Attachment G - October 3, 2023 Staff Report — Victorville City Council, December 5, 2023

Attachment G
October 3, 2023 Staff Report

12. Initiate the Annexation of Tract No. 20280 into Drainage Facilities Assessment District No. 1 and Landscape Maintenance Assessment District No. 6 Recommendation:

That the Honorable City Council:
(1) Approve Resolution No. 23-084 to initiate proceedings to annex Tract No. 20280 into Drainage Facilities Assessment District No. 1;
(2) Approve Resolution No. 23-085 to initiate proceedings to annex Tract No. 20280 into Landscape Maintenance Assessment District No. 6;
(3) Approve Resolution No. 23-086 to preliminarily approve the Drainage Facilities Assessment District No. 1 Engineer’s Report;
(4) Approve Resolution No. 23-087 to preliminarily approve the Landscape Maintenance Assessment District No. 6 Engineer’s Report; and (5) Approve Resolution Nos. 23-088 and 23-089 setting a public hearing date of November 21, 2023.

Item Number: 12
City Council / Board of Directors
Written Communications
Meeting of: October 3, 2023
Submitted By:

Fredy Bonilla, Acting City Engineer
Subject:

Initiate the Annexation of Tract No. 20280 into Drainage Facilities Assessment District No. 1 and Landscape Maintenance Assessment District No. 6 Recommendation:

That the Honorable City Council:
1) Approve Resolution No. 23-084 to initiate proceedings to annex Tract No. 20280 into Drainage Facilities Assessment District No. 1;
2) Approve Resolution No. 23-085 to initiate proceedings to annex Tract No. 20280 into Landscape Maintenance Assessment District No. 6;
3) Approve Resolution No. 23-086 to preliminarily approve the Drainage Facilities Assessment District No. 1 Engineer’s Report;
4) Approve Resolution No. 23-087 to preliminarily approve the Landscape Maintenance Assessment District No. 6 Engineer’s Report; and 5) Approve Resolution Nos. 23-088 and 23-089 setting a public hearing date of November 21, 2023.

Fiscal Impact:

There is no fiscal impact associated with the approval of resolutions listed above.

Maintenance and servicing of the drainage and landscaping improvements in future years will be covered by the subsequent annual assessments levied on these and other properties within the boundaries of their assigned districts.

Strategic Plan Goal:

This item aligns with Goal E in the Strategic Plan, “Invest in Infrastructure” and Goal A, “Financial Sustainability.” Annual assessment revenue supports the expenses for operations, maintenance, and improvement of associated landscaping, parks, and infrastructure.
3 3
1 4
Background:

The property owner for Tract Map No. 20280 (Tract 20280) has petitioned the City to annex the tract into the City-Wide Drainage Facilities Assessment District No. 1 (DFAD 1) and the Landscape Maintenance Assessment District No. 6 (LMAD 6) to comply with the Conditions of Approval for Tract 20280 which is located at the southeast corner of Hopland Street and Cahuenga Road. Tract 20280 is a proposed 72-lot single-family subdivision that includes drainage and landscaping improvements within the tract. This annexation will provide for the perpetual maintenance and servicing of the drainage and landscape improvements by means of a new annual assessment to each property within Tract 20280.

Discussion:

The City formed DFAD 1 and LMAD 6 pursuant to the Landscaping and Lighting Act of 1972, Streets and Highways Code section 22500 et seq. (the Act); the applicable provisions of Proposition 218 (Article XIIID of the California Constitution, hereinafter referred to as the “California Constitution”); and Government Code section 53753, part of the Omnibus Act.

DFAD 1 and LMAD 6 allows the City to collect assessments for maintaining and servicing the drainage and landscaping improvements within these districts. Assessments are levied and collected annually according to the special benefits received by properties from the improvements provided by the City. The formation documents of DFAD 1 and LMAD 6 contain a mechanism permitting the annual assessment amount to be adjusted from time to time, commensurate with increases in the costs to maintain the drainage and landscaping improvements.

A public hearing regarding the amount of the assessments is conducted annually by the City Council. In accordance with the special benefit calculation contained in the annual Engineer’s Report, the total assessments for DFAD 1 and LMAD 6 are equally distributed amongst all the parcels within the district boundaries. The current annual assessment amounts per parcel are $221.75 for DFAD 1 and $157.12 for LMAD 6. Both districts are adequately funded to perform all required maintenance and servicing of the proposed improvements for Tract 20280.

Sections 22605 through 22613 of the Act, as amplified by the California Constitution and Government Code section 53753, provide procedures for annexation of new territory into an existing assessment district. For Tract 20280 to become subject to the annual assessments applicable to DFAD 1 and LMAD 6, and to receive the level of perpetual maintenance provided to other properties within those assessment districts, annexation to DFAD 1 and LMAD 6 is required.

For this annexation to occur, the City Council must approve a series of eight resolutions at two City Council meetings. Resolutions Nos. 23-084 and 23-085 will initiate annexation, request the City Engineer’s Reports, and file with the City Clerk for City Council consideration. The Engineer’s Reports are required by the Act and include the estimated costs of the annexation, a description of the improvements, special benefits to be received 3 3
1 4
by the parcels, a determination of the estimated amounts of the assessments to be levied upon the properties proposed to be annexed, an annexation map, and other information as required by Article 4 (commencing with section 22565) of the Act and the California Constitution, as amplified by Government Code section 53753.

If the foregoing resolutions are approved, the Engineer’s Reports would be preliminarily approved by Resolution Nos. 23-086 and 23-087, which would also declare the City Council’s intent to annex Tract 20280 to DFAD 1 and LMAD 6. At this same meeting, a fifth and sixth resolution will also need to be approved by the City Council to set a public hearing of November 21, 2023 and order the mailing of the public hearing notices and assessment ballots to the property owners within Tract 20280, no less than 45 days prior to said public hearing.

During the November 21, 2023 meeting, the City Council would then conduct the Public Hearing and count the assessment ballots submitted. If at the end of the public hearing, the ballots cast in favor of the annexation exceed the ballots cast in opposition, the City Council may proceed to annex Tract 20280 to DFAD 1 and LMAD 6, approve the Engineer’s Reports for each assessment district, order the assessments to be levied, and complete the subsequent annexations by approving the final resolutions.

Therefore, staff recommends that the City Council approve Resolution No. 23-084 to initiate proceedings to annex Tract 20275 into DFAD 1 and Resolution No. 23-085 to annex into LMAD 6, approve Resolution Nos. 23-086 and 23-087 to preliminarily approve both districts Engineer’s Reports, and approve Resolution Nos. 23-088 and 23-089 setting a public hearing date of November 21, 2023.

Staff remains available for any questions Council may have.

Attachments: A. Resolution No. 23-084
B. Resolution No. 23-085
C. Resolution No. 23-086
D. Resolution No. 23-087
E. Resolution No. 23-088
F. Resolution No. 23-089
G. Vicinity Map
H. Engineer’s Reports
I. Petitions from Developers
1 3
9 8
9 Attachment A
Resolution No. 23-084
1 3
9 8
9 RESOLUTION NO. 23-084

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

VICTORVILLE INITIATING PROCEEDINGS FOR THE ANNEXATION OF TERRITORY, TRACT MAP 20280 TO VICTORVILLE DRAINAGE
FACILITIES ASSESSMENT DISTRICT NO. 1 (DFAD NO. 1) AND THE

LEVY AND COLLECTION OF ASSESSMENTS RELATED THERETO
COMMENCING WITH FISCAL YEAR 2024/2025
WHEREAS, pursuant to the Landscaping and Lighting Act of 1972, Streets and Highways Code section 22500 et seq., (hereinafter the “Act”) to provide for the continued maintenance, operation and servicing of the landscaping improvements installed in and around the drainage facility; and
WHEREAS, the City Council has by previous resolutions established and levied annual assessments for the DFAD No. 1 (hereinafter referred to as the “District”), pursuant to the provisions of the Landscaping and Lighting Act of 1972, being Part 2, Division 15 of the California Streets and Highways Code (commencing with Section 22500) (hereinafter referred to as the “Act”) that provides for the collection of assessments by the County of San Bernardino on behalf of the City to pay for the annual maintenance and servicing of local landscaping and lighting improvements and facilities related thereto; and
WHEREAS, the City Council desires to initiate proceedings for the annexation of territory to the District consisting of Assessor Parcel Number book 0395, page 221, parcel 10; book 0395, page 234, parcels 01, 11 and 12; book 0395, page 245, parcel 04 and 07; book 0395, page 246, parcels 07 and 08; and book 0395 page 254, parcels 02 and 03, Tract Map 20280 and to levy and collect an annual assessment against the lots and parcels of land within Tract Map 20280 commencing in fiscal year 2024/2025 to pay for the operation, maintenance and servicing of local landscaping improvements, and appurtenant facilities related thereto that will provide special benefits to the property pursuant to the Act and the provisions of the California Constitution Article XIIID (hereafter referred to as the “California Constitution”); and,
WHEREAS, the City has retained Willdan Financial Services as the Assessment Engineer, for the purpose of assisting with the annexation of territory designated as Tract Map 20280, the establishment of an annual assessment, and to prepare and file an Engineer’s Report with the City Clerk in accordance with Chapter 4 Article 2 of the Act and the provisions of the California Constitution.

WHEREAS, Section 22605 of the Act permits the City Council to make changes in the organization of an assessment district, including the detachment of territory from an existing assessment district under Act Section 22609 and annexation of territory to an existing assessment under Act Section 22608; and
WHEREAS, in November of 1996, California voters adopted Proposition 218, which among other things, added Article XIIID to the California Constitution (hereinafter 1 3
9 8
9 the “California Constitution”) to impose additional procedures that local agencies must follow prior to adopting new or increasing existing assessments; and WHEREAS, Tract Map 20280 will contribute to paying for the landscaping area in and around the drainage facility along with other Tracts within the boundaries of DFAD No. 1; and
WHEREAS, the City Council finds that Tract Map 20280 should be considered for annexation to DFAD No. 1, based upon requests by property owners for said annexation, the similarity of existing improvements to be serviced, and a need to better provide for the ongoing maintenance of landscape and irrigation improvements in the designated areas of said tract; and

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF VICTORVILLE DOES HEREBY FIND, RESOLVE, DETERMINE AND ORDER AS FOLLOWS:

Section 1. Recitals.

That the recitals set forth above are true and correct, and together with definitions set forth therein, are hereby made part of this Resolution by this reference.

Section 2. Proposed Annexation/Detachment Initiated.

That the City Council hereby initiates proceedings in accordance with the provisions of the Act, the California Constitution, and Government Code section 53753 for the proposed annexation of Tract Map 20280 to DFAD No. 1.

Section 3. Designation of Annexation Area.

That the proposed area to be annexed to DFAD No. 1 is designated as all the territory within the boundaries described in the map attached hereto as Exhibit A and made a part of this Resolution by this reference (“Tract Map 20280”).

Section 3: Proposed Improvements.

The proposed improvements and services to be provided and for which the property shall be assessed, include but are not limited to the regular maintenance, operation and incidental expenses related to the landscaping and irrigation improvements within the public right-of-ways or easements associated with the properties within DFAD No. 1 that shall be maintained by the City for the special benefit of the properties therein.

The Engineer’s Report to be prepared in connection with these proceedings shall provide a more detailed description of the improvements and associated costs.

Section 4: Annual Special Benefit Assessment
The City Council hereby determines that in order to provide an appropriate level of maintenance and related services and activities for the improvements within DFAD No. 1 1 3
9 8
9 as generally described in Section 3 of this resolution, it is necessary to levy an annual special benefit assessment on the lots and parcels within DFAD No. 1, Tract Map 20280 identified in this resolution, commencing in fiscal year 2024/2025.

Section 5: Designation of Engineer; Engineer’s Report
The City Council hereby orders the Assessment Engineer to prepare and file with the City Clerk an Engineer's Report concerning the proposed annexation of Tract Map 20280 into DFAD No. 1, and the proposed levy of special benefit assessment for the property beginning the fiscal year commencing July 1, 2024, and ending June 30, 2025, in accordance with Chapter 3 Section 22622 of the Act. Said Engineer’s Report shall establish the estimated budget of anticipated expenses and the resulting proposed maximum assessment including an annual inflationary adjustment, which will be necessary to provide ongoing funding for the maintenance and servicing of the improvements being proposed; and the assessment so described may only be imposed pursuant to the provisions of the Act and the California Constitution, Article XIIID.

Section 6. Effective Date.

That this Resolution shall be effective immediately upon its adoption. 1 3
9 8
9 Exhibit A

1 4
0 0
0 Attachment B
Resolution No. 23-085
1 4
0 0
0 RESOLUTION NO. 23-085

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

VICTORVILLE INITIATING PROCEEDINGS FOR THE ANNEXATION OF TERRITORY, TRACT MAP 20280 TO VICTORVILLE LANDSCAPE
MAINTENANCE ASSESSMENT DISTRICT NO. 6 (LMAD NO. 6) AND

THE LEVY AND COLLECTION OF ASSESSMENTS RELATED
THERETO COMMENCING WITH FISCAL YEAR 2024/2025
WHEREAS,pursuant to the Landscaping and Lighting Act of 1972, Streets and Highways Code section 22500 et seq., (hereinafter the “Act”) to provide for the continued maintenance, operation and servicing of the public landscaping improvements installed within its boundaries; and
WHEREAS, the City Council has by previous resolutions established and levied annual assessments for the LMAD No. 6 (hereinafter referred to as the “District”), pursuant to the provisions of the Landscaping and Lighting Act of 1972, being Part 2, Division 15 of the California Streets and Highways Code (commencing with Section 22500) (hereinafter referred to as the “Act”) that provides for the collection of assessments by the County of San Bernardino on behalf of the City to pay for the annual maintenance and servicing of local landscaping and lighting improvements and facilities related thereto; and
WHEREAS, the City Council desires to initiate proceedings for the annexation of territory to the District consisting of Assessor Parcel Numbers book 0395, page 221, parcel 10; book 0395, page 234, parcels 01, 11 and 12; book 0395, page 245, parcel 04 and 07; book 0395, page 246, parcels 07 and 08; and book 0395 page 254, parcels 02 and 03,Tract Map 20280 and to levy and collect an annual assessment against the lot and parcel of land within Tract Map 20280 commencing in fiscal year 2024/2025 to pay for the operation, maintenance and servicing of local landscaping improvements, and appurtenant facilities related thereto that will provide special benefits to the property pursuant to the Act and the provisions of the California Constitution Article XIIID (hereafter referred to as the “California Constitution”); and,
WHEREAS, the City has retained Willdan Financial Services as the Assessment Engineer, for the purpose of assisting with the annexation of territory designated as Tract Map 20280, the establishment of an annual assessment, and to prepare and file an Engineer’s Report with the City Clerk in accordance with Chapter 4 Article 2 of the Act and the provisions of the California Constitution.

WHEREAS, Section 22605 of the Act permits the City Council to make changes in the organization of an assessment district, including the detachment of territory from an existing assessment district under Act Section 22609 and annexation of territory to an existing assessment under Act Section 22608; and
WHEREAS, in November of 1996, California voters adopted Proposition 218, which among other things, added Article XIIID to the California Constitution (hereinafter 1 4
0 0
0 the “California Constitution”) to impose additional procedures that local agencies must follow prior to adopting new or increasing existing assessments; and WHEREAS, Tract Map 20280 contains public landscaping areas and related improvements which are similar in nature and type to those of tracts within the boundaries of LMAD No. 6; and
WHEREAS, the City Council finds that Tract Map 20280 should be considered for annexation to LMAD No. 6, based upon requests by property owners for said annexation, the similarity of existing improvements to be serviced, and a need to better provide for the ongoing maintenance of landscape and irrigation improvements in the designated areas of said tract; and

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF VICTORVILLE DOES HEREBY FIND, RESOLVE, DETERMINE AND ORDER AS FOLLOWS:

Section 1. Recitals.

That the recitals set forth above are true and correct, and together with definitions set forth therein, are hereby made part of this Resolution by this reference.

Section 2. Proposed Annexation/Detachment Initiated.

Section 3. Designation of Annexation Area.

That the proposed area to be annexed to LMAD No. 6 is designated as all the territory within the boundaries described in the map attached hereto as Exhibit A and made a part of this Resolution by this reference (“Tract Map 20280”).

Section 3: Proposed Improvements.

The proposed improvements and services to be provided and for which the property shall be assessed, include but are not limited to the regular maintenance, operation and incidental expenses related to the landscaping and irrigation improvements within the public right-of-ways or easements associated with the properties within LMAD No. 6 that shall be maintained by the City for the special benefit of the properties therein.

The Engineer’s Report to be prepared in connection with these proceedings shall provide a more detailed description of the improvements and associated costs.

Section 4: Annual Special Benefit Assessment
The City Council hereby determines that in order to provide an appropriate level of maintenance and related services and activities for the improvements within LMAD No. 6 1 4
0 0
0 as generally described in Section 3 of this resolution, it is necessary to levy an annual special benefit assessment on the lot and parcel within LMAD No. 6, Tract Map 20280 identified in this resolution, commencing in fiscal year 2024/2025.

Section 5: Designation of Engineer; Engineer’s Report
The City Council hereby orders the Assessment Engineer to prepare and file with the City Clerk an Engineer's Report concerning the proposed annexation of Tract Map 20280 into LMAD No. 6, and the proposed levy of special benefit assessment for the property beginning the fiscal year commencing July 1, 2024, and ending June 30, 2025, in accordance with Chapter 3 Section 22622 of the Act. Said Engineer’s Report shall establish the estimated budget of anticipated expenses and the resulting proposed maximum assessment including an annual inflationary adjustment, which will be necessary to provide ongoing funding for the maintenance and servicing of the improvements being proposed; and the assessment so described may only be imposed pursuant to the provisions of the Act and the California Constitution, Article XIIID.

Section 6. Effective Date.

That this Resolution shall be effective immediately upon its adoption. 1 4
0 0
0 Exhibit A

1 4
0 0
4 Attachment C
Resolution No. 23-086
1 4
0 0
4 RESOLUTION NO. 23-086

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
VICTORVILLE PRELIMINARILY APPROVING THE ENGINEER’S
REPORT FILED IN SUPPORT OF ANNEXATION OF TRACT MAP 20280

TO VICTORVILLE DRAINAGE FACILITIES ASSESSMENT DISTRICT
NO. 1
WHEREAS, on October 3 rd, the City Council of the City of Victorville (the “City Council”) adopted a Resolution initiating proceeding for annexing Tract Map 20280 to the City of Victorville Drainage Facilities Assessment District No. 1(“DFAD No. 1”) to provide for the continued maintenance, operation, and servicing of certain landscape improvements is said tract; and
WHEREAS, the provisions of the Landscaping and Lighting Act of 1972, Streets and Highways Code section 22500 et seq. (the “Act”), the applicable provisions of Proposition 218 (Article XIIID of the California Constitution), and Government Code section 53753, (collectively hereinafter the “California Constitution”), the City Engineer or representative has prepared and filed an engineer’s report (the “Report”) with the City Clerk relating to the annexation of said tract, which is now being submitted to the City Council for consideration and preliminary approval.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF VICTORVILLE DOES HEREBY FIND, RESOLVE, DETERMINE AND ORDER AS FOLLOWS:

Section 1. Recitals.

That the recitals set forth above are true and correct, and together with the definitions set forth therein, are hereby made part of this Resolution by this reference.

Section 2. Contents of Engineer’s Report.

That the Report for the Annexation of Tract Map 20280 to DFAD No.1 presented for City Council consideration contains the following:
a. A description of the Improvements (Plans and Specifications); and b. The Method of Apportionment of the Assessment detailing the method of calculating the proportional special benefits and the annual assessment obligation for each affected parcel, including a description of the Cost Inflator and Utility Increase formulas that provide for annual inflationary adjustments to the maximum assessment rate currently in effect in DFAD No. 1; and c. The Estimate of Costs (including the costs of annexation) for providing the improvements and services, and the current maximum assessment rate for properties in DFAD No.1; and
d. An Assessment Diagram (Boundary Map); and
1 4
0 0
4 e. An Assessment Roll containing the assessment to be levied for each Assessors’ Parcel Number (APN), attached hereto as Exhibit A, within Tract Map 20280 in accordance with the Estimate of Costs.

Section 3. Approval of Engineer’s Report.

That the Report presented together with this Resolution is hereby approved on a preliminary basis, as submitted, or amended by direction of the City Council and is hereby ordered to be filed in the Office of the City Clerk as a permanent record and to remain open to public inspection.

Section 4. Effective Date.

That this Resolution shall be effective immediately upon its adoption.

Section 5. Certification.

That the City Clerk shall certify to the passage and adoption of this Resolution; shall enter the same in the book of original Resolutions of the City; and shall make a minute of passage and adoption thereof in the records of the proceedings of the City Council, in the minutes of the meeting at which the Resolution is passed and adopted. 1 4
0 0
4 EXHIBIT A
ASSESSOR’S PARCEL NUMBERS
APN Trac
t Property Owner Land Use EB
U
Maximum Rate
per Equivalent
Benefit Unit
2023/2024
Maximum
Assessme
nt
2023/2024
0395-221-10-
0000
2028
0 72 LOTS VICTORVILLE
LLC

RESIDENTI
AL 9.99 $238.01 $2,377.72
0395-234-01-
0000
2028
0 72 LOTS VICTORVILLE
LLC

RESIDENTI
AL

10.0 7 $238.01 $2,396.76
0395-234-11-
0000
2028
0 72 LOTS VICTORVILLE
LLC

RESIDENTI
AL 2.69 $238.01 $640.25
0395-234-12-
0000
2028
0 72 LOTS VICTORVILLE
LLC

RESIDENTI
AL 4.98 $238.01 $1,185.29
0395-245-04-
0000
2028
0 72 LOTS VICTORVILLE
LLC

RESIDENTI
AL 3.71 $238.01 $883.02
0395-245-07-
0000
2028
0 72 LOTS VICTORVILLE
LLC

RESIDENTI
AL 7.42 $238.01 $1,766.03
0395-246-07-
0000
2028
0 72 LOTS VICTORVILLE
LLC

RESIDENTI
AL 8.07 $238.01 $1,920.74
0395-246-08-
0000
2028
0 72 LOTS VICTORVILLE
LLC

RESIDENTI
AL 6.97 $238.01 $1,658.93
0395-254-02-
0000
2028
0 72 LOTS VICTORVILLE
LLC

RESIDENTI
AL 8.19 $238.01 $1,949.30
0395-254-03-
0000
2028
0 72 LOTS VICTORVILLE
LLC

RESIDENTI
AL 9.91 $238.01 $2,358.68
Note: Tract 20280 will build out to 72 Single-Family Residential Lots which equates to 72 Equivalent Benefit Units (EBUs).
1 4
0 0
5 Attachment D
Resolution No. 23-087
1 4
0 0
5 RESOLUTION NO. 23-087

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
VICTORVILLE PRELIMINARILY APPROVING THE ENGINEER’S
REPORT FILED IN SUPPORT OF ANNEXATION OF TRACT MAP 20280

TO VICTORVILLE LANDSCAPE MAINTENANCE ASSESSMENT
DISTRICT NO. 6
WHEREAS, on October 3 rd, the City Council of the City of Victorville (the “City Council”) adopted a Resolution initiating proceeding for annexing Tract Map 20280 to the City of Victorville Landscape Maintenance Assessment District No. 6 (“LMAD No. 6”) to provide for the continued maintenance, operation, and servicing of certain landscape improvements is said tract; and
WHEREAS, the provisions of the Landscaping and Lighting Act of 1972, Streets and Highways Code section 22500 et seq. (the “Act”), the applicable provisions of Proposition 218 (Article XIIID of the California Constitution), and Government Code section 53753, (collectively hereinafter the “California Constitution”), the City Engineer or representative has prepared and filed an engineer’s report (the “Report”) with the City Clerk relating to the annexation of said tract, which is now being submitted to the City Council for consideration and preliminary approval.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF VICTORVILLE DOES HEREBY FIND, RESOLVE, DETERMINE AND ORDER AS FOLLOWS:

Section 1. Recitals.

That the recitals set forth above are true and correct, and together with the definitions set forth therein, are hereby made part of this Resolution by this reference.

Section 2. Contents of Engineer’s Report.

That the Report for the Annexation of Tract Map 20280 to LMAD No. 6 presented for City Council consideration contains the following:
a. A description of the Improvements (Plans and Specifications); and b. The Method of Apportionment of the Assessment detailing the method of calculating the proportional special benefits and the annual assessment obligation for each affected parcel, including a description of the Cost Inflator and Utility Increase formulas that provide for annual inflationary adjustments to the maximum assessment rate currently in effect in LMAD No. 6; and c. The Estimate of Costs (including the costs of annexation) for providing the improvements and services, and the current maximum assessment rate for properties in LMAD No. 6; and
d. An Assessment Diagram (Boundary Map); and
1 4
0 0
5 e. An Assessment Roll containing the assessment to be levied for each Assessors’ Parcel Number (APN), attached hereto as Exhibit A, within Tract Map 20280 in accordance with the Estimate of Costs.

Section 3. Approval of Engineer’s Report.

Section 4. Effective Date.

That this Resolution shall be effective immediately upon its adoption.

Section 5. Certification.

That the City Clerk shall certify to the passage and adoption of this Resolution; shall enter the same in the book of original Resolutions of the City; and shall make a minute of passage and adoption thereof in the records of the proceedings of the City Council, in the minutes of the meeting at which the Resolution is passed and adopted. 1 4
0 0
5 EXHIBIT A
ASSESSOR’S PARCEL NUMBERS
APN Trac
t Property Owner Land Use EB
U
Maximum Rate
per Equivalent
Benefit Unit
2023/2024
Maximum
Assessment
2023/2024
0395-221-10-
0000
2028
0 72 LOTS VICTORVILLE
LLC

RESIDENTI
AL 9.99 168.63 $1,684.61
0395-234-01-
0000
2028
0 72 LOTS VICTORVILLE
LLC

RESIDENTI
AL

10.0 7 168.63 $1,698.10
0395-234-11-
0000
2028
0 72 LOTS VICTORVILLE
LLC

RESIDENTI
AL 2.69 168.63 $453.61
0395-234-12-
0000
2028
0 72 LOTS VICTORVILLE
LLC

RESIDENTI
AL 4.98 168.63 $839.78
0395-245-04-
0000
2028
0 72 LOTS VICTORVILLE
LLC

RESIDENTI
AL 3.71 168.63 $625.62
0395-245-07-
0000
2028
0 72 LOTS VICTORVILLE
LLC

RESIDENTI
AL 7.42 168.63 $1,251.23
0395-246-07-
0000
2028
0 72 LOTS VICTORVILLE
LLC

RESIDENTI
AL 8.07 168.63 $1,360.84
0395-246-08-
0000
2028
0 72 LOTS VICTORVILLE
LLC

RESIDENTI
AL 6.97 168.63 $1,175.35
0395-254-02-
0000
2028
0 72 LOTS VICTORVILLE
LLC

RESIDENTI
AL 8.19 168.63 $1,381.08
0395-254-03-
0000
2028
0 72 LOTS VICTORVILLE
LLC

RESIDENTI
AL 9.91 168.63 $1,671.12
Note: Tract 20280 will build out to 72 Single-Family Residential Lot which equals 72 Equivalent Benefit Units (EBUs). 1 4
0 0
2 Attachment E
Resolution No. 23-088
1 4
0 0
2 RESOLUTION NO. 23-088

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VICTORVILLE DECLARING ITS INTENTION TO ANNEX TRACT MAP 20280 TO VICTORVILLE DRAINAGE FACILITIES ASESSMENT DISTRICT NO. 1, TO LEVY ASSESSMENTS ON TRACT MAP 20280 FOR FISCAL YEAR 2024/2025; SETTING A PUBLIC HEARING ON THE PROPOSED ANNEXATION AND ASSESSMENTS; AND

ORDERING HEARING NOTICES AND ASSESSMENT BALLOTS TO BE MAILED TO THE PROPERTY OWNERS IN TRACT MAP 20280
WHEREAS, the City Council of the City of Victorville (the “City”) pursuant to the provisions of the Landscaping and Lighting Act of 1972, being Part 2, Division 15 of the California Streets and Highways Code, commencing with Section 22500 (hereafter referred to as the “Act”), did initiate proceedings for the annexation of territory to the Drainage Facilities Assessment District No. 1 (hereafter referred to as the “DFAD No. 1”), consisting of Assessor Parcel Number book 0395, page 221, parcel 10, page 234, parcels 01, 11 and 12, page 245, parcels 04 and 07, page 246, parcels 07 and 08 and page 254, parcels 02 and 03, Tract Map 20280, and the proposed levy and collection of annual special benefit assessment related thereto commencing in Fiscal Year 2024/2025; and, WHEREAS, the City Council desires to annex Tract Map 20280 into DFAD No. 1, and to levy and collect an annual assessment against the lots and parcels of land within said territory to pay the cost and expenses related to the maintenance, servicing and operation of landscape improvements in and around drainage facilities that provide special benefits to the parcels of land therein as authorized by the Act and the provisions of the California Constitution Article XIIID (hereafter referred to as the “California Constitution”); commencing in Fiscal Year 2024/2025, if no majority protest exist and, WHEREAS, the Assessment Engineer of Work, Willdan, has prepared and filed with the City Clerk an Engineer’s Report (hereafter referred to as the “Report”) in connection with such annexation proceedings and the proposed levy of assessment commencing with fiscal year 2024/2025 (said fiscal year beginning July 1, 2024, ending June 30, 2025); in accordance with the Act and the California Constitution; and said Report has been presented to the City Council.

WHEREAS, pursuant to Article XIIID of the California Constitution, Sections 22605 through 22608 and 22588 of the Act, and Government Code section 53753, the City Council desires to set a public hearing for the proposed annexation of Tract Map 20280 into DFAD No. 1, and to further order the mailing of notices and assessment ballots to the property owners in Tract Map 20280; and

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF VICTORVILLE DOES HEREBY FIND, RESOLVE, DETERMINE AND ORDER AS FOLLOWS:

Section 1. Recitals.

That the recitals set forth above are true and correct, and together with the definitions set forth therein, are hereby made part of this Resolution by this reference. 1 4
0 0
2 Section 2. Territory.

The territory of land to be annexed to the District incorporates all of the lots and parcels of land that will receive a special benefit from the improvements to be maintained, operated, and serviced through DFAD No. 1 and those lots and parcels of land are inclusive of Assessor Parcel Number book 0395, page 221, parcel 10, page 234, parcels 01, 11 and 12, page 245, parcels 04 and 07, page 246, parcels 07 and 08 and page 254 parcels 02 and 03, which is planned to develop out to 72 Single-Family Residential lots.

Section 3. Improvements.

That the proposed improvements to be provided, and for which the properties in Tract Map 20280 shall then be assessed following said annexation, are the regular maintenance, servicing, rehabilitation, and irrigation of the landscaping within the DFAD No. 1. Exhibit A outlines a preliminary budget based the overall expenses for DFAD No. 1 for Fiscal Year 2023/2024, complete budget for DFAD No. 1 can be found in the consolidated Drainage Facilities Assessment District Engineer’s Report on file with the City Clerk. Said improvements have been determined to be of special benefit to said properties.

Section 4. Intention to Annex and Levy Assessments.

The City Council hereby declares its intention to annex the territory of land to the DFAD No. 1 designated as Tract Map 20280, and to levy and collect annual assessments against the parcels of land within said territory to fund the ongoing cost and expenses of maintaining, operating, and servicing the improvements determined to be of special benefit to the parcels of land therein as outlined in the Engineer’s Report prepared in connection therewith, commencing in fiscal year 2024/2025. The City Council finds that the public’s best interest requires such action and levy of assessments Section 5. Public Hearing.

The City Council hereby declares its intention to conduct a public hearing concerning the levy of assessments for Tract Map 20280 in accordance with Government Code, Section 54954.6 and California Constitution, Article XIIID, Section 4(e); and, notice is hereby given that a public hearing on these matters will be held by the City Council on November 21, 2023, at 6:00 P.M., or as soon thereafter as feasible, in the City Council Chambers located at 14343 Civic Drive, Victorville, California 92392. At the Public Hearing, all interested persons shall be afforded the opportunity to hear and be heard.

Section 6. Assessment Balloting.

Pursuant to Article XIIID of the California Constitution, an assessment ballot proceeding is hereby called on the matter of confirming the proposed assessment for Tract Map 20280. The ballots and notices so authorized shall be distributed by first class mail to the property owners of record as of the last County equalized roll, and property owner or owners of each affected parcel may return the ballot by mail or in person to the City Clerk not later than the conclusion of the public hearing for these matters. 1 4
0 0
2 Section 7. Notice and Ballots.

The City Council hereby authorizes and directs the City Clerk or their designee to prepare and mail notice of the Public Hearing and property owner protest ballots to the property owners of record regarding the proposed assessment including the assessment range formula as outlined in the Report, for return receipt prior to the date and time of the public hearing set forth in this Resolution; and, the notice of the hearing and ballot shall be distributed by first class mail to the property owner(s) of record for each parcel within Tract Map 20280 subject to an assessment, not less than 45 days before the date of the public hearing pursuant to the California Constitution.

Section 8. Protest Proceedings.

The property owner protest ballot proceeding conducted for Tract Map 20280 shall constitute the property owners’ approval or rejection of the annual levy of assessments and assessment range formula described in the Report presented and approved by the City Council. The property owner may return the ballot by mail or in person to the City Clerk no later than the conclusion of the public hearing scheduled for November 21, 2023. After the close of the Public Hearing, pursuant to Section 4 (e) of the California Constitution, the City Clerk or their designee shall open and tabulate the ballots returned to determine if majority protest exists. Only those ballots issued by or on behalf of the City and signed by the property owner of record or authorized representative, shall be considered as valid ballots, and shall be weighted according to the proportional financial obligation of each affected property. Majority protest exists if, upon the conclusion of the hearing, valid ballots submitted in opposition to the assessment exceed the ballots submitted in favor of the assessment; and, in addition to the ballot proceedings, property owners may also file a separate written protest with the City Clerk prior to the conclusion of the hearing, or having previously filed such protest, may file a written withdrawal of that protest. A written protest shall state all grounds of objection and shall contain a description sufficient to identify the property owned by such property owner. At the public hearing, all interested persons shall be afforded the opportunity to hear and be heard.
1 4
0 0
2 EXHIBIT A

DESIGNATED DRAINAGE LANDSCAPE MAINTENANCE AREAS
ESTIMATE OF BUDGET FOR FISCAL YEAR 2023/2024 TRACT MAP 20280

PROPOSED TO BE ANNEXED INTO DRAINAGE FACILITIES ASSESSMENT DISTRICT NO. 1 FOR FISCAL YEAR 2023-2024
APN: 0395-221-10, 0395-234-01,11 & 12, 0395-245-04 & 07; 0395-246-07 & 08; and 0395-254-02 & 03
FISCAL YEAR 2023/2024 BUDGET
DESCRIPTION Tract
20280
UTILITIES-ELECTRICITY $5
UTILITIES-WATER USAGE $197
TELEPHONE $39
UTILITIES SUB-TOTAL $241
CITY ADMINISTRATION $130
CONSULTING SERVICES 59
COUNTY FEES 35
ADMINISTRATION SUB-TOTAL $224
MAINTENANCE STAFF SALARY AND BENEFITS $6,75
4 CONTRACT SERVICES $3,02
9 GROUNDS MAINTENANCE $449
IRRIGATION MAINTENANCE $180
INFRASTRUCTURE REPAIRS $198
VEHICLES AND EQUIPMENT $225
TOOLS AND SMALL EQUIPMENT $275
VANDALISM/ACCIDENTS $2,16
8 MAINTENANCE SUB-TOTAL $13,2
80 EXPENDITURE BUDGET $13,7
44 GENERAL BENEFIT CONTRIBUTION $0
RESERVE COLLECTION/CONTRIBUTION 1,841
BALANCE TO LEVY $15,5
85 Equivalent Benefit Units at Built-Out 72.00
FY 2023/24 Assessment Rate $216.
46 FY 2023/24 Assessment Rate Not Built $1.00
1 4
0 0
2 FY 2023/24 Max. Allowable Assessment per Benefit Unit- Built
$238.
01 FY 2023/24 Max. Allowable Assessment per Benefit Unit-Not Built Out $1.00
1 4
0 0
1 Attachment F
Resolution No. 23-089
1 4
0 0
1 RESOLUTION NO. 23-089

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VICTORVILLE DECLARING ITS INTENTION TO ANNEX TRACT MAP 20280 TO VICTORVILLE LANDSCAPE MAINTENANCE ASSESSMENT DISTRICT NO. 6, TO LEVY ASSESSMENTS ON TRACT MAP 20280 FOR FISCAL YEAR 2024/2025; SETTING A PUBLIC HEARING ON THE PROPOSED ANNEXATION AND ASSESSMENTS;

AND ORDERING HEARING NOTICES AND ASSESSMENT BALLOTS TO BE MAILED TO THE PROPERTY OWNERS IN TRACT MAP 20280
WHEREAS, the City Council of the City of Victorville (the “City”) pursuant to the provisions of the Landscaping and Lighting Act of 1972, being Part 2, Division 15 of the California Streets and Highways Code, commencing with Section 22500 (hereafter referred to as the “Act”), did initiate proceedings for the annexation of territory to the Landscape Maintenance Assessment District No. 6 (hereafter referred to as the “LMAD No. 6”), consisting of Assessor Parcel Number book 0395, page 221, parcel 10, page 234, parcels 01, 11 and 12, page 245, parcels 04 and 07, page 246, parcels 07 and 08 and page 254 parcels 02 and 03, Tract Map 20280, and the proposed levy and collection of annual special benefit assessment related thereto commencing in Fiscal Year 2024/2025; and,
WHEREAS, the City Council desires to annex Tract Map 20280 into LMAD No. 6, and to levy and collect an annual assessment against the lots and parcels of land within said territory to pay the cost and expenses related to the maintenance, servicing and operation of local landscape improvements that provide special benefits to the parcels of land therein as authorized by the Act and the provisions of the California Constitution Article XIIID (hereafter referred to as the “California Constitution”); commencing in Fiscal Year 2024/2025, if no majority protest exist and,
WHEREAS, the Assessment Engineer, Willdan has prepared and filed with the City Clerk an Engineer’s Report (hereafter referred to as the “Report”) in connection with such annexation proceedings and the proposed levy of assessment commencing with fiscal year 2024/2025 (said fiscal year beginning July 1, 2024, ending June 30, 2025); in accordance with the Act and the California Constitution; and said Report has been presented to the City Council.

WHEREAS, pursuant to Article XIIID of the California Constitution, Sections 22605 through 22608 and 22588 of the Act, and Government Code section 53753, the City Council desires to set a public hearing for the proposed annexation of Tract Map 20280 into LMAD No. 6, and to further order the mailing of notices and assessment ballots to the property owners in Tract Map 20280; and

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF VICTORVILLE DOES HEREBY FIND, RESOLVE, DETERMINE AND ORDER AS FOLLOWS:

Section 1. Recitals.

That the recitals set forth above are true and correct, and together with the definitions set forth therein, are hereby made part of this Resolution by this reference.

Section 2. Territory.
1 4
0 0
1 The territory of land to be annexed to the District incorporates all of the lots and parcels of land that will receive a special benefit from the improvements to be maintained, operated, and serviced through LMAD No. 6 and those lots and parcels of land are inclusive of Assessor Parcel Number book 0395, page 221, parcel 10, page 234, parcels 01, 11 and 12, page 245, parcels 04 and 07, page 246, parcels 07 and 08 and page 254 parcels 02 and 03, which is planned to develop out to 72 Single-Family Residential lots.

Section 3. Improvements.

That the proposed improvements to be provided, and for which the properties in Tract Map 20280 shall then be assessed following said annexation, are the regular maintenance, servicing, rehabilitation, and irrigation of the landscaping within the LMAD No. 6. Exhibit A outlines a preliminary budget based the overall expenses for LMAD No. 6 for Fiscal Year 2023/2024, complete budget for LMAD no. 6 can be found in the consolidated Landscape Maintenance Assessment District Engineer’s Report on file with the City Clerk. Said improvements have been determined to be of special benefit to said properties.

Section 4. Intention to Annex and Levy Assessments.

The City Council hereby declares its intention to annex the territory of land to the LMAD No. 6 designated as Tract Map 20280, and to levy and collect annual assessment against the parcel of land within said territory to fund the ongoing cost and expenses of maintaining, operating, and servicing the improvements determined to be of special benefit to the parcel of land therein as outlined in the Engineer’s Report prepared in connection therewith, commencing in fiscal year 2024/2025. The City Council finds that the public’s best interest requires such action and levy of assessments Section 5. Public Hearing.

Section 6. Assessment Balloting.

Section 8. Protest Proceedings.

DESIGNATED LANDSCAPE MAINTENANCE AREA
ESTIMATE OF BUDGET FOR FISCAL YEAR 2023/2024 TRACT MAP 20280

PROPOSED TO BE ANNEXED INTO LANDSCAPE MAINTENANCE ASSESSMENT DISTRICT NO. 6 FOR FISCAL YEAR 2023-2024
APN: 0395-221-10, 0395-234-01,11 & 12, 0395-245-04 & 07; 0395-246-07 & 08; and 0395-254-02 & 03
FISCAL YEAR 2023/2024 BUDGETS
DESCRIPTION Tract 20280
UTILITIES-ELECTRICITY $91
UTILITIES-WATER USAGE 1,512
TELEPHONE 125
UTILITIES SUB-TOTAL $1,728
CITY ADMINISTRATION $106
CONSULTING SERVICES 56
COUNTY FEES 18
ADMINISTRATION SUB-TOTAL $180
MAINTENANCE STAFF SALARY AND BENEFITS $1,660
CONTRACT SERVICES 4,581
GROUNDS MAINTENANCE 210
IRRIGATION MAINTENANCE 452
INFRASTRUCTURE REPAIRS 17
VEHICLES AND EQUIPMENT 219
TOOLS AND SMALL EQUIPMENT 74
VANDALISM/ACCIDENTS 1,296
MAINTENANCE SUB-TOTAL $8,510
EXPENDITURE BUDGET $10,418
BALANCE TO LEVY $10,418
Equivalent Benefit Units at Build Out 72.00
FY 2023/24 Assessment Rate $144.70
FY 2023/24 Assessment Rate Not Built $1.00
FY 2023/24 Max. Allowable Assessment per Benefit Unit $168.63 FY 2023/24 Max. Allowable Assessment per Benefit Unit-
Not Build Out $1.00
Attachment G
Vicinity
Map

Attachment H
Engineer’s Reports

&LW\RI9LFWRUYLOOH

(QJLQHHU¶V5HSRUW
'UDLQDJH)DFLOLWLHV$VVHVVPHQW
'LVWULFW1R
$QQH[DWLRQRI7UDFW0DS

&RPPHQFLQJ)LVFDO<HDU

,QWHQW0HHWLQJ
2FWREHU
3XEOLF+HDULQJ
1RYHPEHU

9LD,QGXVWULD
6XLWH
7HPHFXOD&$

7

)

ZZZZLOOGDQFRPILQDQFLDO

(1*,1((5
6$11(;$7,215(3257$)),'$9,7
&LW\RI9LFWRUYLOOH
'UDLQDJH)DFLOLWLHV$VVHVVPHQW'LVWULFW1R
$QQH[DWLRQRI7UDFW0DS
&RPPHQFLQJLQ)LVFDO<HDU
&LW\RI9LFWRUYLOOH
6DQ%HUQDUGLQR&RXQW\6WDWHRI&DOLIRUQLD

$VSDUWRIWKH5HVROXWLRQRI,QWHQWLRQSDFNHWSUHVHQWHGIRUWKH FRQVLGHUDWLRQRIWKH9LFWRUYLOOH&LW\&RXQFLO WKLV 5HSRUW DQG WKH HQFORVHG EXGJHW GLDJUDP DQG GHVFULSWLRQ RXWOLQH VSHFLILF SURSRVHG FKDQJHV WR WKH 'UDLQDJH)DFLOLWLHV$VVHVVPHQW'LVWULFW1RIRUILVFDO\HDULQFOXGLQJWKHDQQH[DWLRQRI7HUULWRU\ WRWKH'LVWULFW
WKHH[SDQVLRQRIWKHLPSURYHPHQWVWREHPDLQWD LQHGZLWKLQWKH'LVWULFWDQGWKHSURSRVHG DQQXDODVVHVVPHQWVIRUDOOSDUFHOVZLWKLQWKH$QQH[DWLRQ7HUULW RU\FRPPHQFLQJLQ)LVFDO<HDU 5HIHUHQFHLVKHUHE\PDGHWRWKH6DQ%HUQDUGLQR&RXQW\$VVHVVRU¶V3DUFHO0DSIRUDGHWDLOHGGHVFULSWLRQRI WKHOLQHVDQGGLPHQVLRQVRIWKHSDUFHODQQH[DWLRQWHUULWRU\NQRZQDV7UDFW0DSWKDWZLOOEHVXEMHFWWR WKHSURSRVHGDQQXDODVVHVVPHQW
7KHXQGHUVLJQHGUHVSHFWIXOO\VXEPLWVWKHHQFORVHG5HSRUWDVGLUHFWHGE\WKH&LW\&RXQFLO
'DWHGWKLVBBBBBBGD\RIBBBBBBBBBBBB

%\
BBBBBBBBBBBBBBBBBBBBBBBBBBBBB
)UHG\$%RQLOOD3(
$FWLQJ&LW\(QJLQHHU

:LOOGDQ)LQDQFLDO6HUYLFHV
$VVHVVPHQW(QJLQHHU

%\
BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB %\
BBBBBBBBBBBBBBBBBBB BBBBBBBBB
6WDFHH5H\QROGV 7\URQH3HWHU 6HQLRU3URMHFW0DQDJHU 3(&

, +(5(%< &(57,)< WKH HQFORVHG (QJLQHHU¶V 5HSRUW WRJHWKHU ZLWK$VVHVVPHQW 5ROO DQG $VVHVVPHQW 'LDJUDPWKHUHWRDWWDFKHGZDVILOHGZLWKPHRQWKHBBBBBGD\RIBBBBBBBB
%\
BBBBBBBBBBBBBBBBBBBBBBBBBBBB
&LW\&OHUN&LW\RI9LFWRUYLOOH &RXQW\RI6DQ%HUQDUGLQR&DOLIRUQLD

, +(5(%< &(57,)< WKH HQFORVHG (QJLQHHU¶V 5HSRUW WRJHWKHU ZLWK$VVHVVPHQW 5ROO DQG $VVHVVPHQW 'LDJUDP WKHUHWR DWWDFKHG ZDV DSSURYHG DQG FRQILUPHG E\ WKH &LW\ &RXQFLO RI WKH &LW\ RI 9LFWRUYLOOH &DOLIRUQLDRQWKHBBBBBGD\RIBBBBBBBB

%\
BBBBBBBBBBBBBBBBBBBBBBBBBBBB
&LW\&OHUN&LW\RI9LFWRUYLOOH &RXQW\RI6DQ%HUQDUGLQR&DOLIRUQLD

7DEOHRI&RQWHQWV
,1752'8&7,21 '5$,1$*()$&,/,7,(6$66(660(17',675,&712 +,6725,&$/%$&.*5281' $11(;$7,217(55,725< 352&((',1*6$1'5(3257&217(17 %DOORW3URFHHGLQJV 5HSRUW&RQWHQW 3$57,³3/$16$1'63(&,),&$7,216 '(6&5,37,212)7+(',675,&7 (;,67,1*75$&76,1',675,&7 $11(;$7,217(55,725<),6&$/<($5 3$57,,³0(7+2'2)$33257,210(17 /(*,6/$7,9(5(48,5(0(176)25$66(660(176 %(1(),7$1$/<6,6 /DQGVFDSLQJ6SHFLDO%HQHILW /DQGVFDSLQJ*HQHUDO%HQHILW
$66(660(170(7+2'2/2*<
([HPSW3URSHUWLHV $QQXDO,QIODWLRQDU\$GMXVWPHQW
$VVHVVPHQW5DQJH)RUPXOD

3$57,,,³(67,0$7(2)&2676 352326('%8'*(7$1'$66(660(176 $QQH[DWLRQ7HUULWRU\%XGJHW)LVFDO<HDU 3$57,9³%281'$5<',$*5$0 3$579³$66(660(1752// 9LFWRUYLOOH'UDLQDJH)DFLOLWLHV$VVHVVPHQW'LVWULFW1R (QJLQHHU¶V5HSRUW
$QQH[DWLRQRI7UDFW0DS
)LVFDO<HDU

3DJH
,QWURGXFWLRQ
7KH&LW\RI9LFWRUYLOOH
³&LW\ ´
XQGHUWKHSURYLVLRQVRIWKH/ DQGVFDSLQJDQG/LJKWLQJ$FWRI 3DUWRI
'LYLVLRQRIWKH&DOLIRUQLD6WUHHWVDQG+LJKZD\V&RGH ³
$FW´
HVWDEOLVKHGWKHDVVHVVPHQWGLVWULFW
GHVLJQDWHGDV

'5$,1$*()$&,/,7,(6$66(660(17',675,&712

KHUHLQDIWHU UHIHUUHGWR DV ³')$' 1R ´ RU ³'LVWULFW´ 3XUVXDQW WR WKH SURYLVLRQVRI WKH
$FWDQG LQ
FRPSOLDQFH ZLWK WKH VXEVWDQWLYH DQG SURFHGXUDO UHTXLUHPHQWV RI $UWLFOH ;,,,' RI WKH &DOLIRUQLD 6WDWH &RQVWLWXWLRQ
WKH³&DOLIRUQLD&RQVWLWXWLRQ´
WKH&LW\&RXQFLORIWKH&LW\RI9LFWRUYLOOH
³&LW\&RXQFLO´
SURSRVHV
WRDQQH[7UDFW0DSH[SDQGLQJWKHLPSURYHPHQWVWREHSURYLGHGDQGPDLQWDLQHGZLWKLQWKH')$'1R DQG WR FRQGXFW D SURWHVW EDOORW SURFHHGLQJ IRU VSHFLDO EHQHILW DVVHVVPHQWV WREH OHYLHGDQG FROOHFWHG DQQXDOO\RQWKHSDUFHOVZLWKLQWKH$QQH[DWLRQ7HUULWRU\LQRUGH UWRIXQGLQZKROHRULQSDUWWKHPDLQWHQDQFH DQGRSHUDWLRQRIFHUWDLQSXEOLFLPSURYHPHQWVWKDWPD\LQFOXGHEXWLVQRWOLPLWHGWRODQGVFDSHFUHZVEDVLQV DQG DSSXUWHQDQW IDFLOLWLHV WKDW SURYLGH VSHFLDO EHQHILWV WR WKRVH SURSHUWLHV FRPPHQFLQJ LQ )LVFDO <HDU
$VUHTXLUHGSXUVXDQWWR&KDSWHU$UWLFOHRIWKH
$FWW KLV'UDLQDJH)DFLOLWLHV$VVHVVPHQW'LVWULFW
(QJLQHHU¶V5HSRUW
³5HSRUW´
VKDOOVHUYHDVWKHGHWDLOHGHQJLQHHU¶VUHSRUWIRUWKHDQQH[DWLRQRI7HUULWRU\WR 'UDLQDJH)DFLOLWLHV$VVHVVPHQW'LVWULFW1RIRU7UDFW0DS KHUHDIWHUUHIHUUHGWRDVWKH³$QQH[DWLRQ
7HUULWRU\´
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
V6XEGLYLVLRQ2UGLQDQFHDQ GLVDUHTXLUHPHQWIRULVVXDQFHRIDSHUPLW IRUFRQVWUXFWLRQRIFRPPHUFLDOUHVLGHQWLDODQGSODQQHGXQLWG HYHORSPHQW7KHVHLPSURYHPHQWVJHQHUDOO\ LQFOXGHEXWDUHQRWOLPLWHGWRVWUHHWOLJKWVDQGUHODWHGHTXLSP HQWDQGIL[WXUHV YDULRXVODQGVFDSHPDWHULDOV
VXFKDVWUHHVWXUIVKUXEVYLQHVDQGJURXQGFRYHU
LUULJDWLR QDQGGUDLQDJHV\VWHPV
VWUXFWXUDODPHQLWLHV
VXFKDVPRQXPHQWVEORFNZDOOVUHWDLQLQJZDOOVRURWKHUIHQFLQJ KDUGVFDSHVLQFOXGLQJPXOFKWUDLODQGSDWK
VXUIDFHV VWDPSHG FRQFUHWH DQG SDYHUV
UHFUHDWLRQDO DPHQLWLHV VXFK DV EHQFKHV SLFQLF IDFLOLWLHV SOD\

VTXDUHIHHWRIGHWHQWLRQ
EDVLQVGUDLQDJHFKDQQHOVDQGSHULPHWHUODQGVFDSLQJORFDWHGWKURXJKRXWWKH&LW\
$11(;$7,217(55,725<
7KH$QQH[DWLRQ7HUULWRU\FRQVLVWVRIDOOORWVDQGSDUFHOVRIODQGZLWKLQWKHSODQQHGGHYHORSPHQWLGHQWLILHGDV 7UDFW0DSZKLFKZLOOGHYHORSRXWWRVHYHQW\WZR

UHVLGHQWLDOXQLWV
7KLV5HSRUWKDVEHHQSUHSDUHGSXUVXDQWWRWKHSURYLVLRQVRIWKH&DOLIRUQLD&RQVWLWXWLRQDQGWKH $FWDQG
VKDOOVHUYHDVWKHGHWDLOHGHQJLQHHU¶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

DQG
DQG

DQG
DQG
DQGDQGE\UHIHUHQFHWKRVHSODQV
DQGVSHFLILFDWLRQVDUHPDGHSDUWRIWKLV5HSRUW
7KHHVWLPDWHGEXGJHWSURYLGHGKHUHLQLVEDVHGRQWKH&LW\¶VHVW LPDWHRIWKH$QQH[DWLRQ7HUULWRU\H[SHQVHV IRU ORFDO LPSURYHPHQWV DQG VHUYLFHV LQ WKH $QQH[DWLRQ 7HUULWRU\ 7KH UHVXOWLQJ DQQXDO DVVHVVPHQWV DUH FDOFXODWHGXWLOL]LQJWKHPHWKRGRIDSSRUWLRQPHQWHVWDEOLVKHGXQGHU3DUW,,0HWKRGRI$SSRUWLRQPHQWDQGDUH PDGHSXUVXDQWWRWKH
$FWDQGWKHVXEVWDQWLYHDQGSURFHGXUDOSURYLVLRQVRIWKH&DOLIRUQLD&RQVWLWXWLRQ
9LFWRUYLOOH'UDLQDJH)DFLOLWLHV$VVHVVPHQW'LVWULFW1R (QJLQHHU¶V5HSRUW
$QQH[DWLRQRI7UDFW0DS
)LVFDO<HDU

3DJH
7KHZRUG³SDUFHO´IRUWKHSXUSRVHVRIWKLV5HSRUWUHIHUVWRDQLQGLYLGXDOSURSHUW\DVVLJQHGLWVRZQ$VVHVVRU¶V 3DUFHO 1XPEHU
$31
E\ WKH 6DQ %HUQDUGLQR &RXQW\ $VVHVVRU¶V 2II LFH 7KH 6DQ %HUQDUGLQR &RXQW\ $XGLWRU&RQWUROOHUXVHV$VVHVVRU¶V3DUFHO1XPEHUVDQGVSHFLILF )XQG1XPEHUVWRLGHQWLI\SURSHUWLHVWREH DVVHVVHGRQWKHWD[UROOIRUWKHVSHFLDOEHQHILWDVVHVVPHQWV 352&((',1*6$1'5(3257&217(17
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

LPSURYHPHQWV
WREHSURYLGHGE\WKH'LVWULFWIRUWKHVSHFLDOEHQHILWRISURSHUWLHVZLWKLQWKH7UDFW 7KH 'LVWULFW DVVHVVPHQWV DV GHVFULEHG KHUHLQ DUHEDVHG RQ WKH &LW\¶V HVWLPDWHRI WKH FRVWV WR PDLQWDLQ RSHUDWH DQG VHUYLFH WKH LPSURYHPHQWV 7KH FRVWV RI WKH LPSURYHP HQWV DQG WKH SURSRVHG DQQXDO DVVHVVPHQWVEXGJHWHGDQGDVVHVVHGDJDLQVWSURSHUWLHVZLWKLQWKH$QQH[DWLRQ7HUULWRU\PD\LQFOXGHEXWDUH QRWOLPLWHGWRWKHHVWLPDWHGH[SHQGLWXUHVIRUUHJXODUDQQXDOPDLQWHQDQFHDQGUHSDLUV LQFLGHQWDOH[SHQGLWXUHV
UHODWHGWRWKHRSHUDWLRQDQGDGPLQLVWUDWLRQRIWKH'LVWULFW GH ILFLWVRUVXUSOXVHVIURPSULRU\HDUV
UHYHQXHV
IURPRWKHUVRXUFHV
DQGWKHFROOHFWLRQRIIXQGVIRURSHUDWLRQDOUHVHUYHVDQGRUSHULRGLFUHSDLUVUHSODFHPHQWV DQGUHKDELOLWDWLRQSURMHFWVDVDXWKRUL]HGE\WKH
$FW7KH QHWDQQXDOFRVWWRSURYLGHWKHLPSURYHPHQWV IRU HDFK 7UDFW DUH DOORFDWHG WR WKH EHQHILWLQJ SURSHUWLHV ZLWKLQ WKDW 7UDFW XVLQJ D ZHLJKWHG PHWKRG RI DSSRUWLRQPHQW
UHIHUWR$VVHVVPHQW0HWKRGRORJ\LQ6HFWLRQ,,0HWKRGRI$SSRUWLRQPHQW WKDWFDOFXODWHVWKH
SURSRUWLRQDOVSHFLDOEHQHILWDQGDVVHVVPHQWIRUHDFKSDUFHODV FRPSDUHGWRRWKHUSURSHUWLHVWKDWEHQHILW IURPWKH'LVWULFWLPSURYHPHQWVDQGVHUYLFHV7KXVHDFKSDUFHO LVDVVHVVHGSURSRUWLRQDWHO\IRURQO\WKRVH LPSURYHPHQWVVHUYLFHVDQGH[SHQVHVIRUZKLFKWKHSDUFHOZLOOUHFHLYHVSHFLDOEHQHILW %DOORW3URFHHGLQJV
$V SDUW RI WKHVH SURFHHGLQJV WKH &LW\ VKDOO FRQGXFW D SURSHUW\ RZQHU SURWHVW EDOORW SURFHHGLQJ ³%DOORW
3URFHHGLQJ´
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
³$ PDMRULW\ SURWHVW H[LVWVLI XSRQ WKH FRQFOXVLRQ RI WKH KHDULQJEDOORWV VXEPLWWHG LQ RSSRVLWLRQ WR WKH DVVHVVPHQW H[FHHG WKH EDOORWV VXEPLWWHG LQ IDYRU RI WKH DVVHVVPHQW ,Q WDEXODWLQJ WKH EDOORWV WKH EDOORWV VKDOO EH ZHLJKWHG DFFRUGLQJWRWKHSURSRUWLRQDOILQDQFLDOREOLJDWLRQRIWKHDIIHFWHGSURSHUW\´ $IWHUFRPSOHWLRQRIWKHEDOORWWD EXODWLRQWKH&LW\&RXQFLOZLO OFRQILUPWKHUHVXOWVRIWKHEDOORWLQJ,IPDMRULW\ SURWHVW H[LVWV IRU WKH SURSRVHG 7UDFW 0DSDVVHVVPHQWV IXUWKHUSURFHHGLQJV WR DQQH[WKH SDUFHOV ZLWKLQWKH'LVWULFWDQGLPSOHPHQWDWLRQRIWKH7UDFWDQGDVVHVVPHQWVVKDOOEHDEDQGRQHG ,IWDEXODWLRQRIWKHEDOORWVLQGLFDWHWKDWPDMRULW\SURWHVWGRHVQRWH[LVWIRUWKHSURSRVHGDVVHVVPHQWVDQGWKH DVVHVVPHQWUDQJHIRUPXODSUHVHQWHGDQGGHVFULEHGKHUHLQWKH&L W\&RXQFLOE\UHVROXWLRQPD\DGRSWWKLV 9LFWRUYLOOH'UDLQDJH)DFLOLWLHV$VVHVVPHQW'LVWULFW1R (QJLQHHU¶V5HSRUW
$QQH[DWLRQRI7UDFW0DS
)LVFDO<HDU

3DJH
5HSRUW
DVVXEPLWWHGRUDPHQGHG

DSSURYHWKHDVVHVVPHQWGLDJUDPV
7UDFW%RXQGDU\'LDJUDP
FRQWDLQHG
KHUHLQ
RUGHUWKHDQQH[DWLRQRIWKHSDUFHOVZLWKLQ')$'1RDQGWKHLPSURYHPHQWVWREHPDGH DQGFRQILUP
WKHDVVHVVPHQWVDVRXWOLQHGLQWKLV5HSRUW
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
,ILQDQ\ILVFDO\HDUWKHSURSRVHGDQQXDODVVHVVPHQWVIRUSDUF HOVZLWKWKH'LVWULFWH[FHHGWKHPD[LPXP DVVHVVPHQWVGHVFULEHGKHUHLQVXFKDQDVVHVVPHQWZRXOGEHFRQVL GHUHGDQLQFUHDVHGDVVHVVPHQWDQG PXVWEHFRQILUPHGWKURXJKDPDLOHGSURSHUW\RZQHUSURWHVWEDOORWSURFHHGLQJIRUWKHDIIHFWHGSDUFHOVEHIRUH WKHLQFUHDVHGDVVHVVPHQWPD\EHLPSRVHG
5HSRUW&RQWHQW
7KLV 5HSRUW KDV EHHQ SUHSDUHG LQ FRQQHFWLRQ ZLWK WKH DQQH[DWLRQR I S D U F H O V L Q W R ' ) $ ' 1 R D Q G W K H UHVXOWLQJ DVVHVVPHQW IRU WKH SDUFHO ZLWKLQ 7UDFW 0DS HVWDEOLVKHG KHUHLQ LQ FRQQHFWLRQ ZLWK WKH DQQH[DWLRQRI7HUULWRU\IRU)LVFDO<HDUSXUVXDQWWR DUHVROXWLRQRIWKH&LW\&RXQFLODQGFRQVLVWV RIILYH

SDUWV

3DUW,³3ODQVDQG6SHFLILFDWLRQV
&RQWDLQVDJHQHUDOGHVFULSWLRQRIWKH'LVWULFWDQGWUDFWRIEHQ HILW ³7UDFW´
DQGVSHFLILFDOO\DGGUHVVHVWKH
LPSURYHPHQWVDQGVHUYLFHVWKDWSURYLGHVSHFLDOEHQHILWVWRWKHSDUFHOVZLWKLQWKH$QQH[DWLRQ7HUULWRU\ZKLFK LQFOXGHEXWLVQRWOLPLWHGWRORFDOODQGVFDSLQJDQGUHODWHGDPHQLWLHVLQFOXGLQJRSHUDWLRQDOH[SHQVHVDQGIXQG EDODQFHVDXWKRUL]HGE\WKH
$FW7KHSODQVDQGVSHFLILFDWLRQVFRQWDLQHGLQWKLV5HSRUWJHQHUDOO\GHVFULEH WKH QDWXUH DQG H[WHQW RI WKH LPSURYHPHQWV ,Q FRQMXQFWLRQ ZLWK WKHVH JHQHUDO GHVFULSWLRQV RI WKH LPSURYHPHQWVDYLVXDOGHSLFWLRQRIWKHLPSURYHPHQWVLVSURYLGHG LQWKH7UDFW%RXQGDU\'LDJUDPFRQWDLQHG LQ 3DUW ,9 RI WKLV 5HSRUW 7KH GHWDLOHG SODQV DQG VSHFLILFDWLRQV IRU WKH LPSURYHPHQWV LQ WKH $QQH[DWLRQ 7HUULWRU\DUHRQILOHLQWKH3XEOLF:RUNV'HSDUWPHQWRIWKH&LW\RI9LFWRUYLOOHDQGE\UHIHUHQFHDUHPDGHSDUW RIWKLV5HSRUW
3DUW,,³0HWKRGRI$SSRUWLRQPHQW
2XWOLQHV WKH VSHFLDO DQG JHQHUDO EHQHILWV DVVRFLDWHG ZLWK WKH LPSURYHPHQWV WR EH SURYLGHG ZLWKLQ WKH $QQH[DWLRQ7HUULWRU\DQGWKHEDVLVXSRQZKLFKWKHHVWLPDWHGFRVWVWRSURYLGHVXFKLPSURYHPHQWVKDVEHHQ DSSRUWLRQHGWRHDFKSDUFHORIODQGWKHUHLQLQSURSRUWLRQWRWKHVSHFLDOEHQHILWVWREHUHFHLYHG 3DUW,,,³(VWLPDWHRI&RVWV
,GHQWLILHVWKHHVWLPDWHGDQQXDOIXQGLQJFRVWV
%XGJHW
UHTXLUHG IRUWKHPDLQWHQDQFHDQGRSHUDWLRQRIWKH
LPSURYHPHQWVLQFOXGLQJEXWQRWOLPLWHGWRDQQXDOPDLQWHQDQFH DQGVHUYLFHH[SHQVHVXWLOLW\FRVWVUHODWHG LQFLGHQWDOH[SHQVHVDQGIXQGEDODQFHVDXWKRUL]HGE\WKH $FWDQGGHHPHGDSSURSULDWHWRIXOO\VXSSRUW
WKHLPSURYHPHQWV7KRVHLPSURYHPHQWVDQGRUFRVWVGHWHUPLQHGWREHRIJHQHUDOEHQHILWVKDOOEHIXQGHGE\ D &LW\ FRQWULEXWLRQ 7KLV EXGJHW HVWDEOLVKHV WKH PD[LPXP DVVHVVPHQWV WR EH DSSURYHG E\ WKH SURSHUW\ RZQHU
V
RIUHFRUGZLWKLQWKH$QQH[DWLRQ7HUULWRU\DVSDUWRIWKH%DOORW3URFHHGLQJ 9LFWRUYLOOH'UDLQDJH)DFLOLWLHV$VVHVVPHQW'LVWULFW1R (QJLQHHU¶V5HSRUW
$QQH[DWLRQRI7UDFW0DS
)LVFDO<HDU

3DJH
7KLV VHFWLRQ DOVR LGHQWLILHV DQG RXWOLQHV DQ $VVHVVPHQW 5DQJH ) RUPXOD LQIODWLRQDU\ DGMXVWPHQW
WKDW
SURYLGHV IRU DQ DQQXDO DGMXVWPHQW WR WKH PD[LPXP DVVHVVPHQW UDWH WKDW HVWDEOLVKHV OLPLWV RQ IXWXUH DVVHVVPHQWVEXWDOVRSURYLGHVIRUUHDVRQDEOHFRVWDGMXVWPHQWVGXHWRLQIODWLRQ 3DUW,9³%RXQGDU\'LDJUDP
$ GLDJUDP VKRZLQJ WKH H[LVWLQJ 'LVWULFW DQG $QQH[DWLRQ 7HUULWRU\ 7KH OLQHV DQG GLPHQVLRQV RI HDFK ORW SDUFHO DQG VXEGLYLVLRQ RI ODQG FRQWDLQHG LQ WKLV GLDJUDP DUH LQFOXVLYH RI DOO SDUFHOV OLVWHG LQ ³3DUW 9 ± $VVHVVPHQW5ROO´RIWKLV5HSRUWDQGWKHFRUUHVSRQGLQJ&RXQW\$VVHVVRU¶V3DUFHO0DSVIRUVDLGSDUFHOVDV WKH\ H[LVWHG DW WKH WLPH WKLV 5HSRUW ZDV SUHSDUHG DQG VKDOO LQFOXGH DOO VXEVHTXHQW VXEGLYLVLRQV ORWOLQH DGMXVWPHQWVRUSDUFHOFKDQJHVWKHUHLQ5HIHUHQFHLVKHUHE\PDGHWRWKH6DQ%HUQDUGLQR&RXQW\$VVHVVRU¶V PDSV IRU D GHWDLOHG GHVFULSWLRQ RI WKH OLQHV DQG GLPHQVLRQV RIHDFK ORW DQG SDUFHO RI ODQG ZLWKLQ WKH $QQH[DWLRQ7HUULWRU\
3DUW9³$VVHVVPHQW5ROO
7KH³%DOORWHG0D[LPXP$VVHVVPHQW´DPRXQWIRUHDFKSDUFHOUHSUHV HQWVWKDWSDUFHO¶VSURSRVHGPD[LPXP DVVHVVPHQWDPRXQWIRUHDFKSDUFHOZLWKLQ7UDFW0DSFRPPHQ FLQJLQILVFDO\HDUDQGLV EDVHG RQ WKH SDUFHO¶V FDOFXODWHG SURSRUWLRQDO VSHFLDO EHQHILW D V RXWOLQHG LQ ³3DUW ,, ² 0HWKRG RI $SSRUWLRQPHQW´DQGFDOFXODWHGDVVHVVPHQWUDWHHVWDEOLVKHGE\WKHEXGJHWLQ³3DUW,,,²(VWLPDWHRI&RVWV´ ,IDQ\VHFWLRQVXEVHFWLRQVHQWHQFHFODXVHSKUDVHSRUWLRQRUWUDFWRIWKLV5HSRUWLVIRUDQ\UHDVRQKHOGWR EHLQYDOLGRUXQFRQVWLWXWLRQDOE\WKHGHFLVLRQRIDQ\FRXUWRIFRPSHWHQWMXULVGLFWLRQVXFKGHFLVLRQVKDOOQRW DIIHFW WKH YDOLGLW\ RI WKH UHPDLQLQJ SURYLVLRQV RI WKH 5HSRUW DQG HDFK VHFWLRQ VXEVHFWLRQ VXEGLYLVLRQ VHQWHQFH FODXVH SKUDVH SRUWLRQ WUDFW WKHUHRI LUUHVSHFWLYHRI WKH IDFW WKDW DQ\ RQH RU PRUH VHFWLRQV VXEVHFWLRQV VHQWHQFHV FODXVHV SKUDVHV SRUWLRQV RU WUDFW PLJKW VXEVHTXHQWO\ EH GHFODUHG LQYDOLG RU XQFRQVWLWXWLRQDO
9LFWRUYLOOH'UDLQDJH)DFLOLWLHV$VVHVVPHQW'LVWULFW1R (QJLQHHU¶V5HSRUW
$QQH[DWLRQRI7UDFW0DS
)LVFDO<HDU

3DJH
3DUW,³3ODQVDQG6SHFLILFDWLRQV
'(6&5,37,212)7+(',675,&7
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

DSSOLFDEOH
WKHSHUVRQQHOPDWHULDOVHTXLSPHQWHOHFWULFLW\ZDWHUFRQWUDFWVHUYLFHVUHSDLUDQGUHKDELOLWDWLRQ RIWKHLPSURYHPHQWVDQGLQFLGHQWDOH[SHQVHVUHTXLUHGWRRSHUDWHWKH'LVWULFWDQGSURYLGHWKHLPSURYHPHQWV DQGVHUYLFHV
,PSURYHPHQWVSURYLGHGZLWKLQWKH'LVWULFWPD\LQFOXGHEXWDUHQRWOLPLWHGWR
¾ /DQGVFDSLQJDQGUHODWHGIDFLOLWLHVDQGDPHQLWLHVORFDWHGZLWKLQRUDURXQGWKHGHVLJQDWHGGUDLQDJHIDFLOLW\ 7KHVHLPSURYHPHQWVPD\LQFOXGHEXWDUHQRWOLPLWHGWR

x YDULRXVODQGVFDSHPDWHULDOVVXFKDVWUHHVWXUIVKUXEVYLQHV JURXQGFRYHUDQQXDORUSHUHQQLDO

SODQWLQJV

x LUULJDWLRQDQGGUDLQDJHV\VWHPVVXFKDVVWRUPGUDLQVFKDQQHOVDQGEDVLQV
x VWUXFWXUDODPHQLWLHVVXFKDVPRQXPHQWVEORFNZDOOVUHWDLQLQJZDOOVRURWKHUIHQFLQJ
x KDUGVFDSHVLQFOXGLQJPXOFKWUDLODQGSDWKVXUIDFHVVWDPSHGFRQFUHWHDQGSDYHUV
7KH PDLQWHQDQFH RI WKHVH LPSURYHPHQWV PD\ LQFOXGH EXW LV QRW OLPLWHG WR WKH UHJXODUO\ VFKHGXOHG PRZLQJ WULPPLQJ SUXQLQJ IHUWLOL]DWLRQ SHVW FRQWURO ZHHG DQ G JUDIILWL DEDWHPHQW LQVWDOODWLRQ
UHSODFHPHQW DQG UHKDELOLWDWLRQ RI WKH ODQGVFDSLQJ UHSDLU RU UH SODFHPHQW RI LUULJDWLRQ RU GUDLQDJH V\VWHPV
UHSDLURUUHSODFHPHQWRIKDUGVFDSHLPSURYHPHQWVDQGUHFUHDWLRQDODPHQLWLHV7KH&LW\¶V3XEOLF :RUNV'HSDUWPHQWVKDOODXWKRUL]HDQGVFKHGXOHVXFKPDLQWHQDQFHDQGVHUYLFLQJDVQHHGHGDQGEDVHG RQDYDLODEOHIXQGLQJ
(;,67,1*75$&76,1',675,&7
,QDFFRUGDQFHZLWKWKH
$FWWKH'LVWULFWXWLOL]HV7UDFWVWRDGGUHVVYDULDWLRQVLQWKHQDWXUHORFDWLRQDQG H[WHQWRIWKHLPSURYHPHQWVWKDWSURYLGHVSHFLDOEHQHILWVWRSDUFHOVLQWKH'L VWULFW(DFK7UDFWLVDVVRFLDWHG ZLWKVSHFLILFLPSURYHPHQWVDQGRUW\SHVRILPSURYHPHQWVWKDWSURYLGHVSHFLDOEHQHILWWRSURSHUWLHVZLWKLQWKDW 9LFWRUYLOOH'UDLQDJH)DFLOLWLHV$VVHVVPHQW'LVWULFW1R (QJLQHHU¶V5HSRUW
$QQH[DWLRQRI7UDFW0DS
)LVFDO<HDU

3DJH
7UDFW7KHERXQGDULHVRIHDFK7UDFWDUHEDVHGRQWKHLPSURYHPHQ WVWREHPDLQWDLQHGDQGWKHUHODWLRQVKLS DQG SUR[LPLW\ RI WKH GHYHORSPHQWV DQG SURSHUWLHV WKDW GHULYH VS HFLDO EHQHILWV IURP WKRVH VSHFLILF LPSURYHPHQWV
$VRI)LVFDO<HDUWKH'LVWULFWZDVFRPSULVHGRIWKHIROORZLQJ7UDFWVDQGGHYHORSPHQWV

75$&76 /2&$7,21
0RMDYH'5WRWKHVRXWK&DPLQR9DOOH:D\WRWKHQRUWKEHWZHHQ 'LDPRQG5GDQG&REDOW5G :HVWRIUG$YHEHWZHHQ7DOSD6WDQG2WWDZD6W
:HVWRIWK$YHEHWZHHQ+RPRD5GDQG2WWDZD6W
6RXWKRI%HDU9DOOH\5GDW0HVD9LHZ'U6LHUUD5GDQG5HQD5G 6RXWK%HDU9DOOH\5GEHWZHHQ0HVD9LHZ'UDQG3HQD5G

6RXWKRI7UDFWRQ%HDU9DOOH\5GDQGEHWZHHQ0HVD9LHZ'U DQG3HQD5G 6RXWKRI'RV3DOPDV5GDQGZHVWRI)R[ERURXJK:D\DW)R[3RLQW 5G
6RXWKRI(XFDO\SWXV6W
$W+LJK&UHVW6WDQG+LOO&UHVW6WDQGWKHQDJDLQDW3DUN*OHQ DQG5LGJHFUHVW5G 6RXWKRI7DZQH\5LGJH/QDW'LDPRQG5G&REDOW5GDQG+RRN%OYG 1RUWKRI)DU+LOOVDW4XHHQVEXU\5G
6RXWKRI'RV3DOPDV5GQRUWKRI5DIDHO:D\EHWZHHQ$PHWK\VW 5GDQG)R[ERURXJK:D\ 6RXWKRI'RV3DOPDV5GZHVWRI%HOOIORZHU6W
:HVWRI0HVD9LHZ6WQRUWKRI/XQD5G

6RXWKRI0RMDYH'UQRUWKRI9HUVDLOOH6WEHWZHHQ2Q\[5GDQG7RSD]5G

WKURXJK
6RXWK+RSODQGZHVW(O(YDGRQRUWK7DZQH\5LGJHDQGHDVWRI&R UGRYD 6RXWKRI3DOPGDO5GDW0RQWH9LVWDDQG9HUEHQD5GV
7UDFW0DS
ERXQGDULHVDUH0HVD9LHZ6W/D0HVD5GDW0F&R UG/Q,YHUVRQDQG1\DFN 7UDFW0DSERXQGDULHVDUHVRXWKRI0RMDYH'UDW'LDPRQG5G&REDOW5GDQG7RSD]5G 7UDFW0DSERXQGDULHVDUHVRXWKRI0RMDYH'UDW'LDPRQG5G&REDOW5GDQG7RSD]5G
$W3DEOR&WHDVWRI$UURZKHDG'U
7UDFW0DSERXQGDULHVDUHEHWZHHQ%XUZRRG6WDQG6LOLFD'U DWWK$YH 'DOPDWLDQ:D\$OSDFD/DQHDQG0F&DZ:D\HDVWRI6HYHQWK$YH 0RQWH9LVWD5G1\DFN5G2OLYLQHDQG9HUEHQD5GV 1RUWKRI'RV3DOPDV5GDW'HO&HUUR6W

6RXWKRI7DZQH\5LGJH/QDW)HUQGDOH5G
1RUWKRI(XFDO\SWXV6WHDVWRI$PHWK\VW5GVRXWKRI6\FDPRUH6W 6RXWKHDVW0RQWH9LVWDDQG/XQD5G

$11(;$7,217(55,725<),6&$/<($5
7UDFW0DS
*HQHUDOO\ORFDWHGDWWKHVRXWKRI+RSODQG6WUHHWDQGHDVWRI&DKXHQJD5RDGZLOOGHYHORSRXWWRVHYHQW\

VLQJOHIDPLO\UHVLGHQWLDOXQLWVFXUUHQWO\LGHQWLILHGE\WKH6DQ%HUQDUGLQR&RXQW\$VVHVVRU¶V2IILFHDVSDUFHOV

DQG
DQG

DQG
DQG
DQG
,PSURYHPHQWVZLWKLQWKH'LVWULFWDUHRQILOHZLWKWKH&LW\
9LFWRUYLOOH'UDLQDJH)DFLOLWLHV$VVHVVPHQW'LVWULFW1R (QJLQHHU¶V5HSRUW
$QQH[DWLRQRI7UDFW0DS
)LVFDO<HDU

3DJH
3DUW,,³0HWKRGRI$SSRUWLRQPHQW
/(*,6/$7,9(5(48,5(0(176)25$66(660(176
7KH FRVWV RI WKH SURSRVHG LPSURYHPHQWV KDYH EHHQ LGHQWLILHG DQG DOORFDWHG WR SURSHUWLHV ZLWKLQ WKH $QQH[DWLRQ7HUULWRU\EDVHGRQSURSRUWLRQDOVSHFLDOEHQHILWFRQVLVWHQWZLWKWKHSURYLVLRQVRIWKH $FWDQG
WKHDVVHVVPHQWSURYLVLRQVRI3URSRVLWLRQ
EHLQJFRQWDLQHGLQ$UWLFOH;,,,'RIWKH&DOLIRUQLD&RQVWLWXWLRQ
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
$FW $UWLFOH;,,, ' RI WKH &DOLIRUQLD &RQVWLWXWLRQ RXWOLQHV VSHFLILF UHTXLUHPHQWVUHJDUGLQJDVVHVVPHQWVLQFOXGLQJWKHIROORZLQJ
$UWLFOH;,,,'6HFWLRQGGHILQHV'LVWULFWDVIROORZV

³'LVWULFWPHDQVDQDUHDGHWHUPLQHGE\DQDJHQF\WRFRQWDLQDOO SDUFHOVZKLFKZLOOUHFHLYHDVSHFLDOEHQHILW IURPDSURSRVHGSXEOLFLPSURYHPHQWRUSURSHUW\UHODWHGVHUYLFH ´
$UWLFOH;,,,'6HFWLRQLGHILQHV6SHFLDO%HQHILWDVIROORZV
³6SHFLDOEHQHILW´PHDQVDSDUWLFXODUDQGGLVWLQFWEHQHILWRYHU DQGDERYHJHQHUDOEHQHILWVFRQIHUUHGRQUHDO SURSHUW\ORFDWHGLQWKHGLVWULFWRUWRWKHSXEOLFDWODUJH*HQ HUDOHQKDQFHPHQWRISURSHUW\YDOXHGRHVQRW FRQVWLWXWH³VSHFLDOEHQHILW´
$UWLFOH;,,,'6HFWLRQDGHILQHVSURSRUWLRQDOVSHFLDOEHQHILWDVVHVVPHQWVDVIROORZV
³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´ %(1(),7$1$/<6,6
/DQGVFDSLQJ6SHFLDO%HQHILW
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¶V5HSRUW
$QQH[DWLRQRI7UDFW0DS
)LVFDO<HDU

3DJH

,Q7KH(FRQRPLF9DOXHRI7UHHVLQ8UEDQ$UHDVZULWWHQE\3KLOOLS.LOOLFRDW(YD3X]LRDQG5DQG\6WULQJHULQ LWLVVWDWHG

³,QFUHDVHGSURSHUW\YDOXHVLQFU HDVHGWD[UHYHQXHVLQFUHDVHGL QFRPHOHYHOVIDVWHUUHDOHVWDWHVDOHVWXUQ RYHUUDWHVVKRUWHUXQRFFXSLHGSHULRGV«KDYHDOOEHHQOLQNHGWRWUHHDQGODQGVFDSHSUHVHQFH´ /DQGVFDSLQJ*HQHUDO%HQHILW
6HFWLRQ RI $UWLFOH ;,,,' SURYLGHV WKDW RQFHD ORFDO DJHQF\ ZKLFK SURSRVHV WR LPSRVH DVVHVVPHQWVRQ SURSHUW\KDVLGHQWLILHGWKRVHSDUFHOVWKDWZLOOKDYHVSHFLDOEHQHILWVFRQIHUUHGXSRQWKHPDQGXSRQZKLFKDQ DVVHVVPHQW ZLOO EH LPSRVHG WKH ORFDO DJHQF\ PXVWQH[W ³VHSDUDWH WKH JHQHUDO EHQHILWV IURP WKH VSHFLDO EHQHILWVFRQIHUUHG´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
7RDVVHVVEHQHILWVHTXLWDEO\LWLVQHFHVVDU\WRFDOFXODWHHDFKSURSHUW\¶VUHODWLYHVKDUHRIWKHVSHFLDOEHQHILWV FRQIHUUHGE\WKHIXQGHGLPSURYHPHQWVDQGVHUYLFH7KH(TXLYDOHQW%HQHILW8QLW (%8
PHWKRGRIDVVHVVPHQW
DSSRUWLRQPHQW LV XWLOL]HG IRU WKLV 'LVWULFW DQG HVWDEOLVKHV D EDVLF XQLW EDVH YDOXH
RI EHQHILW DQG WKHQ
FDOFXODWHVWKHEHQHILWGHULYHGE\HDFKDVVHVVHGSDUFHODVDPXOWLSOH RUDIUDFWLRQ
RIWKDWEDVLFXQLW7KH
(%8 PHWKRG RI DSSRUWLRQLQJ VSHFLDO EHQHILWV LV W\SLFDOO\ VHHQ DV WKH PRVW DSSURSULDWH DQG HTXLWDEOH DVVHVVPHQWPHWKRGRORJ\IRUDVVHVVPHQWGLVWULFWVDVWKHEHQHILW WRHDFKSDUFHOIURPWKHLPSURYHPHQWVDUH DSSRUWLRQHGDVDIXQFWLRQRIFRPSDUDEOHSURSHUW\FKDUDFWHULVWLFVZKLFKPD\LQFOXGHEXWLVQRWOLPLWHGWRODQG XVHDQGSURSHUW\VL]H
)RUWKHSXUSRVHVRIWKLV(QJLQHHU
V5HSRUWDQ(%8LVWKHTXDQWXPRIEHQHILWGHULYHGIURPWKHYDULRXV7UDFW LPSURYHPHQWVE\DVLQJOHIDPLO\UHVLGHQWLDOSDUFHO7KHVLQJOHIDPLO\UHVLGHQWLDOSDUFHOKDVEHHQVHOHFWHGDV WKHEDVLFXQLWIRUFDOFXODWLRQRIDVVHVVPHQWV7KXVWKHEHQFK PDUNSURSHUW\ WKHVLQJOHIDPLO\UHVLGHQWLDO
SDUFHO
GHULYHVRQH(%8RIEHQHILWDQGLVDVVLJQHG(TXLYDO HQW%HQHILW8QLW3XUVXDQWWRWKH $FW
WKHFRVWVRIWKH'LVWULFWPD\EHDSSRUWLRQHGE\DQ\IRUPXODRU PHWKRGWKDWIDLUO\GLVWULEXWHVWKHQHWDPRXQW WREHDVVHVVHGDPRQJDOODVVHVVDEOHSDUFHOVLQSURSRUWLRQWRWKHHVWLPDWHGEHQHILWVWREHUHFHLYHGE\HDFK 9LFWRUYLOOH'UDLQDJH)DFLOLWLHV$VVHVVPHQW'LVWULFW1R (QJLQHHU¶V5HSRUW
$QQH[DWLRQRI7UDFW0DS
)LVFDO<HDU

3DJH
SDUFHOIURPWKHLPSURYHPHQWV7KHEHQHILWIRUPXODXVHGIRUWKH'LVWULFWVKRXOGUHIOHFWWKHFRPSRVLWLRQRIWKH SDUFHOVDQGWKHLPSURYHPHQWVDQGVHUYLFHVSURYLGHGWRIDLUO\ DSSRUWLRQWKHFRVWVEDVHGRQVSHFLDOEHQHILW WRHDFKSDUFHO

7KH H[LVWLQJ 'LVWULFW¶V 0HWKRG RI $SSRUWLRQPHQW XWLOL]HV FRPPRQ O\ DFFHSWHG DVVHVVPHQWHQJLQHHULQJ SUDFWLFHVDQGZHUHHVWDEOLVKHGSXUVXDQWWRWKH
$FWDQGWKH SURYLVLRQVRIWKH&DOLIRUQLD&RQVWLWXWLRQ 7KH PHWKRG RXWOLQHG LV EDVHG RQ WKH SUHPLVH WKDW HDFK DVVHVVHG SDUFHO UHFHLYHV EHQHILW IURP WKH LPSURYHPHQWVPDLQWDLQHGDQGILQDQFHGE\WKH'LVWULFW¶VDVVHVVPH QWV7KHGHVLUDELOLW\RISURSHUWLHVZLWKLQ HDFK7UDFWLVHQKDQFHGE\WKHSUHVHQFHRIZHOOPDLQWDLQHGODQGVFDSLQJLQFORVHSUR[LPLW\WRWKRVHSURSHUWLHV 7KHFRVWVDVVRFLDWHGZLWKWKHLPSURYHPHQWVDUHHTXLWDEO\VSUHDG DPRQJWKHEHQHILWLQJSDUFHOVZLWKLQWKH 'LVWULFWDQGWKHIXQGVFROOHFWHGVKDOOEHGLVSHUVHGDQGXVHGRQO\IRUWKHLPSURYHPHQWVDQGVHUYLFHVSURYLGHG E\WKH'LVWULFW

7KHIROORZLQJWDEOHSURYLGHVWKHZHLJKWLQJIDFWRUVWRYDULRXVO DQGXVHW\SHVDQGSDUFHOVL]HVDVUHSRUWHGE\ WKHPRVWFXUUHQW\HDU¶V6DQ%HUQDUGLQR&RXQW\$VVHVVRU¶V6HFXUH G5ROOZKLFKGHWHUPLQHVHDFKSDUFHO¶V (%8DVVLJQPHQW

/$1'86( (48,9$/(17%(1(),7
81,7)$&725 122)3$5&(/6 08/7,3/,(5
6LQJOH)DPLO\5HVLGHQWLDO 3HU%HQHILW8QLW
5HGXFHG6LQJOH)DPLO\5HVLGHQWLDO 3HU%HQHILW8QLW 727$/

1RWH
1XPEHURISDUFHOVFXUUHQWO\OLVWHGLQWKH'LVWULFWDUHEHIRUHDQQH[DWLRQ ([HPSW3URSHUWLHV
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
$QQXDO,QIODWLRQDU\$GMXVWPHQW
$VVHVVPHQW5DQJH)RUPXOD

,WLVUHFRJQL]HGWKDWWKHFRVWRISURYLGLQJIRUWKHLPSURYHPHQWVGHVFULEHGLQ3DUW,±3ODQVDQG6SHFLILFDWLRQV RI WKLV 5HSRUW ZLOO LQHYLWDEO\ LQFUHDVH RYHU WLPH DV D UHVXOW RI LQIODWLRQ DQG WKDW DQ\ ³QHZ RU LQFUHDVHG DVVHVVPHQWV´UHTXLUHFHUWDLQQRWLFLQJDQGEDOORWLQJUHTXLUHPHQW VSXUVXDQWWR$UWLFOH; ,,,'RIWKH&DOLIRUQLD &RQVWLWXWLRQ
3URSRVLWLRQ
+RZHYHU *RYHUQPHQW &RGH 6HFWLRQ

D
SURYLGHV WKDW D ³QHZ RU
LQFUHDVHGDVVHVVPHQW´GRHVQRWLQFOXGH³DQDVVHVVPHQWZKLFKGRH VQRWH[FHHGDQDVVHVVPHQWIRUPXODRU UDQJHRIDVVHVVPHQWVSUHYLRXVO\DGRSWHGE\WKHDJHQF\RUDSSU RYHGE\WKHYRWHUVLQWKHDUHDZKHUHWKH DVVHVVPHQW LV LPSRVHG´ 7KLV GHILQLWLRQ RIDQ LQFUHDVHGDVVHVVPHQW LV UHDIILUPHG LQ WKH3URSRVLWLRQ 2PQLEXV,PSOHPHQWDWLRQ$FW*RYHUQPHQW&RGH6HFWLRQ ,QRUGHUWRDVVXUHWKDWWKHLPSURYHPHQWIXQGLQJLVVXIILFLHQWLQWKHIXWXUHWRDGGUHVVWKHRQJRLQJPDLQWHQDQFH DQG UHSODFHPHQW FRVW LQFUHDVHV WKDW QDWXUDOO\ RFFXU RYHU WLPH GXH WR LQIODWLRQ WKH VSHFLDO EHQHILW DVVHVVPHQWVEHLQJSUHVHQWHGWRWKHSURSHUW\RZQHUVLQWKHEDOOR WSURFHHGLQJFRQGXFWHGLQFRQQHFWLRQZLWK 9LFWRUYLOOH'UDLQDJH)DFLOLWLHV$VVHVVPHQW'LVWULFW1R (QJLQHHU¶V5HSRUW
$QQH[DWLRQRI7UDFW0DS
)LVFDO<HDU

3DJH
WKLV 5HSRUW LQFOXGHV DQ DQQXDO LQIODWLRQDU\ DGMXVWPHQW DVVHVVP HQW UDQJH IRUPXOD
7KLV LQIODWLRQDU\
DGMXVWPHQW IRUPXOD SURYLGHV IRU WKH )LVFDO <HDU PD[LP XP DVVHVVPHQWV LQLWLDO PD[LPXP
DVVHVVPHQW UDWH
HVWDEOLVKHG KHUHLQ IRU WKH $QQH[DWLRQ 7HUULWRU\ WR LQFUHDVH E\ DQ DPRXQW HTXDO WR WKH DQQXDO SHUFHQWDJH LQFUHDVH RI WKH /RFDO &RQVXPHU 3ULFH ,QGH[ &3,
IRU ³$OO 8UEDQ &RQVXPHUV´ IRU WKH
5LYHUVLGH6DQ %HUQDUGLQR2QWDULR $UHDV
-DQXDU\RIWKHJLYHQ \HDU IURP WKH SUHYLRXV -DQXDU\ RU VLPLODU SHULRG

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
EDVHG RQ WKH SURSRVHG EXGJHW
LV JUHDWHU WKDQ WKH DGMXVWHG PD[LPXP
DVVHVVPHQWIRUWKDWILVFDO\HDUWKHQWKHDVVHVVPHQWZRXOGEHF RQVLGHUHGDQLQFUHDVHGDVVHVVPHQWDQG ZRXOGUHTXLUHSURSHUW\RZQHUDSSURYDOWKURXJKDQRWKHUSURWHVWE DOORWSURFHHGLQJEHIRUHLPSRVLQJVXFKDQ LQFUHDVH2WKHUZLVHLWZRXOGEHQHFHVVDU\WRUHGXFHWKHEXGJHWRUSURYLGHDFRQWULEXWLRQIURPWKH&LW\WR UHGXFHWKH%DODQFHWR/HY\
DPRXQWWREHDVVHVVHG
WRDQDPRXQWWKDWFDQEHVXSSRUWHGE\DQDVVHVVPHQW
UDWHOHVVWKDQRUHTXDOWRWKHDGMXVWHGPD[LPXPDVVHVVPHQWUDWHDXWKRUL]HGIRUWKDWILVFDO\HDU 7KH $VVHVVPHQW 5DQJH )RUPXOD VKDOO EH DSSOLHG WR WKH PD[LPXP DVVHVVPHQW UDWHV IRU WKH $QQH[DWLRQ 7HUULWRU\7UDFW0DSFRPPHQFLQJLQILVFDO\HDUD QGVKDOOEHDSSOLHGLQHDFKVXEVHTXHQW ILVFDO\HDUXQOHVVWKH&LW\&RXQFLOIRUPDOO\VXVSHQGVLWVDSSOLFDWLRQ
9LFWRUYLOOH'UDLQDJH)DFLOLWLHV$VVHVVPHQW'LVWULFW1R (QJLQHHU¶V5HSRUW
$QQH[DWLRQRI7UDFW0DS
)LVFDO<HDU

3DJH
3DUW,,,³(VWLPDWHRI&RVWV

7KH
$FW SURYLGHV WKDW WKH HVWLPDWHG FRVWV RI WKH LPSURYHPHQWV VKDOO LQFOXGH WKH WRWDO FRVW RI WKH LPSURYHPHQWVLQFOXGLQJLQFLGHQWDOH[SHQVHV
7KH
$FWDOVRSURYLGHVWKDWWKHDPRXQWRIDQ\VXUSOXVGHILFLWRUFRQWULEXWLRQEHLQFOXGHGLQWKHHVWLPDWHG FRVWRILPSURYHPHQWV7KHQHWDPRXQWWREHDVVHVVHGRQWKHORWVRUSDUFHOVZLWKLQWKH$QQH[DWLRQ7HUULWRU\ LV WKH WRWDO FRVW RI PDLQWHQDQFH DQG VHUYLFLQJ ZLWK DGMXVWPHQWV HLWKHU SRVLWLYH RU QHJDWLYH IRU UHVHUYHV VXUSOXVHVGHILFLWVDQGRUFRQWULEXWLRQV
352326('%8'*(7$1'$66(660(176
7KHEXGJHWVDQGDVVHVVPHQWVRXWOLQHGRQWKHIROORZLQJSDJHIRU WKH$QQH[DWLRQ7HUULWRU\IRUGHVLJQDWHG 7UDFW 0DS DUH EDVHG RQ WKH QDWLRQDO VWDQGDUGV DQG UHODWHG IXQGLQJ QHFHVVDU\ IRU WKH RSHUDWLRQ PDLQWHQDQFHDQGVHUYLFLQJRIWKH'LVWULFWLPSURYHPHQWVLGHQWLILHGLQ3DUW,RIWKLV5HSRUW 7KLVEXGJHWUHSUHVHQWVDQHVWLPDWHRIWKHVSHFLDOEHQHILWH[SHQVHVIRU)LVFDO<HDU LIEXLOWRXW
DW
WKH WLPH WKLV 5HSRUW ZDV SUHSDUHG DQG HVWDEOLVKHV WKH PD[LPXP DVVHVVPHQW UDWHV WR EH EDOORWHG DQG DSSURYHGE\WKHSURSHUW\RZQHU
V
RIUHFRUGZLWKLQWKH$QQH[DWLRQ7HUULWRU\DVSDUWRIWKH%DOORW3URFHHGLQJ
9LFWRUYLOOH'UDLQDJH)DFLOLWLHV$VVHVVPHQW'LVWULFW1R (QJLQHHU¶V5HSRUW
$QQH[DWLRQRI7UDFW0DS
)LVFDO<HDU

3DJH
$QQH[DWLRQ7HUULWRU\%XGJHW)LVFDO<HDU
'(6&5,37,21 7UDFW
87,/,7,(6(/(&75,&,7<
87,/,7,(6:$7(586$*(

7(/(3+21(

87,/,7,(668%727$/
&,7<$'0,1,675$7,21
&2168/7,1*6(59,&(6

&2817<)((6
$'0,1,675$7,2168%727$/
0$,17(1$1&(67$))6$/$5<$1'%(1(),76
&2175$&76(59,&(6

*5281'60$,17(1$1&(

,55,*$7,210$,17(1$1&(
,1)5$6758&785(5(3$,56

9(+,&/(6$1'(48,30(17
722/6$1'60$//(48,30(17
9$1'$/,60$&&,'(176
0$,17(1$1&(68%727$/
(;3(1',785( %8'*(7
*(1(5$/%(1(),7&2175,%87,21
5(6(59(&2//(&7,21&2175,%87,21
%$/$1&(72/(9<
(TXLYDOHQW%HQHILW8QLWVDW%XLOW2XW
)<$VVHVVPHQW5DWH
)<$VVHVVPHQW5DWH1RW%XLOW
)<0D[$OORZDEOH$VVHVVPHQWSHU%HQHILW8QLW%XLOW )<0D[$OORZDEOH$VVHVVPHQWSHU%HQHILW8QLW1RW%XLOW ),6&$/<($5%8'*(7

1RWH
7KHEXGJHWUHSUHVHQWVWKH7UDFW¶VIDLUVKDUHRIFRVWLIGHYHORSHGDQGOHYLHGLQ)LVFDO<HDU7KH EXGJHWKDVEHHQURXQGHGWRWKHQHDUHVWGROODU

9LFWRUYLOOH'UDLQDJH)DFLOLWLHV$VVHVVPHQW'LVWULFW1R (QJLQHHU¶V5HSRUW
$QQH[DWLRQRI7UDFW0DS
)LVFDO<HDU

3DJH
3DUW,9³%RXQGDU\'LDJUDP
7KH)LVFDO<HDU'LVWULFW'LDJUDPIRU7UDFW0DS

9LFWRUYLOOH'UDLQDJH)DFLOLWLHV$VVHVVPHQW'LVWULFW1R (QJLQHHU¶V5HSRUW
$QQH[DWLRQRI7UDFW0DS
)LVFDO<HDU

3DJH
3DUW9³$VVHVVPHQW5ROO
3DUFHOLGHQWLILFDWLRQIRUHDFKORWRUSDUFHOZLWKLQWKH$QQH[DW LRQ7HUULWRU\VKDOOEHWKHSDUFHOVDVVKRZQRQ WKH6DQ%HUQDUGLQR&RXQW\6HFXUHG5ROOIRUWKH\HDULQZKLFKWKLV5HSRUWLVSUHSDUHGDQGUHIOHFWLYHRIWKH $VVHVVRU¶V3DUFHO0DSV
7KHIROORZLQJLVWKHORWVDQGSDUFHOVRIODQG

SDUFHOV
ZLWKLQ WKH$QQH[DWLRQ7HUULWRU\DQGWKHFRUUHVSRQGLQJ PD[LPXPDVVHVVPHQWVEHLQJVHWIRU)LVFDO<HDU $31 7UDFW 3URSHUW\2ZQHU /DQG8VH (%8
0D[LPXP5DWHSHU
(TXLYDOHQW%HQHILW
8QLW
0D[LPXP$VVHVVPHQW

/2769,&7259,//(//& 5(6,'(17,$/

/2769,&7259,//(//& 5(6,'(17,$/

/2769,&7259,//(//& 5(6,'(17,$/

/2769,&7259,//(//& 5(6,'(17,$/

/2769,&7259,//(//& 5(6,'(17,$/
/2769,&7259,//(//& 5(6,'(17,$/
/2769,&7259,//(//& 5(6,'(17,$/

/2769,&7259,//(//& 5(6,'(17,$/

/2769,&7259,//(//& 5(6,'(17,$/

/2769,&7259,//(//& 5(6,'(17,$/

&LW\RI9LFWRUYLOOH

(QJLQHHU¶V5HSRUW
/DQGVFDSH0DLQWHQDQFH$VVHVVPHQW
'LVWULFW1R
$QQH[DWLRQRI7UDFW0DS

&RPPHQFLQJ)LVFDO<HDU

,QWHQW0HHWLQJ
2FWREHU
3XEOLF+HDULQJ
1RYHPEHU

9LD,QGXVWULD
6XLWH
7HPHFXOD&$

7

)

ZZZZLOOGDQFRPILQDQFLDO

(1*,1((5
6$11(;$7,215(3257$)),'$9,7
&LW\RI9LFWRUYLOOH
/DQGVFDSH0DLQWHQDQFH$VVHVVPHQW'LVWULFW1R
$QQH[DWLRQRI7UDFW0DS
&RPPHQFLQJLQ)LVFDO<HDU
&LW\RI9LFWRUYLOOH
6DQ%HUQDUGLQR&RXQW\6WDWHRI&DOLIRUQLD

$VSDUWRIWKH5HVROXWLRQRI,QWHQWLRQSDFNHWSUHVHQWHGIRUWKH FRQVLGHUDWLRQRIWKH9LFWRUYLOOH&LW\&RXQFLO WKLV 5HSRUW DQG WKH HQFORVHG EXGJHW GLDJUDP DQG GHVFULSWLRQ RXWOLQH VSHFLILF SURSRVHG FKDQJHV WR WKH /DQGVFDSH0DLQWHQDQFH$VVHVVPHQW'LVWULFW1RIRUILVFDO\HDU LQFOXGLQJWKHDQQH[DWLRQRI 7HUULWRU\ WR WKH 'LVWULFW
WKH H[SDQVLRQ RI WKH LPSURYHPHQWV WR EH PDLQWDLQHG ZLWKLQ WKH 'LVWULFW DQG WKH SURSRVHG DQQXDO DVVHVVPHQWV IRU DOO SDUFHOV ZLWKLQ WKH $QQH[DWLRQ 7HUULWRU\ FRPPHQFLQJ LQ )LVFDO <HDU 5HIHUHQFHLVKHUHE\PDGHWRWKH6DQ%HUQDUGLQR&RXQ W\$VVHVVRU¶V3DUFHO0DSIRUDGHWDLOHG GHVFULSWLRQRIWKHOLQHVDQGGLPHQVLRQVRIWKHSDUFHOVDQQH[DW LRQWHUULWRU\NQRZQDV7UDFW0DSWKDW ZLOOEHVXEMHFWWRWKHSURSRVHGDQQXDODVVHVVPHQW
7KHXQGHUVLJQHGUHVSHFWIXOO\VXEPLWVWKHHQFORVHG5HSRUWDVGLUHFWHGE\WKH&LW\&RXQFLO
'DWHGWKLVBBBBBBGD\RIBBBBBBBBBBBB

%\
BBBBBBBBBBBBBBBBBBBBBBBBBBBBB
)UHG\$%RQLOOD3($FWLQJ&LW\(QJLQHHU

:LOOGDQ)LQDQFLDO6HUYLFHV
$VVHVVPHQW(QJLQHHU

%\
BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB %\
BBBBBBBBBBBBBBBBBBB BBBBBBBBB
6WDFHH5H\QROGV 7\URQH3HWHU 3ULQFLSDO&RQVXOWDQW 3(&

, +(5(%< &(57,)< WKH HQFORVHG (QJLQHHU¶V 5HSRUW WRJHWKHU ZLWK$VVHVVPHQW 5ROO DQG $VVHVVPHQW 'LDJUDPWKHUHWRDWWDFKHGZDVILOHGZLWKPHRQWKHBBBBBGD\RIBBBBBBBB
%\
BBBBBBBBBBBBBBBBBBBBBBBBBBBB
&LW\&OHUN&LW\RI9LFWRUYLOOH &RXQW\RI6DQ%HUQDUGLQR&DOLIRUQLD

, +(5(%< &(57,)< WKH HQFORVHG (QJLQHHU¶V 5HSRUW WRJHWKHU ZLWK$VVHVVPHQW 5ROO DQG $VVHVVPHQW 'LDJUDP WKHUHWR DWWDFKHG ZDV DSSURYHG DQG FRQILUPHG E\ WKH &LW\ &RXQFLO RI WKH &LW\ RI 9LFWRUYLOOH &DOLIRUQLDRQWKHBBBBBGD\RIBBBBBBBB

%\
BBBBBBBBBBBBBBBBBBBBBBBBBBBB
&LW\&OHUN&LW\RI9LFWRUYLOOH &RXQW\RI6DQ%HUQDUGLQR&DOLIRUQLD

7DEOHRI&RQWHQWV
,1752'8&7,21 /$1'6&$3(0$,17(1$1&($66(660(17',675,&712 $11(;$7,217(55,725< 352&((',1*6$1'5(3257&217(17 %DOORW3URFHHGLQJV 5HSRUW&RQWHQW 3$57,³3/$16$1'63(&,),&$7,216 '(6&5,37,212)7+(',675,&7 ,03529(0(176(;,67,1*',675,&7 $11(;$7,217(55,725<),6&$/<($5 3$57,,³0(7+2'2)$33257,210(17
/(*,6/$7,9(5(48,5(0(176)25$66(660(176
%(1(),7$1$/<6,6
/DQGVFDSLQJ6SHFLDO%HQHILW
/DQGVFDSLQJ*HQHUDO%HQHILW $66(660(170(7+2'2/2*< 3$57,,,³(67,0$7(2)&2676 352326('%8'*(76$1'$66(660(176 $QQH[DWLRQ7HUULWRU\%XGJHW)LVFDO<HDU $QQXDO,QIODWLRQDU\$GMXVWPHQW
$VVHVVPHQW5DQJH)RUPXOD
3$57,9³%281'$5<',$*5$0 3$579³$66(660(1752// 9LFWRUYLOOH/DQGVFDSH0DLQWHQDQFH$VVHVVPHQW'LVWULFW1R (QJLQHHU¶V5HSRUW
$QQH[DWLRQRI7UDFW0DS
)LVFDO<HDU

3DJH
,QWURGXFWLRQ
7KH&LW\RI9LFWRUYLOOH
³&LW\ ´
XQGHUWKHSURYLVLRQVRIWKH/ DQGVFDSLQJDQG/LJKWLQJ$FWRI 3DUWRI
'LYLVLRQRIWKH&DOLIRUQLD6WUHHWVDQG+LJKZD\V&RGH ³
$FW´
HVWDEOLVKHGWKHDVVHVVPHQWGLVWULFW
GHVLJQDWHGDV

/$1'6&$3(0$,17(1$1&($66(660(17',675,&712

KHUHLQDIWHU UHIHUUHG WR DV ³/0$' 1R ´RU ³'LVWULFW´ 3XUVXDQW WR WKH SURYLVLRQVRI WKH
$FWDQG LQ
FRPSOLDQFH ZLWK WKH VXEVWDQWLYH DQG SURFHGXUDO UHTXLUHPHQWV RI $UWLFOH ;,,,' RI WKH &DOLIRUQLD 6WDWH &RQVWLWXWLRQ
WKH³&DOLIRUQLD&RQVWLWXWLRQ´
WKH&LW\&RXQFLORIWKH&LW\RI9LFWRUYLOOH
³&LW\&RXQFLO´
SURSRVHV
WRDQQH[7UDFW0DS
KHUHDIWHUUHIHUUHGWRDVWKH³$QQH[DWLRQ7HUULWRU\´DQGDOVRUHIHUUHGWRDV³7UDFW´
H[SDQGLQJWKHLPSURYHPHQWVWREHSURYLGHGDQGPDLQWDLQHGZLWKLQWKH/0$'1RDQGWRFRQGXFWDSURWHVW EDOORWSURFHHGLQJIRUVSHFLDOEHQHILWDVVHVVPHQWVWREHOHYLHG DQGFROOHFWHGDQQXDOO\RQWKHSDUFHOVZLWKLQ WKH$QQH[DWLRQ7HUULWRU\LQRUGHUWRIXQGLQZKROHRULQSDUWW KHPDLQWHQDQFHDQGRSHUDWLRQRIFHUWDLQSXEOLF LPSURYHPHQWVWKDWPD\LQFOXGHEXWLVQRWOLPLWHGWRODQGVFDSLQJSDUNVDQGDSSXUWHQDQWIDFLOLWLHVWKDWSURYLGH VSHFLDOEHQHILWVWRWKRVHSURSHUWLHVFRPPHQFLQJLQ)LVFDO<HDU $VUHTXLUHGSXUVXDQWWR&KDSWHU$UWLFOHRIWKH
$FWWKLV/DQGVFDSH0DLQWHQDQFH$VVHVVPHQW'LVWULFW (QJLQHHU¶V5HSRUW
³5HSRUW´
VKDOOVHUYHDVWKHGHWDLOHGHQJLQHHU¶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
V6XEGLYLVLRQ2UGLQDQFHDQ GLVDUHTXLUHPHQWIRULVVXDQFHRIDSHUPLW IRUFRQVWUXFWLRQRIFRPPHUFLDOUHVLGHQWLDODQGSODQQHGXQLWG HYHORSPHQW7KHVHLPSURYHPHQWVJHQHUDOO\ LQFOXGHEXWDUHQRWOLPLWHGWRVWUHHWOLJKWVDQGUHODWHGHTXLSP HQWDQGIL[WXUHV YDULRXVODQGVFDSHPDWHULDOV
VXFKDVWUHHVWXUIVKUXEVYLQHVDQGJURXQGFRYHU
LUULJDWLR QDQGGUDLQDJHV\VWHPV
VWUXFWXUDODPHQLWLHV
VXFKDVPRQXPHQWVEORFNZDOOVUHWDLQLQJZDOOVRURWKHUIHQFLQJ KDUGVFDSHVLQFOXGLQJPXOFKWUDLODQGSDWK
VXUIDFHV VWDPSHG FRQFUHWH DQG SDYHUV
UHFUHDWLRQDO DPHQLWLHV VXFK DV EHQFKHV SLFQLF IDFLOLWLHV SOD\

VWUXFWXUHV
VLJQDJHDQGUHODWHGDSSXUWHQDQFHV
7KH LQVWDOODWLRQ RI ODQGVFDSLQJ DQG DSSXUWHQDQW IDFLOLWLHV LV WKH UHVSRQVLELOLW\ RI WKH VXEGLYLGHU RU RWKHU GHYHORSPHQWDSSOLFDQW WULJJHUHG E\ WKH DSSURYDO RI D WHQWDWLYH VXEGLYLVLRQ PDS RU RWKHU GHYHORSPHQW DSSOLFDWLRQ $IWHU LQVWDOODWLRQ LW LV &LW\ SROLF\ WKDW WKH VHU YLFLQJ RSHUDWLRQ PDLQWHQDQFH UHSDLU DQG 9LFWRUYLOOH/DQGVFDSH0DLQWHQDQFH$VVHVVPHQW'LVWULFW1R (QJLQHHU¶V5HSRUW
$QQH[DWLRQRI7UDFW0DS
)LVFDO<HDU

3DJH
UHSODFHPHQWRIODQGVFDSLQJDQGDSSXUWHQDQWIDFLOLWLHVLQWXUQEHFRPHWKHILVFDOUHVSRQVLELOLW\RIWKHSURSHUWLHV WKDWVSHFLDOO\EHQHILWIURPWKHIDFLOLWLHV

+,6725,&$/%$&.*5281'
7KHUHVLGHQWLDOVXEGLYLVLRQSODQVIRUWKHWUDFWVZLWKLQ/0$'1R ZHUHVXEPLWWHGWRWKH&LW\E\GHYHORSHUV DQG ZHUH DSSURYHG ZLWK FHUWDLQ FRQGLWLRQV 2QH VXFK FRQGLWLRQ UHTXLUHG D PHDQV WR IXQG WKH SHUSHWXDO PDLQWHQDQFHRIODQGVFDSLQJZLWKLQWKHSXEOLFULJKWRIZD\VDQGGHGLFDWHGHDVHPHQWDUHDV,QRUGHUWRPHHW WKLV FRQGLWLRQ WKH GHYHORSHU DV VROHRZQHU RI WKH VXEGLYLVLRQ SURSHUW\ SHWLWLRQHG WKH &LW\ WR IRUP DQ DVVHVVPHQWGLVWULFW7KH/0$'VZHUHIRUPHGE\&LW\&RXQFLO5HVROXWLRQVLQDFFRUGDQFHZLWKWKH/DQGVFDSH DQG/LJKWLQJ$FWRI
ZKLFKLV3DUW'LYLVLRQRIWKH&DOLIRUQLD6WUHHWVDQG+LJKZD\V&RGHLQRUGHU WR SURYLGH D IXQGLQJ VRXUFH IRU WKH DGPLQLVWUDWLRQ RSHUDWLRQV DQG PDLQWHQDQFH DQG VHUYLFLQJ RI WKH ODQGVFDSLQJZLWKLQWKH'LVWULFW(DFKSDUFHOZLWKLQWKH/0$'VLVDVVHVVHGDWDUDWHHTXLWDEOHWRWKHEXGJHW QRWH[FHHGLQJWKHPD[LPXPDOORZDEOHUDWH)XWXUHLPSURYHPHQWSD UFHOVDUHDVVHVVHGDQQXDOO\XQWLO VXFKWLPHWKHLPSURYHPHQWVDUHFRQVWUXFWHG

$11(;$7,217(55,725<
7KH$QQH[DWLRQ7HUULWRU\FRQVLVWVRIDOOORWVDQGSDUFHOVRIODQGZLWKLQWKHSODQQHGGHYHORSPHQWLGHQWLILHGDV 7UDFW0DSZKLFKZLOOGHYHORSRXWWRVHYHQW\WZR
UHVLGHQWLDOXQLWV
7KLV5HSRUWKDVEHHQSUHSDUHGSXUVXDQWWRWKHSURYLVLRQVRIWKH&DOLIRUQLD&RQVWLWXWLRQDQGWKH $FWDQG
VKDOOVHUYHDVWKHGHWDLOHGHQJLQHHU¶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

DQG
DQG

DQG
DQG
DQGDQGE\UHIHUHQFHWKRVHSODQV
DQGVSHFLILFDWLRQVDUHPDGHSDUWRIWKLV5HSRUW
7KHHVWLPDWHGEXGJHWSURYLGHGKHUHLQLVEDVHGRQWKH&LW\¶VHVW LPDWHRIWKH$QQH[DWLRQ7HUULWRU\H[SHQVHV IRU ORFDO LPSURYHPHQWV DQG VHUYLFHV LQ WKH $QQH[DWLRQ 7HUULWRU\ 7KH UHVXOWLQJ DQQXDO DVVHVVPHQWV DUH FDOFXODWHGXWLOL]LQJWKHPHWKRGRIDSSRUWLRQPHQWHVWDEOLVKHGXQGHU3DUW,,0HWKRGRI$SSRUWLRQPHQWDQGDUH PDGHSXUVXDQWWRWKH
$FWDQGWKHVXEVWDQWLYHDQGSURFHGXUDOSURYLVLRQVRIWKH&DOLIRUQLD&RQVWLWXWLRQ
7KHZRUG³SDUFHO´IRUWKHSXUSRVHVRIWKLV5HSRUWUHIHUVWRDQLQGLYLGXDOSURSHUW\DVVLJQHGLWVRZQ$VVHVVRU¶V 3DUFHO 1XPEHU
$31
E\ WKH 6DQ %HUQDUGLQR &RXQW\ $VVHVVRU¶V 2II LFH 7KH 6DQ %HUQDUGLQR &RXQW\ $XGLWRU&RQWUROOHUXVHV$VVHVVRU¶V3DUFHO1XPEHUVDQGVSHFLILF )XQG1XPEHUVWRLGHQWLI\SURSHUWLHVWREH DVVHVVHGRQWKHWD[UROOIRUWKHVSHFLDOEHQHILWDVVHVVPHQWV 9LFWRUYLOOH/DQGVFDSH0DLQWHQDQFH$VVHVVPHQW'LVWULFW1R (QJLQHHU¶V5HSRUW
$QQH[DWLRQRI7UDFW0DS
)LVFDO<HDU

3DJH
352&((',1*6$1'5(3257&217(17
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

DSSURYHWKHDVVHVVPHQWGLDJUDPV
7UDFW%RXQGDU\'LDJUDP
FRQWDLQHG
KHUHLQ
RUGHUWKHDQQH[DWLRQRIWKHSDUFHOVZLWKLQ/0$'1RDQGWKHLPSURYHPHQWVWREHPDGH DQGFRQILUP
WKHDVVHVVPHQWVDVRXWOLQHGLQWKLV5HSRUW
7KHDVVHVVPHQWVDVDSSURYHGPD\EHOHYLHGDQGFROOHFWHGRQWKH &RXQW\WD[UROOVFRPPHQFLQJLQ)LVFDO <HDU)RU)LVFDO<HDUDQGHDFKVXEVHTXHQWI LVFDO\HDUWKLVWUDFWZLOOEHLQFOXGHGLQ 9LFWRUYLOOH/DQGVFDSH0DLQWHQDQFH$VVHVVPHQW'LVWULFW1R (QJLQHHU¶V5HSRUW
$QQH[DWLRQRI7UDFW0DS
)LVFDO<HDU

3DJH
WKH$QQXDO&RQVROLGDWHG/DQGVFDSH0DLQWHQDQFH$VVHVVPHQW'LVWULFW5HSRUWZKLFKVKDOOEHSUHSDUHGDQG SUHVHQWHGWRWKH&LW\&RXQFLOWRDGGUHVVDQ\SURSRVHGFKDQJHV LQFOXGLQJ7UDFW0DSDVZHOODVDQ\ SURSRVHGFKDQJHVWRWKHLPSURYHPHQWVEXGJHWVDQGDVVHVVPHQWV IRUWKDWILVFDO\HDU7KH&LW\&RXQFLO VKDOOKROGDQRWLFHGSXEOLFKHDULQJUHJDUGLQJWKHVHPDWWHUVSULRUWRDSSURYLQJDQGRUGHULQJWKHOHY\RIDQQXDO DVVHVVPHQWVIRUWKH'LVWULFW
,ILQDQ\ILVFDO\HDUWKHSURSRVHGDQQXDODVVHVVPHQWVIRUSDUF HOVZLWKWKH'LVWULFWH[FHHGWKHPD[LPXP DVVHVVPHQWVGHVFULEHGKHUHLQVXFKDQDVVHVVPHQWZRXOGEHFRQVL GHUHGDQLQFUHDVHGDVVHVVPHQWDQG PXVWEHFRQILUPHGWKURXJKDPDLOHGSURSHUW\RZQHUSURWHVWEDOORWSURFHHGLQJIRUWKHDIIHFWHGSDUFHOVEHIRUH WKHLQFUHDVHGDVVHVVPHQWPD\EHLPSRVHG
5HSRUW&RQWHQW
7KLV 5HSRUW KDV EHHQ SUHSDUHG LQ FRQQHFWLRQ ZLWK WKH DQQH[DWLRQ RI SDUFHOV LQWR /0$' 1R DQG WKH UHVXOWLQJ DVVHVVPHQW IRU WKH SDUFHO ZLWKLQ 7UDFW 0DS HVWDEOLVKHG KHUHLQ LQ FRQQHFWLRQ ZLWK WKH DQQH[DWLRQRI7HUULWRU\IRU)LVFDO<HDUSXUVXDQWWR DUHVROXWLRQRIWKH&LW\&RXQFLODQGFRQVLVWV RIILYH

SDUWV

3DUW,³3ODQVDQG6SHFLILFDWLRQV
&RQWDLQVDJHQHUDOGHVFULSWLRQRIWKH'LVWULFWDQGWUDFWRIEHQ HILW ³7UDFW´
DQGVSHFLILFDOO\DGGUHVVHVWKH
LPSURYHPHQWVDQGVHUYLFHVWKDWSURYLGHVSHFLDOEHQHILWVWRWKHSDUFHOVZLWKLQWKH$QQH[DWLRQ7HUULWRU\ZKLFK LQFOXGHEXWLVQRWOLPLWHGWRORFDOODQGVFDSLQJDQGUHODWHGDPHQLWLHVLQFOXGLQJRSHUDWLRQDOH[SHQVHVDQGIXQG EDODQFHVDXWKRUL]HGE\WKH
$FW7KHSODQVDQGVSHFLILFDWLRQVFRQWDLQHGLQWKLV5HSRUWJHQHUDOO\GHVFULEH WKH QDWXUH DQG H[WHQW RI WKH LPSURYHPHQWV ,Q FRQMXQFWLRQ ZLWK WKHVH JHQHUDO GHVFULSWLRQV RI WKH LPSURYHPHQWVDYLVXDOGHSLFWLRQRIWKHLPSURYHPHQWVLVSURYLGHG LQWKH7UDFW%RXQGDU\'LDJUDPFRQWDLQHG LQ 3DUW ,9 RI WKLV 5HSRUW 7KH GHWDLOHG SODQV DQG VSHFLILFDWLRQV IRU WKH LPSURYHPHQWV LQ WKH $QQH[DWLRQ 7HUULWRU\DUHRQILOHLQWKH3XEOLF:RUNV'HSDUWPHQWRIWKH&LW\RI9LFWRUYLOOHDQGE\UHIHUHQFHDUHPDGHSDUW RIWKLV5HSRUW
3DUW,,³0HWKRGRI$SSRUWLRQPHQW
2XWOLQHV WKH VSHFLDO DQG JHQHUDO EHQHILWV DVVRFLDWHG ZLWK WKH LPSURYHPHQWV WR EH SURYLGHG ZLWKLQ WKH $QQH[DWLRQ7HUULWRU\DQGWKHEDVLVXSRQZKLFKWKHHVWLPDWHGFRVWVWRSURYLGHVXFKLPSURYHPHQWVKDVEHHQ DSSRUWLRQHGWRHDFKSDUFHORIODQGWKHUHLQLQSURSRUWLRQWRWKHVSHFLDOEHQHILWVWREHUHFHLYHG 3DUW,,,³(VWLPDWHRI&RVWV
,GHQWLILHVWKHHVWLPDWHGDQQXDOIXQGLQJFRVWV
%XGJHW
UHTXLUHG IRUWKHPDLQWHQDQFHDQGRSHUDWLRQRIWKH
LPSURYHPHQWVLQFOXGLQJEXWQRWOLPLWHGWRDQQXDOPDLQWHQDQFH DQGVHUYLFHH[SHQVHVXWLOLW\FRVWVUHODWHG LQFLGHQWDOH[SHQVHVDQGIXQGEDODQFHVDXWKRUL]HGE\WKH $FWDQGGHHPHGDSSURSULDWHWRIXOO\VXSSRUW
WKHLPSURYHPHQWV7KRVHLPSURYHPHQWVDQGRUFRVWVGHWHUPLQHGWREHRIJHQHUDOEHQHILWVKDOOEHIXQGHGE\ D &LW\ FRQWULEXWLRQ 7KLV EXGJHW HVWDEOLVKHV WKH PD[LPXP DVVHVVPHQWV WR EH DSSURYHG E\ WKH SURSHUW\ RZQHU
V
RIUHFRUGZLWKLQWKH$QQH[DWLRQ7HUULWRU\DVSDUWRIWKH%DOORW3URFHHGLQJ 7KLV VHFWLRQ DOVR LGHQWLILHV DQG RXWOLQHV DQ $VVHVVPHQW 5DQJH ) RUPXOD LQIODWLRQDU\ DGMXVWPHQW
WKDW
SURYLGHV IRU DQ DQQXDO DGMXVWPHQW WR WKH PD[LPXP DVVHVVPHQW UDWH WKDW HVWDEOLVKHV OLPLWV RQ IXWXUH DVVHVVPHQWVEXWDOVRSURYLGHVIRUUHDVRQDEOHFRVWDGMXVWPHQWVGXHWRLQIODWLRQ 9LFWRUYLOOH/DQGVFDSH0DLQWHQDQFH$VVHVVPHQW'LVWULFW1R (QJLQHHU¶V5HSRUW
$QQH[DWLRQRI7UDFW0DS
)LVFDO<HDU

3DJH
3DUW,9³%RXQGDU\'LDJUDP
$ GLDJUDP VKRZLQJ WKH H[LVWLQJ 'LVWULFW DQG $QQH[DWLRQ 7HUULWRU\ 7KH OLQHV DQG GLPHQVLRQV RI HDFK ORW SDUFHO DQG VXEGLYLVLRQ RI ODQG FRQWDLQHG LQ WKLV GLDJUDP DUH LQFOXVLYH RI DOO SDUFHOV OLVWHG LQ ³3DUW 9 ± $VVHVVPHQW5ROO´RIWKLV5HSRUWDQGWKHFRUUHVSRQGLQJ&RXQW\$VVHVVRU¶V3DUFHO0DSVIRUVDLGSDUFHOVDV WKH\ H[LVWHG DW WKH WLPH WKLV 5HSRUW ZDV SUHSDUHG DQG VKDOO LQFOXGH DOO VXEVHTXHQW VXEGLYLVLRQV ORWOLQH DGMXVWPHQWVRUSDUFHOFKDQJHVWKHUHLQ5HIHUHQFHLVKHUHE\PDGHWRWKH6DQ%HUQDUGLQR&RXQW\$VVHVVRU¶V PDSV IRU D GHWDLOHG GHVFULSWLRQ RI WKH OLQHV DQG GLPHQVLRQV RIHDFK ORW DQG SDUFHO RI ODQG ZLWKLQ WKH $QQH[DWLRQ7HUULWRU\
3DUW9³$VVHVVPHQW5ROO
7KH³%DOORWHG0D[LPXP$VVHVVPHQW´DPRXQWIRUHDFKSDUFHOUHSUHV HQWVWKDWSDUFHO¶VSURSRVHGPD[LPXP DVVHVVPHQWDPRXQWIRUHDFKSDUFHOZLWKLQ7UDFW0DSFRPPHQ FLQJLQILVFDO\HDUDQGLV EDVHG RQ WKH SDUFHO¶V FDOFXODWHG SURSRUWLRQDO VSHFLDO EHQHILW D V RXWOLQHG LQ ³3DUW ,, ² 0HWKRG RI $SSRUWLRQPHQW´DQGFDOFXODWHGDVVHVVPHQWUDWHHVWDEOLVKHGE\WKHEXGJHWLQ³3DUW,,,²(VWLPDWHRI&RVWV´ ,IDQ\VHFWLRQVXEVHFWLRQVHQWHQFHFODXVHSKUDVHSRUWLRQRUWUDFWRIWKLV5HSRUWLVIRUDQ\UHDVRQKHOGWR EHLQYDOLGRUXQFRQVWLWXWLRQDOE\WKHGHFLVLRQRIDQ\FRXUWRIFRPSHWHQWMXULVGLFWLRQVXFKGHFLVLRQVKDOOQRW DIIHFW WKH YDOLGLW\ RI WKH UHPDLQLQJ SURYLVLRQV RI WKH 5HSRUW DQG HDFK VHFWLRQ VXEVHFWLRQ VXEGLYLVLRQ VHQWHQFH FODXVH SKUDVH SRUWLRQ WUDFW WKHUHRI LUUHVSHFWLYHRI WKH IDFW WKDW DQ\ RQH RU PRUH VHFWLRQV VXEVHFWLRQV VHQWHQFHV FODXVHV SKUDVHV SRUWLRQV RU WUDFW PLJKW VXEVHTXHQWO\ EH GHFODUHG LQYDOLG RU XQFRQVWLWXWLRQDO
9LFWRUYLOOH/DQGVFDSH0DLQWHQDQFH$VVHVVPHQW'LVWULFW1R (QJLQHHU¶V5HSRUW
$QQH[DWLRQRI7UDFW0DS
)LVFDO<HDU

3DJH
3DUW,³3ODQVDQG6SHFLILFDWLRQV
'(6&5,37,212)7+(',675,&7
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

DSSOLFDEOH
WKHSHUVRQQHOPDWHULDOVHTXLSPHQWHOHFWULFLW\ZDWHUFRQWUDFWVHUYLFHVUHSDLUDQGUHKDELOLWDWLRQ RIWKHLPSURYHPHQWVDQGLQFLGHQWDOH[SHQVHVUHTXLUHGWRRSHUDWHWKH'LVWULFWDQGSURYLGHWKHLPSURYHPHQWV DQGVHUYLFHV
,PSURYHPHQWVSURYLGHGZLWKLQWKH'LVWULFWPD\LQFOXGHEXWDUHQRWOLPLWHGWR
¾ /DQGVFDSLQJDQGUHODWHGIDFLOLWLHVDQGDPHQLWLHVORFDWHGZLWKLQGHVLJQDWHGVWUHHWPHGLDQVSDUNZD\DQG VWUHHWVFDSHVLGHSDQHOVDQGHQWU\ZD\VZLWKLQWKHSXEOLFULJKW RIZD\VRUHDVHPHQWVDGMDFHQWWRSXEOLF ULJKWRIZD\V
DQGZLWKLQSXEOLFSODFHVLQFOXGLQJJUHHQEHOWDUHDVRSHQVSDFHVDQGQHLJKERUKRRGSDUNV ZLWKLQHDFKUHVSHFWLYH7UDFW7KHVHLPSURYHPHQWVPD\LQFOXGHEXWDUHQRWOLPLWHGWR
x YDULRXVODQGVFDSHPDWHULDOVVXFKDVWUHHVWXUIVKUXEVYLQHV JURXQGFRYHUDQQXDORUSHUHQQLDO

SODQWLQJV

x LUULJDWLRQDQGGUDLQDJHV\VWHPV

x VWUXFWXUDODPHQLWLHVVXFKDVPRQXPHQWVEORFNZDOOVUHWDLQLQJZDOOVRURWKHUIHQFLQJ
x KDUGVFDSHVLQFOXGLQJPXOFKWUDLODQGSDWKVXUIDFHVVWDPSHGFRQFUHWHDQGSDYHUV
7KH PDLQWHQDQFH RI WKHVH LPSURYHPHQWV PD\ LQFOXGH EXW LV QRW OLPLWHG WR WKH UHJXODUO\ VFKHGXOHG PRZLQJ WULPPLQJ SUXQLQJ IHUWLOL]DWLRQ SHVW FRQWURO ZHHG DQ G JUDIILWL DEDWHPHQW LQVWDOODWLRQ
UHSODFHPHQW DQG UHKDELOLWDWLRQ RI WKH ODQGVFDSLQJ UHSDLU RU UH SODFHPHQW RI LUULJDWLRQ RU GUDLQDJH V\VWHPV
UHSDLURUUHSODFHPHQWRIKDUGVFDSHLPSURYHPHQWVDQGUH FUHDWLRQDODPHQLWLHV7KH&LW\3XEOLF :RUNV'HSDUWPHQWVKDOODXWKRUL]HDQGVFKHGXOHVXFKPDLQWHQDQFHDQGVHUYLFLQJDVQHHGHGDQGEDVHG RQDYDLODEOHIXQGLQJ
7KLVQHZ$QQH[DWLRQ7HUULWRU\7UDFW0DSZLOOSD\IRUVKDU HLPSURYHPHQWVZLWKRWKHU7UDFWVLQWKH /0$'1RWKHUHLVQRQHZODQGVFDSLQJEHLQJLQVWDOOHG 9LFWRUYLOOH/DQGVFDSH0DLQWHQDQFH$VVHVVPHQW'LVWULFW1R (QJLQHHU¶V5HSRUW
$QQH[DWLRQRI7UDFW0DS
)LVFDO<HDU

3DJH
(;,67,1*75$&76,1',675,&7
,QDFFRUGDQFHZLWKWKH
$FWWKH'LVWULFWXWLOL]HV7UDFWVWRDGGUHVVYDULDWLRQVLQWKHQDWXUHORFDWLRQDQG H[WHQWRIWKHLPSURYHPHQWVWKDWSURYLGHVSHFLDOEHQHILWVWRSDU FHOVLQWKH'LVWULFW(DFK7UDFWLVDVVRFLDWHG ZLWKVSHFLILFLPSURYHPHQWVDQGRUW\SHVRILPSURYHPHQWVWKDWSURYLGHVSHFLDOEHQHILWWRSURSHUWLHVZLWKLQWKDW 7UDFW7KHERXQGDULHVRIHDFK7UDFWDUHEDVHGRQWKHLPSURYHPHQ WVWREHPDLQWDLQHGDQGWKHUHODWLRQVKLS DQG SUR[LPLW\ RI WKH GHYHORSPHQWV DQG SURSHUWLHV WKDW GHULYH VS HFLDO EHQHILWV IURP WKRVH VSHFLILF LPSURYHPHQWV
$VRI)LVFDO<HDUWKH'LVWULFWZDVFRPSULVHGRIWKHIROORZLQJ7UDFWVDQGGHYHORSPHQWV

75$&76 /2&$7,21

5DQFKR(O(YDGR
&DQWHUEXU\
(XFDO\SWXV
9LOODJH

6HFRQG$YH
UG%XUZRRG
9HUEHQD
%HOOIORZHU
'RV3DOPDV
%UDFHR
0RQWH9LVWD
3HQD/LQGHUR
&\SUHVV1LVTXDOOL
0RMDYH-RVKXD
+RRN0HVD/LQGD
(XFDO\SWXV
+:<
0HVD
0HVD0HVD/LQGD
7RSD](XFDO\SWXV
0HVD7RSD]
'LDPRQG&REDOW
&RUGRYD7DZQH\
7RSD]%L]FDQH
1LQWK2WWDZD
$UURZKHDG2WWDZD
:LQRQD6HYHQWK

7RSD]'DZQ
0HVD9LHZ3HQD

0HVD9LHZ-RVKXD
$PHWK\VW6WDUVKLQ
'LDPRQG7DZQH\5LGJH
7RSD]'RV

3ULQFHWRQ
0RMDYH2Q\[
(XFDO\SWXV
0HVD9LHZ/D0HVD
&\SUHVV
&\SUHVV2WWDZD

)HDWKHU5RFN
$PDUJRVD+DUORZ
'RV3DOPDV7RSD]

0HVD9LHZ)RUUHVW
$UURZKHDG

&DQWLQD
&\SUHVV*UH\URFN

7DZQH\5LGJH(O(YDGR
&DQWLQD

UG1LVTXDOOL
0HVD/LQGD9HUDQR

0HVD9LHZ/D0HVD
7RSD]+RRN

6HYHQWK7DOSD
7KLUG6LOLFD
6HYHQWK2WWDZD
7DOSD7KLUG

/D0HVD(YHO\Q
6LOLFD6HFRQG

+RSODQG&REDOW1RUWKVWDU
0RMDYH0HVD
5DQFKR
6HQHFD*UHHQ

1DVVDX0LOEXUQ
0HVD9LHZ
0HVD9LHZ/D0HVD
7DOSDUG
%HDU9DOOH\3HQD

%XUZRRG7KLUG
0RMDYH)HUQGDOH
0HVD/LQGD/D0HVD

&DSLVWUDQR'HVHUW/LO\

:LQRQD1LQWK
%RWHOOD

6HTXLRD0HVD/LQGD6LHUUD
9LFWRUYLOOH/DQGVFDSH0DLQWHQDQFH$VVHVVPHQW'LVWULFW1R (QJLQHHU¶V5HSRUW
$QQH[DWLRQRI7UDFW0DS
)LVFDO<HDU

3DJH
75$&76 /2&$7,21
5LGJHFUHVW%OXIIFUHVW3DUN*OHQ

5LFKPRQG
4XDLO&RYH$PHWK\VW
$UURZKHDG2WWDZD
%UHFNHQULGJH'RV3DOPDV
+:<
(XFDO\SWXV

&RUGRED+LOOHQGDOH
0HVD9LHZ

+LJK&UHVW6W+LJK9LVWD6W
6%HDU9DOOH\3HQD
1(7RSD]/XQD

1(7RSD]/XQD
6(6\FDPRUH$PHWK\VW
0RQWH9LVWD/XQD

$11(;$7,217(55,725<),6&$/<($5
7UDFW0DS
*HQHUDOO\ORFDWHGDWWKHVRXWKRI+RSODQG6WUHHWDQGHDVWRI&DKXHQJD5RDGZLOOGHYHORSRXWWRVHYHQW\WZR

VLQJOHIDPLO\UHVLGHQWLDOXQLWVFXUUHQWO\LGHQWLILHGE\WK H6DQ%HUQDUGLQR&RXQW\$VVHVVRU¶V2IILFHDV SDUFHOV

DQG
DQG

DQG
DQG

DQG,PSURYHPHQWVZLWKLQWKH'LVWULFWDUHRQILOHZLWKWKH&LW\
9LFWRUYLOOH/DQGVFDSH0DLQWHQDQFH$VVHVVPHQW'LVWULFW1R (QJLQHHU¶V5HSRUW
$QQH[DWLRQRI7UDFW0DS
)LVFDO<HDU

3DJH

3DUW,,³0HWKRGRI$SSRUWLRQPHQW
/(*,6/$7,9(5(48,5(0(176)25$66(660(176
7KH FRVWV RI WKH SURSRVHG LPSURYHPHQWV KDYH EHHQ LGHQWLILHG DQG DOORFDWHG WR SURSHUWLHV ZLWKLQ WKH $QQH[DWLRQ7HUULWRU\EDVHGRQSURSRUWLRQDOVSHFLDOEHQHILWFRQVLVWHQWZLWKWKHSURYLVLRQVRIWKH $FWDQG
WKHDVVHVVPHQWSURYLVLRQVRI3URSRVLWLRQ
EHLQJFRQWDLQHGLQ$UWLFOH;,,,'RIWKH&DOLIRUQLD&RQVWLWXWLRQ
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
$FW $UWLFOH;,,, ' RI WKH &DOLIRUQLD &RQVWLWXWLRQ RXWOLQHV VSHFLILF UHTXLUHPHQWVUHJDUGLQJDVVHVVPHQWVLQFOXGLQJWKHIROORZLQJ
$UWLFOH;,,,'6HFWLRQGGHILQHV'LVWULFWDVIROORZV

³'LVWULFWPHDQVDQDUHDGHWHUPLQHGE\DQDJHQF\WRFRQWDLQDOO SDUFHOVZKLFKZLOOUHFHLYHDVSHFLDOEHQHILW IURPDSURSRVHGSXEOLFLPSURYHPHQWRUSURSHUW\UHODWHGVHUYLFH ´
$UWLFOH;,,,'6HFWLRQLGHILQHV6SHFLDO%HQHILWDVIROORZV
³6SHFLDOEHQHILW´PHDQVDSDUWLFXODUDQGGLVWLQFWEHQHILWRYHU DQGDERYHJHQHUDOEHQHILWVFRQIHUUHGRQUHDO SURSHUW\ORFDWHGLQWKHGLVWULFWRUWRWKHSXEOLFDWODUJH*HQ HUDOHQKDQFHPHQWRISURSHUW\YDOXHGRHVQRW FRQVWLWXWH³VSHFLDOEHQHILW´
$UWLFOH;,,,'6HFWLRQDGHILQHVSURSRUWLRQDOVSHFLDOEHQHILWDVVHVVPHQWVDVIROORZV
³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´ %(1(),7$1$/<6,6
/DQGVFDSLQJ6SHFLDO%HQHILW
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¶V5HSRUW
$QQH[DWLRQRI7UDFW0DS
)LVFDO<HDU

3DJH
,Q3DUNZD\VDQG/DQG9DOXHVZULWWHQE\-RKQ1RODQDQG+HQU\9+XEEDUGLQ LWLVVWDWHG

³WKHUHLVQRODFNRIRSLQLRQEDVHGRQJHQHUDOSULQFLSDOVDQGH[SHULHQFHDQGFRPPRQVHQVHWKDWSDUNZD\V GRLQIDFWDGGYDOXHWRSURSHUW\HYHQWKRXJKWKHDPRXQWFDQQRW EHGHWHUPLQHGH[DFWO\,QGHHGLQPRVW FDVHVZKHUHSXEOLFPRQH\KDVEHHQVSHQWIRUSDUNZD\VWKHDVVXPS WLRQKDVEHHQGHILQLWHO\PDGHWKDWWKH SURSRVHGSDUNZD\ZLOOVKRZDSURYDEOHILQDQFLDOSURILWWRWKH&LW\,WKDVEHHQEHOLHYHGWKDWWKHHVWDEOLVKPHQW RISDUNZD\VFDXVHVDULVHLQUHDOHVWDWHYDOXHVWKURXJKRXWWKH&LW\RULQSDUWVRIWKH&LW\´ ,Q7KH(FRQRPLF9DOXHRI7UHHVLQ8UEDQ$UHDVZULWWHQE\3KLOOLS.LOOLFRDW(YD3X]LRDQG5DQG\6WULQJHULQ LWLVVWDWHG

³,QFUHDVHGSURSHUW\YDOXHVLQFU HDVHGWD[UHYHQXHVLQFUHDVHGL QFRPHOHYHOVIDVWHUUHDOHVWDWHVDOHVWXUQ RYHUUDWHVVKRUWHUXQRFFXSLHGSHULRGV«KDYHDOOEHHQOLQNHGWRWUHHDQGODQGVFDSHSUHVHQFH´ ,WVKRXOGEHQRWHGWKDWWKHGHILQLWLRQRI³SDUNZD\V´DERYHPD\LQFOXGHWKHURDGZD\DVZHOODVWKHODQGVFDSLQJ DORQJVLGHWKHURDGZD\LQFOXGLQJ&LW\RZQHGDQGPDLQWDLQHGWUHHVZLWKLQWKHSXEOLFULJKWRIZD\ /DQGVFDSLQJ*HQHUDO%HQHILW
6HFWLRQ RI $UWLFOH ;,,,' SURYLGHV WKDW RQFHD ORFDO DJHQF\ ZKLFK SURSRVHV WR LPSRVH DVVHVVPHQWVRQ SURSHUW\KDVLGHQWLILHGWKRVHSDUFHOVWKDWZLOOKDYHVSHFLDOEHQHILWVFRQIHUUHGXSRQWKHPDQGXSRQZKLFKDQ DVVHVVPHQW ZLOO EH LPSRVHG WKH ORFDO DJHQF\ PXVWQH[W ³VHSDUDWH WKH JHQHUDO EHQHILWV IURP WKH VSHFLDO EHQHILWVFRQIHUUHG´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¶V5HSRUW
$QQH[DWLRQRI7UDFW0DS
)LVFDO<HDU

3DJH
$66(660(170(7+2'2/2*<
7RDVVHVVEHQHILWVHTXLWDEO\LWLVQHFHVVDU\WRFDOFXODWHHDFKSURSHUW\¶VUHODWLYHVKDUHRIWKHVSHFLDOEHQHILWV FRQIHUUHGE\WKHIXQGHGLPSURYHPHQWVDQGVHUYLFH7KH(TXLYDOHQW%HQHILW8QLW (%8
PHWKRGRIDVVHVVPHQW
DSSRUWLRQPHQW LV XWLOL]HG IRU WKLV 'LVWULFW DQG HVWDEOLVKHV D EDVLF XQLW EDVH YDOXH
RI EHQHILW DQG WKHQ
FDOFXODWHVWKHEHQHILWGHULYHGE\HDFKDVVHVVHGSDUFHODVDPXOWLSOH RUDIUDFWLRQ
RIWKDWEDVLFXQLW7KH
(%8 PHWKRG RI DSSRUWLRQLQJ VSHFLDO EHQHILWV LV W\SLFDOO\ VHHQ DV WKH PRVW DSSURSULDWH DQG HTXLWDEOH DVVHVVPHQWPHWKRGRORJ\IRUDVVHVVPHQWGLVWULFWVDVWKHEHQHILW WRHDFKSDUFHOIURPWKHLPSURYHPHQWVDUH DSSRUWLRQHGDVDIXQFWLRQRIFRPSDUDEOHSURSHUW\FKDUDFWHULVWLFVZKLFKPD\LQFOXGHEXWLVQRWOLPLWHGWRODQG XVHDQGSURSHUW\VL]H
)RUWKHSXUSRVHVRIWKLV(QJLQHHU
V5HSRUWDQ(%8LVWKHTXDQWXPRIEHQHILWGHULYHGIURPWKHYDULRXV7UDFW LPSURYHPHQWVE\DVLQJOHIDPLO\UHVLGHQWLDOSDUFHO7KHVLQJOHIDPLO\UHVLGHQWLDOSDUFHOKDVEHHQVHOHFWHGDV WKHEDVLFXQLWIRUFDOFXODWLRQRIDVVHVVPHQWV7KXVWKHEHQFK PDUNSURSHUW\ WKHVLQJOHIDPLO\UHVLGHQWLDO
SDUFHO
GHULYHVRQH(%8RIEHQHILWDQGLVDVVLJQHG(TXLYDO HQW%HQHILW8QLW3XUVXDQWWRWKH $FW
WKHFRVWVRIWKH'LVWULFWPD\EHDSSRUWLRQHGE\DQ\IRUPXODRU PHWKRGWKDWIDLUO\GLVWULEXWHVWKHQHWDPRXQW WREHDVVHVVHGDPRQJDOODVVHVVDEOHSDUFHOVLQSURSRUWLRQWRWKHHVWLPDWHGEHQHILWVWREHUHFHLYHGE\HDFK SDUFHOIURPWKHLPSURYHPHQWV7KHEHQHILWIRUPXODXVHGIRUWKH'LVWULFWVKRXOGUHIOHFWWKHFRPSRVLWLRQRIWKH SDUFHOVDQGWKHLPSURYHPHQWVDQGVHUYLFHVSURYLGHGWRIDLUO\ DSSRUWLRQWKHFRVWVEDVHGRQVSHFLDOEHQHILW WRHDFKSDUFHO

7KH H[LVWLQJ 'LVWULFW¶V 0HWKRG RI $SSRUWLRQPHQW XWLOL]HV FRPPRQ O\ DFFHSWHG DVVHVVPHQWHQJLQHHULQJ SUDFWLFHVDQGZHUHHVWDEOLVKHGSXUVXDQWWRWKH
$FWDQGWKH SURYLVLRQVRIWKH&DOLIRUQLD&RQVWLWXWLRQ 7KH PHWKRG RXWOLQHG LV EDVHG RQ WKH SUHPLVH WKDW HDFK DVVHVVHG SDUFHO UHFHLYHV EHQHILW IURP WKH LPSURYHPHQWVPDLQWDLQHGDQGILQDQFHGE\WKH'LVWULFW¶VDVVHVVPH QWV7KHGHVLUDELOLW\RISURSHUWLHVZLWKLQ HDFK7UDFWLVHQKDQFHGE\WKHSUHVHQFHRIZHOOPDLQWDLQHGODQGVFDSLQJLQFORVHSUR[LPLW\WRWKRVHSURSHUWLHV 7KHFRVWVDVVRFLDWHGZLWKWKHLPSURYHPHQWVDUHHTXLWDEO\VSUHDG DPRQJWKHEHQHILWLQJSDUFHOVZLWKLQWKH 'LVWULFWDQGWKHIXQGVFROOHFWHGVKDOOEHGLVSHUVHGDQGXVHGRQO\IRUWKHLPSURYHPHQWVDQGVHUYLFHVSURYLGHG E\WKH'LVWULFW

7KHIROORZLQJWDEOHSURYLGHVWKHZHLJKWLQJIDFWRUVWRYDULRXVO DQGXVHW\SHVDQGSDUFHOVL]HVDVUHSRUWHGE\ WKHPRVWFXUUHQW\HDU¶V6DQ%HUQDUGLQR&RXQW\$VVHVVRU¶V6HFXUH G5ROOZKLFKGHWHUPLQHVHDFKSDUFHO¶V (%8DVVLJQPHQW

/$1'86( (48,9$/(17%(1(),781,7
)$&725
122)
3$5&(/6 08/7,3/,(5
6LQJOH)DPLO\5HVLGHQWLDO 3HU%HQHILW8QLW
5HGXFHG6LQJOH)DPLO\5HVLGHQWLDO 3HU%HQHILW8QLW 727$/
1RWH
1XPEHURISDUFHOVFXUUHQWO\OLVWHGLQWKH'LVWULFWDUHEHIRUHDQQH[DWLRQ ([HPSW3URSHUWLHV
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¶V5HSRUW
$QQH[DWLRQRI7UDFW0DS
)LVFDO<HDU

3DJH
EDVLQVDQGSDUFHOVWKDWDUHXVHGVROHO\IRUWKHSXUSRVHRIDFFHVVLQJHQWU\WRRWKHUSDUFHOVDQGWKRVHSDUFHOV WKDWKDYHEHHQYDFDWHGE\WKH&LW\WKDWKDYHOLWWOHWRQRYDOXHDQGGRQRWEHQHILWIURPWKHLPSURYHPHQWVDUH DOVRH[HPSWHGIURPDVVHVVPHQW
$QQXDO,QIODWLRQDU\$GMXVWPHQW
$VVHVVPHQW5DQJH)RUPXOD

,WLVUHFRJQL]HGWKDWWKHFRVWRISURYLGLQJIRUWKHLPSURYHPHQWVGHVFULEHGLQ3DUW,±3ODQVDQG6SHFLILFDWLRQV RI WKLV 5HSRUW ZLOO LQHYLWDEO\ LQFUHDVH RYHU WLPH DV D UHVXOW RI LQIODWLRQ DQG WKDW DQ\ ³QHZ RU LQFUHDVHG DVVHVVPHQWV´UHTXLUHFHUWDLQQRWLFLQJDQGEDOORWLQJUHTXLUHPHQW VSXUVXDQWWR$UWLFOH; ,,,'RIWKH&DOLIRUQLD &RQVWLWXWLRQ
3URSRVLWLRQ
+RZHYHU *RYHUQPHQW &RGH 6HFWLRQ

D
SURYLGHV WKDW D ³QHZ RU
LQFUHDVHGDVVHVVPHQW´GRHVQRWLQFOXGH³DQDVVHVVPHQWZKLFKGRH VQRWH[FHHGDQDVVHVVPHQWIRUPXODRU UDQJHRIDVVHVVPHQWVSUHYLRXVO\DGRSWHGE\WKHDJHQF\RUDSSU RYHGE\WKHYRWHUVLQWKHDUHDZKHUHWKH DVVHVVPHQW LV LPSRVHG´ 7KLV GHILQLWLRQ RIDQ LQFUHDVHGDVVHVVPHQW LV UHDIILUPHG LQ WKH3URSRVLWLRQ 2PQLEXV,PSOHPHQWDWLRQ$FW*RYHUQPHQW&RGH6HFWLRQ ,QRUGHUWRDVVXUHWKDWWKHLPSURYHPHQWIXQGLQJLVVXIILFLHQWLQWKHIXWXUHWRDGGUHVVWKHRQJRLQJPDLQWHQDQFH DQG UHSODFHPHQW FRVW LQFUHDVHV WKDW QDWXUDOO\ RFFXU RYHU WLPH GXH WR LQIODWLRQ WKH VSHFLDO EHQHILW DVVHVVPHQWVEHLQJSUHVHQWHGWRWKHSURSHUW\RZQHUVLQWKHEDOOR WSURFHHGLQJFRQGXFWHGLQFRQQHFWLRQZLWK WKLV 5HSRUW LQFOXGHV DQ DQQXDO LQIODWLRQDU\ DGMXVWPHQW DVVHVVP HQW UDQJH IRUPXOD
7KLV LQIODWLRQDU\
DGMXVWPHQW IRUPXOD SURYLGHV IRU WKH )LVFDO <HDU PD[LP XP DVVHVVPHQWV LQLWLDO PD[LPXP
DVVHVVPHQW UDWH
HVWDEOLVKHG KHUHLQ IRU WKH $QQH[DWLRQ 7HUULWRU\ WR LQFUHDVH E\ DQ DPRXQW HTXDO WR WKH DQQXDO SHUFHQWDJH LQFUHDVH RI WKH /RFDO &RQVXPHU 3ULFH ,QGH[ &3,
IRU ³$OO 8UEDQ &RQVXPHUV´ IRU WKH
5LYHUVLGH6DQ %HUQDUGLQR2QWDULR $UHDV
-DQXDU\RIWKHJLYHQ \HDU IURP WKH SUHYLRXV -DQXDU\ RU VLPLODU SHULRG

7KHDGRSWLRQRIWKHPD[LPXPDVVHVVPHQWUDWHVDQGWKH$VVHVVPHQW5DQJH)RUPXODGHVFULEHGKHUHLQGRHV QRW PHDQ WKDW WKH DQQXDO DVVHVVPHQWV ZLOO QHFHVVDULO\ LQFUHDVHHDFK ILVFDO \HDU QRU GRHV LW DEVROXWHO\ UHVWULFW WKH DVVHVVPHQWV WR WKH DQQXDOO\ DGMXVWHG PD[LPXP DVVHVVPHQW UDWHV $OWKRXJK WKH PD[LPXP DVVHVVPHQWUDWHVWKDWPD\EHOHYLHGVKDOOEHLQFUHDVHGHDFKILV FDO\HDUWKHDFWXDODPRXQWWREHDVVHVVHG ZLOOEHEDVHGRQWKH%DODQFHWR/HY\IRUWKDWILVFDO\HDU,IWKHFDOFXODWHGDVVHVVPHQWLVOHVVWKDQWKHDGMXVWHG PD[LPXPDVVHVVPHQWWKHQWKHFDOFXODWHGDVVHVVPHQWPD\EHDSSUR YHGE\WKH&LW\&RXQFLOIRUFROOHFWLRQ ,I WKH FDOFXODWHG DVVHVVPHQW
EDVHG RQ WKH SURSRVHG EXGJHW
LV JUHDWHU WKDQ WKH DGMXVWHG PD[LPXP
DVVHVVPHQWIRUWKDWILVFDO\HDUWKHQWKHDVVHVVPHQWZRXOGEHF RQVLGHUHGDQLQFUHDVHGDVVHVVPHQWDQG ZRXOGUHTXLUHSURSHUW\RZQHUDSSURYDOWKURXJKDQRWKHUSURWHVWE DOORWSURFHHGLQJEHIRUHLPSRVLQJVXFKDQ LQFUHDVH2WKHUZLVHLWZRXOGEHQHFHVVDU\WRUHGXFHWKHEXGJHWRUSURYLGHDFRQWULEXWLRQIURPWKH&LW\WR UHGXFHWKH%DODQFHWR/HY\
DPRXQWWREHDVVHVVHG
WRDQDPRXQWWKDWFDQEHVXSSRUWHGE\DQDVVHVVPHQW
UDWHOHVVWKDQRUHTXDOWRWKHDGMXVWHGPD[LPXPDVVHVVPHQWUDWHDXWKRUL]HGIRUWKDWILVFDO\HDU 7KH $VVHVVPHQW 5DQJH )RUPXOD VKDOO EH DSSOLHG WR WKH PD[LPXP DVVHVVPHQW UDWHV IRU WKH $QQH[DWLRQ 7HUULWRU\7UDFW0DSFRPPHQFLQJLQILVFDO\HDUD QGVKDOOEHDSSOLHGLQHDFKVXEVHTXHQW ILVFDO\HDUXQOHVVWKH&LW\&RXQFLOIRUPDOO\VXVSHQGVLWVDSSOLFDWLRQ
9LFWRUYLOOH/DQGVFDSH0DLQWHQDQFH$VVHVVPHQW'LVWULFW1R (QJLQHHU¶V5HSRUW
$QQH[DWLRQRI7UDFW0DS
)LVFDO<HDU

3DJH
3DUW,,,³(VWLPDWHRI&RVWV

7KH
$FW SURYLGHV WKDW WKH HVWLPDWHG FRVWV RI WKH LPSURYHPHQWV VKDOO LQFOXGH WKH WRWDO FRVW RI WKH LPSURYHPHQWVLQFOXGLQJLQFLGHQWDOH[SHQVHV
7KH
$FWDOVRSURYLGHVWKDWWKHDPRXQWRIDQ\VXUSOXVGHILFLWRUFRQWULEXWLRQEHLQFOXGHGLQWKHHVWLPDWHG FRVWRILPSURYHPHQWV7KHQHWDPRXQWWREHDVVHVVHGRQWKHORWVRUSDUFHOVZLWKLQWKH$QQH[DWLRQ7HUULWRU\ LV WKH WRWDO FRVW RI PDLQWHQDQFH DQG VHUYLFLQJ ZLWK DGMXVWPHQWV HLWKHU SRVLWLYH RU QHJDWLYH IRU UHVHUYHV VXUSOXVHVGHILFLWVDQGRUFRQWULEXWLRQV
352326('%8'*(7$1'$66(660(176
7KHEXGJHWDQGDVVHVVPHQWVRXWOLQHGRQWKHIROORZLQJSDJHIRUWKH$QQH[DWLRQ7HUULWRU\IRUGHVLJQDWHG7UDFW 0DS DUH EDVHG RQ WKH QDWLRQDO VWDQGDUGV DQG UHODWHG IXQGLQJ QHFHVVDU\ IRU WKH RSHUDWLRQ PDLQWHQDQFHDQGVHUYLFLQJRIWKH'LVWULFWLPSURYHPHQWVLGHQWLILHGLQ3DUW,RIWKLV5HSRUW 7KLVEXGJHWUHSUHVHQWVDQHVWLPDWHRIWKHVSHFLDOEHQHILWH[SHQVHVIRU)LVFDO<HDU LIEXLOWRXW
DW
WKH WLPH WKLV 5HSRUW ZDV SUHSDUHG DQG HVWDEOLVKHV WKH PD[LPXP DVVHVVPHQW UDWHV WR EH EDOORWHG DQG DSSURYHGE\WKHSURSHUW\RZQHU
V
RIUHFRUGZLWKLQWKH$QQH[DWLRQ7HUULWRU\DVSDUWRIWKH%DOORW3URFHHGLQJ
9LFWRUYLOOH/DQGVFDSH0DLQWHQDQFH$VVHVVPHQW'LVWULFW1R (QJLQHHU¶V5HSRUW
$QQH[DWLRQRI7UDFW0DS
)LVFDO<HDU

3DJH
$QQH[DWLRQ7HUULWRU\%XGJHW)LVFDO<HDU
'(6&5,37,21 7UDFW
87,/,7,(6(/(&75,&,7<

87,/,7,(6:$7(586$*(
7(/(3+21(
87 ,/,7 ,(668%7 2 7 $ /
&,7<$'0,1,675$7,21
&2168/7,1*6(59,&(6
&2817<)((6
$'0,1,675$7,2168%727$/
0$,17(1$1&(67$))6$/$5<$1'%(1(),76
&2175$&76(59,&(6
*5281'60$,17(1$1&(
,55,*$7,210$,17(1$1&(
,1)5$6758&785(5(3$,56
9(+,&/(6$1'(48,30(17

722/6$1'60$//(48,30(17
9$1'$/,60$&&,'(176

0$, 17(1$1&(6 8%727$/
(;3(1',785(%8'*(7
%$/$1&(72/(9<
(TXLYDOHQW%HQHILW8QLWVDW%XLOG2XW
)<$VVHVVPHQW5DWH
)<$VVHVVPHQW5DWH1RW%XLOW
)<0D[$OORZDEOH$VVHVVPHQWSHU%HQHILW8QLW )<0D[$OORZDEOH$VVHVVPHQWSHU%HQHILW8QLW1RW %XLOW2XW
),6&$/<($5%8'*(76

1RWH
7KHEXGJHWUHSUHVHQWVWKH7UDFW¶VIDLUVKDUHRIFRVWLIGHYHORSHGDQGOHYLHGLQ)LVFDO<HDU7KHEXGJHW KDVEHHQURXQGHGWRWKHQHDUHVWGROODU

9LFWRUYLOOH/DQGVFDSH0DLQWHQDQFH$VVHVVPHQW'LVWULFW1R (QJLQHHU¶V5HSRUW
$QQH[DWLRQRI7UDFW0DS
)LVFDO<HDU

3DJH
3DUW,9³%RXQGDU\'LDJUDP
7KH)LVFDO<HDU'LVWULFW'LDJUDPIRU7UDFW0DS

9LFWRUYLOOH/DQGVFDSH0DLQWHQDQFH$VVHVVPHQW'LVWULFW1R (QJLQHHU¶V5HSRUW
$QQH[DWLRQRI7UDFW0DS
)LVFDO<HDU

3DJH
3DUW9³$VVHVVPHQW5ROO
3DUFHOLGHQWLILFDWLRQIRUHDFKORWRUSDUFHOZLWKLQWKH$QQH[DW LRQ7HUULWRU\VKDOOEHWKHSDUFHOVDVVKRZQRQ WKH6DQ%HUQDUGLQR&RXQW\6HFXUHG5ROOIRUWKH\HDULQZKLFKWKLV5HSRUWLVSUHSDUHGDQGUHIOHFWLYHRIWKH $VVHVVRU¶V3DUFHO0DSV
7KHIROORZLQJDUHWKHORWVDQGSDUFHOVRIODQG

SDUFHOV
ZLWKLQWKH$QQH[DWLRQ7HUULWRU\DQGWKHFRUUHVSRQGLQJ PD[LPXPDVVHVVPHQWVEHLQJVHWIRU)LVFDO<HDU $31 7UDFW 3URSHUW\2ZQHU /DQG8VH (%8
0D[LPXP5DWHSHU
(TXLYDOHQW%HQHILW
8QLW
0D[LPXP$VVHVVPHQW

/2769,&7259,//(//& 5(6,'(17,$/

Attachment I
Petitions from Developers

Victorville City CouncilDecember 5, 2023

Victorville City Council
December 5, 2023