Risks of Real Estate Secured Investments Generally
The Bond Owners will be subject to the risks generally incident to an investment secured by real estate, including, without limitation: (i) adverse changes in local market conditions, such as changes in the market value of real property in the vicinity of the District, the supply of or demand for competitive properties in such area, and the market value of residential property or buildings and/or sites in the event of sale or foreclosure; (ii) changes in real estate tax rates and other operating expenses, governmental rules (including, without limitation, zoning laws and laws relating to endangered species and hazardous materials) and fiscal policies; (iii) natural disasters (including, without limitation, earthquakes, wildfires and floods), which may result in uninsured losses; (iv) adverse changes in local market conditions; and (v) increased delinquencies due to rising mortgage costs and other factors.
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No assurance can be given that the property owners within the District will pay Special Taxes in the future or that they will be able to pay such Special Taxes on a timely basis. See the caption “— Enforcement Delays — Bankruptcy” for a discussion of certain limitations on the District’s ability to pursue judicial proceedings with respect to delinquent parcels.
Insufficiency of Special Tax Revenues
As discussed below, the Special Taxes may not produce revenues sufficient to pay the debt service on the Bonds either due to nonpayment of the amounts levied or because acreage within the District becomes exempt from taxation due to the transfer of title to a public agency.
In order to pay debt service on the Bonds, it is generally necessary that the Special Taxes be paid in a timely manner. Should the Special Taxes not be paid on time, the District has established a Reserve Account under the Indenture to be maintained in an amount equal to the Reserve Requirement to pay debt service on the Bonds to the extent other funds are not available. See “SOURCES OF PAYMENT FOR THE BONDS — Reserve Account of the Special Tax Fund.” The District will covenant in the Indenture to maintain in the Reserve Account an amount equal to the Reserve Requirement, subject, however, to the availability of Net Taxes in amounts sufficient to do so and to the limitation that the District may not levy the Special Tax in any Fiscal Year at a rate in excess of the maximum amounts permitted under the Rate and Method. See Appendix A and Appendix E hereto. As a result, if a significant number of Special Tax delinquencies occurs within the District, the District could be unable to replenish the Reserve Account to the Reserve Requirement due to the limitations on the amount of the Special Tax that may be levied. If such defaults were to continue in successive years, the Reserve Account could be depleted and a default on the Bonds could occur.
The Act provides that, if any property within the District not otherwise exempt from the Special Tax is acquired by a public entity through a negotiated transaction, or by gift or devise, the Special Tax will continue to be levied on and enforceable against the public entity that acquired the property. In addition, the Act provides that, if property subject to the Special Tax is acquired by a public entity through eminent domain proceedings, the obligation to pay the Special Tax with respect to that property is to be treated as if it were a special assessment and be paid from the eminent domain award. The constitutionality and operation of these provisions of the Act have not been tested in the courts, but it is doubtful that they would be upheld as to, for example, property owned by the federal government. If for any reason property within the District becomes exempt from taxation by reason of ownership by a non-taxable entity such as the federal government or another public agency, subject to the limitation of the Maximum Special Tax, the Special Tax will be reallocated to the remaining taxable parcels within the District. This would result in the owners of such property paying a greater amount of the Special Tax and could have an adverse impact upon their willingness and/or ability to pay the Special Tax. Moreover, if a substantial portion of additional land within the District became exempt from the Special Tax because of public ownership, or otherwise, the Maximum Special Tax which could be levied upon the remaining acreage might not be sufficient to pay principal of and interest on the Bonds when due and a default will occur with respect to the payment of such principal and interest.
The District will covenant in the Indenture that, under certain circumstances, it will institute foreclosure proceedings to sell any property with delinquent Special Taxes in order to obtain funds to pay debt service on the Bonds. If foreclosure proceedings were ever instituted, any mortgage or deed of trust holder could, but would not be required to, advance the amount of the delinquent Special Tax to protect its security interest. See “SOURCES OF PAYMENT FOR THE BONDS — Special Taxes — Proceeds of Foreclosure Sales” for provisions which apply in the event of such foreclosure and which the District is required to follow in the event of delinquencies in the payment of the Special Tax.
In the event that sales or foreclosures of property are necessary, there could be a delay in payments to Owners of the Bonds (if the Reserve Account has been depleted) pending such sales or the prosecution of such foreclosure proceedings and receipt by the City on behalf of the District of the proceeds of sale. The District may adjust the future Special Tax levied on taxable parcels in the District, subject to limitations described above 839
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under the caption “THE DISTRICT — Rate and Method of Apportionment,” to provide an amount required to pay interest on and principal of the Bonds, and the amount, if any, necessary to replenish the Reserve Account to an amount equal to the Reserve Requirement, and to pay all current expenses. There is, however, no assurance that the total amount of the Special Tax that could be levied and collected against taxable parcels in the District will be at all times sufficient to pay the amounts required to be paid by the Indenture, even if the Special Tax is levied at the Maximum Special Tax rates. See “— Enforcement Delays — Bankruptcy.” No assurance can be given that the real property subject to sale or foreclosure will be sold, or if sold, that the proceeds of sale will be sufficient to pay any delinquent installments of the Special Tax. The Act does not require the City to purchase or otherwise acquire any lot or parcel of property to be sold at foreclosure if there is no other purchaser at such sale. The Act and the Indenture do specify that the Special Tax will have the same lien priority as for ad valorem property taxes in the case of delinquency. Section 53356.6 of the Act requires that property sold pursuant to foreclosure under the Act be sold for not less than the amount of judgment in the foreclosure action, plus post judgment interest and authorized costs, unless the consent of the owners of 75% of the Outstanding Bonds is obtained.
Prior to July 1, 1983, the right of redemption from foreclosure sales was limited to a period of one year from the date of sale. Under legislation effective July 1, 1983, the statutory right of redemption from such foreclosure sales has been repealed. However, a period of 20 days must elapse after the date on which the notice of levy of the interest in real property was served on the judgment debtor before the sale of such lot or parcel can be made. Furthermore, if the purchaser at the sale is the judgment creditor (e.g., the District), an action may be commenced by the delinquent property owner within 90 days after the date of sale to set aside such sale. The constitutionality of the aforementioned legislation, which repeals the one year redemption period, has not been tested and there can be no assurance that, if tested, such legislation will be upheld. (Section 701.680 of the Code of Civil Procedure of the State.)
Impact of Economic Conditions on the Development in the District Certain events and factors which negatively affect the regional, State and national economies could have an adverse effect on the pace at which the current or any future developers in the District can complete the remaining infrastructure and future homes, and demand by, and the ability of individuals to purchase homes within the District. Such events and factors could include rising inflation and interest rates, persistent supply chain issues and global market instability caused by geopolitical events. Any adverse impact of the foregoing and other economic factors on the project in the District and the real estate market in general cannot be predicted.
Increasing Mortgage Interest Rates
Since approximately November 2021, interest rates for mortgage loans have increased significantly.
Increases in mortgage interest rates could have a negative impact on the estimated absorption rates of the planned for-sale residential units in the District described herein. With respect to entry-level households, increased mortgage interest rates may adversely impact the affordability of homes and may increase mortgage payment levels for owning a lower-priced home relative to renting a residence, thereby making purchasing less attractive.
With respect to move-up households, higher mortgage interest rates may impact the desire of current homeowners to move from their present home due to the fact that their present home likely has a relatively low mortgage interest rate. In addition, in such instances, a new home would likely have a higher interest rate on a new mortgage loan as well as a higher purchase price and property taxes. Such considerations may decrease the desire for move-up households to purchase a new home. The foregoing factors could reduce demand for and/or the ability to achieve the sales prices of the planned for-sale homes within the District as described herein. 840
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Concentration of Ownership
Based on ownership status as of April 2, 2024 (and assuming additional transfers of property), individual homeowners and KB Home are expected to be responsible for approximately 58.35% and 41.65%, respectively, of the projected Fiscal Year 2024-25 Special Tax levy.
The timely payment of principal of and interest on the Bonds depends upon the willingness and ability of the current and future property owners in the District to pay the Special Taxes prior to delinquency. General and local economic conditions and governmental requirements or restrictions may affect the willingness of the current property owners, or any successor property owners, to pay the Special Taxes, and there is no assurance that the current property owners, or any successor property owners, will pay such Special Taxes even if financially able to do so. Due to the concentration of ownership of the property within the District, a failure by KB Home or any successor property owner thereto to pay the Special Taxes may result in a default in the payment of debt service on the Bonds. See “PROPERTY OWNERSHIP AND THE DEVELOPMENT.” Property Values
The value of the property within the District is a critical factor in determining the investment quality of the Bonds. If a property owner is delinquent in the payment of Special Taxes, the District’s only remedy is to commence foreclosure proceedings against the delinquent parcel in an attempt to obtain funds to pay the Special Taxes. Reductions in property values due to a downturn in the economy, physical events such as earthquakes, fires or floods, stricter land use regulations, delays in development or other events will adversely impact the security underlying the Special Taxes. See “THE DISTRICT — Appraisal Report and Appendix D — “APPRAISAL REPORT.”
The Appraiser has estimated, on the basis of certain assumptions and limiting conditions contained in the Appraisal Report, that as of the Date of Value, the market value of the land and improvements within the District was approximately $38,330,000. See “THE DISTRICT — Appraisal Report.” The Appraisal Report indicates the Appraiser’s opinion as to the market value of the properties referred to therein as of the date and under the conditions specified therein. The Appraiser’s opinion reflects conditions prevailing in the applicable market as of the Date of Value. The Appraiser’s opinion does not predict the future value of the subject property, and there can be no assurance that market conditions will not change adversely in the future.
Prospective purchasers of the Bonds should not assume that the taxable land within the District could be sold for the appraised amount or for the assessed values at a foreclosure sale for delinquent Special Taxes. In arriving at the estimate of market value of the property in the District, the Appraiser assumes that any sale will be unaffected by undue stimulus and will occur following a reasonable marketing period, which is not always present in a foreclosure sale. See Appendix D for a description of other assumptions made by the Appraiser and for the definitions and limiting conditions used by the Appraiser. Any event which causes one of the Appraiser’s assumptions to be untrue could result in a reduction of the value of the taxable land and improvements within the District from the market value estimated by the Appraiser.
No assurance can be given that any bid will be received for a parcel with delinquent Special Taxes offered for sale at foreclosure or, if a bid is received, that such bid will be sufficient to pay all delinquent Special Taxes. See “SOURCES OF PAYMENT FOR THE BONDS — Special Taxes — Proceeds of Foreclosure Sales.”
Natural Disasters
The District, like all California communities, may be subject to unpredictable seismic activity, fires, flood, or other natural disasters. Southern California is a seismically active area. Seismic activity represents a potential risk for damage to buildings, roads, bridges and property within the District. In addition, land susceptible to seismic activity may be subject to liquefaction during the occurrence of such event. The property 841
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within the District is not located in an Alquist-Priolo Earthquake Study Zone, with the nearest active fault being the Elsinore/Temecula fault located approximately 2.2 miles to the southwest. Additionally, the District is not located in a flood plain area.
In recent years, wildfires have caused extensive damage throughout the State, including within the County. Certain of these fires have burned thousands of acres and destroyed hundreds and in some cases thousands of homes. In some instances entire neighborhoods have been destroyed. Several fires in recent years damaged or destroyed property in areas that were not previously considered to be at risk from such events. Based on maps adopted by the Department of Forestry and Fire Protection of the State of California, the District is located in an area designated as a very high fire hazard severity zone. There is a risk of residential property within the District being destroyed by wildfires and no assurance can be given as to the severity or frequency of wildfires within the vicinity of the District. Additionally, property located adjacent to burn areas can be subject to mudslides and flooding, which can cause significant damage and destruction to property.
In the event of a severe earthquake, fire, flood or other natural disaster, there may be significant damage to both property and infrastructure in the District. As a result, a substantial portion of the property owners may be unable or unwilling to pay the Special Taxes when due. In addition, the value of land in the District could be diminished in the aftermath of such a natural disaster, reducing the resulting proceeds of foreclosure sales in the event of delinquencies in the payment of the Special Taxes.
Hazardous Substances
While government taxes, assessments and charges are a common claim against the value of a parcel, other less common claims may also be relevant. One of the most serious in terms of the potential reduction in the value of a parcel is a claim with regard to a hazardous substance. In general, the owners and operators of a parcel may be required by law to remedy conditions relating to releases or threatened releases of hazardous substances. The federal Comprehensive Environmental Response, Compensation and Liability Act of 1980, sometimes referred to as “CERCLA” or the “Super Fund Act,” is the most well-known and widely applicable of these laws, but California laws with regard to hazardous substances are also stringent and similar in effect. Under many of these laws, the owner (or operator) is obligated to remedy a hazardous substance condition of a parcel whether or not the owner (or operator) had anything to do with creating or handling the hazardous substance.
The effect, therefore, should any of the parcels within the District be affected by a hazardous substance, is to reduce the marketability and value by the costs of remedying the condition.
The District is not aware of the presence of any federally or state classified hazardous substances in violation of any environmental laws, located on the property within the District. However, it is possible that such materials do currently exist and that the District is not aware of them.
It is possible that property in the District may be liable for hazardous substances in the future as a result of the existence, currently, of a substance presently classified as hazardous but which has not been released or the release of which is not presently threatened, or the existence, currently, on the property of a substance not presently classified as hazardous but which may in the future be so classified. Additionally, such liabilities may arise not simply from the existence of a hazardous substance but from the method of handling such substance.
All of these possibilities could have the effect of reducing the value of the applicable property.
Enforcement Delays – Bankruptcy
In the event of a delinquency in the payment of the Special Taxes, the District is required to commence enforcement proceedings under the circumstances described under the caption “SOURCES OF PAYMENT FOR THE BONDS — Special Taxes — Proceeds of Foreclosure Sales.” However, prosecution of such proceedings could be delayed due to crowded local court calendars or by bankruptcy, insolvency and other laws generally affecting creditors’ rights (such as the Soldiers’ and Sailors’ Relief Act of 1940) and by the laws of the State relating to judicial and non-judicial foreclosure. Although bankruptcy proceedings would not cause the liens of 842
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the Special Taxes to become extinguished, bankruptcy of a person or entity with an interest in the applicable property could result in a delay in the enforcement proceedings because federal bankruptcy laws provide for an automatic stay of foreclosure and tax sale proceedings. Any such delay could increase the likelihood of delay or default in payment of the principal of and interest on the Bonds. The various legal opinions to be delivered in connection with the issuance of the Bonds, including Bond Counsel’s approving legal opinion, are qualified as to the enforceability of the Bonds and the Indenture by reference to bankruptcy, reorganization, moratorium, insolvency and other laws affecting the rights of creditors generally or against public entities such as the District.
Special Tax Delinquencies
Under provisions of the Act, the Special Taxes, from which funds necessary for the payment of principal of, and interest on, the Bonds are derived, will be billed to the properties within the District on the regular ad valorem property tax bills sent to owners of such properties by the County Tax Collector. The Act currently provides that such Special Tax installments are due and payable, and bear the same penalties and interest for non-payment, as do ad valorem property tax installments.
See APPENDIX E — “SUMMARY OF THE INDENTURE — COVENANTS AND WARRANTY — Covenants” for a discussion of the provisions which apply, and procedures which the District is obligated to follow under the Indenture, in the event of delinquencies in the payment of Special Taxes. See “— FDIC/Federal Government Interests in Parcels” for a discussion of the policy of the Federal Deposit Insurance Corporation regarding the payment of special taxes and assessment and limitations on the District’s ability to foreclosure on the lien of the Special Taxes in certain circumstances.
FDIC/Federal Government Interests in Parcels
The ability of the District to collect interest and penalties specified by the Act and to foreclose the lien of delinquent Special Taxes may be limited in certain respects with regard to parcels in which the Federal Deposit Insurance Corporation (the “FDIC”), or other federal government entities such as Fannie Mae or Freddie Mac, has or obtains an interest.
In the case of the FDIC, in the event that any financial institution making a loan which is secured by parcels is taken over by the FDIC and the applicable Special Tax is not paid, the remedies available to the District may be constrained. The FDIC’s policy statement regarding the payment of state and local real property taxes (the “Policy Statement”) provides that taxes other than ad valorem taxes which are secured by a valid lien in effect before the FDIC acquired an interest in a property will be paid unless the FDIC determines that abandonment of its interests is appropriate. The Policy Statement provides that the FDIC generally will not pay installments of non-ad valorem taxes which are levied after the time the FDIC acquires its fee interest, nor will the FDIC recognize the validity of any lien to secure payment except in certain cases where the Resolution Trust Corporation had an interest in property on or prior to December 31, 1995. Moreover, the Policy Statement provides that, with respect to parcels on which the FDIC holds a mortgage lien, the FDIC will not permit its lien to be foreclosed out by a taxing authority without its specific consent, nor will the FDIC pay or recognize liens for any penalties, fines or similar claims imposed for the nonpayment of taxes.
The FDIC has taken a position similar to that expressed in the Policy Statement in legal proceedings brought against Orange County in United States Bankruptcy Court and in Federal District Court. The Bankruptcy Court issued a ruling in favor of the FDIC on certain of such claims. Orange County appealed that ruling, and the FDIC cross-appealed. On August 28, 2001, the Ninth Circuit Court of Appeals issued a ruling favorable to the FDIC except with respect to the payment of pre-receivership liens based upon delinquent property tax.
The District is unable to predict what effect the application of the Policy Statement would have in the event of a delinquency with respect to parcels in which the FDIC has or obtains an interest, although prohibiting 843
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the lien of the FDIC to be foreclosed out at a judicial foreclosure sale would prevent or delay the foreclosure sale.
In the case of Fannie Mae and Freddie Mac, in the event a parcel of taxable property is owned by a federal government entity or federal government sponsored entity, such as Fannie Mae or Freddie Mac, or a private deed of trust secured by a parcel of taxable property is owned by a federal government entity or federal government sponsored entity, such as Fannie Mae or Freddie Mac, the ability to foreclose on the parcel or to collect delinquent Special Taxes may be limited. Federal courts have held that, based on the supremacy clause of the United States Constitution “this Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, anything in the Constitution or Laws of any State to the contrary notwithstanding.” In the absence of Congressional intent to the contrary, a state or local agency cannot foreclose to collect delinquent taxes or assessments if foreclosure would impair the federal government interest. This means that, unless Congress has otherwise provided, if a federal government entity owns a parcel of taxable property but does not pay taxes and assessments levied on the parcel (including Special Taxes), the applicable state and local governments cannot foreclose on the parcel to collect the delinquent taxes and assessments.
Moreover, unless Congress has otherwise provided, if the federal government has a mortgage interest in the parcel and the District wishes to foreclose on the parcel as a result of delinquent Special Taxes, the property cannot be sold at a foreclosure sale unless it can be sold for an amount sufficient to pay delinquent taxes and assessments on a parity with the Special Taxes and preserve the federal government’s mortgage interest. For a discussion of risks associated with taxable parcels within the District becoming owned by the federal government, federal government entities or federal government sponsored entities, see “—Insufficiency of Special Tax Revenues.”
The District’s remedies may also be limited in the case of delinquent Special Taxes with respect to parcels in which other federal agencies (such as the Internal Revenue Service and the Drug Enforcement Administration) have or obtain an interest.
Direct and Overlapping Indebtedness
The ability of an owner of property within the District to pay the applicable Special Taxes could be affected by the existence of other taxes and assessments imposed upon taxable parcels. See “THE DISTRICT — Direct and Overlapping Debt” herein. The City and other public agencies whose boundaries overlap those of the District could impose additional taxes or assessment liens on the property within the District in order to finance public improvements or services to be located or provided inside of or outside of such area. The lien created on the property within the District through the levy of such additional taxes may be on a parity with the lien of the Special Taxes applicable to the property within the District.
The imposition of additional liens on a parity with the Special Taxes may reduce the ability or willingness of property owners to pay the Special Taxes and increase the possibility that foreclosure proceeds will not be adequate to pay delinquent Special Taxes. The District will covenant in the Indenture not to issue Parity Bonds other than for refunding all of a portion of the Bonds or Parity Bonds.
Payment of Special Taxes is not a Personal Obligation of the Property Owners An owner of a taxable parcel is not personally obligated to pay Special Taxes. Rather, Special Taxes are an obligation which is secured only by a lien against the taxable parcel. If the value of a taxable parcel is not sufficient, taking into account other liens imposed by public agencies, to secure fully Special Taxes, the District has no recourse against the property owner.
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No Acceleration Provision
Neither the Bonds nor the Indenture contain a provision allowing for the acceleration of the Bonds in the event of a payment default or other default under the terms of the Bonds or the Indenture.
Limited Obligations
The Bonds and interest thereon are not payable from the general funds of the City. Except with respect to the Net Taxes, neither the credit nor the taxing power of the District or the City is pledged for the payment of the Bonds or the interest thereon, and, except as provided in the Indenture, no Owner of the Bonds may compel the exercise of any taxing power by the District or the City or force the forfeiture of any City or District property.
The principal of, premium, if any, and interest on the Bonds are not a debt of the City or a legal or equitable pledge, charge, lien or encumbrance upon any of the City’s or the District’s property or upon any of the City’s or the District’s income, receipts or revenues, except the Net Taxes and other amounts pledged under the Indenture.
The District’s legal obligations with respect to any delinquent Special Taxes are limited to: (i) payments from the Reserve Account to the extent of funds on deposit therein; and (ii) the institution of judicial foreclosure proceedings under certain circumstances with respect to any parcels for which Special Taxes are delinquent. See the caption “SOURCES OF PAYMENT FOR THE BONDS — Special Taxes — Proceeds of Foreclosure Sales.” The Bonds cannot be accelerated in the event of any default.
The obligation to pay Special Taxes does not constitute a personal obligation of the current or subsequent owners of the respective parcels which are subject to such liens. See the caption “— Payment of the Special Tax is Not a Personal Obligation of the Property Owners.” Enforcement of Special Tax payment obligations by the District is limited to judicial foreclosure in the Superior Court of California, County of Riverside. There is no assurance that any current or subsequent owner of a parcel subject to a Special Tax lien will be able to pay the amounts due or that such owner will choose to pay such amounts even though financially able to do so.
Failure by owners of the parcels to pay Special Tax installments when due, delay in foreclosure proceedings, or the inability of the District to sell parcels that have been subject to foreclosure proceedings for amounts sufficient to cover the delinquent installments of Special Taxes levied against such parcels may result in the inability of the District to make full or timely payments of debt service on the Bonds, which may in turn result in the depletion of the Reserve Account. See the caption “— Enforcement Delays — Bankruptcy.” Proposition 218
An initiative measure entitled “The Right to Vote on Taxes Act” (“Proposition 218”) was approved by the voters at the November 5, 1996 statewide general election. Among other things, Proposition 218 added a new Article XIII C to the California Constitution which states that “. . . the initiative power shall not be prohibited or otherwise limited in matters of reducing or repealing any local tax, assessment, fee or charge.” The Act provides for a procedure which includes notice, hearing, protest and voting requirements to alter the rate and method of apportionment of an existing special tax. However, the Act prohibits a legislative body from adopting any resolution to reduce the rate of any special tax or terminate the levy of any special tax pledged to repay any debt incurred pursuant to the Act unless such legislative body determines that the reduction or termination of the special tax would not interfere with the timely retirement of that debt. While the application of Proposition 218 in this context has not yet been interpreted by the courts and the matter is not completely free from doubt, it is not likely that Proposition 218 has conferred on the voters the power to effect a repeal or reduction of the Special Tax if the result thereof would be to impair the security of the Bonds.
It may be possible, however, for voters or the City Council, acting as the legislative body of the District, to reduce the Special Taxes in a manner which does not interfere with the timely repayment of the Bonds, but 845
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which does reduce the maximum amount of Special Taxes that may be levied in any year below the existing levels. Therefore, no assurance can be given with respect to the future levy of Special Taxes in amounts greater than the amount necessary for the timely retirement of the Bonds. Nevertheless, to the maximum extent that the law permits it to do so, the District will covenant that it will not initiate proceedings under the Act to reduce the maximum Special Tax rates for the District, unless, in connection therewith, (i) such changes do not reduce the maximum Special Taxes that may be levied in each year on property within the District to an amount which is less than the Administrative Expenses Cap plus 110% of the Annual Debt Service due in each corresponding future Bond Year with respect to the Bonds and Parity Bonds Outstanding as of the date of such proposed reduction; and (ii) the District is not delinquent in the payment of the principal of or interest on the Bonds or any Parity Bonds. The District also will covenant that, in the event an initiative is adopted which purports to reduce or otherwise alter the Rate and Method, it will commence and pursue legal action in order to preserve its ability to comply with the foregoing covenant. However, no assurance can be given as to the enforceability of the foregoing covenants.
Ballot Initiatives; Initiative 1935
General. Under the California Constitution, the power of initiative is reserved to the voters for the purpose of enacting statutes and constitutional amendments. Articles XIII A, XIII B, XIII C, and XIII D of the California Constitution were adopted pursuant to measures qualified for the ballot pursuant to the State’s constitutional initiative process, including through Proposition 13 in 1978, Proposition 218 in 1996 and Proposition 26 in 2010. From time to time, other initiative measures could be adopted by California voters. The adoption of any such initiative might place limitations on the ability of the State, the City, or other local agencies to increase revenues or to increase appropriations.
Initiative 1935. A voter initiative, titled “The Taxpayer Protection and Government Accountability Act” (“Initiative 1935”) has been determined to be eligible for the November 2024 Statewide general election and, unless withdrawn by its proponent prior to June 27, 2024, will be certified as qualified for the ballot in such election. Similar to Proposition 218 and Proposition 26, Initiative 1935 would, among other things, amend the State Constitution to impose additional requirements for the imposition of taxes by State and local governments.
Such additional requirements include, among other things, requirements that the title and summary and ballot label or question for each tax measure identify the type, amount or rate, duration, and use of revenue of the tax (the “Initiative 1935 Ballot Label Requirements”). Additionally, Initiative 1935 would provide that any tax imposed after January 1, 2022, not in compliance with its requirements is void 12 months after the effective date of Initiative 1935 unless subsequently reenacted in accordance therewith. If adopted, the scope and impact of Initiative 1935 would be subject to future judicial interpretation. The District is unable to predict how Initiative 1935, if adopted, might be interpreted by the courts.
At the request of the Governor of California and the State Legislature, the California Supreme Court has agreed to consider whether Initiative 1935 should be barred from appearing on the ballot as an unlawful revision of the State Constitution, given its potential wide-ranging impact on the ability of the State and local governments to fund their operations. The Governor and the State Legislature have requested a decision by the California Supreme Court by late June 2024, prior to the ballot certification date. Neither the City nor the District can predict the outcome of the pending litigation.
As described in this Official Statement, the election within the District took place after January 1, 2022.
Also as described in this Official Statement, at the election held on December 14, 2022, the qualified elector within the District, consisting solely of KB Home, voted to approve the measure to levy the Special Tax. In connection with such election, KB Home, as the only qualified elector, waived, among other things, compliance with any time limits or other procedural requirements pertaining to the conduct of the December 14, 2022 election and their right to make any protest or complaint or undertake any legal action challenging the validity of the election, and represented that compliance with the procedural requirements for conducting the election, including the receipt of any ballot arguments and impartial analysis, were unnecessary in light of the fact that KB Home had received sufficient information regarding the imposition of the Special Tax, the issuance of the 846
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Bonds and the formation of the District to allow KB Home to properly complete their ballot. In their Affirmation of Waiver, dated June __, 2024, KB Home acknowledged, confirmed and agreed that such waiver was a knowing, intelligent and voluntary waiver and that such waiver encompasses, and constituted, a waiver of the Initiative 1935 Ballot Label Requirements and KB Home affirmed therein that it had waived the Initiative 1935 Ballot Label Requirements. Furthermore, in any event, the District believes the materials provided to KB Home for the December 14, 2022 election within the District substantially complied with the Initiative 1935 Ballot Label Requirements.
Litigation with Respect to Community Facilities Districts Shapiro. The California Court of Appeal, Fourth Appellate District, Division One, issued its opinion in City of San Diego v. Melvin Shapiro (2014) 228 Cal.App.4th 756 (the “San Diego Decision”). The case involved a Convention Center Facilities District (the “CCFD”) established by the City of San Diego (“San Diego”). The CCFD is a financing district much like a community facilities district established under the provisions of the Act. The CCFD is comprised of all of the real property in San Diego. However, the special tax to be levied within the CCFD was to be levied only on hotel properties located within the CCFD.
The election authorizing the special tax was limited to owners of hotel properties and lessees of real property owned by a governmental entity on which a hotel is located. Thus, the election was not a registered voter election. Such approach to determining who would constitute the qualified electors of the CCFD was modeled after Section 53326(c) of the Act, which generally provides that, if a special tax will not be apportioned in any tax year on residential property, the legislative body may provide that the vote shall be by the landowners of the proposed district whose property would be subject to the special tax. The Court held that the CCFD special tax election was invalid under the California Constitution because Article XIIIA, Section 4 thereof and Article XIIIC, Section 2 thereof require that the electors in such an election be the registered voters within the district.
Horizon. The Sacramento County Superior Court issued a ruling in Horizon Capital Investments, LLC v. City of Sacramento et al. (Case No. 34-2017-80002661), which was a case involving an election to approve the levy of a special tax within a community facilities district (“CFD”) formed under the Act.
In 2017, the City of Sacramento initiated proceedings to form a CFD to finance certain costs to operate and maintain a streetcar line. As permitted by the Act, the proposed district included non-contiguous parcels of non-residential property. Because there were fewer than 12 registered voters residing within the territory of the proposed CFD, the City Council submitted the special tax proposed to be levied within the proposed CFD to the owners of land within the proposed CFD, as required by the Act. The proposed special tax received the requisite two-thirds vote in the landowner election.
Petitioners Horizon Capital Investments, LLC et al. filed a writ of mandate and complaint for reverse validation and declaratory relief. Petitioners argued, and the superior court agreed in its final ruling, that under section 4(a) of article XIII A of the California Constitution (which provides that “Cities, Counties and special districts, by a two-thirds vote of the qualified electors of such district [sic], may impose special taxes on such district…”) the phrase “qualified electors” means the registered voters of the entire City of Sacramento and not just the owners of the property within the boundaries of the proposed CFD. Citing the San Diego Decision, the tentative ruling states that the phrase “qualified electors of the district” refers to the registered voters of the entity imposing the special tax, which in this case was the City of Sacramento. Because the vote within the proposed CFD was by landowners only and not by all registered voters in the City of Sacramento, the final ruling states that the special tax is invalid.
The superior court’s final ruling is not binding upon other courts within the State and does not directly apply to the District, the Special Taxes, or the Bonds. The City of Sacramento did not appeal the superior court’s ruling.
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The Special Tax Election in the District. With respect to the San Diego Decision, the facts of such case show that there were thousands of registered voters within the CCFD (viz., all of the registered voters in San Diego). The elections held in the District had less than 12 registered voters at the time of the election to authorize the Special Taxes. In the San Diego Decision, the court expressly stated that it was not addressing the validity of landowner voting to impose special taxes pursuant to the Act in situations where there are fewer than 12 registered voters. Thus, by its terms, the court’s holding in the San Diego Decision does not apply to the Special Tax election in the District. Moreover, Section 53341 of the Act provides that any “action or proceeding to attack, review, set aside, void or annul the levy of a special tax…shall be commenced within 30 days after the special tax is approved by the voters.” Similarly, Section 53359 of the Act provides that any action to determine the validity of bonds issued pursuant to the Act be brought within 30 days of the voters approving the issuance of such bonds. The petitioners in Horizon filed the writ of mandate within 30 days of the landowner election.
Voters in the District approved the Special Tax to be levied in accordance with the Rate and Method on December 14, 2022.
Loss of Tax Exemption
As discussed under the heading “TAX MATTERS,” interest on the Bonds could cease to be excluded from gross income for purposes of federal income taxation, retroactive to the date the Bonds were issued, as a result of future acts or omissions of the District or the City. In addition, it is possible that future changes in applicable federal tax laws could cause interest on the Bonds to be included in gross income for federal income taxation or could otherwise reduce the equivalent taxable yield of such interest and thereby reduce the value of the Bonds.
No Ratings – Limited Secondary Market
The District has not applied to have the Bonds rated by any nationally recognized bond rating company, and it does not expect to do so in the future.
There can be no guarantee that there will be a secondary market for the Bonds or, if a secondary market exists, that such Bonds can be sold for any particular price. Although the District has committed to provide certain financial and operating information, there can be no assurance that such information will be available to Bond owners on a timely basis. The failure to provide the required annual financial information does not give rise to monetary damages but merely an action for specific performance. Occasionally, because of general market conditions, lack of current information, the absence of a credit rating for the Bonds or because of adverse history or economic prospects connected with a particular issue, secondary marketing practices in connection with a particular issue are suspended or terminated. Additionally, prices of issues for which a market is being made will depend upon then prevailing circumstances. Such prices could be substantially different from the original purchase price.
Limitations on Remedies
Remedies available to the Owners of the Bonds may be limited by a variety of factors and may be inadequate to assure the timely payment of principal of and interest on the Bonds or to preserve the tax-exempt status of interest on the Bonds.
Bond Counsel has limited its opinion as to the enforceability of the Bonds and of the Indenture to the extent that enforceability may be limited by bankruptcy, insolvency reorganization, fraudulent conveyance or transfer, moratorium or other similar laws affecting generally the enforcement of creditor’s rights, by equitable principles and by the exercise of judicial discretion and by limitations on remedies against public agencies in the State of California. The lack of availability of certain remedies or the limitation of remedies may entail risks of delay, limitation or modification of the rights of the Owners. 848
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Potential Early Redemption of Bonds from Prepayments or Community Facilities District Bond Proceeds
Property owners within the District are permitted to prepay their Special Taxes at any time. Such prepayments could also be made from the proceeds of bonds issued by or on behalf of an overlapping community facilities district. Such prepayments will result in a redemption of the Bonds on the Interest Payment Date for which timely notice may be given under the Indenture following the receipt of the prepayment. The resulting redemption of Bonds that were purchased at a price greater than par could reduce the otherwise expected yield on such Bonds. See the caption “THE BONDS — Redemption — Special Mandatory Redemption from Special Tax Prepayments.”
Cybersecurity
The City, like many other public and private entities, rely on computer and other digital networks and systems to conduct their operations. The City is potentially subject to multiple cyber threats, including without limitation hacking, viruses, ransomware, malware and other attacks. No assurance can be given that the efforts of the City to manage cyber threats and attacks will be successful in all cases, or that any such attack will not materially impact the operations or finances of the City, or the administration of the Bonds. The City is also reliant on other entities and service providers in connection with the administration of the Bonds, including without limitation the County tax collector for the levy and collection of Special Taxes and the Trustee. No assurance can be given that the City and these other entities will not be affected by cyber threats and attacks in a manner that may affect the Bond owners.
CONTINUING DISCLOSURE
Pursuant to a Continuing Disclosure Certificate, dated as of July 1, 2024 (the “Disclosure Certificate”), to be executed and delivered by the District at the time of issuance of the Bonds, the District will covenant for the benefit of the holders and Beneficial Owners of the Bonds to provide certain financial information and operating data relating to the District by March 31 following the end of the District’s Fiscal Year (currently its Fiscal Year ends on June 30) (the “Annual Report”), commencing with the report for the Fiscal Year ending June 30, 2024, and to provide notices of the occurrence of certain enumerated events. The Annual Report and the notices of enumerated events will be filed by the District with EMMA. The specific nature of the information to be contained in the Annual Report and the notice of enumerated events is set forth in Appendix F — “FORM OF DISTRICT CONTINUING DISCLOSURE CERTIFICATE.” These covenants have been made in order to assist the Underwriter in complying with subsection (b)(5) of Rule 15c2-12.
Neither the City nor the District has had any continuing disclosure undertakings outstanding during the previous five-year period.
The City has retained Spicer Consulting Group, LLC to serve as Dissemination Agent for the continuing disclosure undertaking related to the Bonds, and has adopted policies and procedures with respect to its continuing disclosure practices.
TAX EXEMPTION
In the opinion of Stradling Yocca Carlson & Rauth LLP, Newport Beach, California, Bond Counsel, under existing statutes, regulations, rulings and judicial decisions, and assuming the accuracy of certain representations and compliance with certain covenants and requirements described herein, interest (and original issue discount) on the Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on individuals.
However, it should be noted that, with respect to applicable corporations as defined in Section 59(k) of the Internal Revenue Code of 1986, as amended (the “Code”), generally certain corporations with more than $1,000,000,000 of average annual adjusted financial statement income, interest (and original issue discount) 849
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with respect to the Bonds might be taken into account in determining adjusted financial statement income for purposes of computing the alternative minimum tax imposed by Section 55 of the Code on such corporations.
In the further opinion of Bond Counsel, interest (and original issue discount) on the Bonds is exempt from State of California personal income tax.
The excess of the stated redemption price at maturity of a Bond over the issue price of a Bond (the first price at which a substantial amount of the Bonds of a maturity is to be sold to the public) constitutes original issue discount. Original issue discount accrues under a constant yield method, and original issue discount will accrue to a Beneficial Owner before receipt of cash attributable to such excludable income. The amount of original issue discount deemed received by the Beneficial Owner will increase the Beneficial Owner’s basis in the applicable Bond.
Bond Counsel’s opinion as to the exclusion from gross income of interest (and original issue discount) on the Bonds is based upon certain representations of fact and certifications made by the District, the City and others and is subject to the condition that the District, the City and others making such representations comply with all requirements of the Code that must be satisfied subsequent to the issuance of the Bonds to assure that interest (and original issue discount) on the Bonds will not become includable in gross income for federal income tax purposes. Failure to comply with such requirements of the Code might cause the interest (and original issue discount) on the Bonds to be included in gross income for federal income tax purposes retroactive to the date of issuance of the Bonds. The District and the City will covenant to comply with all such requirements.
The amount by which a Beneficial Owner’s original basis for determining loss on sale or exchange in the applicable Bond (generally, the purchase price) exceeds the amount payable on maturity (or on an earlier call date) constitutes amortizable Bond premium, which must be amortized under Section 171 of the Code; such amortizable Bond premium reduces the Beneficial Owner’s basis in the applicable Bond (and the amount of tax-exempt interest received), and is not deductible for federal income tax purposes. The basis reduction as a result of the amortization of Bond premium may result in a Beneficial Owner realizing a taxable gain when a Bond is sold by the Beneficial Owner for an amount equal to or less (under certain circumstances) than the original cost of the Bond to the Beneficial Owner. Purchasers of the Bonds should consult their own tax advisors as to the treatment, computation and collateral consequences of amortizable Bond premium.
The Internal Revenue Service (the “IRS”) has initiated an expanded program for the auditing of taxexempt bond issues, including both random and targeted audits. It is possible that the Bonds will be selected for audit by the IRS. It is also possible that the market value of the Bonds might be affected as a result of such an audit of the Bonds (or by an audit of other similar bonds). No assurance can be given that in the course of an audit, as a result of an audit, or otherwise, Congress or the IRS might not change the Code (or interpretation thereof) subsequent to the issuance of the Bonds to the extent that it adversely affects the exclusion from gross income of interest (and original issue discount) on the Bonds or their market value.
SUBSEQUENT TO THE ISSUANCE OF THE BONDS THERE MIGHT BE FEDERAL, STATE, OR
LOCAL STATUTORY CHANGES (OR JUDICIAL OR REGULATORY CHANGES TO OR
INTERPRETATIONS OF FEDERAL, STATE, OR LOCAL LAW) THAT AFFECT THE FEDERAL, STATE,
OR LOCAL TAX TREATMENT OF THE BONDS INCLUDING THE IMPOSITION OF ADDITIONAL
FEDERAL INCOME OR STATE TAXES BEING IMPOSED ON OWNERS OF TAX-EXEMPT STATE OR LOCAL OBLIGATIONS, SUCH AS THE BONDS. THESE CHANGES COULD ADVERSELY AFFECT THE MARKET VALUE OR LIQUIDITY OF THE BONDS. NO ASSURANCE CAN BE GIVEN THAT
SUBSEQUENT TO THE ISSUANCE OF THE BONDS STATUTORY CHANGES WILL NOT BE
INTRODUCED OR ENACTED OR JUDICIAL OR REGULATORY INTERPRETATIONS WILL NOT OCCUR HAVING THE EFFECTS DESCRIBED ABOVE. BEFORE PURCHASING ANY OF THE BONDS,
ALL POTENTIAL PURCHASERS SHOULD CONSULT THEIR TAX ADVISORS REGARDING
POSSIBLE STATUTORY CHANGES OR JUDICIAL OR REGULATORY CHANGES OR INTERPRETATIONS, AND THEIR COLLATERAL TAX CONSEQUENCES RELATING TO THE BONDS. 850
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Bond Counsel’s opinions may be affected by actions taken (or not taken) or events occurring (or not occurring) after the date of issuance of the Bonds. Bond Counsel has not undertaken to determine, or to inform any person, whether any such actions or events are taken or do occur. The Indenture and the Tax Certificate relating to the Bonds permit certain actions to be taken or to be omitted if a favorable opinion of Bond Counsel is provided with respect thereto. Bond Counsel expresses no opinion as to the effect on the exclusion from gross income of interest (and original issue discount) on the Bonds for federal income tax purposes with respect to any Bond if any such action is taken or omitted based upon the advice of counsel other than Stradling Yocca Carlson & Rauth LLP.
Although Bond Counsel will render an opinion that interest (and original issue discount) on the Bonds is excluded from gross income for federal income tax purposes provided that the District and the City continue to comply with certain requirements of the Code, the ownership of the Bonds and the accrual or receipt of interest (and original issue discount) with respect to the Bonds may otherwise affect the tax liability of certain persons.
Bond Counsel expresses no opinion regarding any such tax consequences. Accordingly, before purchasing any of the Bonds, all potential purchasers should consult their tax advisors with respect to collateral tax consequences relating to the Bonds.
Should interest on the Bonds (including any original issue discount) become includable in gross income for federal income tax purposes, the Bonds are not subject to early redemption and will remain outstanding until maturity or until redeemed in accordance with the Indenture.
A copy of the proposed form of opinion of Bond Counsel is attached hereto as Appendix C.
LEGAL OPINION
The legal opinion of Bond Counsel approving the validity of the Bonds, in substantially the form set forth as Appendix C hereto, will be made available to purchasers of the Bonds at the time of original delivery of the Bonds. Certain legal matters will be passed upon for the City and the District by Burke, Williams & Sorensen, LLP, Riverside, California, City Attorney, and for the District by Stradling Yocca Carlson & Rauth LLP, Disclosure Counsel, for the Underwriter by Anzel Galvan LLP, San Francisco, California, and for the Trustee by its counsel. Bond Counsel undertakes no responsibility to the purchasers of the Bonds for the accuracy, completeness or fairness of this Official Statement.
ABSENCE OF LITIGATION
In connection with the issuance of the Bonds, the City Attorney will deliver an opinion to the effect that, to their actual knowledge, after due inquiry and investigation, there is no action, suit, proceeding or investigation at law or in equity before or by any court, public board or body, pending or threatened, or any unfavorable decision, ruling or finding, against or affecting the District, which would adversely impact the District’s ability to complete the transactions described in, or contemplated by, the Indenture or this Official Statement, restrain or enjoin the collection of the Special Taxes, or in any way contest or affect the validity of the Bonds, the Indenture, the Special Taxes, or the transactions described herein.
NO RATING
The District has not made, and does not contemplate making, an application to any rating organization for the assignment of a rating on the Bonds.
UNDERWRITING
The Bonds are being purchased by Stifel, Nicolaus & Company, Incorporated (the “Underwriter”). The Underwriter has agreed to purchase the Bonds at a price of $________ (being the $___________ aggregate principal amount of the Bonds, less an Underwriter’s discount of $_________ and plus/less original issue 851
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premium/discount of $________). The Bond Purchase Agreement relating to the Bonds provides that the Underwriter will purchase all of the Bonds if any are purchased, the obligation to make such purchase being subject to certain terms and conditions set forth in the Bond Purchase Agreement, the approval of certain legal matters by counsel and certain other conditions. The Underwriter’s compensation is contingent upon the successful issuance of the Bonds.
Under certain circumstances, the Underwriter may offer and sell the Bonds to certain dealers and others at prices lower or yields higher than those stated on the page immediately following the cover page of this Official Statement. The offering prices may be changed from time to time by the Underwriter.
FINANCIAL INTERESTS
The fees being paid to the Underwriter and its counsel, Bond Counsel, Disclosure Counsel and the Trustee are contingent upon the issuance and delivery of the Bonds. From time to time, Stradling Yocca Carlson & Rauth LLP, represents the Underwriter on matters unrelated to the Bonds.
MUNICIPAL ADVISOR
The District has retained CSG Advisors Incorporated, San Francisco, California, as Municipal Advisor for the sale of the Bonds. The Municipal Advisor is not obligated to undertake, and has not undertaken to make, an independent verification or to assume any responsibility for the accuracy, completeness or fairness of the information contained in this Official Statement.
CSG Advisors Incorporated, is an independent advisory firm and is not engaged in the business of underwriting, trading or distributing municipal or other public securities.
MISCELLANEOUS
So far as any statements made in this Official Statement involve matters of opinion, assumptions, projections, anticipated events or estimates, whether or not expressly stated, they are set forth as such and not as presentations of fact, and actual results may differ substantially from those set forth therein. Neither this Official Statement nor any statement that may have been made verbally or in writing is to be construed as a contract with the Owners of the Bonds.
The summaries of certain provisions of the Bonds, statutes and other documents or agreements referred to in this Official Statement do not purport to be complete, and reference is made to each of them for a complete statement of their provisions. Copies are available for review by making requests to the City.
The execution and delivery of this Official Statement by the City Manager of the City has been duly authorized by the City Council of the City acting in its capacity as the legislative body of the District.
COMMUNITY FACILITIES DISTRICT NO. 2022-3
(VERANO) OF THE CITY OF WILDOMAR
By:
City Manager of the City of Wildomar
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APPENDIX A
RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX
COMMUNITY FACILITIES DISTRICT NO. 2022-3 (VERANO)
OF THE CITY OF WILDOMAR
A Special Tax (all capitalized terms not otherwise defined herein are defined in Section A, “Definitions”, below) shall be applicable to each Assessor’s Parcel of Taxable Property located within the boundaries of the City of Wildomar Community Facilities District No. 2022-3 (Verano) of the City of Wildomar ("CFD No. 2022-3").
The amount of Special Tax to be levied in each Fiscal Year on an Assessor’s Parcel shall be determined by the City Council of the City of Wildomar, acting in its capacity as the legislative body of CFD No. 2022-3, by applying the appropriate Special Tax for Developed Property, Approved Property, Undeveloped Property, and Provisional Undeveloped Property that is not Exempt Property as set forth below. All of the real property, unless exempted by law or by the provisions hereof in Section F, shall be taxed for the purposes, to the extent and in the manner herein provided.
A. DEFINITIONS
The terms hereinafter set forth have the following meanings:
“Accessory Dwelling Unit” means a residential unit of limited size including a smaller second unit that shares an Assessor’s Parcel as a Single Family Residential Property with a stand-alone Residential Unit. "Acre” or “Acreage" means the land area of an Assessor's Parcel as shown on an Assessor's Parcel Map, or if the land area is not shown on an Assessor’s Parcel Map, the land area shown on the applicable final map, parcel map, condominium plan, or other recorded parcel map or instrument. The square footage of an Assessor’s Parcel is equal to the Acreage multiplied by 43,560.
"Act" means the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5 (commencing with Section 53311) of Part 1 of Division 2 of Title 5 of the Government Code of the State of California. "Administrative Expenses" means the following actual or reasonably estimated costs directly related to the administration of CFD No. 2022-3: the costs of computing the Special Taxes and preparing the Special Tax collection schedules (whether by the City or designee thereof or both); the costs of collecting the Special Taxes (whether by the City or otherwise); the costs of remitting Special Taxes to the Trustee; the costs of the Trustee (including legal counsel) in the discharge of the duties required of it under the Indenture; the costs to the City, CFD No. 2022-3 or any designee thereof of complying with arbitrage rebate requirements; the costs to the City, CFD No. 2022-3 or any designee thereof of complying with continuing disclosure requirements of the City, CFD No. 2022-3 and any major property owner associated with applicable federal and state securities laws and the Act; the costs associated with preparing Special Tax disclosure statements and responding to public inquiries regarding the Special Taxes; the costs of the City, CFD No. 2022-3 or any designee thereof related to an appeal of the Special Tax; the costs associated with the release of funds from an escrow account; and the City’s annual administration fees and third party expenses. Administration Expenses shall also include amounts estimated by the CFD Administrator or advanced by the City or CFD No. 2022-3 for any other administrative purposes of CFD No. 2022-3, including attorney’s fees and other costs related to commencing and pursuing to completion any foreclosure of delinquent Special Taxes.
"Approved Property" means all Assessor’s Parcels of Taxable Property: (i) that are included in a Final Map that was recorded prior to the January 1st preceding the Fiscal Year in which the Special Tax is being levied, (ii) that have an assigned Assessor’s Parcel Number from the County shown on an Assessor’s Parcel Map for the individual lot included on the Final Map, and (iii) that have not been issued a building permit on or before May 1st preceding the Fiscal Year in which the Special Tax is being levied. 853
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"Assessor’s Parcel" means a lot or parcel of land designated on an Assessor’s Parcel Map with an assigned Assessor’s Parcel Number.
"Assessor’s Parcel Map" means an official map of the Assessor of the County designating parcels by Assessor’s Parcel Number.
"Assessor’s Parcel Number" means that number assigned to an Assessor’s Parcel by the County for purposes of identification.
"Assigned Special Tax" means the Special Tax of that name described in Section D below. "Backup Special Tax" means the Special Tax of that name described in Section D below. "Bonds" means any obligation to repay a sum of money, including obligations in the form of bonds, certificates of participation, long-term leases, loans from government agencies, or loans from banks, other financial institutions, private businesses, or individuals, or long-term contracts, or any refunding thereof, to which the Special Tax of CFD No. 2022-3 has been pledged.
"Building Permit" means the first legal document issued by the City giving official permission for new construction. For purposes of this definition, “Building Permit” may or may not include expired or cancelled building permits, or any subsequent building permit document(s) authorizing new construction on an Assessor’s Parcel that are issued or changed by the City after the first original issuance, as determined by the CFD Administrator, provided that following such determination the Maximum Special Tax that may be levied on all Assessor’s Parcels of Taxable Property will be at least 1.1 times annual debt service on all outstanding Bonds plus the estimated annual Administrative Expenses.
"Building Square Footage" or "BSF" means the square footage of assessable internal living space, exclusive of garages or other structures not used as living space, as determined by reference to the Building Permit for such Assessor’s Parcel.
"Calendar Year" means the period commencing January 1 of any year and ending the following December 31. "CFD” or “CFD No. 2022-3" means Community Facilities District No. 2022-3 (Verano) of the City of Wildomar established by the City under the Act.
“CFD Administrator" means an official of the City, or designee thereof, responsible for determining the Special Tax Requirement, and providing for the levy and collection of the Special Taxes. “City” means the City of Wildomar, State of California. "City Council" means the City Council of the City of Wildomar, acting as the legislative body of CFD No. 2022-3.
“Condominium Plan" means a condominium plan pursuant to California Civil Code, Section 6624. "County" means the County of Riverside, State of California. "Developed Property" means all Assessor’s Parcels that: (i) are included in a Final Map that was recorded prior to the January 1st preceding the Fiscal Year in which the Special Tax is being levied, and (ii) for which a Building Permit for new construction was issued on or before May 1st preceding the Fiscal Year in which the Special Tax is being levied.
"Exempt Property" means all Assessor’s Parcels designated as being exempt from Special Taxes as provided for in Section F.
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"Final Map" means a subdivision of property by recordation of a final map, parcel map, or lot line adjustment, pursuant to the Subdivision Map Act (California Government Code Section 66410 et seq.) or recordation of a Condominium Plan pursuant to California Civil Code Section 6624 that creates individual lots for which Building Permits may be issued without further subdivision. "Fiscal Year" means the period commencing on July 1st of any year and ending the following June 30th. “Indenture” means the indenture, fiscal agent agreement, resolution or other instrument pursuant to which Bonds are issued, as modified, amended and/or supplemented from time to time, and any instrument replacing or supplementing the same.
“Land Use Category” means any of the categories listed in Table 1 of Section D. "Maximum Special Tax" means for each Assessor’s Parcel, the maximum Special Tax, determined in accordance with Section D below, that can be levied by CFD No. 2022-3 on such Assessor’s Parcel. “Multifamily Property” means all Assessor’s Parcels of Developed Property for which a Building Permit has been issued for the purpose of constructing a building or buildings comprised of attached Residential Units available for rental by the general public, not for sale to an end user, and under common management, as determined by the CFD Administrator.
"Non-Residential Property" means all Assessor's Parcels of Developed Property for which a Building Permit(s) was issued for a non-residential use. The CFD Administrator shall make the determination if an Assessor’s Parcel is Non-Residential Property.
"Partial Prepayment Amount" means the amount required to prepay a portion of the Special Tax obligation for an Assessor’s Parcel, as described in Section G.2.
"Prepayment Amount" means the amount required to prepay the Special Tax obligation in full for an Assessor’s Parcel, as described in Section G.1.
“Proportionately” means for Taxable Property that is (i) Developed Property, that the ratio of the actual Special Tax levy to the Assigned Special Tax is the same for all Assessor’s Parcels of Developed Property, (ii) Approved Property, that the ratio of the actual Special Tax levy to the Maximum Special Tax is the same for all Assessor’s Parcels of Approved Property, and (iii) Undeveloped Property or Provisional Undeveloped Property, that the ratio of the actual Special Tax levy per Acre to the Maximum Special Tax per Acre is the same for all Assessor’s Parcels of Undeveloped Property or Provisional Undeveloped Property, as applicable. "Provisional Undeveloped Property"means all Assessor’s Parcels of Taxable Property that would otherwise be classified as Exempt Property pursuant to the provisions of Section F, but cannot be classified as Exempt Property because to do so would reduce the Acreage of all Taxable Property below the required minimum Acreage set forth in Section F.
"Residential Property" means all Assessor’s Parcels of Developed Property for which a Building Permit has been issued for purposes of constructing one or more Residential Units. “Residential Unit” or "RU" means a residential unit that is used or intended to be used as a domicile by one or more persons, as determined by the CFD Administrator. An Accessory Dwelling Unit that shares an Assessor’s Parcel with a Single Family Residential Property shall not be considered a Residential Unit for purposes of this RMA.
“RMA" means this Rate and Method of Apportionment of Special Taxes. “Single Family Residential Property” means all Assessor’s Parcels of Residential Property other than Multifamily Property.
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"Special Tax" or “Special Taxes” means any of the special taxes authorized to be levied within CFD No. 2022- 3 pursuant to the Act to fund the Special Tax Requirement. "Special Tax Requirement " means the amount required in any Fiscal Year to pay: (i) the debt service or the periodic costs on all outstanding Bonds due in the Calendar Year that commences in such Fiscal Year, (ii) Administrative Expenses, (iii) the costs associated with the release of funds from an escrow account, (iv) any amount required to replenish any reserve funds established in association with the Bonds (provided that the same amount was not previously levied), (v) an amount up to any anticipated shortfall (based on the prior year’s delinquency rate) due to Special Tax delinquencies and (vi) for the collection or accumulation of funds for the acquisition or construction of facilities authorized by CFD No. 2022-3 or the payment of debt service on Bonds anticipated to be issued, provided that the inclusion of such amount does not cause an increase in the levy of Special Tax on Approved Property or Undeveloped Property as set forth in Steps Two or Three of Section E., less (vii) any amounts available to pay debt service or other periodic costs on the Bonds pursuant to the Indenture. "Taxable Property" means all Assessor’s Parcels within CFD No. 2022-3, which are not Exempt Property. “Taxable Unit” means either a Residential Unit or an Acre. “Trustee” means the trustee, fiscal agent, or paying agent under the Indenture. "Undeveloped Property" means all Assessor’s Parcels of Taxable Property which are not Developed Property, Approved Property, or Provisional Undeveloped Property.
B. SPECIAL TAX
Commencing Fiscal Year 2023-2024 and for each subsequent Fiscal Year, the City Council shall levy Special Taxes on all Taxable Property, up to the applicable Maximum Special Tax, to fund the Special Tax Requirement.
C. ASSIGNMENT TO LAND USE CATEGORY FOR SPECIAL TAX
Each Fiscal Year, beginning with Fiscal Year 2023-2024, each Assessor’s Parcel within CFD No. 2022-3 shall be classified as Taxable Property or Exempt Property. In addition, each Assessor’s Parcel of Taxable Property shall be further classified as Developed Property, Approved Property, Undeveloped Property or Provisional Undeveloped Property.
Assessor’s Parcels of Developed Property shall further be classified as Residential Property or Non-Residential Property. Each Assessor’s Parcel of Residential Property shall further be classified as a Single Family Residential Property or Multifamily Property. Each Assessor’s Parcel of Single Family Residential Property shall be further assigned to a Land Use Category based on its Building Square Footage.
In the event that there are Assessor’s Parcel(s) for which one or more Building Permits for Residential Units have been issued and the County has not yet assigned final Assessor’s Parcel Number(s) to such Assessor’s Parcel(s) (in accordance with the Final Map or Condominium Plan), the amount of the Special Tax levy on such Assessor’s Parcel for each Fiscal Year shall be determined as follows: (1) the CFD Administrator shall first determine an amount of the Maximum Special Tax for such Assessor’s Parcel, based on the classification of such Assessor’s Parcel as Undeveloped Property; (2) the amount of the Special Tax for the Residential Units on such Assessor’s Parcel for which Building Permits have been issued shall be determined based on the Developed Property Special Tax rates and such amount shall be levied as Developed Property in accordance with Step 1 of Section E below; and (3) the amount of the Special Tax on the Taxable Property in such Assessor’s Parcel not subject to the Special Tax levy in clause (2) shall be equal to: (A) the percentage of the Maximum Special Tax rate levied on Undeveloped Property pursuant to Step 3 of Section E below, multiplied by the total of the amount determined in clause (1), less (B) the amount determined in clause (2). 856
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D. MAXIMUM SPECIAL TAX
1. Developed Property
The Maximum Special Tax for each Assessor’s Parcel of Single Family Residential Property in any Fiscal Year shall be the greater of (i) the Assigned Special Tax for such Assessor’s Parcel or (ii) the Backup Special Tax.
The Maximum Special Tax for each Assessor’s Parcel of Multifamily Property and Non-Residential Property shall be the applicable Assigned Special Tax described in Table 1 of Section D. a. Assigned Special Tax
Each Fiscal Year, each Assessor’s Parcel of Single Family Residential Property, Multifamily Property or Non-Residential Property shall be subject to an Assigned Special Tax. The Assigned Special Tax for Fiscal Year 2023-2024 applicable to an Assessor's Parcel of Developed Property shall be determined pursuant to Table 1 below.
TABLE 1
ASSIGNED SPECIAL TAX FOR DEVELOPED PROPERTY
FISCAL YEAR 2023-2024
LAND USE CATEGORY
TAXABLE
UNIT
BUILDING SQUARE
FOOTAGE
ASSIGNED
SPECIAL TAX
PER
TAXABLE
UNIT
1. Single Family Residential Property RU Less than 1,500 sq. ft $4,195.00
2. Single Family Residential Property RU 1,500 sq. ft to 1,700 sq. ft $4,254.00
3. Single Family Residential Property RU 1,701 sq. ft to 1,900 sq. ft $4,476.00
4. Single Family Residential Property RU Greater than 1,900 sq. ft $4,678.00
5. Multifamily Property Acre N/A $23,142.00
6. Non-Residential Property Acre N/A $23,142.00
On each July 1, commencing July 1, 2024, the Assigned Special Tax rate for Developed Property shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year. b. Multiple Land Use Categories
In some instances an Assessor’s Parcel of Developed Property may contain more than one Land Use Category. The Maximum Special Tax levied on an Assessor’s Parcel shall be the sum of the Maximum Special Tax for each Taxable Unit for all Land Use Categories located on the Assessor’s Parcel. The CFD Administrator’s allocation to each type of property shall be final. c. Backup Special Tax
The Backup Special Tax for an Assessor’s Parcel within a Final Map classified as Single Family Residential Property shall be $4,637 per Residential Unit.
Notwithstanding the foregoing, if all or any portion of the applicable Final Maps and/or condominium plan contained within the boundaries of CFD No. 2022-3 is subsequently changed or modified, then the Backup Special Tax for Single Family Residential Property or Approved Property in such Final Map or condominium plan area that is changed or modified shall be recalculated as follows:
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1. Determine the total Backup Special Taxes anticipated to apply to the changed or modified Final Map or condominium plan area prior to the change or modification.
2. The result of paragraph 1 above shall be divided by the total number of Residential Units constructed and/or anticipated to be constructed within such changed or modified Final Map or condominium plan area, as reasonably determined by the CFD Administrator.
The result of paragraph 2 is the Backup Special Tax per Residential Unit which shall be applicable to Assessor’s Parcels of Single Family Residential Property or Approved Property in such changed or modified Final Map or condominium plan area contained within the boundaries of CFD No. 2022-3.
Notwithstanding the foregoing, the Backup Special Tax for an Assessor’s Parcel of Developed Property for which a certificate of occupancy has been granted may not be revised.
On each July 1, commencing July 1, 2024, the Backup Special Tax rate shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year.
2. Approved Property
The Maximum Special Tax for each Assessor’s Parcel of Approved Property expected to be classified as Single Family Residential Property shall be the Backup Special Tax computed pursuant to Section D.1.c above.
The Maximum Special Tax for each Assessor’s Parcel of Approved Property not expected to be classified as Single Family Residential Property shall be $23,142 per Acre.
On each July 1, commencing July 1, 2024, the Maximum Special Tax rate for Approved Property shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year.
3. Undeveloped Property and Provisional Undeveloped Property The Maximum Special Tax for each Assessor’s Parcel of Undeveloped Property and Provisional Undeveloped Property shall be $23,142 per Acre.
On each July 1, commencing July 1, 2024, the Maximum Special Tax rate for Undeveloped Property and Provisional Undeveloped Property shall be increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year.
E. METHOD OF APPORTIONMENT OF THE SPECIAL TAX
Commencing Fiscal Year 2023-2024 and for each subsequent Fiscal Year, the City Council shall levy Special Taxes on all Taxable Property in accordance with the following steps:
Step One: Prior to the first issuance of Bonds, the Special Tax shall be levied at 100% of the applicable Assigned Special Tax rates on Developed Property and (ii) subsequent to the first issuance of Bonds, the Special Tax shall be levied Proportionately on each Assessor’s Parcel of Developed Property at up to 100% of the applicable Assigned Special Tax rates in Table 1 to satisfy the Special Tax Requirement.
Step Two: If additional moneys are needed to satisfy the Special Tax Requirement after the first step has been completed, the Special Tax shall be levied Proportionately on each Assessor’s Parcel of Approved Property at up to 100% of the Maximum Special Tax applicable to each such Assessor’s Parcel as needed to satisfy the Special Tax Requirement. 858
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Step Three: If additional moneys are needed to satisfy the Special Tax Requirement after the first two steps have been completed, the Special Tax shall be levied Proportionately on each Assessor’s Parcel of Undeveloped Property up to 100% of the Maximum Special Tax applicable to each such Assessor’s Parcel as needed to satisfy the Special Tax Requirement.
Step Four: If additional moneys are needed to satisfy the Special Tax Requirement after the first three steps have been completed, then the Special Tax levy on each Assessor's Parcel of Developed Property for which the Maximum Special Tax is the Backup Special Tax shall be increased in equal percentages from the Assigned Special Tax up to 100% of the Backup Special Tax as needed to satisfy the Special Tax Requirement.
Step Five: If additional moneys are needed to satisfy the Special Tax Requirement after the first four steps have been completed, the Special Tax shall be levied Proportionately on each Assessor’s Parcel of Provisional Undeveloped Property up to 100% of the Maximum Special Tax applicable to each such Assessor’s Parcel as needed to satisfy the Special Tax Requirement.
Notwithstanding the above, under no circumstances will the Special Taxes levied in any Fiscal Year against any Assessor’s Parcel of Residential Property as a result of a delinquency in the payment of the Special Tax applicable to any other Assessor’s Parcel be increased by more than ten percent (10%) above the amount that would have been levied in that Fiscal Year had there never been any such delinquency or default.
F. EXEMPTIONS
The City shall classify as Exempt Property, in the chronological order in which they become exempt, (i) Assessor’s Parcels which are owned by, irrevocably offered for dedication, encumbered by or restricted in use by the State of California, Federal or other local governments, including school districts, (ii) Assessor’s Parcels which are used as places of worship and are exempt from ad valorem property taxes because they are owned by a religious organization, (iii) Assessor’s Parcels which are owned by, irrevocably offered for dedication, encumbered by or restricted in use by a homeowners' association, (iv) Assessor’s Parcels with public or utility easements making impractical their utilization for other than the purposes set forth in the easement, (v) Assessor’s Parcels which are privately owned and are encumbered by or restricted solely for public uses, (vi) Assessor’s Parcels which are classified as Non-Residential Property or (vii) Assessor’s Parcels restricted to other types of public uses determined by the City Council, provided that no such classification would reduce the sum of all Taxable Property to less than 14.66 Acres.
Notwithstanding the above, the City Council shall not classify an Assessor’s Parcel as Exempt Property if such classification would reduce the sum of all Taxable Property to less than 14.66 Acres. Assessor's Parcels which cannot be classified as Exempt Property because such classification would reduce the Acreage of all Taxable Property to less than 14.66 Acres will be classified as Provisional Undeveloped Property, and will be subject to Special Tax pursuant to Step Five in Section E.
G. PREPAYMENT OF SPECIAL TAX
The following additional definitions apply to this Section G:
“CFD Facilities” means $4,330,000 expressed in 2022 dollars, which shall increase by the Construction Inflation Index on July 1, 2024, and on each July 1 thereafter, or such lower amount (i) determined by the City Council as sufficient to provide the facilities under the authorized bonding program for CFD No. 2022-3, or (ii) determined by the City Council concurrently with a covenant that it will not issue any more Bonds to finance additional facilities to be supported by Special Tax levied under this RMA. “Construction Fund” means an account specifically identified in the Indenture or functionally equivalent to hold funds, which are available for expenditure to acquire or construct facilities eligible to be financed by CFD No. 2022-3.
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“Construction Inflation Index” means the greater of (i) 2% and (ii) the annual percentage change in the Engineering News-Record Building Cost Index for the city of Los Angeles, measured as of the Calendar Year which ends in the previous Fiscal Year. In the event this index ceases to be published, the Construction Inflation Index shall be another index as determined by the City that is reasonably comparable to the Engineering NewsRecord Building Cost Index for the City of Los Angeles. “Future Facilities Costs” means the CFD Facilities minus (i) amounts deposited in the Construction Fund, (ii) amounts deposited in any escrow accounts funded by the Outstanding Bonds and anticipated to fund public facilities costs, and (iii) public facility costs funded by interest earnings on the Construction Fund actually earned prior to the date of prepayment, but in no event shall such amount be less than zero. “Outstanding Bonds” means all previously issued Bonds issued and secured by the levy of Special Tax which will remain outstanding after the first interest and/or principal payment date following the current Fiscal Year, excluding Bonds to be redeemed at a later date with the proceeds of prior prepayments of Special Tax.
1. Prepayment in Full
The Special Tax obligation may be prepaid and permanently satisfied for (i) Assessor’s Parcels of Developed Property, (ii) Assessor’s Parcels of Approved Property or Undeveloped Property for which a Building Permit has been issued, (iii) Assessor’s Parcels of Approved Property or Undeveloped Property for which a Building Permit has not been issued and (iv) Assessor’s Parcels of Provisional Undeveloped Property. The Special Tax obligation applicable to an Assessor’s Parcel may be fully prepaid and the obligation to pay the Special Tax for such Assessor’s Parcel permanently satisfied as described herein; provided that a prepayment may be made only if there are no delinquent Special Taxes with respect to such Assessor’s Parcel at the time of prepayment. An owner of an Assessor’s Parcel intending to prepay the Special Tax obligation for such Assessor’s Parcel shall provide the CFD Administrator with written notice of intent to prepay, and within 5 business days of receipt of such notice, the CFD Administrator shall notify such owner of the amount of the nonrefundable deposit determined to cover the cost to be incurred by the CFD in calculating the Prepayment Amount (as defined below) for the Assessor’s Parcel. Within 15 days of receipt of such non-refundable deposit, the CFD Administrator shall notify such owner of the Prepayment Amount for the Assessor’s Parcel. Prepayment must be made not less than 60 days prior to the redemption date for any Bonds to be redeemed with the proceeds of such prepaid Special Taxes.
The Prepayment Amount shall be calculated as follows (some capitalized terms are defined below):
Bond Redemption Amount
plus Redemption Premium
plus Future Facilities Amount
plus Defeasance Amount
plus Administrative Fees and Expenses
less Reserve Fund Credit
Equals: Prepayment Amount
The Prepayment Amount shall be determined as of the proposed prepayment date as follows:
1. Confirm that no Special Tax delinquencies apply to such Assessor’s Parcel.
2. For an Assessor’s Parcel of Developed Property, compute the Maximum Special Tax for the Assessor’s Parcel. For an Assessor’s Parcel of Approved Property or Undeveloped Property for which a Building Permit has been issued, compute the Maximum Special Tax for the Assessor’s Parcel as though it was already designated as Developed Property, based upon the Building Permit which has been issued for the Assessor’s Parcel. For an Assessor’s Parcel of Approved Property or Undeveloped Property for which 860
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a Building Permit has not been issued, or Provisional Undeveloped Property, compute the Maximum Special Tax for the Assessor’s Parcel.
3. Divide the Maximum Special Tax derived pursuant to paragraph 2 by the total amount of Maximum Special Taxes that could be levied assuming build out of all Assessor’s Parcels of Taxable Property based on the applicable Maximum Special Tax for Assessor’s Parcels of Developed Property not including any Assessor’s Parcels for which the Special Tax obligation has been previously prepaid.
4. Multiply the quotient derived pursuant to paragraph 3 by the principal amount of the Outstanding Bonds to determine the amount of Outstanding Bonds to be redeemed with the Prepayment Amount (the “Bond Redemption Amount”).
5. Multiply the Bond Redemption Amount by the applicable redemption premium, if any, on the Outstanding Bonds to be redeemed (the “Redemption Premium”).
6. Determine the Future Facilities Costs.
7. Multiply the quotient derived pursuant to paragraph 3 by the amount determined pursuant to paragraph 6 to determine the amount of Future Facilities Costs for the Assessor’s Parcel (the “Future Facilities Amount”).
8. Determine the amount needed to pay interest on the Bond Redemption Amount from the first bond interest and/or principal payment date following the current Fiscal Year until the earliest redemption date for the Outstanding Bonds on which Bonds can be redeemed from Special Tax prepayments.
9. Determine the Special Taxes levied on the Assessor’s Parcel in the current Fiscal Year which have not yet been paid.
10. Determine the amount the CFD Administrator reasonably expects to derive from the investment of the Bond Redemption Amount and the Redemption Premium from the date of prepayment until the redemption date for the Outstanding Bonds to be redeemed with the Prepayment Amount.
11. Add the amounts derived pursuant to paragraphs 8 and 9 and subtract the amount derived pursuant to paragraph 10 (the “Defeasance Amount”).
12. Verify the administrative fees and expenses of the CFD, the cost to invest the Prepayment Amount, the cost of redeeming the Outstanding Bonds, and the cost of recording notices to evidence the prepayment of the Special Tax obligation for the Assessor’s Parcel and the redemption of Outstanding Bonds (the “Administrative Fees and Expenses”).
13. The reserve fund credit (the “Reserve Fund Credit”) shall equal the lesser of: (a) the expected reduction in the reserve requirement (as defined in the Indenture), if any, associated with the redemption of Outstanding Bonds as a result of the prepayment, or (b) the amount derived by subtracting the new reserve requirement (as defined in the Indenture) in effect after the redemption of Outstanding Bonds as a result of the prepayment from the balance in the reserve fund on the prepayment date, but in no event shall such amount be less than zero.
14. The Prepayment Amount is equal to the sum of the Bond Redemption Amount, the Redemption Premium, the Future Facilities Amount, the Defeasance Amount and the Administrative Fees and Expenses, less the Reserve Fund Credit.
15. From the Prepayment Amount, the Bond Redemption Amount, the Redemption Premium, and Defeasance Amount shall be deposited into the appropriate fund as established under the Indenture and be 861
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used to redeem Outstanding Bonds or make debt service payments. The Future Facilities Amount shall be deposited into the Construction Fund. The Administrative Fees and Expenses shall be retained by the CFD.
The Prepayment Amount may be sufficient to redeem other than a $5,000 increment of Bonds. In such event, the increment above $5,000 or an integral multiple thereof will be retained in the appropriate fund established under the Indenture to be used with the next redemption from other Special Tax prepayments of Outstanding Bonds or to make debt service payments.
As a result of the payment of the current Fiscal Year’s Special Tax levy as determined pursuant to paragraph 9 above, the CFD Administrator shall remove the current Fiscal Year’s Special Tax levy for the Assessor’s Parcel from the County tax roll. With respect to any Assessor’s Parcel for which the Special Tax obligation is prepaid, the City Council shall cause a suitable notice to be recorded in compliance with the Act, to indicate the prepayment of Special Tax obligation and the release of the Special Tax lien for the Assessor’s Parcel, and the obligation to pay the Special Tax for such Assessor’s Parcel shall cease.
Notwithstanding the foregoing, no Special Tax prepayment shall be allowed unless the amount of Maximum Special Tax that may be levied on all Assessor’s Parcels of Taxable Property after the proposed prepayment will be at least 1.1 times maximum annual debt service on the Bonds that will remain outstanding after the prepayment plus the estimated annual Administrative Expenses.
Tenders of Bonds in prepayment of the Special Tax obligation may be accepted upon the terms and conditions established by the City Council pursuant to the Act. However, the use of Bond tenders shall only be allowed on a case-by-case basis as specifically approved by the City Council.
2. Prepayment in Part
The Special Tax obligation for an Assessor’s Parcel of Developed Property, Approved Property, Undeveloped Property, or Provisional Undeveloped Property may be partially prepaid. For purposes of determining the Partial Prepayment Amount, the provisions of Section G.1 shall be modified as provided by the following formula:
PP = ((PE – A) x F) + A
These terms have the following meaning:
PP = Partial Prepayment Amount
PE = the Prepayment Amount calculated according to Section G.1 F = the percent by which the owner of the Assessor’s Parcel(s) is partially prepaying the Special Tax obligation
A = the Administrative Fees and Expenses determined pursuant to Section G.1 The owner of an Assessor’s Parcel who desires to partially prepay the Special Tax obligation for the Assessor’s Parcel shall notify the CFD Administrator of (i) such owner’s intent to partially prepay the Special Tax obligation, (ii) the percentage of the Special Tax obligation such owner wishes to prepay, and (iii) the company or agency that will be acting as the escrow agent, if any. Within 5 days of receipt of such notice, the CFD Administrator shall notify such property owner of the amount of the non-refundable deposit determined to cover the cost to be incurred by the CFD in calculating the Partial Prepayment Amount. Within 15 business days of receipt of such non-refundable deposit, the CFD Administrator shall notify such owner of the amount of the Partial Prepayment Amount for the Assessor’s Parcel. A Partial Prepayment Amount must be made not less than 60 days prior to the redemption date for the Outstanding Bonds to be redeemed with the proceeds of the Partial Prepayment Amount.
With respect to any Assessor’s Parcel for which the Special Tax obligation is partially prepaid, the CFD Administrator shall (i) distribute the Partial Prepayment Amount as provided in Paragraph 15 of Section G.1, 862
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and (ii) indicate in the records of the CFD that there has been a partial prepayment for the Assessor’s Parcel and that a portion of the Special Tax obligation equal to the remaining percentage (1.00 - F) of the applicable Special Tax will continue to be levied on the Assessor’s Parcel pursuant to Section E.
H. TERMINATION OF SPECIAL TAX
For each Fiscal Year that any Bonds are outstanding the Special Tax shall be levied on all Assessor’s Parcels subject to the Special Tax pursuant to Section E. The Special Tax shall cease not later than the 2064-2065 Fiscal Year, however, Special Taxes will cease to be levied in an earlier Fiscal Year if the CFD Administrator has determined (i) that all the required interest and principal payments on the CFD No. 2022-3 Bonds have been paid; (ii) all authorized facilities of CFD No. 2022-3 have been acquired and all reimbursements to the developer have been paid, (iii) no delinquent Special Taxes remain uncollected and (iv) all other obligations of CFD No. 2022-3 have been satisfied.
I. MANNER OF COLLECTION
The Special Tax shall be collected in the same manner and at the same time as ordinary ad valorem property taxes, provided, however, that CFD No. 2022-3 may collect Special Taxes at a different time or in a different manner if necessary to meet its financial obligations, and may covenant to foreclose and may actually foreclose on delinquent Assessor’s Parcels as permitted by the Act.
J. APPEALS OF SPECIAL TAXES
Any taxpayer may file a written appeal of the Special Taxes levied on his/her Assessor’s Parcel(s) with the CFD Administrator, provided that the appellant is current in his/her payments of Special Taxes. During pendency of an appeal, all Special Taxes previously levied must be paid on or before the payment date established when the levy was made. The appeal must specify the reasons why the appellant claims the Special Tax is in error. The CFD Administrator shall review the appeal, meet with the appellant if the CFD Administrator deems necessary, and advise the appellant of its determination. If the CFD Administrator agrees with the appellant, the CFD Administrator shall grant a credit to eliminate or reduce future Special Taxes on the appellant’s Assessor’s Parcel(s). No refunds of previously paid Special Taxes shall be made unless approved by the CFD Administrator.
The CFD Administrator shall interpret this RMA and make determinations relative to the annual levy and administration of the Special Taxes and any taxpayer who appeals, as herein specified. 863
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APPENDIX B
CERTAIN ECONOMIC AND DEMOGRAPHIC INFORMATION REGARDING
The following information relating to the City of Wildomar (the “City”) and the County of Riverside, California (the “County”), California (the “State”) is supplied solely for purposes of information. Neither the City nor the County is obligated in any manner to pay principal of or interest on the Bonds or to cure any delinquency or default on the Bonds. The Bonds are payable solely from the sources described in the Official Statement.
General
The City was founded in 1886 and incorporated as a general law city effective July 1, 2008 in Riverside County. The City encompasses approximately 24 square miles along Interstate 15 in Riverside County.
Population
The following table offers population figures for the City and the County for 2019 through 2023.
Area 2019 2020 2021 2022 2023
City of Wildomar 36,878 36,963 36,646 36,306 36,093
County of Riverside 2,419,057 2,440,719 2,419,165 2,427,832 2,428,580 Source: California State Department of Finance, Demographic Research Unit. 2010 Census Benchmark. Population and Housing Estimates for Cities, Counties, and the State — January 1, 2022 and 2023 Building Activity
The following tables provide summaries of the building permit valuations and the number of new dwelling units authorized in the City and County from 2018 through 2022.
BUILDING PERMIT VALUATIONS
City of Wildomar
2018-2022
(Dollars in Thousands)
2018 2019 2020 2021 2022
Valuation ($000):
Residential $ 33,336 $ 1,136,789 $12,585,611 $15,563,559 $17,373,268 Non-residential 1,988,035 1,392,516 20,283,426 2,750,536 23,721,559 Total* $2,021,371 $ 2,529,305 $32,869,037 $18,314,095 $41,094,827 Residential Units:
Single family 41 7 50 52 61
Multiple family 0 0 0 0 23
Total 41 7 50 52 84
* Totals may not add to sums because of rounding.
Source: Construction Industry Research Board.
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BUILDING PERMIT VALUATIONS
County of Riverside
2018-2022
(Dollars in Thousands)
2018 2019 2020 2021 2022
Valuation ($000):
Residential $2,558,081 $2,275,405 $2,519,303 $2,262,642 $2,921,112 Non-residential 1,959,680 1,285,856 1,153,778 1,154,998 1,701,615 Total* $4,517,761 $3,561,261 $3,673,081 $3,417,640 $4,622,727 Residential Units:
Single family 7,540 6,563 8,443 7,360 8,863
Multiple family 1,628 1,798 723 1,126 2,861
Total 9,168 8,361 9,166 8,486 11,724
* Totals may not add to sums because of rounding.
Source: Construction Industry Research Board.
Employment
The following tables show the largest employers located in the City and County as of June 30, 2022.
LARGEST EMPLOYERS
City of Wildomar
(as of June 30, 2022)
Rank Name of Business Employees Type of Business
1. Lake Elsinore Unified School District 2,088 School District
2. Inland Valley Medical Center 825 Medical Center
3. Southern California Edison 213 Utilities Company
4. Stater Bros Markets 109 Supermarket
5. Albertson’s 105 Supermarket
6. Cornerstone Community Church & School 101 Religious Center
7. Wildomar Senior Leisure Community 85 Assisted Living Facility
8. Animal Friends of the valleys 83 Animal Clinic
9. Sycamore Academy-Sci-Cultural Arts 65 Charter School
10. FCP Inc. 62 Industrial Business
Source: City of Wildomar Comprehensive Annual Financial Report for the year ending June 30, 2022. 865
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LARGEST EMPLOYERS
County of Riverside
(as of June 30, 2023)
Rank Name of Business Employees Type of Business
1. County of Riverside 25,366 County Government
2. Amazon 14,317 E-Commerce
3. March Air Reserve Base 9,600 Military Reserve Base
4. Nestle UA 8,874 Grocery Wholesalers
5. University of California-Riverside 8,623 University
6. State of California 8,383 State Government
7. Walmart 7,494 Retail Company
8. Moreno Valley Unified School District 6,020 School District
9. Kaiser Permanente Riverside Medical Center 5,817 Medical Center
10. Corona-Norco Unified School District 5,478 School District Source: County of Riverside Office of Economic Development.
Employment and Industry
Employment data by industry is not separately reported on an annual basis for the City but is compiled for the Riverside-San Bernardino-Ontario Metropolitan Statistical Area (the “MSA”), which includes all of Riverside and San Bernardino Counties. In addition to varied manufacturing employment, the MSA has large and growing commercial and service sector employment, as reflected in the table below. [Remainder of Page Intentionally Left Blank]
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The following table represents the Annual Average Labor Force and Industry Employment for the period from 2019 through 2023.
RIVERSIDE-SAN BERNARDINO-ONTARIO METROPOLITAN STATISTICAL AREA
INDUSTRY EMPLOYMENT & LABOR FORCE - BY ANNUAL AVERAGE
2019 2020 2021 2022 2023
Civilian Labor Force(1) 2,071,600 2,091,700 2,120,600 2,148,700 2,171,500 Employment 1,987,500 1,885,400 1,964,300 2,058,400 2,068,800 Unemployment 84,000 206,200 156,300 90,200 102,700
Unemployment Rate 4.1% 9.9% 7.4% 4.2% 4.7%
Wage and Salary Employment:(2) 15,400 14,100 13,700 13,800 Agriculture 1,200 1,300 1,400 1,500 13,100
Mining and Logging 107,200 104,900 110,100 114,700 1,500 Construction 101,300 96,000 96,100 100,000 115,700
Manufacturing 67,700 65,600 67,400 69,500 98,900
Wholesale Trade 180,700 168,800 177,000 181,000 68,700
Retail Trade 146,600 172,500 198,800 214,400 182,700
Transportation, Warehousing and
Utilities
14,100 12,400 12,500 13,000 205,100
Information 24,800 24,600 24,400 23,800 13,300
Finance and Insurance 20,200 19,500 20,700 22,200 22,300 Real Estate and Rental and Leasing 155,300 152,100 166,600 173,900 22,500 Professional and Business Services 250,300 248,800 254,300 267,500 164,800 Educational and Health Services 175,900 141,300 160,200 180,900 287,500 Leisure and Hospitality 46,200 40,200 43,600 47,400 186,500 Other Services 21,100 22,100 21,100 20,900 49,300
Federal Government 31,100 31,300 30,400 28,400 21,200
State Government 209,000 194,600 190,500 200,700 28,800 Local Government 209,000 194,600 190,500 200,300 210,900 Total All Industries 1,568,100 1,509,900 1,588,800 1,673,500 1,692,900 (1) Labor force data is by place of residence; includes self-employed individuals, unpaid family workers, household domestic workers, and workers on strike.
(2) Industry employment is by place of work; excludes self-employed individuals, unpaid family workers, household domestic workers, and workers on strike.
Source: State of California, Employment Development Department. [Remainder of Page Intentionally Left Blank]
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The following table summarizes the labor force, employment and unemployment figures for the period from 2019 through 2023 for the City, the County, the State and the nation as a whole.
CITY OF WILDOMAR,
COUNTY OF RIVERSIDE,
STATE OF CALIFORNIA AND UNITED STATES
Average Annual Civilian Labor Force, Employment and Unemployment Year and Area Labor Force Employment(1) Unemployment(2) Unemployment
Rate (%)(3)
2019
City of Wildomar 30,800 29,600 1,200 3.9%
County of Riverside 1,104,000 1,057,900 46,100 4.2
State of California 19,411,600 18,627,400 784,200 4.0
United States 163,539,000 157,538,000 6,001,000 3.7
2020
City of Wildomar 31,300 28,100 3,100 10.1%
County of Riverside 1,107,700 997,700 110,000 9.9
State of California 18,821,200 16,913,100 1,908,100 10.1 United States 160,472,000 147,795,000 12,947,000 8.1
2021
City of Wildomar 30,100 27,800 2,300 7.6%
County of Riverside 1,129,600 1,046,700 82,800 7.3
State of California 18,923,200 17,541,900 1,381,200 7.3 United States 161,204,000 152,581,000 8,623,000 5.3
2022
City of Wildomar 30,700 29,400 1,300 4.2%
County of Riverside 1,152,100 1,104,100 48,000 4.2
State of California 19,252,000 18,440,900 811,100 4.2
United States 164,287,000 158,291,000 5,996,000 3.6
2023
City of Wildomar 18,000 17,200 800 4.4%
County of Riverside 1,157,900 1,102,300 55,600 4.8
State of California 19,308,300 18,388,300 920,000 4.8
United States 167,116,000 161,037,000 6,080 3.6
Note: Data is not seasonally adjusted.
(1) Annual averages, unless otherwise specified.
(2) Includes persons involved in labor-management trade disputes. (3) The unemployment rate is computed from unrounded data; therefore, it may differ from rates computed from rounded figures in this table.
Source: California Employment Development Department and U.S. Department of Labor, Bureau of Labor Statistics. 868
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Personal Income
Personal Income is the income that is received by all persons from all sources. It is calculated as the sum of wage and salary disbursements, supplements to wages and salaries, proprietors’ income with inventory valuation and capital consumption adjustments, rental income of persons with capital consumption adjustment, personal dividend income, personal interest income, and personal current transfer receipts, less contributions for government social insurance.
The personal income of an area is the income that is received by, or on behalf of, all the individuals who live in the area; therefore, the estimates of personal income are presented by the place of residence of the income recipients.
Total personal income in Riverside County increased by 71.7% between 2012 and 2022. The following tables summarize personal income for Riverside County for 2012 through 2022.
PERSONAL INCOME
Riverside County
2012-2022
(Dollars in Thousands)
Year Riverside County
Annual
Percent Change
2012 $74,050,799 2.9%
2013 76,519,738 3.3
2014 80,776,153 5.6
2015 86,196,663 6.7
2016 90,713,807 5.2
2017 93,043,247 4.2
2018 97,949,023 4.8
2019 104,149,463 6.8
2020 115,570,337 11.0
2021 125,820,553 8.9
2022 127,195,983 1.1
Source: U.S. Department of Commerce, Bureau of Economic Analysis.
The following table summarizes per capita personal income for Riverside County, California and the United States for 2012-2022. This measure of income is calculated as the personal income of the residents of the area divided by the resident population of the area. [Remainder of Page Intentionally Left Blank]
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PER CAPITA PERSONAL INCOME
Riverside County, State of California and the United States 2012-2022
Year Riverside County California United States
2012 $32,748 $48,813 $44,605
2013 33,462 49,303 44,860
2014 34,875 52,363 47,071
2015 36,745 55,833 49,019
2016 38,114 58,048 50,015
2017 39,148 60,549 52,118
2018 40,587 63,720 54,606
2019 43,295 64,919 52,250
2020 47,702 70,647 59,765
2021 51,180 76,614 64,143
2022 51,415 77,339 65,423
Source: U.S. Department of Commerce, Bureau of Economic Analysis.
Taxable Sales
The table below presents taxable sales for the years 2019 through 2023 for the City.
TAXABLE SALES
City of Wildomar
2019-2023
(Dollars in Thousands)
Year Permits Taxable Transactions
2019 713 $ 176,945,036
2020 780 176,000,837
2021 676 223,006,883
2022 727 266,301,085
2023 777 262,619,293
Source: Taxable Sales in California, California Department of Tax and Fee Administration for 2019-2023.
The table below presents taxable sales for the years 2019 through 2023 for the County.
TAXABLE SALES
County of Riverside
2019-2023
(Dollars in Thousands)
Year Permits Taxable Transactions
2019 64,063 $40,626,998
2020 69,284 42,313,474
2021 64,335 55,535,196
2022 66,738 62,117,153
2023 68,670 61,094,594
Source: Taxable Sales in California, California Department of Tax and Fee Administration for 2019-2023. 870
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APPENDIX C
FORM OF OPINION OF BOND COUNSEL
Upon issuance of the Bonds, Stradling Yocca Carlson & Rauth LLP, Bond Counsel, proposes to render its final approving opinion in substantially the following form:
_______, 2024
Community Facilities District No. 2022-3 (Verano)
of the City of Wildomar
Wildomar, California
Re: $__________ Community Facilities District No. 2022-3 (Verano) of the City of Wildomar Special Tax Bonds, Series 2024
Ladies and Gentlemen:
We have examined the Constitution and the laws of the State of California, a certified record of the proceedings of the City of Wildomar (the “City”) taken in connection with the formation of Community Facilities District No. 2022-3 (Verano) of the City of Wildomar (the “District”) and the authorization and issuance of the District’s Special Tax Bonds, Series 2024 in the aggregate principal amount of $__________ (the “Bonds”) and such other information and documents as we consider necessary to render this opinion. In rendering this opinion, we have relied upon certain representations of fact and certifications made by the District, the City, the initial purchasers of the Bonds and others. We have not undertaken to verify through independent investigation the accuracy of the representations and certifications relied upon by us.
The Bonds have been issued pursuant to the Mello-Roos Community Facilities Act of 1982, as amended (comprising Chapter 2.5 of Part 1 of Division 2 of Title 5 of the Government Code of the State of California), a resolution adopted by the City Council of the City, acting in its capacity as the legislative body of the District (the “City Council”) on June 12, 2024 (the “Resolution”), and a Bond Indenture (the “Indenture”) dated as of July 1, 2024, by and between the District and Wilmington Trust, National Association, as trustee (the “Trustee”).
All capitalized terms not defined herein shall have the meaning set forth in the Indenture.
Based upon our examination of the foregoing, and in reliance thereon and on all matters of fact as we deem relevant under the circumstances, and upon consideration of applicable laws, we are of the opinion that:
(1) The Bonds have been duly and validly authorized by the District and are legal, valid and binding limited obligations of the District, enforceable in accordance with their terms and the terms of the Indenture.
The Bonds are limited obligations of the District but are not a debt of the City, the State of California or any other political subdivision thereof within the meaning of any constitutional or statutory limitation, and, except for the Net Taxes, neither the faith and credit nor the taxing power of the City, the State of California, or any of its political subdivisions is pledged for the payment thereof. (2) The Indenture has been duly executed and delivered by the District. The Indenture creates a valid pledge of, and the Bonds are secured by, the Net Taxes and the amounts on deposit in certain funds and accounts established under the Indenture, as and to the extent provided in the Indenture. The Indenture is enforceable in accordance with its terms; provided, however, we express no opinion as to the enforceability of the covenant of the District contained in the Indenture to levy Special Taxes for the payment of Administrative Expenses or as to indemnification, penalty, contribution, choice of law, choice of forum or waiver provisions contained therein.
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(3) Under existing statutes, regulations, rulings and judicial decisions, interest (and original issue discount) on the Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on individuals; however, it should be noted that, with respect to applicable corporations as defined in Section 59(k) of the Internal Revenue Code of 1986, as amended (the “Code”), interest (and original issue discount) with respect to the Bonds might be taken into account in determining adjusted financial statement income for purposes of computing the alternative minimum tax imposed on such corporations.
(4) Interest (and original issue discount) on the Bonds is exempt from State of California personal income tax.
(5) The difference between the issue price of a Bond (the first price at which a substantial amount of the Bonds of a maturity are to be sold to the public) and the stated redemption price at maturity with respect to such Bond constitutes original issue discount. Original issue discount accrues under a constant yield method, and original issue discount will accrue to a Bond Owner before receipt of cash attributable to such excludable income. The amount of original issue discount deemed received by a Bond Owner will increase the Bond Owner’s basis in the applicable Bond.
(6) The amount by which a Bond Owner’s original basis for determining loss on sale or exchange in the applicable Bond (generally the purchase price) exceeds the amount payable on maturity (or on an earlier call date) constitutes amortizable Bond premium which must be amortized under Section 171 of the Code; such amortizable Bond premium reduces the Bond Owner’s basis in the applicable Bond (and the amount of taxexempt interest received), and is not deductible for federal income tax purposes. The basis reduction as a result of the amortization of Bond premium may result in a Bond Owner realizing a taxable gain when a Bond is sold by the Owner for an amount equal to or less (under certain circumstances) than the original cost of the Bond to the Owner.
The opinions expressed in paragraphs (3) and (5) above as to the exclusion from gross income for federal income tax purposes of interest (and original issue discount) on the Bonds is subject to the condition that the District and the City comply with all requirements of the Code, that must be satisfied subsequent to the issuance of the Bonds to assure that such interest (and original issue discount) will not become includable in gross income for federal income tax purposes. Failure to comply with such requirements of the Code might cause interest (and original issue discount) on the Bonds to be included in gross income for federal income tax purposes retroactive to the date of issuance of the Bonds. The District and the City have covenanted to comply with all such requirements. Except as set forth in paragraphs (3), (4), (5) and (6) above, we express no opinion as to any tax consequences related to the Bonds.
Certain agreements, requirements and procedures contained or referred to in the Indenture, the Tax Certificate executed by the District and the City and other documents related to the Bonds may be changed and certain actions may be taken or omitted, under the circumstances and subject to the terms and conditions set forth in such documents. We express no opinion as to the effect on the exclusion from gross income for federal income tax purposes of interest (and original issue discount) on any Bond if any such change occurs or action is taken or omitted upon advice or approval of bond counsel other than Stradling Yocca Carlson & Rauth LLP.
Our opinion is limited to matters governed by the laws of the State of California and federal law. We assume no responsibility with respect to the applicability or the effect of the laws of any other jurisdiction. We call attention to the fact that the rights and obligations under the Bonds, the Indenture and the Tax Certificate may be limited by bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium and other laws relating to or affecting creditors’ rights, by the application of equitable principles and the exercise of judicial discretion in appropriate cases and by the limitations on legal remedies against public agencies in the State of California.
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We express no opinion herein as to the accuracy, completeness or sufficiency of the Official Statement or other offering material relating to the Bonds and expressly disclaim any duty to advise the Owners of the Bonds with respect to matters contained in the Official Statement or other offering material.
The opinions expressed herein are based upon an analysis of existing statutes, regulations, rulings and judicial decisions and cover certain matters not directly addressed by such authorities. Such opinions may be affected by actions taken (or not taken) or events occurring (or not occurring) after the date hereof. We have not undertaken to determine, or to inform any person, whether such actions or events are taken (or not taken) or do occur (or do not occur).
Respectfully submitted,
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APPENDIX D
APPRAISAL REPORT
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APPENDIX E
SUMMARY OF THE INDENTURE
.
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APPENDIX F
FORM OF DISTRICT CONTINUING DISCLOSURE CERTIFICATE
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APPENDIX G
BOOK-ENTRY ONLY SYSTEM
The information in this Appendix concerning DTC and DTC’s book-entry only system has been obtained from sources that the District and the Underwriter believe to be reliable, but neither the District nor the Underwriter takes any responsibility for the completeness or accuracy thereof. The following description of the procedures and record keeping with respect to beneficial ownership interests in the Bonds, payment of principal, premium, if any, accreted value and interest on the Bonds to DTC Participants or Beneficial Owners, confirmation and transfers of beneficial ownership interests in the Bonds and other related transactions by and between DTC, the DTC Participants and the Beneficial Owners is based solely on information provided by DTC.
The Depository Trust Company (“DTC”), New York, NY, will act as securities depository for the Bonds.
The Bonds will be issued as fully-registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully registered bond will be issued for each annual maturity of the Bonds, each in the aggregate principal amount of such annual maturity, and will be deposited with DTC.
DTC, the world’s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934.
DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). DTC has a Standard & Poor’s rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com.
Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC’s records. The ownership interest of each actual purchaser of each Bond (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Bonds, except in the event that use of the book-entry system for the Bonds is discontinued.
To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. 877
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Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time.
Beneficial Owners of Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Bonds, such as redemptions, tenders, defaults, and proposed amendments to the Bond documents. For example, Beneficial Owners of Bonds may wish to ascertain that the nominee holding the Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them.
Redemption notices shall be sent to DTC. If less than all of the Bonds within a maturity are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such maturity to be redeemed.
Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Bonds unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the District as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).
Redemption proceeds, distributions, and dividend payments on the Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from the District or the Trustee, on payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC, the Trustee, or the District, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the District or the Trustee, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.
A Bond Owner shall give notice to elect to have its Bonds purchased or tendered, through its Participant, to the Trustee, and shall effect delivery of such Bonds by causing the Direct Participant to transfer the Participant’s interest in the Bonds, on DTC’s records, to the Trustee. The requirement for physical delivery of Bonds in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Bonds are transferred by Direct Participants on DTC’s records and followed by a book-entry credit of tendered Bonds to the Trustee’s DTC account.
DTC may discontinue providing its services as depository with respect to the Bonds at any time by giving reasonable notice to the District or the Trustee. Under such circumstances, in the event that a successor depository is not obtained, physical certificates are required to be printed and delivered.
The District may decide to discontinue use of the system of book-entry only transfers through DTC (or a successor securities depository). In that event, bonds will be printed and delivered to DTC.
THE TRUSTEE, AS LONG AS A BOOK-ENTRY ONLY SYSTEM IS USED FOR THE BONDS, WILL SEND ANY NOTICE OF REDEMPTION OR OTHER NOTICES TO OWNERS ONLY TO DTC. ANY FAILURE
OF DTC TO ADVISE ANY DTC PARTICIPANT, OR OF ANY DTC PARTICIPANT TO NOTIFY ANY
BENEFICIAL OWNER, OF ANY NOTICE AND ITS CONTENT OR EFFECT WILL NOT AFFECT THE
VALIDITY OF SUFFICIENCY OF THE PROCEEDINGS RELATING TO THE REDEMPTION OF THE BONDS CALLED FOR REDEMPTION OR OF ANY OTHER ACTION PREMISED ON SUCH NOTICE. 878
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CONTINUING DISCLOSURE CERTIFICATE
THIS CONTINUING DISCLOSURE CERTIFICATE (this “Disclosure Certificate”), dated as of July 1, 2024, is executed and delivered by Community Facilities District No. 2022-3 (Verano) of the City of Wildomar (the “District”) in connection with the issuance of the Community Facilities District No. 2022-3 (Verano) of the City of Wildomar Special Tax Bonds, Series 2024 (the “Bonds”).
The Bonds are being issued pursuant to a resolution adopted by the City Council of the City of Wildomar, acting as the legislative body of the District on June 12, 2024 and a Bond Indenture by and between the District and Wilmington Trust, National Association, as Trustee, dated as of July 1, 2024 (the “Indenture”).
The District covenants as follows:
SECTION 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered, for the benefit of the Owners and Beneficial Owners of the Bonds and in order to assist the Participating Underwriter in complying with the Rule.
SECTION 2. Definitions. In addition to the definitions set forth in the Indenture and the Rate and Method of Apportionment, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section, the following capitalized terms shall have the following meanings:
“Annual Report” shall mean any Annual Report provided by the District pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate. “Beneficial Owner” shall mean any person who (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bond (including a person holding Bond through a nominee, depository or other intermediary), or (b) is treated as the owner of any Bond for federal income purposes.
“City” shall mean the City of Wildomar, County of Riverside, California. “Disclosure Representative” shall mean the Administrative Services Director of the City, or such other officer or employee as the District shall designate in writing to the Dissemination Agent from time to time.
“Dissemination Agent” shall mean, initially, Spicer Consulting Group, LLC, or any successor Dissemination Agent designed in writing by the District. “EMMA” shall mean the Electronic Municipal Market Access System of the Municipal Securities Rulemaking Board, which can be found at www.emma.msrb.org, or any other repository of disclosure information that may be designated by the Securities and Exchange Commission in the future.
“Financial Obligation” means a (i) debt obligation; (ii) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (iii) guarantee of (i) or (ii). The term Financial Obligation shall not include municipal 879
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securities as to which a final official statement has been provided to the MSRB consistent with the Rule.
“Listed Events” shall mean any of the events listed in Section 5 of this Disclosure Certificate. “MSRB” shall mean the Municipal Securities Rulemaking Board or any other entity designated or authorized by the Securities and Exchange Commission to receive reports pursuant to the Rule.
Until otherwise designated by the MSRB or the Securities and Exchange Commission, filings with the MSRB are to be made through the Electronic Municipal Market Access (EMMA) website of the MSRB, currently located at http://emma.msrb.org.
“Official Statement” shall mean the District’s official statement with respect to the Bonds. “Participating Underwriter” shall mean Stifel, Nicolaus & Company, Incorporated. “Rate and Method of Apportionment” means that certain Rate and Method of Apportionment of Special Tax approved pursuant to the Resolution of Formation. “Resolution of Formation” means the resolutions adopted by the City Council pursuant to which the City Council formed the District and undertook certain change proceedings with respect to the District.
“Rule” shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time.
SECTION 3. Provision of Annual Reports.
(a) Not later than March 31 of each year commencing March 31, 2025, the District shall, or shall cause the Dissemination Agent to, provide to EMMA and the Participating Underwriter an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Certificate. If the Dissemination Agent is other than the District, then not later than 15 business days prior to the date referred to in the prior sentence hereof, the District shall provide the Annual Report (in a form suitable for filing with EMMA) to the Dissemination Agent. The Annual Report may be submitted as a single document or as separate documents comprising a package and may include by reference other information as provided in Section 4 of this Disclosure Certificate; provided that the audited financial statements of the District may be submitted separately from and later than the balance of the Annual Report, if any, if they are not available by the date required above for the filing of the Annual Report. (b) In the event that the Dissemination Agent is an entity other than the District, then the provisions of this Section 3(b) shall apply. Not later than fifteen (15) Business Days prior to the date specified in subsection (a) for providing the Annual Report, the District shall provide the Annual Report to the Dissemination Agent. If by fifteen (15) Business Days prior to the due date for an Annual Report the Dissemination Agent has not received a copy of the Annual Report, the Dissemination Agent shall contact the District to determine if the District will be filing the Annual Report in compliance with subsection (a). The District shall provide a written certification with each Annual Report furnished to the Dissemination Agent to the effect that such Annual Report constitutes the Annual Report required to be furnished by it hereunder. The Dissemination Agent may conclusively rely upon such certification of the District and shall have no duty or obligation to review such Annual Report.
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(c) If the Dissemination Agent is other than the District and if the Dissemination Agent is unable to verify that an Annual Report has been provided to EMMA by the date required in subsection (a), the Dissemination Agent shall send a notice in a timely manner to EMMA, in the form required by EMMA. If the District acts as its own Dissemination Agent, it shall file a notice with EMMA no later than the date specified in subsection (a) for filing an Annual Report if the District fails to file the Annual Report by that date.
(d) If the Dissemination Agent is other than the District, the Dissemination Agent shall:
(i) determine each year prior to the date for providing the Annual Report the name and address of the repository if other than the MSRB through EMMA; and (ii) promptly after receipt of the Annual Report, file a report with the District certifying that the Annual Report has been provided to EMMA and the date it was provided. (e) Notwithstanding any other provision of this Disclosure Certificate, all filings shall be made in accordance with the MSRB’s EMMA system or in another manner approved under the Rule.
SECTION 4. Content of Annual Reports. The District’s Annual Reports shall contain or include by reference:
(a) Financial Statements. The audited financial statements of the District, if any, for the prior fiscal year, prepared in accordance with generally accepted accounting principles as promulgated to apply to governmental entities from time to time by the Governmental Accounting Standards Board.
If the District’s audited financial statements, if any are prepared, are not available by the time the Annual Report is required to be filed pursuant to Section 3, the Annual Report shall contain unaudited financial statements, and the audited financial statements shall be filed in the same manner as the Annual Report when they come available.
(b) Financial and Operating Data. The District’s Annual Report shall contain or incorporate by reference the following:
(i) the principal amount of Bonds outstanding as of the September 2 preceding the filing of the Annual Report;
(ii) the balance in each fund under the Indenture as of the September 2 preceding the filing of the Annual Report;
(iii) the aggregate assessed valuation of the Taxable Property within the District; (iv) any changes to the Rate and Method of Apportionment of the Special Tax approved or submitted to the qualified electors for approval prior to the filing of the Annual Report; (v) a table setting forth the annual Special Tax delinquency rate within the District at June 30 for each fiscal year on which a delinquency exists, listing for each fiscal year the total Special Tax levy, the amount delinquent and the percent delinquent; 881
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(vi) the status of any foreclosure actions being pursued by the District with respect to delinquent Special Taxes within the District; and
(vii) an update of the value-to-lien of the property within the District based on the assessed value and the Special Tax levy for then current fiscal year, which update may be provided in a form similar to Table 2 in the Official Statement; provided that such update need not include overlapping special tax, assessment or general obligation indebtedness. (c) Any or all of the items listed in (a) or (b) above may be included by specific reference to other documents, including official statements of debt issues of the District or related public entities, which have been submitted to EMMA or the Securities and Exchange Commission. If the document included by reference is a final official statement, it must be available from the MSRB through EMMA.
The District shall clearly identify each such other document so included by reference.
SECTION 5. Reporting of Significant Events.
(a) Pursuant to the provisions of this Section 5, the District shall give, or cause the Dissemination Agent to give, notice to EMMA in a timely manner not in excess of ten (10) business days after the occurrence of any of the following events with respect to the Bonds:
1. principal and interest payment delinquencies;
2. unscheduled draws on debt service reserves reflecting financial difficulties;
3. unscheduled draws on credit enhancements reflecting financial difficulties;
4. substitution of credit or liquidity providers, or their failure to perform;
5. adverse tax opinions or the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB);
6. defeasances;
7. tender offers;
8. bankruptcy, insolvency, receivership or similar proceedings of the obligated person;
9. ratings changes; and
10. default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a Financial Obligation of the obligated person, any of which reflect financial difficulties.
(b) Additionally, the District shall give or cause the Dissemination Agent to give notice to EMMA in a timely manner not in excess of ten (10) business days after the occurrence of any of the following events with respect to the Bonds, if material:
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1. unless described in paragraph 5(a)(5), notices or determinations by the Internal Revenue Service with respect to the tax status of the Bonds or other material events affecting the tax status of the Bonds;
2. merger, consolidation, or acquisition involving the obligated person, or the sale of all or substantially all of the assets of the obligated person other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms;
2. appointment of a successor or additional fiscal agent or the change of the name of a fiscal agent;
3. nonpayment related defaults;
4. modifications to the rights of Bondholders;
5. bond calls;
6. release, substitution or sale of property securing repayment of the Bonds; and
7. incurrence of a Financial Obligation of the obligated person, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a Financial Obligation of the obligated person, any of which affect security holders.
(c) In the event that the District’s fiscal year changes, the District shall report or shall instruct the Dissemination Agent to report such change in the same manner and to the same parties as Listed Events would be reported pursuant to Section 5(a)..
(d) The District hereby agrees that the undertaking set forth in this Disclosure Certificate is the responsibility of the District, and the Dissemination Agent, if other than the District, shall not be responsible for determining whether the District’s instructions to the Dissemination Agent under this Section comply with the requirements of the Rule.
SECTION 6. Termination of Reporting Obligation. The obligations of the District and the Dissemination Agent under this Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds. If such termination occurs prior to the final maturity of the Bonds, the District shall give notice of such termination in the same manner as for a Listed Event under Section 5.
SECTION 7. Dissemination Agent. The District may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under the Disclosure Certificate, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. The initial Dissemination Agent shall be Spicer Consulting Group, LLC. The Dissemination Agent may resign by providing (i) thirty days written notice to the District, and (ii) upon appointment of a new Dissemination Agent hereunder.
883
6 4853-8429-0490/200945-0005
SECTION 8. Amendment.
(a) This Disclosure Certificate may be amended, by written agreement of the parties, without the consent of the Owners, and any provision of this Disclosure Certificate may be waived, if all of the following conditions are satisfied: (1) such amendment or waiver is made in connection with a change in circumstances that arises from a change in legal (including regulatory) requirements, a change in law, or a change in the identity, nature or status of the District or the type of business conducted thereby, (2) the undertakings in this Disclosure Certificate as so amended or waived would, in the opinion of a nationally recognized bond counsel, have complied with the requirements of the Rule as of the date of this Disclosure Certificate, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances, and (3) the amendment or waiver either (i) is approved by the Owners of the Bonds in the same manner as provided in the Indenture for amendments to the Indenture with the consent of Owners or (ii) does not, in the determination of the District, materially impair the interests of the Owners or Beneficial Owners of the Bonds. (b) To the extent any amendment to this Disclosure Certificate results in a change in the type of financial information or operating data provided pursuant to this Disclosure Certificate, the first Annual Report provided thereafter shall include a narrative explanation of the reasons for the amendment and the impact of the change in the type of operating data or financial information being provided.
(c) If an amendment is made to the basis on which financial statements are prepared, the Annual Report for the year in which the change is made shall present a comparison between the financial statements or information prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. Such comparison shall include a quantitative and, to the extent reasonably feasible, qualitative discussion of the differences in the accounting principles and the impact of the change in the accounting principles on the presentation of the financial information.
SECTION 9. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the District from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Certificate. If the District chooses to include any information in any Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Certificate, the District shall have no obligation under this Agreement to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event.
SECTION 10. Default. In the event of a failure of the District or the Dissemination Agent to comply with any provision of this Disclosure Certificate, any Owner or Beneficial Owner of the Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the District and/or the Dissemination Agent to comply with their respective obligations under this Disclosure Certificate. A default under this Disclosure Certificate shall not be deemed an Event of Default under the Indenture, and the sole remedy under this Disclosure Certificate in the event of any failure of the District or the Dissemination Agent to comply with this Disclosure Certificate shall be an action to compel performance. 884
7 4853-8429-0490/200945-0005
SECTION 11. Duties, Immunities and Liabilities of Dissemination Agent. Where an entity other than the District is acting as the Dissemination Agent, the Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and the District agrees to indemnify and save the Dissemination Agent and its officers, directors, employees and agents, harmless against any loss, expense and liabilities which they may incur arising out of or in the exercise or performance of their powers and duties hereunder, including the costs and expenses (including attorney’s fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent’s negligence or willful misconduct. Any Dissemination Agent shall be paid (i) compensation by the District for its services provided hereunder in accordance with a schedule of fees to be mutually agreed to; and (ii) all expenses, legal fees and advances made or incurred by the Dissemination Agent in the performance of its duties hereunder. The Dissemination Agent shall have no duty or obligation to review any information provided to it by the District pursuant to this Disclosure Certificate. The obligations of the District under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds. No person shall have any right to commence any action against the Dissemination Agent seeking any remedy other than to compel specific performance of this Disclosure Certificate. The Dissemination Agent shall not be liable under any circumstances for monetary damages to any person for any breach under this Disclosure Certificate.
SECTION 12. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the District, the Dissemination Agent, the Participating Underwriter and Owners and Beneficial Owners from time to time of the Bonds; and it shall create no rights in any other person or entity.
SECTION 13. Merger. Any person succeeding to all or substantially all of the Dissemination Agent’s corporate trust business shall be the successor Dissemination Agent without the filing of any paper or any further act.
This Disclosure Certificate is executed as of the date and year first set forth above.
COMMUNITY FACILITIES DISTRICT NO. 2022-3
(VERANO) OF THE CITY OF WILDOMAR
By:
Heidi Schrader
Disclosure Representative
885
Anzel Galvan Draft of 5-28-2024
$[PAR]
COMMUNITY FACILITIES DISTRICT NO. 2022-3 (VERANO)
OF THE CITY OF WILDOMAR
SPECIAL TAX BONDS, SERIES 2024
BOND PURCHASE AGREEMENT
[Pricing Date]
Community Facilities District No. 2022-3 (Verano)
of the City of Wildomar
23873 Clinton Keith Road, Suite 110,
Wildomar, California 92595
Attention: City Manager
Ladies and Gentlemen:
Stifel, Nicolaus & Company, Incorporated, as underwriter (the “Underwriter”), acting not as a fiduciary or agent for you, but on behalf of itself, offers to enter into this Bond Purchase Agreement (this “Purchase Agreement”) with Community Facilities District No. 2022-3 (Verano) the City of Wildomar (the “Community Facilities District”), which upon acceptance will be binding upon the Underwriter and the Community Facilities District. The agreement of the Underwriter to purchase the Bonds (as hereinafter defined) is contingent upon the Community Facilities District satisfying all of the obligations imposed upon it under this Purchase Agreement. This offer is made subject to the Community Facilities District’s acceptance by the execution of this Purchase Agreement and its delivery to the Underwriter at or before 11:59 p.m., local time, on the date hereof, and, if not so accepted, will be subject to withdrawal by the Underwriter upon notice delivered to the Community Facilities District at any time prior to the acceptance hereof by the Community Facilities District. All capitalized terms used herein, which are not otherwise defined, shall have the meaning provided for such terms in the Bond Indenture, dated as of June 1, 2024 (the “Indenture”), by and between the Community Facilities District and Wilmington Trust, National Association, as trustee (the “Trustee”).
1. Purchase, Sale and Delivery of the Bonds.
Subject to the terms and conditions and in reliance upon the representations, warranties and agreements set forth herein, the Underwriter hereby agrees to purchase from the Community Facilities District and the Community Facilities District hereby agrees to sell to the Underwriter all (but not less than all) of the $[PAR] aggregate principal amount of Community Facilities District No. 2022-3 (Verano) the City of Wildomar Special Tax Bonds, Series 2024 (the “Bonds”), dated the Closing Date (as hereinafter defined), bearing interest at the rates and maturing on the dates and in the principal amounts set forth in Exhibit A hereto. The purchase price for the Bonds shall be $___________ (being 100% of the aggregate principal amount thereof, plus original issue premium of $___________ and less an Underwriter’s discount of $___________).
2. The Bonds. The Bonds shall be substantially in the form described in, shall be issued and secured under the provisions of, and shall be payable from the Net Taxes and certain other funds 886
2 pledged therefor as provided in, the Indenture, the Preliminary Official Statement (as hereinafter defined), and the Mello-Roos Community Facilities Act of 1982, as amended (Section 53311 et seq. of the Government Code of the State of California (the “State”)) (the “Community Facilities District Act”). The issuance of the Bonds has been duly authorized by the City Council of the City of Wildomar (the “City”), as the legislative body for the Community Facilities District, pursuant to a resolution adopted on June 12, 2024 (the “Community Facilities District Resolution of Issuance”).
The proceeds of the Bonds will be used to (i) finance certain public improvements needed with respect to the development of property located within the District, including public improvements to be owned by the City, water and sewer facilities to be owned and operated by the Elsinore Valley Municipal Water District and school facilities to be owned and operated by the Lake Elsinore Unified School District; (ii) fund a reserve account for the Bonds; (iii) fund capitalized interest on the Bonds through September 1, 2024; and (iv) pay costs of issuance for the Bonds
3. Public Offering and Establishment of Issue Price.
A. The Underwriter agrees to make a bona fide public offering of all of the Bonds initially at the public offering prices (or yields) set forth in Exhibit A attached hereto and incorporated herein by reference. Subsequent to the initial public offering, the Underwriter reserves the right to change the public offering prices (or yields) as it deems necessary in connection with the marketing of the Bonds subject to this Section 3, provided that the Underwriter shall not change the interest rates set forth in Exhibit A. The Bonds will be offered and sold to certain dealers at prices lower than such initial offering prices.
The Community Facilities District hereby acknowledges that the Underwriter is entering into this Purchase Agreement in reliance on the representations, warranties and agreements made by the Community Facilities District herein, and the Community Facilities District shall take all action necessary to enforce its rights hereunder for the benefit of the Underwriter and shall immediately notify the Underwriter if it becomes aware that any representation, warranty or agreement made by the Community Facilities District herein is incorrect in any material respect.
The Community Facilities District knowledges and agrees that with respect to the transaction contemplated hereby: (i) the Underwriter is not acting as a municipal advisor within the meaning of Section 15B of the Securities Exchange Act, as amended; (ii) the primary role of the Underwriter, as an underwriter, is to purchase securities, for resale to investors, in an arm’s length commercial transaction between the Community Facilities District and the Underwriter and the Underwriter has financial and other interests that differ from those of the Community Facilities District; (iii) the Underwriter is acting solely as a principal and is not acting as a municipal advisor, financial advisor or fiduciary to the Community Facilities District and has not assumed any advisory or fiduciary responsibility to the Community Facilities District (irrespective of whether the Underwriter has provided other services or is currently providing other services to the Community Facilities District on other matters); (iv) the only obligations the Underwriter has to the Community Facilities District with respect to the transaction contemplated hereby are expressly set forth in this Purchase Agreement; and (v) the Community Facilities District has consulted its own financial and/or municipal, legal, accounting, tax and other advisors, as applicable, to the extent it has deemed appropriate. The Community Facilities District acknowledges that it has previously provided the Underwriter with an acknowledgement of receipt of the required Underwriter disclosure under Rule G-17 of the Municipal Securities Rulemaking Board (“MSRB”). The Community Facilities District further acknowledges and represents that it has engaged CSG Advisors Incorporated (the “Municipal Advisor”) as its municipal 887
3 advisor within the meaning of Section 15B of the Securities Exchange Act, as amended, and will rely solely on the financial advice of the Municipal Advisor with respect to the Bonds.
B. The Underwriter agrees to assist the Community Facilities District in establishing the issue price of the Bonds and shall execute and deliver to the Community Facilities District at Closing (as defined below) an “issue price” or similar certificate, together with the supporting pricing wires or equivalent communications, substantially in the form set forth in Exhibit C, with such modifications as may be appropriate or necessary, in the reasonable judgment of the Underwriter, the Community Facilities District and Bond Counsel (as such term is defined below), to accurately reflect, as applicable, the sales price or prices or the initial offering price or prices to the public of the Bonds. All actions to be taken by the Community Facilities District under this section to establish the issue price of the Bonds may be taken on behalf of the Community Facilities District by the Municipal Advisor and any notice or report to be provided to the Community Facilities District may be provided to the Municipal Advisor.
C. Except as otherwise set forth in Exhibit A, the Community Facilities District will treat the first price at which 10% of each maturity of the Bonds (the “10% test”), identified under the column “10% Test Used” in Exhibit A, is sold to the public as the issue price of that maturity. At or promptly after the execution of this Purchase Agreement, the Underwriter shall report to the Community Facilities District the price or prices at which it has sold to the public each maturity of Bonds. If at that time the 10% test has not been satisfied as to any maturity of the Bonds, the Underwriter agrees to promptly report to the Community Facilities District the prices at which it sells the unsold Bonds of that maturity to the public. That reporting obligation shall continue, whether or not the Closing Date has occurred, until either: (i) the Underwriter has sold all of the Bonds of that maturity; or (ii), the 10% test has been satisfied as to the Bonds of that maturity, provided that, the Underwriter’s reporting obligation after the Closing Date may be at reasonable periodic intervals or otherwise upon the request of the Community Facilities District or Bond Counsel. For purposes of this Section, if Bonds mature on the same date but have different interest rates, each separate CUSIP number within that maturity will be treated as a separate maturity of the Bonds. For clarity, and notwithstanding any other condition to Closing set forth in this Purchase Agreement, the sale of 10% of each maturity of the Bonds to the public prior to the Closing Date shall not be a condition to Closing.
D. The Underwriter confirms that it has offered the Bonds to the public on or before the date of this Purchase Agreement at the offering price or prices (the “initial offering price”), or at the corresponding yield or yields, set forth in Exhibit A, except as otherwise set forth therein.
Exhibit A also sets forth, identified under the column “Hold the Offering Price Rule Used,” as of the date of this Purchase Agreement, the maturities, if any, of the Bonds for which the 10% test has not been satisfied and for which the Community Facilities District and the Underwriter agree that the restrictions set forth in the next sentence shall apply, which will allow the Community Facilities District to treat the initial offering price to the public of each such maturity as of the sale date as the issue price of that maturity (the “hold-the-offering-price rule”). So long as the hold-the-offering-price rule remains applicable to any maturity of the Bonds, the Underwriter will neither offer nor sell unsold Bonds of that maturity to any person at a price that is higher than the initial offering price to the public during the period starting on the sale date and ending on the earlier of the following:
1. the close of the fifth (5th) business day after the sale date; or
2. the date on which the Underwriter has sold at least 10% of that maturity of the Bonds to the public at a price that is no higher than the initial offering price to the public. 888
4 The Underwriter will advise the Community Facilities District promptly after the close of the fifth (5th) business day after the sale date whether it has sold 10% of that maturity of the Bonds to the public at a price that is no higher than the initial offering price to the public.
E. The Underwriter confirms that:
(1) any selling group agreement and any third-party distribution agreement relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain language obligating each dealer who is a member of the selling group, and each brokerdealer that is a party to such third-party distribution agreement, as applicable, (A) (i) to report the prices at which it sells to the public the unsold Bonds of each maturity allocated to it, whether or not the Closing Date has occurred, until either all Bonds of that maturity allocated to it have been sold or it is notified by the Underwriter that the 10% test has been satisfied as to the Bonds of that maturity, provided that, the reporting obligation after the Closing Date may be at reasonable periodic intervals or otherwise upon request of the Underwriter, and (ii) to comply with the hold-the-offering-price rule, if applicable, if and for so long as directed by the Underwriter; (B) to promptly notify the Underwriter of any sales of Bonds that, to its knowledge, are made to a purchaser who is a related party to an underwriter participating in the initial sale of the Bonds to the public (each such term being used as defined below), and (C) to acknowledge that, unless otherwise advised by the dealer or broker-dealer, the Underwriter shall assume that each order submitted by the dealer or broker-dealer is a sale to the public; and
(2) any selling group agreement relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain language obligating each dealer that is a party to a third-party distribution agreement to be employed in connection with the initial sale of the Bonds to the public to require each broker-dealer that is a party to such third-party distribution agreement to (A) report the prices at which it sells to the public the unsold Bonds of each maturity allocated to it, whether or not the Closing Date has occurred, until either all Bonds of that maturity allocated to it have been sold or it is notified by the Underwriter or the dealer that the 10% test has been satisfied as to the Bonds of that maturity, provided that, the reporting obligation after the Closing Date may be at reasonable periodic intervals or otherwise upon request of the Underwriter or the dealer and (B) comply with the hold-the-offering-price rule, if applicable, if and for so long as directed by the Underwriter or the dealer and as set forth in the related pricing wires.
F. The Community Facilities District acknowledges that, in making the representations set forth in this Section, the Underwriter will rely on (i) in the event a selling group has been created in connection with the initial sale of the Bonds to the public, the agreement of each dealer who is a member of the selling group to comply with the requirements for establishing issue price of the Bonds, including, but not limited to, its agreement to comply with the hold-the-offering-price rule, if applicable to the Bonds, as set forth in a selling group agreement and the related pricing wires, and (ii) in the event that a third-party distribution agreement was employed in connection with the initial sale of the Bonds to the public, the agreement of each broker-dealer that is a party to such agreement to comply with the requirements for establishing issue price of the Bonds, including, but not limited to, its agreement to comply with the hold-the-offering-price rule, if applicable to the Bonds, as set forth in the third-party distribution agreement and the related pricing wires. The Community Facilities District further acknowledges that the Underwriter shall not be liable for the failure of any dealer who is a member of a selling group, or of any broker-dealer that is a party to a third-party distribution agreement, to comply with its corresponding agreement to comply with the requirements for 889
5 establishing issue price of the Bonds, including, but not limited to, its agreement to comply with the hold-the-offering-price rule, if applicable to the Bonds.
G. The Underwriter acknowledges that sales of any Bonds to any person that is a related party to an underwriter participating in the initial sale of the Bonds to the public (each such term being used as defined below) shall not constitute sales to the public for purposes of this section.
Further, for purposes of this section:
1. “public” means any person other than an underwriter or a related party;
2. “underwriter” means (A) any person that agrees pursuant to a written contract with the Community Facilities District (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the public and (B) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (A) to participate in the initial sale of the Bonds to the public (including a member of a selling group or a party to a third party distribution agreement participating in the initial sale of the Bonds to the public);
3. a purchaser of any of the Bonds is a “related party” to an underwriter if the underwriter and the purchaser are subject, directly or indirectly, to (A) more than 50% common ownership of the voting power or the total value of their stock, if both entities are corporations (including direct ownership by one corporation of another), (B) more than 50% common ownership of their capital interests or profits interests, if both entities are partnerships (including direct ownership by one partnership of another), or (C) more than 50% common ownership of the value of the outstanding stock of the corporation or the capital interests or profit interests of the partnership, as applicable, if one entity is a corporation and the other entity is a partnership (including direct ownership of the applicable stock or interests by one entity of the other); and
4. “sale date” means the date of execution of this Purchase Agreement by all parties.
4. The Official Statement.
A. Pursuant to the authorization of the Community Facilities District, the Underwriter has distributed copies of the Preliminary Official Statement dated [POS Date], relating to the Bonds, which, together with the cover page, inside cover page and appendices thereto is herein called the “Preliminary Official Statement.” By its acceptance of this Purchase Agreement, the Community Facilities District hereby ratifies the use by the Underwriter of the Preliminary Official Statement, and the Community Facilities District agrees to execute a final official statement relating to the Bonds (the “Official Statement”) which will consist of the Preliminary Official Statement with such changes as may be made thereto, with the approval of Stradling Yocca Carlson & Rauth LLP, as Bond Counsel (“Bond Counsel”), and as Disclosure Counsel (“Disclosure Counsel”), and the Underwriter, and to provide copies thereof to the Underwriter as set forth herein. The Community Facilities District hereby authorizes the Underwriter to use and promptly distribute, in connection with the offer and sale of the Bonds, the Preliminary Official Statement, the Official Statement and any supplement or amendment thereto. The Community Facilities District further authorizes the Underwriter to use and distribute, in connection with the offer and sale of the Bonds, the Indenture, the Continuing Disclosure Certificate executed by the Community Facilities District in connection with the Bonds (the “Continuing Disclosure Certificate”), this Purchase Agreement and all information contained herein, and all other documents, certificates and statements furnished by or on behalf of the 890
6 Community Facilities District to the Underwriter in connection with the transactions contemplated by this Purchase Agreement. This Purchase Agreement, the Indenture, the Bonds, and the Continuing Disclosure Certificate are collectively referred to herein as the “Community Facilities District Documents.”
B. To assist the Underwriter in complying with Securities and Exchange Commission Rule 15c2-12(b)(5) (the “Rule”), the Community Facilities District will undertake pursuant to the Continuing Disclosure Certificate, in the form attached as Appendix G to the Official Statement, to provide annual reports and notices of certain enumerated events. A description of this undertaking is set forth in the Preliminary Official Statement and will also be set forth in the Official Statement.
5. Closing. Except as the Underwriter and the Community Facilities District may otherwise agree, the Community Facilities District will deliver to the Underwriter, at the offices of Bond Counsel in Newport Beach, California, or at such other location as may be mutually agreed upon by the Underwriter and the Community Facilities District, the documents hereinafter mentioned; and the Community Facilities District will deliver to the Underwriter through the facilities of The Depository Trust Company (“DTC”), the Bonds, in definitive form (all Bonds bearing CUSIP numbers), duly executed by the Community Facilities District and authenticated by the Trustee in the manner provided for in the Indenture and the Community Facilities District Act at 8:30 a.m. California time, on [Closing Date] (the “Closing Date”), and the Underwriter will accept such delivery and pay the purchase price of the Bonds as set forth in paragraph (A) of this Section by wire transfer, payable in federal or other immediately available funds (such delivery and payment being herein referred to as the “Closing”). The Bonds shall be in fully registered book-entry form (which may be typewritten) and shall be registered in the name of Cede & Co., as nominee of DTC. The Bonds shall be made available to the Underwriter at least one (1) business day before the Closing Date for purposes of inspection.
6. Representations, Warranties and Covenants of the Community Facilities District. The Community Facilities District represents, warrants and covenants to the Underwriter on behalf of itself and the City that:
A. The City is duly organized and validly existing as a general law city under the Constitution and laws of the State and has duly authorized the formation of the Community Facilities District, the incurring of bonded indebtedness thereby pursuant to resolutions duly adopted by the City Council (collectively, the “Community Facilities District Formation Resolutions” and, together with the Community Facilities District Resolution of Issuance, the “Community Facilities District Resolutions”) and the Community Facilities District Act. The City Council, as the legislative body of the City and the Community Facilities District, has duly adopted the Community Facilities District Formation Resolutions and an ordinance of the City Council levying Special Tax within the Community Facilities District (the “Ordinance”), and has caused to be recorded in the real property records of the County of Riverside, a notice of special tax lien, and any required amendments thereof (collectively, the “Notice of Special Tax Lien” and, together with the Community Facilities District Formation Resolutions and the Ordinance, the “Formation Documents”), and has duly adopted the Community Facilities District Resolution of Issuance. Each of its Formation Documents remains in full force and effect as of the date hereof and has not been amended or rescinded. The Community Facilities District is duly organized and validly existing as a community facilities district under the laws of the State. The Community Facilities District has, and at the Closing Date will have, as the case may be, full legal right, power and authority: (i) to execute, deliver and perform its obligations under 891
7 the Community Facilities District Documents, and to carry out all transactions contemplated by each of such agreements; (ii) to issue, sell and deliver the Bonds as provided herein; and (iii) to carry out, give effect to and consummate the transactions contemplated by the Formation Documents, the Community Facilities District Documents and the Official Statement.
B. The Community Facilities District and the City, as applicable, have each complied, and will at the Closing Date be in compliance in all material respects, with the Formation Documents and the Community Facilities District Documents, and any immaterial noncompliance by the Community Facilities District and the City, if any, will not impair the ability of the Community Facilities District and the City, as applicable, to carry out, give effect to or consummate the transactions contemplated by the foregoing. From and after the date of issuance of the Bonds, the Community Facilities District will continue to comply with the covenants of the Community Facilities District contained in the Community Facilities District Documents.
C. The information in the Preliminary Official Statement and in the Official Statement relating to the Community Facilities District, the City and the Bonds (other than statements pertaining to the book-entry system, as to which no view is expressed), is true and correct in all material respects and does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; and, upon delivery and up to and including 25 days after the End of the Underwriting Period (as defined in paragraph (D) below), the Official Statement will be amended and supplemented so as to contain no misstatement of any material fact or omission of any statement necessary to make the statements contained therein, in the light of the circumstances in which such statements were made, not misleading.
D. Up to and including 25 days after the End of the Underwriting Period, the Community Facilities District will advise the Underwriter promptly of any proposal to amend or supplement the Official Statement and will not affect or consent to any such amendment or supplement without the consent of the Underwriter, which consent will not be unreasonably withheld. The Community Facilities District will advise the Underwriter promptly of the institution of any proceedings known to it by any governmental agency prohibiting or otherwise materially affecting the use of the Official Statement in connection with the offering, sale or distribution of the Bonds. As used herein, the term “End of the Underwriting Period” means the later of such time as: (i) the Bonds are delivered to the Underwriter; or (ii) the Underwriter does not retain, directly or as a member of an underwriting syndicate, an unsold balance of the Bonds for sale to the public. Unless the Underwriter gives notice to the contrary, the End of the Underwriting Period shall be deemed to be the Closing Date. Any notice delivered pursuant to this provision shall be written notice delivered to the Community Facilities District at or prior to the Closing Date, and shall specify a date (other than the Closing Date) to be deemed the “End of the Underwriting Period.” E. Except as described in the Preliminary Official Statement, the Community Facilities District is not, in any respect material to the transactions referred to herein or contemplated hereby, in breach of or in default under, any law or administrative rule or regulation of the State, the United States of America, or of any department, division, agency or instrumentality of either thereof, or under any applicable court or administrative decree or order, or under any loan agreement, note, resolution, indenture, contract, agreement or other instrument to which the Community Facilities District is a party or is otherwise subject or bound, and the performance of its obligations under the Community Facilities District Documents and compliance with the provisions of each thereof, or the performance of the conditions precedent to be performed by the Community Facilities District pursuant 892
8 to this Purchase Agreement, will not conflict with or constitute a breach of or default under any applicable law or administrative rule or regulation of the State, the United States of America, or of any department, division, agency or instrumentality of either thereof, or under any applicable court or administrative decree or order, or under any loan agreement, note, resolution, indenture, contract, agreement or other instrument to which the Community Facilities District is a party or is otherwise subject or bound, in any manner which would materially and adversely affect the performance by the Community Facilities District of its obligations under the Community Facilities District Documents or the performance of the conditions precedent to be performed by the Community Facilities District pursuant to this Purchase Agreement.
F. Except as may be required under the “blue sky” or other securities laws of any jurisdiction, all approvals, consents, authorizations, elections and orders of, or filings or registrations with, any governmental authority, board, agency or commission having jurisdiction which would constitute a condition precedent to, or the absence of which would materially adversely affect, the performance by the Community Facilities District of its obligations under the Community Facilities District Documents, and the performance of the conditions precedent to be performed by the Community Facilities District pursuant to this Purchase Agreement, have been or will be obtained at the Closing Date and are or will be in full force and effect at the Closing Date.
G. The Community Facilities District Documents conform as to form and tenor to the descriptions thereof contained in the Official Statement.
H. The Bonds are payable from the Net Taxes of the Community Facilities District, as set forth in the Indenture, the levy of which has been duly and validly authorized pursuant to the Community Facilities District Act and the Special Tax within the Community Facilities District will be fixed and levied in an amount which, together with other available funds, is required for the payment of the principal of, and interest on, the Bonds when due and payable, all as provided in the Indenture. The Community Facilities District has covenanted to cause the Special Tax to be levied and collected at the same time and in the same manner as ordinary ad valorem property taxes or in such other manner as the City Council shall determine.
I. The Indenture creates a valid first pledge of and lien on the Net Taxes of the Community Facilities District, and in the moneys in the Special Tax Fund, including the Reserve Account therein (the “Reserve Account”), established pursuant to the Indenture, on the terms and conditions set forth in the Indenture.
J. Except as disclosed in the Preliminary Official Statement, there are, to the best of the Community Facilities District’s knowledge, no entities with outstanding assessment liens against any of the properties within the Community Facilities District or which are senior to or on a parity with the Special Tax of the Community Facilities District.
K. The information contained in the Preliminary Official Statement and in the Official Statement (other than statements therein pertaining to the DTC and its book-entry system, as to which no view is expressed) is true and correct in all material respects and such information does not and shall not contain any untrue or misleading statement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.
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9 L. The Preliminary Official Statement was deemed final by a duly authorized officer of the Community Facilities District prior to its delivery to the Underwriter, except for the omission of such information as is permitted to be omitted in accordance with paragraph (b)(1) of the Rule. The Community Facilities District hereby covenants and agrees that, within seven (7) business days from the date hereof, or upon reasonable written notice from the Underwriter within sufficient time to accompany any confirmation requesting payment from any customers of the Underwriter, the Community Facilities District shall cause a final printed form of the Official Statement to be delivered to the Underwriter in sufficient quantity to comply with Rule 15c2-12, rules of the MSRB and to meet potential customer requests for copies of the Official Statement.
M. At the time of acceptance hereof there is and as of the Closing there will be no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, government agency, public board or body (collectively and individually, an “Action”) pending (notice of which has been served on the City or the Community Facilities District) or to the best knowledge of the Community Facilities District or the City threatened, in which any such Action: (i) in any way questions the existence of the Community Facilities District or the titles of the officers of the Community Facilities District to their respective offices; (ii) affects, contests or seeks to prohibit, restrain or enjoin the issuance or delivery of the Bonds or the payment or collection of Special Tax or any amounts pledged or to be pledged to pay the principal of and interest on the Bonds, or in any way contests or affects the validity of the Community Facilities District Documents or the consummation of the transactions on the part of the Community Facilities District contemplated thereby; (iii) contests the exemption of interest on the Bonds from federal or State income taxation or contests the powers of the Community Facilities District which may result in any material adverse change relating to the financial condition of the Community Facilities District; or (iv) contests the completeness or accuracy of the Preliminary Official Statement or the Official Statement or any supplement or amendment thereto or asserts that the Preliminary Official Statement or the Official Statement contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and as of the time of acceptance hereof there is and, as of the Closing Date, there will be no basis for any action, suit, proceeding, inquiry or investigation of the nature described in clauses (i) through (iv) of this sentence.
N. Any certificate signed on behalf of the Community Facilities District by any officer or employee of the Community Facilities District authorized to do so shall be deemed a representation and warranty by the Community Facilities District to the Underwriter on behalf of itself and the Community Facilities District as to the statements made therein.
O. At or prior to the Closing, the Community Facilities District will have duly authorized, executed and delivered the Continuing Disclosure Certificate in substantially the form attached as Appendix G to the Official Statement. Based upon a review of its previous undertakings, and except as disclosed in the Preliminary Official Statement, the City and its related entities, including the Community Facilities District, have not failed to comply in all material respects with any previous undertakings with regard to the Rule to provide annual reports or notices of enumerated events in the last five years.
P. The Community Facilities District will apply the proceeds of the Bonds in accordance with the Indenture and as described in the Preliminary Official Statement and Official Statement.
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10 Q. Until such time as moneys have been set aside in an amount sufficient to pay all then outstanding Bonds at maturity or to the date of redemption if redeemed prior to maturity, plus unpaid interest thereon and premium, if any, to maturity or to the date of redemption if redeemed prior to maturity, the Community Facilities District will faithfully perform and abide by all of the covenants, undertakings and provisions contained in the Indenture.
R. Between the date of this Purchase Agreement and the date of Closing, the Community Facilities District will not offer or issue any bonds, notes or other obligations for borrowed money not previously disclosed to the Underwriter.
S. The City, on behalf of the Community Facilities District, has adopted local debt policies in accordance with Section 8855(i) of the California Government Code.
The Community Facilities District hereby approves the preparation and distribution of the Official Statement, consisting of the Preliminary Official Statement with such changes as are noted thereon and as may be made thereto, with the approval of Bond Counsel, Disclosure Counsel and the Underwriter, from time to time prior to the Closing Date.
The Community Facilities District hereby ratifies any prior use of and authorizes the future use by the Underwriter, in connection with the offering and sale of the Bonds, of the Preliminary Official Statement, the Official Statement, this Purchase Agreement and all information contained herein, and all other documents, certificates and written statements furnished by the City or the Community Facilities District to the Underwriter in connection with the transactions contemplated by this Purchase Agreement.
The execution and delivery of this Purchase Agreement by the Community Facilities District shall constitute a representation by the Community Facilities District to the Underwriter that the representations and warranties contained in this Section 2 with respect to the Community Facilities District and the City are true as of the date hereof.
7. Conditions to the Obligations of the Underwriter. The obligation of the Underwriter to accept delivery of and pay for the Bonds on the Closing Date shall be subject, at the option of the Underwriter, to the accuracy in all material respects of the representations and warranties on the part of the Community Facilities District contained herein, to the accuracy in all material respects of the statements of the officers and other officials of the Community Facilities District made in any certificates or other documents furnished pursuant to the provisions hereof, to the performance by the Community Facilities District of their obligations to be performed hereunder at or prior to the Closing Date, and in reliance upon the representations and covenants of KB HOME Coastal Inc., a California corporation (the “Developer”) contained in the certificate(s) delivered as of the Closing Date, and to the following additional conditions:
A. At the Closing Date, the Community Facilities District Resolutions and the Community Facilities District Documents shall be in full force and effect, and shall not have been amended, modified or supplemented, except as may have been agreed to in writing by the Underwriter, and there shall have been taken in connection therewith, with the issuance of the Bonds and with the Bonds, and with the transactions contemplated thereby, and by this Purchase Agreement, all such actions as, in the opinion of Bond Counsel, shall be necessary and appropriate. 895
11 B. At the Closing Date, except as described in the Preliminary Official Statement, the City shall not be, in any respect material to the transactions referred to herein or contemplated hereby, in breach of or in default under, any law or administrative rule or regulation of the State, the United States of America, or of any department, division, agency or instrumentality of either thereof, or under any applicable court or administrative decree or order, or under any loan agreement, note, resolution, indenture, contract, agreement or other instrument to which the City is a party or is otherwise subject or bound, and the performance of the conditions precedent to be performed hereunder will not conflict with or constitute a breach of or default under any applicable law or administrative rule or regulation of the State, the United States of America, or of any department, division, agency or instrumentality of either thereof, or under any applicable court or administrative decree or order, or under any loan agreement, note, resolution, indenture, contract, agreement or other instrument to which the City is a party or is otherwise subject or bound, in any manner which would materially and adversely affect the performance of the conditions precedent to be performed by the City hereunder.
C. At the Closing Date, except as described in the Preliminary Official Statement, the Community Facilities District shall not be, in any respect material to the transactions referred to herein or contemplated hereby, in breach of or in default under, any law or administrative rule or regulation of the State, the United States of America, or of any department, division, agency or instrumentality of either thereof, or under any applicable court or administrative decree or order, or under any loan agreement, note, resolution, indenture, contract, agreement or other instrument to which the Community Facilities District is a party or is otherwise subject or bound, and the performance by the Community Facilities District of its obligations under the Bonds, the Community Facilities District Resolutions, the Community Facilities District Documents, and any other instruments contemplated by any of such documents, and compliance with the provisions of each thereof, or the performance of the conditions precedent to be performed hereunder, will not conflict with or constitute a breach of or default under any applicable law or administrative rule or regulation of the State, the United States of America, or of any department, division, agency or instrumentality of either thereof, or under any applicable court or administrative decree or order, or under any loan agreement, note, resolution, indenture, contract, agreement or other instrument to which the Community Facilities District is a party or is otherwise subject or bound, in any manner which would materially and adversely affect the performance by the Community Facilities District of its obligations under the Community Facilities District Documents or the performance of the conditions precedent to be performed by the Community Facilities District hereunder.
D. The information contained in the Official Statement is, as of the Closing Date and as of the date of any supplement or amendment thereto pursuant hereto, true and correct in all material respects and does not, as of the Closing Date or as of the date of any supplement or amendment thereto, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
E. Between the date hereof and the time for Closing, this Purchase Agreement shall have not been terminated by the Underwriter pursuant to Section 8 hereof.
F. At or prior to the Closing Date, the Underwriter shall have received a counterpart original or certified copy of the following documents, in each case satisfactory in form and substance to the Underwriter:
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12 1. The Official Statement, executed on behalf of the Community Facilities District by an authorized officer;
2. The Community Facilities District Documents, each duly executed and delivered by the respective parties thereto, with only such amendments, modifications or supplements as may have been agreed to in writing by the Underwriter;
3. The Community Facilities District Resolutions and the Formation Documents, together with a certificate dated as of the Closing Date of the City Clerk to the effect that such resolutions and documents are true, correct and complete copies of the ones duly adopted by the City Council;
4. An unqualified approving opinion for the Bonds, dated the Closing Date and addressed to the Community Facilities District, of Bond Counsel, to the effect that the Bonds are the valid, legal and binding obligations of the Community Facilities District and that the interest thereon is excluded from gross income for federal income tax purposes and exempt from personal income taxes of the State, in substantially the form included as Appendix C to the Official Statement, together with a letter of Bond Counsel, dated the Closing Date and addressed to the Underwriter and the Trustee, to the effect that such opinion addressed to the Community Facilities District may be relied upon by the Underwriter and the Trustee to the same extent as if such opinion was addressed to it;
5. A supplemental opinion or opinions of Bond Counsel dated the Closing Date and addressed to the Underwriter to the effect that:
(i) this Purchase Agreement and the Continuing Disclosure Certificate have been duly executed and delivered by the Community Facilities District and, assuming due authorization, execution and delivery by the other parties thereto, constitute the valid and binding obligations of the Community Facilities District, except to the extent that enforceability may be limited by moratorium, bankruptcy, reorganization, insolvency or other similar laws affecting creditors’ rights generally or by the exercise of judicial discretion in accordance with general principles of equity or otherwise in appropriate cases and by limitations on legal remedies against public agencies in the State; (ii) the Bonds are not subject to the registration requirements of the Securities Act of 1933, as amended, and the Indenture is exempt from qualification under the Trust Indenture Act of 1939, as amended; and
(iii) the statements contained in the Official Statement under the captions “INTRODUCTION – Source of Payment for the Bonds,” “INTRODUCTION – Description of the Bonds,” “INTRODUCTION – Tax Exemption,” “INTRODUCTION – Parity Bonds for Refunding Purposes Only,” “THE BONDS,” “SOURCES OF PAYMENT FOR THE BONDS,” (except information under the caption “– Special Taxes” as to which no opinion is expressed), “TAX EXEMPTION,” Appendix C – “FORM OF OPINION OF BOND COUNSEL” and Appendix F – “SUMMARY OF THE INDENTURE,” excluding any material that may be treated as included under such captions by cross-reference or reference to other documents or sources, insofar as such statements expressly summarize certain provisions of the Indenture and Bond Counsel’s final approving opinion, are accurate in all material respects.
6. A letter, dated the Closing Date and addressed to the Underwriter, of Disclosure Counsel, to the effect that such counsel is not passing upon and has not undertaken to 897
13 determine independently or to verify the accuracy or completeness of the statements contained in the Preliminary Official Statement or in the Official Statement, and is, therefore, unable to make any representation to the Underwriter in that regard, but on the basis of its participation in conferences with representatives of the City, the City Attorney, as issuer’s counsel, Bond Counsel, the appraisal of the taxable properties within the Community Facilities District with a date of value as of April 2, 2024 (the “Appraisal Report”) prepared by Stephen G. White, MAI (the “Appraiser”), Spicer Consulting Group, LLC, Murrieta, California (the “Special Tax Consultant”), the Municipal Advisor, representatives of the Underwriter and others, during which conferences the content of the Preliminary Official Statement and the Official Statement and related matters were discussed, and its examination of certain documents, and, in reliance thereon and based on the information made available to it in its role as Disclosure Counsel and its understanding of applicable law, Disclosure Counsel advises the Underwriter as a matter of fact, but not opinion, that no information has come to the attention of the attorneys in the firm working on such matter which has led them to believe that the Preliminary Official Statement as of its date and the date hereof and the Official Statement as of its date and as of the Closing Date (in each case excluding therefrom the financial and statistical data, forecasts, charts, numbers, estimates, projections, assumptions and expressions of opinion included in the Preliminary Official Statement and the Official Statement, information regarding DTC and its book entry system and the information set forth in Appendices A, B, C, D, E, F and G, as to all of which no opinion is expressed) contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading;
7. A certificate dated the Closing Date and signed by an authorized representative of the Community Facilities District or an authorized designee, on behalf of the Community Facilities District to the effect that: (i) the representations and warranties made by the Community Facilities District contained herein are true and correct in all material respects on and as of the Closing Date with the same effect as if made on the Closing Date; (ii) the Community Facilities District Documents have been duly authorized and executed and are in full force and effect; (iii) to the best knowledge of such officer, no event has occurred since the date of the Official Statement which should be disclosed in the Official Statement for the purpose for which it is to be used or which it is necessary to disclose therein in order to make the statements and information therein not misleading in any material respect; (iii) the Community Facilities District has complied with all the agreements and satisfied all the conditions on its part to be satisfied under this Purchase Agreement, the Community Facilities District Resolutions, the Community Facilities District Documents and the Official Statement at or prior to the Closing Date; and (iv) all information in the Official Statement relating to the Community Facilities District (other than information therein provided by the Special Tax Consultant) is true and correct in all material respects as of the date of the Official Statement and as of the Closing Date;
8. An opinion of Burke, Williams & Sorensen, LLP, Riverside, California, City Attorney, dated the date of Closing and addressed to the Underwriter, the Trustee and the City, substantially in the form attached hereto as Exhibit D;
9. A certificate dated the Closing Date from the Appraiser addressed to the Community Facilities District and the Underwriter substantially to the effect that (i) the assumptions made in the Appraisal Report are reasonable; (ii) the Appraisal Report fairly and accurately described, as of the stated date of value, the market values of the properties in the Community Facilities District that are subject to the Special Taxes; (iii) the Appraiser consents to the reproduction of the Appraisal Report as Appendix D to the Preliminary Official Statement and the final 898
14 Official Statement, each with respect to the Bonds, and to the references to the Appraiser and the Appraisal Report made in the Preliminary Official Statement and the Official Statement; (iv) the Appraisal Report complies with the Appraisal Standards for Land-Secured Financings issued by the California Debt and Investment Advisory Commission dated July, 2004; (v) a true and correct copy of the Appraisal Report is attached as Appendix D to the Preliminary Official Statement and the Official Statement; and (vi) neither the Appraisal Report nor the information in the Preliminary Official Statement or the Official Statement referring to it contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading;
10. A certificate dated the Closing Date from the Special Tax Consultant addressed to the Community Facilities District and the Underwriter to the effect that: (i) the Special Tax, if levied and collected in the maximum amounts permitted pursuant to the Rate and Method of Apportionment of Special Tax of the Community Facilities District, as of the Closing Date, would generate at least 110% of the annual debt service payable with respect to the related issue of Bonds plus the Administrative Expenses Cap, based on such assumptions and qualifications as shall be acceptable to the Underwriter; (ii) the statements in the Preliminary Official Statement and the Official Statement provided by the Special Tax Consultant concerning the Special Tax and all information supplied by it for use in the Official Statement were as of the date of the Preliminary Official Statement, the date of the Official Statement and are as of the Closing Date true and correct, and do not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; (iii) all information supplied by the Special Tax Consultant to the Appraiser is true and correct as of the date of the Preliminary Official Statement and the date of the Official Statement and as of the Closing Date, based on such assumptions as may have been supplied by it; (iv) the information contained in the Appraisal Report with respect to taxes and tax rates applicable, and projected to be applicable, to the property in the Community Facilities District is consistent with such information provided by the Special Tax Consultant to the Appraiser, which information so provided was based on information obtained by the Special Tax Consultant from the Community Facilities District, the Developer and the City; and (v) the Special Tax Consultant is duly authorized to execute and deliver the Continuing Disclosure Certificate in its capacity as dissemination agent thereunder, and the Special Tax Consultant has duly executed and delivered the Continuing Disclosure Certificate;
11. Certified copies of the general resolution of the Trustee authorizing the execution and delivery of certain documents by certain officers of the Trustee, which resolution authorizes the execution of the Indenture and the authentication of the Bonds;
12. A certificate of the Trustee, addressed to the Underwriter, and the Community Facilities District dated the Closing Date, to the effect that: (a) the Trustee is a national banking association organized and existing under and by virtue of the laws of the United States, having the full power and being qualified to enter into and perform its duties under the Indenture and to authenticate and deliver the Bonds to the Underwriter; (b) the Trustee is duly authorized to enter into the Indenture and to authenticate and deliver the Bonds to the Underwriter pursuant to the Indenture; (c) when delivered to and paid for by the Underwriter at the Closing, the Bonds will have been duly authenticated and delivered by the Trustee; (d) the execution and delivery of the Indenture and compliance with the provisions on the Trustee’s part contained therein, will not conflict with or constitute a breach of or default under any law, administrative regulation, judgment, decree, loan agreement, indenture, note, resolution, agreement or other instrument to which the Trustee is a party or is otherwise subject (except that no representation, warranty or agreement is made with respect to 899
15 any federal or state securities or blue sky laws or regulations), which conflict, breach or default would materially impair the ability of the Trustee to perform its obligations under the Indenture, nor will any such execution, delivery, adoption or compliance result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the properties or assets held by the Trustee pursuant to the lien created by the Indenture under the terms of any such law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument, except as provided by the Indenture; and (e) to the best of the knowledge of the Trustee, it has not been served with any action, suit, proceeding, inquiry or investigation in law or in equity, before or by any court, governmental agency, public board or body, nor is any such action or other proceeding threatened against the Trustee, affecting the existence of the Trustee, or the titles of its officers to their respective offices or seeking to prohibit, restrain, or enjoining the execution and delivery of the Bonds or the collection of revenues to be applied to pay the principal, premium, if any, and interest with respect to the Bonds, or the pledge thereof, or in any way contesting or affecting the validity or enforceability of the Indenture, or contesting the powers of the Trustee or its authority to enter into, adopt or perform its obligations under any of the foregoing to which it is a party, wherein an unfavorable decision, ruling or funding would materially adversely affect the validity or enforceability of the Indenture or the power and authority of the Trustee to enter into and perform its duties under the Indenture and to authenticate and deliver the Bonds to or upon the order of the Underwriter;
13. An opinion of counsel to the Trustee dated the Closing Date, addressed to the Underwriter, and the Community Facilities District to the effect that (i) the Trustee is a national banking association duly organized and validly existing under the laws of the jurisdiction of its organization and has the corporate power to execute and deliver the Indenture, (ii) the execution and delivery by the Trustee of the Indenture, and its performance of its obligations under the Indenture, have been and are as of the date hereof duly authorized by all necessary corporate action, (iii) no approval, authorization or other action by, or filing with, any governmental body or regulatory authority (which has not been obtained) is required in connection with the due execution, delivery and performance by Trustee of the Indenture, (iv) the Indenture has been duly executed and delivered and constitutes the valid and legally binding obligation of the Trustee enforceable against it in accordance with its terms except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors' rights generally and by general principles of equity (regardless of whether enforcement is sought as a proceeding in equity or at law), and (v) the Bonds have been duly authenticated and delivered by the Trustee;
14. A certificate of the Community Facilities District dated the Closing Date, in a form acceptable to Bond Counsel and the Underwriter, that the Bonds are not arbitrage bonds within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended;
15. A negative assurance letter of counsel to the Developer addressed to the Underwriter and the District, dated the date of the Closing, in form and substance acceptable to the Underwriter and Bond Counsel;
16. A Letter of Representations from the Developer dated the date of printing the Preliminary Official Statement, substantially in the form attached hereto as Exhibit B;
17. A Closing Certificate from the Developer dated the Closing Date, substantially in the form attached hereto as Exhibit C or as such Closing Certificate may be modified with the approval of the Underwriter and Disclosure Counsel; 900
16 18. An opinion of Anzel Galvan LLP, San Francisco, California, counsel to the Underwriter, dated the date of Closing and addressed to the Underwriter in form and substance acceptable to the Underwriter;
19. A certificate of the Municipal Advisor to the effect that the Municipal Advisor has participated in the preparation of the Preliminary Official Statement and the Official Statement and nothing has come to the attention of the Municipal Advisor which would lead it to believe that the Preliminary Official Statement or the Official Statement contain any untrue statement of a material fact or omits to state a fact necessary to make the statements made therein, in the light of the circumstances under which they were made, not misleading;
20. A copy of the Community Facilities District’s executed Blanket Letter of Representation to DTC;
21. A copy of the Blue Sky Survey with respect to the Bonds; and
22. Such additional legal opinions, certificates, instruments and other documents as the Underwriter may reasonably request to evidence the truth and accuracy, as of the date hereof and as of the Closing Date, of the material representations and warranties of the Community Facilities District contained herein, and of the statements and information contained in the Official Statement and the due performance or satisfaction by the Community Facilities District at or prior to the Closing of all agreements then to be performed and all conditions then to be satisfied by the Community Facilities District in connection with the transactions contemplated hereby and by the Indenture and the Official Statement.
All of the opinions, letters, certificates, instruments and other documents mentioned in this Purchase Agreement will be deemed to be in compliance with the provisions of this Purchase Agreement if, but only if, they are in form and substance satisfactory to the Underwriter. If the Community Facilities District shall be unable to satisfy the conditions to the obligations of the Underwriter to purchase, accept delivery of and pay for the Bonds contained in this Purchase Agreement, or if the obligations of the Underwriter to purchase, accept delivery of and pay for the Bonds shall be terminated for any reason permitted by this Purchase Agreement, this Purchase Agreement shall terminate and neither the Community Facilities District nor the Underwriter shall be under any further obligation hereunder, except that the respective obligations of the Underwriter and the Community Facilities District set forth in Section 5 hereof shall continue in full force and effect.
8. Termination Events. In recognition of the desire of the Community Facilities District and the Underwriter to effect a successful public offering of the Bonds, and in view of the potential adverse impact of any of the following events on such a public offering, this Purchase Agreement shall be subject to termination in the discretion of the Underwriter by notification, in writing, to the Community Facilities District prior to delivery of and payment for the Bonds, if between the date 901
17 hereof and the time of Closing, in the Underwriter’s sole and reasonable judgment any of the following events shall occur (each a “Termination Event”):
A. the market price or marketability of the Bonds, or the ability of the Underwriter to enforce contracts for the sale of the Bonds, shall be materially adversely affected by any of the following events:
1. legislation shall have been enacted by the Congress of the United States or the legislature of the State or shall have been favorably reported out of committee of either body or be pending in committee of either body, or shall have been recommended to the Congress for passage by the President of the United States or a member of the President’s Cabinet, or a decision shall have been rendered by a court of the United States or the State or the Tax Court of the United States, or a ruling, resolution, regulation or temporary regulation, release or announcement shall have been made or shall have been proposed to be made by the Treasury Department of the United States or the Internal Revenue Service, or other federal or state authority with appropriate jurisdiction, with respect to federal or state taxation upon interest received on obligations of the general character of the Bonds;
2. there shall have occurred (1) an outbreak or escalation of hostilities or the declaration by the United States of a national emergency or war or (2) any other calamity or crisis in the financial markets of the United States or elsewhere or the escalation of such calamity or crisis; or
3. a general suspension of trading on the New York Stock Exchange or other major exchange shall be in force, or minimum or maximum prices for trading shall have been fixed and be in force, or maximum ranges for prices for securities shall have been required and be in force on any such exchange, whether by virtue of determination by that exchange or by order of U.S.
Securities and Exchange Commission (“SEC”) or any other governmental authority having jurisdiction; or
4. legislation shall have been enacted by the Congress of the United States or shall have been favorably reported out of committee or be pending in committee, or shall have been recommended to the Congress for passage by the President of the United States or a member of the President's Cabinet, or a decision by a court of the United States shall be rendered, or a ruling, regulation, proposed regulation or statement by or on behalf of the SEC or other governmental agency having jurisdiction of the subject matter shall be made, to the effect that any obligations of the general character of the Securities, or the Bonds are not exempt from registration under or other requirements of the Securities Act of 1933, as amended and as then in effect, or the Securities Exchange Act of 1934, as amended and as then in effect, or that the Indenture is not exempt from qualification under or other requirements of the Trust Indenture Act of 1939, as amended and as then in effect; or
5. except as disclosed in or contemplated by the Official Statement, any material adverse change in the affairs of the Community Facilities District shall have occurred; or
6. any rating of the Bonds or the rating of any obligations of the Community Facilities District payable from Special Taxes shall have been downgraded, withdrawn or placed on credit watch with negative outlook by any major credit rating agency; or 902
18 B. any event or circumstance shall exist that either makes untrue or incorrect in any material respect any statement or information in the Official Statement (other than any statement provided by the Underwriter) or is not reflected in the Official Statement but should be reflected therein in order to make the statements therein, in the light of the circumstances under which they were made, not misleading and, in either such event, the Community Facilities District refuses to permit the Official Statement to be supplemented to supply such statement or information, or the effect of the Official Statement as so supplemented is to materially adversely affect the market price or marketability of the Bonds or the ability of the Underwriter to enforce contracts for the sale of the Bonds; or C. a general banking moratorium shall have been declared by federal or State authorities having jurisdiction and be in force; or
D. a material disruption in securities settlement, payment or clearance services affecting the Bonds shall have occurred; or
E. any new restriction on transactions in securities materially affecting the market for securities (including the imposition of any limitation on interest rates) or the extension of credit by, or a charge to the net capital requirements of, underwriters shall have been established by the New York Stock Exchange, the SEC, any other federal or State agency or the Congress of the United States, or by Executive Order; or
F. a decision by a court of the United States shall be rendered, or a stop order, release, regulation or no-action letter by or on behalf of the SEC or any other governmental agency having jurisdiction of the subject matter shall have been issued or made, to the effect that the issuance, offering or sale of the Bonds, including the underlying obligations as contemplated by this Purchase Agreement or by the Official Statement, or any document relating to the issuance, offering or sale of the Bonds, is or would be in violation of any provision of the federal securities laws at the Closing Date, including the Securities Act of 1933, as amended and as then in effect, the Securities Exchange Act of 1934, as amended and as then in effect, or the Trust Indenture Act of 1939; or G. the commencement of one or more Actions.
Subject to Section 9, upon the occurrence of a Termination Event and the termination of this Purchase Agreement by the Underwriter, all obligations of the Community Facilities District and the Underwriter under this Purchase Agreement shall terminate, without further liability.
9. Expenses. Whether or not the Bonds are sold to the Underwriter as set forth herein:
A. The Underwriter shall be under no obligation to pay any expenses incident to the performance of the obligations of the Community Facilities District hereunder. If the Bonds are delivered by the Community Facilities District, the Community Facilities District shall pay, from the proceeds of the Bonds or from other funds of the Community Facilities District, the following expenses: (a) the cost of preparing, duplicating or printing, mailing and delivering the Community Facilities District Documents, the Preliminary Official Statement, the Official Statement and all other agreements and documents that are contemplated hereby (and drafts of any thereof); (b) the cost of preparation and printing of the definitive Bonds; (c) the fees and expenses of the Community Facilities District, the Trustee, Bond Counsel, Disclosure Counsel, the Municipal Advisor, the Special Tax Consultant, any entity performing continuing disclosure compliance research or providing continuing disclosure compliance reports and any other experts or consultants retained by the Community 903
19 Facilities District; (d) the charges of any rating agency with respect to the Bonds; (e) reimbursement to the Underwriter for payment of any fees and expenses reasonably incurred in connection with the initial offering, sale and delivery of the Bonds, including but not limited to industry fees (e.g., DTC, DAC, IPREO, CUSIP and Day Loan fees) only if the Community Facilities District and Underwriter have previously discussed and approved the allocation of proceeds towards these fees, and meal and travel expenses of the personnel of the Community Facilities District, but not including entertainment expenses or those to be paid by the Underwriter pursuant to the last paragraph of this Section 9, and (f) all other fees and expenses, not including entertainment expenses, reasonably incurred in connection with the preparation of the Community Facilities District Documents, the Preliminary Official Statement, the Official Statement and all other agreements and documents that are contemplated hereby (and drafts of any thereof) and/or the initial offering, sale and delivery of the Bonds. The Community Facilities District has authorized, and does hereby authorize, the Underwriter to pay such expenses on behalf of the Community Facilities District from proceeds of the Bonds at Closing as further described in the closing memorandum relating to the Bonds.
B. If the Bonds are sold to the Underwriter by the Community Facilities District, the Community Facilities District shall pay out of the proceeds of the Bonds the discount of the Underwriter or the purchase price paid for the Bonds shall reflect such discount.
Except as otherwise provided in this Section 9, the Underwriter shall pay the cost, if any, of qualifying the Bonds for sale in the various states chosen by the Underwriter, all advertising expenses in connection with the public offering of the Bonds and all other expenses incurred by it in connection with its public offering and distribution of the Bonds, not described above.
10. Use of Documents. The Community Facilities District hereby authorizes the Underwriter to use, in connection with the public offering and sale of the Bonds, this Purchase Agreement, the Preliminary Official Statement, the Official Statement and the Community Facilities District Documents, and the information contained herein and therein.
11. Qualification of Bonds. The Community Facilities District will furnish such information, execute such instruments and take such other action in cooperation with the Underwriter as the Underwriter may reasonably request to qualify the Bonds for offer and sale under the Blue Sky or other securities laws and regulations of such states and other jurisdictions of the United States as the Underwriter may designate and to provide for the continuance of such qualification; provided, however, that the Community Facilities District will not be required to qualify as a foreign corporation or to file any general or special consents to service of process under the laws of any state.
12. Notices. Any notice or other communication to be given to the Community Facilities District or the Community Facilities District under this Purchase Agreement may be given by delivering the same in writing to the City of Wildomar, 23873 Clinton Keith Road, Suite 110, Wildomar, California 92595, Attention: City Manager; any notice or other communication to be given to the Underwriter under this Purchase Agreement may be given by delivering the same in writing to Stifel, Nicolaus & Company, Incorporated, 2121 Avenue of the Stars, Suite 2150, Los Angeles, California 90067, Attention: Sara Brown.
13. Benefit. This Purchase Agreement is made solely for the benefit of the Community Facilities District and Underwriter (including any successors or assignees of the Underwriter) and no other person shall acquire or have any right hereunder or by virtue hereof. Except as otherwise expressly provided herein, all of the agreements and representations of the Community Facilities 904
20 District contained in this Purchase Agreement and in any certificates delivered pursuant hereto shall remain operative and in full force and effect regardless of: (i) any investigation made by or on behalf of the Underwriter; (ii) delivery of and payment for the Bonds hereunder; or (iii) any termination of this Purchase Agreement.
14. Survival of Representations and Warranties. The representations and warranties of the Community Facilities District under this Purchase Agreement shall not be deemed to have been discharged, satisfied or otherwise rendered void by reason of the Closing and regardless of any investigations made by or on behalf of the Underwriter (or statements as to the results of such investigations) concerning such representations and statements of the Community Facilities District and regardless of delivery of and payment for the Bonds.
15. Execution in Counterparts. This Purchase Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.
16. Effective. This Purchase Agreement shall become effective and binding upon the respective parties hereto upon the execution of the acceptance hereof by the Community Facilities District and shall be valid and enforceable as of the time of such acceptance.
17. No Prior Agreements. This Purchase Agreement contains the entire agreement between the parties relating to the subject matter hereof and supersedes all oral statements, prior writings and representations with respect thereto.
18. Waiver of Jury Trial. THE COMMUNITY FACILITIES DISTRICT HEREBY
IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATING TO THIS PURCHASE AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
19. Governing Law. This Purchase Agreement shall be governed by the laws of the State. [Signature Page Follows]
905
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20. Effective Date. This Purchase Agreement shall become effective and binding upon the respective parties hereto upon the execution of the acceptance hereof by the Community Facilities District and shall be valid and enforceable as of the time of such acceptance.
Very truly yours,
STIFEL, NICOLAUS & COMPANY,
INCORPORATED
By:
Its: Managing Director
The foregoing is hereby agreed to and
accepted as of the date first above written:
COMMUNITY FACILITIES DISTRICT NO. 2022-3
OF THE CITY OF WILDOMAR
By:
Authorized Officer
Time of Execution: _____________ California time
906
A-1
EXHIBIT A
COMMUNITY FACILITIES DISTRICT NO. 2022-3 (VERANO)
OF THE CITY OF WILDOMAR
SPECIAL TAX BONDS, SERIES 2024
MATURITY SCHEDULE
Maturity
(September 1)
Principal
Amount
Interest
Rate Yield Price
10% Test
Used
Hold-TheOfferingPrice Used
_________________
T: Term Bond.
C: Priced to optional redemption date of September 1, 20__, at par. 907
A-2
REDEMPTION PROVISIONS
Optional Redemption. The Bonds may be redeemed at the option of the District from any source of funds on any Interest Payment Date on or after September 1, 20__, in whole or in part, from such maturities as are selected by the District and by lot within a maturity, at the following redemption prices, expressed as a percentage of the principal amount to be redeemed, together with accrued interest to the date of redemption:
Redemption Date Redemption
Price
September 1, 20__ and March 1, 20__ 103%
September 1, 20__ and March 1, 20__ 102
September 1, 20__ and March 1, 20__ 101
September 1, 20__ and any Interest Payment Date thereafter 100 Mandatory Sinking Fund Redemption. The Bonds maturing on September 1, 20__ (the “20__ Term Bonds”) will be called before maturity and redeemed, from the Sinking Fund Payments that have been deposited into the Redemption Account established under the Indenture, on September 1, 20__, and on each September 1 thereafter prior to maturity, in accordance with the schedule of Sinking Fund Payments set forth below. The 20__ Term Bonds so called for redemption will be selected by the Trustee by lot and will be redeemed at a redemption price for each redeemed 20__ Term Bond equal to the principal amount thereof, plus accrued interest to the redemption date, without premium, as follows:
Term Bonds Maturing September 1, 20__
Sinking Fund Redemption Date
(September 1) Sinking Fund Payments
$
*
* Maturity.
Bonds maturing on September 1, 20__ (the “20__ Term Bonds”) will be called before maturity and redeemed, from the Sinking Fund Payments that have been deposited into the Redemption Account established under the Indenture, on September 1, 20__, and on each September 1 thereafter prior to maturity, in accordance with the schedule of Sinking Fund Payments set forth below. The 20__ Term Bonds so called for redemption will be selected by the Trustee by lot and will be redeemed at a redemption price for each redeemed 20__ Term Bond equal to the principal amount thereof, plus accrued interest to the redemption date, without premium, as follows:
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A-3
Term Bonds Maturing September 1, 20__
Sinking Fund Redemption Date
(September 1) Sinking Fund Payments
$
*
* Maturity.
Special Mandatory Redemption from Special Tax Prepayments. The Bonds are subject to special mandatory redemption as a whole or in part on a pro rata basis among maturities and by lot within a maturity, on any Interest Payment Date on or after March 1, 2025, and will be redeemed by the Trustee, from any amounts paid by the District to the Trustee and designated by the District as a prepayment of Special Taxes for one or more parcels in the District made in accordance with the Rate and Method deposited to the Redemption Account pursuant to the Indenture, plus amounts transferred from the Reserve Account pursuant to the Indenture, at the following redemption prices, expressed as a percentage of the principal amount to be redeemed, together with accrued interest to the redemption date:
Redemption Date Redemption
Price
Any Interest Payment Date from March 1, 2025 through March 1, 20__ 103% September 1, 20__ and March 1, 20__ 102
September 1, 20__ and March 1, 20__ 101
September 1, 20__ and any Interest Payment Date thereafter 100 909
B-1
EXHIBIT B
COMMUNITY FACILITIES DISTRICT NO. 2022-3 (VERANO)
OF THE CITY OF WILDOMAR
SPECIAL TAX BONDS, SERIES 2024
LETTER OF REPRESENTATIONS OF
KB HOME COASTAL INC.
[POS Date]
Community Facilities District No. 2022-3
of the City of Wildomar
3873 Clinton Keith Road, Suite 110,
Wildomar, California 92595
Stifel, Nicolaus & Company, Incorporated
2121 Avenue of the Stars, Suite 2150
Los Angeles, California 90067
Ladies and Gentlemen:
Reference is made to the Community Facilities District No. 2022-3 (Verano) the City of Wildomar Special Tax Bonds, Series 2024 (the “Bonds”) and to the Bond Purchase Agreement to be entered into in connection therewith (the “Bond Purchase Agreement”). This Letter of Representations of KB HOME Coastal Inc. (the “Letter of Representations”) is delivered pursuant to and in satisfaction of Section 7(F)(16) of the Bond Purchase Agreement. Capitalized terms used herein and not otherwise defined have the meanings ascribed to them in the Bond Purchase Agreement.
The undersigned certifies that he or she is familiar with the facts herein certified and is authorized and qualified to certify the same as an authorized officer or representative of KB HOME Coastal Inc., a California corporation (the “Developer”), and the undersigned, on behalf of the Developer, further certifies as follows:
1. The Developer is a corporation duly organized and validly existing under the laws of the State of California and has all requisite right, power and authority (i) to execute and deliver this Letter of Representations, and (ii) to develop property in the Community Facilities District No. 2022- 3 (Verano) the City of Wildomar (the “Community Facilities District”) as described in the Preliminary Official Statement.
2. As set forth in the Preliminary Official Statement, title to a certain portion of the property within the Community Facilities District is held in the name of the Developer (collectively, herein, the “Property”). The undersigned, on behalf of the Developer, makes the representations herein with respect to all such Property. Except as otherwise described in the Preliminary Official Statement, the Developer’s current expectation is that the Developer shall remain the party responsible for the construction and sale of homes within the Property. The Developer has not entered into an agreement 910
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for development or management of the Property by any other entity, except such subcontracts, consultant agreements and similar agreements for land development activities associated with the Developer’s development plan as are entered into in the ordinary course of business.
3. Except as set forth in the Preliminary Official Statement, no action, suit, proceeding, inquiry or investigation at law or in equity, before or by any court, regulatory agency, public board or body is pending against the Developer (with proper service of process to the Developer having been accomplished) or, to the Actual Knowledge of the Undersigned,1 is pending against any current Affiliate2 (with proper service of process to such Affiliate having been accomplished) or to the Actual Knowledge of the Undersigned is threatened in writing against the Developer, or any such Affiliate (a) to restrain or enjoin the collection of the special tax levied on the Property by the Community Facilities District (the “Special Tax”) or other sums pledged or to be pledged to pay the principal of and interest on the Bonds (e.g., the reserve account established under the Indenture (herein, the “Reserve Account”)), (b) to restrain or enjoin the development of the Property as described in the Preliminary Official Statement, (c) in any way contesting or affecting the validity of the Special Tax, or (d) which is reasonably likely to materially and adversely affect the Developer’s ability to acquire, develop, and sell the Property as described in the Preliminary Official Statement or to pay the Special Tax due with respect to the Property (to the extent the responsibility of the Developer) prior to delinquency.
4. As of the date of the Preliminary Official Statement, to the Actual Knowledge of the Undersigned, the information contained therein solely with respect to the Developer, its Affiliates, the proposed development of the Property, ownership of the Property, the Developer’s development plan, the Developer’s financing plan, the Developer’s lenders, if any, and contractual arrangements of the Developer or any Affiliates (including, if material to the Developer’s development plan or the Developer’s financing plan, other loans of such Affiliates) as set forth under the sections of the Preliminary Official Statement captioned “INTRODUCTION – The District” (the first three
1 “Actual Knowledge of the Undersigned” means, as of the date of this Letter of Representations, the actual (as opposed to constructive) knowledge that the individual signing on behalf of the Developer currently has or has obtained through (i) interviews with such current officers and responsible employees of the Developer and its Affiliates as the undersigned has determined are reasonably likely, in the ordinary course of their respective duties, to have knowledge of the matters set forth in this Letter of Representations, and/or (ii) review of documents that were reasonably available to the undersigned and which the undersigned has reasonably deemed necessary for the undersigned to obtain knowledge of the matters set forth in this Letter of Representations. The undersigned has not conducted any extraordinary inspection or inquiry other than such inspections or inquiries as are prudent and customary in connection with the ordinary course of the Developer’s current business and operations. Individuals who are no longer employees of the Developer and its Affiliates have not been contacted. 2 “Affiliate” means, with respect to the Developer, any other Person (i) who directly, or indirectly through one or more intermediaries, is currently controlling, controlled by or under common control with the Developer, and (ii) for whom information, including financial information or operating data, concerning such Person is material to potential investors in their evaluation of the Community Facilities District and investment decision regarding the Bonds (i.e., information relevant to (a) the Developer’s development plans with respect to the Property and ability to pay its Special Tax on the Property (to the extent the responsibility of the Developer) prior to delinquency, or (b) such Person’s assets or funds that would materially affect the Developer’s ability to develop the Property as described in the Preliminary Official Statement or to pay its Special Tax on the Property (to the extent the responsibility of the Developer). “Person” means an individual, a corporation, a partnership, a limited liability company, an association, a joint stock company, a trust, any unincorporated organization or a government or political subdivision thereof. For purposes hereof, the term “control” (including the terms “controlling,” “controlled by” or “under common control with”) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise. 911
B-3
paragraphs only), “THE DISTRICT – Direct and Overlapping Debt” (as to base sales prices provided by the Developer for purposes of Table 5 only) and “PROPERTY OWNERSHIP AND THE DEVELOPMENT” (but in all cases under all captions excluding therefrom (i) information regarding the Appraisal Report (as defined herein), market value ratios and annual special tax ratios, and (ii) information which is identified as having been provided by a source other than the Developer), is true and correct in all material respects and did not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
5. Except as described in the Preliminary Official Statement, there are no material loans outstanding and unpaid and no material lines of credit of the Developer or its Affiliates, that are secured by an interest in the Property. Neither the Developer nor, to the Actual Knowledge of the Undersigned, any of its Affiliates is currently in material default on any loans, lines of credit or other obligation related to the development of the Property or any other project which default is reasonably likely to materially and adversely affect the Developer’s ability to develop the Property as described in the Preliminary Official Statement or to pay the Special Tax due with respect to the Property (to the extent the responsibility of the Developer) prior to delinquency.
6. To the Actual Knowledge of the Undersigned, other than as disclosed in the Preliminary Official Statement, the Developer is not aware that any of the Property has a current liability with respect to the presence of a substance presently classified as hazardous under the federal Comprehensive Environmental Response, Compensation and Liability Act of 1980 or applicable California law or is adversely affected by the presence of endangered or threatened species or habitat for endangered or threatened species.
7. The Developer covenants that, while the Bonds or any refunding obligations related thereto are outstanding, the Developer and its Affiliates which it controls will not bring any action, suit, proceeding, inquiry or investigation at law or in equity, before any court, regulatory agency, public board or body, that in any way seeks to challenge or overturn the formation of the Community Facilities District, to challenge the adoption of the ordinance of the Community Facilities District levying Special Tax within the Community Facilities District, to invalidate the Community Facilities District or any of the Bonds or any refunding bonds related thereto, or to invalidate the special tax liens imposed under Section 3115.5 of the Streets and Highways Code based on recordation of the notices of special tax lien relating thereto. The foregoing covenant shall not prevent the Developer in any way from bringing any other action, suit, proceeding, inquiry or investigation at law or in equity, before any court, regulatory agency, public board or body including, without limitation, (a) an action or suit contending that the Special Tax has not been levied in accordance with the methodologies contained in the Rate and Method of Apportionment of Special Tax pursuant to which Special Tax is levied, (b) an action or suit with respect to the application or use of the Special Tax levied and collected or (c) an action or suit to enforce the obligations of the City and/or the Community Facilities District under the Community Facilities District Resolutions, the Ordinance, the Indenture, or any other agreements among the Developer, an Affiliate, the City and/or the Community Facilities District or to which the Developer or an Affiliate is a party or beneficiary
8. The Developer consents to the issuance of the Bonds. The Developer acknowledges and agrees that the proceeds of the Bonds will be used as described in the Preliminary Official Statement.
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9. The Developer intends to comply with the provision of the Mello-Roos Community Facilities Act of 1982, as amended, relating to the Notice of Special Tax described in Government Code Section 53341.5 in connection with the sale of the Property to homeowners, or portions thereof.
10. To the Actual Knowledge of the Undersigned, the Developer is able to pay its bills as they become due and no legal proceedings are pending against the Developer (with proper service of process having been accomplished) or, to the Actual Knowledge of the Undersigned, threatened in writing in which the Developer may be adjudicated as bankrupt or discharged from any and all of its debts or obligations, or granted an extension of time to pay its debts or obligations, or be allowed to reorganize or readjust its debts, or be subject to control or supervision of the Federal Deposit Insurance Corporation.
11. To the Actual Knowledge of the Undersigned, Affiliates of the Developer are able to pay their bills as they become due and no legal proceedings are pending against any Affiliate of the Developer (with proper service of process having been accomplished) or to the Actual Knowledge of the Undersigned, threatened in writing in which the Affiliates of the Developer may be adjudicated as bankrupt or discharged from any or all of their debts or obligations, or granted an extension of time to pay their debt or obligations, or be allowed to reorganize or readjust their debts or obligations, or be subject to control or supervision of the Federal Deposit Insurance Corporation which is reasonably likely to have a materially adverse impact on the ability of the Developer to develop the Property as described in the Preliminary Official Statement, or to pay the Special Tax or ad valorem tax obligations with respect to the portion of the Property then owned by the Developer (to the extent the responsibility of the Developer) prior to delinquency.
12. The Developer has been developing or has been involved in the development of numerous projects over an extended period of time. It is likely that the Developer and its Affiliates have been delinquent at one time or another in the payment of ad valorem property taxes, special assessments or special taxes. However, to the Actual Knowledge of the Undersigned, during the last five years, neither the Developer nor any current Affiliate has, during the period of its ownership, been delinquent to any material extent in the payment of any ad valorem property tax, special assessment or special tax on property included within the boundaries of a community facilities district or an assessment district in California that (a) caused a draw on a reserve fund relating to such assessment district or community facilities district financing or (b) resulted in a foreclosure action being commenced against the delinquent Developer or such Affiliate in a court of law.
13. The Developer has not filed for the reassessment of the assessed value of any portions of the Property, other than in connection with the sale of homes to individual homebuyers.
14. To the Actual Knowledge of the Undersigned, there are no claims, disputes, suits, actions or contingent liabilities by and among the Developer, its Affiliates or any contractors working on the development of the Property which is reasonably likely to materially and adversely affect the Developer’s development of the Property as described in the Preliminary Official Statement, or the payment of the Special Tax due with respect to the Property (to the extent the responsibility of the Developer) prior to delinquency.
15. Based upon the current development plans, including, without limitation, the current budget and subject to economic conditions and risks generally inherent in the development of real property, including, but not limited to, the risks described in the Preliminary Official Statement under the section entitled “SPECIAL RISK FACTORS,” the Developer presently anticipates that it will have 913
B-5
sufficient funds to develop the Property as described in the Preliminary Official Statement and to pay Special Tax levied against the Property (to the extent the responsibility of the Developer) prior to delinquency and does not anticipate that the City or the Community Facilities District will be required to resort to a draw on the Reserve Account for payment of principal of or interest on the Bonds due to the Developer’s nonpayment of Special Tax. However, neither the Developer nor any of its Affiliates are obligated to make any additional capital contribution or loan to the Developer at any time, and the Developer reserves the right to change its development plans and financing plans for the Property at any time without notice.
16. An appraisal of the taxable properties within the Community Facilities District, dated April 15, 2024 (the “Appraisal Report”), was prepared by Stephen G. White, MAI (the “Appraiser”).
The Appraisal Report estimates the market value of the taxable properties within the Community Facilities District as of April 2, 2024 (the “Date of Value”). To the Actual Knowledge of the Undersigned, all information submitted by, or on behalf of and authorized by, the Developer to the Appraiser was true and correct in all material respects as of the Date of Value.
17. Solely as to the limited information described in the sections of the Preliminary Official Statement indicated in Paragraph 4 herein (and subject to the limitations and exclusions set forth in Paragraph 4), the Developer agrees to indemnify and hold harmless, to the extent permitted by law, the City, the Community Facilities District, and their officials and employees, and each Person, if any, who controls any of the foregoing within the meaning of Section 15 of the Securities Act of 1933, as amended, or of Section 20 of the Securities Exchange Act of 1934, as amended (each, an “Indemnified Party” and, collectively, the “Indemnified Parties”), against any and all losses, claims, damages or liabilities, joint or several, to which such Indemnified Party may become subject under any statute or at law or in equity and shall reimburse any such Indemnified Party for any reasonable legal or other expense incurred by it in connection with investigating any such claim against it and defending any such action, insofar as and solely to the extent such losses, claims, damages, liabilities or actions, or legal or other expenses, arise out of or are based upon any untrue statement or alleged untrue statement of a material fact or the omission or alleged omission of a material fact by the Developer in the abovereferenced information in the Preliminary Official Statement, as of its date, necessary to make the statements made by the Developer contained therein, in light of the circumstances under which they were made not misleading. This indemnity provision shall not be construed as a limitation on any other liability which the Developer may otherwise have to any Indemnified Party, provided that in no event shall the Developer be obligated for double indemnification, or for the negligence or willful misconduct of an Indemnified Party.
18. If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against any Indemnified Party in respect of which indemnification may be sought pursuant to the above paragraph, such Indemnified Party shall promptly notify the Developer in writing; provided that the failure to notify the Developer shall not relieve it from any liability that it may have hereunder except to the extent that it has been materially prejudiced by such failure; and provided, further, that the failure to notify the Developer shall not relieve it from any liability that it may have to an Indemnified Party otherwise than under the above paragraph unless such liability was also conditioned upon such notice. If any such proceeding shall be brought or asserted against an Indemnified Party and it shall have notified the Developer thereof, the Developer shall retain counsel reasonably satisfactory to the Indemnified Party and approved thereby to represent the Indemnified Party in such proceeding and shall pay the fees and expenses of such counsel related to such proceeding, as incurred. In any such proceeding, any Indemnified Party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the 914
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expense of such Indemnified Party unless (i) the Developer and the Indemnified Party shall have mutually agreed to the contrary; (ii) the Developer has failed within a reasonable time to retain counsel reasonably satisfactory to the Indemnified Party; (iii) the Indemnified Party shall have reasonably concluded that there may be legal defenses available to it that are different from or in addition to those available to the Developer such that a material conflict of interest exists for such counsel; or (iv) the named parties in any such proceeding (including any impleaded parties) include the Developer and the Indemnified Party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interest between them. It is understood and agreed that the Developer shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all Indemnified Parties, and that all such fees and expenses, to the extent reasonable, shall be paid or reimbursed as they are incurred. Any such separate firm shall be designated in writing by such Indemnified Parties. The Developer shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the Developer agrees to indemnify each Indemnified Party from and against any loss or liability by reason of such settlement or judgment to the extent set forth above. If the Developer shall, after receiving notice of the indemnification obligation of the Developer and within a period of time necessary to preserve any and all defenses to any claim asserted, fails to assume the defense or to retain counsel for that purpose satisfactory to the Indemnified Party, the Indemnified Party shall have the right, but not the obligation, to undertake the defense of, and to compromise or settle the claim or other matter on behalf of, for the account of and at the risk of, the Developer. The Developer shall not, without the written consent of the Indemnified Party, effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Party is a party and indemnification could have been sought hereunder by such Indemnified Party, unless such settlement (x) includes an unconditional release of such Indemnified Party, in form and substance reasonably satisfactory to such Indemnified Party, from all liability on claims that are the subject matter of such proceeding , and (y) does not include any statement as to or any admission of fault, culpability or a failure to act by or on behalf of any Indemnified Party.
19. If between the date hereof and the Closing Date any event relating to or affecting the Developer, its Affiliates, ownership of the Property, the proposed development of the Property, the Developer’s development plan, the Developer’s financing plan, the Developer’s lenders, if any, and contractual arrangements of the Developer or any Affiliates (including, if material to the Developer’s development plan or the Developer’s financing plan, other loans of such Affiliates) shall occur of which the undersigned has actual knowledge which would cause the information under the sections of the Preliminary Official Statement indicated in Paragraph 4 hereof (and subject to the limitations and exclusions contained in Paragraph 4 hereof), to contain an untrue statement of a material fact or to omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, the Developer shall notify the City, the Community Facilities District and the Underwriter and if in the opinion of counsel to the City or the Underwriter such event requires the preparation and publication of a supplement or amendment to the Preliminary Official Statement, the Developer shall reasonably cooperate with the City and the Community Facilities District in the preparation of an amendment or supplement to the Preliminary Official Statement in form and substance satisfactory to counsel to the City, the Community Facilities District and to the Underwriter.
20. The Developer agrees to deliver a Closing Certificate dated the date of issuance of the Bonds at the time of issuance of the Bonds in substantially the form attached as Exhibit H to the Bond Purchase Agreement. If any event related to or affecting the Developer, its Affiliates, or the ownership, 915
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development, or sale of the Property occurs, as a result of which it is necessary to modify the Closing Certificate, the Developer agrees to deliver a new Closing Certificate revised to reflect such event.
21. On behalf of the Developer, I have reviewed the contents of this Letter of Representations and have had the opportunity to discuss with counsel to the Developer the meaning of the contents of this Letter of Representations. The Developer acknowledges and understands that a variety of state and federal securities laws, including, but not limited to the Securities Act of 1933, as amended, and Rule 10b-5 promulgated under the Securities Exchange Act of 1934, as amended, may apply to the Developer and that under some circumstances, certification as to the matters set forth in this Letter of Representations, without additional disclosures or other action, may not fully discharge all duties and obligations of the Developer under such securities laws. [Remainder of Page Intentionally Left Blank; Signature Page Follows] 916
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The undersigned has executed this Letter of Representations solely in his or her capacity as an authorized officer or representative of the Developer and he or she will have no personal liability arising from or relating to this Letter of Representations. Any liability arising from or relating to this Letter of Representations may only be asserted against the Developer.
KB HOME Coastal Inc.,
a California corporation
By:
Name:
Title:
[EXECUTION PAGE OF LETTER OF REPRESENTATIONS OF
KB HOME COASTAL INC.]
917
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EXHIBIT C
FORM OF CLOSING CERTIFICATE
$[PAR]
COMMUNITY FACILITIES DISTRICT NO. 2022-3 (VERANO)
OF THE CITY OF WILDOMAR
SPECIAL TAX BONDS, SERIES 2024
CLOSING CERTIFICATE OF
KB HOME COASTAL INC.
[Closing Date]
Community Facilities District No. 2022-3
of the City of Wildomar
3873 Clinton Keith Road, Suite 110,
Wildomar, California 92595
Attn: City Manager
Stifel, Nicolaus & Company, Incorporated
2121 Avenue of the Stars, Suite 2150
Los Angeles, California 90067
Ladies and Gentlemen:
Reference is made to the above-captioned bonds (the “Bonds”) and to the Bond Purchase Agreement, dated [Pricing Date] (the “Bond Purchase Agreement”), entered into in connection therewith. This Closing Certificate of KB HOME Coastal Inc. (the “Closing Certificate”) is delivered pursuant to Section 7(F)(17) of the Bond Purchase Agreement. Capitalized terms used herein and not otherwise defined have the meanings ascribed to them in the Letter of Representations of KB HOME Coastal Inc. (the “Letter of Representations”), dated [POS Date], delivered by KB HOME Coastal Inc., a California corporation (the “Developer”).
The undersigned certifies that he or she is familiar with the facts herein certified and is authorized and qualified to certify the same as an authorized officer or representative of the Developer, and the undersigned, on behalf of the Developer, further certifies as follows:
1. The Developer has received the final Official Statement dated [Pricing Date] relating to the Bonds (the “Official Statement”). To the Actual Knowledge of the Undersigned, each statement, representation and warranty made in the Letter of Representations is true and correct in all material respects on and as of the date hereof with the same effect as if made on the date hereof, except that all references therein to the Preliminary Official Statement shall be deemed to be references to the Official Statement.
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2. To the Actual Knowledge of the Undersigned, no event has occurred since the date of the Preliminary Official Statement affecting the statements and information described in Paragraph 4 of the Letter of Representations (and subject to the limitations and exclusions contained in Paragraph 4 of the Letter of Representations) relating to the Developer, its Affiliates, the proposed development of the Property, ownership of the Property, the Developer’s development plan, the Developer’s financing plan, the Developer’s lenders, if any, and contractual arrangements of the Developer or any Affiliates (including, if material to the Developer’s development plan or the Developer’s financing plan, other loans of its Affiliates), which should be disclosed in the Official Statement for the purposes for which it is to be used in order to make such statements and information contained in the Official Statement not misleading in any material respect.
3. For the period through 25 days after the “End of the Underwriting Period” as defined in the Bond Purchase Agreement (provided the Developer may assume the End of the Underwriting Period is the Closing Date (as defined in the Bond Purchase Agreement), unless it receives written notice from the Underwriter that the End of the Underwriting Period is later than the Closing Date), if any event relating to or affecting the Developer, its Affiliates, the proposed development of the Property, ownership of the Property, the Developer’s development plan, the Developer’s financing plan, the Developer’s lenders, if any, and contractual arrangements of the Developer or any Affiliates (including, if material to the Developer’s development plan or the Developer’s financing plan, other loans of its Affiliates) shall occur as a result of which it is necessary, in the opinion of the Underwriter or counsel to the City or the Community Facilities District, to amend or supplement the Official Statement in order to make the information under the sections of the Official Statement indicated in Paragraph 4 of the Letter of Representations (and subject to the limitations and exclusions contained in Paragraph 4 of the Letter of Representations) not misleading in the light of the circumstances under which they were made, the Developer shall reasonably cooperate with the City, the Community Facilities District and the Underwriter in the preparation and publication of a supplement or amendment to the information under the sections of the Official Statement indicated in Paragraph 4 of the Letter of Representations (and subject to the limitations and exclusions contained in Paragraph 4 of the Letter of Representations), in form and substance satisfactory to the Underwriter and counsel to the City and the Community Facilities District which will amend or supplement the Official Statement so that it will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
[Remainder of Page Intentionally Left Blank; Signature Page Follows] 919
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The undersigned has executed this Closing Certificate solely in his or her capacity as an authorized officer or representative of the Developer and he or she will have no personal liability arising from or relating to this Closing Certificate. Any liability arising from or relating to this Closing Certificate may only be asserted against the Developer.
KB HOME Coastal Inc.,
a California corporation
By:
Name:
Title:
[EXECUTION PAGE OF CLOSING CERTIFICATE OF
KB HOME COASTAL INC.]
920
D-1
EXHIBIT D
FORM OF OPINION OF THE ISSUER’S COUNSEL
[Closing Date]
Community Facilities District No. 2022-3
(Verano) the City of Wildomar
Wildomar, California
Stifel, Nicolaus & Company, Incorporated
Los Angeles, California
Wilmington Trust, National Association,
as Trustee
Los Angeles, California
ISSUER’S COUNSEL OPINION
Re: $[PAR] Community Facilities District No. 2022-3 (Verano) the City of Wildomar Special Tax Bonds, Series 2024
Ladies and Gentlemen:
We are the City Attorney of the City of Wildomar (the “City”), and in such capacity we have acted as counsel (“Issuer’s Counsel”) to Community Facilities District No. 2022-3 (Verano) the City of Wildomar (the “Community Facilities District”) in connection with the issuance of the abovereferenced bonds (the “Bonds”). In such capacity, we have been asked to render this opinion in connection with Section 7(F)(8) of that certain Bond Purchase Agreement, dated [Pricing Date] (the “Bond Purchase Agreement”), by and between Stifel, Nicolaus & Company, Incorporated, as underwriter, and the Community Facilities District, relating to the Bonds. All capitalized terms used herein but not otherwise defined shall have the meanings ascribed to them in the Bond Purchase Agreement.
In rendering this opinion, we have examined and relied upon originals or copies of the following upon which, with your permission, we are relying, without further inquiry or investigation (although we advise you that we have no actual knowledge to the contrary of any matters related thereto): (i) the Community Facilities District Resolution of Issuance, (ii) the Formation Documents, including Resolution No. 2022-56, Resolution No. 2022-57, Resolution No. 2022-67, Resolution No. 2022-68, Resolution No. 2022-69 and Ordinance No. 227, (iii) the Community Facilities District Documents, and (iv) the Official Statement, relating to the Bonds, and we have made such other investigations of law and facts as we have deemed necessary to render the following opinions.
Acceptance of this opinion letter by you shall conclusively operate as your acknowledgement that this opinion letter is limited to and addresses all of the specific legal issues that are to be dealt with in our opinions set forth herein.
The opinions expressed herein are based on an analysis of existing statutes, regulations, rulings and court decisions and cover certain matters not directly addressed by such authorities. Such opinions may be affected by actions taken or omitted or events occurring after the date hereof. We have not 921
D-2
undertaken to determine, or to inform any person, whether any such actions or events are taken or do occur.
In our examination, we have assumed, without independent investigation, the authenticity of all documents submitted to us as originals, of all documents submitted to us as certified or photostatic copies and the authenticity of the originals of such latter documents and the accuracy of the statements and representations contained in such documents. In addition, we have assumed the authority of and due execution by each of the parties to the documents other than the City and the Community Facilities District.
Whenever a statement herein is qualified by "to our knowledge," it shall be deemed to indicate that, during the course of my representation of the City in connection with this transaction, no information that would give us current actual knowledge of the inaccuracy of such statement has come to our attention. We have not, however, undertaken any independent investigation to determine the accuracy of such statements, and any limited inquiry undertaken by us during the preparation of this opinion letter should not be regarded as such investigation. No inference as to our knowledge of any matters bearing upon the accuracy of any such statements should be drawn from the fact of our representation of the City.
Our opinions set forth herein do not extend to, and we express no opinions herein with respect to, any laws other than the laws of the State of California, but exclusive of the tax and securities laws, rules and regulations of the State of California and the laws of the State of California relating to debt limitations and restrictions applicable to public entities.
Based on the foregoing, we hereby advise you that, as of the date hereof, we are of the opinion that:
(i) the City is a municipal corporation and general law city, duly organized and existing under the Constitution and the laws of the State of California; (ii) the Community Facilities District is duly organized and validly existing as a community facilities district under and by virtue of the Constitution and laws of the State of California (including the Community Facilities District Act), and has all requisite power and authority thereunder:
(a) to adopt the Community Facilities District Resolution of Issuance, and to enter into, execute, deliver and perform its covenants and agreements under the Community Facilities District Documents; (b) to approve and authorize the use, execution and distribution of the Preliminary Official Statement and the Official Statement; (c) to issue, sell, execute and deliver the Bonds; (d) to pledge the Net Taxes as contemplated by the Indenture; and (e) to carry on its activities as currently conducted; (iii) the Community Facilities District Resolution of Issuance and the Formation Documents have been duly adopted at meetings of the City Council of the City, which were called and held pursuant to law and with all public notice required by law and at which a quorum was present and acting throughout, and the Community Facilities District Resolution of Issuance and the Formation Documents are in full force and effect and have not been modified, amended, rescinded or repealed since the respective dates of their adoption;
(iv) the Community Facilities District Documents and the Official Statement have been duly authorized, executed and delivered by the Community Facilities District and constitute the legal, valid and binding obligations of the Community Facilities District enforceable against the Community 922
D-3
Facilities District in accordance with their terms, subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors’ rights, to the application of equitable principles where equitable remedies are sought and to the exercise of judicial discretion in appropriate cases or seeks to restrain or to enjoin the development of property within the Community Facilities District; (v) except as may be stated in the Official Statement, there is no action, suit, proceeding or investigation before or by any court, public board or body pending (notice of which has been served on the City or the Community Facilities District) or, to our knowledge, threatened wherein an unfavorable decision, ruling or finding would: (a) affect the creation, organization, existence or powers of the City or the Community Facilities District, or the titles of their members and officers to their respective offices; or (b) affect the validity of the Community Facilities District Documents or restrain or enjoin the repayment of the Bonds or in any way contest or affect the validity of the Community Facilities District Documents or contest the authority of the Community Facilities District to enter into or perform its obligations under any of the Community Facilities District Documents or under which a determination adverse to the City or Community Facilities District would have a material adverse effect upon the financial condition or the revenues of the City or Community Facilities District, questions the right of the Community Facilities District to use Special Tax levied within the Community Facilities District for the repayment of the Bonds or affects in any manner the right or ability of the Community Facilities District to collect or pledge the Special Tax levied within the Community Facilities District for the repayment of the Bonds; (vi) the execution and delivery of the Bonds and the Community Facilities District Documents, and compliance with the provisions of each, will not conflict with or constitute a breach of or default under any loan agreement, note, ordinance, resolution, indenture, contract, agreement or other instrument of which the Community Facilities District is a party or is otherwise subject or bound, a consequence of which could be to materially and adversely affect the ability of the Community Facilities District to perform its obligations under the Bonds or the Community Facilities District Documents;
(vii) all approvals, consents, authorization, elections and orders of or filings or registrations with any governmental authority, board, agency or commission having jurisdiction which would constitute a condition precedent to, or the absence of which would materially adversely affect, the ability of the Community Facilities District, to perform its obligations under the Bonds or the Community Facilities District Documents, have been obtained or made, as the case may be, and are in full force and effect;
(viii) The information contained in the Preliminary Official Statement, as of its date and as of the date hereof and the Official Statement as of its date and as of the Closing Date under the caption “ABSENCE OF LITIGATION” does not contain any untrue statement of a material fact and does not omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and (ix) To our knowledge, the Community Facilities District is not in breach of or default under any applicable law or administrative regulation of the State or any applicable judgment or decree or any loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the Community Facilities District is a party or is otherwise subject, which breach or default would materially adversely affect the Community Facilities District’s ability to enter into or perform its obligations under the Community Facilities District Documents, and no event has occurred and is continuing which, with the passage of time or the giving of notice, or both, would constitute a default 923
D-4
or an event of default under any such instrument and which would materially adversely affect the Community Facilities District’s ability to enter into or perform its obligations under the Community Facilities District Documents.
This letter is furnished by us as Issuer’s Counsel. Other than the City and the Community Facilities District, no attorney-client relationship has existed or exists between the City Attorney and you in connection with the Bonds or by virtue of this letter. We disclaim any obligation to update this letter. This letter is delivered to you, is solely for your benefit and is not to be used, circulated, quoted or otherwise referred to or relied upon for any other purpose or by any other person; provided, however, a copy may be included in the transcript of the proceedings for the Bonds. This letter is not intended to, and may not, be relied upon by owners of the Bonds.
We bring to your attention the fact that our conclusions are an expression of professional judgment and are not a guarantee of a result.
City Attorney
924
B-1
EXHIBIT E
$[PAR]
COMMUNITY FACILITIES DISTRICT NO. 2022-3 (VERANO)
OF THE CITY OF WILDOMAR
SPECIAL TAX BONDS, SERIES 2024
FORM OF ISSUE PRICE CERTIFICATE
The undersigned, on behalf of Stifel, Nicolaus & Company, Incorporated (“Stifel”) hereby certifies as set forth below with respect to the sale and delivery of the above-captioned obligations (the “Bonds”).
1. Sale of the General Rule Maturities. As of the date of this certificate, for each Maturity of the General Rule Maturities, the first price at which at least 10% of such Maturity was sold to the Public is the respective price listed in Schedule A.
2. Initial Offering Price of the Hold-the-Offering-Price Maturities. (a) Stifel offered the Hold-the-Offering-Price Maturities to the Public for purchase at the respective initial offering prices listed in Schedule A (the “Initial Offering Prices”) on or before the Sale Date. A copy of the pricing wire or equivalent communication for the Bonds is attached to this certificate as Schedule B.
(b) As set forth in the Bond Purchase Agreement, dated [Pricing Date], by and between Stifel, as the Underwriter (as defined below), and the Issuer (as defined below), Stifel has agreed in writing that: (i) for each Maturity of the Hold-the-Offering-Price Maturities, it would neither offer nor sell any of the Bonds of such Maturity to any person at a price that is higher than the Initial Offering Price for such Maturity during the Holding Period for such Maturity (the “hold-the-offering-price rule”); and (ii) any selling group agreement shall contain the agreement of each dealer who is a member of the selling group, and any third-party distribution agreement shall contain the agreement of each broker-dealer who is a party to the third-party distribution agreement, to comply with the hold-theoffering-price rule. Pursuant to such agreement, no Underwriter has offered or sold any Maturity of the Hold-the-Offering-Price Maturities at a price that is higher than the respective Initial Offering Price for that Maturity of the Bonds during the Holding Period.
3. Defined Terms.
(a) General Rule Maturities means those Maturities of the Bonds listed in Schedule A hereto as the “General Rule Maturities.”
(b) Hold-the-Offering-Price Maturities means those Maturities of the Bonds listed in Schedule A hereto as the “Hold-the-Offering-Price Maturities.” (c) Holding Period means, with respect to a Hold-the-Offering-Price Maturity, the period starting on the Sale Date and ending on the earlier of (i) the close of the fifth business day after the Sale Date (which Sale Date is [Pricing Date]), or (ii) the date on which Stifel has sold at least 10% of 925
B-2
such Hold-the-Offering-Price Maturity to the Public at prices that are no higher than the Initial Offering Price for such Hold-the-Offering-Price Maturity.
(d) Issuer means Community Facilities District No. 2022-3 (Verano) of the City of Wildomar.
(e) Maturity means Bonds with the same credit and payment terms. Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate maturities.
(f) Public means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a related party to an Underwriter.
The term “related party” for purposes of this certificate generally means any two or more persons who have greater than 50 percent common ownership, directly or indirectly. (g) Sale Date means the first day on which there is a binding contract in writing for the sale of a Maturity of the Bonds. The Sale Date of the Bonds is [Pricing Date]. (h) Underwriter means: (i) any person that agrees pursuant to a written contract with the Issuer (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public; and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (i) of this paragraph to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a third-party distribution agreement participating in the initial sale of the Bonds to the Public).
The representations set forth in this certificate are limited to factual matters only. Nothing in this certificate represents Stifel’s interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The undersigned understands that the foregoing information will be relied upon by the Issuer with respect to certain of the representations set forth in the Tax Certificate and with respect to compliance with the federal income tax rules affecting the Bonds, and by Stradling Yocca Carlson & Rauth LLP, Newport Beach, California, in connection with rendering its opinion that the interest on the Bonds is excluded from gross income for federal income tax purposes, the preparation of the Internal Revenue Service Form 8038-G, and other federal income tax advice that it may give to the Issuer from time to time relating to the Bonds. The certifications contained herein are not necessarily based on personal knowledge, but may instead be based on either inquiry deemed adequate by the undersigned or institutional knowledge (or both) regarding the matters set forth herein.
STIFEL, NICOLAUS & COMPANY,
INCORPORATED
By:
Name:
Dated: [Closing Date]
926
B-3
SCHEDULE A
SALE PRICES OF THE GENERAL RULE MATURITIES AND INITIAL OFFERING
PRICES OF THE HOLD-THE-OFFERING-PRICE MATURITIES
(Attached)
927
E-4
SCHEDULE B
PRICING WIRE OR EQUIVALENT COMMUNICATION
(Attached)
928
APPRAISAL REPORT
COVERING
Community Facilities District No. 2022-3 (Verano)
of the City of Wildomar
DATE OF VALUE: SUBMITTED TO:
April 2, 2024 City of Wildomar
23873 Clinton Keith Rd., Suite 110
Wildomar, CA 92595
Attn: Heidi Schrader
Administrative Services Director
DATE OF REPORT: SUBMITTED BY:
April 15, 2024 Stephen G. White, MAI
1801 Lexington Dr.
Fullerton, CA 92835
929
April 15, 2024
City of Wildomar Re: Community Facilities District No. 2022-3 23873 Clinton Keith Rd., Suite 110 (Verano) of the City of Wildomar Wildomar, CA 92595
Attn: Heidi Schrader
Administrative Services Director
Dear Ms. Schrader:
In accordance with your request and authorization, I have completed an appraisal of the taxable properties within the above-referenced Community Facilities District (CFD). These properties consist of 77 single-family lots that are being developed by KB Home with a neighborhood of homes called Verano. As of the April 2, 2024 date of value for this appraisal there were 45 completed-closed homes (closed builder sales), 8 completedunclosed homes (including the 2 models), 16 homes under construction, and 8 vacant lots.
The purpose of this appraisal is to estimate the aggregate market value of the as is condition of these taxable properties, with the values allocated to Individual Owners (completedclosed homes) and to Builder Ownership (completed-unclosed homes, homes under construction and vacant lots). This appraisal reflects the proposed CFD bond financing, with the effective tax rate indicated at an average of 1.94% based on the average of the appraised value for the completed-closed homes and including special taxes of this CFD and other overlapping debt.
Based on the general inspections of the properties and analysis of matters pertinent to value, the following conclusions of market value have been arrived at, subject to the Assumptions and Limiting Conditions, and as of April 2, 2024:
No. Market
Ownership Lots Value
Individual Owners (completed-closed homes): 45 $27,450,000 Builder Ownership (completed-unclosed homes): 8 $3,920,000 Builder Ownership (homes under construction): 16 $5,360,000 Builder Ownership (vacant lots): 8 $1,600,000
77 $38,330,000
$38,330,000
(THIRTY-EIGHT MILLION THREE HUNDRED THIRTY THOUSAND DOLLARS) 930
MS. HEIDI SCHRADER
APRIL 15, 2024
PAGE 2
The following is the balance of this 35-page Appraisal Report which includes the Certification, Assumptions and Limiting Conditions, definitions, property data, exhibits, valuation and market data from which the value conclusions were derived.
Sincerely,
Stephen G. White, MAI
(State Certified General Real Estate
Appraiser No. AG013311)
SGW:sw
Ref: 24012
931
TABLE OF CONTENTS
PAGES
Appraisal Summary …………………………………………………... 5
Certification …………………………………………………………... 6
Assumptions and Limiting Conditions ………………………………… 7-8
Purpose and Intended Use/User of the Appraisal, Scope of the Appraisal, Date of Value, Property Rights Appraised,
Definitions, Exposure Time, Ownership/Sales History ………. 9-10
PROPERTY DATA
Location Map, Location, General Area Description, Aerial Photo, Legal Description, Assessor Data, No. Lots/Lot Sizes,
Streets & Access, Assessor Maps, Utilities, Zoning/General Plan/Approvals, School District/Schools, Topography/
Views, Drainage/Flood Hazard, Fire Hazard Zone, Soil/
Geologic/Seismic Conditions, Environmental Conditions,
Title Report, Residential Market Overview, Map of Verano, Description of Homes/Status of Construction,
Homeowners Association, Highest & Best Use ………………… 11-23
VALUATION
Method of Analysis, Analysis of Completed-Closed Homes, Analysis of Completed-Unclosed Homes, Analysis of
Homes Under Construction, Analysis of Vacant Lots,
Conclusion of Value ……….……………………………….…… 24-32
ADDENDA
Qualifications of Appraiser ……………………………………………… 33-35
932
5 APPRAISAL SUMMARY
Property Type: 45 completed-closed homes, 8 completed-unclosed homes, 16 homes under construction & 8 vacant lots
Ownership: Individual Owners (completed-closed homes)
Builder Ownership (completed-unclosed homes,
homes under construction & vacant lots)
Date of Value/Effective
Date of the Appraisal: April 2, 2024
Date of Report: April 15, 2024
Location: East of Monte Vista Dr., ±½ mile south of Bundy Canyon Rd., Wildomar
APN: 367-140-015 to 022
367-141-001 to 016
367-142-001 to 007
367-520-001 to 019
367-521-001 to 018
367-522-001 to 009
Legal Description: Lots 1 to 77 of Tract No. 37476
Lot Sizes: ±7,500 s.f. minimum/8,727 s.f. average
Home Sizes: 1,508 s.f. to 2,238 s.f.
Years Built: 2023 to current/ongoing
Highest & Best Use: As Improved/As Planned
Method of Analysis: Sales Comparison Approach/Mass Appraisal Value Conclusions: 45 Completed-Closed Homes: $27,450,000 8 Completed-Unclosed Homes: $ 3,920,000
16 Homes Under Construction: $ 5,360,000
8 Vacant Lots: $ 1,600,000
Total: $38,330,000
933
6 CERTIFICATION
I certify that, to the best of my knowledge and belief:
• The statements of fact contained in this report are true and correct. • The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions and are my personal, impartial, and unbiased professional analyses, opinions, and conclusions.
• I have no present or prospective interest in the properties that are the subject of this report, and no personal interest with respect to the parties involved. • I have no bias with respect to the properties that are the subject of this report or to the parties involved with this assignment.
• My engagement in this assignment was not contingent upon developing or reporting predetermined results.
• My compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of the appraisal.
• I have made a general inspection of the properties that are the subject of this report. • No one provided significant real property appraisal assistance to the person signing this Certification, other than data research by my associate, Kirsten Patterson. • I have performed no services, as an appraiser or in any other capacity, regarding the subject properties within the three-year period prior to accepting this assignment. • The reported analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute. • The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives.
As of the date of this report, I have completed the continuing education program for Designated Members of the Appraisal Institute.
Stephen G. White, MAI
(State Certified General Real Estate
Appraiser No. AG013311)
934
7 ASSUMPTIONS AND LIMITING CONDITIONS
This appraisal has been based upon the following assumptions and limiting conditions:
1. No responsibility is assumed for the legal descriptions provided or for matters pertaining to legal or title considerations. Title to the properties is assumed to be good and marketable unless otherwise stated.
2. The properties are appraised free and clear of any or all liens or encumbrances unless otherwise stated.
3. Responsible ownership and competent property management are assumed.
4. The information furnished by others is believed to be reliable, but no warranty is given for its accuracy.
5. All engineering studies, if applicable, are assumed to be correct. Any plot plans or other illustrative material in this report are included only to help the reader visualize the property.
6. It is assumed that there are no hidden or unapparent conditions of the properties, subsoil, or structures that render them more or less valuable. No responsibility is assumed for such conditions or for obtaining the engineering studies that may be required to discover them.
7. It is assumed that the properties are in full compliance with all applicable federal, state and local environmental regulations and laws unless the lack of compliance is stated, described and considered in the appraisal report.
8. It is assumed that the properties conform to all applicable zoning and use regulations and restrictions unless a nonconformity has been identified, described and considered in the appraisal report.
9. It is assumed that all required licenses, certificates of occupancy, consents and other legislative or administrative authority from any local, state or national government or private entity or organization have been or can be obtained or renewed for any use on which the value estimates contained in the report are based.
10. It is assumed that the use of the land and improvements is confined within the boundaries or property lines of the properties described and that there are no encroachments or trespasses unless noted in the report.
11. Unless otherwise stated in this report, the existence of hazardous materials, which may or may not be present on the properties, was not observed by the appraiser.
However, the appraiser is not qualified to detect such substances. The presence of such substances may affect the value of the property, but the values estimated in this 935
8 ASSUMPTIONS AND LIMITING CONDITIONS, Continuing
appraisal are based on the assumption that there is no such material on or in the properties that would cause a loss in value. No responsibility is assumed for such conditions or for any expertise or engineering knowledge required to discover them.
The client should retain an expert in this field, if desired.
12. Possession of this report, or a copy thereof, does not carry with it the right of publication, unless otherwise authorized. It is understood and agreed that this report will be utilized in the Official Statement, as required for the within-referenced CFD bond issuance.
13. The appraiser, by reason of this appraisal, is not required to give further consultation or testimony or to be in attendance in court with reference to the properties in question unless arrangements have previously been made.
EXTRAORDINARY ASSUMPTIONS
1. It has been assumed that there are no soil, geologic, seismic or environmental conditions that would negatively impact the existing or planned uses or valuation of the subject properties.
2. An estimate of the remaining costs and fees to get the subject lots from their as is condition to finished lot condition has been provided by the builder/property owner, and these estimates have been relied upon in this appraisal as being reasonably accurate and reliable; in addition, the valuations have reflected the proposed CFD bond financing such that the deductions of estimated remaining costs/fees do not include any amounts that are to be funded by the planned CFD bond proceeds. 936
9 PURPOSE AND INTENDED USE/USER OF THE APPRAISAL
The purpose of this appraisal is to estimate the market value of the as is condition of the taxable properties located within Community Facilities District No. 2022-3 of the City of Wildomar (Verano), reflecting the proposed CFD bond financing. It is intended that this Appraisal Report is to be used by the client, consisting of the City of Wildomar, and other appropriate parties as part of the planned CFD bond issuance.
SCOPE OF THE APPRAISAL
It is the intent of this appraisal that all appropriate data considered pertinent in the valuation of the subject properties be collected, confirmed and reported in an Appraisal Report, in conformance with the Uniform Standards of Professional Appraisal Practice and the guidelines of the California Debt and Investment Advisory Commission. The scope of work has included an identification of the appraisal problem to be solved, which in this case is the market value of the taxable subject properties in as is condition as of the date of value of the appraisal; a general inspection of the subject properties and their surroundings; obtaining of pertinent property data on the subject properties, including review of various maps and documents relating to the properties and the home development; obtaining of comparable home sales and land sales from a variety of sources; analysis of all of the data to the value conclusions; and completion of the Appraisal Report.
DATE OF VALUE (EFFECTIVE DATE OF THE APPRAISAL)
The date of value or effective date of the appraisal is April 2, 2024.
PROPERTY RIGHTS APPRAISED
This appraisal is of the fee simple interest in the subject properties, subject to the applicable CFD special tax and assessment liens.
DEFINITION OF MARKET VALUE
The most probable price, as of a specified date, in cash, or in terms equivalent to cash, or in other precisely revealed terms, for which the specified property rights should sell after reasonable exposure in a competitive market under all conditions requisite to a fair sale, with the buyer and seller each acting prudently, knowledgeably, and for self-interest, and assuming that neither is under undue duress. (The Dictionary of Real Estate Appraisal, Seventh Edition)
DEFINITION OF FEE SIMPLE INTEREST (ESTATE)
Absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power, and escheat. (The Dictionary of Real Estate Appraisal, Seventh Edition) 937
10 DEFINITION OF MASS APPRAISAL
The process of valuing a universe of properties as of a given date using standard methodology, employing common data, and allowing for statistical testing. (USPAP, 2020- 2021 ed.) Often associated with real property tax assessment valuation. (The Dictionary of Real Estate Appraisal, Seventh Edition)
DEFINITION OF FINISHED LOT
This term describes the condition of residential lots in a single-family subdivision for detached homes in which the lots are fully improved and ready for homes to be built. This reflects that the lots have all development entitlements, infrastructure improvements completed, finish grading completed, all in-tract utilities extended to the property line of each lot, street improvements completed, common area improvements/landscaping (associated with the tract) completed, resource agency permits (if necessary), and all development fees paid, exclusive of building permit fees, in accordance with the conditions of approval of the specific tract map.
EXPOSURE TIME
This is defined as the estimated length of time the property interest being appraised would have been offered on the market prior to the hypothetical consummation of a sale at market value on the effective date or date of value of the appraisal. Assuming a reasonable marketing effort and at or reasonably near market value, I have concluded that the exposure time for the subject homes as well as the bulk of homes under construction and vacant lots would have been within 4 months for a sale to be negotiated, and with appropriate escrow time for the sales to close.
OWNERSHIP/SALES HISTORY
KB Home Coastal Inc. acquired the land for the subject neighborhood from Front Property, LLC by deed recorded August 2, 2021 at an indicated price of $5,250,000, but also including adjacent land. At that time, the land was in unimproved condition with an approved tentative tract map for the planned subdivision.
As of the April 2, 2024 date of value, individual owners owned 45 of the lots (Lots 1 to 12, 30, 32 to 48, 60 to 71, 74, 76 & 77) consisting of the completed-closed homes, and KB Home Coastal Inc. owned 32 of the lots (Lots 13 to 29, 31, 49 to 59, 72, 73 & 75), consisting of the completed-unclosed homes, homes under construction and vacant lots. The closed builder sales closed and recorded from May 31, 2023 through April 2, 2024 at net sale prices ranging from $514,724 to $705,050. In addition, as of March 28, 2024 there were 18 pending builder sales which had scheduled closing dates from April 10 through July 24, 2024.
938
11 LOCATION MAP
939
12 PROPERTY DATA
LOCATION
The subject neighborhood of Verano is located ±700’ east of Monte Vista Dr. and just under ½ mile south of Bundy Canyon Rd., in the City of Wildomar. This location is in the central part of Wildomar, and nearby to the northeast of the 15 Freeway with full interchanges at Bundy Canyon Rd. to the north and Wildomar Trail (formerly Baxter Rd.) to the south.
GENERAL AREA DESCRIPTION
The neighborhood of Verano is located in a semi-rural/developing area that includes much adjacent and nearby vacant land and hilly open space, as well as several neighborhoods of homes, a large church facility, and limited nearby commercial development.
To the north of the Verano neighborhood is the Summerhill neighborhood of 70 homes that were built by KB Home in the past several years, with the homes ranging in size from 1,479 s.f. to 2,206 s.f., and on ±7,200 s.f. minimum lots. A recent resale of one of these homes sold for $525,000 on a short sale basis, and there is a pending sale of a 1,557 s.f. home at $690,000. Farther to the north are several neighborhoods of homes that slope and terrace down to the north and extend to Bundy Canyon Rd.
These homes were built in the 1990’s and range in size from 1,235 s.f. to 2,245 s.f., with recent sales indicating the price range of $516,000 to $650,000.
To the west of the Verano neighborhood the land slopes down to several graded pads of vacant land along the east side of Monte Vista Dr. totaling ±8.5 acres. Approvals were processed concurrently with the subject neighborhood for a business park that would include three single and multi-tenant buildings and a 152-room hotel.
Reportedly, residential re-entitlement of this land might be pursued, though City approval of such is uncertain. To the northwest is a 6.5-acre graded and vacant site along the east side of Monte Vista Dr. with approved plans for 62 townhomes and farther to the west, beyond Monte Vista Dr., is mostly vacant land extending to the 15 Freeway which angles from northwest to southeast through this area.
To the southwest and south of the Verano neighborhood extending east from Monte Vista Dr. is an older home on a ±2-acre lot, then the ±47-acre Cornerstone Community Church/Christian School campus which also includes several older homes and vacant parcels on Via Carnaghi, and a 28.5-acre hillside parcel which slopes up to the east. South of the church are several older residences on large lots and vacant and hilly land.
To the east of the Verano neighborhood the land slopes moderately to steeply up into a hilly area, with 3 estate lots of 2.1 acres to 3.3 acres. To the northeast, the adjacent
9.15-acre parcel is being preserved as open space. Farther to the northeast and 940
13 941
14 GENERAL AREA DESCRIPTION, Continuing
southeast are large areas of vacant and hilly land with a mix of residences on large estate size lots as well as equestrian and agricultural uses.
LEGAL DESCRIPTION
The taxable properties are described as Lots 1 through 77 of Tract No. 37476, in the City of Wildomar, County of Riverside, State of California, as per Map recorded in Book 485, Pages 43 through 55 of Maps, in the Office of the County Recorder of said County.
ASSESSOR DATA-2023/2024
The 77 lots comprise the following Assessor Parcel Nos.:
367-140-015 to 022
367-141-001 to 016
367-142-001 to 007
367-520-001 to 019
367-521-001 to 018
367-522-001 to 009
The current assessed values for 75 of the parcels are land only and range from $37,356 to $51,864, and for the 2 model homes the assessed values are $243,100 and $311,400. The tax rate area is 025-022 which has an indicated tax rate of 1.03570%, but the effective tax rate including special taxes for this CFD and other overlapping debt is an average of 1.94% based on the appraised average value for the completedclosed homes.
NO. OF LOTS/LOT SIZES
The subject neighborhood comprises a total of 77 single-family lots that are considered as a minimum size of ±7,500 s.f., and typically 65-66’ wide by varying depths. Per the Tract Map, the actual lot sizes range from 7,507 s.f. to 10,596 s.f., or an average of 8,727 s.f. However, due to the terracing between lots, many of the lots include side and/or rear slope areas.
STREETS AND ACCESS
Primary access to the subject Verano neighborhood is by Monte Vista Dr. which is a two-lane street, not fully widened or improved on both sides, that extends south from Bundy Canyon Rd. and continues southerly to Wildomar Trail. Summer Sage Way extends east from Monte Vista Dr. and into the Summerhill neighborhood which is adjacent to the north of the subject neighborhood. Sappington Way then extends to the south from Summer Sage Way and into the subject neighborhood. Quail Creek Ln. also extends south into Verano from the Summerhill neighborhood. 942
15 943
16 944
17 STREETS AND ACCESS, Continuing
Secondary access is from Bundy Canyon Rd. and indirectly through the adjacent neighborhoods. The in-tract streets on which the subject lots front and have direct access are Hilltopper Way, Salvation Way and Quail Creek Ln. These in-tract streets are typical two-lane paved residential streets, with curbs, gutters and sidewalks.
UTILITIES
All utilities are completed to the community, and have been installed in the major streets and in-tract streets as part of the development of the community. The utilities are provided as follows:
• Water & Sewer: Elsinore Valley Municipal Water District • Electric: Southern California Edison Company
• Gas: Southern California Gas Company
ZONING/GENERAL PLAN/APPROVALS
The zoning designation for the subject portion of the tract is R-1 (One-Family Dwelling Zone) which permits single family residential development on 7,200 s.f. minimum size lots and a lot coverage of no more than 50%. The General Plan designation is MDR (Medium Density Residential) which permits single family residential uses with densities of 2 to 5 dwelling units per acre. These designations permit the residential development that is completed and ongoing on the subject lots.
Tentative Tract Map No. 37476 was approved by the Wildomar City Council on February 13, 2019. The approved final tract map for Tract No. 37476 was recorded on September 15, 2022 in Book 485 of Maps, Pages 43-55.
SCHOOL DISTRICT/SCHOOLS
The subject neighborhood is located within the boundaries of the Lake Elsinore Unified School District. It is served by Ronald Reagan Elementary School (less than 2 miles to the southeast in Wildomar); David A. Brown Middle School (2 miles to the southwest in Wildomar); and Elsinore High School (1 mile to the west in Wildomar).
TOPOGRAPHY/VIEWS
The lots in the subject neighborhood are terraced up to the east and terraced down to the south; approximately at grade with the homes adjacent to the north; above grade of the land to the west and south; and below grade of the estate lots and slopes up to the hills to the east. This results in city lights views of the Wildomar valley and distant mountains to the south/southwest for many of the lots on the south sides of Hilltopper Way and Salvation Way.
945
18 DRAINAGE/FLOOD HAZARD
Drainage is to the streets and in curbs within the neighborhood, with drainage flows westerly toward the Bundy Canyon Channel, which is a concrete-lined channel along the east side of Monte Vista Dr. Per FEMA Flood Zone Panel No. 060221-2682G dated August 28, 2008, the subject neighborhood is located in Zone X which indicates areas that are determined to be outside of the 100- and 500-year floodplain and out of the Special Flood Hazard Area.
FIRE HAZARD ZONE
Per the County of Riverside, the subject neighborhood is located in a Very High Fire Hazard Severity zone within a Local Responsibility Area. This is consistent with the CalFire Fire Hazard Severity Zone map. The builder indicates that the required mitigation was to replace the wrought iron fencing on Lots 1 to 6 with block wall because of the fire danger to these lots.
SOIL/GEOLOGIC/SEISMIC CONDITIONS
It is noted that the subject properties are not located in a State of California Earthquake Fault Hazard Zone, with the nearest active fault being the Elsinore/Temecula fault about 2.2 miles to the southwest. In addition, the land comprising the subject neighborhood is not subject to liquefaction.
This appraisal has assumed that all grading of the subject lots and overall neighborhood was properly completed, and any required mitigation for soil or geologic conditions was completed as part of the land development work for the tract. Thus, it is assumed that there are no soil, geologic or seismic conditions that would negatively impact the continued or planned use of the subject properties.
ENVIRONMENTAL CONDITIONS
The builder has indicated that all environmental approvals have been obtained and all mitigation items are complete. It has been assumed that there are no other environmental conditions, including endangered species or significant habitat, watercourses or wetlands that would have a negative effect on the existing homes, homes under construction or vacant lots.
TITLE REPORT
The Sixteenth Amended Preliminary Report dated March 19, 2024 by Fidelity National Title Builder Services, and covering the parcels in Tract No. 37476 owned by KB Home Coastal Inc. and Front Property LLC, has been reviewed. Pertinent exceptions to title include the following:
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19 TITLE REPORT, Continuing
• Pending assessment for CFD No. 2011-1 (Wildomar Parks) recorded February 4, 2011. • Notice of Special Tax Lien for the District 2022-3 (Verano) recorded December 22, 2022, and amended: District 2022-1 (Services) recorded December 22, 2022. • Various easements and agreements for off-site work; construction reimbursement; right of entry, grading and permanent slope; maintenance and construction of water quality appurtenances; storm drain; detention basin; landscape maintenance and construction; public trail purposes; public utilities; and stormwater management/BMP Facilities.
These exceptions to title for the Community Facilities Districts, other agreements, and the various easements are fairly typical for a residential subdivision such as the subject. These items have been incorporated into the approvals and the tract map for the neighborhood so as to provide for the lots to be developable with homes that have been completed and with construction currently ongoing.
RESIDENTIAL MARKET OVERVIEW
Interest rates and inventory were the watchwords for the national housing market in 2023 and continue front and center in the Spring homebuying season of 2024. With most U.S. borrowers paying less than 4% interest on existing home mortgage loans, only sellers with a high incentive or need to sell are listing their properties for sale resulting in record low inventory. The higher interest rates, which have more than doubled since 2021 and have been heavily influenced by Federal Reserve Board actions to curb inflation, have put significant pressure on buyer affordability.
According to data provided by Freddie Mac, the average rate on a 30-year fixed loan was 3.22% in January 2022 and a year later it had doubled, reaching 6.48%. The rate rose above 7.0% in mid-August 2023 and peaked at 7.79% for week ending October 26 before declining below 7% in December. Since then the rate has hovered between 6.6% to 6.9%, and as of April 11, the 30-year fixed rate was 6.88%. The overall decrease in rates over the last six months has come as welcome relief to buyers and market participants and the anticipation of positive economic conditions have the Federal Reserve Board still considering rate cuts in the latter part of 2024.
Home sales figures for February 2024 released by CoreLogic (the most recent available) show year over year increases in both sales volume and median sale price across Southern California. The median sale price for the six-county region was $740,000, up $35,000 from January and up $55,000, or 8%, from February 2023.
Home sales were also up, with a total of 12,430 new and existing home sales recorded in February 2024 in Southern California, up 12% from 11,068 in February 2023. But transactions were still down more than 25% from the monthly average.
According to Redfin, there were 39,248 active listings in the six-county region in February which was 33% below the average for a February and the lowest number for the month since 2011.
947
20 RESIDENTIAL MARKET OVERVIEW, Continuing
According to CoreLogic, a total of 2,576 sales were recorded of new and existing single-family homes and condos in Riverside County in February 2024, up from 2,259 in January and up 10.3% year over year. The median sale price of $567,500 was up from $550,000 in January and up 5.1% from $540,000 in February 2023.
In the city of Wildomar, according to Redfin, there were a total of 24 homes sold in February 2024, up from 22 in February 2023. The median price was $595,000, up
2.6% year over year and on average it took a home 27 days on the market to sell, down from an average of 33 days in February 2023.
More specific to the subject Verano neighborhood, sales rates have been good with 45 total closed builder sales from May 2023 through April 2, 2024, including 15 closed sales in 2024. In addition, as of March 28, 2024 there were a total of 18 pending builder sales that were due to close from mid-April through the end of July 2024.
Market experts have varying opinions as to future increases or decreases in home prices and market activity in the coming year. While some cite population estimates and a growing number of Millennials poised to enter the home-buying market, others note the rising costs of living and narrowing affordability. According to the California Association of Realtors 4th Quarter Housing Affordability report, only 19% of households in Riverside County could afford to buy a median-priced home during the fourth quarter of 2023. This percentage rate reflects a median purchase price of $619,000, a minimum monthly payment of $4,140 including both taxes and insurance, and a minimum qualifying income of $165,600.
The hope for positive data regarding decelerating inflation followed by possible rate cuts by the Federal Reserve Board in 2024 have given many reason for optimism, though this is still uncertain. In addition, potential impact to sale prices from recent and ongoing changes to broker commission rules in the industry represent another unknown. As 2024 continues, analysts will be keeping an eye on issues of affordability, inventory, inflation and jobs reports, interest rates, and ongoing geopolitical uncertainties.
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21 949
22 DESCRIPTION OF HOMES/STATUS OF CONSTRUCTION
These 77 lots are being developed by KB Home with a neighborhood of homes called Verano. As of the April 2, 2024 date of value, there were 45 completedclosed homes (closed builder sales); 8 completed-unclosed homes (including the 2 models); 16 homes under construction of which 8 were estimated to be ±90% completed, 4 were estimated to be ±75% completed, and 4 were estimated to be ±50% completed; and 8 vacant lots in near finished condition (including the parking lot for the models).
(Note: The 45 completed-closed homes are Lots 1 to 12, 30, 32 to 48, 60 to 71, 74, 76 & 77; the 8 completed-unclosed homes are Lots 29, 31, 50, 52, 53, 72, 73 & 75; the 8 homes at ±90% completion are Lots 13 to 16 & 25 to 28; the 4 homes at ±75% completion are Lots 21 to 24; the 4 homes at ±50% completion are Lots 17 to 20; and the 8 vacant lots are Lots 49, 51, & 54 to 59).
There are four floor plans, and per marketing information these plans are described as follows:
Plan 1508: 1,508 s.f., one-story, with 3 bedrooms, 2 baths, great room-kitchen with small pantry, and laundry; plus 2-car garage and covered front porch; optional covered patio off of great room.
Plan 1586: 1,586 s.f., one-story, with 3 bedrooms, 2 baths, great room-kitchen with large pantry, and laundry; plus 2-car garage and covered front porch; optional covered patio off of great room.
Plan 1860: 1,860 s.f., one-story, with 3 bedrooms plus den or 4 bedrooms, 3 baths, great room-kitchen with small pantry, and laundry; plus 2-car garage and covered front porch; optional covered patio off of great room.
Plan 2238: 2,238 s.f., one-story, with 4 bedrooms, 2 baths, great room-kitchen with large pantry, and laundry; 2-car garage and covered front/side porch; optional covered patio off of great room.
Per building permit data, the 53 completed homes have floor plan sizes of 1,508 s.f., 1,586 s.f., 1,860 s.f. and 2,238 s.f., with average sizes of 1,793 s.f. for the 45 completed-closed homes and 1,811 s.f. for the 8 completed-unclosed homes.
HOMEOWNERS ASSOCIATION
The Verano neighborhood has a homeowners association (HOA) with monthly dues projected to be $127 at build-out. These dues together with CFD funding cover maintenance of the streets, lighting, common area landscaping, and drainage including the water quality basins at the northwest, southwest and southeast corners of the neighborhood.
950
23 HIGHEST AND BEST USE
The term highest and best use is defined as the reasonably probable and legal use of vacant land or an improved property, which is physically possible, appropriately supported, financially feasible, and that results in the highest value. The four criteria the highest and best use must meet are legal permissibility, physical possibility, financial feasibility, and maximum productivity. Furthermore, the highest and best use of land or a site as though vacant is defined as among all reasonable, alternative uses, the use that yields the highest present land value, after payments are made for labor, capital, and coordination.
In terms of legal permissibility, single-family residential development is permitted by the zoning/General Plan designations, and by the recorded final tract map for the subject neighborhood. In terms of physical possibility, the lots within the subject neighborhood have been graded to fairly flat buildable pads, and with all needed infrastructure of streets, utilities and drainage completed for the home construction.
In terms of the financial feasibility, as previously discussed in the Residential Market Overview, the current residential market conditions still evidence good demand for new and resale homes in this general area, with indications of prices being stable or slightly increasing. The demand and pricing factors are also evident by the good home sales activity in the subject neighborhood, including the closed and pending builder sales.
In terms of the maximum productivity, this is represented by the homes that have been and are being built on the subject lots, with an appropriate array of home sizes, floor plans and pricing.
In summary, the highest and best use is concluded to be as improved for the completed homes, and as planned for the homes under construction and the remaining vacant lots.
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24 VALUATION
METHOD OF ANALYSIS
The analysis of the completed-closed homes is of the aggregate value on a mass appraisal basis, and by means of the Sales Comparison Approach. Consideration is given to the builder sales of the subject homes; recent sales of other homes in the general area; and new-home pricing from other active projects. For the completedunclosed homes, the analysis considers a discount due to the bulk ownership by the builder with the discount reflecting holding/sales costs, minor finishing costs and profit in order to sell off the homes.
For the homes under construction, a simplified Cost Approach is used in which the value is based on an estimate of construction costs expended plus the estimated value of the vacant lot. The analysis of the vacant lots as if in finished condition is based on the Sales Comparison Approach, considering recent sales of residential land or bulk lots in the general area, and then a deduction for the remaining land development costs and impact fees to get to finished lot condition, reflecting the value of the as is condition.
ANALYSIS OF COMPLETED-CLOSED HOMES
Builder Sales of Subject Homes: The builder sales of these 45 completed homes closed from May 31, 2023 through April 2, 2024 at net sale prices ranging from $514,724 to $705,050, or an average of $601,948 for the average home size of 1,793 s.f., or $335.72 per s.f. It is noted that the net sale price includes the base price plus options and lot premiums, less or net of incentives/mortgage rate buy downs. The options/premiums averaged $41,972 and the incentives averaged $4,668.
The sale dates, or when the sales were negotiated (not the closing dates), ranged from November 30, 2022 through February 23, 2024, with the closing dates previously noted from late May 2023 through early April 2024. Based on the sale dates, the average pricing over different periods of time are shown in the following table:
No. of Time Frame Avg. Avg Home Avg. Avg.
Sales (Contract Dates) Net Price Size (s.f.) Price/s.f. Opt./Prem. Incentives 45 Nov’22-Feb’24 $601,948 1,793 $335.72 $41,972 ($4,668) 13 Nov’22-Mar’23 $585,170 1,770 $330.60 $47,681 ($5,972) 14 Apr-Jun’23 $613,880 1,845 $332.73 $46,196 ($3,595)
9 Jul-Sep’23 $605,421 1,805 $335.41 $32,953 ($3,383)
9 Nov’23-Feb’24 $604,151 1,735 $348.21 $36,175 ($5,739) 45 952
25 ANALYSIS OF COMPLETED-CLOSED HOMES, Continuing
Considering the differences in average home size, this data supports that the average net pricing has increased slightly from the sales that were negotiated earlier to the most recently negotiated sales. In addition, this data indicates that the average amount of options/premiums and incentives has varied slightly over this period of time. However, it is also noted that the 9 most recently negotiated sales have a higher percentage of homes with view premium than for all 45 completed-closed homes.
Thus, the indication at $604,151 supports a close lower limit as an average value for the 45 homes due to the smaller average size being partially offset by the factor of view premiums. Conversely, due to the smaller average size and higher percentage of view premiums, the indication at $348.21 per s.f. supports a firm upper limit indication of average value as follows:
1,793 s.f. @ $348.21/s.f. = $624,341
As of March 28, 2024 there were 18 pending builder sales that were negotiated from August 4, 2023 through March 15, 2024 and were scheduled to close from April 10 through July 24, 2024. The net sale prices indicate the higher range from $562,355 to $697,159 or an average of $617,650, for a slightly larger average home size of 1,816 s.f., or $340.12 per s.f. The average amount for options/premiums is slightly lower at $32,001 and the average amount for incentives is slightly higher at $8,186.
Based on the sale dates, the average pricing over different periods of time are shown in the following table:
No. of Time Frame Avg. Avg Home Avg. Avg.
Sales (Contract Dates) Net Price Size (s.f.) Price/s.f. Opt./Prem. Incentives 18 Aug’23-Mar’24 $617,650 1,816 $340.12 $32,001 ($8,186) 6 Aug’-Nov’23 $614,421 1,899 $323.55 $30,745 ($15,458)
12 Jan-Mar’24 $619,264 1,775 $348.88 $32,629 ($4,550)
18 When considering the differentials in the average home size, it is noted that the net pricing increased fairly significantly from the sales negotiated in the time frame of August to November 2023 to the more current time frame of January to March 2024, while the average amount of incentives decreased during this time. However, it is also noted that a high percentage of the 12 more recently negotiated sales have view premiums. Considering the slightly smaller average home size of 1,775 s.f. in contrast to 1,793 s.f. for the 45 completed-closed homes, but more than offset by the greater percentage of view premiums, the indication at $619,264 supports a firm upper limit indication of average value for the 45 homes. 953
26 ANALYSIS OF COMPLETED-CLOSED HOMES, Continuing
Resales of Homes from Nearby Neighborhoods: Next, recent resales of homes from nearby neighborhoods in Wildomar have been considered. This includes the adjacent Summerhill neighborhood to the north; the neighborhoods to the north of Summerhill and south of Bundy Canyon Rd.; and several other neighborhoods that are north of Bundy Canyon Rd. and east of the 15 Freeway. These sales are shown in order of sale date in the following table:
COE Home Yr. BR/ Stories/ Lot
No. Address Date Price Size Blt BA Garages Size Comments 1 34093 Walnut
Creek Rd.
11/6/23 $516,000 1,646 1991 3/2 1
2 7,405 Typical/average; no HOA; minimal
special assessments
2 33495 View Crest
Dr.
1/26/24 $610,000 1,770 1990 4/2.5 2
2 13,068 Some upgrades but dated; large lot; no
HOA; minimal special assessments
3 22249 Blondon
Ct.
2/9/24 $566,900* 1,549 2002 4/2 2
2 9,583 Some updates; $18,100 concessions;
no HOA; minimal special assessments
4 22463 Shore
View Ct.
2/15/24 $589,200* 1,559 1990 3/2.5 2
2 9,583 Updated; RV parking; $800 concessions; no HOA; min. special assess. 5 33821 Breckenridge Trail2/27/24 $581,300* 1,990 1990 4/3 2 2 7,405 Typical/average; $3,700 concessions;
no HOA; minimal special assessments
6 34165 Pheasant
Run Cir.
2/28/24 $635,000* 2,245 1995 4/3 2
3 7,841 Upgraded/dated; $15,000 concessions;
no HOA; minimal special assessments
7 34320 Quail
Creek Ln.
4/4/24 $525,000 1,557 2021 3/2 1
2 7,945 Short sale; no rear landsc; backs open
space; $84 HOA; $4,553 special
assessments
8 21984 Victorian
Ln.
Escrow ±$718,000 2,246 1985 4/2.5 2
3 10,473 Opendoor sale; upgrades; pool; RV
pkg; no HOA; minimal special assess.
9 22663 Juliet Way Escrow $690,000 1,557 2020 3/2 1
2 8,128 Upgraded; pool/spa/waterslide; view;
$84 HOA; $4,553 special assessments
Avg. $603,489 1,791
*Net of
concessions
In comparison to the subject completed-closed homes, these sales are very similar at the average size of 1,791 s.f. in contrast to 1,793 s.f.; the age from 3 to 39 years, and mostly 22 to 39 years is far inferior to the subject homes as new to about 1 year old; the sales are slightly inferior with some 2-story floor plans, but several are superior with 3-car garages; the lot sizes are fairly similar to the average of the subject lots; the condition ranges from inferior to superior with pools; only one of these sales has a view which is inferior to the percentage of subject homes with views; and the effective tax rates including special assessments are lower for most of the sales.
Overall, it is concluded that these sales support a close but firm lower limit indication of average value for the subject completed-closed homes at $603,489. 954
27 ANALYSIS OF COMPLETED-CLOSED HOMES, Continuing
Other New-Home Pricing: Lastly, a survey was made of current pricing in other new-home neighborhoods in the general area, which is shown in the following table along with the base pricing of the subject homes:
Min. Lot Floor
Project Size (s.f.) CFD Plan (s.f.) Stories Garage Base price Subject 7,500 Yes 1,508 1 2 $572,990
1,586 1 2 $579,990
1,860 1 2 $603,990
2,238 1 2 $630,990
Crimson Hills 5,000 Yes 1,551 1 2 $564,990
(KB Home) 1,751 1 2 $581,990
Lake Elsinore 2,035 1 2 $600,990
2,206 1 2 $615,990
2,528 2 2 $642,990
2,882 2 2 $670,990
Hilltop at Nichols Ranch 4,500 Yes 2,020 2 2 $596,695
(Meritage Homes) 2,177 2 2 $629,295
Lake Elsinore 2,427 2 2 $633,495
Valiant at Heirloom Farms Det. Yes 1,731 2 2 $648,495
(Meritage Homes) Condo 1,883 2 2 $669,295
Temecula 2,155 2 2 $709,295
Initially, it is noted that there is no other new-home competing product in Wildomar.
The locations of the projects in Lake Elsinore are considered to be inferior to the subject, as well as lacking views, being on much smaller lots, and having all or some two-story floor plans. The Temecula location of the third project is far superior to the subject, and far more than offsetting to the small-lot/detached condo product type with all two-story floor plans. Overall, considering these factors, it is concluded that the pricing is generally supportive of the base pricing for the subject homes.
Conclusion: In summary, the indications of average value for the subject homes are a close lower limit indication at $604,151; a close but firm lower limit indication at $603,489; and firm upper limit indications at $619,264 and $624,341. The conclusion is an average value of $610,000 for the 45 completed-closed homes.
ANALYSIS OF COMPLETED-UNCLOSED HOMES
These 8 homes consist of the 6 production homes (5 with pending builder sales due to close in April 2024) and the 2 model homes. The average size is 1,811 s.f. which is only slightly larger than the average size of 1,793 s.f. for the completed-closed homes. Thus, the initial conclusion is the same as for the completed-closed homes, or an average of $610,000. Then, a discount of 20% is made due to being part of the bulk ownership by the builder and reflecting sell-off time, holding/sales costs, minor 955
28 ANALYSIS OF COMPLETED-UNCLOSED HOMES, Continuing
finishing costs and profit. This results in the discounted average value rounded to $490,000 for these 8 homes.
ANALYSIS OF HOMES UNDER CONSTRUCTION
For the 8 homes that were estimated to be an average of ±90% completed, I have considered a cost amount of 90% of direct costs indicated to be a weighted average of $99.64 per s.f. for these 8 homes, or $89.68 per s.f. This is applied to the average home size of 1,754 s.f. for these 8 homes, or an amount of $157,299. This is added to the estimated value of $200,296 for the vacant lot (as discussed in the following Analysis of Vacant Lots, $240,000 per finished lot less $39,704 per lot allocation of remaining costs to get to finished lot condition), resulting in a total of $357,595, rounded to $360,000 as an average for these 8 homes.
For the 4 homes that were estimated to be an average of ±75% completed, a cost amount of 75% of direct costs indicated to be a weighted average of $100.81 per s.f. for these 4 homes, or $75.61 per s.f. is applied to the average home size of 1,730 s.f. for these 4 homes. This results in an amount of $130,805 which is added to the vacant lot value of $200,296 for the vacant lot, resulting in a total of $331,101, rounded to $330,000 as an average for these 4 homes.
For the 4 homes that were estimated to be an average of ±50% completed, a cost amount of 50% of direct costs indicated to be a weighted average of $94.71 per s.f. for these 4 homes, or $47.36 per s.f. is applied to the average home size of 1,886 s.f. for these 4 homes. This results in an amount of $89,321 which is added to the vacant lot value of $200,296 for the vacant lot, resulting in a total of $289,617, rounded to $290,000 as an average for these 4 homes.
ANALYSIS OF VACANT LOTS
The pertinent land sales data is shown in the following table, with discussion and analysis of the data thereafter.
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29 ANALYSIS OF VACANT LOTS, Continuing
Rec. No. Lots Price/Lot
No. Location/APN Date Min Size Price/Fin Lot Remarks
1 SW/S Palomar St. at Starbuck Cr., 6/9/23 117 $59,829 Vacant, fairly flat land in unimproved condition; Wildomar 7,200 $265,000 approved final map; project to be Avalino by 380-160-017,018; 380-210-003 et al D.R. Horton with 1,898-3,015 s.f. homes 2 NEC Goetz Rd. & Fieldstone Dr., 9/27/23 191 $61,756 Green Valley PA 12; vacant, flat land in Perris 6,500 $206,000 unimproved condition with approved final tract 330-150-031 (portion) map
3 S’ly corner Domenigoni Pkwy. & future 1/19/24 182 $46,703 Vacant, gently sloping land in unimproved Briggs Rd., Menifee 6,000 $240,000 condition; former recorded tract map being 340-58, 59, 60 & 61 voided to reprocess new map
4 S/S Rouse Rd., W/O & E/O Sherman 3/8/24 491 $45,825 Legado; lots in blue-topped to semi-finished Rd., Menifee 5,000- $240,000 condition; mix of 5,000 s.f., 5,500 s.f., 6,000 s.f. 333-020-011 & 020 (portions) 7,000 & 7,000 s.f. min.
5 E/S Wildomar Trail, 580’ N/O Clinton Pending 77 n/a Wildomar Ridge; vacant land in unimproved Keith Rd., Wildomar Small-lot ±$210,000- condition with app’d tent. tract map; 66 small362-250-001 & 026 to ±6,000 $215,000 lot/cluster lots and 11 lots at ±6,000 s.f. min.
Data No. 1 is located on the southwest side of Palomar St. at Starbuck Cr. in Wildomar, and adjacent to the north of Murrieta. This was the sale of vacant, fairly flat and unimproved land for 117 lots, 7,200 s.f. minimum size, and with an approved final tract map. The sale to D.R. Horton Los Angeles Holding Company, Inc. was reported to be negotiated in 2022 and closed in June 2023 at the price of $7,000,000 or $59,829 per lot, based on an estimate of $265,000 per finished lot.
The project is referred to as Murrieta Creek Estates, and D.R. Horton is planning the neighborhood of homes to be called Avalino, with homes to range in size from 1,898 s.f. to 3,015 s.f.
In comparison to the subject, the date of sale/market conditions is slightly inferior; the location is considered to be slightly superior but this is offset by the lack of views; the 7,200 s.f. minimum lot size is similar; the unimproved physical condition at time of sale was inferior in terms of time and risk; and the planned homes are much larger and likely to be much higher-priced than the subject homes. Overall, upward adjustments for the inferior date of sale/market conditions and physical condition are more than offset by a downward adjustment for the superior planned product type, resulting in a firm upper limit indication of value for the subject lots at $265,000 per finished lot.
Data No. 2 is located at the northeast corner of Goetz Rd. and Fieldstone Dr. in Perris, and referred to as Planning Area 12 of the master-planned community of Green Valley. The community is only partially developed, with infrastructure of streets and utilities yet to be completed. This was the sale of vacant, fairly flat and unimproved land with an approved final tract map for 191 lots, 6,500 s.f. minimum size. The sale to Lennar Homes closed in September 2023 at the price of 957
30 ANALYSIS OF VACANT LOTS, Continuing
$11,795,350 or $61,756 per lot, with finished lots estimated at $206,000 per lot.
Lennar Homes planned two product types of homes, an average size of 2,146 s.f. with average pricing of $555,000 and an average size of 3,251 s.f. with average pricing of $622,000, reflecting a finished lot ratio of 35%.
In comparison to the subject, the date of sale/market conditions is slightly inferior; the location is slightly inferior; the slightly smaller minimum lot size is slightly inferior; the physical condition at time of sale was inferior due to the time and risk factors; but the lots are planned to be developed with much larger and higher-priced product types. Overall, upward adjustments for the inferior factors are partially offset by a downward adjustment for the superior planned product types, resulting in a firm lower limit indication of value for the subject at $206,000 per finished lot.
Data No. 3 is located at the southerly corner of Domenigoni Pkwy. and future Briggs Rd. in Menifee. This was the sale of vacant and gently sloping land in unimproved condition, with a prior recorded Tract Map that has been voided and re-entitling underway for 182 lots, 6,000 s.f. minimum size. The sale to Pulte Home Company, LLC was negotiated over a year prior to the closing in January 2024 at the price of $8,500,000 or $46,703 per lot, based on an estimate of $240,000 per finished lot.
The planned size and pricing of homes was not available.
In comparison to the subject, the date of sale/market conditions is inferior; the location is considered to be fairly similar; the smaller minimum lot size is inferior; the unimproved physical condition at time of sale was inferior due to the time and risk factors; but the potential product type is likely larger and higher-priced than the subject homes. Overall, upward adjustments for the inferior date of sale/market conditions, minimum lot size and physical condition are mostly offset by a downward adjustment for the potential of a probable superior product type, resulting in a fairly close indication of value for the subject lots at $240,000 per finished lot.
Data No. 4 is located along the south side of Rouse Rd., extending west and east from Sherman Rd. in Menifee, nearby to the east of the 215 Freeway. This sale consists of the north part of the master-planned community called Legado. It comprises 491 lots, including 159 at 5,000 s.f. minimum, 174 at 5,500 s.f. minimum, 49 at 6,000 s.f. minimum and 109 at 7,000 s.f. minimum. The lots ranged from graded blue-topped condition to semi-finished condition.
The sale to Lennar Homes closed in March 2024 at the price of $22,500,000 or $45,825 per lot, with finished lot indications of $211,000 for the 5,000 s.f. lots, $219,000 for the 5,500 s.f. lots, $223,000 for the 6,000 s.f. lots and $257,000 for the 7,000 s.f. lots, or a blended indication of $225,244 per finished lot. Average home pricing was targeted to be $538,000 on the 5,000 s.f. lots, $572,000 on the 5,500 s.f. lots, $563,000 on the 6,000 s.f. lots and $685,000 on the 7,000 s.f. lots, reflecting finished lot ratios from 38-40%.
958
31 ANALYSIS OF VACANT LOTS, Continuing
In comparison to the subject, the date of sale/market conditions is similar; the location is considered to be fairly similar; the large bulk size of 491 lots is inferior on a price per lot basis; the minimum lot sizes range from smaller to similar; the physical condition is slightly inferior; and the projected home pricing was lower than the subject for homes on the 5,500 s.f. and 6,000 s.f. lots but much higher on the 7,000 s.f. lots. Overall, considering the above factors, the indications at $219,000 and $223,000 support firm lower limits and the indication at $257,000 supports a firm upper limit as value indications for the subject lots.
Data No. 5 is located on the east side of Wildomar Trail, 580’ north of Clinton Keith Rd. in Wildomar. This project is called Wildomar Ridge and consists of vacant and slightly sloping/undulating land in unimproved condition, with an approved tentative tract map for 77 lots of which 11 lots are ±6,000 s.f. minimum and 66 lots are smalllot/courtyard/cluster type lots. A pending sale of this site is being negotiated at a price based on the approximate range of $210,000 to $215,000 per finished lot.
In comparison to the subject, the date of sale/market conditions is similar; the location is considered to be slightly inferior due to the lack of view potential; the much smaller minimum lot size for most of the lots is far inferior; the unimproved physical condition of the land at time of sale is inferior; and the likely potential product type is smaller and lower-priced on average than the subject homes. Overall, upward adjustments for the various inferior factors results in a firm lower limit indication of value for the subject in the range of $210,000 to $215,000 per finished lot.
In summary, on a finished lot basis the analysis of the data supports firm lower limit indications of value from $206,000 to $223,000; a fairly close indication at $240,000; and firm upper limit indications at $257,000 and $265,000.
An alternative analysis is by the finished lot ratio, which is calculated by the finished lot price divided by the projected or proforma average home price. As previously indicated, several of the sales indicate finished lot ratios ranging from 35% to 40%.
Due to the relatively lower-priced product on the subject lots, considering the higher end of the range, or 38-40%, and applied to an average home price of $610,000 (average value previously concluded for the completed-closed homes), the resulting indication is as follows:
$610,000 x .38-.40 = $231,800 to $244,000/finished lot
The conclusion for the subject lots is $240,000 per lot if in finished condition.
Then, a deduction is made for the remaining land development costs to get all lots to a fully finished condition. Per information provided by the builder, the remaining total costs are $952,893, including the categories of grading, consultants/soft costs, streets (Monte Vista Dr.), sewer/water/storm drain, parks/landscaping/common area, 959
32 ANALYSIS OF VACANT LOTS, Continuing
walls and dry utilities. It is noted that these costs exclude $983,268 of costs to Monte Vista Dr. that are to be funded by the CFD bond proceeds.
These total costs of $952,893 are allocated over the 24 lots that have homes under construction or are vacant, resulting in an allocation of $39,704 per lot over these 24 lots. Thus, relative to the 8 vacant lots, the deduction is $39,704 per lot from the estimated finished lot value of $240,000, resulting in an as is value of $200,296 per lot. This results in the following:
8 lots @ $200,296/lot = $1,602,368
Rounded $1,600,000
CONCLUSION OF VALUE
Based on the foregoing, the total value indication for the subject Verano neighborhood in its as is condition, is calculated as follows:
45 completed-closed homes @ $610,000 = $27,450,000
8 completed-unclosed homes @ $490,000 = $ 3,920,000
8 homes, ±90% completed @ $360,000 = $ 2,880,000
4 homes, ±75% completed @ $330,000 = $ 1,320,000
4 homes,±50% completed @ $290,000 = $ 1,160,000
8 vacant lots = $ 1,600,000
Value Indication, As Is Condition: $38,330,000
Thus, as the result of this analysis, I have arrived at the following overall conclusion of market value for the as is condition of the subject Verano neighborhood, subject to the Assumptions and Limiting Conditions, and as of April 2, 2024:
$38,330,000
(THIRTY-EIGHT MILLION THREE HUNDRED THIRTY THOUSAND DOLLARS) 960
43 ADDENDA
961
33 QUALIFICATIONS
OF
STEPHEN G. WHITE, MAI
PROFESSIONAL EXPERIENCE
Real Estate Appraiser since 1976.
1983 through current date: Self-employed; office located at 1801 Lexington Dr., Fullerton, CA 92835 (Phone: 714-738-1595)
1976-1982: Employed by Cedric A. White, Jr., MAI, independent appraiser located in Anaheim.
Real estate appraisals have been completed on most types of properties for purposes of fair market value, leased fee value, leasehold value, easement value, partial acquisitions and severance damages.
PROFESSIONAL ORGANIZATIONS
Designated Member, Appraisal Institute; MAI designation obtained 1985 Affiliate Member, Pacific West Association of Realtors
LICENSES
Licensed by the State of California as a Certified General Real Estate Appraiser; BREA ID No.
AG013311; valid through September 22, 2024.
EDUCATION
B.A. Economics & Business, Westmont College, Santa Barbara (1976) Appraisal Institute Courses:
Basic Appraisal Principles, Methods and Techniques
Capitalization Theory and Techniques
Urban Properties
Litigation Valuation
Standards of Professional Appraisal Practice
Numerous seminars and continuing education on various appraisal subjects, including valuation of easements and leased fee interests, litigation, the money market and its impact on real estate, and standards of professional appraisal practice.
COURT/TESTIMONY EXPERIENCE
Qualified as an expert witness in the Superior Courts of Orange, Los Angeles, Riverside and San Bernardino Counties; also for the Assessment Appeals Board of Orange and Los Angeles Counties.
TYPES OF PROPERTY APPRAISED
Residential: vacant lots, acreage and subdivisions; single family residences, condominiums, townhomes and apartment complexes.
Commercial: vacant lots/acreage; office buildings, retail/shopping centers, restaurants, hotels/motels.
Industrial: vacant lots and acreage; warehouses, manufacturing buildings, R&D buildings, industrial parks, mini-warehouses.
Special Purpose: mobilehome parks, churches, automobile agencies, medical buildings, convalescent hospitals, easements, leased fee and leasehold interests. 962
34 QUALIFICATIONS, Page 2
CLIENT LIST
Corporations:
Aera Energy La Habra Products, Inc.
British Pacific Properties MCP Foods
BSI Consultants Orangeland RV Park
Crown Central Petroleum Pacific Scientific
Firestone Building Materials Penhall International
Foodmaker Realty Corp. Pic 'N Save Stores
Greyhound Lines Sargent-Fletcher Co.
Holiday Rambler Corp. Shell-Western E&P
International Baking Co. Southern Distributors Corp.
Johnson Controls Southern California Edison
Kampgrounds of America The Home Depot
Knowlwood Restaurants Tooley and Company
Kroger Company Wastewater Disposal Co.
Developers:
Brighton Homes Kathryn Thompson Developers
BRIDGE Housing Mission Viejo Co.
Brookfield Premier Homes
Citation Builders Presley Homes
Davison-Ferguson Investment Devel. Rockefeller & Associates D.T. Smith Homes Taylor Woodrow Homes
Irvine Company Unocal Land & Development
Law Firms:
Atkinson, Andelson, Loya, Ruud & Romo Oliver, Barr & Vose Baldikoski, Klotz & Dragonette Ollestad, Freedman & Taylor Best, Best & Krieger LLP Palmieri, Tyler, Wiener, Wilhelm & Bowie, Arneson, Wiles & Giannone Waldron LLP
Bye, Hatcher & Piggott Paul, Hastings, Jonofsky &
Callahan, McCune & Willis Walker LLP
Cooksey, Coleman & Howard Piggott, George B.
Dawson & Dawson Pothier, Rose
Hamilton & Samuels Rosenthal & Zimmerman
Horgan, Rosen, Beckham & Coren Ross Wersching & Wolcott LLP Kirkland & Ellis Rutan & Tucker, LLP
Latham & Watkins LLP Sikora & Price, Inc.
McKee, Charles C. Smith & Politiski
Mosich, Nicholas J. Williams, Gerold G.
Long, David M. Woodruff, Spradlin & Smart, P.C.
Nossaman, Guthner, Knox & Elliott, LLP Yates, Sealy M.
Financial Institutions:
Ahmanson Trust Company NorthMarq
Barclays Bank Pacific Western Bank
Chino Valley Bank San Clemente Savings & Loan
Continental Bank Security Pacific Bank
First Interstate Mortgage Sunwest Bank
First Niagara Bank United Calif. Savings Bank
First Wisconsin Bank Washington Square Capital
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35 QUALIFICATIONS, Page 3
Cities:
Anaheim Laguna Beach San Diego
Baldwin Park Lake Elsinore San Marino
Buena Park Long Beach Santa Ana
City of Industry Mission Viejo Santa Fe Springs
Cypress Orange Santee
Dana Point Palm Desert Seal Beach
Duarte Placentia Stanton
Fontana Rialto Temecula
Fullerton Riverside Tustin
La Habra San Clemente Yorba Linda
Counties:
County of Orange County of Riverside
Other Governmental:
Agua Mansa Industrial Growth Association Lee Lake Water District Eastern Municipal Water District Metropolitan Water District El Toro Water District Orange County Water District
Federal Deposit Insurance Corporation (FDIC) Trabuco Canyon Water District Kern County Employees Retirement Association U.S. Postal Service School Districts:
Alvord Unified Irvine Unified Riverside Unified
Anaheim Union High Jurupa Unified Romoland
Anaheim Elementary Lake Elsinore Unified Saddleback Valley Unified Banning Unified Menifee Union San Jacinto Unified
Beaumont Unified Moreno Valley Unified San Marcos Unified Capistrano Unified Murrieta Valley Unified Santa Ana Unified Castaic Union Newhall Saugus Union
Cypress Newport-Mesa Unified Sulphur Springs Union
Etiwanda Orange Unified Westside Union
Fullerton Palm Springs Unified William S. Hart Union High Fullerton Jt. Union High Placentia-Yorba Linda Unif. Victor Elementary Garden Grove Unified Poway Unified
Hemet Unified Rialto Unified
Churches/Church Organizations:
Calvary Church, Santa Ana Lutheran Church, Missouri Synod Central Baptist Church, Pomona Presbytery of Los Rancho Christian & Missionary Alliance Church, Santa Ana St. Mark’s Lutheran Church, Hac. Hts.
Christian Church Foundation United Methodist Church
Congregational Church, Fullerton Vineyard Christian Fellowship First Church of the Nazarene Yorba Linda United Methodist Church Other:
Beverly Hospital Fullerton College
Biola University So. Org. Cnty. Comm. College Dist.
Cedars-Sinai Medical Center The Claremont College Services 964
Community Facilities
District 2022-3 (Verano)
Special Tax Bonds
Series 2024
965
Background
• CFD 2022-3 (Verano) formed December 14, 2022
• Incur Bonded Indebtedness NTE $7,000,000
• Bonds to be Issued to Finance City Facilities, LEUSD Facility Costs, EVMWD Facility Costs and to Pay the Costs to Issue the Bonds
• ~$171,000 in Bond Proceeds – City Fee Premium to be Used For Any City Capital Project • Levied Special Taxes Starting FY 2024
• Request for Bond Sale from Developer KB Home
• 77 Parcels – Almost All Developed and Conveyed to Individual Owners 966
Proposed Transaction
• Special Tax Bonds Secured by Special Tax Revenue Levied on CFD 2022-3 (Verano)
• Principal Not to Exceed $6,000,000
• 30 Year Maturity
• Special Reserve Funded with Special Tax Revenue to Minimize Default Risk • Appraised Value of Property - $38,330,000 as of April 2, 2024 967
Good Faith Estimates
• True Interest Cost of Bonds – 5.26%
• Total Finance Charge - $219,800
• Amount of Bond Proceeds - $4,668,000
• Total Payment Amount to Final Maturity - $11,633,000
These are not obligations of the City of Wildomar. They are secured by the Special Tax Levied on CFD 2022-3. There is No Fiscal Impact to the City of Wildomar 968
Questions/Discussion
969
CITY OF WILDOMAR
CC - REGULAR MEETING
GENERAL BUSINESS
Agenda Staff Report # 3.2
Meeting Date: June 12, 2024
SUBJECT: Amendment of City Personnel Rules and Adopting an Updated Pay Plan
SUBMITTED BY: Emily Wolf, Human Resources and Risk Manager PREPARED BY: Emily Wolf, Human Resources and Risk Manager ACTION:
Adopt the following Resolutions entitled:
RESOLUTION NO. 2024 - ____
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WILDOMAR, CALIFORNIA, APPROVING THE REVISION OF THE CITY’S PERSONNEL RULES AND REGULATIONS RESOLUTION NN. 2024 - ____
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WILDOMAR, CALIFORNIA, ADOPTING THE NEW PAY PLAN EFFECTIVE JULY 1, 2024
SUMMARY:
City staff recommends updating the City’s Personnel Rules and Regulations to include legislative updates, adjust the consumer price index (CPI) review month from May to March, add standby and callback pay, address holiday pay, combine vacation and sick leave to provide comprehensive annual leave for full-time employees, provide Supervisory Leave for exempt staff not already receiving Management Leave, outline safety shoe reimbursement rules for specific job classifications, and make other administrative adjustments. In addition, staff recommends approving the pay plan effective July 1, 2024, which includes a COLA adjustment of 3% based on the Personnel Rules and March CPI.
BACKGROUND:
The Personnel Rules and Regulations (Rules) govern the employment relationship between the City of Wildomar and its employees. These Rules establish guidelines for recruitment, selection, compensation, benefits, performance management, and other aspects of personnel administration. As such, changes in employment law, industry standards, and best practices need to be reflected in the Personnel Rules in order enhance clarity, fairness, and efficiency while ensuring compliance with relevant legislation.
DISCUSSION:
Personnel Rules and Regulations Update
970
The Rules have been amended to ensure legal compliance with updated employment legislation, provide fairness in compensation, and provide flexible benefits to staff. Significant amendments are outlined below.
Legislative Updates
Effective January 1, 2024, the City is required to provide 40 hours or five days, whichever is more, of sick leave to all employees, with caveats described in the labor code as to when the leave can be accrued and when it can be used. In addition, the labor code describes the amount of leave the may be carried over from year to year, as well as the maximum amount that may be accrued. This is a change from the prior years, which required only 24 hours or 3 days of sick leave.
Effective January 1, 2024, the City is required to provide up to five days of paid or unpaid reproductive loss leave to eligible employees. As part of the law, employees may use any available leave to cover their reproductive loss leave.
Cost of Living Adjustment Review Month
The current Rules provide that, based on the Consumer Price Index (CPI) for the month of May each year, or 3%, whichever is less, the City Council will consider a cost-of-living adjustment at a regular council meeting during the month of July. The budget will have already been approved at this time. In order to ensure any cost-of-living adjustment can be appropriately budgeted, staff recommends a COLA based on CPI year-over-year changes for the month of March. CPI reporting is available approximately two weeks after the end of the month, on a quarterly basis. Using the March CPI rate instead of the May CPI rate allows sufficient time for approval and incorporation into the City’s budget. There is no change to the amount of the COLA or its capped rate.
Standby and Callback Pay
As the City transitions from contract staff to City staff, standby and callback work will be required for crews working in the maintenance fields. In order to ensure staff are available and appropriately compensated, staff recommend the addition of standby and callback pay.
Standby pay is provided to non-exempt staff who are required to be available and ready to respond to time-sensitive incidents after normal working hours and on the weekends. Standby pay would be compensated at a rate of $35 per day which is calculated based on an average 971
of standby pay for our neighbor. Callback pay would be provided to non-exempt staff who are being requested to return to work after their regular shift has been completed and the employee has left the premises. Callback pay does not apply to work that is pre-arranged or scheduled outside of an employee's normal working hours. Callback pay is compensated at a rate of one-and-one-half the employee’s base rate, with a minimum of two (2) hours paid. Both standby and callback pay are standard compensation tools in the public sector, with one or both being used by all eight of our local comparative cities.
Holiday Pay
The current Rules provide for pay on specified holidays, however, there is no specific language regarding employees scheduled to work on a holiday. In the past, employees working on holidays had the option to bank that holiday and take the hours at another time.
That practice was difficult to track and resulted in a liability carried forward. Staff recommends the elimination of banked holidays, instead allowing employees scheduled to work on a Holiday to receive Holiday pay. The amended Rules provide that employees scheduled to work on a holiday will still receive either 8 hours or 10 hours of holiday pay based on their schedule, as well as straight pay for the hours they actually work.
Comprehensive Annual Leave
The current Rules provide separate paid leave rules for sick and vacation time. The proposed Comprehensive Annual Leave (CAL Time) aims to simplify the leave management process, provide employees with greater flexibility and autonomy, and align our practices with modern workforce trends. Adopting a CAL Time rule will streamline leave management processes and reduce administrative overhead. Employees will have greater control over their time off, allowing them to better balance their work and personal lives, contributing to improved morale, job satisfaction, and overall employee well-being. By eliminating the distinction between vacation and sick leave, employees may be less inclined to use sick days when they are not genuinely ill. This can help reduce absenteeism and minimize disruptions to workflow. Offering CAL Time is in line with modern workforce trends and enhances our City's attractiveness to prospective employees, particularly those who value flexibility and work-life balance. Accrual rates and eligibility criteria for CAL Time will remain consistent with existing policies to ensure fairness and equity across the workforce. CAL time will be capped at 480 hours, at which point no additional CAL time will be accumulated, unless the staff member brings their banked hours below the cap.
Flex Leave
Current staff classified as exempt in the Management and Executive groups receive 972
Management Leave in recognition of after-hours meetings and additional time spent outside of normal working hours. There are six classifications on the City’s Classification Schedule that are designated as exempt in the General group, with only three of the classifications currently filled. While these classifications are not entitled to overtime, they frequently participate in after-hours meetings or work as part of their duties. It is recommended by staff to retitle Management Leave to Flex Leave, as well as grant twenty (20) hours of Flex Leave to exempt staff in the General group to compensate for the extra time required. If approved, there are four incumbents that would receive twenty hours of Flex Leave as a result of this update.
Safety Shoe Reimbursement
Staff recommends establishing a Safety Shoe Reimbursement rule that provides reimbursement to designated employees for the purchase of safety footwear meeting industry standards and requirements, as outlined by Cal/OSHA. Under this program, eligible employees will be reimbursed up to $250 per fiscal year for the cost of approved safety shoes.
Safety shoe allowances or reimbursements are used in all eight local comparative cities, with an average amount of $256.25 per fiscal year.
Cost of Living Adjustment
The Rules currently calculate COLA based on the May CPI. As of June 4, 2024, the Consumer Price Index for Riverside-San Bernardino-Ontario, CA, Consumer Price Index – U 12-month percent changes on all items for the month of May is not expected to be published until midJune. The Consumer Price Index for Riverside-San Bernardino-Ontario, CA, Consumer Price Index – U 12-month percent changes on all items for the month of March is 4.3%. In accordance with recommended changes to the City’s Personnel Rules and Regulations, staff recommend providing a 3% cost-of-living adjustment to all staff, with an effective date of July 1, 2024.
FISCAL IMPACT:
Providing additional sick leave to part-time staff will have a financial impact of approximately $230 per position, per year, with an aggregated total of approximately $1,000 per year. This will be included in the salary and benefits budget for each part-time position. The City does not currently have any part-time staff.
The addition of standby pay is estimated to have an overall financial impact of $12,775 per year based on the number of eligible staff and projected workloads. Standby pay will be budgeted for each eligible position.
973
The addition of callback pay will have a financial impact; however, it is unclear at this time the amount of callback pay that will be used as there is no prior data for this item. This will be budgeted similar to Overtime. This amount will be included in each departments’ budget under account XXXX-51010
Combining sick time and vacation time into comprehensive annual leave (CAL Time) no longer differentiates the two and therefore allows for cashout of both sick and vacation time.
The City allows for cashouts of 40 hours twice during the year and there would be no change to the amount of hours employees could cash out. There would just be more employees eligible to make the cash out. Sufficient funds are budgeted for this cash out. The budget includes the projection of each employee cashing out 80 hours a year. There would be some staff that as a result of the CAL time conversion were close to the 480 cap. Staff recommends allowing these employees a special one-time cashout to bring them below 300 hours, allowing for a full year of accrual. The cost of this cash out would be approximately $39,000 and will be included in each affected departments' budgets.
Safety shoe reimbursement has a potential fiscal impact of approximately $5,000 annually.
This will be included in the department budgets for applicable divisions under account XXXX54010.
Flex Leave will have a financial impact of approximately $3,800 per year. This amount will be included in each departments’ budget under account 51002.
Adopting the new pay plan to include the 3% COLA adjustment will have an overall fiscal impact of $199,430 on the schedule of authorized positions. This amount has been included in the annual operating budget.
ATTACHMENTS:
Attachment A. - Resolution - Revising Personnel Rules
Exhibit A. - Wildomar Personnel Rules - JUN 2024
Attachment B. - Resolution - Approving Updated Pay Plan Exhibit A. - Pay Plan Effective 7-01-2024
Presentation
974
RESOLUTION NO. 2024 - _____
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WILDOMAR,
CALIFORNIA, REVISING THE CITY OF WILDOMAR PERSONNEL
RULES AND REGULATIONS
WHEREAS, on June 18, 2014, the City of Wildomar (“City”) City Council adopted Ordinance No. 96 entitled “AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF WILDOMAR, CALIFORNIA, AMENDING CHAPTER 2.36 (PERSONNEL SYSTEM) OF THE WILDOMAR MUNICIPAL CODE; and
WHEREAS, Ordinance No. 96 among other things, states that the City Council shall have the authority to adopt, amend, or repeal the Personnel Rules (“Rules”) as determined necessary from time to time; and
WHEREAS, the most recent update to the Rules was approved on October 11, 2023; and
WHEREAS, legislative updates, an adjustment to the consumer price index (CPI) review month, addition of standby and callback pay, addition of holiday pay, creation of comprehensive annual leave based on a combination of vacation and sick leave for fulltime employees, renaming Management Leave to Flex Leave and providing 20 hours of Flex Leave for exempt staff not previously receiving Management Leave, documentation of safety shoe reimbursement rules for specific job classifications, and various administrative adjustments are necessary in order to enhance clarity, fairness, and efficiency while ensuring compliance with relevant regulations.
NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Wildomar, California, as follows:
SECTION I. Upon adoption of this Resolution, City Council adopts the “City of Wildomar Personnel Rules and Regulations, Updated June 12, 2024” as attached to this Resolution as Exhibit A.
975
PASSED, APPROVED, AND ADOPTED this 12th day of June, 2024. ______________________________
Bridgette Moore
Mayor
APPROVED AS TO FORM: ATTEST:
______________________________ ______________________________ Thomas D. Jex Janet Morales, CMC
City Attorney City Clerk
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City of Wildomar
Personnel Rules and Regulations
Updated
June 12, 2024
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City of Wildomar Personnel Rules and Regulations P a g e | i Table of Contents
RULE I. GENERAL PROVISIONS ............................................................................................1 A. PURPOSE ..........................................................................................................................1 B. NATURE OF EMPLOYMENT ..................................................................................................1 C. APPLICABILITY ...................................................................................................................1 D. NOT AN EMPLOYMENT CONTRACT .......................................................................................1 E. AMENDMENT OF PERSONNEL RULES ...................................................................................1 F. ADOPTION OF ADMINISTRATIVE POLICIES .............................................................................1 G. DELEGATION OF AUTHORITY ...............................................................................................1 H. CHANGES TO THE LAW .......................................................................................................2 I. SEVERABILITY....................................................................................................................2 RULE II. DEFINITIONS.............................................................................................................2 A. GENERAL DEFINITIONS .......................................................................................................2 B. SPECIFIC DEFINITIONS........................................................................................................2 RULE III. NONDISCRIMINATION.............................................................................................5 A. EQUAL EMPLOYMENT OPPORTUNITY ...................................................................................5 B. POLICY AGAINST HARASSMENT, DISCRIMINATION AND RETALIATION ......................................5 C. DISABLED APPLICANTS AND EMPLOYEES .............................................................................5 D. RELIGIOUS ACCOMMODATION .............................................................................................6 E. LACTATION ACCOMMODATION .............................................................................................6 RULE IV. CLASSIFICATION ....................................................................................................7 A. PREPARATION OF PLAN ......................................................................................................7 B. ADOPTION, AMENDMENT AND REVISION OF PLAN..................................................................7 C. ALLOCATION OF POSITIONS.................................................................................................7 D. NEW POSITIONS ................................................................................................................7 E. JOB DESCRIPTIONS............................................................................................................7 F. RECLASSIFICATION.............................................................................................................8 RULE V. COMPENSATION ......................................................................................................8 A. SALARY ON APPOINTMENT ..................................................................................................8 B. SALARY ANNIVERSARY DATES ............................................................................................8 C. INCREASES WITHIN SALARY RANGE ....................................................................................8 D. SALARY UPON PROMOTION ................................................................................................9 E. SALARY UPON TRANSFER...................................................................................................9 F. SALARY ON CHANGE IN RANGE ASSIGNMENT .......................................................................9 G. SALARY ON REALLOCATION OF POSITION .............................................................................9 H. SALARY ON DEMOTION .......................................................................................................9 I. ACTING PAY ....................................................................................................................10 J. BILINGUAL PAY ................................................................................................................10 K. SPECIAL SALARY ADJUSTMENTS .......................................................................................10 L. COST OF LIVING ADJUSTMENT ..........................................................................................10 M. PAY PERIODS ..................................................................................................................11 978
City of Wildomar Personnel Rules and Regulations P a g e | ii N. STANDBY AND CALLBACK PAY...........................................................................................11 O. SEVERANCE UPON TERMINATION ......................................................................................12 RULE VI. APPLICATIONS, RECRUITMENT AND EXAMINATIONS .....................................13 A. VACANCIES .....................................................................................................................13 B. ANNOUNCEMENT OF VACANCIES/ACCEPTANCE OF APPLICATIONS........................................13 C. DISQUALIFICATION OF APPLICANTS....................................................................................13 D. INELIGIBILITY FOR EMPLOYMENT........................................................................................14 E. SELECTION PROCESS.......................................................................................................15 F. CREATION OF ELIGIBILITY LIST ..........................................................................................16 G. PHYSICIAN'S EXAMINATION ...............................................................................................16 RULE VII. APPOINTMENTS...................................................................................................16 A. APPOINTMENT OF NEW EMPLOYEE....................................................................................16 B. PROVISIONAL APPOINTMENTS ...........................................................................................16 C. ACTING APPOINTMENTS TO A HIGHER CLASS .....................................................................18 D. EMERGENCY APPOINTMENT..............................................................................................19 E. REINSTATEMENT..............................................................................................................20 F. REEMPLOYMENT ..............................................................................................................20 G. PROMOTION ....................................................................................................................20 H. DEMOTION.......................................................................................................................20 I. TRANSFER.......................................................................................................................20 J. INTERACTIVE PROCESS TRANSFER....................................................................................21 RULE VIII. NEPOTISM AND CONSENSUAL ROMANTIC RELATIONSHIPS BETWEEN EMPLOYEES ...................................................................................................................21 A. NEPOTISM .......................................................................................................................21 B. CONSENSUAL ROMANTIC RELATIONSHIPS BETWEEN EMPLOYEES.........................................25 RULE IX. REPORTS AND RECORDS ...................................................................................26 A. MAINTENANCE OF PERSONNEL FILES.................................................................................26 B. REVIEW AND ACCESS OF PERSONNEL FILES ......................................................................26 C. CURRENT ADDRESS .........................................................................................................27 D. REFERENCES ..................................................................................................................27 E. DESTRUCTION OF RECORDS .............................................................................................27 RULE X. PERFORMANCE EVALUATIONS ...........................................................................28 A. POLICY ...........................................................................................................................28 B. AUTHORITY TO MAKE EVALUATIONS ..................................................................................28 C. TIME FOR PERFORMANCE EVALUATION..............................................................................28 D. POSTPONEMENT OF PERFORMANCE EVALUATION ...............................................................28 E. REVIEW WITH THE DEPARTMENT HEAD ..............................................................................28 F. REVIEW WITH EMPLOYEE..................................................................................................28 G. RETENTION OF PERFORMANCE EVALUATION ......................................................................29 H. EFFECTS OF "IMPROVEMENT NEEDED" AND "UNSATISFACTORY" RATINGS.............................29 979
City of Wildomar Personnel Rules and Regulations P a g e | iii RULE XI. WORKWEEK, HOURS OF WORK AND OVERTIME .............................................29 A. FLSA CLASSIFICATION.....................................................................................................29 B. WORK SCHEDULES AND WORKWEEK .................................................................................29 C. RECORDING OF WORK HOURS..........................................................................................30 D. DAILY HOURS OF WORK/SHIFTS........................................................................................30 E. CHANGES IN WORK SCHEDULES. ......................................................................................30 F. MEAL PERIODS. ...............................................................................................................31 G. REST PERIODS ................................................................................................................31 H. OVERTIME.......................................................................................................................31 RULE XII. LEAVES OF ABSENCE.........................................................................................32 A. EFFECT OF LEAVE OF ABSENCE.........................................................................................32 B. UNAUTHORIZED ABSENCES...............................................................................................33 C. HOLIDAYS........................................................................................................................33 D. COMPREHENSIVE ANNUAL LEAVE......................................................................................34 E. SICK LEAVE FOR PART-TIME AND TEMPORARY EMPLOYEES ................................................36 F. BEREAVEMENT LEAVE ......................................................................................................39 G. MILITARY LEAVE ..............................................................................................................40 H. JURY DUTY......................................................................................................................40 I. PREGNANCY DISABILITY LEAVE .........................................................................................40 J. FAMILY CARE AND MEDICAL LEAVE ...................................................................................41 K. REPRODUCTIVE LOSS LEAVE. ...........................................................................................41 L. LEAVE OF ABSENCE WITHOUT PAY....................................................................................42 M. MANAGEMENT AND SUPERVISORY LEAVE ..........................................................................43 N. FITNESS FOR DUTY LEAVE ................................................................................................43 O. VOTING LEAVE.................................................................................................................45 P. SUBPOENAED ABSENCE ...................................................................................................46 Q. PERSONNEL ACTION LEAVE ..............................................................................................46 R. SCHOOL LEAVE................................................................................................................46 S. WORKERS’ COMPENSATION..............................................................................................47 RULE XIII. ATTENDANCE......................................................................................................48 A. ATTENDANCE...................................................................................................................48 B. TARDINESS......................................................................................................................48 C. GENERAL ABSENCES........................................................................................................48 D. UNAUTHORIZED ABSENCES...............................................................................................48 RULE XIV. LAYOFF/SEPARATION/RETIREMENT...............................................................49 A. LAYOFF...........................................................................................................................49 B. RESIGNATIONS ................................................................................................................49 C. TERMINATIONS ................................................................................................................49 D. RETIREMENT/DISABILITY RETIREMENT ...............................................................................49 RULE XV. ETHICAL STANDARDS ........................................................................................50 A. OUTSIDE EMPLOYMENT, ENTERPRISE, OR ACTIVITY............................................................50 980
City of Wildomar Personnel Rules and Regulations P a g e | iv B. POLITICAL ACTIVITIES.......................................................................................................51 C. SOLICITATION OF POLITICAL CONTRIBUTIONS .....................................................................51 D. CONTRACTS AND CONFLICTS OF INTEREST ........................................................................51 E. CONDUCT DURING THE WORKDAY.....................................................................................51 F. EMPLOYEES WITH ACCESS TO CONFIDENTIAL INFORMATION................................................51 RULE XVI. DISCIPLINARY ACTIONS....................................................................................52 A. REASON FOR DISCIPLINARY ACTION ..................................................................................52 B. TYPES OF DISCIPLINARY ACTIONS .....................................................................................54 C. AUTHORITY FOR DISCIPLINARY ACTIONS ............................................................................54 D. NOTICE OF DISCIPLINARY ACTION .....................................................................................54 E. NAME-CLEARING HEARING ...............................................................................................55 RULE XVII. GRIEVANCE PROCEDURE ................................................................................56 A. PURPOSE OF THE GRIEVANCE PROCEDURE .......................................................................56 B. GRIEVANCE PROCEDURE ..................................................................................................56 C. GENERAL PROVISIONS .....................................................................................................57 RULE XVIII. EMPLOYMENT BENEFITS ................................................................................58 A. HEALTH BENEFITS............................................................................................................58 B. RETIREMENT BENEFITS ....................................................................................................58 RULE XIX. EDUCATIONAL ASSISTANCE ............................................................................58 A. EDUCATIONAL REIMBURSEMENT FOR TRAINING AND ADVANCEMENT.....................................58 B. LICENSES AND CERTIFICATION ASSISTANCE .......................................................................59 RULE XX. WORKPLACE VIOLENCE PREVENTION ............................................................59 RULE XXI. DRUG- AND ALCOHOL-FREE WORKPLACE POLICY .....................................59 RULE XXII. ELECTRONIC COMMUNICATIONS POLICY.....................................................60 RULE XXIII. UNIFORMS AND EQUIPMENT..........................................................................60 A. UNIFORMS.......................................................................................................................60 B. EQUIPMENT .....................................................................................................................60 C. SAFETY EQUIPMENT AND PROTECTIVE CLOTHING...............................................................60 RULE XXIV. EMPLOYEE REIMBURSEMENTS AND ALLOWANCES .................................61 A. REIMBURSEMENT .............................................................................................................61 B. ALLOWANCE ....................................................................................................................62 RULE XXV. DISASTER AND EMERGENCY SERVICE WORKERS .....................................63 A. EMPLOYEES DESIGNATED AS DISASTER WORKERS.............................................................63 B. OATH OR AFFIRMATION ....................................................................................................63 C. DECLARATION OF DISASTER OR EMERGENCY.....................................................................63 D. EMPLOYEE DISASTER RESPONSIBILITIES............................................................................63 981
City of Wildomar Personnel Rules and Regulations P a g e | 1
CITY OF WILDOMAR PERSONNEL RULES AND
REGULATIONS
RULE I. GENERAL PROVISIONS
A. Purpose. These personnel rules (“Rules”) are intended to establish and maintain an efficient and uniform personnel program for the City of Wildomar (“City”). This updated version of the Rules repeals and replaces all prior versions of the Rules.
Upon adoption, these Rules shall supersede any and all personnel management policies, rules, regulations and procedures previously adopted, except those which were adopted by order of a department head for that department, and which are not in conflict with the Rules specified herein.
B. Nature of Employment. All employees of the City are at-will employees. Their employment can be terminated by the City or the employee at any time, with or without cause, with or without notice, and with or without the right of appeal. Nothing in these Rules, in a contract for employment, or any other policy adopted by the City, should be interpreted in a manner that would cause the employee's employment to be other than at-will.
C. Applicability. Unless otherwise specifically stated either in these Rules or in a contract for employment or resolution or ordinance of the City Council, the provisions of these Rules apply to all City employees. In the event of conflict between the provisions of these Rules and a stand-alone personnel policy, the provisions of these Rules will control. In the event of a conflict between these Rules and a written contract for employment, the terms of the written contract for employment will control.
D. Not an Employment Contract. None of these Rules shall be deemed to create a vested contractual right for any employee.
E. Amendment of Personnel Rules. The City Council shall have authority to adopt, amend, or repeal these Rules by resolution. The Personnel Officer shall have authority to prepare and recommend revisions to the Rules.
F. Adoption of Administrative Policies. The Personnel Officer is hereby authorized to adopt administrative policies, so long as said administrative policies are not in direct conflict with these Rules.
G. Delegation of Authority. Except as otherwise provided, any duties, responsibilities, powers, and authority granted by these Rules or the personnel ordinance to the City Manager, appointing authority, Personnel Officer, Department Head, or any other person may be delegated, in writing, to any other employee at the discretion of the delegating individual.
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City of Wildomar Personnel Rules and Regulations P a g e | 2 H. Changes to the Law. When any local ordinance, state or federal law, or regulation, that is incorporated in the Rules or upon which the Rules rely is amended, the Rules shall be deemed amended in conformance with those amendments.
I. Severability. If any section, subsection, sentence, clause, or phrase of the Rules is found to be illegal by a court of competent jurisdiction, such findings shall not affect the validity of the remaining portions of the Rules.
RULE II. DEFINITIONS
A. General Definitions. All words and terms used in these Rules and in any resolution or ordinance dealing with personnel policies, systems, or procedures shall be defined as they are normally and generally defined in the field of personnel administration.
B. Specific Definitions.
1. "Acting appointment" means a temporary appointment of an employee who possesses at least the minimum qualifications established for a particular class and who is appointed to a position in that class in the absence of available eligible incumbents, or on an interim basis pending later appointment of an eligible person.
2. "Advancement" means a salary increase within the limits of a pay range established for a class.
3. "Allocation" means the assignment of a single position to its proper class in accordance with the duties performed, and the authority and responsibilities exercised.
4. "Appointing authority" means the City Manager or their designee.
5. "At-will employee" means an employee whose employment can be terminated by the City or the employee, at any time, with or without cause and with or without notice.
6. “Base Pay” means the employee’s rate of pay based on the established and approved pay plan.
7. "Class" or “Classification” means all positions sufficiently similar in duties, authority, and responsibility, to permit grouping under a common title in the application with equity of common standards of selection, transfer, demotion and salary.
8. "Compensation" means the salary, wage, allowance, and all other forms of valuable consideration earned by or paid to any employee by reason of 983
City of Wildomar Personnel Rules and Regulations P a g e | 3 service in any position but does not include expenses authorized and incurred incidental to employment.
9. "Continuous service" means service in the employ of the City without a break or interruption. Unless otherwise required by law, a severance of the employee from his or her employment initiated by either the City or the employee for periods of more than 30 days constitutes a break in continuous service.
10. "Council" or “City Council” means the City Council of the City of Wildomar.
11. "Day" or "days" means calendar day(s), unless otherwise stated.
12. "Demotion" means the movement of an employee from one class to another class having a lower maximum base rate of pay.
13. “Department Head” means the administrative head of every department in the City.
14. “Disciplinary action" means the discharge, demotion, reduction in pay, suspension, or reprimand of an employee for punitive reasons.
15. "Eligibility list" means the list which contains the names of successful applicants according to relative performance on the total weighted examinations.
16. “Executive Classification” means employees who are in the “executive” group according to the City’s Position Classification Schedule adopted by the Council Resolution No. 2022-60 on November 9, 2022, and as may be later amended by Council.
17. “Exempt Employee” means an employee who holds a position that, based on both the job requirements and the salary earned, does not entitle the employee to receive compensation at an overtime rate under applicable state or federal wage and hour laws.
18. "Full-time employees" means employees whose positions require the employee works at least 40 hours in a workweek. All positions shall be fulltime unless otherwise designated, or unless the compensation is fixed upon the basis of part-time work.
19. "Layoff' means the separation of employees from the active work force due to lack of work or funds, or to the abolition of positions by the City Council for the above reasons or due to organization changes.
20. “Management Classification” means employees who are in the “management” group according to the City’s Position Classification Schedule adopted by the 984
City of Wildomar Personnel Rules and Regulations P a g e | 4 Council Resolution No. 2022-60 on November 9, 2022, and as may be later amended by Council
21. “Non-exempt employee” means an employee who holds a position that, based on either the job requirements or the compensation earned, may entitle the employee to receive compensation at an overtime rate under applicable state or federal wage and hour laws.
22. "Personnel Officer" means the City Manager or their designee.
23. "Part-time employees" means employees whose positions work less than 1,000 hours per year, are paid on an hourly basis and only receive fringe benefits as provided by these Rules and as otherwise required by law.
24. "Position" means a group of duties and responsibilities in the service of the City requiring the full-time or part-time employment of one person.
25. "Promotion" means the movement of an employee from one class to another class having a higher maximum base rate of pay.
26. "Provisional appointment" means a temporary appointment, less than 960 hours in a fiscal year, of a non-employee who possesses the minimum qualifications established for a particular class and who has been appointed to a position in that class in the absence of available eligible employees.
27. "Reinstatement" means the restoration without examination of a former employee to a classification in which the employee formerly served.
28. "Suspension" means the temporary separation from service of an employee without pay for disciplinary purposes.
29. "Temporary employee" means an employee who is appointed to a position for a limited period of time and is only entitled to benefits as provided by resolution of the City Council and as required by law.
30. "Transfer" means the movement of an employee from one position to another position in the same class or to another class with the same maximum base rate of pay.
31. “Y-Rate” means a salary paid above the maximum salary of a range. A Y-rate may be used when an incumbent employee is reassigned or reclassified to a lower class or salary range but retains the higher salary rate of the former class. This Y-rate salary may be retained until the newly assigned class has a maximum rate equal to or higher than the Y-rate.
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City of Wildomar Personnel Rules and Regulations P a g e | 5 RULE III. NONDISCRIMINATION
A. Equal Employment Opportunity. The City is committed to a policy of equal employment opportunity for applicants and employees. It does not discriminate against qualified applicants or employees with respect to terms or conditions of employment based on race, color, ancestry, sex, gender, sexual orientation, gender identity, gender expression, age (over 40), religion, ethnicity, national origin, creed, physical or mental disability, medical condition, genetic information, marital status, pregnancy, reproductive health decision-making, childbirth or related medical conditions, breastfeeding, military or veteran's status, or any other characteristic protected by state or federal law or local ordinance.
Any technique or procedure used in recruitment and selection of employees will be designed to measure only the job-related qualifications of applicants. No recruitment or selection technique will be used which, in the opinion of the City Manager or designee, is not justifiably linked to successful job performance.
Employees who believe they have experienced any form of employment discrimination are encouraged to report this immediately, using the complaint procedure provided in the City’s Harassment, Discrimination, and Retaliation Prevention Policy..
B. Policy Against Harassment, Discrimination and Retaliation. City policy prohibits unlawful harassment and discrimination based on an employee's race, color, ancestry, sex, gender, sexual orientation, gender identity, gender expression, age (over 40), religion, ethnicity, national origin, creed, physical or mental disability, medical condition, genetic information, marital status, pregnancy, reproductive health decision-making, childbirth or related medical conditions, breastfeeding, military or veteran's status, or any other characteristic protected by state or federal law or local ordinance. In addition, City policy prohibits retaliation because of the employee's opposition to a practice the employee reasonably believes to constitute employment discrimination or harassment or because of the employee's participation in an employment discrimination or harassment investigation, proceeding or hearing.
The City's full Harassment, Discrimination, and Retaliation Policy is set forth in a council adopted policy.
C. Disabled Applicants and Employees. The City has a commitment to ensure equal opportunities for disabled applicants and City employees. Every reasonable effort will be made to provide an accessible work environment for such employees and applicants. Employment practices (e.g., hiring, training, testing, transfer, promotion, compensation, benefits, and discharge) will not discriminate unlawfully against disabled applicants or employees. The City provides employment-related reasonable accommodations to qualified individuals with disabilities within the meaning of the California Fair Employment and Housing Act ("FEHA") and the Americans with Disabilities Act ("ADA").
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1. Request for Accommodation. An applicant or employee who desires a reasonable accommodation in order to perform essential job functions should make such a request in writing to the Human Resources Department. The request must identify: a) the job-related functions at issue; and b) the desired accommodation(s). Reasonable accommodation may include, but is not limited to, job restructuring, reassignment to a vacant position for which the employee is qualified and making facilities accessible.
2. Reasonable Documentation of Disability. Following receipt of the request, the Human Resources Department may require additional information, such as reasonable documentation of the existence of a disability or additional explanation as to the effect of the disability on the employee’s ability to perform the employee’s essential functions but will not require disclosure of diagnosis or genetic history.
3. Interactive Process. The City will engage in the interactive process, as defined by the FEHA and ADA, to determine whether an applicant or employee is able to perform the essential functions of their position. During this process, the City will examine potential reasonable accommodations that will make it possible for the employee or applicant to so perform. Such interactive process will include a meeting with the employee or applicant, the City, and, if necessary, the employee or applicant’s health care provider.
4. Case-by-Case Determination. The City determines, in its sole discretion, whether reasonable accommodations(s) can be made, and the type of reasonable accommodations(s) to provide. The City will not provide an accommodation that would pose an undue hardship upon the City or that is not required by law. The City will inform the employee or applicant of any decisions made under this section in writing.
5. Light or Modified Duty. During the interactive process, the City may approve, at its sole discretion and subject to availability, the employee to perform light or modified duty for a limited period of time.
6. Fitness for Duty Leave. While the City is engaged in the interactive process with an employee, the City may require that the employee be placed on a fitness for duty leave in accordance with Rule XII.M.
D. Religious Accommodation. The City will make reasonable accommodations to the known religious creed of an applicant during the hiring process and of an employee in the course of employment, unless doing so would impose an undue hardship on the City.
E. Lactation Accommodation. The City provides lactation accommodation to employees as required by law. For additional details, employees should refer to the City’s standalone Lactation Accommodation Administrative Policy. 987
City of Wildomar Personnel Rules and Regulations P a g e | 7 RULE IV. CLASSIFICATION
A. Preparation of Plan. The Personnel Officer shall ascertain and record the duties, responsibilities, minimum standards, and minimum qualifications of all positions in the City and shall recommend a classification/compensation plan for all positions.
The classification/compensation plan need not be contained in only one document but may be comprised of various documents. The classification/compensation plan shall consist of classes of positions defined by class specifications, including the title. The classification/compensation plan shall be so developed and maintained that all positions substantially similar with respect to duties, responsibilities, authority, and character of work are included within the same class, and that the same schedules of compensation may be made to apply with equity under similar working conditions to all positions in the same class. The classification/compensation plan will contain the general salary schedule and a general benefits schedule.
B. Adoption, Amendment and Revision of Plan. The classification/compensation plan shall be adopted by and may be amended from time to time by resolution of the City Council. At the time of consideration by the City Council, any interested party may appear and be heard. Revisions to the classification/compensation plan may consist of the addition, abolishment, consolidation, division, or amendment of existing classes.
C. Allocation of Positions. Following the adoption of the classification/compensation plan, the Personnel Officer shall allocate every position in the employ of the City to one of the classes established by the plan.
D. New Positions. A new position shall not be created and filled until the classification/compensation plan has been amended to provide for such position.
E. Job Descriptions. The Administrative Services Director, in consultation with Department Heads, will prepare written specifications for each classification of positions to the City Manager for review. Subject to City Council approval of the initial job description, the specifications, when approved by the City Manager, will constitute the official classification specifications, and will indicate the date of approval or last revision. Revisions to job descriptions do not require approval by the City Council. Each specification will include the classification title, a brief description of the scope, nature, and responsibility of the class, a description of the tasks or duties ordinarily performed in the positions allocated to the classification; a statement of the minimum qualifications considered necessary for proficient performance of the work, including education, experience, training, knowledge, skills, physical characteristics, and any additional factors considered pertinent. Specifications are not restrictive. The specifications shall not be construed as an all-inclusive list of tasks performed; or be interpreted as restricting the assignment of related tasks not specifically listed therein; or as limiting the authority of supervisory personnel to assign, direct and control the work of subordinate employees. A Department Head 988
City of Wildomar Personnel Rules and Regulations P a g e | 8 may temporarily assign other related duties and responsibilities or otherwise direct the work of employees.
F. Reclassification. Positions, the assigned duties of which have been materially changed by the City so as to necessitate reclassification, whether new or already created, shall be allocated by the Personnel Officer to a more appropriate class.
Reclassifications shall not be used for the purpose of avoiding restrictions concerning demotions and promotions, or to effect a change in salary in the absence of a significant change in assigned duties and responsibilities.
RULE V. COMPENSATION
A. Salary on Appointment.
1. New Employees. New employees shall be paid at the first step of the salary range for the position to which the employee is appointed except as approved by the City Manager or their designee.
2. Advanced Step Hiring. The City Manager may appoint a new employee to an advanced step of the pay range if it is determined that qualified applicants cannot be successfully recruited at the first step of the salary range.
3. Reemployment/Reinstatement. A person who previously held a position with the City and resigned in good standing may, at the discretion of the City Manager, when re-employed in the same or a comparable position held at separation, be appointed at the same salary rate which was paid at the effective date of the person's termination or the nearest lower applicable step for the range to which the person is appointed.
B. Salary Anniversary Dates. Employees shall have a salary anniversary date on the date of their most recent appointment, promotion, demotion, reinstatement or reemployment. The salary anniversary date may be modified by the action of the appointing authority under Rule X.H.
C. Increases Within Salary Range. Employees will normally become eligible for a merit adjustment in pay after 12 months of service in their current position. Increases shall not be automatic, and are based on merit. The adjustment shall be made only if recommended by the applicable Department Head, and, if approved, by the City Manager. The subsequent adjustments are based on performance evaluation, to encourage an employee to perform at the employee’s highest level, and to recognize increased skill on the job. Employees are normally eligible for these adjustments any time after the completion of 12 months of service in their current position. This period may be modified in conjunction with the performance evaluation recommendations and as approved by the City Manager. Unless so modified, a granted merit 989
City of Wildomar Personnel Rules and Regulations P a g e | 9 adjustment will be effective on the employee’s salary anniversary date. The City Manager, in their sole discretion, may determine that an increase within range will be retroactive in effect to the employee’s salary anniversary date or to another appropriate date.
D. Salary Upon Promotion. Except in instances where the granting of a full step increase would result in a salary in excess of the top step of the range, any employee who is promoted to a position in a class with a higher salary range shall be placed on the step in the new higher range which is at least equal to an advancement of a full step over the step the employee held in their former range. If the maximum of the range would be exceeded by such advancement, the employee shall receive the top step of the range. An employee thus promoted is assigned to a new salary anniversary date effective on the date of promotion.
E. Salary Upon Transfer. Any employee who is transferred from one position to another position in the same class, or to another position in a class having the same salary range, shall be compensated at the same step of the salary range as the employee previously received and their salary anniversary date shall not change.
F. Salary on Change in Range Assignment. Whenever a class is reassigned to either a higher or lower salary range by the Council, the salary of each incumbent in such class on the date the reassignment is effective shall be adjusted to the salary position in the new range that corresponds to the salary the employee was receiving in the former range and the employee shall retain the same salary anniversary date. If appropriate, the City Manager may choose to Y-rate the employee, if the salary range is lower than what the employee was previously earning.
G. Salary on Reallocation of Position. If the position is reallocated to a class having the same salary range, the salary and the salary anniversary date of the incumbent shall not change. If the position is reallocated to a class which has a higher salary range, the City Manager shall adjust the salary of the incumbent employee to fit the higher salary range which is at least as much as the employee was receiving in the former range and the employee shall retain the same salary anniversary date. If the position is reallocated to a class with a lower salary range, and the employee's salary exceeds the top step of the class to which their position is reallocated, their salary shall be Yrated until it is exceeded by the top step of the class. The employee's salary anniversary date shall not change.
H. Salary on Demotion. Any employee who is demoted to a position in a class with a lower salary range shall have their salary adjusted by one the following three methods:
1. If a disciplinary demotion, the employee's salary may be reduced. A new salary anniversary date shall be established on the basis of the demotion. 990
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2. If a non-disciplinary demotion, the employee's salary may be reduced. The employee shall retain their salary anniversary date.
3. In the discretion of the Personnel Officer, a demoted employee's salary may be Y-rated. A Y-rated salary is one that is paid above the maximum established salary range for the incumbent's classification. An employee whose salary is Y-rated will retain their current rate of pay until such time that the class has a higher maximum salary rate.
I. Acting Pay. An employee who is required on the basis of an acting appointment to serve in a class with a higher salary range than that of the class in which the employee is normally assigned, shall receive the entrance salary rate of the higher salary range or one rate higher than the rate the employee normally receives, whichever is greater, provided the employee shall perform all the duties and assume all the responsibilities of the higher class, and only after the employee has served for 10 consecutive working days when working a 5/8 schedule or 8 consecutive working days when working a 4/10 schedule in the higher classification.
J. Bilingual Pay. Employees in certain classifications, as determined at the City’s sole discretion, may be eligible to receive $100.00 per month as bilingual pay premium.
To receive the bilingual pay premium, an employee must be regularly accessible to the public in-person and through alternative means of communication, including but not limited to on the phone and via email, and shall successfully complete a language proficiency examination, selected at the City’s sole discretion. Upon successfully completing such proficiency examination, the eligible employee shall receive the bilingual pay premium effective on the first pay period of the month following the test date. Bilingual pay premium shall be paid in two payments each month, on the first and second pay period of each month at a rate of $50 per pay period.
The City, at its sole discretion, shall determine which languages qualify for bilingual premium pay.
K. Special Salary Adjustments. Notwithstanding anything in these Rules to the contrary, in order to correct gross inequities, or to reward outstanding achievement and performance, the City Manager may adjust the salary rate of an incumbent of a particular position to any step within the salary range for the class to which the position is allocated.
L. Cost of Living Adjustment. Beginning June 12, 2024, City Council, at its sole discretion, will consider providing a Cost of Living Adjustment (“COLA”) to all employees on an annual basis with any wage adjustment going into effect on July 1.
City Council will review staff recommendation for the cost of living increase based on the published Riverside-San Bernardino-Ontario, CA, Consumer Price Index – U 12-month percent changes on all items for the month of March to consider potential COLA adjustments. Except as otherwise supported by justifiable findings, including 991
City of Wildomar Personnel Rules and Regulations P a g e | 11 the City’s budgetary status, such COLA shall be capped at 3% as approved by City Council.
M. Pay Periods. The salaries and wages of all employees shall be paid bi-weekly. In the event a payday falls on one of the holidays listed in these Rules, or on a Saturday or Sunday, the immediately previous working day shall become the payday.
N. Standby and Callback Pay.
1. Standby Pay. When assigned to standby duty, the employee will receive thirty-five dollars ($35) per day for each day in which they assume standby duty. If the employee is unable to perform the duties prescribed in the Standby Duties Policy, the employee will not receive standby pay for the days in which they were not able to perform such duties.
2. Callback Pay. Callback pay applies to all regular, non-exempt employees and occurs when an employee is called back to work to perform services not in conjunction with a regularly scheduled work shift. Callback pay does not apply to hours worked as a continuation to the end of the shift (for example if an employee is required to stay an additional hour after their shift is over) or a shift scheduled to work at a different time, such as early mornings or late nights. If an employee is called to work early under this rule, callback pay will cease at the beginning of their normal shift, with a minimum of two (2) hours paid at the callback rate. All callback pay will be paid out to the employee and is not eligible to be credited towards any leave banks. a. Callback Rate for a Physical Response. The City shall pay nonexempt, regular employees at the premium rate of one and one-half (1½) times the employee's base pay for the actual hours worked, or a minimum of two (2) hours, whichever is greater. Callback pay is only applied when an employee leaves the work premises, and the employee is required to physically respond to the City to perform services outside of the employee's regular scheduled working hours.
The callback time will commence from the time the employee leaves their residence or current location and is going directly to the incident or reporting location. The callback time will end when the employee leaves the incident or reporting location.
b. Callback Rate for a Remote Response. A remote response may include answering a request by phone, laptop, or other remote device.
Regular non-exempt employees who have a remote response will be compensated in fifteen (15) minute intervals at one and one-half times their base rate of pay.
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City of Wildomar Personnel Rules and Regulations P a g e | 12 O. Severance Upon Termination. Upon termination without cause, employees who are either in the Executive Classification, or are Department Heads, shall receive severance payment, upon execution of a waiver and release of all claims acceptable to the City, equivalent to 90 days of their base salary.
However, in no event shall the total cash value of the Severance Pay exceed the value of the employee’s monthly salary multiplied by eighteen (18), or multiplied by the month’s remaining in employee’s term, whichever is less.
1. Reimbursement Upon Conviction of Abuse of Office. In the event any employee is convicted of any crime involving an abuse of the employee’s office or position, as defined by California Government Code Section 53243.4, the employee is not entitled to receive Severance Pay, and must reimburse the City for any Severance Pay received.
2. Effect of Termination for Cause. If an executive employee or a Department Head is terminated for cause, they shall not be entitled to receive severance pay. Cause for termination shall be deemed to exist if any of the following occurs:
a. The City performs an administrative investigation based on charges against an employee by a prosecuting agency with any of the following criminal conduct: theft or attempted theft from the City; fraud or other type of criminal dishonesty; misuse or misappropriation of public funds; assault, battery or other criminal physical injury to another person; any felony; solicitation, prostitution, or other sexually oriented crime; or for violating Government Code §§ 1090 et seq. and/or § 53243.4, and such administrative investigation makes a finding, based on a preponderance of the evidence, that such conduct occurred and violated the City’s Rules;
b. The employee is fined by the Fair Political Practices Commission for a violation of the Political Reform Act or FPPC Regulation in an amount in excess of one thousand five hundred dollars ($1,500); c. An independent investigation sustains that the employee engaged in unlawful discrimination or harassment of an official, officer, employee or agent of City or a third party while conducting City business or violated any provisions of the City’s Municipal Code;
d. Unauthorized absence or leave;
e. Use or possession of illegal drugs
f. Material acts of dishonesty;
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City of Wildomar Personnel Rules and Regulations P a g e | 13 g. Persistent failure to disclose material information regarding the business or operation of the City necessary for the City Council to undertake its obligation as the elected legislative body of the City; h. Material failure to follow clear and legal directives of a majority of City Council provided in a duly noticed public meeting, including closed session while in the performance of City Manager duties or acting City Manager duties; or
i. Any other violation of these Rules, including a violation of a listed cause for discipline under Section XVI of these Rules, or other City personnel policies or procedures.
RULE VI. APPLICATIONS, RECRUITMENT AND EXAMINATIONS
A. Vacancies. Except for the City Manager, Department Heads, Assistant City Manager, Deputy City Manager, and/or Assistant to the City Manager positions, vacant positions may be filled only by selection from an eligibility list, by acting appointment, provisional appointment, by transfer, by reinstatement, or by demotion.
Each Department Head is entitled to select a candidate to fill a vacancy within their department subject to the provisions in this rule and approval by the City Manager.
The City Council shall select the City Manager. The City Manager, or designee, shall select the Department Heads, Assistant City Manager, Deputy City Manager and Assistant to the City Manager. These positions may be filled by the method selected by the City Council or the City Manager to obtain the best candidate for the position.
The provisions of this rule are inapplicable to the filling of vacancies listed in this paragraph.
B. Announcement of Vacancies/Acceptance of Applications. When a position becomes vacant, the applicable Department Head shall notify the Personnel Officer. All positions shall be publicized by such methods as the Personnel Officer deems appropriate. The announcements shall specify the title and pay range of the class; the nature of the work to be performed; the experience and education requirements; the knowledge, skills, and abilities desirable for the performance of the work; how to apply; the application deadline date; that a post- offer, pre-employment physical examination is required, which may include a drug test; that upon receiving a conditional offer of employment, a criminal background check is required through the submission of fingerprints; and other relevant information. Applications will be available on the City’s website.
C. Disqualification of Applicants. The Personnel Officer may reject any application which indicates on its face that the applicant does not possess the minimum 994
City of Wildomar Personnel Rules and Regulations P a g e | 14 qualifications required for the position, or because the applicant has failed to timely submit the application, fully complete the application, or submit all required materials.
D. Ineligibility for Employment. Further examination or consideration for employment of any applicant may be discontinued, and any employment of any person may be terminated, when any of the following has been determined by the Personnel Officer:
1. The individual does not meet the minimum qualifications established for the class or position to which they seek appointment;
2. The individual has made a false statement, misrepresentation, or omission of material fact, or actual or attempted deception, fraud or misconduct in connection with their application;
3. The application shows on its face that the applicant is physically or psychologically restricted from performing the essential functions of the position applied for, and the City determines that no reasonable accommodation can be made for such medical restrictions in the position applied for;
4. An employment history or personal conduct which demonstrates a lack of fitness for City employment, including dismissal for cause from prior public or private employment;
5. The individual has failed to submit a complete application within the prescribed time limit;
6. The individual has directly or indirectly obtained information regarding examinations to which applicants are not entitled;
7. The individual has been convicted, including pleas of guilty and nolo contendere, of any felony or misdemeanor, which was of such a nature as to reflect adversely and substantially on the applicant’s ability to perform the duties of the position. The City Manager, or designee, may disregard such convictions of felonies or misdemeanors if it is found and determined by the City Manager that mitigating circumstances exist. In making such determination, the City Manager may consider the classification, including sensitivity, to which the person is applying or being certified and whether the classification is unrelated to the conviction; the nature and seriousness of the offense; the circumstances surrounding the offense; the length of time elapsed since the conviction; the age of the person at the time of conviction; the presence or absence of rehabilitation or efforts at rehabilitation; and/or contributing social or environmental conditions.
a. Unless otherwise required by law, the City will not ask an applicant for employment to disclose, orally or in writing, information concerning the 995
City of Wildomar Personnel Rules and Regulations P a g e | 15 conviction history of the applicant, until the City has issued a conditional offer of employment.
b. Applicants who receive a conditional offer of employment may be requested to complete a supplemental form regarding criminal conviction history for review by the City, and a background screening, as part of the application process. The Human Resources and Risk Manager will conduct an individual assessment, as may be required by law, for each applicant who has prior convictions before determining whether to disqualify the applicant and rescind the conditional offer of employment.
8. The individual has otherwise violated provisions of these Rules.
In addition, applicants with the least desirable background or qualifications among a large number of applicants may be denied further participation in the selection process through an evaluation of their qualifications, thus providing a reasonable number of the best qualified candidates for consideration.
Applicants disqualified from further participation in the selection process will be promptly notified to permit submission of additional information provided that the time limit for receiving applications has not expired. Notice will be mailed to the last known address and/or will be emailed to the email address provided by the applicant on the applicant’s application; it will be the applicant’s responsibility to keep the applicant’s current physical address and email address on file. Whenever an application is rejected, the Personnel Officer will mail and/or email notice of such rejection to the applicant.
E. Selection Process. The selection process shall be impartial and relate to those subjects which, in the opinion of the Personnel Officer, fairly measure the relative capacities of the applicants to execute the duties and responsibilities of the class to which they seek to be appointed. The selection process may include but is not necessarily limited to achievement, aptitude, and other written tests, personal interview, performance tests, physical agility tests, evaluation of daily work performance, work samples, criminal background check (after the City has provided a conditional offer for employment), medical tests (possibly including a drug test) after a conditional offer for employment has been accepted, successful completion of prescribed training, or other selection techniques as determined by the Personnel Officer. The selection process shall be designed to provide equal opportunity to all candidates by being based on an analysis of the essential requirements of the class, covering only factors related to such requirements. The City also retains the right to conduct a thorough background check of each applicant, which may include a credit verification for certain classifications.
The Personnel Officer may enter into a contract with any competent agency or individual for the preparing and/or administering portions of the selection process. 996
City of Wildomar Personnel Rules and Regulations P a g e | 16 If the Personnel Officer does not contract these duties to an agency or individual, then the Personnel Officer shall ensure that such duties are performed.
F. Creation of Eligibility List. As soon as possible after the completion of a recruitment, the Personnel Officer shall prepare and maintain an eligibility list consisting of the names of candidates who qualified as finalists. Eligibility lists shall remain in effect for up to 6 months unless the Personnel Officer abolishes the eligibility list after determining that the abolition of the list is in the best interest of the City. The name of any person appearing on an eligibility list shall be removed by the Personnel Officer if the person requests in writing that their name be removed or if the person fails to respond to a notice of certification mailed to the last designated physical address or emailed to the last designated email address. Persons on eligibility lists as a result of an internal recruitment who leave the service of the City for any reason shall automatically be dropped from such lists.
G. Physician's Examination. Applicants may be required to submit to a physician's examination at the City's expense upon being made a conditional offer of employment. As set forth in more detail in the City’s Drug-Free Workplace Policy, the physician's examination shall include a drug and alcohol test for positions that are (1) safety-sensitive; or (2) involve a position of influence over children. When a drug and alcohol test is required, applicants shall be made aware of that in the announcement published under Rule VI.B. No job commitment shall be made until a negative drug screen result is obtained and a physician has certified that the applicant is medically qualified to perform the essential functions of the position.
When the applicant reports to the medical facility for the scheduled examination, personal identification shall be provided to the facility in the form of a photograph and verifiable signature (for example, a driver's license or state-issued identification card). All test results will be kept confidential. The applicant will be told whether the tests were passed or failed, but only the Personnel Officer and their assistant will have access to the test results. If required, the drug/alcohol examination shall be administered in accordance with the City's Drug-Free Workplace Policy.
RULE VII. APPOINTMENTS
A. Appointment of New Employee. The hire date of a new employee shall be that of the first day actually worked.
B. Provisional Appointments. It shall be the policy of the City to require all Department Heads and other appointing authorities, whenever possible to notify the Personnel Officer, of impending or anticipated vacancies in their departments sufficient in advance so as to allow for the establishment of an appropriate eligibility list.
However, when the demands of the services are such that it is not practicable to give such notification and if it is not practicable to delay appointment until a new eligibility 997
City of Wildomar Personnel Rules and Regulations P a g e | 17 list can be certified, the appointing authority may make a provisional appointment to the position, in accordance with the following:
1. As soon as practicable, but not longer than six months after a provisional appointment has been made, the Personnel Officer may cause an examination to be prepared, and all positions filled provisionally shall be filled by an appointment from an eligibility list.
2. A person appointed to a position on a provisional basis may be entitled to credit for the time served under the provisional appointment toward if the employee is awarded the position on a non-provisional basis if the employee was performing the full range of duties.
3. No special credit shall be allowed in any examination or the establishment of any eligibility lists for services rendered under a provisional appointment.
4. Except as otherwise required by law, a provisional appointee will not be entitled to the rights and benefits afforded to employees under these Rules.
5. Except for retired annuitants, no person shall be employed by the City under provisional appointment for a total of more than six months in any fiscal year except that the Personnel Officer may extend the period of any provisional appointment for not more than 90 days by any one action; provided; however, no provisional appointment shall cause any person to work more than 960 hours (if paid on an hourly basis) or 125 days (if paid on a per diem basis) in a fiscal year.
6. A person who has retired from a CalPERS employer (“retired annuitant”) may only be appointed to a provisional appointment when all of the following conditions are met, unless otherwise allowed by CalPERS during extenuating circumstances:
a. The City can show the retired annuitant has previous experience and the skill set needed to perform the work required.
b. The appointment is made to fill a vacant position during the recruitment to permanently fill the vacancy, or during an emergency to prevent stoppage of public service. A recruitment to permanently fill the vacant position must be open before the retired annuitant is appointed. c. Retired annuitants cannot begin employment before the 181st day after their retirement date, unless the City certifies the nature of the employment and that the appointment is necessary to fill a critically needed position before 180 days has passed, and the City Council approves the appointment in a public meeting. The appointment may not be placed on a consent calendar.
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City of Wildomar Personnel Rules and Regulations P a g e | 18 d. If the retired annuitant is under the normal retirement age, he or she must have a bona fide separation in service. Further, the retired annuitant must not have received unemployment insurance payments for retired annuitant work with any public employer within the 12 months prior to the date of the provisional appointment, and he or she must certify to this in writing to the City.
e. A retired annuitant may only be appointed once to the position.
Provisional appointments of retirees must specify a beginning date and an end date for the appointment, and the appointment term must not result in the retired annuitant working more than a combined 960 hours in a fiscal year for all CalPERS employers. If a retired annuitant works more the 960 hours in a fiscal year, he or she must be reinstated. The Personnel Officer may not extend any provisional appointment of a retired annuitant and must ensure the retired annuitant does not exceed the 960 hours limit.
f. The rate of pay for the retired annuitant must fall within the monthly rate of pay range for the vacant position, and he or she may not receive any other benefit, incentive, compensation in lieu of benefits, or other form of compensation in addition to this base rate.
The City ensures the retiree is enrolled as a retired annuitant with CalPERS and that the pay rate and hours worked by the retired annuitant are reported to CalPERS.
C. Acting Appointments to a Higher Class. Acting appointments may be used to fill positions that are vacant or that are temporarily vacant, such as when an employee is on an extended leave of absence. Where applicable, upon the return of the incumbent from leave or disability, the acting appointment shall be immediately terminated, and the appointee shall resume regular duties, compensation and privileges as if the appointee had continued their duties in their regular classification.
Acting appointments shall be subject to the following:
1. Whenever the needs of the City require an employee to temporarily perform the duties of a higher classification than that in which the employee is currently employed for a period of more than 10 consecutive working days when working a 5/8 schedule or 8 consecutive working days when working a 4/10 schedule, the employee shall receive the salary rate of the higher class in which the employee is performing the required duties. In such cases, the employee shall be paid at an appropriate step of the current salary schedule of the higher classification which will assure an increase of not less than 5% greater than the salary of the employee’s current position, but in no case shall such salary exceed the top salary step of the higher classification. 999
City of Wildomar Personnel Rules and Regulations P a g e | 19 The higher salary rate payable shall commence on the ninth or eleventh day as described in the paragraph above following the temporary reassignment to the performance of duties of the higher classification. The requirement for the performance of duties of the higher classification shall be placed in writing by the City Manager, or the City Manager’s designee, following a recommendation by the affected Department Head. No employee shall be required to perform any of the duties of a higher classification unless that employee is deemed to possess the minimum qualification of the higher classification by the City Manager, or the City Manager’s designee, as recommended by the affected Department Head.
2. In no case shall an employee serve as an acting appointee more than 960 hours in a fiscal year or six (6) total months, whichever comes first, in a higher classification.
3. An employee appointed in an acting capacity shall be eligible to receive performance increases in the permanent position during the acting appointment but shall not be entitled to performance increases in the position which the employee holds in an acting capacity, other than to address acting pay in accordance with letter I. Acting Pay of Rule V. Compensation.
4. The City Manager, or the City Manager’s designee, shall obtain the employee’s written consent for the temporary performance of any of the duties of the higher classification beyond a period of twelve (12) working days, prior to an employee assuming or continuing the duties and compensation of a higher classification, which consent shall clearly state that it is understood that employee’s salary rate will revert to the salary rate in the employee’s permanent position upon the expiration of the need for the performance of the duties of the higher classification.
D. Emergency Appointment. To meet the immediate requirements of an emergency condition, the Department Head, or any persons so authorized in advance by the City Manager, may employ such persons as may be needed for the duration of the emergency without regard to these Rules. As soon as possible, such employment will be reported promptly to the Administrative Services Director or designee.
Emergencies are defined as fire, flood, earthquake, or other public calamity, which threatens life or property. The emergency appointee shall be considered a temporary employee and, except as otherwise required by law, shall not be entitled to the rights and benefits afforded to employees under these Personnel Rules. In the event that a Retired Annuitant is hired as an emergency employee, the appointment and employment of the Retired Annuitant will be governed by the applicable statutes and regulations of CalPERS or other applicable retirement system, to the extent such provisions remain in effect during the emergency. In the event that the City’s rules and procedures on provisional employment are inconsistent with the applicable statutes and regulations governing the employment of retired annuitants, the statutes and regulations shall control.
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City of Wildomar Personnel Rules and Regulations P a g e | 20 E. Reinstatement. With the approval of the City Manager, an employee who has completed at least 12 months of service and who has resigned in good standing may be reinstated within one year of the effective date of resignation to a vacant position in the same or comparable class. For purposes of reinstatement, "good standing" shall mean that the employee was not terminated for cause under these Rules, did not resign in lieu of termination, provided the required amount of notice of resignation, and was evaluated at least as "Satisfactory" or an equivalent rating on the employee’s last performance evaluation. No credit for former employment shall be granted in computing salary, vacation, sick leave, retirement benefits, or other benefits except on the specific written direction of the City Manager at the time of reinstatement. Such reinstatement action may, at the discretion of the City Manager, take precedence over any eligibility list except a reemployment list. An individual requesting reinstatement is required to successfully complete a background examination and physician’s examination, as set forth in Rule VI.
F. Reemployment. An employee may be appointed from a reemployment list following layoff.
G. Promotion. It is the policy of the City to fill authorized vacant positions based on merit. Insofar as consistent with the best interest of the City, vacancies may be filled by promotion. All employees meeting the qualifications standard of a higher-grade position under the same or different job classification may be considered for promotion. Employees promoted to a new position will start at the salary step determined appropriate by the City Manager. The date of promotion will become the employee’s new anniversary date for performance review and merit salary increase purposes. Employees receiving promotions will be reviewed after six months, one year, and annually thereafter, with the opportunity for the first merit salary increase at the one-year mark.
H. Demotion. The City Manager may voluntarily or involuntarily demote an employee.
No employee will be demoted to a position for which the employee does not possess the minimum qualifications. An employee may also request a voluntary demotion. An employee who possesses the minimum qualifications may request a voluntary demotion to a lower position. An employee requesting a voluntary demotion will submit a memorandum to the employee’s Department Head requesting a voluntary demotion and detailing the reasons for the request. Upon receipt of the request for voluntary demotion, the Department Head will notify the City Manager. If the request for voluntary demotion involves a change from one department to another, both Department Heads must consent thereto unless the City Manager orders the demotion. The employee’s anniversary date will change to the effective date of the demotion. Demoted employees will have their salary reduced according to the appropriate salary range. Salary determinations for demoted employees are solely within the discretion of the City Manager.
I. Transfer. The Personnel Officer may transfer an employee from one position to another in the same class or a comparable class at the same salary level. While the 1001
City of Wildomar Personnel Rules and Regulations P a g e | 21 Personnel Officer retains the right to order the transfer, consideration will be given to the affected employee's and the Department Head’s wishes.
J. Interactive Process Transfer. As part of the interactive process and in accordance with state and federal law, an employee who is unable to perform the essential functions of the employee’s present classification may be placed in a vacancy in another class that does not result in a promotion if the employee can perform the essential functions of the vacant position, with or without reasonable accommodation.
RULE VIII. NEPOTISM AND CONSENSUAL ROMANTIC RELATIONSHIPS
BETWEEN EMPLOYEES
A. Nepotism.
1. Definitions.
a. Applicant. A person who applies for a position at the City and is not a Current Employee.
b. Change of Status. A change in the legal status or personnel status of one or more Current Employees.
i. Changes in legal status include but are not limited to marriage, divorce, separation, or any such change through which a Current Employee becomes a Family Member or ceases to be a Family Member of another Current Employee.
ii. Changes in personnel status include but are not limited to promotion, demotion, transfer, resignation, retirement or termination of a Current Employee who is a Family Member of another Current Employee.
c. Current Employee. A person who is presently a City employee, or an elected or appointed City official.
d. Direct Supervision. One or more of the following roles, undertaken on a regular, acting, overtime, or other basis shall constitute Direct Supervision:
i. Occupying a position in an employee’s direct line of supervision; or ii. Functional supervision, such as a lead worker, crew leader, or shift supervisor; or
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City of Wildomar Personnel Rules and Regulations P a g e | 22 iii. Participating in personnel actions including, but not limited to, appointment, transfer, promotion, demotion, layoff, suspension, termination, assignments, approval of merit increases, evaluations, and grievance adjustments.
e. Family Member. A spouse, domestic partner (registered or not), parent, parent-in-law, stepparent, legal guardian, sister, step-sister, sister-in-law, brother, step-brother, brother-in-law, child, step-child, legal ward, daughter- in-law, son-in-law, grandchild, grandparent, niece, nephew, spouse’s niece, spouse’s nephew, domestic partner’s niece, or domestic partner’s nephew.
f. Prohibited Conduct. Conduct by Family Members including, but not limited to, one or more of the following:
i. Participation directly or indirectly in the recruitment or selection process for a position for which a Family Member is an Applicant. ii. Direct Supervision of a Family Member that does not comply with limitations set forth in this Section;
iii. Conduct by one or more Family Members that has an adverse effect on supervision, safety, security or morale.
2. Department Head Authority. Department Heads are authorized to make initial determinations under this Rule. Should the Department Head be related to the employee/applicant in question, the City Manager shall appoint another Department Head to execute the responsibilities under this Rule.
3. Applicants for Employment.
a. No qualified Applicant may be denied the right to file an application for employment and compete in the examination process. However, consistent with this Section, the City may reasonably regulate, condition, or prohibit the employment of an Applicant for a full-time position.
b. Disclosure of Relationship. Each Applicant is required to disclose the identity of any Family Member who is a Current Employee. c. Review of Department Head. For each Applicant who has a Family Member who is a Current Employee, the Department Head shall assess whether any of the following circumstances exist:
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City of Wildomar Personnel Rules and Regulations P a g e | 23 i. Business reasons of supervision, safety, security or morale warrant the City’s refusal to place the Applicant under Direct Supervision by the Family Member; or
ii. Business reasons of supervision, security, or morale that involve potential conflicts of interest or other hazards that are greater for Family Members than for other employees, which warrant the City’s refusal to permit employment of Family Members in the same department, division, or facility.
d. Decision of the Department Head. If the Department Head determines that either of the above circumstances exist, the Department Head shall exercise his or her discretion to either reject the Applicant or consider the Applicant for employment in a position that does not present either of the above circumstances.
i. Following examination, if the Applicant is successfully certified as eligible pursuant to Rule VI, they may be employed in a position for which the Department Head has determined that neither
circumstance exists pursuant to Rule VII.A.3.c.
ii. When an eligible Applicant is refused appointment by virtue of this Rule, their name shall remain on the eligibility list for openings in the same classification. For each opening, the Department Head shall make a determination consistent with Rule VII.A.3.c.
4. Guidelines for Current Employees.
a. Employees shall report a Change of Status to the Department Head within a reasonable time after the effective date of the Change of Status. Wherever feasible, Employees shall report a Change of Status in advance of the effective date.
b. Within thirty days from receipt of notice, the Department Head shall undertake a case-by-case consideration and individualized assessment of the particular work situation to determine whether the Change of Status has the potential for creating an adverse impact on supervision, safety, security, or morale.
i. The Department Head shall make a good faith effort to regulate, transfer, condition or assign duties in such a way as to minimize potential problems of supervision, safety, security, or morale. ii. Notwithstanding the above provisions, the City retains the right to exercise its discretion to determine that the potential for creating an adverse impact on supervision, safety, security, or morale cannot 1004
City of Wildomar Personnel Rules and Regulations P a g e | 24 be sufficiently minimized and to take further action as set forth in Rule VII.A.5.b.
5. Monitoring by Department Head.
a. Following a Change of Status or new hire of a Family Member, affected Department Heads shall reasonably monitor and regulate both Family Members’ conduct and performance for a period of one year from the date of the Department Head’s determination. The Department Head shall document these actions. Successive Department Heads may revisit such a determination at their discretion. b. If the Department Head determines, subject to any applicable requirements of due process, that an employee has engaged in Prohibited Conduct, the Department Head shall reevaluate the Department Head’s prior determination, and may take one or more of the following additional measures:
i. Transfer one of the Family Members to a similar position that would not be in violation of this policy. The transfer will be granted provided the Family Member qualifies and there is an opening to be filled. There can be no guarantee that the new position will be within the same classification or at the same salary level. ii. If the situation cannot be resolved by transfer, one of the Family Members must separate from City employment. If one of the employees does not voluntarily resign, the employee with primary responsibility for the Prohibited Conduct will be discharged. c. Department Heads who receive complaints from other employees that one or more Family Members has engaged in Prohibited Conduct shall respond in accordance with existing complaint and disciplinary procedures, where applicable.
d. Where situations exist prior to the effective date of this Section that may be in conflict with this Section, every effort shall be made to reasonably address the situation so as to avoid any future conflict.
6. Appeal of Department Head Determination. Current Employees and Applicants affected by the application of this Section, may appeal the action of the Department Head to the City Manager within ten days of the action. The City Manager shall hear the individual’s concerns and issue a written decision within 30 days of the receipt of the individual’s appeal. The decision of the City Manager is final, and no other appeal may be had unless the employee is entitled to further administrative appeal under other provisions of these Rules.
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City of Wildomar Personnel Rules and Regulations P a g e | 25
7. Employee Complaints. Employees who believe that they have been adversely affected by Prohibited Conduct by one or more Family Member should submit complaints to a Department Head or to the Personnel Officer.
8. Savings Clause. Should any provision of this Section, or any application thereof, be unlawful by virtue of any federal, state, or local laws and regulations, or by court decision, such provision shall be effective and implemented only to the extent permitted by such law, regulation or court decision, but in all other aspects, the provisions of this Section shall continue in full force and effect.
B. Consensual Romantic Relationships Between Employees.
1. General. Consensual romantic or sexual relationships between City employees can lead to misunderstandings, complaints of favoritism, adverse effects on employee morale, and possible claims of sexual harassment during or after termination of the relationship. As a result, such relationships present existing or potential conflicts that adversely affect the efficient operation of the City. Relationships that present an actual conflict under this Section are therefore prohibited.
2. Application. This section shall apply to all City employees, regardless of gender or sexual orientation, who have a romantic or sexual relationship with another City employee. The provisions of Section A of this rule regarding nepotism shall govern employees who marry or become domestic partners with another City employee.
3. Definition of Conflict. For purposes of this section, a conflict exists if business issues of supervision, safety, security, and/or morale would be impacted by a romantic or sexual relationship between two employees.
4. Supervisor’s Duty to Report. If a romantic or sexual relationship exists between a Supervisor and another employee (including another Supervisor), the Supervisor shall promptly disclose the relationship to the Personnel Officer and request a determination as to whether the relationship presents a conflict. The disclosure must identify the names and positions of both employees. A Supervisor’s failure to comply with this section shall be grounds for discipline up to and including termination.
5. Determination by City Manager. Within five working days, the City Manager shall issue a written determination as to whether the relationship presents a conflict and is thereby prohibited. The City Manager shall have exclusive discretion in making the determination.
6. Resolution of Conflicts. Subject to limitations imposed by the Municipal Code and applicable provisions of these Rules, the City Manager will attempt in 1006
City of Wildomar Personnel Rules and Regulations P a g e | 26 good faith to work with the Supervisor and the other employee to consider options to eliminate the conflict, including removing the Supervisory authority that created the conflict, reassignment, transfer or voluntary demotion of a Supervisory employee, or where the City Manager determines that modification of a Supervisor’s assignment is not feasible, reassignment, transfer or voluntary demotion of a non-Supervisory employee. The City Manager retains discretion to determine that the conflict may be resolved via voluntary resignation or termination only.
7. Prohibited On-Duty Conduct. All City employees are prohibited from engaging in intimate, physical, or other conduct in furtherance of a romantic or sexual relationship with another City employee at work locations, including off-site meetings, conferences, and similar activities. Moreover, upon termination of a sexual or romantic relationship with another City employee, employees are prohibited from engaging in behavior that adversely affects the working conditions of any City employee. In general, all employees are expected to observe appropriate standards of workplace conduct in their interactions with other City employees.
8. Complaints. Employees who believe that they have been adversely affected by romantic or sexual relationships between City employees should follow the complaint procedures provided under the City’s Harassment, Discrimination, and Retaliation Prevention Policy. The complaint procedures are available to all employees regardless of their past or present participation in a romantic or sexual relationship with another City employee.
RULE IX. REPORTS AND RECORDS
A. Maintenance of Personnel Files. A personnel history folder shall be kept for each employee. Confidential medical records will be maintained in a separate file from other personnel files. The personnel history folders shall be maintained by the Human Resources and Risk Manager or designee, and shall contain a record of date of employment, promotions, performance reviews, disciplinary actions and such other information as the City Manager, or City Manager’s designee, shall prescribe.
All performance-related entries to personnel history folders shall be brought to the attention of the employee.
B. Review and Access of Personnel Files. Personnel records are confidential and, unless otherwise required by law, access to personnel records will be limited to current or former employees, authorized representatives of current or former employees, and authorized representatives of the City. Rights to access, inspect, and copy personnel records, as well as applicable procedures and limits upon such rights shall be consistent with the law. An individual wishing to review or access their 1007
City of Wildomar Personnel Rules and Regulations P a g e | 27 personnel file must submit such request in writing to the Human Resources and Risk Manager, or designee. The Human Resources and Risk Manager, or designee, will schedule a date and time with the individual to review their personnel file. The date and time will be at reasonable intervals and at reasonable times, but not later than 30 calendar days from the date the employer receives a written request, unless the current or former employee, or their representative, and the employer agree in writing to a date beyond 30 calendar days to inspect the records, and the agreed-upon date does not exceed 35 calendar days from the employer’s receipt of the written request, in accordance with Labor Code 1198.5. Upon request, the employee shall receive a copy of any materials in the personnel file provided that the cost for such copies is paid by the employee. An employee shall be furnished a copy of any statement written for inclusion in the employee's personnel file concerning the employee's conduct or performance.
The Human Resources and Risk Manager, or designee, may reveal the following information regarding an employee, or ex-employee, in response to outside inquiries:
1. Employee's name.
2. Classification title and department.
3. Status.
4. Salary Range.
5. Hire date and/or termination date.
This information is a matter of public record and is available to anyone.
C. Current Address. Employees are required to notify the Human Resources and Risk Manager of any change of name, address, or telephone number within five calendar days of change.
D. References. Any employee who receives a request for a personal reference by a former or current employee is required to forward that request to the Administrative Services Director and seek direction. Only the City Manager and the Administrative Services Director or their designees are authorized to provide references for former or current employees on behalf of the City. No other employee is authorized to provide such written or verbal references or recommendations for former or current employees. Further, no other employee is authorized to respond to questions from persons outside the City about former or current employees regarding their work performance.
E. Destruction of Records. Upon approval of the City Attorney, records relating to personnel may be destroyed as prescribed by law.
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City of Wildomar Personnel Rules and Regulations P a g e | 28 RULE X. PERFORMANCE EVALUATIONS
A. Policy. It is the policy of the City that regular evaluations be made as to the efficiency, competency, conduct and merit of its employees. To this end, it is the responsibility of the City Manager, the Department Heads, and their subordinate supervisors that these evaluations be completed. It is the responsibility of the Personnel Officer to provide and prescribe the forms and procedures to be used in such evaluations of performance and to assist in the training of supervisory personnel so that the program of performance evaluation will be carried on in a sound and effective manner.
B. Authority to Make Evaluations. The City Manager or their designee shall have the authority to prepare performance evaluations. The City Manager, or designee may, however, delegate such authority to such subordinate supervisory employees who are most familiar with work of the employees to be evaluated, provided that the City Manager, or designee, shall review and approve all performance evaluations of personnel under their jurisdiction.
C. Time for Performance Evaluation. An annual performance evaluation may be prepared and received before the employee's salary anniversary date, and shall evaluate the employee's performance in the last year. If the employee receives a rating of (or equivalent to) "improvement needed" or "unsatisfactory" in the employee’s annual performance evaluation, their supervisor shall be responsible for conducting an additional performance evaluation three months from receiving such rating and again three months subsequent to that. In addition, the employee may be given a performance evaluation at any other time during the year at the discretion of the appointing authority.
D. Postponement of Performance Evaluation. Unless otherwise required by law, the use of any leave of absence in excess of 30 consecutive days shall cause the date of the employee's performance evaluation to be extended by the same period of time that the employee was absent.
E. Review with the Department Head. A performance evaluation must be submitted for review by, and be approved by, the Department Head before the performance evaluation is provided to or discussed with an employee.
F. Review with Employee. Each performance evaluation shall be presented by the supervisor who prepared it and discussed with the employee. The employee shall sign the evaluation to acknowledge its contents. Such signature shall not necessarily mean the employee endorses the content of the evaluation. Employees may not appeal or grieve the contents of a performance evaluation or the rating(s) received by the employee. Employees who disagree with the contents of their performance evaluation shall have the right to attach a written statement explaining the basis of their disagreement to the performance evaluation.
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City of Wildomar Personnel Rules and Regulations P a g e | 29 G. Retention of Performance Evaluation. After review and approval of the appointing authority, the performance evaluation, as well as any written statement provided by the employee, shall be made a part of the employee's personnel file.
H. Effects of "Improvement Needed" and "Unsatisfactory" Ratings.
1. Any employee who receives an "unsatisfactory" or "improvement needed" rating will not receive any merit salary increase during the period following the report, except as provided in Rule IX.H.2.
2. If an employee who has been denied a merit salary increase improves their performance to such an extent that the appointing authority believes a merit salary increase is now justified, the appointing authority shall indicate the improvement on a report of performance form and may specifically award a merit salary increase. Additionally, in awarding the merit salary increase under this subsection, the appointing authority may change the merit salary increase anniversary date to the date of the award of the merit salary increase or may permit the anniversary date to remain the same. Any merit salary increase awarded under this subsection shall not be made retroactive.
RULE XI. WORKWEEK, HOURS OF WORK AND OVERTIME
A. FLSA Classification. The Personnel Officer shall designate those positions which are exempted from the provisions of the Fair Labor Standards Act ("FLSA") based on an assessment of the duties of each position. This designation will be expressed in the job description for the position.
B. Work Schedules and Workweek. The City Work Schedules include a standard 5/8 schedule and an alternative 4/10 schedule.
a. Alternative 4/10 Workweek and Work Schedule.
i. The City has adopted a 4/10 work schedule for most employees, which consists of ten hours per day, four days per week.
ii. Employees assigned to work a 4/10 work schedule will work Monday through Thursday with Fridays off. At the direction of the City Manager, some employees may be required to work a different schedule due to the requirements of their job classifications or department responsibilities.
iii. The workweek for employees assigned to a 4/10 work schedule shall be seven consecutive 24-hour periods, starting at 12:00 a.m. on Saturday and ending at 11:59 p.m. on the following Friday. Time 1010
City of Wildomar Personnel Rules and Regulations P a g e | 30 worked by non-exempt employees in excess of 40 hours in a workweek shall constitute overtime.
b. Standard Workweek and Work Schedule.
i. The standard 5/8 work schedule consists of eight hours per day, five days per week.
ii. Employees assigned to work a standard work schedule will work Monday through Friday. At the direction of the City Manager, some employees may be required to work a different schedule due to the requirements of their job classifications or department responsibilities. iii. The workweek for employees on the standard work schedule shall be seven consecutive 24-hour periods, starting at 12:00a.m. on Saturday and ending at 11:59 p.m. on the following Friday. Time worked by nonexempt employees in excess of 40 hours in a workweek shall constitute overtime.
C. Recording of Work Hours. All employees are required to report their time using the prescribed timekeeping program. In the absences of any clocking-in/out system, employee time from 1 to 7 minutes shall be rounded down, and thus not counted as hours worked, but employee time from 8 to 14 minutes must be rounded up and counted as a quarter hour of work time.
D. Daily Hours of Work/Shifts. Daily hours of work or shifts for employees within departments shall be assigned by Department Heads as required to meet the operational requirements of such departments. The City reserves the right to regulate and/or change the designation of the specific hours or days to be worked by any employee, and no such change in the scheduling of days or hours worked shall be deemed to constitute overtime, provided the total number of hours and days does not exceed those specified as constituting the standard work year, work period, workweek and workday hereunder.
E. Changes in Work Schedules. The City reserves the right to establish and modify work schedules in order to meet the varying needs of the different City departments. Except in the case of an emergency, Department Heads must provide employees with reasonable notice before changing an employee’s work schedule. If the needs of the City require that a position be assigned to work a different work schedule or have a different workweek than set forth in this section, the City Manager, in consultation with the Department Head, may designate the work schedule and workweek for employees in that position in writing. Any additional alternative workweeks shall be designated by administrative policy adopted by the City Manager.
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City of Wildomar Personnel Rules and Regulations P a g e | 31 F. Meal Periods. Non-exempt employees are entitled to unpaid meal periods during which they shall be entirely relieved of responsibilities and restrictions. Such time shall not constitute hours worked.
1. Non-exempt employees shall be entitled to a 60-minute unpaid meal period during each work shift which equals or exceeds 8 hours; non-exempt employees shall be entitled to a 30-minute unpaid meal period during each work shift which exceeds 5 hours but is less than 8 hours.
2. Supervisors shall schedule meal periods to ensure appropriate coverage.
3. Employees shall take reasonable measures wherever feasible to avoid the need for work to be performed during meal periods. Where required, time spent on such work shall be kept to a minimum, and may only occur with the prior written authorization of a Department Head. Non-exempt employees who work during their meal periods shall be paid for time worked.
G. Rest Periods. Except where unusual operational demands prevent a rest break, nonexempt employees are entitled to two 15-minute paid rest periods during each work shift which equals or exceeds 8 hours, or one 15-minute paid rest period during each work shift which equals or exceeds 4 hours, but is less than 8 hours. Rest periods shall not be combined or added to employees’ meal periods. Rest periods shall also not be added to the beginning or end of an employee’s shift.
H. Overtime. Non-exempt employees shall be entitled to overtime at the rate of one and one-half of their regular hourly rate of pay for each hour worked in excess of 40 hours in any one workweek. Employees are not entitled to compensatory time off in lieu of overtime. Exempt employees are not eligible to receive overtime compensation.
1. Calculation of Hours Worked. For the purposes of overtime compensation, "hours worked" shall only include those periods of time that the employee is required to be on duty or to be on the City's premises or at a prescribed workplace, and all time during which an employee is suffered or permitted to work. As such, paid time off, including for example, time spent on a paid leave of absence, sick leave, holidays and vacation, as well as time assigned as standby duty, shall not be included in the calculation of hours worked.
2. Approval of Overtime. It is the policy of the City to avoid the necessity for overtime work whenever possible. Employees shall take reasonable measures wherever feasible to avoid the need for work to be performed outside of their regularly scheduled shifts.
Employees shall not perform work outside of their regularly scheduled shifts or in excess of 40 hours in a workweek unless requested to do so by their Department Head or with advance written authorization from their Department Head. This requirement applies to, but is not limited to:
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City of Wildomar Personnel Rules and Regulations P a g e | 32 a. Work performed before the start of the shift;
b. Work performed during meal periods;
c. Work performed after the end of the shift; and
d. Other work performed "off the clock" including work performed at home.
Time spent on such work outside an employee’s regularly scheduled shift shall be kept to a minimum. The City will compensate employees for all hours worked as required by law, including overtime hours worked without approval from the pertinent Department Head. However, employees that work overtime without receiving prior approval as required under this section, may be subject to disciplinary action, up to and including, termination of employment.
RULE XII. LEAVES OF ABSENCE
A. Effect of Leave of Absence.
1. Effect of Leave of Absence on Employment Benefits.
a. Fully Paid Leave. Unless otherwise required by law, an employee on a leave of absence who continues to receive full compensation through the use of their accrued leave banks will continue to receive full employment benefits. Such employment benefits may include, but are not limited to, the accrual of paid leaves, accrual of seniority, and cafeteria contributions which remain at the rate the employee would receive if the employee was working their normal work schedule.
b. Partially Paid Leave. Unless otherwise required by law, an employee on a paid leave of absence who is receiving less than full compensation from the City through the use of the employee’s accrued paid leaves shall receive a prorated share of their employment benefits, including, but not limited to, the accrual of paid leaves, cafeteria contributions, or supplemental pay, when only partially paid leave has been received for two consecutive workweeks.
c. Unpaid Leave. Unless otherwise required by law, an employee on an unpaid leave of absence shall not accrue any employment benefits, including, but not limited to, the accrual of paid leaves, accrual of 1013
City of Wildomar Personnel Rules and Regulations P a g e | 33 seniority, cafeteria contributions, and supplemental pay, when unpaid leave has been used for at least 40 hours in a pay period.
2. Effect of Leave on Performance Evaluations and Merit Increases. Unless otherwise required by law, the use of any leave of absence in excess of 30 consecutive days shall cause the date of the employee's performance evaluation, and merit increase, if relevant, to be extended by the same period of time that the employee was absent.
B. Unauthorized Absences. Any employee absent from their job for more than three consecutive working days without prior permission of the Department Head may be considered to have voluntarily resigned from their employment with the City. Any unauthorized absence may be cause for disciplinary action as provided in these personnel rules.
C. Holidays.
All full-time employees are eligible to receive paid holiday leave under this section.
Part-time employees that were hired before September 1, 2023, are eligible for paid holiday leave under this section. Part-time employees hired on or after September 1, 2023, and temporary employees are not eligible for paid holiday leave under this section.
Employees scheduled to work on a holiday listed below will receive pay for actual hours worked as if it were not a holiday in accordance with the Rules, whether that is straight time or overtime as determined in Rule XI. Workweek, Hour of Work and Overtime, in addition to 8 or 10 hours (as described below) of holiday pay. Holiday pay provided under this Rule does not constitute hours worked. Banked holiday hours will no longer be accrued.
1. Holidays Observed for Employees on a 5/8 Work Schedule. As provided in Section B.1.b. of Rule XI, employees working a 5/8 work schedule, that are regularly scheduled Monday through Friday of each week with occasional Saturdays, shall receive 8 hours of pay for holidays observed and recognized under this subsection. Such employees are entitled to the following days as recognized and observed paid holidays:
a. New Year's Day (January 1)
b. Martin Luther King Jr. Day
c. Presidents' Day
d. Memorial Day
e. Independence Day (July 4)
f. Labor Day
g. Veterans Day (November 11)
h. Thanksgiving Day
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City of Wildomar Personnel Rules and Regulations P a g e | 34 i. Day after Thanksgiving Day
j. Each working day of the last calendar week of each calendar year, commencing December 24 and ending December 31
2. Holidays Observed for Employees on a 4/10 Work Schedule. As provided in Section B.1.a. of Rule XI, employees working a 4/10 work schedule, that are regularly scheduled Monday through Thursday of each week, shall receive 10 hours of pay for holidays observed and recognized under this subsection, if such holidays are observed on Monday, Tuesday, Wednesday, or Thursday.
Such employees shall not receive holiday pay for holidays observed on a Friday. Such employees are entitled to the following days as recognized paid holidays, so long as the observed day falls on Monday, Tuesday, Wednesday, or Thursday:
a. New Year's Day (January 1)
b. Martin Luther King Jr. Day
c. Presidents' Day
d. Memorial Day
e. Independence Day (July 4)
f. Labor Day
g. Thanksgiving Day
h. Each working day of the last calendar week of each calendar year, commencing December 24 and ending December 31
D. Comprehensive Annual Leave
Comprehensive Annual Leave (CAL time) is to ensure that all employees have an adequate amount of time off each year for rest and relaxation, personal business, or personal/family illness. All full-time employees earn CAL time from the date of hire.
Part-time employees are not eligible for CAL time; however, they will continue to receive sick leave in accordance with state and federal laws as further detailed in section E of this Rule.
1. Computation of CAL Time
Employees covered by this plan will earn CAL time from the date of hire using the following accrual rates, prorated each pay period, as outlined below.
Months of
Continuous
Employment
CAL Time
Hours
(Annually)
Biweekly
Accrual Rate
(hours per pay
period)
Maximum
Accumulation
(hours)
0 - 60 176 6.77 480
61 - 120 216 8.31 480
121+ 256 9.85 480
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City of Wildomar Personnel Rules and Regulations P a g e | 35 The maximum balance of unused CAL time an employee may have at any one time is four hundred eights (480) hours. The City Manager may grant an employee, on a case-by-case basis, the ability to accrue annual leave above the annual accrual limit for good cause shown.
2. Procedure for Use of CAL Time
Whenever possible, employees should request time off at least two weeks in advance, however, the advance notice does not guarantee the time off request will be approved. Supervisors, managers, and directors will make every effort to approve requests for time off, while ensuring business priorities are being met.
When an employee is unable to request time off in advance, such as for an illness or emergency, the employee shall notify their supervisor prior to the start of their shift, or as soon as reasonably practicable.
Any employee absent for four (4) or more consecutive work days due to illness or accident may, at the discretion of their supervisor and in coordination with human resources, be required to provide a medical certificate from the employee’s medical provider indicating the day(s) of the illness/injury and that the illness/injury prevented the employee from being able to work.
An employee off work or contemplating to be off work due to illness or injury for an extended period equivalent to two (2) workweeks or more shall provide a medical certificate statement as to length of absence from the employee's health care provider stating the employee is either unable to work, or specifically describing any restrictions or light duty requirements.
If a holiday falls on a workday during an employee's CAL time, that day shall be considered as a paid holiday and not CAL time.
3. CAL Time Voluntary Cashout
So long as the employee has at least forty (40) hours of CAL time remaining after any cashout, an employee may cash out up to forty (40) hours of CAL time twice a year, for a maximum of 80 hours of CAL time per calendar year.
The times at which CAL time may be cashed out will be determined by the City’s Administrative Services Department. CAL time cashout shall be paid at the employee's base rate of pay at the time of the conversion. Each employee eligible for CAL time benefit under this section shall make an election no later than December 31 of each calendar year, as to whether the employee wishes to cash out CAL time accrued and unused during the subsequent calendar year. Should the employee elect to cash out their CAL time and they do not have 40 hours remaining after the cashout, their election will default to the available amount that would provide 40 hours of CAL time remaining. Such an election is irrevocable. If an employee fails to make an 1016
City of Wildomar Personnel Rules and Regulations P a g e | 36 election as required by this subsection, such failure will be treated as an election to not cash out CAL time accrued and unused during the subsequent calendar year.
4. CAL Time Cashout at Termination
At termination of employment for any reason, the City shall compensate the employee for the employee's accumulated, but unused, CAL time at the employee's base rate of pay at the time of termination.
E. Sick Leave for Part-Time and Temporary Employees
1. Applicability. This section applies to part-time and temporary employees only.
The City provides paid sick leave to part-time and temporary employees as required under California law. This section does not apply to retired annuitants working for the City.
2. Definitions.
a. Hours Worked. Hours worked shall include all time when a part-time or temporary employee is required to be on duty or to be on the City’s premises or at a prescribed workplace, and all time when a part-time or temporary employee is suffered or permitted to work. Paid sick time is not considered time worked.
b. Family member means any of the following: a child (which means a biological child, adopted child, foster child, stepchild, legal ward, or a child to whom the employee stands in loco parentis. This definition of a child is applicable regardless of age or dependency status), a parent (which means a biological parent, adoptive parent, foster parent, stepparent, legal guardian of an employee or registered domestic partner, or person who stood in loco parentis when the employee was a minor child), a spouse, a registered domestic partner, a grandparent, a grandchild, a sibling, or a designated person (which means a person identified by the employee at the time the employee requests paid sick leave. The City limits the employee to one designated person per 12-month period for paid sick leave).
3. Paid Sick Leave.
a. Eligibility for Sick Paid Sick Leave. Part-time and temporary employees are eligible for paid sick leave after they work for the City for at least thirty (30) days within a calendar year. Part-time and temporary employees who work fewer than thirty (30) days within a calendar year are not eligible for paid sick leave.
b. Accrual of Paid Sick Leave.
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City of Wildomar Personnel Rules and Regulations P a g e | 37 i. Part-time and temporary employees working 10 hours per day shall accrue paid sick leave at the rate of 3.58 hours for each pay period, resulting in 50 hours/5 working days by the employee’s 200th day of employment. Once the part-time or temporary employee has accrued 50 hours of sick leave in a 12-month period, regardless of how much has been used, they will not accrue any additional leave until their annual hire date anniversary, at which time their accruals will begin again under this policy.
ii. Part-time and temporary employees working 8 hours per day or less shall accrue paid sick leave at the rate of 2.86 hours for each pay period, resulting in 40 hours/5 working days by the employee’s 200th day of employment. Once the part-time or temporary employee has accrued 40 hours of sick leave in a 12-month period, regardless of how much has been used, they will not accrue any additional leave until their annual hire date anniversary, at which time their accruals will begin again under this policy.
c. Qualification Period Prior to Use of Paid Sick Leave. Part-time and temporary employees are entitled to use their accrued paid sick leave only after completing ninety (90) days of employment. Part-time and temporary employees who work fewer than 90 days are not entitled to take any paid sick leave.
d. Notice of Accrued Paid Sick Leave. All accrued paid sick leave will be reflected on each part-time and temporary employee’s paystub, including the balance of paid sick leave available.
e. No Advance of Paid Sick Leave. The City will not “advance” or “lend” paid sick leave to a part-time or temporary employee before it has been accrued.
f. Sick Time Rate of Pay. Part-time and temporary employees shall be compensated for paid sick leave at their regular rate of pay for the position and schedule in which paid sick leave is utilized.
g. Annual Paid Sick Leave Use Limit. Part-time and temporary employees may use up to 40 hours or five days, whichever is more, of accrued paid sick leave during a calendar year.
h. Accrued Paid Sick Leave Carry-Over. Unused paid sick leave may be carried over from calendar year to calendar year with a maximum paid sick leave bank of 80 hours or ten working days, whichever is more. 1018
City of Wildomar Personnel Rules and Regulations P a g e | 38 i. Minimum Increments Paid Sick Leave. The minimum charge to a part-time or a temporary employee’s paid sick leave account shall be 30 minutes per workday.
j. Permitted Use of Sick Leave. Upon the oral or written request of a parttime or a temporary employee, the City shall permit the part-time or temporary employee to use accrued paid sick leave for the following purposes:
• Diagnosis, care, or treatment of an existing health condition of, or preventative care for, an employee or an employee’s family member.
• Part-time and temporary employees who are victims of crime or abuse may take time off as paid sick leave to obtain or attempt to obtain any relief. Relief includes, but is not limited to, a temporary restraining order, restraining order, or other injunctive relief, to help ensure the health, safety, or welfare of the employee or their child. • Part-time and temporary employees who are victims of crime or abuse may take time off as paid sick leave to seek medical attention for injuries caused by crime or abuse; to obtain services from a domestic violence shelter, program, rape crisis center, or victim services organization or agency as a result of the crime or abuse; to obtain psychological counseling or mental health services related to an experience of crime or abuse; or to participate in safety planning and take other actions to increase safety from future crime or abuse, including temporary or permanent relocation.
k. Request for Use of Paid Sick Leave.
• A part-time or temporary employee shall contact the employee’s immediate supervisor prior to or within one hour of the commencement of their work shift to report the need for paid sick leave. If no immediate supervisor is available, an employee shall contact the Department Head. Consideration shall be given to emergency situations that restrict the employee from contacting the employee’s immediate supervisor within the first hour of work including, but not limited to: accident, injury, or hospitalization. In such emergency situations, an employee shall contact the employee’s supervisor as soon as practicable.
• If the need for paid sick leave unforeseeably arises, such as at a part-time or temporary employee’s work site, the part-time or temporary employee shall notify the employee’s immediate supervisor before leaving the work site or as soon as practicable. 1019
City of Wildomar Personnel Rules and Regulations P a g e | 39 • When a part-time or temporary employee has advance notice of the need for paid sick leave, such as when scheduling non-emergency medical and dental appointments, the part-time or temporary employee is required to notify the employee’s supervisor at least three (3) days in advance of the employee’s need for paid sick leave. Part-time and temporary employees are encouraged to schedule medical and dental appointments outside normal working hours if possible.
• A part-time or temporary employee is not responsible for searching for or finding another employee to cover the employee’s shift in order to use paid sick leave.
l. Unused Paid Sick Leave. No part-time or temporary employee shall be compensated for or allowed to exhaust any accrued paid sick leave upon resignation, including retirement, termination, layoff, or death. m. Reinstatement of Unused Paid Sick Leave. Unused accrued paid sick leave for part-time or temporary employees at termination shall be reinstated upon return to active status occurring within no more than twelve (12) months of termination. For part-time or temporary employees who return to the City within twelve (12) months from their previous separation, days worked prior to the previous separation will count toward the ninety (90) day qualification period.
n. Paid Sick Leave Accrual Upon Promotion to Full-Time Employee Status.
If a part-time or temporary employee is promoted to full-time employee, the employee’s accrued unpaid sick leave shall be converted to CAL time. o. Records Documenting Hours Worked and Paid Sick Leave Accrued and Used. The City shall keep records documenting the hours worked and paid sick leave accrued and used by a part-time or temporary employee for three (3) years.
p. Employee Inspection of Records Pertaining to Paid Sick Leave. Upon reasonable request to the City’s Human Resources Department, and within twenty-one (21) calendar days after the request, the City shall afford current and former part-time and temporary employees the right to inspect or copy records pertaining to their hours worked and paid sick leave accrued and used.
F. Bereavement Leave.
1. Eligibility and Available Leave. An employee is eligible to receive leave under this section if the employee has been employed by the City for at least thirty (30) days prior to commencement of leave. If an employee loses an immediate 1020
City of Wildomar Personnel Rules and Regulations P a g e | 40 family member, as defined in this section below, the employee will be allowed to take up to five (5) days of leave per death. Leave days under this section need not be consecutive but shall be completed within three months of the date of death of the immediate family member. The City may request verification of death as permitted under the law.
2. Pay While on Leave. Each employee is eligible to receive up to 40 hours of pay per year while on bereavement leave as provided in this section. These 40 hours of pay for bereavement leave shall not be chargeable to any other leave balance. Once an employee exhausts available pay under this section, such employee may use other available accrued paid leave to receive pay during additional bereavement leave.
3. Immediate Family Member. For purposes of this section, immediate family shall mean father, father-in-law, mother, mother-in-law, stepparent, brother, brother-in-law, stepbrother, sister, sister-in-law, stepsister, spouse, domestic partner, child, grandparent, grandchild, legal guardian or legal ward.
G. Military Leave. Military leave with or without pay shall be granted in accordance with Section 395 of the California Military and Veteran's Code and the Uniformed Services Employment and Reemployment Rights Act. In addition, leave for military exigency or military caregiver shall be granted in accordance with the Family and Medical Leave Act, as set forth in the City's FMLA/CFRA/PDL Administrative Policy.
H. Jury Duty.
1. An employee summoned for jury duty will immediately notify the employee’s department head. While serving on a jury, an employee will be given a leave of absence with pay for up to ten days of jury duty. Such leave of absence with pay is conditional upon the employee returning to work upon their dismissal each day to complete their normal workday, as required at the employee’s department head’s sole discretion. Employees who fail to return to work, as required by their department head, are required to use other accrued paid leaves for that period of the employee's absence. Such leave is also conditional upon the employee's conveyance to the City of any compensation received as a juror, not including any travel allowance received.
2. An employee required to serve on a jury for longer than ten days may elect to use any accrued paid leaves, other than sick leave, for the time spent on jury duty after the ten days of jury duty paid leave have been exhausted. An employee is not required to convey compensation received as a juror in this circumstance.
I. Pregnancy Disability Leave. Employees who are disabled due to pregnancy, childbirth, or related medical conditions shall be granted leave in accordance with the full provisions governing such leave set forth in an administrative policy. 1021
City of Wildomar Personnel Rules and Regulations P a g e | 41 J. Family Care and Medical Leave. Employees shall be granted family care or medical leave in accordance with the Family Medical Leave Act and the California Family Rights Act. The full provisions governing such leave will be set forth in an administrative policy.
K. Reproductive Loss Leave. Upon completion of thirty (30) days of employment with the City, all employees are eligible to receive reproductive loss leave as provided in this section.
1. Definitions applicable to this section.
a. Reproductive loss event: means the day or, for a multiple-day event, the final day of a failed adoption, failed surrogacy, miscarriage, stillbirth, or an unsuccessful assisted reproduction.
b. Failed adoption: means the dissolution or breach of an adoption agreement with the birth mother or legal guardian, or an adoption that is not finalized because it is contested by another party. This event applies to any person who would have been the parent if the adoption was completed.
c. Failed surrogacy: means the dissolution or breach of a surrogacy agreement, or a failed embryo transfer to the surrogate. This event applies to any person who would have been the parent if the child was born as a result of the surrogacy.
d. Miscarriage: means a miscarriage by a person, by the person’s current spouse or domestic partner, or by another individual if the person would have been a parent of a child born as a result of the pregnancy. e. Stillbirth: means a stillbirth resulting from a person’s pregnancy, the pregnancy of a person’s current spouse or domestic partner, or another individual, if the person would have been a parent of a child born as a result of the pregnancy that ended in stillbirth.
f. Unsuccessful assisted reproduction: means an unsuccessful round of intrauterine insemination or of an assisted reproductive technology procedure. This event applies to a person, the person’s current spouse or domestic partner, or another individual, if the person would have been a parent of a child born as a result of the pregnancy.
2. Leave Entitlement. An employee is entitled to receive up to five (5) days of unpaid leave under this section following a reproductive loss event. If an employee experiences more than one reproductive loss event within a twelve (12)-month period, the City will grant additional reproductive loss leave, under this section, up to twenty (20) days within a twelve (12) month period. An 1022
City of Wildomar Personnel Rules and Regulations P a g e | 42 employee may use leave entitlement under this section nonconsecutively.
Except as otherwise provided in subsection 3 “Impact of Other Leave” below, leave under this section shall be completed within three (3) months of the reproductive loss event.
3. Impact of Other Leave. If prior to or immediately following a reproductive loss event, an employee is on or chooses to go on leave under sections XII(I) or XII(J), or any other leave entitlement under state or federal law, the employee shall complete leave under this section within three (3) months of the end date of the other leave.
4. Use of Accrued Paid Leave. An employee may use CAL leave, sick leave, or other leave that is otherwise available to the employee to receive compensation while on leave under this section.
5. Nonretaliation. Noninterference. The City will not retaliate against an employee, including imposing any disciplinary action, because of the employee’s exercise of the right for leave under this section or an employee giving information or testimony as to their own reproductive loss leave, or another person’s reproductive loss leave. Further, the City will not interfere with, restrain, or deny the exercise of, or the attempt to exercise, any right provided under this section.
6. Confidentiality Provision. The City will maintain the confidentiality of any employee requesting leave under this section. Any information provided to the City pursuant to this section will be maintained as confidential and will not be disclosed except, as necessary, to internal personnel, legal counsel, or as may otherwise be required by law.
L. Leave of Absence Without Pay. In accordance with the procedures in this section, a temporary unpaid leave of absence for a defined period may be considered because of illness or disability not protected by law, or for other reason deemed acceptable at the City’s sole discretion. The department director may approve up to two weeks of leave without pay. Any amount of leave without pay beyond two weeks must be approved by the City Manager or their designee. This section does not govern leave protected by the law.
1. Exhaustion of Paid Leaves.
a. Non-medical Leave of Absence Without Pay. An employee requesting leave under this section for nonmedical reasons is required to fully exhaust all of their paid leaves, except sick leave, in order to be eligible to receive a leave of absence without pay.
b. Medical Leave of Absence Without Pay. An employee requesting leave under this section for medical reasons is required to fully exhaust all of 1023
City of Wildomar Personnel Rules and Regulations P a g e | 43 their paid leaves, including sick leave, in order to be eligible to receive a leave of absence without pay.
2. Accrual of Benefits. Leave of absence without pay shall not be construed as a break in service or employment, and rights accrued at the time leave is granted shall be retained by the employee; however, CAL time, sick leave (where applicable), increases in salary, health benefit allotments, allowances and other similar benefits shall not accrue to a person granted such leave during the period of absence. An employee reinstated after leave of absence without pay shall receive the same step in the salary range the employee received when they began t h e i r leave of absence. Time spent on such leave without pay shall not count toward service for increases within the salary range, and the employee's salary anniversary date shall be set forward by an amount equal to the days of unpaid leave taken by the employee.
Failure of the employee to return to their employment upon the termination of any authorized leave of absence shall constitute an automatic termination from City service of that employee, unless such leave is extended.
M. Flex Leave. As compensation for the unique nature of their jobs, including afterhours meetings or work, the City provides Flex Leave as described below to Executive, Management and General positions classified as exempt on the City’s Pay Plan. Flex Leave amounts are subject to modification from time to time at the City’s sole discretion, as follows:
1. Employees in the Executive classification shall receive 80 hours of Flex Leave per fiscal year.
2. Employees in the Management classification shall receive 60 hours of Flex Leave per fiscal year.
3. Employees in the General classification which are classified as exempt shall receive 20 hours of Flex Leave per fiscal year.
Flex Leave shall be credited and vest on July 1st of each year. New eligible employees shall be credited with a prorated number of Flex Leave hours based on the number of months remaining in their first fiscal year as an eligible employee. One day worked in a particular month shall be considered as qualifying for that month.
Flex Leave cannot be carried forward from year to year, and any unused leave will be cashed out on June 30th of each year. Employees may not receive cash out of unused Flex Leave at separation from City employment.
N. Fitness for Duty Leave.
1. Purpose/Policy. Employees are expected to report to work fit for duty, which means able to perform their job duties in a safe, appropriate, and effective 1024
City of Wildomar Personnel Rules and Regulations P a g e | 44 manner, free from adverse effects of physical, mental, emotional, and/or personal problems. This Rule is intended to provide a safe environment and protect the health and welfare of employees and the public. If an employee feels unfit to perform their duties, the employee must notify their supervisor immediately.
2. Reasons for Fitness for Duty Leave. In the discretion of the City, an employee may be placed on a paid Fitness for Duty Leave and a fitness for duty examination may be ordered in any of the following situations:
a. An employee returns from a medical leave of absence of more than five working days.
b. An employee is involved in the interactive process with the City under Rule III.C.
c. Supervisor observes or receives a reliable report of an employee’s possible lack of fitness for duty. Observations and reports may be based on, but are not limited to, employee’s own self-report of potential unfitness, dexterity, coordination, alertness, speech, vision acuity, concentration, response to criticism, interactions with the public, co-workers, and supervisors.
d. Fitness for duty examinations based on a reasonable suspicion that an employee is under the influence of illegal drugs or alcohol shall be conducted in accordance with the City’s Drug-Free Workplace Policy.
3. Procedures for Ordering a Fitness for Duty Examination. When a supervisor becomes aware of or observes behavior that makes the supervisor reasonably suspect that an employee may not be fit for duty, the supervisor shall confer with the Personnel Officer to discuss the supervisor’s basis for the reasonable suspicion that the employee may not be fit for duty. After such conference between the supervisor and the Personnel Officer, the Personnel Officer may request the supervisor to refer the employee to the Personnel Officer who will determine whether a fitness for duty examination is necessary and should be scheduled. If the circumstances warrant it, the Personnel Officer may place the employee on a paid or unpaid leave pending the results of the employee’s fitness for duty examination. The examination shall be paid for by the City. If the employee is placed on Fitness for Duty leave while at work, under no circumstances is the employee to drive themselves to any secondary location, whether that is to the employee’s home, an examination facility, or elsewhere.
4. Procedure Following Receipt of Examination Results. The doctor examining the employee shall be limited to finding the employee “fit for duty” or “fit for duty with restrictions” or “unfit for duty.” In the case of finding an employee fit 1025
City of Wildomar Personnel Rules and Regulations P a g e | 45 for duty, the doctor may issue work restrictions. In no case shall the doctor reveal the underlying cause of the fit or unfitness for duty without the employee’s permission.
a. Fit for Duty. If the doctor finds the employee is fit for duty, the employee shall return to work immediately and perform all duties of their position. b. Fit for Duty with Restrictions. If the doctor finds the employee is fit for duty with restrictions, the doctor shall specifically list what restrictions are necessary and for how long those restrictions are necessary. If the employee’s restrictions are based on a disability as defined by the ADA and/or FEHA, the City shall engage in the interactive process as set forth in Rule III.C. The City shall then evaluate those restrictions and determine if the restrictions can be reasonably accommodated.
c. Unfit for Duty. If the employee is found to be unfit for duty, the employee shall not be permitted to work. The Employee may request a leave of absence in accordance with the appropriate subsection of this Rule. If the employee can provide certification of fitness for duty prior to the exhaustion of all paid and unpaid leave that the employee is entitled to under these Rules, the employee shall be returned to work. However, if such certification is from the employee’s own health care provider, the City may request a second opinion from a doctor of its choosing and at its cost to evaluate the employee under the requirements of this section. If the two certifications conflict, a third opinion will be sought from a doctor chosen by the City and the employee, at the expense of the City. The opinion of fit or unfit rendered by the third doctor shall be binding. If the employee’s restrictions are based on a disability or a medical condition as defined by the ADA and/or FEHA, the City shall engage in the interactive process as set forth in Rule III.C.
O. Voting Leave. The City encourages eligible employees to register and vote in all federal, state and local elections. Employees of the City are expected to vote prior to or following their assigned working hours. In accordance with the Election Code, Sections 14000 and 14001, if a registered voter employee does not have sufficient time outside regular working hours within which to vote at statewide elections, the employee may take off such working time as will enable the employee to vote. A maximum of two hours may be taken with pay. To receive time off for voting, the employee must notify the employee’s Department Head in advance. Employees who need Voting Leave, must take such leave at the beginning or end of the employee’s work shift, based on the needs of the Department and the employee’s schedule. The exact amount of time off work and the scheduling of time off shall be decided between the employee and the employee’s Department Head. Employees who use Voting Leave are required to present a voter’s receipt to their Department Heads. 1026
City of Wildomar Personnel Rules and Regulations P a g e | 46 P. Subpoenaed Absence. An employee who is subpoenaed or otherwise required under a court order to provide testimony as a witness, may receive the employee’s regular pay during the employee’s absence, whether such subpoena is related or unrelated to City business. An employee who receives a “Summons or Subpoena to Appear” for witness duty, must provide reasonable advance notice to the employee’s supervisor and human resources and provide a copy of the original summons to human resources.
Q. Personnel Action Leave. The City has the right to place an employee on leave at any time with full pay. An employee may be placed on personnel action leave pending investigation of misconduct, potential disciplinary action, or other reasons that the City Manager, in the City Manager’s discretion, believes warrant such leave. If the City Manager is to be placed on personnel action leave, it will be done so at the discretion of the majority vote of the City Council. A personnel action leave shall not have any negative effect on the employee’s benefits. Personnel action leave may also be referred to as “Relief of Duty.” An employee assigned to personnel action leave shall be required to be available by phone during the employee’s regular working hours. In addition, employees on a personnel action leave are prohibited from entering City facilities or property or communicating with City employees, except to the extent that non-employees may access City facilities, property, or employees. The City Manager may place other reasonable restrictions on an employee during the period of personnel action leave.
R. School Leave. The City will grant a leave of absence to an employee who is the parent, guardian, or grandparent of a child, in accordance with the following provisions.
1. Permissible Purposes:
a. To participate in the activities of the child’s primary or secondary school or licensed childcare provider;
b. To find, or to enroll, or reenroll the child in, a primary or secondary school or licensed childcare provider.
c. To address an emergency, such as:
i. A request from childcare provider or school that the child be picked up.
ii. A provision in the attendance policy for the childcare provider or school, other than a planned holiday, that prohibits the child from attending.
iii. Closure or unexpected unavailability of the childcare provider or school, other than during planned holidays.
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City of Wildomar Personnel Rules and Regulations P a g e | 47 iv. A natural disaster, including, but not limited to, fire, earthquake, or flood.
d. To appear at the school of a suspended child pursuant to a request made by the child’s school under California Education Code section 48900.1.
2. An employee may take up to 40 hours of leave per calendar year, but no more than eight hours in one calendar month. However, no limit shall be placed on the amount of leave taken under Section (R)(1)(d) of this rule. If more than one City employee requests leave in connection with the same child, only the first employee to provide notice is entitled to receive leave. The second employee may also be permitted to take a simultaneous leave of absence if the second employee obtains written supervisory approval. The amount of leave available is fixed at a maximum of 40 hours per calendar year, regardless of the number of children, grandchildren, or wards that an employee may have.
3. An employee must provide reasonable advance notice of the need for leave and must make all reasonable efforts to schedule the leave so as not to unduly disrupt the operations of the City. If an emergency makes such notice impossible, the employee shall notify the employee’s Department Head as soon as possible. Employees returning from leave may be required to provide written verification from the school or childcare provider of the employee’s need for leave at the specific time and date. If an employee fails to provide sufficient verification, the City may determine that the leave time was unauthorized.
4. Leave under this section is unpaid. However, an employee may choose to use any accrued CAL time when taking leave under this section.
S. Workers’ Compensation. Workers’ compensation applies to all employees who experience an injury or illness that arises out of the course and scope of employment.
Employees must immediately report all injuries or illnesses related to the scope of their employment to their supervisor or human resources. If an employee is incapacitated and unable to immediately report their injury or illness, they must report their injury or illness as soon as they are reasonably able to do so.
Employees seeking immediate medical attention at the direction of their supervisor, or in emergency situations, shall receive payment for time spent waiting for and receiving treatment, through the end of their scheduled shift on the date of injury or the date which their supervisor sends them for treatment, only. Subsequent appointments are dictated by the doctor, and therefore time spent at the appointments are not paid for through temporary disability insurance. Employees attending follow-up appointments may use their supplemental leave accruals for appointments for which they are unable to attend outside of working hours. 1028
City of Wildomar Personnel Rules and Regulations P a g e | 48 Before the start of benefits, injured employees shall serve a waiting period of threecalendar days. The waiting period need not be consecutive days. Partial days of absence for doctor appointments or authorized periods of disability may be accumulated to equal full days and charged to the waiting period. For the purpose of calculating the waiting period, the day of the injury shall be included unless the employee was paid full wages for that day. The waiting period is waived if the:
Injury was caused by a criminal act of violence, or
Employee is disabled more than 14 calendar days, or
Employee is hospitalized as an inpatient for treatment required by the injury or illness.
RULE XIII. ATTENDANCE
A. Attendance. Employees will be in attendance on time at their workstation or location in accordance with the rules regarding hours of work, holidays, and leaves.
Employees will make every effort to schedule personal appointments outside their working hours. Employee adherence to the rules governing attendance, leaves of absence and tardiness will be reviewed and evaluated during the employee’s annual performance evaluation. All supervisors/managers will keep track of employee attendance records, which will be reported to Administrative Services by approval of electronic timesheets.
B. Tardiness. It is the responsibility of the employee to arrive at work on or before the assigned time each day. If for some reason beyond the control of the employee, it is not possible for the employee to come to work on time, arrangements in advance with the Department Head must be made at the earliest possible time. In no case will repeat tardiness be tolerated.
C. General Absences. Pre-authorized time off, authorized paid/unpaid leaves of absence due to bona fide illness or injury, jury duty, bereavement, or other City leaves are the only types of absences permitted. All others will be considered a violation of these Rules.
D. Unauthorized Absences. An employee who is absent for a full shift without notification or authorization may be subject to disciplinary action, up to and including, termination of employment.
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City of Wildomar Personnel Rules and Regulations P a g e | 49 RULE XIV. LAYOFF/SEPARATION/RETIREMENT
A. Layoff. Whenever, in the judgment of the City Council, it becomes necessary to abolish any position or employment, the employee holding such position or employment, may be laid off without disciplinary action and without the right of appeal, unless otherwise required by law. The City Manager shall determine the class and number of positions within each class to be affected, as well as the effective date of the layoff.
1. Notification. Employees to be laid off shall be given, whenever possible, at least 14 days prior notice.
2. Order of Layoff. In each class of position, employees shall be laid off according to the needs of the service as determined by the Department Head and the Personnel Officer.
3. Reemployment List. The names of persons laid off or demoted in accordance with this section shall be entered upon a reemployment list. Lists from different departments or at different times for the same class of position shall be combined into a single list. Such list shall be used by every Department Head when a vacancy arises in the same or lower class of position before certification is made from an eligible list or starting a recruitment. Names of persons laid off shall be carried on a reemployment list for one year, except that of persons appointed to a position of the same level as that which laid off, shall, upon such appointment, be dropped from the list. Persons who refuse reemployment shall be dropped from the list. Persons reemployed in a lower class, or on a temporary basis, shall be continued on the list for the higher position until a full year lapses following the layoff or demotion under this section.
B. Resignations. Employees may resign at any time. However, the City requests that resigning employees file a written resignation stating the effective date and reason(s) at least two weeks prior to leaving the City's service. The resignation date should be the last day the employee actually worked.
C. Terminations. The City may terminate any employee at any time with or without cause and with or without notice.
D. Retirement/Disability Retirement. In accordance with the City's contract with the California Public Employees' Retirement System (CaIPERS), employees who meet the age and service credit minimums may qualify for a service retirement from CaIPERS. Under CaIPERS laws, an employee who is unable to perform their job because of an illness or injury which is expected to be permanent or last indefinitely, may be entitled to receive a disability retirement.
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City of Wildomar Personnel Rules and Regulations P a g e | 50 RULE XV. ETHICAL STANDARDS
A. Outside Employment, Enterprise, or Activity. In accordance with California Government Code section 1125 et seq., no employees may engage in any outside employment, enterprise, or activity that is inconsistent, incompatible, in conflict with, or adverse to the employee’s employment, their ability to perform their duties and responsibilities, including performance of overtime work and emergency duties, or any other aspect of City operations.
1. Employees are required to notify their Department Head in writing of all outside employment in which they are engaged, regardless of when that outside employment began, so that the City may assess whether such outside employment conflicts with the employee's City employment. An employee's outside employment, enterprise, or activity will be prohibited when any of the following are present:
a. It involves the use for private gain or advantage of their City time, facilities, equipment and/or supplies; or the badge, uniform, prestige, or influence of their City employment;
b. It involves the receipt or acceptance by the employee of any money or other consideration from anyone other than the City for the performance of an act which the employee, if not performing such act, would be required or expected to render in the regular course or hours of their City employment or as part of their duties as a City employee; c. It involves the performance of an act, in other than their capacity as a City employee, which may later be subject directly or indirectly to the control, inspection, review, audit, or enforcement of any other officer or employee of the City; or
d. It involves the time demands as would render performance of their duties as a City employee less efficient.
2. When outside employment is reported to a Department Head, the Department Head shall determine whether the employee's outside employment conflicts with the performance of their duties and shall advise the employee of their determination in writing. An employee who is unsatisfied with the decision of the Department Head may appeal the decision to the City Manager. An employee wishing to appeal this determination must file a written appeal to the City Manager within 10 days of receipt of the Department Head's decision.
The City Manager shall meet with the employee and determine whether the employee's outside employment conflicts with the performance of their duties as a City employee. The City Manager shall advise the employee and the Department Head of the City Manager’s determination in writing within 15 1031
City of Wildomar Personnel Rules and Regulations P a g e | 51 days of meeting with the employee. The City’s Manager determination shall be final and binding on all parties.
B. Political Activities. Consistent with the provisions of California Government Code section 3201 et seq., employees may not engage in political activity during working hours, while on City property on which members of the public would not be entitled to engage in political activities, or while in uniform.
C. Solicitation of Political Contributions. Consistent with the provisions of California Government Code section 3201 et seq., no City employee may knowingly, directly or indirectly, solicit a political contribution from a City employee, City officer, or person on an employment list. However, this does not prohibit City employees from requesting political contributions if the solicitation is part of a solicitation made to a significant segment of the public, which may include City employees. This also does not prohibit a City employee from soliciting or receiving political funds or contributions to promote the passage of or defeat of a ballot measure which would affect the rate of pay, hours of work, retirement, civil service, or other working conditions of City employees, provided that such solicitation cannot occur during working hours or while on City property. For purposes of this section, "contribution" means a payment, a forgiveness of a loan, a payment of a loan by a third party, or an enforceable promise to make a payment except to the extent that full and adequate consideration is received, unless it is clear from the surrounding circumstances that it is not made for political purposes.
D. Contracts and Conflicts of Interest. In accordance with California Government Code section 1090 et seq., no City employee can be financially interested in any contract made by the employee in the employee’s official capacity, or by any body or board of which the employee is a member.
E. Conduct During the Workday. During the workday, employees are expected to devote their full time to the performance of their assigned duties. Any approved outside work, hobbies, or personal business must be performed during off-duty hours.
F. Employees with Access to Confidential Information. In performing their duties, employees may have access to confidential information, including, but not limited to, employees' personnel files and the personal or financial information of other City employees or persons who do business with the City. In addition, some City employees will be involved in some communications with the City Attorney's Office, which can be protected by the attorney-client privilege. Employees with such access are required to keep such information confidential.
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City of Wildomar Personnel Rules and Regulations P a g e | 52 RULE XVI. DISCIPLINARY ACTIONS
A. Reason for Disciplinary Action. While the City maintains an at-will employment environment and may terminate any employee at any time with or without cause, the City also reserves the right to take disciplinary actions against any employee.
Disciplinary measures may be taken for any good and sufficient cause. Cause may include, but is not limited to, any of the following:
1. Violation of the personnel ordinance or of these personnel rules.
2. Violation of any policies, procedures, personnel rules and/or regulations of the employee's department.
3. Any act of insubordination.
4. Act detrimental to the public service.
5. Refusal or inability to comply with the duties of the position occupied by the employee.
6. Any type of misfeasance, malfeasance or nonfeasance relating to their duties, office or position.
7. Fraud in securing employment or making a false statement on an application for employment or on any supporting documents furnished with or made a part of any application.
8. Dishonesty.
9. Incompetence, such as failure to comply with the minimum standards for an employee’s position.
10. Absence from the job during working hours without permission from the employee’s supervisor or Department Head.
11. Conviction of a misdemeanor relating to the employee’s fitness to perform assigned duties, or conviction of a felony.
12. Discourtesy to the public, employees, or other persons with whom the City maintains a relationship; or engaging in treatment that does not foster cooperation.
13. Malicious gossip and/or spreading rumors; engaging in behavior designed to create discord and lack of harmony; interfering with another employee on the job; or willfully restricting work output or encouraging others to do the same.
14. Misuse or abuse of City property or equipment.
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City of Wildomar Personnel Rules and Regulations P a g e | 53
15. Substandard job performance.
16. Failure to maintain any employment qualification.
17. Discrimination and/or harassment of employees or applicants based on a protected characteristic, as set forth in the City’s Harassment, Discrimination and Retaliation Prevention Policy.
18. Failure or refusal to properly or satisfactorily perform assigned duties.
19. Theft or harm to City property or the personal property of another.
20. Inattention to duty, indolence, carelessness or negligence in the care or handling of City property.
21. Assault, battery, horseplay, or fighting while on duty or under the guise of office.
22. Gambling on City property or during working hours.
23. Sleeping on the job.
24. Improper use of City funds.
25. Acceptance or solicitation or bribes or extortion.
26. Abuse of CAL time or sick leave, repeated tardiness, or excessive absenteeism of any kind.
27. Acceptance from any source of any emolument, reward, gift or other form of remuneration in addition to the employee’s regular compensation, as a personal benefit to the employee for actions performed in the normal course of the employee’s assigned duties.
28. Refusal or failure to report to work in a disaster or an emergency.
29. Falsification of any City report or record, or of any report or record required to be filed by the employee.
30. Use of influence of position with the City for private gain or advantage, or the use of time, facilities, equipment or supplies for private gain or advantage.
31. Disclosure of confidential or proprietary City information to unauthorized persons, employees, or organizations.
32. Use of City tools, equipment, or other property for private, personal, unauthorized, or inappropriate purposes
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City of Wildomar Personnel Rules and Regulations P a g e | 54 B. Types of Disciplinary Actions. The City employs a disciplinary system, which includes a variety of levels of disciplinary actions, up to and including termination of employment. However, nothing in this disciplinary policy should be interpreted in any way that would affect the employee's at-will employment status. Notwithstanding any provision of this policy, all employees may be terminated at any time, with or without notice, and with or without cause. The City may take any of the following types of disciplinary actions against its employees:
1. Verbal Reprimand. Verbal reprimand as a disciplinary action means the employee is informed of their poor performance or misconduct verbally by their supervisor. Such verbal reprimand may be followed up with a written documentation memorializing the verbal reprimand.
2. Written Reprimand. Written reprimand as a disciplinary action means an official notification to the employee that there is cause for dissatisfaction with their services and that further disciplinary measures may be taken if such cause is not corrected. Official reprimand shall be given in the manner prescribed by the Personnel Officer, or designee. Reprimand notices shall be made a part of the employee's official personnel record.
3. Suspension Without Pay. Suspension without pay shall be a temporary separation from City service. Employees are ineligible to use any accrued leave during a suspension without pay.
4. Reduction In Range. Reduction in step within range as a disciplinary measure is the withdrawal of increments granted for merit, efficiency and length of service. Reduction in pay shall become effective on the first pay period following the effective date of the disciplinary action.
5. Involuntary Demotion. Demotion without consent shall include a reduction in classification or rank, with commensurate reduction in salary.
6. Termination. Termination is the dismissal of an employee from City service.
C. Authority for Disciplinary Actions.
1. The Department Heads and/or City Manager shall have authority to take disciplinary action and they may delegate to certain of their subordinate supervisory employees the authority to make verbal or written reprimands.
2. The Human Resources and Risk Manager or designee shall be notified of any contemplated disciplinary action prior to the time it is taken.
D. Notice of Disciplinary Action. When disciplinary action, other than verbal or written reprimand, is to be taken against an employee, the Department Head or City Manager shall notify the employee in writing of the disciplinary action to be taken, the reasons for the disciplinary action, and the effective date of such disciplinary 1035
City of Wildomar Personnel Rules and Regulations P a g e | 55 action, if applicable. Because all employees are at-will, there is no right to appeal or challenge disciplinary action. However, in certain circumstances, the employee may be entitled to a name-clearing hearing before the Personnel Officer consistent with Rule XVI.E below. If the employee does not meet the criteria set forth in Rule XVI.E.1., then the employee is not entitled to any hearing, appeal, or waiting time before the disciplinary action is imposed on the employee, and such disciplinary action may be effective immediately.
E. Name-Clearing Hearing. In certain circumstances, an employee may be entitled to a name-clearing hearing before the disciplinary action is imposed by the City. In such circumstances, the employee will be entitled to a name-clearing hearing in accordance with this section.
1. Criteria for Entitlement to a Name-Clearing Hearing. In accordance with state and federal law, when the following three elements are present, the employee is entitled to a name-clearing hearing:
a. A stigmatizing charge; and
b. The employee's denial of the stigmatizing charge; and c. Public disclosure of the stigmatizing charge.
2. Name-Clearing Hearing. If the employee has satisfied all three criteria set forth in Rule XVI.E.1., based on the employee’s Department Head or City Manager’s determination, then the employee is entitled to a hearing in order to clear the employee’s name. Under this limited circumstance, the City shall provide the employee with at least five days' notice of its intent to discipline the employee. During those five days, the employee may request a nameclearing hearing. If the employee desires a name-clearing hearing, the employee must file a written request with the Personnel Officer or designee within five days of receiving notice from the City of its intent to impose disciplinary action.
If the employee does not timely request a name-clearing hearing, then the employee will have been deemed to have waived their right to said hearing. If the employee requests a hearing then the Personnel Officer or designee will make all necessary arrangements for the hearing prior to imposing the disciplinary action. The hearing shall be before the Personnel Officer or designee. The employee is not entitled to a full evidentiary hearing but is only entitled to the opportunity to clear their name of the stigmatizing charge(s). All name-clearing hearings shall be held in private unless the employee requests a public hearing in writing.
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City of Wildomar Personnel Rules and Regulations P a g e | 56 RULE XVII. GRIEVANCE PROCEDURE
A. Purpose of the Grievance Procedure. The grievance procedure shall be used to resolve employee complaints regarding an alleged violation or interpretation of the City's personnel ordinance or these personnel rules. Specifically excluded from the grievance procedure are:
1. Performance evaluations, or performance improvement plans;
2. Deferred or denied merit salary increases;
3. Verbal counseling;
4. Policy decisions of the City Council;
5. Any disciplinary actions under Rule XVI.B, or procedure imposing such disciplinary action;
6. Transfer to another position without a loss of pay;
7. Any aspect of the employment examination or selection process; and
8. Matters for which there is a separate appeal.
B. Grievance Procedure.
Step 1 The employee shall inform, in writing, the employee’s immediate supervisor of their grievance and relevant facts within seven days after the employee knew, or in the exercise of reasonable diligence should have known, of the events giving rise to the grievance. The grievance must include a statement of the event causing the grievance; the personnel rule or provision of the personnel ordinance alleged to have been violated; the relief sought by the employee; and any potential witnesses. Failure to provide complete grievance details may result in a delay in processing the grievance. At least one conference shall be held between the employee and their immediate supervisor after the employee has expressed their grievance. The supervisor shall advise the employee of their decision within 14 days following notification of the grievance.
Step 2. If the grievance is not satisfactorily resolved in Step 1, the grievant may, within seven days after receipt of their supervisor's response, submit the grievance to their Department Head. Such submittal shall be on the City’s designated grievance form and shall include details of the original grievance. The grievance must include a statement of the event causing the grievance; the personnel rule or provision of the personnel ordinance alleged to have been violated; the relief sought by the employee; and any 1037
City of Wildomar Personnel Rules and Regulations P a g e | 57 potential witnesses. After receipt of the grievance form, the Department Head will meet with the grievant within seven days of receiving the grievance form and make such investigation as is required. Within seven days of their meeting with the grievant, the Department Head shall return the original of the grievance form to the employee along with their written decision on the grievance.
Step 3. If the grievance is not satisfactorily resolved in Step 2, the grievant may, within seven days of receipt of the Department Head's decision, submit the grievance for consideration by the City Manager or designee. Such submittal shall be on the grievance form, and shall include details of the original grievance; a statement of the event causing the grievance; the personnel rule or provision of the personnel ordinance alleged to have been violated; the relief sought by the employee; any potential witnesses; a written statement of any issues which are still in dispute; and the specific basis upon which the grievant takes issues with the position of their Department Head. The City Manager or designee shall take such review and investigative action as they deem necessary and inform the grievant of their decision within 14 days of receipt of the grievance. The decision of the City Manager is final and binding and no further appeal may be had by the employee.
C. General Provisions.
1. No retribution or prejudice shall be suffered by employees making good faith use of the grievance procedure. All parties will act in good faith while attempting to reach a solution at the earliest possible step of the procedure.
The employee will have the assurance that filing a grievance will not result in reprisal of any nature. The City will not retaliate against any employee because of the employee’s good faith use of the grievance procedure.
2. Failure by management at any step of this procedure to communicate the decision of the grievance within the specified time limits shall permit the grievant to proceed to the next step. The grievant shall be entitled to be present at all steps of the procedure.
3. Failure at any step of this procedure to appeal a decision on a grievance within specified time limits shall be deemed acceptance of the decision rendered, and the grievant waives all further appeal of the matter.
4. The time limits specified at any step in this procedure may be extended by mutual written agreement.
5. The original of the grievance form shall accompany all requests for institution of the next step in the grievance procedure and shall be maintained in the employee's personnel file at the completion of the grievance procedure. 1038
City of Wildomar Personnel Rules and Regulations P a g e | 58
6. Communication with grievant shall be processed by personal signed receipt of document, certified mail or registered mail.
RULE XVIII. EMPLOYMENT BENEFITS
A. Health Benefits. Accident, health, hospital, dental and vision insurance to cover nonoccupational injuries and sickness for full-time employees will be provided by the City, as set forth in the benefits flyer/schedule.
1. Any employee who does not use their full allotment for medical, dental and vision benefits may apply the remaining amount to cover the costs of other insurances, such as supplemental insurance plans, as allowed by IRS Code 125.
2. The City does not permit employees to take a “cash out” or “cash in lieu” of the medical, dental or vision insurance allotment.
3. The City contributes directly to the cost of health care premiums in accordance with Resolution 2010-48, or as may be subsequently amended.
4. The City reserves the right to modify the contribution amount or to terminate its participation in the PEMHCA program at any time in accordance with the CalPERS rules.
B. Retirement Benefits. The City has contracted with the California Public Employees' Retirement System (CaIPERS) for retirement benefits. Eligible Employees receive retirement benefits in accordance with CalPERS calculations and the Public Employees’ Retirement Law (PERL).
RULE XIX. EDUCATIONAL ASSISTANCE
A. Educational Reimbursement for Training and Advancement.
The responsibility for developing training programs for employees is with the City Manager and Department Heads, jointly. When an educational course to be taken by an employee will benefit the City, the City Manager may authorize payment by the City of tuition charges and books. An "educational course" may include courses that are in furtherance of a degree, other college-credit courses, or training. In order to be eligible for educational reimbursement, the employee must obtain written approval of the City Manager prior to enrolling in any courses. Failure to receive written approval may result in funds not being available. Educational reimbursement 1039
City of Wildomar Personnel Rules and Regulations P a g e | 59 shall not exceed $1,500.00 in any fiscal year and is not compensation reportable for retirement purposes.
Employee’s may qualify for reimbursement provided that:
1. The employee has not received any evaluations indicating their overall rating is unsatisfactory or needs improvement.;
2. The employee receives a grade of “C” or better, or a “pass” or “credit” for those classes where a pass/fail or credit/no credit grading system is used.
In order to receive reimbursement, the employee must submit a copy of their signed Tuition Reimbursement Request form, a copy of their grade (an unofficial transcript is acceptable) and receipts for their tuition and/or required materials. Any required materials must be described in a document provided by the instructor.
B. Licenses and Certification Assistance.
1. In cases of enrollment for any certification which is a condition of employment, the City shall pay required application fees in advance.
2. The cost of licensing fees, renewal fees, and test fees for all levels of certification related to the position currently held or for advancement within the City are reimbursable, upon receipt of the certification or license. To obtain reimbursement after successful completion of the test/renewal/license process, the employee is responsible for submitting proof of payment for test fees, renewal fees, and license fees, along with proof of the certification or license, to the City Manager or designee. In unusual circumstances, the City Manager may authorize the payment of the test/renewal/license fees in advance.
RULE XX. WORKPLACE VIOLENCE PREVENTION
The City maintains a standalone administrative policy for workplace violence prevention: the City of Wildomar Workplace Violence Prevention Plan. Employees should refer to the stand-alone policy for details regarding the prevention of workplace violence.
RULE XXI. DRUG- and ALCOHOL-FREE WORKPLACE POLICY
It is the desire of the City that all work environments of employees be safe and productive and free of the influence of drugs and alcohol. The City is concerned with the physical safety of all employees, potential damage to property and equipment, 1040
City of Wildomar Personnel Rules and Regulations P a g e | 60 mental and physical health of employees, productivity and work quality, medical insurance costs, and the harm done to employees and their families by drug and alcohol abuse. The full provisions regarding drugs and alcohol in the workplace will be set forth in an administrative policy.
RULE XXII. ELECTRONIC COMMUNICATIONS POLICY
The City provides its employees with certain electronic communications devices.
Employees should be aware that no computer usage, including messages transmitted or received on the computer system are private or confidential. The City's full policy regarding the use of electronic communications equipment will be set forth in an administrative policy.
RULE XXIII. UNIFORMS AND EQUIPMENT
A. Uniforms. Certain employees are required to wear a uniform in the performance of their job duties. All uniforms are expected to be clean and in good repair. Some uniforms consist of specific City-issued polo shirts and pants; in these circumstances the employee will wash their own uniforms, however replacements will be provided by the City, as needed. Uniforms provided to Maintenance Workers and Senior Maintenance Workers will be furnished to employees at the City’s expense. The City will also be responsible for the maintenance, cleaning, and replacement of these uniforms, at the City’s expense.
City uniforms are not suitable for everyday wear outside working hours, as such, employees shall wear the uniforms only while on duty and traveling to and from City work. Employees in the classifications required to wear uniforms shall wear the uniforms as a condition of employment while on City duty.
B. Equipment. The City shall provide employees with the essential equipment to perform the duties of their positions. Employees are responsible for requesting training on equipment that they are unfamiliar with. Also, employees are responsible for the proper operation and maintenance of all equipment.
C. Safety Equipment and Protective Clothing. Certain employees will be required to wear approved safety shoes and other safety equipment and protective clothing.
Employees failing or refusing to wear such safety equipment and protective clothing as appropriate will be subject to disciplinary action up to and including termination. If any employee is unable to wear such safety equipment and protective clothing for medical reasons, the employee must submit to the City a healthcare provider’s statement covering the reasons. Upon receiving such statement, the City will engage 1041
City of Wildomar Personnel Rules and Regulations P a g e | 61 the employee in the interactive process as may be required by law and these Rules to determine whether a reasonable accommodation is available.
RULE XXIV. EMPLOYEE REIMBURSEMENTS AND ALLOWANCES
A. Reimbursement.
1. Electronic and Mileage Reimbursement. Employees who are required to use their personal electronic devices and/or personal automobiles during the course of their employment will be entitled to receive reimbursement for the costs of actual expenses incurred in the performance of their duties. Employees are required to submit receipts in support of their claimed expenses.
2. Safety Shoe Reimbursement. Employees required to wear safety shoes shall be reimbursed for the purchase of such shoes, so long as they meet the appropriate requirements. Employees will be provided reimbursement for safety shoes up to $250 each fiscal year, on an as-needed basis for regular wear and tear.
Employees may purchase more than one pair of safety shoes each fiscal year, as needed, within the annual $250 maximum. Any remaining balance will not carryover to the next fiscal year.
In order to receive reimbursement, the employee must submit original receipts as proof of purchase, as well as verification that the shoes purchased meet the required safety standards to the Human Resources and Risk Manager to confirm the safety requirements are met. Verification of the safety standards can include any document showing the shoe and its safety rating, which would match the shoe on the receipt. The Human Resources and Risk Manager will then send the reimbursement request to Finance for reimbursement. If during the course of work, an employee’s safety shoes are destroyed due to unforeseen or accidental circumstances while working and the employee has used their maximum allowance, a supervisor may authorize one replacement pair of safety shoes up to $100 per fiscal year.
Safety shoes must meet the ANSI Z41-1999 and ASTM F2412-05 standards. The ANZI Z41-1999 is the standard on Protective footwear from 1999, and the ASTM is the American Society for Testing and Materials Foot Protection testing method from 2005. Most shoes show ASTM F2413—18, a standard that complies with ASTM F2312-05.
Below is a list of classifications authorized for reimbursement of safety shoes.
Any classification not specifically listed below is not authorized by the Personnel Rules for reimbursement of safety shoes and must be approved on a case-bycase basis by the department director. 1042
City of Wildomar Personnel Rules and Regulations P a g e | 62 City of Wildomar
Positions Designated for the Safety Shoes
Reimbursement
Facilities Contract Specialist
Maintenance Worker I/II
Senior Maintenance Worker
Maintenance Manager
Public Works Inspector I/II
Associate Engineer
Senior Engineer
Engineering Division Manager
Building Inspector I/II
Senior Building Inspector
Chief Building Official
Code Enforcement Technician
Code Enforcement Officer I/II
Senior Code Enforcement Officer
Code Enforcement Supervisor
Code Enforcement Manager
B. Allowance. Certain employees may be provided with a monthly allowance to compensate the employee for the use of their personal electronic devices and/or personal automobile during the course of their employment. The City Manager, in their sole discretion will have the ability to determine which employees are eligible for such an allowance. If an employee receives an allowance under this section, the employee is not eligible for reimbursement under Section A.1 of this Rule, unless the employee provides receipts establishing that the allowance was insufficient to compensate the employee for all work-related use of their personal device and/or automobile. When eligible for an allowance, the following amounts may be provided:
1. Personal electronic device (voice/telephone only): $60/month
2. Personal electronic device (data plan only): $60/month 1043
City of Wildomar Personnel Rules and Regulations P a g e | 63
3. Personal electronic device (voice and data): $120/month
4. Automobile: up to $500/month (varies per position and usage) RULE XXV. DISASTER AND EMERGENCY SERVICE WORKERS
A. Employees Designated as Disaster Workers. The protection of the health and safety, and the preservation of lives and property from the effects of natural, manmade, or war-caused emergencies which result in conditions of disaster or extreme peril to life, proper, and resources, is paramount to the City. When a disaster strikes, the Wildomar community looks to City employees for leadership and assistance in mitigating its effects. The assistance of City employees is vital to ensuring that this community recovers from a disaster as quickly as possible. It is important that all City employees be available to assist in responding to disasters, regardless of the position they hold. As such, in accordance with the provisions of Government Code sections 3100 et seq., all City employees are declared to be disaster service workers.
B. Oath or Affirmation. All employees are required to take and subscribe to the oath or affirmation set forth in Section 3 of Article XX of the Constitution of California at the commencement of their employment. The City Clerk shall maintain the oath or affirmation of all City employees for at least five years after the employee’s termination of employment.
C. Declaration of Disaster or Emergency. Upon the declaration of a disaster or an emergency, employees are required to follow directions given in accordance with the City Emergency Management Plan.
D. Employee Disaster Responsibilities.
1. Off-Duty Procedures.
a. Employees With Pre-Designated Roles. After ensuring that their families are safe and any short-term arrangements have been made for their families' security, employees who have pre-designated emergency or disaster roles shall respond according to those established procedures. b. Employees Without Pre-Designated Roles.
i. Communication Systems Not Functioning. When the telephones or other communication devices are not functioning, employees who do not have pre-designated emergency or disaster roles should gather information from radio and television broadcasts and comply with any instructions given for City employees. Unless an employee 1044
City of Wildomar Personnel Rules and Regulations P a g e | 64 cannot physically report to work, all City employees are expected to report to work at their normally scheduled time after ensuring the safety and security of their own families.
ii. Communication Systems Are Functioning. If the telephones or other communication devices are working, employees shall make every effort to contact their immediate supervisor for instructions as soon as possible. Unless otherwise instructed or if it is physically impossible for the employee to report to work, all City employees are expected to report to work at their normally scheduled time after ensuring the safety and security of their own families.
2. On-Duty Procedures.
a. Remain On Duty. All employees are expected to remain on duty at their normal work location or at a disaster location, unless dismissed by the proper authority. Every attempt possible will be made by the City to assist each employee in communicating with the pertinent employee’s family. b. Ongoing Disasters. For disasters extending beyond the normal workday, employees are required to follow the direction and order of the proper authority.
3. Employees Physically Unable to Report to Work. In the event that an employee is unable to return to work because road and transit conditions prevent travel by automobile, public transit, or other conveyance, the employee has the option to become a disaster service worker in the City where the employee resides or is located at the time of the emergency. Any employee who cannot return to the City and serves as a disaster worker for another municipality is required to contact the personnel department of that municipality for further instructions and to obtain written documentation of the employee’s assignment. The employee is required to notify the employee’s own immediate supervisor of the employee’s status of working in the other municipality.
a. Compensation for Work Performed at Another Municipality. Employees who are unable to report to work during a disaster will be entitled to receive compensation from the City for the service performed at another municipality, provided that the employee provide written proof from the other municipality of the amount of time the employee worked there. That information should be logged onto the employee’s timesheet and submitted through the normal payroll process. Alternatively, the employee may present written proof from the other municipality that the employee 1045
City of Wildomar Personnel Rules and Regulations P a g e | 65 offered the employee’s services, but that the other municipality rejected the employee’s assistance.
b. Returning to Wildomar. Employees are required to communicate with their supervisor as soon as possible and are required to return to their normal or disaster duties at the City as soon as travel, by any reasonable means, to the City is possible.
4. Timekeeping Requirements. All employees are required to complete special timekeeping forms daily, which will keep a record of the following information:
a. The kind of disaster work performed;
b. The number of hours worked; and
c. The location where work was performed.
5. Failure to Report to Work During a Disaster. An employee who fails to report to work as a disaster worker at the City or at another municipality will be considered on unpaid leave during the duration of the emergency, and may be subject to discipline, unless the employee submits documentation that supports justification to receive paid leave.
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EMPLOYEE ACKNOWLEDGMENT OF RECEIPT OF
CITY OF WILDOMAR
PERSONNEL RULES AND REGULATIONS
This acknowledges that I have received my copy of the City of Wildomar (“City”) Personnel Rules and Regulations (“Rules”). I recognize that the Rules supersede any related Personnel Rules, Employee Handbook, policy statements, manuals, and/or administrative policies previously issued by the City. I have read and agree to abide by all provisions set forth in the Rules and associated personnel policies. I understand that if any part of the Rules is unclear, it is my responsibility to seek clarification from my supervisor, director, Human Resources, or City Manager.
I understand that these Rules do not create a vested contractual right in the execution by City of any duties and responsibilities relating to these Rules or associated personnel policies. I also understand that my employment with the City is at-will, meaning either City or I may terminate my employment at any time with or without cause and with or without advance notice.
PRINT FULL NAME _________________________________________________ SIGNED __________________________________________________________ DATE ____________________________________________________________ [RETAIN IN EMPLOYEE PERSONNEL FILE]
1047
RESOLUTION NO. 2024 - _____
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WILDOMAR,
CALIFORNIA, APPROVING A COST OF LIVING ADJUSMENT AND
APPROVING THE UPDATE TO THE CITY’S PAY PLAN
WHEREAS, earlier in this meeting on June 12, 2024, the City of Wildomar (“City”) City Council approved the updated City of Wildomar Personnel Rules and Regulations (“Rules”); and
WHEREAS, one of the updates to the Rules is to base an annual Cost of Living Adjustment (COLA) on the published Riverside-San Bernardino-Ontario, CA, Consumer Price Index – U 12-month percent change for March, rather than May, each year; and WHEREAS, the published Riverside-San Bernardino-Ontario, CA, Consumer Price Index – U 12-month percent change for March 2024 is 4.3%; and WHEREAS, the Rules provide that the COLA shall be capped at 3.0%.
NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Wildomar, California, as follows:
SECTION I. The City Council hereby adopts a 3.0% COLA increase to all City employees, which shall be effective July 1, 2024.
SECTION II. The City adopts a revised City of Wildomar Pay Plan increasing all listed pay rates by 3.0%, effective July 1, 2024. The new City of Wildomar Pay Plan is attached to this resolution as “Exhibit A”.
1048
PASSED, APPROVED, AND ADOPTED this 12th day of June, 2024. ______________________________
Bridgette Moore
Mayor
APPROVED AS TO FORM: ATTEST:
______________________________ ______________________________ Thomas D. Jex Janet Morales, CMC
City Attorney City Clerk
1049
City of Wildomar Pay Plan
Effective July 01, 2024
Pay Grade Position FLSA Status Group 1 2 3 A B C D E F G H I J 101 $ 14.87 $ 15.24 $ 15.62 $ 16.01 $ 16.41 $ 16.82 $ 17.24 $ 17.67 $ 18.11 $ 18.57 Hourly $ 1,189.60 $ 1,219.20 $ 1,249.60 $ 1,280.80 $ 1,312.80 $ 1,345.60 $ 1,379.20 $ 1,413.60 $ 1,448.80 $ 1,485.60 Bi-weekly* $ 2,577.47 $ 2,641.60 $ 2,707.47 $ 2,775.07 $ 2,844.40 $ 2,915.47 $ 2,988.27 $ 3,062.80 $ 3,139.07 $ 3,218.80 Monthly* $ 30,929.60 $ 31,699.20 $ 32,489.60 $ 33,300.80 $ 34,132.80 $ 34,985.60 $ 35,859.20 $ 36,753.60 $ 37,668.80 $ 38,625.60 Annually* 102 Recreation Leader I Non Exempt Part-time $ 15.61 $ 16.00 $ 16.40 $ 16.81 $ 17.23 $ 17.66 $ 18.10 $ 18.56 $ 19.02 $ 19.50 Hourly $ 1,248.80 $ 1,280.00 $ 1,312.00 $ 1,344.80 $ 1,378.40 $ 1,412.80 $ 1,448.00 $ 1,484.80 $ 1,521.60 $ 1,560.00 Bi-weekly* $ 2,705.73 $ 2,773.33 $ 2,842.67 $ 2,913.73 $ 2,986.53 $ 3,061.07 $ 3,137.33 $ 3,217.07 $ 3,296.80 $ 3,380.00 Monthly* $ 32,468.80 $ 33,280.00 $ 34,112.00 $ 34,964.80 $ 35,838.40 $ 36,732.80 $ 37,648.00 $ 38,604.80 $ 39,561.60 $ 40,560.00 Annually* 103 $ 16.39 $ 16.80 $ 17.22 $ 17.65 $ 18.09 $ 18.55 $ 19.01 $ 19.48 $ 19.97 $ 20.47 Hourly $ 1,311.20 $ 1,344.00 $ 1,377.60 $ 1,412.00 $ 1,447.20 $ 1,484.00 $ 1,520.80 $ 1,558.40 $ 1,597.60 $ 1,637.60 Bi-weekly* $ 2,840.93 $ 2,912.00 $ 2,984.80 $ 3,059.33 $ 3,135.60 $ 3,215.33 $ 3,295.07 $ 3,376.53 $ 3,461.47 $ 3,548.13 Monthly* $ 34,091.20 $ 34,944.00 $ 35,817.60 $ 36,712.00 $ 37,627.20 $ 38,584.00 $ 39,540.80 $ 40,518.40 $ 41,537.60 $ 42,577.60 Annually* 104 Intern I Non Exempt Part-time $ 17.21 $ 17.64 $ 18.08 $ 18.53 $ 19.00 $ 19.47 $ 19.96 $ 20.46 $ 20.97 $ 21.49 Hourly $ 1,376.80 $ 1,411.20 $ 1,446.40 $ 1,482.40 $ 1,520.00 $ 1,557.60 $ 1,596.80 $ 1,636.80 $ 1,677.60 $ 1,719.20 Bi-weekly* $ 2,983.07 $ 3,057.60 $ 3,133.87 $ 3,211.87 $ 3,293.33 $ 3,374.80 $ 3,459.73 $ 3,546.40 $ 3,634.80 $ 3,724.93 Monthly* $ 35,796.80 $ 36,691.20 $ 37,606.40 $ 38,542.40 $ 39,520.00 $ 40,497.60 $ 41,516.80 $ 42,556.80 $ 43,617.60 $ 44,699.20 Annually* 105 $ 18.07 $ 18.52 $ 18.99 $ 19.46 $ 19.95 $ 20.45 $ 20.96 $ 21.48 $ 22.02 $ 22.57 Hourly $ 1,445.60 $ 1,481.60 $ 1,519.20 $ 1,556.80 $ 1,596.00 $ 1,636.00 $ 1,676.80 $ 1,718.40 $ 1,761.60 $ 1,805.60 Bi-weekly* $ 3,132.13 $ 3,210.13 $ 3,291.60 $ 3,373.07 $ 3,458.00 $ 3,544.67 $ 3,633.07 $ 3,723.20 $ 3,816.80 $ 3,912.13 Monthly* $ 37,585.60 $ 38,521.60 $ 39,499.20 $ 40,476.80 $ 41,496.00 $ 42,536.00 $ 43,596.80 $ 44,678.40 $ 45,801.60 $ 46,945.60 Annually* 106 Recreation Leader II Non Exempt Part-time $ 18.97 $ 19.45 $ 19.93 $ 20.43 $ 20.94 $ 21.47 $ 22.00 $ 22.55 $ 23.12 $ 23.70 Hourly $ 1,517.60 $ 1,556.00 $ 1,594.40 $ 1,634.40 $ 1,675.20 $ 1,717.60 $ 1,760.00 $ 1,804.00 $ 1,849.60 $ 1,896.00 Bi-weekly* $ 3,288.13 $ 3,371.33 $ 3,454.53 $ 3,541.20 $ 3,629.60 $ 3,721.47 $ 3,813.33 $ 3,908.67 $ 4,007.47 $ 4,108.00 Monthly* $ 39,457.60 $ 40,456.00 $ 41,454.40 $ 42,494.40 $ 43,555.20 $ 44,657.60 $ 45,760.00 $ 46,904.00 $ 48,089.60 $ 49,296.00 Annually* 107 $ 19.92 $ 20.42 $ 20.93 $ 21.45 $ 21.99 $ 22.54 $ 23.10 $ 23.68 $ 24.27 $ 24.88 Hourly $ 1,593.60 $ 1,633.60 $ 1,674.40 $ 1,716.00 $ 1,759.20 $ 1,803.20 $ 1,848.00 $ 1,894.40 $ 1,941.60 $ 1,990.40 Bi-weekly* $ 3,452.80 $ 3,539.47 $ 3,627.87 $ 3,718.00 $ 3,811.60 $ 3,906.93 $ 4,004.00 $ 4,104.53 $ 4,206.80 $ 4,312.53 Monthly* $ 41,433.60 $ 42,473.60 $ 43,534.40 $ 44,616.00 $ 45,739.20 $ 46,883.20 $ 48,048.00 $ 49,254.40 $ 50,481.60 $ 51,750.40 Annually* 108 Intern II Non Exempt Part-time $ 20.92 $ 21.44 $ 21.98 $ 22.53 $ 23.09 $ 23.67 $ 24.26 $ 24.87 $ 25.49 $ 26.12 Hourly $ 1,673.60 $ 1,715.20 $ 1,758.40 $ 1,802.40 $ 1,847.20 $ 1,893.60 $ 1,940.80 $ 1,989.60 $ 2,039.20 $ 2,089.60 Bi-weekly* $ 3,626.13 $ 3,716.27 $ 3,809.87 $ 3,905.20 $ 4,002.27 $ 4,102.80 $ 4,205.07 $ 4,310.80 $ 4,418.27 $ 4,527.47 Monthly* $ 43,513.60 $ 44,595.20 $ 45,718.40 $ 46,862.40 $ 48,027.20 $ 49,233.60 $ 50,460.80 $ 51,729.60 $ 53,019.20 $ 54,329.60 Annually* 109 Maintenance Worker I Non Exempt General $ 21.96 $ 22.51 $ 23.08 $ 23.65 $ 24.24 $ 24.85 $ 25.47 $ 26.11 $ 26.76 $ 27.43 Hourly $ 1,756.80 $ 1,800.80 $ 1,846.40 $ 1,892.00 $ 1,939.20 $ 1,988.00 $ 2,037.60 $ 2,088.80 $ 2,140.80 $ 2,194.40 Bi-weekly* $ 3,806.40 $ 3,901.73 $ 4,000.53 $ 4,099.33 $ 4,201.60 $ 4,307.33 $ 4,414.80 $ 4,525.73 $ 4,638.40 $ 4,754.53 Monthly* $ 45,676.80 $ 46,820.80 $ 48,006.40 $ 49,192.00 $ 50,419.20 $ 51,688.00 $ 52,977.60 $ 54,308.80 $ 55,660.80 $ 57,054.40 Annually* 110 Administrative Assistant I Non Exempt General $ 23.06 $ 23.64 $ 24.23 $ 24.84 $ 25.46 $ 26.09 $ 26.74 $ 27.41 $ 28.10 $ 28.80 Hourly $ 1,844.80 $ 1,891.20 $ 1,938.40 $ 1,987.20 $ 2,036.80 $ 2,087.20 $ 2,139.20 $ 2,192.80 $ 2,248.00 $ 2,304.00 Bi-weekly* $ 3,997.07 $ 4,097.60 $ 4,199.87 $ 4,305.60 $ 4,413.07 $ 4,522.27 $ 4,634.93 $ 4,751.07 $ 4,870.67 $ 4,992.00 Monthly* $ 47,964.80 $ 49,171.20 $ 50,398.40 $ 51,667.20 $ 52,956.80 $ 54,267.20 $ 55,619.20 $ 57,012.80 $ 58,448.00 $ 59,904.00 Annually* 111 Development Services Technician I Non Exempt General $ 24.22 $ 24.82 $ 25.44 $ 26.08 $ 26.73 $ 27.40 $ 28.08 $ 28.78 $ 29.50 $ 30.24 Hourly Maintenance Worker II Non Exempt General $ 1,937.60 $ 1,985.60 $ 2,035.20 $ 2,086.40 $ 2,138.40 $ 2,192.00 $ 2,246.40 $ 2,302.40 $ 2,360.00 $ 2,419.20 Bi-weekly* $ 4,198.13 $ 4,302.13 $ 4,409.60 $ 4,520.53 $ 4,633.20 $ 4,749.33 $ 4,867.20 $ 4,988.53 $ 5,113.33 $ 5,241.60 Monthly* $ 50,377.60 $ 51,625.60 $ 52,915.20 $ 54,246.40 $ 55,598.40 $ 56,992.00 $ 58,406.40 $ 59,862.40 $ 61,360.00 $ 62,899.20 Annually* Effective July 1, 2024
*Bi-weekly, Monthly, and Annual amounts are estimates. In the event of a discrepancy, the hourly rate will be used. 1 of 6
Approved at a regular City Counil Meeting on 06/12/2024 1050
Pay Grade Position FLSA Status Group 1 2 3 A B C D E F G H I J 112 Accounting Specialist I Non Exempt General $ 25.43 $ 26.06 $ 26.71 $ 27.38 $ 28.07 $ 28.77 $ 29.49 $ 30.22 $ 30.98 $ 31.75 Hourly Code Enforcement Technician Non Exempt General $ 2,034.40 $ 2,084.80 $ 2,136.80 $ 2,190.40 $ 2,245.60 $ 2,301.60 $ 2,359.20 $ 2,417.60 $ 2,478.40 $ 2,540.00 Bi-weekly* $ 4,407.87 $ 4,517.07 $ 4,629.73 $ 4,745.87 $ 4,865.47 $ 4,986.80 $ 5,111.60 $ 5,238.13 $ 5,369.87 $ 5,503.33 Monthly* $ 52,894.40 $ 54,204.80 $ 55,556.80 $ 56,950.40 $ 58,385.60 $ 59,841.60 $ 61,339.20 $ 62,857.60 $ 64,438.40 $ 66,040.00 Annually* 113 Administrative Assistant II Non Exempt General $ 26.70 $ 27.36 $ 28.05 $ 28.75 $ 29.47 $ 30.20 $ 30.96 $ 31.73 $ 32.53 $ 33.34 Hourly Deputy City Clerk I Non Exempt General $ 2,136.00 $ 2,188.80 $ 2,244.00 $ 2,300.00 $ 2,357.60 $ 2,416.00 $ 2,476.80 $ 2,538.40 $ 2,602.40 $ 2,667.20 Bi-weekly* $ 4,628.00 $ 4,742.40 $ 4,862.00 $ 4,983.33 $ 5,108.13 $ 5,234.67 $ 5,366.40 $ 5,499.87 $ 5,638.53 $ 5,778.93 Monthly* $ 55,536.00 $ 56,908.80 $ 58,344.00 $ 59,800.00 $ 61,297.60 $ 62,816.00 $ 64,396.80 $ 65,998.40 $ 67,662.40 $ 69,347.20 Annually* 114 Accounting Specialist II Non Exempt General $ 28.03 $ 28.73 $ 29.45 $ 30.19 $ 30.94 $ 31.71 $ 32.51 $ 33.32 $ 34.15 $ 35.01 Hourly Code Enforcement Officer I Non Exempt General $ 2,242.40 $ 2,298.40 $ 2,356.00 $ 2,415.20 $ 2,475.20 $ 2,536.80 $ 2,600.80 $ 2,665.60 $ 2,732.00 $ 2,800.80 Bi-weekly* Development Services Technician II Non Exempt General $ 4,858.53 $ 4,979.87 $ 5,104.67 $ 5,232.93 $ 5,362.93 $ 5,496.40 $ 5,635.07 $ 5,775.47 $ 5,919.33 $ 6,068.40 Monthly* Senior Maintenance Worker Non Exempt General $ 58,302.40 $ 59,758.40 $ 61,256.00 $ 62,795.20 $ 64,355.20 $ 65,956.80 $ 67,620.80 $ 69,305.60 $ 71,032.00 $ 72,820.80 Annually* 115 Building Inspector I Non Exempt General $ 29.43 $ 30.17 $ 30.92 $ 31.70 $ 32.49 $ 33.30 $ 34.13 $ 34.99 $ 35.86 $ 36.76 Hourly Engineering Technician I Non Exempt General $ 2,354.40 $ 2,413.60 $ 2,473.60 $ 2,536.00 $ 2,599.20 $ 2,664.00 $ 2,730.40 $ 2,799.20 $ 2,868.80 $ 2,940.80 Bi-weekly* Public Works Inspector I Non Exempt General $ 5,101.20 $ 5,229.47 $ 5,359.47 $ 5,494.67 $ 5,631.60 $ 5,772.00 $ 5,915.87 $ 6,064.93 $ 6,215.73 $ 6,371.73 Monthly* Human Resources Technician Non Exempt General $ 61,214.40 $ 62,753.60 $ 64,313.60 $ 65,936.00 $ 67,579.20 $ 69,264.00 $ 70,990.40 $ 72,779.20 $ 74,588.80 $ 76,460.80 Annually* 116 Code Enforcement Officer II Non Exempt General $ 26.70 $ 28.03 $ 29.43 $ 30.90 $ 31.68 $ 32.47 $ 33.28 $ 34.11 $ 34.96 $ 35.84 $ 36.73 $ 37.65 $ 38.59 Hourly $ 2,136.00 $ 2,242.40 $ 2,354.40 $ 2,472.00 $ 2,534.40 $ 2,597.60 $ 2,662.40 $ 2,728.80 $ 2,796.80 $ 2,867.20 $ 2,938.40 $ 3,012.00 $ 3,087.20 Bi-weekly* $ 4,628.00 $ 4,858.53 $ 5,101.20 $ 5,356.00 $ 5,491.20 $ 5,628.13 $ 5,768.53 $ 5,912.40 $ 6,059.73 $ 6,212.27 $ 6,366.53 $ 6,526.00 $ 6,688.93 Monthly* $ 55,536.00 $ 58,302.40 $ 61,214.40 $ 64,272.00 $ 65,894.40 $ 67,537.60 $ 69,222.40 $ 70,948.80 $ 72,716.80 $ 74,547.20 $ 76,398.40 $ 78,312.00 $ 80,267.20 Annually* 117 Assistant Planner Non Exempt General $ 28.03 $ 29.43 $ 30.90 $ 32.45 $ 33.26 $ 34.09 $ 34.94 $ 35.82 $ 36.71 $ 37.63 $ 38.57 $ 39.54 $ 40.52 Hourly Building Inspector II Non Exempt General $ 2,242.40 $ 2,354.40 $ 2,472.00 $ 2,596.00 $ 2,660.80 $ 2,727.20 $ 2,795.20 $ 2,865.60 $ 2,936.80 $ 3,010.40 $ 3,085.60 $ 3,163.20 $ 3,241.60 Bi-weekly* Engineering Technician II Non Exempt General $ 4,858.53 $ 5,101.20 $ 5,356.00 $ 5,624.67 $ 5,765.07 $ 5,908.93 $ 6,056.27 $ 6,208.80 $ 6,363.07 $ 6,522.53 $ 6,685.47 $ 6,853.60 $ 7,023.47 Monthly* Public Works Inspector II Non Exempt General $ 58,302.40 $ 61,214.40 $ 64,272.00 $ 67,496.00 $ 69,180.80 $ 70,907.20 $ 72,675.20 $ 74,505.60 $ 76,356.80 $ 78,270.40 $ 80,225.60 $ 82,243.20 $ 84,281.60 Annually* Plans Examiner I Non Exempt General
118 Deputy City Clerk II Non Exempt General $ 29.43 $ 30.90 $ 32.45 $ 34.07 $ 34.92 $ 35.80 $ 36.69 $ 37.61 $ 38.55 $ 39.51 $ 40.50 $ 41.51 $ 42.55 Hourly Management Analyst I Non Exempt General $ 2,354.40 $ 2,472.00 $ 2,596.00 $ 2,725.60 $ 2,793.60 $ 2,864.00 $ 2,935.20 $ 3,008.80 $ 3,084.00 $ 3,160.80 $ 3,240.00 $ 3,320.80 $ 3,404.00 Bi-weekly* Purchasing & Contracts Coordinator Non Exempt General $ 5,101.20 $ 5,356.00 $ 5,624.67 $ 5,905.47 $ 6,052.80 $ 6,205.33 $ 6,359.60 $ 6,519.07 $ 6,682.00 $ 6,848.40 $ 7,020.00 $ 7,195.07 $ 7,375.33 Monthly* Senior Code Enforcement Officer Non Exempt General $ 61,214.40 $ 64,272.00 $ 67,496.00 $ 70,865.60 $ 72,633.60 $ 74,464.00 $ 76,315.20 $ 78,228.80 $ 80,184.00 $ 82,180.80 $ 84,240.00 $ 86,340.80 $ 88,504.00 Annually* Executive Assistant Non Exempt General
119 Accountant I Non Exempt General $ 30.90 $ 32.45 $ 34.07 $ 35.78 $ 36.67 $ 37.59 $ 38.53 $ 39.49 $ 40.48 $ 41.49 $ 42.52 $ 43.59 $ 44.68 Hourly Facilities Contract Specilalist Non Exempt General $ 2,472.00 $ 2,596.00 $ 2,725.60 $ 2,862.40 $ 2,933.60 $ 3,007.20 $ 3,082.40 $ 3,159.20 $ 3,238.40 $ 3,319.20 $ 3,401.60 $ 3,487.20 $ 3,574.40 Bi-weekly* $ 5,356.00 $ 5,624.67 $ 5,905.47 $ 6,201.87 $ 6,356.13 $ 6,515.60 $ 6,678.53 $ 6,844.93 $ 7,016.53 $ 7,191.60 $ 7,370.13 $ 7,555.60 $ 7,744.53 Monthly* $ 64,272.00 $ 67,496.00 $ 70,865.60 $ 74,422.40 $ 76,273.60 $ 78,187.20 $ 80,142.40 $ 82,139.20 $ 84,198.40 $ 86,299.20 $ 88,441.60 $ 90,667.20 $ 92,934.40 Annually* 120 Assistant Engineer Non Exempt General $ 32.45 $ 34.07 $ 35.78 $ 37.56 $ 38.50 $ 39.46 $ 40.45 $ 41.46 $ 42.50 $ 43.56 $ 44.65 $ 45.77 $ 46.91 Hourly $ 2,596.00 $ 2,725.60 $ 2,862.40 $ 3,004.80 $ 3,080.00 $ 3,156.80 $ 3,236.00 $ 3,316.80 $ 3,400.00 $ 3,484.80 $ 3,572.00 $ 3,661.60 $ 3,752.80 Bi-weekly* $ 5,624.67 $ 5,905.47 $ 6,201.87 $ 6,510.40 $ 6,673.33 $ 6,839.73 $ 7,011.33 $ 7,186.40 $ 7,366.67 $ 7,550.40 $ 7,739.33 $ 7,933.47 $ 8,131.07 Monthly* $ 67,496.00 $ 70,865.60 $ 74,422.40 $ 78,124.80 $ 80,080.00 $ 82,076.80 $ 84,136.00 $ 86,236.80 $ 88,400.00 $ 90,604.80 $ 92,872.00 $ 95,201.60 $ 97,572.80 Annually* 121 Accountant II Non Exempt General $ 34.07 $ 35.78 $ 37.56 $ 39.44 $ 40.43 $ 41.44 $ 42.47 $ 43.54 $ 44.62 $ 45.74 $ 46.88 $ 48.05 $ 49.26 Hourly Assistant City Clerk Non Exempt General $ 2,725.60 $ 2,862.40 $ 3,004.80 $ 3,155.20 $ 3,234.40 $ 3,315.20 $ 3,397.60 $ 3,483.20 $ 3,569.60 $ 3,659.20 $ 3,750.40 $ 3,844.00 $ 3,940.80 Bi-weekly* Management Analyst II Non Exempt General $ 5,905.47 $ 6,201.87 $ 6,510.40 $ 6,836.27 $ 7,007.87 $ 7,182.93 $ 7,361.47 $ 7,546.93 $ 7,734.13 $ 7,928.27 $ 8,125.87 $ 8,328.67 $ 8,538.40 Monthly* Senior Building Inspector Non Exempt General $ 70,865.60 $ 74,422.40 $ 78,124.80 $ 82,035.20 $ 84,094.40 $ 86,195.20 $ 88,337.60 $ 90,563.20 $ 92,809.60 $ 95,139.20 $ 97,510.40 $ 99,944.00 $ 102,460.80 Annually* 122 Associate Planner Non Exempt General $ 35.78 $ 37.56 $ 39.44 $ 41.41 $ 42.45 $ 43.51 $ 44.60 $ 45.71 $ 46.85 $ 48.03 $ 49.23 $ 50.46 $ 51.72 Hourly Human Resources Analyst Non Exempt General $ 2,862.40 $ 3,004.80 $ 3,155.20 $ 3,312.80 $ 3,396.00 $ 3,480.80 $ 3,568.00 $ 3,656.80 $ 3,748.00 $ 3,842.40 $ 3,938.40 $ 4,036.80 $ 4,137.60 Bi-weekly* Plans Examiner II Non Exempt General $ 6,201.87 $ 6,510.40 $ 6,836.27 $ 7,177.73 $ 7,358.00 $ 7,541.73 $ 7,730.67 $ 7,923.07 $ 8,120.67 $ 8,325.20 $ 8,533.20 $ 8,746.40 $ 8,964.80 Monthly* $ 74,422.40 $ 78,124.80 $ 82,035.20 $ 86,132.80 $ 88,296.00 $ 90,500.80 $ 92,768.00 $ 95,076.80 $ 97,448.00 $ 99,902.40 $ 102,398.40 $ 104,956.80 $ 107,577.60 Annually* 123 Associate Engineer Non Exempt General $ 37.56 $ 39.44 $ 41.41 $ 43.48 $ 44.57 $ 45.68 $ 46.83 $ 48.00 $ 49.20 $ 50.43 $ 51.69 $ 52.98 $ 54.30 Hourly Field Supervisor Non Exempt General $ 3,004.80 $ 3,155.20 $ 3,312.80 $ 3,478.40 $ 3,565.60 $ 3,654.40 $ 3,746.40 $ 3,840.00 $ 3,936.00 $ 4,034.40 $ 4,135.20 $ 4,238.40 $ 4,344.00 Bi-weekly* $ 6,510.40 $ 6,836.27 $ 7,177.73 $ 7,536.53 $ 7,725.47 $ 7,917.87 $ 8,117.20 $ 8,320.00 $ 8,528.00 $ 8,741.20 $ 8,959.60 $ 9,183.20 $ 9,412.00 Monthly* $ 78,124.80 $ 82,035.20 $ 86,132.80 $ 90,438.40 $ 92,705.60 $ 95,014.40 $ 97,406.40 $ 99,840.00 $ 102,336.00 $ 104,894.40 $ 107,515.20 $ 110,198.40 $ 112,944.00 Annually* Effective July 1, 2024
*Bi-weekly, Monthly, and Annual amounts are estimates. In the event of a discrepancy, the hourly rate will be used. 2 of 6
Approved at a regular City Counil Meeting on 06/12/2024 1051
Pay Grade Position FLSA Status Group 1 2 3 A B C D E F G H I J 124 $ 39.44 $ 41.41 $ 43.48 $ 45.66 $ 46.80 $ 47.97 $ 49.17 $ 50.40 $ 51.66 $ 52.95 $ 54.27 $ 55.63 $ 57.02 Hourly $ 3,155.20 $ 3,312.80 $ 3,478.40 $ 3,652.80 $ 3,744.00 $ 3,837.60 $ 3,933.60 $ 4,032.00 $ 4,132.80 $ 4,236.00 $ 4,341.60 $ 4,450.40 $ 4,561.60 Bi-weekly* $ 6,836.27 $ 7,177.73 $ 7,536.53 $ 7,914.40 $ 8,112.00 $ 8,314.80 $ 8,522.80 $ 8,736.00 $ 8,954.40 $ 9,178.00 $ 9,406.80 $ 9,642.53 $ 9,883.47 Monthly* $ 82,035.20 $ 86,132.80 $ 90,438.40 $ 94,972.80 $ 97,344.00 $ 99,777.60 $ 102,273.60 $ 104,832.00 $ 107,452.80 $ 110,136.00 $ 112,881.60 $ 115,710.40 $ 118,601.60 Annually* 125 $ 41.41 $ 43.48 $ 45.66 $ 47.94 $ 49.14 $ 50.37 $ 51.63 $ 52.92 $ 54.24 $ 55.60 $ 56.99 $ 58.41 $ 59.87 Hourly $ 3,312.80 $ 3,478.40 $ 3,652.80 $ 3,835.20 $ 3,931.20 $ 4,029.60 $ 4,130.40 $ 4,233.60 $ 4,339.20 $ 4,448.00 $ 4,559.20 $ 4,672.80 $ 4,789.60 Bi-weekly* $ 7,177.73 $ 7,536.53 $ 7,914.40 $ 8,309.60 $ 8,517.60 $ 8,730.80 $ 8,949.20 $ 9,172.80 $ 9,401.60 $ 9,637.33 $ 9,878.27 $ 10,124.40 $ 10,377.47 Monthly* $ 86,132.80 $ 90,438.40 $ 94,972.80 $ 99,715.20 $ 102,211.20 $ 104,769.60 $ 107,390.40 $ 110,073.60 $ 112,819.20 $ 115,648.00 $ 118,539.20 $ 121,492.80 $ 124,529.60 Annually* 126 $ 43.48 $ 45.66 $ 47.94 $ 50.34 $ 51.60 $ 52.89 $ 54.21 $ 55.56 $ 56.95 $ 58.37 $ 59.83 $ 61.33 $ 62.86 Hourly $ 3,478.40 $ 3,652.80 $ 3,835.20 $ 4,027.20 $ 4,128.00 $ 4,231.20 $ 4,336.80 $ 4,444.80 $ 4,556.00 $ 4,669.60 $ 4,786.40 $ 4,906.40 $ 5,028.80 Bi-weekly* $ 7,536.53 $ 7,914.40 $ 8,309.60 $ 8,725.60 $ 8,944.00 $ 9,167.60 $ 9,396.40 $ 9,630.40 $ 9,871.33 $ 10,117.47 $ 10,370.53 $ 10,630.53 $ 10,895.73 Monthly* $ 90,438.40 $ 94,972.80 $ 99,715.20 $ 104,707.20 $ 107,328.00 $ 110,011.20 $ 112,756.80 $ 115,564.80 $ 118,456.00 $ 121,409.60 $ 124,446.40 $ 127,566.40 $ 130,748.80 Annually* 127 $ 45.66 $ 47.94 $ 50.34 $ 52.85 $ 54.17 $ 55.53 $ 56.92 $ 58.34 $ 59.80 $ 61.29 $ 62.83 $ 64.40 $ 66.01 Hourly $ 3,652.80 $ 3,835.20 $ 4,027.20 $ 4,228.00 $ 4,333.60 $ 4,442.40 $ 4,553.60 $ 4,667.20 $ 4,784.00 $ 4,903.20 $ 5,026.40 $ 5,152.00 $ 5,280.80 Bi-weekly* $ 7,914.40 $ 8,309.60 $ 8,725.60 $ 9,160.67 $ 9,389.47 $ 9,625.20 $ 9,866.13 $ 10,112.27 $ 10,365.33 $ 10,623.60 $ 10,890.53 $ 11,162.67 $ 11,441.73 Monthly* $ 94,972.80 $ 99,715.20 $ 104,707.20 $ 109,928.00 $ 112,673.60 $ 115,502.40 $ 118,393.60 $ 121,347.20 $ 124,384.00 $ 127,483.20 $ 130,686.40 $ 133,952.00 $ 137,300.80 Annually* 128 $ 47.94 $ 50.34 $ 52.85 $ 55.50 $ 56.88 $ 58.31 $ 59.76 $ 61.26 $ 62.79 $ 64.36 $ 65.97 $ 67.62 $ 69.31 Hourly $ 3,835.20 $ 4,027.20 $ 4,228.00 $ 4,440.00 $ 4,550.40 $ 4,664.80 $ 4,780.80 $ 4,900.80 $ 5,023.20 $ 5,148.80 $ 5,277.60 $ 5,409.60 $ 5,544.80 Bi-weekly* $ 8,309.60 $ 8,725.60 $ 9,160.67 $ 9,620.00 $ 9,859.20 $ 10,107.07 $ 10,358.40 $ 10,618.40 $ 10,883.60 $ 11,155.73 $ 11,434.80 $ 11,720.80 $ 12,013.73 Monthly* $ 99,715.20 $ 104,707.20 $ 109,928.00 $ 115,440.00 $ 118,310.40 $ 121,284.80 $ 124,300.80 $ 127,420.80 $ 130,603.20 $ 133,868.80 $ 137,217.60 $ 140,649.60 $ 144,164.80 Annually* 129 $ 50.34 $ 52.85 $ 55.50 $ 58.27 $ 59.73 $ 61.22 $ 62.75 $ 64.32 $ 65.93 $ 67.58 $ 69.26 $ 71.00 $ 72.77 Hourly $ 4,027.20 $ 4,228.00 $ 4,440.00 $ 4,661.60 $ 4,778.40 $ 4,897.60 $ 5,020.00 $ 5,145.60 $ 5,274.40 $ 5,406.40 $ 5,540.80 $ 5,680.00 $ 5,821.60 Bi-weekly* $ 8,725.60 $ 9,160.67 $ 9,620.00 $ 10,100.13 $ 10,353.20 $ 10,611.47 $ 10,876.67 $ 11,148.80 $ 11,427.87 $ 11,713.87 $ 12,005.07 $ 12,306.67 $ 12,613.47 Monthly* $ 104,707.20 $ 109,928.00 $ 115,440.00 $ 121,201.60 $ 124,238.40 $ 127,337.60 $ 130,520.00 $ 133,785.60 $ 137,134.40 $ 140,566.40 $ 144,060.80 $ 147,680.00 $ 151,361.60 Annually* 130 $ 52.85 $ 55.50 $ 58.27 $ 61.18 $ 62.71 $ 64.28 $ 65.89 $ 67.54 $ 69.22 $ 70.95 $ 72.73 $ 74.55 $ 76.41 Hourly $ 4,228.00 $ 4,440.00 $ 4,661.60 $ 4,894.40 $ 5,016.80 $ 5,142.40 $ 5,271.20 $ 5,403.20 $ 5,537.60 $ 5,676.00 $ 5,818.40 $ 5,964.00 $ 6,112.80 Bi-weekly* $ 9,160.67 $ 9,620.00 $ 10,100.13 $ 10,604.53 $ 10,869.73 $ 11,141.87 $ 11,420.93 $ 11,706.93 $ 11,998.13 $ 12,298.00 $ 12,606.53 $ 12,922.00 $ 13,244.40 Monthly* $ 109,928.00 $ 115,440.00 $ 121,201.60 $ 127,254.40 $ 130,436.80 $ 133,702.40 $ 137,051.20 $ 140,483.20 $ 143,977.60 $ 147,576.00 $ 151,278.40 $ 155,064.00 $ 158,932.80 Annually* 220 $ 32.45 $ 34.07 $ 35.78 $ 37.56 $ 38.50 $ 39.46 $ 40.45 $ 41.46 $ 42.50 $ 43.56 $ 44.65 $ 45.77 $ 46.91 Hourly $ 2,596.00 $ 2,725.60 $ 2,862.40 $ 3,004.80 $ 3,080.00 $ 3,156.80 $ 3,236.00 $ 3,316.80 $ 3,400.00 $ 3,484.80 $ 3,572.00 $ 3,661.60 $ 3,752.80 Bi-weekly* $ 5,624.67 $ 5,905.47 $ 6,201.87 $ 6,510.40 $ 6,673.33 $ 6,839.73 $ 7,011.33 $ 7,186.40 $ 7,366.67 $ 7,550.40 $ 7,739.33 $ 7,933.47 $ 8,131.07 Monthly* $ 67,496.00 $ 70,865.60 $ 74,422.40 $ 78,124.80 $ 80,080.00 $ 82,076.80 $ 84,136.00 $ 86,236.80 $ 88,400.00 $ 90,604.80 $ 92,872.00 $ 95,201.60 $ 97,572.80 Annually* 221 $ 34.07 $ 35.78 $ 37.56 $ 39.44 $ 40.43 $ 41.44 $ 42.47 $ 43.54 $ 44.62 $ 45.74 $ 46.88 $ 48.05 $ 49.26 Hourly $ 2,725.60 $ 2,862.40 $ 3,004.80 $ 3,155.20 $ 3,234.40 $ 3,315.20 $ 3,397.60 $ 3,483.20 $ 3,569.60 $ 3,659.20 $ 3,750.40 $ 3,844.00 $ 3,940.80 Bi-weekly* $ 5,905.47 $ 6,201.87 $ 6,510.40 $ 6,836.27 $ 7,007.87 $ 7,182.93 $ 7,361.47 $ 7,546.93 $ 7,734.13 $ 7,928.27 $ 8,125.87 $ 8,328.67 $ 8,538.40 Monthly* $ 70,865.60 $ 74,422.40 $ 78,124.80 $ 82,035.20 $ 84,094.40 $ 86,195.20 $ 88,337.60 $ 90,563.20 $ 92,809.60 $ 95,139.20 $ 97,510.40 $ 99,944.00 $ 102,460.80 Annually* 222 $ 35.78 $ 37.56 $ 39.44 $ 41.41 $ 42.45 $ 43.51 $ 44.60 $ 45.71 $ 46.85 $ 48.03 $ 49.23 $ 50.46 $ 51.72 Hourly $ 2,862.40 $ 3,004.80 $ 3,155.20 $ 3,312.80 $ 3,396.00 $ 3,480.80 $ 3,568.00 $ 3,656.80 $ 3,748.00 $ 3,842.40 $ 3,938.40 $ 4,036.80 $ 4,137.60 Bi-weekly* $ 6,201.87 $ 6,510.40 $ 6,836.27 $ 7,177.73 $ 7,358.00 $ 7,541.73 $ 7,730.67 $ 7,923.07 $ 8,120.67 $ 8,325.20 $ 8,533.20 $ 8,746.40 $ 8,964.80 Monthly* $ 74,422.40 $ 78,124.80 $ 82,035.20 $ 86,132.80 $ 88,296.00 $ 90,500.80 $ 92,768.00 $ 95,076.80 $ 97,448.00 $ 99,902.40 $ 102,398.40 $ 104,956.80 $ 107,577.60 Annually* 223 Senior Financial Analyst Exempt General $ 37.56 $ 39.44 $ 41.41 $ 43.48 $ 44.57 $ 45.68 $ 46.83 $ 48.00 $ 49.20 $ 50.43 $ 51.69 $ 52.98 $ 54.30 Hourly Senior Management Analyst Exempt General $ 3,004.80 $ 3,155.20 $ 3,312.80 $ 3,478.40 $ 3,565.60 $ 3,654.40 $ 3,746.40 $ 3,840.00 $ 3,936.00 $ 4,034.40 $ 4,135.20 $ 4,238.40 $ 4,344.00 Bi-weekly* Code Enforcement Supervisor Exempt General $ 6,510.40 $ 6,836.27 $ 7,177.73 $ 7,536.53 $ 7,725.47 $ 7,917.87 $ 8,117.20 $ 8,320.00 $ 8,528.00 $ 8,741.20 $ 8,959.60 $ 9,183.20 $ 9,412.00 Monthly* Senior Accountant Exempt General $ 78,124.80 $ 82,035.20 $ 86,132.80 $ 90,438.40 $ 92,705.60 $ 95,014.40 $ 97,406.40 $ 99,840.00 $ 102,336.00 $ 104,894.40 $ 107,515.20 $ 110,198.40 $ 112,944.00 Annually* 224 Building Inspection Supervisor Exempt General $ 39.44 $ 41.41 $ 43.48 $ 45.66 $ 46.80 $ 47.97 $ 49.17 $ 50.40 $ 51.66 $ 52.95 $ 54.27 $ 55.63 $ 57.02 Hourly Senior Planner Exempt General $ 3,155.20 $ 3,312.80 $ 3,478.40 $ 3,652.80 $ 3,744.00 $ 3,837.60 $ 3,933.60 $ 4,032.00 $ 4,132.80 $ 4,236.00 $ 4,341.60 $ 4,450.40 $ 4,561.60 Bi-weekly* $ 6,836.27 $ 7,177.73 $ 7,536.53 $ 7,914.40 $ 8,112.00 $ 8,314.80 $ 8,522.80 $ 8,736.00 $ 8,954.40 $ 9,178.00 $ 9,406.80 $ 9,642.53 $ 9,883.47 Monthly* $ 82,035.20 $ 86,132.80 $ 90,438.40 $ 94,972.80 $ 97,344.00 $ 99,777.60 $ 102,273.60 $ 104,832.00 $ 107,452.80 $ 110,136.00 $ 112,881.60 $ 115,710.40 $ 118,601.60 Annually* Effective July 1, 2024
*Bi-weekly, Monthly, and Annual amounts are estimates. In the event of a discrepancy, the hourly rate will be used. 3 of 6
Approved at a regular City Counil Meeting on 06/12/2024 1052
Pay Grade Position FLSA Status Group 1 2 3 A B C D E F G H I J 225 $ 41.41 $ 43.48 $ 45.66 $ 47.94 $ 49.14 $ 50.37 $ 51.63 $ 52.92 $ 54.24 $ 55.60 $ 56.99 $ 58.41 $ 59.87 Hourly $ 3,312.80 $ 3,478.40 $ 3,652.80 $ 3,835.20 $ 3,931.20 $ 4,029.60 $ 4,130.40 $ 4,233.60 $ 4,339.20 $ 4,448.00 $ 4,559.20 $ 4,672.80 $ 4,789.60 Bi-weekly* $ 7,177.73 $ 7,536.53 $ 7,914.40 $ 8,309.60 $ 8,517.60 $ 8,730.80 $ 8,949.20 $ 9,172.80 $ 9,401.60 $ 9,637.33 $ 9,878.27 $ 10,124.40 $ 10,377.47 Monthly* $ 86,132.80 $ 90,438.40 $ 94,972.80 $ 99,715.20 $ 102,211.20 $ 104,769.60 $ 107,390.40 $ 110,073.60 $ 112,819.20 $ 115,648.00 $ 118,539.20 $ 121,492.80 $ 124,529.60 Annually* 226 Code Enforcement Manager Exempt Management $ 43.48 $ 45.66 $ 47.94 $ 50.34 $ 51.60 $ 52.89 $ 54.21 $ 55.56 $ 56.95 $ 58.37 $ 59.83 $ 61.33 $ 62.86 Hourly Maintenance Manager Exempt Management $ 3,478.40 $ 3,652.80 $ 3,835.20 $ 4,027.20 $ 4,128.00 $ 4,231.20 $ 4,336.80 $ 4,444.80 $ 4,556.00 $ 4,669.60 $ 4,786.40 $ 4,906.40 $ 5,028.80 Bi-weekly* Engineering Division Manager Exempt Management $ 7,536.53 $ 7,914.40 $ 8,309.60 $ 8,725.60 $ 8,944.00 $ 9,167.60 $ 9,396.40 $ 9,630.40 $ 9,871.33 $ 10,117.47 $ 10,370.53 $ 10,630.53 $ 10,895.73 Monthly* $ 90,438.40 $ 94,972.80 $ 99,715.20 $ 104,707.20 $ 107,328.00 $ 110,011.20 $ 112,756.80 $ 115,564.80 $ 118,456.00 $ 121,409.60 $ 124,446.40 $ 127,566.40 $ 130,748.80 Annually* 227 Community Services Manager Exempt Management $ 45.66 $ 47.94 $ 50.34 $ 52.85 $ 54.17 $ 55.53 $ 56.92 $ 58.34 $ 59.80 $ 61.29 $ 62.83 $ 64.40 $ 66.01 Hourly Exempt Management $ 3,652.80 $ 3,835.20 $ 4,027.20 $ 4,228.00 $ 4,333.60 $ 4,442.40 $ 4,553.60 $ 4,667.20 $ 4,784.00 $ 4,903.20 $ 5,026.40 $ 5,152.00 $ 5,280.80 Bi-weekly* $ 7,914.40 $ 8,309.60 $ 8,725.60 $ 9,160.67 $ 9,389.47 $ 9,625.20 $ 9,866.13 $ 10,112.27 $ 10,365.33 $ 10,623.60 $ 10,890.53 $ 11,162.67 $ 11,441.73 Monthly* $ 94,972.80 $ 99,715.20 $ 104,707.20 $ 109,928.00 $ 112,673.60 $ 115,502.40 $ 118,393.60 $ 121,347.20 $ 124,384.00 $ 127,483.20 $ 130,686.40 $ 133,952.00 $ 137,300.80 Annually* 228 Senior Engineer Exempt Management $ 47.94 $ 50.34 $ 52.85 $ 55.50 $ 56.88 $ 58.31 $ 59.76 $ 61.26 $ 62.79 $ 64.36 $ 65.97 $ 67.62 $ 69.31 Hourly $ 3,835.20 $ 4,027.20 $ 4,228.00 $ 4,440.00 $ 4,550.40 $ 4,664.80 $ 4,780.80 $ 4,900.80 $ 5,023.20 $ 5,148.80 $ 5,277.60 $ 5,409.60 $ 5,544.80 Bi-weekly* $ 8,309.60 $ 8,725.60 $ 9,160.67 $ 9,620.00 $ 9,859.20 $ 10,107.07 $ 10,358.40 $ 10,618.40 $ 10,883.60 $ 11,155.73 $ 11,434.80 $ 11,720.80 $ 12,013.73 Monthly* $ 99,715.20 $ 104,707.20 $ 109,928.00 $ 115,440.00 $ 118,310.40 $ 121,284.80 $ 124,300.80 $ 127,420.80 $ 130,603.20 $ 133,868.80 $ 137,217.60 $ 140,649.60 $ 144,164.80 Annually* 229 Chief Building Official Exempt Management $ 50.34 $ 52.85 $ 55.50 $ 58.27 $ 59.73 $ 61.22 $ 62.75 $ 64.32 $ 65.93 $ 67.58 $ 69.26 $ 71.00 $ 72.77 Hourly Principal Engineer Exempt Management $ 4,027.20 $ 4,228.00 $ 4,440.00 $ 4,661.60 $ 4,778.40 $ 4,897.60 $ 5,020.00 $ 5,145.60 $ 5,274.40 $ 5,406.40 $ 5,540.80 $ 5,680.00 $ 5,821.60 Bi-weekly* Finance Manager Exempt Management $ 8,725.60 $ 9,160.67 $ 9,620.00 $ 10,100.13 $ 10,353.20 $ 10,611.47 $ 10,876.67 $ 11,148.80 $ 11,427.87 $ 11,713.87 $ 12,005.07 $ 12,306.67 $ 12,613.47 Monthly* Human Resources & Risk Manager Exempt Management $ 104,707.20 $ 109,928.00 $ 115,440.00 $ 121,201.60 $ 124,238.40 $ 127,337.60 $ 130,520.00 $ 133,785.60 $ 137,134.40 $ 140,566.40 $ 144,060.80 $ 147,680.00 $ 151,361.60 Annually* 230 $ 52.85 $ 55.50 $ 58.27 $ 61.18 $ 62.71 $ 64.28 $ 65.89 $ 67.54 $ 69.22 $ 70.95 $ 72.73 $ 74.55 $ 76.41 Hourly $ 4,228.00 $ 4,440.00 $ 4,661.60 $ 4,894.40 $ 5,016.80 $ 5,142.40 $ 5,271.20 $ 5,403.20 $ 5,537.60 $ 5,676.00 $ 5,818.40 $ 5,964.00 $ 6,112.80 Bi-weekly* $ 9,160.67 $ 9,620.00 $ 10,100.13 $ 10,604.53 $ 10,869.73 $ 11,141.87 $ 11,420.93 $ 11,706.93 $ 11,998.13 $ 12,298.00 $ 12,606.53 $ 12,922.00 $ 13,244.40 Monthly* $ 109,928.00 $ 115,440.00 $ 121,201.60 $ 127,254.40 $ 130,436.80 $ 133,702.40 $ 137,051.20 $ 140,483.20 $ 143,977.60 $ 147,576.00 $ 151,278.40 $ 155,064.00 $ 158,932.80 Annually* 231 $ 55.50 $ 58.27 $ 61.18 $ 64.24 $ 65.85 $ 67.49 $ 69.18 $ 70.91 $ 72.68 $ 74.50 $ 76.36 $ 78.27 $ 80.23 Hourly $ 4,440.00 $ 4,661.60 $ 4,894.40 $ 5,139.20 $ 5,268.00 $ 5,399.20 $ 5,534.40 $ 5,672.80 $ 5,814.40 $ 5,960.00 $ 6,108.80 $ 6,261.60 $ 6,418.40 Bi-weekly* $ 9,620.00 $ 10,100.13 $ 10,604.53 $ 11,134.93 $ 11,414.00 $ 11,698.27 $ 11,991.20 $ 12,291.07 $ 12,597.87 $ 12,913.33 $ 13,235.73 $ 13,566.80 $ 13,906.53 Monthly* $ 115,440.00 $ 121,201.60 $ 127,254.40 $ 133,619.20 $ 136,968.00 $ 140,379.20 $ 143,894.40 $ 147,492.80 $ 151,174.40 $ 154,960.00 $ 158,828.80 $ 162,801.60 $ 166,878.40 Annually* 232 Principal Engineer/City Engineer Exempt Management $ 58.27 $ 61.18 $ 64.24 $ 67.45 $ 69.14 $ 70.87 $ 72.64 $ 74.46 $ 76.32 $ 78.23 $ 80.18 $ 82.19 $ 84.24 Hourly $ 4,661.60 $ 4,894.40 $ 5,139.20 $ 5,396.00 $ 5,531.20 $ 5,669.60 $ 5,811.20 $ 5,956.80 $ 6,105.60 $ 6,258.40 $ 6,414.40 $ 6,575.20 $ 6,739.20 Bi-weekly* $ 10,100.13 $ 10,604.53 $ 11,134.93 $ 11,691.33 $ 11,984.27 $ 12,284.13 $ 12,590.93 $ 12,906.40 $ 13,228.80 $ 13,559.87 $ 13,897.87 $ 14,246.27 $ 14,601.60 Monthly* $ 121,201.60 $ 127,254.40 $ 133,619.20 $ 140,296.00 $ 143,811.20 $ 147,409.60 $ 151,091.20 $ 154,876.80 $ 158,745.60 $ 162,718.40 $ 166,774.40 $ 170,955.20 $ 175,219.20 Annually* 233 $ 61.18 $ 64.24 $ 67.45 $ 70.83 $ 72.60 $ 74.41 $ 76.27 $ 78.18 $ 80.13 $ 82.14 $ 84.19 $ 86.30 $ 88.45 Hourly $ 4,894.40 $ 5,139.20 $ 5,396.00 $ 5,666.40 $ 5,808.00 $ 5,952.80 $ 6,101.60 $ 6,254.40 $ 6,410.40 $ 6,571.20 $ 6,735.20 $ 6,904.00 $ 7,076.00 Bi-weekly* $ 10,604.53 $ 11,134.93 $ 11,691.33 $ 12,277.20 $ 12,584.00 $ 12,897.73 $ 13,220.13 $ 13,551.20 $ 13,889.20 $ 14,237.60 $ 14,592.93 $ 14,958.67 $ 15,331.33 Monthly* $ 127,254.40 $ 133,619.20 $ 140,296.00 $ 147,326.40 $ 151,008.00 $ 154,772.80 $ 158,641.60 $ 162,614.40 $ 166,670.40 $ 170,851.20 $ 175,115.20 $ 179,504.00 $ 183,976.00 Annually* 234 $ 64.24 $ 67.45 $ 70.83 $ 74.37 $ 76.23 $ 78.13 $ 80.09 $ 82.09 $ 84.14 $ 86.24 $ 88.40 $ 90.61 $ 92.87 Hourly $ 5,139.20 $ 5,396.00 $ 5,666.40 $ 5,949.60 $ 6,098.40 $ 6,250.40 $ 6,407.20 $ 6,567.20 $ 6,731.20 $ 6,899.20 $ 7,072.00 $ 7,248.80 $ 7,429.60 Bi-weekly* $ 11,134.93 $ 11,691.33 $ 12,277.20 $ 12,890.80 $ 13,213.20 $ 13,542.53 $ 13,882.27 $ 14,228.93 $ 14,584.27 $ 14,948.27 $ 15,322.67 $ 15,705.73 $ 16,097.47 Monthly* $ 133,619.20 $ 140,296.00 $ 147,326.40 $ 154,689.60 $ 158,558.40 $ 162,510.40 $ 166,587.20 $ 170,747.20 $ 175,011.20 $ 179,379.20 $ 183,872.00 $ 188,468.80 $ 193,169.60 Annually* 235 $ 67.45 $ 70.83 $ 74.37 $ 78.09 $ 80.04 $ 82.04 $ 84.09 $ 86.19 $ 88.35 $ 90.56 $ 92.82 $ 95.14 $ 97.52 Hourly $ 5,396.00 $ 5,666.40 $ 5,949.60 $ 6,247.20 $ 6,403.20 $ 6,563.20 $ 6,727.20 $ 6,895.20 $ 7,068.00 $ 7,244.80 $ 7,425.60 $ 7,611.20 $ 7,801.60 Bi-weekly* $ 11,691.33 $ 12,277.20 $ 12,890.80 $ 13,535.60 $ 13,873.60 $ 14,220.27 $ 14,575.60 $ 14,939.60 $ 15,314.00 $ 15,697.07 $ 16,088.80 $ 16,490.93 $ 16,903.47 Monthly* $ 140,296.00 $ 147,326.40 $ 154,689.60 $ 162,427.20 $ 166,483.20 $ 170,643.20 $ 174,907.20 $ 179,275.20 $ 183,768.00 $ 188,364.80 $ 193,065.60 $ 197,891.20 $ 202,841.60 Annually* 328 $ 47.94 $ 50.34 $ 52.85 $ 55.46 $ 56.84 $ 58.26 $ 59.72 $ 61.21 $ 62.74 $ 64.31 $ 65.92 $ 67.57 $ 69.26 Hourly $ 3,835.20 $ 4,027.20 $ 4,228.00 $ 4,436.80 $ 4,547.20 $ 4,660.80 $ 4,777.60 $ 4,896.80 $ 5,019.20 $ 5,144.80 $ 5,273.60 $ 5,405.60 $ 5,540.80 Bi-weekly* $ 8,309.60 $ 8,725.60 $ 9,160.67 $ 9,613.07 $ 9,852.27 $ 10,098.40 $ 10,351.47 $ 10,609.73 $ 10,874.93 $ 11,147.07 $ 11,426.13 $ 11,712.13 $ 12,005.07 Monthly* $ 99,715.20 $ 104,707.20 $ 109,928.00 $ 115,356.80 $ 118,227.20 $ 121,180.80 $ 124,217.60 $ 127,316.80 $ 130,499.20 $ 133,764.80 $ 137,113.60 $ 140,545.60 $ 144,060.80 Annually* Effective July 1, 2024
*Bi-weekly, Monthly, and Annual amounts are estimates. In the event of a discrepancy, the hourly rate will be used. 4 of 6
Approved at a regular City Counil Meeting on 06/12/2024 1053
Pay Grade Position FLSA Status Group 1 2 3 A B C D E F G H I J 329 $ 50.34 $ 52.85 $ 55.50 $ 58.23 $ 59.68 $ 61.18 $ 62.71 $ 64.27 $ 65.88 $ 67.53 $ 69.22 $ 70.95 $ 72.72 Hourly $ 4,027.20 $ 4,228.00 $ 4,440.00 $ 4,658.40 $ 4,774.40 $ 4,894.40 $ 5,016.80 $ 5,141.60 $ 5,270.40 $ 5,402.40 $ 5,537.60 $ 5,676.00 $ 5,817.60 Bi-weekly* $ 8,725.60 $ 9,160.67 $ 9,620.00 $ 10,093.20 $ 10,344.53 $ 10,604.53 $ 10,869.73 $ 11,140.13 $ 11,419.20 $ 11,705.20 $ 11,998.13 $ 12,298.00 $ 12,604.80 Monthly* $ 104,707.20 $ 109,928.00 $ 115,440.00 $ 121,118.40 $ 124,134.40 $ 127,254.40 $ 130,436.80 $ 133,681.60 $ 137,030.40 $ 140,462.40 $ 143,977.60 $ 147,576.00 $ 151,257.60 Annually* 330 City Clerk Exempt Executive $ 52.85 $ 55.50 $ 58.27 $ 61.14 $ 62.67 $ 64.24 $ 65.84 $ 67.49 $ 69.17 $ 70.90 $ 72.68 $ 74.49 $ 76.35 Hourly Assistant to the City Manager Exempt Executive $ 4,228.00 $ 4,440.00 $ 4,661.60 $ 4,891.20 $ 5,013.60 $ 5,139.20 $ 5,267.20 $ 5,399.20 $ 5,533.60 $ 5,672.00 $ 5,814.40 $ 5,959.20 $ 6,108.00 Bi-weekly* $ 9,160.67 $ 9,620.00 $ 10,100.13 $ 10,597.60 $ 10,862.80 $ 11,134.93 $ 11,412.27 $ 11,698.27 $ 11,989.47 $ 12,289.33 $ 12,597.87 $ 12,911.60 $ 13,234.00 Monthly* $ 109,928.00 $ 115,440.00 $ 121,201.60 $ 127,171.20 $ 130,353.60 $ 133,619.20 $ 136,947.20 $ 140,379.20 $ 143,873.60 $ 147,472.00 $ 151,174.40 $ 154,939.20 $ 158,808.00 Annually* 331 $ 55.46 $ 58.23 $ 61.14 $ 64.20 $ 65.80 $ 67.45 $ 69.13 $ 70.86 $ 72.63 $ 74.45 $ 76.31 $ 78.22 $ 80.17 Hourly $ 4,436.80 $ 4,658.40 $ 4,891.20 $ 5,136.00 $ 5,264.00 $ 5,396.00 $ 5,530.40 $ 5,668.80 $ 5,810.40 $ 5,956.00 $ 6,104.80 $ 6,257.60 $ 6,413.60 Bi-weekly* $ 9,613.07 $ 10,093.20 $ 10,597.60 $ 11,128.00 $ 11,405.33 $ 11,691.33 $ 11,982.53 $ 12,282.40 $ 12,589.20 $ 12,904.67 $ 13,227.07 $ 13,558.13 $ 13,896.13 Monthly* $ 115,356.80 $ 121,118.40 $ 127,171.20 $ 133,536.00 $ 136,864.00 $ 140,296.00 $ 143,790.40 $ 147,388.80 $ 151,070.40 $ 154,856.00 $ 158,724.80 $ 162,697.60 $ 166,753.60 Annually* 332 $ 58.23 $ 61.14 $ 64.20 $ 67.41 $ 69.09 $ 70.82 $ 72.59 $ 74.40 $ 76.26 $ 78.17 $ 80.12 $ 82.13 $ 84.18 Hourly $ 4,658.40 $ 4,891.20 $ 5,136.00 $ 5,392.80 $ 5,527.20 $ 5,665.60 $ 5,807.20 $ 5,952.00 $ 6,100.80 $ 6,253.60 $ 6,409.60 $ 6,570.40 $ 6,734.40 Bi-weekly* $ 10,093.20 $ 10,597.60 $ 11,128.00 $ 11,684.40 $ 11,975.60 $ 12,275.47 $ 12,582.27 $ 12,896.00 $ 13,218.40 $ 13,549.47 $ 13,887.47 $ 14,235.87 $ 14,591.20 Monthly* $ 121,118.40 $ 127,171.20 $ 133,536.00 $ 140,212.80 $ 143,707.20 $ 147,305.60 $ 150,987.20 $ 154,752.00 $ 158,620.80 $ 162,593.60 $ 166,649.60 $ 170,830.40 $ 175,094.40 Annually* 333 $ 61.14 $ 64.20 $ 67.41 $ 70.78 $ 72.55 $ 74.36 $ 76.22 $ 78.12 $ 80.08 $ 82.08 $ 84.13 $ 86.23 $ 88.39 Hourly $ 4,891.20 $ 5,136.00 $ 5,392.80 $ 5,662.40 $ 5,804.00 $ 5,948.80 $ 6,097.60 $ 6,249.60 $ 6,406.40 $ 6,566.40 $ 6,730.40 $ 6,898.40 $ 7,071.20 Bi-weekly* $ 10,597.60 $ 11,128.00 $ 11,684.40 $ 12,268.53 $ 12,575.33 $ 12,889.07 $ 13,211.47 $ 13,540.80 $ 13,880.53 $ 14,227.20 $ 14,582.53 $ 14,946.53 $ 15,320.93 Monthly* $ 127,171.20 $ 133,536.00 $ 140,212.80 $ 147,222.40 $ 150,904.00 $ 154,668.80 $ 158,537.60 $ 162,489.60 $ 166,566.40 $ 170,726.40 $ 174,990.40 $ 179,358.40 $ 183,851.20 Annually* 334 Economic Development Director Exempt Executive $ 64.20 $ 67.41 $ 70.78 $ 74.32 $ 76.17 $ 78.08 $ 80.03 $ 82.03 $ 84.08 $ 86.18 $ 88.34 $ 90.54 $ 92.81 Hourly Public Works Director Exempt Executive $ 5,136.00 $ 5,392.80 $ 5,662.40 $ 5,945.60 $ 6,093.60 $ 6,246.40 $ 6,402.40 $ 6,562.40 $ 6,726.40 $ 6,894.40 $ 7,067.20 $ 7,243.20 $ 7,424.80 Bi-weekly* $ 11,128.00 $ 11,684.40 $ 12,268.53 $ 12,882.13 $ 13,202.80 $ 13,533.87 $ 13,871.87 $ 14,218.53 $ 14,573.87 $ 14,937.87 $ 15,312.27 $ 15,693.60 $ 16,087.07 Monthly* $ 133,536.00 $ 140,212.80 $ 147,222.40 $ 154,585.60 $ 158,433.60 $ 162,406.40 $ 166,462.40 $ 170,622.40 $ 174,886.40 $ 179,254.40 $ 183,747.20 $ 188,323.20 $ 193,044.80 Annually* 335 $ 67.41 $ 70.78 $ 74.32 $ 78.03 $ 79.98 $ 81.98 $ 84.03 $ 86.13 $ 88.28 $ 90.49 $ 92.75 $ 95.07 $ 97.45 Hourly $ 5,392.80 $ 5,662.40 $ 5,945.60 $ 6,242.40 $ 6,398.40 $ 6,558.40 $ 6,722.40 $ 6,890.40 $ 7,062.40 $ 7,239.20 $ 7,420.00 $ 7,605.60 $ 7,796.00 Bi-weekly* $ 11,684.40 $ 12,268.53 $ 12,882.13 $ 13,525.20 $ 13,863.20 $ 14,209.87 $ 14,565.20 $ 14,929.20 $ 15,301.87 $ 15,684.93 $ 16,076.67 $ 16,478.80 $ 16,891.33 Monthly* $ 140,212.80 $ 147,222.40 $ 154,585.60 $ 162,302.40 $ 166,358.40 $ 170,518.40 $ 174,782.40 $ 179,150.40 $ 183,622.40 $ 188,219.20 $ 192,920.00 $ 197,745.60 $ 202,696.00 Annually* 336 Community Services Director Exempt Executive $ 70.83 $ 74.37 $ 78.09 $ 81.99 $ 84.04 $ 86.14 $ 88.29 $ 90.50 $ 92.76 $ 95.08 $ 97.46 $ 99.90 $ 102.39 Hourly $ 5,666.40 $ 5,949.60 $ 6,247.20 $ 6,559.20 $ 6,723.20 $ 6,891.20 $ 7,063.20 $ 7,240.00 $ 7,420.80 $ 7,606.40 $ 7,796.80 $ 7,992.00 $ 8,191.20 Bi-weekly* $ 12,277.20 $ 12,890.80 $ 13,535.60 $ 14,211.60 $ 14,566.93 $ 14,930.93 $ 15,303.60 $ 15,686.67 $ 16,078.40 $ 16,480.53 $ 16,893.07 $ 17,316.00 $ 17,747.60 Monthly* $ 147,326.40 $ 154,689.60 $ 162,427.20 $ 170,539.20 $ 174,803.20 $ 179,171.20 $ 183,643.20 $ 188,240.00 $ 192,940.80 $ 197,766.40 $ 202,716.80 $ 207,792.00 $ 212,971.20 Annually* 337 Administrative Services Director Exempt Executive $ 74.37 $ 78.09 $ 81.99 $ 86.09 $ 88.24 $ 90.45 $ 92.71 $ 95.03 $ 97.40 $ 99.84 $ 102.33 $ 104.89 $ 107.51 Hourly Community Development Director Exempt Executive $ 5,949.60 $ 6,247.20 $ 6,559.20 $ 6,887.20 $ 7,059.20 $ 7,236.00 $ 7,416.80 $ 7,602.40 $ 7,792.00 $ 7,987.20 $ 8,186.40 $ 8,391.20 $ 8,600.80 Bi-weekly* Public Works Director/City Engineer Exempt Executive $ 12,890.80 $ 13,535.60 $ 14,211.60 $ 14,922.27 $ 15,294.93 $ 15,678.00 $ 16,069.73 $ 16,471.87 $ 16,882.67 $ 17,305.60 $ 17,737.20 $ 18,180.93 $ 18,635.07 Monthly* $ 154,689.60 $ 162,427.20 $ 170,539.20 $ 179,067.20 $ 183,539.20 $ 188,136.00 $ 192,836.80 $ 197,662.40 $ 202,592.00 $ 207,667.20 $ 212,846.40 $ 218,171.20 $ 223,620.80 Annually* 338 Deputy City Manager Exempt Executive $ 78.09 $ 81.99 $ 86.09 $ 90.39 $ 92.65 $ 94.97 $ 97.34 $ 99.78 $ 102.27 $ 104.83 $ 107.45 $ 110.14 $ 112.89 Hourly $ 6,247.20 $ 6,559.20 $ 6,887.20 $ 7,231.20 $ 7,412.00 $ 7,597.60 $ 7,787.20 $ 7,982.40 $ 8,181.60 $ 8,386.40 $ 8,596.00 $ 8,811.20 $ 9,031.20 Bi-weekly* $ 13,535.60 $ 14,211.60 $ 14,922.27 $ 15,667.60 $ 16,059.33 $ 16,461.47 $ 16,872.27 $ 17,295.20 $ 17,726.80 $ 18,170.53 $ 18,624.67 $ 19,090.93 $ 19,567.60 Monthly* $ 162,427.20 $ 170,539.20 $ 179,067.20 $ 188,011.20 $ 192,712.00 $ 197,537.60 $ 202,467.20 $ 207,542.40 $ 212,721.60 $ 218,046.40 $ 223,496.00 $ 229,091.20 $ 234,811.20 Annually* 339 Assistant City Manager Exempt Executive $ 81.99 $ 86.09 $ 90.39 $ 94.91 $ 97.29 $ 99.72 $ 102.21 $ 104.77 $ 107.39 $ 110.07 $ 112.82 $ 115.64 $ 118.53 Hourly $ 6,559.20 $ 6,887.20 $ 7,231.20 $ 7,592.80 $ 7,783.20 $ 7,977.60 $ 8,176.80 $ 8,381.60 $ 8,591.20 $ 8,805.60 $ 9,025.60 $ 9,251.20 $ 9,482.40 Bi-weekly* $ 14,211.60 $ 14,922.27 $ 15,667.60 $ 16,451.07 $ 16,863.60 $ 17,284.80 $ 17,716.40 $ 18,160.13 $ 18,614.27 $ 19,078.80 $ 19,555.47 $ 20,044.27 $ 20,545.20 Monthly* $ 170,539.20 $ 179,067.20 $ 188,011.20 $ 197,412.80 $ 202,363.20 $ 207,417.60 $ 212,596.80 $ 217,921.60 $ 223,371.20 $ 228,945.60 $ 234,665.60 $ 240,531.20 $ 246,542.40 Annually* 340 $ 86.09 $ 90.39 $ 94.91 $ 99.66 $ 102.15 $ 104.70 $ 107.32 $ 110.00 $ 112.75 $ 115.57 $ 118.46 $ 121.42 $ 124.46 Hourly $ 6,887.20 $ 7,231.20 $ 7,592.80 $ 7,972.80 $ 8,172.00 $ 8,376.00 $ 8,585.60 $ 8,800.00 $ 9,020.00 $ 9,245.60 $ 9,476.80 $ 9,713.60 $ 9,956.80 Bi-weekly* $ 14,922.27 $ 15,667.60 $ 16,451.07 $ 17,274.40 $ 17,706.00 $ 18,148.00 $ 18,602.13 $ 19,066.67 $ 19,543.33 $ 20,032.13 $ 20,533.07 $ 21,046.13 $ 21,573.07 Monthly* $ 179,067.20 $ 188,011.20 $ 197,412.80 $ 207,292.80 $ 212,472.00 $ 217,776.00 $ 223,225.60 $ 228,800.00 $ 234,520.00 $ 240,385.60 $ 246,396.80 $ 252,553.60 $ 258,876.80 Annually* Effective July 1, 2024
*Bi-weekly, Monthly, and Annual amounts are estimates. In the event of a discrepancy, the hourly rate will be used. 5 of 6
Approved at a regular City Counil Meeting on 06/12/2024 1054
Pay Grade Position FLSA Status Group 1 2 3 A B C D E F G H I J 341 $ 90.39 $ 94.91 $ 99.66 $ 104.64 $ 107.26 $ 109.94 $ 112.69 $ 115.50 $ 118.39 $ 121.35 $ 124.39 $ 127.49 $ 130.68 Hourly $ 7,231.20 $ 7,592.80 $ 7,972.80 $ 8,371.20 $ 8,580.80 $ 8,795.20 $ 9,015.20 $ 9,240.00 $ 9,471.20 $ 9,708.00 $ 9,951.20 $ 10,199.20 $ 10,454.40 Bi-weekly* $ 15,667.60 $ 16,451.07 $ 17,274.40 $ 18,137.60 $ 18,591.73 $ 19,056.27 $ 19,532.93 $ 20,020.00 $ 20,520.93 $ 21,034.00 $ 21,560.93 $ 22,098.27 $ 22,651.20 Monthly* $ 188,011.20 $ 197,412.80 $ 207,292.80 $ 217,651.20 $ 223,100.80 $ 228,675.20 $ 234,395.20 $ 240,240.00 $ 246,251.20 $ 252,408.00 $ 258,731.20 $ 265,179.20 $ 271,814.40 Annually* 342 $ 94.91 $ 99.66 $ 104.64 $ 109.87 $ 112.62 $ 115.44 $ 118.32 $ 121.28 $ 124.31 $ 127.42 $ 130.60 $ 133.87 $ 137.22 Hourly $ 7,592.80 $ 7,972.80 $ 8,371.20 $ 8,789.60 $ 9,009.60 $ 9,235.20 $ 9,465.60 $ 9,702.40 $ 9,944.80 $ 10,193.60 $ 10,448.00 $ 10,709.60 $ 10,977.60 Bi-weekly* $ 16,451.07 $ 17,274.40 $ 18,137.60 $ 19,044.13 $ 19,520.80 $ 20,009.60 $ 20,508.80 $ 21,021.87 $ 21,547.07 $ 22,086.13 $ 22,637.33 $ 23,204.13 $ 23,784.80 Monthly* $ 197,412.80 $ 207,292.80 $ 217,651.20 $ 228,529.60 $ 234,249.60 $ 240,115.20 $ 246,105.60 $ 252,262.40 $ 258,564.80 $ 265,033.60 $ 271,648.00 $ 278,449.60 $ 285,417.60 Annually* 343 $ 99.66 $ 104.64 $ 109.87 $ 115.37 $ 118.25 $ 121.21 $ 124.24 $ 127.34 $ 130.53 $ 133.79 $ 137.13 $ 140.56 $ 144.08 Hourly $ 7,972.80 $ 8,371.20 $ 8,789.60 $ 9,229.60 $ 9,460.00 $ 9,696.80 $ 9,939.20 $ 10,187.20 $ 10,442.40 $ 10,703.20 $ 10,970.40 $ 11,244.80 $ 11,526.40 Bi-weekly* $ 17,274.40 $ 18,137.60 $ 19,044.13 $ 19,997.47 $ 20,496.67 $ 21,009.73 $ 21,534.93 $ 22,072.27 $ 22,625.20 $ 23,190.27 $ 23,769.20 $ 24,363.73 $ 24,973.87 Monthly* $ 207,292.80 $ 217,651.20 $ 228,529.60 $ 239,969.60 $ 245,960.00 $ 252,116.80 $ 258,419.20 $ 264,867.20 $ 271,502.40 $ 278,283.20 $ 285,230.40 $ 292,364.80 $ 299,686.40 Annually* 344 $ 104.64 $ 109.87 $ 115.37 $ 121.14 $ 124.16 $ 127.27 $ 130.45 $ 133.71 $ 137.05 $ 140.48 $ 143.99 $ 147.59 $ 151.28 Hourly $ 8,371.20 $ 8,789.60 $ 9,229.60 $ 9,691.20 $ 9,932.80 $ 10,181.60 $ 10,436.00 $ 10,696.80 $ 10,964.00 $ 11,238.40 $ 11,519.20 $ 11,807.20 $ 12,102.40 Bi-weekly* $ 18,137.60 $ 19,044.13 $ 19,997.47 $ 20,997.60 $ 21,521.07 $ 22,060.13 $ 22,611.33 $ 23,176.40 $ 23,755.33 $ 24,349.87 $ 24,958.27 $ 25,582.27 $ 26,221.87 Monthly* $ 217,651.20 $ 228,529.60 $ 239,969.60 $ 251,971.20 $ 258,252.80 $ 264,721.60 $ 271,336.00 $ 278,116.80 $ 285,064.00 $ 292,198.40 $ 299,499.20 $ 306,987.20 $ 314,662.40 Annually* 345 $ 109.87 $ 115.37 $ 121.14 $ 127.19 $ 130.37 $ 133.63 $ 136.97 $ 140.40 $ 143.91 $ 147.50 $ 151.19 $ 154.97 $ 158.84 Hourly $ 8,789.60 $ 9,229.60 $ 9,691.20 $ 10,175.20 $ 10,429.60 $ 10,690.40 $ 10,957.60 $ 11,232.00 $ 11,512.80 $ 11,800.00 $ 12,095.20 $ 12,397.60 $ 12,707.20 Bi-weekly* $ 19,044.13 $ 19,997.47 $ 20,997.60 $ 22,046.27 $ 22,597.47 $ 23,162.53 $ 23,741.47 $ 24,336.00 $ 24,944.40 $ 25,566.67 $ 26,206.27 $ 26,861.47 $ 27,532.27 Monthly* $ 228,529.60 $ 239,969.60 $ 251,971.20 $ 264,555.20 $ 271,169.60 $ 277,950.40 $ 284,897.60 $ 292,032.00 $ 299,332.80 $ 306,800.00 $ 314,475.20 $ 322,337.60 $ 330,387.20 Annually* 346 $ 115.37 $ 121.14 $ 127.19 $ 133.55 $ 136.89 $ 140.31 $ 143.82 $ 147.41 $ 151.10 $ 154.88 $ 158.75 $ 162.72 $ 166.79 Hourly $ 9,229.60 $ 9,691.20 $ 10,175.20 $ 10,684.00 $ 10,951.20 $ 11,224.80 $ 11,505.60 $ 11,792.80 $ 12,088.00 $ 12,390.40 $ 12,700.00 $ 13,017.60 $ 13,343.20 Bi-weekly* $ 19,997.47 $ 20,997.60 $ 22,046.27 $ 23,148.67 $ 23,727.60 $ 24,320.40 $ 24,928.80 $ 25,551.07 $ 26,190.67 $ 26,845.87 $ 27,516.67 $ 28,204.80 $ 28,910.27 Monthly* $ 239,969.60 $ 251,971.20 $ 264,555.20 $ 277,784.00 $ 284,731.20 $ 291,844.80 $ 299,145.60 $ 306,612.80 $ 314,288.00 $ 322,150.40 $ 330,200.00 $ 338,457.60 $ 346,923.20 Annually* 347 $ 121.14 $ 127.19 $ 133.55 $ 140.23 $ 143.73 $ 147.33 $ 151.01 $ 154.79 $ 158.65 $ 162.62 $ 166.69 $ 170.85 $ 175.12 Hourly $ 9,691.20 $ 10,175.20 $ 10,684.00 $ 11,218.40 $ 11,498.40 $ 11,786.40 $ 12,080.80 $ 12,383.20 $ 12,692.00 $ 13,009.60 $ 13,335.20 $ 13,668.00 $ 14,009.60 Bi-weekly* $ 20,997.60 $ 22,046.27 $ 23,148.67 $ 24,306.53 $ 24,913.20 $ 25,537.20 $ 26,175.07 $ 26,830.27 $ 27,499.33 $ 28,187.47 $ 28,892.93 $ 29,614.00 $ 30,354.13 Monthly* $ 251,971.20 $ 264,555.20 $ 277,784.00 $ 291,678.40 $ 298,958.40 $ 306,446.40 $ 314,100.80 $ 321,963.20 $ 329,992.00 $ 338,249.60 $ 346,715.20 $ 355,368.00 $ 364,249.60 Annually* 401 City Manager Exempt Executive $ 127.00 $ 127.00 Hourly $ 10,160.00 $ 10,160.00 Bi-weekly*
$ 22,013.33 $ 22,013.33 Monthly*
$ 264,160.00 $ 264,160.00 Annually*
501 Retired Annuitant - Extra Help $ 20.00 $ 100.00 Hourly Contract Position
Depends on Position Individuals in this Pay Grade may be placed anywhere between Step A and Step J Effective July 1, 2024
*Bi-weekly, Monthly, and Annual amounts are estimates. In the event of a discrepancy, the hourly rate will be used. 6 of 6
Approved at a regular City Counil Meeting on 06/12/2024 1055
PERSONNEL RULES &
REGULATIONS UPDATE
&
APPROVAL OF UPDATED
PAY PLAN
J U N E 1 2 , 2 0 2 4
1056
UPDATES
Personnel Rules
o Legislative Updates
o Cost of Living Adjustment Review Month
o Standby and Callback Pay
o Holiday Pay
o Comprehensive Annual Leave
o Flex Leave
o Safety Shoe Reimbursement
Cost of Living Adjustment
1057
LEGISLATIVE
UPDATES
SICK LEAVE
SB 616 – ALL EMPLOYEES MUST RECEIVE A
MINIMUM OF 40 HOURS OR FIVE DAYS,
WHICHEVER IS MORE, OF SICK LEAVE
EACH YEAR.
REPRODUCTIVE LOSS LEAVE
SB 848 – ALL EMPLOYEES ARE ENTITLED TO
UP TO FIVE DAYS OF PAID OR UNPAID
LEAVE AFTER SUFFERING A
REPRODUCTIVE LOSS.
1058
COST OF LIVING ADJUSTMENT
REVIEW MONTH
Current CPI for the Riverside area for the year-over-year adjustment for the month of May. Posted mid-June
by US Bureau of Labor Statistics. City budget for
the next year is approved in Mid-June each year.
Proposed Use CPI for Riverside area for the year-overyear adjustment for the month of March, which is posed mid-April.
Reason Year-over-year CPI is available every other month.
The March analysis provides enough time to
receive approval from City Council for the new Pay
Plan and include in the June budget update for the
new fiscal year.
1059
STANDBY AND CALLBACK PAY
Standby Nonexempt staff only, $35 per day, available to respond within a reasonable amount of time to time-sensitive incidents after normal working hours.
Callback Nonexempt staff only, workday is complete has already left the premises, 1.5x base rate, 2-hour minimum
Both standby and callback pay are standard compensation tools in the public sector, with one or both being used by all eight of our local comparative cities. 1060
HOLIDAY PAY –
WORKING THE HOLIDAY
Current Rules are silent regarding how pay is
received when working on a holiday.
Employees are able to bank their
holiday hours to use the time at a later
date.
Proposed Clarify that employees are paid 8
or 10 hours of holiday pay (based on
normal work schedule) and cannot be
banked. Holiday pay is received
regardless if the employee works on the
actual holiday. Time worked on the
holiday is paid according to normal
FLSA standards, this is in addition to the
1061
COMPREHENSIVE ANNUAL LEAVE
(CAL TIME)
Combine sick and
vacation leave for fulltime staff to create
CAL Time.
Provides greater
flexibility for
employees to use the
time they are accruing.
Months of
Service
Current
Sick
(Annually)
Current
Vacation
(Annually)
Total = CAL
Time
(Annually)
0 – 60 96 80 176
61 – 120 96 120 216
121 + 96 160 256
No change to combined accrual rate or cashout options. Cashout options allows the City to keep its liabilities within a reasonable amount.
Set cap at 480 hours for all employees.
There are four employees who would quickly hit the cap of 480 hours, or already have. Staff is recommending allowing a special one-time buy down for these employees.
1062
FLEX LEAVE
Exempt employee are not eligible for overtime.
Management Leave is currently provided to exempt staff in the Management and Executive classification groups in recognition of the need to attend after-hours meetings or complete work beyond their normal schedule.
There are classifications in the General classification group who are also exempt and often participate in after-hours meetings or work.
Changing Management Leave to Flex Leave will provide all exempt staff with additional leave in recognition of this additional work time. Flex Leave amounts will stay the same as Management Leave for Executive and Management staff and provide 20 hours of leave for General exempt staff.
Exempt
Classification
Group
Amount of Flex
Leave
(Annually)
Executive 80
Management 60
General 20
1063
SAFETY SHOE
REIMBURSEMENT
Certain positions require the use of safety shoes,
particularly when working on construction job
sites. The City currently reimburses for safety
shoes, as required by Cal/OSHA.
The updated Personnel Rules establishes a set
amount eligible for reimbursement on annual
basis, specifies which classifications are
approved for the reimbursement by the
Personnel Rules, and identifies the safety rating
required to qualify for reimbursement.