) - Adaptive reuse: streamlining: incentives.
– This bill would have deemed
an adaptive reuse project a use by right in all zones, regardless of the zoning of the site, and subject to a streamlined, ministerial review process if the project met specified requirements. In this regard, an adaptive reuse project, to qualify for the streamlined, ministerial review process, would be required to be proposed for an existing building that is less than 50 years old or meets certain requirements regarding the preservation of historic resources. The bill would have required an adaptive reuse project to meet specified affordability, specifically for rental housing to include either 8% of the unit for very low-income households and 5% of the units for extremely low income households or 15% of the units for lower income households.
Staff comments: The City
supported this bill that would have presented an opportunity to help address the state’s significant housing shortfall. Adaptive reuse offers a reasonable solution to repurpose vacant commercial buildings for residential and mixed-use purposes. This not only stimulates economic development but also serves as an alternative to new construction. (Vetoed by the Governor)
Emergency Regulations to Ban THC-Containing Products
In early September, Governor Newsom issued proposed emergency regulations prohibiting intoxicating hemp products and imposing other requirements for manufacturing and selling non-intoxicating hemp products. The regulations will essentially bring the sale of legal hemp products more in line with restrictions currently seen for adult-use marijuana, including limitations on serving and package sizes and establishing a minimum age to legally purchase industrial hemp food, beverage, and dietary products. The regulations, proposed by the California Department of Public Health (CDPH), strengthen California’s ability to stop the peddling of intoxicating hemp products to California’s children. The new regulations require that industrial hemp food, beverage, and dietary products intended for human consumption have no detectable THC or other intoxicating cannabinoids per serving, create a minimum age to purchase hemp products to 21, and limit the number of servings of hemp products to five per package.
Electric Department
The following is an overview of energy-related legislation and other activities that staff has been following throughout this legislative session. The California Legislature recently ended the second year of the 2023-2024 legislative session. September 30 was the last day for the governor to sign or veto bills passed by the legislature.
The Governor signed 53 energy bills and vetoed 18 bills that the electric department staff had been monitoring.
The electric department tracked over 150
bills during this year’s legislative session.
State Legislation - NEW LAWS:
•
AB 1465 (Wicks) Nonvehicular air pollution: civil penalties . - This bill allows the California
Attorney General or an air district to triple the penalties for air pollution violations if a Title V source emits one or more specified air contaminants in violation of its Title V permit.
Staff comments:
The Legislature has introduced several bills like this over the years, with this concept finally passing the legislature this year.
The Roseville Energy Park is a Title V source
that could be impacted by these penalties if in violation of its Title V permit.
The City’s
goal is to follow all the conditions of our permits. Importantly, there was a letter submitted to the journal that indicates AB 1465 “does not affect existing procedures and law regarding enforcement discretion, variances, or state or federal emergency declarations that may be employed to address the need to operate power plants in excess of permitted emissions levels in order to maintain reliability of the electric grid.” This is an important clarification in the case of declared emergencies for electric grid reliability. (Signed by the Governor)
•
AB 1921 (Papan) Energy: Renewable Electrical Generation Facilities: Linear Generators.
- This bill would revise the definition of “renewable electrical generation facility” to include a facility that uses linear generators that use fuels that meet the existing requirements of the Renewable Portfolio Standard (RPS), including fuel source and delivery method requirements.
Traditional energy production relies on rotational motion, usually the spinning of a turbine; however, linear generators use back-and-forth motion to create electricity.
Staff
comments: The RPS program has historically been challenging to amend in terms of adding new eligible resources.
The department is supportive of additional RPS eligible resources that can be used to meet state energy goals. (Signed by the Governor)
•
AB 2037 (Papan) Weights and measures: electric vehicle chargers. - This bill would
authorize a county sealer to test and verify as correct any electric vehicle charger operated by a public agency, that is in the county in which the sealer has jurisdiction.
The bill would require a
county sealer, upon testing and finding that an electric vehicle charger operated by a public agency is incorrect, to designate a charger with the words “out of order” and require the charger to be repaired or corrected within 30 days.
A county sealer may levy penalties against a public agency, or a related vendor contracted by the public agency, that removes or obliterates a tag or device placed by a sealer on an electric vehicle charger operated by the public agency.
The bill would
also authorize a county board of supervisors, by ordinance, to charge an annual registration fee for the cost of inspecting and testing an electric vehicle charger.
If a public agency owns an electric
vehicle charger and leases the electric vehicle charger to another entity that operates the electric vehicle charger commercially, the entity that operates the electric vehicle charger commercially shall be the entity responsible for compliance. The bill provides for a publicly owned electric utility to elect to conduct these inspections on their own if they meet certain specifications and conduct the inspections every 6 months.
Staff comments:
The City supports maintaining accurate
operations of electric vehicle chargers.
It is not anticipated at this time that Roseville
Electric would elect to conduct these inspections in place of the county sealer.
The
department is comfortable with the county sealers completing this task. (Signed by the
Governor)
•
AB 3264 (Petrie-Norris) Energy: cost framework: residential rates: demand-side management programs report: electrical transmission grid study. - This bill requires the
CPUC, in consultation with the California Energy Commission (CEC) to develop a framework for assessing, tracking, and analyzing total annual energy costs paid by residential households in California, by December 31, 2026.
It also authorizes the CPUC to use the framework for
purposes of evaluating any request by an electrical corporation and gas corporation to track new spending eligible for recovery or to adjust a revenue requirement.
The bill requires large electrical
corporations, and large gas corporations, to publish – by January 1, 2026, and each year thereafter – a visual representation of certain cost categories included in residential electric or gas rates for the succeeding calendar year.
In addition, AB 3264 requires the CPUC, in consultation with the CEC, the California Infrastructure and Economic Development Bank (I-Bank), and the California Independent System Operator (CAISO) to submit to the Governor and the Legislature, by July 1, 2025, a study identifying proposals to reduce the cost to ratepayers of expanding the state's electrical transmission grid as necessary to achieve the state's goals, to meet the state's requirements, and to reduce the emissions of greenhouse gases (GHGs), as specified in law, regulation, or executive order.
Staff comments: This bill requires an itemized accounting of many energy cost categories for electrical and gas corporations.
While not applicable
to POUs, the department was tracking this bill to identify any potential implications to POUs in the future.
There was an interest in studying the issue of rising energy bills in the legislature this year and staff expects similar topics to be discussed next year. This study bill is the first step in that process.
Although this bill does not directly impact
POUs, staff will monitor any electric utility requirements that may come out of these studies.
(Signed by the Governor)
•
SB 867 (Allen) Safe Drinking Water, Wildfire Prevention, Drought Preparedness, and Clean Air Bond Act of 2024.
- This measure would place a bond on the November 2024 ballot providing funding for climate resilience projects, including $3.8 billion for safe drinking water, recycled wastewater, stored groundwater, and flood control.
The measure allocates $1.5 billion to
be spent on wildfire protection.
There is an additional $850 million for clean energy projects; with more than half of this money to support the development of offshore wind generation ($475 million). Most of the remaining money would pay for building infrastructure such as transmission lines to carry electricity long distances ($325 million). There is also $50 million earmarked for projects to build large batteries that store electricity.
Staff comments:
The Electric Department
was tracking this bill with regards to energy infrastructure and the availability of related funds.
EU was tracking this legislation due to the funding available for groundwater storage, banking, recharge, and conjunctive use projects.
AB 867 was signed by acting
Governor Mike McGuire on July 3, and will now appear on the November 2024 ballot as Proposition 4. The state constitution requires a bond act to be approved by a 2/3 vote of each house of the Legislature and a majority of the voters. (Signed by the Governor)
•
SB 1210 (Skinner) New housing construction: electrical, gas, sewer, and water service:
service connection information.
- This bill would, for new housing construction, require electrical, gas, sewer, and water utilities on or before January 1, 2026, to publicly post on their internet websites the schedule of estimated fees for typical service connections for each housing development type, including, but not limited to, accessory dwelling unit, mixed-use, multifamily, and single-family developments.
The utility must also post the estimated timeframes for completing typical service connections needed for each housing development type, including, but not limited to, accessory dwelling unit, mixed-use, multifamily, and single-family developments.
Staff
comments: The Electric Department was watching this bill for proposed impacts on our interconnection fees, which ultimately was amended out of this legislation. The department supports transparency regarding fees and timelines for utility connections.
The bill appears to have minor impacts to the Electric Department in terms of meeting the requirements of this legislation; however, may require additional information on our website related to defined timelines for interconnection. (Signed by the Governor) •
SB 1251 (Stern) Mosquito abatement inspections.
- This bill would require an electrical
utility, upon receiving a request from a mosquito abatement district, vector control district or a city or county health department, to enter into a vector management agreement with the requesting agency within 180 days. The requesting agency may seek a vector management agreement with an electric utility, if efforts to obtain voluntary cooperation agreement from the electric utility have failed.
The bill would require the agreement to include the location of electrical vaults that the electric utility, mosquito abatement district, or vector control district reasonably believe, due to the type or location of the vault, may contain standing water within the jurisdiction of the district or health department.
The agreement shall also contain a reasonable time-period for the electric utility to provide supervised access to its electrical vaults for surveillance, treatment, and post- treatment inspections. The agreement shall also include consideration where feasible of modifications to electrical vaults for the purposes of mosquito exclusion or discharge of captured water.
The bill would require a mosquito abatement district, vector control district, or local public health department to keep utility infrastructure data that it receives pursuant to an agreement confidential. Data disclosed by the utility may be limited to the affected geographical area identified by the mosquito abatement district, vector control district, or health department, and disclosed in a manner deemed as a best practice by the utility for the safety and security of public utility infrastructure.
A minimum term for the agreement is three years. An electric utility that has an existing agreement is not subject to these provisions for as long as that agreement is in effect.
Staff comments:
Staff worked with our trade associations to limit the applicability of this bill to apply only to locations of electrical vaults where there is reasonable belief that there is standing water.
Also, amendments were included in the bill to keep utility infrastructure data provided to the districts confidential.
This bill sets up a process for a
formal agreement in the case that a voluntary agreement cannot be reached.
This bill
does not mandate a specific inspection schedule, or how they should be done, and no penalties are included in the legislation.
The goal is to have a voluntary working
agreement.
Historically, the utility has not received requests from the respective agencies to do these types of inspections of our electrical vaults. (Signed by the Governor)
•
SB 1420 (Caballero) Hydrogen production facilities; certification and environmental review.
- The bill would include hydrogen production facilities and associated onsite storage and processing facilities that do not derive hydrogen from a fossil fuel feedstock and that receive funding from specified state and federal programs within the definition of an “energy infrastructure project.”
These same hydrogen production facilities and associated onsite storage and processing facilities, would also be eligible to be certified as environmental leadership development projects by the California Energy Commission (CEC) and eligible for streamlining benefits related to the California Environmental Quality Act (CEQA).
Staff Comments:
The
Electric Department supports additional types of power resources, such as hydrogen, to meet the State’s goals. The department encourages new hydrogen laws to be flexible so that utilities can use these resources affordably to meet their clean energy needs.
Hydrogen may play a key role in reducing California’s emissions. (Signed by the
Governor)
State Legislation - VETOED:
•
AB 1834 (Garcia) Resource adequacy: Electricity Supply Strategic Reliability Reserve Program.
-
This bill, as it pertains to Roseville, allows a POU to use an alternative mechanism, rather than a nonbypassable charge, to pay its share of voluntary procurement from the Department of Water Resources (DWR) central procurement entity (CPE).
It would also prohibit
DWR from adding any costs to a nonbypassable charge in excess of the cost to the POU to participate in the CPE.
Staff Comments: This bill creates more flexibility in relation to participation in DWR’s CPE process for POUs.
The City currently does not voluntarily
participate in DWR’s CPE.
However, we support more flexibility in the case that we might want to use this mechanism sometime in the future.
The Governor vetoed AB
1834 indicating that it is premature to make changes to the Central Procurement Function at this time given that the CPUC only recently initiated use of this function.
•
AB 3179 (Carrillo) Emergency telecommunications medium- and heavy-duty zero- emission vehicles.
- This bill would, until January 1, 2030, exempt emergency telecommunications vehicles, defined as a bucket truck or a cell on wheels unit, from the California Air Resources Board’s (CARB) Advanced Clean Fleets (ACF) Regulations designed to transition medium- and heavy-duty fleets to zero-emission vehicles (ZEV).
AB 3179 applies to emergency
telecommunications vehicles owned or purchased by emergency telecommunications providers that are required to participate in the federal Emergency Alert System, to provide access to 911 emergency services, or to provide wireless connectivity during service outages.
Staff comments:
Although this bill only exempts defined telecommunication vehicles, this bill continues to highlight the need for exemptions for vehicles that are used to restore outages, like electric utility vehicles that are used to restore power. The City encourages more flexibility from the CARB ACF Rule.
The Governor vetoed this bill, asserting that this
legislation would undermine the efforts of a previous executive order to accelerate the electrification of the transportation sector to meet state emission reduction goals. •
SB 1292 (Bradford) Electricity: fixed charges: report.
-
Existing law required the California
Public Utilities Commission (CPUC), no later than July 1, 2024, to authorize a fixed charge for default residential rates on an income-graduated basis.
This bill would require the CPUC, on or
before January 1, 2028, but no sooner than 2 years after the adoption of the income-graduated fixed charge for residential rates, to submit a report to the Legislature on the electrical corporations’ implementation of the fixed charge.
The bill would also prohibit the CPUC from
authorizing a new residential fixed charge other than those authorized before July 1, 2024, until 30 days after the report is submitted.
Staff Comments: This bill did not have any applicability to POUs; however, staff is watching the broader discussion on changes to how rates are determined for any potential applicability to our POU processes.
The Governor vetoed
this bill because of concern about placing unwarranted limitations to the CPUC’s authority to adjust the income-graduated fixed charge (IGFC) once fully enacted.
In
addition, the veto message referenced that the CPUC already has an evaluation process embedded for the IGFC.
Environmental Utilities
This year the Environmental Utilities Department (EU) tracked approximately 216 bills that had the potential to impact the operations of our Water, Wastewater and Waste Services Utilities. Out of the 216 measures, staff actively engaged on 17 bills.
Staff participated in industry workgroups,
crafted, and proposed amendments to legislation, wrote letters and provided testimony in legislative committees to advance Roseville’s interests. In total, EU supported eleven (11) bills of which five (5) were signed into law, one (1) was vetoed and five (5) failed to make it to the Governor’s desk.
Additionally, EU opposed seven (7) bills which Roseville was able to move to a support position on one (1) bill, neutral on three (3) bills, two (2) failed to make it to the Governor’s desk and only one (1) bill that we opposed was signed into law.
The following bills were previously shared with the Law and Regulation Committee and have either been signed into law or vetoed by the Governor.
New Laws
•
AB 460 (Bauer-Kahan) State Water Resources Control Board: water rights and usage:
civil penalties.
- This bill provides increasing penalties for certain water rights violations, including illegal diversions.
Staff Comments: The City supported AB 460 which was heavily opposed by the water industry when it was first introduced. However, amendments taken by the author narrowed the bill to focus on increasing penalties for violations of water rights to serve as a deterrent for illegal diversions.
Roseville does not have water rights of our
own, however we do contract with the Placer County Water Agency (PCWA) which does.
Roseville engaged on this measure through our associations in coordination with PCWA. (Signed by the Governor)
•
AB 1820 (Shiavo) Housing development projects: applications: fees and exactions
-This
bill authorizes a development proponent that submits a preliminary application for a housing development project to request a preliminary fee and exaction estimate from cities, counties, special districts and schools. Additionally, after an application is approved and is eligible to pull building permits, it requires all local agencies to provide the development proponent with a total sum amount of all fees and exactions that will apply to the project with 30 business days of a request. The total sum is a good faith estimate, is for informational purposes only, and is not legally binding on the agency.
Staff Comments: The City moved to a neutral position when the author accepted amendments that removed connection fees and capacity charges.
On our website, Roseville already provides a list of fees and worksheets for residential, commercial, and multi-family developers to estimate the fees for their proposed development and staff are readily available to help developers and homeowners should they have questions.
The City updates the fee booklets annually and throughout the year should changes to fees or rates occur, so that developers have the most up-to-date information.
(Signed by the Governor)
•
AB 1827 (Papan) Local government: fees and charges: water: high consumptive water parcels
- This bill provides that the fees or charges for property-related water service imposed or increased, may include the incrementally higher costs of water service due to factors like the higher water usage demand of parcels.
Staff Comments: The City watched this measure as
it reaffirms the ability of water agencies to use reasonable and well-accepted methods of assessing the incremental costs associated with higher water usage demands to high water users under Proposition 218. (Signed by the Governor) •
AB 2196 (Connolly) Beaver restoration
- Subject to an appropriation, this bill requires the
Department of Fish and Game to develop a program to promote beaver restoration across California by revising policies relating to beavers, coordinating restoration efforts, mitigating any human-beaver conflict, and relocating beavers into watersheds.
Staff Comments:
The City was
able to move from an oppose-unless-amended position to neutral on this bill after amendments were accepted to include local governments as beaver restoration program partners.
Now local agency representatives will have the ability to provide input on appropriate beaver restoration areas. (Signed by the Governor) •
AB 2257 (Wilson) Local government: property-related water and sewer fees and assessments: remedies
- The California Constitution specifies various requirements with respect to the levying of assessments and property-related fees and charges by a local agency, including notice, hearing, and protest procedures, depending on the character of the assessment, fee, or charge. Current law, known as the Proposition 218 Omnibus Implementation Act, prescribes specific procedures and parameters for local jurisdictions to comply with these requirements. If a local agency complies with specified procedures, this bill prohibits a person or entity from bringing a judicial action or proceeding alleging noncompliance with the constitutional provisions for any new, increased, or extended fee or assessment, unless that person or entity has timely submitted to the local agency a written objection to that fee or assessment that specifies the grounds for alleging noncompliance. This bill allows local agency responses, to the timely submitted written objections, shall be considered as evidence supporting the agency’s compliance with the substantive limitations on fees and assessments. The bill also prohibits an independent cause of action as to the adequacy of the local agency’s responses.
Staff Comments: The City
supported AB 2257, which was sponsored by the Association of California Water Agencies, ensures there is transparency and dialogue among water and wastewater utilities and their customers in the rate setting process, particularly when it comes to allegations involving Proposition 218.
(Signed by the Governor)
•
AB 2515 (Papan) Menstrual products: perfluoroalkyl and polyfluoroalkyl substances (PFAS)
- This act, known as the Take All Menstrual Products-PFAS Out Now (TAMPON Act), prohibits a manufacturer from intentionally adding PFAS into a menstrual product beginning January 1, 2025. Additionally, beginning January 1, 2027, the presence of PFAS contained in a menstrual product cannot exceed a limit that will be determined by the Department of Toxic Substances Control (DTSC) through the regulatory process.
Staff Comments: Given the
proliferation of PFAS in so many products and textiles and the growing health and regulatory concerns, the City took a proactive approach by supporting source-control legislation. The presence of PFAS in products has the potential to affect each of the utilities as a passive receiver.
This is concerning as ratepayers will end up having to
pay for their removal and proper disposal. (Signed by the Governor) •
SB 707 (Newman) Responsible Textile Recovery Act of 2024
- This bill enacts an Extended
Producer Responsibility (EPR) stewardship program known as the Responsible Textile Recovery Act of 2024.
The program requires a producer of apparel or textile articles (e.g. footwear, bags and other knitted and accessories), to form and join a producer responsibility organization (PRO) and to submit a complete plan for the collection, transportation, sorting, recycling, and the safe and proper management of textiles in the state. Additionally, this bill requires the Department of Resources Recycling and Recovery (CalRecycle) to adopt regulations to implement this program with an effective date of no earlier than July 1, 2028.
Staff Comments: The City supported this
measure throughout the two-year session as it aligns with the City’s Council Resolution 10-278 that supports the creation of EPR programs to address the proper disposal and recycling of products.
The California Product Stewardship Council (CPSC) sponsored SB 707. Roseville participated in the coalition supporting this bill that is to help shift the costs for the proper disposal of products onto the producers of the products versus being borne by Roseville’s ratepayers. (Signed by the Governor) •
SB 937 (Weiner) Development projects: fees and charges
- The Mitigation Fee Act
regulates fees for development projects, fees for specific purposes, including water and sewer connection fees, and fees for solar energy systems, among others. The act requires local agencies to comply with various conditions when imposing fees, extractions, or charges as a condition of approval of a proposed development or development project. The act prohibits a local agency that imposes fees or charges on a residential development for the construction of public improvements or facilities from requiring the payment of those fees or charges until the date of the final inspection or the date the certificate of occupancy is issued, whichever occurs first, except for utility service fees, which the local agency is authorized to collect at the time an application for utility service is received. This bill limits the utility service fees exception described above to utility service fees related to connections and caps those fees at the costs incurred by the utility provider resulting from the connection activities.
Staff Comments: Based on
amendments accepted by the author that removed connection and capacity charges from the bill, EU moved to a neutral position back in the spring.
Unfortunately, on
August 22, the author accepted amendments which could be interpreted to create a new legal standard for imposing these connection fees under Section 6 of the Government Code.
The City submitted a veto request to the Governor and joined a coalition led by the California Association of Sanitation Agencies (CASA). (Signed by the Governor) •
SB 1143 (Allen) Paint products: stewardship program
- This bill expands the architectural
paint recovery program within CalRecycle to include and expanded list of paint products.
Manufacturers and stewardship organizations will be required to develop and implement a stewardship plan for the proper end-of-life management of these new paint products that include coatings, aerosol coating products, nonindustrial coatings, and coating-related products.
Current
collection locations can accept all new covered paint products if the location is currently established under a stewardship plan approved by CalRecycle.
Staff Comments: This is
another measure that aligns with the City’s Council Resolution 10-278, which supports a comprehensive Extended Producer Responsibility (EPR) law that allocates end-of-life disposal costs with the producers of products that end up in the solid waste stream.
Roseville submitted advocacy letters supporting this measure. (Signed by the Governor)
•
SB 1210 (Skinner) New housing construction: electrical, gas, sewer, and water service:
service connection information
- For new housing construction, this bill requires utilities to post on their internet website a fee schedule for service connections for various housing developments by January 1, 2026. Additionally, utilities must post an estimated timeframe for completing typical service connections for the different types of housing developments.
Staff Comments: The City
was able to move from an oppose-unless-amended position to a neutral position when amendments taken removed a cap on fees for utility service.
EU already posts a fee
schedule on our website for housing developers to refer to in order to ensure transparency. (Signed by the Governor)
Vetoed Bills
•
AB 2214 (Bauer-Kahan) Ocean Protection Council: microplastics - This bill would have
required the Ocean Protection Council (OPC) to establish and lead an interagency coordination group tasked with making recommendations to the Legislature on statutory changes needed to implement recommendations from the 2022 Statewide Microplastics Strategy, published by the OPC, by December 31, 2025. The focus of the recommendations would have been on the sale and use of ENERGY STAR washers and dryers and to determine what other states have achieved when it comes to biodegradable standards.
Staff Comments: Over the years we
have seen legislation aimed at mandating certain types of filters being added to washing machines to help prevent microplastics from entering the wastewater stream.
EU watched this bill so that we could be well informed and aware of potential future legislation. (Vetoed by the Governor)
•
SB 366 (Caballero) The California Water Plan: Long-term Supply Targets - This bill would
have proposed updates to the contents of the California Water Plan, which requires the Department of Water Resources (DWR) to develop a comprehensive, strategic plan for the sustainable and equitable management and stewardship of California’s water resources.
SB 366
would have set an interim water supply planning target, starting with the 2028 update, of achieving 9,000,000 acre-feet of additional water capacity by 2040.
It also would have required the 2033
update to include updated water supply planning targets with a 50-year planning horizon to ensure the future water needs of the state are met.
Staff Comments: The California Municipal
Utilities Association (CMUA) sponsored this measure as an effort to meet the State’s water needs in the future.
The City supported this all-of-the-above approach that focused on various water supply management strategies to help combat the impacts of climate change, rather than solely relying on conservation efforts. (Vetoed by the Governor)
FISCAL IMPACT
The costs of these activities are contained within the City’s current budget.
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. This action meets the above criteria and is not subject to CEQA. No additional environmental review is required.
CITY COUNCIL STRATEGIC PLAN/OVERARCHING GOALS
Goal B - Support community engagement and advocacy
Respectfully Submitted,
Mark Wolinski, Government Relations Administrator
Megan Scheid, Deputy City Manager
_____________________________
Dominick Casey, City Manager
COUNCIL COMMUNICATION
CC #:
3645
File #:
0201
Title:
Tax and Equity Fiscal Responsibility Act Hearing - Crawford Project Contact:
Jeannine Thrash 916-774-5743 [email protected]
Dennis Kauffman 916-774-5313 [email protected]
Meeting Date: 11/20/2024
Item #: 9.1.
RECOMMENDATION TO COUNCIL
Staff recommends that the City Council take the following actions:
1) Conduct the public hearing under the requirements of the Tax and Equity Fiscal Responsibility Act ("TEFRA") and the Internal Revenue Code of 1986, as amended (the "Code").
2) Adopt a Resolution of the City Council of the City of Roseville approving a plan of finance including the issuance of revenue bonds by the California Municipal Finance Authority ("CMFA") in an aggregate outstanding principal amount not to exceed $75,000,000 to finance and refinance the acquisition, construction, improvement and equipping of a qualified residential rental project for the benefit of Roseville Harvey 715, L.P., a California Limited Partnership (or an affiliate), and certain other matters relating thereto.
BACKGROUND
The Borrower requested that the CMFA serve as the municipal issuer of the Bonds in an aggregate principal amount not to exceed $75,000,000 (the “Bonds”) of tax-exempt revenue bonds. The proceeds of the Bonds will be used to finance and refinance the acquisition, construction, development and equipping of a 265-unit qualified residential rental project, the Crawford (the “Project”), to be owned and operated by the Borrower and to be located at 1130 Harvey Way within the City of Roseville.
In order for the Bonds to qualify as tax-exempt bonds, the City of Roseville must conduct a public hearing (the “TEFRA Hearing”) providing for the members of the community an opportunity to speak in favor of or against the use of tax-exempt bonds for the financing of the Project. Prior to such TEFRA Hearing, reasonable notice must be provided to the members of the community.
Following the close of the TEFRA Hearing, an “applicable elected representative” of the governmental unit hosting the Project must provide its approval of the issuance of the Bonds for the financing of the Project.
California Municipal Finance Authority
The CMFA was created on January 1, 2004 pursuant to a joint exercise of powers agreement to promote economic, cultural and community development, through the financing of economic development and charitable activities throughout California. To date, over 200 municipalities have become members of CMFA.
The CMFA was formed to assist local governments, non-profit organizations and businesses with the issuance of taxable and tax-exempt bonds aimed at improving the standard of living in California. The CMFA’s representatives and its Board of Directors have considerable experience in bond financings.
The Bonds to be issued by the CMFA for the Project will be the sole responsibility of the Borrower, and the City will have no financial, legal, moral obligation, liability or responsibility for the Project or the repayment of the Bonds for the financing of the Project. All financing documents with respect to the issuance of the Bonds will contain clear disclaimers that the Bonds are not Bonds of the City or the State of California but are to be paid for solely from funds provided by the Borrower.
Participation by the City in the CMFA does not impact the City's appropriation limits and will not constitute any type of indebtedness by the City. Outside of holding the TEFRA hearing and adopting the required resolution, no other participation or activity of the City or the City Council with respect to the issuance of the Bonds will be required.
FISCAL IMPACT
The Board of Directors of the California Foundation for Stronger Communities, a California non- profit public benefit corporation (the “Foundation”), acts as the Board of Directors for the CMFA.
Through its conduit debt issuance activities, the CMFA shares a portion of the issuance fees it receives with its member communities and donates a portion of these issuance fees to the Foundation for the support of local charities. With respect to Roseville, it is expected that 25% of the issuance fee, or approximately $20,700 will be granted by the CMFA to the General Fund of the City. Such grant may be used for any lawful purpose of the City.
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 to issue tax-exempt bond financing meets this criteria and is not subject to CEQA. In addition, environmental review for The Crawford project was previously completed in the West Roseville Specific Plan EIR (certified February 14, 2004, SCH# 2002082057) and is independent of this particular action. No additional environmental review is required.
CITY COUNCIL STRATEGIC PLAN/OVERARCHING GOALS
Goal A - Remain fiscally responsible in a changing world
Respectfully Submitted,
Jeannine Thrash, Management Analyst
Dennis Kauffman, Assistant City Manager/Chief Financial Officer
_____________________________
Dominick Casey, City Manager
ATTACHMENTS:
Description
Resolution 24-392
Notice of Public Hearing
RESOLUTION NO. 24-392
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ROSEVILLE
APPROVING A PLAN OF FINANCE INCLUDING THE ISSUANCE OF
REVENUE BONDS BY THE CALIFORNIA MUNICIPAL FINANCE
AUTHORITY IN AN AGGREGATE OUTSTANDING PRINCIPAL
AMOUNT NOT TO EXCEED $75,000,000 TO FINANCE AND REFINANCE
A QUALIFIED RESIDENTIAL RENTAL PROJECT FOR THE BENEFIT
OF ROSEVILLE HARVEY 715, L.P., A CALIFORNIA LIMITED
PARTNERSHIP (OR AN AFFILIATE), AND CERTAIN OTHER
MATTERS RELATING THERETO
WHEREAS, USA Properties Fund, Inc. (the “Sponsor”), on behalf of Roseville Harvey 715, L.P., a California limited partnership, or another ownership entity to be created by the Sponsor or an affiliate of the Sponsor (such limited partnership or other ownership entity being referred to herein as the “Borrower” ), has requested that the California Municipal Finance Authority (the “Authority”) undertake a proposed plan of finance that includes the issuance and reissuance from time to time of one or more series of revenue bonds in an aggregate principal amount not to exceed $75,000,000 (the “Bonds”) to finance and refinance the acquisition, development, construction and equipping of a 265 -unit qualified residential rental project (the “Project”) to be owned and operated by the Borrower and to be located at 1130 Harv ey Way within the City of Roseville, California (the “City”); and
WHEREAS, an “applicable elected representative” of the jurisdiction in which the Project is to be located is required to approve the proposed plan of finance for the Project under Section 147(f) of the Internal Revenue Code of 1986, as amended (the “Code”); and
WHEREAS, the City Council of the City (the “City Council”) is the elected legislative body of the City and is an “applicable elected representative” for purposes of Section 147(f) of the Code; and
WHEREAS, the Authority has requested that the City Council approve the proposed plan of finance for the Project in order to satisfy the public approval requirement of Section 147(f) of the Code and the requirements of Section 4 of the Joint Exercise of Powers Agreement Relating to the California Municipal Finance Authority, dated as of January 1, 2004 (the “Agreement”), among certain local agencies, including the City; and
WHEREAS, pursuant to Section 147(f) of the Code, the City Council has, following notice duly given, held a public hearing regarding the issuance of the Bonds and now desires to approve the proposed plan of finance for the Project;
NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Roseville, California, as follows:
Section 1. The foregoing recitals are true and correct.
Section 2. The City Council hereby approves the proposed plan of finance for the Project that includes the issuance and reissuance from time to time of one or more series of revenue bonds in an outstanding principal amount not to exceed $75,000,000. It is the purpose and intent of the City Council that this Resolution constitute approval of the proposed plan of finance for the Project for the purposes of (a) Section 147(f) of the Code by the applicable elected representative of a governmental unit having jurisdiction over the area in which the Project is to be located, in accordance with said Section 147(f) and (b) Section 4 of the Agreement.
Section 3. The issuance of the Bonds shall be subject to the approval of the Authority of all financing documents relating thereto to which the Authority is a party. The City shall have no responsibility or liability whatsoever with respect to the Bonds.
Section 4. The adoption of this Resolution shall not obligate the City or any department thereof to (i) provide any financing to acquire or construct the Project or any refinancing of the Project; (ii) approve any application or request for or take any other action in connection with any planning approval, permit or other action necessary for the acquisition, construction, rehabilitation, installation or operation of the Project; (iii) make any contribution or advance any funds whatsoever to the Authority; or (iv) take any further acti on with respect to the Authority or its membership therein. The City Council expressly conditions its approval of this Resolution on its understanding that the City shall have no obligation whatsoever to pay any principal, interest, fees or any other costs associated with the Authority’s issuance of the Bonds for the financing of the Project.
Section 5. The officers of the City are hereby authorized and directed, jointly and severally, to do any and all things and to execute and deli ver any and all documents which they deem necessary or advisable in order to carry out, give effect to and comply with the terms and intent of this resolution and the financing transaction approved hereby.
Section 6. The City Clerk shall forward a certified copy of this Resolution to the Authority in care of its counsel:
Ronald E. Lee, Esq.
Jones Hall, APLC
475 Sansome Street, Suite 1700
San Francisco, CA 94111
Section 7. This Resolution shall take effect immediately upon its adoption.
PASSED AND ADOPTED by the City Council of the City of Roseville, California, this day of , 2024.
AYES:
NOES:
ABSTAIN:
ABSENT:
[SEAL]
Mayor
ATTEST:
City Clerk
NOTICE OF PUBLIC HEARING
NOTICE IS HEREBY GIVEN that on November 20, 2024, a public hearing as required by Section 147(f) of the Internal Revenue Code of 1986 will be held with respect to a proposed plan of finance that includes the issuance and reissuance from time to time, by the California Municipal Finance Authority (the “Authority”), of one or more series of revenues bonds in an outstanding principal amount not to exceed $ 75,000,000 (the “Bonds”) to finance and refinance the acquisition, construction, development and equipping of a 265-unit qualified residential rental project located at 1130 Harvey Way, on a n approximately 11-acre site east of Fiddyment Road, west of Oakbriar Circle and south of the Pleasant Grove Creek Trail (the “Project”), in the City of Roseville, California (the “City”). The Project is to be owned and operated by Roseville Harvey 715, L.P., a California limited partnership (the “Borrower”) , or another ownership entity to be created by USA Properties Fund, Inc. (the “Sponsor”), or an affiliate of the Sponsor (such limited partnership or other ownership entity, the “Borrower”).
The Bonds and the obligation to pay principal thereof and interest thereon and any redemption premium with respect thereto do not constit ute indebtedness or an obligation of the City, the Authority, the State of California or any political subdivision thereof, within the meaning of any constitutional or statutory debt limitation, or a charge against the general credit or taxing powers of any of them. The Bonds shall be limited obligations of the Authority, payable solely from certain revenues duly pledged therefor and generally representing amounts paid by the Borrower.
The public hearing will commence at 6:00 p.m., or as soon thereafter as the matter can be heard, as part of the open session of the City Council meeting in the Council Chambers, 311 Vernon Street, Roseville, California. Interested persons wishing to express their views on the proposed plan of finance or on the nature and location of the facilities proposed to be financed may attend the hearing or, prior to the time of the hearing, submit written comments.
Additional information concerning the above matter may be obtained from, and written comments should be addressed to, Roseville City Clerk, 311 Vernon Street, Roseville, California 95678.
Dated:
COUNCIL COMMUNICATION
CC #:
3640
File #:
0800-03
Title:
Electric Backbone Mitigation Fee - Roseville Municipal Code Amendment Contact:
Joanna Cucchi 916-746-1609 [email protected]
Meeting Date: 11/20/2024
Item #: 9.2.
RECOMMENDATION TO COUNCIL
Staff recommends that the City Council introduce an ordinance for first reading, approving amendments to the Roseville Municipal Code regarding the Electric Backbone Mitigation Fee.
BACKGROUND
The Electric Backbone Mitigation Fee, paid by developers, recuperates the City's expenses associated with constructing and enhancing the electric backbone system. This system encompasses substations and high-voltage lines essential for delivering electricity to all customers. As outlined in Municipal Code Chapter 4.54, the fee aims to equitably distribute the costs of electric system infrastructure among those who necessitate its development, ensuring that neither ratepayers nor the General or Electric funds subsidize new development.
The City engaged the services of EES Consulting, an electric utility consultant, to conduct a comprehensive study of the existing backbone fee. The analysis conducted by EES considered the current Capital Improvement Project (CIP) expenses associated with the backbone system that are eligible for recovery, as well as the projected development outlined in the City's specific plans once fully realized.
A comparable study was last conducted in 2018. Since then, there have been notable changes in Roseville Electric's projected CIP expenses and anticipated customer base upon completion of specific plans. Moreover, the significant inflation and rise in construction costs observed in recent years necessitate an adjustment to the backbone fees. According to the updated analysis, for residential development, the Electric Backbone Mitigation Fee for single-family and multi-family units is expected to increase by approximately $82 and $58 per unit, respectively.
The proposal
for residential backbone fees represents a 16% increase over the current fee. This is an increase of approximately 4% per year since the last backbone fee adjustment in 2020.
For all commercial and industrial developments, the backbone fee for a new building is determined based on the service panel rating, measured in kilo-volt amps (kVA). Under this proposal, the Electric Backbone Mitigation Fee will increase by approximately $6 per kVA. To provide context, with this adjustment, the backbone fee for a restaurant/office building with 3- phase service and a 1200-amp panel would increase by approximately $2,000.
The percentage
increase for commercial developments is 6% per kVA.
The proposed Backbone Fee increase was presented to the Roseville Public Utilities Commission on October 22, 2024. The Commission voted to recommend that the City Council adopt the fee increase proposal.
FISCAL IMPACT
The proposed fee adjustments will result in approximately $600,000 in additional revenue in connection and impact fees over the next 5 years. The proposed change aligns the revenues collected from developers with the costs of operating the utility to maintain financial strength and stability, consistent with City Council priorities.
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. Approval of amendments to the Roseville Municipal Code meet the above criteria and are not subject to CEQA. No additional environmental review is required.
CITY COUNCIL STRATEGIC PLAN/OVERARCHING GOALS
Goal A - Remain fiscally responsible in a changing world
Respectfully Submitted,
Joanna Cucchi, Electric Utility Financial Administrator Daniel Beans, Electric Utility Director
_____________________________
Dominick Casey, City Manager
ATTACHMENTS:
Description
Municipal Code Edits
EES Backbone Fee Analysis
ORDINANCE NO.
ORDINANCE OF THE COUNCIL OF THE CITY OF ROSEVILLE AMENDING SECTIONS
4.54.010, 4.54.020, 4.54.040 AND 4.54.050 OF THE ROSEVILLE MUNICIPAL CODE
REGARDING
ELECTRIC BACKBONE MITIGATION FEE
THE CITY OF ROSEVILLE ORDAINS:
SECTION 1. The sections of the Roseville Municipal Code listed above are hereby amended to read as shown on Attachment “A”.
SECTION 2. This ordinance shall be effective at the expiration of thirty (30) days from
the date of adoption.
SECTION 3. The City Clerk is hereby directed to cause this ordinance to be published
in full at least once within fourteen (14) days after it is adopted in a newspaper of general circulation in the City, or shall within fourteen (14) days after its adoption cause this ordinance to be posted in full in at least three (3) public places in the City and enter in the Ordinance Book a certificate stating the time and place of said publication by posting.
PASSED AND ADOPTED by the Council of the City of Roseville this day of
, 20 , by the following vote on roll call:
AYES COUNCILMEMBERS:
NOES COUNCILMEMBERS:
ABSENT COUNCILMEMBERS:
MAYOR
ATTEST:
City Clerk
ATTACHMENT ʺAʺ
Title 4. Revenue and Finance
Chapter 4.54. ELECTRIC BACKBONE MITIGATION FEE
§ 4.54.010. Purpose.
The city council finds and declares that the purpose of this chapter is as follows:
A. The general plan of the city requires that the city be provided, in a time frame related to its development, with an adequate level of electric system subtransmission infrastructure so as to maintain an efficient, reliable and safe distribution system.
B. New development, and the expansion of existing development, within the city imposes a burden on the existing electric system subtransmission infrastructure, including without limitation the need for upgraded or additional 60kV substations and subtransmission lines, by adding additional electric load. Such burden may vary by the type of development.
C. Analysis of the electric load currently created by the various types of development within the city and of the land use expected at build out of the city pursuant to the general plan makes it possible to estimate the amount of electric load generated by different types of development and to determine the electric system subtransmission infrastructure or facilities necessary to support those loads. It is therefore possible to construct a fee, based on anticipated electric load, which equitably spreads the burden of electric system subtransmission infrastructure or facilities to those who will create the need for them and utilize them. It is the intent of this chapter to create such a fee, spreading costs of electric system subtransmission infrastructure to those who create the need for such subtransmission infrastructure, without burdening rate-payers or generating any surplus to either the general or electric funds. It is the further purpose of this chapter to implement the general plan by assuring that adequate public facilities are financed and provided to serve the city.
D. The fee established by this chapter has been calculated in the manner set forth in the Utility Financial Solutions (UFS)EES Consulting Electric Backbone Mitigation Fee Analysis (“Fee Analysis”)Consultant Study (“Study”) so as to pay for those facilities listed in the capital improvement program.
E. The fee established by this chapter is in addition to any other fees or charges required by law as, a condition of development or electric service, including without limitation by reason of enumeration, required payments in aid of construction for the cost of distribution facilities for or within a specific development, service connection fees or direct installation fees, or periodic payments for service pursuant to rates established in Chapter 14.24.
F. The fee established by this chapter is to be collected for public improvements and facilities, and for which a proposed construction schedule has been adopted.
G. That the failure to impose the conditions and regulations of this chapter relating to payment of the fee on building permits would jeopardize residents of the community in that it would permit construction to proceed without adequate infrastructure or means of financing said infrastructure.
H. The requirement of this chapter to pay the fee is necessary in order toto assure compliance with the applicable Zoning Ordinance and general plan requirements for the infrastructure funded by this chapter.
I. That for a period of greater than 10 days prior to adoption of this chapter, data has been available to the public and to developers and their representatives indicating the cost or estimated cost of the entire infrastructure to be funded.
J. That the city council has considered the effect of the fee imposed by this chapter with respect to the housing needs of the city as a whole and of the region, particularly as required by the housing element of the general plan, and the city council finds that this chapter does not unduly adversely affect the city’s ability to provide for such needs.
K. That the establishment of the fee is for the purpose of obtaining funds for capital projects, necessary to maintain service required by the general plan within existing service areas and existing portions of the city which are developed or for which land use has already been granted.
Title 4. Revenue and Finance
Chapter 4.54. ELECTRIC BACKBONE MITIGATION FEE
§ 4.54.020. Definitions.
The following words are defined for purposes of this chapter as follows:
"Building permit" means the permit issued or required by the city for the construction of any structure pursuant to and as defined by the building code.
"Capital improvement program" means that list of proposed electric system facilities, improvements, or infrastructure totaling $28,650,000.00$37,607,000 referenced in the 2019 2024 UFS EES Fee AnalysisStudy.
"Department" means the electric utility department.
"Director'' means the director of the department.
"Facilities" mean those electric system facilities or infrastructure shown and included on the capital improvement program.
"Fee" or "electric backbone mitigation fee" or "backbone fee" means the fee established by this Chapter
4.54. The fee shall be collected prior to the approval of any building permit. The fee shall be used solely to finance the facilities. The fee as codified in this chapter has previously been imposed for the same purposes, pursuant to motion of the city council.
"Improvement plan" means a site plan of property proposed for development showing all required improvements that must be approved by the city prior to the issuance of a building permit for the property.
"StudyAnalysis" or "system studyfee analysis" means the 2019 2024 UFSEES Consultant StudyFee Analysis.
The Study Analysis is on file in the office of the city clerk.
Title 4. Revenue and Finance
Chapter 4.54. ELECTRIC BACKBONE MITIGATION FEE
§4.54.040. Payment of electric backbone mitigation fee.
Except as otherwise provided by this chapter, the fee imposed pursuant to this chapter shall be paid at the time of permit and prior to a request for any electrical inspection. Calculation of the fee shall be determined on a per unit basis in accordance with the billing units defined in the UFS Consultant StudyFee Analysis and Section
4.54.050 of this chapter, the number of single-family units, multifamily units, and general service customers (all other commercial/office/industrial types of development) service panel rating of the development. Descriptions of land use categories and type of development in this chapter, except as otherwise noted, are utilized in the same manner as in the city general plan.
Title 4. Revenue and Finance
Chapter 4.54. ELECTRIC BACKBONE MITIGATION FEE
§ 4.54.050. Electric backbone mitigation fee.
The electric backbone mitigation fee shall be:
Type of Development Amount of Fee
Apartments, condominiums, townhouses and mobile homes $360.95$436.41 per dwelling unit Other residential units including single-family homes $496.31$592.20 per dwelling unit General service (all other commercial/office/industrial) $90.24$98.70 per kVA
Formatted: Right: 0.03", Tab stops: Not at 6.06"
Final Backbone Mitigation
Fee Update
Roseville
Electric Utility
Add Date
P R E P A R E D B Y E E S C O N S U L T I N G
October 2024
16701 NE 80 th Street Suite 102 Redmond , WA 98052 425-889-2700 Fax 866 -611-3791 www. eesconsulting .com G e o r g i a Te x a s A l a b a m a N e w H a m p s h i r e W i s c o n s i n F l o r i d a M a i n e W a s h i n g t o n C a l i f o r n i a
October 16, 2024
Mr. Patrick Zanardelli
Roseville Electric Utility
116 S. Grant Street
Roseville, CA 95678
SUBJECT: Final Backbone Mitigation Fee Update
Dear Mr. Zanardelli:
EES Consulting (EES), a GDS Associates company, is pleased to submit this Final Backbone Mitigation Fee Update to Roseville Electric Utility.
Please feel free to contact me directly with any questions or comments.
Very truly yours,
Amber Gschwend
Managing Director, EES Consulting
16701 NE 80th Street, Suite 102, Redmond, WA 98052
ROSEVILLE ELECTRIC UT ILITY Final Backbone Mitigation Fee Update prepared by EES CONSULTING i
TABLE OF CONTENTS
BACKBONE MITIGATION FEE UPDATE ............................................................................ 1 Introduction .................................................................................................................................................................. 1 Current Backbone Mitigation Fee ........................................................................................................................ 1 Backbone Mitigation Fee Analysis ....................................................................................................................... 1 Summary ........................................................................................................................................................................ 3
ROSEVILLE ELECTRIC UT ILITY Final Backbone Mitigation Fee Update prepared by EES CONSULTING 1
Backbone Mitigation Fee Update
INTRODUCTION
EES Consulting (EES), a GDS Associates company, is pleased to submit this Final Backbone Mitigation Fee Update to Roseville Electric Utility (REU). The Backbone Mitigation Fee is charged for new customers to connect to the distribution system based on the relationship between future costs and the impact new customers have on future expansion costs. The purpose of the Backbone Mitigation Fee is to prevent existing customers from increased electric rates due to capital expenditures directly related to the addition of customers.
This report summarizes the backbone fee update prepared for R EU. This report updates the previous analysis prepared in April 2019. The results show that the current backbone fee should be increased approximately 6% to mitigate the cost of line capacity growth on existing customers by recovering backbone costs through the kVA fee. Addtionally, this increase is consistent with recent inflationary pressures and supply chain impacts impacting electric utilities in particular. Table 1 summarizes the current and proposed Backbone Mitigation Fee.
TABLE 1: CURRENT AND PROPOSED KVA FEE
Customer Class Current Fee Billing Method Proposed kVA Fee RSF (Residential Single-Family) $510.51 Per Home $592.20 RMF (Residential Multi-Family) $371.28 Per Dwelling $429.35 GS (Commercial/Industrial) $92.82 Per kVA $98.70
CURRENT BACKBONE MITIGATION FEE
The current Backbone Mitigation Fee was developed in 2019 based on the kVA approach. This fee is typically adjusted annually by the construction cost index (CCI), however the last update was in June 2020 and was not adjusted again in an effort to help offs et increased costs for developers. The proposed backbone fee increase incorporates the most recent CCI adjustments, enabling the utility to better reflect the rising costs of labor and materials since the previous analysis completed in 2019. Had annual CCI updates been utilized, the current backbone fee would be $110.61 per kVA which is higher than the proposed per kVA fee of $98.70 in Table 1 above.
TABLE 2: CURRENT FEE AND APPROXIMATE FEE INCLUDING CCI INCREASES Customer Class Current Fee Billing Method
Approximate Fee
w/ CCI Increases
RSF (Residential Single-Family)1 $510.51 Per Home $608.36 RMF (Residential Multi-Family) 2 $371.28 Per Dwelling $442.44 GS (Commercial/Industrial) $92.82 Per kVA $110.61
1. Based on 5.5 kVa per single family home
2. Based on 4.0 kVa per multifamily home
BACKBONE MITIGATION FEE ANALYSIS
The analysis reviewed R EU’s capital improvement plan and costs. Not all CIP costs are attributed to growth. Many CIP projects are initiated due to reliability needs including aging assets, lack of redundancy,
ROSEVILLE ELECTRIC UT ILITY Final Backbone Mitigation Fee Update prepared by EES CONSULTING 2
safety, and security. The 5-year CIP plan was provided by Power Engineering staff and the list was updated to include several new projects and removes two projects identified in the previous analysis that have been paid for with backbone fees collected sin ce the 2019 analysis. The additional captial improvement projects and increases to labor and material costs since 2019 increased the 5 -year CIP plan project expenses by 31% from the previous backbone fee study.
TABLE 3: PLANNED CIP COSTS 2024 – 2029
Total CIP
% Allocated to
New Dev
$ Allocated to
New Dev.
Sierra Vista Transformer Addition $3,381,000 75% $2,536,000 Creekview Substation/60kV Extension $15,394,000 75% $11,546,000 Vernon Substation Upgrade $18,832,000 25% $4,708,000
Total $37,607,000
$18,790,000
Less Backbone Fees Collected Since 2018 $5,290,000
Adjusted Total $13,500,000
The total capital costs assigned to growth total $18.8 million. However, this total is adjusted downward to $13.5 million based on the backbone fees collected since 2018. These collected fees partially fund the CIP in Table 3. This new amount is divided by the total number of new kVA projected on the system. The total new kVA is based on the Specific Plans for development in Amoruso Ranch, while customers served by exisiting capacity include growth projections for all other areas of the City.
TABLE 4: PLANNED HOUSING UNIT GROWTH 2024 – 2029
Units served by
Existing Capacity
Customers Served
by New Capacity
Total New
Customers
RSF (Residential Single-Family) 6,281 1,794 8,075
RMF (Residential Multi-Family) 5,533 873 6,406
Total New Units (Customers) 11,814 2,667 14,481
Total kVA is calculated in Table 5 using an average of 6.0 kVA for new single family units and 4.35 kVA for new multi-family units. These values are increased from the 2019 study due to increased electric uses in the home including Electric Vehicle charging. General Service kVA per acre varies based on designated land use for the area.
TABLE 5: PLANNED KVA GROWTH 2024 – 2029
kVA Served by
Existing Capacity
kVA Served by
New Capacity
Total
New KVA
RSF (Residential Single-Family)1 37,686 10,764 48,450
RMF (Residential Multi-Family) 2 24,069 3,798 27,866
GS (Commercial/Industrial) 59,560 1,224 60,784
Total kVA 121,315 15,786 137,100
1. Based on 6.0 kVa per single family home.
2. Based on 4.35 kVa per multifamily home.
ROSEVILLE ELECTRIC UT ILITY Final Backbone Mitigation Fee Update prepared by EES CONSULTING 3
Table 6 summarizes the projected revenue recovery with the above assumptions.
TABLE 6: PROJECTED REVENUES FROM KVA BASED RATES
kVA per
Customer
Projected # of
New Customer
or kVA Units
kVA Fee
per Unit
Estimated
Revenue
RSF (Residential Single-Family) 6.00 8,075 $592,20 $4,782,015 RMF (Residential Multi-Family) 4.35 6,406 $429.35 $2,750,384 GS (Commercial/Industrial) 1 60,784 $98.70 $5,999,415
Total
$13,531,814
SUMMARY
Since 2019, REU has added capital projects needed to serve the projected load growth. The costs for these projects are included in the Backbone Mitigation Fee calculation. The above methodology mitigates the cost of growth on existing customers by recovering backbone costs through the kVA fee. The CIP costs are projected through fiscal year 2029. As additional projects are needed to meet projected growth, this analysis should be updated. Between updates, the Backbone Fee should be reviewed and adjusted annually per Munici pal Code 4.54.140: The Construction Cost Index (CCI) inflationary fee adjustment.
Finally, Backbone Mitigation Fees should be evaluated specifically for any new very large electric customers (connecting at 60 kV or higher).
COUNCIL COMMUNICATION
CC #:
3646
File #:
0110
Title:
Downtown Specific Plan, Old Town Pizza - Economic Development Incentive Agreement
Contact:
Wayne Wiley 916-774-5283 [email protected]
Meeting Date: 11/20/2024
Item #: 9.3.
RECOMMENDATION TO COUNCIL
Staff recommends that the City Council:
1. Hold a public hearing to review an Economic Development Incentive Agreement with Old Town Roseville Properties, LLC (OTRP), for the operation of an “Old Town Pizza” restaurant to be located at 324 Vernon Street; and
2. Adopt a resolution to approve the City of Roseville Economic Development Incentive Agreement with OTRP to offset remediation costs associated with the development of an “Old Town Pizza” restaurant at 324 Vernon Street and authorize the City Manager to execute it.
BACKGROUND
This staff report shall serve as the economic development subsidy report pursuant to California Government Code Section 53083. The subject site is located at 324 Vernon Street within the Downtown Specific Plan (DTSP) and is currently developed with a 19,485 square-foot building that was originally constructed in 1935.
The building was previously owned by the City of
Roseville and leased to the United States Postal Service until the relocation of the downtown post office to 116 South Grant Street in October of 2020.
Prior to the post office vacating the site, the City released a Request for Proposals (RFP) in 2018 seeking out a development team to purchase and develop the property consistent with the vision of the DTSP. The City ultimately selected a mixed-use development proposal submitted by Lennox Hill Interiors, LLC and subsequently sold the property to the developer in November of 2020. As part of the terms of the sale to the developer in 2020, the City agreed to provide the developer approximately $200,000 for hazardous materials remediation in association with the demolition of the building (to be reimbursed following issuance of a Certificate of Occupancy Permit). However, the project never developed due to increased development costs, project feasibility issues, and uncertain market conditions. After owning the property for several years and exploring alternative project designs, the owner listed the property for sale and subsequently sold the site to OTRP in 2024.
OTRP has a principal place of business located at 120 N. McDaniel Drive, Auburn, CA, 95603 and will be the legal entity that owns the property at 324 Vernon Street for the purposes of operating an “Old Town Pizza” restaurant and entertainment venue.
Old Town Pizza (OTP) has proposed to relocate from its current location at 120 Church Street in Historic Old Town to 324 Vernon Street to provide expanded amenities beyond their current operation, which includes a pizza restaurant with 71 employees in an 8,100 square-foot building.
OTP will renovate and activate the site at 324 Vernon Street with the intent of expanding its operations to 25,000 square feet of usable space.
The new location will include a pizza restaurant on the main floor with a rooftop dining area, a tap room operated by Slice Beer, and a potential basement speakeasy in a future phase. The company’s estimated capital investment is $6.5 million for the first phase of building improvements and equipment purchases, which are projected to be completed by the end of 2025. An estimated 43 new jobs are anticipated by 2030 (3 full-time/40 part-time), expanding OTPs employment by 61% and more than $1.3 million in sales tax is projected to be collected by the City of Roseville over the next ten years.
Additionally, a total of $114,000 in property taxes is estimated to be collected by the City over the same period.
With the construction of the proposed project, lead and asbestos remediation will be required due to the age of the building.
The estimated cost of remediation is anticipated to total approximately $150,000, in addition to the development construction costs of $5.6 million for the project.
In an
effort to facilitate development at this catalyst site, the City will provide the economic development incentive payment to OTRP in an amount not to exceed $100,000 following completion of the project and issuance of a certificate of occupancy (anticipated to be completed by December 31, 2025).
Staff finds that the unique public purpose of this economic development incentive aligns with the goals of the City’s DTSP to support development of a catalyst site, in addition to promoting the general welfare of the City and its residents by creating new jobs, expanding the range and diversity of downtown retail offerings, broadening the City’s property tax and sales tax base, and generating increased City revenues.
Furthermore, if not for the economic development incentive, this project might not be developed in downtown based on the additional costs associated with infill development.
Other important goals and objectives that are satisfied by the project include:
1 .
Construction of the project is expected to generate a substantial number of construction jobs and permanent part-time and full-time jobs;
2 .
Public investment in this project will result in significant private investment into the downtown; 3 .
An increase in the number of visitors to the downtown area will generate additional spending on dining, retail and entertainment activities associated with surrounding downtown merchants; and
4 .
Additional property taxes will be generated based on the increase in property value and proposed improvements.
As proposed, the project will generate significant sales tax, activate a key intersection in downtown Roseville, and help retain an existing local business within the community. Moreover, this economic development incentive is consistent with, and in furtherance of, the City’s Economic Development strategy of supporting development projects that will further catalyze growth and investment in downtown Roseville.
At this time, the City proposes a $100,000 economic development incentive to be paid to OTRP to offset remediation costs associated with development of the site, consistent with the terms and intent of the City’s previous sale of the property to Lennox Hill Interiors, LLC .
FISCAL IMPACT
A budget adjustment was approved in October of 2019 allocating $275,000 from the Strategic Improvement Fund (SIF) to the Vernon Street Sale Preparation capital improvement project (CIP) to cover due diligence items and remediation costs associated with the sale of the property to Lennox Hill Interiors, LLC. To date, there is a remaining balance of $240,000 and the proposed $100,000 incentive will come from the existing CIP. There will be no impact to the City’s General Fund.
In addition to the economic impacts noted within the staff report, the proposed project is expected to generate significant construction related economic impacts totaling $7.9 million, based on the multiplier effect of construction spending for supported suppliers, consumer businesses and employees associated with construction activity.
The project will also generate roughly 50
temporary construction jobs and 74 permanent and part-time jobs.
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 §15061(c)(3) and §15378. Economic incentive agreements meet the above criteria and are not subject to CEQA. No additional environmental review is required.
CITY COUNCIL STRATEGIC PLAN/OVERARCHING GOALS
Goal D - Enhance economic vitality
Respectfully Submitted,
Wayne Wiley, Economic Development Manager
Melissa Anguiano, Economic Development Director
_____________________________
Dominick Casey, City Manager
ATTACHMENTS:
Description
Resolution 24-393
Economic Incentive Agreement
RESOLUTION NO. 24-393
APPROVING A CITY OF ROSEVILLE ECONOMIC DEVELOPMENT INCENTIVE
AGREEMENT, BY AND BETWEEN THE CITY OF ROSEVILLE AND OLD TOWN
ROSEVILLE PROPERTIES, LLC WHOLESALE CORPORATION, AND
AUTHORIZING THE CITY MANAGER TO EXECUTE IT ON BEHALF OF THE
CITY OF ROSEVILLE
WHEREAS, the property at 324 Vernon Street within the Downtown Specific Plan (DTSP) is currently developed with a 19,485 square-foot building that was originally constructed in 1935; and
WHEREAS, the building was previously owned by the City of Roseville and leased to the United States Postal Service until the relocation of the downtown post office to 116 South Grant Street in October of 2020; and
WHEREAS, the property was sold to Lennox Hill Interiors, LLC in November of 2020, however, due to increased development costs, project feasibility issues, and uncertain market conditions, the original project never developed; and
WHEREAS, after owning the property for several years and exploring alternative project designs, the owner listed the property for sale and subsequently sold the site to Old Town Roseville Properties, LLC (OTRP) in 2024; and
WHEREAS, Old Town Pizza has proposed to relocate from its current location at 120 Church Street in Historic Old Town to 324 Vernon Street to provide expanded amenities beyond their current operation; and
WHEREAS, with the construction of the proposed project, lead and asbestos remediation will be required due to the age of the building; and
WHEREAS, in an effort to facilitate development at this catalyst site, the City is willing to provide the economic development incentive payment to OTRP in an amount not to exceed $100,000 following completion of the project and issuance of a certificate of occupancy (anticipated to be completed by December 31, 2025).
WHEREAS, staff recommends that the City Council approve a City of Roseville Economic Development Agreement for this economic incentive to provide the following public benefits:
1. It aligns with the goals of the City’s DTSP to support development of a catalyst site; and
2. It promotes the general welfare of the City and its residents by creating new jobs; and
3. It expands the range and diversity of downtown retail offerings; and
4. It broadens the City's property tax and sales tax base; and
5. If not for the economic development incentive, this project might not be developed in downtown based on the additional costs associated with Infill development.
WHEREAS, the City of Roseville Economic Development Incentive Agreement, by and between the City of Roseville and Old Town Roseville Properties, LLC, has been reviewed by the City Council; and
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Roseville that said City of Roseville Economic Development Incentive Agreement is hereby approved and that the City Manager is authorized to execute it on behalf of the City of Roseville.
PASSED AND ADOPTED by the Council of the City of Roseville this day of , 2024, by the following vote on roll call:
AYES COUNCILMEMBERS:
NOES COUNCILMEMBERS:
ABSENT COUNCILMEMBERS:
MAYOR
ATTEST:
City Clerk