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Home My WebLink About04/11/2006 CC Reports I I ~ ! '1 .~ 21. , ! 22. . 23. ",....- MINUTES CITY COUNCIL MEETING CITY OF LAKE ELSINORE 183 NORTH MAIN STREET LAKE ELSINORE, CALIFORNIA TUESDAY, FEBRUARY 28, 2006 ****************************************************************** CALL TO ORDER The Regular City Council Meeting was called to order by Mayor Magee at 5 :00 p.m. ROLL CALL PRESENT: COUNCILMEMBERS: BUCKLEY, HICKMAN, KELLEY, SCHIFFNER, MAGEE '" ABSENT: COUNCILMEMBERS: NONE Also present were: City Manager Brady, City Attorney Leibold, Administrative Services Director Pressey, Community Development Director Preisendanz, Community Services Director Sapp, Lake & Aquatic Resources Director Kilroy, Information/Communications Manager Dennis, Building & Safety Manager Chipman, Recreation/Tourism Manager Fazzio, Police Chief Fetherolf, Fire Chief Gallegos, City Treasurer Weber and City Clerk Ray. CLOSED SESSION THE REGULAR CITY COUNCIL MEETING WAS RECESSED INTO CLOSED SESSION AT 5:00 P.M. RECONVENE IN PUBLIC SESSION (7:06 P.M.) PLEDGE OF ALLEGIANCE '" The Pledge of Allegiance was led by City Clerk Ray. Agenda Item No.k Page..\-- of.a1 Page 2 City Council Meeting Minutes - February 28, 2006 INVOCATION - MOMENT OF SILENT PRAYER ...., Mayor Magee led the meeting in a moment of silent prayer. ROLL CALL PRESENT: COUNCILMEMBERS: BUCKLEY, HICKMAN, KELLEY, SCHIFFNER, MAGEE ABSENT: COUNCILMEMBERS: NONE Also present were: City Manager Brady, City Attorney Leibold, Administrative Services Director Pressey, Community Development Director Preisendanz, Community Services Director Sapp, Lake & Aquatic Resources Director Kilroy, Information/Communications Manager Dennis, Building & Safety Manager Chipman, RecreationlTourism Manager Fazzio, Police Chief Fetherolf, Fire Chief Gallegos, City T'reasurer Weber and City Clerk Ray. CLOSED SESSION ....", A. CONFERENCE WITH LEGAL COUNSEL - ANTICIPATED LITIGATION - Significant exposure to litigation pursuant to subdivision (b) of Gov't Code g54956.9: (2 potential cases). B. CONFERENCE WITH REAL PROPERTY NEGOTIATOR (Gov't Code g54956.8): Property: A.P.N. 377-040-023,024 and 025 Negotiating parties: City of Lake Elsinore and Mjp 76 Inc Under negotiation: price and terms of payment PRESENTATION/CEREMONIALS A. Proclamation - Deputy of the Year (Corporal Hack) Mayor Magee called Corporal Hack forward. He commented that Corporal Hack was also awarded Deputy of the Year and was unable to attend the previous Council meeting. Agenda Item No. \ fA. Page~ ora ...., Page 3 City Council Meeting Minutes - February 28,2006 ,I""'" Police Chief Fetherolf commented that effective today Corporal Hack was promoted to Sergeant. He commented on Sergeant Hack's accomplishments and noted that Sergeant Hack had been serving the Lake Elsinore Community for 17 years. He also noted that Sergeant Hack had received the Medal of Valor. Mayor Magee read and presented the proclamation. Sergeant Hack commented that he had seen a lot of changes in the community. He noted that the City had improved tremendously. B. Proclamation - Black History Month Mayor Magee called NAACP President Loraine Warts forward. Mayor Magee read and presented the proclamation. Mrs. Warts dedicated the proclamation to long-time resident James Brown who had recently past away. She commented that he represented what Black America tried to do for this country. .......- Mayor Pro Tern Schiffner introduced Boy Scout Troop 430. He commented that they were attending the meeting so they could receive a citizenship badge. Mayor Magee invited the troops to the podium and allowed them to introduce themselves. PUBLIC COMMENTS - NON-AGENDIZED ITEMS -1 MINUTE No comments. CONSENT CALENDAR ITEMS Councilmember Buckley pulled Item No. 10 for discussion. MOVED BY BUCKLEY, SECONDED BY KELLEY AND CARRIED BY UNANIMOUS VOTE TO TABLE ITEM NO.5 AND APPROVE THE BALANCE OF THE CONSENT CALENDAR. 1. The following Minutes were approved: a. Joint City Council/RedevelopmentAgency Study Session - January 2, 2006. ......- Agenda Item No. \ 0... page~ofQj Page 4 City Council Meeting Minutes - February 28, 2006 2. Ratified Warrant List for February 15,2006. '-' 3. Rejected the claims listed and directed the City Clerk to send letters informing claimants of this decision. 4. Approved the program revisions as described in the staff report and to notify the LEUSD, Elsinore High School, Temescal Canyon High School and Lakeside High School. 6. Approved third amendmended agreement for the Axial Flow Pump Destratification System. 7. Awarded bid to GSE Lining Technology, Inc. in the amount of $63,803.09. 8. Approved the contract for security services at the Lake Elsinore Diamond Stadium with Executive Event Services. 9. Accepted the report of the Planning Commission. Authorized the City Manager to execute a letter of agreement formalizing the sale of the property. Authorized the Mayor to execute the grant deed to transfer title of ..., the Property to Pardee. 11. Authorized the City Manager to sign new professional service contracts with Scott Fazekas & Associates, Harris & Associates, Willdan and JAS Pacific Inc. in order to provide contract personnel and plan check services for the City as needed. 12. Approved and authorized the City Manager to execute the contract. 13. A warded the contract to Hardy and Harper Inc. for the Machado Street repairs. Authorized the City Manager to execute the contract with Hardy and Harper Inc. in the amount of $980,607.90. Approved the use of Measure-A Monies (Fund #112) in the amount of $649,602. Approved the use of Traffic Improvement Fees (TIF #205) in the amount of $649,602 for the SR-74/I-15 Interim Improvement Project. 14. Accepted the report of the Planning Commission that the City's acceptance and subsequent use of the Donated Property is consistent with the General Plan. Authorized the Mayor to execute the Donation Agreement. I '-'" Agenda Item No. fA. page~ of z.,Cf Page 5 City Council Meeting Minutes - February 28, 2006 ,,-- Item Pulled from the Consent Calendar 10. Request for no parking on Canyon Estates Drive between Summerhill Drive and Franklin Street. Mayor Magee introduced the item and deferred to City Manager Brady. City Manager Brady gave an overview of the item. He explained that traffic was increasing on Canyon Estates Drive as an alternate route; between Railroad Canyon Road and the 1-15 interchange; and along with the construction of the interim improvements that would be starting in the next couple of weeks, staff was recommending no parking be initiated to help with the safety and flow of traffic. Jason Leinen, 31520 Sagecrest Drive, thanked the Council and staff. He commented that the residents had a renewed faith in their local government. He indicated that the residents looked forward to resolving the other issues in the area. r-- Mayor Magee inquired, if approved, when the no parking would take effect. City Manager Brady estimated a 2-week timeframe. Mayor Magee explained that the Council discussed the issue at the 4:00 p.m. Study Session and if the item was approved, the Council encouraged the City Manager to have staff send letters to the adjacent businesses advising them of a change in their parking situation for the near future. MOVED BY KELLEY, SECONDED BY SCHIFFNER AND CARRIED BY UNANIMOUS VOTE TO ADOPT RESOLUTION NO. 2006-24 PROHIBITING PARKING ON BOTH SIDES OF CANYON ESTATES DRIVE FROM SUMMERHILL DRIVE TO FRANKLIN STREET. PUBLIC HEARINGS 21. Resolution approving the annexation of Territory and the levy of assessments for Lake Elsinore Landscape and Street Lighting District No. 1 r-- as Annexation Area No. 10 (Summerly). Agenda Item No. \ 0\ page~ Of~ Page 6 City Council Meeting Minutes - February 28, 2006 Mayor Magee opened the public hearing at 7: 18 p.m. ...." City Manager Brady indicated that Administrative Services Director Pressey would be presenting the item. He requested that the City Attorney announce the notice of the item. City Attorney Leibold announced that the notice had been published in accordance with the Landscape and Lighting Act of 1972 and proof of publication was on file in the City Clerk's office. Administrative Services Director Pressey gave an in-depth overview of the item. He noted that there were 464 street lights in this development. He indicated that the annual estimated cost was $86,065. He commented that each year Council had the opportunity to approve up to a 2% increase if needed; and any remaining balance of unused monies would roll forward to the next year. Mr. Pressey indicated that Councilmember Buckley had questioned the different maps for the three formations. He commented that the map in question was on Agenda Item No. 23, page 97 of 157. He noted the map ...." included a site that was excluded from that district. He deferred to Dennis Anderson to explain the difference in the maps. Dennis Anderson, Harris & Associates, explained that the Landscape and Lighting District was governed by a different set of laws and codes including the State Constitution. He indicated that under special assessment district proceedings, any property that would benefit from the improvements to be funded must be included in the district; therefore that boundary governed by those properties that benefit were substantially different than the other two annexations. He also commented that the Police and Fire District included all commercial and residential property. Mr. Anderson commented that the Bond District areas were excluded at the request of the developer; and normally they do not tax parks or school site properties since the City was prohibited by the Mello-Roos Act. Administrative Services Director Pressey explained that the map could not change on Item No. 21. He noted that Council had a choice to make a motion to start over on Item No. 22 and direct staff to start over by making""" Agenda Item NO.~ page!J2 of.a3' Page 7 City Council Meeting Minutes - February 28, 2006 /'"' the recommended change of the boundary map to exclude the area in the middle which was similar to Item No. 23. Mayor Magee requested testimony from the public. He inquired if there was anyone wishing to speak in favor or against the annexation. He also inquired if there was anyone that wished to speak at all. /'"' Councilmember Buckley explained that when Laing's back basin project was originally approved there was a school site in the center, which was exempt from the CFD for facilities. He indicated that the discussion was now about the LLMD and the Police and Fire CFD which were non-exempt. He indicated that he was concerned about preapproving. He further commented that schools and parks did not pay LLMD and Police and Fire. He questioned why they would be considered as part of the District. He indicated that it was different from other tracts because it could change if the school did not go in. He indicated that the developer could elect to build homes in that area. Councilmember Buckley requested clarification on if anything that benefited from the LLMD had. to be in the LLMD even if it did not pay into the LLMD. Mr. Anderson explained that under State Constitution, Article 13, they were required to assess public properties for special assessments. Mr. Anderson further explained that they would assign an assessment to schools, public properties, etc to the LLMD; but whether or not they paid was the question. Councilmember Buckley inquired what would happen if it turned out to be residential and not public properties; and if that would impact everyone else's LLMD fee. Mr. Anderson commented that it would not. He further explained that Council was approving an assessment rate for public property and residential property . Mayor Pro Tern Schiffuer commented that he understood that there would be no difference and it would not cause any problems the way it was presently done. ,,--.. Agenda Item No.k page::3:. of,~9 Page 8 City Council Meeting Minutes - February 28, 2006 MOVED BY SCHIFFNER, SECONDED BY mCKMAN TO ADOPT ~ RESOLUTION NO. 2006-25, APPROVING THE ANNEXATION OF TERRITORY AND THE LEVY OF ASSESSMENTS FOR LAKE ELSINORE LANDSCAPE AND STREET LIGHTING DISTRICT NO.1. Mayor Magee inquired if there were any property owners subject to the proposed assessments who wished to file a written protest. Mayor Magee closed the public hearing at 7:28 p.m. Mayor Magee directed City Clerk Ray to tabulate the ballots and announce if a majority protest had been made. City Clerk Ray tabulated the ballots and announced that there was no majority protest. THE FOREGOING MOTION CARRIED BY UNANIMOUS VOTE. 22. Resolution determining the validity of prior proceedings relating to annexation of property into City of Lake Elsinore Community Facilities District No. 2003-1 (Law Enforcement, Fire and Paramedic Services); Call a ~ Special Election; canvas election results; authorizing levy of Special Taxes for CFD 2003-1 Annexation Area No. 17 (Summerly). Mayor Magee opened the public hearing at 7:29 p.m. City Manager Brady indicated that Administrative Services Director Pressey would be presenting the item. He requested that the City Attorney announce the notice of the item. City Attorney Leibold announced that the notice had been published in accordance with the Mello-Roos Community Facilities Act of 1982 and proof of publication was on file in the City Clerk's office. Administrative Services Director Pressey gave an in-depth overview of the item. He indicated that it would pay for a portion of the increase in the Police, Fire and Paramedic cost in the City. Each property owner would be assessed $318 per home in the Laing Development in which they were building 1,484 single family homes. ~ Agenda Item No. \ U\. page1)or3cr Page 9 City Council Meeting Minutes - February 28, 2006 ,-- Mayor Magee requested testimony from the public. He inquired if there was anyone wishing to speak in favor or against the district formation. He also inquired if there was anyone that wished to speak at all. Councilmember Buckley commented that the facilities CFD should match the Police and Fire CFD. Councilmember Buckley clarified that the golf course did not have to be included in the LLMD or the Police and Fire CFD. Mr. Anderson confirmed and commented that in their analysis the golf course did not benefit from the improvements. MOVED BY BUCKLEY NOT TO ADOPT RESOLUTION NO. 2006-26 AND DIRECT STAFF TO REDO THE ITEM SO THE MAPS MATCHED. Councilmember Hickman questioned what had to be changed. ,,- Administrative Services Director Pressey commented that Councilmember Buckley was proposing to exclude the area that was identified for a park and school site. Councilmember Hickman questioned if there were homes allocated when staff came up with the figures. Mr. Pressey confirmed he did not. He explained that if it came back and the developer wanted to put in homes under this method there would not be any annexation since the homes would get assessed and no changes would need to be made. He indicated that they were excluded the site would be annexed in later. Councilmember Hickman asked Mr. Pressey his preference. Mr. Pressey commented that staffwas consistent with all 16 other annexations. He further commented that he felt it was appropriate to move forward, although he did understand Councilmember Buckley's concerns. ~ Mayor Magee clarified that if the school was not built on the site and more homes were approved at a later date, the assessment district for public safety would already be in place and there would be no need to bring the item back to Council. Agenda Item No. \ 0\ page~Of~ Page 10 City Council Meeting Minutes - February 28, 2006 Mr. Pressey confirmed. ,...." City Treasurer Weber inquired where the money would come from to build the infrastructure for those homes if the school was not built and the houses were. Mr. Anderson indicated that the infrastructure would already be placed. City Treasurer Weber commented that the property was currently set up as a possible school site which meant the developer would not pay anything; and allowed the developer to build houses later and not pay any back taxes on the open land. He indicated that it was not fair to the other homeowners. Mayor Pro Tern Schiffuer made a substitute motion. MOVED BY SCHIFFNER, SECONDED BY KELLEY TO ADOPT RESOLUTION NO. 2006-26, DETERMINING THE VALIDITY OF PRIOR PROCEEDINGS. Councilmember Hickman commented that a school would need to be built in '-'" that area. He indicated that there would be too many homes and children in that area. He indicated that it would not make sense for them to not want to build a school. Councilmember Buckley's motion failed for lack of a second. Mayor Magee inquired if there were any property owners subject to the proposed special taxes who wished to file a written protest. Mayor Magee closed the public hearing at 7:40 p.m. THE FOREGOING SUBSTITUTE MOTION CARRIED BY A VOTE OF 4- 1 WITH BUCKLEY CASTING THE DISSENTING VOTE. MOVED BY KELLEY, SECONDED BY SCHIFFNER AND CARRIED BY A VOTE OF 4-1, WITH BUCKLEY CASTING THE DISSENTING VOTE, TO ADOPT RESOLUTION NO. 2006-27 CALLING FOR A SPECIAL ELECTION. ......, Agenda Item No. lo Pagen of 31 Page 11 City Council Meeting Minutes - February 28, 2006 ,.- Mayor Magee directed City Clerk Ray to tabulate the ballots and announce if two-thirds of the votes cast were in favor of the propositions. City Clerk Ray tabulated the ballots and announced that two-thirds of the votes cast were in favor. MOVED BY SCHIFFNER, SECONDED BY KELLEY AND CARRIED BY A VOTE OF 4-1, WITH BUCKLEY CASTING THE DISSENTING VOTE, TO ADOPT RESOLUTION NO. 2006-28, ORDERING CANVASSING OF THE ELECTION RESULTS. MOVED BY SCHIFFNER, SECONDED BY KELLEY AND CARRIED BY A VOTE OF 4-1, WITH BUCKLEY CASTING THE DISSENTING VOTE, TO CONDUCT FIRST READING OF ORDINANCE NO. 1170, AUTHORIZING THE LEVY OF A SPECIAL TAX. ORDINANCE NO. 1170 ,'-' AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, ACTING AS THE LEGISLATIVE BODY OF CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2003-1 (LAW ENFORCEMENT, FIRE AND PARAMEDIC SERVICES) AUTHORIZING THE LEVY OF A SPECIAL TAX WITHIN ANNEXATION AREA NO. 17 (SUMMERL Y) ANNEXED TO SAID DISTRICT. UPON THE FOLLOWING ROLL CALL VOTE: AYES: COUNCILMEMBERS: HICKMAN, KELLEY, SCHIFFNER, MAGEE NOES: COUNCILMEMBERS: BUCKLEY ABSENT: COUNCILMEMBERS: NONE ABSTAIN: COUNCILMEMBERS: NONE ,,-- Agenda Item No. \ 0\ pageU- Of~ Page 12 City Council Meeting Minutes - February 28, 2006 23. Formation ofCFD 2006-1 (Summerly); call a Special Election; canvas election results; authorizing levy of Special Taxes. ......, Mayor Magee opened the public hearing at 7:45 p.m. City Manager Brady indicated that Administrative Services Director Pressey would be presenting the item. He requested that the City Attorney announce the notice of the item. City Attorney Leibold announced that the notice had been published in accordance with the Mello-Roos Community Facilities Act of 1982 and proof of publication was on file in the City Clerk's office. Administrative Services Director. Pressey gave an in-depth overview of the item. He indicated that it was the facilties CFD. He indicated that there would be bonds issued not to exceed the amount of $85 million. He noted there were three improvement areas which were identified in the map on page 4 of 157. He indicated that the average special tax was $2,603. Mayor Magee requested testimony from the public. He inquired if there was "WI' anyone wishing to speak in favor or against the district formation. He also inquired if there was anyone that wished to speak at all. MOVED BY SCHIFFNER, SECONDED BY KELLEY TO ADOPT RESOLUTION NO. 2006-29, APPROVING THE JOINT FACILITIES AGREEMENT AND A FUNDING, CONSTRUCTION AND ACQUISITION AGREEMENT. Mayor Magee inquired if there were any property owners subject to the proposed special taxes who wished to file a written protest. Mayor Magee closed the public hearing at 7:47 p.m. Councilmember Hickman commented that the developer was looking for a bond issuance of $85 million, but the cost estimates were $94 million, which meant the developer was putting in an extra $9 million of their own money. He noted that they were striving to do what was best for the City. '""" Agenda Item No. \ ~ pageJ-2. Of~ Page 13 City Council Meeting Minutes - February 28, 2006 ",.-., THE FOREGOING MOTION CARRIED BY A VOTE OF 4-1 WITH BUCKLEY ABSTAINING. MOVED BY KELLEY, SECONDED BY SCHIFFNER AND CARRIED BY A VOTE OF 4-1 WITH BUCKLEY CASTING THE ABSTAINING VOTE TO ADOPT RESOLUTION NO. 2006-30, APPROVING THE FORMATION OF THE DISTRICT. MOVED BY SCHIFFNER, SECONDED BY HICKMAN AND CARRIED BY A VOTE OF 4-1, WITH BUCKLEY CASTING THE ABSTAINING VOTE, TO ADOPT RESOLUTION NO. 2006-31 TO INCUR BONDED INDEBTEDNESS AND CALL A SPECIAL ELECTION. Mayor Magee directed City Clerk Ray to tabulate the ballots and announce if two'-thirds of the votes cast were in favor of the propositions. City Clerk Ray tabulated the ballots and announced that two-thirds of the votes cast were in favor. ",--. MOVED BY SCHIFFNER, SECONDED BY KELLEY AND CARRIED BY A VOTE OF 4-1, WITH BUCKLEY CASTING THE ABSTAINING VOTE, TO ADOPT RESOLUTION NO. 2006-32 ORDERING CANVASSING OF THE ELECTION RESULTS. MOVED BY SCHIFFNER, SECONDED BY KELLEY TO CONDUCT THE FIRST READING OF ORDINANCE NO. 1171 AUTHORIZING THE LEVY OF A SERVICES SPECIAL TAX AND SPECIAL TAX. ORDINANCE NO. 1171 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, AUTHORIZING THE LEVY OF A SERVICES SPECIAL TAX AND A SPECIAL TAX. ",--. Agenda Item NO.~ page-l3of-.:23 Page 14 City Council Meeting Minutes - February 28, 2006 UPON THE FOLLOWING ROLL CALL VOTE: ......", AYES: COUNCILMEMBERS: HICKMAN, KELLEY, SCHIFFNER, MAGEE NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: NONE ABSTAIN: COUNCILMEMBERS: BUCKLEY Councilmember Buckley gave an explanation for the way he voted. He indicated that he felt that in the future it was important for the City to retain as much leverage as possible for that particular site in question. City Attorney Leibold clarified that on Item No. 23, Councilmember Buckley's vote on each motion should be an abstention, to reflect that each of the items was approved 4-0 with 1 abstention. 24. Formation ofCFD 2006-3 (La Strada). ......", Mayor Magee opened the public hearing at 7:51 p.m. Mayor Magee requested testimony from the public. He inquired if there was anyone wishing to speak in favor or against the district formation. He also inquired if there was anyone that wished to speak at all. City Attorney Leibold clarified that the public hearing would remain open. MOVED BY BUCKLEY, SECONDED BY SCHIFFNER AND CARRIED BY UNANIMOUS VOTE TO CONTINUE THE PUBLIC HEARING TO MARCH 28, 2006. 25. Mitigated Negative Declaration No. 2005-05, Zone Change No. 2005-02 and Tentative Tract Map No. 33486. Community Development Director Preisendanz gave an in-depth overview of the item. He indicated the location of the project. He noted that the Planning Commission recommended approval of the item. ......", Agenda Item NO.~ page~Of~ Page 15 City Council Meeting Minutes - February 28, 2006 ,~ Dave Leonard, Corman Leigh, commented that the project's average lot size was 9,000 square feet. He indicated they were pleased with the proposal. MOVED BY SCHIFFNER, SECONDED BY HICKMAN AND CARRIED BY A VOTE OF 4-0, WITH BUCKLEY ABSENT, TO ADOPT RESOLUTION NO. 2006-33 ADOPTING THE MITIGATED NEGATIVE DECLARATION/MITIGATION MONITORING PLAN NO. 2005-05. MOVED BY SCHIFFNER, SECONDED BY HICKMAN TO CONDUCT THE FIRST READING OF ORDINANCE NO. 1172 APPROVING ZONE CHANGE NO. 2005-02. ORDINANCE NO. 1172 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, APPROVING ZONE CHANGE NO. 2005-02 CHANGING THE ZONING DESIGNATION OF THE PARCEL(S) SPECIFICALLY ~ DESCRIBED AS ASSESSOR PARCEL NUMBER'S 379-150- 001, 002, 041, 042, 043 & 044 FROM R-E (ESTATE SINGLE- FAMILY RESIDENTIAL DISTRICT) TO R-l (SINGLE- FAMILY RESIDENTIAL DISTRICT) UNDER THE ZONING ORDINANCE. UPON THE FOLLOWING ROLL CALL VOTE: AYES: COUNCILMEMBERS: HICKMAN, KELLEY, SCHIFFNER, MAGEE NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: BUCKLEY ABSTAIN: COUNCILMEMBERS: NONE MOVED BY SCHIFFNER, SECONDED BY KELLEY WITH A VOTE OF 4-1, WITH BUCKLEY ABSENT, TO ADOPT RESOLUTION NO. 2006-34 ",.- APPROVING TENTATIVE TRACT MAP NO. 33486. Agenda Item NO..l.0 page\Cof3i Page 16 City Council Meeting Minutes - February 28, 2006 GENERAL CONDITIONS ~ 1. The applicant shall defend (with counsel acceptable to the City), indemnify, and hold harmless the City, its Official, Officers, Employees, and Agents from any claim, action, or proceeding against the City, its Official, Officers, Employees, or Agents to attach, set aside, void, or annul an approval of the City, its advisory agencies, appeal boards, or legislative body concerning the Tentative Tract Map, which action is bought within the time period provided for in California Government Code Sections 65009 and/or 66499.37, and Public Resources Code Section 21167. The City will prompdy notify the Applicant of any such claim, action, or proceeding against the City and will cooperate fully with the defense. If the City fails to prompdy notify the Applicant of any such claim, or proceeding, the Applicant shall not, thereafter, be responsible to defend, indemnify, or hold harmless the City. 2. The applicant shall submit a money order, cashier's check or check, made payable to the County Recorder, for filing of a Certification of Fee Exemption "De Minimis Impact Finding." in the amount of $64.00 to the Planning Division within 48 hours of the City Council approval date for the required Environmental Filing. 3. The applicant shall comply with those mitigation measures identified ill the Mitigated Negative Declaration No. 2005-05/Mitigation Monitoring Plan. TENTATIVE TRACT MAP NO. 33486 ~ 4. The Tentative Tract Map will expire two (2) years from date of approval unless within that period of time CC&R's, if required, and an appropriate instrument has been filed and recorded with the County Recorder, or an extension of time is granted by the City of Lake Elsinore City Council in accordance with the Subdivision Map Act. 5. The Tentative Tract Map shall comply with the State of California Subdivision Map Act and shall comply with all applicable requirements of the Lake Elsinore Municipal Code, Tide 16 unless modified by approved Conditions of Approval. 6. Prior to final certificate of occupancy of the Tentative Tract Map, the improvements specified herein and recommended approval by the Planning Commission and approved by the City Council shall be installed, or agreements for said improvements, shall be submitted to the City for approval by the City Engineer, and all other stated conditions shall be complied with. All uncompleted improvements must be bonded for as part of the agreements. 7. In the event an association or other legally responsible entity fail to maintain applicable improvements in such a manner as to cause same to constitute a public nuisance, said City may, upon proper notice and hearing, institute summary abatement procedures and impose a lien for the costs of such abatement upon said common area, individual units or whole thereof as provided by law. '-.Jf Agenda Item No. \ 0\. Pag~ oC13 Page 17 City Council Meeting Minutes - February 28, 2006 ,-... 8. Prior to construction of the proposed detention basin, a Fencing Plan shall be submitted for review and approval by the Planning Division. 9. Prior to Final Map recordation, in the event that an LLMD or other acceptable entity is not formed, the applicant shall initiate and complete the formation of a Homeowner's Association, approved by the City, recorded and funded in place. All Association documents shall be approved by the City and recorded, such as Articles of Incorporation for the Association, and Covenants, Conditions, and Restrictions (CC&R's). 10. Membership in the Home Owner's Association, if required, shall be mandatory for each buyer and any successive buyer. ADMINISTRATIVE SERVICES 11. Prior to approval of the Final Map, Parcel Map, Site Development Plan, or Special Use Permit (as applicable), the applicant shall annex into Community Facilities District 2003- 01 to offset the annual negative fiscal impacts of the project on public safety operations and maintenance issues in the City. ,~ 12. Prior to approval of the Final Map, Parcel Map, Site Development Plan, or Special Use Permit ( as applicable), the applicant shall annex into Lighting and Landscaping Maintenance District No.1 to offset the annual negative fiscal impacts of the project on public right-of-way landscaped areas to be maintained by the City and for street lights in the public right-of-way for which the City will pay for electricity and a maintenance fee to Southern California Edison. 13. Upon completion of the Fire Station Impact Study and other impact fee studies, Developer shall pay impact fee. 14. Prior to approval of the Final Map, Parcel Map, Site Development Plan, or Special Use Permit (as applicable), the applicant shall form a Mello-Roos Community Facility District to fund the on-going operation and maintenance of the new parks, parkways, open space and public storm drains constructed within the development and federal NPDES requirements to offset the annual negative fiscal impacts ofthe project. ENGINEERING DIVISION General Requirements: 15. A grading plan signed and stamped by a Calif. Registered Civil Engineer shall be required if the grading exceeds 50 cubic yards or the existing flow pattern is substantially modified as determined by the City Engineer. ~ Agenda Item NO.~ Page8 or&} Page 18 City Council Meeting Minutes - February 28, 2006 16. Prior to commencement of grading operations, if off-site soils transport is required, applicant to provide the City with a map of all proposed haul routes to be used for movement of export material. Such routes shall be subject to the review and approval of the City Engineer. ...., 17. All grading shall be done under the supervision of a geotechnical engineer and he shall certify all slopes steeper than 2 to 1 for stability and proper erosion control. All manufactured slopes greater than 30 ft. in height shall be contoured. 18. Tract Phasing Plan shall be approved by the City Engineer. Bond public improvements for each Phase as approved by the City Engineer. Secondary access shall be provided for each phase. 19. An Encroachment Permit shall be obtained prior to any work on City right-of-way. 20. All utilities except electrical over 12 KV shall be placed underground, as approved by the serving utility. Arrangements for relocation of utility company facilities (power poles, vaults, etc.) out of the roadway or alley shall be the responsibility of the property owner or his agent. 21. Underground water rights shall be dedicated to the City pursuant to the provisions of Section 16.52.030 (LEMC), and consistent with the City's agreement with the Elsinore Valley Municipal Water District. ...., 22. The applicant shall install permanent bench marks to Riverside County Standards and at a location to be determined by City Engineer. 23. 19 Applicant shall pay all applicable development fees, including but not all inclusive: TUMF, MSHCP, TIF and area drainage fees. 24. 10 year storm runoff shall be contained within the curb and the 100 year storm runoff shall be contained within the street right-of-way. When either of these criteria is exceeded, drainage facilities shall be provided. 25. Applicant shall protect all downstream properties from damages caused by alteration of the drainage patterns, i.e., concentrations or diversion of flow. Protection shall be provided by constructing adequate drainage facilities including enlarging existing facilities and/or by securing a drainage easement. A maintenance mechanism shall be in place for any private drainage facilities constructed on-site or off-site. Any grading or drainage onto private off site or adjacent property shall require a written permission to grade and/or a permission to drain letter from the affected landowner. 26. All drainage facilities in this tract shall be constructed to Riverside County Flood Control District Standards. An access road for maintenance to detention/water quality basins shall be provided. Agenda Item NO.~ pageBOf~ ...., Page 19 City Council Meeting Minutes - February 28, 2006 ,-.... 27. All compaction reports, grade certifications, monument certifications (with tie notes delineated on 8 t;z" x 11" Mylar) shall be submitted to the Engineering Division before final inspection of public works improvements will be scheduled and approved. 28. A precise survey with closures for boundaries and all lots shall be provided per the LEMC. 29. Street improvements including street lighting, traffic signals, and traffic signing and striping shall be required as part of this project. The improvements shall be prepared by a registered civil engineer and shall meet city and/or riverside county standards. 30. Street lighting and landscaping on public right-of-way shall be maintained by a maintenance assessment district. 31. All open space and slopes and detention basin shall be owned and maintained by an LLMD. If an LLMD or other appropriate entity cannot be formed, then maintenance shall be provided by a home owner's association. An access road for maintenance shall be provided. 32. In accordance with the City's Franchise Agreement for waste disposal & recycling, the applicant shall be required to contract with CR&R Inc. for removal and disposal of all waste material, debris, vegetation and other rubbish generated during cleaning, demolition, clear and grubbing or all other phases of construction. .,--.. 33. Protect palm trees in place, or contact the Community Services of City of Lake Elsinore for Palm Tree Preservation Program, LEMC 5.78 Ordinance 1044. 34. On-site drainage shall be conveyed to a public facility, accepted by adjacent property owners by a letter of drainage acceptance, or conveyed to a drainage easement. 35. All natural drainage traversing the site shall be conveyed through the site, or shall be collected and conveyed by a method approved by the City Engineer. 36. Roof drains shall not be allowed to outlet directly through coring in the street curb. 37. Roofs should drain to a landscaped area. 38. Applicant shall comply with all NPDES requirements in effect; including the submittal of a Water Quality Management Plan (WQMP) as required per the Santa Ana Regional Water Quality Control Board. 39. Education guidelines and Best Management Practices (BMP) shall be provided to residents of the development in the use of herbicides, pesticides, fertilizers as well as other environmental awareness education materials on good housekeeping practices that contribute to protection of storm water quality in the Riverside county NPDES Drainage Area Management Plan. ,"""'" Agenda Item No. \ ~ pageB Of;31 Page 20 City Council Meeting Minutes - February 28, 2006 Prior to Approval of fmal Map, unless other timing is indicated, the subdivider shall complete the following or have plans submitted and approved, agreements executed and securities posted: ,....." 40. Applicant shall form or annex into an ILMD. If an LLMD or other appropriate entity cannot be formed, then the applicant shall record CC & R's for maintenance of, the detention basin and street lighting within the project. The CC & R's shall be approved by the Planning Director prior to recordation of final map. 41. Applicant shall enter into an agreement with the City for the construction of public works improvements and shall post the appropriate bonds prior to final map approval. 42. Applicant shall obtain all necessary off-site easements for off-site grading from the adjacent property owners prior to fmal map approval. 43. All Public Works requirements shall be complied with as a condition of development as specified in the Lake Elsinore Municipal Code (LEMC) prior to final map approval. 44. Make an offer of dedication for all public streets and easements required by these conditions or shown on the Tentative Map. All land so offered shall be granted to the City free and clear of all liens and encumbrances and without cost to the city. 45. Some of the improvements shown on the Map and/or required by these conditions could be located off-site on property which neither the City nor the subdivider may have no tide or ,....." interest to permit the improvements to be made without acquisition of tide or interest. The subdivider shall pay all costs for acquisition of tide or interest. 46. A Calif. Registered Civil Engineer shall prepare street and drainage improvement plans and specifications. Improvements shall be designed and constructed to Riverside County Road Department Standards, latest edition, and City Codes (LEMC 12.04 and 16.34). Street improvement plans shall show existing and future profiles at centerline of street, at top of curb and at centerline of the alley. The profiles and contours will extend to 50' beyond the property limits. 47. Interior streets shall be dedicated and improved to public residential street standards (40'/60') or as shown in the map. 48. Construct a traffic signal at Terra Cotta Road and Lakeshore Drive as required by the Traffic Study contained within the Mitigated Monitoring Program. Note that this location is covered under the TlF program. The applicant may ask for a reimbursement agreement subject to the approval of the City Engineer. 49. Construct half-width street improvements along the project frontage on Machado Street. The improvements include ac pavement, ac transitions, curb and gutter, sidewalk, street lighting, and signing striping. ,....." Agenda Item NO.~ Page~of -31 Page 21 City Council Meeting Minutes - February 28, 2006 '" 50. Construct a paved pedestrian connection that provides access from Terra Cotta Road to the ac paved road at the northeast comer of the property. 51. Install survey monument at Terra Cotta Road and "A" Street. 52. Contribute on a fair share basis to the cost of traffic improvements as listed in Table 6-1 of the Traffic Study prepared by Urban Crossroads dated October 10,2005. Prior to Issuance of a Grading Permit: 53. Submit grading plans with appropriate security, Hydrology and Hydraulic Reports prepared by a Registered Civil Engineer for approval by the City Engineer. Developer shall mitigate increased in runoff, flooding and/or erosion downstream caused by development of the site and/ or diversion of drainage. 54. Provide soils, geology and seismic report including street design recommendations. Provide ftnal soils report showing compliance with recommendations. 55. An Alquist-Priolo study shall be performed on the site to identify any hidden earthquake faults and/or liquefaction zones present on-site. ,~ 56. The applicant shall obtain all necessary off-site easements for off-site grading and/or drainage acceptance from the adjacent property owners prior to grading permit issuance. 57. Applicant to provide erosion control measures as part of their grading plan. The applicant shall contribute to protection of storm water quality and meet the goals of the BMP in Supplement "A" in the Riverside County NPDES Drainage Area Management Plan. 58. Applicant shall provide the city with proof of his having filed a Notice of Intent with the Regional Water Quality Control Board for the National Pollutant Discharge Elimination System (NPDES) program with a storm water pollution prevention plan prior to issuance of grading permits. The applicant shall provide a SWPPP for post construction, which describes BMP's that will be implemented for the development and including maintenance responsibilities. Prior to Issuance of Building Permit: 59. All Public Works requirements shall be complied with as a condition of development as specified in the Lake Elsinore Municipal Code (LEMC) prior to building permit. 60. Street dedications and abandonment shall be processed and approved prior to building permit issuance. 61. Submit a "Will Serve" letter to the City Engineering Division from the applicable water agency stating that water and sewer arrangements have been made for this project and ,-- specify the technical data for the water service at the location. such as water pressure and volume etc. Submit this letter prior to applying for a building permit. Agenda Item No. \ ~ Page.2L Of~ Page 22 City Council Meeting Minutes - February 28, 2006 62. Pay all Capital Improvement Mitigation and Plan Check fees (LEMC 16.34). ....." 63. Pay the fair share cost of Traffic Improvements required in the traffic study. Prior to Occupancy: 64. Pay all fees and meet requirements of an encroachment permit issued by the Engineering Division for construction of public works improvements (LEMC12.08, Res.83-78). All fees and requirements for an encroachment permit shall be fulfilled before Certificate of Occupancy. 65. The improvements specified herein and approved by the Planning Commission and the City Council shall be installed, or agreements for said improvements, shall be submitted to the City for approval by the City Engineer, and all other stated conditions shall be complied with. All uncompleted improvements must be bonded for as part of the agreements. 66. All compaction reports, grade certifications, monument certifications (with tie notes delineated on 8 1/2" x 11" Mylar) shall be submitted to the Engineering Division before final inspection of off-site improvements will be scheduled and approved. 67. All public improvements shall be completed in accordance with the approved plans to the satisfaction of the City Engineer. 68. All traffic signing and striping shall be completed in accordance with the approved plans to ......, the satisfaction of the City Traffic Engineer. 69. Water and sewer improvements shall be completed in accordance with Water District requirements. 70. The Traffic Signal at Terra Cotta Road and Lakeshore Drive shall be completed and in operation as required by the Traffic Study contained within the Mitigation Monitoring Program. BUSINESS ITEMS 31. Second Reading - Ordinance No. 1168 - Authorizing the levy of a Special Tax. MOVED BY KELLEY, SECONDED BY SCIDFFNER TO ADOPT ORDINANCE NO. 1168 AUTHORIZING THE LEVY OF A SPECIAL TAX. ......, \ Agenda Item NO.~ Page2Qof E. Page 23 City Council Meeting Minutes - February 28, 2006 ,"-- ORDINANCE NO. 1168 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, ACTING AS THE LEGISLATIVE BODY OF CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2003-1 (LAW ENFORCEMENT, FIRE AND PARAMEDIC SERVICES) AUTHORIZING THE LEVY OF A SPECIAL TAX WITHIN ANNEXATION AREA NO. 15 (LA STRADA) ANNEXED TO SAID DISTRICT. UPON THE FOLLOWING ROLL CALL VOTE: AYES: COUNCILMEMBERS: HICKMAN, KELLEY, SCHIFFNER, MAGEE NOES: COUNCILMEMBERS: NONE ~ ABSENT: COUNCILMEMBERS: BUCKLEY ABSTAIN: COUNCILMEMBERS: NONE 32. Second Reading - Ordinance No. 1169 - Authorizing the levy of a Special Tax. MOVED BY KELLEY, SECONDED BY SCHIFFNER TO ADOPT ORDINANCE NO. 1169 AUTHORIZING THE LEVY OF A SPECIAL TAX. ORDINANCE NO. 1169 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, ACTING AS THE LEGISLATIVE BODY OF CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2003-1 (LAW ENFORCEMENT, FIRE AND PARAMEDIC SERVICES) AUTHORIZING THE LEVY OF A SPECIAL TAX WITHIN ANNEXATION AREA NO. 16 (TR 32129) ANNEXED TO SAID DISTRICT. ,,-- Agenda Item NO'~ Page~f .251 Page 24 City Council Meeting Minutes - February 28, 2006 UPON mE FOLLOWING ROLL CALL VOTE: '-" AYES: COUNCILMEMBERS: HICKMAN, KELLEY, SCHIFFNER, MAGEE NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: BUCKLEY ABSTAIN: COUNCILMEMBERS: NONE 33. Adoption of Ordinance prohibiting medical marijuana dispensaries in the City of Lake Elsinore. Mayor Magee introduced the item and deferred to City Manager Brady. City Manager Brady gave a brief overview of the item and deferred to Police Chief Fetherolf for the presentation. Police Chief Feterholf gave some background on the item. He indicated that '-" he had requested this ordinance which was prepared by the City Attorney's Office. He explained that the United States Code 841, known as the Control Substances Act, specifically prohibited the use and/or distribution of marijuana. He commented that all states had passed laws in conformance with federal law regarding the prohibition of the possession, sale, usage, etc. of marijuana. He indicated that police officers make arrests based on state laws, which conformed with the federal law prohibiting the use of marijuana. He commented that in 1996, voters of the State of California passed Proposition 215 known as the Compassionate Use Act of 1996. He noted that Act permitted the possession of small amounts and growing small amounts of marijuana under very specific circumstances for persons deemed medically needy by a qualified physician to possess and use marijuana. He further explained that in 2004 the California Senate passed Senate Bill 420 called the Medical Marijuana Program. He indicated that the problem presented by law enforcement was a federal law that prohibited the use of marijuana and state law that permitted the use of marijuana. He indicated that California police officers have a duty to uphold the law of the City, County, State and the Federal Government. He commented that in a decision by the Supreme Court in Raich v. Gonzales, they addressed the ,...." Agenda Item No. \ CA. page2:! of 33 Page 25 City Council Meeting Minutes - February 28, 2006 ,-. issue and confirmed that the Controlled Substances Act did not contain a Compassionate Use exemption; and therefore was still a violation of federal law to possess or distribute marijuana even for medical purposes. He commented that marijuana dispensaries were popping up all around the State. He indicated that the County of Riverside started issuing cards to individuals that qualified under state law to be able to purchase and possess the small amounts. He indicated that a qualified individual could possess 8 ounces of dry marijuana and grow 6 mature plants or 12 immature plants. He indicated that the County of Riverside had experienced some problems associated with medical marijuana dispensaries. He noted his recommendation to the City Council. He also noted some land use issues that involved medical marijuana and deferred to City Attorney Leibold. ,-. City Attorney Leibold explained that the proposed Ordinance focused on the City's police power and land use zoning authority. She noted that the intent of the Ordinance was not to infringe upon the rights provided under state law or to conflict with areas of state law. She indicated that by the City issuing any permit for a dispensary could be foreseen as aiding and abiding a federal crime. She commented that the City Council and City staffhad received numerous emails regarding the issue; and noted that one of their concerns was that the City could not and should not regulate or attempt to regulate in a manner that was inconsistent and conflicted with state law. City Attorney Leibold commented that she had discussed the issue with Police Chief Fetherolf and that they proposed the addition of the following sentence into Section 3 - "Nothing in this Chapter 17.69 shall be interpreted or enforced in a manner that conflicts with applicable state law." Ron LaPere, 16867 Wells Street, waived is request to speak on the item. David Travers, 15091 Joy Street, was not present at the time he was called forward to speak. ---- Lavonne Victor, 45826 Palimetto Way, commented that she was a resident of Riverside County. She noted that she understood the concerns of law enforcement, states and cities concerning that law. She indicated that there was a lot of improvements that needed to be made in the Health Department of Health Agencies. She indicated that she had also spoken on panels regarding drug addiction and the destruction it did to families. She indicated Agenda Item No. \ ~ page~f~ Page 26 City Council Meeting Minutes - February 28, 2006 that her doctor's recommendation for the use of cannabis has allowed her to ......" get rid of a lot of chemicals prescribed to her that had affected her body. She noted there was a difference of opinions surrounding medical marijuana. She noted California Constitution Section 3.5, Article 3. Martin Victor, 45026 Palmetto Way, provided Council with a copy of Temecula's ordinance regarding medical marijuana dispensaries. He commented that the Supreme Court never said that California's law was unconstitutional. He indicated that the state law did not go into dispensaries, but did address cooperatives and collectives. He indicated that in all the places they had traveled, there had only been one individual that he encountered that was against cooperative and collectives. He commented that it worked and it helped sick people. He noted that there was a dispensary in Palm Desert and there was not anyone in the neighborhood that had a problem with the facility. He noted that before the State of California has issued identification cards, there was only a recommendation from a physician. Douglas Lanphere, Lake Elsinore, commented that he was an advocate for medical marijuana patients. He indicated that he participated with the ......" Riverside County Department of Social Services in the implementation of Senate Bill 420, codified into Health & Safety Code section 11362.775. He indicated that the County started issuing medical marijuana ID cards on December 1 S\ 2005. He noted the rights of patients that were issued the ID cards. He noted the differences between dispensaries and collective and cooperative cultivation. He noted that proposed Ordinance 1173, page 3, read "Cooperative commonly known as medically marijuana dispensaries". He indicated that he objected to the grouping of cooperatives with dispensaries. He requested that Council amend the findings of fact to reflect the clarification. He noted that proposed Ordinance 1173 defined locations as "Any facility or location where medical marijuana is made available to and/or distributed by one of the following: primary caregiver, qualified patient or a patient with an identification card." He indicated that the description was too vague. Stephen Roper, 15150 Grand Ave, commented that he was a resident as well as a prescribed marijuana user. He commented that the issue was about living, not about the law. """""m Agenda Item NO.-h page.Aa of 31 Page 27 City Council Meeting Minutes - February 28, 2006 ,- David Travers, 15081 Joy Street, apologized for being absent earlier and thanked the Mayor for allowing him to address Council. He noted he was a marijuana patient. He noted that he had to drive to Palm Springs for his medication. He indicated that Police Chief Fetherolf believed that from a law enforcement stand point, the Federal Government superceded local and state laws. He indicated that if that was the case, then there were a lot of laws they were forgetting to enforce. He indicated that marijuana patients should not have to travel that far. ,- City Attorney Leibold commented that Mr. Lanphere did correctly speak from the Health & Safety Code. She commented that the proposed language recognizing that it was not the intent of the proposed ordinance to be interpreted or enforced in a manner that it was inconsistent and conflicted with state law. She indicated that she would not object to another clarification. She noted in the second recital with the language of opening businesses or cooperatives commonly known as medical marijuana dispensaries. She noted there would be a deletion of the words "or cooperatives" to avoid ambiguity, so the Ordinance read "Whereas, the Act does not require or provide for the opening of businesses commonly known as Medical Marijuana Dispensaries." Mayor Magee inquired if that was consistent with the goal of Police Chief Fetherolf. Police Chief Fetherolf confirmed. Councilmember Kelley inquired if there were any dispensaries within the City. Police Chief Fetherolf commented that there were none. Councilmember Kelley inquired ifpatients did not go to a dispensary, where would they go. Police Chief Fetherolf commented that they would be allowed to grow it in the legal amounts authorized by state law in their backyard. .-' City Attorney Leibold indicated that there were other exempted facilities that fit within the definition. Agenda Item No.~ pageBOf~ Page 28 City Council Meeting Minutes - February 28, 2006 Councilmember Buckley questioned using paragraph C of the Temecula ~ Ordinance. City Attorney Leibold commented that the Temecula Ordinance was an interim urgency ordinance. Councilmember Buckley questioned why the item was not presented to the PSAC. Police Chief Fetherolf explained that it was an oversight and a sense of urgency due to the problems around the County regarding medical marijuana. He indicated that it was not intentional. Mayor Pro Tern Schiffner commented that he could not speak for or against the usage of medical marijuana. He indicated that in order to be consistent there needed to be an ordinance. He indicated that he would vote in favor of the Ordinance. Councilmember Hickman clarified the purpose of the Ordinance. He indicated that the Council and staff were trying to prohibit the establishment of dispensaries of medical marijuana. ~ Mayor Magee clarified that section 17.69.010 of the Temecula ordinance provided by Mr. Victor would be used in the Lake Elsinore Ordinance; and amended to add Item c to read "no conflict with state law, this ordinance shall in no way limit the right to possess, use or cultivate marijuana for medical purposes authorized by the laws of the State of California." MOVED BY SCHIFFNER, SECONDED BY KELLEY TO ADOPT ORDINANCE NO. 1173, TO PROHIBIT THE ESTABLISHMENT OF MEDICAL MARIJUANA DISPENSARIES IN THE CITY OF LAKE ELSINORE WITH MODIFICATIONS. ......, Agenda Item No. \ tI\ page~Of~ Page 29 City Council Meeting Minutes - February 28, 2006 .- ORDINANCE NO. 1173 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, ADDING CHAPTER 17.69 TO TITLE 17 OF THE LAKE ELSINORE MUNICIPAL CODE TO PROHIBIT THE ESTABLISHMENT OF MEDICAL MARIJUANA DISPENSARIES IN THE CITY OF LAKE ELSINORE. UPON THE FOLLOWING ROLL CALL VOTE: AYES: COUNCILMEMBERS: BUCKEY, HICKMAN, KELLEY, SCHIFFNER, MAGEE NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: NONE .....-.. ABSTAIN: COUNCILMEMBERS: NONE 34. Industrial Design Review No. 2004-04. Community Development Director Preisendanz gave an overview of the item. He indicated the review was an expansion of Town & Country Towing. He commented that the Planning Commission recommended approval of the item and staffhad recommended that the RDA concur with Council's decision. Councilmember Buckley commented that the building was nice. He requested that a large tree be added on the east elevation. Mr. Preisendanz indicated that could be done through the construction and landscaping. MOVED BY BUCKLEY, SECONDED BY HICKMAN TO ADOPT RESOLUTION NO. 2006-35, APPROVING INDUSTRIAL DESIGN REVIEW NO. 2004-04. ----- Agenda Item No. \ fA Pag~ Of:?;fj Page 30 City Council Meeting Minutes - February 28, 2006 Mayor Magee commended Mr. Gary Brown for continuing to invest in the ~ community. He indicated that Mr. Brown had always given back to the community. THE FOREGOING MOTION CARRIED BY UNANIMOUS VOTE. (Note: Fees listed in the Conditions of Approval are the best estimates available at the time of approval The exact fie amounts will be reviewed at the time of building permit issuance and m'!) be raised.) GENERAL CONDITION 1. The applicant shall defend (with counsel acceptable to the City), indemnify, and hold harmless the City, its Official, Officers, Employees, and Agents from any claim, action, or proceeding against the City, its Official, Officers, Employees, or Agents to attach, set aside, void, or annul an approval of the City, its advisory agencies, appeal boards, or legislative body concerning the, . Industrial Project which action is bought within the time period provided for in California Government Code Sections 65009 and/or 66499.37, and Public Resources Code Section 21167. The City will promptly notify the Applicant of any such claim, action, or proceeding against the City and ~ cooperate fully with the defense. If the City fails to promptly notify the Applicant of any such claim, or proceeding, the Applicant shall not, thereafter, be responsible to defend, indemnify, or hold harmless the City. PLANNING DIVISION ~ 2. Design Review approval for Commercial Design Review No. 2004-04 shall lapse and become void one (1) year following the date on which the Design Review became effective, unless prior to the expiration of one (1) year a building permit related to the Design Review is issued and construction commenced and diligently pursued toward completion. The Design Review granted herein shall run with the land for this one (1) rear period and shall continue to be valid upon a change of ownership of the site. 3. Prior to certificate of occupancy, the driveway, parking lots, vehicle storage area, perimeter and intemallandscaping shall be completed as indicated on the approved plans. 4. Conditions of Approval shall be reproduced on page one of building plans submitted to the Building Division for Plan Check. All Conditions of Approval shall be met prior to the issuance of a Certificate of Occupancy and release of utilities. 5. All site improvements approved with this request shall be constructed as indicated on the approved site plan and elevations. Revisions to approved site plans or building elevations shall be subject to the review of the Community Development Director. All plans submitted for Building Division Plan Check shall conform to the submitted plans as modified by Conditions of Approval, or the Planning Commission/City Council through subsequent action. ~ Agenda Item No. \ 0\. Pagd::> or2!f3. Page 31 City Council Meeting Minutes - February 28, 2006 ,- 6. Structures shall be placed on-site as depicted on the site plan and/or as modified by the Community Development Director or designee. 7. Any revisions to the interior floor plans that could cause the requirement for additional parking shall be subject to the review and approval of the Community Development Director or designee. 8. All roof mounted or ground support air conditioning units or other mechanical equipment incidental to development shall be architecturally screened or shielded by landscaping so that they are not visible from neighboring property or public streets. 9. All exterior on-site lighting shall be shielded and directed on-site so as not to create glare onto neighboring property and streets or allow illumination above the horizontal plane of the fixture. All light fixtures shall match the architectural style of the building. 10. All loading zones shall be clearly marked with yellow striping and shall comply with the requirements of the LEMC. 11. Applicant shall meet ADA (Americans with Disabilities Act) requirements. 12. The applicant shall construct a six foot (6') decorative masonry wall with pilasters at the gates and comers of the wall. Six foot (6') opaque gates shall be required. ,....-- 13. All storage areas shall be enclosed with a six foot (6') masonry wall (exterior split face/interior smooth block) and six foot (6') opaque gates per the review and approval of the Community Development Director or designee. 14. Trash enclosures shall be constructed per City standards as approved by the Community Development Director. The trash enclosure shall be landscaped on three sides and allow for climbing vines. 15. No exterior roofladders shall be permitted. 16. All exterior downspouts shall be located inside the building. 17. Applicant shall use roofing materials with Class "A" fire rating. 18. The Planning Division shall approve the location of any construction trailers utilized during construction. All construction trailers shall require a $1,000.00 cash bond, submit a site plan and processed through the Planning Division. 19. Materials and colors depicted on the plans and Color and Materials Board shall be used unless modified by the applicant and approved by the Community Development Director or designee. ,....-- 20. On-site surface drainage shall not cross sidewalks. 21. Parking stalls shall be double-striped with four-inch (4") lines two feet (2') apart. Agenda Item No.~ page3tofi:)9 Page 32 City Council Meeting Minutes - February 28, 2006 22. All exposed slopes in excess of three feet (3') in height shall have a permanent irrigation system and erosion control vegetation installed, approved by the Landscape Architectural Consultant and Planning Division. ~ 22. All drive aisles and loading areas shall be kept free and clear of any materials/merchandise so as not to obstruct on-site circulation and deliveries. 23. Provide a 12-inch concrete paver along the side of parking stalls that are adjacent to planters (paver to include curb width). Prior To Building/Grading Permits 24. Prior to issuance of any grading permit or building permits, the applicant shall sign and complete an "Acknowledgement of Conditions" form and shall return the executed original to the Planning Division for inclusion in the case records. 25. A minimum six foot (6') wide planter is required at the center of each proposed parking row. The planter shall include a minimum of ground cover and one (1) twenty-four inch (24'') box tree. 26. The five foot (5') setback aiea shown on the Site Plan shall be landscaped from the front setback boundary line to the rear boundary line. 27. Three (3) sets of the Final Landscaping/Irrigation Detail Plan shall be submitted, reviewed and approved by the City's Landscape Architect Consultant and the Community Development Director or designee, prior to issuance of building permit. A Landscape Plan Check & Inspection Fee will be charged prior to final landscape approval based on the Consultant's fee plus forty percent (40%) City fee. ....; a) All planting areas shall have permanent and automatic sprinkler system with 100% plant and grass coverage using a combination of drip and conventional irrigation methods. b) Applicant shall plant street trees, selected from the City's Street Tree List, a maximum of thirty feet (30) apart and at least twenty-four-inch (24") box in size. c) All planting areas shall be separated from paved areas with a six-inch (6") high and six-inch (6") wide concrete curb. d) Planting within fifteen feet (15') of ingress/egress points shall be no higher than thirty-six inches (36''). e) Landscape planters shall be planted with an appropriate parking lot shade tree to provide for 50% parking lot shading in fifteen (15) years. ......, Agenda Item NO.~ Page32, of i3?t Page 33 City Council Meeting Minutes - February 28, 2006 ,,,,,-.. f) Any transformers and mechanical or electrical equipment shall be indicated on landscape plan and screened as part of the landscaping plan. g) The landscape plan shall provide for ground cover, shrubs, and trees and meet all requirements of the City's adopted Landscape Guidelines. Special attention to the use of Xeriscape or drought resistant plantings with combination drip irrigation system to be used to prevent excessive watering. h) All landscape improvements shall be bonded 100% for material and labor for two years from installation sign-off by the City. Release of the landscaping bond shall be requested by the applicant at the end of the required two years with approval! acceptance by the Landscape Consultant and Community Development Director or Designee. i) All landscaping and irrigation shall be installed within affected portion of any phase at the time a Certificate of Occupancy is requested for any building. All planting areas shall include plantings in the Xeriscape concept, drought tolerant grasses and plants. j) Final landscape plan must be consistent with approved site plan. ,.--. k) Final landscape plans to include planting and irrigation details. 28. Applicant shall comply with the requirements of the Elsinore Valley Municipal Water District. Proof shall be presented to the Chief Building Official prior to issuance of building permits and final approval. 29. Prior to issuance of building permits, applicant shall provide assurance that all required fees to the Lake Elsinore Unified School District have been paid. 30. Prior to issuance of building permits, applicant shall provide assurance that all requirements of the Riverside County Fire Department have been met. 31. Prior to issuance of building permits, applicant shall pay park-in-lieu fee in effect at time of building permit issuance. 32. The applicant shall comply with Section 17.78, Noise Control of the Lake Elsinore Municipal Code. 33. The Multiple Species Habitat Conservation Fee (M:SHCP) shall be due upon issuance of each building permit. "...... Agenda Item No.k Pagc.Qof :1J Page 34 City Council Meeting Minutes - February 28, 2006 ENGINEERING DIVISION ""'" General Conditions: 34. A grading plan signed and stamped by a Calif. Registered Civil Engineer shall be required if the grading exceeds 50 cubic yards or the existing flow pattern is substantially modified as determined by the City Engineer. If the grading is less than 50 cubic yards and a grading plan is not required, a grading permit shall still be obtained so that a cursory drainage and flow pattern inspection can be conducted before grading begins. 35. Prior to commencement of grading operations, applicant to provide to the City with a map of all proposed haul routes to be used for movement of export material. Such routes shall be subject to the review and approval of the City Engineer. 36. All grading shall be done under the supervision of a geotechnical engineer and he shall certify all slopes steeper than 2 to 1 for stability and proper erosion control. 37. An Encroachment Permit shall be obtained prior to any work on City right-of-way. 38. Applicant shall obtain an encroachment permit from Caltrans for all proposed work in State Route 74. 39. Street improvements, traffic signing and stnplllg are required as part of this project. The improvements shall be prepared by a registered civil engineer and shall meet city and/or ......" riverside county standards. 40. Arrangements for relocation of utility company facilities (power poles, vaults, etc.) out of the roadway or alley shall be the responsibility of the property owner or his agent. 41. Applicant shall pay all applicable development impact/mitigation fees, including but not limited to 11JMF, MSHCP, TIF and area drainage fees. 42. 10 year storm runoff shall be contained within the curb and the 100 year storm runoff shall be contained within the street right-of-way. When either of these criteria is exceeded, drainage facilities shall be provided. 43. All compaction reports, grade certifications, monument certifications (with tie notes delineated on 8 Y:z" x 11" Mylar) shall be submitted to the Engineering Division before final inspection of public works improvements will be scheduled and approved. 44. In accordance with the City's Franchise Agreement for waste disposal & recycling, the applicant shall be required to contract with CR&R Inc. for removal and disposal of all waste material, debris, vegetation and other rubbish generated during cleaning, demolition, clear and grubbing or all other phases of construction. 45. On-site drainage shall be conveyed to a public facility, accepted by adjacent property owners by a letter of drainage acceptance, or conveyed to a drainage easement. ""'" Agenda Item NO.~ Pag;~ of 51 Page 35 City Council Meeting Minutes - February 28, 2006 ~ 46. All natural drainage traversing the site shall be conveyed through the site, or shall be collected and conveyed by a method approved by the City Engineer. 47. Roof drains shall not be allowed to oudet direcdy through coring in the street curb. 48. Roofs should drain to a landscaped area. 49. Applicant shall comply with all NPDES requirements in effect; including the submittal of a Storm Water Pollution Prevention Plan (SWPPP) and a Water Quality Management Plan (WQMP) as required per the Santa Ana Regional Water Quality Control Board. 50. City of Lake Elsinore has adopted ordinances for storm water management and discharge control. In accordance with state and federal law, these local storm water ordinances prohibit the discharge of waste into storm drain system or local surface waters. This includes non-storm water discharges containing oil, grease, detergents, trash, or other waste remains. Brochures of "Storm water Pollution, What You Should Know" describing preventing measures are available at City Hall. PLEASE NOTE: The discharge of pollutants into street, gutters, storm drain system, or waterways -without Regional Water Quality Control Board permit or waver - is strictly prohibited by local ordinances and state and federal law. ,,~" Prior to Issuance of a Grading Permit: 51. If the grading is less than 50 cubic yards and a grading plan is not required, a site plan that shows proposed project improvements and drainage patterns shall be submitted so that a cursory drainage and flow pattern inspection can be conducted before grading begins. 52. Submit grading plans with appropriate security, Hydrology and Hydraulic Reports prepared by a Registered Civil Engineer for approval by the City Engineer. Developer shall mitigate any flooding and/or erosion downstream caused by development of the site and/or diversion of drainage. 53. Provide soils, geology and seismic report. Provide final soils report showing compliance with recommendations. 54. The applicant shall obtain all necessary off-site easements for off-site grading and/or drainage acceptance from the adjacent property owners prior to grading permit issuance. 55. Applicant to provide erosion control measures as part of their grading plan. The applicant shall contribute to protection of storm water quality and meet the goals of the BMP in Supplement "A" in the Riverside County NPDES Drainage Area Management Plan. ",- 56. Applicant shall provide the city with proof of his having ftled a Notice of Intent with the Regional Water Quality Control Board for the National Pollutant Discharge Elimination System (NPDES) program with a storm water pollution prevention plan prior to issuance of grading permits. Agenda Item No.k pag~of33 Page 36 City Council Meeting Minutes - February 28, 2006 57. Applicant shall obtain approval from Santa Ana Regional Water Quality Control Board for their ~ storm water pollution prevention plan including approval of erosion control for the grading plan prior to issuance of grading permits. The applicant shall provide a WQMP for post construction, which describes BMP's that will be implemented for the development and including maintenance responsibilities. Prior to Issuance of Building Permit: 58. Unless other timing is indicated, all Public Works requirements shall be complied with as a condition of development as specified in the Lake Elsinore Municipal Code (LEMC) prior to building permit. 59. Dedicate full half width right-of-way for Collier Avenue. Right-of-way width shall be 60-feet as measured from the centerline of Collier Avenue to the proposed property line. 60. Construct the project driveway per County Standard No.207A. The driveway shall be right- in/ out only and shall be provided with appropriate right-in/out signage. 61. Pay cash-in-lieu of construction for half of the median on Collier Avenue. The amount shall be based on the engineer's estimate of one-half median for the frontage length of the project. 62. Comply with access requirements from the Fire Department. 63. Submit a "Will Serve" letter to the City Engineering Division from the applicable water agency ~. stating that water and sewer arrangements have been made for this project and specify the technical data for the water service at the location. such as water pressure and volume etc. Submit this letter prior to applying for a building permit. 64. Pay all Capital Improvement Impact/Mitigation Fees and Plan Check fees (LEMC 16.34) including, but not limited to Traffic Improvement Fee, Transportation Uniform Mitigation Fee, Area Drainage fee, etc. Prior to Occupancy: 65. All compaction reports, grade certifications, monument certifications (with tie notes delineated on 8 1/2" x 11" Mylar) shall be submitted to the Engineering Division. 66. All public improvements including signing and striping, and street lighting shall be completed in accordance with the approved plans or as condition of development to the satisfaction of the City Engineer. 67. Site parking and on site access to the project shall be completed. 68. Coordinate the construction of a street light with Southern California Edison consistent with the City Standard street light spacing. ~ Agenda Item No. \ 0" PagClo Of.:33 Page 37 City Council Meeting Minutes - February 28, 2006 ~ 69. Construct full half width street improvements on Collier Avenue such that the distance from the centerline to the curb face is 48-feet. 70. Construct transitions from the proposed project curb line to the existing pavement to the north and construct a transition from the proposed curb line transitioning to the existing curb line to the south. Transitions shall be made at a rate no less than 10:1. 71. Water and sewer improvements shall be completed in accordance with Water District requirements. THE REGULAR CITY COUNCIL MEETING WAS RECESSED AT 8:39 P.M. THE REGULAR CITY COUNCIL MEETING RECONVENED AT 8:41 P.M. PUBLIC COMMENTS - NON-AGENDIZED ITEMS - 3 MINUTES No comments. ~ CITY MANAGER COMMENTS 1) Announced the following upcoming events: Mar 4th Mar 4th Mar 4th Mar 11 th Mar 11 th Household Hazardous Waste Collection Lake Elsinore Girls Softball opening day Lake Elsinore Little League fund raising carnival Factory Free-style Moto X and music festival Lake Elsinore Little League opening day CITY ATTORNEY COMMENTS No comments. CLOSED SESSION REPORT ~ City Attorney Leibold announced the Closed Session discussion. She announced that there were 3 items scheduled for Closed Session. Council announced prior to the commencement of that meeting that Item b would not be discussed and was tabled until the March 14th meeting. She noted that Item a was discussed and there was no reportable action. Agenda Item No.~ page~f:33 Page 38 City Council Meeting Minutes - February 28, 2006 COMMITTEE REPORTS ....." None. CITY TREASURER COMMENTS No comments. CITY COUNCIL COMMENTS Councilmember Kelley commented on the following: 1) Noted the trip to Washington, D.C. Noted that she felt the trip was successful. She commended City Manager Brady on the information presented; and also commended lobbyist Mr. Dave Kennett. City Manager Brady commended Lake & Aquatic Resources Director Kilroy, City Engineer Seumalo, Information/Communication Manager Dennis and other staff members for their thorough input. ....." Mayor Pro Tem Schiffner commented on the following: 1) Thanked the citizens for attending the Council meeting. Councilmember Hickman commented on the following: 1) The Senior Center was doing income taxes at no cost. Encourage the community to schedule an appointment. Councilmember Buckley commented on the following: 1) He suggested if anyone in the public wanted to send a letter of support for the federal funding request, to contact the Chamber of Commerce. He suggested posting Congressman Issa's address and Senator Feinstein's address on the City website. City Manager Brady commented that if citizens wished to submit letters of support to contact Information/Communication Manager Dennis. ....." Agenda Item No, , 0\. pag~a Page 39 City Council Meeting Minutes - February 28, 2006 ,.-.. Mayor Magee commented on the following: 1) Thanked the community and Council for allowing him to represent the City. He commended the Ferguson Group and Dave Kennett on the professional assistance that they received. He also commended staff, commenting on City Manager Brady's leadership. He also recognized Information/Communication Manager Dennis, Lake & Aquatic Resources Director Kilroy and City Engineer Seumalo. He noted the presentation was highly professional. He noted that if it was successful he would recommend that it be an annual ongoing event. 2) He commented that when the GP AC was formed, Council allowed County residents to be on the committee. He noted that there was a County resident on the committee. He indicated, that at that time, Wildomar's focus was somewhat south of Lake Elsinore and Wildomar residents did not apply for a seat on the committee. He indicated that he had spoken to some Wildomar residents that were now interested in sending a representative to be on the GP AC committee. He indicated that he would need a concurrence from Council to allow a Wildomar resident to come and sit with our GP AC to work with our staff and consultant. Council gave concurrence. Mayor Magee indicated that he would notify the Wildomar residents. ".-... 3) He commented that Trumark was working on an Outreach Campaign to Wildomar. He indicated that when the Trumark item came before Council there would be a better understanding between the City and the unincorporated community next to us. He noted that we all needed to work together. The Regular City Council Meeting was adjourned at 8:49 p.m. ROBERTE.MAGEE,MAYOR CITY OF LAKE ELSINORE ATTEST: ",.- FREDERICK RAY, CITY CLERK CITY OF LAKE ELSINORE Agenda Item No, \~ Pag~ of.3:L ,----- MINUTES JOINT CITY COUNCIL/REDEVELOPMENT AGENCY STUDY SESSION CITY OF LAKE ELSINORE 183 NORTH MAIN STREET LAKE ELSINORE, CALIFORNIA TUESDAY, MARCH 14,2006 ************************************************************* CALL TO ORDER Mayor Magee called the Joint Study Session to order at 4:00 p.m. ROLL CALL PRESENT: COUNCILMEMBERS: HICKMAN, KELLEY, SCHIFFNER, MAGEE ,""-"" ABSENT: COUNCILMEMBERS: BUCKLEY (Councilmember Buckley arrived at 4:05 p.m.) Also present were: City Manager Brady, City Attorney Leibold, Administrative Services Director Pressey, Information/Communications Manager Dennis, Community Services Director Sapp, Lake & Aquatic Resources Director Kilroy, Community Development Director Preisendanz, City Engineer Seumalo, Building and Safety Manager Chipman, Senior Planner Harris, Associate Planner Coury, RecreationlTourism Manager Fazzio, Public Works Manager Payne, City Clerk Ray, City Treasurer Weber and Deputy City Clerk Soto. DISCUSSION ITEMS Mayor Magee gave an overview of the presentations; and confirmed that the awardees would be present at the 7 :00 p.m. meeting. ",- AGENDA ITEM NO. 1 b PAOf-L...::.OF~ PAGE 2 STUDY SESSION MINUTES - MARCH 14,2006 PUBLIC COMMENTS .~ No comments. CONSENT CALENDAR I. Minutes. No comments. 2. Warrant List - February 28,2006. Councilmember Hickman requested clarification of various checks issued on the warrant list. Staff clarified the items. 3. Investment Reports. City Treasurer Weber inquired about Fund No. 359 for CFD 90-3 and why the amount was negative. Administrative Services Director Pressey indicated that he would need to research the item. ~ 4. Claims against the City. City Attorney Leibold indicated that there were some questions at the last agenda review study session in.regard to claims and processing. She noted that when claims first come in, they come in through the City Clerk's office. She noted that the City Clerk's office will then forward the claims to the City's claim's administrator who was appointed by the City's Joint Power Insurance Authority. She further noted that the claim's administrator would then review and evaluate the claims and make a recommendation which would then be put on the City Council's agenda for consideration. Lastly, she noted that Council could request that the item be added to closed session for the next successive meeting if they had questions or wanted to discuss the details of a claim. 5. Notice of Completion for Poe Street. Agenda Item No. Page~Of~ \s ~ PAGE 3 STUDY SESSION MINUTES - MARCH 14,2006 .,-.. Councilmember Buckley indicated that he received 2 phone calls from people who lived in the neighborhood who had indicated that they were impressed with the work performed. Mayor Magee thanked Public Works Manager Payne for the hard work completed by his department. 6. On-call Professional Traffic Engineering Services. No comments. 7. Agreement to provide Algaecide Services. Councilmember Hickman inquired if the City was more liable for accidents that.would occur on Elsinore West Marina's beach or lake since the City would be doing the work. City Attorney Leibold confirmed that it would not make the City more liable. /- 8. Award of Contract - Stadium roofs. No comments. 9. Auction sale of surplus equipment. Councilmember Hickman inquired if residents had the chance to bid on the items. Community Services Director Sapp indicated that if residents were interested in bidding on an auction item, they could contact the Community Services Department and they would be provided with all the necessary auction information. 10. Award of Contract - Janitorial Maintenance. Councilmember Hickman inquired if there were any companies in Lake Elsinore that could have been awarded the project. /-. Agenda Item No. \ b Page 3 Of~ PAGE 4 STUDY SESSION MINUTES - MARCH 14,2006 Community Services Director Sapp indicated that no local companies had bid oo~~~ ~ Councilmember Buckley inquired if there were multiple vendors for the porta- potties in the City. Community Services Director Sapp indicated that he was not aware of the City using multiple vendors for porta-potties. 11. Foreclosure Legal Service Agreement. City Treasurer Weber inquired on the cost for the City to foreclose on a house. Administrative Services Director Pressey indicated that the cost depended on the hourly rate that the attorney charged. City Treasurer Weber inquired who would take over the house once it was foreclosed. Administrative Services Director Pressey indicated that in most cases there was a mortgage and the bank would take over the property. ~ 12. Resolution approving a Funding, Construction and Acquisition Agreement for the City of Lake Elsinore Community Facilities District No. 2005-5 (Villages at Wasson Canyon). No comments. 13. Resolution initiating proceedings and approving the Engineer's Report for City of Lake Elsinore LLMD No.1 - Zone 5, Phase 2, declaring the City's intention to increase assessments and to levy and collect assessments, determining that these proceedings shall be taken pursuant to the Landscaping and Lighting Act of 1972 and the Right To Vote On Taxes Act, and offering a time and place for hearing objections thereto. No comments. PUBLIC HEARINGS """ Agenda Item No. \ ~ page~Of~ PAGE 5 STUDY SESSION MINUTES - MARCH 14,2006 --~1. Tentative Parcel Map No. 33164. No comments. BUSINESS ITEMS 31. Second Reading - Ordinance No. 1170 - Authorizing the levy of Special Tax within Annexation Area No. 17 (Summerly) annexed to said District. Councilmember Buckley stated that the Ordinance 1170 was for Law Enforcement, Fire and Paramedic services. He inquired if the LLMD for Annexation Area No. 17 had to be read as well. Councilmember Buckley indicated that on page 3 of 6 in the staff report, the Ordinance's roll call vote liste~ Buckley as "absent". He stated that the roll call vote should have listed him under "no". Mayor Magee inquired if the LLMD for Annexation Area No. 17 was supposed to come back to Council for a second reading. ".-, City Attorney Leibold indicated that every ordinance is required to come back for a second reading. Mayor Magee inquired if the LLMD for Annexation Area No. 17 had come before Council as an ordinance. Administrative Services Director Pressey indicated that there was not an ordinance for that specific LLMD. He noted that the LLMD was presented to Council in the form of a resolution. 32. Second Reading - Ordinance No. 1171 - Authorizing the levy ofa Services Special Tax and Special Tax. No comments. 33. Second Reading - Ordinance No. 1172 - Approving Zone Change No. 2005- 02. "'- No comments. Agenda Item No. \.b Page~ ofl PAGE 6 STUDY SESSION MINUTES - MARCH 14,2006 34. Second Reading - Ordinance No. 1173 - Adding Chapter 17.69 to Title 17 of ....", the Lake Elsinore Municipal Code to prohibit the establishment of medical marijuana dispensaries in the City of Lake Elsinore. No comments. 35. Request to reconsider Commercial Design Review No. 2005-06 (Canyon Creek "Summerhill" Specific Plan). City Treasurer Weber inquired if the LEMC was considered law and the Council Policies considered a supplement. City Attorney Leibold indicated that Council Policies could not be inconsistent or in conflict with the LEMC. City Treasurer Weber indicated that the LEMC stated that applicants could not come back for a year, but the City Council Policy stated that they could. He further inquired if the City Council Policy was lessening the code. City Attorney Leibold indicated that the two could be read consistently. She ....", noted that if a Design Review was denied, the LEMC prohibited the applicant from reapplying and submitting a new application with substantially the same, or the same design; on substantially the same, or the same site. She indicated that the Council Policy related to items that were not subject to a public hearing where a disgruntled applicant would be given the opportunity to request reconsideration of the same application. 36. Planning Commission Appointment Process. Mayor Magee stated that Commissioner Francia had stepped down a couple of months ago and he had just been advised that Commissioner Larimer would also be stepping down. Mayor Magee indicated that staff had outlined a series of recommendations. He noted that the first thing to do would be to accept Commissioner Larimer's resignation, recommend one person to complete the remaining portion of Mr. Francia's interim term and initiate the recruitment process which would Agenda Item No. \ b pagekOf~ ""'" PAGE 7 STUDY SESSION MINUTES - MARCH 14,2006 /""' designate a subcommittee to review and interview applicants in order to make a recommendation to the Council. Mayor Magee stated that as of Monday, March 13th at 5 p.m. the City Clerk's office still had not received any applications. He noted that he had reached out to a local business owner who has lived in the community for more than 22 years. He stated that, with the concurrence of Council, he would like to nominate Jimmy Flores. He noted that Mr. Flores was willing to accept the position on an interim basis. He noted that Mr. Flores understood that serving as an interim Planning Commissioner was not an automatic appointment and that he would have to apply and go through the same process as other applicants. He stated that it was his intention to put Mr. Flores' nomination before the Council at the 7 p.m. meeting. Mayor Magee requested that Mayor Pro T~m Schiffuer join him on the subcommittee to review the applicants and make a recommendation to the full Council. Councilmember Hickman stated that he would like to be on the subcommittee. ~--- REDEVELOPMENT AGENCY CONSENT CALENDAR 1. Minutes. No comments. 2. Update to LAIF Resolution. No comments. PUBLIC FINANCE AUTHORITY CONSENT CALENDAR 1. Update to LAIF Resolution. ,- No comments. Agenda Item No. page=t Of 9 \6 PAGE 8 STUDY SESSION MINUTES - MARCH 14,2006 CITY TREASURER COMMENTS ....., City Treasurer Weber stated that the City had issued a lot of bonds lately. He inquired if any of them had closed. He further inquired on the interest rates that the City received. Administrative Services Director Pressey indicated that the latest bonds issued were the Alberhill bonds, and prior to that were the bonds for Serenity and Rosetta Canyon. He noted that at the last issue he received favorable rates ranging from 5% to 3%. City Treasurer Weber indicated that he would like an audit to be conducted on Harris and Associates and the way they distribute funds to ensure that the money that was distributed to developers was the correct amount. ADJOURNMENT THE JOINT CITY COUNCILIREDEVELOPMENT AGENCY STUDY SESSION WAS ADJOURNED AT 4:35 P.M. ....., ROBERT E. MAGEE, MAYOR CITY OF LAKE ELSINORE GENIE KELLEY, CHAIRWOMAN REDEVELOPMENT AGENCY Respectfully submitted, MICHELLE SOTO, DEPUTY CITY CLERK Agenda Item No. page~Of~ \b ....., PAGE 9 STUDY SESSION MINUTES - MARCH 14,2006 ,,- ATTEST: FREDERICK RAY, CITY CLERK ,""'-- ~ Agenda Item No. \ b Page ~ Of Of ...--.- MINUTES CITY COUNCIL MEETING CITY OF LAKE ELSINORE 183 NORTH MAIN STREET LAKE ELSINORE, CALIFORNIA TUESDAY, MARCH 14,2006 ****************************************************************** CALL TO ORDER The Regular City Council Meeting was called to order by Mayor Magee at 5 :00 p.m. ROLL CALL PRESENT: COUNCILMEMBERS: BUCKLEY, HICKMAN, KELLEY, SCHIFFNER, MAGEE ,-' ABSENT: COUNCILMEMBERS: NONE Also present were: City Manager Brady, City Attorney Leibold, Administrative Services Director Pressey, Community Development Director Preisendanz, Community Services Director Sapp, Lake & Aquatic Resources Director Kilroy, Information/Communications Manager Dennis, Building & Safety Manager Chipman, Recreationrrourism Manager Fazzio, Police Chief Fetherolf, Fire Chief Gallegos, City Treasurer Weber and City Clerk Ray. CLOSED SESSION THE REGULAR CITY COUNCIL MEETING WAS RECESSED INTO CLOSED SESSION AT 5:00 P.M. RECONVENE IN PUBLIC SESSION (7:00 P.M.) PLEDGE OF ALLEGIANCE ,,- The Pledge of Allegiance was led by Jason Leinen. Agenda Item NO'~ page~ of~ Page 2 City Council Meeting Minutes - March 14,2006 INVOCATION - MOMENT OF SILENT PRAYER """" Mayor Magee led the meeting in a moment of silent prayer. ROLL CALL PRESENT: COUNCILMEMBERS: BUCKLEY, HICKMAN, KELLEY, SCHIFFNER, MAGEE ABSENT: COUNCILMEMBERS: NONE Also present were: City Manager Brady, City Attorney Leibold, Administrative Services Director Pressey, Community Development Director Preisendanz, Community Services Director Sapp, Lake & Aquatic Resources Director Kilroy, Information/Communications Manager Dennis, Building & Safety Manager Chipman, RecreationlTourism Manager Fazzio, Police Chief Fetherolf, Fire Chief Gallegos, City Treasurer Weber and City Clerk Ray. CLOSED SESSION """" A. CONFERENCE WITH LEGAL COUNSEL - ANTICIPATED LITIGATION - Significant exposure to litigation pursuant to subdivision (b) of Gov't Code 954956.9: (2 potential cases). B. CONFERENCE WITH REAL PROPERTY NEGOTIATOR (Gov't Code 954956.8): Property: A.P.N. 377-040-023,024 and 025 Negotiating parties: City of Lake Elsinore and MPJ 76 Inc Under negotiation: price and terms of payment CLOSED SESSION REPORT City Attorney Leibold announced the Closed Session discussion items as listed above. She noted that items a and b were discussed and there was no reportable action. """" Agenda Item No. \ c- page;). of ~ '3 Page 3 City Council Meeting Minutes - March 14, 2006 ,~ PRESENTATION/CEREMONIALS A. Certificate of Recognition - VFW essay winners Mayor Magee called forward Doug Krauss and Roxanne Mobley. Mayor Magee commented that Ms. Mobley had won an essay contest held by VFW Post 1508 titled "How I demonstrate my freedom". Mr. Krauss commented that the VFW conducted an essay contest for all the young adults in the communities throughout the nation. He indicated that Ms. Mobley had won second place in the contest. He noted that the other two winners were not able to attend. Ms. Mobley recited her essay; and was presented a certificate by Mayor Magee. B. Presentation - EDC Southwestern Golf Tournament Trophy /"' Mayor Magee called forward Diane Sessions, the Executive Director of the Economic Development Corporation of Southwest California. Mrs. Sessions commented that she was there to present the perpetual trophy to the City of Lake Elsinore. She noted the City had won the annual golf tournament two years in a row. She further recognized all the golfers that represented the City in the tournament. She indicated that the proceeds went towards supporting economic development activities throughout the region. She commended the City on its' own economic activity. She noted that next year's tournament would be held at the John Laing Golf Course. She also presented the City with a plaque that would be kept at City Hall. Mayor Magee called City Engineer Seumalo forward to accept the trophy. City Engineer Seumalo gave credit to his fellow teammates. He indicated that it was a pleasure playing for the City. PUBLIC COMMENTS - NON-AGENDIZED ITEMS -1 MINUTE Douglas Lanphere, commented on the Com cast contract. He indicated that there /'- needed to be a public service channel available to the citizens. Agenda Item No. \ c- pag~ of d'S Page 4 City Council Meeting Minutes - March 14,2006 Ruth Atkins, Downtown Merchant Association, reminded the community of the ....", Farmers Market and Street Fair on Sunday, March 26th. Loraine Watts, NAACP commented that the NAACP would be holding its annual Scholarship banquet on April 8th at the Diamond Club starting at 3:30 p.m. She noted that all high school seniors in the area were welcome to apply. She invited the community to attend the banquet. Elnore Janes, resident, commented that she was there to provide a signed petition to the City Council opposing the motocross relocation site. She noted that she was also against the current location of the motocross park. Mayor Magee requested that a copy of the petition be given to the Planning Division so that it could be incorporated into any future staff report should an application for relocation of the motocross park is filed with the City. Donna Franson, Lake Elsinore Citizens Committee, commented that the Winter/Spring Issue's were in the mail. She noted that their next meeting would be held April 13th at 7 p.m. in the Tuscany Hills Recreation Center. She further noted that Chamber of Commerce President Kim Cousins was the guest speaker. She commented that their committee was a new member of the Chamber. She thanked Council, Commissioners, City Staff and Police Chief Fetherolf for participating in the Lake Elsinore Citizens Committee quarterly meetings. '""" CONSENT CALENDAR ITEMS MOVED BY BUCKLEY, SECONDED BY KELLEY AND CARRIED BY UNANIMOUS VOTE TO APPROVE THE CONSENT CALENDAR AS PRESENTED. 1. The following Minutes were approved: a. Joint City Council/Redevelopment Agency Study Session - December 13,2005. b. Regular City Council Meeting - December 13,2005. c. Joint City Council/Redevelopment Agency Study Session - January 10, 2006. d. Regular City Council Meeting - January 10, 2006. ....", Agenda Item No. \ C, page~Of ~3 Page 5 City Council Meeting Minutes - March 14,2006 ,"-"'" e. Joint City Council/Redevelopment Agency Study Session - February 9,2006. 2. Ratified Warrant List for February 28, 2006. 3. Received and filed Investment Reports for November 2005 and December 2005. 4. Rejected the claims listed and directed the City Clerk to send letters informing claimants of this decision. 5. Accepted the Poe Street project as complete. Authorized the Mayor to sign the Notice of Completion. Authorized the City Clerk to file the Notice of Completion with the County of Riverside. 6. Authorized the City Manager to execute the contract with Katz, Okitsu & Associates and Albert Grover & Associates for on-call professional traffic .. . engmeenng services. ~... 7. Authorized the Mayor to sign the agreement to provide algaecide services to Lake Elsinore West Marina. 8. Granted the exception to the Bid Process and awarded the contract for the Stadium roofs to Larson Single Ply in the amount of$21,200. Approved the request to transfer $21,200 from "Personnel Services" to the Stadium Capital Outlay, Building and Structures (40-10) account. 9. Approved the auction sale of the equipment described in the staff report. 10. Authorized the City Manager to execute the contract with Merchants Building Maintenance Company for janitorial maintenance. 11. Authorized the City Manager to execute the agreement with the Law Offices of Raul B. Garcia for Foreclosure Legal Services. 12. Adopted Resolution No. 2006-36 approving a Funding, Construction and Acquisition Agreement for the City of Lake Elsinore Community Facilities /-, District No. 2005-5 (Villages at Wasson Canyon). Agenda Item NO.~ Page 5 of ~~ -- Page 6 City Council Meeting Minutes - March 14,2006 13. Approved the Engineer's Report for LLMD No.1 - Zone 5, Phase 2. Adopted Resolution No. 2006-37 declaring the intention to increase assessments for LLMD No. 1 - Zone 5, Phase 2. Scheduled the public hearing on the assessment increase for April 11 , 2006. " PUBLIC HEARING 21. Tentative Parcel Map No. 33164. Community Development Director Preisendanz gave an in-depth overview of the item. He noted it was a request to subdivide property into two parcels. He noted that the item went before the Planning Commission on February 21, 2006. He further noted that the Planning Commission was recommending approval. Mayor Magee opened the Public Hearing at 7: 19 p.m. Mayor Magee closed the Public Haring at 7 :20 p.m. MOVED BY BUCKLEY, SECONDED BY SCHIFFNER AND CARRIED BY UNANIMOUS VOTE TO ADOPT RESOLUTION NO. 2006-38 APPROVING THE TENTATIVE PARCEL MAP NO. 33164. '-" GENERAL 1. The applicant shall defend (with counsel acceptable to the City), indemnify, and hold harmless the City, its Officials, Officers, Employees, Agents, and its Consultants from any claim, action, or proceeding against the City, its Officials, Officers, Employees, or Agents to attach, set aside, void, or annul an approval of the City, its advisory agencies, appeal boards, or legislative body concerning implementation and construction of Tentative Parcel Map No. 33164, which action is bought within the time period provided for in California Government Code Sections 65009 and/or 66499.37, and Public Resources Code Section 21167. The City will promprly notify the applicant of any such claim, action, or proceeding against the City and will cooperate fully with the defense. TENTATIVE PARCEL MAP NO. 33164 2. Tentative Parcel Map No. 33164 will expire two (2) years from date of approval unless within that period of time an appropriate instrument has been filed and recorded with the County Recorder, or an extension of time is granted by the City of Lake Elsinore City Council in accordance with the Subdivision Map Act and the LEMC. ~ Agenda Item No. \ c- Page~of;2 3 Page 7 City Council Meeting Minutes - March 14,2006 ..-- 3. The Tentative Parcel Map shall comply with the State of California Subdivision Map Act and shall comply with all applicable requirements of the Lake Elsinore Municipal Code, Tide 16 unless modified by approved Conditions of Approval. 4. Prior to final certificate of occupancy of the Tentative Parcel Map, the improvements specified herein and approved by the Planning Commission and the City Council shall be installed, or agreements for said improvements, shall be submitted to the City for approval by the City Engineer, and all other stated conditions shall be complied with. All uncompleted improvements must be bonded for as part of the agreements. 5. All lots shall comply with minimum standards contained in the LEMC. 6. A precise survey with closures for boundaries and all lots shall be provided per the LEMC. 7. The applicant shall comply with all conditions of the Riverside County Fire Department. 8. The applicant shall meet all requirements of Elsinore Valley Municipal Water District (EVMWD). ......-- 9. The applicant shall comply with the following City programs: the City Source Reduction and Recycling Element and Household Hazardous Waste Element, the County Solid Waste Management Plan and Integrated Waste Management Plan. to. Prior to issuance of building permit, the applicant shall submit a letter of verification (will-serve letter) to the City Engineer, for all required utility services. 11. The applicant shall pay applicable fees and obtain proper clearance from the Lake Elsinore Unified School District (LEUSD) prior to issuance of building permits. 12. The applicant shall pay all applicable fees including park fees. 13. The applicant shall meet all requirements of the providing electric utility company. 14. The applicant shall meet all requirements ofthe providing gas utility company. 15. The applicant shall meet all requirements of the providing telephone utility company. 16. A bond is required guaranteeing the removal of all trailers used during construction. ,- Agenda Item No. \ G- Page I of ;;2. '3 -- Page 8 City Council Meeting Minutes - March 14,2006 17. Prior to issuance of a certificate of occupancy, the applicant shall prepare and record ,....., CC&R's against the limited manufacturing business park requested herein. The CC&R's shall be reviewed and approved by the Community Development Director or Designee and the City Attorney. The CC&R's shall include methods of maintaining common areas, parking and drive aisle areas, landscaped areas including parkways, and methods for common maintenance of all underground, and above ground utility infrastructure improvements necessary to support the complex. In addition, CC&R's shall established methods to address design improvements. 18. Each building owner shall have full access to commonly owned areas (parking), facilities and utilities. 19. The City's Noise Ordinance shall be met during all site preparation activity. Construction shall not commence before 7:00 AM and cease at 5:00 PM, Monday through Friday. Construction activity shall not take place on Saturday, Sunday, or any Legal Holidays. ENGINEERING 21. All Public Works requirements shall be complied with as a condition of development as specified in the Lake Elsinore Municipal Code (LEMC) prior to final map approval. 22. Pay all Capital Improvement and Plan Check fees (LEMC 16.34, Resolution 85-26). ,....., 23. The Traffic Mitigation Fee is $25,150, the Drainage Fee is $4,175 (Warm Springs East District), the K-Rat Fee is $910 and the TUMF is $23,300 if building permits are obtained on/after July 1, 2004. 24. Submit a "Will Serve" letter to the City Engineering Division from the applicable water agency stating that water and sewer arrangements have been made for this project. Submit this letter prior to final map approval. 25. If the existing street improvements are to be modified, the existing street plans on file shall be modified accordingly and approved by the City Engineer prior to issuance of building permit. An encroachment permit will be required to do the work. 26. Construct all public works improvements per approved street plans (LEMC 12.04). Plans must be approved and signed by the City Engineer prior to final map approval (LEMC 16.34). 27. All parcels shall have direct access to public right-of-way or be provided with a minimum 26-foot ingress and egress easement to public right-of-way with no on-street parking from the parcel boundaries to Minthorn Street by separate instrument or through map recordation. ,....., Agenda Item No. \ C Page i of l ') Page 9 City Council Meeting Minutes - March 14,2006 .--... 28. The 26 foot easement for access to Parcel Map 33164 must be approved by the Riverside County Fire Department prior to final map approval. 29. Riverside County Fire Department must approve easement widths and turning radii within the site prior to final map approval. 30. Provide reciprocal access easement to PM 21297. 31. Street improvement plans and specifications shall be prepared by a California Registered Civil Engineer. Improvements shall be designed and constructed to Riverside County Road Department Standards, latest edition, and City Codes (LEMC 12.04 and 16.34). 32. Applicant shall construct public improvements or enter into an agreement with the City for the construction of public works improvements and shall post the appropriate bonds prior to final map approval. 33.. Pay all fees and meet requirements of encroachment permit issued by the Engineering Division for construction of public works improvements (LEMC 12.08 and Resolution 83- 78). ,"'-'" 34. All compaction reports, grade certifications, monument certifications (with tie notes delineated on 8 1jz" x 11 II Mylar) shall be submitted to the Engineering Division before final inspection of public works improvements will be scheduled and approved. 35. Applicant shall obtain all necessary off-site easements for off-site grading from the adjacent property owners prior to fmal map approval. 36. Arrangements for relocation of utility company facilities (power poles, vaults, etc.) out of the roadway or alley shall be the responsibility of the property owner or his agent. 37. Provide fire protection facilities as required in writing by Riverside County Fire. 38. Provide street lighting and show lighting improvements as part of street improvement plans as required by the City Engineer. 39. Developer shall install blue reflective pavement markers in the street at all fire hydrant locations. 40. Applicant shall submit a traffic control plan showing all traffic control devices for the project to be approved prior to final map approval. All traffic control devices shall be installed prior to final inspection of public improvements. lbis includes No Parking and Street Sweeping Signs for streets within the tract. .--... 41. All improvement plans and maps shall be digitized. At Certificate of Occupancy applicant shall submit tapes and/or discs which are compatible with City's ARC Info/GIS or developer to pay $300 per sheet for City digitizing. Agenda Item No, \ c... Page q of~ S Page 10 City Council Meeting Minutes - March 14,2006 42. All utilities except electrical over 12 kv shall be placed underground, as approved by the serving utility. ....., 43. Apply and obtain a grading permit with appropriate security prior to building permit issuance. A grading plan signed and stamped by a California Registered Civil Engineer shall be required if the grading exceeds 50 cubic yards or the existing flow pattern is substantially modified as determined by the City Engineer. If the grading is less than 50 cubic yards and a grading plan is not required, a grading permit shall still be obtained so that a cursory drainage and flow pattern inspection can be conducted before grading begins. 44. Provide soils, geology and seismic report including street design recommendations. Provide final soils report showing compliance with recommendations. 45. An Alquis-Priolo study shall be performed on the site to identify any hidden earthquake faults and/or liquefaction zones present on-site. 46. All grading shall be done under the supervision of a geotechnical engineer and he shall certify all slopes steeper than 2 to 1 for stability and proper erosion control. All manufactured slopes greater than 30 feet in height shall be contoured. 47. Individual lot drainage shall be conveyed to a public facility or accepted by adjacent property owners by a letter of drainage acceptance or conveyed to a drainage easement. 48. On-site drainage facilities located outside of road right-of-way should be contained within drainage easements shown on the final map. A note should be added to the final map stating: "Drainage easements shall be kept free of buildings and obstructions". ~ 49. All natural drainage traversing site shall be conveyed through the site, or shall be collected and conveyed by a method approved by the City Engineer. 50. The site is in the Flood Zone AO, FIRM Map 0606362062F Revised August 18, 2003 and building pads shall be constructed 1 foot above existing adjacent grades. 51. Meet all requirements ofLEMC 15.64 regarding flood hazard regulations. 52. Meet all requirements ofLEMC 15.68 regarding floodplain management. 53. The applicant to provide FEMA elevation certificates prior to certificate of occupancies. 54. Submit Hydrology and Hydraulic Reports for review and approval by City Engineer and the Riverside County Flood Control District prior to approval of final map. Developer shall mitigate any flooding and/or erosion caused by development of site and diversion of drainage. 55. All drainage facilities in this tract shall be constructed to Riverside County Flood Control District Standards. ....." Agenda Item No. \ C- Page \Oof~ Page 11 City Council Meeting Minutes - March 14,2006 r--. 56. Storm drain inlet facilities shall be appropriately stenciled to prevent illegal dumping in the drain system, the wording and stencil shall be approved by the City Engineer. 57. Ten year storm runoff should be contained within the curb and the 100 year storm runoff should be contained within the street right-of-way. When either of these criteria are exceeded, drainage facilities should be installed. 58. Developer shall be subject to all Master Planned Drainage fees and will receive credit for all Master Planned Drainage facilities constructed. 59. Applicant will be required to install BMP's using the best available technology to mitigate any urban pollutants from entering the watershed. 60. Applicant shall provide the city with proof of his having filed a Notice of Intent with the Regional Water Quality Control Board for the National Pollutant Discharge Elimination System (NPDES) program with a storm water pollution prevention plan prior to issuance of grading permits. The applicant shall provide an SWPPP for post construction which describes BMP's that will be implemented for the development including maintenance responsibilities. ,..-., 61. Education guidelines and Best Management Practices (BMP) shall be provided to residents of the development in the use of herbicides, pesticides, fertilizers as well as other environmental awareness education materials on good housekeeping practices that contribute to protection of stormwater quality and met the goals of the BMP in Supplement "A" in the Riverside County NPDES Drainage Area Management Plan. 62. Applicant shall provide first blush BMP's using the best available technology that will reduce storm water pollutants from parking areas and driveway aisles. 63. Parking lot and roof runoff must go through a filtering system before draining to the public maintained storm drain and or provide permeable parking lot gutters. 64. Applicant shall cause to be recorded a CC&R's with recordation of final map which provides for irrevocable reciprocal parking, circulation, loading and landscape maintenance easement in favor of all lots subject to the approval of the director of Community Development & the City Attorney. The CC& R's shall enforce standards of building maintenance, participation in landscape maintenance, prohibition of outside vehicle or material storage. 65. In accordance with the City's Franchise Agreement for waste disposal & recycling, the applicant shall be required to contract with CR&R Inc. for removal and disposal of all waste material, debris, vegetation and other rubbish generated during cleaning, demolition, clear and grubbing or all other phases of construction. /- Agenda Item No. \ C page~ of ~"?:> Page 12 City Council Meeting Minutes - March 14, 2006 BUSINESS ITEMS ,."", 31. Second Reading - Ordinance No. 1170 - Authorizing the levy of a Special Tax within Annexation Area No. 17 (Summerly) annexed to said District. MOVED BY SCHIFFNER, SECONDED BY KELLEY TO ADOPT ORDINANCE NO. 1170 AUTHORIZING THE LEVY OF A SPECIAL TAX WITHIN ANNEXATION AREA NO. 17 (SUMMERL Y) ANNEXED TO SAID DISTRICT. Councilmember Buckley noted an error in the voting of the first reading of the Ordinance. He indicated that he had voted no. ORDINANCE NO. 1170 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, ACTING AS THE LEGISLATIVE BODY OF CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2003-1 (LAW ENFORCEMENT, FIRE AND PARAMEDIC SERVICES) AUTHORIZING THE LEVY OF A SPECIAL TAX WITHIN ANNEXATION AREA NO. 17 (SUMMERL Y) ANNEXED TO SAID DISTRICT UPON THE FOLLOWING ROLL CALL VOTE: ~ AYES: COUNCILMEMBERS: HICKMAN, KELLEY, SCHIFFNER, MAGEE NOES: COUNCILMEMBERS: BUCKLEY ABSENT: COUNCILMEMBERS: NONE ABSTAIN: COUNCILMEMBERS: NONE 32. Second Reading - Ordinance No. 1171 - Authorizing the levy of a Services Special Tax and Special Tax. ,...." Agenda Item NO.~ Page1Lof ~3 Page 13 City Council Meeting Minutes - March 14,2006 ,.,.-. MOVED BY KELLEY, SECONDED BY SCHIFFNER TO ADOPT ORDINANCE NO. 1171 AUTHORIZING THE LEVY OF A SERVICES SPECIAL TAX AND SPECIAL TAX. ORDINANCE NO. 1171 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, AUTHORIZING THE LEVY OF A SERVICES SPECIAL TAX AND A SPECIAL TAX UPON THE FOLLOWING ROLL CALL VOTE: AYES: COUNCILMEMBERS: HICKMAN, KELLEY, SCHIFFNER, MAGEE NOES: COUNCILMEMBERS: NONE ,..-.. ABSENT: COUNCILMEMBERS: NONE ABSTAIN: COUNCILMEMBERS: BUCKLEY 33. Second Reading - Ordinance No. 1172 - Approving Zone Change No. 2005-02. MOVED BY SCHIFFNER, SECONDED BY HICKMAN TO ADOPT ORDINANCE NO. 1172 APPROVING ZONE CHANGE NO. 2005-02. /--- ORDINANCE NO. 1172 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, APPROVING ZONE CHANGE NO. 2005-02 CHANGING THE ZONING DESIGNATION OF THE PARCEL(S) SPECIFICALLY DESCRIBED AS ASSESSOR PARCEL NUMBER'S 379-150-001, 002, 041, 042, 043, & 044 FROM R-E (ESTATE SINGLE-FAMILY RESIDENTIAL DISTRICT) TO R-l (SINGLE-FAMILY RESIDENTIAL DISTRICT) UNDER THE ZONING ORDINANCE Agenda Item No. \ c.. Page~Of~ Page 14 City Council Meeting Minutes - March 14,2006 UPON THE FOLLOWING ROLL CALL VOTE: ....., AYES: COUNCILMEMBERS: BUCKLEY, HICKMAN, KELLEY, SCHIFFNER, MAGEE NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: NONE ABSTAIN: COUNCILMEMBERS: NONE 34. Second Reading - Ordinance No. 1173, Adding Chapter 17.69 to Title 17 of the Lake Elsinore Municipal Code to prohibit the establishment of medical marijuana dispensaries in the City of Lake Elsinore. David Travers, 15081 Joy Street, commented that he was not a drug addict and was in support of medical marijuana. He further commented that the State allowed for Cooperatives. ~ Douglas Lanphere, Lake Elsinore, commented that he was in favor of medical marijuana. He commented on comments made at a previous Council meeting regarding medical marijuana. He commented on the difficulty for patients in the area to fill their prescriptions. He noted the distance they currently drive to dispensaries located in the desert cities. Mr. Lanphere commented that Police Chief Fetherolf hastily brought the item before the Council. He indicated that Police Chief Fetherolf bypassed the Public Safety Advisory Commission which took an important public input opportunity away from the patients and advocates. He noted that collectives and cooperatives could exist under the State law. He questioned where the City would permit a facility. He indicated that a comprehensive study and report addressing collectives and cooperatives should be done by staff. City Attorney Leibold commented that Council had received both a red line copy of the Ordinance showing the changes made by staff. She commented '"'-" Agenda Item NO.~ Page \'-\ of (). 3> Page 15 City Council Meeting Minutes - March 14, 2006 /"""' that in the first recital staff referenced both the medical marijuana program and the Compassionate Use Act. She noted that in the actual text on page 2 of 8 in the LEMC Section 17.69.010, staff only mentioned the Compassionate Use Act and not the medical marijuana program. She noted that staff would make the correction in the first section, paragraph A, and reference both sections 11362.5 and 11362.7. She noted that the provision that staff added would not conflict with State Law. She noted that this Ordinance was to prohibit the permitting of retail/store front type establishments. MOVED BY SCHIFFNER, SECONDED BY KELLEY TO ADOPT ORDINANCE NO. 1173 ADDING CHAPTER 17.69 TO TITLE 17 OF THE LAKE ELSINORE MUNICIPAL CODE TO PROHIBIT THE ESTABLISHMENT OF MEDICAL MARIJUANA DISPENSARIES IN THE CITY OF LAKE ELSINORE. Mayor Magee commented that nothing in the Ordinance prohibited ~- cooperatives. ORDINANCE NO. 1173 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, ADDING CHAPTER 17.69 TO TITLE 17 OF THE LAKE ELSINORE MUNICIPAL CODE TO PROHIBIT THE ESTABLISHMENT OF MEDICAL MARIJUANA DISPENSARIES IN THE CITY OF LAKE ELSINORE ",,.....'. Agenda Item No. \ C Page\S of~> Page 16 City Council Meeting Minutes - March 14,2006 UPON THE FOLLOWING ROLL CALL VOTE: ...., AYES: COUNCILMEMBERS: BUCKLEY, HICKMAN, KELLEY, SCHIFFNER, MAGEE NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: NONE ABSTAIN: COUNCILMEMBERS: NONE 35. Request to reconsider Commercial Design Review No. 2005-06 (Canyon Creek "Summerhill" Specific Plan). City Manager Brady gave an in-depth overview of the item. He commented that Council had denied the design revie~ on December 13,2005. He noted that Council Policy 105-A allowed for an applicant to submit a request for reconsideration to the City within 10-days. He clarified that the item before Council was a request for reconsideration and not the actual reconsideration ~ of the project. He commented that the applicant had significant outreach with the community since the December 13th meeting. Jason Leinen, 31520 Sagecrest Drive, commented that he was not there to represent every resident in the area. He indicated that he was cautiously optimistic. He thanked Mr. Trivedi on his outreach in the community. He indicated that there had been involvement from the City leaders to facilitate the dialogue between Mr. Trivedi and the community. He commented on the recently passed ordinance preventing parking on Canyon Estates Drive. He indicated that Mr. Trivedi had committed to some of their requests, which included a 24-hour security, prohibition ofRV's and semi-trucks, a policy for boat trailers, signage to encourage customer entrance from Summerhill Drive, signage to prohibit nonresident parking on side streets and design the hotel to have a minimum degradation of views to nearby homes. He further commented that Mr. Trivedi agreed to pay a fair share of the mello-roos. He expressed his support for the project. He noted that any further support from the residents was contingent on his commitments before the next meeting. He requested assistance from staff to ensure the commitments were enduring and enforceable. ...., Agenda Item NO.J..c. PageUof ;;;>>3> Page 17 City Council Meeting Minutes - March 14,2006 ,'-"" David Moon, Lake Elsinore, thanked Mr. Trivedi and Mayor Magee. He noted the conditions agreed upon by Mr. Trivedi. He noted that they would like to have the conditions in place before final approval of the project. He noted that they agreed to have night security patrol and the residents were requesting a performance bond be place with the project, which guaranteed the residents that there would be security patrol. He commented on the no parking on Canyon Estates Drive. He indicated that they agreed to provide residents with a 24-hour hotline number if guests from the hotel parked on Ridgecrest Drive, Saddle Ridge Drive and Boulder Vista Drive. He commented on signage. He noted that they would like a clearly marked entrance off Summerhill Drive with signage to help alleviate traffic. He noted that they were not 100% comfortable with the hotel in their neighborhood; and they would strongly oppose any future hotels on any of the remaining lots on Summerhill Drive. He expressed that the residents were misled about the details of this project. ,,,---- Kim Cousins, Lake Elsinore V alley Chamber of Commerce President, commented that the Chamber Board of Directors was very interested in the project. He noted that the City was in need of hotels. Sachin Trivedi, Holiday Inn Express, commented that progress was made. He noted that he made an error by not first addressing the concerns of the residents. He noted that the conditions were fair. Mayor Magee thanked the residents of the Summerhill area. He commented that Mr. Dixon was a major part in the communication process. He noted it was through communication that all parties were able to get to this point. Councilmember Buckley suggested that if the reconsideration was approved, that Mr. Trivedi continued to meet with the residents. Councilmember Hickman suggested that all the items be placed in writing. MOVED BY HICKMAN, SECONDED BY SCHIFFNER TO RECONSIDER COMMERCIAL DESIGN REVIEW NO. 2005-06 (CANYON CREEK "SUMMERHILL" SPECIFIC PLAN) HOLIDAY INN EXPRESS WITH THE CHANGES DISCUSSED BY BOTH THE APPLICANT AND ,,-. RESIDENTS AND DIRECT STAFF TO BRING THE ITEM BEFORE COUNCIL ON APRIL 18, 2006. Agenda Item No, \ L Page \ 1 of ;23 Page 18 City Council Meeting Minutes - March 14,2006 Councilmember Kelley commended the residents and Mr. Trivedi on the ~ progress made. She noted that she was in support of the project. She expressed her concerns of misinformation in the community. Mayor Magee commented that the mello-roos issued would need to be worked out with staff. He noted that this issue set a precedent for other properties in the area yet to be developed. He noted that whether or not it could be accomplished, Mr. Trivedi had expressed a willingness to address the inconsistency between his property assessment and resident's assessment. FOREGOING MOTION CARRIED BY UNANIMOUS VOTE. 36. Planning Commission Appointment Process. Mayor Magee introduced the item and deferred to City Manager Brady. City Manager Brady gave an in-depth overview of the item. He noted that Commissioner Larimer had recently submitted her resignation and her last meeting date would be April 4th. He noted the resignation of Fred Francia in ~ December. He commented on the application process. He noted staffs recommendations. Ron LaPere, 16867 Wells Street, concurred with staff recommendations. Mayor Magee indicated that he had discussed the possible appointment with Mr. Jimmy Flores. He indicated that Mr. Flores was a business owner and was raising a third generation in the community. He commented that Mr. Flores understood that it was an interim position and if he wanted to continue he would need to reapply and go through the recruitment process. Mayor Magee noted that just before the 7 :00 p.m. meeting he was made aware that there were in fact two applications on file in the Clerk's Office. MOVED BY MAGEE, SECONDED BY KELLEY TO ACCEPT COMMISSIONER LARIMER'S RESIGNATION AND TO APPOINT JIMMY FLORES TO THE INTERIM PLANNING COMMISSION POSITION AND TO SELECT MAYOR PRO TEM SCHIFFNER AND COUNCILMEMBER HICKMAN SERVE AS THE SUBCOMMITTEE AND .....", Agenda Item No. \ c- Page va of J. ~ Page 19 City Council Meeting Minutes - March 14, 2006 ,r-- DIRECT STAFF TO ADVERTISE FOR THE PLANNING COMMISSION POSITIONS AND ESTABLISH THE DEADLINE AS FRIDAY, APRIL 28, 2006 AND THAT APPLICATIONS CURRENTLY ON FILE WOULD BE INCLUDED IN THE PROCESS. Councilmember Buckley inquired if it would be possible to advertise Commission openings in the next Outlook. Information/Communications Manager Dennis responded that it would not be possible. Councilmember Buckley suggested purchasing space in the local newspaper. Mayor Magee suggested contacting Com cast to have the advertising placed. FOREGOING MOTION CARRIED BY UNANIMOUS VOTE. THE REGULAR CITY COUNCIL MEETING WAS RECESSED AT 8:00 ~-. P.M. THE REGULAR CITY COUNCIL MEETING RECONVENED AT 8:02 P.M. PUBLIC COMMENTS - NON-AGENDIZED ITEMS - 3 MINUTES No comments. CITY MANAGER COMMENTS 1) Announced the following upcoming events: Mar 18th Mar 18th Mar 25th Mar 26th Fine Arts for Great Kids art exhibit and entertainment Lake Elsinore Little League opening day Factory Free-style Moto X and music festival Open Air Farmers Market/Street Fair CITY ATTORNEY COMMENTS ~, No comments. Agenda Item No. \ C Page \~ of J 3> -- Page 20 City Council Meeting Minutes - March 14,2006 COMMITTEE REPORTS ....., None. CITY TREASURER COMMENTS No comments. CITY COUNCIL COMMENTS Councilmember Kelley commented on the following: 1) Noted the Boys & Girls Club fundraiser would be held Saturday, May 20th at Diamond Stadium. She noted that there would be an advertisement. Mayor Pro Tem Schiffner commented on the following: 1) Thanked the citizens for attending the Council meeting. 2) Noted he was pleased to see the residents and the developer come to an agreement relating to Business Item No. 35. .....", Councilmember Hickman commented on the following: 1) Commended the residents and the developer relating to Business Item No. 35. 2) Noted the John Henry Co. located off Corydon would be selling gift items on March 25th. He indicated that they were reasonably priced for baskets and ribbons, vases and gifts. He noted that they imported from China. 3) Noted Arreverdirci Roma was a new restaurant on Riverside Drive. Councilmember Buckley commented on the following: 1) Wished everyone a happy St. Patrick's Day. .....", Agenda Item No. \ C Page dO of ;1:5 Page 21 City Council Meeting Minutes - March 14, 2006 ,,-.. Mayor Magee commented on the following: 1) Requested an update on the Home Depot improvements on Highway 74. City Manager Brady commented that there were several obstacles. He indicated that there was an old well that had to be abandoned in the right-of- way. He indicated that staff wanted the improvements completed as quickly as possible. He noted staff had been working with Home Depot to speed up the process. City Engineer Seumalo commented that his staff had been working with Home Depot. He further commented that he was assured that he would be given a schedule as soon as one was available. Mayor Magee commented that he was told by their Superintendent it would be three weeks and it had now been six weeks. "..--- City Engineer Seumalo commented that there were issues with the Edison power lines and a well that needed to be filled in. He noted that they had the proper approvals from Caltrans and everything was moving forward. 2) Requested an update on the Railroad Canyon/I -15 Interchange Improvements. City Engineer Seumalo commented that work would start on April3rd. He noted that the contractor was in the process of gathering equipment and proper personnel. 3) He commented on Mr. Lanphere's comments regarding the cable franchise negotiations. He expressed that he felt Comcast provided an exceptional amount of public service, but that did not mean one should not ask for more. He indicated that he personally sent a letter to Time Warner and that he had asked staff to send a letter requesting Time Warner include our local television station KZSW. He indicated that the station had local news and the reporters were mobile. He noted that he would push to have that place in the Com cast contract. /- Agenda Item No. \ c.... page.;1\ of ;)..3 -- Page 22 City Council Meeting Minutes - March 14, 2006 4) He commented that there was an annexation request in the process at this time. He indicated that he had met with members of the Wildomar community and they had expressed a desire to speak with the Council about their efforts for city-hood. He noted that he had also spoke with George Spiliotis, Director ofLAFCO. He commented that Mr. Spiliotis had agreed to meet with the Council on March 30th and give a presentation on the LAFCO process, Wildomar's attempt for city-hood and answer questions. ......, Councilmember Buckley commented that a presentation from both LAFCO and Wildomar Incorporation Now (WIN) was a good idea. He suggested 15 minutes for each presentation. Mayor Magee agreed. Mayor Pro Tern Schiffner noted that he would be interested in the information provided by the officials that knew the rules and the process. He did not have as much interest in the comments of the Wildomar committee. He explained that it was not the City's business. Councilmember Kelley noted that she would also like a presentation by......, LAFCO explaining the process. She noted the Wildomar city-hood or sphere of influence should be filtered through the General Plan Advisory Committee (GP AC). She noted the annexation and the LAFCO process were separate issues. Mayor Magee noted that the WIN committee had spoken with staff and there was a misunderstanding about the proposed sphere of influence. He indicated that he would like to end the misunderstanding and improve the communication. Councilmember Buckley clarified that there would be a presentation from LAFCO, The WIN Committee and GP AC. Mayor Magee questioned the presentation from GP AC. Councilmember Kelley indicated that she would be interested in their comments. ......, Agenda Item No. \ C pagYof J.3 Page 23 City Council Meeting Minutes - March 14,2006 ".-. Mayor Magee noted the GP AC was revising their timeline to have something into staff by June. Mayor Magee, with concurrence of Council, agreed to schedule the meeting at 4 p.m. March 30th; and directed staff to contact the WIN Committee and notify them of the meeting, The Regular City Council Meeting was adjourned at 8:17 p.m. ROBERT E. MAGEE, MAYOR CITY OF LAKE ELSINORE ATTEST: --- FREDERICK RAY, CITY CLERK CITY OF LAKE ELSINORE ,,-, Agenda Item NO.~ page~3of ~3 -- MARCH 30, 2006 CITY OF LAKE ELSINORE WARRANT SUMMARY ~ FUND# FUND DESCRIPTION TOTAL 100 GENERAL FUND $ 1,251,207.99 105 MISCELLANEOUS GENERAL PROJECT FUND 21,898.64 110 STATE GAS TAX FUND 285.62 112 TRANSPORTATION/MEASURE A FUND 135.72 130 LIGHTING/LANDSCAPE MAINTENANCE FUND 11,919.49 135 L.L.M.D. NO.1 FUND 4,750.00 150 C.D.B.G. FUND 407.16 204 SIGNAL C.I.P. FUND 3,063.63 205 TRAFFIC IMPACT FEE FUND 20,275.83 231 LIBRARY C.I.P. FUND 3,195.95 254 89-1 RAILROAD CANYON IMPROVEMENT FUND 1,227.80 351 AD. 87-2 DEBT SERVICE FUND 820.65 352 A.D. 86-1 DEBT SERVICE FUND 1,258.57 353 A.D. 89-1 DEBT SERVICE FUND 2,628.80 356 AD. 90-1A DEBT SERVICE FUND 2,590.45 357 C.F.D. 2003-02 DEBT SERVICE FUND 19,695.00 358 C.F.D. 91-2 DEBT SERVICE FUND 1,350.00 360 AD. 93-1 DEBT SERVICE FUND 3,356.54 362 C.F.D.95-1 (1996-E) DEBT SERVICE FUND 59,377.92 363 C.F.D. 88-3 (III 1997-A) DEBT SERVICE FUND 2,025.00 366 C.F.D. 2005-6 CITY CENTER DEBT SERVICE FUND 9,450.00 367 C.F.D.2006-1 SUMMERL Y/LAING DEBT SERVICE FUND 10,000.00 369 C.F.D. 2004-3 ROSETTA CANYON DEBT SERVICE FUND 2,025.00 /- 371 C.F.D.2005-1 SERENTIY DEBT SERVICE FUND 1,730.00 372 C.F.D. 2005-2 ALBERHILL RANCH DEBT SERVICE FUND 2,120.00 373 C.F.D. 2005-5 WASSON CANYON DEBT SERVICE FUND 190.00 376 C.F.D. 2006-3 LA STRADA DEBT SERVICE FUND 3,750.00 604 ENDOWMENT TRUST FUND 500.00 608 TRUST DEPOSIT AND PRE-PAID EXPENSE FUND 2,875.00 616 FIRE STATION TRUST FUND 257.50 620 COST RECOVERY SYSTEM 23,184.43 650 C.F.D.2003-1 LAW & FIRE SERVICE FUND 4,250.00 GRAND TOTAL $ 1,471,802.69 "..- 4/4/2006 Warrant 033006 1 of 1 AGENDA ITEM NO. ;2. PAGE I OF S MARCH 30, 2006 CITY OF LAKE ELSINORE CHECK# VENDOR NAME 85063 STATE COMPENSATION INSURANCE FUND 85093 VOID (CASA MUNRAS HOTEL) 85168 VOID (LEAGUE OF CALIFORNIA CITIES) 85265 STANDARD INSURANCE COMPANY 85266 STANDARD INSURANCE COMPANY 85267 PRE-PAID LEGAL SERVICES, INC. 85268 L1UNA-LOCAL 777 85269 THE L.I.U. OF N.A. 85270 UNION BANK OF CALIFORNIA 85271 DRIVER ALLlANT INSURANCE 85272 ICMA RETIREMENT TRUST 85273 AL TURA CREDIT UNION 85274 CALIFORNIA P.E.R.S. 85275 UNION BANK OF CALIFORNIA 85277 VOID 85278-85281 A & A JANITORIAL SERVICE 85282 ACTION PARK ALLIANCE, INC. 85283 LISA C. ALEXEN 85284 ALL PHASE REFRIGERATION & AIR CONDITIONING, INC. 85285 AMERICAN CLASSIC CATERING 85286 AMERICAN FENCE COMPANY, INC. 85287 AMERICAN FORENSIC NURSES 85288 AMERICAN PLANNING ASSOCIATION 85289 AMERICAN PUBLIC WORKS ASSOCIATION 85290 APPLE ONE EMPLOYMENT SERVICES 85291 ARTISAN GOLDSMITHS & AWARDS 85292 RAFAEL AYALA 85293 THE BAG LADY SANDBAGS 85294 BILL BELVIN 85295 BERRYMAN & HENIGAR, INC. 85296 JIM BIZZEL 85297 MICHAEL SCOTT BURNS 85298 STATE OF CALIFORNIA, DEPARTMENT OF JUSTICE 85299 CANON FINANCIAL SERVICES, INC. 85300 JOHN CARLSON 85301 CITICORP VENDOR FINANCE, INC. 85302 CITY & COUNTY SOIL ENGINEERING, INC. 85303 CNH CAPITAL AMERICA, L.L.C. 85304 COST RECOVERY SYSTEMS, INC. 85305 KIRT A. COURY 85306 CUTTING EDGE STAFFING, INC. 85307 CUTTING EDGE SUPPLY 85308 D & SELECTRIC 85309 DAPEER, ROSENBIL T & LITVAK, L.L.P. 85310 DELL SERVICES SALES 85311 DEPUTY ANDY IVAR 85312 DO IT CENTER 85313 CAROLE K. DONAHOE, A.I.C.P. 85314 DORAL DESERT PRINCESS 85315 DOWNS COMMERCIAL FUELING, INC. 85316-85319 ELSINORE VALLEY MUNICIPAL WATER DISTRICT 85320 EILEEN'S CLEANERS 85321 ELITE ELEVATOR, INC. 4/4/2006 Warrant 033006 1 OF 4 WARRANT LIST AMOUNT $ 14,517.71.""" (557.93) (490.00) 288.42 1,962.53 1 03.60 1,154.00 2,496.30 54,760.04 1 ,247.00 4,819.00 1,150.00 36,442.93 42,016.02 0.00 7,528.68 4,166.00 141.15 822.90 2,4 78.25 60.00 518.90 395.00 550.00 3,021.31 2,156.46 500.00....." 720.00 195.00 2,433.09 1,351.50 129.29 210.00 1,038.96 168.75 770.41 1,990.00 3,251.42 4,750.00 4,724.98 2,940.00 2,625.00 4,390.00 1,445.65 996.00 40.00 230.07 3,367.70 434.07 1,815.68 13,111.71 282.25 312.00 'willi' AGENDA ITEM NO. 02 PAGE c2 OF . S- MARCH 30. 2006 CITY OF LAKE ELSINORE ..-- CHECK# 85322 85323 85324 85325 85326 85327 85328 85329 85330 85331 85332 85333 85334 85335 85336 85337 85338-85341 85342 85343 85344 85345 85346 85347 85348 ,-, 85349 85350 85351 85352 85353 85354 85355 85356 85357 85358 85359 85360 85361 85362 85363 85364 85365 85366 85367 85368 85369 85370 85371 85372 85373 ,_ 85374 35375 85376 VENDOR NAME ELSINORE ELECTRICAL SUPPLY, INC. EMPIRE ECONOMICS, INC. FAITH BAPTIST CHURCH FARMER BROTHERS CO. FEDERAL EXPRESS CORPORATION FERGUSON GROUP, L.L.C. STEPHANIE FERGUSON FIRST AMERICAN REAL ESTATE SOLUTION FRANKLIN COVEY GFI RACING GOLDEN OFFICE TRAILERS, INC. MARIA GOMEZ GRAINGER INDUSTRIAL SUPPLY ARLINE GULBRANSEN MAJED HADDADEN HAROLD STEPHENS PLUMBING CO. HARRIS & ASSOCIATES, INC. HARRIS & ASSOCIATES, INC. IMPACT PROMOTIONAL PRODUCTS INLAND EMPIRE LOCK & KEY INTERNATIONAL LATINO GANG INVESTIGATORS ASSOCIATION JAMES GONZALEZ DE JANDA JEFF HAUSER MOBILE WELDING LUIS JUBANY LAKE CHEVROLET LAKE ELSINORE GIRLS SOFTBALL LAKE ELSINORE STORM LAKE LAND MARINE LAKESHORE HOMES & DEVELOPMENT, INC. LAMBERT FLOORING LEAR AUTO BODY & TOWING LIBRARY SYSTEMS & SERVICES, L.L.C. L1M & NASCIEMENTO ENGINEERING CORP. THE MARK FISHER COMPANY SANDRA MASSA-LA VITT MAYHALL PRINT SHOP MBIA LINDA M. MILLER ELIZABETH MIRELES MOBILE SATELLITE VENTURES, L.P. MORROW PLUMBING, INC. MORROW PLUMBING, INC. MOISES MUNUZ NATIONAL NOTARY ASSOCIATION NBS GOVERNMENT FINANCE GROUP NEXTEL COMMUNICATIONS OCB REPROGRAPHICS OFF RAMP CAFE OUTDOOR DIMENSIONS P.F. PETTIBONE & COMPANY PARDEE HOMES 4/4/2006 Warrant 033006 2 OF 4 WARRANT liST AMOUNT 2,090.46 22,000.00 500.00 77.37 104.88 21.25 25.00 125.20 123.15 1,000.00 269.38 25.00 15.73 128.71 25.00 185.00 219,509.21 22,400.00 50.00 850.40 500.00 25.00 188.25 2,280.00 25.00 256.94 25.00 69,400.00 372.23 6,243.00 1,990.00 1,999.59 3,195.95 20,423.40 560.00 6,692.40 86.20 204.61 5,115.00 140.00 74.04 73.47 621.39 25.00 59.00 10,655.01 1,594.38 412.25 25.00 500.00 432.70 258.53 AGENDA ITEM NO. PAGE..3 OF ~ .5 MARCH 30, 2006 CITY OF LAKE ELSINORE CHECK# VENDOR NAME 85377 STEVE PETERSEN 85378 PETTY CASH 85379 PHD PENSKE LEASING 85380 PREMIUM PALOMAR MOUNTAIN SPRING WATER 85381 THE PRESS ENTERPRISE 85382 PRESSING FAITH MINISTRIES 85383 PRO PET DISTRIBUTORS 85384 PRODUCTION VIDEO 85385-85386 PRUDENTIAL OVERALL SUPPLY 85387 QUILL CORPORATION 85388 R. DAVID BULEN INSURANCE 85389 REBEL RENTS, INC. 85390 REEBOK 85391 REGIONAL CONSERVATION AUTHORITY 85392 RIGHTW A Y 85393 RIVCOMM, L.L.C. 85394 RIVERSIDE COUNTY FIRE DEPARTMENT 85395 RIVERSIDE COUNTY RECORDER 85396 COUNTY OF RIVERSIDE, OFFICE OF THE AUDITOR-CONTROLLER 85397 COUNTY OF RIVERSIDE, OFFICE OF ASSESSOR, GARY L. ORSO 85398 COUNTY OF RIVERSIDE, BOB DOYLE, SHERIFF 85399 ROBERTS MONEY SAVERS THRIFT 85400 ROTARY CLUB OF LAKE ELSINORE 85401 S.S. BURGER BASKET 85402 SADDLEBACK CONSTRUCTION SPECIALTIES 85403 SADDLEBACK MATERIALS COMPANY,INC. 85404 SC ENGINEERING 85405 SCOTT FAZEKAS & ASSOCIATES,INC. 85406 SHERWIN-WILLIAMS CO. 85407 SIMPLOT PARTNERS 85408 KATHLEEN R. SMITH 85409 DAVID S. SOLOMON 85410-85415 SOUTHERN CALIFORNIA EDISON CO. 85416 SPRINT 85417-85418 STAPLES CREDIT PLAN 85419 STAUFFER'S LAWN EQUIPMENT 85420 PEGGY J. STORAASLI 85421 BOB STOVER, INC. 85422 SUNGARD HTE, INC. 85423 TEAM AUTOAID, INC. 85424 TEMECULA COPIERS 85425 TEMECULA VALLEY PIPE & SUPPLY 85426 TEMPLETON PLANNING GROUP 85427 TEXTRON FINANCIAL CORPORATION 85428 TOP-LINE INDUSTRIAL, INC. 85429 UNIFORM SPECIALIST 85430 UNION BANK OF CALIFORNIA 85431 UNITED PARCEL SERVICE 85432 VAVRINEK, TRINE, DAY & CO., L.L.P. 85433 VENUS PRINTING 85434 VERIZON CALlFORNIA,INC. 85435 VERIZON EQUIPMENT SALES & SERVICE 85436 MANUEL VILLAGOMEZ WARRANTUST AMOUNT 25.00 .""'" 321.53 898.58 284.20 10,593.23 25.00 746.90 270.00 390.43 1,214.34 25.00 360.91 25.00 56,785.80 100.78 2,730.55 486,738.73 22.00 2,230.00 15.00 913.95 25.00 55.00 25.00 257.50 855.20 17,875.47 ""'" 11,777.06 470.07 1,034.40 309.37 3,630.51 15,602.18 241.71 2,956.57 137.77 154.00 8,054.13 1,220.97 403.46 1,229.26 544.57 20,011.96 987.13 190.71 1,294.18 6,437.88 246.33 1,100.00 1,678.45 912.04 680.74 500.00 ""'" 4/4/2006 Warrant 033006 30F 4 AGENDA ITEM NO. ;). PAGE Lj OF.5 MARCH 30, 2006 CITY OF LAKE ELSINORE WARRANT liST ,..-- CHECK# 85437 85438 85439 85440 85441 85442 85443 85444 VENDOR NAME WACHOVIA EDUCATION FINANCE WEST COAST TURF WEST COAST WINDOW CLEANING WESTERN PACIFIC SIGNAL, L.L.C. WILLDAN Z-BEST PAINT ZIEGLER & SON PUBLISHING ZONES.COM AMOUNT 2,251.00 2,809.61 450.00 564.68 2,720.00 1,977 .26 2,495.00 166.95 TOTAL PIE DATE: $ 1,319,000.93 03/17/06 03/17/06 PAYROLL TAXES PAYROLL CASH 45,449.94 107,351.82 GRAND TOTAL $ 1,471,802.69 ....- ,,,--.. 4/4/2006 Warrant 033006 40F 4 AGENDA ITEM NO. d. PAGE S OF.5 ,......... CITY OF LAKE ELSINORE REPORT TO CITY COUNCIL TO: MAYOR AND CITY COUNCIL FROM: ROBERT A. BRADY, CITY MANAGER DATE: APRIL 11,2006 SUBJECT: CLAIMS AGAINST THE CITY BACKGROUND Claims filed against the City ofLake Elsinore are reviewed and handled by Carl Warren & Company, Claims Administrators. When received, each claim is logged in the City Clerk's Office and forwarded to this company for investigation. After initial review and investigation, direction is issued to the City to take one of several actions such as rejection, notification of late claim or reservation of action until further information is obtained. /-, DISCUSSION The following claitm have been recommended for rejection by Carl Warren & Company: CL#2006-6 - Warner T. Reid CL#2006-9 - Denise Tedrow CL#2006-10 - Kelly Bold FISCAL IMPACT None. RECOMMENDATION Reject the claims listed above and direct the City Clerk to send letters informing the claimants of this decision. /-- Q ACENOA'TEMNO.~ PACE_ \ _OF_ f- REPORT TO CITY COUNCIL APRIL 11, 2006 PAGE 2 ......, PREPARED BY: FREDE APPROVED FOR AGENDA BY: ....., ..~ ACENDA ITEM NO._ j PACE 'J- _OF _112--- ,r- RECEIVED MAR 1 3 2006 March 9, 2006 CITY CLERKS OFFICE TO: The City of Lake Elsinore ATTENTION: Frederick Ray, Risk Manager RE: Claim Claimant DlEvent Rec'd Y /Office Our File Reid vs. The City of Lake Elsinore Warner T. Reid 2/11/2006 3/6/2006 S-1420366-RWQ We have received and reviewed the above claim and request that you take the action indicated below: CLAIM REJECTION: Send a standard rejection letter to the claimant. ~. Please provide us with a copy ofthe notice sent, as requested above. If you have any questions please contact the undersigned. Very truly yours, CARL WARREN & COMPANY ~~ Rich a D. Marque cc: CJPIA w/enc. Attn.: Executive Director ~ CARL WARREN & CO. CLAIMS MANAGEMENT CLAIMS ADJUSTERS 770 Placentia Avenue, Placentia, CA 92870-6832 Mail: P.O.Box25180.SantaAna.Ca 92799-5180 Phone: (714) 572-5200 . (800) 572-6900. Fax: (714) 961-8131 ~ ACENDA ITEM NO'-rr~-- PAGE3 _Of~. -------- City of 1!akE Ef1-ln.O'l-E dforne of the ~iamond ~taciLwn ......."" March 6, 2006 Dwight Kunz Carl Warren & Company P.O. Box 25180 Santa Ana CA 92799-5180 Dear Mr. Kunz: Enclosed for your handling is a claim received on March 6, 2006 from Warner T. Reid (CL #2006-6). Please keep me advised of appropriate City Council Action. ~ For further assistance, please contact me at (951) 674-3124 ext. 262. Sincerely, ~ FREDERIC RAY, CITY CLERK CITY OF LAKE ELSINORE Enclosure cc: City Manager AGENDA ITE~O. ) PAGE -, OF-11e-- ......."" 730 c:South cMain c:Shut, LakE. E[~ino'tE., (!c::4 92530 · fJE.[E.phonE.: (909) 674-3124 gax: (909) 674-2392 RECEIVED ,~ CLAIM AGAINST THE CITY OF LAKE ELSINORE (For Damages to Persons or Personal Property) MAR 0 6 2006 CITY CLERKS OFFICE Rec~2~ (TimelDate Received) A claim must be filed with the City Clerk of the City of Lake Elsinore, within six (6) months after the incidentore event occurred. Be sure your claim is against the City of Lake Elsinore, not another public entity. Where space is insufficient, please use additional paper and identify information by paragraph number Completed claims must be mailed or delivered to the City Clerk, City of Lake Elsinore, 130 South Main Street, Lake Elsinore, California, 92530. TO TIlE HONORABLE MAYOR AND CITY COUNCIL, CITY OF LAKE ELSINORE, CALIFORNIA: ----- The undersigned respectfully submits the following claim and information relative to damage to persons and/or personal property: 1. NAME OF CLAIMANT Warner T. Reid Address of Claimant 290 Moroni Avenue ,~ake Ell~sinore, CA 92530 ~ ~~ . Phone No. (51) 674=1104 c. Date of Birth 9/28 / 45 a. b. d. Social Security No. 5~1 - 58-1882 e. Drivers Lic. No. NO 589241 2. Name, post office address and telephone to which claimant desires notices to be sent, if other than the above: 3. Occurrence or event from which this claim arises: a. Date 11 4rebruary 2006 b. Time 9: 1 5 AM c. Place (Exact and specific location) Intersection of Moroni Ave and Heald St. d. How and under what circumstances did damage or injury occur? Specify the particular occurrence, event, act or omission you claim caused the injury or damage (use additional paper if necessary). I departed m~ residence at 290 Moroni Avenue at 9: 1 5 AM to attend a meeting in Fallbrook at 10:00 AM. Since it was going to be a nice day, I decided to ride my motorcycle. $continued on Wh . I . b th C' . f' I dth II dd . ad.di tional sheet) e. at partlCU ar action y e Ity 0 Its emp oyees,cause ea ege . amage or mJury? ~ The entire intersection was cov&red with sand from bIDoken sandbags placed above the intersection for flood control. The weekly scheduled street sweeper had not been through the area for months. ACENDA ITEM NO. ..3 "''''''r''.~ jP,c \( II ....., 4. Were there any injuries at the time of this accident? Ifnot, state "No injuries". No significant injuries. 5. Give the name(s) of the City employee(s) causing the damage or injury: Unknown. 6. Name and address of any person injured: N/A 7. Name and address of the owner of any damaged property: NtA 8. Damages claimed: a. b. c. d. Amount claimed as of this date $ 1. 007 . 1 5 Estimated amount offuture costs $-3-60.00 Total amount claimed $ .1 . 367 . 1 5 _ Basis for computation of amounts claimed (Include copies of all bills, invoices, estimates,etc): Items already purchaeed on EBay and estimates. ~ 9. Names and addresses of all witnesses, hospitals, doctors, etc: a. Lonny Due, 403 E. Heald. Lake Elsinore. CA Virginia Barnes, 286 E. Graham, Lake Elsin~re, CA b. c. Sergio Pelayo, 298 Moroni Ave... Lake Elsinore. CA 10. Any additional information that might be helpful in considering this claim: The street sweeper had not resumed his duties after the completion of construction on .the sewer. system. WARNING: IT IS A CRIMINAL OFFENSE TO FILE A FALSE CLAIM! (Penal code 72/Insurance Code 556.1) CLAIMANT'S SIGNA TURE: I have read the matters and statements made in the above claim and I know the same to be true of my own knowledge, except as to those matters state upon information or belief as to such matters, I believe the same to be true. I certify under penalty of perjury that the foregoing is TRUE AND CORRECT. SIGNED THIS .(, DAY OF ~ \~q# -=~ .~ ...... ,20~A T f...Ir:K..€ e:Lcs t,",i)~CALJFORNIA. '-' ACENDA ITEM NO. ~ PACE lp Of \ \{J -----. ~ Claim against the City of Lake Elsinore in the case of Warner T. Reid '--'" 3.d. (cont.) Since my wife is a motorcycle safety instructor, she insists I wear the appropriate safety equipment (padded coat, heavy boots, gloves). The scene of the accident is a block from the house, at the intersection of the Moroni Ave. and Heald. I approached the intersection in first gear in anticipation of the ninety degree left turn down the hill on Heald. As I made the left hand turn onto Heald, the front tire of my motorcycle hit sand that was in the middle of the street, lost traction, and went out from under the motorcycle, causing the motorcycle to roll to the left and crash in the middle of the street. The accident happened so fast I was unable to put either my hand or foot out to break my fall. One second I was upright, the next, I was laying on my left side in the street. Because I was wearing the proper safety equipment, I was not hurt (with the exception of some scrapes to 'my knee). The motorcycle was not so fortunate. There was damage to the gas tank, muffler, speedometer housing, headlight housing, headlight, left rear view mirror, left turn signal, crash bar, instrument cluster, and windscreen. .~ AGENDA ITEM NO. 3 PACE_LoF -1 <.e .~ ,~ ."...... March 27,2006 QECEIVED MAR 3 1 2006 -ERKS OFFICE TO: The City of Lake Elsinore ATTENTION: Frederick Ray, Risk Manager RE: Claim Claimant D/Event Rec'd Y/Office Our File Tedrow vs. The City of Lake Elsinore Denise Tedrow 9/18/2005 3/20/2006 S-1421333-RQ We have received and reviewed the above claim and request that you take the action indicated below: CLAIM REJECTION: Send a standard rejection letter to the claimant. ,--. Please provide us with a copy of the notice sent, as requested above. If you have any questions please contact the undersigned. Very truly yours, CARL WARREN & COMPANY ~ cc: CJPIA w/enc. Attn.: Executive Director ~ CARL WARREN & co. CLAIMS MANAGEMENT CLAIMS ADJUSTERS 770 Placencia Avenue, Placencia, CA 92870-6832 Mail: PD.Box25180.SantaAna.Ca 92799-5180 Phone: (714) 572-5200 . (800) 572-6900 . Fax: (714) 961-8131 AGENOA\TEM NO.~ PAOE5--0,'~ City of .-Cake Ef1-in.o'te d/-orru of the 2:Jlamond ~tad1wn ...., March 20, 2006 Dwight Kunz Carl Warren & Company P.O. Box 25180 Santa Ana CA 92799-5180 Dear Mr. Kunz: Enclosed for your handling is a claim received on March 20, 2006 from Denise Tedrow (CL #2006-9). Please keep me advised of appropriate City Council Action. """" For further assistance, please contact me at (951) 674-3124 ext. 262. Sincerely, ~-Jl/o1.J.h dJ/o Am FREDERICK RAY, CITY cli~ CITY OF LAKE ELSINORE Enclosure cc: City Manager > ACEN~~~:EM \~. OF \ l.p '""" 730 .:South d1I(ain .:Shut, Lake E[j.ino'te, {!c:IJ 92530 · Clefephone: (909) 674-3724 "Jax: (909) 674-2392 RECEIVED ..-- CLAIM AGAINST THE CITY OF LAKE ELSINORE (For Damages to Persons or Personal Property) MAR 2 0 2006 Recei CITY. CLERKS OFFiCE (TimeIDate Received) A claim must be filed with the City Clerk of the City of Lake Elsinore, within six (6) months after the incident ore event . . occurred. Be sure your claim is against the City of Lake Elsinore, not another public entity. Where space is insufficient, please use additional paper and identify information by paragraph number Completed claims must be mailed or delivered to the City Clerk, City of Lake Elsinore, 130 South Main Street, Lake Elsinore, California, 92530. TO THE HONORABLE MAYOR AND CITY COUNCIL, CITY OF LAKE ELSINORE, CALIFORNIA: The un~e'signed respectfully submits the following claim and information relative to damage to persons and/or personal property: 1. NAME OF CLAIMANT ~nise Tedrow a. Address of Claimant to!..? N lv1nl1nr::dn A"pnl1p #R <;79. lTr',mrl, r.A 91786 ..-- , , , . b. Phone No. (90~ 921:'69'.6 Social Security No. 56 1-02-6722 c. Date of Birth 10/ 19 (54 . d. e. Drivers Lie. No. N?t..r; ') 11 H 2. Name, post office address and telephone to which claimant desires notices to be sent, if otber than the above: Steven B. Effres. ESQ.. Effres & Associates. 24025 Park Sorrento. #240 Calabasas, CA 91302-4008; (818) 222-9720 . 3. Occurrence or event from which this claim arises: 8. Date Sep tember 18, 2005 b. Time 19:40 c. Place(Exactandspecificlocation) SR 74 unincorporated .area of Riverside Coun tv near River Road d. How and under what circumstances did damage Of injury occur? Specify the particular occurrence, event, act or omission you claim caused the injury or damage (use additional paper ifnecessary). Claimant was riding on a motorcycle when she was involved in a traffic acc iden t a s a resul t of a dangerou s condition of the roadway, a raised concrete apron. ,-' e. What particular action by tbe City of its employees, caused the aUeged damage or injury? The city is responsible for a dangerous condition of a public property pursuant to various sections of the Government Code, including, but not Hm".d to. a~O, 8~'. 830;G;::r~~\~OF~\V iC ~1f .~ 4. Were there any injuries at the time of this accident? Ifno!, state "No injuries". Claimant sustained severely comminuted fracture of the distal tibia . 'ilitk multiple bone.fragment:s Aua J.i.~I!I~~t:ilu:::uL. She also suffere(1a distal fibular fracture and a proximal fibular fracture. 5. Give the name(s) of the City employee(s) causing the damage OT injury: The identities of any Stich individual ~ ):ITP ('''......entl)' unkno'JR to claimant. 6. Name and address of any person injured: Claimant, Denise Tedrow, 1042 N. MOuntain Avenue #B 579, Upland, CA 91786 l(plly Bol d,9065 ms~ion Bl'HL, Rivcroiac, C.A.. 92509 7. Name and address of the owner of any damaged property: 8. Damages claimed: a. Amount claimed as of this date $ b. Estimated amount of future costs $ c. Total amount claimed $ d. Basis for computation ~famounts claimed (Include copies of all bills) invoices) estimates) etc): Total amount of claim' of claimant is presently unknown, but is in excess ofUO ,000 and :in QXSeC8 of the minimum juriadic tioR of the unlin.ited ......., Superior Court such that the action would be filed as an unlimited action 9. Names and addresses of all witnesses, hospitals) doctors, etc: (Gov I t Code Sect ion 910 (f) .) ar,l Ka i seT PF'TTT'Rnpn fop Hn ~p; fo):! 1) 9161 c. Kelly Bold. 9085 Mission Blvd. . Sierra j"QnU9, Fontan(~O~~ a~~~~OOO ?'l'l?n MplH{'):Il r.pnfop,. n";~7eo) Ml1"';ett~) ('A, (951) 696-6000 92562 Riverside, CA 92~Oq ('l~?)7'l~-1'l99 b. Inlan d Valley Reg. Me d. Cen foF'T , 10. Any additional information that might be helpful in considering this claim: WARNING: IT IS A CRIMINAL OFFENSE TO FILE A FALSE CLAIM! (penal code 72/Insurance Code 556.1) I have read the matters and statements made in the above claim and I know the same to be tIUe of my own knowledge, except as to those matters state upon information or belief as to such matters. I believe the same to be tme. I certify under penalty of peJjury that the foregoing is TRUE AND CORRECT. SIGNED TIllS 1 7 toll 7f7~ .20Q.5...,AT Ca 1 ):Iha ~~!': . CALIFORNIA. CLAIMANT'S SIGNATURE: Steven B. Effres, Esq. Attorney for Claimant Den ise Te drow ......", AGENDA lTEM NO. j. PAGE \ r Of }lo ;-- r. RECEIVED March 27, 2006 MAR 3 1 2006 CITY CLERKS 01 flCE TO: The City of Lake Elsinore ATTENTION: Frederick Ray, Risk Manager RE: Claim Claimant D/Event Rec'd Y /Office Our File . Bold vs. The City of Lake Elsinore Kelly Bold 9/18/2005 3/20/2006 S-1421333-RQ We have received and reviewed the above claim and request that you take the action indicated below: CLAIM REJECTION: Send a standard rejection letter to the claimant. ,--, Please provide us with a copy of the notice sent, as requested above. If you have any questions please contact the undersigned. Very truly yours, CARL WARREN & COMPANY ~~ cc: CJPIA w/enc. Attn.: Executive Director -- CARL WARREN & CO. CLAIMS MANAGEMENT CLAIMS ADJUSTERS 770 Placentia Avenue, Placencia, CA 92870-6832 Mail: P.O. Box 25180 . Santa Ana, ea 92799-5180 Phone: (714) 572-5200 . (800) 572-6900 . Fax: (714) 961-8131 :) AGENDA ITEM NO. _" _.. \ 1.. nc \ lc City of -L!ake Et1-in.o'l-e _ dtOmE of the 2Jiamond ~tculiwn March 20, 2006 Dwight Kunz Carl Warren & Company P.o. Box 25180 Santa Ana CA 92799-5180 Dear Mr. Kunz: Enclosed for your handling is a claim received on March 20, 2006 from Kelly Bold (CL #2006-10). Please keep me advised of appropriate City Council Action. '-' For further assistance, please contact me at (951) 674-3124 ext. 262. Sincerely, ~cLJle s;;t ~ FREDERICK RAY, CITY &~RK CITY OF LAKE ELSINORE Enclosure cc: City Manager ....., 130 douth dll(ain dluu, ~ake Efj.ino'te, (!c:4 92530 · Clefephone: (909) 674-3124 'Ja~909) 674-2392 AGENDA ITEM NO. PACE \ L\ OF \ \.p ";${.l U~tl"b J.'::: J. r . ------- r$ltVl:.( '~a '>...,*~ EFF:'RES& ASS \ I E'=: .PAEE B'2. ../ RECEIVED r- ~'..".'.."':"."~.~ ~.,-'~ ~ MAR 2 0 2006 CITY CLERKS OFFICE (t~Reeeived) . f A.claim: hlUItbetUtcl}Vftbtht.Qy ~~_ c:'tq <J.t~~~, w~.x (.)months....the ~_~ ;:::.:~'I;1r-:.~~..............~r::,~=_~~-::m,:~~edt() tbcCifyClm:. Cit.yofLa&ttt~I:;O.ItMhMWt ~ ~~ Qd~ m:ro. T()mEBONO~ MAYOR ANDCJTY COlJN(..~cr.ry tWLAKE ELSINOllLCALBrOltNlA: .r- 'l'fte~!Jip" ~~y wllmlu tU .fbllowJng daim _l~ti(;DnIIlatift to~. to pCJ1fOlU udtwpenctW pn,jpe:ty: 1. NAMJlO'tt.~ ~elly Bold 4 Addm.J<Jt~~085 Mission Blvd., CA b. PM.. N0. f; 1/) <;I ') '=\-55 5 5 d. Soc1at~Nn.5..6.6-12-1924 c. 92509 . DIuIomi1fi7/31/69 ~Lk~4650091 . ..J 0. 1. N.....poSt.~ ~ $'ld t~boM to wkith <iJti-.nt..... DOticu Kl ~ aomt, ifotht tUn M.thtwe: 3419 Via Lido,I607,Newport BeaCh, CA 92663 5---' . 3. ~or __~ whkh.thi!cl.Iri,~; .. naceQQ/l R/700,) b. ~7:40 pm e. Place~. n tpedflcloottionlllLJ 4 up i n Cor p 0 rat e d are a 0 f Rj y p r ~:i d f' I h Y R i v ~,r R 0 ad. Ii }trrwaOO undcIrwbat ~ did ~ Q.f~ ~ ~fY tIJe,.,.....~ evw, . aot.~.~you.~~ lho~or.....(...ttioblptlptll' tt~). At said time and plaCe, there was a dangerous Condition of p~QliC proR?rt~ (a ConCrete apron protruding from the ~.a..d.\I~ay; ), .wJ].j,s;:h. Causee the Claimant's Collision. f, '~~aI'~by.tbeCityotit$""~ ___that .n~~.ot"m~ Claimant while riding his mototCyCte was involved in a ~ollisiona~s a resblt~Qf ~ ~~ngerousd;ndition ot the .- -.---..,....---..--. roadway, a raised ConCrete apron. ,- AGENDA ITEM NO. :;, PAGE '5 OF \(.p ~3/17/2ee6 12:17 81822::' ~6 EFFRES & ASSO' TES PAGE: 83 ..."" -4.. Were there any Wuries at the time otthis acx:ide:m7Ifno~ ttato "No hijwies". 1'hpre was a broken arm, baCk and shoulder injuries,' and c- athers herein attallhed. s. Give the QB.l11e(J) oftlJe City empJoyee(s) caulingthe damase orin,iury: 'Ihe identities of _~'1y~_suCh indi viduals ar!e Cu.r-rently lnkU-WUIl L-u - Cl\:lillli::lll L . . 6. Name and addred of~ person injumi: ~elly Bold (see above for address) and Denise Tedrow, 240 b 7. Name and addresat:lftbe owner ofany damaged property: Kelly Bold (see above for address) i\. 8. Damages claimed: a. 1>. c. d Amountdaimeduoltbiadate S Over $10,000.'00 EatimatechmotJDt of future c>>sts $ ~ '" t t ~ b'e 80 t 51: m in e d Totahmount claimed $ . v e r 1 0 , u . u Basis for eomputatioD of amomQ ~ (Include copi.. ofitll bills. invoices, estimates, etc.): Exhibits attaOhed See 9. Names and addresses of all witlle~ bospital~ doetora. tto: a. enise Tedrow 24025 Park Sorrento, Ste 240, Calabassas,CA "-' b.~~~ attaChed please. c. 10. Any addition.aJ information that miEJht b. helpful in eoneidering thi$ claim: Not at this time. WARNING: IT IS A CRIMINAL OFJi'.ENSE TO II'J.I..E A FALSI: CLAIMf (peaaI code ~ Code 556.)) C1A.'IM.ANT'S SlGNATt1.R:E:--.- t have read the maltess end *fc:mcuta made in me above claim and I know the same 10 b6 true of my own bowIedge, e:lWept ..10 tIJo8e maneD state upon fa:ftnmationor boHet... $0 $Ud) mattcrs.l believe tbe same to be true. 1 ~ uDder peaky of per.juJytbatihe ~ ~ TltUB AND CORRBCT. SIGNm>1HIS \,1 DAYOP March ~<=- ~ .20~T ~V\kt. A-l1tt . CALlPORNlA """" AGENDA ITEM NO. PAOE \\.1 3 OF \ lp ,,-. CITY OF LAKE ELSINORE REPORT TO CITY COUNCIL TO: MA YOR AND CITY COUNCIL FROM: ROBERT A. BRADY, CITY MANAGER DA TE: APRIL 11, 2006 SUBJECT: PROFESSIONAL SERVICES AGREEMENT FOR ENVIRONMENTAL SERVICES BACKGROUND ~ On January 25th, 2005 the City Council directed Staff to implement Alternative Plan-2 of the supplemental engineering report for the Boat Launch Facility Rehabilitation project at" the LERA Campground. Prior to the City constructing the planned improvements, the City must comply with the California Environmental Quality Act (CEQA) and National Environmental Policy Act (NEP A), as well as obtain regulatory permits. A number of unknowns exist regarding the level of significance of environmental effects for the proj~ct. City Staff desires to contract with an experienced environmental firm to conduct an Initial Study to determine if the project may have a significant effect on the environment. The outcome of the Initial Study would conclude whether the City could adopt a Mitigated Negative Declaration (MND) or prepare an Environmental Impact Report (EIR). Considerable dredging is needed to raise the elevation of certain improvements for the project. A sediment sampling and analysis plan (SSAP) is required by the regulatory agencies to evaluate permitting issues. Pre-approval of the SSAP by the regulatory agencies is recommended prior to implementation. City Staff desires to include the preparation of the SSAP and development of mitigation monitoring protocols for review and approval by the regulatory agencies in support of the Initial Study. A scope of work and associated budget would be brought back to the City Council for approval prior to implementation of the SSAP. ",.-- ACENOA lTEM NO. L\ PACE f OF /1 REPORT TO CITY COUNCIL APRIL 11,2006 PAGE # 2 '-' DISCUSSION Staff reviewed the City's list of qualified environmental consulting frrms and recommends contracting with HDR Engineering to perform the attached "Scope of Work". Due to the regulatory and scientific uncertainties, Staff desires to contract with a consulting frrm that is familiar with Lake Elsinore and the permitting issues related to dredging. In recent years, HDR Engineering prepared the environmental documentation related to the City's destratification system and fishery improvements. Furthermore, HDR performed the environmental services for the ongoing Canyon Lake dredging project. FISCAL IMPACT Approval of the professional service agreement will result in an .expenditure of $55,167. This item is budgeted under the Capital Improvement Project budget for the Boat Launch Facility Improvements. '-' Future additional costs to complete the environmental work for the project will include the cost to implement the sediment sampling and analysis plan. In addition, if the Initial Study concludes the preparation of an EIR is necessary, then a scope of work and bu4get will be submitted for Council's consideration. RECOMMENDA TION Approve professional services agreement with HDR Engineering and authorize the City Manager to execute the agreement. PREPARED BY: Pat Kilroy, Director of Lake and Aquatic Resources Department APPROVED FOR AGENDA BY: '-' AGENDA ITEM NO. PAGE ;L L\ OF J 1 ".--. AGREEMENT FOR PROFESSIONAL SERVICES This Agreement is made and entered into this 11 th day of April, 2006, by and between the City of Lake Elsinore, a municipal corporation ("City") and HDR Engineering, Inc., an Environmental Consulting firm ("Consultant"). RECITALS A. Consultant is specially trained, experienced and competent to perform the special services which will be required by this Agreement. B. Consultant possesses the skill, experience, ability, background, certification and knowledge to provide the services described in this Agreement on the terms and conditions described herein. C. City desires to retain Consultant to render professional environmental consulting services and related work as set forth in this Agreement. AGREEMENT General Description of Work to be Performed ".--. The City of Lake Elsinore intends to rehabilitate the boat launch facility located at 32040 Riverside Drive, Lake Elsinore and known as the Lake Elsinore Recreation Area (LERA) Campground. The City desires to contract with HDR Engineering Inc. to provide environmental services by performing an Initial Study, attainment of regulatory permits for the project and prepare a sediment sampling plan required to construct the improvements as described in Exhibit "A" (Lake Elsinore Boat Launching Facility by the California Department of Boating and Waterways) and Exhibit "B" (Alternative Plan 2 - Supplemental Engineering & Economic Feasibility Report by Noble Consultants, Inc., December 3, 2004). 1. Scope of Work - The Consultant shall provide the services described in Exhibit "C" (Sediment Sampling Plan, Permitting and Environmental Documentation, March 24, 2006) in a professional manner. 2. Time of Performance - The services of Consultant are to commence upon execution of this Agreement and shall continue for a period of twelve months. 3. Compensation - Compensation to be paid to Consultant shall be in accordance with the fee schedule set forth in Exhibit C, which is attached hereto and incorporated herein by reference. And in no event shall Consultant's compensation exceed $55,167.00 without additional authorization from the City. Payment by City under this Agreement shall not be deemed a waiver of defects, even if such defects were known to the City at the time of payment. ,,--, 4. Method of Payment - Consultant shall submit monthly billings to City describing the work performed during the preceding month. Consultant's bills shall include a brief description of the services performed, the date the services were performed, the number of hours ProfServAgmt.4014.000 AGENDA ITEM NO. PAGE .3 L\ OF J 7 a spent and by whom, and a description of any reimbursable expenditures. City shall pay Consultant no later than 30 days after approval of the monthly invoice by City staff. When paYments made by City equal 90% of the maximum fee provided for in this Agreement, no further payments shall be made until the final work under this Agreement has been accepted by City. ~ 5. Extra Work - At any time during the term of this Agreement, City may request that Consultant perform Extra Work. As used herein, "Extra Work" means any work which is determined by City to be necessary for the proper completion of the Project, but which the parties did not reasonably anticipate would be necessary at the execution of this Agreement. Consultant shall not perform, nor be compensated for, Extra Work without written authorization from City. Extra work will be invoiced separately from services performed in accordance with the Scope of Services. 6. Termination - This Agreement may be terminated by the City immediately for cause or by either party without cause upon thirty (30) days written notice of termination. Upon termination, Consultant shall be entitled to compensation for services performed up to the effective date of termination. 7. Ownership of Documents - All plans, studies, documents and other writings prepared by and for Consultant, its officers, employees and agents and subcontractors in the course of implementing this Agreement, except working notepad internal documents, shall become the property of the City upon payment to Consultant for such work, and the City shall have the sole right to use such materials in its discretion without further compensation to Consultant or to any other party. Consultant shall, at Consultant's expense, provide such reports, plans, studies, documents and other writings to City upon written request. City acknowledges that any use of such materials in a manner beyond the intended purpose as set forth herein shall be at the sole risk of the City. City further agrees to defend, indemnify and hold harmless Consultant, its officers, officials, agents, employees and volunteers from any claims, demands, actions, losses, damages, injuries, and liability, direct or indirect (including any and all costs and expenses in connection therein), arising out of the City's use of such materials in a manner beyond the intended purpose as set forth herein. ~ a. Licensing of Intellectual Property - This Agreement creates a nonexclusive and perpetual license for City to copy, use, modify, reuse, or sublicense any and all copyrights, designs, and other intellectual property embodied in plans, specifications, studies, drawings, estimates, and other documents or works of authorship fixed in any tangible medium of expression, including but not limited to, physical drawings or data magnetically or otherwise recorded on computer diskettes, which are prepared or caused to be prepared by Consultant under this Agreement ("Documents & Data"). Consultant shall require that all subcontractors agree in writing that City is granted a nonexclusive and perpetual license for any Documents & Data the subcontractor prepares under this Agreement. Consultant represents and warrants that Consultant has the legal right to license any and all Documents & Data. Consultant makes no such representation and warranty in regard to Documents & Data which were prepared by design professionals other than Consultant or provided to Consultant by the City. City shall not be ....., ProfServ Agmt.4014.000 2 AGENDA ITE~ pO. L\ PAGE If OF j 1 ,....... limited in any way in its use of the Documents & Data at any time, provided that any such use not within the purposes intended by this Agreement shall be at City's sole risk. b. Confidentiality - All ideas, memoranda, specifications, plans, procedures, drawings, descriptions, computer program data, input record data, written information, and other Documents & Data either created by or provided to Consultant in connection with the performance of this Agreement shall be held confidential by Consultant. Such materials shall not, without the prior written consent of City, be used by Consultant for any purposes other than the performance of the services under this Agreement. Nor shall such materials be disclosed to any person or entity not connected with the performance of the services under this Agreement. Nothing furnished to Consultant which is otherwise known to Consultant or is generally known, or has become known, to the related industry shall be deemed confidential. Consultant shall not use City's name or insignia, photographs relating to project for which Consultant's services are rendered, or any publicity pertaining to the Consultant's services under this Agreement in any magazine, trade paper, newspaper, television or radio production or other similar medium without the prior written consent of City. 8. Consultant's Books and Records a. Consultant shall maintain any and all ledgers, books of account, invoices, vouchers, canceled checks, and other records or documents evidencing or relating to charges for services, or expenditures and disbursements charged to City forca minimum period of three (3) ,__ years, or for any longer period required by law, from the date of final payment to Consultant to this Agreement. b. Consultant shall maintain all documents and records which demonstrate performance under this Agreement for a minimum period of three (3) years, or for any longer period required by law, from the date of termination or completion of this Agreement. c. Any records or documents required to be maintained pursuant to this Agreement shall be made available for inspection or audit, at any time during regular business hours, upon written request by the City Manager, City Attorney, City Auditor or a designated representative of these officers. Copies of such documents shall be provided to the City for inspection at City Hall when it is practical to do so. Otherwise, unless an alternative is mutually agreed upon, the records shall be available at Consultant's address indicated for receipt of notices in this Agreement. d. Where City has reason to believe that such records or documents may be lost or discarded due to dissolution, disbandment or termination of Consultant's business, City may, by written request by any of the above-named officers, require that custody of the records be given to the City and that the records and documents be maintained in City Hall. Access to such records and documents shall be granted to any party authorized by Consultant, Consultant's representatives, or Consultant's successor-in-interest. --, 9. Independent Contractor - It is understood that Consultant, in the performance of the work and services agreed to be performed, shall act as and be an independent contractor and shall not act as an agent or employee of the City. Consultant shall obtain no rights to retirement ProfServ AgmtAO 14,000 3 ACENDA ITEM NO. PACE E l\ OF J 1 benefits or other benefits which accrue to City's employees, and Consultant hereby expressly waives any claim it may have to any such rights. "w/IIf 10. Interests of Consultant - Consultant (including principals, associates and professional employees) covenants and represents that it does not now have any investment or interest in real property and shall not acquire any interest, direct or indirect, in the area covered by this Agreement or any other source of income, interest in real property or investment which would be affected in any manner or degree by the performance of Consultant's services hereunder. Consultant further covenants and represents that in the performance of its duties hereunder no person having any such interest shall perform any services under this Agreement. Consultant is not a designated employee within the meaning of the Political Reform Act because Consultant: a. will conduct research and arrive at conclusions with respect to his/her rendition of information, advice, recommendation or counsel independent of the control and direction of the City or of any City official, other than normal agreement monitoring; and b . possesses no authority with respect to any City decision beyond rendition of information, advice, recommendation or counsel. (FPPC Reg. 18700(a)(2).) 11. Professional Abilitv of Consultant - City has relied upon the professional training and ability of Consultant to perform the services hereunder as a material inducement to enter into this Agreement. Consultant shall therefore provide properly skilled professional and technical personnel to perform all services under this Agreement. All work performed by Consultant under this Agreement shall be in accordance with applicable legal requirements and shall meet the standard of quality ordinarily to be expected of competent professionals in Consultant's field of expertise. "w/IIf 12. Compliance with Laws - Consultant shall use the standard of care in its profession to comply with all applicable federal, state and local laws, codes, ordinances and regulations. 13. Licenses - Consultant represents and warrants to City that it has the licenses, permits, qualifications, insurance and approvals of whatsoever nature which are legally required of Consultant to practice its profession. Consultant represents and warrants to City that Consultant shall, at its sole cost and expense, keep in effect or obtain at all times during the term of this Agreement, any licenses, permits, insurance and approvals which are legally required of Consultant to practice its profession. Consultant shall maintain a City business license. 14. Indemnitv - Consultant agrees to defend, indemnify and hold harmless the City, its officers, officials, agents, employees and volunteers from and against any and all claims, demands, actions, losses, damages, injuries, and liability, direct or indirect (including any and all costs and expenses in connection therein), arising out of the performance of this Agreement or its failure to comply with any of its obligations contained in this Agreement, except for any such claim arising out of the sole negligence or willful misconduct of the City, its officers, agents, employees or volunteers. ...., ProfServAgmt.40 I 4.000 4 AGENDA ITEM NO,_ PACE_ {p OF '-\ 11"'\" . ",.-.. 15. Insurance Requirements a. Insurance - Consultant, at Consultant's own cost and expense, shall procure and maintain, for the duration of the contract, the following insurance policies. i. Workers' Compensation Coverage - Consultant shall maintain Workers' Compensation Insurance and Employer's Liability Insurance for hislher employees in accordance with the laws of the State of California. In addition, Consultant shall require each subcontractor to similarly maintain Workers' Compensation Insurance and Employer's Liability Insurance in accordance with the laws of the State of California for all of the subcontractor's employees. Any notice of cancellation or non-renewal of all Workers' Compensation policies must be received by the City at least thirty (30) days prior to such change. The insurer shall agree to waive all rights of subrogation against City, its officers, agents, employees and volunteers for losses arising from work performed by Consultant for City. ,- ii. General Liability Coverage - Consultant shall maintain commercial general liability insurance in an amount not less than one million dollars ($1,000,000) per occurrence for bodily injury, personal injury and property damage. If a commercial general liability insurance form or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to the work to be performed under this Agreement or the general aggregate limit shall be at least twice the required occurrence limit. Ill. Automobile Liabilitv Coverage - Consultant shall maintain automobile liability insurance covering bodily injury and property damage for all activities of the Consultant arising out of or in connection with the work to be performed under this Agreement, including coverage for owned, hired and non-owned vehicles, in an amount of not less than one million dollars ($1,000,000) combined single limit for each occurrence. iv. Professional Liability Coverage - Consultant shall maintain professional errors and omissions liability insurance for protection against claims alleging negligent acts, errors or omissions which may arise from Consultant's operations under this Agreement, whether such operations by the Consultant or by its employees, subcontractors, or subconsultants. The amount of this insurance shall not be less than one million dollars ($1,000,000) on a claims-made annual aggregate basis, or a combined single limit per occurrence basis. b. Endorsements - Each general liability and automobile liability insurance policy shall be with insurers possessing a Best's rating of no less than A:Vn and shall be endorsed with the following specific language: ",.-. i. The City, its elected or appointed officers, officials, employees, agents and volunteers are to be covered as additional insureds with respect to liability arising out of work performed by or on behalf of the Consultant, including materials, parts or equipment furnished in connection with such work or operations. ProfServ Agrnt.40 14.000 5 ACENDA ITEM NO. PACE 1 y OF /1 ii. This policy shall be considered primary insurance as respects the City, its elected or appointed officers, officials, employees, agents and volunteers. Any insurance maintained by the City, including any self-insured retention the City may have, shall be considered excess insurance only and shall not contribute with it. ..", iii. This insurance shall act for each insured and additional insured as though a separate policy had been written for each, except with respect to the limits of liability of the insuring company. iv. The insurer waives all rights of subrogation against the City, its elected or appointed officers, officials, employees or agents. v. Any failure to comply with reporting provisions of the policies shall not affect coverage provided to the City, its elected or appointed officers, officials, employees, agents or volunteers. vi. The insurance provided by this Policy shall not be suspended, voided, canceled, or reduced in coverage or in limits except after thirty (30) days written notice has been received by the City. c. Deductibles and Self-Insured Retentions - Any deductibles or self-insured retentions must be declared to and approved by the City. At the City's option, Consultant shall demonstrate financial capability for payment of such deductibles or self-insured retentions. d. Certificates of Insurance - Consultant shall provide certificates of ....", . insurance with original endorsements to City as evidence of the insurance coverage required herein. Certificates of such insurance shall be filed with the City on or before commencement of performance of this Agreement. Current certification of insurance shall be kept on file with the City at all times during the term of this Agreement. 16. Notices - Any notice required to be given under this Agreement shall be in writing and either served personally or sent prepaid, first class mail. Any such notice shall be addressed to the other party at the address set forth below. Notice shall be deemed communicated within 48 hours from the time of mailing if mailed as provided in this section. If to Ci ty: City Manager City of Lake Elsinore 130 South Main Street Lake Elsinore, CA 92530 If to Consultant: HDR Engineering, Inc. 8690 Balboa A venue Suite 200 San Diego, CA 92123-1300 17. Entire Agreement - This Agreement constitutes the complete and exclusive statement of Agreement between the City and Consultant. All prior written and oral """"'" ProfServAgmt.4014.000 6 ~ ACEN~:~~Ei3' OF i 1 ,I"'"'" communications, including correspondence, drafts, memoranda, and representations, are superseded in total by this Agreement. 18. Amendments - This Agreement may be modified or amended only by a written document executed by both Consultant and City and approved as to form by the City Attorney. 19. Assignment and Subcontracting - The parties recognize that a substantial inducement to City for entering into this Agreement is the professional reputation, experience and competence of Consultant and the subcontractors. Consultant shall be fully responsible to City for all acts or omissions of any subcontractors. Assignments of any or all rights, duties or obligations of the Consultant under this Agreement will be permitted only with the express consent of the City. Consultant shall not subcontract any portion of the work to be performed under this Agreement without the written authorization of the City. If City consents to such subcontract, Consultant shall be fully responsible to City for all acts or omissions of those subcontractors. Nothing in this Agreement shall create any contractual relationship between City and any subcontractor nor shall it create any obligation on the part of the City to payor to see to the payment of any monies due to any such subcontractor other than as otherwise is required by law. 20. Waiver - Waiver of a breach or default under this Agreement shall not constitute a continuing waiver of a subsequent breach of the same or any other provision under this Agreement. /'"' 21. Severability - If any term or portion of this Agreement is held to be invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions of this Agreement shall continue in full force and effect. 22. Controlling Law Venue - This Agreement and all matters relating to it shall be governed by the laws of the State of California and any action brought relating to this Agreement shall be held exclusively in a state court in the County of Riverside. 23. Litigation Expenses and Attorneys' Fees - If either party to this Agreement commences any legal action against the other party arising out of this Agreement, the prevailing party shall be entitled to recover its reasonable litigation expenses, including court costs, expert witness fees, discovery expenses, and attorneys' fees. 24. Mediation - The parties agree to make a good faith attempt to resolve any disputes arising out of this Agreement through mediation prior to commencing litigation. The parties shall mutually agree upon the mediator and shall the costs of mediation equally. If the parties are unable to agree upon a mediator, the dispute shall be submitted to JAMS/ENDISPUTE ("JAMS") or its successor in interest. JAMS shall provide the parties with the names of five qualified mediators. Each party shall have the option to strike two of the five mediators selected by JAMS and thereafter the mediator remaining shall hear the dispute. If the dispute remains unresolved after mediation, either party may commence litigation. /'"' 25. Execution - This Agreement may be executed in several counterparts, each of which shall constitute one and the same instrument and shall become binding upon the parties ProfServAgmt.4014.000 7 AGENDA ITEM NO. PAGE q 11 OF ) 1 when at least one copy hereof shall have been signed by both parties hereto. In approving this Agreement, it shall not be necessary to produce or account for more than one such counterpart. .....,. 26. Authority to Enter Agreement - Consultant has all requisite power and authority to conduct its business and to execute, deliver, and perform the Agreement. Each party warrants that the individuals who have signed this Agreement have the legal power, right, and authority to make this Agreement and to bind each respective party. 27. Prohibited Interests - Consultant maintains and warrants that it has not employed nor retained any company or person, other than a bona fide employee working solely for Consultant, to solicit or secure this Agreement. Further, Consultant warrants that it has not paid nor has it agreed to pay any company or person, other than a bona fide employee working solely for Consultant, any fee, commission, percentage, brokerage fee, gift or other consideration contingent upon or resulting from the award or making of this Agreement. For breach or violation of this warranty, City shall have the right to rescind this Agreement without liability. For the term of this Agreement, no member, officer or employee of City, during the term of his or her service with City, shall have any direct interest in this Agre~ment, or obtain any present or anticipated material benefit arising therefrom. 27. Equal Opportunity Employment - Consultant represents that it is an equal opportunity employer and it shall not discriminate against any subcontractor, employee or applicant for employment because of race, religion, color, national origin, handicap, ancestry, sex or age. Such non-discrimination shall include, but not be limited to, all activities related to initial employment, upgrading, demotion, transfer, recruitment or recruitment advertising, layoff or termination. Consultant shall also comply with all relevant provisions of City's Minority Business Enterprise program, Affirmative Action Plan or other related programs or guidelines currently in effect or hereinafter enacted. .....,. IN WITNESS WHEREOF the parties have caused this Agreement to be executed on the date first written above. . CITY OF LAKE ELSINORE: CONSULTANT: By City Manager Title Business License # APPROVED AS TO FORM: ATTEST: City Attorney City Clerk .....,. ProfServAgmt40 I 4.000 8 ACENDA ITEM NO. PAGE 10 l{ OF J '7 ..-..... Attachments: ,--- ,--- Exhibit A - Description of "Lake Elsinore Boat Launch Facility" by the California Department of Boating and Waterways. Exhibit B - City Council approved Alternative Plan-2 as contained in "Supplemental to Engineering & Economic Feasibility Report for Lake Elsinore Campground Boat Launching Facility Improvements" Exhibit C - Scope of Work: Sediment Sampling Plan, Permitting and Environmental Documentation by HDR Engineering, Inc., March 24, 2006. ProfServAgmt4014.000 9 AGENDA ITEM NO. PAGE I J L.\ OF /1 March 24, 2006 Mr. Pat Kilroy, Director Lake and Aquatic Resources Department City of Lake Elsinore 130 South Main Street Lake Elsinore. CA 92530 RE: Proposal for Preparation of Sediment Sampling Plan, Permits, and Environmental Documentation Services Boat Launch Facility Improvements - City of Lake Elsinore Dear Mr. Kilroy: HDR appreciates the opportunity to prepare this proposal for the preparation of environmental documentation and permitting services, for the City of Lake Elsinore, Lake and Aquatic Resources Department. HDR is familiar with City of Lake Elsinore procedures. policies, and requirements, and has prepared numerous environmental documents and permit applications throughout southern California. Ms. Wendy WOrthey would be the HDR project manager for the Boat Launch Facility Improvements environmental documentation and permit submittals. Wendy has over 10 years of comprehensive CEQA compliance experience and has been involved with complex ......". environmental documentation efforts for multiple projects in the City of Lake Elsinore and throughout southern California. Pursuant to your request, the attached scope of work and cost proposal outlines the completion of the Sediment Sampling Plan, environmental permitting and CEQA documentation requirements to the extent. that can be determined at this time. Please review the attached scope of work/fee proposal and contact the undersigned should you have any questions or require further information or clarification. HDR is prepared to begin work immediately upon receipt of notice to proceed from the City of Lake Elsinore. Please contact Wendy Worthey at 858.712.8380 if you have any questions or comments. Sincerely, /d5-.dz. Betty Dehoney ... ... E&RA(l'rogram a>utg~, Attachments: Scope of Work I Cost Proposal """" HDR ERgiAeeriA9.IDC:. 9444FiiInham Street Suite 300 San Diego. CA 92123-1300 ~ Phooe: 18581112-8400 fax: 18581712-8333 AGE ~;~~. "'A~" i.:J. 11 ^~ J I'J EXHIBIT C Scope of Work .r'" March 24, 2006 Sediment Sampling Plan, Permitting, and Environmental Documentation Lake Elsinore Boat Launch Rehabilitation City of Lake Elsinore, California the "Engineering & Economic oat Lau bing Facility Improvements" dated at launch facility a supplemental engineering ntal report recommended revisions to the ety of the facility and to comply with against importing fill material into the Lake's uncil approved implementing Alternative Plan 2 of the on this report, the required fill material to elevate a through dredging the existing peninsula and shoreline Project Understanding The City of Lake Elsinore is planning to rehabilitate Elsinore Recreation Area and Campground located on t proposed project will improve an existing boat laun 1965. The existing facility consists of a ten-lane feet to 1,240 feet, an unimproved site consistmg portable toilets, no paved parking lots, no paved road, The new proposed project includes a si -lane concrete pa to 1,256 feet with three boarding floats; 8 vehicle/traile pavement at elevation 1,256 feet; a restr . , fish clea elevation 1,264 feet; and other site amenitie ~ ent Sampling Plan HDR understands draft Sediment Sampling Plan (Plan) was previously submitted to the U.S. Army C,1 s of Engineers (US ACE) for approval. Based on the comments received from the USACE, HDR is proposing to complete and finalize the Plan. The Plan will specify the perimeter of the project area, as well as identify locations for sediment coring, sampling techniques, and the specific laboratory analysis required to adequately characterize the sediments. The costs associated with completing the plan are not included in this scope of work. Once the plan is approved an accurate cost estimate will be prepared prior to initiating this phase of work. ,-., I-i):{ March 24, 2006 AGENDA ITEM NO. PAGE /3 y OF 1'1 Permitting Prior to project implementation approved regulatory agency permits will be required. These permits are required for the proposed dredging operations and the placement of the fill material. """'" HDR will complete permit application packages and work on the City's behalf to gain approval of these permit packages. At this time is assumed that there are no threatened or endangered species in the project area, and, therefore, would not require consultation under the Endangered Species Act with the U.S. Fish and Wildlife Service. The anticipated permits for the project include: · U.S. Army Corps of Engineers (CW A section 404 permit). · Santa Ana Regional Water Quality Control Board (CW · California Department of Fish & Game (Lake and Fish & Game Code 1600 - 1616). It should also be noted that the City shall be r contingency estimate of 40 hours is provide 0 In the event that additional consultation or NEPA the US. Army Corps of Engineers, t e cost would be under supplemental agreement. Initial Study While the Sediment SampllngPlan is being p ed, HD ecommends that preparation of a CEQA IIlitial Study beinitiated.'rhe Initial Stu hecklist will be prepared pursuant to Section """'" 15060-15065 of the CEQA Guidelines and Cl Lake Elsinore - CEQA Implementing Guidelines. The IIlitial. Study wilL.he complet ased on the current project description, however, if a .. al infotrIlation iSl1~(1e:,ss<lfYl.e. construction scheduling and equipment), HDR will e City to refine the project description so that a complete project de scrip . to thep~lJlic. posed project, (2) document the environmental conditions on the level.. of impact to onsite environmental resources, if any, and findings. Issues discussed with the City that may need to be ocumentation are as follows: The project sit (4) make the included in the e · Description 0 rations prior to the existing boat ramp being inundated . Lake water q ity · Lake levels · Land Use · Recreational uses of the lake; lake management; socio-economic effects · Dredging and Fill · Shoreline Safety · Noise · Air Quality/Odor . Hydrology · Biological effects (algae, fishes, etc.) """'" li)~ 2 March 24, 2006 4 OF J '1 AGENDA ITEM NO. PAGE J 'f ,"'-' . Hazardous materials discussion, including Underground Storage Tanks in the area . Construction impacts for any new facilities . Energy consumption . Identify and describe mitigation measures for any significant impacts. Mitigated Negative Declaration For the purposes of this proposal, it is assumed that there will be no environmental impacts that cannot be mitigated to a less than significant level, thus a MND would be the appropriate type of CEQA document. The MND will be prepared in accordance w' CEQA guidelines and requirements. In addition, it is assumed that the City understands in the Lake Elsinore Acquisition Process and how the project relates to Western e County Multi Species Habitat Conservation Plan. If any potentially significant en . 'mpacts are identified in the Initial Study, HDR will consult with the City to dete iate course of action (i.e., possible preparation of an EIR). Draft Initial Study and MND- Submittal to City fi ion, HDR may need to revise the Draft minimal based on the City's review ofthe ved on the Draft MND, the City, as the lead ents in the administrative record. HDR would onses. Any written response by HDR to comments on , this scope could be revised to include this additional ".-. Final MND Mitigation orting Program (MMRP) HDR will prepare Monitoring and Reporting Program (MMRP) in table format for submittal to the City omments have been received at the close of the public review period. The MMRP will con a compilation of mitigation measures identified in the MND. These mitigation measures and the established MMRP will be fully consistent with City policies and programs and will meet the requirements of Section 21081.6(a) of the Public Resources Code. This scope of work for preparation and processing of an Initial Study (IS) and possible Mitigated Negative Declaration (MND) has been developed based upon information provided by the City of Lake Elsinore (City), Planning Division, California Environmental Quality Act (CEQA) Statute (Public Resource Code Sections 21000-21177), the CEQA Guidelines (Sections 15000-15387) and City CEQA implementing guidelines. Because no factual data or technical studies are available at this time, the City cannot make a determination that this project will qualify for an ".-. MND until the Initial Study is completed (per Section 15063). The purpose of an Initial Study is fi)~ 3 March 24, 2006 ACENDA ITEM NO. PACE J 5' y OF /1 to provide the City, as the Lead Agency, with information to use as the basis for deciding whether to prepare an MND or Environmental Impact Report (EIR). Although project proponents may not anticipate unavoidable adverse impacts resulting from the proposed project, a determination on the appropriate type of CEQA document will be made upon completion of the IS. Should the IS, "WI' based upon technical studies, conclude that there are unavoidable significant impacts, an EIR would be required. However, this proposal will include costs associated with an MND only until the City makes a determination otherwise. Any CEQA effort other than an MND would be completed under a separate scope of services and cost estimate. In addition, the proposed project would require the approval of federal permits, and thus some level of documentation per the National Environmental Policy Act ( A) would be necessary as part of this scope of services. At this time, the level of NEP entation is unknown. Preliminary discussions with the U.S. Army Corps of Engineers i that they will prepare the NEP A compliance document. Attendance at Meetings ID~ 4 March 24, 2006 AGENDA ITEM NO. PAGE J fa ....." "-"" '-\ OF I? "...... ~ 10 . '-' \0 ~ ..::.= .5 U> ... ~ ~ Eo-< ~ :;; . 11 ~ I.(}=~ ..::.= CJl ~ ~:;2f Eo-<:;;z /"'"' :3 ... .2 ~ '"';'oc ~.E! ..::.=V':J U> ~ Eo-< ... .= t:: t: .s "" ... ~ ~ =:c t:: l"');Q ..::.= ~ U> 0 ~u CJl · .= N ... ... ~ .s ~ "" Eo-< ~ ~ 0000 ooqq Eo-<ooo"<t V':J\OV)"<t\O OC'l-V)\O U01-r-:.....:- C'l C'l o Q\ o~ " 10 V) ~ <'"l l"') 0'1 10 fA- V':J =,o-\O'D_"<t =-S~--~ Eo-<~8~~~gj V':J<'"lV)V)C'lV7\O O_..,fV7V7 0 UV7V7 V7 V':J 1.0 0 1.0 C'l - V) =' <'"l "<t =: Eo-< \0 0000 \0 V':J C"l V)0V7t-"<t 0 C'l t- 00 - 0'1 V7V7_ V7 . 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'" <.;l 0 ~ ~ ..c:-~ U R ~ ~ '" '" ~ Cd "E "5 o gp ~ ~ .;j ::E '-'t::..... d).t:: t:: V':J ~~ S ~ ~.~.9 ~ ~ g.-~ roil 0 g ~ ~ :> .... U ><: c<l.8-~ roil~p....~ ,.... CD T"" u; It) 0- III - o .... III ... Q) > o AGENDA ITEM NO. PAGE /1 ~ OF /1 . ,,-. CITY OF LAKE ELSINORE REPORT TO CITY COUNCIL TO: MA YOR AND CITY COUNCIL FROM: ROBERT A. BRADY, CITY MANAGER DA TE: APRIL 11,2006 SUBJECT: REQUEST FOR APPROVAL TO SELL ALCOHOL ON LEVEE BACKGROUND On June 22, 23, 24, & 25, 2006 the World Sports and Marketing will host ,,-. the World Wakeboards in the Inlet Channel and on the Levee. This event is a stop on the Wakeboard Tour and will include the competition, vendors and entertainment. DISCUSSION The organizers met with the Special Events Committee to discuss the event and one of their requests was to be able to sell beer on the Levee during the event. Since the Levee is a city facility similar to a park, City Council approval is needed to sell/serve alcohol at the site; Lake Elsinore Municipal Code 9.28.030. A letter from the organizer of the event is attached asking for permission to sell beer on Saturday, June 24 and Sunday, June 25. The letter also outlines their plans for distribution and enforcement. World Sports Marketing intends to partner with BarWorks Catering, Inc. and share the profits. No hard liquor will be sold. All beverages will be sold in plastic cups or plastic bottles. Security guards and LEPD will be on site to monitor the gardens and the exits. No coolers or alcohol will be permitted past the entrance gate and ,,-., no alcohol will be allowed to leave the event. AGENL\t; ITEM NO. PAC: I 5 ,.,"" ~ C'i'--/.., REPORT TO CITY COUNCIL APRIL 11,2006 PAGE 2 FISCAL IMPACT No fiscal impact RECOMMENDA TION Staff recommends that City Council consider the request by W orId Sports and Marketing to sell alcohol on the levee on June 24 and 25 during the W orId Wakeboards Event. PREPARED BY: ~~~ TERI FAZZ , RECREATIONffOURISM MANAGER APPROVED BY: APPROVED FOR AGENDA BY: ,ACENDA ITEM NO. PAOE 0. ,....., ....",. ....",. 5 OF~_ ~ Date: 4/3/06 Dear Teri, I am writing this letter to request permission to serve beer at our wakeboard event in the channel June 22-25, 2006. The Forge out of Temecula, CA. will be doing our onsite concessions for the event and they will be partnering with BarW orks Catering, Inc. to serve alcohol during the event. We are only requesting to sell alcohol on June 24-25. BarW orks Catering, Inc. 8504 Commerce Ave. San Diego, CA. 92121 858- 566-6077 ABC license 48-437182, ABC catering permit 58-437182 ,';--- I will require The Forge to present copies of their insurance certificate and all necessary permits prior to the event, at which time I can forward to you. I have spoken with Sergeant Michael Lujan of the Lake Elsinore police department and he does not see a problem with the selling of beer. I would also like to mention I will have two onsite officers on A TV's during the event. In order to control alcohol leaving the event area my plans are to build out a beer garden with temporary fencing. I will have the alcohol vendor staff a person at the entrance to monitor traffic in and out of the area. This person will also be checking LD.' s and checking for minors trying to get in. Anyone inside the beer garden will have to be 21 years of age or older. Thank you for your consideration. Sincerely, Bob Doughty Director of Operations World Sports and Marketing, LLC. Phone: 407-571-4768 Fax: 407-571-4769 Email: Bob.Doughty@worldpub.net ~ ACENDA ITEM NO. PACE ~ 5 OF 3 ~ CITY OF LAKE ELSINORE REPORT TO CITY COUNCIL TO: MAYOR AND CITY COUNCIL FROM: ROBERT A. BRADY, CITY MANAGER DA TE: APRIL 11,2006 SUBJECT: WAIVER OF FEES - BOYS AND GIRLS CLUB BACKGROUND The Boys and Girls Club of Southwest County will be renting the Diamond Stadium for a fundraising Dinner and Auction on May 20, 2006. They plan to construct a large tent on the field and their estimated attendance is 400. Attached you will find a copy of their approved application for use of the Diamond including a breakdown of their fees. ,- DISCUSSION On March 21, 2006, staff received a letter from Michelle Arellano, Chief Professional Officer and Angelia Fox, Lake Elsinore Area Director, requesting that all fees for this event be waived including the $2,500 refundable damage deposit. Council Policy No. 400-11 states "non-profit groups, based in the City limits of the City of Lake Elsinore can use the City facilities at actual staff cost, plus the cleaning deposit and necessary insurance to cover the event. According to this policy, the rental fees of $1,500 and the refundable damage deposit of $2,500 can be waived. The staff fees of $576 and the light costs of $1,500 are usually not waived as these are direct costs to the city. FISCAL IMPACT Waiver of the rental fees would result in a $1,500 loss of revenue. ~ ACENDA ITEM NO. lu PAO~-1-0F ~ REPORT TO CITY COUNCIL APRIL 11 PAGE 2 ""'. RECOMMENDA TION City Council consider the request for waiver of fees from the Boys and Girls Club for their Dinner and Auction fund raising event on May 20, 2006. PREPARED BY: rrOURISM MANAGER APPROVED BY: OFCO~TYSERVICES APPROVED FOR AGENDA BY: ~ "-'" AGENDA ITEM NO. PACE fJ.. If OF Pj @ ,-.. BOYS 8t GIRLS CUJBS OF SOUTHWEST COUIWt March 21, 2006 T eri Fazzio RecreationIT ourism Manager 130 South Main Street Lake Elsinore. CA 92530 Dear Ms. Fazzio, I am in receipt of your letter of approval for use of the Diamond Stadium on May 20, 2006. I would like to formally request that all fees ($6.076) for this event, be waived by the City as tt)is is a fund raiser to provide youth development services at low or no costs to low-income youth in Lake Elsinore. ,- I am available by email or telephone at (anQeliaf@bQcswc.orq or 951- 699-1526) if you have any questions or require more information. Thank you for your consideration. Michelle Arellano Chief Professional Officer /"""" The Positive Place For Kids . A United Way Agency Boys & Girls Clubs of Southwest County P.O. Box 892349 Temecula, CA 925$-2349 www.bgcsWC.org Temecula Site 28790 Pujol Street Temecula, CA 92590 Tel 951-699-1526 Pechanga Great Oak 31465 Via Cordoba Temecula, CA 92592 Murrieta Site 40550 California Oaks Roac Murrieta, CA 92562 Tel 951-698-3838 Lake Elsinore Site 3711 Nichols Road Lake Elsinore, CA 92530 0IIIcen CHRIS OLSEN Cha/tmBIl dthe 80MI UNOA BRADlEY Fist VJc&.Cha{r RON PARKS Second Vke-ChIW DAYNEWAGONER ThtrI Vke-ChIW DOUG MISEt.ER Secr8IaIy GREG PRI.JDH()WE TIll8SIJW TERRY GILMORE Past Chafr PrIsIdIntl CPO MICHEIJ.E ARELLANO" . Past Chafr Board of DinlcIIcq FRANKAUJ AtDf ARRIOlA KATHERINE BAIlEY MIKE 00BlAD0 BOB DOYlE DENIS FERGUSON CHRIS HAMMATT JEfFREY D. UNTON All( MINNIEAR MICHAEl. HAGGAR PHlUP PESIN JERRY REGIER KEllY SEYARTO MIKE SHIRlEY MAUNDA SMTH JOAN SPARKMAN PETER SPARKS PATRICK UTNEHMER GAr<< VOTAPKA AlAN WINKELSTEIN ROGER ZIEMER ACENDA ITEM NO. PACE_"_ 5 OF \q 1; LAKE ELSINORE DIAMOND STADIUM/AMPHITHEATER 500 Diamond Drive Lake Elsinore, CA 92530 (951) 674-3124, x. 265 APPLICATION FOR USE OF FACiliTIES PLEASE READ THE CITY OF LAKE ELSINORE POLICIES FOR USE OF FACILITIES BEFORE COMPLETING THIS APPLICATION (TYPE OR USE BLACK INK, ONLY). '--' Date: ~ :10 J {l00l0 Day(s): 51 \ur~ [i2( Diamond Club root\ - Hours: ~ - mdrueot Facility requested: Stadium o I]/"" Plaza 0 Parking Lot "Art 0 Parking Lot "B" Other (list): ~\ A- Purpose for which facility will be used: _ Dmof-t. ~ BuehoA) Estimated attendance: ~ Admission charge: Free: 0 Fee: $ 'lfi,Wp't pl'.~ Parking Fee: $~'&. How coll~cted: e,~n I~x~~ii &rcl 1CJ.(ct- Concessions: Yes: D No: ~ Alcohol being. served/sold? Yes: ~ No: D Organization name: ~~~ ~1l~&kl r>t~thWf.5t ~o~ Date Submitted: ~~ Contact persoJ} >>;':::~ !:tll: &\~"~Q. 111'( . Phone: (qSI l uQlT-15aG: - Signature: ~. Address: m3~ ~ol ~JUd: City: lll)lp.(\ltlo.. Zip: Q[j61tO ~l"~ ~~~ ~ 9.J?)(Jt.9<la3\iq}ll.mE~-4'~1 ~ q{l5B~ fAX - 6JQQ.4Z73 Parking Lot "C" D SPACE BELOW IS FOR CITY USE Facility rental fee: Personnel charges: \ a n~ Q LfB/ nr Supplies/Materials: Cleaning Fee: Utilities: Lights 4 hrt> ~ a. 00/(1( Administrative processing fee 25%: [Non-refundable] Damage Deposit (possibly refundable): Insurance: Yes No Fee if applicable: TOTAL FEES/CHARGES (due 14-days prior to event) ~ J f) 7 t.Y- Authorized by: Date: ~I;p Iou Approved: Denied: Reason: I' J Deposit Due: $ a., 50 Date Due: .JIl'lbuJ Balance Due: $15 7 (j) Date Due: n/I ~ ACENDA ITEM. ~o. LQ_ PACE If OF .-.!i. J I 5DC> . 57u Ii SOO . d} 5t.:JJ --.; tr~~-':R {lily of ~ake EffJ-lno'"le If ,1\ /J 1 a JI" 11 UnL cily 5. ,::::/01: ClVlOU March 2, 2006 Ms. Angelia Fox Boys and Girl's Club of Southwest County 28790 Pujol St. Temecula, CA 92589 Dear Ms. Fox: Attached please find your approved copy of the application for use of the Diamond Stadium on Saturday, May 20, 2006 for your Dinner/Auction. ,,--.- The $2,500 refundable deposit will be due by April 1, 2006. The remaining fees of $3,576 will be due by May 1,2006. Since you will be serving alcohol, you will need to hire security guards. The company used at the Stadium is Executive Event Services at (714) 777-4157. If you have any additional questions or decide not to use the facility, please call me as soon as possible at (951) 674-3124, extension 265. Sincerely, tJ11N~ Teri Fazzio RecreationITourism Manager C Director of Community Services Bill Houtz, Stadium Bruce Kessman, Storm --- AGENDA ITEM NO. PACE ~ t; \p OF !5 130 ~outh cMain ~t'teet, Lake El~lno'te, (!c:I/ 92530 9efephone (951) 674-3124 'Jax (951) 674-2392 ~ CITY OF LAKE ELSINORE REPORT TO CITY COUNCIL TO: MAYOR AND CITY COUNCIL FROM: ROBERT A. BRADY, CITY MANAGER DA TE: APRIL 11, 2006 SUBJECT: IMPLEMENTATION DOCUMENTS TO CONCESSION AGREEMENT FOR DESTINATION R.V. RESORTS BACKGROUND /""' In January 2005, the City Council approved a long-term concessions agreement with Destination R V Resorts for development and operation of the Lake Elsinore Campground. Since then, the principals of the company, Fred Rice and Chet Roberts, have worked to secure the financing to complete Phase I construction. City Staff understands that an investor group was formed to fund the down payment required to obtain a multi-million dollar loan. The loan application by Destination RV Resorts was submitted to Los Padres Bank and was recently approved by the loan committee, subject to obtaining title insurance and contractual provisions in case of default. DISCUSSION For Destination RV Resorts to obtain title insurance, the Title Company requires a recordable legal instrument. The attached "Memorandum of Lease" is intended to satisfy this requirement. This memorandum recognizes the City as fee owner to the Campground property and provides notice of the Concessions Agreement pertaining to the property. In the event of a default on the loan, Los Padres Bank requested the City consent to assign the Concessions Agreement to the Bank. The attached "Assignment and Assumption Agreement" satisfies this requirement. Under the terms of this agreement the City consents to assign the Concessions Agreement to Los Padres Bank in the event of a default on the loan, subject to the Bank assuming all the duties of the Concessionaire. ~ ACENDA ITEM NO. 1 PACE I OF /3 REPORT TO CITY COUNCIL APRIL 11, 2006 PAGE#2 ~ FISCAL IMPACT There is no cost to the City for approving the attached implementation documents. RECOMMENDA TION Approve the form of the attached implementation documents and authorize the Mayor to execute such final documents, subject to any minor modifications as may be approved by the City Attorney. PREPARED BY: Pat Kilroy, Director of Lake and Aquatic Resources Department APPROVED FOR AGENDA BY: ~ ~ AGENDA ITEM NO. '1 PAGE ~ OF 13 ~ /"'"' RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: ) ) Redevelopment Agency of the ) City of Lake Elsinore ) 130 S. Main Street ) Lake Elsinore, California 92530 ) Attn: City Clerk ) ) (Space above for Recorder's Use Only) This document is exempt from the payment of a recording fee pursuant to Government Code Section 6103. MEMORANDUM OF LEASE THIS MEMORANDUM OF LEASE (this "Memorandum"), dated for identification purposes only as of April 15, 2006, is made and entered into by and between the CITY OF LAKE ELSINORE, a municipal corporation (the "City") and DESTINA TION RV RESORTS, LLC, a California limited liability company (the "Operator"), with reference to the following: ,-.. 1. City is the owner in fee of that certain real property located in the City of Lake Elsinore, County of Riverside, State of California, more particularly described in the legal description attached hereto as Exhibit "A" and incorporated herein by this reference (the "Property"). 2. City and Operator have entered into that certain Lake Elsinore Campground and Day Use Facility Concession Agreement (the "Agreement"), dated for identification purposes only as of January 25, 2005, that provides for the use of the Property to Operator pursuant to the terms and conditions set forth in the Agreement. The Agreement provides of a term of forty (40) years following the Commencement Date (as defined in the Agreement) along with an option to extend the term for an additional fifteen (15) years. The Agreement is a public record and is available for public inspection in the office of the City Clerk of the City of Lake Elsinore at 130 S. Main Street, Lake Elsinore, California 92530. 3. Pursuant to the terms of the Agreement, City's obligations thereunder are binding on Operator's successors and assigns and Operator's obligations thereunder are binding on City's successors and assigns. 4. This Memorandum is prepared for recordation purposes only, and in no way modifies the terms and conditions of the Agreement. In the event of any inconsistency between the terms and conditions of this Memorandum and the Agreement, the terms and conditions of the Agreement shall prevail. ,'-'" 5. This Memorandum may be executed in duplicate counterparts, each of which shall be deemed an original. ACENDA ITEM NO. ' PACE ..3 OF I 3 ......" IN WITNESS WHEREOF, Agency and Tenant have executed this Memorandum as of the date first set forth above. "CITY" CITY OF LAKE ELSINORE, a municipal corporation Dated: ,2006 By: Mayor ATTEST: CITY CLERK By: Frederick Ray APPROVED AS TO FORM: VAN BLARCOM, LEIBOLD, McCLENDON & MANN, P.C. City Attorney ......" By: Barbara Zeid Leibold "OPERA TOR" DESTINA TION RV RESORTS, LLC, a California limited liability company Dated: ,2006 By: Fred Rice, Manager ......" Memorandum of Agreement and Option Final 2 AGENDA ITE~INO. l PAGE I OF J 3 r" CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California County of ) ) SS On personally appeared , before me, NAME(S) OF SIGNER(S) personally known to me cORe proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in hislher/their authorized capacity/ies, and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which person(s) acted, executed the instrument. Witness my hand and official seal. ".-- SIGNATURE OF NOTARY OPTIONAL Although the data below is OPTIONAL, it may prove valuable to persons relying on the document and could prevent fraudulent reattachment of this form. Capacity claimed by signer: Q Individual Q Corporate Officer(s) Q Partner(s) Q General Q Limited Q Attorney-in-fact Q Trustee(s) Q Guardian/Conservator Q Other: Description of Attached Document: Title or Type of Document Number of Pages Date of Document Signer is representing: Name of Person(s) or Entity(ies) Signer(s) Other Than Named Above .--.-. Memorandum of Agreement and Option Final 3 ACENDA ITEM NO. PACE 5 l OF } 2., CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California County of ) ) SS ....." On , before me, personally appeared NAME(S) OF SIGNER(S) personally known to me CORe proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in hislher/their authorized capacity/ies, and that by hislher/their signature(s) on the instrument the person(s), or the entity upon behalf of which person(s) acted, executed the instrument. Witness my hand and official seal. SIGNATURE OF NOTARY OPTIONAL Although the data below is OPTIONAL, it may prove valuable to persons relying on the document and could prevent fraudulent reattachment of this form. ......" Capacity claimed by signer: Q Individual Q Corporate Officer(s) Q Partner(s) Q General Q Limited Q Attorney-in-fact Q Trustee(s) Q Guardian/Conservator Q Other: Description of Attached Document: Title or Type of Document Number of Pages Date of Document Signer is representing: Name of Person(s) or Entity(ies) Signer(s) Other Than Named Above ....." Memorandum of Agreement and Option Final 4 AGENDA ITEM NO. PAGE 10 OF J 13 ~ .-.. ,~ Memorandum of Agreement and Option Final EXHIBIT "A" LEGAL DESCRIPTION Exhibit A AGENDA ITEM NO. PAGE 7 I OF J 3 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: ......" (Space Above This Line For Recorder's Use) ASSIGNMENT AND ASSUMPTION AGREEMENT THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (the "Agreement") is entered into as of this _ day of 2006, by and between Los Padres Bank, a ("Assignee"), Destination RV Resorts, LLC , a California limited liability company ("Assignor"), and the City of Lake Elsinore, , a municipal corporation (the "City"), with reference to the following facts: RECITALS A. City and Assignor have entered into that certain Lake Elsinore Campground and Day Use Facility Concession Agreement (the "Agreement"), dated for identification purposes only as of January 25,2005, that provides for the use of the Property to Assignor pursuant to the terms and conditions set forth in the Agreement. The Agreement is a public record and is -.." available for public inspection in the office of the City Clerk of the City of Lake Elsinore at 130 S. Main Street, Lake Elsinore, California 92530. B. Assignor desires to assign and delegate all of its right, title and related obligations under the Agreement to Assignee, and Assignee desires to accept such assignment and assume all of Assignor's duties under the Agreement upon the Assignment Date; C. City desires to consent to the transaction described above; and D. The parties are entering into this agreement to (i) effectuate the assignment and delegation by Assignor, and the acceptance and assumption by the Assignee, of all of Assignor's rights and obligations under the Agreement with respect to the Property and (ii) evidence the City's consent to such assignment and acceptance of such delegation and assumption and release of Assignor. NOW, THEREFORE, with reference to the foregoing Recitals and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties mutually agree as follows: 1. Effective Date. The Agreement shall be effective as of the date and time of recording, in the Official Records of Riverside County, California, of this Agreement (the "Assignment Date"). Capitalized terms not otherwise defined herein shall have the meanings set forth in the Agreement. ......" AGENDA ITEM NO. PAGE B 1 OF /3 "....., 2. Assignment. Assumption and Consent. Upon the Assignment Date, Assignor hereby assigns and delegates to Assignee and Assignee hereby accepts and assumes from Assignor, all of Assignor's rights, title, interest and obligations, if any, under the Agreement with respect to the Property, which rights and obligations are more particularly described in the Agreement. Without limiting the foregoing, Assignee hereby agrees, for the benefit of Assignor and the City, to perform all of the obligations of Assignor under the Agreement that relate to the Property arising after the date of this Agreement. City consents to the assignment and delegation by Assignor, and the acceptance and assumption by Assignee, of such rights and obligations. 3. Representations. Assignor hereby represents and warrants that except as otherwise disclosed herein, it has not previously assigned, pledged, hypothecated or otherwise transferred any of its rights under the Agreement. 4. Indemnification. Assignee agrees to indemnify, protect, hold harmless and defend Assignor, and their respective board members, officers and employees, from all suits, actions, claims, causes of action, costs, demands, judgments and liens arising out of the Assignee's failure to perform any obligation under the Agreement which are assumed by Assignee under Section 2 above, except to the extent such failure may have been caused by Assignor's willful misconduct or negligence or first arose prior to the date of thi~ Agreement. ,--- 5. Notices. Formal notices, demands and communications between the parties shall be sufficiently given and shall not be deemed given unless dispatched by registered or certified mail, postage prepaid, return receipt requested, or delivered personally, to the principal offices of the party to whom notice is to be given. If to Assignor: Fred Rice, President Destination R.V. Resorts, LLC. 125 Refugio Road PO Box 1747 Santa Y nez, CA 93460 If to Assignee: Loan Officer Los Padres Bank 831 Oak Park Boulevard Pismo Beach, California 93449 With copy to: If to City: City Manager City of Lake Elsinore 130 S. Main Street Lake Elsinore, CA 92530 ,,-- 2 J AGENDA ITE~NO. 3 PAGE I_OF J ,~ 9. Governing Law. The Agreement shall be interpreted under and be governed by the laws of the State of California. except for those provisions relating to choice of law or those ~ provisions preempted by federal law . 10. Entire Agreement. This Agreement is the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings. whether written or oral. between the parties with respect to the matters contained in this Agreement. Any waiver. modification. consent or acquiescence with respect to any provision of this Agreement shall be set forth in writing and duly executed by or on behalf of the party to be bound thereby. No waiver by any party of any breach hereunder shall be deemed a waiver of any other or subsequent breach. 11. Counterparts. This Agreement may be executed in counterparts by the parties hereto. each of which shall be deemed to be an original. and all such counterparts shall constitute but one and the same instrument. 12. Further Assurances. Each of the parties agrees to execute further and supplemental instruments as may be requested by another party to effectuate the purposes and intent of the Agreement. 13. Third Party Beneficiaries. No third party shall have any rights under this Agreement. ~ ~ 3 AGENDA ITEM NO. PAGE /0 'l OF J3 r-... IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. ASSIGNOR: ASSIGNEE: "CITY" CITY OF LAKE ELSINORE, a municipal corporation Dated: By: Mayor /'"' A TrEST: City Clerk APPROVED AS TO FORM: VAN BLARCOM, LEIBOLD, McCLENDON & MANN, P.C. Barbara Zeid Leibold, City Attorney /'"' 4 ACENDA ITEM NO. PACE / I I OF 13 STATE OF CALIFORNIA } COUNTY OF RIVERSIDE} ....., On ,2006 before me, , personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the persons whose names are subscribed to the within instrument and acknowledged to me that they executed the same in their authorized capacities, and that by their signatures on the instrument the persons or the entity upon behalf of which the persons acted, executed the instrument. WITNESS my hand and official seal. Notary Public ....., ....., 5 ACENDA ITEM NO. I PACE J~ OF )3 ".-.. EXHIBIT A LEGAL DESCRIPTION OF THE PROPERTY ,~ ,-- ACENDA ITEM NO. PACE13 ., OF 13 CITY OF LAKE ELSINORE ,-.... REPORT TO THE CITY COUNCIL TO: MAYOR AND CITY COUNCIL FROM: ROBERT A. BRADY, CITY MANAGER DATE: APRIL 11,2006 SUBJECT: TRAFFIC SIGNAL AND INTERSECTION IMPROVEMENTS AT GRAND A VENUE AND ORTEGA HIGHWAY (SR-74) CHANGE ORDER NO.1 BACKGROUND ,.-- On October 25, 2005, City Council awarded a contract to NBCE, Inc. to prepare plans for the construction of intersection improvements including street widening and signal control at Grand Avenue and Ortega Highway. Two legs of this T- intersection belong to CALTRANS Ortega Highway (SR-74) and the third, Grand Avenue, belongs to the City. Traffic signal warrant study has been conducted and a signal is warranted at this intersection. Because of capacity needs, Council has directed staff to pursue design and construction of this intersection improvement. DISCUSSION The City of Lake Elsinore and Riverside County boundary line is 1,000 feet southwest of this intersection. Current plans provide for 300 feet of improvements on Grand Avenue southwest of this intersection. However, almost 700 feet of this existing pavement extending to the City/County line will remain in its current condition. The pavement is distressed and needs rehabilitation now. NBCE, Inc., the consulting firm of the project can prepare the improvements on Grand Avenue to the City/County line for $19,800. The work will include surveys, improvement plan, cost estimate and pavement striping plans. When the improvements are completed, Grand Avenue from Ortega Highway to the City/County line will be improved and will not require any repairs for many years. ,-.... AGENDA ITEM NO. _7 .1Illf."" '. PAGE-LOF 5 AI REPORT TO CITY COUNCIL APRIL 11, 2006 PAGE 2 ....." FISCAL IMPACT In fiscal year 2005/2006, $467,898 has been budgeted for this project. The amount of $300,000 will be reimbursed to the City by TUMF Zone Monies at the request of city staff. The Project consultant, NBCE, Inc. submitted a proposal of $19,800 to perform the additional work. Funding for this additional work will be from the Street and Sidewalk Maintenance Fund. Sufficient funds exist in this account. RECOMMENDATION Staff recommends that the City Council: 1. Approve Change Order No.1 for $19,800 for NBCE, Inc. to extend pavement design plans on Grand Avenue to the City/County boundary line. Authorize the Manager to execute Change Order No. 1 with NBCE, Inc. 2. ....." PREPARED BY: David S. Solomon, Associate Civil Engineer Ken Seumalo, City Engineer t<M REVIEWED BY: APPROVED FOR AGENDA BY: '--' '( AGENDA ITEM NO. ..., ..,_~ ~PACJE 2, OF~ .--.. CITY OF LAKE ELSINORE 130 South Main Street Lake Elsinore, CA 92530 (951) 674-3124 PROJECT CHANGE ORDER Change Order #: 1 Date: April 4, 2006 THIS CHANGE ORDER IS APPLICABLE TO: CITY PROJECT #: 4251 CONTRACT AWARDED TO: PROJECT TITLE: Traffic signal at Grand Ave. And Ortega Highway (SR-74) NBCE, Inc. 3070 Bristol Street #540 Costa Mesa, CA 92626 DATE AWARDED: 10/25/05 SCHEDULED COMPLETION: 4/14/06 AUTHORIZED BY: Ken A. Seumalo, City EnQineer TOTAL AMOUNT OF CONTRACT PRIOR TO THIS CHANGE ORDER: $54,500.00 ,-- CONTRACTOR IS AUTHORIZED TO MAKE THE FOLLOWING CHANGES: The bid quantities are adjusted to actual quantities installed as follows: ITEM QUANTITY UNIT PRICE EXTENSION Prepare plans and specs extending L.S. $19,800.00 $19,800.00 pavement design to City/County line. SUBTOTAL $19,800.00 (NOTE THIS CHANGE ORDER CONSISTS OF lWO (2) PAGES) ,;-- AGENDA ITEM NO. _ ~ PAnJ: C" ^r- .1:) THE CONTRACT PERIOD WILL BE (INCREASED/DECREASED) 5 DAYS CONTRACT TOTAL: $74,300.00 (Includes this change order) REVISED COMPLETION DATE: April 17, 2006 Change Order #: 1 Page 2 of2 Reviewed by: Approved by: Date: (Initials) Date Project Engineer: Contractor City Manager: City Engineer: AGENJA ITEM NO. " PAGE..:!:L OF ~ .""",, """" y b' /j"/ ,. .. ./ LaJce " " "" . ElsitW.~ . . . , . .. .. o 550 1.100 2.200 Feet * INTERCHANGE ENHANCEMENT GRANO AVENUE/ORTEGA HIGHWAY PROJECT ID NUMBER: TRF-4003 PROJECT NUMBER: + City Of LaIce Elsinore , .J,3ps. Main St. I..aIt" ' lOle. CA 92530 ,61<W124 _.lake elsilloce.org ......., 8y. c:ar~t.-._ EDlT_ ""f~_ -- -~- c:ardLaw__ ~- / AGENDA ITEM NO..._ ~.... ;~PAGE-,~ (Y: S ,- CITY OF LAKE ELSINORE REPORT TO CITY COUNCIL TO: MAYOR AND CITY COUNCIL FROM: ROBERT A. BRADY, CITY MANAGER DATE: APRIL 11,2006 SUBJECT: AGREEMENT WITH OMNIS TO PROVIDE ON-CALL PROFESSIONAL ENGINEERING SERVICES INCLUDING PAVEMENT MANAGEMENT UPDATE BACKGROUND The Community Services Department must update annually the Pavement Management Program (PMP) data as part of our pavement management duties and in order to comply with General Accounting Standards Board Statement No. 34 reporting --- requirements. In order to maintain an accurate assessment of pavement conditions in the City, the City has traditionally contracted with engineering firms that have experience in pavement management inspections and GASB 34 reporting. DISCUSSION Omnis is an established engineering firm with the ability to provide the City a variety of services. The City currently contracts with this firm to perform infrastructure asset management, including pavement management, graphic information system data, and GASB 34 compliance and reporting. On April 8, 2003 City Council authorized staff to enter into a professional services agreement with Omnis after staff conducted a request for proposals and recommended Omnis as the successful applicant. After three years of service with the City, Omnis has demonstrated that they have the knowledge and experience to provide a high level of service to the City. The City benefits from a long term relationship with Omnis due to the fact that Omnis has conducted the City's annual Pavement Management Update and GASB 34 data since its inception, and therefore has provided consistency in the annual assessment ,--. ACENDA iTEM NO. q PAGE~OF If REPORT TO CITY COUNCIL APRIL, 11 2006 PAGE 2 "'" evaluation. Staff would like to continue service with Omnis for another three years so that this consistency is maintained. FISCAL IMPACT Funding is available in the Streets Operation Budget account number 100-4421-434- 20-20. Historically $15,000 to $20,000 annually has been spent for these services. RECOMMENDATION 1. Staff recommends that the City Council approve the attached professional services agreement with Omnis, subject to any minor modifications as may be approved by the City Attorney. 2. Authorize the Ci Manager to execute the agreement. '-' PREPARED BY: L WILLIAM L. P A LIC WORKS MANAGER APPROVED FOR AGENDA BY: COMMUNITY SERVICES APPROVED FOR AGENDA BY: "'" AGENDA ITEM NO. PACE 2... 9 OF I, .~ AGREEMENT FOR PROFESSIONAL SERVICES This Agreement for Professional Services (the "Agreement") is made and entered into as of the _ day of. , 200_, by and between the City of Lake Elsinore, a municipal corporation ("City") and OMNIS ("Consultant"). RECITALS A. Consultant is specially trained, experienced and competent to perform the special services which will be required by this Agreement. B. Consultant possesses the skill, experience, ability, background, certification and knowledge to provide the services described in this Agreement on the terms and conditions described herein. C. City desires to retain Consultant to render professional consulting services and related work as set forth in this Agreement. AGREEMENT ~ 1. Scope of Services. Consultant shall perform the services described on Exhibit A which is attached hereto and incorporated herein by reference. Consultant shall provide said services at the time, place, and in the manner specified in Exhibit A, subject to the direction of the City through its staff that it may provide from time to time. 2. Time of Performance. The services of Consultant are to commence upon execution of this Agreement and shall continue for a period of three (3) years, subject to annual review by the City Council. 3. Compensation. Compensation to be paid to Consultant shall be in accordance with the Schedule of Charges set forth in Exhibit B, which is attached hereto and incorporated herein by reference. Inno event shall Consultant's compensation exceed $20,000 per fiscal year (or other 12 month period) without additional authorization from the City Manager. Payment by City under this Agreement shall not be deemed a waiver of defects, even if such defects were known to the City at the time of payment. 4. Method of Payment. Consultant shall submit monthly billings to City describing the work performed during the preceding month. Consultant's bills shall include a brief description of the services performed, the date the services were performed, the number of hours spent and by whom, and a description of any reimbursable expenditures. City shall pay Consultant no later than 30 days after approval of the monthly invoice by City staff. . 5. Extra Work. At any time during the term of this Agreement, City may request that ,-. Consultant perform Extra Work. As used herein, "Extra Work" means any work which is determined by City to be necessary for the proper completion of the Project, but which the parties did not AGE.ND;~. '~')'_ PACE .3 ~ OF 17 reasonably anticipate would be necessary at the execution of this Agreement. Consultant shall not perform, nor be compensated for, Extra Work without written authorization from City. Extra work will be invoiced separately from services performed in accordance with the Scope of Services 6. Termination. This Agreement may be terminated by the City immediately for cause or by either party without cause upon thirty (30) days' written notice of termination. Upon termination, Consultant shall be entitled to compensation for services performed up to the effective date of termination. 7. Ownership of Documents. All plans, studies, documents and other writings prepared by and for Consultant, its officers, employees and agents and subcontractors in the course of implementing this Agreement, except working notepad internal documents, shall become the property of the City upon payment to Consultant for such work, and the City shall have the sole right to use such materials in its discretion without further compensation to Consultant or to any other party. Consultant shall, at Consultant's expense, provide such reports, plans, studies, documents and other writings to City upon written request. City acknowledges that any use of such materials in a manner beyond the intended purpose as set forth herein shall be at the solerisk of the City. City further agrees to defend, indemnify and hold harmless Consultant, its officers, officials, agents, employees and volunteers from any claims, demands, actions, losses, damages, injuries, and liability, direct or indirect (including any and all costs and expenses in connection therein), arising out of the City6s use of such materials in a manner beyond the intended purpose as set forth herein. a. Licensing of Intellectual Property. This Agreement creates a nonexclusive and perpetual license for City to copy, use, modify, reuse, or sublicense any and all copyrights, designs, and other intellectual property embodied in plans, specifications, studies, drawings, estimates, and other documents or works of authorship fixed in any tangible medium of expression, including but not limited to, physical drawings or data magnetically or otherwise recorded on computer diskettes, which are prepared or caused to be prepared by Consultant under this Agreement ("Documents & Data"). Consultant shall require that all subcontractors agree in writing that City is granted a nonexclusive and perpetual license for any Documents & Data the subcontractor prepares under this Agreement. Consultant represents and warrants that Consultant has the legal right to license any and all Documents & Data. Consultant makes no such representation and warranty in regard to Documents & Data which were prepared by design professionals other than Consultant or provided to Consultant by the City. City shall not be limited in any way in its use of the Documents & Data at any time, provided that any such use not within the purposes intended by this Agreement shall be at City's sole risk. b. Confidentiality. All ideas, memoranda, specifications, plans, procedures, drawings, descriptions, computer program data, input record data, written information, and other Documents & Data either created by or provided to Consultant in connection with the performance of this Agreement shall be held confidential by Consultant. Such materials shall not, without the prior written consent of City, be used by Consultant for any purposes other than the performance of the services under this Agreement. Nor shall such materials be disclosed to any person or entity not connected with the performance of the services under this Agreement. Nothing furnished to Consultant which is otherwise known to Consultant or is generally known, or has become known, to ACENDA ITEM NO. 9 PAcE--1--m: f7 ......, ......, .....". "........ the related industry shall be deemed confidential. Consultant shall not use City's name or insignia, photographs relating to project for which Consultant's services are rendered, or any publicity pertaining to the Consultant's services under this Agreement in any magazine, trade paper, newspaper, television or radio production or other similar medium without the prior written consent of City. 8. Consultant's Books and Records. a. Consultant shall maintain any and all ledgers, books of account, invoices, vouchers, canceled checks, and other records or documents evidencing or relating to charges for services, or expenditures and disbursements charged to City for a minimum period of three (3) years, or for any longer period required by law, from the date of final payment to Consultant to this Agreement. b. Consultant shall maintain all documents and records which demonstrate performance under this Agreement for a minimum period of three (3) years, or for any longer period required by law, from the date of termination or completion of this Agreement. "........ c. Any records or documents required to be maintained pursuant to this Agreement shall be made available for inspection or audit, at any time during regular business hours, upon written request by the City Manager, City Attorney, City Auditor or a designated representative of these officers. Copies of such documents shall be provided to the City for inspection at City Hall when it is practical to do so. Otherwise, unless an alternative is mutually agreed .upon, the records shall be available at Consultant's address indicated for receipt of notices in this Agreement. d. Where City has reason to believe that such records or documents may be lost or discarded due to dissolution, disbandment or termination of Consultant's business, City may, by written request by any of the above-named officers, require that custody of the records be given to the City and that the records and documents be maintained in City Hall. Access to such records and documents shall be granted to any party authorized by Consultant, Consultant's representatives, or Consultant's successor-in- interest. 9. Independent Contractor. It is understood that Consultant, in the performance of the work and services agreed to be performed, shall act as and be an independent contractor and shall not act as an agent or employee of the City. Consultant shall obtain no rights to retirement benefits or other benefits which accrue to City's employees, and Consultant hereby expressly waives any claim it may have to any such rights. ,....... 10. Interests of Consultant. Consultant (including principals, associates and professional employees) covenants and represents that it does not now have any investment or interest in real property and shall not acquire any interest, direct or indirect, in the area covered by this Agreement or any other source of income, interest in real property or investment which would be affected in any manner or degree by the performance of Consultant's services hereunder. Consultant further covenants and represents that in the performance of its duties hereunder no person having any such interest shall perform any services under this Agreement. AGENDA IT!E:M NO. PAGE S ~ OF f7 Consultant is not a designated employee within the meaning of the Political Reform Act because Consultant: ......", a. will conduct research and arrive at conclusions with respect to his/her rendition of information, advice, recommendation or counsel independent of the control and direction of the City or of any City official, other than normal agreement monitoring; and b. possesses no authority with respect to any City decision beyond rendition of information, advice, recommendation or counsel. (FPPC Reg. 18700(a)(2).) 11. Professional Ability of Consultant. City has relied upon the professional training and ability of Consultant to perform the services hereunder as a material inducement to enter into this - Agreement. Consultant shall therefore provide properly skilled professional and technical personnel to perform all services under this Agreement. All work performed by Consultant under this Agreement shall be in accordance with applicable legal requirements and shall meet the standard of quality ordinarily to be expected of competent professionals in Consultant's field of expertise. 12. Compliance with Laws. Consultant shall use the standard of care in its profession to comply with all applicable federal, state and local laws, codes, ordinances and regulations. 13. Licenses. Consultant represents and warrants to City that it has the licenses, permits, qualifications, insurance and approvals of whatsoever nature which are legally required of Consultant to practice its profession. Consultant represents and warrants to City that Consultant shall, at its sole cost and expense, keep in effect or obtain at all times during the term of this Agreement, any licenses, permits, insurance and approvals which are legally required of Consultant to practice its profession. ......", 14. Indemnity. Consultant agrees to defend, indemnify and hold harmless the City, its officers, officials, agents, employees and volunteers from and against any and all claims, demands, actions, losses, damages, injuries, and liability, direct or indirect (including any and all costs and expenses in connection therein), arising out ofthe performance of this Agreement or its failure to comply with any of its obligations contained in this Agreement, except for any such claim arising out of the sole negligence or willful misconduct of the City, its officers, agents, employees or volunteers. 15. Insurance Requirements. a. Insurance. Consultant, at Consultant's own cost and expense, shall procure and maintain, for the duration of the contract, the following insurance policies. i. Workers' Compensation Coverage. Consultant shall maintain Workers' Compensation Insurance and Employer's Liability Insurance for his/her employees in accordance with the laws of the State of California. In addition, Consultant shall require each subcontractor to similarly maintain Workers' Compensation Insurance and Employer's Liability Insurance in accordance with the laws of the State of California for all of the subcontractor's employees. Any notice of cancellation or ......", AGENDA ITEM I~V. PACE 6 q OF i, /""'"" non-renewal of all Workers' Compensation policies must be received by the City at least thirty (30) days prior to such change. The insurer shall agree to waive all rights of subrogation against City, its officers, agents, employees and volunteers for losses arising from work performed by Consultant for City. ii. General Liability Coverage. Consultant shall maintain commercial general liability insurance in an amount not less than one million dollars ($1,000,000) per occurrence for bodily injury, personal injury and property damage. If a commercial general liability insurance form or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to the work to be performed under this Agreement or the general aggregate limit shall be at least twice the required occurrence limit. lll. Automobile Liability Coverage. Consultant shall maintain automobile liability insurance covering bodily injury and property damage for all activities of the Consultant arising out of or in connection with the work to be performed under this Agreement, including coverage for owned, hired and non-owned vehicles, in an amount of not less than one million dollars ($1,000,000) combined single limit for each occurrence. /""'"" IV. Professional Liability Coverage. Consultant shall maintain professional errors and omissions liability insurance for protection against claims alleging negligent acts, errors or omissions which may arise from Consultant's operations under this Agreement, whether such operations by the Consultant or by its employees, subcontractors, or subconsultants. The amount of this insurance shall not be less than two hundred and fifty thousand dollars ($250,000) on a claims-made annual aggregate basis, or a combined single limit per occurrence basis. b. Endorsements. Each general liability and automobile liability insurance policy shall be with insurers possessing a Best..s rating of no less than A:VII and shall be endorsed with the following specific language: i The City, its elected or appointed officers, officials, employees, agents and volunteers are to be covered as additional insureds with respect to liability arising out of work performed by or on behalf of the Consultant, including materials, parts or equipment furnished in connection with such work or operations. ii. This policy shall be considered primary insurance as respects the City, its elected or appointed officers, officials, employees, agents and volunteers. Any insurance maintained by the City, including any self-insured retention the City may have, shall be considered excess insurance only and shall not contribute with it. ".-... 111. This insurance shall act for each insured and additional insured as though a separate policy had been written for each, except with respect to the limits ofliability of the insuring company. AGENDAITEMNO.~ PAGE--"1-.0F if iv. The insurer waives all rights of subrogation against the City, its elected or .....", appoiIlted officers, officials, employees or agents. v. Any failure to comply with reporting provisions of the policies shall not affect coverage provided to the City, its elected or appointed officers, officials, employees, agents, or volunteers. vi. The insurance provided by this Policy shall not be suspended, voided, canceled, or reduced in coverage or in limits except after thirty (30) days written notice has been received by the City. c. Deductibles and Self-Insured Retentions. Any deductibles or self-insured retentions must be declared to and approved by the City. At the City's option, Consultant shall demonstrate financial capability for payment of such deductibles or self-insured retentions. d. Certificates of Insurance; Consultant shall provide certificates of insurance with original endorsements to City as evidence of the insurance coverage required herein. Certificates of such insurance shall be filed with the City on or before commencement of performance of this Agreement. Current certification of insurance shall be kept on file with the City at all times during the term of this Agreement. 16. Notices. Any notice required to be given under this Agreement shall be in writing and either served personally or sent prepaid, first class mail. Any such notice shall be addressed to the other party at the address set forth below. Notice shall be deemed communicated within 48 hours from the time of mailing if mailed as provided in this section. .....", If to City: City of Lake Elsinore Attn: City Manager 130 South Main Street Lake Elsinore, CA 92530 If to Consultant: OMNIS Attention: John Gabor 5195 Walnut Avenue #14 Chino, CA 91710 17. Entire Agreement. This Agreement constitutes the complete and exclusive statement of Agreement between the City and Consultant. All prior written and oral communications, including correspondence, drafts, memoranda, and representations, are superseded in total by this Agreement. 18. Amendments. This Agreement may be modified or amended only by a written document executed by both Consultant and City and approved as to form by the City Attorney. .....", AGENDA ITEM NO. PACE <h q OF (7 .___ 19. Assignment and Subcontracting. The parties recognize that a substantial inducement to City for entering into this Agreement is the professional reputation, experience and competence of Consultant and the subcontractors listed in Exhibit D. Consultant shall be fully responsible to City for all acts or omissions of any subcontractors. Assignments of any or all rights, duties or obligations of the Consultant under this Agreement will be permitted only with the express consent of the City. Consultant shall not subcontract any portion of the work to be performed under this Agreement except as provided in Exhibit D without the written authorization ofthe City. If City consents to such subcontract, Consultant shall be fully responsible to City for all acts or omissions of those subcontractors. Nothing in this Agreement shall create any contractual relationship between City and any subcontractor nor shall it create any obligation on the part of the City to payor to see to the payment of any monies due to any such subcontractor other than as otherwise is required by law. 20. Waiver. Waiver of a breach or default under this Agreement shall not constitute a continuing waiver of a subsequent breach of the same or any other provision under this Agreement. 21. Severability. If any term or portion of this Agreement is held to be invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions of this Agreement shall continue in full force and effect. 22. Controlling Law Venue. This Agreement and all matters relating to it shall be governed by the laws of the State of California and any action brought relating to this Agreement shall be held exclusively in a state court in the County of Riverside. ,..-. 23. Litigation Expenses and Attorneys' Fees. If either party to this Agreement commences any legal action against the other party arising out of this Agreement, the prevailing party shall be entitled to recover its reasonable litigation expenses, including court costs, expert witness fees, discovery expenses, and attorneys' fees. 24. Mediation. The parties agree to make a good faith attempt to resolve any disputes arising out of this Agreement through mediation prior to commencing litigation. The parties shall mutually agree upon the mediator and share the costs of mediation equally. If the parties are unable to agree upon a mediator, the dispute shall be submitted to JAMSIENDISPUTE ("JAMS") or its successor in interest. JAMS shall provide the parties with the names offive qualified mediators. Each party shall have the option to strike two of the five mediators selected by JAMS and thereafter the mediator remaining shall hear the dispute. Ifthe dispute remains unresolved after mediation, either party may commence litigation. 25. Execution. This Agreement may be executed in several counterparts, each of which shall constitute one and the same instrument and shall become binding upon the parties when at least one copy hereof shall have been signed by both parties hereto. In approving this Agreement, it shall not be necessary to produce or account for more than one such counterpart. 26. Authority to Enter Agreement. Consultant has all requisite power and authority to conduct its ~ business and to execute, deliver, and perform the Agreement. Each party warrants that the ACENDA ITEM NO. PACE _ r ~ OF /7 individuals who have signed this Agreement have the legal power, right, and authority to make this Agreement and to bind each respective party. ~ 27. Prohibited Interests. Consultant maintains and warrants that it has not employed nor retained any company or person, other than a bona fide employee working solely for Consultant, to solicit or secure this Agreement. Further, Consultant warrants that it has not paid nor has it agreed to pay any company or person, other than a bona fide employee working solely for Consultant, any fee, commission, percentage, brokerage fee, gift or other consideration contingent upon or resulting from the award or making of this Agreement. For breach or violation ofthis warranty, City shall have the right to rescind this Agreement without liability. For the term of this Agreement, no member, officer or employee of City, during the term of his or her service with City, shall have any direct interest in this Agreement, or obtain any present or anticipated material benefit arising therefrom. 28. Equal Opportunity Employment. Consultant represents that it is an equal opportunity employer and it shall not discriminate against any subcontractor, employee or applicant for employment because of race, religion, color, national origin, handicap, ancestry, sex or age. Such non-discrimination shall include, but not be limited to, all activities' related to initial employment, upgrading, demotion, transfer, recruitment or recruitment advertising, layoff or termination. Consultant shall also comply with all relevant provisions of City's Minority Business Enterprise program, Affirmative Action Plan or other related programs or guidelines currently in effect or hereinafter enacted. IN WITNESS WHEREOF the parties have caused this Agreement to be executed on the date first written above. ...." CITY OF LAKE ELSINORE: CONSUL T ANT: ATTEST: City Clerk APPROVED AS TO FORM: City Attorney .....,; AGENDA ITEM NO. PAGE (0 ...<1... OF '7" .--. Exhibit A ~ ~ ACENDA ITEM NO. C1 PACE if OF (7 Section 1 - Scope of Work ......" Project Overview The City of Lake Elsinore is interested in contracting professional services to update their Pavement Management Program (pMP). Upon completion of the project, the City will be able to determine the present condition of pavement, develop a maintenance and rehabilitation schedule, and obtain annual updated maintenance schedules. The resulting data will be compliant with Federal, State, andlocal funding programs. Task 1 - Project Orientation Prior to the start offield survey OMNIS INC will meet with City staff to discuss in detail the expectations for the project. The scheduled zones for this year's inspection is Zone C and Arterials 1. OMNIS INC will include segmentation criteria, the extent of pavement survey (10%, 50%, or 100% sample), and the decision matrix required for the City of Lake Elsinore. Through these meetings, OMNIS would need to receive the following information: · A City map showing all public streets and alleyways within the city limit that are to be included in the survey. · The previous year's maintenance. · The latest GIS shapefile for the City's roadways. · OMNIS INC recommends that 100% sample size be conducted at an area of Y. mile lengths for residentials and collectors and Y2 mile lengths for arterials. ......" Task 2 - Status Reports I Meetings OMNIS will schedule meetings with the City staff upon approximately 25% completion of the field survey. The Project Manager, the Engineering Technician, and City Staffwill review the distress data collected to ensure that it is consistent with the Army Corps Field Distress Manuals. The City's expectations from the Project Orientation meeting will be verified and adjustments in the survey method will be made if necessary. A Field Inspection Report will be generated and will serve as the primary method for quality control of the data to be included in the f"mal report. The Pavement Condition (Field Inspection) will recommence upon completion of this review process. At 60% and/or 100% completion, OMNIS INC will review the updated Field Inspection Report with City staff to ensure that all streets have been inventoried and that the condition data is accurate. A random sampling, created by OMNIS INC and/or City staff, of street segments will be reviewed in the field. The Project Manager, the Engineering Technician, and City staff will review the distresses collected from the random sampling as a group. A Quality Control Report will be prepared detailing errors found during the field review, with proposed solutions for correcting the data. The Quality Control Report will be reviewed with the City to ensure proper measures are taken for quality data for the Final Report. ......" AGEr~OJ~ ! ibv'i i~0. C1 PACE (;)... OF (7 ",--. Task 3 - Office Data Collection OMNIS INC will conduct research and review of the City's maintenance program that has been completed at the time of the Project Orientation meeting. The information will be updated in the Work History section of the database. This data collection will include the following for each infrastructure item, if available: . Original maintenance date . Maintenance material used . Quantity of material . Cost of material . Any project numbers or purchase orders The maintenance history investigation will be an integral part in establishing the Pavement Condition Index for those streets that recently underwent rehabilitation. Task 4 - Field Data Collection OMNIS INC recommends a 100% survey sample size. By surveying 100% of a segment surface area, a more accurate indication of pavement condition is accessed. This will generate an accurate estimate of maintenance and rehabilitation costs. Surveys will include the following attribute data: -- . Name of street . From / To limits of each segment will be reviewed and adjusted . Length of segment . Width of segment . Number of travel lanes . Verification of existing curb, gutter, and sidewalk . Median type and quantity . Surface type, such as AC, PCC, Gravel, or Dirt . Visual identification of last maintenance Condition Data The methodology for collecting pavement distresses that will be utilized is the MicroP A VER standards created by the Army Corps of Engineers. This standard includes distress definition, severity types, and quantity aspects of collecting field data. OMNIS INC will collect the distresses determined based upon discussions with City staff at the Project Orientation (recommended 19 types), but at a minimum those distresses indicated in the City's Request for Proposal. OMNIS INC will update the roadways that have been recently built and/or annexed by the City of Lake Elsinore. We will collect lengths, widths, and gutters for these areas and establish segmentation using the Army Corps of Engineers procedures established when the Pavement Management System was originally created. ",--. AGEr~DA ITEM NO. PAGE 11 OF ~ '7 Task 5 - Develop / Update Database ....." OMNIS INC will update the PAVER 5.2 with all newly built streets and newly annexed areas. A survey sheet will be utilized for field data collection. OMNIS INC will update the PAVER database with the field survey data. The historical data that was researched in Task 3 will also be updated. A review of the final database will be conducted and any missing or incorrect data will be updated to establish the final database. Task 6 - Strategies / Budget Analysis Following review of the pavement condition inventory data, the various repair/rehabiljtation strategies will be discussed. OMNIS INC will review the City's existing repair and rehabilitation strategies, and assist the City with development of the most cost effective preventative maintenance, repair, and rehabilitation strategies. These strategies may include the use of chip seals, cape seals, slurry seals and overlays, based on the condition of the "maintenance sections", the expected improvement in pavement condition and life cycle extension that would result, and the unit cost of each alternative. ....." The strategies will be developed based on road class, type of surface and specific needs of the City. This will ensure that the recommended strategies are based upon the selection of appropriate activities, unit costs, and life cycles for the City. Budget Analysis will include scenarios of unlimited budget and requested budgets. Task 7 - Report Preparation The Pavement Management Program Report will provide a summary of the fmdings from the condition survey with the corresponding recommendations for the implementation of the most cost effective maintenance program. The report will provide the City with the following information: · An executive summary outlining the completed project · Methodologies utilized for field survey and budget analysis · Work history of c9mpleted street maintenance and rehabilitation · Current pavement conditions (PCI) from best to worst in tabular form AGEr~DA ITEM NO. q PACE ILl OF 17 ~ ...-- . Condition distribution by Functional Class . Projected annual repair/rehabilitation programs for street maintenance of all streets over a 5 year period. . Project schedules and associated budgets (adjusted for inflation based on City criteria) over a 5 year period . Analysis that allows the City to measure and understand the impact of cost on deferred maintenance . Development of an unlimited and requested funding levels . Exhibit showing existing PCI with From/To limits, length, lanes, and type of pavement . Exhibit showing the proposed annual work to be performed based on available funding for 5 years . GIS Map Exhibit showing existing PCI rating and a 5 year work program The Final Report will include the Estimated Original Cost, Accumulated Depreciation, and the Net Book Value of all pavement calculated for GASB 34 Compliance with an Appendix outlining all source data. Task 8 - Training OMNIS will provide the City of Lake Elsinore's staff training on field review, MieroPA VER software, budget analysis, and AreGIS software. The training can be broken into 3 half days or any combination that is suitable for the City. ,-' Task 9 - GIS Mapping OMNIS will update the City's GIS Map for the Pavement Management System. OMNIS will plot a PCI Map, a 5 years funding map, and up to four (4) request maps. Deliverables - OMNIS will include these maps within the fmal report. An electronic copy of all shapefiles and data will be submitted with the final report. ,--.. ACENDA ITEM NO. PACE IS- ~ OF 17 -~ Exhibit B AGENDA ITEM NO. PAGE I 6 OF q 17 ....." ....." '-III ,-- SCHEDULE OF HOURLY RATES En2:ineerin2: Project Manager Designer CADD Infrastructure Mana2:ement Project Manager CADD Field Technician Administration ,..---. Admin Support $120/Hour $100/Hour $75/Hour $100/Hour $75/Hour $70/Hour $45/Hour OMNIS Inc.'s hourly rate schedule is effective from today Monday, April 03, 2006 to June 30, 2007 as part of this Proposal and any future Proposals for use in invoicing for progress payments and for extra work incurred for the City of Lake Elsinore. "....... ACENDA ITEM NO. <1 PACE 17 OF /7 CITY OF LAKE ELSINORE REPORT TO CITY COUNCIL . TO: MAYOR AND CITY COUNCIL FROM: ROBERT A. BRADY, CITY MANAGER .-,'- DATE: APRIL 11, 2006 SUBJECT: NEGATIVE DECLARATION NO. 2006-02, GENERAL PLAN AMENDMENT NO. 2005-08, ZONE CHANGE (pRE- ZONE) NO. 2005-09 AND ANNEXATION NO. 75, KNOWN AS CANYON IDLLS ESTATES ANNEXATION APPLICANT: VICKI MATA, TRUMARK COMPANIES, 9911 IRVINE CENTER DRIVE, SUITE 150, IRVINE, CA 92618 LOCATION The 246.4-acre project site is located immediately adjacent to the existing southern boundary of the Canyon Hills Specific Plan and is bounded by Hemlock Street to the north, Pine Avenue to the east, Crooked Arrow Drive and Crab Hollow Circle to the south and west. Cottonwood Creek flows through the northeast comer of the site adjacent to Cottonwood Canyon Road. Access to the site is from Lost Road, Navajo Springs Road and Cottonwood Canyon Road. REQUEST The applicant requests approval of: · Negative Declaration No. 2006-02 · General Plan Amendment No. 2005-08 · Zone Change (Pre-Zone) No. 2005-09 · Annexation No.75 BACKGROUND ~ At their regular meeting ofF ebruary 21, 2006, the Planning Commission had before it resolutions for Negative Declaration, General Plan Amendment, Annexation and Zone Change. It was Staff's recommendation at the February 21, 2006 meeting that the Planning Commission approve all four of the Resolutions. After a full public hearing' AGENDA ITEM NO. 2 ( PAGE I OF -'!f ~ REPORT TO THE CITY COUNCIL APRIL 11,2006 Page 2 of 4 -1 . \ was held on the matters, the Planning Commission undertook a vote on the Resolutions. None of the Resolutions were approved and there is currently no Planning Commission recommendation to the City Council. Planning Commission action is summarized as follows: I) Resolutions which failed for lack of a second: a. Resolution No. 2006-15; recommending City Council approval of General Plan Amendment No. 2005-08. b. Resolution No. 2006-17; recommending City Council approval of Annexation No. 75. 2) Resolutions upon which no action was taken by virtue of a split 2-2 vote: a. Resolution No. 2006-14; recommending City Council adoption of Negative Declaration '!'10. 2006-02.) b. Resolution No. 2006-16; recommending City Council approval for (Pre- Zone) Zone Change No. 2005-09. DISCUSSION Items of discussion at the Planning Commission Hearing were related to (but not limited to) corporate boundary changes, the potential "cityhood" of the unincorporated Community ofWildomar, the environmental review, public noticing and processing, a conceptual plan (identified as Tentative Tract Map No. 32429), and the potential impacts of traffic and development to the immediate and surrounding areas (See _ attached "Draft" Planning Commission Minutes). Ultimately, upon deliberation and extensive public comments, the Planning Commission either took no action by virtue of a split 2-2 vote or failed to adopt the Resolutions for lack of a second as explained above. FISCAL IMPACT Pursuant to the Plan Services (Appendix A-3, Attachment No.4), "although few services are required to serve the current residences onsite, an increased amount of) services would be required to serve the ultimate build out of the site under the current AGENDA ITEM NO.~~ _ "_ PACE 2- OF I -'I" g REPORT TO THE CITY COUNCIL APRIL 11,2006 Page 3 of 4 "'"' ' County land use designation." Similarly, with the Canyon Hills Estates proposal to annex the site into the City of Lake Elsinore additional services would be necessary contingent on future proposals. RECOMMENDATION Staff recommends that the City Council adopt the following: I. City Council Resolution No. 2006-l./J adopting Negative DecIaration No. 2006-02. 2. City Council Resolution No. 2006-ttt.t approving General Plan Amendment No. 2005-08. 3. City Council Ordinance No.l.!2fapproving Change of Zone (Pre-Zone) No. 2005-09. 4. City Council Resolution No. 2006- '15 approving Annexation No. 75. ,,- PREPARED BY: KIRT A. COURY, PROJECT PLANNER APPROVED FOR AGENDA BY: ATTACHMENTS 1. Vicinity Map. 2. Proposed Annexation Area Map. 3. Proposed General Plan and Zoning Map. 4. Initial Study/Negative Declaration No. 2006-02. 5. Response to Comments for Initial Study/Negative Declaration No. 2006-02 6. City Council Resolution No. 2006-_, adopting Negative Declaration No. 2006-02. 7. City Council Resolution No. 2006-_, approving General Plan Amendment No. 2005-08. 8. City Council Ordinance No. _, approving Change of Zone (Pre-Zone) No. 2005-09. ~ 9. City Council Resolution No. 2006-_, approving Annexation No. 75. AGENDA ITEM NO.--2L--_ PAGE J OF IY- '8 REPORT TO THE CITY COUNCIL APRIL 11,2006 Page 4 of 4 10. City Council Conditions of Approval. 11. Project Correspondence. 12. Draft Planning Commission Minutes from February 21,2006. 13. Planning Commission Staff Report, Resolutions, Planning Commission Conditions of Approval, and Exhibits from the February 21,2006 meeting. <) ~ ) ~ J AGE:NDA ITEM NO. 12 \ ...... ._..__. ~ PAGE L/ OF. IV- ~ .' 2/ PAGE S OF ILI-& /"'" 1 /'"' /"'" Note to City Council Members: The California Environmental Quality Act (CEQA) does not require a Lead Agency to prepare responses to comments received by the Lead Agency with regard to pending Negative Declarations. Despite this policy, the Planning Department has invited RGP Planning and Development Services to respond to comments submitted by various project opponents. The contents of this document represent RGP's comments that were prepared in response to letters received (also referred to as "Project Correspondence") by the City with regard to Canyon Hills Estates Annexation Project. Kirt ~Planner AGENDA .TEM NO. Y21 PAGE '3 OF Itf9 --" "'" Responses to Comments Initial Study/Negative Declaration No. 2006-02 State Clearing House NO. 2006011079 Canyon Hills Estates General Plan Amendment No. 2005-08 Zone Change No. 2005-09 Pre-Annexation/Sphere of Influence ""'" Prepared by: City of Lake Elsinore 130 South Main Street Lake Elsinore, California 92530 April 3, 2006 J "'" AGENDA ITEM NO. 21 PACE ~ OF I 'to ~: Responses to Comments Canyon Hills Estates Negative Declaration No. 2006-02 April 2006 The Initial Study/Negative Declaration #2006-02 herein referred to as the IS/ND was made available for public review and comment pursuant to the California Environmental Quality Act (CEQA) Guidelines (Section 15105) for a period of 30 calendar days. During this review period, the City of lake Elsinore, as the CEQA lead Agency, received thirteen (13) comment letters on the IS/ND from public agencies, organizations, and individuals. In accordance with the CEQA Guidelines Section 15074, the City of lake Elsinore, as the lead Agency, must consider the Negative Declaration, together with the comments received, before approving the project. Therefore, the following responses to comments are part of the Administrative Record for the Proposed Project. List of Com mentors . . . . . . . r--. . . . . . . . . . . r' Wildomar Incorporation Now, Bob Cashman, Chairman, February 14, 2006 Wildomar Incorporation Now, Bob Cashman, Chairman, February 14, 2006 Wildomar Little league, Tom Underdown, President, February 14,2006 Gerry Stevenson, February 15, 2006 Edy Rodarme, February 16, 2006 Sharon Heil, February 16,2006 Susan lane John W. Flanigan, February 18, 2006 Menifee Valley Historical Association, Barbara Spencer, February 20, 2006 California Cultural Resources Preservation Alliance, Patricia Martz, President, February 20,2006 Kristine and Nien- Tzu (Toshi) Corder, February 18, 2006 Rick Estes, February 17, 2006 Wildomar land Development Review Committee, Sheryl Ade, Chair, February 20,2006 Harv Dykstra, February 20, 2006 Gina Castanon, February 21, 2006 William J. Zeidlik, Township Center, February 20,2006 George W. & Marie Taylor, February 22,2006 1 AGENDA ITEM NO. :2..1 PJ\CF. /0 OF_ I'iS Responses to Comments Canyon Hills Estates Initial Study/Negative Declaration Comment '~ ..." Wildomar Incorporation Now is opposed to the annexation of the Proposed Project because the Project Site lies within our proposed city boundaries. Response to Comment So noted. This comment doesn't address the CEQA document. Comment 1 We have not been able to get all of the information requested from the City regarding the Proposed Project. We request that the public comment time be extended for another 30-60 days. Response to Comment 1 The comment time was not extended by the City. Comments were also submitted at the Planning Commission public hearing on February 21, 2006. In addition, there will be an opportunity to comment at the City Council public hearing on April 11. 2006. Comment 2 The General Plan Amendment process is confusing because there have been several tentative tract map scenarios. ..." Response to Comment 2 The Proposed Project is a General Plan Amendment, Zone Change, and Annexation for the Project Site. The applicant has prepared preliminary conceptual plans for discussions with the City regarding the provision of services, access, etc. This IS/NO does not specifically address a future tentative tract map or a specific development plan for the Project Site. If the City approves the Proposed Project, this would indicate that the City's policy would favor medium density residential development rather than undeveloped open space on the Project Site. Future development (specific development plan and/or tentative tract map) would require a second tier of discretionary review and CEQA documentation by the City. Comment 3 An EIR should have been prepared for the Proposed Project rather than a Negative Declaration because of the multi-species habitat effort in Riverside County. :~ ~ , .....", Responses to Comments Canyon Hills Estates Initial Study/Negative Declaration 2 AGENDA ITEM NO. PAGE II '2t OF 'I of 8 Response to Comment 3 ,........ , On June 17, 2003 the Riverside County Board of Supervisors adopted the Riverside County Integrated Project Multiple Species Habitat Conservation Plan (MSHCP). The MSHCP is a comprehensive, multi-jurisdictional Habitat Conservation Plan (HCP) focusing on Conservation of species and their associated Habitats in Western Riverside County. The MSHCP does not automatically trigger the preparation of an EIR. The Initial Study was used to determine the appropriate CEQA document for the Proposed Project. The Initial Study did not identify any significant adverse impacts to sensitive biological resources as a result of the Proposed Project. The MSHCP allows Riverside County and its Cities to better control local land-use decisions; streamline the regulatory process for endangered species; and maintain a strong economic climate in the region while addressing the requirements of the state and federal Endangered Species Acts. Areas considered critical for habitat and species protection are identified in the MSHCP for conservation. The Project Site does not fall within an area identified for conservation in the MSHCP. Comment 4 The use of an overall density is misleading when all of the property is not suitable for development due to hillsides. Response to Comment 4 The use of an overall density is common planning practice. ,........ Comment 5 Project traffic will be dumped on the adjacent communities of Menifee, Canyon Lake, and Wildomar. Response to Comment 5 The Riverside County Transportation Uniform Mitigation Fee (TUMF) provides funding for regional transportation improvements. In addition, future development will be subject to the City's Transportation Impact Fee (TIF). Access to the site will be from Lost Road via Navajo Springs Road at the western end of the Project Site and Cottonwood Canyon Road at the eastern end of the Project Site. The community services (schools, shopping, etc.) near the Project Site are located in the existing Canyon Hills development to the north of the Project Site rather than in the communities of Menifee, Canyon Lake, and Wildomar. Comment 6 The adjacent neighborhood of Navajo Springs has been ignored. Response to Comment 6 ,-. The adjacent neighbors have had the opportunity to comment on the IS/NO, and participate in the Planning Commission public hearing. These neighbors will also have Responses to Comments Canyon Hills Estates Initial Study/Negative Declaration 3 AGENDA JTEM NO.____2J__~ .'~.l."'.~ I ') (-,e ILL r:J j?" l~~' j.t:......~,-=..~__-"".,,=. '-J'i'___........"~",.___s-.".q-=- the opportunity to participate in the City Council public hearing scheduled for April 11, 2006. In addition, a Navajo Springs neighborhood meeting was held on March 18, 2006 regarding the Proposed Project. , ---.---. -.J Comment 7 Three planned large water towers will impact the scenic aspects of the area. Response to Comment 7 The Proposed Project is a General Plan Amendment, Zone Change, and Annexation for the Project site. Any potential water towers are not part of the Proposed Project. Water towers are shown on the preliminary conceptual plans that have been prepared for the site. The aesthetic impacts of these potential water towers would be addressed in a second tier of discretionary review and CEQA documentation by the City if the Proposed Project is approved. Comment 8 Again, extend the public review period by another 30 days. Response to Comment 8 See Response to Comment 1. Comment 9 Table the annexation proposal. -.J Response to Comment 9 The City is responding to a request from the property owner for annexation into the City of Lake Elsinore. The City Council will make a decision on this request at the April 11 public hearing. im Underdown, President, Wildomar Little Lea ue Comment The Wildomar Little League is opposed to the annexation of any property within the Sphere of Influence of Wildomar because this will affect the number of players eligible to play in the Wildomar Little League. Response This comment does not address the CEQA document. ~ Responses to Comments Canyon Hills Estates Initial Study/Negative Declaration 4 ACENDA ITEM NO. 21 PACE I 3> OF.-1.:f 9 Gerr Stevenson "....... Comment The community of Wildomar is trying to incorporate as a City. Please deny the request of the property owner to annex to the City of lake Elsinore. Response The opinion of the author is so noted. This comment does not address the CEQA document. Edy Rodarme Comment Do not approve the Proposed Project because it interferes with the cityhood efforts of Wildomar. Why wasn't the community of Wildomar and the Wildomar Municipal Advisory Council not!fied of this project? Response ,,--- The property owner has requested annexation to the City of lake Elsinore because of the proximity of public services and utilities. The City Council will review this request at a public hearing on April 11, 2006. Notification of t1W Proposed Project and the ISIND was sent to the Wildomar Chamber of Commerce, Wildomar Incorporate Now (WIN) and the County of Riverside lAFCO. Sharon Heil Comment 1 Do not approve the annexation to the City of lake Elsinore. Response 1 The opinion of the author is so noted. This is not a comment on the CEQA documentation. Comment 2 Do not put development on this Project Site. Response 2 The opinion of the author is so noted. This IS not a comment on the CEQA documentation. ,...- Responses to Comments Canyon Hills Estates Initial Study/Negative Declaration 5 ACENDA ITEM NO. PACE J'I " 1 L OF I rf B Comment 3 Waters towers should not replace fire hydrants. '~<"" 1:~ . : ," ~. ~ Response 3 The water towers provide water and water pressure to the fire hydrants that will be placed in the project streets. Comment 4 The information from the City regarding the Proposed Project has not been clear. Response 4 The Proposed Project is a General Plan Amendment, Zone Change, and Annexation for the Project Site. The applicant has prepared preliminary conceptual plans as Tract Map 34249 for discussions with the City regarding the provision of services, access, etc. This IS/NO does not specifically address a future tentative tract map or a specific development plan for the Project Site because a tract map is not part of the Proposed Project. If the City approves the Proposed Project, this would indicate that the City's policy would favor medium density residential development rather than undeveloped open space on the Project Site. Future development (specific development plan and/or tentative tract map) would require a second tier of discretionary review and CEQA documentation by the City. Comment 5 ~ Do not approve this Proposed Project. Response 5 The opinion of the author is so noted. This is not a comment on the CEQA documentation. Susan Lane Comment 1 The community of Wildomar has not been adequately informed or given the opportunity to comment on the Proposed Project. Response 1 Notification of the Proposed Project and the IS/NO was sent to the Wildomar Chamber of Commerce, Wildomar Incorporate Now (WIN) and the County of Riverside LAFCO. Comment 2 The Proposed Project will have a large impact on the surrounding residents and the Wildomar community. J ~ Responses to Comments Canyon Hills Estates Initial Study/Negative Declaration 6 AGENDA ITEM NO. 2 I PAGE 15 OF ! ~ .9 _ /'"' .l Response 2 The impacts of the Proposed Project were addressed in the IS/ND. The ISIND determined that significant impacts would not occur as a result of the Proposed Project Comment 3 The City should not act on the Proposed Project because the Project Site is in the community of Wildomar and the County of Riverside. Response 3 The State. of California Government Code grants rights to property owners to petition for annexation or exclusion as they desire, either with or without the prior consent of the local agency. Under this provision, the property owner has requested annexation to the City of Lake Elsinore because of the proximity of public services and utilities to the Project site. The City Council will review this request at a public hearing on April 11, 2006. ohn W. Flani an Comment As property owner of 80 of the 240 acres (Project Site), I want to annex to the City of /'"'\ Lake Elsinore. Response The opinion of the author is so noted. This is not a comment on the CEQA documentation. Barbara S encer, Menifee Valle Historical Association Comment Is the Project Site in the sphere of influence of the community of Menifee Valley which is in the final stages of incorporation through LAFCO? If so, our organization opposes any annexation of Menifee Valley area. Response The Project Site is not located in the sphere of influence of the community of Menifee Valley. /'"' Responses to Comments Canyon Hills Estates Initial Study/Negative Declaration AGENDA ITEM NO.7 2J PAGE I "'- T OF _I c.f t cO", Comment '-' Will future development impact cultural resources? Response If the Proposed Project is approved, a second tier CEQA document will include a site- specific cultural resources survey. In accordance with CEQA, any documented cultural resources will be subject to mitigation. Nien-Tzu Toshi and Kristine Corder . Comment Do not approve this Proposed Project. Response The opinion of the author is so noted. documentation. This is not a comment on the CEQA Rick Estes Comment 1 '-' Do not approve this Proposed Project because it is growth-inducing and will result in significant traffic impacts. Response 1 The Proposed Project will be subject to the Riverside County Transportation Uniform Mitigation Fee (TUMF) which provides funding for regional transportation improvements and the City's Transportation Impact Fee (TIF). Access to the site will be from Lost Road via Navajo Springs Road at the western end of the Project Site and Cottonwood Canyon Road at the eastern end of the Project Site. Residents of any future development on the Project Site will probably travel north to existing community services in the existing Canyon Hills development to the north of the Project Site. Comment 2 Wildomar will receive most of the Proposed Project traffic and therefore should control the proposed project. Response 2 Existing Lost Road, an unpaved (dirt) rural road, provides direct access to the west and then south and north from the Project Site. The Proposed Project will improve both , ~ Responses to Comments Canyon Hills Estates Initial Study/Negative Declaration 8 ACENDA ITEM NO. 2.1 PACE I] OF Ilf9 ~ Navajo Springs Road and Lost Road to the existing Canyon Hills development. In all likelihood, most residents will access the existing and closer community services to the north of the Project Site rather than the community of Wildomar. Comment 3 A traffic study should have been prepared for the Project Site. Response 3 If the Proposed Project is approved, a second tier CEQA document will include a site- specific traffic/circulation study. This traffic/circulation study will ~valuate regional and local traffic impacts and provide mitigation measures for significant adverse traffic- related impacts. She lAde, Wildomar Land Develo ment Review Committee Comment 1 Because the City included the project tract map in the initial study, the initial 'study should address the project details. Response 1 The Proposed Project is a General Plan Amendment, Zone Change, and Annexation for ~I the Project Site. The applicant prepared preliminary conceptual plans for discussions with the City regarding the provision of services, access, etc. under Tract Map 32429. These preliminary conceptual plans as Tract Map 32429 were not included in the Initial Study. This IS/NO does not specifically address a future tentative tract map or a specific development plan for the Project Site. If the City approves the Proposed Project, this would indicate that the City's policy would favor medium density residential development rather than undeveloped open space on the Project Site. Future development (specific development plan and/or tentative tract map) would require a second tier of discretionary review and CEQA documentation by the City. Comment 2 Why isn't this area included in the City's General Plan Update/Amendment? Was the General Plan Advisory Committee consulted regarding this project? If so, were they in favor of the Proposed Project? Response 2 The City of Lake Elsinore is currently in the process of comprehensively updating its General Plan. As part of this General Plan update process, the City is analyzing alternative development scenarios that focus on various types of development opportunities surrounding the lake. This analysis is in the draft stages and has not been fully analyzed pursuant to CEQA. In all of the alternatives being considered by the City of Lake Elsinore, the Canyon Hills Estates project site is included as a Planning Area. The General Plan Advisory Committee (GPAC), which is an advisory committee to the r' City Council on the General Plan Update, has viewed all of these General Plan update Responses to Comments Canyon Hills Estates Initial Study/Negative Declaration ACENDA ITEM NO. 9 21 PACE I~ vOF /LfB alternatives during these draft stages. A formal ruling or recommendation has not been made to the City Council regarding the proposed project to date. ,F, Po. 5 _:fd para.. last sentence '-"" Comment 3 The statement that the residential designation is consistent with the County's General Plan designations that allow .1 and .2 DUlacre is inaccurate. What are the correct RCIP land use designations and zoning? Response 3 According to Figure 3 of the Riverside County Integrated Project (RCIP) General Plan Elsinore Area Plan designates the site Rural Residential (RR) and Rural Mountainous (RM). The site has four existing County zoning designations as shown in the zoning map below, including: · R-1 One Family Dwellings · R-A-1 Residential Agriculture · R-A-5 Residential Agriculture · R-R Rural Residential ...." Figure] Riverside County Zoning Map Po. 7 - ~d para. Comment 4 Why wasn't the community of Wildomar on the notification list for the Negative Declaration? ...." Responses to Comments Canyon Hills Estates Initial Study/Negative Declaration 10 2' \ ACENDA ITEM NO. _ _ PACE I~ OF~tfg Response 4 ,-... \ Notification was sent to the Wildomar Chamber of Commerce, Wildomar Incorporate Now (WIN) and the County of Riverside LAFCO as shown on Attachment 2 of the IS/NO. Comment 5 The City did not allow for a full 30-day public review/comment period for the Negative Declaration. Response 5 The public review period began on January 19, 2006 and ended on February 20, 2006, which is a total of 31 calendar days; more than the CEOA mandated time frame. Because February 20 was a holiday, the City accepted all comments submitted through February 22, 2006. Comment 6 The Planning Commission did not have adequate time to review their Canyon Hills Estates package prior to the February 20 meeting. Did the Planning Commission understand what they were voting on? Response 6 ,--. CEOA Section 15074 requires the decision making/legislative body consider the project and environmental review document with the public comments prior to making a determination on the project. In this case, the decision making/legislative body is the City Council. The Planning Commission is considered an advisory body and is not required to review the public comments prior to making a recommendation on the project. Nevertheless, all comments that were received were provided to the Planning Commission at the public hearing for review and consideration prior to making a recommendation. Po. 8. ~d para. (Sec. 3.0) Comment 7 The cumulative impact analysis did not address Alternatives 1. 2. and 3 of the City of Lake Elsinore General Plan update maps. Response 7 The City of Lake Elsinore is currently in the process of comprehensively updating its General Plan. As part of this General Plan update process. the City is analyzing alternative development scenarios of areas surrounding the lake. This analysis is in the draft stages and has not been fully analyzed pursuant to CEOA. Furthermore. the General Plan Update EIR has not been certified by the City and an alternative has not been selected. Therefore. the cumulative impact analysis is not required to analyze the General Plan alternatives. ,--. Responses to Comments Canyon Hills Estates Initial Study/Negative Declaration 11 l AGENDA ITEM NO; 2 PACE ;20 OF l'fld During the February 21, 2006 Planning Commission Public Hearing, Mr. Rolfe Preisendanze, Director of Community Development, stated that the General Plan Update Technical Committee reviewed the project application for annexation and recommended its inclusion along with other properties in the General Plan Update. -, ....." Pa. 11 - 1st para (Sec. 2.0 - Proiect Description) Comment 8 Comment - Local drainage is not all directed to the northwest. Cottonwood Creek flows to the southeast. Response 8 The project description section of the ISIND indicates that the site drainage "generally" flows northwest. The statement is not intended to be all inclusive. Therefore, it is hereby noted. that Cottonwood Creek flows to the southwest. Po. 12 - Fiaure 2-1 Comment 9 The regional and vicinity map was too small. Response 9 The regional and vicinity maps supplement the text of the ISIND, which together provide sufficient information to identify the location of the project site. In addition, the City of Lake Elsinore has larger maps indicating the location of the site. . ') ......" Po. 17 - Fiaure 2.5 Comment 10 The Riverside County General Plan Zoning is incorrect. Rural Mountainous is 10 DU/Acre instead of 5 DU/Acre. Response 10 As indicated in Response 1 and shown in Figure 1 above, the site's Riverside County zoning is R-1, R-A-1, R-A-5 and R-R. Pa. 19 - 2.3.1 Existino General Plan and Zonina, 2}ld para. Comment 11 The explanation of the City's Sphere of Influence/LAFCO process is misleading and incorrect. ......" Responses to Comments Canyon Hills Estates Initial Study/Negative Declaration 12 . AGENDA ITEM NO. 2...\ PAGE aU OF ('18 Response 11 /""" : The opinion of the author is so noted. Pa. 20 - 2.3.4 Proposed Pre-Zonina. last para., next to last sentence Comment 12 The environmental checklist includes some "less than significant impacts" checked. How can this be when the next to the last sentence says "No physical development of the site is proposed at this time?" Response 12 The Proposed Project is a General Plan Amendment, Zone Change, and Annexation for the Project Site and by itself would not result in the physical development of the Project Site. However, if the City approves the Proposed Project, this would indicate that the City's policy would favor medium density residential development rather than undeveloped open space on the Project Site. Future development (specific development plan and/or tentative tract map) would require a second tier of discretionary review and CEQA documentation by the City. . Pa. 21- 3.1 Aesthetics (a-c), :rd para. Comment 13 ~ The Proposed Project is annexation, pre-zoning, Sphere of Influence, and a General Plan Amendment. The Initial Study says the Proposed Project would not change the visual character of the property. The Initial Study then says subsequent development would change the character. The Planning Commission and City Council should evaluate subsequent development. Response 13 The Proposed Project is a General Plan Amendment, Zone Change, and Annexation for the Project Site and by itself would not change the visual character of the Project Site. However, if the City approves the Proposed Project, this would indicate that the City's policy would favor medium density residential development rather than undeveloped open space on the Project Site which would change the visual character of the site. Future development (specific development plan and/or tentative tract map) would require a second tier of discretionary review and CEQA documentation by the City. Pa. 26 - 3.8 Hydro/Day and Water Quality. b) and c-3) Comment 14 The statement in b) seems to contradict the statement in c-3. If on-site soils aren't suited for groundwater recharge, how can runoff percolate into the ground? r Responses to Comments Canyon Hills Estates Initial Study/Negative Declaration 13 ........ ACENDA ITEM NO. .:2..1 '. PACE J:J.. OF I 'I- r; Response 14 Groundwater recharge is not the same as runoff percolation into the ground. The process of water soaking into the ground to become groundwater is known as groundwater recharge. The area on the surface where water soaks in is called the recharge area. Percolation is how the groundwater moves downward through the soil in the recharge area. If the soil is not very porous, most of the water will not percolate directly into the recharge area. There will be some runoff percolation into the ground on- site but the on-site soils are not conducive to quality groundwater recharge. <" !<.' '~~ ......" Po. 27 - 3.8 Hydrolooy and Water Quality, {-n, last two sentences in the para. Comment 15 The statement that the area has not been subject to flooding may be inaccurate. It is also incorrect to state that there are no dams in the project vicinity. What about Canyon lake? Response 15 The Project site is not located in a 1 OO-year floodplain. The Project site is also not within the Canyon lake or lake Elsinore Dam Inundation area. Po. 27 - 3.9 Land Use and Plannino, 2"d para. a1. last sentence Comment 16 The statement that the UC designation is not recognized by the Cortese-Knox-Hertzberg local Government Reorganization Act of 2000 (CKH 2000) is misleading. Although UC designation is not being recognized by CKH 2000, the CKH State Statutes do allow lAFCO's to set local policy and use UCs. The designation of UC is still in effect today for the community of Wildomar. ......, Response 16 The commenter is correct. So noted. Po. 27, :rd para. under a) Comment 17 It is incorrect to state that the Sedco Hills separate the Project Site from the Wildomar community and that the site is physically oriented to the City of lake Elsinore rather than to Wildomar. This is untrue because the Sedco Hills are in Wildomar. Cottonwood Canyon Road and lost Road both originate in Wildomar. Only when Canyon Hills was developed did lost Road get extended to into the City of lake Elsinore. Response 17 Cottonwood Canyon Road and Lost Road are currently unimproved (dirt) County roads. The development of the existing Canyon Hills community has resulted in commercial i I ......" Responses to Comments Canyon Hills Estates Initial Study/Negative Declaration 14 AGENDA ITEM NO. 2...1 PAGE ;)3 OF (y 8 '" and educational facilities that are closer to the Project site than any commercial and educational facilities to the south in the community of Wildomar. Access to Canyon Hills will be on improved roads rather than dirt roads. Po. 29 Noise. ;j'd para.. last sentence Comment 18 Why is construction noise being discussed when the Proposed Project is not development? Response 18 The Proposed Project is a General Plan Amendment, Zone Change, and Annexation for the Project Site and by itself would not result in construction noise. However, if the City approves the Proposed Project, this would indicate that the City's policy would favor medium density residential development rather than undeveloped open space on the Project Site which would ultimately mean development related construction noise. Future development (specific development plan and/or tentative tract map) would require a second tier of discretionary review and CEQA documentation by the City. Po. 30, a), ~d para Comment 19 '" Wildland fire impacts will not be able to be mitigated. Response 19 The Proposed Project is a General Plan Amendment, Zone Change, and Annexation for the Project Site and by itself would not result in wildland fire impacts. However, if the City approves the Proposed Project, this would indicate that the City's policy would favor medium density residential development rather than undeveloped open space on the Project Site which would ultimately mean development exposure to wildland fire risk. Compliance with all applicable fire safety requirements (Le., fire hydrants, fuel modification areas, etc.) will reduce any adverse wildland fire impacts to less than significant. Future development (specific development plan and/or tentative tract map) would require a second tier of discretionary review and CEQA documentation by the City. Po. 31, 1st para., 4h sentence Comment 20 The sentence "At this time, the project is limited to neither a pre-zoning ordinance that does not approve nor guarantee development on the property" doesn't make sense. Response 20 So noted. The intent of this sentence is clarification that the Proposed Project is a r- General Plan Amendment, Zone Change, and Annexation for the Project Site and by Responses to Comments Canyon Hills Estates Initial Study/Negative Declaration 15 AGENDA ITEM NO. 2J PAGE c!)c.( OF 1 <f 8 ~ - itself would not result in development. However, if the City approves the Proposed Project, this would indicate that the City's policy would favor medium density residential development rather than undeveloped open space on the Project Site which would ultimately mean the need to provide public services for development. Future development (specific development plan and/or tentative tract map) would require a second tier of discretionary review and CEQA documentation by the City. Po. 31. 2"d oara.. 1st sentence .~...'~. r '~ ..." Comment 21 Police project to the Project site is currently provided by the Riverside County Sheriff Department, not the Lake Elsinore Police Department. Response 21 So noted. Any future development would be served by the Lake Elsinore Police Department under contract by the Riverside County Sheriff's Department. Po. 31. 2"d & :rd oara. Comment 22 If the Proposed Project does not result in development, why are development fees discussed? Response 22 ...., The Proposed Project is a General Plan Amendment, Zone Change, and Annexation for the Project Site. However, if the City approves the Proposed Project, this would indicate that the City's policy would favor medium density residential development rather than undeveloped open space on the Project Site which would ultimately mean development fees to offset some City services. Future development (specific development plan and/or tentative tract map) would require a second tier of discretionary review and CEQA documentation by the City. P. 33 a-d Comment 23 The statement that the pre-zoning will require a Specific Plan is confusing. Response 23 The Proposed Project is a General Plan Amendment, Zone Change, and Annexation for the Project Site. If the City approves the Proposed Project, the zoning designation would be Specific Plan. This would require a specific development plan prior to development approval. ...., Responses to Comments Canyon Hills Estates Initial Study/Negative Declaration AGENDA ITEM NO. PAGE c15 16 \7~ OF 1'1- 8 pq 35.. last para. & date/siqnature line ~.. Comment 24 Wildomar Incorporation Now did not find all related project file documents available for review at the City of Lake Elsinore. Therefore, the Planning Commission hearing should have been rescheduled. In addition, why was the date and signature line left blank in the IS/NO? Response 24 The Planning Commission is considered an advisory body and is not required to review the public comments prior to making a recommendation on the project. Nevertheless, all comments that were received were provided to the Planning Commission at the public hearing for review and consideration prior to making a recommendation to the City Council. The City Council public hearing is scheduled for April 11, 2006. The copy submitted to the State Clearinghouse was signed and dated. FormJ-Po. 10f14 Comment 25 Whose General Plan and zoning designation is referred to in Items 6 and 7? Response 25 ----- The General Plan and zoning designation referred to in Items 6 and 7 is the County General Plan and zoning designations. Form J - Po. 2 of 14 Comment 26 The appropriate box specifying the determination of the appropriate CEQA documents is not checked. Response 26 So noted. The box stating a Negative Declaration will be prepared should have been checked. Form J - Po. 9 & 10. IX a & b Comment 27 The "Less than Significant Impact" Box is checked and says See Attachment for further explanation. Response 27 r-- See Attachment refers to the Initial Study discussion. Responses to Comments Canyon Hills Estates Initial Study/Negative Declaration 17 AGENDA ITEM NO.~ PACE J..(p OF IY 8 Form J - PG. 10, XI. Noise c) Comment 28 Why is the Less than Significant Impact Box checked when the Proposed Project Site will remain vacant? Response 28 The Proposed Project is a General Plan Amendment, Zone Change, and Annexation for the Project Site and by itself would not result in development related noise. However, if the City approves the Proposed Project, this would indicate that the City's policy would favor medium density residential development rather than undeveloped open space on the Project Site which would ultimately mean development related noise. Conformance with applicable City noise standards would likely reduce any potential noise impacts to less than significant. However, future development (specific development plan and/or tentative tract map) would require a second tier of discretionary review and CEQA documentation by the City to validate this conclusion. Form J - PG. 11, XII Population and HousinG a) Comment 29 The "Less than Significant Impact" Box is checked and says See Attachment for further explanation. Response 29 See Attachment refers to the Initial Study discussion. Form J - PG. 11 & 12. XIII Public Services a) Comment 30 The "Less than Significant Impact" Box is checked and says See Attachment for further explanation. Response 30 See Attachment refers to the Initial Study discussion. Form J - Po. 13. XVI Utilities and Service Systems d) Comment 31 The "Less than Significant Impact" Box is checked and says See Attachment for further explanation. Response 31 See Attachment refers to the Initial Study discussion. Responses to Comments Canyon Hills Estates Initial Study/Negative Declaration 18 I} l ACENOA ITEM NO. b PACE ;)7 OF Ii- 9 " '-'" '-'" '-'" ,-.., CHE Annexation Report and Plan for Providina Services. Po. 2 _:fd para.. item (1) Comment 32 Without seeing the Canyon Hills Specific Plan and because the City's General Plan is currently being updated, it can't be substantiated that the Proposed Project is consistent with the City's General Plan and the Canyon Hills Specific Plan. Response 32 The Canyon Hills Specific Plan is on file at the City of Lake Elsinore. The Proposed Project is a General Plan Amendment, Zone Change, and Annexation for the Project Site. The City of Lake Elsinore is currently in the process of comprehensively updating its General Plan. As part of this General Plan update process, the City is analyzing alternative development scenarios that focus on various types of development opportunities surrounding the lake. This analysis is in the draft stages and has not been fully analyzed pursuant to CEQA. In all of the alternatives being considered by the City of Lake Elsinore, the Canyon Hills Estates project site is included as a Planning Area. The applicant has prepared preliminary conceptual plans for discussions with the City regarding the provision of services, access, etc. If the City approves the Proposed Project, this would indicate that the City's policy would favor medium density residential development similar to the existing Canyon Hills Specific Plan. Future development (specific development plan and/or tentative tract map) would require a second tier of discretionary review and CEQA documentation by the City. ,-.. CHE Annexation Report and Plan for Providino Services. Po. 2. Item (4) Comment 33 The Proposed Project is not consistent with the larger lot rural pattern of properties to the west and south of the Project site. Response 33 The Proposed Project does not include large rural lots. However, preliminary conceptual plans identify buffer zones to reduce any land use incompatibility with any existing rural residential development. CHE Annexation Report and Plan for Providino Services. Lona-Ranoe Plannina. P. 3 Comment 34 If the proposed project is still vacant land, how can the Proposed Plan for Providing Services have any meaning or relevant? Response 34 ,-.. The Proposed Project is a General Plan Amendment, Zone Change, and Annexation for the Project Site. If the City approves the Proposed Project, this would indicate that the City's policy would favor medium density residential development rather than vacant Responses to Comments Canyon Hills Estates Initial Study/Negative Declaration 19 AGENDA ITEM NO. "2.\ PAGE c::> 8' OF I V 8 land on the Project site. Future development (specific development plan and/or tentative tract map) would require a second tier of discretionary review and CEQA documentation by the City. (.-, '-' CHE Annexation Report and Plan for Providina Services. Land Use Plan - Para 2. P. 4 Comment 35 The Tract Map is not for preliminary planning purposes. Response 35 The Proposed Project is a General Plan Amendment, Zone Change, and Annexation for the Project Site. The preliminary conceptual plans were submitted for discussion purposes as Tract Map No. 34249. However, the Proposed Project does not include Tract Map 34249 for approval by the City. Future development (a specific development plan and/or tentative tract map) would require a second tier of discretionary review and CEQA documentation by the City. CHE Annexation Re"f)ort and Plan for Providina SerVices. IV. City Services. P. 5 - Transportation/Circulation. rt para.. last sentence and list of streets Comment 36 The key streets descriptions are incorrect for the following streets. · Palomar Street · Grand Avenue · Mission Trail '-' Response 36 These clarifications are so noted. CHE Annexation Report and Plan for Providina Services. IV. City Services. Transportation/Circulation. p. 6. :rd para. Comment 37 Cottonwood Canyon Road does not terminate at the southern boundary of the Canyon Hills Specific Plan. It continues southeast where it terminates at Bundy Canyon Road in the community of Wildomar. Response 37 Improved Cottonwood Canyon Road terminates at the southern boundary of the Canyon Hills Specific Plan. Cottonwood Canyon Road continues as an unimproved County dirt Road until it terminates at Bundy Canyon Road. ......., Responses to Comments Canyon Hills Estates Initial Study/Negative Declaration 20 AGENDA ITEM NO. 2J PAGE 02'1 OF /'/8 ~ CHE Annexation ReDort and Plan for Providina Services. IV. City Services. Law Enforcement. DD. 6 & 7 Comment 38 No details are provided on how future services would be provided or how they will be funded. Response 38 On page 8, it states that any financial participation by the Proposed Project will be determined through the development review process and via an established Community Finance District for police and fire services. CHE Annexation ReDort and Plan for Providina Services. IV. City Services. Fire Proiection. DD. 8 & 9 Comment 39 No details are provided on how future services would be provided or' how they will be funded. Response 39 ~! On page 9, it states that the Canyon Hills Estates project will contribute to the provision of fire protection services through the payment of City Development Impact Fees and via established Community Finance District for police and fire services. CHE Annexation ReDort and Plan for Providina Services. IV. City Services. Schools. D. 14. Dara 4 Comment 40 Will the proposed annexation create a split in school districts? Elsinore High School can't adequately serve all existing and potential students in the community of Wildomar. Response 40 All students from the Canyon Hills Estates project will attend the Lake Elsinore Unified School District. Any proposed development will be required to offset any increased enrollment through payment of school impact fees. CHE Annexation Report and Plan for Providina Services. VII. Conclusions Comment 41 The City will not receive revenue from motor vehicle license fees. Response 41 r- So noted. Responses to Comments Canyon Hills Estates Initial Study/Negative Declaration 21 ACENDA ITEM NO. PACE 30 Ll OFJ'1-g Harv 0 kstra .~ Comment 1 .....,; Wildomar would welcome the proposed development. Response 1 The opinion of the author is so noted. This comment does not address the CEQA document. Comment 2 I ask the lake Elsinore Planning Commission to stop this aggravating confrontation now. Response 2 The opinion of the author is so noted. This comment does not address the CEQA document. Gina Castanon Comment Opposed to the SOl and Annexation. Response "" The opinion of the author is so noted. This comment does not address the CEQA document. illiam J. Zeidlik, Townshi Center Comment The Proposed Project may be in violation of the Cortese-Knox-Hertzberg (CKH) law, Riverside County lAFCO written policies, and CEQA. Response All comments are so noted. The commenter does not provide specifics regarding any potential violations of the above laws and policies. Therefore, it is difficult to respond to these comments. Gear e W. & Marie Ta lor Comment 1 I spoke in opposition to the Proposed Project at the Planning Commission hearing. '" 1 '-' Responses to Comments Canyon Hills Estates Initial Study/Negative Declaration 22 AGENDA ITEM NO.-2L-- PAGE 3 I OF ---11- ~ Response 1 1"". So noted. This comment does not address the CEQA document. Comment 2 The Wildomar Municipal Advisory Council was never notified of the Proposed Project. The Proposed Project also interferes with the Wildomar City Hood Application to LAFCO. The City of Lake Elsinore should not have processed this development application. Response 2 The property owner has requested annexation to the City of Lake Elsinore because of the proximity of public services and utilities. The City Council will review this request at a public hearing on April 11, 2006. The City of Lake Elsinore notified Wildomar Incorporation Now, the Wildomar Chamber of Commerce and the County of Riverside LAFCO. Comment 3 The Planning Commission denied my request to table the Proposed Project until LAFCO made a decision on the Wildomar incorporation. Response 3 r So noted. This comment does not address the CEQA document. Comment 4 The Proposed Project should have been processed through the County of Riverside because of stronger controls. Response 4 So noted. This comment does not address the CEQA document. Comment 5 Attached please find a copy of the letter read into the record at the Planning Commission public hearing. Response 5 So noted. This comment does not address the CEQA document. This letter will become part of the administrative record for the Proposed Project. r Responses to Comments Canyon Hills Estates Initial Study/Negative Declaration 23 AGENDA ITEM NO. 21 . PACE ~;). ..OF l'fe Comment 6 I was told that the Planning Commission voted again on the Proposed Project after Ileft. Is this true? If so, this is not ethical. Response 6 The minutes of the February 21, 2006 Planning Commission are on file at the City of Lake Elsinore. Responses to Comments Canyon Hills Estates Initial Study/Negative Declaration 24 AGENDA ITEM NO. 2- ( PACE 33, OF I 'f. f1 .,..~~ ;; .., .....; ) ~ ) "-'" .,-..) RESOLUTION NO. 2006-43. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA ADOPTING NEGATIVE DECLARATION NO. 2006-02 WHEREAS, Vicki Mata, Trumark Companies, has submitted an application for General Plan Amendment No. 2005-08, Zone Change (pre-Zone) No. 2005-09, and Annexation No. 75. The 246.4 acre site is located immediately adjacent to the existing southern boundary of the Canyon Hills Specific Plan within parcels described as APN(S) 365-220-026, 365-230-001, 005, 006, 007, 009, 010, 011, 012, AND 013 for property identified as "Canyon Hills Estates"; and WHEREAS, Canyon Hills Estates is defined as a "project" by Section 21065 of the California Environmental Quality Act (CEQA), Cal. Public Resources Code Section 21000 et seq., which is defined as an activity which may cause either a direct physical change in the environinent, or a reasonably foreseeable indirect physical change in the environment and which includes the issuance to a person of a lease, permit, license, certificate, or other entitlement for use by one or more public agencies; and ,~ WHEREAS, Negative Declaration No. 2006-02 has been prepared to evaluate environmental impacts resulting with the project; and WHEREAS, the Planning Commission of the City of Lake Elsinore at a regular meeting held on February 21, 2006, made its report upon the desirability of the proposed project, however, the Planning Commission's split-decision vote did not result in a recommendation to the City Council for Negative Declaration No. 2006-02, and WHEREAS, public notice of said applications has been given, and the City Council has considered evidence presented by the Community Development Department and other interested parties at a public hearing held with respect to this item on Aprilll, 2006; and NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DOES HEREBY RESOLVE AS FOLLOWS: SECTION 1. The City Council finds and determines that Negative Declaration No. 2006-02 is adequate and prepared in accordance with the ~ requirements of the California Environmental Quality Act (CEQA) which analyzes ACENDA ITEM NO. ~2'L.._,.. ',H_ PACE. 3~ ....OF rill . CITY COUNCIL RESOLUTION Page 2 of 4 NEGATIVE DECLARATION NO. 2006-02 environmental effects of the project, based upon the following findings and determinations. SECTION 2. That in accordance with State Planning and Zoning law and the City of Lake Elsinore, the following findings for the approval of Negative Declaration No. 2006-02 have been made as follows: 1. Revisions in the project plans or proposals made by or agreed to by the applicant before a proposed negative declaration and initial study are released for public review would avoid the effects or mitigate the effects to a point where clearly no significant effects would occur; and The applicant has made revisions to the project or has agreed to specific conditions which would avoid the effects of the project to a point where no significant environmental effects will occur. 2. There is no substantial evidence, in light of the whole record before the agency that the project as revised may result in a significant effect on the environment. Pursuant to the evidence received in the light of the whole record presented by staff to the Planning Commission, the project will not have a significant effect on the environment considering the limited scope of the project. 3. Mitigation measures have been required to ensure all potentially significant impacts are reduced to levels of insignificance. The proposed project necessitated only a Negative Declaration, not a Mitigated Negative Declaration. No mitigation measures have been required as; all environmental impacts have been reduced to the level of insignificance by project design. 4. The Negative Declaration reflects the lead agency's independent judgment and analysis. City staff prepared Negative Declaration No. 2006-02. Together with any comments received during the public review process, the Planning Commission exercised its independent judgment in considering Negative Declaration No. 2006-02, and making its recommendation. AGENDA ITEM NO. :21 PAGE ]) OF IV- 8 /<'" ....." ....." .~ ' ......." .~' CITY COUNCIL RESOLUTION Page 3 of 4 NEGATIVE DECLARATION NO. 2006-02 5. Specify the location and custodian of the documents or other material constituting the record of proceeding. The Administrative Record for the project is located at City Hall, 130 S. Main Street, Lake Elsinore, CA 92530. The project planner, Mr. Kirt A. Coury, is the custodian of the Administrative Record. SECTION 3. BASED UPON THE ABOVE FINDINGS, the City Council of the City of Lake Elsinore, California herby approve Negative Declaration No. 2006- 02. SECTION 4. This Resolution shall take effect from and after the date of its passage and adoption. PASSED, APPROVED AND ADOPTED this 11 th day of April 2006, by the following vote: ,.--... AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: ABSTAIN: COUNCILMEMBERS: Robert Magee, Mayor City of Lake Elsinore ATTEST: ,-.... Frederick Ray, City Clerk AC~NCA ITEM NO. ..2t_.....~ PACE J~n OF III ~ _ CITY COUNCIL RESOLUTION Page 4 of 4 NEGATIVE DECLARATION NO. 2006-02 """ APPROVED. AS TO FORM: Barbara Zeid Leibold, City Attorney City of Lake Elsinore (SEAL) """ """ AGENDA ITEM NO.:=: ,2..1,- ~ , 31 t;\F' t./ 0 PACE ,=,__",.'IJ Jl - RESOLUTION NO. 2006- 44 ~, A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, MAKING AN AMENDMENT TO THE LAKE ELSINORE GENERAL PLAN LAND USE MAP FOR THE FIRST CYCLE OF THE CALENDAR YEAR 2006 FOR THE APPROVAL OF GENERAL PLAN AMENDMENT NO. 2005-08 CHANGING THE CITY'S BOUNDARY TO INCORPORATE PARCELS KNOWN AS APN(s) 365-220-026,365-230-001, -005, -006, -007, -009, -010,011, -012, AND -013. WHEREAS, Vicki Mata, Trumark Companies, has initiated proceedings to amend the General Plan Land Use Map by requesting a General Plan Amendment changing the City's boundary to incorporate parcels known as Assessor Parcel Number( s) 365-220-026, 365-230-001,005,006, 007, 009, 010, 011, 012, AN D013;and WHEREAS, Section 65361(a) of the Government Code provides that no mandatory element of a General Plan shall be amended more frequently than four times during any calendar year; and ,.-., WHEREAS, the Planning Commission of the City of Lake Elsinore at a regular meeting held on February 21, 2006 made its report upon the desirability of the proposed project, however, the Planning Commission's lack of a second motion did not result in a recommendation to the City Council for General Plan Amendment No. 2005-08, and WHEREAS, public notice of said application has been given, and the City Council has considered evidence presented by the Community Development Department and other interested parties at a public hearing. held with respect to this item on April 11, 2006; NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DOES HEREBY RESOLVE AS FOLLOWS: SECTION 1. The City Council has considered the proposed General Plan Amendment No. 2005-08, prior to making a decision to approve the proposed amendment to the Land Use Map. The City Council finds and determines that Negative Declaration No. 2006-02 is adequate and prepared in accordance with the requirements of the California Environmental Quality Act (CEQA) which analyzes environmental effects of ends City Council certification, based upon the following findings and determinations. ~ SECTION 2. That in accordance with State Planning and Zoning law and the City of Lake Elsinore, the following findings for the approval of General Plan Amendment No. 2005-08 have been made as follows: ACENDA ITEM NO. 2-t PACE 3! OF I ~ g CITY COUNCIL RESOLUTION Page 2 of3 GENERAL PLAN AMENDMENT NO. 2005-08 ;"" ~ 1. The proposed General Plan Amendment will not be; a) detrimental to the health, safety, comfort or general welfare of the persons residing or working within the neighborhood of the proposed amendment or within the City, or b) injurious to the property or improvements in the neighborhood or within the City. The proposed General Plan Amendment has been analyzed relative to its potential to be detrimental to the health, safety, comfort and welfare of the persons residing or working within the neighborhood of the proposed amendment. The existing designation of Very Low Density Residential and Mountainous area is similar to the Rural Residential and Mountainous Residential designated in the County General Plan. Further, staff, concluded, that the proposal to develop the site under the Specific Plan designation assures that the development standards and design guidelines of the Specific Plan will be consistently applied. 2. The proposed General Plan Amendment will permit reasonable development of the area consistent with its constraints and will make the area more compatible with adjacent properties. The existing City General Plan designation of Very Low Density and Mountainous area are similar and consistent with the County's General Plan designation of Rural and Mountainous Residential. Therefore, there is little significant change to the anticipated land use for the site. 3. The proposed General Plan Amendment would establish a land use designation and usage more in character with the subject property's location, access, and constraints. The General Plan Amendment proposes a boundary adjustment and would keep a designation in conformance with the existing City General Plan of Very Low Density and Mountainous area, as well as be consistent with the County's General Plan designation of Rural and Mountainous Residential. In addition, the density is appropriate for the site's development conditions because it accommodates a range of site constraints, and permits a seamless integration with the adjacent Canyon Hills Specific Plan area, while remaining sensitive to the adjacent rural residential land uses 4. The proposed General Plan Amendment will not have a significant effect on the environment. '....., The General Plan Amendment does not propose any significant change to existing land use designations and will not result in any significant environmental impact. All environmental impacts have been reduced to the level of insignificance by project design and Negative Declaration No. 2006-02 has been prepared. ~ AGENDA ITEM NO.~ PAGE 31 OF IY.~ ;'""'" 1 CITY COUNCIL RESOLUTION Page 3 of 3 GENERAL PLAN AMENDMENT NO. 2005-08 SECTION 3. BASED UPON THE ABOVE FINDINGS, the City Council of the City of Lake Elsinore, California herby approves General Plan Amendment No. 2005- 08. SECTION 4. This Resolution shall take effect from and after the date of its passage and adoption. PASSED, APPROVED AND ADOPTED this 11th day of April 2006, by the following vote: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: ~ ABSTAIN: COUNCILMEMBERS: Robert Magee, Mayor City of Lake Elsinore ATTEST: Frederick Ray, City Clerk APPROVED AS TO FORM: Barbara Zeid Leibold, City Attorney City of Lake Elsinore (SEAL) r ACENDA ITEM NO. PAGE tf 0 2l OF Iff? ORDINANCE No.llt-) AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, APPROVING ZONE CHANGE (PRE-ZONE) NO. 2005-09 TO CHANGE THE ZONING DESIGNATION OF THE PARCELS SPECIFICALLY DESCRIBED AS APN(S) 365-220-026, 365-230-001, 005" 006, 007, 009, 010, 011, 012, AND 013 TO SP SPECIFIC PLAN SUBJECT TO COMPLETION OF THE ANNEXATION NO. 75 <<~ ,,", '~ ....", WHEREAS, Vicki Mata, Trumark Companies, has filed an application to change the Zoning Designation of the parcels known as Assessor Parcel Number(s) 365-220-026, 365-230-001,005,006,007,009,010,011,012, AND 013 to SP Specific Plan subject to the completion of Annexation No. 75; and WHEREAS, the Planning Commission of the City of Lake Elsinore at a regular . meeting held on February 21,2006 made its report upon the desirability of the proposed project, however, the Planning Commission's split-decision vote did not result in a recommendation to the City Council for Zone Change No. 2005-09; and WHEREAS, public notice of said application has been given, and the City Council has considered evidence presented by the Community Development Department and other interested parties at a public hearing held with respect to this item on April 11, 2~. ~ THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DOES ORDAIN AS FOLLOWS: SECTION 1. The City Council has considered the proposed Zone Change (Pre- Zone) No. 2005-09, prior to making a decision to approve the proposed amendment to the Land Use Map and establish a Zoning Designation. The City Council finds and determines that Negative Declaration No. 2006-02 is adequate and prepared in accordance with the requirements of the California Environmental Quality Act (CEQA) which analyzes environmental effects of ends City Council certification, based upon the following findings and determinations. SECTION 2. That in accordance with State Planning and Zoning law and the City of Lake Elsinore, the following findings for the approval of Zone Change (Pre-Zone) No. 2005-09 have been made as follows: SECTION 3. If any provision, clause, sentence or paragraph of this Ordinance or the application thereof to any person or circumstance shall be held invalid, such invalidity shall not affect the other provisions of this Ordinance and are hereby declared to be severable. '-" AGENDA ITEM NO. PAGE tf I <--.\ ' , .4-- OF (t{.8 CITY COUNCIL ORDINANCE NO. Page 2 of2 ~) SECTION 4. This Ordinance shall take effect thirty (30) days after the date of its final passage. The City Clerk shall certify as to adoption of this Ordinance and cause this Ordinance to be published and posted in the manner required by law. INTRODUCED AND APPROVED UPON FIRST READING this 11th -day of April 2006, upon the following roll call vote: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: ABSTAIN: COUNCILMEMBERS: PASSED, APPROVED AND ADOPTED UPON SECOND READING this _ day of , 200_, upon the following roll call vote: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ,-.- ABSENT: COUNCILMEMBERS: ABSTAIN: COUNCILMEMBERS: Robert E. Magee, Mayor City of Lake Elsinore ATTEST: Frederick Ray, City Clerk City of Lake Elsinore APPROVED AS TO FORM: Barbara Zeid Leibold, City Attorney City of Lake Elsinore r' AGENDA ITEM NO.~ PAGE. . '-11:: 9F ~I <f 8 RESOLUTION NO. 2006-~ A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, CONSENTING TO THE COMMENCEMENT OF PROCEEDINGS TO ANNEX THE TERRITORY DESIGNATED AS ANNEXATION NO. 75 FOR PARCELS KNOWN AS APN(s) 365-220-026, 365-230-001, -005, -006, -007, -009, -010, 011, -012, AND -013. WHEREAS, Vicki Mata, Trumark Companies, has initiated an application for the annexing of certain properties described as Assessor Parcel Number(s) 365-220-026, 365-230-001, 005, 006, 007, 009, 010, 011, 012, AND 013 (approximately 246.4 acres) into the corporate boundaries of the City of Lake Elsinore; and . WHEREAS, this proposal is made pursuant to the Cortese-Knox-Hertzberg Local Government Reorganizatio.nAct 012000 (Government Code Section 56000-56001); and WHEREAS, the City of Lake Elsinore has submitted an additional application for Zone Change No. 2005-09 within the unincorporated boundaries of County of Riverside; and WHEREAS, the Planning Commission of the City of Lake Elsinore at a regular meeting held on February 21,2006 made its report upon the desirability of the proposed project, however, the Planning Commission's lack of a second motion did not result in a recommendation to the City Council for Zone Change (Pre-Zone) No. 2005-09, and WHEREAS, public notice of said application has been given, and the City Council has considered evidence presented by the Community Development Department and other interested parties at a public hearing held with respect to this item on April 11, 2006; WHEREAS, it is the desire of the. City Council to give its consent to the commencement of annexation proceedings and concurrent sphere of influence amendment THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, DOES HEREBY RESOLVE AS FOLLOWS: SECTION 1. The City Council has considered the proposed Annexation (Annexation No. 75), prior to approving commencement proceedings to annex the subject territory. The City Council finds and determines that Negative Declaration No. 2006-02 is adequate and prepared in accordance with the requirements of the California Environmental Quality Act (CEQA) which analyzes environmental effects of ends City Council certification, based upon the following findings and determinations. ACENDA ITEM NO. '2\ PAGE Lf] OF tV- g F...~ t' ',..~ ""'" .....,; ~ , ~ CITY COUNCIL RESOLUTION ___ Page 2 of 3 ANNEXATION NO. 75 ,r-, SECTION 2. That in accordance with the Cortese-Knox-Hertzberg Local Government Reorganization Act of2000 (Government Code Section 56000-56001) and the City of Lake Elsinore the following findings for the approval of Annexation No. 75 have been made as follows: 1. The proposed annexation area is contiguous to the City of Lake Elsinore and will not create pockets or islands. The proposed annexation area borders the City of Lake Elsinore and is adjacent to the area identified as the Canyon Hills Specific Plan area. The project proposes reasonable extension of the city boundary area in that the annexation of the proposed parcels will not create any pockets or islands. The proposed annexation will help rectify an existing City peninsula that was created when the Wildomar UC was detached from the City's boundary. 2. The proposed annexation will not result in any adverse significant impacts on the environment. The project will not have a significant effect on the environment and is consistent with the City's adopted General Plan. 3. The proposed annexation will eliminate an existing undesired pocket of the county area. The proposed annexation consists of the removal of 246.4 acres of land from the County of Riverside's jurisdiction and placement of the same into the city limits of Lake Elsinore. The annexation area borders the City of Lake Elsinore and is adjacent to the area identified as the Canyon Hills Specific Plan area. PURSUANT TO THE ABOVE FINDINGS, IT IS RESOLVED by the City Council of the City of Lake Elsinore, California, that the commencement of proceedings for Annexation No. 75 be approved. PASSED, APPROVED AND ADOPTED this 11 tb day of April 2006, by the following vote: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: ,.. ABSTAIN: COUNCILMEMBERS: AGENDA ITEM NO. PAGE Y V '2-\ OF I rr 8 CITY COUNCIL RESOLUTION Page 3 of3 ANNEXATION NO. 75 ATTEST: Frederick Ray, City Clerk APPROVED AS TO FORM: Barbara Zeid Leibold, City Attorney City of Lake Elsinore (SEAL) Robert Magee, Mayor City of Lake Elsinore AGENDA ITEM NO. 2J PAGE L/-5 OF I~ g ~...~..- .i-"---~ '.- ." " '-II' ,....... GENERAL CONDITIONS 1. The applicant shall defend (with counsel acceptable to the City)) indemnify) and hold harmless the City) its Official) Officers) Employees) Consultants and Agents from any claim) action) or proceeding against the City) its Official) Officers) Employees) or Agents to attach) set aside) void) or annul an approval of the City) its advisory agencies) appeal boards) or legislative body concerning the project) which action is bought within the time period provided for in California Government Code Sections 65009 and/or 66499.37) and Public Resources Code Section 21167. The City will promptly notify the Applicant of any such claim, action) or proceeding against the City and will cooperate fully with the defense. If the City fails to promptly notify the Applicant of any such claim) or proceeding, the Applicant shall not, thereafter) be responsible to defend, indemnify) or hold harmless the City. ANNEXA nON NO. 75 2. The annexation of said property shall comply with the requirements contained in the Cortese-Knox- Herzberg Local Government Reorganization Act of 2000 (Government Code Section 56000-56001) and the standards and policies established by the Riverside Local Agency Formation Commission ,- (LAFCO). 3. All entitlements contained herein are subject to the completion and approval of the annexation of the subject property. r- AGENDA ITEM NO. '2 \ PACE t.{ b OF I'f- 8 ~ " \../ l -\) ~ Ir1 I;:; fI \'" ".. "t Q~ lb ~ tS L \:1 It=_; ! 1 '; I FEB 1 5 2006 lLill i C1'V 1.'1<'>', --.: :-.!. J' III 1;1 ' . , - .-..- - . - - ~. . --. ..- /~/Yg ~ f!" \ I ..-". '~-------'-- City of Lake Elsinore 130 S. Main Street Lake Elsinore, CA 92530 . Atten: City of Lake Elsinore City Council / Mr. Rolfe Preisendanz, Director, Community Development Dept. 2/14/06 c Subject: Annexation To Whom It May Concern: I have been a resident of the community of Wildomar for over 15 years & it came to my attention at a Wildomar Municipal Advisory Meeting on Feb. 13, 2006 that the City of Lake Elsinore proposes to annex a portion of our community for the purpose of constructing a bousing tract. Tbis came as a surprise to me since Wildomar has & is planning to become a city in the near future. In fact, I'm told that a filing ha~ taken place with LAFCO for city-hood. Furthermore, even before the City of Lake Elsinore has filed for annexation of a portion ofWildomar, it has developed a Tentative Tract Map (Tract Map 34249/Canyon Hills Estates) as part of a General Plan Amendment No. 2005-08. As neighboring communities for over one hundred years, it came as a surprise to me that the City of Lake Elsinore has intentions with very short notice for public hearings on the matter. May I ask what is going on here? Not only the City of Lake Elsinore appears to be interfering with the city-hood process for Wildomar, this planning seems to be overt & without merit. Is this the manner in which neighboring communities should act? May I add that this annexation effort is costing the residents of the City of Lake Elsinore a great deal of money. Again, may I ask, for what purpose or benefit to the City of Lake Elsinore or, more importantly, its residents? ~ Therefore, I ask that you discontinue efforts to annex any portion of Wildomar as a good neighbor. Please except, without interlerence, the attempts to become a city. Respectfully, "b~ CLvi Darrell Ruff 0 23021 Sweetbay Dr. Wildomar, CA 92595 RECEI\/ED FEB 1 5 2006 cc: Supv. Buster, 1st Dist. of Riverside County Mr. G. Spiliotis, Executive Director of LAFCO CITY CLERKS OFFICE ......, J!!C<:';i\l"\tJ, \i.~l!,Z "V, 2\ 6~~I-~'1ZL... II j,.~ l:...~1l'rt ~\,)''o'/'''_~___.~..~_ .~.'" ..., . '" "" f\i1~;!?;. If. '1- 'I';'; I~;g ..~ . If'o'li '~~'N-'..! ...."'_.......w~_~__.___~___..".. ....t..... "..-.- * ;WiN Wildomar Incorporation Now (909) 330-03551 P.O. Box 14761 Wildomar, CA 92595 www.WildomarWIN.org Protecting Wildomar Independence City of Lake Elsinore 130 S. Main Street Lake Elsinore, Ca 92530 February 14th, 2006 To: Robert Brady, City Manager Rolfe Prejsendanz~ DireGtor~ Community Development Department ~Mr. Kirt A. Coury, Associate Planner Subject: Canyon Hills Estates, General Plan Amendment No. 2005-08, Annexation No. 75, Zone Change No. 2005-09 and Negative Declaration No. 2006- 02 also known as Tract Map 34249 . ~\ An open letter to the City of Lake Elsinore - This is to inform you that as the incorporation proponents for the city of Wildomar, we are absolutely opposed to any attempt by the City of lake Elsinore to annex territory that lies within our proposed city boundaries. These boundaries have long been recognized as our community boundary. In fact, these are the boundaries of the Wildomar Municipal Advisory Council established 1988. Further, they are the official boundaries of Unincorporated Community #7 approved by LAFCO on 5/97. Finally, they are the boundaries recently evaluated as the part of a municipal service review and annexationlincorporation study (MuniFinancial Study). Lake Elsinore was not a participant in this study. With regard to the subject area mentioned above, the sudden attempt by lake Elsinore to annex this area is inappropriate. We have submitted our application for incorporation. The current Wildomar boundary in this area is along a natural geographic feature and represents a logical boundary for the city limits of Wildomar. We expect the city of lake Elsinore to respect our long established boundaries and abandon any attempt at the piecemeal annexation of Wildomar. Yours, ~ Bob Cashman, Chairman Wildomar Incorporation Now I"'"'""' AGENDA ITEM NO. ? \ PAGE '-I g OF If 8 * tWiN /-, Protecting Wildomar Independence Wildomar Incorporation Now (909) 330-03551 P.O. Box 1476 f Wildomar. CA 92595 www. WildomarWlN.org ~ city of lake Elsinore 130 S. Main Street lake Elsinore, Ca 92530 February 14th, 2006 To: Robert Brady, City Manager Rolfe Preisendanz, Director. Community Development Department Mr. Klrt A. Coury, Associate Planner Subject: Canyon Hills Estates, General Plan Amendment No. 2005-08, Annexation No. 75, Zone Change No. 2005-09 and Negative Declaration No_ 2006-02 also known as Tract Map 34249 In November of 2005, four members of Wildomar Incorporation Now attended a City of Lake Elsinore seeping meeting held for the purpose of gathering comments for topics to be addressed in the DEIR for the general plan update They were told that no part of Wildomar was in consideration for annexation. When it was pointed out that the map you published was actually incorrect, they were assured that you had simply misprinted the map. Now, it appears that the city really had a plan an along to piecemeal annex a part of Wi/domar. ~ Our group requested information about the Canyon Hills Estates and the Annexation plan proposed by the city. This information was promised to us by February 13th or 14th. When it appeared that this information was not forthcoming, we filed an official written request for information. Now we have been informed by the citycJerk that this infonnation is coming but will not be available for another 14 days. This is after the time for public comment closes. At the very least it is your obligation to extend the public comment time for another 30 - 60 days. Until the city is able to provide the pUblic with the fnformation needed for assessment, how can there be any legal or ethical right to proceed? After we receive the information, we will need some time to have the specified general plan amendments and the project data reviewed and inspected by qualified professionals_ From what information we have been furnished it appears that the general plan amendment is unfinished. Apparently, the General Plan amendment which contains this project including tentative tract map 34249 has three different scenarios. The scenarios have not been available to the public and we have not been able to obtain a copy of them. ~ ......." AGENDA ITEM NO.~ PAGE !f? OF liffJ - /'""" This whole process seems quite disorganized. Now we are being told that the tract map is being removed because it was considered premature. I understand why you might want to do this. It doesn't look right for the city to be processing the tract map 34249 even before the city has submitted any request or annexation or requested a change in its 501. It looks like the city has put the cart before the horse. Regardless of how you decide to handle this, it has been made clear to all that the city intends to develop this hillside land in the manner of a medium density development. It is therefore too late for the planning commission to ignore the necessity of disclosing the zoning changes and plans that must precede any proposal for annexation. It cannot be argued that the map is too tentative and may be revised therefore the public doesn't need to see it. The map itself is the source of comments within the document i.e. .number of lots proposed, approximate location of the proposed park. Tentative tract map 34249 shows street location, proposed graded surfaces, street alignment and other important details which go directly to the core of the project. The tentative tract map belongs as part of the public disclosure for these proposals. The negative declaration clearly should not be filed. How can a tract nearby a conselVation habitat element of the RCIP, in a wildlife corridor, and in an area of very low density development be transformed into a housing tract without invoking an EIR? As you "now, the medium density development that is being proposed for this area is located in ./",. ~actJy the wrong place with regard to the multi-species habitat effort of Riverside County We would be remiss if we did not comment on certain aspects of the negative declaration: 1. The density shown in the proposed Negative Declaration is misleading in that it shows the overall density as low when in fact, the hillsides which are protected by Riverside County ordinances have been used to offset the open spaces. Virtually all useable land is being converted to home and apartment parcels. 2. We found no evidence that there have been any studies concerning the traffic generated by this project and the effect on the adjacent communities of Menifee,Canyon lake, and Wildomar On the surface, it appears that increased traffic will be Hdumped" onto roads in the city of Wildomar without any mitigation from the city of lake Elsinore. 3. This proposal has not solicited input from the neighbors of the project. In particular, the community in the adjacent Navajo Springs area is being ignored. 4. The document says no scenic assets will be affected but shows three large water towers as planned for the subdivision. Most water reservoirs do not enhance the scenic aspects of the area. r' AGENDA ITEM NO. 21 PAGE SO OF /yg~ ^~"'. ~-. .~ In conclusion, Wildomar Incorporation Now, formally requests that the planning commission, ""'" 1. Extend the public comment period to be at least 30 days from the time the City of Lake Elsinore is actually able to provide us and the general public with the documents needed to comment on the plan. OR 2. We request that you table the whole annexation proposal.. This option is our preference. Yours, ~ Bob Cashman, Chainnan Wildomar Incorporation Now. ~ cc: City Council of Lake Elsinore Bob Buster, County Supervisor District 1 ) AGENDA ITEM NO. '2 \ '~ PAGE 5/ OF I Cf f7 --~ City of Lake Elsinore ~'i 130 S. Main Street Lake Elsinore, Ca 92530 FAX: 951 674-2392 February 15, 2006 Attn: City Manager Robert Brady Mr. Kirt A County, Associate Planner Re: Canyon Hills Estates, General Plan Amendment No. 2005-08, Annexation No. 75, Zone Change No.200S-09 and Negative Declaration No. 2006-02 also known as Tract Map 34249. Dear Mr. Brady, As a resident ofWildomar for over 30 years, I have worked with our Community Leaders to defend our boundaries from your city's encroachment two times before. We hoped that the city's disrespect for their neighboring community was behind us and you could recognize the need to respect and becoming good neighbors. r--\ You are aware that Wildomar is now in the process of becoming their own city and the above acreage is within the Wtldomar boundaries. While the developer is the one that apparently approached your city, the fact we have already :filed the application, the honorable thing would be to deny the request to place their acreage in your sphere of influence and to annex in your city. Your community can thrive without thjs encroachment, by continuin~ to expand to the North. While you may be able to legally cross into our boundaries, it is ~ot ethically right under the circumstances. Please deny the request of the developers to pursue this in its entirety. Sincerely, ~~~ Gerry Stevenson P.O. Box 292 Wtldomar, Ca 92595 gerry. stevenson@linkline.com r AGENDA ITEM NO. !Z l PAGE 5 i, OF l'fg / ,-~ . . .~." Jufie 9Uupm ~ 15157 el'uuutuurl St.. J!.a/U Ehituvte, ea 92530 ge8Juuvu}16,20C6 eittJ at J!ah, fl6i1uvre 130 Saut4 .Main. SfItut .eaAe u,inoJte, ea 92530 Clltn: !1l4lfe [P1tW~? i)i1t. &nununibJ :b~nunt 5Dept d: 5Wtt a. &uvitj, ~6adate !JlatutDt, !R.e: &uupm ~ utak6, ~ 9lan llnun.dmettt .N (J.. 2ClJS-08, ~ He.. 75, Zatu. eIiange..No.w 2C05-09 mul JVegathre!D~ Ntt. ~ 2006~02 2)ewt .MJt.. f/fU!UJendcuu., . . 9~e d4 no.t ClJ.tttiluu!.llJitIi th. Sl'fwte 0{. 9tzfl.uenu (I{I.e't W~. :J IUwe ~ in Wild6mmt and fuuua/Uuu Iiaul t&y, au auvtIting. {mt. eJtgIuuuL 9fw; (.oag1d 0.(. ..<<wvueta and tt(U1J. ttUJ (U{tJI, cihJ UJald6 ro. atrm!/.r. tfubt. fa.nd2 :1 t i6 tuJt tdg/lL ~, " I !J&uput \.V~ 951471,.1419 I ACENDA ITEM NO. r \ PACE_53 :'o~j7~- '-'" ._~.. -...-. /"""'\ Fcbrul1ty 16, 2006 Mr. Kirt Coury Planning Deparh1tent City III J...a~o Elsinote 130 S. MaIn Stre4't f.Aka Elsuwrc, Co 92530 Re: Canyon Hills E$latee, 240 OClUlJ APN 365-230-00l., 005, 006 /if 007 Dear Mr. Coury, I (,wn 160 OlJlell out of tht! 240 8L'!l'e1 on th", protwl'ty hein~ referreJ to ill Canyon Hill, Estate,. "vu owneJ tlw ~ tor well over 65 yelU"8 nnJ I want to .ee it l1l:1.Utlxed into the City of Lake HWnMe and he:, n l,arl of the I..llku EltinClt(! Communlty. .,..-.. It!. my wish n. well "' my fnmily'. wh to have ibis pf(lptJrly Iwl.,,<)mq II p~ <,f the wonderful City of lAke EI.mcu:,o. "'... t,. I{ yt'lU haw any quemllns, plUMe LJoutact my daulthtut Brenda at (951) 6'n-6678. l11a.nk y ClU, Oordon O. Bohren. r-- ACENDA liEM NO. r)~ PACE 5Y- OFpe FROM: Rose Marie Taylor 34041 Harrow Hill Rd.. Wildomar, Ca. 92595-9296 16 February 2006 ,.,"" ....." TO: City of Lake Elsinore 130 S. Main St. Lake Elsinore, Ca. 92530 ATTN: INFO: Ntl'. Rolfe Preisendanz, Director Community Developme~tpepartment Mr. Kirt A. Coury, Associate. Planner SUBJECT: Oposition to General Plan Amendment 2005-08 l{E: Proposed CanyonHill~^J1~e~ation # 75, Tract 34249 Negative DeclarationJf~OO~02, Zone Change 2005-09. \Ve are very concerned that you are in the process of attempting to annex thl' Canyon Hills Estates property, Tractlylap 34249. \Vildomar is in the process of becoming a city and we do not want to have our acreage annexed to other cities, ora sphere of influence put upon these areas. How concerned would you be ifyo~.were not a city and Temecu'hi or !vI urrieta were in the process of anriex:ation of your land, and your Municipal Advisory Council was notrlotHied of this proposed anne~ation ! ....." \Ve are asking YOll to cancel this proposed annexation and let us have the opportunity to be a friendly city next to YOll. .. ...... ...- Respectfully submitted, ~~Jari~T~~~ Long time Wildomar Resident i \ ......" ACENDA ITEM NO. ? ( PACE 55; ~OF /~f ,-) ,--. r-' FROM: George W. Taylor 34041 Harrow Hill Rd. Wildomar Ca. 92595-9296 16 February 2006 TO: City of Lake Elsinore 130 S. Main St. Lake Ellsinore, Ca. 92530 ATfN: Mr. Rolfe Preisendanz, Director Community Development Department. Mr. . Kirt A. Coury, Associate Planner. INFO: SUBJECT: Opposition to General Plan Amendment # 2005-08. RE: Proposed Canyon Hills Annexation # 75, Tract 34249, Negative Declaration # 2006-02, Zone Change 2005-09. 1. It is my understanding that your department has received an application requesting the above subject development to be annexed into the City of Lake Elsinore. Please be advised that the unincorporated area of Riverside County known as Wildomar has also filed an application with LAFCO for city hood incorporation. As you are aware, in order to serve our residents, if LAFCO approves our applica~ion, we will need to generate as much revenue as we can possibly receive to start up. Hopefully we will also be able to re-gain revenue from the State to help support the effort. We have established our proposed city boundaries that include the area in question, and have had the required economic studies conducted and published that supported our application to LAFCO. In recent past years we have successfully rolled back a Lake Elsinore City Sphere of Influence that would have taken potential commercial base from Wildomar. We have just staved off an annexation attempt by the City of Murrieta. These efforts were successful because the Wildomar citizenry united in a massive effort to fight it. Ethical practice would dictate that all parties involved in a proposal such as this would be notified at the start up. I would prefer to think that this lack of notification to the Wildomar Municipal Advisory Council, on your part, was an inadvertent error. ACENDA ITEM NO. 2- \ PACE ~h OF I'f is Whether it was an inadvertent or not, it is of great concern to us and may jeopardize the efforts that we have gone through to get this far. Although you say that the City did not promote this action, It is my opinion that The City of Lake Elsinore should have advised the applicant of our present process and withheld the application for annexation of Tract 34249. :zesp.ect By Submitted, :/ -~ ./ - C-V / /' George W. Taylor Long time Resident of Wildomar & Community Activist ACENDA ITEM NO. /_ I PACE 5}~_OF_ /'fa ,~ '-' '-' ! '-' ,........ Rick Estes P.O. Box 1571 Wildomar,Ca 92595 February 17,2006 . ~ " ,.;, City of lake Elsinore 130 South Main Street Lake Elsinore, Ca 92530 Attn: Mr. Kirt A. Coury, associate planner Mr. Rolfe Preisendanz Re: Canyon Hills Estates General Plan Amendment No 2005-08, Annexation No. 75, Zone change No. 2005-09 and Negative Declaration No 2006-02 Also known as Tract Map 34249 Please accept this. letter as my public comment on the above project. /"'" 1. 1 am opposed to the above project because I believe it is part of a much larger, highly growth inducing project which will generate tens.ofthousands of day trips per day within the project area and cause traffic to spill out into neighboring communities in all directions and which the City of lake Elsinore will have no control or responsibility. Specifically, Cottonwood Canyon Road, Lost Road, Navaho Springs and adjacent unimproved Roads, Bundy Canyon Road, Sunset and many other rural roads adjacent or near the effected area. 2. Because Wildomar will be the recipient of much of the escaping traffic flow, they then should be the controlling municipality. Lake Elsinore's need for sales tax and development fees should not be the determining consideration for this development. 3. The City's consultant has informed me that no traffic study has been done and none will be ready for at least 60 days. I believe it is irresponsible to continue further with any annexation or sphere change of any kind until all traffic studies are available. Rick Estes r--. AGENDA ITEM NO. 2..1 "". PAOE 5 S OF I Y g ~ . Wildomar Land Development Review Committee P.O. Box 1553 Wildomar, CA 92595 r.'-'" "> ...~ ~::"/~~;,e.~ :"r ~~~~,~, ~, -P:"""""" _ ....".; = 20,2006 Sent by Fax: 951-674-2392 Robert Brady City Manager City of lake Elsinore 130 S. Main Street lake Elsinore, CA 92530 Ref: General Plan Amendment 2005-08, Annex. No. 75, Zone ChanQe 2005-09 Initial Studv/NeQative Declaration No. 2006-02 Dear Mr. Brady: I have read the Initial Study/Negative Declaration, Canyon Hills Estates dated Jan. 2006. My comments are noted below. General Comments: It would seem that the City of lake Elsinore made a mistake or miscalculation by including the proposed Trumark project ~ract map as part of the initial study. You have now, at the last minute and without public notice, pulled the Tract Map statin9 it was premature to include it. Because the City of lake Elsinore included the proposed Trumark project tract map initially, people's written comments were, in good faith, geared toward that. You can't now just discard those comments as "not applicable." You need to continue the hearing while you revise and reissue a corrected version of the Initial Study and, in particular, Form J. ....".; The City of lake Elsinore is in the process of updating and amending their General Plan. One must post the question: 'Why isn't this area being addressed through that process? Why is this particular parcel being separated out and addressed separately from the General Plan update process?" The three alternative maps that have been created through the GPAC process designate this parcel and adjacent large parcels to the east and northeast as "Future Planning Areas." Yet, here we are, before the General Plan update process has even been completed, considering a General Plan Amendment, Pre-zoning, etc. for this area. Was your GPAC committee misled on this particular designation and its potential meaning? Do you believe they thought "Future Planning Area" meant February 2006? I think we should hear from the people on that committee as to what they were led to believe about this area and the meaning of the designation. I would also like to know what their feelings and comments were during the GPAC meetings about potentially annexing portions of the Wildomar and Menifee communities. I believe that the GPAC committee was not in favor of that idea. ) ....".; AGENDA ITEM No.2 \ "-. PACE 5 i:j OF t tf- ~ Ade Comments -- Pg. 2 Feb. 20, 2006 '-'qef: General Plan Amendment 2005-08, Annex. No. 75, Zone Chanqe 2005-09 Initial Studv/Neqative Oeclaration No. 2006-02 Specific Comments (Initial Study and attachments): 1.0 - Introduction Pg. 5 - 3rdst par, last sentence: The residential designation is consistent with the County of Riverside General Plan designations that also.permit.1 and .2 dwelling units per acre. Comment: This statement is misleading and inaccurate. If you look at the property in question in its entiretv- the Riverside County Integrated Plan (adopted 10/03) zoning is not .1 and .2 DUs/ac. Why aren't all the RCIP land use designations and zoning correctly stated for consideration? Pg. 7 - 2nd par.: The City of Lake Elsinore as the Lead Agency, has determined that environmental clearance for the Proprosed project can be provided with an IS/NO. The Initial Study (Appendix A.1 )/ND prepared for the Negative Declaration will be circulated for a period of 30 days for Public and Agency review and distributed to interested parties as listed in appendix A.2. Comments received on the document will be considered by the Lead Agency before it acts on the proposed project. Comment: The proposed project lies entirely within the boundaries of the unincorporated ,...-...community of Wildomar (LAFCO UC Map,Wildomar, 1997). Wildomar is not on your list in ~ppendix A.2. Considering the fact that Wildomar has made application to LAFCO for incorporation, has completed the Initial Fiscal Analysis, and the Comprehensive Fiscal Analysis is proposed to be completed in May 2006, it would appear that the City of Lake Elsinore made a mistake in not including community of Wildomar on the notification list. We therefore would request that this agenda item be continued until such time as all documentation has been made available to the Community of Wildomar (as per multiple written requests from the Community of Wildomar and on file with the City). The City of Lake Elsinore also did NOT allow the full-30 days comment period to expire prior to preparing the Staff Report. Calls and emails to the City from members of the community of Wildomar asking if comments could be turned in on Feb. 21St, since the February 20th was a holiday and city offices were to be closed were told the cut-off day was Friday, February 17'h. How could City Staff or Planning Commission possibly consider the public comments prior to making a decision when comments were still coming in via fax and email on February 20, 2006 (even though your offices were closed). The package for your Planning Commission was prepared on Friday, February 17; Planning Commission members receive their package on February 20 and are asked to vote at the same time. This does not leave adequate time for due consideration by Planning Commission members on either the public comments received or the fact that the City pulled the tract map from the package. Do the Planning Commission members understand the implications of what they are being asked to vote on? r'- AGENDA ITEN! NO. 2\ PACE /:7 0 OF I If- ~ Ade Comments -- Pg. 3 Feb. 20, 2006 ~ Ref: General Plan Amendment 2005-08, Annex. No. 75. Zone Chanqe 2005-09 Initial Studv/Neoative { Declaration No. 2006-02 '-"" Pg. 8, 2nd par. (Sec. 3.0): Section 3.0 - Environmental Impact Analysis - outlines in the introduction, the past, present and reasonably foreseeable future projects and activities in the sourrounding areas that will serve as the basis for the cumulative impact analysis. Comment: This statement and Section 3.0 are misleading. They do not consider the future planning area as shown on the City of Lake Elsinore General Plan update maps alternatives 1, 2 and 3. All three alternatives show a future planning area that includes large parcels of land to the west, east and northeast of the proposed project. The proposed future planning area was created due to requests from property owners/developers. Their intent is to develop the area. It is clear from the current action that this is likely not far in the future, yet you are asking your Planning Commission to consider this project without any information or consideration of adjacents potential future developments. 2.0 -- Proiect Description Pg. 11 - 1 sf par.: Local drainage is generally directed to the northwest. Comment: This statement seems to be misleading and incomplete. There is no mention of the drainage (Cottonwood Creek) that flows to the southeast. p. 12 - Fig. 2-1: Regional and Vicinity Map -...." Comment: The regional and vicinity map this gigure depicts is undreadable due to its small size. This would have been better on an 11x17 foldout. Pg. 17 - Figure 2.5: - Proposed Pre-Zoning: Comment: The information pertaining to the Riverside County General Planning Zoning is incorrect. Rural Mountainous is 10 du/acre NOT 5 du/acre. It is also not designated R-1 on the County's General Plan. The County's General Plan map should have been included so that the designations would be apparent to anyone who chose to review them. Pg. 19 - 2.3.1 Existing Eenral Plan and Zonina, 2nd par: Currently, the City and LAFCO are amending the City's SOl to, among other modifications: expand the City's SOl to include the site. (The current County of Riverside Zoning for the property is Residential, Agriculture five-acre minimum lots (R-A-5), Rural Residential (RR), and Residential one-acre minimum lots (R-1). Comment: The first sentence is misleading and therefore inaccurate. LAFCO is in the process of reviewing/considering all Cities SOls and proposed SOls (thoughout Riverside County). However, Lake Elsinore is not currently on the LAFCO's agenda in either February or March for this consideration because LAFCO does not have all the information it needs frin the City of Lake Elsinore to agendize this item. The wording of the sentence would lead people to believe that LAFCO is actually in the process of amending the City's SOl to include this specific site. That is not the case. When the City of Lake Elsinore does appear before the LAFCO Commission, that body will take under consideration proposed amended spheres -- but there is no guarantee that approval will follow. AGENDA ITEM NO. 2. \ , PACE (:> I OF!. Y-- ~ - ) ....., ....~.... ... Ade Comments -- Pg. 4 Feb. 20, 2006 Ref: General Plan Amendment 2005-08. Annex. No. 75. Zone ChanQe 2005-09 Initial Studv/NeQative r" Declaration No. 2006-02 Pg. 20 - 2.3.4 Proposed Pre-Zoning, last par, next to last sentence: No physical development of the site is proposed at this time. Comment: It would seem that the number of environmental impact boxes checked off with Less Than Significant Impact (rather than No Impact) on Form J - Environmental Checklist would belie this statement. Example: pg. 10 of 14, Form J - XI. NOISE c) A substantial permanent increase in ambient noise levels in the project vicinity above levels existing without the project. The No Impact box is NOT checked; the Less Than Significant Impact Box is checked. How will ambient noise increase if the project being considered under this report is a vacant parcel. It would seem the planner got confused when filling out form J and in a number of cases checked boxes that would only apply to the parcel if the proposed project included the proposed tract map. 3.0 Environmental Impact Analysis pg. 21 - 3.1 Aesthetics (a-c), 3rd par: The proposed annexation, pre-zoning and Sphere of Influence and City General Plan Amendment would not change the visual character of the propety. However, subsequent development of the site would chanQe the character from its current undeveloped status to suburuban development similar to the developed area to the ""-'-l1orth of the site. Comment: Again, an inserted comment about future development when this proposal is only to consider an undeveloped, vacant piece of property. The insertions of these types of comments were found throughout the report. In light of that, how can the Planning Commission or subsequently, the City Council ignore these facts in their consideration of the overall proejct when making a recommendation. Pg. 26 -- 3.8 Hydrology and Water Quality b) and c-e): b) ... However regional absorption and infiltration rates should not be significantly affected, given the limited size of the project and because on-site soils are not particularly suited for groundwater recharge c-e) ... The project site is undeveloped. There are no drainage improvements on-site. As such, the majority of the runoff currently generated at the project site percolates into the ground or flows via sheet flow to the north of the site to Cottonwood Creek. Comment: The statement in b above seems to contradict the statement in c-e below: If the on-site soils are not particularly suited for groundwater recharge how is it that the majority of runoff currently generated at the project site percolates into the ground. r- AGENDA ITEM I-.v. 2.. t "PACE (;i OF ~ Ii il ,-' -- ...- -...--~ Ade Comments -- Pg. 5 Feb. 20, 2006 /~ Ref: General Plan Amendment 2005-08, Annex. No. 75, Zone Chanqe 2005-09 Initial Studv/Neqative Declaration No. 2006-02 -...",I Pq. 27 -- 3.8 Hydrology and Water Quality. fai) last two sentences in par: The project site does not lie within the 100-year flood plain and the area has not been subiect to flooding durinq heavy rains. The project site is not subject to unindation by seiche, tsunami, or mudflow and there are no nearby dams. Comment: Re: the area has not been subject to flooding during heavy rains. . .No time period is mentioned. The Pardee Homes project on property contiguous and to the north of this property has altered drainage patterns significantly. Properties in both Wildomar and Menifee are suffering from effects of the drainage from the Pardee project. I don't think anyone KNOWS what type of flooding we may see during heavy rains. to this property. Re: there are no nearby dams. . I believe this statement is inaccurate. Is the implication that Canyon lake doesn't have a dam? 3.9 land Use and Plannina p. 27. 2nd par. under a}. last sentence: The UC designation is not racognized by the Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000. Comment: This statement is misleading. Although the UC designation may not be recognized by CKH (2000), the CKH State Statutes do allow LAFCOs to set local policy. The LAFCO operating in Riverside County did set local policy and voted upon creating a special designation of Community of Interest and Unincorporated Community with the intent of ........, providing "a protective sphere of influence" for key unincorporated communities that they felt would eventually incorporate. There was recently reconsideration of this policy by the Riverside County LAFCO and the decision was not to create any more COls/UCs, however the designation of UC with the attendent map showing the communities boundaries is still in effect today for the community of Wildomar. p. 27. 3rd par. Under a}: Although the site is considered a part of the Wildomar Community, it is physically separated by the majority of the Wildomar Community byu the Sedco Hills to thee south of the site. Additionally because Cottonwood Canyon Road and Lost Road transect the site from the Lake Elsinore community of Canyon Hills to the north, the site is physically oriented to the City of Lake Elsinore rather than to Wildomar. Comment: These statements contain flawed logic. Re: There are many hills in and around Wildomar. These hills are an integral part of our community and do not represent - nor are they considered - a physical separation or barrier to the rest of the community. Sedco Hills IS IN Wildomar, by the way. This must have baen written by someone who is unfamiliar with the Community of Wildomar, its physicals attributes and environs. Re: Cottonwood Canyon Road and Lost Road transecting the site, therefore the site is oriented toward Lake Elsinore rather than Wildomar. I would refer to the statement I made above. Both of these roads originate in Wildomar: Cottonwood Canyon Road begins at J Bundy Canyon Road and meanders along a creekbed through Wildomar. Lost Road begins '-" in Wildomar and ends in Wildomar. Only with the creation of the Pardee development of Canyon Hills was this road extended into the City of Lake Elsinore. AOENDA ITEM,NO. 13 PAOE fa _ '~\ OF (y rt Ade Comments -- Pg. 6 Feb. 20, 2006 ~ ,Ref: General Plan Amendment 2005-08. Annex. No. 75. Zone Chanqe 2005-09 Initial Studv/Neqative Declaration No. 2006-02 3.11 Noise, pg. 29, 3rd par., last setence: However, because construction would not occur between the hours of 10:00 pm and 7:00 am on weekdays, including Saturday, or at any time on Sundary or a federal holiday, this impact is not considered to be significant. Comment: Why is construction noise being discussed as an impact if the project is vacant land only. This should not even be mentioned. This is what I was referring to on the first page of this letter, the Truemark Tentative tract map impacts have been interwoven, inappropriately, into this report thoughout. Also, regarding the underlined verbage above (between the hours of 10:00 pm and 7:00 am), letting construction equipment run until 10:00 pm at night hardly seems reasonable! Ade Comments - Pg. 6 Feb. 20, 2006 Ref: General Plan Amendment 2005-08. Annex. No. 75. Zone Chanqe 2005-09 Initial Studv/Neqative Declaration No. 2006-02 3.13 Public Services, pg. 30, a), 2nd par: During periods of strong, dry'Santa ana winds, wildland fires could threaten stuctures located on the subject property. A comprehensive fuel modification program would be implemented....to minimize wildfire impacts. Comment: At the density proposed in the Tentative Tract map and with the existing Pardee ~ home project and future proposed tract maps that we know are coming - these people will never have a chance. Due to the restrictive nature of the project circulation routes and heavy traffic on the egress roads from the project site -- there is no way for them to evacuate in a timely manner. Future residents are likely to burn in place. 3.13 Public Services, a) pg. 31, 1 st par., 4th sentence: Implementation of any developme!1t plan will require the Project Applicant to contribute to existing funding mechanisms .via property taxes to offset any additional fire and paramedic protection services needed to serve the subject property. At this time, the proiect is limited to neither a pre-zoninq ordinance that does not approve nor quarantee development on the property. Comment: Regarding the underlined portion above. Could you state that again in Swaheli, I couldn't understand it in English. The sentence as written does not make sense. (Hint: I think removing the word neither would help.) 3.13 Public Services, a) pg. 31, 2nd par., 1 st sentence: Police protection services are provided by the Lake Elsinore Police Department (LEPD) under contract by the Riverside County Sheriffs Department. Comment: The proposed project area are parcels located in the County of Riverside, not the City of Lake Elsinore thus Police protection is NOT provided by the Lake Elsinore Police Department - it is provided by Riverside County Sheriff Department. ,,-- AGENDA ITEM No.2. l PAGE .(.:.y OF -.lie Ade Comments -- Pg. 7 Feb. 20, 2006 Ref: General Plan Amendment 2005-08. Annex. No. 75. Zone Chanqe 2005-09 Initial Studv/Neqative Declaration No. 2006-02 ."~".. #, :.. ~: ....." 3.13 Public Services. a) p~. 31, 2nd par.,& 3rd par: Implementation of any development plan would require the Project Applicant to contribute to existing funding mechanisms via property taxes to offset any additional police protection services needed to serve the project area. Additionally, implementation of any development plan would be required to offset any impact to the LEUSO. Comment: Since as stated throughout this study, the project being considered is vacant land, why is development plan repeatedly mentioned (Le., the implementation of any development plan in connection to police [and fire and school and parks and library] services would be addressed through taxes or impact fees.) In any event, those types of fees cover only infrastructure not purchase of land, staffing or equipment -- and how those dollars would be generated is not addressed. 3.17 Mandatory Findin~s of Si~nificance. p. 33 a-d): The proposed pre-zoning will require the preparation of a Specific Plan....The project considered under this IS/NO is limited to the pre-zoning and Sphere of Influence and General Plan Amendment to modify the City's boundary to include the project site. Comment: These two statements seem to be conflicting. If the pre-zoning will require a specific plan, and the project being considered under this study includes pre-zoning, then the it would seem the specific plan would be part and parcel of the project that is being considered. ......, 4.0 Determination of Effect. p~. 35. last par. & date/si~nature line: The project file and all related documents are avilable for review at the City of Lake Elsinore. Comments: This statement is not accurate. On January 27, 2006, Wildomar Incorporation Now submitted a written request for all related documents and to date has yet to receive all related documents. In fact on February 13, in an email from the Lake Elsinore City Clerk, Frederick Ray stated "Due to the extensive research needed for your request at our off-site storage facility, our office is in need of additional time. The City Clerk's Office is requesting an additional 14 days to reply to you request." This brings up the question: Why would documents pertaining to a current project be stored in an off-site storage facility? And in light of the fact that the City cannot provide documentation pertaining to the current project, why wasn't the hearing rescheduled for a later date? The date and signature line were left blank. Why? ACENDA ITEM NO.~ PACE r; t7 OF Ilf 8 ~ ....." Ade Comments -- Pg. 8 Feb. 20, 2006 ,,--. Ref: General Plan Amendment 2005-08, Annex. No. 75, Zone Chanqe 2005-09 Initial Study/Neoative Declaration No. 2006-02 Appendix A-1 Initial Study (Checklist) Form J - PQ. 1 of 14: Comment: Item 6 - General Plan Designation and Item 7 Zoning: Whose General Plan Designation and whose zoning. This is not specified. ENVIRONMENTAL FACTORS POTENTIALLY AFFECTED Comment: The above item is incomplete. None of the boxes are checked. Form J - PQ.2 0114: DETERMINATION (To be completed by lead agency) Comment: The above item is incomplete. NONE of the boxes are checked. Form J - PQ. 9 & 10, IX a & b: Comment: The "Less than Significant Impact Box is checked and underneath it says "See Attachment for further explanation" What Attachment? It is not specified. ,,--Form J - PQ. 10. XL Noise c): Comment: The Less than Significant Impact box is checked under item c. If the land is vacant, why would there be any change? Form J - PQ. 11, XII Population and HousinQ a): Comment: The "Less than Significant Impact Box is checked and underneath it says "See Attachment for further explanation" What Attachment? It is not specified. If the land is vacant, why would there be any change? Form J - Pu. 11 & 12, XIII Public Services a): Comment: The "Less than Significant Impact Boxes under Fire protection and Police protection, Schools and Other public facilities are checked and underneath it says "See Attachment for further explanation" What Attachment? It is not specified. If the land is vacant, why would there be any change? Form J - PQ. 13, XVI Utilities and Service Systems: d): Comment: The "Less than Significant Impact Box is checked and underneath it says "See Attachment for further explanation" What Attachment? It is not specified. If the land is vacant, why would there be any change? r" AGENDA ITEM NO. '2 \ PAGE ~" OF I 'f rJ Ade Comments -- Pg. 9 Feb. 20, 2006 Ref: General Plan Amendment 2005-08. Annex. No. 75. Zone Chanoe 2005-09 Initial Studv/Neoative Declaration No. 2006-02 /'~ i..:~ ~ ~ Canyon Hills Estates Annexation Report and Plan for Providing Services Pg. 2 - 3fd par., item (1 ): The annexation area and project is consistent with the City's General Plan and the Canyon hills Specific Plan. Comment: How do we know it is consistent with the Canyon Hills Specific Plan since this plan was not attached to the study? Also, since the City's General Plan is currently in the process of being updated, it would seem the consistency statement cannot be substantiated until the update is finalized. Pg. 2 - Item (4): This expansion is consistent with existing and previously planned development in this area and larger lot rural pattern of the adjoining properties. Comment: This statement is false. It is not compatible with larger lot rural pattern of the adjoining properties. Long-Range Planning, J). 3: All paragraphs under this subheading. Comment: If the proposed project is vacant land, how can this Proposed Plan for Providing Services have any meaning or relevance? Land Use Plan - Par. 2, p.4: The Tract Map is in the conceptual planning stages and is submitted as part of the application for planning purposes only. '-' Comment: This statement is inaccurate. At a meeting with Kit Coury, Project Planner and Rolf Preisendanz at the City of lake Elsinore on February 2, 2006, I ask the following specific question of Kit Coury: What is the status of the tract map? Is it going through a process similar to what the County does called Comprehensive Plan Review wherein once application is made by the applicant to the County, the tract map and project information is sent to all departments for comment? Kit's answer was: Yes. I then asked if the Tract Map was about ready to go before the Planning Commission and his answer was: No, I've received comments back from most of the departments, but am still waiting for comment from Fire. This goes beyond conceeptual planning stages. This proposed tract map was on the above date IN the application process. IV. City Services, pg. 5 - Transportation/Circulation, 1st par. , last sentence and list of streets that follow: Key arterial and major streets in the City are listed and described below: Comment: Palomar Street is not in the City of Elsinore - it lies entirely within the community of Wildomar. Grand Avenue lies in both the City of Elsinore and the community of Wildomar. Mission Trail - From Corydon north one-half of the width of this street is in lake Elsinore and one-half of the width is in the community of Wildomar. '-' ACENDA ITEM NO. 2. ~ PACE hi . OF /~'8 ,Ade Comments -- Pg. 10 Feb. 20, 2006 .~ Ref: General Plan Amendment 2005-08, Annex. No. 75, Zone Chanqe 2005-09 Initial Study/Neqative Declaration No. 2006-02 IV. City Services, Transportation/Circulation, pg. 6, 2nd par: Cottonwood Canyon Road will be extended from its current terminus at the southern boundary of the adjacent Canyon Hills Specific Plan.... Comment: This statement is misleading. Cottonwood Canyon Road does not terminate at the southern boundary of the Canyon Hills Specific Plan, it continues southeast where it terminates at Bundy Canyon Road in the Community of Wildomar. Canyon Hills Road is considered a major highway. Comment: I do not believe Canyon Hills Road is a major highway. Define major highway and the source for the definition. IV. City Services, Law Enforcement, pg. 6 & 7: Comment: None of the information in this section explains in any detail how future services would be provided or how it will be funded. IV. City Services, Fire Protection, pg. 8 & 9: Comment: None of the information in this section explains in any detail how future services would be provided or how it will be funded. ~\V. City Services, Sewage Disposal, p. 11: Comment: As stated in this subheading: Sewage collection service is provided by EVMWD, however the Plan of Service for sewage disposal will be provided separately by WMWD. Who will residents payor will they get two bills: one for collection and one for disposal? IV. City Services, Schools, pg. 14, par. 4: Two other elementary school sites are planned in the vicinity of the Canyon Hills Estates site, one at the intersection of Cottonwood Canyon Road and Canyon Hills Road and one in Menifee Union School District alona the planned extension of Canyon Hills Road. These schools are adequately sized to serve the kindergarten through eighth grade children in Canyon Hills Estates. Elsinore High School located west of Highway 15 on 21800 Canyon Drive will serve the community's high school students. Comment: The proposed annexation will create a split in school districts? That is a negative for annexation. Canyon Hills Road will be extended into Menifee. There is no further explanation or detail for this. How will this happen unless the City proposes further annexations of parcels lying to the east of the proposed project which would then encroach into Menifee's community boundaries. Elsinore High school will not adequately serve the community's high school students. Student level in all classes at the current time is 32+ students. There are 7,000 homes in ,,--. ~pplication in the community of Wildomar alone - all of which are within the boundary of Elsinore High School. Do the math. ACENDAITEMNO. 2( PACE ?g _OF 1<[8 Ade Comments - Pg. 11 Feb. 20, 2006 f~ Ref: General Plan Amendment 2005-08, Annex. No. 75, Zone ChanQe 2005-09 Initial Studv/Neqative Declaration No. 2006-02 ......." VII. Conclusions: Revenue to the City would be generated from ....motor vehicle license fees... Comment: This statement is inaccurate. Revenue generated from motor vehicle license fees was discontinued for annexed areas in the 2004 State of California budget. Respectfully submitted, Sheryl Ade. Chair, Wildomar Land Development Review Committee cc Wildomar Incorporation Now Supervisor Buster Wildomar Chamber of Commerce file "-' 1. '-" AOENDA ITEM NO.-2 \ PAOE 0 q OF / c.fJ' r-. George Cambero 21584 Grand Avenue Wildomar, Ca 92595 February 20, 2006 City of Lake Elsinore 130 South Main Street Lake Elsinore, Ca 92530 Att: Mr. Kirt A. Coury, associate planner Mr. Rolfe Preisendanz Re: Canyon Hills Estates General Plan Amendment No 2005-08, Annexation No 75, Zone change No. 2006-09 and negative declaration No. 2006-12 Also known as tract Map 34249 Please accept this letter as my public comment on the above project. /'""' 1. I strongly opposed any attempt to annex any portion of the Community of Wildomar to the City of Lake Elsinore whether is Developer driven or the City of Lake Elsinore which will definitely leave a bad taste of mistrust between neighbors. 2. Wildomar official application to LAFCO is been submitted using the original 1997 boundaries and any request for change will affect the process. 3. To address the developers concerns about this property being away from the service area is groundless because of the rapid growth in Wildomar, and annexing any portion of our Community will be a sad day between Communities, Don't forget Developers come and go, We are here to stay. 4. Say no to Annexation Yours truly, ~ ~mbero Wildomar Incorporation Now - Director ,-- ~GENDA ITEM NO. 12\ PAGE 70 OF 1<1- 8 / / Harv Dykstra,.. 34860 Western Way PO Box 1236, Wildomar, CA 92595 ~ ....." 2-20-2006 Planning Commission clo Kirt A. Coury, Assoc. Planner City of Lake Elsinore 130 S. Main St. Lake Elsinore, CA 92530 Dear Planning Commissioners: I have revieweq the Planning Documents regarding the proposed project at Canyon Hills Estates, GPA Amendment #15, ZoneChange,#2005-Q9,and Negative Declaration #2006-02. Frankly, I am shocked that our neighbors in the city of Lake Elsinore would entice the TrumarkCoolpani~ t9 anr:tex the site k.>~eEls;ilOre.City officials have known for some time that the future city of Wildomar has'flled for .,..... ....... in~~PQratiqn.ls .th,ishow we begin our relationship as neighbor cities? Our boundaries have been set for many years. The boundaries are part of our incorporation application. Please explain why you have chosen to ignore that fact. ....., Regarding the proposed development: Wildomar would be proud to have a development like this within its boundaries. I would like to ask Trumark Companies why they never came to Riverside County and the future city of Wildomar with this proposal? Was this simply a mistake or were you misled by entities within the city of Lake Elsinore or elsewhere. t for one would support such a development within Wildomar. Most of us in Wildomar are happy to see high quality development come to Wildomar. Yes, we have high standards, but we are not anti-growth. t ask the lake Elsinore Planning Commission to stop this aggravating confrontation now: I also ask that Trumark Companies cohta'tt Wildbrtiatahd Riverside County regarding building in Wildomar. We welcome them to our fjeautiflil'Cifyof VVildomar. Sincerely, . Harv Dykstra l AGENDA ITEM NO. ij..J PACE 71 OF /f8 ....." - I I-~ Township Center<8m) ,""'-' A Not For Profit Community Advisory Organization .And Clearing House of Community Activist Infonnation as a Community of Communities (8m) Suite D 133, 30141 Antelope Road, Menifee. CA 92584 Kirt A. Coury City of Lake Elsinore Community Development Department 130 S. Main Street Lake Elsinore, CA (2530 February 20, 2006 Re: Planning Commission Agenda Item 5,2-21-06 Canyon Hills Estates Related Documentation as orovided to February 17. 2006: GPA 2005-08. Annexation # 75. (Pre ?) Zoning Change # 2005-09. Neaative Declaration (January 19. 2006 Noti$:e) Staff Report (pQstdated February 21. 2006) Separate reports from RGP Planning Services: Dated October 2005 for Riverside County LAFCO covering Annexation Provision of Services Plan Dated January. 2006 As Initial Study and Rationale for Negative Declaration. ,,--, Copies provided to Planning Commission 2-21-2006 Dear Mr. Coury: The Combined Communities Oversight Group (CCOG) writes to advise that the Canyon Hills Estates proPOSed project and related documentation may bejn violation of Cortese-Knox- Hertzberg (CKH) law, Riverside County LAFCO written policies in interpretation of assigned boundary designations to justify annexation, and California Environmental Quality Act (CEQA) Guidelines and requirements in preparing documents, including environmental assessments and alternatives. CCOG has a variable membership of interested community activists who review and comment on possible misapplication of a guideline, policy, legislation, rule, regulation, code, ordinance or law that will affect any element of a stabilized community (whether it be "in formation", "organized" or just "recognized'') without equitable application. A critical balance in social/cultural, legal/political, physical/environmental and economic/fiscal elements is required in both CKH and CEQA. ,..-... Recently the City circulated what can only be termed a partial set of drafts of environmental impact checklists, reports, and some rationale for a proposed Negative Declaration combined with a "pre-zoning" report for the proposed Canyon Hills Estate ACENDA ITEM NO. PACE 7 i , '21 OF I Cf ~ subdivision project. Dates on documents indicate these reports were done during the last 4 V2 months. Also there is a possibly related set of processing documents suggesting an annexation but "~ as part of an undefined whole. Is this being partially circulated to test the waters? Is it a '""" pre-launch to see if floating it will be overlooked and considered as approval so as to grease through the whole? I speak to incompleteness, inaccuracies and the strange, confused and convoluted intermingling of analyses, reports, statements and presentations as being an unquestioned "done deal." Dates for various hearings are so compressed that a question arises as to why there is such a hurry: is it benefit a few at the expense of many? There are undefined allusions to a larger annexation area under consideration for expanding lake Elsinore boundaries without notice to or consideration of two adjoining communities in the incorporation process. Intentional exclusion of their interests is noted. Processing and presumptions related to this matter are flawed, leading to unsound conclusions, most of which will lead to unclear legislation, which in turn will lead to its defeat. Data presented mentions various CEQA, legal and governmental (LAFCO) processing requirements, however the reports pay only tip service to various critical. subjects instead of doing an even balance of related community elements. Time does not permit me at this juncture to comment in any detail on overIOO pages of data and documents provided to date concerning environmental, governmental or administrative requirements. Mere mention by the City, project proponent or its paid consultant of a listed item does not make it undisputable fact: bare statements do not constitute defensible conclusions. Expressly, just mentioning a guideline or checking a form box on the 2005 CEQA Amendments without details of the selection rationale cannot constitute a reason for either a mitigation measure or support a conclusion of "No impact" or "Less Than Significant Impact." If a project has a poSSible significant impact, it is not a mitigation to say the City "considered it not important" without details of findings to support the conclusion. Or to say"... the client will not add to the impact... because they say they will not." As the current reports acknowledge, Canyon Mills Estates impacts were assumed to be not significant without investigation or any attempt to disprove assumptions expressed. Further, that these reports deemed the proposed project impacts unavoidable does not relieve applicant from the CEQA responsibility to proVide "feasible" and "proportional" impact mitigation. The Canyon Hills Estates project must mitigate the substantial area impacts inside as well as outside its restrictive boundaries. Adjoining communities will be impacted, and we notify you now to consider mitigation or avoidance on those communities as well. We urge the City of Lake Elsinore to immediately halt the Canyon Hills Estates project review together with any related annexation efforts until such time as lawful CEQA, CKH and LAFCO evaluations can be properly conducted, studied, noticed, and publicized. Failure to obey state laws will require enforcement actions. which itself is unclear as to intent of processes before the Commission today. A defensible conclusion can only be derived via the "negative approach": instead of making a concluding statement as true then justifying it by trying to prove it right, one must try to prove the /""". statement wrong. When, and only when, one cannot reasonably find a statement to be wrong can it be concluded as rationally correct and defensibly true. Clearly, neither the City nor project proponent intends to answer these comments as City has scheduled hearings as if analysis of comments with subsequent responses are final well before the 30-day response period set by CEQA. I submit these comments in the extended period because of federal holiday Monday, February 20, 2006. \ , William J ~eidlik Individually Community Activist, Combined Communities Oversight Group (CCOG) as coordinated by Township Center; Past Board Member and Chair, land Use and Community Development Committee Menifee Valley Community Economic and Development Council, LAFCO authorized Incorporation Proponents \ \ \ ,--.\ And representing Tri Valley Trails, Representing Menifee, Paloma and Quail Valleys in identifying, mapping, documenting and overseeing sustained multipurpose trails with connections through Southwest Riverside County and the communities of Canyon lake, lake Elsinore, Murrieta, Nuevo, Perris, Romoland, Wildomar and Winchester. Available on request: list of comments by page/paragraph/number of documents referenced. CC: By Email: Supervisor Jeff Stone, District 3 Supervisor Bob Buster, District 1 LAFCO Wildomar MAC Menifee MAC Menifee Valley CEDCO /""" AGENDA ITEM NO. 2 \ 3 PACE 7 <{ OF l'-f~ 2--/2,fo.L City of Lake Elsinore 130 S. Main Street Lake Elsinore, Ca 92530 ......." Attn: Rolfe Preisendanz, Director, Community Development Department Mr. Kirt A. Coury, Associate Planner Re: Canyon Hills Estates, General Plan Amendment No. 2005-08, Annexation No. 75, Zone Change No. 2005-09 and Negative Declaration No. 2006-02 also known as Tract Map 34249 This letter is in strong objection of the Sphere of Influence over a potion of Wildomar and the application of any Annexation of Wildomar. My family has lived in Wildomar for over 20 years. I am a Director of Wildomar Incorporation Now. The community has successfully fought Annexation with Lake Elsinore in the past and of course most recently with Murrieta. We will continue to defend hostile take overs know matter the expensive and effort involved to keep Wildomar's boarders in tack. i~~~ 9 -415-7871 3 5 Me Vicar St. WiJdomar, CA. 92595 ......." ......." AGENDA n-EM NO~--2L PAC~OF --! <r &1 -- .--l.fl..A:> ~\ MENIFEE VALLEY HISTORICAL ASSOCIATION 30141 Antelope Rd., Ste D~133 Menifee Valley, CA 92584 Telephone: (951) 244~1352 February 20, 2006 Via e-mail Mr.1Grt Coury, Associate Planner kcourv@lake-elsinore.org City of Lake Elsinore 130 S. Main Street Lake Elsinore, CA 92530 ,- Re: February 21,2006 Planning Commission Agenda Item #5, Canyon Hills Estates Annexation General Plan Amendment No. 2005-08 Annexation No. 75 Zone Change No. 2005-09 Negative Declaration No. 2006-02 Dear Mr. Coury: The Menifee Valley Historical Association appreciates the opportunity to comment and thanks you for granting our association hearing concerning the above matter. Ours is a public benefit non-profit corporation, fonned in 2004, whose purpose is to identify, preserve and promote the historic legacy of Menifee Valley, to promote respect for our past, and to educate the publi~ about our historical significance. Comments that follow were discussed at regular meeting February 18,2006, adopted by Resolution of the Board of Directors, and directed to be presented to you by me at hearing. Menifee Valley is now in final stages of incorporation, its boundaries established by LAFCO in connection with that incorporation. Memfee Valley has been advised by LAFCO that its incorporating status coupled with DC desigIUltion provide protection against annexation of Menifee Valley boundaries into adjoining communities. The proposal before us today is confusing because it is unclear exactly what portion of Menifee Valley it proposes to annex. Our organization opposes any annexation of Menifee Valley defined boundary area into adjoining communities. .",.-.. ACENDA ITEM NO. Qj PACE 7 ~ OF _I tf- fJ Menifee Valley got its name from mining development beginning in 1880 with discovery and claiming of the Menifee Quartz Lode by miner Luther Menifee Wilson. Farming activity beginning in the mid 1880's was concentrated on the valley plain, however hills surrounding the valley floor provided access to various minerals including gold, silic&, pink q\UlrtZ and feldspar. Menifee Wilson worked the Menifee Quartz Lode that extended eastward from the area near Menifee Valley present-day intersection of Geary and Holland Roads as well as a number of other mines, which led to formation of the Menifee Gold Mining District. More than half a dozen mines are listed within the district, and Menifee Wilson himself was involved in at least three: the Ken Wilson, Menifee Wilson's Concave, and Briggs, or Leon, which is identified on official maps as late as 1973. The range of hills with ~ignificant rock outcroppings at the western boundary of Menifee Valley, the eastern segment apparently presently proposed for annexation into Lake ElsinQre~ is location of sev~ral other mines including the Mary Ellen and the Florence. ......, It is difficult to determine pre<(ise boundaries of current proposed annexation in Menifee Valley because street names are not included on any maps we have been able to find. However, based on our familiarity with local geographic and topographic features, it appears the mapped area extends eastward into Menifee Valley to at least Byers. Consequently the Menifee Valley area proposed for annexation includes the entire range of rocky mine-pocked hills identified above and perhaps more, potentially as far eastward as Geary, which would include location of entrance to the most famous of Menifee Wilson's mines. We see nothing in the report we received on February 13, 2006 to indicate that annexation of this eastern segment into Menifee Valley boundary is required, or is even contemplated to be used, for development of the Canyon HiUs Estates project. In fact, for Lake Elsinore to provide access, utilities, and services to this proposed eastern segment would require the developer and/or City of take Elsinofi( to cross a deep .ravine and eliminate significant rock outcroppings at enormous expense. ......" The Menifee V alley Historical Association respectfully requests that the very area tha, provided source for its name be preserved to Menifee Valley rather than annexed into Lake Elsinore. Thank you for your serious consideration of our request. MENIFEE VALL Y mSTORICAL ASSOCIATION /~~ arbara A. Spencer , ......, !t AGENDA ITEM NO.~ PAGE 1. f- OF -LY- 8 FROM: RMT/GWT PHONE NO. 909 244 3951 Feb. 22 2006 10:44AM P1 FROM: George W. & Marie Taylor 34041 Harrow Hill Rd. Wildornar, Ca. 92595-9296 22 February 2006 ~ TO: First & 3rd District Supervisors ~ ~ The Honorable Bob Buster U The HonombleleffStone Ie F~B ~: : ~ Riverside County Administrative Center, 5tl\ Floor 4080 Lemon St. Riverside, Ca. 92502 tllY OF LAKE ELSINORE PlANNING DIVISION SUBJECT: Canyon Hills Estates Annexation Advisory. 1. On the evening of22 February 2006, at 6 PM, Marie Taylor and Myself attended a Lake Elsinore Planning Commission Meeting in that city. . . 2. I, as a Wilsomar resident, Cheryl Aide, Rick Estes of the Wildomar Chamber of Commerce, Bob Cashman, Bridgette M.oore, and Gina Castanon of the WIN Committee, among many other citizens of Wildomar all spoke in opposition of this # 5 Agenda item. .",......... 3. The issue is one where a land. owners daughter works for a developer and who is a trustee of considerable acreage in the mountainous area between Canyon Lake and the Cotton wood area near Bundy Canyon has submitted an application to annex into the City of Lake Elsinore. 4. The land owner in coordination with a Developer, Newmar Homes, is asking that the development area that is now raw land be annexed into the city of Lake Elsinore. The subject land is presently within the established boundaries of Wildomar as has been. identified to LAFCO in our application for City Hood Incorporation. 5. As a part of my letter which was faxed to the commission and where, at the appointed time, I read it into the record, I identified the Wildornar application to LAFCO saying that we had established our boundaries both as a community of interest and completed our required Economic impact study in our application. I pointed out that our official community representative agency, The Wildomar Municipal Advisory Council, was never notified of this action, and that ethical practice would have been to r" AGENDA ITEM NO.~ \ 1 t PACE it OF Ift6 FROM : RMT /GWT PHONE NO. 909 244 3951 Feb. 22 2006 10:44AM P2 notify all parties involved, that this lack of consideration for our City Hood ,....., Application to LAFCO has caused great concern for our efforts to become a City, And that Lake Elsinore should have withheld this developer / property owners application until LAFCO has either approved or denied our application for Incorporation. ,cf"",,' 6. I personally requested the commission, after reading my letter, to table, or continue this agenda item until LAFCO has made their decision. The commission did make a motion to continue the item until 24 September, However after Commission questioning of the developer about his business arrangement, and the developer saying that this time frame would be detrimental to his deal, the commission motion to continue the item died for lack of second. And the individual votes as below were taken.. 7. After many citizen objections and a lengthy discussion among the commission, the commission voted as follows: Negative Declaration No. 2006-02, split 2 to 2 Genera} Plan Amendment Mo. 2005-08 Died for lack of Second Annexation No. 75, Died for lack of Second Zone Change (Pre-Zone) No. 2005-09 Passed 3-1 .....", 8. It is my nnderstanding that this developer has paid the City of Lake Ellsinore $36,000.00 with the submission of tract m.ap 34249 and that now the city has pulled the tract map. I have no proof of either, but I am confused at the issue that was identified by staff at ~e meeting, saying that the issue was only to annex the land but the agenda item refers to Canyon Hills Estates. In my opinion, Estates is not raw land, but homes to be developed. I am told that the developer wants to build on ridge lines that would be in contradiction to the proposed county ordinance that Supervisor Buster is attempting to develop. There was the developer speaking on behalf of the land owner so we know that there are hidden reason's why this request for annexation to the City of Lake Elsinore is being requested rather than being left in county jurisdiction where there would be prohibitions to the project. ....., A4d~ AGENDA 'TEM NO. 2...\ U PAGE 71__0F _I1f-~ FROM : RMT /GWT PHONE NO. 909 244 3951 Feb. 22 2006 10:45AM P3 r. 9. For your information, I have attached a copy of my letter that I read into the record at the meeting, a copy of the agenda, and also a copy of Marie's letter that she faxed to the commission. 1 may be wrong, but the fact that there was a tie vote on one sub-part and another sub part passed ,gets the issue sent to the Lake Elsinore City Council for their further determination to annex or not. 10. I was told this morning that after we all left the meeting that the Commission brought the agenda item back to the dais and re-votedon the issue and that the vote this time was a 2-2 split. I attempted to contact Mr. Preisendance but he was unavailable to speak with . 11. Again, I suggest to you that it is reasonable and ethical for the city to table or continue the item until our application that was submitted prior to this application to annex is ruled upon by LAFCO. I don't know how ethical it is for the Conunission to have re-visited the agenda item without telling the citizenry who had left the meeting, of their intention to re-visit the item at a time when there would be no opposition, on our part., to their new action. /"'""' ~Res fully sub~tted, t....v7' R~'\M... ~ . George & Marie Taylor Concerned Citizens of Wildomar r' AGENDA ITEM NO. PAGE fu ~\ OF J <I 8 "J1g Bridgette Moore ~ rrCO u ~V V~. IV~" ~ From: Bridgette Moore [bridgette@mopartscorp.com] Sent: Wednesday, February 22,2006 8:38 AM To; kcoury@lake-elsinore.org Cc: Wendy Kolk; Supervisor Buster; Robert Magee Subject~ rntg last night FEB 2 3 2006 CITY OF lAKE ElSINORE PLANNING DIVISION Please call me ASAP. I need to know what happened after the hearing was CLOSED last night. The hearing was closed and the commission took a 5 mInute break. Now "m toJd the commission came back after the break. after we all 'eft, and voted again on the annexation. How can that be? Mayor Magee - how can that be legal? Bridgette Moore 951-440-6796 """"'" ^I^^I^^^~ AGENDA ITEM NO. PAGE_ YI 2.1__ OF ..L(I- 8 _ TOTAL P.01 """"'" ~, Arnold Schwarzenegger Governor ~ r S TAT E' OF C A L I FOR N I A Governor's Office of Planning and Research ~ h "ft, I * . ~ :Ii.!: i; '" .. ... ~..F'!I ~ ~,+,," EOFCAUf"" March 1, 2006 State Clearinghouse and Planning- Unit . f5) lE oc: lE ~ WI lE rrn lfU MAR - 6 2006 lW Walsh' ector Kirt Coury City of Lake Elsinore 130 S. Main Street Lake Elsinore, CA 92530 CITY OF LAKE ELSINORE PLANNING DIVISION Subject: Canyon Hills General Plan Amendment SCH#: 2006011079 Dear Kirt Coury: The enclosed comment (s) on your Negative Declaration was (were) received by the State Clearinghouse after the end of the state review period, which closed on February 21.,2006. We are forwarding these comments to you because they provide information or raise issues that should be addressed in your [mal environmental document. The California Environmental Quality Act does not require Lead Agencies to respond to late comments. However, we encourage you to incorporate these addi~onal comments into your final environmental document and to consider them prior to taking final action on the proposed project. Please contact the State Clearinghouse at (916) 445-0613 if you have any questions concerning the environmental review. process. If you have a question regarding the above-named project, please refer to the ten-digitSiate Clearinghouse number (2006011079) when contacting this office. Sincerely, C"~~ Terry Roberts . Senior PJanner, State Clearinghouse Enclosures ac: Resources Agency 1400 TENTH STREET P.O. BOX 3044 SACRAMENTO, CALIFORNIA 95812-3044 TEL (916) 445-0613 FAX (916) 323-3018 www.opr.ca.govAGENDA ITEM N9. PAGE i k-- 2( OF It.fB_ WARREN D. WILLIAMS General Manager-Chief Engineer 1995 MARKET STREET RlVERSIDE, CA 92501 951.955.1200 951. 788.9965 FAX WWW.flOOdcontroJ.co.riverside:~ RIVERSIDE COUNTY FLOOD CONTROL AND WATER CONSERVATION DISTRICT February 21, 2006 '-" 1fB) II; <<; IE I W IEIn1 IfIJI FEB 23 2006 ~ Mr. Kirt A. Coury, Associate Planner City of Lake Elsinore Planning Division 130 South Main Street Lake Elsinore, CA 92530 CITY OF lAKE ElSINORE PLANNING DIVISION Dear Mr. Coury: Re: Notice of Intent to Adopt a Negative Declaration for the Canyon Hills Estates This letter is written in response to the Notice of Intent to Adopt a Negative DeClaration for the Canyon Hills Estates; General Plan Amendment No. 2005-08, Annexation No. 75, Zone Change No. 2005-09 and Negative Declaration No. 2006-02. The project consists of pre-zoning the property to Specific Plan and amending the City's Sphere of Influence and General Plan to initiate the annexation of the site into the city of Lake Elsinore. The project is generally located in southwestern Riverside County and is bounded by Hemlock Street to the north, Pine A venue to the east, and Crooked Arrow Drive and Crab Hollow Circle to the south and west. The Riverside County Flood Control and Water Conservation District (District) has the following comment/concern that should be addressed: . ,....., Please be advised the proposed project is located within the District's Sedco Master Drainage Plan (MDP). When fully implemented, these MDP facilities will provide flood protection to relieve those areas within the plan of the most serious flooding problems and will provide adequate drainage outlets. The District's MDP facility maps can be viewed online at www.floodcontro1.co.riverside.ca.us/mdp.asp. To obtain further information on the MDP and the proposed District facilities, please contact Art Diaz of the District's Planning Section at 951.955.1345. Thank you for the opportunity to review the Notice of Intent to Adopt a Negative Declaration. Please forward any subsequent environmental documents regarding the project to my attention at this office. Any further questions concerning this letter may be referred to me at 951.955.1233 or Jason Swenson at 951.955.8082. J=~ TERESA TUNG Senior Civil Engineer c: TLMA Attn: David Mares Art Diaz l ~ JDS:mcv P8\l04654 ....., AGENDA ITEM NO. 21 PAGE f J OF I.</- ~ March 5, 2006 .--- City of lake Elsinore ATTN: Mayor and City Council 130 South Main Street lake Elsinore, California 92530 SUBJECT: Canyon Hills Estates Annexation Dear Mayor and City Council, I have owned my property for almost as long as lake Elsinore has been in existence and have considered my property a part of the city since the first day I owned the land. I have sold most of my property since then and now own 160 acres of the 246 acres that are included in the Canyon Hills Estates annexation proposal. As you can imagine, after owning the property for this long, I have become attached to it and I want what is best for my property. What is best for my property is for it to be in the City of lake Elsinore. I also would consider myself a "good neighbor." ~ lake Elsinore is an old city that has been rooted in the area since 1888. This is a long time for a City to be in existence, especially with all of these young cities sprouting up everywhere, such as Temecula and Murrieta. With lake Elsinore's long history comes the experience and knowledge of how to responsibly provide the. needed services for a large constituency through good times and bad times. lake Elsinore has certainly not skated through the last 108 years without any difficulty; however, this history and experience is what makes the City more suited to deal with future challenges without negatively impacting the services provided to its residents. This is what allows lake Elsinore to be a great city. Residents and businesses do not need to be concerned with a shortage of police or fire services or money to maintain the City's roads and parks because lake Elsinore has been firmly established for so long and has proven its ability to operate as a city. Residents and businesses are therefore free to create a thriving community that permits healthy commerce activity'. lake Elsinore has done a great job at operating a City and providing for its residents and businesses and is here to stay. The same cannot be said for Wildomar. I have not seen anything that says that Wildomar would be a viable city. Just two years ago, financial reports said that Wildomar is financially incapable of becoming a city. However, even if they could become a city, I want no part of it. There is nothing that shows a potential city of Wildomar could ever provide the level of services to my property that lake Elsinore could offer. In addition, I do not want to be a part of a community whose representatives are as rude and contradictory as the Wildomar group was at the City's Planning Commission meeting on February 21. They showed only disrespect toward my daughter, me and the City of lake Elsinore. In my opinion, Wildomar is trying to make a land grab at anything they can to stave r--- off any logical expansion of lake Elsinore. If you drive out to my property, you will see AGENDA ITEM NO. 2-( PAGE ~lf OF I tf 8 that it makes the most sense for my property to become a part of lake Elsinore. The quickest way to access my property and most efficient way to provide services is through the Canyon Hills community. In fact, water and sewer utilities were stubbed out at my northern property line which abuts Canyon Hills. Only steeper hills and virtually impassable roads are south of my property in Wildomar's supposed territory. Similar to my neighbors, I drive though Lake Elsinore to get to my property. When I lived in the house off of lost Road, I shopped in lake Elsinore, not in Wildomar. The same would be said for any future resident on my property. If they spend money in lake Elsinore, they should be able to benefit from the tax dollars Lake Elsinore receives by having access to the same services that other lake Elsinore residents are fortunate enough to enjoy. I appreciate you considering the logic behind my request to annex my property into lake Elsinore and make a decision not based on some fictional community boundaries, but instead on what makes the most sense for my property - to be a part of the beautiful City of lake Elsinore. Respectfully submitted, ~~~~ Gordon Behrens AGENDA ITEM NO. :2 I PAGE % S- OF 1r:-8 ;, .'-' '-' ~ ,-... March 8, 2006 John W. Flanigan 24140 Cruise Circle Dr. Canyon Lake, CA 92587 City of Lake Elsinore Mayor and City Council 130 South Main Street Lake Elsinore, California 92530 RE: Canyon Hills Estates Annexation Request Dear Honorable Mayor and City Council, You are probably aware of a proposed annexation of 246 acres of land into the City of Lake Elsinore. I am the property owner of76 acres ofthis site and have owned this propertyfor more than 25 years. During this time, I have always considered my property to be a part of Lake Elsinore. In fact, just recently, I was made aware that my property is not formally in Lake E~sinore. As you can imagine, this was quite a surprise to me. If you have ever visited my property, you will understand my surprise. .,.............., I find it hard to believe that anyone would ever consider my property is better suited to be in any other area besides Lake Elsinore. The property's physical orientation and location in relation to the existing roads are evidence enough that the property should be in Lake Elsinore, not in Wildomar. I have always driven though Lake Elsinore to get to my property and when I lived there, I shopped in Lake Elsinore, not in Wildomar. Should a residential development be approved on my property, they would also shop in Lake Elsinore and enjoy your great city. I am not going to pretend to hide that I do not also have a motive to make a profit off ofland that I have owned and dutifully maintained for decades; however, more important than this is the fact that my property should be in Lake Elsinore. Lake Elsinore is a fantastic city that has proven its fiscal responsibility and ability to provide the necessary services to maintain a high quality of life for the City's populace. The same cannot be said about the proposed city ofWildomar. It cannot be more evident that the Wildomar city hood effort will fail, and when it does, the aftermath will be a community without the benefits and services that the City of Lake Elsinore has and offers. ",.- Even if by some far-off chance that Wildomar becomes a city thro~gh political finagling, I absolutely do not want to be a part of that city or effort. Based off of the comments that I have AGENDA ITEM ~O.--2J PAGE fie OF I;' g ~ Canyon Hills Estates Annexation Page 2 of2 March 8, 2006 heard from the people supposedly representing Wildomar, they appear far more interested in fighting property rights and stopping change than creating a viable community. My property has been a part of Lake Elsinore for as long as I can remember and I do not want this to ever change. As a private property owner, I want what is best for my property, which does not include being a part of any failed attempt to create a city that would start in debt. I feel justified in saying this after hearing the obscenely rude comments from people who came to the February 21st Lake Elsinore Planning Commission meeting. They were truly derogatory toward the City of Lake Elsinore and its residents. The signs that the Wildomar gang brought were evidence enough of their hostile feelings for Lake Elsinore ~ each sign crossed out Lake Elsinore to illustrate their displeasure with a city that has become more successful than they could ever dream to be. I was sincerely offended by what they said of Lake Elsinore; every Lake Elsinore resident and City official should also be offended. """'" I respectfully request you to recognize what makes the most sense for my property; please approve the annexation so my property can be part of the community that my property has always been a part of - the City of Lake Elsinore and possibly the most attractive community in the Lake Elsinore Valley. ,.....", """'" AGENDA ITEM NO. 2..1 PAGE f.7 OF Ii/- g _ Jackson I DeMarco I Tidus Peckenpaugh ifU MAR --\l~II] 142006 W CITY OF LAKE ElSINORE PLANNING DIVISION ~\ A LAW CORPORATION March 10, 2006 Direct Dial: Email: Reply to: File No: 949.851.7492 ataber@jdtplaw.com Irvine Office 36969 VIA FACSIMILE AND U.S. MAIL Mr. George J. Spiliotis Executive Officer Riverside County Local Agency Formation Commission 3850 Vine Street, Suite 110 Riverside, California 92507-4277 Re: City of Lake Elsinore Annexation Proposal Dear Mr. Spiliotis: .-... On April 11, 2006, the City Council of the City of Lake Elsinore will be considering a request by two property owners to be included within the City's boundaries. These two properties, comprising about 246 acres, abut the City of Lake Elsinore and were at one time within the City's sphere of influence. During the Planning Commission's consideration of this boundary request, several issues were raised regarding a separate request under consideration by Riverside County Local Agency F ormation Commission ("LAFCO"), the incorporation of the Wildomar COmniumty. The proposed annexation of Canyon Hills Estates involves about one percent of area requested to be included within the Wildomar incorporation. In order to ensure that the City Council has the most up to date accurate information regarding the proposed Wildomar incorporation, we would appreciate it if you would confirm the following: 1. That the proposed annexation of Canyon Hills Estates will not negatively impact Wildomar's incorporation proposal pending before LAFCO; and, 2. That the earliest practicable date (best of circumstances) an election regarding the Wildomar incorporation could be held is March, 2007. ,....~ AGENDA ITEM NO. ,') \. PAGE f:? _OF .1'1- 1; Irvine Office 2030 Main Street, Suite 1200 Irvine, California 92614 t 949.752.8585 f 949.752.0597 Westlake Village Office 2815 Townsgate Road, Suite 200 Westlake Village, California 91361 t 805.230.0023 f 805.230.0087 www.jdtplaw.com Mr. George J. Spiliotis March 10, 2006 Page 2 We appreciate your assistance in this clarifying this matter. cc: Robert A. Brady, City Manager Barbara Leibold, City Attorney / Kirt Coury, Associate Planner V Alene M. Taber AGENDA ITEM NO. 2- \ . PACE go/OF / C; g .. .~ """"" """"" "'-'" Mar 13 06 05:56p LAFCO 9513698479 p.2 ,-<, March 13, 2006 Alene Taber Jackson, DeMarco, Tidus & peckenpaugh 2030 Main Street, Suite 1200 Irvine, CA 92614 Subj eat: Wildomar Incorporation Dear Ms. Taber: In a letter dated Ma:r;-ch 10, 2006 you requested confirmation of two statements relative to the proposed incorporation of Wildomar. Confirmation of a third statement was requested in a subsequent e-mail. The three statements are repeated below along with my responses. 1. That the proposed annexation of Canyon Hills Estates will not negatively impact Wildomar's incorporation proposal ,- pending before LAFCO. Although I cannot speak to the specific project, it is very unlikely that exclusion of an exclusively residential project of this size would have a negative fiscal impact of any significance, if at all, on the incorporation proposal. However, as I have previously stated, it is likely the more significant issue before the Commission will be that of community identity. 2. That the earliest practical date (best of circumstances) an election regarding the Wildomar incorporation could be held is March 2007. Based upon the current status of the proposal, the earliest practical election date would be March 6, 2007. 3. ...it is our understanding t.hat LAFCO's consideration of the Canyon Hills Estate annexation will not require the Wildomar incorporation proponents to submi t another application, modify its municipal serve and fiscal review, or pay additional fees. LAFCO approval of an annexation within the boundaries incorporation proposal would not require submi ttal of application or additional processing fees. As noted of the another above, r-. RIVERSIDE LOCAL AGENCY FORMATION COMMISSION. 3850 VINE STREET. SUllE 110. RIVERSIDE. CA 92507-4277 Phone (951) 369-0631 . .lfww.lako.m"g . Fax (9511 369-8479 03/13/2006 MON 16:16 [TX/RX NO 5016) Ii!l~02 AGENDA ITEM NO. Y7_ \ PACE .90 OF_ I ~8 Mar 13 06 05:56p LAFCO 9513698479 p.3 Page 2 ;/, removal of a residential project of this size would not be likely to have an impact significant enough to warrant modification to the Comprehensive Fiscal Analysis. However, if the Conunission modifies the boundaries of the incorporation, whether as a result of the proposed annexation or otherwise, the proponents would be responsible for making any required changes to the map and legal description. ......, Sincerely, ~9l\ fA n . ... .. .1', --'-- ~ .. . \J' ....\ G2~ Spiliot . E~~~~ Officer Bob Cashman, WIN Kathy Gifford, . County Executive Office ,.."" RIVERSIDE LOCAL AGENCY FORMATION COMMISSION. 3850 VINE STREET. SUITE 110. RIVERSIDE. CA 92507-4277\ Phone (951) 369-0631 · \wlw.lafco.Drg · Fax (951) 369-8479 ......, 03/13/2006 MON 16: )(bEnNttI1tNflN(!}.016) ~003 .2..1 PACE q I.. OF ~ st-~_ PAGE 4 - PLANNING CDMMISSIONMINUfES -FEBRUARY 21,2006 .r--- RESOLUTION NO. A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF LAKE ELSINORE, CALIFORNIA, RECOMMENDING TO THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE APPROVAL OF TENTATIVE PARCEL MAP NO. 33164 s. Canyon Hills Estates Annexation hairman, members of the Commission, as ent, Zone Change, Annexation and ening, again, is limited to just that. It is endment, and the zone change for the pre- ppl1c being reviewed by the City this evening. rrespondence that was provided in your packet, there e-zoning for the project, we required that the Ian hat we could take a look at conceptually how the be developed. That, again, is conceptual only and is not here has been discussion, has been correspondence a lot of it I concerns for that. I want to inform the Commission that when forward, when it is reviewed by the Commission it will have to go through the same pu hearing process, the same notification and environmental analysis, an environmental review will have to be conducted supporting technical studies and such will have to be provided for that document. So I wanted to emphasize that for the Commission, again, what you're looking at this evening is for an Annexation and a corporate boundary change. There is not a development proposal that is being presented to you this evening. With that, I handed to you this evening correspondence that came in regarding the project, it's a packet that I provided to you each ofthe Commissioners based on correspondence that was received by the City as of late Friday, yesterday and as of today. Rather than go through Chairman O'Neal I will remind the audience that this is a Nega . Plan Amendment, Annexation and a Zone change and that's ration and General Chairman O'Neal opened the public hearing. r-. Agenda Item No. .r- Page q 2- of I <f 8 PAGE 5 - PLANNING ffiMMISSIONMINUfES -FEBRUARY 21,2006 a detailed presentation based on the staff report, I think that there may be pertinent information that I'd like to go through with the Commission, specifically with relation to that handout that I provided to you. I numbered the pages down in bottom right hand comer so that we would have them for reference. Beginning on page 18, there is an 11 page letter that essentially talks about the project and provides comments to the initial study and the negative declaration. So it the Commission would bear with me, I would like to go through and pull out some of the, what I thought to be relevant information within that document so that we could clear some of the concerns or issues, and then I would like to ack and give some background again to the project. So, again, beginning on page 1 t paragraph is we were to start, where is says, "It would seem that the City of L more made a mistake or miscalculation by introducing the project map." I'm start' . I'll go back and give background information to that. Rolfe and I had a meet' atives from the Wildomar group. We did pass out that conceptual m . 11 re is a preference number to that, so that is where a lot of this basis lot of this informati enerated from. That, again, is not part of this applicatio refor oughout the ental document if there is reference why that should or s not referenced t in the environmental document, it is because there is not a d ent package or proposal before you for that application at this time. d, again, for the ce as well as the Commission, when that comes forward, that will hav through the s oticing process. On page 19, there's beginning the fourth paragrap. rgive me a ou,gh this, Ijust received this today so I'm trying to highli Comm. on so that we can go through the information or concerns. There again the fourth paragraph, that the community of r that a W as not informed in the initial study as exhibit refer dix A.2 on ge two 0 that distribution there was the Wildomar Chamb well as Gl m the WIN group was part of that distribution. So the WI did receive Ification ofthe project. The fifth paragraph whe . says th allow the full 30 day comment period, ironically . only . ed a 2 noticing requirement. We noticed it for 30 days, s re 1 a days based on the required noticing period. So it was requj, did y, so there was, again, adequate time for the noticing s tal the last paragraph about the Commission not having adequate ti . formation for the audience and I'm echoing this to the Commission a The Planning Commission for this particular project is a recommending b t Ity Council. Based on the Negative Declaration, the Annexation, the Ge . an Amendment and the Zone Change. All of those will take final action at the City Co iI, so this project being noticed, this project being present to the Planning Commission is all part of that larger scale process in which this project will have to go through. Continue will have go through to City Council and onward to LAFCO for their review as well, but I wanted to make that clear to the audience that the Planning Commission is the recommending body to the City Council for these applications. On page 20, about half way down the page, where it says page 17, figure 2.5 proposed pre-zoning, the numbers that are referenced for rural mountainous, there's also rural residential which is half acre, I'm sorry 5 acre, and those are consistent with the City's General Plan that we have that was Agenda Item No. q7 <.10' Page ;> of I T '. /" , .", ......" ......" } ......" "......\ .---- ~ PAGE 6 - PLANNING COMMISSION MINUfES -FEBRUARY 21, 2006 . dated back to 1990. On page 21, there is reference that in the form J, initial study checklist, that for the noise section that a check was placed for significant impact box was checked, that was an error. Part of this process is that we go through this when we review the environmental document. We look for those errors; we screen it as best we can, so we have noted that, we will make that correction again before the document goes on City Council for their final review. To note real quick for that, that is correct. This is only aimexation, general plan amendment, zone change. There is not a development project, so that box is correct. On page 24, the last paragraph where it starts as 4.0 dete . . on ofthe effect. This is the part that I was explaining that I would come back for c ground information. It references that a letter was submitted on Janu That letter was submitted to the City Clerk's office for a request for info project. On February 2nd, Rolfe and I met with two representatives group. There was no mention to us at that meeting that this request for' . ted to the City Clerk's office. Where there was confusion from s a general plan amendment, zone change, the City Clerk a umber, the City Clerk assumed that that was reviewed y '1 at some poi m 2005. In researching his records, he could not find that, so he s a letter back to the Wildomar group, in this instance, Mr. Rick Estes tating that he ne dditional time to research the records. When the City Clerk approac about the pro informed his that it had not gone to the City Council, in fact, it had the Plannin ission at this point and that it would have to g6 through that efully t would dear up some of the confusion with relation to that portion 0 . ng that there was additional time which was going to d the envir ntal re portion. The request for information again, I ackground, wever, t e noticing for the environmental document, which W ially relatin at environmental document was sent to the writer of this letter. e pages to environmental document, so we know that they did r . e it, so ., e for them to respond and comment to the environm tha as you know is under the CEQA law, gives you th whic nd. In several instances throughout the document, for e. the or fifth line down where it begins with form J, page 9 and 1 on in e second sentence, what attachment. That attachment is the envir alysis, which is provided along with the initial study and the checklist to gl onse to those comments and checked boxes for no impact. So often as you'll re t the letter or throughout the document that that does refer to what attachment it 1 ng to that document. So I want to make clear that for the Planning Commissio s well. Lastly, as part of background with reference to that February 2nd Planning Commission meeting that Rolfe and I had with two representatives from the Wildomar group, there's reference to my comments or statement within that meeting. There was discussion about the tract map, in fact Rolfe and I reviewed the project in terms ofthe annexation with the representatives. We, then shared a copy of the tract map, again for conceptual plan purposes to explain and show to them how the developer was looking to possibly develop or conceptually develop the property. We provided the representatives with a copy of that map. However, there's a little bit of confusion within that meeting in terms of Agenda Item No. Page q Y- of IL/<; PAGE 7 - PLANNING CDMMISSION :MINUfES -FEBRUARY 21,2006 what statements were relating to that project or statements were relating to the project that's '-' before you this evening. So I wanted to make clear that we did provide a copy of that conceptual plan to the group. We provided it for a courtesy level review for their information based on some of the questions that were raised during that meeting, but again, we did inform them that that would have to go through a separate review, that environmental analysis would have to performed on that portion at that future date when that project came forward. And last but not least, that I wanted to make reference to that document was on page 18 that I was just referring to. It's dated as of January 20th; th er starts out, however we received it this morning. I think that that was just an error 0 Ir p in terms of writing the letter because their header within the letter clearly: . . es February 20th. So again I wanted to give that as background information, pro e Planning Commission for your review. I know a lot of this was 1 t tion that came before you so I wanted to let you know that staffhas have taken in the information, we appreciate some of the comm aning if you will, we will make those corrections. With that in the audience this evening that would like to make co licant is in a dance this evening as well. He would be happy to answer questi the ommission may have. Staff, again, has reviewed the project i etail and reco approval otthe project as presented before you this evening and I 's any questio t the Commission may have, staff would be happy to answer as Chairman O'Neal Mr. Coury is it Rick Go '-' verybody else in the audience that please Mr. G briefer than that. My name is Rick Goacher with RGE. in Irvine. This evening we are bringing one of our clients b mp s, they are headquartered in Danville. Mr. Chairman and memb n, this is one oftheir first projects in Southern California that they intend to . But as was already mentioned by you and others, this is a very narrow he ing and it's not for the project itself. We've enjoyed working with staff for the las n bringing it this far along, but we're not going to be able to actually give you the . awings this evening. We do thank staff for the tremendous work that they've put in and the City Attorney's office for the past year and I think it's been very very productive to have their involvement and their guidance so far. This evening, speaking of behalf of this application will be two people representing both our office and the applicant's office. Those individuals are Jeremy Krout and Vicki Mota. Vicki is with Trumark Homes and I believe that she would like to start first. But prior to that I would request, Mr. Chairman that ifit's appropriate and if time permits we may wish to provide a comment at the end in rebuttal to statements that may be made. Agenda Item No. Page 9) of I Y- '6 ....., PAGE 8 - PLANNING ffiMMISSION:MINUfES -FEBRUARY 21, 2006 ~. Chairman O'Neal I'm not certain that we're going to have time for that. Mr. Goacher Very good sir. Chairman O'Neal There is a significant number of people that have requested to speak on this particular item, so if you wouldn't mind introducing Vicki. Mr. Goacher At this time we'd like to have Vicki Mota come fl communities. Vicki Mota Good evening Mr. Chair and members of I work for Trumark Companies. Our office is locat mentioned, we are here to discuss a change in the . Canyon Hills that is being referred to as Canyo Leading up to this hearing we have worked closely consistency with city laws and regulations and the Ge staff for their time, hard work and pro sionalism durin hearing, Initiation of annexation of the is one of the lead to the review and consideration oft . however t look forward to continuing to work with comm y through the review of .--. the site plan in the coming months. This is re ideology: Trumark has been in business for ove and I am 0 14th ye hroughout this time, Trumak has maintained a soli that focu on consensus planning and creating quality projects that fit wi ty. Trumar . s r presenting the two property owners of the 246 acres and they ening. Bo perty owners have owned their property and een a . or well over 20 years. As long time property 0 ber co y, they want to see sensible community design at efit the surrounding community that they have been a part ji n H ates, the property owner's interest formed the princip al de of Canyon Hills Estates community and is the reason for annexin e Elsinore. The City requires a tract map to be submitted with the anne s. The plans submitted represent a conceptual design of Canyon Hills Est ity. We are still in the design phases and want to receive community input. ect this to occur during the coming months, as well as the environmental revie here will many opportunities for community input during this time. Jeremy Krout from RGP Planning and Development Services, Trumark' s entitlement consultant will be discussing the boundary change being considered this evening. Thank you. Chairman O'Neal I'm sorry, I don't remember you name. ,........ Agenda Item No. Page q (p of!f g PAGE 9 - PLANNING mMMISSION MINUI'ES -FEBRUARY 21,2006 He pointed out on an exhibit board the location of the boundary lines. "-"" Jeremy Krout If you don't mind I'm just going to just grab an easel over a little bit closer for reviewing. Thank you Vicki. Good evening Mr. Chairman and Commissioners. At risk of sounding like a parrot, I just want to also thank City staff for their time and effort to fairly and thoroughly and professionally analyze the project before you, the Canyon Hills Estates annexation proposal. As Vicki mentioned, the 246-acre project site is located immediately south ofthe City of Lake Elsinore's and Canyon Hills boundary. 0 's line, in this graded area which is now built out, it's mostly, is approximately where 0 ary the cities the City's incorporated boundary as well as the Canyon Hills bou Surrounding the property you have a number of uses that are on the ground e planned probably being processed by the City very soon. You have about 0 . residential development that's about four to six, four to eight the site, as well as just up, up the street on Canyon Hills and Cotto u know 15 to 24 dwelling units per acre being planned on tha Hills and Cotton Canyon intersection. To the south, we number of rural residential land uses and, and in the area, this previously was in the City's here and it inc1u very low density residential and mount land uses. Tn assumed in the City's General Plan EIR eared bac former City Council of Lake Elsinore. Ac ss t . is mai from Lost Road, Navajo Springs Road, as well as Cottonwood Cany R Hills Road. I'm going to just switch the presentaf 'ble). This be easy , at least to show the, the property's boundarie e here, ag is the City boundary, we have Cottonwood Canyon coming 011# he site, loop . d of a curved road of Canyon Hills Road with Lost Road 0 dge ofth erty. Those are the m~in access points and the improv ads pr ss to the site. A significant topography will exist uth rope undary or at the Canyon Hills boundary and really i site the core ofthe Wildomar community. This is a, it's easy" hoto, S, it's a, it's kind of difficult at this distance but, realiy th aph ccurs here and separates the Wildomar communities core from t e majority of the flatter area, the more level areas are north of the site tha lIs. For these reasons, the topography for the circulation and those reasons, it' he reason why our proposal is to annex into the City of Lake Elsinore. This, this obably the basis also behind the City's planned, or plan area for the, the proposed Ge, I Plan update. Our site, as well as sites to the east of our site, are planned to be in the City's General Plan area. Consistent with this General Plan, the Proposed General Plan, in September 2005, Trumark Companies filed a LAFCO, filed with LAFCO, a Notice of Intent to circulate a petition to annex into the City of Lake Elsinore. This was filed, as I said, back in September, with LAFCO and is on record with them. "-"" Agenda Item No. Page q t of_lft6.o. " "-"" PAGE 10 - PLANNING m:MMISSION :MINUTES -FEBRUARY 21,2006 ~ O'Neal I need to keep you on the three-minute time. Jeremy Krout: Oh, okay. Understand. I'll very quickly move this. The proposed pre- zoning is Specific Plan and it requires that a Specific Plan review be conducted prior to approval of any development. Trumark Companies met with Wildomar community and discussed the project. We asked that we discuss the project, in particular the development once the community, once we get to that level. As you've heard se times and I'm sure you are very aware, tonight's agenda item is really limited to the dary change and was in the, the property boundary was in the City's sphere pr and still remains in the General Plan. With all due respect to the Wildomar comm downers have a desire to be in the City of Lake Elsinore and not in the c omar and approval of the boundary change would honor their wish and b for decades by people considered by themselves as part of the co y into the City and we appreciate any consideration by . ers are here as well. Gary Andre My name' 906 G 11 Street, Wildomar. I'm chairman of Butter fie d development and review ofWildomar. The first we ever when I came down here to speak with Dave Sap on the trails. poor history and installing the trails in the proper ar e had d Avenue to the south side of Grand because L t in g trac sidewalks and no room for a trail. So this to ith the County on several issues. Tomorrow we're the ' and we're going over plans. I was in the Planning . I 10 ed at the set of plans for the whole development, I saw gs. This is not just limited to this parcel. I've seen plans on this whole project, and how our WIN committee for is was through me. Not one thing ever came from Elsinore that O'Neal Thank you sir. I don't want t laughter. Have the common courtesy. particular order, Gary Andre. Please sta your comments to three minutes. "..--. gOl office s all the hous everything. I incorporation lea we received. Tha O'Neal Thank you Mr. Andre. Next person up is Gina Castinon. I'm sorry if! did not pronounce your name correctly. Gina Castinon Good evening. My name is Gina Castinon. I live at 32555 McVicker Street in Wildomar. I have two letters that I'd like to submit tonight with copies for all the Commissioners in regards to the Canyon Hills Estates. Not to disagree with Gary, but some of the WIN committee and the chamber were at the scoping meeting in December and we .",......... Agenda Item No. Page q f of Ii tJ PAGE 11- PLANNING COMMISSIONMINUIES -FEBRUARY 21,2006 brought our concerns to that meeting at that time. Rolfe at the time had stated, and other persons on the board, that it was just an oversight, that this annexation, this sphere of influence, was not going forward, it was an oversight and what we did was actually put Elsinore on notice that the WIN committee was aware of the plans and we would be actively involved in fighting it. Here are the letters. One of, one of my suggestions tonight would be your recommendation would be to deny this sphere of influence, at, and an annexation. What's going to happen if you approve it and it goes to City Council, you know, then of course we'll ask the City Council to deny it as well. And this is jus . ng to extend the process and what you can do is stop it here now because we will aggressively fighting it. It will go before LAFCO. I'm assuming LAFCO ny it since we have our application in for cityhood. We're going to election this y waste of the taxpayer's time and money and the applicant's. So pIe dible). .....". O'Neal If you do have documents in the future, p Thank you. Diane Falconer. ....." ext erson would be, next person, next person is ra Spencer, that be correct? Spencer issioners. I'm speaking to you tonight on behalf of the Menifee Valle ciation. Ours is a public non-profit corporation whose purpose is to ide e and promote the historical legacy of Menifee Valley. To promote respect for st and to educate the public about our historical significance. Comments that folIo were discussed at our regular meeting February 18 adopted by resolution of the board, and directed to be presented to you by me at this meeting tonight. Menifee Valley got it's name from mining development beginning in 1880. With discovery and claiming of the Menifee quartz load by miner Luther Menifee Wilson. Farming activity beginning in the mid-1800s was concentrated on the valley plane, however, the hills surrounding that valley floor provided access to minerals such as gold, silica, pink quartz and feldspar. Menifee Wilson worked the Menifee quartz load that extended eastward from the area near Menifee Valley present-day intersection of Gary and Holland Roads, as well as a Agenda Item No. Page r C; of /If-~ ....." r' ~. r PAGE 12 - PLANNING CDMMISSIONWNUfES -FEBRUARY 21,2006 number of other mines, which led to formation of the Menifee Gold Mining District. More than half a dozen mines are listed within the district and Menifee Wilson himself was involved in at least three, the Ken Wilson, Menifee Wilson's concave, and Briggs (inaudible) which was found on the USGS maps at, as late as 1973. The range of hills with significant rock crops, croppings on the western boundary of Menifee Valley, the very eastern segment apparently proposed for annexation in, in this matter, is location of several other mines including the Mary Allen and the Florence. It's really difficult to determine exactly what the boundaries of this proposed annexation are because there are no str ame's but from our familiarity with the local geography and topography, we believe xation in, intends to extend at least eastward to Buyers, perhaps further to Gary, t were the case, it would include not only the entire hill range of the mines, but the I e entrance to the most famous of Menifee Wilson's mines. We see nothing in 's received on February 13, to indicate that annexation ofthe easte Menifee Valley boundary is required, or is even contemplated to b Canyon Hills project. In fact, for Lake Elsinore to have . ulation to that area, would require it to cross a very deep ra d, to eliminate the significant rock outcroppings where ther e remain palings. The Menifee Valley Historical Associatio spectfully reque t the very area that provided source for its name be preserved to Me alley rather exed into Lake Elsinore. Thank you. O'Neal Thank you. Cheryl Aide Good e Land Developmen~ no confusion, believe Cheryl Aide. I'm Chair of the Wildomar Incorporation Committee. There was IS.. Aid Aide It's on my more than housekeeping and the question is not if staff reviewed this but dl anning Commission review all the comments? I hope that you will read my letter ani; ay careful attention especially to 3.9, Land Use. There's a few other topics in there that are essential that you understand what you're doing as well. Your current sphere is twice as large as your current city boundaries. We did have informal discussion with Trumark last Thursday at our land development review but it was more about the annexation than the project itself. Annex, the meaning of annex, take as one's own appropriate. Impact, a striking of one thing against another. Collision, a forceful or dramatic effect. Annex is followed in the dictionary by the word annihilate. Sphere of influence by its very definition belies your claim of no impact. The act of placing a sphere is an impact in Agenda Item No. Page I 0 0 of I y- ~ PAGE 13 - PLANNING CDMMISSIONMINUIES -FEBRUARY 21,2006 and of itself because all actions will now revolve around that designation. The destiny of the '-'" land, its environs, the people who live here, are forever altered by this act. No impact. Hardly. You could see all these people here tonight, the impact's already started. All that remains after the sphere is in place are the effects, annihilation, complete destruction. Of what, you might say. The community's boundaries. Wildomar. This is an act of destruction. No impact. You are pre-supposing your sphere somehow supersedes our community's established boundaries. In other words, the future planning area takes precedence over a community established in 1898. Law. Higher power than the conti ofthe local or regional politics to which you are accustomed. Intent of the law at looked at to make a determination and can be the deciding factor in a court of la en considering the annexation proposal, both the City and LAFCO must look . mmediate to the future impact of the total project on city services, source . storic growth trends, the city center, and neighboring communities does not occur in a vacuum. The land's interrelationship with the ommunity changes that could occur as a result of annexati nsidered. In 0 rds, your actions have consequences. Think carefully about being asked tread. Thank you. <-,"", .' , William Zeidlik Ladies and gentlemen, I Mr. Coury tonight. '-'" O'Neal William Zeidlik, I'm sorry if be Harv Diestrum Zeidlik I'm s -K. I live at 33250 Sunset Avenue adjoining you WI quarter of a mile. I gave Mr. Coury a copy of a thr e it. I'm recommending you read it thoroughly. I'm gO! until some time or other because we have 30 days left to, ry s , to receive written responses to all of our letters. CEQA cal ted we had 30 days to, to comply. He scheduled this meeting one day after have supposed to occurred. I don't know how he could have answered any of ents other than he must have specially looked at some of them briefly in the last fe , because there's a lot more that I know coming in, plus this. I've started a 50-page reps; , going through all hundred pages of the documentation I received. Now the problem is, there's a total confusion. I missed the opening statements this morning, or this afternoon, excuse me, and I was going to just read to you something that came to me from the Public Policy Institute's poll which recently said that eight out often Californians would like to see their local governments work together and come up with an agreeable regional plan. Also, the same report says that 73 percent of the local people, electorate, would like to have the decision made by them in a voting process and only 23 percent prefer to listen to their governing bodies. I think you have that here tonight. You have your Agenda Item No. l Page I 0 I of / </ R ...., r ~ r PAGE 14 - PLANNING CDMMISSION MINlITES -FEBRUARY 21, 2006 neighbors, look over the fence more often because we're affected by this. Cottonwood Canyon comes out on Sunset Road at Bundy Canyon. It's a dirt road for three miles. It is not going to be improved by any of this annexation nor anyone else. It's going to be improved and we have the project 40, 1,500 homes at one spot and 4,500 homes total in that area planning to use Cottonwood Canyon. Talk to TUMF or talk to Western Regional COG, or talk to your, our transportation, which you were referred to by Mr. Coury, twice before, and you contacted our parks once before and got erroneous information. I don't know where in the County this particular information went. We can't find the p you sent it to in the County. I think what happens, you need to contact us, you know re ere. LAFCO knew we were there, LAFCO has issued us specifically not yet to W: ar, specific boundaries, which we are right now underway of doing a legal descripf I . terrupt the boundaries of them, you're planning on, by according t , inte . g our boundaries. Barbara just spoke to the fact that your gobbling up e ine are east we think you are. That's what the confusion is. Everywher oughout this partic ort, or reports, or comments, or whatever, they've refe Cotto ood Estates. ood Canyon Estates, or Cottonwood Canyon developm lans. It doe t say this here annexation for whatever annexation purposes. It swer the questions in which you have gone to LAFCO with. LAF last October in us briefly... O'N eal Your time is up. Thank you. Zeidlik Gentlemen, I'm going to take a litt ' here before. got delayed by the gentleman O'Neal You're 0 Thank you. O'Neal Harv Diestrum. The next one up is Harv Diestrum. Harv Diestrum Commissioners. My name is Harv Diestrum. My address is 34860 Western Way in Wildomar. It's been impressed upon us repeatedly tonight that this is only an annexation, a GP A Amendment, a Zone Change, and a Negative Declaration. I, I believe that's what the, what the whole problem is, the annexation. Frankly, in the, I'm shocked that our neighbors in the City of Lake Elsinore would entice the Trumark Companies to annex the Agenda Item No. Page /0 L of I~R PAGE 15 - PLANNING CDMMISSIONMINlITES -FEBRUARY 21,2006 ''1 site to the City of Lake Elsinore. City officials have known for some time that the future city ~ of Wildomar has filed for incorporation. Is this how we begin our relationship as neighbor cities? Our boundaries have been set for many years. The boundaries are part of that incorporation application. Please explain why you have chosen to ignore that fact. Regarding the proposed development, Wildomar would be proud to have a development like this within its boundaries. I would like to ask Trumark Companies why they never came to Riverside County and the future city ofWildomar with this proposal. Was this simply a mistake, or were you misled by entities within the City of Lake Els' or elsewhere? I for one would support such a development within Wildomar. Most n ildomar are happy to see high-quality development come to Wildomar. Yes, we . gh standards, but we are not anti-growth. I ask the Lake Elsinore Planning Commis this aggravating confrontation right now. I ask that Trumark Companie and Riverside County regarding building in Wildomar. We would autiful city of Wildomar. Thank you. O'Neal Thank you sir. Rick Estes My, my name is Rick Est handed a packet, or actually some emal one of you, and because it's, I think it's 1 follow along. I sent an email to the City 0 let me start this by saying that one of the re Lake Elsinore City side, . re was ang ..." and I'm going to try t Y some 0 at anger lias come out because when you're not told the truth, d that's wh 's appened tonight. So, if you could, please follow along. I the City i . the 25th of November and I asked them specifically, a abou can get, down there towards the bottom. It says, does e plan t uest to change its sphere of influence regard' 'th th unity ofWildomar? Does the City staff or cons. , sed boundary changes between Wildomar and the City? in m that Ms. Castinon had just, she told you that they'd had a meet! maps were a mistake. The second letter that you've got here is from Mark, d Mark is the, the spokesman for the City of Lake Elsinore. Down at the bott e email there, he says the map that he was referring to, that I asked about, is not 1 mg any proposed new city boundaries, but establishes the area that General Plan update sultant is reviewing for purposes of a General Plan update. And, of course, you remember, I, I don't have that, but that's what he's telling me. that was on the 28th of November. Then on the 28th of November, I got an email from Jeannie Kelly, so she's saying basically the same thing that Mark's saying and I've highlighted it here for you. It says, nothing has been decided, just suggested. The Council would have to give direction on such an action, so she's telling me that there's nothing going on, don't worry about it. The City Council will have to deal with this kind of thing anyway. They'd make the decision. The last thing that you have is the receipt from Trumark, from Vicki Mata, dated Agenda Item No. l Page 1'0 -3 of /Y ~ ..." """"<, r-, r- PAGE 16 - PLANNING COMMISSION MINUfES -FEBRUARY 21, 2006 October 1 ih, and in that there you see that they have paid the City of Lake Elsinore $36,500 and one of them is for a tentative parcel tract map. $13,500 and there's a $4,500 figure offto the right for a total of thirty-six five. I would correct Mr. Coury, there isn't the word tentative, there isn't any kind of suggestion on the map that says it's a tentative tract map. It was started at least two months before this was ever made public. One last comment, when I went to the water company, the description that was given to the water company with their will-serve letter, which I got a copy of, says tract map and then it gives the number of the tract map. I requested a copy and Lisa Elexon sent me a copy of al our General Plan amendment committee hearings. All of them with the exception hich she didn't have, and I believe that was meeting No.7. There wasn't one . on of any of this project throughout all of those, those General Plan advisory comm' s. That's the minutes. There was mention of a lot of others. And the about other Specific Plans and other information. So, so, the po' City Council didn't know and they were putting out bad info for the city was putting out bad information while that was e City of Lake Elsinore and the tract map got underway. bmitted other written comments. Thank you very much. O'Neal Thank you sir. John Flannig John Flannigan Mr. Chairman, fellow m ore City Planning Commission. I'm John Flannigan. I live in Cruise Circle Drive. I've owned the property on d Canyon for mor an 25 years. My wife and I went there January 1st right after r new year's celebration and what a wonderful day it w. e've had tha erty a long time as I've pointed out, 25 years. And I'm a little I the conv Ion tonight because in that 25 years I never got a car hello 0 there, not when the creeks rose or when bad wea drou, it's n 0 see a lot of interest here tonight. The point I woul , a letter that goes back at May of 1998 when the, the Cou.,' ng in that area and they had us meet up at Calle Kirkpa I up i ' e Menifee area. And, what they did is they talked about zoni ught to have this map, but this is a map from the Riverside County Planm , Mr. Joff, Joffrey is it, yes. And, we're a little finger that sticks out, way 0 end, and there's, but you'll see this dark line~ I have 80 acres, and that 80 acres is enifee area. I purchased that land from Mr. Barrens, good friend of mine, and he has dditional80 acres next to me. It's also in the Menifee/Sun City sphere of influence or planning. That's what that meeting was about back there and I'm a, I'm a little surprised that, that point wasn't made. But, that's really all I have. I'd like to thank you for allowing me to speak and the only other comment I would make. I was there today working doing some pick and shovel work, and what a beautiful community it is in the, I knew the Christensen family, when you see the schools and you see what the Pardee people have built, the parks and the, the, it's a beautiful thing to see. I have 25 homes looking down across my fence and I went there in 1976, you couldn't see a light all the way to Railroad Agenda Item No. Page / V 'f of I <f E1 - PAGE 17 - PLANNING COMMISSIONMINUfES -FEBRUARY 21,2006 Canyon Road. There wasn't anything around. Just, just a lot of beautiful land. Those days are gone and I'm, I'm addressing that. I have 25, two-story bedroom homes looking over my fence at me right now and when I see change, and change is coming, I would say this, this is quality community, I'd like to see my land look like the land that's coming in around me. Thank you very much. .., ......, O'Neal Thank you sir. The next speaker is Gino Gramatico, would that be correct? O'Neal Thank Y person has to speak:. Gino Gramatico This is the first time I've ever been to a City O'Neal Would you please, your name and address. Arrow Drive. years and I a land, I ......, iate your zeal; however, the more you clap, the shorter time the Hyland. Chris Hyland. Chris Hyland My name is Chris Hyland. I live in the City of Lake Elsinore. I'm here as a private citizen and I have a great deal of sympathy for these people in Wildomar. They've tried for a long time to get their area annexed into a city and, the reason I'm speaking is this situation reminds me of a similar situation that happened years ago off of Grand Avenue. The City annexed two areas off of Grand Avenue which most of us that have lived here for a long, long timed called the claws. There all, it's surrounded by the County. I've been to meetings in that area and the people gripe about the services, the police department not Agenda Item No. _.__ Page 10) of /<f&' i ......, /'""'\ ,,-:., ,..- PAGE 18 - PLANNING COMMISSION WNUfES -FEBRUARY 21,2006 called, you know, getting to them right away, so, these people in this, in these two claws, who do they go to the County or the City? And this area what that they want to annex here in Cotton Hills is exactly another claw and it should be stopped now because it is a small formulation ofWildomar and why destroy these people's hopes and praise, praises and so forth you get this into a city. So, that's my concern. O'Neal Thank you Chris. Gary Lancaster. O'Neal Steve Lusty. Steve Lusty Hello. I'm Steve Lusty. I'm at 32939 Vergo Way in Wildomar. Mr. Chair and Commissioners I'm here to speak against the, any extension of the sphere of influence over Wildomar. I'm part of, I'm from the part ofWildomar that's been directly effected by Murrieta trying to annex us and I've seen a lot of the animosities that have gone across Wildomar itself, as well as with the neighboring communities, and it's, it's quite a different Agenda Item No. Page / oS- of /V9 PAGE 19 - PLANNING CDMM!SSIONMINUfES -FEBRUARY 21,2006 ;"' perspective. I'm a little bit different than most ofthe folks, or maybe everyone else that's ...., spoken here. I've only been in Wildomar for three years and I spent almost 30 years before that in PIano, Texas, just north of Dallas. That was a community that was both a bedroom community, just north of the high-tech areas in Dallas, and it grew to become a significant city, headquarters to many of the major corporations of this country. Smart growth basically. Very, well reasoned planning, watching how the community, and participating in the development spectrum, actually participating with trails development there too. I'm Secretary of the Butterfield Trails and I'm not really here to speak em, but it has been very illuminating to watch, or participate in the trails here and ev I'm on the far comer ofWildomar from this development, I'm familiar with by having been participating with trying to see good development for these .hg at the spirit of the community, the sense of trying to work carefully with ill the people that live there, the neighbors around, and to, then stand back t wanting to walk away, and join Lake Elsinore, the gratitude t sed while working for many months with Lake Elsinore, pIe being familiar with that. There's not a sense 0 nei thought would have happened in Texas and it would D would like to encourage you to not p e this sphere of Wildomar and give it a chance to beco city that it's O'Neal Thank you. Paul Mativiar. I'm s at 3220 ooked Arrow Drive and I night. I m a teacher. I tried to explain this because now that I've seen this . This is sanitized (inaudible) and drop right here. (not talking into mic). This es, not the view ofthe bunny rabbits, nor the y else. This is sanitized Ms. Mata, you see it. This is t s just change this. Now... "-" O'Neal But you nee Mativiar My fence line will leave, will actually border this. You see, this is sanitized, this is not reality. This is not what's going to change, it's not what I see. They'll fill their pockets full of money. . . O'Neal In front of the microphone please. Agenda Item No. /tLq Page lOb of T fL "-" PAGE 20 - PLANNING CDMMISSIONMINUTES -FEBRUARY 21,2006 ~\ Mativiar And go home. You'll drop your bombs and go home and we have to live with the mess. O'Neal Thank you. Mativiar I'm against this. Thank you. O'Neal Brenda Schroeder. name is George Taylor. I live at 34041 , and I'v ven you all a copy of my letter that I ur agenda item No.5 as you've stated it, I un and as late as last night, maybe you've pulled the case, then I'll refer to instead ofthe development, is raw land. So I'd like to read my letter into the say, IS my understanding that your department has received ove subject development or land, whichever" the case may be, ake Elsinore. Please be advised that the unincorporated area i mar has also filed an application with LAFCO for cityhood aware, in order to serve our residents, if LAFCO approves our application, we will:qJ, d to generate as much revenue as we possibly can receive to start up. Hopefully, we will also be able to regain some revenue from the state to help support the effort. We have established with LAFCO our proposed city boundaries. That includes the area in question. We have had the required economic studies conducted and published that support our application to LAFCO. In recent years we have successfully rolled back the sphere of, the City of Lake Elsinore's sphere of influence that would have taken potential commercial base from Wildomar. We have also just staved off an annexation attempt by the City of Murrieta. These efforts were successful because of the Wildomar citizenry united in Brenda Schroeder Hi, my name is Brenda Schroeder, and I Murrieta. I'm here on behalf of my father, Gordon Barren trustee of my father's trust and we are the owners of 16 Hills Estate project. In 1943, my father and grandp which included 640 acres, which at one time took . area. Through the years, we have sold off all b is now in escrow for the Canyon Hills project. ue and the current real estate market, we the family, feels who is now 82 years old and is in faili health and is re having our property be annexed into th fLake Elsino understand that we are not requesting fo area of WI that this project of246 acres be planned. /""' .r- Agenda Item No. Page I 0 f of l'f.g PAGE 21 - PLANNING CDMMISSION MINUI'ES -FEBRUARY 21,2006 a massive effort to fight it. Ethical practice would indicate that all parties involved a proposal such ofthis would have been notified at start up. I would prefer to think that this lack of notification to our Wildomar Municipal Advisory Council which is basically our community representatives, on your part was an inadvertent error. Whether.it was inadvertent or not is of great concern to us and may jeopardize our efforts that we have gone through to get this far. Although you say the City did not promote this action, it is my opinion that the City of Lake Elsinore should have advised the applicant of our present process and withheld applications for annexation and if it is still is 33249 do that or, of the land. It's just reasonable that you do that. So I'm requestin s e that you either continue this or table it until such time as LAFCO rules on 0 . cation for cityhood. Thank you very much. ;":~ '" O'Neal Thank you sir. Steve Uraine. Steve Uraine Good evening. I'm Steve Urain Wildomar. Wildomar, I like that, I like Wildomar. years ago. Lived out here about 20, built my house 1 whole Pardee development thing, rem ber that. You Pardee came along and was going to d assive annex and I was there, I was in the midst of all d as you the annexation or Lake Elsinore, excuse went ah with the development at which time approximately 10 years ago, th t Elsinore turned to me and my friends and said, yo at, we wan e good bors. We want to be a good '" neighbor. I thought, t, okay, ok be a good neighbor. Since that time, as my friend here says, ~ oved from ere of influence from the City of Lake Elsinore and fought of uence fro urrieta. Don't you guys want to be a good neighbor ean, co ildomar. We are Wildomar, we want to be Wildo co ith ou est for city wood, cityhood, and I strongly urge y at t. Now, have you guys read this thing? I mean seri Ma Ber the LAFCO requirements here, reasons for the proposa ices annexation include a higher level of public safety and infrastructu 1 keep on reading because it's, are there police stations going to be provide t says no. Are there fire stations going to be provided? Again in here it says no. again it says no. Interesting. Schools? No, it's not in here. The very premise 0 plication appears faulty. Also in here, it in the report it says that the development is c. lstent with Riverside County's land development. Riverside County's is one unit per five acres, or and/or one-acre lot minimums. But also in this report if you read it, and I hope you have, I'm sure you must have, it says 90 clustered units, possibly attached or detached. Now, that's a far cry from one unit per acre, or one unit for every five acres. Something is amiss here. Something's, something's not right, okay. I'm not against development. But let's do it right, okay. First of all we don't want to be a part of Lake Elsinore and, and we want the development to be proportionate with the area. We're not here to discuss a map. We're not here to discuss things that are already drawn and saying Agenda Item No. Page / OJ of /y:g> '" r" r'l r- PAGE 22 - PLANNING CDMMISSION MINUTES -FEBRUARY 21, 2006 this is the development. But you know what, a tentative map, map is required, was required and submitted and I saw (inaudible). I beg you sir, one more minute. O'Neal No. Uraine Roads, dust, dirt, road rage, are all problems. I urge you to vote no on this annexation. Thank you for the ten seconds. O'Neal Thank you. Bob Cashman. Cashman Commissioners, thank you for allowing me tim you probably. O'Neal Your name, your name sir. Cashman My name is Bob Cashman. I live a 23 on behalf of the Wildomar Cityhood Committee, Wil you that we will oppose at every turn d at every level Elsinore to annex territory that lies wi roposed city boundaries? These boundaries have Ion 'zed. In boundaries of the Wildomar Municipal A so . 1988. . rther, they are the official boundaries of the unincorporated communi 0 oved by LAFCO in April of '97. Further, they are th 'es recentl luated b municipal service review and annexation incorpora . by the Cit fMurrieta. Lake Elsinore was not a participant of this ey are the b d' es used by the Board of Supervisors in their resolution to im oration of domar. Finally, they are the boundaries currently part inco a in November 2006 at Riverside County LAFCO. re b In 19 newspapers called our fight about boundary change 90 1 called a hostile boundary dispute. Thousands of people in Wo' t bo ssues that the City of Lake Elsinore had a design over. am 1 5, and again in '97 when it was finally put to rest we thought, b your sphere of influence from these boundaries. Now someone com ides you or someone with the, to our minds, sideways legal maneuver that m to piecemeal annex a piece ofWildomar. Somebody offers you an opportunity lsrespect your soon to be neighboring city, don't take it seriously, what you should do i nd this back to the County and to the community ofWildomar and let us deal with it. This particular boundary has been in place since 1986 and has formally been recognized since '97. With regard to the project itself, the Canyon Hills Estates and the annexation, the abrupt attempt to annex this area is inappropriate. We have .submitted our application for incorporation. The current Wildomar boundary in this area is along a natural geographic feature and represents a logical boundary for the city limits ofWildomar. Please recommend to your City Council that this annexation be denied. Thank you. Agenda Item No. _ Page /0 7 of /rr:~ PAGE 23 - PLANNING mMMISSION:MINUfES -FEBRUARY 21, 2006 to'" O'Neal Bridget Moore. ....., Bridget Moore Good evening. My name is Bridget Moore. I live at 20151 Hill Spring Road in Wildomar. As our sign says, we want no boundary change, no sphere of influence, and we want no annexation. And, yes, I know sphere is spelled wrong. The printer can't spell. As Kirt said, the Wildomar groups were notified. That is not true. The MAC, a five- member appointed board by Supervisor Buster, was not notified. Jeremy pointed out the roads on the map, Lost Road, Conglan Road, all those are Wildom ds. Vickie Mata states the landowners have lived there for 20 years and they hav c unity members. So for 20 years they've been community members, they've li ildomar, so I have to ask, why now do they want to be Lake Elsinore? O'Neal Thank you. The final speaker is Linda, I'm name. ....., O'Neal up dais here. I wish you all good luck in your drive fi interested in continuing, tabling or any other inst~e for the following reasons. Regardless of the number a sm "i" makes, and regardless if WiN with a small "i" represents s, it does not trump Fifth Amendment rights for the property owners. This the 246.4 acres into Lake Elsinore is developer driven. In other words, it is tional right to make a request of Lake Elsinore and we are obligated to respon . he record, Lake Elsinore did not look at a map and say, hey gee here's some prime I all set for annexation. Our city is not Murrieta. We. are not cherry picking. Weare not piecemealing annexation. Further, it is interesting to note that WiN with a small "i" chose not to address any developer rights. As a matter of fact, WiN with a small "i" chose not to explain any reasons why this property should remain in so-called Wildomar. Statements like quote, Lake Elsinore should keep away from our boundaries, does not bother to express how this action hobbles its incorporation glance. Gordon Barrens has owned 160 acres for 66 years and expresses his wish that this property become a part ofthe wonderful city of Lake Elsinore, that's a quote. (loud laughter from the audience) Finally, when you Agenda Item No. Page / I 0 of I ~ ~ , ....; PAGE 24 - PLANNING CDMMISSION:MINUfES -FEBRUARY 21, 2006 ~\ chose, when you chose to insult the City staff, you chose to insult all the residents of Lake Elsinore. I don't, I for one don't hold with that kind of arrogance or dismissive behavior. Commissioner Lapere. Lapere Thank you Mr. Chairman. Let me finish my note here. O'Neal Certainly. Lapere Ladies and gentleman, I just as, want to thank you all fo n e time to come out and express your views tonight. This is the right of every' . dual in the United States and this is why we are United States citizens, and I respect I respect that, we have to respect individual's rights regardless of whether e ainst any project. That is our right as a citizen. I've made notes relativ ussed by the different people. I will try to help maybe enlighte . on as it relates to schools. The, for your information, e e Elsinore Unified School District or other school dIS autonomy t ace the schools where they choose. They go through the stat , t their direction from the state of California, not anyone city, they d 't have that right. go directly with the state and they do that. I for one, as a member 0 mmission, ha desire to go after any land in order to move toward an annexation, ave to tak onsideration the request of an individual who owns the land, of a p er wh as a right to develop the ~ land should they buy that land and I unders ey have their rights also and we have to respect that, as we are t our rights. Okay. We want to listen to you as to wh say. Any Amen ent right to request, we must consider. I mentioll ice, is handl . the, in the City of Lake Elsinore by the Riverside County Shen t so I wo spect that the, the County Sheriff Department w andle ou choose to hire them, or get your own police for bein sed ha eral obstacles as I understand them to overco ng that effort. You need more tax revenue. We would hop Sacr would return some of the funds that were withdra eve ity, as in relationship with the vehicle, vehicle tax. This I'm su mmensely as it relates to getting revenues for your incorporation. not done yet, and quite frankly, I don't know if it will ever be done. I mean, th promises that come from the state sometimes they just don't come through. An do wishful thinking all afternoon. I for one as an individual, do not like the attitude I take exception on page 19 is an example. Page 19 of this, of this letter that was written by, I believe Cindy, ifI, ifI'm correct. Cheryl Aide, I'm sorry. On page 19, the last statement does the Planning Commission members understand the implications of what they're being asked to vote on. I would submit to you that we do. We're not going after anything in Wildomar. We're responding to a request from an individual who has a right to request, we're responding to a potential developer who has the right to develop, and this is what it's all about, and we have to keep that scope narrow as it relates to the annexation, as it relates to zone change, and, and other General Plan Agenda Item No. r- Page / (( of I f g PAGE 25 - PLANNING mMMISSION MINlITES -FEBRUARY 21,2006 issioner Gonzales. Gonza yen ears and the only reason I moved out was because the an off-ramp where my house was. So I moved to nort 0 ally ame annexed. And, I know your feelings and I feel the same w . Lapere that it should be postponed until we hear from LAFCO. The ill go through and either use the City or the County, it still can be developed tha ld be very concerned with what happens to Lost Road. I've lived in this area for rs so and I used to go up, not Lost Road, Cottonwood Canyon Road, and I've drive 'ver's ed cars all up and down Lost Road many times and it's nice. And now it's just massive cars all the time and, but I would rather postpone this until LAFCO makes a decision. That's my feeling right now. O'Neal Vice Chair Larimer. Agenda Item No. Page / I L of! V g <'" ,~ .~ ....., ......., ) ....., PAGE 26 - PLANNING COMMISSION MINUTES -FEBRUARY 21, 2006 ,....- Larimer Thank you Chairman O'Neal. I have a question for the developer. Jeremy would you come back to the podium please? Someone had asked a question earlier why Trumark didn't, does not want to be a part ofWildomar. Would you explain that? Krout For a number of reasons, Ms. Larimer. The, as I mentioned earlier, the, and the property owners, clearly define as well, their desire has been to be within the City of Lake Elsinore. They've owned the site for, sites for a number of year, decades actually, and they feel that their desire is, is to be in the Lake Elsinore, they've identi ith the community and want to be in the City of Lake Elsinore. In addition, for top phic easons as I mentioned, as far as topography leading to the south of the si 'ng increasingly steep, it does create a physical barrier between Lake Elsinore and' t the, that really again made the site feel like it was connected more to the city opposed to Wildomar. In addition to that, as I, as I mentioned e s its respect and they are attempting to become a city, however, th most soluble city and the agency out there is the City of Lak s residents at a high quality level. I think many oftb: speak to tha d it's provide.d those services for years and feel that that wo e best service provided the property itself as opposed to a, a co . ty that has not d a city yet and is unknown whether that will occur. Prior physical, . al analysis s hat that is not possible, that the city would not be possible. For that residents a re to be in the city as again for fiscally soluble reasons. Cashman Well, w committee. up for me. Has your committee ever spoken directly to the , e city, or in Wildomar? ,-.... Larimer Thank you. podium please? You be happy to but the landowners have not approached our Larimer And your committee has not approached the landowners? Agenda Item No. /""' Page It] of If 8. PAGE 27 - PLANNING CD:MMISSION :MINlJI'ES -FEBRUARY 21,2006 t' Cashman We would have no reason to approach them and, unless they had filed something and the only thing they've filed was with you, but we would be happy to do that. We have no problem. ~ Larimer And ifLAFCO denies cityhood, what would be your next step? Cashman LAFCO will not deny cityhood. Well you asked for my opinion on it. I see, if LAFCO denies cityhood, Wildomar will suffer, so, we will do eve . g we can do to make LAFCO a city, to make Wildomar a city. Cashman Larimer So, you have no Plan B? Cashman There is no Plan B because we will be a c' Larimer What do you have to offer Trumark? do you agree that the I evelop their land. Do you, here they would like to be? ~ . a flux right now. They hadn't noticed d that, those boundaries run on the ng about. They could have noticed that bly wou ave approached us, or, they had some other 't know if I answered your question. Cashman That was pretty good. Larimer Okay, let's, what I'm concerned with are the landowner's right to develop their property or to be a part of Lake Elsinore or Wildomar. If someone owns 160 acres or 80 acres, that's a lot of acres for them to own. Shouldn't they have the same rights as everyone else to determine what they want to do with their property? Agenda Item No. Page I ( <.f. of J If 8 \ '-'" PAGE 28 - PLANNING COMMISSION MINUIES -FEBRUARY 21,2006 ~ Cashman Well, the, the zoning of this area is what's in place right now. They certainly would have every right at this time to go to the County of Riverside and, and seek to utilize that zoning that's in place. What we're talking about is the change of zoning, change of plan, it's, it's a big deal. It's a change from, from the actual conditions under which they own their property, which I'm okay with, but I don't know why it's being done this way. Have them come to us. Speaker Thank you, thank you Mr. C seats. Hey Rolfe, I'm waiting on you. d Mrs. Larimer you were, Commissioner O'Neal Commissioner Larimer, would you mind, and the rest of taking a five-minute break? Larimer Sure. Speaker May I, I would... O'Neal Thank you. Speaker We'll come back to that. O'Neal Five minutes. Thank you. r" O'Neal Pleas Thank yo Larime mer: Yeah, Ijust like looking at you, why don't you come Planning Commissioo/i' r LaPere: Don't worry, she's married. Mr. Cashman: How can I help you? Planning Commissioner Larimer: Did you ever answer my last question with respect to the property owner? r- Agenda Item No. Page /1 S- of (if g PAGE 29 - PLANNING CDMMISSIONMINlJfES -FEBRUARY 21,2006 :, Mr. Kashman: the property owner has a right to develop is property in accordance with the plans that are currently on the books with regard to his property. Those happen to be, I believe, rural mountainous and five acre minimum. Certainly at any time he can develop his property in accordance with the plans that are on file, how could there be a problem, except that, of course, he needs to go through all the, a check with the agency that's gonna do it to make sure that he has satisfied the roads and all that sort of stuff. And I guess we're not there. But those things would also come up in planning. So, that's where his right exists right now. ~ Planning Commissioner Larimer About how many resid Cashman: There's about 26,000. Planning Commissioner Larimer represent with your point of view? Planning Commissioner Larimer Planning Commissioner LaPere What is respond to your commit ~ Cashman: The ti , what is the timeline? Don't hedge on me. time hat LAFCO has given you by which to have ur city-hood? ere Late August ofthis year? Planning Commissioner LaPere And late August meaning what to your committee? Cashman: Meaning that it's going to be contingent on the exact time the auditor has prepared the finances for the next year. So that's generally some time in August. It could be later, but it's generally, so I in fact asked him that question today and he said mid to late August. Agenda Item No._ Page II & of I~g ~ ~ ,--.. ~ PAGE 30 - PLANNING CDMMISSION MINUTES -FEBRUARY 21, 2006 Planning Commissioner LaPere Mid to late August. That's the best time frame they will give you at this point? Cashman: Right, because, yeah that's what I got. Planning Commissioner LaPere If! were to call LAFCO tomorrow and say, when do you expect to act on the request of the City of Wildomar, would they give me that same answer? Cashman: They will be acting on the five things we have to do completed by August. Planning Commissioner LaPere Ok, that's all I have, Cashman: Ok, thank you. Anyone else? Chairman O'Neal Thank you Commissioner e and perhaps you might want to discuss a little bit abo talking about. Deputy City Attorney Miles Just briefl make sur me ofthe issues raised were answered and addressed so that all 0 ommi oner's concerns may be met. I wanted to run through a short list of wn from the Public Hearing. Following a brief review issues, I'd like to a ess the specific question of whether this Commi . one or put these proceedings until LAFCO takes action. There's a fi visions of e Knox Act that do affect that. I wanted to bring those to your a en we can ss any viable parameters on postponement . . fact tn the Commission would like to visit. First, I've got a iss firs e came up quite frequently with the notice prOVlSI rn a hether or not Wildomar was notified of this Negative Dec~ ' in the form of an annexation proposal. And just to make It reco there were two entities that were notified in Wildomar. That inclu amber of Commerce and that's at 33751 Mission Trail and P.O. Box 885, also went to WIN, attention Jan Castenon, 33751 Mission Trail, P.O. Box ar, Ca. 92515. Just wanted to make sure that this is the submittal date for cIon of the Initial Study and Negative Declaration, appendix A-2. This would have bee lstributed at the beginning of the comment period, and I believe it was January 20th. On a second note, area that came up for discussion was the area of trails. Again staff has made it very clear and I believe even Wildomar understands that this in an Annexation application. Infrastructure and project level entitlements are not being considered at the present time and I believe that trail issues can rightfully be brought up in subsequent public hearings; including the general plan update process that's ongoing currently which will address this project. Second is roads, similar answer to that, all infrastructure based on a decision are project level. The general plan update is going to Agenda Item No. _ Page I {':f of 1t.f8 PAGE 31 - PLANNING CDMMISSION MINUTES -FEBRUARY 21, 2006 ""~ ,,- -~;. assume a certain dwelling unit count and use that for their traffic infrastructure analysis so that general plan update process is something that you can get involved in; and as a point of clarification the general plan advisory committee meetings have been discussing this project and there was a comment to the effect that they did not, in fact they've made specific comments to this project and Rolfe can go into a little greater detail on that. Here was an issue raised about the historical significance for some historical mines. CEQA guidelines, section 15064.5 is a very detailed guideline that talks about historical resources again at the point where there's a project level entitlement, historical significan resources will be determined. And in fact, it goes beyond that, it goes to prehisto d al resources and the City is coordinating under SB 18 with the Pechanga Band . eno Mission Indians to address prehistorical and cultural significance as well. Th tation process that's required at the general plan amendment level and so tha ' . s project; will be ongoing as part of the general plan update. There's s 0 day comment period that ended yesterday. I want to point out t to the close of the public hearing, which is occurring right no hearing is to take your concerns and address those, doing and the submitted comments as well have been by some of the oral comments and are ing addressed n the staff report and they will continue t dressed when body, which is the City Council. There ent about wanted to point out that under the MSHC erty 1s cell criteria. Which means that there were conservation for any of y and ope take permit issued for RCP and t league, sierra club se as stakeh over what open space sed at the conceptual sit it wa although e a map, ap, p~ coos what bel' cept level at the present time. Schools and roads, again SB50, Co ddressed it. It is a state mandated activity. The state and the division of sta rmine where schools go. Senate Bill 50 dictates what developers pay nit to fund schools and unfortunately the state"has preempted that field oflaw an ty does not have a whole lot of say about that. There was discussion about goo eighbors and I just wanted to point out that there is quite a bit of history to this area. As we all know, it was within the City of Lake Elsinore prior to 1997. The City did defend its rights for some of its spheres of influence areas, unincorporated communities and community of interest designations. And during the Murrieta annexation, it was the City of Lake Elsinore, initially, that really was the, took the forefront and threatened litigation against the City of Murrieta, which resulted in a tolling agreement under California Environmental Quality Act. So it was the City of Lake Elsinore that was fairly active in ensuring that a portion of Wildomar was not annexed into the City of Murrieta. In Agenda Item No. _ Page / / 9 of If! ~ "'" "'" i " "'" .,,- ,-.... "........ PAGE 32 - PLANNING CO:MMISSIONMINUfES -FEBRUARY 21,2006 addressing those issues that came up, what we now have is the question of whether or not the City can or should postpone their approval ofthis activity until such time as LAFCO takes action on an annexation proposal or basically the incorporation effort ofWildomar. There are two provisions of the Cortese-Knox Act that do govern this. The first is Government Code Section 56375, subpart A, subpart 3. And that part states that the Commission, LAFCO, shall require as a condition to annexation, that a City pre-zone the territory to be annexed. If you read that requirement, that mandate that pre+-zoning be in place in condition of annexation, if you read Government Code Section 56655, which s that if two or more proposals, pending before the Commission conflict in any way co. stent with each other as determined by the Commission, the Commission ma ine the relative priority for conducting any further proceedings based on any ofth That determination shall be included in the terms and conditions opposed b h In the absence of that determination, priority is given to that proceedin on the proposal first filed with the executive officer. So, the Corte re-zoning shall be a condition to an annexation proceedin Is. I think that's what we have here, but the statute oes d there's a cedure in place by which that will occur. I think the Commissio probably be skirting its obligation ifit were to just say let's se hat happens in xt six months to a year to possibly two years. This has been a pr at has been g n for about nine years, by my count. Again with that obligation fo ., I would at it would not be the appropriate course for this Commission to e discr . nary action of LAFO before taking it's obligation for pre-zoning. . t as a policy matter, I don't perceive any legal issue Id mandate ntinuan rom a policy level, this Commission could, i ems that h n't been addressed, and if the Commission doesn't believe sta es ntly, certainly a reasonable continuance could be considered. r. an can I ask a question? In layman terms, you ose, to act on a pre-zoning, but defer action on .,. Deputy Ci I'm saying that the Commission should, is obligated to undertake the f, again, the question was with respect to whether you can wait until LAFCO ru rporation proposal. And what I pointed out is there are two provisions. One tha about how to deal with conflicting proposals and a second provision that talks t pre-zoning having to be a precursor to an annexation proposal before LAFCO. So this Commission should pre-zone, and that pre-zoning and annexation proposal can be reviewed by LAFCO contiguously with the Wildomar incorporation proposal. Now continuous would be for the whole thing. This Planning Commission can always continue an item if there are concerns that are not addressed, you can have a continuance to a date certain, however much time you might need. A continuance level is always an option for the Commission. Legally, I'm not perceiving any reason why that would be a mandate at the present time, and from my read of the Cortese-Knox Act, this Agenda Item No. Page / ( q of Ilfl? PAGE 33 - PLANNING CXJMMISSIONMINUfES -FEBRUARY 21,2006 Commission should act on the pre-zoning indirect, without regard to what the Wildomar incorporation application is. You don't have control over that, the time frame for that could go on, who knows how long. .'~ \. ..-t ....." Planning Commissioner Gonzales Could I ask a question on that? Planning Commissioner LaPere I'm still a little confused here. My thinking is this, and you can tell me if I'm thinking correctly or not. We act on the pre- . g, but continue to date certain the action as it relates to the annexation until they h . wer from LAFCO. ere. The pre-zoning is , s being asked to do . something that t off its re- Deputy City Attorney Miles I think that, again and Kirt c really part and parcel to annexation action that the PI . right now. If there is a desire to continue this item in' can be accomplished. But in terms of whether or decision until some future decision by LAFCO zoning requirement in the Cortese-Knox Act and L with competing proposals, so the procedure of the Co with this annexation proposal and the ildomar incorpo there's no indication that the incorpora osal needs t before this Planning Commission can un re-zoning 'ther. So in another words, ere. Because they can look at ....", may have. ewpoint on priority, and I did read that Ions that LAFCO will be able to.1ook at a de nation. We don't know when that will occur, oncems that haven't been addressed or you're not at a sion at the present time that can be entertained. But sap ation, There's really no, with the negative declaration, amendment, there's really no reason to move forward on one onzales The developer can't do anything until LAFCO makes a final decision, so itj sits there, We're going to say here's two proposals; you decide which one is acceptable, Basically, that's what its saying. Deputy City Attorney Miles That could be one of the effects. I'm sure that the applicant may differ on whether they can't do anything about LAFCO, but in terms of what this Planning Commission is being asked to do, you have the ability to do that now and it's not dependent upon whether or not LAFCO says yea or near to the e Wildomar incorporation effort. You're being asked to process pre-zoning and an annexation and that should be done Agenda Item No. Page I 2- 0 of -.! y fl \ l ......" PAGE 34 - PLANNING CDMMISSION MINUTES -FEBRUARY 21,2006 ~ independent on an incorporation proposal and the Cortese-Knox Act statute'envisions that LAFCO can deal with both of those proposals. Planning Commissioner Larimer I have a question Steve. Ifwe say that we would like this project to be annexed, does that mean that Wildomar cannot become a city? I know the answer to that, but I ant you to say it. Deputy City Attorney Miles Again, there's a lot of presumptions doubt that the annexation of this, in fact, during the LAFCO pro designation and they are wanting a certain boundary, a typica process is a boundary adjustment that LAFCO will engage . portions, it may not be this portion, and it may be portio southern portion ofWildomar that may come out of should be in another City. I think that's the fight can't gauge whether or not the removal of this know what their incorporation is entirely base on, 246 acres would be a blow to an incorporation effort; incorporation effort. e a comment if I could. t to tinue if they need to, if e-zoning, pre-application to cil, L and actually come back; so in. So I just want to make sure that the . g that they can continue if the need to, other thing I wanted to comment on projects there for a few months now and Up a , e did not route projects to the GPAC because . ects; but at the last General Plan Advisory Committee, d generally there was a comment that they did not wer ncerned about was the slope analysis. They were into the City that we would look at preserving as much of the presented to them at that meeting was a conceptual site plan or just wanted to clarify that we did bring this to the General Plan /"" Chairman O'Neal T ank you Rolfe, is there any further discussion on this? Planning Commissioner Larimer If we continue this, that's holding up the process, so we should make a decision. Chairman O'Neal You should continue this if you do not have all the answers about whether or not you should annex this. If you have all the information that you need, then you Agenda Item No, ,r-- Page I L { of If f PAGE 35 - PLANNING CDMMISSION MINUI'ES -FEBRUARY 21,2006 should approve. It's that simple. If you feel like you need more information, you can't make this decision, then you need to make a request for a continuance for a date certain, for whatever information that you need to get that you can't make this decision right now. Rolfe. /~ ...., Planning Commissioner LaPere Mr. Chair, if! might. Could the developer. Jeremy would come forward please? , I have a question. If for any reason this is continued, what would that do to your plans, in a nutshell? Jeremy Krout: The main thing, just to go back to what we annexation. It really is the fIrst step in a multi month proc many bodies and that process would be delayed. Planning Commissioner LaPere What does this see is the business deal on the other side of . front of you. There is a two year it sounds as e might be standing idle for a period of tinuance that comes about the way I'm ...., er if it would be appropriate to make a motion at of motion would you like to make? aPere I would like to make a motion to continue to date certain. Chairman O'Neal And how long would that be? Planning Commissioner LaPere I would say until the fIrst meeting in September. Chairman O'Neal There is a motion on the floor to continue this to until September. Agenda Item No. Page / 2-2- of~'fe ...., PAGE 36 - PLANNING CDMMISSION MINUTES -FEBRUARY 21,2006 ,........ Planning Commissioner LaPere First meeting date in September Office Specialist III Alexen That would be September 5th. Planning Commissioner LaPere I would like to make a motion to continue this item until September 5th and if there is still no action from the governing body, with which they're applying, we revisit this and take appropriate action at that time. Chairman O'Neal Any further discus 'on? what the developer said ear period? Chairman O'Neal Do I have a second to this motion? Planning Commissioner Larimer Discussion. Chairman O'Neal Do I have a second to this mot" Planning Commissioner Gonzales Second. Planning Commissioner Larimer Yes. about the two year period. At September ~ of time thing has happened, it will ther you re going to say yes or no at that o ahead and consummate the deal, do e, do they continue in the government s at all. It would end in November and I mov through your system in City Council prior to n't think it's humanly possible, let alone procedurally Chairman y that I'm totally against this continuance. I do not understand th ing this until September for the main reason is that if you need more informatio , e more than happy to have the staff to get you more information to continue it to a period, but it's simply not in the best interest of what we're doing here to contin is until next September. Quite frankly, I'm ready to act on this particular business this evening. I believe that as the attorney has suggested to us, that there are two tracts and neither one affects the other one in terms of what decision ultimately will be made by LAFCO. I think we are behooving to the property owners to address their concerns. I believe that that is more significant and trumps the committees that the area of Wildomar have put together for their business. And quite frankly, that you become a City, I'm not against that and you should understand that, so that would be why I would not be ,r-- Agenda Item No. Page I 2-1 of Irr~ PAGE 37 - PLANNING CDMMISSIONMINUTES -FEBRUARY 21,2006 particularly interested in continuing this until next September. I think that's counter productive, particularly to the people who have money on the line. '"""'- ,~~ . . '" -(, "'"-" Planning Commissioner LaPere Think: you for your comments Mr. Chairman. The attorney has indicated that our action could have a direct impact or hit on the consideration of them as a City in not a positive way and that's what led me to believe that if we could continue this till that certain date in September, regardless of whether the governing body has responded to them yea or nea, that we take the appropriate action at time. My leaning at that point in time would be that we go through with it and compl It, it at least gives them the opportunity to hear from that governing body whom ve applied for a response. And I apologize to the developer or to a deal tha the process and to the owner, but at some point in time that action is going to t why I suggested September 5th, which is our first meeting in Septemb t to the '-' lscussion on this particular matter? ales I'd like to withdraw my motion. ow there is a motion with no second. Is there any second? Planning Commissi r Gonzales I withdrew my second. Chairman O'Neal So there's a first with no second. Call for a second. Hearing none, Rolfe. Planning Commissioner Larimer I'm sorry, were we going to have a discussion? Agenda Item No. Page I 2- "I of ! f ~ ) '-' PAGE 38 - PLANNING CDMMISSIONMINUfES -FEBRUARY 21, 2006 r-- Deputy City Attorney Miles The motion failed for lack of a second, so we're back to square one. The proposal before you or to entertain any additional motions. Planning Commissioner Larimer Well, 1'd like to see a compromise between both the extremes we have here in the audience and here on the Commission. I do think that September is a long time and that's going affect the developer, but I do think that the Wildomar residents probably need some more time, so I would like e something in maybe 45 days. Chairman O'Neal Rolfe, one more time. D BY LARIMER WITH ALES AND LAPERE VOTES TO APPROVE . 20 - , A RESOLUTION OF THE ISSION OF THE CITY OF LAKE lA, RECOMMENDING TO THE IL THE CITY OF LAKE ELSINORE F NEGATIVE DECLARATION NO. 2006- Chairman O'Neal So you'd like a 45 day continuance, is motion? Planning Commissioner Larimer Yes, what, l' until June. The audience said, "August." Planning Commissioner Larimer Ok, r-- O'NEAL, THE MOTION FAILED DUE TO LAC F A SECOND TO APPROVE RESOLUTION NO. 2006-15, A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF LAKE ELSINORE, CALIFORNIA, RECOMMENDING TO THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE APPROVAL OF GENERAL PLAN AMENDMENT NO. 2005-08 AMENDING THE CITY'S BOUNDARY TO INCORPORATE PARCELS SPECIFICALLY ~ Agenda Item No. Page I 2) of / 'f 8 PAGE 39 - PLANNING CDMMISSION :MINUTES -FEBRUARY 21,2006 DESCRIBED AS (APN(S) 365-220-026, 365-230-001, 005, 006,007,009,010,011,012, AND 013 .." .~'~ ...., MOVED BY O'NEAL, SECONDED BY LARIMER AND PASSED BY A VOTE OF 3-1, WITH GONZALES CASTING THE DISSENTING VOTE, TO APPROVE RESOLUTION NO. 2006-16, A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY LAKE ELSINORE, CALIFORNIA, RECOMMEND T rJ'HE CITY COUNCIL OF THE CITY OF LA SINORE APPROVAL OF ZONE CHANGE ) NO. 2005-09 TO CHANGE THE ZONING OF THE PARCELS SPECIFICAL S APN(S) 365-220-026, 365-230-00 011, 012, AND 013 TO SP SP COMPLETION OF THE ANNE ......, an O'Neal closed the Public Hearing at 8:43:54 PM Deputy City Attor es Mr. Chairman, if I may, I have a point of order in the last sequence of approva~< r lack of approvals. Chairman O'Neal Ok. Deputy City Attorney Miles I know that the public hearing was closed, but I believe the public hearing is closed before it comes to the dais, anyhow, so we have an inconsistency in the Resolutions and the first Resolution 2006-14 by nature of a 2-2 vote on the Negative Declaration results in neither approval or denial of the recommended action which is Agenda Item No. Page I 2- " of_1!t2 } ......, PAGE 40 - PLANNING OOMMISSION MINlTfES -FEBRUARY 21,2006 /"'" recommended approval by the City Council. The nature of that would be that the Negative Declaration would merely proceed to City Council for approval. However, with the absence of any approval ofthe findings and the merits ofthe Negative Declaration, it is impossible for us to proceed on with a general plan amendment. The General Plan Amendment Resolution 2006-15 failed for a lack of a second and because of that you can't actually take action on the Zone Change, which passed by 3-1, the effect of that, is that if you can't do the General Plan Amendment, you can't effectuate a zone change. So because of the consistency of that, by a legal fiat, we can basically deem everything after the 2- te failed. I would ask, just for clarification that the Commission reconsider their a va Resolution 2006- 16 in light of the fact that that resolution can't pass by nature -2 vote on the environmental document. Planning Commissioner LaPere So, what do you r is that Chairman O'Neal So being on the 3 part ~ Deputy City Attorney anz Do you want me to go ahead and read DeP,lJ <" lopment Preisendanz Weare looking at the Resolution for Director of Community Development Preisendanz Ok. This is Planning Commissioner Larimer I'm sorry, I was waiting for discussion again. I wasn't clear. I voted for this in the beginning. Deputy City Attorney Miles Is this a question for me Commissioner? r' Agenda Item No. Page 12.:} of Ire PAGE 41- PLANNING CDMMISSIONMINUfES -FEBRUARY 21 2006 , Planning Commissioner Larimer Yes. e~-' .{,-". ".~ ""-" Deputy City Attorney Miles What are you not clear about specifically? Planning Commissioner Larimer We're reading the same one where there's a three one vote. Chairman O'Neal Whi desired result. e matter, given that p n amendment has it started with a 2-2 vote ative action on the approvals. So the . on and I would entire y Planning Commissioner Larimer And .~ that, but if that's not my desired vote... PIa? APERE, SECONDED BY LARIMER, AND , NO ACTION WAS TAKEN ON N NO. 2006-16, A RESOLUTION OF THE COMMISSION OF THE CITY OF LAKE ELSI RE, CALIFORNIA RECOMMENDING TO THE CITY' COUNCIL OF THE CITY OF LAKE ELSINORE, APPROVAL OF ZONE CHANGE (PREZONE) NO. 2005- 09 TO CHANGE THE ZONING DESIGNATION OF THE PARCELS SPECIFICALLY DESCRIBED AS APN 365- 220-026, 365-230-001 THROUGH -013 TO SP SPECIFIC PLAN SUBJECT TO THE COMPLETION OF ANNEXATION NO. 75 Agenda Item No. Page I 2-f of /1-9 ....., PAGE 42 - PLANNING CD:MMISSION :MINUTES -FEBRUARY 21,2006 /'"' Planning Commissioner Larimer That's the same result, isn't it? Planning Commissioner LaPere No. Previously it was 3-1. Director of Community Development Preisendanz If I could provide some clarification that now we are bringing this project, this project will move forward to the City Council. 6. 05-12 "Broadstone Rivers Ed e A artments". Deputy City Attorney Miles The 2-2 vote on an action results i of the recommended action, which in this case was recomme no action it will proceed to the decision making body, the . Director of Community Development Preisendan clarify that. BUSINESS ITEMS ,"'--'" 7. 8. BY LAPERE, SECONDED BY ER AND PASSED BY A VOTE OF 4-0 ADOPT RESOLUTION NO. 2006-18, A SOLUTION OF THE PLANNING 1ft1 COMMISSION OF THE CITY OF LAKE ELSINORE, CALIFORNIA, ADOPTING FINDINGS OF CONSISTENCY WITH SECTION 6.1.2 OF THE MULTIPLE SPECIES HABITAT CONSERVATION PLAN (MSHCP) FOR THE PROJECT KNOWN AS "BROADSTONE RIVERS EDGE ~ Agenda Item No. Page I L 1 of-.l~8 at}' of Lake Elsinore Planning Divis ion 130 S. Mm Street Uke Eknore, CA ?2530 (?O?) 674-3124 ('IO?) m-141? fax PLANNING COMMISSION STAFF REPORT ~, ......, DATE: February 21,2006 TO: Chairman and Members of the Planning Commission FROM: Rolfe Preisendanz, Director of Community Development PREPARED BY: Kin A. Coury, Project Planner PROJECT TITLE: APPLICANT: Canyon Hills Estates Annexation Vicki Mata, Tromark Companies, 26447 Rancho Parkway South, Lake Forest, CA 92630. Representative: Jeremy Krout, RGP Planning & Development Services, 8921 Research Drive, Irvine, CA 92618. ......, OWNER: Vicki Mata, Tromark Companies, 26447 Rancho Parkway South, Lake Forest, CA 92630. PROJECT REQUEST · Negative Declaration No. 2006-02 . General Plan Amendment No. 2005-08 · Annexation No.75 · Zone Change (Pre-Zone) No. 2005-09 PROJECT LOCATION The 246.4-acre project site is located immediately adjacent to the existing southern boundary of the Canyon Hills Specific Plan and is bounded by Hemlock Street to the north, Pine Avenue to the east, Crooked Arrow Drive and Crab Hollow Circle to the south and west. Cottonwood Creek flows through the northeast comer of the site adjacent to Cottonwood Canyon Road. Access to the site is from Lost Road, Navajo Springs Road and Cottonwood Canyon Road ACENDA ITEM NO.--2L- " PACE /3? OF / \.fa ....." PLANNING COMMISSION STAFF REPORT February 21, 2006 Page 2 of 8 ".- PROJECT TITLE: CANYON HILLS ESTATES ANNEXATION ENVIRONMENTAL SETTING North Single-Family Residential & Vacant Single- and Multifamily Residential Residential Agriculture, Rural Residential, and Residential one- acre Coun of Riverside Single Family 2 (2 to 4 duJ ac) and 3 (4 to 8 du/ac) and Multi-Family 1 (8 to 15 du/ac) and 2 (15 to 24 du/ ac) (Canyon Hills Specific Plan Residential Agriculture, Rural Residential, and Residential one- acre (County of Riverside) Residential one-acre (County of Riverside) Residential Agriculture, Rural Residential, and Residential one- acre (County of Riverside) South Single-Family Residential East Single-Family Residential Single-Family Residential West ~ PROJECT DESCRIPTION Very Low Density Resi ential and Rural Mountainous (Coun of Riverside Specific Plan Rural Mountainous and Rural Residential (County of Riverside) Low Density Residential (County of Riverside) Rural Mountainous and Rural Residential (County of Riverside) The project is limited to the action of pre-zoning 246.4 acres adjacent to the City's boundary ( and originally within the City's Sphere of Influence) Specific Plan and amending the City's Sphere of Influence and General Plan Land Use Map by initiating the annexation of the site into the City of Lake Elsinore. Pre-zoning the property Specific Plan will establish a regulatory procedure that must be followed for future development to occur. All future development proposals with the Specific Plan pre-zoning is a general plan, policy, or program level approval, it does not permit development of the property. GENERAL PLAN AMENDMENT NO. 2005-08 AND ANNEXATION NO. 75 The "Canyon Hills Estates" site is located outside the City of Lake Elsinore's Sphere of Influenc~ (SOl); therefore, a General Plan Amendment is necessary to modify the City's boundary to incorporate the site into the City. '!be site was previously located in the City's SOl and was designated in the General Plan for residential land uses at .1 and .2 dwelling units per acre (1990 Lake Elsinore General Plan Study Area, Exhibit 1-2). However, in 1997, the Local Agency Formation Commission (LAFCO) amended the City's SOl to remove the area known as the "Wildomar Unincorporated Community" area (Wildomar Community of Interest) from the City's SOL The larger Wildomar Community area included the 246.4 acre Canyon Hills Estates site. LAFCO's subsequent attempt to remove several additional areas from the City's Sphere of Influence was successfully challenged by the City of Lake Elsinore and found to be in violation of CEAQ by r-' the Riverside Superior Court. AGENDA ITEM NO. ?- \ PACE ,/ J I OF /48 PLANNING COMMISSION STAFF REPORT February 21, 2006 Page 3 ofs PROJECT TITLE: CANYON HILLS ESTATES ANNEXATION ~-, ......,; The City's current General Plan was not amended subsequent to removal of the Wildomar area from the General Plan; therefore, the Canyon Hills Estates site has retained its residential General Plan designation pursuant to Government Code Section 65300 (authorizing general plan designations for land outside City boundaries). In addition, the City's General Plan EIR was never amended as a result of the detachment of the project site from the City's boundary. Currently, the project site is a part of the "Northern Area" of the Wildomar Community, which is identified as the Unincorporated Community CUC) of Riverside County generally located between the cities of Lake Elsinore and Murrieta and bisected by Interstate 15. It is important to note that the UC designation is not recognized by the Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000. Further, the site is considered a part of the Wildomar Community, it is physically separated by the majority of the Wildomar Community by the Sedco Hills to the south of the site. Additionally, because Cottonwood Canyon Road and Lost Road transect the site from the Lake Elsinore community of Canyon Hills to the north, the site is physically oriented to the City of Lake Elsinore rather than to Wddomar. The site is also vacant except for one residence that is rented and not occupied by the property owner. Ultimately, the property ownet:S located within the proposed annexation area have indicated their desire want to annex into the City of Lake Elsinore instead of Wddomar. Staff met with representatives of the Wildomar Community on February 2, 2006, to discuss the proposed annexation and the City's pending General Plan Update, which will include the area surrounding the Canyon Hills Estates site to the .east, west and south. A copy of the conceptual site plan (identified as Tentative Tract Map 34249) was provided to the representatives at that meeting. The Wildomar Community representatives discussed issues with relation to traffic, hillside grading, and potential number of dwelling units. There was general discussion regarding said issues, however, staff reminded the representatives that project being considered currently was for Annexation purposes only. ......,; Since that meeting, staff has received several telephone calls, facsimiles, and e-mails from residents in the nearby Wddomar area expressing concern with the proposed project (Exhibit 'E'). Most of the concerns are with potential traffic to the immediate area and the "conceptual plan" (identified as Tentative Tract Map 34249). As will be discussed later, neither of those items are part of this project application, since the project is primarily a "boundary line" adjustment application. Those items will be reviewed once a "development" application is submitted to the City. The Sphere of Influence (SOl) boundaries of Elsinore Valley Municipal Water District (EVMWD) , Western Municipal Water District (WMWD) and Metropolitan Water District of Southern California (MWD) presently include the project site; however, annexation of the site is necessary in order to provide service. In anticipation of the development of the Canyon Hills Estates property, EVMWD has brought water and wastewater lines to the project site's northern boundary. Although the project site will be annexing into the three water district boundaries, the City of Lake Elsinore has been ~ J ACENDA ITEM NO. '2-.( _ PACE / 3,2- ')F I V-8 ......,; PLANNING COMMISSION STAFF REPORT February 21, 2006 Page 4 of 8 PROJECT TITLE: CANYON HILLS ESTATES ANNEXATION l ,--/ designated Lead Agency, in accordance with Sections 15050 and 15051 (b)of the CEQA Guidelines. The Lead Agency is the public agency which has the principal responsibility for carrying out or approving the project. The water districts and LAFCO will be responsible agencies for purposes of the annexation effort. ZONE CHANGE NO. 2005-09 Prior to annexation of territory adjoining the City of Lake Elsinore, the City Council is required to adopt a Pre-Zoning ordinance to delineate the zone that will apply to the property upon annexation to the City (Government Code Section 56375(a)). The City Council is only providing "initial consent" for the future annexation of the property should the City, LAFCO and the County of Riverside approve the annexation. The approved zoning set out in the pre-zoning ordinance will become effective upon the annexation of the affected property. The proposed Pre-Zoning designation for the site is Specific Plan. The existing General Plan designations are not being modified at this time. The Specific Plan pre-zoning designation has been selected to assure that any future proposal for development of the site has established development standards and to apply these standards in relation to the surrounding uses. In addition, the Specific Plan pre-zoning promotes compatibility and a holistic planning approach to the Canyon Hills Specific Plan area to the north of the site. It is anticipated that the Canyon Hills Estates site will have the future option to be incorporated into the Canyon Hills Specific Plan through an amendment to the Specific Plan. However, no Specific Plan level entitlement is, or can be, considered at this time. .~ CONCEPTUAL PLAN The City's Annexation application requires the submittal of the proposed Tentative Tract Map for the annexation area. The Tract Map is in the conceptual planning stages (pre-submittal) and is not being considered at this time. The following is a brief description of the conceptual site plan. The steep slope areas in the center of the site are designated as permanent open space; therefore, more than half of the site or approximately 132 acres are proposed to remain in permanent, natural open space within Canyon Hills Estates. In addition, an outdoor recreational center consisting of a pool, spa and restroom facilities, as well as a 5 + acre park is proposed onsite. The project's conceptual development area has been designed to follow the site's existing contours and avoid significant grading. The project will preserve and enhance Cottonwood Creek. The project's conceptual plan is designed to complement the existing pattern of residential development in the Canyon Hills Specific Plan area by constructing single-family residential units of comparable and larger sizes for move-up opportunities. Canyon Hills Estates proposes development of 350 detached single-family dwelling units at an overall density of 1.3 dwelling units per acre with lot sizes ranging from a minimum of 7,200 square feet to over 20,000 square feet. The proposed site plan and overall density has been developed to both gamer consistency with the site's development conditions and to permit a diverse mix of ,-- ACENDA ITEM NO. ?- \ PACE l3} OF / '16 PLANNING COMMISSION STAFF REPORT February 21, 2006 Page 50fS PROJECT TITLE: CANYON HILLS ESTATES ANNEXATION ..C) housing types that accommodate the range of site constraints, while seamlessly integrating into the adjacent Canyon Hills Specific Plan area, while remaining sensitive to the adjacent rural residential land uses and responding to the strong demand for move-up housing opportunities. ......., Because the site plan has been developed for planning purposes only pursuant to the City's Annexation requirements, the plan is at a conceptual pre-submittal stage and is not being considered by the Planning Commission at this time. ANALYSIS 1bis proposal is limited to the action of pre-zoning the property Specific Plan and amending the City's Sphere of Influence (SOl) and General Plan to incmporate the site into the City's boundaries. Pre-zoning the property Specific Plan establishes a regulatory procedure that must be followed for future development to occur, subject to future City of Lake Elsinore approvals and environmental review. Therefore, pre-zoning the property Specific Plan does not permit development of the property. Prior to the approval of development on site pursuant to the conceptual site plan, a General Plan Amendment may be necessary to revise the existing General Plan land use designation, as well as an amendment to the Canyon Hills Specific Plan or approval of a new Specific Plan and the completion of project level environmental review. These required subsequent tasks are not being considered at this time. The City is presently undertaking a comprehensive update of the General Plan that is anticipated to be completed in late summer of this year. Draft versions of the updated General Plan include the project site, as well as areas surrounding the site to the east, south and west in the City's SOl. The proposed General Plan Amendment and annexation are consistent with the City's existing and draft updated General Plan. ., ) ......" ENVIRONMENTAL DETERMINATION The proposed Negative Declaration No. 2006-02 has been prepared pursuant to Article 6 (Negative Declaration Process) and Section 15070 (Decision to Prepare a Negative or Mitigated Negative Declaration) of the California Erroiranrnmtal Q!tality Aa (CEQA). Based on staff's evaluation, the proposed project will not result in any significant effect on the environment. Further, pursuant to Section 15073 (Public Review of a Proposed Negative Declaration or Mitigated Negative Declaration) of the California Erroiranrnmtal Q!tality Aa (CEQA), the intended Negative Declaration was submitted to the State ClearinglxJuse on January 20,2006 for the required 30 day review period and will be completed by this Planning Commission Meeting. RECOMMENDATION It is recommended that the Planning Commission adopt the following Resolutions; Resolution No. 2006-_ recommending to the City Council adoption of Negative Declaration No. 2006-02; Resolution No. 2006-_ recommending to the City Council adoption of General Plan Amendment No. 2005-08, Resolution No. 2006-_ recommending to the City Council approval of Annexation ......., ACENDA ITEM NO. . \'2 l PACE /JY.oF_/Lf 8 PLANNING COMMISSION STAFF REPORT February 21, 2006 Page 60fs r', PROjECT TITLE: CANYON HILLS ESTATES ANNEXATION No. 75; Resolution No. 2006- recommending to the City Council approval of Zone Change (pre- Zoning) No.2005-09. FINDINGS- NEGATIVE DECLARATION 1. Revisions in the project plans or proposals made by or agreed to by the applicant before a proposed negative declaration and initial study are released for public review would avoid the effects or mitigate the effects to a point where clearly no significant effects would occur; and The applicant has made misims to the project or has agrml to specifr conditions uhidJ 'lmfid awid the ejfects of the project to a point71kre no si~t envirrnm:ntal ejfects will ocatr. 2. There is no substantial evidence, in light of the whole record before the agency, that the project as revised may result in a significant effect on the environment. Pursuant to the evidma: receiud in the light of the Wxie rmrrd presented by st4f to the Phnning O:mmissian, the project will not hcu a signf/imnt effect on the erwirrnrrmt cunsidering the limited ~ of the project. 3. Mitigation measures have been required to ensure all potentially significant impacts are reduced to levels of insignificance. The profXJ5ffi project rux:essitated only a Ntgatit:e Declaration, not a. Mitigated Ntgatiu? Declaration. No miJigaticn nwsures hem? lxm required as, all envirrnm:ntal impacts hcu lxm reduad to the lerel of ) insignifiGne by project desifJl. . ,.--...c 4. The Negative Declaration reflects the lead agency's independent judgment and analysis. City staff prepaml Ntgatiu? Declaration No. 2006-02. T~with any C011J1mts m:eiml during the puhlic review process, the Phnning Ommission exerr:i5ffi its indejxndent judgment in considering Ntgatiu? Declaraticn No. 2006-02, and making its remnrrmdation. 5. Specify the location and custodian of the documents or other material constituting the record of proceeding. The Administratiu? Record far the project is located at City Hall, 130 S. Main Street, Lake Elsinore, CA 92530. The project planner, Mr. Kin A. Coury, is the custcxlian of the Administratiu? RfIDrd FINDINGS -GENERAL PLAN AMENDMENT 1. The proposed General Plan Amendment will not be; a) detrimental to the health, safety, comfort or general welfare of the persons residing or working within the neighborhood of the proposed amendment or within the City, or b) injurious to the property or improvements in the neighborhood or within the City. The profXJ5ffi General Phn A rrmdmmt has lx:en analyzed relatiu? to its potmtid to !x? detrimmtal to the health, safety, ccmjUrt and 7re/fare of the persons residing or uorking within the neighl.xJrlxxxi of the pr0p05ffi arnoubnmt. The existing desigrzation of Very L01.0 Density Residential and Mountainous area is similar to the Rural Residential and Mountainous Residential designated in the County General Plan. Further, staff, condudtx/, that ~ AGENDA ITEM No._2 \ PAGE /3S OF I '-IS PLANNING COMMISSION STAFF REPORT February 21, 2006 Page 70fs PROJECT TITLE: CANYON HILLS ESTATES ANNEXATION the profXJsal w det:eIop the site under the Spec:ifr Plan desi~ assures that the deaioprmt standards and desiwz guidelines of the Spec:ifr Plan will be cmsistently appliRd 2. The proposed General Plan Amendment will permit reasonable development of the area consistent with its constraints and will make the area more compatible with adjacent properties. The existing City General Plan desi~ of Very Law Density and Mountainous area are similar and cmsistent with the Countys General Plan desigpation of Rural and Mountainous ResidmtiaL ThereJare, there is little significant change w the antUi;Jxlted !and use for the site. 3. The proposed General Plan Amendment would establish a land use desigpation and usage more in character with the subject property's IOdltion, access, and constraints. The General Plan Amendm:nt profXJses a boundary adjustmnt and uxxJd keep a designatim in can[armance ui1h the existing City General Plan of Very Law Density and Mountainous ared, as mdl as be crnsistent with the Countys General Plan desi~ of Rural and Mountainous Residential. In additim, the density is appropriate for the sites deaioprmt conditims because it accrmmxlates a range of site anstraints, and permits a seamless mtegration with the adjacent CAnpz Hills Spec:ifr Plan area, uhiIe nmaining sensitiu! w the adjacent mral residentia1!and uses 4. The proposed General Plan Amendment will not have a significant effect on the environment. The General Plan Amendm:nt da?s not profXJse any signifrant change w existing !and use desif}1alims and will not result in any significant enuirmm;ntal im:Jxtt All envirrnrrmtd impacts haa? l:xr:n mluarl w the feud if insigaifimna? by project desiWZ and Ntgatiu! llilaration No. 2006-02 has l:xr:n prepared FINDINGS-ANNEXATION 1. The proposed annexation area is contiguous to the City of Lake Elsinore and will not create pockets or islands. PLANNING COMMISSION STAFF REPORT February 21, 2006 Page 8 of 8 ~ PROJECT TITLE: CANYON HILLS ESTATES ANNEXATION FINDINGS - ZONE CHANGE (PRE-ZONING) 1. The proposed zone change will not be; a) detrimental to the health, safety, comfort or general welfare of the persons residing or working within the neighborhood of the proposed amendment or within the City, or b) injurious to the property or improvements in the neighborhood or within the City. The projXJsa1 Zone ~ has ken analyzed reIatic:e to its fXJtentid to k detrirrmtal to the health, safety, amjOrt and mlfare of the JX!rSa1S residing or uurking within the neigjJ!xJrhcxxl of the profXN!d arrJmdnmt The primary issue identifi<<l by staff relates to the health and safety of the persons residing or uurking within tk neighlurlxxxl of the existing land use. staff anIuded, based on tk proJX?rties safety remrds, that tk health and safety of the persans residing oruurkingwithin tk neigjJ!xJrhcxxl of tk prop;rtywill not k dtgradirl as a result of this projrt UJXn W11jiet:im of the annexaticn. 2. The proposed action will be consistent with the Goals, Objectives, and Policies of the General Plan and the development standards established with the Lake Elsinore Municipal Code (LEMC). Based on its andysis, staff has conduded that tk requestRd Zone Oxmge, allowing tk annexation of the subjrt prop;rty as Specifir Plan, is consistent with GOAL 1.0 of the General Plan in that this Pre-Zoning will assist in adiev;ng tk der:e/oprmt of a mdl-balanced and jinu:tional mix of residentid, by encouraging tk indusim" of residential land use within tk City 00undaries. " r"' PREPARED BY: Kirt A. Coury, Project Planner REVIEWED AND APPROVED BY: /J~ Rolfe Preisendanz, Community Development Director EXHIBITS Exhibit 'A' Exhibit 'B' Exhibit 'e' Exhibit 'D' Exhibit 'E' Vicinity Map Negative Declaration No. 2006-02 Proposed Annexation Area Map Proposed General Plan & Zoning Designation Map Project Correspondence r"' ACENDA ITEM NO. 2:.. \ PAce-.1.3 "l_OF {tf-a - """'..---.-..' RESOLlITION NO. 2006-14 A RESOLlITION OF THE PLANNING COMMISSION OF THE CITY OF LAKE ELSINORE) CALIFORNIA) RECOMMENDING TO THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE APPROVAL OF NEGATIVE DECLARATION NO. 2006-02 -, ,i~:,~" ....., WHEREAS, Vicki Mata, Trumark Companies, has submitted an application for General Plan Amendment No. 2005-08, Zone Change (pre-Zone) No. 2005-09, and Annexation No. 75. The 246.4 acre site is located immediately adjacent to the existing southern boundary of the Canyon Hills Specific Plan within parcels described as APN(S) 365-220-026, 365-230-001, 005, 006, 007, 009,010,011,012, AND 013 for property identified as "Canyon Hills Estates"; and WHEREAS, Canyon Hills Estates is defmed as a "project" by Section 21065 of the California Environmental Quality Act (CEQA), Cal. Public Resources Code Section 21000 et seq., which is defined as an activity which may cause either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment and which includes the issuance to a person of a lease, permit, license, certificate, or other entitlement for use by one or more public agencies; and WHEREAS, Negative Declaration No. 2006-02 has been prepared to evaluate environmental impacts resulting with the project; and WHEREAS, the Planning Commission of the City of Lake Elsinore has been delegated with the responsibility of making recommendations to the City Council for approving Negative Declaration No. 2006-02; and ) "-'II' WHEREAS, public notice of said applications has been given, and the Planning Commission has considered evidence presented by the Community Development Department and other interested parties at a public hearing held with respect to this item on February 21, 2006. NOW 1HEREFORE, the Planning Commission of the City of Lake Elsinore DOES HEREBY RESOLVE as follows: SECTION 1. The Planning Commission has considered the proposed Negative Declaration No. 2006-02, prior to making a decision to recommend approval to the City Council. The Planning Commission finds and determines that Negative Declaration No. 2006-02 is adequate and prepared in accordance with the requirements of the California Environmental Quality Act (CEQA) which analyzes environmental effects of the project, based upon the following findings and determinations: SECTION 2. That in accordance with State Planning and Zoning law and the City of Lake Elsinore the following findings for the approval of Negative Declaration No. 2006-02 have been made as follows: l 'I AGENDA ITEM NO., 'If) L - PACE~LoFL+B - "-'II' PLANNING COMMISSION RESOLUTION FOR NEGATIVE DECLARATION NO. 2006-02 ~ Page 2of2 1. Revisions in the project plans or proposals made by or agreed to by the applicant before a proposed negative declaration and initial study are released for public review would avoid the effects or mitigate the effects to a point where clearly no significant effects would occur; and The applicant has made revisions f{J the project ar has agreed to spedjic cmditions 'Zlh<<h 'lWU!d awid the eJJirts of the project to a point 7ikrr? no significant erwi:rrnnwttd eJJirts will occur. 2. There is no substantial evidence, in light of the whole record before the agency, that the project as revised may result in a significant effect on the environment. Pursuant to the evidem:e m:eiurl in the light of theuhole rmnd presentHi by staff f{J the Planning Canmission, the project will not haa! a significant e./firt on the erwi:rmrrxnt ansidering the limitId ~ of the project 3. Mitigation measures have been required to ensure all potentially significant impacts are reduced to levels of insignificance. The profXJsed project ruressitated only a Negatiu? Declaration, not a Mitigated Negatire Declaration. No mitigation measures haa! Ixen requirrd as, all erwi:rrnnwttd impacts ~ Ixen redua:d f{J the Imd of insignifimm:e by project desig;z. 4. The Negative Declaration reflects the lead agency's independent judgment and analysis. City staff prepan;d Negatia? Declaration No. 2006-02. T ~wiJh any cummts m:eiurl during the public review process, the Planning Ccmmissim exerr:isffi its indeJxndmt judgrmt in ansidering Negatia? Declaration No. 2006-02, and making its reca?1J1'lJ1dat 5. Specify the location and custodian of the documents or other material constituting the record of proceeding. The Administratia? Record far the project is located at City HaD, 130 S. Main Street, Lake Elsinore, CA 92530. The project plamer, Mr. Kin A. Coury, is the custxx:/Mn of the Administratia? Rmmi .,-... NOW, 1HEREFORE, baseq on the above findings, the Planning Commission of the City of Lake Elsinore DOES HEREBY RECOMMEND that the City Council of the City of Lake Elsinore approve Negative Declaration No. 2006-02. Michael ONeal, Chairman Lake Elsinore Planning Commission ~ ACENDA ITEM NO. 21 PACEj37-0FLti- PLANNING COMMISSION RESOLUTION FOR NEGATIVE DECLARATION NO. 2006-02 Page 30f2 I hereby certify that the preceding resolution had no action taken by the Planning Commission at a meeting thereof conducted on February 21, 2006 by the following vote: AYES: Commissioners: NOES: Commissioners: ABSENT: Commissioners: ABSTAIN: Commissioners: ATTEST: Rolfe M. Preisendanz, Secretary to the Planning Commission ONEAL, LARIMER GONZALES, lAPERE AGENDA ITEM NO. 2. i PAGE /+'0 OF /y~ -- .- ,~ ,~1 '-'" ) .."", ) '-'" RESOLUTION NO. 2006-15 /"" A RESOLUTION OF THE PlANNING COMMISSION OF THE CITY OF lAKE ELSINORE, CALIFORNIA, RECOMMENDING TO THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE APPROVAL OF GENERAL PlAN AMENDMENT NO. 2005-08 AMENDING THE CITY'S BOUNDARY TO INCORPORATE PARCELS SPECIFICALLY DESCRIBED AS (APN(S) 365-220-026, 365- 230-001,005" 006, 007,009,010,011,012, AND 013 WHEREAS, Vicki Mata, Trumark Companies has initiated proceedings to amend the General Plan Land Use Map by requesting a General Plan Amendment changing the City's boundary to incorporate parcels known as Assessor Parcel Number(s) 365-220-026, 365-230-001, 005,006,007,009,010,011,012, AND 013; and WHEREAS, the Planning Commission of the City of Lake Elsinore has been delegated with the responsibility of making. recommendations to the City Council for changes to the approved General Plan Land Use Map; and WHEREAS, public notice of said application has been given, and the Planning Commission has considered evidence presented by the Community Development Department and other interested parties at a public hearing held with respect to this item on February 21, 2006; ~. NOW 1HEREFORE, the Planning Commission of the City of Lake Elsinore DOES HEREBY RESOLVE as follows: SECTION 1. The Planning Commission has considered the proposed General Plan Amendment No. 2005-08, prior to making a decision to recommend that the City Council approve the proposed amendment to the City's boundary line. The Planning Commission fmds and determines that Negative Declaration No. 2006-02 is adequate and prepared in accordance with the requirements of the California Environmental Quality Act (CEQA) which analyzes environmental effects of ends City Council certification, based upon the following findings and determinations: SECTION 2. That in accordance with State Planning and Zoning law and the City of Lake Elsinore the following findings for the approval of General Plan Amendment No. 2005-08 have been made as follows: 1. The proposed General Plan Amendment will not be; a) detrimental to the health, safety, comfort or general welfare of the persons residing or working within the neighborhood of the proposed amendment or within the City, or b) injurious to the property or improvements in the neighborhood or within the City. The profXJsed General Plan A mendmmt has lxen analyzed relatiu? to its potential to Ix detrimmtal to tk health, safety, anfort and'lRRlJare (f the persons residing or 'l.Wrking within the neighlurlxxxi if the proJXmi amendrnmt The existing designation of Very Law Density Residential and Mountainous area is similar to the Rural Residential and Mountainous Residential designated in the County General Plan. Further, staff, cone/uded, that the profXJsal to deU!lop the site under tk SJX'Ci/i Plan designation assures that the .,-... deu:/opnent standards and design guidelines of the Specific Plan will Ix? consistently applied ACENDA ITEM N~. 2\ u . PACE Ilf-/ OF -Zif:~. PLANNING COMMISION RESOLUTION FOR GENERAL PLAN AMENDMENT NO. 2005-08 Page 2 of 3 J<") ....., 2. The proposed General Plan Amendment will permit reasonable development of the area consist~nt with its constraints and will make the area more compatible with adjacent propertIes. The existing City General Plan desi~ of Very Law Density and Mountainous area are similar and ansistent with the County's General Plan desi~ of Rural and Mountainous Residmtial. There[are, there is little significant chanfJ! to the anticipated land use for the site. 3. The proposed General Plan Amendment would establish a land use designation and usage more in character with the subject property's location, access, and constraints. The General Plan A1'1181limm: projX>ses a 00undary adjustmmt and umld keep a desi?J1diim in a:njUrrnaJue with the existing City General Plan of Very Law Density and Mountainous area, as 'lreU as Ex? ansistent with the County's General Plan desi~ of Rural and Mountainous Residential. In additim, the dmsity is appropriate for the site's dec:eIoprmt canditims because it aarmraIates a ranfJ! of site anstraints, and pmnits a seamless inttgration with the adjacent Can)rn Hills SJXrific Plan area, u:hi1e remaining sensitiu: to the adjacent neral residential land uses 4. The proposed General Plan Amendment will not have a significant effect on the enVIronment. The General Plan ArrJeJUhx:nt does not projX>se any significant chanfJ! to existing land use desigpa1icns and uill not result in any significant erwirrnrrmtal imp1a. All erwirmrrmtal imfx1cts haa! !x!en raIuad to the lei:el of insignijimnce by project design and Negatiu: Dedaratim No. 2006-02 has bren prepamI. '-' NOW, 1HEREFORE, based on the above findings, the Planning Commission of the City of Lake Elsinore DOES HEREBY RECOMMEND that the City Council of the City of Lake Elsinore approve General Plan Amendment No. 2005-08. Michael ONeal, Chainnan Lake Elsinore Planning Commission I hereby certify that the preceding resolution failed for lack of a second motion by the Planning Commission at a meeting thereof conducted on February 21,2006 by the following vote: AYES: Commissioners: NOES: Commissioners: ABSENT: Commissioners: ABSTAIN: Commissioners: J ACENDA ITEM NO. 2\ PAce-1 'f L_OF I</-& ....., PLANNING COMMISION RESOLUTION FOR ,-... GENERAL PLAN AMENDMENT NO. 2005-08 Page 3 of 3 ATTEST: Rolfe M. Preisendanz, Secretary- to the Planning Commission ,'-- r AGENDA ITEM NO. 2-\ PAGE_/yj OFL:t! . RESOLUTION NO. 2006-16 A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF LAKE ELSINORE, CALIFORNIA, RECOMMENDING TO THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE APPROVAL OF ZONE CHANGE (PRE-ZONE) NO. 2005-09 TO CHANGE THE ZONING DESIGNATION OF THE PARCELS SRECIFICALLY DESCRlBED AS APN(S) 365-220-026, 365- 230-001, 005" 006, 007, 009, 010, 011, 012, AND 013 TO SP SPECIFIC PLAN SUBJECT TO COMPLETION OF THE ANNEXATION NO. 75. ..co"', ...., WHEREAS, Vicki Mata, Trumark Companies, has been filed an application to change the Zoning Designation of the parcels described as APN(S) 365-220-026, 365-230-001, 005, 006, 007, 009,010,011,012, AND 013 to SP Specific Plan subject to the completion of Annexation No. 75; and WHEREAS, Vicki Mata, T rumark Companies, has submitted an additional application for Annexation No. 75, which is located adjacent to the City of Lake Elsinore's eastern border (immediately adjacent the Canyon Hills Specific Plan area) and is within the unincorporated boundaries of County of Riverside subject to the completion of Annexation No. 75; and WHEREAS, the Planning Commission of the City of Lake Elsinore has been delegated with the responsibility of making recommendations to the City Council for changes to the approved Zoning Map; and WHEREAS, public notice of said application has been given, and the Planning Commission has considered evidence presented by the Community Development Department and other interested parties at a public hearing held with respect to this item on February 21,2006; NOW lHEREFORE, the Planning Commission of the City of Lake Elsinore DOES HEREBY RESOLVE as follows: ...., SECTION 1. The Planning Commission has considered the proposed Pre-Zone Change No. 2005-09, prior to making a decision to recommend that the City Council approve the proposed amendment to the Zoning Map. The Planning Commission finds and determines that Negative Declaration No. 2006-02 is adequate and prepared in accordance with the requirements of the California Environmental Quality Act (CEQA) which analyzes environmental effects, based upon the following fmdings and determinations. SECTION 2. That in accordance with State Planning and Zoning law and the City of Lake Elsinore the following findings for the approval of Zone Change No. 2005-09 have been made as follows: 1. The proposed zone change will not be; a) detrimental to the health, safety, comfort or general welfare of the persons residing or working within the neighborhood of the proposed amendment or within the City, or b) injurious to the property or improvements in the ~ neighborhood or within the City. ...., nl AGENDA ITEM NO. 1-\ PAGE-L'f i-oF I C/--B PLANNING COMMISSION RESOLUTION FOR ZONE CHANGE NO. 2005-09 ,,-.. Page 2 of 2 The profXJSffi Zone Chan~ has ken analyzed relatire to its potential to Ix det:rirnmtal to the health, safety, wrfart and wdfcrre of the persons residing or'lWrking within the neighWrlxxxi of the propoSffi amendmtnt. The primary issue identijiRd by staff relates to the health and safety of the persons residing or unrking within the neigh!xJrlxxx1 of the existing &nd use. Sta/f candudtd, based on the proJX?rties safety records, that the health and safety of the persons residing or 'lWrking within the neigh!xJrlxxx1 of the proJx;rty will not Ix degradtd as a result of this project upon ccmpletion of the annexation. 2. The proposed action will be consistent with the Goals, Objectives, and Policies of the General Plan and the development standards established with the Lake Elsinore Municipal Code (LEMC). Based on its analysis, sta/f has concluded that the requested Zone Change, al/nwing the annexation of the subjoct proJX:Yty as Specific Plan, is ronsistentwith GOAL 1.0 of the General Plan in that this Pre-Zoning W11 assist in achieving the deu!/opnmt of a mdl-balanml and fUnctional mix of residmtial, by enrouraging the indusion of residmtial &nd use within the City louru/arie;. NOW, 1HEREFORE, based on the above findings, the Planning Commission of the City of Lake Elsinore DOES HEREBY RECOMMEND that the City Council of the City of Lake Elsinore approve Pre-Zone Change No.2005-09 subject to the completion of Annexation No. 75. ,"""'" Michael ONeal, Chairman Lake Elsinore Planning Commission I hereby certify that the preceding resolution had no action taken by the Planning Commission at a meeting thereof conducted on June 21, 2005 by the following vote: AYES: Commissioners: LAPERE, LARIMER NOES: Commissioners: ONEAL, GONZALES ABSENT: Commissioners: ABSTAIN: Commissioners: ATTEST: ~ Rolfe M. Preisendanz, Secretary to the Planning Commission AGENDA ITEM NO. 21 PACE /1~ OF.L!f ? RESOLUTION NO. 2006-17 A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF LAKE ELSINORE, CALIFORNIA, RECOMMENDING TO THE CITY COUNCIL THE COMMENCEMENT OF PROCEEDINGS TO ANNEX THE TERRITORY DESIGNATED AS ANNEXATION NO. 75 APN(S) 365-220-026, 365-230-001, 005" 006, 007, 009, 010, 011, 012, AND 013 INTO THE CORPORATE BOUNDARIES OF THE CITY OF LAKE ELSINORE. ; ~<') ,....., WHEREAS, Vicki Mata, Trumark Companies, has been filed an application for the annexing of certain properties described as APN(S) 365-220-026, 365-230-001, 005, 006, 007, 009, 010, 011, 012, AND 013 (246.4 acres) into the cotporate boundaries of the City of Lake Elsinore; and WHEREAS, this proposal is made pursuant to the Cortese-Knox-Hertzlerg Local Gawnrrmt Rearganizatim Aa 0[2000 (Government Code Section 56000-56001); and WHEREAS, The City of Lake Elsinore has submitted an additional application for Zone Change No. 2005-09, and is located immediately adjacent to the existing southern boundary of the Canyon Hills Specific Plan and unincOlporated boundaries of County of Riverside; and WHEREAS, the Planning Commission of the City of Lake Elsinore has been delegated with the responsibility of making recommendations to the City Council for annexations; and WHEREAS, public notice of said application has been given and the Planning Commission has considered evidence presented by the Community Development Department and other interested parties at a public hearing with respect to this item on February 21,2006; ,....., NOW 1HEREFORE, the Planning Commission of the City of Lake Elsinore DOES HEREBY RESOLVE as follows: SECTION 1. The Planning Commission has considered the request for the annexation (Annexation No. 75), prior to making a decision to recommend that the City Council commence proceedings to annex the subject territory. The Planning Commission finds and detennines that Negative Declaration No. 2006-02 is adequate and prepared in accordance with the requirements of the California Environmental Quality Act (CEQA) which analyzes environmental effects of ends City Council certification, based upon the following findings and detenninations. SECTION 2. That in accordance with the Cortese-Knox Local Government Reorganization Act of 1985, Government Code Section 57082 and the City of Lake Elsinore the following findings for the approval of Annexation No. 75 have been made as follows: 1. The proposed annexation area is contiguous to the City of Lake Elsinore and will not create pockets or islands. The prop>sed mmexation area bJrders the City of Lake Elsinore and is adjaa:nt to the area identijiRd as the Canyn Hills Specific Plan area. The project prop>ses reasonable extension of the city lx>undary area in that J ACENDA ITEM No.2-l PACE I 'ft JF -1' ~{1 ,....., PLANNING COMMISION RESOLUTION FOR ,-.. ') ANNEXATION NO. 75 Page 2 of2 the annexatUn of the proJXJSai parcels will not create any jXXkets or islands. The profXJsed annexatim ui11 Ixdp roctify an existing City pminsula that'lWS created ukn the WUdanar UC'lWS detat:Jxrl firm the City's Wundary. 2. The proposed annexation will not result in any adverse significant impacts on the envrronment. The projrt will not halX? a siWlijiamt ejfoct on the erwirrnrrmt and is consistent with the Otis adopted General Plan. 3. The proposed annexation will eliminate an existing undesired pocket of the county area. The profXJsed annexatim amsists of the remowl of 246.4 acres of land firm the County of Riw'side's jurisdictim and plarermt of the same into the city limits of Lake Elsinore The annexation area ixmiers the City of Lake Elsinore and is adjaant to the area identified as the Canym Hills Specific Plan area. NOW) 1HEREFORE) based on the above findings) the Planning Commission of the City of Lake Elsinore DOES HEREBYRECOMl'v1END that the City Council of the City of Lake Elsinore commence proceedings for Annexation No. 75. ,~. Michael ONeal) Chairman Lake Elsinore Planning Commission I hereby certify that the preceding resolution failed for lack of a second motion by the Planning Commission at a meeting thereof conducted on February 21) 2006 by the following vote:N AYES: Commissioners: NOES: Commissioners: ABSENT: Commissioners: ABSTAIN: Commissioners: ATTEST: I""" Rolfe M. Preisendanz) Secretary to the Planning Commission AGENDA ITEM NO. :2( PAGE I '-1:2 OF ! lffi ...,", ,...." GENERAL CONDITIONS 1. The applicant shall defend (with counsel acceptable to the City), indemnify, and hold harmless the City, its Official, Officers, Employees, Consultants and Agents from any claim, action, or proceeding against the City, its Official, Officers, Employees, or Agents to attach, set aside, void, or annul an approval of the City, its advisory agencies, appeal boards, or legislative body concerning the project, which action is bought within the time period provided for in California Government Code Sections 65009 and/or 66499.37, and Public Resources Code Section 21167. The City will promptly notify the Applicant of any such claim, action, or proceeding against the City and will cooperate fully with the defense. If the City fails to promptly notify the Applicant of any such claim, or proceeding, the Applicant shall not, thereafter, be responsible to defend, indemnify, or hold harmless the City. ANNEXATION NO. 75 2. The annexation of said property shall comply with the requirements contained in the Cortese-Knox- Herzberg Local Government Reorganization Act of 2000 (Government Code Section 56000-56001) and the standards and policies established by the Riverside Local Agency Formation Commission (LAFCO). 3. All entitlements contained herein are subject to the completion and approval of the annexation of the subject property. '-" P:\Canyon Hills Estates (Trumark)\PC Conditions of Approval.doc ~ ACENDA ITEM NO. :2-\ PACE..J ':f ~OF I '-I- ~ ~ CITY OF LAKE ELSINORE REPORT TO CITY COUNCIL TO: MAYOR AND CITY COUNCIL FROM: ROBERT A. BRADY, CITY MANAGER DA TE: APRIL 11,2006 SUBJECT: PUBLIC HEARING FOR CONSIDERATION OF OBJECTIONS TO THE CITY'S WEED ABATEMENT PROGRAM BACKGROUND Pursuant to City Municipal Code, Chapter 8.32, Weed and Rubbish Abatement, the City held a Public Hearing on February 9, 2006 to adopt a resolution declaring weeds, rubbish, ~ refuse and dirt on private properties to be a nuisance and order the abatement thereof. The City is also required to hold a Public Hearing to consider any objections by property owners to the proposed removal of weeds, rubbish, refuse and dirt should the owners neglect to clear their properties. DISCUSSION Weed Abatement notices were mailed to approximately 9,000 property owners following the Council's adoption of Resolution 2006-22, declaring weeds, rubbish, refuse and dirt on private properties to be a nuisance. Property owners will have until May 1, 2006 to abate their parcels. Should the City's staff abate a property beginning May 2, 2006, the owner will be assessed the cost of abatement ($0.020) per square foot plus a $306.00 Administrative Fee. FISCAL IMPACT None. All costs will be recovered through a Tax Lien, including the Administrative Fee of $306.00 per parcel. ~ AGENDA ITEM NO. PAOE l 7-9- OF -----La. ~ REPORT TO CITY COUNCIL APRIL 11, 2006 PAGE 2 RECOMMENDA TION It is staff's recommendation that the City Council open the Public Hearing and give due consideration to any objections presented by the public on this date. PREPARED BY: OR OF COMMUNITY SERVICES APPROVED FOR AGENDA BY: r-, ,"""""" AGENDA ITEM NO. PACE {)... ~ t?-- ,,~ OF_J..~ j" CITY OF LAKE ELSINORE REPORT TO CITY COUNCIL ...., TO: MAYOR AND CITY COUNCIL FROM: ROBERT A. BRADY, CITY MANAGER DATE: FEBRUARY 9, 2006 RESOLUTION DECLARING WEEDS,RUBBISH, REFUSE AND DIRT A NUISANCE; PR(i)PERTY OWNERS TO BE NOTIFIED . SUBJECT: BACKGROUND Pursuant to the City~s Municipal Code,. Chapter 8.32, Weed and Rubbish Abatemen4 the City is required to hold a hearing to adopt a resolution declaringweeds~ rubbish and refuse on private properties a nuisance and order the abatement thereof. DISCUSSION ......, Weed abatement notices are being prepared for mailing to approximately 9~OOO vacant property owners and will be mailed followingthe Council's adoption of the proposed Resolution declaring weeds, rubbish, refuse and unpermitted dirt piles on private properties a nuisance. The Resolution also provides for a public hearing on Aprilll th for the City Council to consider all objections to the proposed removal of weeds, rubbish~ refuse and unpermitted dirt piles. Property owners will have until May 1, 2006, to abate their parcels. Should City staff abate a property. beginning May 2, 2006, the owner will be assessed the cost of abatement at a rate of$O.02 per square foot plus a $306.00 administrative ~e. FISCAL IMPACT None. All costs (including the administrative fee ) will be recovered through a tax lien on the affected parcels. ...., ACENDA ITEM NO; :2!2 PAO'E 3 OF J~ ,.-. REPORT TO CITY COUNCIL FEBRUARY 9, 2006 PAGE 2 RECOMMENDATION Staff recommends that the City Council adopt Resolut~on No. 2006- ~ and direct staff to begin the abatement process for th. ear. PREPARED BY: DA APPROVED FOR AGENDA BY: "........ --- CITY COMMUNITY. SERVICES ACENDA ITEM NO. ';f-~--- PAOE~OF I ~_.~ RESOLUTION NO. 2006- ~ RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, EST1\BLISBlNG WEED ABATEMENT ASSESSMENT LIENS AND .DECLARING THAT CERTAIN WEEDS, RUBBISH, REFUSE AND DIRT AS DEFINED IN SECTION 14875 OF THE HEALTH AND SAFETY CODE OF THE STATE OF CALIFORNIA AND CIiAPTER 8.32 OF THE LAKE ELSINORE MUNICIPAL CODE CONSTITUTE A NUISANCE AND REQUIRE A NOTICE TO BE GIVEN TO THE PROPERTY OWNER IN ACCORDANCE WITH DIVISION 12, PART 5, CHAPTER 2, OF THE HEALTH AND SAFETY CODE OF THE STATE OF CALIFORNIA AND .,-CHAPTER 8.32 OF THE LAKE ELSINORE MUNICIPAL CODE AND PROVIDING FOR A HEARING ON OBJECTIONS, TOGETHER WITH FILING OF COST REPORTS AND ASSESSMENTS AGAINST ABUTTING PROPERTY OWNERS. ......., WHEREAS, there exists in the City of Lake Elsinore, California, on certain streets, sidewalks and on private property, weeds, rubbish, refuse and dirt as defined in Chapter 8.32 of the Lake Elsinore Municipal Code.; and WHEREAS, said weeds, rubbish, refuse, and dirt constitute a nuisance that is a fIre and health hazard; and ....", WHEREAS, the City does designate the Parks and Open Space Division to enforce the provisions of Chapter 8.32 and the provisions of the' Health and Safety Code of the State of California as hereinabove set forth; and WHEREAS, the City.Manager has submitted a list of properties upon which there is upon the streets, sidewalks, and private property, weeds, rubbish, refuse, and. unpermitted dirt piles, which constitute a nuisance by virtue of being a fire and health hazard; and WHEREAS, there is affixed hereto and made a part hereof by reference and marked Exhibit "An a list of all properties within the City upon which said weeds, . rubbish, refuse and unpermitted dirt piles exist and which exists by giving its assessors parcel number according to the official assessment for the City of Lake Elsinore. ......., AGENDA ITEMNO. ,2-?- PACE __15 __OF 1 ~ ] CITY COUNCIL RESOLUTION NO. 2006- Page 2 of 4 ."'. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS: SECTION 1. That pursuant to the authority granted to the City by virtue of Section 14875 of the Health and Safety Code of the State of California and Chapter 8.32 of the Lake Elsinore Municipal Code, weeds, rubbish, refuse, and unpermitted dirt piles upon or in front of the properties as described in Exhibit "A" are hereby declared to be a nuisance and shall be abated. . (A) That notices will be sentout to the property owners as last shown upon the assessment rolls in accordance with the said Health and Safety Code, State 'ofCalifomia, and of said Ordinance, City of Lake Elsinore, Galifomia. (B) That the said notices shall be in the form set forth in said Health and Safety Code and said City Ordinance and that said notices shall be sent at least five (5) days prior to the time of Hearing of objections. ,,-.... (C) That the list of all property owners to whom notices are to be sent, as well as the locations of the property are set forth in Exhibit "A" which is attached hereto and made part hereofby reference. (D) That the City Council does hereby find and dechrre that the weeds, rubbish, refuse and unpermitted dirt piles on the specified' parcels of property is recurrent and shall be abated in the manner provided for in Section 14900.5 of the Health and Safety Code of the State of California and in accordance with Chapter 8.32 of the City of Lake Elsinore Municipal Code. (E). That the City Council of the City of Lake Elsinore does hereby set the date of April 11, 2006, at the hour of 7:00pm in the Lake Elsinore Cultural Center, 183 North Main Street, in the City of Lake Elsinore, California, to herein consider all objections to the proposed removal of weeds, rubbish, refuse, and unpermitted dirt piles. (F) That hereafter if objections have not been made or the City Council has disposed of those made, the Parks and Open Space Division is ordered to abate the nuisances in accordance with said Health and Safety Code Section and said Ordinance of the City of Lake Elsinore, California. ",...- NO "'JI? AGENDA ITEM .. .-,.'" I~' s. ~I_ PACE (p OF I d.- ~_ CITY COUNCIL RESOLUTION NO. 2006- Page 3 of 4 (G) The Parks and Open Space Division shall keep an account of the cost of the "-'" abatement in front of or on each separate parcel of land and shall render a written report showing such costs and shall cause said notice to be posted in accordance with law. (H) That the cost of the abatement in front of or on each parcel shall constitute an operational assessment against the parcel. After the assessment has been made and confirmed there shall be made a lien upon said parcel of property in accordance with said Health and Safety Code and the Ordinance of the City. SECTION 2. This Resolution shall take effect from and after the date of its passage and adoption. PASSED, APPROVED AND-ADOPTED this by the following vote: day of . 2006, . AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: ~ ABSTAIN: COUNCILMEMBERS: Robert E. Magee, Mayor City of Lake Elsinore ATTEST: Frederick Ray, City Clerk City of Lake Elsinore "-'" i'")n AGENDA ITEM NQ. 4=~ PA~ '1- OF~l&' .~ /""' ;---. CITY COUNCIL RESOLUTION NO. 2006- Page 4 of 4 APPROVED AS TO FORM: Barbara Zeid Leibold, City Attorney City of Lake Elsinore / AGENDA ITEM NO. ? rk.-r . PACE . ~ _Of../ i2~JJ"'" ....." City of Lake Elsinore Weed Abatement Guidelines The mission of the City of Lake Elsinore's weed abatement program is for the annual removal of combustible fuel such as weeds, brush, dead trees and rubbish from unimproved property within the city limits, including abatement of nuisances such as fill dirt and debris from illegal dumping, through the coopemtion of affected property owners according to standards in the Municipal Code. The following are the City of Lake Elsinore's weed abatement guidelines. These guidelines shall apply to all vacant and. unimproved lots throumout the year. including those lots with vacant structures. All Properties Includes any alley, sidewalk, parkway strip, or unimproved public easement abutting the property: · Remove all rubbish, trash, trimmings, litter, tires, and combustible waste material. · Disc or mow all weeds, grass, brush, or other combustible vegetation according to our guidelines below. · Remove all grass and other cuttings after mowing, hoeing, or weed-eating. · Remove all sagebrush, chaparral, tumbleweeds, and any other brush or weeds which attain such large growth as to become, when dry, a fire menace to adjacent improved property. · Tumbleweeds shall be removed from the property on a year- round basis. · All weeds shall be cut to 3 inches in height on all parcels. ....." Discin!! Guidelines All disc work shall be completed so that all weeds, grass, crops or other vegetation or organic material which could be expected to bum shall be substantially turned over so there is insufficient fuel to sustain or allow the spread of fire. Handwork, including mowing, weed-eating or hoeing, may be utilized for the removal of weeds along fence lines where discing my not be possible, so that these areas are free and clear of growth and dead vegetation. As per AQMD Rule 403, all areas to be disced must be watered prior to the start of work for the control of fugitive dust. ....." AGENDA ITEM NO. :2?-- PA(}~-L- OF---La ,~ Parcels Over Ten (10) Acres · In lieu of discing the entire parcel, firebreaks may be used in such a manner that no single area shall exceed ten (10) acres. Firebreaks shall be a continuous strip of land which is clear of all combustible weeds, grass, stubble, rubbish, or other material which would allow the travel of fire. Firebreaks may include fire-resistive vegetation, such as irrigated crops, ice plant, and any other live plants recognized by the City of Lake Elsinore as being fire-resistive. · Provide'SO foot wide firebreaks around all combustible structures. · Provide 50 foot wide firebre8ks along each side of all roadways. · Provide a 50 foot firebreak along each side of all fences, property lines, ditches and creeks. · Remove any and all trash and illegal dumping. · Remove any dead or overgrown branches within six (6) feet from the ground. Remove dead palm fronds. Parcels On A 45 Del?:ree Slope ,..-.. · Any parcels that are on a slope 45 degrees or greater will need to remove weeds thirty (30) feet from all roadways, and fifty (50) feet away from any structures. · Remove all trash and illegal dumping. · Remove any dead or overgrown branches within six (6) feet from the ground. Please note that, should a fire occur due to lack of weed and debris removal, the Fire Department may charge you for the Firefighting costs it incurs. Common Problems · Weeds along curbs and gutters . Weeds along fences · Weeds and dirt left on sidewalks · Mounds of dirt left on parcels · Litter must be removed prior to discing · Lots under 10 acres must be disced or mowed completely · Trim and clean around trees · Remove all tumbleweeds Please be sure to monitor your property(s) regularly and keep them clean throughout not only the spring and summer fire season, but year-around. ,..-. THANK YOU FOR KEEPING THE CITY OF LAKE ELSINORE SAFE AND CLEAN. ACENDA ITEM NO._ :2-9- PACe~OF J f1 _ i~ ....." INTEROFFICE MEMORANDUM TO: FROM: DATE: SUBJECT: Bill PAYNE, PUBLIC WORKS MANAGER 11 / DAVID W. SAPP, DIRECTOR OF COMMUNITY SERVICES_jI1 FEBRUARY 1, 2006 WEED ABATEMENT FEE ANALYSIS Below is a breakdown of the Fee Analysis for accessing field personnel costs for Weed Abatement. 1 - Weed Abatement Lead Worker @ $29.96 per hour = 2 - Equipment Operators @ $33.49 per hour ea. = 2- Maintenance I Workers @ 20.01 per hour ea. = $29.96 $66.98 $40.02 $136.96 @ 4 hours = $547.84 + 22,500 sq.ft. = Total $136.96 per hour $0.0200 per sq.ft. $0.020 per sq.ft. ....." Rounded-off cost per sq.ft. Bench Mark City staff abated a group of City lots totaling 22,500 square feet. It took a crew of four (4) staff (2 Equipment Operators and 2 Maintenance I Workers) 4 hours to abate the entire property, which included discing, dust control tree trimming and litter and debris removal. :cd c. City Manager Director of Administrative Services ....." AOEN9A ITEM NO. 2- 9-c. PACE_-1L-OF _Lel -fJ-1U- ~ INTEROFFICE MEMORANDUM TO: FROM: DATE: SUBJECT: BILL PAYNE. PUBUC WORKS MANAGER. /1 I DAVID W. SAPP. DIRECTOR OF COMMUNITY SERVICE~, FEBRUARY 1. 2006 FEE ANAL YSISlADMINISTRATIVE FEE ,-. Below is a breakdown of the Administrative Fee for Weed Abatement. The apersonner cost includes all City Departments and Divisions. Personnel = $83,315.85 PostageIMailing/Printing = $8,000 Office Supplies = $1,200 Special Dept Supplies = $13,500 2 - Tractors with 2-Disc and 2-Flail Depreciation = $195,090 + 120 months = $1,625.75 x 12 months = $19,509 per year 3 - Trucks Depreciation = $60,637.06 + 60 months = $1.010.61 x 12 months = $12,127.32 per year Total = 137.652.17 $137.652.17 + 450 Parcels completed per year = $306 Administrative Fee :00 c. City Manager Director of Administrative Services -. ACENDA ITEM NO. 2-?-. ~ PACE {a. OF {~. _ CITY OF LAKE ELSINORE REPORT TO CITY COUNCIL ......" TO: FROM: DA TE: MAYOR AND CITY COUNCIL ROBERT A. BRADY, CITY MANAGER APRIL 11, 2006 SUBJECT: ADOPTION OF ORDINANCE GRANTING A NON-EXCLUSIVE FRANCHISE TO PROVIDE CABLE SERVICE TO VERIZON CALIFORNIA INC. BACKGROUND This agenda item was carried forward from the last meeting where three issues were raised by the Mayor and City Council agreed to continue the item to the next meeting. On April 4, 2006, the Mayor, City Staff and Verizon representatives met and worked through the issues raised at the meeting. The three issues and how they were resolved are as follows: ....", 1. Ensure that KZSW TV will be part of the channel line up. Results: Verizon has confirmed and the Mayor and independently confirmed with KZSW that Verizon will has entered into an agreement with KZSW TV to include the station on their channel line-up. 2. Determine whether Verizon will have a local office. Results: Verizon will have a local payment center for customers who want to pay their bill locally. Customers who wish to swap or turn in equipment will receive service delivered to their door. Verizon will not have a local studio. 3. Ensure that Verizon and Comcast will work out a connection for broadcasting City Council meetings. Results: The Franchise agreement provides the City protection if an "interconnection agreement" can not be reached. If an agreement is not reached, Verizon would provide their own equipment to connect at the cultural center plugging into Comcast's audio and video (A V) output, which would be split to Comcast and Verizon. '-' AGENDA ITEM No-'k35/ PACE I OF --" - ,- REPORT TO CITY COUNCIL APRIL 11,2006 PAGE 2 In 1971, the City of Lake Elsinore ("City") granted its first non-exclusive cable television franchise to Cable Meter Systems, a predecessor in interest to Comcast. Comcast holds the only current cable television franchise within the City. Verizon California Inc. ("Verizon") is the primary provider of residential telephone service within the City. As part ofVerizon's upgrade of that system, it will now have the capacity to provide cable television broadcasts. However, before providing such broadcasts, Verizon must secure a cable television franchise from the City. Verizon has requested such a non-exclusive franchise. Prior to granting such a franchise, however, the City is required to conduct a public hearing to gather public input on the proposed cable franchise agreement and to consider the impacts of the proposed franchise agreement, as required by California Government Code ~ 53066.3, 47 V.S.C. ~ 541(a), and other applicable provisions of law. ,..-. DISCUSSION The attached proposed Franchise Agreement is substantially in the form of agreements Verizon recently negotiated with Murrieta and Hermosa Beach. However, the agreement is different with respect to the existing franchise agreement with Comcast. An executive summary of the various terms of the proposed Franchise Agreement is attached along with a discussion supporting the required findings should the City Council adopt the authorizing ordinance and approve the franchise agreement. At its most basic level, the proposed franchise agreement provides for a standard 15-year term and the maximum legally allowable franchise fee - 5% of gross revenues. In Staff's view, the substantial difference between the existing Comcast franchise agreement and Verizon agreement are the provisions for Public, Educational and Government ("PEG") programming. As the Council is aware, Comcast provides camera equipment and personnel for broadcast of City Council meetings. Additionally, Comcast provides a regional studio facility for community members to create programming for the City's PEG channel. Verizon will not duplicate these programming services. Instead, Verizon proposes to ~, contribute a "PEG Fee" of $0.65 per month per subscriber so that the City can purchase programming equipment and develop programming facilities of its own. AGEN~:C;E~O_~= REPORT TO CITY COUNCIL APRIL 11, 2006 PAGE 3 ....." V erizon has agreed to broadcast such programming over a dedicated PEG channel and, furthermore, has agreed to carry Comcast's PEG programming to the extent that Comcast will agree to provide the feed. Please note, however, that such an agreement between Verizon and Comcast has not been reached and it is uncertain that Comcast will agree to such an arrangement. The transition to a PEG fee creates both burdens and opportunities for the City. It will create a funding source for equipment and personnel to expand the City's programming. At the same time, unless agreement is reached with Comcast or the City purchases equipment and provides trained broadcast personnel, City Council meetings will not be carried on the PEG channel provided by Verizon. In balancing the benefits and burdens of the proposed system, we note that Verizon will offer state" of the art programming quality and services to the community. Overall service quality of cable providers should be improved as they compete for customers. Additionally, satellite customers may be swayed to return to traditional cable service....." thereby enhancing the City franchise fee revenues. FISCAL IMPACT Unknown at this time. However, the City will receive a 5% franchise fee on gross revenues and a monthly $0.65 PEG fee per subscriber ifthe non-exclusive franchise is granted. Also, the Franchise Agreement provides for an "Acceptance Fee" paid by Verizon to the City in the amount of$lO,OOO.OO for costs associated with the grant of the franchise. RECOMMENDATIONS It is recommended that the City Council: 1. Consider and adopt this Staff Report along with the attached Executive Summary and Analysis evidencing the Council's consideration of each of the requirements and criteria enumerated in California Government Code S 53066.3,47 U.S.C. S 54l(a), and other applicable provisions of law, as well as any applicable provisions of existing franchises, which support the Council's approval of the proposed cable franchise agreement; and "'. AGENDA !Tr:~v\ :'!(J PACE 3 '2-3 .~F fJ7 ,.- REPORT TO CITY COUNCIL APRIL 11, 2006 PAGE 4 2. Approve the first reading of the attached Ordinance No. .117~anting a non- exclusive franchise to provide cable service to Verizon California Inc. PREPARED BY: MATT PRESSEY, DIR. OF ADMIN. SERVICES! BARBARA ZEID LEIBOLD, CITY ATTORNEY APPROVED FOR AGENDA LISTING: ,.- ,.- ACENDA ITEM NO. 'J..3 PAGE tI OF 5! - REPORT TO CITY COUNCIL APRIL 11, 2006 PAGE 5 """'" EXECUTIVE SUMMARY AND ANALYSIS Overview Verizon California Inc. ("Verizon") has requested grant of a franchise to operate and provide cable service in the City of Lake Elsinore ("City"). A true and correct copy of the proposed Franchise Agreement negotiated with the City's representatives has been available for inspection in the City Clerk's office since March 13, 2006. Notice of public hearing before the City Council to consider the proposed Franchise Agreement was properly published in The Press-Enterprise on March 13, 2006 and March 20, 2006, in accordance with California Government Code 99 6066 and 53066.3(a)-(d). Verizon currently is in the process of upgrading its existing telecommunications facilities in the City by installing a state-of-the-art Fiber to the Premise Telecommunications Network ("FTTP Network"). The FTTP Network will utilize """'" fiber-optic cables and associated optical electronics instead of copper wire to connect customers to the V erizon network. The FTTP Network will use laser-generated pulses of light to transmit voice, data and video signals via the fiber at speeds and capacities far exceeding today's copper-cable systems. Among the services that Verizon's FTTP Network will enable is cable service. Verizon therefore sought a cable franchise from the City to use the FTTP Network to provide cable service to Lake Elsinore residents in competition with the existing cable operator under the terms and conditions of the proposed Franchise Agreement. Federal and state law set forth requirements with respect to granting an additional cable franchise. Section 621 ( a) of the Communications Act requires that the City "assure that access to cable service is not denied to any group of potential residential cable subscribers because of the income of the residents of the local area in which such group resides" and sets forth certain provisions which shall or may be included in a franchise. 47 D.S.C. 9 541(a)(3)-(4); see also Cal. Gov't Code 9 53066.3(b), (d). California Government Code 9 53066.3 requires that the City conduct a public hearing to identify the impacts on the community of granting an additional cable franchise and ~ AGENDA ITE?O. '~3 PACE OF 57 ,- ,- ,- REPORT TO CITY COUNCIL APRIL 11, 2006 PAGE 6 the City Council is to consider certain enumerated criteria in making its determination whether to grant an additional franchise. Back2round Verizon is installing its FTTP Network as a common carrier pursuant to Title II of the Communications Act, and in accordance with its certificate of public convenience and necessity issued by the California Public Utilities Commission, Section 7901 of the California Public Utilities Code and General Administrative Order 95. In addition to telecommunications services, V erizon' s FTTP Network, once installed, will enable the provision of cable service to the residents of Lake Elsinore. Verizon seeks to provide cable service to Lake Elsinore residents in competition with the existing cable operator serving the City, under the terms and conditions of the proposed Franchise Agreement. Verizon will provide the cable service over its FTTP network, a network which also will provide Lake Elsinore residents with voice and extremely high-speed data services. The City Council may approve a franchise agreement subsequent to a public hearing considering the proposed franchise grant. Cal. Gov't Code 9 53066.3(a). In reviewing such a request and making its determination whether to approve the proposed franchise agreement, the City Council is required to make a decision based upon the documents and testimony received at the hearing and the record as a whole as to whether or not the franchise should be granted. In addition, California Government Code 9 53066.3(a) specifically requires the City Council to consider certain enumerated criteria in determining whether to grant an additional cable franchise. These criteria are: · Whether there will be significant positive or negative impacts on the community being served. · Whether there will be an unreasonable adverse economic or aesthetic impact upon public or private property within the area. . Whether there will be an unreasonable disruption or inconvenience to existing users, or any adverse effect on future use, of utility poles, public AGENDA IT. EM NO. ~__ PAGE /IJ OF ~7 REPORT TO CITY COUNCIL APRIL 11,2006 PAGE 7 ....." easements, and the public rights-of-way contrary to the intent of Section 767.5 of the California Public Utilities Code. . Whether the franchise applicant has the technical and financial ability to perform. . Whether there is any impact on the franchising authority's interest in having universal cable service. . Whether other societal interests generally considered by franchising authorities will be met. . Whether the operation of an additional cable system in the community is economically feasible. . Such other additional matters, both procedural and substantive, as the franchising authority may determine to be relevant. ~ In addition, California Government Code 9 53066.3( d) and Section 621 of the Communications Act contain certain nondiscrimination requirements relating to the grant of the franchise. California Government Code 9 53066.3( d) also requires that the proposed cable franchise "contain[s] the same public, educational, and governmental access requirements that are set forth in the existing franchise." Cal. Gov't Code 9 53066.3( d). Maior Provisions of the Proposed Franchise A2reement The proposed Franchise Agreement with Verizon includes the following key prOVISIons: · Provision of cable service to all residential areas of the City according to a reasonable build out schedule. Proposed Franchise Agreement Article 3 and Exhibit A. · Quarterly franchise fee payments of five percent (5%) of Gross Revenues, as defined. Proposed Franchise Agreement Article 7. ~ AGENDA ITEM NO. '2.~ PACE 1 OF 57 - ,-. REPORT TO CITY COUNCIL APRIL 11,2006 PAGE 8 · A IS-year term from the Effective Date, unless the franchise is earlier revoked as provided in the Franchise Agreement. Proposed Franchise Agreement Article 2.3. · PEG programming and support that are equivalent (or provide different but equally valuable benefits by way of a PEG fee) to those of the incumbent provider in the City, including dedicated educational and governmental access channels and interconnection with the existing cable operator in Lake Elsinore for the carriage of PEG programming. Proposed Franchise Agreement Article 6. . Extensive customer service requirements, including requirements regarding telephone availability for customer inquiries, billing, installation and service calls, complaint procedures, and communications with subscribers. Proposed Franchise Agreement Article 8. ,- · Liability insurance and indemnification requirements. Proposed Franchise Agreement Article 10. Other pertinent provisions of the proposed Franchise Agreement include: · Enforcement and termination provisions. Proposed Franchise Agreement Article 13. · Technical standards for operation ofVerizon's cable system. Proposed Franchise Agreement Article 5. · Emergency Alert System requirements. Proposed Franchise Agreement Article 5.3. · Reporting and recordkeeping requirements. Proposed Franchise Agreement Article 9. · Franchise renewal and transfer procedures. Proposed Franchise Agreement Articles 11, 12. ,- AGENDA ITEM NO. 2- :3 PAG~., ~g ~OF 57 ~ REPORT TO CITY COUNCIL APRIL 11,2006 PAGE 9 ....." Analvsis of Le!!al Requirements: The following analysis is presented to the Council to assist in Council's due consideration of certain criteria enumerated by California law, as follows: (J) Whether there will be significant positive or negative impacts on the community being served. See Cal. Gov't Code 9 53066.3(a)(J). The grant of a non-exclusive cable franchise to Verizon will have no negative impact on the community and the overall impact ofVerizon's presence as a cable service provider in Lake Elsinore will be positive. Among the most significant positive impacts of Verizon's presence are those directly related to the benefits that cable competition will bring to the community, including, but not limited to: Customer choice for different services that competing providers will offer. Verizon's service will offer an extensive lineup of video programming, both traditional and nontraditional, government access programming and pay-per-view services. · Higher customer service quality, improved programming and more competitive rates. . ....., Federal, state and local law favors competition in the provision of cable services directly to consumers and it is broadly recognized at all levels of government that cable competition benefits consumers by encouraging greater efficiency, more competitive prices, and improved customer service. · The State Legislature has specifically proclaimed by statute that: "[t]he Legislature hereby finds and declares that the policies for telecommunications in California are . . . to promote lower prices, broader consumer choice, and avoidance of anti competitive conduct" and "to remove the barriers to open and competitive markets and promote fair product and price competition in a way that encourages greater efficiency, lower prices, and more consumer choice." Cal. Pub. Util. Code 99 709(t) & (g). ....." AGENDA ITEM NO. 23 PACE Cf OF 57 - ,- REPORT TO CITY COUNCIL APRIL 11,2006 PAGE 10 ,- . Congress, the General Accounting Office, and the Federal Communications Commission ("FCC") have specifically found that wireline competition in the provision of cable service results in higher customer service quality, improved programming and lower rates. See, e.g., 47 U.S.C. 9 521(6) (stating that it is the purpose of the Cable Act to "promote competition in cable communications"); H.R. Rep. 102-628 ("The Committee continues to believe that competition is essential both for ensuring diversity in programming and for protecting consumers from potential abuses by cable operators possessing market power . . . . The Committee believes that steps must be taken to encourage the further development of robust competition," including encouraging "cable overbuilds."); General Accounting Office, Wire-Based Competition Benefited Consumers in Selected Markets, Report to the Subcommittee on Antitrust, Competition Policy and Consumer Rights, Committee on the Judiciary, U.S. Senate (Feb. 2004); Annual Assessment of the Status of Competition in the Market for the Delivery of Video Programming, MB Docket No. 03-172, FCC 04-5, 11 (2004). · Consumer advocates repeatedly have confirmed the positive effects of wireline cable competition. See, e.g., The Failure of Cable Deregulation: A Blueprint for Creating a Competitive, Pro-Consumer Cable Television Marketplace, U.S. Public Interest Research Group, August 2003, available at URL: http://uspirg.org/uspirg.asp?id2=1 0531 &id3=USPIRG&. (2) Whether there will be an unreasonable adverse economic or aesthetic impact upon public or private property within the area. See Cal. Gov't Code 9 53066.3 (a) (2). The grant of a non-exclusive cable franchise to Verizon will not result in any unreasonable adverse economic and aesthetic impacts upon public or private property within Lake Elsinore. Granting Verizon a franchise to provide cable services will not have an adverse economic impact on the City. To the contrary, granting Verizon a franchise will bring ~ AGENDA ITEM NO., :) %- - P~E /0 OF 1_ - REPORT TO CITY COUNCIL APRIL 11, 2006 PAGE 11 ....., substantial economic and developmental benefits to our City. Below are some examples of the benefits of the additional franchise: · Grant of the franchise will bring competition for cable programming service to the residents of Lake Elsinore and result in a positive economic impact for subscribers. There will also be a positive impact on Lake Elsinore's economic development efforts. With the grant of a franchise to Verizon, Lake Elsinore will become eligible to receive a "triple play" of video, voice and data over a state-of-the-art FTTP communications network. This FTTP network will enable Lake Elsinore residents to enjoy a top-of-the-line digital cable service, with unparalleled high- definition capabilities and channel capacity, unencumbered by the need to "share" bandwidth with voice and data. . Granting Verizon a franchise will also increase cable penetration, adding subscribers to the City's franchise fee base. Some residents who do not currently subscribe to cable service or who are satellite customers today will subscribe to Verizon's cable service, thereby increasing the overall number of subscribers generating revenue on which cable franchise fees are paid. The increase in content choices that will result from Verizon's service offerings has the potential to create more purchases in the higher cable tiers, increasing the franchise fee revenue base in this manner as well. '-'" Additionally, the grant of a franchise to Verizon will not result in any unreasonable adverse aesthetic impact upon public or private property within Lake Elsinore. . Verizon is seeking a franchise from the City to provide cable services over Verizon' s existing FTTP network, once completed. The FTTP network carrying Verizon' s cable services will be constructed, operated and maintained as an upgrade to and/or extension ofVerizon's existing telecommunications facilities pursuant to authority granted by the State; thus, Verizon is not required to obtain a franchise from the City to construct its FTTP network. Because the facilities used to provide Verizon's cable services will be the same facilities used to provide the ,..., NO 2-?:J - AGENDA \TEl'" '- 57 PPfJE_11 OF - -- ,--.. REPORT TO CITY COUNCIL APRIL 11, 2006 PAGE 12 other services that will be carried by V erizon' s FTTP network, the grant of a cable franchise to Verizon will have no additional adverse aesthetic effect on public or private property. . During the installation of its FTTP network, Verizon will be working in close coordination with the City's Public Works Department to minimize disruptions and adverse impacts to our streets. Where V erizon' s existing network is placed overhead, on existing utility poles, the upgraded network facilities will be placed overhead; where V erizon' s existing network is placed underground, the upgraded network will be placed underground. The construction of Verizon's FTTP network therefore will not result in significant adverse aesthetic changes to public or private property . .__ (3) Whether there will be an unreasonable disruption or inconvenience to existing users, or any adverse effect on future use, of utility poles, public easements, and the public rights-of-way contrary to the intent of Section 767.5 of the Public Utilities Code. See Cal. Gov't Code ~ 53 066.3 (a) (3). There will not be any unreasonable disruptions or inconvenience to existing cable users, or any adverse effects in the areas noted above. Verizon is seeking a franchise from the City to provide cable services over Verizon's existing FTTP network, once completed. Because the facilities used to provide Verizon' s cable services will be the same facilities used to provide the other services that will be carried by Verizon's FTTP network, consistent with Section 767.5 ofthe Public Utilities Code, the grant of a cable franchise to Verizon will cause no additional disruptions or inconvenience to existing users, or any adverse effects on the future use of utility poles, public easements or public rights-of-way. (4) Whether the franchise applicant has the technical and financial ability to perform (see Cal. Gov't Code ~ 53066.3(a)(4)) giving due consideration to the experience, character, background and financial responsibility of the applicant, its management and owners. ,--, Verizon has demonstrated the financial, technical and legal qualifications and the ability to provide cable service in Lake Elsinore. ACEN~::i;o. ;~ _ REPORT TO CITY COUNCIL APRIL 11, 2006 PAGE 13 """ (5) Whether there is any impact on the franchising authority's interest in having universal cable service. See Cal. Gov't Code 9 53066.3(a)(5). The grant of a no-exclusive cable franchise to Verizon will have a positive impact on the City's interest in universal cable service. Providing the residents of Lake Elsinore a choice of providers will have a significant positive impact on the City's desire in promoting universal cable service. (6) Whether other societal interests generally considered by franchising authorities will be met. See Cal. Gov't Code ~ ~3066.3(a)(6). The grant of a non-exclusive franchise to Verizon will meet a variety of societal interests generally considered by franchising authorities. These include: the City's interest in enhancing civic awareness and community participation through the reservation of public educational, and governmental access channels on Verizon's system; the City's interest in community connectivity through Verizon's provision of cable service to City, school district and community facilities; the City's interest in generating additional revenue through the payment of annual franchise fees from Verizon; and the City's interest in continuing economic development in the community, as Verizon's state-of-the-art service offerings and network will add to the value and attractiveness oflocal residential and business development efforts. Finally, providing our residents with a choice of cable providers will also enhance societal interests in our community by bringing the benefits of competition in the provision of cable services to the City. ......, (7) Whether the operation of an additional cable system in the community is economically feasible. See Cal. Gov't Code ~ 53066.3 (a) (7). It is economically feasible for the community to support a competitive cable service provider. Lake Elsinore is a growing community in Riverside County. With a current population of about 37,000, the City is an attractive place to live with exciting recreational facilities and easy access to major transportation routes. Verizon intends to bring City residents a choice of cable service providers by offering a state-of-the-art, innovative video service product that will be feature rich and fully competitive with the existing cable offerings in the City. Verizon's services will be....., 'GENOA ITEM NO. 2.-~ f\ PAVE_/3 _oF57 -- ~ REPORT TO CITY COUNCIL APRIL 11,2006 PAGE 14 attractive to consumers, and thus will be economically feasible for Verizon to provide cable service in Lake Elsinore. In addition, the manner in which Verizon is installing the FTTP network over which its cable service will be delivered - as an upgrade to its existing telecommunications network that will also carry voice and data services - means that minimal additional capital expenditures are needed to allow Verizon to support its cable service offering. Given the growth in the community and the innovative nature of Verizon's cable service offering, staff believes that providing Lake Elsinore residents with a choice in cable service providers is economically feasible. (8) Such other additional matters, both procedural and substantive, as the franchising authority may determine to be relevant. See Cal. Gov't Code ~ 53 066.3 (a) (8). ",.-.. (a) PEG Requirements. See Cal. Gov't Code ~ 53066.3(d). California Government Code ~ 53066.3 also requires the City to ensure that competitive franchise agreements contain the same public, educational, and governmental (PEG) access requirements that are set forth in the existing franchise. The incumbent cable operator in Lake Elsinore provides one PEG channel. In contrast, the proposed Franchise Agreement requires Verizon to provide two PEG channels and carry the PEG programming on the incumbent provider's cable system as soon as Verizon is able to interconnect with the incumbent provider. The proposed cable Franchise Agreement's terms fully ensure that Verizon provides adequate PEG access channel capacity, facilities and financial support and that Verizon's obligations in this area are comparable to those contained in the City's existing cable franchise agreement. (b) Non-Discrimination Requirements. See Cal. Gov't Code ~ 53066.3(d); 47 u.s.e. 9 541 (a) (3). ".-- AGENDA ITEM NO. ~~ - IOlIM',.C J tt OF.. r::'/_ _.__ Ir~llJtf; _.-o_o'>,....o~ REPORT TO CITY COUNCIL APRIL 11, 2006 PAGE 15 '-' California Government Code ~ 53066.3(d) and Section 621 of the Communications Act, 47 U.S.C. ~ 541 (a)(3) contain certain non-discrimination requirements. Verizon's proposal complies with such requirements. (c) Rates to Subscribers. See 47 u.s.c. S 543; 47 C.P.R. S 76.900 et seq. As part of the 1996 amendments to the Communications Act, local communities must be certified by the FCC to regulate cable rates, may regulate only rates for the basic service tier and only for cable operators that are not subject to "effective competition" as defined under the Act. The City's authority to regulate rates of upper programming tiers (or so-called cable programming service tiers) sunset in 1999. 47 U.S.C. ~ 543(c)(4). As a new competitive entrant into the cable market, Verizon is, by definition, subject to "effective competition." See 47 U.S.C. ~ 543(1). As such, the City may not regulate Verizon's cable rates. Nonetheless, staff believes that V erizon' s cable service will provide features expected by the community and will be competitive with the existing cable offerings in the market. '-' (d) System Design and Technical and Peiformance Quality of the Equipment. Pursuant to federal law , franchising authorities may not regulate the "facilities, and equipment provided by a cable operator" except as specifically permitted by Title VI of the Communications Act. 47 U.S.C. ~ 544(a). Nonetheless, the City has an interest in understanding the system planned by Verizon to offer its cable service. Verizon therefore has set forth an explanation of its planned system architecture. See Proposed Franchise Agreement Article 5. (e) Willingness and Ability of the Applicant to Meet Construction Requirements and Abide by Franchise Limitations and Requirements. See; Cal. Pub. Uti!. Code S 7901; General Administrative Order 95; 47 U.S.c. S 552 (a) (2). Verizon's FTTP Network is being constructed as a Telecommunications Facility pursuant to Title II of the Communications Act, its Certificate of Public Convenience and necessity issued by the California Public Utilities Commission, Section 7901 ofthe """" AGENDA ITEM NO. 2..6 PACE /5 OF 57 - .~ REPORT TO CITY COUNCIL APRIL 11, 2006 PAGE 16 California Public Utilities Code and General Administrative Order 95. As such, Verizon has existing authority, apart from the proposed cable franchise, to construct the FTTP Network. Therefore, the proposed Franchise Agreement recognizes that the City does not, and cannot, regulate V erizon' s Telecommunications Facilities except to the extent specifically permitted by federal and state law. See Proposed Franchise Agreement Articles 2.2, 4. (j) Competitive Neutrality Between Proposed Verizon Cable Franchise Agreement and Incumbent Cable Franchise Agreement. The proposed Franchise Agreement contains a number of significant provisions (outlined above under "Major Provisions") that Staffbelieves are relevant to Verizon' s provision of cable services in the City. In addition, Staff believes that the material provisions of the proposed cable franchise agreement between Verizon and the City are ~ competitively neutral with the provisions contained in the incumbent franchise agreement, which is currently held by Comcast. Conclusion The foregoing represents an analysis of the propriety of granting Verizon a non- exclusive franchise in accordance with Gov't Code 9 53066.3. The examples provided in the analysis above do not exhaust all possible considerations that the Council may make. However, the analysis and examples provided do satisfy the mandate of California law. As such, it would be appropriate for the City Council to approve Ordinance _, granting Verizon a non-exclusive franchise. /"'""' ACENDA ITEM NO. '')..3 __ l'~f I fIJ OF 5l..~."= , ORDINANCE NO. L-IL7'1 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA GRANTING A NON- EXCLUSIVE FRANCHISE TO PROVIDE CABLE SERVICE TO VERIZON CALIFORNIA INC. '"""'" WHEREAS, WHEREAS, the City of Lake Elsinore is a "Franchising Authority" as defined by Title VI of the Communications Act (see 47 V.S.C. 9 522(10)) and is authorized to grant one or more nonexclusive cable franchises pursuant to California Government Code Section 53066 and Chapter 5.40 of the City of Lake Elsinore Municipal Code; WHEREAS, Verizon California Inc. ("Franchisee") is in the process of planning and installing a Fiber to the Premise Telecommunications Network ("FTTP Network") that will occupy the Public Rights-of- Way within the City of Lake Elsinore for the transmission of non-cable services pursuant to its status as a telecommunications carrier. as set forth in Title II of the Communications Act and under authority granted by the State of California; WHEREAS, the FTTP Network, once installed, will enable the provision of cable service to the residents of Lake Elsinore; WHEREAS, negotiations between the Franchising Authority and the Franchisee '"""'" have resulted in a franchise agreement, which agreement comports with the requirements of applicable law; WHEREAS, notice of public hearing before the City Council to consider the proposed cable franchise agreement was properly published in The Press-Enterprise on March 13, 2006 and March 20, 2006 in accordance with California Government Code Sections 6066 and 53066.3(a); WHEREAS, the Franchising Authority has reviewed the legal, technical and financial qualifications of the Franchisee to operate and provide cable service within the City and Franchising Authority's staffhas prepared a Staff Report and attached Executive Summary and Analysis dated March 28, 2006 (the "Staff Report") setting forth those qualifications, the future cable-related needs and interest of the City of Lake Elsinore and its residents, and examining each of the requirements and criteria set forth by federal, state and local law with respect to granting an additional cable television franchise, as well as any applicable provisions in existing franchises; and WHEREAS, after receiving the comments of interested parties at a public hearing affording due process to all parties, in deliberation of the entire record regarding this matter before it, including other pertinent information, and specifically considering each of the requirements and criteria enumerated in California Government Code Section ......., 53066.3(a), 47 V.S.C. Section 541(a), and all other applicable provisions of law, as well as any applicable provisions in existing franchises, the Franchising Authority determines AGENDA ITEM NO. ~ ..::s PAGE 17 OF 57 -- CITY COUNCIL ORDINANCE NO. Page 2 of 4 ---- that is in the public interest to approve the proposed cable television franchise agreement and authorize and direct the execution of the proposed Franchise Agreement; THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DOES ORDAIN AS FOLLOWS: SECTION 1. The City Council concludes that the cable-related needs and interests of the City of Lake Elsinore and the Franchisee's legal, technical, and financial qualifications to operate and provide cable service within the City are accurately identified by the attached Staff Report. The Staff Report, as well as the supporting evidence presented at the public hearing on March 28, 2006, is hereby adopted by the Franchising Authority in its entirety as its ascertainment of the cable-related needs and interests of the City, the Franchisee's qualifications to operate and provide cable service within the City, and the Franchisee's qualifications to operate and provide cable service within the City. The Staff Report and evidence also supports the Franchising Authority's consideration of each of the requirements and criteria enumerated in Government Code Section 53066.3(a), 47 D.S.C. Section 541(a), all other applicable provisions of law, as well as any applicable provision in existing franchises. ,-. SECTION 2. The Franchising Authority determines that it is in the public interest to grant a nonexclusive franchise to operate and provide cable service to Verizon California Inc. As evidence of its consideration of each of the factors enumerated in Government Code Section Section 53066.3(a), 47 D.S.C. Section 541(a)(3), all other applicable provisions of law, as well as any applicable provisions in existing franchises, the Franchising Authority hereby adopts the Staff Report attached Findings of Fact in support of this determination. SECTION 3. The Franchising Authority authorizes the grant of a nonexclusive franchise to the Franchisee to operate and provide cable service within the City. This authorization is made in accordance with the applicable provisions of California Government Code Section 53066.3 and Title VI of the Communications Act. A copy of the Franchise Agreement in the form set forth and presented to public hearing on March 28, 2006, is directed to be retained in the office of the City Clerk for the purpose of public inspection. SECTION 4. That certain Franchise Agreement in the form set forth and presented to the City Council at this public hearing is approved, and the Mayor is authorized and directed to execute that agreement on behalf of the Franchising Authority following its execution by the Franchisee. ,..-- SECTION 5. If any provision, clause, sentence or paragraph of this Ordinance or the application thereof to any person or circumstance shall be held invalid, such invalidity shall not affect the other provisions of this Ordinance and are hereby declared to be severable. Y)7 Jl,GENDA ITEM NO. ~J ~ PAGE I R OF 57 CITY COUNCIL ORDINANCE NO. Page 3 of 4 SECTION 6. This Ordinance shall take effect thirty (30) days after the date of its final passage. The City Clerk shall certify as to adoption of this Ordinance and cause this Ordinance to be published and posted in the manner required by law. ......" INTRODUCED AND APPROVED UPON FIRST READING this day of , 2006, upon the following roll call vote: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: ABSTAIN: COUNCILMEMBERS: PASSED, APPROVED AND ADOPTED UPON SECOND READING this day of , 2006, upon the following roll call vote: AYES: COUNCILMEMBERS: """"" NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: ABSTAIN: COUNCILMEMBERS: Robert E. Magee, Mayor City of Lake Elsinore ATTEST: Frederick Ray, City Clerk City of Lake Elsinore ......" AGENDA ITEM NO. PAGE /1 ?-3 OF 57 ,-.... ~ ~ CITY COUNCIL ORDINANCE NO. Page 4 of 4 APPROVED AS TO FORM: Barbara Zeid Leibold, City Attorney City of Lake Elsinore ACENDA ITEM NO. ~:3 P~E;lP _Of 5 7 --J~ CABLE FRANCHISE AGREEMENT BETWEEN THE CITY OF LAKE ELSINORE AND VERIZON CALIFORNIA INC. 2006 Lake Elsinore AGENDA ITEM NO. ?--3 PACE;)j OF:) 7 ......, ......, '-' .- ARTICLE 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. ,,-, 14. ~ TABLE OF CONTENTS PAGE DEFINITIONS................................................................................................................... 2 GRANT OF AUTHORITY; LIMITS AND RESERVATIONS ....................................... 7 PROVISION OF CABLE SERVICE ................................................................................9 SYSTEM OPERATION ... ................. .................... ........... ............. ............................. ..... 10 SYSTEM FACILITIES....... ............... ....... ..... .................................... ..... .... ............... ..... 11 PEG SERVICES ......................................................................................................... ..... 11 FRANCHISE FEES......................................................................................................... 13 CUSTOMER SERVICE. ............ ............ ........ ....... ......... ............................ ........ ............. 14 REPORTS AND RECORDS ................ ............ .............. ..... ....... ..... ....... ..... ............. ....... 14 INSURANCE AND INDEMNIFICATION ............................. ............... ............ ............ 15 TRANSFER OF FRANCHISE ........... ...... ...... .................. ............... ............. ..... ..... ......... 17 RENEWAL OF FRANCHISE............ ......... .................... .... ............. ....... ............ ............ 17 ENFORCEMENT AND TERMINATION OF FRANCHISE ........................................ 17 MISCELLANEOUS PROVISIONS... .................. ............... ................ ..... ............... ........ 21 EXHffiIT A - SERVICE AREAS ................................................................................... 25 EXHffiIT B - MUNICIPAL BUILDINGS TO BE PROVIDED FREE CABLE SERVICE......................................................................................................................... 26 EXHffiIT C - CONSUMER PROTECTION AND SERVICE STANDARDS .............28 Lake Elsinore A9ENDA ITEM NO. .?-.3 PAGE Z~ OF 5,7 ~ THIS CABLE FRANCHISE AGREEMENT (the "Franchise" or "Agreement") is entered into by and between the City of Lake Elsinore, a duly organized municipal corporation under the "'" applicable laws of the State of California (the Local Franchising Authority or "LF A") and V erizon California Inc., a corporation duly organized under the applicable laws of the State of California (the "Franchisee"). WHEREAS, LF A wishes to grant Franchisee a nonexclusive franchise to construct, install, maintain, extend and operate a Cable System (as hereinafter defined) and to offer Cable Services (as hereinafter defined) in the Franchise Area as designated in this Franchise; and WHEREAS, LF A is a local "franchising authority" in accordance with Title VI of the Communications Act (see 47 U.S.C. ~522(10)) and is authorized to grant one or more nonexclusive cable franchises pursuant to California Government Code ~ 53066 and Chapter 5.40 of the City of Lake Elsinore Municipal Code; and WHEREAS, Franchisee is in the process of installing a Fiber to the Premise Telecommunications Network ("FTTP Network") in the Franchise Area for the transmission of Non-Cable Services (as hereinafter defined) pursuant to authority granted by the State of California; and WHEREAS, the FTTP Network will occupy the Public Rights-of-Way within LF A, and Franchisee desires to use portions ofthe FTTP Network once installed to provide Cable Services in the Franchise Area; and WHEREAS, LF A has identified the future cable-related needs and interests of the community, has considered the financial, technical and legal qualifications of Franchisee, and has determined that Franchisee's plans for its Cable System are adequate, and has considered, at a duly noticed public hearing and in accordance with Section 53066.3, California Government Code: (a) Whether there will be significant positive or negative impacts on LFA; (b) Whether there will be an unreasonable adverse economic or aesthetic impact upon public or private property within the Franchise Area; ( c) Whether there will be an unreasonable disruption or inconvenience to existing users, or any adverse effect on future use, of utility poles, public easements, and the Public-Rights-of-Way contrary to the intent of Section 767.5 of the Public Utilities Code; (d) Whether the franchise applicant has the technical and financial ability to perform; (e) Whether there is any impact on the franchising authority's interest in having universal Cable Service; (f) Whether other societal interests generally considered by franchising authorities will be met; (g) Whether the operation of an additional cable television system in LF A is economically feasible; and (h) Such other additional matters, both procedural and substantive, as LF A may determine to be relevant; and WHEREAS, LF A has found Franchisee to be financially, technically and legally qualified to operate the Cable System; and ""'" WHEREAS, LF A has determined that, in accordance with the applicable provisions of Title V of the City of Lake Elsinore Municipal Code and Section 53066.3 of the California Government Code, the grant of a nonexclusive franchise to Franchisee is consistent with the public interest; and """" Lake Elsinore 1 'GENOA ITEM NO. ,~ffi~~ 2~ ;::LS OF5Z --a.l /*' WHEREAS, LF A and Franchisee have reached agreement on the terms and conditions set forth herein and the parties have agreed to be bound by those terms and conditions. NOW, THEREFORE, in consideration of LFA's grant of a franchise to Franchisee, Franchisee's promise to provide Cable Service to the residents of the Franchise/Service Area of LF A pursuant to and consistent with Title V of the City of Lake Elsinore Municipal Code, pursuant to the terms and conditions set forth herein, the promises and undertakings herein, and other good and valuable consideration, the receipt and the adequacy of which are hereby acknowledged, THE SIGNATORIES DO HEREBY AGREE AS FOLLOWS: 1. DEFINITIONS Except as otherwise provided herein, the definitions and word usages set forth in the Cable Law are incorporated herein and shall apply in this Agreement. In addition, the following definitions shall be controlling: 1.1. Access Channel: A video Channel, which Franchisee shall make available to LF A without charge for non-commercial public, educational, or governmental use for the transmission of Video Programming as directed by LF A. 1.2. Affiliate: Any Person who, directly or indirectly, owns or controls, is /'" owned or controlled by, or is under common ownership or control with, Franchisee. 1.3. Basic Service: Any service tier, which includes the retransmission oflocal television broadcast signals as well as the PEG Channels required by this Franchise. 1.4. Cable Law: Ordinance No. 840 titled "An Ordinance Of The City Council Of The City Of Lake Elsinore Amending Chapter 5.40 Relating To Community Antenna Television Systems" and Ordinance No. 855 titled "An Ordinance of the City of Lake Elsinore, California Providing For The Granting of Franchises For Community Antenna Television Systems; Providing Terms And Conditions For The Operation Of Such Community Antenna Television Systems And Fees Therefor," all as codified in Chapter 5.40 of the City of Lake Elsinore Municipal Code, to the extent authorized under and consistent with federal and state law. 1.5. Cable Service or Cable Services: Shall be defined herein as it is defined under Section 602 ofthe Communications Act, 47 V.S.C. 9 522(6). 1.6. Cable System or System: Shall be defined herein as it is defined under Section 602 of the Communications Act, 47 V.S.C. ~ 522(7), meaning Franchisee's facility, consisting of a set of closed transmission paths and associated signal generation, reception, and control equipment that is designed to provide Cable Service which includes video programming and which is provided to multiple Subscribers within the Service Area. The Cable System shall be limited to the optical spectrum wavelength(s), bandwidth or future technological capacity that ___ is used for the transmission of Cable Service directly to Subscribers within the Franchise/Service Lake Elsinore 2 AGENDA ITEM r:;:~ d1 PACE3- _Of - . - -- Area and shall not include the tangible network facilities of a common carrier subject in whole or in part to Title II of the Communications Act or of an Information Services provider. 1.7. Channel: Shall be defined herein as it is defined under Section 602 of the Communications Act, 47 U.S.c. ~ 522(4). ~ 1.8. Communications Act: The Communications Act of 1934, as amended. 1.9. Control: The ability to exercise de facto or de jure control over day-to- day policies and operations or the management of corporate affairs. 1.10. Educational Access Channel: An Access Channel available for the sole use of the local public schools and other public educational facilities in the Franchise Area as specified by LF A. Exhibit A. 1.11. Extended Service Area: The portion of the Franchise Area as outlined in 1.12. FCC: The United States Federal Communications Commission, or successor governmental entity thereto. 1.13. Force Majeure: Means delays due to acts of God, war, civil disturbances, fire, and incidences of terrorism, war or riots, labor strikes, floods, earthquakes, fire, explosions, epidemics, hurricanes, tornadoes, construction delays due to severe weather, and governmental actions and restrictions, which may arise due to the foregoing conditions or for other similar causes beyond the control of Franchisee. 1.14. Franchise Area: The incorporated area (entire existing territorial limits) of LF A and such additional areas as may be included in the corporate (territorial) limits of LF A during the term ofthis Franchise. 1.15. Franchisee: Verizon California Inc., and its lawful and permitted successors, assigns and transferees. ...""" 1.16. Government Access Channel: An Access Channel available for the use solely ofLF A and other local governmental entities located in the Franchise Area. 1.17. Gross Revenue: All revenue that Franchisee and its Affiliates (to the extent that either is acting as a provider of Cable Service authorized by this Franchise) derives from the operation of Franchisee's Cable System to provide Cable Service in the Service Area, including but not limited to all Subscriber and customer revenues earned or accrued net of bad debts including revenue for: (i) Basic Service; (ii) all fees charged to any Subscribers for any and all Cable Service provided by Franchisee, including without limitation Cable Service related program guides, the installation, disconnection or reconnection of Cable Service; revenues from late or delinquent charge fees; Cable Service related service or repair calls; the provision of converters, remote controls, additional outlets and/or other Cable Service related Subscriber premises equipment, whether by lease or otherwise (except sale); (iii) revenues from the sale or lease of Access Channel(s) or channel capacity; (iv) advertising revenues (as described below);....."" Lake Elsinore 3 ACEN~~~'~. Z_?g2 ,-.... ,- ,-.... and (v) revenues from home shopping channel providers. Gross Revenue also includes franchise fees imposed on Franchisee by LF A that are passed through from Franchisee as a line item paid by Subscribers. Revenue of an Affiliate derived from the Affiliate's provision of Cable Services shall be Gross Revenue to the extent the treatment of such revenue as revenue of the Affiliate and not of Franchisee has the intentional or unintentional effect of evading the payment of Franchise fees that would otherwise be payable to LF A hereunder. Advertising commissions paid to independent third parties shall not be netted against advertising revenue included in Gross Revenue. In no event shall revenue of an Mfiliate be Gross Revenue of Franchisee if such revenue is subject to franchise fees to be paid to LF A for Cable Services. Advertising revenue is based upon the ratio of the number of Subscribers as of the last day of the period for which Gross Revenue is being calculated to the number of Franchisee's subscribers within all areas covered by the particular advertising source as of the last day of such period, e.g., Franchisee sells two ads: Ad "A" is broadcast nationwide; Ad "B" is broadcast only within California. Franchisee has 1 00 Subscribers in LF A, 500 subscribers in California, and 1000 subscribers nationwide. Gross Revenue as to LFA from Ad "A" is 10% of Franchisee's revenue therefrom. Gross Revenue as to LFA from Ad "B" is 20% of Franchisee's revenue therefrom. Gross Revenue shall not include: 1.17.1. Revenues received by any Affiliate or other Person in exchange for supplying goods or services used by Franchisee to provide Cable Service over the Cable System; 1.17.2. Bad debts written off by Franchisee in the normal course of its business, provided, however, that bad debt recoveries shall be included in Gross Revenue during the period collected; 1.17.3. Refunds, rebates or discounts made to Subscribers or other third parties; 1.17.4. Any revenues classified, in whole or in part, as Non-Cable Services revenue under federal or state law including, without limitation, revenue received from Telecommunications Services; revenue received from Information Services, including, without limitation, Internet Access service, electronic mail service, electronic bulletin board service, or similar online computer services; and any other revenues attributed by Franchisee to Non-Cable Services in accordance with FCC or state public utility regulatory commission rules, regulations, standards or orders; 1.17.5. Any revenue of Franchisee or any other Person which is received directly from the sale of merchandise through any Cable Service distributed over the Cable System, notwithstanding that portion of such revenue which represents or can be attributed to a Subscriber fee or a payment for the use of the Cable System for the sale of such merchandise, which portion shall be included in Gross Revenue; 1.17.6. The sale of Cable Services on the Cable System for resale in which the purchaser is required to collect cable franchise fees from purchaser's customer; Lake Elsinore 4 P.CENDA1TEMNO. r2~ - PAGE aiR.. _OF 51 -- - 1.17.7. The sale of Cable Services to customers, which are exempt, as required or allowed by LF A including, without limitation, the provision of Cable Services to public institutions as required or permitted herein; ......., 1.17.8. Any tax of general applicability imposed upon Franchisee or upon Subscribers by a city, state, federal or any other governmental entity and required to be collected by Franchisee and remitted to the taxing entity (including, but not limited to, sales/use tax, gross receipts tax, excise tax, utility users tax, public service tax, communication taxes and non-cable franchise fees); 1.17.9. Any foregone revenue which Franchisee chooses not to receive in exchange for its provision of free or reduced cost cable or other communications services to any Person, including without limitation, employees of Franchisee and public institutions or other institutions designated in the Franchise; provided, however, that such foregone revenue which Franchisee chooses not to receive in exchange for trades, barters, services or other items of value shall be included in Gross Revenue; 1.17.10. Sales of capital assets or sales of surplus equipment; 1.17.11. Reimbursement by programmers of marketing costs incurred by Franchisee for the introduction and promotion of programming; and 1.17.12. Directory or Internet advertising revenue including, but not limited to, yellow page, white page, banner advertisement and electronic publishing. 1.17.13. Any fees or charges collected from Subscribers or other third parties for the Annual PEG Grant. 1.18. Information Services: Shall be defined herein as it IS defined under Section 3 of the Communications Act, 47 V.S.C. ~153(20). ~ Exhibit A. 1.19. Initial Service Area: The portion of the Franchise Area as outlined in 1.20. Internet Access: Dial-up or broadband access servIce that enables Subscribers to access the Internet. 1.21. Local Franchise Authority (LFA): The City of Lake Elsinore, California or the lawful successor, transferee, or assignee thereof. 1.22. Non-Cable Services: Any service that does not constitute the provision of Video Programming directly to multiple Subscribers in the Franchise Area including, but not limited to, Information Services and Telecommunications Services. 1.23. Normal Business Hours: Those hours during which most similar businesses in the community are open to serve customers. In all cases, "normal business hours" must include some evening hours at least one night per week and/or some weekend hours. ~ Lake Elsinore 5 ACENDA ITEM No._~3 PAGE..:J:l~ OF;57 _ _._._-----'1 ~ 1.24. Normal Operating Conditions: Those service conditions which are within the control of Franchisee. Those conditions which are not within the control of Franchisee include, but are not limited to, natural disasters, civil disturbances, power outages, telephone network outages, and severe or unusual weather conditions. Those conditions which are within the control of Franchisee include, but are not limited to, special promotions, pay-per-view events, rate increases, regular peak or seasonal demand periods, and maintenance or rebuild of the Cable System. See 47 C.F.R. ~ 76.309(c)(4)(ii). 1.25. PEG Access Channels: Public Access Channel(s), Educational Access Channel(s) and Governmental Access Channel(s) authorized pursuant to this Agreement in the Franchise Area. 1.26. Person: An individual, partnership, association, joint stock company, trust, corporation, or governmental entity. 1.27. Public Access Channel: An Access Channel available for the use solely by the residents and nonprofit organizations in the Franchise Area. 1.28. Public Rights-of-Way: The surface and the area across, in, over, along, upon and below the surface of the public streets, roads, bridges, sidewalks, lanes, courts, ways, alleys, and boulevards, including, public utility easements and public lands and waterways used as Public Rights-of-Way, as the same now or may thereafter exist, which are under the jurisdiction or control of LF A. Public Rights-of-Way do not include the airwaves above a right- ,""""""" of-way with regard to cellular or other nonwire communications or broadcast services. 1.29. Service Area: All portions of the Franchise Area where Cable Service is being offered, including the Initial Service Area, the Extended Service Area, and any Additional Service Areas, as set forth in Exhibit A. 1.30. Service Date: The date that the Franchisee first provides Cable Service on a commercial basis directly to multiple Subscribers in the Franchise Area. The Franchisee shall memorialize the Service Date by notifying the LF A in writing of the same, which notification shall become a part of this Franchise. 1.31. Service Interruption: The loss of picture or sound on one or more cable channels. 1.32. Subscriber: A Person who lawfully receives Cable Service of the Cable System with Franchisee's express permission. 1.33. Telecommunications Facilities: Franchisee's existing Telecommunications Services and Information Services facilities and its FTTP Network facilities. 1.34. Telecommunication Services: Shall be defined herein as it is defined under Section 3 of the Communications Act, 47 V.S.C. ~ 153(46). ,"-"" 1.35. Title II: Title II of the Communications Act. Lake Elsinore 6 AGENDA ITEM NO. ~~ PACE 'tR OF 57 --- 1.36. Title VI: Title VI of the Communications Act. 1.37. Transfer of the Franchise: .~ 1.37.1. Any transaction in which: 1.37.1.1. an ownership or other interest in Franchisee is transferred, directly or indirectly, from one Person or group of Persons to another Person or group of Persons, so that control of Franchisee is transferred; or 1.37.1.2. the rights held by Franchisee under the Franchise are transferred or assigned to another Person or group of Persons. 1.37.2. However, notwithstanding Sub-subsections 1.37.1.1 and 1.37.1.2 above, a Transfer of the Franchise shall not include: transfer of an ownership or other interest in Franchisee to the parent of Franchisee or to another Affiliate majority owned by Franchisee or any of Franchisee's Affiliates or Franchisee's parent; transfer of an interest in the Franchise or the rights held by Franchisee under the Franchise to the parent of Franchisee or to another Affiliate majority owned by Franchisee, its parent or an Affiliate; any action which is the result of a merger of the direct or indirect parent of Franchisee; or any action which is the result of a merger of another Affiliate majority owned by Franchisee, its parent or an Affiliate. 1.38. Video Programming: Shall be defined herein as it is defined under Section 602 ofthe Communications Act, 47 D.S.C. ~ 522(20). ~ 2. GRANT OF AUTHORITY: LIMITS AND RESERVATIONS 2.1. Grant of Authority: Subject to the terms and conditions of this Agreement and the Cable Law, LF A hereby grants Franchisee the right to own, construct, operate and maintain a Cable System along the Public Rights-of-Way within the Franchise Area, in order to provide Cable Service. No privilege or power of eminent domain is bestowed by this grant; nor is such a privilege or power bestowed by this Agreement. Franchisee shall comply with all federal and state laws applicable to the Cable System. 2.2. LFA Does Not Regulate Telecommunications: As of the Effective Date (hereinafter defined) of this Agreement, LFA's regulatory authority under Title VI of the Communications Act does not extend to the construction, installation, maintenance or operation of Franchisee's FTTP Network to the extent the FTTP Network is being constructed, installed, maintained and operated for the purpose of upgrading and/or extending Verizon's existing Telecommunications Facilities for the provision of Non-Cable Services. 2.3. Term: Franchisee has thirty (30) days to accept this Franchise following its approval by LFA's governing authority authorized to grant franchises. The effective date of this Agreement shall be the date of last signature ("Effective Date"). The term of this Franchise shall be fifteen (15) years from the Effective Date unless the Franchise is earlier revoked as provided herein. ~ Lake Elsinore 7 AGENDA ITEM NO. PACE C) Cf ,~~ - OF ~-~Z--~,- ,.- 2.4. Grant Not Exclusive: This Franchise and the right it grants to use and occupy the Public Rights-of-Way to provide Cable Services shall not be exclusive, and LF A reserves the right to grant other franchises for similar uses or for other uses of the Public Rights- of-Way, or any portions thereof, to any Person, or to make any such use themselves, at any time during the term of this Franchise. Any such rights which are granted shall not adversely impact the authority as granted under this Franchise and shall not interfere with existing facilities of the Cable System or Franchisee's FTTP Network. 2.5. Franchise Subject to Federal and State Law: Notwithstanding any provision to the contrary herein, this Franchise is subject to and shall be governed by all applicable provisions of state and federal law as they may be amended, including but not limited to the Communications Act. 2.6. No Waiver: 2.6.1. The failure of LF A on one or more occasions to exercise a right or to require compliance or performance under this Franchise, the Cable Law or any other applicable law shall not be deemed to constitute a waiver of such right or a waiver of compliance or performance by LF A, nor to excuse Franchisee from complying or performing, unless such right or such compliance or performance has been specifically waived in writing. 2.6.2. The failure of Franchisee on one or more occasions to exercise a right under this Franchise or applicable law, or to require performance under this Franchise, shall ,.- not be deemed to constitute a waiver of such right or of performance of this Agreement, nor shall it excuse LF A from performance, unless such right or performance has been specifically waived in writing. 2.7. Construction of Agreement: 2.7.1. The provisions of this Franchise shall be liberally construed to effectuate their objectives. In the event of a conflict between the Cable Law and this Agreement, this Agreement shall prevail. 2.7.2. The following Cable Law provlSlons not addressed by this Agreement do not apply to this Franchise: Sections 5.40.132 and 5.40.133 of Ordinance No. 840, Sections leG), I(H), 1(1), 5(B), 6(C), 6(D), 6(E), 6(F), 6(H), 6(K), 6(L), 6(N), 6(0), 6(P), 6(Q), 6(R), 6(T), 7(A), 8, 9, 10, 11, 12, 13, 15(B), 15(C), 16(G), 16(J), 16(K), 16(L), 16(M), 16(0) and 17 of Ordinance No. 855, and the equivalent sections of Chapter 5.40 of the City of Lake Elsinore Municipal Code. Ordinance No. 498 does not apply to this Franchise. 2.7.3. Nothing herein shall be construed to limit the scope or applicability of Section 625 Communications Act, 47 V.S.C. S 545. 2.7.4. Should any change to federal, state or local law, rules, or regulations have the lawful effect of materially altering the terms and conditions of this Franchise, then the parties shall modify this Franchise to the mutual satisfaction of both parties to "...... ameliorate the negative effects on Franchisee of the material alteration. If the parties cannot reach agreement on the above-referenced modification to the Franchise, then Franchisee may Lake Elsinore 8 ':CENDt~IYEf\il i~C, . ?,~. .~ r'IQ,:rl~ -31l_'tA~ 7 .. _-, terminate this Agreement without further obligation to LFA or, at Franchisee's option, the parties agree to submit the matter to binding arbitration in accordance with the commercial arbitration rules of the American Arbitration Association. 2.7.5. LFA and Franchisee each acknowledge that they have received independent legal advice in entering into this Agreement. In the event that a dispute arises over the meaning of application of any term(s) of this Agreement, such term(s) shall not be construed by reference to any doctrine calling for ambiguities to be construed against the drafter of the Agreement. 2.8. Police Powers: Nothing in the Franchise shall be construed to prohibit the reasonable, necessary and lawful exercise ofLFA's police powers. However, if the reasonable, necessary and lawful exercise of LF A's police power results in any material alteration of the terms and conditions of this Franchise, then the parties shall modify this Franchise to the mutual satisfaction of both parties to ameliorate the negative effects on Franchisee of the material alteration. If the parties cannot reach agreement on the above-referenced modification to the Franchise, then Franchisee may terminate this Agreement without further obligation to LF A or, at Franchisee's option, the parties agree to submit the matter to binding arbitration in accordance with the commercial arbitration rules ofthe American Arbitration Association. 3. PROVISION OF CABLE SERVICE 3.1. Service Area: 3.1.1. Initial Service Area: Franchisee shall offer Cable Service to a significant numbers of Subscribers in residential areas of the Initial Service Area and may make Cable Service available to businesses in the Initial Service Area, within eighteen (18) months of the Effective Date of this Franchise, and shall offer Cable Service to all residential areas in the Initial Service Area within two (2) years of the Service Date of the Franchise, except: (A) for periods of Force Majeure; (B) for periods of delay caused by LFA; (C) for periods of delay resulting from Franchisee's inability to obtain authority to access rights-of-way in the Service Area; (D) in areas where developments or buildings are subject to claimed exclusive arrangements with other providers; (E) in developments or buildings that Franchisee cannot access under reasonable terms and conditions after good faith negotiation, as determined by Franchisee; and (F) in developments or buildings that Franchisee is unable to provide Cable Service for technical reasons or which require non-standard facilities which are not available on a commercially reasonable basis; and (G) in areas where the occupied residential household density does not meet the density requirement set forth in Sub-section 3.1.1.1. 3.1.1.1. Density Requirement: Franchisee shall make Cable Services available to residential dwelling units in all areas of the Service Area where the average density is equal to or greater than 30 occupied residential dwelling units per mile as measured in strand footage from the nearest technically feasible point on the active FTTP Network trunk or feeder line. Should, through new construction, an area within the Initial Service Area or Extended Service Area meet the density requirements after the time stated for providing Cable Service as set forth in Subsections 3.1.1 and 3.1.2 respectively, Franchisee shall provide Cable ....", "-' "-' Lake Elsinore 9 AGENDA ITEM NO. .23 PAGE 31 OF 57 - ~ Service to such area within six (6) months of receiving notice that the density requirements have been met. 3.1.2. Extended Service Area: Within 60 months following the Service Date, Franchisee shall begin providing Cable Service in the Extended Service Area subject to the conditions of Subsection 3.1.1 above and the other terms set forth herein. 3.1.3. Additional Service Areas: The parties agree that if any land is annexed by the LF A during the term of this Agreement, such annexed areas ("Additional Service Areas") shall become part of the Franchise Area and Franchisee shall be required to extend Cable Service within a reasonable time to such annexed area (subject to the exceptions in Section 3.1.1. above), provided that such annexed area: (a) is contiguous to the LFA, (b) is within Franchisee's Title II service territory, and (c) is served by the video-enabled FTTP Network. 3.2. Availability of Cable Service: Franchisee shall make Cable Service available to all residential dwelling units and may make Cable Service available to businesses within the Service Area in conformance with Section 3.1 and Franchisee shall not discriminate between or among any individuals in the availability of Cable Service. In the areas in which Franchisee shall provide Cable Service, Franchisee shall be required to connect, at Franchisee's expense, all residential dwelling units that are within one hundred fifty (150) feet of trunk or feeder lines not otherwise already served by Franchisee's FTTP Network. Franchisee shall be allowed to recover, from a Subscriber that requests such connection, actual costs incurred for residential dwelling unit connections that exceed 150 feet and actual costs incurred to connect any non-residential dwelling unit Subscriber. ,""'" 3.3. Cable Service to Public Buildings: Franchisee shall provide without charge within the Service Area one service outlet activated for Basic Service to each fire station, public school, police station, public library and such other buildings used for municipal purposes, as designated by LF A and provided in Exhibit B; provided, however, that if it is necessary to extend Franchisee's trunk or feeder lines more than one hundred fifty (150) feet solely to provide service to any such school or public building, then LF A shall have the option either of paying Franchisee's direct costs for such extension in excess of one hundred fifty (150) feet, or of releasing Franchisee from the obligation to provide service to such building. Furthermore, Franchisee shall be permitted to recover, from any public building owner entitled to free service, the direct cost of installing, when requested to do so, more than one outlet, or concealed inside wiring, or a service outlet requiring more than one hundred fifty (150) feet of drop cable; provided, however, that Franchisee shall not charge for the provision of Basic Service to the additional service outlets once installed. 4. SYSTEM OPERATION The parties recognize that Franchisee's FTTP Network is being constructed and will be operated and maintained as an upgrade to and/or extension of its existing Telecommunications Facilities. The jurisdiction of LF A over such Telecommunications Facilities is restricted by federal and state law, and LFA does not assert jurisdiction over Franchisee's FTTP Network in contravention of those limitations. ~ Lake Elsinore 10 ACENDA ITEM NO. 2a :?AGE 31- OF ~7 -- ~ 5. SYSTEM FACILITIES 5.1. System Characteristics: Franchisee's Cable System shall meet or exceed the following requirements: ......, 50 MHz- 860 MHz. 5.1.1. The System shall be designed with an initial analog passband of 5.1.2. The Cable System shall be designed to be an active two-way plant utilizing the return bandwidth to permit such services as impulse pay-per-view and other interactive services. 5.2. Interconnection: Franchisee shall design its Cable System so that it may be interconnected with public, educational and governmental channels of other cable systems in the Franchise Area, along with programming originated by LF A and other PEG Access Channel users. Interconnection of systems may be made by direct cable connection, microwave link, satellite, or other appropriate methods. 5.3. Emergency Alert System: 5.3.1. Franchisee shall comply with the Emergency Alert System ("EAS") requirements of the FCC in order that emergency messages may be distributed over the System. 5.3.2. LFA shall permit only appropriately trained and authorized Persons to operate the EAS equipment and shall take reasonable precautions to prevent any use of the Cable System in any manner that results in inappropriate use thereof, or any loss or damage to the Cable System. Except to the extent expressly prohibited by law, LF A shall hold Franchisee, its employees, officers and assigns harmless from any claims arising out of use of the EAS, including, but not limited to, reasonable attorneys' fees and costs. ....." 6. PEG SERVICES 6.1. PEG Set Aside: 6.1.1. In order to ensure universal availability of public, educational and government programming, Franchisee shall provide on the Basic Service Tier the following PEG Access Channels: one (1) dedicated Government Access Channel and one (1) dedicated Educational Access Channel; provided, however, Franchisee shall not be obligated to provide such Educational Access Channel until the incumbent cable provider operating within the Franchise Area similarly provides two or more PEG Access Channels. 6.1.2. LF A shall notify Franchisee of the programming to be carried on the PEG Access Channels set aside by Franchisee. LF A authorizes Franchisee to transmit PEG programming within and outside the local franchise area. Thereafter, Franchisee shall assign the PEG Access Channels on its channel line-up as set forth in such notice, to the extent such channel assignments do not interfere with any pre-existing channels. If a PEG Access Channel ,.." Lake Elsinore 11 AGENDA ITEM NO. ?-3 PAOE_ t3? OF 57 ~ ._____ provided under this Article is .not being utilized by LFA, Franchisee may submit a written request to LF A to utilize such PEG Access Channel until such time as LF A elects to utilize the PEG Channel for its intended purpose. Franchisee shall rededicate said PEG Access Channel( s) for PEG Access Channel purposes within six (6) months of receipt of a written request from LFA; provided, however, such six (6) month period does not apply ifLFA's failure to utilize the PEG Access Channel(s) is due to ongoing interconnection negotiations described in subsections 6.1.3 and 6.1.4. 6.1.3. Franchisee shall use reasonable efforts to interconnect all PEG Channels of its Cable System with the existing cable operator in the LF A. Prior to the Service Date, Franchisee shall initiate interconnection negotiations with the existing cable operator(s) to cablecast public, educational and governmental access programming consistent with this Franchise. Interconnection may be accomplished by direct cable, microwave link, satellite or other reasonable method of connection. Franchisee shall negotiate in good faith with existing cable operator(s) respecting reasonable, mutually convenient, cost-effective, and technically viable interconnection points, methods, terms and conditions. LF A shall require the existing cable operator(s) to provide such interconnection to Franchisee on reasonable terms and conditions. Franchisee and the existing cable operator(s) shall negotiate the precise terms and conditions of an interconnection agreement. LF A shall use its best efforts to facilitate these negotiations. .-.' 6.1.4. If Franchisee is unable to reach agreement with the existing local cable operator within ninety (90) days after requesting interconnection in writing, LF A shall assist in mediating such dispute. If no agreement is reached within an additional ninety (90) days, Franchisee agrees to provide, at its own cost and expense, a connection at the Lake Elsinore Cultural Center, including the equipment and cabling necessary to carry on Franchisee's Cable System the programming originating at such location in accordance with the technical standards of this Agreement. In the event Franchisee connects at the Lake Elsinore Cultural Center, it will be under no obligation to carry PEG programming originating on the cable system of the existing cable operator. 6.2. PEG Grant 6.2.1. Franchisee shall provide an annual grant to LF A to be used in support of the production of local PEG programming (the "Annual PEG Grant"). Such grant shall be used by LF A for PEG access equipment, including, but not limited to, studio and portable production equipment, editing equipment and program playback equipment, or for renovation or construction of PEG access facilities, or for transport facilities to Franchisee's location. 6.2.2. The Annual PEG Grant provided by Franchisee hereunder shall be the sum of $0.65 per month, per Basic Service Subscriber in the Service Area. The Annual PEG Grant payment, along with a brief summary of the Subscriber information upon which it is based, shall be delivered to LF A quarterly, concurrent with the Franchise fee payment during the Franchise Term. Calculation of the Annual PEG Grant will commence with the first calendar r-- month during which Franchisee obtains its first Subscriber in the Service Area. Lake Elsinore 12 AGENDA ITEM NO. '~3 ~Aa ,-~tf OF 51 _ 6.2.3. Upon written request from Franchisee, LF A shall provide Franchisee with a complete accounting annually of the distribution of funds granted pursuant to this Section 6.2. .....", 6.3. All local producers and users of any of the PEG facilities or PEG Access Channels shall agree in writing to authorize Franchisee to transmit programming consistent with this Agreement and to defend and hold harmless Franchisee and LF A from any and all liability or other injury, including the reasonable cost of defending claims or litigation, arising from or in connection with claims for failure to comply with applicable federal laws, rules, regulations or other requirements of local, state or federal authorities; for claims of libel, slander, invasion of privacy, or the infringement of common law or statutory copyright; for unauthorized use of any trademark, trade name or service mark; for breach of contractual or other obligations owing to third parties by the producer or user; and for any other injury or damage in law or equity, which result from the use of a PEG facility or Access Channel. 6.4. To the extent permitted by federal law, Franchisee shall be allowed but is not required to recover the costs of an Annual PEG Grant or any other costs arising from the provision of PEG services from Subscribers and to include such costs as a separately billed line item on each Subscriber's bill. Without limiting the forgoing, if allowed under state and federal laws, Franchisee may externalize, line-item, or otherwise pass-through interconnection costs to Subscribers. 7. FRANCHISE FEES 7.1. Payment to LFA: Franchisee shall pay to LFA a Franchise fee of five percent (5%) of annual Gross Revenue. In accordance with Title VI of the Communications Act, the twelve (12) month period applicable under the Franchise for the computation ofthe Franchise fee shall be a calendar year. Such payments shall be made no later than sixty (60) days following the end of each calendar quarter. Franchisee shall be allowed to submit or correct any payments that were incorrectly omitted, and shall be refunded any payments that were incorrectly submitted, in connection with the quarterly Franchise fee remittances within 90 days following the close ofthe calendar year for which such payments were applicable. .....", 7 .2. Supporting Information: Each Franchise fee payment shall be accompanied by a brief report prepared by a representative of Franchisee showing the basis for the computation. 7.3. Limitation on Franchise Fee Actions: The period of limitation for recovery of any Franchise fee or other fees payable hereunder shall be four (4) years from the date on which payment by Franchisee is due. During any such four (4) year period, the period of limitations for recovery of any Franchise fee shall be tolled on the date that LF A provides written notice to Franchisee that a Franchise fee compliance review has been commenced and the actual review of records is initiated within ninety (90) days of such notice and completed by LF A asserting a claim as to any unpaid fees due hereunder within twelve (12) months from the date of the production of all the records reasonably and in good faith requested. The parties intend that tolling of the four (4) year period of limitations is to allow LF A to complete its review in a .....", Lake Elsinore 13 ACENDA lTEM NO. ~~ PAGE 35"" OF 51 - - /"'"' timely and efficient manner. The parties do not intend to provide LF A with the ability to unreasonably toll the period oflimitations for recovery of any Franchise fee or other fees payable hereunder. 7.4. Bundled Services: If Cable Services subject to the Franchise fee required under this Article 7 are provided to Subscribers in conjunction with Non-Cable Services, the Franchise fee shall be applied only to the value of the Cable Services, as reflected on the books and records of Franchisee in accordance with FCC or state public utility regulatory commission rules, regulations, standards or orders. Franchisee shall not allocate revenue between Cable Services and Non-Cable Services for the purpose or with the intent of evading or materially reducing Franchisee's Franchise fee obligations to the LFA. Tariffed telecommunication services that cannot be discounted by state and/or federal regulatory rules are excluded from the allocation basis for the bundle discount. 8. CUSTOMER SERVICE Consumer Protection And Service Standards are set forth in Exhibit C, which shall be binding unless amended by written consent of the parties. 9. REPORTS AND RECORDS 9.1. Open Books and Records: Upon reasonable written notice to Franchisee /"""' and with no less than thirty (30) business days written notice to Franchisee, LF A shall have the right to inspect Franchisee's books and records pertaining to Franchisee's provision of Cable Service in the Franchise Area at any time during Normal Business Hours and on a nondisruptive basis, as are reasonably necessary to ensure compliance with the terms of this Franchise. Such notice shall specifically reference the section or subsection of the Franchise which is under review, so that Franchisee may organize the necessary books and records for appropriate access by LF A. Franchisee shall not be required to maintain any books and records for Franchise compliance purposes longer than four (4) years. Notwithstanding anything to the contrary set forth herein, Franchisee shall not be required to disclose information that it reasonably deems to be proprietary or confidential in nature, nor disclose any of its or an Affiliate's books and records not relating to the provision of Cable Service in the Service Area. LF A agrees to treat any information disclosed by Franchisee as confidential and only to disclose it to employees, representatives, and agents thereofthat have a need to know, or in order to enforce the provisions hereof. Franchisee shall not be required to provide Subscriber information in violation of Section 631 of the Communications Act, 47 D.S.C. ~551. 9.2. Records Required: Franchisee shall at all times maintain: 9.2.1. Records of all written complaints for a period of four (4) years after receipt by Franchisee. The term "complaint" as used herein refers to complaints about any aspect of the Cable System or Franchisee's cable operations, including, without limitation, complaints about employee courtesy. Complaints recorded will not be limited to complaints requiring an employee service call; --- Lake Elsinore 14 AGENDA ITEM NO.~ '3 PACE~OFS1 - 9.2.2. Records of outages for a period of four (4) years after occurrence, indicating date, duration, area, and the number of Subscribers affected, type of outage, and cause; "'-'" 9.2.3. Records of service calls for repair and maintenance for a period of four (4) years after resolution by Franchisee, indicating the date and time service was required, the date of acknowledgment and date and time service was scheduled (if it was scheduled), and the date and time service was provided, and (if different) the date and time the problem was resolved; 9.2.4. Records of installationlreconnection and requests for service extension for a period of four (4) years after the request was fulfilled by Franchisee, indicating the date of request, date of acknowledgment, and the date and time service was extended; and 9.2.5. A public file showing the area of coverage for the provisioning of Cable Services and estimated timetable to commence providing Cable Service. 10. INSURANCE AND INDEMNIFICATION 10.1. Insurance: 10.1.1. Franchisee shall maintain in full force and effect, at its own cost and expense, during the Franchise Term, the following insurance coverage: 10.1.1.1. Commercial General Liability Insurance in the amount of two million dollars ($2,000,000) combined single limit for property damage and bodily injury. Such insurance shall cover the construction, operation and maintenance of the Cable System, and the conduct of Franchisee's Cable Service business in LFA. "'-'" 1 0.1.1.2. Automobile Liability Insurance in the amount of one million dollars ($1,000,000) combined single limit for bodily injury and property damage coverage. 10.1.1.3. requirements of the State of California. 1 0.1.1.4. Employers' Liability Insurance in the following amounts: (A) Bodily Injury by Accident: $100,000; and (B) Bodily Injury by Disease: $100,000 employee limit; $500,000 policy limit. Workers' Compensation Insurance meeting all legal 10.1.2. LF A shall be designated as an additional insured under each of the insurance policies required in this Article 10 except Worker's Compensation Insurance and Employer's Liability Insurance. 10.1.3. Franchisee shall not cancel any required insurance policy or reduce any coverage amount below the respective amount stated in this Section 10 without "'-'" Lake Elsinore 15 AGENDA ITEM NO. ~3 - 'ME3:l~<~OF< S?~ r---- submitting documentation to LF A verifying that Franchisee has obtained alternative insurance in conformance with this Agreement. 10.1.4. Each of the required insurance policies shall be with sureties qualified to do business in the State of California, with an A- or better rating for financial condition and financial performance by Best's Key Rating Guide, Property/Casualty Edition. 10.1.5. Upon written request, Franchisee shall deliver to LF A Certificates of Insurance showing evidence of the required coverage. 10.2. Indemnification: 10.2.1. Franchisee agrees to indemnify, save and hold harmless, and defend LF A, its officers, agents, boards and employees, from and against any liability for damages and for any liability or claims resulting from tangible property damage or bodily injury (including accidental death), to the extent proximately caused by Franchisee's negligent construction, operation, or maintenance of its Cable System, provided that LF A shall give Franchisee written notice of its obligation to indemnify LF A within ten (10) days of receipt of a claim or action pursuant to this subsection, or twenty (20) days provided that Franchisee is not prejudiced by the timing of such notice. Notwithstanding the foregoing, Franchisee shall not indemnify LFA, for any damages, liability or claims resulting from the willful misconduct or negligence of LF A, its officers, agents, employees, attorneys, consultants, independent contractors or third parties or for any activity or function conducted by any Person other than .~ Franchisee in connection with PEG Access, use of the EAS, or the distribution of any Cable Service over the Cable System. 10.2.2. With respect to Franchisee's indemnity obligations set forth in Subsection 10.2.1, Franchisee shall provide the defense of any claims brought against LF A by selecting counsel of Franchisee's choice to defend the claim, subject to the consent of LFA, which shall not unreasonably be withheld. Nothing herein shall be deemed to prevent LF A from cooperating with Franchisee and participating in the defense of any litigation by its own counsel at its own cost and expense, provided however, that after consultation with LFA, Franchisee shall have the right to defend, settle or compromise any claim or action arising hereunder, and Franchisee shall have the authority to decide the appropriateness and the amount of any such settlement. In the event that the terms of any such proposed settlement includes the release of LF A and LF A does not consent to the terms of any such settlement or compromise, Franchisee shall not settle the claim or action but its obligation to indemnify LF A shall in no event exceed the amount of such settlement. 10.2.3. LFA shall hold Franchisee harmless and shall be responsible for damages, liability or claims resulting from willful misconduct or negligence of LF A. 10.2.4. LFA shall be responsible for its own acts of willful misconduct or negligence, or breach of obligation committed by LF A for which LF A is legally responsible, subject to any and all defenses and limitations of liability provided by law. Franchisee shall not be required to indemnify LF A for acts of LF A which constitute willful misconduct or ..r-- Lake Elsinore 16 ACiENDA ITEM NO. ~3 PAOE3 K OF ~~ 7 -- negligence, on the part of LF A, its officers, employees, agents, attorneys, consultants, independent contractors or third parties. ~ 11. TRANSFER OF FRANCHISE Subject to Section 617 of the Communications Act, 47 D.S.C. ~ 537, no Transfer of the Franchise shall occur without the prior consent of LF A, provided that such consent shall not be unreasonably withheld, delayed or conditioned. No such consent shall be required, however, for a transfer in trust, by mortgage, by other hypothecation, by assignment of any rights, title, or interest of Franchisee in the Franchise or Cable System in order to secure indebtedness, or otherwise excluded under Section 1.37 above. 12. RENEWAL OF FRANCHISE 12.1. LFA and Franchisee agree that any proceedings undertaken by LFA that relate to the renewal of this Franchise shall be governed by and comply with the provisions of Section 626 ofthe Communications Act, 47 D.S.C. ~ 546. 12.2. In addition to the procedures set forth in said Section 626 of the Communications Act, LF A agrees to notify Franchisee of all of its assessments regarding the identity of future cable-related community needs and interests, as well as the past performance of Franchisee under the then current Franchise term. LF A further agrees that such assessments shall be provided to Franchisee promptly so that Franchisee has adequate time to submit a proposal under Section 626 and complete renewal of the Franchise prior to expiration of its term. "'" 12.3. Notwithstanding anything to the contrary set forth herein, Franchisee and LF A agree that at any time during the term of the then current Franchise, while affording the public appropriate notice and opportunity to comment, LF A and Franchisee may agree to undertake and finalize informal negotiations regarding renewal of the then current Franchise and LF A may grant a renewal thereof 12.4. Franchisee and LFA consider the terms set forth in this Article 12 to be consistent with the express provisions of Section 626, of the Communications Act, 47 D.S.C. 9546. 13. ENFORCEMENT AND TERMINATION OF FRANCHISE 13.1. Security Fund. Violations. LF A may assess amounts pursuant to the procedures set forth in this Section 13.1 as an alternative remedy to commencing the remedial and termination provisions set forth in Sections 13.2 through 13.6, inclusive, of this Agreement. 13.1.1. Creation of Security Fund. Within sixty (60) days following the Effective Date of this Agreement, Franchisee shall establish and provide to LF A a security fund ("Security Fund") as security for the faithful performance by Franchisee of all material provisions of this Agreement. The Security Fund shall be in the amount of Six Thousand Dollars ~ Lake Elsinore 17 "'GENDA ITEM NO. :;2 3 pAGE .3 9. of~_il==- ,....- ($6,000) and shall be in the form of an irrevocable letter of credit, with all interest distributable to Franchisee. 13.1.2. Amount of Security Fund. The Security Fund shall be maintained at the Six Thousand Dollar ($6,000) level throughout the term of this Agreement, provided that Franchisee shall not be required to maintain the Six Thousand Dollar ($6,000) level once LF A has begun to assess amounts pursuant to Section 13.1.3 below; provided further that at intervals no more often than each three (3) years, LF A shall have the right to require that this amount be increased to reflect changes in the Los Angeles Metropolitan Area Consumer Price Index during the prior three (3) year period. 13.1.3. Procedure for Assessing Security Fund. 13.1.3.1. If Franchisee fails to perform in a timely manner any material obligation required by this Franchise, LF A may assess an amount from the Security Fund as set forth below. Such assessment may be withdrawn from the Security Fund, and shall not constitute a waiver by LF A of any other right or remedy it may have under this Franchise or applicable law except as set forth in this Agreement, including without limitation its right to recover from Franchisee such additional damages, losses, costs and expenses, as may have been suffered or incurred by LF A by reason of or arising out of such breach of this Franchise. 13.1.3.2. Prior to assessing the Security Fund, LFA shall first notify Franchisee of the violation in writing by personal delivery or registered or certified mail, .~ and demand correction or commencement of correction within a reasonable time, which shall not be less than fifteen (15) days in the case of the failure of Franchisee to pay any sum or other amount due LF A under this Agreement, and thirty (30) days in all other cases. If Franchisee fails to demonstrate that a violation has not occurred, or to correct the violation within the time prescribed, or if Franchisee fails to commence corrective action within the time prescribed and diligently remedy such violation thereafter, or if the violation is not correctable, Franchisee shall then be given written notice from LF A finding Franchisee in violation of this Agreement. Said notice shall specify the violations alleged to have occurred. 13.1.3.3. After the time period set forth in Section 13.1.3.2 herein, in the event that LF A finds that a material violation exists and that Franchisee has not corrected the same in a satisfactory manner or has not diligently commenced correction of such violation, LF A may request the City Council to assess an amount from the Security Fund, of up to One Hundred Dollars ($100) per day. Damages shall be calculated as accruing from the date of the violation. 13.1.3.4. If the City Council elects to assess an amount from the Security Fund, pursuant to the provisions of this Franchise Agreement, then such election shall constitute LFA's exclusive remedy for a period of sixty (60) days. Thereafter, LFA may pursue any available remedy, including those set forth in Sections 13.2 through 13.6, inclusive, below. ,,-.... 13.1.3.5. If a dispute arises out of or relates to this Franchise resulting in LFA's assessment from the Security Fund of any amounts pursuant to this Section Lake Elsinore 18 AGENDA ITEM NO. '~~ PACE 40 OF 51 ~ - 13.1, and if the dispute cannot be settled through good faith negotiations, then the parties agree first to try in good faith to settle the dispute by mediation administered by the American Arbitration Association under its Commercial Mediation Procedures before resorting to arbitration. Any dispute that arises out of or relates to this Franchise resulting in the imposition of any amount as set forth in this Section 13.1 that the parties cannot resolve in mediation shall be settled by arbitration administered by the American Arbitration Association in accordance with its Commercial Arbitration Rules, and judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. "'" 13.1.4. Franchisee Representations. If LFA's action or taking is found to be improper by any court or agency of competent jurisdiction, Franchisee shall be entitled to a refund ofthe funds plus interest and/or any other award such court or agency shall make. 13.1.5. LF A Representations. Notwithstanding any provision in this Franchise to the contrary, in the event that LF A believes that Franchisee has not complied with the terms of the Franchise, LF A agrees that it shall informally discuss such noncompliance with Franchisee. If these discussions do not lead to resolution of said noncompliance, then LF A shall notify Franchisee in writing of the exact nature of the alleged noncompliance prior to withdrawing any funds and/or liquidated damage amounts from the Security Fund. LF A shall not assess any amounts from the Security Fund if Franchisee provides written notice within the notice periods set forth in 13.1.3.2 that Franchisee is initiating the dispute resolution process set forth in 13.1.3.5. 13.2. Notice of Violations Not Subject to Security Fund: In the event that LFA believes that Franchisee has not complied with the terms of the Franchise, and LF A declines to ......, assess amounts from the Security Fund, LF A shall first informally discuss the matter with Franchisee prior to invoking its remedies as set forth in Sections 13.3. to 13.6., inclusive, herein. If these discussions do not lead to resolution of the problem, then LF A shall notify Franchisee in writing of the exact nature of the alleged noncompliance. 13.3. Franchisee's Right to Cure or Respond: For violations not subject to the Security Fund, Franchisee shall have thirty (30) days from receipt of the written notice described in Section 13.2 to: (i) respond to LFA, if Franchisee contests (in whole or in part) the assertion of noncompliance; (ii) cure such default; or (iii) in the event that, by the nature of default, such default cannot be cured within the thirty (30) day period, initiate reasonable steps to remedy such default and notify LF A of the steps being taken and the projected date that they will be completed. 13.4. Hearing: In the event that Franchisee fails to respond to the written notice described in Section 13.2, or in the event that the alleged default is not remedied within thirty (30) days or the date projected pursuant to Section 13.3(iii) above, if it intends to continue its investigation into the default, then LF A shall schedule a hearing. LF A shall provide Franchisee at least thirty (30) business days prior written notice of such hearing, which will specify the time, place and purpose of such hearing, and provide Franchisee the opportunity to be heard. ....., Lake Elsinore 19 A.GENDA ITEM NO. 2-3 PNJE-1L-Of 51 _ ~ 13.5. Enforcement: Subject to applicable federal and state law, in the event LF A, after the hearing set Section 13.4, determines that Franchisee is in default of any provision of the Franchise, LF A may: 13.5.1. Seek specific performance of any provision, which reasonably lends itselfto such remedy, as an alternative to damages; or equitable relief; or 13.5.2. Commence an action at law for monetary damages or seek other 13.5.3. In the case of a substantial material default of a material provision ofthe Franchise, seek to revoke the Franchise in accordance with Section 13.6. 13.6. Revocation: Should LF A seek to revoke the Franchise after following the procedures set forth in Sections 13.2 through 13.5 above, LFA shall give written notice to Franchisee of its intent. The notice shall set forth the exact nature of the noncompliance. Franchisee shall have ninety (90) days from such notice to object in writing and to state its reasons for such objection. In the event LF A has not received a satisfactory response from Franchisee, it may then seek termination of the Franchise at a public hearing. LF A shall cause to be served upon Franchisee, at least thirty (30) days prior to such public hearing, a written notice specifying the time and place of such hearing and stating its intent to revoke the Franchise. 13.6.1. At the designated hearing, Franchisee shall be provided a fair .~ opportunity for full participation, including the right to be represented by legal counsel, to introduce relevant evidence, to require the production of evidence, to compel the relevant testimony of the officials, agents, employees or consultants of LF A, to compel the testimony of other persons as permitted by law, and to question and/or cross examine witnesses. A complete verbatim record and transcript shall be made of such hearing. 13.6.2. Following the public hearing, Franchisee shall be provided up to thirty (30) days to submit its proposed findings and conclusions in writing and thereafter LF A shall determine (i) whether an event of default has occurred; (ii) whether such event of default is excusable; and (iii) whether such event of default has been cured or will be cured by Franchisee. LF A shall also determine whether to revoke the Franchise based on the information presented, or, where applicable, grant additional time to Franchisee to effect any cure. If LF A determines that the Franchise shall be revoked, LF A shall promptly provide Franchisee with a written decision setting forth its reasoning. Franchisee may appeal such determination of LF A to an appropriate court, which shall have the power to review the administrative record as supplemented in good faith by the parties de novo. Franchisee shall be entitled to such relief as the court finds appropriate. Such appeal must be taken within sixty (60) days of Franchisee's receipt of the determination of the franchising authority. 13.6.3. LFA may, at its sole discretion, take any lawful action which it deems appropriate to enforce LFA's rights under the Franchise in lieu of revocation of the Franchise. ",..--. 13.7. Franchisee Termination: During the term, Franchisee shall have the right to terminate this Franchise and all obligations hereunder if Franchisee does not in good faith Lake Elsinore 20 AGENDA ITEM NO. ?-3 PAGE tJ-Z- OF 51 - believe it has achieved a commercially reasonable level of Subscriber penetration on its Cable System. Franchisee may consider Subscriber penetration levels outside the Franchise Area in this determination. Notice to terminate under this Section 13.7 shall be given to the City in writing, with such termination to take effect no sooner than two hundred and ten (210) calendar days after giving such notice. Franchisee shall also be required to give its then current Subscribers not less than one hundred and eighty (180) calendar days prior written notice of its intent to cease Cable Service operations. ""-' 14. MISCELLANEOUS PROVISIONS 14.1. Actions of Parties: In any action by LFA or Franchisee that is mandated or permitted under the terms hereof, such party shall act in a reasonable, expeditious, and timely manner. Furthermore, in any instance where approval or consent is required under the terms hereof, such approval or consent shall not be unreasonably withheld, delayed or conditioned. 14.2. Binding Acceptance: This Agreement shall bind and benefit the parties hereto and their respective heirs, beneficiaries, administrators,. executors, receivers, trustees, successors and assigns, and the promises and obligations herein shall survive the expiration date hereof. 14.3. Preemption: In the event that federal or state law, rules, or regulations preempt a provision or limit the enforceability of a provision of this Agreement, the provision shall be read to be preempted to the extent, and for the time, but only to the extent and for the time, required by law. In the event such federal or state law, rule or regulation is subsequently repealed, rescinded, amended or otherwise changed so that the provision hereof that had been preempted is no longer preempted, such provision shall thereupon return to full force and effect, and shall thereafter be binding on the parties hereto, without the requirement of further action on the part ofLFA. ..., 14.4. Force Majeure: Franchisee shall not be held in default under, or in noncompliance with, the provisions of the Franchise, nor suffer any enforcement or penalty relating to noncompliance or default, where such noncompliance or alleged defaults occurred or were caused by a Force Majeure. 14.4.1. Furthermore, the parties hereby agree that it is not LFA's intention to subject Franchisee to penalties, fines, forfeitures or revocation of the Franchise for violations of the Franchise where the violation was a good faith error that resulted in no or minimal negative impact on Subscribers, or where strict performance would result in practical difficulties and hardship being placed upon Franchisee which outweigh the benefit to be derived by LF A and/or Subscribers. 14.5. Notices: Unless otherwise expressly stated herein, notices required under the Franchise shall be mailed first class, postage prepaid, to the addressees below. Each party may change its designee by providing written notice to the other party. 14.5.1. Notices to Franchisee shall be mailed to: ~ Lake Elsinore 21 AGENDA'TEM NO. ?-3 PAGE 'F? OF '51 -- - "-...,, V erizon California Inc. Attn: Tim McCallion, President - Pacific Region 112 Lakeview Canyon Road Thousand Oaks, CA 91362 14.5.2. with a copy to: Mr. Jack H White Senior Vice President & General Counsel- Verizon Telecom One Verizon Way Room VC43EOlO Basking Ridge, NJ 07920-1097 14.5.3. Notices to LFA shall be mailed to: City of Lake Elsinore Attn: City Manager 130 South Main Street Lake Elsinore, CA 92530 14.6. Entire Agreement: This Franchise and the Exhibits hereto constitute the entire agreement between Franchisee and LF A. ,,-..., 14.7. Amendments.. Amendments to this Franchise shall be mutually agreed to in writing by the parties. 14.8. Captions: The captions and headings of articles and sections throughout this Agreement are intended solely to facilitate reading and reference to the sections and provisions of this Agreement. Such captions shall not affect the meaning or interpretation of this Agreement. 14.9. Severability: If any section, subsection, sentence, paragraph, term, or proVIsIon hereof is determined to be illegal, invalid, or unconstitutional, by any court of competent jurisdiction or by any state or federal regulatory authority having jurisdiction thereof, such determination shall have no effect on the validity of any other section, subsection, sentence, paragraph, term or provision hereof, all of which will remain in full force and effect for the term of the Franchise. 14.10. Recitals: The recitals set forth in this Agreement are incorporated into the body of this Agreement as if they had been originally set forth herein. 14.11. Franchisee's FTTP Network: LF A and Franchisee recognize and agree that due to the nature of Franchisee's FTTP Network, certain provisions ofthe Cable Law are not applicable to Franchisee, including but not limited to Sections 6(C), 6(D), 6(E), 6(F), 6(K), 6(L), 6(N), 6(0), 6(P), 6(Q), 6(R), 8, 9,10,11,12, 16(G), 16(J), 16(K), and 17 of Ordinance No. 855. ,,-..., 14.12. Modification: This Franchise shall not be modified except by written instrument executed by both parties. Lake Elsinore 22 AGENDA ITEM NO. '2-:S PACE # OF '$] 14.13. FTTP Network Transfer Prohibition: Under no circumstance including, without limitation, upon expiration, revocation, termination, denial of renewal of the Franchise or any other action to forbid or disallow Franchisee from providing Cable Services, shall Franchisee or its assignees be required to sell any right, title, interest, use or control of any portion of Franchisee's FTTP Network including, without limitation the Cable System and any spectrum capacity used for Cable Service or otherwise, to LF A or any third party. Franchisee shall not be required to remove the FTTP Network(s) or to relocate the FTTP Network(s) as a result of revocation, expiration, termination, denial of renewal or any other action to forbid or disallow Franchisee from providing Cable Services. This provision is not intended to contravene leased access requirements under Title VI or PEG requirements set out in this Agreement. '--' 14.14. Acceptance Fee: Franchisee shall pay LFA ten thousand dollars ($10,000) for cost associated with the grant of this Franchise within thirty (30) days following the Effective Date. SIGNATURE PAGE FOLLOWS ~ .~ Lake Elsinore 23 ACEND.. A. ITE~. .~~ fACE m= ='51 _.._---~ ~ ~ ~ /"'"' AGREED TO AS OF THE DATE OF LAST SIGNATURE BELOW: CITY OF LAKE ELSINORE APPROVED AS TO FORM: By: Robert E. Magee, Mayor Date: VERIZON CALIFORNIA INC. By: Tim McCallion, President-Pacific Region Date: EXHffiITS Exhibit A: Initial and Extended Service Areas Exhibit B: Municipal Buildings to be Provided Free Cable Service Exhibit C: Consumer Protection And Service Standards Lake Elsinore ACENDAITEM NO. 23 PAOE lj(p OF 51 24 EXHIBIT A '-' SERVICE AREAS The Initial Service Area and Extended Service Areas are depicted below. "-' ~ Lake Elsinore 25 AGENDA ITEM tIW. . ~3 ~~. ~Z..OF S1 .-. - /"" EXHIBIT B MUNICIPAL BUILDINGS TO BE PROVIDED FREE CABLE SERVICE City and Public Buildings /"" Facility Address 333 Limited Avenue Lake Elsinore Police Department Lake Elsinore, CA 410 W. Graham Avenue Lake Elsinore Station #10 Lake Elsinore, CA 29405 Grand Avenue Lake Elsinore McVicker #85 Lake Elsinore, CA 22770 Railroad Canyon Road Lake Elsinore Station #94 RR Canyon Lake Elsinore, CA 600 W. Graham Avenue Lake Elsinore Library Lake Elsinore, CA 130 S. Main Street Lake Elsinore City Hall Lake Elsinore, CA 521 N. Langstaff Lake Elsinore City Yard Lake Elsinore, CA 420 E. Lakeshore Drive Lake Elsinore Senior Center Lake Elsinore, CA 500 Diamond Drive Lake Elsinore Stadium Lake Elsinore, CA 183 N. Main Street Lake Elsinore Cultural Center Lake Elsinore, CA Public Schools /"" Public School Address Cottonwood Canyon Elementary 32100 Lost Road School Lake Elsinore, CA 92532 512 West Sumner Street Elsinore Elementary School Lake Elsinore, CA 92530 Machado Elementary School 15150 Joy Street Lake Elsinore, CA 92530 Railroad Canyon Elementary School 1300 Mill Street Lake Elsinore, CA 92530 Rice Canyon Elementary School 29535 Westwind Drive Lake Elsinore, CA 92530 Tuscany Hills Elementary School 123 Ponte Russo I Lake Elsinore, CA 92532 Lake Elsinore 26 AGENDA ITEM NO. ~ = PAVE if( OF 1 Public School Address Withrow Elementary School 30100 Adelo Street Lake Elsinore, CA 92530 Canyon Lake Middle School 33005 Canyon Hill Road Lake Elsinore, CA 92532 Elsinore Middle School 1203 W. Graham Lake Elsinore, CA 92532 Terra Cotta Middle School 29291 Lake Street Lake Elsinore, CA 92530 Lakeside High School 33693 Riverside Drive Lake Elsinore, CA 92530 Temescal Canyon High School 28755 EI Toro Road Lake Elsinore, CA 92532 Ortega Continuation High School 520 Chaney Street Lake Elsinore, CA 92530 Alternative Education Center 1405 Education Way Gordon Keifer IS Lake Elsinore, CA 92530 ......" Future City Facilities Franchisee shall provide, without charge, one service outlet activated for Basic Service to municipal buildings that are planned or under construction, if and when the incumbent cable provider operating within the Franchise Area provides a similar service to such locations. ......" ,...." Lake Elsinore 27 AGENDA ITEM NO. 2-~ PACE, ci? Of 31 = /""' EXHIBIT C CONSUMER PROTECTION AND SERVICE STANDARDS Franchisee's obligations concerning Consumer Protection And Service Standards shall include the following, which shall be binding unless amended by written consent of the parties. These standards shall, starting six months after the Service Date, apply to the Franchisee to the extent it is providing Cable Services over the Cable System in the Franchise area. SECTION 1: DEFINITIONS (a) Resvond: Franchisee's investigation of a Service Interruption by receiving a Subscriber call and opening a trouble ticket, if required. (b) Significant Outage: A significant outage of the Cable Service shall mean any Service Interruption lasting at least four (4) continuous hours that affects at least ten percent (10%) ofthe Subscribers in the Service Area. (c) Service Call: The action taken by the Franchisee to correct a Service Interruption the effect of which is limited to an individual Subscriber. (d) Standard Installation: Installations where the subscriber is within one hundred twenty five (125) feet onrunk or feeder lines. ~ SECTION 2: TELEPHONE AVAILABILITY (a) Franchisee shall maintain a toll-free number to receive all calls and inquiries from Subscribers in the Franchise Area and/or LF A residents regarding Cable Service. Franchisee representatives trained and qualified to answer questions related to Cable Service in the Service Area must be available to receive reports of Service Interruptions twenty-four (24) hours a day, seven (7) days a week, and other inquiries at least forty-five (45) hours per week, including some evening and weekend hours. Franchisee representatives shall identify themselves by name when answering this number. (b) The Franchisee's telephone numbers shall be listed, with appropriate description (e.g. administration, customer service, billing, repair, etc.), in the directory published by the local telephone company or companies serving the Service Area, beginning with the next publication cycle after acceptance of this Franchise by Franchisee. (c) Franchisee may use an Automated Response Unit ("ARU") or a Voice Response Unit ("VRU") to distribute calls. If a foreign language routing option is provided, and the Subscriber does not enter an option, the menu will default to the first tier menu of English options. /""' After the first tier menu (not including a foreign language rollout) has run through three times, if customers do not select any option, the ARU or VRU will forward the call to a queue Lake Elsinore 28 ACENDA ITEM NO. ;.~ PACE ~ {jJ} OF .1 ~ for a live representative. Franchisee may reasonably substitute this requirement with another method of handling calls from customers who do not have touch-tone telephones. ....." (d) Under Normal Operating Conditions, calls received by the Franchisee shall be answered within thirty (30) seconds. Franchisee shall meet this standard for ninety percent (90%) ofthe calls it receives at all call centers receiving calls from Subscribers, as measured on a cumulative quarterly calendar basis. Measurement of this standard shall include all calls received by the Franchisee at all call centers receiving calls from Subscribers, whether they are answered by a live representative, by an automated attendant, or abandoned after 30 seconds of call waiting. (e) Under Normal Operating Conditions, callers to the Franchisee shall receive a busy signal no more than three (3%) percent of the time during any calendar quarter. (f) At the Franchisee's option, the measurements above may be changed from calendar quarters to billing or accounting quarters. Franchisee shall notify LF A of such a change at least thirty (30) days in advance of any implementation. SECTION 3: INSTALLATIONS AND SERVICE APPOINTMENTS (a) All installations will be in accordance with FCC rules, including but not limited to, appropriate grounding, connection of equipment to ensure reception of Cable Service, and the provision of required consumer information and literature to adequately inform the Subscriber in the utilization of Franchisee-supplied equipment and Cable Service. ....." (b) The Standard Installation shall be performed within seven (7) business days after the placement of the Optical Network Terminal ("ONT") on the customer's premises or within seven (7) business days after an order is placed if the ONT is already installed on the customer's premIses. Franchisee shall meet this standard for ninety-five percent (95%) of the Standard Installations it performs, as measured on a calendar quarter basis, excluding customer requests for connection later than seven (7) days after ONT placement or later than seven (7) days after an order is placed if the ONT is already installed on the customer's premises. (c) At the Franchisee's option, the measurements and reporting of above may be changed from calendar quarters to billing or accounting quarters. The Franchisee shall notify the LF A of such a change not less than thirty (30) days in advance. (d) The Franchisee will offer Subscribers "appointment window" alternatives for arrivals to perform installations, Service Calls and other activities of a maximum four (4) hours scheduled time block during appropriate daylight available hours, usually beginning at 8:00 AM unless it is deemed appropriate to begin earlier by location exception. At the Franchisee's discretion, the Franchisee may offer Subscribers appointment arrival times other than these four (4) hour time blocks, if agreeable to the Subscriber. These hour restrictions do not apply to weekends. ....." Lake Elsinore 29 ACENDA ITEM NO. 23 PACE 5l OF ~.1 ,-.. SECTION 4: SERVICE INTERRUPTIONS AND OUTAGES (a) The Franchisee shall promptly notify the LFA of any Significant Outage of the Cable Service. (b) The Franchisee shall exercise commercially reasonable efforts to limit any Significant Outage for the purpose of maintaining, repairing, or constructing the Cable System. Except in an emergency or other situation necessitating a more expedited or alternative notification procedure, the Franchisee may schedule a Significant Outage for a period of more than four (4) hours during any twenty-four (24) hour period only after the LFA and each affected Subscriber in the Service Area have been given fifteen (15) days prior notice of the proposed Significant Outage. (c) Franchisee representatives who are capable of responding to Service Interruptions must be available to Respond twenty-four (24) hours a day, seven (7) days a week. (d) Under Normal Operating Conditions, the Franchisee must Respond to a call from a Subscriber regarding a Service Interruption or other service problems within the following time frames: (1) Within twenty-four (24) hours, including weekends, of receiving subscriber calls respecting Service Interruptions in the Service Area. (2) The Franchisee must begin actions to correct all other Cable Service problems ,-.. the next business day after notification by the Subscriber or the LF A of a Cable Service problem. (e) Under Normal Operating Conditions, the Franchisee shall provide a credit upon Subscriber request when all Channels received by that Subscriber are out of service for a period of four (4) consecutive hours or more. The credit shall equal, at a minimum, a proportionate amount of the affected Subscriber(s) current monthly bill. In order to qualify for the credit, the Subscriber must promptly report the problem and allow Franchisee to verify the problem if requested by the Franchisee. If Subscriber availability is required for repair, a credit will not be provided for such time, if any, that the Subscriber is not reasonably available. (f) Under Normal Operating Conditions, if a Significant Outage affects all Video Programming Cable Services for more than twenty-four (24) consecutive hours, the Franchisee shall issue an automatic credit to the affected Subscribers in the amount equal to their monthly recurring charges for the proportionate time the Cable Service was out, or a credit to the affected subscribers in the amount equal to the charge for the basic plus enhanced basic level of service for the proportionate time the Cable Service was out, whichever is technically feasible or, ifboth are technically feasible, as determined by Franchisee provided such determination is non- discriminatory. Such credit shall be reflected on Subscriber billing statements within the next available billing cycle following the outage. (g) With respect to service issues concerning cable services provided to LFA facilities, Franchisee shall Respond to all inquiries from the LFA within four (4) hours and shall commence necessary repairs within twenty-four (24) hours under Normal Operating Conditions. ~ Lake Elsinore 30 AGENDA ITEM NO. '].3 PACE ? z..-- OF 5? _ If such repairs cannot be completed within twenty-four (24) hours, the Franchisee shall notify the LFA in writing as to the reason(s) for the delay and provide an estimated time of repair. ~ SECTION 5: CUSTOMER COMPLAINTS Under Normal Operating Conditions, the Franchisee shall investigate Subscriber complaints referred by the LF A within seventy-two (72) hours. The Franchisee shall notify the LF A of those matters that necessitate an excess of seventy-two (72) hours to resolve, but those matters must be resolved within fifteen (15) days of the initial complaint. The LF A may require reasonable documentation to be provided by the Franchisee to substantiate the request for additional time to resolve the problem. For purposes of this Section, "resolve" means that the Franchisee shall perform those actions, which, in the normal course of business, are necessary to investigate the Customer's complaint and advise the Customer of the results of that investigation. SECTION 6: BILLING A. Subscriber bills must be itemized to describe Cable Services purchased by Subscribers and related equipment charges. Bills shall clearly delineate activity during the billing period, including optional charges, rebates, credits, and aggregate late charges. Franchisee shall, without limitation as to additional line items, be allowed to itemize as separate line items, Franchise fees, taxes and/or other governmentally imposed fees. The Franchisee shall maintain records ofthe date and place of mailing of bills. B. Every Subscriber with a current account balance sending payment directly to ~ Franchisee shall be given at least twenty (20) days from the date statements are mailed to the Subscriber until the payment due date. C. A specific due date shall be listed on the bill of every Subscriber whose account is current. Delinquent accounts may receive a bill which lists the due date as upon receipt; however, the current portion of that bill shall not be considered past due except in accordance with Subsection 6.B. above. D. Any Subscriber who, in good faith, disputes all or part of any bill shall have the option of withholding the disputed amount without disconnect or late fee being assessed until the dispute is resolved provided that: (1) The Subscriber pays all undisputed charges; (2) The Subscriber provides notification of the dispute to Franchisee within five (5) days prior to the due date; and (3) The Subscriber cooperates In determining the accuracy and/or appropriateness of the charges in dispute. (4) It shall be within the Franchisee's sole discretion to determine when the dispute has been resolved. ""-"" Lake Elsinore 31 AGENDA ITEM NO. '2-3 !~~~ 53 ~.OF 57==- /"" E. Under Normal Operating Conditions, the Franchisee shall initiate investigation and resolution of all billing complaints received from Subscribers within five (5) business days of receipt of the complaint. Final resolution shall not be unreasonably delayed. F. The Franchisee shall provide a telephone number and address on the bill for Subscribers to contact the Franchisee. G. The Franchisee shall forward a copy of any Cable Service related billing inserts or other mailing sent to Subscribers to the LF A upon request. H. The Franchisee shall provide all Subscribers with the option of paying for Cable Service by check or an automatic payment option where the amount of the bill is automatically deducted from a checking account designated by the Subscriber. Franchisee may in the future, at its discretion, permit payment by using a major credit card on a pre authorized basis. Based on credit history, at the option ofthe Franchisee, the payment alternative may be limited. I. LFA hereby requests that Franchisee omit publishing information specified in 47 C.F.R. ~ 76.952 from Subscriber bills. SECTION 7: DEPOSITS. REFUNDS AND CREDITS /"" A. The Franchisee may require refundable deposits from Subscribers with 1) a poor credit or poor payment history, 2) who refuse to provide credit history information to the Franchisee, or 3) who rent Subscriber equipment from the Franchisee, so long as such deposits are applied on a non-discriminatory basis. The deposit the Franchisee may charge Subscribers with poor credit or poor payment history or who refuse to provide credit information may not exceed an amount equal to an average Subscriber's monthly charge multiplied by six (6). The maximum deposit the Franchisee may charge for Subscriber equipment is the cost of the equipment which the Franchisee would need to purchase to replace the equipment rented to the Subscriber. B. The Franchisee shall refund or credit the Subscriber for the amount of the deposit collected for equipment, which is unrelated to poor credit or poor payment history, after one year and provided the Subscriber has demonstrated good payment history during this period. The Franchisee shall pay interest on other deposits if required law. C. Under Normal Operating Conditions, refund checks will be issued within next available billing cycle following the resolution of the event giving rise to the refund, (e.g. equipment return and final bill payment). D. Credits for Cable Service will be issued no later than the Subscriber's next available billing cycle, following the determination that a credit is warranted, and the credit is approved and processed. Such approval and processing shall not be unreasonably delayed. --- Lake Elsinore 32 'r:ENDA ITEM NO.2~ PAGE 7'1 OF '77 _ E. Bills shall be considered paid when appropriate payment is received by the Franchisee or its authorized agent. Appropriate time considerations shall be included in the Franchisee's collection procedures to assure that payments due have been received before late notices or termination notices are sent. ,......, SECTION 8: RATES. FEES AND CHARGES A. The Franchisee shall not, except to the extent expressly permitted by law, impose any fee or charge for Service Calls to a Subscriber's premises to perform any repair or maintenance work related to Franchisee equipment necessary to receive Cable Service, except where such problem is caused by a negligent or wrongful act of the Subscriber (including, but not limited to a situation in which the Subscriber reconnects Franchisee equipment incorrectly) or by the failure of the Subscriber to take reasonable precautions to protect the Franchisee's equipment (for example, a dog chew). B. The Franchisee shall provide reasonable notice to Subscribers of the possible assessment of a late fee on bills or by separate notice. SECTION 9: DISCONNECTION /DENIAL OF SERVICE A. Cable Service terminated for nonpayment of delinquent accounts in error must be restored without charge within twenty-four (24) hours of notice. If a Subscriber was billed for the period during which Cable Service was terminated in error, a credit shall be issued to the Subscriber if the Service Interruption was reported by the Subscriber. ....., B. Nothing in these standards shall limit the right of the Franchisee to deny Cable Service for non-payment of previously provided Cable Services, refusal to pay any required deposit, theft of Cable Service, damage to the Franchisee's equipment, abusive and/or threatening behavior toward the Franchisee's employees or representatives, or refusal to provide credit history information or refusal to allow the Franchisee to validate the identity, credit history and credit worthiness via an external credit agency. C. Charges for cable service will be discontinued at the time of the requested termination of service by the subscriber, except equipment charges may by applied until equipment has been returned. No period of notice prior to requested termination of service can be required of Subscribers by the Franchisee. No charge shall be imposed upon the Subscriber for or related to total disconnection of Cable Service or for any Cable Service delivered after the effective date of the disconnect request, unless there is a delay in returning Franchisee equipment or early termination charges apply pursuant to the Subscriber's service contract. If the Subscriber fails to specify an effective date for disconnection, the Subscriber shall not be responsible for Cable Services received after the day following the date the disconnect request is received by the Franchisee. For purposes of this subsection, the term "disconnect" shall include Subscribers who elect to cease receiving Cable Service from the Franchisee and to receive Cable Service or other multi-channel video service from another Person or entity. 33 ~;tt~DA ITEM NO. 2.3 PACE 5~ Of 51 ....., Lake Elsinore .- ,~ SECTION 10: COMMUNICATIONS WITH SUBSCRIBERS A. All Franchisee personnel, contractors and subcontractors contacting Subscribers or potential Subscribers outside the office of the Franchisee shall wear a clearly visible identification card bearing their name and photograph. The Franchisee shall make reasonable effort to account for all identification cards at all times. In addition, all Franchisee representatives shall wear appropriate clothing while working at a Subscriber's premises. Every service vehicle of the Franchisee and its contractors or subcontractors shall be clearly identified as such to the public. Specifically, Franchisee vehicles shall have the Franchisee's logo plainly visible. The vehicles of those contractors and subcontractors working for the Franchisee shall have the contractor's / subcontractor's name plus markings (such as a magnetic door sign) indicating they are under contract to the Franchisee. B. All contact with a Subscriber or potential Subscriber by a Person representing the Franchisee shall be conducted in a courteous manner. C. The Franchisee shall send annual notices to all Subscriber informing them that any complaints or inquiries not satisfactorily handled by the Franchisee may be referred to the LFA. D. All notices identified in this Section shall be by either: ,~ (1) A separate document included with a billing statement or included on the portion of the monthly bill that is to be retained by the Subscriber; or (2) A separate electronic notification E. The Franchisee shall provide reasonable notice to Subscribers of any pricing changes or additional changes (excluding sales discounts, new products or offers) and, subject to the forgoing, any changes in Cable Services, including channel line-ups. Such notice must be given to Subscribers a minimum of thirty (30) days in advance of such changes if within the control of the Franchisee, and the Franchisee shall provide a copy of the notice to the LF A including how and where the notice was given to Subscribers. F. The Franchisee shall provide information to all Subscribers about each of the following items at the time of installation of Cable Services, annually to all Subscribers, at any time upon request, and, subject to Subsection 10.E., at least thirty (30) days prior to making significant changes in the information required by this Section if within the control of the Franchisee: (1) Products and Cable Service offered; (2) Prices and options for Cable Services and condition of subscription to Cable Services. Prices shall include those for Cable Service options, equipment rentals, program guides, installation, downgrades, late fees and other fees charged by the Franchisee related to ,r-- Cable Service; Lake Elsinore 34 \GENOA ITEM NO. ')... J PACE '9t OF 5 (3) Installation and maintenance policies including, when applicable, information regarding the Subscriber's in-home wiring rights during the period Cable Service is being provided; '-..JIf (4) Channel positions of Cable Services offered on the Cable System; (5) Complaint procedures, including the name, address and telephone number of the LF A, but with a notice advising the Subscriber to initially contact the Franchisee about all complaints and questions; (6) Procedures for requesting Cable Service credit; (7) The availability of a parental control device; (8) Franchisee practices and procedures for protecting against invasion of privacy; and (9) The address and telephone number of the Franchisee's office to which complaints may be reported. A copy of notices required in this Subsection IO.F. will be given to the LFA at least fifteen (15) days prior to distribution to subscribers if the reason for notice is due to a change that is within the control of Franchisee and as soon as possible ifnot with the control of Franchisee. '-..JIf G. Notices of changes in rates shall indicate the Cable Service new rates and old rates, if applicable. H. Notices of changes of Cable Services and/or Channel locations shall include a description of the new Cable Service, the specific channel location, and the hours of operation of the Cable Service if the Cable Service is only offered on a part-time basis. In addition, should the channel location, hours of operation, or existence of other Cable Services be affected by the introduction of a new Cable Service, such information must be included in the notice. I. Every notice of termination of Cable Service shall include the following information: (1) The name and address of the Subscriber whose account is delinquent (2) The amount of the delinquency (3) The date by which payment is required in order to avoid termination of Cable Service; and (4) The telephone number for the Franchisee where the Subscriber can receive additional information about their account and discuss the pending termination. Lake Elsinore 35 '\GENDA ITEM NO. ";23 PN;E+Of .'57 '-..JIf CITY OF LAKE ELSINORE REPORT TO CITY COUNCIL .....", TO: MAYOR AND CITY COUNCIL FROM: ROBERT A. BRADY, CITY MANAGER DATE: APRIL 11, 2006 SUBJECT: PUBLIC HEARING - RESOLUTION APPROVING THE INCREASE IN ASSESSMENTS AND THE LEVY OF ASSESSMENTS FOR LAKE ELSINORE LANDSCAPE AND STREET LIGHTING DISTRICT NO.1 - ZONE 5, PHASE 2 PURSUANT TO THE LANDSCAPING AND LIGHTING ACT OF 1972 BACKGROUND On March 14,2006, the City Council adopted a resolution declaring its intent to increase assessments for Landscape and Street Lighting District No.1 - Zone 5, Phase 2 and approved an Engineer's Report for the increase in assessments for Landscape and Street Lighting District No. 1 - Zone 5, Phase 2. .....", DISCUSSION The requirements of the Rosetta Canyon - Zone 5, Phase 2 development have increased the number of street lights from the previous estimate of 96 lights to 144 lights. Due to the increased number of street lights, an increase in the annual assessment amount is proposed for FY 2006-07 in order to keep up with increased costs to operate and maintain the improvements. The total annual cost of operations and maintenance for Street Lighting is estimated at $26,956.90 or $53.59 per dwelling unit. The estimated street lighting cost for the first year includes a 50% reserve of$13,277.52, bringing the total to $40,234.42 or $80.00 per dwelling unit. The 1972 Act requires that a special fund be set up for the revenues and expenditures of the District and each annexation or zone tracked separately. Any balance or deficit remaining on July 1 must be carried over to the next fiscal year. .....", AGENDA ITEM NO. zi PACE I OF ~ ,""""'" REPORT TO CITY COUNCIL APRIL 11, 2006 PAGE 2 The City Council may approve up to a two percent (2%) fixed rate adjustment annually. The rate adjustment will adjust the Maximum rate but not necessarily the assessment rate. If costs begin to exceed assessment revenue, the City Council may increase the assessment up to the Maximum. FISCAL IMPACT The City will have the appropriate funding to cover lighting for the designated areas in the district. RECOMMENDATION This is an advertised Public Hearing. /""' The following is recommended to the City Council: 1. Open the Public Hearing and call for testimony 2. Close the Public Hearing 3. Direct the City Clerk to open sealed ballot(s), tally vote(s), announce the vote tally and states whether a majority protest exists 4. If no majority protest exists, then by motion, adopt Resolution No. 2006 - if (p approving the increase in assessments and the levy of assessments for Lake Elsinore Landscape and Street Lighting District No. 1 - Zone 5, Phase 2 PREPARED BY: ~1t: MATT N. PRESSE DIRECTOR OF MINISTRATIVE SERVICES APPROVED FOR AGENDA BY: ,""""'" AGENDA ITEM NO. 2~ PACE a. OF S f PHASE 1 PHASE 2 lRACT 25477 ~II""' ~~ ~ \ItCItI'1'Y MAl' .. ... - -- -- ......, MI"IOr Plrcel NOI. 349-2411-069 34~01l-020 34~01l-021 349-4111-001 34~111-002 349-4111-003 349-4111-004 34~111-O16 349-4211-001 34~211-O02 349-4311-006 349-4311-014 34~311-016 34~311-019 The parcel numbers above correspond to the Assessor's maps of the Assessor of the County of Riverside for Fiscal Year 2005-06. Landscape and Street Lighting Maintenance District No. 1 Rosetta Canyon - Zone 5 Assessment Diagram Page 1 of 1 ......, ......, AGENDA I1EM NO. 2Y PAGE 3 OF g = ,-.. RESOLUTION NO. 2006-!:I:.b.- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, APPROVING THE INCREASE IN ASSESSMENTS AND THE LEVY OF ASSESSMENTS FOR LAKE ELSINORE LANDSCAPE AND STREET LIGHTING DISTRICT NO.1 - ZONE 5, PHASE 2 WHEREAS, the City Council of the City of Lake Elsinore, pursuant to the provisions of the Landscaping and Lighting Act of 1972 being Division 15 of the Streets and Highways Code of the State of Cali fomi a (the "Act"), did on the 14th day of March, 2006, adopt a resolution initiating proceedings for the increase in assessments for Landscape and Street Lighting District No.1 - Zone 5, Phase 2 (the "District"), for the purposes provided therefore in the Act; and WHEREAS, said Resolution was duly and legally published in the time, form, and manner as required by law, and which Resolution is on file in the Office of the City Clerk; and . ~ WHEREAS, Proposition 218, the Right to Vote on Taxes Act, does hereby require that if the assessment is new, a notice of the proposed assessment, along with a ballot, shall be mailed to all owners of identified parcels within Zone 5, Phase 2, and that the agency shall conduct a public hearing not less than 45 days after the mailing of said notice; and WHEREAS, the property owner of parcels within Zone 5, Phase 2 has submitted a signed and notarized petition and an assessment ballot in favor of the proposed assessment against the District; and WHEREAS, the property owner by signing said petition, hereby waives the statutory requirements for the 45-day noticing period for the public hearing and rights of majority protest; and WHEREAS, said petition and assessment ballot is on file in the Office of the City Clerk; and WHEREAS, the City has prepared a diagram attached as Exhibit "A," which is designated Landscape and Street Lighting Maintenance District No. 1 - Zone 5, showing the boundaries of the Zone 5, which are benefited by the improvements and the amount to be assessed against each of the parcels within Zone 5, Phase 2; and WHEREAS, the diagram and assessment have been filed with the City Clerk and are open to public inspection and may be referred to for all details regarding the ,-.., improvements, the boundary of Zone 5, the assessments, the total costs, and the description of the parcel to be assessed; and AGeNDA ITEM NO. PAGE '-I 2L\ OF g CITY COUNCIL RESOLUTION NO. 2006- 4lo Page 2 of5 WHEREAS, the City Council has examined and considered the diagram, the assessments, and the proceedings prior thereto; and .....", WHEREAS, said City Council having duly received and considered evidence, oral and documentary, concerning the jurisdiction facts in the proceeding and concerning the necessity for the contemplated work and the benefits to be derived therefrom, and said City Council having now acquired jurisdiction to order the proposed work. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS: SECTION 1. That the above recitals are true and correct. SECTION 2. That the City hereby proposes an annual levy of assessments for the Landscape and Street Lighting District No.1 - Zone 5, Phase 2. Installation, construction, or maintenance of any authorized improvements under the Act, including, but not limited to, streetlight and landscape improvements and any facilities which are appurtenant to any of the aforementioned or which are necessary or convenient for the maintenance or servicing thereof. SECTION 3. The City Manager has directed to cause the preparation of a report "'-" in accordance with Article 4 of the Act for Zone 5, Phase 2 and which is on file with the City Clerk. SECTION 4. A diagram for Zone 5 (Section 22570 of the Streets and Highways Code) and an assessment (Section 22572 of the Streets and Highways Code) showing the area to be benefited and assessed for the improvements has been prepared as Exhibit "A." The diagram, assessments, and improvement plans have been filed with the City Clerk. SECTION 5. The City Council hereby finds that each and every part of the Engineer's Report is sufficient and the City Council hereby approves, passes on, and adopts the Engineer's Report as submitted to the City Council and filed with the City Clerk. SECTION 6. The City Council does hereby reference the Engineer's Report that indicates the amount of the assessments, the Zone 5 boundary, detailed description of improvements, and the method of assessment. The Engineer's Report is on file in the office of the City Clerk and reference to the Engineer's Report is hereby made for all particulars. SECTION 7. The City Clerk shall certify to the adoption of this Resolution. ......, AGENDA ITEM NO. 2-4 PAGE 5 OF 3 CITY COUNCIL RESOLUTION NO. 2006- Page 3 of 5 /'"""' SECTION 8. This Resolution shall take effect from and after the date of its passage and adoption. PASSED, APPROVED AND ADOPTED this 11 th day of April, 2006. AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: ABSTAIN: COUNCILMEMBERS: RobertE. Magee, Mayor City of Lake Elsinore ATTEST: ,,--. Frederick Ray, City Clerk City of Lake Elsinore APPROVED AS TO FORM: Barbara Zeid Leibold, City Attorney City of Lake Elsinore ~ ACENDA ITEM NO. PAGE 6 ?~~ OF 2, EXHIBIT A LAKE ELSINORE LANDSCAPE AND STREET LIGTHTING MAINTENANCE DISTRICT NO.1 (ROSETTA CANYON - ZONE 5, PHASE 2) AGENDA ITEM NO. ?-.4 PACE 7 OF g "'" ~ ~ ~ t PHASE 1 ~ PHASE 2 lRACT 254n ~ -.,. ... ...-. - -- As......r Psrcel No.. 3411-240.069 349-400-020 349-400-021 349-410.001 349-410.002 349-410.003 349-410.004 349-410.016 349-420.001 349-420.002 3411-430.006 349-430-014 349-430.016 349-430.019 The parcel numbers above correspond to the Assessor's maps of the Assessor of the County of Riverside for Fiscal Year 2005-06. ,,-., Landscape and Street Lighting Maintenance District No. 1 Rosetta Canyon - Zone 5 Assessment Diagram Page 1 of 1 AGENDA ITEM NO. '2L\ PAOE g OF ~ - ,-... CITY OF LAKE ELSINORE JOINT REPORT TO CITY COUNCIL AND REDEVELOPMENT AGENCY TO: MAYOR AND CITY COUNCIL CHAIRMAN AND REDEVELOPMENT AGENCY FROM: ROBERT A. BRADY, CITY MANAGER DATE: APRIL 11, 2006 SUBJECT: TENTATIVE CONDOMINIUM MAP NO. 33820 & RESIDENTIAL DESIGN REVIEW NO. 2005-11 KNOWN AS MARINA VILLAGE CONDOMINIUMS APPLICANT: D.R. HORTON, 2280 WARDLOW CIRCLE, SUITE 100, CORONA, CA 92880 LOCATION: The project lies within Redevelopment Project Area No. I ,-... REQUEST The applicant requests approval of: · Review and certification of Mitigated Negative Declaration No. 2005-11 pursuant to Section 15070 of the California Environmental Quality Act (CEQA). . Approval of Tentative Condominium Map No. 33820 pursuant to Section 16 "Subdivisions" of the Lake Elsinore Municipal Code (LEMC), Chapter 17.30 (Condominiums and Condominium Conversions) of the LEMC and Section(s) 66424 and 66427 ofthe California Subdivision Map Act (CSMA). . Residential Design Review No. 2005-11. The applicant is requesting Design Review consideration for the design and construction of forty-six (46) detached residential condominium buildings, which include ninety-two (92) individually owned attached condominium units and related improvements. Review is pursuant to the Historic Elsinore Architectural Design Standards and Chapter 17.82 (Design Review) of the LEMC. ,"-'" ~ ACENDA ITEM rro. ?~ PACE I OF 0 REPORT TO THE CITY COUNCIL APRIL 11, 2006 Page 2 of 4 '""" BACKGROUND At their regular meeting of April 4, 2006, the Planning Commission adopted Resolution No. 2006-33 recommending City Council approval of Mitigated Negative Declaration No. 2005-11, Resolution No. 2006-34 recommending City Council approval of Tentative Condominium Map No. 33820 and Resolution No. 2006-35 recommending City Council approval of Residential Design Review No. 2005-11. In accordance with the LEMC, the Planning Commission also adopted Resolution No. 2006-32 approving Conditional Use Permit No. 2005-10 which allowed for condominiums to be established on the subject property. DISCUSSION Items of discussion at the Planning Commission Hearing included the General Plan Advisory recommendation to achieve a mixed use development on the site. The Commission determined that commercial development was not feasible given the size of the site, potential conflicts with adjacent land uses and current market conditions. Moreover, it was felt that a residential project would create additional pedestrian traffic '""" for existing businesses downtown. Other issues discussed included universal building designs and preservation of lake views from surrounding existing residences. The Commission expressed satisfaction with the design and layout of the proposed project. On a three to one vote, with Commissioner Larimer voting no, the Planning Commission accepted staff's recommendation of approval with one modification to Condition of Approval No. 32 relating to affordable housing requirements. ENVIRONMENTAL A Mitigated Negative Declaration has been prepared in association with the proposed project. The proposed Mitigated Negative Declaration No. 2005-11 has been prepared pursuant to Article 6 (Negative Declaration Process) and Section 15070 (Decision to Prepare a Negative or Mitigated Negative Declaration) of the California Environmental Quality Act (CEQA). Based on staff's evaluation, the proposed project will not result in any significant effect on the environment. Further, pursuant to Section 15073 (Public Review of a Proposed Negative Declaration or Mitigated Negative Declaration) of the California Environmental Quality Act (CEQA), the intended Mitigated Negative Declaration was submitted to the County Clerk of Riverside County for the required 30 day review period which ended on April 3, 2006. ...." AGENDA ITEM NO. ~:= ~ PAGE Q- OF )fO REPORT TO THE CITY COUNCIL ~ APRIL 11, 2006 Page 3 of 4 FISCAL IMPACT Residential development of this nature generates a negative fiscal impact to the City. However, the development has been conditioned to annex into Community Facilities District (CFD) 2003-01 and Lighting, Landscaping and Maintenance District No.1 to offset the annual negative fiscal impacts on public safety operations and maintenance including city-wide improvements and facilities relating to fire and police protection, and to offset the negative fiscal impacts on City maintained lighting and landscaping. RECOMMENDATION The Planning Commission recommends that the City Council adopt the following resolutions: ~ City Council Resolution No. 2006-'J.1 approvmg Mitigated Negative Declaration No. 2005-11. 2. City Council Resolution No. 2006-~ approving Tentative Condominium Map No. 33820. 3. City Council Resolution No. 2006-~ approving Residential Design Review No. 2005-11. 1. Further, staff recommends that the Agency Board concur with the City Council Resolutions referenced above. PREPARED BY: Matthew C. Harris, Senior Planner REVIEWED BY: Rolfe Preisendanz, Director Community Development APPROVED FOR AGENDA BY: ATTACHMENTS ~ 1. Vicinity Map. 2 City Council Resolution No. 2006-_, approvmg Mitigated Negative ACENDA ITEM NO. '2S" PACE ~ OF 'i?O ~ REPORT TO THE CITY COUNCIL APRIL 11,2006 Page 4 of4 '-' Declaration No. 2005-11. 3. City Council Resolution No. 2006-_, approving Tentative Condominium Map No. 33820. 4. City Council Resolution No. 2006-_, approving Residential Design Review No. 2005-11. 5. Planning Commission Staff Report, Resolutions, Conditions of Approval, and Exhibits from the April 4, 2006 meeting. 6. Full Size Plans. ,...., '-' AGENDA ITEM NO. '2..S- PAGE lj OF <lU ~ ~ VICINITY MAP TENTATIVE CONDOMINIUM MAP NO. 33820 CONDITIONAL USE PERMIT NO. 2005-10 RESIDENTIAL DESIGN REVIEW NO. 2005-11 "MARINA VILLAGE" \) ~ ) /' /"'. ACENDA ITEM NO. 0-. c: PACE 5 OF 5rO ~ \ RESOLUTION NO. 2006-Lf1 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, ADOPTING MITIGATED NEGATIVE DECLARATION NO. 2005-11 FOR THE PROJECT KNOWN AS THE MARINA VILLAGE RESIDENTIAL CONDOMINIUMS LOCATED AT THE NORTHEAST CORNER OF LAKE SHORE DRIVE AND SPRING STREET ....." WHEREAS, D.R. Horton Inc., has submitted a request to adopt Mitigated Negative Declaration No. 2005-11 for the project known as "Marina Village Condominiums"; and WHEREAS, Mitigated Negative Declaration No. 2005-11 has been prepared to evaluate environmental impacts resulting with the project; and WHEREAS, public notice of said project has been given, and the City Council has considered evidence presented by the Community Development Department and other interested parties at a public hearing held with respect to this item on April 11, 2006. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DOES HEREBY RESOLVE, DETERMINE ANI) ORDER AS FOLLOWS: SECTION 1. The City Council has considered the proposed Mitigated Negative Declaration No. 2005-11. The City Council finds and determines that the project known as the Marina Village Condominiums is consistent with all of the required procedures, policies, guidelines and provisions of the California Environmental Quality Act (CEQA) based on the following findings: SECTION 2. That in accordance with State Planning and Zoning law and the City of Lake Elsinore, the following findings for the approval of Residential Design Review No. 2005-11 have been made as follows: ......., 1. Revisions in the project plans or proposals made by or agreed to by the applicant before a proposed mitigated negative declaration and initial study are released for public review would avoid the effects or mitigate the effects to a point where clearly no significant effects would occur; and . The applicant has made revisions to the project or has agreed to specific conditions which would avoid the effects or mitigate the effects of the project to a point where no significant effects would occur. ...,." AGENDA ITEM/NO. 2-S- PACE ~ OF ~ 0 : ~ ~ CITY COUNCIL RESOLUTION NO. 2006- Page 2 of2 2. There is no substantial evidence, in the light of the whole record before the agency, that the project, as revised, may have significant. effect on the environment. Pursuant to the evidence received in the light of the whole record presented to staff, the project will not have a significant effect on the environment considering the applicable Conditions of Approval and Mitigation Monitoring Report Program. 3. Mitigation measures have been required to ensure all potentially significant impacts are reduced to levels of insignificance. Mitigation measures have been required which will reduce significant environmental impacts to the level of insignificance. SECTION 3. This Resolution shall take effect from and after the date of its passage and adoption. PASSED, APPROVED AND ADOPTED this 11th day of April 2006, by the following vote: AYES: NOES: COUNCILMEMBERS: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: ABSTAIN: COUNCILMEMBERS: Robert E. Magee, Mayor City of Lake Elsinore ATTEST: Frederick Ray, City Clerk City of Lake Elsinore APPROVED AS TO FORM: Barbara Zeid Leibold, City Attorney ,r"' City of Lake Elsinore AGENDA ITEM NO. t~ PAGE { OF <gO ~ RESOLUTION NO. 2006-~ RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, APPROVING TENTATIVE CONDOMINIUM MAP NO. 33820 FOR THE MARINA VILLAGE CONDOMINIUMS LOCATED AT THE NORTHEAST CORNER OF LAKE SHORE DRIVE AND SPRING STREET ....." WHEREAS, D.R. Horton Inc., has initiated proceedings to approve Tentative Condominium Map No. 33820 for the project known as the Marina Village Condominiums; and WHEREAS, the Planning Commission of the City of Lake Elsinore at a regular meeting held on April 4, 2006 made its report upon the desirability of the proposed project and made its recommendations in favor of the project by adopting Planning Commission Resolution No. 2006-34 recommending to the City Council approval of Tentative Condominium Map No. 33820; and WHEREAS, public notice of said application has been given, and the City Council has considered evidence presented by the Community Development Department and other interested parties at a public hearing held with respect to this item on April 11, 2006. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS: ....." SECTION 1. The City Council has considered the proposed project prior to making a decision to approve Tentative Condominium Map No. 333820. The City Council finds and determines that Mitigated Negative Declaration No. 2005-11 is adequate and prepared in accordance with the requirements of the California Environmental Quality Act (CEQA) which analyzes environmental effects of the Tentative Condominium Map and Residential Design Review, based upon the following findings and determinations: SECTION 2. That in accordance with State Planning and Zoning law and the City of Lake Elsinore, the following findings for the approval of Tentative Condominium Map No. 33820 have been made as follows: 1. The proposed subdivision, together with the prOVISIons for its design and improvement, is consistent with the General Plan. The proposed subdivision is compatible with the objectives, policies, general land uses and programs specified in the General Plan (Government Code Section 66473.5). ......., ~ ACENDA'TEM~. OF_(50= PACE_ 0 - ,""-- CITY COUNCIL RESOLUTION NO. 2006-_ Page 2 of3 The project as designed assists in achieving the development of a well-balanced and functional mix of residential, commercial, industrial, open space, recreational and institutional land uses (GOAL 1.0, Land Use Element) as well as . provide decent housing opportunities and a satisfying living environment for residents of Lake Elsinore (GOAL 1.0, Housing Element). 2. The effects this project is likely to have upon the housing needs of the region, the public service requirements of its residents and the available fiscal and environmental resources have been considered and balanced. Considering the effects this project is likely to have upon the needs of the region a condition of approval was implemented which would require the applicant to payment of an in lieu fee calculated to provide sufficient funds to underwrite the long-term affordability of an equivalent number of affordable dwelling units constructed or substantially rehabilitated on other sites within the City's redevelopment project areas. 3. Subject to the attached conditions of approval, the proposed project is not anticipated to result in any significant environmental impact. The project has been adequately conditioned by all applicable departments and agencies and will not therefore result in any significant environmental impacts. ,...-- SECTION 3. This Resolution shall take effect from and after the date of its passage and adoption. PASSED, APPROVED AND ADOPTED this 11th day of April 2006, by the following vote: . ",--, AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: ABSTAIN: COUNCILMEMBERS: Robert E. Magee, Mayor City of Lake Elsinore ACENOA ITEM NO. 2.:: . PACE '1 OF _ c;ro _ CITY COUNCIL RESOLUTION NO. 2006- Page 3 of3 ATTEST: ,...." Frederick Ray, City Clerk City of Lake Elsinore APPROVED AS TO FORM: Barbara Zeid Leibold, City Attorney City of Lake Elsinore ....." ....." AGENDA ITEM NO. ~.;o - PACE I 0" /""' RESOLUTION NO. 2006- "\ ~ RESOLUTION OF THE CITY COUNCIL OF/THE CITY OF LAKE ELSINORE, CALIFORNIA, APPROVING RESIDENTIAL DESIGN REVIEW NO. 2005-11 FOR THE MARINA VILLAGE RESIDENTIAL CONDOMINIUMS WHEREAS, D.R. Horton Inc., has initiated proceedings to approve Residential Design Review No. 2005-11 for the project known as the Marina Village.Condominiums; and WHEREAS, the Planning Commission of the City of Lake Elsinore at a regular meeting held on April 4, 2006 made its report upon the desirability of the proposed project and made its recommendations in favor of the project by adopting Planning Commission Resolution No. 2006-35 recommending to the City Council approval of Residential Design Review No. 2005-11; and WHEREAS,' public notice of said application has been given, and the City Council has considered evidence presented by the Community Development Department and other interested parties at a public hearing held with respect to this item on April 11, 2006. r-- NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS: SECTION 1. The City Council has considered the proposed project prior to making a decision to approve Residential Design Review No. 2005-11. The City Council finds and determines that Mitigated Negative Declaration No. 2005-11 is adequate and prepared in accordance with the requirements of the California Environmental Quality Act (CEQA) which analyzes environmental effects of the Specific Plan and Residential Design Review, based upon the following findings and determinations: SECTION 2. That in accordance with State Planning and Zoning law and the City of Lake Elsinore, the following findings for the approval of Residential Design Review No. 2005-11 have been made as follows: 1. The project, as approved, will comply with the goals and objectives of the General Plan and the Zoning District in which the project is located. The proposed Residential Design Review located within Assessor Parcel Number(s) 374-271-003, 004, 007, 013, 015, 016, complies with the goals and objectives of the General Plan, in that the approval of this Condominium Community will assist in achieving the development of a well-balanced and functional mix of residential, commercial, industrial, open space, recreational and institutional land uses as well as ,.--. encouraging industrial land uses to diversify Lake Elsinore's economic base. ACENOA ITEM NO. 2. c::;- PACE I { OF i?'D CITY COUNCIL RESOLUTION NO. 2006- Page 2 of3 2. The project complies with the design directives contained in Section 17.82.060 and all other applicable provisions of the Municipal Code. The proposed Residential Design Review located at Assessor Parcel Number(s) 374- 271-003, 004, 007, 013, 015, 016, is appropriate to the site and surrounding developments in that the Condominium project has been designed in consideration of the size and shape of the property, thereby creating interest and varying vistas as a person moves along the street. Further the project as proposed will complement the quality of existing development and will create a visually pleasing, non-detractive relationship between the proposed and existing projects in that the architectural design, color and materials and site design proposed evidence a concern for quality and originality. 3. Subject to the attached Conditions of Approval, the proposed project is not anticipated to result in any significant adverse environmental impacts. Pursuant to the California Environmental Quality Act (CEQA), the propose~ Residential Design Review located at Assessor Parcel Number(s) 374-271-003, 004, 007, 013, 015, 016, as reviewed and conditioned by all applicable City Divisions and Departments and Agencies, will not have a significant effect on the environment pursuant to attached Mitigation Measures and Conditions of Approval. 4. Conditions and safeguards pursuant to Chapter 17.82.060 of the Zoning Code, including guarantees and evidence of compliance with conditions, have been incorporated into the approval of the subject project to ensure development of the property in accordance with the objectives of Chapter 17.82. Pursuant to Section 17.82.070 (Action of the Planning Commission) of the Lake Elsinore Municipal Code (LEMC), the proposed Residential Design Review for the Marina Village Condominiums was scheduled and considered for approval by the Planning Commission. SECTION 3. This Resolution shall take effect from and after the date of its passage and adoption. PASSED, APPROVED AND ADOPTED this 11 th day of April 2006, by the following vote: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: ABSTAIN: COUNCILMEMBERS: ......"" "" -.."., AGENDA ITEM NO. ~Zu .= PAGEJr OF ,,-.. /'""' ~ CITY COUNCIL RESOLUTION NO. 2006-_ Page 3 of3 ATTEST: Frederick Ray, City Clerk City of Lake Elsinore APPROVED AS TO FORM: Barbara Zeid Leibold, City Attorney City of Lake Elsinore Robert E. Magee, Mayor City of Lake Elsinore AGENDA ITEM "0._ %~ PACE_I:? _OF - - City ofLakc Elsioorc: Planning Di.,,;s ion 130 S. Man Smet Uke EIs..o.... CA 92530 (909) 674-3124 (909) 471-1419 fax PLANNING COMMISSION STAFF REPORT ""'" DATE: TO: Apri14~ 2006 Chairman and Members of the Planning Commission FROM: Rolfe Preisendanz~ Director of Conununity Development PREPARED BY: PROJECT TITLE: Matthew C Harris~ Senior Planner Tentative Condominium Map No. 33820~ Conditional Use Permit No. 2005-10 and Residential Design Review No. 2005-11 for "Marina Village". APPLICANT: D.R HORTON~ (Attn: Mr. Chris Faber)~ 2280 Wardlow alde~ Suite 100~ Corona~ CA. 92880. ""'" PROJECT REQUESTS · Review and recommendation of certification of Mitigated Negative Declaration No. 2005-11 pursuant to Section 15070 of the California Environmental Quality Act (CEQA). . Approval of Tentative Condominium Map No. 33820 pursuant to Section 16 "Subdivisions" of the Lake Elsinore Municipal Code (LEMq, Chapter 17.30 (Omdominiums and Condominium Conversions) of the LEMC and Section(s) 66424 and 66427 of the Gilifornia Subdivision Map Act (CSMA). . Conditional Use Permit No. 2005-10. The applicant is requesting the approval of a conditional use permit to allow for the establishment of 92 individually owned attached condominium units which will participate in an underlying conunon area pursuant to the Historic Elsinore Architectural Design Standards and Chapter 17.74 (Conditional Use Permits) of the LEMC ""'" AGENDA ITEM NO. PAGE ) if . 2~ OF '31 ~ ~ PLANNING COMMISSION STAFF REPORT APRIL 4, 2006 PAGE 2 of 13 PROJECf TITLE: TENTATIVE CONDOMINIUM MAP NO. 33820, CONDITIONAL USE PERMIT NO. 2005-10 AND RESIDENTIAL DESIGN REVIEW NO. 2005-11 FOR "MARINA VILLAGE". . Residential Design Review No. 2005-11. The applicant is requesting Design Review consideration for the design and construction of forty-six (46) detached residential condominium buildings, which include ninety-two (92) individually owned attached condominium units and related improvements. Review is pursuant to the Historic Elsinore Architectural Design Standards and Olapter 17.82 (Design Review) of the LEMC BACKGROUND The proposed project site is designated Future Specific Plan Area "L" in the General Plan and is zoned Specific Plan. The site is also located within Zone 8 of the Historic Elsinore Architectural Design Standards which defines the development standards for the project. A Medium High Density Residential land use designation has been applied to the project site which allows for attached single- family dwellings as a permitted use. Over the past several months, staff has worked with the applicant to achieve a variety of enhancements to the project including the provision of a recreation center with swimming pool and hot tub, upgraded architectural elements including enhanced garage ~ doors, recessed windows and ornamental features as well as enhanced landscaping including project entry features and larger trees. The proposed project was reviewed by the General Plan Advisory Committee (GPAq in late 2005. The GPAC felt that a mixed use development including both residential and commercial uses would be more appropriate on the site given its proximity to downtown and the lake. However, the applicant believes that a fully residential use is more in keeping with current market demands. PROJECf LOCATION The 5.8-net acre project site is located on the northeast comer of Lakeshore Drive and Spring Street, Assessor Parcel Number(s) 374-271-003,004,007,013,015, &016. ~ EXISTING ZONING GENERAL PLAN LAND USE Project ~cant Specmc Plan Future Specific Plan Site Area L North Residential Mixed Use Mixed Use South Residential/Vacant Specific Plan Future Specific Plan Area L East Residential Specific Plan Future Specific Plan .Area L West Drainage Public Institutional Future Specific Plan Channel/Public Park .Area L ENVIRONMENTAL SETTING ~r-- ACENDA ITEM NO. S'60 <: PACE /5 OF PLANNING COMMISSION STAFF REPORT APRIL 4, 2006 PAGE 3 of 13 PROJECT TITLE: TENTATIVE CONDOMINIUM MAP NO. 33820, CONDITIONAL USE PERMIT NO. 2005-10 AND RESIDENTIAL DESIGN REVIEW NO. 2005-11 FOR "MARINA VILLAGE". ""-'" PROJECT DESCRIPTION(S) TENTATIVE OONDOMINIUMMAP 33820 The applicant requests approval to establish a proposed residential condominiwn community. Condominiwn projects are defmed as "subdivisions" pursuant to Section 66424 of the California Subdivision Map Act (CSMA). Consequendy, this project requires Planning Commission and Gty Council consideration pursuant to the requirements of Section 16 "Subdivisions" of the Lake Elsinore Municipal Code (LEMq. . The condominiwn concept would allow the applicant the ability to offer individual dwelling units for sale within the building stmctures as defined by the Tentative Condominiwn Map No. 33820, while sharing common interest, ownership and maintenance responsibilities within the common areas. These common areas entail a swimming pooVjacuzzi area, common walls and fences, aisle- ways, streets, pavement, minor accessory stmctures such as monument signS, mail boxes, landscaped areas, and onsite underground and above ground utility infrastructure improvements necessary to service and support the residential community. . ""-'" OONDITIONAL USE PERMIT NO. 2005-10 Pursuant to Section 17.30.020 (permits Required) of the Lake Elsinore Municipal Code (LEMq, the applicant is requesting a Conditional Use Penmt for the establishment of the subject condominiwn project. As allowed in the LEMe, the Planning Commission is empowered to grant and to deny applications for Conditional Use Penmts and to impose reasonable conditions upon the granting of Conditional Use Penmts. RESIDENTIAL DESIGN REVIEW NO. R 2005-11 ~ The applicant is proposing to develop the vacant site with forty-six (46) three story wood framed duplex buildings, totaling approximately 121,454 square feet of interior living space. The total of all structures proposed will cover approximately 25.3% of the 5.8 net acre site and will be developed at a maximwn density of 15.9 dwelling units per net acre. Five separate floor plans will be provided and will range in size from a one (1) bedroom-1,056 square foot unit to a two (2) bedroom 1,463 square foot unit. Each of the condominiums will have access to a private balcony or courtyard area. Most of the units will have either a two-car or tandem enclosed garage. However, the one bedroom units will be afforded a one car garage along with an uncovered parking space adjacent to each unit. ....., AGENDA ITEM fII0. ~ PAGE I h OF (fO ,"-" PLANNING COMMISSION STAFF REPORT APRIL 4, 2006 PAGE 4 of 13 PROJECf TITLE: TENTATIVE CONDOMINIUM MAP NO. 33820, CONDITIONAL USE PERMIT NO. 2005-10 AND RESIDENTIAL DESIGN REVIEW NO. 2005-11 FOR "MARINA VILLAGE". The condominium buildings will front onto interior courtyards or greenbelt areas with garages at the rear. Pedestrian friendly landscaped common areas will be provided throughout the site for the residents. A recreation center has been centrally located within the complex. Pedestrian walkways will be provided along drives' and throughout the complex to achieve access from parking areas, units and the recreation center. Moreover, the applicant has agreed to install a pedestrian trail within the drainage channel right-of-way on both sides of the channel along the full length of the western property line to adjoin existing trails in the vicinity and to construct a pedestrian bridge over the channel at the southwest comer of the project site. The recreation center will consist of a swimming pool, jacuzzi and a bathroom! maintenance building. Additional landscaped open space areas have been provided throughout the complex, augmenting the landscaping provided around the recreation center. Decorative light standards and "bollards" will be placed strategically throughout the complex to address both pedestrian and vehicular visibility needs. Trash bins will be stored within individual garages and will be set out in designated trash pick-up areas on trash days (See Exhibit C for Refuse Diagram). Decorative stamped concrete at project entrances and pedestrian crossings will provide definition as well as ,"-'" creating a vehicle calming device for safe pedestrian access. araJatim ani Park~ SJXUE Lapft Access to the site will be made available by way of two non-gated driveways located off of Spring Street and West Limited Street respectively. The applicant is proposing 163 covered parking spaces (within enclosed attached garages) and 57 open parking spaces onsite (220 spaces total) No compact spaces are proposed. The garage entrances will generally face each other and take access off proposed private drives. The Engineering Department has required that the applicant construct a cul-de-sac bulb at the terminus of Lakeshore Drive which abuts the subject property. A rrhitecture The architectural design of the condominiums can generally be identified as Spanish Eclectic. The recreation center accessory buildings will also be dedicated to the Spanish Eclectic design. The project architect has utilized four (4) separate elevation schemes to achieve variety within the complex. Several architectural enhancements have been incorporated into the buildings including such elements as arched openings at the front entries and garage doors, recessed windows at strategic locations within the building wall planes, pitched US" tile roof elements, decorative ornamental iron work and light fixtures, painted tile accent features, heavy wood trim and decorative balconies. ,""""" AGENDA ITEM NO. '2.!!5; PAGE-11 OF 00 PLANNING COMMISSION STAFF REPORT APRIL 4, 2006 PAGE 5 of 13 PROJECT TITLE: TENTATIVE CONDOMINIUM MAP NO. 33820, CONDITIONAL USE PERMIT NO. 2005-10 AND RESIDENTIAL DESIGN REVIEW NO. 2005-11 FOR "MARINA VILLAGE". ......, Olor am Materials The architectural designs will be further enhanced via a variation of four (4) distinct Color Schemes as well as four separate roof tile colors. The chosen colors serve to compliment the building architecture and the surrounding neighborhood. Larrls~ The open space areas, recreational facilities and landscaping are to be maintained by a Homeowner's Association (HOA) as conditioned. A landscape buffer with an average width of twenty (20') will be provided around the perimeter of the site to enhance aesthetics. The buffer will consist of trees planted informally in groupings along with, shrubs and groundcover. Moreover, 24" box size street trees will planted approximately forty (40) feet on center along all project street frontages to give a unifonn appearance. Approximately twelve different species of trees will be utilized throughout the project site including, but not limited to California Syt:amore, California Pepper, Sweet Gum, Italian Cypress and Mexican Fan Palm. Project site focal points including entrances and recreation areas have been emphasized by using 60" box size multi-trunk evergreen specimen trees to provide immediate shading and maturity. In addition, 36" box accent trees will be planted on each side of alley ways at their intersection with interior drives to achieve fonnality. Water features will be located at several courtyard areas onsite. ......, Approximately twenty (20) different species of shrubs will be utilized onsite including, but not limited to Rockrose, Lantana, Heavenly Bamboo, Mock Orange and Euonymus. The shrubbery will be planted along building foundations to soften elevations and along streetscapes and slope areas. Ferns am Wal1s Decorative monumentation walls, signage and planters with stucco and stone veneer columns will be provided on both sides of the two entry drives into the project site for fonnalization. In addition, up-lighting will be included to give an attractive appearance in the over night hours. Tubular steel fences will be erected at the top of slopes around the project perimeter with a combination masonry and tubular steel fence at the toe of slopes along street frontages. A fence will also be provided around the recreation complex for security purposes. Many units will have exterior courtyards at front elevations with low walls which create private recreation areas. ......, . AGENDA I~. ';2.C:; PACE OF 150 PLANNING COMMISSION STAFF REPORT APRIL 4, 2006 /"' PAGE 6 of 13 PROJECf TITLE: TENTATIVE CONDOMINIUM MAP NO. 33820, CONDITIONAL USE PERMIT NO. 2005-10 AND RESIDENTIAL DESIGN REVIEW NO. 2005-11 FOR "MARINA VILLAGE". ANALYSIS CONlXMINIUM MAP NQ 33820 "........, Primary concerns associated with condominium projects are the establishment of appropriate mechanisms to ensure the successful and consistent aesthetic appearance of residential complexes. Moreover, the establishment of unmistakable rules and boundaries or covenants, conditions, and restrictions (CC&R.'s) for ownership, interest, and maintenance responsibilities of common areas as well as individual areas within the units sold will be required. The establishment of the CC&R's, corroborating each of these elements, will be recorded against the project as a condition of approval. Additionally, a homeowner's association (BOA) must be established prior to the sale of the last unit sold. The HOA will be empowered to administer and enforce the various elements of the CC&R.'s. To accomplish this, homeowner's associations in most cases will establish monthly fees that cover aspects such as landscape maintenance, parking lot maintenance and utility infrastructure improvements. Likewise, architectural design committees are often established to guarantee consistent design improvement within complexes. The project has been conditioned to require that the applicant submit a copy of the proposed CC&R.'s to the Planning Division for review and approval prior to recording. Moreover, pursuant to Section 17.30.040 (Documents Required) of the LEMC, staff has added a condition of approval which will require that a homeowner's association be established prior to the issuance of a certificate of occupancy for the first dwelling unit. RESIDENTIAL DESIGN REVIEW NO. R 2005-11 Silini & ParkinJ Staff has determined that the proposed project complies with maximum lot coverage, perimeter setbacks and distance between building requirements. With regard to parking, pursuant to Lake Elsinore Municipal Code Section 17.66.030.D.1.b., 92 covered and 111 uncovered parking spaces must be provided onsite (203 spaces total) in association with the 92 residential units proposed. The applicant has provided 163 garage spaces and 57 uncovered spaces for a total of 220 parking spaces onsite. The seventeen spaces provided above and beyond the code requirement will be utilized for guest parking spaces. Therefore, staff believes that adequate onsite parking has been provided to selVe the proposed development. ,.-- ACENDA ITEM NO. % PACE /4 OF ZO PLANNING COMMISSION STAFF REPORT APRIL 4, 2006 PAGE 7of13 PROJECf TITLE: TENTATIVE CONDOMINIUM MAP NO. 33820, CONDITIONAL USE PERMIT NO. 2005-10 AND RESIDENTIAL DESIGN REVIEW NO. 2005-11 FOR "MARINA VILLAGE". ....." DensitY The applicant is proposing an overall net project density of 15.9 dwelling units per acre. The proposed density does not exceed the 18 maximum dwelling units per acre allowed under the Medium High Density (MI-ID) land use designation onsite. Larxls~ The landscape design of the proposed condominium complex meets the requirements set forth within Cbapter VI (Design Guidelines) of the Historic Elsinore Architectural Design Standards in that the propo~ed landscaping and open spaces have fonned a conununity structure consisting of individual components which significantly contribute to a memorable sense of place for the proposed condominium complex. Further, the applicant has also provided an average twenty (20) foot wide landscape buffer along all the abutting street frontages to enhance the aesthetics of the neighborhood as a whole. Priwte & CDmm cpen Sp:ue The project meets the requirement for private open space which is a minimum of one hundred (100) square feet of private open space per dwelling unit. In compliance, the applicant has provided a total of 17,281 square feet of total private open space onsite with a 187 square foot per density unit average. Moreover, a minimum of 250 square feet of common open space per dwelling unit must be provided onsite. A total of 65,077 square feet of commons space has been provided with a 707 square foot per density unit average. ......" A rchit1rture The architectural design of the condominium buildings meets the requirements set forth within the Historic Elsinore Design Guidelines in that the applicant has chosen Spanish Eclectic style architecture as required. Additionally, the architecture of the buildings has been designed to achieve harmony and compatibility with the surrounding historic residential neighborhoods, while providing the flexibility to create variety in the architectural expression and interpretation of the design styles envisioned for the community. Correspondingly, the applicant has provided a variety of building fonns by employing treatments, such as staggering planes along the exterior walls, which will create light and shadow. In addition, the building treatments utilized are consistent with the architectural style proposed. Cdar arxl Materials The colors and materials proposed for this project meet the intent of and comply with the Historic Elsinore Architectural Design Standards in that the proposed colors and materials will create a ..., "'-"C: ACENDA ITEM NO. . A::; PACE ;)0 OF 8V PLANNING COMMISSION STAFF REPORT APRIL 4, 2006 .r-- PAGE 8 of 13 PROJECf TITLE: TENTATIVE CONDOMINIUM MAP NO. 33820, CONDITIONAL USE PERMIT NO. 2005-10 AND RESIDENTIAL DESIGN REVIEW NO. 2005011 FOR "M.ARINA VILLAGE". sensitive palette of colors and materials, producing diversity and enhancing the architectural effects. Additionally, the colors and materials proposed will assist in blending the architecture into the existing landscape. CONDITIONAL USE PERMIT NO. 2004-24 In compliance with Cltapter 17.30 (Onlminium ani Onlminium Om.ersioos) of the LEMC the applicant has filed a request for a Conditional Use Permit. This request for a conditional use permit is consistent with the findings and requirements set forth in O1apter 17.74 (0n1iti0nal Use Pemits) of the LEMC which states that: r-- The City rwlizes that certain uses Ixrre q;eratia1al dxuacteristils that, ~ upoo the kratim arrl desif:7l if the use, mry Ixrre the paential txJ ~ inpaa adjcining prrperties, busin:sses, or residents. Said uses therrfare r<<JUire a rrvre carprrhensi7E reriew ani appruwJ prrm1ure, in:luding, the ability txJ crn:litim the prrj<<t, in order txJ nitigm! any detrimmtal inpaa. In order txJ adiere this, the Planning cnmissUn is ~ txJ grant ani txJ deny appliratims JUr 0n1iti0nal Use Pemits t,trrl txJ inpae rwscml1e crn1itia1s upoo granting if 0n1iti0nal Use Pemits. Considering the potential ramification to the general health, safety, comfort, or general welfare of the community, as admonished, staff has paid particular attention to specific technicalities related to the development of the proposed use. These details included traffic impacts, local street circulation, internal vehicular and pedestrian circulation, landscape buffering, private comrrion area amenities (i.e. swimming pool, spa, tot lots and picnic areas), architectural compatibility and related development standards. Further, pursuant to Section 17.30.040 of the LEMC, the applicant has been conditioned to convey the common open spaces to a homeowner's association (BOA). In compliance, the applicant has been conditioned to submit a declaration of covenants, conditions, and restrictions (CC&R's), to be reviewed by the Gty Attorney and reviewed and approved by the Community Development Director, which will govern the association. Correspondingly, the applicant has been conditioned to establish said homeowner's association prior to the issuance of a certificate of occupancy for the first dwelling unit. ENVIRONMENTAL A Mitigated Negative Declaration has been prepared in association with the proposed project. The proposed Mitigated Negative Declaration No. 2005-11 has been prepared pursuant to Article 6 (Negative Declaration Process) and Section 15070 (Decision to Prepare a Negative or Mitigated Negative Declaration) of the Gdifimia EnrirrnrrEntal Qtality Act (CEQA). Based on staff's evaluation, the proposed project will not result in any significant effect on the environment. Further, pursuant to Section 15073 (Public Review of a Proposed Negative Declaration or .".-... ACENDA ITEM No.2 ~~-"__ . P.AGE d1 OJ: __:.ii6 PLANNING COMMISSION STAFF REPORT APRIL 4, 2006 PAGE 9 of 13 PROJECT TITLE: TENTATIVE CONDOMINIUM MAP NO. 33820, CONDITIONAL USE PERMIT NO. 2005-10 AND RESIDENTIAL DESIGN REVIEW NO. 2005-11 FOR "MARINA VILLAGE". .....,; Mitigated Negative Declaration) of the CaJifamia Errrirarm?nt:aJ QlaJityAct (CEQA), the intended Mitigated Negative Declaration was submitted to the Cn.mty Gerk if Riwside Cn.mty for the required 30 day review period which ends on April 3, 2006. RECOMMENDATIONS It is reconunended that the Planning Conunission adopt; Resolution No. 2006- ~ reconunending Gty Council approval of Mitigated Negative Declaration No. 2005-11, Resolution No. 2006-_ reconunending to the Gty Council approval of the Tentative Condominium Map 33820, adopt Resolution No. 2006- _, approving Conditional Use Permit No. 2005-10 and adopt Resolution No. 2006- _ reconunending to the Gty Council approval of Residential Design Review R 2005-11 based the following Findings, Exhibits" A" thru "2" and the proposed Conditions of Approval. FINDINGS-MITIGATED NEGATIVE DECLARATION 1. Revisions in the project plans or proposals made by or agreed to by the applicant before a proposed mitigated negative declaration and initial study are released for public review would avoid the effects or mitigate the effects to a point where clearly no significant effects would occur; and .....,; The applicant has mule redsia1s ro the prrjert arrJ has agrmJ ro spet.ific anlitims uhUh W1J auid the iffeas arrJ Wll rriti[Jde the iffeas if the prrjert ro a JXint 'lIhere m sigpifrant iffeas 'lJDI!d arm: 2. There is no substantial evidence, in the light of the whole record before the agency, that the project as revised may have significant effect on the environment. Pursuant ro the ecidenE 1'l'Xriu:d in the lifiJt if the WxJe m:ord presenti:d ro staff the prrjert Wll m haw a sigpifrant if]irt m the emirmrrmt b:tsed m the anrent prrjert design, the appliaJle 0n1itims if A ppruuJ, in:urpamtim if the M itigttimMeasures arrJ inp/em?ntatim if the M itigttimM cnitoring Prugram 3. Mitigation measures have been required to ensure all potentially significant impacts are reduced to levels of insignificance. M itigttim rrmsures haw ken requirm, uhUh Wll reJiuce sigpifrant emirrnm?ntal inpaas tp the leU?i if insignificarXl!. These are rrf/a;ud in the M iti[plHi N~ D<<iaratim am W1J k inp!errmted ~ the M itigttim M cnitoring Prugram FINDINGS - CONDOMINIUM SUBDIVISION 1. The proposed subdivision, together with the provisions for its design and improvement, is consistent with the General Plan. The proposed subdivision is compatible with the objectives, policies, general land uses and programs specified in the General Plan (Government Code Section 66473.5). .....,; AGENDA ITEM NO. ~ PAGE d d-' OF 7D PLANNING COMMISSION STAFF REPORT APRIL 4, 2006 ,~ PAGE 10 of 13 PROJECT TITLE: TENTATIVE CONDOMINIUM MAP NO. 33820, CONDITIONAL USE PERMIT NO. 2005-10 AND RESIDENTIAL DESIGN REVIEW NO. 2005-11 FOR "MARINA VILLAGE". The prcjea as desigmi assists in adiecing the deuiqmrnt if a udl-kdarml arrJ ji.gx.t;Und rrix if residential, ~ UrJustrial, cpen SjXUE, rrrrratimal arxi instituticnallarxl uses (GOAL 1.0, Land Use Elemen~ as 'llPil as protide dirent hoosirg cppartunitiRs arrJ a satisfjing l~ encirmrrEnt far residents ifLakeElsimre(GOAL 1.0, Housing Elemen~ 2. The effects this project is likely to have upon the housing needs of the region, the public service requirements of its residents and the available fiscal and environmental resources have been considered and balanced. CmsiderUw, the if/irts this prcjea is likely to hare UJXn the mx1s if the ngim, a anIitim if appruw1 'lIJlS inplenrntaJ uhich 'lRlMld ra:ptire the appliamt to payrrmt if an in lieu fie calaJated to prmide sujjUient JUrr1s to urxlerurite the ~term aJfurdabiJi1:y if an trpewknt nurrhr if a/furrJahle duJiirg units cmstructal ar substantially 'lfiJabilitatuJ 00 aher sites Wthin the Citjs ~ prcjea areas. ~ 3. Subject to the attached conditions of approval, the proposed project is not anticipated to result in any significant environmental impact. The prcjea has been ad<<juateiy crn1itiard by all applU:able departrrEnts ani awries ani uilJ m therifare result in any sigpi/U:ant emirrnm!ntal inputs. FINDINGS - CONDITIONAL USE PERMIT 1. The proposed use, on its own merits and within the context of its setting, is in accord with the objectives of the General Plan and the pwpose of the planning district in which the site is located. In order to adiete a udl b:Jarmi arrJ ji.gx.t;Und rrix if residential, ~ UrJustrial, cpen SjXUE, rrrrratimal arrJ instituticnallarxl uses, staff has tharatiJy euduataJ the lani use ampatibility, rrise, traffic arxi aher emirrnm!ntal hazards rrIataJ to the prrfJa<<1 0n1itimaJ Use Penrit far a 0nIarinimn Cwmrnityla:atedatAssessar Parrel NtI11'kr(s) 374-271-003,004,007,013,015,016. Acrorr.Iir1fIy. the prrfJa<<1larxl use is in an:urrerKJ! Wth the Wjecti'U5 if the Gerx!ral Plan ani the Jfurpae if the ~ district in uhich the site is la:atRd 2. The proposed use will not be detrimental to the general health, safety, comfort, or general welfare of persons residing or working within the neighborhood of the proposed use or the Gty, or injurious to property or improvements in the neighborhood or the Gty. In aa:ord Wth the pttrpaes if the 0Japter 17.74 (Conditional Use Pennits) if the Lake E lsimre M unU:ipal O:de, the City rwliz<<l that the prrfJa<<1 crnlomnium use la:ated at A ssessar Parrel Nurrhet(s) 374- 2 71-003, 004, 007, 013, 015, 016, rmy ha:ze a paentiaJ to ~y inpaathe uelfare if perscn; "...-- residing ar umking Wthin the m,pbarhaxl ar the Cit)t Cmsidering this, staff has substarrtiataJ that all applU:able Ci1:y Depart:rmrts arxiAwries hare been affanI<<l the cpportunity far a ~ reriewif the use AGENDA ITEM NO. 'J.-,[;:~ () PACE ;;JrY OF (5 PLANNING COMMISSION STAFF REPORT APRIL 4, 2006 PAGE 11 of 13 PROJECT TITLE: TENTATIVE CONDOMINIUM MAP NO. 33820, CONDITIONAL USE PERMIT NO. 2005-10 AND RESIDENTIAL DESIGN REVIEW NO. 2005-11 FOR "MARINA VILLAGE". ..., arrl haw in:orparate:l all applU:ahle a>>rm!J1J:S and/ ar crnlitions rrIatm to installatim. arrl mzintermre if Iarrlscapin& strret th1icaticn, ~ if JXirrts if uhU:ular .s arrl tg15s arrl a:ntrd if paentiaJ nuisams, so as to elitrinate any ~ iTrpacts to the wrral health, safety, cmfart, ar wrral ue/fare if the s~ mwbarhaxi ar the Cit)l 3. The site for the intended use is adequate in size and shape to accommodate the use, and for all the yards, setbacks, walls or fences, landscaping, buffers and other features required by TIde 17 of the LEMG The prrpaed an:Iariniumuse krat<<JatAssessar Parrel NunVer(s) 374-271-003, 004, 007, 013, 015, 016, has bren desigfRl in ca1Sideratim if the size arrl shape if the prrperty, thereby strenghening arrl enharx:ing the immliate residential amt. Further, the prq<<t as prrpaai, 7JjJl amp/enEnt the quality if existing deu:kprrmt arrl Wll create a 'lisually pleas~ rK>>detraaice rrlatimship lx:nu:en the J1rr1X:6ed arrl existirrg prq<<ls, in that the an:Iarinium comrunity has bren m.ieooi to ensure adiquate prud$im if scrreningfram the public rip-cfuuy ar adjaamt prrperties. 4. The site for the proposed use relates to streets and highways with proper design both as to width and type of pavement to cany the type and quantity of traffic generated by the subject use. The J1rr1X:6ed an:Iariniumuse krat<<J at Assessar Parrel NunVer(s} 374-271-003, 004, 007, 013, 015, 016, has bren m.ieooi as to its relatim to the Wdth arrl t)fJe if jJaWm1t rmhi to carry the t)fJe arrl quantiJ:y if traffic wrratRd, in that the City has adwpIateJy ewluated the paentiaJ iTrpacts assaiataJ Wth the prrpaed an:Iarinium comrunity prior to its appruuJ arrl has anIitionxi the prqf:tt to k serud by ra:uls if adiquate capacity arrl desigp. starxlanls to prmide rrasanahle aal'SS by car, trude, transit, arrl bU:;Je. 5. In approving the subject use located at Assessor Parcel Number(s) 374-271-003, 004, 007, 013, 015, 016, there will be no adverse affect on abutting property or the pennitted and normal use thereof. ..., The J1rr1X:6ed use has bren ~ly m.ieooi arrl anIitionxi by all applU:ahle City Departmnts arrl adside A gnies, elirrirnting the paentiaJ for any arrl all adrerse iffirts m the abuttingprrperty. 6. Adequate conditions and safeguards pursuant to Section 17.74.50 of the LEMe have been incorporated into the approval of the Conditional Use Pennit to insure that the use continues in a manner envisioned by these findings for the term of the use. Pursuant to Sa:tim 17. 74.050 (A ctim if the Plarrning, CamissUr; if the Lake E lsimre MuniOpal Oxk (LEMC), the an:Iarinium comrunity krat<<J at Assessar Parrel Nunix?r(s} 374-271-003, 004, 007, 013,015,016. FINDINGS - DESIGN REVIEW 1. The project, as approved, will comply with the goals and objectives of the General Plan and the Zoning District in which the project is located. ..., ACENDA ITEM NO~ 2., c: ~ PAC~ OF 1ft) _ ~ ~ ~ PLANNING COMMISSION STAFF REPORT APRIL 4, 2006 PAGE 12 of 13 PROJECT TITLE: TENTATIVE CONDOMINIUM MAP NO. 33820, CONDITIONAL USE PERMIT NO. 2005-10 AND RESIDENTIAL DESIGN REVIEW NO. 2005-11 FOR "MARINA VILLAGE>>. The prr:fJawi Residential Desi?fl Redew la:atai Wthin Assessor ParaJ Ntmber(s) 374-271-003, 004, 007, 013, 015, 016 canplies Wth the [F1ls am chjeaiu:s if the Gen!ral Plan, in thlt the appruwl if this 0nIminium 0:Jrrmmixy Wl1 assist in adieting the dereloprrmt if a ueIJ-lWarmJ am jWx:tim:d rrix if residential, camrmial, inJustrial, cpen spare, ~ am institutimallam uses as ueIJ as erx:atragjng inJustriallam uses to di:u:rsify Lake E lsimre's eanmic luse. 2. The project complies with the design directives contained in Section 17.82.060 and all other applicable provisions of the Municipal Code. The prr:fJawi Residential Desi?fl Redewla:atai at Assessor ParaJ Nwrbet(s) 374-271-003, 004, 007, 013, 015, 016 is apprq>>iate to the site am sunmnding, deukprrEnts in thlt the 0nIminium prrjoct Ws lren desigmJ in ansideration if the size am shape if the prrperty, thereby creatirrg interr:st am ~ 'Cistas as a persen rrmes aknt, the strret. Further the prr!oct as prr:fJaed Wl1 a>>rp/enrnt the quality if existing dereloprrmt am Wl1 create a 'Cisually pleasint& rK>>detracti7.e relationship bet:uren the prr:fJawi am existing prrjats in thlt the arrhitectwal design, cdor am mzterials am site desi?fl prr:fJawi ~ a an:em for quality am origjna1ity. 3. Subject to the attached Conditions of Approval, the proposed project is not anticipated to result in any significant adverse environmental impacts. Pursuant to the O1lifamia E mirrJl1111?fTtal Qtality Act (CE Q4), the prr:fJawi Residential Desi?fl Redew la:atai at Assessor Para/ Ntmber(s} 374-271-003, 004, 007, 013, 015, 016, as mieuHi am anlitUnd by all applU:able City DiUsims am lJepartrrEnts am Agn:ies, Wl1 rrt haw a significant iffea en the emiromrI!Ylt pursuant txJ attadJed M itigttimM easures am 0n1i:ticn if A PJlYUU1l 4. Conditions and safeguards pursuant to Cllapter 17.82.070 of the Zoning Code, including guarantees and evidence of compliance with conditions, have been incorporated into the approval of the subject project to ensure development of the property in accordance with the objectives of Cllapter 17.82. Pursuant to Soctim.17.82.070 (Actim if the Planning Camissw,y if the Lake Elsimre Municipal 0x1e (LEMC), the prr:fJawi Residential Desi?fl Redew la:ata:i at Assessor Parrel Ntmber(s) 374-271-003, 004,007, 013, 015, 016, Ws lrenscheduledforansiderationamappruwl ifthePIarrningCamissial. PREPARED BY: MATTHEW C. HARRIS, SENIOR PLANNER REVIEWED BY: ROLFE PREISENDANZ, DIRECTOR COMMUNITY DEVELOPMENT ATT AaIMENTS t. 2. PLANNING COMMISSION RESOLUfIONS CONDITIONS OF APPROVAL ACENDA ITEM NO. '2...,. c::; PACE :J,S OF ~ PLANNING COMMISSION STAFF REPORT APRIL 4, 2006 PAGE 13 of 13 PROJECT TITLE: TENTATIVE CONDOMINIUM MAP NO. 33820, CONDITIONAL USE PERMIT NO. 2005-10 AND RESIDENTIAL DESIGN REVIEW NO. 2005-11 FOR "MARINA VILLAGE". 3. EXHIBITS -...." · REDUCfIONS (8 112 X 11) Location Map Overall Architectural Site Plan Open Space Diagram Refuse Diagram Building Composite Floor Plans (First and Second Floor) Building Composite Floor Plans (Third and Roof Plans) Illustrative Courtyard Layout Plan Front, Rear and Alley Elevations Courtyard and Side Elevations Cross Sections Plan 1 Floor Plan Plan 2 Floor Plan Plan 3 Floor Plan Landscape Exhibit Hardscape Exhibit Courtyard Planting Exhibit Recreational Area Exhibit Rough Grading Plans Rough Grading Plan Sections Rough Grading Plans Rough Grading Plan (Retaining Wall) Rough Grading Plan (Erosion Control) Rough Grading Plan (Private Storm Drain) Rough Grading Plan (Private Storm Details) Tentative Tract Map No. 33820 Mitigated Negative Declaration No. 2005-11 Mitigation Monitoring Program Exhibit A Exhibit B Exhibit C Exhibit D Exhibit E Exhibit F Exhibit G Exhibit H Exhibit I Exhibit J Exhibit K Exhibit L Exhibit M Exhibit N Exhibit 0 Exhibit P Exhibit Q Exhibit R Exhibit S Exhibit T Exhibit U Exhibit V Exhibit W Exhibit X Exhibit Y Exhibit Z -...." ,..., AGENDA ITEM NO. 2.10 PAGE d{, OF ,.r- RESOLUTION NO. 2006- A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF LAKE ELSINORE, CALIFORNIA, RECOMMENDING TO THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE APPROVAL OF MITIGATED NEGATIVE DECLARATION NO. 2005-11 FOR MARINA VILLAGE RESIDENTIAL CONDOMINIUM PROJECT WHEREAS, D. R. Horton Inc., has submitted an application for Tentative Condominium Map 33820, Conditional Use Permit No. 2005-10 and Residential Design Review No. 2005-11 for Marina Village residential condominium project. The 5.8 acre site is located at the northeast comer of Lakeshore Drive and Spring Street; and WHEREAS, Marina Village is defined as a "project" by Section 21065 of the California Environmental Quality Act (CEQA), Cal. Public Resources Code Section 21000 et seq., which is defined as an activity which may cause either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in th~ environment and which includes the issuance to a person of a lease, permit, license, certificate, or other entitlement for use by one or more public agencies; and WHEREAS, Mitigated Negative Declaration No. 2005-11 has been prepared to evaluate environmental impacts resulting with the project; and ~ WHEREAS, the Planning Commission of the City of Lake Elsinore has been delegated with the responsibility of making recommendations to the City Council for approving Mitigated Negative Declaration No. 2005-11; and WHEREAS, public notice of said applications has been given, and the Planning Commission has considered evidence presented by the Community Development Department and other interested parties at a public hearing held with respect to this item on April 4, 2006. NOW THEREFORE, the Planning Commission of the City of Lake Elsinore DOES HEREBY RESOLVE as follows: SECTION 1. The Planning Commission has considered the proposed Mitigated Negative Declaration No. 2005-11, prior to making a decision to recommend approval to the City Council. The Planning Commission finds and determines that Mitigated Negative Declaration No. 2005-11 is adequate and prepared in accordance with the requirements of the California Environmental Quality Act (CEQA) which analyzes environmental effects of the project, based upon the following findings and determinations: SECTION 2. That in accordance with State Planning and Zoning law and the City of Lake Elsinore the following findings for the approval of Mitigated Negative Declaration No. 2005-11 have been made as follows: ~. 1. Revisions in the project plans or proposals made by or agreed to by the applicant before a proposed mitigated negative declaration and initial study are released for public review ACENDA ITEM NO. '2.c; PACE .J-l OF 5?0 ~ PLANNING COMMISSION RESOLUTION FOR MITIGATED NEGATIVE DECLARATION NO. 2005-11 Page 2 of2 "-'" would avoid the effects or mitigate the effects to a point where clearly no significant effects would occur. The applicant has made revisions to the project or has agreed to specific conditions which would avoid the effects or mitigate the effects of the project to a point where no significant effects would occur. 2. There is no substantial evidence, in the light of the whole record before the agency, that the project as revised may have significant effect on the environment. Pursuant to the evidence received in the light of the whole record presented to staff the project will not have a significant effect on the environment considering the applicable Conditions of Approval and Mitigation Monitoring Program. 3. Mitigation measures have been required to ensure all potentially significant impacts are reduced to levels of insignificance. Mitigation measures have been required which will reduce significant environmental impacts to the level of insignificance. NOW, THEREFORE, based on the above findings, the Planning Commission of the City of Lake Elsinore DOES HEREBY RECOMMEND that the City Council of the City of Lake Elsinore approve Mitigated Negative Declaration No. 2005-11. "-'" Michael O'Neal, Chairman Lake Elsinore Planning Commission I hereby certify that the preceding resolution was adopted by the Planning Commission at a meeting thereof conducted on April 4, 2006 by the following vote: AYES: Commissioners: NOES: Commissioners: ABSENT: Commissioners: ABSTAIN: Commissioners: ATTEST: Rolfe M. Preisendanz, Secretary to the Planriing Commission "-'" AGENDA 1~._%]tQ PAGE~OF _ /'"""' RESOLUTION NO. 2006- A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF LAKE ELSINORE, CALIFORNIA, RECOMMENDING CITY COUNCIL APPROVAL OF TENTATIVE CONDOMINIUM MAP NO. 33820 FOR "MARINA VILLAGE" A RESIDENTIAL CONDOMINIUM COMMUNITY TO BE LOCATED AT THE NORTHEAST CORNER OF LAKESHORE DRIVE AND SPRING STREET, ASSESSOR PARCEL NUMBER(S) 374-271-003, 004, 007, 013,015 AND 016. WHEREAS, an application has been filed with the City of Lake Elsinore by Chris Faber, D.R. Horton Inc. to request the approval of Tentative Condominium Map No. 33820 for the establishment of a residential condominium community. WHEREAS, the Planning Commission of the City of Lake Elsinore has been delegated with the responsibility of recommending approval of Tentative Condominium Maps for residential projects; and WHEREAS, public notice of said application has been given, and the Planning Commission has considered evidence presented by the Community Development Department and other interested parties at a public hearing held with respect to this item on April 4, 2006; ,""""'" NOW THEREFORE, the Planning Commission of the City of Lake Elsinore DOES HEREBY RESOLVE as follows: SECTION 1. The Planning Commission has considered the proposed request for Tentative Condominium Map No. 33820 and has found it acceptable. The Planning Commission finds and determines that this project is consistent with Section 16 "Subdivisions" of the Lake Elsinore Municipal Code (LEMq, Section(s) 66424 and 66427 of the California Subdivision Map Act (Q;MA), and the Lake Elsinore Municipal Code. In addition, the Planning Commission finds and determines that Mitigated Negative Declaration No. 2005-11 is adequate and prepared in accordance with the requirements of the California Environmental Quality Act (CEQA) which analyzes environmental effects of the Condominium Map based upon the following findings and determinations: SECTION 2. That in accordance with the Section{s} 66424 and 66427 of the California Subdivision Map Act {CSMA} and Section 16 "Subdivisions" of the Lake Elsinore Municipal Code {LEMC}, the following findings for the approval of the condominium map has been made as follows: "......... ACENOA lTEM NO. 'he;; . PACE.21-0F <to RESOLUTION NO. 2006- PAGE NO.2 ~ FINDINGS - CONDOMINIUM SUBDMSION 1. The proposed subdivision, together with the provisions for its design and improvement, is consistent with the General Plan. The proposed subdivision is compatible with the objectives, policies, general land uses and programs specified in the General Plan (Government Code Section 66473.5). The project as designed assists in achieving the development of a well-balanced and functional mix of residential, commercial, industrial, open space, recreational and institutional land uses (GOAL 1.0, Land Use Element) as well as provide decent housing opportunities and a satisfying living environment for residents of Lake Elsinore (GOAL 1.0, Housing Element) 2. The effects this project is likely to have upon the housing needs of the region, the public service requirements of its residents and the available fiscal and environmental resources have been considered and balanced. Considering the effects this project is likely to have upon the needs of the region a condition of approval was implemented which would require the applicant to payment of an in lieu fee calculated to provide sufficient funds to underwrite the long-term affordability of an equivalent number of affordable dwelling units constructed or substantially rehabilitated on other sites within the City's redevelopment project areas. 3. Subject to the attached conditions of approval, the proposed project is not anticipated to ~ result in any significant environmental impact. The project has been adequately conditioned by all applicable departments and agencies and will not therefore result in any significant environmental impacts. NOW, THEREFORE, based on the above Findings, the Planning Commission of the City of Lake Elsinore DOES HEREBY RECOMMEND TO THE CITY COUNCIL APPROVAL of a Tentative Condominium Map No. 33820. Michael O'Neal, Chairman Lake Elsinore Planning Commission I hereby certify that the preceding resolution was adopted by the Planning Commission at a meeting thereof conducted on April 4, 2006 by the following vote: ~ .--- ACENDA ITEM NO. 2S PACE .30 . OF S?o ".-.. ,"""""" ,"""""" RESOLUTION NO. 2006- PAGE NO.3 AYES: Commissioners: NOES: Commissioners: ABSENT: Commissioners: ABSTAIN: Commissioners: ATTEST: Rolfe Preisendanz, Secretary to the Planning Commission ACENDA'TEM NO. PACE =il ~--- OF~O RESOLUTION NO. 2006- A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF LAKE ELSINORE, CALIFORNIA, APPROVING CONDITIONAL USE PERMIT NO. 2005-10 FOR THE ESTABLISHMENT OF "MARINA VILLAGE" A RESIDENTIAL CONDOMINIUM COMMUNITY, TO BE LOCATED AT THE NORTHEAST CORNER OF LAKE SHORE DRIVE AND SPRING STREET, ASSESSOR PARCEL NUMBER(S) 374-271-003, 004, 007, 013, 015 AND 016. ......, WHEREAS, an application has been filed with the City of Lake Elsinore by Chris Faber, D.R. Horton Inc., to request the approval of Conditional Use Permit 2005-10, for the establishment of a residential condominium community. WHEREAS, the Planning Commission of the City of Lake Elsinore has been delegated with the responsibility of approving Conditional Use Permits for residential projects; and WHEREAS, public notice of said application has been given, and the Planning Commission has considered evidence presented by the Community Development Department and other interested parties at a public hearing held with respect to this item on April 4, 2006; NOW THEREFORE, the Planning Commission of the City of Lake Elsinore DOES HEREBY RESOL VB as follows: -...",ttJf SECTION 1. The Planning Commission has considered the proposed request for Conditional Use Permit No. 2005-10 and has found it acceptable. The Planning Commission finds and determines that this project is consistent with the Historic Elsinore Architectural Design Standards and the Lake Elsinore Municipal Code (LEMC). In addition, the Planning Commission finds and determines that the Mitigated Negative Declaration No. 2005-11 is adequate and prepared in accordance with the requirements of the California Environmental Quality Act (CEQA) which analyzes environmental effects of the Conditional Use Permit based upon the following findings and determinations: SECTION 2. That in accordance with Chapter 17.74 (Conditional Use Permits) of the Lake Elsinore Municipal Code (LEMC) the following findings for the project have been made as follows: FINDINGS - CONDITIONAL USE PERMIT 1. The proposed use, on its own merits and within the context of its setting, is in accord with the objectives of the General Plan and the pwpose of the planning district in which the site is located. In arder to adiere a 'llPillt:tlarmi arxi jin.timal nix if rESidential, ~ irJustriaJ, cpen SjXUE, rrrrr?atimal ard institutiavl lard uses, staff has tharru;/Jly ewluatai the lard use a:npatihiliEy, rxise, traffic -...",ttJf ACENDA IT~~O.-:-.2S- PACE~OF 150 ;-.. ,--... ~ RESOLUTION NO. 2006- PAGE NO.2 arxJ ether emirr:nnrntal hazards reIatRd txJ the prcpa<<l 0n1itia1al Use Pemit far a Onlminium Carmmity la:ated at AsSl5sor Parrel NuniJer(s) 374-271-003, 004, 007, 013, 015 arxJ 016. A a:tJ1Tlirlfiy, the prcpa<<l lard use is in an::urrerXl! Wth the dJjet;J:ices if the Getrral Plan ard the ~e if the p/arrning distria in wmh the site is la:atRd 2. The proposed use will not be detrimental to the general health, safety, comfort, or general welfare of persons residing or working within the neighborhood of the proposed use or the Gty, or injurious to property or improvements in the neighborhood or the Gty. In aaurd Wth the ~es if the 0Japter 17.74 (Conditio1131 Use Pennits) if the Lake Elsimre MuniapaJ ~ the City rea1iz<<l that the prcpa<<l aniariniumuse la:ated at Assessor Parad NuniJer(s} 374-271-003, 004, 007, 013, 015 arxJ 016 mry Ime a pa:ential txJ rx;gai:uJy irrput the 'lJl!ifare if persoos residing or mUg Wthin the rxi[/JbarIxxxl or the Cit)t Considering, this, staff has substarrtiatei that all applicahle city Departrrrnts ani Awm Ime b:en affarrJed the cpportuniJ:y for a tixJroogJ reciew if the use ani haw inxnporated all applicahle wmrEJ1/s arxJ/ or wrrlitims reIatRd txJ instal/atim, arxJ m:UrrtenarKe if larxJs~ strret da1icatims, ~ if pcints if uhiaJar irJwe5s ard tg15s ard cmtrd if pa:ential nuisarm, so as txJ elininate any ~ Urpaas txJ the wrral health, safety, cwfart, or wrral 'lJl!ifare if the s~ rri[/JbarIxxxl or the Cit)t 3. The site for the intended use is adequate in size and shape to accommodate the use, and for all the yards, setbacks, walls or fences, landscaping, buffers and other features required by TItle 17 of the LEMC and the Historic Elsinore Architecniral Design Guidelines. 1be -prrpa<<l aniariniumuse la:ataJ at Assessor Para!! NuniJer(s} 374-271-003, 004, 007, 013, 015 ani 016 has b:en desigml in cmsideratim if the size arxJ shape if the prcperty, thereby strerlf!!hening ani enha~ the inmdiate residential a1W. Further, the ptrjea as prcpa<<l, Wl1 a:nplemmt the quality if existirg deCPkprrEnt ani Wl1 (.'J'Wte a rrisually plmsirl& rKn-detrcu.tiw rr:latimship I:xruPen the prcpa<<l ard existirg ptrjws, in that the aniarinium WJ11'IIl1ity has b:en rerieuId txJ ensure adiquate pradsim if scrreningfrrm the publiJ: rilfts-cfwry or adjCUE11t prrperties. 4. The site for the proposed use relates to streets and highways with proper design both as to width and type of pavement to cany the type and quantity of traffic generated by the subject use. 1be -prrpa<<l aniariniumuse la:ataJ at Assessor Parad NuniJer(s} 374-271-003,004, 007, 013, 015 arxJ 016 has b:en rerieuId as txJ its rrlatian txJ the Wdth arxJ type if pa7EJ1'EJ1t nHied txJ carry the type arxJ quantity if trajfr wrratai, in that the City has adequately euduated the pa:ential Urpaas associated Wth the -prrpa<<l aniarinium WJ11'IIl1ity prior txJ its a:ppruud arxJ has anIitiam1 the ptrjert txJ k serur:l by rouIs if adiquate capadry ani design stanianls txJ prucide rwsooahle aa1?SS by em; trude, transit, arxJ bicy:fe 5. In approving the subject use located at Assessor Parcel Number(s) 374-271-003, 004, 007, 013,015 and 016, there will be no adverse affect on abutting property or the pennitted and nonnal use thereof. 1be -prrpa<<l use has b:en t:haratiJy rerieuId ani anIitiam1 by all applicahle City Departnrnts arxJ adSide Awm, elirrinating the pa:ential for any ani all adrerse if[ects en the abuttingprrperty. /"" AGENDAITEMNO._;~ ~ PAGE 23 _OF__ - RESOLUTION NO. 2006- PAGE NO.3 ......, 6. Adequate conditions and safeguards pursuant to Section 17.74.50 of the LEMC have been incotporated into the approval of the Conditional Use Pennit to insure that the use continues in a manner envisioned by these findings for the term of the use. Pursuant to Ser:t:im 17. 74.050 (A ctim if the Planning Cnmiss~ if the Lake E lsimre Municipal Ode (LEMC), the a:nlminium~ kmtaJ at ASSE5Sor Parrel Nurrm(s} 374-271-003, 004, 007, 013, 015 ani 016 has been schet:Iukd for coosideratim ani appruuJ if the Planning Cnmissim NOW, THEREFORE, based on the above Findings, the Planning Commission of the City of Lake Elsinore DOES HEREBY APPROVE Conditional Use Permit No. 2005-10. Michael O'Neal, Chairman Lake Elsinore Planning Commission I hereby certify that the preceding resolution was adopted by the Planning Commission at a meeting thereof conducted on April 4, 2006 by the following vote: AYES: Commissioners: ......, NOES: Commissioners: ABSENT: Commissioners: ABSTAIN: Commissioners: ATTEST: Rolfe Preisendanz, Secretary to the Planning Commission ......, AGENDA ITEM NO. 2...S PAGE B'i OF '?iO ~ RESOLUTION NO. 2006- A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF LAKE ELSINORE, CALIFORNIA, RECOMMENDING CITY COUNCIL APPROVAL OF RESIDENTIAL DESIGN REVIEW NO. 2005-11 FOR THE DESIGN, CONSTRUCTION AND ESTABLISHMENT OF "MARINA VILLAGE" A RESIDENTIAL CONDOMINIUM COMMUNITY, TO BE LOCATED AT THE NORTHEAST CORNER OF LAKSHORE DRIVE AND SPRING STREET, ASSESSOR PARCEL NUMBER(S) 374-271-003, 004, 007, 013,015 AND 016. WHEREAS, an application has been filed with the City of Lake Elsinore by Chris Faber, D.R. Horton Inc., to request the approval of Residential Design Review No. 2005-11 for the design, construction and establishment of a residential condominium community; and WHEREAS, the Planning Commission of the City of Lake Elsinore has been delegated with the responsibility of recommending approval of Design Reviews for residential projects; and ,,-.. WHEREAS, public notice of said application has been given, and the Planning Commission has considered evidence presented by the Community Development Department and other interested parties at a public hearing held with respect to this item on April 4, 2006; NOW THEREFORE, the Planning Commission of the City of Lake Elsinore DOES HEREBY RESOLVE as follows: SECTION 1. The Planning Commission has considered the proposed request for Residential Design Review No. 2005-11 and has found it acceptable. The Planning Commission finds and determines that this project is consistent with the Historic Elsinore Architectural Design Standards and the Lake Elsinore Municipal Code (LEMC). In addition, the Planning Commission finds and determines that Mitigated Negative Declaration No. 2005-11 is adequate and prepared in accordance with the requirements of the California Environmental Quality Act (CEQA) which analyzes environmental effects of the Residential Design Review based upon the following findings and determinations: SECTION 2. That in accordance with Chapter 17.82 (Design Review) of the Lake Elsinore Municipal Code the following findings for the project have been made as follows: FINDINGS - DESIGN REVIEW ~ 1. The project, as approved, will comply with the goals and objectives of the General Plan and the Zoning District in which the project is located. The jJrqJaai Residential Desigp Reriew la:atId Wthin Assessor Parrel Nunher(s) 374-271-003, 004, 007, 013, 015, 016, anplies Wth the gds ani dJjoctiw if the Gen:ral Plan, in that the appruud if this AGENDA ITEM N--9. ~ PAGE :;J~ OF l>U RESOLUTION NO. 2006- PAGE NO.2 ......" 0nIminium Canmmity W1l assist in ~ the c/euJoprrrnt if a 'lIIil-ltJarmJ am ~ rrix if residential, ~ irrJustria1, qJen spare, rrD'f!tttim:tJ am institutimallam uses as 'lIIil as ermuagin;, irxlustriallarJ uses to diwsify Lake E Isimre's ean:JI1ic ktse 2. The project complies with the design directives contained in Section 17.82.060 and all other applicable provisions of the Municipal Code. The prrpaed Residential Desi[g'l Redewla:ated at Assessor Parai Nwrkr(s) 374-271-003, 004, 007, 013, 015, 016, is apprrprittte to the site am surrrurWng deuJq;rmrts in that the OnIminiumprrj<<t has lren desigrBi in cmsideratioo if the size am shape if the property, thereby creatirlg interest am mrying 'listas as a persen mJU5 akng the street. Further the prrj<<t as prrpaed W1l wnp/enrnt the quality if exislirf!. c/euJoprrrnt am W1l create a 'lisually pleasirl& nn-detradice relat:imship kturen the prrpaed am exislirf!. prrj<<1s in that the arrhitatural desigj1, cdar am mtteriaJs am site desi[g'l prrpaed erideJn! a anEm far qualityamorigjnality. 3. Subject to the attached Conditions of Approval, the proposed project is not anticipated to result in any significant adverse environmental impacts. Pursuant to the California E mi1WJ1'EJ1l:tJl Qtality Act (CE Q4), the prrpaed Residential Desi[g'l Redew la:ated at Assessor Parai Nwrkr(s) 374-271-003, 004, 007, 013, 015, 016" as rf!lieuBi am anlitia8J by all applimbk Oxy Di'lisims am lJepartrrrnts am Awries, W1l m haw a significant if/irt en the emirannrnt pursuant to atttuhed M itif:P1icnMeasUJ'fS am 0nJitim; if A PfJ1'WJL Conditions and safeguards pursuant to Chapter 17.82.070 of the Zoning Code, including guarantees and evidence of compliance with conditions, have been incorporated into the approval of the subject project to ensure development of the property in accordance with the objectives of Chapter 17.82. Pursuant to Sa.ticn 17.82. 070 (A ctim if the Planning Camiss~ if the Lake E Isimre M uniapal Ode (LEMC), the prrpaed Residential Desi[g'l Redewla:ated at Assessor Parai Nwrkr(s) 374-271-003, 004,007,013,015,016, has lrenscIxrJukJforcmsideratia7.amappruud ifthePlanningCamissim ......, NOW, THEREFORE, based on the above Findings, the Planning Commission of the City of Lake Elsinore DOES HEREBY RECOMMEND TO THE CITY COUNCIL APPROVAL of a Residential Design Review No. R 2005-11. Michael O'Neal, Chairman Lake Elsinore Planning Commission """ AGENDA ITEM NO. 'hC PAGE 3b OF <60 J ~ ~ ~ RESOLUTION NO. 2006- PAGE NO.3 I hereby certify that the preceding resolution was adopted by the Planning Commission at a meeting thereof conducted on April 4, 2006 by the following vote: AYES: Commissioners: NOES: Commissioners: ABSENT: Commissioners: ABSTAIN: Commissioners: ATTEST: Rolfe Preisendanz, Secretary to the Planning Commission ACENDA ITEM NO. ~ c;- PACE 31 OF ~ """" GENERAL CONDITIONS 1. The applicant shall defend (with counsel acceptable to the Gt}1, indemnify, and hold harmless the Gty, its Official, Officers, Employees, and Agents from any claim, action, or proceeding against the Gty, its Official, Officers, Employees, or Agents to attach, set aside, void, or annul an approval of the Gty, its advisory agencies, appeal boards, or legislative body concerning the Tentative Condominium Map, Conditional Use Permit and Residential Design Review which action is brought within the time period provided for in California Government Code Sections 65009 and! or 66499.37, and Public Resources Code Section 21167. The Gtywill promptly notify the Applicant of any such claim, action, or proceeding against the Gty and will cooperate fully with the defense. If the Gty fails to promptly notify the Applicant of any such claim, or proceeding, the Applicant shall not, thereafter, be responsible to defend, indemnify, or hold harmless the Gty. 2. The applicant shall deliver to the Planning Department a cashier's check or money order made payable to the Riverside County aerk in the amount of One Thousand Three Hundred and Fourteen Dollars ($1,314.00) to enable the Gtyto File the Notice of Determination. Said filing fee shall be provided to the Gtywithin 48 hours of project approval. 3. The applicant shall comply with those mitigation measures identified in the Mitigation Monitoring Program adopted with the Mitigated Negative Declaration. """" TENTATIVE CONDOMINIUM MAP NO. 33820 4. Tentative Condominium Map No. 33820 will expire two (2) years from date of approval unless within that period of time the <X'.&R's and an appropriate instrument has been filed and recorded with the County Recorder, or an extension of time is granted by the Gty of. Lake Elsinore Gty Council in accordance with the Subdivision Map Act. 5. The Tentative Condominium Map shall comply with the State of California Subdivision Map Act and shall comply with all applicable requirements of the Lake Elsinore Municipal Code, 'TIde 16 unless modified by approved Conditions of Approval. 6. Prior to the first certificate of occupancy, the applicant shall prepare and record <X'.&R's against the condominium complex. The <X'.&R's shall be reviewed and approved by the Community Development Director or Designee and the Gty Attorney. The CC&R's shall include methods of maintaining common areas, parking and drive aisle areas, landscaped areas including parkways, and methods for common maintenance of all underground, and above ground utility infrastructure improvements necessary to support the complex. In addition, the CC&R's shall establish methods to address design improvements. """" ACENDA ITEM ~ 2.~ PACE 3 L OF 'iJO /"'" CONDITIONS OF APPROVAL FOR TENTATIVE CONDOMINIUM MAP NO. 33820, RESIDENTIAL DESIGN REVIEW NO. 2005-11 AND CONDITIONAL USE PERMIT NO. 2005-10 FOR THE "MARINA VILLAGE CONDOMINIUMS". 7. No unit in the development shall be sold unless a cOIporation, association, property owner's group or similar entity has been fonned with the right to financially assess all properties individually owned or jointly owned which have any rights or interest in the use of the common areas and common facilities in the development, such assessment power to be sufficient to meet the expenses of such entity, and with authority to control, and duty to maintain, all said mutually available features of the development. Such entity shall operate under recorded CC&R's which shall include compulsory membership of all owners of lots and! or dwelling units and flexibility of assessments to meet changing costs of maintenance, repairs, and services. Recorded CC&R's shall permit enforcement by the Gty for provisions required as Conditions of Approval. The developer shall submit evidence of compliance with this requirement to, and receive approval of, the Gty prior to making any such sale. This condition shall not apply to land dedicated to the Gtyfor public pUIpOses. 8. Provisions to restrict parking upon other than approved and developed parking spaces shall be written into the covenants, conditions and restrictions for each project. 9. Membership in the Home Owner's Association shall be mandatory for each buyer and any successive buyer. ,.,-... 10. Reciprocal covenants, conditions, and restrictions and reciprocal maintenance agreements shall be established which will cause a merging of all development phases as they are completed, and embody one (1) homeowner's association with common area for the total development of the subject project. 11. In the event the association or other legally responsible person(s) fail to maintain said common area in such a manner as to cause same to constitute a public nuisance, said Gty may, upon proper notice and hearing, institute summary abatement procedures and impose a lien for the costs of such abatement upon said common area, individual units or whole thereof as provided by law. 12. Each unit owner shall have full access to commonly owned areas, facilities and utilities. RESIDENTIAL DESIGN REVIEW NO. 2005-11 13. Design Review approval for Residential Design Review No. 2005-11 will lapse and be void unless building permits are issued within one (1) year of Gty Council approval. 14. Conditions of Approval shall be reproduced on page one of building plans submitted to the Building Division Plan Cl1eck All Conditions of Approval shall be met prior to the issuance of a Certificate of Occupancy and release of utilities. 15. All site improvements approved with this request shall be constructed as indicated on the approved site plan, grading plan and elevations. Revisions to approved site plans, grading plans or building ---- elevations shall be subject to the review of the Community Development Director. All plans submitted for Building Division Plan Cl1eck shall conform to the submitted plans as modified by Conditions of Approval, or the Planning Commission! Gty Council through subsequent action. . ACENDA ITEM NO. ? e:;- PACE '3 ~ OF (St> CONDITIONS OF APPROVAL FOR TENTATIVE CONDOMINIUM MAP NO. 33820, RESIDENTIAL DESIGN REVIEW NO. 2005-11 AND CONDITIONAL USE PERMIT NO. 2005-10 FOR THE "MARINA VILLAGE CONDOMINIUMS". ......, 16. All roof mounted or ground support air conditioning units or other mechanical equipment incidental to development shall be architecturally screened or shielded by landscaping so that they are not visible from neighboring property or public streets. Any material covering the roof equipment shall match the primary wall color. 17. All exterior on-site lighting shall be shielded and directed on-site so as not to create glare onto neighboring property and streets or allow illumination above the horizontal plane of the fixture. All light fixtures shall match the architectural style of the building. 18. No exterior roof ladders shall be permitted. 19. Applicant shall use roofing materials with Class " K fire rating. 20. All exterior downspouts shall be concealed or architecturally screened and painted to match the exterior color of the building. 21. The Planning Division shall approve the location of any construction trailers utilized during construction. All construction trailers shall require a cash bond processed through the Planning Division. ......, 22. Materials and colors depicted on the plans and materials board shall be used unless modified by the Community Development Director or designee. 23. Decorative paving shall be included at the drive entryways and pedestrian crossings and shall be shown on the construction drawings submitted to Building and Safety. 24. On-site surface drainage shall not cross sidewalks. 25. Parking stalls shall be double-striped with four-inch (4") lines two feet (2') apart. 26. All exposed slopes in excess of three feet (3') in height shall have a pennanent irrigation system and erosion control vegetation installed, approved by the Planning Division. PRIOR TO GRADING PERMITS 27. The applicant shall comply with all requirements established by the Multiple Species Habitat Conservation Plan (MSHCP) and shall pay the Multi Species Habitat Conservation Plan fee of $859.00 per dwelling unit. 28. Prior to issuance of any grading permit or building permits, the applicant shall sign and complete an <<Acknowledgement of Conditions" form and shall return the executed original to the Planning Division for inclusion in the case records. ......, AGENDA lTEfo8 NOo_ 7. ~ - PAGE f1u _OF /"'. CONDITIONS OF APPROVAL FOR TENTATIVE CONDOMINIUM MAP NO. 33820, RESIDENTIAL DESIGN REVIEW NO. 2005-11 AND CONDITIONAL USE PERMIT NO. 2005-10 FOR THE "MARINA VILLAGE CONDOMINIUMS". 29. Prior to the commencement of grading operations, the applicant shall provide a map of all proposed haul routes to be used for movement of dirt material. Such routes shall be subject to the review and approval of the Oty Engineer. A bond may be required to pay for damages to the public right-of - way, subject to the approval of the Oty Engineer. 30. Three (3) sets of the Final Landscaping/Irrigation Detail Plan shall be submitted, reviewed and approved by the Oty's Landscape Architect Consultant and the Community Development Director or designee, prior to issuance of building permit. A Landscape Plan Cleck & Inspection Fee will be charged prior to final landscape approval based on the Consultant's fee plus forty percent (40%) Oty fee. a) All planting areas shall have permanent and automatic sprinkler system with 100% plant and grass coverage using a combination of drip and conventional irrigation methods. b) Applicant shall plant street trees, selected from the Oty's Street Tree List, a maximum of forty feet (40) apart and at least twenty-four-inch (24") box in size. c) All planting areas shall be separated from paved areas with a six inch (6") high and six inch (6") wide concrete curb. ,r-- d) Planting within fifteen feet (15' of ingress/egress points shall be no higher than thirty- six inches (36"). e) Landscape planters shall be planted with an appropriate parking lot shade tree to provide for 50% parking lot shading in fIfteen (15) years. f) Any transformers and mechanical or electrical equipment shall be indicated on landscape plan and screened as part of the landscaping plan. g) The landscape plan shall provide for ground cover, shrubs, and trees and meet all requirements of the Oty's adopted Landscape Guidelines. Special attention to the use of Xeriscape or drought resistant plantings with combination drip irrigation system to be used to prevent excessive watering. r-- h) All landscape improvements shall be bonded 100% for material and labor for two years from installation sign-off by the Oty. Release of the landscaping bond shall be requested by the applicant at the end of the required two years with approval! acceptance by the Landscape Consultant and Community Development Director or Designee. All landscaping and irrigation shall be installed within affected portion of any phase at the time a Certificate of Occupancy is requested for any building. i) j) Final landscape plan must be consistent with approved site plan. AGENDA ITEM NO. ~7<::::' PAGE [,{ { ~OF <6"0 CONDITIONS OF APPROVAL FOR TENTATIVE CONDOMINIUM MAP NO. 33820, RESIDENTIAL DESIGN REVIEW NO. 2005-11 AND CONDITIONAL USE PERMIT NO. 2005-10 FOR THE "'-" "MARINA VILLAGE CONDOMINIUMS". k) Final landscape plans to include planting and irrigation details. 31. An Encroachment Penmt shall be obtained for any constroction related activities occurring within Riverside County Flood Control District right-of-way or facilities. PRIOR TO ISSUANCE OF ABUILDING PERMIT 32. Prior to the issl:1ftBce of baHding permits, the applietlBt sl:Wl eater iftte an agreement ~1th the Redevelopment Ageaey of the Oty of Lake Elsinore t<> p~:ide 15% of the Wlit5 in the preject as affordable hO\:lSmg units in accoroa-nee -with the requirements of Section 33H3(b) of the Califomia CommWlity Redevelopment law or an alternative eq,mvil:leflt actiOR "Which may ind1:1€le (without limitation) aeaieatioR of vaCaflt land, COnstI1:lCtioR of aff<>Rlable 1:H1:its OR aflother site, or payment of ilfl in HeU fee cakulated to provide sl:lffieient f1:1I1ds to lillflerwnte the loag term aff<>Rlability of ilfl. cqmvil:leBt awnbcr of affoRlable dwelling Wlit5 cOlliltrueted or soostantiaRy reaahilitat-ed on other sites withia the Otis redevdopmeftt project areas. Prior to the isStfaru if any ~pemit for the Prrj<<:t, JJeukper shall enter into an agreenwt Wth the City ard the RedeuJqmmtAwryifthe City if Lake Elsimre tofrudde(a) 15% if the units wnstn/dai in the Prrjoct as affardaJie hwsing units in aarmlaru Wth the raptirenmts if Sectim 33413{b) (2) if the GJifamia CumuniEy RedeuJqmmt Law (Health ard Safety Oxk Sectims 33000 et s<<JJ, or (b) an alternatire equiwlent aaim as deterrmm by the City 71hith mry irx1ude (W1hcut linitatiaY dedicatim if 7lKar1t lard, wnstruaim if ajJurdaJie units 00 amber site, or pttyrEnt if an in lieu Ire at the rate if $2.00 per square firt as assessahle SJkUE far eadJ duelling unit in the Prrject. For purpaes if this cxnIitim, <<assessahle SJkUE" rrm:ns all if the square faral}? Wthin the perim:ter if a residential stn<<:ture, 1tt ~ any carport, w.Jk'llltJ, Fat}?, ~ patio, erJa<<i patio, detadx:d aaESSory stn<<:ture, or sinilar arm The arrm:nt if the square faral}? Wthin the perim:ter if a residential stn<<:ture shall be calaJataJ by the ~ dejxrrtmmt if the City in aa:urr:IanE Wth the starrlard praaile if the City in cakuIating StnldUraJ perim:ters. (M a1ified by PlarTl1irg CamissUn 4-4-06) "-WI' 33. The Home Owner's Association shall be established prior to the occupancy release of the first dwelling unit. 34. The applicant! developer shall pay the Public Building Impact fee in the amount of $1,234 per dwelling unit. 35. Applicant shall comply with the requirements of the Elsinore Valley Municipal Water District (EVMWD). Proof shall be presented to the QUef Building Official prior to issuance of building pemnts and fmal approval. 36. Prior to issuance of building pemnts, applicant shall provide assurance that all required fees to the Lake Elsinore Unified School District have been paid. 37. Prior to issuance of building pemnts, applicant shall pay park-in-lieu fee in effect at time of building penrut ISsuance. ~ ACENDA ITEM NO. ~. . PACE Y r OF <g'"U ~ CONDITIONS OF APPROVAL FOR TENTATIVE CONDOMINIUM MAP NO. 33820, RESIDENTIAL DESIGN REVIEW NO. 2005-11 AND CONDITIONAL USE PERMIT NO. 2005-10 FOR THE "MARINA VILLAGE CONDOMINIUMS". ENGINEERING General Requirements: 38. A grading plan signed and stamped by a Calif. Registered Gvil Engineer shall be required if the grading exceeds 50 cubic yards or the existing flow pattern is substantially modified as determined by the Gty Engineer. 39. Prior to commencement of grading operations, applicant to provide to the Gty with a map of all proposed haul routes to be used for movement of export material. Such routes shall be subject to the review and approval of the Gty Engineer. 40. All grading shall be done under the supervision of a geotechnical engineer and he shall certify all slopes steeper than 2 to 1 for stability and proper erosion control. All manufactured slopes greater than 30 ft. in height shall be contoured. 41. Tract Phasing Plan shall be approved by the Gty Engineer. Bond public improvements for each Phase as approved by the Gty Engineer. Secondary access shall be provided for each phase. ~ 42. An Encroachment Permit shall be obtained prior to any work on Gty right-of- way. 43. All utilities except electrical over 12 KV shall be placed underground, as approved by the setving utility. Arrangements for relocation of utility company facilities (power poles, vaults, etc.) out of the roadway or alley shall be the responsibility of the property owner or his agent. 44. Underground water rights shall be dedicated to the Gty pursuant to the provisions of Section 16.52.030 (LEMq, and consistent with the Gtis agreement with the Elsinore Valley Municipal Water District. 45. The applicant shall install permanent bench marks to Riverside County Standards and at a location to be determined by Gty Engineer. 46. Provide fire protection facilities as required in writing by Riverside County Fire. Developer shall provide an approved open space conservation easement for the tracts open space with a fuel modification zone for a fire break to be maintained by a homeowner's association. 47. The applicant shall obtain permits from Riverside County Flood Control District for improvements into flood control facilities or maintenance access road. 48. Applicant shall pay all applicable development fees, including but not all inclusive: 1UMF, MSHCP, ~ TIF and area drainage fees. AOEIIDA ITEM 1100_ ~ W PAGE L1':j ___OF _ CONDITIONS OF APPROV AI. FOR TENTATIVE CONDOMINIUM MAP NO. 33820, RESIDENTIAL DESIGN REVIEW NO. 2005-11 AND CONDITIONAL USE PERMIT NO. 2005-10 FOR THE '-"" "MARINA VILLAGE CONDOMINIUMS". 49. 10 year storm runoff shall be contained within the curb and the 100 year storm runoff shall be contained within the street right-of-way. When either of these criteria is exceeded, drainage facilities shall be provided. 50. Applicant shall protect all downstream properties from damages caused by alteration of the drainage patterns, i.e., concentrations or diversion of flow. Protection shall be provided by constructing adequate drainage facilities including enlarging existing facilities and! or by securing a drainage easement. A maintenance mechanism shall be in place for any private drainage facilities constructed on-site or off-site. Any grading or drainage onto private off site or adjacent property shall require a written permission to grade and! or a permission to drain letter from the affected landowner. 51. All drainage facilities in this tract shall be constructed to Riverside G>unty Flood Control District Standards. An access road for maintenance to detention! water quality basins shall be provided. 52. All compaction reports, grade certifications, monument certifications (with tie notes delineated on 8 ~" x 11" Mylar) shall be submitted to the Engineering Division before final inspection of public works improvements will be scheduled and approved. 53. A precise sUlVeywith closures for boundaries and all lots shall be provided per the LEMC 54. Street improvements including street lighting, traffic signals, and traffic signing and striping shall be required as part of this project. The improvements shall be prepared by a registered civil engineer and shall meet city and! or riverside county standards. '-' 55. Street lighting and landscaping on public right-of-way shall be maintained by a maintenance assessment district or a homeowner's association. 56. All open space and slopes except for public parks and schools and flood control district facilities, outside the public right-of-way will be owned and maintained by either a home owner's association or private property owner. An access road for maintenance shall be provided. 57. All waste material, debris, vegetation and other rubbish generated during cleaning, demolition, clear and grubbing or other phases of the construction shall be disposed of at appropriate recycling centers. The applicant should contract with CR&R Inc. for recycling and storage container services, but the applicant may use the services of another recycling vendor. Another recycling vendor, othercthan CR.&R. Inc., cannot charge the applicant for bin rental or solid waste disposal. If the applicant is not using CR.&R. Inc. for recycling services and the recycling material is either sold or donated to another vendor, the applicant shall supply proof of debris disposal at a recyt:ling center, including verification of tonnage by certified weigh master tickets. 58. In accordance with the Oty's Franchise Agreement for waste disposal & recycling, the applicant shall be required to contract with CR&R Inc. for removal and disposal of all waste material, debris, vegetation and other rubbish generated during cleaning, demolition, clear and grubbing or all other ......, phases of construction. ACENDA ITEM NO. 2e:;- PACE L( L{ OF $G' /"'" CONDITIONS OF APPROVAL FOR TENTATIVE CONDOMINIUM MAP NO. 33820, RESIDENTIAL DESIGN REVIEW NO. 2005-11 AND CONDITIONAL USE PERMIT NO. 2005-10 FOR THE "MARINA VILLAGE CONDOMINIUMS". 59. Protect palm trees in place, or contact the Community Services of Gty of Lake Elsinore for Palm Tree Presetvation Program, LEMC 5.78 Ordinance 1044. 60. On-site drainage shall be conveyed to a public facility, accepted by adjacent property owners by a letter of drainage acceptance, or conveyed to a drainage easement. 61. All natural drainage traversing the site shall be conveyed through the site, or shall be collected and conveyed bya method approved by the Gty Engineer. 62. Roof drains shall not be allowed to outlet directly through coring in the street curb. 63. Roofs should drain to a landscaped area. 64. Applicant shall comply with all NPDES requirements in effect; including the submittal of a Water Quality Management Plan (WQMP) as required per the Santa Ana Regional Water Quality Control Board. .~ 65. Education guidelines and Best Management Practices (BMP) shall be provided to residents of the development in the use of herbicides, pesticides, fertilizers as well as other environmental awareness education materials on good housekeeping practices that contribute to protection of storm water quality in the Riverside county NPDES Drainage Area Management Plan. 66. A portion of the project site is in the FEMA 100-yr floodplain. The developer shall comply with the provisions of the Gtyof Lake Elsinore Floodplain Management requirements (Cbapter 15.64). Prior to Approval of final Map, unless other timing is indicated, the subdivider shall complete the following or have plans submitted and approved, agreements executed and securities posted: 67. Applicant shall record CC & R's for maintenance of slopes, drainage facilities, and street lighting within the project. The CC & R's shall be approved by the Planning Director prior to recordation of final map. 68. Applicant shall enter into an agreement with the Gty for the construction of public works improvements and shall post the appropriate bonds prior to final map approval. 69. Applicant shall obtain all necessary off-site easements for off-site grading from the adjacent property owners prior to final map approval. 70. All Public Works requirements shall be complied with as a condition of development as specified in the Lake Elsinore Municipal Code (LEMq prior to final map approval. ~, AGENOAITEM NO, 'A~D PAGE!iS--OF CONDITIONS OF APPROVAL FOR TENTATIVE CONDOMINIUM MAP NO. 33820, RESIDENTIAL DESIGN REVIEW NO. 2005-11 AND CONDITIONAL USE PERMIT NO. 2005-10 FOR THE ....." "MARINA VILLAGE CONDOMINIUMS". 71. Make an offer of dedication for all public streets and easements required by these conditions or shown on the Tentative Map. All land so offered shall be granted to the Gty free and clear of all liens and encumbrances and without cost to the city. 72. A Calif. Registered Gvil Engineer shall prepare street and drainage improvement plans and specifications. Improvements shall be designed and constructed to Riverside County Road Department Standards, latest edition, and GtyO>des (LEMC 12.04 and 16.34). Street improvement plans shall show existing and future profiles at centerline of street, at top of cuID and at centerline of the alley. The profiles and contours will extend to 50' beyond the property limits. 73. Unless designated as private streets, interior streets shall be dedicated and improved to public residential street standards (40'/60'). Private streets shall be a minimum of 32' unless other widths are approved by the Fire Department. 74. Construct half-width street improvements on Spring Street (60/40) and on Limited Street (60/40) along the project frontage. The improvements shall include ac pavement, cuID and gutter, sidewalk, street lighting, signing and striping, and necessary drainage improvements. Note: The improvements on Limited Street shall extend up to the existing improvements on the bridge 75. Construct full-width street improvements on Lakeshore Drive (60/40) along the project frontage. The improvements shall include ac pavement, curb and gutter, sidewalk, street lighting, signing and striping, necessary drainage improvements, and cul-de-sac. ....." 76. Construct a pedestrian bridge over the flood control channel on Lakeshore Drive. The specific design details of the bridge shall be approved by the Gty Engineer. 77. Drainage curb inlets shall be provided at the comer of Lakeshore Drive and Spring Street and at the end of the cul-de-sac of Lakeshore Drive. 78. Traffic Signing and Striping plans shall be required with the street improvement plans. Signing and striping shall be installed in accordance with the plans approved by the GtyTraffic Engineer. 79. Contribute on a fair share basis to the cost of traffic improvements on 115 @ Main Street Northbound and Southbound Ramps. Prior to Issuance of a Grading Permit: 80. Submit grading plans with appropriate security, Hydrology and Hydraulic Reports prepared by a Registered Gvil Engineer for approval by the Gty Engineer. Developer shall mitigate any flooding and! or erosion downstream caused by development of the site and! or diversion of drainage. 81. Provide soils, geology and seismic report including street design recommendations. Provide final soils report showing compliance with recommendations. ~ AOENDA J~. 1)10. ~c:;- PACE L{b OF 00 CONDITIONS OF APPROVAL FOR ~ TENTATIVE CONDOMINIUM MAP NO. 33820, RESIDENTIAL DESIGN REVIEW NO. 2005-11 AND CONDITIONAL USE PERMIT NO. 2005-10 FOR THE "MARINA VILLAGE CONDOMINIUMS". 82. An Alquis- Priolo study shall be perfonned on the site to identify any hidden earthquake faults and! or liquefaction zones present on-site. 83. The applicant shall obtain all necessary off-site easements for off-site grading and! or drainage acceptance from the adjacent property owners prior to grading permit issuance. 84. Applicant to provide erosion control measures as part of their grading plan. The applicant shall contribute to protection of storm water quality and meet the goals of the BMP in Supplement <<A" in the Riverside County NPDES Drainage Area Management Plan. 85. Applicant shall provide the city with proof of his having filed a Notice of Intent with the Regional Water Quality Control Board for the National Pollutant Discharge Elimination System (NPDES) program with a storm water pollution prevention plan prior to issuance of grading permits. The applicant shall provide a SWPPP for post construction, which describes BMP's that will be implemented for the development and including maintenance responsibilities. . Prior to Issuance of Building Permit: ~ 86. All Public Works requirements shall be complied with as a condition of development as specified in the Lake Elsinore Municipal Code (LEMq prior to building permit. 87. ~treet dedications and abandonment shall be processed and approved prior to building permit ISsuance. 88. Submit a "Will Serve" letter to the Gty Engineering Division from the applicable water agency stating that water and sewer arrangements have been made for this project and specify the technical data for the water service at the location, such as water pressure and volume etc. Submit this letter prior to applying for a building permit. 89. Pay all Gtpital Improvement Mitigation Fees and Plan ClJ.eck fees (LEMC 16.34). 90. Pay the fair share cost of Traffic Improvements for Main Street and 115 northbound and southbound ramps. Prior to Occupancy: 91. Pay all fees and meet requirements of an encroachment permit issued by the Engineering Division for construction of public works improvements (LEMC12.08, Res.83-78). All fees and requirements for an encroachment permit shall be fulfilled before Certificate of Occupancy. 92. The improvements specified herein and approved by the Planning Commission and the GtyCouncil ,- shall be installed, or agreements for said improvements, shall be submitted to the Gty for approval by the Gty Engineer, and all other stated conditions shall be complied with. All uncompleted improvements must be bonded for as part of the agreements. ACENDA ITEM NO. '"2.~ PACE~OF ~ CONDITIONS OF APPROVAL FOR TENTATIVE CONDOMINIUM MAP NO. 33820, RESIDENTIAL DESIGN REVIEW NO. 2005-11 AND CONDITIONAL USE PERMIT NO. 2005-10 FOR THE """" "MARINA VILLAGE CONDOMINIUMS". 93. All compaction reports, grade certifications, monument certifications (with tie notes delineated on 8 1/2" x 11" Mylar) shall be submitted to the Engineering Division before final inspection of off-site improvements will be scheduled and approved. 94. All public improvements shall be completed in accordance with the approved plans to the satisfaction of the Gty Engineer. 95. All traffic signing and striping shall be completed in accordance with the approved plans to the satisfaction of the Gty Traffic Engineer. 96. Water and sewer improvements shall be completed in accordance with Water District requirements. 97. The pedestrian bridge as' required of this development shall be operational and open to the public. 98. All mitigation fees and fair share costs for traffic improvements shall be paid. COMMUNITY SERVICES DEPARTMENT 99. Developer to pay park fees of $1,600 per unit ($147,200) or receive park credits for channel improvements. """" 100. All interior landscape, recreation areas, facilities and! or open space to be maintained by the HOA No park credits. 101. Developer to complywith all NPDES storm water requirements. 102. Developer to participate in Gty-wide LLMD. 103. Developer to annex into LLMD District 1 for all exterior landscaping to be maintained by the Gty. 104. All interior streets and! or roadways to be maintained by the HOA 105. HOA to maintain all catch basins, collectors, v-ditches or any other related flood control or storm water control device. 106. Developer to design a multi-family recyt:ling plan through the Gty and CR&R. 107. Developer to comply with all Gty Ordinances regarding construction debris removal and recycling as per Section 8.32 of the Lake Elsinore Municipal Code. 108. Developer to install a pre-fabricated steel pedestrian bridge (that meets or exceeds Riverside G:mnty Flood Control freeboard requirements) and entry plaza approach to the bridge at the channel. The """" ACENDA ITEM W. zs: PACE Lf OF ~ CONDITIONS OF APPROVAL FOR "..-- TENTATIVE CONDOMINIUM MAP NO. 33820, RESIDENTIAL DESIGN REVIEW NO. 2005-11 AND CONDITIONAL USE PERMIT NO. 2005-10 FOR THE "MARINA VILLAGE CONDOMINIUMS". final bridge design and improvements shall be reviewed and approved by the Corrununity SelVices and Community Development Departments. . 109. Developer to improve both sides of the channel to match existing walkways. Developer to utilize park fee credits for the improvements adjacent to the development. Gty to fund west side improvements. 110. Developer to meet Gty curb, gutter and sidewalk requirements for improvements along Spring Street between Limited and Lakeshore and development boundaries along Limited Street. 111. All existing palms (Oilifomia Fan Palms [12] and Canary Island Date Palms [2] to be incorporated into the project landscaping or donated to the Gtyand relocated at the developer's expense. 112. Ornamental iron fencing to be consistent with existing wrought iron fencing along the channel between Graham Avenue and Sumner Street. 113. Gty to work with Developer in obtaining Army Corps of Engineers, Fish and Game, and Riverside County Flood Control approvals for channel improvements. Gty to maintain all channel improvements at its sole expense. ,..-- 114. Lake Elsinore Historical Society to be contacted during grading to consult on historical artifacts found during construction of the project. Developer agrees to donate all artifacts to the Society in perpetwty. DEPARTMENT OF ADMINISTRATIVE SERVICES 115. Prior to approval of the Final Map, Site Development Plan, or Conditional Use Pennit (as applicable) the applicant shall annex into Corrununity Facilities District 2003-1 to offset the annual negative fiscal impacts of the project on public safety operations and maintenance issues in the Gty. 116. Prior to approval of the Final Map, Site Development Plan or Conditional Use Pennit (as applicable), the applicant shall annex into Lighting and Landscape Maintenance District No.1 to offset the annual negative fiscal impacts of the project on public right-of-way landscaped areas to be maintained by the Gtyand for street lights in the public right-of-way for which the Gtywill pay for electricity and a maintenance fee to Southern California Edison. 117. Upon completion of the Fire Station Impact Study and other impact fee studies, developer shall pay impact fee. 118. Prior to approval of the Final Map, Site Development Plan, or Conditional Use Pennit (as applicable), the applicant shall annex into the Mello-Roos Corrununity Facilities District to fund the ___ ongoing operation and maintenance of the new parks, parkways, open space and public storm drains constructed within the development and federal NPDES requirements to offset the annual negative fiscal impacts of the project. /' AGENDA 1TEl!' NO. ~~U = PACE C( q OF CONDITIONS OF APPROVAL FOR TENTATIVE CONDOMINIUM MAP NO. 33820, RESIDENTIAL DESIGN REVIEW NO. 2005-11 AND CONDITIONAL USE PERMIT NO. 2005-10 FOR THE ""'" "MARINA VILLAGE CONDOMINIUMS". RIVERSIDE COUNTY FIRE DEPARTMENT 119. The applicant shall comply with all Riverside County Fire Department conditions and standards (See attached conditions from Fire Department). CONDITIONAL USE PERMIT NO 2005-10 120. Conditional Use Permit No. 2005-10 approved herein shall lapse and shall become void one (1) year following the date on which the use permit became effective, unless prior to the expiration of one year, a building permit is issued and construction commenced and diligendy pursued toward completion on the site. 121. The Conditional Use Permit shall comply with the all applicable requirements of the Lake Elsinore Municipal Code; Tide 17 unless modified by approved Conditions of Approval. 122. The Conditional Use Permit granted herein shall run with the land and shall continue to be valid upon a change of ownership of the site or structure which was the subject of this approval. 123. The applicant shall at all times comply with Section 17.78 (Noise Contro~ of the Lake Elsinore Municipal Code which requires noise or sound levels to be below 50 decibels between the hours of 7:00 am to 10:00 pm and below 40 decibels between the hours of 10:00 pm to 7:00 am in nearby residential areas. ""'" 124. Security lighting shall be required. All exterior on-site lighting shall be shielded and directed on-site so as not to create glare onto neighboring property and streets or allow illumination above the horizontal plane of the fixture. ......., ACENDA ITEM NO. ?-~ PACE .'50 OF OU I1t'lK-cQ-cUUO rKI Utl; lU Hfl KIV W r lKt r&t fAX NO. 951 955 4886 P. 02 03/24/06 Riverside County LMS Page: 1 06:31 CONDITIONS OF APPROVAL ", ,,-. Library conditions 10. GENERAL CONDITIONS .::zroS-n FIRE DEPAR'I'MENT t-E-c~_.~J~ Iv, ^~~~ 3 10.FIRE.999 CASE - CITY CASE STATEMENT DRAFT With respect to the conditions of approval for the referenced project, the Fire Department recommends the following fire protection measures be provided in- accordance with Riverside County ordinances and/or recognized fire protection standards: 10. FlRiL 999 USE-#50-BLUE DOT REFLECTOR DRAFT Blue retroreflective pavement markers shall be mounted on private street, public streets and driveways to indicate location of fire hydrants. Prior to installation, placement of markers must be approved by the Riverside County Fire Department. 10.FlRE.999 USE*-#23-MlN REQ FIRE FLOW nAAFT ,,-.... Minimum required fire flow shall pe ~bOOGPM for a ~lhour duration at 20 PSI residual operating pressure, whicn must be available before any combustihle mater~. ~ placed on the job site. Fire flow is based on type construction per the 200~ cae and Building(s) having a fire sprinkler system. 10.FIRE.999 USE-#19-0N/OFP LOO~ED HYD DRAFT A combination of on-site and off-site super fire hydrants, on a looped system {6"x4"x2 1/2"x2 ~/2"}# will be located not less than 25 feet or more than 105 feet from any portion of the building as measured along approved vehicular travel ways. The requ~red fire flow shall be available from any adjacent hydrants(s) in the system. 10.FlRE.999 USE-#25-GATE ENTRANCES DRAFT ,,-.... Gate entrances shall be at least two feet wider than the width of the traffic lane(s) serving that gate. Any gate providing access from a road to a-driveway shall be located at least 35 feet from the ro~away and shall open to allow a vehicle to stop without Obstructing traffic on the road. Where a one-way road with a single traffic lane provides accesa to a gate entrance, a 40 foot turning radius shall be used. ?C~~ e ~\- -S\..c-\\ ~D.~?\ '\ ~ \\-"-. ~ ~ U'5~~e.. ro~,,\\ () ~b .7~7.;). (. P.~~" ~~s;e ~ ~~Lt ~ S ) ACENDA ITEM "0. .J-,S pAGE 57 OF ~ ) ntm-c:q-c:uuo rto utj i lU Hrt KI V l.iU r IKt r&t. rm NU. ::101 ::100 iJtltlo 03/24/06 06:31 Riverside County LMS CONDITIONS Of' APPROVAL Library conditions 10. GENERAL CONDITIONS 10.FIRE.999 USE*-#8SA-AUTO. GATES Gate(s) shall be automatic operated, minimum~~ feet in width, with a setbaok of 35 feet from face of curb/flow line. Gate access shall be equipped with a rapid entry system. Plans shall be submitted to the Fire Department for approval prior to installation. Automatic/manual gate pins shall be rated with shear pin force, not to exceed 30 foot pounds. Automatio gates shall be equipped with. emergency backu~ power. Gates activated by the rapid entry aystem shall remain open until closed by the rapid entry system. (cu~rent plan check deposit base fee is $t26.00) 80. PRIOR TO BLDG PRMT ISSUANCE . FIRE DEPARTMENT 80.FIRE.999 USE-#17A-BLDG ~~ CHECK $ Building Plan check deposit base fee of $1,056.00, shall be paid in a check or money oraer to the Riverside County Fire Department after plans have been approved by our office. 80.FIRE.999 USE-#4-WATER P~S The applicant or developer shall separately submit two copies of the water system plans to the Fire Department for review and approval. calculated velocities ahall not exceed 10 feet per second. Plans shal~ conform to the fire hydrant types, location and spacing, and the system shall meet the fire flow requirements. Plans shall be signed and approved by a registered civil engineer and the local water company with the following oertifioation: "I certify that the design of the water system is in accordance with the requirements prescribed by the Riverside county Fire DeF"?.~t;ment." 90. PRIOR TO BLDG FINAL INSPECTION FIRE DEPARTMENT 90.FIRE.999 USE-#45-FlRE ~ES The applicant shall prepare anq submit to the Fire Department for approval, a site plan designating required fire lanes with appropriate lane painting and/or signs. P. 03 Page: 2 ~ DRAFT DRAFT ....." DRAFT DRAFT ....." ACENDA ITEM NO~ ;J.. S- PACE .5d-':OF oU I 11 1I~ c.... c..vvv I"I~ 1 VU' 1 V ru I l~ 1 Y UU 1 1l\L. I IXL. I" on nu. vi.} 1 vi.}i.} 'tUUU f. U'f 03/24/06 06:31 Riverside County LMS CONDITIONS OF APPROVAL Page: 3 ,;--. ".ibrary Condi t ions -~.l! '\ ! 90. PRIOR TO BLOG FINAL INSPECTION 90.FlRE.999 USE-#66-DISPLAY BOARDS DRAFT ~ Display Boards will be as follows: Each complex shall have an illuminated diagrammatio representation of the actual layout which shows name of complex, all streets~ building designators, unit members, and fire hydrant locations within dimension and located next to roadway access. 90.FIRE.999 USE-#12A-SPRI:m<J:,ER SYSTEr{\-\;~ \Z~5e '5''lS\.~~ Install a complete fire sprinkler system per NFPA 13 1999 edition (13D and 13R system are not allowed) in all buildings requiring a fire flow of 1500 Gl?M or greater. Sprinkler system(s) with pipe s~2e~ in excess of 4" in diamter will require the project structural engineer to certify {wet signature} the stability of the building system for seismic and gravity loads to support the .sprinkler system. All fire sprinkler risers shall be protected from any physical damage. The post indicator valve and fire department connection shall be located to the front~ within 50 feet of a hydrant, and a minimum of 26 feet from thehuilding(a). A statement tb,at the building(s) wilt be automatically ;ire sprinkled must be included on the title page of tbe building plans. (current sprinkler plan check deposit base fee is $614.00 per riaer) ") pplicant or developer shall be responsible to install a .L. Central Station Monitored Fire Alarm System. Monitoring system shall monitor the fi.e sprin~ler system(s) water flow, P.I.V.'a and all control valves. Plans must be SUbmitted to the Fire Pepartment for approval prior to installation. Contaot fire department for gUideline handout (current monitoring plan check deposit base fee is $192.00) 90.FIRE.999 USE-#35-VOICB FIRE ALARM(\~:~\.. ~:'Sc. S,,\'5~~RAFT Applicant or developer shall be responsible to install a manual and automatic pre-recorded VOICE Fire Alarm System. Plans must be submitted to the Fi+e Department for approval prior to installation. (current plan check deposit base fee is $627.00) 90.FlRE.999 USE-#27-EXTINGUISH~RS DRAFT Install portable fire extinguishers with a minimum rating of 2A-IOBC and signage.Fire Extinguishers located in public '<-) "-'", ACENDA ITEM NO. ~s:=... PACE ."53 OF <00 ru-m.-c:q-c:uuo tKI Uti; IU ftJ1 Kl V tiU tlKr. t'&t. ,. AX NO. Hb I Hbb 4886 P. 05 03/24/06 06:31 Riverside Coqnty LMS CONDtTIONS OF APPROVAL Page; 4 Library Conditions .~ 90. PRIOR TO BLDG FINAL INSPgCTION 90.FlRE.999 USE-#27-RXTINGUISHERS (cont., DRAFT areas shall be in recessed cabinets mounted 481f Cinches) to center above floor level with maximum 4" projection from the wall. Contact Fire Department for proper placement of equipment prior to installation. 90.FIRE.999 USE-#3G-llOOD DUCTS (c..\'-b \\o-s~ .DRAF'I' A U.L. 300 hood duct fire extinguishing system must be installed over the COOking equipment. Wet chemical extinguishing system mustproviQe automatic shutdown of all . electrical componets and outlets under the hood Upon activation. System must be installed by a licensed C-16 contractor. Plans must be supmitted with current fee to the Fire Department for review and approval prior to inatallation. NOTE; A dedicated alarm system is not required to be installed for tpe excluaive purpose of monitoring this.suppression syatem. However, a new or pre-existing alarm system must be connected to the extinguiShing system. (* separate fire alarm plans must be submitted for connection) (au:rrent plan check depoait ....",. base fee is $215.00) ....", ,,- ACENDA ITEM NO. 7-~ PACE .5 '1 OF gru ~ VICINITY MAP TENTATIVE CONDOMINIUM MAP NO. 33820 CONDITIONAL USE PERMIT NO. 2005-10 RESIDENTIAL DESIGN REVIEW NO. 2005-11 "MARINA VilLAGE" \) ~ " \ ! ,.-- ) AGENDA ItEM NO._ '2 50 - PACE...1?5 OF \ ~ ~ ~ '" ~ ~ 1""--0-4 1""--0-4 ':It - ,~ ~ "- > ~ --... - - ':It U ~ ... ~ ... "- ~ ,~ ~ - ~ ...... .- .~ ~ ... ~ ........ ':It 04 r .....r < f- f- -- ~ eo :::> tI) ~ p,J -- > p,J ,:x; ~~ - z ~. (,) sfg .... -- ii t o tI) g p,J g Q - ; ~~~s ~ ~~~~~~g~~~~ddddddd :; :1:1" ~ljl j !! ~a J~~ ~JJJ ! ~ z;: l~J ~JJ -_ J IJlt lJ.ijt~1j; ~~~jJiJ~J~JJJJ JJ{tltl!J'JJJJJJi.JJfffffff JJJJ~J~JljJ~~~j~Jl111111 ~~~~ rl d~~dg~~~~~g_~Q~Q~~ i I I I ! ! - - XUII ~. . ~-.I :5.. .. ~~;,.. ~-I ~% - II ~'-I ~.. I ....., ! !f ~ ! be ~ K:1; = Q ~ ~, g - g E J J "1 J I1I1 i II ~ ~ ~ i! .~ ~ .~ '- 1 ~.. ~.. J ~. ~JJ.! H I~ J 1 lSlS-I~ j ~ ~ j . .~. 1 J <Jt5~ "$i!" J ~ J ~ J j I 1 1 J J J ~.I ~ I "'" j j f f J i ~ J dJ ~ ~ j ~ i !. ...., ! ~. . ,- ACENDA ~T NO. -25 -------- ..-. PACE 5.b (JF"""<,{O ~ !:i!!f:il!l;il!!:il,f;il,l : 55 ! Ull ::!.:~ ~' it. I '<^"" f 1.1.} 1 dj~d~1J11 U.d d !iU ": . _i!~M: gJ JU G. _ . t .-1;". <; ..~I llhttL J~JI j j j II ~: III h If Iii ~ i !I, 1 I " ! 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J~ f~ ~~~ ~ I i J I i Iii! hi;1 i.' ..! it II II? ~l tl U II ! - - -" ~ . ,,,,~ ) ~ '" ... III I!: .., ~ ~ '\ :::l ~ ... ;t t~ ~ ~i ~ ~~". t: --'" !Xl ~... ..... ......-....& 0 ::t: ......" :><: --...:: ~ ,~ ~ ~ > v .' ,Z ) Z -.l -:;:. <( --..:: .~ ....:t ...~ ~ =" flo- .... ~-: ~.~ ~ ~ I ~ ........_-J :; I! ~ I ~ 3>< II I a ~~ e i I I I~ ~ II ~ ~!l~:l ~ n ~I d I ~ i ~Ii ~t ~ It ~E ~~.I I I I I ~€) I .~[ l -_J I AGENDA ITEM NO. i JaAGE 61 OF 7!O " J .. - jj .. uf ~ iJl j I .. ~t J .. I, Ii ~ ~ J .... ~ i . ~ f J! t'&j~.~ ! ~~ E: )- ... < ( i 5 ~ k <i! ~ I~ Ij~; ~ ! ~ i I '" ~ . "ii, di~ q II,~ ~mil.! t t I ~ .-00 ~6 Be ACENDA ITEM NO.' ~ACE70.. -: ~ I ~ ~I ..j , ! .~ ~ ~ ~ II~~ .Jtl. ::>, ... ... .~ : .~ :; '..... '; ;.... .." .... ~... .... ~<~ ..~... ....... . ; ," =1""""" ;:.....t.. =. = J .l '-If! J ~ .~ i ~!;i ~ il~-- a ~ '.Iii' ~. "il . ~ Q.I s~ ~ ~I'i! o~"'1 g z::la z", ~ .=51- ~ f-.o .O!l:l ~< 0 z ~. l! < ~~ :! ....:I n ~:i ~ 0... << <. 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On October 4,2005, the City sent out a Request For Proposal (RFP) to firms to perform "agreed upon procedures" related to certain bond transactions. On November 8, 2005, the City Council awarded the contract to Vavrinek, Trine, Day & Co., LLP. DISCUSSION Several meetings occurred with the City Treasurer, the firm partner and the City Staff throughout the course of performing the scope of work listed in the RFP. On March 15, 2006, the final meeting occurred and a draft report was presented, reviewed and finalized with concurrence of the City Treasurer and City Staff. The final report is attached for your review. In summary, the firm performed the procedures identified in the RFP and concluded that: ,r-, . Certain transactions were in compliance with the Abbacy Holding Company agreement and supported with adequate documentation . Bond transaction sources and uses were executed correctly and appropriately addressed the reasons why CFD 91-2 went up from $11 million to $17 million . Provided the City recommendations for improving transparency and accountability through annual component unit financial statement audits of the CFD districts. AOENDA ITEM NO. :3 \ PACE--L-OF.J '-I REPORT TO CITY COUNCIL APRIL 11, 2006 PAGE 2 ...., The City Treasurer has provided his comments on the audit in the attached memo. FISCAL IMPACT The total cost of this project was approximately $16,000 including the cost of staff time of approximately $5,500 and the audit cost of$10,500. These cost exclude the time that Rod Gunn, City Financial Advisor and Don Hunt, Bond Consultant have provided at no charge. Staff spent approximately 80 hours prior, during and after the audit. Implementing the recommendation to have annual audited financial statements would be paid for by each district as part of the administrative costs. Staff has incurred increase efficiency in administering the CFD's which would reduce the administration costs. The increased costs of a district audit net of the savings from the efficiencies will result in no increase in the administrative cost to the property owners. ...., RECOMMENDATION Receive and file. PREPARED BY: MATT N. PRESSEY DIRECTOR OF ADMIN STRATIVE SERVICES APPROVED FOR AGENDA BY: ...., AGENDA ITEM NOo_.;;2, llj. PAGE ~ ~OF~ - ",-.. To: City Council Subject: 2003 Series H Bond Audit From: Peter Weber Date: March 22,2006 Vavrinek, Trine Day & Company have completed the independent audit of the 2003 Series H bond issued in the amount of $30,660,00, in October of2003. The independent audit of the 2003 Series H bond audit has determined the following: . The disbursement of all bond funds and verification of payments has been confirmed with proper documentation and receipts. . Different aspects of bond contracts met legal requirements with regard to bond proceed disbursement and have been in compliance with the full letter of the law. CFD 90-3 are the only funds that need to be reconciled for this issue. Approximately $5,127,184 in future debt service from the failed CFD 90-3 bond was absorbed into the 2003 Series H bond. A forensic audit dating back to 1990 when the bonds were originally issued could be performed to determine the exact amount of money 2003 Series H absorbed from the failed CFD 90-3 issue. After talking with Rodd Gunn, I am not sure if it could be accurately determined and it would be very expenSIve. Wasson Canyon and South Shores are paying $2.5 million to get the defaulted CFD 90-3 free and clear of any bond debt. Unfortunately this settlement did not cover all of the future bond debt ofCFD 90-3. The $2.5 million settlement money from the developers was given to the 2003 ---. Series H bond debt reserve. This leaves approximately $3,570,016 in future debt payments that 2003 Series H homeowners will pay to cover the unpaid CFD 90-3 debt service payments. The city has three options: . Perform a forensic audit to determine the exact money flow of the bond proceeds since 1990 . The city could pay an approximate cost of $318,000 per year required to pay the CFD 90- 3 future bond debt. Presently homeowners of the 2003 Series H bond are paying this debt. . The city can do nothing, the legality of the present payments by 2003 Series H homeowners to pay the CFD 90-3 bond debt has been confirmed by this independent audit. Peter Weber Treasurer ,-. ~\ AGENDA ITEM NO. j .,-r--:-- . PAOE_ 3 -Of Y"--, <sri! Vavrinek, Trine, Day & Co., LLP Certified Public Accountants & Consultants VALUE THE DIFFERENCE -.." INDEPENDENT ACCOUNTANT'S REPORT ON APPLYING AGREED-UPON PROCEDURES City of Lake Elsinore 130 S. Main Street Lake Elsinore, CA 92530 Dear Ladies and Gentlemen: We have performed the procedures enumerated below, which were agreed to by the City of Lake Elsinore, solely to assist you with respect to the compli(lnce provisions of the City's agreement with Abbacy Holding Company. This agreed-upon procedure engagement was performed in accordance with standards established by the American Institute of Certified Public Accountants. The sufficiency of the procedures is solely the responsibility of the City of Lake Elsinore. Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose. 1) In accordance with the Abbacy Holding Company Agreement, determine if Abbacy paid the $2.6 million required in the agreement Engagement response: We found documentation indicating $2,600,000 was paid for in accordance with the agreement with Abbacy. ...., 2) In accordance with the Abbacy Holding Company Agreement, determine if Abbacy's reimbursement was supported by adequate supporting documentation and was made in accordance with the agreement. Engagement response: There was sufficient documentation to support the reimbursements made to Abbacy. 3) In accordance with the Abbacy Holding Company Agreement, determine if Abbacy Holding Company or affiliated companies paid their property tax prior to the City reimbursing Abbacy. Engagement response: In a letter dated August 11, 1997 from Don Hunt, the City indicated that the amount needed to cure the defaulted bonds from Abbacy was $2,110,362.50. See Exhibit D. We obtained documentation that indicates the amount ($2,110,362.50) was wired into the workout bond transaction of 1997. See Exhibit E. AGENDA ITEM NO. .::3 \ PAGE 'f OF I L/ 8270 Aspen Street Rancho Cucamonga. CA 91730 Tel: 909.466.4410 Fax: 909.466.4431 www.vtdcpa.com FRESNO . LAGUNA HILLS . PALO ALTO . PLEASANTON . RANCHO CUCAMONGA ....,. /"'"' 4) Verify that the Sources and Uses in the official statements of the 2003 Series H bond issue were executed for their stated purpose. Engagement response: We found documentation that verified the sources and uses of funds were utilized for their intended purpose. See Exhibit A recaps the Sources and Uses of the 2003 Series H Bond Issue Exhibit B shows the application of bond proceeds to the various uses Exhibit C shows an itemization of expenses that comprise Cost of Issuance 5) Determine why the bonds for CFD 91-2 went up from $11 million to $17 million as part of the new overlay district CFD 98-1. Engagement response: There was $4,016,522 of unpaid interest from the original bonds that had to be accounted for in the overlay district. In addition, the overlay district had $2,224,121 in underwriter's discount and $1, 125,000 for Interest Rate conversion. Overall, the workout plan was unable to cover all items and portions of the amount due were absorbed by. the various participants. Generally, the aforementioned items were the main portions that added to the principal of the new bonds to be $17 million. See Exhibit F /"'"' 6) Provide any recommendations on how the City can better monitor the financial aspects of City formed community facilities districts. Engagement response: We recommend that the City develop a policy for issuing annual component unit financial statements for districts that generate a certain amount in annual revenue. We suggest a threshold of either $500,000 or $1,000,000 in annual revenue. We were not engaged to, and did not; perform an examination, the objective of which would be the expression of an opinion on the compliance of the agreement requirements with Abbacy Holding Company. Accordingly, we do not express such an opinion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you. This report is intended solely for the information and use of the City of Lake Elsinore and is not intended to be and should not be used by anyone other than this specified party. v~, 'l~/ O~ ~Cu'/ LL-(l Rancho Cucamonga, California March 8, 2006 ,-- AGENDA ITeM NO. .3 \ PAGE 5 OF /4 Exhibit A City of Lake Elsinore Public Financing Authority 2003 Local Agency Revenue Refunding Bonds Series H '" Bond Proceeds All Only Sources Sources of Funds: Principal Amount of Bonds $ 31,570,000 $ 31,570,000 Less: Underwirter's Discount $ (789,250) $ (789,250) Less: Original Issue Discount $ (865,400) $ (865,400) Total Bond Proceeds $ 29,915,350 $ 29,915,350 Other Available Funds $ 902,505 Total $ 29,915,350 $ 30,817,855 Uses of Funds: Escrow Fund $ 23,307,534 $ 23,969,217 Series H Expense Fund $ 835,000 $ 835,000 Series Reserve Fund $ 2,718,492 $ 2,718,492 Developer Reimbuarsement $ 2,136,471 $ 2,136,471 Agency Reimbursement $ 500,000 $ 500,000 Capitalized Interest Account $ 417,853 $ 658,675 Total $ 29,915,350 $ 30,817,855 '" "'-"'" AGENDA ITEM NO. PAGE ~ 3\ OF {4 _ ~ ( '-....- ,.",.- \ ......... ",--.. Exhibit B Page 1 SCHEDULE A APPLICATION OF MONEYS AT CLOSING In accordance with the terms of the Indenture and Supplemental Indenture, the Trustee shall transfer the proceeds from the sale of the Bonds in the amount of $29,915,349.90, as follows: (1) to the Series H Reserve Fund the sum of $2,718,491.50 representing the Initial Reserve Requirement; (2) to the Series H Expense Fund the sum of $835,000.00 to pay Program Expenses; (:3) to the Series H Capitalized Interest Account the sum of$417,853.55; (4) to the Escrow Agent for deposit in the Escrow Fund established under the Escrow Agreement the sum of $23,307,533.85; (5) to the City of Lake Elsinore Redevelopment Agency for reimbursement of advances the sum of $500,000.00; . (6) to the Abbacy Holding Corporation the sum of $2,136,471.00, as a portion ofthe acquisition price for the City of Lake Elsinore Community Facilities District No. 98-1 (Summerhill Public Improvements) Special Tax Bonds, Series 2003. The Trustee shall transfer the amounts set forth in Requisition No. I of the Authority from the Series H Expense Fund by check or wire to the order of the respective payees. AGENDA ITEM NO. .;; \ PAGE 7 OF 14 - l" (\. '" I ( Exhibit B Page 2 LAKE ELSINORE PUBLIC FINANCING AUTHORITY 2003 LOCAL AGENCY REVENUE BONDS, SERIES'H ......,/ DIRECTION OF THE AUTHORITY AS TO APPLICATION OF MONEYS AT CLOSING February 13,2003 Union Bank of California, N.A., as Trustee Ladies and Gentlemen: We provide you herewith, in accordance with the provisions of, the Indenture, dated as of February 1, 1990, as amended and restated in full as of May 1, 1995 (the "Indenture") and the Eighth Supplemental Indenture of Trust, dated as of February 1, 2003 (the "Supplemental Indenture"), by and between the Lake Elsinore Public Financing Authority (the "Authority") and Union Bank of California, N.A., as trustee (the "Trustee"), the proceeds to the Authority from the Authority's $31,570,000 aggregate principal amount of 2003 Local Agency Revenue Bonds, Series H (the "Bonds"). In accordance with the Indenture and the Supplemental Indenture, you are hereby directed to deposit and transfer on the date hereof from the proceeds to the Authority from the sale of the Bonds the sum of $29,915,349.90 (which equals the $31,570,000 principal amount thereof, less an Underwriter's discount of $789,250.00, less original issue discount of $865,400.10). You are directed to transfer and apply such amounts required as shown in Schedule A attached """""" hereto. LAKE ELSINORE PUBLIC FINANCING AUTHORITY '- By: &k&~ Executive Director/Secretary ....." AGENDA ITEM NO. -3 { PAGE g OF --' Lf Exhibit C page As of2/20/03 '~ \ $31,570,000 LAKE ELSINORE PUBLIC FINANCING AUTHORITY 2003 LOCAL AGENCY REVENUE REFUNDING BONDS, SERIES H COSTS OF ISSUANCE Fulbright & Jaworski L.L.P. Bond Counsel $ 315,700.00 Rod Gunn Associates, Inc. Financial Consultant $ 315,700.00 Union Bank of California NA Trustee $ 5,000.00 Union Bank of California NA Fiscal Agent $ 4,000.00 BNY Western Trust Company Escrow Agent $ 2,120.00 Burke Williams & Sorensen Underwriter's Counsel $ 30,000.00 VanBlarco~ Leibold, et al City Attorney $ 22,500.00 /'-_. Grant Thornton LLP Verification $ 3,500.00 c."..-... 1 Merrill Corp. Official Statement Printing $ 38,370.84 CUSIP Numbers $ 373.00 City Reimbursements $ 91,800.00 Miscellaneous $ 5,936.16 $ 835,000.00 (F AGENDA ITEM NO. ~~ \ PAOE~OF~Lf Exhibit C Page 2 ( LAKE ELSINORE PUBLIC FINANCING AUTHORITY 2003 LOCAL AGENCY REVENUE BONDS, SERIES H "" . REQIDSITION NO.1 FOR DISBURSEMENT FROM SERIES H EXPENSE FUND The undersigned hereby states and certifies: (i) that he is the duly appointed, qualified and acting Executive Director/Secretary of the Lake Elsinore Public Financing Authority, Ii joint exercise of powers authority duly organized and validly existing under the laws of the State of California (the "Authority") and, as such, is familiar with the facts herein certified and is authorized to certify the same; (ii) that he is an "Authorized Representative" of the Authority, as such term is defined in Section 1.01 of that certain Indenture of Trust, dated as of February 1, 1990, as amended and restated in fUll as of May I, 1995 (the "Indenture"), by and between the Authority and Union Bank of California, N.A., as successor trustee (the "Trustee"); (iii) that, pursuaQt to Section 3.03 of the Indenture, the Trustee is hereby directed to disburse this 4ate from the Series H Expense Fund for payment of Program Expenses, as such terms are defmed in the Indenture, to the payees listed on Exhibit A attached hereto and by this reference incorporated herein the amount listed opposite each such payee on said Exhibit A; and ( (iv) that each item identified on the attached Exhibit Ahas been properly incurred, is a proper " charge against the Series H Expense Fund and has not been the basis of any previous disbursement. .. .....,; Dated: February 13, 2003 LAKE ELSINO~PUBLIC FINANCING AUTHORITY BY~~ Executive Director/Secretary ....." AGENDA ITEM NO. .~ \ PAOe.iO OF..J. 'f ... Exhibit D Page 1 .= ~ TELEPHONE: 213/892-9200 f"ACSIMILE: 213/680-<4518 DONALD L. HUNT PARTNER INTERNET ADDRESS: dhunt@fulbrlght.com DIRECT DIAL: 213/892-9316 FULBRIGHT & JAWORSKI l.l.P. A REGISTERED LIMITED LIABILITY PARTNERSHIP 865 SOUTH FIGUEROA STREET. 29TH FLOOR. Los ANGELES. CALIFORNIA 90017-2571 HOUSTON WASHINGTON. D.C. AUSTIN SAN ANTONIO DALLAS NEW YORK LOS ANGELES LONDON HONG KONG August 11, 1997 BNY Western Trust Company 700 South Flower Street 2nd Floor Los Angeles, California 90017-4104 Attention: William F. Chambers Re: Lake Elsinore Public Financing Authority 1990 Local Agen~ Revenue Bonds. Series A - Purchase of Bonds For Redemption ~ Ladies and Gentlemen: A wire transfer of moneys held on your behalf has been directed to your account in the amount of $2,110,362.50 which payment cures the default existing with respect to the above-referenced bonds. Included in this amount is $1,005,181.25 due with respect to the remaining outstanding Bonds in connection with the April 1, 1997 interest payment. Also included in this amount is $131,343.75 held for the October 1, 1997 interest payment, a $73,131.25 Reserve Fund Deposit from the April 1, 1997 District Loan Payment due, and an additional voluntary contribution to the Reserve Fund of $800,706.25, as well as a voluntary contribution of $100,000 for deposit to the Administrative Expense Fund for payment of expenses incurred and/or to be incurred by the Trustee. We also transmit or have directed transmittal (through Union Bank of California, N.A.) to you in your capacity as Trustee with respect to the above-referenced Bonds: 1. Registered Bonds purchased by the Authority directly from registered bondholders in the principal amount of $2,260,000. ~ 2. Confirmation of the purchase of Registered Bonds through DTC in a principal amount of $19,755,000. I DH08891J962858/#242294.. AGENDA ITEM NO. ~~ \ PAGe'-u-OF 1'-( - Exhibit 0 Page 2 August 11, 1997 Page 2 -..JIll Total Bonds in the principal amount of $22,015,000 (the "Purchased Bonds") have been purchased directly by the Authority and are being delivered to you as Trustee. The purchase directly by the Authority was necessary because of the failure of the Trustee to acknowledge its obligation to complete such purchase on behalf of the Authority. Pursuant to Section 10.02 of the Indenture, the Purchased Bonds shall be cancelled and deemed to be paid and returned. The Authority hereby waives any right to receive the April 1, 1997 interest payment with respect to these Bonds. Very truly yours, ~)i~ Donald L. Hunt DLH:ad "-'" ~ DH08891J9628M1#2.c2294.4 AGENDA ITEM NO.~ PACE-.J~ OF Lf ,-... w ~ I"- en " ro ~ ~ ffi .~ ~ -.... __.--L- ._~t~--.,.-::...,.......!-~-L!.~'~."!-:......::...:....~'~. '--:.-'__-:. _.___ ~ .__:_~ Exhibit E ~ 8 ..... ..... LO It) . . <0 0 co ~ r--. r- (1) 0) .. " ~ 0 0 T"' ..... ..... ..- .... ~ R l:\J C\/ ~~ ~ H s: r- 0) ~ ~ '-.'\ ~ ~ i !~ I"- 1-4 o ~ ~ ~ € I-t ~ i ~ ~ .... > ~ ,--.. . :l; ..... Li.. 8 ...J ~~W ~h~ ~a~~ .............J ~~9.... o3~~ ~ ~. 8 0 ..... ,... III 0 LO . . . . 0 ~ 'lit co .... I"- <0 m .. .. 0 0 .... .... ..... ..... .. .. (\j N I 8 . 0 8 . o 8 . o ~51 ~ ;8l~ 1=<g OJ fil~"!~ ;~~ tS ~~~i8l ~ ! ~li~I~!;~i~ ~ ~ ~ ~~~~m~~~~~~ ~ ~ ~ ~~i~~mg~~~~ ; I"- m " .- M ...... ~ ~ ~ ~ ~ 5 ;: ~ ~ r- t- ~ ~ ('I? M ~ ~ ..... en "' M .- "' ~. AGENDA ITEM NO. <~ \ I PAGE . \ ~ oFl.!::L- : Wdev~l J L6-ll-6 !\ H39'11'N'11'W AlIQ:A.9 IN3S ,M081ld Vl , JOl [5] aU!l XV~~46!M uo (O~:lO) WdO~:lO 2l ctaS pa^!a v #: ('11'1) lH91H91nd ~3~ONIS13 ~1 dO A.11Q Hd95:l0 2l das uo vr390008 a6ew! pa~U!Jd l^MS~MOM .......... City of Lake Elsinore Community Faclities District 1991-2 Summerhill Public Improvements 1991 Special Tax Bonds - Sources and Uses 1991 Special Tax Bonds Sources: Principal Amount of Bonds Discount Net Available Uses: Bond Fund (Capitalized Interest) Costs of Issuance Improvement Fund 12,100,000.00 (363,000.00) 11,737,000.00 1,363,023.44 252,693.00 10,121,283.56 11,737,000.00 Sources: Principal Amount of Bond$ Discount Net Available Uses: Principal & Interest Due Interest Rate conversion Improvement Fund Exhibit F ~ 17,700,000.00 (2,224,121.oo) 15,475,879.00 1<<;;,116,522.62 1,125,000.00 2,136,471.00 19,377,993.62 Amount forgiven by canceling 1991 Bonds 3,902,114.62 1991 Principal Bonds Less Cancel Amount 8,197,885.38 Amount 1991 Bondholders got paid per $1 of bonds 68% ~ ~ ACENDA ITEM NO.~ PAOe-1:LOF ..J..::L: r- CITY OF LAKE ELSINORE REPORT TO CITY COUNCIL \ TO: MAYOR AND CITY COUNCIL FROM: ROBERT A. BRADY, CITY MANAGER DATE: APRIL 11,2006 SUBJECT: RESOLUTION AUTHORIZING THE ISSUANCE OF BONDS AND APPROVING BOND DOCUMENTS FOR COMMUNITY FACILITIES DISTRICT NO. 2005-6 (CITY CENTER) BACKGROUND .r-- On September 13,2005, the City adopted the necessary resolutions and ordinances forming Lake Elsinore Community Facilities District (CFD) 2005-6 (City Center) and authorizing the levy of a special tax. The developer plans to build 144 multi-family dwelling units. DISCUSSION Bond Issue In order to finance the facilities it is necessary to incur bonded indebtedness. The not to exceed amount is $5,000,000. Before you is the resolution authorizing the issuance of bonds and the related bond documents. The bond issue has been sized at $3,365,000. The resolution approves the following bond documents: 1. Fiscal Agent Agreement (Pages 10 to 59 of 336) 2. Continuing Disclosure Agreement (Pages 60 to 68 of 336) 3. Purchase Contract (Pages 69 to 96 of336) 4. Funding, Construction and Acquisition Agreement (Pages 97 to 130 of 336) 5. Preliminary Official Statements (Pages 131 to 336 of336) /"""-' AGENDA ITEM NO. 3:l- PAOE---L-OF 33~ REPORT TO CITY COUNCIL APRIL 11,2006 PAGE 2 "'-ttII' Special Tax The average residential special tax is estimated at $1,611. The annual CFD tax amount, when combined with all other property taxes applicable to the project, is estimated to be approximately 1.80%, which is within the 2% City CFD guidelines. Facilities The proposed facilities list is attached. The list totals $3,015,800. The list contains $387,700 City of Lake Elsinore impact fees, MSHCP of$152,500 and TUMF of $663,400. The list also includes $1,812,200 of EVMWD impact fees and improvements. FISCAL IMPACT Repayment of the bonds are secured by the special taxes levied on all property within the district, other than those properties that are exempt as provided in the respective rate and method of apportionment. "'-ttII' Responsibility for the construction of the improvements is born by the developer. The cost of acquiring the improvements is paid by the CFD bond proceeds. RECOMMENDATION It is recommended that City Council adopt Resolution No. 2006 - .9- which approves the following: 1. Issuance ofCFD 2005-6 (City Center Townhomes) 2006 Series A Bonds 2. Fiscal Agent Agreement 3. Continuing Disclosure Agreement 4. Purchase Contract 5. Funding, Construction and Acquisition Agreement 6. Preliminary Official Statements '-' AGENDA ITEM NO. :!> :;1 PAGE ~ OF 3~~ ,r" REPORT TO CITY COUNCIL APRIL 11, 2006 PAGE 3 PREPARED BY: MATT N. PRESSEY DIRECTOR OF ADM ISTRATIVE SERVICES APPROVED FOR AGENDA BY: ,~ ----- AGENDA ITEM NO. 3 ~ PNiE 3 OF 33c; City Center T ownhomes CFD No. 2005-6 (City Center Townhomes) Exhibit "A" September 7, 2005 Page A-1 Boundary Map ......., PROPOSED BOUNDARY OF COMMUNITY . FACILITIES DISTRICT No. 2005-6 OF THE CITY OF LAKE ELSINORE (CITY CENTER TOWNHOMES) COUNTY OF RIVERSIDE. STATE OF CAUFORNIA ~ - ---to -- -.- -.- -- -- -- -- 3U-~1' ......., _lY IIAP /10 -.r WEIIIl -- t I I SCALE: 1-.1otf ..... If "'" _ t1F "'" cnY _ t1F H at,." ~..- _ __.,,____ IUfW3fT JaW an CURIe QF ... gJT OF ~ ~ ,__ _, H __ __ H _ _" 1IC CITY" ~ ~ =~~=-=~~~~~~." 1HDI'CIf. N1D (If 1N[ _ MY''' _... .,.. JDCIUIICIM ..._ CJlT tl..u. CF 1Ht c;ny aF ..... ~ ~...:...r-.:~~..:r..: --;;;&lIiiii .....~.:-,---"-- . ..,.. CIlPICE OF 1M[ CllUIfY 1ECIIaIt.. 'DC caLIrnY,. ~-m1i15r'c:A&.IlIINL CDUJfTf ~ OF ..... CXIYIJT &IF" ~ .. '-- JERmICE 1H[ IMJtSlD[ CXUIh' ASKSIIII'I .... .. A DETM.ID DmCIIPfDI '" IWICZL .... Me ...... PROPOSED BOUNDARY MAP . ItAIIIS . ASSOCIA1D 16____ -.. ... \101I_."\101I- _.., fMIU_ _ M.. ___ of - c:u;, of .... ___ (c:u;, c:.a_ 1'_) ---- ..... I .. 1 ...-- ---...... ......., -/MM .~..... Q:\ELSINORE\CFD 2005-6 City Center Townhomes\report\Final CFD Report 2005-6 (City Center).doc AGENDA ITEM NO. PAGE L{ ,3:2- OF~ r--- Facilities Cost Estimate Street Improvements $ 647,000 Park Capital Improvement Plan $ 208,800 library Capitallmrovement Plan $ 21,600 Traffic Impact Fees $ 120,700 TUMF Fees $ 663,400 Railroad Canyon Road Benefit Reimbursement District $ 187,800 Fire Department Mitigation Fees $ 57,600 Mutilple Speci~s Habitat Conservation Plan Fees $ 152,500 Water Connection Fees $ 452,400 Sewer Connection Fees $ 504,000 r--- Total Estimated Construction Cost $ 3,015,800 ",-... AGENDA ITEM NO. :3?- PAGE S OF..a.. RESOLUTION NO. 2006-5D ......", RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE AUTHORIZING THE ISSUANCE OF THE CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2005-6 (CITY CENTER TOWNHOMES) SPECIAL TAX BONDS, 2006 SERIES A AND THE EXECUTION AND DELIVERY OF A FISCAL AGENT AGREEMENT, A CONTINUING DISCLOSURE AGREEMENT, A FUNDING, CONSTRUCTION AND ACQUISITION AGREEMENT, A PURCHASE CONTRACT, AND AN OFFICIAL STATEMENT AND APPROVING A PRELIMINARY OFFICIAL STATEMENT IN CONNECTION THEREWITH WHEREAS, the City Council (the "Council") of the City of Lake Elsinore (the "City") has conducted proceedings under and pursuant to the Mello-Roos Community Facilities Act of 1982, as amended (the "Act"), to form the City of Lake Elsinore. Community Facilities District No. 2005-6 (City Center Townhomes) (the "CFD"), to authorize the levy of special taxes upon the land within the CFD, and to issue bonds secured by said special taxes, the proceeds of which are to be used to finance the purchase, construction, expansion or rehabilitation of certain real and other tangible property with an estimated useful life of five years or longer, including public infrastructure facilities and other government facilities, which are necessary to meet increased demands placed upon the City as a result of development or rehabilitation occurring within the proposed CFD (the "Facilities"); and WHEREAS, the Council intends to issue bonds designated "City of Lake Elsinore Community Facilities District No. 2005-6 (City Center Townhomes) Special Tax Bonds, 2006 Series A" (the "Bonds"); and ......", WHEREAS, there have been submitted to this Council certain documents providing for the issuance of the Bonds and this Council, with the aid of its staff, has reviewed said documents and found them to be in proper order; and WHEREAS, all conditions, things and acts required to exist, to have happened and to have been performed precedent to and in the issuance of said Bonds and the levy of said special taxes as contemplated by this Resolution and the documents referred to herein, exist, have happened and have been performed in due time, form and manner as required by the laws of the State of California, including the Act. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS: ......", 45484628.1 AGENDA ITEM NO. j ')- PAGE ~ OF~ - CITY COUNCIL RESOLUTION NO. 2006- Page 2 of 4 ----- SECTION 1. The Council hereby authorizes the issuance of the City of Lake Elsinore Community Facilities District No. 2005-6 (City Center Townhomes) Special Tax Bonds, 2006 Series A (the "Bonds") in an amount not to exceed $4,000,000 for the purpose of financing the Facilities. SECTION 2. The Council hereby approves the Fiscal Agent Agreement in substantially the form annexed hereto. The Mayor, City Manager or Administrative Services Director (each, a "Responsible Officer"), are hereby authorized to execute the Fiscal Agent Agreement in substantially the form annexed hereto, with such revisions, amendments and completions as shall be approved by any Responsible Officer, with the advice of Bond Counsel, such approval to be conclusively evidenced by the execution and delivery thereof. SECTION 3. The Council hereby approves the Continuing Disclosure Agreement in substantially the form annexed hereto. Any Responsible Officer is hereby authorized to execute the Continuing Disclosure Agreement in substantially the form annexed hereto, with such revisions, amendments and completions as shall be approved by any Responsible Officer, with the advice of Bond Counsel, such approval to be conclusively evidenced by the execution and delivery thereof. ----- SECTION 4. The Council hereby approves the Funding, Construction and Acquisition Agreement in substantially the form annexed hereto. Any Responsible Officer is hereby authorized to execute the Funding, Construction and Acquisition Agreement in substantially the form annexed hereto, with such revisions, amendments and completions as shall be approved by any Responsible Officer, with the advice of Bond Counsel, such approval to be conclusively evidenced by the execution and delivery thereof. SECTION 5. The Council hereby approves the Preliminary Official Statement relating to the Bonds, substantially in the form annexed hereto, with such revisions, amendments and completions as shall be approved by any Responsible Officer with the advice of Bond Counsel, in order to make the Preliminary Official Statement final as of its date, except for the omission of certain information, as permitted by Section 240.15c2- 12(b)(l) of Title 17 of the Code of Federal Regulations ("Rule 15c2-12"), and any certificate relating to the finality of the Official Statement under Rule 15c2-12. Any Responsible Officer is authorized and directed to execute and deliver a final Official Statement in substantially the form hereby approved, with such additions and changes as may be approved by Bond Counsel and any Responsible Officer executing the same, such approval to be conclusively evidenced by the execution and delivery thereof. ----- SECTION 6. The Council hereby approves the Purchase Contract, in substantially the form annexed hereto. Any Responsible Officer is hereby authorized to execute the Purchase Contract, in substantially the form annexed hereto, with such 45484628.1 AGENDA ITEM NO. :;;J- PAGE 7 OF~~- CITY COUNCIL RESOLUTION NO. 2006- Page 3 of 4 revisions, amendments and completions as shall be approved by any Responsible Officer, with the advice of Bond Counsel, such approval to be conclusively evidenced by the execution and delivery thereof, provided that, the Purchase Contract shall provide for a true interest cost (including original issue shown) not greater than 6.0%, and an underwriter's discount not greater than 2.0% of the principal amount of Bonds. "-'" SECTION 7. Each Responsible Officer is hereby authorized and directed, for and in the name and on behalf of the City, to do any and all things and take any and all other actions, including the obtaining of municipal bond insurance and the publication of any notices necessary or desirable in connection with the sale of the Bonds and execution and delivery of any and all assignments, certificates, requisitions, agreements, notices, consents, instruments of conveyance, warrants and other documents, which they, or any of them, deem necessary or advisable in order to consummate the lawful issuance and sale of the Bonds and the consummation of the transactions as described herein. SECTION 8. This Resolution shall take effect from and after the date of its passage and adoption. "-'" "-'" 45484628.1 ~ ACENDA ITEM NO. ~ PAGE g OF CITY COUNCIL RESOLUTION NO. 2006- Page 4 of 4 ~ 2006. PASSED, APPROVED AND ADOPTED this _ day of AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: ABSTAIN: COUNCILMEMBERS: ATTEST: ~ . Frederick Ray, City Clerk City of Lake Elsinore APPROVED AS TO FORM: Barbara Zeid Leibold, City Attorney City of Lake Elsinore ;-" 45484628.1 Robert E. Magee, Mayor City of Lake Elsinore ITEM"" NO 3~ AOENDA ."" ~-= PACE-s"-OFg ""'" FISCAL AGENT AGREEMENT BETWEEN THE CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2005-6 (CITY CENTE~ TOWNHOMES) AND UNION BANK OF CALIFORNIA, N.A., AS FISCAL AGENT -...,., DATED AS OF 1,2006 RELATING TO $ CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2005-6 (CITY CENTER TOWNHOMES) SPECIAL TAX BONDS, 2006 SERIES A '-wi' 454405] 9.2 AGENDA ITEM NO. J ;l PAOE-LO OF~ /"""" /"""" ,- TABLE OF CONTENTS Page ARTICLE I DEFINITIONS............................................................................................... .......... ...... ... 1 Section 1.1. Definitions .......................... ............ ..... .................... ............ ................................. 1 ARTICLE II GENERAL AUTHORIZATION AND BOND TERMS .................................................. 9 Section 2.1. Amount, Issuance, Purpose and Nature of Bonds ................................................ 9 Section 2.2. Type and Nature of Bonds ................................................................................. 10 Section 2.3. Equality of Bonds and Pledge of Special Taxes................................................. 10 Section 2.4. Description of Bonds; Interest Rates.................................................................. 11 Section 2.5. Place and Form of Payment ............................................................................... 11 Section 2.6. Form of Bonds.................................................................................................... 12 Section 2.7. Execution and Authentication ............................................................................ 12 Section 2.8. Bond Register...................... ............... ........................ ........................................ 12 Section 2.9. Registration of Exchange or Transfer ................................................................ 13 Section 2.10. Mutilated, Lost, Destroyed or Stolen Bonds ...................................................... 13 Section 2.11. Validity of Bonds ....... ...................... ............. ................................... ........... ....... 13 Section 2.12 . Book-Entry System........................... ....................................................... .......... 14 Section 2.13. Representation Letter........ ............ ......................................................... ............ 14 Section 2.14. Transfers Outside Book-Entry System............................................................... 15 Section 2.15. Payments to the Nominee........ ......................................... ......... ......................... 15 Section 2.16. Initial Depository and Nominee ......................................................................... 15 ARTICLE III CREATION OF FUNDS AND APPLICATION OF SPECIAL TAXES....................... 15 Section 3.1. Creation of Funds; Application of Proceeds ...................................................... 15 Section 3.2. Deposits to and Disbursements from Special Tax Fund .................................... 16 Section 3.3. Interest Account and Principal Account of the Special Tax Fund ..................... 16 Section 3.4. Redemption Account of the Special Tax Fund .................................................. 17 Section 3.5. Reserve Account of the Special Tax Fund ......................................................... 17 Section 3.6. Administrative Expense Account of the Special Tax Fund ............................... 18 Section 3.7. Surplus Fund ....................... ........ ..................... ................ .................................. 18 Section 3.8. Acquisition and Construction Fund.................................................................... 19 Section 3.9. Investments ........................................................................................................ 19 ARTICLE IV REDEMPTION OF BONDS .......................................................................................... 20 Section 4.1. Redemption of Bonds........................................... .............................................. 20 Section 4.2. Selection of Bonds for Redemption ................................................................... 22 Section 4.3. Notice of Redemption .................... .................................................................... 22 Section 4.4. Partial Redemption of Bonds ............................................................................. 23 Section 4.5. Effect of Notice and Availability of Redemption Money.................................. 23 ARTICLE V COVENANTS AND WARRANTy............................................................................... 24 Section 5 .1. Warranty.................................................................................................. ........... 24 Section 5.2. Covenants.................................................................................................... ....... 24 ARTICLE VI AMENDMENTS TO FISCAL AGENT AGREEMENT ............................................... 29 Section 6.1. Supplemental Fiscal Agent Agreements or Orders Not Requiring Bondowner Consent........................................................................................... 29 Section 6.2. Supplemental Fiscal Agent Agreements or Orders Requiring Bondowner Consent..................................................... .......................................................... 30 Section 6.3. Notation of Bonds; Delivery of Amended Bonds .............................................. 31 ARTICLE VII FISCAL AGENT .. .............................................. ......................... ................................... 31 Section 7 .1. Fiscal Agent......................... .................. ............ ........... ...................... ............... 31 Section 7.2. Removal of Fiscal Agent...................................................... ..................... ......... 32 Section 7.3. Resignation of Fiscal Agent.... ............ ..................................... ..... ........ ............. 32 45440519.2 AGENDA ITEM NO. 3~{_ PAGE..JL-OF~ TABLE OF CONTENTS (continued) Page Section 7.4. Compensation and Liability of Fiscal Agent...................................................... 32 Section 7.5. Merger or Consolidation ....................................................................................33 ARTICLE vrn EVENTS OF DEFAULT; REMEDIES .......................................................................... 34 Section 8.1. Events of Default.... .... ............ ....................... ........ ..... ............ ........ ........... ......... 34 Section 8.2. Remedies of Owners ...... ......... .... ............. ....... ........... ............. ............. .............. 34 ARTICLE IX DEFEASANCE......... ................ ....... ..... ......... ...... .................... ................... ....... ............. 35 Section 9.1. Defeasance ....... ........ ................ ........... ........... .... ............... ............ ........ ............. 35 Section 9.2. No Additional Bonds........... ...... ............ ............... ........................ ................ ...... 36 ARTICLE X MISCELLANEOUS ............ ............. ..... ................... .................. ............. ....................... 36 Section 10.1. Cancellation of Bonds ........................................................................................ 36 Section 10.2. Execution of Documents and Proof of Ownership............................................. 37 Section 10.3. Unclaimed Moneys ........... .............. ...... ............ ............ .................. ......... .......... 37 Section 10.4. Provisions Constitute Contract........................................................................... 38 Section 10.5. Future Contracts ......... ....... ....... ............. .......... .............. .......... ....... ......... ........... 38 Section 10.6. Further Assurances ............. ......... ............................. ................. ........ ................. 38 Section 10.7. Severability ....................... ................ ......... ...... ...... .................... ........................ 38 Section 10.8. Notices. ........ .............. ........ ....... ........... ............... ............ ................................... 38 Section 10.9. General Authorization...... .......................... ..... ..... ............. ............ ..................... 38 Section 10.10. Execution in Counterparts.................................................................................. 38 Exhibit A - Form of Bond. ........... .... ......... .............. ......... ......... .................... .... ....... ............. ................ .. A-I Exhibit B - Requisition No.1........ .... ....... ............ .... .............. ................ ........ ............. ....... ..... ............ ... B-1 45440519.2 ACENDA ITEM NO. jJ. PAGE-1~. OF~ 11 .....", .....", ......., ~ mSCALAGENTAGREEMENT THIS FISCAL AGENT AGREEMENT, dated as of 1, 2006, between the City of Lake Elsinore Community Facilities District No.2005-6 (City Center Townhomes) and Union Bank of California, N.A., as fiscal agent (the "Fiscal Agent") governs the terms of the City of Lake Elsinore Community Facilities District No. 2005-6 (City Center Townhomes) Special Tax Bonds, 2006 Series A. .RECITALS: WHEREAS, the City Council of the City of Lake Elsinore (the "Council"), located in Riverside County, California, has heretofore undertaken proceedings and declared the necessity to issue bonds on behalf of the City of Lake Elsinore Community Facilities District No. 2005-6 (City Center Townhomes) (the "CFD") pursuant to the terms and provisions of the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5, Part 1, Division 2, Title 5, of the Government Code of the State of California (the "Act"); and WHEREAS the qualified electors within the CFD have approved the levy of a special tax and the issuance of bonds by the CFD and the CFD has authorized the issuance of bonds in one or more series, pursuant to the Act, in an aggregate principal amount not to exceed $5,000,000; and /'"""' WHEREAS, the Council intends to accomplish the financing of the purchase, construction, expansion or rehabilitation of certain real and other tangible property with an estimated useful life of five years or longer, including public infrastructure facilities and other governmental facilities, which are necessary to meet increased demands placed upon the City as a result of development or rehabilitation occurring within the CFD (collectively, the HFacilities") through the issuance of bonds in an aggregate principal amount of $ designated as the "City of Lake Elsinore Community Facilities District No. 2005-6 (City Center Townhomes) Special Tax Bonds, 2006 Series A" (the "Bonds"); and WHEREAS, all requirements of the Act for the issuance of the Bonds have been satisfied; NOW, THEREFORE, in order to establish the terms and conditions upon and subject to which the Bonds are to be issued, and in consideration of the premises and of the mutual covenants contained herein and of the purchase and acceptance of the Bonds by the Owners thereof, and for other valuable consideration, the receipt of which is hereby acknowledged, the CFD does hereby covenant and agree, for the benefit of the Owners of the Bonds (as defined herein) which may be issued hereunder from time to time, as follows: ARTICLE I DEFINITIONS Section 1.1. Definitions. Unless the context requires, the following terms shall have the following meanings: "Acquisition and Construction Fund" means the fund by such name created and established pursuant to Section 3.1 hereof. "Act" means the Mello-Roos Community Facilities Act of 1982, as amended, Sections 53311 et ~ seq. of the California Government Code. 45440519.2 AGENDA ITEM NO. PAGE l3 3:l OF~ "Administrative Expense Account" means the account by such name in the Special Tax Fund created and established pursuant to Section 3.1 hereof. ...., "Administrative Expenses" means the administrative costs with respect to the calculation and collection of the Special Taxes, including all attorneys' fees and other costs related thereto, the fees and expenses of the Fiscal Agent, any fees for credit enhancement for the Bonds which are not otherwise paid as Costs of Issuance, any costs related to the CFD's compliance with State and federal laws requiring continuing disclosure of information concerning the Bonds and the CFD, and any other costs otherwise incurred by the City's staff on behalf of the CFD in order to carry out the purposes of the CFD as set forth in the Resolution of Formation and any obligation of the CFD hereunder. "Annual Debt Service" means the principal amount of any Outstanding Bonds payable in a Bond Year either at maturity or pursuant to a Sinking Fund Payment and any interest payable on any Outstanding Bonds in such Bond Year, ifthe Bonds are retired as scheduled. "Authorized Investments" means any of the following which at the time of investment are legal investments under the laws of the State for the moneys proposed to be invested therein: (l) Direct obligations of the United States of America (including obligations issued or held in book-entry form on the books of the Department of the Treasury, and CATS and TIGRS) or obligations the principal of and interest on which are unconditionally guaranteed by the United States of America ("Direct Obligations"). (2) Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the following federal agencies and provided such obligations are backed by the full faith and credit of the United States of America (stripped securities are only permitted if they have been stripped by the agency itself): ...., U.S. Export-Import Bank ("Eximbank") Direct obligations or fully guaranteed certificates of beneficial ownership Farmers Home Administration ("FmHA") Certificates of beneficial ownership Federal Financing Bank Federal Housing Administration Debentures ("FHA") General Services Administration Participation certificates Government National Mortgage Association ("GNMA" or "Ginnie Mae") GNMA-guaranteed mortgage-backed bonds GNMA-guaranteed pass-through obligations """""" 45440519.2 2 3:A A(jEN~~~~OF3~ ~ ,-., U.S. Maritime Administration Guaranteed Title XI financing U.S. Department of Housing and Urban Development (HUD) Project Notes Local Authority Bonds New Communities Debentures - U.S. government guaranteed debentures U.S. Public Housing Notes and Bonds - U.S. government guaranteed public housing notes and bonds (3) Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the following non-full faith and credit U.S. government agencies (stripped securities are only permitted if they have been stripped by the agency itself: Federal Home Loan Bank System Senior debt obligations Federal Home Loan Mortgage Corporation ("FHLMC" or "Freddie Mac") ---- Participation certificates Senior debt obligations Federal National Mortgage Association ("FNMA" or "Fannie Mae") Mortgage-backed securities and senior debt obligations Student Loan Marketing Association ("SLMA" or "Sallie Mae") Senior debt obligations Resolution Funding Corp. ("REFCORP") obligations Farm Credit System CM. - Consolidated system-wide bonds and notes (4) Money market funds registered under the Federal Investment Company Act of 1940, whose shares are registered under the Securities Act of 1933, and having a rating by Standard & Poor's of AAAm-G, AAAm or AAm, and, if rated by Moody's, rated Aaa, Aal or Aa2 (including those of the Fiscal Agent and its affiliates). (5) Certificates of deposit secured at all times by collateral described in (1) and/or (2) above. Such certificates must be issued by commercial banks, savings and loan associations or mutual savings banks. The collateral must be held by a third party and the Bondholders must have a perfected first security interest in the collateral. r"' 45440519.2 3 AGENDA ITEM NO. PAGE L5 3J OF~ (6) Certificates of deposit, savings accounts, deposit accounts or money market deposits which are fully insured by FDIC or which are with a bank rated AA or better by Standard & Poor's and Aa or better by Moody's (including those of the Fiscal Agent and its affiliates). ......" (7) Investment Agreements with any corporation, including banking or financial institutions, provided that (a) the long-term debt of the provider of any such investment agreement is rated, at the time of investment, at least "AA" and "Aa" by the Rating Agency (without regard to gradations of plus or minus within such category), and (b) any such investment agreement is collateralized with United States Treasury or agency obligations which at least equal 102% of the principal amount invested thereunder, and (c) any such agreement shall include a provision to the effect that, in the event the long-term debt rating of the provider of such agreement is downgraded below "AA-" or below "Aa" by the applicable Rating Agency, the CFD has the right to withdraw or cause the Fiscal Agent to withdraw all funds invested in such agreement and thereafter to invest such funds pursuant to this Fiscal Agent Agreement. (8) Commercial paper rated, at the time of purchase, "Prime - 1" by Moody's and "A-I" or better by Standard & Poor's. (9) Bonds or notes issued by any state or municipality which are rated by Moody's and Standard & Poor's in one of the two highest rating categories assigned by such agencies. (I 0) Federal funds or bankers acceptances with a maximum term of one year of any bank ...., which has an unsecured, uninsured or unguaranteed obligation rating of "Prime - 1" or "A3" or better by Moody's and "A-I" or "A" or better by Standard & Poor's. (11) Repurchase agreements collateralized by Direct Obligations, GNMAs, FNMAs or FHLMCs with any registered broker/dealer subject to the Securities Investors' Protection Corporation jurisdiction or any commercial bank insured by the FDIC, if such broker/dealer or bank has an uninsured, unsecured and unguaranteed obligation rated "P-l" or "A3" or better by Moody's, and "A-I" or "A-" by Standard & Poor's; provided: (a) a master repurchase agreement or specific written repurchase agreement governs the transaction; and (b) the securities are held free and clear of any lien by the Fiscal Agent or an independent third party acting solely as agent ("Agent") for the Fiscal Agent, and such third party is (i) a Federal Reserve Bank, (ii) a bank which is a member of the Federal Deposit Insurance Corporation and which has combined capital, surplus and undivided profits of not less than $50 million, or (iii) a bank approved in writing for such purpose by Financial Guaranty Insurance Company, and the Fiscal Agent shall have received written confirmation from such third party that it holds such securities, free and clear of any lien, as agent for the Fiscal Agent; and (c) a perfected first security interest under the Uniform Commercial Code, or book entry procedures prescribed at 31 C.F.R. 306.1 et seq. or 31 C.F.R. 350.0 et seq. in such securities is created for the benefit of the Fiscal Agent; and ...., 45440519.2 4 AGENDA ITEM NO. PAGE.J ft, 3~ OF~ ,,--.. (d) the repurchase agreement has a term of 180 days or less, and the Fiscal Agent or the Agent will value the collateral securities no less frequently than weekly and will liquidate the collateral securities if any deficiency in the required collateral percentage is not restored within two business days of such valuation; and (e) the fair market value of the securities in relation to the amount of the repurchase obligation, including principal and interest, is equal to at least 103% (12) Local Agency Investment Fund ("LAlF") ofthe State of California. (13) Any other investment which the CFD is permitted by law to make. "Authorized Representative of the CFD" means the Mayor, City Manager, Administrative Services Director, or any other person or persons designated by the Council and authorized to act on behalf of the CFD by a written certificate signed on behalf of the CFD by the Mayor or the City Manager and containing the specimen signature of each such person. "Bond Counsel" means an attorney at law or a firm of attorneys selected by the CFD of nationally recognized standing in matters pertaining to the tax-exempt nature of interest on bonds issued by states and their political subdivisions duly admitted to the practice of law before the highest court of any state of the United States of America or the District of Columbia. "Bond Register" means the books which the Fiscal Agent shall keep or cause to be kept on which the registration and transfer of the Bonds shall be recorded. ,,--.. "Bondowner" or "Owner" means the person or persons in whose name or names any Bond is registered. "Bonds" means the CFD's $ this Fiscal Agent Agreement. Special Tax Bonds, 2006 Series A, issued pursuant to "Bond Year" means the twelve month period commencing on September 2 of each year and ending on September I of the following year, except that the first Bond Year for the Bonds shall begin on the Delivery Date and end of the first September I which is not more than 12 months after the Delivery Date. "Business Day" means a day which is not a Saturday or Sunday or a day of the year on which banks in New York, New York, Los Angeles, California, or the city where the corporate trust office of the Fiscal Agent is located, are not required or authorized to remain closed. "Certificate of Authorized Representative of the CFD" means a written certificate or warrant request executed by an Authorized Representative of the CFD. "CFD" means the City of Lake Elsinore Community Facilities District No. 2005-6 (City Center Townhomes) established pursuant to the Act and the Resolution of Formation. "City" means the City of Lake Elsinore, California. ~ "Code" means the Internal Revenue Code of 1986 and any Regulations, rulings, judicial decisions, and notices, announcements, and other releases of the United States Treasury Department or Internal Revenue Service interpreting and construing it. 45440519.2 5 3~ AGENDA ITEM NO. PAGE---1l-0F~ "Costs of Issuance" means the costs and expenses incurred in connection with the issuance and sale of the Bonds, including the acceptance and initial annual fees and expenses of the Fiscal Agent and its counsel, legal fees and expenses, costs of printing the Bonds and the preliminary and final official ...., statements for the Bonds, fees of financial consultants and all other related fees and expenses, as set forth in a Certificate of Authorized Representative of the CFD. "Costs of Issuance Account" means the account by such name In the Acquisition and Construction Fund created and established pursuant to Section 3.1 hereof. "Defeasance Securities" means any of the following: (a) Cash (b) United States Treasury Certificates, Notes and Bonds (including State and Local Government Series -- "SLGS") (c) Direct obligations of the U.S. Treasury which have been stripped by the U.S. Treasury itself, e.g., CATS, TIGRS and similar securities. (d) The interest component of Resolution Funding Corp. strips which have been stripped by request to the Federal Reserve Bank of New York and are in book-entry form. (e) & Poor's. Pre-refunded municipal bonds rated "Aaa" by Moody's and "AAA" by Standard (f) Obligations issued by the following agencies which are backed by the full faith and credit of the United States: ......., U.S. Export-Import Bank - direct obligations or fully guaranteed certificates of beneficial ownership Farmers Home Administration - certificates of beneficial ownership Federal Financing Bank General Services Administration - participation certificates U.S. Maritime Administration - guaranteed Title XI financing U.S. Department of Housing and Urban Development (RUD) - Project Notes, Local Authority Bonds, New Communities Debentures - U.S. government guaranteed debentures, U.S. Public Housing Notes and Bonds - U.S. government guaranteed public housing notes and bonds. "Council" means the City Council of the City of Lake Elsinore. "Delivery Date" means, with respect to the Bonds, the date on which the bonds of such issue were issued and delivered to the initial purchasers thereof. "Depository" shall mean The Depository Trust Company, New York, New York, and its successors and assigns as securities depository for the Certificates, or any other securities depository acting as Depository under Article II hereof. ......., 45440519.2 6 AGENDA ITEM NO. PAGEJ g 3;:r OF ~3" ",...-. "Fiscal Agent" means Union Bank of California, N.A., a national banking association duly organized and existing under and by virtue of the laws of the United States of America, at its principal corporate trust office in Los Angeles, California, and its successors or assigns, or any other bank or trust company which may at any time be substituted in its place as provided in Sections 7.2 or 7.3 and any successor thereto. "Fiscal Agent Agreement" means this Fiscal Agent Agreement, together with any Supplemental Fiscal Agent Agreement approved pursuant to Article 6 hereof. "Fiscal Year" means the period beginning on July I of each year and ending on the next following June 30. "Independent Financial Consultant" means a financial consultant or special tax consultant or firm of either such consultants generally recognized to be well qualified in the financial consulting or special tax consulting field, appointed and paid by the CFD, who, or each of whom: (1) is, in fact, independent and not under the domination of the CFD; (2) does not have any substantial interest, direct or indirect, in the CFD; and (3) is not connected with the CFD as a member, officer or employee of the CFD, but who may be regularly retained to make annual or other reports to the CFD. "Interest Account" means the account by such name created and established in the Special Tax Fund pursuant to Section 3.1 hereof. ,,-.... "Interest Payment Date" means each March 1 and September 1, commencing 1, 200-, provided, however, that, if any such day is not a Business Day, interest up to the Interest Payment Date will be paid on the Business Day next preceding such date. "Investment Agreement" means one or more agreements for the investment of funds of the CFD complying with the criteria therefor as set forth in Subsection (7) of the definition of Authorized Investments herein. "Maximum Annual Debt Service" means the maximum sum obtained for any Bond Year prior to the final maturity of the Bonds by adding the following for each Bond Year: (1) the principal amount of all Outstanding Bonds payable in such Bond Year either at maturity or pursuant to a Sinking Fund Payment; and (2) the interest payable on the aggregate principal amount of all Bonds Outstanding in such Bond Year if the Bonds are retired as scheduled. "Moody's" means Moody's Investors Service, its successors and assigns. "Nominee" shall mean the nominee of the Depository, which may be the Depository, as determined from time to time pursuant to Section 2.16 hereof. "Outstanding" or "Outstanding Bonds" means all Bonds theretofore issued by the CFD, except: ,.--... (1) 10.1 hereof; Bonds theretofore cancelled or surrendered for cancellation in accordance with Section 45440519.2 7 ACENDA ITEM NO. 2J;)- PAGE~OF ~~~ - . (2) Bonds for payment or redemption of which monies shall have been theretofore deposited m trust (whether upon or prior to the maturity or the redemption date of such Bonds), provided that, if such Bonds are to be redeemed prior to the maturity thereof, notice of such redemption shall have been '-' given as provided in this Fiscal Agent Agreement; and (3) Bonds which have been surrendered to the Fiscal Agent for transfer or exchange pursuant to Section 2.9 hereof or for which a replacement has been issued pursuant to Section 2.10 hereof. "Participants" shall mean those broker-dealers, banks and other fmancial institutions from time to time for which the Depository holds Bonds as securities depository. "Person" means natural persons, firms, corporations, partnerships, associations, trusts, public bodies and other entities. "Principal Account" means the account by such name in the Special Tax Fund created and established pursuant to Section 3.1 hereof. "Principal Office of the Fiscal Agent" means the office of the Fiscal Agent located in Los Angeles, California or such other office or offices as the Fiscal Agent may designate from time to time, or the office of any successor Fiscal Agent where it principally conducts its business of serving as Fiscal Agent under indentures pursuant to which municipal or governmental obligations are issued. "Project" means those public facilities described in the Resolution of Formation which are to be acquired or constructed. within the CFD, including all engineering, planning and design services and other incidental expenses related to such facilities and other facilities, if any, authorized by the qualified electors within the CFD from time to time. "Project Costs" means the amounts necessary to finance the Project, to create and replenish any necessary reserve funds, to pay the initial and annual costs associated with the Bonds, including, but not limited to, remarketing, credit enhancement, Fiscal Agent and other fees and expenses relating to the issuance of the Bonds and the formation of the CFD, and to pay any other "incidental expenses" of the CFD, as such term is defined in the Act. "..." "Rating Agency" means Moody's and Standard & Poor's, or both, as the context requires. "Record Date" means the fifteenth day of the month preceding an Interest Payment Date, regardless of whether such day is a Business Day. "Redemption Account" means the account by such name created and established in the Special Tax Fund pursuant to Section 3.1 hereof. "Regulations" means the regulations adopted or proposed by the Department of Treasury from time to time with respect to obligations issued pursuant to section 103 of the Code. "Representation Letter" shall mean the Blanket Letter of Representations from the CFD to the Depository as described in Section 2.13 hereof. "Reserve Account" means the account by such name created and established in the Special Tax Fund pursuant to Section 3.1 hereof. ~ 45440519.2 8 AGENDA ITEM NO. PAGE d..[) ?;Jr;. OF '3~ .",-.. "Reserve Requirement" means, as of any date of calculation, an amount equal to the lowest of (I) I 0% of the original proceeds of the Bonds, less accrued interest, if any, less original issue discount, if any, plus original issue premium, if any, or (2) Maximum Annual Debt Service, or (3) 125% of the average Annual Debt Service of the Outstanding Bonds. "Resolution of Formation" means Resolution No. 2006, pursuant to which the Council formed the CFD. adopted by the Council on __, "Sinking Fund Payment" means the annual payment to be deposited in the Redemption Account to redeem a portion of the Term Bonds in accordance with the schedule set forth in this Fiscal Agent Agreement. "Special Taxes" means the taxes authorized to be levied by the CFD on parcels within the CFD in accordance with the Resolution of Formation, the Act and the voter approval obtained at the -' 2006 election in the CFD and any additional special taxes authorized to be levied by the CFD from time to time which are pledged by the CFD to the repayment of the Bonds, together with the proceeds collected from the sale of property pursuant to the foreclosure provisions of this Fiscal Agent Agreement for the delinquency of such Special Taxes remaining after the payment of all the costs related to such foreclosure actions, including, but not limited to, all legal fees and expenses, court costs, consultant and title insurance fees and expenses. "Special Tax Fund" means the fund by such name created and established pursuant to Section 3.1 hereof. ~ "Standard & Poor's" means Standard & Poor's, a division of McGraw-Hill, its successors and assIgns. "Supplemental Fiscal Agent Agreement" means any supplemental fiscal agent agreement amending or supplementing this Fiscal Agent Agreement. "Surplus Fund" means the fund by such name created and established pursuant to Section 3.1 hereof. "Tax Certificate" means the certificate by that name to be executed by the CFD on a Delivery Date to establish certain facts and expectations and which contains certain covenants relevant to compliance with the Code. "Term Bonds" means the Bonds maturing on September 1, _ and September 1,_. "Underwriter" means the institution or institutions, if any, with whom the CFD enters into a purchase contract for the sale of the Bonds. "Written Request of the CFD" means a request in writing executed by the Mayor, City Manager, City Treasurer, or written designee, on behalf of the CFD. ARTICLE II GENERAL AUTHORIZATION AND BOND TERMS ~. Section 2.1. Amount, Issuance, Purpose and Nature of Bonds. Under and pursuant to the Act, the Bonds in the aggregate principal amount of $ shall be issued for the purpose of 45440519.2 9 AGENDA ITEM NO. 2; J. PAGE.-a!-OF 3~ financing the Project, provided that the aggregate principal amount of the Bonds shall not exceed the total indebtedness presently authorized or subsequently authorized by the qualified electors of the CFD in accordance with the Act. The Bonds shall be and are limited obligations of the CFD and shall be payable '-' as to the principal thereof and interest thereon and any premiums upon the redemption thereof solely from the Special Taxes and the other amounts in the Special Tax Fund (other than amounts in the Administrative Expense Account). Section 2.2. Type and Nature of Bonds. Neither the faith and credit nor the taxing power of the City, the State of California or any political subdivision thereof other than the CFD is pledged to the payment of the Bonds. Except for the Special Taxes, no other taxes are pledged to the payment of the Bonds. The Bonds are not general or special obligations of the City nor general obligations of the CFD, but are limited obligations of the CFD payable solely from certain amounts deposited by the CFD in the Special Tax Fund (exclusive of amounts transferred to the Administrative Expense Account), as more fully described herein. The CFD's limited obligation to pay the principal of, premium, if any, and interest on the Bonds from amounts in the Special Tax Fund (exclusive of amounts transferred to the Administrative Expense Account) is absolute and unconditional, free of deductions and without any abatement, offset, recoupment, diminution or set-off whatsoever. No Owner of the Bonds may compel the exercise of the taxing power by the CFD (except as pertains to the Special Taxes) or the City or the forfeiture of any of their property. The principal of and interest on the Bonds and premiums upon the redemption thereof, if any, are not a debt of the City, the State of California or any of its political subdivisions within the meaning of any constitutional or statutory limitation or restriction. The Bonds are not a legal or equitable pledge, charge, lien, or encumbrance upon any of the CFD's property, or upon any of its income, receipts or revenues, except the Special Taxes and other amounts in the Special Tax Fund (exclusive of amounts transferred to the Administrative. Expense Account) which are, under the terms of this Fiscal Agent Agreement and the Act, set aside for the payment of the Bonds and interest thereon, and neither the members of the Council nor any persons executing the Bonds are liable personally on the Bonds by reason of their issuance. '-' Notwithstanding anything to the contrary contained in this Fiscal Agent Agreement, the CFD shall not be required to advance any money derived from any source of income other than the Special Taxes for the payment of the interest on or the principal of the Bonds, or for the performance of any covenants contained herein. The CFD may, however, advance funds for any such purpose, provided that such funds are derived from a source legally available for such purpose. Section 2.3. Equality of Bonds and Pledge of Special Taxes. Pursuant to the Act and this Fiscal Agent Agreement, the Bonds shall be equally payable from the Special Taxes and other amounts in the Special Tax Fund (exclusive of amounts transferred to the Administrative Expense Account) without priority for number, date of the Bonds, date of sale, date of execution, or date of delivery, and the payment of the interest on and principal of the Bonds and any premiums upon the redemption thereof, shall be exclusively paid from the Special Taxes and other amounts in the Special Tax Fund (exclusive of amounts transferred to the Administrative Expense Account), which are hereby set aside for the payment of the Bonds. Amounts in the Special Tax Fund (exclusive of amounts transferred to the Administrative Expense Account) shall constitute a trust fund held for the benefit of the Owners to be applied to the payment of the interest on and principal of the Bonds and so long as any of the Bonds or interest thereon remain Outstanding shall not be used for any other purpose, except as permitted by this Fiscal Agent Agreement or any Supplemental Fiscal Agent Agreement. Notwithstanding any provision contained in this Fiscal Agent Agreement to the contrary, Special Taxes transferred to the Administrative Expense Account of the Special Tax Fund and the Surplus Fund shall no longer be considered to be pledged to the Bonds, and none of the Surplus Fund or the Administrative Expense Account of the Special Tax Fund shall be construed as a trust fund held for the benefit of the Owners. '-' 45440519.2 10 AGENDA ITEM NO. PAGE aa . j'J- OF~ ~ Nothing in this Fiscal Agent Agreement or any Supplemental Fiscal Agent Agreement shall preclude, subject to the limitations contained hereunder, the redemption prior to maturity of any Bond subject to call and redemption and payment of said Bond from proceeds of refunding bonds issued under the Act as the same now exists or as hereafter amended, or under any other law of the State ofCalifomia. Section 2.4. Description of Bonds; Interest Rates. The Bonds shall be issued in fully registered form in denominations of $5,000 or any integral multiple thereof. The Bonds of each issue shall be numbered as desired by the Fiscal Agent. The Bonds shall be designated "CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2005-6 (CITY CENTER TOWNHOMES) SPECIAL TAX BONDS, 2006 SERIES A." The Bonds shall be dated their Delivery Date and shall mature and be payable on September I in the years and in the aggregate principal amounts and shall be subject to and shall bear interest at the rates set forth in the table below payable on each Interest Payment Date. Maturity Date (September I) Principal Amount Interest Rate $ % ,"'-"', Interest shall be payable on each Bond from the date established in accordance with Section 2.5 below on each Interest Payment Date thereafter until the principal sum of that Bond has been paid; provided, however, that if at the maturity date of any Bond (or ifthe same is redeemable and shall be duly called for redemption, then at the date fixed for redemption) funds are available for the payment or redemption thereof in full, in accordance with the terms of this Fiscal Agent Agreement, such Bonds shall then cease to bear interest. Interest due on the Bonds shall be calculated on the basis of a 360-day year comprised of twelve 30-day months. Section 2.5. Place and Form of Payment. The Bonds shall be payable both as to principal and interest, and as to any premiums upon the redemption thereof, in lawful money of the United States of America. The principal of the Bonds and any premiums due upon the redemption thereof shall be payable upon presentation and surrender thereof at the Principal Office of the Fiscal Agent, or at the designated office of any successor Fiscal Agent. Interest on any Bond shall be payable from the Interest Payment Date next preceding the date of authentication of that Bond, unless (i) such date of authentication is an Interest Payment Date in which event interest shall be payable from such date of authentication, (ii) the date of authentication is after a Record Date but prior to the immediately succeeding Interest Payment ",....... Date, in which event interest shall be payable from the Interest Payment Date immediately succeeding the date of authentication, or (iii) the date of authentication is prior to the close of business on the first Record 45440519.2 11 ACENDA ITEM NO. PAGE ~ 2J~ OF~ Date occurring after the issuance of such Bond, in which event interest shall be payable from the dated date of such Bond, as applicable; provided, however, that if at the time of authentication of such Bond interest is in default, interest on that Bond shall be payable from the last Interest Payment Date to which ......, the interest has been paid or made available for payment or, if no interest has been paid or made available for payment on that Bond, interest on that Bond shall be payable from its dated date. Interest on any Bond shall be paid to the person whose name shall appear in the Bond Register as the Owner of such Bond as of the close of business on the Record Date. Such interest shall be paid by check of the Fiscal Agent mailed on the Interest Payment Date by first class mail, postage prepaid, to such Bondowner at his or her address as it appears on the Bond Register. In addition, upon a request in writing received by the Fiscal Agent on or before the applicable Record Date from an Owner of $1,000,000 or more in principal amount of the Bonds, payment shall be made on the Interest Payment Date by wire transfer in immediately available funds to an account within the United States designated by such Owner. Section 2.6. Form of Bonds. The definitive Bonds may be printed from steel engraved or lithographic plates or may be typewritten. The Bonds and the certificate of authentication shall be substantially in the form attached hereto as Exhibit A, which forms are hereby approved and adopted as the forms of such Bonds and of the certificate of authentication. Notwithstanding any provision in this Fiscal Agent Agreement to the contrary, the CFD may, in its sole discretion, elect to issue the Bonds in book-entry form. Until definitive Bonds shall be prepared, the CFD may cause to be executed and delivered in lieu of such definitive Bonds temporary bonds in typed, printed, lithographed or engraved form and in fully registered form, subject to the same provisions, limitations and conditions as are applicable in the case of definitive Bonds, except that they may be in any denominations authorized by the CFD. Until exchanged for definitive Bonds, any temporary bond shall be entitled and subject to the same benefits and provisions of this Fiscal Agent Agreement as definitive Bonds. If the CFD issues temporary Bonds, it shall execute '-"" and furnish definitive Bonds, without unnecessary delay and thereupon any temporary Bond may be surrendered to the Fiscal Agent at its office, without expense to the Owner, in exchange for a definitive Bond of the same issue, maturity, interest rate and principal amount in any authorized denomination. All temporary Bonds so surrendered shall be cancelled by the Fiscal Agent and shall not be reissued. Section 2.7. Execution and Authentication. The Bonds shall be signed on behalf of the CFD by the manual or facsimile signature of the Mayor or the City Manager, in their capacity as officers of the CFD, and attested by the signature of the City Clerk. In case anyone or more of the officers who shall have signed or sealed any of the Bonds shall cease to be such officer before the Bonds so signed and sealed have been authenticated and delivered by the Fiscal Agent (including new Bonds delivered pursuant to the provisions hereof with reference to the transfer and exchange of Bonds or to lost, stolen, destroyed or mutilated Bonds), such Bonds shall nevertheless be valid and may be authenticated and delivered as herein provided, and may be issued as if the person who signed or sealed such Bonds had not ceased to hold such office. Only the Bonds as shall bear thereon such certificate of authentication in the form set forth in Exhibit A hereto shall be entitled to any right or benefit under this Fiscal Agent Agreement, and no Bond shall be valid or obligatory for any purpose until such certificate of authentication shall have been duly executed by the Fiscal Agent. Section 2.8. Bond Register. The Fiscal Agent will keep or cause to be kept, at its office, sufficient books for the registration and transfer of the Bonds which shall upon reasonable prior notice be open to inspection by the CFD during all regular business hours, and, subject to the limitations set forth in Section 2.9 below, upon presentation for such purpose, the Fiscal Agent shall, under such reasonable ....., 45440519.2 12 AGENDA ITEM NO. 3 ;r PAGE-KOF.33..e- ............ regulations as it may prescribe, register or transfer or cause to be transferred on said Bond Register, Bonds as herein provided. The CFD and the Fiscal Agent may treat the Owner of any Bond whose name appears on the Bond Register as the absolute Owner of that Bond for any and all purposes, and the CFD and the Fiscal Agent shall not be affected by any notice to the contrary. The CFD and the Fiscal Agent may rely on the address of the Bondowner as it appears in the Bond Register for any and all purposes. It shall be the duty of the Bondowner to give written notice to the Fiscal Agent of any change in the Bondowner's address so that the Bond Register may be revised accordingly. Section 2.9. Registration of Exchange or Transfer. Subject to the limitations set forth in the following paragraph, the registration of any Bond may, in accordance with its terms, be transferred upon the Bond Register by the person in whose name it is registered, in person or by his or her duly authorized attorney, upon surrender of such Bond for cancellation at the office of the Fiscal Agent, accompanied by delivery of written instrument of transfer in a form approved by the Fiscal Agent and duly executed by the Bondowner or his or her duly authorized attorney. ........... Bonds may be exchanged at the office of the Fiscal Agent for a like aggregate principal amount of Bonds for other authorized denominations of the same maturity and issue. The Fiscal Agent shall not collect from the Owner any charge for any new Bond issued upon any exchange or transfer, but shall require the Bondowner requesting such exchange or transfer to pay any tax or other governmental charge required to be paid with respect to such exchange or transfer. Whenever any Bonds shall be surrendered for registration of transfer or exchange, the CFD shall execute and the Fiscal Agent shall authenticate and deliver a new Bond or Bonds of the same issue and maturity, for a like aggregate principal amount; provided that the Fiscal Agent shall not be required to register transfers or make exchanges of (i) Bonds for a period of 15 days next preceding any selection of the Bonds to be redeemed, or (ii) any Bonds chosen for redemption. Section 2.10. Mutilated, Lost, Destroyed or Stolen Bonds. If any Bond shall become mutilated, the CFD shall execute, and the Fiscal Agent shall authenticate and deliver, a new Bond of like tenor, date, issue and maturity in exchange and substitution for the Bond so mutilated, but only upon surrender to the Fiscal Agent of the Bond so mutilated. Every mutilated Bond so surrendered to the Fiscal Agent shall be cancelled by the Fiscal Agent pursuant to Section 10.1 hereof. If any Bond shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Fiscal Agent and, if such evidence is satisfactory to the Fiscal Agent and, if any indemnity satisfactory to the CFD and the Fiscal Agent shall be given, the CFD shall execute and the Fiscal Agent shall authenticate and deliver, a new Bond, as applicable, of like tenor, maturity and issue, numbered and dated as the Fiscal Agent shall determine in lieu of and in substitution for the Bond so lost, destroyed or stolen. Any Bond issued in lieu of any Bond alleged to be mutilated, lost, destroyed or stolen, shall be equally and proportionately entitled to the benefits hereof with all other Bonds issued hereunder. The Fiscal Agent shall not treat both the original Bond and any replacement Bond as being Outstanding for the purpose of determining the principal amount of Bonds which may be executed, authenticated and delivered hereunder or for the purpose of determining any percentage of Bonds Outstanding hereunder, but both the original and replacement Bond shall be treated as one and the same. Notwithstanding any other provision of this Section, in lieu of delivering a new Bond which has been mutilated, lost, destroyed or stolen, and which has matured, the Fiscal Agent may make payment with respect to such Bonds. Section 2.11. Validity of Bonds. The validity of the authorization and issuance of the Bonds shall not be affected in any way by any defect in any proceedings taken by the CFD, or by the invalidity, ~ in whole or in part, of any contracts made by the CFD in connection therewith, and the recital contained 45440519.2 13 AGENDA ITEM NO.3? PAGE...a5-0F ~ in the Bonds that the same are issued pursuant to the Act and other applicable laws of the State shall be conclusive evidence of their validity and of the regularity of their issuance. Section 2.12. Book-Entry System. The Bonds shall be initially delivered in the form of a separate single fully registered Bond (which may be typewritten) for each of the maturities of the Bonds. Upon initial delivery, the ownership of each such Bond shall be registered in the registration books kept by the Fiscal Agent in the name of the Nominee as nominee of the Depository. Unless the CFD elects to discontinue the use of the book-entry system, all of the Outstanding Bonds shall be registered in the registration books kept by the Fiscal Agent in the name of the Nominee. ~ With respect to Bonds registered in the registration books kept by the Fiscal Agent in the name of the Nominee, the CFD and the Fiscal Agent shall have no responsibility or obligation to any such Participant or to any Person on behalf of which such a Participant holds an interest in the Bonds. Without limiting the immediately preceding sentence, the CFD and the Fiscal Agent shall have no responsibility or obligation with respect to (i) the accuracy of the records of the Depository, the Nominee, or any Participant with respect to any ownership interest in the Bonds, (ii) the delivery to any Participant or any other Person, other than an Owner as shown in the registration books kept by the Fiscal Agent, of any notice with respect to the Bonds, including any notice of redemption, (iii) the selection by the Depository and its Participants of the beneficial interests in the Bonds to be redeemed in the event the Bonds are redeemed in part, or (iv) the payment to any Participant or any other Person, other than an Owner as shown in the registration books kept by the Fiscal Agent, of any amount with respect to principal of, premium, if any, or interest due with respect to the Bonds. The CFD and the Fiscal Agent may treat and consider the Person in whose name each Bond is registered in the registration books kept by the Fiscal Agent as the holder and absolute owner of such Bond for the purpose of payment of the principal of, premium, if any, and interest on such Bond, for the purpose of giving notices of redemption and other matters with respect to such Bond, for the purpose of registering transfers with respect to such Bond, and for all other purposes whatsoever. The Fiscal Agent shall pay all principal of, premium, if any, and -....JJI interest due on the Bonds only to or upon the order of the respective Owner, as shown in the registration books kept by the Fiscal Agent, or their respective attorneys duly authorized in writing, and all such payments shall be valid and effective to satisfy and discharge fully the CFD's obligations with respect to payment of the principal, premium, if any, and interest due on the Bonds to the extent of the sum or sums so paid. No Person other than an Owner, as shown in the registration books kept by the Fiscal Agent, shall receive a Bond evidencing the obligation of the CFD to make payments of principal, premium, if any, and interest pursuant to this Fiscal Agent Agreement. Upon delivery by the Depository to the Fiscal Agent and the CFD of written notice to the effect that the Depository has determined to substitute a new nominee in place of the Nominee, and subject to the provisions herein with respect to Record Dates, the word Nominee in this Fiscal Agent Agreement shall refer to such new nominee of the Depository. Section 2.13. Representation Letter. In order to qualify the Bonds which the CFD elects to register in the name of the Nominee for the Depository's book-entry system, an authorized representative of the CFD or the Fiscal Agent is hereby authorized to execute from time to time and deliver to such Depository the Representation Letter. The execution and delivery of the Representation Letter shall not in any way limit the provisions of Section 10.2 or in any other way impose upon the CFD or the Fiscal Agent any obligation whatsoever with respect to persons having interests in the Bonds other than the Owners, as shown on the registration books kept by the Fiscal Agent. The Fiscal Agent agrees to take all action necessary to continuously comply with all representations made by it in the Representation Letter. In addition to the execution and delivery of the Representation Letter, the Mayor and any Authorized Representative of the CFD are hereby authorized to take any other actions, not inconsistent with this Fiscal Agent Agreement, to qualify the Bonds for the Depository's book-entry program. -....JJI 45440519.2 14 ACENDA ITEM NO. PACE ~ to 3;;- OF 33~ ~ Section 2.14. Transfers Outside Book-Entry System. In the event (i) the Depository determines not to continue to act as securities depository for the Bonds, or (ii) the CFD determines that the Depository shall no longer so act, then the CFD will discontinue the book-entry system wit~ the Depository. If the CFD fails to identify another qualified securities depository to replace the DepOSItOry then the Bonds so designated shall no longer be restricted to being registered in the registration books kept by the Fiscal Agent in the name of the Nominee, but shall be registered in whatever name or names Persons transferring or exchanging Bonds shall designate, in accordance with the provisions of Section 2.9 hereof. Section 2.15. Payments to the Nominee. Notwithstanding any other provisions of this Fiscal Agent Agreement to the contrary, so long as any Bond is registered in the name of the Nominee, all payments with respect to principal, premium, if any, and interest due with respect to such Bond and all notices with respect to such Bond shall be made and given, respectively, as provided in the Representation Letter or as otherwise instructed by the Depository. Section 2.16. Initial Depository and Nominee. The initial Depository under this Article shall be The Depository Trust Company, New York, New York. The initial Nominee shall be Cede & Co., as Nominee of The Depository Trust Company, New York, New York. ARTICLE III CREATION OF FUNDS AND APPLICATION OF SPECIAL TAXES Section 3.1. Creation of Funds; Application of Proceeds. There is hereby created and established and shall be maintained by the Fiscal Agent the following funds and accounts: ,-... (1) The Community Facilities District No. 2005-6 Special Tax Fund (the "Special Tax Fund") (in which there shall be established and created an Interest Account, a Principal Account, a Redemption Account, a Reserve Account and an Administrative Expense Account); (2) The Community Facilities District No. 2005-6 Surplus Fund (the "Surplus Fund"); and (3) The Community Facilities District No. 2005-6 Acquisition and Construction Fund (the "Acquisition and Construction Fund") (in which there shall be established a Costs ofIssuance Account). The amounts on deposit in the foregoing funds, accounts and subaccounts shall be held by the Fiscal Agent and the Fiscal Agent shall invest and disburse the amounts in such funds, accounts and subaccounts in accordance with the provisions of this Article III and shall disburse investment earnings thereon in accordance with the provisions of Section 3.10 hereof. Except as required to be segregated into funds and accounts as described herein, money held by the Fiscal Agent in trust hereunder need not be segregated from other funds except to the extent required by law. At the Written Request of the CFD, the Fiscal Agent may create new funds, accounts or subaccounts, or may create additional accounts and subaccounts within any of the foregoing funds and accounts for the purpose of separately accounting for the proceeds of the Bonds. All proceeds of the sale of the Bonds shall be received by the Fiscal Agent on behalf of the CFD and deposited and transferred as follows: ",.-... (1) $ shall be transferred to the Costs ofIssuance Account of the Acquisition and Construction Fund established hereunder for disbursement in accordance with Section 3.8 below; and 45440519.2 15 AGENDA ITEM NO. 3 17 PAGE.2l..0F~ (2) $ . (wh~ch is equal to t~e initial Reserve Requirement) shall be deposited in the Reserve Account to be dIsbursed In accordance WIth Section 3.5 below; and . (3). $ ~hall be transferred to the Interest Account of the Special Tax Fund for dIsbursement In accordance wIth Section 3.3 below; and ......., (4) $ shall be transferred to the Acquisition and Construction Fund for disbursement in accordance with Section 3.8 below. Section 3.2. Deposits to and Disbursements from Special Tax Fund. The CFD shall, on each date on which it receives Special Taxes transfer the Special Taxes, to the Fiscal Agent for deposit in the Special Tax Fund to be held in accordance with the terms of this Fiscal Agent Agreement. The Fiscal Agent shall transfer the amounts on deposit in the Special Tax Fund on the dates and in the amounts set forth in the following Sections, in the following order of priority, to: (a) The Interest Account of the Special Tax Fund; (b) The Principal Account of the Special Tax Fund; (c) The Redemption Account of the Special Tax Fund; (d) The Reserve Account of the Special Tax Fund; (e) The Administrative Expense Account of the Special Tax Fund; and (f) The Surplus Fund. At the maturity of all of the Bonds and, after all principal and interest then due on the Bonds then Outstanding has been paid or provided for and any amounts owed to the Fiscal Agent have been paid in full, moneys in the Special Tax Fund and any accounts therein shall be transferred to the CFD and may be used by the CFD for any lawful purpose. ....." Section 3.3. Interest Account and Principal Account of the Special Tax Fund. The principal of and interest due on the Bonds until maturity, other than principal due upon redemption, shall be paid by the Fiscal Agent from the Principal Account and the Interest Account of the Special Tax Fund, respectively. For the purpose of assuring that the payment of principal of and interest on the Bonds will be made when due, at least five Business Days prior to each March 1 and September 1, the Fiscal Agent shall make the following transfers from the Special Tax Fund first to the Interest Account and then to the Principal Account; provided, however, that to the extent that deposits have been made in the Interest Account or the Principal Account from the proceeds of the sale of an issue of the Bonds, or otherwise, the transfer from the Special Tax Fund need not be made; and provided, further, that, if amounts in the Special Tax Fund are inadequate to make the foregoing transfers, then any deficiency shall be made up by an immediate transfer from the Reserve Account: (1) To the Interest Account, an amount such that the balance in the Interest Account five Business Days prior to each Interest Payment Date shall be equal to the installment of interest due on the Bonds on said Interest Payment Date and any installment of interest due on a previous Interest Payment Date which remains unpaid. Moneys in the Interest Account shall be used for the payment of interest on the Bonds as the same become due. ~ 454405]9.2 16 ACENDA ITEM NO. ~ 0 PAGE ~K OF~ "....... (2) To the Principal Account, an amount such that the balance in the Principal Account five Business Days prior to September 1 of each year, commencing September 1, 200_ shall at least equal the principal payment due on the Bonds maturing on such September 1 and any principal payment due on a previous September 1 which remains unpaid. Moneys in the Principal Account shall be used for the payment of the principal of such Bonds as the same become due at maturity. Section 3.4. Redemption Account of the Special Tax Fund. (1) On each September I on which a Sinking Fund Payment is due, after the deposits have been made to the Interest Account and the Principal Account of the Special Tax Fund as required by Section 3.3 hereof, the Fiscal Agent shall next transfer into the Redemption Account of the Special Tax Fund from the Special Tax Fund the amount needed to make the balance in the Redemption Account five Business Days prior to each September I equal to the Sinking Fund Payment due on any Outstanding Bonds on such September 1; provided, however, that, if amounts in the Special Tax Fund are inadequate to make the foregoing transfers, then any deficiency shall be made up by an immediate transfer from the Reserve Account, if funded, pursuant to Section 3.5 below. Moneys so deposited in the Redemption Account shall be used and applied by the Fiscal Agent to call and redeem Term Bonds in accordance with the Sinking Fund Payment schedule set forth in Section 4.1 hereof. r'. (2) After making the deposits to the Interest Account and the Principal Account of the Special Tax Fund pursuant to Section 3.3 above and to the Redemption Account for Sinking Fund Payments then due pursuant to subparagraph (1) of this Section, and in accordance with the CFD's election to call Bonds for optional redemption as set forth in Section 4.1(1) hereof, the Fiscal Agent shall transfer from the Special Tax Fund and deposit in the Redemption Account moneys available for the purpose and sufficient to pay the interest, the principal and the premiums, if any, payable on the Bonds called for optional redemption; provided, however, that amounts in the Special Tax Fund (exclusive of amounts transferred to the Administrative Expense Account) may be applied to optionally redeem Bonds only if immediately following such redemption the amount in the Reserve Account will equal the Reserve Requirement. (3) Moneys set aside in the Redemption Account shall be used solely for the purpose of redeeming Bonds and shall be applied on or after the redemption date to the payment of the principal of and premium, if any, on the Bonds to be redeemed upon presentation and surrender of such Bonds and in the case of an optional redemption to pay the interest thereon; provided, however, that in lieu or partially in lieu of such call and redemption, moneys deposited in the Redemption Account as set forth above may be used to purchase Outstanding Bonds in the manner hereinafter provided. Purchases of Outstanding Bonds may be made by the CFD at public or private sale as and when and at such prices as the CFD may in its discretion determine but only at prices (including brokerage or other expenses) not more than par plus accrued interest, plus, in the case of moneys set aside for an optional redemption, the premium applicable at the next following call date according to the premium schedule established pursuant to Section 4.1(1) hereof. Any accrued interest payable upon the purchase of Bonds may be paid from the amount reserved in the Interest Account of the Special Tax Fund for the payment of interest on the next following Interest Payment Date. Section 3.5. Reserve Account of the Special Tax Fund. There shall be maintained in the Reserve Account of the Special Tax Fund an amount equal to the Reserve Requirement. The amounts in the Reserve Account shall be applied as follows: (1) Moneys in the Reserve Account shall be used solely for the purpose of paying the ____.. principal of, including Sinking Fund Payments, and interest on any Bonds when due in the event that the moneys in the Interest Account and the Principal Account of the Special Tax Fund are insufficient 45440519.2 17 AGENDA ITEM NO. ~ ;;.. PACiE~OF 3~(P therefor or moneys in the Redemption Account ofthe Special Tax Fund are insufficient to make a Sinking Fund Payment when due. If the amounts in the Interest Account, the Principal Account or the Redemption Account of the Special Tax Fund are insufficient to pay the principal of, including Sinking Fund Payments, or interest on any Bonds when due, the Fiscal Agent shall withdraw from the Reserve Account for deposit in the Interest Account, the Principal Account or the Redemption Account of the Special Tax Fund, as applicable, moneys necessary for such purposes. "-" (2) Whenever moneys are withdrawn from the Reserve Account, after making the required transfers referred to in Sections 3.4 and 3.5 above, the Fiscal Agent shall transfer to the Reserve Account from available moneys in the Special Tax Fund, or from any other legally available funds which the CFD elects to apply to such purpose, the amount needed to restore the amount of such Reserve Account to the Reserve Requirement. Moneys in the Special Tax Fund shall be deemed available for transfer to the Reserve Account only if the Fiscal Agent determines that such amounts will not be needed to make the deposits required to be made to the Interest Account, the Principal Account or the Redemption Account of the Special Tax Fund. If amounts in the Special Tax Fund or otherwise transferred to replenish the Reserve Account are inadequate to restore the Reserve Account to the Reserve Requirement, then the CFD shall include the amount necessary fully to restore the Reserve Account to the Reserve Requirement in the next annual Special Tax levy to the extent ofthe maximum permitted Special Tax rates. (3) In connection with any redemption of the Bonds, or a partial defeasance of the Bonds in accordance with Section 9.1 hereof, amounts in the Reserve Account may be applied to such redemption or partial defeasance so long as the amount on deposit in the Reserve Account following such redemption or partial defeasance equals the Reserve Requirement. To the extent that the Reserve Account is at the Reserve Requirement as of the first day of the final Bond Year for the Bonds, amounts in the Reserve Account may be applied to pay the principal of and interest due on the Bonds in the fmal Bond Year for such issue. Moneys in the Reserve Account in excess of the Reserve Requirement not transferred in accordance with the preceding provisions of this paragraph shall be withdrawn from the Reserve Account ,...., on the fifth Business Day before each March I and September 1 and transferred to the Acquisition and Construction Fund until the Fiscal Agent receives a Certificate of Authorized Representative of the CFD that all Project Costs have been funded and, thereafter, to the Interest Account of the Special Tax Fund. Section 3.6. Administrative Expense Account of the Special Tax Fund. The Fiscal Agent shall transfer from the Special Tax Fund and deposit in the Administrative Expense Account of the Special Tax Fund amounts necessary to make timely payment of Administrative Expenses and shall be disbursed by the Fiscal Agent to pay Administrative Expenses, all as instructed by the CFD pursuant to a Written Request of the CFD. Moneys in the Administrative Expense Account of the Special Tax Fund may be invested in any Authorized Investments as directed by an Authorized Representative ofthe CFD. Section 3.7. Surplus Fund. After making the transfers required by Sections 3.3, 3.4, 3.5, and 3.6 hereof, as soon as practicable after each September 1, the Fiscal Agent shall transfer all remaining amounts in the Special Tax Fund to the Surplus Fund, other than amounts in the Special Tax Fund which the CFD directs the Fiscal Agent by Written Request of the CFD to retain because the CFD has included such funds as being available in the Special Tax Fund in calculating the amount of the levy of Special Taxes for such Fiscal Year pursuant to Section 5.2(2) hereof. Moneys deposited in the Surplus Fund shall be transferred by the Fiscal Agent at the written direction of the CFD to the Administrative Expense Account of the Special Tax Fund to pay Administrative Expenses to the extent that the amounts on deposit in the Administrative Expense Account of the Special Tax Fund are insufficient to pay Administrative Expenses or, upon the Written Request of the CFD, may be disbursed to the CFD to be expended for any other lawful purpose of the CFD. ......" 454405] 9.2 18 AGENDA ITEM NO. PAGE 3D 3~ OF 3~(p ,____ The amounts in the Surplus Fund are not pledged to the repayment of the Bonds. In the event that the CFD reasonably expects to use any portion of the moneys in the Surplus Fund to pay debt service on any Outstanding Bonds, upon the written direction of the CFD, the Fiscal Agent will segregate such amount into a separate subaccount and the moneys on deposit in such subaccount of the Surplus Fund shall be invested in Authorized Investments the interest on which is excludable from gross income under Section 103 of the Code (other than bonds the interest on which is a tax preference item for purposes of computing the alternative minimum tax of individuals and corporations under the Code) or in Authorized Investments at a yield not in excess of the yield on the issue of Bonds to which such amounts are to be applied, unless, in the opinion of Bond Counsel, investment at a higher yield will not adversely affect the exclusion from gross income for federal income tax purposes of interest on the Bonds which were issued on a tax-exempt basis for federal income tax purposes. Section 3.8. Acquisition and Construction Fund. (1) The moneys in the Acquisition and Construction Fund shall be applied exclusively to pay the Project Costs and Costs of Issuance. Amounts for Project Costs and Costs of Issuance shall be disbursed by the Fiscal Agent from the account in the Acquisition and Construction Fund designated therefor in a requisition signed by an Authorized Representative of the CFD, substantially in the form of Exhibit B hereto, which must be submitted in connection with each requested disbursement. "" (2) Upon receipt of a Certificate of Authorized Representative of the CFD that all or a specified portion of the amount remaining in the Acquisition and Construction Fund is no longer needed to pay Project Costs or Costs ofIssuance, the Fiscal Agent shall redeem Bonds pursuant to Section 4.1(4) hereof, or transfer all or such specified portion of the moneys remaining on deposit in one or more of the accounts in the Acquisition and Construction Fund to the Special Tax Fund, or to the Surplus Fund if requested in the Certificate and if there shall have been delivered to the Fiscal Agent with such Certificate an opinion of Bond Counsel to the effect that such transfer to the Surplus Fund will not adversely affect the exclusion from gross income for federal income tax purposes of interest on the Bonds which were issued on a tax-exempt basis for federal income tax purposes. Upon transfer of the final amounts on deposit in the Acquisition and Construction Fund or either account in such fund, such accounts and fund shall be closed. Section 3.9. Investments. Moneys held in any of the funds and accounts under this Fiscal Agent Agreement shall be invested at the Written Request of the CFD in accordance with the limitations set forth below only in Authorized Investments which shall be deemed at all times to be a part of such funds and accounts. Any loss resulting from such Authorized Investments shall be credited or charged to the fund or account from which such investment was made, and any investment earnings on a fund or account shall be applied as follows: (i) investment earnings on all amounts deposited in the Special Tax Fund (exclusive of amounts transferred to the Reserve Account), Surplus Fund, Acquisition and Construction Fund and each Account therein shall be deposited in those respective funds and accounts, and (ii) all other investment earnings shall be deposited in the Interest Account of the Special Tax Fund; provided, however, to the extent moneys in the Reserve Account exceed the Reserve Requirement, such excess amounts shall be deposited and transferred pursuant to Section 3.5(3) hereof. Moneys in the funds and accounts held under this Fiscal Agent Agreement may be invested by the Fiscal Agent at the Written Request of the CFD received at least 2 Business Days prior to the investment date, from time to time, in Authorized Investments subject to the following restrictions: (1) Moneys in the Interest Account, the Principal Account and the Redemption Account of the Special Tax Fund shall be invested only in Authorized Investments which will by their terms mature, ,,-., or in the case of an Investment Agreement are available for withdrawal without penalty, on such dates so 45440519.2 19 AGENDA ITEM NO. J, ;;. PAGE--31-0F~ as to ensure the payment of principal of, premium, if any, and interest on the Bonds as the same become due. "'-" (2) Moneys in the Acquisition and Construction Fund shall be invested in Authorized Investments which will by their terms mature, or in the case of an Investment Agreement are available without penalty, as close as practicable to the date the CFD estimates the moneys represented by the particular investment will be needed for withdrawal from the Acquisition and Construction Fund. Notwithstanding anything herein to the contrary, amounts in the Acquisition and Construction Fund on the Delivery Date for the Bonds shall not be invested at yields greater than those set forth in the Tax Certificate. (3) One-half of the amount in the Reserve Account of the Special Tax Fund may be invested only in Authorized Investments which mature not later than two years from their date of purchase by the Fiscal Agent, and one-half of the amount in the Reserve Account may be invested only in Authorized Investments which mature not more than three years from the date of purchase by the Fiscal Agent; provided that such amounts may be invested in an Investment Agreement to the final maturity of the Bonds so long as such amounts may be withdrawn at any time, without penalty, for application in accordance with Section 3.5 hereof; and provided that no such Authorized Investment of amounts in the Reserve Account allocable to the Bonds shall mature later than the final maturity date of the ~onds. (4) In the absence of Written Request of the CFD providing investment directions, the Fiscal Agent shall invest solely in Authorized Investments specified in clause (4) of the definition thereof. The Fiscal Agent shall sell at the best price obtainable, or present for redemption, any Authorized Investment whenever it may be necessary to do so in order to provide moneys to meet any payment or transfer to such Funds and Accounts or from such Funds and Accounts. For the purpose of determining at any given time the balance in any such Funds and Accounts, any such investments constituting a part of "'-" such Funds and Accounts shall be valued at their cost, except that amounts in the Reserve Account shall be valued at the fair market value thereof and marked to market at least annually. Notwithstanding anything herein to the contrary, the Fiscal Agent shall not be responsible for any loss from investments, sales or transfers undertaken in accordance with the provisions of this Fiscal Agent Agreement. The Fiscal Agent or an affiliate may act as principal or agent in connection with the acquisition or disposition of any Authorized Investments and shall be entitled to its customary fees therefor. Any Authorized Investments that are registrable securities shall be registered in the name of the Fiscal Agent. The Fiscal Agent is hereby authorized, in making or disposing of any investment permitted by this Section, to deal with itself (in its individual capacity) or with anyone or more of its affiliates, whether it or such affiliate is acting as an agent of the Fiscal Agent or for any third person or dealing as principal for its own account. ARTICLE N REDEMPTION OF BONDS Section 4.1. Redemption of Bonds. (1) Optional Redemption. The Bonds are subject to redemption prior to maturity at the option of the CFD on any date on or after September 1, _, as a whole or in part, by lot, from any available source of funds at the following redemption prices (expressed as a percentage of the principal amount of Bonds to be), together with accrued interest thereon to the date fixed for redemption: "'-" 45440519.2 20 AGENDA ITEM NO. PAGE 3~ jr OF ~7Jo_ ~ Redemption Dates Redemption Prices September 1, _ through August _, _ September 1, _ through August _, _ September 1, _ and thereafter % (2) Special Mandatory Redemption from Special Tax Prepayments. The Bonds are subject to mandatory redemption prior to maturity on any date, in whole or in part, in a manner determined by the District from prepayments of Special Taxes at the following redemption prices (expressed as a percentage of the principal amount of Bonds to be redeemed), together with accrued interest thereon to the date ftxed for redemption: Redemption Dates Redemption Prices September 1, _ through September 1, _ through September 1, _ and thereafter '- % -'- As provided for in optional redemption In connection with such redemption, the CFD may also apply amounts in the Reserve Account which will be in excess of the Reserve Requirement as a result of such Special Tax prepayment to redeem Bonds as set forth above. (3) Special Mandatory Redemption. The Bonds are subject to special mandatory redemption on any date from unused proceeds of the Bonds after completion or abandonment of the improvements to ",- be ftnanced with such proceeds, from the deposit of fees with the CFD by a public agency which has accepted facilities serving the CFD and from insurance or condemnation proceeds or other mandatory redemption, without premium, plus accrued interest to the redemption date, all as determined by the CFD. (4) Mandatory Sinking Fund Redemption. The Bonds maturing on September 1, _ and September 1, _ are subject to mandatory redemption, in part by lot, on September 1 in each year commencing September 1, _, with respect to the Bonds maturing on September 1, -' and commencing September 1, _, with respect to the Bonds maturing on September 1, _, from the Sinking Fund Payments that have been deposited into the Redemption Account at a redemption price equal to the principal amount thereof to be redeemed, without premium, plus accrued interest thereon to the date of redemption as set forth in the following schedule; provided, however, that (i) in lieu of redemption thereof, the Bonds may be purchased by the CFD and tendered to the Fiscal Agent, and (ii) if some but not all of the Bonds have been redeemed pursuant to Section 4.1(1) through (3) above, the total amount of all future sinking payments will be reduced by the aggregate principal amount of the Bonds so redeemed, to be allocated among such sinking payments on a pro rata basis (as nearly as practicable) in integral multiples of $5,000 as determined by the CFD. ,,-... 45440519.2 21 AGENDA ITEM. NO. ;) ~ ~ PAGE ?,"'2, OF 3'3 Bonds Maturing on September 1, _ Redemption Date (September 1) ""'" Princit>al Amount $ (maturity) Bonds Maturing on September 1, _ Redemption Date (September 1) Principal Amount $ (maturity) .....", Section 4.2. Selection of Bonds for Redemption. If less than all of the Bonds Outstanding are to be redeemed, the portion of any Bond of a denomination of more than $5,000 to be redeemed shall be in the principal amount of $5,000 or an integral multiple thereof. In selecting portions of such Bonds for redemption, the Fiscal Agent shall treat such Bonds as representing that number of Bonds of $5,000 denominations which is obtained by dividing the principal amount of such Bonds to be redeemed in part by $5,000. The Fiscal Agent shall promptly notify the CFD in writing of the Bonds, or portions thereof, selected for redemption. Section 4.3. Notice of Redemption. When Bonds are due for redemption under Section 4.1 above, the Fiscal Agent shall give notice, in the name of the CFD, of the redemption of such Bonds; provided, however, that a notice of a redemption to be made from other than from Sinking Fund Payments shall be conditioned on there being on deposit on the redemption date sufficient money to pay the redemption price of the Bonds to be redeemed. Such notice of redemption shall (a) specify the CUSIP numbers (if any), the bond numbers and the maturity date or dates of the Bonds selected for redemption, except that where all of the Bonds of a maturity are subject to redemption, or all the Bonds of one maturity, are to be redeemed, the bond numbers of such issue need not be specified; (b) state the date fixed for redemption and surrender of the Bonds to be redeemed; (c) state the redemption price; (d) state the place or places where the Bonds are to be redeemed; (e) in the case of Bonds to be redeemed only in part, state the portion of such Bond which is to be redeemed; (f) state the date of issue of the Bonds as originally issued; (g) state the rate of interest borne by each Bond being redeemed; and (h) state any other descriptive information needed to identify accurately the Bonds being redeemed as shall be specified by the Fiscal Agent. Such notice shall further state that on the date fixed for redemption, there shall become due and payable on each Bond, or portion thereof called for redemption, the principal thereof, together with any premium, and interest accrued to the redemption date, and that from and after such date, interest ""'" 45440519.2 22 ACENDA ITEM NO.3;;' PACE 3'-1 OF~ ~. thereon shall cease to accrue and be payable. At least 30 days but no more than 60 days prior to the redemption date, the Fiscal Agent shall mail a copy of such notice, by first class mail, postage prepaid, to the respective Owners thereof at their addresses appearing on the Bond Register. The actual receipt by the Owner of any Bond or the original purchaser of any Bond of notice of such redemption shall not be a condition precedent to redemption, and neither the failure to receive nor any defect in such notice shall affect the validity of the proceedings for the redemption of such Bonds, or the cessation of interest on the redemption date. A certificate by the Fiscal Agent that notice of such redemption has been given as herein provided shall be conclusive as against all parties and the Owner shall not be entitled to show that he or she failed to receive notice of such redemption. In addition to the foregoing notice, further notice shall be given by the Fiscal Agent as set out below, but no defect in said further notice nor any failure to give all or any portion of such further notice shall in any manner defeat the effectiveness of a call for redemption if notice thereof is given as above prescribed. Each further notice of redemption shall be sent on or before the date notice of redemption is mailed to the Bondowners pursuant to the first paragraph of this Section by telecopy or registered or certified mail or overnight delivery service to the registered securities depositories then in the business of holding substantial amounts of obligations of types comprising the Bonds as shall be specified by the CFD to the Fiscal Agent and to the national information services that disseminate notice of redemption of obligations such as the Bonds. Upon the payment of the redemption price of any Bonds being redeemed, each check or other transfer of funds issued for such purpose shall to the extent practicable bear the CUSIP number identifying, by issue and maturity, the Bonds being redeemed with the proceeds of such check or other transfer. ~ Section 4.4. Partial Redemption of Bonds. Upon surrender of any Bond to be redeemed in part only, the CFD shall execute and the Fiscal Agent shall authenticate and deliver to the Bondowner, at the expense of the CFD, a new Bond or Bonds of authorized denominations equal in aggregate principal amount to the umedeemed portion of the Bonds surrendered, with the same interest rate and the same maturity. Section 4.5. Effect of Notice and Availability of Redemption Money. Notice of redemption having been duly given, as provided in Section 4.3 hereof, and the amount necessary for the redemption having been made available for that purpose and being available therefor on the date fixed for such redemption: (1) The Bonds, or portions thereof, designated for redemption shall, on the date fixed for redemption, become due and payable at the redemption price thereof as provided in this Fiscal Agent Agreement, anything in this Fiscal Agent Agreement or in the Bonds to the contrary notwithstanding; (2) Upon presentation and surrender thereof at the office of the Fiscal Agent, the redemption price of such Bonds shall be paid to the Owners thereof; (3) As of the redemption date the Bonds, or portions thereof so designated for redemption shall be deemed to be no longer Outstanding and such Bonds, or portions thereof, shall cease to bear further interest; and /"" (4) As of the date fixed for redemption no Owner of any of the Bonds, or portions thereof so designated for redemption, shall be entitled to any of the benefits of this Fiscal Agent Agreement or any 45440519.2 23 ACENDA ITEM NO. :3 " PAGE 3~ OF..33t2- Supplemental Fiscal Agent Agreement, or to any other rights, except with respect to payment of the redemption price and interest accrued to the redemption date from the amounts so made available. ....., ARTICLE V COVENANTS AND WARRANTY Section 5.1. Warranty. The CFD shall preserve and protect the security pledged hereunder to the Bonds against all claims and demands of all persons. Section 5.2. Covenants. So long as any of the Bonds issued hereunder are Outstanding and unpaid, the CFD makes the following covenants with the Bondowners under the provisions of the Act and this Fiscal Agent Agreement (to be performed by the CFD or its proper officers, agents or employees), which covenants are necessary and desirable to secure the Bonds and tend to make them more marketable; provided, however, that said covenants do not require the CFD to expend any funds or moneys other than the Special Taxes and other amounts deposited to the Special Tax Fund: (I) Punctual Payment: Against Encumbrances. The CFD hereby covenants that it will receive all Special Taxes in trust and will immediately deposit such amounts with the Fiscal Agent, and the CFD shall have no beneficial right or interest in the amounts so deposited except as provided by this Fiscal Agent Agreement. All such Special Taxes shall be disbursed, allocated and applied solely to the uses and purposes set forth herein, and shall be accounted for separately and apart from all other money, funds, accounts or other resources of the CFD. The CFD covenants that it will duly and punctually payor cause to be paid the principal of and interest on every Bond issued hereunder, together with the premium, if any, thereon on the date, at the place and in the manner set forth in the Bonds and in accordance with this Fiscal Agent Agreement to the ~ extent that Special Taxes are available therefor, and that the payments into the Funds and Accounts created hereunder will be made, all in strict conformity with the terms of the Bonds and this Fiscal Agent Agreement, and that it will faithfully observe and perform all of the conditions, covenants and requirements of this Fiscal Agent Agreement and all Supplemental Fiscal Agent Agreements and of the Bonds issued hereunder. The CFD will not mortgage or otherwise encumber, pledge or place any charge upon any of the Special Taxes except as provided in this Fiscal Agent Agreement, and will not issue any obligation or security having a lien or charge upon the Special Taxes superior to or on a parity with the Bonds. Nothing herein shall prevent the CFD from issuing or incurring indebtedness which is payable from a pledge of Special Taxes which is subordinate in all respects to the pledge of Special Taxes to repay the Bonds. (2) Levy of Special Tax. Beginning in Fiscal Year 2006-07 and so long as any Bonds issued under this Fiscal Agent Agreement are Outstanding, the CFD hereby covenants to levy the Special Tax in an amount sufficient, together with other amounts on deposit in the Special Tax Fund and the Surplus Fund and available for such purpose, to pay (I) the principal of and interest on the Bonds when due, (2) the Administrative Expenses, and (3) any amounts required to replenish the Reserve Account of the Special Tax Fund to the Reserve Requirement. (3) Commence Foreclosure Proceedings. The CFD hereby covenants for the benefit of the Owners of the Bonds that it will determine or cause to be determined, no later than March 1 and August 1 of each year, whether or not any owner of the property within the CFD are delinquent in the payment of Special Taxes and, if such delinquencies exist, the CFD will order and cause to be commenced no later ......" 45440519.2 24 AGENDA ITEM NO. PAGE 3l:, J;). OF~ ".-..... than April 15 (with respect to the March 1 determination date) or September 1 (with respect to the August 1 determination date), and thereafter diligently prosecute, an action in the superior court to foreclose the line of any Special Taxes or installment thereof not paid when due, provided, however, that the CFD shall not be required to order the commencement of foreclosure proceedings if (i) the total Special Tax delinquency in the CFD for such Fiscal Year is less than five percent (5%) of the total Special Tax levied in such Fiscal Year, and (ii) the CFD shall have established from any source of lawfully available funds (other than Special Taxes) an escrow fund to provide for the payment of principal of and interest on the Bonds. Notwithstanding the foregoing, if the CFD determines that any single property owner in the CFD is delinquent in excess of ten thousand dollars ($10,000) in the payment of the Special Tax, then it will diligently institute, prosecute and pursue foreclosure proceedings against such property owner. Notwithstanding any provision of the Act or other law of the State to the contrary, in connection with any foreclosure related to delinquent Special Taxes: (a) The CFD or the Fiscal Agent, is hereby expressly authorized to credit bid at any foreclosure sale, without any requirement that funds be set aside in the amount so credit bid, in the amount specified in Section 53356.5 of the Act, or such less amount as determined under clause (b) below or otherwise under Section 53356.6 of the Act. ..--.' (b) The CFD may permit, in its sole and absolute discretion, property with. delinquent Special Tax payments to be sold for less than the amount specified in Section 53356.5 of the Act, if it determines that such sale is in the interest of the Bond Owners. The Bond Owners, by their acceptance ofthe Bonds, hereby consent to such sale for such lesser amounts (as such consent is described in Section 53356.6 of the Act), and hereby release the CFD and the City, and their respective officers and agents from any liability in connection therewith. If such sale for lesser amounts would result in less than full payment of principal of and interest on the Bonds, the CFD will use best efforts to seek approval of the Bond Owners. (c) The CFD is hereby expressly authorized to use amounts in the Special Tax Fund to pay costs of foreclosure of delinquent Special Taxes. (d) The CFD may forgive all or any portion of the Special Taxes levied or to be levied on any parcel in the CFD so long as the CFD determines that such forgiveness is not expected to adversely affect its obligation to pay principal of and interest on the Bonds as such payments become due and payable. (4) Payment of Claims. The CFD will pay and discharge any and all lawful claims for labor, materials or supplies which, if unpaid, might become a lien or charge upon the Special Taxes or; other funds in the Special Tax Fund (exclusive of amounts transferred to the Administrative Expense Account), or which might impair the security of the Bonds then Outstanding; provided that nothing herein contained shall require the CFD to make any such payments so long as the CFD in good faith shall contest the validity of any such claims. (5) Books and Accounts. The CFD will keep proper books of records and accounts, separate from all other records and accounts of the CFD, in which complete and correct entries shall be made of all transactions relating to the levy of the Special Tax and the deposits to the Special Tax Fund. Such books of records and accounts shall at all times during business hours be subject to the inspection of the Fiscal Agent or of the Owners of the Bonds then Outstanding or their representatives authorized in writing. ~ 45440519.2 25 AGENDA ITEM NO. PAGE "S 7 oJ. OF~ (6) Tax Covenants. (a) Special Definitions. When used in this subsection, the following terms have the '-' following meanings: "Code" means the Internal Revenue Code of 1986. "Computation Date" has the meaning set forth in section 1.148-1(b) of the Tax Regulations. "Gross Proceeds" means any proceeds as defined in section 1.148-1(b) of the Tax Regulations (referring to sales, investment and transferred proceeds), and any replacement proceeds as defined in section 1. 148-1(c) of the Tax Regulations, ofthe Bonds. "Investment" has the meaning set forth in section 1.148-1(b) of the Tax Regulations. "Nonpurpose Investment" means any investment property, as defined in section 148(b) of the Code, in which Gross Proceeds of the Bonds are invested and that is not acquired to carry out the governmental purposes of that series of Bonds. "Rebate Amount," has the meaning set forth in section 1.148-1(b) of the Tax Regulations. "Tax Regulations" means the United States Treasury Regulations promulgated pursuant to sections 103 and 141 through 150 of the Code, or section 103 of the 1954 Code, as applicable. "Yield" of any Investment has the meaning set forth in section 1.148-5 of the Tax Regulations; and of any issue of governmental obligations has the meaning set forth in section 1.148-4 of the Tax Regulations. '-' (b) Not to Cause Interest to Become Taxable. The CFD covenants that it shall not use, and shall not permit the use of, and shall not omit to use Gross Proceeds or any other amounts (or any property the acquisition, construction or improvement of which is to be financed directly or indirectly with Gross Proceeds) in a manner that if made or omitted, respectively, could cause the interest on any Bond to fail to be excluded pursuant to section 103(a) ofthe Code from the gross income of the owner thereof for federal income tax purposes. Without limiting the generality of the foregoing, unless and until the Fiscal Agent receives a written opinion of Bond Counsel to the effect that failure to comply with such covenant will not adversely affect such exclusion of the interest on any Bond from the gross income of the owner thereof for federal income tax purposes, the CFD shall comply with each of the specific covenants in this subsection. (c) Private Use and Private Pavrnents. Except as would not cause any Bond to become a "private activity bond" within the meaning of section 141 of the Code and the Tax Regulations, the CFD shall take all actions necessary to assure that the CFD at all times prior to the final cancellation of the last of the Bonds to be retired: (i) exclusively owns, operates and possesses all property the acquisition, construction or improvement of which is to be financed or refinanced directly or indirectly with Gross Proceeds of the Bonds and not use or permit the use of such Gross Proceeds (including through any contractual arrangement with terms different than those applicable to the general public) or any property acquired, constructed or improved with such Gross Proceeds in any activity carried on by any person or entity (including the '-' 45440519.2 26 AGENDA ITEM NO. PACE3~ 3;) OF _~~~ /""" United States or any agency, department and instrumentality thereof) other than a state or local government, unless such use is solely as a member of the general public; and (ii) does not directly or indirectly impose or accept any charge or other payment by any person or entity (other than a state or local government) who is treated as using any Gross Proceeds of the Bonds or any property the acquisition, construction or improvement of which is to be financed or refinanced directly or indirectly with such Gross Proceeds. (d) No Private Loan. Except as would not cause any Bond to become a "private activity bond" within the meaning of section 141 of the Code and the Tax Regulations and rulings thereunder, the CFD shall not use or permit the use of Gross Proceeds of the Bonds to make or finance loans to any person or entity other than a state or local government. For purposes of the foregoing covenant, such Gross Proceeds are considered to be "loaned" to a person or entity if: (i) property acquired, constructed or improved with such Gross Proceeds is sold or leased to such person or entity in a transaction that creates a debt for federal income tax purposes; (ii) capacity in or service from such property is committed to such person or entity under a take-or-pay, output or similar contract or arrangement; or (iii) indirect benefits of such Gross Proceeds, or burdens and benefits of ownership of any property acquired, constructed or improved with such Gross Proceeds, are otherwise transferred in a transaction that is the economic equivalent of a loan. /""" (e) Not to Invest at Higher Yield. Except as would not cause the Bonds to become "arbitrage bonds" within the meaning of section 148 of the Code and the Tax Regulations and rulings thereunder, the CFD shall not (and shall not permit any person to), at any time prior to the final cancellation of the last Bond to be retired, directly or indirectly invest Gross Proceeds in any Investment, if as a result of such investment the Yield of any Investment acquired with Gross Proceeds, whether then held or previously disposed of, would materially exceed the Yield of the Bonds within the meaning of said section 148. (f) Not Federallv Guaranteed. Except to the extent permitted by section 149(b) of the Code and the Tax Regulations and rulings thereunder, the CFD shall take or omit to take (and shall not permit any person to take or omit to take) any action that would cause any Bond to be "federally guaranteed" within the meaning of section 149(b) of the Code and the Tax Regulations and rulings thereunder. (g) Information Report. The CFD shall timely file any information required by section 149(e) of the Code with respect to Bonds with the Secretary of the Treasury on Form 8038-G or such other form and in such place as the Secretary may prescribe. (h) Rebate of Arbitrage Profits. Except to the extent otherwise provided in section 148(f) of the Code and the Tax Regulations: /"""' (i) The CFD shall account for all Gross Proceeds (including all receipts, expenditures and investments thereof) on its books of account separately and apart from all other funds (and receipts, expenditures and investments thereof) and shall retain all records of accounting for at least six years after the day on which the last Bond is discharged. However, to the extent permitted by law, the CFD may commingle (and may allow the CFD to commingle) Gross Proceeds of Bonds with its other monies, provided that it separately accounts for each receipt and expenditure of Gross Proceeds and the obligations acquired therewith. 45440519.2 27 ACENDA ITEM NO. 3~ PAGE.-39-0F 3gb (ii) Not less frequently than each Computation Date, the CFD shall calculate the Rebate Amount in accordance with rules set forth in section l48(f) of the Code and the Tax Regulations and rulings thereunder. The CFD shall maintain a copy of the calculation with its official transcript of proceedings relating to the issuance of the Bonds until six years after the final Computation Date. """ (iii) In order to assure the excludability pursuant to 3(a) of the Code of the interest on the Bonds from the gross income of the owners thereof for federal income tax purposes, the CFD shall pay to the United States the amount that when added to the future value of previous rebate payments made for the Bonds equals (i) in the case of the Final Computation Date as defined in section l.l48-3( e )(2) of the Tax Regulations, one hundred percent (100%) of the Rebate Amount on such date; and (ii) in the case of any other Computation Date, ninety percent (90%) of the Rebate Amount on such date. In all cases, such rebate payments shall be made by the CFD at the times and in the amounts as are or may be required by section l48(f) of the Code and the Tax Regulations and rulings thereunder, and shall be accompanied by Form 8038-T or such other forms and information as is or may be required by section l48(f) of the Code and the Tax Regulations and rulings thereunder for execution and filing by the CFD. Notwithstanding the foregoing, and provided that the CFD takes all steps available to it to cause the provision of such amounts, the monetary obligation of the CFD under this paragraph (3) shall be limited to amounts provided to it for such purpose by the CFD. (i) Not to Divert Arbitrage Profits. Except to the extent permitted by section 148 of the Code and the Tax Regulations and rulings thereunder, the CFD shall not and shall not permit any person to, at any time prior to the fmal cancellation of the last of the Bonds to be retired, enter into any transaction that reduces the amount required to be paid to the United States pursuant to paragraph (h) of this subsection because such transaction results in a smaller profit or ~ a larger loss than would have resulted if the transaction had been at arm's length and had the Yields on the Bonds not been relevant to either party. (j) Bonds Not Hedge Bonds. (i) The CFD represents that none of the Bonds is or will become a "hedge bond" within the meaning of section 149(g) of the Code. (ii) Without limitation of paragraph (i) above: (A) the CFD reasonably expects that at least 85% of the spendable proceeds of the Bonds will be expended within the three-year period commencing on the date of issuance of the Bonds; and (B) no more than 50% of the proceeds of the Bonds will be invested in Nonpurpose Investments having a substantially guaranteed yield for a period of four years or more. (k) Elections. The CFD hereby directs and authorizes any CFD Authorized Representative to make elections permitted or required pursuant to the provisions of the Code or the Tax Regulations, as such representative (after consultation with Bond Counsel) deems necessary or appropriate in connection with the Bonds, in the Certificate as to Tax Exemption or similar or other appropriate certificate, form or document. (1) Closing Certificate. The CFD agrees to execute and deliver in connection with the issuance of the Bonds a Tax Certificate as to Arbitrage and the Provisions of Sections 103 and 141-150 of the Internal Revenue Code of 1986, or similar document containing additional representations and covenants pertaining to the exclusion of interest on the Bonds from the gross """ 45440519.2 28 3;;l AGENDA ITEM NO._ ~ PAGE Lj 0 OF ,..-.- income of the owners thereof for federal income tax purposes, which representations and covenants are incorporated as though expressly set forth herein. (7) Reduction of Maximum Special Taxes. The CFD hereby finds and determines that, historically, delinquencies in the payment of special taxes authorized pursuant to the Act in community facilities districts in Southern California have from time to time been at levels requiring the levy of special taxes at the maximum authorized rates in order to make timely payment of principal of and interest on the outstanding indebtedness of such community facilities districts. For this reason, the CFD hereby determines that a reduction in the maximum Special Tax rates authorized to be levied on parcels in the CFD below the levels provided in this Section 5.2(7) would interfere with the timely retirement of the Bonds. The CFD determines it to be necessary in order to preserve the security for the Bonds to covenant, and, to the maximum extent that the law permits it to do so, the CFD hereby does covenant, that it shall not initiate proceedings to reduce the maximum Special Tax rates for the CFD, unless, in connection therewith, (i) the CFD receives a certificate from one or more Independent Financial Consultants which, when taken together, certify that, on the basis of the parcels ofland and improvements existing in the CFD as of the July 1 preceding the reduction, the maximum amount of the Special Tax which may be levied on then existing Developed Property (as defined in the Rate and Method of Apportionment of Special Taxes then in effect in the CFD) in each Bond Year for any Bonds Outstanding will equal at least 110% of the sum on the estimated Administrative Expenses and gross debt service in that Bond Year on all Bonds to remain Outstanding after the reduction is approved, and (ii) the CFD hereby finds that any reduction made under such conditions will not adversely affect the interests of the Owners of the Bonds. For purposes of estimating Administrative Expenses for the foregoing calculation, the Independent Financial Consultant shall compute the Administrative Expenses for the current Fiscal Year and escalate that amount by two percent (2%) in each subsequent Fiscal Year. "..." (8) Covenants to Defend. The CFD hereby covenants that in the event that any initiative is adopted by the qualified electors in the CFD which purports to reduce the maximum Special Tax below the levels specified in Section 5.2(7) above or to limit the power of the CFD to levy the Special Taxes for the purposes set forth in Section 5.2(2) above, it will commence and pursue legal action in order to preserve its ability to comply with such covenants. (9) Annual Reports to CDIAC. Not later than October 30 of each year, commencing October 30, 200_ and until the October 30 following the final maturity of the Bonds, the CFD shall cause the City to supply the information required by Section 53359.5(b) or (c) of the Act to CDIAC (on such forms as CDIAC may specify). (10) Continuing Disclosure. The CFD hereby covenants to comply with the terms of the Continuing Disclosure Agreement executed by it with respect to the Bonds. ARTICLE VI AMENDMENTS TO FISCAL AGENT AGREEMENT Section 6.1. Supplemental Fiscal Agent Agreements or Orders Not Requiring Bondowner Consent. The CFD may from time to time, and at any time, without notice to or consent of any of the Bondowners, adopt Supplemental Fiscal Agent Agreements for any of the following purposes: (1) to cure any ambiguity, to correct or supplement any provisions herein which may be inconsistent with any other provision herein, or to make any other provision with respect to matters or ~ questions arising under this Fiscal Agent Agreement or in any additional resolution or order, provided that such action is not materially adverse to the interests of the Bondowners; 45440519.2 29 AOENDA ITEM NO. 3J. PAOE~OF ~ (2) to add to the covenants and agreements of and the limitations and the restrictions upon the CFD contained in this Fiscal Agent Agreement, other covenants, agreements, limitations and restrictions to be observed by the CFD which are not contrary to or inconsistent with this Fiscal Agent Agreement as theretofore in effect or which further secure Bond payments; ""'" (3) to modify, amend or supplement this Fiscal Agent Agreement in such manner as to permit the qualification hereof under the Trust Indenture Act of 1939, as amended, or any similar federal statute hereafter in effect, or to comply with the Code or regulations issued thereunder, and to add such other terms, conditions and provisions as may be permitted by said act or similar federal statute, and which shall not materially adversely affect the interests of the Owners of the Bonds then Outstanding; or (4) to modify, alter or amend the rate and method of apportionment of the Special Taxes in any manner so long as such changes do not reduce the maximum Special Taxes that may be levied in each year on property within the CFD to an amount which is less than that permitted under Section 5.2(7) hereof; or (5) to modify, alter, amend or supplement this Fiscal Agent Agreement in any other respect which is not materially adverse to the Bondowners. Section 6.2. Supplemental Fiscal Agent Agreements or Orders Requiring Bondowner Consent. Exclusive of the Supplemental Fiscal Agent Agreements described in Section 6.1, the Owners of not less than a majority in aggregate principal amount of the Bonds Outstanding shall have the right to consent to and approve the adoption by the CFD of such Supplemental Fiscal Agent Agreements as shall be deemed necessary or desirable by the CFD for the purpose of waiving, modifying, altering, amending, adding to or rescinding, in any particular, any of the terms or provisions contained in this Fiscal Agent Agreement; provided, however, that nothing herein shall permit, or be construed as permitting, (a) an extension of the maturity date of the principal, or the payment date of interest on, any Bond, (b) a reduction in the principal amount of, or redemption premium on, any Bond or the rate of interest thereon, (c) a preference or priority of any Bond over any other Bond, or (d) a reduction in the aggregate principal amount of the Bonds the Owners of which are required to consent to such Supplemental Fiscal Agent Agreement, without the consent of the Owners of all Bonds then Outstanding. ""'" If at any time the CFD shall desire to adopt a Supplemental Fiscal Agent Agreement, which pursuant to the terms of this Section shall require the consent of the Bondowners, the CFD shall so notify the Fiscal Agent and shall deliver to the Fiscal Agent a copy of the proposed Supplemental Fiscal Agent Agreement. The Fiscal Agent shall, at the expense of the CFD, cause notice of the proposed Supplemental Fiscal Agent Agreement to be mailed, by first class mail, postage prepaid, to all Bondowners at their addresses as they appear in the Bond Register. Such notice shall briefly set forth the nature of the proposed Supplemental Fiscal Agent Agreement and shall state that a copy thereof is on file at the office of the Fiscal Agent for inspection by all Bondowners. The failure of any Bondowners to receive such notice shall not affect the validity of such Supplemental Fiscal Agent Agreement when consented to and approved by the Owners of not less than a majority in aggregate principal amount of the Bonds Outstanding as required by this Section. Whenever at any time within one year after the date of the first mailing of such notice, the Fiscal Agent shall receive an instrument or instruments purporting to be executed by the Owners of a majority in aggregate principal amount of the Bonds Outstanding, which instrument or instruments shall refer to the proposed Supplemental Fiscal Agent Agreement described in such notice, and shall specifically consent to and approve the adoption thereofby the CFD substantially in the form of the copy referred to in such notice as on file with the Fiscal Agent, such proposed Supplemental Fiscal Agent Agreement, when duly adopted by the CFD, shall thereafter become a part of the proceedings for the issuance of the Bonds. In determining whether the Owners of a majority of the aggregate principal amount of the Bonds have consented to the adoption of any Supplemental Fiscal "-' 45440519.2 30 ACiENDA ITEM NO. :> ;p PAGE~OF 3~(p : ,,-. Agent Agreement, Bonds which are owned by the CFD or by any person directly or indirectly controlling or controlled by or under the direct or indirect common control with the CFD shall be disregarded and shall be treated as though they were not Outstanding for the purpose of any such determination. Upon the adoption of any Supplemental Fiscal Agent Agreement and the receipt of consent to any such Supplemental Fiscal Agent Agreement from the Owners of not less than a majority in aggregate principal amount of the Outstanding Bonds in instances where such consent is required pursuant to the provisions of this Section, this Fiscal Agent Agreement shall be, and shall be deemed to be, modified and amended in accordance therewith, and the respective rights, duties and obligations under this Fiscal Agent Agreement of the CFD and all Owners of Outstanding Bonds shall thereafter be determined, exercised and enforced hereunder, subject in all respects to such modifications and amendments. Section 6.3. Notation of Bonds; Delivery of Amended Bonds. After the effective date of any action taken as hereinabove provided, the CFD may determine that the Bonds may bear a notation, by endorsement in form approved by the CFD, as to such action, and in that case upon demand of the Owner of any Outstanding Bond at such effective date and presentation of his Bond for the purpose at the office of the Fiscal Agent or at such additional offices as the Fiscal Agent may select and designate for that purpose, a suitable notation as to such action shall be made on such Bonds. If the CFD shall so determine, new Bonds so modified as, in the opinion of the CFD, shall be necessary to conform to such action shall be prepared and executed, and in that case upon demand of the Owner of any Outstanding Bond at such effective date such new Bonds shall be exchanged at the office of the Fiscal Agent or at such additional offices as the Fiscal Agent may select and designate for that purpose, without cost to each Owner of Outstanding Bonds, upon surrender of such Outstanding Bonds. ARTICLE vn ,...- FISCAL AGENT Section 7.1. Fiscal Agent. Union Bank of California, N.A., a national banking association shall be the Fiscal Agent for the Bonds unless and until another Fiscal Agent is appointed by the CFD hereunder. The CFD may, at any time, provided that no Event of Default has occurred and is continuing, appoint a successor Fiscal Agent satisfying the requirements of Section 7.2 below for the purpose of receiving all money which the CFD is required to deposit with the Fiscal Agent hereunder and to allocate, use and apply the same as provided in this Fiscal Agent Agreement. The Fiscal Agent is hereby authorized to and shall mail by first class mail, postage prepaid, or wire transfer in accordance with Section 2.5 above, interest payments to the Bondowners, to select Bonds for redemption, and to maintain the Bond Register. The Fiscal Agent is hereby authorized to pay the principal of and premium, if any, on the Bonds when the same are duly presented to it for payment at maturity or on call and redemption, to provide for the registration of transfer and exchange of Bonds presented to it for such purposes, to provide for the cancellation of Bonds all as provided in this Fiscal Agent Agreement, and to provide for the authentication of Bonds, and shall perform all other duties assigned to or imposed on it as provided in this Fiscal Agent Agreement; provided, however, that the Fiscal Agent undertakes to perform such duties and only such duties as are set forth in this Fiscal Agent Agreement, and no duties of the Fiscal Agent shall be implied hereunder. Discretionary rights of the Fiscal Agent under this Fiscal Agent Agreement shall not be construed as duties. The Fiscal Agent may execute any of the powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys, and the Fiscal Agent shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed by it with due care hereunder. The Fiscal Agent shall keep ,,-. accurate records of all funds administered by it and all Bonds paid, discharged and cancelled by it. The ACENDA ITEM NO. PACE 4 ~~ OF 3J- '33~ 45440519.2 31 Fiscal Agent may establish such funds and accounts as it deems necessary to perform its obligations hereunder. """"" The Fiscal Agent is hereby authorized to redeem the Bonds when duly presented for payment at maturity, or on redemption prior to maturity. The Fiscal Agent shall cancel all Bonds upon payment thereof in accordance with the provisions of Section 10.1 hereof. Section 7.2. Removal of Fiscal Agent. Provided that no Event of Default has occurred and is continuing, the CFD may at any time at its sole discretion remove the Fiscal Agent initially appointed, and any successor thereto, by delivering to the Fiscal Agent a written notice of its decision to remove the Fiscal Agent and may appoint a successor or successors thereto; provided that any such successor, other than the Fiscal Agent, shall be a bank or trust company having (or if such bank or trust company is a member of a bank holding company system its bank holding company has) a combined capital (exclusive of borrowed capital) and surplus of at least $50,000,000, and subject to supervision or examination by federal or state Authority. Any removal shall become effective only upon acceptance of appointment by the successor Fiscal Agent. If any bank or trust company appointed as a successor publishes a report of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority above referred to, then for the purposes of this Section the combined capital and surplus of such bank or trust company shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. Any removal of the Fiscal Agent and appointment of a successor Fiscal Agent shall become effective only upon acceptance of appointment by the successor Fiscal Agent and notice being sent by the successor Fiscal Agent to the Bondowners of the successor Fiscal Agent's identity and address. Section 7.3. Resignation of Fiscal Agent. The Fiscal Agent may at any time resign by giving written notice to the CFD and by giving to the Owners notice of such resignation, which notice shall be mailed to the Owners at their addresses appearing in the registration books in the office of the Fiscal Agent. Upon receiving such notice of resignation, the CFD shall promptly appoint a successor Fiscal Agent satisfying the criteria in Section 7.2 above by an instrument in writing. Any resignation or removal of the Fiscal Agent and appointment of a successor Fiscal Agent shall become effective only upon acceptance of appointment by the successor Fiscal Agent provided, however, that in the event the CFD does not appoint a successor Fiscal Agent within 30 days following receipt of such notice of resignation, the resigning Fiscal Agent may, at the expense of the CFD, petition the appropriate court having jurisdiction to appoint a successor Fiscal Agent. ' '-' Section 7.4. Compensation and Liability of Fiscal Agent. The CFD shall from time to time, subject to any agreement between the CFD and the Fiscal Agent then in force, pay to the Fiscal Agent compensation for its services, reimburse the Fiscal Agent for all of its advances and expenditures, including, but not limited to, advances to and reasonable fees and expenses of independent accountants and counsel and agents employed by it in the exercise and performance of its powers and duties hereunder. The CFD agrees to indemnify the Fiscal Agent, including its officers, directors, employees and agents for, and hold it harmless against, any loss, claim, liability or expense incurred which does not arise from its own negligence or willful misconduct, arising out of or in connection with the administration of this Fiscal Agent Agreement, including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder. The Fiscal Agent shall not be liable for any error in judgment made in good faith by a reasonable officer, unless it shall be proved that the Fiscal Agent was negligent in ascertaining the pertinent facts. Whether or not therein expressly so provided, every provision of this Fiscal Agent Agreement relating to the conduct of or affecting the liability of or affording protection to the Fiscal Agent (acting in its capacity as Fiscal Agent or in its capacity as Dissemination Agent), its officers, directors, employees and agents, shall be subject to the provisions of this Section 7.4. "-"" 45440519.2 32 AGENDA ITEM NO. 3 ~ - PAGE~OF 33(P ,-- The recitals of fact and all promises, covenants and agreements contained herein and in the Bonds and any offering documents pertaining to the Bonds shall be taken as statements, promises, covenants and agreements of the CFD, and the Fiscal Agent assumes no responsibility for the correctness of the same and makes no representations as to the validity or sufficiency of this Fiscal Agent Agreement or the Bonds, and shall incur no responsibility in respect thereof, other than in connection with its duties or obligations specifically set forth herein, in the Bonds, or in the certificate of authentication assigned to or imposed upon the Fiscal Agent. The Fiscal Agent shall be under no responsibility or duty with respect to the issuance of the Bonds for value. The Fiscal Agent shall be protected in acting upon any notice, resolution, request, consent, order, certificate, report, Bond or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties. The Fiscal Agent may consult with counsel, who may be counsel to the CFD, with regard to legal questions, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered hereunder in good faith and in accordance therewith. The Fiscal Agent shall not be bound to recognize any person as the Owner of a Bond unless and until such Bond is submitted for inspection, if required, and his title thereto satisfactorily established, if disputed. The Fiscal Agent may become the owner or pledgee of Bonds, and may otherwise deal with the CFD with the same rights it would have if it were not the Fiscal Agent. ,-- Whenever in the administration of its duties under this Fiscal Agent Agreement the Fiscal Agent shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of bad faith on the part of the Fiscal Agent, be deemed to be conclusively proved and established by a written certificate of the CFD, and such certificate shall be full warrant to the Fiscal Agent for any action taken or suffered under the provisions of this Fiscal Agent Agreement upon the faith thereof, but in its discretion the Fiscal Agent may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as to it may seem reasonable. The Fiscal Agent shall have no duty or obligation whatsoever to enforce the collection of Special Taxes or other funds to be deposited with it hereunder, or as to the correctness of any amounts received, but its liability shall be limited to the proper accounting for such funds as it shall actually receive. No provision in this Fiscal Agent Agreement shall require the Fiscal Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of its rights or powers. All rights and indemnities of the Fiscal Agent pursuant to this Section 7.4 shall survive the removal or resignation of the Fiscal Agent, the discharge of the Bonds, or the amendment or assignment of this Fiscal Agent Agreement. Section 7.5. Merger or Consolidation. Any company into which the Fiscal Agent may be merged or converted or with which it may be consolidated or any company resulting from any merger, conversion or consolidation to which it shall be a party or any company to which the Fiscal Agent may sell or transfer all or substantially all of its corporate trust business, shall be the successor to the Fiscal Agent without the execution or filing of any paper or further act, anything herein to the contrary notwithstanding. ,,-- 45440519.2 33 dr.ENDA ITEM NO. 3k -... L-L5-0F ARTICLE VIII EVENTS OF DEFAULT; REMEDIES ....., Section 8.1. "event of default": Events of Default. Anyone or more of the following events shall constitute an (a) Default in the due and punctual payment of the principal of or redemption premium, if any, on any Bond when and as the same shall become due and payable, whether at maturity as therein expressed, by declaration or otherwise; (b) Default in the due and punctual payment of the interest on any Bond when and as the same shall become due and payable; or (c) Except as described in (a) or (b), default shall be made by the CFD in the observance of any of the agreements, conditions or covenants on its part contained in this Fiscal Agent Agreement or the Bonds, and such default shall have continued for a period of 30 days after the CFD shall have been given notice in writing of such default by the Fiscal Agent or the Owners of 25% in aggregate principal amount of the Outstanding Bonds. The CFD agrees to give notice to the Fiscal Agent immediately upon the occurrence of an event of default under (a) or (b) above and within 30 days of the CFD's knowledge of an event of default under (c) above. The Fiscal Agent shall not be deemed to have knowledge of any event of default described in Section 8.I(c) unless a responsible officer shall have actual knowledge thereof or the Fiscal Agent shall have received written notice at its Principal Office. Section 8.2. Remedies of Owners. Following the occurrence of an event of default, any Owner shall have the right for the equal benefit and protection of all Owners similarly situated: ~ (I) By mandamus or other suit or proceeding at law or in equity to enforce his rights against the CFD and any of the members, officers and employees of the CFD, and to compel the CFD or any such members, officers or employees to perform and carry out their duties under the Act and their agreements with the Owners as provided in this Fiscal Agent Agreement; (2) By suit in equity to enjoin any actions or things which are unlawful or violate the rights of the Owners; or (3) By a suit in equity to require the CFD and its members, officers and employees to account as the fiscal agent of an express trust. Nothing in this Article or in any other provision of this Fiscal Agent Agreement or the Bonds shall affect or impair the obligation of the CFD, which is absolute and unconditional, to pay the interest on and principal of the Bonds to the respective Owners thereof at the respective dates of maturity, as herein provided, out of the Special Taxes and other amounts pledged for such payment, or affect or impair the right of action, which is also absolute and unconditional, of such Owners to institute suit to enforce such payment by virtue of the contract embodied in the Bonds and in this Fiscal Agent Agreement. A waiver of any default or breach of duty or contract by any Owner shall not affect any subsequent default or breach of duty or contract, or impair any rights or remedies on any such subsequent default or breach. No delay or omission by any Owner to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default or an ....., 45440519.2 34 AOENDA ITEM NO. 2> d-. PACE Y (p OF ~'30 ",-.. acquiescence therein, and every power and remedy conferred upon the Owners by the Act or by this article may be enforced and exercised from time to time and as often as shall be deemed expedient by the Owners. If any suit, action or proceeding to enforce any right or exercise any remedy is abandoned or determined adversely to the Owners, the CFD and the Owners shall be restored to their former positions, rights and remedies as if such suit, action or proceeding had not been brought or taken. No remedy herein conferred upon or reserved to the Owners is intended to be exclusive of any other remedy. Every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing, at law or in equity or by statute or otherwise, and may be exercised without exhausting and without regard to any other remedy conferred by the Act or any other law. In case the moneys held by the Fiscal Agent after an event of default pursuant to Section 8.1(a) or (b) shall be insufficient to pay in full the whole amount so owing and unpaid upon the Outstanding Bonds, then all available amounts shall be applied to the payment of such principal and interest without preference or priority of principal over interest, or interest over principal, or of any installment of interest over any other installment of interest, ratably to the aggregate of such principal and interest. ARTICLE IX DEFEASANCE ",-.. Section 9.1. Defeasance. If the CFD shall payor cause to be paid, or there shall otherwise be paid, to the Owner of an Outstanding Bond the interest due thereon and the principal thereof, at the times and in the manner stipulated in this Fiscal Agent Agreement or any Supplemental Fiscal Agent Agreement, then the Owner of such Bond shall cease to be entitled to the pledge of Special Taxes, and, other than as set forth below, all covenants, agreements and other obligations of the CFD to the Owner of such Bond under this Fiscal Agent Agreement shall thereupon cease, terminate and become void and be discharged and satisfied. In the event of a defeasance of all Outstanding Bonds pursuant to this Section, the Fiscal Agent shall execute and deliver to the CFD all such instruments as may be desirable to evidence such discharge and satisfaction, and the Fiscal Agent shall pay over or deliver to the CFD's general fund all money or securities held by it pursuant to this Fiscal Agent Agreement which are not required for the payment of the principal of, premium, if any, and interest due on such Bonds. Any Outstanding Bond shall be deemed to have been paid within the meaning expressed in the first paragraph of this Section if such Bond is paid in anyone or more of the following ways: (a) by paying or causing to be paid the principal of, premium, if any, and interest on such Bond, as and when the same become due and payable; (b) by depositing with the Fiscal Agent, in trust, at or before maturity, money which, together with the amounts then on deposit in the Special Tax Fund (exclusive of amounts transferred to the Administrative Expense Account) and available for such purpose, is fully sufficient to pay the principal of, premium, if any, and interest on such Bond, as and when the same shall become due and payable; or ",-.. (c) by depositing with the Fiscal Agent or another escrow bank appointed by the CFD, in trust, noncallable Defeasance Securities, in which the CFD may lawfully invest its money, in such amount as will be sufficient, together with the interest to accrue thereon and 45440519.2 35 ACENDA ITEM "0,_ 3:J- PAGE.::G-OF 33(0 - moneys then on deposit in the Special Tax Fund (exclusive of amounts transferred to the Administrative Expense Account) and available for such purpose, together with the interest to accrue thereon, to pay and discharge the principal of, premium, if any, and interest on such Bond, .....,. as and when the same shall become due and payable; then, at the election of the CFD, and notwithstanding that any Outstanding Bonds shall not have been surrendered for payment, all obligations of the CFD under this Fiscal Agent Agreement and any Supplemental Fiscal Agent Agreement with respect to such Bond shall cease and terminate, except for the obligation of the Fiscal Agent to payor cause to be paid to the Owners of any such Bond not so surrendered and paid, all sums due thereon and except for the covenants of the CFD contained in Section 5.2(6) or any covenants in a Supplemental Fiscal Agent Agreement relating to compliance with the Code. Notice of such election shall be filed with the Fiscal Agent not less than ten days prior to the proposed defeasance date, or such shorter period of time as may be acceptable to the Fiscal Agent. In connection with a defeasance under (b) or (c) above, there shall be provided to the CFD a verification report from an independent nationally recognized certified public accountant stating its opinion as to the sufficiency of the moneys or securities deposited with the Fiscal Agent or the escrow bank to pay and discharge the principal of, premium, if any, and interest on all Outstanding Bonds to be defeased in accordance with this Section, as and when the same shall become due and payable, and an opinion of Bond Counsel (which may rely upon the opinion of the certified public accountant) to the effect that the Bonds being defeased have been legally defeased in accordance with this Fiscal Agent Agreement and any applicable Supplemental Fiscal Agent Agreement. If a forward supply contract is employed in connection with an advance refunding to be effected under (c) above, (i) such verification report shall expressly state that the adequacy of the amounts deposited with the bank under (c) above to accomplish the refunding relies solely on the initial escrowed investments and the maturity principal thereof and interest income thereon and does not assume performance under or compliance with the forward supply contract, and (ii) the applicable escrow agreement executed to effect an advance refunding in accordance with (c) above shall provide that, in the event of any discrepancy or difference between the terms of the forward supply ......, contract and the escrow agreement, the terms of the escrow agreement shall be controlling. Upon a defeasance, the Fiscal Agent, upon request of the CFD, shall release the rights of the Owners of such Bonds which have been defeased under this Fiscal Agent Agreement and any Supplemental Fiscal Agent Agreement and execute and deliver to the CFD all such instruments as may be desirable to evidence such release, discharge and satisfaction. In the case of a defeasance hereunder of all Outstanding Bonds, the Fiscal Agent shall pay over or deliver to the CFD any funds held by the Fiscal Agent at the time of a defeasance, which are not required for the purpose of paying and discharging the principal of, premium, if any, or interest on the Bonds when due. The Fiscal Agent shall, at the written direction of the CFD, mail, first class, postage prepaid, a notice to the Bondowners whose Bonds have been defeased, in the form directed by the CFD, stating that the defeasance has occurred. Section 9.2. No Additional Bonds. The CFD shall not issue bonds, notes or other forms of indebtedness payable from Special Taxes and other amounts deposited in the Special Tax Fund and secured by a lien and charge upon such amounts equal to the lien and charge securing the Outstanding Bonds. ARTICLE X MISCELLANEOUS Section 10.1. Cancellation of Bonds. All Bonds surrendered to the Fiscal Agent for payment upon maturity or for redemption shall be upon payment therefor, and any Bond purchased by the CFD as authorized herein and delivered to the Fiscal Agent for such purpose shall be, cancelled forthwith and ....., 454405]9.2 36 AGENDA ITEM NO. -3.;;l _ PAGE~OF 33lP _ ~ shall not be reissued. The Fiscal Agent shall destroy such Bonds, as provided by law, and, upon request of the CFD, furnish to the CFD a certificate of such destruction. Section 10.2. Execution of Documents and Proof of Ownership. Any request, direction, consent, revocation of consent, or other instrument in writing required or permitted by this Fiscal Agent Agreement to be signed or executed by Bondowners may be in any number of concurrent instruments of similar tenor may be signed or executed by such Owners in person or by their attorneys appointed by an instrument in writing for that purpose, or by the bank, trust company or other depository for such Bonds. Proof of the execution of any such instrument, or of any instrument appointing any such attorney, and of the ownership of Bonds shall be sufficient for the purposes of this Fiscal Agent Agreement (except as otherwise herein provided), if made in the following manner: (1) The fact and date of the execution by any Owner or his or her attorney of any such instrument and of any instrument appointing any such attorney, may be proved by a signature guarantee of any bank or trust company or other eligible guarantor located within the United States of America. Where any such instrument is executed by an officer of a corporation or association or a member of a partnership on behalf of such corporation, association or partnership, such signature guarantee shall also constitute sufficient proof of his Authority. (2) As to any Bond, the person in whose name the same shall be registered in the Bond Register shall be deemed and regarded as the absolute owner thereof for all purposes, and payment of or on account of the principal of any such Bond, and the interest thereon, shall be made only to or upon the order of the registered Owner thereof or his or her legal representative. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Bond and the interest thereon to the extent of the sum or sums to be paid. Neither the CFD nor the Fiscal Agent shall be affected by any notice to the contrary . I""""" Nothing contained in this Fiscal Agent Agreement shall be construed as limiting the Fiscal Agent or the CFD to such proof, it being intended that the Fiscal Agent or the CFD may accept any other evidence of the matters herein stated which the Fiscal Agent or the CFD may deem sufficient. Any request or consent of the Owner of any Bond shall bind every future Owner of the same Bond in respect of anything done or suffered to be done by the Fiscal Agent or the CFD in pursuance of such request or consent. Section 10.3. Unclaimed Moneys. To the extent permitted by law, anything in this Fiscal Agent Agreement to the contrary notwithstanding, any money held by the Fiscal Agent in trust for the payment and discharge of any of the Outstanding Bonds which remain unclaimed for a period ending at the earlier of two Business Days prior to the date such funds would escheat to the State or two years after the date when such Outstanding Bonds have become due and payable, if such money was held by the Fiscal Agent at such date, or for a period ending at the earlier of two Business Days prior to the date such funds would escheat to the State or two years after the date of deposit of such money if deposited with the Fiscal Agent after the date when such Outstanding Bonds become due and payable, shall be repaid by the Fiscal Agent to the CFD, as its absolute property and free from trust, and the Fiscal Agent shall thereupon be released and discharged with respect thereto and the Owners shall look only to the CFD for the payment of such Outstanding Bonds; provided, however, that, before being required to make any such payment to the CFD, the Fiscal Agent at the written request of the CFD or the Fiscal Agent shall, at the expense of the CFD, cause to be mailed by first-class mail, postage prepaid, to the registered Owners of such Outstanding Bonds at their addresses as they appear on the registration books of the Fiscal Agent a notice that said money remains unclaimed and that, after a date named in said notice, which date shall not ,-.. be less than 30 days after the date of the mailing of such notice, the balance of such money then unclaimed will be returned to the CFD. The Fiscal Agent shall not be liable to the CFD or any Owner for 45440519.2 37 ACENDA ITEM NO. 3 ~ ._ PAGE~OF~ interest on uninvested funds held by it for the payment and discharge of the principal, premium or interest on any of the Bonds to any Owner. ~ Section lOA. Provisions Constitute Contract. The prOVISIons of this Fiscal Agent Agreement shall constitute a contract between the CFD and the Bondowners and the provisions hereof shall be construed in accordance with the laws of the State of California. In case any suit, action or proceeding to enforce any right or exercise any remedy shall be brought or taken and, should said suit, action or proceeding be abandoned, or be determined adversely to the Bondowners or the Fiscal Agent, then the CFD, the Fiscal Agent and the Bondowners shall be restored to their former positions, rights and remedies as if such suit, action or proceeding had not been brought or taken. After the issuance and delivery of the Bonds this Fiscal Agent Agreement shall be irrepealable, but shall be subject to modifications to the extent and in the manner provided in this Fiscal Agent Agreement, but to no greater extent and in no other manner. Section 10.5. Future Contracts. Nothing herein contained shall be deemed to restrict or prohibit the CFD from making contracts or creating bonded or other indebtedness payable from a pledge of the Special Taxes which is subordinate to the pledge hereunder, or which is payable from the general fund of the CFD or from taxes or any source other than the Special Taxes and other amounts pledged hereunder. Section 10.6. Further Assurances. The CFD will adopt, make, execute and deliver any and all such further resolutions, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of this Fiscal Agent Agreement, and for the better assuring and confirming unto the Owners of the Bonds the rights and benefits provided in this Fiscal Agent Agreement. ~ Section 10.7. Severability. If any covenant, agreement or provision, or any portion thereof, contained in this Fiscal Agent Agreement, or the application thereof to any person or circumstance, is held to be unconstitutional, invalid or unenforceable, the remainder of this Fiscal Agent Agreement and the application of any such covenant, agreement or provision, or portion thereof, to other persons or circumstances, shall be deemed severable and shall not be affected thereby, and this Fiscal Agent Agreement, the Bonds issued pursuant hereto shall remain valid and the Bondowners shall retain all valid rights and benefits accorded to them under the laws of the State of California. Section 10.8. Notices. Any notices required to be given to the CFD with respect to the Bonds or this Fiscal Agent Agreement shall be mailed, first class, postage prepaid, or personally delivered to the Mayor of the City of Lake Elsinore, 130 South Main Street, Lake Elsinore, California 92530, and all notices to the Fiscal Agent in its capacity as Fiscal Agent shall be mailed, first class, postage prepaid, or personally delivered to the Fiscal Agent, Union Bank of California, N.A., 120 South San Pedro Street, Suite 400, Los Angeles, California 90012, Attention: Corporate Trust Department. Section 10.9. General Authorization. The Mayor, City Manager and the City Treasurer are hereby respectively authorized to do and perform from time to time any and all acts and things consistent with this Fiscal Agent Agreement necessary or appropriate to carry the same into effect. Section 10.10. Execution in Counterparts. This Fiscal Agent Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original; and all such coUnterparts shall together constitute but one and the same instrument. '-' 45440519.2 38 AGENDA IlEM NO. ~ PACE.... '10 OF ,;--. IN WITNESS WHEREOF, the CITY COUNCIL OF THE CITY OF LAKE ELSINORE, acting as the legislative body of CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2005-6 (CITY CENTER TOWNHOMES), has caused this Fiscal Agent Agreement to be signed by its Mayor and Union Bank of California, N.A., in token of its acceptance of the trust created hereunder, has caused this Fiscal Agent Agreement to be signed in its corporate name by its officer identified below, all as of the day and year first above written. CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2005-6 (CITY CENTER TOWNHOMES) By: Mayor of the City of Lake Elsinore, acting in its capacity as the legislative body of City of Lake Elsinore Community Facilities District No. 2005-6 (City Center Townhomes) UNION BANK OF CALIFORNIA, N.A., as Fiscal Agent ,-... By: Its: Authorized Officer ,-- 454405 I 9.2 S-l 30 AGENDA ITEM NO. - . ~r= S_L OF ~3(p EXIllBIT A FORM OF BOND ...", No. $ UNITED STATES OF AMERICA STATE OF CALIFORNIA COUNTY OF RIVERSIDE CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2005-6 (CITY CENTER TOWNHOMES) . SPECIAL TAX BOND, 2006 SERIES A INTEREST RATE MATURITY DATE DATED DATE CUSIP NO. % September 1, _ ,2006 REGISTERED OWNER: CEDE & CO. PRINCIPAL AMOUNT: AND NO/ 100 DOLLARS CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2005-6 (CITY CENTER TOWNHOMES) (the "CFD") situated in the County of Riverside, State of California, FOR VALUE RECEIVED, hereby promises to pay, solely from certain amounts held under the Fiscal Agent '-' Agreement (as hereinafter defined), to the Registered Owner named above, or registered assigns, on the Maturity Date set forth above, unless redeemed prior thereto as hereinafter provided, the Principal Amount set forth above, and to pay interest on such Principal Amount from the Interest Payment Date (as hereinafter defined) next preceding the date of authentication hereof, unless (i) the date of authentication is an Interest Payment Date in which event interest shall be payable from such date of authentication, (ii) the date of authentication is after a Record Date (as hereinafter defined) but prior to the immediately succeeding Interest Payment Date, in which event interest shall be payable from the Interest Payment Date immediately succeeding the date of authentication, or (iii) the date of authentication is prior to the close of business on the first Record Date in which event interest shall be payable from the Dated Date set forth above. Notwithstanding the foregoing, if at the time of authentication of this Bond interest is in default, interest on this Bond shall be payable from the last Interest Payment Date to which the interest has been paid or made available for payment or, if no interest has been paid or made available for payment, interest on this Bond shall be payable from the Dated Date set forth above. Interest will be paid semiannually on March 1 and September 1 of each year (each, an "Interest Payment Date"), commencing I, _, at the Interest Rate set forth above, until the Principal Amount hereof is paid or made available for payment. The principal of and premium, if any, on this Bond are payable to the Registered Owner hereof in lawful money of the United States of America upon presentation and surrender of this Bond at the Principal Office of Union Bank of California, N.A., a national banking association (the "Fiscal Agent") in Los Angeles, California. Interest on this Bond shall be paid by check of the Fiscal Agent mailed by first class mail, postage prepaid, or in certain circumstances described in the Fiscal Agent Agreement by wire transfer to an account within the United States, to the Registered Owner hereof as of the close of business ...", 45440519.2 A-I ACENDA nat NO. 39- PACE Q OF 3'342-- ,-.... on the fifteenth day of the month preceding the month in which the Interest PaYment Date occurs (the "Record Date") at such Registered Owner's address as it appears on the registration books maintained by the Fiscal Agent. Interest due on the Bonds shall be calculated on a basis of a 360-day year comprised of twelve 30-day months. This Bond is one of a duly authorized issue of "City of Lake Elsinore Community Facilities District No. 2005-6 (City Center Townhomes) Special Tax Bonds, 2006 Series A" (the "Bonds") issued in the aggregate principal amount of $ pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, being Sections 53311, et seq., of the California Government Code (the "Act") for the purpose of financing the acquisition of certain capital facilities in the CFD, funding a reserve account, paying capitalized interest and paying certain costs related to the issuance of the Bonds. The issuance of the Bonds and the terms and conditions thereof are provided for by a resolution adopted by the City Council of the City of Lake Elsinore, acting in its capacity as the legislative body of the CFD (the "Council") on ~ 2006 and a Fiscal Agent Agreement dated as of 1,2006 (the "Fiscal Agent Agreement"), between the CFD and the Fiscal Agent, and this reference incorporates the Fiscal Agent Agreement herein, and by acceptance hereof the Registered Owner of this Bond assents to said terms and conditions. The Fiscal Agent Agreement is executed under and this Bond is issued under, and both are to be construed in accordance with, the laws of the State of California. Any amounts for the payment hereof shall be limited to the Special Taxes pledged and collected or foreclosure proceeds received following a default in paYment of the Special Taxes and other amounts deposited to the Special Tax Fund (exclusive of amounts transferred to the Administrative Expense Account) established under the Fiscal Agent Agreement. The CFD has covenanted for the benefit of the owners of the Bonds that under certain circumstances described in the Fiscal Agent Agreement it will commence and diligently pursue to completion appropriate foreclosure proceedings in the event of delinquencies of Special Tax installments levied for paYment of principal and interest on the Bonds. ,-.... The Bonds are subject to redemption prior to maturity at the option of the CFD on any date on or after September 1, _, as a whole or in part, by lot, from any available source of funds at the following redemption prices (expressed as a percentage of the principal amount of Bonds to be), together with accrued interest thereon to the date fixed for redemption: Redemption Dates Redemption Prices September I, _ through August 31, _ September 1, _ through August 31, _ September 1, _ and thereafter % The Bonds are subject to mandatory redemption prior to maturity on any date, in whole or in part, in a manner determined by the District from prepayments of Special Taxes at the following redemption prices (expressed as a percentage of the principal amount of Bonds to be redeemed), together with accrued interest thereon to the date fixed for redemption: Redemption Dates Redemption Prices September I, _ through August 31, _ September I, _ through August 31, _ September 1, _ and thereafter % As provided for in optional redemption /'"' 45440519.2 A-2 ACENDA ITEM NO. ~/) -: PAGE 5?, OF 3~" In connection with such redemption, the CFD may also apply amounts in the Reserve Account which will be in excess of the Reserve Requirement as a result of such Special Tax prepayment to redeem Bonds as set forth above. ,....", The Bonds are subject to special mandatory redemption on any date from unused proceeds of the Bonds after completion or abandonment of the improvements to be financed with such proceeds, from the deposit of fees with the CFD by a public agency which has accepted facilities serving the CFD and from insurance or condemnation proceeds or other mandatory redemption, without premium, plus accrued interest to the redemption date, all as determined by the CFD. The Bonds maturing on September 1, _ and September 1, _ are subject to mandatory redemption, in part by lot, on September I in each year commencing September I, _, with respect to the Bonds maturing on September I, --J and commencing September I, --J with respect to the Bonds maturing on September I, -' from the Sinking Fund Payments that have been deposited into the Redemption Account at a redemption price equal to the principal amount thereof to be redeemed, without premium, plus accrued interest thereon to the date of redemption as set forth in the following schedule; provided, however, that (i) in lieu of redemption thereof, the Bonds may be purchased by the CFD and tendered to the Fiscal Agent, and (ii) if some but not all of the Bonds have been redeemed pursuant to optional redemption, special mandatory redemption from prepayment of Special Taxes or any other special mandatory redemption provision provided in the Fiscal Agent Agreement, the total amount of all future sinking payments will be reduced by the aggregate principal amount of the Bonds so redeemed, to be allocated among such sinking payments on a pro rata basis (as nearly as practicable) in integral multiples of $5,000 as determined by the CFD. Bonds Maturing on September 1,_ Redemption Date (September I) Principal Amount ~ $ (maturity) Bonds Maturing on September I, _ Redemption Date (September 1) Principal Amount $ (maturity) ~ 45440519.2 A-3 3';- AGENDA ITEM NO.. -- PAGE~OF 3~" /'""'" Notice of redemption with respect to the Bonds to be redeemed shall be mailed to the registered owners thereof not less than 30 nor more than 60 days prior to the redemption date by first class mail, postage prepaid, to the addresses set forth in the registration books. Neither a failure of the Registered Owner hereof to receive such notice nor any defect therein will affect the validity of the proceedings for redemption. All Bonds or portions thereof so called for redemption will cease to accrue interest on the specified redemption date; provided that funds for the redemption are on deposit with the Fiscal Agent on the redemption date. Thereafter, the registered owners of such Bonds shall have no rights except to receive payment of the redemption price upon the surrender of the Bonds. This Bond shall be registered in the name of the Registered Owner hereof, as to both principal and interest, and the CFD and the Fiscal Agent may treat the Registered Owner hereof as the absolute owner for all purposes and shall not be affected by any notice to the contrary. The Bonds are issuable only in fully registered form in the denomination of $5,000 or any integral multiple thereof and may be exchanged for a like aggregate principal amount of Bonds of other authorized denominations of the same issue and maturity, all as more fully set forth in the Fiscal Agent Agreement. This Bond is transferable by the Registered Owner hereof, in person or by his attorney duly authorized in writing, at the Principal Office of the Fiscal Agent in Los Angeles, California, but only in the manner, subject to the limitations and upon payment of the charges provided in the Fiscal Agent Agreement, upon surrender and cancellation of this Bond. Upon such transfer, a new registered Bond of authorized denomination or denominations for the same aggregate principal amount of the same issue and maturity will be issued to the transferee in exchange therefor. The Fiscal Agent shall not be required to register transfers or make exchanges of (i) any Bonds for a period of 15 days next preceding any selection of the Bonds to be redeemed, or (ii) any Bonds chosen for redemption. /'""'" The rights and obligations of the CFD and of the registered owners of the Bonds may be amended at any time, and in certain cases without notice to or the consent of the registered owners, to the extent and upon the terms provided in the Fiscal Agent Agreement. The Fiscal Agent Agreement contains provisions permitting the CFD to make provision for the payment of the interest on, and the principal and premium, if any, of the Bonds so that such Bonds shall no longer be deemed to be outstanding under the terms of the Fiscal Agent Agreement. THE BONDS DO NOT CONSTITUTE OBLIGATIONS OF THE CITY OF LAKE ELSINORE (THE "CITY") OR OF THE CFD FOR WHICH THE CITY OR THE CFD IS OBLIGATED TO LEVY OR PLEDGE, OR HAS LEVIED OR PLEDGED, GENERAL OR SPECIAL TAXES, OTHER THAN THE SPECIAL TAXES REFERENCED HEREIN. THE BONDS ARE LIMITED OBLIGATIONS OF THE CFD PAYABLE FROM THE PORTION OF THE SPECIAL TAXES AND OTHER AMOUNTS PLEDGED UNDER THE FISCAL AGENT AGREEMENT BUT ARE NOT A DEBT OF THE CITY, THE STATE OF CALIFORNIA OR ANY OF ITS POLITICAL SUBDIVISIONS WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY LIMITATION OR RESTRICTION. This Bond shall not become valid or obligatory for any purpose until the certificate of authentication and registration hereon endorsed shall have been dated and signed by the Fiscal Agent. IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts, conditions and things required by law to exist, happen and be performed precedent to and in the issuance of this Bond do exist, have happened and have been performed in due time, form and manner as required by law, and that the /"'""' 454405]9.2 A-4 .3';) AGENDA ITEM NO. ~ PAGE ~ S OF '3 amount of this Bond, together with all other indebtedness of the CFD, does not exceed any debt limit prescribed by the laws or Constitution of the State of California. ~ .....", .....", 45440519.2 A-5 AGENDA ITEM NO. .3:). DAGE Sfo OF~ ~ IN WITNESS WHEREOF, City of Lake Elsinore Community Facilities District No. 2005-6 (City Center T ownhomes) has caused this Bond to be dated as of the Dated Date, to be signed on behalf of the CFD by the Mayor of the City of Lake Elsinore, acting as the legislative body of the City of Lake Elsinore Community Facilities District No. 2005-6 (City Center Townhomes) by her manual signature and attested by the manual signature of the City Clerk of the City of Lake Elsinore and has caused the seal of the City to be reproduced hereon. [SEAL] By: Mayor of the City of Lake Elsinore, acting as the legislative body of City of Lake Elsinore Community Facilities District No. 2005-6 (City Center Townhomes) ATTEST: City Clerk of the City of Lake Elsinore, acting as the legislative body of City of Lake Elsinore Community Facilities District No. 2005-6 (City Center Townhomes) ,.......... [FORM OF FISCAL AGENT'S CERTIFICATE OF AUTHENTICATION AND REGISTRATION] This is one of the Bonds described in the within-defined Fiscal Agent Agreement. Dated: UNION BANK OF CALIFORNIA, N.A., as Fiscal Agent By: Its: Authorized Signatory ~ 45440519.2 A-6 AGENDA ITEM NO. 3 c:9. PAGE S7 OF ~~~ ~ [FORM OF ASSIGNMENT] For value received the undersigned hereby sells, assigns and transfers unto ......, (NAME, ADDRESS, AND TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER OF ASSIGNEE) the within-mentioned Bond and hereby irrevocably constitute(s) and appoint(s) attorney, to transfer the same on the registration books ofthe Fiscal Agent with full power of substitution in the premises. Dated: Signature Guaranteed: ......, Note: Signature(s) must be guaranteed by an eligible guarantor institution. Note: The signature(s) on this Assignment must correspond with the names as written on the face of the within Bond in every particular without alteration or enlargement or any change whatsoever. .~ 45440519.2 A-7 AOENDA ITSI NO. PAGE sg .31J- OF3~ EXHIBIT B ,,-- REQUISITION NO.1 CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2005-6 (CITY CENTER TOWNHOMES) REQUISITION FOR DISBURSEMENT OF PROJECT COSTS Union Bank of California, N.A. is hereby requested to pay from the Acquisition and Construction Fund of the Community Facilities District No. 2005-6 (City Center Townhomes), established by the Fiscal Agent Agreement dated as of 1, 2006, between the Fiscal Agent and City of Lake Elsinore Community Facilities District No. 2005-6 (City Center Townhomes), for payment of authorized Project Costs. The amount is due and payable under purchase order, contract or other authorization and has not formed the basis of any prior request for payment. The conditions to the release of this amount from the Community Facilities District No. 2005-6 (City Center Townhomes) Acquisition and Construction Fund are satisfied. There has not been filed with nor served upon the CFD notice of any lien, right to lien or attachment upon, or stop notice or claim affecting the right to receive payment of the amount specified above which has not been released or will not be released simultaneously with the payment of such amount, other than materialmen's or mechanic's liens accruing by mere operation of law. ,,-- Dated: CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2005-6 (CITY CENTER TOWNHOMES) By: Authorized Representative ,,-- 45440519.2 B-1 AGENDA ITEM NO. J?-. - PAGE~OF~ CONTINUING DISCLOSURE AGREEMENT (City of Lake Elsinore Community Facilities District No. 2005-6 (City Center Townhomes)) ~ This Continuing Disclosure Agreement (the "Disclosure Agreement"), dated as of 1, 2006, is executed and delivered by the City of Lake Elsinore Community Facilities District No. 2005-6 (City Center Townhomes) (the "CFD") and Union Bank of California, N.A., as dissemination agent (the "Dissemination Agent") hereunder, in connection with the issuance of the $ City of Lake Elsinore Community Facilities District No. 2005-6 (City Center Townhomes) Special Tax Bonds, 2006 Series A (the "Bonds"). The Bonds are being issued pursuant to provisions of a Fiscal Agent Agreement, dated as of 1, 2006 (the "Fiscal Agent Agreement"), by and between the CFD and Union Bank of California, N.A., as fiscal agent (the "Fiscal Agent"). The CFD and the Dissemination Agent covenant and agree as follows: SECTION 1. Purpose of the Disclosure Agreement. This Disclosure Agreement is being executed and delivered by the CFD, the Dissemination Agent and the Fiscal Agent for the benefit of the Beneficial Owners of the Bonds and in order to assist the Participating Underwriter in complying with S.E.C. Rule 15c2-12(b)(5). SECTION 2. Definitions. In addition to the definitions set forth in the Fiscal Agent Agreement~ which apply to any capitalized term used in this Disclosure Agreement unless otherwise defined in this Section, the following capitalized terms shall have the following meanmgs: "'-" "Annual Report" shall mean any Annual Report or any addendum thereto provided by the CFD pursuant to, and as described in, Sections 3 and 4 of this Disclosure Agreement. "Beneficial Owner" shall mean any person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Bonds for federal income tax purposes. "CFD" means City of Lake Elsinore Community Facilities District No. 2005-6 (City Center Townhomes), a community facilities district organized and existing under the laws of the State of California, and such area of land comprising that community facilities district. "City" means the City of Lake Elsinore, California. "Disclosure Representative" shall mean the City Manager of the City of Lake Elsinore or his or her designee, or such other officer or employee as the City Council of the City of Lake Elsinore (the "Council") shall designate in writing to the Fiscal Agent and Dissemination Agent from time to time. "Dissemination Agent" shall mean the Fiscal Agent, acting in its capacity as Dissemination Agent hereunder, or any successor Dissemination Agent designated in writing by the CFD and which has filed with the Fiscal Agent a written acceptance of such designation. '-' 45484659.1 1 AGENDA \TEM NO. 3 ~ pAGe ~O OF /"'" "Listed Events" shall mean any of the events listed in Section 5(a) of this Disclosure Agreement. "National Repository" shall mean any Nationally Recognized Municipal Securities Information Repository for purposes of the Rule. The National Repositories currently approved by the Securities and Exchange Commission are set forth in the SEC website located at http://www.sec.gov. "Participating Underwriter" shall mean any of the original underwriters of the Bonds required to comply with the Rule in connection with offering of the Bonds. "Repository" shall mean each National Repository and each State Repository. "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. "State" shall mean the State of California. "State Repository" shall mean any public or private repository or entity designated by the State as a state repository for the purpose of the Rule and recognized as such by the Securities and Exchange Commission. As of the date of this Agreement, there is no State Repository. SECTION 3. Provision of Annual Reports. r-- (a) The CFD shall, or shall cause the Dissemination Agent to, not later than 225 days after the end of the City's fiscal year, commencing with fiscal year ending June 30, 2006, provide to each Repository and the Participating Underwriter an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Agreement. The Annual Report may be provided in electronic format to each Repository and may be provided through the services of a "Central Post Office" approved by the Securities and Exchange Commission. 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 Agreement. If the City's Fiscal Year changes, it shall give notice of such change in the same manner as for a Listed Event under Section 5(t). Furthermore, upon receipt of a written request of any Beneficiary Owner, the Dissemination Agent shall provide a copy of the Annual Report to such Beneficial Owner. (b) Not later than fifteen (15) Business Days prior to the date specified in subsection (a) for providing the Annual Report to Repositories, the CFD shall provide the Annual Report to the Dissemination Agent and the Fiscal Agent (if the Fiscal Agent is not the Dissemination Agent). If by such date, the Dissemination Agent has not received a copy of the Annual Report, the Dissemination Agent shall notify the CFD and the Fiscal Agent of such failure to receive the Annual Report. The CFD shall provide a written certification with each Annual Report furnished to the Dissemination Agent and the Fiscal Agent to the effect that such Annual Report constitutes the Annual Report required to be furnished by it hereunder. The Dissemination Agent and Fiscal Agent may conclusively rely upon such certification of the CFD and shall have no duty or obligation to review such Annual Report. ,""'" 45484659.1 2 AGENDA naA NO. J.;l. ~ PACE.1al-OF ~ - (c) If the Dissemination Agent is unable to verify that an Annual Report has been provided to Repositories by the date required in subsection (a), the Dissemination Agent shall send a notice to each Repository or to the Municipal Securities Rulemaking Board and the '-'" State Repository, if any in substantially the form attached as Exhibit A. (d) The Dissemination Agent shall: (i) determine each year prior to the date for providing the Annual Report the name and address of each National Repository and the State Repository, if any; and (ii) to the extent information is known to it, file a report with the CFD and (if the Dissemination Agent is not the Fiscal Agent) the Fiscal Agent certifying that the Annual Report has been provided pursuant to this Disclosure Agreement, stating the date it was provided and listing all the Repositories to which it was provided. SECTION 4. Content of Annual Reports. The CFD's Annual Report shall contain or include by reference the following: (i) The audited financial statements of the City, prepared in accordance with generally accepted accounting principles in effect from time to time. If the City's audited financial statements are not available by the time the Annual Report is required to be filed pursuant to Section 3(a), the Annual Report shall contain unaudited fmancial statements in a format similar to the financial statements contained in the Official Statement, and the audited financial statements shall be filed in the same manner as the Annual Report when they become available. '-'" (ii) The balance in the Reserve Account held under the Fiscal Agent Agreement. (iii) Total assessed valuation (per the Riverside County Assessor records) of all parcels currently subject to the Special Tax within the CFD, showing the total assessed valuation for all land and the total assessed valuation for all improvements within the CFD and distinguishing between the assessed value of developed property and undeveloped property. (iv) Identification of each parcel within the CFD for which any Special Tax payment is delinquent, together with the following information respecting each such parcel: (A) the amount delinquent; (B) the date of each delinquency; (C) in the event a foreclosure complaint has been filed respecting such delinquent parcel and such complaint has not yet been dismissed, the date on which the complaint was filed; and (D) in the event a foreclosure sale has occurred respecting such delinquent parcel, a summary of the results of such foreclosure sale. (v) The number of certificates of occupancy issued by the City within the CFD and the principal amount of prepayments of the Special Tax with respect to the CFD for the prior Fiscal Year. (vi) A land ownership summary listing property owners responsible for more than five percent (5%) of the annual Special Tax levy, as shown on the Riverside County Assessor's last equalized tax roll prior to the September next preceding the Annual Report date. """" 45484659.1 3 AGENDA ITEM NO. 30- PACE to~ OF~ ~ (vii) A description of the status of the facilities being constructed with proceeds of the Bonds as ofthe date ofthe Annual Report (but only so long as such facilities are not completed). (viii) The number of building permits issued in the CFD during the prior Fiscal Year. (ix) The amount of Special Taxes generated by the developed parcels and undeveloped parcels within the CFD. Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues of the City or related public entities, which have been submitted to each of the Repositories or the Securities and Exchange Commission. If the document included by reference is a final official statement, it must be available from the Municipal Securities Rulemaking Board. The CFD 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 CFD shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds, if material: 1. 2. """" 3. 4. 5. 6. 7. 8. 9. 10. 11. principal and interest payment delinquencies; non-payment related defaults; modifications to rights of Bondholders; optional, contingent or unscheduled bond calls; defeasances; rating changes; adverse tax opinions or events adversely affecting the tax-exempt status of the Bonds; unscheduled draws on the debt servIce reserves reflecting financial difficulties; unscheduled draws on credit enhancements reflecting financial difficulties; substitution of credit or liquidity providers, or their failure to perform; release, substitution or sale of property securing repayment of the Bonds. (b) The Dissemination Agent shall, within one (1) Business Day of obtaining ~ actual knowledge of the occurrence of any of the Listed Events, or as soon as reasonably practicable thereafter, contact the Disclosure Representative, inform such person of the event, 45484659.1 4 ACENDA ITEM NO. .3 ';;< PACE CQ~ OF~ and request that the CFD promptly notify the Dissemination Agent in writing whether or not to report the event pursuant to subsection (f) and promptly direct the Fiscal Agent whether or not to report such event to the Bondholders. In the absence of such direction the Dissemination Agent ...., shall not report such event unless otherwise required to be reported by the Fiscal Agent to the Bondholders under the Fiscal Agent Agreement. The Dissemination Agent may conclusively rely upon such direction (or lack thereof). For purposes of this Disclosure Agreement, "actual knowledge" of the occurrence of such Listed Events shall mean actual knowledge by the officer at the corporate trust office of the Fiscal Agent or the Dissemination Agent with regular responsibility for the administration of matters related to the Fiscal Agent Agreement. Neither the Fiscal Agent nor the Dissemination Agent shall have any responsibility to determine the materiality of any of the Listed Events. ( c) Whenever the CFD obtains knowledge of the occurrence of a Listed Event, whether because of a notice from the Dissemination Agent pursuant to subsection (b) or otherwise, the CFD shall as soon as possible determine if such event would be material under applicable federal securities laws. (d) If the CFD has determined that knowledge of the occurrence of a Listed Event would be material under applicable federal securities laws, the CFD shall promptly notify the Dissemination Agent in writing. Such notice shall instruct the Dissemination Agent to report the occurrence pursuant to subsection (f). ( e) If in response to a request under subsection (b), the CFD determines that the Listed Event would not be material under applicable federal securities laws, the CFD shall so notify the Dissemination Agent in writing and instruct the Dissemination Agent not to report the occurrence pursuant to subsection (f). ...., (f) If the Dissemination Agent has been instructed by the CFD to report the occurrence of a Listed Event, the Dissemination Agent shall file a notice of such occurrence with the Municipal Securities Rulemaking Board and the State Repository or the Repositories. Notwithstanding the foregoing, notice of Listed Events described in subsections (a){4) and (5) need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to Holders of affected Bonds pursuant to the Fiscal Agent Agreement. SECTION 6. Termination of Reporting Obligation. The CFD's obligations under this Disclosure Agreement 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 CFD shall give notice of such termination in the same manner as for a Listed Event under Section 5{f). SECTION 7. Dissemination Agent. The CFD may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Agreement, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report prepared by the CFD pursuant to this Disclosure Agreement. The initial Dissemination Agent shall be Union Bank of California, N.A. The Dissemination Agent may resign by providing thirty days written notice to the CFD and the .~ 45484659.1 5 AGENDA ITEM NO. :3 :;. PAGE~OF33fz.- /"""' Fiscal Agent. The Dissemination Agent shall have no duty to prepare any information report nor shall the Dissemination Agent be responsible for filing any report not provided to it by the CFD in a timely manner and in a form suitable for filing. SECTION 8. Amendment; Waiver. Notwithstanding any other provIsIon of this Disclosure Agreement, the CFD, Dissemination Agent and the Fiscal Agent may amend this Disclosure Agreement (and the Fiscal Agent and Dissemination Agent shall agree to any amendment so requested by the CFD) provided, neither the Fiscal Agent nor the Dissemination Agent shall be obligated to enter into any such amendment that modifies or increases its duties or obligations hereunder, and any provision of this Disclosure Agreement may be waived, provided that the following conditions are satisfied: (a) If the amendment or waiver relates to the provisions of Sections 3(a), 4, or 5(a), it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature or status of an obligated person with respect to the Bonds, or the type of business conducted; (b) The undertaking, as amended or taking into account such waiver, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the original issuance of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and ,,-, ( c) Th~ amendment or waiver either (i) is approved by the Holders of the Bonds in the same manner as provided in the Fiscal Agent Agreement for amendments to the Fiscal Agent Agreement with the consent of Holders, or (ii) does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the Holders or Beneficial Owners of the Bonds. In the event of any amendment or waiver of a provision of this Disclosure Agreement, the CFD shall describe such amendment in the next Annual Report, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or, in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the CFD. SECTION 9. Additional Information. Nothing in this Disclosure Agreement shall be deemed to prevent the CFD from disseminating any other information, using the means of dissemination set forth in this Disclosure Agreement 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 Agreement. If the CFD 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 Agreement, the CFD 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 CFD or the Dissemination Agent to comply with any provision of this Disclosure Agreement, the Fiscal Agent (at the written /"'" request of any Participating Underwriter or the Holders of at least 25% aggregate principal 45484659.1 6 ACENDA rtEM NO. Q do PAGE to 5 OF~ amount of Outstanding Bonds, shall but only to the extent funds in an amount satisfactory to the Fiscal Agent have been provided to it or it has been otherwise indemnified to its satisfaction from any cost, liability, expense or additional charges and fees of the Fiscal Agent whatsoever, including, without limitation, fees and expenses of its attorneys), or any Holder 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 CFD or Fiscal Agent, as the case may be, to comply with its obligations under this Disclosure Agreement. A default under this Disclosure Agreement shall not be deemed an Event of Default under the Fiscal Agent Agreement, and the sole remedy under this Disclosure Agreement in the event of any failure of the CFD or the Fiscal Agent to comply with this Disclosure Agreement shall be an action to compel performance. SECTION 11. Duties. Immunities and Liabilities of Fiscal Agent and Dissemination Agent. Article VII of the Fiscal Agent Agreement pertaining to the Fiscal Agent is hereby made applicable to this Disclosure Agreement as if this Disclosure Agreement were (solely for this purpose) contained in the Fiscal Agent Agreement and the Fiscal Agent and Dissemination Agent shall be entitled to the protections, limitations from liability and indemnities afforded the Fiscal Agent thereunder. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Agreement, and the CFD agrees to indemnify and save the Dissemination Agent, 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 its powers and duties hereunder, including the costs and expenses (including attorneys fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent's negligence or willful misconduct. The Dissemination Agent shall be paid compensation by the CFD for its services provided hereunder in accordance with its schedule of fees as amended from time to time and 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 them hereunder and shall not be deemed to be acting in any fiduciary capacity for the CFD, the Bondholders, or any other party. The Dissemination Agent shall have no liability to the Bondholders or any other party for any monetary damages or financial liability of any kind whatsoever related to or arising from this Agreement. The obligations of the CFD under this Section shall survive resignation or removal of the Dissemination Agent and payment ofthe Bonds. SECTION 12. Notices. Any notices or communications to or among any of the parties to this Disclosure Agreement may be given as follows: To the City: City of Lake Elsinore 130 South Main Street Lake Elsinore, California 92530 Attn: City Manager Fax: (909) 674-3124 ....., ....., ....., AGENDA ITEM NO. 0 ~ PACE (o~ OF~ 45484659.1 7 ,.-... To the Fiscal Agent: Union Bank of California, N.A. 120 South San Pedro Street, Suite 400 Los Angeles, California 90012 Attn: Corporate Trust Department Fax: (213) 972-5676 Fax: (213) 972-5694 Any person may, by written notice to the other persons listed above, designate a different address or telephone number( s) to which subsequent notices or communications should be sent. SECTION 13. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit of the CFD, the Fiscal Agent, the Dissemination Agent, the Participating Underwriter and Holders and Beneficial Owners from time to time of the Bonds, and shall create no rights in any other person or entity. SECTION 14. Counterparts. This Disclosure Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. ,.-... CITY OF LAKE ELSINORE COMMUNITY F ACnJTIES DISTRICT NO. 2005-6 (CITY CENTER TOWNHOMES) By Mayor of the City of Lake Elsinore UNION BANK OF CALIFORNIA, N.A., as Dissemination Agent and Fiscal Agent By Authorized Officer ,.-... 45484659.1 8 AGENDA ITEM NO. & PAGE to 7 OF EXHffiIT A NOTICE TO REPOSITORIES OF FAILURE TO FILE ANNUAL REPORT ..-.; Name of Obligated Party: City of Lake Elsinore Community Facilities District No. 2005-6 (City Center Townhomes) Name of Bond Issue: City of Lake Elsinore Community Facilities District No. 2005-6 (City Center Townhomes) Special Tax Bonds, 2006 Series A Date oflssuance: , 2006 NOTICE IS HEREBY GIVEN that the CFD has not provided an Annual Report with respect to the above-named Bonds as required by the Continuing Disclosure Agreement, dated as of 1, 2006, with respect to the Bonds. The CFD anticipates that the Annual Report will be filed by Dated: .uNION BANK OF CALIFORNIA, N.A., on behalf of CFD ....., cc: Issuer .'wIJI 45484659.1 A-I ACENDA ITEM NO. 3d-~ .. PAGE {Org OF 33b /"" $ City of Lake Elsinore Community Facilities District No. 2005-6 (City Center Townhomes) Special Tax Bonds, 2006 Series A Purchase Contract , 2006 City of Lake Elsinore Community Facilities District No. 2005-6 (City Center Townhomes) 130 South Main Street Lake Elsinore, California 92530 Ladies and Gentlemen: Southwest Securities, Inc. (the "Underwriter") hereby offers to enter into the following agreement with the City of Lake Elsinore Community Facilities District No. 2005-6 (City Center Townhomes) (the "District"). Upon the acceptance hereof by you, this offer will be binding upon the District and the Underwriter. This offer is made subject to (i) the written acceptance hereof by you and (ii) withdrawal by the Underwriter upon written notice (by facsimile or /"" otherwise) delivered to you at any time prior to the acceptance hereof by you. 1. Purchase and Sale. Upon the terms and conditions and upon the basis of the representations, warranties and agreements set forth herein, the Underwriter hereby agrees to purchase from the District, at the Closing Time on the Closing Date (both as defined herein), and the District hereby agrees to sell and deliver to the Underwriter, $ aggregate principal amount of its Special Tax Bonds, 2006 Series A (the "Bonds"). The Bonds shall be dated the date of their initial delivery, and shall mature on September 1 in the years shown on Exhibit A hereto, shall bear interest at the rates shown on Exhibit A hereto and shall be subject to mandatory redemption from sinking fund payments, in the amounts and on the dates shown in the Fiscal Agent Agreement. Interest on the Bonds shall be payable each March 1 and September 1 to maturity or earlier redemption of the Bonds, beginning 1, 2006. The purchase price for the Bonds shall be an amount equal to $ (being the aggregate principal amount thereof ($ ), less an underwriter's discount of $ and less a net original issue discount of $ ). (The date of such payment and delivery is referred to herein as the "Closing Date," the hour and date of such delivery and payment is referred to herein as the "Closing Time," and the other actions contemplated hereby to take place at the time of such payment and delivery being herein sometimes called the "Closing"). 2. The Bonds. The Bonds shall be described in, and shall be issued and secured pursuant to, the provisions of the Constitution and the laws of the State of California including the provisions of the Mello-Roos Community Facilities Act of 1982, as amended, constituting Chapter 2.5, Part 1, Division 2, Title 5 of the Government Code of the State of California (the ,--. 45722683.1 1 M NO :3:>;). - AGENDA llE '- PNiEJd-Of .$Je.- "Bond Law") and a Fiscal Agent Agreement, dated as of 1, 2006 (the "Fiscal Agent Agreement"), by and between the District and Union Bank of California, N.A., as fiscal agent (the "Fiscal Agent"), authorizing the issuance ofthe Bonds. ....., The Bonds are being issued for the purpose of financing the acquisition of certain public facilities and capital fees to meet the needs of new development within the District, funding a reserve account for the Bonds, funding the cost of capitalized interest through 1, 2006, and paying the costs of incidental expenses incurred in connection with financing such public facilities and forming and administering the District (collectively, the "Project"). The Bonds are secured by Special Taxes (as defined in the Fiscal Agent Agreement). The Bonds shall be payable and shall be subject to redemption as provided in the Fiscal Agent Agreement and shall be as described in the Preliminary Official Statement of the District dated ,2006 (the "Preliminary Official Statement") and the Official Statement of the District dated of even date herewith. Such Official Statement, including the cover page and the appendices thereto, relating to the Bonds, as amended to conform to the terms of this Purchase Contract and with such changes and amendments thereto as have been mutually agreed to by the District and the Underwriter, are hereinafter referred to as the "Official Statement." This Purchase Contract, the Fiscal Agent Agreement and the Continuing Disclosure Agreement, dated as of 1, 2006 (the "District Continuing Disclosure Agreement"), by and between the District and Union Bank of California, N.A., as dissemination agent, are referred to herein as the "Basic Documents." 3. Offering by the Underwriter. It shall be a condition to the District's obligations to sell and to deliver the Bonds to the Underwriter and to the Underwriter's obligation to purchase, to accept delivery of and to pay for the Bonds that the entire principal amount of the Bonds shall be issued, sold and delivered by the District and purchased, accepted and paid for by the Underwriter at the Closing. It is understood that the Underwriter proposes to offer the Bonds for sale to the public (which may include selected dealers) at prices or yields as set forth on the cover page of the Official Statement. Concessions from the public offering price may be allowed to selected dealers. It is understood that the initial public offering price and concessions set forth in the Official Statement may vary after the initial public offering. It is further understood that the Bonds may be offered to the public at prices other than the par value thereof. The net premium on the sale of the Bonds to the public, if any, shall accrue to the benefit of the Underwriter. ......, 4. Official Statement, Delivery of Other Documents, Use of Documents. (a) The District hereby authorizes the use by the Underwriter of the Preliminary Official Statement and the Official Statement (including any supplements or amendments thereto) and the Fiscal Agent Agreement and the information therein contained, in connection with the public offering and sale of the Bonds. (b) The District shall deliver to the Underwriter, within seven business days from the date hereof, such number of copies of the final Official Statement executed on behalf of and approved for distribution by the District as the Underwriter may reasonably request in order ....., 45722683.1 2 .AGENDA ITEM NO. Pia 1 b 3;;- Of 3'3t-, ",-- for the Underwriter to comply with the rules of the Municipal Securities Ru1emaking Board and Rule 15c2-12(b)( 4) under the Securities Exchange Act of 1934. (c) As soon as practicable following receipt thereof, the Underwriter shall deliver the Official Statement, and any supplements or amendments thereto, to a nationally recognized municipal securities information repository. 5. Representations, Warranties and Agreements of the District. The District represents, warrants and agrees as follows: (a) The District is a community facilities district duly organized and validly existing under the laws of the State of California. (b) The District has full legal right, power and authority (i) to enter into the Basic Documents, (ii) to sell, issue and deliver the Bonds to the Underwriter as provided herein, and (iii) to carry out and consummate the transactions on its part contemplated by the Basic Documents and the Official Statement. ( c) By all necessary official action, the City of Lake Elsinore (the "City"), as the legislative body of the District, has duly authorized and approved the Basic Documents, has duly authorized and approved the Preliminary Official Statement and the Official Statement, has duly authorized and approved the execution and delivery of, and the performance by the District of the obligations in connection with the issuance of the Bonds on its part contained in the Bonds and the Basic Documents, and the consummation by it of all other transactions contemplated by the Basic Documents in connection with the issuance of the Bonds. ~ (d) To the best of its knowledge, the District is not in any material respect in breach of or default under any applicable constitutional provision, law or administrative regulation of any state or of the United States, or any agency or instrumentality of either, or any applicable judgment or decree, or any loan agreement, indenture, bond, note, resolution, agreement (including, without limitation, the Fiscal Agent Agreement) or other instrument to which the District is a party which breach or default has or may have an adverse effect on the ability of the District to perform its obligations under the Fiscal Agent Agreement, and no event has occurred and is continuing which with the passage of time or the giving of notice, or both, would constitute such a default or event of default under any such instrument; and the execution and delivery of the Bonds and the Basic Documents, and compliance with the provisions on the District's part contained therein, will not conflict in any material way with or constitute a material breach of or a material default under any constitutional provision, law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the District is a party 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 property or assets of the District or under the terms of any such law, regulation or instrument, except as provided by the Bonds and the Fiscal Agent Agreement. ,,-.. (e) To the best of its knowledge, all authorizations, approvals, licenses, permits, consents and orders of any governmental authority, legislative body, board, agency or 45722683.1 3 AGENDA ITEM NO. 3 ;). PACE '1/ OF~ - commission having jurisdiction of the matter which are required for the due authorization by, or which would constitute a condition precedent to or the absence of which would materially adversely affect the due performance by, the District of its obligations in connection with the issuance of the Bonds under the Basic Documents have been duly obtained, except for such approvals, consents and orders as may be required under the Blue Sky or securities laws of any state in connection with the offering and sale of the Bonds; except as described in or contemplated by the Official Statement, all authorizations, approvals, licenses, permits, consents and orders of any governmental authority, board, agency or commission having jurisdiction of the matters which are required for the due authorization by, or which would constitute a condition precedent to or the absence of which would materially adversely affect the due performance by, the District of its obligations under the Fiscal Agent Agreement have been duly obtained. '-' (f) The Bonds when issued will conform to the descriptions thereof contained in the Official Statement under the captions "INTRODUCTORY STATEMENT" and "THE BONDS"; and the Basic Documents when executed and delivered will conform to the descriptions thereof contained in the Official Statement under the captions "INTRODUCTORY STATEMENT," "THE BONDS," "SOURCES OF PAYMENT FOR THE BONDS," "SUMMARY OF THE FISCAL AGENT AGREEMENT" and "APPENDIX A - DEFINITIONS OF CERTAIN TERMS USED IN THE FISCAL AGENT AGREEMENT." (g) The Bonds, when issued, authenticated and delivered in accordance with the Fiscal Agent Agreement, and sold to the Underwriter as provided herein, will be validly issued and outstanding obligations of the District, entitled to the benefits of the Fiscal Agent Agreement, and upon such issuance and delivery, the Fiscal Agent Agreement will provide, for '-' the benefit of the owners from time to time of the Bonds, the legally valid and binding pledge of and lien and security interest it purports to create. (h) As of the date hereof, there is no action, suit, proceeding, inquiry or investigation, notice of which has been served on the District, at law or in equity before or by any court, government agency, public board or body, pending or to the best knowledge of the officer of the City executing this Purchase Contract on behalf of the District, threatened against the District, affecting the existence of the District, or affecting or seeking to prohibit, restrain or enjoin the sale, issuance or delivery of the Bonds or the pledge and lien on the Special Taxes pursuant to the Fiscal Agent Agreement, or contesting or affecting as to the District the validity or enforceability of the Bond Law, the Bonds or the Basic Documents, or contesting the tax- exempt status of interest on the Bonds, or contesting the completeness or accuracy of the Preliminary Official Statement or the Official Statement, or contesting the powers of the District for the issuance of the Bonds, or the execution and delivery or adoption by the District of the Basic Documents, or in any way contesting or challenging the consummation of the transactions contemplated hereby or thereby; nor, to the best knowledge of the District, is there any basis for any such action, suit, proceeding, inquiry or investigation, wherein an unfavorable decision, ruling or finding would materially adversely affect the validity of the Bond Law, as to the District, or the authorization, execution, delivery or performance by the District of the Bonds or the Basic Documents. '-' 45722683.1 4 AGENDA ITEM NO. 3?- PAGE))- OF~ ,,- (i) The District will furnish such information, execute such instruments and take such other action in cooperation with the Underwriter as the Underwriter may reasonably request in order (x) 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, (y) to determine the eligibility of the Bonds for investment under the laws of such states and other jurisdictions, and will use its best efforts to continue such qualifications in effect so long as required for the distribution of the Bonds; provided, however, that the District shall not be required to execute a general or special consent to service of process or qualify to do business in connection with any such qualification or determination in any jurisdiction, provided, that the Underwriter shall bear all costs in connection with the District's action under (x) and (y) herein, and (z) assure or maintain the tax-exempt status ofthe interest on the Bonds. 0) As of the date thereof, the Preliminary Official Statement does not, except for the omission of certain information permitted to be omitted in accordance with Rule 15c2-12 of the Securities and Exchange Commission promulgated under the Securities Exchange Act of 1934 (the "Rule"), contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein with respect to the District, in light of the circumstances under which they were made, not misleading. ~ (k) At the time ofthe District's acceptance hereof, and (unless an event occurs of the nature described in paragraph (m) of this Section 5) at all times subsequent thereto up to and including the date of the Closing, the Official Statement does not and will 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; provided, however, that these representations and warranties of the District shall apply only to the information contained in the Official Statement relating to the District. (1) If the Official Statement is supplemented or amended pursuant to paragraph (m) of this Section 5, at the time of each supplement or amendment thereto and (unless subsequently again supplemented or amended pursuant to such paragraph) at all times subsequent thereto up to and including the date of the Closing, the Official Statement as so supplemented or amended will 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; provided, however, that these representations and warranties of the District shall apply only to the information contained in the Official Statement relating to the District. (m) If between the date of this Purchase Contract and that date which is 25 days after the end of the underwriting period (as determined in accordance with Section 13 hereof) any event known to the District shall occur affecting the District which might adversely affect the marketability of the Bonds or the market prices thereof, or which might cause the Official Statement, as then supplemented or amended, to contain any untrue statement of a material fact or to omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, the District shall notify the Underwriter thereof, and if in the opinion of the Underwriter such event requires the preparation ,-.. and publication of a supplement or amendment to the Official Statement, the District will at its expense prepare and furnish to the Underwriter a reasonable number of copies of such 45722683.\ 5 ACENDA ntM NO. 3~ - rp~E~13 , OF 3'2J.p = supplement to, or amendment of, the Official Statement in a form and in a manner approved by the Underwriter. """"" (n) The District will refrain from taking any action, or permitting any action to be taken, with regard to which the District may exercise control, that results in the loss of the tax-exempt status of the interest on the Bonds. (0) Any certificate signed by any officer of the City on behalf of the District and delivered to the Underwriter pursuant to the Fiscal Agent Agreement, this Purchase Contract or any document contemplated thereby shall be deemed a representation and warranty by the District to the Underwriter as to the statements made therein. (P) The District will cause the proceeds from the sale of the Bonds to be paid to the Fiscal Agent for the purposes specified in the Fiscal Agent Agreement and the Official Statement. So long as any of the Bonds are outstanding and except as may be authorized by the Fiscal Agent Agreement, the District will not issue or sell any bonds or other obligations, other than the Bonds sold thereby, the interest on and premium, if any, or principal of which will be payable from the payments to be made under the Fiscal Agent Agreement. (q) The District shall honor all other covenants on its part contained in the Fiscal Agent Agreement which are incorporated herein and made a part of this Purchase Contract. (r) At or prior to the Closing, the City, acting as the legislative body of the District, shall have duly authorized, and the District shall have duly executed and delivered, the District Continuing Disclosure Agreement which shall comply with the provisions of the Rule and shall be substantially in the form appended to the Official Statement in Appendix E thereto. """"" 6. Closing. At 8:00 a.m., Los Angeles time, on , 2006, or on such earlier date or as soon thereafter as practicable, as may be mutually agreed upon by the District and the Underwriter, the District will, subject to the terms and conditions hereof, cause the Fiscal Agent to deliver to the Underwriter, the Bonds, in definitive form duly authenticated by the Fiscal Agent, together with the other documents hereinafter mentioned; and the Underwriter will accept such delivery and will pay the purchase price of the Bonds as set forth in Section 1 hereof by delivering federal or other immediately available funds in the amount of such purchase price to the Fiscal Agent. The Bonds shall be prepared in fully registered form without coupons in authorized denominations. 7. Closing Conditions. The Underwriter has entered into this Purchase Contract in reliance upon the representations and warranties of the District contained herein, and in reliance upon the representations and warranties to be contained in the documents and instruments to be delivered at the Closing and upon the performance by the District of its obligations hereunder, both as of the date hereof and as of the date of the Closing. Accordingly, the Underwriter's obligations under this Purchase Contract to purchase, to accept delivery of and to pay for the Bonds shall be conditioned upon the performance by the District of its obligations to be performed hereunder and under such documents and instruments at or prior to the Closing, and shall also be subject to the following additional conditions: """"" 45722683.1 6 AGENDA ITEM NO. 3 ~ PNiE.:l!L-OF 33lr /"'"' (a) The representations and warranties of the District contained herein shall be true, complete and correct on the date hereof and on and as of the date of the Closing, as if made on the date of the Closing; (b) At the time of the Closing, the Fiscal Agent Agreement shall be in full force and effect in accordance with its terms and shall not have been amended, modified or supplemented and the Official Statement shall not have been supplemented or amended, except in any such case as may have been agreed to by the Underwriter; ( c) At the time of the Closing, all necessary official action of the City on behalf of the District and of the other parties thereto relating to the Basic Documents shall have been taken and shall be in full force and effect and shall not have been amended, modified or supplemented in any material respect; (d) Subsequent to the date hereof, there shall not have occurred any change in or affecting particularly the District or the Bonds, as the foregoing matters are described in the Official Statement, which in the reasonable opinion of the Underwriter materially impairs the investment quality of the Bonds; (e) At or prior to the Closing, the Underwriter shall have received copies of each of the following documents: (1) The Official Statement and each supplement or amendment, if any, /"'"' thereto, executed by the District; (2) A copy of the Fiscal Agent Agreement, executed by the District and the Fiscal Agent; (3) A copy of this Purchase Contract, executed by the District and the Underwriter; (4) Certificates of the District with respect to the matters described in Section 5 and in paragraphs (a), (b), (c) and (d) ofthis Section 7; (5) An opinion (the "Final Approving Legal Opinion"), dated the date of the Closing and addressed to the District, of Fulbright & Jaworski L.L.P., Bond Counsel for the District, substantially in the form set forth in Appendix F to the Official Statement; . (6) A supplemental opinion, dated the date of the Closing and addressed to the Underwriter, of Fulbright & Jaworski L.L.P., Bond Counsel for the District, in substantially the form attached hereto as Exhibit B; (7) An opinion, dated the date of the Closing and addressed to the Underwriter, of the City Attorney of the City, as Special Counsel for the District in substantially the form attached hereto as Exhibit C; ,"'--' 45722683.1 7 ........ NO 3 Ol _ AGENDA II E;IV' '- 3~ P~E:J5 OF - (8) A reliance letter, dated the date of the Closing and addressed to the Underwriter and the Fiscal Agent, respectively, of Fulbright & Jaworski L.L.P., Bond Counsel for the District, regarding the final approving opinion; "'-' (9) An opinion, dated the date of the Closing and addressed to the Underwriter, of Fulbright & Jaworski, L.L.P., Disclosure Counsel, in substantially the form attached hereto as Exhibit D; (10) Transcripts of all proceedings relating to the authorization and issuance of the Bonds certified by the City Clerk or a Deputy City Clerk of the City on behalf of the District; (11) An opinion of counsel to the Fiscal Agent, to the effect that: (i) Due Organization and Existence - the Fiscal Agent has been duly organized and is validly existing and in good standing under the laws of the United States of America, with full corporate power to undertake the trust duties and obligations under the Fiscal Agent Agreement; (ii) Corporate Action - the Fiscal Agent has duly authorized, executed and delivered the Fiscal Agent Agreement, and by all proper corporate action has authorized the acceptance of the duties and obligations of the Fiscal Agent under the Fiscal Agent Agreement and to authorize in such capacity the authentication and delivery of the Bonds; (iii) Due Authorization. Execution and Delivery - assuming due authorization, execution and delivery by the District, the Fiscal Agent Agreement is the valid, legal and binding agreement ofthe Fiscal Agent, enforceable in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors' rights in general and by general equity principles (regardless of whether such enforcement is considered in a proceeding in equity or at law); and "'-' (iv) Consents - exclusive of federal or state securities laws and regulations, to the best of such counsel's knowledge after reasonable inquiry and investigation, other than routine filings required to be made with governmental agencies in order to preserve the Fiscal Agent's authority to perform a trust business (all of which routine filings such counsel believes, after reasonable inquiry and investigation, to have been made), no consent, approval, authorization or other action by any governmental or regulatory authority having jurisdiction over the Fiscal Agent is or will be required for the execution by the Fiscal Agent of the Fiscal Agent Agreement or the authentication and delivery ofthe Bonds; (12) A certified copy of the general resolution of the Fiscal Agent authorizing the execution and delivery of certain documents by certain officers of the Fiscal Agent, which resolution authorizes the execution and delivery of the Fiscal Agent Agreement; "'-' 45722683.1 8 3Q. AGENDA'TEM NO. p~ ]fo OF~ - ",...... (13) A certificate of the Fiscal Agent, dated the date of Closing, certifying that, subject to the limitations provided herein, the Fiscal Agent represents and warrants and agrees with the Underwriter that as of the date of Closing: (i) Due Organization and Existence - the Fiscal Agent is duly organized and existing as a national banking association in good standing under the laws of the United States of America having the full power and authority to enter into and perform its duties under the Fiscal Agent Agreement and to authenticate and deliver the Bonds to the Underwriter pursuant to the terms of the Fiscal Agent Agreement; (ii) No Conflict - to the best of the knowledge of the Fiscal Agent, after due investigation, the execution and delivery by the Fiscal Agent of the Fiscal Agent Agreement and the authentication and delivery by the Fiscal Agent of the Bonds, and compliance with the terms thereof will not, in any material respect, conflict with, or result in a violation or breach of, or constitute a default under, any loan agreement, indenture, bond, note, resolution or any other agreement or instrument to which the Fiscal Agent is a party or by which it is bound, or any law or any rule, regulation, order or decree of any court or governmental agency or body having jurisdiction over the Fiscal Agent or any of its activities or properties, or result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the property or assets ofthe Fiscal Agent; and ~ (iii) No Litigation - to the best of the knowledge of the Fiscal Agent, no litigation has been served upon the Fiscal Agent to restrain or enjoin the Fiscal Agent's participation in, or in any way contesting the powers of the Fiscal Agent with respect to, the transactions contemplated by the Fiscal Agent Agreement; (14) Executed copies of the District Continuing Disclosure Agreement substantially in the form presented in Appendix E to the Official Statement; (15) Executed copies of the Developer Continuing Disclosure Agreement, dated as of 1, 2006, by and between Western Pacific Housing, Inc., a California corporation (the "Developer"), and Union Bank of California, N.A., as dissemination agent, substantially in the form presented in Appendix E to the Official Statement; (16) A certificate or certificates dated the date hereof from the Developer, together with a bring-down certificate dated the Closing Date in substantially the forms attached hereto as Exhibit E and Exhibit F, respectively; (17) Certificate of good standing of the Developer from the Secretary of State's office; (18) An opinion of counsel to the Developer in the form acceptable to the Underwriter; - (19) A certificate dated the Closing Date, signed by an authorized principal of Harris Realty Appraisal (the "Appraiser"), in a form satisfactory to the Underwriter and its counsel to the effect that (i) the individual signing the certificate is an authorized representative of the Appraiser, and as such, is familiar with the facts certified and is authorized 45722683.1 9 3~ AGENDA lTEM NO._ ~ PACE 17 OF - and qualified to certify the same; (ii) in the opinion of the Appraiser the assumptions made in the appraisal report with respect to the City of Lake Elsinore Community Facilities District No 2005- 6 (City Center Townhomes), dated ,2006 (the "Appraisal"), are reasonable; (iii) that the Appraiser is not aware of any event or act which has occurred since the date of the Appraisal which, in its opinion, would materially and adversely affect the conclusion as to the appraised value reached in the Appraisal; (iv) the Appraiser consents to the reproduction of the Appraisal as Appendix C to the Official Statement and to the references to the Appraiser and the Appraisal made in the Official Statement; (v) that the Official Statement has been reviewed on behalf of the Appraiser and to the best knowledge of the Appraiser the statements concerning the Appraisal and the value of the property contained under the captions "THE DISTRICT - Description of Development" are true, correct and complete in all material respects and do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; and (vi) the District and the Underwriter are entitled to rely on the Certificate; (20) A copy of the Appraisal; (21) A certificate from Harris & Associates ("Special Tax Consultant") to the effect that (i) the Special Tax if applied in accordance with the terms as set forth in the Rate and Method of Apportionment for Community Facilities District No. 2005-6 of the City of Lake Elsinore (City Center Townhomes) (the "Special Tax Formula"), after deducting Administrative Expenses, will annually yield sufficient revenue to make timely payments of debt service on the Bonds, provided that information and other data supplied by the District, by the Developer, by the Appraiser, by the Underwriter or by any of their agents, which has been relied upon by the Special Tax Consultant is true and correct, (ii) the Special Tax, if collected in the maximum amounts permitted pursuant to the Special Tax Formula on the Closing Date, would generate at least 110% of the maximum debt service payable with respect to the Bonds payable from such Special Tax during each fiscal year, based on a debt service schedule supplied by Southwest Securities, Inc. and the net taxable footage or acreage projection and other data provided by the Developer to the Special Tax Consultant and confirmed in the certificates of the Developer previously delivered to the Special Tax Consultant and relied upon by the Special Tax Consultant, (iii) the information supplied by such firm for use in the sections of the Official Statement captioned "APPENDIX D - RATE AND METHOD OF APPORTIONMENT" is true and correct as of the date of the Official Statement and as of the Closing Date, and (iv) the description of the Special Tax Formula contained in the section of the Official Statement captioned "FINANCIAL INFORMATION - Rate and Method of Apportionment" is correctly presented in all material respects; (22) A certificate from Empire Economics, Inc. (the "Market Consultant") to the following effect (i) the individual signing the certificate is an authorized representative of the Market Consultant, and as such, is familiar with the facts certified and is authorized and qualified to certify the same; (ii) in the opinion of the Market Consultant the assumptions made in the Market Absorption Study Summary and Conclusion with respect to the City of Lake Elsinore Community Facilities District No 2005-6 (City Center Townhomes), dated , 2006 (the "Market Absorption Study") are reasonable; (iii) that the Market Consultant is not aware of any event or act which has occurred since the date of the Market ......" ......" ......" 45722683.1 10 ACENDA rreM NO. 3;2 ppa__7~ .~OF 33~...." .... "..-. Absorption Study, which, in its opinion, would materially and adversely affect the conclusions of the Market Absorption Study; (iv) the Market Consultant consents to the reproduction of the Market Absorption Study as Appendix B to the Official Statement and to the references to the Market Consultant and the Market Absorption Study made in the Official Statement; and (v) the Market Consultant certifies that as of the date of the certificate the Market Absorption Study contained in the Official Statement and the statements concerning the Market Absorption Study contained in the Official Statement are accurate in all material respects and do not omit to state a material fact necessary in order to make the statement contained therein, in the light of the circumstances under which they are made, not misleading and no events or occurrences have been ascertained by the Market Consultant as have come to its attention that would substantially adversely change the opinions set forth in the Market Absorption Study; and (vi) the District and the Underwriter are entitled to rely on the Certificate; (23) A copy of the Market Absorption Study; (24) 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 date of the Closing, of the District's representations and warranties contained herein and of the statements and information contained in the Official Statement and the due performance or satisfaction by the District on or prior to the date of the Closing of all the agreements then to be performed and conditions then to be satisfied by it. "..-. All the opinions, letters, certificates, instruments and other documents mentioned above or elsewhere in this Purchase Contract shall be deemed to be in compliance with the provisions hereof if, but only if, they are in form and substance satisfactory to Bond Counsel and the Underwriter. The opinions and other documents presented as exhibits to this Purchase Contract or as Appendices to the Official Statement shall be deemed satisfactory provided they are substantially in the forms attached as exhibits to this Purchase Contract or as Appendices to the Official Statement. If the District shall be unable to satisfy the conditions to the obligations of the Underwriter to purchase, to accept delivery of and to pay for the Bonds contained in this Purchase Contract, or if the obligations of the Underwriter to purchase, to accept delivery of and to pay for the Bonds shall be terminated for any reason permitted by this Purchase Contract, this Purchase Contract shall terminate and neither the Underwriter nor the District shall be under any further obligation hereunder. 8. Termination. The Underwriter shall have the right to terminate the Underwriter's obligations under this Purchase Contract to purchase, to accept delivery of and to pay for the Bonds by notifying the District in writing or by telegram, of their election to do so, if, after the execution hereof and prior to the Closing: (a) the United States has become engaged in hostilities which have resulted in a declaration of war or a national emergency; (b) there shall have occurred the declaration of a general banking moratorium by any authority of the United States or the States of New York or California; (c) an event shall have occurred or been discovered as described in paragraph (m) of Section 5 hereof which in the opinion of the "..-. Underwriter requires the preparation and publication of disclosure material or a supplement or amendment to the Official Statement; (d) any legislation, ordinance, rule or regulation shall be 45722683.1 11 AGENDA ITEM NO. 3J.- PACE 11 OF '3~- - introduced in, or be enacted by any governmental body, department or agency in the State of California, or a decision by any court of competent jurisdiction within the State of California shall be rendered which, in the Underwriter's reasonable opinion, materially adversely affects the market price of the Bonds; (e) legislation shall be introduced, by amendment or otherwise, or be enacted by the House of Representatives or the Senate of the Congress of the United States, or a decision by a court of the United States shall be rendered, or a stop order, ruling, regulation or official statement by or on behalf of the Securities and Exchange Commission or other governmental agency having jurisdiction of the subject matter shall be made or proposed, to the effect that the issuance, offering or sale of obligations of the general character of the Bonds, or the Bonds, as contemplated hereby or by the Official Statement, is or would be in violation of any provision 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 the Trust Fiscal Agent Agreement Act of 1939, as amended and as then in effect, or with the purpose or effect of otherwise prohibiting the issuance, offering or sale of obligations of the general character of the Bonds or the Bonds, as contemplated hereby or by the Official Statement; (f) additional material restrictions not in force as of the date hereof shall have been imposed upon trading in securities generally by any governmental authority or by any national securities exchange; (g) the New York Stock Exchange, or other national securities exchange or association or any governmental authority, shall impose as to the Bonds, or obligations of the general character of the Bonds, any material restrictions not now in force, or increase materially those now in force, with respect to the extension of credit by or the charge to the net capital requirements of broker-dealers; (h) trading in securities on the New York Stock Exchange or the American Stock Exchange shall have been suspended or limited or minimum prices have been established on either such exchange; or (i) any action shall have been taken by any government in respect of its monetary affairs which, in the reasonable opinion of the Underwriter, has a material adverse effect on the United States securities market. If this Purchase Contract shall be terminated pursuant to Section 7 or this Section 8, or if the purchase provided for herein is not consummated because any condition to the Underwriter's obligation hereunder is not satisfied or because of any refusal, inability or failure on the part of the District to comply with any of the terms or to fulfill any of the conditions of this Purchase Contract, or if for any reason the District shall be unable to perform all of its obligations under this Purchase Contract, the District shall not be liable to the Underwriter for damages on account of loss of anticipated profits arising out of the transactions covered by this Purchase Contract. 9. Payment of Costs and Expenses. The District shall pay (a) all costs and expenses incident to the sale and delivery of the Bonds to the Underwriter, including, but not limited to: (i) the fees and expenses of the District and its Counsel, Disclosure Counsel, Financing Consultant and other consultants; (ii) the fees and expenses of Bond Counsel; (iii) all costs and expenses incurred in connection with the preparation and printing ofthe Bonds; (iv) all expenses in connection with the preparation, printing, distribution and delivery of the Preliminary Official Statement, the Official Statement and any amendment or supplement thereto; (v) California Municipal Statistics fees, CUSIP Bureau charges, fees of Public Securities Association and California Public Securities Association, MSRB fees, California Debt and Investment Advisory Commission fees and (vi) the fees and expenses of the Fiscal Agent and its counsel shall be payable by the District from the proceeds ofthe Bonds. 45722683.\ 12 AGENDA rrEM NO. 3}. PPlJE~ OF33"- ~ 'wtf/II ~ ,r""'- (b) The Underwriter shall pay 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. 10. Representations, Warranties and Agreements to Survive Delivery. The representations, warranties, indemnities, agreements and other statements of the District and the Underwriter or their officers or partners set forth in, or made pursuant to, this Purchase Contract will remain operative and in full force and effect regardless of any investigation made by or on behalf of the District or the Underwriter or any controlling person and will survive delivery of and payment for the Bonds. 11. Notices. Any notice or other communication to be given under this Purchase Contract may be given by delivering the same in writing: To the District: City of Lake Elsinore Community Facilities District No. 2005-6 (City Center Townhomes) 130 South Main Street Lake Elsinore, California 92530 Attention: City Manager To the Underwriter: Southwest Securities, Inc. 620 Newport Center Drive, Suite 300 Newport Beach, California 92660 Attention: Tony Wetherbee ,r""'-. 12. Parties in Interest. This Purchase Contract is made solely for the benefit of the District and the Underwriter (including the successors or assigns of the Underwriter) and no other person shall acquire or have any right hereunder or by virtue hereof All of the District's representations, warranties and agreements contained in this Purchase Contract shall remain operative and in full force and effect, regardless of: (i) any investigations made by or on behalf of the Underwriter; (ii) delivery of and payment for the Bonds pursuant to this Purchase Contract; and (iii) any termination ofthis Purchase Contract. 13. Determination of End of the Underwriting Period. For purposes of this Purchase Contract, the End of the Underwriting Period for the Bonds shall mean the earlier of (a) the day of the Closing unless the District has been notified in writing by the Underwriter, on or prior to the day of the Closing, that the "end of the underwriting period" for the Bonds for all purposes of the Rule will not occur on the day of the Closing, or (b) the date on which notice is given to the District by the Underwriter in accordance with the following sentence. In the event that the Underwriter has given notice to the District pursuant to clause (a) above that the "end of the underwriting period" for the Bonds will not occur on the day of the Closing, the Underwriter agrees to notify the District in writing as soon as practicable following the "end of the underwriting period" for the Bonds for all purposes of the Rule. 14. Effectiveness. This Purchase Contract shall become effective upon the execution ".- of the acceptance by the designee of the District and shall be valid and enforceable at the time of such acceptance. 45722683.1 13 3~ AGE<<O"'\l~~ . ,- 15. Headings. The headings of the sections of this Purchase Contract are inserted for convenience only and shall not be deemed to be a part hereof. ""'" 16. Governing Law. This Purchase Contract shall be construed in accordance with the laws of the State of California. 17. Counterparts. This Purchase Contract may be executed in any number of counterparts. If the foregoing is in accordance with your understanding of the Purchase Contract please sign and return to us the enclosed duplicate copies hereof, whereupon it will become a binding agreement between the District and the Underwriter in accordance with its terms. Very truly yours, SOUTHWEST SECURITIES, INC. By: Title Accepted: '-'" This _ day of ,2006 CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2005-6 (CITY CENTER TOWNHOMES) By: City Manager of the City of Lake Elsinore as the legislative body of the District '-'" 45722683.1 14 3) ACENDA ITEM NO._ 33~-= PAGE_~~_OF- ~ ~ .r'"" 45722683.1 Exhibit A $ City of Lake Elsinore Community Facilities District No. 2005-6 (City Center Townhomes) Special Tax Bonds, 2006 Series A Maturity Date (September I) Principal Amount Coupon Yield A-I 3)- AOEN~;:R;O. OF ~3(-": ~ Exhibit B Supplemental Opinion of Fulbright & Jaworski L.L.P. ~ Addressed to the Underwriter $ City of Lake Elsinore Community Facilities District No. 2005-6 (City Center Townhomes) Special Tax Bonds, 2006 Series A , 2006 Southwest Securities, Inc. 620 Newport Center Drive, Suite 300 Newport Beach, California 92660 Ladies and Gentlemen: We have acted as Bond Counsel to the City of Lake Elsinore Community Facilities District No. 2005-6 (City Center Townhomes), a community facilities district established under the Constitution and the laws of the State of California (the "District"), in connection with the issuance of $ aggregate principal amount of its Special Tax Bonds, 2006 Series A (the "Bonds"). '-' The Bonds are being issued by the District under the Mello-Roos Community Facilities Act of 1982, as amended, constituting Chapter 2.5, Part 1, Division 2, Title 5 ofthe Government Code of the State of California and pursuant to a Fiscal Agent Agreement, dated as of 1, 2006 (the "Fiscal Agent Agreement"), by and between the District and Union Bank of California, N.A., as fiscal agent, for the purpose of financing the acquisition of certain public facilities or capital fees to meet the needs of new development within the District, funding a reserve account for the Bonds, funding the cost of capitalized interest through 1, 2006, and paying the costs of incidental expenses incurred in connection with financing such public facilities and forming and administering the District. Capitalized terms used herein and not otherwise defined shall have the meanings assigned to them in the Fiscal Agent Agreement. As Bond Counsel, we have examined copies certified to us as being true and complete copies of the proceedings of the District in connection with the issuance of the Bonds. We have also examined such certificates of representatives of the District and others as we have considered necessary for the purposes of this opinion. This opinion is limited to matters governed by the laws of the State of California and Federal securities laws of the United States, and we assume no responsibility with respect to the applicability or effect of laws of any other jurisdiction. ~ 45722683.1 B-1 6~ IIGENDII ITEJ';f: 3> 3~ pACE OF_ ".,-. Based upon the foregoing, it is our opinion that: 1. The Fiscal Agent Agreement is exempt from qualification as an indenture pursuant to the Trust Indenture Act of 1939, as amended. 2. amended. The Bonds are exempt from registration pursuant to the Securities Act of 1933, as 3. As of the date of the Official Statement, dated , 2006, relating to the Bonds, the information contained in the Official Statement under the captions "INTRODUCTORY STATEMENT," "THE BONDS," "SOURCES OF PAYMENT FOR THE BONDS," "SUMMARY OF THE FISCAL AGENT AGREEMENT," "LEGAL MATTERS - Tax Exemption" and "APPENDIX A - DEFINITIONS OF CERTAIN TERMS USED IN THE FISCAL AGENT AGREEMENT," insofar as such statements expressly summarize certain provisions of the Bonds and the Fiscal Agent Agreement is accurate in all material respects. Weare furnishing you this opinion letter at the request of the District solely for your benefit as the Underwriter of the Bonds, and it is not to be used, circulated, quoted or otherwise referred to for any other purpose, nor is it to be referred to in whole or in part in the Official Statement relating to the Bonds or any other document, except that it may be included in, and reference may be made to it in any list of, the closing documents pertaining to the delivery of the Bonds. ".,-. Respectfully submitted, ~ 45722683.1 B-2 3r AGENDA 1TE~- ~~~- n. Of- 'AVE_ -- Exhibit C Opinion ofVon Blarcom, Liebold, McClendon & Mann, P.e., Special Counsel to the District ....." Addressed to the Underwriter $ City of Lake Elsinore Community Facilities District No. 2005-6 (City Center Townhomes) Special Tax Bonds, 2006 Series A ,2006 Southwest Securities, Inc. 620 Newport Center Drive, Suite 300 Newport Beach, California 92660 Ladies and Gentlemen: We are special counsel to the City of Lake Elsinore Community Facilities District No. 2005-6 (City Center Townhomes) (the "District") in connection with the issuance of the above- referenced Bonds and in such capacity, we have examined the original, certified copies, or copies .....", otherwise identified to our satisfaction as being true copies of such resolutions, documents, certificates, and records as we have deemed relevant and necessary (except as we have specifically limited the scope of our investigation herein) as the basis for the opinions set forth herein (collectively the "Documents") relying on such examination and pertinent law and subject to the limitations and qualifications hereinafter set forth, we are of the opinion that: 1. The District is a community facilities district duly organized and validly existing under the laws of the State of California with full legal right, power and authority to perform all of its obligations under the Purchase Contract dated , 2006 (the "Purchase Contract") between the District and Southwest Securities, Inc. (the "Underwriter") and the Basic Documents (as defined in the Purchase Contract). The City of Lake Elsinore, acting as the legislative body of the District, has duly authorized, and the District has executed and delivered, the Basic Documents and, assuming due authorization, execution and delivery by the other parties thereto, as necessary, the Basic Documents constitute legal, valid and binding agreements of the District enforceable against the District in accordance with their terms, except as the enforceability thereof may be limited by bankruptcy, moratorium, insolvency, equitable remedies and other laws affecting creditors' rights or remedies. 2. To the best of our knowledge, there is no action, suit or proceeding before or by any court, public board or body pending or threatened wherein an unfavorable decision, ruling or finding would (a) affect the creation, organization, existence or powers ofthe District or the titles of its officers to their respective offices, (b) in any way question or affect the validity or .....", 45722683.1 C-l 3:A AGENDA ITEM NO. ~ . PAGE~OF 3 .r- enforceability of the Basic Documents, or (c) find illegal, invalid or unenforceable the Purchase Contract, or the transactions contemplated thereby, or any other agreement or instrument related to the issuance ofthe Bonds to which the District is a party. 3. The execution and delivery of the Basic Documents and the other instruments contemplated by any of such documents to which the District is a party, and compliance with the provisions of each thereof, will not conflict with or constitute a breach of or default under any applicable law or administrative rule or regulation of the State of California, the United States or any department, division, agency or instrumentality of either thereof, or any applicable court or administrative decree or order or any loan agreement, note, resolution, indenture, contract, agreement or other instrument to which the District is a party or is otherwise subject or bound in a manner which would materially adversely affect the District's performance under the Basic Documents. 4. 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 District of its obligations under the Basic Documents have been obtained and are in full force and effect. This letter is furnished by us as special counsel to the District. Other than the District, no attorney-client relationship has existed or exists between us and you in connection with the Bonds or by virtue of this letter. Our engagement with respect to the Bonds has terminated as of .r- the date hereof, and 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. This letter is not intended to, and may not, be relied upon by owners of the Bonds. Respectfully submitted, r-. 45722683.1 C-2 8:;1 ACENOA rreM NO._ 3 3t., - PNJE.:81 _OF ~ Exhibit D Opinion of Fulbright & Jaworski L.L.P., Disclosure Counsel Addressed to the Issuer and the Underwriter "" $ City of Lake Elsinore Community Facilities District No. 2005-6 (City Center Townhomes) Special Tax Bonds, 2006 Series A , 2006 City of Lake Elsinore Community Facilities District No. 2005-6 (City Center Townhomes) 130 South Main Street Lake Elsinore, California 92530 Southwest Securities, Inc. 620 Newport Center Drive, Suite 300 Newport Beach, California 92660 Ladies and Gentlemen: "" We have acted as Disclosure Counsel to the City of Lake Elsinore Community Facilities District No. 2005-6 (City Center Townhomes) (the "District" or "Issuer") with respect to the issuance of the above captioned Bonds (the "Bonds"). The Bonds are being issued pursuant to the provisions of the Constitution and the laws of the State of Cali fomi a, including the provisions of the Mello-Roos Community Facilities Act of 1982, as amended, constituting Chapter 2.5, Part 1, Division 2, Title 5 of the Government Code of the State of California, as in existence on the Closing Date or as thereafter amended from time to time. The Bonds shall be issued and secured pursuant to a Fiscal Agent Agreement, dated as of 1, 2006 (the "Fiscal Agent Agreement"), by and between the District and Union Bank of California, N.A., as fiscal agent (the "Fiscal Agent"), authorizing the issuance of the Bonds. The Bonds are more fully described in the final Official Statement of the Issuer dated , 2006 (the "Official Statement"). Capitalized terms not otherwise defined herein shall have the meaning ascribed thereto in the Official Statement. In rendering this opinion, we have reviewed such records, documents, certificates and opinions, and made such other investigations of law and fact as we have deemed necessary or appropriate. This opinion is limited to matters governed by the Federal securities law of the United States, and we assume no responsibility with respect to the applicability or effect of the laws of any other jurisdiction. "" 45722683. I D-l ACENDA ITEM NO. ,3;;' _ _ ~ PACE f<6 OF ~~ - .,,-... ,,-... ,,-... In our capacity as Disclosure Counsel, we have rendered certain legal advice and assistance to you in connection with the preparation of the Official Statement. Rendering such legal advice and assistance involved, among other things, discussions and inquiries concerning various legal matters, review of certain records, documents and proceedings, and participation in conferences with, among others, your representatives and representatives of Bond Counsel, the Financing Consultant, the City, the District, and other consultants, at which conferences the contents of the Official Statement and related matters were discussed. On the basis of the information made available to us in the course of the foregoing (but without having undertaken to determine or verify independently, or assuming any responsibility for, the accuracy, completeness or fairness of any of the statements contained in the Official Statement), no facts have come to the attention of the personnel in our firm directly involved in rendering legal advice and assistance in connection with the preparation of the Official Statement which cause us to believe that the Official Statement as of its date (excluding therefrom financial, engineering and statistical data; forecasts, projections, estimates, assumptions and expressions of opinions; the treatment of the Bonds or the interest, discount or premium related thereto for tax purposes under the law of any jurisdiction; and the statements contained in the Official Statement under the captions "LEGAL MATTERS - Tax Exemption," and in the Appendices thereto, as to all of which we express no view) contained any untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein, in the lIght of the circumstances under which they were made, not misleading. During the period from the date of the Official Statement to the date of this opinion, except for our review of the certificates and opinions regarding the Official Statement delivered on the date hereof, we have not undertaken any procedures or taken any actions which were intended or likely to elicit information concerning the accuracy, completeness or fairness of any of the statements contained in the Official Statement. We are furnishing this opinion to you, as Disclosure Counsel to the Issuer, solely for your benefit. This opinion is rendered in connection with the transaction described herein, and may not be relied upon by you for any other purpose. This opinion shall not extend to, and may not be used, circulated, quoted, referred to, or relied upon by, any other person, firm, corporation or other entity without our prior written consent. Our engagement with respect to this matter terminates upon the delivery of this opinion to you at the time of the closing relating to the Bonds, and we have no obligation to update this opinion. Very truly yours, 45722683.1 D-2 "GENOA mM NO._ 3 ~ ~ - PAGE-8' _OF --t. Exhibit E Certificate ofthe Developer ~ Reference is made to the City of Lake Elsinore Community Facilities District No. 2005-6 (City Center Townhomes) Special Tax Bonds, 2006 Series A (the "Bonds"), and to the Purchase Contract dated , 2006 (the "Purchase Contract") by and between the City of Lake Elsinore Community Facilities District No. 2005-6 (City Center Townhomes) (the "District") and Southwest Securities, Inc. (the "Underwriter"), relating to the Bonds. This certificate is delivered pursuant to Section (7)(e)(l6) of the Purchase Contract. Capitalized terms used herein and not otherwise defined have the meanings ascribed to them in the Purchase Contract. As used herein, the term "Actual Knowledge of the Undersigned" shall mean the knowledge that the undersigned currently has or has obtained from interviews with such officers and responsible employees of the Developer as the undersigned has reasonably determined are likely, in the ordinary course of their respective duties, to have knowledge of the matters set forth herein. Other than as set forth in the immediately preceding sentence, with your permission, the undersigned has not conducted any additional inspection or inquiry. As used herein, the term "Affiliate" shall mean any entity in which the Developer has a controlling ownership interest. The undersigned certifies that he is familiar with the facts herein certified and is authorized and qualified to certify the same as an authorized officer or representative of Western Pacific Housing, Inc., a California corporation (the "Developer"), and the undersigned, on behalf ofthe Developer, further certifies as follows: . " 1. The Developer has been duly organized and validly exists under the laws of the State of California, is duly qualified to conduct business in California, and has all requisite right, power and authority (i) to execute and deliver this Certificate, and to execute and deliver at Closing (as defined in the Purchase Contract) its proposed Developer Continuing Disclosure Agreement (the "Continuing Disclosure Agreement") dated as of 1, 2006 and (ii) to undertake all of the transactions on its part contemplated by the proposed Continuing Disclosure Agreement and described in the Preliminary Official Statement. 2. As set forth in, and as of the date of, the Preliminary Official Statement, the Developer owns certain property (the "Property") within the City of Lake Elsinore Community Facilities District No. 2005-6 (City Center Townhomes) (the "District"). The Developer makes the representations herein with respect to all of such parcels. Except as otherwise described in the Preliminary Official Statement, the Developer is, and the Developer's current expectation is that the Developer shall remain, the developer of the Property. Except as otherwise described in the Preliminary Official Statement, the Developer has not entered into an agreement for development or management of the Property by any entity other than the Developer. " 45722683.1 E-l AGENDA mM NO.3). f. PAGE.!ll2-0F 33 A -. ".- 3. The Developer has, or will have prior to Closing, duly authorized the execution and delivery at Closing of its proposed Continuing Disclosure Agreement, and is duly authorized to perform the obligations on its part to be performed thereunder. To the Actual Knowledge of the Undersigned, the Developer has not previously failed to comply in any material respect with any undertakings by it under Rule 15c2-12 of the Securities and Exchange Commission under the Securities Exchange Act of 1934 to provide periodic continuing disclosure reports or notices of material events in California within the past five years. 4. Except as disclosed in the Preliminary Official Statement, to the Actual Knowledge ofthe Undersigned, the Developer and its Affiliates are not in breach of or in default under any applicable law or administrative regulation of the State of California or the United States, or any agency or instrumentality of either, which breach or default would in any way materially and adversely affect the Developer's ability to perform its obligations under the proposed Continuing Disclosure Agreement, or the Developer's ability to pay its special tax obligations when due on its Property (the "Special Taxes"), and to the Actual Knowledge of the Undersigned, no event has occurred and is continuing which with the passage of time or giving of notice, or both, would constitute such a breach or default; and to the Actual Knowledge of the Undersigned, the execution and delivery at Closing by the Developer of its Continuing Disclosure Agreement and compliance with the provisions thereof will not conflict with or constitute a breach of or default under any law or administrative regulation applicable to the Developer. /'""' 5. Except as disclosed in the Preliminary Official Statement, to the Actual Knowledge of the Undersigned, the Developer is not in breach of or in default under any applicable judgment or decree or any loan agreement, option agreement, development agreement, indenture, fiscal agent agreement, bond, note, resolution, agreement or other instrument to which the Developer is, or will upon issuance of the Bonds be, a party or otherwise subject, which breach or default would in any way materially and adversely affect the Developer's ability to perform its obligations under the proposed Continuing Disclosure Agreement, or its ability to pay the Special Taxes, and no event has occurred and is continuing that with the passage of time or giving of notice, or both, would constitute such a breach or default; and the execution and delivery at Closing by the Developer of its proposed Continuing Disclosure Agreement and compliance with the provisions thereof will not conflict with or, constitute a breach of or default under any judgment, decree, loan agreement, indenture, fiscal agent agreement, bond, note, resolution, agreement or other instrument to which the Developer is a party or otherwise subject which breach or default would in any way materially and adversely affect the Developer's ability to perform its obligations under the proposed Continuing Disclosure Agreement, its ability to develop the Property or its ability to pay the Special Taxes. 6. Except as described in the Preliminary Official Statement, the Developer has no loans outstanding and unpaid secured by the Property and no lines of credit which are secured by the Property. ".- 7. Except as set forth in the Preliminary Official Statement, to the Actual Knowledge of the Undersigned, there is no litigation or administrative proceedings of any 45722683.1 E-2 AGENDA ITEM NO. :3 ';).. PPNE31 OF 3 'Y, ~ nature pending against the Developer (with property service of process having been accomplished) or, to the Actual Knowledge of the Undersigned, threatened against the Developer, which if successful, would have a material adverse affect on the ability of the Developer to complete the development and sale of the Property, or to pay the Special Taxes or ordinary ad valorem property tax obligations when due on the Property. ~ 8. As of the date hereof, except as clarified below, the Preliminary Official Statement, solely with respect to information contained therein with respect to the Developer, including its Affiliates, the ownership and proposed development of the Property, the Developer's development plan, the Developer's fmancing plan, and the Developer's lenders and contractual arrangements, if any, as set forth under the captions "THE DISTRICT" (excluding the information regarding the Appraisal, market value ratios and annual special tax ratios and information provided by a source other than the Developer) and "SOURCES OF PAYMENT FOR THE BONDS" 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 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. 9. The Developer has full power and authority to own and develop the Property, and to carry on its business as presently conducted and as described in the Preliminary Official Statement. 10. The Developer covenants that, while the Bonds or any refunding obligations related thereto are outstanding, the Developer and its Affiliates 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 District, to challenge the adoption of the Ordinance levying Special Taxes within the District, to invalidate the District or any refunding obligations, 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 or proceeding including, without limitation, an action or suit contending that the Special Tax has not been levied in accordance with the methodologies contained in the District's Special Tax Formula pursuant to which the Special Taxes are levied, an action or suit with respect to the application or use of the Special Taxes levied and collected, or an action or suit to enforce the obligations of the City and the District under the Fiscal Agent Agreement or any other agreements between the Developer, the City and/or the District, or to which the Developer is a beneficiary. 11. Except as disclosed in the Preliminary Official Statement, to the Actual Knowledge of the Undersigned, no other public debt secured by a tax or assessment on the Property is in the process of being authorized and no assessment districts or community facilities districts are in the process of being formed that include any portion of the Property. 12. Except as described in the Preliminary Official Statement, the Developer has not assumed any obligations under any judgment, decree, contract or otherwise, that "-" 45722683.1 E-3 AGENDA ITEM NO. ;);}. PACE_ tf1- OF 33G:,- /"'" would materially interfere with the Developer's execution and performance of its obligations under the proposed Continuing Disclosure Agreement or which would in any way materially and adversely affect its ability to develop the Property or to pay Special Taxes. 13. To the Actual Knowledge of the Undersigned and except as disclosed in the Preliminary Official Statement, the Developer and its Affiliates have never defaulted to any material extent in the payment of special taxes or assessments in connection with the District or any other community facilities district or assessment district in California within the past five years. 14. The Developer has received a copy of the Rate and Method of Apportionment containing the prepayment formula. The Developer acknowledges that any prepayment of the levy of the Special Taxes with respect to any parcel of Property shall only be made in accordance with said terms. 15. The Developer agrees to comply with the provision of the Mello-Roos Community Facilities Act relating to the Notice of Special Tax described in California Government Code Section 53341.5 in connection with the sale of the Property. ,...... 16. To the Actual Knowledge of the Undersigned, the Developer and its Affiliates are solvent and no proceedings are pending (with proper service of process having been accomplished) or, to the Actual Knowledge of the Undersigned, threatened in which the Developer or the Affiliates may be adjudicated as bankrupt or become the debtor in a bankruptcy proceeding, or discharged from any and all of its debts or obligations or granted an extension of time to pay its debts or obligations or a reorganization or readjustment of its debts. 17. To the Actual Knowledge of the Undersigned, there are no claims, disputes, suits, actions or contingent liabilities among, by or between the Developer and any of its financial partners, Affiliates, or among, by or between the Developer and any contractors involved in the development of the Property which may materially adversely affect the development of the Property or the payment of the Special Taxes. 18. Based upon its current development plans, including, without limitation, its current budget and subject to economic conditions and risks generally inherent in the development of real property, the Developer anticipates that it will have sufficient funds to develop the Property as described in the Preliminary Official Statement and to pay Special Taxes assessed against the Property and does not anticipate that the District will be required to resort to the Reserve Account for payment of principal of or interest on the Bonds due to the Developer's nonpayment of Special Taxes. However, none of the Developer or its Affiliates is obligated to make any additional capital contribution or loan to the Developer at any time and neither the Developer nor its Affiliates are obligated to pay, or to contribute additional capital for the payment of, Special Taxes. ",.-... 19. To the Actual Knowledge of the Undersigned, all information submitted by, or on behalf of, the Developer to the City, the District, the Special Tax Consultant or 45722683.1 E-4 3;;2 AGENDA tTEM NO. % - pAGE q~ OF ~ -- ~ the Underwriter in connection with the issuance of the Bonds, and to Harris Realty Appraisal (the "Appraiser") in connection with the preparation of the appraisal relating to the District was, at the time of submission or as updated through the date of this ~ certificate, correct in all material respects. 20. The Developer consents to the issuance of the Bonds. The Developer acknowledges and agrees that the proceeds of such Bonds will be used as described in the Preliminary Official Statement, and that the costs of acquisition and construction of such improvements are estimates. Any increase in costs in excess of the estimated costs relating to improvements will reduce the improvements which may be financed by the District, and neither the City nor the District has any obligation to provide moneys to pay for any such costs. 21. Solely as to information indicated in Section 8 hereof concerning the Developer, its Affiliates and the proposed development of the Property by the Developer, and subject to the limitations and exclusions set forth in Section 9, the Developer agrees to indemnify and hold harmless, to the extent permitted by law, the District and the City, 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, 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 or otherwise, and shall reimburse any such indemnified party for any legal or other expense incurred by it in connection with investigating any such claims against it and defending any such actions, insofar as such losses, claims, damages, liabilities or actions arise out of or are based upon any untrue statement or alleged untrue statement of a material fact or the omission or alleged omission to state, in the Preliminary Official Statement, a material fact necessary to make the statement therein, in light of the circumstances under which it was 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 gross negligence or willful misconduct of an indemnified party. '-' 22. The Developer agrees to execute its Continuing Disclosure Agreement substantially in the form attached to the Preliminary Official Statement, with such additional changes as may be agreed upon by the Developer. 23. Ifbetween the date hereof and the date of the Closing any event relating to or affecting the Developer or the proposed development of the Property by the Developer shall occur of which the undersigned has actual knowledge and which the undersigned believes might or would cause the Official Statement, as then supplemented or amended, to contain an untrue statement of a material fact or to 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, the Developer shall notify the District and the Underwriter and if in the opinion of counsel to the District or the Underwriter such event requires the preparation and publication of a supplement or amendment to the Official Statement, the Developer shall cooperate with the District in ~ 45722683.1 E-5 ACENDA ITEM NO. :3 ^ PACE q t{. OF '33l, ~ r-. the preparation of an amendment or supplement to the Official Statement in form and substance satisfactory to counsel to the District and to the Underwriter. 24. For a period of 90 days after the issuance of the Bonds, if any event relating to or affecting the Developer or the proposed development of the Property by the Developer shall occur of which the undersigned has actual knowledge as a result of which it is necessary, in the opinion of the Underwriter or counsel to the District, to amend or supplement the Official Statement in order to make the Official Statement not misleading in the light of the circumstances existing at the time it is delivered to a purchaser, the Developer shall cooperate with the District and the Underwriter in the preparation of an amendment or supplement to the Official Statement in form and substance satisfactory to the Underwriter and counsel to the 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 existing at the time the Official Statement is delivered to a purchaser, not misleading. 25. The Developer agrees to deliver a bring-down certificate, substantially in the form attached hereto as Exhibit A, dated the date of issuance of the Bonds at the time of issuance of the Bonds to affirm and restate the Developer's certifications made herein. 26. On behalf of the Developer, I have reviewed the content of this certificate and the Developer has consulted with counsel regarding the meaning of its contents. ~ DATED: , 2006 WESTERN PACIFIC HOUSING, INC., a California corporation By: Title: r- 45722683. ] E-6 ACENDAIlmNO. :3 d. PACE q~ OF g~-- Exhibit F Bring-Down Certificate ofthe Developer Reference is made to the City of Lake Elsinore Community Facilities District No. 2005-6 (City Center Townhomes) Special Tax Bonds, 2006 Series A (the "Bonds"), to the Purchase Contract dated , 2006 (the "Purchase Contract") by and between the City of Lake Elsinore Community Facilities District No. 2005-6 (City Center Townhomes) (the "District") and Southwest Securities, Inc. (the "Underwriter"). This certificate is delivered pursuant to the Purchase Contract. Capitalized terms used herein and not otherwise defined have the meanings ascribed to them in the Purchase Contract. A copy of a Certificate dated , 2006 (the "Certificate") delivered by Western Pacific Housing, Inc., a California corporation (the "Developer") is attached hereto as Exhibit A. ~ The undersigned certifies that he 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 a copy of the final Official Statement and each statement made in the Certificate is affirmed and restated as if made on the date hereof, provided that each statement made in the Certificate referring to the Preliminary Official Statement is affirmed as it relates to the final printed Official Statement and each statement made in the Certificate referring to the proposed Continuing Disclosure Agreement is affirmed as if it relates to the Continuing Disclosure Agreement as executed and delivered. 2. To the Actual Knowledge of the Undersigned, no event has occurred since the date of the Official Statement which has adversely affected or will materially and adversely affect the business, properties, operations, prospects or financial condition of the Developer or its Affiliates which would materially and adversely affect the Developer's ability to develop its Property or its ability to pay its Special Taxes. ......, 3. The Developer has duly authorized the execution and delivery of its Continuing Disclosure Agreement, is duly authorized to perform the obligations on its part to be performed thereunder, and its Continuing Disclosure Agreement constitutes the legal, valid and binding obligations of the Developer, enforceable against it in accordance with its terms. , 2006 WESTERN PACIFIC HOUSING, INC., a California corporation DATED: By: Title: ......, 45722683. ] F-l 3d- AGENDA mM * 3?L pAGE Of.... ---' ,.,.-.. FUNDING, CONSTRUCTION AND ACQUISITION AGREEMENT THIS FUNDING, CONSTRUCTION AND ACQUISITION AGREEMENT, dated as of , 2006 for identification purposes only (this "Agreement"), is by and between the City of Lake Elsinore, California (the "City"), acting on behalf of City of Lake Elsinore Community Facilities District No. 2005-6 (City Center Townhomes) (the "District"), and Western Pacific Housing, Inc., a California corporation (the "Owner"). RECITALS WHEREAS, the City has undertaken proceedings to form the City of Lake Elsinore Community Facilities District No. 2005-6 (City Center Townhomes) (the "District"), authorize the levy of special taxes within the District, and authorize the issuance of Bonds secured by such special taxes levied within the District pursuant to The Mello-Roos Community Facilities Act of 1982 (the "Act") to fund the acquisition and construction of the Public Facilities (as defined below) and related costs and the payment of Fees (as defined below). The City will use the proceeds of the Bonds to, among other things, finance the payment of Fees and the Purchase Price of the Public Facilities. WHEREAS, the Public Facilities are within the vicinity of or of benefit to the City, and the City and the Owner will benefit from a coordinated plan of financing, designing, engineering ,.,.-. and construction ofthe Public Facilities. WHEREAS, the Owner and the City wish to finance the acquisition and construction of the Public Facilities and the payment therefor by entering into this Agreement for the acquisition of the Public Facilities and payment for Discrete Components thereof as shown in Exhibit A-I and/or Exhibit A-2 hereto (as it may be amended and supplemented) with funds in the Acquisition and Construction Fund. WHEREAS, the City and the other Receiving Agencies have determined that they will obtain no advantage from undertaking the construction of the Public Facilities, and that the provisions of this Agreement require that the Public Facilities constructed by the Owner and completed after formation of the District be constructed as if they had been constructed under the direction and supervision of the Receiving Agency. Notwithstanding the foregoing, upon mutual agreement of the City, the Owner and the Receiving Agency, the City or its designee or Receiving Agency or its designee may construct any of the Public Facilities, financed in whole or in part with funds in the Acquisition and Construction Fund as set forth in Section 4.6 below. WHEREAS, in consideration of the mutual promises and covenants set forth herein, and for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the City and the Owner agree that the foregoing recitals, as applicable to each, are true and correct and further make the agreements set forth herein. ,.,.-. NOW, THEREFORE, for and in consideration of the mutual promises and covenants herein contained, the parties hereto agree as follows: 45722627.2 1 :b;). ~fJl::J1"__Of3~ ARTICLE I ~ DEFINITIONS Section 1.1 Definitions. The following terms shall have the meanings ascribed to them in this Section 1.1 for purposes of this Agreement. Unless otherwise indicated, any other terms, capitalized or not, when used herein shall have the meanings ascribed to them in the Fiscal Agent Agreement (as hereinafter defined). "Acceptance Date" means the date the City approves a Payment Request. "Acceptable Title" means title to land or interest therein, in form acceptable to the Receiving Agency, free and clear of all liens, taxes, assessments, leases, easements and encumbrances, whether or not recorded, other than exceptions that do not materially interfere with the actual or intended use of the land or interest therein or as shall have otherwise been approved by the Receiving Agency. "Acquisition and Construction Fund" means the Acquisition and Construction Fund, and any accounts established therein, established by a Fiscal Agent Agreement relating to the issuance of a series of the Bonds, from which the Purchase Price of the Public Facilities or Discrete Component thereof and Fees shall be paid and from which Actual Costs of the Public Facilities or discrete Component thereof may be financed in accordance with the Construction Election. --' "Act" means The Mello-Roos Community Facilities Act of 1982, being Chapter 2.5 of Part 1 of Division 2 of Title 5 (commencing with Section 53311) of the California Government Code. "Actual Cost" means the cost of a Public Facility or a Discrete Component, which cost may include: (i) the actual hard costs for the construction of such Public Facility or Discrete Component, including labor, materials and equipment costs, (ii) the costs incurred in preparing the Plans for such Public Facility or Discrete Component and the related costs of environmental evaluations of the Public Facility or Discrete Component, (iii) the fees paid to governmental agencies for, and other costs incurred in connection with, obtaining permits, licenses or other governmental approvals for such Public Facility or Discrete Component, (iv) professional costs associated with such Public Facility or Discrete Component, such as engineering, legal, accounting, inspection, construction staking, materials testing and similar professional services; (v) costs directly related to the construction and/or acquisition of a Public Facility or Discrete Component, such as costs of payment, performance and/or maintenance bonds, and insurance costs (including costs of any title insurance required hereunder); (vi) costs of construction management and supervision equal to five percent (5%) of the amount set forth in (i) above for a Public Facility or Discrete Component; and (vii) the value of any real property or interests therein ("Real Estate") that (1) are required for the development of any Public Facility such as temporary construction easements, haul roads, etc., or (2) are required to be conveyed with the Public Facility, in an amount equal to the actual cost of the Real Estate purchased from an 3^ --' ACENDA'TEM NO._ ~ P~.9.2 OF 45722627.2 2 ~ independent third party. The City shall not purchase such Real Estate from the Owner. Actual Cost shall not include any internal or overhead costs of the Owner other than the amount for construction management and supervision set forth in clause (vi) above. "Affiliate" means any entity owned, controlled or under common ownership or control by or with, as applicable, the Owner and includes all general partners of any entity which is a partnership. Control shall mean ownership of more than fifty percent (50%) of the voting power of or ownership interest in the respective entity. "Agreement" means this Funding, Construction and Acquisition Agreement, together with any Supplement hereto. "Bonds" means the bonds, notes or other indebtedness of the District issued to generate proceeds for the Acquisition and Construction Fund. "City" means the City of Lake Elsinore, California. "City Facilities" means one or more of the Public Facilities or Discrete Components thereof described in Exhibit A-I and/or Exhibit A-2 hereto, as it may be amended or supplemented, to be owned, operated, and maintained by the City which are eligible to be financed out of the Acquisition and Construction Fund. "Construction Election" shall have the meaning set forth in Section 3.6 below. ~ "County" means the County of Riverside, California. "Director" means the Director of Community Development of the City, or his or her designee acting as such under this Agreement. "Discrete Component" means (i) a component of a Public Facility that the City and the Receiving Agencies have agreed can be separately identified, inspected and completed, and can be the subject of a Payment Request hereunder, and (ii) categories of costs relating to each Public Facility as generally described in Exhibit A-I and/or Exhibit A-2 hereto. "District" means City of Lake Elsinore Community Facilities District No. 2005-6 (City Center Townhomes), a community facilities district organized and existing under the laws ofthe State of California. "District Representative" means the City Manager or his designee. "EVMWD" means Elsinore V alley Municipal Water District. "Fees" means development impact fees, environmental mitigation fees or other capital improvement fees or charges imposed or collected by the City or EVMWD relating to the Project. ,-, "Fiscal Agent" means the fiscal agent identified in a Fiscal Agent Agreement, or any successor thereto acting as fiscal agent under the Fiscal Agent Agreement. 45722627.2 3 jlGBtDA ntM NO. :?_~'?b-= pra~oF=3 .~ "Fiscal Agent Agreement" means a fiscal agent agreement between the City and the Fiscal Agent, providing for, among other matters, the issuance of the Bonds and the establishment of an Acquisition and Construction Fund, as it may be amended or supplemented from time to time. ..."" "Improvement Agreement" shall have the meaning set forth in Section 2.3 below. "Owner" means Western Pacific Housing, Inc., a California corporation, and its successors and assigns. "Party" means either the City or the Owner; "Parties" mean the Owner and the City. "Payment Request" means a document, substantially in the form of Exhibit B-1 hereto, to be used in requesting a payment of a Purchase Price, and a document, substantially in the form of Exhibit B-2 hereto, to be used in requesting payment of Fees. "Plans" means the plans, specifications, schedules and related construction contracts for the Public Facilities and/or any Discrete Components thereof approved pursuant. to applicable standards of the applicable Receiving Agency, inclusive of all change orders, if any. As of the date of this Agreement, the City standards for construction are incorporated in the City of Lake Elsinore Standard Plan and are supplemented from time to time by standards set forth in the .Green Book, CAL TRANS Standard Plan and Specification, Standard Specifications for Public Works Construction (SSPWC), of the Southern California Chapter of the American Public Works Association and the Southern California Districts of the Associated General Contractors of California. ..."" "Project" means the development within the District commonly known as "Vista del Lago." "Public Facility" or "Public Facilities" means one or more of the public facilities described in Exhibit A-I and/or Exhibit A-2 hereto, as it may be amended or supplemented, which are to be owned, operated, and maintained by any Receiving Agency and are eligible to be financed out of the Acquisition and Construction Fund. "Purchase Price" means the amount paid by the District for a Public Facility and/or any Discrete Components thereof in an amount equal to the lesser of the Actual Cost or the value of such Public Facility or Discrete Component, as determined in Section 4.4. "Rate and Method" means the rate and method of apportionment of special taxes approved for the District. "Receiving Agency" means, as applicable, the City, EVMWD or other governmental entity that will own, operate and maintain a Public Facility when completed and acquired. "Supplement" means a written document amending, supplementing or otherwise modifying this Agreement and any exhibit hereto, including any amendments to the list of Public Facilities and Discrete Components in Exhibit A-I and/or Exhibit A-2, and/or the addition to 45722621.2 4 ....." AGENDA ITEM NO. ~ ;). PNJE..l1lL-OF '3~ .. /'"', Exhibit A-I andlor Exhibit A-2 of additional Public Facilities (and Discrete Components) to be financed with the proceeds ofthe Bonds deposited in the Acquisition and Construction Fund. /'"' ,-- ARTICLE II FUNDING Section 2.1 Proceedings. The City shall conduct all necessary proceedings under the Act for the issuance, sale and delivery of each series of Bonds. Bonds may not be issued unless and until the City receives an executed notice from the Owner requesting such issuance. Upon the City's receipt of such issuance notice, the Owner and the City staff will meet regarding the amount, timing and other material aspects of each series of the Bonds, but the legal proceedings and the series, principal amounts, rates, terms and conditions and timing of the sale of the Bonds shall in all respects be solely determined by the City Council of the City, acting as the governing body of the District. Subject to the foregoing discretion of the governing body of the District, the District may issue one or more series of Bonds with a term of not less than 30 years in coordination with the Owner's timing of development within the District and subject to sound municipal finance practices and then, current industry standards. The District agrees that each series of Bonds shall be sized, to the extent reasonably allowable based on debt service coverage of not more than 110% (based upon the aggregate assigned special taxes authorized to be levied upon buildout ofthe District in accordance with the Rate and Method) and a ''value-to-lien'' ratio of 3:1. For purposes of determining the value-to-lien ratio, the value of the District for which Bonds are being issued shall include the value of the Public Facilities and Fees to be financed with the proceeds of the Bonds and not included in an escrow fund or account and the lien shall not include the portion of the Bonds included in an escrow fund or account established in connection with the issuance of the Bonds. The District agrees that an escrow structure may be used at the Owner's request in order to comply with the 3:1 value-to-lien ratio requirement. Upon the City Manager's request, the Owner shall deposit funds with the City to pay for reasonable costs to be incurred by the City related to the issuance of such Bonds including, without limitation, appraisal, market absorption study, special tax consultant, bond and issuer's counsel, and city attorney and staff costs. Any funds deposited by the Owner and expended by the City shall be subject to reimbursement solely out of the proceeds of the applicable Bonds. Any unexpended funds deposited by the Owner with the City pursuant to this Section 2.1 and remaining on deposit with the City following the issuance of the applicable series of Bonds or the abandonment of efforts to issue such Bonds shall be returned to the Owner. Section 2.2 Bond Proceeds and Special Taxes. The City shall not be obligated to pay Fees and the Purchase Price of any Public Facility or any Discrete Components thereof, except from amounts on deposit in the Acquisition and Construction Fund(s). The City makes no warranty, express or implied, that the proceeds of the Bonds deposited and held in the Acquisition and Construction Fund(s), and any investment earnings thereon, will be sufficient to pay the Purchase Price of all of the Public Facilities and Fees. To the extent allowed under the Rate and Method, the City agrees that special taxes shall be levied on property in the District to pay directly for Public Facilities, or any Discrete Components thereof, and Fees if Bonds have not previously been issued secured by such special taxes. Such special taxes levied and collected by the City and any prepayment of special taxes collected prior to the issuance of Bonds shall be held by the City and disbursed to pay the Purchase Price of Public Facilities, or any Discrete 457226272 5 AOENll~;tOflt: Component thereof, and Fees and, upon the issuance of Bonds, such special taxes still held by the City shall be deposited in the Acquisition and Construction Fund. .....", Section 2.3 Proceeds. The proceeds of each series of Bonds shall be deposited, held, invested, reinvested and disbursed as provided in the Fiscal Agent Agreement. A portion of the proceeds of the Bonds will be set aside in the Acquisition and Construction Fund. Moneys in the Acquisition and Construction Fund shall be deposited, held, invested, reinvested and disbursed therefrom in accordance with the provisions of the Fiscal Agent Agreement and the applicable provisions hereof for payment of all or a portion of the Purchase Price of the Public Facilities and Fees (including payment of the Purchase Price of Discrete Components thereof), all as herein provided. The Acquisition and Construction Fund may include two accounts - a "City Facilities Account" (for payment of Fees imposed by the City and City Facilities) and a "Non-City Facilities Account" (for payment of Fees and Public Facilities other than Fees imposed by the City and City Facilities). Upon the issuance of each series of Bonds, proceeds available to be deposited in the Acquisition and Construction Fund shall be initially allocated to the City Facilities Account and Non-City Facilities Account, as set forth in a written request from the Owner. Transfers shall be made between the two accounts upon the written request of the Owner and the written approval of the City. Unless otherwise requested in writing by the Owner prior to issuance of each series of Bonds, earnings on amounts in each Account of the Acquisition and Construction Fund shall be retained in the Account and available to pay the Purchase Price of Public Facilities and Fees until either (i) all Public Facilities and Fees have been financed, as evidenced by a certificate provided by the Owner, or (ii) the Owner provides a certificate to the District indicating that the funds on deposit in the Account are sufficient to -....." finance the remaining Public Facilities and Fees for which the Owner expects to submit a Payment Request, at which time any earnings shall be transferred to pay debt service on the Bonds. Earnings on amounts in the reserve fund(s) created under the Fiscal Agent Agreements, shall be deposited as set forth in the Fiscal Agent Agreements. For Bonds issued on or prior to May 30, the District agrees to include capitalized interest to cover debt service due in September of the same year. For Bonds issued after May 30, the District agrees to include capitalized interest to cover debt service for all payments due up to and including September of the following year. The Owner acknowledges that any lack of availability of amounts in the Acquisition and Construction Fund to pay the Purchase Price of the Public Facilities, or any Discrete Components thereof, and Fees shall in no way diminish any obligation of the Owner with respect to the construction of or contributions for public facilities and mitigation measures required in connection with the Project by any development or other agreement to which the Owner is a party, or any governmental approval to which the Owner is subject (collectively, the "Improvement Agreements"). The Owner may provide a written notice to the District indicating that it shall not request the issuance of Bonds. Upon receipt of such notice and the Owner's advance of the City's costs of preparing and recording a notice of cancellation of special taxes and extinguishment of lien ("Notice of Cancellation") with respect to all property within the District, the District shall -....." 45722627.2 6 AGENDA ITEM NO. 3}-- PAPE L Ul.- o~ /"'" record the Notice of Cancellation terminating the authority to levy special taxes in the District pursuant to the Rate and Method. Section 2.4 Continuing Disclosure Agreement. The Owner agrees to provide to the City, and to require each transferee or assignee to provide to the City all information regarding the development within the District, including the financing plan for such development, which is necessary to ensure that the City complies with its continuing disclosure obligations under the Fiscal Agent Agreement and all other applicable federal and state securities laws. ARTICLE III CONSTRUCTION OF PUBLIC FACILITIES Section 3.1 Plans. To the extent and at the time required by the Improvement Agreements, the Owner shall cause Plans to be prepared for the Public Facilities. The Owner shall obtain the written approval of the Plans in accordance with applicable ordinances and regulations of the applicable Receiving Agencies. Section 3.2 Construction. This Agreement shall not expand, limit or otherwise affect any obligation of the Owner under any Improvement Agreements. All Public Facilities shall be constructed in accordance with the Improvement Agreements and the approved Plans. Section 3.3 Relationship to Public Works. This Agreement is for the acquisition of ~ and payment for the Public Facilities and Discrete Components thereof by the Receiving Agency from moneys in the Acquisition and Construction Fund and is not intended to be a public works contract. The City and the Owner agree that the Owner shall award all contracts for the construction of the Public Facilities and the Discrete Components thereof to be constructed by the Owner, and that this Agreement is necessary to assure the timely and satisfactory completion of such Public Facilities and the Discrete Components thereof. From time to time at the request of the District Representative or the Owner, the Owner and the District Representative shall meet and confer regarding matters arising hereunder with respect to the Public Facilities, Discrete Components and the progress in constructing and acquiring the same, and as to any other matter related to the Public Facilities or this Agreement. Section 3.4 Contractor. In performing this Agreement, the Owner is an independent contractor and not an agent or employee of the City. The City shall not be responsible for making any payments to any contractor, subcontractor, agent, consultant, employee or supplier of the Owner. /"'" Section 3.5 Contracts and Change Orders. The Owner shall be responsible for entering into all contracts and any supplemental agreements (commonly referred to as "change orders") required for the construction of the Public Facilities, or any Discrete Components thereof, to be constructed by the Owner, and all such contracts and supplemental agreements shall be submitted to the Director. The Owner shall be required to show evidence that the Owner solicited, or caused to be solicited, at least three (3) bids for the construction of each City Facility for which the Owner submits a Payment Request and that the contract for the construction of each such City Facility was awarded to the lowest responsible bidder for such City Facility. AGENDA ITEM No.3) 45722627.2 7 . '[If.'.tJEjr;3._.9r:. 33t-, ~ Bidding, contracts and change orders with respect to City Facilities shall comply with the requirements set forth in Exhibit "D" of this Agreement. ~ Section 3.6 Construction Election. The Owner and the City, or the Owner and a Receiving Agency, may mutually elect (the "Construction Election") to cause any or all of the applicable Public Facilities or a Discrete Component thereof to be constructed by the City or Receiving Agency, if applicable, and financed out of the Acquisition and Construction Fund in accordance with the terms and conditions described in this Section 3.6 and the hnprovement Agreements and subject to the availability of sufficient funds, including the proceeds of the Bonds. If the Owner and the City, or the Owner and a Receiving Agency, make the Construction Election with respect to a Public Facility, or any Discrete Component thereof, the Owner shall transfer Acceptable Title to the land or right-of-ways then owned by the Owner on and over such real property on which the Public Facility, or Discrete Component thereof, is to be constructed. Upon completion of a City Facility or Discrete Component thereof for which a Construction Election has been made, payment shall be made pursuant to Article IV below for the Purchase Price thereof incurred by the Owner prior to the Construction Election. Section 3.7 Notice of Completion and Lien Releases. Upon completion of the construction of a Public Facility, the Owner shall notify the Director in writing of such completion and shall prepare and execute a Notice of Completion for such Public Facility in the form prescribed by Section 3093 of the California Civil Code and shall record such notice in the Official Records of the County of Riverside. The Owner shall cause its contractors to provide '-till unconditional lien releases for such Public Facility or all Discrete Components in accordance with Section 3262 of the Civil Code. ARTICLE IV ACQUISITION AND PAYMENT Section 4.1 Inspection. No payment hereunder shall be made by the City to the Owner for a Public Facility or Discrete Component thereof until the Public Facility or Discrete Component thereof, if applicable, has been inspected by the City or the other applicable Receiving Agency that will be acquiring the same. Unless otherwise provided in a Supplement, the City shall make or cause to be made regular on-going site inspections of the Public Facilities to be acquired hereunder. For Public Facilities or Discrete Components to be acquired by other Receiving Agencies, the Owner shall be responsible for obtaining such inspections and providing written evidence thereof to the Director. Section 4.2 Agreement to Sell and Purchase Public Facilities. The Owner hereby agrees to sell to the City, and the City hereby agrees to purchase from the Owner, the Public Facilities, including the Discrete Components thereof, constructed by the Owner for their respective Purchase Prices, subject to the terms and conditions hereof. The City shall not be obligated to purchase any Public Facility until the Public Facility is completed and the acceptance by the Receiving Agency for such Public Facility has occurred; provided that the City ~ 45722627.2 8 ;!;J). AGENDA IT~ f{ ~ PAGE I U4 OF ~ ,.... ,,-.. has agreed hereunder to make payments to the Owner for Discrete Components of Public Facilities prior to the completion of such Public Facilities. The Owner acknowledges that the Discrete Components have been identified for payment purposes only, and that the City shall not accept a City Facility of which a Discrete Component is a part until the entire City Facility has been completed. The City acknowledges that the Discrete Components do not have to be accepted by the applicable Receiving Agency as a condition precedent to the payment of the Purchase Price therefor, but any such payment shall not be made until the Discrete Component has been completed in accordance with the Plans therefor, and such completion is acknowledged in writing by the Receiving Agency. The Parties hereto acknowledge that certain Public Facilities, as generally described in Exhibit A-2 attached hereto, may have been completed prior to the formation of the District. If any Public Facility or Discrete Component thereof is constructed by the Owner and completed prior to the formation of the District, such Public Facilities shall be eligible to be acquired with funds available in the Acquisition and Construction Fund, pursuant to the provisions of this Agreement; provided, however, that the Owner shall indemnify and hold harmless City for any investigation or inquiry by the Department of Industrial Relations and shall defend any action by the Department of Industrial Relations with respect to the construction of Public Facilities, Furthermore, the Owner shall indemnify and hold harmless the City from and against all damages, claims, losses or expenses of every type arising out of such investigation or inquiry and any action brought by a contractor or subcontractor in connection therewith. The City makes no representatiop as to whether of not the Public Facilities constructed by the Owner and completed prior to the formation of the District constitute a public work. ,- Section 4.3 Requests. In order to receive the Purchase Price for a completed Public Facility or Discrete Component, inspection thereof under Section 4.1, if applicable, shall have been made and the Owner shall deliver to the District Representative and the Director: (i) a Payment Request in the form of Exhibit B-1 hereto for such Public Facility or Discrete Component, and (ii) if payment is requested for a completed Public Facility, (a) if the property on which the Public Facility is located is not owned by the Receiving Agency at the time of the request, a copy of the recorded documents conveying to the Receiving Agency Acceptable Title to the real property on, in or over which such Public Facility is located, as described in Section 6.1 hereof, (b) a copy of the recorded notice of completion of such Public Facility (if applicable), and (c) an assignment of the warranties and guaranties for such Public Facility, as described in Section 5.5 hereof. Section 4.4 Determination of Value for a Public Facility. The value of a Public Facility shall be equal to the Actual Cost of construction of such Public Facility, less such portion of such cost of construction which the Director has, in his or her reasonable professional opinion, determined would not have been incurred had such Public Facility been constructed pursuant to a public works contract awarded by the City. As a non-exclusive example, if the Owner pays overtime to complete the construction of street improvements to provide access to a parcel by a date certain as required by the Owner's lease obligations to a tenant occupying such parcel, the cost of such overtime will be deducted from the overall cost of construction of such Public Facility to determine the value of such Public Facility. Disputes by the Owner related to ,,-... the determination of value shall be presented to and resolved by the City Manager, and the City Manager's decision in the matter shall be final. 45722627.2 9 t'~CENDA ITEM No.3,) ~~E 1% OF 32k:,-., ...,. Section 4.5 Payment Requests. Upon receipt of a Payment Request (and all accompanying documentation), the Director shall conduct a review in order to confirm that such request is complete, that such Discrete Component or Public Facility identified therein was constructed substantially in accordance with the Plans therefor, and to verify and approve the Purchase Price of such Discrete Component or Public Facility specified in such Payment Request. The Director shall conduct each such review in an expeditious manner and the Owner agrees to reasonably cooperate with the Director in conducting each such review and to provide the Director with such additional information and documentation as is reasonably necessary for the Director to conclude each such review. For any Public Facilities to be acquired by another Receiving Agency, the Owner shall provide evidence reasonably acceptable to the Director that such Public Facilities are acceptable to such Receiving Agency. Within ten (10) business days of receipt of any Payment Request, the Director shall notify the Owner whether such Payment Request is complete, and, if not, what additional documentation must be provided. If such Payment Request is complete, the Director will provide a written approval or denial of the request within twenty-one (21) business days of its submittal. If the Director disapproves any Payment Request, the Director shall provide written notice of disapproval to the Owner within such twenty-one (21) business day period stating in reasonable detail the reasons for such disapproval and the changes to the Payment Request necessary to obtain the Director's approval. The Director's review of any Payment Request shall be made on a Public Facility and/or Discrete Component basis such that the Director shall approve for payment any Public Facilities and/or Discrete Components covered by a Payment Request that comply with the requirements of this Agreement even if the Director disapproves other Public Facilities and Discrete Components included as part of the same Payment Request. If the Director disputes the Actual Cost of any Public Facility or Discrete Component covered by the Payment Request, the Director shall approve for payment a Purchase Price in an amount the Director determines is appropriate (which shall not be less than the amounts of contracts and change orders previously approved by the Director) and shall deliver notice of disapproval of the remaining amount. If the Director disapproves any revised Payment Request, the Director will provide a written notice of approval or denial to the Owner within ten (10) business days after receipt of the revised Payment Request, which notice shall describe in reasonable detail the reason for the denial, if applicable. The Director shall only be entitled to withhold approval for payment of a Discrete Component (other than the final Discrete Component of any Public Facility) to be owned by the City that is the subject of a Payment Request if (i) the Owner has not provided conditional lien releases for labor and materials provided in connection with such Discrete Components (provided that this basis for disapproval shall not apply if the Owner has provided payment bonds to the City or the applicable Receiving Agency in connection with the Improvement Agreements or has provided bonds protecting the Receiving Agency from mechanics' liens by parties that have not provided lien releases in a form satisfactory to the Director), (ii) the Discrete Component has not been constructed substantially in accordance with the Plans, (iii) the Director disputes the Actual Cost of the Discrete Component stated in the Payment Request or (iv) the Owner is delinquent in paying its special taxes. ""'" ......, The Director shall only be entitled to withhold approval for payment of any Public Facility to be owned by the City (or the final Discrete Component of any such Public Facility) if (i) a notice of completion executed in the form described in California Civil Code Section 3093 has not been recorded for the Public Facility and final conditional lien releases for labor and ~ 3~ ACENDA 'TEM NO. ~I - 45722627.2 1 0 PN1E.lli2-oF5~ - ~ materials provided in connection with such Public Facilities have not been submitted to the Director (provided that this requirement shall not apply if the Owner has provided to the City a payment bond in connection with the hnprovement Agreements or provides a bond protecting the City from mechanics' liens made by parties that have not provided such lien releases in a form acceptable to the Director), (ii) the Public Facility has not been constructed substantially in accordance with the Plans, (iii) the Director disputes the Actual Cost of any Public Facility or Discrete Component stated in the Payment Request or (iv) the Owner is delinquent in paying its special taxes. The City shall only be entitled to withhold payment for any Public Facilities to be owned by a Receiving Agency other than the City if the Owner does not provide the Director with evidence that the Receiving Agency has accepted the Public Facility. Nothing in this Agreement shall be deemed to prohibit the Owner from contesting in good faith the validity or amount of any mechanics' or materialman's lien nor limit the remedies available to the Owner with respect thereto so long as such delay in performance shall not subject the Public Facilities or any Discrete Component thereof to foreclosure, forfeiture or sale. In the event that any such lien is contested, the Owner shall only be required to post or cause the delivery of a bond in an amount equal to the amount in dispute with respect to any such contested lien, so long as such bond is drawn on an obligor and is otherwise in a form acceptable to the Director. /"'" Section 4.6 Payment. Upon approval of the Payment Request (or any portion thereof) by the Director, the Director shall sign the Payment Request and forward the same to the District Representative. Upon receipt of the approved Payment Request, the District Representative shall, within five (5) business days of receipt of the approved Payment Request, cause the same to be paid, to the extent of funds then on deposit in the Acquisition and Construction Fund however, the Purchase Price for any Public Facility shall not be paid earlier than thirty-five (35) days after the recording of a Notice of Completion for such Public Facility. Any approved Payment Request not paid due to an insufficiency of funds in the Acquisition and Construction Fund shall be paid promptly following the deposit into the Acquisition and Construction Fund of additional proceeds of the Bonds, earnings on the Acquisition and Construction Fund or other funds transferred pursuant to the Fiscal Agent Agreement. The Purchase Price paid hereunder for any Public Facility or Discrete Component shall constitute payment in full for such Public Facility or Discrete Component, including, without limitation, payment for all labor, materials, equipment, tools and services used or incorporated in the work, supervision, administration, overhead, expenses and any and all other things required, furnished or incurred for completion of such Public Facility or Discrete Component, as specified in the Plans. Section 4.7 Restrictions on Payments. Notwithstanding any other provisions of this Agreement, the following restrictions shall apply to any payments made to the Owner under Section 4.5 hereof: ,,-.... A. Amounts of Pavrnents. Payments for each Discrete Component or Public Facility will be made only in the amount of the Purchase Price for the respective Discrete AGENDA \TEM NO._ 3~ G:, - PPNEJ1l1- OF:3> 3 -- 11 45722627.2 Component or Public Facility. The City agrees that the Actual Cost of a Discrete Component or Public Facility may fluctuate from the budgeted amounts. The City agrees that the Owner has the latitude to increase or decrease the reimbursement of a Discrete Component or Public Facility, as the Purchase Price is determined. In no case will the total Purchase Price paid exceed the total amount of funds available in the Acquisition and Construction Fund. Nothing herein shall require the City in any event (i) to pay more than the Purchase Price of a Public Facility or Discrete Component; or (ii) to make any payment beyond the available funds in the Acquisition and Construction Fund for such Public Facilities or Discrete Components. The Parties hereto acknowledge and agree that all payments to the Owner for the Purchase Prices of Public Facilities or Discrete Components are intended to be reimbursed to the Owner for services provided or costs incurred by the Owner or moneys already expended or incurred by the Owner to third parties in respect of such Public Facilities and/or Discrete Components. ~ B. FreQuency. No more than one Payment Request shall be submitted in any calendar month although a Payment Request may relate to more than one Public Facility or Discrete Component. Section 4.8 Defective or Nonconforming Work. If any of the work done or materials furnished for a Public Facility or Discrete Component are found by the Director to be defective or not in substantial accordance with the applicable Plans: (i) if such finding is made prior to payment for the Purchase Price of such Public Facility or Discrete Component hereunder, the Director may withhold payment therefor until such defect or nonconformance is corrected, or (ii) if such finding is made after payment of the Purchase Price of such Public """ Facility or Discrete Component, the Receiving Agency and the Owner shall act in accordance with the applicable Improvement Agreement, if any. Section 4.9 Modification of Discrete Components. Upon written request of the Owner, the Director shall consider modification of the description of any Discrete Component. Any such modification shall be subject to the written approval of the Director, which approval the Director may withhold in his sole discretion, and shall not diminish the overall Public Facilities to be provided pursuant to the Improvement Agreements. Section 4.10 Funding of Fees. The City may requisition from the City Facilities Account or the Non-City Facilities Account, in the manner specified in the Fiscal Agent Agreement and this Agreement, an amount which is sufficient to pay all or a portion of the Fees payable by the Owner or its successors and assigns upon receipt of a Payment Request in the form attached hereto as Exhibit B-2. To the extent Fees payable by the Owner or its successors and assigns constitute City Fees, the City may requisition from the City Facilities Account, or if such account is not established from the Acquisition and Construction Fund, an amount which is sufficient to such Fees without having first received a Payment Request in the form attached hereto as Exhibit B-2. The City shall provide a credit against the applicable Fees to the Owner or its successors and assigns equal to the amount of the moneys disbursed pursuant to the Payment Request. In the event the Owner is required to pay Fees to the City prior to the issuance and sale of the Bonds, the Owner or its successors and assigns shall deposit with the City the amount due in immediately available funds (a "Deposit") and such Deposit shall be reimbursed 45722627.2 12 """ ACENDA ITEM NO. ~ PAGE 1~3o~ -- .."..~-- .- /"'" to the Owner when funds subsequently deposited in the City Facilities Account are disbursed to the City in an equal amount for the payment of such Fees. In addition, in the event that the amount in the City Facilities Account is insufficient to pay the total amount of Fees requested in a Payment Request, the Owner or its successors and assigns shall make a Deposit equal to the amount due and such Deposit shall be reimbursed to the Owner when funds subsequently deposited in the City Facilities Account are disbursed to the City in an equal amount for the payment of such Fees. In the event Bonds are not issued within twelve (12) months of the date of any such Deposit, such Deposit may at the written direction of the Director be applied to pay Fees and shall no longer be reflected as a Deposit on the accounts ofthe City. Some of the Public Facilities anticipated to be constructed are included in the City development impact fee or other financing programs. The Owner shall be entitled to full credit against all applicable Fees imposed or collected by the City based upon the Owner's construction of such Public Facilities whether or not the Purchase Price of such Public Facilities is funded out of the Acquisition and Construction Fund. EVMWD Fee may be financed with the disbursement of funds from the applicable account of the Acquisition and Construction Fund upon the City's receipt of a Payment Request in the form attached hereto as Exhibit B-2. ARTICLE V OWNERSHIP AND TRANSFER OF PUBLIC FAcILITIES ,,-- Section 5.1 Conveyance of Land and Easements for Receiving Agency. Acceptable Title to all property on, in or over which each Public Facility to be acquired by the Receiving Agency will be located, shall be conveyed to the Receiving Agency by way of grant deed, quitclaim, or dedication or irrevocable offer of dedication of such property, or easement thereon, in accordance with the applicable Improvement Agreement, if any. The Owner agrees to provide the Receiving Agency such documents as are required to obtain Acceptable Title with respect to these Public Facilities funded pursuant to this Agreement. Completion of the transfer of title to land shall be accomplished prior to the payment of the Purchase Price for a Public Facility (or the last Discrete Component thereof) and shall be evidenced by recordation of the acceptance thereof by the Receiving Agency. Section 5.2 Evidence and Insurance. Within fifteen (15) calendar days following the request ofthe City, the Owner shall furnish to the City a preliminary title report for such land not previously dedicated or otherwise conveyed to the City, for review and approval prior to the transfer of Acceptable Title to a Public Facility to the City. Within ten (10) calendar days thereafter, the Director shall approve the preliminary title report unless it reveals a matter which, in the judgment of the Director, could materially affect the City's use of any part of the property or easement covered by the preliminary title report for the purpose for which such property or easement is being conveyed. In the event the Director does not approve the preliminary title report, the City shall not be obligated to accept title to such Public Facility or pay the Purchase Price for such Public Facility (or the last Discrete Component thereof) until such objections to ,-, title have been cured to the satisfaction of the Director. The failure of the Director to provide written approval to the Owner shall be deemed to be a disapproval. 45722627.2 13 3(). .. "GEN~::;;q _Of3%- Section 5.3 Facilities Constructed on Private Lands. If any Public Facilities to be acquired are located on privately-owned land, the owner thereof shall retain title to the land and the completed Public Facilities until acquisition of the Public Facilities under Article V hereof. Pending the completion of such transfer and where the Owner has received any payment for any such Public Facility or a Discrete Component thereof, the Owner shall be responsible for maintaining the land and any Public Facilities or Discrete Components in good and safe condition. Notwithstanding the foregoing, subject to the terms of the applicable Improvement Agreement, upon written request of the Receiving Agency before payment for the last Discrete Component of such a Public Facility, the Owner shall conveyor cause to be conveyed Acceptable Title thereto in the manner described in Section 5.1 hereof. ~ Section 5.4 Facilities Constructed on City Land. If the Public Facilities to be acquired are on land owned by the City, the City hereby grants to the Owner a license to enter upon such land for purposes related to the construction (and maintenance pending acquisition) of the Public Facilities. The provisions for inspection and acceptance of such Public Facilities otherwise provided herein shall apply. Section 5.5 Maintenance and Warranties. The Owner shall maintain each Discrete Component of any Public Facility constructed by the Owner in good and safe condition until the Acceptance Date of the Public Facility of which such Discrete Component is a part. Prior to the Acceptance Date, the Owner shall be responsible for performing any required maintenance on any completed Discrete Component or Public Facility constructed by the Owner. On or before the Acceptance Date of the Public Facility, the Owner shall assign to the Receiving Agency, to the extent assignable, all of the Owner's rights in any warranties, guarantees, maintenance obligations or other evidence of contingent obligations of third persons with respect to such Public Facility. After the Acceptance Date, the Owner shall not be responsible for maintaining such Public Facility. Any warranties, guarantees or other evidences of contingent obligations of third parties with respect to the Public Facilities to be acquired by the City shall be delivered to the Director as part of the transfer of title. ~ ARTICLE VI INSURANCE Section 6.1 Requirements. The Owner shall, at all times prior to the final Acceptance Date of all Public Facilities, maintain, deliver to the City evidence of and keep in full force and effect, or cause to be maintained, delivered to the City evidence of and kept in full force and effect, the insurance policies required pursuant to the Improvement Agreements. All of the Owner's insurance policies shall contain an endorsement providing that written notice shall be given to the City at least 30 calendar days prior to termination, cancellation, or reduction of coverage in the policy and an endorsement extending coverage to the City and its agents as an additional insured, in the same manner as the named insured as respects liabilities arising out of the performance of any work related to the Public Facilities. Such insurance shall be primary insurance as respects the interest of the City, and any other insurance maintained by the City shall be excess and not contributing insurance with the insurance required hereunder. ......., 45722627.2 14 ;3;) AGENDA ITEM NO. : . PACE J J () OF33b ,.--... The foregoing requirements as to the insurance coverage to be maintained by the Owner are not intended to and shall not in any manner limit or qualify the liabilities and obligations assumed by the Owner under this Agreement. Section 6.2 Evidence of Insurance. The Owner shall furnish to the City, from time to time upon request, a certificate of insurance regarding each insurance policy required to be maintained by the Owner hereunder. ARTICLE VII REPRESENTATIONS, WARRANTIES AND COVENANTS Section 7.1 Covenants and Warranties of the Owner. The Owner represents and warrants for the benefit of the City as follows: A. Organization. , a is in compliance in all material respects with the laws of the State of California, and has the limited liability company power and authority to own its property and assets and to carry on its business as now being conducted and as now contemplated. B. Authority. The Owner has the power and authority to enter into this Agreement, and has taken all action necessary to cause this Agreement to be executed and delivered, and this Agreement has been duly and validly executed and delivered by the Owner. '" C. Binding Obligation. This Agreement is a legal, valid and binding obligation of the Owner, enforceable against the Owner in accordance with its terms. D. Financial Records. Until one year after the final acceptance of all the Public Facilities, the Owner covenants to maintain proper books of record and account for the construction of the Public Facilities and all costs related thereto. Such accounting books shall be maintained in accordance with generally accepted accounting principles, and shall be available for inspection by the City or its agent at any reasonable time during regular business hours on reasonable notice. E. Plans. The Owner represents that it has obtained or will obtain approval of the Plans for the Public Facilities constructed by the Owner from all appropriate departments of the City and from any other public entity or public utility from which. such approval must be obtained. The Owner further agrees that the Public Facilities constructed by the Owner have been or will be constructed in compliance with such approved Plans and any supplemental agreements (change orders) thereto, as approved in the same manner. !""- Section 7.2 Indemnification and Hold Harmless. The Owner shall assume the defense of, indemnify, and hold harmless the City, its officers, directors, employees and agents and each of them, from and against all actions, damages, claims, losses or expenses of every type and description to which they may be subjected or put, by reason of, or resulting from the Owner's non-payment under contracts between the Owner and its consultants, engineers, advisors, contractors, subcontractors and suppliers in the provision of the Public Facilities, or any claims of persons employed by the Owner or its agents to construct the Public Facilities. 45722627.2 15 3~ AOENDA1TEMNO.- 3~ pNjEj 1/ _OF Notwithstanding the foregoing, no indemnification is given hereunder for any action, damage, claim, loss or expense directly attributable to the intentional acts or gross negligence of the City, or its officers, directors, employees or agents hereunder or otherwise with respect to the Public Facilities or payment therefor. ~ No provision of this Agreement shall in any way limit the Owner's responsibility for payment of damages resulting from the operations of the Owner and its agents, employees or contractors. ARTICLE VIII DEFAULT AND REMEDIES Section 8.1 Default Remedies. Failure by either Party to perform any action or covenant required by this Agreement within the time periods provided herein following Notice and failure to cure as described hereafter, constitutes a "Default" under this Agreement. A Party claiming a Default shall give written Notice of Default to the other Party specifying such Default. Except as otherwise expressly provided in this Agreement, the claimant shall not institute any proceeding against any other Party, and the other Party shall not be in Default if such party within thirty (30) days from receipt of such Notice immediately, with due diligence, commences to cure, correct or remedy such failure or delay and shall complete such cure, correction or remedy with diligence. Section 8.2 Institution of Legal Actions. The Parties shall be entitled to seek any remedy available at law and in equity for the other Party's Default. All legal actions must be ......." instituted in the Superior Court of the County of Riverside, State of California, or in the United States District Court for District of California in which Riverside County is located. Section 8.3 Acceptance of Service of Process. In the event that any legal action is commenced by the Owner against the City, service of process on the City shall be made by personal service upon the City Clerk or in such other manner as may be provided by law. In the event that any legal action is commenced by the City against the Owner, service of process on the Owner shall be made in such manner as may be provided by law. Section 8.4 Rights and Remedies Are Cumulative. Except as otherwise expressly stated in this Agreement, the rights and remedies of the Parties are cumulative, and the exercise by either Party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same Default or any other Default by the other Party. Section 8.5 Inaction Not a Waiver of Default. Any failures or delays by either Party in asserting any of its rights and remedies as to any Default shall not operate as a waiver of any Default or of any such rights or remedies, or deprive either such Party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. Section 8.6 Applicable Law. The laws of the State of California shall govern the interpretation and enforcement of this Agreement. ......." 45722627.2 16 "GEN~::jtz; OF3~-:zt;. ,-.. Section 8.7 Attorneys' Fees. In any action between the Parties to interpret, enforce, reform, modify, rescind or otherwise in connection with any of the terms or provisions of this Agreement, the prevailing party in the action or other proceeding shall be entitled, in addition to damages, injunctive relief or any other relief to which it might be entitled, reasonable costs and expenses including, without limitation, litigation costs, expert witness fees and reasonable attorneys' fees. ARTICLE IX GENERAL Section 9.1 Mutual Consent. This Agreement may be terminated by the mutual written consent of the City and the Owner, and all or any portion of the moneys in the Acquisition and Construction Fund may be used to pay for same, and the Owner shall have no claim or right to any further payments for the Purchase Price of Public Facilities or Discrete Components hereunder, except as otherwise may be provided in such written consent. Section 9.2 Audit. The City shall have the right, during normal business hours and upon the giving of five (5) business days' prior written notice to the Owner, to review all books and records of the Owner pertaining to costs and expenses incurred by the Owner in relation to any of the Public Facilities, and any bids taken or received for the construction thereof or materials therefor. ,,-.. Section 9.3 Notices, Demands and Communications Between the Parties. Any notices, requests, demands, documents, approvals or disapprovals given or sent under this Agreement from one Party to another (collectively, "Notices") may be personally delivered, transmitted by facsimile (FAX) transmission, deposited with the United States Postal Service for mailing, postage prepaid, or sent by overnight delivery to the address of the other Party as stated in this Section, and shall be deemed to have been given or sent at the time of personal delivery or FAX transmission or, if mailed, on the third day following the date of deposit in the course of transmission with the United States Postal Service or if sent by overnight delivery, on the day following its deposit with the overnight carrier. Notices shall be sent as follows: If to the City: City of Lake Elsinore Attn: City Manager 130 S. Main Street Lake Elsinore, CA 92530 Facsimile No. (909) 674-2392 With copies to: ,-.. 45722627.2 17 ~GENOA m:M NO.3;).. . -' f~jJ?OF~33.0~ Van Blarcom, Leibold, McClendon & Mann, P.C. Attn: Barbara Zeid Leibold, City Attorney 23422 Mill Creek Drive, Suite 105 Laguna Hills, CA 92653 Facsimile No. (949) 457-6305 ~ If to the Owner: Western Pacific Housing, Inc. Attn: Facsimile No. <-> Section 9.4 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the successors and assigns of the Parties hereto. The Owner may assign its rights pursuant to this Agreement to a purchaser (an "Assignee") of a portion or portions of the property which is/are located within the District (the "Property"). The Owner may assign to the Assignee the responsibility for the construction of all or a portion of the Public Facilities or Discrete Components thereof which remain to be constructed and the right to receive payment of the Purchase Price for Public Facilities and Discrete Components thereof previously completed . by the Owner. The Owner and Assignee shall provide to the City such reasonable proof as the City may require that such Assignee is the purchaser of the Property within the District. Such Assignee shall, as a condition to receiving payment of a Purchase Price, enter into an assignment and assumption agreement with the City and the Owner, in the form attached hereto as Exhibit C, whereby such Assignee agrees, except as may be otherwise specifically provided therein, to assume the obligations of the Owner pursuant to this Agreement with respect to such Public Facilities, or Discrete Components thereof, and to be bound thereby and whereby the Owner shall be released with respect to such obligations. In addition, the Owner may assign to an Assignee, without the City's consent or the Assignee's execution of an assignment and assumption agreement, the rights and obligations under this Agreement relating to the funding of Fees, provided that the Owner gives the City written notice of the identity of the Assignee, the specific Fees covered by the assignment and the Property to be owned by such Assignee. '" Section 9.5 Relationship Between the City and the Owner. It is hereby acknowledged by the Owner that the relationship between the City and the Owner is not that of a partnership or joint venture and that the City and the Owner shall not be deemed or construed for any purpose to be the agent of the other. Accordingly, except as expressly provided herein or in the Attachments hereto, the City shall have no rights, powers, duties or obligations with respect to the development, operation, maintenance or management of the Project. The Owner agrees to indemnify, hold harmless and defend the City from any claim made against the City arising from a claimed relationship of partnership or joint venture between the City and the Owner with respect to the development, operation, maintenance or management of the property within the District. '" 45722627.2 18 3::2 AGENDA ITEM NO. PACE J / tJ- OF 3~ -- ~ Section 9.6 No Third Party Rights. The Parties intend that no rights or remedies be granted to any third party as a beneficiary of this Agreement or of any covenant, duty, obligation or undertaking established herein. Section 9.7 Counterparts. This Agreement may be signed in multiple counterparts which, when signed by all Parties, shall constitute a binding agreement. This Agreement is executed in five (5) originals, each of which is deemed to be an original. Section 9.8 Other Agreements. The obligations of the Owner hereunder shall be that of a Party hereto. Nothing herein shall be construed as affecting the City's or the Owner's rights, or duties to perform their respective obligations, under Improvement Agreements, other agreements, use regulations or subdivision requirements relating to the development of the property within the District. This Agreement shall not confer any additional rights, or waive any rights given, by either Party hereto under any development or other agreement to which they are a party. Section 9.9 Titles and Captions. Titles and captions are for convenience of reference only and do not define, describe or limit the scope or the intent of this Agreement or of any of its terms. References to section numbers are to sections in this Agreement, unless expressly stated otherwise. Section 9.10 Interpretation. As used in this Agreement, masculine, feminine or neuter gender and the singular or plural number shall each be deemed to include the others where and ~ when the context so dictates. The word "including" shall be construed as if followed by the words "without limitation." This Agreement shall be interpreted as though prepared jointly by both Parties. Section 9.11 No Waiver. A waiver by either Party of a breach of any of the covenants, conditions or agreements under this Agreement to be performed by the other Party shall not be construed as a waiver of any succeeding breach of the same or other covenants, agreements, restrictions or conditions ofthis Agreement. Section 9.12 Modifications. Any alteration, change or modification of or to this Agreement, in order to become effective, shall be made in writing and in each instance signed on behalf of each Party. Section 9.13 Severability. If any term, provISIOn, condition or covenant of this Agreement or its application to any party or circumstances shall be held, to any extent, invalid or unenforceable, the remainder of this Agreement, or the application of the term, provision, condition or covenant to persons or circumstances other than those as to whom or which it is held invalid or unenforceable, shall not be affected, and shall be valid and enforceable to the fullest extent permitted by law. Section 9.14 Computation of Time. The time in which any act is to be done under this Agreement is computed by excluding the first day (such as the day escrow opens), and including the last day, unless the last day is a holiday or Saturday or Sunday, and then that day is also excluded. The term "holiday" shall mean all holidays as specified in Section 6700 and 6701 of ,.-... 45722627.2 19 AOENDA ITEM NO. .3 ~ ""'" , PAr-k.1.l.5--~OF ?'3~.... the California Government Code. If any act is to be done by a particular time during a day, that time shall be Pacific Time Zone time. ....., Section 9.15 Legal Advice. Each Party represents and warrants to the other the following: it has carefully read this Agreement, and in signing this Agreement it does so with full knowledge of any right which it may have; it has received independent legal advice from its respective legal counsel as to the matter set forth in this Agreement, or have knowingly chosen not to consult legal counsel as to the matters set forth in this Agreement; and, it has freely signed this Agreement without any reliance upon any agreement, promise, statement or representation by or on behalf of the other Party, or its respective agents, employees, or attorneys, except as specifically set forth in this Agreement, and without duress or coercion, whether economic or otherwise. Section 9.16 Cooperation. Each Party agrees to cooperate with the other in this transaction and, in that regard, to sign any and all documents which may be reasonably necessary, helpful, or appropriate to carry out the purposes and intent of this Agreement including, but not limited to, releases or additional agreements. Section 9.17 Conflicts of Interest. No member, official or employee of the City shall have any personal interest, direct or indirect, in this Agreement, nor shall any such member, official or employee participate in any decision relating to the Agreement which affects his personal interests or the interests of any corporation, partnership or association in which he is directly or indirectly interested. Section 9.18 Non-Liability of Officials and Employees of the City. No member, ....., official or employee of the City shall be person'ally liable to the Owner, or any successor in interest, in the event of any Default or breach by the City or for any amount which may become due to the Owner or its successors, or on any obligations under the terms of this Agreement. The Owner hereby waives and releases any claim it may have against the members, officials or employees of the City with respect to any Default or breach by the City under this Agreement or for any amount under this Agreement which may become due to the Owner or its successors, or on any obligations under the terms of this Agreement. Section 9.19 Notice of Special Tax. The Owner, or the successor or assigns of the Owner, shall prepare and provide written notice to all potential purchasers or lessees, if the special taxes are to be passed through to such lessees, of lots in the form prescribed by California Government Code Section 53341.5 advising the potential owner or lessee, as applicable, of the fact of the proposed or confirmed District, with said document being executed by the potential purchaser or lessee, as applicable. Such notice shall be provided to the potential purchaser or lessee, as applicable, before the potential purchaser becomes contractually committed to purchase the lot or the lessee enters into the lease of the lot so that the potential purchaser or lessee, as applicable, may knowingly consider the impact of the special tax in the decision to purchase or lease the lot. ....., 45722627.2 20 3~ AGENDA lTEM NO. ~~-= PAGEJ1k-OF- ' ".-. IN WITNESS WHEREOF, the Parties have executed this Agreement as of the respective dates set forth below. "CITY" CITY OF LAKE ELSINORE, a municipal corporation Dated: , 2006 By: Mayor ATTEST: FREDERICK RAY, CITY CLERK By: City Clerk APPROVED AS TO FORM: ,-.... VAN BLARCOM, LEIBOLD, McCLENDON & MANN, P.C. City Attorney By: Barbara Leibold "OWNER" WESTERN PACIFIC HOUSING, INC., a California corporation Dated: , 2006 By: Its: ,-.... 45722627.2 21 AGENDA ITEM NO. 3 d- PACE JJ1 oFm3~~ EXHIBIT A-I ELIGIBLE PUBLIC FACILITIES LIST City Facilities And Fees 45722627.2 Al-I ....", ....", ....", ACENDA ITEM NO. 3;;2 PACE II r OF 3~b- ,--.. ,--.. ,--.. 45722627.2 [NONE] EXHIBIT A-2 ELIGIBLE PRE-CFD FORMATION CAPITAL FACILITIES A2-1 32 AGENDA ITEM NO. OF ??-'a. PACE II q - ~ EXHIBIT B-1 PAYMENT REQUEST NO._ ......, The undersigned (the "Owner") hereby requests payment in the total amount of $ for the Public Facilities or Discrete Components (each as defined in the Funding, Construction and Acquisition Agreement, dated as of , 2006 (the "Agreement"), by and between the City of Lake Elsinore (the "City") and , [type of entity], and described in Exhibit A-lIA-2 to that Agreement), all as more fully described in Attachment 1 hereto. In connection with this Payment Request, the undersigned hereby represents and warrants to the City and the District as follows (all capitalized terms used but not otherwise defined herein shall have the respective meanings ascribed to such terms in the Agreement): 1. He/She is a duly authorized officer of the Owner, qualified to execute this Payment Request for payment on behalf of the Owner and is knowledgeable as to the matters set forth herein. 2. To the extent that this Payment Request is with respect to a completed Public Facility or Discrete Component, the Owner has submitted or submits herewith to the City, if applicable, as-built drawings or similar plans and specifications for the items to be paid for as listed in Attachment 1 hereto with respect to any such Public Facility or discrete Component, and such drawings or plans and specifications, as applicable, are true, correct and complete. ......, 3. All costs of the Public Facilities or Discrete Component for which payment is requested hereby are Actual Costs (as defined in the Agreement referenced above) and have not been inflated in any respect. The items for which payment is requested have not been the subject of any prior payment request submitted to the City. 4. Supporting documentation (such as third party invoices, lien releases and cancelled checks) is attached with respect to each cost for which payment is requested. 5. The Public Facilities or Discrete Components for which payment is requested was constructed in accordance with the requirements of the Agreement and in compliance with any applicable prevailing wage requirements. 6. The Owner is in compliance with the terms and provisions of the Agreement and no portion of the amount being requested to be paid was previously paid. 7. The Purchase Price for the Public Facilities or Discrete Components (a detailed calculation of which is shown in Attachment 1 hereto for each Public Facility or Discrete Component) has been calculated in conformance with the terms of Section 4.4 ofthe Agreement. 45722627.2 Bl-l ......, J\OENOA ITEM NO. ....3 ~ - PACejZD _9F~-~ ~ ~ ~ I hereby declare under penalty of perjury that the above representations and warranties are true and correct. OWNER: CITY: Payment Request Approved for Submission to Fiscal Agent By: Authorized Representative of Owner By: Director of Community Development Date: Amount Approved: $ Date: 45722627.2 BI-2 8;;' AGENDA ITEM NO. PACE 1 ~ I OF ~ 3&--.. ATTACHMENT 1 SUMMARY OF PUBLIC FACILITIES AND DISCRETE COMPONENTS TO BE ACQUIRED AS PART OF PAYMENT REQUEST NO. _ .....", Ref. No. Public Facility/Discrete Component Actual Cost Disbursement Requested [List here all Public Facilities or Discrete Components for which payment is requested, and attach support documentation] "" "'" 45722627.2 BI-3 ~GEN~r;::; ;;~,: "..... EXHIBIT B-2 PAYMENT REQUEST NO. The undersigned (the "Owner") hereby requests payment in the total amount of $ for the Fees (as defined in the Funding, Construction and Acquisition Agreement, dated as of , 2006 (the "Agreement"), by and between the City of Lake Elsinore (the "City") and , [type of entity], and described in Exhibit A-lIA-2 to that Agreement), all as more fully described in Attachment 1 hereto. In connection with this Payment Request, the undersigned hereby represents and warrants to the City and the District as follows (all capitalized terms used but not otherwise defined herein shall have the respective meanings ascribed to such terms in the Agreement): 1. He/She is a duly authorized officer of the Owner, qualified to execute this Payment Request for payment on behalf of the Owner and is knowledgeable as to the matters set forth herein. 2. The items for which payment is requested have not been the subject of any prior payment request submitted to the City. 3. The Owner is in compliance with the terms and provisions of the Agreement and no portion of the amount being requested to be paid was previously paid. r' I hereby declare under penalty of perjury that the above representations and warranties are true and correct. OWNER: CITY: Payment Request Approved for Submission to Fiscal Agent By: AuthQrized Representative of Owner By: Director of Community Development Date: Amount Approved: $ Date: ,,- 45722627.2 B2-1 ~CENDA ITEM NO. 3 ;l . PACE JZ?OF~ 45722627.2 ATTACHMENT 1 SUMMARY OF PUBLIC FACILITIES AND DISCRETE COMPONENTS TO BE ACQUIRED AS PART OF PAYMENT REQUEST NO. _ ~ Fee Category No. and Description of Lots/DUs for Amount ReQuested which Fees ReQuested '-"" '-" B2-2 $if ~GEN~::; ik:Or ~;3&: ,-.. EXHIBIT C FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT Pursuant to a Funding, Construction and Acquisition Agreement dated as of 1, 200 (the "Agreement") by and between the City of Lake Elsinore ("City") and , [type of entity] (the "Owner"), which Agreement is hereby incorporated herein by this reference, and for good and valuable consideration, receipt of which is hereby acknowledged, the undersigned agree as follows: 1. The assignment and assumption provided for under this Assignment and Assumption Agreement ("Assignment") is made together with the sale, transfer or assignment of all or a part of the property subject to the Agreement. The property sold, transferred or assigned together with this Assignment is included within the District and described in "Attachment 1" attached hereto and incorporated herein by this reference (the "Subject Property"). 2. , as the assignor hereof (the "Assignor") hereby grants, sells, transfers, conveys assigns and delegates to ("Assignee"), all of Assignor's rights, title, interest, benefits, privileges, duties and obligations arising under or from the Agreement with respect to the Subject Property and the Public Facilities or Discrete Components authorized to be funded except for the following: 3. Assignee hereby accepts the foregoing assignment and unconditionally assumes ,..... and agrees to perform all of the duties and obligations of Assignor arising under or from the Agreement as owner of the Subject Property and the Assignor shall be released with respect to such obligations. 4. The sale, transfer or assignment of the Subject Property and the assignment and assumption provided for under this Assignment are the subject of additional agreements between Assignor and Assignee. Notwithstanding any term, condition or provision of such additional agreements, the rights of the City arising under or from the Agreement and this Assignment shall not be affected, diminished or defeated in any way, except upon the express written agreement of the City. 5. Assignor and Assignee execute this Assignment pursuant to Section 9.4 of the Agreement, and the City evidences its consent to this Assignment by signing below. /""' 45722627.2 C-I ACENDA ITEM NO. 2>.;). ~ . PACE J Zb'OF ~'3~ IN WITNESS WHEREOF, the parties have executed this Assignment on 45722627.2 '-' ASSIGNOR: By: Name: Title: ASSIGNEE: By: Name: Title: CITY: '-' CITY OF LAKE ELSINORE By: Its: City Manager C-2 3;;''''''' .{\CENDA ITEM NO. Z> 5~ 'PACE L 2{, OF_. "....... /"'" /'"' ATTACHMENT 1 DESCRIPTION OF SUBJECT PROPERTY 45722627.2 C-3 ACENDA ITEM NO. .3 :L PAGE 17.'7 OF ~~ EXHIBIT "D" DESIGN, BID AND CONTRACT REQUIREMENTS FOR CITY IMPROVEMENTS .~ Desh!D Phase A. Only design costs directly related to the Public Facility to be acquired are eligible for inclusion. BiddiDI! Phase A. Bidding Documents. Unless otherwise noted, the bidding documents shall conform to the following minimum requirements: 1. Unless impractical due to the nature of the Public Facility, the bid proposal shall be unit priced rather than lump sum or time and materials. A.C. pavement, base and sub-base shall be bid on a square foot per inch thickness basis. 2. It is recommended that the bidding documents require the bidder/contractor to provide the following bonds: a. Bid Bond - 10% of the amount of the bid. 3. The bidding documents shall require the successful bidder to provide evidence of ....".; comprehensive public liability insurance in the amount of at least $1,000,000 prior to the award of the contract. 4. contractor. The bidding documents shall provide for monthly progress payments to the 5. The contractor shall be required to pay prevailing wages. 6. The bidding documents must clearly state the time, date, and place where bids are to be submitted and opened. 7. The bidding documents shall clearly state the amount of time to complete the work. The time allowed must be reasonable for the amount of work. Accelerated construction time allowances must be supplementally bid, and are not eligible for public finance unless previously approved by the City. B. Owner shall keep a log of all persons obtaining bidding documents, and their mailing address. C. Addenda shall be mailed by first class mail to all bidding document holders and the Director. C-4 AGENDA ITEM NO. .3 J- ~ PAD! L?gOf 3~ ~-'. -10 ...........0> . .. ..~". ...,-_...~- /"'" D. Submitted bids shall be in sealed envelopes. E. Bids shall not be accepted after the stated time for submission. F. Bid opening shall be conducted by the Owner at the Owner's place of business or other site mutually acceptable to the Owner and Director. G. Sealed bids shall be opened and read aloud immediately following the submission time. A City representative shall be invited to attend the bid opening. H. Conditioned bids, unless the bid proposal lists them for all to bid on, shall not be accepted. I. The arithmetic of the two lowest bid proposals received shall immediately be checked for errors. J. A tabulation of all bids received shall be provided to the Director. K. Award shall be made to the lowest responsible bidder within a reasonable period of time. L. A preconstruction meeting shall be held with the contractor prior to beginning the work. A City representative shall be invited to attend the meeting. /"'" M. The Notice to Proceed shall be issued within a reasonable period of time following the contract execution. Construction Phase A. The Director shall be provided a copy ofthe construction schedule. B. Owner shall require the contractor to conduct weekly construction status meetings to which a City representative shall be invited. C. Any additional costs incurred for the benefit of the Owner, such as accelerating the construction schedule, shall not be eligible for public financing unless previously approved by the City. D. Any additional construction costs incurred due solely to delays caused by the Owner shall not be eligible for public financing. E. All contracts and construction related records shall be available to the City as and when required for the final determination of eligible costs for the public financing. General ..--. C-5 AGENDA ITEM NO. 3;), PACE/Zq OF~ The above rules shall be applied to all City Facilities proposed to be acquired through the Community Facilities District. Any deviation from the rules must be approved by the Director. ......, ......, C-6 ......, 3d- !\GENOA ITEM NO. PACE/3D OF~ REVISED DRAFT DATED 3/21/06 ~ NEW ISSUE-BOOK ENTRY ONLY NOT RATED (See "CONCLUDING INFORMATION - No Rating on tbe Bonds" berein) In the opinion of Fulbright & Jaworski L.L.P., Los Angeles, California, Bond Counsel, under existing law interest on the Bonds is exempt from personal income taxes of the State of California and, assuming compliance with the tax covenants described herein, interest on the Bonds is excluded pursuant to section I03(a) of the Internal Revenue Code of 1986 (the "Code 'J from the gross income of the owners thereof for federal income tax purposes and is not an item of preference under section 57(a) of the Code for purposes of the federal alternative minimum tax. See, however, "LEGAL MATTERS - Tax Exemption" herein regarding certain other tax considerations. COUNTY OF RIVERSIDE STATE OF CALIFORNIA $3,365,000* CITY OF LAKE ELSINORE COMMUNITY FACILITES DISTRICT NO. 2005-6 (CITY CENTER TOWNHOMES) SPECIAL TAX BONDS, 2006 SERIES A Dated: Date of Delivery Due: September 1, As Sbown Below Tbe cover page contains certain information for quick reference only. It is not a summary of tbe issue. Potential investors must read tbe entire Official Statement to obtain information essential to tbe making of an informed investment decision. Investment in tbe Bonds involves risks. See "BONDOWNERS' RISKS" berein for a discussion of special risk factors tbat sbould be considered in evaluating tbe investment quality oftbe Bonds. Interest on the Bonds is payable semiannually on March 1 and September 1 of each year, commencing September 1, 2006, until maturity or earlier redemption (see "THE BONDS - General Provisions" and "THE BONDS - Redemptio~" herein). The information contained within this Official Statement was prepared under the direction of the City by the following fIrm serving as Financing Consultant to the City. Rod Gunn Associates, Inc. ~ MATURITY SCHEDULE $ SERIAL BONDS Maturity Date Seotember 1 ~incipal ~1nount* Interest Rate Reoffering Rate Maturity Date Seotember 1 Principal Amount* Interest Rate Reoffering Rate 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 * _% Term Bond due September 1, 2026, Price_% $ $ * _ % Term Bond due September 1, 2036, Price _ % The Bonds will be issued under the Mello-Roos Community Facilities Act of 1982, as amended (Section 53311 et seq. of the Government Code of the State of California). Repayment of the Bonds will be from Special Taxes (as defIned herein) to be levied within City of Lake Elsinore Community Facilities District No. 2005-6 (City Center Townhomes) and certain other funds held under the Fiscal Agent Agreement, as described herein (see "SOURCES OF PAYMENT FOR THE BONDS" and "BONDOWNERS' RISKS" herein). It is anticipated that the Bonds, in book-entry form, will be available for delivery through the facilities of The Depository Trust Company on or about April 20, 2006 (see "THE BONDS - General Provisions - Book-Entry Only System" herein). The date of the Official Statement 2006. * Preliminary, subject to change. ~ SOUTHWEST SECURITIES 3.)- AGSlDA\1EMNO.- .3~L: PAceJ3l-0F CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2005-6 (CITY CENTER TOWNHOMES) CITY COUNCIL Robert Magee, Mayor Robert Schiffner, Mayor Pro Tem Genie Kelley, Council Member Thomas Buckley, Council Member Daryl Hickman, Council Member "'" CITY STAFF Robert Brady, City Manager Matt N. Pressey, Director of Administrative Services Frederick Ray, City Clerk PROFESSIONAL SERVICES Bond Counsel and Disclosure Counsel Fulbright & Jaworski L.L.P. Los Angeles, California City Attorney Van Blarcom, Leibold, McClendon & Mann, P.C. Laguna Hills, California Financing Consultant Rod Gunn Associates, Inc. Huntington Beach, California Fiscal Agent Union Bank of California, N.A. Los Angeles, California Underwriter Southwest Securities, Inc. Newport Beach, California Underwriter's Counsel McFarlin & Anderson LLP Lake Forest, California Special Tax Consultant Harris & Associates Irvine, California Appraiser Harris Realty Appraisal Newport Beach, California Market Absorption Consultant Empire Economics, Inc. Capistrano Beach, California ~ FOR ADDITIONAL INFORMATION Matt Pressey, City of Lake Elsinore (951) 674-3124 Rod GunnAssociates, Inc. (714) 841-3993 Southwest Securities, Inc. (949) 717-2000 .\ ii b d- ~"'" IIIEHOA f\'9A NO.~ ...._ PAOE J '31... '~. 33'.... TABLE OF CONTENTS INTRODUCTORY STATEMENT ...... ...................1 Property Controlled by Federal Deposit The City and the District............................................ 1 Insurance Corporation and other Federal Security and Sources of Repayment ..........................2 Agencies ...............................................................31 Purpose ......................................................................3 Limitations on Remedies .........................................32 The Bonds..................................................................3 Right to Vote on Taxes Act ...................................... 32 Legal Matters.............................................................4 Ballot Initiatives and Legislative Measures.............33 Professional Services .................................................4 Early Bond Redemption ..........................................33 Offering of the Bonds ................................................5 Loss of Tax Exemption............................................33 Information Concerning this Official Statement........6 IRS Audits ...............................................................34 Secondary Market ................................ .... ........ ........34 "...... . SELECTED ESSENTIAL FACTS ............................ 8 ESTIMATED SOURCES AND USES OF FUNDS ...................... ..............................................1 0 Investment of Funds ................................................10 THE BONDS .............................................................11 General Provisions ...................................................11 .Redemption............................... .... ....... ........... ....... .14 Scheduled Debt Service on the Bonds.....................16 ~. SOURCES OF PAYMENT FOR THE BONDS.....18 GeneraL.................................... .................. .............18 Special Taxes ...........................................................18 Reserve Account ......................................................18 Capitalized Interest ..................................................19 Covenant for Superior Court Foreclosure ................19 Prepayment of Special Tax ......................................20 Special Taxes Are Not Within Teeter Plan ...............20 BO NDO WNERS' RISKS .........................................21 GeneraL............. .......... ............................................21 Limited Obligation..................... ........................... ...21 Insufficiency of Special Taxes .................................21 Concentration of Ownership ....................................22 No Personal Liability for Special Taxes...................22 Foreclosure and Sale Proceedings ...........................22 Land Values .............................................................23 Value to Lien Ratio ..................................................24 The Progress of Land Development; Risks of Real Estate Secured Investments ..........................24 Geologic, Topographic and Climatic Conditions.....25 Endangered and Threatened Species........................25 Earthquakes ........................ ........................ .............26 Legal Requirements .................................................26 Other Possible Claims Upon the Values of an Assessed Parcel....... ..............................................26 Bankruptcy Proceedings ..........................................27 Bankruptcy and Foreclosure Delays ........................27 Additional Taxation .................................................28 Parity Taxes and Special Assessments .....................28 Disclosure to Future Land Buyers ...........................29 Billing of Special Taxes ...........................................29 Collection of Special Tax.........................................29 Maximum Rates ................ ...... ................................ .30 Exempt Properties ..... ............. ......................... .........30 Insufficient Special Taxes ........................................3 I No Acceleration Provision .......................................31 ,"-" SPECIAL TAXES AND DEBT SERVICE .............35 Administration of the Special Tax ...........................35 Rate and Method of Apportionment ........................35 Delinquencies and Foreclosure Actions...................36 Debt Service Coverage ............................................39 THE CITy................................................................. 41 THE D ISTRI CT .................... ................................... 42 Boundaries of the District........................................42 Facilities and Fees to be Financed by the District..... ...................... ....................................... 42 The Developer .........................................................45 Description of Development .... ....... .........................46 Financing Plan .................... ............. ........................49 SUMMARY OF THE FISCAL AGENT AGREE MENT ... .................................................... 51 LEGAL MA TIERS ...... ....... ................................ ..... 61 Enforceability of Remedies .....................................61 Approval of Legal Proceedings ...............................61 Tax Exemption.... ...... ....................... ........................61 Absence of Litigation ..............................................63 CONCLUDING INFORMATION ..........................64 No Rating on the Bonds........................................... 64 Underwriting...... ................... ....... ............................ 64 Experts.............................................. ............. ..........64 The Financing Consultant........................................64 Additional Information ............................................64 References ...............................................................65 Execution.......................................... ....................... 65 APPENDIX A DEFINITIONS OF CERTAIN TERMS USED IN THE FISCAL AGENT AGREEMENT ...... ........ .......................................A-l APPENDIX B MARKET ABSORPTION STUDy................................................................. B-1 APPENDIX C APPRAISAL REPORT .................C-l APPENDIX D RATE AND METHOD OF AP PO RTI 0 NMENT ....................... .................... D-l APPENDIX E FORMS OF CONTINUING DISCLOSURE AGREEMENTS ........................ E-l APPENDIX F PROPOSED FORM OF BOND COUNSEL 0 PINI ON .......................................... F-l iii 0;). OF 3~~ AGENDA ITEM NO. PACE /33 Lake Elsinore Vicinity Map '" '-III '" IV :3;J;J ACENOAITEM NO. . "" - - PAGEJ3t! ~OF.,l.3.-~~ r" OFFICIAL STATEMENT $3,365,000* CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2005-6 (CITY CENTER TOWNHOMES) SPECIAL TAX BONDS, 2006 SERIES A This Official Statement which includes the cover page and appendices (the "Official Statement") is provided to furnish certain information concerning the sale of the City of Lake Elsinore Community Facilities District No. 2005-6 (City Center Townhomes) Special Tax Bonds, 2006 Series A (the "Bonds"), in the aggregate principal amount of $3,365,000* . INTRODUCTORY STATEMENT This Introductory Statement contains only a brief description of this issue and does not purport to be complete. This Introductory Statement is subject in all respects to more complete information in the entire Official Statement and the offering of the Bonds to potential investors is made only by means of the entire Official Statement and the documents summarized herein. Investment in the Bonds involves risks. Potential investors must read the entire Official Statement to obtain information essential to the making of an informed investment decision with respect to the Bonds (see "BONDOWNERS'lUSKS" herein). The City and the District r--- The City. The City of Lake Elsinore (the "City") was founded in 1883 and incorporated on April 23, 1888 in San Diego County. In 1893 the Elsinore Valley, previously in San Diego County, became a part of the new County of Riverside. The City encompasses approximately 39 square miles, with over 10 miles of lake shore, and is located at the southwestern end of Riverside County. It is 73 miles east of downtown Los Angeles and 74 miles north of downtown San Diego. Neighboring communities include Canyon Lake, Murrieta and Temecula (see "Vicinity Map" herein). The District. The Mello-Roos Community Facilities Act of 1982, as amended, constituting Section 53311 et seq. of the Government Code of the State of California (the "Act"), was enacted by the California Legislature to provide an alternative method of financing certain public facilities, improvements and services. The Act authorizes local governmental entities to establish community facilities districts as legally constituted governmental entities within defined boundaries, with the legislative body of the local applicable governmental entity acting on behalf of such district. Subject to approval by at least a two-thirds vote of the votes cast by qualified electors within such district and compliance with the provisions of the Act, the legislative body may issue bonds for such community facilities district established by it and may levy and collect a special tax within such district to repay such bonds (see "SELECTED ESSENTIAL FACTS" and "SPECIAL TAXES AND DEBT SERVICE" herein). * Preliminary, subject to change. ,-- 3? A(jeroA ITEM NO'_o~_ .. t: lPME,=~~()F 33 -- On September 13,2005, the City formed City of Lake Elsinore Community Facilities District No. 2005-6 (City Center Townhomes) (the "District") by the adoption of Resolution No. . The sole qualified ....,; elector at the time within the District voted in favor of the incurrence of bonded indebtedness. The maximum authorized bonded indebtedness for the District is $5,000,000. (see "SELECTED ESSENTIAL FACTS" and "SPECIAL TAXES AND DEBT SERVICE" herein). The special tax authorized to be levied within the District to pay for certain facilities, capital fees and to pay debt service on the Bonds is described in the Rate and Method of Apportionment (the "Rate and Method of Apportionment") attached hereto as "APPENDIX D - RATE AND METHOD OF APPORTIONMENT" and shall be referred to herein as the "Special Tax" or "Special Taxes." The District is located adjacent to and east of Grape Street near the intersection of Grape Street and Railroad Canyon. The District coincides with the boundaries of Tract No.3 I 531 and Tract No.3 I 532. The development within the District is planned for 144 attached single family housing units in condominium ownership (the "Development") on approximately 14.2 gross acres. Western Pacific Housing, Inc., a Delaware corporation and a wholly owned subsidiary of D.R. Horton, Inc. (the "Developer"), currently owns all of the land in the District. The homes being constructed are being marketed under the trade name "D.R. Horton America's Builder." (see "BONDOWNERS RISKS- Concentration of Ownership" herein). As of February 17, 2006, the sites within Tract No.3 I 53 I and 3 I 532 were improved from blue top to near finished lot condition. Three model homes are under construction and I 14 dwelling units are under construction. As of , 2006 homes were under contract but escrows have not yet closed on these homes. As is common with sales at this stage of development, the sales are subject to a number of contingencies and the Developer can provide no assurance that the current sales will result in closed escrows. Security and Sources of Repayment The Bonds. The Bonds are secured under the Fiscal Agent Agreement between the District and Union Bank of California, N.A., Los Angeles, California, as fiscal agent (the "Fiscal Agent") dated as of April 1, ......", 2006 (the "Fiscal Agent Agreement") (see "SUMMARY OF THE FISCAL AGENT AGREEMENT" herein). The District has covenanted in the Fiscal Agent Agreement to levy in each Fiscal Year the Special Taxes on "parcels of land pledged to the repayment of the Bonds in an amount sufficient to pay debt service on the Bonds and the administrative expenses subject to the limitation on the Maximum Annual Special Tax that may be levied on such land within the District (see "THE DISTRICT" and "SPECIAL TAXES AND DEBT SERVICE" for a description of the Special Tax within the District) (see "SOURCES OF PAYMENT FOR THE BONDS" and "BONDOWNERS' RISKS" herein). The Bonds are special obligations of the District. The Bonds do not constitute a debt or liability of the City, the State of California (the "State") or of any political subdivision thereof, other than the District. The District shall only be obligated to pay the principal of the Bonds, or the interest thereon, from the funds described herein, and neither the faith and credit nor the taxing power of the City, the State or any of its political subdivisions is pledged to the payment of the principal of or the interest on the Bonds. See "SOURCES OF PAYMENT FOR THE BONDS" and "BONDOWNERS' RISKS" herein. ......", 2 !,l?l~~j''''1;\ ~~,J;' r.\flt'i)' 3. .2 ,I.{!Sl;\!I"),.V"'"Pl\.!s~ijJ\C'. ~.'.~ '\fi' '.~ . '.~. " rp~.Jlf2 Q[~ 3.3.., ",.-. Purpose The Bonds. The Bonds are being issued to provide the District with funds to finance public infrastructure, including certain capital fees imposed by the City and the Elsinore Valley Municipal Water District, related to the District (the "Facilities") (see "THE DISTRICT - Facilities and Fees to be Financed by the District"), to fund interest on the Bonds to and including September 1, 2006, to pay the expenses of the District and the Developer in connection with the formation of the District and issuance of the Bonds and to make a deposit to the Reserve Account. The amount of the deposit into the Reserve Account will be in the amount equal to $305,902* (see "ESTIMATED SOURCES AND USES OF FUNDS" herein). The Bonds Redemption. The Bonds maturing September 1,2026 and September 1,2036 are subject to mandatory redemption, without premium, prior to their maturity date, in part by lot on September 1 in each year commencing September 1, 2021 in the case of the Bonds maturing September I, 2026 and September 1, 2027 in the case of the Bonds maturing September I, 2036 from sinking fund payments under the Fiscal Agent Agreement (see "THE BONDS - Redemption - Mandatory Redemption" herein). The Bonds are subject to optional redemption prior to maturity, in whole or in part, by lot, on September 1, 2012, and on any date thereafter at a redemption price equal to the principal amount thereof, plus accrued interest to the date of redemption, plus a premium, as described herein (see "THE BONDS - Redemption - Optional Redemption" herein). ,-.. The Bonds are subject to redemption, in part, on any date from amounts constituting prepayments of Special Taxes at a redemption price equal to the principal amount thereof, plus accrued interest to the date of redemption, plus a premium, as described herein (see "THE BONDS - Redemption - Special Mandatory Redemption from Prepayment of Special Taxes" herein). The Bonds are subject to special mandatory redemption in whole or in part, on any date without premium under certain other circumstances as described herein (see "THE BONDS - Redemption" herein). Denominations. The Bonds will be issued in the minimum denomination of $5,000 each or any integral multiple thereof (see "THE BONDS - General Provisions" herein). Registration, Transfer and Exchange. The Bonds will be issued in fully registered form without coupons. Any Bond may, in accordance with its terms, be transferred or exchanged, pursuant to the provisions of the Fiscal Agent Agreement (see "THE BONDS - General Provisions - Transfer or Exchange of Bonds" herein). When delivered, the Bonds will be registered in the name of The Depository Trust Company, New York, New York ("DTC"), or its nominee. DTC will act as securities depository for the Bonds. Individual purchases of Bonds will be made in book-entry form only in the principal amount of $5,000 each or any integral thereof. Purchasers of the Bonds will not receive certificates representing their Bonds (see "THE BONDS - General Provisions - Book-Entry Only System" herein). * Preliminary, subject to change. ,--. 3 AllENDA ITEM NO. 2> )-. ~. PACE 131 OF33~ Payment. Principal of the Bonds and any premium upon redemption will be payable in each of the years and in the amounts set forth on the cover page hereof upon surrender at the corporate trust office of the ..." Fiscal Agent in Los Angeles, California. Interest on the Bonds will be paid by check of the Fiscal Agent mailed by first class mail on the Interest Payment Date to the person entitled thereto (except as. otherwise described herein for interest paid to an account in the continental United States of America by wire transfer as requested in writing no later than the applicable Record Date by owners of$I,OOO,OOO or more in aggregate principal amount of Bonds) (see "THE BONDS - General Provisions" herein). Initially, interest on and principal and premium, if any, of the Bonds will be payable when due by wire of the Fiscal Agent to DTC which will in turn remit such interest, principal and premium, if any, to DTC Participants (as defined herein), which will in turn remit such interest, principal and premium, if any, to Beneficial Owners (as defined herein) of the Bonds (see "THE BONDS - General Provisions _ Book-Entry Only System" herein). Notice. Notice of any redemption will be mailed by first class mail by the Fiscal Agent at least thirty (30) but no more than sixty (60) days prior to the date fixed for redemption to the registered owners of any Bonds designated for redemption and to the Securities Depositories and Information Services provided in the Fiscal Agent Agreement. Neither failure to receive such notice nor any defect in the notice so mailed will affect the sufficiency of the proceedings for redemption of such Bonds or the cessation of accrual of interest on the redemption date (see "THE BONDS - Redemption - Notice of Redemption" herein). Legal Matters The legal proceedings in connection with the issuance of the Bonds are subject to the approving opinion of Fulbright & Jaworski L.L.P., Los Angeles, California, as Bond Counsel. Such opinion, and certain tax consequences incident to the ownership of the Bonds, including certain exceptions to the tax treatment of interest, are described more fully under the heading "LEGAL MATTERS" herein. Certain legal matters will be passed on for the City by Van Blarcom, Leibold, McClendon & Mann, P.C., Laguna Hills, California, ..." as City Attorney and by Fulbright & Jaworski L.L.P., Los Angeles, California, Disclosure Counsel. Certain legal matters will be passed on for the Underwriter by McFarlin & Anderson LLP, Lake Forest, California, Underwriter's Counsel Professional Services Union Bank of California, N.A., Los Angeles, California, will serve as Fiscal Agent under the Fiscal Agent Agreement. The Fiscal Agent will act on behalf of the Bondowners for the purpose of receiving all moneys required to be paid to the Fiscal Agent, to allocate, use and apply the same, to hold, receive and disburse the Special Taxes and other funds held under the Fiscal Agent Agreement, and otherwise to hold all the offices and perform all the functions and duties provided in the Fiscal Agent Agreement to be held and performed by the Fiscal Agent. Harris & Associates, Irvine, California, Special Tax Consultant, prepared the cash flow certificate for the District demonstrating that there will be sufficient Special Taxes, assuming timely receipt, to pay debt service on the Bonds (see "CONCLUDING INFORMATION - Experts" herein). Rod Gunn Associates, Inc., Huntington Beach, California, Financing Consultant, advised the City as to the financial structure and certain other financial matters relating to the Bonds. Fees payable to Bond Counsel, Disclosure Counsel, Underwriter's Counsel and the Financing Consultant are contingent upon the sale and delivery of the Bonds. ..." 4 '!:J )- --. At1en:~.~ NO'___OF_33C": j..'f>J".i- nf - /"'"' Offering of the Bonds Authority for Issuance. The Bonds are to be issued and secured pursuant to the Fiscal Agent A~reeme~t, as authorized by resolution of the City adopted on March 28, 2006. The Bonds are also Issued III accordance with the laws of the State, and particularly the Mello-Roos Community Facilities Act of 1982, as amended (Section 53311 et seq. of the Government Code of the State). The Bonds are being sold to Southwest Securities, Inc. (the "Underwriter") pursuant to a Purchase Contract approved by the City by Resolution adopted on March 28, 2006. Offering and Delivery of the Bonds. The Bonds are offered when, as and if issued, subject to the approval as to their legality by Fulbright & Jaworski L.L.P., Los Angeles, California, as Bond Counsel. Certain legal matters will be passed upon for the City by Van Blarcom, Leibold, McClendon & Mann, P.C., Laguna Hills, California, as City Attorney and by Fulbright & Jaworski L.L.P., Los Angeles, California, Disclosure Counsel. Certain legal matters will be passed upon for the Underwriter by McFarlin & Anderson LLP, Lake Forest, California, as Underwriter's Counsel. It is anticipated that the Bonds, in book-entry form, will be available for delivery through the facilities of The Depository Trust Company on or about , 2006. No dealer, broker, salesperson or other person has been authorized by the District, the City, the Financing Consultant or the Underwriter to give any information or to make any representations in connection with the offer or sale of the Bonds described herein, other than as contained in this Official Statement, and if given or made, such other information or representations must not be relied upon as having been authorized by any of the foregoing. This Official Statement does not constitute an offer to sell nor the solicitation of an offer to buy, nor /"'"' shall there be any sale of the Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale or to any person to whom it is unlawful to make such offer, solicitation or sale. IN CONNECTION WITH THE OFFERING OF THE BONDS, THE UNDERWRITER MAY OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. THE UNDERWRITER MAY OFFER AND SELL THE BONDS TO CERTAIN DEALERS AND DEALER BANKS AND BANKS ACTING AS AGENT AT PRICES LOWER THAN THE PUBLIC OFFERING PRICES STATED ON THE COVER PAGE HEREOF AND SAID PUBLIC OFFERING PRICES MAY BE CHANGED FROM TIME TO TIME BY THE UNDERWRITER. The Underwriter has provided the following sentence for inclusion in this Official Statement. The Underwriter has reviewed the information in this Official Statement in accordance with its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information. The Bonds are exempt from registration with the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended. The Bonds have not been registered or qualified under the securities laws of any state. The Bonds will not be listed on any stock or securities exchange. Neither the Securities and Exchange Commission nor any other federal, state or other governmental entity or agency will have passed upon the accuracy or adequacy of the Official Statement or approved the Bonds for sale. ~ AGENDA ITEM NO. PACE J't1 - - "3..2 OF 3~~= 5 Information Concerning this Official Statement This ~ffic~al Statement speaks only ~ of its d~te: The information set forth herein has been obtained by the Fmancmg Consultant from the CIty, the DISttiCt, the Developer and other sources which are believed to be reliable, but such information is not guaranteed as to accuracy or completeness nor has it been independ~ntl~ verified and is n?t to be consn:ued as a representation by the Financing Co'nsuItant, the City or the DIstrICt. The Underwnter has provIded the following sentence for inclusion in this Official Statement. The Underwriter has reviewed the information in this Official Statement in accordance with , and as a part of, its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information. Statements contained in this Official Statement which involve estimates, forecasts or matters of opinion, whether or not expressly so described herein, are intended as such and are not to be construed as representations of fact. Preliminary Official Statement Deemed Final. The information set forth herein is in a form deemed final, as of its date, by the City for the purpose of Rule 15c2-12 under the Securities Exchange Act of 1934, as amended (except for the omission of certain information permitted to be omitted under the Rule). The information herein is subject to revision, amendment and completion in a Final Official Statement. The information and expressions of opinion herein are subject to change without notice and the delivery of this Official Statement shall not, under any circumstances, create any implication that there has been no change in the information or opinions set forth herein or in the affairs of the District since the date hereof. Continuing Disclosure. The District and the Developer have covenanted for the benefit of owners of the Bonds to provide certain financial information and operating data relating to the District each year. The District has agreed to make such information available not later than 225 days after the end of the City's fiscal year, commencing with fiscal year 2005/06 and the Developer has agreed to make such information available not later than May I of each year until the obligation is terminated, commencing May I, 2007 (each an "Annual Report" and collectively the "Annual Reports"), and to provide notices of the occurrences of certain enumerated events, if material. The District and the Developer shall file or cause to be filed by the Dissemination Agent the Annual Reports with each Nationally Recognized Municipal Securities Information Repository and with the appropriate State information depository, if any. The notices of material events will be filed by the Dissemination Agent on behalf of the District and the Developer with the Municipal Securities Rulemaking Board (and with the appropriate State information depository, if any) or each Nationally Recognized Municipal Securities Information Repository. The specific nature of information to be contained in the Annual Reports or the notice of material events is summarized in "APPENDIX E -- FORMS OF CONTINUING DISCLOSURE AGREEMENTS." These covenants have been made by the District and the Developer in order to assist the Underwriter in complying with Rule 15c2-12(b)(5) (the "Rule") promulgated by the Securities and Exchange Commission. The Developer will be released from its obligation under its Continuing Disclosure Agreement to provide its Annual Report and notices of material events upon the earliest to occur of certain events, including at such time that the property owned by the Developer in the District is no longer responsible for payment of 20% or more of the Special Taxes in the District. The District has never failed to meet its continuing disclosure requirements under such rule in any material manner. An officer or representative executing a certificate on behalf of the Developer will certify that to his or her knowledge, the Developer has not previously failed to comply in any material respect with undertakings by it under the Rule to provide periodic continuing disclosure reports or notice of material events in California within the past five years. Each year until the final maturity of the Bonds, the District is required to, not later than October 30 of each year, supply the following information to the California Debt and Investment Advisory Commission by mail, postage prepaid: I. The principal amount of Bonds outstanding. 2. The balance in any Bonds reserve fund. ....., ....., ......, -. 3d- . ..... ~OENOAITEMNO. ~~ ~ p~"}tjtJ.oF3. 6 ,-... 3. The balance in any capitalized interest fund. 4. The number of parcels which are delinquent with respect to their Special Tax payments, the amount that each parcel is delinquent, the length of time that each has been delinquent, and when foreclosure was commenced for each delinquent parcel. 5. The balance in any construction funds. 6. The assessed value of all parcels subject to Special Tax to repay the Bonds as shown on the most recent equalized roll. In addition, the District is required to notify the California Debt and Investment Advisory Commission by mail, postage prepaid, within 10 days if any of the following events occur: 1. The District or its Fiscal Agent fails to pay principal and interest due on any scheduled payment date. 2. Funds are withdrawn from any reserve fund to pay principal and interest on the Bonds. Neither the District nor the California Debt and Investment Advisory Commission will be liable for any inadvertent error in reporting the required information. The failure by the District to comply with its reporting obligations is not a default under the Fiscal Agent Agreement. Availability of Legal Documents. The summaries and references contained herein with respect to the Fiscal Agent Agreement, the Bonds, and other statutes or documents do not purport to be comprehensive or definitive and are qualified by reference to each such document or statute, and references to the Bonds are qualified in their entirety by reference to the form thereof included in the Fiscal Agent Agreement. ".-., Definitions of certain terms used herein are set forth in "APPENDIX A" hereto. Copies of the documents described herein are available for inspection during the period of initial offering of the Bonds at the offices of the Financing Consultant, Rod Gunn Associates, Inc., 16371 Gothard Street, Suite A, Huntington Beach, California 92647-3652, telephone (714) 841-3993, or the Underwriter, Southwest Securities, Inc., 620 Newport Center Drive, Suite 300, Newport Beach, California 92660, telephone (949) 717-2000. Copies of these documents may be obtained after delivery of the Bonds from the City at 130 S. Main Street, Lake Elsinore, California 92530, telephone (951) 674-3124. ~ 7 ~J ... AGENDA ITEM NO. .3~~ ppr;i.jt/I _OF SELECTED ESSENTIAL FACTS ......., The following summary does not purport to be complete. Reference is hereby made to the complete Official Statement in this regard. Furthermore, the following summary makes certain assumptions regarding valuation of property within the District. Neither the City nor the District makes any representation as to the current value of property in the District or provides any assurance as to the estimated values of property being achieved (see "BONDOWNERS'RISKS" herein). THE BONDS Principal Amount of Bonds: Additional Bonds: $3,365,000 No additional bonds on a parity with the Bonds are authorized (see "SUMMARY OF THE FISCAL AGENT AGREEMENT" herein). September 1, 2012 at 102% of Principal Amount (see "THE BONDS-Redemption" herein). On any date on or after September 1, 2006 from prepayment of Special Taxes at a premium, as described herein. Special Taxes levied within the District as defined herein (see "SPECIAL TAXES AND DEBT SERVICE" herein). All Bonds are secured by a first pledge of and lien on all Special Taxes levied within the District (see "SOURCES OF PAYMENT FOR THE BONDS" and "BONDOWNERS' RISKS" herein). First Optional Redemption Date: First Special Mandatory Redemption Date: Primary Source of Revenues for Repayment: Priority: THE DISTRICT ~ Estimated Acreage: 14.2 gross acres Discounted "Bulk Value" of Parcels in The District $17,800,000 Ratio of Market Value to Principal Amount of Bonds: 5.29 to 1* Minimum Ratio of Authorized Maximum Annual Special Taxes in any Fiscal Year to Annual Debt Service on the Bonds: 110% PROPERTY OWNERS AND DEVELOPMENT Property Owner: Western Pacific Housing, Inc., a wholly owned subsidiary of D.R. Horton, Inc. (see 44BONDOWNERS' RISKS - The Bonds - Concentration of Ownership" herein). * Preliminary, subject to change. ~ 8 3d-. f\OENDA ITEM NO,~. '. ..~ f)Af;E,_J!ft- _OF 3~ . /"'" Description of Proposed Development: Government Approvals: Grading: Start of Construction: Estimated Absorption Period: Estimated Price Range of Homes: Estimated Home Sizes: /"'" /'"""' The Developer expects to construct 144 townhome style condominium units. The Developer expects to construct 24 buildings, each containing 6 condominium units.. Tentative maps approved and Final maps have been recorded. The sites within Tract Nos. 31531 and 31532 are from blue top to near finished condition. Construction has started on 3 model homes and 114 dwelling units. 78 units in 2006 and balance of 66 units in 2007. $271,900 to 338,900 1,141 sq. ft. 1,527 sq. ft. 9 J).. ,". AGENDA ITEM NO. ....l PAGE I t/~ OF 3.3"-- ESTIMATED SOURCES AND USES OF FUNDS 'wI/f Under the provisions of the Fiscal Agent Agreement, the Fiscal Agent will receive the proceeds from the sale of the Bonds and will apply them as follows: Sources of Funds Principal Amount of the Bonds $3,365,000.00* Net Original Issue Discount Underwriter's Discount Total Uses of Funds Acquisition and Construction Fund Interest Account (I) Reserve Account (2) Costs ofIssuance Account (3) City Administration and Reimbursements (4) Total (1) Estimated capitalized interest through September 1, 2006. (2) Equal to the Reserve Requirement. (3) Expenses include fees of Bond Counsel, Financing Consultant, Disclosure Counsel, Appraiser, Market '-' Consultant, Special Tax Consultant, Fiscal Agent, costs of printing the Official Statement, and other costs of issuance ofthe Bonds. (4) City administration fees, fees and expenses of levying the Special Taxes in the first year and certain reimbursements including Developer Counsel and consultants. Investment of Funds All moneys in any ofthe funds or accounts established with the Fiscal Agent pursuant to the Fiscal Agent Agreement will be invested solely in Permitted Investments (see "APPENDIX A - DEFINITION OF CERTAIN TERMS" herein), as directed pursuant to the Written Request of the District filed with the Fiscal Agent at least two (2) Business Days in advance of the making of such investments. In the absence of any such Written Request, the Fiscal Agent will invest any such moneys in money market funds. Obligations purchased as an investment of moneys in any fund shall be deemed to be part of such fund or account. For the purpose of determining the amount in any fund, the value of Permitted Investments credited to such fund will be calculated at the market thereof (excluding any accrued interest). * Preliminary, subject to change. 10 'wI/f- ~;:jJ/4---~~i:: ".... THE BONDS General Provisions ".... Repayment of the Bonds. Interest is payable on the Bonds at the rates per annum set forth on the cover page hereof. Interest with respect to the Bonds will be computed on the basis of a year consisting of 360 days and twelve 30-day months. Each Bond will be dated the Delivery Date, and interest with respect thereto will be payable from the Interest Payment Date next preceding the date of authentication thereof, unless (a) it is authenticated after a Record Date and on or before an Interest Payment Date and after the close of business on the preceding Record Date, in which event interest with respect thereto will be payable from such Interest Payment Date; (b) it is authenticated on or before August 15, 2006, in which event interest with respect thereto will be payable from the Delivery Date; or (c) interest with respect to any Outstanding Bond is in default, in which event interest with respect thereto will be payable from the date to which interest has been paid in full, payable on each Interest Payment Date. Interest with respect to the Bonds will be payable by check of the Fiscal Agent mailed by first class mail on the applicable Interest Payment Date to the Owners thereof provided that in the case of an Owner of $1,000,000 or greater in principal amount of Outstanding Bonds, such payment may, at such Owner's option, be made by wire transfer of immediately available funds to an account in the 'United States in accordance with written instructions provided prior to the applicable Record Date to the Fiscal Agent by such Owner. The Owners of the Bonds shown on the Registration Books on the Record Date for the Interest Payment Date will be deemed to be the Owners of the Bonds on said Interest Payment Date for the purpose of the paying of interest. Principal of the Bonds and any premium upon early redemption is payable upon presentation and surrender thereof, at the corporate trust office of the Fiscal Agent in Los Angeles, California. Book-Entry-Only System. The information in this section concerning DTC and DTC's book-entry system has been obtained from sources that the City believes to be reliable, but the City takes no responsibility for the accuracy thereof. 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 security certificate will be issued for each maturity of the Bonds, each in the aggregate principal amount of such maturity, and will be deposited with DTC. ""..-.. DTC, the world's largest 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 17 A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 2.2 million issues of U.S. and non-U.S. equity 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, in turn, is owned by a number of Direct Participants of DTC and Members of the National Securities Clearing Corporation, Fixed Income Clearing Corporation and Emerging Markets Clearing Corporation, (respectively, "NSCC", "FICC", and "EMCC", also subsidiaries ofDTCC), as well as by the New York Stock Exchange, Inc., the American Stock Exchange LLC, and the 11 ?:JiJ.. AGENDA ITEM NO._ 3~t:., PAGElt/'5 Of_ National Association of Securities Dealers, Inc. 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 Standard & Poor's highest rating: AAA. 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 and www.dtc.org. Purchases of the 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 Security ("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 the 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 mayor 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. 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 the 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 Security documents. For example, Beneficial Owners of the 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. Ifless than all of the Bonds within an issue are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the Bonds unless authorized by a Direct Participant in accordance with DTC's Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the issuer 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 the Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Payments of principal of, premium, if any, and interest evidenced by the Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative ofDTC. DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding detail information from the District or the Fiscal Agent, 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 12 ""-'" !\CENOII IlEM NO. --;-,~ I~ I'"'" I'"'" I'"'" customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC (nor its nominee), the Fiscal Agent, or the District, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal of, premium, if any, and interest evidenced by the Bonds 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 Fiscal Agent, 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. 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 Fiscal Agent. Under such circumstances, in the event that a successor depository is not obtained, Bond certificates are required to be printed and delivered. The District may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, Bond certificates will be printed and delivered. In the event that the book-entry system is discontinued as described above, the requirements of the Fiscal Agent Agreement will apply. The foregoing information concerning DTC and DTC's book-entry system has been provided by DTC, and neither the District nor the Fiscal Agent take any responsibility for the accuracy thereof. Neither the District nor the Underwriter can and do not give any assurances that DTC, the Participants or others will distribute payments of principal, interest or premium, if any, evidenced by the Bonds paid to DTC or its nominee as the registered owner, or will distribute any redemption notices or other notices, to the Beneficial Owners, or that they will do so on a timely basis or will serve and act in the manner described in this Official Statement. Neither the District nor the Underwriter is responsible or liable for the failure of DTC or any Participant to make any payment or give any notice to a Beneficial Owner with respect to the Bonds or an error or delay relating thereto. Transfer or Exchange of Bonds. Any Bond may, in accordance with its terms, be transferred or exchanged, pursuant to the provisions of the Fiscal Agent Agreement, upon surrender of such Bond for cancellation at the corporate trust office of the Fiscal Agent. Whenever any Bond or Bonds shall be surrendered for transfer or exchange, the Fiscal Agent shall authenticate and deliver a new Bond or Bonds for like aggregate principal amount. The Fiscal Agent may require the payment by the Bondowner requesting such transfer or exchange of any tax or other governmental charge required to be paid with respect to such transfer or exchange. The Fiscal Agent is not required to transfer or exchange (a) any Bonds or portions thereof during the period established by the Fiscal Agent for selection of Bonds for redemption, or (b) any Bonds selected for redemption. Bonds Mutilated, Lost, Destroyed or Stolen. If any Bond becomes mutilated, the District, at the expense of the Bondowner, will execute, and the Fiscal Agent will thereupon authenticate and deliver, a new Bond of like series, tenor and authorized denomination in exchange and substitution for the Bond so mutilated, but only upon surrender to the Fiscal Agent of the Bond so mutilated. Every mutilated Bond so surrendered to the Fiscal Agent will be canceled by it. If any Bond issued under the Fiscal Agent Agreement is lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Fiscal Agent and the District and, if such evidence is satisfactory to them and indemnity satisfactory to them is given, the District, at the expense of the Bondowner, will execute, and the Fiscal Agent will thereupon authenticate and deliver, a new Bond of like series and tenor in lieu of and in substitution for the Bond so lost, destroyed or stolen. Any Bond issued under the provisions of the Fiscal Agent Agreement described in this paragraph in lieu of any Bond alleged to be lost, destroyed or stolen will be equally and proportionately entitled to the benefits of the Fiscal Agent Agreement with all other Bonds secured by the Fiscal Agent Agreement. 13 3~ . ..;;:3~k~. .,\)41 Redemption .....", Opti?nal Redemption. The Bonds are subject to redemption prior to maturity at the option of the DIStrict on any date on or after September I, 2012, as a whole or in part, by lot, from any available source of funds at the following redemption prices, (expressed as a percentage of the principal amount of Bonds to be redeemed) together with accrued interest thereon to the date fixed for redemption: RedemDtion Periods September 1, 2012 through August 31,2013 September I, 2013 through August 31,2014 September 1,2014 and thereafter RedemDtion Prices 102.0% 101.0% 100.0% Special Mandatory Redemption from Prepayment of Special Taxes. The Bonds are subject to mandatory redemption prior to maturity on any date on or after September I, 2006, in whole or in part, in a manner determined by the District from prepayments of Special Taxes at the following redemption prices (expressed as a percentage of the principal amount of Bonds to be redeemed), together with accrued interest thereon to the date fixed for redemption: RedemDtion Periods RedemDtion Prices September 1,2006 through August 31, 2010 September 1,2010 through August 31, 2012 September 1,2012 and thereafter 103.0% 102.5% as provided for optional redemption Mandatory Sinking Payment Redemption. The Bonds maturing on September I, 2026 and September I, 2036 are subject to mandatory redemption, in part by lot, on September I in each year commencing September 1,2021 in the case of the Bonds maturing on September 1,2026 and September I, 2027 in the .....", case of the Bonds maturing on September I, 2036, from mandatory sinking payments made by the District pursuant to the Fiscal Agent Agreement at a redemption price equal to the principal amount thereof to be redeemed, without premium, plus accrued interest thereon to the date of redemption as set forth in the following schedule; provided, however, that (i) in lieu of redemption thereof, the Bonds may be purchased by the District and tendered to the Fiscal Agent, and (ii) if some but not all of the Bonds have been redeemed pursuant to optional redemption, mandatory redemption from Special Taxes or special mandatory redemption provisions described herein, the total amount of all future sinking payments will be reduced by the aggregate principal amount of the Bonds so redeemed, to be allocated among such sinking payments on a pro rata basis (as nearly as practicable) in integral multiples of $5,000 as determined by the District. SCHEDULE OF MANDATORY SINKING PAYMENT REDEMPTIONS TERM BONDS MATURING SEPTEMBER 1, 2026 September 1 Year 2021 2022 2023 Principal Amount* September 1 Year 2024 2025 2026 Principal Amount* * Preliminary, subject to change. ....., 14 3;).. AGENDA nCIV\ ....'"'- h PAGEJ c.J fZ OF 3:5 ~ ,-.... SCHEDULE OF MANDATORY SINKING PAYMENT REDEMPTIONS TERM BONDS MATURING SEPTEMBER 1, 2036 September 1 ~ 2027 2028 2029 2030 2031 Principal Amount* Septem ber 1 Year 2032 2033 2034 2035 2036 Principal Amount* Special Mandatory Redemption. The Bonds are subject to special mandatory redemption on any date from unused proceeds of the Bonds after completion or abandonment of the improvements to be financed with such proceeds, from the deposit of fees with the District by a public agency which has accepted facilities serving the District, and from insurance or condemnation proceeds or other mandatory redemption, without premium, plus accrued interest to the redemption date, all as determined by the District (see" THE DISTRICT - Facilities to be Financed by the District" for a description ofthe scope ofthe Development). Notice of Redemption. When redemption is authorized or required, the Fiscal Agent is required to give written notice of the redemption of Bonds to the Bondowners designated for redemption at their addresses appearing on the bond registration books, to certain Securities Depositories, and to one or more Information Services, all as provided in the Fiscal Agent Agreement, by first class mail, postage prepaid, ,-.... no less than thirty (30), nor more than sixty (60), days prior to the date fixed for redemption. Neither failure to receive such notice nor any defect in the notice so mailed will affect the sufficiency of the proceedings for redemption of such Bonds or the cessation of accrual of interest on the redemption date. Effect of Redemption. The rights of a Bondowner to receive interest will terminate on the date, if any, on which the Bond is to be redeemed pursuant to a call for redemption. The Fiscal Agent Agreement contains no provisions requiring any publication of notice of redemption, and Bondowners must maintain a current address on file with the Fiscal Agent to receive any notices of redemption. Partial Redemption. In the event only a portion of any Bond is called for redemption, then upon surrender of such Bond the District will execute and the Fiscal Agent will authenticate and deliver to the Bondowner thereof, at the expense of the District, a new Bond or Bonds of the same series and maturity date, of authorized denominations in an aggregate principal amount equal to the unredeemed portion of the Bond to be redeemed. * Preliminary, subject to change. ~, 15 A(iENDA ITEM NO.3;) PAOEJ.t.J1 OF ~.-; Scheduled Debt Service on the Bonds The Following is the scheduled Debt Service on the Bonds. Interest Payment Date September ], 2006 March ], 2007 September 1,2007 March ],2008 September ], 2008 March 1,2009 September ], 2009 March ],20]0 September ],2010 March 1,2011 September ],20]] March ],2012 September ],2012 March ],2013 September I, 2013 March 1,20]4 September ], 20]4 March ],20]5 September ], 20]5 March ],20]6 September 1,20]6 March 1,20] 7 September ], 20] 7 March ],2018 September I, 20]8 March 1,20]9 September 1,20]9 March 1,2020 September ], 2020 March I, 202] September ],202] March ], 2022 September ], 2022 March I, 2023 September ], 2023 March I, 2024 September 1,2024 March ],2025 September ], 2025 March ], 2026 September ], 2026 March 1,2027 September ],2027 March 1,2028 September ], 2028 March ],2029 September 1,2029 PrinciDal Interest 16 '-' Annual Debt Service '-' 3~''-' AcamA mM WO. :3 - :: Ppt;EJ~ OF ~.~ /"'" Scheduled Debt Service Continued Interest Pavrnent Date March 1,2030 September 1, 2030 March 1, 2031 September 1, 2031 March 1,2032 September 1, 2032 March 1,2033 September 1,2033 March 1,2034 September 1,2034 March 1,2035 September 1,2035 March 1, 2036 September 1, 2036 Princival /"'" .,........ Interest Annual Debt Service 17 AGENDA ITEM NO. PAGE IS I 3;)" OF 3~ ~ SOURCES OF PAYMENT FOR THE BONDS General '-"'. The principal of, premium, if any, and the interest on the Bonds, and the Administrative Expenses, are payable from the Special Taxes collected on real property within the District and funds held by the Fiscal Agent and available for such purposes pursuant to the Fiscal Agent Agreement. The Bonds are limited obligations of the District payable solely from the proceeds of Special Taxes levied on certain parcels within the District. The Bonds shall not be deemed to constitute a debt or liability of the City or the State or of any political subdivision thereof, other than the District. Neither the faith and credit nor the taxing power of the City, the State or any of its political subdivisions is pledged to the payment of the principal of or the interest on the Bonds. Special Taxes The Special Taxes are excepted from the tax limitation of California Constitution Article XIIIA pursuant to Section 4 thereof as a "special tax" authorized by at least a two-thirds vote of the qualified electors as set forth in the Act. Consequently, the City Council of the City on behalf of the District has the power and is obligated by the Fiscal Agent Agre~ment to cause the levy and collection of the Special Taxes. The District has covenanted in the Fiscal Agent Agreement to levy (subject to the Maximum Annual Special Tax) in each Fiscal Year the Special Taxes in an amount sufficient to pay the debt service on the Bonds and the cost of providing Administrative Expenses. The Special Taxes are to be levied and collected according to the Rate and Method of Apportionment described in the section entitled "SPECIAL TAXES AND DEBT SERVICE" herein. Although the Special Taxes will constitute a lien on parcels of real property within the District, they do '-'" not constitute a personal indebtedness of the owner(s) of real property. There is no assurance that the property owner(s), or any successors and/or assigns thereto or subsequent purchaser(s) ofland within the District, will be able to pay the annual Special Taxes or if able to pay the Special Taxes that they will do so (see "BONDOWNERS'RISKS" and "THE DISTRICT" herein). The Special Taxes initially are required to be collected by the County of Riverside Tax Collector in the same manner and at the same time as regular ad valorem property taxes are collected by the Tax Collector of the County. When received, such Special Taxes will be deposited in the Special Tax Fund to be held by the Fiscal Agent as provided in the Fiscal Agent Agreement. Reserve Account In order to secure further the timely payment of principal of and interest on the Bonds, the District is required, upon delivery of the Bonds, to deposit in the Reserve Account for the Bonds an amount equal to the Reserve Requirement. The Reserve Requirement means, in respect of any Bond Year as computed by the Agency, the least of (i) 10% of the original proceeds (within the meaning of section 148 of the Code) of the Bonds, (ii) 125% of the average Annual Debt Service for that and every subsequent Bond Year, or (Hi) the Maximum Annual Debt Service. Thereafter, the District is required to deposit from the payment of the Bonds and maintain an amount of money equal to the Reserve Requirement in the Reserve Account at all times while the Bonds are Outstanding. Amounts in the Reserve Account will be used to pay debt service on the Bonds to the extent other moneys are not available therefor. Amounts in the Reserve Account in excess of the Reserve Requirement will be deposited into the Acquisition and Construction Fund until all Facilities have been financed or it is determined sufficient funds are on deposit in the Acquisition and Construction Fund to fund all Facilities expected to be funded and thereafter such excess funds shall be deposited into the Interest Account. Amounts in the Reserve Account may be used to pay ""'" 18 AGENDA ITEM NO. 3~ PACE _1 ~ 'h. . OF ~~~~-... ",....... ",....... ,"'-" the final year's debt service on the Bonds (see "SUMMARY OF THE FISCAL AGENT AGREEMENT" herein). Upon mandatory redemption, amounts on deposit in the Reserve Account shall be reduced (to an amount not less than the Reserve Requirement) and excess money shall be transferred to the Redemption Account and used for the redemption of Bonds. Capitalized Interest There will be an initial deposit to the Interest Account out of Bond proceeds which has been calculated to be sufficient to make interest payments on the Bonds due to and including September 1, 2006. Covenant for Superior Court Foreclosure Pursuant to Section 53356.1 of the Act, in the event of a delinquency in the payment of the Special Taxes levied, the District may order the institution of a superior court action to foreclose the lien therefor, provided such action is brought not later than four years after the final maturity date of the Bonds. In such an action, the real property subject to the unpaid amount may be sold at a judicial foreclosure sale. The District has covenanted in the Fiscal Agent Agreement for the benefit of the owners of the Bonds that the District will determine or cause to be determined, no later than March 1 and August 1 of each year, whether or not any owners of the property within the District of the District are delinquent in the payment of Special Taxes and, if such delinquencies exist, the District will order and cause to be commenced not later than April 15 (with respect to the March 1 determination date) or September 1 (with respect to the August 1 determination date), and thereafter diligently prosecute, an action in the superior court to foreclose the lien of any Special Taxes or installment thereof not paid when due, provided, however, that the District shall not be required to order the commencement of foreclosure proceedings if (i) the total Special Tax delinquency in the District of the District for such Fiscal Year is less than five percent (5%) of the total Special Tax levied in such Fiscal Year, and (ii) the District shall have established from any source of lawfully available funds (other than Special Taxes) an escrow fund to provide for the payment of principal of and interest on the Bonds. Notwithstanding the foregoing, if the District determines that any single property owner is delinquent in excess often thousand dollars ($10,000) in the payment of the Special Tax, then it will diligently institute, prosecute and pursue foreclosure proceedings against such property owner. Notwithstanding any provision of the Act or other law of the State to the contrary, in connection with any foreclosure related to delinquent Special Taxes: (a) The District or the Fiscal Agent is authorized to credit bid at any foreclosure sale, without any requirement that funds be set aside in the amount so credit bid, in the amount specified in Section 53356.5 of the Act, or such less amount as determined under clause (b) below or otherwise under Section 53356.6 ofthe Act. (b) The District may permit, in its sole and absolute discretion, property with delinquent Special Tax payments to be sold for less than the amount specified in Section 53356.5 of the Act, if it determines that such sale is in the interest of the Bond Owners. The Bond Owners, by their acceptance of the Bonds, consent to such sale for such lesser amounts (as such consent is described in Section 53356.6 of the Act), and release the District and the City, and their respective officers and agents from any liability in connection therewith. If such sale for lesser amounts would result in less than full payment of principal of and interest on the Bonds, the CFD will use best efforts to seek approval of the Bond Owners. (c) The District is authorized to use amounts in the Special Tax Fund to pay costs of foreclosure of delinquent Special Taxes. (d) The District may forgive all or any portion of the Special Taxes levied or to be levied on any parcel in the District so long as the District determines that such forgiveness is not expected to adversely affect its obligation to pay principal of and interest on the Bonds as such payments become due and payable. No assurances can be given that the real property subject to foreclosure and sale at a judicial foreclosure sale will be sold or, if sold, that the proceeds of such sale will be sufficient to pay any delinquent Special 19 !'1'3_3.?- -- ~ ,,"- jr:.1... "q~ ~3~ P!!6'~\,~,~~;~~"';'- _ ' -'~ Tax installment. Although the Act authorizes the District to cause such an action to be commenced and diligently pursued to completion, the Act does not require the District or the City to purchase or otherwise '--' acquire any lot or parcel of property sold at the execution sale pursuant to the judgment in any such action if there is no other purchaser at such sale, nor does the Act specify the priority relationship, if any, between the Special Taxes and other taxes and assessment liens. As a result of the foregoing, in the event of a delinquency or nonpayment by the property owners in the District of one or more Special Taxes installments, there can be no assurance that there would be available to the District sufficient funds to pay when due the principal of, interest on and premium, if any, on the Bonds (see "BONDOWNERS' RISKS - Concentration of Ownership" "BONDOWNERS' RISKS - Bankruptcy and Foreclosure Delays" and "BONDOWNERS' RISKS - Property Controlled by Federal Deposit Insurance Corporation and other Federal Agencies" herein). Prepayment of Special Tax. A property owner may prepay its Special Taxes and thereby cause a redemption of Bonds. See "APPENDIX E - RATE AND METHOD OF APPORTIONMENT - PREPAYMENT OF ANNUAL SPECIAL TAXES" herein. Special Taxes Are Not Within Teeter Plan The County has adopted a Teeter Plan as provided for in Section 4701 et seq. of the California Revenue and Taxation Code, under which a tax distribution procedure is implemented and secured roll taxes are distributed to taxing agencies within the County on the basis of the tax levy, rather than on the basis of actual tax collections. However, by policy, the County does not include assessments, reassessments and special taxes in its Teeter program. The Special Taxes are not included in the County's Teeter Program. '--' 20 '--' N>EN~::L;' o;31,~: /'"" BONDOWNERS'RISKS General BEFORE PURCHASING ANY OF THE BONDS, ALL PROSPECTIVE INVESTORS AND THEIR PROFESSIONAL ADVISORS SHOULD CAREFULLY CONSIDER, AMONG OTHER THINGS, THE FOLLOWING RISK FACTORS, WHICH ARE NOT MEANT TO BE AN EXHAUSTIVE LISTING OF ALL RISKS ASSOCIATED WITH THE PURCHASE OF THE BONDS. MOREOVER, THE ORDER OF PRESENTATION OF THE RISK FACTORS DOES NOT NECESSARILY REFLECT THE ORDER OF THEIR IMPORTANCE. The purchase of the Bonds involves investment risk. If a risk factor materializes to a sufficient degree, it could delay or prevent payment of principal of and/or interest on the Bonds. Such risk factors include, but are not limited to, the following matters. Limited Obligation Neither the faith and credit nor the taxing power of the City, the State or any political subdivision thereof other than the District is pledged to the payment of the Bonds. Except for the Special Taxes derived from the District, no other taxes are pledged to the payment of the Bonds. The Bonds are not general or special obligations of the City, the State or any political subdivision thereof or general obligations of the District, but are special obligations of the District, payable solely from Special Taxes and the other assets pledged therefor under the Fiscal Agent Agreement. Insufficiency of Special Taxes ".-. As discussed herein, the amount of Special Taxes that are collected with respect to the District could be insufficient to pay principal of, interest and premium, if any, on the Bonds due to nonpayment of the Special Taxes levied and insufficient or no proceeds received from a foreclosure sale of land within the District. The District has covenanted in the Fiscal Agent Agreement to institute foreclosure proceedings upon delinquencies in the payments of the Special Taxes as described herein and to sell any real property with a lien of delinquent Special Taxes to obtain funds to pay debt service on the Bonds. If foreclosure proceedings are ever instituted, any holder of a mortgage or deed of trust could, but would not be required to, advance the amount of delinquent Special Taxes to protect its security interest. See "SOURCES OF PAYMENT FOR THE BONDS - Covenant for Superior Court Foreclosure" herein for provisions which apply in the event foreclosure is required and which the District is required to follow in the event of delinquency in the payment of Special Taxes. Section 53317.3 of the Act provides that, if any real 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 be enforceable against the public entity that acquires the property. Additionally, Section 53317.5 provides that, if any 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. However, the constitutionality and operation of these provisions of the Act have not been tested. If for any reason, property subject to the Special Tax becomes exempt from taxation by reason of ownership by a non-taxable entity, such as the federal government or another public agency, and the District is unable to collect the Special Taxes or obtain compensation through the condemnation procedure, the Special Tax will be reallocated to the remaining taxable properties within the District up to the Maximum Annual Special Tax. This reallocation would result in the owners of taxable properties "...... within the District subject to the Special Tax paying a greater amount of the Special Tax and could have 21 iliA 3)~ alDA \lEM I'lV<~:. :.~. '. . . lAG ... J~C 'Vt' ,ft' ~~c an adverse impact upon the timely payment of the Special Tax by such owners and therefore the ability to pay debt service on the Bonds. ..."" Concentration of Ownership Property within the District is owned by the Developer (see ~~THE DISTRICT" herein). The only assets of the Developer which constitute security for the Bonds are its taxable property within the District. There are expected to be subsequent transfers of ownership of the property within the District to individual owners of single family homes during the development of the land within the District, although there is no assurance that such transfers of property will occur as described herein, if at all.. The fact that the Developer owns most of the land within the District presents substantial risk to the Bondowners. No Personal Liability for Special Taxes No property owner (including the Developer), or any merchant builder or any officer, partner, member, or affiliate thereof will be personally liable for the payment of the Special Taxes to be applied to pay the principal of and interest on the Bonds. In addition, there is no assurance that any property owner or any merchant builder will be able to pay the Special Taxes or that any property owner or any merchant builder will pay such Special Taxes even if it is financially able to do so. No representation is made that the Developer will have moneys available (or that it will advance such moneys, if available) to complete the development of the land within the District in the manner described herein. Accordingly, the Developer's financial statements are not included in this Official Statement. No property owner is obligated in any manner to continue to own any of the land it presently owns within the District. Foreclosure and Sale Proceedings Payment of the Special Taxes is secured by the parcels assessed. In the event an annual installment of the Special Taxes included in the County tax bill of an assessed parcel is not paid when due, the District can ..."" institute foreclosure proceedings in court to cause the parcel to be sold in order to recover the delinquent amount from the sale of proceeds (see "SOURCES OF REPAYMENT FOR THE BONDS" herein). Foreclosure and sale may not always result in the recovery of any or the full amount of delinquent Special Taxes. Sufficiency of the foreclosure sales proceeds to cover the delinquent amount depends in part upon the market for and the value of the parcel at the time of the foreclosure sale (see "Land Values" below). The current appraised value is some evidence of such future value. However, future events may result in significant changes from the current appraised value. Such events could include changes in land ownership, development plans and other factors affecting the progress of land development, legal requirements affecting the development of parcels, a downturn in the economy, as well as a number of additional factors. Any of these factors may result in a significant erosion in value, with consequent reduced security of the Bonds. Sufficiency of foreclosure sale proceeds to cover a delinquency may also depend upon the value of prior or parity liens and similar claims. A variety of governmental liens may presently exist or may arise in the future with respect to a parcel which, unless subordinate to the lien securing the Special Taxes, may effectively reduce the value of such parcel. Further, other governmental claims, such as hazardous substance claims, may affect the realizable value even though such claims may not rise to the status of liens. Timely foreclosure and sale proceedings with respect to a parcel may be forestalled or delayed by a stay in the event the owner of the parcel becomes the subject of bankruptcy proceedings. Further, should the stay not be lifted, payment of Special Taxes may be subordinated to bankruptcy law priorities. 22 ..."" 3:.1- AGEN~~E;;b' OF 3?-:'~~ ~ Land Values If a property owner defaults in the payment of the Special Tax, the District's only remedy is to commence foreclosure proceedings against the defaulting property owner's real property within the District for which the Special Tax has not been paid, in an attempt to obtain funds to pay the delinquent Special Tax. Therefore, the value of the land and improvements within the District is a critical factor in determining the investment quality of the applicable corresponding series of Bonds and, therefore, the Bonds. Reductions in property values within the District due to a downturn in the economy or the real estate market, events such as earthquakes, droughts, or floods, stricter land use regulations, or other events may adversely impact the security underlying the Special Tax. The District had the following two studies prepared in order to estimate the current aggregate market value ofland in the District. I. Market Absorption Study, Community Facilities District No. 2005-6 (City Center Townhomes) City of Lake Elsinore, Riverside County, California prepared by Empire Economics, Inc., Capistrano Beach, California, February 16,2006. 2. Appraisal Report, City of Lake Elsinore Community Facilities District No. 2005-6 (City Center Townhomes) prepared by Harris Realty Appraisal, Newport Beach, California (the "Appraisal"), dated February 15,2006 Collectively, the studies are referred to herein as the "Appraisal Documents". The purpose of the Appraisal was to estimate the bulk value of the land and improvements within the District in its "as is" condition (which assumes sale of the Bonds and construction of publicly-financed ~ improvements). On the basis of the assumptions and limitations described in the Appraisal and in the Market Absorption Study, the Appraiser has estimated the aggregate discounted "bulk sale" value of all the parcels in the District as of February IS, 2006 to be $17,800,000, which is approximately 5.29* times the principal amount of the Bonds Prospective purchasers of the Bonds should not assume that the land and improvements could be sold for the appraised amount at a foreclosure sale for delinquent Special Taxes. In particular, the values of individual properties in the District will vary in some cases significantly. The actual value of the land is subject to future events which might render invalid some or all of the basic assumptions of the Appraiser. The future value of the land can be expected to fluctuate due to many different, not fully predictable, real estate related investment risk factors, including, but not limited to: general tax law changes related to real estate, changes in competition, general area employment base changes, population changes, changes in real estate related interest rates affecting general purchasing power, advertising, changes in allowed zoning uses and density, natural disasters such as floods, earthquakes and landslides, and similar factors. Appraisals in general are the result of an inexact process, and estimated market value is dependent, in part, upon assumptions which mayor may not be realized and upon market conditions and perceptions of market value, which are likely to change over time. The appraisal valuations represent opinions only and are not intended to be absolutes or assurances of specific resale values. * Preliminary, subject to change. /""" 23 3 )... ." f-ljgmA mM NO. Of 31~ ~AO~l~-.~c . If ~?re than one appraiser .were employed, it is reasonable to assume that a reasonable range of value Oplll10nS on the. land. and Impr~)Vement value within. the District would be reflected depending upon ...." personal professIOnal mterpretatlOn of data, facts and circumstances reviewed and assumptions employed. Prospective purchasers should not assume that the land could be sold for the appraised amount at a foreclosure sale for delinquent Special Taxes. Copies of the Appraisal Documents are included in the Appendices. The summary herein of some of the conclusions in the Appraisal Documents does not purport to be complete. Reference is made to the Appraisal Documents for further information. The District makes no representations as to the value ofthe real property within the District, and prospective purchasers of the Bonds are referred to the Appraisal Documents referred to above in evaluating the value of real property within the District. Value to Lien Ratio Valuation to lien ratios are derived by dividing the appraised value of the property in the District by the principal amount of the Bonds.. For example, a 3:1 ratio means that the value is three times the total Bond amount. According to the Appraisal the value of the land within the District is $17,800,000. Therefore, the value to lien ratio is 5.29* to 1. The value-to-Iien ratio of individual parcels may be less or more than the aggregate value-to-lien ratio for an District. In particular the value of developed property is substantially more than undeveloped property (see "Concentration of Property Ownership" above). Investors must recognize the uncertainties with respect to the fair market values of the parcels, since the Bonds are secured by the Special Taxes levied on the parcels. See "BONDOWNERS' RISKS" herein. Potential purchasers of the Bonds should be aware that if a parcel bears a Special Tax liability in excess of its market value, then there may be little incentive for the owner of the parcel to pay the ...." Special Taxes on such parcel and little likelihood that such property would be purchased in a foreclosure sale. See "BONDOWNERS' RISKS" describing risks relating to market values of parcels in the District. The Progress of Land Development; Risks of Real Estate Secured Investments Land development is an activity subject to substantial risk. Risk factors include, without limitation, general or local economic conditions; local real estate market conditions; supply of or demand for competitive properties; changes in the real estate tax rate; governmental regulation and approval requirements, particularly environmental quality, endangered species, land use, zoning and building requirements; development, financing and marketing capabilities of the various landowners; natural disasters, including without limitation earthquakes, flood and fire which may result in uninsured losses; and accomplishment of development plans on a timely basis, including but not limited to the provision of infrastructure improvements in addition to the Facilities. Since these are largely business risks of the type that landowners customarily evaluate individually, and inasmuch as changes in land ownership may well mean changes in the evaluation with respect to any particular parcel, the District has undertaken the financing without regard to any such evaluation. Thus, the undertaking of the financing by the District in no way implies that the District has evaluated these risks or the reasonableness of these risks. * Preliminary, subject to change. 24 ....., AGENDA 'TEM ~O'_ 33~'" / --= pNJeJ50 OF~..:;2Sc2 /'"" Further the risk to the owners of the Bonds of development delays may be heightened when land ownership is concentrated in only a few landowners or developers. If ownership is concentrated, timely payment of the Special Taxes may be dependent upon the financing available to such owners or developers. Further, the continued progress of land development may be one of the present facts and circumstances forming the basis for the appraiser's opinion of value. Diminished values may lessen the effectiveness of foreclosure proceedings as a remedy. The Special Taxes are to be collected from the owners of property located within the District, and levy of the Special Taxes is not dependent on the completion of the development of the properties within the District (see "SPECIAL TAXES AND DEBT SERVICE" herein). Nevertheless, the extent of completion of the development of the property within the District may affect the ability and willingness of property owners to pay the Special Taxes and may affect the market value of any property foreclosed upon for nonpayment of installments of the Special Taxes. Geologic, Topographic and Climatic Conditions Land and improvement value can be adversely affected by a variety of additional factors, particularly those which may affect infrastructure and private improvements of the parcels assessed and the continued habitability and enjoyment of such private improvements. Such additional factors include, without limitation, geologic conditions such as earthquakes and overdraft of groundwater basins; topographic conditions such as earth movements and floods; and climatic conditions such as droughts. . Further, building codes require that some of these factors be taken into account, to a limited extent, in the design of private improvements of the parcels in the District. Design criteria in any of these circumstances are established upon the basis of a variety of considerations and may change, leaving previously designed improvements unaffected by more stringent subsequently established criteria. In ,...... general, design criteria reflect a balance at the time of establishment between the present costs of protection and the future costs of lack of protections, based in part upon a present perception of the probability that the condition will occur and the seriousness of the condition should the condition occur. Endangered and Threatened Species During the past several years, there has been an increase in activity at the State and federal level related to the listing and possible listing of certain plant and animal species found in the State as endangered species and in programs designed to set aside additional geographical areas for habitat conservation. Areas within the District have been included in the Western Riverside County Multi Species Habitat Conservation Plan (MSHCP) study area but such areas are exempt from any requirements because of a pre-existing Development Agreement. There is no assurance that such areas will not be included in future study areas. An increase in the number of endangered species and/or the designation of additional habitat areas to be subjected to conservation planning similar to areas subject to the Western Riverside County MSHCP is expected to curtail development in a number of areas in the State. The area proposed to be developed within the District is not known to contain any plant or animal species which either the California Fish and Game Commission or the United States Fish and Wildlife Service has listed as endangered or to the knowledge of the District proposed for addition to the endangered species list. Further approval may be required for any planned clearing of land or construction across or impacting waterways, creeks or other drainages. If required, there is no assurance that such approvals will be obtained and that development will be permitted to proceed as projected. ,...... On a regular basis, new species are proposed to be added to the State and federal protected species lists. Regardless of the stage of entitlements and actual development of a particular development, any action by the State or federal governments to protect species located on or adjacent to the property within the District could negatively affect the Developer's ability to complete the development of the properties within the District as planned. This, in turn, could reduce the ability or the willingness of the property 25 ... ~ ".if pf,.'OA nm NO._ 5~ . .--= 1\0&''6. ICe:, 33~ p.Pl:;E~ OF . owners to pay the Special Taxes when due and would likely reduce the value of the land and the potential revenues available at a foreclosure sale for delinquent Special Taxes. Earthquakes Southern California is among the most seismically active regions in the United States. The occurrence of seismic activity in the District could result in substantial damage to properties in the District which, in turn, could substantially reduce the value of such properties and could affect the ability or willingness of the property owners to pay their Special Taxes. Any major damage to structures as a result of seismic activity could result in a greater reliance on Undeveloped Property in the payment of Special Taxes. In the event of a severe earthquake, 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 an earthquake, reducing the resulting proceeds of foreclosure sales in the event of delinquencies in the payment of Special Taxes. Certain procedures and design standards are required to be followed during the construction of buildings within the District to ensure that each building is designed and constructed to meet, at a minimum, the highest seismic standards required by law. Legal Requirements Other events which may affect the value of a parcel include changes in the law or application of law. Such changes may include, without limitation, local growth control initiatives; local utility connection moratoriums; and local application of statewide tax and governmental spending limitation measures. Other Possible Claims Upon the Values of an Assessed Parcel In addition to existing property taxes, other governmental obligations, such as general obligation bonds, assessments or special taxes may be authorized in the future, the tax, assessment or charge for which may become an obligation of one or more of the parcels within the District and may be secured by a lien on a parity with the lien of the Special Taxes securing the Bonds. In general, as long as the Special Taxes securing the Bonds are collected on the County tax roll, the Special Taxes and all other taxes, assessments and charges also collected on the tax roll are on a parity with each other. Questions of priority become significant when collection of one or more of the taxes, assessments or charges is sought by some other procedure, such as foreclosure and sale. Otherwise, in the event of such foreclosure proceedings, the Special Taxes will generally be on a parity with the other taxes, assessments and charges. The Special Taxes will have priority over non-governmental liens on a parcel, regardless of whether or not the non-governmental liens are in existence at the time of creation of any lien securing the Special Taxes. While governmental taxes, assessments and charges are a common claim against the value of a parcel, other less common claims may 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 of the parcel relating to releases or threatened releases of hazardous substances. Under many of these laws, the owner (or operator) is obligated to remedy a hazardous substance condition whether or not the owner (or operator) has anything to do with creating or handling the hazardous substance. The effect, therefore, should any of the parcels in the District be affected by a hazardous substance, is to reduce the marketability and value of the parcel by the costs of remedying the condition, because the purchaser, upon becoming the owner, will becomeoobligated to remedy the condition just as is the seller. """ """ ......" \';~(' :3:l .----= PP~JM'~Q{f =3~~:: 26 ~ The values expressed herein, do not take into account the possible reduction in marketability and value of any of the parcels by reason of the possible liability of the owner (or operator) for the remedy of a hazardous substance condition of the parcel. The District is not aware that the owner (or operator) of any of the parcels has such a current liability with respect to any of the parcels in the District. However, it is possible that such liabilities do currently exist. Further, it is possible that liabilities may arise in the future with respect to one or more of the parcels resulting from the existence, currently, on the parcel of a substance presently classified as hazardous or may arise in the future resulting from the existence, currently, on the parcel of a substance presently not classified as hazardous but which may in the future be so classified. Further, such liabilities may arise not simply from the existence of a hazardous substance but from the method of handling it. All of these possibilities could significantly reduce the value of a parcel. Bankruptcy Proceedings ~ Regardless of the priority of the Special Taxes securing the Bonds over non-governmental liens on parcels, the exercise by the District of the foreclosure and sale remedy may be forestalled or delayed by bankruptcy, reorganization, insolvency, or other similar proceedings of the owner of a parcel. The federal bankruptcy laws provide for an automatic stay of foreclosure and sale proceedings, thereby delaying such proceedings perhaps for an extended period. Delay in exercise of remedies, especially if the owners own parcels the Special Taxes of which are significant or if bankruptcy proceedings are instituted with respect to a number of owners owning parcels the Special Taxes of which is significant, may result in periodic Special Tax collections which may be insufficient to pay the debt service on the Bonds. Further, should remedies be exercised under the bankruptcy law against the parcels, payment of Special Taxes may be subordinated to other claims in the bankruptcy proceedings. Thus, certain claims may have priority over a claim for unpaid Special Taxes, even though, in the absence of the bankruptcy proceedings, no such priority would exist. Bankruptcy and Foreclosure Delays The payment of the Special Taxes and the ability of the District to foreclose the lien of a delinquent unpaid Special Tax, as discussed in the section herein entitled "SOURCES OF PAYMENT FOR THE BONDS" may be limited by bankruptcy, insolvency, or other laws generally affecting creditors' rights or by the laws of the State of California relating to judicial foreclosure. The various legal opinions to be delivered concurrently with the delivery of the Bonds (including Bond Counsel's approving legal opinion) will be qualified as to the enforceability of the various legal instruments, by bankruptcy, reorganization, insolvency or other similar laws affecting the rights of creditors generally. Although bankruptcy proceedings would not cause the Special Taxes to become extinguished, bankruptcy of a property owner or of a partner or other owner of a property owner within the District could result in a delay in prosecuting superior court foreclosure proceedings and could result in loss of priority of the lien securing any Special Taxes with respect to Special Taxes levied while bankruptcy proceedings are pending. In addition, the amount of any lien on property securing the payment of delinquent Special Taxes could be reduced if the value of the property were determined by the bankruptcy court to have become less than the amount of the lien, and the amount of the delinquent Special Taxes in excess of the reduced lien could be treated as an unsecured claim by the court. Such delay or loss of priority or nonpayment, would increase the likelihood of a delay or default in payment of the principal of and interest on the Bonds and the possibility of delinquent Special Tax installments not being paid in full. To the extent a significant percentage of the property in the District continues to be owned by a limited number of property owners, the payment of the Special Taxes and the ability of the District to foreclose ~ 27 AGENDA ITEM NO. PAGE 118/ 3:2.. OF_nt:,.... the lien of a delinquent unpaid Special Taxes installment could be delayed by bankruptcy, insolvency, or other laws generally affecting creditors' rights or by the laws of the State relating to judicial foreclosure. ......, On July 30, 1992, the United States Court of Appeals for the Ninth Circuit issued its opinion in a bankruptcy case entitled In re Glasply Marine Industries. In that case, the court held that ad valorem property taxes levied by Snohomish County in the State of Washington after the date that the property owner filed a petition for bankruptcy were not entitled to priority over a secured creditor with a prior lien on the property. The court upheld the priority of unpaid taxes imposed after the filing of the bankruptcy petition as "administrative expenses" of the bankruptcy estate, payable after all secured creditors. As a result, the secured creditor was to foreclose on the property and retain all of the proceeds of the sale except the amount ofthe pre-petition taxes. According to the court's ruling, as administrative expenses, post-petition taxes would have to be paid, assuming that the debtor has sufficient assets to do so. In certain circumstances, payment of such administrative expenses may be allowed to be deferred. Once the property is transferred out of the bankruptcy estate (through foreclosure or otherwise) it would at that time become subject to current ad valorem taxes. The Act provides that the Special Taxes are secured by a continuing lien, which is subject to the same lien priority in the case of delinquency as ad valorem taxes. No case law exists with respect to how a bankruptcy court would treat the lien for the Special Taxes levied after the filing of a petition in bankruptcy. Glasply is controlling precedent for bankruptcy courts in the State. If the Glasply precedent was applied to the levy of the Special Tax, the amount of Special Tax received from parcels whose owners declared bankruptcy could be reduced. It should also be noted that on October 22, 1994, Congress enacted 11 U.S. C. Section 362(b)(18), which added a new exception to the automatic stay for ad valorem property taxes imposed by a political subdivision after the filing of a bankruptcy petition. Pursuant to this new provision of law, in the event of a bankruptcy petition filed on or after October 22, 1994, the lien for ad valorem taxes in subsequent fiscal ......, years will attach even if the property is part of the bankruptcy estate. Bondowners should be aware that the potential effect of 11 U.S. C. Section 362(b)(l8) on the Special Taxes depends upon whether a court were to determine that the Special Taxes should be treated like ad valorem taxes for this purpose. Additional Taxation On June 3, 1986, California voters approved an amendment to Article XIIIA of the California Constitution to allow local governments and school districts to raise their property tax rates above the constitutionally mandated 1 % ceiling for the purpose of repaying certain new general obligation debt issued for the acquisition or improvement of real property and approved by at least two-thirds of the votes cast by the qualified electorate. If any such voter-approved debt is issued, it may be on a parity with the lien of the Special Taxes on the parcels within the District. Parity Taxes and Special Assessments The Special Taxes and any penalties thereon will constitute a lien against the lots and parcels of land within the District on which they will be annually imposed until they are paid in full. Such lien is on a parity with all special taxes and special assessments levied by other public entities, agencies and districts and is co-equal to and independent of the lien for general property taxes regardless of when they are imposed upon the same real property. The Special Taxes have priority over all existing and future private liens imposed on the real property within the District, however, has no control over the ability of other public entities, agencies and districts to issue indebtedness secured by special taxes or assessments payable from all or a portion of the real property within the District. Any such special taxes or 28 ......, t\OENDA ITEM NOo_ 3 ~ ~c " PAGE J VJt.-"cOF =33~w#. ~ assessments may have a lien on such real property on a parity with the Special Taxes (see "SPECIAL TAXES AND DEBT SERVICE" herein). Accordingly, the liens on the real property within the District could greatly increase, without any corresponding increase in the value of the property within the District and thereby severely reduce the lien to value ratio of the land secured public debt existing at the time the Bonds are issued. The imposition of such additional indebtedness could also reduce the willingness and ability of the property owners within the District to pay the Special Taxes when due. Disclosure to Future Land Buyers A "Notice of Special Tax Lien" for the District was recorded pursuant to Section 53328.3 of the Act and Section 3114.5 of the Streets and Highways Code, with the County Recorder for the County (the "County Recorder"). The Notice sets forth, among other things, the Rate and Method of Apportionment, the Assessor's Parcel Numbers within the District as of the date of recording the Notice, and the boundaries of the District by reference to the map(s) recorded with the County Recorder. While title insurance and search companies normally refer to such notices in title reports, and sellers of property within the District are required to give prospective buyers a notice of special tax in accordance with Sections 53360.2 or 53341.5 of the Act, there can be no assurances that such reference will be made or notice given, or if made or given, that prospective purchasers or lenders will consider such Special Tax obligation in the purchase of land within the District or the lending of money thereon. Failure to disclose the existence of the Special Tax may affect the willingness and ability of future landowners within the District to pay the Special Tax when due. Billing of Special Taxes ~ A special tax can result in a substantially heavier property tax burden being imposed upon properties within a community facilities district than elsewhere in a city or county, and this in turn can lead to problems in the collection of the special tax. In some community facilities districts the taxpayers have refused to pay the special tax and have commenced litigation challenging the special tax, the community facilities district and the bonds issued by the District. Under provisions of the Act, the Special Taxes are billed to the properties within the District which were entered on the Assessment Roll of the County Assessor by January 1 of the previous fiscal year on the regular property tax bills sent to owners of such properties. Such Special Tax installments are due and payable, and bear the same penalties and interest for non-payment, as do regular property tax installments. These Special Tax installment payments cannot be made separately from property tax payments. Therefore, the unwillingness or inability of a property owner to pay regular property tax bills as evidenced by property tax delinquencies may also indicate an unwillingness or inability to make regular property tax payments and installment payments of Special Taxes in the future. See "SOURCES OF PAYMENT FOR THE BONDS - Covenant for Superior Court Foreclosure" for a discussion of the provisions which apply, and procedures which the District is obligated to follow, in the event of delinquency in the payment of installments of Special Taxes. Collection of Special Tax In order to pay debt service on the Bonds, it is necessary that the Special Tax levied against land within the District be paid in a timely manner. the District has covenanted in the Fiscal Agent Agreement under certain conditions to institute foreclosure proceedings against property with delinquent Special Tax in order to obtain funds to pay debt service on the Bonds. If foreclosure proceedings were 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. In the event such superior court foreclosure is ,,--. necessary, there could be a delay in principal and interest payments on the Bonds pending prosecution of 29 - r ::;''''; r:, "2:>;;1 ." ..... PluDE =LfL$J" 3:S'. the foreclosure proceedings and receipt of the proceeds of the foreclosure sale, if any. No assurances can be given that the real property subject to foreclosure and sale at a judicial foreclosure sale will be sold or, '-" if sold, that the proceeds of such sale will be sufficient to pay any delinquent Special Tax installment. Although the Act authorizes the District to cause such an action to be commenced and diligently pursued to completion, the Act does not specify the obligations of the District with regard to purchasing or otherwise acquiring any lot or parcel of property sold at the foreclosure sale if there is no other purchaser at such sale. See "SOURCES OF PAYMENT FOR THE BONDS - Covenant for Superior Court Foreclosure", Maximum Rates Within the limits of the Rate and Method of Apportionment, the District may adjust the Special Tax levied on all property within the District to provide an amount required to pay debt service on the Bonds and other obligations of the District, and the amount, if any, necessary to pay all annual Administrative Expenses and make rebate payments to the United States government. However, the amount of the Special Tax that may be levied against particular categories of property within the District is subject to the maximum rates provided in the Rate and Method of Apportionment. There is no assurance that the maximum rates will at all times be sufficient to pay the amounts required to be paid by the Fiscal Agent Agreement. See "SPECIAL TAXES AND DEBT SERVICE". Exempt Properties Certain properties are exempt from the Special Tax in accordance with the Rate and Method of Apportionment and provisions of the Act. The Act provides that properties or entities of the State, federal or local government at the time of formation of the District are exempt from the Special Tax; provided, however, that property within the District acquired by a public entity through negotiated transactions, or by gift or devise, which is not otherwise exempt from the Special Tax will continue to be subject to the Special Tax. 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. If for any reason property subject to the Special Tax 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 authorized rate of levy, the Special Tax may be reallocated to the remaining taxable properties 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 the timely payment of the Special Tax; however, the amount of Special Tax to be levied and collected from the property owner is subject to the Maximum Special Tax as set forth in the Rate and Method of Apportionment and to the limitation in the Act that under no circumstances may the Special Taxes levied on any residential parcel be increased by more than ten percent as a consequence of delinquency by the owner of any parcel. If a substantial portion of 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 Act further provides that no other properties or entities are exempt from the Special Tax unless the properties or entities are expressly exempted in a resolution of consideration to levy a new special tax or to alter the rate or method of apportionment of an existing special tax. The Act would prohibit the City Council, acting as the legislative body of the District, from adopting a resolution to reduce the rate of the Special Tax or terminate the levy of the Special Tax unless the City Council, acting as the legislative body of the District determined that the reduction of termination of the Special Tax "would not interfere with the timely retirement" ofthe Bonds. See "BONDOWNERS' RISKS - Right to Vote on Taxes Act" below. 30 ...., o ~1 ~ ACENDA\lE~~J '-;F 3~~ pAGEJJ[z:I-- 0 - ".- ".- ~ Insufficient Special Taxes Under the Rate and Method of Apportionment, the annual amount of Special Tax to be levied on each taxable parcel in the District will be based primarily on whether such parcel is developed or not and, for Developed Property, on the type of structure and square footage of buildings constructed. See "APPENDIX D". Accordingly, to the extent Undeveloped Property does not become Developed Property, the collection of the Special Taxes will be dependent on the willingness and ability of the owners of Undeveloped Property to pay such Special Taxes when due. Such event may result in an unwillingness of such owners of the Undeveloped Property to pay additional Special Taxes. No Acceleration Provision The Fiscal Agent Agreement does not contain a provision allowing for the acceleration of the principal of the Bonds in the event of a payment default or other default under the terms of the Bonds or the Fiscal Agent Agreement. Property Controlled by Federal Deposit Insurance Corporation and other Federal Agencies The District's ability to collect interest and penalties specified by State law and to foreclose the lien of a delinquent Special Tax payment may be limited in certain respects with regard to properties in which the Internal Revenue Service, the Drug Enforcement Agency, the Federal Deposit Insurance Corporation (the "FDIC") or other similar federal agencies has or obtains an interest. Specifically, with respect to the FDIC, on June 4, 1991, the FDIC issued a Statement of Policy Regarding the Payment of State and Local Real Property Taxes. The 1991 Policy Statement was revised and superseded by a new Policy Statement effective January 9, 1997 (the "Policy Statement"). The Policy Statement provides that real property owned by the FDIC is subject to state and local real property taxes only if those taxes are assessed according to the property's value, and that the FDIC is immune from real property taxes assessed on any basis other than property value. According to the Policy Statement, the FDIC will pay its proper tax obligations when they become due and payable and will pay claims for delinquent property taxes as promptly as is consistent with sound business practice and the orderly administration of the institution's affairs, unless abandonment of the FDIC's interest in the property is appropriate. The FDIC will pay claims for interest on delinquent property taxes owed at the rate provided under state law, to the extent the interest payment obligation is secured by a valid lien. The FDIC will not pay any amounts in the nature of fines or penalties and will not pay nor recognize liens for such amounts. If any property taxes (including interest) on FDIC owned property are secured by a valid lien (in effect before the property became owned by the FDIC), the FDIC will pay those claims. The Policy Statement further provides that no property of the FDIC is subject to levy, attachment, garnishment, foreclosure or sale without the FDIC's consent. In addition, the FDIC will not permit a lien or security interest held by the FDIC to be eliminated by foreclosure without the FDIC's consent. The Policy Statement states that FDIC generally will not pay non ad valorem taxes, including special assessments, on property in which it has a fee interest unless the amount of tax is fixed at the time that the FDIC acquires its fee interest in the property, nor will it recognize the validity of any lien to the extent it purports to secure the payment of any such amounts. Special taxes imposed under the Mello- Roos Act and a special tax formula which determines the special tax due each year, are specifically identified in the Policy Statement as being imposed each year and therefore covered by the FDIC's federal immunity. With respect to property in California owned by the FDIC on January 9, 1997, and that was owned by the Resolution Trust Corporation (the "RTC") on December 31, 1995, or that became property of the FDIC through foreclosure of a security interest held by the RTC on that date, the FDIC will continue the RTC's prior practice of paying special taxes imposed pursuant to the Mello-Roos Act if the taxes were imposed prior to the RTC's acquisition of an interest in the property. All other special taxes, including the Special Taxes which secure the Bonds may be challenged by the FDIC. 31 AGENDA ITEM NO. 3:2 ~ . ~~_~,.oF~~~ ~ T.he ~DIC h~ filed c1~ims agai,:st the County of Orange with respect to Mello-Roos community facilities dIstnct specIal taxes In the Umted States Bankruptcy Court and in Federal District Court in which the ~ FDIC has taken a position similar to the position outlined in the Policy Statement. While all of such claims have not been resolved, the Bankruptcy Court has issued a tentative ruling in favor of the FDIC on certain of such claims. The County of Orange has appealed such ruling and the FDIC has cross.;.appealed. The decision ofthe United States Court of Appeals for the 9th Circuit (the "9th Circuit Court") was filed on August 28, 2001. In its decision, the Court stated that the FDIC, as a federal agency, is exempt from the Mello-Roos special tax. The FDIC has also filed suit (the "post-bankruptcy" suit) regarding special taxes imposed after 1994. However, such action has been stayed pending resolution of the 9th Circuit Court appeal by the FDIC regarding the bankruptcy case. The post-bankruptcy suit has recently been consolidated with the cases filed by the FDIC against other California counties and is pending in the United States District Court in Los Angeles. The FDIC has filed a motion to lift the bankruptcy stay. 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 a parcel in which the FDIC has an interest, although prohibiting the lien of the FDIC to be foreclosed on at a judicial foreclosure sale would likely reduce the number of or eliminate the persons willing to purchase such a parcel at a foreclosure sale. Owners of the Bonds should assume that the District will be unable to foreclose on any parcel owned by the FDIC. The District has not undertaken to determine whether the FDIC currently has, or is likely to acquire, any interest in any of the parcels, and therefore expresses no view conc.erning the likelihood that the risks described above will materialize while the Bonds are outstanding. Limitations on Remedies Remedies available to the Owners 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 the Bonds. Bond Counsel has limited its opinion as to the enforceability of the Bonds and of the Fiscal Agent Agreement to the extent that enforceability may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer, moratorium, or others similar laws affecting generally the enforcement of creditor's rights, by equitable principles and by the exercise of judicial discretion. Additionally, the Bonds are not subject to acceleration in the event of the breach of any covenant or duty under the Fiscal Agent Agreement. 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. Enforceability of the rights and remedies of the owners of the Bonds, and the obligations incurred by the District, may become subject to the federal bankruptcy code and bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or affecting the enforcement of creditor's rights generally, now or hereafter in effect, equity principles which may limit the specific enforcement under State law of certain remedies, the exercise by the United States of America of the powers delegated to it by the Constitution, the reasonable and necessary exercise, in certain exceptional situations, of the police powers inherent in the sovereignty of the State and its governmental bodies in the interest of serving a significant and legitimate public purpose and the limitations on remedies against joint powers authorities in the State. See "BONDOWNERS' RISKS -Bankruptcy and Foreclosure Delays", "Billing of Special Taxes" and "Property Controlled by Federal Deposit Insurance Corporation and Other Federal Agencies" herein. ~ Right to Vote on Taxes Act An initiative measure commonly referred to as the "Right to Vote on Taxes Act" was approved by the voters of the State of California at the November 5, 1996 general election. Proposition 218 added Article XIIIC ("Article XIIIC") and Article XIIID to the California Constitution. According to the "Title and Summary" of Proposition 218 prepared by the California Attorney General, the Proposition 218 limits "the authority of local governments to impose taxes and property-related assessments, fees and charges." 32 ~ ACENDA ITEM NO. 3 ::2 . PACE~OF 3.1~ "........ Generally, the provisions of Proposition 218 have not yet been interpreted by the courts,. ~lthough a number oflawsuits have been filed requesting the courts to interpret VarIOUS aspects ofProposlt1on 218. Among other things, Section 3 of Article XIIIC 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." Proposition 218 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, Proposition 218 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 Proposition 218 unless such legislative body determines that the reduction or termination of the special tax would not interfere with the timely retirement of that debt. Although the matter is not free from doubt, it is likely that the exercise by the voters in the District of the initiative power referred to in Article XIIIC to reduce or terminate the Special Tax is subject to the same restrictions as are applicable to the District, pursuant to the Act. Accordingly, although the matter is not free from doubt, it is likely that the Proposition 218 has not conferred on the voters in the District the power to repeal or reduce the Special Taxes if such reduction would interfere with the timely retirement of the Bonds. It may be possible, however, for voters or the District to reduce the Special Taxes in a manner which does not interfere with the timely repayment of the Bonds, but 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 levy of Special Taxes for Administrative Expenses. Furthermore, no assurance can be given with respect to the future levy of the Special Taxes in amounts greater than the amount necessary for the timely retirement of the Bonds. The interpretation and application of Proposition 218 will ultimately be determined by the courts with respect to a number of the matters discussed above, and it is not possible at this time to predict with "........ certainty the outcome of such determination or the timeliness of any remedy afforded by the courts. Ballot Initiatives and Legislative Measures Proposition 218 was adopted pursuant to a measure qualified for the ballot pursuant to California's constitutional initiative process and the State Legislature has in the past enacted legislation which has altered the spending limitations or established minimum funding provisions for particular activities. From time to time, other initiative measures could be adopted by California voters or legislation enacted by the State Legislature. The adoption of any such initiative or enactment of legislation might place limitations on the ability of the State, the City or local districts to increase revenues or to increase appropriations or on the ability of a property owner to complete the development of the property. Early Bond Redemption The Bonds are subject to optional, special mandatory and mandatory redemption prior to their respective stated maturities. Special mandatory redemption from prepayment of Bonds from amounts constituting prepayments of Special Taxes may occur on any date (see "THE BONDS - Redemption" herein). Loss of Tax Exemption As discussed under the caption "LEGAL MATTERS - Tax Exemption" herein, interest on the Bonds could become includable in 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 in violation of its covenants contained in the Fiscal Agent Agreement. Should such an event of taxability occur, the Bonds are not subject to special redemption or any increase in interest rate and will remain outstanding until maturity or until redeemed under one of the redemption provisions contained in the Fiscal Agent Agreement. /""""-' 33 '!J ')--- J\(j~'OA \~EM NO,__~~ ~AC}~; J.Xt:/=--, IRS Audits The Internal Revenue Service (the "IRS") has initiated an expanded program for the auditing of tax- exempt 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 similar bonds). ...." Secondary Market 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. Occasionally, because of general market conditions 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. ...." 34 ......." S~~lTI/i! !'1't'I~ OOlc_.~?J ~ . - _..~. Iffw{';,E/62~~' 33~ /""" SPECIAL TAXES AND DEBT SERVICE Administration of the Special Tax The District is required each Fiscal Year to determine the amount of Special Taxes within the District needed to pay debt service on the Bonds and Administrative Expenses of the District related to the District (the "Special Tax Requirement"). The District is expected to incur Administrative Expenses within the District for the levy and collection of the Special Taxes, foreclosure proceedings, Fiscal Agent fees and arbitrage rebate calculations. The District is required to communicate with the County Auditor to ascertain the relevant parcels within the District on which the Special Taxes are to be levied, taking into account any parcel splits during the preceding and then current Fiscal Year. The District is required by resolution to provide for the levy of the Special Taxes within the District in the then current Fiscal Year. A certified list of all parcels subject to the Special Tax, including the amount of the Special Tax to be levied on each such parcel, is filed by the District with the County Auditor on or before the tenth (IOth) day of August of that tax year. The Special Taxes so levied may not exceed the authorized amounts as provided in the Rate and Method of Apportionment relating to the District (see "Rate and Method of Apportionment" below). The Special Taxes are payable ~nd are collected in the same manner and at the same time and in the same installment as the general taxes on real property are payable and have the same priority, become delinquent at the same times and in the same proportionate amounts and bear the same proportionate penalties and interest after delinquency as do the general taxes on real property. ~ Special Taxes are due in two equal installments. Special Taxes levied become delinquent on the following December 10th and A pril 10th. Currently a 10% penalty is added to delinquent taxes. When received, the Special Taxes are required to be deposited in a separate Special Tax Fund for the District to be held by the City and transferred by the City to the Fiscal Agent as provided in the Fiscal Agent Agreement. As of the delivery date of the Bonds, the District has retained Harris & Associates to assist in the preparation of the Special Tax roll and the determination of the amount of Special Taxes required in each Fiscal Year. Rate and Method of Apportionment The District levies the Special Taxes in accordance with the Rate and Method of Apportionment (see "APPENDIX D - RATE AND METHOD OF APPORTIONMENT"). Because the Special Taxes have been authorized by a two-thirds (2/3) vote ofthe qualified electorate within the District, the Special Taxes are a special tax imposed within the limitations of Section 4 of Article XIIIA of the State Constitution. The City Council, as the legislative body of the District, has the power and is obligated, pursuant to the covenants contained in the Fiscal Agent Agreement, to cause the levy and collection of the Special Taxes annually. The Rate and Method of Apportionment may be modified pursuant to the provisions of the Act provided that the District determines that such modification will not impair the timely payment of the Bonds. The District has covenanted that no modification of the maximum authorized Special Tax shall be approved which would prohibit the District from levying the Special Tax in any Fiscal Year at such a rate as could generate Maximum Special Tax Revenues in each Fiscal Year at least equal to 110% of annual debt service in such Fiscal Year. ~ 35 AGENDA ITEM NO._. :) S "l?-= PAOEJJnq _OF_ When a community facilities district is formed, a special tax may be levied on each parcel of taxable property within the community facilities district to pay for the construction, acquisition and rehabilitation '-'" of public facilities, to pay for authorized services or to repay bonded indebtedness or other related expenses incurred by the community facilities district. This special tax may be apportioned in any reasonable manner; however, the tax may not be apportioned on an ad valorem basis. Pursuant to Section 53325.3 of the Act, the tax imposed "is a Special Tax and not a special assessment, and there is no requirement that the tax be apportioned on the basis of benefit to any property." When more than one type of land use or houses of different sizes are present within a community facilities district, several criteria may be considered when apportioning the special tax. Generally, criteria are based on building square footage or residential floor area, acreage, and land use. Categories based on such criteria are established to differentiate between parcels of property. Specific special tax levels are assigned to each category, with all parcels within a category assigned the same special tax rate. In the District categories have been established for Developed Property, as shown in the Tables below. The Special Tax for a single family residential property will vary directly with the amount of residential floor area on each parcel. Assigned Special Tax Rates The tables below show the Assigned Special Tax rates for fiscal year 2005/06 that are to be levied against Developed Property within the District. The Maximum Special Taxes for Developed Property cannot exceed the rates shown for fiscal year 2005/06, except when the Backup Special Tax is used as discussed below. The Assigned Special Taxes and Backup Special Taxes will increase at a rate of two percent per year. Each year, the District shall levy the Special Tax within the District, subject to the methodology and Maximum Special Taxes set forth in the Rate and Method of Apportionment, in an amount sufficient to meet the Special Tax Requirement. ,.." Backup Special Tax Pursuant to the Rate and Method of Apportionment, the Maximum Special Tax for Developed Property within the District is the greater of (i) the amount derived by application of the Assigned Special Tax or (ii) the amount derived by application of the Backup Special Tax. The Backup Special Tax will increase at a rate of two percent per year. Under certain circumstances, the Special Tax for some parcels classified as Developed Property will be increased above the Assigned Special Tax until the Special Tax Requirement is met. However, under no circumstances will the Special Tax on an Assessor's Parcel of Developed Property be increased above the greater of the Backup Special Tax or the applicable Assigned Special Tax. The Assigned Special Tax Rates under the Rate and Method of Apportionment have been designed pursuant to City Policy not to exceed a total tax rate percentage of 2% when taking into account all taxes and assessments on property of all jurisdictions. The following tables shows the assumptions used in setting the Assigned Tax Rates and the effective tax rate within the District. Delinquencies and Foreclosure Actions No parcels within the District have experienced any delinquencies. The District has covenanted to initiate foreclosure action in the Superior Court against parcels with delinquent Special Taxes as provided in the Fiscal Agent Agreement. 36 ,.." I\GEN~~lit~~3~ ",.-.. ",.-.. .r-.. Foreclosure proceedings are directed by the District through a notification to foreclosure counsel as to the delinquent assessor parcel numbers for which foreclosure proceedings are to be initiated. The District first removes the delinquent Special Taxes from the County Tax Roll, as required by law. Foreclosure counsel then initiates a request for a title search to identify the current legal owner of a delinquent parcel. Foreclosure counsel also sends a written demand for payment to the owner shown on the Tax Roll, followed by the filing of a complaint with the Superior Court in Riverside County and recording a lis pendens against the property at the office of the County Recorder. Each legal owner and all holders of any other interest in the land must file an answer to the complaint within 30 days following the completion of service of process on them. If no answer is filed with such 30 day period, foreclosure counsel files a request that a default judgment be entered by the Court. If any party files an answer, then the case must be litigated, and foreclosure counsel will typically file a motion for summary judgment. Following the entry of a judgment, whether by default or otherwise, against all defendants, foreclosure counsel requests a writ of sale from the Court for delivery to the Sheriff. The writ of sale is delivered to the Sheriff with instructions to execute on the delinquent parcel. Levy by the Sheriff consists of posting notice on the delinquent property, followed by mailing of notice to the last known address of the legal owner and publication of the notice of levy. Thereafter, the delinquent property owner is entitled to a redemption period of 120 days. Following such 120 day period, foreclosure proceedings can continue following tlle publication and mailing of a notice of sale of the delinquent parcel or parcels, which sale must be at least 20 days following such notice. The foreclosure process described above typically takes at least six months from the date on which a judgment is entered and can take substantially longer. 37 F".'-,!;1,j\ \\?6'.~ ___,~:O.,"""~ '~-,' I 7ru.''-' 3 ~l '._:.I~(~r~,____~:J: . ~ - f'-l ~ e = .c ~ ~ "",,\C ~~ ......lI) =e ~e UN ~.,O; """.. ~ =U~ C- .. - f'-l \C ~ -ICj ~lI)f'-l e.. ~e~ ~N~ ~t;1; c... .C ~ =...... ~ .,O.~ ~ ..Q~ Uf'-l~ ~ > ~; :=Cj .. ~ ~= ~~ .,0 .. C = e e = u ....; !::: o U .... "0 o -< t) ~ o(l o ...... 'g. Vl o ::E ~ i ll) (.) 'C t:l-. S o ::I: ...... o 'cf? Vl ro Vl ll) ~ ~ 00 C"i ~ '-' "..-..- Debt Service Coverage The following table presents the projected annual coverage on the Bonds based upon the realization of certain assumptions and the aggregate Assigned Special Tax Rates. No allowance was made for delinquencies. The projection assumes build out at the following unit mix. TABLE NO.1 COMMUNITY FACILITIES DISTRICT NO. 2005-6 (CITY CENTER TOWNHOMES) RATES AND LAND USE ASSUMPTIONS FISCAL YEAR 2005/06 House Square No. of Units Assigned Tax Total Special Footage Per Unit Tax Less than 1,000 0 $1,182 0 1,000-1,199 48 $1,333 $63,984 1,200-1,399 48 $1,661 79,728 1,400-1,499 0 $1,770 0 "..-..- Greater than 1 ,500 48 $1,839 88.272 144 $231,984 Until such time as the receipt of Special Taxes from the levy of the assigned tax rate is sufficient to pay debt service on Bonds, the Rate and Method Apportionment provides for the levy of an undeveloped property tax (see "APPENDIX D - Rate and Method of Apportionment" and "Concentration of Property Ownership" above). The receipt of Special Taxes is subject to several variables described herein. The District provides no assurance that the Special Taxes and the coverage ratios shown will be achieved. "..-..- 39 3.). ;M)EN~A '~M NO,_ QF ~ 1,~ i\fl'P,GE~ - TABLE NO.2 COMMUNITY FACILITIES DISTRICT NO. 2005-6 ...." (CITY CENTER TOWNHOMES) SPECIAL TAX BONDS 2006 SERIES A DEBT SERVICE COVERAGE Year Assilmed Rate EXDense Taxes Debt Service Ratio 2007 $236,624 ($25,500) $211,124 2008 241,356 (26,010) 215,346 2009 246, 184 (26,530) 219,653 2010 251,107 (27,061) 224,046 2011 256, 129 (27,602) 228,527 2012 261,252 (28,154) 233,098 2013 266,477 (28,717) 237,760 2014 271,807 (29,291) 242,515 2015 277,243 (29,877) 247,365 2016 282,788 (30,475) 252,313 2017 288,443 (31,084) 257,359 2018 294,212 (31,706) 262,506 2019 300,096 (32,340) 267,756 2020 306,098 (32,987) 273,111 2021 312,220 (33,647) 278,574 2022 318,465 (34,320) 284,145 2023 324,834 (35,006) 289,828 2024 331,331 (35,706) 295,625 2025 337,957 (36,420) 301,537 2026 344,716 (37,149) 307,568 2027 351,611 (37,892) 313,719 '-' 2028 358,643 (38,649) 319,994 2029 365,816 (39,422) 326,393 2030 373,132 (40,211) 332,921 2031 380,595 (41,015) 339,580 2032 388,207 (41,835) 346,371 2033 395,971 (42,672) 353,299 2034 403,890 (43,526) 360,365 2035 411,968 (44,396) 367,572 2036 420,207 (45,284) 374,923 '-' 40 3d. AGENDA lTEM NO. .., ,- PACE11? OF3-~~...... ,-, THE CITY The City of Lake Elsinore (the "City") was founded in 1883 and incorporated on April 23, 1888, and in 1893 the Elsinore Valley, previously in San Diego County, became a part of the new County of Riverside. The City is located 73 miles east of Los Angeles, 472 miles south of San Francisco, and 74 miles north of San Diego. It covers an area of approximately 39.1 square miles with 10.5 miles of lake shore and elevation of 1,258 feet above sea level. The City is incorporated as a general law city. The City has a Council/Manager form of municipal government. The City Council appoints the City Manager who is responsible for the day-to-day administration of City business and the coordination of all departments of the City. The City Council is composed of five members elected bi-annually at large to four-year alternating terms. The mayor is selected by the City Council from among its members. The City employs a staff of 37 full-time employees and 18 part-time employees under the direction of the City Manager. The City Council members and term expiration dates are as follows: Council Members Robert Magee, Mayor Robert Schiffner, Mayor Pro Tem Genie Kelley, Member Thomas Buckley, Member Daryl Hickman, Member Term Expires November, 2008 November, 2008 November, 2008 November, 2006 November, 2006 ",......... Current City administrative staff include: Robert Brady, City Manager Matt N. Pressey, Director of Administrative Services Frederick Ray, City Clerk As of the delivery date of the Bonds, the District has retained Harris & Associates to assist in the preparation of the Special Tax roll and the determination of the amount of Special Taxes required in each Fiscal Year. ",......... 41 'b~ ACENDA\TEMNO.- 3~~ PAGEJ1!i-Of THE DISTRICT The information set forth herein regarding ownership of real property in the District, the Developer and any proposed development of property in the District was provided by the Developer and has not been independently verified. The District makes no representation as to the accuracy or completeness of any such information. This information has been included because it is considered relevant to an informed evaluation of the District. As development of property in the District has not been completed, no assurance can be given that it will occur, that it will occur as described herein, or that it will occur in a timely manner. The iriformation should not be construed to suggest that the Bonds or the Special Taxes that will be used to pay the Bonds are personal obligations of the Developer. The owner of property within the District will not be personally liable for payments of the Special Taxes to be applied to pay the principal of and interest on the Bonds. Accordingly, the Developer:SO financial statements have not been included in this Official Statement. Furthermore, no representation is made that the Developer will have funds available to complete the development within the District. Boundaries of the District The District is located adjacent to and east of Grape Street near the intersection of Grape Street and Railroad Canyon. The boundaries of the District coincide with the development generally known as Vista del Lago. The boundaries of the District are described on the reduced scale map entitled "Boundary Map of Community Facilities District No. 2005-6 (City Center Townhomes)". A full scale map is on file with the Clerk of the City of Perris and was recorded with the County Recorder, County of Riverside in Book 63 Page 65 of Maps of Assessment and Community Facilities District Districts, Document Number 2005-0613690. Facilities and Fees to be Financed by the District The District is authorized to issue the Bonds to fund the planning, design, permitting and construction of public infrastructure consisting primarily of street, sewer, water, storm drain, park facilities as well as the funding of certain City and Elsinore Valley Municipal Water District fees (collectively the "Facilities"). The following table summarizes authorized District facilities and fees which are to be designed, acquired or constructed, or paid from proceeds of the Bonds: "-" "-" ...." 1<.10 b~ . .., AOENOA.~:EM \"-;-F 33~ cc r~,,; Ii" L1'{". .. . 42 ",-.. Boundary Map ...--. /""" 43 . 3~ ....=' ",co} I '11". G r~30"" f\l.p~,j4':.~~ . Aerial Photo ....", """'" """'" 44 AGENDA ITEM NO. '3;) PACE.J '71 OF 35{:. /"""'" TABLE NO.1 CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT 2005-6 (CITY CENTER TOWNHOMES) ELIGBLE FACILITIES COSTS (Estimated Costs) Facilities Estimated Cost $539,100 208,800 21,600 120,700 663,400 187,800 57,600 152,500 452,400 504,000 $2,907,900 Street Improvements Park Capital Improvement Plan Library Capital Improvement Fees Traffic Impact Fees TUMP Fees Railroad Canyon Road Benefit Reimbursement Fire Department Mitigation Fees Multiple Species Habitat Conservation Fees Water Connection Fees Sewer Connection Fees Total /"""'" To the extent the proceeds of the Bonds are insufficient to fund all of the eligible costs for all of the Facilities, such costs will be borne by the Developer. The Developer Western Pacific Housing, Inc., a Delaware corporation ("Western Pacific"or the "Developer") is a subsidiary of D.R. Horton, Inc., a Delaware corporation ("D.R. Horton"), a public company whose common stock is listed on the New York Stock Exchange under the symbol "DHI." Western Pacific is marketing its homes in the District under the trade name "D.R. Horton America's Builder." D.R. Horton is subject to the informational reporting requirements of the Exchange Act, and in accordance therewith files reports, proxy statements and other information with the SEC. Such filings, particularly the Annual Report on Form 10-K and the most recent Quarterly Report on Form 1O-Q, may be inspected and copied at the public reference facilities maintained by the SEC at 450 Fifth Street, N.W., Washington, DC 20549 at prescribed rates. Such filings can also be accessed over the internet at the SEC's website at www.sec.gov. In addition, the aforementioned material may also be inspected at the offices ofthe NYSE at 20 Broad Street, New York, NY 10005. D.R. Horton and its subsidiaries, including Western Pacific, design, construct, market and sell single family residences, town homes and condominiums primarily to entry level and move-up buyers and is a geographically diverse homebuilder in the United States of America. D.R. Horton and its subsidiaries closed approximately 43,567 homes and had approximately $10.8 billion in consolidated revenues for the 12 months ended September 30,2004. D.R. Horton believes that, on a combined basis, the company is one of the largest homebuilders in Southern California and in the State of California based on number of homes constructed. ,...... D.R. Horton, and its subsidiaries, also provide mortgage financing and title services to many of their homebuyers. 45 AOENOA.fTEM No._3~ .;;: f?PJJEJ12....oF3~ ~ Further information regarding D.R. Horton is available from D.R. Horton's Internet website at www.drhorton.com.This website address is included for reference only and the information on the ,..." website is not a part of this Official Statement or incorporated by reference into this Official Statement. No representation is made in this Official Statement as to the accuracy or adequacy of the information contained on the website. Description of Development The following section describes the proposed development in terms of the type of project and the status of land use entitlements. There can be no assurance that the development plan described herein will be completed or that it will not be modified in the future. In addition, there can be no assurance that sufficient funds will or can be made available to complete the development plan or pay special taxes as described. The proposed development is 144 townhome style condominium units referred to as Vista Del Lago. The development is expected to have 24 buildings containing 6 condominium units each. The Developer expects to offer three different unit types as follows: 1. Plan #1 is 1,141 square feet in size and is expected to be price at $271,900. The current development plan shows 48 units of the Plan #1 units. 2. Plan #2 is 1,386 square feet in size and is expected to be price at $305,900. The current development plan shows 48 units of the Plan #2 units. 3 Plan #3 is 1,527 square feet in size and is expected to be price at $338,900. The current development plan shows 48 units of the Plan #3 units. The Market Absorption Study forecasts that escrows for 78 units will be closed during the 2006 calendar year and the remaining 66 townhomes will close in 2007. All land use entitlements required to construct the project have been obtained by the Developer and construction is underway. ,..." ,...., 46 3?- ~~(,.1'''1 a '-Of~' \~1r~'~':-.J'4~_-:_-::- I""" TABLE NO.4 CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT 2005-6 (CITY CENTER TOWNHOMES) DESCRIPTION OF DEVELOPMENT (as of ,2006) ",-... Developer DR Horton Number of 144 Homes Lot Sizes Townhomes Number of 3 Models Size Range 1141 Sq. Ft. to 1,527 Sq. Ft. Price Range (Base) $271,990 to $338,900 Building Permits 117 Pulled Homes Under Contract with Homebuyers Absorption 78 Townhomes 2006 Period 66 Townhomes 2007 ",-... 47 3A AOENOA ITEM NO._ > <...t;;;.. PAGEJiP _OF .. '-' TABLE NO.5 CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT 2005-6 (CITY CENTER TOWNHOMES) DEVELOPMENT SCHEDULE The following table summarizes actual and projected development milestones as of January 3, 2006. Activity 1. Grading Completed 07/29/05 2 Improvement Plans Approved 07/15/2005 3. Final Map Recorded 06/23/05 4. Model Homes Started 5. Model Homes Completed 6. Production Homes Started 7. First Escrows Closing Source: The Developer. '-' 48 ......." 3). f\(jENOA ITEM NO._. . ...~~ PNJel.KL=OF . r'" SUMMARY OF THE FISCAL AGENT AGREEMENT The following is a summary of certain provisions of the Fiscal Agent Agreement and does not purport to be a complete restatement thereof Reference is hereby made to the Fiscal Agent Agreement for the complete terms thereof Copies of the Fiscal Agent Agreement are available from the City upon request. Creation of Funds. There is created and established and shall be maintained by the Fiscal Agent the following funds and accounts: (1) The Special Tax Fund (the "Special Tax Fund") (in which there shall be established and created an Interest Account, a Principal Account, a Redemption Account, a Reserve Account and an Administrative Expense Account); (2) The Surplus Fund (the "Surplus Fund"); and (3) The Acquisition and Construction Fund (the "Acquisition and Construction Fund") (in which there shall be established a Costs oflssuance Account). r' The amounts on deposit in the foregoing funds, accounts and subaccounts shall be held by the Fiscal Agent in trust and the Fiscal Agent shall invest and disburse the amounts in such funds, accounts and subaccounts in accordance with the provisions of the Fiscal Agent Agreement and shall disburse investment earnings thereon in accordance with the provisions of the Fiscal Agent Agreement. Except as required to be segregated into funds and accounts as described in the Fiscal Agent Agreement, money held by the Fiscal Agent in trust hereunder need not be segregated from other funds except to the extent required by law. Deposits to and Disbursements from Special Tax Fund. The CFD shall, on each date on which it receives Special Taxes, transfer the Special Taxes to the Fiscal Agent for deposit in the Special Tax Fund in accordance with the terms of the Fiscal Agent Agreement. The Fiscal Agent shall transfer the amounts on deposit in the Special Tax Fund on the dates and in the amounts set forth in the following Sections, in the following order of priority, to: (a) The Interest Account of the Special Tax Fund; (b) The Principal Account of the Special Tax Fund; (c) The Redemption Account of the Special Tax Fund; (d) The Reserve Account of the Special Tax Fund; ( e) The Administrative Expense Account of the Special Tax Fund; and (f) The Surplus Fund. At the maturity of all of the Bonds and, after all principal and interest then due on the Bonds then Outstanding has been paid or provided for and any amounts owed to the Fiscal Agent have been paid in full, moneys in the Special Tax Fund and any accounts therein shall be transferred to the CFD and may be used by the CFD for any lawful purpose. Interest Account and Principal Account of the Special Tax Fund. The principal of and interest due on the Bonds until maturity, other than principal due upon redemption, shall be paid by the Fiscal Agent from the Principal Account and the Interest Account of the Special Tax Fund, respectively. For the purpose of assuring that the payment of principal of and interest on the Bonds will be made when due, at least five Business Days prior to each March 1 and September 1, the Fiscal Agent shall make the following transfers from the Special Tax Fund first to the Interest Account and then to the Principal Account; ~ 51 EM NO 3!A ~ AGENO~,\T '89Ll .-..1' 3.~~r=' ~ACE~Of- provided, however, that to the extent that deposits have been made in the Interest Account or the Principal Account from the proceeds of the sale of an issue of the Bonds, or otherwise, the transfer from the Special Tax Fund need not be made; and provided, further, that, if amounts in the Special Tax Fund are inadequate to make the foregoing transfers, then any deficiency shall be made up by an immediate transfer from the Reserve Account: ') ....., (I) To the Interest Account, an amount such that the balance in the Interest Account five Business Days prior to each Interest Payment Date shall be equal to the installment of interest due on the Bonds on said Interest Payment Date and any installment of interest due on a previous Interest Payment Date which remains unpaid. Moneys in the Interest Account shall be used for the payment of interest on the Bonds as the same become due. (2) To the Principal Account, an amount such that the balance in the Principal Account five Business Days prior to September 1 of each year, commencing September 1, 2007 shall at least equal the principal payment due on the Bonds maturing on such September 1 and any principal payment due on a previous September I which remains unpaid. Moneys in the Principal Account shall be used for the payment of the principal of such Bonds as the same become due at maturity. Redemption Account of the Special Tax Fund. (1) On each September 1 on which a Sinking Fund Payment is due, after the deposits have been made to the Interest Account and the Principal Account of the S}:>ecial Tax Fund, the Fiscal Agent shall next transfer into the Redemption Account of the Special Tax Fund from the Special Tax Fund the amount needed to make the balance in the Redemption Account five Business Days prior to each September 1 equal to the Sinking Fund Payment due on any Outstanding Bonds on such September 1; provided, however, that, if amounts in the Special Tax Fund are inadequate to make the foregoing transfers, then any deficiency shall be made up by an immediate transfer from the Reserve Account, if funded. Moneys so deposited in the Redemption Account shall be used and applied by the Fiscal Agent to call and redeem Term Bonds in accordance with the Sinking Fund Payment schedule set forth in the Fiscal Agent Agreement. " ) ......" (2) After making the deposits to the Interest Account and the Principal Account of the Special Tax Fund and to the Redemption Account for Sinking Fund Payments then due, and in accordance with the CFD's election to call Bonds for optional redemption, the Fiscal Agent shall transfer from the Special Tax Fund and deposit in the Redemption Account moneys available for the purpose and sufficient to pay the interest, the principal and the premiums, if any, payable on the Bonds called for optional redemption; provided, however, that amounts in the Special Tax Fund (exclusive of amounts transferred to the Administrative Expense Account) may be applied to optionally redeem Bonds only if immediately following such redemption the amount in the Reserve Account will equal the Reserve Requirement. (3) All prepayments of Special Tax shall be deposited in the Redemption Account to be used to redeem Bonds on the next date for which notice of redemption can timely be given. (4) Moneys set aside in the Redemption Account shall be used solely for the purpose of redeeming Bonds and shall be applied on or after the redemption date to the payment of the principal of and premium, if any, on the Bonds to be redeemed upon presentation and surrender of such Bonds and in the case of an optional redemption to pay the interest thereon; provided, however, that in lieu or partially in lieu of such call and redemption, moneys deposited in the Redemption Account as set forth above may be used to purchase Outstanding Bonds. Purchases of Outstanding Bonds may be made by the CFD at public or private sale as and when and at such prices as the CFD may in its discretion determine but only at prices (including brokerage or other expenses) not more than par plus accrued interest, plus, in the case of moneys set aside for an optional redemption, the premium applicable at the next following call date according to the premium schedule established pursuant to the Fiscal Agent Agreement. Any accrued 52 - 3~.......~ cc;:'~ J g~~,~ !ii""-'-.-c~~ ~ r-- ,...-.. interest payable upon the purchase of Bonds may. be paid from the amo~t reserved in the Interest Account of the Special Tax Fund for the payment of mterest on the next followmg Interest Payment Date. Reserve Account of the Special Tax Fund. There shall be maintained in the Reserve Account of the Special Tax Fund an amount equal to the Reserve Requirement. The amounts in the Reserve Account shall be applied as follows: (1) Moneys in the Reserve Account shall be used solely for the purpose of paying the principal of, including Sinking Fund Payments, and interest on any Bonds when due in the event that the moneys in the Interest Account and the Principal Account of the Special Tax Fund are insufficient therefor or moneys in the Redemption Account of the Special Tax Fund are insufficient to make a Sinking Fund Payment when due. If the amounts in the Interest Account, the Principal Account or the Redemption Account of the Special Tax Fund are insufficient to pay the principal of, including Sinking Fund Payments, or interest on any Bonds when due, the Fiscal Agent shall withdraw from the Reserve Account for deposit in the Interest Account, the Principal Account or the Redemption Account of the Special Tax Fund, as applicable, moneys necessary for such purposes. (2) Whenever moneys are withdrawn from the Reserve Account, after making the required transfers referred to in the Fiscal Agent Agreement, the Fiscal Agent shall transfer to the Reserve Account from available moneys in the Special Tax Fund, or from any other legally available funds which the CFD elects to apply to such purpose, the amount needed to restore the amount of such Reserve Account to the Reserve Requirement. Moneys in the Special Tax Fund shall be deemed available for transfer to the Reserve Account only if the Fiscal Agent determines that such amounts will not be needed to make the deposits required to be made to the Interest Account, the Principal Account or the Redemption Account of the Special Tax Fund. If amounts in the Special Tax Fund or otherwise transferred to replenish the Reserve Account are inadequate to restore the Reserve Account to the Reserve Requirement, then the CFD shall include the amount necessary fully to restore the Reserve Account to the Reserve Requirement in the next annual Special Tax levy to the extent of the maximum permitted Special Tax rates. (3) In connection with any redemption of the Bonds, or a partial defeasance of the Bonds, amounts in the Reserve Account may be applied to such redemption or partial defeasance so long as the amount on deposit in the Reserve Account following such redemption or partial defeasance equals the Reserve Requirement. To the extent that the Reserve Account is at the Reserve Requirement as of the first day of the final Bond Year for the Bonds, amounts in the Reserve Account may be applied to pay the principal of and interest due on the Bonds in the final Bond Year for such issue. Moneys in the Reserve Account in excess of the Reserve Requirement not transferred in accordance with the preceding provisions of this paragraph shall be withdrawn from the Reserve Account on the fifth Business Day before each March 1 and September 1 and transferred to the Acquisition and Construction Fund until the Fiscal Agent receives a Certificate of Authorized Representative of the CFD that all Project Costs have been funded, and thereafter to the Interest Account of the Special Tax Fund. Administrative Expense Account of the Special Tax Fund. The Fiscal Agent shall transfer from the Special Tax Fund and deposit in the Administrative Expense Account of the Special Tax Fund amounts necessary to make timely payment of Administrative Expenses and shaIl be disbursed by the Fiscal Agent to pay Administrative Expenses, all as instructed by the CFD pursuant to a Written Request of the CFD. Moneys in the Administrative Expense Account of the Special Tax Fund may be invested in any Authorized Investments as directed by an Authorized Representative of the CFD. Surplus Fund. After making the transfers required by the Fiscal Agent Agreement, as soon as practicable after each September l, the Fiscal Agent shall transfer all remaining amounts in the Special Tax Fund to the Surplus Fund, other than amounts in the Special Tax Fund which the CFD directs the Fiscal Agent by Written Request of the CFD to retain because the CFD has included such funds as being available in the Special Tax Fund in calculating the amount of the levy of Special Taxes for such Fiscal Year pursuant to the Fiscal Agent Agreement. Moneys deposited in the Surplus Fund shaIl be transferred by the Fiscal 53 .3.). . AGENDA lTEM NO._ ~ i... ~-= PAGEl <l{, OF Jo Agent at the written request of the CFD (i) to any other reserve account established in connection with issuance of bonds within the CFD to the extent amounts in such reserve account is less than the reserve requirement. f~r th~t reserve account (ii) to the Administrative Expense Account of the Special Tax Fund to pay AdmInIstratIve Expenses to the extent that the amounts on deposit in the Administrative Expense ......, Account. of the Special Tax Fund are insufficient to pay Administrative Expenses or, (Hi) to the RedemptIon Account for the purpose of redeeming Bonds. The amounts in the Surplus Fund are not pledged to the repayment of the Bonds. In the event that the CFD reasonably expects to use any portion of the moneys in the Surplus Fund to pay debt service on any Outstanding Bonds, upon the written direction of the CFD, the Fiscal Agent will segregate such amount into a separate subaccount and the moneys on deposit in such subaccount of the Surplus Fund shall be invested in Authorized Investments the interest on which is excludable from gross income under Section 103 of the Code (other than bonds the interest on which is a tax preference item for purposes of computing the alternative minimum tax of individuals and corporations under the Code) or in Authorized Investments at a yield not in excess of the yield on the issue of Bonds to which such amounts are to be applied, unless, in the opinion of Bond Counsel, investment at a higher yield will not adversely affect the exclusion from gross income for federal income tax purposes of interest on the Bonds which were issued on a tax-exempt basis for federal income tax purposes. Investments. Moneys held in any of the funds and accounts under the Fiscal Agent Agreement shall be invested at the Written Request of the CFD in accordance with the limitations set forth below only in A uthorized Investments which shall be deemed at all times to be a part of such funds and accounts. Any loss resulting from such Authorized Investments shall be credited or charged to the fund or account from which such investment was made, and any investment earnings on a fund or account shall be applied as follows: (i) investment earnings on all amounts deposited in the Special Tax Fund (exclusive of amounts transferred to the Reserve Account), Surplus Fund, Acquisition and Construction Fund and each Account therein shall be deposited in those respective funds and accounts, and (ii) all other investment earnings shall be deposited in the Interest Account of the Special Tax Fund; provided, however, to the extent moneys in the Reserve Account exceed the Reserve Requirement, such excess amounts shall be deposited and transferred pursuant to the Fiscal Agent Agreement. Moneys in the funds and accounts held under the ""-'" Fiscal Agent Agreement may be invested by the Fiscal Agent at the Written Request of the CFD received at least 2 Business Days prior to the investment date, from time to time, in Authorized Investments subject to the following restrictions: (l) Moneys in the Interest Account, the Principal Account and the Redemption Account of the Special Tax Fund shall be invested only in Authorized Investments which will by their terms mature, or in the case of an Investment Agreement are available for withdrawal without penalty, on such dates so as to ensure the payment of principal of, premium, if any, and interest on the Bonds as the same become due. (2) Moneys in the Acquisition and Construction Fund shall be invested in Authorized Investments which will by their terms mature, or in the case of an Investment Agreement are available without penalty, as close as practicable to the date the CFD estimates the moneys represented by the particular investment will be needed for withdrawal from the Acquisition and Construction Fund. Notwithstanding anything in the Fiscal Agent Agreement to the contrary, amounts in the Acquisition and Construction Fund on the Delivery Date for the Bonds shall not be invested at yields greater than those set forth in the Tax Certificate. (3) One-half of the amount in the Reserve Account of the Special Tax Fund may be invested only in Authorized Investments which mature not later than two years from their date of purchase by the Fiscal Agent, and one-half of the amount in the Reserve Account may be invested only in Authorized Investments which mature not more than three years from the date of purchase by the Fiscal Agent; provided that such amounts may be invested in an Investment Agreement to the final maturity of the Bonds so long as such amounts may be withdrawn at any time, without penalty, for application in accordance with the Fiscal Agent Agreement; and provided that no such Authorized Investment of 54 r"'p~DI\ ITEM NO. -3:A -=-' ......, "d.,I''PACf;JrJ ".. Of:_~ amounts in the Reserve Account allocable to the Bonds shall mature later than the final maturity date of ,-.. the Bonds. (4) In the absence of Written Request of the CFD providing investment directions, the Fiscal Agent shall invest solely in Authorized Investments specified in clause (4) of the defmition thereof. The Fiscal Agent shall sell at the best price obtainable, or present for redemption, any Authorized Investment whenever it may be necessary to do so in order to provide moneys to meet any payment or transfer to such Funds and Accounts or from such Funds and Accounts. For the purpose of determining at any given time the balance in any such Funds and Accounts, any such investments constituting a part of such Funds and Accounts shall be valued at their cost, except that amounts in the Reserve Account shall be valued at the fair market value thereof and marked to market at least annually. Notwithstanding anything in the Fiscal Agent Agreement to the contrary, the Fiscal Agent shall not be responsible for any loss from investments, sales or transfers undertaken in accordance with the provisions of the Fiscal Agent Agreement. The Fiscal Agent or an affiliate may act as principal or agent in connection with the acquisition or disposition of any Authorized Investments and shall be entitled to its customary fees therefor. Any Authorized Investments that are registrable securities shall be registered in the name of the Fiscal Agent. The Fiscal Agent is authorized, in making or disposing of any investment permitted by this Section, to deal with itself (in its individual capacity) or with anyone or more of its affiliates, whether it or such affiliate is acting as an agent of the Fiscal Agent or for any third person or dealing as principal for its own account. r-- Covenants. So long as any of the Bonds issued hereunder are Outstanding and unpaid, the CFD makes the following covenants with the Bondowners under the provisions of the Act and the Fiscal Agent Agreement(to be performed by the CFD or its proper officers, agents or employees), which covenants are necessary and desirable to secure the Bonds and tend to make them more marketable; provided, however, that said covenants do not require the CFD to expend any funds or moneys other than the Special Taxes and other amounts deposited to the Special Tax Fund: (1) Punctual Payment: Against Encumbrances. The CFD covenants that it will receive all Special Taxes in trust and will immediately deposit such amounts with the Fiscal Agent, and the CFD shall have no beneficial right or interest in the amounts so deposited except as provided by the Fiscal Agent Agreement. All such Special Taxes shall be disbursed, allocated and applied solely to the uses and purposes set forth in the Fiscal Agent Agreement, and shall be accounted for separately and apart from all other money, funds, accounts or other resources of the CFD. The CFD covenants that it will duly and punctually payor cause to be paid the principal of and interest on every Bond issued hereunder, together with the premium, if any, thereon on the date, at the place and in the manner set forth in the Bonds and in accordance with the Fiscal Agent Agreement to the extent that Special Taxes are available therefor, and that the payments into the Funds and Accounts created hereunder will be made, all in strict conformity with the terms of the Bonds and the Fiscal Agent Agreement, and that it will faithfully observe and perform all of the conditions, covenants and requirements of the Fiscal Agent Agreement and all Supplemental Fiscal Agent Agreements and of the Bonds issued hereunder. The CFD will not mortgage or otherwise encumber, pledge or place any charge upon any of the Special Taxes except as provided in the Fiscal Agent Agreement, and will not issue any obligation or security having a lien or charge upon the Special Taxes superior to or on a parity with the Bonds. Nothing in the Fiscal Agent Agreement shall prevent the CFD from issuing or incurring indebtedness which is payable from a pledge of Special Taxes which is subordinate in all respects to the pledge of Special Taxes to repay the Bonds. (2) Levv of Special Tax. Beginning in Fiscal Year 2006-07 and so long as any Bonds issued under the Fiscal Agent Agreement are Outstanding, the CFD covenants to levy the Special Tax in an amount sufficient, together with other amounts on deposit in the Special Tax Fund and the Surplus Fund and ,-.. 55 -3~ ~.[rc J h 0.. .,;~-?;?Z: h""I.':'~,'_:'!_",",_=~__C_" ~-,--- ---- avaj)~b.le fo! such purpose, to pay (1) the principal of and interest on the Bonds when due, (2) the AdmInIstratIve Expenses, and (3) any amounts required to replenish the Reserve Account of the Special Tax Fund to the Reserve Requirement. (3) Commence Foreclosure Proceedimzs. The CFD covenants for the benefit of the Owners of the Bonds that it will determine or cause to be determined, no later than March 1 and August 1 of each year, whether or not any owner of the property within the District are delinquent in the payment of Special Taxes and, if such delinquencies exist, the CFD will order and cause to be commenced no later than April 15 (with respect to the March 1 determination date) or September 1 (with respect to the August 1 determination date), and thereafter diligently prosecute, an action in the superior court to foreclose the lien of any Special Taxes or installment thereof not paid when due, provided, however, that the CFD shall not be required to order the commencement of foreclosure proceedings if (i) the total Special Tax delinquency in the District for such Fiscal Year is less than five percent (5%) of the total Special Tax levied in such Fiscal Year, and (ii) the CFD shall have established from any source of lawfully available funds (other than Special Taxes) an escrow fund to provide for the payment of principal of and interest on the Bonds. Notwithstanding the foregoing, if the CFD determines that any single property owner in the District is delinquent in excess often thousand dollars ($10,000) in the payment of the Special Tax, then it will diligently institute, prosecute and pursue foreclosure proceedings against such property owner. Notwithstanding any provision of the Act or other law of the State to the contrary, in connection with any foreclosure related to delinquent Special Taxes: (a) The CFD or the Fiscal Agent is authorized to credit bid at any foreclosure sale, without any requirement that funds be set aside in the amount so credit bid, in the amount specified in Section 53356.5 of the Act, or such less amount as determined under clause (b) below or otherwise under Section 53356.6 of the Act. (b) The CFD may permit, in its sole and absolute discretion, property with delinquent Special Tax payments to be sold for less than the amount specified in Section 53356.5 of the Act, if it determines that such sale is in the interest of the Bond Owners. The Bond Owners, by their acceptance of the Bonds, consent to such sale for such lesser amounts (as such consent is described in Section 53356.6 of the Act), and release the CFD and the City, and their respective officers and agents from any liability in connection therewith. If such sale for lesser amounts would result in less than full payment of principal of and interest on the Bonds, the CFD will use. best efforts to seek approval of the Bond Owners. (c) The CFD is authorized to use amounts in the Special Tax Fund to pay costs of foreclosure of delinquent Special Taxes. (d) The CFD may forgive all or any portion of the Special Taxes levied or to be levied on any parcel in the District so long as the CFD determines that such forgiveness is not expected to adversely affect its obligation to pay principal of and interest on the Bonds as such payments become due and payable. (4) Payment of Claims. The CFD will pay and discharge any and all lawful claims for labor, materials or supplies which, if unpaid, might become a lien or charge upon the Special Taxes or; other funds in the Special Tax Fund (exclusive of amounts transferred to the Administrative Expense Account), or which might impair the security of the Bonds then Outstanding; provided that nothing contained in the Fiscal Agent Agreement shall require the CFD to make any such payments so long as the CFD in good faith shall contest the validity of any such claims. (5) Books and Accounts. The CFD will keep proper books of records and accounts, separate from all other records and accounts of the CFD, in which complete and correct entries shall be made of all transactions relating to the levy of the Special Tax and the deposits to the Special Tax Fund. Such books 56 '---' "" o 3~ -- '---' ~\GENOA l'TE_JM c Nt; .-IOF 3~~-- PAGE.J..lU-- ,,-..:. r-- ",..-.. of records and accounts shall at all times during business hours be subject to the inspection of the Fiscal Agent or of the Owners of the Bonds then Outstanding or their representatives authorized in writing. (6) Tax Covenants. The CFD covenants that it shall not use, and shall not permit the use of, and shall not omit to use Gross Proceeds or any other amounts (or any property the acquisition, construction or improvement of which is to be ftnanced directly or indirectly with Gross Proceeds) in a manner that if made or omitted, respectively, could cause the interest on any Bond to fail to be excluded pursuant to section 103(a) of the Code from the gross income of the owner thereof for federal income tax purposes. (7) Reduction of Maximum Special Taxes. The CFD ftnds and determines that, historically, delinquencies in the payment of special taxes authorized pursuant to the Act in community facilities districts in Southern California have from time to time been at levels requiring the levy of special taxes at the maximum authorized rates in order to make timely payment of principal of and interest on the outstanding indebtedness of such community facilities districts. For this reason, the CFD determines that a reduction in the maximum Special Tax rates authorized to be levied on parcels in the CFD below the levels provided in the Fiscal Agent Agreement would interfere with the timely retirement of the Bonds. The CFD determines it to be necessary in order to preserve the security for the Bonds to covenant, and, to the maximum extent that the law permits it to do so, the CFD does covenant, that it shall not initiate proceedings to reduce the maximum Special Tax rates for the CFD, unless, in connection therewith, (i) the CFD receives a certiftcate from one or more Independent Financial Consultants which, when taken together, certify that, on the basis of the parcels ofland and improvements existing in the District as of the July I preceding the reduction, the maximum amount of the Special Tax which may be levied on then existing Developed Property (as deftned in the Rate and Method of Apportionment of Special Taxes then in effect in the District) in each Bond Year for any Bonds Outstanding will equal at least 110% of the sum on the estimated Administrative Expenses and gross debt service in that Bond Year on all Bonds to remain Outstanding after the reduction is approved, and (ii) the CFD ftnds that any reduction made under such conditions will not adversely affect the interests of the Owners of the Bonds. For purposes of estimating Administrative Expenses for the foregoing calculation, the Independent Financial Consultant shall compute the Administrative Expenses for the current Fiscal Year and escalate that amount by two percent (2%) in each subsequent Fiscal Year. (8) Covenants to Defend. The CFD covenants that in the event that any initiative is adopted by the qualifted electors in the CFD which purports to reduce the maximum Special Tax below the levels specifted in the Fiscal Agent Agreement or to limit the power of the CFD to levy the Special Taxes for the purposes set forth in the Fiscal Agent Agreement, it will commence and pursue legal action in order to preserve its ability to comply with such covenants. (9) Annual Reports to CDlAC. Not later than October 30 of each year, commencing October 30, 2006 and until the October 30 following the ftnal maturity of the Bonds, the CFD shall cause the City to supply the information required by Section 53359.5(b) or (c) of the Act to CDIAC (on such forms as CDIAC may specify). (10) Continuing: Disclosure. The CFD covenants to comply with the terms of the Continuing Disclosure Agreement executed by it with respect to the Bonds. Supplemental Fiscal Agent Agreements or Orders Not Requiring Bondowner Consent. The CFD may from time to time, and at any time, without notice to or consent of any of the Bondowners, adopt Supplemental Fiscal Agent Agreements for any of the following purposes: (1) to cure any ambiguity, to correct or supplemerit any provisions in the Fiscal Agent Agreement which may be inconsistent with any other provision in the Fiscal Agent Agreement, or to make any other provision with respect to matters or questions arising under the Fiscal Agent Agreement or in any additional resolution or order, provided that such action is not materially adverse to the interests of the Bondowners; 57 "A ....0 J)...~ C:ENOp..". .ff..EIVI \'t '_.-.~~...3. ....-1.. ... / 6.. . ~() AF ~. [~1 f:,f~~ -.:"'';' .----- ---. .,.,,=._~ It ,~. t.~,t...,..;.... - --~-- , .J (2) to add to the covenants and agreements of and the limitations and the restrictions upon the CFD contained in the Fiscal Agent Agreement, other covenants, agreements, limitations and restrictions to be observed by the CFD which are not contrary to or inconsistent with the Fiscal Agent Agreement as theretofore in effect or which further secure Bond payments; '-1fII (3) to modify, amend or supplement the Fiscal Agent Agreement in such manner as to permit the qualification hereof under the Trust Indenture Act of 1939, as amended, or any similar federal statute hereafter in effect, or to comply with the Code or regulations issued thereunder, and to add such other terms, conditions and provisions as may be permitted by said act or similar federal statute, and which shall not materially adversely affect the interests of the Owners of the Bonds then Outstanding; or (4) to modify, alter Or amend the rate and method of apportionment of the Special Taxes in any manner so long as such changes do not reduce the maximum Special Taxes that may be levied in each year on property within the CFD to an amount which is less than that permitted under the Fiscal Agent Agreement; or (5) to modify, alter, amend or supplement the Fiscal Agent Agreement in any other respect which is not materially adverse to the Bondowners. Events of Default. Anyone or more of the following events shall constitute an "event of default": (a) Default in the due and punctual payment of the principal of or redemption premium, if any, on. any Bond when and as the same shall become due and payable, whether at maturity as therein expressed, by declaration or otherwise; (b) Default in the due and punctual payment of the interest on any Bond when and as the same shall become due and payable; or (c) Except as described in (a) or (b), default shall be made by the CFD in the observance of any of the agreements, conditions or covenants on its part contained in the Fiscal Agent Agreement or the Bonds, and such default shall have continued for a period of 30 days after the CFD shall have been given notice in writing of such default by the Fiscal Agent or the Owners of 25% in aggregate principal amount of the Outstanding Bonds. ) '-1fII The CFD agrees to give notice to the Fiscal Agent immediately upon the occurrence of an event of default under (a) or (b) above and within 30 days of the CFD's knowledge of an event of default under (c) above. The Fiscal Agent shall not be deemed to have knowledge of any event of default unless a responsible officer shall have actual knowledge thereof or the Fiscal Agent shall have received written notice at its Principal Office. Remedies of Owners. Following the occurrence of an event of default, any Owner shall have the right for the equal benefit and protection of all Owners similarly situated: (J) By mandamus or other suit or proceeding at law or in equity to enforce his rights against the CFD and any of the members, officers and employees of the CFD, and to compel the CFD or any such members, officers or employees to perform and carry out their duties under the Act and their agreements with the Owners as provided in the Fiscal Agent Agreement; (2) By suit in equity to enjoin any actions or things which are unlawful or violate the rights of the Owners; or (3) By a suit in equity to require the CFD and its members, officers and employees to account as the fiscal agent of an express trust. 58 h"n ...... 3~,-, -~,;,~j 11=~~i,-_3~~~. r-: r-- ~ Nothing in this Article or in any other provision of the Fiscal Agent Agreement or the Bonds shall affect or impair the obligation of the CFD, which is absolute and unconditional, to pay the interest on and principal of the Bonds to the respective Owners thereof at the respective dates of maturity, as provided in the Fiscal Agent Agreement, out of the Special Taxes and other amounts pledged for such payment, or affect or impair the right of action, which is also absolute and unconditional, of such Owners to institute suit to enforce such payment by virtue of the contract embodied in the Bonds and in the Fiscal Agent Agreement. A waiver of any default or breach of duty or contract by any OWner shall not affect any subsequent default or breach of duty or contract, or impair any rights or remedies on any such subsequent default or breach. No delay or omission by any Owner to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default or an acquiescence therein, and every power and remedy conferred upon the Owners by the Act or by this Article may be enforced and exercised from time to time and as often as shall be deemed expedient by the Owners. If any suit, action or proceeding to enforce any right or exercise any remedy is abandoned or determined adversely to the OWners, the CFD and the Owners shall be restored to their former positions, rights and remedies as if such suit, action or proceeding had not been brought or taken. No remedy in the Fiscal Agent Agreement conferred upon or reserved to the Owners is intended to be exclusive of any other remedy. Every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing, at law or in equity or by statute or otherwise, and may be exercised without exhausting and without regard to any other remedy conferred by the Act or any other law. In case the moneys held by the Fiscal Agent after an event of default shall be insufficient to pay in full the whole amount so owing and unpaid upon the Outstanding Bonds, then all available amounts shall be applied to the payment of such principal and interest without preference or priority of principal over interest, or interest over principal, or of any installment of interest over any other installment of interest, ratably to the aggregate of such principal and interest. Defeasance. If the CFD shall payor cause to be paid, or there shall otherwise be paid, to the Owner of an Outstanding Bond the interest due thereon and the principal thereof, at the times and in the manner stipulated in the Fiscal Agent Agreement or any Supplemental Fiscal Agent Agreement, then the Owner of such Bond shall cease to be entitled to the pledge of Special Taxes, and, other than as set forth below, all covenants, agreements and other obligations of the CFD to the Owner of such Bond under the Fiscal Agent Agreement shall thereupon cease, terminate and become void and be discharged and satisfied. In the event of a defeasance of all Outstanding Bonds, the Fiscal Agent shall execute and deliver to the CFD all such instruments as may be desirable to evidence such discharge and satisfaction, and the Fiscal Agent shall pay over or deliver to the CFD's general fund all money or securities held by it pursuant to the Fiscal Agent Agreement which are not required for the payment of the principal of, premium, if any, and interest due on such Bonds. Any Outstanding Bond shall be deemed to have been paid if such Bond is paid in anyone or more of the following ways: (a) by paying or causing to be paid the principal of, premium, if any, and interest on such Bond, as and when the same become due and payable; (b) by depositing with the Fiscal Agent, in trust, at or before maturity, money which, together with the amounts then on deposit in the Special Tax Fund (exclusive of amounts transferred to the Administrative Expense Account) and available for such purpose, is fully sufficient to pay the principal of, premium, if any, and interest on such Bond, as and when the same shall become due and payable; or 59 ~:.l AGENt)I'.~~ p~ . (c) by depositing with the Fiscal Agent or another escrow bank appointed by the CFD, in trust, noncallable Defeasance Securities, in which the CFD may lawfully invest its money, in such amount as will be sufficient, together with the interest to accrue thereon and moneys then on deposit hi the Special Tax Fund (exclusive of amounts transferred to the Administrative Expense Account) and available for s~ch ~urpose, to~ether with the interest to accrue thereon, to pay and discharge the principal of. premIUm, If any, and mterest on such Bond, as and when the same shall become due and payable; then, at the election of the CFD, and notwithstanding that any Outstanding Bonds shall not have been surrendered for payment, all obligations of the CFD under the Fiscal Agent Agreement and any Supplemental Fiscal Agent Agreement with respect to such Bond shall cease and terminate, except for the obligation of the Fiscal Agent to payor cause to be paid to the Owners of any such Bond not so surrendered and paid, all sums due thereon and except for the covenants of the CFD contained in the Fiscal Agent Agreement or any covenants in a Supplemental Fiscal Agent Agreement relating to compliance with the Code. Notice of such election shall be filed with the Fiscal Agent not less than ten days prior to the proposed defeasance date, or such shorter period of time as may be acceptable to the Fiscal Agent. In connection with a defeasance under (b) or (c) above, there shall be provided to the CFD a verification report from an independent nationally recognized certified public accountant stating its opinion as to the sufficiency of the moneys or securities deposited with the Fiscal Agent or the escrow bank to pay and discharge the principal of, premium, if any, and interest on all Outstanding Bonds to be defeased, as and when the same shall become due and payable, and an opinion of Bond Counsel (which may rely upon the opinion of the certified public accountant) to the effect that the Bonds being defeased have been legally defeased in accordance with the Fiscal -Agent Agreement and any applicable Supplemental Fiscal Agent Agreement. If a forward supply contract is employed in connection with an advance refunding to be effected under (c) above, (i) such verification report shall expressly state that the adequacy of the amounts deposited with the bank under (c) above to accomplish the refunding relies solely on the initial escrowed investments and the maturity principal thereof and interest income thereon. and does not assume performance under or compliance with the forward supply contract, and (ii) the applicable escrow agreement executed to effect an advance refunding in accordance with (c) above shall provide that, in the event of any discrepancy or difference between the terms of the forward supply contract and the escrow agreement, the terms of the escrow agreement shall be controlling. Upon a defeasance, the Fiscal Agent, upon request of the CFD, shall release the rights of the Owners of such Bonds which have been defeased under the Fiscal Agent Agreement and any Supplemental Fiscal Agent Agreement and execute and deliver to the CFD all such instruments as may be desirable to evidence such release, discharge and satisfaction. In the case of a defeasance hereunder of all Outstanding Bonds, the Fiscal Agent shall pay over or deliver to the CFD any funds held by the Fiscal Agent at the time of a defeasance, which are not required for the purpose of paying and discharging the principal of, premium, if any, or interest on the Bonds when due. The Fiscal Agent shall, at the written direction of the CFD, mail, first class, postage prepaid, a notice to the Bondowners whose Bonds have been defeased, in the form directed by the CFD, stating that the defeasance has occurred. 60 .., ') ....., ."",1::\'''' .j,~O.... 3~....., ~\GEND.A 11~~Vn~ --;.;-.. -i'juZ . typt;t~._?wr'.":>~~ ~ LEGAL MATTERS Enforceability of Remedies The remedies available to the Fiscal Agent and the Owners of the Bonds upon an event of default under the Fiscal Agent Agreement or any other document described herein are in many respects dependent upon regulatory and judicial actions which are often subject to discretion and delay. Under existing law and judicial decisions, the remedies provided for under such documents may not be readily available or may be limited. The various legal opinions to be delivered concurrently with the delivery of the Bonds will be qualified to the extent that the enforceability of certain legal rights related to the Fiscal Agent Agreement is subject to limitations imposed by bankruptcy, reorganization, insolvency or other similar laws affecting the rights of creditors generally and by equitable remedies and proceedings generally. Approval of Legal Proceedings Fulbright & Jaworski L.L.P., Los Angeles, California, as Bond Counsel, will render an opinion which states that the Fiscal Agent Agreement and the Bonds are valid and binding contracts of the City and are enforceable in accordance with their terms. Fulbright & Jaworski L.L.P. will render an opinion which states that the Fiscal Agent Agreement and the Bonds are valid and binding contracts of the District and are enforceable in accordance with their terms. The legal opinions of Bond Counsel will be subject to the effect of bankruptcy, insolvency, moratorium and other similar laws affecting creditors' rights and to the exercise of judicial discretion in accordance with general principles of equity. Bond Counsel undertakes no responsibility for the accuracy, completeness or fairness ofthis Official Statement. r' The City has no knowledge of any fact or other information which would indicate that the Fiscal Agent Agreement is not so enforceable against the District, except to the extent such enforcement is limited by principles of equity and by state and federal laws relating to bankruptcy, reorganization, moratorium or creditors' rights generally. Certain legal matters will be passed on for the City and the District by Van Blarcom Leibold, McClendon & Mann, P.C., Laguna Hills, California, as City Attorney. In addition, certain legal matters will be passed on by Fulbright & Jaworski, Los Angeles, California, Disclosure Counsel. Certain legal matters will be passed on for the Underwriter by McFarlin & Anderson LLP, Lake Forest, California, as Underwriter's Counsel. Fees payable to Bond Counsel, City Attorney, Disclosure Counsel and Underwriter's Counsel are contingent upon the sale and delivery of the Bonds. Tax Exemption The Internal Revenue Code of 1986 (the "Code") imposes certain requirements that must be met subsequent to the issuance and delivery of the Bonds for interest thereon to be and remain excluded pursuant to section 103(a) of the Code from the gross income ofthe owners thereof for federal income tax purposes. Noncompliance with such requirements could cause the interest on the Bonds to be included in the gross income of the owners thereof for federal income tax purposes retroactive to the date of issuance of the Bonds. The District has covenanted to maintain the exclusion of the interest on the Bonds from the gross income of the owners thereof for federal income tax purposes. In the opinion of Fulbright & Jaworski L.L.P., Bond Counsel, under existing law interest on the Bonds is exempt from personal income taxes of the State of California and, assuming compliance with the aforementioned covenant, interest on the Bonds is excluded pursuant to section 103(a) of the Code from the gross income of the owners thereof for federal income tax purposes. Bond Counsel is also of the opinion that, assuming compliance with the aforementioned covenant, the Bonds are not "specified /"". private activity bonds" within the meaning of section 57(a)(5) of the Code and, therefore, the interest on 61 No 3;;< - 'GENOA \1E~<<1'-oF~1.,t.,__ pACE~ -_.) the Bonds will not be treated as an item of tax preference for purposes of computing the alternative minimum tax imposed by section 55 of the Code. The receipt or accrual of interest on the Bonds owned by a corporation may affect the computation of its alternative minimum taxable income, upon which the alternative minimum tax is imposed, to the extent that such interest is taken into account in determining the adjusted current earnings of that corporation (75 percent of the excess, if any, of such adjusted current earnings over the alternative minimum taxable income being an adjustment to alternative minimum taxable income (determined without regard to such adjustment or to the alternative tax net operating loss deduction)). To the extent that a purchaser of a Bond acquires that Bond at a price that exceeds the aggregate amount of payments (other than payments of qualified stated interest within the meaning of section 1.1273-1 of the Treasury Regulations) to be made on the Bonds (determined, in the case of a callable Bond, under the assumption described below), such excess will constitute "bond premium" under the Code. Section 171 of the Code, and the Treasury Regulations promulgated thereunder, provide generally that bond premium on a tax-exempt obligation must be amortized on a constant yield, economic accrual, basis; the amount of premium so amortized will reduce the owner's basis in such obligation for federal income tax purposes, but such amortized premium will not be deductible for federal income tax purposes. In the case of a purchase of a Bond that is callable, the determination whether there is amortizable bond premium, and the computation of the accrual of that premium, must be made under the assumption that the Bond will be called on the redemption date that would minimize the purchaser's yield on the Bond (or that the Bond will not be called prior to maturity if that would minimize the purchaser's yield). The rate and timing of the amortization of the bond premium and the corresponding basis reduction may result in an owner realizing a taxable gain when a Bond owned by such owner is sold or disposed of for an amount equal to or in some circumstances even less than the original cost of the Bond to the owner. The excess, if any, of the stated redemption price at maturity of Bonds of a maturity over the initial offering price to the public of the Bonds of that maturity set forth on the cover of this Official Statement is "original issue discount" under the Code. Such original issue discount accruing on a Bond is treated as interest excluded from the gross income of the owner thereof for federal income tax purposes and exempt from California personal income tax to the same extent as would be stated interest on the Bond. Original issue discount on any Bond purchased at such initial offering price and pursuant to such initial offering will accrue on a semiannual basis over the term of the Bond on the basis of a constant yield method and, within each semiannual period, will accrue on a ratable daily basis. The amount of original issue discount on such a Bond accruing during each period is added to the adjusted basis of such Bond to determine taxable gain upon disposition (including sale, redemption or payment on maturity) of such Bond. The Code includes certain provisions relating to the accrual of original issue discount in the case of purchasers of Bonds who purchase such Bonds other than at the initial offering price and pursuant to the initial offering. Any person considering purchasing a Bond at a price that includes bond premium should consult his or her own tax advisors with respect to the amortization and treatment of such bond premium, including, but not limited to, the calculation of gain or loss upon the sale, redemption or other disposition of the Bond. Any person considering purchasing a Bond of a maturity having original issue discount should consult his or her own tax advisors with respect to the tax consequences of ownership of Bonds with original issue discount, including the treatment of purchasers who do not purchase in the original offering and at the original offering price, the allowance of a deduction for any loss on a sale or other disposition, and the treatment of accrued original issue discount on such Bonds under federal individual and corporate alternative minimum taxes. Bond Counsel has not undertaken to advise in the future whether any events after the date of issuance of the Bonds may affect the tax status of interest on the Bonds or the tax consequences of the ownership of the Bonds. No assurance can be given that future legislation, or amendments to the Code, if enacted into law, will not contain provisions that could directly or indirectly reduce the benefit of the exemption of interest on the Bonds from personal income taxation by the State of California or of the exclusion of the interest on the Bonds from the gross income of the owners thereof for federal income tax purposes. Furthermore, Bond Counsel expresses no opinion as to any federal, state or local tax law consequences ....., ~ 3~ ....., \GENOA ITEM NO.. PACE,J t{5 _Of ~ \,= 62 .~ ",.......... r- with respect to the Bonds, or the interest thereon, if any action is taken with respect to the Bonds or the proceeds thereof predicated or permitted upon the advice or approval of bond counsel if such advice or approval is given by counsel other than Bond Counsel. Although Bond Counsel is of the opinion that interest on the Bonds is exempt from state personal income tax and excluded from the gross income of the owners thereof for federal income tax purposes, an owner's federal, state or local tax liability may be otherwise affected by the ownership or disposition of the Bonds. The nature and extent of these other tax consequences will depend upon the owner's other items of income or deduction. Without limiting the generality of the foregoing, prospective purchasers of the Bonds should be aware that (i) section 265 of the Code denies a deduction for interest on indebtedness incurred or continued to purchase or carry the Bonds or, in the case of a financial institution, that portion of an owner's interest expense allocated to interest on the Bonds, (ii) with respect to insurance companies subject to the tax imposed by section 831 of the Code, section 832(b)(5)(B)(i) reduces the deduction for loss reserves by 15 percent of the sum of certain items, including interest on the Bonds, (Hi) interest on the Bonds earned by certain foreign corporations doing business in the United States could be subject to a branch profits tax imposed by section 884 of the Code, (iv) passive investment income, including interest on the Bonds, may be subject to federal income taxation under section 1375 of the Code for Subchapter S corporations that have Subchapter C earnings and profits at the close of the taxable year if greater than 25% of the gross receipts of such Subchapter S corporation is passive investment income, (v) section 86 of the Code requires recipients of certain Social Security and certain Railroad Retirement benefits to take into account, in determining the taxability of such benefits, receipts or accruals of interest on the Bonds and (vi) under section 32(i) of the Code, receipt of investment income, including interest on the Bonds, may disqualify the recipient thereof from obtaining the earned income credit. Bond Counsel has expressed no opinion regarding any such other tax consequences. Bond Counsel's opinion is not a guarantee of a result, but represents their legal judgment based upon their review of existing statutes, regulations, published rulings and court. decisions and the covenants of the District described above. No ruling has been sought from the Internal Revenue Service (the "Service") with respect to the matters addressed in the opinion of Bond Counsel, and Bond Counsel's opinion is not binding on the Service. The Service has an ongoing program of auditing the tax-exempt status of the interest on municipal obligations. If an audit of the Bonds is commenced, under current procedures the Service is likely to treat the District as the "taxpayer," and the owners would have no right to participate in the audit process. In responding to or defending an audit of the tax-exempt status of the interest on the Bonds, the District may have different or conflicting interests from the owners of the Bonds. Public awareness of any future audit of the Bonds could adversely affect the value and liquidity of the Bonds during the pendency of the audit, regardless of the ultimate outcome. Absence of Litigation The City will furnish a certificate dated as of the date of delivery of the Bonds that there is not now known to be pending or threatened any litigation restraining or enjoining the execution or delivery of the Fiscal Agent Agreement or the sale or delivery of the Bonds or in any manner questioning the proceedings and authority under which the Fiscal Agent Agreement is to be executed or delivered or the Bonds are to be delivered or affecting the validity thereof. 63 AGENDA ITEM NO. .5;). t, - PAGE~OF~~~ - CONCLUDING INFORMATION ......" No Rating on the Bonds The District has not made, and does not contemplate making, any application for a rating on the Bonds. No such rating should be assumed based upon any other City rating that may be obtained. Prospective purchasers of the Bonds are required to make independent determinations as to the credit quality of the Bonds and their appropriateness as an investment. Should a Bondowner elect to sell a Bond prior to maturity, no representations or assurances can be made that a market will have been established or maintained for the purchase and sale of the Bonds. The Underwriter assumes no obligation to establish or maintain such a market and is not obligated to repurchase any of the Bonds at the request of the owner thereof. Underwriting Southwest Securities, Inc., Newport Beach, California (the "Underwriter") is offering the Bonds at the prices set forth on the cover page hereof. The initial offering prices may be changed from time to time and concessions from the offering prices may be allowed to dealers, banks and others. The Underwriter has agreed to purchase the Bonds at a price equal to approximately % ($ ) of the aggregate principal amount of the Bonds, which amount represents the principal amount of the Bonds, less the Underwriter's discount of$ and a Net Original Issue Discount of$ . The Underwriter will pay certain of its expenses relating to the offering. Experts The Market Absorption Study prepared by Empire Economics, Inc., Capistrano Beach, California, and the Appraisal prepared by Harris Realty Appraisal, Newport Beach, California, as well as the Special Tax projections prepared by Harris & Associates, Irvine, California, Special Tax Consultant, have been ~ included in this Official Statement in reliance on and upon the authority of said firms as experts in the matters covered therein. The Financing Consultant The material contained in this Official Statement was prepared by Rod Gunn Associates, Inc., Huntington Beach, California, an independent financial consulting firm, who advised the City as to the financial structure and certain other financial matters relating to the Bonds. The information set forth herein has been obtained by Rod Gunn Associates, Inc. from sources which are believed to be reliable, but such information is not guaranteed by Rod Gunn Associates, Inc. as to accuracy or completeness, nor has it been independently verified. Fees paid to Rod Gunn Associates, Inc. are contingent upon the sale and delivery of the Bonds. Additional Information The summaries and references contained herein with respect to the Fiscal Agent Agreement, the Bonds, statutes and other documents, do not purport to be comprehensive or definitive and are qualified by reference to each such document or statute and references to the Bonds are qualified in their entirety by reference to the form hereof included in the Fiscal Agent Agreement. Definitions of certain terms used herein are set forth in "APPENDIX A-Definitions of Certain Terms Used In the Fiscal Agent Agreement". Copies of the Fiscal Agent Agreement are available for inspection during the period of initial offering on the Bonds at the offices of the Financing Consultant, Rod Gunn Associates, Inc., 16371 Gothard Street, Suite A, Huntington Beach, California 92647-3652, telephone (714) 841-3993 or the Underwriter, Southwest Securities, 620 Newport Center Drive, Suite 300, Newport Beach, California 92660, telephone (949) 717- 64 ......" 3~ AGEN~::icf1' _.OF 3 ~t:.. ,.-., 2000. Copies of these documents may be obtained after delivery of the Bonds from the City through the City Manager, City of Lake Elsinore, 130 S. Main Street, Lake Elsinore, California 92530. References Any statements in this Official Statement involving matters of opinion, whether or not expressly so stated, are intended as such and not as representations of fact. This Official Statement is not to be construed as a contract or agreement between the City and the purchasers or Owners of any of the Bonds. Execution The execution of this Official Statement by the City Manager has been duly authorized by the City of Lake Elsinore. CITY OF LAKE ELSINORE By: City Manager of the City, Acting on behalf of Community Facilities District No. 2005-6 (City Center Townhomes) ".... ",-.. 65 ,,,,,,?f.C'I}i"")', 3~ "'~'''''',.,'...,.~ 'L1&~~'v-=-~ ' ~ APPENDIX A DEFINITIONS OF CERTAIN TERMS USED IN THE FISCAL AGENT AGREEMENT ~ Unless otherwise defined in this Official Statement, the following terms have the following meanings. "Act" means the Mello-Roos Community Facilities Act of 1982, as amended, Sections 53311 et seq. of the California Government Code. "Administrative Expenses" means the administrative costs with respect to the calculation and collection of the Special Taxes, including all attorneys' fees and other costs related thereto, the fees and expenses of the Fiscal Agent, any fees for credit enhancement for the Bonds which are not otherwise paid as Costs of Issuance, any costs related to the CFD's compliance with State and federal laws requiring continuing disclosure of information concerning the Bonds and the CFD, and any other costs otherwise incurred by the City's staff on behalf of the CFD in order to carry out the purposes of the CFD as set forth in the Resolution of Formation and any obligation of the CFD hereunder. "Annual Debt Service" means the principal amount of any Outstanding Bonds payable in a Bond Year either at maturity or pursuant to a Sinking Fund Payment and any interest payable on any Outstanding Bonds in such Bond Year, if the Bonds are retired as scheduled. "Authorized Investments" means any of the following which at the time of investment are legal investments under the laws of the State for the moneys proposed to be invested therein: (1) Direct obligations of the United States of America (including obligations issued or held in book- entry form on the books of the Department of the Treasury, and CATS and TIGRS) or obligations the principal of and interest on which are unconditionally guaranteed by the United States of America ("Direct Obligations"). ~ (2) Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the following federal agencies and provided such obligations are backed by the full faith and credit ofthe United States of America (stripped securities are only permitted if they have been stripped by the agency itself): U.s. Export-Import Bank ("Eximbank") Direct obligations or fully guaranteed certificates of beneficial ownership Farmers Home Administration ("FmHA") Certificates of beneficial ownership Federal Financing Bank Federal Housing Administration Debentures ("FHA") General Services Administration Participation certificates Government National Mortgage Association ("GNMA" or "Ginnie Mae") GNMA-guaranteed mortgage-backed bonds GNMA-guaranteed pass-through obligations U.S. Maritime Administration Guaranteed Title XI financing U.S. Department of Housing and Urban Development (HUD) A-I ...~ 3d- AOEN~~ffi.-OFp:?t: /""" Project Notes Local Authority Bonds New Communities Debentures - U.S. government guaranteed debentures U.S. Public Housing Notes and Bonds - U.S. government guaranteed public housing notes and bonds (3) Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the following non-full faith and credit U.S. government agencies (stripped securities are only permitted if they have been stripped by the agency itself: Federal Home Loan Bank Svstem Senior debt obligations Federal Home Loan Mortgage Corporation ("FHLMC" or "Freddie Mac") Participation certificates Senior debt obligations Federal National Mortgage Association ("FNMA" or "Fannie Mae") Mortgage-backed securities and senior debt obligations Student Loan Marketing Association ("SLMA" or "Sallie Mae") Senior debt obligations Resolution Funding Corp. ("REFCORP") obligations Farm Credit System CM. - Consolidated system-wide bonds and notes /"" (4) Money market funds registered under the Federal Investment Company Act of 1940, whose shares are registered under the Securities Act of 1933, and having a rating by Standard & Poor's of AAAm-G, AAAm or AAm, and, if rated by Moody's, rated Aaa, Aal or Aa2 (including those of the Fiscal Agent and its affiliates). (5) Certificates of deposit secured at all times by collateral described in (1) and/or (2) above. Such certificates must be issued by commercial banks, savings and loan associations or mutual savings banks. The collateral must be held by a third party and the Bondholders must have a perfected first security interest in the collateral. (6) Certificates of deposit, savings accounts, deposit accounts or money market deposits which are fully insured by FDIC or which are with a bank rated AA or better by Standard & Poor's and Aa or better by Moody's (including those of the Fiscal Agent and its affiliates). (7) Investment Agreements with any corporation, including banking or financial institutions, provided that (a) the long-term debt of the provider of any such investment agreement is rated, at the time of investment, at least "AA" and "Aa" by the Rating Agency (without regard to gradations of plus or minus within such category), and (b) any such investment agreement is collateralized with United States Treasury or agency obligations which at least equal 1 02% of the principal amount invested thereunder, and (c) any such agreement shall include a provision to the effect that, in the event the long-term debt rating of the provider of such agreement is downgraded below "AA-" or below "A a" by the applicable Rating Agency, the CFD has the right to withdraw or cause the Fiscal Agent to withdraw all funds invested in such agreement and thereafter to invest such funds pursuant to the Fiscal Agent Agreement. (8) Commercial paper rated, at the time of purchase, "Prime - I" by Moody's and "A-I" or better by "..-. Standard & Poor's. A-2 3~ !\G'ENOA liEM NO._~ 'PM;E.2f2 Cl.-= Of (9) Bonds or notes issued by any state or municipality which are rated by Moody's and Standard & Poor's in one of the two highest rating categories assigned by such agencies. (10) Federal funds or bankers acceptances with a maximum term of one year of any bank which has an unsecured, uninsured or unguaranteed obligation rating of "Prime - 1" or "A3" or better by Moody's and "A- 1" or "A" or better by Standard & Poor's. """" (11) Repurchase agreements collateralized by Direct Obligations, GNMAs, FNMAs or FHLMCs with any registered broker/dealer subject to the Securities Investors' Protection Corporation jurisdiction or any commercial bank insured by the FDIC, if such broker/dealer or bank has an uninsured, unsecured and unguaranteed obligation rated "P-l" or "A3" or better by Moody's, and "A-I" or "A-" by Standard & Poor's; provided: (a) a master repurchase agreement or specific written repurchase agreement governs the transaction; and (b) the securities are held free and clear of any lien by the Fiscal Agent or an independent third party acting solely as agent ("Agent") for the Fiscal Agent, and such third party is (i) a Federal Reserve Bank, (ii) a bank which is a member of the Federal Deposit Insurance Corporation and which has combined capital, surplus and undivided profits of not less than $50 million, or (Hi) a bank approved in writing for such purpose by Financial Guaranty Insurance Company, and the Fiscal Agent shall have received written confirmation from such third party that it holds such securities, free and clear of any lien, as agent for the Fiscal Agent; and (c) a perfected first security interest under the Uniform Commercial Code, or book entry procedures prescribed at 31 C.F.R. 306.1 et seq. or 31 C.F.R. 350.0 et seq. in such securities is created for the benefit of the Fiscal Agent; and (d) the repurchase agreement has a term of 180 days or less, and the Fiscal Agent or the Agent will value the collateral securities no less frequently than weekly and will liquidate the collateral securities if any deficiency in the required collateral percentage is not restored within two business days of such valuation; and (e) the fair market value of the securities in relation to the amount of the repurchase obligation, including principal and interest, is equal to at least 103% .~ (12) Local Agency Investment Fund ("LAIF") of the State of California. (13) Any other investment which the CFD is permitted by law to make. "Authorized Representative of the CFD" means the Mayor, City Manager, Administrative Services Director, or any other person or persons designated by the Council and authorized to act on behalf of the CFD by a written certificate signed on behalf of the CFD by the Mayor or the City Manager and containing the specimen signature of each such person. "Bond Counsel" means an attorney at law or a firm of attorneys selected by the CFD of nationally recognized standing in matters pertaining to the tax-exempt nature of interest on bonds issued by states and their political subdivisions duly admitted to the practice of law before the highest court of any state of the United States of America or the District of Columbia. "Bond Register" means the books which the Fiscal Agent shall keep or cause to be kept on which the registration and transfer of the Bonds shall be recorded. "Bondowner" or "Owner" means the person or persons in whose name or names any Bond is registered. "Bond Year" means the twelve month period commencing on September 2 of each year and ending on September 1 of the following year, except that the first Bond Year for the Bonds shall begin on the Delivery Date and end of the first September I which is not more than 12 months after the Delivery Date. A-3 """" ;) ).._--:J :.PDS2~~; r-. "Business Day" means a day which is not a Saturday or Sunday or a day of the year on which banks in New York, New York, Los Angeles, California, or the city where the corporate trust office of the Fiscal Agent is located, are not required or authorized to remain closed. "Certificate of Authorized Representative of the CFD" means a written certificate or warrant request executed by an Authorized Representative of the CFD. "CFD" means the City of Lake Elsinore Community Facilities District No. 2005-6 (City Center Townhomes) established pursuant to the Act and the Resolution of Formation. "Code" means the Internal Revenue Code of 1986 and any Regulations, rulings, judicial decisions, and notices, announcements, and other releases of the United States Treasury Department or Internal Revenue Service interpreting and construing it. "Costs of Issuance" means the costs and expenses incurred in connection with the issuance and sale of the Bonds, including the acceptance and initial annual fees and expenses of the Fiscal Agent and its counsel, legal fees and expenses, costs of printing the Bonds and the preliminary and final official statements for the Bonds, fees of financial consultants and all other related fees and expenses, as set forth in a Certificate of Authorized Representative of the CFD. "Council" means the City Council of the City of Lake Elsinore. "Defeasance Securities" means 'any of the following: (a) Cash ",-... (b) United States Treasury Certificates, Notes and Bonds (including State and Local Government Series -- "SLGS") (c) Direct obligations of the U.S. Treasury which have been stripped by the U.S. Treasury itself, e.g., CATS, TIGRS and similar securities. (d) The interest component of Resolution Funding Corp. strips which have been stripped by request to the Federal Reserve Bank of New York and are in book-entry form. (e) Pre-refunded municipal bonds rated "Aaa" by Moody's and "AAA" by Standard & Poor's. (f) Obligations issued by the following agencies which are backed by the full faith and credit of the United States: U.S. Export-Import Bank - direct obligations or fully guaranteed certificates of beneficial ownership Farmers Home Administration - certificates of beneficial ownership Federal Financing Bank General Services Administration - participation certificates U.S. Maritime Administration - guaranteed Title XI financing U.S. Department of Housing and Urban Development (HUD) - Project Notes, Local Authority Bonds, New Communities Debentures - U.S. government guaranteed debentures, U.S. Public Housing Notes and Bonds - U.S. government guaranteed public housing notes and bonds. "Delivery Date" means, with respect to the Bonds, the date on which the bonds of such issue were issued and delivered to the initial purchasers thereof. ~ "Depository" shall mean The Depository Trust Company, New York, New York, and its successors and assigns as securities depository for the Certificates, or any other securities depository acting as Depository under Article II hereof. A-4 :7~ "CENOA ITEM NO._ ~~~ ppa..2f[>-- OF .A- "Fiscal Agent" means Union Bank of California, N .A., a national banking association duly organized and existing under and by virtue of the laws of the United States of America, at its principal corporate trust office in Los Angeles, California, and its successors or assigns, or any other bank or trust company which may at ......, any time be substituted in its place as provided in the Fiscal Agent Agreement and any successor thereto. "Fiscal Agent Agreement" means the Fiscal Agent Agreement, together with any Supplemental Fiscal Agent Agreement approved pursuant to the Fiscal Agent Agreement. "Fiscal Year" means the period beginning on July 1 of each year and ending on the next following June 30. "Independent Financial Consultant" means a financial consultant or special tax consultant or firm of either such consultants generally recognized to be well qualified in the financial consulting or special tax consulting field, appointed and paid by the CFD, who, or each of whom: (I) is, in fact, independent and not under the domination of the CFD; (2) does not have any substantial interest, direct or indirect, in the CFD; and (3) is not connected with the CFD as a member, officer or employee of the CFD, but who may be regularly retained to make annual or other reports to the CFD. "Interest Payment Date" means each March I and September 1, commencing September 1, 2006, provided, however, that, if any such day is not a Business Day, interest up to the Interest Payment Date will be paid on the Business Day next preceding such date. "Investment Agreement" means one or more agreements for the investment of funds of the CFD complying with the criteria therefor as set forth in Subsection (7) of the definition of Authorized Investments. "Maximum Annual Debt Service" means the maximum sum obtained for any Bond Year prior to the final maturity of the Bonds by adding the following for each Bond Year: (I) the principal amount of all Outstanding Bonds payable in such Bond Year either at maturity or '-II pursuant to a Sinking Fund Payment; and (2) the interest payable on the aggregate principal amount of all Bonds Outstanding in such Bond Year if the Bonds are retired as scheduled. "Moody's" means Moody's Investors Service, its successors and assigns. "Nominee" shall mean the nominee of the Depository, which may be the Depository, as determined from time to time pursuant to the Fiscal Agent Agreement. "Outstanding" or "Outstanding Bonds" means all Bonds theretofore issued by the CFD, except: (1) Bonds theretofore cancelled or surrendered for cancellation in accordance with the Fiscal Agent Agreement; (2) Bonds for payment or redemption of which monies shall have been theretofore deposited in trust (whether upon or prior to the maturity or the redemption date of such Bonds), provided that, if such Bonds are to be redeemed prior to the maturity thereof, notice of such redemption shall have been given as provided in the Fiscal Agent Agreement; and (3) Bonds which have been surrendered to the Fiscal Agent for transfer or exchange pursuant to the Fiscal Agent Agreement or for which a replacement has been issued pursuant to the Fiscal Agent Agreement. "Participants" shall mean those broker-dealers, banks and other financial institutions from time to time for which the Depository holds Bonds as securities depository. "Person" means natural persons, firms, corporations, partnerships, associations, trusts, public bodies and other entities. A-5 ...." ff'eU ..~ ~.~ ,AGENDA 1:~IYI r.v.~ i,~ ""r,~~ f)O~ ....3 ir'I:""'i)VJ~s;t .'- 1"""' "Principal Office of the Fiscal Agent" means the office of the Fiscal Agent located in Los Angeles, California or such other office or offices as the Fiscal Agent may designate from time to time, or the office of any successor Fiscal Agent where it principally conducts its business of serving as Fiscal Agent under indentures pursuant to which municipal or governmental obligations are issued. "Project" means those public facilities described in the Resolution of Formation which are to be acquired or constructed within The District, including all engineering, planning and design services and other incidental expenses related to such facilities and other facilities, if any, authorized by the qualified electors within the CFD from time to time. "Project Costs" means the amounts necessary to finance the Project, to create and replenish any necessary reserve funds, to pay the initial and annual costs associated with the Bonds, including, but not limited to, remarketing, credit enhancement, Fiscal Agent and other fees and expenses relating to the issuance of the Bonds and the formation of the CFD, and to pay any other "incidental expenses" of the CFD, as such term is defined in the Act. "Rating Agency" means Moody's and Standard & Poor's, or both, as the context requires. "Record Date" means the fifteenth day of the month preceding an Interest Payment Date, regardless of whether such day is a Business Day. "Regulations" means the regulations adopted or proposed by the Department of Treasury from time to time with respect to obligations issued pursuant to section 103 of the Code. "Reserve Requirement" means, as of any date of calculation, an amount equal to the lowest of (l) 10% of the issue price (as defined pursuant to section 148 of the Code), or (2) Maximum Annual Debt Service, or (3) 125% of the average Annual Debt Service of the Outstanding Bonds. I"""' "Resolution of Formation" means Resolution No. _adopted by the Council on September 13, 2005 pursuant to which the Council formed the CFD. "Sinking Fund Payment" means the annual payment to be deposited in the Redemption Account to redeem a portion of the Term Bonds in accordance with the schedule set forth in the Fiscal Agent Agreement. "Special Taxes" means the taxes authorized to be levied by the CFD on parcels within The District in accordance with the Resolution of Formation, the Act and the voter approval obtained at the September 13, 2005 election in the District and any additional special taxes authorized to be levied by the CFD from time to time which are pledged by the CFD to the repayment of the Bonds, together with the prepayment thereof and proceeds collected from the sale of property pursuant to the foreclosure provisions of the Fiscal Agent Agreement for the delinquency of such Special Taxes remaining after the payment of all the costs related to such foreclosure actions, including, but not limited to, all legal fees and expenses, court costs, consultant and title insurance fees and expenses. "Standard & Poor's" means Standard & Poor's, a division of McGraw-Hili, its successors and assigns. "Supplemental Fiscal Agent Agreement" means any supplemental fiscal agent agreement amending or supplementing the Fiscal Agent Agreement. "Tax Certificate" means the certificate by that name to be executed by the CFD on a Delivery Date to establish certain facts and expectations and which contains certain covenants relevant to compliance with the Code. "Term Bonds" means the Bonds maturing on September 1,2026 and September 1,2036. "Underwriter" means the institution or institutions, if any, with whom the CFD enters into a purchase ~ contract for the sale of the Bonds. A-6 :W".A?~, ,...c~ ~n/~ ,~",v,,-~. ' J""~' 3~ '.'~ -~~~, Empire Economics A ~;;:...."~~~~O~ ~f,....~(..!LS .__----.:;." .' - ":. 31~ CERTIFICATION OF INDEPENDENCE r" The Securities & Exchange Commission has recently taken action against Wall Street firms that have utilized their research analysts to promote companies that they conduct business with, citing this as a potential conflict of interest. Accordingly, Empire Economics (Empire), in order to ensure that its clients are not placed in a situation that could cause such conflicts of interest, provides a Certification of Independence. Specifically, the Certificate states that Empire performs consulting services for public entities only in order to avoid potential conflicts of interest that could occur if it also provided consulting services for developer/builder. For example, if a research firm for a specific Community Facilities District or Assessment District were to provide consulting services to both the public entity as well as the property owner/developer/builder, then a potential conflict of interest could be created, given the different objectives of the public entity versus the property owner/developer. Accordingly, Empire Economics certifies that the Market Absorption Study for Community Facilities District No. 2005-6 (City Center Townhomes)of the City of Lake Elsinore was performed in an independent professional manner, as represented by the following statements: ~ Empire was retained to perform the Market Absorption Study by the City of Lake Elsinore, not the District's property owner or the developer/builder, D.R. Horton. ~ Empire has not performed any consulting services for the District's property owner nor the developer/builder during at least the past five years. r" ~ Empire will not perform any consulting services for the District's property owner nor the developer/builder during at least the next three years. ~ Empire's compensation for performing the Market Absorption Study for the District is not contingent upon the issuance of Bonds; Empire's fees are paid on a non-contingency basis. Therefore, based upon the statements set-forth above, Empire hereby certifies that the Market Absorption Study for CFD No. 2005-6 of the City of Lake Elsinore was performed in an independent professional manner. Empire Economics, Inc. Joseph T. Janczyk, President "..-..... Empire Economics 3;2 _ AGEN~~.;tOf3~'- February 16,2006 INTRODUCTION TO THE BOND FINANCING PROGRAM The City of Lake Elsinore has formed Community Facilities District (CFD) No. 2005-6 for City Center Townhomes / Vista del Lago which is located in the City of Lake Elsinore in Riverside County, """"'" as a means of funding the various "public" infrastructure components that are required for the development of its residential townhome project. Specifically, CFD No. 2005-6 is expected to have 144 attached townhome housing units that are being constructed/marketed by D.R. Horton, and these townhomes are currently priced at $271,900 to $338,900 for some 1,141 to 1,527 sq.ft. of living area; accordingly, their characteristics are as follows: ~ Plan # 1 has 48 units that are currently priced at some $271,990 for 1,141 sq.ft. of living area, for a value ratio (price/living area) of some $238 per sq.ft. ~ Plan # 2 also has 48 units that are currently priced at some $305,900 for 1,386 sq.ft. of living area, for a value ratio of some $221 per sq.ft. ~ Plan # 3 has 48 units that are currently priced at some $338,900 for 1,527 sq.ft. of living area, for a value ratio of some $222 per sq.ft. The townhomes in CFD No. 2005-6 Vista del Lago are expected to commence escrow closings during Spring 2006. CFD No. 2005-6 is expected provide funding for public facilities in the amount of some $3,092,800 for improvements to streets, park, library, water and sewer facilities related to the City of Lake Elsinore as well as other public entities; the final amount of the improvements funded will be determined at the time of the Bond Sale. ....." The City of Lake Elsinore has retained Empire Economics, an economic and real estate consulting firm, to perform a Market Absorption Study for CFD No. 2005-6. The purpose of the Market Absorption Study for CFD No. 2005-6 is to provide an estimate of the probable absorption schedules for the forthcoming residential townhome products in the Vista del Lago project. Specifically, from the viewpoint of prospective Bond Purchasers, the particular components of the infrastructure should be time-phased and location-phased in a manner that approximately coincides with the expected marketability/absorption of the project's products in CFD No. 2005-6. Otherwise, to the extent that the infrastructure is not appropriately phased, then the following types of market inefficiencies may occur: On the one hand, if certain projects do not have the infrastructure that is required to support their development in a timely manner, then they would not be able to respond to the demand in the marketplace, resulting in a market shortaf!e. On the other hand, if too much infrastructure is built, then projects for which there is not presently a market demand would incur high carrying costs due to the market sumlus. and this could adversely impact their financial feasibility. Thus, the Market Absorption Study formulates guidelines on the appropriate or optimal time-phasing and location-phasing of the infrastructure for the properties located in CFD No. 2005-6, as a means of providing the bond purchasers with a reasonable amount of security from a market absorption :s ~ perspective'40ENDA ITEM NO"i-: rfilNJ,E~()F.~~ . Empire Economics 2 February 16, 2006 ,-..... r/.) ~ ::E 0 ~ ~ 0 f--4 ~ ~ f--4 ffi u '" (.) ~ 's 0 f--4 ~ 0 ~ ~ U e '-' '~ ~ \Q o o N ..0 ...... ~ ] CI) ~ ~ ~ < ~ Ie 0 ~ 0 N ...0 ..... < ~ \0 I V) 0 0 N . 0 Z Q ~ U ~ ~ ~ ~ 0 r:/J ~ ~ < Q S 0 ~ """ ACENDA ITEM NO. 5< - pACE.:?JL-OF ~~(p. 1,800 1,600 1,400 1,200 ,'~' c( l:! 1,000 c( CI Z ~ 800 ..J 600 400 200 0 Plan # 1 ~ r' $400,000 $350,000 $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 $0 ~ CITY OF LAKE ELSINORE CFD NO. 2005-6 EXPECTED PRICES OF THE RESIDENTIAL PRODUCTS $338,900 $305,900 $271,900 ~ ~ Plan # 1 Plan # 2 Plan # 3 CITY OF LAKE ELSINORE CFD NO.2005-6 EXPECTED SIZES OF LIVING AREA FOR THE RESIDENTIAL PRODUCTS 1527 1,386 Plan # 2 Plan # 3 IlGEN OA. ITEM .... ~... ~=z;: &;lJ.~,Rf"'" "1 I"L-OF . ~. .,....~ 5 Empire Economics February 16,2006 ROLE OF THE MARKET STUDY IN THE BOND FINANCING The Market Absorption Study for CFD No. 2005-6 (Vista del Lago) has a multiplicity of roles with "'WIll regards to the Bond Financing; accordingly, these are now discussed. Marketing Prospects for the Various Products Types Official Statement Prospective Bond Purchasers Aggregate Levels of Special Ta~ Revenues Maximum Special Taxes for the Residential Products Conforming to the Issuer's Policies ....,.; Share of Payments: Developer/Builder vs. Final-Users Determined by the Absorption Schedules Appraisal of Property Discounted Cash Flow - Present Value Absorption Schedules The Issuing Agency for the Bond Issue, the City of Lake Elsinore, along with the Financial Advisor, can utilize the Market Absorption Study, Appraisal, and Special Tax Revenue to structure the Bond Issue for CFD No. 2005-6. Empire Economics 6 3d AGENDA ITEM NO. ~!:J. ........., PACE2lLOF February 16,2006 METHODOLOGY UNDERLYING THE MARKET STUDY ~ To perform a comprehensive analysis of the macroeconomic and microeconomic factors that are expected to influence the absorption of the residential townhome housing products in CFD No. 2005- 6, Empire's Market Absorption Study conducts a systematic analysis of the following factors: MACROECONOMIC FACTORS FOR CFD NO. 2005-6 MARKET AREA * Market Supply Planning Projections * Market Demand Economic Conditions * Reconciliation * Growth Potential for the Market Area MICROECONOMIC FACTORS FOR CFD NO. 2005-6 ~ Regional Development Patterns Socioeconomic: School and Crime Housing Price Trends and Patterns Competitive Market Analysis - Product Types Residential Projects *Location *Product Types *Prices *Special Taxes/Assessments *F eatures/ Amenities ABSORPTION SCHEDULES Each Product Type/Plan *Residential Townhomes *Market Entry to Build-Out Therefore, the Market Absorption Study systematically proceeds from the macroeconomic analysis of the Market Region's future housing, industrial and commercial growth to the microeconomic analysis of the estimated absorption schedules for the residential townhome housing products/plans in the City of Lake Elsinore CFD No. 2005-6 (Vista del Lago). /"'"' Empire Economics 7 ACiENOA fTEM NO. 3 ~ IPACE~OF3~~:: February ]6,2006 RECENTIEXPECTED ECONOMIC TRENDSIPATTERNS The purpose of this section is to discuss the recent/expected economic trends/patterns for the United States (US), California (CA), and Riverside County (RC), including Gross Domestic Product, ......" employment, housing starts, mortgage rates and oil/gas prices. Recent /Expected Real Gross Domestic Product Trends/Patterns With regards to the recent/expected growth rates for Gross Domestic Product (GDP) for the United States economy, they are as follows: · During 1999 and 2000, real GDP increased at strong rates of by 4.50% and 3.70%, respectively. · Then, in 2001 and 2002, as the economy slowed, real GDP increased by only 0.80% and 1.60%, respectively. · In 2003 and 2004, as the economy rebounded, real GDP increased by some 2.70% and 4.20%, respectively. · For 2005, real GDP growth moderated somewhat to a rate of3.15%. · For 2006, real GDP is expected to moderate further to a rate of some 2.85%. Next, with respect to the actual/expected rates of change for the various components of real GDP for 2005 as compared to 2006 are as follows: · Consumption, which increased at some 3.28% in 2005 is expected to moderate to a rate of some 2.78% in 2006. · Business investment, which increased at some 7.00% in 2005 is expected to moderate to 4.83% in 2006. · Finally, with respect to government purchases, which grew at a rate of 1.65% in 2005 are '-' expected to increase by 2.13% in 2006. Therefore, comparing the rates of growth for the various components of real GDP for 2006 as compared to 2005 reveals that the overall rate of growth is expected to moderate somewhat while among the various sectors, consumption and investment are expected to moderate while the rate of growth for government spending rises. UNITED STATES REAL GDP AND ITS COMPONENTS: ANNUALLY ]2"'. >- 100/0 ~ ,..;j ~ 80/. / ~" ;J A.. Z 6% Z "'-<II I .-.... -< 4% - . ~. t--~ ~- ...! 101 ~ " - IVY1' - 1.(<0,1 ~ Z 2% <S8I 18: \ ~ ~ ~. l%T ~ -< IVV'Q := 0% / U '"' -2% 0 r\ / 101 ... -4% ~ -6% \ "' \~ / -8% .10"'/. 1999 200ll 2001 2002 2003 2004 2005 2006 =U5:Ovemll 4.50"-' 3.70% O.8(W'. 1.60% 2.70% 4.20% 3.15% 2.8S". I-ConsumDtion 4.90'-' 4.70% 2.50% 2,70". 2.900/. 3.90% 3.28% 2.18% -- Invcstmcnl 6.200/. 5.50% -8.00% -5.50% 6.4oe/. 9.80% 7.00% I . Govemmenl 3.70"-' 2.10% 3.400/. 4.MW. 2.80% 2.10% 1.65% ~"".I'J% P ~1 3~ TEMNO._ ~~ e.:16-0F -> Empire Economics 8 February] 6, 2006 Recent/Expected Employment Trends/Patterns /""" With regards to the recent/expected growth rates for employment, these are now discussed for the United States, California, and Riverside County economies, both on an annual as well as a quarterly basis. For the United States economy, the recent trends/patterns for employment have been as follows: . In 1999 and 2000, employment growth was strong, some 2.44% and 2.20%, respectively. . Then, in 2001, due to the economic slowdown, employment was virtually stable. . For 2002, employment declined by -1.13%., followed by a decrease of -0.26% in 2003. . In 2004, as the economy moved into its recovery phase, employment rose by some 1.13%. . For 2005, as the economy expanded further, employment rose by 1.64%. . For 2006, as the economy slows, employment growth is expected to moderate to 1.25% California's employment followed a generally similar pattern: . Strong rates of employment growth in 1999 and 2000 of 2.90% and 3.50%, respectively. . Then in 2001, employment rose only moderately, some 0.80%. . However, in 2002 to 2003, employment declined to -0.99% and -0.45%, respectively. . For 2004, the economy moved into a recovery, with an employment gain of 1.02%. . In 2005, the economy had stronger growth, with employment rising at a rate of 1.54%. . For 2006, as the economy slows, employment growth is expected to moderate to 1.10% /"'" Riverside-San Bernardino (R-SB) counties, on a comparative basis, have performed favorably: . R-SB counties experienced strong, though diminishing, rates of employment growth during 1999-2002, from 6.44% in 1999 to 3.38% in 2002. . Employment growth moderated in 2003, with a growth rate of3.26%. . Then, in 2004, employment rose at higher level of some 4.60%. . For 2005, employment growth moderated to a rate of some 2.00%. . For 2006, the rate of employment growth is expected to moderate further, to some 1.45% Therefore, during 2006, the United States, California and R-SB counties economies are all expected to experience lower rates of employment growth. ,,--. UNITED Sf A TES, CALIFORNIA & RIVERSIDE. SAN BERNARDINO COUNTIES RECENT/EXPECTED EMPLOYMENT TRENDS: ANNUALLY . 7% .... 6% , .... 1', ~ 5% ;;:> " r"~ /.#~, :z ~ 4'1, , ~ r'_ /" '\. fool " 3'Y. .'\ " ~ 2% " =-::l. - U --- 10. 1% 0 '" ~ ~ BS8 fool foo 0% ~ ~ ~ -10/. -2% 1999 2000 2001 2002 2003 2004 2005 2006 C::x:lUnited States 2.44% 2.we/. O.DO'V. -1.13% -0.26% 1.13". 1.64% 1.250/. -CoIifomi. 2.900/. 3.SCW. 0.80'1. -<l.99% -0.45% 1.02% 1.54". 1.10% ~'RSB 6.44!1. 5.26% 4.180.... 3.38"1. 3.26% 4.6QOA, 2.00% 1.45% 4r.1 Empire Economics 9 NDA ITEM NO. 'b ~~ PAG~OFj February 16, 2006 Recent/Expected Trends/Patterns for Housing Starts With regards to the recent trends and patterns for housing starts, they are as follows: ~ · The United States housing market experienced a strong growth during the 2000 to 2005 time period, with the number of new homes rising from 1,573,400 in 2000 to 2,044,125 in 2005. For 2006, the United States housing market is expected to moderate to some 1,803,550 new homes, due to the combined impacts of a slowing economy as well as higher mortgage rates. · For the California housing market, housing starts have had strong growth during 2000 to 2005, as the number of new homes rose from 139,073 in 1999 to 212,954 in 2005. The California housing market is expected to decrease somewhat in 2006 to some 183,180 new homes, also as a result of a slowing economy and higher mortgage rates. . Finally, with respect to Riverside County, housing starts rose dramatically during the 1999- 2004 time period, from 14,577 homes in 1999 to 35,696 homes in 2005. For 2006, the level of activity is expected to moderate somewhat, to some 29,740 homes, due to the expectation of higher mortgage rates as well as higher gas prices. So, for 2005, the United States, California, and Riverside County housing markets are expected to decline somewhat from their 2005 levels, due primarily to higher levels of mortgage rates as well as higher gas prices. UNITED STATES, CALIFORNIA AND RIVERSIDE COUNTY HOUSING STARTS: ANNUALLY ....., --"" 2,000,000 ~ _.~ /- ---- . ... ~ C/) ~ w ~ -- - - -........ - 1,500,000 ....... - C/) Q W !:: 1,000,000 Z ~ 500,000 ... -<1l" ....- --..... 0 1999 2000 2001 2002 2003 2004 2005 2006 - Left: United States 1,663,100 1,573,400 1,601,200 1,712,340 1,858,760 1,963,700 2,044,125 1,803,550 -+-Right California 139,073 148,540 148,757 164,318 194,882 210,150 212,954 183,180 -- Right: Riverside County 14,577 17,692 19,890 20,990 28,366 33,870 35,696 29,740 2 500 000 250,000 200,000 ~ Z ~ 0 0 150,000 Q Z <( <( 100,000 Z ~ 0 u. ::::; 50,000 <( 0 0 Empire Economics 10 3~ ~l!ENOA ntM NO. 3h.~ PAG~.=9F_ . February ]6,2006 Recent/Expected Trends in Mortgage Rates ,.,-.- The recent/expected trends/patterns for mortgage rates, including the 15 year fixed rate mortgage, as well as the 10-year Treasury Bond which influences the 15 year fixed rate mortgage, and the 1 year adjustable, are now discussed: . During the 2000 to 2003 time period, the rates on the 10-year Treasury Bond, 15 year fixed mortgage and the 1 year adjustable mortgage all declined: the 10-year Treasury Bond from 6.00% to 3.95% (-2.05%), the 15 year fixed mortgage from 7.73% to 5.17% (-2.56%), and the 1 year adjustable mortgage from 7.05% to 3.76% (-3.29%). . From 2003 to 2005, the rates started to rise: on the 10-year Treasury Bond from 3.95% to 4.29% (+0.34%), the 15 year fixed mortgage from 5.17% to 5.42% (+0.25%), and the 1 year adjustable mortgage from 3.76% to 4.49% (+0.73%). . For 2006 as compare to 2005, the rates are expected to rise further, the 10-year Treasury Bond from 4.29% to 4.75% (+0.46%), the 15 year mortgage from 5.42% to 6.07% (+0.65%), and the 1 year adjustable mortgage from 4.49% to 5.44% (+0.95%). So, during 2006, financial rates are expected to rise at a faster pace, with an increase in the 10-year Treasury Bond driving up the 15 year fixed rates by some 0.65% while the increases in the federal fund rate by the Federal Reserve Board drives up the 1 year adjustable rate mortgages by some 0.95%. ,.,-.- UNITED STATES MORTGAGE RATES: ANNUALLY 9.00% 8.00% 7.00% ;;.; ..:l ~ 6.00% ;;;J Z 5.00% ~ I 4.00% ..:l ~ ;, 3.00% ~ ..:l 2.00% 1.00% 0.00% 2000 2001 1!Iil!!!B!l10-YrBond 6.00% 5.00% ---+-- I Yr Adjustable 7.05% 5.82% -... - 15 Year - Fixed 7.73% 6.50% -30-YearFixed 8.06% 6.97% ~ -..--.- ----..---- 2002 2003 4.60% 3.95% 4.62% 3.76% 5.98% 5.17% 6.54% 5.83% 2004 2005 2006 4.29% 4.75% 4.49% 5.44% 5.42% 6.07% 5.87% 6.51% 4.27% 3.88% 5.20% 5.97% Empire Economics 11 AGENDA ITEM NO. 3~_ p~tg OF ~y~- "f' em , uu6 RecentJExpected Trends/Patterns for Gas Prices in California With regards to the recent/expected annual gas prices per gallon in California, they are as follows: · From 1999 to 2000, California gas prices rose significantly from $1.47 to $1.77, respectively, an increase of some $0.30. · Then, gas prices declined to $1.62 in 2002, a decrease of -$0.12 from $1.74 in 2001. · However, with the invasion of Iraq and uncertainty in the Middle East, California gasoline prices rose dramatically to $2.23 in 2004, an increase of$0.61 from 2002. · For 2005, gas prices rose further to $2.61, an additional increase of some $0.38 from 2004. · For 2006, gas prices are expected to decline slightly, to some $2.51, a decrease of some $0.10 from 2005. So, during 1999 to 2005, California gas prices have risen significantly, by some $1.14 per gallon but they are expected to decline slightly in 2006, by some $0.10. CALIFORNIA GAS PRICES: ANNUALLY $3.00 $2.50 $2.00 $1.50 ~ ~ ItYIi'\.I $1.00 $0.50 $- 2006 1999 2000 2001 2002 2003 2004 2005 Ie Gasoline Prices - CA $1.47 $1.77 $1.74 $1.62 $1.94 $2.23 $2.61 $2.51 ;;.. ....:l ~ ~ ~ I r.::l U ;: ~ ....., ....., 3~ Ac;EN~Z. OF=--:2."2..4.-- Empire Economics 12 February 16,2006 SOCIOECONOMICS CHARACTERISTICS: CRIME LEVELS AND THE QUALITY OF SCHOOLS ;-.- When households consider the purchase of a home, the primary factors are the location (relative to their place of employment) and price (within their income/affordability levels). Furthermore, secondary socioeconomic factors that are significant include the safety of the neighborhood as well as the quality of the schools; accordingly, these are now discussed Crime Levels and Neil!hborhood Safety To gauge the safety of Riverside County and the CFD No. 2005-6 Neighborhood Area, information on crime levels was obtained utilizing the most recently available data from the Federal Bureau of Investigation (FBI) Index. The FBI Crime Index represents a compilation of crime data using the Uniform Crime Reporting system to ensure reliability and consistency among various geographical areas. The FBI Crime Index has two components for crime: violent crime and property crime. Violent crime consists of murder and non-negligent man-slaughter, forcible rape, robbery, and aggravated assault. Property crime consi~ts of burglary, larceny-theft, motor vehicle theft and arson. For the state of California, approximately 88% of all crimes are property crimes whereas 12% are violent crimes. However, it should be noted that these statistics do not measure the "human or emotional" reactions of individuals to different types of crime. To adjust for the population differences of various geographical areas, Empire Economics divides the 'crime levels by the population to represent the number of crimes per 1,000 people. ,...... For California, as a whole, the average crime rate is approximately 40.2 per 1,000 people per year. For Southern California the rate is 39.1, which is slightly lower than the state average. While for Riverside County, the rate is 45.0, somewhat higher than for Southern California and also California. RIVERSIDE COUNTY CRIME RATES BY CITY * DESIGNATES CITY IN THE CFD MARKET AREA 120 w 100 Riverside Countv A verene: 45.0 -' ~ IL 0 W IL C 80 z ~ 00( Ul ::;) 0 % 60 ... ~ w * z 0 II: w 40 IL Ul w :iI! ~ ~ 0 2: ~ m ~ ; ! 1 j F ~ i ~ i ! 1 ! i I ~ J f t 5 1 ~ " ~ ~ ~ .i 0 I ~ ~ ~ .5 ~ ji ~ i ~ ,-. Empire Economics 13 AfJENO.Pd'.n:.. WlIlU. 3;;:( ~ ';iAf:;~ _Of~ February 16,2006 Quality of Schools and Education To gauge the quality of schools in Riverside County and the CFD No. 2005-6 Neighborhood Area, "",- information was compiled on educational achievement, specifically the SAT I scores. For the Southern California counties, as a whole, the SAT I scores (with 1,600 being the highest possible) were at a level of 1,014 and this is similar to the scores for California as a whole, some 1,015. While for Riverside County, in particular, the SAT I scores amount to 963, somewhat below the overall averages for California and also Southern California. For Riverside County, the average SAT I score was 963. For the school district in the CFD No. 2005-6 Neighborhood Area, the Lake Elsinore Unified School District, their SAT I score amounts to 982, and this is somewhat higher than for Riverside County as a whole. ... ~ f!/ 1600 = is ;'i ~ 1400 ~z 00 1ooE=: fool ~ 1200 c,,;:. ~= ~~ -< 0 1000 ~t ~~ ~~ 800 ~~ -<~ 600 ~~ rii 400 ~ o u '" ... -< '" SAT I TEST SCORES: MATH AND VERBAL AVERAGE ( * DESIGNATES SCHOOL DISTRICT IN THE CFD) Riverside County Average: 963 / 1013 1031 1034 1039 ^ " n~o 966 969 970 982 on 833 u'u 7#;1 - "'" "0 " 0:: 'S ;:. ]' ;;; > ..!!l ] g 8 1l 0:: 8 .. c 'S c " a:l Il 0:: 'S ;:. ~ 1l 0:: 'S ;:. -2 " > o ;;; ... Il 0:: 8 9 c ] ~ '" "0 " 0:: 8 " Co i! ~ "0 " 0:: 'S ;:. "E g < "0 " 0:: 'S ::> >- .!! ;;; > ~ o ~ 1l 0:: 'S ::> ~ c ." Co '" e ;;; ... Il 0:: 'S ::> ~ ~ '" t: ~ Cl "0 " 0:: 8 o g ~ ~ 8 .c: .. :;: c o 'S ::> .~ ... "0 " 0:: 'S ::> .g .~ ;. ~ 1l 0:: 'S ::> e o .a lil ~ ....l "0 " 0:: 'S ::> E " :c "0 " 0:: 'S ::> >- .!! ;;; > s 'e " ~ "0 " 0:: 'S ::> C ~ " a:l 1l 0:: 'S ::> ]' ;;; > " g " e " ... ;;; > Therefore, from a socioeconomic perspective, Riverside County has a somewhat higher crime rate and a somewhat lower educational achievement level than California and also Southern California, as a whole. By comparison, the City of Lake Elsinore, wherein CFD No. 2005-6 is situated, has a slightly lower crime rate and the school district has a slightly higher educational achievement level than the county as a whole, and so CFD No. 2005-6 is considered to be in a generally desirable socioeconomic area. Empire Economics 14 3:( ACENOA'lEMNO.- 0-~~ PACeJJ:!-OF February 16, 2006 /""c POTENTIAL "FINANCIAL" RISK FACTORS UNDERLYING THE CREDIT QUALITY AND BOND SIZING FOR LAND SECURED FINANCINGS IN SOUTHERN CALIFORNIA There has recently been a substantial amount of discussion on the potential for a housing market bubble, including remarks of "froth in some local markets" by the former Federal Reserve Board Chairman, Alan Greenspan, based primarily upon the use of exotic mortgage structures; these remarks have dealt with the housing market on a national as well as a regional level. However, developing Planned Communities have characteristics that differentiate them from broader markets: they represent the marketing of new homes to purchasers at current prices that exclusively utilize current mortgage rates and financing structures, and they are also concentrated in particular geographical locations. The purpose of this section is to focus specifically on the potential implications of the recent use of adjustable rate and creative financing techniques that are presently available for home purchasers on the credit quality underlying land-secured financings in Southern California. /"""'" There has been a fundamental shift in the driving force underlying the recent rates of housing price appreciation, from the historical role of employment growth as the driving force to the recent role of adjustable rate and creative financing techniques as the driving force. These financial factors have been the primary driving force underling the extraordinary rate of housing price appreciation in Southern California of more than 75% since January 2002. Consequently the current levels of housing prices and land values are subject to potentially substantial downward adjustments, due to mortgage rate resets (as mortgages are adjusted from teaser rates to market rates) as well as higher short-term rates (due to rate hikes by the Federal Reserve Board). These adjustments, in turn, may cause a softening in housing prices and land values that could adversely impact the credit quality underlying land-secured financings. Creative financing refers to the use of loan structures other than fixed-rate or 1 year adjustable, including the following: interest only, payment option loans as well as initial teaser rates (below market rates that are offered only for a limited time period) with very low initial payments that result in negative amortizations (higher principal balance), less stringent lending standards such as low/no documentation, and much higher mortgage payment to income ratios, among others. Structural Shift of Factors Underlying Housing Price Appreciation Since January 2002 there has been a fundamental shift in the primary factor underlying housing price appreciation in Southern California; the primary driving force was initially declining mortgage rates as well as the extensive use of adjustable and creative financing as compared to the traditional driving force of strong employment growth. Specifically, the term "driving force" is utilized herein to refer to a SIGNIFICANT CHANGE in a major economic/financial factor that has STRONG DISCERNIBLE IMP ACT on housing prices. ,........ 4.0ENDA ,,.M NO. .3f ~ ~ PAGE 2;l?.- ~OF ~ Empire Economics 15 February 16,2006 .._..,_.-r ~ January 2002 through June 2003: The rates on fixed 30-year mortgage loans declined to recent historic lows in June 2003, and were a driving force underlying the rate of housing price appreciation of some 13.4% on an annualized basis; however, since June 2003, fixed rate mortgages have been ABOVE their recent historic lows. ....." ~ July 2003 to March 2004: As fixed mortgage rates rose, purchasers shifted to adjustable rate mortgages which offered significantly lower rates, and these were a driving force underlying the rate of housing price appreciation of some 18.8% on an annualized basis; however, since March 2004, adjustable rates have been ABOVE their recent historic lows. ~ April 2004 - Presently: As adjustable mortgage rates rose due to the Federal Reserve Board increasing the federal funds rate, home buyers shifted to various types of creative financial structures, and these were a driving force underlying the rate of housing price appreciation of some 24.1 % on an annualized basis; however, since Fall-2005, some lenders have started to tighten their qualification standards. Potential Adjustments for Mortgage Payments The extensive use of adjustable rate mortgages and also creative mortgage structures since June 2003 means that such homeowners have monthly mortgage payments which are subject to significant upward adjustments due to automatic mortgage rate resets as well as potentially higher interest rates: ~ Mortgage Resets (Stable Mortgage Rates) reflect the changes in mortgage payments that households with adjustable and creative mortgage structures will incur as the initial "teaser" rates are realigned with the current "market" rates. The dollar volume of mortgages subject to resets for the United States mortgage market is expected to increase from $83 billion in 2005 to more that $1 trillion in 2007. ~ ~ Higher Mortgage Rates would result in even higher monthly payments for homeowners with adjustable rate mortgages as well as creative mortgage structures; the increase in their mortgage payments depends upon the degree to which short-term rates rise. The recent use of adjustable rate and creative financing techniques by home purchasers is especially significant for residential land secured financings, since these financings are predominately for developing Planned Communities that represent the marketing of new homes to purchasers at current prices that exclusively utilize current mortgage rates and financing structures and they are also concentrated in particular geographical locations. Specific Impacts of Rate Resets and Higher Mortgage Rates on the Land Secured Credit Quality To the extent that mortgage payments rise due to various possible combinations of automatic mortgage rate resets as well as potentially higher short-term rates that directly impact adjustable rate and creative mortgages, then the credit quality underlying recent land-secured financings may be diminished in the following ways: AGENDA ITEM NO. :;, A t;;! PAOEJ0 OF.~3 Empire Economics 16 February 16, 2006 .~,-..---- ,,-.. ~ Lower housing prices resulting in a higher Special Tax to Housing Price Burden for homeowners, possibly in excess of the Issuer's policy of a maximum total tax burden, typically some 1.8% to 2.0% of the initial sales prices, even though these maximums may have been satisfied at the time that the Special Taxes were established. ~ Significantly lower land values resulting in a reduced ValuelLien ratio, possibly below the Issuer's policy of typically some 3 to 1 or 4 to 1 when the bonds are sold, thereby diminishing the security for bond holders. (The Appraisal for the Bond Issue is valid only for the stated Date of Value; it is not meant to be a prediction of future values.) ~ Higher levels of Special Tax delinquencies as monthly payments of owners increase resulting in diminishing the maximum Special Tax to the bond debt service coverage ratios for bond holders that may adversely impact the Issuer's ability to meet the debt service payments in a timely manner, possibly resulting in the use of the bond reserve fund. Adjustable rate mortgages (some 79% of current mortgages) have significantly higher delinquency rates than fixed rate mortgages; additionally, homeowners that use adjustable rate mortgages also have higher loan to value ratios as well, some 90% as compared to homeowners with fixed rate loans, some 81 %. Accordingly, in arriving at these conclusions, this section systematically discusses the following: /""' 1. 2. 3. 4. 5. Recent Shift in the Primary Factors Underling Housing Price Appreciation Financial Factors "Driving" Recent Housing Price Appreciation Mortgage Rate Resets: Realignment of Adjustable/Creative Loans to Market Rates Mortgage Rate Increases: Potential for Further Federal Reserve Board Rate Hikes Specific Impacts of Higher Mortgage Rates on the Land-Secured Credit Quality This section should not be construed as a forecast that mortgage rates will rise significantly in the foreseeable future; rather, it sets forth the POTENTIAL risk factors that mortgage rate resets as well as higher mortgage rates along with the near-term policy of the Federal Reserve Board would have on the credit quality underlying land-secured financings. Empire Economics acknowledges that financial markets, due to their high degree of economic efficiency and complexity, are difficult to forecast, and, as such, the use of the term "Potential" Risk Factor is regarded as being appropriate. /'*"" AGENDA iTEM NO. 3d_ ?!~.{P~ ~q__' gF3'~:' Empire Economics 17 February] 6, 2006 1. Recent Shift in the Primary Factors Underlvine Housine Price Appreciation The primary factors underlying housing price appreciation in Southern California since January 2002, declining mortgage rates as well as the extensive use of adjustable and creative financing, represent a fundamental shift from the traditional factor, employment growth. ...., Specifically, the term "driving force" is utilized herein to refer to a SIGNIFICANT CHANGE in a major economic/financial factor that has STRONG DISCERNIBLE IMPACT on housing prices. ~ During 1984-2001 housing price appreciation was driven by employment growth, along with accommodating financial factors, such as stable or somewhat declining mortgage rates. During this time period financial factors played only a secondary role: for instance, during 1991-1993 when employment decreased, housing prices declined, even though mortgage rates fell by more than two percentage points from their 1989-1990 levels. ~ However, since January 2002, as housing prices escalated at strong rates, the primary fundamental factor, employment growth, has experienced only minimal growth, less than 1 % per year, on the average. Instead, housing price appreciation has been driven primarily by financial factors, .particularly the use of adjustable rate mortgages and creative financing techniques. SOUTHERN CALIFORNIA EMPLOYMENT, HOUSING PRICES AND MORTGAGE RATES, HOUSING PRICE CHANGES DRIVEN BY EMPLOYMENT CHANGES Sources: Empire Economics, Employment Development Department, Freddie Mac & Office of Federal Housing During 2002 to 2005 financial factors have been the strong driving force underlying the rates of housing price appreciation. Specifically, the rates of housing price appreciation have been generally similar among all of the Southern California counties, despite their differences in geographic location, 3:l.. '--' employment growth and housing supply. ACENDA ITEM NO. :: PAGEZZ~ OF3\l,_ Empire Economics 18 February 16,2006 ~ ~ The rates of employment growth for the counties varied substantially during 2002 to 2005, from a low of -1.15% per year for Los Angeles County to a high of 4.60% per year for Riverside-San Bernardino counties. ~ The supply of new housing has also exhibited a wide variation during 2002 to 2005 as compared to 1999-2001, from declines of -26% in Ventura County and -14% in Orange County to increases of 80% in Riverside-San Bernardino counties. Therefore, the financial factors have been so strong that they have effectively overshadowed other possible explanatory factors such as geographical location, employment growth and housing supply. 2. Financial Factors "Drivin2" Recent Housin2 Price Avvreciation in Southern California The particular factors that have been the driving forces underlying recent strong rates of housing price appreciation in Southern California during January 2002 through 2005 are now discussed. Specifically, the factors which have driven housing prices since January 2002 started with fixed mortgage rates declining to recent historic lows, then a shift to adjustable rate mortgages, and, most recently, a shift to "creative" mortgage structures. January 2002 to June 2003: Prices Driven by Declining Fixed Rates; Fixed Rates Now Higher ~ Fixed-rate 30-year mortgage loans declined from 7.00% in January 2002 to a low of 5.23% in June 2003, and were a driving force underlying the rate of housing price appreciation of some 13.4% on an annualized basis. "....... ~ Since June 2003, rates on fixed rate mortgages have been ABOVE their recent historic lows and, as such, they are no longer considered to be a driving force underlying housing price appreciation. RECENT MORTGAGE RATE TRENDS: FIXED-RATE MORTGAGE LOANS 8.00"10 7.00% 6.00% e 5.00"10 ~ ~ 4.00% < ~ o 3.00"/. ~ 200% TRENDLINE FIXED RATE MORTGAGES RISE 1.00% FIXED RATE MORTGAGES AT HISTORIC LOWS: JUNE 2003 ~ 0.00% ~ > .. :;? . ~ .. :;? ~ ~ ~ ." q = q 2, ;; ~ 2, ;; = 2, ~ if !f ~ ~ ~ '" ~ ~ ~ 8 .. ~ 0 ~ > .. 0 5 '0 q 5 !f ~ 2, if ~ ~ Sources; Empire Economics & Freddie Mac Empire Economics 19 AGENDA ITEM NO. PAGEj2.I, February 16,2006 :::>;t OF ~3 t.i:. July 2003 to March 2004: Prices Driven by Adjustable Rate Loans; Adjustable Rates Higher ~ Starting in July 2003, as rates on fixed rate mortgages rose, households shifted to adjustable rate mortgages which offered favorable terms, due to the Federal Reserve Board maintaining a low federal funds rate, and these attained a recent historic low of 3.41 %. During the July 2003 to March 2004 time period, adjustable rates were significantly below fixed rates of by some 215 basis points. The use of adjustable rates were a driving force underlying the rate of housing price appreciation of some 18.8% on an annualized basis. '-' ~. Since March 2004, the rates on adjustable rate mortgages have been ABOVE their recent historic lows, and, as such, they are no longer considered to be a driving force underlying housing price appreciation. RECENT MORTGAGE RATE TRENDS: I-YEAR ADJUSTABLE RATE LOANS 6.00% FEDEJlAL RESJi1l.VE BOARD LOWER!l1llE FEI:EIW. R1NDS!tAlES DUE 10 tHE NASDAQ MEL1POWNAM:l 9-1 I ATIACK:l FEDEJtAL RESERVE BOARD 1lAZ5Ji31H1l fEDERAL F1JNlXI: Il.ATE DUIi 10 NUmNAR.Y COlaJtNS. '.00% TRENDUNE ADmSTABLI! RATE MORTGAGES 4.00% e ~ l:l 3.00% .. g !l " 2.00% ADmSTABLE RATE 1.00% MORTGAGES AT HISTORIC LOWS, MARCH 2004 O.OlW. '" 1 :.- f '" ! '" '" f ~ J '" '" ~ f ~ ... I ~ ~ ... ~ ~ ~ I B I t ~ ~ ~ if ~ ~ 1......aI i ! I 1 ~ f , '-' Soun:c:s; Empi~ EcoRomicl il Freddie M.: ~ For Southern California, the percentage of adjustable rate loans has risen dramatically, from 19% in 2001 to 79% during 2005; conversely, fixed rate loans have decreased from 81% in 2001 to only 21 % in 2005. Additionally, each of the Southern California counties exhibited a similar pattern in the shift from fixed-rate to adjustable rate mortgages as well. TYPES OF MORTGAGE LOANS - SOUTHERN CALIFORNIA 100% 90% 80% 70% ~ 60% 0 "" 50% :;; ~ "'" 30% 20% 10% 0% 2001 2002 Ell Sbare-Fixed 2003 2004 DShare-Variable 2005 Empire Economics 20 AGENOA rrEM N6, PACE~~ February Ib, b .'. 3:> ~.., Qf J~\lt:: Sources: Empire Economics, MOI18age Bankers Association a. Real Property ~ ~ Furthermore, for Southern California, the ratio of the mortgage loans (first and seconds) to the housing purchase prices during 2001 to 2005 has risen for homeowners with adjustable rate mortgages as compared to homeowners with fixed-rate loans. For homeowners with adjustable rate loans, the ratio of their loans to the purchase price of the homes has risen from 85% in 2001 to 90% in 2005, a gain of five percentage points. While for homeowners with fixed-rate mortgages the ratio of their loans to the purchase price of their homes has declined from 87% in 2001 to 81 % in 2005, a decrease of six percentage points. So, homeowners with adjustable rate mortgages have substantially higher amounts of mortgage debt (90%) as compared to homeowners with fixed rate mortgages (81%). LOAN TO VALUE RATIOS - SOUTHERN CALIFORNIA FIXED-RATE vs. V ARIABLE-RA TE LOANS ,-.... 100% 95% '" 90010 z ... 0 ..J ... 0 l:l 85% ~ '" 80% 7.5% 2001 2002 2003 2004 DVariable: LoanNalue 2005 IiiIFixed: LoanNalue Sources: Empire Economics, Mortgage Bankers Association & Real Property April 2004 to Present: Prices Driven by Shifting to Creative Loan Structures: ~ Since April 2004, as adjustable rates rose due to the Federal Reserve Board increasing the federal funds rate, home buyers shifted to various types of creative financial structures. These have been the driving force underlying the rate of housing price appreciation of some 24.1 % on an annualized basis. Creative financing refers to the use of loan structures other than fixed-rate or 1 year adjustable, including the following: interest only, payment option loans as well as initial teaser rates such as 1 % for the first year that results in negative amortizations (higher principal balance), less stringent lending standards such as low/no documentation, and much higher mortgage payment to income ratios, among others. ,-.... During the 2001 to 2004 time period, for the United States as a whole, there has been a dramatic shift from fixed rate to adjustable rate loans: fixed rate mortgage loans declined from 75% in 2001 to only 19% in 2004. Adjustable rates that were amortized (interest and principal) rose from 20% to 29% while adjustable rates that are interest only (no reduction of principal) rose dramatically, from 5% in 2001 to 53% in 2004. Empire Economics 21 AGENDA ITEM NO. 3~ DAGE ?~Jt' OF ~~,,~ February ~ ]()()O,4 90",1, 80% ~ 70% ~ '" 60% ~ ~ 50% ... 0 .. 40% (:> ~ 300k .. ~ t: 20% 10% 0% RECENT TRENDS FOR VARIOUS MORTGAGE LOAN STRUCTURES FIXED RATE, ADJUSTABLE RATE AND INTEREST ONLY Fixed Rate ARM- Amortized ARM-Interest Only 112001 D2002 III 2003 82004 Sowces: Empire Economics, Loan Perfonnance & Mortgage Bankers Association Conclusions In conclusion, since January 2002, the primary driving force underlying housing price appreciation has been households initially taking advantage of recent historically low fixed rates through June 2003, then a shift to adjustable rate mortgages through March 2004, and finally, since then, the use of creative financing structures. Specifically, for the same monthly mortgage payment, the use of lower mortgage rates and creative mortgage structures has bolstered housing prices substantially since January 2002. 50% 45% 40% '" l::l 0 35% ill .. ... ! 30% . '" 25% .. ~ z 20% 0 S 15% 0 ~ ... 10% ... -< 5% 0% Empire Economics RELATIONSHIP OF HOUSING PRICE APPRECIA nON AND TYPES OF MORTGAGE FINANCINGS Shift to Creative Structures' A ril 2004 to December 2005, A reciation: 42.1% Fixed Rates Decline: Appreciation: 20.1% Shift to Variable Rates: Jul -2003 to March 2004 Appreciation: 14.1% Sources: Empire Economics & Office of Federal Housing 22 ACimOA ITEM NO. Febru~ 7/iIf. ...., ......., ......., 3~ OF :s3Ct - -..---- 3. Morteaee Rate Resets: Realienment of Adiustable/Creative Loans to Market Rates ,,- There may be some softness in housing prices and land values even if mortgage rates remain stable during the foreseeable future, as households with various types of "adjustable rate" and "creative" debt structures have their initial teaser rates realigned to the current market rates. The resets are expected to generally result in higher monthly payments for homeowners since both the fixed as well as adjustable rate loans attained their recent historical lows in June 2003 and March 2004, respectively, and, since then, these rates have moved upwards: ~ Fixed Rate Loans were recently at some 6.32%, some 109 basis points above their recent historic low. ~ Adjustable Rate Loans were recently at some 5.22%, some 181 basis points above their recent historic lows. With regard to the amount of mortgages that are subject to such resets, based upon data for the United States mortgage market as a whole, these are expected to rise dramatically, from some $0.83 billion in 2005 to more that $1.0 trillion in 2007. ESTIMATED MORTGAGE LOAN - RESETS VARIABLE RATE LOANS WITH ADJUSTABLE MORTGAGE RATES SI.20 -------. Sl.OO! /"""' S1.oo SO.083 !:! '" ~ SO.80 ::; "' Oi! 1-0 '" SO.60 z <( o "' .. ~ SO.40 ~ o ~ SO.20 SO.oo 2005 2006 SMoItgage Loans - TRILLIONS 2007 Sources: Empire Economics & DB Global Madets Research The specific types of resets that may occur for adjustable rate and creative loan structures as rates are realigned with the marketplace are as follows: ~ Adjustable Rate Mortgages are expected to have upward reset adjustments to their monthly payments as a result of the Federal Reserve Board's policy since June 2004 which has caused the short end of the yield curve to rise significantly. The one-year adjustable loans, which were at their recent historic lows in March 2004, have started to have higher monthly payments, and such loans are now some 181 basis points above their cyclical lows. /""' Empire Economics 23 ACENDA ITEM NO. :3 do. PAOE~~O OF 3<~- - February 16,2006 For instance, a household that entered into an adjustable rate loan in March 2004 with a rate of 3.41% would encounter an approximate adjustment in March 2005 to a rate of 4.23%. This represents an increase of some 82 basis points which results in the household's mortgage payment rising by some 24%. So, for a household with a monthly mortgage payment of some ....." $2,000 per month, their payment would increase to some $2,480 per month. ~ Creative Mortgage Structures will undergo reset adjustments over time as the starter teaser rates are adjusted to their market rates. Since creative mortgages are typically based upon short-term rates and also have further adjustments due to teaser rates, then the mortgage payments of such households may rise by much more than for adjustable rate mortgages. So, households with adjustable and creative mortgage structures will encounter higher mortgage payments as their initial teaser rates are realigned to the market rates which have significantly higher mortgage payments due to the recent hikes ofthe federal funds rate by the Federal Reserve Board. For example, the types of adjustments that may occur for various loan structures can be gauged by comparing their initial payments with their payments at the start of year six, after the five year time span during which rates are fixed at a low level; accordingly, these adjustments for various interest rate scenarios are as follows: Mortaaae Loan of $500,000 Fixed Rate Hybrid ARM Option ARM 30- Year Interest Only Initial Min. Pymts. Initial Pavments - First Five Years $2,998 $2,553 $1,608 (Interest & Princioan (Interest Only) (Minimum Payments) (Neoatiye Amortization) Rates Decline 100 BP Payment: Start of Sixth-Yr. $2,998 $2,960 $3,289 Chanoe from Initial Pvmt. 0% 16% 105% Rates Stable Payment: Start of Sixth-Yr. $2,998 $3,260 $3,575 Chanae from Initial Pymt. 0% 28% 122% Rates Rise 100 BP Payment: Start of Sixth-Yr. $2,998 $3,513 $3,928 Change from Initial Pymt. 0% 38% 144% ....." ~ Homeowners with fixed rate mortgages can expect stable mortgage payments of some $2,998 per year for the entire term of the loan of 30 years, regardless of what happens to mortgage rates after they originate their loans. ~ Homeowners with Hybrid ARM Interest Only Loans have lower payments for the initial five years but can then expect higher mortgage payments starting in year six: from $2,553 to $3,260 (+28%) if rates are stable or, if rates rise by 100 basis points (one percent), from $2,553 to $3,513 (+38%). ~ Homeowners with Option ARMs that initially make mInImUm payments (negative amortization) of some $1,608 can expect very significant increases in their monthly payments at the start of year six: from the initial payment of$I,608 to $3,575 (+122%) ifrates are stable, or if rates rise by 100 basis points, from $1,608 to $3,928 (+144%). Empire Economics 24 ACENDA ITEM NO. PAGE;?3 ( February 16,2006 ~ ~ ....." OF330-- ,,-.... Additionally, the mortgage delinquency levels for homeowners with adjustable and creative mortgages have traditionally been significantly higher than for homeowners with fixed rate loans. This is typically attributed to homeowners with adjustable rate loans having difficulty with higher mortgage payments as rates rise as well as such households having "low" equity levels (due to higher loan to price ratios as well as negative amortization), and hence less of an incentive to "hold-on" to the home, especially if the rate of appreciation diminishes. During the 2000-2005 time period, the 5.4% delinquency rate for adjustable rate loans has been above the 3.6% delinquency rate for fixed rate loans by some 50% (5.4% vs. 3.6%.). DELINQUENCY RATES: FIXED-RATE VS. V ARIABLE-RA TE LOANS ",...... 7% 6% 5% '" ~ S 4% .. 0 '" '" < 3% ~ '" ~ '" 2% .. 1% 0% 2000 2001 2002 IiJFixed-Rate 2003 2004 2005 DVariable-Rate Sources: Empire Economics & National Delinquency 4. Mort2a2e Rate Increases: Potential for Further Federal Reserve Board Rate Hikes Since the financial markets, being very efficient, are difficult to forecast, especially mid-term and long- term rates, it is not the position of Empire Economics to forecast that mortgage rates will rise. Nevertheless, it is worthwhile to explore the potential implications of the Federal Reserve Board continuing its current policy of increasing the federal funds rate, since this directly impacts the short- end of the yield curve, and, in turn, adjustable rate mortgage rates as well as the creative mortgage structures. The Federal Reserve Board, according to some analysts, is expected to raise the federal funds rate to some 4.75%, significantly above its prior level of 1.0% in June 2004; the federal funds rate is presently at 4.50%. Consequently, the primary driving forces underlying the strong rates of housing price appreciation, adjustable rates and creative financing structures, will diminish substantially over time. (Note: Since the recent fixed rate of some 6.32% is some 110 basis points above the recent one-year adjustable rate of 5.22%, even a moderate decline in fixed rates would not become a driving force for further price appreciation because they are significantly higher than adjustable rates.) "...... Empire Economics 25 AtiEND. A fTEM NO.. ? ). ?.= :?ACE. Z?L--- "OF~~~< February 16,2006 Therefore, further increases in the federal funds rate will result in the short-term rates rising, and this, in turn, will cause the following: """ ~ Existing Borrowers would have higher monthly payments as adjustable rate mortgages rise and creative teaser rates are realigned to HIGHER market rates, as compared to the current market rates. ~ New Borrowers would face HIGHER rates, reducing their ability to qualify for loans that support existing prices, thereby placing downward pressure on home prices. RECENT MORTGAGE RATES FIXED AND ADJUSTABLE AND THE FEDERAL RESERVE BOARD 8.00% ~ PRICE APPRECIATION: --- I 3.4o/oIyr-----.II---------18.8o/oIyr ---II --------------24.1 %/yr______ I 7.00% '" 6.00% I=! j;;! ..l 5.00% ~ U Z ..: z 4.00% !: ~ !j 3.00% ..: " ~ 2.00% i:I: 0 ::;; 1.00% 0.00% .... > 11: !!l '0 " 2: '< " ~ ..., '" 0 0 0 ..., 0 ..., FIXED RATE MORTGAGES AT HISTORIC LOWS: JULY 2003 ADmSTABLE RATE MORTGAGES AT HISTORIC LOWS: MARCH 2004 '-' 0 I > .... " f 1 -< I ..., '" 0 0 0 '" 0 '" 0 r > .... ~ ~ .G- .... 0 " '0 " " 5 0 2: -< g. " 2: -< If " I ~ I If ~ !l ..., ..., '" 0 '" 0 J: 0 ~ 0 '^ 0 '^ -Fixed: 30-Yr -Variable l-Yr '" ~ _Federal Funds Sources: Empire Economics, Federal Reserve Board & Freddie Mac 5. Specific Impacts of Hil!:her Mortl!:al!:e Rates on the Land-Secured Credit Quality The widespread use of adjustable rate and creative financing for newly developing residential projects has significant implications for the Credit Quality underlying Land Secured Financing: ~ Special Tax Rates set-forth in the Rate and Method of Apportionment of Special Taxes are based upon current housing prices which have recently realized strong rates of appreciation as a result of the utilization of adjustable and creative financing techniques by home purchasers. Empire Economics 26 ACENDA ITEM NO. PN;Et~ February] 6, 2006 , 2> ~ '-' OF 3~ {,-- """" Appraisals are based upon current land values, which, in turn, are derived from current housing prices, that have appreciated at a strong rate in recent years, and so they also reflect the use of adjustable and creative financing techniques. Furthermore, since the value of the land is a residual value, that is, the price of the home less the construction costs of building the home, most of the decline in the price of a home is passed through to the land, since construction costs are relatively stable in the short-run. For example, if a home with an initial price of $400,000 declines to $350,000, a reduction of some -$50,000 or -12.5%, the value of the finished lot for the same sized home declines from $149,000 to $113,600, a reduction of -$35,400 or -23.8%. Similarly, a decline in the price of a home by 25% results in a reduction of the value of a finished lot for the same sized home by some 48%! (Note: The above discussion focuses on the value of a finished lot which includes entitlements and infrastructure improvements; by comparison, the value of "raw" land, land without any entitlements or infrastructure improvements, may approach zero.) CHANGES IN HOUSING PRICES AND FINISHED LOT LAND VALUES * LAND VALUES DELCINE A T A FASTER RA TE ~ 0% 0.0"/. 0.0010 ~ -10% ~ ~ -20% ~ < f2 U -30% Ii! ... ~ ~ -40% 0 = ~ ~ -50% = u -600/. Price $ 400,000 Price $ 400,000 to $375,000 Price $ 400,000 to $350,000 Price $ 400,000 to $325,000 Price $ 400,000 to 5300,000 l.~ Change in Housing Prices . Change in Finished Lot Value Therefore, the Credit Quality underlying Land Secured Financings reflects the use of current prices and land values, and, as such, includes, among other factors, the underlying use of adjustable and creative loan structures by homeowners. Consequently, should mortgage rates rise significantly, the Credit Quality of the land secured bonds is subject to substantial weakening due to the following: ~ Lower housing prices resulting in a higher Special Tax to Home Price Burden for homeowners, possibly in excess of the Issuer's policy of a maximum total tax burden, typically ~ some 1.8% to 2.0% of the initial sales prices, even though these maximums may have been satisfied at the time that the Special Taxes were established. NO ~ ;;.. M~ENDA ITEM '_. . - ~., PAGE~OF 31. ~ >..- Empire Economics 27 February 16, 2006 >> Significantly lower land values resulting in a reduced Value/Lien ratio, possibly below the Issuer's policy of typically some 3 to 1 or 4 to 1 when the bonds are sold, thereby diminishing the security for bond holders. (The Appraisal for the Bond Issue is valid only for the stated Date of Value; it is not meant to be a prediction of future values.) ~ >> Higher levels of Special Tax delinquencies as monthly payments of owners increase resulting in diminishing the maximum Special Tax to the bond debt service coverage ratios for bond holders that may adversely impact the Issuer's ability to meet the debt service payments in a timely manner, possibly resulting in the use of the bond reserve fund. Adjustable rate mortgages (some 79% of current mortgages) have significantly higher delinquency rates than fixed rate mortgages; additionally, homeowners that use adjustable rate mortgages also have higher loan to value ratios as well, some 90% as compared to homeowners with fixed rate loans, some 81 %. Therefore, as mortgage rate resets occur to the current market rates, and furthermore, to the extent that mortgage rates rise further, then the Credit Quality for Land Secured financing may be diminished, resulting in Higher Tax Burdens due to lower housing prices, Lower Value/Lien Ratios due to lower land values, and Higher Special Tax Delinquencies due to higher monthly mortgage payments. 6. Recent Trends/Patterns for "Notices of Default" for Mort2a2es A "leading" indicator of higher Special Tax delinquency rates may be "notices of default" (NOD) that are recorded against homes that are not making their mortgage payments on a timely basis. The NOD hit a prior peak in 1996, due to the adverse impacts that the economic recession had on the housing market, and then declined thereafter. However, for 2005 as compared to 2004, the level of NODs began to rise, by some 15.6% for California, 19.6% for Southern California and 43.1% for Riverside County. So, although the number of NODs is well below the prior peak levels of 1996, the recent patterns of increases should be monitored carefully. '-' RECENT TRENDS FOR "NOTICES OF DEFAULT" FOR MORTGAGES 300,000 250,000 19.6% '" 15.6% A ... 200,000 -' :> 0( IL 162,597 w 0 IL 150,000 0 II: w lD :E :> z 100,000 50,000 29,806 0 California Southern California III Prior Peak: 1996 1!!12004 ra 2005 43.1% .. 50% 40% 30% ~ o 20% "'! ~ .. 10% ~ f'1 0% :5 ~ .... l!l IL o o ~ 13,883 4,492 6,428 Riverside County 4 Change: 2005 vs,2004 Source: Dataq , ~.? 'NO. fj; ,N:tf.P>') ~ OF3 7, Empire Economics 28 February] 6, 2006 ./""' COMPETITIVE MARKET ANALYSIS OF THE PRODUCTSIPROJECT IN THE CFD NO. 2005-6 COMPETITIVE HOUSING MARKET AREA The purpose of this section is to provide an overview of the currently active comparable residential projects in the CFD No. 2005-6 Competitive Housing Market Area, and then to compare these to the expected characteristics of the residential products/project in CFD No. 2005-6. The CFD No. 2005-6 Housing Competitive Market Area for the attached residential projects encompasses the southwestern portion of Riverside County, including the cities of Lake Elsinore, Murrieta and Temecula. COMPETITIVE HOUSING AREA FOR CFD NO. 2005-6 SOUTHWESTERN RIVERSIDE COUNTY /""' The CFD No. 2005-6 Competitive Housing Market Area has a total of 8 projects, seven comparable and one in the CFD, with 1,269 housing units of which 548 have had their escrows closed and so they are considered to be occupied; the distribution of these projects among the various project areas are as follows: ~ CFD No. 2005-6: 1 project with 144 homes; none have closed escrow thus far. ~ Lake Elsinore: 1 project with 141 homes of which 29 are occupied. ~ Murrieta: 5 projects with 822 homes of which 519 are occupied. ~ Temecula: I project with 162 homes of which none are occupied. ,,- AGENDA ITEM NO. .3.:l. . PAOE1&t:-OF p?. ~-- Empire Economics 29 February 16, 2006 CFD NO. 2005-6 COMPETITIVE HOUSING MARKET AREA: CHARACTERISTICS OF ACTIVE PROJECTS DEVELOPMENT STATUS 600 500 400 300 200 100 CI Escrows Closed El Future Units CFD No.2005-6 o 144 519 303 Lake Elsinore Mwrieta Temecula o 162 29 112 "'-'" . The prices of homes in these project areas amounts to some $311,582, on the average, and the prices for the various project areas, from highest to lowest are as follows: Temecula: $351,900, significantly higher than the overall average, and then Murrieta: $306,418, CFD No. 2005-6: $305,567 and Lake Elsinore: $303,100, all slightly below the overall average. The living area of homes in these project areas amounts to some 1,423 sq.ft., on the average; however, there is some amount of variation among them. The square footages of living area for the active projects, from largest to smallest, on the average, are as follows: Temecula: 1,807 sq.ft., again "'-'" significantly above the overall average, and then Murrieta: 1,378 sq.ft., CFD No. 2005-6: 1,351 sq.ft. and Lake Elsinore: 1,332 sq.ft., again all slightly below the overall average. CFD NO. 2005-6 COMPETITIVE HOUSING MARKET AREA HOUSING PRICES AND LIVING AREAS $400,000 S350,OOO '" S3oo,ooo i !:: ~ C S250,ooo !i '" ., 0 S200,ooo = ~ 0 '" SI50,ooO Ool U ;2 .. SIOO,ooo S50,OOO $0 Lake Elsinore I CFD No.200S-6 Murrieta Temecula Totals/Averages lEI LEFT: Price S305,567 S303,100 I S306,418 $351,900 $311,582 I. RIGHT: Livin. Area 1,351 1,332 I 1,378 1,807 1,423 Empire Economics 30 2,000 1,800 1,600 '" Ool r: 1,400 ~ 1,200 ~ 0 1,000 ~ 800 ~ o-l 600 ~ 0 400 ~ '" 200 0 "'0' 3~ AGENDA ITEM N ._----~._.<..<= PPlJEP;) Ofo!.~ 1,. ~1? February] 6, 2006 To compare the prices of the homes in these project areas, their value ratios are utilized, the price per "..... sq. ft. of living area, since this effectively makes adjustments for differences in their sizes of living areas. Accordingly, the value ratios for the projects amount to $222 per sq. ft. of living area and their Special Taxes/Assessments amount to some $1,657/yr. (0.53% as a ratio to the housing prices); accordingly, the value ratios and Special Tax/Assessment characteristics for each of the project areas are as follows: ~ CFD No. 2005-6 project has a value ratio of $226, slightly above the overall average, and its Special Taxes/Assessments amount to $1,742/yr. (0.65%), somewhat above the overall average. ~ The comparable City of Lake Elsinore project has a value ratio of $228, slightly above the overall average, and has Special Taxes/Assessments which amount to $606/yr. (0.20%), the lowest of all the projects. ~ The Murrieta projects have a value ratio of $225, similar to the overall average, and they have Special Taxes/Assessments which amount to $1,688/yr. (0.55%), similar to the overall average. ~ The Temecula project has a value ratio of $195, the lowest of the project categories, and it has Special Taxes/Assessments which amount to $2,463/yr. (0.70%), the highest of all the categories. ,;-" CFD NO. 2005-6 COMPETITIVE HOUSING MARKET AREA VALUE RATIOS AND SPECIAL TAXES 50 ..: s: ~ $200 ~ . ~ ~ ::l ~ $150 ~ m ll. ~ S I)&'X 1M2 ~ $100 ~ ...l ~ $50 $0 CFD No.2oo5-6 Lake Elsinore Munieta T emecula T otals/ Averages l!LEFT: Value Ratio $226 $228 $225 $195 $222 . RIGHT: Special Assmt/fax $1.742 $606 $1,688 $2,463 $1,657 - $2 $3,000 >- ...l $2,500 ~ p :z: ~ , $2,000 '" ... :z: ~ '" $1,500 '" ~ '" ~ - '" $1,000 ~ ... $500 ~ ~ ll. '" $0 ~ 3;;.. AGENDA ITEM NO. ~~ ~ PACE.t~f( ~OF ...... Empire Economics 31 February 16,2006 ------ ------ The projects in the Competitive Market Area have experienced a sales rates/escrow closings at a rate of some 518 homes per year, for an average of some 74 units per project per year; the distribution of these sales among the various project areas is as follows: ~ )> The City of Lake Elsinore projects has an overall as well as an average sales rate of 50 homes annually, somewhat below the overall average. )> The five active projects in Murrieta have an overall sales rate of 428 homes annually, some 86 per project, on the average, significantly above the overall average. )> The active project in the City of Temecula has an overall as well as an average sales rate of 40 homes annually, significantly below the overall average. CFD NO. 2005-6 COMPETITIVE HOUSING MARKET AREA SALES RATES 700 600 ;.- 500 ...l ...l ;:;l <( z Z 400 <( . '" Iol ~ '" 300 ...l <( ... 0 ... 200 100 0 86 . 50 . 40 428 . 50 40 130 80 ;.- ::3 <( ;:;l ~ 30 <( ~ "'-'" ~ "" ~ Iol "" '" Iol ~ '" For additional information on the currently active projects in the CFD No. 2005-6 Competitive Housing Market Area, please refer to the following table and map. Lake Elsinore Murrieta Temecula ACENDA ITEM NO. PAGE 't-'2fJ 3.:< . OF,,~1,~ Empire Economics 32 February 16,2006 . _.~.,_'~.'''''''''"''.'~~'Il /""" ~ z 0 .... ~ u 0 ..J ~ U .... == =- ~ 0 [;oJ ~ ;.- = < ~ < E-< ~ < ~ ~ z .... ~ -- 0 == [;oJ > .... E-< .... E-< [;oJ =- ~ "...... 0 U '-l == E-< Z .... ~ E-< U e; 0 c.:: =- ~ .... E-< U < .. [;oJ ..J = ~ ~ ~ 0 u .. '-l == E-< ~ 0 ~ u .... E-< ~ ;: [;oJ E-< U ~ /""" < == u ~ Cl ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ "#- ~ ~ ~ ~ " ~ .... 0 0 0 g on 0 0 .... ~ 0 ~ . on '" on '" on '" .... on .... ..: ... 0 0 0 0 0 0 0 0 0 0 0 0 0 i ... ~ '" '" ~ '" ~ .... 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PAGf.J!!.L-oF33?~ ESTIMATED ABSORPTION SCHEDULES FOR THE PRODUCTSIPROJECT IN CFD NO. 2005-6 (VISTA DEL LAGO) ,~ The purpose of this section is to estimate the absorption schedules for the residential products/project in CFD No. 2005-6; accordingly, this is based upon a consideration of the following: First, the potential demand schedules for the residential products/project for CFD No. 2005-6 were derived, based upon a consideration of the following: ~ The growth prospects for the Southern California Market Region, In general, and Riverside County, in particular. ~ How much of this growth the CFD No. 2005-6 Market Area is expected to capture, in particular. ~ The proportion of the Market Area demand that is expected to be captured by the products/project in CFD !'Jo. 2005-6, based upon an evaluation of their competitiveness in the marketplace. Then, the absorption rate for the residential products/project in the various market segments are calculated, from the year in which the products/project are expected to enter the marketplace, and continuing thereafter on an annualized basis, until all of the units are occupied/utilized. The absorption represents the completed construction of the structure as well as being occupied by a final-user. I""'"' CFD No. 2005-6 is expected to have 144 attached townhome housing units that are being constructed/marketed by D.R. Horton, and these townhomes are currently priced at $271,900 to $338,900 for some 1,141 to 1,527 sq.ft. ofliving area; accordingly, their characteristics are as follows: ~ Plan # I has 48 units that are currently priced at some $271,990 for 1,141 sq.ft. of living area, for a value ratio (price/living area) of some $238 per sq.ft. ~ Plan # 2 also has 48 units that are currently priced at some $305,900 for 1,386 sq.ft. of living area, for a value ratio of some $221 per sq.ft. ~ Plan # 3 has 48 units that are currently priced at some $338,900 for 1,527 sq.ft. of living area, for a value ratio of some $222 per sq.ft. The townhomes in CFD No. 2005-6 Vista del Lago are expected to commence escrow closings during Spring 2006, and be absorbed at a rate of 78 townhomes in 2006 and then the remaining 66 townhomes in 2007. ,....... Empire Economics 35 ,AGENDA ITEM NO. J ~ PAGE..2!:11:::-0F. ~~~-' February 16, 2006 The expected absorption schedule for the residential products/project in CFD No. 2005-6 can also be expressed as a capture rate of the expected market demand for the CFD No. 2005-6 Market Area, the southwestern portion of Riverside County. Specifically, the residential capture rate reflects the percentage of the MA's demand that is fulfilled by the absorption of the homes in CFD No. 2005-6. For the 2006-2007 time period, as a whole, the capture rate amounts to some 2.2%, on the average. In 2006, as the project enters the marketplace, the capture rate of the MA's demand is some 2.4%. Then, during 2007, as the project is closed-out, the capture rate declines to 2.0%. '--'" Closinl! Comments The estimated absorption schedule for the residential products/project in the CFD No. 2005-6 is subject to change due to potential shifts in economic/real estate market conditions and/or the development strategy by the developer/builder, D.R. Horton. Furthermore, the currently active comparable projects in the CFD No. 2005-6 Competitive Housing MA, excluding the project in CFD No. 2005- 6, have a total of 1,125 attached homes of which 548, some 49%, have closed escrows thus far. Consequently, in the event of a market slowdown, there could be a substantial supply of homes that have not closed escrows, and these could adversely impact the prices and absorption rates. '--'" Empire Economics 36 NO 2>~ !\GENDA rreM . .. .... .. H{,. PAGE..zt!3_JJf 3 ~ '<fA February] 6, 2006 ,-... - 0 <9 ::s ....J w 0 <t: I- en > - en w ~ 0 enI WZ c ....J~ 0 ::)0 "en 01- "> W Q) Ill:: ll:: UW 0 enl- ...... ZZ t5 OW Q) _U E "....... 1->- :J 0.1- en ll::- O~ <0 0 en <0 0 en I N <t: It) <0 0 0 0 ...... W N ~ I- . <t:0 CO :J ~Z .... ..c 1-0 Q) enu.. u.. WU W ll:: 0 Z en ....J W W ~ ::s u.. 0 >- I- U ~. :; co ~ .... ~ E ::> () .... ~ ~ <0 ~ <0 ~ 0 ll'l ll'l N co <0 10 '<t 0 '<t 0 &6 "'. 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M <l) Cl ~ ~ go NOI.LdllOS8V aiD ONV ONVW30 V311V .1'ID1l1VW U :::E u II 129 ... \0 o o N ...0 ~ 2 .0 <l) ~ 01 M '" u 's o s:: o u r.::l Cl) .... .~ r.::l o o o t- 'GENOA ITEM NO. :3>?- PAGE...1'1V OF ~~-- ASSUMPTIONS AND LIMITING CONDITIONS The Market Absorption Study for CFD No. 2005-6 is based upon varIOUS assumptions and limiting conditions; accordingly, these are as follows: "'" Title to Property Property Boundaries Accuracy of Information from Others Date of Study Hidden or Unapparent Conditions Opinions of a Legal/Specialized Nature Right of Publication of Report Soil and Geological Studies Earthquakes and Seismic Hazards Testimony or Court Attendance Maps and Exhibits Environmental and Other Regulations Required Permits and Other Governmental Authority Liability of Market Analyst Presence and Impact of Hazardous Material Structural Deficiencies of Improvements Presence of Asbestos Acreage of Property Designated Economic Scenario Provision of the Infrastructure; Role of Coordinator Developer/Builders Responsiveness to Market Conditions Financial Strength of the Project Developer/Builder Market Absorption Study Timeliness of Results ...., For additional information on the various assumptions and limiting conditions, please refer to the comprehensive Market Absorption Study. AGENDA ITEM NO. :s d .~ . p~oF.~3(P- Empire Economics 40 February 16, 2006 r" APPENDIX C APPRAISAL REPORT ~ ~ C-l 3~ ~,GENOA \1. EM NO.~ l?J.)~tE2"1 ~ - Of~_ . . .. APPRAISAL REPOR..... CI"I"Y OF LAKE ELSINORE COMMUNITY FACIUTIES D/STRICT'NO. 2005-6 CITY CENTER TOWNHOMES Prepared CITY OF LAKE ELSINORE 130 S. Main Street Lake Elsinore, CA 92530 James B. Harris, MAl Berri J. Cannon Harris Harris Realty Appraisal 5100 Birch Street, Suite 200 Newport Beach, CA 92660 February 2006 -.,.,I ~ ....., !\CENOA ITEM NO. 32 PAOE,,~Y q_OF! '{3~ ~ ."......... February 17, 2006 Mr. Matt N. Pressey Director of Administrative Services CITY OF LAKE ELSINORE 130 S. Main Street Lake Elsinore, CA 92530 Re: CFD No. 2005-6 City Center Townhomes Dear Mr. Pressey: "......... In response to your authorization, we have prepared a self-contained appraisal report that addresses all of the taxable property within the boundaries of Community Facilities District No. 2005-6 (CFD No. 2005-6). This appraisal includes an estimate of Market Value of the land and site improvements subject to special tax. This land is under the ownership of one developer/merchant builder, .Western Pacific Housing, Inc., a D.R. Horton Company. The land ranges from blue-top to near-finished condition with dwelling improvements underconstruction. According to the specific guidelines ofthe California Debt and Investment Advisory Commission (CD lAC), an ownership/is valued in bulk, representing a discounted value to that ownership as of the date of value. Based on the investigation and analyses undertaken, our experience as real estate appraisers and subject to all the premises, assumptions and limiting conditions set forth in this report, the following opinion of Market Value is formed as of February 15, 2006. SEVENTEEN MILLION EIGHT HUNDRED THOUSAND DOLLARS $17,800,000 ,....... 3::? AOEN~~1$~oF_3~t= Mr. Matt N. Pressey February 17, 2006 Page Two ......, The self-contained report that follows sets forth the results of the data and analyses upon which our opinion of value is, in part, predicated. This report has been prepared for the City of Lake Elsinore for use in the issuance of Community Facilities District No. 2005- 6 bonds. The intended users of this report are the City of Lake Elsinore, its Underwriter, Legal Counsel, Consultants, and potential bond investors. This appraisal has been prepared in accordance with and is subject to the requireme .of the Appraisal Standards for land secured financing as published by the Califo.r.r'liaCll'1d(lnvestment Advisory Commission; the Uniform Standards of Professional'~fJpraisarPr;aqtice (USPAP) of the Appraisal Foundation; and the Code of Professiorr~1. Ethics alid.the Standards of Professional Appraisal Practice of the Appraisal Institute. We meet the requirements of the Competency Provision/of the UniforrtrStandards of Professional Appraisal Practice. A qualiffcCltions appears in the Addenda. Respectfully submitted, Berri J. Cannon Harris Vice President AG009147 ....., James B. Harris, MAl President AG001846 3d '-' 1'<.....,I"I'.:NO"'. rraJ\ NO._ ~. ",,~JlG ... I"X:" Of / pfJij.f,~ SUMMARY OF FACTS AND CONCLUSIONS EFFECTIVE DATE OF APPRAISAL February 15, 2006 DATE OF REPORT February 17, 2006 INTEREST APPRAISED Fee Simple Estate, subject to special tax liens LEGAL DESCRIPTION Tract Map No. 31531 Tract Map No. 315.32 OWNERSHIP Western Pacific Housing, Inc. SITE CONDITION Land in blue~top to near-finished condition. HIGHEST AND BEST USE Development of one 144-unit townhome . condominium project with floor plans ranging from 1,141 square feet to 1,527 square feet. VALUATION CONCLUSION $17,800,OOOiMARKET VAI..UE iii ~ ~ """'" ~:). AGENDA'TEMNO. OF 3J "- PPlJE1C:;?/ ~rp..- /""" TABLE OF CONTENTS Section Page Transmittal Letter.......... ..................................................... ................................................. Summary of Facts and Conclusions. ........................................................ .............. ............. iii Aerial................................... ................ ................................................................................... iv Table of Contents............................................................. ........ ............ ............................. .... v Introduction..................... ,............................................ ...... ............ ............................... 1 Area Description...... ..................................................................................... .... .................... 12 Site Analysis.......................................................... ....................................................... ...... 31 Improvement Description................................................. .............. .........,........................... 40 Highest and Best Use..... ........... ................... .... .. ... . ... . . . . . . . . . . .... . . .. . .. .... . . .... 43 /""" Valuation Methodology........................ ................ ............ 52 Valuation of CFD No. 2005..6 . ................ ............. ..... ................................................... ...... 54 Valuation Conclusion.......................................................................................................... 67 Certification..:........ .......................... .... ................... .............................................................. 68 Addenda Qualifications Empire Economics Market Study (Portion) Site Construction Costs ,........ iv ACENDA fTEM NO. ~,). PACE.99l- OF .~ ?,?= INTRODUCTION ~ Purpose of the Report The purpose of this appraisal is to estimate the Market Value for the fee simple estate, subject to special tax liens for all the taxable property within Community Facilities District No. 2005-6, located in the City of Lake Elsinore. The purpose of this appraisal is to estimate the "As Is" Market Value of the land and any improvements under the ownership of the developer/merchant builder. The opinions set forth are subject to the assumptionsandnmiting conditions set forth in this appraisal, and the appraisal guidelines as set forth by the City of Lake Elsinore. Function of the Report and Intended Use It is our understanding that this appraisal report.is to be used for Community Facilities District bond financing purposes only. The. subject property are described more particularly within this report. The bonds are to be issued pursuant to the Mello-Roos Community Facilities District Actof1982, as amended. The maximum authorized bond '-' indebtedness for the CFD is $5,000,000. Client and. Intended Users of the Report This report was prepared for our client, the City of Lake Elsinore. The intended users of the report include the City, it's Legal Counsel, Underwriter, Consultants, and potential bond purchasers. Scope of the Assianment According to the CDIAC guidelines, the total value conclusion includes the "As Is" estimate of Market Value for the property under the ownership of the developer/merchant builder within the boundaries of CFD No. 2005-6. This is a fully documented self-contained appraisal report. Any lands designated for park, open space or civic uses within these tracts not subject to special tax are not included in this assignment. 1 ",." I'I.,Ci'=NOA rn:\\I\ NQ._, 3'i.~ ~' ,- ~ P1f -- rf~1d ~y , , ,,~-- '::::'--...~. ~ ,,-. The residential land is valued in its "As Is" condition as of the date of value. Site development for the subject property ranges from blue-top to near-finished condition. We have analyzed the subject property based upon the proposed use and our opinion of its highest and best use. We have searched for sales of residential land to estimate the value of the property. The following paragraphs summarize the process of collecting, confirming and reporting of data used in the analysis. 1. Gathered and analyzed demographic datafromsources!l"Ic;luding the California Department of Finance (population data),E yment Development Department of the State of . California (em ll1ent data), City. of Lake Elsinore (zoning. informati()n, < building permit trends), Lake Elsinore Chamber of Commerce (Ioe~l demographic trends), Hanley Wood Market Jntelligence(housingsales, inventory levels, and absorption), and sales personnel of comparable projects (market trends of individual hgrne s~les). SUbject information was gathered from the developer/builderand their consUltants. ,,-. 2. Inspected the subject's m~ighborhoodandreviewed proposed product and similar products for consideration of Highest and Best Use of the proposed lots. 3. Gathered and analyzed comparable merchant builder land sales within the Lake Elsinore market areas, and residential detached unit sales, within the subject's primary and secondary market areas. Data was gathered from sources including, Comps.com, brokers, appraisers, builders active in the area and developers within the Southern California. area. Where feasible, data were confirmed with both the buyer and seller. The data gathered are presented on summary data sheets within this report. Date of Value and Report The opinion of Market Value expressed in this report is stated as of February 15, 2006. The date of the appraisal report is February 17, 2006. ,,- 2 ACENDA ITEM NO.3::> PAGE.tq, OF .3J~..... Date of Inspection The subject property was inspected on several occasions, with the most recent on February 15, 2006. ,......, Property Rights Appraised The property rights appraised are those of the fee simple estate subject to special tax liens of the real estate described herein. Property Identification The subject property consists of land under~iteconstructiort.in the City of Lake Elsinore. According to the City's Special Tax Consultcult,iCFD No. 2Q05-6 is identified as APN's 363-530-020,363-240-002,003,009,016,023 and 027. The SUbject property is further identified as Tract Map Nos. 31531 cmd3~532. Thesupject property is a part of the City Center Specific Plan. The SpecificfPlan irlitSentirety consists of 42.:t gross acres. CFD No.' 2005-6 contains 13.3 netacresptOposedfor 144 dwelling units. The District is currently proposed for one condominium project. ,......, Legal Description and Ownership The table below identifies.lot and tract.,and ownership for the subject property. ,......, 3 AGENDA ITEM NO.3:;) PAGE,,'l'57 OF ~"2.L;,~ ,-.. ,-.. ,...... I CFD No. 2005-6 4 AGENDA ITEM NO. Q'? ~A(;EJ::8 OF ~ 1...~"~ Property History ~ Western Pacific Housing, Inc. purchased the entire District, TM No. 31531 and TM No. 31532 on July 29, 2004 (Document Nos. 589676 & 589679) for $5,472,000. Western Pacific Housing, Inc. purchased the raw land from Oak Grove Equities, et al. Oak Grove Equities, et ai, had owned the property for in excess of three years. Definitions Market Value 1 The most probable price in terms of money which a property should bring in a competitive and open market under all conditions requisite to . a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. Implicitin this definiti(mi~the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: (a) Buyer and seller are typically motivated. (b) Both parties are well informed or welL advised, and each acting in what he considers his own best interest. A reasonable time is allowed for exposure in the open market. Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto. The price represents. the normat.consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale. Fee Simple Estate2 Absolute ownership unencumbered by any other interest or estate subject only to the four powers of government. (c) (d) ~ (e) Fee Simple Estate Subject to Special Tax and Special Assessment Liens Empirical evidence (and common sense) suggests that the selling prices of properties encumbered by such liens are discounted compared to properties free and clear of such liens. In new development projects, annual 1 Part 563, subsection 563.17-1 a(b )(2), Subchapter D, Chapter V, Title 12, Code of Federal Regulations. 2 The Dictionary of Real Estate Appraisal, Third Edition, published by The Appraisal Institute, 1993, Page 140 ~ 5 ~CENOA ITEM NO. 3 -;t ,: . PltaJ:'1J OF ~ ~ special tax and/or special assessment payments can be substantial, and prospective buyers take this added tax burden into account when formulating their bid prices. Taxes, including special taxes, are legally distinct from assessments. The Market Value included herein, reflects the value potential buyers would consider given the special tax lien of Community Facilities District No. 2005- 6. Retail Value Retail value should be estimated for all fully improved and sold properties. Retail value is an estimate of what an end u~erwouldpay for a finished property under the conditions requisite to a fairsaJe. Blue-Top Graded Parcel Blue-top graded parcel includes streets cut and padded lots to blue-top with utilities stubbed to the parcel and perimeter in. ~ Finished Site3 Land that is improved so that it is ref3ciY to be used for a specific purpose. (Improvements include padded lot, streets and utilities to the lot, and all fees required to issue a building permit paid.) Mass-Graded Parcels Mass-graded parcel with utilities stubbed to the site and perimeter streets in. Assumptions and Limitina Conditions The analyses and opinions set forth in this report are subject to the following assumptions and limiting conditions: Standards Rule ("S.R.'~) 2-1 (c) of the "Standards of Professional Appraisal Practice" of the Appraisal Institute requires the appraisers to "clearly and accurately disclose any extraordinary assumption or limiting condition that directly affects an appraisal analysis, opinion, or conclusion." In compliance with S.R. 2-1(c) and to assist the reader in interpreting the report, the following contingencies, assumptions and limiting conditions are set forth as follows: ,.,-.. 6 .3~ '\GENOA 'TEM NO. t - PACE1(,.tLOF..3~ LJ~_ Contingencies of the Appraisal The appraisal is contingent upon the successful issuance and funding of bonds for Community Facilities District No. 2005-6 through the City of Lake Elsinore. The special tax formula was prepared on behalf of the City of Lake Elsinore by Harris & Associates, Special Tax Consultant. ....., The Market Value estimate reported in this report reflects a portion of the funding for the infrastructure improvements and fees from the proceeds of Community Facilities District No. 2005-6. The public improvements and fees subject to reimbursement include street improvements, water & sewer facilities and fees and City development impact fees. .The total construction funds and fees with contingency subject to P9ssibleJ~imbursement are $3,092,800. If the CFD is not funded and/ortpeamountor timing of the reimbursements should change, the value opinion stated herein could change. Please refer to the Valuation section for further detail of the reimbursements and timeline for reimbursement. The appraisers have been provided with overall site costs and costs to complete to finished site condition fromWest~rn Pacific Housing, Inc. It is assumed that all conditions for siteidevelopment as indicated in the Conditions of Approval are included ill the infrastruqture costs.. A specific assumption of this appraisal report is that theaosts are accurate. The individual parcel sizes have been calculated by.Stephen H. Hackett, Inc. Our value estimate is, in part, based on the accuracy of this information. ~ Assumpti9rtSandL;i~iting Conditions No responsibility is assumed by your appraisers for matters that are legal in nature. No opinion of title> is rendered, and the property is appraised as though free of all encumbrances and the title marketable. No survey of the boundaries of the property was undertaken by your appraisers. All areas and dimensions furnished to your appraisers are presumed to be correct. The date of value for which the opinions of Market Value are expressed in this report is Februaryt5, 2006. The dollar amount of this value opinion is based on the purchasing power of the United States dollar on that date. Maps, plats, and exhibits included herein are for illustration only, as an aid for the reader in visualizing matters discussed within the report. They should not be considered as surveys or relied upon for any other purpose, nor should they be removed from, reproduced, or used apart from this report. 3 Ibid, Page 334 ....., 7 8;}- 'If';ENOA n'EM MO. """ PAOE~OF3~~di~. /"""' Oil, gas, mineral rights and subsurface rights were not considered in making this appraisal unless otherwise stated and are not a part of the appraisal, if any exist. A Preliminary Geotechnical report was provided for the appraiser's review. According to the report, development as proposed is feasible assuming certain recommendations are followed as outlined in the report. As of the date of value, the subject, proposed for 144 dwelling units has been graded to a blue-top to near-finished site condition. Surrounding land has been improved with a large retail shopping center. For purposes of this appraisal, the soil is assumed to be of adequate loa~-bearing capacity to support all uses considered under our conclusionPf Hig~~stand Best Use. The appraisers have been provided with onepreJiminary>titlereport for TM No. 31531. For purposes of this appraisal,W'e~re not aware of any easements, encroachments or restrictions that W'c>l.IldadverselyImpactthe value of the subject properties. No notice of speciillftax lien fofCFDNo. 2005-6 was reported. Information contained in this report has been g~thered frorTlsources which are believed to be reliable, and, where feasible,lias been verified. No responsibility is assumed for the accuracy ofinformatioJ'Is4Pplied by others. ,-.. Since earthquakes are common in the area, no responsibility is assumed for their possible impact on ... individual properties,uhless detailed geologic reports are made available. The appraisers have inspected as far as possible by observation, the land; however, it was impossible to personally inspect conditions beneath the soil. Therefore, no representations are made as to these matters unless specifically considered in the report. The appraisers assume no responsibility for economic or physical factors that may occur after the date of this appraisal. The appraisers, in rendering these opinions, assume no responsibility for subsequent changes in management, tax laws, environmental regulations, economic, or physical factors that mayor may not affect said conclusions or opinions. No engineering survey, legal, or engineering analysis has been made by us of this property. It is assumed that the legal description and area computations furnished are reasonably accurate. However, it is recommended that an analysis be made for exact verification through appropriate professionals before demising, hypothecating, purchasing or lending occurs. ~, 8 ~I:::NDA\TEMNO.- ~~ PAGE.1lA/_OF ~ .. Unless otherwise stated in this report, the existence of hazardous substances, including without limitation asbestos, polychlorinated biphenyls, petroleum leakage, or agricultural chemicals, which mayor may not be present on the property, or other environmental conditions, were not called to the attention of nor did the appraisers become aware of such during the appraisers' inspection. The appraisers have no knowledge of the existence of such materials on or in the property unless otherwise stated. The appraisers, however, are not qualified to test for such substances or conditions. "'" The presence of such substances such as asbesto urea formaldehyde, foam insulation, or other hazardous substances or en ntal conditions may affect the value of the property. ThErvalue ated herein is predicated on the assumption that there is nQ(~uch~oi'1 .>on or in the property or in such proximity thereto that it woUIQcal..lse a loss in value. No responsibility is assumed for any such condition~j.or for any~xpertise. .or engineering knowledge required to discover them.IFh~client isorgedto retain an expert in the field of environmental impacts up()n..real estate if so desired. The cost and availability of financing/help det~l'mi~~>the demand for and supply of real estate and therefqre affect real~EtStateiNliailt.J~lS and prices. The transaction price of one prop~~imay differfl'"om thatOfan identical property because financing arrangements vary. The distribution,if.aJ'!Y, of theiitC.)tal valuation in this report between land and improvementsappliesC.)J'!ly under i the stated program of utilization. The separate . allocations fOl"iiland and improvements must not be used in conjunction with any other-appraisal and are invalid if so used. "'-' The forecasts of future events that influence the valuation process are predicated on the continuation of historic and current trends in the market. The property appraised is assumed to be in full compliance with all applicable federal,state, . and local environmental regulations and laws, and the property is in conformance with all applicable zoning and use ordinances/restrictions, unless otherwise stated. The Americans with Disabilities Act ("ADA'? became effective January 26, 1992. We have not made a specific compliance survey and analysis of this property to determine whether or not it is in conformity with the various detailed requirements of the ADA. It is possible that a compliance survey of the property, together with a detailed analysis of the requirements of the ADA, could reveal that the property is not in compliance with one or more of the requirements of the Act. If so, this fact could have a negative effect on the value of the property. Since we have no direct evidence relating to this "'-' 9 ~NDA '.TEMNO. 3d- Z;;; PAftEJjo3 OF ~ ~ ,,-.. issue, we did not consider possible non-compliance with the requirements of the ADA in estimating the value of the property. We shall not be required, by reason of this appraisal, to give testimony or to be in attendance in court or any governmental or other hearing with reference to the property without prior arrangements having first been made with the appraisers relative to such additional employment. In the event the appraisers are subpoenaed for a deposition, judicial, or administrative proceeding, and are ordered to produce their appraisal report and files, the appraisers will immediately notify the client. The appraisers will appear at the deposition,judicial,.. or administrative hearing with their appraisal report and files and will ansV\ler.all questions unless the client provides the appraisers with legal counsel who then instructs them not to appear, instructs them not to produce certain documents, or instructs them not to answefcertain questions. These instructions will be overridden by a court order which the appraisers will follow if legally required to do so. It shall bethe responsibilitY.of the client to obtain a protective order. /"'" The appraisers have personally inspected thesubjectprQperty; however, no opinion as to structural soundness of existing.. improvements or conformitY to any applicable building cm:fe is made. The appraisers assume no responsibilitY for undisclosed structural deficiencies/conditions. No consideration has been given in this appraisal to personal property located on the premises;onlyithe real estate has been considered unless otherwise specified. James B. Harris is a Member, and Berri J. Cannon Harris is an Associate Member, of the Appraisal Institute. The Bylaws and Regulations of the Institute require each Member and Associates to control the uses and distribution of each apprai~arreport signed by such Member or Associates. Except as hereinafter provided, possession of this report, or a copy of it, does not carry with itthe right of publication. It may not be used for any purpose by any person other than the party to whom it is addressed without the written consent of the appraisers and in any event only with properly written qualification and only in its entiretY. The City of lake Elsinore, its Underwriter and Legal Counsel may publish this report in the Official Statement for this Community Facilities District. Neither all nor any part of the contents of this report (especially any conclusions as to value, the identitY of the appraisers or the firm with which they are connected, or any reference to the Appraisal Institute or the MAl designation) shall be disseminated to the public through advertising media, ,,-.... 10 3:;1 . tjENDA lTEM NO. t:J- PACEJJa1-0F.3"7, ~. public relations, news media or any other public means of communication without the prior consent and approval of the undersigned. ~ The acceptance of and/or use of this appraisal report by the client or any third party constitutes acceptance of the following conditions: The liability of Harris Realty Appraisal and the appraisers responsible for this report is limited to the client only and to the fee actually received by the appraisers. Further, there is no accountability, obligation or liability to any third party. If the appraisal report is placed i. the hands of anyone other than the client for wh t rt was prepared, the client shall make such arties aware of all limiting conditions and/assump . iof this assignment and related discussions. Any party w es or relies upon any information in thisr~pl.)~, witho preparer's written consent, does so afhis owbirisk. If the client or any third party brings legal action a ainst Harris Realty Appraisal or the signer of this re and the appraisers prevail, the party initi such legal action shall reimburse Harris Realty A al and/or the appraisers for and all costs y nature, including attorneys's, incurred in their defense. ~ ,....." 11 'iENDA 'TEM NO.~ .3 ~~ PA,GE~~Of 3-:?'~ ~ AREA DESCRIPTION The following section of this report will summarize the major demographic and economic characteristics such as population, employment, income and other pertinent characteristics for the Southern California region, Riverside County, City of Lake Elsinore and the subject market areas. Southern California Reaional Overview The Southern California region, as defined in thisreport,enconipasses six individual counties including Los Angeles, Orange, Riverside, San Bernardino, San Diego, and Ventura Counties. The Southern California region extends from theiCalifornia-Mexico border on the south to the Tehachapi mountain range on the north and from. the Pacific Ocean on the west to the California-Arizona border on the east. The region covers an estimated 38,242 square miles and embodies a diverse spectrum of Climates, topography, and level of urban development. Please refetlo the following. page for a location map. . ~ Population The Southern. California region has added about 7.6 million new residents since 1980 as indicated in the table shown on pa.g~.14. According to the California Department of Finance, thernost recent data available indi~te that as of January 2005, the regional population stqOQ at over 20.9 million.Jf the region were an individual state, it would rank as one of the mostpopulous in the nation. Since 1981, annuaL population gains from natural increase and immigratio'1 have ranged from a low of 131,400 persons in 2002 up to 568,645 persons in 1989. These figures represent annual gains of 0.7% to 3.5%. During the past five years, the population of the six-county Southern California region grew by 0.7% to 1.8% per annum. /""'" 12 . OENOA ITEM NO. ~ ..;;..?O: PAGE2/dI!. OF_ ;""" As of January 2005 the population of the six-county area stood at 20,970,900 persons. Looking toward the future it is estimated that the region's population will continue to climb as new residents seek out the southern California area. During the economic downturn from 1992 through 1996, and continuing through 2005, the population growth rate declined compared to the growth experienced in the late 1980s. Population Trends 1980-2005 ,-.. 1 April 1, 1980, 1990, and 2000, all other years January 1 Source: California Department of Finance. 5/05 The future rate of growth will depend on a number of factors that may dramatically affect the region. Some of the major factors include availability of developable land, availability of water, national economic climate, and public policy toward growth and the assimilation of a large number of new foreign immigrants. The continued growth of the ,..--. 14 ''''''''''0 ,- ....." .:; .). . ""F?\\DA. I ! 1::1'11 I'll""'. . F}NJ!Jjfl Of.~l:L~_ population within the region, even during periods of economic slow down, provides a positive indicator as to the desirability of the Southern California region. """ Employment In conjunction with the population growth, a key indicator of the region's economic vitality is the trend in employment. The most common measure of employment growth is the change in non-agricultural wage and salary employment. The table below illustrates the non-agricultural wage and salary employment trends in Southern California. Southern California Region Employment Trends 1983-20041 '-'" 1 2004 benchmark Source: Employment Development Department 4/05 In the Southern California region, average annual non-agricultural employment has grown from 5,691,000 jobs in 1983, to a peak employment of 8,015,300 in 2001. """ 15 5:::> ACENOAmMAoe,1.c'-: pACE~ ,,-. ,,-. ,,-. Employment declined to 8,003,100 in 2002. This decline was mostly caused by a 40,100 job decrease in Los Angeles County. In 2004, employment climbed to a new record level, 8,145,500. This was in spite of Los Angeles County only adding an additional 10,000~ jobs. This represents an increase of over 350,000 new jobs over the past five years. As the economy entered into an economic recession during the latter part of 1990, employment growth slowed. The average annual gain in 1990 was approximately 119,200 jobs or 1.7%. In 1992 when the full weight of the recession\IVas felt, area employment suffered the highest annual decline in jobs registered in the:l(;lstdecade, losing nearly 204,000 jobs or a percentage decrease of 2.9%. Thiswa~. f()lIoWedbyJurther employment declines of 103,300 jobs in 1993. It appears that by thefrniddle of 199-f" the economic recovery finally began to take hold in the Southern California region. The employment data for 1994 indicated a slight increase of 37 ,300Jobsor 0.6%Jor 1994. The adverse employment issues experienced in the prior three years had abated. The annual average employment for 1995 exhibited a gain of 132,400l'lew jobSOFCi. 2.0% increase, and for 1996 an estimated 119,400 new jobs were added. 11'11997, total non-agricultural employment stood at 7.2 million, finally exceeding]heprior high in 1990. As of year-end 2002, employment was over 8.0 million. Forecasts prior to September 11, 2001, indicate that job growth would continue to be positive in 2001 and increase moderately over the next one to two years. However, with the terrorist attack on the United States and the conflict with Iraq, most economists are saying we were in a flat to slightly declining economy, during 2002 and first half of 2003, but that we began recovery during the second half of 2003. 2003 showed a small increase over the previous high mark in 2001. 2004 had a moderate gain over 2003. Employment among the individual industry categories reflects some fundamental regional changes in the economy during the past decade. The level of mining activity in Southern California continues to steadily decline as reflected in the consistent decrease in mining employment. Construction employment, as of 1989, was at a high level in response to the level of construction activity that had occurred in the region during the past five years. During the period from 1991 through 1994, construction employment declined in 16 o 3;). - AGENOA\TEMNO'- 3~~ PAGE..21IL- OF response to decreased residential and commercial construction activity. From 1994 through 2004, as the economy rebounded, residential construction increased bringing back more than the construction jobs lost during the recession. ......., Total manufacturing employment in the region has exhibited little gain from the levels recorded in 1980. Due to the high labor, land, and capital costs in most of the Southern California region, some manufacturing firms have expanded or relocated their manufacturing operations outside of the area. The Southern California economy, which depended heavily on aerospace and defense related employment, has bee doublablow. First from the reduction of the space program and reduced dafe ~pending which affected manufacturers and suppliers, and second from thec.lo~ure of s Ell military bases which has had a ripple effect throughout the local economy.~rEaEl~ heavily dependent on military spending will be impacted as the units are deployed a~road. The finance, insurance, and real estate ("FI~E") employment category grew rapidly ""'" as the economy recovered from the 1981-1982 lonEiI recession. As the economy entered a new recessionarycycle, the FIRE employment sector exhibited little growth from 1991 through 1995. Some of the rnanufacturingand aerospace jobs permanently displaced from the economy were slowly being replaced with administrative, marketing and research employment. It is reasonable to as.some that similar stagnant growth in this area will be experienced during the current economy. The employment group that has contributed most to the employment growth in the region is the service sector. Since 1980, the majority of all new jobs have been created in the service category. The service sector was the leader in new job growth during the years that followed the economic recovery from the 1990 recession. Government employment tends to mirror the growth of the population that it services. It is expected that government employment will grow at a rate similar to the area population. The future employment growth in the Southern California region is expected to ""'" 17 AGENDA ITEM NO. 3>).. IPAGE~OF -~~~~ ;"'" continue but at a level moderately lower than recent years. Factors that will affect employment growth include the direction of the national economy, wage levels, housing prices, and population trends. Given the national disaster of September 11, 2001, government should not experience layoffs; on the contrary, growth particularly in the defense sector should occur. However, the California deficit has negatively impacted both state and local government employment. Riverside County Riverside County consists of 24 individual cities and< numerous unincorporated communities. Riverside County is typically grouped with adjacent San Bernardino County to form the Riverside-San Bernardino Metropolitan Statistical Area ("MSA"). This area is commonly called the Inland Empire. Riverside County is bounded.by Orange County to the west, San Bernardino to the north, the state of Arizona to the east,and San Diego County to the south. ;"'" The major urbanized areas are located in the western portion of the County. The major incorporated cities include the cities of Riverside, Corona, and Moreno Valley. These areas were the mostactiveareas for new growth during the mid 1980's until the recession took hold during 1990. The area. which encompasses lake Elsinore, Murrieta, Menifee Valley and Temecula has also experienced rapid growth since the mid 1980's. The areas that have experienced the most active growth during the 1980s also suffered the most during the lengthy recession. However, since 1996, residential activity has increased due to downsizing of product with more affordable pricing, and the general improvement in the regional economy. ;"'" Population Riverside County has more than doubled its population, adding approximately 882,488 new residents since 1980 as illustrated in the following table. As of the 2000 Census, the countywide population stood at 1 ,545,387 residents. The 2005 estimate by the State of California indicates that the County had 1 ,877,000 residents on January 1, 2005. Annual population gains, from natural increase and immigration, have ranged from 18,500 18 AOENDA ITEM NO. 2> ;l PAGE~Z,'1J- OF .~1.,.~~ persons in 1997 up to 100,300 persons in 2005. From 1991 to 1997, the rate of growth in population declined moderately each year. Recent gains of 34,900 to 100,300 persons represent annual changes of 2.2% to 5.6%. ......, The future rate of growth within the County will depend on a number of factors. Some of the major factors include availability of developable land, availability of water, national and regional economic climate and public policy toward growth. The areas within the County that will continue he largest share of the new population growth will be the Corona-Riversideareaiand theiiarea between Lake Elsinore, Sun City and Temecula, which includes the MenifeeValley. Riverside County Population Trends 1980..2005 ......, April 1, 1980, 1990, 2000; all other years January 1. Source: California Department of Finance, U.S. Census 5/05 ......, 19 AGENDA ITEM NO. ~;;>.. . PACE",<t-PJ OF61<~-r lo. "....... Employment Employment data for Riverside County are compiled for the entire MSA, which includes San Bernardino and Riverside Counties. These counties have become a diverse economy, with manufacturing, construction and tourism the major industry groups. In conjunction with the rapid population growth experienced in the past two decades, the employment base has continued to grow and diversify. The Inland Empire's unemployment rate is moderately above the Southern California average and similar to the State. The higher unemployment rate is due to the seasonal nature of agricultural employment in the area. The following exhibit illustrates the area's unemployment cOlh'lpared to California as of October 2005. Unemployment rates have declined 58% from the recession high of 12.2% in 1993. California Inland Empire 18,006,900 1,708,500 Unemplovment 5.0% 5.0% Labor Force "...... The most common measure of employment growth is the increase in nonagricultural employment. Nonagricultural employment is outlined in the following exhibit. During the 1980's the Inland Empire's employment base expanded rapidly as the area moved away from its military and government oriented employment base to a more fully diversified economy. Nonagricultural employmenthas grown from an annual average of 443,100 jobs in 1983 to 1,149,700 jobs in 2004. This represents an increase of over 675,000 new jobs created in San Bernardino and Riverside Counties during the past 20 years. As the economy rebounded from the national recession in 1981-1982, annual employment gains jumped by approximately 30,500 new jobs in 1984. Job gains peaked in 1990 with 44,400 new jobs. During the economic recession of 1991 to 1996, increases ranged from 4,400 to 28,600 new jobs representing a 0.6% to 3.8% gain per annum. Since 1999, job increases have ranged from 28,700 new jobs to a record increase of 62,000 new jobs in 2004. The percentage increases have ranged from 2.8% to 6.4%. The table below illustrates the ,--. ,...3~ [9W,"U;c2J!ijr~.1>?/ 20 ~-- annual employment trends from 1983 through 2004. In October 2005, the non-agricultural employment had increased to 1,182,700, a 1.8% increase from October 2004. ..., Employment among the individual industry categories reflects changes in the Inland Empire economy during the past decade. Construction employment gains generally mirror the regional economy. In response to the high level of construction activity that occurred in the County during the period from 1984 to 1989, construction employment reached nearly three times the level recorded in 1982. From 1992 through 1 $95, cogstruction employment declined in response to decreased building activity."i""he 2003 levels were more than double the 1993 low. San Bernardino-RiversideNlSA1 Employment Trends 1983-2004 '-" 1 Data revised due to changes in research methodology, 2004 Benchmark Source: Employment Development Department 4/05 '-" 21 3:< AGENDA ITEM NO. ?,~~ PAGE:J1~ OF. It- ,'-"" The number of manufacturing jobs in the Inland Empire has increased over 45% from the levels recorded in 1991. However, manufacturing jobs declined 5.5% from the 2000 high of 120,000 jobs by 2003, but increased back to 120,000 in 2004. Due to the high labor and capital costs in Los Angeles and Orange Counties, manufacturing firms have expanded or relocated some of their manufacturing operations to Riverside and San Bernardino counties to take advantage of the labor force and lower land costs. Transportation and public utilities employment tend tOl11irrOLPopulation growth. In the Inland Empire the finance, insurance and real est~te ("FIRE;~')ic;ategory is still a small segment of the employment picture. A significant number of the new jobs created in the last 15 years have been created in the service sector. The service sector will continue to play a major role in employment growth during the next few years. Government employment is a major employment sector in the Inland Empire due to the rapid growth. ,""" The future employment growth in the Inland Empire is expected to continue as more firms relocate to the area to take advantage of lower land prices and the abundant labor pool. Factors that will affect .employment growth include the direction of the state and national economy, and consumer confidence. Due to the terrorist attack on September 11, 2001 and the Iraq conflict, consumer confidence has been negatively impacted. Most economists report that we were in a flat economy in 2002 and the first half of 2003, but that we began recovery during the second half of 2003. The recovery continued into 2005. Income The average household income in Riverside County is estimated to be $63,592. The median household income stands at $48,384. These figures are moderately below the Southern California region average. The lower income level is due to the lower wages in agriculture, manufacturing, service and government employment. The household income distribution for Riverside County is illustrated in the following table. .--- 22 ACENDA ITEM NO.3;)... PAr~.,k1 (p OF 33~v ,,. County of Riverside Household Income Distribution 2005 ~ 1/ Percent of total distribution Source: Claritas 5/05 Retail Sales Retail demand continues to be fue in population as outlined previously. For Riverside County, ta)(CJble re~flil s from $3.9 billion in 1985 to over $7.1 billion by 1994arl(jto over $ 2003. During the past four ....., years, annual changes have ranged Jrom an i $768 million in 1998 to an increase of $1.7 billIon in 2003, as shown On the next table. Data for 2004 are not available as of the date of this report, although on a statewide basis, retail sales were reportedly up over 10% in 2004. The increases in retail sales.are due to the exceptionally high County population growth rates experienced during the period from 1983 through 1990. During the period from 1991 through 1993, retail sales were stagnant due to the economic recession. From 1994, and continuing through 2003, there was a significant rebound in retail sales. Official state reports for 2004 will not be released until later this year. In the future, retail sales growth should mirror the population growth in the County. ~ 5;) ~o .... ..--. ._-;-~ ~~ 'k2:1L 23 ,,- Riverside County Retail Sales Trends 1/ 1985-2003 ,.,--... 1/ Taxable Retail Sales Total (not adjusted for inflation) Source: State Board of Equalization 2/05 Transportcttion Rivers.ide County is served by a major airport, Ontario International. located in adjoining San Bernardino County. Several major airlines have flights into Ontario, while international f1igi~t$can be booked ouiof Los Angeles International Airport. A network offreewayslinks most urbanized areas of the County. The major north- south arterials are the Corona (15) and Escondido (215) Freeways. The Pomona Freeway (60) provides east-west access to the Los Angeles area and the desert areas of Riverside County. The Riverside Freeway (91) provides access to Orange and Los Angeles Counties. ,-- Environmental Concerns The Endangered Species Act of 1973 precludes any activity that constitutes a taking of a federally listed endangered species except by permit. Numerous areas within 24 AGENDA ITEM NO. ~~ PACEk 1? OF \.. Riverside County have been identified as containing potential habitat of the Stephen's Kangaroo Rat, a listed species. The evidence of habitation by this rat has resulted in delays or substantial revisions of proposed developments. The California Department of Fish and Game is currently reviewing the status of additional wildlife for possible inclusion on a list of endangered or threatened species. A Multiple Species Habitat Conservation Plan (MSHCP) was approved by the County Board of Supervisors on June 17,2003. The MSHCP is a comprehensive, multi-jurisdictional effort that includes the County and 14 cities. This plan focuses on the conservation of 146 speciesiTheMSHCP consists of a reserve system of approximately 500,000 acres of w . cres are within public ownership and approximately 153,000 acres are in p ownership. The purchase of the privately owned lands will be funded by an adopted iliA. MSHCPllfeeof..$1 ,651 per dwelling unit is imposed for housing built in the MSHCP area. In summary, the region exhibited very ation and 'employment growth during the 1980 to 1989 period. The recessiqn of the Os had significantly slowed population growth and resulted in overall job lo~~es from 1990 to 1995. Over the past seven years, as the economy recovered, population and employment growth have been stronger than during the prior growth years of the 19805. The long-term outlook for the region remains positive as the elements of abundant affordable land and labor still exist. Future growth will, however, continue to be affected by the trends in the overall economy. Riverside County's economic environment should follow a path similar to that of the other Southern California counties. lake Elsinore The City of Lake Elsinore is located in the southwestern portion of Riverside County. The City of Lake Elsinore and the surrounding area to the southeast, most notably Murrieta and Temecula, experienced rapid development beginning in the early 1980's and late 1990's and was one of the fastest growing areas in Southern California. It has become a sprawling suburban bedroom community for Orange and Los Angeles counties. The area has attempted to retain the semi-rural, western atmosphere of the early residents. Please refer to the next page for a neighborhood map. ....." ....." ....." 25 3:2 fl.GENDA ITEM NO.__.-~-= PACEj..1Q OF ~~ --' During the past five to ten years, the City of Lake Elsinore has begun to add new '-' residential and retail developments. Most of the newer retail commercial development has occurred adjacent to the Corona Freeway (1-15), which bisects the northern and eastern sections of the City of Lake Elsinore. The major community commercial retail development is concentrated near the intersection of the Corona Freeway (1-15) and Railroad Canyon Road, primarily along Mission Trails. A major retail development is under construction at the 1-15 and State Highway 74. There is older commercial development located along Riverside Drive between Lakeshore Drive and Grand Avenue. The newest residential developments are located in the northeastern area of the City, in the vicinity of the Tuscany Hills, Rosetta Canyon and Canyon Hills developments. In addition, there is some residential development on the northwest side of Lake Elsinore, along Lake Avenue. Most of the new home construction is single-family detached product in master planned communities. The homes offered range from entry-level homes in moderate price ranges to larger move~up homes. As the market changed during the past recession, the residential sector moved to the smaller homes with affordable prices. But recent development has shown an increase indwelling size and sales prices. ......, Population Although the City of Lake Elsinore, incorporated in 1888, is old by southern California standards, it was not until the 1980's that the City experienced significant population growth. The City of Lake Elsinore has experienced moderate population increases during recent years as illustrated on the following exhibit. Since 1980, annual population gains of 400 persons to a peak of 2,700 persons have been recorded. The current population of the City of Lake Elsinore, as of January 2005, is estimated to be 38,050 persons. This is a 490% increase over the population recorded in 1980. Over the last three years, the City has averaged a 6.9% annual growth in population. 27 ......, /'ltOENOA rrr=.M No.3;;;... --- -.._- ~AOE2.KL-OF <~?/ /"" ~ City of Lake Elsinore, CA Population Trends 1980-2005 Source: California Department U.S. Census 5/05 Although theCityof.l..ak~ ElsinOre is predominantly residential in nature, there are 1,200 acres zoned for industria.IJ.1~~. Theitiiproved industrial development is limited with most of the industrial land remainingJlacant. Employment in the immediate Lake Elsinore area is limited. The major employers in the area are as follows: Manufacturina Labeda Wheels Pacific Clay Wieland Precision, Inc. Emplovment 150 130 112 Product Racing Skates Building Products Tool & Dye ,.-.. 28 !f1iW ~c~~22___. Z~Z,f- ~~ ~.rc ','J Fj':\~jl~:c'_".__ _~_ ~ L:", . "', ~ Non-manufacturina Emplovment Product ""'" Lake Elsinore USD 1,681 School Lake Elsinore Outlet Center 1,169 Outlet Mall Wal-Mart 400 Retail Lake Elsinore Storm 250 Baseball Lake Elsinore Casino 200 Resort/Casino Albertsons 150 Supermarket Vons 145 Supermarket Stater Bros. 131 Supermarket Most of the residents in Lake Elsinore workinareas)outside of the City. Many residents drive considerable distances to work in S8nDiego, LdsJ.\ngeles and Orange counties. The housing market in Lake Elsinore is<typically single-,family residences. New homes range from relatively entry-level home.sof 2,000 square feeton 5,000 square foot lots up to larger move-up homes on 7 ,200 square foot lots. The majority of the homes range in size from 2,000 to 3,000 square feet and are located in larger subdivision tracts or master planned communities on typical lot sizes of 5,000 to 7,200 square feet. ~ In view of Lake Elsinore's. growil"lgeconomy and population, only shortages of public services or a prolonged national building slump are likely to keep the City from reaching full development over time. Based on the past ande><:pected future economic and population growth of the Lake Elsinore area, the Lake Elsinore area is considered to have average to good future growth potential. Immediate Neiahborhood The subject property is located in the eastern portion of the City of Lake Elsinore. The District is in the City Center Specific Plan Community approximately one-half mile south of Railroad Canyon Road adjacent to the east side of the 1-15 Freeway. The newer homes in this area are part of the existing Tuscany Hills and Canyon Hills master planned ~ 29 3d- AGENDA ITEM NO. "<1 ~ PAGE 1,1J~ OF.... ,....... communities. The communities have been under construction for approximately 10 years. The homes are a mix of one and two story construction, of average to good quality in average to good condition. Conclusion Lake Elsinore and the surrounding area has been experiencing rapid population growth during the past few years. New residents are being attracted to the area because of the affordable housing in comparison to the coastal regions ofl..p:s A~.geles, San Diego and Orange counties. The subject's general neighborhoodi:sexperiencing new construction of single-family developments that exceeds the quality and appeal 6fl'1"lany of the existing neighborhoods. The demand for continued development supports thei)uildrr'out of the subject property. ,....... r-.. 30 .AGEND. A. ITEM N~ .:, {t-: PAGE 7~ OF3- - SITE ANALYSIS '-'" General The subject property of this appraisal is identified as CFD No. 2005-6, City Center Townhomes. The subject is proposed for 144 residential units. Three model homes are under construction for this project known as Vista del Verde. The sites within TM Nos. 31531 and 31532 are from a blue-top to near-finished condition. Extensive street widening and off-site utility construction is nearing completion. CFD No. 2005-6 is a portion of the City Center Specific Plan. Please refer to page 4 for a map ofth~Distnct. Location The subject property is located in the City of L..akeElsinore in the iSQuthwestern portion of the County of Riverside. The District is within the City Center Specific Plan and is located adjacent to Interstate 15 Freeway and south of Railroad Canyon Road. The subject is identified as 31450 Grape Street. Grape Street is a frontage road to the 1- 15 Freeway. ...." Current Site Condition The District is well under site construction with TM Nos. 31531 and 31532 improved toa blue-top to near-finished site. Both Tract Maps were recorded on DecemberS, 2005. Significant street widening and extension of water, sewer, storm drains and alldry utilities are nearing completion on Grape Street. Six buildings with 36 units are in the framing stage of construction. An additional 14 buildings with 84 units have had their slabs poured. Four buildings with 24 units have not started construction. Size and Shape The overall shape of CFD No. 2005-6 is irregular and contains 13.3:t net acres, according to the two recorded tract maps prepared by Stephen H. Hackett, Inc. CFD No. 2005-6 has been subdivided into two recorded tract maps. Please refer to the following table, which summarizes the tracts. The following two pages show a copy of the tract maps. ...." 31 0;> A(jEN~~~~ KOF 3~' "...-. "...-. ,,-... Tract No. 31531 32 II.c:mOA mM NO. '3;). k: PAGf~Of -"~ . 10--- Tract No. 31532 ....., '-'" ,...." 33 J\OENOA ITEM NO. 3~ ~ PAOEJZl-OF .LJ..?, ;t'" CFD No. 2005-6 Soils and Geoloav For CFD No. 2005-6, one geotechnical report was provided for review. The report was prepared by Pacific Soils Engineering, Inc. dated March 11, 2004 for Western Pacific Housing/DR. Horton Homes. The report covers TM Nos. 31531 and 31532. The conclusion reached was that from aigeotechnicalpoint of view, the proposed site development was considered feasibIeriprovided recommendations presented in their report were incorporated intotl1e design and construction of the project. There are 120 units currently under construction. ,......... The appraisers assume that the soil conditions allow all of the proposed development as discussed in the Highest and Best Use section of this report and as proposed by the developer/builder. Topoaraphv and Drainaae The topography within the subject property is generally hillside terrain with moderately to steeply inclined slopes descending from rugged ridgelines. There is an approximate 100-footelevation difference on the subject property. Maximum depths of site cuts and fills are reportedly to be approximately 25 feet. Surface runoff is generally directed to the south and west from the hilltops via sheet flow to drainage swales and Grape Street. Once built out, drainage will be handled by on- site storm drains to off-site storm drains to be located in Grape Street. /'"' Zonina A portion of the District, TM No. 31531, is zoned SP, Specific Plan, by the City of Lake Elsinore. This zone allows for a variety of compatible uses, which originally were 34 .l\CsmA lTI'M NO. . 3 f~ [FNJ;E~ OF 3 . ~.' .. for retail development, according to the City Center Specific Plan first approved in 1992. The Specific Plan resulted in the development of the City Center Shopping Center. This center is anchored by Wal-Mart and a Vons Supermarket and contains approximately 240,000 square feet or retail space. The subject property was a remnant of the original shopping center. In 1999, the previous owner applied for Amendment No.1, which changed the allowable use for the subject site to multi-family residential. TM No. 31532 was zoned R-2-Medium Density Residential in March 2004. ,..., As proposed, the subject project appears to be a legi:llly conforming use. The subject property is in conformance with all zoning requirements, and is assumed to be in conformance with all governmental regulations. Access and Circulation The City of Lake Elsinore is served by Interstate 15 which links the City with the major freeway network serving the region. 1-15 travels from the Mexican border north through Riverside and San Bernardino counties, to Las Vegas and Salt Lake City, connecting with several east/west freeways. F II ay interchange facilities are located approximately one-half mile north of the subject property at Railroad Canyon Road. ......, As the tracts are improved, the interior streets will be completed with full street improvements. Sidewalks will be installed as part of the subject improvements. Grape Street is being widened and full street improvements will be constructed prior to the completion of the subject dwelling units. Easements The appraisers have been provided with one preliminary title report for TM No. 31531 of CFD No. 2005-6. The report was prepared by First American Title Company, dated March 30, 2005. A copy of the title report is retained in the appraisers' work files. ,..., 35 ~) AOENDA rrE~ ~~'-I ~ (. ~ pAGE.1::JU- OF /""" There did not appear to be any easements, restrictions or conditions that would adversely impact the value of the subject property. It is a specific assumption of this appraisal that easements and encumbrances affecting the property are not detrimental to value. No special tax lien was reported for the City of lake Elsinore CFD No. 2005-6. Utilities The subject property is served by the following companies/a.gencies: Electricity Water Gas Sewer Telephone Southern California Edison Elsinore Valley MunicipalN1\later District Southern California GasiCompany Elsinore Valley MuniciparWater District Verizon /""" Earthauake. Flood Hazards. and Nuisances The subject property is shown on the Riverside County.National Flood Insurance Map Panel No. 060636-2054F, dated August 18, 2003. According to the flood insurance rate map for the City of Lake Elsinore, the subject property is not located in a HUD flood hazard area. The subject is within ZoneX, outside the 500-year flood area. According to the California Division of Mines and Geology, the subject property is not located in a seismic study zone; however, earthquakes impact all of Southern California. There are several faultsin1the vicinity of the subject. They consist of the Glen Ivy Fault, Elsinore Fault,VVillard Fault and the Wildomar Fault. Other active faults are the San Jacinto (20 miles from the subject) and the San Andreas (30 miles from the subject). Toxic Hazards A toxic hazard report was not provided to the appraiser. There are no toxic hazards known to the appraiser on the parcels. ---- 36 NO 3;2 -=-"' '-GeNOA \iEM . "- . ~~ ~ ,'\anD I Of ~ .. rrNJ:~~ . Environmental Issues The subject site is not classified as property with historical, archaeological, or scientific value and to the best of our knowledge, is not considered wetlands. The site is subject to the MSHCP fee. The property owner has reported that the property is not impacted by any environmental issues. ......" Assessed Values. Taxes and Special Assessments The seven individual assessor parcels have prope,rty taxes as shown on the following table. Pursuant to Proposition 13, passed in.C~liforni978, current Assessed Values mayor may not have any direct relationship toclJrrent met Value. Real estate tax increases are limited according to Proposition 13 tg ximum of2o/~. per.year plus bonds, if any. If the property is sold, real estate taxes arenol1T'lally.,subject t6m6dification to the then current Market Value. Currently, there are special ass.essm~l"lts forseveral.~gencies. In addition, there are special taxes for CFD No. 2005..6 shown ontbe county tax bill. The total tax rate is estimated not to exceed 2.0% of it be base valueoftbleproposed dwelling. CFD No. 2005-6 will havespeciattaxes currently ranging from $1,182 to $1,839 per unit depending on dwelling unit size. "-'" The office of Harris & Associates estimates the Special Taxes on the undeveloped residential land within CFD No. 2005-6. The Special Taxes for the individual homes are also estimated. The estimated property values are based, in part, on the Special Taxes estimated for the ultimate homeowner and any undeveloped property. '"""" 37 AGENDA ITEM NO. . 3:;1 ~ PAGf-)- q I OF _'"2, r" City of Lake Elsinore Community Facilities District No. 2005-6 Assessed Values and Taxes 2005-06 The subject property falls within the taxing jurisdiction of the Riverside County Assessor's office. The published annual tax rate in this areaisi1.00520%. All taxes for 2005-06 have been paid. The above taxes do not include CFD No. 2005-6 or the City's LLMD. ,,-..- The overall effective tax rate for the proposed homes will be approximately 1.8% to 2.0% of our appraised base values. This tax burden is common for Riverside County where tax rate~in new home.commurlities typically range from 1.70% to 2.00%. A survey of the subject's market aretil revealed that special Assessment Districts or CFDs encumber most of the competing residential subdivisions. There does not appear to be a great deal of resistance to the special assessments that do not increase the overall tax rate significantly above 2.00% of Assessed Value. According to the County's web site, the first and second installments of property tax due by December 10, 2005 and April 10, 2006 for fiscal year 2005-06 are paid in full. /""'"' Site Improvements As of the date of value, the subject is improved from a blue-top to near-finished site condition. Thirty-six units are being framed and 84 units have their slabs poured. 38 3').- ~GENOA \1~~~~~ PACE;p..:;-- The builder provided a summary site improvement budget which totals """" $16,038,161. The costs are reported to include the fee credits and/or reimbursements eligible from this CFD. A summary of the costs is included in the Addenda of this report. The costs are reported to bring the land from a raw condition to a physical and legal finished site condition. According to the builder/developer's cost information, $12,028,000 has been expended as of the date of value. Approximately $4,000,000 remain in costs to bring the subject from its current "as is" condition to finished lot condition. Eligible reimbursement for infrastructure imp'~()veme CFD No. 2005-6 is $3,092,800. Therefore, then~t>.allr!~Ui1t complete to finished lot condition is approximately $900i,O()O. or fee credits from maining cost to It is a specific assumption of this appraisal; that the site ts provided by the developer/builder are all the site costs requiredto bringth nd withi FD No. 2005-6, to a finished site condition, ready to issue buildiing pe/'l'l'lit co tion for the 144 units within Tract Map Nos. 31531 and 31532. Thisappraisafreport angestimated value is based on the developer receiving reimbursements or fee creditsof$3,092,800. If there is any change in the reimbursements, the value estimatewould likely change. ....., ....., 39 P.GEN~;:m'~!JI, ~ ,.... IMPROVEMENT DESCRIPTION General The proposed residential development known as Vista del Lago is located in the City Center portion of the City of Lake Elsinore. The subject CFD is proposed to include 144 attached residential units within 13.3:t net acres. The following table summarizes the proposed floor plans within CFD No. 2005-6 as of the appraisal date. Occupancies of dwellings are scheduled to commence in May 2006. /""' Specifications have not been. provided. Wehave.been provided with brochures of the actively sellingprojectandr~ducedfloor plans for the proposed project and they have been reviewed. The followingisa list ofsQrJ1e of the assumed general construction specifications for the attached singf~-family homes. Although the base sales price is the current asking price, the builder i~offering concessions approximating $20,000 to be applied to closing cost, upgrades and broker commissions. Construction Units are of Class "0" construction; wood frame and stucco siding with several elevation choices. Foundations Foundations are poured concrete. Particle board over wood floor joists for the second floor. Structural Frame Consists of 2" x 4" and 2" x 6" wood framing. ,;--- 40 3:? "CENOA \"E~M NO.~ E Of~ pAC Roofs Roofs are of concrete tile. ......, Windows White framed vinyl windows with low-e glass. Floor Covering Floor coverings are wall-to-wall carpet in all living areas. Entries are of ceramic tile and kitchen, bathrooms and laundry room are of vinyl. Interior Finish Custom trowelled ceiling and wall treatments. Heating/HVAC Energy efficient central air conditioning and gas forced air heating. Kitchens Kitchens will be equipped with oak cabinets. .and ceramic tile counter tops. Each kitchen will include a 30" drop-in stove, microwave, and dishwasher. Bathrooms Master bathrooms will have doubleisinks with cultured marble countertops and maple cabinets, separate fiberglass shower/tub. Secondary bathrooms will have cultured marble countertops, fiberglass combination tub/shower, and maple ......, cabinets. Doors Solid core8-foot entry door. Garage doors are sectional steel roll-up. Site Improvements The pro~uction homes include.concrete driveways and walkways to the front entry. Side and rear yard fencing areincluded. Front landscaping and irrigation system are included. Options Numerous options and upgrades will be available including flooring, cabinet, and countertop upgrades. Most options and upgrades, provided at competing similar quality developments, will be offered. Conclusion of the Improvements Based on the review of the product information and physical inspection of similar products, we are of the opinion that the quality of the projects are average and will generally meet buyer expectations for the subject's marketplace. "-' 41 ^GEtl~:~q~Of~ .,,-... Functional Utility It is an assumption of this appraisal that all of the floor plans are functional, and competitive with current design standards. Remainina Economic Life The total/remaining economic life, according to the Marshall Valuation Service, is considered to be 50 years from date of completion. Homeowners Association The currently selling project, Vista del Association. The monthly association dues are per month. will have a Homeowner's be approximately $215.00 ,,-... .,r--. 42 ~;) loA ttO. ~GEttOr.. \~l1n {. . Of . PAGE~ HIGHEST AND BEST USE ......." The term highest and best use is an appraisal concept that has been defined as follows: The reasonably probable and legal use of vacant land or an improved property, which is physically possible, appropriately supported, financially feasible, and that results in the highest value. The four criteria the highest and best use must meet are legal permissibility, physical possibility, financial feasibility, and maximum prod uctivity. 4 The determination of highest and best use, ther~fore, requires a separate analysis for the land as legally permitted, as if vacant. Next, the hig~est and best use of the property with its improvements must be analyzed to consider any deviation of the existing improvements from the ideal. ''The highest and b~stl.Js.e.of both. land as though vacant and property as improved must meet four criteria. The hig~e$t and besfuse must be: legally perinissible, physically possible, financiallyfeasible;cmd.maximally productive. These criteria are often considered sequentially.,,5rhe four criteri~linteract and, therefore, may also be considered in concert. A use may be financially feasible, but it is irrelevant if it is physically impossible or legally prohibited. ....." Leaallv Permissible Use The legal factors affecting the site and its potential uses are often the most restrictive. These would typically be government regulations such as zoning and building codes. CFD No. 2005-6 is located in the City of lake Elsinore. The subject is zoned for multi-family residential development within the Specific Plan. This zone designation allows for attached single-family residential use with a maximum density of 12 units per acre. CFD 4 The Dictionary of Real Estate Appraisal, 4th Edition, Pub. by the Appraisal Institute, Chicago, IL., p. 135. 5 The Appraisal of Real Estate, 10th Edition, Pub. by the Appraisal Institute, Chicago, IL., p. 280. ....." 43 . ~"b~:-.- . ~O ~::~Of. .. r-- No. 2005-6 has two recorded tract maps proposed for 144 dwelling units. The proposed development is a considered legal and conforming uses. Phvsicallv Possible Use CFD No. 2005-6 is irregular in shape and contains approximately 13.3.:t net acres according to its tract maps. The site has a hillside topography, but is in the process of being finished to town home sites. The residential development is a natural extension of existing nearby residential developments, within the Tuscany Hills and Canyon Hills Communities. The property adjacent to the north is.improvedwith a 240,000.:t square foot shopping center. The property adjacent to the proposed for a 150.:t unit townhome project. Within TM Nos. 31531 and 31532, all ofthelandis gradedfrom blue-top to a near- finished condition. Three model homes are . under con$tryction and 117 production units are under construction. All normal utilities are available to ser;vethe subject sites. ,,-.. The property is generally bounded by commercial development and undeveloped land. Access is considered to be good via Grape Street, Railroad Canyon Road, and the 1- 15 Freeway. This appraisal considers the benefits and/or improvements that are to be funded by CFD No. 2005-6. Based on the physical analysis, the subject property appears to be viable for numerous types of development based on its size and topography. However, the site's location and current site improvements would suggest the lands have a primary use of residential development. .",-- Financial Feasibility and Market Conditions The financial feasibility of the development of the subject property is based on its ability to generate sufficient income and value in excess of the costs to develop the property to its highest and best use. Please refer to the Valuation section of this report, which gives support to the financial feasibility of CFD No. 2005-6. 44 3~ AOENOA ITEM NO. ~ ~-= PACE.1ffLOF~ General Market Conditions - Riverside County The Inland Empire housing market has continued to increase in demand and price over the past several years. As in the past, the increased housing prices in Orange, San Diego and Los Angeles counties have encouraged buyers to look at alternative locations for homes. The Riverside County housing prices as of January 2006 were up 15.8% over the same month last year. The median detached new home price in the County hit a record high of $445,424 in December 2005, according to a survey by the Hanley Wood Market Intelligence. San Bernardino County had a median price of $363,816, up 3.5% in one year, but down 17'.0% frOm$eptember 2005. Sales volume is still at historic highs for the month, up 9.~% fr()m Jahuary 2005. Only the Desert and North Central submarket had sales declines. All othersubmarkets had increases. The subject property is located in the South submarket, which had a 4.5% increase in sales from one year ago. However,.allsl.lbmarkets declined in their sales per project, with a decline of 13.6% for all of Riverside County. The current projection for the housing market is that we are seeing a return to a more balanced and normal markel-The past several years of record high sales volume and record highappr~ciation.appears to have stabilized, causing property values to plateau or even decline in some areas. The Inland Empire is expected to stay stronger longer where homes are more affordable than on the coast. The Inland Empire is expected to continue to draw homebuyers from Orange, Los Angeles and San Diego counties where home prices are significantly higher. Over the last 12 to 18 months, these three counties saw a decline in home sales from a year earlier, while the Inland Empire experienced its strongest or second strongest monthly sales rates. Most markets throughout Southern California plateaued during the last quarter of 2004 and the first two months of 2005. However, between March and November 2005, sales prices and sales rates improved. Sales have slowed over the last four months. '-"" '-"" '-"" """IV" ? J- ... . r'"i'I~;:2ito~~ "'" 45 ~- ",.-~~ .-.....- ~ While overall inventory is up, the impact is to a more normal market especially when it comes to supply and demand. Job creation was moderate over the past 24 to 30 months of recovery from the previous recession and the economy is still growing at a reasonable pace overall. Given the supply of new residential product in the Riverside County market, the subject tract should sell at a reasonable rate, but without the increases in price that have been experienced over the past several years. More and more news articles are suggesting that home prices are reaching a maximum level, and might even decline in 2006 or 2007. ./"'" Builders within Riverside County sold 3,947ne\iV. single-family detached homes and 365 condominiums during the fourth quarter of 200q.Both are significant declines from the third quarter of 2005. This represents a decrease of5.7% for detached product and 1.9% for attached product over the fourth. quarter of 2004. The bulk of the attached homes sold in Riverside County during the fourth. quarter of 2005 is priced under $350,000 and comprise 86%.:t of the total sales.Salesiof homes priced between $250,000 and $350,000 continue to see the most activity, comprising 81 %.:t of the attached market. The number of aCtive attached projects in Riverside County increased by three projects during theiJourth quarter of 2005. The submarket with the greatest number of projects is the Desertsubmarket. Standing (completed, but unsold) attached inventory increased in the fourth quarter of 2005 compared to the .fourth quarter of 2004 to 181 units in Riverside County. This is up from three units at the end of the third quarter of 2005. At the current sales rate, that is less than a four-week supply of attached homes. Attached total (built, under construction, planned) unsold inventory consisted of 2,627 units at the end of the fourth quarter of 2005, which is up from 2,526 units last year. At the current sales rates, this level of inventory equates to a 10.7 month supply, which is down from 34.7 months last year. Home prices continued to increase during the fourth quarter of 2005. However, in ",--. general, percentage increases have moderated since the first and second quarters of 46 ~ ~CENOA \'TE~~' Of 3>."~ pAGE~ 2004. Interviews with builders in the Inland Empire anticipate significantly smaller price increases per phase. Many tracts have begun offering incentives and concessions to buyers. The higher prices have prompted more people to sell their homes which is bringing the supply and demand into better balance. ......", According to an interest rate survey published weekly in The Los Angeles Times, the typical 30-year, fixed rate conforming loan was between 5.75% and 6.25% as of the date of this report. Mortgage rates have been in the 5.00% tQ6.00% range over the past year, following more than a year of rates in the 6% range. While a slight increase in rates may impact demand, we do not anticipate a signific::;antdropindemand as long as rates remain near or below the 8% level. Riverside - South Submarket - Attached The subject property is situated in the South submarket regIon, which accounted for 108 attached sales during the fourth quarter of2005, or~bo.ut a 29.6% market share of the Riverside County market. This number of sales declined from 191 sales in the fourth quarter of 2004 and 236salesin the third quarter of 2005. The median price in the South submarketihasil'lc::;reasedover the past year to $303,561, a 10.4% increase. This is a record high median<price. The South submarket is one of the mid-priced submarkets in Riverside County WIth a price per square foot ratio of $221.00. The price per square foot in the subject's submarket decreased by 5.2%, but the average size of a attached home increased by 16.6%to 1,374 square feet. ......", During the fourth quarter of 2005, the subject's submarket did not sell any attached homes under $250,000; 14 attached homes priced between $250,000 and $299,999 sold; 83 attached homes priced between $300,000 and $349,999 sold; and 11 homes priced over $350,000 were sold. There were 108 attached products that sold in the subject's submarket and 365 attached units in the entire Riverside County. Both of these are declines from the third quarter of 2005. 47 '],~ - I\C'ENDA ffQJIftG._. 3.. r;;, PAGE~OF . 'It. .~_ .- ~~. ;';'ii'. ~'.'5-",,,,-,,,,,,,"'. /"" Within the South submarket there are 10 attached projects, which is three more than last year at this time. The subject's market area reports 107 unsold standing inventory units and 153 unsold units under construction. This is a 3.0 month absorption time for the completed dwellings and a 4.5 month absorption for the units under construction. Total inventory which includes units built, under construction and future construction totals 620 units which equates to an 8.1 month supply at the current sales rate. One year ago total inventory was at 716 units, and the months to absorb based on last year's sales rate was 14.9 months. /"" Feasibility It is not in the scope of this appraisal assignment lor the appraisers to conduct an extensive independent market study/absorption analysis, <but it is the appraisers' responsibility to address the reasonableness of thecorwlusions of any market study which has been prepared by outside firms for the subject property. Unforeseen national and regional economic and/or social changes will affect thelirne-frame of real estate development. In an attempt to arrive at reasonable and supportable absorption schedules for the various uses within CFD No. 2005-6, the appraisers reviewed an independently prepared absorption analysis that relates to the CFD. This independent study is titled Market Absorption. Study. Community Facilities District No. 2005-6. (City Center Townhomes). prepared by Empire Economics, Inc, dated April 8, 2005, and updated February 16, 2006, for the City of Lake Elsinore. A copy of a portion of the absorption analysis summary is included in the Addenda of this report. The study reports that the subject property will have a 2~ year absorption time frame. The 144 homes at Vista del Lago are estimated to absorb at 78 units in 2006 and 66 units in 2007. The overall monthly absorption is 10~ units per month. It should be noted that this appraisal values merchant builder land, while the market absorption report refers to homebuyers purchasing completed homes. /"" 48 AGENDA ITEM NO-_ ~. ~&: PAC'C1;o'l/ OF ""'-- It is our OpiniOn, after surveying the competitive projects and analyzing the pricing, design, location differences and other pertinent factors, that the subject property should experience average to good absorption, similar to that reported by Empire Economics. "'" The table on the following page reports the prices and absorption of six attached residential developments including Vista del Lago. Attached absorption has ranged from 5.5 units per month to 10.7 units per month for projects that have been in an active sales program for 5 to 14 months. These absorption rates arerdownslightly from mid-2005. The subject's tract, Vista del Lago, opened for sales()n FebruarYi26, 2005. The sales representative reports 114 homes released and 92 homes sold as of the survey date, February 15, 2006. This represents a monthly absorption of&:l:units permonth.However, there are almost 858 attached units in developm~ntinthe subjeotllar~a and only about 410 have closed escrow, or about 48%. If there were a softening of the attached market, prices and absorption might be negatively impactegdue tqthe latg~~upply of potentially unsold. attached dwelling. Base prices have$'tayedstableover the last nine months with some slight increases. Most projects, inC1I.Jding the subject, .are offering concessions up to $20,000 to home buyers. ......", Maximallv..Productive In considering what uses would be maximally productive for the subject property, we must consider the previously statedilegal considerations. We are assuming the land uses allowed under the Specific Plan.zone regulation with the City of Lake Elsinore are the most productive uses that will be allowed at the present time. Current zoning and approved uses indicate that other alternative uses are not feasible at this time. Given the steady demand for residential product in Riverside County and the subject market area, it is our opinion that the development as proposed provides the highest land value and is, therefore, maximally productive. "'" 49 ,>;)- ,"t... .,. j'.<;"._.~-"./_ . AvEN~~~-~f~ .;:' ...... ,,-.... No. Prolect Location 1 Vista del Lago Western Pacific Housing Lake Elsinore SUBJECT Total Units 144 No. Released 114 2 Amberwalk D. R. Horton Murrieta 111 ,,-.... 3 Meadowlane D. R. Horton Murrieta 159 4 Belcaro D. R. Horton Lake Elsinore 141 5 Amberwalk at Ivy 93 54 D. R. Horton Murrieta 6 Lindstrand at Skyview Ridge 144 144 D. R. Horton Murrieta /"""" ' Base Price $272,000 $310,000 $335,000 Pricel Sa. Ft. $238.39 $223.67 $219.38 Unit Size 1,141 1,386 1,527 111 $309,000 1,340 $2~0.60 $329,000 1,411 $233.17 $339,000 1,548 $218.99 159 $267,000 1,072 $249.07 $295,000 1,163 $253.65 $322,000 1,444 $222.99 60 $288,000 854 $337.24 $315,000 1,159 $271.79 $332,000 1,235 $268.83 $301,000 1,340 $224.63 $313,000 1,411 $221.83 $332,000 1,548 $214.47 $289,000 1,156 $250.00 $316,000 1,472 $214.67 $311,000 1,508 $206.23 No. Sold Overall Start Dt. Mo. Abs. 92 7.9 Feb~05 111 Jun-04 Sold Out Aug-05 5.5 159 Nov-04 Sold Out Feb-06 10.7 55 May-OS 6.0 44 9.3 Sep-05 144 9.8 Jun-04 Sold Out Aug-05 'b'r ~~~OAn911 NO'~.._.'. 'AR!>IGol\~' GX~~ '1'~. ~ 1~~1",\'tJ1I'"";- ~--'--:"~-~ Conclusion Legal, physical, and market cansideratians have been analyzed to. evaluate the highest and best use af the praperty. This analysis is presented to. evaluate the type af uses that will generate the greatest level af future benefits passible fram the land. ....." After reviewing the alternatives available and cansidering this and ather infarmatian, it is the apinian af the appraisers that the highest and best use far the subject praperty, as vacant and as prapased, is far residential develapment similar to. that prapased far the subject tract. The project appears to. have the lacatigtl,featu pricing structure to. abtain an average to. gaad sales rate under narmal finl':ltlcinglliodm As Vacant and As Improved After reviewing the alternatives available cansidering this and ather infarmatian, it is these appraisers' apinian that ultimate lapmenf af single-family attached far-sale hames similar to. the current prapased praduct is considered the highest and best use af the praperty. ......, ~ 51 f!J;L "CENOA \TE'3MO<- Of 3 ~.~ PACE_ - I"""" VALUATION METHODOLOGY Basis of Valuation Valuation is based upon general and specific background experience, opinions of qualified informed persons, consideration of all data gathered during the investigative phase of the appraisal and analysis of all market data available to the appraiser. Valuation Approaches Three basic approaches to value are available to. the appraiser: Cost Approach ".-- This approach entails the preparation of a replacement or reproduction cost estimate of the subject property improvements new (maintaining comparable quality and utility) and then deductingfoflosse~iin value sustained through age, wear and tear, functionally obsole~cent fe~turesjand economic factors affecting the property. This is then added .tothe estimated land value to provide a value estimate. Income Approach This approach is based upOn the theory that the value of the property tends to ~set by the expected net income therefrom to the owner. It is, in effect, the capitalization of expected future income into present worth. This approach requires an estimate of net income, an analysis of all expense items, the selection of a capitalization rate, and the processing of the net income stream into a value estimate. Direct Comparison Approach This approach is based upon the principle that the value of a property tends to be set by the price at which comparable properties have recently been sold or for which they can be acquired. This approach requires a detailed comparison of sales of comparable properties with the subject property. One of the main requisites, therefore, is that sufficient transactions of comparable properties be available to provide an accurate indicator of value and that accurate information regarding price, terms, property description, and proposed use be obtained through interview and observation. I"""" 52 ,:;.tO~.. AvENO.. tH'.,".EM ,.. . ..F ~~ ;(~(j~~' ... Static Residual Analysis is used to estimate the merchant builder land value when the proposed product is known. From the estimated base retail home price, all costs associated with the home construction including direct construction costs, indirect construction costs, financing and profit are deducted. Following the deduction of costs, the residual figure is an estimate of the merchant builder land value. ....." The residential land is valued by the Direct Comparison Approach and the Static Residual Analysis. The Income Approach is typically used when appraising income producing properties. This approach is not applicable in land as land is not typically held to generate monthly income, but construct an end product which mayor may not generate income. The an appropriate tool in the valuation of land. ......" '-' 53 ~;2- ",GENOA \lE~ ~~ OF 3 ~ ~. PAOE~ ,- VALUATION OF CFD NO. 2005-6 General Information The subject property is being built by the developer/merchant builder, Western Pacific Housing. As previously described, all of the subject property is under construction from blue-top lots to near-finished lots. Of the 144 proposed sites, there are three models under construction and 117 production units under construction. This section of the report will value the 24 sites that do not have unit construction, assuming a finished lot condition. The next section of the report will value the three models he 117 sites that are in various stages of unit construction. From the total of.the finished sites and sites under construction a deduction for the costs to complete will beiirnade. These costs are reported to include all of the costs to bring the land from its current "asjS"conditionasofthe date of value to a finished lot ready to issue a building permit. Joe constru.ction fund proceeds from the sale of bonds by this CFD will be given consideration in the final "as is" value for CFD No. 2005-6. ,.- Direct Comparison Approach The Direct Comp~ri~on Approach is based uporrthe premise that, when a property is replaceable in. the market, Its value tends to be set by the purchase price necessary to acquire an equally desirable substitute property, assuming no costly delay is encountered in making the decision and the market is reasonably informed. In appraisal practice, this is known as the Principle of Substitution. This approach isa method of analyzing the subject property by comparison of actual sales of similar properties, when available. These sales are evaluated by weighing both overall comparability and the relative importance of such variables as time, terms of sale, location of sale property, and lot characteristics. For the purpose of this report, the unit of comparison utilized is the price per unit for the residential land. Please refer to the following page that summarizes the sales considered similar to the subject parcel. ,,-, 54 "GEN~A ~EM NOooOf j ~ re ~: G~~ .......", No.1 Western Pacific Housing 7/04 13 Acres 144 $50,375 $110,000 Subject Property E1S Grape SI. Oak Grove 11DUlacre Sold in raw condition SIO Railroad Canyon Rd. 1.8% tax rate Lake Elsinore Some units with lake view Subject NO.2 William Lyon Homes 1/04 13 Acres 162 Portion of Harverston, Phase " SWC Harveston Way Lennar Homes Sold as superpad, 1.8% and Harveston Dr. tax rate, some units with & lake view NWC Harveston Dr. and Lakeview Rd. T emecula No.3 NIA Current 10 acres 150 $45,000 $80,000 Current listing of a Wildomar WIS Corydon Rd, N/O South Lake Villas Listing 15DUlacre parcel, adj. to Lake Elsinore Grand Ave. Raw site, 1.2% tax rate Lake Elsinore NO.4 Western Pacific Housing Current 15 Acres 198 $65,000 $95,000 Portion of North Oaks, 2.0% NWC McElwain Rd. & Temecula Valley LLC Escrow 13DU/acre tax rate, sold as superpad Sierra Ln. ......, Murrieta .......", NO~ !l()ENOA llE~tLOF ~ ,.. pACE ~ /""" ."........ Analysis Financing All of the comparable sales were all cash transactions or financing considered to be cash, therefore, no adjustments for financing were warranted. Property Rights Conveyed All of the comparables involved the transfer of the fee simple interest. The subject's fee simple interest is appraised in this report, no adjustment is warranted. Time of Sale During the past 8 years, Southern California has sharpIYt~t>oundedfrom its lengthy recession. Demand for land sales has dramatically<exceededslJiPply. Prices paid for residential land increased annually by 15% to 20% and.rnor~Jrom 1997 to 2000. However, 2001 saw a leveling of land prices, onlyJo increase<again2002, 2003, and the first six months of 2004. Home prices have increased from the I()ws of 1996. The average new home price in Riverside County has increased from $156,907 in the first quarter of 1996 to $429,073 in the third quarter of 2005. The median price increased 3.9% in the last 12 months. This is a record high, median pricelevel for existing homes in Riverside County. However, while prices have continued up, the increase is significantly lower than in the past 5:t years. Activity is reported to continue to be strong. Based on sales and resales of several of the land sales, we have used a 2% per month increase for time adjustments through September 2004. The market in general began to plateau during August and September 2004. The price stabilization continued through February 2005. As sales prices resumed their increases, upward adjustment of 1 % per month is required from February 2005 to October 2005. Conditions of Sale Typically, adjustments for conditions of sale reflect the motivations of the buyer and the seller in the transfer of real property. The conditions of sale adjustment reflects /""' the difference between the actual sales price of the comparable and its probable sales 56 3)- ACENDA'lEM NO._ :!:> ~ t;, PACE3' t1 OF .-;...~ .._~. price if it were sold in an arms-length transaction with typical motivations. Some circumstances of comparable sales that will need adjustment include sales made under duress, eminent domain transactions and sales that were not arm's length. All of the transactions were reported to be arm's length in nature. Accordingly, no adjustment is indicated. """"" Location The location adjustment is based on proximity to~xisting infrastructure and employment. The Temecula and Murrieta sales require. a dOWflw'ard adjustment, while Data NO.3 requires significant upward adjustment. Entitlement/Map Status All of the sales are entitled. No adjustment is required. Tax Rate The subject is expected to have an average overall tax rate around 2.00% of base value. Most of these sales have similarCFD's< or Assessment Districts, no adjustment is required. Data No. 3 wilthave a lower tax rate which requires a downward adjustment. The merchant builders of the/and are aware of the various taxes and have factored the impact of the highertaxJates into the prices paid for the land. """"" Density The comparables have.densities that range from attached at 11 dwelling units per acre up to 15 dwelling units per acre. The subject is an attached product at 11 ~ dwelling units per acre. Interviews with sales persons indicated that density is an important feature to the lake Elsinore homebuyer. Therefore, we have given equal weight to all of the sales. """"" 57 p,cEl'lOA!moI NO,.. .";,~ fAUE=:a.LJJF _f, / "....... ."...... " .~ C/ ~~.2 J! () 10 ~Q:~ -oj .!~ III CI> ::I.c =tr.!! c( C u: o o <0 ,.: ~ ~ i! _0 ~ c... so ~ o o .. Cl>1 o N ..Jiij ~ o o ~ 1i1 .....Ili: ;j1. o ~ CI> ~ gI D- :il D- c( ;j1. o j l~ i= 31 ?f.. o ~I if!. ~ ~ .., CI> III .c 0 .!! ~ .: 0 IL...J o o o .n o ~ c CI> E CI> E C w ~ CI> ~ c: W o~1L. ..J CI> N in U> ~ :i ~ . 1I1 00 Z..J ~ ~.!!! ~5 ;: :I .!I - to rl;o ~ ;::: .,; a:: c: -,g,~ (l)c:o Qlt1Jr::u ,,",:a.UUiet ~e"Ow~ ~~~~ iiJ~3 o en <0 0> o N ~ ~ ;j1. o ;j1. o ;j1. o ;j1. o ~ o o "l' o N o '<t ~ ,*. '<t N o 8 ri ~ '" ~ E w ~ <( C') ~ o N.!!! <0::> ~o C') ~ e >- ~~ o~ 55 .9~12 N{j)1h ~.9!i3 o~~..,~~~ zj!j! j!3~ 0'" 0'" ~ fij ~ fij (I) o o o 05 o ~ ;j1. o ;j1. o ~ o "? ;j1. o ;j1. o '<t o o o o co ... ~ o o o o o o co ... '" ~ c w U> ~ o to o ~ o~ \25 It) c: Cl CI> c: t:"" ;:) .~ O..J o Z -OcD~ a:: > g ('f) c: <( 'in . 0"0- ~~~~ 8Cl3 ~ o 8 .n 0> ... ;j1. o ;j1. o ;j1. o ~ o ;j1. o o o o .n 0> ... ;j1. o o o o .n 0> ... ~ E C W U> ~ o <( It) ~ o cotU ~-~ ~ c g 11> :> 1il ow .., .,; Ili: .!: C.!!l ~~...JQ) ~ ~ ~.~ ~(j'j~ o ~ Z No 3). - ~QENDA\TE:'1~ OF3~ ~ pPDi~ Condition of Lots All of the data had prices based on a finished condition. No adjustment is indicated. After all adjustments, and giving most emphasis to data No.1, the comparable data indicated a finished site value of $115,000 per unit. The cost to finish for the subject site is reported by the builder to be $21,000 per unit. Static Residual Analysis The merchant builder land is valued by the Direct Comparison Approach and by the Static Residual Analysis. The purpose of this analysis is to estimate>~ valu..e for the land assuming no direct construction has taken place. This method is particUlarly helpful when development for a subdivision represents the highest and best use and when competitive house sales are available. Reportedly, thIs analysis is by far the most commonly used by merchant builders when.cjetermining price for land. This analysis is useful for projects that will have atypical holding periOd of one to two years which representslhe typical holding period sought by merchant builders. The Residual AnCllysis best replicates the investor's analysis when determining what can be paid for the land based on proposed product. Purchase of the land is simply treated as one of the components necessary to build the houses to sell to the homeowner. When all the componehts.of the end-product can be identified and reasonable estimates of costs and profit can be allocated, the Residual Analysis becomes the best indicator of value to a merchant builder for a specific product. The analysis uses an estimated average base sales price for a specific product, then deducts the various costs including direct costs of construction, marketing, taxes and overhead, as well as the required profit margin to attract an investor in light of the risks and uncertainties of the project. This analysis is most helpful when significant lot and or view premiums are not present. When negotiating land price, builders typically will consider the value of lot premiums when they are significant, but typically do not 59 ~).- ~C.ENDA ITEM NO. = ~ '!Mfift)[f;3J 13 J)F ~ ~ ~ "-"" r'c give the premiums full consideration. When a downturn in the market occurs or a slight stall in a sales program, premiums are typically the first to be negotiated away. End-product Sales Prices The analysis uses the average base sales price without lot premiums. Our estimate of sales price includes a review of the subject's current sales prices as reported by Western Pacific Housing as of February 2006. Sales concessions of approximately $20,000 have been deducted from the average base price. Direct Development Costs We have interviewed local builders in the . Inland Empire market area for estimates of direct construction costs for the proposed products. We have-compared this information with in-house data on actual deyeloprnEmts throughout Riverside County and adjacent counties. Based on our ul'lderstandingof the proposed quality of construction, home size and functional utility, the estimates used appear reasonable /""" and supportable. Indirect construction costs have been estimated at 4% of sales price, which is found to be an industry standard used forthis analysis. General and Administrative General and administrative costs are estimated at 3% of retail value. This category covers such expenses as administrative, professional fees, HOA dues, and miscellaneous costs. This estimate is typical and consistent with the market. Marketing and Warranty Marketing and sales expenses plus warranty costs are estimated at 5% of retail value. This category covers such expenses as advertising and sales commissions and home warranties. This estimate is typical and consistent with the market. /""" 60 5) ACENOArrEMNOo- ~~ pAGE~OF-- Developer Profit The line item for profit reflects the required margin to attract an investor in light of the risk and uncertainties of the specific project. This analysis assumes a finished lot and no on-site construction. Therefore, additional risk of development is unknown. However, given the current residential market, and demand for the proposed project, the risk of development is less. ~ Based on surveys of builders and developers, profit requirements are typically between 7% and 10% of revenues, with occasional responses down to 6% and as high as 12%. These profit estimates are for projects that can be constructed and sold out in a two year period. Higher profits can be required for longer construction/sellout periods and riskier projects. Lower profits can be accepted in inexpensive land costareas where homes sell quickly. The subject property is prQPOsedifor attached product with a density of 11:1: units per acre, in an area of goodidemandin~iverside County. Based on a review of the competing subdivisions,a safe~ rate of 8:1: units per month is sustainable. Therefore, we have estimated a 8% JiOe item forprofit. ~ Interest During Holding Period A typical allowance for financing during the holding period has been between 4% and 6%. Due to the lenders requiring a higher equity participation from the builders, the allowance for profit has been decreased. Based on recent interviews with builders in the subject's market area, we have chosen a 5% deduction for financing during the holding period. Site Costs Because this analysis residuals to a finished lot condition, deductions for costs to bring to a finished lot condition are not required to estimate the finished lot values. The following page illustrates the Static Residual Analysis for the average size unit of the proposed project within CFD No. 2005-6. ~ 61 - ?:>?- f\CENOA \iE~~~l 3. ~ ~ PAGE~OF ,...... Vista del Lago A verage for 3 Proposed Floorplans Less: Concessions Net Average Base Price r" Average Retail Value of Improvements Average Dwelling Size (Sq. Fe.et) Direct Building Cost Per Sq. Ft. Indirect Construction Costs General & Administrative Costs Marketing.and Warranty Costs Builder's Profit Interest During Holding Period Costs to bring to. Finished Lot Finished Lot Value Estimate r-- Plan 1 2 3 Average 1,351 $70.00 4.00% 3.00% 7.00% 8.00% 5.00% 1,141 1,386 1,527 1,351 Say $287,000 $94,593 $11,480 $8,610 $20,090 $22,960 $14,350 None $114,917 $115.000 Base Price $272,000 $312,000 $338.000 $307,333 $307,000 $20.000 $287,000 Land $212.38 Ratios (Per sq. ft.) Finished Lot 0.40 AGENDA ITEM NO. 3> i ~ PAGE~OF ~ . Finished Lot Value by Static Residual Analysis The indicated finished lot value for the 144 proposed attached units is $115,000. ......, Conclusion of Finished Lot Values The following table summarizes the conclusions of finished lot value by the Direct Comparison Approach, the Static Residual Analysis and the concluded finished lot value. ......, ......, 63 3;?- ;t\GENOA ITEM NO. Of 3~~ p~~ .... -- .~ .. .". ~..,..,..........~ _" __,t " ."" VALUATION CFD No. 2005-6 is being developed by Western Pacific Housing. The CFD consists of one attached project. The project is proposed for 144 attached units. The homes will range in size from 1,141 to 1,527 square feet with current base prices proposed to range from $272,000 to $338,000, with concessions of up to $20,000. Three floor plans will be offered. The development has been taking sales reservations since February 2005 and has met with good response from the market. Valuation of Land Proposed for 24 Attached Dwellina Units The subject project has 24 attached sites in a blue-top condition. Based on our analysis of the four recent merchant builder lot sales and the static residual analysis, we concluded on a finished lot value of $115,000 per attached site. However, the lots require additional costs, including remaining fees and sidewalks to get to a finished condition. All of these costs, provided by the bl:lilder,and the anticipated bond "" reimbursements are given consideration when concluding at a total value for CFD No. 2005-6. The 24 finished sites in CFD No. 2005-6 have an estimated value of $2,760,000 as indicated below. 24 sites X $115,000 = $2,760,000 $2,760,000 Say ,,-.. Valuation Model Homes As previously discussed, CFD No. 2005-6 is improved with three model homes under construction. The models are framed and considered 50% complete. The Vista del Lago development has been in a sales program since February 2005 and has met with good response from the market. Since opening for sales, 92 homes have sold which indicates an absorption rate of between 7 and 8 units per month. Sales have been slowed by the long site construction time frame. The model homes are valued based on the currently achieved average base sales price for each project. Vista del Lago has an average base price of $287,000, net of the concessions. 64 I\CENDA IrE"" NU. 3 r ~ PACE..aLX-OF ~ ~~ . '-tII Value of the 117 Dwellina Units Under Construction There are 117 dwelling units under construction at the Vista del Lago development as of the date of value. As of the date of value, the units range in completion from poured slabs to framed homes. The units under construction were valued based on our inspection of the property. An estima c J'Jlpletion (stated as a percent) of each unit as of the date of value is used>tQValue nits. The estimate of completion has been arrived at with input from:rnerGhCi)lnt ers and review of numerous cost estimates. That percent is then applie(!fitothe estimated average base sales price for each project as of the date of value. Thi ree dwelling units are framed and estimated to be 50% complete. The 84d\\ielling u '.. proved with slabs are estimated to be 45% complete. Please refer to the ing t e that summarizes the 117 units under construction and .estimated value. Sa an equal distribution of floor plans for the three plans available, the average bas.esales price is $287,000, net of concessions. ~ Value Conclusion CFD.No.20.05-6 The estimated "As Is" value for the land under site and unit construction, and considering the costs to complete the site construction at $4,000,000 and the proceeds of $3,092,800 from this CFD, is $17,867,400, rounded to $17,800,000. Please refer to the following table which summarizes the values of the land and units in various stages of construction, costs to complete and estimated bond proceeds from CFD No. 2005-6. 65 '-tII AGEN~~;to~~ ~ 24 sites X $115,000 per finished lot = 3 Model Homes Under Construction = 117 Production Homes Under Construction = Total assumes completed site construction = Less Costs to Bring to Finished Lot = Plus Proceeds from CFD No. 2005-6 = Estimated "as is" Value for CFD No. 2005-6 Say /'""", ,.- 66 $ 2,760,000 $ 430,500 $15.584.100 $18,774,600 ($ 4,000,000) $ 3.092.800 $17,867,400 $17,800,000 AGENDA IlEM NO. !:> f.-st;; PAOE~OF- VALUATION CONCLUSION ~ Based on the investigation and analyses undertaken, our experience as real estate appraisers, and subject to all the premises, assumptions and limiting conditions set forth in this report, the following opinions of Market Value are formed as of February 15, 2006. SEVENTEEN MilLION EIGHT HUNDRED THOUSAND DOLLARS $17,800,000 "'-' ......" 67 ftO~ (\GENl'A ~ ? J 'oF3~~ p~~ "..... CERllFICA liON We hereby certify that during the completion of this assignment, we personally inspected the property that is the subject of this appraisal and that, except as specifically noted: We have no present or contemplated future interest in the real estate or personal interest or bias with respect to the subject matter or the parties involved in this appraisal. To the best of our knowledge and belief, the statementsoffact contained in this appraisal report, upon which the analyses, opinions.> and conclusions expressed herein are based, are true and correct. Our engagement in this assignment was not contingent upon developingior reporting predetermined results. The compensation is not contingent upon the reporting of a predetermined value orditection in valu~ that favors the cause of the client, the amount of theVElIue estimate, the attainment of a stipulated result, or the occurrence otasubsequentevent. /"'" The appraisal assignment wasn(i)t based onarequestedminimum valuation, a specific valuation, or the apprOval of a loan. The reported analyses, opinion!>, and conclusions were developed, and this report has .been .prepared, in conformity with the requirements of the Code of Professional Ethics & Standardsofiprofessional Appraisal Practice of the Appraisal Institute, which. include . the Uniform Standards of Professional Appraisal Practice. As of the date of this report, James B. Harris has completed the requirements of the continuing education program of the Appraisal Institute. The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and are our personal, unbiased professional analyses, opinions, and conclusions. No one provided professional assistance to the persons signing this report. The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. In furtherance of the aims of the Appraisal Institute to develop higher standards of professional performance by its /"'" 68 ~)-- ACENDA lTEM NO. 3~ (;, PACf,:!/l,?/OF ~ Members, we may be required to submit to authorized committees of the Appraisal Institute copies of this appraisal and any subsequent changes or modifications thereof. ~ Respectfully submitted, Berri J. Cannon Harris Vice President AG009147 James B. Harris, MAl President AG001846 . .~ 69 ...." AGENDA ITEM tlO. .1t~ rp~E::/l'; OF "....... ADDENDA "....... ,.-. AGENDA'TEM NO. 3) PPNE~Of3""~ @ M;JJ [l, 0 f? 0 r{;;JJ u 0 @!1I.L~ HARRIS REAL TV APPRAISAL.. 5100 Birch Street,Suite.200 Newport Beach, CA 92(i)69 (949) 85'1-1227 jUjENDA ITEM NO.. ~..: p~_~7...~ OF____ - . ...."" ......." ....., ".-.. QUALIFICATIONS OF JAMES B. HARRIS, MAl PROFESSIONAL BACKGROUND Actively engaged as a real estate analyst and consulting appraiser since 1971. President and Principal of Harris Realty Appraisal, with offices at: 5100 Birch Street, Suite 200 Newport Beach, California 92660 Before forming Harris Realty Appraisal, in 1982, was employed with Real Estate Analysts of Newport, Inc. (REAN) as a Principal and Vice President. Prior to employment with REAN was employed with the Bank of America as the Assistant Urban Appraisal Supervisor. Previ6usly,.wasemployed by the Verne Cox Company as a real estate appraiser. PROFESSIONAL ORGANIZATIONS ".-. Member of the Appraisal Institute, with MAl designation No. 6508 Director, Southern California Chapter - 1998, 1999 Chair, Orange County Branch, Southern CalifomiaOhapter -1997 Vice-Chair, Orange County Branch, SouthemCaliforrliaChapter -1996 Member, Region VII Regional Governing Committee -1991 to 1995,1997, 1998 Member, Southern California Chapter Executive Committee -1990, 1997 to 1999 Chairman, Southern California Chapter Seminar Committee -1991 Chairman, Southern California Chapter Workshop Committee -1990 Member, Southern California Chapter Admissions Committee - 1983 to 1989 Member, Regional Standards of Professional Practice Cornmittee -1985 - 1997 Member of the International Right-of-Way Association, Orange County Chapter 67. California State Certified Appraiser, Number AG001846 EDUCA TIONAL ACTIVITIES B.S., California State Polytechnic University, Pomona, 1972. Successfully completed thefollowing courses sponsored by the Appraisal Institute and the Right-of- Way Association: Course I-A Course I-B Course II Course IV Course VI Course VIII Course SPP Course 401 Principles of Real Estate Appraisal Capitalization Theory Urban Properties Litigation Valuation Investment Analysis Single-Family Residential Appraisal Standards of Professional Practice Appraisal of Partial Acquisitions .....--. Has attended numerous seminars sponsored by the Appraisal Institute and the International Right- of-Way Association. AGENDA ITEM NO._ 3k"(I.: PAGE~1iA_OF TEACHING AND LECTURING ACTIVITIES Seminars and lectures presented to the Appraisal Institute, the University of California-Irvine, UCLA, California Debt and Investment Advisory Commission, Stone & Youngberg and the National Federation of Municipal Analysts. ~ MISCELLANEOUS Member of the Advisory Panel to the California Debt and Investment Advisory Commission, regarding Appraisal Standards for Land Secured Financing (March 2003 through June 2004) LEGAL EXPERIENCE Testified as an expert witness in the Superior Court of the County of Los Angeles and the County of San Bernardino and in the Federal Bankruptcy Courts five times concernil'lgthe issues of Eminent Domain, Bankruptcy, and Specific Performance. He has been deposedl'lllmerbu~times concerning these and other issues. This legal experience has been for both Plaintiff and RespondElnt clients. He has prepared numerous appraisals for submission to the IRS, without having values()verturned.He has worked closely with numerous Bond Counsel in the completion of 100 Land Secured Municipal Bond Financing appraisals over the last five years. SCOPE OF EXPERIENCE Feasibility and Consultive Studies Feasibility and market analyses, including the use.of complJter-basedeconomic models for both land developments and investment properties such as shopping cElnters, indu$trial parks, mobile home parks, condominium projects, hotels, and residentiaLprojects. Appraisal Projects Has completed all type.~ofapPf<.lis.alassignments from San Diego to San Francisco, California. Also has completed out-of-stateappraiSala$~ignmentsinArizona, Florida, Georgia, Hawaii, Nevada, New Jersey, Oklahoma, Oregon, and Washington. ~ Residential Residential subdivisions, condominiums, planned unit developments, mobile home parks, apartment houses, and single-family residences. Commercial Office buildings, hotels. motels, retail store buildings. restaurants, power shopping centers, neighborhood shopping centers, and convenience shopping centers. Industrial Multi-tenant industrial parks, warehouses. manufacturing plants, and research and development facilities. Vacant Land Community Facilities Districts, Assessment Districts, master planned communities. residential, commercial and industrial sites; full and partial takings for public acquisitions. ...IIl\.{O. :; J- ACENOJ.\.1TE.. IVI 1'.'_ _~ """'" >2"1'1 OF ~ .- fJ'f:if;';'I(;~ ....., ,,-., QUALIFICATIONS OF BERRI J. CANNON HARRIS PROFESSIONAL BACKGROUND Actively engaged as a real estate appraiser since 1982. Vice President of Harris Realty Appraisal, with offices at: 5100 Birch Street, Suite 200 Newport Beach, California 92660 Before joining Harris Realty Appraisal was employed with InterstCite Appraisal Corporation as Assistant Vice President. Prior to employment with Int~rstateAppralsal was employed with Real Estate Analysts of Newport Beach as a Research Assistant. PROFESSIONAL ORGANIZATIONS Candidate of the Appraisal Institute for the MAl designation. Co-Chair, Southern California Chapter HospitalityCommittee-tQ94 - 1998 Chair, Southern California Chapter Research Committee - 1992,1993 /""'"' Women in Commercial Real Estate, Member Orange County Chapter. Chair, Special Events -1998, 1999,2000,2001,2002,2003 Second Vice-President - 1996,1Q97 Treasurer - 1993, 1994, 1995 Chair, Network Luncheon Committee -1991,1992 California State Certified Appraiser, NumberAG009147 EDUCA TlONAL ACTIVITIES B.S.B.A., University of Redlands, Redlands, California Successfully completed the following: courses sponsored by the Appraisal Institute: Principles of Real Estate Appraisal Basic Valuation Procedures Capitalization Theory and Techniques - A Capitalization Theory and Techniques - B Report Writing and Valuation Analyses Standards of Professional Practice Case Studies in Real Estate Valuation Has attended numerous seminars sponsored by the Appraisal Institute. Has also attended real estate related courses through University of California-Irvine. /"'"""' :!/J.- ACENDA \1EM NO._ 3t..f;; . PPNEf/1$-Of LECTURING ACTIVITIES Seminars and lectures presented to UCLA, California Debt and Investment Advisory '-"" Commission, and Stone & Youngberg. MISCELLANEOUS Member of the Advisory Panel to the California Debt and Investment Advisory Commission, regarding Appraisal Standards for Land Secured Financing (March 2003 through June 2004) SCOPE OF EXPERIENCE Appraisal Projects Has completed all types of appraisal assignments from San Diego to San Francisco, California. Also has completed out-of-state appraisal assignments in Arizona and Hawaii. Residential Residential subdivisions, condominiums, plan parks, apartment houses, and single-familyre$i unit develgpments, mobile home ces. Commercial Office buildings, retail store retail centers. restaurcll"lts, neighborhood-shopping centers, strip '-'" Industrial Multi-tenant industrial parks, warehouses, manufacturing plants, and research and development facilities. Vacant Land Residential. sites, commercial sites, industrial sites, large multi-unit housing, master planned unit developments,<and agricultural acreage. Specializing in Community Facilities District and Assessment District appraisal assignments. '-'" y ~(jENOA \1E: :- OF~ pta~ PARTIAL LIST OF CLIENTS .~ Lending Institutions Bank of America Bank One Commerce Bank Downey S&L Assoc. Fremont Investment and Loan First Los Angeles Bank Institutional Housing Partners NationsBank Preferred Bank Santa Monica Bank TokaiBank Union Bank Universal S&L Assoc. Wells Fargo Bank Public Agencies .~ Army Corps of Engineers California State University Caltrans City of Aliso Viejo City of Beaumont City of Corona City of Costa Mesa City of Encinitas City of Fontana City of Fullerton City of Hemet City of Hesperia City of Honolulu City of Huntington Beach City of Indian Wells City of Irvine City of Lake Elsinore City of Loma Linda City of Los Angeles City of Moreno Valley City of Newport Beach City of Oceanside City of Palm Springs City of Perris City of Riverside City of San Marcos City of Tustin City of Victor\lille County of Orange County of Riverside County of San Bernardino Eastern Municipal W~tE~r District Orange County Sheriff'si[)epartment Ramona Municipal Water'District Rancho Santa Fe Comm. Services District Capistrano Unified School District Hemet Unified School District Hesperia Unified School District Romoland School District Saddleback Valley Unified School District Santa Ana Unified School District Val Verde Unified School District Yucaipa-Calimesa Unified School District Developers and Landowners DMB - Ladera Foothill Ranch Company Hon Development Co. Irvine Apartment Communities The Irvine Company. Lennar Homes Rancho Mission Viejo Santa Margarita Company Shapell Industries Sterling Development Law Firms Arter & Hadden Bronson, Bronson & McKinnon Bryan, Cave, McPheeters & McRoberts Richard Clements Cox, Castle, Nicholson Gibson, Dunn & Crutcher Hill, Farrer & Burrill McClintock, Weston, Benshoof, Rochefort & MacCuish Palmiri, Tyler, Wiener, Wilhelm, & Waldron Sonnenschein Nath & Rosenthal Strauss & Troy Wyman, Bautzer, Rothman, Kuchel & Silbert ",...-. ?:;') AGENDA ITE~Cto~ pAOE, ~_.._ _."..i""""'~'.~.. ~~~;;t:.1ijjJ;:~-~'..> ......, HARRIS & ASSOQI~TES TAX EADS(PORTION) ~ ~?- ~ I-CEtlOJl. ~LOf'; ~~ p~ "..-.. SITE DEVELOPME.NTCOST SUMMARY "..-.. ".... , 3?- AGENDA JTEM NO. 3~ ~ PAGE ~2- OF APPENDIX D RATE AND METHOD OF APPORTIONMENT '-" '-" D-1 ::) ?- '-" ACENOA rrEM NO._ :p ,,~ pPNf.];3~J>F /"'" APPENDIX E FORMS OF CONTINUING DISCLOSURE AGREEMENTS /"'" .~ E-I AGENDA IlEM NO _OF~{;~ PNJi~ APPENDIX F PROPOSED FORM OF BOND COUNSEL OPINION ......, City of Lake Elsinore 130 S. Main Street Lake Elsinore, California 92530 $3,365,000 City of Lake Elsinore Community Facilities District No. 2005-6 (City Center Townhomes) Special Tax Bonds, 2006 Series A Members of the City Council: We have acted as bond counsel to the City of Lake Elsinore (the "City") in connection with the issuance of the $3,365,000 aggregate principal amount of City of Lake Elsinore Community Facilities District No. 2005-6 (City Center Townhomes) Special Tax Bonds, 2006 Series A (the "Bonds"), pursuant to the provisions of Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5, Part 1, Division 2, Title 5, or the Government Code of the State of California (the "Act") and pursuant to a Fiscal Agent Agreement, dated as of April 1, 2006 (the "Fiscal Agent Agreement"), by and between the City of Lake Elsinore Community Facilities District No. 2005-6 (City Center Townhomes) (the "District") and ......, Union Bank of California, N.A., as fiscal agent (the "Fiscal Agent"). We have examined the Act and such certified proceedings and other papers as we deem necessary to render this opinion. As to questions of fact material to our opinion, we have relied upon representations of the District contained in the Fiscal Agent Agreement and in the certified proceedings and certifications of public officials and others furnished to us, without undertaking to verifY the same by independent investigation. Based upon the foregoing we are of the opinion, under existing law, as follows: 1. The Fiscal Agent Agreement has been duly and validly authorized, executed and delivered by the District and, assuming such Fiscal Agent Agreement constitutes the legally valid and binding obligation of the Fiscal Agent, constitutes the legally valid and binding obligation of the District enforceable against the District in accordance with its terms. 2. The Bonds constitute valid and binding limited obligations of the District as provided in the Fiscal Agent Agreement, and are entitled to the benefits of the Fiscal Agent Agreement. 3. The Bonds are secured by a valid pledge of the Special Taxes (as defined in the Fiscal Agent Agreement) and all moneys in the funds and accounts under the Fiscal Agent Agreement, including all amounts derived from the investment of such moneys, subject to the application thereof on the terms and conditions as set forth in the Fiscal Agent Agreement. 4. The Internal Revenue Code of 1986, as amended (the "Code") sets forth certain requirements that must be met subsequent to the issuance and delivery of the Bonds for interest thereon to be and remain excluded from the gross income of the owners thereof for federal income tax purposes. Noncompliance with such requirements could cause the interest on the Bonds to be included in gross F-l ......, AGENDA ITEM NO.. ~ ;r~ PAOE...3~ OF~- - r-- income retroactive to the date of issue of the Bonds. The District has covenanted in the Fiscal Agent Agreement to maintain the exclusion of interest on the Bonds from the gross income of the owners thereof for federal income tax purposes. In our opinion, under existing law, interest on the Bonds is exempt from personal income taxation of the State of California and, assuming compliance with the aforementioned covenant, interest on the Bonds is excluded pursuant to section I03(a) of the Code from the gross income of the owners thereof for federal income tax purposes. We are further of the opinion that under existing statutes, regulations, rulings and court decisions, the Bonds are not "specified private activity bonds" within the meaning of section 57(a)(5) of the Code and, therefore, the interest on the Bonds will not be treated as an item of tax preference for purposes of computing the alternative minimum tax imposed by section 55 of the Code. The receipt or accrual of interest on Bonds owned by a corporation may affect the computation of the alternative minimum taxable income, upon which the alternative minimum tax is imposed, to the extent that such interest is taken into account in determining the adjusted current earnings of that corporation (75 percent of the excess, if any, of such adjusted current earnings over the alternative minimum taxable income being an adjustment to alternative minimum taxable income (determined without regard to such adjustment or to the alternative tax net operating loss deduction)). Except as stated in the preceding two paragraphs, we express no opinion as to any federal or state tax consequences of the ownership or disposition of the Bonds. Furthermore, we express no opinion as to any federal, state or local tax law consequences with respect to the Bonds, or the interest thereon, if any action is taken with respect to the Bonds or the proceeds thereof predicated or permitted upon the advice or approval of other bond counsel. No opinion is expressed herein on the accuracy, completeness or sufficiency of the Official Statement or other offering materials relating to the Bonds. ~ The rights of the owners of the Bonds and the enforceability of the Bonds and the Fiscal Agent Agreement may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights heretofore or hereafter enacted and may also be subject to the exercise of judicial discretion in appropriate cases. Our opinions are based on existing law, which is subject to change. Such opinions are further based on our knowledge of facts as of the date hereof. We assume no duty to update or supplement our opinions to reflect any facts or circumstances that may thereafter come to our attention or to reflect any changes in any law that may thereafter occur or become effective. Moreover, our opinions are not a guarantee of result and are not binding on the Internal Revenue Service; rather, such opinions represent our legal judgment based upon our review of existing law that we deem relevant to such opinions and in reliance upon the representations and covenants referenced above. Respectfully submitted, ".-.. F-2 AGENDA ITEM NO._.. ~-t~ " lPAOE~OF ~ / ,'-'" CITY OF LAKE ELSINORE REPORT TO CITY COUNCIL TO: MA YOR AND CITY COUNCIL FROM: ROBERT A. BRADY, CITY MANAGER DA TE: APRIL 11, 2006 SUBJECT: CONCEPTUAL PLAN OF THE PROPOSED BOYS AND GIRLS CLUB LOCATED WITHIN THE ALBERHILL RANCH SPORTS PARK OF THE MURDOCK ALBERHILL SPECIFIC PLAN APPLICANT: CASTLE AND COOKE ALBERHILL RANCH LLC, 17600 COLLIER AVENUE, SUITE C 120, LAKE ELSINORE, CALIFORNIA 92530 LOCATION ,-... The Boys and Girls Club building will be located within the proposed 22 acre Alberhill Ranch Sports Park. The Park site is east of Lake Street and south of Nichols Road. One access driveway will be located off of Lake Street and two driveways will be available off of Nichols Road (APN 389-020-034 & 389-080-002). REQUEST The applicant requests approval of the Conceptual Plan of the Boys and Girls Club. PROJECT DESCRIPTION Review is for the conceptual plan ofthe Boys and Girls Club building that is part of the Alberhill Ranch Sports Park complex. The building is a 5,520 square foot brick structure with tile roof. The interior space is divided into several multi-purpose spaces including a 676 square foot Recreation Room, a 603 square foot Teen Center, a 1,020 square foot ArtlMulti-purpose Room, an 866 square foot Homework/Computer Room, Staff and Director's Offices and restroom facilities. ,.-. ACENDA ITEM NO.~ PACE.j ~ REPORT TO THE CITY COUNCIL APRIL 11, 2006 Page 2 of2 "'-'" The 22 acre Sport Park Complex will include an approximately 15,000 square foot recreation center, three (3) soccer fields, two (2) additional active play areas, one of which will be used as ajoint use area between the Sports Park and a future neighboring school. Ball Courts, Tot Lot and Restroom/Concession areas complete the proposed complex. RECOMMENDA TION Staff recommends that City Council approve the proposed Boy and Girls Club building located within the future Alberhill Ranch Sport Park. PREPARED BY: ROLFE PREISENDANZ, DIRECTOR OF COMMUNITY DEVELOPMENT APPROVED FOR AGENDA BY: '-'" ATTACHMENTS 1. Vicinity Map. 2. Color Exhibits - "Boys & Girls Club - Option 1" dated October 28, 2005. ....." ACENO~ fTEM NO. f3_::J . -;2 ~ .-__ . OF -5 - SHEET ! OF ! :-:-:.:-:-:::-:-:-:::::::-:-:-:-::: ~ J 5 FWr: LOCA-rl 0 N . . . . VTiM' . 08/014' . .. . . .. . . .. . L.I L ........ "...-.. ~G\" ?\y; w N.T.5o VICINITY MAP PREPARED BY: Nfl/II ENGINEERS 1880 %~~Cl'&i~~ilu~~N.Cc~~sr:2~~~37~f~frL2130 EXHIBIT FOR VICINITY TRACT 28214-4 "...-.. DATE DRAWN BY CHECKED BY J.N. 01-03-06 JG RLW 03.754.1.33 Ii: IWI754\D1m175'",;cini(y.tfWg ACENDA ITEM NO. ~ PACE 3 oF3 /"""'" CITY OF LAKE ELSINORE REPORT TO CITY COUNCIL TO: MAYOR AND CITY COUNCIL FROM: ROBERT A. BRADY, CITY MANAGER DA TE: APRIL 11,2006 SUBJECT: AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, AMENDING SECTIONS 2.46.030 THROUGH 2.46.050 OF THE LAKE ELSINORE MUNICIPAL CODE RELATING TO THE TERM OF OFFICE OF THE PUBLIC SAFETY COMMISSION BACKGROUND /'"" The Lake Elsinore Public Safety Advisory Commission was first established in 1984. By 1988, the Commission was inactive. On March 23,2004, the City Council adopted Ordinance No. 1116 which reestablished the Public Safety Advisory Commission. At that time, the Council continued the established practice of appointing PSAC members to a two year term. The terms of three PSAC members will expire in July 2006. At the March 28, 2006 regular City Council meeting, the City Council considered an item to commence the application process for filling those three expiring appointments. The City Council continued the agenda item and directed the City Attorney to prepare a draft ordinance that would provide that future PSAC members serve a four year term. In addition, the Commission's schedule for selection of officers was dictated by the Municipal Code to occur in December rather than to coincide with Commission terms. Finally, the existing membership and appointment provisions are inconsistent with recent City Council direction and should be revised to comply with the proposed City Council Policy 200-5A governing Commission appointments. ",-. PC~N.OA ITEM NO. I 34 ~ .-3:- REPORT TO CITY COUNCIL APRIL 11,2006 PAGE 2 ~ DISCUSSION The attached draft ordinance presents two alternatives to increasing the PSAC term to four years while maintaining a staggered appointment process. "Alternative A" provides that the three PSAC members' terms will expire as scheduled this year and applications will be accepted for an initial three-year term commencing on July 1,2006 and expiring on June 30, 2009. The two appointments set to expire in July 2007 remain unchanged. At that time, the newly appointed Commissioner's shall serve a four-year term from July 1,2007 though June 30, 2011. While there will be back to back appointments this year and in 2007, the ultimate result will be a two year interval between appointments. "Alternative B" provides that the three PSAC members' terms set to expire this year will be extended three years until 2009 . Subsequent terms will be four years. The two appointment set to expire in July 2007 remain unchanged. Again, this will ultimately result in a two year interval between appointments. ~ In addition, the proposed Ordinance removes the Municipal Code provisions in Section 2.46.040 dictating the schedule for Commission selection of officers. Instead, those provisions will be addressed in City Council Policy 2-500A and allow for selection of officers in July of each year. Finally, the membership and appointment/removal provisions of Sections 2.46.030 and 2.46.040 have been revised to be consistent with the membership and appointment procedures established by City Council Policy 2-500A. The proposed changes to the LEMC are shown on Exhibit "A" attached. FISCAL IMPACT None. ....., AC&NOA nBt NO. .-~4 PACE 9 OF~ ,........ REPORT TO CITY COUNCIL APRIL 11,2006 PAGE 3 RECOMMENDA TION It is recommended that the City Council: 1. Consider the alternatives suggested and/or consider additional alternative mechanisms with respect to the implementation of four year terms for PSAC members; and 2. Approve the first reading of the attached Ordinance No. Il1eoextending the term ofPSAC members and making other clarifying changes. PREPARED BY: BARBARA ZEID LEIBOLD, CITY ATTORNEY APPROVED FOR AGENDA LISTING: /""'" ,,--.. AGENDA,', ,ITEM NO.~ :"'~~. -3..=ciF-=r EXHIBIT A REDLINED PROVISIONS SHOWING PROPOSED CHANGES TO SECTIONS 2.46.030 THROUGH 2.46.050 OF THE LAKE ELSINORE MUNICIPAL CODERELATING TO THE PUBLIC SAFETY ADVISORY COMMISSION ...."" SECTION 2.46.030 - MEMBERSHIP. The Public Safety Advisory Commission shall consist of five members",:vho _sh~-'Ln()t. ~~_<?ftic,it~I~. g~. ~rnp'lo'y~~~ _()(!h~,q!y_._____.. m/..... Members of the Public Safety Advisory Commission shall: (I) reside within the City of Lake Elsinore; or (2) be an owner of a business that is established and currently licensed inside the City of Lake Elsinore. Members shall be subject to a routine background check to be administered by the Police Department. { Deleted: . / Deleted: Members SECTION 2.46.040 - APPOINTMENT - REMOVAL. The .[!1embers of the Public ._ <.,- Deleted: eacb~ber ~ Safety Advisory Commission shall be appointed by Jhe}lav()r_\~ftIijll~:~Qi?r~y~C~(a:'::.' .A Deleted: vote __ _ ~ maioritv of the City Council and may be removed bv the Ma\Jor at hislher pleasure .' :>1 Deleted: Upon~creationtheMayor I . .J. J. , :.' sball select the Chairman of the ! but subject to the approval by the majority ..Prthe.l1leJl1l:>~rs.()ftJ1~qty.Gg~c.iILmmH// commbeissiobnalanlthdthe_~~mmlissiothn V' II mem rs s ereiUU:;1 se eet e lce- Cbairman. The offices of Cbairman and i Vice-chairman sbaD nm through . December 31, 2004, atwbicb time the Cbairman and Vice-Chairman shaD be selected by a majority vote of the membership of the Commission. A Deleted: The Members " . b Deleted: two .[:xcept as 'p1:o:vi~ed. herein.. themen1l:>~r? ()f~l1~.Pu.blic. S~fe~. A~yi.s~ry .C()~~~~~i().J?____ d' .:-.::- ~Ieted:, said two year ._ __1 shall be appolOted for a term of.;foLlr y~ars... ~ac,h term shall co~~~n(;~.on !\lly.I.<>L <.... Deleted: Those members of the Public the respective ~ear in which app~inted. ;\Il1~ITlb.er'sterl1lth~tc.o111lTl~(lC~s.()fl.ruly.l.. . ~t;%~~-:;~ca':n':::~~e 'j"'-' 2006 shall be for three veal'S until June 30. 2009. A members term that commenced until July 1.2006, exceptfortbose ! an Julv I 2005 shall serve out such existing term until June 30. 2007. Thereafter, all Commissioneninitially sen:mg in the , "" capacIty of Cbamnan and Vlce- appointments shall be for a four-year tem1. Cbairman, wbose initial terms sball nm until July 1,2005. All members are subject to potential reappointment ; pursuant to Section 2.46.040. ! .{~Iet!!~~.!!e Memb"'!.___ _~~ ./{ Deleted: two J ,E,x.ce_pt ,as. J?rovicie.d.11~r~i 11' tI1':-'-rle!11~?~r~,()f~11~ .J>\l~ljc:. ~~fety. A~y:i~()f)'_g()!!1~~~~~o_n.., ~_ ,/.'<' (~~ted~~ two year l shall be appointed for a term of.;fo~.t:Y~l'l!s..J::ilcI1Jerrnsh~llC()~~~~Il~~~0~J\lIYJ.()L:/ ..-f Deleted: .Thosemem~~ofthe.Public i the respective year in which apP?inted. .,1.r!1~J11~~(ste!nlJ~~t~OUJcI_()th~_~i.s.e~~~'p}~!~~/-' ~t;%~:;:;~;a':n'::~~:~~e I on June 30.2006 shall serve until June 30, 2009. A member s term that commenced tuntilJUIy 1,2006, except for those i ~ . .. . . Commissioners initially serving in the I on Julv ]. 200:) shall serve out such eXlstmg term until June 30. 2007. Thereafter. all capacity of Chairman and Vice- i armointments shall be for a tour-year tenn. Chainnan,whoseinitialtermsshaUnm i "'''' --~---_. until July 1,2005. All members are : subject to potential reappointment i pursuant to Section 2.46.040. J SECTION 2.46.050 - TERM OF OFFICE. AL TERNA TIVE A i I 1 J t AL TERNA TIVE B ...."" ACENDAnatNO.~ PAGE. 4 ~ ORDINANCE NO. /17f:> /"'"' AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, AMENDING SECTIONS 2.46.030 THROUGH 2.46.050 OF THE LAKE ELSINORE MUNICIPAL CODE RELATING TO THE MEMBERSHIP, APPOINTMENT AND TERM OF OFFICE OF THE PUBLIC SAFETY COMMISSION WHEREAS, the City of Lake Elsinore first established a Public Safety Commission in 1984; and WHEREAS, on March 23, 2004 the Lake Elsinore City Council adopted Ordinance No. 1116 revising Section 2.46 of the Lake Elsinore Municipal Code and thereby reactivating the Public Safety Advisory Commission; and WHEREAS, the City Council desires to clarify the membership and appointment provisions of Section 2.46 and to change the term of office of members of the Public Safety Advisory Commission. THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DOES ORDAIN AS FOLLOWS: /"'"' SECTION 1. Section 2.46.030 of the Lake Elsinore Municipal Code is hereby amended in its entirety to read as follows: 2.46.030 Membership. The Public Safety Advisory Commission shall consist of five members who shall not be officials or employees of the City. Members of the Public Safety Advisory Commission shall: (1) reside within the City of Lake Elsinore; or (2) be an owner ofa business that is established and currently licensed inside the City of Lake Elsinore. Members shall be subject to a routine background check to be administered by the Police Department. SECTION 2. Section 2.46.040 of the Lake Elsinore Municipal Code is hereby amended in its entirety to read as follows: 2.46.040 Appointment - Removal. The members of the Public Safety Advisory Commission shall be appointed by the Mayor with the approval of a majority of the City Council and may be removed by the Mayor at his/her pleasure, but subject to the approval by the majority of the members of the City Council. ,r-, AGENDA 111M ~......a::L= PACE._5 =-0fI~ CITY COUNCIL ORDINANCE NO. Page 2 of3 SECTION 3. Section 2.46.050 of the Lake Elsinore Municipal Code is hereby amended in its entirety to read as follows: """'" [ALTERNATIVE A] 2.46.050. Term of office. Except as provided herein, the members of the Public Safety Advisory Commission shall be appointed for a term of four years. Each term shall commence on July 1 of the respective year in which appointed. A member's term that commences on July 1, 2006 shall be for three years until June 30, 2009. A member's term that commenced on July 1, 2005 shall serve out such existing term until June 30, 2007. Thereafter, all appointments shall be for a four-year term. [ALTERNATIVE B] 2.46.050. Term of office. Except as provided herein, the members of the Public Safety Advisory Commission shall be appointed for a term of four years. Each term shall commence on July 1 of the respective year in which appointed. A member's term that would otherwise expire on June 30, 2006 shall serve until June 30, 2009. A member's term that commenced on July 1, 2005 shall serve out such existing term until June 30, 2007. Thereafter, all appointments shall be for a four-year term. """'" SECTION 4. If any provision, clause, sentence or paragraph of this Ordinance or the application thereof to any person or circumstance shall be held invalid, such invalidity shall not affect the other provisions of this Ordinance and are hereby declared to be severable. SECTION 5. If any provision, clause, sentence or paragraph of this Ordinance or the application thereof to any person or circumstance shall be held invalid, such invalidity shall not affect the other provisions of this Ordinance and are hereby declared to be severable. SECTION 6. This Ordinance shall take effect thirty (30) days after the date of its final passage. The City Clerk shall certify as to adoption of this Ordinance and cause this Ordinance to be published and posted in the manner required by law. """'" AGENDA ITEM NO. PACE, .lo 3-t OF~ CITY COUNCIL ORDINANCE NO. Page 3 of3 ",..-- INTRODUCED AND APPROVED UPON FIRST READING this 11th day of April, 2006, upon the following roll call vote: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: ABSTAIN: COUNCILMEMBERS: PASSED, APPROVED AND ADOPTED UPON SECOND READING this day of , 2006, upon the following roll call vote: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ~ ABSENT: COUNCILMEMBERS: ABSTAIN: COUNCILMEMBERS: Robert E. Magee, Mayor City of Lake Elsinore ATTEST: Frederick Ray, City Clerk City of Lake Elsinore APPROVED AS TO FORM: Barbara Zeid Leibold, City Attorney City of Lake Elsinore ",..-- AC9IOA ITEM NO. a--f PACie~<>F~ ~ CITY OF LAKE ELSINORE REPORT TO THE CITY COUNCIL TO: MAYOR AND CITY COUNCIL FROM: ROBERT A. BRADY, CITY MANAGER DATE: APRIL 11,2006 SUBJECT: PUBLIC SAFETY ADVISORYCOMMISSION RECRUITMENT AND APPOINTMENT PROCESS BACKGROUND Three terms on the Public Safety Advisory Commission (PSAC) will expire on June 30, 2006. In order to facilitate greater public involvement, the City Council has adopted procedures and policies to recruit eligible citizens who are interested in being considered for appointment to the Commission. ~ DISCUSSION When Public Safety Advisory Commission terms are about to expire, the City invites interested persons to submit an application for the Commission positions. Public notice for the positions is usually provided through the newspaper, on the City's Web site and announcements at City Council meetings. Seated PSAC members may also be eligible to apply for consideration (reappointment). The Council will typically appoint a subcommittee of two Council members to review the applications, conduct interviews and make a recommendation to the full Council. This procedure is initiated two to three months in advance of the expiration of the term in order to provide adequate time to submit applications, conduct the interview process and bring a recommendation to the City Council for consideration. FISCAL IMPACT ~ Recruitment costs should be minimal and limited to the cost of advertising for the position. ACENOA ITEM NO. ~ Pl,GE...L._OF 9- Council Staff Report Page 2 RECOMMENDATION ....." 1. Initiate the recruitment process by establishing a subcommittee to review, interview and make recommendations to the City Council for appointment of these persons to the Public Safety Advisory Commission at the June 13,2006 City Council Meeting; and 2. Direct staff to advertise for the Public Safety Advisory Commission positions and establish the application deadline as Friday, May 12, 2006. PREPARED BY: Mark Dennis, Information/Communications Manager C APPROVED FOR AGENDA LISTING: ...., ...., ""~'DA ITEM NO. 35: :2 _OF 2