SECOND AMENDMENT TO
AGREEMENT FOR LEGAL SERVICES
CITY OF SAN JACINTO
I. PARTIES AND DATE.
THIS SECOND AMENDMENT TO AGREEMENT FOR LEGAL SERVICES ("Second Amendment") is made as of the 25th day of March 2013, by and between the CITY OF SAN JACINTO, a California municipal corporation ("CITY"), and BEST BEST & KRIEGER LLP, a limited liability partnership engaged in the practice of law in the State of California ("BB&K").
BB&K and crrY are sometimes individually referred to herein as "Party" and collectively as "Parties."
2. RECITALS.
2.1 The CITY and BB&K have entered into that certain Agreement for Legal Services dated as ofJuly 1, 2004 ("Agreement") whereby BB&K shall serve the CITY as its City Attorney to perform all necessary legal services for the CITY.
2.2 The CITY and BB&K amended that certain Agreement on January 19th, 2006 ("Amendment") to name Jeffrey S. Ballinger as City Attorney.
2.3 The CITY wishes to continue to engage the services of BB&K as its City Attorney to perform all necessary legal services for the CITY on the terms set forth below. For purposes of this Second Amendment, the term "CITY" shall include the Successor Agency to the former San Jacinto Redevelopment Agency, and any other affiliated entities.
3. TERMS.
3.1 as follows:
Amendment of Section 3.6.2. Section 3.6.2 of the Agreement is hereby amended "Specialized Legal Services: All legal services fitting this category shall be billed separately at the following hourly rates: $199/hour blended rate for all attorneys; $112/hour for paralegals and law clerks. This category shall include all hourly legal services in excess of the monthly retainer for specialized legal services including, but not limited to, the following:
(1) Litigation matters, including code enforcement litigation; (2) Labor and employment matters;
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Packet Pg. 404 Attachment: Executed Legal Services Agreement with Amendments No. 1 to No. 3 (Fifth Amendment to City Attorney Legal Services AGENDA ITEM 3A.4
3.2 as follows:
(3) Successor Agency matters; and
(4) Environmental issues including natural resources, endangered species and water law matters."
Amendment to add Section 3.6.5. Section 3.6.5 ofthe Agreement is hereby added "Annual Adjustments; Other Mutual Adjustments: The rates or amounts provided for in Section 3 shall be automatically increased as follows: On July 1, 2014 and every July 1st thereafter during the term of this Agreement, they shall be increased for the change in the cost of living for twelve (12) month period published for the month of May, as shown by the U.S. Department of Labor in its All Urban Consumers Index set forth for the Los Angeles-Anaheim-Riverside area; provided, however, that such adjustment shall never be lower than zero percent (0%) nor more than four percent (4%)."
3.3 Amendment to Section 3.6.3. Section 3.6.3 of the Agreement is hereby amended as follows:
"Reimbursable Services: All legal services fitting this category shall be billed separately at the rate then charged to non-public agency clients of BB&K for applicable attorney, paralegal and/or clerk. This category shall include all legal services for which the City is entitled to recover its legal costs, whether pursuant to contract or by statute or ordinance, and shall include, but not be limited to the following:
(1) Review of covenants, conditions and restrictions ("CC&Rs"); (2) Financing Districts (i.e. Community Facilities Districts; Assessment Districts; Landscape and Lighting Maintenance Districts); and
(3) Land Use/Environmental projects for which the City is entitled to reimbursement."
3.4 Amendment. Except as otherwise specifically set forth in this Second Amendment, all ofthe provisions ofthe Agreement shall remain in full force and effect.
SIGNATURES ON FOLLOWING PAGE
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Packet Pg. 405 Attachment: Executed Legal Services Agreement with Amendments No. 1 to No. 3 (Fifth Amendment to City Attorney Legal Services AGENDA ITEM 3A.4
CITY OF SAN JACINTO
By:
Attest:
Tim Hults
City Manager
Rick Miller
City Clerk
BEST BEST & KRIEGER LLP
By:
fe:2-ey Z11inger
Partner
Best Best & Krieger LLP
3 Date: VA 7/f?
Date: 1-1/Zed/3
Date: Aert ( 2 3 2,00
24438.00000\7877650.1
PACKET PAGE: 93
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Packet Pg. 406 Attachment: Executed Legal Services Agreement with Amendments No. 1 to No. 3 (Fifth Amendment to City Attorney Legal Services AMENDMENT NO. 3 TO
AGREEMENT FOR LEGAL SERVICES
CITY OF SAN JACINTO
1. PARTIES AND DATE.
THIS AMENDMENT NO. 3 TO AGREEMENT FOR LEGAL SERVICES
("Amendment No. 2") is made as of the 7 day of February 2017, by and between the CITY OF SAN JACINTO, a California municipal corporation ("CITY"), and BEST BEST & KRIEGER LLP, a limited liability partnership engaged in the practice of law in the State of California ("BB&K"). BB&K and CITY are sometimes individually referred to herein as "Party" and collectively as "Parties."
2. RECITALS.
2.1 The CITY and BB&K have entered into that certain Agreement for Legal Services dated as ofJuly I, 2004 ("Agreement") whereby BB&K shall serve the CITY as its City Attorney and Redevelopment Agency Counsel to perform all necessary legal services for the CITY.
2.2 The CITY and BB&K have executed an Amendment No. 1 to the Agreement for Legal Services dated January 19, 2006 to designate Jeffrey S. Ballinger as City Attorney.
2.3 The CITY and BB&K wish to continue such arrangement and to change the BB&K attorney designated as City Attorney from Jeffrey S. Ballinger to Michael J. Maurer.
3. TERMS.
3.1 Amendment of Section 3. The portion of Section 3.1 of the Agreement added by Amendment no. 1 is hereby amended to read as follows:
"Michael J. Maurer, of BB&K, shall be the individual attorney of BB&K designated as City Attorney and Successor Agency Counsel. Mr. Maurer shall designate other attorneys of BB&K as Assistant City Attorney or Assistant Successor Agency Counsel or Deputy City Attorney or Deputy Agency Counsel, as necessary. Mr. Maurer shall be responsible for the performance ofservices under the Agreement and the supervision ofservices performed by other members of Best Best & Krieger LLP. No change in this designation shall be made without the consent ofthe City and/or the Successor Agency."
3.2 Amendment. Except as otherwise specifically set forth in this Amendment No. 2, all ofthe provisions ofthe Agreement shall remain in full force and effect.
A-1
22242 00000\295830001
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Packet Pg. 407 Attachment: Executed Legal Services Agreement with Amendments No. 1 to No. 3 (Fifth Amendment to City Attorney Legal Services
CITY OF SAN JACINTO
Attest:
Robert hAllatille„nsonil Ti
City Mana er
altOn
Citytlerk
BEST BEST& KRIEGER LLP
By:
ichael J. Maurer
City Attorney
A-/
Date:
Date:
Date: -517
t
7 22242.00000\29583000.1
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Packet Pg. 408 Attachment: Executed Legal Services Agreement with Amendments No. 1 to No. 3 (Fifth Amendment to City Attorney Legal Services DocuSign Envelope lD: 249F5D2E-C96041 83-BCSD-89AF27084880 AMENDMENT NO.4 TO
AGREEMENT FOR LEGAL SERVICES
CITY OF SAN JACINTO
1. PARTIES AND DATE
THIS AMENDMENT NO. 4 TO AGREEMENT FOR LEGAL SERVICES
("Amendment No. 4") is made as of the 4th day of April 2023, by and befween the CITY OF SAN JACINTO, & California municipal corporation ("CITY"), and BEST BEST & KRIEGER LLP, a limited liability partnership engaged in the practice of law in the State of California ("BB&K"). BB&K and CITY are sometimes individually referred to herein as "Party" and collectively as "Parties."
2. RECITALS.
2.1 The CITY and BB&K have entered into that certain Agreement for Legal Services dated as of July 1,2004 ("Agreement") whereby BB&K shall serve the CITY as its City Attorney and Redevelopment Agency Counsel to perform all necessary legal services for the CITY.
2.2 The CITY and BB&K have executed an Amendment No. 3 to the Agreement for Legal Services dated February 7 ,2017 to designate Michael J. Maurer as City Attorney.
2.3 The CITY and BB&K wish to continue such arrangement and to change the BB&K attorney designated as City Attorney from Michael J. Maurer to Craig P. Hayes.
3. TERMS.
3. I Amendment of Section 3. The portion of Section 3.1 of the Agreement added by Amendment no. I is hereby amended to read as follows:
"Craig P. Hayes, of BB&K, shall be the individual attorney of BB&K designated as City Attorney and Successor Agency Counsel. Mr. Hayes shall designate other attorneys of BB&K as Assistant City Attorney or Assistant Successor Agency Counsel or Deputy City Attorney or Deputy Agency Counsel, as necessary. Mr. Hayes shall be responsible for the performance of services under the Agreement and the supervision of services performed by other members of Best Best & Krieger LLP. No change in this designation shall be made without the consent of the City and/or the Successor Agency."
3.2 Amendment. Except as otherwise specifically set forth in this Amendment No. 4, all of the provisions of the Agreement shall remain in full force and effect.
I
24438.00000\4 l 09 r 298. I
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Packet Pg. 409 Attachment: Executed Amendment No. 4 to Legal Services Agreement (Fifth Amendment to City Attorney Legal Services Agreement) DocuSign Envelope lD: 249F5D2E-C96041 83-BC5D-89AF27084886
CITY OF SAN JACINTO
By:
Rob A. Johnson
City Manager
Attest:
jtr^c*W
Julia Espinoza
City Clerk
BEST BEST & KRIEGER LLP
By: b^q kq,,s
Craig P. Hayes
City Attorney
4/17 /2023
Date:
4/L7 /2023 Date:
Datc 4/s/2023
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Packet Pg. 410 Attachment: Executed Amendment No. 4 to Legal Services Agreement (Fifth Amendment to City Attorney Legal Services Agreement) 1 AMENDMENT NO. 5 TO
AGREEMENT FOR LEGAL SERVICES
CITY OF SAN JACINTO
1. PARTIES AND DATE.
THIS AMENDMENT NO. 5 TO AGREEMENT FOR LEGAL SERVICES
(“Amendment No. 5”) is made as of the 5th day of May 2026, by and between the CITY OF SAN JACINTO, a California municipal corporation (“CITY”), and BEST BEST & KRIEGER LLP, a limited liability partnership engaged in the practice of law in the State of California (“BB&K”). BB&K and CITY are sometimes individually referred to herein as “Party” and collectively as “Parties.”
2. RECITALS.
2.1 CITY and BB&K entered into the Agreement for Legal Services dated July 1, 2004 (“Agreement”) whereby BB&K shall serve CITY as its City Attorney and Redevelopment Agency Counsel to perform all necessary legal services for CITY.
2.2 CITY and BB&K amended the Agreement by Amendment No. 1 dated January 19, 2006 to designate Jeffrey S. Ballinger as City Attorney.
2.3 CITY and BB&K amended the Agreement by Amendment No. 2 dated March 25, 2013 to update the terms of the Agreement.
2.4 CITY and BB&K amended the Agreement by Amendment No. 3 dated February 7, 2017 to designate Michael J. Maurer as City Attorney.
2.5 CITY and BB&K amended the Agreement by Amendment No. 4 dated April 4, 2023 to designate Craig P. Hayes as City Attorney.
2.6 CITY and BB&K desire by this Amendment No. 5 to update the terms of the Agreement.
3. TERMS.
3.1 Amendment of Section 3.6.2. Section 3.6.2 of the Agreement is hereby amended to read as follows:
“Specialized Legal Services: All legal services fitting this category shall be billed separately at the following hourly rates: $340 per hour blended rate for all attorneys; $180 per hour for paralegals and law clerks. This category shall include all hourly legal services in excess of the monthly retainer for specialized legal services include, but not limited to, the following:
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Packet Pg. 411 Attachment: Amendment No. 5 to Legal Services Agreement (Fifth Amendment to City Attorney Legal Services Agreement) 2 (1) Litigation and formal administrative or other adjudicatory hearing matters, including code enforcement litigation;
(2) Labor and employment matters including tax and ERISA related matters/employee and retirement benefits;
(3) Public construction disputes;
(4) Complex public utility matters (e.g. electric, natural gas, telecommunications, water, rail or transit that involve state or federal regulatory issues);
(5) Taxes, fees and charges matters (e.g. Prop. 218 & Mitigation Fee Act); (6) Non-routine real estate matters (e.g. CC&R’s, deed or title work), nonroutine land use and development matters (including general plan updates, Williamson Act issues, annexations and development agreements), nonroutine contract negotiations, and non-routine election law matters; (7) Successor Agency and housing matters; and
(8) Environmental issues including toxic substance matters, natural resources, endangered species and water law matters.”
3.2 Amendment. Except as otherwise specifically set forth in this Amendment No. 5, all of the provisions of the Agreement shall remain in full force and effect.
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Packet Pg. 412 Attachment: Amendment No. 5 to Legal Services Agreement (Fifth Amendment to City Attorney Legal Services Agreement) 3 CITY OF SAN JACINTO
By: _____________________________________ Date: _______________________ Rob A. Johnson
City Manager
Attest:
_____________________________________ Date: _______________________ Jill Theriot
Deputy City Clerk
BEST BEST & KRIEGER LLP
By: _____________________________________ Date: _______________________ Craig P. Hayes
City Attorney
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Packet Pg. 413 Attachment: Amendment No. 5 to Legal Services Agreement (Fifth Amendment to City Attorney Legal Services Agreement) May 5, 2026
TO: City Council
REQUESTED BY: Robert Johnson, City Manager
APPROVED BY: Robert A. Johnson, City Manager
SUBJECT: Resolution Support of Preserving and Conserving the Juan Bautista de Anza National Historic Trail
RECOMMENDATION:
Staff recommends that the City Council adopt Resolution No. 4117, in support of Preserving and Conserving the Juan Bautista de Anza National Historic Trail.
DISCUSSION:
The Juan Bautista de Anza National Historic Trail is a significant historical corridor that traces the route of the 1775–1776 expedition led by Juan Bautista de Anza, contributing to the early settlement and development of California. Within the San Jacinto Valley, a segment of the trail located in the southeastern Hemet area along Bautista Road, from Fairview Avenue through the canyon into Anza, remains largely unprotected for preservation and conservation.
This approximately 12-mile portion of the trail lies within a historically significant corridor and presents an opportunity to preserve a landscape reflective of the original expedition experience more than 250 years ago. The area is considered one of the more intact and undeveloped segments of the broader trail system, offering potential for future planning consistent with a nonmotorized recreational corridor.
Preservation of this segment is aligned with broader efforts supported by the National Park Service and the Riverside County Regional Park and Open-Space District, which emphasize recognition, conservation, and partnership in maintaining the historical and cultural integrity of the trail.
Enhancing and preserving this portion of the trail may provide a range of community benefits, including expanded opportunities for hiking, biking, and equestrian use. In addition to recreational value, trail preservation may contribute to increased regional visitation, supporting local economic activity and tourism within the San Jacinto Valley.
The trail also represents an important connection to the region’s broader historical and cultural resources, including local museums, historical sites, and longstanding community traditions.
Preservation efforts aim to promote awareness and appreciation of the area’s heritage while supporting long-term community identity and regional collaboration.
Overall, preservation and conservation of the Juan Bautista de Anza National Historic Trail within the San Jacinto Valley is intended to support historical recognition, recreational opportunities, and regional partnerships, with potential benefits for both current residents and
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Packet Pg. 414
future generations.
Staff recommends that the City Council adopt Resolution No. 4117 in support of preserving and conserving the Juan Bautista de Anza National Historic Trail.
FISCAL IMPACT:
There is no fiscal impact to adopting Resolution No. 4117 in support of preserving and conserving the Juan Bautista de Anza National Historic Trail.
ATTACHMENTS:
Resolution 4117 Support of Preserving and Conserving the Juan Bautista de Anza Trail Juan Bautista de Anza National Historic Trail Foundation Document
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Resolution No. 4117
STATE OF CALIFORNIA ) RESOLUTION NO. 4117
COUNTY OF RIVERSIDE ) ss
CITY OF SAN JACINTO )
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
SAN JACINTO IN SUPPORT OF PRESERVING AND
CONSERVING THE JUAN BAUTISTA DE ANZA
NATIONAL HISTORIC TRAIL
WHEREAS, Juan Bautista de Anza led the historic Anza Expedition of 1775–1776, establishing an overland route that contributed significantly to the settlement and development of California; and
WHEREAS, the Juan Bautista de Anza National Historic Trail traverses areas within present-day Riverside County, reflecting the region’s historical, cultural, and geographic importance; and
WHEREAS, the trail represents a complex and layered history that includes the experiences, cultures, and enduring presence of Indigenous peoples whose ancestral lands the route crossed; and
WHEREAS, in 1990, the United States Congress designated the Juan Bautista de Anza Trail as a National Historic Trail to preserve, protect, and interpret its historical significance for the benefit of current and future generations; and WHEREAS, Riverside County has undertaken efforts to recognize, preserve, and promote the historical, educational, and cultural value of the Juan Bautista de Anza National Historic Trail; and
WHEREAS, preservation of historic resources such as the Juan Bautista de Anza National Historic Trail supports public education, cultural awareness, historical understanding, tourism, and community identity; and
WHEREAS, the City of San Jacinto recognizes the importance of regional cooperation in preserving historically significant sites and corridors that contribute to the shared heritage of Riverside County and the State of California; and
NOW, THEREFORE, THE MAYOR AND CITY COUNCIL MEMBERS OF THE
CITY OF SAN JACINTO, CALIFORNIA, DO HEREBY RESOLVE, DECLARE AND DETERMINE AS FOLLOWS:
BE IT FURTHER RESOLVED, that the City of San Jacinto City Council encourages continued collaboration among Riverside County, local jurisdictions, Indigenous communities, historical organizations, educational institutions, and public agencies to ensure the trail is preserved and interpreted in a respectful, inclusive, and historically accurate manner; and
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Packet Pg. 416 Attachment: Resolution 4117 Support of Preserving and Conserving the Juan Bautista de Anza Trail (Resolution Support of Preserving and Resolution No. 4117
BE IT FURTHER RESOLVED, that the City Clerk is directed to transmit a copy of this resolution to the Riverside County Board of Supervisors and any other appropriate agencies.
PASSED, APPROVED, AND ADOPTED at a regular meeting of the City Council on the 5 th day of May, 2026, by the following vote:
AYES:
NAYS:
ABSENT:
ABSTAIN:
CITY OF SAN JACINTO:
_______________________
Crystal Ruiz, Mayor
ATTEST:
_____________________
Jill Theriot, Deputy City Clerk
APPROVED AS TO FORM:
BEST BEST & KRIEGER LLP
__________________________
Craig Hayes, City Attorney
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Packet Pg. 417 Attachment: Resolution 4117 Support of Preserving and Conserving the Juan Bautista de Anza Trail (Resolution Support of Preserving and Resolution No. 4117
CERTIFICATION
STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE ) SS
CITY OF SAN JACINTO )
I, Jill Theriot, duly appointed Deputy City Clerk of the City of San Jacinto, DO HEREBY CERTIFY that the foregoing Resolution No. 4117 was passed, approved, and adopted by the Regular Meeting of the San Jacinto City Council held on the 5th day of May 2026, by the following vote:
AYES:
NAYS:
ABSENT:
ABSTAIN:
WITNESS MY HAND AND OFFICIAL SEAL this 5th day of May 2026. _____________________________
Jill Theriot, Deputy City Clerk
City of San Jacinto
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Packet Pg. 418 Attachment: Resolution 4117 Support of Preserving and Conserving the Juan Bautista de Anza Trail (Resolution Support of Preserving and Foundation Document
Juan Bautista de Anza National Historic Trail
Arizona and California March 2023
NATIONAL PARK SERVICE • U.S. DEPARTMENT OF THE INTERIOR
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Packet Pg. 419 Attachment: Juan Bautista de Anza National Historic Trail Foundation Document (Resolution Support of Preserving and Conserving the Juan Foundation Document
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Packet Pg. 420 Attachment: Juan Bautista de Anza National Historic Trail Foundation Document (Resolution Support of Preserving and Conserving the Juan Juan Bautista de Anza National Historic Trail
Contents
Mission of the National Trails System 1
Mission of the National Park Service 2
Introduction 3
Part 1: Core Components 4
Brief Description of the Trail 4
Trail Nature and Purpose 5
Trail Significance 6
Fundamental Resources and Values 7
Interpretive Themes 9
Part 2: Dynamic Components 10
Special Mandates and Administrative Commitments 10
Special Mandates 10
Administrative Commitments 11
Assessment of Planning and Data Needs 11
Analysis of Fundamental Resources and Values 11
Identification of Key Issues and Associated Planning and Data Needs 17 Planning and Data Needs 18
Other Potential Internal Activities to Address Issues – Activities Outside of a Structured Planning or Data Gathering Process 21 Part 3: Contributors 22
Juan Bautista de Anza National Historic Trail 22
NPS Regions 8, 9, 10, and 12 22
Other NPS Staff 22
Partners 22
Appendixes 23
Appendix A: Enabling Legislation for Juan Bautista de Anza National Historic Trail 23
Appendix B: Inventory of Administrative Commitments 38
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Packet Pg. 421 Attachment: Juan Bautista de Anza National Historic Trail Foundation Document (Resolution Support of Preserving and Conserving the Juan Foundation Document
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Packet Pg. 422 Attachment: Juan Bautista de Anza National Historic Trail Foundation Document (Resolution Support of Preserving and Conserving the Juan The national
trails system trail
marker logos were
established by the
National Trails
System Act (1968).
Every national
historic or national
scenic trail has its
own official insignia.
1 Juan Bautista de Anza National Historic Trail
Mission of the National Trails System
The national trails system is the network of scenic, historic, and recreation trails created by the National Trails System Act of 1968 and amended over time. This act authorized three types of trails: the national scenic trails, national recreation trails, and connecting and side trails.
National historic trails were authorized under the National Parks and Recreation Act of 1978, amending the National Trails System Act of 1968. These trails provide for outdoor recreation needs, promote the enjoyment, appreciation, and preservation of open-air, outdoor areas and historic resources, and encourage public access and citizen involvement. Currently there are 19 national historic trails and 11 national scenic trails in the national trails system.
The National Trails System Act authorizes trail administrators to work with states or their political subdivisions, landowners, private organizations, or individuals to operate, develop, and maintain any portion of such a trail either within or outside a federally administered area. These partnerships may include provisions for limited financial assistance to encourage participation in the acquisition, protection, operation, development, or maintenance of such trails. Partnerships may also include providing Volunteers- In-Parks status to individuals, private organizations, or landowners participating in these sorts of activities.
National historic trails follow as closely as possible and practicable the original trails or routes of travel of national historical significance. According to the National Trails System Act, national historic trails “have as their purpose the identification and protection of the historic route and its historic remnants and artifacts for public use and enjoyment. Only those selected land and water-based components of a historic trail which are on federally owned lands and which meet the national historic trail criteria established in this Act are included as Federal protection components of a national historic trail.”
National historic trails commemorate historic routes and promote their preservation and development for public use. They recognize diverse facets of history such as prominent past routes of exploration, migration, trade, communication, and military action. Since national historic trails consist of remnant sites and trail segments, they are not necessarily contiguous.
In addition, while they are administered by federal agencies, land ownership of the sites and segments may be in public or private hands.
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Packet Pg. 423 Attachment: Juan Bautista de Anza National Historic Trail Foundation Document (Resolution Support of Preserving and Conserving the Juan The arrowhead was authorized as the official National
Park Service emblem by the Secretary of the Interior
on July 20, 1951. The sequoia tree and bison represent
vegetation and wildlife, the mountains and water
represent scenic and recreational values, and the
arrowhead represents historical and archeological values.
Foundation Document
2 Mission of the National Park Service
The National Park Service (NPS) preserves unimpaired the natural and cultural resources and values of the national park system for the enjoyment, education, and inspiration of this and future generations. The National Park Service cooperates with partners to extend the benefits of natural and cultural resource conservation and outdoor recreation throughout this country and the world.
National Park Service Director’ s Order 45: National Trails System outlines NPS policies and procedures for national scenic and historic trails to ensure that congressionally designated trails are recognized and operated on a consistent basis to ensure protection of the characteristics and values of the trails and their use and enjoyment by future generations.
The NPS core values are a framework in which the National Park Service accomplishes its mission. They express the manner in which, both individually and collectively, the National Park Service pursues its mission. The NPS core values are:
Integrity: We deal honestly, ethically, and fairly with the public and one another.
Stewardship: We provide and inspire exceptional care of the places entrusted to us by the American people.
Respect: We embrace our differences and treat each person with dignity.
Engagement: We each participate fully, extend genuine invitations, and remove barriers to inclusion.
Collaboration: We succeed by engaging beyond our silos, tapping new ideas, and expanding our community.
Accountability: We earn the public’s trust each day by competently and transparently fulfilling our responsibilities.
The National Park Service is a bureau within the Department of the Interior. While numerous national park system units were created prior to 1916, it was not until August 25, 1916, that President Woodrow Wilson signed the National Park Service Organic Act formally establishing the National Park Service.
The national park system continues to grow and comprises more than 400 park units covering more than 84 million acres in every state, the District of Columbia, American Samoa, Guam, Puerto Rico, and the Virgin Islands. These units include, but are not limited to, national parks, monuments, battlefields, military parks, historical parks, historic sites, lakeshores, seashores, recreation areas, scenic rivers and trails, and the White House. The variety and diversity of park units throughout the nation require a strong commitment to resource stewardship and management to ensure both the protection and enjoyment of these resources for future generations.
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Packet Pg. 424 Attachment: Juan Bautista de Anza National Historic Trail Foundation Document (Resolution Support of Preserving and Conserving the Juan 3 Juan Bautista de Anza National Historic Trail
Introduction
A foundation document serves as the underlying guidance for administration and planning decisions for national park units as well as components of the National Trails System.
It describes the core mission of the trail by identifying the trail’s purpose, significance, fundamental resources and values, and interpretive themes. The foundation document also includes special mandates and administrative commitments, an assessment of planning and data needs that identifies planning issues, planning products to be developed, and the associated studies and data required for trail planning. Along with the core components, the assessment provides a focus for trail planning activities and establishes a baseline from which planning documents are developed.
A primary benefit of developing a foundation document is the opportunity to integrate and coordinate all kinds and levels of planning from a single, shared understanding of what is most important about the trail. The process of developing a foundation document begins with gathering and integrating information about the trail. Next, this information is refined and focused to determine what the most important attributes of the trail are. The process of preparing a foundation document aids trail administration and the public in identifying and clearly stating in one document the essential information that is necessary for trail administrators to consider when determining future planning efforts, outlining key planning issues, and protecting resources and values that are integral to trail purpose and identity.
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Packet Pg. 425 Attachment: Juan Bautista de Anza National Historic Trail Foundation Document (Resolution Support of Preserving and Conserving the Juan Foundation Document
4 Part 1: Core Components
The core components of a foundation document include a brief description of the trail, trail nature and purpose, significance statements, fundamental resources and values, and interpretive themes. These components are core because they typically do not change over time. Core components are expected to be used in future planning and administration efforts.
Brief Description of the Trail
The Juan Bautista de Anza National Historic Trail (NHT) is the route traveled by the Anza colonizing expedition during the years 1775–1776. Starting in Sinaloa and Sonora, New Spain which is now in Mexico), Anza led over 240 colonists to San Francisco to establish a mission and presidio. In addition to Anza and Father Pedro Font, the expedition was composed of colonists that included 30 soldiers, their wives, and more than 100 children, as well as indigenous guides, vaqueros, muleteers, and servants, among others. The families reflected mostly the lower castes of colonial Spain—a mix of indigenous, African, and European heritage. The historic trail (also called the Anza Trail) connects Mexico to San Francisco and the 18th century to the 21st century. The Anza Trail invites travelers to learn about the interweaving of the three elements of the Spanish plan for the colonization of its northern frontier: presidios (military forts), missions (religious centers), and pueblos (civilian towns) and makes connections to the current-day consequences of their historical actions. On June 27, 1776, the expedition families arrived in the area that is now San Francisco. Anza forged alliances with several tribes along the route, but ultimately, Spanish colonization advanced a devastating blow to the tribal world as it existed. Today, the tribal communities whose lands Anza traveled through—Quechan, Ohlone, O'odham, Tongva, and many more—continue to thrive and pass on their traditions. The descendants of these colonist Californio families also commemorate their heritage along the Anza Trail. The current 1,200-mile Juan Bautista de Anza National Historic Trail connects history, culture, and outdoor recreation from Nogales, Arizona, to the San Francisco Bay area. A marked auto route approximates the areas where the expedition traveled. Several communities, public lands, and parks offer developed segments of the Anza Recreation Trail for walking, hiking, horse riding, and bicycling.
Administered by the National Park Service, the Juan Bautista de Anza National Historic Trail is a component of both the national trails system and the national park system. The National Park Service administers the Juan Bautista de Anza National Historic Trail in partnership with other federal, state, and local agencies; tribal governments; nonprofit organizations; and private landowners. The NPS role includes leadership for the trail and establishing best practices and ensuring consistency among all partners involved with administration and on-the-ground management of the trail and trail resources.
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Packet Pg. 426 Attachment: Juan Bautista de Anza National Historic Trail Foundation Document (Resolution Support of Preserving and Conserving the Juan 5 Juan Bautista de Anza National Historic Trail
Trail Nature and Purpose
The nature and purpose statements identify the geographical extent and historic use of a particular national historic trail and the public purposes for which it was designated by Congress.
The nature of any national historic trail is defined by the trail’ s physical and historical qualities:
its geographical extent and route alignment, geophysical contexts (e.g., plains, mountains, deserts, major rivers and landmarks), terrain, historic remnants, historic landscapes and settings, and historic use during the trail’s established period of historical significance. The nature of a trail can vary across its length as it enters different ecoregions and terrains.
The nature and purpose statements for the Juan Bautista de Anza National Historic Trail were drafted through a careful analysis of its enabling legislation and the legislative history that influenced its development. The trail was established when the National Trails System Act was amended on August 15, 1990 (appendix A). The nature and purpose statements lay the foundation for understanding what is most important about the trail.
The specific nature of the Juan Bautista de Anza National Historic Trail is as follows:
As defined by the National Trails System Act ( NTSA), the Juan Bautista de Anza National Historic Trail’s purpose is as follows:
The identification and protection of the historic route and its historic remnants and artifacts for public use and enjoyment [NTSA section 3 (3)], which provides
recreational use or historical interest based on historic interpretation and appreciation. [ NTSA section 5 (b) (11) C]
The Juan Bautista de anza national
Historic trail commemorates and
interprets the route, complex story, and
compelling landscapes of the 1775–1776
Anza Colonizing Expedition from Sonora,
Mexico, to current-day San Francisco,
California. Whether entwined with a city
or isolated from civilization, the trail offers
adventure, diverse cultural perspectives,
multiple narratives, and an opportunity to
experience history by linking the past with
the present. Working with volunteer trail
groups, trail managers strive to develop,
maintain, and steward the trail for present
and future generations to use and enjoy.
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Packet Pg. 427 Attachment: Juan Bautista de Anza National Historic Trail Foundation Document (Resolution Support of Preserving and Conserving the Juan Foundation Document
6 Trail Significance
Statements of significance for national historic trails describe the distinctive nature of the trail and the significance of the trail in the nation’ s history. They focus on historical uses and experiences, important places, remnants, and geographies, and values that will assist in trail planning and administration. These statements are linked to the nature and purpose of the Juan Bautista de Anza National Historic Trail and are supported by data, research, and consensus.
They help to define the fundamental resources and values to be considered in planning, protection, and development of the designated route.
The following significance statements have been identified for Juan Bautista de Anza National Historic Trail. (Please note that the sequence of the statements does not reflect the level of significance.)
The Anza expedition was the first military-led colonizing expedition to Alta California and was an integral part of Spain’s geopolitical and global empire building strategy. This expedition established Spanish power through colonization, a path that came at the expense of indigenous peoples and their cultures.
The members of the Anza expedition represented families of indigenous, African, and European heritage. They migrated, seeking opportunity, and brought with them their language, customs, and traditions. They established military outposts, missions and ranchos on lands occupied by existing indigenous peoples and nations—a reminder of our complicated American story. All had a significant impact on the cultures of the indigenous peoples and on the development of California and its layered heritage.
The landscapes of the Juan Bautista de Anza National Historic Trail, from urban to rural, reflect the legacy of the Anza expedition and provide a framework for understanding its stories.
The Juan Bautista de Anza National Historic Trail allows for the creation of a contiguous, over 1,210-mile-long recreation trail that provides opportunities to physically traverse and experience the stories and landscapes of the historic expedition’ s corridor.
The Juan Bautista de Anza National Historic Trail historic corridor passes through a wide variety of communities: rural, urban, indigenous, and international. Inherent in this cultural corridor is a unique opportunity for cultural exchange and recreation, inspiring a great number and diversity of people in their own communities to connect with the places, spaces and stories while providing a setting for dialogue and healing.
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Packet Pg. 428 Attachment: Juan Bautista de Anza National Historic Trail Foundation Document (Resolution Support of Preserving and Conserving the Juan 7 Juan Bautista de Anza National Historic Trail
Fundamental Resources and Values
Fundamental resources and values (FRVs) are those features, systems, processes, experiences, stories, scenes, sounds, smells, or other attributes determined to warrant primary consideration during planning and management processes because they are essential to achieving the purpose of the trail and communicating its significance. Fundamental resources and values are closely related to a trail’s legislative purpose and are more specific than significance statements.
Fundamental resources and values help focus planning and administrative efforts on those resources and qualities of a national historic trail that help convey its significance to the public. One of the most important responsibilities of trail administrators is to ensure the conservation and public enjoyment of those qualities that are essential to achieving the purpose of the trail and communicating its significance. If fundamental resources and values are ignored or allowed to deteriorate, then the collective significance of the historic route may be compromised, along with opportunities for public use and enjoyment, and the trail will not achieve its designated purposes.
The following fundamental resources and values have been identified for the Juan Bautista de Anza National Historic Trail:
Retracement Project. A retracement project synthesizes the history of a journey with the physical path of travel, continually reassembling layered stories and associating/ mapping them with paths and places accessible in the present. The congressional charge to create a recreation retracement route was
once unique to the Anza trail; now it is included in
other NHT enabling legislation. This project ties
all aspects of the trail’s resources and management
together, connecting sites, landscapes, people, and
the stories that make up the Anza Trail corridor.
Beyond a simple recreation trail experience, this
project builds on past historiographic work to
connect urban, remote, and historic places, from
the seemingly ordinary to the spectacular and
the evolving/ continuing legacy of the expedition.
The network of connections, sites, and stories
creates opportunity for people to build upon their
understanding as they experience more of the Anza
trail, merging history with mobility.
Partnerships. Administration of the Juan Bautista
de Anza National Historic Trail is achieved through
close partnership with federal, state, and local
agencies, indigenous peoples, tribes, community
organizations, volunteers, private landowners,
Mexican institutions, and many others. These
partnerships are essential to the success and
relevance of the trail. The trail provides a framework
and cultivates a synergy between partners. Their
collaboration and contributions enrich and honor
the multiple, complex, and emerging narratives
through research, recreational and educational
opportunities, preservation, promotion, and
interpretation. These partnerships are instrumental
in engaging communities along the trail.
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Packet Pg. 429 Attachment: Juan Bautista de Anza National Historic Trail Foundation Document (Resolution Support of Preserving and Conserving the Juan Foundation Document
8 Recreation Trail. The vision for the recreation trail is that it is a continuous trail that offers a way for users to fully immerse themselves in the experience that is the Anza Trail. The recreation trail is a tangible experience of place for people and offers the opportunity to relate to the story and legacy of the expedition through the physical act of travelling the trail. Engaging with the recreation trail provides immersion and familiarity with a particular place within the corridor while enhancing understanding of the broader story and intertwining it with the retracement project.
Historic Sites, Artifacts, Primary Sources, and Documents. The history of the Juan Bautista de Anza National Historic Trail is preserved in an extensive assemblage of historic sites, documents, and oral histories. These include trail segments, research and primary source documents, tribal testimony, and high-potential historic and interpretive sites that collectively tell the human story of the Anza expedition. National Park Service trail administrators provide resources and a point of reference that are fundamental to fulfilling the academic, interpretive, and historic purposes of the trail.
This is accomplished through partnerships, since the National Park Service does not itself establish or maintain historic and interpretive sites or manage the collection of resources or digital and traditional access.
Education and Interpretation. The accounts and evidence of life on the trail and its evolving landscape provide learning opportunities to a broad spectrum of individuals, from people initially encountering the trail to scholars. Through interpretation, trail users engage with the complex histories and cultures of this ancient and ever-evolving corridor. The complexity of these stories provides the opportunity and framework to understand multiple narratives and can serve as a space to have dialogue to reflect on and reconcile the legacy of the expedition. The collaborative development of interpretation and education, through partnerships, provides opportunities for healing through a more complete understanding of heritage in the United States. This, in turn, attracts new and diverse audiences to foster growth among trail stewards and supporters.
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Packet Pg. 430 Attachment: Juan Bautista de Anza National Historic Trail Foundation Document (Resolution Support of Preserving and Conserving the Juan 9 Juan Bautista de Anza National Historic Trail
Interpretive Themes
Interpretive themes are the key stories or concepts that visitors should understand after visiting a trail or engaging with interpretive media about the trail—they define the most important ideas or concepts communicated to visitors about a component of the national trails system.
Themes are derived from, and should reflect, trail purpose, significance, resources, and values.
The set of interpretive themes is complete when it provides the structure necessary for trail administrators to develop opportunities for visitors to explore and relate to all trail significance statements and fundamental resources and values.
Interpretive themes are an organizational tool that reveal and clarify meaning, concepts, contexts, and values represented by trail resources. Sound themes are accurate and reflect current scholarship and science. They encourage exploration of the context in which events or natural processes occurred and the effects of those events and processes. Interpretive themes go beyond a mere description of the event or process to foster multiple opportunities to experience and consider the trail and its resources. These themes help explain why a trail story is relevant to people who may otherwise be unaware of connections they have to an event, time, or place associated with the trail.
The following interpretive themes have been identified for Juan Bautista de Anza National Historic Trail:
The network of trails that became the expedition route and the Anza trail have existed for millennia as indigenous pathways.
The Anza expedition history represents the universal theme of people crossing great distances and enduring tremendous hardships in the hopes of finding a better life for themselves and their families.
The colonists’ diverse cultural backgrounds laid the foundation for what California would become.
Generations of people living in what is now California have been and continue to be impacted by the colonial actions of the Spanish Empire. Particularly, colonization came at the expense of the indigenous peoples through subjugation and the taking of land.
The Anza expedition, and the resulting colonization, was a major catalyst for change in natural and cultural landscapes.
Today, the trail weaves through
landscapes layered with biological and
cultural significance; the trail is a thread
connecting communities, ecosystems,
and a great diversity of people.
The Anza trail and its development
connect people and cultures through
time. The embodied experience
of traversing the trail creates a
setting for deeper dialogue about
colonization, changing landscapes, and
cultural heritage.
The Anza trail and its development can
serve as a setting for understanding and
healing through stewardship, service,
recreation, dialogue, and the sharing of
space and stories.
3.A.14.b
Packet Pg. 431 Attachment: Juan Bautista de Anza National Historic Trail Foundation Document (Resolution Support of Preserving and Conserving the Juan Foundation Document
10 Part 2: Dynamic Components
The dynamic components of a foundation document include special mandates and administrative commitments and an assessment of planning and data needs. These components are dynamic because they will change over time. New special mandates can be established and new administrative commitments made. As conditions and trends of fundamental resources and values change over time, the analysis of planning and data needs will need to be revisited and revised, along with key issues. Therefore, this part of the foundation document will be updated accordingly.
Special Mandates and Administrative Commitments
Administration of a national historic trail may be directed or influenced by special mandates and commitments with other federal agencies, state and local governments, partnering organizations, and other entities. Special mandates are requirements specific to a trail that must be fulfilled. Mandates can be expressed in enabling legislation, in separate legislation following the establishment of a national historic trail, or through a judicial process. They may expand on the trail’s nature and purpose or introduce elements unrelated to the nature and purpose of the trail. Administrative commitments have generally been reached through formal, documented processes, often through various types of agreements. Examples include partnership certifications with nonfederal landowners, etc. Special mandates and administrative commitments can support, in many cases, a network of partnerships that help fulfill the objectives of the trail and facilitate working relationships with other organizations.
They are an essential component of administering and planning for the Juan Bautista de Anza National Historic Trail.
Special Mandates
In its enabling legislation, Juan Bautista de Anza National Historic Trail is charged to “encourage volunteer trail groups to participate in the development and maintenance of the trail.”
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Packet Pg. 432 Attachment: Juan Bautista de Anza National Historic Trail Foundation Document (Resolution Support of Preserving and Conserving the Juan 11 Juan Bautista de Anza National Historic Trail
Administrative Commitments
Juan Bautista de Anza National Historic Trail administrative commitments are defined by its designation as a national historic trail and through the provisions of the National Trails System Act (Public Law [PL] 09-543 as amended through PL 111-11), specifically section 3 ( 16 United States Code [USC] 1242), as follows:
National historic trails will be extended trails that follow the original trails or routes of travel of national historic significance as closely as possible and practicable.
Designation of such trails or routes shall be continuous, but the established or developed trail, and the acquisition thereof, need not be continuous on site.
National historic trails shall have as their purpose the identification and protection of the historic route and its historic remnants and artifacts for public use and enjoyment.
Only those selected land- and water-based components of a historic trail that are on federally owned lands and meet the national historic trail criteria established in this act are included as federal protection components of a national historic trail.
The appropriate secretary may certify other lands as protected segments of a historic trail upon application from state or local governmental agencies or private interests involved if such segments meet the national historic trail criteria established in this act and such criteria supplementary thereto as the appropriate secretary may prescribe and are administered by such agencies or interests without expense to the United States.
For more information about the administrative commitments for Juan Bautista de Anza National Historic Trail, please see appendix B.
Assessment of Planning and Data Needs
This section presents planning issues, the planning projects that will address these issues, and the associated information requirements for planning, such as resource inventories and data collection, including GIS data.
There are three sections in the assessment of planning and data needs:
1. analysis of fundamental resources and values
2. identification of key issues and associated planning and data needs and other internal activities
3. identification of planning needs, data needs ( including spatial mapping activities or GIS maps), and other internal activities
The analysis of fundamental resources and values and identification of key issues leads up to and supports the identification of planning and data collection needs and other internal activities.
Analysis of Fundamental Resources and Values
The fundamental resource and value analysis table includes current conditions, potential threats and opportunities, planning and data needs, and selected laws and NPS policies related to management of the identified resource or value. These topics are not listed by order of priority.
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Packet Pg. 433 Attachment: Juan Bautista de Anza National Historic Trail Foundation Document (Resolution Support of Preserving and Conserving the Juan Foundation Document
12 Fundamental
Resource or Value Retracement Project
Current Conditions
and Trends
Conditions
Retracement links the stories ( research, narrative, history) to the physical trail ( mapped, constructed)
Public historians contribute and may or may not agree with one another There is no authoritative source
The Juan Bautista de Anza National Historic Trail does not own or manage any of the primary documents associated with the trail
While public lands have provided significant opportunities for retracement trail projects, connecting story to site outside the federal or state land systems represents a massive and complex project of relationship- building and physical planning Trends
Trail projects, formerly focused primarily on mobility, are increasingly thought of as places of meaning and memory
Interest is growing in the legacy of the trail, along with recognition of multiple evolving historical narratives, many of which were previously unacknowledged Threats and
Opportunities
Threats
Trail staff cannot possibly manage the stories or materials being produced by partners or interested people
The recreation trail may be at a distance from the historic corridor, and the means to connect/ interpret physical trail to historical place, corridor, or context may be diffuse Opportunities
Provide interpretive training for docents
Host brown bag meetings to discuss topics or highlight volunteers to help manage the narrative
Increase support for active transportation projects and funding Data and/or GIS Needs
Tribal member oral histories
Historic resource study
Ethnology study
Inventory of existing nonpersonal interpretive media
Planning Needs
Community partner engagement plan
Comprehensive interpretive planning
Comprehensive recreation trail planning
Strategy/ conservation of high potential site strategy
Laws, Executive
Orders, and
Regulations That
Apply to the FRV,
and NPS Policy-Level
Guidance
Laws, Executive Orders, and Regulations That Apply to the FRV National Trails System Act of 1968, as amended
NPS Policy- Level Guidance ( NPS Management Policies 2006 and Director’ s Orders) Director’ s Order 45: National Trails System.
NPS Management Policies 2006 (§1 10) “ Partnerships ”
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Packet Pg. 434 Attachment: Juan Bautista de Anza National Historic Trail Foundation Document (Resolution Support of Preserving and Conserving the Juan Juan Bautista de Anza National Historic Trail
13 Fundamental
Resource or Value Education and Interpretation
Current Conditions
and Trends
Conditions
The historic 1849 Martinez Adobe at the John Muir National Historic Site, which houses the only permanent Anza trail exhibit, has been closed due to the need for structural repairs This building closure is expected to last until 2026 Partnership with education nonprofit organization engages over 3, 700 third- and fourthgrade students in Southern Arizona and Southeast California Nonpersonal interpretive media ( waysides and exhibits) are located along high- potential segments and historic sites along the trail
Volunteer groups provide interpretation and education on Amtrak and as reenactors Trends
Through cooperative agreements with nonprofit organizations, students and youth are educated and engaged
The NPS app and online resources are becoming the entry points for public engagement Threats and
Opportunities
Threats
Interpretation volunteerism is declining
The new generations of trail supporters is not connecting with the trail due to a lack of mentors, a generation gap, and a lack of relevancy to the colonial story Interpretive media along the trail is becoming “ invisible” through overuse or irrelevant methods
Opportunities
Take advantage of the designation and development of the Santa Cruz Valley Heritage Area, which is a boon to the Anza trail interpretation The trail is recognized in the community as the spine of the heritage area
Provide recognition and support for national trails through the NPS VIP program Work with partners to improve the relevancy of the trail and connect with new audiences, focusing on multiple narratives, working with partners who work with youth and tribal representatives, and finding new methods for telling stories Find new ways to engage the public on the trail through nonpersonal interpretive media and think outside of the wayside
Data and/or GIS Needs
Inventory of existing nonpersonal interpretive media, including condition and relevancy Public use data along existing certified segments of the trail for use in planning, outreach, and prioritizing projects
Planning Needs • Comprehensive interpretive planning
Laws, Executive
Orders, and
Regulations That
Apply to the FRV,
and NPS Policy-Level
Guidance
Laws, Executive Orders, and Regulations That Apply to the FRV National Trails System Act of 1968, as amended
NPS Policy- Level Guidance ( NPS Management Policies 2006 and Director’ s Orders) NPS Management Policies 2006 (§ 1 4) “ Park Management ” NPS Management Policies 2006 (§ 1 6) “ Cooperative Conservation Beyond Park Boundaries ”
NPS Management Policies 2006 (§ 3 1) “ General ”
Director’ s Order 45: National Trails System.
Comprehensive management plan
Director’ s Order 6: Interpretation and Education.
Director’ s Order 7: Volunteers-in-Parks.
Director’ s Order 45: National Trails System.
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Packet Pg. 435 Attachment: Juan Bautista de Anza National Historic Trail Foundation Document (Resolution Support of Preserving and Conserving the Juan Foundation Document
14 Fundamental
Resource or Value Historic Sites, Artifacts, Primary Sources, Documents Current Conditions
and Trends
Conditions
The Juan Bautista de Anza National Historic Trail does not own collections Primary documents are dispersed in various collections
Associating any artifacts with the expedition is difficult Many of high- potential historic sites and segments are certified by the Anza Trail Trends
Primary documents are easily accessible online
GIS and mapping allows for understanding and further research of the trail corridor, significant sites, and segments
Interest in Spanish colonial archaeology in Arizona has yielded finds that could justify location of historic campsites and segments
Ongoing effort to certify high- potential sites and segments Threats and
Opportunities
Threats
Items that are associated with the trail legacy, such as saddles from the reenactment rides in the 1970s, are in dispersed, private ownership
A potential exists for a loss of oral history resources Skepticism exists of oral histories and stories as valid sources
Scholarship is waning
Opportunities
Develop partnerships with appropriate archives or collection owners to highlight primary sources
Cost share projects to help identify and protect historic sites and segments Use GIS to better estimate the size and shape of the historic campsite footprints Collaborate with partners/ cooperative ecosystem study units for scholarship support, including ethnographic work on indigenous origins of colonists Data and/or GIS Needs •
Collaborate to collect oral histories and stories from tribal members along the corridor Create a historic site and materials survey
Planning Needs •
Comprehensive interpretive planning
Community partner engagement plan
Laws, Executive
Orders, and
Regulations That
Apply to the FRV,
and NPS Policy-Level
Guidance
Laws, Executive Orders, and Regulations That Apply to the FRV National Trails System Act of 1968, as amended
Museum Properties Management Act of 1955, as amended
Disposition of Federal Records” ( 36 CFR 1228)
Disposal of Records” ( 44 USC 3301 et seq )
Federal Records; General” ( 36 CFR 1220)
Federal Records Act of 1950
Preservation, Arrangement, Duplication, Exhibition of Records” ( 44 USC 2109) Research Specimens” ( 36 CFR 2 5)
Curation of Federally- Owned and Administered Archaeological Collections” ( 36 CFR 79) Preservation of American Antiquities” ( 43 CFR 3)
NPS Policy- Level Guidance ( NPS Management Policies 2006 and Director’ s Orders) Director’ s Order 24: NPS Museum Collections Management.
NPS Management Policies 2006 (§ 4 2) “ Studies and Collections ” NPS Management Policies 2006 (§ 8 10) “ Natural and Cultural Studies, Research, and Collection Activities ”
NPS Museum Handbook, parts I, II, and III
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Packet Pg. 436 Attachment: Juan Bautista de Anza National Historic Trail Foundation Document (Resolution Support of Preserving and Conserving the Juan Juan Bautista de Anza National Historic Trail
15 Fundamental
Resource or Value Recreation Trail
Current Conditions
and Trends
Conditions
The condition of recreational and educational sites along the length of the trail varies greatly Some are developed and in great shape, some are in the planning stages of development, and others need work or have not yet been recognized The trail has many Passport to Your National Parks stamp locations available to visitors Trends
Recent decades have seen high- profile urban trails projects proliferate to much acclaim Threats and
Opportunities
Threats
Viewsheds and historic scenes enjoyed by recreationists are threatened by development Annual storms damage trails The frequency and severity are increasing in some areas Sustaining partner and volunteer groups to maintain the trail can be difficult Opportunities
Take advantage of the 250th Commemoration
Respond more proactively to increased support of urban trail planning Create better GIS data and partner contribution
Map the collaborator and automated updates to online maps Increase the visibility of recreation trail segments with new audiences using the NPS online app
Data and/or GIS Needs
Inventory of existing nonpersonal interpretive media
Trail use data
Trail gap analysis
Vulnerability assessment
Map and inventory of places to recreation on the trail
Planning Needs •
Comprehensive recreation trail planning
Accessibility self- evaluation and transition plan
Laws, Executive
Orders, and
Regulations That
Apply to the FRV,
and NPS Policy-Level
Guidance
Laws, Executive Orders, and Regulations That Apply to the FRV National Trails System Act of 1968, as amended
NPS Policy- Level Guidance ( NPS Management Policies 2006 and Director’ s Orders) NPS Management Policies 2006 (§ 8 1) “ General ”
NPS Management Policies 2006 (§8 2) “ Visitor Use ”
NPS Management Policies 2006 (§ 8 2 2) “ Recreational Activities ” Director’ s Order 7: Volunteers- in-Parks.
Director’ s Order 45: National Trails System.
3.A.14.b
Packet Pg. 437 Attachment: Juan Bautista de Anza National Historic Trail Foundation Document (Resolution Support of Preserving and Conserving the Juan Foundation Document
16 Fundamental
Resource or Value Partnerships
Current Conditions
and Trends
Conditions
The Anza Trail Foundation is the primary organization dedicated to supporting and fundraising for the Anza National Historic Trail
The trail is supported by a variety of partners, including land managing agencies, local agencies and community organizations and sites, as well as volunteer groups and individuals
Trends
Establishment and maintenance of the recreational trail and sites tend to be coordinated and managed by agencies ( federal, state, county, and local) and less so by volunteer organizations
Steady collaboration with organizations and agencies in Mexico highlights the international potential of the trail
Threats and
Opportunities
Threats
High turnover among staff of partner entities ( government and tribes, for example) is occurring, requiring continuous outreach to maintain attention and correct points of contact
Managing large, dispersed volunteer group is challenging ( NPS safety requirements, insurance, or even interpretive messaging)
Long- time trail partners are retiring or passing away
Opportunities
Foster relationships with national partners and friends’ groups with shared goals and the ability to increase the relevancy of the trail and its history Expand partnerships to include additional nongovernmental organizations and metropolitan planning organizations
Form a national partnership to aid in linking regional and local partners nationwide and elevating initiatives to a national level
Encourage communities along the trail to recognize the cultural resources and economic advantages that the trail could provide for them
Engage with new partners and volunteers helps broaden the perspectives included in our work
Build relationships with tribal representatives along the corridor Pursue international trail designation and close work with organizations and agencies in Mexico
Collaborate with partners to fundraise for trail implementation and interpretation Data and/or GIS Needs
Trail gap analysis
Vulnerability assessment
Map and inventory of places to recreate on the trail
Planning Needs
Comprehensive recreation trail planning
Community partner engagement plan
Comprehensive interpretive planning
Laws, Executive
Orders, and
Regulations That
Apply to the FRV,
and NPS Policy-Level
Guidance
Laws, Executive Orders, and Regulations That Apply to the FRV National Trails System Act of 1968, as amended
NPS Policy- Level Guidance ( NPS Management Policies 2006 and Director’ s Orders) Director’ s Order 45: National Trails System.
NPS Management Policies 2006 (§1 10) “ Partnerships ”
Director’ s Order 7: Volunteers- in-Parks.
Director’ s Order 21: Philanthropic Partnerships.
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Packet Pg. 438 Attachment: Juan Bautista de Anza National Historic Trail Foundation Document (Resolution Support of Preserving and Conserving the Juan 17 Juan Bautista de Anza National Historic Trail
Identification of Key Issues and Associated Planning and Data Needs This section considers key issues to be addressed in planning and management and therefore takes a broader view over the primary focus of part 1. A key issue focuses on a question that is important for a trail. Key issues often raise questions regarding trail purpose and significance and fundamental resources and values. For example, a key issue may pertain to the potential for a fundamental resource or value in a trail to be detrimentally affected by discretionary management decisions. A key issue may also address crucial questions that are not directly related to purpose and significance, but which still affect them indirectly. Usually, a key issue is one that a future planning effort or data collection needs to address and requires a decision by NPS trail administrators.
The following are key issues for the Juan Bautista de Anza National Historic Trail and the associated planning needs, data needs, and other internal activities to address them:
Relevancy. The trail and its stories lack visibility and engagement. Many people are unaware of this part of American heritage. The stories risk becoming stagnant and irrelevant in a changing cultural landscape. Antiquated ways of thinking that don’t allow multiple stories to share the same space will prevent a full understanding of the trail’s relevance and meanings. A lack of generational, cultural, and ethnic diversity in trail users, partners, and staff could threaten the relevancy of the trail and its stories. The challenge of “seeing” the trail on the ground, particularly in some of the most urbanized areas, prevents people from making connections to the stories and participating in the continuing legacy of the trail.
Associated planning needs: Comprehensive interpretive planning, comprehensive recreational trail planning, community partner engagement plan Associated data needs: Inventory of existing nonpersonal interpretive media, tribal member oral histories, ethnology study, trail use data, historic site and materials survey, historic resource study
Trail Corridor Planning. The physical trail is not continuous and lacks meaningful experiential quality. Using established goals and methods, the physical trail component has limited tools by which to assert itself and improve sense of place. With current practices, the trail will fail to achieve its goals of continuity and experiential quality.
Development, including urbanization, agriculture, transportation, and energy projects occur without consideration and inclusion of the trail corridor. Climate change is a major threat to the ecosystems along the trail. Without functioning ecosystems and sensitive development ( safety, visual, scenic), fewer people will want to walk the trail.
Associated planning needs: Comprehensive recreational trail planning, community partner engagement plan, accessibility self-evaluation and transition plan Associated data needs: Trail gap analysis, vulnerability assessment, visual resource inventory, trail use data, historic site and materials survey, historic resource study Trail Stewardship. Relying on volunteers to carry the load of managing the trail is a challenging model. The trail has experienced declining interest, with many committed volunteers aging out. To maintain and build these vital relationships, NPS staff must continually engage with all trail partners in their work to support the trail. This involves maintaining trail volunteers and working with partners to identify opportunities to support the capacity needs of individual partner organizations. These and other actions would assist the National Park Service’ s efforts to prevent threats to key trail resources, such as vandalism, neglect, and other forms of deterioration.
Associated planning needs: Comprehensive recreational trail planning, community partner engagement plan
Associated data needs: Visual resource inventory, trail use data
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Packet Pg. 439 Attachment: Juan Bautista de Anza National Historic Trail Foundation Document (Resolution Support of Preserving and Conserving the Juan Foundation Document
18 Planning and Data Needs
To maintain connection to the core elements of the foundation and the importance of these core foundation elements, the planning and data needs listed here are directly related to protecting fundamental resources and values, trail significance, and trail purpose, as well as addressing key issues. To successfully undertake a planning effort, information from sources such as inventories, studies, research activities, and analyses may be required to provide adequate knowledge of trail resources and visitor information. Such information sources have been identified as data needs. Geospatial mapping tasks and products are included in data needs.
Items considered of the utmost importance were identified as high priority, and other items identified, but not rising to the level of high priority, were listed as either medium- or lowpriority needs. These priorities inform trail administration efforts to secure funding and support for planning projects.
Planning Needs – Where a Decision- Making Process Is Needed Related to
an FRV or
Key Issue?
Planning
Needs
Priority
H, M, L) Notes
Key Issue, FRV Comprehensive
recreation trail
planning
H Planning is required to identify
opportunities and development concepts
that advance the creation of a continuous
recreation trail This planning effort and
associated data needs will serve as the
backbone of the other planning efforts
along the recreation trail Without
understanding the geographic context and
the breadth of development opportunities
along the trail, Juan Bautista de Anza
National Historic Trail is not able to move
forward with its retracement project
The National Park Service would work
with partner agencies and landowners
to prioritize feasible action strategies for
trail development The planning process
would provide an opportunity for the
implementation partners and stakeholders
to engage with the public to incorporate
their ideas The plan would identify and
evaluate proposed locations for trail
development and types of trail use and
would create consistent management
strategies among the entities and agencies
involved Climate change considerations
would be incorporated into the planning
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Packet Pg. 440 Attachment: Juan Bautista de Anza National Historic Trail Foundation Document (Resolution Support of Preserving and Conserving the Juan 19 Juan Bautista de Anza National Historic Trail
Planning Needs – Where a Decision- Making Process Is Needed Related to
an FRV or
Key Issue?
Planning
Needs
Priority
H, M, L) Notes
Key Issue, FRV Community
partner
engagement
strategy
H This strategy would help the trail identify
who is missing from participation and
strategize cultivating new relationships,
including among Native Americans and
international partners This planning
would include a communications strategy
designed to help the trail engage others,
based first on listening and understanding
community perspectives In addition, the
strategy would help the trail develop
more stewardship groups, especially in
areas where the trail staff is not currently
present, and would inspire ownership and
interest in the trail
Key Issue, FRV Comprehensive
interpretive
planning
H Comprehensive interpretive planning
would include updating the 2003 longrange interpretive plan to better address relevancy and emerging perspectives This
plan would describe visitor experience
goals and recommend a wide variety
of both personal ( programs, personal
contacts) and nonpersonal ( interpretive
media and facilities) interpretive services
and outreach activities that would
best communicate the trail’ s purpose,
significance, and themes Interpretive
media would be matched to messages to
make sure they work well individually and
collectively
Key Issue Accessibility selfevaluation and
transition plan
M This plan consists of evaluation and
assessment of barriers to accessibility,
both physical and programmatic The
outcome of this holistic and programbased planning process is an accessible and spatially referenced document that
will guide trail staff and decision makers in
assessing, prioritizing, and implementing
solutions for universal accessibility
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Packet Pg. 441 Attachment: Juan Bautista de Anza National Historic Trail Foundation Document (Resolution Support of Preserving and Conserving the Juan Foundation Document
20 Data Needs – Where Information Is Needed before Decisions Can Be Made Related to
an FRV or
Key Issue?
Data and GIS
Needs
Priority
H, M, L) Notes
N/A Inventory
of existing
nonpersonal
interpretive
media
H Improved knowledge and awareness of
interpretive materials and programs offered
would help trail administrators identify and
address gaps in interpretive offerings In
particular, existing media would be assessed
by condition and relevancy
N/A Trail gap analysis H Opportunities for continuous recreation trail development would be determined
N/A Vulnerability
assessment
H Potential recreation trail areas vulnerable to
development and conflicting uses would be
determined ( pair with trail gap analysis)
N/A Tribal member
oral histories
H Collaborate to collect and preserve oral
histories and stories from tribal members
along the corridor
N/A Historic site and
materials survey
H Create a document of resources available
through partner sites and institutions
N/A Historic resource
study
H Create a trail- long historic resource study
and plan with a survey of historic campsites
preparation of listing of significant sites/
entered into national register/ call for
protection of the sites) and a resource
protection plan for sites
N/A Ethnology study H This study would include a defensible ethnological study of the members and
cultures of the expedition
N/A Map and
inventory of
places to recreate
on the trail
H Mapping recreational opportunities
would improve the National Park Service’ s
ability to promote outdoor recreation
and visitor experiences along the trail and
would include hiking, biking, birding, and
horseback riding
N/A Administrative
history
M –
N/A Visual resource
inventory
M This inventory would acquire documentation
to identify high- potential sites and segments
along the trail This can include digital
elevation models to understand how
proposed development would impact them
N/A Biological/ natural
resource surveys
for key areas
M Initially, a resource study would identify
key areas, followed by specific resource
survey( s)
N/A Trail use data M Data would be collected along existing certified segments of the trail for use in
planning, outreach, and prioritizing projects
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Packet Pg. 442 Attachment: Juan Bautista de Anza National Historic Trail Foundation Document (Resolution Support of Preserving and Conserving the Juan 21 Juan Bautista de Anza National Historic Trail
Other Potential Internal Activities to Address Issues – Activities Outside of a Structured Planning or Data Gathering Process
Standardize data formats from trail partners.
Improve business practices to keep data updated across the trail.
Create trail orientation standard operating procedures and templates.
Develop a wayfinding guide.
Write certification standard operating procedures for high- potential segments versus the recreation trail.
Target outreach to gap communities (hiring to do so if needed).
Conduct educational and listening sessions with trail partners to update interpretive techniques and messaging.
Continue to work with partners who focus on youth programming and engagement.
Create mentoring opportunities between established partners and volunteers.
Develop sustainable relationships with tribal nations along the trail, and including indigenous stories and voices in planning and interpretation (and early in the process).
Emphasize public history projects and urban trail planning and interpretive projects.
Create a plan and timeline for the 250th Commemoration. This is an incredible opportunity to highlight the trail and communicate its stories and relevancy to the public, connecting to new audiences with new media and focusing on a multiplenarrative approach.
Pursue opportunities to connect the US and Mexico segments of the trail corridor; foster a productive and sustainable working relationship with INAH, the State of Sonora, and the State of Baja, with the intention of formalizing a binational link (sister park relationship, memorandums of understanding).
Pursue projects that embrace native voices in collaboration. Develop an interpretive program that allows for both stories to be told equitably. The Anza Trail can be a shared space for all stories to be told.
Take on projects involving large groups such as schools, universities, and communitybased organizations. Youth-based activities involving organizations, such as the ironwood tree experience, improve awareness.
Increase activity on social media.
Increase restoration projects like the Santa Cruz River reconciliation project. These projects will be crucial to fighting the effects of climate change and preserving these important natural resources.
Study and incorporate urban trail projects and principles. Recent decades have experienced high-profile urban trails projects proliferate to much acclaim, but overall, the national historic trail has largely not altered its aims to join this phenomenon, despite the original language of the National Trails System Act prioritizing urban populations and conditions.
Craft new narratives for the Anza Trail that look towards its future uses and provide a transition from colonial themes to the present.
Align the national trail volunteer program with the NPS Volunteers-in-Parks program e.g., recognition, safety).
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Packet Pg. 443 Attachment: Juan Bautista de Anza National Historic Trail Foundation Document (Resolution Support of Preserving and Conserving the Juan Foundation Document
22 Part 3: Contributors
Juan Bautista de Anza National Historic Trail
Naomi Torres, Superintendent
Christopher Bentley, Interpretation Program Manager
Scott Elder, Trail Planner
Patrick Yoon, Community Volunteer Ambassador
NPS Regions 8, 9, 10, and 12
Brad Phillips, Outdoor Recreation Planner, Project Manager Jennifer Ascencio, Former Planning & Environmental Compliance Fellow Nancy Caplan, Interpretation and Education Program Manager Other NPS Staff
Caroline Lochner, Regional Program Manager, Western National Parks Association Andy Fisher, Interpretation Program Manager, Saguaro National Park Cam Juarez, Community Engagement & Outreach Coordinator, Saguaro National Park Dave Carney, Interpretation Program Manager, Casa Grande Ruins National Monument Antonio Solorio, Youth Program Lead, Santa Monica Mountains National Recreation Area Adali Olivares, Interpretation Ranger, Santa Monica Mountains National Recreation Area Jasmine Reinhardt, Supervisory Park Ranger, Golden Gate National Recreation Area Kelli English, Interpretation Program Manager, John Muir National Historic Site, Eugene O’Neill National Historic Site, Rosie the Riveter WWII Home Front National Historical Park, Port Chicago Naval Magazine National Memorial
Masaki Mizushima, Acting Interpretation Program Manager, John Muir National Historic Site, Eugene O’Neill National Historic Site, Rosie the Riveter WWII Home Front National Historical Park, Port Chicago Naval Magazine National Memorial Mandy Johnson- Campbell, Interpretive Specialist, Ala Kahakai National Historic Trail BriAnna Weldon, Former Anza Trail Planner, Current Project Manager, Landscape Architect, Denver Service Center – Transportation Division
John Paul Jones, Visual Information Specialist, Denver Service Center – Planning Division Suzanne Digre, Editor, Denver Service Center – Planning Division Partners
Lynne Anderson, Anza Trail Foundation
Elizabeth Stewart, Anza Trail Foundation
Lindy Hatcher, Anza Trail Foundation
Tammy Snook, Anza Trail Foundation
Carlos Herrera, Anza Trail Foundation
Jonathan Cordero, Affiliated Scholar, Indigenous Law Center, University of California Hastings
Edwardo Madril, Yaqui/Artist/Professor and Pub History Project Partner, San Francisco State University
Greg Smestad, Descendant of Los Californianos
Gail Chehak, American Indian Alaska Native Tourism Association Tribal Liaison Dennis Stephen, District Interpreter, Anza Borrego Desert State Park Shannon Stone, Director of Tubac Presidio State Historic Park
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Packet Pg. 444 Attachment: Juan Bautista de Anza National Historic Trail Foundation Document (Resolution Support of Preserving and Conserving the Juan 23 Juan Bautista de Anza National Historic Trail
Appendixes
Appendix A: Enabling Legislation for Juan Bautista de Anza National Historic Trail
THE NATIONAL TRAILS SYSTEM ACT
P.L. 90-543, as amended through P.L. 116-9, March 12, 2019) (as found in United States Code, Vol. 16, Sections 1241-1251)
AN ACT
To establish a national trails system, and for other purposes.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SHORT TITLE
SECTION 1. [16USC1241] This Act may be cited as the “National Trails System Act”.
STATEMENT OF POLICY
SEC. 2. [16USC1241] ( a) In order to provide for the ever-increasing outdoor recreation needs of an expanding population and in order to promote the preservation of, public access to, travel within, and enjoyment and appreciation of the open-air, outdoor areas and historic resources of the Nation, trails should be established ( i) primarily, near the urban areas of the Nation, and ii) secondarily, within scenic areas and along historic travel routes of the Nation which are often more remotely located.
b) The purpose of this Act is to provide the means for attaining these objectives by instituting a national system of recreation, scenic and historic trails, by designating the Appalachian Trail and the Pacific Crest Trail as the initial components of that system, and by prescribing the methods by which, and standards according to which, additional components may be added to the system.
c) The Congress recognizes the valuable contributions that volunteers and private, nonprofit trail groups have made to the development and maintenance of the Nation’ s trails. In recognition of these contributions, it is further the purpose of this Act to encourage and assist volunteer citizen involvement in the planning, development, maintenance, and management, where appropriate, of trails.
NATIONAL TRAILS SYSTEM
SEC. 3. [16USC1242] (a) The national system of trails shall be composed of the following:
1) National recreation trails, established as provided in section 4 of this Act, which will provide a variety of outdoor recreation uses in or reasonably accessible to urban areas. 2) National scenic trails, established as provided in section 5 of this Act, which will be extended trails so located as to provide for maximum outdoor recreation potential and for the conservation and enjoyment of the nationally significant scenic, historic, natural, or cultural qualities of the areas through which such trails may pass. National scenic trails may be located so as to represent desert, marsh, grassland, mountain, canyon, river, forest, and other areas, as well as landforms which exhibit significant characteristics of the physiographic regions of the Nation.
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Packet Pg. 445 Attachment: Juan Bautista de Anza National Historic Trail Foundation Document (Resolution Support of Preserving and Conserving the Juan Foundation Document
24 3) National historic trails, established as provided in section 5 of this Act, which will be extended trails which follow as closely as possible and practicable the original trails or routes of travel of national historic significance. Designation of such trails or routes shall be continuous, but the established or developed trail, and the acquisition thereof, need not be continuous onsite. National historic trails shall have as their purpose the identification and protection of the historic route and its historic remnants and artifacts for public use and enjoyment. Only those selected land and water based components of a historic trail which are on federally owned lands and which meet the national historic trail criteria established in this Act are included as Federal protection components of a national historic trail. The appropriate Secretary may certify other lands as protected segments of an historic trail upon application from State or local governmental agencies or private interests involved if such segments meet the national historic trail criteria established in this Act and such criteria supplementary thereto as the appropriate Secretary may prescribe, and are administered by such agencies or interests without expense to the United States.
4) Connecting or side trails, established as provided in section 6 of this Act, which will provide additional points of public access to national recreation, national scenic or national historic trails or which will provide connections between such trails.
The Secretary of the Interior and the Secretary of Agriculture, in consultation with appropriate governmental agencies and public and private organizations, shall establish a uniform marker for the national trails system.
b) For purposes of this section, the term “ extended trails” means trails or trail segments which total at least one hundred miles in length, except that historic trails of less than one hundred miles may be designated as extended trails. While it is desirable that extended trails be continuous, studies of such trails may conclude that it is feasible to propose one or more trail segments which, in the aggregate, constitute at least one hundred miles in length.
NATIONAL SCENIC AND NATIONAL HISTORIC TRAILS
SEC. 5. [16USC1244] (a) National scenic and national historic trails shall be authorized and designated only byAct of Congress. There are hereby established the following National Scenic and National Historic Trails:
17) The Juan Bautista de Anza National Historic Trail, a trail comprising the overland route traveled by Captain Juan Bautista de Anza of Spain during the years 1775 and 1776 from Sonora, Mexico, to the vicinity of San Francisco, California, as generally described in the report of the Department of Interior prepared pursuant to the subsection (b) entitled ‘Juan Bautista de Anza National Trail Study, Feasibility Study and Environmental Assessment’ and dated August, 1986. A map generally depicting the trail shall be on file and available for public inspection in the Office of the Director of the National Park Service, Washington, District of Columbia. The trail shall be administered by the Secretary of Interior. No lands or interest therein outside the exterior boundaries of any federally administered area may be acquired by the Federal Government for the Juan Bautista de Anza National Historic Trail without the consent of the owner thereof. In implementing this paragraph, the Secretary shall encourage volunteer trail groups to participate in the development and maintenance of the trail.
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Packet Pg. 446 Attachment: Juan Bautista de Anza National Historic Trail Foundation Document (Resolution Support of Preserving and Conserving the Juan 25 Juan Bautista de Anza National Historic Trail
b) The Secretary of the Interior, through the agency most likely to administer such trail, and the Secretary of Agriculture where lands administered by him are involved, shall make such additional studies as are herein or may hereafter be authorized by the Congress for the purpose of determining the feasibility and desirability of designating other trails as national scenic or national historic trails. Such studies shall be made in consultation with the heads of other Federal agencies administering lands through which such additional proposed trails would pass and in cooperation with interested interstate, State, and local governmental agencies, public and private organizations, and landowners and land users concerned. The feasibility of designating a trail shall be determined on the basis of an evaluation of whether or not it is physically possible to develop a trail along a route being studied, and whether the development of a trail would be financially feasible. The studies listed in subsection ( c) of this section shall be completed and submitted to the Congress, with recommendations as to the suitability of trail designation, not later than three complete fiscal years from the date of enactment of their addition to this subsection, or from the date of enactment of this sentence, whichever is later. Such studies, when submitted, shall be printed as a House or Senate document, and shall include, but not be limited to:
1) the proposed route of such trail (including maps and illustrations); 2) the areas adjacent to such trails, to be utilized for scenic, historic, natural, cultural, or developmental purposes;
3) the characteristics which, in the judgment of the appropriate Secretary, make the proposed trail worthy of designation as a national scenic or national historic trail; and in the case of national historic trails the report shall include the recommendation of the Secretary of the Interior’ s National Park System Advisory Board as to the national historic significance based on the criteria developed under the Historic Sites Act of 1935 (49 Stat. 666; 16 U.S.C. 461); 4) the current status of land ownership and current and potential use along the designated route;
5) the estimated cost of acquisition of lands or interest in lands, if any; 6) the plans for developing and maintaining the trail and the cost thereof; 7) the proposed Federal administering agency (which, in the case of a national scenic trail wholly or substantially within a national forest, shall be the Department of Agriculture);
8) the extent to which a State or its political subdivisions and public and private organizations might reasonably be expected to participate in acquiring the necessary lands and in the administration thereof;
9) the relative uses of the lands involved, including: the number of anticipated visitor-days for the entire length of, as well as for segments of, such trail; the number of months which such trail, or segments thereof, will be open for recreation purposes; the economic and social benefits which might accrue from alternate land uses; and the estimated man-years of civilian employment and expenditures expected for the purposes of maintenance, supervision, and regulation of such trail;
10) the anticipated impact of public outdoor recreation use on the preservation of a proposed national historic trail and its related historic and archeological features and settings, including the measures proposed to ensure evaluation and preservation of the values that contribute to their national historic significance; and
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Packet Pg. 447 Attachment: Juan Bautista de Anza National Historic Trail Foundation Document (Resolution Support of Preserving and Conserving the Juan Foundation Document
26 11) To qualify for designation as a national historic trail, a trail must meet all three of the following criteria:
A) It must be a trail or route established by historic use and must be historically significant as a result of that use. The route need not currently exist as a discernible trail to qualify, but its location must be sufficiently known to permit evaluation of public recreation and historical interest potential. A designated trail should generally accurately follow the historic route, but may deviate somewhat on occasion of necessity to avoid difficult routing through subsequent development, or to provide some route variations offering a more pleasurable recreational experience. Such deviations shall be so noted on site. Trail segments no longer possible to travel by trail due to subsequent development as motorized transportation routes may be designated and marked onsite as segments which link to the historic trail.
B) It must be of national significance with respect to any of several broad facets of American history, such as trade and commerce, exploration, migration and settlement, or military campaigns. To qualify as nationally significant, historic use of the trail must have had a far reaching effect on broad patterns of American culture. Trails significant in the history of native Americans may be included.
C) It must have significant potential for public recreational use or historical interest based on historic interpretation and appreciation. The potential for such use is generally greater along roadless segments developed as historic trails and at historic sites associated with the trail. The presence of recreation potential not related to historic appreciation is not sufficient justification for designation under this category.
c) The following routes shall be studied in accordance with the objectives outlined in subsection ( b) of this section.
24) Juan Bautista de Anza Trail, following the overland route taken by Juan Bautista de Anza in connection with his travels from the United Mexican States to San Francisco, California. d) The Secretary charged with the administration of each respective trail shall, within one year of the date of the addition of any national scenic or national historic trail to the system, and within sixty days of the enactment of this sentence for the Appalachian and Pacific Crest National Scenic Trails, establish an advisory council for each such trail, each of which councils shall expire ten years from the date of its establishment, except that the Advisory Council established for the Iditarod Historic Trail shall expire twenty years from the date of its establishment. If the appropriate Secretary is unable to establish such an advisory council because of the lack of adequate public interest, the Secretary shall so advise the appropriate committees of the Congress. The appropriate Secretary shall consult with such council from time to time with respect to matters relating to the trail, including the selection of rights- of-way, standards for the erection and maintenance of markers along the trail, and the administration of the trail. The members of each advisory council, which shall not exceed thirty-five in number, shall serve for a term of two years and without compensation as such, but the Secretary may pay, upon vouchers signed by the chairman of the council, the expenses reasonably incurred by the council and its members in carrying out their responsibilities under this section. Members of each council shall be appointed by the appropriate Secretary as follows:
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Packet Pg. 448 Attachment: Juan Bautista de Anza National Historic Trail Foundation Document (Resolution Support of Preserving and Conserving the Juan 27 Juan Bautista de Anza National Historic Trail
1) the head of each Federal department or independent agency administering lands through which the trail route passes, or his designee; 2) a member appointed to represent each State through which the trail passes, and such appointments shall be made from recommendations of the Governors of such States;
3) one or more members appointed to represent private organizations, including corporate and individual landowners and land users, which in the opinion of the Secretary, have an established and recognized interest in the trail, and such appointments shall be made from recommendations of the heads of such organizations: Provided, That the Appalachian Trail Conference shall be represented by a sufficient number of persons to represent the various sections of the country through which the Appalachian Trail passes; and 4) the Secretary shall designate one member to be chairman and shall fill vacancies in the same manner as the original appointment. e) Within two complete fiscal years of the date of enactment of legislation designating a national scenic trail, except for the Continental Divide National Scenic Trail and the North Country National Scenic Trail, as part of the system, and within two complete fiscal years of the date of enactment of this subsection for the Pacific Crest and Appalachian Trails, the responsible Secretary shall, after full consultation with affected Federal land managing agencies, the Governors of the affected States, the relevant advisory council established pursuant to section 5(d), and the Appalachian Trail Conference in the case of the Appalachian Trail, submit to the Committee on Interior and Insular Affairs of the House of Representatives and the Committee on Energy and Natural Resources of the Senate, a comprehensive plan for the acquisition, management, development, and use of the trail, including but not limited to, the following items:
1) specific objectives and practices to be observed in the management of the trail, including the identification of all significant natural, historical, and cultural resources to be preserved (along with high potential historic sites and high potential route segments in the case of national historic trails), details of any anticipated cooperative agreements to be consummated with other entities, and an identified carrying capacity of the trail and a plan for its implementation; 2) an acquisition or protection plan, by fiscal year for all lands to be acquired by fee title or lesser interest, along with detailed explanation of anticipated necessary cooperative agreements for any lands not to be acquired; and 3) general and site-specific development plans including anticipated costs. f) Within two complete fiscal years of the date of enactment of legislation designating a national historic trail or the Continental Divide National Scenic Trail or the North Country National Scenic Trail as part of the system, the responsible Secretary shall, after full consultation with affected Federal land managing agencies, the Governors of the affected States, and the relevant Advisory Council established pursuant to section 5(d) of this Act, submit to the Committee on Interior and Insular Affairs of the House of Representatives and the Committee on Energy and Natural Resources of the Senate, a comprehensive plan for the management, and use of the trail, including but not limited to, the following items:
1) specific objectives and practices to be observed in the management of the trail, including the identification of all significant natural, historical, and cultural resources to be preserved, details of any anticipated cooperative agreements to be consummated with State and local government agencies or private interests, and for national scenic or national historic trails an identified carrying capacity of the trail and a plan for its implementation;
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Packet Pg. 449 Attachment: Juan Bautista de Anza National Historic Trail Foundation Document (Resolution Support of Preserving and Conserving the Juan Foundation Document
28 2) the process to be followed by the appropriate Secretary to implement the marking requirements established in section 7(c) of this Act; 3) a protection plan for any high potential historic sites or high potential route segments; and
4) general and site-specific development plans, including anticipated costs. g) Revision of Feasibility and Suitability Studies of Existing National Historic Trails1) DEFINITIONS- In this subsection:
A) ROUTE- The term `route’ includes a trail segment commonly known as a cutoff.
B) SHARED ROUTE- The term `shared route’ means a route that was a segment of more than 1 historic trail, including a route shared with an existing national historic trail.
2) REQUIREMENTS FOR REVISIONA) IN GENERAL- The Secretary of the Interior shall revise the feasibility and suitability studies for certain national trails for consideration of possible additions to the trails.
B) STUDY REQUIREMENTS AND OBJECTIVES- The study
requirements and objectives specified in subsection ( b) shall apply to a study required by this subsection.
C) COMPLETION AND SUBMISSION OF STUDY- A study listed in this subsection shall be completed and submitted to Congress not later than 3 complete fiscal years from the date funds are made available for the study.
CONNECTING AND SIDE TRAILS
SEC. 6. [16USC1245] Connecting or side trails within park, forest, and other recreation areas administered by the Secretary of the Interior or Secretary of Agriculture may be established, designated, and marked by the appropriate Secretary as components of a national recreation, national scenic or national historic trail. When no Federal land acquisition is involved, connecting or side trails may be located across lands administered by interstate, State, or local governmental agencies with their consent, or, where the appropriate Secretary deems necessary or desirable, on privately owned lands with the consent of the landowners. Applications for approval and designation of connecting and side trails on non-Federal lands shall be submitted to the appropriate Secretary.
ADMINISTRATION AND DEVELOPMENT
SEC. 7. [16USC1246] ( a) ( 1) (A) The Secretary charged with the overall administration of a trail pursuant to section 5(a) shall, in administering and managing the trail, consult with the heads of all other affected State and Federal agencies. Nothing contained in this Act shall be deemed to transfer among Federal agencies any management responsibilities established under any other law for federally administered lands which are components of the National Trails System.
Any transfer of management responsibilities may be carried out between the Secretary of the Interior and the Secretary of Agriculture only as provided under subparagraph ( B).
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Packet Pg. 450 Attachment: Juan Bautista de Anza National Historic Trail Foundation Document (Resolution Support of Preserving and Conserving the Juan 29 Juan Bautista de Anza National Historic Trail
B) The Secretary charged with the overall administration of any trail pursuant to section 5(a) may transfer management of any specified trail segment of such trail to the other appropriate Secretary pursuant to a joint memorandum of agreement containing such terms and conditions as the Secretaries consider most appropriate to accomplish the purposes of this Act. During any period in which management responsibilities for any trail segment are transferred under such an agreement, the management of any such segment shall be subject to the laws, rules, and regulations of the Secretary provided with the management authority under the agreement except to such extent as the agreement may otherwise expressly provide. 2) Pursuant to section 5(a), the appropriate Secretary shall select the rights- of-way for national scenic and national historic trails and shall publish notice thereof of the availability of appropriate maps or descriptions in the Federal Register; Provided, That in selecting the rightsof-way full consideration shall be given to minimizing the adverse effects upon the adjacent landowner or user and his operation. Development and management of each segment of the National Trails System shall be designed to harmonize with and complement any established multiple- use plans for the specific area in order to insure continued maximum benefits from the land. The location and width of such rights-of-way across Federal lands under the jurisdiction of another Federal agency shall be by agreement between the head of that agency and the appropriate Secretary. In selecting rights-of-way for trail purposes, the Secretary shall obtain the advice and assistance of the States, local governments, private organizations, and landowners and land users concerned.
b) After publication of notice of the availability of appropriate maps or descriptions in the Federal Register, the Secretary charged with the administration of a national scenic or national historic trail may relocate segments of a national scenic or national historic trail right-of-way with the concurrence of the head of the Federal agency having jurisdiction over the lands involved, upon a determination that: (I) Such a relocation is necessary to preserve the purposes for which the trail was established, or (ii) the relocation is necessary to promote a sound land management program in accordance with established multiple- use principles: Provided, That a substantial relocation of the rights-of-way for such trail shall be by Act of Congress.
c) National scenic or national historic trails may contain campsites, shelters, and relatedpublic-use facilities. Other uses along the trail, which will not substantially interfere with the nature and purposes of the trail, may be permitted by the Secretary charged with the administration of the trail. Reasonable efforts shall be made to provide sufficient access opportunities to such trails and, to the extent practicable, efforts shall be made to avoid activities incompatible with the purposes for which such trails were established.
The use of motorized vehicles by the general public along any national scenic trail shall be prohibited and nothing in this Act shall be construed as authorizing the use of motorized vehicles within the natural and historical areas of the national park system, the national wildlife refuge system, the national wilderness preservation system where they are presently prohibited or on other Federal lands where trails are designated as being closed to such use by the appropriate Secretary: Provided, That the Secretary charged with the administration of such trail shall establish regulations which shall authorize the use of motorized vehicles when, in his judgment, such vehicles are necessary to meet emergencies or to enable adjacent landowners or land users to have reasonable access to their lands or timber rights: Provided further, That private lands included in the national recreation, national scenic, or national historic trails by cooperative agreement of a landowner shall not preclude such owner from using motorized vehicles on or across such trails or adjacent lands from time to time in accordance with regulations to be established by the appropriate Secretary. Where a national historic trail follows existing public roads, developed rights-of-way or waterways, and similar features of man’s nonhistorically related development, approximating the original location of a historic route, such segments may be marked to facilitate retracement of the historic route, and where a national historic trail parallels an existing public road, such road may be marked to commemorate the historic route. Other uses along the historic trails and the Continental Divide National Scenic Trail, which will not substantially interfere with
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Packet Pg. 451 Attachment: Juan Bautista de Anza National Historic Trail Foundation Document (Resolution Support of Preserving and Conserving the Juan Foundation Document
30 the nature and purposes of the trail, and which, at the time of designation, are allowed by administrative regulations, including the use of motorized vehicles, shall be permitted by the Secretary charged with administration of the trail. The Secretary of the Interior and the Secretary of Agriculture, in consultation with appropriate governmental agencies and public and private organizations, shall establish a uniform marker, including thereon an appropriate and distinctive symbol for each national recreation, national scenic, and national historic trail. Where the trails cross lands administered by Federal agencies such markers shall be erected at appropriate points along the trails and maintained by the Federal agency administering the trail in accordance with standards established by the appropriate Secretary and where the trails cross non-Federal lands, in accordance with written cooperative agreements, the appropriate Secretary shall provide such uniform markers to cooperating agencies and shall require such agencies to erect and maintain them in accordance with the standards established. The appropriate Secretary may also provide for trail interpretation sites, which shall be located at historic sites along the route of any national scenic or national historic trail, in order to present information to the public about the trail, at the lowest possible cost, with emphasis on the portion of the trail passing through the State in which the site is located.
Wherever possible, the sites shall be maintained by a State agency under a cooperative agreement between the appropriate Secretary and the State agency. d) Within the exterior boundaries of areas under their administration that are included in the right-of- way selected for a national recreation, national scenic, or national historic trail, the heads of Federal agencies may use lands for trail purposes and may acquire lands or interests in lands by written cooperative agreement, donation, purchase with donated or appropriated funds or exchange.
e) Where the lands included in a national scenic or national historic trail right-of-way are outside of the exterior boundaries of federally administered areas, the Secretary charged with the administration of such trail shall encourage the States or local governments involved (1) to enter into written cooperative agreements with landowners, private organizations, and individuals to provide the necessary trailright-of-way, or (2) to acquire such lands or interests therein to be utilized as segments of the national scenic or national historic trail: Provided, That if the State or local governments fail to enter into such written cooperative agreements or to acquire such lands or interests therein after notice of the selection of the right-of-way is published, the appropriate Secretary, may (i) enter into such agreements with landowners, States, local governments, private organizations, and individuals for the use of lands for trail purposes, or (ii) acquire private lands or interests therein by donation, purchase with donated or appropriated funds or exchange in accordance with the provisions of subsection (f) of this section: Provided further, That the appropriate Secretary may acquire lands or interests therein from local governments or governmental corporations with the consent of such entities. The lands involved in such rights-of-way should be acquired in fee, if other methods of public control are not sufficient to assure their use for the purpose for which they are acquired: Provided, That if the Secretary charged with the administration of such trail permanently relocates the right-of-way and disposes of all title or interest in the land, the original owner, or his heirs or assigns, shall be offered, by notice given at the former owner’ s last known address, the right of first refusal at the fair market price.
f) (1) The Secretary of the Interior, in the exercise of his exchange authority, may accept title to any non- Federal property within the right-of-way and in exchange therefor he may convey to the grantor of such property any federally owned property under his jurisdiction which is located in the State wherein such property is located and which he classifies as suitable for exchange or other disposal. The values of the properties so exchanged either shall be approximately equal, or if they are not approximately equal the values shall be equalized by the payment of cash to the grantor or to the Secretary as the circumstances require. The Secretary of Agriculture, in the exercise of his exchange authority, may utilize authorities and procedures available to him in connection with exchanges of national forest lands.
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Packet Pg. 452 Attachment: Juan Bautista de Anza National Historic Trail Foundation Document (Resolution Support of Preserving and Conserving the Juan 31 Juan Bautista de Anza National Historic Trail
2) In acquiring lands or interests therein for a National Scenic or Historic Trail, the appropriate Secretary may, with consent of a landowner, acquire whole tracts notwithstanding that parts of such tracts may lie outside the area of trail acquisition.
In furtherance of the purposes of this act, lands so acquired outside the area of trail acquisition may be exchanged for any non-Federal lands or interests therein within the trail right-of-way, or disposed of in accordance with such procedures or regulations as the appropriate Secretary shall prescribe, including: (i) provisions for conveyance of such acquired lands or interests therein at not less than fair market value to the highest bidder, and (ii) provisions for allowing the last owners of record a right to purchase said acquired lands or interests therein upon payment or agreement to pay an amount equal to the highest bid price. For lands designated for exchange or disposal, the appropriate Secretary may convey these lands with any reservations or covenants deemed desirable to further the purposes of this Act. The proceeds from any disposal shall be credited to the appropriation bearing the costs of land acquisition for the affected trail. g) The appropriate Secretary may utilize condemnation proceedings without the consent of the owner to acquire private lands or interests, therein pursuant to this section only in cases where, in his judgment, all reasonable efforts to acquire such lands or interest therein by negotiation have failed, and in such cases he shall acquire only such title as, in his judgment, is reasonably necessary to provide passage across such lands:
Provided, That condemnation proceedings may not be utilized to acquire fee title or lesser interests to more than an average of one hundred and twenty-five acres per mile.
Money appropriated for Federal purposes from the land and water conservation fund shall, without prejudice to appropriations from other sources, be available to Federal departments for the acquisition of lands or interests in lands for the purposes of this Act. For national historic trails, direct Federal acquisition for trail purposes shall be limited to those areas indicated by the study report or by the comprehensive plan as high potential route segments or high potential historic sites. Except for designated protected components of the trail, no land or site located along a designated national historic trail or along the Continental Divide National Scenic Trail shall be subject to the provisions of section 4(f) of the Department of Transportation Act (49 U.S.C. 1653(f)) unless such land or site is deemed to be of historical significance under appropriate historical site criteria such as those for the National Register of Historic Places. h) (1) The Secretary charged with the administration of a national recreation, national scenic, or national historic trail shall provide for the development and maintenance of such trails within federally administered areas, and shall cooperate with and encourage the States to operate, develop, and maintain portions of such trails which are located outside the boundaries of federally administered areas. When deemed to be in the public interest, such Secretary may enter written cooperative agreements with the States or their political subdivisions, landowners, private organizations, or individuals to operate, develop, and maintain any portion of such a trail either within or outside a federally administered area. Such agreements may include provisions for limited financial assistance to encourage participation in the acquisition, protection, operation, development, or maintenance of such trails, provisions providing volunteer in the park or volunteer in the forest status (in accordance with the Volunteers in the Parks Act of 1969 and the Volunteers in the Forests Act of 1972) to individuals, private organizations, or landowners participating in such activities, or provisions of both types. The appropriate Secretary shall also initiate consultations with affected States and their political subdivisions to encourage –
A) the development and implementation by such entities of appropriate measures to protect private landowners from trespass resulting from trail use and from unreasonable personal liability and property damage caused by trail use, and
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Packet Pg. 453 Attachment: Juan Bautista de Anza National Historic Trail Foundation Document (Resolution Support of Preserving and Conserving the Juan Foundation Document
32 B) the development and implementation by such entities of provisions for land practices compatible with the purposes of this Act, for property within or adjacent to trail rights-of-way. After consulting with States and their political subdivisions under the preceding sentence, the Secretary may provide assistance to such entities under appropriate cooperative agreements in the manner provided by this subsection.
2) Whenever the Secretary of the Interior makes any conveyance of land under any of the public land laws, he may reserve a right-of-way for trails to the extent he deems necessary to carry out the purposes of this Act.
i) The appropriate Secretary, with the concurrence of the heads of any other Federal agencies administering lands through which a national recreation, national scenic, or national historic trail passes, and after consultation with the States, local governments, and organizations concerned, may issue regulations, which may be revised from time to time, governing the use, protection, management, development, and administration of trails of the national trails system. In order to maintain good conduct on and along the trails located within federally administered areas and to provide for the proper government and protection of such trails, the Secretary of the Interior and the Secretary of Agriculture shall prescribe and publish such uniform regulations as they deem necessary and any person who violates such regulations shall be guilty of a misdemeanor, and may be punished by a fine of not more $ 500 or by imprisonment not exceeding six months, or by both such fine and imprisonment. The Secretary responsible for the administration of any segment of any component of the National Trails System ( as determined in a manner consistent with subsection ( a)( 1) of this section) may also utilize authorities related to units of the national park system or the national forest system, as the case may be, in carrying out his administrative responsibilities for such component. j) Potential trail uses allowed on designated components of the national trails system may include, but are not limited to, the following: bicycling, cross- country skiing, day hiking, equestrian activities, jogging or similar fitness activities, trail biking, overnight and long-distance backpacking, snowmobiling, and surface water and underwater activities.
Vehicles which may be permitted on certain trails may include, but need not be limited to, motorcycles, bicycles, four-wheel drive or all- terrain off-road vehicles. In addition, trail access for handicapped individuals may be provided. The provisions of this subsection shall not supersede any other provisions of this Act or other Federal laws, or any State or local laws.
k) For the conservation purpose of preserving or enhancing the recreational, scenic, natural, or historical values of components of the national trails system, and environs thereof as determined by the appropriate Secretary, landowners are authorized to donate or otherwise convey qualified real property interests to qualified organizations consistent with section 170(h)(3) of the Internal Revenue Code of 1954, including, but not limited to, right-of-way, open space, scenic, or conservation easements, without regard to any limitation on the nature of the estate or interest otherwise transferable within the jurisdiction where the land is located. The conveyance of any such interest in land in accordance with this subsection shall be deemed to further a Federal conservation policy and yield a significant public benefit for purposes of section 6 of Public Law 96- 541.
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Packet Pg. 454 Attachment: Juan Bautista de Anza National Historic Trail Foundation Document (Resolution Support of Preserving and Conserving the Juan 33 Juan Bautista de Anza National Historic Trail
STATE AND METROPOLITAN AREA TRAILS
SEC. 8. [16USC1247] ( a) The Secretary of the Interior is directed to encourage States to consider, in their comprehensive statewide outdoor recreation plans and proposals for financial assistance for State and local projects submitted pursuant to the Land and Water Conservation Fund Act, needs and opportunities for establishing park, forest, and other recreation and historic trails on lands owned or administered by States, and recreation and historic trails on lands in or near urban areas. The Secretary is also directed to encourage States to consider, in their comprehensive statewide historic preservation plans and proposals for financial assistance for State, local, and private projects submitted pursuant to the Act of October 15, 1966 (80 Stat. 915), as amended, needs and opportunities for establishing historic trails.
He is further directed in accordance with the authority contained in the Act of May 28, 1963 (77 Stat. 49), to encourage States, political subdivisions, and private interests, including nonprofit organizations, to establish such trails.
b) The Secretary of Housing and Urban Development is directed, in administering the program of comprehensive urban planning and assistance under section 701 of the Housing Act of 1954, to encourage the planning of recreation trails in connection with the recreation and transportation planning for metropolitan and other urban areas. He is further directed, in administering the urban open space program under title VII of the Housing Act of 1961, to encourage such recreation trails. c) The Secretary of Agriculture is directed, in accordance with authority vested in him, to encourage States and local agencies and private interests to establish such trails. d) The Secretary of Transportation, the Chairman of the Interstate Commerce Commission, and the Secretary of the Interior, in administering the Railroad Revitalization and Regulatory Reform Act of 1976, shall encourage State and local agencies and private interests to establish appropriate trails using the provisions of such programs. Consistent with the purposes of that Act, and in furtherance of the national policy to preserve established railroad rights-of-way for future reactivation of rail service, to protect rail transportation corridors, and to encourage energy efficient transportation use, in the case of interim use of any established railroad rights-of-way pursuant to donation, transfer, lease, sale, or otherwise in a manner consistent with the National Trails System Act, if such interim use is subject to restoration or reconstruction for railroad purposes, such interim use shall not be treated, for purposes of any law or rule of law, as an abandonment of the use of such rights-of-way for railroad purposes. If a State, political subdivision, or qualified private organization is prepared to assume full responsibility for management of such rights- of-way and for any legal liability arising out of such transfer or use, and for the payment of any and all taxes that may be levied or assessed against such rights-of-way, then the Commission shall impose such terms and conditions as a requirement of any transfer or conveyance for interim use in a manner consistent with this Act, and shall not permit abandonment or discontinuance inconsistent or disruptive of such use. e) Such trails may be designated and suitably marked as parts of the nationwide system of trails by the States, their political subdivisions, or other appropriate administering agencies with the approval of the Secretary of the Interior.
RIGHTS-OF-WAY AND OTHER PROPERTIES
SEC. 9. [16USC1248] ( a) The Secretary of the Interior or the Secretary of Agriculture as the case may be, may grant easements and rights- of-way upon, over, under, across, or along any component of the national trails system in accordance with the laws applicable to the national park system and the national forest system, respectively: Provided, That any conditions contained in such easements and rights- of-way shall be related to the policy and purposes of this Act.
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Packet Pg. 455 Attachment: Juan Bautista de Anza National Historic Trail Foundation Document (Resolution Support of Preserving and Conserving the Juan Foundation Document
34 b) The Department of Defense, the Department of Transportation, the Interstate Commerce Commission, the Federal Communications Commission, the Federal Power Commission, and other Federal agencies having jurisdiction or control over or information concerning the use, abandonment, or disposition of roadways, utility rights-of-way, or other properties which may be suitable for the purpose of improving or expanding the national trails system shall cooperate with the Secretary of the Interior and the Secretary of Agriculture in order to assure, to the extent practicable, that any such properties having values suitable for trail purposes may be made available for such use. c) Commencing upon the date of enactment of this subsection, any and all right, title, interest, and estate of the United States in all rights-of-way of the type described in the Act of March 8, 1922 (43 U.S.C. 912), shall remain in the United States upon the abandonment or forfeiture of such rights- of-way, or portions thereof, except to the extent that any such right-of-way, or portion thereof, is embraced within a public highway no later than one year after a determination of abandonment or forfeiture, as provided under such Act.
d) (1) All rights- of-way, or portions thereof, retained by the United States pursuant to subsection ( c) which are located within the boundaries of a conservation system unit or a National Forest shall be added to and incorporated within such unit or National Forest and managed in accordance with applicable provisions of law, including this Act. 2) All such retained rights-of-way, or portions thereof, which are located outside the boundaries of a conservation system unit or a National Forest but adjacent to or contiguous with any portion of the public lands shall be managed pursuant to the Federal Land Policy and Management Act of 1976 and other applicable law, including this section.
3) All such retained rights-of-way, or portions thereof, which are located outside the boundaries of a conservation system unit or National Forest which the Secretary of the Interior determines suitable for use as a public recreational trail or other recreational purposes shall be managed by the Secretary for such uses, as well as for such other uses as the Secretary determines to be appropriate pursuant to applicable laws, as long as such uses do not preclude trail use.
e) ( 1) The Secretary of the Interior is authorized where appropriate to release and quitclaim to a unit of government or to another entity meeting the requirements of this subsection any and all right, title, and interest in the surface estate of any portion of any right-of-way to the extent any such right, title, and interest was retained by the United States pursuant to subsection ( c), if such portion is not located within the boundaries of any conservation system unit or National Forest. Such release and quitclaim shall be made only in response to an application therefor by a unit of State or local government or another entity which the Secretary of the Interior determines to be legally and financially qualified to manage the relevant portion for public recreational purposes.
Upon receipt of such an application, the Secretary shall publish a notice concerning such application in a newspaper of general circulation in the area where the relevant portion is located. Such release and quitclaim shall be on the following conditions:
A) If such unit or entity attempts to sell, convey, or otherwise transfer such right, title, or interest or attempts to permit the use of any part of such portion for any purpose incompatible with its use for public recreation, then any and all right, title, and interest released and quitclaimed by the Secretary pursuant to this subsection shall revert to the United States.
B) Such unit or entity shall assume full responsibility and hold the United States harmless for any legal liability which might arise with respect to the transfer, possession, use, release, or quitclaim of such right-of-way.
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Packet Pg. 456 Attachment: Juan Bautista de Anza National Historic Trail Foundation Document (Resolution Support of Preserving and Conserving the Juan 35 Juan Bautista de Anza National Historic Trail
C) Notwithstanding any other provision of law, the United States shall be under no duty to inspect such portion prior to such release and quitclaim, and shall incur no legal liability with respect to any hazard or any unsafe condition existing on such portion at the time of such release and quitclaim.
2) The Secretary is authorized to sell any portion of a right-of-way retained by the United States pursuant to subsection ( c) located outside the boundaries of a conservation system unit or National Forest if any such portion is -- A) not adjacent to or contiguous with any portion of the public lands; or B) determined by the Secretary, pursuant to the disposal criteria established by section 203 of the Federal Land Policy and Management Act of 1976, to be suitable for sale.
Prior to conducting any such sale, the Secretary shall take appropriate steps to afford a unit of State or local government or any other entity an opportunity to seek to obtain such portion pursuant to paragraph ( 1) of this subsection. 3) All proceeds from sales of such retained rights of way shall be deposited into the Treasury of the United States and credited to the Land and Water Conservation Fund as provided in section 2 of the Land and Water Conservation Fund Act of 1965.
4) The Secretary of the Interior shall annually report to the Congress the total proceeds from sales under paragraph ( 2) during the preceding fiscal year.
Such report shall be included in the President’ s annual budget submitted to the Congress.
f) As used in this section --
1) The term “conservation system unit” has the same meaning given such term in the Alaska National Interest Lands Conservation Act (Public Law 96-487; 94 Stat. 2371 et seq.), except that such term shall also include units outside Alaska.
2) The term “ public lands” has the same meaning given such term in the Federal Land Policy and Management Act of 1976.
AUTHORIZATION OF APPROPRIATIONS
SEC. 10. [16USC1249] ( a) ( 1) There are hereby authorized to be appropriated for the acquisition of lands or interests in lands not more than $5,000,000 for the Appalachian National Scenic Trail and not more than $500,000 for the Pacific Crest National Scenic Trail. From the appropriations authorized for fiscal year 1979 and succeeding fiscal years pursuant to the Land and Water Conservation Fund Act (78Stat. 897), as amended, not more than the following amounts may be expended for the acquisition of lands and interests in lands authorized to be acquired pursuant to the provisions of this Act: for the Appalachian National Scenic Trail, not to exceed $30,000,000 for fiscal year 1979, $ 30, 000, 000 for fiscal year 1980, and $ 30, 000, 000 for fiscal year 1981, except that the difference between the foregoing amounts and the actual appropriations in any one fiscal year shall be available for appropriation in subsequent fiscal years. 2) It is the express intent of the Congress that the Secretary should substantially complete the land acquisition program necessary to insure the protection of the Appalachian Trail within three complete fiscal years following the date of enactment of this sentence. b) For the purposes of Public Law 95-42 (91 Stat. 211), the lands and interests therein acquired pursuant to this section shall be deemed to qualify for funding under the provisions of section 1, clause 2, of said Act.
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Packet Pg. 457 Attachment: Juan Bautista de Anza National Historic Trail Foundation Document (Resolution Support of Preserving and Conserving the Juan Foundation Document
36 c) Authorization of Appropriations1) IN GENERAL- Except as otherwise provided in this Act, there are authorized to be appropriated such sums as are necessary to implement the provisions of this Act relating to the trails designated by section 5(a). 2) NATCHEZ TRACE NATIONAL SCENIC TRAILA) IN GENERAL- With respect to the Natchez Trace National Scenic Trail referred to in this paragraph as the `trail’) designated by section 5(a) 12)—
i) not more than $500,000 shall be appropriated for the acquisition of land or interests in land for the trail; and
ii) not more than $2,000,000 shall be appropriated for the development of the trail.
B) PARTICIPATION BY VOLUNTEER TRAIL GROUPS- The
administering agency for the trail shall encourage volunteer trail groups to participate in the development of the trail.
VOLUNTEER TRAILS ASSISTANCE
SEC. 11. [16USC1250] (a) (1) In addition to the cooperative agreement and other authorities contained in thisAct, the Secretary of the Interior, the Secretary of Agriculture, and the head of any Federal agency administering Federal lands, are authorized to encourage volunteers and volunteer organizations to plan, develop, maintain, and manage, where appropriate, trails throughout the Nation.
2) Wherever appropriate in furtherance of the purposes of this Act, the Secretaries are authorized and encouraged to utilize the Volunteers in the Parks Act of 1969, the Volunteers in the Forests Act of 1972, and section 6 of the Land and Water Conservation Fund Act of 1965 relating to the development of Statewide Comprehensive Outdoor Recreation Plans). b) Each Secretary or the head of any Federal land managing agency, may assist volunteers and volunteers organizations in planning, developing, maintaining, and managing trails.
Volunteer work may include, but need not be limited to— 1) planning, developing, maintaining, or managing (A) trails which are components of the national trails system, or (B) trails which, if so developed and maintained, could qualify for designation as components of the national trails system; or
2) operating programs to organize and supervise volunteer trail building efforts with respect to the trails referred to in paragraph (1), conducting trail-related research projects, or providing education and training to volunteers on methods of trails planning, construction, and maintenance. c) The appropriate Secretary or the head of any Federal land managing agency may utilize and to make available Federal facilities, equipment, tools, and technical assistance to volunteers and volunteer organizations, subject to such limitations and restrictions as the appropriate Secretary or the head of any Federal land managing agency deems necessary or desirable.
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Packet Pg. 458 Attachment: Juan Bautista de Anza National Historic Trail Foundation Document (Resolution Support of Preserving and Conserving the Juan 37 Juan Bautista de Anza National Historic Trail
DEFINITIONS
SEC. 12. [16USC1251] As used in this Act:
1) The term “ high potential historic sites” means those historic sites related to the route, or sites in close proximity thereto, which provide opportunity to interpret the historic significance of the trail during the period of its major use. Criteria for consideration as high potential sites include historic significance, presence of visible historic remnants, scenic quality, and relative freedom from intrusion.
2) The term “ high potential route segments” means those segments of a trail which would afford high quality recreation experience in a portion of the route having greater than average scenic values or affording an opportunity to vicariously share the experience of the original users of a historic route.
3) The term “State” means each of the several States of the United States, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa, the Trust Territory of the Pacific Islands, the Northern Mariana Islands, and any other territory or possession of the United States.
4) The term “without expense to the United States” means that no funds may be expended by Federal agencies for the development of trail related facilities or for the acquisition of lands or interest in lands outside the exterior boundaries of Federal areas. For the purposes of the preceding sentence, amounts made available to any State or political subdivision under the Land and Water Conservation Fund Act of 1965 or any other provision of law shall not be treated as an expense to the United States.
END
3.A.14.b
Packet Pg. 459 Attachment: Juan Bautista de Anza National Historic Trail Foundation Document (Resolution Support of Preserving and Conserving the Juan Foundation Document
38 Appendix B: Inventory of Administrative Commitments
The following list is a sampling of current and legacy types of agreements used for the purposes of administering the Juan Bautista de Anza National Historic Trail.
Table B-1 Memorandums of Understanding
Title/ Agency/
Organization
Purpose/
Description
Expiration
Date
Agreement
Number
Fund
Source
California
Department
of Parks and
Recreation
California State
Parks)
To provide
statewide
collaboration
between NPS
and California
statewide efforts
to implement
the Anza Trail
comprehensive
management plan
4/30/2024;
previously
entered 2015
for 5-year term
CDPR
P19OT001
N/A
Table B-2 Legacy Memorandums of Understanding
Title/ Agency/
Organization
Purpose/
Description
Expiration
Date
Agreement
Number
Fund
Source
California
State Parks ( 22
park locations
statewide)
In accordance with
the comprehensive
management plan,
mark trail routes
and maintain
signage necessary;
develop and
maintain access
to interpretive
and recreational
opportunities
9/17/1997 ––
County of
Los Angeles
Department
of Parks and
Recreation
multiple locations),
CA
5/18/1999;
agreement
entered for 5
years
Santa Barbara
County, CA
2/1/2000;
agreement
entered for 5
years
City of Palo Alto,
Santa Clara
County, CA
3/12/2000;
agreement
entered for 5
years
City of Pismo
Beach, San Luis
Obispo County, CA
10/9/2002;
agreement
entered for 5
years
3.A.14.b
Packet Pg. 460 Attachment: Juan Bautista de Anza National Historic Trail Foundation Document (Resolution Support of Preserving and Conserving the Juan 39 Juan Bautista de Anza National Historic Trail
Title/ Agency/
Organization
Purpose/
Description
Expiration
Date
Agreement
Number
Fund
Source
Town of Sahuarita,
Pima County, AZ
10/22/2002;
agreement
entered for 5
years
City of San Luis
Obispo, San Luis
Obispo County, CA
12/3/2002;
agreement
entered for 5
years
Anza Trail
Foundation
Fundraising
agreement
3/22/2010; 5
years
N/A N/A
Table B-3 Cooperative/Task Agreements
Title/ Agency/
Organization
Purpose/
Description
Expiration
Date
Agreement
Number
Fund
Source
GreenInfo
Network
Update the public
web map site
9/30/2022 P19AC01199 NPS
Operations
ONPS)
American
Indian Alaska
Native Tourism
Association
Develop an
American Indian
guide to the Anza
Trail
11/30/2022 P19AC00966 Connect
Trails to Parks
CTTP), ONPS
Table B-4 Legacy Cooperative/Task Agreements
Title/ Agency/
Organization
Purpose/
Description
Expiration
Date
Agreement
Number
Fund
Source
California
Department of
Transportation
Install auto tour
route signs
9/22/1992; 3
years
N/A Various
Table B-5 Cooperative Ecosystem Study Units Agreements
Title/ Agency/
Organization
Purpose/
Description
Expiration
Date
Agreement
Number
Fund
Source
University of
Nevada Los Vegas
Develop a
historic resource
study
7/1/2012 H8R07060001TA
J8AR080022
CTTP, ONPS
University of
Arizona
Develop
18th- century
lifeways and
ethnographic
study
3/31/2011 H1200050003
J8350080012
CTTP, ONPS
San Francisco State
University
Create a public
history project
9/14/2023 P21AC12081 –
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Packet Pg. 461 Attachment: Juan Bautista de Anza National Historic Trail Foundation Document (Resolution Support of Preserving and Conserving the Juan Foundation Document
40 Partnership Certification Agreements, 1996 To Present Certification is a partnership agreement that helps landowners and interpretive facilities preserve, protect, and interpret historic sites, trail segments, and trail history and share them with the public. These agreements do not create any legal commitments or obligate funding.
Name and Location of Property Date of
Certification
Tubac State Park, Santa Cruz County, AZ 7/22/1996
Salinas River Parkway, City of Atascadero, San Luis Obispo County, CA 6/3/1998 Conejo Open Space and Conservation Agency, Ventura County, CA 6/4/2002 South Coast Railroad Museum, National Railroad Passenger Corporation AMTRAK), Onboard Interpretation – Coast Starlite Route, Santa Barbara/ San Luis Obispo Counties, CA ( originally signed 1998)
1/14/2003
Peralta Hacienda, Alameda County, CA 3/27/2003
Peralta Adobe Site, History San Jose, Santa Clara County, CA 5/20/2004 Old Stagecoach Road, San Benito County ( Public Works Department), CA 6/8/2004 Countywide Trails Master Plan, Santa Clara County, CA 6/8/2004 Crystal Springs Trail, San Mateo County 2010
Town of Marana, Pima County, AZ October 2010
Las Lagunas de Anza Site ( Sedgewick family), Nogales, Santa Cruz County, AZ
3/26/2015
Coyote Valley Open Space, Santa Clara County, CA 8/7/2015 Los Angeles River Trail – City of Los Angeles, Los Angeles County, CA 11/10/2015 Sycamore Grove-Livermore Area Recreation and Park District Alameda County, CA
2017
Roberto Adobe and Sunol House, California Pioneers of Santa Clara County, San Jose, Santa Clara County, CA
3/21/2017
Joe’ s Trail, City of Saratoga, Santa Clara County, CA 7/3/2017 East Bay Regional Parks District, Alameda and Contra Costa Counties, CA 11/21/2017 Pima County Trails, Pima County, AZ 12/4/2018
Santa Clara County Parks, Santa Clara County, CA 12/29/2020
3.A.14.b
Packet Pg. 462 Attachment: Juan Bautista de Anza National Historic Trail Foundation Document (Resolution Support of Preserving and Conserving the Juan As the nation’ s principal conservation agency, the Department of the Interior has responsibility for most of our nationally owned public lands and natural resources. This includes fostering sound use of our land and water resources; protecting our fish, wildlife, and biological diversity; preserving the environmental and cultural values of our national parks and historic places; and providing for the enjoyment of life through outdoor recreation. The department assesses our energy and mineral resources and works to ensure that their development is in the best interests of all our people by encouraging stewardship and citizen participation in their care. The department also has a major responsibility for American Indian reservation communities and for people who live in island territories under U.S. administration.
JUBA 605/ 187837
March 2023
Interior Regions 8, 9, 10, and 12 – Foundation Document Recommendation Juan Bautista de Anza National Historic Trail
March 2023
This Foundation Document has been prepared as a collaborative effort between park and regional staff and is recommended for approval by the Interior Regions 8, 9, 10, and 12 Regional Director
RECOMMENDED
Naomi Torres, Superintendent, Juan Bautista de Anza National Historic Trail Date
APPROVED
Frank Lands, Regional Director, Interior Regions 8, 9, 10, and 12 Date
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Packet Pg. 463 Attachment: Juan Bautista de Anza National Historic Trail Foundation Document (Resolution Support of Preserving and Conserving the Juan NATIONAL PARK SERVICE • U.S. DEPARTMENT OF THE INTERIOR Foundation Document • Juan Bautista de Anza National Historic Trail
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Packet Pg. 464 Attachment: Juan Bautista de Anza National Historic Trail Foundation Document (Resolution Support of Preserving and Conserving the Juan May 5, 2026
TO: City Council
REQUESTED BY: Kimberly Ganimian, Finance Director
APPROVED BY: Robert A. Johnson, City Manager
SUBJECT: Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025
RECOMMENDATION:
Staff recommends that the City Council receive and file the Annual Financial Report of the City of San Jacinto for the fiscal year ended June 30, 2025, as well as the “SAS 114” Report, and the “GAS” Report.
BACKGROUND:
An audit of financial transactions and internal controls is both legally required and mandated under bond covenants. Audit activities were conducted by the firm Rogers, Anderson, Malody & Scott, LLP (RAMS) at various times beginning in June 2024. Finance staff received a draft of the report in April 2025, performed a review of the report, and completed the Management’s Discussion and Analysis (MD&A).
DISCUSSION:
RAMS has rendered an unmodified opinion that the general purpose financial statements, present fairly, in all material respects, the financial position of the City of San Jacinto at June 30, 2025, and the changes in financial position for the year then ended in conformity with accounting principles generally accepted in the United States of America.
RAMS is also required, by professional standards, to provide certain information regarding the audit process and its responsibilities under generally accepted auditing standards and Government Auditing Standards. The attached “SAS 114” report communicates this information.
RAMS is also required, by professional standards, to provide a report on internal control over financial reporting and on compliance, and other matters based on an audit of financial statements performed in accordance with Government Auditing Standards. Accordingly, the “GAS” report is also presented.
Once received and filed, a copy of the Annual Financial Report will be available for download on the City’s website.
Staff recommends that the City Council receive and file the Annual Financial Report of the City of San Jacinto for the fiscal year ended June 30, 2025, as well as the “SAS 114” Report, and the “GAS” Report.
4.1 Packet Pg. 465
FISCAL IMPACT:
This action has no fiscal impact.
ATTACHMENTS:
2025 Financial Statements
SAS 114 - San Jacinto
Report on Internal Control - San Jacinto
4.1 Packet Pg. 466
City of San Jacinto, California
ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED JUNE 30, 2025
4.1.a
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Packet Pg. 468 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Annual Financial Report
For the Year Ended June 30, 2025
Table of Contents
PAGE
Independent Auditor's Report 1
Management's Discussion and Analysis 4
Basic Financial Statements
Government-Wide Financial Statements
Statement of Net Position 12
Statement of Activities 13
Fund Financial Statements
Governmental Funds
Balance Sheet 15
Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position 16
Statement of Revenues, Expenditures and Changes in Fund Balances 17 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities 18 Proprietary Funds
Statement of Net Position 19
Statement of Revenues, Expenses and Changes in Fund Net Position 20 Statement of Cash Flows 21
Fiduciary Funds
Statement of Fiduciary Net Position 22
Statement of Changes in Fiduciary Net Position 23
Notes to the Basic Financial Statements 24
Required Supplementary Information
Budgetary Comparison Schedules
General Fund 63
LLPD #2 64
Community Facilities District 2003 65
Schedule of the City’s Proportionate Share of the Plan’s Net Pension Liability and Related Ratios as of the
Measurement Date - Last 10 Years
Schedule of Plan Contributions - Last 10 Years
66 67
Non-Major Governmental Funds
Combining Balance Sheet - Non-major funds
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - Non-major funds
68 75
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Packet Pg. 470 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) Tel. 909-889-0871 | www.ramscpa.net | 735 E. Carnegie Dr. Suite 100, San Bernardino, CA 92408
CERTIFIED PUBLIC ACCOUNTANTS
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Independent Auditor’s Report
To the Honorable Mayor and Members of the City Council
of the City of San Jacinto
Report on the Audit of the Financial Statements
Opinions
We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of San Jacinto, California, as of and for the year ended June 30, 2025, and the related notes to the financial statements, which collectively comprise the entity’s basic financial statements as listed in the table of contents.
In our opinion, the accompanying financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the businesstype activities, each major fund, and the aggregate remaining fund information of the entity, as of June 30, 2025, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of entity and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Emphasis of Matter
As described in Note 1 to the financial statements during the year ended June 30, 2025, the entity adopted new accounting guidance under Governmental Accounting Standards Board (GASB) statement No. 101, Compensated Absences and No. 102, Certain Risk Disclosures. Our opinions are not modified with respect to these matters.
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Packet Pg. 471 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) -2-
Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about entity’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.
Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with GAAS and Government Auditing Standards, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks.
Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, no such opinion is expressed.
• Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
• Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about entity’s ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control–related matters that we identified during the audit.
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Packet Pg. 472 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) -3-
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis and budgetary comparison information, as listed in the table of contents, be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with GAAS, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the entity’s basic financial statements. The combining nonmajor fund financial statements are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with GAAS. In our opinion, the accompanying supplementary information is fairly stated, in all material respects, in relation to the basic financial statements as a whole.
Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated April 14, 2026 on our consideration of entity’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering entity’s internal control over financial reporting and compliance.
San Bernardino, California
April 14, 2026
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Packet Pg. 474 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) Management’s Discussion and Analysis
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Packet Pg. 476 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Management’s Discussion and Analysis
For the Year Ended June 30, 2025
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As management of the City of San Jacinto, we offer readers of the City of San Jacinto’s financial statements this narrative overview and analysis of the financial activities of the City for the fiscal year ending June 30, 2025. We encourage readers to consider the information presented here in conjunction with the City’s financial statements, which follow this discussion.
FINANCIAL HIGHLIGHTS
• Total assets and deferred outflows of resources of the City exceeded its liabilities and deferred inflows of resources at the close of the most recent fiscal year by $195,816,595 (net position). Of this amount, $35,490,045 represents unrestricted net position, which may be used to meet the government’s ongoing obligations to citizens and creditors. • The City’s total net position increased by $14,549,049, from the prior fiscal year primarily due to increased revenue generated by the City’s public utilities, and increased fees for service, and revenue growing faster than expenditures.
• At the close of the current fiscal year, the City’s governmental funds reported combined fund balances of $68,706,745, an increase of $6,314,180 in comparison with the prior year.
Approximately 21.95 percent of this amount ($15,079,538) is available for spending at the government’s discretion (unassigned fund balance).
• At the end of the current fiscal year, unrestricted fund balance (the total of the unassigned components of fund balance) for the General Fund was $21,442,206, or approximately 54.12 percent of total General Fund expenditures.
OVERVIEW OF THE FINANCIAL STATEMENTS
This annual report consists of four parts – Management’s Discussion and Analysis (this portion), the basic financial statements, Required Supplementary Information, and optional combining statements for nonmajor governmental funds. The basic financial statements include two kinds of statements that present different views of the City.
• The government-wide financial statements provide both long-term and short-term information about the City’s overall financial status, in a manner similar to private sector business. • Fund financial statements focus on individual parts of the City, reporting the City’s operations in more detail than the government-wide financial statements. Governmental fund statements tell how general government services, such as community development, were financed in the short-term as well as what remains for future spending. Proprietary fund statements offer short-term and long-term financial information about the activities the City operates like businesses, such as utility services. Fiduciary fund statements provide information about financial relationships in which the City acts solely as a trustee or agent for the benefit of others, to whom the resources belong.
Statements
Management's Discussion and
Components of the Financial Section
Statements
Financial Statements Statements FinancialFinancial
Analysis
Basic
Summary Detail
Required Supplementary Information
Notes
to the Government-wide Fund
Financial
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Packet Pg. 477 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Management’s Discussion and Analysis
For the Year Ended June 30, 2025
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The financial statements also include notes that explain some of the information in the financial statements and provide more detailed data. The statements are followed by a comparison of actual results with the original and final amended budget for the general fund and each major special revenue fund with an annually adopted budget. In addition to these required elements, we have included combining statements that provide details about our non-major governmental funds, which are presented in total in a column in the basic financial statements.
Government-wide Financial Statements
The government-wide statements report information about the City as a whole using accounting methods similar to those used by private-sector companies. The statement of net position includes all of the City’s assets and liabilities. All current year revenues and expenses are reported in the statement of activities regardless of when cash is received or paid.
The two government-wide statements report the City’s net position and how they have changed during the fiscal year. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial health of the City is improving or deteriorating.
The government-wide financial statements of the City are divided as follows:
• Governmental activities – All of the City’s basic services are included here, such as police, fire, engineering, streets, parks and recreation, historic preservation, community development, redevelopment and general government. Taxes and state and federal grants finance most of these activities.
• Business-type activities – The City’s utility services provided are funded by customer fees.
Fund Financial Statements
A fund is a group of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. Fund financial statements provide more detailed information about the City’s largest funds, not the City as a whole.
The City has three types of funds:
• Governmental funds – All of the City’s basic services are included in governmental funds, which focus on (1) short-term inflows and outflows of spendable resources, and (2) the remaining yearend balances available for spending. Because this information does not encompass the additional long-term focus of the government-wide statements, reconciliations that explain the relationship (or differences) between governmental funds and governmental activities follow each of the governmental funds statements.
• Proprietary funds – Services for which customer fees are intended to finance the costs of operations are generally reported in proprietary funds. Proprietary funds financial statements, like the government-wide statements, provide both long-term and short-term financial information. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements.
Internal service funds report activities that provide services for the City’s other programs and activities, such as the City’s self-insurance arrangements.
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Packet Pg. 478 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Management’s Discussion and Analysis
For the Year Ended June 30, 2025
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• Fiduciary funds – The City is the trustee for certain assessment and community facilities district funds. It is also responsible for other trust account assets, which because of trust agreements, can be used only for the trust beneficiaries. The City is responsible for ensuring that the assets reported in these funds are used for their intended purposes. All of the City’s fiduciary activities are reported in a separate statement of fiduciary net position. We exclude these activities from the City’s government-wide financial statements because the City cannot use these assets to finance its operations.
FINANCIAL ANALYSIS OF THE GOVERNMENT-WIDE STATEMENTS
The government-wide financial statements provide long-term and short-term information about the City’s overall financial condition. This analysis addresses the financial statements of the City as a whole.
City of San Jacinto
Government-wide Financial Statements - Summary of Net Position As of June 30, 2025 and 2024
(in thousands)
2025 2024 2025 2024 2025 2024
Cash and investments, unrestricted 82,180 $ 78,274 $ 6,804 $ 7,727 $ 88,984 $ 86,001 $ 3.5% Current and other assets 13,927 16,042 21,439 11,927 35,366 27,969 26.4% Capital assets, net 103,170 100,672 19,821 14,478 122,991 115,150 6.8% Total assets 199,277 194,988 48,064 34,132 247,341 229,120 8.0% Deferred outflows of resources 3,755 4,735 948 1,155 4,703 5,890 -20.2% Long-term liabilities 4,680 4,503 12,279 3,188 16,959 7,691 120.5% Other liabilities 32,227 37,358 6,489 7,875 38,716 45,233 -14.4% Total liabilities 36,907 41,861 18,768 11,063 55,675 52,924 5.2% Deferred Inflows of Resources 505 696 47 123 552 819 -32.6% Net position:
Net investment in capital assets 99,113 97,131 10,531 11,484 109,644 108,615 0.9% Restricted 41,677 33,378 9,005 - 50,682 33,378 51.8%
Unrestricted 24,830 26,657 10,661 12,617 35,491 39,274 -9.6% Total net position 165,620 $ 157,166 $ 30,197 $ 24,101 $ 195,817 $ 181,267 $ 8.0% Governmental
Activities
Business-type
Activities
Total Primary
Government Total Percent
Change
Net position represents the difference between the City’s resources and its obligations. At June 30, 2025, the largest portion of the City’s total net position, approximately 55.99 percent, reflects the investment in capital assets less related debt outstanding used to acquire the capital assets. These capital assets are used by the City to provide services to the citizens. Additional capital asset information can be found in the Capital Asset and Debt Administration sections of the MD&A. Restricted net position represents amounts that must be used in accordance with external restrictions. The unrestricted balance of net position may be used at the City’s discretion.
The net position of our business-type activities increased by 25.29 percent to $30,196,924, and the City generally can only use this net position to finance the continuing operations of the business-type activities.
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Packet Pg. 479 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Management’s Discussion and Analysis
For the Year Ended June 30, 2025
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City of San Jacinto
Government-wide Financial Statements - Changes in Net Position For the year ended June 30, 2025 and 2024
(in thousands)
Total
Percent
2025 2024 2025 2024 2025 2024 Change
Revenues
Program revenues:
Charges for services 16,901 $ 13,460 $ 39,871 $ 31,062 $ 56,772 $ 44,522 $ 27.5% Operating grants and
contributions 10,548 11,098 - - 10,548 11,098 -5.0%
Capital grants and contributions 9,876 8,914 - - 9,876 8,914 10.8% General revenues:
Property taxes/property tax in-lieu 10,190 9,735 - - 10,190 9,735 4.7% Transient occupancy taxes 34 37 - - 34 37 -8.1%
Franchise taxes 2,997 2,960 - - 2,997 2,960 1.3%
Sales taxes 12,516 12,526 - - 12,516 12,526 -0.1%
Other taxes 185 142 - - 185 142 30.3%
Other 3,218 2,903 120 (573) 3,338 2,330 43.3%
Total revenues 66,465 61,775 39,991 30,489 106,456 92,264 15.4% Expenses
Governmental activities:
General government 4,285 4,057 - - 4,285 4,057 5.6%
Public safety 25,998 23,692 - - 25,998 23,692 9.7%
Public works 12,205 14,093 - - 12,205 14,093 -13.4%
Community development 12,449 11,766 - - 12,449 11,766 5.8% Culture and leisure 2,788 637 - - 2,788 637 337.7%
Interest on long-term debt 288 234 - - 288 234 23.1%
Business-type activities:
Water - - 8,696 5,251 8,696 5,251 65.6%
Sewer - - 1,598 1,452 1,598 1,452 10.1%
Power - - 23,601 18,804 23,601 18,804 25.5%
Non-major - - - - - - 100.0%
Total expenses 58,013 54,479 33,895 25,507 91,908 79,986 14.9% Increase (decrease) in net position 8,452 $ 7,296 $ 6,096 $ 4,982 $ 14,548 $ 12,278 $ 18.5% Governmental
Activities Activities
Business-type Total Primary
Government
Revenue
The City’s total revenue, excluding transfers, was $106,569,621 for the year ended June 30, 2025.
Revenue from governmental activities, excluding transfers, totaled $66,353,530 and revenue from business-type activities totaled $40,216,091, excluding transfers. During 2025, capital grants and contributions, restricted to the construction of capital assets, comprised 9.27 percent of the total revenue of the City, taxes and other general revenues provided 27.46 percent of the total revenue of the City, and charges for services and operating grants and contributions provided 63.18 percent of the total revenue of the City.
Most of the Governmental Activities revenues remained stable from 2024 to 2025, with an increase of about $2,426,000 in grants received and about $1,550,000 in development fees. Revenue from Businesstype Activities increased due to increased demand, fees and grant funding for Water.
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Packet Pg. 480 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Management’s Discussion and Analysis
For the Year Ended June 30, 2025
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Expenses
The City’s expenses totaled $91,907,786 for the year. Governmental activity expenses totaled $58,013,001, or 63.12 percent of total expenses. Business-type activities incurred $33,894,785 of expenses during the year, or 36.88 percent of total expenses.
The City's expenses increased between 2024 and 2025 mainly due to increased public safety and community development expenses, and increased costs for Water and Power.
Governmental Activities
The following table shows the cost of each of the City’s major programs and the net cost of the programs.
Net cost is the total cost less fees and other direct revenue generated by the activities and reflects the financial burden that was placed on the City’s taxpayers by each of the programs.
City of San Jacinto
Government-wide Financial Statements - Net Cost of Governmental Activities For the year ended June 30, 2025 and 2024
(in thousands)
Percent Percent
2025 2024 Change 2025 2024 Change
General government 4,285 $ 4,057 $ 5.6% 451 $ 404 $ 11.6% Public safety 25,998 23,692 9.7% 13,760 12,907 6.6%
Public works 12,205 14,093 -13.4% 4,609 7,053 -34.7%
Community development 12,449 11,766 5.8% (1,208) (229) 427.5% Culture and leisure 2,787 637 337.5% 2,787 637 337.5%
Total 57,724 $ 54,245 $ 6.4% 20,399 $ 20,772 $ -1.8%
of Services
Total Cost
of Services
Net Cost
The cost for all governmental activities this year was $57,724,542, not including interest expense of $288,459. The City’s taxpayers paid for approximately 50.29 percent of these costs. Fees, grants and contributions funded the balance of the costs of governmental activities.
Business-type Activities
Charges for services of the City’s business-type activities totaled $39,870,630. Expenses of businesstype activities were $33,894,785. Capital grants and contributions were not received in the water, solid waste, sewer, and power activities to finance capital improvements. The costs of capital improvements are reported as capital assets in the statement of net position, rather than as expenses in the statement of activities.
FINANCIAL ANALYSIS OF THE FUND STATEMENTS
The City uses fund accounting to assure and demonstrate compliance with finance-related legal requirements. The fund financial statements focus on individual parts of the City’s government, reporting the City’s operations in more detail than the government-wide financial statements.
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Packet Pg. 481 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Management’s Discussion and Analysis
For the Year Ended June 30, 2025
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The City’s governmental funds provide information on near-term inflows, outflows and balances of spendable resources. The City’s governmental funds reported combined fund balances at June 30, 2025 of $68,706,745, an increase of $6,314,180 from the previous fiscal year. Within the change of combined fund balances, the General Fund increased by $2,373,271, due to increased license and permit fees, development fees and grant revenues
City of San Jacinto
Fund Financial Statements - Fund Balances
As of June 30, 2025 and 2024
(in thousands)
Percent
2025 2024 Change
Nonspendable:
Prepaids $ 200 $ 234 -14.53%
Advances receivable 10,238 7,607 34.59%
Land held for resale 304 340 0.00%
Total nonspendable fund balances 10,742 8,181 31.30%
Restricted:
Special revenue funds 41,337 36,818 12.27%
Total restricted fund balances 41,337 36,818 12.27%
Assigned:
Capital projects funds 1,548 1,499 3.27%
Total assigned fund balances 1,548 1,499 3.27%
Unassigned:
General Fund 21,442 21,649 -0.96%
Special revenue funds (6,339) (5,755) 10.15%
Capital projects funds (23) - 100.00%
Total unassigned fund balances 15,080 15,894 -5.12%
Total fund balance $ 68,707 $ 62,392 10.12%
General Fund Budgetary Highlights
Over the course of the year, the City revised the City budget with adjustments for revenue and expenditure appropriations approved after the original budget was adopted.
Certain capital project appropriations originally budgeted but not expended in fiscal year 2024 were reappropriated in 2025 as part of the City’s capital budget.
After taking into account these adjustments, actual expenditures were $1,606,762 under the final budget amounts.
Resources available for appropriation were ($2,321,223) under the final budgeted amount, primarily due to multi-year grant funding revenue related to capital projects not received.
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Packet Pg. 482 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Management’s Discussion and Analysis
For the Year Ended June 30, 2025
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CAPITAL ASSET AND DEBT ADMINISTRATION
Capital Assets
As of June 30, 2025, the City had invested $109,644,223 in a broad range of capital assets, including police and fire equipment, buildings, parks and park improvements, roads, bridges, and water, solid waste and sewer utility systems.
City of San Jacinto
Capital Assets
As of June 30, 2025 and 2024
(net of depreciation, in thousands)
2025 2024 2025 2024 2025 2024
Capital assets not being depreciated:
Land and improvements 5,800 $ 5,800 $ 55 $ 55 $ 5,855 $ 5,855 $ Construction in progress 16,584 11,993 9,681 4,685 26,265 16,678 Depreciable/amortizable capital assets,
net of accumulated depreciation/amortization:
Buildings and systems 3,594 3,765 2,876 3,010 6,470 6,775 Machinery and equipment 2,912 3,298 2,962 3,238 5,874 6,536 Improvements other than buildings 3,346 3,463 4,056 3,421 7,402 6,884 Infrastructure 69,929 71,718 - - 69,929 71,718
Right-to-use assets 1,005 634 191 69 1,196 703
Total 103,170 $ 100,671 $ 19,821 $ 14,478 $ 122,991 $ 115,149 $ Activities
Business-type
Activities Total
Governmental
This year’s major capital asset additions included:
Government-wide, governmental activities:
• Approximately $4.3 million for the State Street Pavement and Rehabilitation Project. • Approximately $1.5 million for various improvements, including:
o Warren Road Drainage Project
o Traffic Calming striping
o New building for corporate yard
Government-wide, business-type activities:
• Approximately $4.3 million added to construction in progress for the Bath Well Treatment plant • Approximately $1.1 Million added to construction in progress for the Grand Well Treatment plant More detailed information about the City’s capital assets is presented in Note 4 to the financial statements.
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Packet Pg. 483 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Management’s Discussion and Analysis
For the Year Ended June 30, 2025
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Long-term Liabilities
At June 30, 2025, the City had $16,958,200 in long-term liabilities outstanding. More detailed information about the City’s total long-term liabilities is presented in Note 6 to the financial statements.
City of San Jacinto
Outstanding Liabilities
As of June 30, 2025 and 2024
(in thousands)
2025 2024 2025 2024 2025 2024
Special assessment debt with
government commitment,
including unpaid interest 1,084 $ 1,084 $ - $ - $ 1,084 $ 1,084 $ Loans payable - direct borrowing 1,534 1,671 11,880 2,922 13,414 4,593 Lease and subscription liabilities 974 594 194 73 1,168 667 Claims and judgments 408 470 - - 408 470
Compensated absences 679 684 205 193 884 877
Total 4,679 $ 4,503 $ 12,279 $ 3,188 $ 16,958 $ 7,691 $ Activities Activities Total
Governmental Business-type
ECONOMIC FACTORS AND NEXT YEAR
Since “the Great Recession,” the City has seen significant improvements in economic trends. Despite the economic turmoil caused by the COVID-19 pandemic, the City’s limited categories of revenue (such as not having tourism, hospitality and entertainment industries) helped minimize the economic effects on the City. Residential development and home sales have increased dramatically to their best numbers in years. Commercial development is strong as well, with several high-profile projects moving forward.
Public safety costs continue to increase, although at a slower rate than previously due to the County’s cost-minded Sheriff. Meanwhile, the City continues to focus on potential commercial growth, economic development, and attracting the businesses desirable to the residents of the City.
The City also placed a transactional-use tax measure (Measure V) on the November 2020 ballot, passing with 69 percent approval. This measure has provided a sustained increase in revenue, which has helped the City increase its public safety staffing and undertake much needed projects.
The General Fund budget for 2025-2026 appropriates $43,129,377, in operating and capital expenditures, an increase of 13.65 percent from the prior year.
CONTACTING THE CITY’S FINANCIAL MANAGEMENT
This financial report is designed to provide our citizens, taxpayers, customers, investors and creditors with a general overview of the City’s finances, and to demonstrate the City’s accountability for the money it receives. If you have questions about this report or need additional financial information, contact the City of San Jacinto Department of Finance, Accounting Division, PO Box 488, San Jacinto, California 92581, or visit the City’s web page at www.sanjacintoca.gov.
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Packet Pg. 484 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) Basic Financial Statements
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Packet Pg. 486 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) Government-Wide Financial Statements
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Packet Pg. 488 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Statement of Net Position
June 30, 2025
The accompanying notes are an integral part of these financial statements. -12-
Governmental Business-Type
Activities Activities Total
ASSETS
Cash and investments 82,179,812 $ 6,804,252 $ 88,984,064 $ Pension trust cash and investments 1,000,000 - 1,000,000 Cash and investments with fiscal agents, restricted 76,126 9,005,226 9,081,352 Receivables, net:
Accounts 1,809,239 11,094,585 12,903,824
Interest 947,048 - 947,048
Taxes 1,356,227 - 1,356,227
Notes receivable 3,045,155 - 3,045,155
Due from other governments 3,850,810 - 3,850,810
Deposits with others 1,250,116 - 1,250,116
Prepaids 251,801 948,368 1,200,169
Internal balances - - -
Inventories 37,051 389,813 426,864
Land held for resale 303,807 - 303,807
Capital assets:
Land and construction in progress 22,383,513 9,736,249 32,119,762 Other capital assets, net of depreciation 80,786,725 10,085,250 90,871,975 Total assets 199,277,430 48,063,743 247,341,173
DEFERRED OUTFLOWS OF RESOURCES
Pension related 3,754,668 947,847 4,702,515
Total deferred outflows of resources 3,754,668 947,847 4,702,515
LIABILITIES
Accounts payable and accrued liabilities 9,350,351 3,220,088 12,570,439 Accrued wages 246,546 75,138 321,684
Accrued interest payable 7,144 38,540 45,684
Due to other governments 179,129 - 179,129
Retention payable 464,455 - 464,455
Deposits payable 7,980,072 404,282 8,384,354
Unearned revenues 1,829,629 47,370 1,876,999
Noncurrent liabilities:
Due within one year 652,567 657,698 1,310,265
Due in more than one year 4,026,979 11,620,956 15,647,935 Net pension liability 12,170,297 2,703,936 14,874,233
Total liabilities 36,907,169 18,768,008 55,675,177
DEFERRED INFLOWS OF RESOURCES
Pension related 505,258 46,658 551,916
NET POSITION
Net investment in capital assets 99,113,288 10,530,935 109,644,223 Restricted for:
Public safety 863,533 - 863,533
Public works 19,447,903 - 19,447,903
Community development 7,959,208 - 7,959,208
Culture and leisure 13,330,331 - 13,330,331
Capital asset financing 76,126 9,005,226 9,081,352
Unrestricted 24,829,282 10,660,763 35,490,045
Total net position 165,619,671 $ 30,196,924 $ 195,816,595 $
4.1.a
Packet Pg. 489 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Statement of Activities
For the Year Ended June 30, 2025
The accompanying notes are an integral part of these financial statements. -13-
Operating Capital
Charges for Contributions Contributions
Functions/Programs Expenses Services and Grants and Grants Primary government
Governmental activities:
General government 4,284,542 $ - $ 3,833,763 $ - $
Public safety 25,998,030 11,570,194 667,763 -
Public works 12,205,219 213,364 4,657,870 2,725,361
Community development 12,448,726 5,117,870 1,388,946 7,150,190 Culture and leisure 2,788,025 - - -
Interest on long-term debt 288,459 - - -
Total governmental activities 58,013,001 16,901,428 10,548,342 9,875,551 Business-type activities:
Water 8,696,183 12,134,359 - -
Sewer 1,597,964 1,504,255 - -
Power 23,600,638 26,232,016 - -
Total business-type activities 33,894,785 39,870,630 - - Total 91,907,786 $ 56,772,058 $ 10,548,342 $ 9,875,551 $ General revenues:
Taxes:
Property tax, levied for general purpose
Property tax in-lieu of motor vehicle
Transient occupancy taxes
Franchise tax
Sales tax
Other taxes
Unrestricted investment earnings
Other
Transfers
Total general revenues
Change in net position
Net position, beginning of year
Net position, end of year
Program Revenues
4.1.a
Packet Pg. 490 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) Continued
The accompanying notes are an integral part of these financial statements. -14-
Governmental Business-Type
Activities Activities Total
$ - (450,779) $ (450,779) $
- (13,760,073) (13,760,073)
- (4,608,624) (4,608,624)
- 1,208,280 1,208,280
- (2,788,025) (2,788,025)
- (288,459) (288,459)
- (20,687,680) (20,687,680)
3,438,176 - 3,438,176
(93,709) - (93,709)
2,631,378 - 2,631,378
5,975,845 - 5,975,845
5,975,845 (20,687,680) (14,711,835)
4,367,537 - 4,367,537
5,822,477 - 5,822,477
34,059 - 34,059
2,997,033 - 2,997,033
12,515,978 - 12,515,978
185,434 - 185,434
232,675 2,523,753 2,756,428
- 581,938 581,938
(112,786) 112,786 -
119,889 29,140,995 29,260,884
6,095,734 8,453,315 14,549,049
24,101,190 157,166,356 181,267,546
$ 30,196,924 165,619,671 $ 195,816,595 $
Net Revenue (Expense) and Change in Net Position
Primary Government
4.1.a
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4.1.a
Packet Pg. 492 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) Fund Financial Statements
4.1.a
Packet Pg. 493 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) This page left intentionally blank
4.1.a
Packet Pg. 494 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Balance Sheet – Governmental Funds
June 30, 2025
The accompanying notes are an integral part of these financial statements. -15-
Capital
Projects Fund
General LLPD#2
Community
Facilities
District 2003
City Capital
Projects
Total NonMajor
Governmental
Funds
Total
Governmental
Funds
ASSETS
Cash and investments 31,207,692 $ 12,602,834 $ - $ 14,280,118 $ 23,287,910 $ 81,378,554 $ Pension trust cash and investments 1,000,000 - - - - 1,000,000 Restricted cash with fiscal agent 76,126 - - - - 76,126 Receivables, net:
Accounts 1,548,382 - - - 237,548 1,785,930
Interest 629,759 - - - 317,289 947,048
Taxes and assessments 151,613 54,468 37,246 - 1,112,900 1,356,227 Notes 80,000 - - - 2,965,155 3,045,155
Inventory 37,051 - - - - 37,051
Prepaids 140,112 - - 22,643 2,400 165,155
Deposits 38,000 - - - - 38,000
Due from other governments 2,409,277 - - - 1,441,533 3,850,810 Due from other funds 1,381,702 - - - - 1,381,702
Advances receivable 10,236,044 - - - 6,802,241 17,038,285 Land held for resale - - - - 303,807 303,807
Total assets 48,935,758 $ 12,657,302 $ 37,246 $ 14,302,761 $ 36,470,783 $ 112,403,850 $
LIABILITIES
Accounts payable 6,857,820 $ 326,010 $ 930,436 $ 831,431 $ 316,126 $ 9,261,823 $ Accrued payroll 222,379 - - - 8,236 230,615
Deposits payable 7,980,072 - - - - 7,980,072
Retention payable - - - 464,455 - 464,455
Due to other governments 35,001 - - - 144,128 179,129
Due to other funds - - - - 1,381,702 1,381,702
Unearned revenue 1,822,597 - - - 7,032 1,829,629
Advances payable - - 4,031,410 13,006,875 - 17,038,285
Total liabilities 16,917,869 326,010 4,961,846 14,302,761 1,857,224 38,365,710
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue 86,350 - - - 5,245,045 5,331,395
FUND BALANCES
Nonspendable 10,413,207 - - 22,643 306,207 10,742,057
Restricted 76,126 12,331,292 - - 28,929,247 41,336,665
Assigned - - - - 1,548,485 1,548,485
Unassigned 21,442,206 - (4,924,600) (22,643) (1,415,425) 15,079,538 Total fund balances (deficit) 31,931,539 12,331,292 (4,924,600) - 29,368,514 68,706,745 Total liabilities, deferred inflows
of resources and fund balances 48,935,758 $ 12,657,302 $ 37,246 $ 14,302,761 $ 36,470,783 $ 112,403,850 $ Special Revenue Fund
4.1.a
Packet Pg. 495 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position
June 30, 2025
The accompanying notes are an integral part of these financial statements. -16-
Fund balance of governmental funds 68,706,745 $
Amounts reported for governmental activities in
the Statement of Net Position are different because:
Net investment in capital assets have not been included as financial resources in governmental funds.
Capital assets not being depreciated 22,383,513
Capital assets being depreciated 228,125,806
Accumulated depreciation/amortization (147,339,081)
Long-term liabilities applicable to governmental activities are not due and payable in the current period and, accordingly, are not reported as governmental fund liabilities. All liabilities (both current and long-term) are reported in the Statement of Net Position.
Compensated absences (679,249)
Special assessment debt and unmatured interest (1,084,259) Lease liabilities (873,337)
Subscription liabilities (101,346)
Loans payable (1,533,553)
Accrued interest payable (7,144)
Net pension liability (12,170,297)
Unavailable revenue balances relating to various accounts and loans receivable are not reported as unavailable revenue in the Statement of Net Position since recognition is not based upon measurable and available criteria.
Low and moderate housing loans receivable 3,368,794
Accrued interest on low and moderate housing loans 213,364 Special assessments receivable 1,749,237
Pension related deferred outflows and inflows of resources in governmental activities are not financial resources and, therefore, are not reported in the governmental funds.
Deferred outflows of resources - pension related items 3,754,668 Deferred inflows of resources - pension related items (505,258) Internal Service Funds are used by management to charge costs of certain activities on individual funds. The assets and liabilities of the Internal Service Funds must be added to the Statement of Net Position since revenue recognition is not based upon measurable and available criteria.
Fund Net Position of Internal Service Funds 1,611,068
Net position of governmental activities 165,619,671 $
4.1.a
Packet Pg. 496 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Statement of Revenues, Expenditures and Changes in Fund Balances – Governmental Funds
For the Year Ended June 30, 2025
The accompanying notes are an integral part of these financial statements. -17-
General LLPD#2
Community
Facilities District
2003
City Capital
Projects
Total NonMajor
Governmental
Funds
Total
Governmental
Funds
REVENUES
Taxes 19,539,378 $ - $ - $ - $ 481,414 $ 20,020,792 $
Assessments - 5,417,514 4,016,282 - 2,851,993 12,285,789 Licenses and permits 2,186,088 - - - - 2,186,088
Fines and forfeitures 451,575 - - - 416,609 868,184
Development fees 507,317 - - - 2,007,132 2,514,449
Intergovernmental 8,586,666 - - - 5,623,189 14,209,855
Charges for services 4,803,486 - - - - 4,803,486
Investment earnings 2,376,853 365,192 - - 978,320 3,720,365 Other/overhead allocations 5,370,245 - - - 292,599 5,662,844 Total revenues 43,821,608 5,782,706 4,016,282 - 12,651,256 66,271,852
EXPENDITURES
Current:
General government 4,188,097 - 32,235 - 44,096 4,264,428 Public safety 21,277,200 - 4,060,933 - 88,688 25,426,821 Public works 4,459,059 - - - 2,176,229 6,635,288
Community development 8,376,300 2,885,519 - - 928,117 12,189,936 Culture and leisure 187,009 1,923,680 - - 672,940 2,783,629 Capital outlay 900,590 - - 7,842,340 306,936 9,049,866
Debt service:
Principal 137,605 - - - - 137,605
Interest 91,521 - 197,579 - - 289,100
Total expenditures 39,617,381 4,809,199 4,290,747 7,842,340 4,217,006 60,776,673 Excess (deficiency) of revenues
over (under) expenditures 4,204,227 973,507 (274,465) (7,842,340) 8,434,250 5,495,179
OTHER FINANCING SOURCES (USES)
Lease acquisition 536,354 - - - - 536,354
Subscription acquisition 119,861 - - - - 119,861
Transfers in 532,774 - 128,317 7,842,340 - 8,503,431
Transfers out (3,019,945) - - - (5,320,700) (8,340,645) Total other financing sources (uses) (1,830,956) - 128,317 7,842,340 (5,320,700) 819,001 Net change in fund balances 2,373,271 973,507 (146,148) - 3,113,550 6,314,180 Fund balances (deficit), beginning of year 29,558,268 11,357,785 (4,778,452) - 26,254,964 62,392,565 Fund balances (deficit), end of year 31,931,539 $ 12,331,292 $ (4,924,600) $ - $ 29,368,514 $ 68,706,745 $ Special Revenue Fund
Capital Projects
Fund
4.1.a
Packet Pg. 497 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) This page left intentionally blank
4.1.a
Packet Pg. 498 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities For the Year Ended June 30, 2025
The accompanying notes are an integral part of these financial statements. -18-
Net change in fund balances - total governmental funds 6,314,180 $ Amounts reported for governmental activities in the Statement of Activities are different because:
Governmental funds report capital outlays as expenditures. However, in the Statement of Activities, the cost of those assets are allocated over their estimated useful lives as depreciation expense or allocated to the appropriate functional expense when the cost is below the capitalization threshold. Additionally, capital contributions are reported as program revenues in the Statement of Activities.
This activity is reconciled as follows:
Cost of assets capitalized less disposals 8,527,064
Depreciation/amortization expense (6,028,577)
Revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in the fund. 81,678 Long-term debt proceeds provide current financial resources to Governmental Funds, but issuing debt increases long-term liabilities in the Government-Wide Statement of Net Position. Principal repayments of long-term debt are expenditures/uses in the Governmental Funds, but they reduce long-term liabilities in the Government-Wide Statement of Net Position.
Repayments:
2018 street light financing 137,605
Lease liabilities 112,973
Subscription liabilities 162,769
Issuance:
Subscription acquisition (536,354)
Subscription acquisition (119,861)
Some expenses reported in the Statement of Activities do not require the use of current financial resources, and therefore, are not reported as expenditures in the governmental funds.
Change in compensated absences 4,330
Change in accrued interest payable 641
Pension expense net of adjustments (527,641)
Internal Service Funds are used by management to charge the cost of insurance to individual funds. The net revenue of the Internal Service Funds are reported with governmental activities. 324,508
Change in net position of governmental activities 8,453,315 $
4.1.a
Packet Pg. 499 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Statement of Net Position – Proprietary Funds
June 30, 2025
The accompanying notes are an integral part of these financial statements. -19-
Governmental
Activities
Water Sewer Power Total
Internal
Service Fund
ASSETS
Current assets:
Cash and investments 4,037,715 $ 2,173,855 $ 592,682 $ 6,804,252 $ 801,258 $ Receivables, net:
Accounts 1,162,877 429,503 9,502,205 11,094,585 23,309
Deposits with others - - - - 1,212,116
Inventories 389,813 - - 389,813 -
Prepaid expenses 10,206 9,686 928,476 948,368 86,646
Due from other governments - - - - -
Total current assets 5,600,611 2,613,044 11,023,363 19,237,018 2,123,329 Non-current assets:
Cash and investments with fiscal agents, restricted 9,005,226 - - 9,005,226 - Capital assets:
Land 55,222 - - 55,222 -
Construction in progress 9,681,027 - - 9,681,027 -
Building and system 6,677,062 31,301 - 6,708,363 -
Machinery and equipment 6,983,805 1,120,462 14,564 8,118,831 - Improvements other than buildings 6,034,728 4,859,337 - 10,894,065 - Right-to-use assets 357,819 - - 357,819 -
Less accumulated depreciation/amortization (12,743,148) (3,243,882) (6,798) (15,993,828) - Total non-current assets 26,051,741 2,767,218 7,766 28,826,725 - Total assets 31,652,352 5,380,262 11,031,129 48,063,743 2,123,329
DEFERRED OUTFLOWS OF RESOURCES
Pension related 631,898 315,949 - 947,847 -
Total deferred outflows of resources 631,898 315,949 - 947,847 -
LIABILITIES
Current liabilities:
Accounts payable 582,623 545,618 2,091,847 3,220,088 88,528 Accrued wages 48,781 23,435 2,922 75,138 15,931
Accrued interest 38,540 - - 38,540 -
Deposits payable 404,282 - - 404,282 -
Unearned revenue - - 47,370 47,370 -
Long term liabilities, current portion 634,478 19,655 3,565 657,698 - Total current liabilities 1,708,704 588,708 2,145,704 4,443,116 104,459 Non-current liabilities:
Claims payable - - - - 407,802
Long term liabilities, net of current portion 11,570,916 39,426 10,614 11,620,956 - Net pension liability 1,802,624 901,312 - 2,703,936 -
Total non-current liabilities 13,373,540 940,738 10,614 14,324,892 407,802 Total liabilities 15,082,244 1,529,446 2,156,318 18,768,008 512,261
DEFERRED INFLOWS OF RESOURCES
Pension related 31,105 15,553 - 46,658 -
Total deferred inflows of resources 31,105 15,553 - 46,658 -
NET POSITION
Net investment in capital assets 7,755,951 2,767,218 7,766 10,530,935 - Restricted 9,005,226 - - 9,005,226 -
Unrestricted 409,724 1,383,994 8,867,045 10,660,763 1,611,068 Total net position 17,170,901 $ 4,151,212 $ 8,874,811 $ 30,196,924 $ 1,611,068 $ Business-type Activities
Enterprise Funds
4.1.a
Packet Pg. 500 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Statement of Revenues, Expenses and Changes in Fund Net Position – Proprietary Funds
For the Year Ended June 30, 2025
The accompanying notes are an integral part of these financial statements. -20-
Governmental
Activities
Water Sewer Power Total
Internal
Service Fund
OPERATING REVENUES
Sales and charges for services 7,649,447 $ 1,504,255 $ 25,414,058 $ 34,567,760 $ 3,012,283 $ Miscellaneous/sale of ground water 4,484,912 - 817,958 5,302,870 39,072 Total operating revenues 12,134,359 1,504,255 26,232,016 39,870,630 3,051,355
OPERATING EXPENSES
Personnel services 1,039,029 499,153 74,916 1,613,098 416,737 Employee benefits 638,716 290,827 38,696 968,239 162,992 Office expense & field supplies 530,449 62,537 29,413 622,399 16,763 Depreciation 644,061 237,635 972 882,668 -
Outside services 804,377 159,399 766,313 1,730,089 1,924,698 Repairs and maintenance 823,304 12,032 - 835,336 138,637 Utilities 651,789 7,754 - 659,543 3,648
Overhead allocations 1,062,169 328,627 96,945 1,487,741 - Watermaster charges 2,311,318 - - 2,311,318 -
Energy purchases - - 22,532,999 22,532,999 -
Claims and judgements - - - - 13,372
Total operating expenses 8,505,212 1,597,964 23,540,254 33,643,430 2,676,847 Operating income (loss) 3,629,147 (93,709) 2,691,762 6,227,200 374,508
NON-OPERATING REVENUES (EXPENSES)
Investment earnings 167,419 63,872 1,384 232,675 -
Interest and fiscal charges (190,971) - (60,384) (251,355) - Total non-operating revenues (expenses) (23,552) 63,872 (59,000) (18,680) - Other income (expense) before transfers 3,605,595 (29,837) 2,632,762 6,208,520 374,508 Transfers out (112,786) - - (112,786) (50,000)
Change in net position 3,492,809 (29,837) 2,632,762 6,095,734 324,508 Net position, beginning of year 13,678,092 4,181,049 6,242,049 24,101,190 1,286,560 Net position, end of year 17,170,901 $ 4,151,212 $ 8,874,811 $ 30,196,924 $ 1,611,068 $ Business-type Activities
Enterprise Funds
4.1.a
Packet Pg. 501 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Statement of Cash Flows - Proprietary Funds
For the Year Ended June 30, 2025
The accompanying notes are an integral part of these financial statements. -21-
Governmental
Activities
Water Sewer Power Total
Internal
Service Fund
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customers 11,999,290 $ 1,461,945 $ 26,139,153 $ 39,600,388 $ 3,081,584 $ Cash payments to suppliers (5,992,338) (424,693) (23,765,743) (30,182,774) (2,242,062) Cash payments to employees for services (1,584,809) (738,595) (114,394) (2,437,798) (572,705) Net cash provided by
operating activities 4,422,143 298,657 2,259,016 6,979,816 266,817
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Transfers from other funds - - - - (50,000)
Transfers to other funds (112,786) - - (112,786) -
Cash (paid) received from other funds - - (1,617,391) (1,617,391) - Net cash used for non-capital
financing activities (112,786) - (1,617,391) (1,730,177) (50,000)
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Acquisition or construction of capital assets (5,885,119) (200,884) - (6,086,003) - Proceeds from loan 9,097,000 - - 9,097,000 -
Lease principal paid (16,617) (2,906) - (19,523) -
Loan principal paid (138,090) - - (138,090) -
Interest and fiscal charges paid (192,883) - (60,384) (253,267) - Net cash provided by (used for) capital and
related financing activities 2,864,291 (203,790) (60,384) 2,600,117 -
CASH FLOWS FROM INVESTING ACTIVITIES
Interest income received 167,419 63,872 1,384 232,675 - Net cash provided by
investing activities 167,419 63,872 1,384 232,675 -
Net change in cash and cash equivalents 7,341,067 158,739 582,625 8,082,431 216,817 Cash and cash equivalents, beginning of year 5,701,874 2,015,116 10,057 7,727,047 584,441 Cash and cash equivalents, end of year 13,042,941 $ 2,173,855 $ 592,682 $ 15,809,478 $ 801,258 $ Reconciliation of cash and cash equivalents to amounts
reported on the statement of net position:
Reported on the statement of net position:
Cash and investments 4,037,715 $ 2,173,855 $ 592,682 $ 6,804,252 $ 801,258 $ Cash and investments with fiscal agents, restricted 9,005,226 - - 9,005,226 - Totals 13,042,941 $ 2,173,855 $ 592,682 $ 15,809,478 $ 801,258 $ Reconciliation of operating income (loss) to net cash
provided by (used for) operating activities:
Operating income (loss) 3,629,147 $ (93,709) $ 2,691,762 $ 6,227,200 $ 374,508 $ Adjustments to reconcile operating income (loss) to
net cash provided by (used for) operating activities:
Depreciation 644,061 237,635 972 882,668 -
(Increase) decrease in assets:
Accounts receivable (147,225) (42,310) (92,863) (282,398) 30,229 Inventories 136,105 - - 136,105 -
Prepaid expenses 11,709 (1,863) 1,281,524 1,291,370 (43,734) Deposits with others - - - - (68,600)
Due from other governments 13,930 - - 13,930 -
Deferred outflows of resources 137,872 68,936 - 206,808 - Increase (decrease) in liabilities:
Accounts payable 43,254 147,519 (1,621,597) (1,430,824) 29,720 Accrued wages 18,337 5,258 - 23,595 7,024
Deposits payable (1,774) - - (1,774) -
Claims payable - - - - (62,330)
Change in compensated absences 2,609 10,131 (782) 11,958 - Deferred inflows of resources (50,582) (25,290) - (75,872) - Net pension liability (15,300) (7,650) - (22,950) -
Total adjustments 792,996 392,366 (432,746) 752,616 (107,691) Net cash provided by (used for) operating activities 4,422,143 $ 298,657 $ 2,259,016 $ 6,979,816 $ 266,817 $ Noncash capital and related financing activities:
Acquisition of property and equipment 140,087 $ - $ - $ 140,087 $ - $ Enterprise Funds
Business-type Activities -
4.1.a
Packet Pg. 502 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) Fiduciary Funds
4.1.a
Packet Pg. 503 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) This page left intentionally blank
4.1.a
Packet Pg. 504 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Statement of Fiduciary Net Position – Fiduciary Funds
June 30, 2025
The accompanying notes are an integral part of these financial statements. -22-
Private
Purpose
Trust Fund Custodial Fund
ASSETS
Cash and investments 320,053 $ 1,535,791 $
Cash and investments with fiscal agents 579 2,105,576
Receivables:
Due from other governments 234,046 -
Assessments receivable - 11,949
Prepaid expenses 2,147 -
Property held for resale 53,672 -
Capital assets:
Land 220,227 -
Total assets 830,724 3,653,316
LIABILITIES
Accounts payable and accrued liabilities 88,470 -
Unearned revenue 89,918 -
Long-term liabilities:
Due within one year 370,000 -
Due in more than one year 4,220,000 -
Total liabilities 4,768,388 -
NET POSITION (DEFICIT)
Held for dissolution of Redevelopment Agency (3,937,664) - Restricted for bondholders - 3,653,316
Total net position (3,937,664) $ 3,653,316 $
4.1.a
Packet Pg. 505 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Statement of Changes in Fiduciary Net Position – Fiduciary Funds For the Year Ended to June 30, 2025
The accompanying notes are an integral part of these financial statements. -23-
Private
Purpose Custodial
Trust Fund Fund
ADDITIONS
Property taxes 590,831 $ 1,457,888 $
Investment earnings 9,671 126,593
Total additions 600,502 1,584,481
DEDUCTIONS
Administrative payments 28,951 62,804
Principal payments to bondholders - 820,000
Interest expense 209,918 606,925
Total deductions 238,869 1,489,729
Change in net position 361,633 94,752
Net position (deficit), beginning of year (4,299,297) 3,558,564 Net position (deficit), end of year (3,937,664) $ 3,653,316 $
4.1.a
Packet Pg. 506 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) Notes to the Basic Financial Statements
4.1.a
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Packet Pg. 508 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-24-
I. SIGNIFICANT ACCOUNTING POLICIES
Note 1: Summary of significant accounting policies
a. Reporting entity
The City of San Jacinto (City) was incorporated on April 20, 1888 under the laws of the State of California and enjoys all the rights and privileges applicable to a general law city. It is governed by an elected five-member board. As required by generally accepted accounting principles, these financial statements present the City of San Jacinto (the primary government) and its component units. The component units discussed below are included in the reporting entity because of their operational or financial relationships with the City of San Jacinto.
Blended component units:
San Jacinto Financing Authority
The Authority is a joint exercise of powers authority organized and existing under and by virtue of the Joint Exercise of Powers Act. The City formed the Authority by the execution of a joint exercise of powers agreement dated as of May 25, 1993 and amended and restated in its entirety on May 19, 1997 by and between the City and the former Redevelopment Agency.
Pursuant to the Joint Powers Act, the Authority is authorized to issue revenue bonds to provide funds to make loans to public entities; such revenue bonds are to be repaid from the repayments of such loans. The Authority is governed by a five-member Board which consists of all members of the City Council. The Mayor of the City is the Chairperson of the Authority.
The City Manager acts as the Executive Director, the City Clerk acts as the Secretary and the Finance Director of the City acts as the Treasurer of the Authority. Debts issued through the San Jacinto Financing Authority are expected to be repaid with City resources. Accordingly, separate financial statements for the Financing Authority are not prepared.
Industrial Development Authority
The Industrial Development Authority of the City of San Jacinto was activated by the City Council of the City of San Jacinto. The purpose of the Industrial Development Authority is to assist the community in industry development by providing a financing mechanism to encourage such development in the City. Separate financial statements for the Industrial Development Authority are not currently prepared.
As the governing bodies of the San Jacinto Financing Authority and Industrial Development Authority are composed entirely of the council members of the City, the above component units were included within the scope of the reporting entity of the City.
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Packet Pg. 509 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-25-
Note 1: Summary of significant accounting policies (continued) b. Government-wide and fund financial statements
The government-wide financial statements include a statement of net position and a statement of activities. These statements present summaries of governmental and business-type activities for the City accompanied by a total column. Fiduciary activities of the City are not included in these statements. Certain eliminations have been made as prescribed by generally accepted accounting principles in regard to interfund activities, payables, and receivables. All internal balances in the statement of net position have been eliminated except those representing balances between the governmental activities and the business-type activities, which are presented as internal balances and eliminated in the total primary government column. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on user fees and charges for support.
The statement of activities demonstrates the degree to which the direct and indirect expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions, including special assessments, that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenue are reported instead as general revenues. In the statement of activities, Internal Service Fund transactions have been eliminated; however, those transactions between the governmental and business-type activities have not been eliminated.
Separate financial statements are provided for governmental, proprietary, and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements.
c. Measurement focus, basis of accounting, and financial statement presentation The government-wide statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund and fiduciary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of the cash flows. Accordingly, all of the City's assets, deferred outflows of resources, liabilities, and deferred inflows of resources, including capital assets, as well as infrastructure assets, and long-term liabilities, are included in the accompanying statement of net position. The statement of activities presents changes in net position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred. The types of transactions reported as program revenues for the City are reported in three categories: 1) charges for services, 2) operating grants and contributions, and 3) capital grants and contributions.
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Packet Pg. 510 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
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Note 1: Summary of significant accounting policies (continued) c. Measurement focus, basis of accounting, and financial statement presentation (continued) Governmental fund financial statements are reported using the current financial resources measurement focus and the modified-accrual basis of accounting. Under the modified-accrual basis of accounting, revenues are recognized in these funds when susceptible to accrual (i.e., when they are both measurable and available). "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. For this purpose, the City considers property taxes collected after year-end, as available if they are collected within 60 days of the end of the current fiscal period. Other revenues susceptible to accrual include sales tax, state gasoline taxes, utility user’s tax, investment income, and certain other intergovernmental revenues. Expenditures in the governmental funds are generally recognized in the accounting period in which the related fund liability is incurred, if measurable, except for unmatured principal and interest on general long-term debt, as well as compensated absences and claims and judgments, which are recognized when due.
The City reports the following major governmental funds:
The General Fund is the government's primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund.
The LLPD#2 Special Revenue Fund is used to account for special assessment tax revenue activity in the City’s Districts, restricted for maintenance and service to District facilities.
The Community Facilities District 2003 Fund is used to account for special assessments levied on real property to mitigate the cost of Public Safety.
The City Capital Projects Fund is used to account for construction from various sources.
The City reports the following major proprietary funds:
The Water Fund is used to account for the provision of water services to the residents and businesses of part of the City.
The Sewer Fund is used to account for the revenues and expenses in connection with the operation and improvement of the City's sewer system.
The Power Fund is used to account for the revenues and expenses in connection with the Community Choice Aggregation (CCA) program, which allows the City to purchase and generate electricity for residents and businesses within the City.
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Packet Pg. 511 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-27-
Note 1: Summary of significant accounting policies (continued) c. Measurement focus, basis of accounting, and financial statement presentation (continued) Additionally, the City reports the following fund types:
The Internal Service Funds are used to account for the resources, goods, and services that are provided by one department to other departments or agencies of the City on a costreimbursement basis. The City’s Internal Service Fund accounts for Innovation & Technology, General Liability, Workers Compensation, and Unemployment Insurance services.
The Private Purpose Trust Fund is used to account for the activities of the Successor Agency to the Redevelopment Agency to the City of San Jacinto. The fund's primary purpose is to expedite the dissolution of the former Agency's net position (except for the low and moderate income housing funds non-cash assets) in accordance with AB X1 26 and AB 1484.
The Custodial Funds are used to account for the resources held by the City in a fiduciary capacity.
The financial statements of the City have been prepared in conformity with accounting principles generally accepted in the United States of America as applied to governmental agencies. The Governmental Accounting Standards Board (GASB) is the accepted standardsetting body for establishing governmental accounting and financial reporting principles, and the City has adopted all pronouncements of the GASB.
As a general rule, the effect of interfund activity has been eliminated from the governmentwide financial statements.
Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes.
Proprietary funds distinguish operating revenues and expenses from nonoperating items.
Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues for the Enterprise Funds are charges for goods and services.
Operating expenses for these same Enterprise Funds include the cost of sales and services, administration expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses.
The City's fiduciary funds include a custodial fund for the administration of the 2002-1 CFD debt issuance.
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Packet Pg. 512 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-28-
Note 1: Summary of significant accounting policies (continued) d. Accounting for encumbrances
Encumbrance accounting, under which purchase orders, contracts, and other commitments for the expenditure of monies are recorded in order to reserve that portion of the applicable appropriation, is employed in the governmental fund types. e. Cash and investments
For the purpose of the statement of cash flows, the City considers cash and cash equivalents as short term, highly liquid investments that are both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. The City follows the practice of pooling cash and investments of all funds. Since cash and investments are pooled the City utilizes the assumption that cash and investments in the Enterprise and Internal Service Funds are cash and cash equivalents. f. Restricted cash and investments
Cash and investments restricted as to their use either by bond resolution or by the funding source to a specific purpose are classified as restricted cash and investments. g. Inventories
Inventories of materials and supplies are valued at cost using the first-in, first-out basis. The City uses the consumption method of accounting for inventories. h. Prepaid expenses
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements. The cost of prepaid items is recorded as expenditures/expenses when consumed rather than purchased.
i. Property held for resale
The Successor Agency has property held for resale with a net realizable value of $53,672. j. Capital assets
Capital assets, which include property, plant and equipment, and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items), are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets (excluding infrastructure) are defined by the City as assets with an initial, individual cost of more than $5,000 and an estimated useful life in excess of two years. Infrastructure assets are defined by the City as assets with an initial, individual cost of more than $50,000 and an estimated useful life in excess of two years. Such assets are capitalized at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at acquisition value at the date of acquisition.
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Packet Pg. 513 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-29-
Note 1: Summary of significant accounting policies (continued) j. Capital assets (continued)
Property, plant and equipment of the City is depreciated using the straight-line method over the following useful lives:
Buildings 40 years
Improvements 40 years
Equipment 3 to 7 years
Infrastructure 20 to 80 years
k. Intangible Assets
Intangible Right to Use assets are related to equipment or real property that the City has obtained the right to utilize for a specified period of time through the use of a lease agreement.
The life of the right to use asset is for the same period as the lease and amortized on a straightline basis over that period. l. Judgments and claims
The City utilizes its internal service funds to account for judgments and claims. Self-insurance claims payable of $23,635 and $384,167, respectively, are recorded in the Workers’ Compensation and Liability Insurance funds.
m. Compensated absences
In accordance with current standards, a liability is recorded for unused vacation and similar compensatory leave balances since the employees' entitlement to these balances are attributable to services already rendered and it is probable that virtually all of these balances will be liquidated by either paid time off or payments upon termination or retirement and are generally liquidated by the General Fund.
Under current standards, a liability is recorded for unused sick leave balances only to the extent that it is probable that the unused balances will result in payments upon termination.
Other amounts of unused sick leave are excluded from the liability since their payment is contingent solely upon the occurrence of a future event (illness) which is outside the control of the City and the employee.
In governmental funds, compensated absences (unpaid vacation and sick leave) are recorded as expenditures in the year they are paid. The balance of unpaid vacation and vested sick leave at year end is recorded in the government-wide financial statements as these amounts will be liquidated from future resources.
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Packet Pg. 514 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-30-
Note 1: Summary of significant accounting policies (continued) m. Compensated absences (continued)
Sick leave is payable when an employee is unable to work because of illness. Employees may accrue sick leave up to a maximum of 960 hours. There is a sick leave buyback program.
An employee with 2 years of service may sell up to 96 hours of sick leave at the end of the calendar year. After 5 years of service, employees who voluntarily leave or are laid off may cash out sick leave upon separation from service.
n. Interfund advances
The City Capital Projects Fund accounts for the City capital projects expenditures. It is the City’s policy and practice to transfer cash (advance funds), even if not yet received, to the City Capital Projects Fund at the time of project commitment. Advances payable from the City Capital Projects Fund and receivable to the advancing fund, are recorded to reflect the outstanding amounts advanced at June 30, 2025. When funds are expended at the City’s Capital Projects Fund a transfer is recorded between the two funds and the advance is respectively relieved.
o. Net Position Flow Assumption
Sometimes the City will fund outlays for a particular purpose from both restricted (e.g., restricted bond or grant proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted net position and unrestricted net position in the governmentwide and proprietary fund financial statements, a flow assumption must be made about the order in which the resources are considered to be applied. When both restricted and unrestricted resources are available for use, it is the City’s policy to use restricted resources first, and then unrestricted resources as they are needed. p. Use of estimates in the preparation of financial statements The financial statements have been prepared in accordance with generally accepted accounting principles and necessarily include amounts based on estimates and assumptions by management. Actual results could differ from those amounts.
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Packet Pg. 515 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-31-
Note 1: Summary of significant accounting policies (continued) q. Property tax calendar
In 1978, a state constitutional amendment (Proposition 13) provided that the property tax rate be generally limited to 1% of market value, levied only by the county and shared with all other jurisdictions. The County of Riverside collects property taxes for the City. Tax liens attach annually as of 12:01 A.M. on the first day in March preceding the fiscal year for which the taxes are levied. The tax levy covers the fiscal period July 1st to June 30th. All secured personal property taxes and one-half of the taxes on real property are due November 1st; the second installment is due February 1st. All taxes are delinquent, if unpaid, on December 10th and April 10th, respectively. Unsecured personal property taxes become due on the first of March each year and are delinquent, if unpaid, on August 31st. For governmental funds, City property tax revenues are recognized when levied to the extent that they result in current receivables collectible within 60 days. In the government-wide statements, revenues are recognized in the year taxes are levied.
r. Pension plan
For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Plan and additions to/deductions from the Plan’s fiduciary net position have been determined on the same basis. For this purpose, benefit payments (including refunds of employee contributions) are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value.
Generally Accepted Accounting Principles requires that the reported results must pertain to liability and asset information within certain defined timeframes. For this report, the following timeframes are used.
Valuation Date June 30, 2023
Measurement Date June 30, 2024
Measurement Period July 1, 2023 to June 30, 2024
4.1.a
Packet Pg. 516 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
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Note 1: Summary of significant accounting policies (continued) s. Fund balance
Fund balance is classified into five different components. The components are nonspendable, restricted, committed, assigned, and unassigned.
• Nonspendable - resources that are not in spendable form or required to be maintained intact such as an endowment.
• Restricted - resources that are subject to externally enforceable legal restrictions; these restrictions are either externally imposed by creditors, grantors, contributors, or laws or regulations of other governments or imposed by law through constitutional provisions or enabling legislation.
• Committed - resources that are constrained to specific purposes by a formal action of the City Council such as an ordinance or resolution, whichever is the higher level of constraint.
The constraint remains binding unless removed in the same formal manner by the City Council. Council action to commit fund balance must occur within the fiscal reporting period while the amount committed may be determined subsequently. • Assigned - resources that are constrained by the City’s intent to be used for specific purposes, but are neither restricted nor committed.
• Unassigned - within the General Fund, the residual resources, either positive or negative, in excess of what can be properly classified in one of the other four fund balance categories. Within all other governmental funds, any negative residual resources.
When expenditures are incurred for purposes for which both restricted and unrestricted (committed, assigned, or unassigned) fund balances are available, the City’s policy is to first apply restricted fund balance. When expenditures are incurred for purposes for which committed, assigned or unassigned fund balances are available, the City’s policy is to first apply committed fund balance, then assigned fund balance, and finally unassigned fund balance.
Those charged with governance approved the Finance Director to have authority to assign unrestricted fund balance amounts where the City’s intent is for those amounts to be used for specific purposes. This delegation of authority is for the sole purpose of reporting these amounts in the annual financial statements.
4.1.a
Packet Pg. 517 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-33-
Note 1: Summary of significant accounting policies (continued) t. Deferred outflows/inflows of resources
In addition to assets, the statement of financial position (balance sheet) will sometimes report a separate section for deferred outflows of resources. This separate financial element, deferred outflows of resources, represents a consumption of net position or fund balance that applies to future periods and so will not be recognized as an outflow of resources (expense/expenditure) until then. In addition to liabilities, the statement of financial position (balance sheet) will sometimes report a separate section for deferred inflows of resources.
This separate financial element, deferred inflows of resources, represents an acquisition of net position or fund balance that applies to future periods and so will not be recognized as an inflow of resources (revenue) until that time.
u. Implementation of new GASB pronouncements
During the year ended June 30, 2025, the City implemented the following new GASB pronouncements:
GASB Statement No. 101 – Compensated Absences. The objective of this Statement is to better meet the information needs of financial statement users by updating the recognition and measurement guidance for compensated absences. That objective is achieved by aligning the recognition and measurement guidance under a unified model and by amending certain previously required disclosures.
GASB Statement No. 102 – Certain Risk Disclosures. The objective of this Statement is to provide users of government financial statements with essential information about risks related to a government’s vulnerabilities due to certain concentrations or constraints.
The remainder of this page left intentionally blank.
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Packet Pg. 518 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-34-
II. STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY
Note 1: Summary of significant accounting policies (continued) a. Budgetary principles
General budget policies
The City Council approves each year’s budget submitted by the City Manager prior to the beginning of the new fiscal year. Public meetings are conducted prior to its adoption by the Council. Supplemental appropriations, where required during the period, are also approved by the Council. Several supplemental appropriations were made during the year. Intrafund budget changes are approved by the City Manager. In most cases, expenditures may not exceed appropriations at the department level. At fiscal year-end all unencumbered operating budget appropriations lapse with the exception of continuing appropriations.
General Fund expenditures may not legally exceed budgeted appropriations. Budgeted revenue amounts, as presented in the accompanying basic financial statements, represent the original budget as modified by adjustments during the year for those items which were contingent upon new or additional revenue sources. Budgeted expenditure amounts represent original appropriations adjusted for supplemental appropriations during the year. b. Excess of expenditures over appropriations
Excess of expenditures over appropriations by department in individual funds with budgets presented are as follows:
Final Budget Expenditures Excess
General Fund by Function:
Public works 3,933,518 $ 4,459,059 $ (525,541) $
Community development 8,263,663 8,376,300 (112,637)
Community Facilities District 2003 by Function:
General government 30,500 32,235 (1,735)
Debt service:
Interest 100,000 197,579 (97,579)
Non-major governmental funds by function:
Traffic Safety
Public works 40,000 50,501 (10,501)
Capital outlay 35,000 45,251 (10,251)
CFD #2003-2 Sewer Lift Operations
Public works 22,055 22,967 (912)
Air Quality Improvement
Public works 6,000 7,920 (1,920)
CFD 2018-1
Community development 3,395 3,978 (583)
CFD 2017-1
Community development 369,801 413,290 (43,489)
Housing Successor Authority
General government 13,000 40,269 (27,269)
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Packet Pg. 519 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-35-
Note 1: Summary of significant accounting policies (continued) c. Negative fund balance and other disclosures
The following funds had negative fund balances at June 30, 2025:
Amount
Capital Projects Fund:
Community Facilities District 2003 (4,924,600) $
Special revenue:
Traffic Safety (155,586)
CFD #2003-2 Sewer Lift Operations (372)
CSA 152 (176,735)
AB3229 COPS Program (141,861)
Special District Administration (3,911)
Capital projects:
TUMF Capital Projects (664,978)
Debt service:
Assessment District 87-1 (269,582)
Governmental Funds - Non-Major Funds
Governmental Funds - Major Funds
The City plans to eliminate negative fund balance in the Community Facilities District 2003 fund (currently covered by a loan from the General Fund) with increased revenues from future growth, decreased future expenditures, and paying off the loan from the General Fund.
The City plans to eliminate negative fund balance in the Traffic Safety Fund and AB3229 COPS Program with ongoing revenue streams and cost control measures.
The City plans to eliminate negative fund balance in the CSA 152 with future reimbursements from the County of Riverside.
The City plans to eliminate negative fund balance in the Special District Administration fund with adjustment allocation for expenditures.
The City plans to eliminate negative fund balance TUMF Capital Projects fund with future cost reimbursements from WRCOG.
The City plans to eliminate Assessment District 87- 1 negative fund balance with the proceeds of property taxes received when properties in the district are sold.
4.1.a
Packet Pg. 520 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
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III. DETAIL NOTES ON ALL FUNDS
Note 2: Cash and investments
Cash and investments as of June 30, 2025 are classified in the accompanying financial statements as follows:
Statement of Net Position
Governmental activities:
Cash and investments 82,179,812 $
Pension trust fund 1,000,000
Cash and investments with fiscal agents, restricted 76,126 Business-type activities:
Cash and investments 6,804,252
Cash and investments with fiscal agents, restricted 9,005,226 Total 99,065,416
Statement of Fiduciary Net Position
Cash and investments 1,855,844
Cash and investments with fiscal agents 2,106,155
Total 3,961,999
Total cash and investments $ 103,027,415
Cash and investments are comprised of the following:
Demand accounts/money market account 35,078,148 $
Cash on hand 6,050
Investments 67,943,217
Total $ 103,027,415
The City follows the practice of pooling cash and investments for all funds except for funds required to be held by outside fiscal agents under the provisions of bond indentures.
Interest income earned on pooled cash and investments is allocated monthly by the City to the various funds based on the month-end cash balance. Interest income from cash and investments with fiscal agents is credited directly to the related fund.
Investments authorized by the California Government Code and the City’s investment policy
The table on the following page identifies the investment types that are authorized for the City’s investment policy. The table also identifies certain provisions of the City’s investment policy that address interest rate risk, credit risk and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustees that are governed by the provisions of debt agreements of the City, rather than the general provisions of the California Government Code or the City’s investment policy.
4.1.a
Packet Pg. 521 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
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Note 2: Cash and investments (continued)
Investments authorized by the California Government Code and the City’s investment policy,
(continued)
Maximum Maximum
Investment Types Maximum Percentage Investment
Authorized by State Law Maturity Allowed* in One Issuer U.S. Treasury Obligations 5 years None None
U.S. Agency Securities 5 years None None
Commercial Paper 270 days 25% 5%
Bankers' Acceptance 180 days 40% 5%
Negotiable Certificates of Deposit 5 years 30% 5%
Non-Negotiable Certificates of Deposit 5 years 20% 5%
Certificate of Deposit Placement Service (CDARS) 5 years 30% None Collateralized Bank Deposits N/A None None
Repurchase Agreements 1 year None None
Medium-Term Corporate Notes 5 years 30% 5%
Money Market Mutual Funds N/A 20% None
Municipal Obligations 5 years 30% 5%
Mutual Funds N/A 10% None
Supranationals 5 years 30% 10%
Asset-Backed Securities 5 years 20% None
Time Deposits N/A 20% None
Local Agency Investment Fund (LAIF) N/A 70% 75,000,000 $ Riverside County Investment Fund N/A 70% None
JPA Pools N/A 50% None
California Asset Management Program N/A 50% None
*Based on state law requirements or investment policy requirements, whichever is more restrictive.
Investments authorized by debt agreements
Provisions of the debt agreements, rather than the general provisions of the California Government Code or the City’s investment policy govern investment of debt proceeds held by bond trustees. The table below identifies the investment types that are authorized for investments held by bond trustees. The table also identifies certain provisions of these debt agreements that address interest rate risk, credit risk, and concentration of credit risk.
Maximum Maximum
Authorized Maximum Percentage Investment
Investment Type Maturity Allowed in One Issuer
U.S. Treasury Obligations None None None
U.S. Agency Securities None None None
Commercial Paper 270 days None None
Money Market Mutual Funds N/A None None
Investment Agreements None None None
Certificates of Deposit, Savings Account None None None Municipal Obligations None None None
Repurchase Agreements None None None
Local Agency Investment Fund (LAIF) None None 75,000,000 $
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Packet Pg. 522 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
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Note 2: Cash and investments (continued)
Disclosures relating to interest rate risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. One of the ways that the City manages its exposure to interest rate risk is by purchasing a combination of shorter term and longer term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations.
Information about the sensitivity of the fair values of the City’s investments (including investments held by bond trustees) to market interest rate fluctuations is provided by the following table that shows the distribution of the City’s investments by maturity:
Investment Type Totals 12 or Less 13 to 24 25 to 60 More than 60 Local Agency Investment Fund (LAIF) 45,571,981 $ 45,571,981 $ - $ - $ - $ U.S. Treasury Obligations 14,229,104 367,661 4,197,276 9,664,167 - U.S. Agency Securities 3,332,766 753,632 1,202,614 1,376,520 - Asset-Backed Securities 174,599 - 80,969 93,630 -
Medium-Term Corporate Notes 3,860,792 528,058 395,883 2,936,851 - Supranational Bonds 386,788 - 214,243 172,545 -
Municipal Bonds 245,201 - 14,940 230,261 -
Held by Bond Trustees:
Money Market Funds 141,986 141,986 - - -
Total 67,943,217 $ 47,363,318 $ 6,105,925 $ 14,473,974 $ - $ Remaining Maturity (In Months)
Disclosures relating to credit risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization (Standard & Poor’s). Presented below is the minimum rating required by (where applicable) the City’s investment policy or debt agreements, and the actual rating as of year-end for each investment type.
Minimum
Investment Type Totals legal rating AAA to AA- A+ to B Not rated Local Agency Investment Fund (LAIF) 45,571,981 $ N/A - $ - $ 45,571,981 $ U.S. Treasury Obligations 14,229,104 N/A 14,229,104 - - U.S. Agency Securities 3,332,766 N/A 3,332,766 - -
Asset Backed Securities 174,599 AA 174,599 - -
Medium-Term Corporate Notes 3,860,792 A 1,606,459 2,254,333 - Supranational Bonds 386,788 A 386,788 - -
Municipal Bonds 245,201 A 245,201 - -
Held by Bond Trustees:
Money Market Funds 141,986 AAA 141,986 - -
Total 67,943,217 $ 20,116,903 $ 2,254,333 $ 45,571,981 $ Rating as of year end
4.1.a
Packet Pg. 523 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
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Note 2: Cash and investments (continued)
Concentration of credit risk
The investment policy of the City contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code. The City had no investments in any one issuer (other than U.S. Treasury Securities, mutual funds and external investment pools) that represented 5% or more of total City investments.
Custodial credit risk
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g., broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code and the City’s investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the following provision for deposits:
The California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The market value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agencies. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150 percent of the secured public deposits, and other eligible securities as defined by Government Code Sections 53651 and 53652. As of June 30, 2025, the City held deposits with financial institutions in excess of Federal Depository Insurance Corporation (FDIC) limits. These funds were held in collateralized accounts as required by the California Government Code as stated above.
With respect to investments, custodial credit risk generally applies only to direct investments in marketable securities. Custodial credit risk does not apply to a City’s indirect investment in securities through the use of mutual funds or government investment pools, including LAIF.
Pursuant to the agreement with financial institutions where certificates of deposit are held, the securities pledged are consistent with the collateral as noted in the previous paragraph held by the financial institution’s custodian but not in the City’s name.
Investment in investment pools
The City is a voluntary participant in LAIF which is regulated by the California Government Code under the oversight of the Treasurer of the State of California. The fair value of the City's investment in this pool is reported in the accompanying financial statements at amounts based upon the City's pro-rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis.
4.1.a
Packet Pg. 524 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
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Note 2: Cash and investments (continued)
Currently, LAIF does not have an investment rating. LAIF has a minimum $5,000 transaction amount in increments of $1,000 with a maximum of 15 transactions (combination of deposits and withdrawals) per month. LAIF requires a one-day prior notice for deposits and withdrawals of $10 million or more.
LAIF is a governmental investment pool managed and directed by the California State Treasurer and is not registered with the Securities and Exchange Commission. An oversight committee comprised of California State officials and various participants provide oversight to the management of the fund. The daily operations and responsibilities of LAIF fall under the auspices of the State Treasurer's office. LAIF allows a total investment of $75,000,000.
Fair value of investments
The City reports its investments at fair value, or amortized cost in the balance sheet. All investment income, including changes in the fair value of investments, is recognized, as revenue in the operating statement.
The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. The City uses the market approach in valuing its Level 1 and Level 2 investments. The City has the following recurring fair value measurements as of June 30, 2025:
Total Level 1 Level 2 Level 3
Asset-Backed Securities 174,599 $ - $ 174,599 $ - $
U.S. Agency Securities 3,332,766 - 3,332,766 -
Medium-Term Corporate Notes 3,860,792 - 3,860,792 -
Supranational Bonds 386,788 - 386,788 -
U.S. Treasury Obligations 14,229,104 - 14,229,104 -
Municipal Bonds 245,201 - 245,201 -
Total investments by fair value level 22,229,250 - $ 22,229,250 $ - $ Investments not subject to fair value measurement:
Money Market Fund 141,986
Local Agency Investment Fund (LAIF) 45,571,981
Total 67,943,217 $
Investments by Fair Value Level
Fair Value Measurement Using
4.1.a
Packet Pg. 525 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
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Note 3: Notes Receivable
Notes receivable Balance at
June 30, 2025
(a) In FY 2006-2007 and FY 2007-2008 the former Redevelopment Agency made a loan to a developer for a low and moderate income housing project. Amounts provided to the developer were for $1,238,225 and $1,061,775 in fiscal years 2007 and 2008, respectively. There are no annual set or structured payments. The promissory note will accrue interest at the rate of one percent per year simple interest and shall be repaid from the cash flow of the project and shall be due and payable by the expiration or termination of the affordability covenants which is 55 years from the completion of the project. The project was completed on October 2, 2008. Pursuant to AB XI 26, the Redevelopment Agency of the City of San Jacinto was dissolved and this asset was transferred to the City's Successor Housing Authority Fund. $ 2,300,000
(b) The former Redevelopment Agency operates various loan and grant programs to assist residents who meet certain qualifications for the purpose of providing home rehabilitation and home ownership assistance to low and moderate income households. The loans are secured by a deed of trust and no monthly payments are required. At the end of the 45-year term, the loans are forgiven unless the following occurs during the grant term: 1) property is sold or transferred or 2) property is no longer owner-occupied, at which time full repayment would be required. Pursuant to AB XI 26, the Redevelopment Agency of the City of San Jacinto was dissolved and this asset was transferred to the City's Successor Housing Authority Fund. Additionally, the asset has been formally recognized on the balance sheet, whereas in the past it has only been referenced by note disclosure. 665,155
(c) In FY 2019-2020, the City loaned a local business $180,000 in accordance with its established policy of actively promoting economic development within the City.
The loan accrues interest at an equivalent of the prevailing prime rate plus 2%.
Provided the borrower maintains and operates during all of the term and is not in default of any of the terms of the agreement, then, in consideration of the public benefit received by the City, the total outstanding balance of the loan shall be reduced by ten percent (10%) a year during the term and the borrower shall not be required to make any payments to the City during the term, and the entire unpaid balance of the loan and accrued interest thereon shall be canceled and discharged on the loan's maturity date, which shall be ten (10) years from the date of the promissory note. 80,000
Note receivable total 3,045,155
Accrued interest on note receivable (a) above 213,364
Note receivable and accrued interest total 3,258,519 $
4.1.a
Packet Pg. 526 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
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Note 4: Capital assets
Capital asset activity for governmental activities for the year ended June 30, 2025 was as follows:
Balance at Balance at
June 30, 2024 Additions Deletions June 30, 2025
Governmental activities:
Capital assets not being depreciated:
Land 5,799,840 $ - $ - $ 5,799,840 $
Construction in progress 11,992,682 7,478,555 (2,887,564) 16,583,673 Total capital assets not
being depreciated 17,792,522 7,478,555 (2,887,564) 22,383,513 Capital assets being depreciated/amortized:
Buildings and systems 7,216,278 - - 7,216,278
Machinery and equipment 8,535,549 329,759 (273,195) 8,592,113 Improvements other than buildings 7,017,322 100,580 - 7,117,902 Infrastructure 200,470,799 2,849,519 - 203,320,318
Right-to-use assets - leases* 1,018,323 536,354 (144,141) 1,410,536 Right-to-use assets - subscriptions 542,003 119,861 (193,205) 468,659 Total capital assets
being depreciated/amortized 224,800,274 3,936,073 (610,541) 228,125,806 Less accumulated depreciation/amortization for:
Buildings and systems (3,450,790) (171,024) - (3,621,814) Machinery and equipment (5,237,465) (716,328) 273,195 (5,680,598) Improvements other than buildings (3,554,004) (217,733) - (3,771,737) Infrastructure (128,752,757) (4,638,062) - (133,390,819) Right-to-use assets - leases (584,023) (119,480) 144,141 (559,362) Right-to-use assets - subscriptions (342,006) (165,950) 193,205 (314,751) Total accumulated depreciation/amortization (141,921,045) (6,028,577) 610,541 (147,339,081) Total capital assets being depreciated/amortized, net 82,879,229 (2,092,504) - 80,786,725 Governmental activities capital assets, net 100,671,751 $ 5,386,051 $ (2,887,564) $ 103,170,238 $ Depreciation and amortization expense for governmental activities was charged to functions/programs of the primary government as follows:
Governmental activities:
General government $ 510,597
Public safety 571,209
Public works 4,909,865
Community development 36,906
Total depreciation/amortization expense - governmental activities 6,028,577 $
4.1.a
Packet Pg. 527 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
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Note 4: Capital assets (continued)
Capital asset activity for business-type activities for the year ended June 30, 2025 was as follows:
Balance at Balance at
June 30, 2024 Additions Deletions June 30, 2025
Business-type activities:
Capital assets not being depreciated
Land 55,222 $ - $ - $ 55,222 $
Construction in progress 4,685,457 6,030,674 (1,035,104) 9,681,027 Total capital assets not
being depreciated/amortized 4,740,679 6,030,674 (1,035,104) 9,736,249 Capital assets being depreciated/amortized:
Buildings and systems 6,708,363 - - 6,708,363
Machinery and equipment 8,063,502 55,329 - 8,118,831
Improvements other than buildings 9,858,961 1,035,104 - 10,894,065 Right-to-use assets - leases 320,785 140,087 (103,053) 357,819 Total capital assets
being depreciated/amortized 24,951,611 1,230,520 (103,053) 26,079,078 Less accumulated depreciation/amortization for:
Buildings and systems (3,698,150) (133,739) - (3,831,889) Machinery and equipment (4,825,760) (331,228) - (5,156,988) Improvements other than buildings (6,438,058) (400,309) - (6,838,367) Right-to-use assets - leases (252,245) (17,392) 103,053 (166,584) Total accumulated depreciation/amortization (15,214,213) (882,668) 103,053 (15,993,828) Total capital assets being depreciated/amortized, net 9,737,398 347,852 - 10,085,250 Business-type activities capital assets, net 14,478,077 $ 6,378,526 $ (1,035,104) $ 19,821,499 $ Depreciation expense for business-type activities was charged to functions/programs of the primary government as follows:
Business-type activities:
Water $ 644,061
Sewer 237,635
Power 972
Total depreciation/amortization expense - business-type activities 882,668 $
4.1.a
Packet Pg. 528 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
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Note 5: Long-term liabilities
a. Changes in long-term liabilities
Changes in long-term liabilities during the year ended June 30, 2025 were as follows:
Balance at Balance at Due within
June 30, 2024 Additions Deletions June 30, 2025 one year Governmental activities
Long-term debt
Direct borrowing:
2018 Street Light Financing 1,671,158 $ - $ (137,605) $ 1,533,553 $ 145,405 $ Subtotal long-term debt 1,671,158 - (137,605) 1,533,553 145,405 Other long-term liabilities
Special assessment debt with
governmental commitment 455,000 - - 455,000 -
Matured unpaid interest on special
assessment debt with government
commitment 629,259 - - 629,259 -
Lease liabilities 449,956 536,354 (112,973) 873,337 272,208 Subscription liabilities 144,254 119,861 (162,769) 101,346 61,388 Claims and judgment 470,132 - (62,330) 407,802 -
Compensated absences 683,579 - (4,330) 679,249 173,566
Subtotal other long-term liabilities 2,832,180 656,215 (342,402) 3,145,993 507,162 Total long-term liabilities 4,503,338 $ 656,215 $ (480,007) $ 4,679,546 $ 652,567 $ Business-type activities
Long-term debt
Direct borrowing:
2015 Installment sale 2,921,565 $ - $ (138,090) $ 2,783,475 $ 155,456 $ 2025 Installment sale - 9,097,000 - 9,097,000 371,000
Subtotal long-term debt 2,921,565 9,097,000 (138,090) 11,880,475 526,456 Other long-term liabilities
Lease liabilities 72,999 140,087 (19,522) 193,564 60,219 Compensated absences 193,342 11,273 - 204,615 71,023
Subtotal other long-term liabilities 266,341 151,360 (19,522) 398,179 131,242 Total Long-term liabilities 3,187,906 $ 9,248,360 $ (157,612) $ 12,278,654 $ 657,698 $ The General Fund typically liquidates compensated absences, claims and judgements of the Governmental Activities.
b. 2018 Streetlight Equipment Purchase Agreement - Direct Borrowing In September 2018, the City signed an equipment lease/purchase agreement with Banc of America Leasing & Capital LLC in the amount of $2,170,813. The purpose of the agreement was to provide financing to the City to assist in the acquisition, installation, retrofitting, repair, improvement, servicing and maintenance of streetlights and other capital improvements. The interest and principal are due semi-annually with payments due on December 1 and June 1 each year. Principal and interest payments will be made through December 1, 2033 with total annual amounts of $229,126, and $114,563 in the final year. The interest rate of the debt is currently 5.59%.
4.1.a
Packet Pg. 529 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-45-
Note 5: Long-term liabilities (continued)
b. 2018 Streetlight Equipment Purchase Agreement - Direct Borrowing (continued) Repayment under the Agreement shall be absolute and unconditional, subject to annual appropriation, repayments will be made from the City's general fund plus any other legally available funds of the City.
The annual debt service requirements on this debt are as follows:
Fiscal year Total
ending June 30, Principal Interest Payment
2026 145,405 $ 83,722 $ 229,127 $
2027 153,646 75,480 229,126
2028 162,355 66,771 229,126
2029 171,558 57,569 229,127
2030 181,282 47,844 229,126
2031-2034 719,307 82,634 801,941
Total 1,533,553 $ 414,020 $ 1,947,573 $
Street Light Financing
c. Special assessment debt with government commitment
$1,415,000 Assessment District 87-1 Bonds, Series 1987 A, dated March 19, 1987, were issued to finance certain improvements pursuant to the Improvement Bond Act of 1915. The payment of the bonds is secured by assessment liens upon certain lands as described in said assessment and are not direct liabilities of the City. The City may, however, from time to time, when due and delinquent, advance available funds to pay the amount of any succeeding installment of the assessment on said land and the interest thereon on the 1915 bonds. Prior to the fiscal year ended June 30, 1995, the City of San Jacinto advanced funds for said delinquencies. During the fiscal year ended June 30, 1995 the City did not advance further amounts to the reserve fund and had commenced foreclosure proceedings. The City has since settled $670,000 of the principal, due to a completed Bond Tender agreement in exchange for a portion of the parcels.
In accordance with GASB Statement No. 6 “Special Assessments,” the special assessment debt has been reflected in the accompanying financial statements at June 30, 2025 as “Special Assessment Debt with Government Commitment” in the amount of $1,084,259. This includes an amount of matured unpaid principal of $455,000. Matured unpaid interest on these bonds is also reported for interest payments due but not paid as of June 30, 2025, in the amount of $629,259. These balances have been outstanding for several years and as such, the City has recorded the corresponding taxes receivable of $1,084,259 in addition to unavailable revenue in the same amount on the Governmental Funds Balance Sheet.
4.1.a
Packet Pg. 530 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
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Note 5: Long-term liabilities (continued)
d. Installment Sales - Business-type activities
2015 Installment Sale - Direct Borrowing
In July 2015, the City signed an installment sale agreement with Municipal Finance Corporation in the amount of $3,902,310, maturing in 20 years at an annual interest rate of
3.5%. The proceeds are to be used for the acquisition and construction of certain energy efficiency improvements to the water supply facilities of the City’s Water Enterprise. Net revenues of the City’s Water Enterprise have been pledged to the payment of the installment payments.
The annual debt service requirements to maturity for the installment sale are as follows:
Fiscal year Total
ending June 30, Principal Interest Payment
2026 155,456 $ 96,128 $ 251,584 $
2027 174,131 90,529 264,660
2028 194,199 84,263 278,462
2029 215,748 77,283 293,031
2030 238,875 69,535 308,410
2031-2035 1,603,867 200,448 1,804,315
2036 201,199 3,521 204,720
Total 2,783,475 $ 621,707 $ 3,405,182 $
2015 Installment Sale
The City may prepay the principal components of the installment payments in whole or in part, on any date on or after September 1, 2026 by paying the installment payment required to be paid on such date plus a prepayment price equal to the principal amount of the installment payments to be prepaid, together with 1% prepayment premium thereon. The City shall give the Corporation written notice of its intention to exercise its option not less than thirty days in advance of the date to exercise.
In the event of default, installment owner may declare all principal components of the unpaid installment payments, together with accrued interest thereon at the rate of interest per annum represented by the installment sale from the immediately preceding installment payment date on which payment was made, to be immediately due and payable, whereupon the same shall immediately become due and payable.
4.1.a
Packet Pg. 531 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-47-
Note 5: Long-term liabilities (continued)
d. Installment Sales - Business-type activities (continued) 2025 Installment Sale - Direct Borrowing
In April 2025, the City entered into an Installment Purchase Agreement with the City of San Jacinto Public Financing Authority, which was concurrently assigned to Banc of America Public Capital Corp, in the amount of $9,097,000. The agreement bears interest at a fixed annual rate of 4.3204% and matures on February 7, 2045. Proceeds from the installment purchase will be used to finance the acquisition, design, and construction of improvements to the City’s water system, including upgrades to the Grand Well, treatment facilities, and related infrastructure.
The City’s obligation to make installment payments is a special obligation payable solely from the net revenues of the Water Enterprise and does not constitute a general obligation or indebtedness of the City within the meaning of any constitutional or statutory debt limitation.
The net revenues of the Water Enterprise are pledged on a parity basis with the City’s outstanding 2015 Installment Sale Agreement.
The annual debt service requirements to maturity for the installment sale are as follows:
Fiscal year Total
ending June 30, Principal Interest Payment
2026 371,000 $ 307,128 $ 678,128 $
2027 304,000 373,715 677,715
2028 318,000 360,430 678,430
2029 331,000 346,560 677,560
2030 346,000 332,109 678,109
2031-2035 1,969,000 1,420,202 3,389,202
2036-2040 2,438,000 951,028 3,389,028
2041-2045 3,020,000 369,999 3,389,999
Total 9,097,000 $ 4,461,171 $ 13,558,171 $
2025 Installment Sale
The City may optionally prepay the installment payments, in whole or in part, on or after August 7, 2035, on any installment payment date, upon providing not less than 45 days’ written notice to the assignee. Prepayment requires payment of the outstanding principal amount being prepaid, together with accrued interest to the prepayment date, at a price of 100% of the principal amount (no prepayment premium applies).
In the event of default, including failure to make installment payments when due or failure to comply with material covenants of the agreement, the assignee may declare all unpaid principal components of the installment payments, together with accrued interest, immediately due and payable. Remedies available to the assignee are limited to the pledged net revenues of the Water Enterprise, and the City is not obligated to levy taxes or use any other City funds for repayment.
4.1.a
Packet Pg. 532 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-48-
Note 5: Long-term liabilities (continued)
f. Lease Liabilities
Governmental activities
As of June 30, 2025, the City’s governmental activities had 36 active leases. The leases have payments that range from $299 to $2,935 and interest rates that range from 0.5420% to
3.4510%. As of June 30, 2025, the total combined value of the lease liability is $873,337. The combined value of the right to use asset, as of June 30, 2025 of $1,410,536 with accumulated amortization of $559,362 is included in Note 4 of these financial statements.
Future payment on the total lease liabilities are as follows.
Fiscal year Total
ending June 30, Principal Interest Payment
2026 272,208 $ 7,561 $ 279,769 $
2027 217,484 4,934 222,418
2028 190,267 2,578 192,845
2029 136,767 - 136,767
2030 56,611 595 57,206
Total 873,337 $ 15,668 $ 889,005 $
Lease liabilities
See note 4 for the net book value of the right-to-use assets acquired through leases.
Business-type activities
As of June 30, 2025, the City’s business-type activities had 10 active leases. The leases have payments that range from $553 to $1,981 and interest rates that range from 0.5420% to
3.4510%. As of June 30, 2025, the total combined value of the lease liability is $193,564. The combined value of the right to use asset, as of June 30, 2025 of $357,819 with accumulated amortization of $166,584 is included in Note 4 of these financial statements.
Future payments on the business-type lease liabilities are as follows:
Fiscal year Total
ending June 30, Principal Interest Payment
2026 60,219 $ 4,317 $ 64,536 $
2027 41,432 3,180 44,612
2028 39,099 2,091 41,190
2029 29,112 1,135 30,247
2030 23,702 306 24,008
Total 193,564 $ 11,029 $ 204,593 $
Lease liabilities
4.1.a
Packet Pg. 533 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
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Note 5: Long-term liabilities (continued)
g. Debt issued without government commitment
Refinancing of $17,841,416 Community Facilities District No. 2001-2 Special Tax Bonds In March 2016, $17,975,000 City of San Jacinto Community Facilities District No. 2001-1 (Rancho San Jacinto, Phase 2) 2016 Special Tax Refunding bonds were issued by the San Jacinto Financing Authority for the purpose of refunding the $17,841,416 San Jacinto Financing Authority 2002 Local Agency Revenue Bonds, Series A. The balance at June 30, 2025 is $12,325,000.
All bonds represent special limited obligations of the City, payable solely from special taxes levied CFD No. 2002-1, as applicable, and are not an obligation of the General Fund of the City of San Jacinto. The City has covenanted to annually levy the special tax and, in the event of any delinquency in payment to the City of the special tax, the City may order action to foreclose on any property liens.
h. Subscriptions payable
Governmental activities
As of June 30, 2025, the City had 9 active subscriptions. The subscriptions have payments that range from $0 to $51,818 and interest rates that range from 2.1940% to 3.3780%. As of June 30, 2025, the total combined value of the subscription liability is $101,346. The combined value of the right to use asset, as of June 30, 2025 of $468,659 with accumulated amortization of $314,751 is included in Note 4 of these financial statements.
Annual debt service requirements for this liability are as follows:
Fiscal year Total
ending June 30, Principal Interest Payment
2026 61,388 $ 2,446 $ 63,834 $
2027 39,958 941 40,899
Total 101,346 $ 3,387 $ 104,733 $
Subscription liabilities
4.1.a
Packet Pg. 534 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
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Note 6: Short-term/long-term interfund borrowings
Interfund transactions - Due to/due from other funds
Individual fund interfund receivable and payable balances at June 30, 2025 were as follows:
Receivable Fund
General
Payable Fund Fund
Non-Major Governmental Funds 1,381,702 $
Total 1,381,702 $
The interfund payables represent temporary loans to cover negative cash balances.
Interfund transactions - Advances
Individual fund interfund advances to and from balances at June 30, 2025 were as follows:
Payable Fund General Fund
Non-Major
Governmental
Funds Totals
City Capital Projects Fund 6,204,634 $ 6,802,241 $ 13,006,875 $ Community Facilities District 2003 4,031,410 - 4,031,410 Total 10,236,044 $ 6,802,241 $ 17,038,285 $
Receivable Fund
Advances between the City Capital Projects Fund and other City funds are for cash advanced to the City Capital Projects Fund for expected project costs. Also, see Note 1.
The General Fund has advanced cash to the Community Facilities District 2003 Fund to cover costs.
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4.1.a
Packet Pg. 535 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-51-
Note 7: Transfers in and out
Individual fund transfers in and transfers out activity as of June 30, 2025 were as follows:
Community Non-Major
General Facilities City Capital Governmental
Transfers-Out Fund District 2003 Projects Funds Totals
General Fund - $ - $ 3,019,945 $ - $ 3,019,945 $
Non-Major Governmental Funds 482,774 128,317 4,709,609 - 5,320,700 Water Fund - - 112,786 - 112,786
Internal Service Funds 50,000 - - - 50,000
Total 532,774 $ 128,317 $ 7,842,340 $ - $ 8,503,431 $
Transfers-In
• Transfers to the General Fund from non-major governmental funds represent reimbursement for costs of public safety and grant reimbursement costs. • Transfers to the City Capital Projects Fund from all other City funds are to fund various capital projects of the City. Also, see Note 1.
• Transfers to CFD 2003 were parking fines transferred by CSA 152. • Transfers between non-major governmental funds are to pay for operational costs, as directed by City Council.
• Transfers from Internal Service Funds to the General Fund are to fund equipment replacement reserves.
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4.1.a
Packet Pg. 536 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
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Note 8: Defined benefit pension plan
A. General information about the pension plan
Plan description
All qualified permanent and probationary employees are eligible to participate in the Public Agency Cost-Sharing Multiple-Employer Defined Benefit Pension Plan (Plan or PERF C) administered by the California Public Employees’ Retirement System (CalPERS.) The Plan consists of a miscellaneous pool and a safety pool (also referred to as “risk pools”), which are comprised of individual employer miscellaneous and safety rate plans, respectively. Plan assets may be used to pay benefits for any employer rate plan of the safety and miscellaneous pools.
Accordingly, rate plans within the safety or miscellaneous pools are not separate plans under generally accepted accounting principles. Individual employers may sponsor more than one rate plan in the miscellaneous or safety risk pools. The City sponsors four rate plans (three miscellaneous and one safety). Benefit provisions under the Plan are established by State statute and City resolution. CalPERS issues publicly available reports that include a full description of the pension plan regarding benefit provisions, assumptions and membership information that can be found on the CalPERS’ website, at www.calpers.ca.gov.
Benefits provided
CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full-time employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for non-duty disability benefits after 5 years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost-of-living adjustments for each plan are applied as specified by the Public Employees’ Retirement Law.
The Plan operates under the provisions of the California Public Employees’ Retirement Law (PERL), the California Public Employees’ Pension Reform Act of 2013 (PEPRA), and the regulations, procedures and policies adopted by the CalPERS Board of Administration. The Plan’s authority to establish and amend the benefit terms are set by the PERL and PEPRA, and may be amended by the California state legislature and in some cases require approval by the CalPERS Board.
4.1.a
Packet Pg. 537 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
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Note 8: Defined benefit pension plan (continued)
A. General information about the pension plan (continued) The Plan’s provisions and benefits in effect as of June 30, 2025 are summarized as follows:
Miscellaneous Plan
On or after
Hire date
Prior to
January 1, 2011
January 1, 2011
and prior to
January 1, 2013
On or after
January 1, 2013
Benefit formula 2.7% @ 55 2% @ 55 2.0% @ 62
Benefit vesting schedule 5 years of service 5 years of service 5 years of service Benefit payments monthly for life monthly for life monthly for life Retirement age 50-58 & up 50-67 & up 52-67 & up
Monthly benefits, as a % of eligible compensation 2.0%-2.7% 1.426%-2.418% 1.0%-2.5% Employee contribution rates 8.000% 7.000% 7.750%
Required employer contribution rates 16.020% 12.520% 7.870% Miscellaneous
Safety Plan
Hire date
Police Fire Police Fire
Benefit formula 2.0% @ 50 2.0% @ 55 2.7% @ 55 2.7% @ 55 Benefit vesting schedule 5 years of service 5 years of service 5 years of service 5 years of service Benefit payments monthly for life monthly for life monthly for life monthly for life Retirement age 50-55 & up 50-55 & up 50-57 & up 50-57 & up Monthly benefits, as a % of eligible compensation 2%-2.7% 1.426%-2% 2.0% to 2.7% 2.0% to 2.7% Required employee contribution rates $44,325 Monthly $44,325 Monthly $39,945 Monthly $39,945 Monthly On or after
January 1, 2013
Safety-Inactive
Prior to
January 1, 2013
Contributions
Section 20814(c) of the California Public Employees’ Retirement Law (PERL) requires that the employer contribution rates for all public employers are determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. The total plan contributions are determined through CalPERS’ annual actuarial valuation process. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The employer is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. Employer contribution rates may change if plan contracts are amended. Payments made by the employer to satisfy contribution requirements that are identified by the pension plan terms as plan member contribution requirements are classified as plan member contributions. Employer contributions to the Plan for the fiscal year ended June 30, 2025 were $ 2,073,086.
4.1.a
Packet Pg. 538 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-54-
Note 8: Defined benefit pension plan (continued)
B. Net pension liability
The City's net pension liability for the Plan is measured as the total pension liability, less the pension plan’s fiduciary net position. The net pension liability of the Plan is measured as of June 30, 2024, using an annual actuarial valuation as of June 30, 2023 rolled forward to June 30, 2024 using standard update procedures. A summary of principal assumptions and methods used to determine the net pension liability is as follows.
Actuarial methods and assumptions used to determine total pension liability The collective total pension liability for the June 30, 2024 measurement period was determined by an actuarial valuation as of June 30, 2023, with update procedures used to roll forward the total pension liability to June 30, 2024. The collective total pension liability was based on the following assumptions:
Valuation date June 30, 2023
Measurement date June 30, 2024
Actuarial cost method Entry Age Actuarial Cost Method
Asset valuation method Fair Value of Assets
Actuarial assumptions:
Discount rate 6.90%
Inflation 2.30%
Salary increases Varies by Entry Age and Service
Mortality rate table (1) Derived using CALPERS' membership data for all Funds Post retirement benefit increase The lesser of contract COLA or 2.30% until Purchasing Power Protection Allowance floor on purchasing power applies, 2.3% thereafter. (1) The mortality table used was developed based on CalPERS-specific data. The rates incorporate Generational Mortality to capture ongoing mortality improvement using 80% of Scale MP-2020 published by the Society of Actuaries. For more details on this table, please refer to the 2021 experience study report from November 2021 that can be found on the CalPERS website.
Long-term expected rate of return
The long-term expected rate of return on pension plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class.
In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market return expectations. Using historical returns of all of the funds’ asset classes, expected compound (geometric) returns were calculated over the next 20 years using a building-block approach. The expected rate of return was then adjusted to account for assumed administrative expenses of 10 Basis points.
4.1.a
Packet Pg. 539 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-55-
Note 8: Defined benefit pension plan (continued)
B. Net pension liability (continued)
Actuarial methods and assumptions used to determine total pension liability (continued) The expected real rates of return by asset class are as follows:
Asset class
Assumed asset
allocation Real return 1, 2
Global equity - cap-weighted 30% 4.54%
Global equity - non-cap-weighted 12% 3.84%
Private equity 13% 7.28%
Treasury 5% 0.27%
Mortgage-backed securities 5% 0.50%
Investment grade corporates 10% 1.56%
High yield 5% 2.27%
Emerging market debt 5% 2.48%
Private debt 5% 3.57%
Real assets 15% 3.21%
Leverage (5%) (0.59%)
Total 100%
2 Figures are based on the 2021-22 Asset Liability Management study. 1 An expected inflation of 2.30% used for this period.
Discount rate
The discount rate used to measure the total pension liability for PERF C was 6.90%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability.
Subsequent events
There were no subsequent events that would materially affect the results presented in this disclosure.
4.1.a
Packet Pg. 540 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-56-
Note 8: Defined benefit pension plan (continued)
C. Net pension liability (continued)
Pension Plan Fiduciary Net Position
Information about the pension plan’s assets, deferred outflows of resources, liabilities, deferred inflows of resources, and fiduciary net position are presented in CalPERS’ audited financial statements, which are publicly available reports that can be obtained at CalPERS’ website, at www.calpers.ca.gov. The plan’s fiduciary net position and additions to/deductions from the plan’s fiduciary net position have been determined on the same basis used by the pension plan, which is the economic resources measurement focus and the accrual basis of accounting. Benefits and refunds are recognized when due and payable in accordance with the terms of the plan.
Investments are reported at fair value.
C. Proportionate share of net pension liability
The following table shows the City’s proportionate share of the net pension liability over the measurement period.
Plan Total Pension
Liability (a)
Plan Fiduciary Net
Position (b)
Plan Net Pension Liability
(c ) = (a) - (b)
Balance at: 6/30/2023 (VD) 54,644,157 $ 39,484,713 $ 15,159,444 $ Balance at: 6/30/2024 (MD) 57,426,841 42,552,608 14,874,233 Net changes during 2023-24 2,782,684 $ 3,067,895 $ (285,211) $ Valuation Date (VD), Measurement Date (MD)
Increase (Decrease)
The City’s proportion of the net pension liability was determined by CalPERS using the output from the Actuarial Valuation System and the fiduciary net position, as provided in the CalPERS Public Agency Cost-Sharing Allocation Methodology Report, which is a publicly available report that can be obtained at CalPERS’ website, at www.calpers.ca.gov.
The City’s proportionate share of the net pension liability for the total Plan as of the June 30, 2022 and 2023 measurement dates was as follows:
Miscellaneous Safety Total
Proportion - June 30, 2024 0.18178% 0.08120% 0.26298%
Proportion - June 30, 2025 0.18635% 0.08039% 0.26674%
Change - Increase/(Decrease) 0.00457% (0.00081%) 0.00376%
4.1.a
Packet Pg. 541 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-57-
Note 8: Defined benefit pension plan (continued)
C. Proportionate share of net pension liability (continued) Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate
The following presents the City’s proportionate share of the net pension liability of the Plan as of the measurement date, calculated using the discount rate of 6.9 percent, as well as what the net pension liability would be if it were calculated using a discount rate that is 1 percentage-point lower (5.9 percent) or 1 percentage-point higher (7.9 percent) than the current rate:
Miscellaneous
Plan's Net Pension Liability 14,188,904 $ 9,013,121 $ 4,752,689 $ Safety
Plan's Net Pension Liability 8,466,161 5,861,112 3,730,548 Total 22,655,065 $ 14,874,233 $ 8,483,237 $
Discount Rate - 1%
(5.90%)
Current Discount Rate
(6.90%)
Discount Rate + 1%
(7.90%)
Amortization of Deferred Outflows and Deferred Inflows of Resources Gains and losses related to changes in total pension liability and fiduciary net position are recognized in pension expense systematically over time.
The first amortized amounts are recognized in pension expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to pensions and are to be recognized in future pension expense.
The amortization period differs depending on the source of the gain or loss:
Net difference between
projected and actual earnings
on pension plan investments
5-year straight-line amortization
All other amounts Straight-line amortization over the expected average remaining service lives (EARSL) of all members that
are provided with benefits (active, inactive and
retired) as of the beginning of the measurement
period
4.1.a
Packet Pg. 542 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-58-
Note 8: Defined benefit pension plan (continued)
D. Pension expense and deferred outflows and deferred inflows of resources related to pensions
As of the start of the measurement period (July 1, 2023), the City’s net pension liability was $15,159,444. For the measurement period ending June 30, 2024 (the measurement date), the City incurred a pension expense of $2,708,717.
As of June 30, 2025, the City has deferred outflows and deferred inflows of resources related to pensions as follows:
Deferred Outflows Deferred Inflows
of Resources of Resources
Differences between expected and actual experience 1,257,586 $ 45,959 $ Changes of assumptions 376,062 -
Differences between projected and actual investment
earnings 802,174 -
Differences between employer's contributions and
proportionate share of contributions 150,285 175,091
Change in employer's proportion 43,322 330,866
Pension contributions subsequent to measurement date 2,073,086 - $ 551,916 4,702,515 $
The amounts above are net of outflows and inflows recognized in the 2023-24 measurement period expense. Contributions subsequent to the measurement date of $2,073,086 reported with deferred outflows of resources will be recognized as a reduction of the net pension liability in the upcoming fiscal year. Other amounts reported as deferred outflows and deferred inflows of resources related to pensions will be recognized in future pension expense as follows:
Fiscal Year
Ending June 30: Miscellaneous Safety Total
2026 466,213 $ 168,225 $ 634,438 $
2027 1,208,915 533,286 1,742,201
2028 47,397 (71,780) (24,383)
2029 (177,811) (96,932) (274,743)
2030 - - -
Thereafter - - -
E. Payable to the pension plan
At June 30, 2025, the City reported a payable of $0 for the outstanding amount of contributions to the pension plan required for the year then ended.
4.1.a
Packet Pg. 543 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-59-
IV. OTHER DISCLOSURES
Note 9: Risk management
The City adopted a self-insured workers’ compensation program which is administered by a service agent. The City is self-insured for the first $100,000 on each claim. Insurance coverage in excess of the self-insured amount is provided by Public Entity Risk Management Authority (PERMA) up to statutory limits for workers’ compensation.
Effective July 1, 2002, the City’s self-insured liability claim coverage will be $50,000 on each general liability claim against the City. The insurance coverage in excess of the self-insured amount is provided by PERMA up to a limit of $50,000,000.
Claims, expenditures and liabilities are reported when it is probable that a loss has occurred and the amount of that loss can be reasonably estimated. These losses include an estimate of claims that have been incurred but not reported. At June 30, 2025, the amount of these liabilities was $407,802.
This amount represents an estimate of $407,802 for reported claims through June 30, 2025.
These claims are recorded as claims payable in the Workers’ Compensation Fund and Liability Insurance Fund. This liability is the City’s best estimate based on available information. Changes in the reported liability are as follows:
Change in
Liability at Claim Liability at
Year Beginning of Year Payable End of Year
2022-2023 324,733 $ 103,762 $ 428,495 $
2023-2024 428,495 41,637 470,132
2024-2025 470,132 (62,330) 407,802
Effective July 1, 1986 the City became a member of PERMA, a public entity risk pool, currently operating as a common risk management and insurance program for 20 California cities and 10 Special District/Agencies. The City pays an annual premium to the pool for its excess general liability insurance coverage. The agreement for formation of PERMA provides that the pool will be self-sustaining through member premiums. The City continues to carry commercial companies for all other risks of loss, including property insurance, earthquake and flood, auto physical damage insurance and TULIP/special events insurance.
PERMA has published its own financial report for the year ended June 30, 2025, which can be obtained from their website, www.permarisk.gov.
4.1.a
Packet Pg. 544 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-60-
Note 10: Commitments and contingencies
a. Construction commitments
The City has entered into various commitments for construction and/or capital projects. As of June 30, 2025, the City had outstanding contracts commitments of $9,935,580. b. Grants
Amounts received or receivable from grant agencies are subject to audit and adjustment by grantor agencies, principally the federal government. Any disallowed claims, including amounts already collected, may constitute a liability of the applicable funds. The amount, if any, of expenditures which may be disallowed by the grantor cannot be determined at this time although the City expects such amounts, if any, to be immaterial. c. Other
The City is involved as a defendant in various legal proceedings. While it is not feasible to predict or determine the outcome in these cases, it is the opinion of the City that the outcome of the majority of these cases will have no material adverse effect on the financial position of the City.
Note 11: Fund balance reservations/designations
The City’s Government Fund balances are detailed below:
General LLPD#2
Community
Facilities
District 2003
City Capital
Projects
Non-Major
Governmental
Funds
Total
Governmental
Funds
Nonspendable:
Prepaids/Inventory 177,163 $ - $ - $ 22,643 $ - $ 199,806 $ Advances receivable 10,236,044 - - - 2,400 10,238,444
Land held for resale - - - - 303,807 303,807
Total nonspendable 10,413,207 - - 22,643 306,207 10,742,057 Restricted:
Land held for resale - - - - - -
Lighting and landscape - - - - - -
Advances receivable - - - - - -
Other government restrictions 76,126 12,331,292 - - 28,929,247 41,336,665 Total restricted 76,126 12,331,292 - - 28,929,247 41,336,665 Assigned: - - - - 1,548,485 1,548,485
Unassigned: 21,442,206 - (4,924,600) (22,643) (1,415,425) 15,079,538 Total fund balances 31,931,539 $ 12,331,292 $ (4,924,600) $ - $ 29,368,514 $ 68,706,745 $ The City has established a minimum fund balance policy for the General Fund Contingency Reserve. The City Council stipulates that the Contingency Reserve must be a minimum of 15 percent of the upcoming fiscal year's General Fund annual budgeted operating expenditures. At fiscal year-end the Reserve for Contingency balance was $6,069,130, 15 percent of fiscal year June 30, 2025 budgeted General Fund operating expenditures. This reserve has been reported as unassigned in the General Fund.
4.1.a
Packet Pg. 545 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-61-
Note 12: Dissolution of California Redevelopment Agencies On December 29, 2011, the California Supreme Court upheld Assembly Bill X1 26 (Bill) that provides for the dissolution of all redevelopment agencies in the State of California. Most cities in California had established a redevelopment agency that was included in the reporting entity of the City as a blended component unit (since the City council, in many cases, also served as the governing board for those agencies).
In accordance with the timeline set forth in the Bill (as modified by the California Supreme Court on December 29, 2011) all redevelopment agencies in the State of California were dissolved and ceased to operate as a legal entity as of February 1, 2012.
In accordance with the provisions of ABX 1 26 (Bill) and the California Supreme Court’s decision to uphold the Bill, the obligations of the former redevelopment agency became vested with the funds established for the successor agency upon the date of dissolution, February 1, 2012.
Former tax increment revenues pledged to fund the debts of the former redevelopment agency will be distributed to the Successor Agency subject to the reapportionment of such revenues as provided by the Bill.
The debt of the Successor Agency as of June 30, 2025 is as follows:
Balance at Balance at Due within
June 30, 2024 Additions Deletions June 30, 2025 one year Successor agency
Bonds payable:
2005 Tax Allocation Bonds 4,945,000 $ - $ (355,000) $ 4,590,000 $ 370,000 $ Total long-term liabilities 4,945,000 $ - $ (355,000) $ 4,590,000 $ 370,000 $ Future debt service requirements for the bonds payable are as follows:
Fiscal year Total
ending June 30, Principal Interest Payment
2026 370,000 $ 202,630 $ 572,630 $
2027 390,000 185,150 575,150
2028 405,000 166,865 571,865
2029 425,000 147,775 572,775
2030 445,000 127,765 572,765
2031-2035 2,555,000 304,565 2,859,565
Totals 4,590,000 $ 1,134,750 $ 5,724,750 $
2005 Tax Allocation Bonds
4.1.a
Packet Pg. 546 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
-62-
Note 13: Risks and uncertainties
Successor Agency
Deductions (expenses) incurred by the Successor Agency for the year ended June 30, 2025 (and subsequent years in which the Successor Agency is in operation) are subject to review by various State agencies and the County in which the Successor Agency resides. If any expenses incurred by the Successor Agency are disallowed by the State agencies or County, the City, acting as the Successor Agency could be liable for the repayment of the disallowed costs from either its own funds or by the State withholding remittances normally paid to the City. The amount, if any, of expenses that may be disallowed by the State agencies or County cannot be determined at this time, although the Successor Agency expects such amounts, if any, to be immaterial.
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4.1.a
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4.1.a
Packet Pg. 548 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) Required Supplementary Information
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4.1.a
Packet Pg. 550 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Required Supplementary Information
Budgetary Comparison Schedule - General Fund
For the Year Ended June 30, 2025
-63-
Actual Variance with
Original Final Amounts Final Budget
REVENUES
Taxes 19,365,502 $ 19,365,502 $ 19,539,378 $ 173,876 $
Licenses and permits 1,624,750 1,624,750 2,186,088 561,338 Fines and forfeitures 442,500 442,500 451,575 9,075
Development fees 150,000 150,000 507,317 357,317
Intergovernmental 12,913,456 13,004,956 8,586,666 (4,418,290) Charges for services 4,700,634 4,700,634 4,803,486 102,852 Investment earnings 645,000 645,000 2,376,853 1,731,853 Other/Overhead Allocations 6,209,489 6,209,489 5,370,245 (839,244) Total revenues 46,051,331 46,142,831 43,821,608 (2,321,223)
EXPENDITURES
Current:
General government 4,744,323 4,755,123 4,188,097 567,026 Public safety 22,802,000 22,802,000 21,277,200 1,524,800 Public works 3,933,518 3,933,518 4,459,059 (525,541)
Community development 8,263,663 8,263,663 8,376,300 (112,637) Culture and leisure 208,594 213,354 187,009 26,345
Capital outlay 279,644 1,027,359 900,590 126,769
Debt service:
Principal 137,605 137,605 137,605 -
Interest 91,521 91,521 91,521 -
Total expenditures 40,460,868 41,224,143 39,617,381 1,606,762 Excess (deficiency) of revenues
over (under) expenditures 5,590,463 4,918,688 4,204,227 (714,461)
OTHER FINANCING SOURCES (USES)
Lease acquisition - 536,354 536,354 -
Subscription acquisition - 119,861 119,861 -
Transfers in 794,392 794,392 532,774 (261,618)
Transfers out (8,795,517) (9,475,517) (3,019,945) 6,455,572 Total other financing sources (uses) (8,001,125) (8,024,910) (1,830,956) 6,193,954 Net change in fund balance (2,410,662) (3,106,222) 2,373,271 5,479,493 Fund balance, beginning of year 29,558,268 29,558,268 29,558,268 - Fund balance, end of year 27,147,606 $ 26,452,046 $ 31,931,539 $ 5,479,493 $ Budgeted Amounts
4.1.a
Packet Pg. 551 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Required Supplementary Information
Budgetary Comparison Schedule – LLPD#2
For the Year Ended June 30, 2025
-64-
Actual Variance with
Original Final Amounts Final Budget
REVENUES
Assessments 5,465,437 $ 5,465,437 $ 5,417,514 $ (47,923) $ Investment earnings 120,000 120,000 365,192 245,192
Total revenues 5,585,437 5,585,437 5,782,706 197,269
EXPENDITURES
Community development 3,934,979 3,934,979 2,885,519 1,049,460 Culture and leisure 2,623,319 2,623,319 1,923,680 699,639 Total expenditures 6,558,298 6,558,298 4,809,199 1,749,099 Excess (deficiency) of revenues
over (under) expenditures (972,861) (972,861) 973,507 1,946,368 Net change in fund balance (972,861) (972,861) 973,507 1,946,368 Fund balance (deficit), beginning of year 11,357,785 11,357,785 11,357,785 - Fund balance, end of year 10,384,924 $ 10,384,924 $ 12,331,292 $ 1,946,368 $ Budgeted Amounts
4.1.a
Packet Pg. 552 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Required Supplementary Information
Budgetary Comparison Schedule – Community Facilities District 2003 For the Year Ended June 30, 2025
-65-
Actual Variance with
Original Final Amounts Final Budget
REVENUES
Assessments 3,720,000 $ 3,720,000 $ 4,016,282 $ 296,282 $ Total revenues 3,720,000 3,720,000 4,016,282 296,282
EXPENDITURES
Current:
General government 30,500 30,500 32,235 (1,735)
Public safety 4,607,590 4,607,590 4,060,933 546,657
Capital outlay 70,000 70,000 - 70,000
Debt service:
Interest 100,000 100,000 197,579 (97,579)
Total expenditures 4,808,090 4,808,090 4,290,747 517,343 Excess (deficiency) of revenues
over (under) expenditures (1,088,090) (1,088,090) (274,465) 813,625
OTHER FINANCING SOURCES (USES)
Transfers in 219,493 219,493 128,317 (91,176)
Total other financing sources (uses) 219,493 219,493 128,317 (91,176) Net change in fund balance (868,597) (868,597) (146,148) 722,449 Fund balance (deficit), beginning of year (4,778,452) (4,778,452) (4,778,452) - Fund balance (deficit), end of year (5,647,049) $ (5,647,049) $ (4,924,600) $ 722,449 $ Budgeted Amounts
4.1.a
Packet Pg. 553 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Required Supplementary Information
Schedule of the City's Proportionate Share of the Plan's Net Pension Liability and Related Ratios as of the Measurement Date - Last 10 Years -66-
Measurement
Date
Employer's
Proportion of
the Collective
Net Pension
Liability1
Employer's
Proportionate
Share of the
Collective Net
Pension Liability
Employer's
Covered Payroll
Employer's
Proportionate
Share of the
Collective Net
Pension Liability
as a percentage
of the Employer's
Covered Payroll
Pension Plan's
Fiduciary Net
Position as a
percentage of
the Total
Pension Liability
Miscellaneous Plan
6/30/2015 0.19300% 5,294,972 $ 2,908,424 $ 182% 77.28%
6/30/2016 0.18182% 6,316,067 2,317,063 273% 73.03%
6/30/2017 0.17913% 7,061,261 2,804,241 252% 71.64%
6/30/2018 0.18044% 6,800,330 3,119,387 218% 72.71%
6/30/2019 0.17949% 7,187,759 3,810,207 189% 70.85%
6/30/2020 0.17953% 7,572,634 4,262,727 178% 69.88%
6/30/2021 0.22695% 4,309,406 4,603,445 94% 90.49%
6/30/2022 0.18181% 8,507,294 5,068,470 168% 78.19%
6/30/2023 0.18178% 9,089,619 5,995,012 152% 77.97%
6/30/2024 0.18635% 9,013,121 6,780,344 133% 79.91%
Safety Plan (Inactive)
6/30/2015 0.07447% 3,068,587 $ - $ - 74.99%
6/30/2016 0.07781% 4,030,026 - - 70.87%
6/30/2017 0.07720% 4,613,123 - - 70.93%
6/30/2018 0.07932% 4,654,165 - - 72.39%
6/30/2019 0.07983% 4,983,113 - - 73.25%
6/30/2020 0.08052% 5,364,670 - - 72.59%
6/30/2021 0.09711% 3,408,091 - - 86.61%
6/30/2022 0.08538% 5,867,117 - - 75.52%
6/30/2023 0.08120% 6,069,825 - - 74.87%
6/30/2024 0.08390% 5,861,112 - - 76.66%
1 Proportion of the collective net pension liability represents the plan's proportion of PERF C, which includes both the Miscellaneous and Safety Risk Pools excluding the 1959 Survivors Risk Pool.
4.1.a
Packet Pg. 554 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Required Supplementary Information
Schedule of Plan Contributions - Last 10 Years
-67-
Fiscal Year
Actuarially
Determined
Contribution
Contributions
in Relation to
the Actuarially
Determined
Contribution
Contribution
Deficiency
(Excess) Covered payroll
Contributions
as a
percentage
of covered
payroll
Miscellaneous Plan
6/30/2016 613,674 $ (613,674) $ - $ 2,317,063 $ 26.48%
6/30/2017 691,841 (691,841) - 2,804,241 24.67%
6/30/2018 738,923 (738,923) - 3,119,387 23.69%
6/30/2019 876,180 (876,180) - 3,810,207 23.00%
6/30/2020 1,012,917 (1,012,917) - 4,262,727 23.76%
6/30/2021 1,135,010 (1,135,010) - 4,603,445 24.66%
6/30/2022 1,260,063 (1,260,063) - 5,068,470 24.86%
6/30/2023 1,185,765 (1,185,765) - 5,995,012 19.78%
6/30/2024 1,271,431 (1,271,431) - 6,780,344 18.75%
6/30/2025 1,459,252 (1,459,252) - 7,195,140 20.28%
Safety Plan (Inactive)
6/30/2016 146,311 $ (146,311) $ - $ - $ 0.00%
6/30/2017 175,023 (175,023) - - 0.00%
6/30/2018 219,078 (219,078) - - 0.00%
6/30/2019 283,052 (283,052) - - 0.00%
6/30/2020 416,795 (416,795) - - 0.00%
6/30/2021 462,234 (462,234) - - 0.00%
6/30/2022 476,521 (476,521) - - 0.00%
6/30/2023 514,200 (514,200) - - 0.00%
6/30/2024 354,075 (354,075) - - 0.00%
6/30/2025 613,834 (613,834) - - 0.00%
Notes to Schedule:
Change in Assumptions: There were no assumption changes in 2023 or 2024. Effective with the June 30, 2021, valuation date (June 30, 2022, measurement date), the accounting discount rate was reduced from 7.15% to
6.90%. In determining the long-term expected rate of return, CalPERS took into account long-term market return expectations as well as the expected pension fund cash flows. In addition, demographic assumptions and the price inflation assumption were changed in accordance with the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. The accounting discount rate was 7.15% for measurement dates June 30, 2017, through June 30, 2021, and 7.65% for measurement dates June 30, 2015, through June 30, 2016.
Changes in Benefit Terms: There were no changes to benefit terms that applied to all members of the Public Agency Pool. However, individual employers in the Plan may have provided a benefit improvement to their employees such as Golden Handshakes, service purchases, and other prior service costs. Employers that have done so may need to report this information as a separate liability in their financial statement as CalPERS considers such amounts to be separately financed employer-specific liabilities. These employers should consult with their auditors. Additionally, the figures above do not include any liability impact that occurred after the June 30, 2023, valuation date, unless the liability impact is deemed to be material to the Public Agency Pool.
4.1.a
Packet Pg. 555 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) This page left intentionally blank
4.1.a
Packet Pg. 556 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) Non-Major Governmental Funds
4.1.a
Packet Pg. 557 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Combining Balance Sheet – Non-Major Governmental Funds
June 30, 2025
-68-
Gas Tax Measure A Traffic Safety
CFD #2003-2
Sewer Lift
Operations
ASSETS
Cash and investments - $ 839,692 $ - $ - $
Receivables, net:
Accounts - - - -
Interest - - - -
Taxes and assessments - - - -
Notes - - - -
Prepaids - - - -
Due from other governments 160,703 256,169 16,195 -
Due from other funds - - - -
Advances receivable - 3,677,180 - -
Land held for resale - - - -
Total assets 160,703 $ 4,773,041 $ 16,195 $ - $
LIABILITIES
Accounts payable - $ - $ 90,748 $ 372 $
Accrued payroll - - - -
Due to other governments - - - -
Due to other funds - - 81,033 -
Unearned revenue - - - -
Advances payable - - - -
Total liabilities - - 171,781 372
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - - - -
FUND BALANCES
Nonspendable - - - -
Restricted 160,703 4,773,041 - -
Assigned - - - -
Unassigned - - (155,586) (372)
Total fund balances (deficit) 160,703 4,773,041 (155,586) (372) Total liabilities, deferred inflows
of resources and fund balances 160,703 $ 4,773,041 $ 16,195 $ - $ Special Revenue Funds
4.1.a
Packet Pg. 558 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) Continued
-69-
LLPD #1
Park
Development
Parkway
Development CSA 152
State Asset
Seizure
$ 36,055 141,157 $ 19,387 $ 250 $ 122,668 $
- - - 237,548 -
- - - - -
- 10,212 - - -
- - - - -
- - - - -
- - - - -
- - - - -
- - - - -
- - - - -
$ 36,055 151,369 $ 19,387 $ 237,798 $ 122,668 $
$ - 151,369 $ - $ 868 $ - $
- - - - -
- - - - -
- - - 200,301 -
- - - - -
- - - - -
- 151,369 - 201,169 -
- - - 213,364 -
- - - - -
36,055 - 19,387 - 122,668
- - - - -
- - - (176,735) -
36,055 - 19,387 (176,735) 122,668
$ 36,055 151,369 $ 19,387 $ 237,798 $ 122,668 $
Special Revenue Funds
4.1.a
Packet Pg. 559 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Combining Balance Sheet – Non-Major Governmental Funds
June 30, 2025
-70-
Public Safety
Sales Tax
Air Quality
Improvement
AB3229
COPS
Program AB1600
ASSETS
Cash and investments - $ 119,751 $ - $ 527,115 $
Receivables, net:
Accounts - - - -
Interest - - - -
Taxes and assessments - - - -
Notes - - - -
Prepaids - - 2,400 -
Due from other governments 84,812 - - -
Due from other funds - - - -
Advances receivable - - - -
Land held for resale - - - -
Total assets 84,812 $ 119,751 $ 2,400 $ 527,115 $
LIABILITIES
Accounts payable - $ - $ - $ - $
Accrued payroll - - - -
Due to other governments - - - -
Due to other funds - - 144,261 -
Unearned revenue - - - -
Advances payable - - - -
Total liabilities - - 144,261 -
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - - - -
FUND BALANCES
Nonspendable - - 2,400 -
Restricted 84,812 119,751 - 527,115
Assigned - - - -
Unassigned - - (144,261) -
Total fund balances (deficit) 84,812 119,751 (141,861) 527,115 Total liabilities, deferred inflows
of resources and fund balances 84,812 $ 119,751 $ 2,400 $ 527,115 $ Special Revenue Funds
4.1.a
Packet Pg. 560 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) Continued
-71-
Special
District
Administration
Federal Asset
Seizure RMRA CDBG CFD 2018-1
$ 38,107 5,503 $ 1,338,287 $ 7,032 $ 7,343 $
- - - - -
- - - - -
- - - - 386
- - - - -
- - - - -
- - 258,676 - -
- - - - -
- - 777,427 - -
- - - - -
$ 38,107 5,503 $ 2,374,390 $ 7,032 $ 7,729 $
$ - 1,178 $ - $ - $ - $
- 8,236 - - -
- - - - -
- - - - -
- - - 7,032 -
- - - - -
- 9,414 - 7,032 -
- - - - -
- - - - -
38,107 - 2,374,390 - 7,729
- - - - -
- (3,911) - - -
38,107 (3,911) 2,374,390 - 7,729
$ 38,107 5,503 $ 2,374,390 $ 7,032 $ 7,729 $
Special Revenue Funds
4.1.a
Packet Pg. 561 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Combining Balance Sheet – Non-Major Governmental Funds
June 30, 2025
-72-
CFD 2017-1 CFD 2020-1
Development
Impact Fees
Successor
Housing
Authority
ASSETS
Cash and investments 164,973 $ 453,994 $ 7,585,385 $ 314,156 $ Receivables, net:
Accounts - - - -
Interest - - - 317,289
Taxes and assessments 894 4,417 - -
Notes - - - 2,965,155
Prepaids - - - -
Due from other governments - - - -
Due from other funds - - - -
Advances receivable - - 756,987 -
Land held for resale - - - 303,807
Total assets 165,867 $ 458,411 $ 8,342,372 $ 3,900,407 $
LIABILITIES
Accounts payable 54,885 $ 16,689 $ - $ 17 $
Accrued payroll - - - -
Due to other governments - - - -
Due to other funds - - - -
Unearned revenue - - - -
Advances payable - - - -
Total liabilities 54,885 16,689 - 17
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - - - 3,282,444
FUND BALANCES
Nonspendable - - - 303,807
Restricted 110,982 441,722 8,342,372 314,139
Assigned - - - -
Unassigned - - - -
Total fund balances (deficit) 110,982 441,722 8,342,372 617,946 Total liabilities, deferred inflows
of resources and fund balances 165,867 $ 458,411 $ 8,342,372 $ 3,900,407 $ Special Revenue Funds
4.1.a
Packet Pg. 562 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) Continued
-73-
Assessment
District 2003-
01 Total Special
Revenue
Funds
Underground
Utility
Flood
Control
Traffic
Signalization
$ 21,573,750 9,852,895 $ 1,382,924 $ - $ 165,561 $
237,548 - - - -
317,289 - - - -
28,641 12,732 - - -
2,965,155 - - - -
2,400 - - - -
776,555 - - - -
- - - - -
5,211,594 - - 1,590,647 -
303,807 - - - -
$ 31,416,739 9,865,627 $ 1,382,924 $ 1,590,647 $ 165,561 $ $ 316,126 - $ - $ - $ - $
8,236 - - - -
- - - - -
425,595 - - - -
7,032 - - - -
- - - - -
756,989 - - - -
3,495,808 - - - -
306,207 - - - -
27,338,600 9,865,627 - 1,590,647 -
- - 1,382,924 - 165,561
(480,865) - - - -
27,163,942 9,865,627 1,382,924 1,590,647 165,561
$ 31,416,739 9,865,627 $ 1,382,924 $ 1,590,647 $ 165,561 $ Special Revenue Funds Capital Projects Funds
4.1.a
Packet Pg. 563 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) This page left intentionally blank
4.1.a
Packet Pg. 564 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Combining Balance Sheet – Non-Major Governmental Funds
June 30, 2025 Concluded
-74-
Capital
Projects
Funds Debt Service
TUMF
Capital
Projects
Total Capital
Projects
Funds
Assessment
District 87-1
Debt Service
Total NonMajor
Governmental
Funds
ASSETS
Cash and investments - $ 1,548,485 $ 165,675 $ 23,287,910 $ Receivables, net:
Accounts - - - 237,548
Interest - - - 317,289
Taxes and assessments - - 1,084,259 1,112,900
Notes - - - 2,965,155
Prepaids - - - 2,400
Due from other governments 664,978 664,978 - 1,441,533
Due from other funds - - - -
Advances receivable - 1,590,647 - 6,802,241
Land held for resale - - - 303,807
Total assets 664,978 $ 3,804,110 $ 1,249,934 $ 36,470,783 $
LIABILITIES
Accounts payable - $ - $ - $ 316,126 $
Accrued payroll - - - 8,236
Due to other governments - - 144,128 144,128
Due to other funds 664,978 664,978 291,129 1,381,702
Unearned revenue - - - 7,032
Advances payable - - - -
Total liabilities 664,978 664,978 435,257 1,857,224
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue 664,978 664,978 1,084,259 5,245,045
FUND BALANCES
Nonspendable - - - 306,207
Restricted - 1,590,647 - 28,929,247
Assigned - 1,548,485 - 1,548,485
Unassigned (664,978) (664,978) (269,582) (1,415,425)
Total fund balances (deficit) (664,978) 2,474,154 (269,582) 29,368,514 Total liabilities, deferred inflows
of resources and fund balances 664,978 $ 3,804,110 $ 1,249,934 $ 36,470,783 $
4.1.a
Packet Pg. 565 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Combining Statement of Revenues, Expenditures and Changes in Fund Balances – Non-Major Funds
For the Year Ended June 30, 2025
-75-
Gas Tax Measure A
Traffic
Safety
CFD #2003-2
Sewer Lift
Operations
REVENUES
Taxes - $ - $ - $ - $
Assessments - - - 22,484
Fines and forfeitures - - 93,349 -
Development fees - - - -
Intergovernmental 1,513,293 1,478,592 - -
Investment earnings 1,034 133,318 - 111
Other/overhead allocations - - - -
Total revenues 1,514,327 1,611,910 93,349 22,595
EXPENDITURES
Current:
General government - - - -
Public safety - - 88,688 -
Public works 1,517,808 41,370 50,501 22,967
Community development - - - -
Culture and leisure - - - -
Capital outlay - - 45,251 -
Debt service:
Principal - - - -
Interest - - - -
Total expenditures 1,517,808 41,370 184,440 22,967
Excess (deficiency) of revenues
over (under) expenditures (3,481) 1,570,540 (91,091) (372)
OTHER FINANCING SOURCES (USES)
Transfers out - (493,505) - -
Total other financing sources (uses) - (493,505) - -
Net change in fund balances (3,481) 1,077,035 (91,091) (372) Fund balances (deficit), beginning of year 164,184 3,696,006 (64,495) - Fund balances (deficit), end of year 160,703 $ 4,773,041 $ (155,586) $ (372) $ Special Revenue Funds
4.1.a
Packet Pg. 566 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) Continued
-76-
LLPD #1
Park
Development
Parkway
Development CSA 152
State Asset
Seizure
$ - - $ - $ - $ - $
- 655,713 - - -
- - - 323,260 -
- - - - -
- - - 208,893 -
1,144 - 615 - 3,893
- 2,324 - - -
1,144 658,037 615 532,153 3,893
- 2,867 - - -
- - - - -
- - - 408,307 -
- - - - -
- 573,344 - - -
- 81,826 - - -
- - - - -
- - - - -
- 658,037 - 408,307 -
1,144 - 615 123,846 3,893
- - - (128,317) -
- - - (128,317) -
1,144 - 615 (4,471) 3,893
34,911 - 18,772 (172,264) 118,775
$ 36,055 - $ 19,387 $ (176,735) $ 122,668 $
Special Revenue Funds
4.1.a
Packet Pg. 567 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Combining Statement of Revenues, Expenditures and Changes in Fund Balances – Non-Major Funds
For the Year Ended June 30, 2025
-77-
Special Revenue Funds
Public Safety
Sales Tax
Air Quality
Improvement
AB3229
COPS
Program AB1600
REVENUES
Taxes 481,414 $ - $ - $ - $
Assessments - - - -
Fines and forfeitures - - - -
Development fees - - - -
Intergovernmental - 70,929 186,330 -
Investment earnings - 3,084 20 16,725
Other/overhead allocations - - - -
Total revenues 481,414 74,013 186,350 16,725
EXPENDITURES
Current:
General government - - - -
Public safety - - - -
Public works - 7,920 - -
Community development - 2,663 - -
Culture and leisure - - - -
Capital outlay - - 175,869 -
Debt service:
Principal - - - -
Interest - - - -
Total expenditures - 10,583 175,869 -
Excess (deficiency) of revenues
over (under) expenditures 481,414 63,430 10,481 16,725
OTHER FINANCING SOURCES (USES)
Transfers out (482,775) - - -
Total other financing sources (uses) (482,775) - - -
Net change in fund balances (1,361) 63,430 10,481 16,725 Fund balances (deficit), beginning of year 86,173 56,321 (152,342) 510,390 Fund balances (deficit), end of year 84,812 $ 119,751 $ (141,861) $ 527,115 $
4.1.a
Packet Pg. 568 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) Continued
-78-
Special
District
Administration
Federal Asset
Seizure RMRA CDBG CFD 2018-1
$ - - $ - $ - $ - $
- - - - 3,916
- - - - -
- 35,700 - - -
- - 1,467,908 697,244 -
1,209 - 64,144 - 206
- 290,275 - - -
1,209 325,975 1,532,052 697,244 4,122
- - - - -
- - - - -
- - - - -
- 378,241 - - 3,978
- - - - -
- - - - -
- - - - -
- - - - -
- 378,241 - - 3,978
1,209 (52,266) 1,532,052 697,244 144
- - (2,383,659) (667,173) -
- - (2,383,659) (667,173) -
1,209 (52,266) (851,607) 30,071 144
36,898 48,355 3,225,997 (30,071) 7,585
$ 38,107 (3,911) $ 2,374,390 $ - $ 7,729 $
Special Revenue Funds
4.1.a
Packet Pg. 569 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Combining Statement of Revenues, Expenditures and Changes in Fund Balances – Non-Major Funds
For the Year Ended June 30, 2025
-79-
CFD 2017-1 CFD 2020-1
Development
Impact Fees
Successor
Housing
Authority
REVENUES
Taxes - $ - $ - $ - $
Assessments 365,874 503,893 - -
Fines and forfeitures - - - -
Development fees - - 1,556,548 -
Intergovernmental - - - -
Investment earnings 2,409 5,963 248,206 91,861
Other/overhead allocations - - - -
Total revenues 368,283 509,856 1,804,754 91,861
EXPENDITURES
Current:
General government - - - 40,269
Public safety - - - -
Public works - - 4,678 -
Community development 413,290 129,945 - -
Culture and leisure - - 99,596 -
Capital outlay - - 3,990 -
Debt service:
Principal - - - -
Interest - - - -
Total expenditures 413,290 129,945 108,264 40,269
Excess (deficiency) of revenues
over (under) expenditures (45,007) 379,911 1,696,490 51,592
OTHER FINANCING SOURCES (USES)
Transfers out - - (262,352) -
Total other financing sources (uses) - - (262,352) -
Net change in fund balances (45,007) 379,911 1,434,138 51,592 Fund balances (deficit), beginning of year 155,989 61,811 6,908,234 566,354 Fund balances (deficit), end of year 110,982 $ 441,722 $ 8,342,372 $ 617,946 $ Special Revenue Funds
4.1.a
Packet Pg. 570 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) Continued
-80-
Special
Revenue
Funds
Assessment
District
2003-01
Total Special
Revenue
Funds
Underground
Utility Flood Control
Traffic
Signalization
$ 481,414 - $ - $ - $ - $
2,851,993 1,300,113 - - -
416,609 - - - -
1,592,248 - - 414,884 -
5,623,189 - - - -
866,377 292,435 43,880 57,537 5,253
292,599 - - - -
12,124,429 1,592,548 43,880 472,421 5,253
43,136 - - - -
88,688 - - - -
2,161,249 107,698 - 14,980 -
928,117 - - - -
672,940 - - - -
306,936 - - - -
- - - - -
- - - - -
4,201,066 107,698 - 14,980 -
7,923,363 1,484,850 43,880 457,441 5,253
(4,417,781) - - (514,653) -
(4,417,781) - - (514,653) -
3,505,582 1,484,850 43,880 (57,212) 5,253
23,658,360 8,380,777 1,339,044 1,647,859 160,308
$ 27,163,942 9,865,627 $ 1,382,924 $ 1,590,647 $ 165,561 $ Capital Projects Funds
4.1.a
Packet Pg. 571 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) City of San Jacinto
Combining Statement of Revenues, Expenditures and Changes in Fund Balances – Non-Major Funds
For the Year Ended June 30, 2025 Concluded
-81-
Capital
Projects
Funds Debt Service
TUMF Capital
Projects
Total Capital
Projects Funds
Assessment
District 87-1
Debt
Service
Total Non-Major
Governmental
Funds
REVENUES
Taxes $ - - $ - $ 481,414 $
Assessments - - - 2,851,993
Fines and forfeitures - - - 416,609
Development fees - 414,884 - 2,007,132
Intergovernmental - - - 5,623,189
Investment earnings - 106,670 5,273 978,320
Other/overhead allocations - - - 292,599
Total revenues - 521,554 5,273 12,651,256
EXPENDITURES
Current:
General government - - 960 44,096
Public safety - - - 88,688
Public works - 14,980 - 2,176,229
Community development - - - 928,117
Culture and leisure - - - 672,940
Capital outlay - - - 306,936
Debt service:
Principal - - - -
Interest - - - -
Total expenditures - 14,980 960 4,217,006
Excess (deficiency) of revenues
over (under) expenditures - 506,574 4,313 8,434,250
OTHER FINANCING SOURCES (USES)
Transfers out (388,266) (902,919) - (5,320,700)
Total other financing sources (uses) (388,266) (902,919) - (5,320,700) Net change in fund balances (388,266) (396,345) 4,313 3,113,550 Fund balances (deficit), beginning of year (276,712) 2,870,499 (273,895) 26,254,964 Fund balances (deficit), end of year (664,978) $ 2,474,154 $ (269,582) $ 29,368,514 $
4.1.a
Packet Pg. 572 Attachment: 2025 Financial Statements (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) Tel. 909-889-0871 | www.ramscpa.net | 735 E. Carnegie Dr. Suite 100, San Bernardino, CA 92408
CERTIFIED PUBLIC ACCOUNTANTS
-1-
April 14, 2026
To the Honorable City Council
City of San Jacinto, California
We have audited the financial statements of the City of San Jacinto (the entity) as of and for the year ended June 30, 2025, and have issued our report thereon dated April 14, 2026. Professional standards require that we advise you of the following matters relating to our audit.
Our Responsibility in Relation to the Financial Statement Audit As communicated in our engagement letter dated May 12, 2025, our responsibility, as described by professional standards, is to form and express opinions about whether the financial statements that have been prepared by management with your oversight are presented fairly, in all material respects, in accordance with accounting principles generally accepted in the United States of America. Our audit of the financial statements does not relieve you or management of your respective responsibilities.
Our responsibility, as prescribed by professional standards, is to plan and perform our audit to obtain reasonable, rather than absolute, assurance about whether the financial statements are free of material misstatement. An audit of financial statements includes consideration of the system of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control over financial reporting. Accordingly, as part of our audit, we considered the system of internal control of the entity solely for the purpose of determining our audit procedures and not to provide any assurance concerning such internal control.
We are also responsible for communicating significant matters related to the audit that are, in our professional judgment, relevant to your responsibilities in overseeing the financial reporting process.
However, we are not required to design procedures for the purpose of identifying other matters to communicate to you.
Planned Scope and Timing of the Audit
We conducted our audit consistent with the planned scope and timing we previously communicated to you.
Compliance with All Ethics Requirements Regarding Independence The engagement team, others in our firm, as appropriate, and our firm have complied with all relevant ethical requirements regarding independence.
We have evaluated whether certain nonattest services performed by our firm during the audit have created a significant threat to our independence in relation to the entity. We have identified a threat to our independence (preparation of the entity’s financial statements, creating a self-review threat) that if not reduced to an acceptable level, would impair our independence. In order to reduce the threat to an acceptable level, we have applied the following safeguard:
Prior to the issuance of the entity’s financial statements, another partner or manager, independent of the engagement, will review the financial statements.
4.1.b
Packet Pg. 573 Attachment: SAS 114 - San Jacinto (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) -2-
Significant Risks Identified
We have identified the possibility of the following significant risks:
Management's override of internal controls over financial reporting – Management override of internal controls is the intervention by management in handling financial information and making decisions contrary to internal control policy.
Revenue recognition – Revenue recognition is a generally accepted accounting principle that refers to the conditions under which an entity can recognize a transaction as revenue. Auditing standards indicate that recognizing revenue is a presumed fraud risk and usually classified as a significant risk in most audits.
These significant risks are presumptive in most audits and merit attention by the auditors due to the direct impact over financial reporting and internal control processes. Although identified as significant risks, we noted no matters of management override of controls or deviations from generally accepted accounting principles which caused us to modify our audit procedures or any related matters which are required to be communicated to those charged with governance due to these identified risks.
Qualitative Aspects of the Entity’s Significant Accounting Practices Significant Accounting Policies
Management has the responsibility to select and use appropriate accounting policies. A summary of the significant accounting policies adopted by the entity is included in Note 1 to the financial statements. The City adopted GASB Statement No. 101, Compensated Absence, and GASB Statement No. 102, Certain Risk Disclosures during 2025. No matters have come to our attention that would require us, under professional standards, to inform you about (1) the methods used to account for significant unusual transactions and (2) the effect of significant accounting policies in controversial or emerging areas for which there is a lack of authoritative guidance or consensus.
Significant Accounting Estimates and Related Disclosures Accounting estimates and related disclosures are an integral part of the financial statements prepared by management and are based on management’s current judgments. Those judgments are normally based on knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ markedly from management’s current judgments.
The most sensitive accounting estimates affecting the entity’s financial statements are:
Management’s estimate of the net pension liability and related deferred inflows and outflows of resources are based on actuarial reports by independent actuaries. We evaluated the key factors and assumptions used to develop the estimate in determining that it is reasonable in relation to the basic financial statements taken as a whole and in relation to the applicable opinion units.
Financial Statement Disclosures
Certain financial statement disclosures involve significant judgment and are particularly sensitive because of their significance to financial statement users.
The most sensitive disclosures affecting the entity’s financial statements relate to:
The disclosure of fair value of investments in the basic financial statements represents amounts susceptible to market fluctuations.
4.1.b
Packet Pg. 574 Attachment: SAS 114 - San Jacinto (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) -3-
The disclosure of capital assets (and related accumulated depreciation) in the basic financial statements is based on historical information which could differ from actual useful lives of each capitalized item.
The disclosure of net pension liability and related deferred inflows and outflows of resources in the basic financial statements is based on actuarial assumptions. Actual future liabilities and actuarial deferred inflows and outflows may vary from disclosed estimates.
The disclosure of claims payable in the basic financial statements is based on claims loss reports from third party claims management companies. Actual future liabilities may vary from disclosed estimates.
The disclosure of leases and subscription liabilities, right-to-use assets, and asset amortization in the basic financial statements is based on certain terms and assumptions in the agreements which could differ from actual amounts.
Significant Difficulties Encountered during the Audit
We encountered no significant difficulties in dealing with management relating to the performance of the audit.
Uncorrected and Corrected Misstatements
For purposes of this communication, professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that we believe are trivial, and communicate them to the appropriate level of management. Further, professional standards require us to also communicate the effect of uncorrected misstatements related to prior periods on the relevant classes of transactions, account balances or disclosures, and the financial statements as a whole and each applicable opinion unit. There were no uncorrected misstatements noted.
In addition, professional standards require us to communicate to you all material, corrected misstatements that were brought to the attention of management as a result of our audit procedures. None of the misstatements identified by us as a result of our audit procedures and corrected by management were material, either individually or in the aggregate, to the financial statements taken as a whole or applicable opinion unit.
Disagreements with Management
For purposes of this letter, professional standards define a disagreement with management as a matter, whether or not resolved to our satisfaction, concerning a financial accounting, reporting, or auditing matter, which could be significant to the entity’s financial statements or the auditor’s report. No such disagreements arose during the course of the audit.
Representations Requested from Management
We have requested certain written representations from management, which are included in the attached letter dated April 14, 2026.
Management’s Consultations with Other Accountants
In some cases, management may decide to consult with other accountants about auditing and accounting matters. Management informed us that, and to our knowledge, there were no consultations with other accountants regarding auditing and accounting matters.
4.1.b
Packet Pg. 575 Attachment: SAS 114 - San Jacinto (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) -4-
Other Significant Matters, Findings, or Issues
In the normal course of our professional association with the entity, we generally discuss a variety of matters, including the application of accounting principles and auditing standards, significant events or transactions that occurred during the year, operating and regulatory conditions affecting the entity, and operational plans and strategies that may affect the risks of material misstatement. None of the matters discussed resulted in a condition to our retention as the entity’s auditors.
Other Information Included in Annual Reports
Pursuant to professional standards, our responsibility as auditors for other information, whether financial or nonfinancial, included in the entity’s annual reports, does not extend beyond the information identified in the audit report, and we are not required to perform any procedures to corroborate such other information.
However, in accordance with such standards, we have:
Read the other information and considered whether a material inconsistency existed between the other the information and the basic financial statements, or the other information otherwise appears to be materially misstated. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon.
Our responsibility also includes communicating to you any information which we believe is a material misstatement of fact. Nothing came to our attention that caused us to believe that such information, or its manner of presentation, is materially inconsistent with the information, or manner of its presentation, appearing in the financial statements.
This report is intended solely for the information and use of the City Council and management of the entity and is not intended to be and should not be used by anyone other than these specified parties.
Very truly yours,
4.1.b
Packet Pg. 576 Attachment: SAS 114 - San Jacinto (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025)
4.1.b
Packet Pg. 577 Attachment: SAS 114 - San Jacinto (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025)
4.1.b
Packet Pg. 578 Attachment: SAS 114 - San Jacinto (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025)
4.1.b
Packet Pg. 579 Attachment: SAS 114 - San Jacinto (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025)
4.1.b
Packet Pg. 580 Attachment: SAS 114 - San Jacinto (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025)
4.1.b
Packet Pg. 581 Attachment: SAS 114 - San Jacinto (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025)
4.1.b
Packet Pg. 582 Attachment: SAS 114 - San Jacinto (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June 30, 2025) Tel. 909-889-0871 | www.ramscpa.net | 735 E. Carnegie Dr. Suite 100, San Bernardino, CA 92408
CERTIFIED PUBLIC ACCOUNTANTS
-1-
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON
COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL
STATEMENTS PERFORMED IN ACCORDANCE WITH
GOVERNMENT AUDITING STANDARDS
Independent Auditor’s Report
To the Honorable City Council
City of San Jacinto, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards), the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of San Jacinto (the entity), as of and for the year ended June 30, 2025, and the related notes to the financial statements, which collectively comprise the entity’s basic financial statements, and have issued our report thereon dated April 14, 2026.
Report on Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the entity’s internal control over financial reporting (internal control) as a basis for designing procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we do not express an opinion on the effectiveness of the entity’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses or significant deficiencies. However, material weaknesses or significant deficiencies may exist that were not identified.
4.1.c
Packet Pg. 583 Attachment: Report on Internal Control - San Jacinto (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June -2-
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the entity’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
San Bernardino, California
April 14, 2026
4.1.c
Packet Pg. 584 Attachment: Report on Internal Control - San Jacinto (Annual Financial Report, SAS 114 Report and GAS Report for the Fiscal Year Ended June May 5, 2026
TO: City Council
REQUESTED BY: Kimberly Ganimian, Finance Director
APPROVED BY: Robert A. Johnson, City Manager
SUBJECT: Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2) RECOMMENDATION:
Staff recommends that the City Council adopt Resolution No. 4119 approving the issuance of the City of San Jacinto Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2) 2026 Special Tax Refunding Bonds (the "Refunding Bonds").
DISCUSSION:
Property within Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2) (“CFD 2002-1”) was originally within the boundaries of the City’s Community Facilities District No. 2 (“CFD No. 2”). Subsequently, the City created CFD 2002-1 surrounding approximately 215 undeveloped acres which were removed from CFD No. 2.
In 2015, 39.2 acres were removed from CFD 2002-1 when they were sold to Eastern Municipal Water District. Development has since continued in CFD 2002-1 and it is now fully built-out and includes 890 single-family homes owned by individuals covering approximately 141 acres, subject to the special taxes levied in CFD 2002-1 (the “Special Taxes”).
The 2002 Special Tax Bonds issued by CFD 2002-1 were refunded with the 2016 Special Tax Refunding Bonds (“2016 Bonds”). Special Taxes levied within CFD 2002-1 are used to pay debt service on the 2016 Bonds.
Special Taxes have been levied on residential properties near the maximum tax rate since CFD 2002-1 was formed. Absent any change in circumstances, the Special Taxes will continue to be levied on residential properties at nearly 90% of the maximum tax rate. The City is now considering a proposed refunding of the 2016 Bonds in order to reduce the Special Taxes levied on homeowners in CFD 2002-1.
Refinancing the 2016 Bonds
There is currently an opportunity to refinance the outstanding 2016 Bonds to generate savings for property owners within CFD 2002-1. The proposed Refunding Bonds are estimated to have a par amount of approximately $8.2 million with a final maturity in 2034, or the same final maturity of the 2016 Bonds. In other words, there will be no extension of the financing term. The final interest rate structure will be determined if, and when, the Refunding Bonds are priced and sold.
4.2 Packet Pg. 585
Assuming City Council approves moving forward, the pricing date is estimated to be the week of May 11.
Based on current market conditions, net present value (NPV) savings is estimated at $551,000, or
4.8% of the par amount of the 2016 Bonds. To put estimated NPV percent savings into context, GFOA (Government Finance Officers Association) Best Practices frequently mentions a benchmark of 3% NPV savings to determine the appropriateness of a refinancing. Estimated annual cash flow savings over the life of the Refunding Bonds range from $352,000 in 2027 to $577,500 in 2034. Based on the 890 total parcels within CFD 2002-1, average annual savings per parcel from the reduction in debt service is estimated to range from $395 in 2027 to $649 in 2034. Estimated savings are net of all financing costs. The table below highlights detailed annual savings based on current interest rates.
Total Estimated Cash Flow Savings*
Fiscal
Year
2016 Bonds
Debt Service
Refunding Bonds
Debt Service
Estimated Cash
Flow Savings
2027 $1,526,500 $1,174,500 $352,000
2028 1,556,500 1,174,750 381,750
2029 1,587,500 1,173,000 414,500
2030 1,619,250 1,174,250 445,000
2031 1,651,500 1,173,250 478,250
2032 1,684,000 1,175,000 509,000
2033 1,721,500 1,174,250 547,250
2034 1,753,500 1,176,000 577,500
*All numbers are preliminary; subject to market conditions on the pricing date.
Issuance of Bonds
The City’s Municipal Advisor is recommending a negotiated sale of the Refunding Bonds with the underwriter. This recommendation is based on current market conditions as well as the credit quality of CFD 2002-1. A negotiated sale of the Refunding Bonds will give the investors time to complete analysis on the properties securing the Refunding Bonds. The recommended underwriter is Stifel, Nicolaus & Company, Incorporated, who is active in selling special tax bonds, such as the Refunding Bonds being considered by the City Council.
The attached resolution authorizes the sale of the Refunding Bonds in a principal amount not to exceed $11,455,000, at a true interest cost not to exceed 4.5%, and with a maximum underwriter’s compensation of 1.0% of the par amount of the Refunding Bonds. The resolution authorizes the City Manager, Deputy City Manager, the Finance Director, and the Mayor to award the sale of the Refunding Bonds within those parameters and take any additional actions required to issue the Refunding Bonds. The Refunding Bonds, however, will only be issued in the amount necessary to accomplish the refinancing, which may be less than the total authorized amount. The estimated close date of the Refunding Bonds is early June.
4.2 Packet Pg. 586
The resolution also approves and authorizes distribution of the Preliminary Official Statement (a draft is attached hereto), and approves the form of the Continuing Disclosure Certificate appended to the Preliminary Official Statement, as well as approves the form of a Fiscal Agent Agreement, the form of a Bond Purchase Agreement with Stifel, Nicolaus & Company, Incorporated and the form of an Escrow Agreement (all on file with the City Clerk). It also appoints Best Best & Krieger LLP to serve as Bond Counsel and Disclosure Counsel, Urban Futures, Incorporated to serve as municipal advisor and U.S. Bank Trust Company, National Association to act as Fiscal Agent for the Refunding Bonds.
The following descriptions describe the documents approved by the resolution:
• Fiscal Agent Agreement - This document contains the terms of the Refunding Bonds, including payment and redemption provisions, definition and pledge of Special Tax Revenues to pay the Refunding Bonds, rights and duties of the Fiscal Agent, remedies upon a default in the payment of the Refunding Bonds, and final discharge of the Refunding Bonds and other related matters.
• Escrow Deposit and Trust Agreement - This document contains terms by which the Fiscal Agent will hold funds on the behalf of the City and bond holders received from the refinancing to pay and discharge all of the indebtedness of the 2016 Bonds at or before maturity.
• Preliminary Official Statement - This is the City’s document pursuant to which the Refunding Bonds will be offered for purchase by the public. This document must contain all facts material to the Refunding Bonds, CFD 2002-1, and the City (with certain permitted exceptions to be completed in the final Official Statement) and must not omit any material facts that make the remainder misleading. • Bond Purchase Agreement - This document contains the obligation of the underwriter to accept and pay for the Refunding Bonds, provided that all of the covenants and representations of the City are met and certain other conditions excusing performance by the underwriter do not exist.
It is estimated that the cost to issue the Refunding Bonds is approximately $355,000. This includes fees of Bond Counsel, Disclosure Counsel, Municipal Advisor, Underwriter, NBS (the City’s Special Tax Consultant), and other issuance costs. The debt service estimates shown in the table above already take into account the cost to issue the Refunding Bonds.
FISCAL IMPACT:
None. The issuance of the Refunding Bonds is being undertaken for the benefit of the homeowners in CFD 2002-1 and has no fiscal impact on the City.
ATTACHMENTS:
4.2 Packet Pg. 587
Resolution No 4119
Fiscal Agent Agreement
Escrow Deposit and Trust Agreement
Preliminary Official Statement
Bond Purchase Agreement
4.2 Packet Pg. 588
Resolution No. 4119
1 STATE OF CALIFORNIA ) RESOLUTION NO. 4119
COUNTY OF RIVERSIDE ) ss
CITY OF SAN JACINTO )
A RESOLUTION OF THE CITY OF SAN JACINTO, CALIFORNIA,
AUTHORIZING THE ISSUANCE OF BONDS OF CITY OF SAN JACINTO COMMUNITY FACILITIES DISTRICT NO. 2002-1 (RANCHO SAN
JACINTO, PHASE 2) DESIGNATED 2026 SPECIAL TAX REFUNDING
BONDS FOR THE PURPOSE OF DEFEASING AND REFUNDING THE
OUTSTANDING BONDS OF SAID DISTRICT, APPOINTING FISCAL
AGENT, APPROVING THE FORM OF A FISCAL AGENT AGREEMENT
AND AN ESCROW DEPOSIT AND TRUST AGREEMENT AND
AUTHORIZING NEGOTIATION OF TERMS OF THE SALE OF SAID
BONDS, APPROVING A PRELIMINARY OFFICIAL STATEMENT,
AUTHORIZING PREPARATION OF A FINAL OFFICIAL STATEMENT
AND APPROVING OTHER RELATED DOCUMENTS AND ACTIONS
WHEREAS, bonds were previously issued for the City of San Jacinto Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2), County of Riverside, State of California (the “District”) which were designated as the City of San Jacinto Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2), 2016 Special Tax Refunding Bonds and are outstanding in the aggregate principal amount of $11,455,000 (the “Prior Special Tax Refunding Bonds”); and
WHEREAS, the City Council (the “City Council”) of the City of San Jacinto (the “City”) has been advised that it may be possible to issue bonds of the District for purpose of refunding the Prior Special Refunding Tax Bonds, at interest rates that will result in a net present value savings of 3% or more from the interest rates on the currently outstanding Prior Special Refunding Tax Bonds and to thereby provide savings to the property owners in the District through reduced special taxes that will be levied on parcels of taxable property in the District to pay the principal of and interest on the refunding bonds (the “Refunding Bonds”); and
WHEREAS, the Refunding Bonds of the District shall be designated “City of San Jacinto Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2) 2026 Special Tax Refunding Bonds;” and
WHEREAS, payment of the principal of and interest on the Prior Special Tax Refunding Bonds are secured by special taxes that are levied on parcels of taxable property in the District (the “Special Taxes”); and
WHEREAS, payment of the principal of and interest on the Refunding Bonds that may be issued by the District will be secured by such Special Taxes; and WHEREAS, pursuant to Section 53345.8 of the California Government Code, the City Council, as the legislative body of the District, may sell bonds of the District only if it determines prior to the award of the sale of such bonds that the value of the real property
4.2.a
Packet Pg. 589 Attachment: Resolution No 4119 (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) Resolution No. 4119
2 that would be subject to the Special Tax to pay debt service on the bonds will be at least three (3) times the principal amount of the bonds to be sold and the principal amount of all other bonds outstanding that are secured by a special tax levied pursuant to the MelloRoos Community Facilities Act of 1982 (Section 53311, et seq., of the California Government Code) or a special assessment levied on property within the District; and WHEREAS, NBS Government Finance Group, the special tax consultant to the City, has determined, based on a review of the Riverside County Assessor’s Assessment Roll for fiscal year 2025-26, that the total assessed value of taxable property in the District is $327,658,982 including all taxable property within the District; and WHEREAS, upon the issuance of the Refunding Bonds of the District and the deposit of the appropriate portion of the proceeds of the sale of such Refunding Bonds in the redemption fund, such outstanding Prior Special Tax Refunding Bonds will be defeased and the property in the District will no longer be subject to the levy of special taxes to pay debt service on such outstanding Prior Special Tax Refunding Bonds, but will instead be subject to the levy of special taxes to pay debt service on the Refunding Bonds; and
WHEREAS, if the Refunding Bonds of the District are issued and sold in an aggregate principal amount that does not exceed $11,455,000, the value of the parcels of real property within the District that will be subject to the levy of the Special Taxes will be more than three (3) times the principal amount of such Refunding Bonds and any other parity bonds of the District; and
WHEREAS, there has also been made available to the City Council a form of Fiscal Agent Agreement (the “Fiscal Agent Agreement”) to be executed and delivered by the City and U.S. Bank Trust Company, National Association, as Fiscal Agent, with respect to the Refunding Bonds that will be issued by the District, whereby the Fiscal Agent will authenticate and deliver such Refunding Bonds and perform certain other duties; and WHEREAS, there has also been made available to the City Council a form of escrow agreement (the “Escrow Agreement”) to be executed and delivered by the City with respect to the defeasance and redemption of the outstanding Prior Special Tax Refunding Bonds, whereby the escrow agent thereunder will receive a portion of the proceeds of the sale of the Refunding Bonds and certain funds related to the outstanding Prior Special Tax Refunding Bonds that will be deposited in the redemption fund to provide for the defeasance and redemption of the Prior Special Tax Refunding Bonds and will perform certain other duties; and
WHEREAS, there has been made available to the City Council a form of Bond Purchase Agreement whereby Stifel, Nicolaus & Company, Incorporated, as underwriter (the “Underwriter”) will purchase the Refunding Bonds from the District (the “Bond Purchase Agreement”); and
4.2.a
Packet Pg. 590 Attachment: Resolution No 4119 (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) Resolution No. 4119
3 WHEREAS, there has also been presented to the City Council a form of Preliminary Official Statement relating to the Refunding Bonds (the “Preliminary Official Statement”); and
WHEREAS, there has also been presented to the City Council a form of Continuing Disclosure Certificate appended to the Preliminary Official Statement to be executed and delivered by the City on behalf of the District and a dissemination agent to be appointed by the City (the “Continuing Disclosure Certificate”), for the benefit of the owners of the Refunding Bonds and in order to assist the Underwriter in complying with Rule 15c2- 12(b)(5) of the Securities and Exchange Commission (the “Rule”); and WHEREAS, the City Council has considered the forms of the Fiscal Agent Agreement, the Escrow Agreement, the Bond Purchase Agreement, the Continuing Disclosure Certificate and the Preliminary Official Statement and has determined that it is in the best interest of the owners of property in and the residents of the District, that the City Council authorize the issuance and sale of the Refunding Bonds and the execution and delivery of said agreements, subject to the conditions hereinafter contained; and WHEREAS, Section 5852.1 of the Government Code of the State of California (“Section 5852.1”) provides that the City Council obtain from an underwriter, financial advisor or private lender and disclose, in a meeting open to the public, prior to authorization of the issuance of the Bonds, good faith estimates of: (a) the true interest cost of the Bonds, (b) the finance charge of the Bonds, meaning the sum of all fees and charges paid to third parties, (c) the amount of proceeds of the Bonds received less the finance charge described above and any reserves or capitalized interest paid or funded with proceeds of the Bonds and (d) the sum total of all debt service payments on the Bonds calculated to the final maturity of the Bonds plus the fees and charges paid to third parties not paid with the proceeds of the Bonds; and
WHEREAS, in accordance with Section 5852.1, the City Council has obtained such good faith estimates from Urban Futures, Inc., the City’s municipal advisor (the “Municipal Advisor”), and such estimates are disclosed in Exhibit A attached hereto.
NOW, THEREFORE, BE IT RESOLVED, determined and ordered by the City Council of the City of San Jacinto, as follows:
SECTION 1. Findings. The City Council finds (a) that the preceding recitals are true and correct, (b) that the sale of the Refunding Bonds of the District at negotiated sale, without advertising for bids, will result in a lower overall cost to the District, and (c) that if the Refunding Bonds of the District are issued and sold in an aggregate principal amount not to exceed $11,455,000, the aggregate value of the parcels of real property within the District that will be subject to the levy of the Special Taxes to pay the principal of and interest on the Refunding Bonds of the District will be more than three (3) times the aggregate principal amount of such Refunding Bonds.
In furtherance of the issuance of the Refunding Bonds, the City Council hereby makes the following further findings and determinations that: (i) it is prudent in the
4.2.a
Packet Pg. 591 Attachment: Resolution No 4119 (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) Resolution No. 4119
4 management of the fiscal affairs of the City, the City Council and the District to issue the Refunding Bonds for the purpose, inter alia, of refunding the Prior Special Tax Refunding Bonds on an advance basis or a current basis, (ii) the total net interest cost to maturity on the Refunding Bonds being issued to refund the Prior Special Tax Refunding Bonds plus the principal amount of the Refunding Bonds being issued to refund the Prior Special Tax Refunding Bonds will not exceed the total net interest cost to maturity on the Prior Special Tax Refunding Bonds plus the principal amount of the Prior Special Tax Refunding Bonds, and (iii) the issuance of the Refunding Bonds is in compliance with the City’s Goals and Policies.
SECTION 2. Authorization of the Issuance of the Refunding Bonds. The City Council authorizes the issuance and sale of the Refunding Bonds of the District in an aggregate principal amount that shall not exceed the aggregate principal amount of $11,455,000, and the Mayor, the City Manager, the Deputy City Manager and the Finance Director (each an “Authorized Representatives”) are authorized and directed to take all steps and actions which are necessary to accomplish the issuance, sale and delivery of the Refunding Bonds pursuant to the authorization given by and the conditions specified in this resolution. The Mayor and the City Clerk of the City Council, or any Authorized Representative if such persons are not available, are authorized to execute the Refunding Bonds for and on behalf of the City and the District by their manual or facsimile signatures.
The last maturity date of the Refunding Bonds of the District shall not be later than the last maturity date of the Prior Special Tax Refunding Bonds.
Pursuant to Section 53363.8 of the California Government Code, the City Council determines that the Designated Costs of Issuing the Refunding Bonds for the District shall include (i) all expenses incident to the calling, retiring, or paying of the Prior Special Tax Refunding Bonds, and incident to the issuance of the Refunding Bonds of the District, including the charges of any agent in connection with the issuance of the Refunding Bonds or in connection with the redemption or retirement of the Prior Special Tax Refunding Bonds, (ii) the interest on the outstanding bonds of the District to the date upon which each of such outstanding bonds will be paid pursuant to the fiscal agent agreement authorizing the issuance of such outstanding bonds, and (iii) any premium necessary in calling or retiring the Prior Special Tax Refunding Bonds.
SECTION 3. Approval of Fiscal Agent Agreement. The form of the Fiscal Agent Agreement which provides generally for (i) the authentication and delivery by the Fiscal Agent of the Refunding Bonds of the District, (ii) the establishment and administration by the Fiscal Agent of certain funds and accounts for the benefit of the City and the owners of the Refunding Bonds, (iii) the payment by the Fiscal Agent of the principal of and interest on the Refunding Bonds from the Special Tax Revenues (as defined therein), and (iv) the performance of other duties by the Fiscal Agent, is approved in the form on file with the City Clerk, and the Authorized Representatives are each individually authorized to execute and deliver, on behalf of the City, the Fiscal Agent Agreement with respect to the Refunding Bonds of the District.
SECTION 4. Approval of Escrow Agreement. The form of the Escrow Agreement which provides for (i) the defeasance and redemption of the Prior Special Tax Refunding
4.2.a
Packet Pg. 592 Attachment: Resolution No 4119 (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) Resolution No. 4119
5 Bonds, (ii) the creation and administration by the Escrow Agent of the Escrow Fund for the benefit of the owners of Prior Special Tax Refunding Bonds, and (iii) the performance of other duties by the Escrow Agent, is approved in the form on file with the City Clerk, and the Authorized Representatives are each individually authorized to execute and deliver, on behalf of the City, such Escrow Agreement with respect to the Prior Special Tax Refunding Bonds.
Notwithstanding the preceding provisions of this section, as required by Section 53363.9 of the California Government Code, the amount of the proceeds of the sale of the Refunding Bonds of the District and other amounts to be deposited in the Redemption Fund with respect to the Prior Special Tax Refunding Bonds, and earnings from the investment thereof, shall be in an amount sufficient to pay the principal of and interest on the Prior Special Tax Refunding Bonds on September 1, 2026, and to pay the principal and redemption premium due on such outstanding bonds on such date or such earlier date as may be negotiated with the owners of the Bonds, and the Designated Costs of Issuing the Refunding Bonds.
SECTION 5. Approval of Preliminary Official Statement; Preparation of Final Official Statement. The Preliminary Official Statement is approved, and each of the Authorized Representatives is authorized to consent to and assist in the preparation of such modifications thereto as may be specified by the City Manager, the Deputy City Manager or Finance Director of the City. Each of the Authorized Representatives is authorized to determine when the Preliminary Official Statement is to be deemed final within the meaning of the Rule and to deliver a certificate to that effect to the Underwriter.
The Underwriter is authorized to distribute the Preliminary Official Statement as approved hereby, or as modified with the consent of one of the Authorized Representatives, to prospective purchasers of the Bonds. The Authorized Representatives are authorized to participate in the preparation of the Final Official Statement, based on the Preliminary Official Statement, and such modifications thereto as may be agreed to by Disclosure Counsel and the Underwriter. An Authorized Representative is authorized to sign the Final Official Statement on behalf of the City and the District.
SECTION 6. Purchase and Sale of Bonds. The City Council approves and authorizes the issuance and sale of the Bonds by negotiation with the Underwriter and the City pursuant to the Bond Purchase Agreement between the City and the Underwriter in the form on file with the City Clerk, together with any changes therein or additions thereto which are deemed advisable by the City Manager, Deputy City Manager or the Finance Director, upon consultation with Bond Counsel. An Authorized Representative is authorized and directed to execute and deliver the final form of the Bond Purchase Agreement on behalf of the City and the District upon the submission of an offer by the Underwriter to purchase the Bonds, which offer is acceptable to the City Manager or the Finance Director and is consistent with the requirements of this resolution; provided that the true interest cost shall not exceed 4.50%; the Underwriter’s discount for the purchase of the Bonds shall exceed 1.0% of the aggregate principal amount of the Bonds; and the last maturity date of the Bonds shall not be later than the last maturity date of the Prior Special Tax Refunding Bonds. When the City Manager, Deputy City Manager or the Finance Director has negotiated the Bond Purchase Agreement with the Underwriter
4.2.a
Packet Pg. 593 Attachment: Resolution No 4119 (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) Resolution No. 4119
6 within the parameters specified above and when the other terms and conditions are satisfactory to the City Manager, Deputy City Manager or the Finance Director and Bond Counsel, an Authorized Representative is authorized to execute and deliver the Bond Purchase Agreement to the Underwriter on behalf of the City and the District.
No Authorized Representative shall execute and deliver the Bond Purchase Agreement, however, unless the total net interest cost to maturity of the Refunding Bonds plus the principal amount of the Refunding Bonds will be less than the total net interest cost to maturity with respect to the Prior Special Tax Refunding Bonds, plus the principal amounts of the Prior Special Tax Refunding Bonds, and before executing and delivering the Bond Purchase Agreement, the Authorized Representative shall receive verbal verification from Urban Futures, Incorporated, as the Municipal Advisor to the City and the District, that such a total net interest cost and principal amount with respect to the Refunding Bonds will be achieved.
SECTION 7. Municipal Bond Insurance and Surety Bonds. The Authorized Representatives, each acting alone, are hereby authorized and directed to take all actions necessary to obtain a municipal bond insurance policy for the Refunding Bonds and reserve account surety bonds for the Refunding Bonds from a municipal bond insurance company if it is determined, upon consultation with the Municipal Advisor and the Underwriter, that such municipal bond insurance policy and/or surety bonds will reduce the true interest cost or increase cash flow savings with respect to the Refunding Bonds.
SECTION 8. Appointment of Professionals. The City Council hereby authorizes and approves the following professionals to provide services in connection with the issuance of the Bonds:
(a) Fiscal Agent. U.S. Bank Trust Company, National Association is appointed as Fiscal Agent pursuant to the Fiscal Agent Agreement and as Escrow Agent pursuant to the Escrow Agreement to take any and all action provided therein to be taken by the Fiscal Agent and Escrow Agent; (b) Underwriter. Stifel, Nicolaus & Company, Incorporated is hereby appointed to serve as the Underwriter;
(c) Municipal Advisor. Urban Futures, Incorporated is hereby appointed to provide municipal advisory services;
(d) Bond Counsel. Best Best & Krieger LLP is hereby appointed as bond counsel in connection with the issuance of the Refunding Bonds; and (e) Disclosure Counsel. Best Best & Krieger LLP is hereby appointed as disclosure counsel in connection with the issuance of the Refunding Bonds.
SECTION 9. Reserve Fund and Other Funds Related to the Outstanding Bonds.
The Authorized Representatives are each authorized to direct the fiscal agent for the outstanding bonds of the District, and said Fiscal Agent is authorized, to transfer the amount on deposit in the reserve fund and amounts on deposit in any other funds or
4.2.a
Packet Pg. 594 Attachment: Resolution No 4119 (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) Resolution No. 4119
7 accounts, which the Fiscal Agent holds under the Fiscal Agent Agreement with respect to the Prior Special Tax Refunding Bonds, to the Fiscal Agent for deposit in the Redemption Fund to be used to defease and redeem the Prior Special Tax Refunding Bonds or to the Reserve Fund for the Refunding Bonds of the District, whichever the Authorized Representatives determine is most appropriate.
SECTION 10. Notice of Redemption. The Authorized Representatives are each authorized and directed to provide for the mailing and publication, and the Fiscal Agent, in its capacity as fiscal agent for the Prior Special Tax Refunding Bonds, is authorized to mail and publish, notice of the redemption of the outstanding bonds of the District to the registered owners thereof as required by Section 53365 of the California Government Code and the fiscal agent agreement for the Prior Special Tax Refunding Bonds.
SECTION 11. Further Action. The Authorized Representatives are authorized to take any and all action with respect to the execution and delivery of the Fiscal Agent Agreement, the Escrow Agreement, the Bond Purchase Agreement and the issuance, sale and delivery of the Refunding Bonds, which in the opinion of Bond Counsel is necessary in order for the authorization and direction provided in this resolution to be carried out.
SECTION 12. Conditions of Approval. The approvals, authorization and direction given by this resolution are conditioned upon the satisfaction of the requirements of Section 6 hereof with respect to the issuance and sale of the Refunding Bonds. The officers of the City designated above shall not take any action with respect to the execution and delivery of the Fiscal Agent Agreement, the Escrow Agreement and the Bond Purchase Agreement or the issuance, sale and delivery of the Refunding Bonds unless and until such conditions are satisfied; provided, however, that upon satisfaction of such conditions, this resolution shall be fully effective and shall be carried out by such officers without further approval or action of the City Council. The approvals, authorization and direction provided by this resolution shall continue, subject to the satisfaction of such conditions, until [December 31], 20[26], and the Refunding Bonds may be sold, and the Refunding Bonds, the Fiscal Agent Agreement, the Escrow Agreement and the Bond Purchase Agreement may be dated, entered into, executed and delivered or distributed, as appropriate, on any date selected by the Authorized Representatives and the Purchaser prior to said date.
SECTION 13. Effect. This resolution shall take effect immediately upon its passage.
PASSED, APPROVED, and ADOPTED at a regular meeting of the City Council on this 5
th day of May, 2026 by the following vote:
AYES:
NAYS:
ABSENT:
ABSTAIN:
4.2.a
Packet Pg. 595 Attachment: Resolution No 4119 (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) Resolution No. 4119
8 CITY OF SAN JACINTO
________________________________
Crystal Ruiz, Mayor
ATTEST:
Jill Theriot, Deputy City Clerk
APPROVED AS TO FORM:
BEST BEST & KRIEGER LLP
_____________________________________
Craig Hayes, City Attorney
4.2.a
Packet Pg. 596 Attachment: Resolution No 4119 (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) Resolution No. 4119
9 STATE OF CALIFORNIA)
COUNTY OF RIVERSIDE) ss
CITY OF SAN JACINTO)
CERTIFICATION
I, Jill Theriot, duly appointed Deputy City Clerk of the City of San Jacinto, do hereby certify that the foregoing Resolution No. 4119 was duly passed, approved, and adopted at a regular meeting of the City Council of the City of San Jacinto on the 5 th day of May
2026, by the following vote:
AYES:
NAYS:
ABSENT:
ABSTAIN:
WITNESS MY HAND AND OFFICIAL SEAL this 5
th day of May, 2026.
_________________________
Jill Theriot, Deputy City Clerk
City of San Jacinto
4.2.a
Packet Pg. 597 Attachment: Resolution No 4119 (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) Resolution No. 4119
10 EXHIBIT A
GOOD FAITH ESTIMATES
The good faith estimates set forth herein are provided with respect to the Refunding Bonds in accordance with California Government Code Section 5852.1. Such good faith estimates have been provided to the District by the Municipal Advisor in consultation with the Underwriter.
Principal Amount. The Municipal Advisor has informed the District that, based on the financing plan and current market conditions, it’s good faith estimate of the aggregate principal amount of the Refunding Bonds to be sold is $8,255,000 (the “Estimated Principal Amount”), which excludes approximately $684,538 of net premium estimated to be generated based on current market conditions. Net premium is generated when, on a net aggregate basis for a single issuance of bonds, the price paid for such bonds is higher than the face value of the bonds.
True Interest Cost of the Refunding Bonds. The Municipal Advisor has informed the District that, assuming that the Estimated Principal Amount of the Refunding Bonds is sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the true interest cost of the Refunding 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 Refunding Bonds, is
3.36%.
Finance Charge of the Refunding Bonds. The Municipal Advisor has informed the District that, assuming that the Estimated Principal Amount of the Refunding Bonds is sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the finance charge for the Refunding Bonds, which means the sum of all fees and charges paid to third parties (or costs associated with the Refunding Bonds), is $355,012.
Amount of Proceeds to be Received. The Municipal Advisor has informed the District that, assuming that the Estimated Principal Amount of the Refunding Bonds is sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the amount of proceeds expected to be received by the District, on behalf of the City, for the sale of the Refunding Bonds, less the finance charge of the Refunding Bonds, as estimated above, and any reserves or capitalized interest paid or funded with proceeds of the Refunding Bonds, is $8,584,364.
Total Payment Amount. The Municipal Advisor has informed the District that, assuming that the Estimated Principal Amount of the Refunding Bonds is sold, and based on market interest rates prevailing at the time of preparation of such estimate, its 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 Refunding Bonds, plus the finance charge for the Refunding Bonds, as described above, not paid with the proceeds of the Refunding
4.2.a
Packet Pg. 598 Attachment: Resolution No 4119 (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) Resolution No. 4119
11 Bonds, calculated to the final maturity of the Refunding Bonds, is $10,160,894 (excluding any offsets from reserves or capitalized interest).
The foregoing estimates constitute good faith estimates only. The actual principal amount of the Refunding Bonds issued and sold, 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 sale of the Refunding Bonds being different than the date assumed for purposes of such estimates, (b) the actual principal amount of Refunding Bonds sold being different from the Estimated Principal Amount, (c) the actual amortization of the Refunding Bonds being different than the amortization assumed for purposes of such estimates, (d) the actual market interest rates at the time of sale of the Refunding Bonds being different than those estimated for purposes of such estimates, (e) other market conditions, or (f) alterations in the financing plan or finance charges, or a combination of such factors. The actual date of sale of the Refunding Bonds and the actual principal amount of Refunding Bonds sold will be determined by the District, on behalf of the City, based on the timing of the need for proceeds of the Refunding Bonds and other factors. The actual interest rates borne by the Refunding Bonds will depend on market interest rates at the time of sale thereof. The actual amortization of the Refunding Bonds will also depend, in part, on market interest rates at the time of sale thereof. Market interest rates are affected by economic and other factors beyond the control of the District.
4.2.a
Packet Pg. 599 Attachment: Resolution No 4119 (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2))
FISCAL AGENT AGREEMENT
by and between
CITY OF SAN JACINTO
and
U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION
as Fiscal Agent
Dated as of [June] 1, 2026
Relating to
City of San Jacinto
Community Facilities District No. 2002-1
(Rancho San Jacinto, Phase 2)
County of Riverside
State of California
$[_________]
2026 Special Tax Refunding Bonds
4.2.b
Packet Pg. 600 Attachment: Fiscal Agent Agreement (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2))
TABLE OF CONTENTS
Page
-iARTICLE I
AUTHORITY AND DEFINITIONS
Section 1.01. Authority for this Agreement........................................................................... 2 Section 1.02. Agreement for Benefit of Bondowners............................................................ 2 Section 1.03. Definitions........................................................................................................ 2
ARTICLE II
THE BONDS
Section 2.01. Principal Amount; Designation...................................................................... 14 Section 2.02. Terms of Bonds.............................................................................................. 14 Section 2.03. Redemption.................................................................................................... 15 Section 2.04. Form of Bonds ............................................................................................... 17 Section 2.05. Execution of Bonds........................................................................................ 17 Section 2.06. Transfer of Bonds .......................................................................................... 17 Section 2.07. Exchange of Bonds........................................................................................ 18 Section 2.08. Bond Register................................................................................................. 18 Section 2.09. Temporary Bonds........................................................................................... 18 Section 2.10. Bonds Mutilated, Lost, Destroyed or Stolen.................................................. 19 Section 2.11. Special Obligation.......................................................................................... 19 Section 2.12. Parity Bonds and Subordinate Bonds ............................................................ 19 Section 2.13. Book-Entry..................................................................................................... 19
ARTICLE III
ISSUANCE OF BONDS; APPLICATION OF PROCEEDS; SPECIAL TAX FUND; ADMINISTRATIVE EXPENSE FUND; COSTS OF ISSUANCE FUND
Section 3.01. Issuance and Delivery of Bonds .................................................................... 21 Section 3.02. Application of Proceeds of Sale of Bonds and Funds Transferred from the Prior Funds and Accounts........................................................................ 21 Section 3.03. Special Tax Fund. .......................................................................................... 22 Section 3.04. Administrative Expense Fund........................................................................ 24 Section 3.05. Costs of Issuance Fund. ................................................................................. 25
ARTICLE IV
SPECIAL TAX REVENUES; BOND FUND; RESERVE FUND
Section 4.01. Pledge of Special Tax Revenues.................................................................... 25 Section 4.02. Bond Fund...................................................................................................... 26 Section 4.03. Reserve Fund. ................................................................................................ 28
ARTICLE V
OTHER COVENANTS OF THE CITY
Section 5.01. Punctual Payment........................................................................................... 30 Section 5.02. Special Obligation.......................................................................................... 30
4.2.b
Packet Pg. 601 Attachment: Fiscal Agent Agreement (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2))
TABLE OF CONTENTS
(continued)
Page
-iiSection 5.03. Extension of Time for Payment ..................................................................... 30 Section 5.04. Against Encumbrances................................................................................... 31 Section 5.05. Books and Accounts ...................................................................................... 31 Section 5.06. Protection of Security and Rights of Owners ................................................ 31 Section 5.07. Collection of Special Tax Revenues.............................................................. 31 Section 5.08. Reduction of Maximum Special Tax Rates................................................... 32 Section 5.09. Further Assurances......................................................................................... 32 Section 5.10. Tax Covenants ............................................................................................... 33 Section 5.11. Covenant to Foreclose.................................................................................... 33 Section 5.12. Prepayment of Special Taxes......................................................................... 33 Section 5.13. Calculation of Prepayments........................................................................... 34 Section 5.14. Continuing Disclosure ................................................................................... 34 Section 5.15. Accountability Measures ............................................................................... 34
ARTICLE VI
INVESTMENTS; DISPOSITION OF INVESTMENT PROCEEDS; LIABILITY OF THE
SERVICES DISTRICT
Section 6.01. Deposit and Investment of Moneys in Funds ................................................ 34 Section 6.02. Rebate Fund; Rebate to the United States...................................................... 35 Section 6.03. Liability of the City........................................................................................ 36 Section 6.04. Employment of Agents by City ..................................................................... 37
ARTICLE VII
RESERVE POLICY
Section 7.01. Provisions related to the Reserve Policy........................................................ 37
ARTICLE VIII
THE FISCAL AGENT
Section 8.01. Appointment of Fiscal Agent......................................................................... 40 Section 8.02. Liability of Fiscal Agent ................................................................................ 41 Section 8.03. Information .................................................................................................... 43 Section 8.04. Notice to Fiscal Agent ................................................................................... 43 Section 8.05. Compensation, Indemnification..................................................................... 43 Section 8.06. Books and Accounts ...................................................................................... 44
ARTICLE IX
MODIFICATION OR AMENDMENT OF THIS AGREEMENT
Section 9.01. Amendments Permitted.................................................................................. 44 Section 9.02. Owners’ Meetings.......................................................................................... 45 Section 9.03. Procedure for Amendment with Written Consent of Owners........................ 45 Section 9.04. Disqualified Bonds......................................................................................... 46 Section 9.05. Effect of Supplemental Agreement................................................................ 46 Section 9.06. Endorsement or Replacement of Bonds Issued After Amendments.............. 46
4.2.b
Packet Pg. 602 Attachment: Fiscal Agent Agreement (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2))
TABLE OF CONTENTS
(continued)
Page
-iiiSection 9.07. Amendatory Endorsement of Bonds.............................................................. 46
ARTICLE X
EVENTS OF DEFAULT AND REMEDIES
Section 10.01. Events of Default ........................................................................................... 47 Section 10.02. Remedies of Owners...................................................................................... 47 Section 10.03. Application of Special Taxes and Other Funds After Default....................... 47 Section 10.04. Restoration of Positions................................................................................. 48 Section 10.05. Rights and Remedies Cumulative.................................................................. 48 Section 10.06. Delay or Omission Not Waiver...................................................................... 48
ARTICLE XI
MISCELLANEOUS
Section 11.01. Benefits of Agreement Limited to Parties ..................................................... 48 Section 11.02. Successor is Deemed Included in All References to Predecessor ................. 49 Section 11.03. Discharge of Agreement. ............................................................................... 49 Section 11.04. Execution of Documents and Proof of Ownership by Owners...................... 50 Section 11.05. Waiver of Personal Liability.......................................................................... 50 Section 11.06. Notices to and Demands on City and Fiscal Agent ....................................... 50 Section 11.07. Partial Invalidity............................................................................................. 51 Section 11.08. Unclaimed Moneys........................................................................................ 51 Section 11.09. Applicable Law.............................................................................................. 51 Section 11.10. Conflict with Act............................................................................................ 51 Section 11.11. Conclusive Evidence of Regularity ............................................................... 51 Section 11.12. Payment on Business Day.............................................................................. 51 Section 11.13. Counterparts................................................................................................... 51 Section 11.14. Destruction of Bonds ..................................................................................... 52 EXHIBIT A – FORM OF BOND..............................................................................................A-1
4.2.b
Packet Pg. 603 Attachment: Fiscal Agent Agreement (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) 1 FISCAL AGENT AGREEMENT
THIS FISCAL AGENT AGREEMENT (the “Agreement”) is entered into and dated as of [June] 1, 2026, by and between City of San Jacinto, a municipal corporation (the “City”), for and on behalf of City of San Jacinto Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2) of the City of San Jacinto, County of Riverside, State of California (the “District”), and U.S. Bank Trust Company, National Association, a national banking association, duly organized and existing under the laws of the United States of America, as fiscal agent (the “Fiscal Agent”).
W I T N E S S E T H:
WHEREAS, the City Council of the City (the “City Council”) has established the District pursuant to the provisions of the Mello-Roos Community Facilities Act of 1982, as amended, Chapter 2.5 (commencing with Section 53311) of Part 1 of Division 2 of Title 5 of the California Government Code (the “Act”); and
WHEREAS, bonds of the District designated “Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2) 2016 Special Tax Refunding Bonds” (the “Prior Bonds”) have been issued in the aggregate principal amount of $17,975,000 and are outstanding in the aggregate principal amount of $11,455,000; and
WHEREAS, the City Council has determined that the Bonds (defined below) shall be issued in the aggregate principal amount of $[_________] for the purpose of defeasing and refunding the Prior Bonds; and
WHEREAS, on May 5, 2026, the City Council adopted Resolution No. [___] (the “Resolution”) authorizing the issuance and sale of bond of the District (the “Bonds”) pursuant to this Agreement, designated the Bonds for the purpose of refinancing the Prior Bonds; and WHEREAS, it is in the public interest and for the benefit of the District, the City, the persons responsible for the payment of special taxes and the owners of the Bonds that the City enter into this Agreement to provide for the issuance of the Bonds, the disbursement of proceeds of the Bonds, the disposition of the special taxes securing the Bonds, and the administration and payment of the Bonds; and
WHEREAS, all things necessary to cause such bonds, when executed by the City and authenticated by the Fiscal Agent for the District and issued as in the Act, the Resolution (as hereinafter defined) and this Agreement provided, to be legal, valid and binding special obligations of the District in accordance with their terms, and all things necessary to cause the authorization, execution and delivery of this Agreement and the authorization, execution, authentication and delivery of such bonds, subject to the terms hereof, have in all respects been duly authorized.
NOW, THEREFORE, in consideration of the covenants and provisions herein set forth and for other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto do hereby agree as follows:
4.2.b
Packet Pg. 604 Attachment: Fiscal Agent Agreement (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) 2 ARTICLE I
AUTHORITY AND DEFINITIONS
Section 1.01. Authority for this Agreement. This Agreement is entered into pursuant to the provisions of the Act and the Resolution.
Section 1.02. Agreement for Benefit of Bondowners. The provisions, covenants and agreements herein set forth to be performed by or on behalf of the City and/or the District shall be for the equal benefit, protection and security of the Owners. All of the Bonds, without regard to the time or times of their issuance or maturity, shall be of equal rank without preference, priority or distinction of any of the Bonds over any other thereof, except as expressly provided in or permitted by this Agreement.
Section 1.03. Definitions. Unless the context otherwise requires, the terms defined in this Section 1.03 shall, for all purposes of this Agreement, of any Supplemental Agreement, and of any certificate, opinion or other document herein mentioned, have the meanings herein specified. All references herein to “Articles,” “Sections” and other subdivisions are to the corresponding Articles, Sections or subdivisions of this Agreement, and the words “herein,” “hereof,” “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section or subdivision hereof.
“Act” means the Mello-Roos Community Facilities Act of 1982, as amended, Chapter 2.5 (commencing with Section 53311) of Part 1 of Division 2 of Title 5 of the California Government Code.
“Administrative Expenses” means any or all of the following: the fees and expenses of the Fiscal Agent (including any fees or expenses of its counsel), the expenses of the City or its designee in carrying out its duties hereunder (including, but not limited to, the levying and collection of the Special Taxes, the fees and expenses of the municipal advisor and Special Tax Consultant, the costs of the District, complying with the arbitrage rebate requirements; the costs to the District, the City or any designee of either thereof of complying with the District, City or obligated persons disclosure requirements associated with applicable federal and state securities laws and of the Act; the costs associated with preparing Special Tax disclosure statements and responding to public inquiries regarding the Special Taxes; the costs of the District, or City, or any designee of either thereof related to an appeal of the Special Tax; the costs associated with the release of funds from an escrow account; and the District’s annual administration fee and third party expenses; the costs of the City or any designee of the City related to an appeal of the Special Tax) including the fees and expenses of its counsel, an allocable share of the salaries of City staff directly related thereto and a proportionate amount of City general administrative overhead related thereto, any amounts paid by the City from its general funds pursuant to Section 6.02 hereof, the fees and expenses of the Independent Financial Consultant, and all other costs and expenses of the City or the Fiscal Agent incurred in connection with the discharge of their respective duties hereunder and, in the case of the City, in any way related to the administration of the District. “Administrative Expense Fund” means the fund by that name established by Section
3.04(A) hereof.
4.2.b
Packet Pg. 605 Attachment: Fiscal Agent Agreement (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) 3 “Agreement” means this Agreement, as it may be amended or supplemented from time to time by any Supplemental Agreement adopted pursuant to the provisions hereof. “Annual Debt Service” means, for each Bond Year, the sum of (i) the interest due on the Outstanding Bonds in such Bond Year, assuming that the Outstanding Bonds are retired as scheduled, and (ii) the principal amount of the Outstanding Bonds scheduled to be paid. “Auditor” means the Auditor-Controller of the County of Riverside. “Authorized Officer” means the City Manager, the Finance Director and 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. “Bond Counsel” means any attorney or firm of attorneys acceptable to the City and nationally recognized for expertise in rendering opinions as to the legality and tax-exempt status of securities issued by public entities.
“Bond Fund” means the fund by that name established by Section 4.02(A) hereof. “Bond Proceeds Fund” means the fund by that name established pursuant to Section
3.02(A) hereof.
“Bond Year” means the period beginning on the Closing Date and ending on September 1, 2026 and thereafter the period beginning on each September 2 and ending on the following September 1.
“Bonds” means, unless otherwise expressly provided, the City of San Jacinto Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2) 2026 Special Tax Refunding Bonds, authorized by and at any time Outstanding pursuant to the Act and this Agreement. “Business Day” means any day other than (i) a Saturday or a Sunday or (ii) a day on which banking institutions in the State of California or in any state in which the Fiscal Agent has its Principal Office are authorized or obligated by law or executive order to be closed. “City” means the City of San Jacinto, California.
“City Council” means the City Council of the City.
“City Manager” means the City Manager of the City.
“Closing Date” means the date upon which there is an exchange of the Bonds for the proceeds representing payment of the purchase price of the Bonds by the Original Purchaser. “Code” means the Internal Revenue Code of 1986, as amended. “Costs of Issuance” means items of expense payable or reimbursable directly or indirectly by the City and related to the authorization, sale and issuance of the Bonds, which items of expense shall include, but not be limited to, printing costs, costs of reproducing and binding documents,
4.2.b
Packet Pg. 606 Attachment: Fiscal Agent Agreement (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) 4 including but not limited to the preliminary official statement and official statement regarding the Bonds, closing costs, filing and recording fees, initial fees and charges of the Fiscal Agent including its first annual administration fee and the fees of its counsel, expenses incurred by the City in connection with the issuance of the Bonds, premiums for any municipal bond insurance policy that may be purchased and for any reserve account Reserve Policy that may be purchased, rating agency fees, underwriter’s discount relating to the Bonds, including the fees of Bond Counsel and Disclosure Counsel, Municipal Advisor’s fees, charges for authentication, transportation and safekeeping of the Bonds, rating agency fees, premium for a bond insurance policy, if any, securing payment of the Bonds, premium for a reserve surety, if any, for the Bonds and other costs, charges and fees in connection with the foregoing. “Costs of Issuance Fund” means the fund by that name established by Section 3.05(A) hereof.
“Debt Service” means the amount of interest and principal payable on the Bonds scheduled to be paid during the period of computation, excluding amounts payable during such period which relate to principal of the Bonds which are scheduled to be retired and paid before the beginning of such period.
“Defeasance Securities” means, for purposes of Section 11.03(C) hereof, the following:
(i) Cash;
(ii) United States Treasury Certificates, Notes and Bonds (including State and Local Government Series - “SLGs”);
(iii) Direct obligations of the United States Treasury which have been stripped by the Treasury itself, CATS, TIGRS and similar securities; (iv) Resolution Funding Corporation (REFCORP) obligations; provided that only the interest component of REFCORP strips which have been stripped by request of the Federal Reserve Bank of New York in book-entry form are acceptable; (v) Pre-refunded municipal bonds rated “Aaa” by Moody’s and “AAA” by Standard & Poor’s; provided, however, that if the issue is only rated by Standard & Poor’s (i.e., there is no Moody’s rating), then the pre-refunded bonds must have been pre-refunded with cash, direct United States or United States guaranteed obligations, or “AAA” rated pre-refunded municipal bonds; and
(vi) Obligations issued by the following agencies which are backed by the full faith and credit of the United States of America:
(a) U.S. Export-Import Bank
Direct obligations or fully guaranteed certificates of beneficial ownership
(b) Farmers Home Administration
Certificates of beneficial ownership
4.2.b
Packet Pg. 607 Attachment: Fiscal Agent Agreement (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) 5 (c) Federal Financing Bank
(d) General Services Administration
Participation certificates
(e) United States Maritime Administration
Guaranteed Title XI financing
(f) United States Department of Housing and Urban Development Project notes
Local Authority Bonds
New Communities Debentures - United States government
guaranteed debentures
United States Public Housing Notes and Bonds - United States government guaranteed public housing notes and bonds.
“District” means City of San Jacinto Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2), County of Riverside, State of California. “Escrow Agent” means U.S. Bank Trust Company, National Association, as Escrow Agent under the Escrow Agreement.
“Escrow Agreement” means the Escrow Agreement dated as of June 1, 2026 by and among the Escrow Agent and the City and relating to the defeasance and refunding of the Prior Bonds. “Escrow Fund” means the fund by that name established under the Escrow Agreement. “Event of Default” shall mean any one or more of the events described in Section 10.1 hereof.
“Federal Securities” means any of the following which at the time of investment are legal investments under the laws of the State of California for the moneys proposed to be invested therein:
(i) Cash; and
(ii) Direct general obligations of (including obligations issued or held in book entry form on the books of the Department of the Treasury of the United States of America and CATS and TIGRS), or obligations, the timely payment of principal of and interest on which is fully and unconditionally guaranteed by, the United States of America. “Finance Director” means the Finance Director of the City. “Fiscal Agent” means U.S. Bank Trust Company, National Association, the Fiscal Agent appointed by the City, acting as an independent fiscal agent with the duties and powers herein provided, its successors and assigns, and any other corporation or association which may at any time be substituted in its place, as provided in Section 8.01 hereof.
4.2.b
Packet Pg. 608 Attachment: Fiscal Agent Agreement (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) 6 “Fiscal Year” means the twelve-month period extending from July 1 in a calendar year to June 30 of the succeeding year, both dates inclusive.
“Independent Financial Consultant” means a firm of certified public accountants, a financial consulting firm, a consulting engineering firm or engineer which is not an employee of, or otherwise controlled by, the City or the Special Tax Consultant. “Information Services” means the Electronic Municipal Market Access System of the Municipal Securities Rulemaking Board (at http://emma.msrb.org); and, in accordance with then current guidelines of the Securities and Exchange Commission, such other addresses and/or such other services providing information with respect to called bonds as may be designated in a Certificate of the City delivered to the Fiscal Agent.
[“Insurer” [______________], a [_________] corporation, or any successor thereto or assignee thereof, as the issuer of the Reserve Policy.] “Interest Account” means the account by that name established by the Fiscal Agent in the Bond Fund pursuant to Section 4.02(A) hereof.
“Interest Payment Dates” means March 1 and September 1 of each year, commencing September 1, 2026.
“Investment Earnings” means all interest earned and any gains and losses on the investment of moneys in any fund or account created by this Agreement excluding interest earned and gains and losses on the investment of moneys in the Rebate Fund. “Maximum Annual Debt Service” means the largest Annual Debt Service for any Bond Year after the calculation is made through the final maturity date of any Outstanding Bonds. “Moody’s” shall mean Moody’s Investors Service, Inc., a national rating service with offices in New York, New York.
“Municipal Advisor” means an independent financial consulting firm appointed by the City to advise the City as to financial matters relating to the Bonds. “Officer’s Certificate” means a written certificate of the City signed by an Authorized Officer of the City.
“Ordinance” means any ordinance of the City or resolution of the City Council levying the Special Taxes.
“Original Purchaser” means the first purchaser of the Bonds from the City. “Outstanding,” when used as of any particular time with reference to the Bonds, means (subject to the provisions of Section 9.04 hereof) all Bonds except:
(i) Bonds theretofore canceled by the Fiscal Agent or surrendered to the Fiscal Agent for cancellation;
4.2.b
Packet Pg. 609 Attachment: Fiscal Agent Agreement (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) 7 (ii) Bonds called for redemption which, for the reasons specified in Section
2.03(G) hereof, are no longer entitled to any benefit under this Agreement other than the right to receive payment of the redemption price therefor; (iii) Bonds paid or deemed to have been paid within the meaning of Section
11.03 hereof; and
(iv) Bonds in lieu of or in substitution for which other Bonds shall have been authorized, executed, issued and delivered by the City and authenticated by the Fiscal Agent pursuant to this Agreement or any Supplemental Agreement. “Owner” means any person who shall be the registered owner of any Outstanding Bond. “Permitted Investments” means:
(i) Federal Securities; and
(ii) Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the following federal agencies and provided 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):
(a) U.S. Export-Import Bank
Direct obligations or fully guaranteed certificates of beneficial ownership
(b) Farmers Home Administration
Certificates of beneficial ownership
(c) Federal Financing Bank
(d) Federal Housing Administration Debentures
(e) General Services Administration
Participation certificates
(f) Government National Mortgage Association (GNMA)
GNMA - guaranteed mortgage-backed bonds
GNMA - guaranteed pass-through obligations
(g) U.S. Maritime Administration
Guaranteed Title XI financing
4.2.b
Packet Pg. 610 Attachment: Fiscal Agent Agreement (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) 8 (h) U.S. Department of Housing and Urban Development
Project Notes
Local Authority Bonds
New Communities Debentures - United States government
guaranteed debentures
U.S. Public Housing Notes and Bonds - United States government guaranteed public housing notes and bonds;
(iii) 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):
(a) Federal Home Loan Bank System
Senior debt obligations
(b) Federal Home Loan Mortgage Corporation
Participation Certificates
Senior debt obligations
(c) Federal National Mortgage Association
Mortgage-backed securities and senior debt obligations
(d) Student Loan Marketing Association
Senior debt obligations
(e) Resolution Funding Corporation (REFCORP) obligations (f) Farm Credit System
Consolidated system wide bonds and notes;
(iv) Money market funds registered under the Federal Investment Company Act of 1940, whose shares are registered under the Federal Securities Act of 1933, and having a rating by Standard & Poor’s of “AAAm-G,” “AAA-m” or “AA-m” and, if rated by Moody’s, rated “Aaa,” “Aa1” or “Aa2” by Moody’s, including funds for which the Fiscal Agent, its parent holding company, if any, or any affiliates or subsidiaries of the Fiscal Agent or such holding company receive and retain a fee for services provided to the fund whether as a custodian, transfer agent, investment advisor or otherwise; (v) Certificates of deposit secured at all times by collateral described in clauses (i) and/or (ii) above. Such certificates must be issued by commercial banks, including the Fiscal Agent and its affiliates, savings and loan associations or mutual savings banks. The collateral must be held by a third party and the Fiscal Agent on behalf of the Owners of the Bonds must have a perfected first security interest in the collateral; (vi) Certificates of deposit, savings accounts, deposit accounts or money market deposits which are fully insured by FDIC, including BIF and SAIF including those that may be issued or provided by the Fiscal Agent and its affiliates;
4.2.b
Packet Pg. 611 Attachment: Fiscal Agent Agreement (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) 9 (vii) Investment agreements with domestic or foreign banks, insurance companies 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, the claims paying ability or financial strength, of the guarantor is rated in at least the double A category by Standard & Poor’s and Moody’s; provided that, by the terms of the investment agreement:
(a) interest payments are to be made to the Fiscal Agent 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 Fund); (b) the investment agreement shall provide that the invested funds are available for withdrawal without penalty or premium at any time upon not more than seven (7) days’ prior notice (The City and the Fiscal Agent shall give or cause to be given notice in accordance with the terms of the investment agreement so as to receive funds thereunder with no penalty or premium payable.); (c) 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;
(d) the City and the Fiscal Agent receive the opinion of domestic counsel (which opinion shall be addressed to the City and the Fiscal Agent) 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 City and the Fiscal Agent; (e) the investment agreement shall provide that if during its term (1) the provider’s (or its guarantor’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) days of receipt of publication of such downgrade, 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 City, the Fiscal Agent 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 four percent (104%) of securities identified in clauses (i) and (ii) of this definition; or (ii) assign the investment agreement and all of its obligations thereunder to a financial institution mutually acceptable to the provider, the City and the Fiscal Agent which is rated either in the first or second highest category by Standard & Poor’s and Moody’s; and
(2) the provider’s (or its guarantor’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 City or the
4.2.b
Packet Pg. 612 Attachment: Fiscal Agent Agreement (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) 10 Fiscal Agent, 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 City or the Fiscal Agent; and (f) the investment agreement shall provide and an opinion of counsel shall be rendered, in the event 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 the Holder of the Collateral is in possession of such collateral); and
(g) 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 City or the Fiscal Agent, be accelerated and amounts invested and accrued but unpaid interest thereon shall be paid to the City or the Fiscal Agent, 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. (“event of insolvency”), the provider’s obligations shall automatically be accelerated and amounts invested and accrued but unpaid interest thereon shall be paid to the City or the Fiscal Agent, as appropriate;
(viii) Commercial paper rated, at the time of purchase, “Prime - 1” by Moody’s and “A 1” or better by Standard & Poor’s;
(ix) Bonds or notes issued by any state or municipality which are rated by Moody’s and/or Standard & Poor’s in one of the two highest rating categories assigned by them;
(x) Federal funds or bankers acceptances with a maximum term of one year of any bank or deposit accounts, including the Fiscal Agent and its affiliates, which has an unsecured, uninsured and unguaranteed obligation rating of “Prime - 1” or better by Moody’s and “A-1” or better by Standard & Poor’s;
(xi) Repurchase agreements which satisfy the following criteria:
(a) Repurchase agreements must be between the City or the Fiscal Agent and an entity which is:
(1) A primary dealer on the Federal Reserve reporting dealer list which is rated “A” or better by Standard & Poor’s and Moody’s, or (2) A bank rated “A” or above by Standard & Poor’s and
Moody’s; or
4.2.b
Packet Pg. 613 Attachment: Fiscal Agent Agreement (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) 11 (3) A 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, the claims paying ability or financial strength of the guarantor, is rated in at least the double A category by Standard & Poor’s and Moody’s. (b) The written agreement must include the following:
(1) Securities which are acceptable for transfer are:
(A) direct obligations of the United States government, or
(B) obligations of federal agencies backed by the full
faith and credit of the United States of America (or the Federal National Mortgage Association (FNMA) or the Federal Home Loan Mortgage Corporation (FHLMC)),
(2) The collateral must be delivered to the City or the Fiscal Agent (if the Fiscal Agent is not supplying the collateral) or a third party acting as agent for the Fiscal Agent (if the Fiscal Agent is supplying the collateral) before or simultaneous with payment (perfection by possession of certificated securities),
(3) (A) The securities must be valued weekly, marked-tomarket at current market price plus accrued interest, and (B) The value of the collateral must be at least equal to one hundred four percent (104%) of the amount of money
transferred by the Fiscal Agent to the dealer, bank or corporation under the agreement plus accrued interest. If the value of the securities held as collateral is reduced below one hundred four percent (104%) of the value of the amount of money transferred by the Fiscal Agent, then additional acceptable securities and/or cash must be provided as collateral to bring the value of the collateral to one hundred four percent (104%); provided, however, that if the securities used as collateral are those of FNMA or FHLMC, then the value of the collateral must equal to one hundred five percent (105%) of the amount of money transferred by the Fiscal Agent; and (xii) 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.“Principal Account” means the account by that name established by the Fiscal Agent pursuant to Section 4.02(A) hereof.
“Principal Office” means the principal corporate trust office of the Fiscal Agent in Los Angeles, California or such other addresses may be specified in writing by the Fiscal Agent;
4.2.b
Packet Pg. 614 Attachment: Fiscal Agent Agreement (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) 12 provided, however, that for purposes of the transfer, registration, exchange, payment and surrender of Bonds.
“Prior Bonds” means the City of San Jacinto Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2) 2016 Special Tax Refunding Bonds. “Prior Fiscal Agent” means U.S. Bank Trust Company, National Association, formerly known as MUFG Union Bank, N.A., acting in its capacity as the fiscal agent pursuant to the Prior Fiscal Agent Agreement.
“Prior Fiscal Agent Agreement” means the Fiscal Agent Agreement, dated as of March 1, 2016, by and between the City, for and on behalf of the District, and the Prior Fiscal Agent pertaining to the Prior Bonds.
“Priority Administrative Expense Amount” means the amount of $[50,000] for Fiscal Year 20[26]-[27] escalating by 2% each Fiscal Year thereafter during the term of the Bonds. “Proceeds,” when used with reference to the Bonds, means the aggregate principal amount of the Bonds, plus accrued interest and original issue premium, if any, less original issue discount, if any, less Original Purchaser’s discount.
“Rate and Method of Apportionment of Special Tax” means the Modified Rate and Method of Special Tax for the District approved by the qualified electors of the District, at a special election held on September 10, 2002.
“Rebate Certificate” means the certificate delivered by the City upon the delivery of the Bonds relating to Section 148 of the Code, or any functionally similar replacement certificate. “Rebate Fund” means the fund by that name established by Section 6.02 hereof. “Record Date” means the fifteenth (15th) day of the month next preceding the applicable Interest Payment Date whether or not such day is a Business Day. “Registration Books” means the registration books maintained by the Fiscal Agent pursuant to Section 2.08 hereof.
“Regulations” means the temporary and permanent regulations of the United States Department of the Treasury promulgated under the Code.
“Representation Letter” means the representation letter which the City has delivered to The Depository Trust Company (“DTC”) with respect to the utilization of the book-entry system maintained by DTC for the issuance and registration of bonds. “Reserve Fund” means the fund by that name established by Section 4.03(A) hereof. [“Reserve Policy” means the municipal bond debt service reserve insurance policy issued as Policy Number [____________] deposited into the Reserve Fund, issued by the Insurer.]
4.2.b
Packet Pg. 615 Attachment: Fiscal Agent Agreement (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) 13 “Reserve Requirement” means, as of the Closing Date, the lesser of (i) ten percent (10%) of the original issue price of the Bonds calculated in accordance with Treasury Regulations Section
1.148-2(f)(1), (ii) Maximum Annual Debt Service on the Bonds, or (iii) 125 percent (125%) of average Annual Debt Service on the Bonds; provided further that the District may meet all or a portion of the Reserve Requirement by depositing a Reserve Policy or insurance policy meeting the requirements of Section 3.02(a) hereto.
“Resolution” means Resolution No. [____] adopted by the City Council on, [May 5], 2026. “Securities Depositories” means The Depository Trust Company, 55 Water Street, 50th Floor, New York, New York, 10041-0099, Call Notification Department, Fax (212) 855-7232; and, in accordance with then current guidelines of the Securities and Exchange Commission, such other securities depositories as the City may designate in an Officer’s Certificate delivered to the Fiscal Agent.
“Special Taxes” or “Special Tax” means the special taxes levied by the City Council on parcels of taxable property within the District pursuant to the Act and this Agreement. “Special Tax Consultant” means an engineer or financial consultant or other such person or firm with expertise in the apportionment and levy of special taxes in community facilities districts which is employed by the City to assist the City in levying the Special Taxes. “Special Tax Fund” means the fund by that name established by Section 3.03(A) hereof. “Special Tax Prepayments” means amounts received by the City as prepayments of all or a portion of the Special Tax obligation of a parcel of property in the District. “Special Tax Prepayments Account” means the account by that name established by the Fiscal Agent in the Bond Fund pursuant to Section 4.02(A) hereof. “Special Tax Revenues” means the proceeds of the Special Taxes received by the City, including any scheduled payments thereof, interest and penalties thereon and proceeds of the redemption or sale of property sold as a result of foreclosure of the lien of the Special Taxes in the amount of said lien and interest and penalties thereon. “Standard & Poor’s” or “S&P” means S&P Global Ratings, a Standard & Poor’s Financial Services LLC business, a national rating service with offices in New York, New York. “Supplemental Agreement” means an agreement amending and supplementing this Agreement as permitted hereby.
“Surplus Account” means the account by that name established in the Special Tax Fund by Section 3.03 (A) hereof.
4.2.b
Packet Pg. 616 Attachment: Fiscal Agent Agreement (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) 14 ARTICLE II
THE BONDS
Section 2.01. Principal Amount; Designation. The Bonds in the aggregate principal amount of $[_________] are hereby authorized to be issued by the City for the District under and subject to the terms of the Resolution, this Agreement, the Act and other applicable laws of the State of California. The Bonds shall be designated “City of San Jacinto Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2) 2026 Special Tax Refunding Bonds” and shall be issued in the form attached hereto as Exhibit A.
Section 2.02. Terms of Bonds.
(A) The Bonds. The Bonds shall be issued as fully registered bonds, without coupons, in the denominations of $5,000 or any integral multiple thereof. The Bonds shall be lettered and numbered in a customary manner as determined by the Fiscal Agent. The Bonds shall be dated [_________], 2026.
(B) Maturities. The Bonds shall mature and become payable on September 1 of each year, as follows:
Maturity Date
(September 1) Principal Amount Interest Rate
(C) Interest. The Bonds shall bear interest at the rates set forth in subsection (B) above payable on the Interest Payment Dates in each year. Interest shall be calculated on the basis of a 360-day year composed of twelve 30-day months. Each Bond shall bear interest from the Interest Payment Date next preceding the date of authentication thereof unless (i) it is authenticated on an Interest Payment Date, in which event it shall bear interest from such Interest Payment Date, or (ii) it is authenticated prior to an Interest Payment Date and after the close of business on the Record Date preceding such Interest Payment Date, in which event it shall bear interest from such Interest Payment Date, or (iii) it is authenticated prior to the Record Date preceding the first Interest Payment Date, in which event it shall bear interest from [_________], 2026; provided, however, that if at the time of authentication of a Bond, interest is in default thereon, such Bond shall bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment thereon or from [_________], 2026, if no interest has previously been paid or made available for payment thereon.
(D) Method of Payment. Interest on the Bonds is payable by check of the Fiscal Agent mailed by first class mail, postage prepaid, on each Interest Payment Date, until the principal amount of a Bond has been paid or made available for payment, to the registered Owner thereof at such registered Owner’s address as it appears on the registration books maintained by the Fiscal
4.2.b
Packet Pg. 617 Attachment: Fiscal Agent Agreement (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) 15 Agent at the close of business on the Record Date preceding the Interest Payment Date. The principal of the Bonds and any premium on the Bonds are payable in lawful money of the United States of America by check of the Fiscal Agent upon surrender of such Bonds at the Principal Office of the Fiscal Agent; provided, however, that at the written request of the Owner of at least $1,000,000 in aggregate principal amount of Outstanding Bonds filed with the Fiscal Agent prior to any Record Date, interest on such Bonds shall be paid to such Owner on each succeeding Interest Payment Date by wire transfer of immediately available funds to an account in the United States of America designated in such written request. All Bonds paid by the Fiscal Agent pursuant to this subsection shall be canceled by the Fiscal Agent.
(E) CUSIP Identification Numbers. “CUSIP” identification numbers shall be imprinted on the Bonds, but such numbers shall not constitute a part of the contract evidenced by the Bonds.
In addition, failure on the part of the City or the Fiscal Agent to use such CUSIP numbers in any notice to the Owners shall not constitute an Event of Default or any violation of the City’s contract with the Owners and shall not impair the effectiveness of any such notice.
Section 2.03. Redemption.
(A) Optional Redemption. The Bonds are not subject to optional redemption prior to their stated maturity dates.
(B) Mandatory Redemption From Special Tax Prepayments. The Bonds are subject to mandatory redemption prior to their stated maturity dates on any Interest Payment Date, as selected by the City, in integral multiples of $5,000, from moneys derived by the City from Special Tax Prepayments and related transfers from the Reserve Fund, at redemption prices (expressed as percentages of the principal amounts of the Bonds to be redeemed), together with accrued interest to the date of redemption, as follows:
Redemption Period Redemption Price
September 1, 2026 through March 1, 2033 103%
September 1, 2033 and March 1, 2034 102
September 1, 2034 101
(C) [Reserved]
(D) Purchase of Bonds. In lieu of payment at maturity or redemption under this Section
2.03, moneys in the Bond Fund may be used and withdrawn by the Fiscal Agent for purchase of Outstanding Bonds, upon the filing with the Fiscal Agent of an Officer’s Certificate requesting such purchase, at public or private sale as and when, and at such prices (including brokerage and other charges) as such Officer’s Certificate may provide, but in no event may Bonds be purchased at a price in excess of the principal amount thereof, plus interest accrued to the date of purchase.
In such event, the City shall, as may be appropriate, provide to the Fiscal Agent a revised maturity schedule or a revised mandatory sinking fund schedule for the Bonds, or both. (E) Notice to Fiscal Agent. An Authorized Officer shall give the Fiscal Agent written notice of the City’s intention to redeem Bonds not less than forty-five (45) days prior to the
4.2.b
Packet Pg. 618 Attachment: Fiscal Agent Agreement (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) 16 applicable redemption date. Such written notice shall specify whether Bonds are to be redeemed pursuant to subsection (B) above.
(F) Redemption Procedure by Fiscal Agent. The Fiscal Agent shall cause notice of any redemption to be mailed by first class mail, postage prepaid, at least thirty (30) days but not more than sixty (60) days prior to the date fixed for redemption, or electronically submitted, to the Securities Depositories and to one or more Information Services selected by an Authorized Officer, and to the respective registered Owners of any Bonds designated for redemption, at their addresses appearing on the Bond registration books maintained by the Fiscal Agent at its Principal Office; but such mailing shall not be a condition precedent to such redemption and failure to mail or to receive any such notice, or any defect therein, shall not affect the validity of the proceedings for the redemption of such Bonds. The Fiscal Agent shall also cause notice of any redemption to be mailed, in such manner and within such time, to the Underwriter.
Such notice shall state the date of such notice, the date of issue of the Bonds, the place or places of redemption, the redemption date, the redemption price and, if less than all of the then Outstanding Bonds are to be called for redemption, shall designate the CUSIP numbers and Bond numbers of the Bonds to be redeemed, by giving the individual CUSIP number and Bond number of each Bond to be redeemed, or shall state that all Bonds between two stated Bond numbers, both inclusive, are to be redeemed or that all of the Bonds of one or more maturities have been called for redemption, shall state as to any Bond called for redemption in part the portion of the principal of the Bond to be redeemed, shall require that such Bonds be then surrendered at the Principal Office of the Fiscal Agent for redemption at the said redemption price, and shall state that further interest on such Bonds will not accrue from and after the redemption date. The cost of the mailing of any such redemption notice shall be paid by the District. Such notice may state that no representation is made as to the accuracy or correctness of the CUSIP numbers printed thereon or on the Bonds.
Any notice of optional redemption of the Bonds delivered in accordance with this Section
2.03 may be conditional and if any condition stated in the notice of redemption shall not have been satisfied on or prior to the redemption date, said notice shall be of no force and effect and the District shall not be required to redeem such Bonds and the redemption shall not be made and the Fiscal Agent shall within a reasonable time thereafter give notice, to the persons and in the manner in which the notice of redemption was given, that such condition or conditions were not met and that the redemption was cancelled.
Upon the payment of the redemption price of Bonds being redeemed, each check or other transfer of funds issued for such purpose shall, to the extent practicable, bear the CUSIP number identifying, by issue and maturity, the Bonds being redeemed with the proceeds of such check or other transfer.
If less than all the Bonds Outstanding are to be redeemed, the portion of any Bond of a denomination of more than $5,000 to be redeemed shall be in the principal amount of $5,000 or a multiple thereof, and, in selecting portions of such Bonds for redemption, the Fiscal Agent shall treat each such Bond as representing the number of Bonds of $5,000 denominations which is obtained by dividing the principal amount of such Bond to be redeemed in part by $5,000.
4.2.b
Packet Pg. 619 Attachment: Fiscal Agent Agreement (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) 17 Whenever provision is made in this Agreement for the redemption of less than all of the Bonds of a maturity or any given portion thereof, the Fiscal Agent shall select the Bonds of such maturity to be redeemed, from all Bonds of such maturity or such given portion thereof not previously called for redemption, by lot within a maturity in any manner which the Fiscal Agent in its sole discretion shall deem appropriate.
Upon surrender of Bonds redeemed in part only, the City shall execute and the Fiscal Agent shall authenticate and deliver to the Owner, at the expense of the District, a new Bond or Bonds, of the same maturity, of authorized denominations in an aggregate principal amount equal to the unredeemed portion of the Bond or Bonds.
(G) Effect of Redemption. From and after the date fixed for redemption, if funds available for the payment of the redemption prices of the Bonds called for redemption shall have been deposited in the Bond Fund, such Bonds shall cease to be entitled to any benefit under this Agreement other than the right to receive payment of the redemption price, and interest shall cease to accrue on the Bonds to be redeemed on the redemption date specified in the notice of redemption.
All Bonds redeemed and purchased by the Fiscal Agent pursuant to this Section 2.03 shall be canceled by the Fiscal Agent.
Section 2.04. Form of Bonds. The Bonds, including the Fiscal Agent’s certificate of authentication and the assignment to appear thereon, shall be substantially in the forms set forth in Exhibit A attached hereto and by this reference incorporated herein, with necessary or appropriate variations, omissions and insertions as permitted or required by this Agreement.
Section 2.05. Execution of Bonds. The Bonds shall be executed on behalf of the District by the facsimile signatures of the President and the Secretary of the City Council, who are in office on the date of this Agreement or at any time thereafter. If any officer whose signature appears on any Bond ceases to be such officer before delivery of the Bond to the Owner, such signature shall nevertheless be as effective as if the officer had remained in office until the delivery of the Bond to the Owner. Any Bond may be signed and attested on behalf of the District by such persons as at the actual date of the execution of such Bond shall be the proper officers of the City although at the nominal date of such Bond any such person shall not have been such officer of the City.
Only such Bonds as shall bear thereon a certificate of authentication in substantially the form set forth in Exhibit A hereto, as appropriate, manually executed and dated by the Fiscal Agent, shall be valid or obligatory for any purpose or entitled to the benefits of this Agreement, and such certificate of authentication of the Fiscal Agent shall be conclusive evidence that such Bonds have been duly authenticated, registered and delivered hereunder, and are entitled to the benefits of this Agreement.
Section 2.06. Transfer of Bonds. Any Bond may, in accordance with its terms, be transferred, upon the books required to be kept pursuant to the provisions of Section 2.08 hereof, by the person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of such Bond for cancellation at the Principal Office of the Fiscal Agent, accompanied by delivery of a duly executed written instrument of transfer in a form approved by the Fiscal
4.2.b
Packet Pg. 620 Attachment: Fiscal Agent Agreement (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) 18 Agent. The cost for any services rendered or any expenses incurred by the Fiscal Agent in connection with any such transfer shall be paid by the District. The Fiscal Agent shall collect from the Owner requesting transfer of a Bond any tax or other governmental charge required to be paid with respect to such transfer.
Whenever any Bond or Bonds shall be surrendered for transfer, the City shall execute and the Fiscal Agent shall authenticate and deliver a new Bond or Bonds of like aggregate principal amount.
No transfers of Bonds shall be required to be made (i) during the fifteen (15) days preceding the date established by the Fiscal Agent for selection of Bonds for redemption, or (ii) with respect to Bonds which have been selected for redemption.
Section 2.07. Exchange of Bonds. Bonds may be exchanged at the Principal Office of the Fiscal Agent only for a like aggregate principal amount of Bonds of authorized denominations and of the same maturity and interest rate. The cost for any services rendered or any expense incurred by the Fiscal Agent in connection with any such exchange shall be paid by the District. The Fiscal Agent shall collect from the Owner requesting exchange of a Bond any tax or other governmental charge required to be paid with respect to such exchange.
No exchanges of Bonds shall be required to be made (i) during the fifteen (15) days preceding the date established by the Fiscal Agent for selection of Bonds for redemption, or (ii) with respect to Bonds which have been selected for redemption.
Section 2.08. Bond Register. The Fiscal Agent shall keep, or cause to be kept, at its Principal Office sufficient books for the registration and transfer of the Bonds which books shall show the series, number, CUSIP identification number, date of issuance, amount, rate of interest and Owner of each Bond and shall at all times be open to inspection by the City during regular business hours upon reasonable notice; and, upon presentation for such purpose, the Fiscal Agent shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred, on said books, the ownership of the Bonds as hereinbefore provided.
Section 2.09. Temporary Bonds. The Bonds may be initially issued in temporary form exchangeable for definitive Bonds when ready for delivery. The temporary Bonds may be printed, lithographed or typewritten, shall be of such denominations as may be determined by the City, and may contain such reference to any of the provisions of this Agreement as may be appropriate.
Every temporary Bond shall be executed by the City upon the same conditions and in substantially the same manner as the definitive Bonds. If the City issues temporary Bonds it will execute and furnish definitive Bonds without delay and thereupon the temporary Bonds shall be surrendered, for cancellation, in exchange for the definitive Bonds at the Principal Office of the Fiscal Agent or at such other location as the Fiscal Agent shall designate, and the Fiscal Agent shall authenticate and deliver in exchange for such temporary Bonds an equal aggregate principal amount of definitive Bonds of authorized denominations. Until so exchanged, the temporary Bonds shall be entitled to the same benefits under this Agreement as definitive Bonds authenticated and delivered hereunder.
4.2.b
Packet Pg. 621 Attachment: Fiscal Agent Agreement (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) 19 Section 2.10. Bonds Mutilated, Lost, Destroyed or Stolen. If any Bond shall become mutilated, the City, at the expense of the Owner of said Bond, shall execute, and the Fiscal Agent shall authenticate and deliver, a replacement Bond of like tenor and principal amount in exchange and substitution for the Bond so mutilated, but only upon surrender to the Fiscal Agent of the Bond so mutilated. Every mutilated Bond so surrendered to the Fiscal Agent shall be canceled and destroyed by the Fiscal Agent. If any Bond shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Fiscal Agent and, if such evidence be satisfactory to it and indemnity satisfactory to it shall be given, the City, at the expense of the Owner, shall execute, and the Fiscal Agent shall authenticate and deliver, a replacement Bond of like tenor and principal amount in lieu of and in substitution for the Bond so lost, destroyed or stolen. The City or Fiscal Agent may require payment of a sum not exceeding the actual cost of preparing each replacement Bond delivered under this Section 2.10 and of the expenses which may be incurred by the City and the Fiscal Agent for the preparation, execution, authentication and delivery thereof.
Any Bond delivered under the provisions of this Section 2.10 in replacement of any Bond alleged to be lost, destroyed or stolen shall constitute an original additional contractual obligation of the District whether or not the Bond so alleged to be lost, destroyed or stolen is at any time enforceable by anyone, and shall be equally and proportionately entitled to the benefits of this Agreement with all other Bonds issued pursuant to this Agreement.
Section 2.11. Special Obligation. All obligations of the City and the District under this Agreement and the Bonds shall be special obligations of the City and the District, payable solely from the Special Tax Revenues and the funds pledged therefor pursuant hereto. Neither the faith and credit nor the taxing power of the City, the District (except to the limited extent set forth herein) or the State of California or any political subdivision thereof is pledged to the payment of the Bonds.
Section 2.12. Parity Bonds and Subordinate Bonds. The City will not issue parity bonds or subordinate bonds of the District for any purpose.
Section 2.13. Book-Entry. The Bonds shall be initially issued in the form of a single, fully registered Bond for each maturity (which may be typewritten). Upon initial issuance, the ownership of such Bonds shall be registered in the name of the Nominee identified below as nominee of The Depository Trust Company, New York, New York and its successors and assigns (the “Depository” or “DTC”). Except as hereinafter provided, all of the Outstanding Bonds shall be registered in the name of the nominee of the Depository, which may be the Depository, as determined from time to time pursuant to this Section 2.13 (the “Nominee”).
With respect to the Bonds registered in the name of the Nominee, neither the City nor the Fiscal Agent shall have any responsibility or obligation to any broker-dealers, banks and other financial institutions from time to time for which the Depository holds Bonds as securities depository (the “Participant”) or to any person on behalf of which such a Participant holds an interest in the Bonds. Without limiting the immediately preceding sentence, neither the City nor the Fiscal Agent shall have any responsibility, liability or obligation whatsoever with respect to (i) the accuracy of the records of the Depository, the Nominee, or any Participant with respect to any ownership interest in the Bonds, (ii) the delivery to any Participant or any other person, other than an Owner of a Bond as shown in the registration books maintained by the Fiscal Agent pursuant to Section 2.08 hereof (the “Registration Books”), of any notice with respect to the Bonds,
4.2.b
Packet Pg. 622 Attachment: Fiscal Agent Agreement (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) 20 including any notice of redemption, (iii) the selection by the Depository and its Participants of the beneficial interests in the Bonds to be redeemed in the event the City redeems the Bonds in part, or (iv) the payment to any Participant or any other person, other than an Owner of a Bond as shown in the Registration Books, of any amount with respect to principal of or interest on the Bonds. The City and the Fiscal Agent may treat and consider conclusively the person in whose name each Bond is registered as the holder and absolute Owner of such Bond for the purpose of payment of principal and interest with respect to such Bond, for the purpose of giving notices of redemption, if applicable, 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 City shall pay all principal of and interest on the Bonds only to or upon the order of the respective Owner of a Bond, as shown in the Registration Books, or his or her attorney duly authorized in writing, and all such payments shall be valid and effective to fully satisfy and discharge the City’s obligations with respect to payment of principal of and interest on the Bonds to the extent of the sum or sums so paid. No person other than an Owner of a Bond, as shown in the Registration Books, shall receive a Bond evidencing the obligation of the City to make payments of principal and interest pursuant to this Agreement. Upon delivery by the Depository to the Owners of the Bond, and the City 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 this Agreement shall refer to such nominee of the Depository.
In the event (i) the Depository determines not to continue to act as securities depository for the Bonds, or (ii) the Depository shall no longer so act and gives notice to the City of such determination, then the City will discontinue the book-entry system with the Depository. If the City determines to replace the Depository with another qualified securities depository, the City shall prepare or direct the preparation of a new, single, separate, fully registered Bond, per maturity, registered in the name of such successor or substitute qualified securities depository or its nominee. If the City fails to identify another qualified securities depository to replace the Depository, then the Bonds shall no longer be restricted to being registered in the Registration Books in the name of the Nominee, but shall be registered in whatever name or names Owners of the Bonds transferring or exchanging Bonds shall designate, in accordance with the provisions of Sections 2.06 and 2.07 hereof, and the City shall prepare and deliver Bonds to the Fiscal Agent for authentication and delivery to the Owners thereof for such purpose.
In the event of a reduction in aggregate principal amount of Bonds Outstanding or an advance refunding of part of the Bonds Outstanding, the Depository, in its discretion, (a) may request the City to prepare and issue a new Bond or (b) may make an appropriate notation on a Bond indicating the date and amounts of such reduction in principal, but in such event the Registration Books maintained by the Fiscal shall be conclusive as to what amounts are Outstanding with respect to the Bond, except in the case of final maturity, in which case the Bond must be presented to the Fiscal Agent prior to payment.
Notwithstanding any other provision of this Agreement to the contrary, so long as any Bond is registered in the name of the Nominee, all payments of principal and interest with respect to such Bond and all notices with respect to such Bond shall be made and given, respectively, as provided in the Representation Letter or as otherwise instructed by the Depository and acceptable to the City.
4.2.b
Packet Pg. 623 Attachment: Fiscal Agent Agreement (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) 21 The initial Nominee shall be Cede & Co., as Nominee of DTC.
ARTICLE III
ISSUANCE OF BONDS; APPLICATION OF PROCEEDS;
SPECIAL TAX FUND; ADMINISTRATIVE EXPENSE FUND;
COSTS OF ISSUANCE FUND
Section 3.01. Issuance and Delivery of Bonds. At any time after the execution of this Agreement, the City may issue the Bonds for the District in the aggregate principal amounts set forth in Section 2.01 hereof and deliver the Bonds to the Original Purchaser. The Authorized Officers of the City are hereby authorized and directed to deliver any and all documents and instruments necessary to cause the issuance of the Bonds in accordance with the provisions of the Act, the Resolution and this Agreement, to authorize the payment of Costs of Issuance by the Fiscal Agent from the proceeds of Bonds, and to do and cause to be done any and all acts and things necessary or convenient for delivery of the Bonds to the Original Purchaser.
Section 3.02. Application of Proceeds of Sale of Bonds and Funds Transferred from the Prior Funds and Accounts.
(A) The Proceeds of the sale of the Bonds to the Original Purchaser shall be paid to the Fiscal Agent, who shall forthwith set aside, pay over and deposit such Proceeds into the Bond Proceeds Fund, which is hereby established by the Fiscal Agent, on the Closing Date and deposited or transferred as set forth below. [At the request of the District, on the Closing Date, the Underwriter will wire to the Insurer an amount equal to $_______ representing the sum of the premium for the Reserve Policy.]
(i) [deposit in the Reserve Fund the amount of $[_________] which constitutes the Reserve Requirement at the Closing Date] [The District shall deposit the Reserve Policy with a face value equal to the Reserve Requirement and the Fiscal Agent shall credit the Reserve Policy to the Reserve Fund. The District shall maintain an amount equal to the Reserve Requirement with respect to the Bonds in the Reserve Fund; provided, however, at any time, moneys on deposit in the Reserve Fund representing the Reserve Requirement, or any portion thereof, for the Bonds may be substituted by the District with a letter of credit, reserve policy, bond insurance policy or other form of guaranty from a financial institution, the long term, unsecured obligations of which are rated at the time of issuance of such instrument by S&P or Moody’s is “A” (without regard to modifier) or higher, in an amount equal to the Reserve Requirement, or in an amount, which together with cash on deposit for such purpose, equals the Reserve Requirement, upon presentation to the Fiscal Agent of such letter of credit, reserve policy, bond insurance policy or other form of guaranty from a financial institution, together with evidence, that such letter of credit, reserve policy, bond insurance policy or other form of guaranty from a financial institution satisfies the rating requirement set forth above. Upon such substitution, the Fiscal Agent shall transfer amounts on deposit in the Reserve Fund representing the applicable portion of cash representing the Reserve Requirement for the Bonds to the District to be applied for redevelopment purposes. Amounts on deposit in the Reserve Fund or any letter of credit, reserve policy, bond insurance policy or other guarantee acquired by the District to
4.2.b
Packet Pg. 624 Attachment: Fiscal Agent Agreement (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) 22 satisfy the Reserve Requirement for the Bonds shall only be used in connection with the Bonds and shall not be used as security for any other series of Bonds issued under the Original Fiscal Agent Agreement. The District shall have no obligation to replace the Reserve Policy or to fund the Reserve Fund with cash if, at any time that the Bonds are Outstanding, amounts are not available under the Reserve Policy other than in connection with a draw on the Reserve Policy, or if the ratings of the Insurer decline or are withdrawn.
The Reserve Requirement with respect to the Bonds shall be satisfied by the delivery of the Reserve Policy to the Fiscal Agent. The Fiscal Agent shall credit the Reserve Policy to the Reserve Fund. Under the terms and conditions of the Reserve Policy, the Fiscal Agent shall deliver to the Insurer a demand for payment under the Reserve Policy in the required form at least five Business Days before the date on which funds are required for the purposes set forth in Section 7.03(c). The Fiscal Agent shall comply with all of the terms and provisions of the Reserve Policy for the purpose of assuring that funds are available thereunder when required for the purposes of the Reserve Account, within the limits of the coverage amount provided by the Reserve Policy. All amounts drawn by the Fiscal Agent under the Reserve Policy will be deposited into the Reserve Account and applied for the purposes thereof;]
(ii) deposit in the Costs of Issuance Fund the amount of $[_________]; and (iii) transfer to the Escrow Agent for deposit in the Escrow Fund for the Prior Bonds pursuant to the Escrow Agreement the amount of $[_________].
The Fiscal Agent shall close the Bond Proceeds Fund after disbursements listed above. (B) In addition to proceeds of the Bonds, the Fiscal Agent shall receive and deposit the following amounts from the Prior Fiscal Agent:
(i) $[_________] for deposit in the Administrative Expense Fund; and (ii) $[_________] for deposit into the Bond Fund.
Section 3.03. Special Tax Fund.
(A) Creation of Special Tax Fund. There is hereby established, as a separate account to be held by the Fiscal Agent, the “City of San Jacinto Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2) Special Tax Bonds Special Tax Fund” to the credit of which the City shall deposit, within ten (10) Business Days after receipt, the Special Tax Revenues received by the City. There is hereby also established in the Special Tax Fund, as a separate account, to be held by the Fiscal Agent, the “Surplus Account” to the credit of which amounts shall be deposited as provided in Section 3.04(B) and in Section 4.02(B) hereof. Moneys in the Special Tax Fund shall be held by the Fiscal Agent for the benefit of the City and the Owners of the Bonds, shall be disbursed as provided below and, pending disbursement, shall be subject to a lien in favor of the Owners of the Bonds.
Notwithstanding the foregoing, any amounts received by the City which constitute Special Tax Prepayments shall be transferred by the City immediately upon receipt to the Fiscal Agent for
4.2.b
Packet Pg. 625 Attachment: Fiscal Agent Agreement (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) 23 deposit by the Fiscal Agent in the Special Tax Prepayments Account established pursuant to Section 4.02(A) hereof.
(B) Disbursements. As soon as practicable after the receipt from the City of any Special Tax Revenues, but no later than ten (10) Business Days after such receipt, the Fiscal Agent shall withdraw from the Special Tax Fund and deposit in the Administrative Expense Fund, an amount which is estimated by the City, in a written communication from an Authorized Officer delivered to the Fiscal Agent (upon which the Fiscal Agent may conclusively rely) to be sufficient, together with the amount then on deposit in the Administrative Expense Fund, to pay the Administrative Expenses during the current Fiscal Year; provided, however, that the amount deposited in the Administrative Expense Fund prior to the deposits to the Interest Account and the Principal Account of the Bond Fund, as provided below, shall not exceed the Priority Administrative Expense Amount for any Fiscal Year. Thereafter, on or before each Interest Payment Date, the Fiscal Agent shall deposit in the Interest Account and the Principal Account of the Bond Fund the amounts required for payment of interest on or interest on and principal of the Bonds, as provided in Section 4.02(B) hereof. From the amount then remaining on deposit in the Special Tax Fund, the Fiscal Agent shall, as soon as the amount on deposit in the Special Tax Fund is sufficient, deposit in the Reserve Fund the amount, if any, which the City shall direct in a written communication from an Authorized Officer delivered to the Fiscal Agent (upon which the Fiscal Agent may conclusively rely), to be withdrawn from the Special Tax Fund and deposited in the Reserve Fund to make the amount on deposit therein equal to the Reserve Requirement.
Notwithstanding the preceding provisions of this subsection, if prior to the September 1 Interest Payment Date in any Bond Year the City determines that Special Tax Revenues will be sufficient to enable the Fiscal Agent to deposit in the Reserve Fund the amount, if any, which is necessary to make the amount on deposit therein equal to the Reserve Requirement and deposit in the Bond Fund the full amount required for deposit to the Interest Account and the Principal Account to pay the interest on and principal of the Bonds on such Interest Payment Date, the City may instruct the Fiscal Agent in an Officer’s Certificate, upon which the Fiscal Agent may conclusively rely, to deposit an additional amount in the Administrative Expense Fund which amount shall not exceed the difference between the amount of Special Tax Revenues then on deposit in the Special Tax Fund and the amounts required to be deposited in the Reserve Fund and the Bond Fund before making the required deposits to the Interest Account and the Principal Account of the Bond Fund, and the Fiscal Agent shall deposit such additional amount in the Administrative Expense Fund before depositing any amount to the Reserve Fund or the Interest Account and the Principal Account of the Bond Fund.
On or before the March 1 Interest Payment Date in each Bond Year, if the amount of other moneys which is on deposit in the Special Tax Fund is less than the amount of the interest on the Bonds which is due on such Interest Payment Date, the Fiscal Agent shall transfer moneys from the Surplus Account, to the extent of moneys on deposit therein and available for transfer, to and deposit such moneys in the Interest Account of the Bond Fund in an amount not to exceed the deficiency in the amount of other moneys which are on deposit in the Special Tax Fund, and available for transfer to and deposit in the Interest Account to pay the full amount of the interest on the Bonds which is due and payable on such Interest Payment Date. On or before the September 1 Interest Payment Date in each Bond Year, if the amount of other moneys which is on deposit in the Special Tax Fund is less than the amount of the interest on and principal of the Bonds which
4.2.b
Packet Pg. 626 Attachment: Fiscal Agent Agreement (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) 24 is due on such Interest Payment Date, the Fiscal Agent shall transfer moneys from the Surplus Account, to the extent of moneys on deposit therein and available for transfer, to and deposit such moneys in the Interest Account and the Principal Account in amounts not to exceed the amount of the deficiency in the amount of other moneys which are on deposit in the Special Tax Fund, and available for transfer, to pay the full amount of the interest on and principal of the Bonds which is due and payable on such Interest Payment Date. On or before May 30 of each year, commencing on May 30, 2027 the Fiscal Agent shall notify the City of the amount which is then on deposit in the Surplus Account and of the aggregate amount of the principal of and interest on the Bonds which will become due and payable on March 1 and September 1 of the following calendar year.
On September 2 of each year, beginning on September 2, 2026, the amount, if any, on deposit in the Special Tax Fund (including the amount on deposit in the Surplus Account), together with the amount then on deposit in the Principal Account of the Bond Fund (but not including, however, the amounts, if any, then on deposit in the Interest Account or the Special Tax Prepayments Account), as determined by the City, shall not exceed the greater of (i) one year’s earnings on such amounts, or (ii) one-twelfth (1/12th) of Annual Debt Service for the then current Bond Year. If on September 2 of any year the amount on deposit in the Special Tax Fund (including the Surplus Account), together with the amount then on deposit in the Principal Account, exceeds the maximum amount allowable pursuant to the preceding sentence, as determined by the City and communicated in writing by an Authorized Officer to the Fiscal Agent (upon which the Fiscal Agent may conclusively rely), then such amount shall be transferred from the Special Tax Fund to and deposited in the Reserve Fund to the extent that the amount on deposit therein is less than the Reserve Requirement. Any such excess remaining in the Special Tax Fund after any such amount is transferred from the Special Tax Fund to the Reserve Fund shall be transferred from the Special Tax Fund to and deposited in the Administrative Expense Fund. On September 2 of each year, after any such excess amount has been transferred as hereinabove provided, the amount on deposit in the Special Tax Fund (including the Surplus Account), together with the amount then on deposit in the Bond Fund (other than such excluded amounts), shall not exceed in the aggregate the greater of (i) one year’s earnings thereon, or (ii) one-twelfth (1/12th) of Annual Debt Service for the then current Bond Year. The Fiscal Agent shall have no obligation to monitor the City’s obligations as set forth in this paragraph. (C) Investment. Moneys in the Special Tax Fund shall be invested and deposited in accordance with Section 6.01 hereof. Investment Earnings shall be retained in the Special Tax Fund to be used for the purposes of such accounts.
Section 3.04. Administrative Expense Fund.
(A) Creation of Administrative Expense Fund. There is hereby established, as a separate fund to be held by the Fiscal Agent, the “City of San Jacinto Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2) Special Tax Bonds Administrative Expense Fund” to the credit of which deposits shall be made as required by Section 3.02(B)(i) hereof. Moneys in the Administrative Expense Fund shall be held by the Fiscal Agent for the benefit of the City, and shall be disbursed as provided below.
(B) Disbursement. Amounts in the Administrative Expense Fund shall be withdrawn by the Fiscal Agent and paid to the City or its order upon receipt by the Fiscal Agent of an Officer’s
4.2.b
Packet Pg. 627 Attachment: Fiscal Agent Agreement (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) 25 Certificate stating the amount to be withdrawn, that such amount is to be used to pay an Administrative Expense and the nature of such Administrative Expense.
Annually, not later than the last day of each Fiscal Year, the Fiscal Agent shall withdraw any amount then remaining in the Administrative Expense Fund that has not been allocated by an Officer’s Certificate received by the Fiscal Agent from the City to pay Administrative Expenses which are expected to be incurred in the succeeding Fiscal Year prior to the receipt by the City of Special Tax Revenues for such succeeding Fiscal Year and transfer such amount to the Surplus Account.
(C) Investment. Subject to the provisions of subsection (B) above, moneys in the Administrative Expense Fund shall be invested and deposited in accordance with Section 6.01 hereof. Investment Earnings shall be retained by the Fiscal Agent in the Administrative Expense Fund to be used for the purposes of such fund.
Section 3.05. Costs of Issuance Fund.
(A) Creation of Costs of Issuance Fund. There is hereby established, as a separate account to be held by the Fiscal Agent, the “City of San Jacinto Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2) Special Tax Bonds Costs of Issuance Fund” to the credit of which a deposit shall be made as required by Section 3.02(A)(ii) hereof. Moneys in the Cost of Issuance Fund shall be held by the Fiscal Agent and shall be disbursed as provided in subsection (B) of this Section for the payment or reimbursement of Costs of Issuance. (B) Disbursement. Amounts in the Costs of Issuance Fund shall be disbursed to pay Costs of Issuance, as set forth in a requisition containing respective amounts to be paid to the designated payees, signed by an Authorized Officer and delivered to the Fiscal Agent on the Closing Date. The Fiscal Agent shall pay all Costs of Issuance upon receipt of an invoice from any such payee which requests payment in an amount which is less than or equal to the amount set forth with respect to such payee in such requisition, or upon receipt of an Officer’s Certificate requesting payment of a Cost of Issuance not listed on the initial requisition delivered to the Fiscal Agent on the Closing Date. The Fiscal Agent shall maintain the Costs of Issuance Fund for a period of ninety (90) days from the Closing Date and shall then transfer and deposit any moneys remaining therein, including any Investment Earnings thereon, to the Special Tax Fund. (C) Investment. Moneys in the Costs of Issuance Fund shall be invested and deposited in accordance with Section 6.01 hereof. Investment Earnings shall be retained by the Fiscal Agent in the Cost of Issuance Fund to be used for the purposes of such fund.
ARTICLE IV
SPECIAL TAX REVENUES; BOND FUND;
RESERVE FUND
Section 4.01. Pledge of Special Tax Revenues. The Bonds shall be secured by a first and prior pledge of and lien upon (which shall be perfected in the manner and to the extent herein provided) all of the Special Tax Revenues, except the Priority Administrative Expense Amount, all moneys on deposit in the Principal Account and the Interest Account of the Bond Fund, all
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Packet Pg. 628 Attachment: Fiscal Agent Agreement (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) 26 moneys on deposit in the Surplus Account of the Special Tax Fund, the Special Tax Prepayments Account for the purpose of redeeming Bonds, and all moneys on deposit in the Reserve Fund. The Bonds shall be equally secured by a pledge of and lien upon the Special Tax Revenues and such moneys without priority for number, date of Bond, date of execution or date of delivery; and the payment of the interest on and principal of the Bonds and any premium upon the redemption of any thereof shall be and is secured by a first and prior pledge of and lien upon the Special Tax Revenues and such moneys. The Special Tax Revenues and all moneys on deposit in such funds and accounts are hereby dedicated in their entirety to the payment of the principal of the Bonds, and interest and any premium on, the Bonds, as provided herein and in the Act, until all of the Bonds have been paid and retired or until moneys or Defeasance Securities have been set aside irrevocably for that purpose in accordance with Section 11.03 hereof.
Section 4.02. Bond Fund.
(A) Deposits. There is hereby established, as a separate account to be held by the Fiscal Agent, the “City of San Jacinto Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2) Special Tax Bonds Bond Fund” to the credit of which deposits shall be made as required by Section 3.03(B) and Section 4.03 hereof and any other provision of this Agreement or the Act.
There is hereby established in the Bond Fund, as separate accounts to be held by the Fiscal Agent, the “Interest Account” and the “Principal Account.” The Fiscal Agent is hereby authorized to establish in the Bond Fund, when needed as a separate account to be held by the Fiscal Agent, the “Special Tax Prepayments Account” to the credit of which deposits shall be made as required by Section 3.03(A) hereof and paragraph (2) of subsection (B) below. Moneys in the Bond Fund shall be held by the Fiscal Agent for the benefit of the Owners of the Bonds, shall be disbursed for the payment of the principal of, and interest and any premium on, the Bonds as provided below, and, pending such disbursement, shall be subject to a lien in favor of the Owners of the Bonds. (B) Disbursements.
(1) Bond Fund Disbursements. Not later than five (5) Business Days before each Interest Payment Date, the Fiscal Agent shall transfer from the Special Tax Fund (including the Surplus Account) and deposit into the following respective accounts in the Bond Fund the following amounts in the following order of priority, the requirements of each such account (including the making up of any deficiencies in any such account resulting from lack of Special Tax Revenues sufficient to make any earlier required deposit) at the time of deposit to be satisfied before any transfer is made to any account subsequent in priority:
(a) Interest Account. Not later than five (5) Business Days before each Interest Payment Date, the Fiscal Agent shall deposit in the Interest Account the amount required to cause the aggregate amount on deposit in the Interest Account to equal the amount of interest becoming due and payable on the Bonds on such date. No deposit need be made into the Interest Account on any Interest Payment Date if the amount on deposit therein is at least equal to the interest becoming due and payable on the Bonds on such date. All moneys in the Interest Account shall be used and withdrawn by the Fiscal Agent solely for the purpose of paying the interest on the Bonds as it shall become due and payable (including accrued interest
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Packet Pg. 629 Attachment: Fiscal Agent Agreement (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) 27 on any Bonds redeemed prior to maturity). All amounts on deposit in the Interest Account on the first day of any Bond Year, to the extent not required to pay any interest then having become due and payable on the Outstanding Bonds, shall be withdrawn therefrom by the Fiscal Agent and transferred to the Surplus Account. (b) Principal Account. Not later than five (5) Business Days before each Interest Payment Date which occurs on September 1, the Fiscal Agent shall deposit in the Principal Account the amount required to cause the aggregate amount on deposit in the Principal Account to equal the principal amount of the Bonds becoming due and payable on such Interest Payment Date pursuant to Section 2.02 hereof, or the redemption price of the Bonds (consisting of the principal amount thereof and any applicable redemption premium) required to be redeemed on such date pursuant to any of the provisions of Section 2.03 hereof. All moneys in the Principal Account shall be used and withdrawn by the Fiscal Agent solely for the purpose of (i) paying the principal of the Bonds at the maturity thereof, or (ii) paying the principal of and premium (if any) on any Bonds upon the redemption thereof pursuant to Section 2.03 hereof. All amounts on deposit in the Principal Account on the first day of any Bond Year (i.e., September 2), to the extent not required to pay the principal of any Outstanding Bonds then having become due and payable on the Outstanding Bonds shall be withdrawn therefrom by the Fiscal Agent and transferred to the Surplus Account.
In the event that moneys on deposit in the Special Tax Fund, including moneys on deposit in the Surplus Account, will be insufficient on any Interest Payment Date for the Fiscal Agent to deposit the required amounts in the Interest Account and the Principal Account, as provided above, the Fiscal Agent shall deposit the available funds first to the Interest Account up to the full amount required to cause the aggregate amount on deposit therein to equal the amount of interest becoming due and payable on the Bonds on the Interest Payment Date, and shall then deposit the remaining available funds in the Special Tax Fund, including funds on deposit in the Surplus Account, to the Principal Account up to the full amount required to cause the aggregate amount on deposit therein to equal the amount, if any, of principal becoming due and payable on the Bonds on the Interest Payment Date. If, after making such deposits to the Interest Account and the Principal Account, and after transferring moneys from the Reserve Fund to such accounts, as provided in Section 4.03(B) hereof, the amount on deposit in the Principal Account is insufficient to pay the full amount of the principal of each of the Bonds which is to be redeemed on the Interest Payment Date, the Fiscal Agent shall make a prorated payment of the principal of each of such Bonds as specified in an Officer’s Certificate provided to the Fiscal Agent.
On September 2 of each year, beginning on September 2, 2026 the amount, if any, on deposit in the Principal Account (but not including, however, the amounts, if any, on deposit in the Interest Account and the Special Tax Prepayments Account), as determined by the City, together with the amount then on deposit in the Special Tax Fund (including the Surplus Account), shall not exceed the greater of (i) one year’s earnings on such amounts, or (ii) one-twelfth (1/12th) of Annual Debt Service for the then current Bond Year. If on September 2 of any year the amount on deposit in the Principal Account,
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Packet Pg. 630 Attachment: Fiscal Agent Agreement (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) 28 together with the amounts then on deposit in the Special Tax Fund (including the Surplus Account), exceeds the maximum amount allowable pursuant to the preceding sentence, the excess shall be transferred by the Fiscal Agent, as directed in writing by the City (upon which the Fiscal Agent may conclusively rely), to the Reserve Fund to the extent that the amount on deposit therein is less than the Reserve Requirement, and any such excess remaining thereafter shall be transferred by the Fiscal Agent to the Administrative Expense Fund. On September 2 of each year, after any such excess amount has been transferred as hereinabove provided, the amount on deposit in the Principal Account, together with the amount then on deposit in the Special Tax Fund (including the Surplus Account), shall not exceed the greater of (i) one year’s earnings thereon, or (ii) one-twelfth (1/12th) of Annual Debt Service for the then current Bond Year. The Fiscal Agent shall have no obligation to monitor the City’s obligations as set forth in this paragraph. (2) Special Tax Prepayments Account Deposits and Disbursements. Within ten (10) Business Days after receiving a Special Tax Prepayment, the City shall deliver the amount thereof to the Fiscal Agent, together with an Officer’s Certificate notifying the Fiscal Agent that the amount being delivered is a Special Tax Prepayment which is to be deposited in the Special Tax Prepayments Account. Upon receiving a Special Tax Prepayment from the City and such an Officer’s Certificate, the Fiscal Agent shall deposit the amount of the Special Tax Prepayment in the Special Tax Prepayments Account. Such an Officer’s Certificate may be combined with the Officer’s Certificate which the City is required to deliver to the Fiscal Agent pursuant to Section 4.03(F) hereof. A portion of the moneys on deposit in the Special Tax Prepayments Account shall be transferred by the Fiscal Agent, upon receipt of an Officer’s Certificate directing such transfer and specifying the amount to be transferred (upon which the Fiscal Agent may conclusively rely), to the Principal Account on the next date for which notice of the redemption of the Bonds can timely be given under Section 2.03(F) hereof and shall be used to redeem the Bonds on the redemption date selected in accordance with Section 2.03(B) hereof. The portion of the moneys on deposit in the Special Tax Prepayments Account representing funded interest on a portion of the Outstanding Bonds shall be transferred by the Fiscal Agent, upon receipt of an Officer’s Certificate directing such transfer and specifying the amount to be transferred (upon which the Fiscal Agent may conclusively rely), to the Interest Account on or before each Interest Payment Date prior to and including the Interest Payment Date on which the redemption of such Bonds will occur. Pending such transfers, the moneys on deposit in the Special Tax Prepayments Account shall be invested in Permitted Investments of such type. Investment Earnings from such Permitted Investments shall be retained by the Fiscal Agent in the Special Tax Prepayments Account. (C) Investment. Moneys in the Bond Fund, including all accounts therein, shall be invested and deposited in accordance with Section 6.01 hereof. Investment Earnings shall be retained in the Bond Fund, except to the extent they are required to be deposited by the Fiscal Agent in the Rebate Fund in accordance with Section 6.02 hereof. Investment earnings with respect to moneys in the Special Tax Prepayments Account shall be retained therein as specified in paragraph (2) of subsection (B) above.
Section 4.03. Reserve Fund.
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Packet Pg. 631 Attachment: Fiscal Agent Agreement (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) 29 (A) Creation of Fund. There is hereby established, as a separate account to be held by the Fiscal Agent, the “City of San Jacinto Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2) Special Tax Bonds Reserve Fund” to the credit of which a deposit shall be made as required by paragraph (A) of Section 3.02 hereof, which deposit is equal to the Reserve Requirement, and to which deposits shall be made as provided in Section 3.03(B) hereof. Moneys in the Reserve Fund shall be held by the Fiscal Agent for the benefit of the Owners of the Bonds as a reserve for the payment of the principal of and interest and any premium on the Bonds and shall be subject to a lien in favor of the Owners of the Bonds. (B) Use of Fund. Except as otherwise provided in this Section, all amounts on deposit in the Reserve Fund shall be used and withdrawn by the Fiscal Agent solely for the purpose of making transfers to the Interest Account and the Principal Account of the Bond Fund in the event of any deficiency at any time in either of such accounts of the amount then required for payment of the principal of and interest and any premium on the Bonds or, in accordance with the provisions of subsection (D) and subsection (G) of this Section 4.03, for the purpose of redeeming Bonds. (C) Transfer Due to Deficiency in Interest and Principal Accounts. Whenever transfer is made from the Reserve Fund to the Interest Account or the Principal Account due to a deficiency in either such account, the Fiscal Agent shall provide written notice thereof to the City. (D) Transfer of Excess of Reserve Requirement. Whenever, on any September 2, the amount in the Reserve Fund, less Investment Earnings resulting from the investment of the funds therein which pursuant to Section 6.02 hereof must be rebated to the United States, exceeds the Reserve Requirement, the Fiscal Agent shall provide written notice to the City of the amount of the excess. The Fiscal Agent shall, unless notified otherwise by an Authorized Officer that such amounts are to be transferred to the Rebate Fund pursuant to the requirements of Section 6.02 hereof, transfer an amount from the Reserve Fund which will reduce the amount on deposit therein to an amount equal to the Reserve Requirement to the Interest Account and the Principal Account, in the priority specified in Section 4.02(B)(1)(a) and (b) hereof, to be used for the payment of the interest on and principal of the Bonds on the next succeeding Interest Payment Date in accordance with Section 4.02 hereof.
(E) Transfer When Balance Exceeds Outstanding Bonds. Whenever the balance in the Reserve Fund is equal to or exceeds the amount required to redeem or pay the Outstanding Bonds, including interest accrued to the date of payment or redemption and premium, if any, due upon redemption, the Fiscal Agent shall, upon receiving written direction from an Authorized Officer (upon which the Fiscal Agent may conclusively rely), transfer the amount in the Reserve Fund to the Interest Account and the Principal Account to be applied, on the next succeeding Interest Payment Date, to the payment and redemption, in accordance with Section 2.03 and Section 4.02 hereof, as applicable, of all of the Outstanding Bonds. In the event that the amount available to be so transferred from the Reserve Fund to the Interest Account and the Principal Account exceeds the amount required to pay and redeem the Outstanding Bonds, the excess shall be transferred to the City to be used for any lawful purpose of the City. (F) Transfers on Payment of Special Tax Obligations. Whenever the City receives a Special Tax Prepayment for a lot or parcel of property within the District, the City shall by an Officer’s Certificate notify the Fiscal Agent thereof and of the amount by which the Reserve Fund
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Packet Pg. 632 Attachment: Fiscal Agent Agreement (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) 30 is to be reduced and which is transferable from the Reserve Fund to the Principal Account of the Bond Fund, which amount shall be specified in the Officer’s Certificate. Each such Officer’s Certificate shall be accompanied by a report of an Independent Financial Consultant or the Special Tax Consultant verifying the accuracy of the calculation of the amount to be transferred from the Reserve Fund to the Principal Account (“Verification”). Upon receipt of each such Officer’s Certificate and Verification, upon which the Fiscal Agent may conclusively rely, the Fiscal Agent shall at such time as the amount of such Special Tax Prepayment will be used to redeem Bonds, as provided in Section 4.02(B)(2) hereof, transfer the amount specified in such Officer’s Certificate to the Principal Account and use such amount, together with the amount of such Special Tax Prepayment, to redeem Bonds, as provided in Section 4.02(B)(2) hereof. Notwithstanding the preceding provisions of this subsection, no amount shall be transferred from the Reserve Fund to the Principal Account if the amount on deposit in the Reserve Fund is, or as a result of such transfer would be, less than the Reserve Requirement.
(G) [Reserve Fund Changes. The prior written consent of Insurer shall be a condition precedent to the deposit of any credit instrument provided in lieu of a cash deposit into the Reserve Fund, if any. Amounts on deposit in the Reserve Fund shall be applied solely to the payment of debt service due on the Bonds.]
(H) Investments. Moneys on deposit in the Reserve Fund shall be invested, as directed in writing by an Authorized Officer, in Permitted Investments which do not have maturities extending beyond five (5) years; provided, however, if the Reserve Fund is invested in an investment agreement (as defined in clause (vii) of the definition of Permitted Investments in Section 1.03 hereof) or a repurchase agreement (as defined in clause (xi) of such definition) such agreement may have a maturity longer than five (5) years if the Fiscal Agent is authorized by the provisions of such agreement to draw the full amount thereof, without penalty, if required for the purposes of the Reserve Fund. The City shall cause the Permitted Investments, other than such investment agreements, in which moneys on deposit in the Reserve Fund are invested to be valued at fair market value and marked-to-market at least once in each Fiscal Year.
ARTICLE V
OTHER COVENANTS OF THE CITY
Section 5.01. Punctual Payment. The City will punctually pay or cause to be paid the principal of and interest and any premium on the Bonds when and as due in strict conformity with the terms of this Agreement and any Supplemental Agreement to the extent that the Special Tax Revenues are available therefor, and it will faithfully observe and perform all of the conditions, covenants and requirements of this Agreement and all Supplemental Agreements and of the Bonds.
Section 5.02. Special Obligation. The Bonds are special obligations of the City and the District and are payable solely from and secured solely by the Special Tax Revenues and the amounts in the Bond Fund, the Reserve Fund and the Special Tax Fund, including the Surplus Account.
Section 5.03. Extension of Time for Payment. In order to prevent any accumulation of claims for interest after maturity, the City shall not, directly or indirectly, extend or consent to the
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Packet Pg. 633 Attachment: Fiscal Agent Agreement (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) 31 extension of the time for the payment of any claim for interest on any of the Bonds and shall not, directly or indirectly, be a party to the approval of any such arrangement by purchasing or funding said claims for interest or in any other manner. In case any such claim for interest shall be extended or funded, whether or not with the consent of the City, such claim for interest so extended or funded shall not be entitled, in case of default hereunder, to the benefits of this Agreement, except subject to the prior payment in full of the principal of all of the Bonds then Outstanding and of all claims for interest which shall not have been so extended or funded.
Section 5.04. Against Encumbrances. The City shall not encumber, pledge or place any charge or lien upon any of the Special Tax Revenues or other amounts pledged to the Bonds superior to or on a parity with the pledge and lien herein created for the benefit of the Bonds, except as permitted by this Agreement.
Section 5.05. Books and Accounts. The City shall keep, or cause to be kept, proper books of record and accounts, separate from all other records and accounts of the City in which complete and correct entries shall be made of all transactions relating to the expenditure of amounts disbursed from the Administrative Expense Fund. Such books of record and accounts shall at all times during business hours, upon reasonable notice, be subject to the inspection of the Fiscal Agent (which shall have no duty to inspect) and the Owners of not less than ten percent (10%) of the aggregate principal amount of the Bonds then Outstanding, or their representatives duly authorized in writing.
Section 5.06. Protection of Security and Rights of Owners. The City will preserve and protect the security of the Bonds and the rights of the Owners, and will warrant and defend their rights against all claims and demands of all persons. From and after the delivery of any of the Bonds by the City, the Bonds shall be incontestable by the City.
Section 5.07. Collection of Special Tax Revenues. The City shall comply with all requirements of the Act, including the enactment of necessary Ordinances, so as to assure the timely collection of Special Tax Revenues, including without limitation, the enforcement of the payment or collection of delinquent Special Taxes.
On or within five (5) Business Days of June 1 of each year, the Fiscal Agent shall provide the City with a notice stating the amount then on deposit in the Special Tax Fund, the Bond Fund and the Reserve Fund (including all accounts and sub-accounts therein), the monthly statements provided by the Fiscal Agent shall satisfy this notice requirement. The receipt of such notice by the City or the failure of the Fiscal Agent to give such notice shall in no way affect the obligations of the City under the following two paragraphs. The Fiscal Agent shall have no liability if it does not provide such notice to the City. Upon receipt of such notice, the City shall communicate with the Auditor to ascertain the relevant parcels on which the Special Taxes are to be levied, taking into account any parcel splits during the preceding and then current Fiscal Year.
The City shall effect the levy of the Special Taxes each Fiscal Year in accordance with the Act by August 10 of each year (or such later date as may be authorized by the Act or any amendment thereof) that the Bonds are Outstanding, such that the computation of the levy is complete before the final date on which the Auditor will accept the transmission of the Special Tax amounts for the parcels within the District for inclusion on the tax roll for the Fiscal Year then
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Packet Pg. 634 Attachment: Fiscal Agent Agreement (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) 32 beginning. Upon the completion of the computation of the amounts of the levy of the Special Taxes, the City shall prepare or cause to be prepared, and shall transmit to the Auditor, such data as the Auditor requires to include the levy of the Special Taxes on the tax roll. Notwithstanding the preceding provisions of this paragraph, the City Council may elect, as permitted by the Act, to collect the Special Taxes to be levied for any Fiscal Year directly from the owners of the parcels of taxable property upon which the Special Taxes are levied rather than by transmitting the amount of the Special Taxes to the Auditor for collection on the tax roll; provided that, in such event, the City shall otherwise comply with the provisions of this Section 5.07.
The City shall fix and levy the amount of Special Taxes within the District required for the payment of the principal of and interest on any Outstanding Bonds becoming due and payable during the ensuing calendar year, including any necessary replenishment or expenditure of the Reserve Fund, and the amount estimated to be sufficient to pay the Administrative Expenses during such calendar year. The Special Taxes so levied shall not, in any event, exceed the maximum amounts provided for in the Rate and Method of Apportionment of Special Tax.
The Special Taxes shall be payable and be collected (except in the event of judicial foreclosure proceedings pursuant to Section 5.11 hereof) in the same manner and at the same time and in the same installments as the general taxes on real property are payable, and have the same priority, become delinquent at the same times and in the same proportionate amounts and bear the same proportionate penalties and interest after delinquency as do the general taxes on real property.
The City will not, in collecting the Special Taxes or in processing any such judicial foreclosure proceedings, exercise any authority which it has pursuant to Sections 53340, 53344.1, 53356.1 and 53356.8 of the California Government Code in any manner which would materially and adversely affect the interests of the Bondowners and, in particular, will not permit the tender of Bonds in full or partial payment of any Special Taxes except upon receipt of a certificate of an Independent Financial Consultant that to accept such tender will not result in the City having insufficient Special Tax Revenues to pay the principal of and interest on the Bonds remaining Outstanding following such tender.
Section 5.08. Reduction of Maximum Special Tax Rates. The City covenants that, to the extent that it is legally permitted to avoid doing so, it will not initiate and conduct proceedings to reduce the maximum rates of Special Taxes which are authorized to be levied on taxable parcels of property within the District (the “Maximum Rates”).
The City further covenants that in the event an ordinance is adopted by initiative pursuant to Section 3 of Article XIII C of the California Constitution, which purports to reduce or otherwise alter the Maximum Rates, it will commence and pursue legal action seeking to preserve its ability to comply with its covenant contained in the preceding paragraph.
Section 5.09. Further Assurances. The City will adopt, make, execute and deliver any and all such further ordinances, resolutions, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of this Agreement, and for better assuring and confirming unto the Owners of the Bonds of the rights and benefits provided in this Agreement.
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Packet Pg. 635 Attachment: Fiscal Agent Agreement (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) 33 Section 5.10. Tax Covenants. The City covenants that:
(A) It will not take any action or omit to take any action, which action or omission, if reasonably expected on the date of the initial issuance and delivery of the Bonds, would have caused any of the Bonds to be “arbitrage bonds” within the meaning of Section 103(b) and Section 148 of the Code;
(B) It will not take any action or omit to take any action, which action or omission, if reasonably expected on the date of initial issuance and delivery of the Bonds, would result in loss of exclusion from gross income for purposes of federal income taxation under Section 103(a) of the Code of interest paid with respect to the Bonds; (C) It will not take any action or omit to take any action, which action or omission, if reasonably expected on the date of initial issuance and delivery of the Bonds, would have caused any of the Bonds to be “private activity bonds” within the meaning of Section 141 of the Code;
(D) It will comply with the Rebate Certificate as a source of guidance for achieving compliance with the Code; and
(E) In order to maintain the exclusion from gross income for purposes of federal income taxation of interest paid with respect to the Bonds, it will comply with each applicable requirement of Section 103 and Sections 141 through 150 of the Code.
The covenants of the City contained in this Section 5.10 shall survive the payment, redemption or defeasance of Bonds pursuant to Section 11.03 hereof.
Section 5.11. Covenant to Foreclose. Pursuant to Section 53356.1 of the California Government Code, the City covenants with and for the benefit of the Owners of the Bonds that:
(i) it will order, and cause to be commenced, judicial foreclosure proceedings against properties in the District with delinquent Special Taxes in excess of $5,000 by the October 1 following the close of the Fiscal Year in which such Special Taxes were due, and (ii) if the amount on deposit in the Reserve Fund is less than the Reserve Requirement it will commence judicial foreclosure proceedings against all properties in the District with delinquent Special Taxes by the October 1 following the close of each Fiscal Year in which it receives Special Taxes in an amount which is less than ninety-five percent (95%) of the total Special Taxes levied, and diligently pursue to completion such foreclosure proceedings.
Section 5.12. Prepayment of Special Taxes. The City shall cause all applications of owners of property in the District to prepay and satisfy the Special Tax obligation for their property to be reviewed by the Special Tax Consultant and shall not accept any such prepayment unless such consultant certifies in writing that the total amount of the Maximum Special Tax for Debt Service and Facilities (as defined in the Rate and Method of Apportionment of Special Tax) that may be levied on Taxable Developed Property both prior to and after the proposed prepayment is and will be at least 1.10 times the amount of Annual Debt Service on all Outstanding Bonds plus the Priority Administrative Expense Amount in the current or future year. For purposes of this Section, Taxable Property means all parcels of property in the District that are not exempt from
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Packet Pg. 636 Attachment: Fiscal Agent Agreement (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) 34 the levy of the Special Tax pursuant to the Act or the Rate and Method of Apportionment of Special Tax.
Section 5.13. Calculation of Prepayments. The City will cause all Special Tax Prepayments to be calculated to include the amount of the premium on the Outstanding Bonds that will be redeemed with the Special Tax Prepayment. The City will not include in any calculation of the amount of any Special Tax Prepayment for any parcel of taxable property in the District a proportionate amount of the amount then on deposit in the Reserve Fund, if or to the extent such a credit would cause the amount on deposit in the Reserve Fund following such prepayment to be less than the Reserve Requirement.
Section 5.14. Continuing Disclosure. The City hereby covenants that it will comply with and carry out all of the provisions of the Continuing Disclosure Certificate.
Section 5.15. Accountability Measures. The City shall comply with the requirements of Section 53410 of the California Government Code with respect to the deposit and expenditure of the Proceeds of the sale of the Bonds and shall cause the appropriate officer of the City to file a report with the City Council no later than January 2, 2027, and annually thereafter, which shall contain the information required by Section 53411 of the California Government Code with respect to the expenditure of the Proceeds.
ARTICLE VI
INVESTMENTS; DISPOSITION OF INVESTMENT PROCEEDS;
LIABILITY OF THE SERVICES DISTRICT
Section 6.01. Deposit and Investment of Moneys in Funds. Subject in all respects to the provisions of Section 6.02 hereof, moneys in any fund or account created or established by this Agreement and held by the Fiscal Agent shall be invested by the Fiscal Agent in Permitted Investments, as directed pursuant to an Officer’s Certificate filed with the Fiscal Agent at least two (2) Business Days in advance of the making of such investments. In the absence of any such Officer’s Certificate, the Fiscal Agent shall hold such moneys uninvested. The Fiscal Agent shall not have any responsibility for determining the legality of any Permitted Investments. The Fiscal Agent shall have no obligation to pay additional interest or maximize investment income on any funds held by it. Neither the City nor the Owners of the Bonds shall have any claim of any kind against the Fiscal Agent in connection with investments properly made pursuant to this Section
6.01. Obligations purchased as an investment of moneys in any fund or account shall be deemed to be part of such fund or account, subject, however, to the requirements of this Agreement for transfer of Investment Earnings in funds and accounts.
The Fiscal Agent and its affiliates may act as sponsor, advisor, depository, principal or agent in the holding, acquisition or disposition of any investment. The Fiscal Agent shall not incur any liability for losses arising from any investments made pursuant to this Section 6.01. For purposes of determining the amount on deposit in any fund or account held hereunder, all Permitted Investments credited to such fund or account shall be valued at the cost thereof (excluding accrued interest and brokerage commissions, if any).
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Packet Pg. 637 Attachment: Fiscal Agent Agreement (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) 35 Subject in all respects to the provisions of Section 6.02 hereof, investments in any and all funds and accounts may be commingled in a single fund for purposes of making, holding and disposing of investments, notwithstanding provisions herein for transfer to or holding in or to the credit of particular funds or accounts of amounts received or held by the Fiscal Agent hereunder, provided that the Fiscal Agent shall at all times account for such investments strictly in accordance with the funds and accounts to which they are credited and otherwise as provided in this Agreement.
The Fiscal Agent shall sell or present for redemption, any investment security whenever it shall be necessary to provide moneys to meet any required payment, transfer, withdrawal or disbursement from the fund or account to which such investment security is credited, and the Fiscal Agent shall not be liable or responsible for any loss resulting from the acquisition or disposition of any such investment security in accordance herewith.
The City acknowledges that to the extent regulations of the Comptroller of the Currency or other applicable regulatory entity grant the City or the District the right to receive brokerage confirmations of securities transactions as they occur, at no additional cost, the City for itself and the District specifically waives receipt of such confirmations to the extent permitted by law. The Fiscal Agent shall furnish the City periodic cash transaction statements which include detail for all investment transactions made by the Fiscal Agent hereunder.
The Fiscal Agent may make any investments hereunder through its own bond or investment department or trust investment department, or those of its parent or any affiliate.
Section 6.02. Rebate Fund; Rebate to the United States. The Fiscal Agent is hereby authorized to create, when needed, the Rebate Fund to be held by the Fiscal Agent as a separate account distinct from all other funds and accounts held by the Fiscal Agent under this Agreement.
The Fiscal Agent shall, in accordance with written directions received from an Authorized Officer, deposit into the Rebate Fund moneys transferred by the City to the Fiscal Agent pursuant to the Rebate Certificate or moneys transferred by the Fiscal Agent from the Bond Fund or the Reserve Fund. The Rebate Fund shall be held either uninvested or invested only in Federal Securities at the written direction of the City. Moneys on deposit in the Rebate Fund shall be applied only to payments made to the United States, to the extent such payments are required by the Rebate Certificate. The Fiscal Agent shall, upon written request and direction of the City, make such payments to the United States.
The Fiscal may rely conclusively upon the City’s determinations, calculations and certifications required by this Section. The Fiscal Agent shall have no responsibility to independently make any calculation or determination or to review the City’s calculations hereunder. The Fiscal Agent’s sole responsibilities under this Section are to follow the written instructions of the City pertaining hereto. The City shall be responsible for any fees and expenses incurred by the Fiscal Agent pursuant to this Section 6.02.
The Fiscal Agent shall be deemed conclusively to have complied with the provisions of this Section and the Tax Certificate if it follows the written request of the City, including supplying all necessary information in the manner provided in a tax certificate executed by the City (the “Tax Certificate”), and except as otherwise expressly provided herein, shall not be required to take any
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Packet Pg. 638 Attachment: Fiscal Agent Agreement (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) 36 actions hereunder in the absence of written directions by the City, and shall have no liability or responsibility to enforce compliance by the City with the terms of the Tax Certificate or this Section.
The Fiscal Agent shall, upon written request and direction from the City, transfer to or upon the order of the City any moneys on deposit in the Rebate Fund in excess of the amount, if any, required to be maintained or held therein in accordance with the Rebate Certificate.
Section 6.03. Liability of the City. The City shall not incur any responsibility in respect of the Bonds or this Agreement other than in connection with the duties or obligations explicitly herein or in the Bonds assigned to or imposed upon it. The City shall not be liable in connection with the performance of its duties hereunder, except for its own negligence or willful default. The City shall not be bound to ascertain or inquire as to the performance or observance of any of the terms, conditions, covenants or agreements of the Fiscal Agent herein or of any of the documents executed by the Fiscal Agent in connection with the Bonds.
In the absence of bad faith, the City may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the City and conforming to the requirements of this Agreement. The City shall not be liable for any error of judgment made in good faith unless it shall be proved that it was negligent in ascertaining the pertinent facts.
No provision of this Agreement shall require the City to expend or risk its own general funds or otherwise incur any financial liability (other than with respect to the Special Tax Revenues) in the performance of any of its obligations hereunder, or in the exercise of and of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it.
The City may rely and shall be protected in acting or refraining from acting upon any notice, resolution, request, consent, order, certificate, report, warrant, Bond or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or proper parties. The City may consult with counsel, who may be counsel to the City, with regard to legal questions, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by it hereunder in good faith and in accordance therewith.
Whenever in the administration of its duties under this Agreement the City shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of willful misconduct on the part of the City, be deemed to be conclusively proved and established by a certificate of the Fiscal Agent, and such certificate shall be full warranty to the City for any action taken or suffered under the provisions of this Agreement or any Supplemental Agreement upon the faith thereof, but in its discretion the City may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as to it may seem reasonable.
4.2.b
Packet Pg. 639 Attachment: Fiscal Agent Agreement (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) 37 Section 6.04. Employment of Agents by City. In order to perform its duties and obligations hereunder, the City may employ such persons or entities as it deems necessary or advisable. The City shall not be liable for any of the acts or omissions of such persons or entities employed by it in good faith hereunder, and shall be entitled to rely, and shall be fully protected in doing so, upon the opinions, calculations, determinations and directions of such persons or entities.
ARTICLE VII
RESERVE POLICY
Section 7.01. Provisions related to the Reserve Policy. The following are provisions related to the Reserve Policy, which shall govern, notwithstanding anything to the contrary set forth in this Fiscal Agent Agreement:
(A) The prior written consent of the Insurer shall be a condition precedent to the deposit of any credit facility (a "Credit Facility") credited to the Reserve Fund in substitution of the Reserve Policy or in lieu of a cash deposit into the Reserve Fund. Amounts drawn under the Reserve Policy shall be available only for the payment of scheduled principal and interest on the Bonds when due.
(B) The Issuer shall repay any draws under the Reserve Policy and pay all related reasonable expenses incurred by the Insurer and shall pay interest thereon from the date of payment by the Insurer at the Late Payment Rate. “Late Payment Rate” means the lesser of (x) the greater of (i) the per annum rate of interest, publicly announced from time to time by JPMorgan Chase Bank at its principal office in the City of New York, as its prime or base lending rate (“Prime Rate”) (any change in such Prime Rate to be effective on the date such change is announced by JPMorgan Chase Bank) plus 5%, and (ii) the then-applicable highest rate of interest on the Bonds and (y) the maximum rate permissible under applicable usury or similar laws limiting interest rates.
The Late Payment Rate shall be computed on the basis of the actual number of days elapsed over a year of 360 days. In the event JPMorgan Chase Bank ceases to announce its Prime Rate publicly, Prime Rate shall be the publicly announced prime or base lending rate of such national bank as the Insurer shall specify. If the interest provisions of this subparagraph (b) shall result in an effective rate of interest which, for any period, exceeds the limit of the usury or any other laws applicable to the indebtedness created herein, then all sums in excess of those lawfully collectible as interest for the period in question shall, without further agreement or notice between or by any party hereto, be applied as additional interest for any later periods of time when amounts are outstanding hereunder to the extent that interest otherwise due hereunder for such periods plus such additional interest would not exceed the limit of the usury or such other laws, and any excess shall be applied upon principal immediately upon receipt of such moneys by the Insurer, with the same force and effect as if the Issuer had specifically designated such extra sums to be so applied and the Insurer had agreed to accept such extra payment(s) as additional interest for such later periods. In no event shall any agreed-to or actual exaction as consideration for the indebtedness created herein exceed the limits imposed or provided by the law applicable to this transaction for the use or detention of money or for forbearance in seeking its collection.
4.2.b
Packet Pg. 640 Attachment: Fiscal Agent Agreement (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) 38 Repayment of draws and payment of expenses and accrued interest thereon at the Late Payment Rate (collectively, "Policy Costs") shall commence in the first month following each draw, and each such monthly payment shall be in an amount at least equal to 1/12 of the aggregate of Policy Costs related to such draw.
Amounts in respect of Policy Costs paid to the Insurer shall be credited first to interest due, then to the expenses due and then to principal due. As and to the extent that payments are made to the Insurer on account of principal due, the coverage under the Reserve Policy will be increased by a like amount, subject to the terms of the Reserve Policy. The obligation to pay Policy Costs shall be secured by a valid lien on all revenues and other collateral pledged as security for the Bonds (subject only to the priority of payment provisions set forth under the Fiscal Agent Agreement).
All cash and investments in the Reserve Fund shall be transferred to the debt service fund for payment of debt service on Bonds before any drawing may be made on the Reserve Policy or any other Credit Facility. Payment of any Policy Costs shall be made prior to replenishment of any such cash amounts. Draws on all Credit Facilities (including the Reserve Policy) on which there is available coverage shall be made on a pro-rata basis (calculated by reference to the coverage then available thereunder) after applying all available cash and investments in the Reserve Fund.
Payment of Policy Costs and reimbursement of amounts with respect to other Credit Facilities shall be made on a pro-rata basis prior to replenishment of any cash drawn from the Reserve Fund.
Repayment of all Policy Costs and the replenishment of the Reserve Fund shall be made on a pari passu basis with payments and replenishments required to be made under the Fiscal Agent Agreement with respect to debt service reserve funds, if any, securing any outstanding parity obligations. For the avoidance of doubt, “available coverage” means the coverage then available for disbursement pursuant to the terms of the applicable alternative credit instrument without regard to the legal or financial ability or willingness of the provider of such instrument to honor a claim or draw thereon or the failure of such provider to honor any such claim or draw. (C) Upon a failure to pay Policy Costs when due or any other breach of the terms of this Article VII, the Insurer shall be entitled to exercise any and all legal and equitable remedies available to it, including those provided under the Fiscal Agent Agreement, other than (i) acceleration of the maturity of the Bonds or (ii) remedies which would adversely affect owners of the Bonds.
(D) The Fiscal Agent Agreement shall not be discharged until all Policy Costs owing to the Insurer shall have been paid in full. The Issuer's obligation to pay such amounts shall expressly survive payment in full of the Bonds.
(E) The Issuer shall include any Policy Costs then due and owing the Insurer in the calculation of the additional bonds test and the rate covenant in the Fiscal Agent Agreement. (F) The Trustee shall ascertain the necessity for a claim upon the Reserve Policy in accordance with the provisions of paragraph (B) hereof and provide notice to the Insurer in accordance with the terms of the Reserve Policy at least five Business Days prior to each date upon which interest or principal is due on the Bonds. Where deposits are required to be made by the Issuer with the Trustee to the debt service fund for the Bonds more often than semi-annually, the
4.2.b
Packet Pg. 641 Attachment: Fiscal Agent Agreement (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) 39 Trustee shall give notice to the Insurer of any failure of the Issuer to make timely payment in full of such deposits within two Business Days of the date due. (G) The Issuer shall pay or reimburse the Insurer, solely from the Trust Estate, any and all charges, fees, costs, losses, liabilities and expenses which the Insurer may pay or incur, including, but not limited to, fees and expenses of attorneys, accountants, consultants and auditors and reasonable costs of investigations, in connection with (i) any accounts established to facilitate payments under the Reserve Policy, (ii) the administration, enforcement, defense or preservation of any rights in respect of the Fiscal Agent Agreement or any document executed in connection with the Bonds (the “Related Documents”), including defending, monitoring or participating in any litigation or proceeding (including any bankruptcy proceeding in respect of the Issuer) relating to Fiscal Agent Agreement or any other Related Document, any party to the Fiscal Agent Agreement or any other Related Document or the transactions contemplated by the Related Documents, (iii) the foreclosure against, sale or other disposition of any collateral securing any obligations under the Fiscal Agent Agreement or any other Related Document, if any, or the pursuit of any remedies under the Fiscal Agent Agreement or any other Related Document, to the extent such costs and expenses are not recovered from such foreclosure, sale or other disposition, (iv) any amendment, waiver or other action with respect to, or related to the Fiscal Agent Agreement, the Reserve Policy or any other Related Document whether or not executed or completed, or (v) any action taken by the Insurer to cure a default or termination or similar event (or to mitigate the effect thereof) under the Fiscal Agent Agreement or any other Related Document; costs and expenses shall include a reasonable allocation of compensation and overhead attributable to time of employees of the Insurer spent in connection with the actions described in clauses (ii) through (v) above. The Insurer reserves the right to charge a reasonable fee as a condition to executing any amendment, waiver or consent proposed in respect of the Fiscal Agent Agreement or any other Related Document. Amounts payable by the Issuer hereunder shall bear interest at the Late Payment Rate from the date such amount is paid or incurred by the Insurer until the date the Insurer is paid in full.
(H) The obligation of the Issuer to pay all amounts due to the Insurer shall be an absolute and unconditional obligation of the Issuer and will be paid or performed strictly in accordance with the provisions of this Article VII, irrespective of: (i) any lack of validity or enforceability of or any amendment or other modifications of, or waiver with respect to the Bonds, the Fiscal Agent Agreement or any other Related Document; (ii) any amendment or other modification of, or waiver with respect to the Reserve Policy; (iii) any exchange, release or nonperfection of any security interest in property securing the Bonds, the Fiscal Agent Agreement or any other Related Documents; (iv) whether or not such Bonds are contingent or matured, disputed or undisputed, liquidated or unliquidated; (v) any amendment, modification or waiver of or any consent to departure from the Reserve Policy, the Fiscal Agent Agreement or all or any of the other Related Documents; (vi) the existence of any claim, setoff, defense (other than the defense of payment in full), reduction, abatement or other right which the Issuer may have at any time against the Trustee or any other person or entity other than the Insurer, whether in connection with the transactions contemplated herein or in any other Related Documents or any unrelated transactions; (vii) any statement or any other document presented under or in connection with the Reserve Policy proving in any and all respects invalid, inaccurate, insufficient, fraudulent or forged or any statement therein being untrue or inaccurate in any respect; or (viii) any payment by the Insurer
4.2.b
Packet Pg. 642 Attachment: Fiscal Agent Agreement (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) 40 under the Reserve Policy against presentation of a certificate or other document which does not strictly comply with the terms of the Reserve Policy.
(I) The Issuer shall fully observe, perform, and fulfill each of the provisions (as each of those provisions may be amended, supplemented, modified or waived with the prior written consent of the Insurer) of the Fiscal Agent Agreement applicable to it, each of the provisions thereof being expressly incorporated into this Article VII by reference solely for the benefit of the Insurer as if set forth directly herein. No provision of the Fiscal Agent Agreement or any other Related Document shall be amended, supplemented, modified or waived, without the prior written consent of the Insurer, in any material respect or otherwise in a manner that could adversely affect the payment obligations of the Issuer hereunder or the priority accorded to the reimbursement of Policy Costs under the Fiscal Agent Agreement. The Insurer is hereby expressly made a thirdparty beneficiary of the Fiscal Agent Agreement and each other Related Document. (J) The Issuer covenants to provide to the Insurer, promptly upon request, any information regarding the Bonds or the financial condition and operations of the Issuer as reasonably requested by the Insurer. The Issuer will permit the Insurer to discuss the affairs, finances and accounts of the Issuer or any information the Insurer may reasonably request regarding the security for the Bonds with appropriate officers of the Issuer and will use commercially reasonable efforts to enable the Insurer to have access to the facilities, books and records of the Issuer on any Business Day upon reasonable prior notice. (K) Notices and other information to the Insurer shall be sent to the following address (or such other address as the Insurer may designate in writing):
[INSURER CONTACT INFORMATION] ]
ARTICLE VIII
THE FISCAL AGENT
Section 8.01. Appointment of Fiscal Agent. U.S. Bank Trust Company, National Association, is hereby appointed Fiscal Agent, registrar and paying agent for the Bonds. The Fiscal Agent undertakes to perform such duties, and only such duties, as are specifically set forth in this Agreement, and no implied covenants or obligations shall be read into this Agreement against the Fiscal Agent.
Any company into which the Fiscal Agent may be merged or converted or with which it may be consolidated or any company resulting from any merger, conversion or consolidation to which it shall be a party or any company to which the Fiscal Agent may sell or transfer all or substantially all of its corporate trust business, provided such company shall be eligible under the following paragraph of this Section 8.01, shall be the successor to the Fiscal Agent without the execution or filing of any paper or any further act, anything herein to the contrary notwithstanding.
The City may upon a 30-day notice of removal, remove the Fiscal Agent initially appointed, and any successor thereto, and may appoint a successor or successors thereto, but any such successor shall be a bank, national banking association, corporation or trust company having a combined capital (exclusive of borrowed capital) and surplus of at least $50,000,000, and subject
4.2.b
Packet Pg. 643 Attachment: Fiscal Agent Agreement (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) 41 to supervision or examination by federal or state authority. If such bank, national banking association, corporation or trust company publishes a report of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority above referred to, then for the purposes of this Section 8.01, the combined capital and surplus of such bank, national banking association, corporation or trust company shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published.
The Fiscal Agent may at any time resign by giving written notice to the City and by giving to the Owners notice by mail of such resignation. Upon receiving notice of such resignation, the City shall promptly appoint a successor Fiscal Agent by an instrument in writing. Any resignation or removal of the Fiscal Agent shall become effective upon acceptance of appointment by the successor Fiscal Agent.
If no appointment of a successor Fiscal Agent shall be made pursuant to the foregoing provisions of this Section 8.01 within forty-five (45) days after the Fiscal Agent shall have given to the City written notice or after a vacancy in the office of the Fiscal Agent shall have occurred by reason of its inability to act, the Fiscal Agent, at the expense of the City, or any Owner may apply to any court of competent jurisdiction to appoint a successor Fiscal Agent. Said court may thereupon, after such notice, if any, as such court may deem proper, appoint a successor Fiscal Agent.
Section 8.02. Liability of Fiscal Agent. The recitals of facts, covenants and agreements herein and in the Bonds contained shall be taken as statements, covenants and agreements of the City and the District, and the Fiscal Agent assumes no responsibility for the correctness of the same, nor makes any representations as to the validity or sufficiency of this Agreement or of the Bonds, nor shall the Fiscal Agent incur any responsibility in respect thereof, other than in connection with the duties or obligations herein or in the Bonds assigned to or imposed upon it.
The Fiscal Agent shall not be liable in connection with the performance of its duties hereunder, except for its own negligence or willful misconduct. The Fiscal Agent assumes no responsibility or liability for any information, statement or recital in any offering memorandum or other disclosure material prepared or distributed with respect to the issuance of the Bonds.
In the absence of bad faith, the Fiscal Agent may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Fiscal Agent and conforming to the requirements of this Agreement. Except as provided above in this paragraph, the Fiscal Agent shall be protected and shall incur no liability in acting or proceeding, or in not acting or not proceeding, in good faith, reasonably and in accordance with the terms of this Agreement, upon any resolution, order, notice, request, consent or waiver, certificate, statement, affidavit, or other paper or document which it shall in good faith reasonably believe to be genuine and to have been adopted or signed by the proper person or to have been prepared and furnished pursuant to any provision of this Agreement, and the Fiscal Agent shall not be under any duty to make any investigation or inquiry as to any statements contained or matters referred to in any such instrument.
The Fiscal Agent shall not be liable for any error of judgment made in good faith by the Fiscal Agent unless it shall be proved that the Fiscal Agent was negligent in ascertaining the pertinent facts.
4.2.b
Packet Pg. 644 Attachment: Fiscal Agent Agreement (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) 42 No provision of this Agreement shall require the Fiscal Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers.
The Fiscal Agent shall not be responsible for accounting for, or paying to, any party to this Agreement, including, but not limited to the City and the Owners, any returns on or benefit from funds held for payment of unredeemed Bonds or outstanding checks and no calculation of the same shall affect, or result in any offset against, fees due to the Fiscal Agent under this Agreement.
The Fiscal Agent shall be under no obligation to exercise any of the rights or powers vested in it by this Agreement at the request or direction of any of the Owners pursuant to this Agreement unless such Owners shall have offered to the Fiscal Agent reasonable security or indemnity satisfactory to it against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction.
The Fiscal Agent may become the owner of the Bonds with the same rights it would have if it were not the Fiscal Agent.
All indemnification and releases from liability granted herein to the Fiscal Agent shall extend to the directors, officers and employees of the Fiscal Agent.
The Fiscal 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, facsimile transmission, secure electronic transmission containing applicable authorization codes, passwords and/or authentication keys issued by the Fiscal Agent, or another method or system specified by the Fiscal Agent as available for use in connection with its services hereunder); provided, however, that the City shall provide to the Fiscal Agent an incumbency certificate listing the Authorized Officers with the authority to provide such Instructions and containing specimen signatures of such Authorized Officers, which incumbency certificate shall be amended by the City whenever a person is to be added or deleted from the listing. If the City elects to give the Fiscal Agent Instructions using Electronic Means and the Fiscal Agent in its discretion elects to act upon such Instructions, the Fiscal Agent’s understanding of such Instructions shall be deemed controlling. The City understands and agrees that the Fiscal Agent cannot determine the identity of the actual sender of such Instructions and that the Fiscal Agent shall conclusively presume that directions that purport to have been sent by an Authorized Officer listed on the incumbency certificate provided to the Fiscal Agent have been sent by such Authorized Officer. The City shall be responsible for ensuring that only Authorized Officers transmit such Instructions to the Fiscal Agent and that the City 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 City. The Fiscal Agent shall not be liable for any losses, costs or expenses arising directly or indirectly from the Fiscal Agent’s reliance upon and compliance with such Instructions notwithstanding such directions conflict or are inconsistent with a subsequent written instruction. The City agrees: (i) to assume all risks arising out of the use of Electronic Means to submit Instructions to the Fiscal Agent, including without limitation the risk of the Fiscal 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
4.2.b
Packet Pg. 645 Attachment: Fiscal Agent Agreement (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) 43 transmitting Instructions to the Fiscal Agent and that there may be more secure methods of transmitting Instructions than the method(s) selected by the City; (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 Fiscal Agent immediately upon learning of any compromise or unauthorized use of the security procedures.
The permissive right of the Fiscal Agent to do things enumerated in this Agreement shall not be construed as a duty and it shall not be answerable for other than its negligence or willful misconduct.
The Fiscal 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.
Section 8.03. Information. The Fiscal Agent shall provide to the City such information relating to the Bonds and the funds and accounts maintained by the Fiscal Agent hereunder as the City shall reasonably request.
Section 8.04. Notice to Fiscal Agent. The Fiscal Agent may rely and shall be protected in acting or refraining from acting upon any notice, resolution, request, consent, order, certificate, report, warrant, Bond or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or proper parties. The Fiscal Agent may consult with counsel, who may be counsel to the City, with regard to legal questions, and the advice or opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by the Fiscal Agent hereunder in good faith and in accordance therewith.
Whenever in the administration of its duties under this Agreement the Fiscal Agent shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of willful misconduct on the part of the Fiscal Agent, be deemed to be conclusively proved and established by a certificate of the City, and such certificate shall be full warranty to the Fiscal Agent for any action taken or suffered under the provisions of this Agreement or any Supplemental Agreement upon the faith thereof, but in its discretion the Fiscal Agent may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as to it may seem reasonable.
Section 8.05. Compensation, Indemnification. The City shall pay to the Fiscal Agent from time to time reasonable compensation for all services rendered as Fiscal Agent under this Agreement, and also all reasonable expenses, charges, fees and other disbursements, including those of its attorneys, agents and employees, incurred in and about the performance of its powers and duties under this Agreement, and the Fiscal Agent shall have a first priority lien therefor on any funds at any time held by it under this Agreement except for the Reserve Fund, and the Fiscal Agent shall pay and reimburse all expenses, charges, fees and other disbursements, including those of its attorneys, agents and employees, incurred in connection therewith from the funds held by it under this Agreement. The City further agrees, to the extent permitted by applicable law, to
4.2.b
Packet Pg. 646 Attachment: Fiscal Agent Agreement (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) 44 indemnify and save the Fiscal Agent, its officers, employees, directors and agents, harmless against any losses, costs, expenses (including legal fees and expenses), suits, claims, judgments, damages or liabilities which it may incur in the exercise and performance of its powers and duties hereunder which are not due to its negligence or willful misconduct. The obligation of the City under this Section 8.05 shall survive resignation or removal of the Fiscal Agent under this Agreement and payment of the Bonds and discharge of this Agreement.
Section 8.06. Books and Accounts. The Fiscal Agent shall keep, or cause to be kept, proper books of record and accounts, separate from all other records and accounts of the Fiscal Agent, in which complete and correct entries shall be made of all transactions made by it and with respect to the expenditure of amounts disbursed from the Bond Fund, the Special Tax Fund, the Administrative Expense Fund, the Reserve Fund and the Cost of Issuance Fund. Such books of record and accounts shall, upon reasonable prior notice, at all times during business hours be subject to the inspection of the City and the Owners of not less than ten percent (10%) of the aggregate principal amount of the Bonds then Outstanding, or their representatives duly authorized in writing.
ARTICLE IX
MODIFICATION OR AMENDMENT OF THIS AGREEMENT
Section 9.01. Amendments Permitted.
(A) This Agreement and the rights and obligations of the District and the City and of the Owners of the Bonds may be modified or amended at any time by a Supplemental Agreement with either (a) the affirmative vote of the Owners at a meeting of the Owners, or (b) the written consent, without a meeting, of the Owners of at least sixty percent (60%) in aggregate principal amount of the Bonds then Outstanding, exclusive of Bonds disqualified as provided in Section
9.04 hereof. No such modification or amendment shall (i) extend the maturity of any Bond or the time for paying interest thereon, or otherwise alter or impair the obligation of the City on behalf of the District to pay the principal of, and the interest and any premium on, any Bond, without the express consent of the Owner of such Bond, or (ii) permit the creation of any pledge of or lien upon the Special Tax Revenues, or the moneys on deposit in the Special Tax Fund, the Bond Fund or the Reserve Fund, superior to or on a parity with the pledge and lien created for the benefit of the Bonds (except as otherwise permitted by the Act, the laws of the State of California or this Agreement), (iii) reduce the percentage of Bonds required for the amendment hereof, or (iv) reduce the principal amount of or redemption premium on any Bond or reduce the interest rate thereon.
Any such amendment may not modify any of the rights or obligations of the Fiscal Agent without its written consent. The City shall deliver to the Fiscal Agent an opinion of counsel that any such Supplemental Agreement entered into by the City and the Fiscal Agent complies with the provisions of this Section 9.01 and the Fiscal Agent may conclusively rely on such opinion. (B) This Agreement and the rights and obligations of the District and the City and the Owners may also be modified or amended at any time by a Supplemental Agreement, without the consent of any Owners, only to the extent permitted by law and only for any one or more of the following purposes:
4.2.b
Packet Pg. 647 Attachment: Fiscal Agent Agreement (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) 45 (1) to add to the covenants and agreements of the City in this Agreement contained, other covenants and agreements thereafter to be observed, or to limit or surrender any right or power herein reserved to or conferred upon the City; (2) to make modifications not materially adversely affecting any Outstanding Bonds in any material respect as evidenced by an opinion of counsel delivered to the Fiscal Agent;
(3) to make such provisions for the purpose of curing any ambiguity, or of curing, correcting or supplementing any defective provisions of this Agreement, or in regard to questions arising under this Agreement, as the City and the Fiscal Agent may deem necessary or desirable and not inconsistent with this Agreement, and which shall not materially adversely affect the rights of the Owners as evidenced by an opinion of counsel delivered pursuant to the Fiscal Agent; or
(4) to make such additions, deletions or modifications as may be necessary or desirable to assure compliance with Section 148 of the Code relating to required rebate of moneys to the United States or otherwise as may be necessary to assure exclusion from gross income for federal income tax purposes of interest on the Bonds or to conform with the Regulations.
Section 9.02. Owners’ Meetings. The City may at any time call a meeting of the Owners.
In such event, the City is authorized to fix the time and place of any such meeting and to provide for the giving of notice thereof and to fix and adopt rules and regulations for the conduct of the meeting.
Section 9.03. Procedure for Amendment with Written Consent of Owners. The City may at any time enter into a Supplemental Agreement amending the provisions of the Bonds or of this Agreement or any Supplemental Agreement, to the extent that such amendment is permitted by Section 9.01(A) hereof, to take effect when and as provided in this Section 9.03. A copy of the Supplemental Agreement, together with a request to Owners for their consent thereto, shall be mailed by first class mail, postage prepaid, by the City to each Owner of Bonds Outstanding, but failure to mail copies of the Supplemental Agreement and request shall not affect the validity of the Supplemental Agreement when assented to as in this Section provided.
Such a Supplemental Agreement shall not become effective unless there shall be filed with the City the written consents of the Owners of at least sixty percent (60%) in aggregate principal amount of the Bonds then Outstanding (exclusive of Bonds disqualified as provided in Section
9.04) and a notice shall have been mailed as hereinafter in this Section provided. Each such consent shall be effective only if accompanied by proof of ownership of the Bonds for which such consent is given, which proof shall be such as is permitted by Section 11.04 hereof. Any such consent shall be binding upon the Owner of the Bonds giving such consent and on any subsequent Owner (whether or not such subsequent Owner has notice thereof) unless such consent is revoked in writing by the Owner giving such consent or a subsequent Owner by filing such revocation with the City prior to the date when the notice hereinafter in this Section provided for has been mailed.
4.2.b
Packet Pg. 648 Attachment: Fiscal Agent Agreement (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) 46 After the Owners of the required percentage of Bonds shall have filed their consents to the Supplemental Agreement, the City shall mail a notice to the Owners in the manner hereinbefore provided in this Section for the mailing of the Supplemental Agreement, stating in substance that the Supplemental Agreement has been consented to by the Owners of the required percentage of Bonds and will be effective as provided in this Section (but failure to mail copies of said notice shall not affect the validity of the Supplemental Agreement or consents thereto). Proof of the mailing of such notice shall be filed with the City. A record, consisting of the papers required by this Section 9.03 to be filed with the City, shall be proof of the matters therein stated until the contrary is proved. The Supplemental Agreement shall become effective upon the filing with the City of the proof of mailing of such notice, and the Supplemental Agreement shall be deemed conclusively binding (except as otherwise hereinabove specifically provided in this Article VIII) upon the City, the District and the Owners of all Bonds then Outstanding at the expiration of sixty (60) days after such filing, except in the event of a final decree of a court of competent jurisdiction setting aside such consent in a legal action or equitable proceeding for such purpose commenced within such sixty (60)-day period.
Section 9.04. Disqualified Bonds. . Bonds owned or held for the account of the City, excepting any pension or retirement fund, shall not be deemed Outstanding for the purpose of any vote, consent or other action or any calculation of Outstanding Bonds provided for in this Article IX, and shall not be entitled to vote upon, consent to, or participate in any action provided for in this Article IX. Upon request of the Fiscal Agent, the City shall specify to the Fiscal Agent those Bonds disqualified pursuant to this Section and the Fiscal Agent may conclusively rely on such certificate.
Section 9.05. Effect of Supplemental Agreement. From and after the time any Supplemental Agreement becomes effective pursuant to this Article IX, this Agreement shall be deemed to be modified and amended in accordance therewith, and the respective rights, duties and obligations under this Agreement of the City and all Owners of Bonds Outstanding shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments, and all the terms and conditions of any such Supplemental Agreement shall be deemed to be part of the terms and conditions of this Agreement for any and all purposes.
Section 9.06. Endorsement or Replacement of Bonds Issued After Amendments. The City may determine that Bonds issued and delivered after the effective date of any action taken as provided in this Article IX shall bear a notation, by endorsement or otherwise, in form approved by the City, as to such action. In that case, upon demand of the Owner of any Bond Outstanding at such effective date and upon presentation of his Bond for that purpose at the Principal Office of the Fiscal Agent or at such other office as the City may select and designate for that purpose, a suitable notation shall be made on such Bond. The City may determine that new Bonds, so modified as in the opinion of the City is necessary to conform to such action, shall be prepared, executed and delivered. In that case, upon demand of the Owner of any Bonds then Outstanding, such new Bonds shall be exchanged at the Principal Office of the Fiscal Agent without cost to any Owner, for like Bonds then Outstanding, upon surrender of such Bonds.
Section 9.07. Amendatory Endorsement of Bonds. The provisions of this Article VIII shall not prevent any Owner from accepting any amendment as to the particular Bonds held by him, provided that due notation thereof is made on such Bonds.
4.2.b
Packet Pg. 649 Attachment: Fiscal Agent Agreement (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) 47 ARTICLE X
EVENTS OF DEFAULT AND REMEDIES
Section 10.01. Events of Default. Any one or more of the following events shall be an Event of Default:
(i) failure to pay any installment of principal of any Bonds when and as the same shall become due and payable, whether at maturity as therein expressed, by proceedings for redemption or otherwise;
(ii) failure to pay any installment of interest on any Bonds when and as the same shall become due and payable; or
(iii) other than as referred to in subsection (a) or (b), failure by the City, for and on behalf of the District, to observe or perform any covenant, condition, agreement or provision in this Agreement on its part to be observed or performed for a period of thirty (30) days after written notice, specifying such failure and requesting that it be remedied, has been given to the City by the Fiscal Agent or the Owners of 25% in aggregate principal amount of the Outstanding Bonds; except that, if such failure can be remedied but not within such thirty (30) day period and if the City has taken all action reasonably possible to remedy such failure within such thirty (30) day period, such failure shall not become an Event of Default for so long as the City shall diligently proceed to remedy same.
Section 10.02. Remedies of Owners. Upon the occurrence and continuance of an Event of Default, the Owners shall have the right to exercise all remedies contemplated under this Agreement as follows:
(i) by mandamus or other action, suit, or proceeding at law or in equity to enforce the Owner's rights against the City, and its members, officers and employees, and to compel the City, and its members, officers and employees perform and carry out their duties under the Act and the agreements and covenants with the Owner contained herein; (ii) by suit in equity to enjoin any acts or things that are unlawful or violate the rights of the Owners; or
(iii) by suit, action or proceeding in any court of competent jurisdiction, to require the City and its officers and employees, acting for and on behalf of the District, to account as if it and they were the Fiscal Agents of an express trust.
Section 10.03. Application of Special Taxes and Other Funds After Default. If an Event of Default shall occur and be continuing, all Special Taxes, including any penalties, costs, fees and other charges accruing under the Act, and any other funds then held or thereafter received by the Fiscal Agent under any of the provisions of this Agreement shall be applied by the Fiscal Agent as follows and in the following order:
First, to the payment of any expenses necessary in the opinion of the Fiscal Agent to protect the interests of the Owners of the Bonds and payment of reasonable fees, charges, and expenses of
4.2.b
Packet Pg. 650 Attachment: Fiscal Agent Agreement (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) 48 the Fiscal Agent (including reasonable fees and disbursements of its counsel) incurred in and about the performance of its powers and duties under this Agreement; Second, to the payment of the principal of and interest then due with respect to the Bonds (upon presentation of the Bonds to be paid, and stamping thereon of the payment if only partially paid, or surrender thereof if fully paid) subject to the provisions of this Agreement, as follows:
(i) to the payment of all installments of interest then due in the order of the maturity of such installments, and, if the amount available shall not be sufficient to pay in full any installment or installments maturing on the same date, then to the payment thereof ratably, according to the amounts due thereon, without any discrimination or preference; and (ii) to the payment of the unpaid principal of any Bonds which shall have become due, whether at maturity or by call for redemption, with interest on the overdue principal at the rate borne by the respective Bonds on the date of maturity or redemption, and, if the amount available shall not be sufficient to pay in full all the Bonds, together with such interest, then to the payment thereof ratably, according to the amounts of principal due on such date, without any discrimination or preference.
Section 10.04. Restoration of Positions. In case any proceedings taken by the Owners on account of any Event of Default shall have been discontinued or abandoned for any reason or shall have been determined adversely to the Owners, then in every such case the City and the Owners, subject to any determination in such proceedings, shall be restored to their former positions and rights hereunder, severally and respectively, and all rights, remedies, powers, and duties of the City and the Owners shall continue as though no such proceedings had been taken.
Section 10.05. Rights and Remedies Cumulative. No right or remedy herein conferred upon or reserved to the Owners is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right or remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.
Section 10.06. Delay or Omission Not Waiver. No delay or omission of any Owners to exercise any right or remedy accruing upon an Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Agreement or by law to the Owners of the Bonds may be exercised from time to time, and as often as may be deemed expedient, by the Owners.
ARTICLE XI
MISCELLANEOUS
Section 11.01. Benefits of Agreement Limited to Parties. Nothing in this Agreement, expressed or implied, is intended to give to any person other than the City, the Fiscal Agent and the Owners, any right, remedy or claim under or by reason of this Agreement. Any covenants, stipulations, promises or agreements in this Agreement contained by and on behalf of the City shall be for the sole and exclusive benefit of the Owners and the Fiscal Agent.
4.2.b
Packet Pg. 651 Attachment: Fiscal Agent Agreement (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) 49 Section 11.02. Successor is Deemed Included in All References to Predecessor. Whenever in this Agreement or any Supplemental Agreement either the City or the Fiscal Agent is named or referred to, such reference shall be deemed to include the successors or assigns thereof, and all the covenants and agreements in this Agreement contained by or on behalf of the City or the Fiscal Agent shall bind and inure to the benefit of the respective successors and assigns thereof whether so expressed or not.
Section 11.03. Discharge of Agreement.
If the City shall pay and discharge the entire indebtedness of all or a portion (a “Partial Discharge”) of the Outstanding Bonds in any one or more of the following ways:
(A) by well and truly paying or causing to be paid the principal of and interest and any premium on such Bonds, as and when the same become due and payable; (B) by depositing with the Fiscal Agent, in trust, at or before maturity, an amount of money which, together with the amounts then on deposit in the Bond Fund, the Special Tax Fund and the Reserve Fund, or in the event of a Partial Discharge, the appropriate portion of such amounts, as determined by the City and confirmed by an independent certified public accountant, is fully sufficient to pay all such Bonds, including all principal, interest and redemption premiums, if any; or (C) by irrevocably depositing with the Fiscal Agent, in trust, cash or noncallable Defeasance Securities in such amount as the City shall determine, will, together with the interest to accrue thereon and amounts then on deposit in the Bond Fund, the Special Tax Fund and the Reserve Fund, or in the event of a Partial Discharge, the appropriate portion of such amounts, as determined by the City and confirmed by an independent certified public accountant, be fully sufficient to pay and discharge the indebtedness of all such Bonds (including all principal, interest and redemption premiums) at or before their respective maturity dates;
and if such Bonds are to be redeemed prior to the maturity thereof, notice of such redemption shall have been given as in this Agreement provided or provision satisfactory to the Fiscal Agent shall have been made for the giving of such notice; then, at the election of the City, and notwithstanding that any such Bonds shall not have been surrendered for payment, the pledge of the Special Tax Revenues and other funds provided for in this Agreement and all other obligations of the City and the District under this Agreement with respect to such Bonds shall cease and terminate, except the obligation of the City to pay or cause to be paid to the Owners of such Bonds not so surrendered and paid all sums due thereon, the obligation of the City to pay all amounts owing to the Fiscal Agent pursuant to Section 8.05 hereof, and the obligations of the City pursuant to the covenants contained in Section 5.10 hereof; and thereafter Special Tax Revenues shall not be payable to the Fiscal Agent with respect to such Bonds. Notice of such election shall be filed with the Fiscal Agent. The satisfaction and discharge of this Agreement as to all of the Outstanding Bonds shall be without prejudice to the rights of the Fiscal Agent to charge and be reimbursed by the City for the expenses which it shall thereafter incur in connection herewith.
4.2.b
Packet Pg. 652 Attachment: Fiscal Agent Agreement (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) 50 Any funds held by the Fiscal Agent to pay and discharge the indebtedness on such Bonds, upon payment of all fees and expenses of the Fiscal Agent, which are not required for such purpose, shall be paid over to the City.
Section 11.04. Execution of Documents and Proof of Ownership by Owners. Any request, consent, declaration or other instrument which this Agreement may require or permit to be executed by Owners may be in one or more instruments of similar tenor, and shall be executed by Owners in person or by their attorneys appointed in writing.
Except as otherwise herein expressly provided, the fact and date of the execution by any Owner or his attorney of such a request, consent, declaration or other instrument, or of a writing appointing such an attorney, may be proved by the certificate of any notary public or other officer authorized to take acknowledgments of deeds to be recorded in the state in which he purports to act, that the person signing such request, declaration or other instrument or writing acknowledged to him the execution thereof, or by an affidavit of a witness of such execution, duly sworn to before such a notary public or other officer.
Except as otherwise herein expressly provided, the ownership of registered Bonds and the amount, maturity, number and date of holding the same shall be proved by the registration books maintained by the Fiscal Agent pursuant to Section 2.08 hereof.
Any request, consent, declaration or other instrument or writing of the Owner of any Bond shall bind all future Owners of such Bond in respect of anything done or suffered to be done by the City or the Fiscal Agent in good faith and in accordance therewith.
Section 11.05. Waiver of Personal Liability. No member, officer, agent or employee of the City or the District shall be individually or personally liable for the payment of the principal of, or interest or any premium on, the Bonds; but nothing herein contained shall relieve any such member, officer, agent or employee from the performance of any official duty provided by law.
Section 11.06. Notices to and Demands on City and Fiscal Agent. Any notice or demand which by any provision of this Agreement is required or permitted to be given or served by the Fiscal Agent to or on the City may be given or served by being deposited postage prepaid (first class, registered or certified) in a post office letter box addressed (until another address is filed by the City with the Fiscal Agent) as follows:
City of San Jacinto
595 S. San Jacinto Avenue
San Jacinto, CA 92583
Attn: Finance Director
Any notice or demand which by any provision of this Agreement is required or permitted to be given or served by the City to or on the Fiscal Agent may be given or served by Electronic Means (hereinafter defined) or by being deposited postage prepaid (first class, registered or certified) in a post office letter box, personally delivered or delivered by courier or overnight mail addressed (until another address is filed by the Fiscal Agent with the City) as follows:
4.2.b
Packet Pg. 653 Attachment: Fiscal Agent Agreement (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) 51 U.S. Bank Trust Company, National Association
Global Corporate Trust Services
633 West 5th Street, 24th Floor
Los Angeles, CA 90071
Reference: City of San Jacinto CFD 2002-1
Section 11.07. Partial Invalidity. If any section, paragraph, sentence, clause or phrase of this Agreement shall for any reason be held by a court of competent jurisdiction to be illegal or unenforceable, such holding shall not affect the validity of the remaining portions of this Agreement. The City hereby declares that it would have executed and delivered this Agreement and each and every other section, paragraph, sentence, clause or phrase hereof and authorized the issue of the Bonds pursuant thereto irrespective of the fact that any one or more sections, paragraphs, sentences, clauses or phrases of this Agreement may be held illegal, invalid or unenforceable.
Section 11.08. Unclaimed Moneys. Anything contained herein to the contrary notwithstanding, any moneys held by the Fiscal Agent for the payment and discharge of the principal of, and the interest and any premium on, the Bonds which remains unclaimed for two (2) years after the date when the payment of such principal, interest and premium have become payable, if such moneys were held by the Fiscal Agent at such date, shall be paid by the Fiscal Agent to the City (without liability for interest) as its absolute property free from any trust, and the Fiscal Agent shall thereupon be released and discharged with respect thereto and the Owners of such Bonds shall look only to the City for the payment of the principal of, and interest and any premium on, their Bonds.
Section 11.09. Applicable Law. This Agreement shall be governed by and enforced in accordance with the laws of the State of California applicable to contracts made and performed in the State of California.
Section 11.10. Conflict with Act. In the event of a conflict between any provision of this Agreement with any provision of the Act as in effect on the Closing Date, the provision of the Act shall prevail over the conflicting provision of this Agreement.
Section 11.11. Conclusive Evidence of Regularity. Bonds issued pursuant to this Agreement shall constitute conclusive evidence of the regularity of all proceedings under the Act relative to their issuance and the levy of the Special Taxes.
Section 11.12. Payment on Business Day. In any case where the date of the payment of interest on or of principal (and premium, if any) of the Bonds or the date fixed for redemption is other than a Business Day, the payment of interest or principal (and premium, if any) need not be made on such date but may be made on the next succeeding day which is a Business Day with the same force and effect as if made on the date required, and no interest shall accrue for the period from and after such date.
Section 11.13. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original.
4.2.b
Packet Pg. 654 Attachment: Fiscal Agent Agreement (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) 52 Section 11.14. Destruction of Bonds. All Bonds surrendered to the Fiscal Agent for payment upon maturity or for redemption shall upon payment therefor, and any Bond purchased by the City as authorized herein shall be, cancelled forthwith and shall not be reissued. The Fiscal Agent shall destroy such Bonds as provided by law and furnish to the City a certificate of destruction.
(Signature pages follow)
4.2.b
Packet Pg. 655 Attachment: Fiscal Agent Agreement (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) S-1
IN WITNESS WHEREOF, the City has caused this Agreement to be executed in its name on behalf of the District, and the Fiscal Agent, in acknowledgment of its acceptance of the duties of the Fiscal Agent created hereunder, has caused this Agreement to be executed in its name, all as of the date and year first herein above written.
CITY OF SAN JACINTO, for and on behalf of the CITY
OF SAN JACINTO COMMUNITY FACILITIES
DISTRICT NO. 2002-1 (RANCHO SAN JACINTO,
PHASE 2)
By:
Robert Johnson
City Manager
-Signature PageFiscal Agent Agreement
4.2.b
Packet Pg. 656 Attachment: Fiscal Agent Agreement (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) S-2
U.S. BANK TRUST COMPANY, NATIONAL
ASSOCIATION, as Fiscal Agent
By:
Authorized Officer
-Signature PageFiscal Agent Agreement
4.2.b
Packet Pg. 657 Attachment: Fiscal Agent Agreement (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) A-1
EXHIBIT A
FORM OF BOND
UNLESS THIS BOND IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY (AS DEFINED IN THE FISCAL AGENT AGREEMENT) TO THE FISCAL
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
BOND AUTHENTICATED AND DELIVERED 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.
No. R-[__] **$[________]**
UNITED STATES OF AMERICA
STATE OF CALIFORNIA
COUNTY OF RIVERSIDE
CITY OF SAN JACINTO
COMMUNITY FACILITIES DISTRICT NO. 2002-1
(RANCHO SAN JACINTO, PHASE 2)
2026 SPECIAL TAX REFUNDING BONDS
INTEREST RATE MATURITY DATE DATED DATE
CUSIP
NUMBER
[___]% [________] 1, 20[__] [________], 2026 797834
REGISTERED OWNER: CEDE & CO.
PRINCIPAL AMOUNT: DOLLARS
The City of San Jacinto (the “City”), for and on behalf of City of San Jacinto Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2) County of Riverside, State of California (the “District”), for value received, hereby promises to pay, from the Special Tax Revenues (as hereinafter defined) to be collected in the District or amounts in the funds and accounts held under the Agreement (as hereinafter defined) to the registered owner named above, or registered assigns, on the maturity date specified above, the principal amount specified above, and to pay interest on such principal amount from the Closing Date, or from the most recent interest payment date to which interest has been paid or duly provided for, semiannually on March 1 and September 1, commencing September 1, 2026 (“Interest Payment Dates”), at the interest rate specified above, until the principal amount hereof is paid or made available for payment. The principal of this Bond is payable by check 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
4.2.b
Packet Pg. 658 Attachment: Fiscal Agent Agreement (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) A-2
U.S. Bank Trust Company, National Association (the “Fiscal Agent”). Interest on this Bond shall be paid by check of the Fiscal Agent mailed by first class mail, postage prepaid, on each Interest Payment Date to the registered owner hereof as of the close of business on the fifteenth (15th) 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 Fiscal Agent; except that at the written request of the owner of at least $1,000,000 in aggregate principal amount of outstanding Bonds filed with the Fiscal Agent prior to the Record Date preceding any Interest Payment Date, interest on such Bonds shall be paid to such owner on such Interest Payment Date by wire transfer of immediately available funds to an account in the United States of America designated in such written request.
This Bond is one of a duly authorized issue of bonds approved by the qualified electors of the District pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, Chapter
2.5 (commencing with Section 53311) of Part 1 of Division 2 of Title 5 of the California Government Code (the “Mello-Roos Act”), for the purpose of defeasing and refunding the Community Facilities District No. 2002-1 of the City of San Jacinto 2002 Special Tax Bonds, Series A and is one of the series of Bonds designated “City of San Jacinto Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2) 2026 Special Tax Refunding Bonds” (the “Bonds”), in the aggregate principal amount of $[_________]. 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 on [May 5], 2026 (the “Resolution”), and the Fiscal Agent Agreement, dated as of [June] 1, 2026, between the City and the Fiscal Agent (the “Agreement”) and this reference incorporates the Resolution and the Agreement herein, and by acceptance hereof the owner of this Bond assents to the terms and conditions of the Resolution and the Agreement. The Resolution is adopted under, the Agreement is executed under, this Bond is issued under, and all are to be construed in accordance with, the laws of the State of California.
Pursuant to the Mello-Roos Act, the Agreement and the Resolution, the principal of and interest on the Bonds are payable from the annual levy of Special Taxes authorized under the Mello-Roos Act to be collected within the District, including interest and penalties thereon and proceeds of the redemption or sale of property sold as a result of foreclosure of the lien of the Special Taxes in the amount of said lien and interest and penalties thereon (the “Special Taxes Revenues”) and are secured by a pledge of and lien upon the revenues derived therefrom and certain funds held by the Fiscal Agent pursuant to the Agreement.
Interest on this Bond shall be payable from the Interest Payment Date next preceding the date of its authentication, unless (i) it is authenticated on an Interest Payment Date, in which event it shall bear interest from such Interest Payment Date, or (ii) it is authenticated prior to an Interest Payment Date and after the close of business on the Record Date preceding such Interest Payment Date, in which event it shall bear interest from such Interest Payment Date, or (iii) it is authenticated prior to the Record Date preceding the first Interest Payment Date, in which event it shall bear interest from the Closing Date; provided, however, that if at the time of authentication of this Bond, interest is in default hereon, this Bond shall bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment hereon, or from the Closing Date, if no interest has previously been paid or made available for payment hereon.
4.2.b
Packet Pg. 659 Attachment: Fiscal Agent Agreement (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) A-3
Any tax for the payment hereof shall be limited to the Special Taxes, except to the extent that provision for payment has been made by the City as may be permitted by law. The Bonds do not constitute obligations of the City for which the City is obligated to levy or pledge, or has levied or pledged, general or special taxation other than as described hereinabove.
The Bonds are not subject to optional redemption prior to their stated maturity dates.
The Bonds are subject to mandatory redemption prior to their stated maturity dates on any Interest Payment Date, as selected by the City, in integral multiples of $5,000, from moneys derived by the City from Special Tax Prepayments, at redemption prices (expressed as percentages of the principal amounts of the Bonds to be redeemed), together with accrued interest to the date of redemption, as follows:
Redemption Period Redemption Price
September 1, 2026 through March 1, 2034 103%
September 1, 2034 102%
Notice of redemption with respect to the Bonds to be redeemed shall be given to the registered owners thereof, in the manner and to the extent provided in the Agreement. Such notice may be conditional upon the receipt of funds by the Fiscal Agent on or prior to the redemption date of moneys sufficient to pay the Redemption Price of the Bonds.
The outstanding Bonds maturing on September 1, 20[__] are subject to mandatory sinking fund redemption, in part, without premium, on September 1, 20[__] and on each September 1 thereafter to maturity as provided in the Agreement.
From and after the date fixed for redemption, if funds available for the payment of the redemption prices of the Bonds selected for redemption shall have been deposited in the Principal Account in the Bond Fund, such Bonds shall cease to be entitled to any benefit under the Agreement other than the right to receive payment of the redemption price, and interest shall cease to accrue on the Bonds to be redeemed on the redemption date specified in the notice of redemption.
This Bond shall be registered in the name of the owner hereof, as to both principal and interest.
Each registration and transfer of registration of this Bond shall be entered by the Fiscal Agent in books kept by it for that purpose and authenticated by the manual signature of an authorized signatory of the Fiscal Agent upon the certificate of authentication endorsed hereon.
No transfer or exchange hereof shall be valid for any purpose unless made by the registered owner or his duly authorized attorney, by execution of the form of assignment endorsed hereon, and authenticated as herein provided, and the principal hereof and interest hereon shall be payable only to the registered owner or to such owner’s order.
4.2.b
Packet Pg. 660 Attachment: Fiscal Agent Agreement (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) A-4
The Fiscal Agent shall require the registered owner requesting transfer or exchange hereof to pay any tax or other governmental charge required to be paid with respect to such transfer or exchange.
The Agreement and the rights and obligations of the City and the District thereunder may be modified or amended as set forth therein.
This Bond shall not become valid or obligatory for any purpose until the certificate of authentication hereon endorsed shall have been dated and manually signed on behalf of the Fiscal Agent.
IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts, conditions and things required by law to exist, happen and be performed precedent to and in the issuance of this Bond have existed, happened and been performed in due time, form and manner as required by law.
(Balance of this page intentionally left blank)
4.2.b
Packet Pg. 661 Attachment: Fiscal Agent Agreement (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) A-5
IN WITNESS WHEREOF, the City Council of the City of San Jacinto, for Community Facilities District No. 2002-1 thereof, has caused this Bond to be dated [________], 2026, and to be signed by the facsimile signature of the Mayor of the City and countersigned by the facsimile signature of the City Clerk.
CITY OF SAN JACINTO, for and on behalf of the
CITY OF SAN JACINTO COMMUNITY
FACILITIES DISTRICT NO. 2002-1 (RANCHO
SAN JACINTO, PHASE 2) COUNTY OF
RIVERSIDE, STATE OF CALIFORNIA
By:
Mayor of the City of San Jacinto for and on
behalf of the City of San Jacinto Community
Facilities District No. 2002-1 (Rancho San
Jacinto, Phase 2) thereof
ATTEST:
City Clerk of the City of San Jacinto
4.2.b
Packet Pg. 662 Attachment: Fiscal Agent Agreement (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) A-6
[FORM OF CERTIFICATE OF AUTHENTICATION]
This is one of the Bonds described in the within-defined Agreement.
Dated: [_________], 2026 U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, as Fiscal Agent
By:
Authorized Officer
4.2.b
Packet Pg. 663 Attachment: Fiscal Agent Agreement (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) A-7
[FORM OF ASSIGNMENT]
For value received the undersigned do(es) hereby sell, assign and transfer unto ______________________________________________________________________________ ______________________________________________________________________________ _____________________________________________________
(Name, Address and Tax Identification or Social Security Number of Assignee) the within Bond and do(es) hereby irrevocably constitute and appoint ______________________________________________________________ attorney, to transfer the same on the books of the Fiscal Agent, with full power of substitution in the premises.
Dated: _______________________
Note: Signature guarantee shall be made by a
guarantor institution participating in
the Securities Transfer Agents
Medallion Program or in such other
guarantee program acceptable to the
Fiscal Agent.
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.
4.2.b
Packet Pg. 664 Attachment: Fiscal Agent Agreement (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2))
ESCROW DEPOSIT AND TRUST AGREEMENT
By and between
CITY OF SAN JACINTO,
for and on behalf of,
COMMUNITY FACILITIES DISTRICT NO. 2002-1
(RANCHO SAN JACINTO, PHASE 2)
and
U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION
as Escrow Agent
Dated as of [June] 1, 2026
Related to
CITY OF SAN JACINTO
COMMUNITY FACILITIES DISTRICT NO. 2002-1
(RANCHO SAN JACINTO, PHASE 2)
2016 SPECIAL TAX REFUNDING BONDS
4.2.c
Packet Pg. 665 Attachment: Escrow Deposit and Trust Agreement (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) 1 ESCROW DEPOSIT AND TRUST AGREEMENT
This ESCROW DEPOSIT AND TRUST AGREEMENT, dated as of [June] 1, 2026 (the “Escrow Agreement”), is by and between the CITY OF SAN JACINTO (the “City”) for and on behalf of CITY OF SAN JACINTO COMMUNITY FACILITIES DISTRICT NO. 2002-1, a community facilities district organized and existing by virtue of the Constitution and laws of the State of California (the “District”), and U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION as successor to the Prior Fiscal Agent (defined below), as Escrow Agent (the “Escrow Agent”).
W I T N E S S E T H:
WHEREAS, the District has heretofore entered into that certain Fiscal Agent Agreement, dated as of March 1, 2016 (the “Prior Fiscal Agent Agreement”), with U.S. Bank Trust Company, National Association, formerly known as MUFG Union Bank, N.A., as fiscal agent (the “Prior Fiscal Agent”); and
WHEREAS, pursuant to the Prior Fiscal Agent Agreement the City, acting for and on behalf of the District, issued the City of San Jacinto $17,975,000 Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2) 2016 Special Tax Refunding Bonds (the “Prior Bonds”); and
WHEREAS, the Prior Fiscal Agent Agreement provides that the District shall have the option to pay and discharge the entire indebtedness on the Prior Bonds outstanding by irrevocably depositing with the Prior Fiscal Agent, in trust, cash and Federal Securities (as defined in the Prior Fiscal Agent Agreement) in such amount as the District shall determine as confirmed by an independent certified public accountant will, together with interest to accrue thereon and moneys then on deposit in certain funds and accounts established pursuant to the Prior Fiscal Agent Agreement and certain additional moneys then on deposit with the District, fully sufficient to pay and discharge the indebtedness on such Prior Bonds (including all principal, interest and redemption premiums) at or before their respective maturity dates; and WHEREAS, the City and the District have determined that it is in the best interests of the District at this time to refinance the Prior Bonds and cause the redemption thereof on [__________], 2026 at a redemption price of 100% of the principal amount thereof, plus accrued interest thereon to the date of redemption; and
WHEREAS, the City and the District propose to make and/or cause the deposit of moneys with the Escrow Agent and to appoint the Escrow Agent as their agent for the purpose of applying said deposit to the payment and redemption of the Prior Bonds in accordance with the instructions provided by this Escrow Agreement and the Prior Fiscal Agent Agreement, and the Escrow Agent will accept said appointment; and
WHEREAS, to obtain moneys to make such deposit, the District proposes to issue its $[__________] Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2) 2026 Special Tax Refunding Bonds (the “Bonds”) pursuant to that certain Fiscal Agent Agreement, dated as of June 1, 2026 (the “Fiscal Agent Agreement”), by and between the Community Facilities
4.2.c
Packet Pg. 666 Attachment: Escrow Deposit and Trust Agreement (Community Facilities District No. 2002-1 (Rancho San Jacinto, Phase 2)) 2 District and U.S. Bank Trust Company, National Association, as fiscal agent (the “Fiscal Agent”); and
WHEREAS, the City and the District wish to make such deposit with the Escrow Agent and to enter into this Escrow Agreement for the purpose of providing the terms and conditions for the deposit and application of amounts so deposited; and WHEREAS, the Escrow Agent has full powers to act with respect to the irrevocable escrow and trust created herein and to perform the duties and obligations to be undertaken pursuant to this Escrow Agreement. Any defined terms used herein, but not specifically defined, shall have the meaning given in the Prior Fiscal Agent Agreement.