[FORM OF JOINT COMMUNITY FACILIITES AGREEMENT]
CMFA BOLD PROGRAM
Joint Community Facilities Agreement
by and between
California Municipal Finance Authority and City of Stockton
Relating to the Ligurian Village Project
This Joint Community Facilities Agreement (this “Agreement”), dated as of August 1, 2024, by and between the California Municipal Finance Authority, a joint exercise of powers authority duly organized and existing under the Constitution and laws of the state of California (the “CMFA”), and the City of Stockton, a municipal corporation and charter city, duly organized and existing under the Constitution and laws of the state of California (the “City,” and together with CMFA, the “Parties”).
WITNESSETH:
WHEREAS, LGI Homes – California LLC, a California limited liability company, plans to construct 236 single-family detached residential units as part of its “Ligurian Village” development project (the “Project”); and
WHEREAS, the Project is located within San Joaquin County, but will receive sewer service from the City, requiring the payment of development impact fees paying for sewer facilities and/or construction of sewer facilities, in each case, to be owned and operated by the City; and
WHEREAS, CMFA intends to conduct proceedings under the Mello-Roos Community Facilities Act of 1982 (California Government Code section 53311 et seq.) (the “Act”) to form a community facilities district (the “CFD”) to finance certain public facilities and development impact fees used for capital improvements authorized to be financed under the Act (the “CFD Improvements” and the “CFD Fees,” respectively) as part of its Bond Opportunities for Land Development (“BOLD”) program for the Project;
WHEREAS, the CFD Improvements and CFD Fees will be described in the resolution of formation for each CFD, including CFD Fees payable and/or CFD Improvements to be acquired by the City and set forth on Exhibit A hereto (the “City Fees” and the “City Improvements,” respectively);
WHEREAS, CMFA intends to utilize the proceeds of sale of special tax bonds of the CFD (the “Bonds”) to finance some or all of the City Fees and/or City Improvements;
WHEREAS, under Section 53316.2 of the Act, CMFA may form the CFD to, among other things, finance the City Fees and/or City Improvements, provided that CMFA and the City enter into a joint community facilities agreement such as this Agreement; and
WHEREAS, City is willing to cooperate with CMFA in accomplishing the financing of the City Fees and/or City Improvements eligible to be financed by the Act, and to confer upon the CMFA full power to provide financing for the City Fees and/or City Improvements in the event that Exhibit 1
2 proceeds of special taxes and/or bonds in the CFD become available and are utilized for such purpose;
WHEREAS, this Agreement is made under the authority of Section 53316.2 of the Act; and
WHEREAS, in consideration for the mutual undertakings of the Parties stated herein, the Parties agree as follows:
AGREEMENT:
1. Administration of CFD and Issuance of Bonds by CMFA. CMFA shall administer each CFD, including employing and paying all consultants, annually levying the special tax and paying and administering the Bonds, and complying with all state and federal requirements appertaining to the proceedings establishing the CFD and issuing and using the proceeds of the Bonds, including the requirements of the United States Internal Revenue Code of 1986, as amended (the “Code”). City acknowledges that in order to comply with the Code, in connection with the issuance of Bonds by CMFA on a federally tax-exempt basis, the Authority will need to receive from the City assurances that it has a reasonable expectation of spending the proceeds of the Bonds within 3 years from their date of issuance on public capital improvements.
2. Agreement to Hold Funds. CMFA shall hold or cause to be held within a separate fund, account or subaccount (each, a “Project Fund”) special taxes and/or Bond proceeds from each CFD. All City Fees funded through Bond proceeds shall be deemed paid by the developer responsible for such City Fees in the amount of the Bond proceeds on the date that such Bond proceeds are deposited in the Project Fund. CMFA shall disburse, or cause to be disbursed, moneys on deposit in the Project Fund only as provided herein.
3. Disbursements from Project Funds. Moneys on deposit in the Project Fund shall be disbursed pursuant to written requisitions of the CMFA following receipt by CMFA of requisitions signed by the City, in substantially the form attached hereto as Exhibit B and executed by the City Manager, Chief Financial Officer, or any of their designees (each, an “Authorized Officer”). CMFA and its designees, including any trustee or fiscal agent holding funds in a Project Fund, may conclusively rely on such requisitions for purposes of making such disbursements. All disbursements from the Project Fund to the City shall be made by wire transfer of immediately available funds or by check payable to the City’s bank account number at a bank located within the United States on file with CMFA as part of the BOLD program, unless another method of payment is requested in writing by the City.
4. Use of City Fees for Public Capital Improvements. City shall utilize the City Fees financed through the CFD for public capital improvements to be owned by the City. The City acknowledges that, subject to approval of disbursements as set forth in Section 3 above, the City Fees may be financed through the CFD, and agrees to allow CMFA, or its designee, to finance the City Fees from time to time with respect to developers applying for BOLD financing, on the City’s behalf, through the issuance of one or more series of Bonds and/or from proceeds of special taxes of the CFD.
5. Purchase of City Improvements. To the extent the City is acquiring City Improvements using Bond proceeds or special taxes generated by the CFD, the City shall work with the developer of the Project to put in place all necessary agreements, certificates or other documents required for the City to acquire such improvements. Neither CMFA nor any of its Exhibit 1
3 agents shall be responsible for inspection or review of any such documents relating to financed City Improvements, unless set forth in a separate written agreement between CMFA and the City providing for the same.
6. Amendments. This Agreement may be amended by a writing signed by the Parties, including to update Exhibit A to reflect additional or different City Fees and/or City Improvements to be financed through the BOLD program from time-to-time.
7. Term of this Agreement. This Agreement shall be in full force and effect from this date to and including its termination by mutual written agreement of the parties hereto. CMFA agrees to terminate this agreement upon request of the City upon delivery to CMFA of an opinion Bond Counsel to the effect that the termination of this Agreement will not adversely affect the exclusion from gross income of interest on the Bonds for federal income tax purposes.
8. Counterparts; Third-Party Beneficiary. This Agreement may be executed in counterparts, each of which shall be deemed an original. The developer of the Project is hereby made and designated a third-party beneficiary of this Agreement.
[Signatures on Following Page]
Exhibit 1
4 IN WITNESS WHEREOF the Parties have caused this Agreement to be executed by their authorized representatives as of the effective date stated above.
CMFA:
CALIFORNIA MUNICIPAL
FINANCE AUTHORITY
By:__________________________
Name: Edward J. Becker
Title: Executive Director
CITY:
CITY OF STOCKTON
By: ___________________________
Name: Harry Black
Title: City Manager
Exhibit 1
A-1
EXHIBIT A
DESCRIPTION OF CITY FEES AND/OR CITY IMPROVEMENTS
Impact fees that finance public facilities, and/or public facilities constructed by the developer of the Project, in each case to be owned and operated by the City as part of its sewer system.
Exhibit 1
B-1
EXHIBIT B
DISBURSEMENT REQUEST FORM
To:
California Municipal Finance Authority
2111 Palomar Airport Road, Suite 320
Carlsbad, California 92011
Email: ____________________
Re: BOLD Program - Request for Disbursement of Bond Proceeds
The undersigned, a duly authorized officer of the City of Stockton (the “City”) hereby requests a disbursement from the Project Fund set forth below, and certifies that the amounts of development impact fees and/or capital improvements listed below have been or will be spent by the City as of the date indicated below or within 5 days thereafter:
Subaccount(s) Amount(s)
[example, CMFA CFD No. 20__-__,
Special Tax Bonds Series 20__, Project Fund] $
Total:
Wiring Instructions: ___________________________
The undersigned hereby additionally certifies as follows:
1. These funds have been or will be used to acquire and/or construct capital improvements, and this disbursement is not being made for the purpose of reinvestment.
2. None of the expenditures for which payment is requested have been reimbursed previously from other sources of funds.
Exhibit 1
B-2
3. If the total amount above is greater than the funds held by CMFA on behalf of the City in the Subaccount(s) identified above, CMFA is authorized to amend the amount requested to be equal to the amount of such funds.
4. The amounts being disbursed pursuant to this request are being used to finance or refinance certain public infrastructure and facilities (the “Improvements”). The City will own, and for the entire useful life of such Improvements reasonably expects to own, all of such Improvements. The Improvements consist of the following:
[Describe the improvements]
5. To the extent any of such Improvements are sold to an entity that is not a state or local government, the City will seek the advice and approval of bond counsel to CMFA for the BOLD program prior to any such sale. The City will not allow any of such Improvements to be used (for example, by lease or other contract) in the trade or business of any nongovernmental persons (other than in their roles as members of the general public). All of such Improvements will be used in the performance of essential governmental functions of the City or another state or local government agency. The average expected useful life of such Improvements is at least ____ years. The representations and covenants contained in this paragraph are intended to support the conclusion that the interest paid on the bonds issued to finance the Improvements is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986 (the “Code”).
Dated:
Signature:
Print Name:
Exhibit 1