Annually
19. Use non-traditional media (e.g., social media, County website) in outreach and education efforts in addition to print media and notices.
Annually
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20. Update the Affordable Housing Rental List (translated in multiple languages) on the County website.
Annually
21. Inform community members of the existence of the Orange County Fair Housing Council (FHCOC) and its oversight of fair housing practices by posting on the County’s website and at the Planning counter.
By December 2025
22. The County shall work with local resource agencies to implement an outreach program informing families within the County of housing and services available for individuals with
developmental disabilities.
Annually
Amend the zoning code and other local ordinances to facilitate new housing opportunities and increase housing mobility, including:
23. Allow emergency shelters without a Use Permit or other discretionary permit in the commercial and industrial portions of the Housing Opportunities Overlay Zone.
By October 2024
24. Remove the Site Development Permit requirement for
multifamily developments of one to four units and any
developments with 20% affordable units and allow by-right.
Amend the Site Development Permit requirements for objective findings for developments of units or more.
By October 2024
25. Adopt Objective Design Standards (ODS). By October 2024 Issue: Disparities in Access to Opportunities
Contributing Factors:
1. Unaffordable rents and sales prices in a range of sizes.
2. Displacement of residents due to economic pressures.
3. Lack of private and public investment in specific neighborhoods.
Actions: Timeframe:
Increase accessible and affordable housing opportunities for persons with disabilities through the following actions:
1. Review Definition of Single Housekeeping Unit. To promote flexibility to accommodate residents with different living conditions, the County will review and adopt revisions as appropriate to its zoning code to provide greater flexibility in consideration of accommodating a variety of household
situations for related and unrelated individuals living together.
By December 2026.
2. The County will review and revise its group home and zoning ordinances as needed to ensure ongoing compliance with state and federal fair housing laws. For example, the ordinance will be reviewed to ensure that a group home that operates as a single By December 31, 2025.
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housekeeping unit is permitted in any zoning district in the same manner as other residential uses in that zone (e.g., multifamily, single family). The definition of single housekeeping unit as to group homes will be revised to eliminate (1) the reference to residential activities that do not occur on a nonprofit basis and, (2) the requirement that the residents share lease agreements or ownership. In addition, the standards for group homes shall be objective and not unnecessarily constrain approval of group homes in that zoning district.
3. Seek State and Federal monies, as funding becomes available, for permanent supportive housing construction and
rehabilitation targeted for persons with disabilities, including persons with developmental disabilities.
Annually.
4. Develop a program /ordinance to provide regulatory incentives, such as expedited permit processing and fee waiver, to projects targeted for persons with disabilities, including persons with developmental disabilities.
Within 2 years of adoption
of the Housing Element.
5. On an ongoing basis, enforce building code provisions requiring accessible design.
Annually.
6. On an ongoing basis, implement reasonable accommodation ordinance.
Ongoing.
7. On an ongoing basis, ensure the permitting requirements for group homes and care facilities for seven or more persons are consistent with State law and fair housing requirements.
Ongoing.
Increase affordable housing opportunities in high opportunity areas through the following actions:
8. Sites Rezoning – Amend the HOO to accommodate a higher density of development, establish a minimum density for R2, R3, R4, RP, and MX zones, rezone C1, C2, CC, CH, CN, RP to MX, and expand the HOO.
Adopted by the Board of
Supervisors on June 25,
2024.
9. No Net Loss – Identify and make available additional adequate sites to accommodate the share of housing need by income level.
By end of 2024, if required.
10. Review incentives for density bonuses, expedited permit processing procedures, development standards, tax-exempt conduit financing, infrastructure financing assistance, and direct financial assistance.
Every two years.
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11. Review with DPRC members the existing and proposed codes, procedures, and fees to ensure that they do not unreasonably hinder housing production.
Within 1 FY of approval.
12. Review funding opportunities and aggressively pursue, as the County has been, all state and federal housing grant funds for which the County is eligible
Bimonthly.
13. Approve affordable housing projects in Rancho Mission Viejo administratively.
Ongoing.
14. Coordinate with the City of Newport Beach for development and shared RHNA credit of the identified parcels on the Countyowned Coyote Canyon site.
By November 2024.
15. Implement an informational program to disseminate information about developing ADUs.
By end of 2025; annually
thereafter.
16. Prepare pre-approved ADU plans. July 2024.
17. Implement the Affordable ADU Loan Program Policy Manual. Within 2 years of adoption.
18. Initiate consideration of an Inclusionary Housing Program/Policy. By December 2026.
19. Leverage available funding sources, such as Homekey funds, to purchase or rehabilitate housing, including hotels, motels, vacant apartment buildings, and other buildings and convert them into interim or permanent, long-term housing.
Annually.
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Issue: Disproportionate Housing Needs
Contributing Factors:
1. Unaffordable rents and sales prices in a range of sizes.
2. Shortage of subsidized housing units.
3. Cost of repairs and rehabilitation.
4. Dominance of single-family housing, which is typically more expensive than multifamily.
Actions: Timeframe:
Rehabilitate and Preserve Existing Residential Units through the following actions:
1. Use available housing funding to finance housing rehabilitation, focusing in Central and North County.
Annually.
2. Implement and review the County’s code enforcement and graffiti removal programs.
Ongoing.
3. Provide infrastructure maintenance in existing residential neighborhoods, including through the Capital Improvement Program (CIP), focusing in Central and North County.
Annually.
4. Participate in the CDBG, HOME and related programs as a means of providing passthrough funding to affordable housing projects and efforts to rehabilitate existing affordable units or projects, focusing in Central and North County.
Annually.
5. Site Replacement – Comply with site replacement requirement pursuant to Government Code Section 65583.2(g)(3). Replace sites identified in the inventory that currently have residential uses, or within the past five years have had residential uses that have been vacated or demolished, and:
a. Were subject to a recorded covenant, ordinance, or law that restricts rents to levels affordable to persons and families of low or very lowincome; or b. Subject to any other form of rent or price control through a public entity’s valid exercise of its police power; or
c. Occupied by low or very low-income households for the purpose of this program “previous five years” is based on the date the application for development was submitted.
As
necessary
(ongoing).
6. Monitor projects with expiring affordability covenants and take appropriate action to preserve these affordable units whenever possible. Promote funding and other opportunities to owners considering conversion of units through existing outreach programs and the County’s website.
Annually.
7. Enforce the provisions of the County’s condominium and mobile home park conversion ordinance.
Annually.
Make neighborhood improvements in low opportunity areas in Central and North County, including the following:
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8. Implement the County CIP plan including ADA, roadway, and infrastructure improvements in the Unincorporated County. Improvements may include:
a. Curb ramp, sidewalk, and driveway upgrades and improvements to satisfy current ADA standards and requirements.
b. Parkway, sidewalk, and intersection improvements.
Annually.
9. Facilitate the development or improvement of parks and open space under the County’s CIP plan or other implementation plan benefiting residents of Unincorporated communities, particularly communities with reduced access to environmental opportunities. Projects may include:
a. Development of Mile Square Regional Park in Fountain Valley b. Santa Ana River Trail
c. Ted Craig Regional Park improvements
d. Yorba Regional Park improvements
By 2029.
Increase housing opportunities, with a focus in Central County, for persons experiencing homelessness through the following actions:
10. Facilitate the development of one interim or permanent, long-term housing project using available funding sources, such as Homekey funds (provided it is made available through the State), during the planning period which is anticipated to assist 50 persons experiencing homelessness annually.
Annually.
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2. Brea
Issue: Disparities in Access to Opportunity and Disproportionate Housing Needs Contributing Factors:
1. Lack of community revitalization strategies.
2. Lack of public investments in specific neighborhoods, including services and amenities.
3. High cost of housing rehabilitation and repairs.
4. High levels of overpayment create displacement risk.
5. Limited availability of affordable housing in all areas of the city, including those where rents and sales prices have become exclusive.
6. Community concern about housing densities.
7. Lack of knowledge of fair housing laws.
Actions: Timeframe:
Increase knowledge of fair housing laws through the following actions:
1. By the end of 2022, post additional fair housing information at the Family Resource and Senior Centers and on their digital platforms.
Starting in 2022, conduct an informational workshop at these locations once every two years.
By the end of 2022
2. In 2023, conduct a fair housing information session for the City Council.
Invite local nonprofits (including the Orange County Human Relations Commission, the Kennedy Commission, and People for Housing O.C.) to attend.
By the end of 2023
3. Publish Fair Housing information, including any community meetings in Brea Line (city newsletter), as well as non- traditional media, such as Instagram and Facebook, and conduct targeted outreach to tenants, mobile home park residents, and other lower-income populations.
Annually
4. Increase the distribution of fair housing materials by at least 25 percent to increase awareness of fair housing options among residents, including special needs groups and low-income residents. Seek to increase the number of Brea residents counseled through the Fair Housing Council of Orange County from an average of 70 to 75 annually.
Annually, between
2021-2029
Increase quality of affordable housing and access to opportunities in low opportunity areas through the following actions:
5. Include information about rehabilitation resources in City newsletters and on the City website, including the availability of funds for accessibility improvements. Include translated information when feasible. Seek to assist 12-15 households annually. Starting in 2023, conduct targeted outreach in identified Low and Moderate Resource Annually
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Census Tracts, utilizing the Housing Conditions Survey and Code Enforcement information to further target assistance.
6. Identify apartments in need of rehabilitation and cooperate with nonprofit providers to acquire and rehabilitate units and provide as long-term affordable housing. Seek to complete at least two projects, including the 47-unit Walnut Village in partnership with Jamboree Housing.
Between 2021-2029
7. Continue to improve access to individuals with disabilities through ADA improvements to streets, sidewalks, and public facilities. Dedicate or seek funding, including annual CDBG allocations, to prioritize infrastructure and accessibility improvements in Low and Moderate Resource opportunity areas.
Ongoing
8. Increased public and private investment in Low and Moderate Resource Census Tracts, including $2,000,000 allocated for a variety of ADA, park facilities, transportation, water, and sewer line improvements in these Census Tracts during 2021-2029.
2021-2029
Increase housing opportunities in high opportunity areas through the following actions:
9. Starting in 2023, work with the FHCOC to contact landlords of affordable multifamily complexes every two years and provide fair housing information and assistance. This outreach will focus on promoting the Section 8 voucher program to landlords who have not previously participated in the program and should include multi-lingual materials.
Through landlord outreach in coordination with the FHCOC and housing mobility programs through the Orange County Housing Authority, the City's goal will be to increase Housing Choice Vouchers by 10%, from 114 to 125 vouchers, including a 10% increase in high resource neighborhoods.
Every two years;
2021-2029
10. Rezone sufficient parcels to provide geographically dispersed sites for over 1,100 lower-income units, fostering a more inclusive community. 2022
11. Provide significant new housing opportunities in Highest Resource eastern Brea through development of a diverse mix of 1,100 new units in the Brea 265 project, including an estimated 76 deed restricted affordable units as required through the City’s inclusionary ordinance.
Pursue the introduction of workforce housing on Amazon’s 31-acre warehouse site in eastern Brea.
2021-2029
12. Update Brea’s Affordable Housing Ordinance in 2022 to integrate lowand moderate-income units in market rate projects throughout the community
2022
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13. Coordinate with the Orange County Housing Authority (OCHA) in 2023 to utilize the mobility counseling program. This OCHA program informs Housing Choice Voucher holders about their residential options in higher opportunity areas and provides holistic support to voucher holders seeking to move to higher opportunity areas.
2023-2029
14. Initiate a marketing program for homeowners on the benefits of ADUs and the availability of funds to support development through the City's Newsletter and posting of the ADU application checklist on the City website, thereby expanding housing opportunities in areas traditionally limited to single-family ownership. Promote and support the development of ADUs and seek to issue permits for 16 units annually throughout Brea.
Annually, starting
in 2022
15. Adopt an Ordinance by 2022 to expand the housing supply in High Resource single-family zones by allowing for lot splits and duplexes under the parameters of SB 9. In coordination with research being conducted at the State level, pursue opportunities to incentivize and provide funding assistance for homeowners to provide affordable units under SB 9.
2022-2025
16. Require affordable developers receiving public funds to prepare an affirmative marketing plan and encourage private developers with affordable units in their projects to prepare an affirmative marketing plan. The affirmative marketing plan shall ensure marketing materials for new developments are designed to attract renters and buyers of diverse demographics, including individuals of any race, ethnicity, sex, handicap, and familial status.
Ongoing
Prevent displacement through the following actions:
17. Continue anti-displacement programs including limits on rent increases and prohibiting evictions without just cause for tenants that have resided in their units for more than 12 months; relocation assistance where public funds are utilized; and replacement requirements when affordable units are removed.
Ongoing
18. Assist mobile home park resident organizations interested in purchasing their parks to access funds through the state HCD Mobile Home Park Resident Ownership Program (MPROP). Provide available local funds for leverage and assist with the subdivision map waiver process consistent with the Subdivision Map Act.
Ongoing
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3. Cypress
Issue: Segregation and Disparities in Access to Opportunity Contributing Factors:
1. Lack of City-specific data on fair housing inquiries/complaints.
2. Lack of effective outreach strategies.
3. Concentration of lower- and moderate-income households.
4. Limited understanding of regulations surrounding acceptance of HCV tenants.
Actions: Timeframe:
1. Advocate to receive reports from the Orange County Fair Housing Council that include data specific to the City of Cypress to allow the City to better assess fair housing issues within the community.
Ongoing
2. Create an updated webpage on the City’s website with information on fair housing rights and resources by 2023.
2023
3. Publish information about fair housing resources in the City’s quarterly newsletter.
Ongoing
4. Implement requirements for developers to submit an Affirmative Action Marketing Plan for density bonus projects by 2023.
2023, ongoing
thereafter
5. Expand outreach and education of Source of Income Protection laws (SB 329 and SB 222), which include HCVs and other public assistance as legitimate sources of income for housing.
Ongoing
6. Provide information on Source of Income Protection laws in ADU informational packets.
Ongoing
7. Increase affordable housing stock in high opportunities through the following actions:
a. Promote key lower income housing opportunity sites for affordable housing development as a means to bring new housing opportunities to high resource areas.
Ongoing
b. Conduct a feasibility study on the implementation of an inclusionary housing ordinance by 2024.
2024
c. Support funding applications by nonprofit developers for affordable housing in high resource areas.
Ongoing
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Issue: Disproportionate Housing Needs
Contributing Factors:
1. Presence of a higher proportion of older multi-family rental units.
2. Limited income available for home repairs/maintenance.
3. Older single family housing stock.
Actions: Timeframe:
1. Implementation of a Neighborhood Preservation Pilot Program to identify and address code violations and needed right of way improvements.
Ongoing
2. Expand outreach and education efforts to neighborhood residents on resources available to address code violations and property maintenance issues.
Ongoing
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4. Dana Point
Issue: Segregation, Disparities in Access to Opportunity, and Disproportionate Housing Needs Contributing Factors:
1. Low rates of HCV use. Despite high rates of overpayment for rental households, the use of housing vouchers is low. This may be due to stigma associated with the use of Housing Vouchers, both by property owners and tenants.
2. School performance. Disadvantaged students at schools serving Dana Point residents may be falling behind other students in the school and compared to those across the state. Both elementary schools in Dana Point are ranked much lower compared to other elementary schools that serve Dana Point residents.
3. Income and Diversity. The City lacks a substantial number of suitable housing sites in moderate / high / highest opportunity areas; many of these areas are largely built out with single-family homes. The majority of available housing sites are in Census Tracts that already have a higher concentration of low-income residents.
4. Lack of regional coordination and lack of public/private investment. Dana Point and surrounding cities generally address the need and solutions for affordable housing and homeless shelters in an independent manner, which causes them to compete against one another for funds and eliminates opportunities to pool resources.
5. Potential community opposition. While there is little community opposition to a proposed affordable project (e.g., there was community support for Silver Lantern), additional regional collaboration can help to mitigate community opposition that may arise in the future (whether an affordable housing project or homeless shelter).
Actions: Timeframe:
Increase knowledge and enforcement of fair housing laws through the following actions:
1. Educate the community about fair-housing and equal housing opportunities, providing housing counseling services and family resource information and referral. Topics include, but are not limited to tenant rights, legal resources, rehabilitation grants and loans, first-time homebuyer programs, and Section 8 programs.
Distribute materials in English and Spanish through City Hall, City libraries, City websites, and the Fair Housing Council website.
Ongoing
2. Track fair housing issues and identify patterns in the City, including meeting annually to check on the status of active cases.
Annually
3. Promote fair housing opportunities through various financial assistance initiatives and affordable housing/neighborhood revitalization programs.
Ongoing
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4. Actively recruit residents from neighborhoods in low resource areas to serve or participate on boards, committees, and other local government bodies.
Ongoing
5. As part of the City’s Housing Element Annual Report, continue to annually monitor zoning regulations to ensure compliance with fair housing laws.
Ongoing
Increase use of Housing Choice Vouchers through the following actions:
6. Coordinate with OCHA to generate a detailed understanding of where overpayment rates and displacement risks are highest in the city (as of latest available Census data), where vouchers are and are not used, and how many tenants could potentially qualify at each multifamily property in target areas.
2022
7. Coordinate with Orange County United Way on the
WelcomeHomeOC program to identify opportunities to assist Dana Point residents.
2022
8. Apply affirmative advertising policy to income-restricted units to be built in the Victoria Apartments development in the Doheny Village area. Apply the policy to all future income-restricted projects, as permitted by state and/or federal funding programs. 2022
9. Coordinate with OCHA to develop an outreach plan and materials to communicate the benefits of vouchers and tenant rights regarding just cause evictions, limitations on rent increases, and replacement housing requirements if any existing residential units would be removed, based on state law.
2023
10. Complete study of options to augment/adjust current in-lieu fee program for possible application of funds for those overpaying and/or at risk of displacement; evaluate how the City can prioritize or facilitate mixed- income housing through potential use of in-lieu fees or other resources (e.g., determine which federal and state grant or loan programs are structured to score mixed-income projects as more competitive compared to 100 percent lower income developments).
2024
11. Distribute outreach materials through means that reach target populations (e.g., those receiving subsidized school lunches).
Conduct direct outreach to 10 properties (tenants and owners) in Census Tracts illustrating high rates of rental overpayment and conduct mailer outreach to all renter occupied units and rental 2024
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property owners in the Town Center and Doheny Village Census Tracts.
12. Bring forth appropriate in-lieu fee provisions for adoption. 2024
13. Establish strategies to use City resources (technical support and/or in-lieu fees as appropriate) to encourage mixed-income housing developments.
2024
Improve educational outcomes for lower income and underserved students at schools in or serving Dana Point, through the following actions:
14. Continue annual assessment of effectiveness of Sparkpoint OC with Orange County United Way.
Annually
15. Negotiate with the Victoria Apartments property owner to dedicate substantial funds toward schools in Dana Point, specifically Dana Hills High School (which serves residents in the low resource areas).
2024
16. Coordinate with United Way to continue and or expand Sparkpoint effort on annual basis, with modifications to provide better or more effective assistance and/or to reach more families.
Annually
17. Coordinate with United Way to expand Sparkpoint effort to Palisades Elementary School.
2025
Increase affordable housing opportunities through the city, and especially in moderate, high, and highest resource areas, through the following actions:
18. Adopt a pre-approval review process for ADUs. 2023
19. Initiate a general plan update with an explicit objective to identify additional housing opportunities in moderate, high, and highest resource areas, with additional emphasis on Census Tracts that can help improve patterns of greater diversity, promote a broader distribution of households with a range of incomes, and lowers displacement risk.
2023
20. Coordinate with the OCHA to inform Housing Choice Voucher holders about their residential options in moderate, high, and highest resource areas.
Annually
21. In coordination with research being conducted at the state level, pursue opportunities to incentivize and provide funding assistance Ongoing
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for homeowners to provide affordable units under SB 9 provisions (adopted by ordinance in February 2022).
22. Coordinate through the Orange County Housing Finance Trust (OCHFT) on the use of funding sources (e.g., REAP) and potential to apply for additional funding.
Ongoing
23. Coordinate through OCHFT on year two notice of funding availability (NOFA), and subsequent NOFAs for years three, four, and five; advocate for the use of funds in Dana Point as appropriate and in surrounding jurisdictions when such location would yield better benefits (more units, deeper level of subsidy, more target populations, etc.).
Ongoing
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5. La Palma
Issue: Segregation, Disparities in Access to Opportunity and Disproportionate Housing Needs Contributing Factors:
1. Some residents who are in need of fair housing resources, including low-income households, individuals with disabilities, racial/ethnic minorities and other protected classes, may be unaware of the fair housing resources that are available. Although information about fair housing services is posted on the City website and in public offices, more could be done to make this information available.
2. Lack of access to opportunity due to high housing costs is a significant contributing factor to fair housing throughout the region. All areas of La Palma are classified as high opportunity.
Increasing housing availability in areas with good opportunity make it easier for lower-income households to access the types of services and amenities that further economic and social mobility.
Actions: Timeframe:
1. Expand fair housing outreach through the following actions:
a. Continue directing fair housing inquiries to the Fair Housing Council of Orange County.
Ongoing
b. Post and update information annually regarding fair housing and request FHCOC to conduct a presentation every two years about services available.
Every two years
c. Contact all apartment complexes annually to provide
education and materials about the Section 8/Housing Choice Voucher program including multi-lingual materials.
Coordinate to develop an outreach plan and materials to communicate the benefits of vouchers and tenant rights
regarding just cause evictions, limitations on rent increases, and replacement housing requirements. Conduct direct
outreach to 30 properties (tenants and owners) in Census Tracts with LMI concentrations by December 2026.
Annually
d. Publish and update links to fair housing information on the City website and via social media annually.
Annually
2. Improve Access to Opportunity and Mobility through the following actions:
a. Conduct fee study annually and adopt City planning fee reductions for new deed-restricted low-income housing
projects and fee waivers for lot consolidation by June 2025 Annually, fee
reductions adopted
by June 2025
b. Update Municipal Code for large residential care facilities and remove any unreasonable conditions of approval or other By December 2024
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requirements by establishing objective development
standards to eliminate subjective components of the
discretionary CUP process and ensure barrier free housing choices for individuals with disabilities by December 2024. c. Continue to support the provision of housing for individuals with disabilities through updates to zoning regulations in compliance with fair housing law by December 2023.
December 2023
d. Encourage and facilitate housing development commensurate with the City’s identified housing need in the RHNA allocation on a continuous basis.
Ongoing
e. Apply for CDBG funding through the County of Orange Urban County program and seek third-party grant writing assistance for City’s Meals on Wheels senior program and ADA
improvements for streets and sidewalks by October 2025.
October 2025
f. Establish Economic Development/Land Use Committee by February 2024 to implement the following programs:
i. Review City-owned properties annually and identify
any surplus land that could be made available for
affordable housing development by June 2024.
ii. Explore options to allow and incentivize missing
middle and special needs residential uses in the R-3 as part of the development standards amendments for
increased story count, parking, and lot coverage by
December 2024.
iii. Pursue strategies to facilitate housing development of at least 10 housing units on religious, institutional, and quasi-institutional lands, and adaptive reuse of
underutilized properties for affordable housing by
December 2024. Include potential residential
development and conduct targeted outreach to
interested parties for City-owned parcel on 5062 La
Palma Avenue and conduct outreach to the three large
churches within La Palma. Evaluate opportunities for
adaptive reuse as part of outreach to Centerpointe
property owners by December 2024.
iv. Report back to City Council on findings,
recommendations and provide update on program
implementation by December 2024. By 2027,
implement short term and midterm programs
identified in the Strategic Plan.
Report to Council by
December 2024.
Implement short and
midterm programs in
Plan by 2027.
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g. Work cooperatively with the County of Orange and cities to create a regional housing bond program to help fund
affordable housing and permanent supportive housing.
Ongoing
h. Work with Orange County Housing & Community
Development to conserve existing affordable housing units atrisk of converting to market rate. Contact owners of the City’s low-income apartment complexes (Camden Place, Seasons at La Palma, and Casa La Palma) and offer funding from the City’s affordable housing asset fund toward rental rehabilitation of at least 20 units during the planning period.
2021-2029
i. Work with the Fair Housing Council to expand knowledge of first-time homebuyer programs, and promote available
programs on the City’s website, newsletters and through social media.
Ongoing
j. Affirmative Marketing and Regional Registries: Require, provide incentives, and utilize other strategies to promote affirmative marketing plans in all new housing developments.
The affirmative marketing plans will consider regional housing registries and ensure marketing materials for new
developments are designed to attract renters and buyers of diverse demographics, including individuals of any race, ethnicity, income, disability, and familial status.
Ongoing
k. In collaboration with OCHA, expand the use of housing choice vouchers in high resource areas through the following actions:
i. Develop an outreach plan and materials with targeted outreach to Census Blocks of LMI concentrations to
communicate the benefits of vouchers and tenant
rights regarding just cause evictions, limitations on
rent increases, and replacement housing
requirements if any existing residential units would be removed, based on state law.
ii. Gain a better understanding of where overpayment
and overcrowding rates are highest in the city, where
vouchers are and are not used, and how many tenants
could potentially qualify at each multifamily property
in target areas in order to develop strategies to expand use of vouchers with the goal of increasing voucher
use (63 vouchers in 2023) by at least two per year in La Palma.
iii. Inform voucher holders about their residential options in high-resource areas by developing a Housing
Ongoing
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Resources Directory available on the City’s website and updated annually.
l. Expand production of accessory dwelling units in highresource single family neighborhoods and address potential overcrowding by promoting the City’s ADU ordinance,
application, look-up tool, preapproved plans, and educational resources through the Housing SoCal page by June 2024.
Target direct outreach to areas of LMI concentration and Census Tracts south of La Palma Avenue with promotional materials annually. Increase ADU production by two units per year for a total of at least 30 units during the planning period. 2021-2029
m. Enhance City’s existing proactive code enforcement program by targeting areas of concentrated owner rehabilitation needs, resulting in repairs to minimize displacement and relocation impacts. Re-initiate volunteer home painting/repair program with local churches and home improvement stores, which was successful in the last planning period. Provide owner
rehabilitation assistance to at least a total of 16 residential units rehabilitated within areas of LMI concentration during the planning period.
2021-2029
n. Distribute direct mailers and applications to apartment complexes for La Palma Citizens’ Academy to recruit residents from areas of concentrated lower income and renters to serve on boards, committees, and other local government decisionmaking bodies annually.
Annually
o. Initiate joint use agreement between City and Centralia Elementary School District to create a public playground at Miller Elementary School and Edison Right-of-Way to benefit the LMI concentration in the eastern portion of the City. Seek grant funding opportunities by December 2026.
December 2026
p. Continue place-based strategies toward community
revitalization including:
i. Invest and prioritize City beautification projects,
including 3.85 miles of street medians, trees, and
drought-tolerant landscaping, along corridors of areas
with LMI concentrations (La Palma Avenue, Moody
Street, and Walker Avenue) by June 2025.
ii. Complete water infrastructure projects related to four (4) water main interconnections to provide emergency
and contingency water supply to 4,270 units; and
2024-2025
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replacement of large water meters for 36 residential
units by June 2024.
iii. Seek grant funding for the La Palma Avenue Slurry
Seal Project, which includes sidewalk ADA
improvements from west to east City limits, centralized in area of higher percentage (10-20%) of population
with a disability by December 2024.
q. In cooperation with the Orange County Transportation Authority, provide community education regarding transport services for individuals with disabilities. Partner with OCTA, OC Health Care Agency, and local school districts to
implement OC Safe Routes to Schools Program in its
Countywide initiatives through participation in Next STEP (ATP and REAP 2.0 funding) by December 2027.
December 2027
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6. Laguna Beach
Issue: Segregation, Disparities in Access to Opportunity, and Disproportionate Housing Needs Contributing Factors:
1. Lack of knowledge and enforcement of fair housing laws due to the following:
a. Insufficient fair housing monitoring and limited outreach capacity. b. Lack of a variety of media inputs.
c. Lack of marketing community meetings.
d. Lack of regional coordination.
2. Lack of affordable housing in high opportunity areas due to the following:
a. Historical land use development patterns and zoning, and lack of vacant land limit opportunities for larger and higher density project types. b. Past national, state, and regional racial/ethnic discriminatory practices. c. Current high cost of housing limits access to lower income households of all races/ethnicities.
d. Lack of affordable housing and need for greater access to opportunities. e. Regional coordination affects transit services, funding sources, and allocation of housing resources including vouchers.
Actions: Timeframe:
1. Increase fair housing knowledge and enforcement through the following actions:
a. Ensure that all laws, programs, and activities affirmatively further fair housing in accordance with state law. As the General Plan and Zoning Code are updated or amended, review and revise policies and code provisions to promote an inclusive community.
Ongoing
b. When considering specific plan or rezoning proposals, evaluate whether the change in zoning will help achieve fair housing goals.
Ongoing
c. Include fair housing information on the City’s website, including up-to-date fair housing laws, FHCOC services, and information on filing discrimination complaints. Proactive announcement of fair housing resources on Community Newsletter (weekly text
messaging system).
Provide link to
services on City
website by 2023
and make service
announcements at
least annually.
d. Continue to publish a Housing Assistance Guide informing community members of the Orange County Fair Housing Council (FHCOC) and its oversight of fair housing practices, for availability on the City's website and at the Planning counter.
Update annually
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e. Develop interest list for update on fair housing and affordable housing projects.
By the end of 2022
and updated
annually.
f. Update the City website with affordable housing projects. Update website semi- annually.
g. Utilize non-traditional media (i.e., social media, City website, Community Newsletter) in outreach and education efforts in addition to print media and notices.
Beginning in 2023;
ongoing
thereafter
h. As a participating City in the County of Orange Community Development Block Grant (CDBG) program, continue to support the annual contribution of CDBG funds to the Orange County Fair Housing Council (FHCOC).
Annually
i. Participate in regional efforts to address fair housing issues and monitor emerging trends/issues in the housing market. Attend quarterly OCHA Housing Advisory Committee meetings.
Quarterly
j. Petition to Orange County, administrator of the City’s CDBG program, for the fair housing provider (FHCOC) to expand landlord education on source of income discrimination and voucher programs.
Beginning in 2023.
k. Expand outreach and education on recent state laws (SB 329 and SB 222) supporting source of income protection for publicly assisted low-income households (HCVs).
Begin in 2023
2. Increase affordable housing in high opportunity areas through the following actions:
a. Establish a new Housing Program Coordinator planner position to oversee and expedite Housing Element program
implementation.
Beginning in 2023.
b. Create a comprehensive ADU Handbook with tools to facilitate ADU production.
12/1/2022.
c. Require that 25% of the total number of units or lots, whichever is greater, in new subdivisions of two or more residential units or lots and 25% of new development of three or more units on existing building sites be affordable to extremely-low-, very-low- , low- or moderate-income households or individuals.
Initiate
inclusionary
housing policy
update in 2023
with a market
feasible study.
d. Update inclusionary housing policy to enhance feasibility and production of affordable housing.
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e. Amend the Zoning Code to provide more flexible development standards and the built form for affordable housing and facilitate development of densities at or above 30 units per acre.
Complete
amendments by
2024.
f. Conduct outreach to religious institutions to provide information and technical assistance on state law regarding developing housing units on religious-use parking spaces.
In 2023.
g. Monitor financial assistance programs administered by the California Department of Housing and Community Development and apply for funding that the City is eligible for and can competitively vie for.
Annually explore
funding options
available.
h. Amend the Zoning Code to create a new zone where emergency shelters all allowed by right, then apply the zone to the Friendship Shelter site.
Zoning Code
revision adopted
by the City
Council on
December 13,
2022.
i. Amend Zoning Code to address Low Barrier Navigation Center, transitional housing, and supportive housing, SRO, and
reasonable accommodation.
By June 2023.
j. Review Zoning Code to accommodate large group homes (7+ individuals) as a residential use to be conditionally permitted in residential zones and to establish conditions for approval that are objective and provide for certainty in outcomes.
By June 2023.
k. Establish an Affirmative Marketing Plan, to include advertising and community outreach designed to reach underrepresented households to be implemented when affordable units become available.
Establish plan by
the end of 2023.
l. Initiate an update to the Laguna Canyon Specific Plan to evaluate suitability for expansion of sites, through code amendments or rezoning, to where live-work, residential, or mixed-use development is permitted.
Complete plan by
2023.
m. Continue to evaluate potential for mixed-use and work/live spaces along the Coast Highway Corridor and on vacant or underutilized commercial properties.
Establish strategy
by 2024.
n. With adoption of Phase 2 of the DSP, include incentives such as:
increased densities, increased height limits, higher lot coverage, lower parking requirements, allowances for off-site parking, allowances for lot assemblage and, and removal of upper story Adoption of Phase
2 in 2025.
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residential use limitations to assist in the development of housing
3. Make neighborhood improvements to increase access to opportunity, and preserve housing affordability, through the following actions:
a. Pursue the development of an amnesty program for unpermitted residential units.
By 2023
b. Laguna Canyon Road (SR-133) Improvements: place overhead utilities underground; active transportation improvements; reconstruct drainage channel; add dam to control storm flows.
By end of 2025
c. Coast Highway ADA South Improvements (Moss Street to Fifth Avenue): add new sidewalks; widen existing sidewalk;
reconstruct existing curb ramps and driveways to meet current ADA standards; add audible pedestrian crossing systems; repair, resurface, and restripe roadway.
By end of 2025
d. Laguna Canyon Road Median Landscaping: Replant the
landscaped median along Laguna Canyon Road between Forest Avenue and east of Canyon Acres Drive.
2023-2024
e. Continue to provide Senior Housing Repair program. Ongoing f. Monitor implementation of the Short-Term Lodging Ordinance.
Restrictions to short-term lodging are intended to help preserve rental housing stock by limiting their use for vacation rental purposes.
Annually
g. Continue to support aging in place through amortization and abatement agreements which allow residents to remain on the property under specified conditions to improve the property.
Ongoing
h. Where safety concerns can be addressed, allow residents to remain in unpermitted spaces while they are adapted to meet work/live code If funding is available, develop incentives and funding programs to assist building owners and tenants to make the building modifications necessary to conform with work/live ordinances.
By 2023
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7. Laguna Hills
Issue: Segregation, Disparities in Access to Opportunity, and Disproportionate Housing Needs Contributing Factors:
1. Concentration of more affordable housing (e.g., multifamily, mobile home park) in north Laguna Hills and the Via Lomas neighborhood.
2. Neighborhoods in south Laguna Hills are more desirable, therefore more costly, than neighborhoods in central and north Laguna Hills.
3. Availability of affordable units in a range of sizes.
4. Cost of rehabilitation or repair.
5. Availability of rentals that accept Housing Choice Vouchers.
6. Linguistic isolation of non-English speaking households.
7. Availability of high-ranked elementary schools to serve north Laguna Hills and the Via Lomas neighborhood.
8. Housing shortages regionally in Orange County.
9. Unaffordable rents and home prices.
10. Lack of partnerships with affordable housing developers
11. Concentrated areas of poverty in low-resource areas.
Actions: Timeframe:
1. Coordinate local housing efforts with federal, state, regional, and local government and/or agencies and cooperate in implementation of intergovernmental housing programs; including the following actions:
Ongoing
a. Submit CDBG applications to assist in preserving existing affordable housing stock;
Annually
b. Continue to publicize programs, such as energy-efficiency programs and state and federal funding programs;
Ongoing
c. Encourage local housing advocates to make presentations to local builders and developers, Chamber of Commerce, civic groups, and the local community re: affordable and
multifamily/higher density development.
Biannually
2. Encourage the development of ADUs throughout the City to expand housing opportunities for all income levels within existing neighborhoods, particularly for lower-income seniors, single individuals, individuals with disabilities, and small households; through the following actions:
Ongoing
a. Update the City’s current ADU Ordinance 2023
b. Promote development of ADUs through City website
c. and informational material
2023
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d. Identify and implement potential incentives to encourage production of affordable ADUs.
Ongoing
e. Monitor the production and affordability of ADUs annually to ensure the City will meet the assumption of 18 ADUs during the planning period.
Annually
f. Explore funding options to create an ADU forgivable Loan Program.
2024
3. Increase affordable housing in high opportunity areas through the following actions:
a. Establish objective design standards for residential development and analyze opportunities to permit multifamily residential in an existing commercial center.
By August 2024
b. Analyze opportunities to permit multifamily residential in an existing commercial center in north Laguna Hills.
2024
c. Mitigate regulatory constraints on the production of housing through the following actions.
i. Consider adaptive reuse ordinance by June 2024 and
implement, if appropriate, by June 2025.
2024-2025
ii. Consider inclusionary housing ordinance and present findings to City Council by June 2024 and implement,
if appropriate, by June 2025.
2024-2025
iii. Consider congregational overlay by June 2024 and
implement, if appropriate, by June 2025.
2024-2025
iv. Conduct initial review of development standards and permitting requirements by June 2025 and update
Zoning Ordinance as needed.
2025
v. Amend the General Plan and Zoning Code, as needed,
to provide adequate sites for 413 lower-income units.
2024
d. Provide incentives (e.g., expedited processing, fee waivers, and density bonuses) to facilitate set-asides for planned lowincome units, and for mixed-use development.
Ongoing
e. Promote lower-income housing development incentives on the City website.
Ongoing
f. Enact new measures that will raise local funding for construction of affordable and other needed housing types.
June 2025
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g. Develop and implement strategies to encourage and facilitate lot consolidation and phasing of residential and mixed-use developments on large sites.
Ongoing
h. Explore the potential to partner with a nonprofit organization to offer a program based on the Community Land Trust
model.
2025
i. Work with stakeholders to identify nongovernmental
constraints that may impede the construction of housing.
Ongoing
j. Increase participation in the Housing Choice Voucher Program through the following actions:
i. Provide referral services and information to City
residents on HCV program.
Ongoing
ii. Study the feasibility of a landlord incentive program for landlords that choose to accept voucher holding
tenants.
2024
4. Increase housing opportunities for special needs populations through the following actions:
a. Pursue homeless assistance grants through the Continuum of Care.
Annually
b. Assist public and private nonprofit housing developers in preparation of funding applications for special-needs
populations.
Annually
c. Conduct outreach to service providers to discuss ways the City can assist in the development of housing for lower income households.
Annually
d. Work with local organizations that provide assistance to individuals with disabilities to implement an outreach
program that informs individuals with disabilities and their families about housing and available services.
Ongoing
e. Prepare and distribute informational material on the reasonable accommodation ordinance, that will direct people to service information on the City website.
2024
f. Encourage developers to provide universal design features in housing developments.
Ongoing
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g. Provide fair housing education and information to apartment managers and homeowners associations on why denial of
reasonable modifications/ accommodations is unlawful.
Ongoing
5. Promote development opportunities in the Urban Village Specific Plan (UVSP) area, encouraging affordable housing development, through the following actions:
a. Add promotional material re: UVSP housing opportunities on the City’s website.
2023
b. Meet with prospective developers to encourage
incorporating housing for multiple income levels.
Annual
c. Consider amending UVSP to incorporate inclusionary
housing requirements.
2024
d. Provide regulatory incentives on a case-by-case basis consistent with Chapter 9-72 of the Zoning Ordinance.
Ongoing
6. Preserve existing affordable housing through the following actions:
a. Cooperate with owners of existing affordable units to secure appropriate federal funding necessary to maintain existing affordability.
Annually
b. Enforce the Municipal Code and address matters related to property maintenance that pose threat to public health, safety, or welfare.
Ongoing
c. Develop informational materials to help educate property owners on available funding programs to assist with
rehabilitation.
2023
d. Notify the State Franchise Tax Board if substandard rental housing is identified.
Ongoing
e. Work with Orange County Housing and Community Services Department to receive rehabilitation loans and grants for low and moderate-income homeowners and rental property
owners; Use CDBG funds as funding becomes available and pursue other funding sources;
Ongoing
f. Prepare and distribute informational material advertising the rehabilitation program
2024
g. Continue to pursue the extension of affordability controls for 51 units that are set to expire in 2032; prepare a “Risk Annually
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Assessment” report provided by the California Housing
Partnership Corporation
h. Provide technical assistance to preserve at-risk units; Ongoing i. Apply for state or federal funding on behalf of interested nonprofit entities, if necessary, to protect the affordability of rental units
Ongoing
j. Provide foreclosure information on City website 2023, update annually
k. Refer residents to external agencies to assist in reducing incidents of foreclosures
Ongoing
l. Require replacement housing units subject to the
requirements of SB 330 on sites identified in the sites inventory when any new development occurs on a site that has been occupied by or restricted for the use of lowerincome households at any time during the previous five years;
Ongoing
m. Prevent tenant displacement by considering the feasibility of a local Just Cause Eviction ordinance, a Local Rent
Stabilization ordinance, and a multi-lingual Right to Counsel program;
2024
7. Increase services to special needs populations through the following actions:
a. Allocate CDBG funds to nonprofits providing shelter for the homeless
Annually
b. Contract with Mercy House or other housing services
providers to help residents experiencing homelessness
obtain services.
Annually
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8. Laguna Woods
Issue: Segregation, Disparities in Access to Opportunity, and Disproportionate Housing Needs Contributing Factors:
1. Lack of affordable housing. The availability and price of land represents a significant market constraint to housing production in Laguna Woods, where there is very little residentially designated vacant land.
2. Displacement risk for existing lower-income residents due to economic pressures/motivators on property owners/managers
3. Limited access to opportunities for individuals with disabilities and other special needs due to underimproved housing stock potentially resultant of financial or physical challenges.
Actions: Timeframe:
1. Conduct a market study and then amend the existing inclusionary housing ordinance to modify the minimum percentages of new housing units that must be deed-restricted for extremely low, very low, and low-income households, as feasible and advantageous to promote the development of affordable housing.
2. Investigate potential incentives for property owners to extend and/or expand existing affordability covenants beyond the planned expiration date and/or current number of housing units, with an emphasis on incentivizing (i) affordability covenants for extremely low and very low-income housing units, and (ii) affordability covenants that apply to housing units in a range of sizes.
If feasible and economical, adopt such incentives.
3. Adopt an ordinance waiving or reducing City building permit fees for improvements to the home of a person at least 60 years of age with a qualifying disability that are made to accommodate that disability, as provided for by California Health and Safety Code Section 17951.7. Consider including provisions allowing for similar building permit fee waivers or reductions for improvements to the home of a person with a qualifying disability that are made to accommodate that disability, regardless of age.
Prepare and maintain a flyer with related information. Conduct annual outreach to nonprofit organizations known to provide medical or social services to residents with disabilities. Conduct biennial outreach to residents residing in Census Tracts 626.22 and 626.48 due to their comparatively lower economic domain scores from the TCAC/HCD Opportunity Map.
4. Provide opportunities for reimbursements, grants, or other forms of financial assistance to support home improvements that increase accessibility or functionality for individuals with special needs. Conduct annual outreach to nonprofit organizations known to provide medical or social services to residents with special needs. Conduct biennial outreach to residents residing 355
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in Census Tracts 626.22 and 626.48 due to their comparatively lower economic domain scores from the TCAC/HCD Opportunity Map.
5. Formalize a proactive code enforcement program that focuses on housingrelated rehabilitation needs, results in repairs, and seeks to mitigate potential cost, displacement, and relocation impacts on residents.
6. Improve pedestrian accessibility on sidewalks, curb ramps, crosswalks, and other public property connecting housing with transit stops, public buildings, businesses, and educational institutions. Prioritize improvements based on factors including:
a. The California Office of Environmental Health Hazard Assessment’s California Communities Environmental Health Screening Tool (“CalEnviroScreen”) scores for individual Census Tracts, with an emphasis on undertaking improvements in and around Census Tract 626.47 due to its comparatively higher CalEnviroScreen score, as feasible and economical; and
b. Education domain scores from the California Tax Credit Allocation Committee (“TCAC”)/HCD Opportunity Map, with an emphasis on undertaking improvements in and around Census Tract 626.22 due to its comparatively lower scores, as feasible and economical.
7. Pursue partnerships and seek funding to provide Laguna Woods-based housing mobility counseling services. If feasible and economical, implement such services.
8. Adopt an ordinance waiving or reducing City building permit fees, or providing other incentives, for housing projects that prepare and implement an affirmative marketing plan designed to attract renters or buyers of diverse demographics, including individuals of any race, color, religion, sex, handicap, familial status, or national origin. Prioritize incentives based on factors including racial concentrations from U.S. Census Bureau data products, with an emphasis on avoiding the creation of geographically discernable patterns of segregation or racially concentrated areas of poverty.
9. Prepare and maintain a webpage with information on housing mediation, foreclosure assistance, tenant legal counseling services, and vocational counseling services. Train City staff to make referrals using the webpage.
10. Pursue partnerships and seek funding to provide Laguna Woods-based housing mediation, foreclosure assistance, and multilingual tenant legal counseling services. If feasible and economical, implement such services.
11. Investigate potential hazard mitigation measures that would reduce or eliminate the long-term risk of residential displacement as a result of future disasters. If feasible and economical, implement such hazard mitigation measures. Prioritize improvements based on factors including economic 356
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domain scores from the TCAC/HCD Opportunity Map for individual Census Tracts, with an emphasis on undertaking improvements in and around Census Tracts 626.22 and 626.48 due to their comparatively lower scores, as feasible and economical.
12. Investigate potential incentives for property owners of apartment and cooperative housing units for which tenants pay usage-based energy costs to make energy efficiency improvements that exceed the minimum requirements set forth in the California Building Energy Efficiency Standards.
If feasible and economical, implement such incentives. Prioritize incentives for residents residing in Census Tracts 626.46 and 626.47 due to those areas being identified in this Housing Element as susceptible to displacement and having the highest renter vulnerability indices, as feasible and economical.
13. Investigate opportunities to provide rental relief for residents at risk of homelessness. If feasible and economical, implement such opportunities.
Prioritize rental relief for residents residing in Census Tracts 626.46 and 626.47 due to those areas being identified as susceptible to displacement and having the highest renter vulnerability indices, as feasible and economical. 357
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9. Los Alamitos
Issue: Disparities in Access to Opportunity and Disproportionate Housing Needs Contributing Factors:
1. Lack of housing for special needs population.
2. Lack of knowledge of fair housing laws.
3. Local land use and zoning laws.
Actions: Timeframe:
1. Encourage development of housing for special needs populations through the following actions:
a. The City shall encourage and facilitate development of housing for families and large households, the elderly, farmworkers, individuals experiencing homelessness and individuals with disabilities, including physical and developmental disabilities. b. The City will assist developers in identifying outside funding sources and support efforts to pursue those opportunities— either as group homes or in single family homes, when
appropriate and feasible.
c. The City will develop a menu to offer incentives such as density bonuses, regulatory concessions, and expedited processing. d. The City will develop and disseminate informational materials annually to developers regarding the incentive program and identified funding sources to potentially assist 5 special needs residents annually through the planning period.
Establish incentive
program and
publish on City
website by June
30, 2023.
2. Increase fair housing knowledge and enforcement through the following actions:
a. The City shall continue to provide referrals to the Fair Housing Council of Orange County for fair housing services including counseling services for tenant-landlord disputes and cases of alleged discrimination.
b. The City shall continue to publicize fair housing and complaint referral information at local community centers and in the Recreation & Community Services Schedule of Classes. The City will also provide information at City Hall and on the City’s website.
c. The City shall work with government agencies (e.g., Fair Housing Council of Orange County) and nonprofit groups (e.g., Habitat for Humanity) on anti-discrimination during housing processes for residents in protected classes, such as those with disabilities and families with children. Advertise workshops and events held by these organizations on anti-discrimination on the City’s email newsletter and Housing Element webpage.
Ongoing
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3. Collaborate and coordinate with government agencies and nonprofit groups such as the Fair Housing Council of Orange County to support outreach and expansion of lending programs for homeownership among minority populations.
Annually
4. The City currently requires a Conditional Use Permit (CUP) application for a residential care facility for seven or more individuals in the R-3 zone.
To remove any potential constraint to housing for individuals with disabilities, the City shall remove the CUP requirement for the R-3 Zone or allow residential care facility for seven or more individuals by right in another zone as appropriate.
By December 2022
5. The City will annually review its policies and zoning laws relating to fair housing and reach out to the community through surveys and workshops as appropriate. The outreach efforts will be advertised via multiple channels, such as City email newsletter, posting at City website, print material at City Hall, local community centers, and social media.
Annually
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10. Placentia
Issue: Segregation and R/ECAPs
Contributing Factors:
1. Lack of affordable housing limits housing mobility
2. Limited participation in Housing Choice Voucher Program
3. Land use and development practices
4. Lack of fair housing knowledge and enforcement
Actions: Timeframe:
1. Disseminate information on the City’s website and conduct community outreach meeting with local stakeholders and
affordable housing developers to promote affordable housing development throughout the city and discuss other Cityincentives to create affordable housing.
Annually beginning in
August 2024.
2. Conduct marketing to increase participation in the Housing Choice Voucher Program.
Ongoing
3. Collaborate with developers to develop a mechanism to develop affordable housing in highest-opportunity areas.
Annually
4. Annually review existing policies and programs for potential restrictive practices that would limit diversity within racially concentrated areas of affluence (RCAAs). If restrictive practices are identified, address prior to adoption of the new policies and programs or within six months for existing policies and programs.
Annually
5. Establish incentives for affordable developments (including ADUs and JADUs) in RCAA and high opportunity areas.
By March 31, 2025
6. Establish specific incentives for the development of affordable units the RCAAs and high opportunity areas.
By June 2025
7. Conduct Affirmative marketing to increase diversity within RCAAs. This may include, but is not limited to, noticing of affordable units/projects through direct mail targeted outreach to lower income Census Tracts, publishing advertising materials in multiple language, informing service agencies, outreach to community organizations or places of worship.
Every 2 years, beginning in
August 2024.
8. Facilitate the development and/or legalization of over 84 ADUs during the planning period by a variety of methods, including but not limited to:
2021-2029
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a. Annually pursuing funding to adopt permit-ready ADU
plans to minimize design costs, expedite permit
processing, and provide development certainty.
b. Developing an ADU Manual guiding applicants through
the construction of an ADU by December 2024.
c. Developing an ADU webpage informing the community
on ADU related codes, processes, and incentives
December 2024.
d. Developing and implementing a public awareness
campaign for construction of ADUs and the City’s
incentives utilizing all forms of media and outreach
distribution December 2024.
e. Establishing incentives for ADUs, with an emphasis on affordable ADUs by December 2024.
9. Research and establish home sharing program(s) and/or policies.
2025
10. Coordinate with local organizations to assist with matching tenants with existing homeowners. The City will assist with outreach, facilitate annual presentations, and conduct outreach to eligible and potential homeowners.
Annually
11. Facilitate the development of at least 30 units on publiclyowned properties, with an emphasis on areas with relatively higher opportunity, higher median income and RCAAs.
2021-2029
12. Increase fair housing knowledge and enforcement through the following actions:
a. In partnership the city's fair housing provider, conduct multi-faceted fair housing outreach to tenants,
landlords, property owners, realtors, and property
management companies. Methods of outreach should
include workshops, informational booths, presentations
to civic leaders and community groups, staff training,
and distribution of multi- lingual fair housing literature.
Ongoing
b. Provide general counseling and referrals to address
tenant-landlord issues and provide periodic tenantlandlord walk-in clinics at City Halls and other community locations.
Ongoing
c. Include testing/audits within the scope of work for each city's fair housing provider.
Annually
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d. Support enforcement activity and publicize outcomes of fair housing litigation.
Ongoing
e. Provide and maintain multi-lingual informational
materials on tenant legal counseling and resources.
Develop by August 2024;
disseminate annually;
update as needed.
f. Work collaboratively with local housing authorities to ensure affirmative fair marketing plans and deconcentration policies are implemented.
Ongoing
Issue: Disparities in Access to Opportunity and Disproportionate Housing Needs Contributing Factors:
1. High cost of housing in high opportunity areas
2. Limited accessible housing opportunities for individuals with disabilities
3. High cost of housing repairs/rehabilitation
4. Displacement of residents due to economic factors
5. Lack of public investment in lower opportunity areas Actions: Timeframe:
1. The City will seek to improve access to opportunity for lower-income households and other protected classes
through the following actions:
a. Providing adequate sites for affordable housing
development
Update candidate sites list
annually
b. Reduce governmental constraints to encourage
the production of ADUs
Review ADU procedures
annually and revise as needed to
reduce cost and time and comply
with state law.
c. Facilitating the production of housing for
individuals with special needs by providing
technical assistance to developers proposing
affordable housing.
Ongoing
d. Work with federal, state, and local agencies to try
to identify and secure funding for homeowners
who are interested in building an ADU and are
willing to offer it as an affordable rental.
Annually
2. Increase community integration for individuals with
disabilities.
Ongoing
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3. Continue to help develop housing projects for special needs households by providing technical assistance with tax credit applications, tax-exempt bond financing and
other public funds, including ESG, CDBG, and HOME.
Ongoing
4. Review reasonable accommodation standards and
procedures annually and update within 6 months of
annual review if not compliant with state or federal law. If not compliant, the City will process reasonable
accommodations in compliance with state or federal law
in the interim.
Annually
5. Enhance the proactive code enforcement program that
targets areas of concentrated rehabilitation needs,
resulting in repairs and mitigating potential costs,
displacement and relocation impacts on residents.
Review and revise annually
6. The City shall develop a program to collaborate with nonprofit housing providers and develop a preservation strategy. The preservation strategy will allow the City to act quickly if, and when, it receives notice of conversion. As part of the strategy, the City shall ensure compliance with noticing requirements; conduct tenant education and
pursue funding to preserve the units.
Develop strategy by 2024, apply
for funding annually thereafter.
7. Explore anti-gentrification policies and regulations to combat displacement, which especially affects lowincome residents and communities of color. These may include, but are not limited to foreclosure assistance, community land trusts, and housing trust funds.
Report to Council by October
2025.
8. Provide housing mobility counseling either directly or through referrals. This counseling may include, but is not limited to, information on opportunity areas, housing
search skills and tools, workshops, search assistance,
referrals, structured support for a time after a move to the City, landlord-tenant mediation, and retention counseling.
Ongoing
9. Engage community health workers to conduct ground
level site visits and meetings within areas of lower income to better understand resident and business barriers,
resources, and needs.
Ongoing
10. Seek funding and will review Capital Improvement
Program in order to prioritize projects in areas of lower income, to improve living environments and reduce the
risk of displacement. Examples of projects include street Annually
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improvements, multi- modal investments, safe routes to
school, parks, community facilities and amenities,
infrastructure, and other investment toward community
revitalization.
11. The City will continue to encourage and emphasize public art in areas of lower income and diversity.
Ongoing
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11. San Juan Capistrano
Issue: Segregation, Disparities in Access to Opportunity, and Disproportionate Housing Needs Contributing Factors:
1. Limited local private fair housing outreach and enforcement
2. Overcrowding in Capistrano Villas
3. Limited affordable and accessible low-income housing
4. Inability to afford and take advantage of local educational, recreational activities
5. Private discrimination against protected classes (in violation of federal Housing Law) directly limits housing choice and mobility.
6. Zoning standards that limit the ability to achieve the maximum permitted density.
7. Lower and moderate households may face displacement pressures as rents rise due to high overall housing costs.
Actions: Timeframe:
1. Contract directly with a fair housing services provider to provide specific services for San Juan Capistrano residents
Annually
2. Continue increased bilingual translation and interpretation services as well as alternative events and workshops times, locations, and formats to enable and facilitate meaningful participation from the Community of Focus Ongoing
3. Provide tenant/landlord training about fair housing laws, requirements, services, and resources.
Annually
4. Pursue development of a program to increase maintenance and necessary repairs and safety of overcrowded rental units through voluntary owner certifications and randomized inspections in a manner that does not rely on tenant complaints or lead to increased threat of retribution or displacement.
Ongoing
5. Update Density Bonus Ordinance Ongoing
6. Continue to coordinate and support community-based organizations that support after school programs, self-help training, food-assistance and counseling and access to other resources.
Annually
7. As part of the Capital Improvement Plan, coordinate with Public Works to prioritize Environmental Justice / Community of Focus areas for actions and capital improvements.
Annually
8. Rezoning to permit high density residential development in higher resource areas,
Ongoing
9. Increase housing choices through removal of regulatory and procedural barriers to higher density housing; increased incentives and requirements for construction of affordable housing,
Ongoing
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10. Amend the Inclusionary Housing Ordinance to increase the minimum percentage of lower-income affordable housing units (or in-lieu fees) to the extent feasible based on current economic analysis.
2023 and
ongoing
11. Review Architectural Control process to ensure objective design standards. 2024
12. Continue Housing Rehabilitation Grant Program. Ongoing
13. Continue to implement the mobile home park rent increase limits ordinance and the senior mobile home park overlay,
Ongoing
14. Consider new forms of rent stabilization and price control for older multifamily units to ensure existing residents are not priced out of their homes.
2024
15. Ensure compliance with and education regarding the Tenant Protection Act of 2019 (AB 1482), including maximum annual rent increases, just cause evictions, and financial compensation requirements to stabilize residents living in areas at risk of displacement.
Ongoing
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12. Seal Beach
Issue: Segregation, Disparities in Access to Opportunity, and Disproportionate Housing Needs Contributing Factors:
1. Lack of affordable housing in high opportunity areas due to local land use and zoning laws.
Actions: Timeframe:
1. The City will process zoning and General Plan
amendments for sufficient sites with appropriate densities as identified in the City’s Housing Element, to fully
accommodate the City’s remaining housing need.
2025
2. Create a mixed-use zone that meets state requirements for RHNA site designation, specifically to facilitate housing for lower income households. The zoning code update
process will accommodate all relevant state requirements regarding density and affordability and will engage with all relevant stakeholders to ensure the development
standards can result in the development of the maximum
number of units allowed and facilitate the inclusion of affordable units.
2025
3. Make information on available incentives and concessions available and evaluate their efficacy regularly.
Ongoing
4. Provide a streamlined and understandable process for the development of ADUs and JADUs, supported by
incentives and resources as they may be available. Adopt pre-approved plans. Permit 10 ADUs during the planning
period.
Revise ordinance by
September 2024 and adopt
pre-approved plans by June
2025.
5. Reduce barriers to housing development by streamlining permit processing consistent with SB 35.
By January 2024
6. Implement SB 9 requirements - Reduce barriers to housing development through simplified processing and creating
incentives to make units created affordable.
Process 2 SB 9 projects
between 2021-2029.
7. Amend the Zoning Code to allow employee housing
consistent with Health and Safety Code §17021.5 and
17021.6.
August 2025
8. Allow housing at select locations in the Main Street Specific Plan. Permit two residential units in the Main Street Specific Plan during the planning period.
By October 2025
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9. Reduce minimum unit size constraints to housing
development, especially to promote affordable housing.
By August 2025
10. Allow SROs as uses allowed by-right in the RHD Zone. By December 2026
11. Reduce Parking Requirements for Studios and 1-Bedroom Units.
By December 2026
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13. Stanton
Issue: Segregation, Disparities in Access to Opportunity, and Disproportionate Housing Needs Contributing Factors:
1. Lack of resources for fair housing agencies and organizations.
2. Displacement of residents due to economic pressures.
3. Location and type of affordable housing, including availability of affordable units in a range of sizes.
4. Lack of access to opportunity due to high housing costs.
5. Quality of affordable housing information programs.
6. Access to transportation for individuals with disabilities.
Actions: Timeframe:
1. Support fair housing services provider and efforts to minimize discriminatory housing practices.
Ongoing
2. Maintain and monitor the residential sites inventory to ensure sufficient sites remain to accommodate the RHNA allocation throughout the planning period. Receive and process development applications for residential projects.
2021-2029
3. Maintain adequate capacity to accommodate the City’s RHNA obligations at all income levels throughout the planning period. Report as required through the HCD annual report process.
2021-2029
4. Collaborate with the development community annually, including affordable housing developers, to evaluate the viability of developing city-owned land as affordable housing.
Annually
5. For all project applications, identify the need for replacement of affordable housing units and ensure replacement, if required, occurs.
Ongoing
6. Monitor the City’s existing affordable housing stock and support affordable housing developers in their efforts to develop new affordable units in Stanton. Monitor the City’s options for special needs housing and likewise support special needs housing developers.
2021-2029
7. Understand the potential for market-force economic displacement and consider programs to address the issue, if necessary.
2021-2029
8. Ensure that the City’s parking standards for residential uses are adequate while not unduly constraining housing development.
2021-2029
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14. Villa Park
Issue: Segregation, Disparities in Access to Opportunity, and Disproportionate Housing Needs Contributing Factors:
1. Lack of local private fair housing outreach and enforcement may be a significant contributing factor to fair housing issues in Orange County. Although Orange County is served by two highquality private, nonprofit fair housing organizations, they are underfunded and understaffed in comparison to the total need for their services. Victims of discrimination would be more able to exercise their rights, thus deterring future discrimination, if the capacity of existing organizations grew to meet the scale of the problem.
2. Lack of local public fair housing outreach and enforcement may also be a significant contributing factor to fair housing issues in Orange County. There are no local public entities that conduct fair housing outreach and enforcement, with the California Department of Fair Employment and Housing and HUD constituting the only public enforcement bodies that operate in Orange County. Advocates across Orange County and the state of California have reported issues with the timeline of the California Department of Fair Employment and Housing’s investigations and the standards that it applies in making probable cause determinations. A local public enforcement agency, if created, would have the potential to be more responsive to victims of discrimination in Orange County than either the state or HUD.
3. Lack of access to opportunity due to high housing costs may be a significant contributing factor to fair housing issues in Orange County. Increasing housing affordability would make it easier for low-income households to access the types of services and amenities that further social mobility.
4. General lack of a range of affordable housing opportunities, including limited affordable housing options for families
5. Limited opportunity for residential development in sites accommodating multiple family development.
Actions: Timeframe:
1. The City will continue to disseminate information regarding fair housing in a variety of locations including City Hall, the City website and the library, and conduct ongoing, proactive outreach to engage members of all socio-economic groups and recruit members of underrepresented groups to participate in City meetings. The City will continue to seek funding to support the Fair Housing Council of Orange County (FHCOC), which provides community education, individual counseling, mediation, and low-cost advocacy with the expressed goal of eliminating housing discrimination and guaranteeing the rights of all people to freely choose the housing for which they qualify in the area they desire. The City will invite FHCOC to conduct annual fair housing outreach targeted to Villa Park residents and landlords.
Ongoing
2. The City will seek to improve access to opportunity for lower-income households and other protected classes by providing adequate sites for affordable housing development, encouraging the production of ADUs, 370
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and facilitating the production of housing for individuals with special needs.
3. Recruit at least five landlords to become a participating voucher property during three-year period.
4. Coordinate with the County to assist with improving voucher mobility at local level by:
2021-2024
a. Identifying local staff to commit to 25% administrative function to support voucher mobility programs.
June 2024
b. Establishing a customer service framework including dedicated phone number, email and contact information.
June 2024
c. Establishing an annual monitoring program to evaluate the success of voucher mobility program. Provide for annual program amendments, as necessary.
By June 2024,
annually thereafter
5. Annually review the Sites Inventory and the location of new, affordable housing development to ensure equal and fair housing development practices throughout the whole City.
Annually
6. Annual meetings with developers to explore affordable housing and non-traditional single-family housing opportunities.
Annually
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15. Yorba Linda
Issue: Segregation, Disparities in Access to Opportunity, and Disproportionate Housing Needs Contributing Factors:
1. Lack of effective fair housing outreach to seniors due to digital divide
2. Private discrimination
3. Lack of knowledge of existing resources among the public
4. Low number of HCVs in the City compared to the County overall
5. Lack of affordable housing opportunities throughout the city, including in areas where rent and sale prices have become exclusive, and for special needs groups such as persons with disabilities and female-headed households
6. Need for more public investment in infrastructure and accessibility improvements in moderate resource opportunity areas
7. Challenges for housing/property upkeep due to financial/physical constraints and age of housing stock.
Actions: Timeframe:
1. Increase the distribution of fair housing materials and increase awareness of fair housing options among residents, including special needs groups and low-income residents, through the following actions:
a. By the end of 2022 have additional fair housing information posted at the Yorba Linda Senior Center site and on their digital platforms.
Hold an informational workshop in 2023 and 2025
2022-2025
b. By December 2022, conduct a fair housing information session for the City Council. Invite local nonprofits (including the Orange County Human Relations Commission, the Kennedy Commission, Making Housing Happen and People for Housing O.C.) to attend
2022
c. Publish Fair Housing information, including any community meetings, on non-traditional media such as Facebook or Instagram, and conduct targeted outreach to tenants, mobile home park residents and other lower income populations.
Annually
2. Increase public and private investment in areas of Yorba Linda that have been identified as moderate resource areas and portions of the City with higher percentages of special needs groups, through the following actions:
a. Starting in 2022, work with the FHCOC to contact landlords of affordable multifamily complexes every two years and provide fair housing information and assistance. This outreach will focus on promoting the Section 8 voucher program to landlords who have not previously participated in the program and should include multilingual materials.
Every 2 years
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b. Adopt an ordinance to expand the housing supply in High Resource single-family zones by allowing for lot splits and duplexes under the parameters of SB 9. In coordination with research being conducted at the State level, evaluate opportunities to incentivize and provide funding assistance for homeowners to provide affordable units under SB 9.
Completed in
2023
c. Continue to improve access to persons with disabilities through ADA improvement to streets, sidewalks and public facilities. Dedicate or seek funding, including annual CDBG allocations, to prioritize infrastructure and accessibility improvements in the moderate resource opportunity areas
Annually
d. Coordinate with the Orange County Housing Authority in 2023 about utilizing the mobility counseling program in Yorba Linda. This OCHA program informs Housing Choice Voucher holders about their residential options in higher opportunity areas and provides holistic support to voucher holders seeking to move to higher opportunity areas.
2023
3. Increase affordable housing options throughout the city through the following actions:
a. Adopt the Affordable Housing Overlay, Commercial Mixed-Use Overlay and Congregational Land Overlay, providing geographically dispersed sites for over 600 lower income units which foster a more inclusive community. Initiate rezoning and the Measure B election in 2024 and pay for all costs associated with the ballot measure.
Completed in
2024
b. Increase the allocation of units in Savi Ranch from 200 to 790 high density units, creating a better geographic distribution of development between the eastern and western areas of the community.
Completed in
2024
c. Promote and support the development of Accessory Dwelling Units (ADUs), including pursuing funding for rent-restricted ADUs, and seek to issue permits for over 50 units annually throughout Yorba Linda
Ongoing
d. Expand information available on affordable housing in Yorba Linda, including any community meetings on non-traditional media such as Facebook and Instagram.
Ongoing
e. Require affordable developers receiving public funds to prepare an affirmative marketing plan and encourage private developers with affordable units in their projects to prepare an affirmative marketing plan. The affirmative marketing plan shall ensure marketing materials Ongoing
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for new developments are designed to attract renters and buyers of diverse demographics, including persons of any race, ethnicity, sex, handicap, and familial status.
f. During the public hearing processes for the Affordable Housing Overlay, Mixed-Use Housing Overlay, and Congregational Land Overlay, as well as the outreach process for the Measure B election (in November 2024), utilize tools such as the “Myths and Facts About Affordable & High-Density Housing” currently on the City’s website to show what affordable housing means and who it benefits. Contact Kennedy Commission, Making Housing Happen and People for Housing O.C. for potential input. Conduct at least five educational events for the public in locations throughout the community.
Completed in
2024
g. By the end of 2022, research the development of a program that would provide low interest loans to single-family homeowners and grants to homeowners with household incomes of up to 80% of the Area Median Income to develop accessory dwelling units with affordability restrictions on their property. This research should also explore outside funds. If funding is available, establish a pilot program by December 2023 with a goal of achieving at least two deed-restricted ADUs annually; evaluate the program by the end of 2025.
2022-2025
4. Preserve the existing housing stock through the following actions:
a. Include information about rehab and maintenance resources (including the Residential Rehabilitation Program and Community Preservation Program) in City newsletters and on the website.
Include translated information when feasible. Seek to assist 10 households annually. Starting in 2022, conduct targeted outreach through annual mailings to Census Tracts 218.20 and 218.26. about available rehabilitation assistance.
Annually
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B. Aliso Viejo
Issue: Concentration
Most of the city is considered an area of high White concentration, except for a few neighborhoods with low-medium concentration (which are predominantly White) in the northern and eastern parts of the city. Since 1990, levels of concentration have been increasing but remain low.
Contributing Factors:
1. Location and type of affordable housing.
2. Limited access to opportunity due to high housing costs.
3. Insufficient fair housing outreach and enforcement.
4. Availability of affordable housing.
5. Availability of affordable units in a range of sizes.
6. Insufficient Housing Choice Vouchers.
7. Displacement of residents due to economic pressures.
Actions:
Expand access to opportunity for all protected classes
through the following actions:
1. Identify sites in high opportunity areas for new hous ing development.
2. Review policies and programs that increase the sup
ply.
3. Conduct a landlord/tenant education campaign on
fair housing laws.
4. Encourage development of a range of affordable
housing types.
5. Encourage the development of ADUs.
6. Promote Housing Choice Vouchers.
7. Educate renters about their rights.
Timeframe:
Annually and ongoing.
Issue: Disparities in Access to Opportunities
Based on analysis of fair housing complaint data, individuals with disabilities may disproportionately experience discrimination in housing.
Contributing Factors:
1. Lack of outreach and education regarding supportive services for individuals with disabilities.
2. Lack of education regarding resources available in the City and County, such as schools, transportation, and other in-home or community resources, for individuals with disabilities and single female-headed households.
Actions:
Bring existing resources to protected classes through
the following actions:
Timeframe:
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1. Review and amend (if necessary) Reasonable
Accommodation regulations and procedures.
Review and amend regulations and
procedures by the end of FY 25/26.
2. Provide information on supportive services for
individuals with disabilities, single female-headed
households, and homeless individuals via the OC
Social Services Agency.
Conduct annually by Dec. 31st of each
year.
3. Partner with OCTA and publish public transit
program info (OC Flex, OC ACCESS Service, and
youth rider free pass).
Conduct bi-annually by Dec. 31st of each
year.
Issue: Disproportionate Housing Needs
The City’s 2021-2029 Housing Element identified substandard housing conditions for low-income households as an issue facing low-income residents in the city. Additionally, housing cost burden is an issue for renters throughout Orange County.
Contributing Factors:
Substandard housing conditions due to:
1. Insufficient affordable and healthy homes for very-low incomes.
2. Lack of insufficient outreach and education on code enforcement.
3. Insufficient funding for repairs or rehabilitation.
4. Via Iglesia neighborhood has homes in need of repairs Actions:
Reduce existence of substandard housing
conditions through the following actions:
Timeframe:
1. Add information about the City's Code
Enforcement service on the City's website
for renters and owners.
Information added on City’s website to be
completed by the end of FY 25/26. Annually,
conduct one informational campaign on Code
Enforcement services with the goal of reaching at
least 10 renters and 10 owners.
2. Create educational materials about
healthy homes, and post information on
the City's website.
Educational materials to be completed by the end
of FY 25/26 and posted to the
City’s website annually.
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C. Anaheim
Issue: Segregation, including R/ECAPs; and Disproportionate Housing Needs.
While segregation levels overall in Anaheim are low, the city has neighborhoods considered to be areas of high POC segregation north of downtown and along SR-91, and south of downtown and adjacent to Disneyland. These areas are predominantly Hispanic. The neighborhoods north and south of downtown also have a higher percentage of overcrowded units than other neighborhoods in the city, and the areas north of downtown are home to multiple publicly supported housing developments. Additionally, housing cost burden is an issue for renters throughout Orange County. Anaheim also has one R/ECAP to the northeast of Disneyland, along Ball Rd and I-5. This Census Tract is predominantly Hispanic, as are all the surrounding neighborhoods. Additionally, Anaheim Hills is considered an area of high White segregation.
Contributing Factors:
Historic practices of redlining and legal racial segregation have created many of the residential patterns that still exist today. Additionally, the high cost of land and existing housing in Anaheim (and throughout Orange County) are significant constraints to the development of new affordable housing and access for families to existing housing.
Actions: Timeframe:
Increase the supply of affordable housing in high
Opportunity areas through the following actions:
1. Disseminate on the City’s website,
information material to promote and facilitate
implementation of state and City regulations
and incentives to create affordable housing.
2. Develop and maintain a database of
affordable housing developers working in
California; and hold an annual workshop to
engage and collaborate with affordable
housing developers on these topics.
Develop webpage, including housing element
candidate site list, and developer database
and hold first annual workshop by October
2024.
Update housing element candidate site list
annually in conjunction with Housing
Element Annual Progress Report.
Review by October 2025, and revisions, if
necessary, by October 2026.
3. Disseminate on the City’s website,
information material to promote and facilitate
AMC 18.38.215 Residential Uses of Motels,
Commercial, and Office Structures.
4. Develop and maintain a database of existing
motels, commercial, and office structures for
which conversion could be feasible.
Develop information and database and
participate in annual affordable housing
workshop by October 2025.
5. Encourage the production of ADUs.
6. Continue to seek opportunities to defray costs
associated with construction to homeowners.
Continue to refine existing review process for
ADUs not using pre-approved plans.
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7. Develop, subject to funding availability, a
program to facilitate the construction of deedrestricted ADUs.
Continue to refine existing review process for
ADUs using pre-approved plans and expand
pre-approved plan catalog.
Continue to support and promote programs
such as the Orange County Housing Finance
Trust’s Affordable ADU Loan Program, when
offered.
Continue to seek potential local, state, and/or
federal funds to establish an Anaheim
Housing Authority affordable ADU grant/loan
program.
In conjunction with Annual Progress Report,
identify and track ADU construction in high
and highest resource areas/Racially
Concentrated Areas of Affluence (RCAAs).
Conduct review by October 2025, and if ADU
construction is disproportional to the number
of units, develop targeted outreach with a
goal of improving the ADU/overall dwelling
unit metric for the areas relative to other
residential areas in the City.
8. Continue to regularly monitor deedrestricted, affordable housing units that exist citywide.
9. Collaborate with nonprofit housing providers
and develop a preservation strategy to meet
the City’s Quantified Objective for preserving
60 At-Risk Units (30 Very Low- and 30 LowIncome).
Continue monitoring all deed-restricted
affordable housing units annually and add
new properties as applicable.
Develop preservation strategy for 60 units
converting in 2027 – 2031.
Issue: Disparities in Access to Opportunities
Hispanic residents have the least access to low-poverty neighborhoods, neighborhoods close to high performing schools, and neighborhoods with high labor force participation and human capital. Geographically, neighborhoods near the downtown have low environmental health, low education scores, low economic scores; but good access to HQTAs. Conversely, Anaheim Hills, which is a predominantly White area, has the best access to environmentally healthy neighborhoods with low poverty rates, high education scores, and high economic scores.
Additionally, based on analysis of fair housing complaint data, individuals with disabilities disproportionately experience discrimination in housing. 378
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Contributing Factors:
A lack of affordable housing in high opportunity areas (due to the factors discussed above) contributes to the disparities in access to opportunities. Additionally, specific groups in the city face the unique housing challenges that impact access to opportunity, including:
• Seniors:
o Having limited and fixed incomes.
o Disproportionately higher healthcare costs, adding monthly living costs. o Require customized housing features due to mobility and self-care limitations. o Transit dependency.
o Limited in-home support, due to living alone.
• Individuals with physical and developmental disabilities:
o Need for specialized housing to accommodate disabilities. o Higher incidence of dependent living needs.
o High incidence of unemployment and having fixed income. o Need for supportive services.
• Large person households:
o Lack of affordable housing with sufficient bedroom counts. o Options for larger bedroom counts in rental units.
o Higher monthly cost burden.
o Affordable options for large family households.
o Childcare needs for working families.
• Single parent households
o Affordable housing options.
o Rental and for sale housing options.
o Higher monthly cost burdens with single-income families. o Childcare needs for working families.
• Farmworker households
o Affordable housing options.
o Higher incidents of cost burden for housing.
o Rental and for sale housing options.
• Extremely Low-Income households:
o Need for increased affordable housing options.
o Markedly higher incidents of cost burden for housing. o Need for smaller housing unit options such as SRO’s.
o Rental assistance.
o Higher incidents of homelessness.
o Higher likelihood for transitional and supportive housing. • Residents experiencing homelessness:
o Need for increased affordable housing options.
o Need for smaller housing unit options such as SRO’s.
o Rental assistance.
o Higher likelihood for transitional and supportive housing. o Need for emergency shelters.
o Need for stable health care.
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Actions: Timeframe:
The city will ensure equal access to housing, expand access to opportunity for all protected class groups, and increase community integration for individuals with disabilities through the following actions:
1. Continue to provide an estimated 6,500 Section 8 Rental Assistance Vouchers annually, subject to federal funding availability, to qualified tenants.
2. Develop and maintain a database of existing housing in high and highest resource areas/Racially Concentrated Areas of Affluence (RCAAs) which has the potential to provide
voucher-based unit(s), including ADUs.
3. Develop a targeted outreach program to recruit potential additional landlords in these areas.
Continue to award all funded
Section 8 Rental Assistance
Vouchers annually.
Develop database and conduct
first annual outreach program
by October 2025.
Target and increase the portion
of Section 8 Rental Assistance
Vouchers leased in high and
highest resource areas/Racially
Concentrated Areas of
Affluence (RCAAs) in planning
period.
4. In partnership with the Fair Housing Council of OC,
disseminate and display for public viewing information
regarding fair housing law applicable to landlords, tenants, sellers, buyers, real estate professionals and others in the housing industry at City Community Centers / Family
Resource Centers/ Youth Centers.
Include in Scope of Services for
Fair Housing Council of OC no
later than October 2026.
5. Continue to implement the Homelessness Action Plan,
including the four overarching principles:
• Housing First: The City of Anaheim commits to following nationally recognized best practices in addressing
homelessness including Housing First practices and the
belief that housing and housing support services are the solutions to homelessness.
• Person-Centered: All programs funded by the City strive to be person- centered, including prioritizing traumainformed care and acknowledging that people experiencing homelessness understand best what
services and supports are needed to help them gain and
keep housing that will resolve their homelessness.
• Equity: The City commits to incorporating equity into service delivery systems and using data to evaluate gaps in service and identify areas of improvement so that
every household in City- funded programs receives
Ongoing with update to the
Homeless Action Plan for July
2024 – June 2028.
The Homeless Action Plan has
the following metrics:
Decrease unsheltered
homelessness by 70% and
overall homelessness by 50%.
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relevant and affirming support from the City’s network of providers.
• Data-Driven Solutions: The City commits to the
utilization of data to drive funding decisions and
solutions to homelessness. This includes evaluating the efficacy of programs and continual monitoring of the
City’s portfolio of interventions to ensure collective
efforts are meeting the needs of the community while
making gains against agreed upon community goals.
The Plan identifies Unsheltered Households, Chronically Homeless Individual Households, Families, Veterans,
Transition-Aged Youth, and Seniors as unique
populations experiencing homelessness within the City.
6. Increase community integration for individuals with
disabilities by continuing to assist in the development of housing projects for special needs households by providing technical assistance with tax credit applications, tax-exempt bond financing and other public funds, including, ESG,
CDBG, and HOME.
On-going, with annual review
and adjustments, if
adjustments are required and
applicable.
7. The City shall continue to monitor to ensure the
effectiveness of reasonable accommodation standards and procedures and maintain compliance with federal and state housing laws.
On-going, with annual review
and adjustments, if
adjustments are required and
applicable.
8. In partnership with the Fair Housing Council of OC, provide and maintain multi-lingual informational materials on
tenant legal counseling and resources with the goal of
eliminating housing discrimination and guaranteeing the rights of all people irrespective of race religion, sex, marital status, ancestry, national origin, color, age, family size or disability to freely choose the housing for which they qualify in the area they desire.
9. Continue to participate in City of Anaheim Neighborhood Services Mobile Family Resource Centers as well as
agencies and associations who specialize in supporting
disabled tenants including those with hearing, vision,
cognitive, ambulatory, self- care, and independent living difficulties consistent with data from Anaheim residents reporting a disability.
Continue to provide estimated
annual allocation of $100,000,
based on program funding
availability.
Annually evaluate program
effectiveness and adjust Scope
of Services as appropriate and
based on available funding.
Target an increase in the
number of households served
per funding dollar.
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D. Buena Park
Issue: Segregation
Segregation levels in the city have increased since 1990 but remain low overall. However, the following areas in the city are considered to have high POC segregation: the northeast corner of the city, which is predominantly AAPI; and the neighborhood between I-5, Artesia Blvd, Beach Blvd, and the LA County line, which is predominantly Hispanic.
Contributing Factors:
1. Concentration of Hispanics/Latinos of any race and non-Hispanic Asian groups experiencing limitation to housing opportunities.
2. Barriers to mobility.
3. Lack of opportunities for residents to obtain housing in higher opportunity areas.
4. Housing Choice Vouchers.
Actions: Timeframe
The city will increase affordable housing opportunities in high opportunity areas through the following actions:
1. Amend the city's Zoning Ordinance to establish provisions for Low Barrier Navigation Centers (LBNC) consistent with state law.
By the end
of 2023
2. Continue to annually monitor and facilitate the preservation of at-risk affordable housing units throughout the community. Facilitate new housing developments accessible to the elderly and disabled individuals throughout the community.
Through these steps, the city's goal will be to preserve 130 units considered to be "at-risk" of market-rate conversion.
3. Facilitate new housing developments accessible to the elderly and disabled individuals throughout the community, with efforts targeting Census Tracts 086801, 086803, 110201, 110202, 110302, and 110500. Through this step, the city's goal will be to increase the supply of accessible units by at least 25 percent.
4. Continue to administer city-operated programs to assist households with disabilities with architectural modifications to their homes and continue to implement the provisions of the Americans with Disabilities Act (ADA).
5. Provide information in public places regarding the city's reasonable accommodation ordinance and make information available on this program more widely available.
6. Continue to facilitate/process Reasonable Accommodation requests to ensure equal housing opportunities. Through this step, the city's goal is to ensure approval of 100 percent of the reasonable accommodation applications submitted.
7. Support Infill, Site Recycling and ADU construction throughout the community.
Through this step, the city's goal will be to reach its RHNA obligation to meet the community's needs.
Ongoing
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8. Continue to provide outreach and education to housing providers and potentially qualified residents regarding Housing Choice Voucher program, with efforts targeting Census Tracts 086801, 110110, 110116, 110201, 110202, 110303, 110401, 110402, 110500, 110603, and 110606. Through these steps, the City's goal will be increasing participation in the voucher program by 20 percent.
Issue: Disparities in Access to Opportunities, including Homeownership.
Hispanic and Black residents have less access than other groups to neighborhoods with low poverty rates and high performing schools. Geographically, the neighborhoods in the center of the city, between I-5 and the Artesia Freeway (SR-91), have poor environmental health, lower educational scores, and lower economic scores.
Large disparities in homeownership rates exist between White households, who have the highest rate, and Black households, who are least likely to own their own home. Additionally, housing cost burden is an issue for renters throughout Orange County.
Contributing Factors:
1. Lack of affordable housing in a range of sizes.
2. Land use and zoning laws.
Actions: Timeframe:
The city will increase affordable housing opportunities in high opportunity areas through the following actions:
1. Amend the zoning code to enable and promote residential development through use of the mixed-use overlay zones, religious congregation and fraternal site overlay zones, and housing opportunity overlay zones, among other planning tools. These initiatives provide new opportunities for a variety of residential development types and prices and includes areas where residential development was previously not allowed.
By end of
2024
2. Prepare educational material, develop pre- approved site/floor plans, and establish a monitoring program to ensure city is on track to meeting ADU construction goals. Through these steps, they will be to facilitate construction of at least 16 ADUs throughout the community.
By early
2025
3. Provide technical and financial (subject to availability) assistance for singlefamily residential additions to eliminate overcrowding conditions, with efforts targeting Census Tracts 110402, 110603, and 110606. Through these steps, it will be the city's goal to provide residential rehabilitation assistance to approximately 160 units.
4. Continue to promote use of the state Density Bonus Law through website materials and counter assistance.
5. Promote, increase, maintain homeownership for LMI households, as well as residential rehabilitation assistance for senior and down payment assistance Ongoing
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programs for young families with assistance throughout the community, with efforts targeting Census Tracts 086803, 110201, 110202, 110302, 110401, 110402, 110500, 110603, 110607). Through these steps, the city's goal will be to increase assistance to eligible residents by 25 percent.
6. Continue to enforce city codes to eliminate and prevent unsightly or hazardous conditions in residential areas throughout the community, with efforts targeting Census Tracts 110603, 110500, 110301, 110302, and 110401 located adjacent to limited access freeways. Through these steps, the city's goal will be to reduce blighted conditions by 20 percent.
7. Continue to participate in Orange County assessments and programs as a participating city in the Analysis of Impediments to Fair Housing.
8. Continue to promote fair housing among all income categories throughout the community.
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E. Costa Mesa
Issue: Segregation and R/ECAPs
There is moderate segregation between Hispanic and White residents in the city, though these levels declined slightly between 2000-2010. Geographically, the neighborhoods between downtown and the Costa Mesa Country Club are areas of high POC segregation, with a predominantly Hispanic population. The largest number of publicly supported housing units and the highest concentration of vouchers in the city is in this area. The city’s one R/ECAP is also located here, in the neighborhood between Newport Avenue and Placentia Avenue, south of 19th Street. The neighborhoods in East Side Costa Mesa (east of SR-55 and south of Mesa Drive) are all areas of high White segregation, as are the neighborhoods north of the Country Club and the neighborhoods between Estancia High School and Canyon Park.
Contributing Factors:
1. Housing discrimination.
2. Lack of affordable housing due to governmental and market constraints.
Actions: Timeframe:
The City will take the following meaningful actions, in addition to resisting discrimination, to overcome patterns of segregation based on protected characteristic, as defined by California law:
1. Continue to contract with the Fair Housing Foundation or other fair housing service provider and provide information regarding the Public Law Center to address Housing Discrimination and unfair lending, including promoting mediation services, foreclosure assistance and/or multilingual tenant legal counseling services. Promote available services on the City’s webpage.
Ongoing
2. Continue to enforce the City’s Inclusionary Housing Ordinance, which was approved on August 6, 2024, and became effective on September 6, 2024.
Ongoing
3. Support the development of affordable housing through the following efforts:
• Continue to evaluate programs and incentives to encourage the development of affordable housing.
• Make materials available to applicants regarding the City’s affordable housing ordinance.
• Develop additional incentives and materials as state
legislation provides additional incentives.
• Continue to pursue funding and partnerships with affordable housing builders.
Ongoing
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Orange County 210 25-29 Regional AFH
4. Amend the City’s Zoning Code to meet requirement set forth in the California Health and Safety Code Sections 17021.5 and 17021.6, which requires the City to permit farmworker housing by‐right, without a conditional use permit, in single‐family zones for six or fewer individuals and in agricultural zones with no more than 12 units or 36 beds. Until the zoning code is updated, the City will process any proposed farmworker housing by-right in single-family zones pursuant to State Law.
Revise Zoning Code in
2025
5. Review and update the Zoning Code to comply with the State Density Bonus Law as part of the City’s rezone program. In the meantime, continue to process State Density Bonus Law
requests and project in compliance with state law.
Revise Zoning Code in
2025
6. Review planning application fees to avoid creating a constraint to the development of affordable housing, as part of the City’s rezone program.
Revise Zoning Code in
2025
7. Reduce barriers to construction of housing for extremely low and lower-income households through the following actions:
• Subsidize up to 100 percent of the City’s application processing fees for qualifying developments where all units are affordable to 80 percent AMI or lower, as funding is available.
• Annually promote the benefits of this program to the
development community by posting information on its
webpage and creating a handout to be distributed with land development applications regarding development
opportunities and incentives.
• Proactively reach out to developers at least once annually to identify and promote development opportunities.
• Adopt priority processing and streamlined review for
developments with units affordable to lower income
households.
• Support funding development applications throughout the planning period for projects proposing units affordable to lower income households.
Ongoing
8. Review and revise the Zoning Code’s requirements for residential off‐street parking for multi‐family projects to facilitate the development of multi‐family housing, and specifically affordable housing.
Revise Zoning Code in
2025
9. Promote the development of ADUs through the following actions:
Complete the update to
ADU regulations in
municipal code by April
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• Review and revise the City’s ADU ordinance as necessary to comply with state law.
• Maintain a dedicated web page that promotes ADU
development.
2025. Maintain web page
on ongoing basis.
Issue: Disparities in Access to Opportunities
Hispanic residents have the least access to low-poverty neighborhoods, neighborhoods close to high performing schools, and neighborhoods with high labor force participation and human capital. Geographically, the neighborhoods downtown and west of downtown are less environmentally healthy and have lower education and economic scores. These are also predominantly Hispanic neighborhoods. Conversely, neighborhoods east of Newport Boulevard (SR-55), which are predominantly White, have higher education and economic scores, are more environmentally healthy, and have lower poverty rates. Additionally, Black, Hispanic, and Native American residents are less likely to own their home than White and AAPI residents.
Additionally, based on analysis of fair housing complaint data, individuals with disabilities disproportionately experience discrimination in housing.
Contributing Factors:
1. Unfair lending practices
2. Approximately 86 percent of housing units were built prior to 1989 before the Fair Housing Act and state laws regarding accessibility requirements for individuals with disabilities were adopted.
Actions: Timeframe:
The City will take the following meaningful actions, in addition to resisting discrimination, to foster inclusive communities free from barriers that restrict access to
opportunity based on protected characteristic, as defined by California law:
1. Continue to contract with the Fair Housing Foundation or other fair housing service provider and provide
information regarding the Public Law Center to address
Housing Discrimination and unfair lending, including
promoting mediation services, foreclosure assistance
and/or multilingual tenant legal counseling services.
Promote available services on the City’s webpage.
Ongoing
2. Continue operating the Owner-Occupied Housing
Rehabilitation Program, which may be used to assist
qualified property owners in improving single-family
residential properties, including health and safety
repairs such as mechanical plumbing, electrical,
roofing, security, medical emergency requirements,
On an annual basis, provide
informational materials on the
Owner‐Occupied Housing
Rehabilitation program; encourage
the participation of seniors,
veterans, and disabled residents in
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Orange County 212 25-29 Regional AFH
and/or aid the mobility of the physically disabled and/or elderly.
this program; and evaluate the
effectiveness of this program and,
if necessary, modify program
characteristics.
3. Increase the availability of accessible housing for
individuals with disabilities through the following
actions:
• Review and revise the Reasonable Accommodation
procedure to promote access to housing for
individuals with disabilities, address potential
constraints and establish potential objective
standards, and provide guidance and amend as
necessary to promote greater certainty on how
approval findings will be implemented.
• Meet with local organizations and developers to
promote access to housing for individuals with
disabilities and address potential constraints.
The City is currently in the process
of reviewing its Reasonable
Accommodation procedures and
anticipates bringing any
recommendations to Planning
Commission and City Council in
2025. Other efforts are ongoing.
4. Increase the availability of transitional and supportive housing through the following actions:
• Amend the Zoning Code to include transitional and
permanent supportive housing within the City’s
land use matrix in compliance with Senate Bill 2 and
Government Code Section 65651.
• Monitor the inventory of sites appropriate to
accommodate transitional and supportive housing.
• Proactively engage relevant organizations to meet
the needs of individuals experiencing
homelessness and extremely low‐income
residents, including the Costa Mesa Network for
Homeless Solutions, which aims to provide a
comprehensive system programs and services for
residents experiencing homelessness and those at
risk of homelessness.
Revise Zoning Code in 2025. Other
efforts are ongoing.
5. Review and revise the City’s Zoning Code and
application procedures applicable to group homes to
promote objectivity and greater approval certainty
similar to other residential uses.
The City is currently in the process
of reviewing its Group Homes
procedures and anticipates
bringing any recommendations to
Planning Commission and City
Council in 2025.
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Orange County 213 25-29 Regional AFH
F. Fountain Valley
Issue: Disproportionate Housing Needs
Housing cost burden is an issue for renters throughout Orange County, including Fountain Valley.
Contributing Factors:
1. Stigma associated with Housing Vouchers: A large percentage of rental households in Fountain Valley spend more than 30 and 50 percent of household income on monthly rent and utilities. While this may be due in part to residents being willing to pay more for access to high performing school districts, there may also be a stigma associated with the use of Housing Vouchers, both by property owners and tenants.
2. Lack of additional housing options. The City’s housing supply has not increased at a rate commensurate with regional demand, driving costs higher and limit housing choices for existing residents looking to remain in Fountain Valley (adult children eager to move out of their parent’s house and older adults looking to downsize) and potential new residents looking for more affordable options in Fountain Valley.
Actions: Timeframe:
Expand voucher use by 50 tenants by 2028, and extend affordability term of 70 units in the Guadalupe Manor an additional 20-30 years by 2029, through the following actions:
1. Coordinate with OCHA to generate a detailed understanding of where overpayment rates are highest in the city (as of latest available Census data), where vouchers are and are not used, and how many tenants could potentially qualify at each multifamily property in target areas.
By 2028
2. Update Development Code consistent with state law and produce residential project flow-chart and/or informational sheets, consistent with SB 35 and SB 330.
By 2026
3. Coordinate with OCHA and FHCOC to develop an outreach plan and materials to communicate the benefits of vouchers.
By 2026
4. Complete study of options to augment/adjust affordable housing preservation program for possible application of funds for those overpaying.
By 2026
5. Distribute outreach materials through means that reach target populations (e.g., those receiving subsidized school lunches). Conduct direct outreach to five properties (tenants and owners) in Census Tracts illustrating high rates of rental overpayment.
By 2026
6. Secure extended affordability for Guadalupe Manor through at least 2058. By 2029 389
Orange County 214 25-29 Regional AFH
Increase supply of affordable housing through the following efforts:
1. Evaluate options to apply affirmative advertising requirements to incomerestricted units in the Slater Avenue project.By 2026
2. Adopt Inclusionary Housing Ordinance. By 2024
3. Establish procedures and requirements that will ensure affirmative advertising requirements are applied to and conducted for all future income-restricted housing developments.
By 2026
4. Adopt 2045 General Plan. By 2024
5. Adopt appropriate pre-vetted ADU site plans, with the goal of permitting 100 ADUs affordable to lower income households in high and highest resources areas by 2026 (as measured from June 30, 2021).
By 2026
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G. Fullerton
Issue: Segregation
Areas of the city considered to have high POC segregation include most of the neighborhoods west of Harbor Blvd and north of Malvern Ave, which have predominantly AAPI populations.
Contributing Factors:
1. Lack of resources for fair housing agencies to conduct more rigorous testing and audits, outreach, training, public education campaigns.
2. Lack of language access.
Actions: Timeframe:
1. Provide informational seminars to area residential real estate agents and brokers on fair housing laws and regulations.
Provide training to at least
15 real estate agents and
brokers annually.
2. Work with tenants, tenant advocates to identify violations of fair housing federal and state fair housing laws and support prospective and existing tenants who are experiencing
discrimination.
Annually
3. Provide trainings for property owners/managers on the requirements of federal and state fair housing laws to prevent discrimination.
Provide training to at least
15 property owners and
managers annually.
4. With the Fair Housing Foundation, support an annual Fair Housing Audit Report that assesses typical or timely marketbased suspected areas of discrimination.
Review methodology for a
Fair Housing Audit by
January 2025
5. Affordable Rental Housing Counseling Services: Provide funding for information and referral services that direct families and individuals with financial resources for housing rental or purchase, locating suitable housing, and obtaining housing with special needs facilities such as disabled-accessible units.
Hold at least four
informational events
between 2025-2029; assist
at least 50 residents and
landlords annually.
6. Create a Language Access Plan based on HUD guidelines and publish on the City’s website: The goal of the Language Access Plan is to survey, maintain and publish a list of multi-lingual staff capacity at City Hall so that staff may respond to the needs of Limited English Proficiency households.
Create a Language Access
Plan by January 2025.
Maintain multilingual staff
capacity at City Hall on an
ongoing basis.
7. Ensure that local housing programs respond to the needs of a culturally diverse community that includes multi-generational families, a variety of living arrangements, and Limited English Proficiency households. Collaborate with community groups, including faith-based and nonprofit organizations, to provide Review the existing fair
housing marketing plan
every two years to ensure
compliance with current
City policy to Affirmatively
Further Fair Housing and
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Orange County 216 25-29 Regional AFH
outreach on housing resources to all types of households and those households with Limited English Proficiency.
make necessary changes
within six months.
8. Add information on fair housing laws and resources on the City’s website regarding housing programs in several
languages.
By January 2025
9. Seek opportunities to expand outreach and public education strategies on available tenant protection, fair housing services, and homeownership education to reach vulnerable households by offering information in multiple languages, targeted social media efforts, combining information with other assistance programs, distributing resources through local schools and colleges, and partnering with community-based organizations. 2021-2029
Issue: Disparities in Access to Opportunities
Hispanic residents have the least access to low-poverty neighborhoods, neighborhoods close to high performing schools, and neighborhoods with high labor force participation and human capital. Geographically, neighborhoods in southeast Fullerton (which are predominantly Hispanic), have relatively low economic and education scores, poor environmental quality, and relatively high poverty rates. Conversely, neighborhoods in the northern part of the city, which are predominantly White or AAPI, have higher education and economic scores, better environmental health, and lower poverty. Additionally, based on analysis of fair housing complaint data, individuals with disabilities disproportionately experience discrimination in housing.
Contributing Factors:
1. Location, type, and supply of affordable housing.
2. Land use and zoning laws.
3. The availability, type, frequency, and reliability of public transportation.
4. Location of environmental health hazards
5. Lack of investment in community-based infrastructure and services
6. Lack of access to housing mobility
Actions: Timeframe:
1. Implement changes to the in-lieu fee
structure and the desire and ability of
developers to contribute to an affordable
housing trust fund. Adopt incentives such as
increased densities, increased height limits,
reduced parking standards, and ministerial
review for projects that incorporate increased
affordable units or deeper levels of
affordability.
Complete a feasibility study on in-lieu
payments to a Housing Trust Fund by
January 2026. If feasible, amend the
municipal code to allow for an in-lieu fee
structure by December 2027 and implement
an Inclusionary Housing Ordinance by
December 2029.
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Orange County 217 25-29 Regional AFH
2. Facilitate the development of housing for
individuals with disabilities (including
developmental disabilities) through
incentives for affordable housing
development with services, resources, and
assistance.
Develop 25 housing units for special needs
households between 2021-2029.
3. Provide financial support to organizations
that provide supportive housing for
emancipated foster youth (ages 18-21) who
are homeless or at immediate risk of
becoming homeless.
Assist at least 10 foster youth with
supportive housing between 2021-2029.
4. In compliance with recent updates to the
Surplus Land Act (AB 1255, 2019-Rivas; AB
1486, 2019-Ting), identify City-owned land for
the development of affordable housing. If
surplus properties are identified, pursue
development via a competitive Request for
Proposals or other processes.
Annually, assess the list of surplus sites and
solicit development via a competitive RFP
process or other forms of partnership such
as land lease agreements.
5. Acquire funds from local, state, and federal
grant opportunities, including the HCD Infill
Infrastructure Grant Program, to support the
development of affordable housing, housing
for special needs, and support service
projects. When a critical mass of state
(various HCD programs) and/or federal
(CDBG, HOME) funding is available, the City
will issue a competitive Notice of Funding
Availability with objective criteria to
transparently identify the best non-profit
affordable housing developer to partner with
on new affordable housing developments in
the city.
Partner with at least one nonprofit housing
developer biennially throughout the planning
period and support the entitlement of at least
400 subsidized housing units affordable to
extremely low-, very low-, and low-income
households in the city during the planning
period.
6. Partner with Orange County Housing Finance
Trust to secure funding for affordable
housing in Fullerton.
Conduct feasibility study for an affordable
housing trust fund by January 2027.
7. Develop a web-based Housing Development
Toolkit that outlines a step-by-step process
for residential development, including
identifying steps in the entitlement and
building permit process, detailed information
on development incentives, and funding
Publish Housing Development Toolkit on
City’s website by December 2026.
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Orange County 218 25-29 Regional AFH
programs and resources for affordable
housing development.
8. Review the General Plan, applicable Specific
Plans, and Zoning Code and Zoning Map to
evaluate opportunities for removing barriers
to housing production such as adding
housing capacity and accommodating a
greater mix of dwelling types and sizes in
High and Highest Resource areas identified
by the California Tax Credit Allocation
Committee (TCAC), focusing efforts in
northeastern and northwestern Fullerton.
Recommend amendments, as necessary, to
accommodate added housing capacity in
these areas. Additionally, review the Zoning
Code to identify opportunities to increase and
encourage a greater mix of dwelling types
and sizes, specifically housing types that may
accommodate moderate-income households
(e.g., duplexes, triplexes, fourplexes,
townhouses, courtyard buildings), in lowerdensity residential areas and mixed-use zones citywide and amend the Zoning Code
as needed (i.e., implementation of LTD).
Review the General Plan, applicable Specific
Plan, and Zoning Code and Zoning Map by
June 2025 and implement any changes by
January 2026. Following adoption of zoning
code changes, monitor at least 1,801
moderate-income units and 2,238 lowerincome units to be constructed annually in High and Highest Resource areas as
designated by TCAC. Permit the
development of at least 150 moderateincome dwelling types in the neighborhoods of E Las Palmas Dr/N Sunnywood Dr, Craig
Park, Sunny Hills, Bastanchury Rd/Fairway
Isles Dr, Acacia Park, and Byerrum Park
(Racially Concentrated Areas of Affluence) by
the end of 2029.
9. Identify and advertise housing opportunity
sites within one-quarter mile of public transit
stops in northern Fullerton. Educate
developers on the Transit Oriented
Development (TOD) Housing Program,
and/or pursue funding to increase transit
infrastructure in northern Fullerton.
On an ongoing basis, consult with interested
developers on the TOD Housing Program.
Conduct a study with OCTA to identify capital
projects to increase transit infrastructure by
2026. Apply for TOD Housing Program funds
as NOFA becomes available.
10. Monitor lot splits and two-unit developments
under SB 9, provide technical assistance to
homeowners, and develop or adjust
development standards as needed. Provide
easily accessible information and resources
about SB 9 on the City website. Conduct
outreach to homeowners’ associations in the
neighborhoods of E Las Palmas Dr/N
Sunnywood Dr, Craig Park, Sunny Hills,
Bastanchury Rd/Fairway Isles Dr, Acacia Park,
and Byerrum Park, and the neighborhoods in
Beginning in 2025, meet with at least one
homeowners’ association annually in the
areas of northwest Fullerton and the
neighborhoods of E Las Palmas Dr/N
Sunnywood Dr, Craig Park, Sunny Hills,
Bastanchury Rd/Fairway Isles Dr, Acacia Park,
and Byerrum Park to provide education on
SB 9 implementation. Amend the Zoning
Code to comply with SB 9 by December
2025.
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Orange County 219 25-29 Regional AFH
northwest Fullerton, and provide information
on SB 9.
11. Conduct outreach to religious institutions and
provide technical assistance for interested
parties to develop affordable housing on sites
zoned religious institution.
Starting in 2025, annually mail or email
resources on developing affordable housing
to all religious institutions in the city with
underutilized land. Conduct follow up calls
with institutions with sites that hold the most
potential based on location and size,
prioritizing potential sites in the
neighborhoods of E Las Palmas Dr/N
Sunnywood Dr, Craig Park, Sunny Hills,
Bastanchury Rd/Fairway Isles Dr, Acacia Park,
and Byerrum Park since they are Racially
Concentrated Areas of Affluence. By
December 2026, present information during
at least one meeting with the board and/or
members of OC United. By the end of 2027,
provide technical assistance for the potential
development of at least one affordable
housing development on a religious
institution site.
12. Conduct outreach to people experiencing
homelessness with the Illumination
Foundation and the OC Health Care Agency,
focusing efforts in areas where there is a high
concentration of homeless individuals in the
neighborhoods of Independence Park, Santa
Fe District/SoCo, and Gilbert Park, and along
arterial boulevards and commercial centers.
Provide resources to connect individuals with
shelter space in Fullerton and as needed, to
services in surrounding cities.
Annually allocate funding and City resources
to support outreach efforts in coordination
with the Illumination Foundation and the OC
Health Care Agency to provide information
and resources to those experiencing
homelessness. Annually fund the Fullerton
Police Department’s Homeless Liaison
Officer Unit, and as funding is available and
based on need, increase the number of
officers to provide services for residents
experiencing homelessness.
13. Adopt an ordinance for new development
standards to allow additional ADUs that meet
basic setbacks and square footage
requirements on properties exceeding one
acre in the R-1 and R-2 zoning districts. The
ordinance shall allow at least two ADUs on
qualifying properties if such properties can
safely accommodate two ADUs (e.g., that the
properties have adequate sewer/septic and
water capacity, can construct the ADUs in
Adopt the ordinance by July 2025.
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Orange County 220 25-29 Regional AFH
compliance with all building code and fire
prevention requirements, and can meet
parking requirements).
14. Reduce minimum unit sizes and update the
Zoning Code, as necessary, to accommodate
alternative housing types such as housing cooperatives, Single-Room Occupancy (SROs), dormitories, tiny homes, and collective home
ownership models in more areas of the city,
including religious sites and publicly owned
land. Stakeholder outreach shall include
discussions with for-profit and non-profit
housing developers.
Amend the Zoning Code by July 2025.
Conduct stakeholder outreach with
developers and community groups and
service providers on alternative housing at
least once by January 2026, with the goal of
achieving 30 units of alternative housing
types by the end of 2029, with at least half of
those units in the neighborhoods of E Las
Palmas Dr/N Sunnywood Dr, Craig park,
Sunny Hills, Bastanchury Rd/Fairway Isles Dr,
Acacia Park, and Byerrum Park since they are
Racially Concentrated Areas of Affluence.
15. Encourage the development of both smaller
rental and owner units (studio and onebedroom) and larger rental units (3 to 4- bedroom units) in residential and mixed-use
development. In consultation with
developers, identify and provide incentives
and reduction of constraints to encourage the
construction of these housing types and
develop a work plan to implement any
proposed changes to development
standards, City programs, and so forth.
Develop incentives and mitigations to
constraints by July 2025. Starting in 2025,
hold an annual workshop with developers
and provide education about technical
assistance and incentives for larger and
smaller rental units, with a goal of
supporting the development of 50 large (3-4-
bedroom) units and 100 studio/1-bedroom
units by December 2029. At least 50 percent
of large and small rental units should be in
neighborhoods of greater degrees of
overcrowding, including Woodcrest Park,
Artesia Blvd/N Gilbert St, Valencia Park, W
Oak Ave/Lambert Dr, E Wilshire Ave/N
Raymond Ave, Rancho La Paz.
16. Prioritize public health, education, economic,
and safety programs in lower resource areas
as defined by TCAC in coordination with area
public health entities, school districts,
workforce development groups, and the
police department. Identify addresses and
compile mailing list and email addresses to
focus outreach to neighborhoods with higher
concentrations of low-income and minority
residents to prioritize services in these areas.
Increase participation in the City’s first-time
homebuyer seminars and owner-occupied
housing rehabilitation grant program 5
percent annually from lower income and
minority concentration areas between 2021-
2029 (data collection via surveys conducted
at the seminars).
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Orange County 221 25-29 Regional AFH
17. Assess potential preference policy for
affordable housing opportunities, land use,
transportation, urban design, public facilities
and services, and economic development
strategies. The City will seek involvement
from community organizations and
advocates, business councils, and residents
to further refine the program scope.
Establish a community working group that
meets annually to prioritize funding for
community investments.
18. Apply for funding and coordinate with the
OCTA Safe Routes to School program to
establish at least one partnership in the city
for active transportation projects and/or
safety education campaign, prioritizing
school routes within and from the
neighborhood of E Imperial Highway and N
Harbor Boulevard.
Establish partnership for Safe Routes to
School and apply for grant funding by the
end of 2025. Initiate at least one project or
campaign by the end of the planning period.
Issue: Disproportionate Housing Needs
Housing cost burden is an issue for renters across Orange County, including in Fullerton. More than 20% of all units are overcrowded in the neighborhoods south of downtown, which are predominantly Hispanic.
Contributing Factors:
1. Displacement of residents due to economic pressures.
2. Location, type, and supply of affordable housing
3. Land use and zoning laws
Actions: Timeframe:
1. Develop an outreach strategy in multiple
languages for property owners who own
fewer than 10 residential units (either in
single-family or multi-family rental housing)
to assess needs and connect them with
resources, such as housing unit rehabilitation
and financing programs. The intent of this
program is to preserve Naturally Occurring
Affordable Housing (i.e., not currently
regulated with affordability restrictions),
particularly in the neighborhoods of
Woodcrest Park and Rancho La Paz. The
program will seek to prioritize communities
vulnerable to displacement, generally in the
Develop an outreach strategy for “mom and
pop” property owners by January 2026.
After the strategy is adopted, conduct
outreach to at least 15 property owners with
less than 10 units and assist at least 5
property owners with a combined total of 20
units or more by December 2029.
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Orange County 222 25-29 Regional AFH
southern areas of the city, a focus on
neighborhoods with lower median income.
2. Review the City’s Tenant-Based Rental
Assistance program with input from tenants
and property owners/managers, ensuring
representation across the economic
spectrum, and update as appropriate.
Outreach to be conducted to all vulnerable
communities during the update process and
after final adoption in 2027. Fill any gaps
between Section 8 assistance and rent, or to
aid those who may not qualify for Section 8
but need one-time emergency assistance, to
provide relief to tenants to avoid the
displacement in vulnerable communities.
Update the City’s Tenant-Based Rental
Assistance program by January 2027.
Prepare and present a report on
recommendations for programs that would
provide relief to tenants and landlords to
avoid the displacement in vulnerable
communities by December 2026. If a rental
assistance program is approved and
implemented as a result, the program will
assist at least 10 lower income renter
households annually.
3. In consultation with fair housing service
providers and community-based
organizations, evaluate existing state and
federal “just cause for eviction” (AB 1482;
2019-Chiu) and other similar legislation with
provisions to determine if additional
protections through a local ordinance is
warranted.
Assess if additional protections are needed
by January 2026. If warranted, recommend
adoption of a local tenant protection
ordinance to City Council by December 2026.
4. Partner with Cal state Fullerton to develop a
plan to address the need for off-campus
affordable housing for students.
Develop a city-wide student housing plan by
December 2029.
5. Prioritize public health, education, economic,
and safety programs in lower resource areas
as defined by TCAC in coordination with area
public health entities, school districts,
workforce development groups, and the
police department. Identify addresses and
compile mailing list and email addresses to
focus outreach to neighborhoods with higher
concentrations of low-income and minority
residents to prioritize services in these areas.
Increase participation in the City’s first-time
homebuyer seminars and owner-occupied
housing rehabilitation grant program percent
annually from lower income and minority
concentration areas between 2021-2029
(data collection via surveys conducted at the
seminars).
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Issue: Disparities in Access to Homeownership
Homeownership rates are lower for all groups than the County overall, except for AAPI households. Racial/ethnic disparities exist, with Native American households the least likely to own their home, and AAPI households most likely.
Contributing Factors:
1. Racial discrepancies in loan origination.
2. Lack of funding for consumer rights and responsibility education on Fair Lending practices and identification of predatory lending practices.
Actions: Timeframe:
1. Work to promote fair lending practices throughout the city, including:
a. Ensure that low-income and minority residents
have fair access to capital resources needed to
acquire and maintain housing.
b. Prevent predatory lending through information
and referrals to the Fair Housing Foundation.
Annually conduct and publish
third party review of City or
regional HMDA data to identify
areas of need regarding fair
access to lending.
2. Add information on fair housing laws and resources on the City’s website regarding housing programs in several languages.
By January 2025
3. Seek opportunities to expand outreach and public
education strategies on available tenant protection, fair housing services, and homeownership education to reach
vulnerable households by offering information in multiple languages, targeted social media efforts, combining
information with other assistance programs, distributing resources through local schools and colleges, and
partnering with community-based organizations.
2021-2029
4. Partner with the County and/or community-based
organizations to increase participation in homeownership education and assistance programs for historically
underrepresented residents in the homeownership
market. Organizations may include teachers’ associations, school districts, and community-based service providers to increase awareness of, and access to, housing
resources and financial planning services.
Facilitate homeownership
workshops, counseling, and/or
education campaigns by January
2025. By October 31, 2029,
connect at least 30 residents to
education on homeownershiprelated topics.
5. Prioritize public health, education, economic, and safety programs in lower resource areas as defined by TCAC in
coordination with area public health entities, school
districts, workforce development groups, and the police department. Identify addresses and compile mailing list Increase participation in the
City’s first-time homebuyer
seminars and owner-occupied
housing rehabilitation grant
program 5 percent annually from
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Orange County 224 25-29 Regional AFH
and email addresses to focus outreach to neighborhoods
with higher concentrations of low-income and minority
residents to prioritize services in these areas.
lower income and minority
concentration areas between
2021-2029 (data collection via
surveys conducted at the
seminars).
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H. Garden Grove
Issue: Segregation and R/ECAPs, Disparities in Access to Opportunities, and Disparities in Access to Homeownership
The majority of the city is considered an area of high POC segregation except for West Garden Grove. In West Garden Grove, the residential neighborhoods west of Knott St are considered areas of high White segregation. In the high POC segregation areas, AAPI residents are the predominant group west of 9th St and Hispanic residents are the predominant group east of there.
Additionally, there are lots of publicly supported housing units in the center of city along Garden Grove Boulevard, which is a high POC segregation area. There are no publicly supported housing units in West Garden Grove, which is an area of high White segregation.
There is a R/ECAP in the northern part of the city to between Brookhurst St and Gilbert St, north of Chapman Ave. The R/ECAP tract is predominantly Hispanic and is surrounded by Census Tracts that are predominantly AAPI.
Hispanic and AAPI residents have the least access to low poverty neighborhoods and neighborhoods with high labor force participation and human capital. Additionally, Hispanic residents also have the least access to neighborhoods with high performing schools.
Geographically, the neighborhoods with access to the most opportunities are in West Garden Grove, where education and economic scores are high, environmental quality is high, and poverty is low. West Garden Grove is a predominantly White area.
The Black and Hispanic homeownership rate in the city is half the White homeownership rate.
Contributing Factors:
1. Lack of affordable, accessible housing in a range of unit sizes.
2. Inadequate supply/production of affordable housing.
3. Displacement of residents due to regional economic pressures.
4. Housing discrimination.
5. High land and development costs in the region.
6. Public opposition to new development and land use and zoning laws.
7. Access to financial services.
8. Lack of meaningful language access for individuals with limited English proficiency.
9. Lack of private investment in specific neighborhoods.
Actions: Timeframe:
1. Continue to contract with the Fair Housing Foundation to promote public awareness of federal, state, and local regulations regarding fair housing.
Provide information to the public about local, state, and federal housing programs and fair housing law. Maintain referral information on the City’s website, social media, newspaper ads, and at a variety of other locations such as community and senior centers, local social service offices, in City utility bills, and at other public locations including City Hall and the library. Add or Ongoing
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translate resources and information in Vietnamese, Korean, and Spanish and make available to the public through communications materials and online.
2. Direct homebuyers and property owners with property deeds, covenants, and other real estate property documents that contain restrictions intended to limit where certain people could live or buy property, based on race, religion, or other characteristics, to the Orange County Clerk-Recorder’s Office to have such discriminatory language removed at no charge.
Ongoing
3. Continue to target dissemination of Fair Housing Outreach information and notices of available services and workshops in neighborhoods identified with disproportionate housing needs and displacement risks. Fair Housing Foundation holds regular workshops and 1-on-1 counseling sessions at the City’s Senior Center and Family Resource Centers.
Ongoing
4. Ensure that all development applications are considered, reviewed, and approved without prejudice to the proposed residents, contingent on the development application’s compliance with all entitlement requirements.
Ongoing
5. Pursue funding and target neighborhoods of concentrated poverty for investment in rehabilitation, parks, transit, active transportation, and other needs identified in the City’s Environmental Justice Element. To the extent possible, ensure funding plans reflect the needs of lower-opportunity neighborhoods.
Annually
6. Continue to implement the Analysis of Impediments to Fair Housing Choice and HUD Consolidated Plan.
Annually
7. Annually monitor building and home sales activities in historically undermarket neighborhoods to identify any adverse trends.Annually
8. Investigate ways to incentivize housing developers to increase the number three-bedroom units in their developments.
Ongoing
9. In concert with Code Enforcement, develop a proactive cooperative code compliance program that targets areas of concentrated rehabilitation needs, results in repairs, and mitigates potential cost, displacement, and relocation impacts on residents.
Ongoing
10. Implement programs to increase housing choices and affordability (e.g., duplex, triplex, multifamily, accessory dwelling units, SB 9 housing developments, transitional and supportive housing, and group homes), with a particular focus in High Opportunity Areas. Establish a protocol to annually monitor development progress towards housing creation that increases housing choices and affordability in High Opportunity Areas. Should monitoring reveal a shortfall in development progress towards housing creation of increased housing choices and affordability, the City will commit to developing additional actions, as necessary, including, but not limited to Ongoing
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incentives, waivers, concessions, expedited processing, and other regulatory approaches, including examination of development standards) to ensure the City satisfies its identified housing need (RHNA).
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I. Huntington Beach
Issue: Disparities in Access to Opportunities and Disproportionate Housing Needs In Huntington Beach, Hispanic residents have relatively low access to neighborhoods with good environmental health, low poverty, high education scores, and high economic scores. Overall, access to opportunities in the city is high compared to the region.
Housing cost burden is an issue for renters across Orange County, including in Huntington Beach.
Contributing Factors:
1. Lack of knowledge of fair housing and associated laws.
2. High cost of housing limits access to lower income households of all races/ethnicities.
Actions: Timeframe:
Promote fair housing practices through the following actions:
1. Continue to contract with the Fair Housing Foundation to provide fair housing services, including fair housing and discrimination investigations, tenant and landlord counseling, education and outreach activities, and affirmatively further fair housing activities.
Ongoing
Preserve quality and affordability of existing housing through the following actions:
1. Provide financial assistance to low-income households for home repairs through the Housing Rehabilitation Loan Program.
2. Provide rental assistance to extremely low (ELI) and very low income (VLI) households through the Tenant-Based Rental Assistance Program.
Ongoing
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J. Irvine
Issue: Segregation, Disparities in Access to Opportunities, and Disproportionate Housing Needs There are several Census Tracts considered to be areas of high POC segregation, including the neighborhoods between I-405 and UC Irvine, the Westpark community north of I-405, the neighborhoods between Como Channel and I-5, and the Northwood community north of I-5.
There are also areas of high White segregation in Irvine, including the neighborhood bounded by Turtle Rock Dr, the area surrounding the Strawberry Farms Golf Club, the Woodbridge community north of I-405, and the neighborhood west of the Oak Creek Golf Club.
Based on analysis of fair housing complaint data, individuals with disabilities disproportionately experience discrimination in housing.
Housing cost burden is an issue for renters across Orange County, including in Irvine.
Homeownership rates are lower for all racial/ethnic groups compared to the County overall, and racial/ethnic disparities are similar to the County, with Black and Hispanic households having the lowest homeownership rates (15.7% and 18% respectively).
Contributing Factors:
1. Shortage of affordable rental and homeownership options due to market and governmental constraints
2. Underutilized properties (i.e., retail centers and hotels) could provide new affordable housing opportunities for Irvine residents, but current land use and zoning laws inhibit this development
3. Lack of supportive housing in community-based settings
4. Lack of renter protections and economic uncertainty from pandemic increased risk of displacement for lower income households
Actions: Timeframe:
1. The City will continue to pursue alternative options for meeting the RHNA through preservation, legislative changes, and regional cooperation. The City will apply for all available funding to pursue acquisition/rehabilitation of affordable housing projects and preservation of at-risk housing.
Annually
2. The City will incorporate changes in State law (particularly affordable housing, employee housing, emergency shelters, and
transitional/supportive housing, ADUs) into the Land Use Element and Zoning Ordinance. This will involve allowing for increased densities or FAR in both residential and non- residential areas to adhere to RHNA requirements. Other General Plan elements will be updated to ensure consistency with the updated Housing and Land Use Elements, as well as the Zoning Ordinance
Completed
3. The City will establish zoning overlays to allow for multifamily residential in nonresidential areas (which may include properties By October 2024
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designated for religious institutions and schools) to provide flexibility in land use and development standards, including mixeduse developments. These flexible standards shall be directed toward meeting the physical, social, and economic needs of the community.
The City will adhere to the requirements of California Government Code, Section 65583.2, subdivisions (h) and (i), as part of the rezoning program, including applicable by-right provisions, and the residential overlay zones in nonresidential areas will allow for densities of 30 units/acre, allow for 100 percent residential use, and will require residential use to occupy 50 percent of floor area on mixed use projects.
4. The City will encourage the subdivision of sites that are 10 acres or more to provide more opportunities for development of affordable housing, which the HCD has determined is more feasible on sites between 0.5 and 10 acres in size.
City will conduct a
review every 2 years
5. The City will work with UCI to draft an agreement regarding approving, permitting, certifying occupancy, and/or reporting new units to the California State Department of Finance (DOF). The agreement will involve documentation from UCI on planned housing that has been approved to be built as well as information on the timing of the project construction and unit affordability by household income category.
By January 2022, and
ongoing
6. The City will seek to amend the fee collection process for land divisions and lot line adjustments resulting in parcel sizes that facilitate multifamily developments affordable to households with lower incomes (including extremely low income and farmworkers) in light of State, Federal, and local financing programs (i.e., 2–10 acres).
Within 12 months of
Housing Element
certification
7. The City will also identify potential property owners and nonprofit developers by the end of FY 2022-23 and work with them on an annual basis to target and market the availability of sites with the best potential for development. In addition, the City will offer incentives for the development of affordable housing.
Within 12 months of
Housing Element
certification
8. The City will expedite development of housing projects for seniors, people with disabilities, and lower-income people and/or households As projects are
proposed
9. The City will review the current Development Standards and update as appropriate to encourage residential, mixed-use, and transitoriented developments By October 2022
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10. To expedite the process of finding resources and incentives, the City will gather information on the available incentives/concessions for developers within a year of the City’s Housing Element Update certification. The City will then develop and post an overview of the available incentives/concessions for developers on the City’s website and updates will be performed on an annual basis. The goal of this program is either expedite the time it takes to obtain development approvals and/or incentives that provide cost savings on housing projects, thereby improving and increasing the financial feasibility of affordable housing projects
Within one (1) year of
Housing Element
certification
11. To decrease the entitlement and construction process, following the adoption of the Housing Element the City will designate a dedicated planner, plan checker, and building inspector(s) to provide expedited processing for affordable housing projects, with an emphasis on projects that include extremely low-income units. The goal of this program is to expedite the affordable housing development process to accelerate the availability of affordable housing units in the community, which also has the effect of reducing development costs By October 2022
12. Hold one (1) outreach meeting or survey with affordable housing developers and providers each year after the state budget funding for the next fiscal year are made public (by October of each year) to discuss available funding sources (City, state and federal), sites identified in the Housing Element sites inventory that are available, developer needs and opportunities for affordable housing projects.
Provide technical assistance to developers regarding City’s lower income sites, funding opportunities, as well as mixed use zoning and density bonus incentives
October of each
program year
13. The City will establish streamlined, ministerial review procedures and processes for qualifying multi-family residential projects consistent with SB 35
By May 2023
14. The City will update the current Zoning Ordinance to establish higher density in areas with underdeveloped/underutilized property, such as Planning Areas 32 (adjacent to the Irvine Station served by Amtrak/Metrolink passenger rail services and Orange County Transportation Authority bus services), 33, and 36 (a.k.a., Irvine Business Complex or “IBC” near John Wayne Airport). This update will maximize land utilization for residential development to accommodate RHNA requirements, including allowing residential overlays in commercial areas to allow for residential to be added to commercial areas or to allow existing underutilized commercial uses to be converted to residential (i.e., hotels)
By October 2024
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15. Multiple State laws have been passed since 2019 establishing statewide standards for local regulations governing ADU development. State law requires that ADUs be allowed in residential and mixed-use areas despite local ordinances or homeowner’s association rules and requirements. Additionally, State law requires jurisdictions to develop a plan to encourage and incentivize ADUs in an effort to address the current California housing crisis.
By January 2023
16. Assembly Bill (AB) 671 requires local agencies’ Housing Elements to include a plan that incentivizes and promotes the creation of ADUs that can offer affordable rents for households with very-low-, low-, or moderate-income households. As part of the ADU ordinance update (including public outreach), the City will research feasible options to facilitate affordable housing options for ADUs
By October 2024
17. Housing Elements to include a plan that incentivizes and promotes the creation of ADUs that can offer affordable rents for households with very-low-, low-, or moderate-income households. As part of the ADU ordinance update (including public outreach), the City will research feasible options to facilitate affordable housing options for ADUs
By the end of 2022
and begin providing
incentives by January
2023
18. The City will provide financial and other available assistance to affordable housing property owners to preserve units. The committed assistance may consist of both financial and nonfinancial, in-kind services to incentivize the preservation of affordable units. The total number of units to be preserved are seven extremely low, 517 very low and 299 low-income units
By June 30, 2025
19. The City will continue to monitor and preserve the affordability of all publicly assisted housing units, and support applications by nonprofits
Ongoing
20. The Sites Inventory includes four non- vacant sites with existing residential uses. The sites are currently combined and house an 880- unit apartment building. In considering a demolition and new construction of residential development at the site (that increases the total number of units), the City is proposing the incorporation of 465 deed- restricted units affordable to very low- and low-income households on this site, generating replacement units for any units that may be inhabited by very low- and low-income families.
As development
projects are proposed
(timing dependent on
development
community)
21. In addition to providing funding opportunities related to HUD programs on the City’s website, funding opportunities will be disseminated via targeted email notifications and may also be posted Ongoing
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on all City social media accounts and include information on vacant land currently owned by the City.
22. The City will access information from HCD and other State agencies to identify grant application opportunities for affordable housing.
When grant opportunities are known, the City will reach out to affordable developer stakeholders to identify projects and/or opportunities to include on grant applications. The City will apply or support a minimum of three (3) grant application each year. The goal of this program would be to increase the amount of funding available for affordable housing projects, which require public subsidies to be built.
Timing dependent on
State HCD and other
departments
23. The City will retain a consultant to conduct a feasibility study on increasing the inclusionary housing requirement from 15 percent (5 percent very low, 5 percent low, and 5 percent moderate) to 20 percent (9 percent very low, 6 percent low, and 5 percent moderate).
The policy changes proposed to Planning Commission and City Council, if deemed feasible in the study, will include increasing the inclusionary requirement to 20 percent with corresponding updated in-lieu fee
By October 2024
24. The City will identify and analyze local funding options for affordable housing and monitor new funding and financing resources each year.
This program will also include using State and Federal funding received by the City to partner with nonprofit organizations (such as the ICLT), as the commitment of City funding can enhance the scoring of 100 percent affordable projects to secure important funding sources, such as low- income housing tax credits (LIHTCs) that have become highly competitive.
Annually
25. The City will identify and utilize State programs and/or potential public/private partnerships with major employers to acquire existing market rate housing units or develop new housing units to create moderate or workforce housing (available to households with incomes at 80 percent to 120 percent of AMI)
Ongoing
26. The City will follow all requirements of the Surplus Land Act, Article 8 (commencing with Section 54220) of Chapter 5 of Part 1 of Division 2 of Title 5, including holding a public hearing designating the properties as “surplus properties” under California Law. The City will also conduct an analysis to determine, based on market conditions, if selling or leasing the properties would maximize the development of affordable units. The City will then send a Notice of Availability to all required parties regarding the availability of County-owned land available for purchase or lease. It is the City’s intent to facilitate the Surplus Land Act
activities to be
completed by October
2024 and Notice of
Availability by
December 2025
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development of 100 percent affordable housing projects on vacant or underutilized City- owned sites. The City will also coordinate with the public entities that own a site (or sites) to ensure that the legally mandated surplus property process is followed
27. The City seeks to continue to strengthen its relationship with the ICLT to collaborate and partner on efficiently and effectively maximizing affordable housing opportunities.
As opportunities arise
for acquisition,
development, and
legislative initiatives
the City will work with
ICLT. Additionally,
City will meet at least
quarterly with ICLT
starting in November
2021 to coordinate
efforts. City will
document progress
on these items in its
Annual Progress
Report.
28. The City will coordinate with public agencies to facilitate the development of affordable housing projects on vacant and underutilized sites, including sites owned by the County of Orange, the State, and the Irvine Ranch Water District. Activities could include collaboration with public agencies on master-planning and disposition efforts for large vacant and underutilized sites.
Coordination with
County of Orange, the
State, and the Irvine
Ranch Water District
and any other
relevant public
agencies in
connection with the
Land Use Element
Update and Zoning
Ordinance
amendment from
2022
through October 2024
29. The City’s Land Use Element allows for the entitlement of affordable housing units beyond the maximum unit counts established in the Zoning Ordinance, thus considered additive to the General Plan intensity thresholds, which allows additional units to be developed under the City’s established land use designations.
As development
projects are proposed
(timing dependent on
development
community).
30. The City will amend the Inclusionary Housing Ordinance By October 2024
31. Encourage and incentivize ADUs through various programs By January 2023 410
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32. Encourage innovative design prototypes and/or construction, such as smaller units with increased energy efficiency (i.e., sustainable designs and operations), modular units or other innovative building types
On an ongoing basis
33. Streamline permitting to encourage a diverse housing stock On an ongoing basis
34. The City will make appropriate zoning changes as part of the General Plan - Land Use Element Update and Zoning Ordinance Amendment to bring the City’s Zoning Ordinance in compliance with State law changes related to parking, by right uses, and other requirements.
By October 2024.
35. The City will work with UCI to draft agreement regarding approving, permitting, certifying occupancy, and/or reporting new units to the California State Department of Finance (DOF).
By January 2022 and
ongoing tracking.
36. The Federal Housing Choice Voucher Program extends rental subsidies to extremely low and very low-income households, including families, seniors, farmworkers, and the disabled.
Ongoing
37. The City will study the benefits associated with creating an Irvine Housing Authority with the ability to allocate Federal Housing Choice Vouchers
By January 2023
38. The City will analyze incentives to encourage affordable housing developers to consider extending the terms of affordability in perpetuity
By January 2023
39. The City will monitor legislative changes to ensure that City policies and regulations comply with State and Federal laws
Annually
40. The goal of this program is to ensure that fees (both the dollar amount and timing), incentives, development standards/review processes do not constrain the development of housing units or render housing development infeasible
Annually
41. The City will develop and establish specific written procedures for requesting and granting a reasonable accommodation for housing for persons with disabilities.
6/30/2023
42. The City will update the Zoning Ordinance and related policies pertaining to emergency shelters, Low- Barrier Navigation Centers (LBNCs), transitional and supportive housing, and group care facilities to conform to State requirements, as established by AB 139, AB 2162, and Senate Bill 48. Generally, this update would allow these land uses in all of the City’s residential zones and with fewer conditions.
Completed by
October 2024
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43. Any funding sources have specific eligibility criteria or other requirements that may not always align with potential projects in Irvine. The City will pursue relevant State and Federal funding sources to provide additional options for developers of lower-income housing that serve veterans, individual, and families at-risk of and currently experiencing homelessness in the City. The City will ensure that such housing options will include reasonable accommodations and transitional and supportive services for people with disabilities.
Ongoing as funding is
released and
available.
44. The City will explore the feasibility of joining the Orange County Housing Finance Trust (OCHFT), a joint power authority composed of many Orange County cities.
Explore by October
2023
45. The City will ensure that housing options will include reasonable accommodations and supportive services for people with
disabilities.
Explore by October
2023
46. The City will continue to make information about services for people experiencing homelessness available on the City’s website and at City facilities.
Ongoing
47. The City will continue to provide resources for non-profits that provide transitional housing, motel vouchers, food pantry, emergency rent and utility payment assistance, life-skills counseling and clothing.
Ongoing
48. The City will continue to provide CDBG grant funding to non-profits such as Families Forward, South County Outreach, Human Options, and Stand Up for Kids that provide these services. Information on these resources is included in the City’s Affordable Housing Guide and the City’s website.
Ongoing
49. The City will explore establishing a crisis response protocol for local service providers to render rapid crisis support, including after-hour services for people experiencing or at risk of homelessness.
By October 2022
50. The City will reach out to other California cities currently implementing shared housing programs that help match individuals experiencing or at risk of homelessness and seniors for a mutually beneficial living situation. Individuals in need of housing can provide needed physical assistance around the home for seniors.
Explore by October
2024
51. Compile a list of local organizations and reach out to inquire about possible collaborations. This will help the City cooperate with community-based organizations that provide services or information about services to any special needs or linguistically isolated groups.
Ongoing
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52. The City’s primary (and very effective) effort in displacement prevention is facilitating the development of affordable housing in the community, as referenced in the AFFH section of this HEU.
Displacement prevention activities will also include connecting residents to resources to minimize the displacement of households with lower incomes and special needs whenever possible and where necessary to ensure that displacement is carried out in an equitable manner.
Ongoing
53. The City will participate in the Orange County United Way’s Eviction Task Force and associated study. This work includes identifying and coordinating community resources to support households facing eviction.
Ongoing
54. The City will provide a link on its website to landlord/tenant meditation services and landlord/tenant rights and responsibilities, which may include information from service providers such as the Fair Housing Foundation. The City will also add information on the City’s website and provide resources on non-profits such as Community Legal Aid SoCal and the Legal Aid Society of OC.
Annual
55. The City will encourage homeownership through education, sharing information, and links to existing nonprofit, County, State, and Federal resources on the City’s website
Ongoing basis and
updated annually for
accuracy
56. This existing program provides financial assistance to lower-income Irvine homeowners for critical home improvement projects.
Ongoing basis and
updated annually for
accuracy
57. The City will update its Land Use Element and amend the Zoning Ordinance
Ordinance by October
2024
58. The City will continue implementation of its One Irvine program to revitalize individual neighborhoods through a work program uniquely developed with community input for each neighborhood.
By January 2023.
59. The City will reach out to community organizations and collaborate with them on outreach to different communities
By January 2023.
60. The City will provide links to Fair Housing Foundation (a nonprofit the City currently contracts with) to provide Irvine residents with information regarding fair housing law, tenant and landlord rights (including information on mediation services)
Within six months of
Housing Element
certification.
61. Compile a list of local organizations and set up an annual meeting or meetings to discuss community housing needs and potential solutions. Cooperate with community-based organizations that Within six months of
Housing Element
certification.
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provide services or information about services to any special needs and linguistically isolated groups.
Meet annually with
identified
organizations starting
in fiscal year 2022- 23
(meetings will be
conducted by June 30
of each year).
62. The City will connect developers of projects with affordable density bonus units and local non-profits/community organizations to coordinate efforts and determine if the units could be set aside, where feasible, for special groups including but not limited to veterans and special need adults.
Within three months
of a density bonus
project application.
63. The City will provide translations or interpretation in all applicable languages to ensure access to programs, services, and materials Ongoing
64. The City will conduct an internal audit at a minimum of every other year to evaluate that we are addressing all language needs for the City.
Annually or as
needed
65. The City is in the process and has taken several steps to identify climate impacts, reduce pollutants and greenhouse gas emissions (GHG), and prepare for a climate resilient future
Completed by
December 31, 2022
66. Continuing to require added greenery throughout the City to reduce exposure to environmental pollution such as vehicle emissions through the City’s Zoning Ordinance (Section 3-15-4)
Annually
67. Irvine Cool City Challenge will reduce climate emissions and utility bills while building resiliency and local emergency preparedness against climate disasters such as extreme heat, floods, wildfires, and extreme storm events.
The Cool Block
Challenge was
initiated in January
2022 and will be 2
years in length. There
will be a new team
established roughly
every 4.5-5 months. In
year 3 of the Cool City
Challenge, the City
will present a game
plan to the
Empowerment
Institute. After that,
the City will work to
implement the carbon
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neutrality plan.
68. Provide adequate parks and open space to all parts of the community, the City will prepare a comprehensive design strategy to include passive urban park setting for every project and include other placemaking strategies. This program, as implemented, will reduce unsustainable energy use, reduce pollutants, improve air quality, reduce extreme heat events and improve the health outcomes of residents, employees and others in the community.
By December 2024.
69. The City will contact the Irvine Unified School District to inquire about expanding access to enrollment in the district’s schools for residents that may not be within the district’s boundaries
Within six months of
Housing Element
certification.
70. The City will conduct a bi-annual survey of homeowners to obtain input on existing programs and to identify additional ways to support the City’s homeowners and their unique needs
At least one survey
every two years
71. The City shall strengthen its relationship with the local fair housing provider and explore ways to expand services and mutually pursue additional funding resources for that expansion.
Ongoing with check in
meeting one time per
year
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K. La Habra
Issue: Segregation
There are various neighborhoods considered to have high POC segregation, including neighborhoods in the center of the city north of Guadalupe Park and between Idaho St to the west and Sonora High School to the east. These neighborhoods are predominantly Hispanic. Publicly supported housing units are in the city’s center and north neighborhoods, which are all lowmedium or high POC segregation areas.
Contributing Factors:
1. Zoning Code regulations and land use controls that constrain/ restrict housing opportunities.
2. Historic limited available land for new development of multiple- family housing.
3. General lack of affordable housing for low-and moderate-income residents.
Actions: Timeframe:
Increase production of affordable housing through the following actions:
1. Adopt streamlined ministerial approval process to expedite the development of housing.
2. Revise density bonus ordinance and remove CUP requirement to facilitate higher density housing.
3. Remove 1-acre minimum for mixed use projects and 20% standard for multiple-family on a block.
4. Adopt objective design standards to facilitate multi-family and mixed-use production.
5. Remove the CUP neighborhood compatibility finding in the design review process.
6. Adjust story height and parking requirement to facilitate multiple-family housing production.
7. Allow transitional, supportive housing, and low barrier navigation centers in accordance with state law.
8. Allow residential care facilities req. by state law and remove filing fee for reasonable acc. request.
Adopt 8 ordinances by
2024. By 2025, approval of
at least 2 multiple-family
residential projects and
permitting of at least 2 care
facilities.
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Issue: Disparities in Access to Opportunities
Neighborhoods in the city’s center and southeast of the center have poor environmental quality, low education scores, and low economic scores. These neighborhoods are also predominantly Hispanic.
Contributing Factors:
1. Lower ranking schools compared to wealthier districts in the County.
2. Lower graduation rate among Hispanics and other groups compared to County results.
3. Lower incomes due to either under- employment and or unemployment.
4. Need to continue investments in the children and youth of La Habra.
Actions: Timeframe:
Improve access to opportunities in low resource areas through the following actions:
1. Operate the Child Development Division programs and assist up to 600 La Habra children from lower-income families
Ongoing
2. Administer City workforce training and employment programs for 600 participants in the County; increase staff fourfold
Ongoing
3. Continue to support La Habra Boys and Girls Club, serving 3,000 La Habra residents each year
Ongoing
4. Continue to work with housing, employment, and community service partners, as needed, evaluate, and expand partnerships and resources Quarterly or as
needed
5. Retrofit two parks or recreation facilities (e.g., El-Centro-Lions, Vista) in low-mod resource areas in central La Habra
By end of 2025
6. Remediate landfill hazards with vapor devices underneath the Vista Grande Park
Ongoing
7. Continue to support the children’s museum, accommodating nearly 95,000 visits each year
Ongoing
8. Update safety element to address climate change, EJ, and resiliency; implement programs to address hazards
By June 2023
9. Operate the Hillcrest Health and Wellness Center to serve residents in need, including Central La Habra
Ongoing
10. Ensure 25% Love La Habra projects in Central La Habra Complete NTMP projects in K, M, F Neighborhoods
Annually
11. Expend $2.5 million to install East Bishop storm drain By end of 2024
12. Apply for SR2S grants citywide for all schools; if received, develop plan, make improvements during planning period
By 2029
13. Market services to eligible lower income residents through affirmative marketing at Hillcrest Center
By end of 2023
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Issue: Disproportionate Housing Needs
Housing cost burden is an issue for renters across Orange County, including in La Habra. More than 10% of homes have incomplete kitchen facilities in one Census Tract in the north central part of the city.
Contributing Factors:
1. High levels of overcrowding and overpayment; mismatch with housing needs.
2. Rising prices and rents for housing far exceed recent increases in incomes.
3. Several affordable housing projects remain at risk of conversion.
4. Age of housing stock; most homes were built more than 50 years ago.
5. Housing rehabilitation and repairs are expensive, especially for retirees.
6. Limited staff for building/ code compliance make it difficult to address needs.
Actions: Timeframe:
Reduce housing instability through the following
actions:
1. Encourage ADUs, including 20% in higher
resource areas through annual publication
citywide.
Permit 30 ADUs; 20% in high resource
areas by the end of 2022
2. Support and advertise HCV program to increase
participants.
Ongoing
3. Assist up to 200 lower-income households over
the planning period with ARPA-funded bill
assistance.
Assist 200 households by the end of
2023.
4. Retain affordability and condition of mobile home
parks and deed-restricted apartments affordable to
lower income households.
Preserve affordability of 50% of units in
the two city-owned mobile home parks
between 2021-2029.
5. Require replacement units per Gov’t Code 65915
for lower income units demolished.
Ongoing, as projects are proposed
6. Implement inclusionary housing ordinance and
prioritize funding (fees) for affordable housing.
Develop all 100 inclusionary units, 25%
of which are in highest income tracts,
between 2021-2029.
7. Target affirmative marketing in low resource areas
at the Hillcrest Center, Boys & Girls Club, and
others.
Prepare and distribute fliers on City
programs by 2023.
Improve quality of existing housing through the
following actions:
8. Hold regular Love La Habra events to assist
income- qualified residents with home repairs
Annually in September
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9. Hire additional code enforcement staff to address
backlog and provide capacity for proactive work
By end of 2023
10. Purchase Land Management System (LMS) to
track code compliance, building and planning
permits
By end of 2023
11. Issue housing rehabilitation grants/loans for 25
households over the planning period
Make 3 grants per year
12. Evaluate feasibility of rental housing inspection
program and, if feasible, develop program
By end of 2023
13. Seek collaborative partnership which can assist in
addressing local housing rehabilitation needs
Annually
14. Target affirmative marketing in low resource areas
at the Hillcrest Center, Boys & Girls Club, and
others
By end of 2023
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L. Laguna Niguel
Issue: Concentration
Most of the city is considered an area of high White concentration, except for a few neighborhoods with low-medium concentration (which are predominantly White) in the northeastern and eastern parts of the city.
Contributing Factors:
1. Historical land use development patterns and zoning, environmental constraints, and lack of vacant land limit opportunities for larger and higher density project types.
2. Current high cost of housing limits access to lower income households of all races/ethnicities.
3. Lack of affordable housing and need for greater access to opportunities.
4. Regional coordination affects transit services, funding sources, and allocation of housing resources including vouchers.
5. Community resistance to development.
Actions: Timeframe:
Increase fair housing knowledge through the following actions:
1. Promote Fair Housing Council programs and expand knowledge of first-time homebuyer programs on the City’s website, newsletters, and through social media.
By December 2025,
review annually
thereafter
2. Promote affirmative marketing plans in all new housing developments that are designed to attract renters and buyers of diverse demographic backgrounds, including race, ethnicity, income, disability, and familial status.
Ongoing
3. Develop an outreach plan and materials to communicate the benefits of vouchers and tenant rights regarding just cause evictions, limitations on rent increases, and replacement housing requirements if any existing residential units would be removed, based on state law.
By December 2025
Increase housing opportunities in high opportunity areas through the following actions:
4. Incentivize multi-family and mixed- use development in the Gateway Specific Plan area (northeast portion of city) through the following actions:
a. Amend the Gateway Specific Plan to mandate that any public benefit provided to achieve a density of higher than 50 du/ac shall include a provision of affordable housing, and to encourage the production of workforce housing and missing middle housing.
By July 2025
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b. Allocate CDBG or other available funding assistance to projects in the Gateway Specific Plan area that include multi-family units targeted for extremely-low-income households, as feasible.
Annually
c. Provide administrative assistance to affordable housing developers in preparing grant applications.
Ongoing
d. Post and maintain a current inventory of vacant sites in the Gateway Specific Plan area suitable for multi-family residential or mixed-use development on the City website.
Ongoing
e. Contact local developers and publicize development
opportunities within the Gateway Specific Plan area at least once each year.
Annually
f. Assist in facilitating subdivision of large parcels where necessary to create building sites through concurrent
processing and project coordination.
Ongoing
5. Contact the property owners of vacant properties to assist development of the site for residential purposes.
Annually
6. Continue to implement state Density Bonus Law as amended from time to time.
Ongoing
7. Engage and assist developers seeking funding and/or tax credits for the construction of low- and moderate-income housing.
Annually
8. Incentivize affordable housing development through modified development standards, expedited processing, or other financial incentives for affordable housing projects.
Ongoing
9. Provide administrative assistance to developers of low- or moderateincome projects.Ongoing
10. Promote options for assistance to developers on the City website. Ongoing
11. Prioritize funding assistance for Extremely Low-Income units. Ongoing
12. Review City-owned properties annually to identify any surplus land that could be made available for affordable housing development and distribute list of suitable sites to regional affordable housing developers.
Annually
13. Work cooperatively with the County of Orange and other local cities to create a regional housing bond program to help fund affordable housing and permanent supportive housing.
Ongoing,
consultation with
County at least
annually
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Issue: Disparities in Access to Opportunities
Based on analysis of fair housing complaint data, individuals with disabilities disproportionately experience discrimination in housing.
Contributing Factors:
1. Insufficient fair housing monitoring and limited outreach capacity
2. Lack of resources for fair housing agencies and organizations
3. Limited understanding of fair housing laws
Actions: Timeframe:
Improve fair housing education and outreach through the following actions:
1. Direct fair housing inquiries to the Fair Housing Council of Orange County (FHCOC).
Ongoing
2. Post and update information annually regarding fair housing and request that FHCOC conduct a presentation every two years about the services available.
Annually
3. In cooperation with the FHCOC, contact all low-income apartment complexes annually to provide education and materials about the Section 8 program, including multi- lingual materials.
By July 2025 and
annually thereafter
4. Publish and update fair housing information on the City website and via social media annually.
Annually
Issue: Disproportionate Housing Needs
Housing cost burden is an issue for renters across Orange County, including in Laguna Niguel.
Contributing Factors:
1. Historical land use development patterns and zoning, environmental constraints, and lack of vacant land limit opportunities for larger and higher density project types.
2. Current high cost of housing limits access to lower income households of all races/ethnicities.
3. Lack of affordable housing and need for greater access to opportunities.
4. Community resistance to development.
5. Regional coordination affects transit services, funding sources, and allocation of housing resources including vouchers.
6. Age of housing stock.
7. Cost of repairs/rehabilitation.
Actions: Timeframe:
Encourage the development of ADUs and SB 9 units through the following actions:
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1. Monitor the production and affordability of ADUs every three years to ensure the City is meeting ADU production targets and act if projections are not consistent.
Perform review in
December 2026
2. Conduct increased outreach and education on ADU and SB 9 unit/lot split opportunities.
Ongoing
3. Continue to promote ADUs on the City’s website, social media, and at City offices.
Ongoing
4. Promote SB 9 units and lot splits on the City’s website, social media, and at City offices.
Ongoing
5. Expedite ADU permit processing. Ongoing
Provide support to individuals experiencing homelessness through the following actions:
6. Participate in meetings of the Orange County Homeless Issues Task Force as they occur
Ongoing
7. Allocate an appropriate level of CDBG funding in relation to the local need.
Annually
8. Explore and consider Project Homekey and opportunities to work with the County.
Ongoing
9. Assist applicants proposing permanent or interim supportive housing by helping to apply for funding.
Ongoing
Expand the use of Housing Choice Vouchers through the following actions:
10. Contact all low-income apartment complexes annually to provide education and materials about the Section 8 program including multilingual materials.
By July 2025 and annually
thereafter
11. Encourage the development of missing middle housing types and evaluate specific methods to encourage their production in RCAAs, areas of higher density, and in the central areas of the City.
Between 2021-2029,
facilitate 80 “missing
middle” units, with at least
20% located in targeted
areas, including RCAAs,
higher density areas,
central areas of the City.
Preserve existing affordable housing units and prevent
displacement through the following actions:
12. Monitor assisted units to assess the risk of conversion to market rate.
Annually
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13. Offer financial incentives to encourage owners of at-risk properties to maintain their rental units as affordable housing.
Three-year, twelve-month,
and six-month
coordination with at-risk
property owners and
OCHCS.
14. Allocate a portion of CDBG funds to assist in extending affordability covenants for at-risk units.
Annually
15. Provide educational materials to tenants of properties with expiring covenants regarding options for securing other affordable housing.
Ongoing
16. Continue the City’s active property maintenance program run by the Code Enforcement Division of the Community Development Department.
Conduct windshield
surveys covering all
properties in the City every
six months.
17. Seek CDBG funding for housing rehabilitation. Facilitate rehabilitation of 15 housing units between
2021-2029.
18. Survey older areas of the City and connect property owners to rehabilitation programs.
Six property owner
contacts per year.
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M. Lake Forest
Issue: Disparities in Access to Opportunities
While residents overall have relatively good access to opportunities, compared to the region, residents living below the FPL in the city generally have less access to opportunities than the rest of the population.
Contributing Factors:
1. Lack of opportunity due to high housing costs.
2. Lack of access to public transportation.
Actions: Timeframe:
Increase housing supply in high opportunity areas through the following actions:
1. Implement Program 1: Land Use Policy, Entitlements, and Development Capacity (Shortfall Program), to rezone sites to accommodate new residential and mixed-use
development at densities consistent with the City’s General Plan (adopted in 2020) to meet the City’s RHNA at all
income levels.
2. Implement Program 2: Monitor Residential Capacity (No Net Loss), to ensure that replacement sites identified to continue to accommodate the City’s remaining RHNA
throughout the planning period are consistent with the
City’s duty to affirmatively further fair housing.
3. On an ongoing basis, actively recruit residents from neighborhoods of concentrated poverty to serve or
participate on boards, committees, and other local
government bodies as positions are made available due to the regular appointment process or vacancies.
Between 2021-2029, the City’s
goal is to promote the
development of 1,648 new
units (including 303 lower
income units and 167 moderate
income units, consistent with
the City’s Quantified Objectives
for 2021-2029) with 75% of the
new units located in areas of
moderate or high opportunity;
rezone 158 acres to allow for
the development of up to 2,965
multifamily units, with 75% of
the units located in areas of
moderate or high opportunity;
and increase the number of
applications from residents
living in low or moderate
resource areas for open Board
and Commission positions by
20%.
Preserve existing affordable housing opportunities and prevent displacement through the following actions:
4. Implement Program 4: Replacement of Affordable Units, to ensure that affordable units that are removed from the
City’s housing stock are replaced in accordance with state law.
5. Implement Program 5: Facilitate Affordable and Special Needs Housing Construction, to encourage the
development of housing units to serve the needs of larger Between 2021-2029, the City’s
goal will be to maintain at least
202 affordable housing units in
the City; increase the
proportion of new multifamily
units that are 3 or more
bedrooms by 10%; promote the
develop of 70 new extremely
low income housing units
(consistent with the City’s
Quantified Objectives for 2021-
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Orange County 250 25-29 Regional AFH
households, including large extremely low-income
households.
6. Implement Program 23: Economic Displacement Risk
Analysis, to proactively identify potential issues related to economic displacement as a result of new development.
2029); and commit $70,500 to
implement programs and
improvements serving the
Southwest Lake Forest
neighborhood with a focus on
programs and improvements
that protect existing residents
from displacement.
Increase access to opportunities for individuals with disabilities through the following actions:
7. Implement Program 1: Land Use Policy, Entitlements, and Development Capacity (Shortfall Program), to rezone sites adjacent to transit corridors and activity centers to allow for higher density residential development, suitable for
affordable and special needs housing, including new
opportunities for individuals with disabilities.
8. Implement Program 5: Facilitate Affordable and Special Needs Housing Construction, whereby the City will
proactively reach out to developers of housing for special needs populations to share details about special needs
groups in Lake Forest and promote the development of
housing for special needs groups in areas of moderate and high levels of opportunity.
9. Implement Program 6: Monitor and Implement Changes in federal and state Housing, Planning, and Zoning Laws to proactively identify changes in federal and/or state
regulations required to be implemented at the local level to improve access to opportunity for individuals with
disabilities.
Between 2021-2029, the City’s
goal will be to rezone 158 acres
to accommodate the
development of up to 2,965
new units with a focus to
promote the development of
units affordable to lower
income households in areas of
moderate or high opportunity;
increase the number of local
individuals with disabilities
taking transit by 10% by
encouraging the development
of new housing for individuals
with disabilities to be located
close to transit routes; increase
the proportion of new
multifamily units that are 3 or
more bedrooms by 10%; and
resolve 100% of reasonable
accommodation requests
consistent with the
requirements of state law.
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N. Mission Viejo
Issue: Concentration and Disproportionate Housing Needs Most of the city has a high concentration of White residents, although there are neighborhoods in the southern, northern, and western parts of the city where there's more diversity. Overall, residents have good access to opportunities, though getting around on public transit or finding affordable transportation can be a challenge. Additionally, data on fair housing complaints shows that people with disabilities often face challenges when it comes to housing. Renters across Orange County, including in Mission Viejo, are also struggling with housing costs.
Contributing Factors:
1. Limited affordable housing overall due to land use designations and zoning regulations.
2. Limited availability of affordable units in a range of sizes and types.
3. Displacement of residents due to economic pressures.
4. Lack of affordable, integrated housing for individuals who need supportive needs.
5. Regulatory barriers to providing housing and supportive services for individuals with disabilities.
6. Lack of private investments in specific neighborhoods.
7. Housing discrimination in the private market.
Actions: Timeframe:
Increase housing opportunities through the following actions:
1. Proactively outreach to developers about development opportunities.
Annually
2. Actively market Site 3 and reach conclusion regarding the importation of dirt to be able to deliver a Pad-ready site to potential developers.
By July 2026
3. For Site 3 development, establish a priority processing procedure, with fee waivers and grant other incentives and concessions as appropriate, including the need and
applicability for CDBG Funding.
By July 2026
4. Conduct an outreach and education program regarding SB 4 opportunities for religious facilities and nonprofit colleges.
By December 2025
5. Promote funding available from Orange County Housing Finance Trust’s Affordable ADU Loan Program.
Annually
6. Apply for funding available at the state to assist lower and moderate-income homeowners to develop ADUs.
Annually
7. Prioritize funding for projects that set aside units for special needs populations and those with extremely low incomes.
Annually
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8. Assist OCHA, FHF, and United Way in promoting the HCV program
Hold promotional workshops
annually.
9. Study and pursue a home sharing program Establish program in 2025 and begin implementation in 2026.
Improve conditions in neighborhoods through the following actions:
10. Assess and expand MV Shuttle services and Safe Routes to School program to serve new developments and
underserved neighborhoods.
Assess transit services at least
every three years. Assess and
expand Safe Routes to School
program to align with new
developments.
11. Target outreach to two neighborhoods where there are issues of housing conditions.
Annually
12. Study and develop appropriate strategies for adaptive reuse of underutilized commercial properties.
By the end of 2026.
Preserve existing affordable housing units through the
following actions:
13. Monitor status of all affordable units. Annually
Increase fair housing education and enforcement through the following actions:
14. Provide fair housing and tenant/landlord dispute resolution services
Annually
15. Expand promotion of housing resources, including fair housing services, via a multi-media approach, such as
eNewsletter with circulation of 20,000, message boards, senior newsletter, and other social media outlets.
Annually
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O. Newport Beach
Issue: Segregation and Disparities in Access to Opportunity Residents across the city have relatively high access to opportunities, however, all of the city’s neighborhoods are predominantly White and are classified as areas of high White segregation.
Homeownership rates are lower for all groups compared to the County overall, except for AAPI households, who have slightly higher homeownership rate in the city. Housing cost burden is also an issue for renters in the city.
Additionally, based on analysis of fair housing complaint data, individuals with disabilities disproportionately experience discrimination in housing.
Contributing Factors:
1. High cost of housing and limited supply of affordable housing.
Actions: Timeframe:
1. Adopt and codify accessory dwelling unit (ADU)
regulations that facilitate and incentivize ADU
development beyond state law minimum requirements,
create new housing development incentives and fee
waivers, and that provide for access into areas of high opportunity that contribute to the following community
development actions:
a. Increase residential development opportunities;
b. Maximize infill development in “built out”
neighborhoods; and
c. Increase affordable housing options.
2. Conduct two community workshops that will accomplish the following:
a. Identify local issues that are influencing access to opportunity;
b. Identify potential solutions to address those local
issues;
c. Identify opportunities to increase the housing
supply for all income levels; and
d. Establish economic development priorities to help
stimulate the creation of jobs and access to
services.
By June 2023, the City will adopt
revised ADU regulations. By
December 2023, the City will
conduct two community
workshops. The City will seek to
produce 20 to 30 ADUs per
calendar year within higher
resource areas.
3. Adopt an Inclusionary Housing Ordinance to ensure lower income units are developed in conjunction with new
market-rate development equitably throughout the City
and higher resource Census Tracts.
By December 2026, the City will
aspire to have approved
between 750 and 1,000
affordable housing units or to
have collected a commensurate
in-lieu affordable housing fee for
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Orange County 254 25-29 Regional AFH
use to subsidize future
affordable housing projects.
4. Maintain and promote the City’s Business Ambassador
Program to residents to support local businesses and
entrepreneurship.
5. Target outreach to two low-access Census Tracts via
mailers or by other means including social media to
provide website information about local entrepreneurship and educational opportunities.
The City will improve upon its
existing Business Ambassador
Program and will seek to assist
at least 35-45 individuals
annually with establishing their
own business opportunities.
The Business Ambassador
Program will be advertised
within the lower-opportunity
Census Tracts with a goal of
reaching at least 50% of the
households.
6. Continually update the City’s housing-related webpages to ensure current available data.
Starting 2023, the City will
annually review and update its
housing-related webpages.
7. Improve access to mortgage loans through the following actions:
a. Disseminate online information to the community
about home loans and the loan application and
approval process.
b. Conduct biannual affordable housing workshops
with invited guests from the local lending industry
and local affordable housing advocates.
c. Conduct annual report of loan dispositions in the
City and identify any trends or issues. Provide
findings to local lenders and financial institutions.
By June 2023, the City will
provide information to the
community about home loans
and the loan process. By
December 2023, the City will
conduct its first biannual
affordable housing workshop
with affordable housing lenders
and local affordable housing
advocates. The City will seek to
reach between 10,000 and
15,000 households with loan
information and will further seek
to reduce any occurrence of loan
disposition discrimination, if
found to be prevalent.
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P. Orange
Issue: Segregation and Disparities in Access to Opportunities Most of the city to the north and east of Villa Park is considered an area of high White segregation, and there are concentrations of predominantly Hispanic neighborhoods west of Glassel Street.
Additionally, all publicly supported housing units and households with vouchers are located to the west and south of Villa Park. There are no publicly supported housing units or vouchers in use to the east of Villa Park, where it is a high White segregation area.
Geographically, the neighborhoods west of Glassel Street, have lower education and economic scores, and worse environmental quality. Conversely, neighborhoods to the north and east of Villa Park, have high education and economic scores, and good environmental quality. Related to this geographic distribution of opportunities, Hispanic and Black residents (especially Black residents living below the FPL) have relatively low access to neighborhoods close to high performing schools, and to neighborhoods with high labor force participation and human capital.
Additionally, based on analysis of fair housing complaint data, individuals with disabilities disproportionately experience discrimination in housing.
Contributing Factors:
1. Lack of public investment in certain neighborhoods
2. Lack of sufficient affordable housing due, in part, to community opposition to affordable housing and land use and zoning regulations
3. Lack of fair housing knowledge
Actions: Timeframe:
Improve access to opportunity through the following actions:
1. The City will continue to utilize the Public Works and Community Services Departments for the as‐needed removal of graffiti and other deferred maintenance issues on public property, including sidewalks, parks, bus shelters signs and other structures adjacent to the public right‐of‐way, to enhance the quality of Orange’s residential neighborhoods.
Ongoing
2. Provide public information related to housing development and how the provision of affordable housing benefits the community.
Ongoing
3. The City will continue gathering community input on affordable housing, housing for special needs populations, and ADUs. The continued outreach will be City‐wide with a focus on traditionally under‐represented communities.
Ongoing
4. Continue to follow current state Density Bonus law. Ongoing
5. Update the Transitional Housing Ordinance that establishes guidelines and regulations for the development and operation of transitional housing in the city.
2025
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6. Prepare and adopt a Single Room Occupancy Ordinance that sets regulations for buildings designed for single room occupancy.
2025
7. Prepare and adopt a Residential Care Facility Ordinance that establishes regulations and standards for non-medical care facilities providing care to individual requiring assistance.
2025
8. Prepare and adopt a Farmworker and Employee Housing Ordinance that sets standards and regulations for housing provided to farmworkers by their employers.
2025
9. Adopt a program to subsidize application processing fees for qualifying developments where all units are affordable to 80% AMI or lower when funding is available.
Ongoing
10. Continue providing CDBG funds to the Fair Housing Foundation to provide fair housing activities to the community.
Issue: Disproportionate Housing Needs
Housing cost burden is an issue for renters across Orange County, including in the City of Orange.
Contributing Factors:
1. Lack of sufficient affordable housing
Actions: Timeframe:
1. The City will assist in preserving at‐risk units by, but not limited to, supporting non‐profit applications for funding to purchase at‐risk units, work with property owners to maintain affordability and develop preservation strategies, and assist with funding when available.
Ongoing
2. The City will continue to seek qualified non‐profit organizations for acquisition, construction, and rehabilitation of affordable housing. Funds will be available annually, contingent on funding availability.
Annually
3. The City will continue to encourage through outreach to private and non‐profit housing developers, the development of rental and for‐sale housing for larger (5 or more individuals) families. The City will support developers/builders that incorporate larger bedroom counts (3 or more bedrooms) to accommodate the needs of larger families and reduce incidents of overcrowding in the existing housing stock. The City will evaluate providing regulatory incentives such as density bonuses that encourage and support the development of housing for large families on a project‐by‐project basis.
Ongoing
4. The City will develop a program to subsidize application processing fees, when funding is available, for qualifying developments where all units affordable to 80% AMI or lower. The City will also promote the benefits of this program to the Ongoing
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development community by posting information on its webpage and creating a handout to be distributed with land development applications. 433
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Q. Rancho Santa Margarita
Issue: Concentration
Most of the City’s population is predominantly White, with greater diversity in the neighborhoods east of SR-241. There are no publicly supported housing units. Some vouchers are in use in the northeast part of the city, which is a low-medium concentration area.
Contributing Factors:
1. Location and type of affordable housing available
2. Land use and zoning laws that limit affordable housing development
3. Limited resources for fair housing agencies and organizations.
4. Lack of local private fair housing outreach and enforcement.
Actions: Timeframe:
1. Continue to serve as a liaison between the public and appropriate agencies in matters concerning housing discrimination within the City.
Ongoing
2. Provide annual fair housing literature to schools, libraries, and post offices.
Make information available via the City’s fair housing service provider. Review annually to ensure that the posters and literature being provided are up to date.
Annually
3. In coordination with OCHA and fair housing services provider, conduct biennial landlord education campaign to educate property owners about state law prohibiting discrimination based on household income. Provide public information and brochures regarding fair housing/equal housing opportunity requirements, including how to file a complaint and access the investigation and enforcement activities of the state Fair Employment and Housing Commission. Make said information available on the City’s website and at City Hall. Review information annually to ensure that any materials, links, and information provided are current.
Biennial
campaigns;
annual
review of
information
on website
4. In collaboration with the Orange County Housing Authority (OCHA):
a. Attend quarterly OCHA Housing Advisory Committee to enhance the exchange of information regarding the availability, procedures, and policies related to the Housing Assistance Voucher program and regional housing issues.
b. Support OCHA's affirmative fair marketing plan and de-concentration policies by providing five-year and annual PHA plan certifications.
Ongoing
5. Monitor FBI data annually to determine if any hate crimes are housing-related and if the City’s fair housing service provider can take action to address potential discrimination linked to the bias motivations of hate crimes.
Annually
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Issue: Disparities in Access to Opportunities
Residents across the city have relatively high access to opportunities, except for access to transit.
Homeownership rates in the city are higher for all groups when compared to the County.
However, Hispanic households have the lowest homeownership rate, and it is 20 percentage points lower than the AAPI homeownership rate, which is the highest rate in the city.
Contributing Factors:
1. Location of employers
2. Availability, type, frequency, and reliability of public transportation
3. Location and type of affordable housing available
Actions: Timeframe:
1. Request the Orange County Transportation Authority explore bus route options to ensure neighborhoods with concentration of low-income or protected class populations have access to transportation services.
Ongoing
2. Update the City’s Circulation element to better facilitate multimodal transportation to/from the lower opportunity Census Tracts to goods and services.
By mid-March
2025.
3. In cooperation with the Orange County Transportation Authority, provide community education regarding transport services for individuals with disabilities.
Ongoing
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Issue: Disproportionate Housing Needs
Housing cost burden is an issue for renters across Orange County, including in Rancho Santa Margarita.
Contributing Factors:
1. Economic displacement
2. Environmental hazards such as wildland fires and the interface with urban areas Actions: Timeframe:
1. Support local eviction prevention strategies
to reduce the number of homeless
individuals and families (homelessness
prevention services).
Annually
2. Update the City’s Local Hazard Mitigation
Plan by December 2024 to ensure
community resiliency from hazards.
By mid-2025
3. Conduct outreach to landlords and support
OCHA’s mobility counseling program to
increase Housing Choice Vouchers in the
city.
Increase Housing Choice Vouchers through the
Orange County Housing Authority by 5%
between 2021-2029.
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R. San Clemente
Issue: Concentration, Disparities in Access to Opportunity, and Disproportionate Housing Needs The majority of the city is considered an area of high White concentration, except for one Census Tract encompassing neighborhoods north and east of Max Berg Plaza Park, which is classified as low-medium concentration. There is a cluster of publicly supported housing units in this lowmedium concentration area.
Based on analysis of fair housing complaint data, individuals with disabilities may disproportionately experience discrimination in housing.
Housing cost burden is an issue for renters across Orange County, including in San Clemente.
Contributing Factors:
1. Unaffordable rents and sales prices in a range of sizes, the location and type of affordable housing, and an overall shortage of subsidized housing units
2. Displacement of residents due to economic pressures
3. Cost of repairs or rehabilitation
4. Dominance of single-family housing, which is typically more expensive than multi-family housing
5. Lack of fair housing education and outreach
Actions: Timeframe:
1. Annually promote equal access to fair housing information for all residents. Expand outreach methods beyond traditional media (newspaper or City website) to include other social media platforms such as Facebook, Twitter, and Instagram.
Focus fair housing outreach efforts in the area along the western side of Interstate 5 where racial/ethnic minorities and LMI households are concentrated.
Annually, with the goal to
increase distribution of
information by 20%
between 2021-2029
2. Continue to work under contract with the Fair Housing Foundation (FHF) and/or other qualified fair housing service providers to provide fair housing services for all segments of the community.
Serve at least 50
households each year.
Annually evaluate and
adjust the scope of services
to ensure the City address
any emerging trends in fair
housing issues.
3. In coordination with OCHA and fair housing services provider, provide outreach and education to landlords and tenants regarding the state’s new source of income protection (SB 329 and SB 229) that recognizes public assistance such as Housing Choice Vouchers (HCV) and Veterans Assistance Supportive Housing (VASH) as legitimate source of income for rent
Conduct outreach and
education annually;
increase vouchers from
Orange County Housing
Authority by 10% between
2021-2029.
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Orange County 262 25-29 Regional AFH
payments. Specifically, provide fair housing responsibility to new ADU applicants.
4. Help non-profits acquire and convert market-rate housing to affordable housing
Ongoing
5. Work to preserve the City’s affordable housing inventory Ongoing
6. Offer a variety of housing opportunities to enhance mobility among residents of all races and ethnicities by facilitating affordable housing throughout the community through the following actions:
Goal of creating 446
affordable units for lower
income households
between 2021 and 2029
a. Promote by-right approvals to facilitate at least one new multi-family housing project with at least 20% of units for lower income households
2021-2029
b. Promote Lot Consolidation program and incentives to
at least three developers.
2021-2029
c. Implement the City’s Affordable Housing Overlay to
facilitate at least one new multi-family housing project 2021-2029
d. Promote the City’s Inclusionary Housing Program to
facilitate at least one multi-family housing project with units affordable for lower income households
2021-2029
7. Provide rehabilitation financing assistance through the Neighborhood Revitalization Program and advertise this
program to the western and southern areas of the City with older housing units and overpaying households.
Assist at least two
homeowners per year
8. Increase public outreach to at least once a year and encourage residents to learn about available housing programs.
Annually
9. Through the City’s fair housing service provider (FHF) increase materials distribution by 25% through the following actions:
a. Provide fair housing education and information to
apartment managers and homeowner associations on
why denial of reasonable modifications/
accommodations is unlawful through fair housing
service contract at least once a year.
Annually
b. Conduct multi-faceted fair housing outreach at least once a year to tenants, landlords, property owners,
realtors, and property management companies.
Methods of outreach may include workshops,
informational booths, presentations to community
Annually
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Orange County 263 25-29 Regional AFH
groups, and distribution of multilingual fair housing
literature.
c. Provide general fair housing counseling and referral services to address tenant landlord issues and
investigate allegations of fair housing discrimination
and take appropriate actions to reconcile cases or refer to appropriate authorities.
Ongoing
d. Periodically monitor local newspapers and online
media outlets to identify potentially discriminatory
housing advertisements.
Annually
e. Include testing/audits within the scope of work with fair housing provider.
Ongoing
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Orange County 264 25-29 Regional AFH
S. Santa Ana
Issue: Segregation and R/ECAPs
There is moderate segregation between Hispanic and White residents, and between AAPI and White. The majority of the city is considered an area of high POC segregation and has a predominantly Hispanic population except for the Riverview West community which is predominantly AAPI. There are lots of publicly supported housing units downtown and southeast of downtown, which are high POC segregation areas. There is a higher concentration of vouchers, as well as some publicly supported housing units, west of the Santa Ana River, which is also a high POC segregation area.
There is a R/ECAP covering multiple Census Tracts in the downtown area. These tracts are predominantly Hispanic, as are all the surrounding neighborhoods.
Contributing Factors:
1. Lack of fair housing education and outreach
2. Lack of affordable housing
Actions: Timeframe:
1. Ensure all City programs and activities relating to housing and community development are administered in a manner that affirmatively furthers fair housing.
Ongoing
2. Hold annual small apartment managers’ workshop to train and educate property owners, HOAs, property managers, and tenants about best practices in property management, neighborhood safety, and landlord/tenant responsibilities.
Annually
3. Periodically prepare the Analysis of Impediments to Fair Housing Choice to identify, remove, and/or mitigate potential impediments to fair housing in Santa Ana.
Every 5 years
4. Partner with legal assistance organizations to provide legal clinics for tenants on tenants’ rights and recourse for intimidation and unjust evictions.
Annually
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Orange County 265 25-29 Regional AFH
Issue: Disparities in Access to Opportunities
Hispanic residents are more likely than other groups to be exposed to poverty in their neighborhoods and are less likely than other groups to live in close proximity to high performing schools, or in neighborhoods with high labor force participation and human capital.
Geographically, neighborhoods downtown, west of downtown, and southeast of downtown have low economic scores, low education scores, high poverty rates, and poor environmental quality.
Neighborhoods in the north and south of the city have better economic and education scores.
Contributing Factors:
1. Lack of affordable housing
2. Lack of public investment in low opportunity areas
Actions: Timeframe:
1. Publish preapproved ADU plans and publicize ADU program through dedicated web page in various languages to facilitate ADU construction.
Facilitate
construction of
723 ADUs
between 2021-
2029
2. Enforce the City’s inclusionary housing ordinance, known as the Affordable Housing Opportunity & Creation Ordinance (AHOCO), to require eligible housing development projects of five or more units, including condominium conversions, to include at least 15 percent of the units as affordable to low-income households; or 10 percent of the units affordable to very low-income households; or 5 percent to extremely lowincome households; or a minimum of 10 percent available affordable households with five (5)5 percent to low- income, 3 percent to very lowincome, and 2 percent to extremely low-income households, for rental housing. Require 5 percent of the units as affordable to moderate-income households for for-sale housing.
Ongoing
3. Establish guidelines as part of the Comprehensive Zoning Code Update for new housing development projects to include a variety of unit sizes, including units for large families, that are affordable to extremely low-, very low-, and low-income families.
By December 2025
4. Annually monitor the status of at-risk housing projects, specifically the Warwick Square, Highland Manor, and other projects that may come due.
Contact owners of properties at risk of conversion within one year of expiration to discuss City’s desire to preserve projects as affordable housing.
Annually
5. Assist low-income households with down payment assistance loans of up to $120,000 and moderate-income households with loans of up to $80,000.
Annually
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Orange County 266 25-29 Regional AFH
6. Create, assist, and support neighborhood associations, especially in R/ECAP and TCAC Census Tracts, to collaborate on projects and sponsor and hold annual events.
Annually
7. Complete infrastructure improvements in residential neighborhoods consistent with the City’s Capital Improvement Plan.
Ongoing
8. Through the City’s RFP process for Affordable Housing Development (see program 2), facilitate and encourage the development in the Transit Zoning Code plan area of varied housing types at a mix of affordability levels, including for lower income households using appropriate incentives, such as awarding bonus points to developers whose projects provide at least 75% or more for the units for extremely low-income families at 30% Area Median Income.
Annually
Issue: Disproportionate Housing Needs
Housing cost burden is an issue for renters across Orange County, including in Santa Ana.
Additionally, more than 20% of housing units are overcrowded in most of the city’s neighborhoods.
Contributing Factors:
1. High cost of housing in the private market
2. High cost of housing repairs/rehabilitation
Actions: Timeframe:
1. Implement the City’s Rent Stabilization and Just Cause Eviction Ordinance for tenants facing housing instability, including ongoing outreach and education, a program monitor system, and a schedule of penalties that may be imposed for noncompliance. Provide tenant protections beyond state mandates.
Annually
2. Provide housing assistance payments to eligible households participating in the Housing Choice Voucher Program and adhere to policies and procedures in the federal regulations and the Housing Choice Voucher Program Administrative Plan. Administer 100 percent of the funding provided to the Housing Authority annually for eligible households. This includes Special Purpose Vouchers including the Veterans Affairs Supportive Housing Program; Mainstream Voucher Program; Foster Youth to Independence Program; and Emergency Housing Voucher Program. The objectives are to:
1) Utilize 100 percent of the Annual Budget Authority provided by HUD for each CY; 2) Apply for new funding opportunities for additional vouchers; 3) Retain High Performer SEMAP status; 4) Communicate on a regular basis with active landlords by providing information on key program updates.
Ongoing
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Orange County 267 25-29 Regional AFH
3. Contract with a local nonprofit organization (currently Habitat for Humanity) to implement the City’s Residential Rehabilitation Grant Program. Provide grants for the repair and rehabilitation of single-family and mobile homes, prioritizing applicants in R/ECAP and TCAC Census Tracts and low-income households.
Annually
4. Enhance local preferences program for residents working and living in Santa Ana who are seeking affordable housing. Explore a right-of-first-refusal ordinance for mobile home parks and publicly supported multifamily residential properties to minimize tenant displacement and preserve affordable housing stock. Evaluate and pursue collective ownership models for mobile home parks as a tool to prevent displacement.
Ongoing
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Orange County 268 25-29 Regional AFH
T. Tustin
Issue: Segregation
There is moderate segregation between Hispanic and White residents. There is a concentration of publicly supported housing units in the south, in neighborhoods that are predominantly AAPI.
Contributing Factors:
1. Lack of affordable housing opportunities.
Actions: Timeframe:
1. Engage linguistically isolated communities by translating official City announcements (i.e., community meeting, hearings, etc.) to Spanish and disseminating printed copies of information to renters, property owners, and via social media, to expand knowledge of affordable housing options in High Opportunity Areas.
Ongoing
2. Conduct at least one community informational meeting in areas that lack affordable housing opportunities and that exhibit high segregation, on an annual basis.
Annually
3. Improve housing conditions in segregated areas establishing a multi-family quality rental housing inspection program that focuses on high segregation areas. The City will receive at least one monthly referral from the City’s Neighborhood Improvement Task Force (NITF) (NITF includes Code Enforcement, Police, Social Service/County, School District representatives, City staff form various Departments) to identify households in need of this tenant protection and anti-displacement focused program; focused on improving the quality of single family and multi-family residential dwellings by providing technical assistance and funds to repairs substandard housing conditions. The City will conduct at least five multi-family quality rental housing inspections in the program’s first year and will increase the number of annual inspections by 2, each year thereafter, until 2029.
2025
through
2029
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Orange County 269 25-29 Regional AFH
Issue: Disparities in Access to Opportunities
Hispanic residents (especially those living below the FPL) are less likely than other groups to live in close proximity to high performing schools, or in neighborhoods with high labor force participation and human capital; and are more likely to be exposed to poverty in their neighborhoods. Additionally, based on analysis of fair housing complaint data, individuals with disabilities disproportionately experience discrimination in housing.
Homeownership rates are very low for Black and Hispanic households, equaling less than half of the homeownership rate for AAPI and White households.
Contributing Factors:
1. Lack of affordable housing in high opportunity areas.
2. Lack of public and private investment in low-resource neighborhoods.
Actions: Timeframe:
1. Create an ADU/SB 9 accelerator program and focus in
High Opportunity Areas within the northeast portion of
the City where there are predominately single-family
residences to expand housing choices. This program
could include a permit fee waiver for affordable housing units, permit fast tracking, and technical assistance.
By 2025, the City will adopt a
program and mail out
information pertaining to the new
accelerator program for ADUs
and SB 9 developments,
specifically to high opportunity
areas.
2. Provide technical assistance and permit fast-tracking for new ADU/SB9 development proposals and at least six
projects that include housing affordable to lower income households annually through 2029.
Fast track a minimum of 10 ADU
and/or SB 9 developments in
high opportunity areas on an
annual basis; reduce review
times by 25% compared to year
2022.
3. Translate the City’s Tustin Housing Authority website and factsheets promoting affordable housing opportunities
and ancillary support services, such as transit and
childcare, into Spanish, and distribute to low resource areas.
Annually, 2023 through 2029
4. Tustin Legacy (Tract 744.15) is a Master Planned
Community being developed. Although the tract has
been identified as low resource, it has been substantially enhanced with new resources within recent years. The
area comprises 1,500 acres, of which 800 acres remain for future development of a diverse housing stock,
community amenities, and resources. By 2029, the City
will continue to implement projects that increase assets in the Specific Plan area as proposed by developers and identified in the Tustin Legacy Backbone Infrastructure By 2029, the City anticipates the
Tustin Legacy (Tract 744.15) to be
identified as a “high resource”
area according to TCAC/HCD
Opportunity Map criteria.
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Orange County 270 25-29 Regional AFH
Program. Improvements will provide increased access to
safe and decent housing, transportation, recreation, and a healthy environment.
5. Create a “Financial Assistance for Child Care” webpage with information and links to Children’s Home Society of California (CHS) and the Orange County Department of
Education (OCDE). These programs provide funding to
low-income families for childcare services. The City will work with Tustin Preschool, Kiddie Academy of Tustin, or other local preschool programs within Census Tract
755.14 to advertise and promote financial assistance
through pamphlets, e-blasts, and other applicable online community forums (such as Facebook and NextDoor).
By December 2022; update
annually thereafter
Issue: Disproportionate Housing Needs
Housing cost burden is an issue for renters across Orange County, including in Tustin.
Contributing Factors:
1. Lack of affordable housing.
2. Substandard housing in low-resource areas.
3. High cost of housing repairs/rehabilitation.
Actions: Timeframe:
1. The City will partner with a non-profit to develop and launch a CDBG funded Housing Rehabilitation Program
to facilitate the repair of dilapidated housing to address lack of plumbing, kitchen facilities and repairs to provide relief of overcrowding. Program participants will be
provided grants and/or loans to conduct necessary
housing updates.
Starting in July 2024, the program
will facilitate four (4) rehabilitation
projects to assist with reducing
overcrowding per year and
another four (4) projects will assist
with general habitability repairs,
with a total of eight (8) dwellings
assisted annually.
2. The City will amend the zoning code to require all new multi-family projects to provide at least five (5) percent large family units (3+ bedrooms) which will prevent
overcrowding and further cost burden, by addressing
demand for such units and increasing the large units
into the local housing inventory.
Zoning code amended by January
2024. Four (4) large family units
will be generated annually, and 32
total by 2029.
3. Improve housing conditions in segregated areas
establishing a multi-family quality rental housing
inspection program that focuses on high segregation
areas. The City will receive at least one monthly referral 2025 through 2029
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Orange County 271 25-29 Regional AFH
from the City’s Neighborhood Improvement Task Force
(NITF) (NITF includes Code Enforcement, Police, Social
Service/County, School District representatives, City
staff form various Departments) to identify households
in need of this tenant protection and anti-displacement focused program; focused on improving the quality of
single family and multi-family residential dwellings by providing technical assistance and funds to repairs
substandard housing conditions. The City will conduct at least five multi-family quality rental housing inspections in the program’s first year and will increase the number of annual inspections by 2, each year thereafter, until 2029.
447
Orange County 272 25-29 Regional AFH
U. Westminster
Issue: Segregation, Disparities in Access to Opportunities, and Disproportionate Housing Needs The majority of the city is considered an area of high POC segregation and has a predominantly AAPI population with a few exceptions. The northwestern corner of the city, between I-405 and Bolsa Chica Rd is an area of high White segregation. The location of publicly supported housing units and areas with highest concentration of vouchers aligns with the high POC segregation areas in the central part of the city. There are no publicly supported housing units, and fewer vouchers in use, in the western parts of the city that are high White segregation, racially integrated, and low-medium segregation areas.
AAPI residents are more likely than other groups to be exposed to poverty in their neighborhoods and are less likely than other groups to live in close proximity to high performing schools or jobs.
Native American residents living below the FPL are also less likely to live in close proximity to high performing schools or jobs. Additionally, based on analysis of fair housing complaint data, individuals with disabilities disproportionately experience discrimination in housing.
There are large racial/ethnic disparities in homeownership. Black, Hispanic, and Native American households have the lowest rates (around 30%), and these rates are less than half the homeownership rate for White households, which is the highest in the city. The AAPI homeownership rate in the city is lower than in the County overall and is nearly 20 percentage points lower than the White homeownership rate in the city.
Housing cost burden is an issue for renters across Orange County, including in Westminster.
Contributing Factors:
1. Lack of resources for fair housing agencies and organizations
2. Land use and zoning laws.
3. Displacement of residents due to economic pressures.
4. Location and type of affordable housing.
5. Lack of private investment in specific neighborhoods.
6. Lack of community revitalization strategies
Actions: Timeframe:
1. Maintain an inventory of the available sites for residential development and post it online (with annual updates) and provide it to prospective residential developers upon request. Monitor development trends to ensure continued ability to meet the RHNA.
Ongoing
2. Continue to perform project-by-project evaluation to determine if adequate capacity remains for the remaining RHNA.
Ongoing
3. Adopt new mixed-use zoning districts and rezone all sites identified in the City’s most recent Housing Element to accommodate shortfall housing need, consistent with the densities, acreages, and capacity Completed
448
Orange County 273 25-29 Regional AFH
levels identified in the Housing Element. Complete all rezoning pursuant to Government Code Section 65583.2, subdivisions (h) and (i).
4. Encourage and facilitate construction of ADUs through the following actions:
a. Update the City’s ADU Ordinance to reflect state law. 2025 b. Prepare pre-approved ADU design templates, tailored to meet specific zoning and building standards. Use of these design templates by a potential developer would ensure that the proposed ADU meets most, if not all, required standards at the outset of the development process, minimizing and streamlining the review process. This is expected to significantly incentivize production of ADUs by removing costs, reducing approval timeframes, and providing high application certainty.
Completed
c. Promote development of ADUs by continuing to provide written information at the City’s planning counter and on the City’s website and update it annually.
Ongoing
d. Monitor ADU permit applications and approvals annually through the Housing Element Annual Progress Report (APR) process; identify and implement additional incentives or other strategies including rezoning, as appropriate, to ensure adequate sites during the planning period. Should ADU production fall short of projections for three consecutive APR reporting periods then new incentives, strategies, and/or rezoning shall be implemented within six months of the third submitted APR.
Annually
e. Promote the City’s ADU Process Guide (available on the City’s website).
Ongoing
f. Host an annual workshop on accessory dwelling units, including guidance for development and common questions and answers.
Annually
g. Continue requesting information on rental rates to determine their affordability and review this information annually against the projects identified in the Housing Element.
Annually
5. For all project applications, identify need for replacement of affordable housing units and ensure replacement, if required, occurs.
Ongoing
6. Use HOME Funds and Housing Successor Funds to increase affordable housing production through the following actions:
a. Provide HOME Funds and Housing Successor Funds to assist development such as for the purpose of acquisition and/or 2021-2029
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Orange County 274 25-29 Regional AFH
subsidizing the cost of land acquisition and off-site improvements for construction of 100 new affordable housing units.
b. Use HOME Funds and Housing Successor Funds to acquire 16 multifamily or single-family units to be rehabilitated by a nonprofit and restricted to low-income rental housing.
2021-2029
c. Contact local service providers and developers annually and inform them of the potential partnerships with the Housing Division through paperless methods such as phone calls, email, and online postings.
Annually
7. Encourage development of affordable and special needs housing opportunities
a. Contact affordable housing providers (including non-profit providers) annually to encourage them to develop affordable housing for low-/very-low-income households and the disabled in Westminster.
Annually
b. Maintain on the City’s website an inventory of sites suitable for the development of affordable housing for low-income households and households with special needs and update it annually.
Ongoing
c. Support and prepare applications for funding annually. Annually d. Provide incentives and concessions to developers to assist in the development of housing for lower income households or
households with special needs, such as flexible development standards, expedited processing, and support from state funding including SB 2 Planning Grants and Permanent Local Housing Allocation. The preparation of flexible development standards and expedited processing for projects including affordable units will be addressed through the City’s Zoning Code Update.
2022-2025
e. Explore additional funding sources and strategies such as boomerang funds and financing districts to assist the development of housing for lower income households on a biennial basis.
Ongoing
8. Continue to make available the City’s application submittal packet to provide interested builders or service providers with Density Bonus information through paperless methods such as online postings.
Provide printed copies at the front counter. Meet with developers to explain the process and requirements.
Ongoing
9. Maintain a Zoning Code that is consistent with state law regarding low barrier navigation centers, supportive housing, employee housing, and Ongoing
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Orange County 275 25-29 Regional AFH
farmworker housing; and update the Zoning Code as needed to comply with future changes.
10. If an application to convert a residential development to a condominium/stock cooperative is submitted to the City, the provisions of the City’s condominium conversion ordinance shall be implemented and enforced.
Ongoing
11. Implement the mobile home park conversion ordinance by requiring applicants to (a) identify the quantity and conditions of each lowerincome household/unit, and (b), upon approval of a permit to convert a mobile home park, implement mitigation measures that fully mitigate the net loss of low-income households.
Ongoing
12. Conduct a Displacement Risk Analysis Study to identify the local conditions that lead to displacement and develop and implement an action program based on the results. Identify potential partners to participate in the study that specialize in eviction-related topics related to displacement, such as the Fair Housing Foundation. Annually monitor program effectiveness.
2021-2029
13. Implement incentives that will facilitate lot consolidation and increase the overall feasibility of affordable housing projects; as part of the City’s Zoning Code Update, incorporate specific development standards that support lot consolidation, such as a reduction in parking standards, shared parking arrangements in mixed-use projects, a reduction of minimum unit size, and modification of setback requirements. Apply annually for grant funding to prepare conceptual development plans on consolidated lots.
2022-2025 for code
update and
annually for grant
funding
14. Address substandard housing through the following actions:
a. Using the land use data generated from the General Plan Update, adopted in 2020, combined with the data generated from the 2007 Housing Conditions Survey, identify multifamily projects with the most significant level of deterioration for the purpose of providing loans for rehabilitation of multifamily units, subject to the applicable funding source requirements.
2021-2029
b. Provide funding through the Neighborhood Pride Multi-Family Rental Rehabilitation Program to bring at least 14 substandard units up to code.
2021-2029
c. Continue to conduct annual community workshops explaining code compliance issues. Prepare and distribute a Good Neighbor Guide describing how residents can maintain a healthy, safe, and appealing property.
2021-2029
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Orange County 276 25-29 Regional AFH
d. Continue to utilize the Community Preservation Unit to assist with community education and neighborhood maintenance.
2021-2029
15. Increase fair housing knowledge and enforcement through the following actions:
a. Continue to make available a program directory or list of housing resources (including resources and regulatory opportunities such as the Secondary Unit Ordinance) to the public through the City’s website and in City Hall.
Ongoing
b. Continue to advertise the City’s reasonable accommodations provisions using the City’s website, brochures, and other forms of appropriate media. Ensure continued use of the City’s reasonable accommodation provisions, by processing in a timely manner any application requesting a reasonable accommodation.
Ongoing
c. Continue the City’s commitment to working with the Fair Housing Foundation and disseminating fair housing information at City Hall, public libraries, the Chamber of Commerce, and on the City’s website. Include within the annual budget adequate funding to continue the contract with the Fair Housing service provider.
Annually
452
910 Calle Negocio
2nd Floor
San Clemente, California
www.san-clemente.org
AGENDA REPORT
CITY OF SAN CLEMENTE
CITY COUNCIL MEETING
CITY OF SAN CLEMENTE 1
Meeting Date: May 6, 2025 Agenda Item: 9A.
Submitted By: City Clerk
Prepared By: Laura Campagnolo, City Clerk
Subject:
..titl e
CONSIDERATION OF AND POTENTIAL INTRODUCTION (FIRST READING) OF AN
ORDINANCE TO IMPOSE TERM LIMITS ON CITY COMMISSION AND/OR COMMITTEE MEMBERS ..body
Fiscal Impact:
None.
Summary:
At its meeting of April 1, 2025, the City Council directed that Staff agendize for discussion the possibility of imposing term limits on City Commission and/or Committee members.
Based on City Council discussion, Staff has drafted an Ordinance for the City Council to consider.
The Ordinance provides that each City Commission and Committee member shall have a two full 2-year term limit, and, after taking two years off, they may reapply for the same Commission and/or Committee. The Commission/Committee member shall serve no more than four full 2-year terms on any one Commission or Committee (i.e., two 2-year terms, with a two year break in between and then another two 2-year terms for a total of eight years). Commission/Committee members would be able to serve on different City Commissions and Committees at the end of their two terms. Appointments to fill a vacancy of a term for less than one year would not count toward the limit. Commission and Committees members can only serve on one Commission or Committee at any one time.
Additionally, a question was raised at a previous City Council meeting about whether the process for selecting commission and committee members would be required to change when the mayor is elected in 2026. Research has confirmed that Government Code section 40605 does not require the process to change and is not applicable to the City of San Clemente.
Discussion:
Government Code section 40605 provides:
In general law cities where the office of mayor is an elective office pursuant to Article 5 (commencing with Section 34900) of Chapter 7 of Part 1 of Division 2 of Title 4, the mayor, with the approval of the city council, shall make all appointments to boards, commissions, and committees unless otherwise specifically provided by statute.
453
Meeting Date: May 6, 2025 Agenda Item: 9A.
CITY OF SAN CLEMENTE 2
(Emphasis added.) Government Code section 34900 allows for converting to an elected mayor when the city council has submitted the question to the electors.
Starting in 2026, the mayor for the City of San Clemente will be elected pursuant to the districting ordinance adopted by the City Council pursuant to Government Code section 34886, not pursuant to Government Code section 34900. California Government Code section 34886 enables cities to change to by-district elections by ordinance without voter approval:
Notwithstanding Section 34871 or any other law, the legislative body of a city may adopt an ordinance that requires the members of the legislative body to be elected by district or by district with an elective mayor, as described in subdivisions (a) and (c) of Section 34871, without being required to submit the ordinance to the voters for approval.
Since the mayor will not be an elective office pursuant to Government Code section 34900, Government Code section 40605 does not apply. Therefore, the City Council is free to maintain the current process for selecting commission and committee members after the mayor is elected in 2026.
Council Options:
Introduce and conduct a first reading of Ordinance No. 1790. Direct Staff to modify the Ordinance and return to the City Council with an updated Ordinance.
Take no action.
Environmental Review/Analysis:
This is not a “project” under the California Environmental Quality Act (CEQA).
Recommended Actions:
Staff Recommendation ..recommendation
If the City Council determines to implement term limits for City Commissions and Committees, introduce and conduct the first reading of Ordinance No. 1790 entitled AN
ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SAN CLEMENTE, CALIFORNIA, ADDING SECTIONS 2.28.080, 2.32.080, 2.36.080, 2.43.080, 2.45.080 AND 2.46.080 TO THE
MUNICIPAL CODE OF THE CITY OF SAN CLEMENTE TO ADD TERM LIMITS, RELATING TO
THE BEACHES, PARKS AND RECREATION COMMISSION, PLANNING COMMISSION, GOLF
COURSE COMMITTEE, INVESTMENT ADVISORY COMMITTEE, ARTS AND CULTURE COMMITTEE, AND COMMUNITY SAFETY AND WELFARE COMMITTEE, RESPECTIVELY. ..end
Attachment:
1. Ordinance No. 1790
Notification:
City Commission and Committee members
454
Attachment 1
ORDINANCE NO. 1790
AN ORDINANCE OF THE CITY COUNCIL OF THE
CITY OF SAN CLEMENTE, CALIFORNIA, ADDING
SECTIONS 2.28.080, 2.32.080, 2.36.080, 2.43.080,
2.45.080 AND 2.46.080 TO THE MUNICIPAL CODE
OF THE CITY OF SAN CLEMENTE TO ADD TERM
LIMITS, RELATING TO THE BEACHES, PARKS AND
RECREATION COMMISSION, PLANNING
COMMISSION, GOLF COURSE COMMITTEE,
INVESTMENT ADVISORY COMMITTEE, ARTS AND
CULTURE COMMITTEE, AND COMMUNITY SAFETY
AND WELFARE COMMITTEE, RESPECTIVELY
WHEREAS, at its regular meeting of April 1, 2025, the San Clemente City Council expressed a desire to add term limits to City Commissions and Committees; and WHEREAS, Commission and Committee member terms are two years; and WHEREAS, the City Council believes that setting term limits for each Commission and Committee member will provide more opportunity for public participation and is in the best interests of the City; and
WHEREAS, setting term limits for each Commission and Committee member requires additions to the San Clemente Municipal Code (SCMC); and WHEREAS, the City Council introduced and conducted a first reading of the ordinance at its regular meeting on May 6, 2025, and considered any public input provided at that time.
NOW, THEREFORE, the City Council of the City of San Clemente, California, hereby ordains as follows:
Section 1: Section 2.28.080, relating to term limits for the Beaches, Parks and Recreation Commission, is hereby added to the SCMC to read in its entirety as set forth in Exhibit A attached hereto and incorporated fully herein.
Section 2: Section 2.32.080, relating to term limits for the Planning Commission, is hereby added to the SCMC to read in its entirety as set forth in Exhibit B attached hereto and incorporated fully herein.
Section 3: Section 2.36.080, relating to term limits for the Golf Course Committee, is hereby added to the SCMC to read in its entirety as set forth in Exhibit C attached hereto and incorporated fully herein.
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Section 4: Section 2.43.080, relating to term limits for the Investment Advisory Committee, is hereby added to the SCMC to read in its entirety as set forth in Exhibit D attached hereto and incorporated fully herein.
Section 5: Section 2.45.080, relating to term limits for the Arts and Culture Committee, is hereby added to the SCMC to read in its entirety as set forth in Exhibit E attached hereto and incorporated fully herein.
Section 6: Section 2.46.080, relating to term limits for the Community Safety and Welfare Committee, is hereby added to the SCMC to read in its entirety as set forth in Exhibit F.
Section 7: If any section, subsection, subdivision, paragraph, sentence, clause or phrase added by this Ordinance, or any part thereof, is for any reason held to be unconstitutional or invalid or ineffective by any court of competent jurisdiction, such decision shall not affect the validity or effectiveness of the remaining portions of this Ordinance or any part thereof. The City Council hereby declares that it would have passed each section, subsection, subdivision, paragraph, sentence, clause or phrase thereof irrespective of the fact that any one or more subsections, subdivisions, paragraphs, sentences, clauses or phrases are declared unconstitutional, invalid or ineffective.
Section 8: The City Clerk shall certify to the adoption of this ordinance and cause it, or a summary thereof, to be published once within fifteen (15) days of adoption in a newspaper of general circulation printed and published within the City of San Clemente, and shall post a certified copy of this ordinance, including the vote for and against the same, in the Office of the City Clerk in accordance with California Government Code Section 36933.
Section 9. This Ordinance shall become effective 30 days after its adoption.
APPROVED AND ADOPTED this _____day of _________________, ________.
ATTEST:
_______________________________ ___________________________ City Clerk of the City of Steve Knoblock, Mayor of the
San Clemente, California City of San Clemente, California 456
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STATE OF CALIFORNIA )
COUNTY OF ORANGE ) ss.
CITY OF SAN CLEMENTE )
I, LAURA CAMPAGNOLO, City Clerk of the City of San Clemente, California, hereby certify that Ordinance No. 1790 having been regularly introduced at the meeting of _______________________, was again introduced, the reading in full thereof unanimously waived, and duly passed and adopted at a regular meeting of the City Council held on the _____day of _____________, _______, and said ordinance was adopted by the following vote:
AYES:
NOES:
ABSENT:
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of San Clemente, California, this _____ day of ______________________, ________.
__________________________
CITY CLERK of the City of
San Clemente, California
APPROVED AS TO FORM:
________________________________
Elizabeth A. Mitchell, CITY ATTORNEY
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EXHIBIT A
Chapter 2.28 BEACHES, PARKS AND RECREATION COMMISSION
2.28.010 Establishment of the Beaches, Parks and Recreation Commission; composition; appointment of members.
There is established a Beaches, Parks and Recreation Commission which shall consist of nine San Clemente citizens appointed by the City Council. At least three of the members shall have a background or technical experience in coastal issues.
2.28.020 Function.
The Beaches, Parks and Recreation Commission's functions and duties are to:
A. Act in an advisory capacity to the City Council in all matters pertaining to parks, beaches, recreation, parkways, and coastal issues as identified by the City Council;
B. Make recommendations to the City Council and advise the City Council in matters pertaining to the creation, operation, maintenance, management, and control of community recreation programs, playgrounds, and indoor and outdoor recreations, activities, and facilities;
C. Provide feedback on projects to be considered during the annual budget for parks, beaches, recreation, and parkways during the preparation of the annual budget and make recommendations with respect thereto to the City Council and the City Manager;
D. Assist in the planning of parks and support the coordination of recreation programs for the public, promote and stimulate public interests therein, and to that end solicit, to the fullest extent possible, the cooperation of all public and private agencies interested therein;
E. Evaluate and review park development plans of the City; F. Serve as a sounding board for citizen input on matters relating to coastal areas adjacent to, or having the ability to affect, the City of San Clemente; G. Participate in the Social Services Grant Subcommittee by appointing one member of the Commission, by majority vote, no later than December 31 of each year; H. Develop an annual work plan with specific goals and objectives for the coming year. The work plan, with recommendations, shall be submitted to the City Council no later than October 1 of each year. The plan shall be submitted in written form for approval at a City Council meeting. Any amendments to the work plan shall require Council approval;
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I. Limit meetings to three hours unless otherwise approved by a majority vote of the Commission plus the concurrence of the primary staff support to the Commission; and
J. Perform such other duties as may be prescribed by the City Council.
2.28.030 Beaches, Parks and Recreation Commission—Term of office.
The terms of office of members of the Beaches, Parks and Recreation Commission shall be for two years from July 1st to June 30th of the second following year, and with such terms staggered so that four Commissioners are appointed in even-numbered years and five Commissioners are appointed in odd-numbered years. Annually, at the first meeting after the newly appointed Commission members assume office in July, the Commission shall select a chair and vice-chair from among its members. No less than 60 days prior to the expiration of terms, the City Clerk shall notify the City Council of the forthcoming vacancies and the City Council shall make the necessary appointments prior to the expiration of the terms. In the event the City Council does not make the necessary appointments prior to the expiration of the terms, existing members with expiring terms shall continue to serve as Beaches, Parks and Recreation Commissioners until successors are appointed by the City Council and assume office.
2.28.040 Meetings—Attendance.
The Beaches, Parks and Recreation Commission shall hold meetings bi-monthly (every two months) in accordance with the rules of procedure to be enacted and recorded in a book of official proceedings. The location, dates, time, and organization of Beaches, Parks and Recreation Commission meetings shall be established by resolution of the Beaches, Parks and Recreation Commission. Any member of the Beaches, Parks and Recreation Commission who is absent from two consecutive regular meetings of the Beaches, Parks and Recreation Commission, without furnishing to the City Clerk a certificate of illness from a duly practicing physician, or without the authorization of the Beaches, Parks and Recreation Commission to be absent from two consecutive regular meetings for good cause, shall, as a result, surrender his or her office on the Beaches, Parks and Recreation Commission and the office shall be considered vacant.
2.28.050 Filling of vacancies—Removal of members.
Any vacancy occurring in the office of a member of the Beaches, Parks and Recreation Commission shall be filled in the same manner as the original appointment, and a successor shall hold office for the unexpired portion of the term of his or her predecessor. Each member of the Beaches, Parks and Recreation Commission shall serve at the pleasure of the City Council and may be removed from office with or without cause during his or her term in office by a majority vote of all members of the City Council. 459
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2.28.060 Voting power of members.
The members of the Beaches, Parks and Recreation Commission shall each have one vote on any matter pending before the commission.
2.28.070 Commission subject to state law, etc.
The Beaches, Parks and Recreation Commission shall be subject to the rules and regulations regarding the conduct of meetings under state and city law and to the provisions of this Code and any other ordinance of the City.
2.28.080 Term Limits.
Beaches, Parks and Recreation Commissioners shall be subject to a term limit of two full 2-year terms. Commissioners who have served for two full 2-year terms must take at least a two-year hiatus from service on the Beaches, Parks and Recreation Commission before reapplying to serve as a Commissioner on that Commission. During such hiatus, such person may serve on a different Commission or Committee. Beaches, Parks and Recreation Commissioners shall serve no more than a total of four full 2-year terms on the Commission (4 two-year terms). Appointments to fill of vacancy of a term for less than one year shall not count toward the limit. Commission and Committee members may serve on only one Commission or Committee at a time. The City Council may exercise its discretion to waive any of the foregoing limitations if there is a lack of applicants or for other cause.
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EXHIBIT B
Chapter 2.32 PLANNING COMMISSION
2.32.010 Establishment—Composition.
There is established a Planning Commission which shall consist of seven (7) members appointed by the City Council. The Planning Commission shall operate in accordance with the planning and zoning laws of the State of California and the laws and ordinances of the City.
2.32.020 Function.
The Planning Commission's functions and duties are to:
A. Hold regularly scheduled meetings and public hearings to review and act on applications required by Chapter 17.16, applications, of the Zoning Ordinance, such as permits, variances, site plans, sign exceptions, architectural design, signs and other approvals. The Commission can approve, approve with conditions, or deny applications, subject to appeal procedures; B. Make recommendations to the City Council on items such as tentative subdivision maps, tentative parcel maps, General Plan amendments, specific plan amendments, and zoning amendments;
C. Serve as the Transportation Parking Committee;
D. Serve as the Cultural Heritage Board in which the Commission's duties are to:
1. Compile and maintain a current list of all of such sites, buildings or structures which it has determined to be historical or cultural sites or monuments. Such list shall contain a brief description of the site, building, structure or object in its natural setting, and the reasons for its inclusion in the list;
2. Publish and transmit said list to all interested parties and to disseminate public information concerning the list, or any site, building, structure or object in its natural setting contained therein;
3. Take all steps necessary to preserve such historically significant properties which are not in conflict with the health, safety, and general welfare of the public, or the powers and duties of the City, or its several boards, officers or departments;
4. Make any recommendations to the City Council in connection with the exercise of its duties which it determines are necessary to implement or carry out the spirit and intent of this subsection;
5. Designate landmarks and historical districts subject to the approval of the City Council.
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E. Serve as the Design Review Subcommittee. The Planning Commission appoints four (4) Commissioners to the Design Review Subcommittee; three (3) serve as active members and one (1) is an alternate member. The Subcommittee advises applicants on how projects can best comply with the City's Design Guidelines and/or City Policies. The Subcommittee makes recommendations to review authorities (e.g., City Council, Planning Commission, Zoning Administrator) regarding a project's compliance with City Design Guidelines and consistency with goals to preserve cultural resources.
The Design Review Subcommittee focuses on site and project design rather than on land use issues, which are the purview of the review authority; F. Perform other functions the City Council deems appropriate.
2.32.030 Terms of office.
The terms of office of members of the Planning Commission shall be for two (2) years from July 1st to June 30th of the second following year, and with such terms staggered so that three (3) commissioners are appointed in odd-numbered years and four (4) commissioners are appointed in even-numbered years. The City Council shall endeavor to ensure that at least two members of the Planning Commission have backgrounds in architecture, landscape architecture, or planning. It is also herein declared to be advantageous to have one (1) member of the Planning Commission possess a background in cultural heritage or similar field. Not less than sixty (60) days prior to the expiration of the terms of any member of the Planning Commission, the City Clerk shall notify the City Council of the forthcoming vacancies, and the City Council shall make the necessary appointments prior to the expiration of the terms. In the event the City Council does not make the necessary appointments prior to the expiration of the terms, existing members with expiring terms shall continue to serve as Planning Commissioners until successors are appointed by the City Council and such successors assume office. Annually, at the first meeting after new appointments have been made, the Planning Commission shall select a chair and vice-chair from among its members.
2.32.040 Meetings—Attendance.
The Planning Commission shall hold meetings at least once a month in accordance with the rules of procedure to be enacted and recorded in a book of official proceedings.
The location, dates, time, and organization of Planning Commission meetings shall be established by resolution of the Planning Commission. Any member of the Planning Commission who is absent from three (3) consecutive regular meetings of the Planning Commission, without furnishing to the City Clerk a certificate of illness from a duly practicing physician, or without the authorization of the Planning Commission to be absent from three (3) consecutive meetings for good cause, shall, as a result, surrender his or her office on the Planning Commission and the office shall be considered vacant. 462
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2.32.050 Filling of vacancies—Removal of members.
Any vacancy occurring in the office of a member of the Planning Commission shall be filled in the same manner as the original appointment, and a successor shall hold office for the unexpired portion of the term of his or her predecessor. Each member of the Planning Commission shall serve at the pleasure of the City Council and may be removed from office with or without cause during his or her term in office by a majority vote of all members of the City Council.
2.32.060 Voting power of members.
The members of the Planning Commission shall each have one (1) vote on any matter pending before the Commission.
2.32.070 Commission subject to state law, etc.
The Planning Commission shall be subject to the rules and regulations of the planning and zoning law of the State of California, the rules and regulations regarding the conduct of meetings under state law, and to the provisions of this Code and any other ordinance of the City.
2.28.080 Term Limits.
Planning Commissioners shall be subject to a term limit of two full 2-year terms.
Commissioners who have served for two full 2-year terms must take at least a two-year hiatus from service on the Planning Commission before reapplying to serve as a Commissioner on that Commission. During such hiatus, such person may serve on a different Commission or Committee. Planning Commissioners shall serve no more than a total of four full 2-year terms on the Commission (4 two-year terms). Appointments to fill of vacancy of a term for less than one year shall not count toward the limit. Commission and Committee members may serve on only one Commission or Committee at a time.
The City Council may exercise its discretion to waive any of the foregoing limitations if there is a lack of applicants or for other cause.
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EXHIBIT C
Chapter 2.36 GOLF COURSE COMMITTEE
2.36.010 Establishment of the Golf Course Committee; composition; appointment of members.
There is established a Golf Course Committee which shall consist of five San Clemente citizens appointed by the City Council.
2.36.020 Function.
The Golf Course Committee's functions and duties are to:
A. Act in an advisory capacity to the City Council in planning pertaining to the use and operation of the municipal golf course;
B. Make suggestions and recommendations to the City Manager and City Council pertaining to the annual budget for the municipal golf course during the process of its preparation;
C. Evaluate and review the restaurant lease, golf pro agreement, and facilities development plans for the municipal golf course;
D. Assist in the preparation of rate schedules for the users of the municipal golf course and make recommendations regarding same to the City Council; E. Develop an annual work plan with specific goals and objectives for the coming year. The work plan, with recommendations, shall be submitted to the City Council no later than October 1 of each year. The plan shall be submitted in written form for approval at a City Council meeting. Any amendments to the work plan shall require Council approval;
F. Limit meetings to three hours unless otherwise approved by a majority vote of the Committee plus the concurrence of the primary staff support to the Committee;
G. Perform such other duties as may be prescribed by the City Council.
2.36.030 Golf Course Committee—Terms of office.
The terms of office of members of the Golf Course Committee shall be for two years from July 1st to June 30th of the second following year, and with such terms staggered so that three Committee members are appointed in even-numbered years and two Committee members are appointed in odd-numbered years. Annually, at the first meeting after the newly appointed Committee members assume office in July, the Committee shall select a chair and vice-chair from among its members. No less than 60 days prior to the expiration of terms, the City Clerk shall notify the City Council of the forthcoming vacancies and the City Council shall make the necessary appointments prior to the expiration of the terms. In the event the City Council does not make the necessary appointments prior to the expiration of the terms, existing members with expiring terms shall continue to serve as Golf Course Committee members until successors are appointed by the City Council and assume office. 464
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2.36.040 Meetings—Attendance.
The Golf Course Committee shall hold meetings quarterly (January, April, July and October) in accordance with the rules of procedure to be enacted and recorded in a book of official proceedings, The location, dates, time and organization of Golf Course Committee meetings, shall be established by resolution of the Golf Course Committee.
Any member of the Golf Course Committee who is absent from three consecutive regular meetings of the Golf Course Committee, without furnishing to the City Clerk a certificate of illness from a duly practicing physician, or without the authorization of the Golf Course Committee to be absent from three consecutive regular meetings for good cause, shall, as a result, surrender his or her office on the Golf Course Committee and the office shall be considered vacant.
2.36.050 Filling of vacancies—Removal of members.
Any vacancy occurring in the office of a member of the Golf Course Committee shall be filled in the same manner as the original appointment, and a successor shall hold office for the unexpired portion of the term of his or her predecessor. Each member of the Golf Course Committee shall serve at the pleasure of the City Council and may be removed from office with or without cause during his or her term in office by a majority vote of all members of the City Council.
2.36.060 Voting power of members.
The members of the Golf Course Committee shall each have one vote on any matter pending before the committee.
2.36.070 Committee subject to state law, etc.
The Golf Course Committee shall be subject to the rules and regulations regarding the conduct of meetings under state and city law and to the provisions of this Code and any other ordinance of the City.
2.36.080 Term Limits.
Golf Course Committee Members shall be subject to a term limit of two full 2-year terms. Committee Members who have served for two full 2-year terms must take at least a two-year hiatus from service on the Golf Course Committee before reapplying to serve as a Member on that Committee. During such hiatus, such person may serve on a different Commission or Committee. Golf Course Committee Members shall serve no more than a total of four full 2-year terms on the Committee (4 two-year terms).
Appointments to fill of vacancy of a term for less than one year shall not count toward the limit. Commission and Committee members may serve on only one Commission or Committee at a time. The City Council may exercise its discretion to waive any of the foregoing limitations if there is a lack of applicants or for other cause. 465
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EXHIBIT D
Chapter 2.43 INVESTMENT ADVISORY COMMITTEE
2.43.010 Establishment of Investment Advisory Committee—Composition— Appointment of Members.
There is established an Investment Advisory Committee which shall consist of five members. All members of the Investment Advisory Committee shall be San Clemente citizens, with the exception of the Industry Specialist representative who is not required to reside in San Clemente. The City Council shall appoint two San Clemente citizens and one current member of the City Council to serve on the Committee. The Committee shall also consist of the City Treasurer, who shall serve as Chair of the Committee, as well as one Industry Specialist to be appointed by the City Treasurer.
2.43.020 Function.
The Investment Advisory Committee's functions and duties are to:
A. Review and recommend City Investment policies to the City Council; B. Review investment practices for performance and conformance to adopted policies and procedures;
C. Limit meetings to three hours unless otherwise approved by a majority vote of the Committee plus the concurrence of the primary staff support to the Committee;
D. Perform such other duties as may be prescribed by the City Council.
2.43.030 Investment Advisory Committee—Terms of Office.
The terms of office of the Investment Advisory Committee members shall be as follows:
City Treasurer (Chair) - Serves during the City Treasurer's term of office and until a new City Treasurer assumes office.
Two citizen members appointed by the City Council - The terms of the City Council appointed citizen representatives to the Investment Advisory Committee shall be for two years from July 1st to June 30th of the second following year, and with such terms staggered so that one (1) Committee member is appointed in even-numbered years and one Committee member is appointed in odd-numbered years. No less than 60 days prior to the expiration of the term of a Council-appointed citizen member, the City Clerk shall notify the City Council of the forthcoming vacancy and the City Council shall make the necessary appointment prior to the expiration of the term. In the event the City Council does not make the necessary appointment prior to the expiration of the term, the existing citizen member with an expiring term shall continue to serve as an Investment Advisory Committee member until a successor is appointed by the City Council and assumes office.
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One City Council member appointed by the City Council - Serves a one-year term to be selected in December of each year. Membership on the Investment Advisory Committee will immediately cease if the appointee's status as a member of the City Council should conclude for any reason.
One Industry Specialist appointed by the City Treasurer - Serves during the term of his/her appointing City Treasurer and until a new City Treasurer makes his/her appointment of an Industry Specialist and that person assumes office. The Industry Specialist is not required to reside in San Clemente.
2.43.040 Meetings—Attendance.
The Investment Advisory Committee shall hold meetings quarterly (January, April, July and October) in accordance with the rules of procedure to be enacted and recorded in a book of official proceedings. The location, dates, time and organization of Investment Advisory Committee meetings shall be established by resolution of the Investment Advisory Committee. Any member of the Investment Advisory Committee, who was appointed to the Investment Advisory Committee by the City Council, who is absent from three consecutive regular meetings of the Investment Advisory Committee, without furnishing to the City Clerk a certificate of illness from a duly practicing physician, or without the authorization of the Investment Advisory Committee to be absent from three consecutive regular meetings for good cause, shall, as a result, surrender his or her office on the Investment Advisory Committee and the office shall be considered vacant. If the Industry Specialist member is absent from three consecutive regular meetings of the Investment Advisory Committee, without furnishing to the City Clerk a certificate of illness from a duly practicing physician, or without the authorization of the Investment Advisory Committee to be absent from three consecutive meetings for good cause, he/she may be removed from office at the discretion of the City Treasurer.
2.43.050 Filling of Vacancies—Removal of Members.
Any vacancy occurring in the office of a member of the Investment Advisory Committee shall be filled in the same manner as the original appointment, and a successor shall hold office for the unexpired portion of the term of his or her predecessor. Members of the Investment Advisory Committee who were appointed to the Investment Advisory Committee by the City Council shall serve at the pleasure of the City Council and may be removed from office with or without cause during his or her term in office by a majority vote of all members of the City Council. The Industry Specialist shall serve at the pleasure of the City Treasurer and may be removed from office with or without cause at the will of the City Treasurer.
2.43.060 Voting Power of Members.
The members of the Investment Advisory Committee shall each have one vote on any matter pending before the committee.
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2.43.070 Committee Subject to State Law, etc.
The Investment Advisory Committee shall be subject to the rules and regulations regarding the conduct of meetings under state and city law, and to the provisions of this Code and any other ordinance of the City.
2.43.080 Term Limits.
Investment Advisory Committee Members shall be subject to a term limit of two full 2-year terms. Committee Members who have served for two full 2-year terms must take at least a two-year hiatus from service on the Investment Advisory Committee before reapplying to serve as a Member on that Committee. During such hiatus, such person may serve on a different Commission or Committee. Investment Advisory Committee Members shall serve no more than a total of four full 2-year terms on the Committee (4 two-year terms). Appointments to fill of vacancy of a term for less than one year shall not count toward the limit. Commission and Committee members may serve on only one Commission or Committee at a time. The City Council may exercise its discretion to waive any of the foregoing limitations if there is a lack of applicants or for other cause. 468
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EXHIBIT E
Chapter 2.45 ARTS AND CULTURE COMMITTEE
2.45.010 Establishment of the Arts and Culture Committee; composition; appointment of members.
There is established an Arts and Culture Committee which shall consist of seven San Clemente citizens appointed by the City Council and shall be actively involved in the arts.
2.45.020 Function.
The Arts and Culture Committee's functions and duties are to:
A. Act in an advisory capacity to the City Council in all matters pertaining to the arts and cultural program including the feasibility of an amphitheater in San Clemente, developing and making recommendations on arts acquisition and proposals for art works for public buildings and public spaces; B. Recommend rules and regulations necessary for the administration, preservation, and perpetuation of fine arts, performing arts, and aesthetic aspects of the community and make recommendations with respect thereto to the City Council and the City Manager;
C. Elevate arts and cultural events and programming in San Clemente by providing direction and support for continued development and presentation of a variety of arts in the city; foster the inclusion of arts and cultural aspects in local events;
D. Evaluate and review arts and culture plans of the City; E. Develop an annual work plan with specific goals and objectives for the coming year. The work plan, with recommendations, shall be submitted to the City Council no later than October 1 of each year. The plan shall be submitted in written form for approval at a City Council meeting. Any amendments to the work plan shall require Council approval;
F. Limit meetings to three hours unless otherwise approved by a majority vote of the Commission plus the concurrence of the primary staff support to the Commission.
G. Perform such other duties as may be prescribed by the City Council.
2.45.030 Arts and Culture Committee—Term of office.
The terms of office of members of the Arts and Culture Committee shall be for two years from July 1st to June 30th of the second following year, and with such terms staggered so that three Committee members are appointed in even-numbered years and two Committee members are appointed in odd-numbered years. Annually, at the first meeting after the newly appointed Committee members assume office in July, the 469
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Committee shall select a chair and vice-chair from among its members. No less than 60 days prior to the expiration of terms, the City Clerk shall notify the City Council of the forthcoming vacancies and the City Council shall make the necessary appointments prior to the expiration of the terms. In the event the City Council does not make the necessary appointments prior to the expiration of the terms, existing members with expiring terms shall continue to serve as Arts and Culture Committee members until successors are appointed by the City Council and assume office.
2.45.040 Meetings—Attendance.
The Arts and Culture Committee shall hold meetings bi-monthly (every two months) in accordance with the rules of procedure to be enacted and recorded in a book of official proceedings. The location, dates, time and organization of Arts and Culture Committee meetings shall be established by resolution of the Arts and Culture Committee. Any member of the Arts and Culture Committee who is absent from two consecutive regular meetings of the Arts and Culture Committee, without furnishing to the City Clerk a certificate of illness from a duly practicing physician, or without the authorization of the Arts and Culture Committee to be absent from three consecutive regular meetings for good cause, shall, as a result, surrender his or her office on the Arts and Culture Committee and the office shall be considered vacant.
2.45.050 Filling of vacancies—Removal of members.
Any vacancy occurring in the office of a member of the Arts and Culture Committee shall be filled in the same manner as the original appointment, and a successor shall hold office for the unexpired portion of the term of his or her predecessor. Each member of the Arts and Culture Committee shall serve at the pleasure of the City Council and may be removed from office with or without cause during his or her term in office by a majority vote of all members of the City Council.
2.45.060 Voting power of members.
The members of the Arts and Culture Committee shall each have one vote on any matter pending before the commission.
2.45.070 Commission subject to state law, etc.
The Arts and Culture Committee shall be subject to the rules and regulations regarding the conduct of meetings under state and city law and to the provisions of this Code and any other ordinance of the City.
2.45.080 Term Limits.
Arts and Culture Committee Members shall be subject to a term limit of two full 2- year terms. Committee Members who have served for two full 2-year terms must take at least a two-year hiatus from service on the Arts and Culture Committee before reapplying to serve as a Member on that Committee. During such hiatus, such person may serve on a different Commission or Committee. Arts and Culture Committee Members shall serve no more than a total of four full 2-year terms on the Committee (4 two-year terms). 470
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Appointments to fill of vacancy of a term for less than one year shall not count toward the limit. Commission and Committee members may serve on only one Commission or Committee at a time. The City Council may exercise its discretion to waive any of the foregoing limitations if there is a lack of applicants or for other cause. 471
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EXHIBIT F
Chapter 2.46 COMMUNITY SAFETY WELFARE COMMITTEE
2.46.010 Establishment of the Community Safety and Welfare Committee; composition, appointment of members.
There is established a Community Safety and Welfare Committee which shall consist of ten members, seven appointed members and three non-voting members. The City Council shall prioritize the appointment of at least four voting members to be technical professionals with a public safety background (such as a retired police, fire, or marine chief, officer, lifeguard, etc.), if possible, and the remaining three voting-members to be appointed at large, to serve on the Community Safety and Welfare Committee.
The Committee shall also consist of one representative of the Orange County Sheriff’s Department (OCSD) to be appointed by San Clemente's Chief of Police Services, one representative of the Orange County Fire Authority (OCFA) to be appointed by San Clemente's Chief of Fire Services, and one representative from the City's Marine Safety Division to be appointed by the City Manager. The OCSD, OCFA, and the Marine Safety Division representatives shall serve as ex-officio, non-voting members. Members of the Community Safety and Welfare Committee need not be residents of San Clemente.
2.46.020 Function.
The Community Safety and Welfare Committee's functions and duties are to:
A. Act in an advisory capacity to the City Council in all matters pertaining to public safety, human needs, including homelessness, and public affairs as identified by the City Council;
B. Review performance measures of the City’s public safety personnel, consisting of Police Services, Fire Services, Ambulance Services, Marine Safety, and Park Rangers, and make recommendations to the City Council pursuant to direction provided by the City Council;
C. Develop an annual work plan with specific tasks, goals and objectives for the Committee to accomplish in the coming year. The work plan, with recommendations, shall be submitted to the City Council no later than October 1 of each year. The plan shall be submitted in written form for approval at a City Council meeting. Any amendments to the work plan shall require Council approval; D. Participate in the Social Services Grant Subcommittee by appointing one member of the Committee, by majority vote, no later than December 31 of each year; 472
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E. Act as a sounding board for public safety and human needs, including homelessness, within the community;
F. Assess the human affairs needs of the community periodically; G. Establish a priority list of identified human needs within the City and reassess periodically;
H. Limit meetings to three hours unless otherwise approved by a majority vote of the Committee plus the concurrence of the primary staff support to the Committee.
I. Perform such other duties as may be prescribed by the City Council.
2.46.030 Community Safety and Welfare Committee —Terms of Office.
The terms of office of the five members of the Community Safety and Welfare Committee who are appointed by the City Council shall be for two years from July 1 to June 30 of the second following year, and with such terms staggered so that three Committee members are appointed in even-numbered years and two Committee members are appointed in odd-numbered years. Annually, at the first meeting after the newly appointed Committee members assume office in July, the Committee shall select a chair and vice-chair from among its members. No less than 60 days prior to the expiration of terms, the City Clerk shall notify the City Council of the forthcoming vacancies and the City Council shall make the necessary appointments prior to the expiration of the terms. In the event the City Council does not make the necessary appointments prior to the expiration of the terms, existing members with expiring terms shall continue to serve as Community Safety and Welfare Committee members until successors are appointed by the City Council and assume office.
The OCSD representative to the Community Safety and Welfare Committee shall serve on the Committee indefinitely during his/her tenure with the OCSD at the will of the Chief of Police Services.
The OCFA representative to the Community Safety and Welfare Committee shall serve on the Committee indefinitely during his/her tenure with the OCFA at the will of the Chief of Fire Services.
The City's Marine Safety Division representative to the Community Safety and Welfare Committee shall serve on the Committee at the will of the City Manager.
2.46.040 Meetings—Attendance.
The Community Safety and Welfare Committee shall hold meetings bi-monthly in accordance with the rules of procedures to be enacted and recorded in a book of official proceedings. A Community Safety and Welfare Committee member who was appointed by the City Council who is absent from three consecutive meetings of the Community Safety and Welfare Committee, without furnishing to the City Clerk a certificate of illness 473
Ordinance No. 1790 Page 20
from a duly practicing physician, or without the authorization of the Community Safety and Welfare Committee to be absent from three (3) consecutive meetings for good cause, shall, as a result, surrender his or her office on the Community Safety and Welfare Committee and the office shall be considered vacant.
The OCSD, OCFA and Marine Safety Division representatives to the Community Safety and Welfare Committee may be removed from office at the discretion of the Chief of Police Services, Chief of Fire Services, or City Manager, respectively, if he/she is absent from three consecutive meetings, where their attendance is necessary, of the Community Safety and Welfare Committee, without furnishing to the City Clerk a certificate of illness from a duly practicing physician, or without the authorization of the Community Safety and Welfare Committee to be absent from three consecutive meetings, where their attendance is necessary, for good cause.
2.46.050 Filling of vacancies—Removal of members.
Any vacancy occurring in the office of a Community Safety and Welfare Committee member shall be filled in the same manner as the original appointment, and a successor shall hold office for the unexpired portion of the term of his or her predecessor. Each member of the Community Safety and Welfare Committee who is appointed by the City Council shall serve at the pleasure of the City Council and may be removed from office with or without cause by a majority vote of all members of the City Council. The OCSD representative shall serve at the pleasure of the Chief of Police Services and may be removed from office with or without cause at the will of the Chief of Police Services. The OCFA representative shall serve at the pleasure of the Chief of Fire Services and may be removed from office with or without cause at the will of the Chief of Fire Services. The City's Marine Safety Division representative to the Community Safety and Welfare Committee shall serve on the Committee at the will of the City Manager and may be removed from office with or without cause at the will of the City Manager.
2.46.060 Voting power of members.
The seven members of the Community Safety and Welfare Committee who are appointed by the City Council shall each have one vote on any matter pending before the Committee. The OCSD, OCFA, and Marine Safety Division representatives are nonvoting members.
2.46.070 Committee subject to state law, etc.
The Community Safety and Welfare Committee shall be subject to the rules and regulations regarding the conduct of meetings under state and city law and to the provisions of any ordinance of the City.
474
Ordinance No. 1790 Page 21
2.46.080 Term Limits.
Community Safety and Welfare Committee Members shall be subject to a term limit of two full 2-year terms. Committee Members who have served for two full 2-year terms must take at least a two-year hiatus from service on the Community Safety and Welfare Committee before reapplying to serve as a Member on that Committee. During such hiatus, such person may serve on a different Commission or Committee. Community Safety and Welfare Committee Members shall serve no more than a total of four full 2- year terms on the Committee (4 two-year terms). Appointments to fill of vacancy of a term for less than one year shall not count toward the limit. Commission and Committee members may serve on only one Commission or Committee at a time. The City Council may exercise its discretion to waive any of the foregoing limitations if there is a lack of applicants or for other cause.
475
910 Calle Negocio
2nd Floor
San Clemente, California
www.san-clemente.org
AGENDA REPORT
CITY OF SAN CLEMENTE
CITY COUNCIL MEETING
CITY OF SAN CLEMENTE 1
Meeting Date: May 6, 2025 Agenda Item: 9B.
Submitted By: Finance and Administrative Services
Prepared By: Brian Brower, Assistant City Manager
Subject:
..titl e
CONSIDERATION OF A RESOLUTION AUTHORIZING AND PROVIDING FOR THE ISSUANCE OF 2025 SPECIAL TAX REFUNDING BONDS OF COMMUNITY FACILITIES DISTRICT NO. 2006-1 (MARBLEHEAD COASTAL) OF THE CITY OF SAN CLEMENTE IF INTEREST RATES ALLOW FOR A 3% OR GREATER NET PRESENT VALUE SAVINGS, AND APPROVING THE
FORM OF A BOND INDENTURE, ESCROW AGREEMENT, BOND PURCHASE AGREEMENT,
PRELIMINARY OFFICIAL STATEMENT AND CONTINUING DISCLOSURE AGREEMENT, AND AUTHORIZING ..body OTHER ACTIONS IN CONNECTION THEREWITH Fiscal Impact:
The 2025 Special Tax Refunding Bonds (the “Bonds”) will have no financial impact on the City Budget, as all payments of principal and interest on the Bonds will be paid solely from the special tax revenues levied and collected from properties located in the affected community facilities district. The Bonds will currently refund the outstanding 2015 Special Tax Bonds (the “2015 Bonds”) to achieve interest cost savings, which will reduce the taxes being paid by the property owners in the community facilities district. It is estimated that the refunding will reduce annual debt service payments by approximately $398,000 per year, totaling approximately $1.54 million in net present value savings over the remaining term of the 2015 Bonds based on current market conditions, which are subject to change. All costs associated with issuing the Bonds are expected to be paid from the proceeds of the bond issuance.
Summary:
In 2015, the Community Facilities District No. 2006-1 (Marblehead Coastal) of the City of San Clemente (“CFD No. 2006-1”) issued its $55.49 million 2015 Special Tax Bonds, which were used to finance the acquisition and construction of certain public facilities and infrastructure improvements necessary to support the planned development of what is now known as the Sea Summit community. CFD No. 2006-1 is generally located along the northerly side of Avenida Pico, between West Avenida Vista Hermosa and North El Camino Real.
The City, working with its Municipal Advisor, Fieldman, Rolapp & Associates, Inc., has determined that, due to prevailing financial market conditions, that it is currently in the best interests of the City to refund the 2015 Bonds which will provide interest cost savings to property owners within CFD No. 2006-1. The 2015 Bonds have an outstanding balance of $50.67 million and mature in 2046. There will be no extension of the financing term. 476
Meeting Date: May 6, 2025 Agenda Item: 9B.
CITY OF SAN CLEMENTE 2
Background:
Due to current market conditions with lower interest rates, low historical delinquency rates within CFD 2006-1, and the 2015 Bonds being callable with no premium on September 1, 2025, the 298 property owners within CFD No. 2006-1 are expected to benefit from this refunding. The preliminary analysis indicates an estimated net present value savings of approximately 3.04% (after deducting the costs of issuing the Bonds), based on estimated market rates as of April 24, 2025. The net present value savings over the life of the issue is currently estimated at $1.54 million and the term is not to be extended.
The City Council should note that due to daily changes in interest rates, the actual level of savings cannot be determined until the proposed Bonds have been priced and sold. The pricing date is tentatively set for the week of May 27, 2025. The proposed Bonds will not be issued if interest rates rise to the point where a 3% net present value savings cannot be achieved. Based on current market conditions it is anticipated that the estimated savings will exceed this 3% net present value threshold contained in the City’s Debt Management Policy No. 204-6.
Upon closing of the bonds, which is anticipated to occur approximately two weeks after pricing of the bonds, each of the 298 affected property owners will be notified by letter with a summary of the reduction in Special Tax for their respective parcels.
On April 1, 2025, the City Council adopted Resolution 25-35 authorizing the commencement of proceedings for the proposed refunding as well as the selection of consultants required for implementation.
Resolution No. 25-48 would authorize staff to proceed with the refunding of the outstanding 2015 Bonds and issue the new Bonds. The attached resolution along with the required legal and financing documents listed below are required to issue the Bonds:
Bond Indenture – by and between CFD No. 2006-1 and The Bank of New York Mellon Trust Company, N.A. as trustee, establishing the terms and conditions pertaining to the issuance of the Bonds.
Escrow Agreement – by and between CFD No. 2006-1 and The Bank of New York Mellon Trust Company, N.A., as escrow agent, to provide for the defeasance and redemption of the 2015 Bonds.
Preliminary Official Statement – containing material information, including, but not limited to information about the Bonds, CFD No. 2006-1 and the sale of the Bonds by the underwriter, Stifel, Nicolaus & Company, Incorporated (the “Underwriter”). Also included in this document is the Continuing Disclosure Agreement by and between CFD No. 2006-1 and Koppel & Gruber Public Finance, acting as Dissemination Agent, to provide continuing disclosure of certain information specified therein pertaining to the Bonds and CFD No. 2006-1.
Bond Purchase Agreement – by and between CFD No. 2006-1 and the Underwriter, related to the sale of the Bonds.
477
Meeting Date: May 6, 2025 Agenda Item: 9B.
CITY OF SAN CLEMENTE 3
Council Options:
Approve Resolution 25-48.
Modify and adopt Resolution 25-48.
Continue the item and direct staff to make additional revisions. Deny the Resolution.
Environmental Review/Analysis:
Not a “project” under the California Environmental Quality Act.
Recommended Actions:
Staff Recommendation ..recommendation
It is recommended that the City Council adopt RESOLUTION 25-48 ENTITLED: A RESOLUTION
OF THE CITY COUNCIL OF THE CITY OF SAN CLEMENTE, ACTING AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 2006-1 (MARBLEHEAD COASTAL) OF THE CITY OF SAN CLEMENTE, AUTHORIZING THE ISSUANCE OF ITS 2025 SPECIAL TAX
REFUNDING BONDS AND APPROVING CERTAIN DOCUMENTS AND TAKING CERTAIN OTHER ACTIONS IN CONNECTION THEREWITH.
..end
Attachment:
1. Resolution 25-48
2. Bond Indenture
3. Escrow Agreement
4. Preliminary Official Statement
5. Bond Purchase Agreement
Notification:
Property owners in CFD No. 2006-1.
478
Attachment 1
RESOLUTION NO. 25-48
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN
CLEMENTE, ACTING AS THE LEGISLATIVE BODY OF
COMMUNITY FACILITIES DISTRICT NO. 2006-1
(MARBLEHEAD COASTAL) OF THE CITY OF SAN
CLEMENTE, AUTHORIZING THE ISSUANCE OF ITS 2025
SPECIAL TAX REFUNDING BONDS AND APPROVING
CERTAIN DOCUMENTS AND TAKING CERTAIN OTHER
ACTIONS IN CONNECTION THEREWITH
WHEREAS, the City Council (the “City Council” or the “legislative body of the District”) of the City of San Clemente (the “City”) has previously undertaken proceedings and declared the necessity to issue bonds on behalf of Community Facilities District No. 2006-1 (Marblehead Coastal) of the City of San Clemente (the “District”) pursuant to the terms and provisions of the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5, Part 1, Division 2, Title 5, of the Government Code of the State of California (the “Act”); and
WHEREAS, pursuant to proceedings taken and an election held on January 9, 2007 to authorize the issuance of bonds of the District, the levy of special taxes within the District and the establishment of an appropriations limit for the District, the District was authorized to issue bonds in one or more series, pursuant to the Act, in an aggregate principal amount not to exceed $60,000,000; and WHEREAS, the District has previously issued its 2015 Special Tax Bonds in the aggregate principal amount of $55,490,000, of which $50,670,000 is currently outstanding (the “2015 Bonds”), to finance certain public improvements serving the District; and
WHEREAS, in order to benefit taxpayers within the District by lowering the annual special taxes to be levied for debt service, the City Council, acting as the legislative body of the District, now desires to refund and defease the 2015 Bonds maturing on and after September 1, 2025 through the issuance of bonds in an aggregate principal amount not to exceed $50,000,000 designated as the “Community Facilities District No. 2006-1 (Marblehead Coastal) of the City of San Clemente 2025 Special Tax Refunding Bonds” (the “2025 Bonds”); and
WHEREAS, in order to effect the issuance of the 2025 Bonds, the City Council, acting as the legislative body of the District, desires to approve the forms of and authorize the execution and delivery of: (i) a Bond Indenture (the “Indenture”) with The Bank of New York Mellon Trust Company, N.A., as Trustee; (ii) an Escrow Agreement (2015 Bonds) (the “Escrow Agreement”) with The Bank of New York Mellon Trust Company, N.A., as escrow agent; (iii) a Preliminary Official Statement for the 2025 Bonds (the “Preliminary Official Statement”), which the Underwriter (as such term is defined herein) will use to market the 2025 Bonds; (iv) a Bond Purchase Agreement 479
Resolution No. 25-48 Page 2
(the “Bond Purchase Agreement”) with the Underwriter; and (v) a Continuing Disclosure Agreement of the District relating to the 2025 Bonds (the “Continuing Disclosure Agreement”), all in substantially the forms presented to the City Council on May 6, 2025, and to authorize such changes and additions thereto as the Authorized Officers (as such term is defined herein) deem necessary or desirable; and WHEREAS, the City Council, acting in its capacity as the legislative body of the District, finds that the issuance of the 2025 Bonds will achieve debt service savings and will benefit taxpayers within the District, and has determined that it is prudent in the management of the District’s fiscal affairs to issue the 2025 Bonds; and WHEREAS, the legislative body of the District has determined, in consultation with its municipal advisor, in accordance with Government Code Section 53360.4, that a negotiated sale of the 2025 Bonds to Stifel, Nicolaus & Company, Incorporated, as underwriter (the “Underwriter”) in accordance with the terms of the Bond Purchase Agreement approved as to form by the City Council herein will result in a lower overall cost to the District than a public sale, in that a negotiated sale will allow for the timing of the sale of the 2025 Bonds to be accomplished at a time of the District’s choosing; and WHEREAS, the aggregate assessed value of the real property in the District that is subject to the special tax to pay debt service on the 2025 Bonds is not less than three times the principal amount of the 2025 Bonds and the principal amount of all other bonds outstanding that are secured by a special tax levied pursuant to the Act or a special assessment levied on property within the District, which fact is required as a precondition to the issuance of the 2025 Bonds.
NOW, THEREFORE, the City Council of the City of San Clemente, acting as the legislative body of Community Facilities District No. 2006-1 (Marblehead Coastal) of the City of San Clemente, DOES HEREBY FIND, RESOLVE, DETERMINE AND ORDER as follows:
Section 1. Recitals True and Correct. Each of the above recitals is true and correct and is adopted by the City Council, acting in its capacity as the legislative body of the District.
Section 2. Findings. The City Council, acting in its capacity as the legislative body of the District: (i) finds that the issuance of the 2025 Bonds as described in the Preliminary Official Statement will provide significant public benefits by reducing the total amount of special taxes to be levied for debt service within the District; and (ii) finds and determines that the issuance and sale of the 2025 Bonds are consistent with the District’s financing policy with respect to community facilities district financings adopted pursuant to Government Code Section 53312.7 and currently in effect.
In satisfaction of the requirements contained in Government Code Section 53363.2, the City Council hereby determines that:
(a) it is anticipated that the purchase of the 2025 Bonds will occur on or about June 3, 2025 and that the refunding of the 2015 Bonds will occur on September 1, 480
Resolution No. 25-48 Page 3
2025, or as soon thereafter as practicable and permitted by the terms of the 2015 Bonds (subject to change at the discretion of any of the Authorized Officers); (b) the 2025 Bonds shall be dated their date of issuance, and be in the denominations, have the maturity dates (which do not exceed the latest maturity date of the 2015 Bonds being refunded), be payable at the place and be in the form specified in the Bond Purchase Agreement to be executed by the District in accordance with Section 6;
(c) the 2025 Bonds will bear interest at the minimum rate of 0.05% per annum;
(d) the 2015 Bonds shall be payable at the place specified in the Escrow Agreement to be executed by the District in accordance with Section 4; and (e) the designated cost of issuing the 2025 Bonds, as defined by Government Code Section 53363.8, shall include all of the costs specified in Government Code Section 53363.8(a), (b)(2) and (c).
Section 3. Authorization of Bonds; Approval of Indenture. If the District is able to realize at least 3% net present value savings by refunding the 2015 Bonds, the issuance of the 2025 Bonds in a principal amount not to exceed $50,000,000 is hereby authorized and approved pursuant to the Act. The 2025 Bonds shall mature on the dates and pay interest at the rates set forth in the Bond Purchase Agreement to be executed on behalf of the District and otherwise shall be substantially in the form set forth in the Indenture on file with the City Clerk of the City. All other provisions of the 2025 Bonds shall be governed by the terms and conditions set forth in the Indenture prepared by Bond Counsel to the District and executed by the Mayor, the City Manager, the City Treasurer and the Assistant City Manager, on behalf of the legislative body of the District, or the written designee thereof (each, an “Authorized Officer”). The Indenture is hereby approved substantially in the form on file with the City Clerk of the City and presented to the City Council on May 6, 2025. Each Authorized Officer is hereby authorized and directed to execute and deliver the Indenture with such changes, insertions and omissions as may be recommended by the City Attorney or Bond Counsel to the District and approved by the Authorized Officer executing the same, said execution being conclusive evidence of such approval. Capitalized terms that are used in this Resolution and not defined have the meaning ascribed to them in the form of the Indenture.
Section 4. Approval of Escrow Agreement. The Escrow Agreement is hereby approved substantially in the form on file with the City Clerk of the City and presented to the City Council on May 6, 2025. Each Authorized Officer is hereby authorized and directed to execute and deliver the Escrow Agreement with such changes, insertions and omissions as may be recommended by the City Attorney or Bond Counsel to the District and approved by the Authorized Officer executing the same, said execution being conclusive evidence of such approval.
481
Resolution No. 25-48 Page 4
Section 5. Approval of Preliminary Official Statement. The Preliminary Official Statement is hereby approved in substantially in the form on file with the City Clerk of the City and presented to the City Council on May 6, 2025, and the Authorized Officers are each hereby authorized and directed, for and in the name and on behalf of the District, to deliver such Preliminary Official Statement to the Underwriter to be used in connection with the offering and sale of the 2025 Bonds. The Authorized Officers are each hereby authorized and directed, for and in the name and on behalf of the District, to deem the Preliminary Official Statement “final” pursuant to Rule 15c2-12 of the Securities Exchange Act of 1934 prior to its distribution and to execute and deliver to the Underwriter a final Official Statement substantially in the form of the Preliminary Official Statement, with such changes therein, deletions therefrom and modifications thereto as the Authorized Officer executing the same shall approve (the “Official Statement”). The Underwriter is hereby authorized to distribute copies of the Preliminary Official Statement to persons who may be interested in the purchase of the 2025 Bonds and is directed to deliver copies of the Official Statement to the purchasers of the 2025 Bonds. Execution of the Official Statement shall conclusively evidence the District’s approval of the Official Statement.
Section 6. Approval of Bond Purchase Agreement. The Bond Purchase Agreement is hereby approved substantially in the form on file with the City Clerk of the City and presented to the City Council on May 6, 2025. Each Authorized Officer is hereby authorized and directed to execute and deliver the Bond Purchase Agreement with such changes, insertions and omissions as may be recommended by the City Attorney or Bond Counsel to the District and approved by the Authorized Officer executing the same, said execution being conclusive evidence of such approval; provided, however, that: (i) the principal amount of the 2025 Bonds shall not exceed $50,000,000; (ii) the net present value savings realized by refunding the 2015 Bonds shall not be less than 3%; and (iii) the Underwriter’s discount for the 2025 Bonds shall not exceed 0.75% of the principal amount thereof.
Section 7. Approval of Continuing Disclosure Agreement. The Continuing Disclosure Agreement is hereby approved substantially in the form on file with the City Clerk of the City and presented to the City Council on May 6, 2025. Each Authorized Officer is hereby authorized and directed to execute and deliver the Continuing Disclosure Agreement with such changes, insertions and omissions as may be recommended by the City Attorney or Bond Counsel to the District and approved by the Authorized Officer executing the same, said execution being conclusive evidence of such approval.
Section 8. Good Faith Estimates. The good faith estimates of costs related to the 2025 Bonds which are required by California Government Code Section 5852.1 are disclosed in Exhibit A hereto and are available to the public at the meeting at which this Resolution is approved.
Section 9. Findings related to Assessed Value. In accordance with the requirements of Government Code Section 53345.8, the City Council hereby determines that the aggregate assessed value of the real property in the District that is 482
Resolution No. 25-48 Page 5
subject to the special tax to pay debt service on the 2025 Bonds is not less than three times the principal amount of the 2025 Bonds and the principal amount of all other bonds outstanding that are secured by a special tax levied pursuant to the Act or a special assessment levied on property within the District. This determination is based on the assessed value of the real property within the District as set forth in the fiscal year 2024-25 County Assessor’s roll.
Section 10. Authorization relating to Bond Insurance. The City Council hereby authorizes the Authorized Officers: (i) to solicit bids on a municipal bond insurance policy and/or reserve surety policy for the 2025 Bonds; (ii) to negotiate the terms of such policy or policies; (iii) to finalize, if appropriate, the form of such policy or policies with a municipal bond insurer; and (iv) if it is determined that the policy or policies will result in net savings for the District, to pay the insurance premium of such policy or policies from the proceeds of the issuance and sale of the 2025 Bonds. The City Council hereby authorizes such changes to the Indenture as are necessary to reflect the purchase of municipal bond insurance and/or a reserve surety.
Section 11. Other Actions Authorized. All actions heretofore taken by officers and agents of the City and the District with respect to the sale and issuance of the 2025 Bonds are hereby approved, confirmed and ratified, and the Authorized Officers and the other officers of the City and the District who are responsible for the fiscal affairs of the District are hereby authorized and directed to take any actions and execute and deliver any and all documents as are necessary to accomplish the issuance, sale and delivery of the 2025 Bonds in accordance with the provisions of this Resolution, including but not limited to the solicitation and acceptance of bond insurance and/or a reserve surety policy for the 2025 Bonds, the preparation of escrow or redemption instructions with respect to the 2015 Bonds, the approval of the investment of the moneys deposited under the Escrow Agreement in federal securities, State and Local Government Series or other investments as permitted under the Escrow Agreement and the fiscal agent agreement pursuant to which the 2015 Bonds were issued, the retention of a bidding agent with respect to such escrow investments, the retention of a verification agent to verify the sufficiency of the escrow deposit and the fulfillment of all other purposes of the 2025 Bonds as described in the Indenture.
Section 12. Effective Date. This Resolution shall take effect immediately upon its adoption by the City Council, and the City Clerk of the City shall certify the vote adopting this Resolution.
ADOPTED, SIGNED AND APPROVED this 6th day of May, 2025.
Steve Knoblock,
Mayor of the City of San Clemente as the
legislative body of Community Facilities District
No. 2006-1 (Marblehead Coastal) of the City of
San Clemente
483
Resolution No. 25-48 Page 6
ATTEST:
Laura Campagnolo,
City Clerk of the City of San Clemente
as the legislative body of Community
Facilities District No. 2006-1
(Marblehead Coastal) of the City of San
Clemente
APPROVED AS TO FORM:
________________________________
Elizabeth A. Mitchell, City Attorney for
the
the City of San Clemente as the
legislative body of Community Facilities
District No. 2006-1 (Marblehead
Coastal) of the City of San Clemente
484
Resolution No. 25-48 Page 7
STATE OF CALIFORNIA )
CITY OF SAN CLEMENTE )
COUNTY OF ORANGE )
The undersigned, City Clerk of the City of San Clemente, do hereby certify that the foregoing Resolution No. 25-48 was duly adopted by the City Council of the City of San Clemente, acting as the legislative body of Community Facilities District No. 2006-1 (Marblehead Coastal) of the City of San Clemente, at a regular meeting held on the 6 day of May, 2025, and that it was so adopted by the following vote:
AYES: COUNCILMEMBERS:
NOES: COUNCILMEMBERS:
ABSENT: COUNCILMEMBERS:
ABSTAIN: COUNCILMEMBERS:
Laura Campagnolo,
City Clerk of the
City of San Clemente
I, Laura Campagnolo, City Clerk of the City of San Clemente, do hereby certify that the above and forgoing is a full, true, and correct copy of Resolution No. 25-48 of said City Council, and that the same has not been amended or repealed.
Laura Campagnolo,
City Clerk of the
City of San Clemente
485
Resolution No. 25-48 Page 8
EXHIBIT A
GOOD FAITH ESTIMATES
The good faith estimates set forth herein are provided with respect to the 2025 Bonds in accordance with California Government Code Section 5852.1.
Principal Amount. Based on the District’s financing plan and current market conditions, a good faith estimate of the principal amount of the 2025 Bonds is $44,550,000 (the “Estimated Principal Amount”).
True Interest Cost. Assuming that the 2025 Bonds are issued in the Estimated Principal Amount, and based on market interest rates prevailing at the time of preparation of such estimate, a good faith estimate of the true interest cost of the 2025 Bonds, which means the rate necessary to discount the amounts payable on the respective principal and interest payment dates to the purchase price received for the 2025 Bonds, is 4.54%.
Finance Charge. Assuming that the 2025 Bonds are issued in the Estimated Principal Amount, and based on market interest rates prevailing at the time of preparation of such estimate, a good faith estimate of the finance charge for the 2025 Bonds, which means the sum of all fees and charges paid to third parties (or costs associated with the 2025 Bonds), is $1,036,458.
Amount of Proceeds to be Received. Assuming that the 2025 Bonds are issued in the Estimated Principal Amount, and based on market interest rates prevailing at the time of preparation of such estimate, a good faith estimate of the amount of proceeds expected to be received by the District from the 2025 Bonds (including original issue premium), less the finance charge of the 2025 Bonds, as estimated above, and any reserves or capitalized interest paid or funded with proceeds of the 2025 Bonds, is $44,133,462.
Total Payment Amount. Assuming that the 2025 Bonds are issued in the Estimated Principal Amount, and based on market interest rates prevailing at the time of preparation of such estimate, a good faith estimate of the total payment amount, which means the sum total of all payments the District will make to pay debt service on the 2025 Bonds, plus the finance charge for the 2025 Bonds, as described above, not paid with the proceeds of the 2025 Bonds, calculated to the final maturity of the 2025 Bonds, is $75,669,250.
The foregoing estimates constitute good faith estimates only. The actual principal amount of the 2025 Bonds, the true interest cost thereof, the finance charges thereof, the amount of proceeds received therefrom and total payment amount with respect thereto may differ from such good faith estimates due to: (a) the actual date of the issuance of the 2025 Bonds being different than the date assumed for purposes of such estimates; (b) the actual principal amount of the 2025 Bonds being different from the Estimated Principal Amount; (c) the actual amortization of the 2025 Bonds being different than the amortization assumed for purposes of such estimates; (d) the actual market interest rates at the time of issuance of the 2025 Bonds being different than 486
Resolution No. 25-48 Page 9
4911-4953-5271v5/022806-0004
those estimated for purposes of such estimates; (e) other market conditions; or (f) alterations in the District’s financing plan, delays in the financing, additional legal work or a combination of such factors and additional finance charges, if any, attributable thereto. The actual issuance date and principal amount of the 2025 Bonds will be determined by the District based on the timing of the need for proceeds of the 2025 Bonds and other factors.
487
Stradling Yocca Carlson & Rauth Attachment 2
Draft of 4/25/25
4929-8074-1927v6/022806-0004
BOND INDENTURE
By and Between
COMMUNITY FACILITIES DISTRICT NO. 2006-1 (MARBLEHEAD COASTAL) OF THE
CITY OF SAN CLEMENTE
and
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,
as Trustee
Relating to
$______
COMMUNITY FACILITIES DISTRICT NO. 2006-1
(MARBLEHEAD COASTAL)
OF THE
CITY OF SAN CLEMENTE
2025 SPECIAL TAX REFUNDING BONDS
Dated as of June 1, 2025
488
Table of Contents
Page
i
4929-8074-1927v6/022806-0004
ARTICLE I
DEFINITIONS
Section 1.1. Unless the context otherwise requires, the following terms shall have the following meanings:...................................................................................................... 1
ARTICLE II
GENERAL AUTHORIZATION AND BOND TERMS
Section 2.1. Amount, Issuance, Purpose and Nature of Bonds and Parity Bonds..........................11 Section 2.2. Type and Nature of Bonds and Parity Bonds.............................................................. 12 Section 2.3. Equality of Bonds and Parity Bonds and Pledge of Net Taxes................................... 12 Section 2.4. Description of Bonds; Interest Rates .......................................................................... 13 Section 2.5. Place and Form of Payment ........................................................................................ 14 Section 2.6. Form of Bonds and Parity Bonds................................................................................ 15 Section 2.7. Execution and Authentication.....................................................................................15 Section 2.8. Bond Register.............................................................................................................. 15 Section 2.9. Registration of Exchange or Transfer......................................................................... 16 Section 2.10. Mutilated, Lost, Destroyed or Stolen Bonds or Parity Bonds..................................... 16 Section 2.11. Validity of Bonds and Parity Bonds ........................................................................... 17 Section 2.12. Book Entry System ..................................................................................................... 17 Section 2.13. Initial Depository and Nominee.................................................................................. 20
ARTICLE III
CREATION OF FUNDS AND APPLICATION OF PROCEEDS
Section 3.1. Creation of Funds; Application of Proceeds............................................................... 20 Section 3.2. Deposits to and Disbursements from Special Tax Fund .............................................21 Section 3.3. Administrative Expenses Account of the Special Tax Fund....................................... 22 Section 3.4. Interest Account and Principal Account of the Special Tax Fund .............................. 22 Section 3.5. Redemption Account of the Special Tax Fund ........................................................... 23 Section 3.6. Reserve Account of the Special Tax Fund.................................................................. 23 Section 3.7. Rebate Fund ................................................................................................................ 24 Section 3.8. Surplus Fund ............................................................................................................... 26 Section 3.9. Costs of Issuance Fund ............................................................................................... 27 Section 3.10. Construction Fund....................................................................................................... 27 Section 3.11. Investments................................................................................................................. 28
ARTICLE IV
REDEMPTION OF BONDS AND PARITY BONDS
Section 4.1. Redemption of Bonds ................................................................................................. 30 Section 4.2. Selection of Bonds and Parity Bonds for Redemption ............................................... 31 Section 4.3. Notice of Redemption................................................................................................. 31 Section 4.4. Partial Redemption of Bonds or Parity Bonds............................................................ 32 Section 4.5. Effect of Notice and Availability of Redemption Money........................................... 33 489
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ARTICLE V
COVENANTS AND WARRANTY
Section 5.1. Security ....................................................................................................................... 33 Section 5.2. Covenants....................................................................................................................33
ARTICLE VI
AMENDMENTS TO INDENTURE
Section 6.1. Supplemental Indentures or Orders Not Requiring Bondowner Consent...................37 Section 6.2. Supplemental Indentures or Orders Requiring Bondowner Consent..........................38 Section 6.3. Notation of Bonds or Parity Bonds; Delivery of Amended Bonds or Parity Bonds ..........................................................................................................................39
ARTICLE VII
TRUSTEE
Section 7.1. Trustee.........................................................................................................................39 Section 7.2. Removal of Trustee..................................................................................................... 40 Section 7.3. Resignation of Trustee ................................................................................................ 41 Section 7.4. Liability of Trustee ..................................................................................................... 41 Section 7.5. Merger or Consolidation............................................................................................. 44
ARTICLE VIII
EVENTS OF DEFAULT; REMEDIES
Section 8.1. Events of Default ........................................................................................................ 44 Section 8.2. Remedies of Owners................................................................................................... 45 Section 8.3. Application of Revenues and Other Funds After Default........................................... 45 Section 8.4. Power of Trustee to Control Proceedings................................................................... 46 Section 8.5. Appointment of Receivers ..........................................................................................46 Section 8.6. Non-Waiver................................................................................................................. 46 Section 8.7. Limitations on Rights and Remedies of Owners ........................................................ 47 Section 8.8. Termination of Proceedings........................................................................................ 47
ARTICLE IX
DEFEASANCE AND PARITY BONDS
Section 9.1. Defeasance .................................................................................................................. 48 Section 9.2. Conditions for the Issuance of Parity Bonds and Other Additional Indebtedness................................................................................................................ 49
ARTICLE X
MISCELLANEOUS
Section 10.1. Cancellation of Bonds and Parity Bonds .................................................................... 51 Section 10.2. Execution of Documents and Proof of Ownership .....................................................51 Section 10.3. Unclaimed Moneys..................................................................................................... 52 Section 10.4. Provisions Constitute Contract....................................................................................52 490
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Section 10.5. Future Contracts.......................................................................................................... 52 Section 10.6. Further Assurances...................................................................................................... 52 Section 10.7. Severability ................................................................................................................. 52 Section 10.8. Notices ........................................................................................................................ 53 Section 10.9. Execution in Several Counterparts.............................................................................. 53 Section 10.10. OFAC Compliance...................................................................................................... 53 EXHIBIT A FORM OF 2025 SPECIAL TAX REFUNDING BOND .........................................A-1 EXHIBIT B REQUISITION FOR DISBURSEMENT OF PROJECT COSTS ...........................B-1 491
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BOND INDENTURE
THIS BOND INDENTURE, dated as of June 1, 2025 (the “Indenture”), by and between COMMUNITY FACILITIES DISTRICT NO. 2006-1 (MARBLEHEAD COASTAL) OF THE CITY OF SAN CLEMENTE (the “District”) and THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as trustee (the “Trustee”), governs the terms of the Bonds and any Parity Bonds issued in accordance herewith from time to time.
RECITALS
A. The City Council of the City of San Clemente (the “legislative body of the District” or the “The City”), as the legislative body of the District, has previously undertaken proceedings and declared the necessity for the District to issue bonds pursuant to the terms and provisions of the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5, Part 1, Division 2, Title 5, of the Government Code of the State of California (the “Act”).
B. Based upon certain resolutions adopted by the legislative body of the District and an election held on January 9, 2007 authorizing the levy of a special tax and the issuance of bonds by the District, the District was authorized to issue bonds for one or more series, pursuant to the Act, in an aggregate principal amount not to exceed $60,000,000.
C. The District previously issued the $55,490,000 Community Facilities District No. 2006-1 (Marblehead Coastal) of the City of San Clemente 2015 Special Tax Bonds (the “2015 Bonds”) for the purpose of financing certain public facilities within the District.
D. The legislative body of the District has determined to redeem the outstanding 2015 Bonds through the issuance of its $_______ 2025 Special Tax Refunding Bonds (the “Bonds”).
E. The District has determined that all requirements of the Act for the issuance of the Bonds have been satisfied.
In order to establish the terms and conditions upon and subject to which the Bonds are to be issued, and in consideration of the promises and the mutual covenants contained herein and the purchase and acceptance of the Bonds by the Owners thereof, and for other valuable consideration, the receipt of which is hereby acknowledged, the District does hereby covenant and agree, for the benefit of the Owners of the Bonds and any Parity Bonds (as such term is defined herein) which may be issued hereunder from time to time, as follows:
ARTICLE I
DEFINITIONS
Section 1.1. Unless the context otherwise requires, the following terms shall have the following meanings:
“Account” means any account created pursuant to this Indenture. “Act” means the Mello-Roos Community Facilities Act of 1982, as amended, being Sections 53311 et seq. of the California Government Code.
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“Administrative Expenses” means the administrative costs with respect to the calculation and collection of the Special Taxes, including all attorneys’ fees and other costs related thereto, the fees and expenses of the Trustee, any fees and related costs for credit enhancement for the Bonds or any Parity Bonds which are not otherwise paid as Costs of Issuance, any costs related to the District’s compliance with state and federal laws requiring continuing disclosure of information concerning the Bonds and the District, and any other costs otherwise incurred by the City staff on behalf of the District in order to carry out the purposes of the District as set forth in the Resolution of Formation and any obligation of the District hereunder.
“Administrative Expenses Account” means the account by that name created and established in the Special Tax Fund pursuant to Section 3.1. “Administrative Expenses Cap” means an amount equal to $36,000 for the first Bond Year, increasing by 2% per annum for each subsequent Bond Year, or such lesser amount as may be designated in written instructions from an Authorized Representative of the City. “Alternative Penalty Account” means the account by that name created and established in the Rebate Fund pursuant to Section 3.1.
“Annual Debt Service” means the principal amount of any Outstanding Bonds or Parity Bonds payable in a Bond Year either at maturity or pursuant to a Sinking Fund Payment and any interest payable on any Outstanding Bonds or Parity Bonds in such Bond Year, if the Bonds and any Parity Bonds are retired as scheduled.
“Authorized Representative of the City” means the Mayor, the City Manager, the City Treasurer, the Assistant City Manager and the Financial Services Officer of the City or any other officer or employee of the City authorized by the City Council or by an Authorized Officer to undertake the action referenced in this Agreement as required to be undertaken by an Authorized Officer, acting on behalf of the District.
“Bond Insurer” means ___________, or any successor thereto. “Bond Counsel” means an attorney at law or a firm of attorneys selected by the District of nationally recognized standing in matters pertaining to the tax-exempt nature of interest on bonds issued by states and their political subdivisions duly admitted to the practice of law before the highest court of any state of the United States of America or the District of Columbia. “Bond Register” means the books which the Trustee shall keep or cause to be kept on which the registration and transfer of the Bonds and any Parity Bonds shall be recorded. “Bondowner” or “Owner” means the person or persons in whose name or names any Bond or Parity Bond is registered on the Bond Register.
“Bonds” means the Community Facilities District No. 2006-1 (Marblehead Coastal) of the City of San Clemente 2025 Special Tax Refunding Bonds issued under this Indenture. “Bond Year” means the twelve month period commencing on September 2 of each year and ending on September 1 of the following year, except that the first Bond Year for the Bonds or an issue of Parity Bonds shall begin on the Delivery Date and end on the first September 1 which is not more than 12 months after the Delivery Date.
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“Business Day” means a day which is not a Saturday or Sunday or a day of the year on which banks or trust companies in New York, New York, Los Angeles, California, or the city where the corporate trust office of the Trustee is located is required or authorized by law, regulation or executive order to close or to remain closed, or a day on which the New York Stock Exchange or the payment system of the Federal Reserve System is not operational. “Certificate of an Authorized Representative” means a written certificate executed by an Authorized Representative of the City.
“City” means the City of San Clemente, County of Orange, California. “City Council” means the City Council of the City.
“Claim” means any claim or enforcement proceeding in connection with an Insolvency Proceeding.
“Code” means the Internal Revenue Code of 1986, as amended, and any Regulations, rulings, judicial decisions, and notices, announcements, and other releases of the United States Treasury Department or Internal Revenue Service interpreting and construing it. “Continuing Disclosure Agreement” means the Continuing Disclosure Agreement, dated as of the date of this Indenture, by and between the District and the Dissemination Agent named therein, as amended.
“Construction Fund” means the fund by that name established pursuant to Section 3.1. “Costs of Issuance” means the costs and expenses incurred in connection with the issuance and sale of the Bonds or any Parity Bonds, including the acceptance and initial annual fees and expenses of the Trustee, legal fees and expenses, costs of printing the Bonds and Parity Bonds and the preliminary and final official statements for the Bonds and Parity Bonds, fees of financial consultants and all other related fees and expenses, as set forth in a Certificate of an Authorized Representative of the City.
“Costs of Issuance Fund” means the fund by that name established pursuant to Section 3.1. “Delivery Date” means, with respect to the Bonds and each issue of Parity Bonds, the date on which the bonds of such issue were issued and delivered to the initial purchasers thereof. “Depository” means The Depository Trust Company, New York, New York, and its successors and assigns as securities depository for the Bonds, or any other securities depository acting as Depository under Article II.
“District” means Community Facilities District No. 2006-1 (Marblehead Coastal) of the City of San Clemente established pursuant to the Act and the Resolution of Formation. “Escrow Agent” means The Bank of New York Mellon Trust Company, N.A., as escrow agent under the Escrow Agreement.
“Escrow Agreement” means the Escrow Agreement (2015 Bonds), dated as of the date of this Indenture, by and between the Escrow Agent and the District. 494
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“Escrow Fund” means the fund by that name established under the Escrow Agreement. “Event of Default” means an event described in Section 8.1. “Federal Securities” means any of the following, which shall in all circumstances be noncallable: (a) Treasuries; and (b) evidence of ownership of proportionate interests in future interest and principal payments on Treasuries held by a bank or trust company as custodian, under which the owner of the investment is the real party in interest and has the right to proceed directly and individually against the obligor and the underlying Treasuries are not available to any person claiming through the custodian or to whom the custodian may be obligated. “Fiscal Year” means the period beginning on July 1 of each year and ending on June 30 of the following year.
“Governmental Authority” means any governmental or quasi-governmental entity, including any court, department, commission, board, bureau, agency, administration, central bank, service, district or other instrumentality of any governmental entity or other entity exercising executive, legislative, judicial, taxing, regulatory, fiscal, monetary or administrative powers or functions of or pertaining to government, or any arbitrator, mediator or other person with authority to bind a party at law.
“Independent Financial Consultant” means a financial consultant or firm of such consultants generally recognized to be well qualified in the financial consulting field, appointed and paid by the District, who, or each of whom: (a) is in fact independent and not under the domination of the District; (b) does not have any substantial interest, direct or indirect, in the District; and (c) is not connected with the District as a member, officer or employee of the District, but who may be regularly retained to make annual or other reports to the District. “Indenture” means this Bond Indenture, together with any Supplemental Indenture approved pursuant to Article 6.
“Insured Bonds” means the Bonds maturing on September 1, 20__ through 20__, inclusive, September 1, 20__ and September 1, 20__.
“Interest Account” means the account by that name created and established in the Special Tax Fund pursuant to Section 3.1.
“Interest Payment Date” means _____ 1, 20__ and each March 1 and September 1 thereafter; provided, however, that, if any such day is not a Business Day, interest up to the Interest Payment Date will be paid on the following Business Day. “Maximum Annual Debt Service” means the maximum sum obtained for any Bond Year prior to the final maturity of the Bonds and any Parity Bonds by adding the following for each Bond Year: (a) the principal amount of all Outstanding Bonds and Parity Bonds payable in such Bond Year either at maturity or pursuant to a Sinking Fund Payment; and (b) the interest payable on the aggregate principal amount of all Bonds and Parity Bonds Outstanding in such Bond Year if the Bonds and Parity Bonds are retired as scheduled.
“Moody’s” means Moody’s Investors Service, Inc., and its successors and assigns. 495
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“Net Taxes” means Special Taxes less amounts set aside to pay Administrative Expenses not to exceed the Administrative Expenses Cap.
“Nominee” means the nominee of the Depository, which may be the Depository, as determined from time to time pursuant to Article II.
“Ordinance” means Ordinance No. 1327 adopted by the legislative body of the District on January 23, 2007, providing for the levying of the Special Tax. “Outstanding” or “Outstanding Bonds and Parity Bonds” means all Bonds and Parity Bonds theretofore issued by the District, except: (a) Bonds and Parity Bonds cancelled or surrendered for cancellation in accordance with Section 10.1; (b) Bonds and Parity Bonds for the payment or redemption of which moneys shall have been deposited in trust (whether upon or prior to the maturity or the redemption date of such Bonds or Parity Bonds), provided that, if such Bonds or Parity Bonds are to be redeemed prior to the maturity thereof, notice of such redemption shall have been given as provided in this Indenture or any applicable Supplemental Indenture for Parity Bonds; and (c) Bonds and Parity Bonds that have been surrendered to the Trustee for transfer or exchange pursuant to Section 2.9 or for which a replacement has been issued pursuant to Section 2.10. “Parity Bonds” means all bonds, notes or other similar evidences of indebtedness hereafter issued, payable out of the Net Taxes and which, as provided in this Indenture or any Supplemental Indenture, rank on a parity with the Bonds.
“Participants” means those broker-dealers, banks and other financial institutions from time to time for which the Depository holds Bonds or Parity Bonds as securities depository. “Permitted Investments” means:
(a) Federal Securities;
(b) Bonds, debentures, notes or other evidence issued or guaranteed by any of the following federal agencies and provided that such obligations are backed by the full faith and credit of the United States of America (stripped securities are only permitted if they have been stripped by the agency itself): (i) U.S. Export-Import Bank (Direct obligations or fully guaranteed certificates of beneficial ownership); (ii) Farmers Home Administration (Certificates of beneficial ownership); (iii) Federal Financing Bank; (iv) Federal Housing Administration Debentures; (v) General Services Administration Participation certificates; (vi) Government National Mortgage Association (guaranteed mortgage-backed bonds or guaranteed pass-through obligations); (vii) U.S. Maritime Administration (Guaranteed Title XI financing); and (viii) U.S. Department of Housing and Urban Development (Project Notes, Local Authority Bonds, New Communities Debentures – United States government guaranteed debentures and U.S. Public Housing Notes and Bonds – United States government guaranteed public housing notes and bonds);
(c) Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the following non-full faith and credit United States government agencies (stripped securities are only permitted if they have been stripped by the agency itself): (i) Federal Home Loan Bank System (Senior debt obligations); (ii) Federal Home Loan Mortgage Corporation (Participation Certificates and Senior debt obligations); (iii) Federal National Mortgage Association (Mortgage-backed securities and senior debt obligations); (iv) Student Loan Marketing Association 496
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(Senior debt obligations); (v) Resolution Funding Corporation obligations; and (vi) Farm Credit System (Consolidated systemwide bonds and notes);
(d) Money market mutual funds that constitute “Government Funds” under Rule 2a-7 promulgated by the Securities and Exchange Commission and that are registered under the Federal Investment Company Act of 1940 the shares of which are registered under the Federal Securities Act of 1933, and having a rating in the highest investment category granted thereby from Standard & Poor’s or Moody’s, with a minimum of $500 million in assets under management, including funds for which the Trustee or its affiliates receive and retain a fee for services provided to the fund, whether as a custodian, transfer agent, investment advisor or otherwise; (e) Certificates of deposit (including those placed by a third party pursuant to a separate agreement between the District and the Trustee) secured at all times by collateral described in clauses (a) and/or (b) above. Such certificates must be issued by commercial banks, savings and loan associations or mutual savings banks of which the short-term obligations are rated A-1 or better and P1 or better by Moody’s or Standard & Poor’s, respectively, which may include the Trustee and its affiliates. The collateral must be held by a third party and the Trustee on behalf of the Owners of the Bonds must have a perfected first security interest in the collateral; (f) Certificates of deposit (including those placed by a third party pursuant to a separate agreement between the District and the Trustee), demand deposits, savings accounts, deposit accounts, time deposits, other deposit products, trust funds, trust accounts, interest bearing deposits, overnight bank deposits, interest-bearing money market accounts, bankers acceptances or money market deposits which are insured by Federal Deposit Insurance Corporation, including BIF and SAIF, or;
(g) Investment agreements with domestic or foreign banks, insurance companies other than a life or property casualty insurance company, or corporations the long-term debt or claims paying ability of which or, in the case of a guaranteed corporation, the long-term debt of the guarantor, or, in the case of a monoline financial guaranty insurance company, claims paying ability or financial strength, of the guarantor is rated in at least the AA category by Standard & Poor’s and Moody’s; provided that, by the terms of the investment agreement:
(i) interest payments are to be made to the Trustee at times and in amounts as necessary to pay debt service on the Bonds (if the funds invested pursuant to the investment agreement are from the Reserve Account);
(ii) the invested funds are available for withdrawal without penalty or premium, upon not more than seven (7) days’ prior notice; (iii) the investment agreement shall provide that it is the unconditional and general obligation of, and is not subordinated to any other obligation of, the provider thereof; (iv) the District and the Trustee receive the opinion of domestic counsel (which opinion shall be addressed to the District) that such investment agreement is legal, valid, binding and enforceable upon the provider in accordance with its terms and of foreign counsel (if applicable) in form and substance acceptable, and addressed to, the District; 497
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(v) the investment agreement shall provide that if during its term: (1) the provider’s rating by either Standard & Poor’s or Moody’s falls below AA- or Aa3, respectively, the provider shall, at its option, within ten (10) Business Days after the provider’s receipt of a written request from the Trustee to satisfy the foregoing, either: (I) collateralize the investment agreement by delivering or transferring in accordance with the applicable state and federal laws (other than by means of entries on the provider’s books) to the District, the Trustee or a third party acting solely as agent therefor (the “Holder of the Collateral”) collateral free and clear of any third-party liens or claims, the market value of which collateral is maintained at one hundred five percent (105%) of securities identified in clauses (a) and (b) of this definition; or (II) assign the investment agreement and all of its obligations thereunder to, or enter into a repurchase agreement or such other agreement with, a financial institution that is mutually acceptable to the provider and the District which is rated either in the first or second highest category by Standard & Poor’s and Moody’s; and (2) the provider’s rating by either Standard & Poor’s or Moody’s is withdrawn or suspended or falls below A- or A3, respectively, the provider must, at the direction of the District or the Trustee, within ten (10) days of receipt of such direction, repay the principal of and accrued but unpaid interest on the invested funds, in either case with no penalty or premium to the District or the Trustee; (vi) the investment agreement shall provide and an opinion of counsel shall be rendered, in the event that collateral is required to be pledged by the provider under the terms of the investment agreement at the time such collateral is delivered, that the Holder of the Collateral has a perfected first priority security interest in the collateral, any substituted collateral and all proceeds thereof (in the case of bearer securities, this shall mean that the Holder of the Collateral is in possession of such collateral); and
(vii) the investment agreement shall provide that if during its term: (1) the provider shall default in its payment obligations, the provider’s obligations under the investment agreement shall, at the direction of the District or the Trustee, be accelerated and amounts invested and accrued but unpaid interest thereon shall be paid to the District or the Trustee, as appropriate; and (2) the provider shall become insolvent, not pay its debts as they become due, be declared or petition to be declared bankrupt, etc., the provider’s obligations shall automatically be accelerated and amounts invested and accrued but unpaid interest thereon shall be paid to the District or the Trustee, as appropriate;
(h) Commercial paper rated, at the time of purchase, Prime - 1 by Moody’s and A-1 or better by Standard & Poor’s having original maturity of not more than 180 days issued by a domestic corporation having assets in excess of $500 million; (i) Bonds or notes issued by any state or municipality which are rated by Moody’s or Standard & Poor’s in one of the two highest rating categories assigned by them; (j) Federal funds or bankers acceptances with a maximum term of 270 days of any bank which has an unsecured, uninsured and unguaranteed obligation rating of Prime - 1 or A3 or better by Moody’s and A-1 or better by Standard & Poor’s; (k) Repurchase agreements that satisfy the following criteria:
(i) Repurchase agreements must be between the District or the Trustee and a dealer bank or securities firm which is: (1) A primary dealer on the Federal Reserve reporting dealer list which is rated A or better by two of the following Standard & Poor’s, Moody’s, or Fitch 498
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Ratings; or (2) A domestic bank or a domestic branch of a foreign bank rated A or above by two of the following: Standard & Poor’s, Moody’s or Fitch Ratings; or (3) Corporations the long-term debt or claims paying ability of which, or in the case of a guaranteed corporation, the long-term debt of the guarantor, or, in the case of a monoline financial guaranty insurance company, claims paying ability or financial strength, is rated in at least the double A category by Standard & Poor’s and Moody’s; and
(ii) The written agreement must include the following: (1) Securities which are acceptable for transfer are: (I) direct obligations of the United States government; or (II) obligations of federal agencies backed by the full faith and credit of the United States of America (or the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation; (2) The collateral must be delivered to the Trustee (if the Trustee is not supplying the collateral) or a third party acting as agent for the Trustee (if the Trustee is supplying the collateral) before or simultaneous with payment (perfection by possession of certificated securities); and (3) (I) The securities must be valued weekly, marked-to-market at current market price plus accrued interest; (II) The value of the collateral must be at least equal to one hundred five percent (105%) of the amount of money transferred by the Trustee to the dealer, bank or security firm under the agreement plus accrued interest. If the value of the securities held as collateral is reduced below one hundred five percent (105%) of the value of the amount of money transferred by the Trustee, then additional acceptable securities and/or cash must be provided as collateral to bring the value of the collateral to one hundred five percent (105%); provided, however, that if the securities used as collateral are those of the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation, then the value of the collateral must be at least equal to one hundred five percent (105%) of the amount of money transferred by the Trustee; and (III) A legal opinion must be delivered to the District and the Trustee that the repurchase agreement meets the requirements of California law with respect to the investment of public funds; and (IV) Should the provider’s rating by either Standard & Poor’s or Moody’s be withdrawn or suspended or fall below A- or A3, respectively, the provider must, at the direction of the District or the Trustee (acting at the direction of the District), within ten (10) days of receipt of such direction, repay the principal of and accrued but unpaid interest on the invested funds, in either case with no penalty or premium to the District or the Trustee; (l) the Local Agency Investment Fund in the State Treasury of the State of California as permitted by the State Treasurer pursuant to Section 16429.1 of the California Government Code;
(m) forward delivery agreements or forward purchase and sale agreements with a domestic or foreign bank or corporation the long-term debt or claims paying ability of which, or in the case of a guaranteed corporation, the long-term debt of the guarantor, or, in the case of a monoline financial guaranty insurance company, claims paying ability or financial strength, of the guarantor is rated at least in the A category by Standard & Poor’s and Moody’s; provided that, by the terms of the agreement; the underlying investment property consists of those investments which are listed in (a), (b), (c) and (h) above; and
(n) the City’s pooled investment fund invested pursuant to the City’s investment policy.
“Person” means natural persons, firms, corporations, partnerships, associations, trusts, public bodies and other entities.
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“Policy” mean the Municipal Bond Insurance Policy No. _______ issued by the Bond Insurer that guarantees the scheduled payment of principal of and interest on the Insured Bonds when due. “Prepayments” means any amounts paid by the District to the Trustee and designated by the District as a prepayment of Special Taxes for one or more parcels in the District made in accordance with the Rate and Method.
“Principal Account” means the account by that name created and established in the Special Tax Fund pursuant to Section 3.1.
“Principal Office of the Trustee” means the office of the Trustee located in Los Angeles, California (currently 333 South Hope Street, Suite 2525, Los Angeles, CA 90071, Attention:
Corporate Trust Department), or such other office or offices as the Trustee may designate from time to time, or the office of any successor Trustee where it principally conducts its business of serving as trustee under indentures pursuant to which municipal or governmental obligations are issued; provided, however, that for purposes of the surrender or presentation of Bonds for payment, transfer or exchange, the Principal Office of the Trustee shall be the designated corporate trust operations or agency office of the Trustee.
“Project” means those public facilities described in the Resolution of Formation which were acquired or constructed within and outside of the District with the proceeds of the 2015 Bonds, including all engineering, planning and design services and other incidental expenses related to such facilities and other facilities, if any, authorized by the qualified electors within the District from time to time.
“Project Costs” means the amounts necessary to finance the Project, to create and replenish any necessary reserve funds, to pay the initial and annual costs associated with the Bonds or any Parity Bonds, including, but not limited to, remarketing, credit enhancement, Trustee and other fees and expenses relating to the issuance of the Bonds or any Parity Bonds, and to pay any other “incidental expenses” of the District, as such term is defined in the Act. “Rate and Method” means the document by such name attached to the Resolution of Formation, as amended and restated by Resolution No. 14-25, dated July 1, 2014, and recorded on November 25, 2014 as Document No. 2014000507415.
“Rating Agency” means Moody’s and Standard & Poor’s, or both, as the context requires. “Rebate Account” means the account by that name created and established in the Rebate Fund pursuant to Section 3.1.
“Rebate Fund” means the fund by that name established pursuant to Section 3.1 in which there are established the Accounts described in Section 3.1. “Rebate Regulations” means any final, temporary or proposed Regulations promulgated under Section 148(f) of the Code.
“Record Date” means the fifteenth day of the month preceding an Interest Payment Date, regardless of whether such day is a Business Day.
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“Redemption Account” means the account by that name created and established in the Special Tax Fund pursuant to Section 3.1.
“Regulations” means the regulations adopted or proposed by the Department of Treasury from time to time with respect to obligations issued pursuant to Section 103 of the Code. “Representation Letter” means the Blanket Representation Letter from the District to the Depository as described in Article II.
“Reserve Account” means the account by that name created and established in the Special Tax Fund pursuant to Section 3.1.
“Reserve Policy” means Municipal Bond Debt Service Reserve Insurance Policy No. ______ issued by the Bond Insurer for deposit into the Reserve Account. “Reserve Requirement” means, as of the date of calculation, an amount equal to the least of:
(a) Maximum Annual Debt Service; (b) 125% of average Annual Debt Service on the then-Outstanding Bonds and any Parity Bonds; or (c) ten percent (10%) of the initial outstanding principal amount of the Bonds and any Parity Bonds; provided that the Reserve Requirement shall never exceed the amount established pursuant to the foregoing calculation at the time of issuance of the Bonds.
“Resolution of Formation” means Resolution No. 07-03 adopted by the City Council of the City on January 9, 2007, pursuant to which the City formed the District. “Responsible Officer,” means, when used with respect to the Trustee, any managing director, president, vice president, senior associate, associate or other officer of the Trustee within the Principal Office of the Trustee (or any successor corporate trust office) customarily performing functions similar to those performed by the persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred at the corporate trust office specified in Section 10.8 because of such person’s knowledge of and familiarity with the particular subject and having direct responsibility for the administration of this Indenture. “Sinking Fund Payment” means the annual payment to be deposited in the Redemption Account to redeem a portion of the Term Bonds in accordance with the schedules set forth in Section 4.1(b) and any annual sinking fund payment schedule to retire any Parity Bonds that are designated as Term Bonds.
“Six-Month Period” means the period of time beginning on the Delivery Date of each issue of Bonds or Parity Bonds, as applicable, and ending six consecutive months thereafter, and each six-month period thereafter until the latest maturity date of the Bonds and the Parity Bonds (and any obligations that refund an issue of the Bonds or Parity Bonds). “Special Tax Fund” means the fund by that name created and established pursuant to Section 3.1.
“Special Taxes” means the taxes authorized to be levied by the District on property within the District in accordance with the Ordinance, the Resolution of Formation, the Act and the voter approval obtained at the January 9, 2007 election in the District, and the amended and restated rate of method of apportionment approved at the July 1, 2014 special election in the District, including any 501
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scheduled payments and any Prepayments thereof, and the net proceeds of the redemption or sale of property sold as a result of foreclosure of the lien of the Special Taxes to the amount of said lien and penalties and interest thereon.
“Standard & Poor’s” means S&P Global Ratings, a Standard & Poor’s Financial Services LLC business, and its successors and assigns.
“Supplemental Indenture” means any supplemental indenture amending or supplementing this Indenture.
“Surplus Fund” means the fund by that name created and established pursuant to Section 3.1.
“Tax Certificate” means the certificate by that name to be executed by the District on a Delivery Date to establish certain facts and expectations and which contains certain covenants relevant to compliance with the Code.
“Tax-Exempt” means, with reference to a Permitted Investment, a Permitted Investment the interest earnings on which are excludable from gross income for federal income tax purposes pursuant to Section 103(a) of the Code, other than one described in Section 57(a)(5)(C) of the Code. “Term Bonds” means the Bonds maturing on September 1, 20___, and any term maturities of an issue of Parity Bonds as specified in a Supplemental Indenture. “Treasuries” means non-callable direct obligations of the United States of America, including United States Treasury Notes, Certificates and Bonds and State and Local Government Series.
“Trustee” means The Bank of New York Mellon Trust Company, N.A., a national banking association duly organized and existing under and by virtue of the laws of the United States, having a principal corporate trust office in Los Angeles, California, and its successors or assigns, or any other bank, national banking association or trust company which may at any time be substituted in its place as provided in Sections 7.2 or 7.3 and any successor thereto. “2015 Bonds” means the Community Facilities District No. 2006-1 (Marblehead Coastal) of the City of San Clemente 2015 Special Tax Bonds issued on December 3, 2015 in the original aggregate principal amount of $55,490,000.
“Underwriter” means Stifel, Nicolaus & Company, Incorporated, as the underwriter of the Bonds.
ARTICLE II
GENERAL AUTHORIZATION AND BOND TERMS
Section 2.1. Amount, Issuance, Purpose and Nature of Bonds and Parity Bonds.
Under and pursuant to the Act, the Bonds in the aggregate principal amount of $______ shall be issued for the purpose of refunding the 2015 Bonds, funding a reserve fund for the Bonds and paying Costs of Issuance. The Bonds and any Parity Bonds shall be and are limited obligations of the District and shall be payable as to the principal thereof and interest thereon and any premiums upon 502
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the redemption thereof solely from the Net Taxes and the other amounts in the Special Tax Fund (other than amounts in the Administrative Expenses Account of the Special Tax Fund). The aggregate principal amount of the Bonds and any Parity Bonds shall not exceed the total indebtedness presently authorized or subsequently authorized by the qualified electors of the District in accordance with the Act.
Section 2.2. Type and Nature of Bonds and Parity Bonds. Neither the faith and credit nor the taxing power of the City, the State of California or any political subdivision thereof is pledged to the payment of the Bonds or any Parity Bonds. Except for the Net Taxes, no other taxes are pledged to the payment of the Bonds or any Parity Bonds. The Bonds and any Parity Bonds are neither general or special obligations of the City nor general obligations of the District, but are limited obligations of the District payable solely from certain amounts deposited by the District in the Special Tax Fund (exclusive of the Administrative Expenses Account), as more fully described herein. The District’s limited obligation to pay the principal of, premium, if any, and interest on the Bonds and any Parity Bonds from amounts in the Special Tax Fund (exclusive of the Administrative Expenses Account) is absolute and unconditional, free of deductions and without any abatement, offset, recoupment, diminution or set-off whatsoever. No Owner of the Bonds or any Parity Bonds may compel the exercise of the taxing power by the District (except as pertains to the Special Taxes) or the City or the forfeiture of any of their property. The principal of and interest on the Bonds and any Parity Bonds and premiums upon the redemption thereof, if any, are not a debt of the City, the State of California or any of its political subdivisions within the meaning of any constitutional or statutory limitation or restriction. The Bonds and any Parity Bonds are not a legal or equitable pledge, charge, lien or encumbrance upon any of the District’s property, or upon any of its income, receipts or revenues except the Net Taxes and other amounts in the Special Tax Fund (exclusive of the Administrative Expenses Account) which are, under the terms of this Indenture and the Act, set aside for the payment of the Bonds, any Parity Bonds and interest thereon. Neither the members of the City Council of the City nor any persons executing the Bonds or any Parity Bonds are liable personally on the Bonds or any Parity Bonds by reason of their issuance.
Notwithstanding anything to the contrary contained in this Indenture, the District shall not be required to advance any money derived from any source of income other than the Net Taxes for the payment of the interest on or the principal of the Bonds and any Parity Bonds, or for the performance of any covenants contained herein. The District may, however, advance funds for any such purpose, provided that such funds are derived from a source legally available for such purpose.
Section 2.3. Equality of Bonds and Parity Bonds and Pledge of Net Taxes. Pursuant to the Act and this Indenture, the Bonds and any Parity Bonds shall be equally payable from and secured by a pledge and lien upon the Net Taxes and other amounts in the Special Tax Fund (exclusive of the Administrative Expenses Account), without priority for number, date of the Bonds or Parity Bonds, date of sale, date of execution or date of delivery, and the payment of the interest on and principal of the Bonds and any Parity Bonds and any premiums upon the redemption thereof shall be exclusively paid from the Net Taxes and other amounts in the Special Tax Fund (exclusive of the Administrative Expenses Account), which are hereby set aside for the payment of the Bonds and any Parity Bonds. Amounts in the Special Tax Fund (other than the Administrative Expenses Account therein) shall constitute a trust fund held for the benefit of the Owners to be applied to the payment of the interest on and principal of the Bonds and any Parity Bonds; and, so long as any of the Bonds and any Parity Bonds or interest thereon remains Outstanding, amounts in the Special Tax Fund shall not be used for any other purpose, except as permitted by this Indenture or any Supplemental Indenture. Notwithstanding any provision contained in this Indenture to the contrary, 503
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Net Taxes deposited in the Rebate Fund and the Surplus Fund shall no longer be considered to be pledged to the Bonds or any Parity Bonds, and none of the Rebate Fund, the Surplus Fund, the Construction Fund, the Costs of Issuance Fund or the Administrative Expenses Account of the Special Tax Fund shall be construed as a trust fund held for the benefit of the Owners.
Nothing in this Indenture or any Supplemental Indenture shall preclude: (a) subject to the limitations contained hereunder, the redemption prior to maturity of any Bonds or Parity Bonds subject to call and redemption, and the payment of said Bonds or Parity Bonds from proceeds of refunding bonds issued under the Act as the same now exists or as hereafter amended, or under any other law of the State of California; or (b) the issuance, subject to the limitations contained herein, of Parity Bonds which shall be payable from Net Taxes.
Section 2.4. Description of Bonds; Interest Rates. The Bonds and any Parity Bonds shall be issued in fully registered form in denominations of $5,000 or any integral multiple thereof.
The Bonds and any Parity Bonds shall be initially issued in the form of a single certificated fully registered bond for each maturity.
The Bonds shall be designated “Community Facilities District No. 2006-1 2025 Special Tax Refunding Bonds.” The Bonds shall be dated as of their Delivery Date and shall mature and be payable on September 1 in the years and in the aggregate principal amounts and shall be subject to and shall bear interest at the rates set forth in the table below payable on each Interest Payment Date:
Maturity Date
(September 1) Principal Amount Interest Rate
$ %
(I)*
(I)
__________
(I) Insured Bond.
* Term Bond.
The District and the Trustee may treat and consider the person in whose name each Bond is registered in the Bond Register as the holder and absolute owner of such Bond for the purpose of 504
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payment of principal, premium, if any, and interest on such Bond, for the purpose of giving notices of redemption and other matters with respect to such Bond, for the purpose of registering transfers with respect to such Bond, and for all other purposes whatsoever. The Trustee shall pay all principal of, premium, if any, and interest on the Bonds only to or upon the order of the respective Owners or their respective attorneys duly authorized in writing, and all such payments shall be valid and effective to fully satisfy and discharge the District’s obligations with respect to payment of principal of, premium, if any, and interest on the Bonds to the extent of the sum or sums so paid. No person other than an Owner shall receive a certificated Bond evidencing the obligation of the District to make payments of principal, premium, if any, and interest pursuant to this Indenture.
Interest shall be payable on each Bond and Parity Bond from the date established in accordance with Section 2.5 below on each Interest Payment Date thereafter until the principal sum of such Bond or Parity Bond has been paid; provided, however, that if at the maturity date of any Bond or Parity Bond (or if the same is redeemable and shall be duly called for redemption, then at the date fixed for redemption) funds are available for the payment or redemption thereof in full, in accordance with the terms of this Indenture, such Bonds and Parity Bonds shall then cease to bear interest. Interest due on the Bonds and Parity Bonds shall be calculated on the basis of a 360-day year comprised of twelve 30-day months.
Section 2.5. Place and Form of Payment. The Bonds and Parity Bonds shall be payable both as to principal and interest, and as to any premiums upon the redemption thereof, in lawful money of the United States of America. The principal of the Bonds and Parity Bonds and any premiums due upon the redemption thereof shall be payable upon presentation and surrender thereof at the Principal Office of the Trustee, or at the designated office of any successor Trustee. Interest on any Bond or Parity Bond shall be payable from the Interest Payment Date next preceding the date of authentication of such Bond or Parity Bond, unless: (a) such date of authentication is an Interest Payment Date, in which event interest shall be payable from such date of authentication; (b) the date of authentication is after a Record Date but prior to the immediately succeeding Interest Payment Date, in which event interest shall be payable from the Interest Payment Date immediately succeeding the date of authentication; or (c) the date of authentication is prior to the close of business on the first Record Date occurring after the issuance of such Bond or Parity Bond, in which event interest shall be payable from the dated date of such Bond or Parity Bond, as applicable; provided, however, that if at the time of authentication of such Bond or Parity Bond, interest is in default, interest on such Bond or Parity Bond shall be payable from the last Interest Payment Date to which the interest has been paid or made available for payment or, if no interest has been paid or made available for payment on such Bond or Parity Bond, interest on such Bond or Parity Bond shall be payable from its dated date. Interest on any Bond or Parity Bond shall be paid to the person whose name shall appear in the Bond Register as the Owner of such Bond or Parity Bond as of the close of business on the Record Date. Such interest shall be paid by check of the Trustee mailed on the applicable Interest Payment Date by first class mail, postage prepaid, to such Bondowner at his or her address as it appears on the Bond Register. In addition, upon a request in writing received by the Trustee on or before the applicable Record Date from an Owner of $1,000,000 or more in principal amount of the Bonds or of any issue of Parity Bonds, payment shall be made on the Interest Payment Date by wire transfer in immediately available funds to an account designated in writing by such Owner. Notwithstanding the foregoing, as long as the Depository is the Owner of all or part of the Bonds or Parity Bonds, said interest payments shall be made to the Depository in accordance with the procedures of such Depository, which as of the date of this Indenture are by wire transfer in immediately available funds.
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Section 2.6. Form of Bonds and Parity Bonds. The definitive Bonds may be printed from steel engraved or lithographic plates or may be typewritten. The Bonds and the certificate of authentication shall be substantially in the form set forth in Exhibit A, which form is hereby approved and adopted as the form of such Bonds and of the certificate of authentication. Each issue of Parity Bonds and the certificate of authentication therefor shall be in the form provided in the Supplemental Indenture for such issue of Parity Bonds.
Until definitive Bonds or Parity Bonds, as applicable, are prepared, the District may cause to be executed and delivered in lieu of such definitive Bonds or Parity Bonds temporary bonds in typed, printed, lithographed or engraved form and in fully registered form, subject to the same provisions, limitations and conditions as are applicable in the case of definitive Bonds or Parity Bonds, except that they may be in any denominations authorized by the District. Until exchanged for definitive Bonds or Parity Bonds, as applicable, any temporary bond shall be entitled and subject to the same benefits and provisions of this Indenture as definitive Bonds and Parity Bonds. If the District issues temporary Bonds or Parity Bonds, it shall execute and furnish definitive Bonds or Parity Bonds, as applicable, without unnecessary delay and thereupon any temporary Bond or Parity Bond may be surrendered to the Trustee at its office, without expense to the Owner, in exchange for a definitive Bond or Parity Bond of the same issue, maturity, interest rate and principal amount in any authorized denomination. All temporary Bonds or Parity Bonds so surrendered shall be cancelled by the Trustee and shall not be reissued.
Section 2.7. Execution and Authentication. The Bonds and Parity Bonds shall be signed on behalf of the District by the manual or facsimile signature of the Mayor or the City Manager of the City and countersigned by the manual or facsimile signature of the City Clerk of the City, or any duly appointed deputy City Clerk, in their capacity as officers of the City, and the seal of the City (or a facsimile thereof) may be impressed, imprinted, engraved or otherwise reproduced thereon, and attested by the signature of the City Clerk of the City. In case any one or more of the officers who shall have signed or sealed any of the Bonds or Parity Bonds shall cease to be such officer before the Bonds or Parity Bonds so signed and sealed have been authenticated and delivered by the Trustee (including new Bonds or Parity Bonds delivered pursuant to the provisions hereof with reference to the transfer and exchange of Bonds or Parity Bonds or to lost, stolen, destroyed or mutilated Bonds or Parity Bonds), such Bonds and Parity Bonds shall nevertheless be valid and may be authenticated and delivered as herein provided, and may be issued as if the person who signed or sealed such Bonds or Parity Bonds had not ceased to hold such office.
Only the Bonds that bear a certificate of authentication in the form set forth in Exhibit A shall be entitled to any right or benefit under this Indenture, and no Bond shall be valid or obligatory for any purpose until such certificate of authentication shall have been duly executed by the Trustee.
Section 2.8. Bond Register. The Trustee will keep or cause to be kept, at its office, sufficient books for the registration and transfer of the Bonds and any Parity Bonds which shall upon reasonable prior written notice be open to inspection by the District during all regular business hours, and, subject to the limitations set forth in Section 2.9 below, upon presentation for such purpose, the Trustee shall, under such reasonable regulations as it may prescribe, register, transfer or cause to be transferred on said Bond Register, Bonds and any Parity Bonds as herein provided.
The District and the Trustee may treat the Owner of any Bond or Parity Bond whose name appears on the Bond Register as the absolute Owner thereof for any and all purposes, and the District and the Trustee shall not be affected by any notice to the contrary. The District and the Trustee may 506
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rely on the address of the Bondowner as it appears in the Bond Register for any and all purposes. It shall be the duty of the Bondowner to give written notice to the Trustee of any change in the Bondowner’s address so that the Bond Register may be revised accordingly.
Section 2.9. Registration of Exchange or Transfer. Subject to the limitations set forth in the following paragraph, the registration of any Bond or Parity Bond may, in accordance with its terms, be transferred upon the Bond Register by the person in whose name it is registered, in person or by his or her duly authorized attorney, upon surrender of such Bond or Parity Bond for cancellation at the Principal Office of the Trustee, accompanied by delivery of a written instrument of transfer in a form acceptable to the Trustee and duly executed by the Bondowner or his or her duly authorized attorney.
The transferor shall also provide or cause to be provided to the Trustee all information necessary to allow the Trustee to comply with any applicable tax reporting obligations, including without limitation any cost basis reporting obligations under Internal Revenue Code Section 6045.
The Trustee may rely on the information provided to it and shall have no responsibility to verify or ensure the accuracy of such information.
Bonds or Parity Bonds may be exchanged at the Principal Office of the Trustee for a like aggregate principal amount of Bonds or Parity Bonds for other authorized denominations of the same maturity and issue. The Trustee shall not collect from the Owner any charge for any new Bond or Parity Bond issued upon any exchange or transfer, but shall require the Bondowner requesting such exchange or transfer to pay any tax or other governmental charge required to be paid with respect to such exchange or transfer. Whenever any Bonds or Parity Bonds shall be surrendered for registration of transfer or exchange, the District shall execute and the Trustee shall authenticate and deliver a new Bond or Bonds or a new Parity Bond or Parity Bonds, as applicable, of the same issue and maturity, for a like aggregate principal amount; provided that the Trustee shall not be required to register transfers or make exchanges of: (a) Bonds or Parity Bonds for a period of 15 days next preceding any selection of the Bonds or Parity Bonds to be redeemed; or (b) any Bonds or Parity Bonds chosen for redemption.
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 Trustee all information necessary to allow the Trustee 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 Trustee shall conclusively rely on the information provided to it and shall have no responsibility to verify or ensure the accuracy of such information.
Section 2.10. Mutilated, Lost, Destroyed or Stolen Bonds or Parity Bonds. If any Bond or Parity Bond shall become mutilated, the District shall execute, and the Trustee shall authenticate and deliver, a new Bond or Parity Bond of like tenor, date, issue and maturity in exchange and substitution for the Bond or Parity Bond so mutilated, but only upon surrender to the Trustee of the Bond or Parity Bond so mutilated. Every mutilated Bond or Parity Bond so surrendered to the Trustee shall be cancelled by the Trustee pursuant to Section 10.1. If any Bond or Parity Bond is lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Trustee and, if such evidence is satisfactory to the Trustee and, if any indemnity satisfactory to the Trustee shall be given, the District shall execute and the Trustee shall authenticate and deliver a new Bond or Parity Bond, as applicable, of like tenor, maturity and issue, numbered and dated as the Trustee shall 507
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determine in lieu of and in substitution for the Bond or Parity Bond so lost, destroyed or stolen. Any Bond or Parity Bond issued in lieu of any Bond or Parity Bond alleged to be mutilated, lost, destroyed or stolen, shall be equally and proportionately entitled to the benefits hereof with all other Bonds and Parity Bonds issued hereunder. The Trustee shall not treat both the original Bond or Parity Bond and any replacement Bond or Parity Bond as being Outstanding for the purpose of determining the principal amount of Bonds or Parity Bonds which may be executed, authenticated and delivered hereunder or for the purpose of determining any percentage of Bonds or Parity Bonds Outstanding hereunder, but both the original and replacement Bond or Parity Bond shall be treated as one and the same. Notwithstanding any other provision of this Section, in lieu of delivering a new Bond or Parity Bond which has been mutilated, lost, destroyed or stolen, and which has matured, the Trustee may make payment with respect to such Bonds or Parity Bonds.
Section 2.11. Validity of Bonds and Parity Bonds. The validity of the authorization and issuance of the Bonds and any Parity Bonds shall not be affected in any way by any defect in any proceedings taken by the District for the refunding of the 2015 Bonds, or by the invalidity, in whole or in part, of any contracts made by the District in connection therewith, and shall not be dependent upon the completion of the refunding of the 2015 Bonds or upon the performance by any Person of such Person’s obligation with respect to the Project, and the recital contained in the Bonds or any Parity Bonds that the same are issued pursuant to the Act and other applicable laws of the State of California shall be conclusive evidence of their validity and of the regularity of their issuance.
Section 2.12. Book Entry System.
(a) Election of Book Entry System. Prior to the issuance of the Bonds and any Parity Bonds, the District may provide that such Bonds and Parity Bonds shall be initially issued as book entry bonds. If the District shall elect to deliver any Bonds or Parity Bonds in book entry form, then the District shall cause the delivery of a separate single fully registered bond (which may be typewritten) for each maturity date of such Bonds or Parity Bonds in an authorized denomination corresponding to that total principal amount of the Bonds or Parity Bonds designated to mature on such date. Upon initial issuance, the ownership of each such Bond or Parity Bond shall be registered in the Bond Register in the name of the Nominee, as nominee of the Depository, and ownership of the Bonds or Parity Bonds, or any portion thereof may not thereafter be transferred except as provided in subsection (e).
With respect to book entry Bonds or Parity Bonds, the District and the Trustee shall have no responsibility or obligation to any Participant or to any person on behalf of which such a Participant holds an interest in such book entry bonds. Without limiting the immediately preceding sentence, the District and the Trustee shall have no responsibility or obligation with respect to: (i) the accuracy of the records of the Depository, the Nominee, or any Participant with respect to any ownership interest in book entry bonds; (ii) the delivery to any Participant or any other person, other than an Owner as shown in the Bond Register, of any notice with respect to book entry bonds, including any notice of redemption; (iii) the selection by the Depository and its Participants of the beneficial interests in book entry bonds to be redeemed in the event that the District redeems the Bonds or Parity in part; (iv) the payment by the Depository or any Participant or any other person, of any amount of principal of, premium, if any, or interest on book entry bonds; or (v) any consent given or other action taken by the Depository as Bondowner. The District and the Trustee may treat and consider the person in whose name each book entry bond is registered in the Bond Register as the absolute Owner of such book entry bond for the purpose of payment of principal of, premium and interest on such Bond or Parity Bond, for the purpose of giving notices of redemption and other matters with respect to such 508
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Bond or Parity Bond, for the purpose of registering transfers with respect to such Bond or Parity Bonds, and for all other purposes whatsoever. The Trustee shall pay all principal of, premium, if any, and interest on the Bonds or Parity Bonds only to or upon the order of the respective Owner, as shown in the Bond Register, or such Owner’s respective attorney duly authorized in writing, and all such payments shall be valid and effective to fully satisfy and discharge the District’s obligations with respect to payment of principal of, premium, if any, and interest on the Bonds or Parity Bonds to the extent of the sum or sums so paid. No person other than an Owner, as shown in the Bond Register, shall receive a Bond or Parity Bond evidencing the obligation to make payments of principal of, premium, if any, and interest on the Bonds or Parity Bonds. Upon delivery by the Depository to the District and the Trustee, of written notice to the effect that the Depository has determined to substitute a new nominee in place of the Nominee, and subject to the provisions herein with respect to Record Dates, the word Nominee in the Indenture shall refer to such nominee of the Depository.
(b) Delivery of Representation Letter. In order to qualify the book entry bonds for the Depository’s book entry system, the District and the Trustee (if required by the Depository) shall execute and deliver to the Depository a Representation Letter. The execution and delivery of a Representation Letter shall not in any way impose upon the District or the Trustee any obligation whatsoever with respect to persons having interests in such book entry bonds other than the Owners, as shown on the Bond Register. By executing a Representation Letter, the Trustee shall agree to take all action necessary at all times so that the Trustee will be in compliance with all representations of the Trustee in such Representation Letter. In addition to the execution and delivery of a Representation Letter, the District and the Trustee shall take such other actions, not inconsistent with the Indenture, as are reasonably necessary to qualify book entry bonds for the Depository’s book entry program.
(c) Selection of Depository. In the event that: (i) the Depository determines not to continue to act as securities depository for book entry bonds; or (ii) the District determines that continuation of the book entry system is not in the best interest of the beneficial owners of the Bonds, the Parity Bonds or the District, then the District will discontinue the book entry system with the Depository. If the District determines to replace the Depository with another qualified securities depository, the District shall prepare or direct the preparation of a new single, separate, fully registered bond for each of the maturity dates of such book entry bonds, registered in the name of such successor or substitute qualified securities depository or its Nominee as provided in subsection (e). If the District fails to identify another qualified securities depository to replace the Depository, then the Bonds or Parity Bonds shall no longer be restricted to being registered in such Bond Register in the name of the Nominee, but shall be registered in whatever name or names the Owners transferring or exchanging such Bonds or Parity Bonds shall designate, in accordance with the provisions of this Indenture.
(d) Payments To Depository. Notwithstanding any other provision of the Indenture to the contrary, so long as all Outstanding Bonds or Parity Bonds are held in book entry form and registered in the name of the Nominee, all payments of principal of, redemption premium, if any, and interest on such Bonds or Parity Bonds and all notices with respect thereto shall be made and given, respectively to the Nominee, as provided in the Representation Letter or as otherwise instructed by the Depository and agreed to by the Trustee notwithstanding any inconsistent provisions herein. 509
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(e) Transfer of Bonds to Substitute Depository.
(1) The Bonds shall be initially issued as provided in Section 2.1.
Registered ownership of such Bonds, or any portions thereof, may not thereafter be transferred except:
(i) to any successor of the Depository or its nominee, or of any substitute depository designated pursuant to clause (ii) below (a “Substitute Depository”); provided that any successor of the Depository or Substitute Depository shall be qualified under any applicable laws to provide the service proposed to be provided by it; (ii) to any Substitute Depository, upon: (I) the resignation of the Depository or its successor (or any Substitute Depository or its successor) from its functions as depository; or (II) a determination by the District that the Depository (or its successor) is no longer able to carry out its functions as depository; provided that any such Substitute Depository shall be qualified under any applicable laws to provide the services proposed to be provided by it; or (iii) to any person as provided below, upon: (I) the resignation of the Depository or its successor (or any Substitute Depository or its successor) from its functions as depository; or (II) a determination by the District that the Depository or its successor (or Substitute Depository or its successor) is no longer able to carry out its functions as depository. (2) In the case of any transfer pursuant to clauses (i) or (ii) of subsection (1), upon receipt of all Outstanding Bonds by the Trustee, together with a written request of the District to the Trustee designating the Substitute Depository, a single new Bond, which the District shall prepare or cause to be prepared, shall be issued for each maturity of Bonds then Outstanding, registered in the name of such successor or such Substitute Depository or their Nominees, as the case may be, all as specified in such written request of the District. In the case of any transfer pursuant to clause (iii) of subsection (1), upon receipt of all Outstanding Bonds by the Trustee, together with a written request of the District to the Trustee, new Bonds, which the District shall prepare or cause to be prepared, shall be issued in such denominations and registered in the names of such persons as are requested in such written request of the District, subject to the limitations of Section 2.1; provided that the Trustee shall not be required to deliver such new Bonds within a period of less than sixty (60) days from the date of receipt of such written request from the District. (3) In the case of a partial redemption or an advance refunding of any Bonds evidencing a portion of the principal maturing in a particular year, the Depository or its successor (or any Substitute Depository or its successor) shall make an appropriate notation on such Bonds indicating the date and amounts of such reduction in principal, in form acceptable to the Trustee, all in accordance with the Representation Letter. The Trustee shall not be liable for such Depository’s failure to make such notations or errors in making such notations and the records of the Trustee as to the Outstanding principal amount of such Bonds shall be controlling. (4) The District and the Trustee shall be entitled to treat the person in whose name any Bond is registered as the Owner thereof for all purposes of the Indenture and any applicable laws, notwithstanding any notice to the contrary received by the Trustee or the District; and the District and the Trustee shall not have responsibility for transmitting payments to, communicating with, notifying, or otherwise dealing with any beneficial owners of the Bonds.
Neither the District nor the Trustee shall have any responsibility or obligation, legal or otherwise, to 510
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any such beneficial owners or to any other party, including the Depository or its successor (or Substitute Depository or its successor), except to the Owner of any Bonds, and the Trustee may rely conclusively on its records as to the identity of the Owners of the Bonds.
Section 2.13. Initial Depository and Nominee. The initial Depository under this Article shall be The Depository Trust Company, New York, New York. The initial Nominee shall be Cede & Co., as Nominee of The Depository Trust Company, New York, New York.
ARTICLE III
CREATION OF FUNDS AND APPLICATION OF PROCEEDS
Section 3.1. Creation of Funds; Application of Proceeds. (a) There are hereby created and established and shall be maintained by the Trustee the following funds and accounts:
(1) The Community Facilities District No. 2006-1 (Marblehead Coastal) of the City of San Clemente 2025 Special Tax Refunding Bonds Special Tax Fund (the “Special Tax Fund”) (in which there shall be established and created an Interest Account, a Principal Account, a Redemption Account, a Reserve Account and an Administrative Expenses Account). (2) The Community Facilities District No. 2006-1 (Marblehead Coastal) of the City of San Clemente 2025 Special Tax Refunding Bonds Rebate Fund (the “Rebate Fund”) (in which there shall be established a Rebate Account and an Alternative Penalty Account). (3) The Community Facilities District No. 2006-1 (Marblehead Coastal) of the City of San Clemente 2025 Special Tax Refunding Bonds Costs of Issuance Fund (the “Costs of Issuance Fund”).
(4) The Community Facilities District No. 2006-1 (Marblehead Coastal) of the City of San Clemente 2025 Special Tax Refunding Bonds Surplus Fund (the “Surplus Fund”). (5) The Community Facilities District No. 2006-1 (Marblehead Coastal) of the City of San Clemente 2025 Special Tax Refunding Bonds Construction Fund (the “Construction Fund”).
The amounts on deposit in the foregoing funds, accounts and subaccounts shall be held by the Trustee and the Trustee shall invest and disburse the amounts in such funds, accounts and subaccounts in accordance with the provisions of this Article 3 and shall disburse investment earnings thereon in accordance with the provisions of Section 3.11 hereof. The Trustee may, in its discretion, establish temporary funds or accounts in its books and records to facilitate such transfers.
In connection with the issuance of any Parity Bonds, the Trustee, at the direction of an Authorized Representative of the City, may create new funds, accounts or subaccounts, or may create additional accounts and subaccounts within any of the foregoing funds and accounts for the purpose of separately accounting for the proceeds of the Bonds and any Parity Bonds. (b) The proceeds of the sale of the Bonds received by the Trustee in the amount of $______ (representing the initial aggregate principal amount of the Bonds of $______, plus 511
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$_______ of net original issue premium, less $______ of Underwriter’s discount and less $______ paid directly to the Bond Insurer by the Underwriter) shall be received on behalf of the District and deposited and transferred as follows:
(1) $______ shall be transferred to the Costs of Issuance Fund to pay the Costs of Issuance of the Bonds;
(2) $______ shall be transferred to the Interest Account of the Special Tax Fund to pay interest on the Bonds due September 1, 2025.
(3) $______ shall be transferred to the Escrow Agent for deposit in the Escrow Fund.
(4) $______ shall be transferred to the Reserve Account, representing 50% of the Reserve Requirement, and will be credited to the various accounts in the Reserve Account as provided in Section 3.6 hereof.
The Trustee shall deposit in the Reserve Account the Reserve Policy, which amount represents 50% of the Reserve Requirement as of the Closing Date of the Bonds and will be credited to the various accounts in the Reserve Account as provided in Section 3.6 hereof. (c) $_______ on deposit in the Fiscal Agent Agreement pursuant to which the 2015 Bonds were issued shall be transferred to the Trustee to be deposited in the Construction Fund.
The Trustee may, in its discretion, establish temporary funds, accounts or subaccounts in its books and records to facilitate such transfers.
Section 3.2. Deposits to and Disbursements from Special Tax Fund. (a) Except for the portion of any Prepayment to be deposited in the Redemption Account as specified in a Certificate of an Authorized Representative, the Trustee shall, on each date on which the Special Taxes are received from the District, deposit the Special Taxes in the Special Tax Fund to be held in trust for the Owners. The Trustee shall transfer the Special Taxes on deposit in the Special Tax Fund on the dates and in the amounts set forth in the following Sections, in the following order of priority, to:
(1) the Administrative Expenses Account of the Special Tax Fund up to the Administrative Expenses Cap;
(2) the Interest Account of the Special Tax Fund;
(3) the Principal Account of the Special Tax Fund;
(4) the Redemption Account of the Special Tax Fund;
(5) the Reserve Account of the Special Tax Fund;
(6) the Administrative Expense Account of the Special Tax Fund to the extent that Administrative Expenses exceed or are expected to exceed the Administrative Expense Cap;
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(7) the Rebate Fund; and
(8) the Surplus Fund.
(b) Upon the maturity of all of the Bonds and Parity Bonds and, after all principal and interest then due on the Bonds and Parity Bonds then Outstanding has been paid or provided for and any amounts owed to the Trustee have been paid in full, moneys in the Special Tax Fund and any accounts therein may be used by the District for any lawful purpose.
Section 3.3. Administrative Expenses Account of the Special Tax Fund. The Trustee shall transfer from the Special Tax Fund and deposit in the Administrative Expenses Account of the Special Tax Fund from time to time amounts necessary to make timely payment of Administrative Expenses as set forth in a Certificate of an Authorized Representative of the City; provided, however, that, except as set forth in the following sentence, the total amount transferred in a Bond Year shall not exceed the Administrative Expenses Cap until such time as there has been deposited to the Interest Account and the Principal Account an amount, together with any amounts already on deposit therein, that is sufficient to pay the interest and principal on all Bonds and Parity Bonds due in such Bond Year and to restore the Reserve Account to the Reserve Requirement, all as determined by the District. Notwithstanding the foregoing, amounts in excess of the Administrative Expenses Cap may be transferred to the Administrative Expenses Account to the extent necessary to collect delinquent Special Taxes, as directed in writing by an Authorized Representative of the City. Moneys in the Administrative Expenses Account of the Special Tax Fund may be invested in any Permitted Investments as directed in writing by an Authorized Representative of the City and shall be disbursed as directed in a Certificate of an Authorized Representative.
Section 3.4. Interest Account and Principal Account of the Special Tax Fund. The principal of (including any Sinking Fund Payment) and interest due on the Bonds and any Parity Bonds until maturity, other than principal due upon redemption under Sections 4.1(a) and (c), shall be paid by the Trustee from the Principal Account and the Interest Account of the Special Tax Fund, respectively. For the purpose of assuring that the payment of principal of (including any Sinking Fund Payment) and interest on the Bonds and any Parity Bonds will be made when due, after making the transfer required by Section 3.3, at least one Business Day prior to each March 1 and September 1, the Trustee shall make the following transfers from the Special Tax Fund first to the Interest Account and then to the Principal Account; provided, however, that to the extent that deposits have been made in the Interest Account or the Principal Account from the proceeds of the sale of an issue of the Bonds, any Parity Bonds, or otherwise, the transfer from the Special Tax Fund need not be made; and provided, further, that, if amounts in the Special Tax Fund (exclusive of the Reserve Account) are inadequate to make the foregoing transfers, then any deficiency shall be made up by an immediate transfer from the Reserve Account:
(a) To the Interest Account, an amount such that the balance in the Interest Account one Business Day prior to each Interest Payment Date shall be equal to the installment of interest due on the Bonds and any Parity Bonds on said Interest Payment Date and any installment of interest due on a previous Interest Payment Date that remains unpaid. Moneys in the Interest Account shall be used for the payment of interest on the Bonds and any Parity Bonds as the same become due. (b) To the Principal Account, an amount such that the balance in the Principal Account one Business Day prior to September 1 of each year shall equal the principal payment (including any Sinking Fund Payment) due on the Bonds and any Parity Bonds maturing on such September 1 and 513
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any principal payment due on a previous September 1 which remains unpaid. Moneys in the Principal Account shall be used for the payment of the principal (including any Sinking Fund Payment) of such Bonds and any Parity Bonds as the same become due at maturity.
Section 3.5. Redemption Account of the Special Tax Fund. (a) After making the deposits to the Administrative Expenses Account, the Interest Account and the Principal Account of the Special Tax Fund pursuant to Sections 3.3 and 3.4, or to call Parity Bonds for optional redemption as set forth in any Supplemental Indenture for Parity Bonds, the Trustee shall transfer from the Special Tax Fund and deposit in the Redemption Account moneys available for the purpose and sufficient to pay the principal and the premiums, if any, payable on the Bonds or Parity Bonds called for optional redemption; provided, however, that amounts in the Special Tax Fund (other than the Administrative Expenses Account therein) may be applied to optionally redeem Bonds and Parity Bonds only if immediately following such redemption the amount in the Reserve Account will equal the Reserve Requirement, as determined by the District.
(b) Prepayments deposited to the Redemption Account shall be applied on the redemption date established pursuant to Section 4.1(c) for the use of such Prepayments to the payment of the principal of, premium, and interest on the Bonds and Parity Bonds to be redeemed with such Prepayments.
(c) Moneys set aside in the Redemption Account shall be used solely for the purpose of redeeming Bonds and Parity Bonds, shall be applied on or after the redemption date to the payment of principal of and premium, if any, on the Bonds or Parity Bonds to be redeemed upon presentation and surrender (if required) of such Bonds or Parity Bonds and, in the case of an optional redemption or an extraordinary redemption from Prepayments, to pay the interest thereon; provided, however, that in lieu or partially in lieu of such call and redemption, moneys deposited in the Redemption Account may be used to purchase Outstanding Bonds or Parity Bonds in the manner hereinafter provided. Purchases of Outstanding Bonds or Parity Bonds may be made by the District at public or private sale as and when and at such prices as the District may in its discretion determine, but only at prices (including brokerage or other expenses) not more than par plus accrued interest, plus, in the case of moneys set aside for an optional redemption or an extraordinary redemption, the premium applicable at the next following call date according to the premium schedule established pursuant to Sections 4.1(a) or 4.1(c), as applicable, or in the case of Parity Bonds the premium established in any Supplemental Indenture. Any accrued interest payable upon the purchase of Bonds or Parity Bonds may be paid from the amount reserved in the Interest Account of the Special Tax Fund for the payment of interest on the next following Interest Payment Date.
Section 3.6. Reserve Account of the Special Tax Fund. There shall be maintained in the Reserve Account of the Special Tax Fund the Reserve Policy in an amount equal to the Reserve Requirement. The Reserve Policy shall be drawn upon solely for the purpose of paying the principal of, including Sinking Fund Payments, and interest on the Bonds when due in the event that the moneys in the Interest Account and the Principal Account of the Special Tax Fund are insufficient therefor or moneys in the Redemption Account of the Special Tax Fund are insufficient to make a Sinking Fund Payment when due, and for the purpose of making any required transfer to the Rebate Fund pursuant to Section 3.7 upon written direction from the District. If the amounts in the Interest Account, the Principal Account or the Redemption Account of the Special Tax Fund are insufficient to pay the principal of, including Sinking Fund Payments, or interest on any Bonds when due, or 514
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amounts in the Special Tax Fund are insufficient to make transfers to the Rebate Fund when required, the Trustee shall draw upon the Reserve Policy for deposit in the Interest Account, the Principal Account or the Redemption Account of the Special Tax Fund or the Rebate Fund, as applicable, moneys necessary for such purposes. 50% of the Reserve Requirement will initially be satisfied by the Reserve Policy and 50% will initially be satisfied with the deposit from proceeds of the Bonds pursuant to Section 3.1(b) hereof.
Section 3.7. Rebate Fund.
(a) The Trustee shall establish and maintain a fund separate from any other fund established and maintained hereunder designated as the Rebate Fund and shall establish a separate Rebate Account and Alternative Penalty Account therein. All money at any time deposited in the Rebate Account or the Alternative Penalty Account of the Rebate Fund shall be held by the Trustee in trust, for payment to the United States Treasury. A separate subaccount of the Rebate Account and the Alternative Penalty Account shall be established for the Bonds and each issue of Parity Bonds the interest on which is excluded from gross income for federal income tax purposes. All amounts on deposit in the Rebate Fund with respect to the Bonds or an issue of Parity Bonds shall be governed by this Section 3.7 and the Tax Certificate for such issue, unless the District obtains an opinion of Bond Counsel that the exclusion from gross income for federal income tax purposes of interest payments on the Bonds and Parity Bonds will not be adversely affected if such requirements are not satisfied.
(1) Rebate Account. The following requirements shall be satisfied with respect to each subaccount of the Rebate Account:
(i) Annual Computation. Within 55 days of the end of each fifth Bond Year, the District shall calculate or cause to be calculated the amount of rebatable arbitrage for the Bonds and each issue of Parity Bonds to which this Section 3.7 is applicable, in accordance with Section 148(f)(2) of the Code and Section 1.148-3 of the Rebate Regulations (taking into account any applicable exceptions with respect to the computation of the rebatable arbitrage described in the Tax Certificate for each issue (e.g., the temporary investments exceptions of Section 148(f)(4)(B) and (C) of the Code), and taking into account whether the election pursuant to Section 148(f)(4)(C)(vii) of the Code (the “1½% Penalty”) has been made), for this purpose treating the last day of the applicable Bond Year as a computation date, within the meaning of Section 1.148-1(b) of the Rebate Regulations (the “Rebatable Arbitrage”). The District shall obtain expert advice as to the amount of the Rebatable Arbitrage to comply with this Section. (ii) Annual Transfer. Within 55 days of the end of each Bond Year for which Rebatable Arbitrage must be calculated as required by the Tax Certificate for each issue, upon the written direction of an Authorized Representative of the City, an amount shall be deposited to each subaccount of the Rebate Account by the Trustee from any funds so designated by the District if and to the extent required, so that the balance in the Rebate Account shall equal the amount of Rebatable Arbitrage so calculated by or on behalf of the District in accordance with subsection (a)(1)(i) with respect to the Bonds and each issue of Parity Bonds to which this Section 3.7 is applicable. In the event that immediately following any transfer required by the previous sentence, or the date on which the District determines that no transfer is required for such Bond Year, the amount then on deposit to the credit of the applicable subaccount of the Rebate Account exceeds the amount required to be on deposit therein, upon written instructions from an 515
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Authorized Representative of the City, the Trustee shall withdraw the excess from the appropriate subaccount of the Rebate Account and then credit the excess to the Special Tax Fund. (iii) Payment to the Treasury. The Trustee shall pay, as directed in writing by an Authorized Representative of the City, to the United States Treasury, out of amounts in each subaccount of the Rebate Account: (X) not later than 60 days after the end of: (A) the fifth Bond Year for the Bonds and each issue of Parity Bonds to which this Section 3.7 is applicable; and (B) each applicable fifth Bond Year thereafter, an amount equal to at least 90% of the Rebatable Arbitrage calculated as of the end of such Bond Year for the Bonds and each issue of Parity Bonds, as applicable; and (Y) not later than 60 days after the payment or redemption of all of the Bonds or an issue of Parity Bonds, as applicable, an amount equal to 100% of the Rebatable Arbitrage calculated as of the end of such applicable Bond Year, and any income attributable to the Rebatable Arbitrage, computed in accordance with Section 148(f) of the Code.
In the event that, prior to the time that any payment is required to be made from the Rebate Account, the amount in the Rebate Account is not sufficient to make such payment when such payment is due, the District shall calculate or cause to be calculated the amount of such deficiency and deposit an amount received from any legally available source equal to such deficiency prior to the time such payment is due. Each payment required to be made pursuant to this subsection (a)(1) shall be made to the Internal Revenue Service Center, Ogden, Utah 84201 on or before the date on which such payment is due, and shall be accompanied by Internal Revenue Service Form 8038-T prepared and signed by the District, or shall be made in such other manner as provided under the Code. The Trustee may rely conclusively upon the District’s determinations, calculations and certifications required by this Section. The Trustee shall have no responsibility to independently make any calculation or determination or to review the District’s calculations hereunder. (2) Alternative Penalty Account.
(i) Six-Month Computation. If the 1½% Penalty has been elected for the Bonds or an issue of Parity Bonds, within 85 days of each particular Six-Month Period, the District shall determine or cause to be determined whether the 1½% Penalty is payable (and the amount of such penalty) as of the close of the applicable Six-Month Period. The District shall obtain expert advice in making such determinations.
(ii) Six-Month Transfer. Within 85 days of the close of each Six-Month Period, the Trustee, at the written direction of an Authorized Representative of the City, shall deposit an amount in the appropriate subaccounts of the Alternative Penalty Account from any source of funds held by the Trustee pursuant to this Indenture and designated by the District in such written directions or provided to it by the District, if and to the extent required, so that the balance in each subaccount of the Alternative Penalty Account equals the amount of 1½% Penalty due and payable to the United States Treasury determined as provided in subsection (a)(2)(i). In the event that immediately following any transfer provided for in the previous sentence, or the date on which the District determines that no transfer is required for such Bond Year, the amount then on deposit in a subaccount of the Alternative Penalty Account exceeds the amount required to be on deposit therein to make the payments required by subsection (a)(2)(iii), the Trustee, at the written direction of an Authorized Representative of the City, may withdraw the excess from the applicable subaccount of the Alternative Penalty Account and credit the excess to the Special Tax Fund. 516
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(iii) Payment to the Treasury. The Trustee shall pay, as directed in writing by an Authorized Representative of the City, to the United States Treasury, out of amounts in a subaccount of the Alternative Penalty Account, not later than 90 days after the close of each Six-Month Period the 1½% Penalty, if applicable and payable, computed with respect to the Bonds and any issue of Parity Bonds in accordance with Section 148(f)(4) of the Code. In the event that, prior to the time that any payment is required to be made from a subaccount of the Alternative Penalty Account, the amount in such subaccount is not sufficient to make such payment when such payment is due, the District shall calculate the amount of such deficiency and direct the Trustee, in writing, to deposit an amount equal to such deficiency into such subaccount of the Alternative Penalty Account from any funds held by the Trustee pursuant to this Indenture and designated by the District in such written directions prior to the time such payment is due. Each payment required to be made pursuant to this subsection (a)(2) shall be made to the Internal Revenue Service, Ogden, Utah 84201 on or before the date on which such payment is due, and shall be accompanied by Internal Revenue Service Form 8038-T, prepared and signed by the District, or shall be made in such other manner as provided under the Code.
(b) Disposition of Unexpended Funds. Any funds remaining in the Accounts of the Rebate Fund with respect to the Bonds or an issue of Parity Bonds after redemption and payment of such issue and after making the payments described in subsections (a)(1)(iii) or (a)(2)(iii) (whichever is applicable), may be withdrawn by the Trustee at the written direction of the District and utilized in any manner by the District.
(c) Survival of Defeasance and Final Payment. Notwithstanding anything in this Section or this Indenture to the contrary, the obligation to comply with the requirements of this Section shall survive the defeasance and final payment of the Bonds and any Parity Bonds with respect to which an Account has been created in the Rebate Fund.
(d) Amendment Without Consent of Owners. This Section 3.7 may be deleted or amended in any manner without the consent of the Owners, provided that prior to such event there is delivered to the District and the Trustee an opinion of Bond Counsel to the effect that such deletion or amendment will not adversely affect the exclusion from gross income for federal income tax purposes of interest on the Bonds and any issue of Parity Bonds issued on a tax-exempt basis, in addition to any opinions required by the Trustee under Section 6.3 hereof.
Section 3.8. Surplus Fund. After making the transfers required by Sections 3.3, 3.4, 3.5,
3.6 and 3.7, as soon as practicable after each September 1, and in any event prior to each October 1, the Trustee shall transfer all remaining amounts in the Special Tax Fund to the Surplus Fund, unless on or prior to such date, it has received a Certificate of an Authorized Representative of the City directing that certain amounts be retained in the Special Tax Fund because the District has included such amounts as being available in the Special Tax Fund in calculating the amount of the levy of Special Taxes for such Fiscal Year pursuant to Section 5.2(b). Moneys deposited in the Surplus Fund will be transferred by the Trustee at the direction of an Authorized Representative of the City:
(a) to the Interest Account, the Principal Account or the Redemption Account of the Special Tax Fund to pay the principal of, including Sinking Fund Payments, premium, if any, and interest on the Bonds and any Parity Bonds when due in the event that moneys in the Special Tax Fund and the Reserve Account of the Special Tax Fund are insufficient therefor; (b) to the Reserve Account in order to replenish the Reserve Account to the Reserve Requirement; (c) to the Administrative Expenses Account of the Special Tax Fund to pay Administrative Expenses to the extent that the amounts on deposit in the Administrative Expenses Account of the Special Tax Fund are insufficient 517
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to pay Administrative Expenses; (d) to the Construction Fund to pay Project Costs; or (e) for any other lawful purpose of the District.
The amounts in the Surplus Fund are not pledged to the repayment of the Bonds or the Parity Bonds and may be used by the District for any lawful purpose. In the event that the District reasonably expects to use any portion of the moneys in the Surplus Fund to pay debt service on any Outstanding Bonds or Parity Bonds, the District will notify the Trustee in a Certificate of an Authorized Representative and the Trustee will segregate such amount into a separate subaccount and the moneys on deposit in such subaccount of the Surplus Fund shall be invested at the written direction of the District in Permitted Investments the interest on which is excludable from gross income under Section 103 of the Code (other than bonds the interest on which is a tax preference item for purposes of computing the alternative minimum tax of individuals and corporations under the Code) or in Permitted Investments at a yield not in excess of the yield on the issue of Bonds or Parity Bonds to which such amounts are to be applied, unless, in the opinion of Bond Counsel, investment at a higher yield will not adversely affect the exclusion from gross income for federal income tax purposes of interest on the Bonds or any Parity Bonds which were issued on a tax-exempt basis for federal income tax purposes.
Section 3.9. Costs of Issuance Fund. The moneys in the Costs of Issuance Fund shall be disbursed by the Trustee pursuant to a Certificate of an Authorized Representative of the City, and any balance therein shall be transferred by the Trustee to the Interest Account as directed in writing by an Authorized Representative of the City or 90 days following the issuance of the Bonds, whichever is earlier. The Costs of Issuance Fund shall thereafter be closed.
Section 3.10. Construction Fund.
(a) The moneys in the Construction Fund shall be applied exclusively to pay the Project Costs. Amounts for Project Costs shall be disbursed by the Trustee from the Construction Fund, as specified in a Request for Disbursement of Project Costs, substantially in the form of Exhibit B-1 attached hereto. A properly executed Request for Disbursement of Project Costs must be submitted in connection with each requested disbursement and the Trustee may rely thereon without investigating the accuracy thereof. Amounts in an Account of the Construction Fund may be transferred to another Account or Accounts therein pursuant to a Certificate of an Authorized Representative of the District.
(b) Upon receipt of a Certificate of an Authorized Representative of the District stating that all or a specified portion of the amount remaining in the Construction Fund is no longer needed to pay Project Costs, the Trustee shall: (i) transfer all or such specified portion, as applicable, of the moneys remaining on deposit in the Construction Fund to the Interest Account, the Principal Account or Redemption Account of the Special Tax Fund, to the Costs of Issuance Account or to the Surplus Fund, as directed in such certificate, provided that in connection with any direction to transfer amounts to the Surplus Fund there shall have been delivered to the Trustee with such certificate an opinion of Bond Counsel to the effect that such transfer to the Surplus Fund will not adversely affect the exclusion from gross income for federal income tax purposes of interest on the Bonds or any Parity Bonds which were issued on a tax-exempt basis for federal income tax purposes; and (ii) thereafter, close the Construction Fund.
The Trustee shall be under no duty or obligation to analyze or verify any documentation supporting such disbursements or transfers, but shall hold and provide to Bondowners upon request 518
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such documentation relating to disbursements or transfers, solely as a repository for the benefit of Bondowners.
Section 3.11. Investments. Moneys held in any of the funds, Accounts and subaccounts under this Indenture shall be invested at the written direction of the District in accordance with the limitations set forth below only in Permitted Investments which shall be deemed at all times to be a part of such funds, Accounts and subaccounts. Any loss resulting from such Permitted Investments shall be credited or charged to the fund, Account or subaccount from which such investment was made, and any investment earnings on a fund, Account or subaccount shall be applied as follows:
(i) investment earnings on all amounts deposited in the Construction Fund, the Costs of Issuance Fund, the Special Tax Fund, the Surplus Fund and the Rebate Fund and each Account therein (other than the Reserve Account of the Special Tax Fund) shall be deposited in those respective funds and Accounts; and (ii) investment earnings on all amounts deposited in the Reserve Account shall be deposited therein to be applied as set forth in Section 3.6. Moneys in the funds, Accounts and subaccounts held under this Indenture may be invested by the Trustee as directed in writing (filed by the District with the Trustee two (2) Business Days in advance of the making of the investment) from time to time, in Permitted Investments subject to the following restrictions:
(a) Moneys in the Construction Fund shall be invested in Authorized Investments which will by their terms mature, or in the case of an Investment Agreement are available without penalty, as close as practicable to the date the District estimates the moneys represented by the particular investment will be needed for withdrawal from the Construction Fund. Notwithstanding anything herein to the contrary, amounts in the Construction Fund three years after the Delivery Date for the Bonds and the proceeds of each issue of Parity Bonds issued on a tax-exempt basis which are remaining on deposit in the Construction Fund on the date which is three years following the date of issuance of such issue of Parity Bonds shall be invested by the District only in Authorized Investments the interest on which is excluded from gross income under Section 103 of the Code (other than bonds the interest on which is a tax preference item for purposes of computing the alternative minimum tax of individuals under the Code) or in Authorized Investments at a yield not in excess of the yield on the issue of Bonds or Parity Bonds from which such proceeds were derived, unless in the opinion of Bond Counsel such restriction is not necessary to prevent interest on the Bonds or any Parity Bonds which were issued on a tax-exempt basis for federal income tax purposes from being included in gross income for federal income tax purposes. (b) Moneys in the Costs of Issuance Fund and the Interest Account, the Principal Account and the Redemption Account of the Special Tax Fund shall be invested only in Permitted Investments which will by their terms mature, or in the case of an investment agreement are available for withdrawal without penalty, on such dates so as to ensure the payment of principal of, premium, if any, and interest on the Bonds and any Parity Bonds as the same become due. (c) Moneys in the Reserve Account of the Special Tax Fund may be invested only in Permitted Investments which, taken together, have a weighted average maturity not in excess of five years; provided that such amounts may be invested in an investment agreement to the later of the final maturity of the Bonds or any Parity Bonds so long as such amounts may be withdrawn at any time, without penalty, for application in accordance with Section 3.6; and provided that no such Permitted Investment of amounts in the Reserve Account allocable to the Bonds or an issue of Parity Bonds shall mature later than the respective final maturity date of the Bonds or the issue of Parity Bonds, as applicable.
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(d) Moneys in the Rebate Fund shall be invested only in Permitted Investments of the type described in clause (a) of the definition thereof which by their terms will mature, as nearly as practicable, on the dates such amounts are needed to be paid to the United States Government pursuant to Section 3.7, or in Permitted Investments of the type described in clause (g) of the definition thereof.
(e) In the absence of written investment directions from the District, the Trustee shall hold such moneys uninvested.
The Trustee shall sell, or present for redemption, any Permitted Investment as directed in writing by the District whenever it may be necessary to do so in order to provide moneys to meet any payment or transfer to such funds and Accounts or from such funds and Accounts. For the purpose of determining at any given time the balance in any such funds and Accounts, any such investments constituting a part of such funds and Accounts shall be valued at their cost, except that amounts in the Reserve Account shall be valued at the market value thereof at least semiannually on or before each Interest Payment Date. In making any valuations hereunder, the Trustee may utilize and conclusively rely on, without liability, such generally recognized pricing information services (including brokers and dealers in securities) as may be available to it, including, without limitation, those available through its regular accounting system, and conclusively rely thereon.
Notwithstanding anything herein to the contrary, the Trustee shall not be liable for the selection of investments or for investment losses incurred thereon. The Trustee shall have no liability in respect of losses incurred as a result of the liquidation of any investment prior to its stated maturity or the failure of the District to provide timely written investment direction. The Trustee may conclusively rely upon the District’s written instructions as to both suitability and legality of the directed investments.
The Trustee or an affiliate may act as principal or agent in the making or disposing of any investment and shall be entitled to its customary fee for such investment, including account maintenance fees. The Trustee may sell, or present for redemption, any Permitted Investment so purchased whenever it shall be necessary to provide moneys to meet any required payment, transfer, withdrawal or disbursement from the fund or account to which such Permitted Investment is credited, and, subject to the provisions of Section 7.4, the Trustee shall not be liable or responsible for any loss resulting from such investment. For investment purposes, the Trustee may commingle the funds and accounts established hereunder, but shall account for each separately. The Trustee may make any and all such investments through its own investment department or that of its affiliates or subsidiaries, and may charge its ordinary and customary fees for such trades, including account maintenance fees. Ratings of Permitted Investments shall be determined at the time of purchase of such Permitted Investments and without regard to ratings subcategories.
The District acknowledges that, to the extent that regulations of the Comptroller of the Currency or other applicable regulatory entity grant the District the right to receive brokerage confirmations of security transactions as they occur, the District specifically waives receipt of such confirmations to the extent permitted by law. The Trustee will furnish the District periodic cash transaction statements which include detail for all investment transactions made by the Trustee hereunder.
Ratings of Permitted Investments referred to herein shall be determined at the time of purchase of such Permitted Investments and without regard to rating subcategories. The Trustee shall have no responsibility to monitor ratings of Permitted Investments after the initial purchase of such 520
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Authorized Investments or the responsibility to validate the ratings of Permitted Investments prior to the initial purchase.
ARTICLE IV
REDEMPTION OF BONDS AND PARITY BONDS
Section 4.1. Redemption of Bonds.
(a) Optional Redemption. The Bonds with stated maturities on or after September 1, 20__ are subject to redemption prior to their respective stated maturities, as a whole or in part, as directed by the District in a written request provided to the Trustee at least 35 days (or such lesser number of days acceptable to the Trustee in the sole discretion of the Trustee, such notice for the convenience of the Trustee) prior to redemption, by lot within each maturity in integral multiples of $5,000, on September 1, 20__ or any date thereafter, at a redemption price equal to the principal amount thereof plus accrued interest thereon to the date fixed for redemption, without premium. (b) Mandatory Sinking Fund Redemption. The Term Bonds shall be called before maturity and redeemed, from the Sinking Fund Payments that have been deposited into the Redemption Account, on September 1, 20___, and September 1, 20___, in accordance with the schedule of Sinking Fund Payments set forth below. The Term Bonds so called for redemption shall be selected by the Trustee by lot and shall be redeemed at a redemption price for each redeemed Term Bond equal to the principal amount thereof, plus accrued interest to the redemption date, without premium, as follows:
TERM BONDS MATURING SEPTEMBER 1, 20___
Redemption Date
(September 1) Principal Amount
$
*
___________
* Maturity.
If, during the Fiscal Year immediately preceding one of the redemption dates specified above, the District purchases Bonds, at least 45 days prior to the redemption date the District shall notify the Trustee as to the principal amount purchased and the amount of Bonds so purchased shall be credited at the time of purchase, to the extent of the full principal amount thereof, to reduce such upcoming Sinking Fund Payment for the Bonds so purchased. All Bonds purchased pursuant to this subsection shall be cancelled pursuant to Section 10.1.
In the event of a partial optional redemption or extraordinary redemption of the Bonds, each of the remaining Sinking Fund Payments for such Bonds, as described above, will be reduced, as nearly as practicable, on a pro rata basis, in integral multiples of $5,000, as directed by the District. (c) Extraordinary Redemption. The Bonds are subject to extraordinary redemption as a whole, or in part by lot, on any Interest Payment Date, and shall be redeemed by the Trustee, from Prepayments deposited to the Redemption Account pursuant to Section 3.5(b), plus amounts transferred from the Reserve Account pursuant to Section 3.6, among maturities as directed in 521
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writing by the District, at the following redemption prices, expressed as a percentage of the principal amount to be redeemed, together with accrued interest to the redemption date:
Redemption Date Redemption Price
Any Interest Payment Date from (and including) September 1, 20__ through (and including) March 1, 20__
___%
September 1, 20__ and March 1, 20__ ___
September 1, 20__ and March 1, 20__ ___
September 1, 20__ and any Interest Payment Date thereafter ___ The District shall notify the Trustee of any extraordinary redemption at least 45 days prior to the Interest Payment Date on which such redemption shall occur. (d) The redemption provisions for Parity Bonds shall be set forth in a Supplemental Indenture.
Section 4.2. Selection of Bonds and Parity Bonds for Redemption. If less than all of the Bonds or Parity Bonds Outstanding are to be redeemed, the portion of any Bond or Parity Bond of a denomination of more than $5,000 to be redeemed shall be in the principal amount of $5,000 or an integral multiple thereof; provided, however, that Bonds held by the Depository shall be subject to the procedures and requirements of the Depository. The Trustee shall promptly notify the District in writing of the Bonds or Parity Bonds, or portions thereof, selected for redemption.
Section 4.3. Notice of Redemption. When Bonds or Parity Bonds are due for redemption under Section 4.1 or the terms of a Supplemental Indenture, respectively, subject in the case of optional redemption to its receipt of timely notice from the District of its election to exercise optional redemption, the Trustee shall give notice, in the name of the District, of the redemption of such Bonds or Parity Bonds; provided, however, that a notice of a redemption to be made from other than from Sinking Fund Payments shall be conditioned on there being on deposit on the redemption date sufficient money to pay the redemption price of the Bonds or Parity Bonds to be redeemed. Such notice of redemption shall: (a) specify the CUSIP numbers (if any) and the maturity date or dates of the Bonds or Parity Bonds selected for redemption; (b) state the date fixed for redemption and surrender of the Bonds or Parity Bonds to be redeemed; (c) state the redemption price; (d) state the place or places where the Bonds or Parity Bonds are to be redeemed; (e) in the case of Bonds or Parity Bonds to be redeemed only in part, state the portion of such Bond or Parity Bond that is to be redeemed; (f) state the date of issue of the Bonds or Parity Bonds as originally issued; (g) state the rate of interest borne by each Bond or Parity Bond being redeemed; and (h) state any other descriptive information needed to identify accurately the Bonds or Parity Bonds being redeemed as shall be specified by the Trustee (the Trustee having no duty to state such additional descriptive information). Such notice shall further state that on the date fixed for redemption, there shall become due and payable on each Bond, Parity Bond or portion thereof called for redemption, the principal thereof, together with any premium, and interest accrued to the redemption date, and that from and after such date, interest thereon shall cease to accrue and be payable. At least 20 days but no more than 45 days prior to the redemption date, the Trustee shall mail a copy of such notice, by first class mail, postage prepaid, to the respective Owners thereof at their addresses appearing on the Bond Register. The actual receipt by the Owner of any Bond or Parity Bond or the original purchaser of any Bond or Parity Bond of notice of such redemption shall not be a condition precedent to redemption, and neither the failure to receive nor any defect in such notice shall affect the validity of 522
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the proceedings for the redemption of such Bonds or Parity Bonds, or the cessation of interest on the redemption date. A certificate by the Trustee that notice of such redemption has been given as herein provided shall be conclusive as against all parties, and the Owner shall not be entitled to show that he or she failed to receive notice of such redemption. Redemption notices may state that no representation is made as to the accuracy or correctness of the CUSIP numbers printed therein or on the Bonds.
In addition to the foregoing notice, further notice shall be given by the Trustee as set out below, but no defect in said further notice nor any failure to give all or any portion of such further notice shall in any manner defeat the effectiveness of a call for redemption if notice thereof is given as above prescribed. In addition to providing any notice of redemption to the Bondowners, if the Bonds are held in book-entry form, each further notice of redemption shall be sent not later than the date that notice of redemption is mailed to the Bondowners by registered or certified mail or overnight delivery service to the Depository and by electronic notice to the Municipal Securities Rulemaking Board.
Upon the payment of the redemption price of any Bonds and Parity Bonds being redeemed, each check or other transfer of funds issued for such purpose shall to the extent practicable bear the CUSIP number (if any) identifying, by issue and maturity, the Bonds and Parity Bonds being redeemed with the proceeds of such check or other transfer.
With respect to any notice of optional redemption or extraordinary redemption of Bonds or Parity Bonds, such notice may state that such redemption shall be conditional upon the receipt by the Trustee on or prior to the date fixed for such redemption of moneys sufficient to pay the principal of, premium, if any, and interest on such Bonds or Parity Bonds to be redeemed and that, if such moneys shall not have been so received, said notice shall be of no force and effect and the Trustee shall not be required to redeem such Bonds or Parity Bonds. In the event that such notice of redemption contains such a condition and such moneys are not so received, the redemption shall not be made, and the Trustee shall within a reasonable time thereafter give notice, in the manner in which the notice of redemption was given, that such moneys were not so received.
Section 4.4. Partial Redemption of Bonds or Parity Bonds. Upon surrender by the Owner of a Bond, at the option of such Owner, for mandatory redemption at the Principal Office of the Trustee, payment of such mandatory redemption of the principal amount of a Bond will be paid to such Owner. Upon surrender of any Bond or Parity Bond to be redeemed in part only, the District shall execute and the Trustee shall authenticate and deliver to the Bondowner, at the expense of the District, a new Bond or Bonds or a new Parity Bond or Parity Bonds of authorized denominations equal in aggregate principal amount to the unredeemed portion of the Bonds surrendered, with the same interest rate and the same maturity or, in the case of surrender of a Parity Bond, a new Parity Bond or Parity Bonds subject to the foregoing limitations. Such mandatory redemption shall be valid upon payment of the amount thereby required to be paid to such Owner, and the District and the Trustee shall be released and discharged from all liability to the extent of such payment. 523
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Section 4.5. Effect of Notice and Availability of Redemption Money. Notice of redemption having been duly given, as provided in Section 4.3, and the amount necessary for the redemption having been made available to the Trustee for that purpose and being available to the Trustee therefor on the date fixed for such redemption:
(a) the Bonds and Parity Bonds, or portions thereof, designated for redemption shall, on the date fixed for redemption, become due and payable at the redemption price thereof as provided in this Indenture or in any Supplemental Indenture with respect to any Parity Bonds, anything in this Indenture or in the Bonds or the Parity Bonds to the contrary notwithstanding; (b) upon presentation and surrender thereof at the Principal Office of the Trustee, the redemption price of such Bonds and Parity Bonds shall be paid to the Owners thereof; (c) as of the redemption date, the Bonds or the Parity Bonds, or portions thereof so designated for redemption shall be deemed to be no longer Outstanding and such Bonds or Parity Bonds, or portions thereof, shall cease to bear further interest; and (d) as of the date fixed for redemption, no Owner of any of the Bonds, Parity Bonds or portions thereof so designated for redemption shall be entitled to any of the benefits of this Indenture or any Supplemental Indenture, or to any other rights, except with respect to payment of the redemption price and interest accrued to the redemption date from the amounts so made available.
ARTICLE V
COVENANTS AND WARRANTY
Section 5.1. Security. The District shall preserve and protect the security pledged hereunder to the Bonds and any Parity Bonds against all claims and demands of all persons.
Section 5.2. Covenants. So long as any of the Bonds or Parity Bonds issued hereunder are Outstanding and unpaid, the District makes the following covenants with the Bondowners under the provisions of the Act and this Indenture (to be performed by the District or its proper officers, agents or employees), which covenants are necessary and desirable to secure the Bonds and Parity Bonds and tend to make them more marketable; provided, however, that said covenants do not require the District to expend any funds or moneys other than the Special Taxes and other amounts deposited to the Special Tax Fund:
(a) Punctual Payment; Against Encumbrances. The District covenants that it will receive all Special Taxes in trust for the Owners and will instruct the Chief Financial Officer of the City to deposit all Special Taxes with the Trustee immediately upon their apportionment to the District, and the District shall have no beneficial right or interest in the amounts so deposited except as provided by this Indenture. All such Special Taxes shall be disbursed, allocated and applied solely to the uses and purposes set forth herein, and shall be accounted for separately and apart from all other money, funds, accounts or other resources of the District.
The District covenants that it will duly and punctually pay or cause to be paid the principal of and interest on every Bond and Parity Bond issued hereunder, together with the premium, if any, thereon on the date, at the place and in the manner set forth in the Bonds and the Parity Bonds and in accordance with this Indenture to the extent that Net Taxes and other amounts pledged hereunder are 524
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available therefor, and that the payments into the funds and Accounts created hereunder will be made, all in strict conformity with the terms of the Bonds, any Parity Bonds, this Indenture and any Supplemental Indenture, and that it will faithfully observe and perform all of the conditions, covenants and requirements of this Indenture and all Supplemental Indentures and of the Bonds and any Parity Bonds issued hereunder.
The District will not mortgage or otherwise encumber, pledge or place any charge upon any of the Net Taxes except as provided in this Indenture, and will not issue any obligation or security having a lien or charge upon the Net Taxes superior to or on a parity with the Bonds, other than Parity Bonds. Nothing herein shall prevent the District from issuing or incurring indebtedness that is payable from a pledge of Net Taxes which is subordinate in all respects to the pledge of Net Taxes to repay the Bonds and the Parity Bonds.
(b) Levy of Special Tax. Beginning in Fiscal Year 2025-26 and continuing so long as any Bonds or Parity Bonds issued under this Indenture are Outstanding, the legislative body of the District covenants to levy the Special Tax in an amount sufficient, together with other amounts on deposit in the Special Tax Fund and available for such purpose, to pay: (i) the principal of and interest on the Bonds and any Parity Bonds when due; (ii) the Administrative Expenses; and (iii) any amounts required to replenish the Reserve Account of the Special Tax Fund to the Reserve Requirement. The District further covenants that it will take no actions that would discontinue or cause the discontinuance of the Special Tax levy or the District’s authority to levy the Special Tax for so long as the Bonds and any Parity Bonds are Outstanding. (c) Commence Foreclosure Proceedings. The District covenants for the benefit of the Owners of the Bonds and any Parity Bonds that it will commence judicial foreclosure proceedings against parcels with delinquent Special Taxes in excess of $10,000 by the October 1 following the close of each Fiscal Year in which such Special Taxes were due and will diligently pursue such foreclosure proceedings until the delinquent Special Taxes are paid; provided, however, that the District shall not be required to undertake any such foreclosure proceedings if: (i) the amount of Special Taxes collected by the October 1 for the most recent Fiscal Year was equal to 94% or more of the total Special Tax levied in such Fiscal Year; and (ii) the amount on deposit in the Reserve Account as of October 1 was at least equal to the Reserve Requirement.
The District or the Trustee is expressly authorized to credit bid at any foreclosure sale, without any requirement that funds be placed in the Special Tax Fund or otherwise be set aside in the amount so credit bid, in the amount specified in Section 53356.5 of the CFD Act or such lesser amount as determined in the following paragraph or otherwise under Section 53356.6 of the CFD Act. Notwithstanding anything to the contrary herein, in no event shall the Trustee be required to undertake foreclosure proceedings hereunder.
The District may permit, in its sole and absolute discretion, property with delinquent Special Tax payments to be sold for less than the amount specified in Section 53356.5 of the CFD Act, if it determines that such sale is in the interest of the Bond owners. The Bond owners, by their acceptance of the Bonds, hereby consent to such sale for such lesser amounts (as such consent is described in Section 53356.6 of the CFD Act), and release the District, its officers and its agents from any liability in connection therewith.
The District is hereby expressly authorized to use amounts in the Special Tax Fund to pay costs of foreclosure of delinquent Special Taxes.
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The District may forgive all or any portion of the Special Taxes levied or to be levied on any parcel in the District, so long as the District determines that such forgiveness is not expected to adversely affect its obligation to pay principal of and interest on the Bonds hereunder.
The District covenants that it will deposit the net proceeds of any foreclosure to the Special Tax Fund and will apply such proceeds remaining after the payment of Administrative Expenses to make current payments of principal of and interest on the Bonds and any Parity Bonds, to bring the amount on deposit in the Reserve Account, if any, up to the Reserve Requirement and to pay any delinquent installments of principal or interest due on the Bonds and any Parity Bonds. (d) Payment of Claims. The District will pay and discharge any and all lawful claims for labor, materials or supplies which, if unpaid, might become a lien or charge upon the Net Taxes or other funds in the Special Tax Fund (other than the Administrative Expenses Account therein), or which might impair the security of the Bonds or any Parity Bonds then Outstanding; provided, however, that nothing herein contained shall require the District to make any such payments so long as the District in good faith shall contest the validity of any such claims. (e) Books and Accounts. The District will keep proper books of records and accounts, separate from all other records and accounts of the District, in which complete and correct entries shall be made of all transactions relating to the Project, the levy of the Special Tax and the deposits to the Special Tax Fund. Such books of records and accounts shall at all times during business hours be subject to the inspection of the Trustee, the Owners of not less than 10% of the principal amount of the Bonds or the Owners of not less than 10% of any issue of Parity Bonds then Outstanding or their representatives authorized in writing.
(f) Federal Tax Covenants. Notwithstanding any other provision of this Indenture, absent an opinion of Bond Counsel that the exclusion from gross income of interest on the Bonds and any Parity Bonds issued on a tax-exempt basis for federal income tax purposes will not be adversely affected for federal income tax purposes, the District covenants to comply with all applicable requirements of the Code necessary to preserve such exclusion from gross income and specifically covenants, without limiting the generality of the foregoing, as follows:
(1) Private Activity. The District will take no action and will refrain from taking any action or making any use of the proceeds of the Bonds or any Parity Bonds or of any other moneys or property which would cause the Bonds or any Parity Bonds issued on a tax-exempt basis for federal income tax purposes to be “private activity bonds” within the meaning of Section 141 of the Code;
(2) Arbitrage. The District will make no use of the proceeds of the Bonds or any Parity Bonds or of any other amounts or property, regardless of the source, and will not take any action or refrain from taking any action which will cause the Bonds or any Parity Bonds issued on a tax-exempt basis for federal income tax purposes to be “arbitrage bonds” within the meaning of Section 148 of the Code;
(3) Federal Guaranty. The District will make no use of the proceeds of the Bonds or any Parity Bonds and will not take or omit to take any action that would cause the Bonds or any Parity Bonds issued on a tax-exempt basis for federal income tax purposes to be “federally guaranteed” within the meaning of Section 149(b) of the Code; 526
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(4) Information Reporting. The District will take or cause to be taken all necessary action to comply with the informational reporting requirement of Section 149(e) of the Code;
(5) Hedge Bonds. The District will make no use of the proceeds of the Bonds or any Parity Bonds or any other amounts or property, regardless of the source, and will not take any action or refrain from taking any action that would cause the Bonds or any Parity Bonds issued on a tax-exempt basis for federal income tax purposes to be considered “hedge bonds” within the meaning of Section 149(g) of the Code unless the District takes all necessary action to assure compliance with the requirements of Section 149(g) of the Code to maintain the exclusion from gross income for federal income tax purposes of interest on the Bonds and any applicable Parity Bonds; (6) Miscellaneous. The District will take no action and will refrain from taking any action inconsistent with its expectations stated in the Tax Certificate executed on the Delivery Date by the District in connection with the Bonds and any issue of Parity Bonds and will comply with the covenants and requirements stated therein and incorporated by reference herein; (7) Other Tax-Exempt Issues. The District will not use proceeds of other tax-exempt securities to redeem any Bonds or Parity Bonds without first obtaining the written opinion of Bond Counsel that doing so will not impair the exclusion from gross income for federal income tax purposes of interest on the Bonds and any Parity Bonds issued on a tax-exempt basis; and (8) Subsequent Opinions. If the District obtains a subsequent opinion of Bond Counsel other than Stradling Yocca Carlson & Rauth LLP (“SYCR”), where such opinion is required in connection with a change or amendment to this Indenture or the procedures set forth in the Tax Certificate, it will obtain an opinion substantially to the effect originally delivered by SYCR that interest on the Bonds and Parity Bonds which are the subject of such change or amendment is excluded from gross income for federal income tax purposes. (g) Reduction of Maximum Special Taxes. The District hereby finds and determines that, historically, delinquencies in the payment of special taxes authorized pursuant to the Act in community facilities districts in Southern California have from time to time been at levels that required the levy of special taxes at the maximum authorized rates in order to make timely payment of principal of and interest on the outstanding indebtedness of such community facilities districts.
For this reason, the District hereby determines that a reduction in the maximum Special Tax rates authorized to be levied on parcels in the District below the levels provided in this Section 5.2(g) would interfere with the timely retirement of the Bonds and Parity Bonds. The District determines it to be necessary in order to preserve the security for the Bonds and Parity Bonds to covenant, and, to the maximum extent that the law permits it to do so, the District hereby does covenant, that it shall not initiate proceedings to reduce the maximum Special Tax rates for the District. (h) Covenants to Defend. The District covenants that, in the event that any initiative is adopted by the qualified electors in the District which purports to reduce the maximum Special Tax below the levels specified in Section 5.2(g) above or to limit the power of the District to levy the Special Taxes for the purposes set forth in Section 5.2(b) above, it will commence and pursue legal action in order to preserve its ability to comply with such covenants. (i) Limitation on Right to Tender Bonds. The District hereby covenants that it will not adopt any policy pursuant to Section 53341.1 of the Act permitting the tender of Bonds or Parity 527
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Bonds in full payment or partial payment of any Special Taxes unless the District shall have first received a certificate from an Independent Financial Consultant that the acceptance of such a tender will not result in the District having insufficient Special Tax revenues to pay the principal of and interest on the Bonds and Parity Bonds when due.
(j) Continuing Disclosures. The District covenants to comply with the terms of the Continuing Disclosure Agreement and with the terms of any continuing disclosure agreement executed by the District with respect to any Parity Bonds in order to assist the underwriter thereof in complying with Rule 15(c)2-12 adopted by the Securities and Exchange Commission. (k) Further Assurances. The District shall make, execute and deliver any and all such further agreements, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of this Indenture and for the better assuring and confirming unto the Owners of the Bonds and any Parity Bonds of the rights and benefits provided in this Indenture.
ARTICLE VI
AMENDMENTS TO INDENTURE
Section 6.1. Supplemental Indentures or Orders Not Requiring Bondowner Consent.
The District may from time to time, and at any time, without notice to or consent of any of the Bondowners, adopt Supplemental Indentures for any of the following purposes:
(a) to cure any ambiguity, to correct or supplement any provisions herein which may be inconsistent with any other provision herein, or to make any other provision with respect to matters or questions arising under this Indenture or in any additional resolution or order, provided that such action is not materially adverse to the interests of the Bondowners, as evidenced by an opinion of Bond Counsel delivered pursuant to Section 6.3 hereunder; (b) to add to the covenants and agreements of and the limitations and the restrictions upon the District contained in this Indenture, other covenants, agreements, limitations and restrictions to be observed by the District which are not contrary to or inconsistent with this Indenture as theretofore in effect or which further secure Bond or Parity Bond payments; (c) to provide for the issuance of any Parity Bonds, and to provide the terms and conditions under which such Parity Bonds may be issued, subject to and in accordance with the provisions of this Indenture;
(d) to modify, amend or supplement this Indenture in such manner as to permit the qualification hereof under the Trust Indenture Act of 1939, as amended, or any similar federal statute hereafter in effect, or to comply with the Code or regulations issued thereunder, and to add such other terms, conditions and provisions as may be permitted by said act or similar federal statute, and which shall not materially adversely affect the interests of the Owners of the Bonds or any Parity Bonds then Outstanding, as evidenced by an opinion of Bond Counsel delivered pursuant to Section 6.3 hereunder;
(e) subject to the provisions of Section 5.2(g), to modify, alter or amend the Rate and Method in any manner so long as such changes do not reduce the maximum Special Taxes that may 528
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be levied in each year on property within the District to an amount which is less than 110% of the principal and interest due in each corresponding future Bond Year with respect to the Bonds and Parity Bonds Outstanding as of the date of such amendment; or (f) to modify, alter, amend or supplement this Indenture in any other respect which is not materially adverse to the Bondowners, as evidenced by an opinion of Bond Counsel delivered pursuant to Section 6.3 hereunder.
Section 6.2. Supplemental Indentures or Orders Requiring Bondowner Consent.
Exclusive of the Supplemental Indentures described in Section 6.1, the Owners of not less than a majority in aggregate principal amount of the Bonds and Parity Bonds Outstanding shall have the right to consent to and approve the adoption by the District of such Supplemental Indentures as shall be deemed necessary or desirable by the District for the purpose of waiving, modifying, altering, amending, adding to or rescinding, in any particular, any of the terms or provisions contained in this Indenture; provided, however, that nothing herein shall permit, or be construed as permitting: (a) an extension of the maturity date of the principal, or the payment date of interest on, any Bond or Parity Bond; (b) a reduction in the principal amount of, or redemption premium on, any Bond or Parity Bond or the rate of interest thereon; (c) a preference or priority of any Bond or Parity Bond over any other Bond or Parity Bond; or (d) a reduction in the aggregate principal amount of the Bonds and Parity Bonds the Owners of which are required to consent to such Supplemental Indenture.
If at any time the District shall desire to adopt a Supplemental Indenture, which pursuant to the terms of this Section shall require the consent of the Bondowners, the District shall so notify the Trustee and shall deliver to the Trustee a copy of the proposed Supplemental Indenture. The Trustee shall, at the expense of the District, cause notice of the proposed Supplemental Indenture to be mailed, by first class mail, postage prepaid, to all Bondowners at their addresses as they appear in the Bond Register. Such notice shall briefly set forth the nature of the proposed Supplemental Indenture and shall state that a copy thereof is on file at the Principal Office of the Trustee for inspection by all Bondowners. The failure of any Bondowners to receive such notice shall not affect the validity of such Supplemental Indenture when consented to and approved by the Owners of not less than a majority in aggregate principal amount of the Bonds and Parity Bonds Outstanding as required by this Section. Whenever at any time within one year after the date of the first mailing of such notice, the Trustee shall receive an instrument or instruments purporting to be executed by the Owners of not less than a majority in aggregate principal amount of the Bonds and Parity Bonds Outstanding, which instrument or instruments shall refer to the proposed Supplemental Indenture described in such notice, and shall specifically consent to and approve the adoption thereof by the District substantially in the form of the copy referred to in such notice as on file with the Trustee, such proposed Supplemental Indenture, when duly adopted by the District, shall thereafter become a part of the proceedings for the issuance of the Bonds and any Parity Bonds. In determining whether the Owners of a majority of the aggregate principal amount of the Bonds and Parity Bonds have consented to the adoption of any Supplemental Indenture, Bonds or Parity Bonds that are owned by the District, or by any person directly or indirectly controlling or controlled by or under the direct or indirect common control with the District, shall be disregarded and shall be treated as though they were not Outstanding for the purpose of any such determination, except that in determining whether the Trustee shall be protected in relying upon any such demand, request, direction, consent or waiver of a Bondowner, only Bonds which a Responsible Officer of the Trustee actually knows to be owned or held by or for the account of the District, or by any person directly or indirectly controlling or controlled by or under the direct or indirect common control with the District, shall be disregarded 529
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unless all Bonds are so owned or held, in which case such Bonds shall be considered Outstanding for the purpose of such determination.
Upon the adoption of any Supplemental Indenture and the receipt of consent to any such Supplemental Indenture from the Owners of not less than a majority in aggregate principal amount of the Outstanding Bonds and Parity Bonds in instances where such consent is required pursuant to the provisions of this Section, this Indenture shall be, and shall be deemed to be, modified and amended in accordance therewith, and the respective rights, duties and obligations under this Indenture of the District and all Owners of Outstanding Bonds and Parity Bonds shall thereafter be determined, exercised and enforced hereunder, subject in all respects to such modifications and amendments.
Section 6.3. Notation of Bonds or Parity Bonds; Delivery of Amended Bonds or Parity Bonds. After the effective date of any action taken as hereinabove provided, the District may determine that the Bonds or any Parity Bonds may bear a notation, by endorsement in form approved by the District, as to such action, and in that case upon demand of the Owner of any Outstanding Bond or Parity Bond at such effective date and presentation of such Owner’s Bond or Parity Bond for the purpose at the Principal Office of the Trustee or at such additional offices as the Trustee may select and designate for that purpose, a suitable notation as to such action shall be made on such Bonds or Parity Bonds. If the District shall so determine, new Bonds or Parity Bonds so modified as, in the opinion of the District, shall be necessary to conform to such action shall be prepared and executed, and in that case upon demand of the Owner of any Outstanding Bond or Parity Bond at such effective date such new Bonds or Parity Bonds shall be exchanged at the Principal Office of the Trustee or at such additional offices as the Trustee may select and designate for that purpose, without cost to each Owner of Outstanding Bonds or Parity Bonds, upon surrender of such Outstanding Bonds or Parity Bonds.
In executing, or accepting the additional trusts created by any Supplemental Indenture permitted by this Article or the modification thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive, and shall be fully protected in relying upon, an opinion of Bond Counsel stating that the execution of such Supplemental Indenture is authorized or permitted by this Indenture and complies with the terms hereof and that all conditions precedent set forth in this Indenture applicable to the adoption of such Supplemental Indenture, if any, have been satisfied. In addition, in connection with the adoption of a Supplemental Indenture pursuant to Section 6.2, the Trustee shall be entitled to receive and to rely upon an opinion or advice of counsel in determining whether such Supplemental Indenture materially adversely affects the interests of Owners of any Bonds or Parity Bonds (which opinion may rely upon such certificates, reports or other statements as such opining counsel may deem necessary). The Trustee may, but shall not be obligated to, enter into any such Supplemental Indenture which affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise.
ARTICLE VII
TRUSTEE
Section 7.1. Trustee. The Bank of New York Mellon Trust Company, N.A., shall be the Trustee for the Bonds and any Parity Bonds unless and until another Trustee is appointed by the District hereunder. The District may, at any time, appoint a successor Trustee satisfying the requirements of Section 7.2 for the purpose of receiving all money that the District is required to 530
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deposit with the Trustee hereunder and to allocate, use and apply the same as provided in this Indenture.
The Trustee shall and is hereby authorized to mail by first class mail, postage prepaid, or wire transfer in accordance with Section 2.5, interest payments to the Bondowners, to select Bonds and Parity Bonds for redemption and to maintain the Bond Register. The Trustee is hereby authorized to pay the principal of and premium, if any, on the Bonds and Parity Bonds when the same are duly presented to it for payment at maturity or on call and redemption, to provide for the registration of transfer and exchange of Bonds and Parity Bonds presented to it for such purposes, to provide for the cancellation of Bonds and Parity Bonds and to provide for the authentication of Bonds and Parity Bonds and shall perform all other duties assigned to or imposed on it as provided in this Indenture.
The Trustee shall keep accurate records of all funds administered by it and all Bonds and Parity Bonds paid, discharged and cancelled by it.
The Trustee is hereby authorized to redeem the Bonds and Parity Bonds when duly presented for payment at maturity, or on redemption prior to maturity. The Trustee shall cancel all Bonds and Parity Bonds upon payment thereof in accordance with the provisions of Section 10.1.
The District shall from time to time, subject to any agreement between the District and the Trustee then in force, pay to the Trustee compensation for its services, reimburse the Trustee for all of its advances and expenditures, including, but not limited to, advances to and fees, costs and expenses of independent accountants or counsel employed by it in the exercise and performance of its powers and duties hereunder and indemnify and save the Trustee, its officers, directors, employees and agents, harmless from and against any losses, costs, claims, expenses, judgments, damages, suits and liabilities, including, without limitation, fees and expenses of its attorneys, not arising from its own negligence or willful misconduct, in connection with the acceptance or administration of the trust or trusts hereunder, including the costs and expenses of defending itself against any claim (except claims asserted by the District) or liability in connection with the exercise or performance of any of its powers and duties hereunder or under any documents or transactions contemplated or executed in connection herewith. The foregoing obligation of the District to indemnify the Trustee shall survive the removal or resignation of the Trustee or the discharge of the Bonds.
When the Trustee incurs expenses or renders services after the occurrence of an Event of Default, such expenses and the compensation for such services are intended to constitute expenses of administration under any federal or state bankruptcy, insolvency, arrangement, moratorium, reorganization or other debtor relief law. Upon an Event of Default, and only upon an Event of Default, the Trustee shall have a first lien with right of payment prior to payment on account of principal of and premium, if any, and interest on any Bond, upon the trust estate for the foregoing fees, charges and expenses incurred by it.
Section 7.2. Removal of Trustee. The District may at any time at its sole discretion, and shall at the direction of a majority of the Owners, remove the Trustee initially appointed, and any successor thereto, by delivering to the Trustee a 30-day written notice of its decision to remove the Trustee. The District shall appoint a successor or successors thereto, provided that any such successor shall be a bank, national banking association or trust company having a combined capital (exclusive of borrowed capital) and surplus of at least $250,000,000, and subject to supervision or examination by federal or state authority. If any bank, national banking association or trust company appointed as a successor publishes a report of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority above referred to, then for the purposes of 531
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this Section the combined capital and surplus of such bank, national banking association or trust company shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. Any removal of the Trustee and appointment of a successor Trustee shall become effective only upon acceptance of appointment by the successor Trustee and notice being sent by the successor Trustee to the Bondowners of the successor Trustee’s identity and address. The predecessor Trustee shall be and remain entitled to payment in full of the amounts owing to it hereunder.
Section 7.3. Resignation of Trustee. The Trustee may at any time resign by giving written notice to the District and by giving to the Owners notice of such resignation, which notice shall be mailed to the Owners at their addresses appearing in the registration books at the Principal Office of the Trustee. Upon receiving such notice of resignation, the District shall promptly appoint a successor Trustee satisfying the criteria in Section 7.2 by an instrument in writing. Any resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon acceptance of appointment by the successor Trustee. If no successor Trustee shall have been appointed and have accepted appointment within 45 days of giving notice of removal or notice of resignation as aforesaid, the resigning Trustee or any Bondowner (on behalf of itself and all other Bondowners) may petition any court of competent jurisdiction, at the expense of the District, for the appointment of a successor Trustee, and such court may thereupon, after such notice (if any) as it may deem proper, appoint such successor Trustee. The Trustee shall be paid in full for any fees and expense owing to it prior to or contemporaneously with the signing of any instrument or agreement to effect the transfer to a successor Trustee.
Section 7.4. Liability of Trustee. The recitals of fact and all promises, covenants and agreements contained herein and in the Bonds and any Parity Bonds shall be taken as statements, promises, covenants and agreements of the District, and the Trustee assumes no responsibility for the correctness of the same and makes no representations as to the validity or sufficiency of this Indenture, the Bonds or any Parity Bonds, and shall incur no responsibility in respect thereof, other than in connection with its duties or obligations specifically set forth herein, in the Bonds and any Parity Bonds, or in the certificate of authentication assigned to or imposed upon the Trustee. The Trustee shall be under no responsibility or duty with respect to the issuance of the Bonds or any Parity Bonds for value. The Trustee shall not be liable in connection with the performance of its duties hereunder, except for its own negligence or willful misconduct. The Trustee shall not be accountable for the use of any proceeds of sale of the Bonds delivered hereunder.
The Trustee shall be protected in relying and acting or refraining from acting upon any notice, resolution, request, consent, order, certificate, statement, requisition, report, Bond, Parity Bond, electronic mail, or other evidence of indebtedness or other paper or document reasonably believed by it to be genuine and correct and to have been signed or presented by the proper party or parties, and shall not be obliged to make any investigation into the facts or matters stated therein.
The Trustee may consult with counsel, who may be counsel to the District, with regard to legal questions, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered hereunder in good faith and in accordance therewith.
The Trustee shall not be bound to recognize any person as the Owner of a Bond or Parity Bond unless and until such Bond or Parity Bond is submitted for inspection, if required, and title thereto is satisfactorily established, if disputed.
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Whenever in the administration of its duties under this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such matter (unless other evidence in respect thereof is specifically prescribed herein) may, in the absence of bad faith on the part of the Trustee, be deemed to be conclusively proved and established by a written certificate of the District, and such certificate shall be full warrant to the Trustee for any action taken or suffered under the provisions of this Indenture upon the faith thereof, but in its discretion the Trustee may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as to it may seem reasonable.
The Trustee shall have no duty or obligation whatsoever to enforce the collection of Special Taxes or other funds to be deposited with it hereunder, or as to the correctness of any amounts received, but its liability shall be limited to the proper accounting for such funds as it shall actually receive. No provision in this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of its rights or powers. The Trustee may refuse to perform any duty or exercise any right or power which would require it to expend its own funds or risk any liability if it shall reasonably believe that repayment of such funds or adequate indemnity against such risk is not reasonably assured to it.
The Trustee shall not be deemed to have knowledge of any default or Event of Default until a Responsible Officer shall have actual knowledge thereof or the Trustee shall have received written notice thereof at the Principal Office of the Trustee.
The Trustee shall not be considered in breach of or in default in its obligations hereunder or liable for any failure in or progress in respect thereto in the event of enforced delay in the performance of such obligations due to unforeseeable causes beyond its control and without its fault or negligence, including, but not limited to, acts of God or of the public enemy or terrorists, acts of a government, acts of the other party, fires, floods, epidemics, pandemics, quarantine restrictions, acts of civil or military authority, strikes, freight embargoes, earthquakes, explosion, mob violence, riot, inability to procure or general sabotage or rationing of labor, equipment, facilities, sources of energy, material or supplies in the open market, litigation or arbitration involving a party or others relating to zoning or other governmental action or inaction pertaining, malicious mischief, condemnation, and unusually severe weather or delays of suppliers or subcontractors due to such causes or any similar event and/or occurrences beyond the control of the Trustee.
The Trustee shall not be liable for action taken or omitted to be taken by it in good faith pursuant to and in accordance with the direction of Owners of Bonds or Parity Bonds in aggregate principal amount of the requisite percentage or the District pursuant to and in accordance with any provision contained in this Indenture that permits such party so to direct the Trustee.
In no event shall the Trustee be responsible or liable for special, punitive, indirect or consequential loss or damages of any kind (including but not limited to loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.
The Trustee shall have the right to accept and act upon instructions, including funds transfer instructions (“Instructions”) given pursuant to this Indenture and delivered using Electronic Means. (“Electronic Means” shall mean the following communications methods: e-mail, secure electronic transmission containing applicable authorization codes, passwords and/or authentication keys issued 533
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by the Trustee, or another method or system specified by the Trustee as available for use in connection with its services hereunder); provided, however, that the District shall provide to the Trustee an incumbency certificate listing officers with the authority to provide such Instructions (“Authorized Officers”) and containing specimen signatures of such Authorized Officers, which incumbency certificate shall be amended by the District whenever a person is to be added or deleted from the listing. If the District elects to give the Trustee Instructions using Electronic Means and the Trustee in its discretion elects to act upon such Instructions, the Trustee’s reasonable understanding of such Instructions shall be deemed controlling. The District understands and agrees that the Trustee cannot determine the identity of the actual sender of such Instructions and that the Trustee shall conclusively presume that directions that purport to have been sent by an Authorized Officer listed on the incumbency certificate provided to the Trustee have been sent by such Authorized Officer. The District shall be responsible for ensuring that only Authorized Officers transmit such Instructions to the Trustee and that the District and all Authorized Officers are solely responsible to safeguard the use and confidentiality of applicable user and authorization codes, passwords and/or authentication keys upon receipt by the District. The Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly from the Trustee’s reliance upon and compliance with such Instructions notwithstanding the fact that such directions conflict or are inconsistent with a subsequent written instruction. The District agrees: (i) to assume all risks arising out of the use of Electronic Means to submit Instructions to the Trustee, including without limitation the risk of the Trustee acting on unauthorized Instructions, and the risk of interception and misuse by third parties; (ii) that it is fully informed of the protections and risks associated with the various methods of transmitting Instructions to the Trustee and that there may be more secure methods of transmitting Instructions than the method(s) selected by the District; (iii) that the security procedures (if any) to be followed in connection with its transmission of Instructions provide to it a commercially reasonable degree of protection in light of its particular needs and circumstances; and (iv) to notify the Trustee immediately upon learning of any compromise or unauthorized use of the security procedures.
The permissive right of the Trustee to do things enumerated in this Indenture shall not be construed as a duty and it shall not be answerable for other than its negligence or willful misconduct.
All immunities, indemnifications and releases from liability granted herein to the Trustee will extend to the directors, employees, officers and agents thereof.
The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request, order or direction of any of the Owners pursuant to the provisions of this Indenture unless such Owners shall have offered to the Trustee security or indemnity reasonably satisfactory to the Trustee against the costs, expenses and liabilities (including but not limited to attorneys’ fees and expenses) which may be incurred therein or thereby.
The Trustee shall not be responsible for or accountable to anyone for the subsequent use or application of any moneys which shall be released or withdrawn in accordance with the provisions hereof.
The Trustee may execute any of the trusts or powers hereof and perform the duties required of it hereunder either directly or by or through attorneys, agents, custodians or nominees appointed with due care and the Trustee shall not be liable for the acts or omissions of such attorneys, agents, custodians or nominees appointed with due care, and shall be entitled to rely on advice of counsel concerning all matters of trust and its rights and duties hereunder. 534
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The Trustee, prior to the occurrence of an Event of Default and after the curing of all Events of Default which may have occurred, undertakes to perform such duties and only such duties as are specifically set forth in this Indenture. In case an Event of Default has occurred (which has not been cured) the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of his own affairs.
The Trustee shall have no responsibility or liability with respect to any information, statements or recital in any offering memorandum or other disclosure material prepared or distributed with respect to the issuance of these Bonds.
The Trustee shall not be required to determine the suitability or legality of any investments, and may rely on the investment directions of the District as to both the suitability and legality of the directed investments.
Section 7.5. Merger or Consolidation. Any bank, corporation, association or company into which the Trustee may be merged or converted or with which it may be consolidated or any bank corporation, association or company resulting from any merger, conversion or consolidation to which it shall be a party or any bank, corporation, association or company to which the Trustee may sell or transfer all or substantially all of its corporate trust business, shall be the successor to the Trustee without the execution or filing of any paper or further act, anything herein to the contrary notwithstanding.
ARTICLE VIII
EVENTS OF DEFAULT; REMEDIES
Section 8.1. Events of Default. Any one or more of the following events shall constitute an “Event of Default”:
(a) default in the due and punctual payment of the principal of or redemption premium, if any, on any Bond or Parity Bond when and as the same shall become due and payable, whether at maturity as therein expressed, by declaration or otherwise; (b) default in the due and punctual payment of the interest on any Bond or Parity Bond when and as the same shall become due and payable; or
(c) except as described in subsections (a) or (b), default by the District in the observance of any of the agreements, conditions or covenants on its part contained in this Indenture, the Bonds or any Parity Bonds, and such default shall have continued for a period of 30 days after the District shall have been given notice in writing of such default by the Trustee or the Owners of 25% in aggregate principal amount of the Outstanding Bonds and Parity Bonds; provided, however, that such default shall not constitute an Event of Default hereunder if the District shall commence to cure such default within said 30-day period and thereafter diligently and in good faith proceed to cure such default within a reasonable period of time not to exceed 90 days after such notice; or The Trustee agrees to give notice to the Owners as soon as practicable upon the occurrence of an Event of Default under subsections (a) or (b) above and within 30 days of a Responsible Officer’s knowledge of an Event of Default under subsection (c) above. 535
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Section 8.2. Remedies of Owners. Upon the occurrence of an Event of Default, subject to the provisions of Section 8.9, the Trustee may pursue any available remedy at law or in equity to enforce the payment of the principal of, premium, if any, and interest on the Outstanding Bonds and Parity Bonds, and to enforce any rights of the Trustee under or with respect to this Indenture, including:
(a) by mandamus or other suit or proceeding at law or in equity to enforce the Trustee’s rights against the District and any of the members, officers and employees of the District, and to compel the District or any such members, officers or employees to perform and carry out their duties under the Act and their agreements with the Owners as provided in this Indenture; (b) by suit in equity to enjoin any actions or things which are unlawful or violate the rights of the Owners; or
(c) by a suit in equity to require the District and its members, officers and employees to account as the trustee of an express trust.
If an Event of Default shall have occurred and be continuing and if requested so to do by the Owners of at least twenty-five percent (25%) in aggregate principal amount of Outstanding Bonds and Parity Bonds and if indemnified to its satisfaction, the Trustee shall be obligated to exercise such one or more of the rights and powers conferred by this Article VIII, as the Trustee, being advised by counsel, shall deem most expedient in the interests of the Owners of the Bonds and Parity Bonds; provided that such request is in accordance with law and the provisions hereof and, in the sole judgment of the Trustee, is not unduly prejudicial to the interest of the Owners of Bonds or Parity Bonds not making such request (the Trustee having no duty to make such determination or judgment).
No remedy herein conferred upon or reserved to the Trustee or to the Owners is intended to be exclusive of any other remedy. Every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing, at law or in equity or by statute or otherwise, and may be exercised without exhausting and without regard to any other remedy conferred by the Act or any other law.
Nothing herein shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Owner any plan of reorganization, arrangement, adjustment, or composition affecting the Bonds or the rights of any Owner thereof, or to authorize the Trustee to vote in respect of the claim of any Owner in any such proceeding without the approval of the Owner so affected.
Section 8.3. Application of Revenues and Other Funds After Default. Subject to the provisions of Section 8.9, all amounts received by the Trustee pursuant to any right given or action taken by the Trustee under the provisions of this Indenture relating to the Bonds and Parity Bonds shall be applied by the Trustee in the following order:
First, to the payment or reimbursement of the fees, costs, advances, charges, disbursements and expenses of the Trustee in declaring such Event of Default and in carrying out the provisions of this Article VIII, including reasonable compensation to its agents, attorneys and counsel, and to the payment of all other outstanding fees and expenses of the Trustee; and 536
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Second, upon presentation of the several Bonds and Parity Bonds, to the payment of the whole amount of interest on and principal of the Bonds and Parity Bonds then due and unpaid, with interest on overdue installments of principal and interest to the extent permitted by law at the net effective rate of interest then borne by the Outstanding Bonds and Parity Bonds; provided, however, that in the event that such amounts shall be insufficient to pay the full amount of such interest and principal, then such amounts shall be applied in the following order of priority:
(a) first to the payment of all installments of interest on the Bonds and Parity Bonds then due and unpaid on a pro rata basis based on the total amount then due and owing, (b) second, to the payment of all installments of principal, including Sinking Fund Payments, of the Bonds and Parity Bonds then due and unpaid on a pro rata basis based on the total amount then due and owing; and
(c) third, to the payment of interest on overdue installments of principal and interest on the Bonds and Parity Bonds on a pro rata basis based on the total amount then due and owing.
Section 8.4. Power of Trustee to Control Proceedings. In the event that the Trustee, upon the happening of an Event of Default, shall have taken any action, by judicial proceedings or otherwise, pursuant to its duties hereunder, whether upon its own discretion or upon the request of the Owners of twenty-five percent (25%) in aggregate principal amount of the Bonds and Parity Bonds then Outstanding, it shall have full power, in the exercise of its discretion for the best interests of the Owners of the Bonds and Parity Bonds, with respect to the continuance, discontinuance, withdrawal, compromise, settlement or other disposal of such action; provided, however, that the Trustee shall not, unless there no longer continues an Event of Default, discontinue, withdraw, compromise or settle, or otherwise dispose of any litigation pending at law or in equity, if at the time there has been filed with it a written request signed by the Owners of a majority in aggregate principal amount of the Outstanding Bonds and Parity Bonds hereunder opposing such discontinuance, withdrawal, compromise, settlement or other such litigation. Any suit, action or proceeding that any Owner of Bonds or Parity Bonds shall have the right to bring to enforce any right or remedy hereunder may be brought by the Trustee for the equal benefit and protection of all Owners of Bonds and Parity Bonds similarly situated and the Trustee is hereby appointed (and the successive respective Owners of the Bonds and Parity Bonds issued hereunder, by taking and holding the same, shall be conclusively deemed so to have appointed it) the true and lawful attorney in fact of the respective Owners of the Bonds and Parity Bonds for the purposes of bringing any such suit, action or proceeding and to do and perform any and all acts and things for and on behalf of the respective Owners of the Bonds and Parity Bonds as a class or classes, as may be necessary or advisable in the opinion of the Trustee as such attorney-in-fact.
Section 8.5. Appointment of Receivers. Upon the occurrence of an Event of Default hereunder, and upon the filing of a suit or other commencement of judicial proceedings to enforce the rights of the Trustee and of the Owners of the Bonds and Parity Bonds under this Indenture, the Trustee shall be entitled, as a matter of right, to the appointment of a receiver or receivers of the Net Taxes and other amounts pledged hereunder, pending such proceedings, with such powers as the court making such appointment shall confer.
Section 8.6. Non-Waiver. Nothing in this Article VIII or in any other provision of this Indenture, or in the Bonds or the Parity Bonds, shall affect or impair the obligation of the District, 537
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which is absolute and unconditional, to pay the interest on and principal of the Bonds and Parity Bonds to the respective Owners of the Bonds and Parity Bonds at the respective dates of maturity, as herein provided, out of the Net Taxes and other moneys herein pledged for such payment.
A waiver of any default or breach of duty or contract by the Trustee or any Owners shall not affect any subsequent default or breach of duty or contract, or impair any rights or remedies on any such subsequent default or breach. No delay or omission of the Trustee or any Owner of any of the Bonds or Parity Bonds to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default or an acquiescence therein; and every power and remedy conferred upon the Trustee or the Owners by the Act or by this Article VIII may be enforced and exercised from time to time and as often as shall be deemed expedient by the Trustee or the Owners, as the case may be.
Section 8.7. Limitations on Rights and Remedies of Owners. No Owner of any Bond or Parity Bond issued hereunder shall have the right to institute any suit, action or proceeding at law or in equity, for any remedy under or upon this Indenture, unless: (a) such Owner shall have previously given to the Trustee written notice of the occurrence of an Event of Default; (b) the Owners of a majority in aggregate principal amount of all the Bonds and Parity Bonds then Outstanding shall have made written request upon the Trustee to exercise the powers hereinbefore granted or to institute such action, suit or proceeding in its own name; (c) said Owners shall have tendered to the Trustee indemnity reasonably acceptable to the Trustee against the costs, expenses and liabilities to be incurred in compliance with such request (including but not limited to attorneys’ fees and costs); and (d) the Trustee shall have refused or omitted to comply with such request for a period of sixty (60) days after such written request shall have been received by, and said tender of indemnity shall have been made to, the Trustee.
Such notification, request, tender of indemnity and refusal or omission are hereby declared, in every case, to be conditions precedent to the exercise by any Owner of Bonds and Parity Bonds of any remedy hereunder; it being understood and intended that no one or more Owners of Bonds and Parity Bonds shall have any right in any manner whatever by their action to enforce any right under this Indenture, except in the manner herein provided, and that all proceedings at law or in equity to enforce any provision of this Indenture shall be instituted, had and maintained in the manner herein provided and for the equal benefit of all Owners of the Outstanding Bonds and Parity Bonds.
The right of any Owner of any Bond and Parity Bond to receive payment of the principal of and interest and premium (if any) on such Bond and Parity Bond as herein provided or to institute suit for the enforcement of any such payment, shall not be impaired or affected without the written consent of such Owner, notwithstanding the foregoing provisions of this Section or any other provision of this Indenture.
Section 8.8. Termination of Proceedings. In case the Trustee shall have proceeded to enforce any right under this Indenture by the appointment of a receiver or otherwise, and such proceedings shall have been discontinued or abandoned for any reason, or shall have been determined adversely, then and in every such case, the District, the Trustee and the Owners shall be restored to their former positions and rights hereunder, respectively, with regard to the property subject to this Indenture, and all rights, remedies and powers of the Trustee shall continue as if no such proceedings had been taken.
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ARTICLE IX
DEFEASANCE AND PARITY BONDS
Section 9.1. Defeasance. If the District shall pay or cause to be paid, or there shall otherwise be paid, to the Owner of an Outstanding Bond or Parity Bond the interest due thereon and the principal thereof, at the times and in the manner stipulated in this Indenture or any Supplemental Indenture, then the Owner of such Bond or Parity Bond shall cease to be entitled to the pledge of Net Taxes, and, other than as set forth below, all covenants, agreements and other obligations of the District to the Owner of such Bond or Parity Bond under this Indenture and any Supplemental Indenture relating to such Parity Bond shall thereupon cease, terminate and become void and be discharged and satisfied. In the event of a defeasance of all Outstanding Bonds and Parity Bonds pursuant to this Section, the Trustee shall execute and deliver to the District all such instruments as may be desirable to evidence such discharge and satisfaction, and the Trustee shall pay over or deliver to the District’s general fund all money or securities held by it pursuant to this Indenture which are not required for the payment of the principal of, premium, if any, and interest due on such Bonds and Parity Bonds.
Any Outstanding Bond or Parity Bond shall be deemed to have been paid within the meaning expressed in the first paragraph of this Section if such Bond or Parity Bond is paid in any one or more of the following ways:
(a) by paying or causing to be paid the principal of, premium, if any, and interest on such Bond or Parity Bond, as and when the same become due and payable; (b) by depositing with the Trustee, in trust, at or before maturity, money which, together with the amounts then on deposit in the Special Tax Fund (exclusive of the Administrative Expenses Account) and available for such purpose, is fully sufficient to pay the principal of, premium, if any, and interest on such Bond or Parity Bond, as and when the same shall become due and payable; or (c) by depositing with the Trustee or another escrow bank appointed by the District, in trust, Federal Securities, in which the District may lawfully invest its money, in such amount as will be sufficient, together with the interest to accrue thereon and moneys then on deposit in the Special Tax Fund (exclusive of the Administrative Expenses Account) and available for such purpose, together with the interest to accrue thereon, to pay and discharge the principal of, premium, if any, and interest on such Bond or Parity Bond, as and when the same shall become due and payable.
If paid as provided above, then, at the election of the District, and notwithstanding that any Outstanding Bonds and Parity Bonds shall not have been surrendered for payment, all obligations of the District under this Indenture and any Supplemental Indenture with respect to such Bond or Parity Bond shall cease and terminate, except for the obligation of the Trustee to pay or cause to be paid to the Owners of any such Bond or Parity Bond not so surrendered and paid, all sums due thereon and except for the covenants of the District contained in Section 5.2(f) or any covenants in a Supplemental Indenture relating to compliance with the Code. Notice of such election shall be filed with the Trustee not less than ten days prior to the proposed defeasance date, or such shorter period of time as may be acceptable to the Trustee.
Upon a defeasance, the Trustee, upon request of the District, shall release the rights of the Owners of such Bonds and Parity Bonds that have been defeased under this Indenture and any 539
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Supplemental Indenture and execute and deliver to the District all such instruments as may be desirable to evidence such release, discharge and satisfaction. In the case of a defeasance hereunder of all Outstanding Bonds and Parity Bonds, the Trustee shall pay over or deliver to the District any funds held by the Trustee at the time of a defeasance that are not required for the purpose of paying and discharging the principal of or interest on the Bonds and Parity Bonds when due. The Trustee shall, at the written direction of the District, mail, first class, postage prepaid, a notice to the Bondowners whose Bonds or Parity Bonds have been defeased, in the form directed by the District, stating that the defeasance has occurred.
Section 9.2. Conditions for the Issuance of Parity Bonds and Other Additional Indebtedness. The District may at any time after the issuance and delivery of the Bonds hereunder issue Parity Bonds payable from the Net Taxes and other amounts deposited in the Special Tax Fund (other than in the Administrative Expenses Account therein) and secured by a lien and charge upon such amounts equal to the lien and charge securing the Outstanding Bonds and any other Parity Bonds theretofore issued hereunder or under any Supplemental Indenture; provided, however, that Parity Bonds may only be issued for the purpose of refunding all or a portion of the Bonds or any Parity Bonds then Outstanding. Parity Bonds may be issued subject to the following additional specific conditions, which are hereby made conditions precedent to the issuance of any such Parity Bonds:
(a) The District shall be in compliance with all covenants set forth in this Indenture and any Supplemental Indenture then in effect, and a certificate of the District to that effect shall have been filed with the Trustee; provided, however, that Parity Bonds may be issued notwithstanding the fact that the District is not in compliance with all such covenants so long as immediately following the issuance of such Parity Bonds the District will be in compliance with all such covenants. (b) The issuance of such Parity Bonds shall have been duly authorized pursuant to the Act and all applicable laws, and the issuance of such Parity Bonds shall have been provided for by a Supplemental Indenture duly adopted by the District which shall specify the following:
(1) the purpose for which such Parity Bonds are to be issued and the fund or funds into which the proceeds thereof are to be deposited, including a provision requiring the proceeds of such Parity Bonds to be applied solely for the purpose of refunding any Outstanding Bonds or Parity Bonds, including payment of all costs and the funding of all reserves incidental to or connected with such refunding;
(2) the authorized principal amount of such Parity Bonds; (3) the date and the maturity date or dates of such Parity Bonds; provided that:
(i) each maturity date shall fall on a September 1; (ii) all such Parity Bonds of like maturity shall be identical in all respects, except as to number; and (iii) fixed serial maturities or Sinking Fund Payments, or any combination thereof, shall be established to provide for the retirement of all such Parity Bonds on or before their respective maturity dates; (4) the description of the Parity Bonds, the place of payment thereof and the procedure for execution and authentication;
(5) the denominations and method of numbering of such Parity Bonds; 540
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(6) the amount and due date of each mandatory Sinking Fund Payment, if any, for such Parity Bonds;
(7) the amount, if any, to be deposited from the proceeds of such Parity Bonds in the Reserve Account of the Special Tax Fund to increase the amount therein to the Reserve Requirement;
(8) the form of such Parity Bonds; and
(9) such other provisions as are necessary or appropriate and not inconsistent with this Indenture.
(c) The Trustee shall have received the following documents or money or securities, all of such documents dated or certified, as the case may be, as of the Delivery Date of such Parity Bonds by the Trustee (unless the Trustee shall accept any of such documents bearing a prior date, which it shall not be liable hereunder for so accepting):
(1) a certified copy of the Supplemental Indenture authorizing the issuance of such Parity Bonds;
(2) a written request of the District as to the delivery of such Parity Bonds; (3) an opinion of Bond Counsel to the effect that: (i) the District has the right and power under the Act to adopt this Indenture and the Supplemental Indentures relating to such Parity Bonds, and this Indenture and all such Supplemental Indentures have been duly and lawfully adopted by the District, are in full force and effect and are valid and binding upon the District and enforceable in accordance with their terms (except as enforcement may be limited by bankruptcy, insolvency, reorganization and other similar laws relating to the enforcement of creditors’ rights); (ii) this Indenture creates the valid pledge which it purports to create of the Net Taxes and other amounts as provided in this Indenture, subject to the application thereof to the purposes and on the conditions permitted by this Indenture; and (iii) such Parity Bonds are valid and binding limited obligations of the District, enforceable in accordance with their terms (except as enforcement may be limited by bankruptcy, insolvency, reorganization and other similar laws relating to the enforcement of creditors’ rights) and the terms of this Indenture and all Supplemental Indentures thereto and entitled to the benefits of this Indenture and all such Supplemental Indentures, and such Parity Bonds have been duly and validly authorized and issued in accordance with the Act (or other applicable laws) and this Indenture and all such Supplemental Indentures; and a further opinion of Bond Counsel to the effect that, assuming compliance by the District with certain tax covenants, the issuance of the Parity Bonds will not adversely affect the exclusion from gross income for federal income tax purposes of interest on the Bonds and any Parity Bonds theretofore issued on a tax-exempt basis, or the exemption from State of California personal income taxation of interest on any Outstanding Bonds and Parity Bonds theretofore issued;
(4) a certificate of the District containing such statements as may be reasonably necessary to show compliance with the requirements of this Indenture, including a statement that all requirements under this Section 9.2 have been complied with; (5) a certificate of an Independent Financial Consultant certifying that in each Bond Year the Annual Debt Service on the Bonds and Parity Bonds to remain Outstanding following 541
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the issuance of the Parity Bonds proposed to be issued is less than the Annual Debt Service on the Bonds and Parity Bonds Outstanding prior to the issuance of such Parity Bonds; and (6) such further documents, money and securities as are required by the provisions of this Indenture and the Supplemental Indenture providing for the issuance of such Parity Bonds.
ARTICLE X
MISCELLANEOUS
Section 10.1. Cancellation of Bonds and Parity Bonds. All Bonds and Parity Bonds surrendered to the Trustee for payment upon maturity or for redemption shall be upon payment therefor, and any Bond or Parity Bond purchased by the District as authorized herein and delivered to the Trustee for such purpose shall be, cancelled forthwith and shall not be reissued. The Trustee shall destroy such Bonds and Parity Bonds, as provided by law, and, upon request of the District, furnish to the District a certificate of such destruction.
Section 10.2. Execution of Documents and Proof of Ownership. Any request, direction, consent, revocation of consent, or other instrument in writing required or permitted by this Indenture to be signed or executed by Bondowners may be in any number of concurrent instruments of similar tenor and may be signed or executed by such Owners in person or by their attorneys appointed by an instrument in writing for that purpose, or by the bank, trust company or other depository for such Bonds. Proof of the execution of any such instrument, or of any instrument appointing any such attorney, and of the ownership of Bonds or Parity Bonds shall be sufficient for the purposes of this Indenture (except as otherwise herein provided), if made in the following manner:
(a) The fact and date of the execution by any Owner or his or her attorney of any such instrument and of any instrument appointing any such attorney, may be proved by a signature guarantee of any bank or trust company located within the United States of America. Where any such instrument is executed by an officer of a corporation or association or a member of a partnership on behalf of such corporation, association or partnership, such signature guarantee shall also constitute sufficient proof of his authority.
(b) As to any Bond or Parity Bond, the person in whose name the same shall be registered in the Bond Register shall be deemed and regarded as the absolute owner thereof for all purposes, and payment of or on account of the principal of any such Bond or Parity Bond, and the interest thereon, shall be made only to or upon the order of the registered Owner thereof or his or her legal representative. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Bond or Parity Bond and the interest thereon to the extent of the sum or sums to be paid. Neither the District nor the Trustee shall be affected by any notice to the contrary.
Nothing contained in this Indenture shall be construed as limiting the Trustee or the District to such proof, it being intended that the Trustee or the District may accept any other evidence of the matters herein stated which the Trustee or the District may deem sufficient. Any request or consent of the Owner of any Bond or Parity Bond shall bind every future Owner of the same Bond or Parity Bond in respect of anything done or suffered to be done by the Trustee or the District in pursuance of such request or consent.
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Section 10.3. Unclaimed Moneys. Anything in this Indenture to the contrary notwithstanding, any money held by the Trustee in trust for the payment and discharge of any of the Outstanding Bonds and Parity Bonds that remains unclaimed for two years after the date when such Outstanding Bonds or Parity Bonds have become due and payable, if such money was held by the Trustee at such date, or for two years after the date of deposit of such money if deposited with the Trustee after the date when such Outstanding Bonds or Parity Bonds become due and payable, shall be repaid by the Trustee to the District (without liability for interest), as its absolute property free from trust, and the Trustee shall thereupon be released and discharged with respect thereto and the Owners shall look only to the District for the payment of such Outstanding Bonds or Parity Bonds; provided, however, that, before being required to make any such payment to the District, the Trustee, at the expense of the District, shall cause to be mailed by first-class mail, postage prepaid, to the registered Owners of such Outstanding Bonds or Parity Bonds at their addresses as they appear on the registration books of the Trustee a notice that said money remains unclaimed and that, after a date named in said notice, which date shall not be less than 30 days after the date of the mailing of such notice, the balance of such money then unclaimed will be returned to the District. Any money held by the Trustee pursuant to this paragraph shall be held uninvested and without liability for interest.
Section 10.4. Provisions Constitute Contract. The provisions of this Indenture shall constitute a contract between the District and the Bondowners and the provisions hereof shall be construed in accordance with the laws of the State of California.
In case any suit, action or proceeding to enforce any right or exercise any remedy shall be brought or taken and, should said suit, action or proceeding be abandoned, or be determined adversely to the Bondowners or the Trustee, then the District, the Trustee and the Bondowners shall be restored to their former positions, rights and remedies as if such suit, action or proceeding had not been brought or taken.
After the issuance and delivery of the Bonds, this Indenture shall be irrepealable, but shall be subject to modifications to the extent and in the manner provided in this Indenture, but to no greater extent and in no other manner.
Section 10.5. Future Contracts. Nothing herein contained shall be deemed to restrict or prohibit the District from making contracts or creating bonded or other indebtedness payable from a pledge of the Net Taxes which is subordinate to the pledge hereunder, or which is payable from the general fund of the District or from taxes or any source other than the Net Taxes and other amounts pledged hereunder.
Section 10.6. Further Assurances. The District will adopt, make, execute and deliver any and all such further resolutions, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of this Indenture, and for the better assuring and confirming unto the Owners of the Bonds or any Parity Bonds the rights and benefits provided in this Indenture.
Section 10.7. Severability. If any covenant, agreement or provision, or any portion thereof, contained in this Indenture, or the application thereof to any person or circumstance, is held to be unconstitutional, invalid or unenforceable, the remainder of this Indenture and the application of any such covenant, agreement or provision, or portion thereof, to other persons or circumstances, shall be deemed severable and shall not be affected thereby, and this Indenture, the Bonds and any 543
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Parity Bonds issued pursuant hereto shall remain valid and the Bondowners shall retain all valid rights and benefits accorded to them under the laws of the State of California.
Section 10.8. Notices. Any notices required to be given to the District with respect to the Bonds or this Indenture shall be mailed, first class, postage prepaid, or personally delivered to the Chief Financial Officer of the City, 910 Calle Negocio, San Clemente, California 92673, and all notices to the Trustee in its capacity as Trustee shall be mailed, first class, postage prepaid, or personally delivered to The Bank of New York Mellon Trust Company, N.A., 333 South Hope Street, Suite 2525, Los Angeles, California 90071; Attention: Corporate Trust Department.
Section 10.9. Execution in Several Counterparts. This Indenture may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original; and all such counterparts, or as many of them as the District and the Trustee shall preserve undestroyed, shall together constitute but one and the same instrument. Each counterpart of this Indenture may be executed and delivered by electronic means, including by electronic transmission or delivery (including electronic images of handwritten signatures delivered in .pdf file or .jpeg file format, or by any electronic signature complying with the U.S. federal ESIGN Act of 2000, including Orbit, Adobe Sign, DocuSign, or any other similar platform), each of which shall be deemed to be original signatures for all purposes and shall be effective as delivery of a manually executed original counterpart.
Section 10.10. OFAC Compliance. The District covenants and represents that neither it nor any of its affiliates, subsidiaries, directors or officers are the target or subject of any sanctions enforced by the United States Government, (including, the Office of Foreign Assets Control of the US Department of the Treasury, the United Nations Security Council, the European Union, HM Treasury or other relevant sanctions authority (collectively “Sanctions”). The District covenants and represents that neither it nor any of its affiliates, subsidiaries, directors or officers will use any payments made pursuant to this Indenture: (a) to fund or facilitate any activities of or business with any person who, at the time of such funding or facilitation, is the subject or target of Sanctions; (b) to fund or facilitate any activities of or business with any country or territory that is the target or subject of Sanctions; or (c) in any other manner that will result in a violation of Sanctions by any person. 544
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IN WITNESS WHEREOF, the District has caused this Indenture to be signed by the City Manager of the City, acting as the legislative body of the District, and attested thereto by the City Clerk of the City, and the Trustee, in token of its acceptance of the trust created hereunder, has caused this Indenture to be signed in its corporate name by its officer identified below, all as of the day and year first above written.
COMMUNITY FACILITIES DISTRICT NO. 2006-1
(MARBLEHEAD COASTAL) OF THE CITY OF
SAN CLEMENTE
By:
Andy Hall,
City Manager of the City of San Clemente,
acting as the legislative body of Community
Facilities District No. 2006-1 (Marblehead
Coastal) of the City of San Clemente
ATTEST:
Laura Campagnolo,
City Clerk of the City of San Clemente,
acting as the legislative body of
Community Facilities District No. 2006-1
(Marblehead Coastal) of the
City of San Clemente
THE BANK OF NEW YORK MELLON TRUST
COMPANY, N.A., as Trustee
By:
Its: Authorized Officer
545
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EXHIBIT A
FORM OF 2025 SPECIAL TAX REFUNDING BOND
R-1 $__________
UNLESS THIS BOND IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY (AS SUCH TERM IS DEFINED IN THE INDENTURE) TO THE BOND
REGISTRAR FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY BOND ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
UNITED STATES OF AMERICA
STATE OF CALIFORNIA
COUNTY OF ORANGE
COMMUNITY FACILITIES DISTRICT NO. 2006-1 (MARBLEHEAD COASTAL) OF THE
CITY OF SAN CLEMENTE
2025 SPECIAL TAX REFUNDING BONDS
INTEREST RATE MATURITY DATE DATED DATE CUSIP
_____% September 1, 20__ June ___, 2025 ______
REGISTERED OWNER: CEDE & CO.
PRINCIPAL AMOUNT: _____ MILLION _____ THOUSAND DOLLARS
COMMUNITY FACILITIES DISTRICT NO. 2006-1 (MARBLEHEAD COASTAL) OF THE CITY OF SAN CLEMENTE (the “District”) which was formed by the City of San Clemente (the “City”) and is situated in the County of Orange, State of California, FOR VALUE RECEIVED, hereby promises to pay, solely from certain amounts held under the Indenture (as such term is defined herein), to the Registered Owner named above, or registered assigns, 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 Interest Payment Date (as such term is defined herein) next preceding the date of authentication hereof, unless: (i) the date of authentication is an Interest Payment Date, in which event interest shall be payable from such date of authentication; (ii) the date of authentication is after a Record Date (as such term is defined herein) 546
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but prior to the immediately succeeding Interest Payment Date, in which event interest shall be payable from the Interest Payment Date immediately succeeding the date of authentication; or (iii) the date of authentication is prior to the close of business on the first Record Date in which event interest shall be payable from the Dated Date set forth above. Notwithstanding the foregoing, if at the time of authentication of this Bond interest is in default, interest on this Bond shall be payable from the last Interest Payment Date to which the interest has been paid or made available for payment or, if no interest has been paid or made available for payment, interest on this Bond shall be payable from the Dated Date set forth above. Interest will be paid semiannually on September 1, 2025 and each March 1 and September 1 thereafter (each, an “Interest Payment Date”), at the Interest Rate set forth above, until the Principal Amount hereof is paid or made available for payment.
The principal of and premium, if any, on this Bond are payable to the Registered Owner hereof in lawful money of the United States of America upon presentation and surrender of this Bond at the Principal Office of the Trustee, initially The Bank of New York Mellon Trust Company, N.A. (the “Trustee”). Interest on this Bond shall be paid on each Interest Payment Date by check of the Trustee mailed by first class mail, postage prepaid, or in certain circumstances described in the Indenture by wire transfer to an account within the United States of America, to the Registered Owner hereof appearing on the registration books maintained by the Trustee as of the close of business on the fifteenth day of the month preceding the month in which the Interest Payment Date occurs (the “Record Date”) at such Registered Owner’s address as it appears on the registration books maintained by the Trustee.
Capitalized terms used herein and not defined shall have the meanings given them in the Indenture.
This Bond is one of a duly authorized issue of “Community Facilities District No. 2006-1 (Marblehead Coastal) of the City of San Clemente 2025 Special Tax Refunding Bonds” (the “Bonds”) issued in the aggregate principal amount of $______ pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, being Sections 53311, et seq., of the California Government Code (the “Act”) for the purpose of refunding the District’s outstanding 2015 Special Tax Bonds, funding a reserve account and paying certain costs related to the issuance of the Bonds.
The issuance of the Bonds and the terms and conditions thereof are provided for by a resolution adopted by the City Council of the City, acting in its capacity as the legislative body of the District (the “Legislative Body”) on ________, 2025 and a Bond Indenture dated as of June 1, 2025, by and between the District and the Trustee executed in connection therewith (the “Indenture”), and this reference incorporates the Indenture herein, and by acceptance hereof the Registered Owner of this Bond assents to said terms and conditions. The Indenture is executed under and this Bond is issued under, and both are to be construed in accordance with, the laws of the State of California.
Pursuant to the Act and the Indenture, the principal of, premium, if any, and interest on this Bond are payable solely from the portion of the net annual special taxes authorized under the Act to be levied and collected within the District (the “Net Taxes”) and certain other amounts pledged to the repayment of the Bonds as set forth in the Indenture. Any amounts for the payment hereof shall be limited to the Net Taxes pledged and collected or foreclosure proceeds received following a default in payment of the Net Taxes and other amounts deposited to the Special Tax Fund (other than the Administrative Expenses Account therein) established under the Indenture, except to the extent that other provision for payment has been made by the Legislative Body, as may be permitted by law.
The District has covenanted for the benefit of the owners of the Bonds that under certain 547
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circumstances described in the Indenture it will commence and diligently pursue to completion foreclosure proceedings in the event of delinquencies of Special Tax installments levied for payment of principal and interest on the Bonds.
The Bonds with stated maturities on or after September 1, 20__ are subject to redemption prior to their respective stated maturities, as a whole or in part, as directed by the District in a written request provided to the Trustee at least 35 days (or such lesser number of days acceptable to the Trustee in the sole discretion of the Trustee, such notice for the convenience of the Trustee) prior to redemption, by lot within each maturity in integral multiples of $5,000, on September 1, 20__ or any date thereafter, at a redemption price equal to the principal amount thereof plus accrued interest thereon to the date fixed for redemption, without premium.
The Term Bonds shall be called before maturity and redeemed, from the Sinking Fund Payments that have been deposited into the Redemption Account, on September 1, 20__ and September 1, 20__, in accordance with the schedule of Sinking Fund Payments set forth below. The Term Bonds so called for redemption shall be selected by the Trustee by lot and shall be redeemed at a redemption price for each redeemed Term Bond equal to the principal amount thereof, plus accrued interest to the redemption date, without premium, as follows:
TERM BONDS MATURING SEPTEMBER 1, 20___
Redemption Date
(September 1) Principal Amount
20__ $_____
20__* _____
___________
* Maturity.
If, during the Fiscal Year immediately preceding one of the redemption dates specified above, the District purchases Bonds, at least 45 days prior to the redemption date the District shall notify the Trustee as to the principal amount purchased and the amount of Bonds so purchased shall be credited at the time of purchase, to the extent of the full principal amount thereof, to reduce such upcoming Sinking Fund Payment for the Bonds so purchased. All Bonds purchased pursuant to the Indenture will shall be cancelled pursuant to the Indenture.
In the event of a partial optional redemption or extraordinary redemption of the Bonds, each of the remaining Sinking Fund Payments for such Bonds, as described above, will be reduced, as nearly as practicable, on a pro rata basis, in integral multiples of $5,000, as directed by the District.
The Bonds are subject to extraordinary redemption as a whole, or in part by lot, on any Interest Payment Date, and shall be redeemed by the Trustee, from Prepayments deposited to the Redemption Account pursuant to the Indenture, plus amounts transferred from the Reserve Account pursuant to the Indenture, among maturities as directed in writing by the District, at the following redemption prices, expressed as a percentage of the principal amount to be redeemed, together with accrued interest to the redemption date:
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Redemption Date Redemption Price
Any Interest Payment Date from (and including) September 1, 20__ through (and including) March 1, 20__
___%
September 1, 20__ and March 1, 20__ ___
September 1, 20__ and March 1, 20__ ___
September 1, 20__ and any Interest Payment Date thereafter ___ The District shall notify the Trustee of any extraordinary prepayment at least 45 days prior to the Interest Payment Date on which such prepayment shall occur.
Notice of redemption with respect to the Bonds to be redeemed shall be mailed to the registered owners thereof not less than 20 nor more than 45 days prior to the redemption date by first class mail, postage prepaid, to the addresses set forth in the registration books. Neither a failure of the Registered Owner hereof to receive such notice nor any defect therein will affect the validity of the proceedings for redemption. All Bonds or portions thereof so called for redemption will cease to accrue interest on the specified redemption date, provided that funds for the redemption are on deposit with the Trustee on the redemption date. Thereafter, the registered owners of such Bonds shall have no rights except to receive payment of the redemption price upon the surrender of the Bonds.
This Bond shall be registered in the name of the Registered Owner hereof, as to both principal and interest, and the District and the Trustee may treat the Registered Owner hereof as the absolute owner for all purposes and shall not be affected by any notice to the contrary.
The Bonds are issuable only in fully registered form in the denomination of $5,000 or any integral multiple thereof and may be exchanged for a like aggregate principal amount of Bonds of other authorized denominations of the same issue and maturity, all as more fully set forth in the Indenture. This Bond is transferable by the Registered Owner hereof, in person or by his attorney duly authorized in writing, at the Principal Office of the Trustee, but only in the manner, subject to the limitations and upon payment of the charges provided in the Indenture, upon surrender and cancellation of this Bond. Upon such transfer, a new registered Bond of authorized denomination or denominations for the same aggregate principal amount of the same issue and maturity will be issued to the transferee in exchange therefor.
The Trustee shall not be required to register transfers or make exchanges of: (i) any Bonds for a period of 15 days next preceding any selection of the Bonds to be redeemed; or (ii) any Bonds chosen for redemption.
The rights and obligations of the District and of the registered owners of the Bonds may be amended at any time, and in certain cases without notice to or the consent of the registered owners, to the extent and upon the terms provided in the Indenture.
THE BONDS DO NOT CONSTITUTE OBLIGATIONS OF THE CITY OR OF THE
DISTRICT FOR WHICH THE CITY OR THE DISTRICT IS OBLIGATED TO LEVY OR
PLEDGE, OR HAS LEVIED OR PLEDGED, GENERAL OR SPECIAL TAXES, OTHER THAN THE NET TAXES REFERENCED HEREIN. THE BONDS ARE LIMITED OBLIGATIONS OF
THE DISTRICT PAYABLE FROM THE PORTION OF THE NET TAXES AND OTHER
AMOUNTS PLEDGED UNDER THE INDENTURE BUT ARE NOT A DEBT OF THE CITY, 549
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THE STATE OF CALIFORNIA OR ANY OF ITS POLITICAL SUBDIVISIONS WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY LIMITATION OR RESTRICTION.
This Bond shall not become valid or obligatory for any purpose until the certificate of authentication and registration hereon endorsed shall have been dated and signed by the Trustee.
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 do exist, have happened and have 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 District, does not exceed any debt limit prescribed by the laws or Constitution of the State of California.
IN WITNESS WHEREOF, the District has caused this Bond to be dated as of the Dated Date, to be signed on behalf of the District by the City Manager of the City, acting as the legislative body of the District, and attested by the facsimile signature of the City Clerk of the City.
By:
Andy Hall,
City Manager of the City of San Clemente,
acting as the legislative body of Community
Facilities District No. 2006-1 (Marblehead
Coastal) of the City of San Clemente
ATTEST:
Laura Campagnolo,
City Clerk of the City of San Clemente,
acting as the legislative body of
Community Facilities District No. 2006-1
(Marblehead Coastal) of the
City of San Clemente
550
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[FORM OF TRUSTEE’S CERTIFICATE
OF AUTHENTICATION AND REGISTRATION]
This is one of the Bonds described in the within-defined Indenture.
Dated: ______, 2025 THE BANK OF NEW YORK MELLON TRUST
COMPANY, N.A., as Trustee
By:
Its: Authorized Signatory
[FORM OF LEGAL OPINION]
The following is a true copy of the opinion rendered by Stradling Yocca Carlson & Rauth LLP, in connection with the issuance of, and dated as of the date of the original delivery of, the Bonds. A signed copy is on file in my office.
Laura Campagnolo,
City Clerk of the City of San Clemente,
acting as the legislative body of
Community Facilities District No. 2006-1
(Marblehead Coastal) of the
City of San Clemente
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[FORM OF ASSIGNMENT]
For value received the undersigned hereby sells, assigns and transfers unto (Name, Address, and Tax Identification or Social Security Number of Assignee) the within-mentioned Bond and hereby irrevocably constitute(s) and appoint(s) _________________________________________________________________________ attorney, to transfer the same on the Registration Books of the Trustee with full power of substitution in the premises.
Dated:
Signature Guaranteed:
Note: Signature(s) must be guaranteed by an
eligible guarantor institution.
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.
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EXHIBIT B-1
FORM OF REQUISITION FOR DISBURSEMENT OF PROJECT COSTS
$______
2025 SPECIAL TAX REFUNDING BONDS
COMMUNITY FACILITIES DISTRICT NO. 2006-1 OF THE
CITY OF SAN CLEMENTE (MARBLEHEAD COASTAL)
The Bank of New York Mellon Trust Company, N.A. (the “Trustee”), is hereby requested to pay from the Construction Fund, established by the Bond Indenture, dated as of June 1, 2025, by and between the Trustee and Community Facilities District No. 2006-1 (Marblehead Coastal) of the City of San Clemente (the “District”), the amount specified to the payee named below for payment of the Project Costs set forth in Attachment No. 1 hereto.
Payee:
Address:
Purpose:
Amount: $
The amount is due and payable under purchase order, contract or other authorization and has not formed the basis of any prior request for payment. The conditions for the release of this amount from the Construction Fund, including those conditions in Section 3.10(a) of the Indenture have been satisfied.
There has not been filed with nor served upon the District notice of any lien, right to lien or attachment upon, or stop notice or claim affecting the right to receive payment of the amount specified above which has not been released or will not be released simultaneously with the payment of such amount, other than materialmen’s or mechanic’s liens accruing by mere operation of law.
Dated: COMMUNITY FACILITIES DISTRICT NO. 2006-1
(MARBLEHEAD COASTAL) OF THE CITY OF
SAN CLEMENTE
By:
Name:
Title: _____________________________________
553
Stradling Yocca Carlson & Rauth Attachment 3
Draft of 4/25/25
4937-2247-8631v5/022806-0004
ESCROW AGREEMENT (2015 Bonds)
THIS ESCROW AGREEMENT (2015 BONDS), dated as of June 1, 2025 (this “Agreement”), by and between Community Facilities District No. 2006-1 (Marblehead Coastal) of the City of San Clemente (the “District”) and The Bank of New York Mellon Trust Company. N.A., as escrow agent (the “Escrow Agent”) and as 2015 Fiscal Agent (as such term is defined herein), is entered into in accordance with a resolution of the District adopted on May 6, 2025 and a Fiscal Agent Agreement, dated as of December 1, 2015 (the “2015 Fiscal Agent Agreement”), by and between the District and The Bank of New York Mellon Trust Company, N.A., as fiscal agent (the “2015 Fiscal Agent”). This Agreement is entered into to refund all of the District’s outstanding 2015 Special Tax Bonds (the “2015 Bonds”).
RECITALS
A. Pursuant to the 2015 Fiscal Agent Agreement, the District has previously issued the 2015 Bonds in the initial aggregate principal amount of $55,490,000, of which $50,670,000 is currently outstanding.
B. The 2015 Bonds are payable from Net Taxes (as such term is defined in the 2015 Fiscal Agent Agreement) levied on properties within the District.
C. The District has determined to issue its 2025 Special Tax Revenue Refunding Bonds (the “2025 Bonds”), a portion of the proceeds of which, together with other moneys as described in Section 1, will be applied to pay on September 1, 2025 (the “Redemption Date”) the principal of the 2015 Bonds maturing on and after the Redemption Date, plus interest with respect thereto accrued through the Redemption Date, without premium.
D. The District will irrevocably deposit moneys with the Escrow Agent, which moneys will be used to purchase the securities that are described on Schedule A (the “Federal Securities”) (as permitted by, in the manner prescribed by and all in accordance with the 2015 Fiscal Agent Agreement). Such Federal Securities satisfy the criteria set forth in Section 6.02 of the 2015 Fiscal Agent Agreement, and the principal of and interest on such Federal Securities when paid will provide money which will be fully sufficient to pay and discharge the 2015 Bonds.
AGREEMENT
SECTION 1. Deposit of Moneys. The District will cause The Bank of New York Mellon Trust Company, N.A., as trustee for the 2025 Bonds, to transfer a portion of the proceeds of the 2025 Bonds in the amount of $_______ on the date of issuance of the 2025 Bonds to the Escrow Agent for deposit in the Escrow Fund established hereunder. In addition, on the date of issuance of the 2025 Bonds, the District will cause the 2015 Fiscal Agent to transfer to the Escrow Agent for deposit in the Escrow Fund: (i) $_______ held in the Reserve Account established under the 2015 Fiscal Agent Agreement; (ii) $________ held in the Interest and Principal Account of the Bond Fund established under the 2015 Fiscal Agent Agreement; and (iii) held in the Special Tax Fund established under the 2015 Fiscal Agent Agreement.
The Escrow Agent will hold such amounts in an irrevocable escrow separate and apart from other moneys of the District and the Escrow Agent in a fund hereby created and established to be 554
2 4937-2247-8631v5/022806-0004
known as the “Escrow Fund” and to be applied solely as provided in this Agreement. The District represents that the sum of the amounts set forth above are at least equal to an amount that is sufficient to purchase the Federal Securities listed on Schedule A and hold $_____ uninvested as cash.
SECTION 2. Investment of Moneys. The Escrow Agent acknowledges receipt of the moneys described in Section 1 and agrees immediately to invest such moneys in the Federal Securities listed on Schedule A and to deposit such Federal Securities in the Escrow Fund. Each of the 2015 Fiscal Agent and the Escrow Agent shall be entitled to rely upon the conclusion of the report delivered by Causey Public Finance, LLC (the “Verification Agent”) in connection herewith that the Federal Securities listed on Schedule A mature and bear interest payable in such amounts and at such times as, together with cash on deposit in the Escrow Fund, will be sufficient to pay, on the Redemption Date, the principal of the 2015 Bonds maturing on and after the Redemption Date, plus interest with respect thereto accrued through the Redemption Date, without premium.
SECTION 3. Investment of Any Remaining Moneys. At the written direction of the District, together with an unqualified opinion of Stradling Yocca Carlson & Rauth LLP, to the effect that reinvestment is permitted under the legal documents in effect with respect to the 2015 Bonds and will not have an adverse effect on the federal tax status of the 2015 Bonds, the Escrow Agent shall reinvest any other amount of principal and interest, or any portion thereof, received from the Federal Securities prior to the date on which such payment is required for the purposes set forth herein, in noncallable Federal Securities maturing not later than the date on which such payment or portion thereof is required for the purposes set forth in Section 5, as directed in such written direction of the District as verified in a report prepared by an Independent Financial Consultant (as such term is defined in the 2015 Fiscal Agent Agreement) to the effect that the reinvestment described in said report will not adversely affect the sufficiency of the amounts of securities, investments and money in the Escrow Fund to pay, on the Redemption Date, the principal of the 2015 Bonds maturing on and after the Redemption Date, plus interest with respect thereto accrued through the Redemption Date, without premium, and accompanied by a certificate of an independent certified public accountant or firm of certified public accountants of favorable national reputation experienced in the refunding of obligations of political subdivisions confirming the accuracy of the calculations establishing the sufficiency of such deposit. Any interest income resulting from investment or reinvestment of moneys pursuant to this Section which is not required for the purposes set forth in Section 5, as verified in the letter of the Verification Agent originally obtained by the District with respect to the refunding of the 2015 Bonds or in any other report prepared by an independent certified public accountant or firm of certified public accountants of favorable national reputation experienced in the refunding of obligations of political subdivisions, shall be paid to the District promptly upon the receipt of such interest income by the Escrow Agent and written direction by the District. The determination of the District as to whether an accountant qualifies under this Agreement shall be conclusive. The Escrow Agent may conclusively rely upon the written instructions of the District as to both the suitability and legality of any investments directed hereunder, and upon any such opinion, letter and report, and shall have no responsibility or liability with respect thereto.
SECTION 4. Substitution of Securities. Upon the written request of the District, and subject to the conditions and limitations that are set forth herein, the Escrow Agent shall sell, redeem or otherwise dispose of all or a portion of the Federal Securities (as so directed by the District), provided that there are substituted therefor from the proceeds of the Federal Securities other Federal Securities, but only after the District has obtained and delivered to the Escrow Agent: (i) an unqualified opinion of Stradling Yocca Carlson & Rauth LLP, to the effect that the substitution of 555
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securities is permitted under the legal documents in effect with respect to the 2015 Bonds and will not have an adverse effect on the tax status of the 2015 Bonds; (ii) a report by an Independent Financial Consultant (as such term is defined in the 2015 Fiscal Agent Agreement) to the effect that the reinvestment described in said report will not adversely affect the sufficiency of the amounts of securities, investments and money in the Escrow Fund to pay, on the Redemption Date, the principal of the 2015 Bonds maturing on and after the Redemption Date, plus interest with respect thereto accrued through the Redemption Date, without premium; and (iii) a certificate of an independent certified public accountant or a firm of independent certified public accountants confirming the accuracy of the calculations establishing the sufficiency of such deposit. The Escrow Agent shall not be liable or responsible for any loss resulting from any reinvestment made pursuant to this Agreement and in full compliance with the provisions hereof, and may conclusively rely upon the written instructions of the District as to both the suitability and legality of any substituted investments directed hereunder, and upon any such opinion and report, and shall have no responsibility or liability with respect thereto.
SECTION 5. Payment of 2015 Bonds.
(a) Payment. From the maturing principal of the Federal Securities and the investment income and other earnings thereon and other moneys on deposit in the Escrow Fund, the Escrow Agent shall transfer funds to the 2015 Fiscal Agent in an amount sufficient to enable the 2015 Fiscal Agent to pay, on the Redemption Date, the principal of the 2015 Bonds maturing on and after the Redemption Date, plus interest with respect thereto accrued through the Redemption Date, without premium, all as indicated on Schedule A.
(b) Irrevocable Instructions to Provide Notice. The notices required to be mailed pursuant to Sections 2.03 and 9.03 of the 2015 Fiscal Agent Agreement are substantially in the forms attached hereto as Exhibits A and B. The District hereby irrevocably instructs the 2015 Fiscal Agent:
(i) to mail a notice of redemption of the 2015 Bonds maturing after the Redemption Date substantially in the form attached hereto as Exhibit A at least 30 days prior to the Redemption Date to the parties described in and otherwise in accordance with Section 2.03 of the 2015 Fiscal Agent Agreement (including The Depository Trust Company and the Municipal Securities Rulemaking Board’s Electronic Municipal Market Access System (“EMMA”), maintained on the Internet at http://emma.msrb.org/); and (ii) to mail a notice of defeasance of the 2015 Bonds in the form attached hereto as Exhibit B on the date of issuance of the 2025 Bonds to the parties described in and otherwise in accordance with Section 9.03 of the 2015 Fiscal Agent Agreement (including EMMA), as required to provide for the payment and redemption of the 2015 Bonds in accordance with this Section. The 2015 Fiscal Agent shall not have any liability to any party in connection with any failure to timely post such notices on EMMA and the sole remedy available shall be an action in mandamus by the holders of the 2015 Bonds for specific performance or similar remedy to compel performance.
(c) Unclaimed Moneys. Any moneys in the Escrow Fund which remain unclaimed after the Redemption Date shall be repaid (without liability for interest) by the Escrow Agent to the District.
(d) Priority of Payments. The owners of the 2015 Bonds shall have a first and exclusive lien on all moneys and securities in the Escrow Fund until such moneys and such securities are used and applied as provided in this Agreement.
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(e) Termination of Obligation. As provided in the 2015 Fiscal Agent Agreement, upon the deposit of moneys with the Escrow Agent in the Escrow Fund as set forth in Section 1 and the purchase of the Federal Securities as provided in Section 2, the 2015 Bonds will be legally defeased in accordance with the 2015 Fiscal Agent Agreement except as set forth therein.
SECTION 6. Application of Certain Terms of the 2015 Fiscal Agent Agreement. All of the terms of the 2015 Fiscal Agent Agreement relating to the making of payments of principal of and interest on the 2015 Bonds and relating to the exchange or transfer of the 2015 Bonds are incorporated in this Agreement as if set forth in full herein. The procedures set forth in Sections 7.01 of the 2015 Fiscal Agent Agreement relating to the resignation and removal of the 2015 Fiscal Agent are hereby made applicable to the Escrow Agreement and incorporated in this Agreement as if set forth in full herein naming the Escrow Agent in place of the 2015 Fiscal Agent and shall be the procedures to be followed with respect to any resignation or removal of the Escrow Agent hereunder.
SECTION 7. Performance of Duties. The Escrow Agent agrees to perform only the duties that are set forth herein and shall have no responsibility to take any action or omit to take any action that is not set forth herein.
SECTION 8. Escrow Agent’s Authority to Make Investments. Except as provided in Section 2 and 3 hereof, the Escrow Agent shall have no power or duty to invest any funds that are held hereunder or to sell, transfer or otherwise dispose of the moneys or Federal Securities that are held hereunder.
SECTION 9. Indemnity. The District hereby assumes liability for, and hereby agrees (whether or not any of the transactions contemplated hereby are consummated) to indemnify, protect, save and keep harmless the Escrow Agent and its respective successors, assigns, directors, officers, agents, employees and servants, from and against any and all liabilities, obligations, losses, damages, penalties, claims, actions, suits, costs, expenses and disbursements (including reasonable legal fees and disbursements) of whatsoever kind and nature which may be imposed on, incurred by or asserted against the Escrow Agent at any time (whether or not also indemnified against the same by the District or any other person under any other agreement or instrument, but without double indemnity) in any way relating to or arising out of the execution, delivery and performance of this Agreement, the enforcement of any provision of this Agreement (including without limitation enforcement of the District’s obligations under this Section 9), the establishment hereunder of the Escrow Fund, the acceptance of the funds and securities deposited therein, the retention of the proceeds thereof and any payment, transfer or other application of moneys or securities by the Escrow Agent in accordance with the provisions of this Agreement; provided, however, that the District shall not be required to indemnify the Escrow Agent against the Escrow Agent’s own negligence or willful misconduct or the negligence or willful misconduct of the Escrow Agent’s respective employees. In no event shall the District or the Escrow Agent be liable to any person by reason of the transactions that are contemplated hereby other than to each other as set forth in this Section. The indemnities that are contained in this Section shall survive the termination of this Agreement and the resignation or removal of the Escrow Agent.
SECTION 10. Responsibilities of Escrow Agent. The Escrow Agent and its agents and servants shall not be held to any personal liability whatsoever, in tort, contract or otherwise, in connection with the execution and delivery of this Agreement, the establishment of the Escrow Fund, the acceptance of the moneys or securities deposited therein, the retention of the Federal Securities or the proceeds thereof, the sufficiency of the cash on deposit in the Escrow Fund and the Federal 557
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Securities to pay the 2015 Bonds or any payment, transfer or other application of moneys or obligations by the Escrow Agent in accordance with the provisions of this Agreement or by reason of any non-negligent act, non-negligent omission or non-negligent error of the Escrow Agent that is made in good faith in the conduct of its duties. The recitals of fact that are contained herein shall be taken as the statements of the District, and the Escrow Agent assumes no responsibility for the correctness thereof. The Escrow Agent makes no representation as to the sufficiency of the proceeds deposited into the Escrow Fund or from the investment thereof to accomplish the refunding of the 2015 Bonds or to the validity of this Agreement as to the District and, except as otherwise provided herein, the Escrow Agent shall incur no liability in respect thereof. The Escrow Agent shall not be liable in connection with the performance of its duties under this Agreement except for its own negligence or willful misconduct, and the duties and obligations of the Escrow Agent shall be determined solely by the express provisions of this Agreement. The Escrow Agent may consult with counsel, who may or may not be counsel to the District, and in reliance upon the written opinion or advice of such counsel shall have full and complete authorization and protection in respect of any action taken, suffered or omitted by it in good faith in accordance therewith. Whenever the Escrow Agent shall deem it necessary or desirable that a matter be proved or established prior to taking, suffering, or omitting any action under this Agreement, such matter may be deemed to be conclusively established by a certificate signed by an officer of the District. The Escrow Agent shall incur no liability for losses arising from any investment made pursuant to this Agreement. The Escrow Agent may conclusively rely and shall be fully protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties.
No provision of this Agreement shall require the Escrow Agent to expend or risk its own funds or otherwise incur any financial liability in the performance or exercise of any of its duties hereunder, or in the exercise of its rights or powers.
The Escrow Agent may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents, attorneys, custodians or nominees appointed with due care, and shall not be responsible for any willful misconduct or negligence on the part of any agent, attorney, custodian or nominee so appointed.
The Escrow Agent shall have the right to accept and act upon instructions, including funds transfer instructions (“Instructions”) given pursuant to this Agreement and delivered using Electronic Means (“Electronic Means” shall mean the following communications methods: e-mail, secure electronic transmission containing applicable authorization codes, passwords and/or authentication keys issued by the Escrow Agent, or another method or system specified by the Escrow Agent as available for use in connection with its services hereunder); provided, however, that the District shall provide to the Escrow Agent an incumbency certificate listing officers with the authority to provide such Instructions (“Authorized Officers”) and containing specimen signatures of such Authorized Officers, which incumbency certificate shall be amended by the District whenever a person is to be added or deleted from the listing. If the District elects to give the Escrow Agent Instructions using Electronic Means and the Escrow Agent in its discretion elects to act upon such Instructions, the Escrow Agent’s understanding of such Instructions shall be deemed controlling. The District understands and agrees that the Escrow Agent cannot determine the identity of the actual sender of such Instructions and that the Escrow Agent shall conclusively presume that directions that purport to have been sent by an Authorized Officer listed on the incumbency certificate provided to the Escrow Agent have been sent by such Authorized Officer. The District 558
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shall be responsible for ensuring that only Authorized Officers transmit such Instructions to the Escrow Agent and that the District and all Authorized Officers are solely responsible to safeguard the use and confidentiality of applicable user and authorization codes, passwords and/or authentication keys upon receipt by the District. The Escrow Agent shall not be liable for any losses, costs or expenses arising directly or indirectly from the Escrow Agent’s reliance upon and compliance with such Instructions notwithstanding the fact that such directions conflict or are inconsistent with a subsequent written instruction. The District agrees: (i) to assume all risks arising out of the use of Electronic Means to submit Instructions to the Escrow Agent, including without limitation the risk of the Escrow Agent acting on unauthorized Instructions, and the risk of interception and misuse by third parties; (ii) that it is fully informed of the protections and risks associated with the various methods of transmitting Instructions to the Escrow Agent and that there may be more secure methods of transmitting Instructions than the method(s) selected by the District; (iii) that the security procedures (if any) to be followed in connection with its transmission of Instructions provide to it a commercially reasonable degree of protection in light of its particular needs and circumstances; and (iv) to notify the Escrow Agent immediately upon learning of any compromise or unauthorized use of the security procedures.
The Escrow Agent shall furnish the District with periodic cash transaction statements which include detail for all investment transactions effected by the Escrow Agent or brokers selected by the District, provided that the Escrow Agent is not obligated to provide an accounting for any fund or account that: (a) has a balance of $0.00; and (b) has not had any activity since the last reporting date.
Upon the District’s election, such statements will be delivered via the Escrow Agent’s online service and upon electing such service, paper statements will be provided only upon request. The District waives the right to receive brokerage confirmations of security transactions effected by the Escrow Agent as they occur, to the extent permitted by law. The District further understands that trade confirmations for securities transactions effected by the Escrow Agent will be available upon request and at no additional cost and other trade confirmations may be obtained from the applicable broker.
If the Escrow Agent learns that the Department of the Treasury or the Bureau of Public Debt will not, for any reason, accept a subscription of securities that is to be submitted pursuant to this Agreement, the Escrow Agent shall promptly request alternative written investment instructions from the District with respect to escrowed funds which were to be invested in securities. The Escrow Agent shall follow such instructions and, upon the maturity of any such alternative investment, the Escrow Agent shall hold funds uninvested and without liability for interest until receipt of further written instructions from the District. In the absence of investment instructions from the District, the Escrow Agent shall not be responsible for the investment of such funds or interest thereon. The Escrow Agent may conclusively rely upon the District’s selection of an alternative investment as a determination of the alternative investment’s legality and suitability and shall not be liable for any losses related to the alternative investments or for compliance with any yield restriction applicable thereto.
In no event shall the Escrow Agent be liable for special, indirect, punitive or consequential loss or damage of any kind whatsoever (including but not limited to lost profits) even if the Escrow Agent has been advised of the likelihood of such damages and regardless of the form of such action.
The Escrow Agent shall not be liable for delays or failures in performance resulting from acts beyond its control. Such acts shall include but not be limited to acts of God, strikes, lockouts, riots, acts of war, epidemics, pandemics, quarantine restrictions, acts of civil or military authority, governmental regulations superimposed after the fact, fire, communication line failures, computer viruses, power failures, earthquakes or other disasters.
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SECTION 11. Amendments. This Agreement is made for the benefit of the District and the owners from time to time of the 2015 Bonds and it shall not be repealed, revoked, altered or amended without the written consent of all such owners, the Escrow Agent and the District; provided, however, that the District and the Escrow Agent may, without the consent of, or notice to, such owners, amend this Agreement or enter into such agreements supplemental to this Agreement as shall not materially adversely affect the rights of such owners and as shall not be inconsistent with the terms and provisions of this Agreement or the 2015 Fiscal Agent Agreement, for any one or more of the following purposes: (i) to cure any ambiguity or formal defect or omission in this Agreement; (ii) to grant to, or confer upon, the Escrow Agent for the benefit of the owners of the 2015 Bonds any additional rights, remedies, powers or authority that may lawfully be granted to, or conferred upon, such owners or the Escrow Agent; and (iii) to include under this Agreement additional funds. The Escrow Agent shall be entitled to rely conclusively upon an unqualified opinion of Stradling Yocca Carlson & Rauth LLP, with respect to compliance with this Section, including the extent, if any, to which any change, modification, addition or elimination affects the rights of the owners of the various 2015 Bonds or that any instrument that is executed hereunder complies with the conditions and provisions of this Section.
SECTION 12. Notice to Rating Agencies. In the event that this Agreement or any provision thereof is severed, amended or revoked, the Escrow Agent, upon written instructions from the District, shall provide written notice in the form provided by the District of such severance, amendment or revocation to the rating agencies then rating the 2015 Bonds.
SECTION 13. Term. This Agreement shall commence upon its execution and delivery and shall terminate on the later to occur of either: (i) the date upon which the 2015 Bonds have been paid in accordance with this Agreement; or (ii) the date upon which no unclaimed moneys remain on deposit with the Escrow Agent pursuant to Section 5(c) of this Agreement. Funds remaining in the Escrow Fund after payment in full of the 2015 Bonds shall be transferred to the District.
SECTION 14. Compensation. The District agrees to pay the Escrow Agent its reasonable fees and expenses (including legal fees and expenses) as previously agreed to by the Escrow Agent and the District, and any other reasonable fees and expenses of the Escrow Agent; provided, however, that under no circumstances shall the Escrow Agent be entitled to any lien or assert any lien whatsoever on any moneys or obligations in the Escrow Fund for the payment of fees and expenses for services that are rendered or expenses incurred by the Escrow Agent under this Agreement.
SECTION 15. Severability. If any one or more of the covenants or agreements provided in this Agreement on the part of the District or the Escrow Agent to be performed should be determined by a court of competent jurisdiction to be contrary to law, such covenants or agreements shall be null and void, shall be deemed separate from the remaining covenants and agreements contained herein and shall in no way affect the validity of the remaining provisions of this Agreement.
SECTION 16. Counterparts; Electronic Delivery of Signatures. This Agreement may be executed in several counterparts, all or any of which shall be regarded for all purposes as an original but all of which shall constitute and be but one and the same instrument. Signatures appearing on any counterpart of this Agreement may be delivered by Electronic Means or by electronic delivery in PDF format, which transmission or delivery shall be deemed delivery of an originally executed document.
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SECTION 17. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED UNDER THE LAWS OF THE STATE OF CALIFORNIA.
SECTION 18. Holidays. If the date for making any payment or the last date for performance of any act or the exercising of any right, as provided in this Agreement, shall be a legal holiday or a day on which banking institutions in the city in which is located the office of the Escrow Agent are authorized by law to remain closed, such payment may be made or act performed or right exercised on the next succeeding day which is not a legal holiday or a day on which such banking institutions are authorized by law to remain closed, with the same force and effect as if done on the nominal date provided in this Agreement, and no interest shall accrue for the period from and after such nominal date.
SECTION 19. Assignment. This Agreement shall not be assigned by the Escrow Agent or any successor thereto without the prior written consent of the District; provided, however, that no such consent shall be required with respect to an assignment effected pursuant to Section 20.
SECTION 20. Reorganization of Escrow Agent. Notwithstanding anything to the contrary contained in this Agreement, any company into which the Escrow Agent may be merged or converted or with which it may be consolidated or any company resulting from any merger, conversion or consolidation to which the Escrow Agent is a party, or any company to which the Escrow Agent may sell or transfer all or substantially all of its corporate trust business, shall be the successor to the Escrow Agent without execution or filing of any paper or any paper or further act, if such company is eligible to serve as Escrow Agent.
SECTION 21. Insufficient Funds. If at any time the Escrow Agent has actual knowledge that the moneys and investments in the Escrow Fund will not be sufficient to make all payments required by this Agreement, the Escrow Agent shall notify the District in writing of the amount thereof and the reason therefor to the extent known to it. The Escrow Agent shall have no responsibility regarding any such deficiency.
SECTION 22. Notices. Any notice to or demand upon the Escrow Agent may be served or presented, and such demand may be made, at the principal corporate trust office of the Escrow Agent at 333 South Hope Street, Suite 2525, Los Angeles, California 90071, Attention: Corporate Trust Department, Reference: Community Facilities District No. 2006-1 (Marblehead Coastal) of the City of San Clemente 2015 Special Tax Bonds. Any notice to or demand upon the District shall be deemed to have been sufficiently given or served for all purposes by being sent by facsimile or other electronic transmission, overnight mail or courier or mailed by registered or certified mail, and deposited, postage prepaid, in a post office letter box, addressed to the District at 910 Calle Negocio, San Clemente, California 92673 (or such other address as may have been filed in writing by the District with the Escrow Agent).
SECTION 23. OFAC Compliance. The District covenants and represents that neither it nor any of its affiliates, subsidiaries, directors or officers are the target or subject of any sanctions enforced by the United States Government (including the Office of Foreign Assets Control of the United States Department of the Treasury, the United Nations Security Council, the European Union, HM Treasury, or other relevant sanctions authority (collectively “Sanctions”). The District further covenants and represents that neither it nor any of its affiliates, subsidiaries, directors or officers will use any payments made pursuant to this Agreement: (i) to fund or facilitate any activities of or business with any person who, at the time of such funding or facilitation, is the subject or target of 561
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Sanctions; (ii) to fund or facilitate any activities of or business with any country or territory that is the target or subject of Sanctions; or (iii) in any other manner that will result in a violation of Sanctions by any person.
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S-1
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized officers as of the date first above written.
COMMUNITY FACILITIES DISTRICT NO. 2006-1
(MARBLEHEAD COASTAL) OF THE CITY OF
SAN CLEMENTE
By:
Andy Hall,
City Manager of the
City of San Clemente, acting as the
legislative body of Community Facilities
City No. 2006-1 (Marblehead Coastal) of the
City of San Clemente
THE BANK OF NEW YORK MELLON TRUST
COMPANY, N.A., as Escrow Agent and 2015 Fiscal
Agent
By:
Authorized Officer
563
Schedule A-1
4937-2247-8631v5/022806-0004
SCHEDULE A
FEDERAL SECURITIES
Moneys deposited in the Escrow Fund shall be invested as follows:
Security Maturity
Principal
Amount Yield
The escrow requirements for the 2015 Bonds are as follows:
Period Ending Principal Paid
Principal
Redeemed Interest Total
564
Exhibit A-1
4937-2247-8631v5/022806-0004
EXHIBIT A
NOTICE OF FULL OPTIONAL REDEMPTION
$________
COMMUNITY FACILITIES DISTRICT NO. 2006-1
(MARBLEHEAD COASTAL)
OF THE
CITY OF SAN CLEMENTE
2015 SPECIAL TAX BONDS
BASE CUSIP 797214
NOTICE IS HEREBY GIVEN to the owners of the above-captioned obligations (the “2015 Bonds”), which were issued pursuant to a Fiscal Agent Agreement, dated as of December 1, 2015 (the “2015 Fiscal Agent Agreement”), by and between Community Facilities District No. 2006-1 (Marblehead Coastal) of the City of San Clemente (the “District”) and The Bank of New York Mellon Trust Company, N.A., as fiscal agent (the “2015 Fiscal Agent”), that the outstanding 2015 Bonds in the aggregate principal amount of $49,935,000 have been called for redemption on September 1, 2025 (the “Redemption Date”). The 2015 Bonds were originally issued on December 3, 2015 and are described in the following table.
Principal
Payment Date
(September 1)
CUSIP®
†
(797214)
Principal
Amount Interest Rate
Redemption
Price
2026 BV4 $ 845,000 5.00% 100%
2027 BW2 965,000 5.00 100
2028 BX0 1,090,000 5.00 100
2029 BY8 1,225,000 5.00 100
2030 BZ5 1,365,000 5.00 100
2031 CA9 1,515,000 5.00 100
2032 CB7 1,675,000 5.00 100
2033 CC5 1,845,000 4.00 100
2034 CD3 2,005,000 4.00 100
2035 CE1 2,170,000 4.00 100
2040 CF8 12,630,000 5.00 100
2046 CG6 22,605,000 5.00 100
TOTAL $49,935,000
The 2015 Bonds will be payable on the Redemption Date at a redemption price of 100% of the principal amount thereof plus accrued interest thereon to such date (the “Redemption Price”).
The Redemption Price of the 2015 Bonds will become due and payable on the Redemption Date.
Interest on the 2015 Bonds will cease to accrue and be payable from and after the Redemption Date, such 2015 Bonds will be surrendered to the 2015 Fiscal Agent and will no longer be entitled to any lien, benefit or security under the 2015 Fiscal Agent Agreement and the owners thereof will have no rights in respect thereof except to receive payment of the Redemption Price on the Redemption Date.
† CUSIP® is a registered trademark of the American Bankers Association. CUSIP Global Services (CGS) is managed on behalf of the American Bankers Association by FactSet Research Systems Inc. Copyright© CUSIP Global Services. All rights reserved. CUSIP® data herein is provided by CUSIP Global Services. This data is not intended to create a database and does not serve in any way as a substitute for the CGS database. CUSIP® numbers are provided for convenience of reference only. Neither the District nor its agents or counsel assume responsibility for the accuracy of such numbers.
565
Exhibit A-2
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To receive payment on the Redemption Date, owners of the 2015 Bonds are required to present and surrender said 2015 Bonds on or before the Redemption Date at the address of the 2015 Fiscal Agent set forth below:
REQUIREMENT INFORMATION
First Class/Registered/Certified/Express/By Hand
BNY Mellon Corp Trust
Attn: Transfers/Redemption
2001 Bryan Street 10th Floor
Dallas, TX 75201
Additional information regarding the foregoing actions may be obtained from The Bank of New York Mellon Trust Company, N.A., Corporate Trust Department, Bondholder Relations, telephone number (800) 254-2826.
A form W-9 must be submitted with the 2015 Bonds being refunded. Failure to provide a completed form W-9 will result in backup withholding pursuant to law. Under the Tax Cuts and Jobs Act, 24% will be withheld if the tax identification number is not properly certified.
If the owner of any 2015 Bond fails to deliver such 2015 Bond to the 2015 Fiscal Agent on the Redemption Date, such 2015 Bond shall nevertheless be deemed redeemed on the Redemption Date and the owner of such 2015 Bond shall have no rights in respect thereof except to receive payment of the Redemption Price from funds held by the 2015 Fiscal Agent for such payment.
Note: The District and the 2015 Fiscal Agent shall not be responsible for the selection or use of the CUSIP numbers selected or listed, nor is any representation made as to their correctness in this notice or as printed on any 2015 Bond. They are included solely for the convenience of the holders.
THE BANK OF NEW YORK MELLON TRUST
COMPANY, N.A., as 2015 Fiscal Agent
_________, 2025
566
Exhibit B-1
4937-2247-8631v5/022806-0004
EXHIBIT B
NOTICE OF DEFEASANCE
$_______
COMMUNITY FACILITIES DISTRICT NO. 2006-1
(MARBLEHEAD COASTAL)
OF THE