HomeMy WebLinkAbout14-436 PFA Aportion of Resolutions 2015-012, 013, 014, 015, 016, 017, 018 & PFA 2015-003CITY OF LAKE ELSINORE
JOINT REPORT TO CITY COUNCIL
AND PUBLIC FINANCING AUTHORITY
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
HONORABLE CHAIRPERSON AND MEMBERS OF THE PUBLIC
FINANCING AUTHORITY
FROM: GRANT YATES
CITY MANAGER/EXECUTIVE DIRECTOR
DATE: FEBRUARY 10, 2015
SUBJECT:
Facilities Districts
Center Townhomes), No. 2006 -2 (Viscava) and No. 2003 -2 (Canyon
Recommendation
It is recommended that the City Council approve and adopt the following two (2)
Authorizing Resolutions that approve the issuance of community facilities district (CFD)
refunding bonds ( "Local Obligations ") to refinance certain outstanding bonds for two (2)
previously formed CFDs (listed below) and approve the preparation and distribution of a
preliminary official statement ( "POS ") connection with the sale of local agency refunding
revenue bonds to acquire the Local Obligations for the aforementioned CFDs.
Approval of a POS and Other Actions in Connection with a Refunding CFD Bond Sale
February 10, 2015
Page 2
Resolution No. 2015 - RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF LAKE ELSINORE, ACTING AS THE LEGISLATIVE BODY OF CITY OF
LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 95 -1 (LAKE
ELSINORE CITY CENTER PUBLIC IMPROVEMENTS), AUTHORIZING THE
ISSUANCE OF ITS 2015 SPECIAL TAX REFUNDING BONDS IN A PRINCIPAL
AMOUNT NOT TO EXCEED ONE MILLION FIVE HUNDRED THOUSAND
DOLLARS ($1,500,000) AND APPROVING CERTAIN DOCUMENTS AND
TAKING CERTAIN OTHER ACTIONS IN CONNECTION THEREWITH
2. Resolution No. 2015 - RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF LAKE ELSINORE, ACTING AS THE LEGISLATIVE BODY OF CITY OF
LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2005 -2
(ALBERHILL RANCH), AUTHORIZING THE ISSUANCE OF ITS
IMPROVEMENT AREA A 2015 SPECIAL TAX REFUNDING BONDS IN A
PRINCIPAL AMOUNT NOT TO EXCEED TWENTY -SIX MILLION DOLLARS
($26,000,000) AND APPROVING CERTAIN DOCUMENTS AND TAKING
CERTAIN OTHER ACTIONS IN CONNECTION THEREWITH
It is recommended that the City Council approve and adopt the following five (5)
Resolutions that approve the preparation and distribution of a preliminary official
statement ( "POS ") in connection with the sale of local agency refunding revenue bonds
to acquire the Local Obligations for six (6) previously formed CFDs (listed below):
Resolution No. 2015- RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF LAKE ELSINORE, ACTING AS THE LEGISLATIVE BODY OF CITY OF
LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2004 -3 (ROSETTA
CANYON), AUTHORIZING THE PREPARATION AND DISTRIBUTION OF A
PRELIMINARY OFFICIAL STATEMENT IN CONNECTION WITH THE
ISSUANCE OF REFUNDING REVENUE BONDS OF THE LAKE ELSINORE
PUBLIC FINANCING AUTHORITY AND TAKING CERTAIN OTHER ACTIONS
IN CONNECTION THEREWITH
2. Resolution No. 2015 - RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF LAKE ELSINORE, ACTING AS THE LEGISLATIVE BODY OF CITY OF
LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2005 -1
(SERENITY), AUTHORIZING THE PREPARATION AND DISTRIBUTION OF A
PRELIMINARY OFFICIAL STATEMENT IN CONNECTION WITH THE
ISSUANCE OF REFUNDING REVENUE BONDS OF THE LAKE ELSINORE
PUBLIC FINANCING AUTHORITY AND TAKING CERTAIN OTHER ACTIONS
IN CONNECTION THEREWITH
Resolution No. 2015 - RESOLUTION OF 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), AUTHORIZING THE PREPARATION AND
DISTRIBUTION OF A PRELIMINARY OFFICIAL STATEMENT IN
Approval of a POS and Other Actions in Connection with a Refunding CFD Bond Sale
February 10, 2015
Page 3
CONNECTION WITH THE ISSUANCE OF REFUNDING REVENUE BONDS OF
THE LAKE ELSINORE PUBLIC FINANCING AUTHORITY AND TAKING
CERTAIN OTHER ACTIONS IN CONNECTION THEREWITH
4. Resolution No. 2015 - RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF LAKE ELSINORE, ACTING AS THE LEGISLATIVE BODY OF CITY OF
LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2006 -2 (VISCAYA),
AUTHORIZING THE PREPARATION AND DISTRIBUTION OF A
PRELIMINARY OFFICIAL STATEMENT IN CONNECTION WITH THE
ISSUANCE OF REFUNDING REVENUE BONDS OF THE LAKE ELSINORE
PUBLIC FINANCING AUTHORITY AND TAKING CERTAIN OTHER ACTIONS
IN CONNECTION THEREWITH
5. Resolution No. 2015 - RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF LAKE ELSINORE, ACTING AS THE LEGISLATIVE BODY OF CITY OF
LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2003 -2 (CANYON
HILLS), AUTHORIZING THE PREPARATION AND DISTRIBUTION OF A
PRELIMINARY OFFICIAL STATEMENT IN CONNECTION WITH THE
ISSUANCE OF REFUNDING REVENUE BONDS OF THE LAKE ELSINORE
PUBLIC FINANCING AUTHORITY AND TAKING CERTAIN OTHER ACTIONS
IN CONNECTION THEREWITH
It is recommended the Public Financing Authority approve and adopt the following
Resolution that approves the preparation and distribution of a preliminary official
statement ( "POS ") and certain other documents and actions in connection with the sale
of local agency refunding revenue bonds to acquire the Local Obligations for eight (8)
previously formed CFDs that are identified in more detail in the attached resolution and
in Authority Resolution No. PFA- 2015 -001 previously adopted by the Authority at its
January 13, 2015 meeting:
1. Resolution No. 2015 - RESOLUTION OF THE BOARD OF DIRECTORS OF
THE LAKE ELSINORE PUBLIC FINANCING AUTHORITY, RIVERSIDE
COUNTY, CALIFORNIA, AUTHORIZING THE PREPARATION AND
DISTRIBUTION OF THE PRELIMINARY OFFICIAL STATEMENT IN
CONNECTION THE ISSUANCE OF REFUNDING REVENUE BONDS,
APPROVING CERTAIN DOCUMENTS AND TAKING CERTAIN OTHER
ACTIONS IN CONNECTION THEREWITH
Background
On August 18, 2005, Improvement Area No. 1 of the Communities Facilities District No.
2004 -3 (Rosetta Canyon) issued the $22,635,000 aggregate principal amount of Special
Tax Bonds, 2005 Series A (the "CFD 2004 -3 IA -1 2005 Bonds "). The CFD 2004 -3 IA -1
2005 Bonds were issued with a 5.20% average coupon and will be callable on
September 1, 2015 at a price of 102 %.
Approval of a POS and Other Actions in Connection with a Refunding CFD Bond Sale
February 10, 2015
Page 4
On December 20, 2005, Improvement Area A of the Communities Facilities District No.
2005 -2 (Alberhill Ranch) issued the $24,680,000 aggregate principal amount of Special
Tax Bonds, 2005 Series A (the "CFD 2005 -2 IA -A 2005 Bonds "). The CFD 2005 -2 IA -A
2005 Bonds were issued with a 5.44% average coupon and are currently callable on
any date at a price of 100 %.
On February 7, 2006, Communities Facilities District No. 2005 -1 (Serenity) issued the
$9,180,000 aggregate principal amount of Special Tax Bonds, 2006 Series A (the "CFD
2005 -1 Bonds "). The CFD 2005 -1 Bonds were issued with a 5.24% average coupon
and are currently callable on any date at a price of 100 %.
On May 4, 2006, Communities Facilities District No. 2005 -6 (City Center Townhomes)
issued the $3,525,000 aggregate principal amount of Special Tax Bonds, 2006 Series A
(the "CFD 2005 -6 Bonds "), The CFD 2005 -6 Bonds were issued with a 5.31 % average
coupon and are currently callable on any date at a price of 100 %.
On July 12, 2006, Communities Facilities District No. 2006 -2 (Viscaya) issued the
$7,290,000 aggregate principal amount of Special Tax Bonds, 2006 Series A (the "CFD
2006 -2 Bonds "). The CFD 2006 -2 Bonds were issued with a 5.37% average coupon
and are currently callable on any date at a price of 100 %.
On September 7, 2006, Improvement Area B of the Communities Facilities District No.
2003 -2 (Canyon Hills) issued the $20,570,000 aggregate principal amount of Special
Tax Bonds, 2006 Series A (the "CFD 2003 -2 IA-13 2006 Bonds "). The CFD 2003 -2 IA-13
2006 Bonds were issued with a 5.10% average coupon and are currently callable on
any date at a price of 100 %.
On September 19, 2006, Improvement Area No. 2 of the Communities Facilities District
No. 2004 -3 (Rosetta Canyon) issued the $23,460,000 aggregate principal amount of
Special Tax Bonds (Improvement Area No. 2), 2006 Series A (the "CFD 2004 -3 IA -2
2006 Bonds "). The CFD 2004 -3 IA -2 2006 Bonds were issued with a 5.22% average
coupon and are currently callable on any date at a price of 100 %.
On December 1, 2011, the Lake Elsinore Public Financing Authority issued the
$1,405,000 aggregate principal amount of Local Agency Revenue Bonds (1996 Series
E Refunding) 2011 Series B (the "CFD 95 -1 Bonds "). The 2011 Series B Local Agency
Revenue Bonds were issued with a 5.21% average coupon and are currently callable
on any date at a price of 102 %.
On November 12, 2014, the City Council provided conceptual approval of and
authorized staff to initiate steps toward refunding the above mentioned CFD bonds (with
the exception of "CFD 2005 -2 IA -A 2005 Bonds" for Alberhill Ranch and the CFD 95 -1
Bonds) and appointed the finance professionals to begin working on the refunding
program.
Approval of a POS and Other Actions in Connection with a Refunding CFD Bond Sale
February 10, 2015
Page 5
On January 13, 2015, the City Council approved the issuance of various CFD refunding
bonds mentioned above (with the exception of "CFD 2005 -2 IA -A 2005 Bonds" for
Alberhill Ranch and the CFD 95 -1 Bonds).
Discussion
In light of low bond issuance supply, declining oil prices and bond - friendly Fed policies,
municipal interest rates continue to be favorable for issuers such as the City. As the City
is already well aware, staff, along with the City's financing team, evaluated all of the
City's outstanding CFD bonds last November and determined that there were several
refinancing opportunities to realize savings. On November 12, 2014, City Council
authorized staff to proceed on taking further steps to refinance six (6) identified CFD
bonds.
In late 2014, interest rates fell further, which enabled staff to identify two (2) additional
CFD bonds (i.e. "CFD 2005 -2 IA -A 2005 Bonds" for Alberhill Ranch and the CFD 95 -1
Bonds) which could also be refinanced for additional savings. The opportunity to add
these outstanding CFD bonds into the refunding pool was predicated on continued
progress in ongoing negotiations with existing property owners (including the current
developer of Improvement Area B) for the Alberhill Ranch bonds and strong market
conditions for interest rates.
On January 13, 2015, the Authority approved the issuance of refunding bonds for these
eight (8) CFD bonds, with the caveat that the Council would take future actions to
confirm the inclusion of the other two CFD bonds (i.e. "CFD 2005 -2 IA -A 2005 Bonds"
for Alberhill Ranch and the "CFD 95 -1 Bonds ") into the Authority's refunding bond issue.
Based on further progress being made on property owner discussions and the ongoing
strong interest rate environment, staff would recommend adding these two (2) CFD
bonds to the refunding pool.
The table shown on the next page provides a savings summary for each of the CFDs
based on current market conditions (updated from the prior January 13, 2015 meeting
when savings estimates were last provided). As a reminder, savings generated for each
CFD will be used to either: (1) reduce special taxes paid by existing property owners, or
(2) complete unfinished projects that were originally approved to be funded from the
CFD. The additional savings generated from refinancing the two (2) additional CFDs
are shown in the table below at the far right (highlighted in black).
Approval of a POS and Other Actions in Connection with a Refunding CFD Bond Sale
February 10, 2015
Page 6
District No,
2003 -2 IA -B
2004 -3 IA -1
2004 -31A -2
2005 -1
2005 -6
2006 -2
I 2005 -2
95 -1
District
Canyon
Rosetta
Rosetta
Serenity
City Center
Viscaya
-
- -
Name
Hills
Canyon
Canyon
Townhomes
Outstanding
$19590,000
$21,315,000
$22,590,000
$8,330,000
$3,235,000
$7,000,000
$23,255,000
$1,165,000
Amount
PV Savings
$1,913,684
$1,444,245
$2,445,386
$947,470
$387,199
$884,781
$2,446,899
$100,714
PV Savings
9.77%
6.77%
10.83%
11.37%
11.97%
12.64%
10,52%
8.64%
%
Avg. Annual
N/A
$67,500
N/A
$22,500
$27,500
$55,000
$185,000
$5,000
Savings
Annual
Savings/
N/A
$133
N/A
$97
$191
$327
$489
$714
Parcel
Existing
Funds on
$1,047,315
$917,906
$1,946,770
$944,492
$93,647
$426,276
N/A
N/A
Hand'
Total Funds
to Be Used
$7,480,839
$1,691,134
$5,078,237
$1,465,300
N/A
N/A
N/A
N/A
On Projects
Projects to
Developer
Rosetta
Rosetta
Serenity
Be
Reimbursement
Canyon Park
Canyon
Park
Coin feted
Park
construction and surplus funds currently being held by the bond trustee for each GFU.
The Refunding Revenue Bonds will have a final maturity of 2040. In order to generate
additional capital for unfinished projects and developer reimbursements, the debt
payments will be extended on two of the Local Obligations: Canyon Hills (1 additional
year from 2036 to 2037) and Rosetta Canyon (3 additional years from 2038 to 2040).
This extension of debt service for these two (2) CFDs does not go beyond the original
CFD levy period authorized in the original rate & methods of apportionment which were
adopted by City Council at the time these CFDs were originally formed.
Based on current market conditions, the estimated interest rate for the Refunding
Revenue Bonds is expected to be about 4.2 %. The final interest rate structure will be
determined when the bonds are priced and sold. The pricing date is estimated to be in
mid - February 2015, assuming that interest rates remain attractive, and the closing date
is expected to occur by March 2015.
Documents to Be Approved
Approval of the Resolutions will authorize the execution of the following refinancing
documents for inclusion of the two (2) additional CFDs (i.e. "CFD 2005 -2 IA -A 2005
Bonds" for Alberhill Ranch and the "CFD 95 -1 Bonds):
• Local Obligation Bond Indenture (one for each CFD)
• Escrow Agreement (one for each CFD)
• Local Bond Purchase Agreement (one for each CFD)
Approval of the Resolutions will also authorize the preparation and distribution of the
final preliminary official statement ( "POS ") on behalf of the Authority and the
aforementioned CFDs.
Approval of a POS and Other Actions in Connection with a Refunding CFD Bond Sale
February 10, 2015
Page 7
• Preliminary Official Statement
Bond Counsel and the City Attorney have reviewed the attached financing documents
on behalf of the Public Financing Authority and Community Facilities Districts,
Fiscal Impact
The CFD bond refinancing program currently generates an estimated $10.5 million of
present value savings, which is equal to about 10% of the refunded bonds. These
savings figures now include Alberhill Ranch as well as the 95 -1 Bonds. Please note
that the level of savings is subject to market conditions at the time of pricing.
Prepared by: Jason Simpson
Director of Administrative Services
Approved by: Grant Yates
City Manager
Attachments:
1. Resolution No. 2015 - RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF LAKE ELSINORE, ACTING AS THE LEGISLATIVE BODY OF CITY OF
LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 95 -1 (LAKE
ELSINORE CITY CENTER PUBLIC IMPROVEMENTS), AUTHORIZING THE
ISSUANCE OF ITS 2015 SPECIAL TAX REFUNDING BONDS IN A PRINCIPAL
AMOUNT NOT TO EXCEED ONE MILLION FIVE HUNDRED THOUSAND
DOLLARS ($1,500,000) AND APPROVING CERTAIN DOCUMENTS AND
TAKING CERTAIN OTHER ACTIONS IN CONNECTION THEREWITH
2. Resolution No. 2015 - RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF LAKE ELSINORE, ACTING AS THE LEGISLATIVE BODY OF CITY OF
LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2005 -2
(ALBERHILL RANCH), AUTHORIZING THE ISSUANCE OF ITS
IMPROVEMENT AREA A 2015 SPECIAL TAX REFUNDING BONDS IN A
PRINCIPAL AMOUNT NOT TO EXCEED TWENTY -SIX MILLION DOLLARS
($26,000,000) AND APPROVING CERTAIN DOCUMENTS AND TAKING
CERTAIN OTHER ACTIONS IN CONNECTION THEREWITH
3. Resolution No. 2015--RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF LAKE ELSINORE, ACTING AS THE LEGISLATIVE BODY OF CITY OF
LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2004 -3 (ROSETTA
CANYON), AUTHORIZING THE PREPARATION AND DISTRIBUTION OF A
PRELIMINARY OFFICIAL STATEMENT IN CONNECTION WITH THE
ISSUANCE OF REFUNDING REVENUE BONDS OF THE LAKE ELSINORE
Approval of a POS and Other Actions in Connection with a Refunding CFD Bond Sale
February 10, 2015
Page 8
PUBLIC FINANCING AUTHORITY AND TAKING CERTAIN OTHER ACTIONS
IN CONNECTION THEREWITH
4. Resolution No. 2015 - RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF LAKE ELSINORE, ACTING AS THE LEGISLATIVE BODY OF CITY OF
LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2005 -1
(SERENITY), AUTHORIZING THE PREPARATION AND DISTRIBUTION OF A
PRELIMINARY OFFICIAL STATEMENT IN CONNECTION WITH THE
ISSUANCE OF REFUNDING REVENUE BONDS OF THE LAKE ELSINORE
PUBLIC FINANCING AUTHORITY AND TAKING CERTAIN OTHER ACTIONS
IN CONNECTION THEREWITH
5. Resolution No. 2015 - RESOLUTION OF 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 TOWHOMES), AUTHORIZING THE PREPARATION AND
DISTRIBUTION OF A PRELIMINARY OFFICIAL STATEMENT IN
CONNECTION WITH THE ISSUANCE OF REFUNDING REVENUE BONDS OF
THE LAKE ELSINORE PUBLIC FINANCING AUTHORITY AND TAKING
CERTAIN OTHER ACTIONS IN CONNECTION THEREWITH
6. Resolution No. 2015 - RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF LAKE ELSINORE, ACTING AS THE LEGISLATIVE BODY OF CITY OF
LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2006 -2 (VISCAYA),
AUTHORIZING THE PREPARATION AND DISTRIBUTION OF A
PRELIMINARY OFFICIAL STATEMENT IN CONNECTION WITH THE
ISSUANCE OF REFUNDING REVENUE BONDS OF THE LAKE ELSINORE
PUBLIC FINANCING AUTHORITY AND TAKING CERTAIN OTHER ACTIONS
IN CONNECTION THEREWITH
7. Resolution No. 2015 - RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF LAKE ELSINORE, ACTING AS THE LEGISLATIVE BODY OF CITY OF
LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2003 -2 (CANYON
HILLS), AUTHORIZING THE PREPARATION AND DISTRIBUTION OF A
PRELIMINARY OFFICIAL STATEMENT IN CONNECTION WITH THE
ISSUANCE OF REFUNDING REVENUE BONDS OF THE LAKE ELSINORE
PUBLIC FINANCING AUTHORITY AND TAKING CERTAIN OTHER ACTIONS
IN CONNECTION THEREWITH
8. Resolution No. 2015 - RESOLUTION OF THE BOARD OF DIRECTORS OF
THE LAKE ELSINORE PUBLIC FINANCING AUTHORITY, RIVERSIDE
COUNTY, CALIFORNIA, AUTHORIZING THE PREPARATION AND
DISTRIBUTION OF THE PRELIMINARY OFFICIAL STATEMENT IN
CONNECTION THE ISSUANCE OF REFUNDING REVENUE BONDS,
APPROVING CERTAIN DOCUMENTS AND TAKING CERTAIN OTHER
ACTIONS IN CONNECTION THEREWITH
Strudling Maw Cajhon & Retut v
Aal? of 2/3115
RESOLUTION NO. 2015 -
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
LAKE ELSINORE, ACTING AS THE LEGISLATIVE BODY
OF CITY OF LAKE ELSINORE COMMUNITY FACILITIES
DISTRICT NO. 2005 -1 (SERENITY), AUTHORIZING THE
PREPARATION AND DISTRIBUTION OF A PRELIMINARY
OFFICIAL STATEMENT IN CONNECTION WITH THE
ISSUANCE OF THE LOCAL AGENCY REFUNDING
REVENUE BONDS SERIES 2015 OF THE LAKE
ELSINORE PUBLIC FINANCING AUTHORITY AND
TAKING CERTAIN OTHER ACTIONS IN CONNECTION
THEREWITH
WHEREAS, the City Council of the City of Lake Elsinore (the "City "), located in
Riverside County, California (hereinafter sometimes referred to as the "legislative body
of the District "), has heretofore undertaken proceedings to form City of Lake Elsinore
Community Facilities District No. 2005 -1 (Serenity) (the "District ") 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 legislative body of the District previously authorized the issuance
of the "City of Lake Elsinore Community Facilities District No. 2005 -1 (Serenity) 2015
Special Tax Refunding Bonds" (the "2015 Bonds ") to refund the District's $9,180,000
Special Tax Bonds 2006 Series A and to finance additional public improvements, and
WHEREAS, the Lake Elsinore Public Financing Authority (the "Authority "), for the
purpose of acquiring special tax refunding bonds of certain community facilities districts
of the City, including the 2015 Bonds, the proceeds of which will be utilized to defease
and refund outstanding bonds of such community facilities districts, including the
District, and in certain instances to finance additional public improvements, has
authorized the issuance of its Local Agency Revenue Refunding Bonds Series 2015
(the "Authority Bonds "); and
WHEREAS, in connection with the issuance of the Authority Bonds, the Board of
Directors of the Authority has approved the preparation and distribution of the
Preliminary Official Statement in substantially the form on file with the City Clerk, which
Preliminary Official Statement includes certain information relating to the 2015 Bonds
and the District;
NOW, THEREFORE, the City Council, acting as the legislative body of the
District, does hereby resolve, order and determine as follows:
Section 1. Each of the above recitals is true and correct.
City Council Resolution No 2015 -_
Page 2
Section 2. The form of the Preliminary Official Statement for the Authority
Bonds presented at this meeting is hereby approved, and the underwriters of the
Authority Bonds are hereby authorized to distribute the Preliminary Official Statement to
prospective purchasers of the Authority Bonds in the form hereby approved, together
with such additions thereto and changes therein as are determined necessary or
desirable by the Mayor, the City Manager, the Director of Administrative Services, or
their written designees (collectively, the "Authorized Officers "), to make such Preliminary
Official Statement final as of its date for purposes of Rule 15c2 -12 of the Securities and
Exchange Commission, including, but not limited to, such additions and changes as are
necessary to make all information set forth therein accurate and not misleading. Any
one of the Authorized Officers is hereby authorized to execute a final Official Statement
in the form of the Preliminary Official Statement, together with such changes as are
determined necessary by the Mayor, the City Manager, the Director of Administrative
Services, and their written designees, to make such Official Statement complete and
accurate as of its date. The underwriters of the Authority Bonds are further authorized
to distribute the final Official Statement for the Authority Bonds and any supplement
thereto to the purchasers thereof upon its execution on behalf of the District as
described above.
Section 3. This Resolution shall take effect immediately upon its adoption.
PASSED, APPROVED AND ADOPTED at a regular meeting of the City Council
of the City of Lake Elsinore, California, this 10th day of February, 2015.
STEVEN MANOS
MAYOR
ATTEST:
VIRGINIA BLOOM
CITY CLERK
APPROVED AS TO FORM:
BARBARA ZEID LEIBOLD
CITY ATTORNEY
Siradling Yocca Carlson & 2azah
Drafi of 2 13115
RESOLUTION NO. 2015 -
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
LAKE ELSINORE, ACTING AS THE LEGISLATIVE BODY
OF CITY OF LAKE ELSINORE COMMUNITY FACILITIES
DISTRICT NO. 2006 -2 (VISCAYA), AUTHORIZING THE
PREPARATION AND DISTRIBUTION OF A PRELIMINARY
OFFICIAL STATEMENT IN CONNECTION WITH THE
ISSUANCE OF THE LOCAL AGENCY REFUNDING
REVENUE BONDS SERIES 2015 OF THE LAKE
ELSINORE PUBLIC FINANCING AUTHORITY AND
TAKING CERTAIN OTHER ACTIONS IN CONNECTION
THEREWITH
WHEREAS, the City Council of the City of Lake Elsinore (the "City "), located in
Riverside County, California (hereinafter sometimes referred to as the "legislative body
of the District "), has heretofore undertaken proceedings to form City of Lake Elsinore
Community Facilities District No. 2006 -2 (Viscaya) (the "District ") 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 legislative body of the District previously authorized the issuance
of the "City of Lake Elsinore Community Facilities District No. 2006 -2 (Viscaya) 2015
Special Tax Refunding Bonds" (the "2015 Bonds ") to refund the District's $7,290,000
Special Tax Bonds 2006 Series A; and
WHEREAS, the Lake Elsinore Public Financing Authority (the "Authority "), for the
purpose of acquiring special tax refunding bonds of certain community facilities districts
of the City, including the 2015 Bonds, the proceeds of which will be utilized to defease
and refund outstanding bonds of such community facilities districts, including the
District, and in certain instances to finance additional public improvements, has
authorized the issuance of its Local Agency Revenue Refunding Bonds Series 2015
(the "Authority Bonds "); and
WHEREAS, in connection with the issuance of the Authority Bonds, the Board of
Directors of the Authority has approved the preparation and distribution of the
Preliminary Official Statement in substantially the form on file with the City Clerk, which
Preliminary Official Statement includes certain information relating to the 2015 Bonds
and the District;
NOW, THEREFORE, the City Council, acting as the legislative body of the
District, does hereby resolve, order and determine as follows:
Section 1. Each of the above recitals is true and correct.
City Council Resolution No 2015 -
Page 2
Section 2. The form of the Preliminary Official Statement for the Authority
Bonds presented at this meeting is hereby approved, and the underwriters of the
Authority Bonds are hereby authorized to distribute the Preliminary Official Statement to
prospective purchasers of the Authority Bonds in the form hereby approved, together
with such additions thereto and changes therein as are determined necessary or
desirable by the Mayor, the City Manager, the Director of Administrative Services, or
their written designees (collectively, the "Authorized Officers "), to make such Preliminary
Official Statement final as of its date for purposes of Rule 15c2 -12 of the Securities and
Exchange Commission, including, but not limited to, such additions and changes as are
necessary to make all information set forth therein accurate and not misleading. Any
one of the Authorized Officers is hereby authorized to execute a final Official Statement
in the form of the Preliminary Official Statement, together with such changes as are
determined necessary by the Mayor, the City Manager, the Director of Administrative
Services, and their written designees, to make such Official Statement complete and
accurate as of its date. The underwriters of the Authority Bonds are further authorized
to distribute the final Official Statement for the Authority Bonds and any supplement
thereto to the purchasers thereof upon its execution on behalf of the District as
described above.
Section 3. This Resolution shall take effect immediately upon its adoption.
PASSED, APPROVED AND ADOPTED at a regular meeting of the City Council
of the City of Lake Elsinore, California, this 10th day of February, 2015.
STEVEN MANOS
MAYOR
ATTEST:
VIRGINIA BLOOM
CITY CLERK
APPROVED AS TO FORM:
BARBARA ZEID LEIBOLD
CITY ATTORNEY
Stradling Yocca Carlson & Rauth
A ali 0l2 13 115
RESOLUTION NO. 2015 -
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
LAKE ELSINORE, ACTING AS THE LEGISLATIVE BODY
OF CITY OF LAKE ELSINORE COMMUNITY FACILITIES
DISTRICT NO. 2003 -2 (CANYON HILLS), AUTHORIZING
THE PREPARATION AND DISTRIBUTION OF A
PRELIMINARY OFFICIAL STATEMENT IN CONNECTION
WITH THE ISSUANCE OF THE LOCAL AGENCY
REFUNDING REVENUE BONDS SERIES 2015 OF THE
LAKE ELSINORE PUBLIC FINANCING AUTHORITY AND
TAKING CERTAIN OTHER ACTIONS IN CONNECTION
THEREWITH
WHEREAS, the City Council of the City of Lake Elsinore (the "City "), located in
Riverside County, California (hereinafter sometimes referred to as the "legislative body
of the District "), has heretofore undertaken proceedings to form City of Lake Elsinore
Community Facilities District No. 2003 -2 (Canyon Hills) (the "District ") and Improvement
Area B therein 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 legislative body of the District previously authorized the issuance
of the "City of Lake Elsinore Community Facilities District No. 2003 -2 (Canyon Hills)
Improvement Area B 2015 Special Tax Refunding Bonds" (the "2015 Bonds ") to refund
the District's $20,570,000 Special Tax Bonds (Improvement Area B) 2006 Series A and
to finance additional public improvements; and
WHEREAS, the Lake Elsinore Public Financing Authority (the "Authority "), for the
purpose of acquiring special tax refunding bonds of certain community facilities districts
of the City, including the 2015 Bonds, the proceeds of which will be utilized to defease
and refund outstanding bonds of such community facilities districts, including the
District, and in certain instances to finance additional public improvements, has
authorized the issuance of its Local Agency Revenue Refunding Bonds Series 2015
(the "Authority Bonds "); and
WHEREAS, in connection with the issuance of the Authority Bonds, the Board of
Directors of the Authority has approved the preparation and distribution of the
Preliminary Official Statement in substantially the form on file with the City Clerk, which
Preliminary Official Statement includes certain information relating to the 2015 Bonds
and Improvement Area B of the District;
NOW, THEREFORE, the City Council, acting as the legislative body of the
District, does hereby resolve, order and determine as follows:
Section 1. Each of the above recitals is true and correct.
City Council Resolution No 2015 -_
Page 2
Section 2. The form of the Preliminary Official Statement for the Authority
Bonds presented at this meeting is hereby approved, and the underwriters of the
Authority Bonds are hereby authorized to distribute the Preliminary Official Statement to
prospective purchasers of the Authority Bonds in the form hereby approved, together
with such additions thereto and changes therein as are determined necessary or
desirable by the Mayor, the City Manager, the Director of Administrative Services, or
their written designees (collectively, the "Authorized Officers "), to make such Preliminary
Official Statement final as of its date for purposes of Rule 15c2 -12 of the Securities and
Exchange Commission, including, but not limited to, such additions and changes as are
necessary to make all information set forth therein accurate and not misleading. Any
one of the Authorized Officers is hereby authorized to execute a final Official Statement
in the form of the Preliminary Official Statement, together with such changes as are
determined necessary by the Mayor, the City Manager, the Director of Administrative
Services, and their written designees, to make such Official Statement complete and
accurate as of its date. The underwriters of the Authority Bonds are further authorized
to distribute the final Official Statement for the Authority Bonds and any supplement
thereto to the purchasers thereof upon its execution on behalf of the District as
described above.
Section 3. This Resolution shall take effect immediately upon its adoption.
PASSED, APPROVED AND ADOPTED at a regular meeting of the City Council
of the City of Lake Elsinore, California, this 10th day of February, 2015.
STEVEN MANOS
MAYOR
ATTEST:
VIRGINIA BLOOM
CITY CLERK
APPROVED AS TO FORM:
BARBARA ZEID LEIBOLD
CITY ATTORNEY
NEW ISSUE -FULL BOOK ENTRY UNRATED
In the opinion of Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California ( "Bond
Counsel'), under existing statutes, regulations, rulings and judicial decisions, and assuming certain representations and
compliance with certain covenants and requirements described herein, interest on the Bonds is excluded from gross
income for federal income tax purposes and is not an item of tax preference for purposes of calculating the federal
alternative minimum tax imposed on individuals and corporations, in the further opinion of Bond Counsel, interest on the
Bonds is exempt from State of California personal income tax. See "LEGAL MATTERS — Tax Matters."
Dated: Date of Delivery
$113,750,000*
LAKE ELSINORE PUBLIC FINANCING AUTHORITY
LOCAL AGENCY REVENUE REFUNDING BONDS, SERIES 2015
Due: September 1 as shown on inside cover
The Bonds described in this Official Statement are being issued by the Lake Elsinore Public Financing Authority
(the "Authority') to acquire certain special tax obligations (the "Local Obligations') of community facilities districts (the
"Districts "), formed by the City of Lake Elsinore (the "City "). The Local Obligations are being issued to refund outstanding
bonds issued by the Districts and to finance the acquisition of public capital facilities. See "FINANCING PLAN."
The Bonds are payable solely from "Revenues' pledged by the Authority pursuant to that certain Indenture of
Trust, dated as of March 1, 2015 (the "Indenture "), by and between the Authority and MUFG Union Bank, N.A. (the
"Trustee "). Revenues consist primarily of debt service on the Local Obligations paid to the Authority by the Districts. See
"SECURITY FOR THE BONDS."
Each Local Obligation will be secured by a pledge of and payable from Net Special Taxes, consisting of the
revenues generated by the levy of special taxes in the applicable Districts or improvement areas in the Districts (the
"Taxing Jurisdictions"), less amounts used to pay administrative expenses. The Net Special Taxes in one Taxing
Jurisdiction are not available to pay debt service on the Local Obligation of another Taxing Jurisdiction.
The Bonds will be issued in denominations of $5,000 or any integral multiple thereof. Interest on the Bonds is
payable on September 1, 2015 and semiannually thereafter on March 1 and September 1 each year. The Bonds will be
initially issued only in book -entry form and registered in the name of Cede & Co. as nominee of The Depository Trust
Company, New York, New York ( "DTC "), which will act as securities depository of the Bonds. Principal and interest (and
premium, if any) on the Bonds is payable by the Trustee to DTC, which remits such payments to its Participants for
subsequent distribution to the beneficial owners of the Bonds. See "THE BONDS — General Provisions" and —
Book -Entry Only System."
The Bonds may be subject to redemption prior to maturity as described herein. See "THE BONDS —
Redemption."
CERTAIN EVENTS COULD AFFECT THE ABILITY OF THE AUTHORITY TO PAY THE PRINCIPAL OF AND
INTEREST ON THE BONDS WHEN DUE. THE PURCHASE OF THE BONDS INVOLVES SIGNIFICANT INVESTMENT
RISKS, AND THE BONDS MAY NOT BE SUITABLE INVESTMENTS FOR MANY INVESTORS. SEE THE SECTION
OF THIS OFFICIAL STATEMENT ENTITLED "SPECIAL RISK FACTORS" FOR A DISCUSSION OF CERTAIN RISK
FACTORS THAT SHOULD BE CONSIDERED, IN ADDITION TO THE OTHER MATTERS SET FORTH HEREIN, IN
EVALUATING THE INVESTMENT QUALITY OF THE BONDS.
Maturity Schedule
(see inside cover)
This cover page contains certain information for quick reference only. It is not a summary of the issue. Potential
investors must read the entire Official Statement to obtain information essential to the making of an informed investment
decision.
The Bonds are offered when, as and if issued and accepted by Stifel, Nicolaus & Company, Incorporated and
Brandis Tallman LLC, the Underwriters, subject to the approval as to their legality by Stradling Yocca Carlson & Rauth, a
Professional Corporation, as Bond Counsel. Jones Hall, A Professional Law Corporation, is acting as disclosure counsel
to the Authority. The City Attorney of the City of Lake Elsinore will pass upon certain matters for the Authority and the
Districts. Nossaman LLP is acting as counsel to the Undernviter. It is anticipated that the Bonds in definitive form will be
available for delivery to DTC or its agent on or about March _, 2015.
STIFEL
[LOGO]
Dated: ,2015
Preliminary; subject to change.
BRANDIS TALLMAN
[LOGO]
MATURITY SCHEDULE`
LAKE ELSINORE PUBLIC FINANCING AUTHORITY
LOCAL AGENCY REVENUE REFUNDING BONDS, SERIES 2015
Maturity Principal
(September 1) Amount
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
Interest Rate Yield
Term Bonds due , Yield: % Price:
Price
CUSIPt No.
CUSIPf No.
Preliminary, subject to change.
1 Copyright 2014, CUSIP Global Services, and a registered trademark of the American Bankers Association. CUSIP data is
provided by CUSIP Global Services, which is managed on behalf of American Bankers Association by S &P Capital IQ. Neither
the Authority nor the Underwriter assumes any responsibility for the accuracy of the CUSIP data.
LAKE ELSINORE PUBLIC FINANCING AUTHORITY
BOARD OF DIRECTORS /CITY COUNCIL
Steve Manos, Chair /Mayor
Brian Tisdale, Vice Chair /Mayor Pro Tern
Daryl Hickman, Member /Councilmember
Natasha Johnson, Member /Councilmember
Robert Magee, Member /Councilmember
AUTHORITY STAFF
Grant Yates, City Manager
Jason Simpson, Director of Administrative Services
David Bilby, Finance Manager
Barbara Leibold, Esq., City Attorney /Authority Counsel
PROFESSIONAL SERVICES
FINANCIAL ADVISOR
Urban Futures, Inc.
Orange, California
BOND COUNSEL
Stradling Yocca Carlson & Rauth, a Professional Corporation
Newport Beach, California
DISCLOSURE COUNSEL
Jones Hall, A Professional Law Corporation
San Francisco, California
TRUSTEE /FISCAL AGENT /ESCROW AGENT
MUFG Union Bank, N.A.
Los Angeles, California
SPECIAL TAX CONSULTANT
Albert A. Webb Associates
Riverside, California
VERIFICATION AGENT
Causey Demgen & Moore, P.C.
Denver, Colorado
Investment in the Bonds involves risks that are not appropriate for certain investors. Therefore,
only persons with substantial financial resources (in net worth or income) who understand (either alone or
with competent investment advice) those risks should consider such an investment.
Except where otherwise indicated, all information contained in this Official Statement has been
provided by the Authority or the City. No dealer, broker, salesperson or other person has been
authorized by the Authority, the City, the Districts, the Trustee or the Underwriters to give any information
or to make any representations in connection with the offer or sale of the Bonds other than those
contained herein, and, if given or made, such other information or representations must not be relied
upon as having been authorized by the Authority, the City, the Districts, the Trustee or the Underwriters.
This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy nor shall
there be any sale of the Bonds by a person in any jurisdiction in which it is unlawful for such person to
make such an offer, solicitation or sale.
The information set forth herein which has been obtained from third party sources is believed to
be reliable but is not guaranteed as to accuracy or completeness by the Districts, the City or the Authority.
This Official Statement is not to be construed as a contract with the purchasers or Owners of the Bonds.
Statements contained in this Official Statement which involve estimates, forecasts or matters of opinion,
whether or not expressly so described herein, are intended solely as such are not to be construed as
representations of fact.
The Underwriters have provided the following sentence for inclusion in this Official Statement:
The Underwriters have 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
Underwriters do not guarantee the accuracy of completeness of such information.
The information and expressions of opinion herein are subject to change without notice and
neither the delivery of this Official Statement nor any sale made hereunder shall, under any
circumstances, create any implication that there has been no change in the affairs of the Authority, the
City, the Districts or any other parties described herein since the date hereof. All summaries of the
Indenture or other documents are made subject to the provisions of such documents respectively and do
not purport to be complete statements of any or all of such provisions. Reference is hereby made to such
documents on file with the City for further information in connection therewith.
Certain statements included or incorporated by reference in this Official Statement constitute
"forward- looking statements" within the meaning of the United States Private Securities Litigation Reform
Act of 1995, Section 21E of the United States Securities Exchange Act of 1934, as amended, and
Section 27A of the United States Securities Act of 1933, as amended. Such statements are generally
identifiable by the terminology used such as "plan," " expect," " estimate," "project," "budget' or other similar
words.
The achievement of certain results or other expectations contained in such forward- looking
statements involve known and unknown risks, uncertainties and other factors which may cause actual
results, performance or achievements described to be materially different from any future results,
performance or achievements expressed or implied by such forward- looking statements. The Authority
does not plan to issue any updates or revisions to the forward- looking statements set forth in this Official
Statement. The Authority is obligated to provide continuing disclosure for certain historical information
only. See the caption "MISCELLANEOUS — Continuing Disclosure" herein.
IN CONNECTION WITH THE OFFERING OF THE BONDS, THE UNDERWRITERS MAY
OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE
OF SUCH 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 BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, IN RELIANCE UPON AN EXEMPTION CONTAINED IN SUCH ACT. THE BONDS HAVE
NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE.
The City maintains a website, but the information on the website is not incorporated in this Official
Statement.
TABLE OF CONTENTS
Paqe
INTRODUCTION........................................................................................ ...............................
1
FinancingPurpose ................................................................................................... ...............................
1
TheBonds; The Local Obligations .......................................................................... ...............................
1
LegalAuthority ......................................................................................................... ...............................
4
Sources of Payment for the Bonds and the Local Obligations.... . ....... ................
4
Descriptionof the Bonds ......................................................................................... ............................
4
TheCity ................................................................................................................... ...............................
5
TheAuthority ........................................................................................................... ...............................
5
Professionals Involved in the Offering... ......................... .................. ..... .........................................
5
ContinuingDisclosure ............................................................................................... ..............................6
FINANCINGPLAN ...................................................................................... ..............................6
Purpose of Issue and the Refunding Plan ................................................................ ..............................6
Estimated Sources and Uses of Funds .................................................................... ..............................8
THEBONDS ............................................................................................ ...............................
10
GeneralProvisions ................................................................................................ ...............................
10
Redemption........................................................................................................... ...............................
10
Payment, Registration, Transfer and Exchange of Bonds .................................... ...............................
13
Book -Entry Only System ....................................................................................... ...............................
14
Estimated Debt Service Schedules: Bonds and Local Obligations ...................... ...............................
15
Debt Service Coverage for the Bonds ................................................................... ...............................
17
SECURITY FOR THE BONDS ................................................................. ...............................
17
General.................................................................................................................... .............................17
Revenuesand Flow of Funds ................................................................................ ...............................
17
ReserveFund ........................................................................................................ ...............................
19
SurplusFund ......................................................................................................... ...............................
20
No Additional Bonds Except to Refund Bonds.... ...............................................
21
SECURITY FOR THE LOCAL OBLIGATIONS .......................................... .............................22
General.................................................................................................................. ...............................
22
Special Taxes; Gross Special Taxes; Net Special Taxes ..................................... ...............................
22
Administrative Expense Requirement ..................................................................... .............................23
LocalObligation Parity Bonds ................................................................................. .............................24
Priorityof Lien ........................................................................................................ ...............................
24
Covenantsof the Districts ...................................................................................... ...............................
24
THE COMMUNITY FACILITIES DISTRICTS ............................................. .............................26
TheDistricts in the Aggregate ................................................................................. .............................26
SPECIALRISK FACTORS ......................................................................... .............................34
Risks of Real Estate Secured Investments Generally... ......................... ........................ ................ ...
34
The Bonds are Limited Obligations of the Authority .............................................. ...............................
34
NoObligation of City .............................................................................................. ...............................
35
Potential Early Redemption of Bonds from Prepayments ..................................... ...............................
35
Payment of Special Taxes is not a Personal Obligation of the Property Owners . ...............................
35
AssessedValuations ............................................................................................. ...............................
35
LandValues ........................................................................................................... ...............................
36
NaturalDisasters ..................................................................................................... .............................36
HazardousSubstances ......................................................................................... ...............................
36
Parity Taxes and Special Assessments ................................................................ ...............................
37
Disclosures to Future Purchasers ......................................................................... ...............................
37
Special Tax Delinquencies .................................................................................... ...............................
38
Insufficiency of Special Taxes ............................................................................... ...............................
38
FDIC /Federal Government Interests in Properties ..................................... ........... .... ...........................
39
Bankruptcy and Foreclosure .................................................................................... .............................41
No Acceleration Provision ..................................................................................... ...............................
41
Limitationson Remedies ......................................................................................... .............................41
Lossof Tax Exemption .......................................................................................... ...............................
42
IRS Audit of Tax - Exempt Bond Issues .................................................................... .............................42
Impact of Legislative Proposals, Clarifications of the Code and Court Decisions on Tax Exemption
. 42
LimitedSecondary Market ....... .. ............................................. ........
...................................................... 42
Proposition218 ......................................................................................................
............................... 43
BallotInitiatives ........................................................................................................
.............................44
LEGALMATTERS ......................................................................................
.............................44
TaxMatters ............................................................................................................
............................... 44
Absenceof Litigation .............................................................................................
............................... 46
LegalOpinion .........................................................................................................
............................... 47
MISCELLANEOUS.....................................................................................
.............................47
Verification of Mathematical Accuracy .................................................................. ...............................
47
Underwriting........................................................................................................... ...............................
47
ContinuingDisclosure .............................................................................................. .............................47
AdditionalInformation ............................................................................................ ...............................
48
APPENDIX A INFORMATION REGARDING THE COMMUNITY FACILITIES DISTRICTS .................A
-1
APPENDIX B SUMMARY OF PRINCIPAL LEGAL DOCUMENTS ............................ ............................B
-1
APPENDIX C DEMOGRAPHIC INFORMATION REGARDING THE CITY OF LAKE ELSINORE
AND THE COUNTY OF RIVERSIDE .............................................. ...............................
C -1
APPENDIX D RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES FOR EACH
TAXINGJURISDICTION ................................................................. ...............................
D -1
APPENDIX E FORM OF BOND COUNSEL OPINION .................. ....... .................. ...... ... ....... ......... ......
E -1
APPENDIX F FORM OF CONTINUING DISCLOSURE CERTIFICATE ................ ...............................
F -1
APPENDIX G DTC AND THE BOOK- ENTRY -ONLY SYSTEM ............................. ...............................
G -1
Regional Map
OFFICIAL STATEMENT
$113,750,000*
LAKE ELSINORE PUBLIC FINANCING AUTHORITY
LOCAL AGENCY REVENUE REFUNDING BONDS, SERIES 2015
INTRODUCTION
The purpose of this Official Statement, which includes the cover page and Appendices
(the "Official Statement'), is to provide certain information concerning the sale and issuance of
the Lake Elsinore Public Financing Authority Local Agency Revenue Refunding Bonds, Series
2015 (the 'Bonds "). The Bonds are issued pursuant to an Indenture of Trust dated as of March
1, 2015 (the 'Indenture "), by and between the Lake Elsinore Public Financing Authority (the
"Authority") and MUFG Union Bank, N.A., as trustee (the "Trustee ").
This Introduction is not a summary of this Official Statement. It is only a brief description
of and guide to, and is qualified by, more complete and detailed information contained in the
entire Official Statement and the documents summarized or described herein. A full review
should be made of the entire Official Statement. The offering of the Bonds to potential investors
is made only by means of the entire Official Statement.
Financing Purpose
Purpose of the Bonds. The Bonds are being issued by the Authority to acquire the
"Local Obligations" described below (see "FINANCING PLAN ").
Purpose of the Local Obligations. The net proceeds of the Local Obligations, along
with other available funds, will be used as follows (see "FINANCING PLAN" herein):
(i) to make deposits into eight separate escrow funds (collectively, the
"Escrow Funds ") to be held by MUFG Union Bank, N.A., as escrow agent (the "Escrow
Agent') pursuant to eight separate Escrow Agreements, each dated as of March 1, 2015
(collectively, the "Escrow Agreements ") for the purpose of paying (A) principal and
interest on the Prior Bonds (as defined below) through their redemption dates (each a
"Redemption Date ") and (B) the remaining outstanding principal of the Prior Bonds (and
applicable redemption premiums) on the applicable Redemption Date;
(ii) to pay the costs of issuing the Bonds, and
(iii) to fund separate accounts for each Local Obligation in a Reserve Fund
held by the Trustee for the Bonds.
The Bonds; The Local Obligations
The Bonds. The Bonds are payable from 'Revenues," as more completely defined
below, generally consisting of revenues received by the Authority as the result of the payment of
debt service on the Local Obligations, and amounts held in the funds and accounts established
and held for the benefit of the Bonds under the Indenture. See "SECURITY FOR THE BONDS."
Preliminary, subject to change.
-1-
Local Obligations. The Local Obligations consist of the following eight separate series
of bonds issued by or on behalf of various community facilities districts or improvement areas
therein (the "Taxing Jurisdictions ") formed by the City of Lake Elsinore (the "City "):
CFO No. 95 -1 Bonds: $1,130,000'" City of Lake Elsinore Community Facilities
District No. 95 -1 (Lake Elsinore City Center Public Improvements) 2015 Special Tax
Refunding Bonds (the "CFD No. 95 -1 Bonds ") being issued by Community Facilities
District No. 95 -1 of the City ( "CFD No. 95 -1 ") to refund the outstanding Local Agency
Revenue Bonds (1996 Series E Refunding), 2011 Series B of the Authority (the 'Prior
CFD No. 95 -1 Bonds "), The CFD No. 95 -1 Bonds are payable from Special Taxes
levied on taxable property in CFD No. 95-1. See Appendix A - "INFORMATION
REGARDING THE COMMUNITY FACILITIES DISTRICTS — CFD No. 95 -1."
CFD No. 2003 -2 Bonds: $25,555,000" City of Lake Elsinore Community
Facilities District No. 2003 -2 (Canyon Hills) Improvement Area B 2015 Special Tax
Refunding Bonds (the "CFD No. 2003 -2 Bonds ") being issued by Community Facilities
District No. 2003 -2 (Canyon Hills) of the City ( "CFD No. 2003 -02 ") to refund the
outstanding Community Facilities District No. 2003 -2 (Canyon Hills) Improvement Area
B, 2006 Series A Bonds (the 'Prior CFD No. 2003 -2 Bonds "). The CFD No. 2003 -2
Bonds are payable from Special Taxes levied on taxable property in CFD No. 2003 -2.
See Appendix A - "INFORMATION REGARDING THE COMMUNITY FACILITIES
DISTRICTS — CFD No. 2003 -2 (Improvement Area B)."
CFD No. 2004 -3 -1 Bonds: $22,000,000" Community Facilities District No. 2004-
3 (Rosetta Canyon) Improvement Area No. 1 2015 Special Tax Refunding Bonds (the
"CFD No. 2004 -3 -1 Bonds ") being issued by Community Facilities District No. 2004 -3
(Rosetta Canyon) of the City ( "CFD No. 2004 -3 ") to refund the outstanding Community
Facilities District No. 2004 -3 (Rosetta Canyon) Improvement Area No. 1, 2005 Series A
Bonds (the 'Prior CFD No. 2004 -3 -1 Bonds "). The CFD No. 2004 -3 -1 Bonds are
payable from Special Taxes levied on taxable property in Improvement Area No. 1 of
CFD No. 2004 -3. See Appendix A- "INFORMATION REGARDING THE COMMUNITY
FACILITIES DISTRICTS — CFD No. 2004 -3 (Improvement Area No. 1)."
CFD No. 2004 -3 -2 Bonds: $24,715,000" Community Facilities District No. 2004-
3 (Rosetta Canyon) Improvement Area No. 2 2015 Special Tax Refunding Bonds (the
"CFD No. 2004 -3 -2 Bonds ") being issued by CFD No. 2004 -3 to refund the outstanding
Community Facilities District No. 2004 -3 (Rosetta Canyon) Improvement Area No. 2,
2006 Series A Bonds (the 'Prior CFD No. 2004 -3 -2 Bonds "). The CFD No. 2004 -3 -2
Bonds are payable from Special Taxes levied on taxable property in Improvement Area
No. 2 of CFD No. 2004 -3. See Appendix A- "INFORMATION REGARDING THE
COMMUNITY FACILITIES DISTRICTS — CFD No. 2004 -3 (Improvement Area No. 2)."
CFD No. 2005 -1 Bonds: $8,505,000` Community Facilities District No. 2005 -1
(Serenity) 2015 Special Tax Refunding Bonds (the "CFD No. 2005 -1 Bonds ") being
issued by Community Facilities District No. 2005 -1 (Serenity) of the City ( "CFD
No. 2005 -1 ") to refund the outstanding Community Facilities District No. 2005 -1
(Serenity) 2006 Series A Bonds (the 'Prior CFD No. 2005 -1 Bonds "). The CFD
No. 2005 -1 Bonds are payable from Special Taxes levied on taxable property in CFD
Preliminary; subject to change.
-2-
No. 2005 -1. See Appendix A - "INFORMATION REGARDING THE COMMUNITY
FACILITIES DISTRICTS — CFD No. 2005 -1."
CFD No. 2005 -2 Bonds: $6,675,000 Community Facilities District No. 2005 -2
(Alberhill Ranch) Improvement Area A 2015 Special Tax Refunding Bonds (the "CFD
No. 2005 -2 Bonds ") being issued by Community Facilities District No. 2005 -2 (Alberhill
Ranch) of the City ( "CFD No. 2005 -2 ") to refund the outstanding Community Facilities
District No. 2005 -2 (Alberhill Ranch) Improvement Area A, 2005 Series A Bonds (the
"Prior CFD No. 2005 -2 Bonds "). The CFD No. 2005 -2 Bonds are payable from Special
Taxes levied on taxable property in Improvement Area A of CFD No. 2005 -2. See
Appendix A - 'INFORMATION REGARDING THE COMMUNITY FACILITIES
DISTRICTS — CFD No. 2005 -2 (Improvement Area A)."
CFD No. 2005 -6 Bonds: $3,075,000` Community Facilities District No. 2005 -6
(City Center Townhomes) 2015 Special Tax Refunding Bonds (the "CFD No. 2005 -6
Bonds ") being issued by Community Facilities District No. 2005 -6 (City Center
Townhomes) of the City ( "CFD No. 2005 -6 ") to refund the outstanding Community
Facilities District No. 2005 -6 (City Center Townhomes) 2006 Series A Bonds (the 'Prior
CFD No. 2005 -6 Bonds "). The CFD No. 2005 -6 Bonds are payable from Special Taxes
levied on taxable property in CFD No. 2005 -6. See Appendix A - "INFORMATION
REGARDING THE COMMUNITY FACILITIES DISTRICTS — CFD No. 2005 -6."
CFD No. 2006 -2 Bonds: $6,675,000" Community Facilities District No. 2006 -2
(Viscaya) 2015 Special Tax Refunding Bonds (the "CFD No. 2006 -2 Bonds ") being
issued by Community Facilities District No. 2006 -2 (Viscaya) of the City ( "CFD No. 2006-
2 ") to refund the outstanding Community Facilities District No. 2006 -2 (Viscaya) 2006
Series A Bonds (the 'Prior CFD No. 2006 -2 Bonds "). The CFD No. 2006 -2 Bonds are
payable from Special Taxes levied on taxable property in CFD No. 2006-2. See
AppendixA - 'INFORMATION REGARDING THE COMMUNITY FACILITIES
DISTRICTS — CFD No. 2006 -2."
CFD No. 95 -1, CFD No. 2003 -2, CFD No. 2004 -3, CFD No. 2005 -1, CFD No. 2005 -2,
CFD No. 2005 -6 and CFD No. 2006 -2 are collectively referred to in this Official Statement as
the 'Districts." The Improvement Areas in the Districts listed above are referred to collectively
as the 'Improvement Areas," and the Districts and the Improvement Areas are referred to
collectively as the "Taxing Jurisdictions."
The CFD No. 95 -1 Bonds, CFD No. 2003 -2 Bonds, CFD No. 2004 -3 -1 Bonds, CFD No.
2004 -3 -2 Bonds, CFD No. 2005 -1 Bonds, CFD No. 2005 -2 Bonds, CFD No. 2005 -6 Bonds and
CFD No. 2006 -2 Bonds are collectively referred to in this Official Statement as the "Local
Obligations."
The Prior CFD No. 95 -1 Bonds, Prior CFD 2003 -2 Bonds, Prior CFD 2004 -3 -1 Bonds,
Prior CFD No. 2004 -3 -2 Bonds, Prior CFD No. 2005 -1 Bonds, Prior CFD No. 2005 -2 Bonds,
Prior CFD No. 2005 -6 Bonds and Prior CFD No. 2006 -2 Bonds are collectively referred to in this
Official Statement as the 'Prior Bonds."
No Outstanding Parity Obligations. Following the refunding of the Prior Bonds, the
Local Obligations will be the only bonds outstanding that are payable from the Special Taxes.
Preliminary, subject to change
-3-
Legal Authority
The Bonds. The Bonds are being issued under Article 4 of Chapter 5 of Division 7 of
Title 1 of the Government Code of the State of California (the "Act') and the Indenture.
The Local Obligations. The Local Obligations are being issued pursuant to 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 "Mello -Roos Act'),
and eight separate Bond Indentures, each dated as of March 1, 2015 (each, a "Local
Obligation Bond Indenture "), each by and between the applicable District and MUFG Union
Bank, N.A., as fiscal agent.
Sources of Payment for the Bonds and the Local Obligations
The Bonds are secured by a first lien on and pledge of all of the Revenues. 'Revenues"
are defined in the Indenture to include:
(a) all amounts received from the Local Obligations;
(b) any proceeds of the Bonds originally deposited with the Trustee and all moneys
deposited and held from time to time by the Trustee in the funds and accounts established
under the Indenture with respect to the Bonds (other than the Rebate Fund and the Surplus
Fund); and
(c) investment income with respect to any moneys held by the Trustee in the funds
and accounts established under the Indenture with respect to the Bonds (other than investment
income on moneys held in the Rebate Fund and the Surplus Fund).
See "SECURITY FOR THE BONDS — Revenues and Flow of Funds."
Local Obligations. Each Local Obligation will be payable from Net Special Taxes
collected in the applicable Taxing Jurisdiction as a result of the levy of Special Taxes. See
"SECURITY FOR THE LOCAL OBLIGATIONS."
The Local Obligations are not cross - collateralized. In other words, Special Taxes
from one Taxing Jurisdiction cannot be used to cover any shortfall in the payment of
debt service on the Local Obligation of another Taxing Jurisdiction.
Description of the Bonds
Payments. Interest is payable on September 1, 2015, and semiannually thereafter on
March 1 and September 1 each year (each, an "Interest Payment Date "). Principal of and
premium, if any, on the Bonds will be payable by the Trustee. See 'THE BONDS — General
Provisions" and " — Book -Entry Only System."
Denominations. The Bonds will be issued in denominations of $5,000 each or integral
multiples thereof.
Redemption. The Bonds are subject to redemption prior to their maturity. See `THE
BONDS — Redemption" herein.
0
Record Date. The Indenture defines "Record Date" as the 15th calendar day of the
month preceding the month in which the related Interest Payment Date occurs, whether or not a
Business Day.
Registration, transfers and exchanges. The Bonds will be issued as fully registered
bonds, registered in the name of Cede & Co. as nominee of The Depository Trust Company,
New York, New York ( "DTC "), and will be available to actual purchasers of the Bonds (the
"Beneficial Owners ") under the book -entry system maintained by DTC. See "THE BONDS —
Payment, Registration, Transfer and Exchange of Bonds" and "— Book -Entry Only System."
The City
The City was founded in 1883 and incorporated as a general law city effective April 23,
1888 in San Diego County. In 1893, the Elsinore Valley, previously located in San Diego
County, became part of the new County of Riverside (the "County "). The City encompasses
approximately 43 square miles, with over 10 miles of lake shore, and is located at the
southwestern end of the County, 73 miles east of downtown Los Angeles and 74 miles north of
downtown San Diego. As of June 30, 2014, the City of Lake Elsinore's population was
approximately 56,718.
Neither the Bonds nor the Local Obligations are a debt of the City or the County,
and no revenues of the City or County are pledged to repayment of the Bonds or the
Local Obligations.
The Authority
The Authority is a joint exercise of powers authority organized and existing pursuant to
the Act. Its members are the City and the Successor Agency to the Redevelopment Agency of
the City.
Professionals Involved in the Offering
All proceedings in connection with the issuance of the Bonds are subject to the approval
of Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California,
Bond Counsel. Albert A. Webb Associates is acting as Special Tax Consultant to the Authority.
MUFG Union Bank, N.A., Los Angeles, California, will act as the Trustee /Fiscal Agent /Escrow
Agent. Urban Futures, Inc., Orange, California, is acting as financial advisor to the Authority.
Jones Hall, A Professional Law Corporation, is acting as Disclosure Counsel to the Authority.
The City Attorney of the City acts as counsel for the Districts and the Authority. Stifel, Nicolaus
& Company, Incorporated and Brandis Tallman LLC are acting as Underwriters in connection
with the issuance and delivery of the Bonds. Nossaman LLP, Irivine, California, is acting as
counsel to the Underwriter. Causey Demgen & Moore, P.C., Denver, Colorado, will provide
escrow verification services.
Bond Counsel, Disclosure Counsel, Underwriter's Counsel, the Financial Advisor, the
Underwriters and the Special Tax Consultant will receive compensation contingent upon
issuance of the Bonds. Stradling Yocca Carlson & Rauth, a Professional Corporation,
represents the Underwriters in connection with financings unrelated to the Bonds and the Local
Obligations.
-5-
Continuing Disclosure
The Authority will execute a Continuing Disclosure Certificate and will covenant therein
for the benefit of holders and beneficial owners of the Bonds to provide certain financial
information and operating data relating to the Authority and the Taxing Jurisdictions by not later
than December 31 of each year. See "MISCELLANEOUS — Continuing Disclosure."
FINANCING PLAN
Purpose of Issue and the Refunding Plan
Acquisition of the Local Obligations. The Authority is issuing the Bonds to purchase
the Local Obligations and to finance public capital improvements.
Proceeds of the Local Obligations, along with other available moneys, will be (i)
deposited into the Escrow Funds pursuant to the Escrow Agreements, (ii) used to finance public
facilities, (iii) used to pay the costs of issuing the Bonds and the Local Obligations and (iv)
applied to fund separate accounts in a Reserve Fund held by the Trustee.
Refunding of the Prior Bonds. Funds deposited into the Escrow Funds pursuant to
the Escrow Agreements will be used to pay principal and interest payable on the Prior Bonds
through the Redemption Dates identified below, and to redeem the remaining outstanding
principal amount of the Prior Bonds, as follows:
(a) Prior CFD No. 95 -1 Bonds: Proceeds of the CFD No. 95 -1 Bonds deposited into
an Escrow Fund relating to the Prior CFD No. 95 -1 Bonds will be used to redeem the
outstanding Prior CFD No. 95 -1 Bonds on [March 23, 2015] at a redemption price equal to
102% of the principal amount to be redeemed, together with accrued interest to the redemption
date.
(b) Prior CFD No. 2003 -2 Bonds: Proceeds of the CFD No. 2003 -2 Bonds deposited
into an Escrow Fund relating to the Prior CFD No. 2003 -2 Bonds will be used to redeem the
outstanding Prior CFD No. 2003 -2 Bonds on [March 23, 2015] at a redemption price equal to
100% of the principal amount to be redeemed, together with accrued interest to the redemption
date.
(c) Prior CFD No. 2004 -3 -1 Bonds: Proceeds of the CFD No. 2004 -3 -1 Bonds
deposited into an Escrow Fund relating to the Prior CFD No. 2004 -3 -1 Bonds will be used to
(i) to pay debt service on the Prior CFD No. 2003 -2 Bonds through September 1, 2015 and
(ii) on September 1, 2015, to redeem the Prior CFD No. 2003 -2 Bonds maturing on and after
September 1, 2015 at a redemption price equal to 102% of the principal amount to be
redeemed, together with accrued interest to the redemption date.
(d) Prior CFD No. 2004 -3 -2 Bonds: Proceeds of the CFD No. 2004 -3 -2 Bonds
deposited into an Escrow Fund relating to the Prior CFD No. 2004 -3 -2 Bonds will be used to
redeem the outstanding Prior CFD No. 2004 -3 -2 Bonds on [March 23, 2015] at a redemption
price equal to 100% of the principal amount to be redeemed, together with accrued interest to
the redemption date.
(e) Prior CFD No. 2005 -1 Bonds: Proceeds of the CFD No. 2005 -1 Bonds deposited
into an Escrow Fund relating to the Prior CFD No. 2005 -1 Bonds will be used to redeem the
-6-
outstanding Prior CFD No. 2005 -1 Bonds on [March 23, 2015] at a redemption price equal to
100% of the principal amount to be redeemed, together with accrued interest to the redemption
date.
(f) Prior CFD No. 2005 -2 Bonds: Proceeds of the CFD No. 2005 -2 Bonds deposited
into an Escrow Fund relating to the Prior CFD No. 2005 -2 Bonds will be used to redeem the
outstanding Prior CFD No. 2005 -2 Bonds on [March 23, 2015] at a redemption price equal to
100% of the principal amount to be redeemed, together with accrued interest to the redemption
date.
(g) Prior CFD No. 2005 -6 Bonds: Proceeds of the CFD No. 2005 -6 Bonds deposited
into an Escrow Fund relating to the Prior CFD No. 2005 -6 Bonds will be used to redeem the
outstanding Prior CFD No. 2005 -6 Bonds on [March 23, 2015] at a redemption price equal to
100% of the principal amount to be redeemed, together with accrued interest to the redemption
date.
(h) Prior CFD No. 2006 -2 Bonds: Proceeds of the CFD No. 2006 -2 Bonds deposited
into an Escrow Fund relating to the Prior CFD No. 2006 -2 Bonds will be used to redeem the
outstanding Prior CFD No. 2006 -2 Bonds on [March 23, 2015] at a redemption price equal to
100% of the principal amount to be redeemed, together with accrued interest to the redemption
date.
Certain moneys in the existing funds and accounts relating to the Prior Bonds also will
be transferred to the Escrow Funds and be applied to the defeasance of the Prior Bonds. See "
— Estimated Sources and Uses of Funds" below. See also "MISCELLANEOUS — Verification
of Mathematical Accuracy" below.
Financing of Public Facilities. Proceeds of the following Local Obligations will be used
to finance authorized public facilities.
(a) CFD No. 2003 -2 Bonds
(b) CFD No. 2004 -3 -2 Bonds
-7-
Estimated Sources and Uses of Funds
The Bonds. The anticipated sources and uses of funds relating to the Bonds are as
follows:
(z)
(3)
Total
Sources:
Principal Amount of the Bonds
Underwriters' Discount
Net Original Issue Premium /Original Issue Discount
Funds on Hand Held Under Prior Bonds Indentures
Total Sources
Uses:
Escrow Funds(')
Cost of Issuance Fund(')
Reserve Fund(')
Improvement Fund
Total Uses
Proceeds of the Bonds will be used to acquire the Local Obligations. The Fiscal Agent for each of the Local
Obligations will transfer to the Escrow Agent funds held in existing funds and accounts relating to the Prior
Bonds, together with Bond proceeds received from the Authority from the purchase of the Local Obligations, to
separate Escrow Funds to defease each issuance of Prior Bonds. See the sources and uses of funds for the
Local Obligations below.
The Fiscal Agent for each of the Local Obligations will transfer to the Trustee for deposit in the Costs of Issuance
Fund each Taxing Jurisdiction's proportionate share of the costs of issuance of the Bonds.
The Fiscal Agent for each of the Local Obligations will transfer to the Trustee for deposit into such Taxing
Jurisdiction's account in the Reserve Fund each Taxing Jurisdiction's proportionate share of the Reserve
Requirement with respect to the Bonds.
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THE BONDS
General Provisions
The Bonds will be dated their date of delivery, and the Bonds will be issued in the
aggregate principal amounts set forth on the inside front cover. The Bonds will bear interest
from their dated date at the rates per annum set forth on the inside front cover hereof, payable
semiannually on each March 1 and September 1, commencing September 1, 2015 (each, an
"Interest Payment Date "), and will mature in the amounts and on the dates set forth on the
inside front cover. The Bonds will be issued in fully registered form in denominations of $5,000
each or any integral multiple thereof.
Interest on the Bonds will be payable on each Interest Payment Date to the person
whose name appears on the Bond Register as the Owner as of the Record Date immediately
preceding each Interest Payment Date. Interest will be paid by check of the Trustee mailed on
the Interest Payment Date by first class mail, postage prepaid, to the Owner at the address as it
appears on the Bond Register or by wire transfer to an account in the United States of America
upon instructions of any Owner of $1,000,000 or more in aggregate principal amount of Bonds
provided to the Trustee, in writing, at least five Business Days before the Record Date for such
Interest Payment Date. The Bonds are issued in fully registered form and will be registered in
the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York
( "DTC "). DTC will act as securities depository of the Bonds. Ownership interests in the Bonds
may be purchased in book -entry form only in denominations of $5,000 and any integral multiple.
See "— Book -Entry Only System."
Principal of and premium (if any) on any Bond will be paid upon presentation and
surrender thereof, at maturity or the prior redemption thereof, at the Trust Office of the Trustee.
Each Bond will bear interest from the Interest Payment Date next preceding the date of
authentication thereof, unless (a) it is authenticated after a Record Date (the 15th calendar day
of the month preceding an Interest Payment Date, whether or not it is a Business Day) and on
or before the following Interest Payment Date, in which event it will bear interest from such
Interest Payment Date, or (b) it is authenticated on or before August 15, 2015, in which event it
will bear interest from the Dated Date, provided, however, that if, as of the date of authentication
of any Bond, interest thereon is in default, such Bond will bear interest from the Interest
Payment Date to which interest has previously been paid or made available for payment
thereon, or from the Dated Date if no interest has been paid or made available for payment.
Redemption
Optional Redemption. The (other than the Alberhill Term Bonds, as defined below)
Bonds maturing on or before September 1, 20_ are not subject to optional call and redemption
prior to maturity. The Bonds maturing on or after September 1, 20_ (other than the Alberhill
Term Bonds) may be redeemed at the option of the Authority, from any source of available
funds, prior to maturity on any date on or after September 1, 20 as a whole, or in part from
maturities of the Local Obligations simultaneously redeemed, if any redemption of Local
Obligations is being made in conjunction with such optional redemption, and otherwise from
such maturities as are selected by the Authority, and by lot within a maturity, at a redemption
price equal to the par amount of the Bonds to be redeemed, together with accrued interest
thereon to the date of redemption, without premium.
-10-
The Alberhill Term Bonds may be redeemed, at the option of the Authority, as a whole,
or in part, on any Interest Payment Date, from all or a portion of the Alberhill Local Obligation
Term Bond simultaneously so redeemed, in such amounts as may be selected by the Authority
by lot, at the following redemption prices expressed as a percentage of the principal amount to
be redeemed, together with accrued interest to the date of redemption:
Redemption Dates
Redemption Prices
September 1, 20_ and March 1, 20_
103%
September 1,20 and March 1, 20_
102
September 1, 20_ and March 1, 20_
101
Any Interest Payment Date thereafter
100
Prior to consenting to the optional prepayment of any Local Obligation which it has
purchased, the Authority will deliver to the Trustee a certificate of an Independent Accountant
verifying that, following such optional prepayment of the Local Obligations and redemption of
Bonds, the principal and interest generated from the remaining Local Obligations is adequate to
make the timely payment of principal and interest due on the Bonds will remain Outstanding
under the Indenture following such optional redemption.
Special Redemption. The Bonds (other than the Alberhill Term Bonds) are subject to
special redemption on any Interest Payment Date from proceeds of early redemption of Local
Obligations from the prepayment of Special Taxes within a Taxing Jurisdiction in connection
with Local Obligations, in whole or in part, from maturities corresponding proportionately to the
maturities of the Local Obligations simultaneously redeemed, at the principal amount thereof,
plus a premium expressed below as a percentage of the principal amount so redeemed, plus
accrued interest to the date of redemption thereof:
Redemption Dates Premium
Mandatory Sinking Fund Redemption. The Bonds maturing on September 1, 20_
are subject to mandatory sinking fund redemption prior to maturity, in part, on September 1,
20 , and on each September 1 thereafter by lot, from sinking fund payments at a redemption
price equal to the principal amount of Bonds to be redeemed, together with accrued interest to
the date of redemption, without premium, as follows:
Redemption Date Redemption
(September 1) Amount
-11-
The Bonds maturing on September 1, 20_ and bearing interest at % per annum
(the "Alberhill Term Bonds ") are subject to mandatory sinking fund redemption prior to
maturity, in part, on September 1, 2015, and on each September 1 thereafter by lot, from
sinking fund payments at a redemption price equal to the principal amount of Bonds to be
redeemed, together with accrued interest to the date of redemption, without premium, as
follows:
Redemption Date Redemption
(September 1) Amount
(maturity)
The Alberhill Term Bonds have been created to account for an anticipated prepayment
of special taxes in CFD No. 2005 -2. Although the Alberhill Term Bonds refer to CFD No. 2005-
2, they are payable, like all of the other Bonds, from Revenues generated from all of the Local
Obligations.
Notice of Redemption. The Trustee on behalf, and at the expense, of the Authority will
mail (by first class mail, postage prepaid) notice of any redemption to the respective Owners of
any Bonds designated for redemption at their respective addresses appearing on the Bond
Register, and to the Securities Depositories and to the Information Services, at least thirty (30)
but not more than sixty (60) days prior to the date fixed for redemption. Neither failure to
receive any such notice so mailed nor any defect therein will affect the validity of the
proceedings for the redemption of such Bonds or the cessation of the accrual of interest
thereon. The notice will state the date of the notice, the redemption date, the redemption place
and the redemption price and will designate the CUSIP numbers, the Bond numbers and the
maturity or maturities (in the event of redemption of all of the Bonds of such maturity or
maturities in whole) of the Bonds to be redeemed, and will require that such Bonds be then
surrendered at the Trust Office of the Trustee for redemption at the redemption price, giving
notice also that further interest on such Bonds will not accrue after the redemption date.
In addition, further notice will be given by the Trustee by first class mail to any
Bondowner whose Bond has been called for redemption but who has failed to submit his Bond
for payment by the date which is sixty days after the redemption date, but no defect in said
further notice nor any failure to give or receive all or any portion of such further notice will in any
manner defeat the effectiveness of a call for redemption.
In the case of an optional or special redemption of Bonds, such notice may state that
such redemption is subject to receipt by the Trustee, on or before the date fixed for redemption,
of moneys sufficient to pay the redemption price of the Bonds to be redeemed. Unless funds for
the optional or special redemption of any Bonds are irrevocably deposited with the Trustee prior
to rendering notice of redemption to the Bondowners, such notice shall state that such
redemption is subject to the deposit of funds by the Authority. Any notice of optional redemption
shall be cancelled and annulled if for any reason funds will not be or are not available on the
date fixed for redemption for the payment in full of the Bonds then called for redemption, and
such cancellation shall not constitute an Event of Default under the Indenture.
Selection of Bonds of a Maturity for Redemption. Unless otherwise provided in the
Indenture, whenever provision is made for the redemption of less than all of the Bonds of a
maturity, the Trustee will select the Bonds to be redeemed from all Bonds of such maturity not
12-
previously called for redemption, by lot in any manner which the Trustee in its sole discretion
deems appropriate and fair. For purposes of such selection, all Bonds will be deemed to be
comprised of separate $5,000 authorized denominations, and such separate authorized
denominations will be treated as separate Bonds which may be separately redeemed.
Partial Redemption of Bonds. In the event only a portion of any Bond is called for
redemption, then upon surrender of such Bond the Authority will execute and the Trustee shall
authenticate and deliver to the Owner thereof, at the expense of the Authority, a new Bond or
Bonds of the same maturity date, of authorized denominations in aggregate principal amount
equal to the unredeemed portion of the Bond to be redeemed.
Effect of Redemption. From and after the date fixed for redemption, if funds available
for the payment of the principal of and interest (and premium, if any) on the Bonds so called for
redemption have been duly provided, such Bonds so called will cease to be entitled to any
benefit under the Indenture other than the right to receive payment of the redemption price, and
no interest will accrue thereon from and after the redemption date specified in such notice.
Payment, Registration, Transfer and Exchange of Bonds
Book -Entry Only System. The Bonds will be issued as fully registered bonds,
registered in the name of Cede & Co. as nominee of The Depository Trust Company, New York,
New York ( "DTC "), and will be available to actual purchasers of the Bonds (the 'Beneficial
Owners') in the denominations set forth above, under the book -entry system maintained by
DTC, only through brokers and dealers who are or act through securities brokers and dealers,
banks, trust companies, clearing corporations and other organizations maintaining accounts
with DTC ( "DTC Participants ") as described herein. Beneficial Owners will not be entitled to
receive physical delivery of the Bonds. See "THE BONDS — Book -Entry Only System." In the
event that the book - entry-only system is no longer used with respect to the Bonds, the Bonds
will be registered and transferred in accordance with the Indenture. See "THE BONDS —
Book -Entry Only System."
Transfer of Bonds. Subject to the book -entry only provisions of the Indenture, any
Bond may in accordance with its terms, be transferred, upon the Bond Register maintained by
the Trustee, by the person in whose name it is registered, in person or by his duly authorized
attorney, upon surrender of such Bond for cancellation, accompanied by delivery of a written
instrument of transfer in a form approved by the Trustee, duly executed. Whenever any Bond is
surrendered for transfer, the Authority will execute and the Trustee will authenticate and deliver
to the transferee a new Bond or Bonds of like tenor, maturity and aggregate principal amount.
No Bonds selected for redemption will be subject to transfer, nor shall any Bond be subject to
transfer during the fifteen days prior to the selection of Bonds for redemption.
The cost of printing any Bonds and any services rendered or any expenses incurred by
the Trustee in connection with any transfer or exchange will be paid by the Authority. However,
the Owners of the Bonds will be required to pay any tax or other governmental charge required
to be paid for any exchange or registration of transfer and the Owners of the Bonds will be
required to pay the reasonable fees and expenses of the Trustee and Authority in connection
with the replacement of any mutilated, lost or stolen Bonds.
Exchange of Bonds. Subject to the book -entry only provisions of the Indenture, Bonds
may be exchanged at the Trust Office of the Trustee for Bonds of the same tenor and maturity
and of other authorized denominations. No Bonds selected for redemption will be subject to
-13-
exchange, nor shall any Bond be subject to exchange during the fifteen days prior to the
selection of Bonds for redemption.
Bond Register. The Trustee will keep or cause to be kept at its Trust Office sufficient
records for the registration and transfer of the Bonds, which will be the Bond Register and shall
at all times during regular business hours be open to inspection by the Authority upon
reasonable notice; and, upon presentation for such purpose, the Trustee will, under such
reasonable regulations as it may prescribe, register or transfer or cause to be registered or
transferred, on said records, Bonds as hereinbefore provided.
Book -Entry Only System
While the Bonds are subject to the book -entry system, the principal, interest and any
redemption premium with respect to a Bond will be paid by the Trustee to DTC, which in turn is
obligated to remit such payment to its DTC Participants for subsequent disbursement to
Beneficial Owners of the Bonds, as described in Appendix G — "DTC AND THE
BOOK - ENTRY -ONLY SYSTEM." So long as Cede & Co. is the registered owner of the Bonds,
references in this Official Statement to the Owners of the Bonds will mean Cede & Co. and not
the Beneficial Owners of the Bonds. The Authority gives no assurance that DTC or the DTC
Participants will distribute payments or notices to Beneficial Owners.
-14-
Estimated Debt Service Schedules: Bonds and Local Obligations
The Local Obligations acquired with proceeds of the Bonds mature on different dates.
Consequently, the source of security for debt service on the Bonds varies depending upon the
characteristics of the underlying Taxing Jurisdictions. The following table presents the debt
service schedule for the Bonds, assuming there are no redemptions of Bonds prior to their
respective maturities (other than as a result of mandatory sinking fund payments).
TABLE 1
DEBT SERVICE SCHEDULE FOR THE BONDS
Year Ending Total
September 1 Principal Interest Debt Service
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
Total
-15-
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Debt Service Coverage for the Bonds
Scheduled payments of principal of, including mandatory sinking fund payments, and
interest on the Bonds equals 100% of the aggregate scheduled debt service on the Local
Obligations. Annual debt service for each of the Local Obligations has been structured so that
Maximum Special Taxes levied on property categorized as Developed Property in the applicable
Taxing Jurisdiction for Fiscal Year 2014 -15, less the applicable Taxing Jurisdiction's
Administrative Expense Requirement and assuming no delinquencies, would generate in each
Fiscal Year not less than 110% of debt service payable with respect to such Local Obligations.
See "THE COMMUNITY FACILITIES DISTRICTS."
SECURITY FOR THE BONDS
General
As described below, the Bonds are payable from Revenues, consisting primarily of
amounts received by the Authority as the result of its acquisition of the Local Obligations.
The Bonds are special obligations of the Authority payable solely from and
secured solely by the Revenues. The Bonds are not a debt or liability of the City, the
County, the State of California or any political subdivisions thereof other than the
Authority to the limited extent described in this Official Statement. The faith and credit of
the Authority are not pledged to secure the payment of Bonds, nor are any of its
members liable therefor, nor in any event shall the Bonds or any interest or redemption
premium thereunder be payable out of any funds or properties other than those of the
Authority as set forth in the Indenture. The Authority has no taxing power.
Revenues and Flow of Funds
Bonds; Revenues. The Bonds are secured by a first lien on and pledge of all of the
Revenues. So long as any of the Bonds are Outstanding, the Revenues will not be used for any
purpose except as is expressly permitted by the Indenture.
Collection by the Trustee. The Trustee will collect and receive all of the Revenues,
and any Revenues and collected or received by the Authority will be deemed to be held, and to
have been collected or received, by the Authority as the agent of the Trustee and shall forthwith
be paid by the Authority to the Trustee. The Trustee is also entitled to and will take all steps,
actions and proceedings reasonably necessary in its judgment to enforce, either jointly with the
Authority or separately, all of the rights of the Authority and all of the obligations of the City and
the Districts under the Local Obligations.
Deposit of Revenues. All Revenues derived from the Local Obligations will be promptly
deposited by the Trustee upon receipt thereof in the Revenue Fund. Any Revenues which
represent the payment of delinquent principal of or interest on an issue of Local Obligations will
immediately be deposited to the Reserve Fund to the extent necessary to replenish, to the
extent the Reserve Fund deficiency resulted from the delinquency in the payment of scheduled
debt service on such Local Obligations, the amount in the Reserve Fund to the Reserve
Requirement, with any amount in excess of that needed to replenish the Reserve Fund to be
deposited to the Revenue Fund for transfer as provided in the Indenture.
17-
Application of Revenues. On each Interest Payment Date, the Trustee shall transfer
from the Revenue Fund, and deposit into the following respective accounts for the Bonds, the
following amounts in the following order of priority, the requirements of each such account
(including the making up of any deficiencies in any such account resulting from lack of
Revenues sufficient to make any earlier required deposit) at the time of deposit to be satisfied
before any transfer is made to any account subsequent in priority:
Interest Account. On each Interest Payment Date, the Trustee will deposit in the
Interest Account an amount required to cause the aggregate amount on deposit in the
Interest Account to equal the amount of interest becoming due and payable on such
Interest Payment Date on all Outstanding Bonds on such date. All moneys in the
Interest Account will be used and withdrawn by the Trustee solely for the purpose of
paying interest on the Bonds as it shall become due and payable (including accrued
interest on any Bonds redeemed prior to maturity). In the event that the amounts on
deposit in the Interest Account on any Interest Payment Date, after any transfers from
the Reserve Fund, are insufficient for any reason to pay the aggregate amount of
interest then coming due and payable on the Outstanding Bonds, the Trustee will apply
such amounts to the payment of interest on each of the Outstanding Bonds on a pro rata
basis.
Principal Account. On each March 1, the Trustee will deposit in the Principal
Account an amount equal to one -half of the principal amount of the Bonds that will
become due and payable on the next succeeding September 1 or required to be
redeemed on such date. On each September 1 on which principal of the Bonds will be
payable, the Trustee will deposit in the Principal Account an amount required to cause
the aggregate amount on deposit in the Principal Account to equal the principal amount
of, and premium (if any) on, the Bonds coming due and payable on such date, or
required to be redeemed on such date; provided, however, that no amount will be
deposited to effect an optional redemption unless the Trustee has first received a
certificate of an Independent Accountant certifying that such deposit to effect an optional
redemption of the Bonds will not impair the ability of the Authority to make timely
payment of the principal of and interest on the Bonds, assuming for such purposes that
the City and the Districts continue to make timely payments on all Local Obligations not
then in default. All moneys in the Principal Account will be used and withdrawn by the
Trustee solely for the purpose of (i) paying the principal of the Bonds at the maturity
thereof or (ii) paying the principal of and premium (if any) on any Bonds upon the
redemption thereof.
Reserve Fund. On each Interest Payment Date on which the balance in the
Reserve Fund is less than the Reserve Requirement, after making deposits required into
the Interest Account and the Principal Account, the Trustee shall transfer from the
Revenue Fund an amount sufficient to increase the balance in the Reserve Fund to the
Reserve Requirement by depositing the amount necessary to make the various
accounts therein equal to, together, the Reserve Requirement, provided the value of the
moneys deposited therein, as invested, will be valued at market value on such transfer
date for purposes of making such determination.
Deficiencies. If on any Interest Payment Date the amount on deposit in the Revenue
Fund is inadequate to make the transfers described above as a result of a payment default on
an issue of Local Obligations, the Trustee will immediately notify the issuer of such Local
Obligations of the amount needed to make the required deposits described above under
M.
"Application of Revenues." In the event that following such notice the Trustee receives
additional payments from the issuer of such Local Obligation to cure such shortfall, the Trustee
shall deposit such amounts to the Revenue Fund for application in accordance with the
Indenture.
Deposit into Rebate Fund. On each Interest Payment Date after making the transfers
described above, upon receipt of a Request of the Authority to do so, the Trustee will transfer
from the Revenue Fund to the Rebate Fund for deposit in the accounts therein the amounts
specified in such Request.
Surplus Fund. On September 1 of each year, after making the deposits described
above, the Trustee will transfer all amounts remaining on deposit in the Revenue Fund to the
Surplus Fund.
Reserve Fund
An account for each issue of Local Obligations will be established in the Reserve Fund
(each, an "Account'). The Reserve Requirement will initially be deposited into the following
Accounts in an amount equal to the portion of the Reserve Requirement initially allocable to
each such Account:
$
in the CFD No
• $
in the CFD No
• $
in the CFD No
$
in the CFD No
$
in the CFD No
$
in the CFD No
95 -1 Account
2003 -2 Account
2004 -3 -1 Account
2004 -3 -2 Account
2005 -1 Account
2005 -2 Account
$ in the CFD No. 2005 -6 Account
$ in the CFD No. 2006 -2 Account
In the event that the amount of the Reserve Requirement is changed, the Trustee will,
upon receipt of a Request of the Authority, adjust the shares of each Account to reflect the new
Reserve Requirement.
Subject to the limitations set forth in the following paragraph, moneys in the Reserve
Fund will be used to pay the principal of and interest on the Bonds when the moneys in the
Interest Account and the Principal Account of the Revenue Fund are insufficient for that
purpose. In addition, amounts in the Reserve Fund may be applied (i) in connection with an
optional redemption or defeasance of Bonds, (ii) when the balance therein equals the principal
and interest due on the Bonds to and including maturity, or (iii) when amounts in certain
accounts of the Reserve Fund are transferred to the Interest Account and the Principal Account
as a credit against the payments due on the Local Obligations on the transfer dates specified
below.
If the amounts in the Interest Account or the Principal Account of the Revenue Fund are
insufficient to pay the principal of or interest on the Bonds when due or mandatory sinking fund
payments on the Bonds when due, the Trustee shall withdraw from the applicable Reserve
Account or Reserve Accounts an amount equal to the deficiency resulting from the delinquency
in the payment of scheduled debt service on the applicable series of Local Obligations and
transfer such amount to the Interest Account, the Principal Account of the Revenue Fund or
19-
both, as applicable. If there are insufficient funds on deposit in a Reserve Account to cover a
deficiency resulting from the delinquency in the payment of scheduled debt service on the
applicable series of Local Obligations, the Trustee shall withdraw from each of the other
Reserve Accounts a share of such insufficiency based upon the proportion of the amount in a
Reserve Account to the total amount on deposit in the Reserve Fund and transfer such amounts
to the Interest Account, the Principal Account of the Revenue Fund or both, as applicable.
Upon the transfer by the Trustee to the Reserve Fund of delinquent Revenues, such
Revenues shall be allocated to the Reserve Accounts as follows:
First, to the Reserve Account for any series of Local Obligations, other than the Reserve
Account to which such delinquent Revenues relate, that amount necessary to increase the
amount on deposit in such account to the applicable Proportionate Share of the Reserve
Requirement if the deficiency in the amount on deposit in such account resulted from draws on
such account due to delinquencies in the payment of scheduled debt service on that series of
Local Obligations from which the Local Obligations Delinquency Revenues were received. In
the event that such delinquent Revenues are not sufficient to increase the amount on deposit in
each of applicable Reserve Accounts to the applicable Proportionate Share of the Reserve
Requirement, a Proportionate Share of such delinquent Revenues shall be deposited in each
such Reserve Account.
Second, after increasing the amount on deposit in each applicable Reserve Account to
the applicable Proportionate Share of the Reserve Requirement pursuant to the first step, to the
Reserve Account for the series of Local Obligations from which the delinquent Revenues were
received that amount necessary to replenish the amount on deposit in such Reserve Account to
the applicable Proportionate Share of the Reserve Requirement.
Third, after making all deposits pursuant to the first and second steps, the remaining
delinquent Revenues, if any, shall be transferred to the Revenue Fund.
When amounts in an account of the Reserve Fund are sufficient to repay the remaining
principal and interest due on the related Local Obligations that will be applied to the Bonds,
such amounts will be transferred to the Interest Account and the Principal Account as a credit
against the payments due on such Local Obligations, with the amount transferred from an
account being deposited first to the Interest Account as a credit on the interest due on such
Local Obligations on such date and the balance being deposited to the Principal Account as a
credit on the principal due on such Local Obligations on such date.
Surplus Fund
Any amounts transferred to the Surplus Fund will no longer be considered Revenues
and will not be pledged to repay the Bonds. So long as Local Obligations are outstanding, on
September 1 of each year after setting aside any amount specified in a Request of the Authority
as necessary to pay Administrative Expenses, all of the remaining balance, if any, in the Surplus
Fund will (i) be transferred by the Trustee to the City Treasurer for credit to the special tax fund
of the Community Facilities Districts, and each Community Facilities District shall be credited a
percentage of the total amount available on each September 1 that is equal to the percentage
which its outstanding Local Obligation represents of all outstanding Local Obligations held by
the Trustee as of the date of disbursement or (ii) as set forth in a request of the City be applied
to the redemption of Local Obligations pursuant to the terms of the Local Obligations Indenture
with each Community Facilities District to be credited a percentage of the total amount available
1z�3
on each September 1 that is equal to the percentage which its outstanding Local Obligations
represents of all outstanding Local Obligations held by the Trustee as of the date of
disbursement.
In the event that the Local Obligations have been prepaid or defeased in whole, then any
amounts in the Surplus Fund may be used by the Authority for any lawful purpose, including, but
not limited to, the payment of expenses of the Authority, the City or the Districts relating to the
Bonds, the Local Obligations, the Districts, or any other purpose as specified in a Request of the
Authority delivered to the Trustee.
No Additional Bonds Except to Refund Bonds
The Authority may issue Additional Bonds secured on a parity with the Bonds
( "Additional Bonds "), in such principal amount as shall be determined by the Authority, pursuant
to a Supplemental Indenture adopted or entered into by the Authority, but only for the purpose
of refunding the Bonds or Additional Bonds.
Additional Bonds may only be issued subject to the following conditions precedent
established by the Indenture:
(a) The Authority shall be in compliance with all covenants set forth in the Indenture
and all Supplemental Indentures.
(b) The proceeds of such Additional Bonds will be applied to accomplish a refunding
of all or a portion of the Bonds or any Additional Bonds Outstanding.
(c) The Supplemental Indenture providing for the issuance of such Additional Bonds
must provide that interest thereon will be payable on September 1 and March 1, and principal
thereof will be payable on September 1 in any year in which principal is payable.
(d) Prior to the delivery of any Additional Bonds, a written certificate must be
provided to the Authority and the Trustee by an Independent Financial Consultant which
certifies that the Annual Debt Service in each Bond Year on the Additional Bonds does not
exceed the Annual Debt Service in each Bond Year on the Bonds defeased or redeemed with
the proceeds of such Additional Bonds.
(e) The Supplemental Indenture providing for the issuance of Additional Bonds may
provide for the establishment of separate funds and accounts.
(f) No Event of Default has occurred and be continuing with respect to the Bonds or
any of the Local Obligations.
(g) The Authority will deliver to the Trustee a written Certificate of the Authority
certifying that the conditions precedent to the issuance of such Additional Bonds set forth in
subsections (a), (b), (c), (d) and (f) above have been satisfied and that, upon the issuance of
such Additional Bonds an amount equal to the Reserve Requirement, as adjusted (if necessary)
to reflect the issuance of such Additional Bonds will be on deposit in the Reserve Fund.
-21-
SECURITY FOR THE LOCAL OBLIGATIONS
General
Each Local Obligation is a limited obligation of the applicable District payable solely from
Net Special Taxes (defined below) collected in the Taxing Jurisdiction and amounts deposited
by the District in the Special Tax Fund (exclusive of the Administrative Expense Account). Each
District's limited obligation to pay the principal of, premium, if any, and interest on the applicable
Local Obligations from Net Special Taxes collected in the Taxing Jurisdiction and amounts in
the Special Tax Fund is absolute and unconditional.
No Local Obligation (and no Parity Bonds issued under the Local Obligation Bond
Indenture relating to the Local Obligations, each a "Local Obligation Parity Bond ") is a legal or
equitable pledge, charge, lien or encumbrance upon any of the District's property, or upon any
of its income, receipts or revenues, except the Net Special Taxes collected in the applicable
Taxing Jurisdiction and other amounts in the Special Tax Fund.
The Special Taxes levied in one District may not be used to pay debt service on
the Local Obligations of another District. Similarly, Special Taxes levied in one
Improvement Area may not be used to pay debt service of another Improvement Area,
and vice versa, or the Local Obligations of another District.
Except for the Net Special Taxes for each District, neither the credit nor the taxing
power of the District or the City is pledged for the payment of the Local Obligations or
related interest, and no Owner of the Bonds may compel the exercise of taxing power by
a District or the forfeiture of any of its property. The principal of and interest on the Local
Obligations and premiums upon the redemption thereof, if any, are not a debt of any
District or the City, the State of California or any of its political subdivisions within the
meaning of any constitutional or statutory limitation or restriction.
Special Taxes; Gross Special Taxes; Net Special Taxes
The "Special Taxes" for each Taxing Jurisdiction are levied and collected according to
the rate and method of apportionment (each, a "Rate and Method ") established for such Taxing
Jurisdiction. See Appendix A — "INFORMATION REGARDING THE COMMUNITY
FACILITIES DISTRICTS" and Appendix D — "RATE AND METHOD OF APPORTIONMENT OF
SPECIAL TAXES FOR EACH TAXING JURISDICTION."
The "Net Special Taxes" pledged by each District to the related Local Obligations (and
any related Parity Bonds) is defined in the Local Obligation Bond Indentures as "Gross Special
Taxes" minus amounts set aside to pay Administrative Expenses. See " -- Administrative
Expense Requirement" below.
"Gross Special Taxes" is defined as the amount of all Special Taxes received by the
District, together with the proceeds collected from the sale of property pursuant to the
foreclosure provisions of the related Local Obligation Bond Indenture for the delinquency of
such Special Taxes remaining after the payment of all costs related to the foreclosure actions.
Each District covenants in the Local Obligation Bond Indenture relating to its Local
Obligations that it will receive all Special Taxes in trust for the Owners of the related Local
Obligations, and will instruct the Treasurer to deposit all Special Taxes with the Fiscal Agent
immediately upon their apportionment to the District, and the District shall have no beneficial
-22-
right or interest in the amounts so deposited except as provided by the Local Obligation Bond
Indenture.
Except for the portion of any prepayment of Special Taxes to be deposited into the
Redemption Account or the Improvement Fund, as applicable, established under the applicable
Local Obligation Bond Indenture, the Fiscal Agent under the Local Obligation Bond Indenture
will, on each date on which the Special Taxes are received from the District, deposit the Special
Taxes in the Special Tax Fund to be held in trust for the Authority as the owner of the related
Local Obligations. The Fiscal Agent will transfer the Special Taxes on deposit in the Special
Tax Fund on the dates and in the amounts set forth in the Local Obligation Bond Indenture, in
the following order of priority, to:
(1) The Administrative Expense Account up to the Administrative Expense
Requirement;
(2) The Interest Account of the Special Tax Fund;
(3) The Principal Account of the Special Tax Fund;
(4) The Reserve Account up to the District's Proportionate Share of the Reserve
Requirement;
(5) The Redemption Account of the Special Tax Fund; and
(6) The Surplus Fund.
The Special Tax is collected in the manner and at the same time as ad valorem property
taxes are collected and is subject to the same penalties and the same procedure, sale, and lien
priority in case of delinquency as is provided for ad valorem property taxes.
Administrative Expense Requirement
The Fiscal Agent will deposit the first available Special Taxes from the Special Tax Fund
to the Administrative Expense Fund in an amount such that the total amounts transferred to the
Administrative Expense Fund in any Bond Year do not exceed the Administrative Expense
Requirement.
Set forth below is the initial Administrative Expense Requirement for each Taxing
Jurisdiction:
Administrative Expense
Taxing Jurisdiction
Requirement
CFD No. 95 -1
$25,000
CFD No. 2003 -2
55,000
CFD No. 2004 -3 -1
55,000
CFD No. 2004 -3 -2
55,000
CFD No. 2005 -1
40,000
CFD No. 2005 -2
55,000
CFD No. 2005 -6
35,000
CFD No. 2006 -2
35,000
The Administrative Expense Requirement for each Taxing Jurisdiction is subject to
increase under the applicable Local Obligation Bond Indenture. See Appendix B —
"SUMMARY OF PRINCIPAL LEGAL DOCUMENTS."
-23-
Local Obligation Parity Bonds
Refunding Bonds. Each Local Obligation Bond Indenture authorizes the applicable
District to issue additional bonds secured by Net Special Taxes on a parity with the related
Local Obligations for the purpose of refunding all or a portion of the Local Obligations or Local
Obligation Parity Bonds of such District.
Bonds for Capital Facilities. The Local Obligation Bond Indenture for each of the
Local Obligations except the CFD No. 95 -1 Bonds, the CFD No. 2004 -3 -1 Bonds and the CFD
No. 2006 -2 Bonds authorizes additional bonds secured by Net Special Taxes on a parity with
the related Local Obligation Parity Bonds for the purpose of financing public facilities.
For a description of the conditions established in each Local Obligation Bond Indenture
for the issuance of Local Obligation Parity Bonds, see Appendix B — "SUMMARY OF
PRINCIPAL LEGAL DOCUMENTS."
Priority of Lien
Each installment of the Special Taxes and any interest and penalties thereon,
constitutes a lien on the parcel of land on which it was imposed until the same is paid. Such lien
is co -equal to and independent of the lien for general taxes, any other community facilities
district special taxes and the lien securing special assessments. See 'THE COMMUNITY
FACILITIES DISTRICTS —The Districts in the Aggregate."
Covenants of the Districts
In each Local Obligation Bond Indenture, each District covenants as follows, among
other things:
Punctual Payment. It will duly and punctually pay or cause to be paid the principal of
and interest on each related Local Obligation (and any related Local Obligation Parity Bond)
issued under its Local Obligation Bond Indenture, together with the premium, if any to the extent
that Net Special Taxes and other amounts pledged under the Local Obligation Bond Indenture
are available therefor.
Against Encumbrance. It will not mortgage or otherwise encumber, pledge or place
any charge upon any of the Net Special Taxes except as provided in the related Local
Obligation Bond Indenture, and will not issue any obligation or security having a lien or charge
upon the Net Special Taxes superior to or on a parity with the related Local Obligations (other
than related Local Obligation Parity Bonds). Nothing in the Local Obligation Bond Indenture
prevents the District from issuing or incurring indebtedness which is payable from a pledge of
Net Special Taxes which is subordinate in all respects to the pledge of Net Special Taxes to
repay the related Local Obligations and the related Local Obligation Parity Bonds.
Levy of Special Tax. So long as any Local Obligations or Local Obligation Parity Bonds
are Outstanding, the legislative body of the District will levy the related Special Tax in an
amount sufficient, together with other amounts on deposit in the Special Tax Fund and available
for such purpose, to pay the principal of and interest on such Local Obligations and any such
Local Obligation Parity Bonds when due, and the applicable Administrative Expense
Requirement (the "Special Tax Requirement'). Each District further covenants that it will take
no actions that would discontinue or cause the discontinuance of the Special Tax levy or the
-24-
District's authority to levy the Special Tax for so long as the related Local Obligations and any
related Local Obligation Parity Bonds are outstanding.
Commence Foreclosure Proceedings. The District covenants for the benefit of the
Owners of the Local Obligations (which is the Authority) and any Local Obligation Parity Bonds
that it:
(i) will commence judicial foreclosure proceedings against parcels with delinquent
Special Taxes in excess of $5,000 by the October 1 following the close of each
Fiscal Year in which such Special Taxes were due, and
(ii) will commence judicial foreclosure proceedings against all parcels with
delinquent Special Taxes by the October 1 following the close of each Fiscal
Year in which it receives Special Taxes in an amount which is less than 95% of
the total Special Tax levied and the amount on deposit in the applicable Reserve
Account is at less than the Proportionate Share of the Reserve Requirement, and
(iii) will diligently pursue such foreclosure proceedings until the delinquent Special
Taxes are paid; provided that, notwithstanding the foregoing, the District may
elect to defer foreclosure proceedings on any parcel so long as the amount in the
Reserve Fund is at least equal to the Reserve Requirement.
Each District may, but is not obligated to, advance funds from any source of legally
available funds in order to maintain the applicable Reserve Account of the Reserve Fund.
Each District covenants that it will deposit the net proceeds of any foreclosure and any
other Delinquency Proceeds in the related Special Tax Fund and will apply such proceeds
remaining after the payment of the Administrative Expense Requirement to pay any delinquent
installments of principal and interest on the Local Obligations of the District and any Local
Obligation Parity Bonds of the District and to make current payments of principal and interest on
the Local Obligations of the District and any Local Obligation Parity Bonds of the District.
Reduction of Maximum Special Taxes. Each District covenants that it will not initiate
proceedings to reduce the maximum Special Tax rates for the applicable Taxing Jurisdiction,
unless, in connection therewith, (i) the District receives a certificate from one or more
Independent Financial Consultants which, when taken together, certify that, on the basis of the
parcels of land and improvements existing in the Taxing Jurisdiction 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 then in effect in the Taxing Jurisdiction)
in each Bond Year for any related Local Obligations and Local Obligation Parity Bonds
Outstanding will equal at least 110% of the sum of the estimated Administrative Expenses and
gross debt service in each Bond Year on all related Local Obligations and any related Local
Obligation Parity Bonds to remain Outstanding after the reduction is approved, (ii) the District
finds that any reduction made under such conditions will not adversely affect the interests of the
Owners of the related Local Obligations and any related Local Obligation Parity Bonds, and
(iii) the District is not delinquent in the payment of the principal of or interest on the related Local
Obligations and any related Local Obligation Parity Bonds. For purposes of estimating
Administrative Expenses for the foregoing calculation, the Independent Financial Consultants
shall compute the Administrative Expenses for the current Fiscal Year and escalate that amount
by 2% in each subsequent Fiscal Year.
-25-
THE COMMUNITY FACILITIES DISTRICTS
The Districts in the Aggregate
Introduction. Set forth under this caption is certain information describing the Taxing
Jurisdictions in the aggregate. Appendix A contains separate sections on each Taxing
Jurisdiction. Although the Authority and the Districts believe the information with respect to the
Taxing Jurisdictions in the aggregate is relevant to an informed decision to purchase the Bonds;
investors should be aware that the debt service on one Local Obligation may not be used to
make up any shortfall in the debt service on another Local Obligation. Moreover, the parcels in
each of the Taxing Jurisdictions are taxed according to that Taxing Jurisdiction's specific Rate
and Method, and the Special Taxes may only be applied to pay the debt service on the Local
Obligations of the Taxing Jurisdiction in which they are levied and not on the debt service of any
other Local Obligations. See Appendix D — "RATE AND METHOD OF APPORTIONMENT OF
SPECIAL TAXES FOR EACH TAXING JURISDICTION."
Potential investors should also be aware that Special Taxes are levied against individual
parcels within each Taxing Jurisdiction and that any such parcel may have a value -to -lien ratio
less than the overall value -to -lien ratio for such Taxing Jurisdiction and less than the
value -to -lien ratio of the Taxing Jurisdictions in the aggregate.
Development Status. All of the Taxing Jurisdictions except CFD No. 95 -1 are
developed with residential units. The land in CFD No. 95 -1 is zoned for commercial use and is
fully developed. The following table shows the current status of development in the Taxing
Jurisdictions.
As of December 16, 2014, there were 2,694 dwelling units completed and sold to
individual homeowners, 113 parcels in various stages of development and 67 parcels remaining
undeveloped. The table below summarizes the total dwelling units completed and sold to
individual homeowners as of December 16, 2014 and total number of dwelling units expected at
buildout within each of the Taxing Jurisdictions.
-26-
Totals:
2,694 124 2,818
(') Equals the estimated number of completed dwelling units no longer owned by developers as of March 1, 2014.
(2) Parcels for which building permits have been obtained as of December 16, 2014, but which have not been completed
and conveyed to purchasers.
(3) Parcels with no building permits obtained as of March 1, 2014.
(4) Equals Acreage of Parcels with no building permits obtained as of March 1, 2014.
(S) Equals the Sold Dwelling Units column divided by the Total Developed Parcels column, expressed as a percentage.
(G) CFD No. 95 -1 includes 7 developed commercial parcels.
Source: Albert A. Webb Associates.
Delinquencies. The City, along with other local agencies, has participated in a program
in which it sold receivables representing certain delinquent special taxes and assessments (the
"Receivables ") for fiscal years 2008 -09 through 2014 -15 to the California Statewide
Communities Development Authority ( "CSCDA ") at a purchase price at least equal to 100% of
the principal amount of the Receivables sold. The Receivables have included certain delinquent
Special Taxes with respect to the Taxing Jurisdictions. CSCDA financed the purchase through
the issuance of multiple series of certificates of participation to a private investor; the certificates
represent an interest in the Receivables purchased from the City and the other participating
local agencies. Although the City anticipates that it will participate in this program for future
fiscal years, there is no assurance that it will do so, or that any such Receivables sold in the
future will represent delinquent Special Taxes with respect to the Taxing Jurisdictions. See
"SPECIAL RISK FACTORS — Special Tax Delinquencies."
Value -To -Lien Ratios. The assessed values of all of the taxable property in the Taxing
Jurisdictions, as established by the County Assessor for Fiscal Year 2014 -15, was
$696,469,560. The direct and overlapping land secured special tax and assessment bonded
indebtedness (including the Local Obligations but excluding general obligation bonded
indebtedness) within the Taxing Jurisdictions as of December 16, 2014 was approximately
$131,461,919. The following table sets forth the aggregate assessed value -to -lien ratios of all
the taxable property in the Taxing Jurisdictions based on the Fiscal Year 2014 -15 assessed
-27-
TABLE 3
LAKE ELSINORE PUBLIC FINANCING AUTHORITY
THE
TAXING JURISDICTIONS
IN AGGREGATE
DEVELOPMENT STATUS
AS OF DECEMBER 16,
2014
Total
Total Parcels
Sold
Dwelling
of
Percent Sold to
Taxing
Approximate
Dwelling
Parcels Under
Units
Undeveloped
Undeveloped
Total
Individual
Jurisdiction
Gross Acres
UnitsM
Development(2)
ParcelsM
Land(4)
Parcels
Homeownersr`0
CFD No. 95 -1r °I
19.53
N/A
0
N/A
0
0
7
N/A
CFD No. 2003 -2
205.90
806
0
806
3
3
809
100.00%
CFD No. 2004 -3 -1
94.65
497
12
509
0
0
509
97.64
CFD No. 2004 -3 -2
94.05
512
50
562
0
0
562
91.10
CFD No. 2005 -1
35.53
233
0
233
0
0
233
100.00
CFD No. 2005 -2
79.95
340
49
389
53
0
442
87.40
CFD No. 2005 -6
13.36
144
0
144
0
0
144
100.00
CFD No. 2006 -2
15.37
155
13
168
0
0
1685
92.26
Totals:
2,694 124 2,818
(') Equals the estimated number of completed dwelling units no longer owned by developers as of March 1, 2014.
(2) Parcels for which building permits have been obtained as of December 16, 2014, but which have not been completed
and conveyed to purchasers.
(3) Parcels with no building permits obtained as of March 1, 2014.
(4) Equals Acreage of Parcels with no building permits obtained as of March 1, 2014.
(S) Equals the Sold Dwelling Units column divided by the Total Developed Parcels column, expressed as a percentage.
(G) CFD No. 95 -1 includes 7 developed commercial parcels.
Source: Albert A. Webb Associates.
Delinquencies. The City, along with other local agencies, has participated in a program
in which it sold receivables representing certain delinquent special taxes and assessments (the
"Receivables ") for fiscal years 2008 -09 through 2014 -15 to the California Statewide
Communities Development Authority ( "CSCDA ") at a purchase price at least equal to 100% of
the principal amount of the Receivables sold. The Receivables have included certain delinquent
Special Taxes with respect to the Taxing Jurisdictions. CSCDA financed the purchase through
the issuance of multiple series of certificates of participation to a private investor; the certificates
represent an interest in the Receivables purchased from the City and the other participating
local agencies. Although the City anticipates that it will participate in this program for future
fiscal years, there is no assurance that it will do so, or that any such Receivables sold in the
future will represent delinquent Special Taxes with respect to the Taxing Jurisdictions. See
"SPECIAL RISK FACTORS — Special Tax Delinquencies."
Value -To -Lien Ratios. The assessed values of all of the taxable property in the Taxing
Jurisdictions, as established by the County Assessor for Fiscal Year 2014 -15, was
$696,469,560. The direct and overlapping land secured special tax and assessment bonded
indebtedness (including the Local Obligations but excluding general obligation bonded
indebtedness) within the Taxing Jurisdictions as of December 16, 2014 was approximately
$131,461,919. The following table sets forth the aggregate assessed value -to -lien ratios of all
the taxable property in the Taxing Jurisdictions based on the Fiscal Year 2014 -15 assessed
-27-
value and all direct and overlapping land secured special tax and assessment bonded
indebtedness (including the applicable Local Obligations for each Taxing Jurisdiction but
excluding general obligation bonded indebtedness) on a Taxing Jurisdiction by Taxing
Jurisdiction basis.
Ma
Table 4 will be updated in the Authority's Annual Report made pursuant to its Continuing
Disclosure Certificate to set forth the estimated assessed value -to -lien ratios of taxable property
within each of the Taxing Jurisdictions.
TABLE 4
LAKE ELSINORE PUBLIC FINANCING AUTHORITY
THE TAXING JURISDICTIONS IN AGGREGATE
ASSESSED VALUE -TO -LIEN RATIOS
* Preliminary; subject to change.
I'I Based on aggregate principal amount of the Local Obligations. Does not include any general obligation bonded
indebtedness applicable to the Taxing Jurisdictions.
Ill Reflects Fiscal Year 2014 -15 assessed value of all taxable property in the Taxing Jurisdictions.
(3) Calculated by dividing the Assessed Value column by the Total Outstanding Land Secured Bonded Debt column.
(4) Does not include Fiscal Year 2014 -15 assessed value of three undeveloped parcels, because the value is
insignificant and it is unlikely that the parcels will be developed or taxed to pay the Local Obligations.
(5) Includes Fiscal Year 2014 -15 assessed value of 64 Approved parcels which are taxable to pay the general
obligation bonded debt, however are not likely to be taxed to pay the Local Obligations until such time as they
become Developed.
Source: Albert A. Webb Associates.
-29-
Total
General
Direct and
Outstanding
Obligation
Assessed
Taxing
Local
Overlapping
Land Secured
Bonded
Assessed
Value -to -Lien
Jurisdictions
Obligations(')*
Debt
Bonded Debt
Debt
Total Debt*
Value(2)
Ratio(')*
CFD No. 95 -1
$1,130,000
$13,323
$1,143,323
$1,042
$1,144,365
$18,243,216
15.961
CFD No. 2003 -2(4)
25,555,000
6,017,002
31,572,002
2,120,612
33,692,614
208,234,239
6.601
CFD No. 2004 -3 -1
22,000,000
7,668,410
29,668,410
7,009
29,675,419
122,670,463
4.131
CFD No. 2004 -3 -2
24,715,000
1,527,588
26,242,588
8,133
26,250,721
142,339,275
5.42:1
CFD No. 2005 -1
8,505,000
12,054
81517,054
2,970
8,520,024
51,970,691
6.101
CFD No. 2005 -2o)
22,095,000
2,468,710
24,563,710
5,834
24,569,544
102,100,164
4.16:1
CFD No. 2005 -6
3,075,000
0
3,075,000
1,075
31076,075
18,813,823
6.121
CFD No, 2006 -2
6,675,000
4,832
6,679,832
1,834
6,681,666
32,097,689
4,81:1
Totals:
$113,750,000
$17,711,919
_
$131,461,919
$2,148,509
$133,610,428
$696,469,560
5.30:1
* Preliminary; subject to change.
I'I Based on aggregate principal amount of the Local Obligations. Does not include any general obligation bonded
indebtedness applicable to the Taxing Jurisdictions.
Ill Reflects Fiscal Year 2014 -15 assessed value of all taxable property in the Taxing Jurisdictions.
(3) Calculated by dividing the Assessed Value column by the Total Outstanding Land Secured Bonded Debt column.
(4) Does not include Fiscal Year 2014 -15 assessed value of three undeveloped parcels, because the value is
insignificant and it is unlikely that the parcels will be developed or taxed to pay the Local Obligations.
(5) Includes Fiscal Year 2014 -15 assessed value of 64 Approved parcels which are taxable to pay the general
obligation bonded debt, however are not likely to be taxed to pay the Local Obligations until such time as they
become Developed.
Source: Albert A. Webb Associates.
-29-
The following table sets forth the number of Taxing Jurisdictions and dwelling units
within the Taxing Jurisdictions which will be levied to pay debt service on the Local Obligations
by Bond Year through September 1, 2040, the final maturity date of the Bonds.
TABLE 5
LAKE ELSINORE PUBLIC FINANCING AUTHORITY
THE TAXING JURISDICTIONS IN AGGREGATE
BY BOND YEAR
-30-
Total
Bond Year No. of
Share
Fiscal Year
Direct and
Outstanding
Assessed
Ending
Taxing
of
Dwelling
2014 -15
Local
Overlapping
Land Secured
Value to
September 1 Jurisdictions
Bonds
UnitsM
Assessed Value
Obligations*
Debt
Bonded Debt*
Lien Ratio*
2015
8
100%
2,818
$696,470,010
$113,750,000
$17,711,919
$131,461,919
5.30:1
2016
8
100%
2,818
$696,470,010
$113,750,000
$17,711,919
$131,461,919
5.301
2017
8
100%
2,818
$696,470,010
$113,750,000
$17,711,919
$131,461,919
5.301
2018
8
100%
2,818
$696,470,010
$113,750,000
$17,711,919
$131,461,919
5.301
2019
8
100%
2,818
$696,470,010
$113,750,000
$17,711,919
$131,461,919
5.30:1
2020
8
100%
2,818
$696,470,010
$113,750,000
$17,711,919
$131,461,919
5.30:1
2021
8
100%
2,818
$696,470,010
$113,750,000
$17,711,919
$131,461,919
5.30:1
2022
8
100%
2,818
$696,470,010
$113,750,000
$17,711,919
$131,461,919
5.30:1
2023
8
100%
2,818
$696,470,010
$113,750,000
$17,711,919
$131,461,919
5.30:1
2024
8
100%
2,818
$696,470,010
$113,750,000
$17,711,919
$131,461,919
5.30:1
2025
8
100%
2,818
$696,470,010
$113,750,000
$17,711,919
$131,461,919
5.30:1
2026
8
100%
2,816
$696,470,010
$113,750,000
$17,711,919
$131,461,919
5.30:1
2027
8
100%
2,811
$696,470,010
$113,750,000
$17,711,919
$131,461,919
5.30:1
2028
7
100%
2,811
$678,226,794
$113,750,000
$17,698,596
$131,448,596
5.16:1
2029
7
100%
2,811
$678,226,794
$113,750,000
$17,698,596
$131,448,596
5.16:1
2030
7
100%
2,811
$676,226,794
$113,750,000
$17,698,596
$131,448,596
5.16:1
2031
7
100%
2,811
$678,226,794
$113,750,000
$17,698,596
$131,448,596
5.16:1
2032
7
100%
21811
$678,226,794
$113,750,000
$17,698,596
$131,448,596
5.16:1
2033
7
100%
2,811
$678,226,794
$113,750,000
$17,698,596
$131,448,596
5.16:1
2034
7
100%
2,811
$678,226,794
$113,750,000
$17,698,596
$131,448,596
5.16:1
2035
6
100%
2,811
$678,226,794
$113,750,000
$17,698,596
$131,448,596
5.16:1
2036
2
81%
2,302
$555,556,331
$91,750,000
$10,030,186
$101,780,186
5.46:1
2037
2
45%
1,368
$350,573,514
$51,400,000
$7,544,590
$58,944,590
5.951
2038
1
23%
562
$142,339,275
$25,845,000
$1,527,588
$27,372,588
5.201
2039
1
23%
562
$142,339,275
$25,845,000
$1,527,588
$27,372,588
5.20:1
2040
1
23%
562
$142,339,275
$25,845,000
$1,527,588
$27,372,588
5.20:1
* Preliminary; subject to change.
(1) Includes seven developed
commercial
parcels within CFD No.
95 -1.
Source: Albert A. Webb Associates.
-30-
Average Effective Tax Rates. The following table sets forth the average effective tax
rates for completed dwelling units within each of the Taxing Jurisdictions. The table does not
cover CFD No. 95 -1, which is fully developed with commercial uses.
TABLE 6
LAKE ELSINORE PUBLIC FINANCING AUTHORITY
THE TAXING JURISDICTIONS IN AGGREGATE
AVERAGE DWELLING UNIT EFFECTIVE TAX RATES
Top Taxpayers within the Taxing Jurisdictions. There is no single taxpayer within
the Taxing Jurisdictions that are developed with residential uses that is expected to be
responsible for more than 9.38% of the Special Taxes that are levied to pay debt service on a
Local Obligation. In CFD No. 95 -1, two related property owners own six parcels, developed as
restaurants and retail shops, that are responsible for approximately 98% of the Special Taxes in
CFD No. 95 -1. See Table A -5 for further information. None of the property owners in the
Taxing Jurisdictions will provide continuing disclosure.
The following table sets forth the value -to -lien ratio for property owned by residential
developers within each of the Taxing Jurisdictions other than CFD No. 95 -1.
-31-
Average Other
Average
Total
Average
Average Ad
Taxes and
Effective Tax
Completed
Assessed Value —
Average Taxing
Valorem Taxes
Assessments Per
Rate -
Taxing
Dwelling
Completed
Jurisdiction
Per Completed
Completed
Completed
Jurisdictionsl»
Units(2)
Dwelling Unit(3)
Special Tax
Dwelling Unit
Dwelling Unit
Dwelling Unit
CFD No. 2003 -2
806
$258,355.14
$2,445.19
$2,550.12
$602.43
2,17%
CFD No. 2004 -3 -1
497
246,821.86
4,053.12
2,384.73
611.35
2.86
CFD No. 2004 -3 -2
512
278,006.40
3,913.79
2,521.76
609.88
2.53
CFD No 2005 -1
233
223,050.18
2,804.27
2,211.95
673.31
2.55
CFD No. 2005 -2
340
300,294.60
4,277.84
2,379.88
728.84
2.46
CFD No. 2005 -6
144
130,651.55
1,589.58
1,296.06
227.99
2.38
CFD No. 2006 -2
155
207,081.86
2,922.11
1,888.24
763.16
2.69
(1) CFD No. 95 -1 not included
because it consists of only commercial property and is fully developed.
(2) Equals the estimated number
of completed dwelling
units no longer owned
by developers as of
March 1, 2014.
(3) Only includes
assessed
value on developed parcels.
Source:
Albert A. Webb Associates.
Top Taxpayers within the Taxing Jurisdictions. There is no single taxpayer within
the Taxing Jurisdictions that are developed with residential uses that is expected to be
responsible for more than 9.38% of the Special Taxes that are levied to pay debt service on a
Local Obligation. In CFD No. 95 -1, two related property owners own six parcels, developed as
restaurants and retail shops, that are responsible for approximately 98% of the Special Taxes in
CFD No. 95 -1. See Table A -5 for further information. None of the property owners in the
Taxing Jurisdictions will provide continuing disclosure.
The following table sets forth the value -to -lien ratio for property owned by residential
developers within each of the Taxing Jurisdictions other than CFD No. 95 -1.
-31-
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For additional information concerning the top taxpayers within each of the Taxing
Jurisdictions, see the "Estimated Value -to -Lien Ratios for Top Ten Taxpayers" section for each
Taxing Jurisdiction in Appendix A — 'INFORMATION REGARDING THE COMMUNITY
FACILITIES DISTRICTS." For additional information concerning each of the Taxing
Jurisdictions, see Appendix A — 'INFORMATION REGARDING THE COMMUNITY
FACILITIES DISTRICTS."
-33-
SPECIAL RISK FACTORS
The purchase of the Bonds involves certain investment risks which are discussed
throughout this Official Statement. Each prospective investor should make an independent
evaluation of all information presented in this Official Statement in order to make an informed
investment decision. Particular attention should be given to the factors described below which,
among others, could affect the payment of debt service on the Bonds in general.
Risks of Real Estate Secured Investments Generally
Because the timely payment of debt service on the Bonds will be dependent upon the
timely payment of the Local Obligations and the timely payment of the Local Obligations will be
dependent upon the timely payment of Special Taxes, which are secured ultimately by the
taxable property within the Taxing Jurisdictions, the Bond Owners will be subject to the risks
generally incident to an investment secured by real estate, including, without limitation,
(i) adverse changes in local market conditions, such as changes in the market value of real
property in and around the vicinity of the Taxing Jurisdictions, the supply of or demand for
competitive properties in such area, and the market value of residential property or buildings
and /or sites in the event of sale or foreclosure; (ii) changes in real estate tax rates and other
operating expenses, governmental rules (including, without limitation, zoning laws and laws
relating to endangered species and hazardous materials) and fiscal policies; and (iii) natural
disasters (including, without limitation, earthquakes and floods), which may result in uninsured
losses.
The Bonds are Limited Obligations of the Authority
The Bonds are limited obligations of the Authority payable only from amounts pledged
under the Indenture, which consist primarily of payments made to the Trustee on the Local
Obligations and amounts in the Reserve Fund. Funds for the payment of the principal of and
the interest on the Local Obligations are derived only from payments of Special Taxes. The
amount of Special Taxes that are collected could be insufficient to pay principal of and interest
on the Local Obligations due to non - payment of the Special Taxes levied or due to insufficient
proceeds received from a judicial foreclosure sale of land within the Taxing Jurisdictions
following delinquency. A District's legal obligation with respect to any delinquent Special Taxes
is limited to the institution of judicial foreclosure proceedings under certain circumstances with
respect to any parcels for which Special Taxes is delinquent. The Bonds cannot be accelerated
in the event of any default.
Failure by owners of the parcels within the Taxing Jurisdictions to pay Special Tax
installments when due, delay in foreclosure proceedings, or the inability of the Districts to sell
parcels which have been subject to foreclosure proceedings for amounts sufficient to cover the
delinquent installments of Special Taxes levied against such parcels may result in the inability of
the Districts to make full or timely payments of debt service on the Local Obligations, which
may, in turn, result in the depletion of the Reserve Fund and the inability of the Authority to
make full or timely payment on the Bonds.
-34-
No Obligation of City
The Local Obligations and the interest thereon, and in turn, the Bonds, are not payable
from the general funds of the City. Except with respect to the Special Taxes, neither the credit
nor the taxing power of the Districts is pledged for the payment of the Local Obligations or the
interest thereon, and except to compel a levy of the Special Taxes securing the Local
Obligations, no Owner of the Bonds may compel the exercise of any taxing power by the
Districts or force the forfeiture of any property of the Districts. The principal of, premium, if any,
and interest on the Bonds are not a debt of the Districts or a legal or equitable pledge, charge,
lien or encumbrance upon any of the Districts' property or upon any of the Districts' income,
receipts or revenues, except the Revenues and other amounts pledged under the Indenture.
Potential Early Redemption of Bonds from Prepayments
Property owners within the Taxing Jurisdictions are permitted to prepay their Special
Taxes at any time. Such prepayments will result in a redemption of Local Obligations on the
first March 1 or September 1 which is more than 30 days following the receipt of the
prepayment. The proceeds of the Local Obligations so redeemed will then be used to make a
mandatory redemption of the Bonds. The Bonds will be called on a pro rata basis from the
proceeds of the Local Obligations redeemed from prepayments. See "THE BONDS —
Redemption — Special Redemption."
Payment of Special Taxes is not a Personal Obligation of the Property Owners
Property Owners are not personally obligated to pay their respective Special Taxes.
Rather, the Special Taxes are obligations only against the respective parcels against which they
are levied. If, after a default in the payment of the Special Tax and a foreclosure sale, the
resulting proceeds are insufficient, taking into account other obligations also constituting a lien
against the parcel, the Districts have no personal recourse against the parcel owner.
Assessed Valuations
The Authority has not commissioned an appraisal of the parcels in the Districts in
connection with the issuance of the Bonds. The estimated valuation of the land in the Taxing
Jurisdictions provided in this Official Statement is based only on the County Assessor's values.
No assurance can be given that any of the land in the Taxing Jurisdictions could be sold
for the assessed value if it should become delinquent and subject to foreclosure proceedings.
Assessed values do not necessarily represent market values. Article XIIIA of the
California Constitution (Proposition 13) defines "full cash value" to mean "the County assessor's
valuation of real property as shown on the 1975/76 roll under 'full cash value', or, thereafter, the
appraised value of real property when purchased or newly constructed or when a change in
ownership has occurred after the 1975 assessment," subject to exemptions in certain
circumstances of property transfer or reconstruction. The "full cash value" is subject to annual
adjustment to reflect increases, not to exceed 2% for any year, or decreases in the consumer
price index or comparable local data, or to reflect reductions in property value caused by
damage, destruction or other factors. Because of the general limitation to 2% per year in
increases in full cash value of properties that remain in the same ownership, the County tax roll
does not reflect values uniformly proportional to actual market values. Moreover, as a result of
-35-
declines in the market value of properties in recent years, assessed valuations of many
properties in the County have declined.
Land Values
The value of land within the Taxing Jurisdictions is an important factor in evaluating the
investment quality of the Bonds. In the event that a property owner defaults in the payment of
Special Tax installment, a District's only remedy is to judicially foreclose on that property.
Prospective purchasers of the Bonds should not assume that the property within the Taxing
Jurisdictions could be sold for the assessed values described in this Official Statement at a
foreclosure sale for delinquent Special Tax installments or for an amount adequate to pay
delinquent Special Tax installments.
The actual market value of the property is subject to future events such as downturn in
the economy, occurrences of certain acts of nature and the decisions of various governmental
agencies as to land use, all of which could adversely impact the value of the land in the Taxing
Jurisdictions which is the security for the Local Obligations, which secure the Bonds. As
discussed herein, many factors could adversely affect property values or prevent or delay
further land development within the Taxing Jurisdictions.
Concentration of Property Ownership in CFD No. 95 -1
Failure of a significant landowner in CFD No. 95 -1 to pay the annual Special Taxes
when due could result in the rapid, total depletion of the CFD No. 95 -1 Account in the Reserve
Fund prior to replenishment from the resale of the property upon a foreclosure or otherwise or
prior to delinquency redemption after a foreclosure sale, if any. In that event, there could be a
default in payments of the principal of and interest on the CFD No. 95 -1 Bonds.
Natural Disasters
The land within the Taxing Jurisdictions, like all California communities, may be subject to
unpredictable seismic activity, fires, floods or other natural disasters. The occurrence of one of
these natural disasters in a Taxing Jurisdiction could result in substantial damage to properties in
such Taxing Jurisdiction 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 natural disasters could result in a greater reliance on
undeveloped property in the payment of Special Taxes,
Hazardous Substances
The value of a parcel may be reduced as a result of the presence of 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.
The Federal Comprehensive Environmental Response, Compensation and Liability Act of 1980,
sometimes referred to as "CERCLA" or the "Superfund Act," is the most well -known and widely
applicable of these laws, but California laws with regard to hazardous substances are also
stringent and similar. Under many of these laws, the owner or operator is obligated to remedy a
hazardous substance condition of property 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
taxed parcels be affected by a hazardous substance, is to reduce the marketability and value of
1982
the parcel by the costs of remedying the condition, because the purchaser, upon becoming
owner, will become obligated to remedy the condition just as is the seller.
Further, it is possible that liabilities may arise in the future with respect to any of the
parcels resulting from the existence, currently, on the parcel of a substance presently classified
as hazardous but which has not been released or the release of which is not presently
threatened, or may arise in the future resulting from the existence, currently on the parcel of a
substance not presently 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 affect the value of a
parcel that is realizable upon a delinquency.
None of the Authority, the Districts or the City has knowledge of any hazardous
substances being located on the property within the Taxing Jurisdictions; however, such entities
have not conducted any investigation with respect to hazardous substances within the Taxing
Jurisdictions.
Parity Taxes and Special Assessments
Property within the Taxing Jurisdictions is subject to taxes and other charges levied by
several other public agencies. See the discussion of direct and overlapping indebtedness under
the heading Appendix A - "INFORMATION REGARDING THE COMMUNITY FACILITIES
DISTRICTS." Neither the Authority, the Districts nor the City has control over the ability of other
entities and districts to issue indebtedness secured by special taxes or assessments payable
from all or a portion of the property within the Districts.
The Special Taxes and any penalties thereon will constitute a lien against the lots and
parcels of land on which they will be annually imposed until they are paid. Such lien is on a
parity with the lien of all special taxes and special assessments levied by other agencies and is
co -equal to and independent of the lien for general ad valorem property taxes regardless of
when they are imposed upon the same property. The Special Taxes have priority over all
existing and future private liens imposed on the property. See "— Bankruptcy and Foreclosure"
below.
None of the Authority, the Districts or the City has control over the ability of other entities
and districts to issue indebtedness secured by special taxes, ad valorem taxes or assessments
payable from all or a portion of the property within the Taxing Jurisdictions. In addition, the
landowners within the Taxing Jurisdictions may, without the consent or knowledge of the
Authority, the Districts or the City, petition other public agencies to issue public indebtedness
secured by special taxes, ad valorem taxes or assessments. Any such special taxes, ad
valorem taxes or assessments may have a lien on such property on a parity with the Special
Taxes and could reduce the estimated value -to -lien ratios for property within the Taxing
Jurisdictions described in this Official Statement.
Disclosures to Future Purchasers
The willingness or ability of an owner of a parcel to pay the Special Tax may be affected
by whether or not the owner was given due notice of the Special Tax authorization at the time
the owner purchased the parcel, was informed of the amount of the Special Tax on the parcel
should the Special Tax be levied at the maximum tax rate and the risk of such a levy and, at the
time of such a levy, has the ability to pay it as well as pay other expenses and obligations. The
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City has caused a notice of the Special Tax that may be levied against the taxable parcels in
each Tax Jurisdiction to be recorded in the Office of the Recorder for the County. While title
companies normally refer to such notices in title reports, there can be no guarantee that such
reference will be made or, if made, that a prospective purchaser or lender will consider such
Special Tax obligation in the purchase of a property within the Districts or lending of money
thereon.
The Mello -Roos Act requires the subdivider (or its agent or representative) of a
subdivision to notify a prospective purchaser or long -term lessor of any lot, parcel, or unit
subject to a Mello -Roos special tax of the existence and maximum amount of such special tax
using a statutorily prescribed form. California Civil Code Section 1102.6b requires that in the
case of transfers other than those covered by the above requirement, the seller must at least
make a good faith effort to notify the prospective purchaser of the special tax lien in a format
prescribed by statute. Failure by an owner of the property to comply with the above
requirements, or failure by a purchaser or lessor to consider or understand the nature and
existence of the Special Tax, could adversely affect the willingness and ability of the purchaser
or lessor to pay the Special Tax when due.
Special Tax Delinquencies
Under provisions of the Mello -Roos Act, the Special Taxes, from which funds necessary
for the payment of principal of and interest on the Local Obligations and, thus, the Bonds are
derived, are customarily billed to the properties within each District on the ad valorem property
tax bills sent by the County to owners of such properties. The Mello -Roos Act currently
provides that such Special Tax installments are due and payable, and bear the same penalties
and interest for non - payment, as do ad valorem property tax installments.
See "SECURITY FOR THE LOCAL OBLIGATIONS — Covenants of the Districts —
Commence Foreclosure Proceedings," for a discussion of the provisions which apply, and
procedures which each District is obligated to follow under the Local Obligation Bond
Indentures, in the event of delinquencies in the payment of Special Taxes. See " — Bankruptcy
and Foreclosure" below for a discussion of limitations on the District's ability to foreclose on the
lien of the Special Taxes in certain circumstances.
Insufficiency of Special Taxes
Notwithstanding that the maximum Special Taxes that may be levied in the Taxing
Jurisdictions exceeds debt service due on the Local Obligations, the Special Taxes collected
could be inadequate to make timely payment of debt service either because of nonpayment or
because property becomes exempt from taxation.
The Rate and Method of Apportionment of Special Tax governing the levy of the Special
Taxes within each Taxing Jurisdiction expressly exempts up to a specified number of acres of
property owned by public entities, homeowner associations, churches and other specified
owners. If for any reason property within a Taxing Jurisdiction becomes exempt from taxation
by reason of ownership by a non - taxable entity such as the federal government, another public
agency or other organization determined to be exempt, subject to the limitations of the
maximum authorized rates, the Special Tax will be reallocated to the remaining taxable
properties within such Taxing Jurisdiction. This could result in certain owners of property paying
a greater amount of the Special Tax and could have an adverse impact upon the ability and
willingness of the owners of such property to pay the Special Tax when due.
I.
The Mello -Roos Act provides that, if any property within a Taxing Jurisdiction not
otherwise exempt from the Special Tax is acquired by a public entity through a negotiated
transaction, or by gift or devise, the Special Tax will continue to be levied on and enforceable
against the public entity that acquired the property. In addition, the Mello -Roos 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 Mello -Roos Act have not been tested in
the courts. Due to problems of collecting taxes from public agencies, if a substantial portion of
land within a Taxing Jurisdiction became exempt from the Special Tax because of public
ownership, or otherwise, the maximum Special Taxes which could be levied upon the remaining
taxable property therein might not be sufficient to pay principal of and interest on the related
Local Obligations when due and a default could occur with respect to the payment of such
principal and interest, and, in turn, a default could occur in the payment of the principal and
interest on the Bonds.
In addition, the Districts' ability to increase Special Tax levies on residential property to
make up for delinquencies for prior fiscal years is limited by Government Code § 53321(d),
which provides that the special tax levied against any parcel for which an occupancy permit for
private residential use has been issued may not be increased as a consequence of delinquency
or default by the owner of any other parcel by more than 10% above the amount that would
have been levied in such fiscal year had there never been any such delinquencies or defaults.
FDIC /Federal Government Interests in Properties
General. The ability of the Districts to foreclose the lien of delinquent unpaid Special Tax
installments may be limited with regard to properties in which the Federal Deposit Insurance
Corporation (the "FDIC "), the Drug Enforcement Agency, the Internal Revenue Service, or other
federal agency has or obtains an interest.
Federal courts have held that, based on the supremacy clause of the United States
Constitution, in the absence of Congressional intent to the contrary, a state or local agency
cannot foreclose to collect delinquent taxes or assessments if foreclosure would impair the
federal government interest.
The supremacy clause of the United States Constitution reads as follows: "This
Constitution, and the Laws of the United States which shall be made in Pursuance thereof, and
all Treaties made, or which shall be made, under the Authority of the United States, shall be the
supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in
the Constitution or Laws of any State to the contrary notwithstanding."
This means that, unless Congress has otherwise provided, if a federal governmental
entity owns a parcel that is subject to Special Taxes within the Taxing Jurisdictions but does not
pay taxes and assessments levied on the parcel (including Special Taxes), the applicable state
and local governments cannot foreclose on the parcel to collect the delinquent taxes and
assessments.
Moreover, unless Congress has otherwise provided, if the federal government has a
mortgage interest in the parcel and a District wishes to foreclose on the parcel as a result of
delinquent Special Taxes, the property cannot be sold at a foreclosure sale unless it can be sold
for an amount sufficient to pay delinquent taxes and assessments on a parity with the Special
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Taxes and preserve the federal government's mortgage interest. In Rust v. Johnson (9th
Circuit; 1979) 597 F.2d 174, the United States Court of Appeal, Ninth Circuit held that the
Federal National Mortgage Association ( "FNMA ") is a federal instrumentality for purposes of this
doctrine, and not a private entity, and that, as a result, an exercise of state power over a
mortgage interest held by FNMA constitutes an exercise of state power over property of the
United States.
The Districts have not undertaken to determine whether any federal governmental entity
currently has, or is likely to acquire, any interest (including a mortgage interest) in any of the
parcels subject to the Special Taxes within the Taxing Jurisdictions, and therefore expresses no
view concerning the likelihood that the risks described above will materialize while the Bonds
are outstanding.
FDIC. In the event that any financial institution making any loan which is secured by real
property within the Taxing Jurisdictions is taken over by the FDIC, and prior thereto or thereafter
the loan or loans go into default, resulting in ownership of the property by the FDIC, then the
ability of the Districts to collect interest and penalties specified by State law and to foreclose the
lien of delinquent unpaid Special Taxes may be limited.
The FDIC's policy statement regarding the payment of state and local real property taxes
(the "Policy Statement ") provides that 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 property 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 the 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. The Ninth Circuit
issued a ruling on August 28, 2001 in which it determined that the FDIC, as a federal agency, is
exempt from Mello -Roos special taxes.
The Districts are unable to predict what effect the application of the Policy Statement
would have in the event of a delinquency in the payment of Special Taxes on a parcel within the
Taxing Jurisdictions in which the FDIC has or obtains an interest, although prohibiting the lien of
the Special Taxes to be foreclosed out at a judicial foreclosure sale could reduce or eliminate
50
the number of persons willing to purchase a parcel at a foreclosure sale. Such an outcome
could cause a draw on the Reserve Fund and perhaps, ultimately, if enough property were to
become owned by the FDIC, a default in payment on the Bonds.
Bankruptcy and Foreclosure
In the event of a delinquency in the payment of the Special Taxes, a District, under
certain circumstances, is required to commence enforcement proceedings as described under
the heading "SECURITY FOR THE LOCAL OBLIGATIONS — Covenants of the Districts."
However, prosecution of such proceedings could be delayed due to crowded local court
calendars, dilatory legal tactics, or bankruptcy. It is also possible that a District will be unable to
realize proceeds in an amount sufficient to pay the applicable delinquency. Moreover, the ability
of the Districts to commence and prosecute enforcement proceedings may be limited by
bankruptcy, insolvency and other laws generally affecting creditors' rights (such as the Soldiers'
and Sailors' Relief Act of 1940) and by the laws of the State relating to judicial and non - judicial
foreclosure. Although bankruptcy proceedings would not cause the liens of the Special Taxes
to become extinguished, bankruptcy of a property owner could result in a delay in the
enforcement proceedings because federal bankruptcy laws provide for an automatic stay of
foreclosure and tax sale proceedings. Any such delay could increase the likelihood of delay or
default in payment of the principal of and interest on the Local Obligations.
The various legal opinions delivered in connection with the issuance of the Bonds,
including Bond Counsel's approving legal opinion, are qualified as to the enforceability of the
Bonds, the Indenture, the Local Obligations and the Local Obligation Bond Indentures by
reference to bankruptcy, reorganization, moratorium, insolvency and other laws affecting the
rights of creditors generally or against public corporations such as the Districts.
No Acceleration Provision
The Bonds do not contain a provision allowing for the acceleration of the Bonds in the
event of a payment default or other default under the terms of the Bonds or the Indenture.
Pursuant to the Indenture, an Owner of the Bonds is given the right for the equal benefit and
protection of all owners similarly situated to pursue certain remedies described in Appendix B —
"SUMMARY OF PRINCIPAL LEGAL DOCUMENTS — SUMMARY OF AUTHORITY
INDENTURE — EVENTS OF DEFAULT AND REMEDIES."
Limitations on Remedies
Remedies available to the Owners of the Bonds may be limited by a variety of factors
and may be inadequate to assure the timely payment of principal of and interest on the Bonds
or to preserve the exclusion from gross income for federal income tax purposes of interest on
the Bonds.
Bond Counsel has limited its opinion as to the enforceability of the Bonds and of the
Indenture to the extent that enforceability may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance or transfer, moratorium, or other similar laws affecting
generally the enforcement of creditors' rights, by equitable principles, by the exercise of judicial
discretion and by limitations on remedies against public agencies in the State. 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 of the Bonds.
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Loss of Tax Exemption
As discussed under the caption "LEGAL MATTERS — Tax Matters," 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
Authority, the City or the Districts in violation of covenants in the Indenture or the Local
Obligation Bond Indentures, respectively. Legislative changes have been proposed in
Congress, which, if enacted, would result in additional federal income tax being imposed on
certain owners of tax - exempt state or local obligations, such as the Bonds. The introduction or
enactment of any of such changes could adversely affect the market value or liquidity of the
Bonds. Should such an event of taxability occur, the Bonds are not subject to a special
redemption and will remain outstanding until maturity or until redeemed under one of the other
redemption provisions contained in the Indenture.
IRS Audit of Tax - Exempt Bond Issues
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
such Bonds might be affected as a result of such an audit of such Bonds (or by an audit of
similar bonds or securities).
Impact of Legislative Proposals, Clarifications of the Code and Court Decisions on Tax
Exemption
Future legislative proposals, if enacted into law, clarification of the Code (as defined
herein) or court decisions may cause interest on the Bonds to be subject, directly or indirectly, to
federal income taxation or to be subject to or exempted from state income taxation, or otherwise
prevent Bond owners from realizing the full current benefit of the tax status of such interest.
For example, various proposals have been made in Congress and by the President
which, if enacted, would subject interest on bonds that is otherwise excludable from gross
income for federal income tax purposes, including interest on the Bonds, to a tax payable by
certain bondholders that are individuals, estates or trusts with adjusted gross income in excess
of certain specified thresholds.
The introduction or enactment of any such legislative proposals, clarification of the Code
or court decisions may also affect the market price for, or marketability of, the Bonds.
Prospective purchasers of the Bonds should consult their own tax advisors regarding any
pending or proposed federal or state tax legislation, regulations or litigation.
Limited Secondary Market
There can be no guarantee that there will be a secondary market for the Bonds, or, if a
secondary market exists, that the Bonds can be sold for any particular price. Although the
Authority has committed to provide certain financial information and operating data on an annual
basis, there can be no assurance that such information will be available to Beneficial Owners of
the Bonds on a timely basis. The failure to provide the required annual information does not
give rise to monetary damages but merely an action for specific performance. Occasionally,
because of general market conditions, lack of current information, the absence of a credit rating,
or adverse history or economic prospects connected with a particular issue, secondary
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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.
Proposition 218
An initiative measure commonly referred to as the 'Right to Vote on Taxes Act" (the
"Initiative ") was approved by the voters of the State of California at the November 5, 1996
general election. The Initiative added Article XIIIC and Article XIIID to the California
Constitution. According to the "Title and Summary" of the Initiative prepared by the California
Attorney General, the Initiative limits "the authority of local governments to impose taxes and
property - related assessments, fees and charges." The provisions of the Initiative continue to
be interpreted by the courts. The Initiative could potentially impact the Special Taxes available
to the Districts to pay the principal of and interest on the Local Obligations as described below.
Among other things, Section 3 of Article XIII states that "... the initiative power shall not
be prohibited or otherwise limited in matters of reducing or repealing any local tax, assessment,
fee or charge." The Mello -Roos Act provides for a procedure which includes notice, hearing,
protest and voting requirements to alter the rate and method of apportionment of an existing
special tax. However, the Mello -Roos Act prohibits a legislative body from adopting any
resolution to reduce the rate of any special tax or terminate the levy of any special tax pledged
to repay any debt incurred pursuant to the Mello -Roos Act unless such legislative body
determines that the reduction or termination of the special tax would not interfere with the timely
retirement of that debt. On August 1, 1997, a bill was signed into law by the Governor of the
State enacting Government Code Section 5854, which states that:
Section 3 of Article XIIIC of the California Constitution, as adopted at the
November 5, 1996, general election, shall not be construed to mean that any
owner or beneficial owner of a municipal security, purchased before or after that
date, assumes the risk of, or in any way consents to, any action by initiative
measure that constitutes an impairment of contractual rights protected by
Section 10 of Article I of the United States Constitution.
Accordingly, although the matter is not free from doubt, it is likely that the Initiative has
not conferred on the voters the power to repeal or reduce the Special Taxes if such reduction
would interfere with the timely retirement of the Local Obligations.
It may be possible, however, for voters or the City Council of the City, acting as the
legislative body of each District, to reduce the Special Taxes in a manner which does not
interfere with the timely repayment of the Local Obligations, 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 Local Obligations. Nevertheless, to the maximum extent that the law permits it
to do so, each District will covenant in each Local Obligation Bond Indenture executed by it that
it will not initiate proceedings under the Mello -Roos Act to reduce the maximum Special Tax
rates in a Taxing Jurisdiction below an amount equal to 110% of the debt service for the Local
Obligations of such Taxing Jurisdiction in each Bond Year, Each District also will covenant in
each Local Obligation Bond Indenture executed by it that, in the event an initiative is adopted
which purports to alter the Rate and Method for its Taxing Jurisdictions, it will commence and
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pursue legal action in order to preserve its ability to comply with the foregoing covenant.
However, no assurance can be given as to the enforceability of the foregoing covenants.
The interpretation and application of the Initiative will ultimately be determined by the
courts with respect to a number of the matters discussed above. For example, in August 2014,
in City of San Diego. v. Melvin Shapiro, an Appellate Court invalidated an election held by the
City of San Diego to authorize the levying of special taxes on hotels city -wide pursuant to a San
Diego charter ordinance creating a convention center facilities district which specifically defined
the electorate to consist solely of (1) the owners of real property in San Diego on which a hotel
is located, and (2) the lessees of real property owned by a governmental entity on which a hotel
is located. The court held that such landowners and lessees are neither "qualified electors' of
the special tax district for purposes of Articles XIII A, Section 4 of the California Constitution, nor
a proper "electorate" under Article XIIIC, Section 2(d) of the California Constitution. The court
specifically noted that the decision did not require the Court to consider the distinct question of
whether landowner voting to impose special taxes under Section 53326(b) of the Mello -Roos
Act (which was the nature of the voter approval through which the Taxing Jurisdictions were
formed) violates the California Constitution in districts that lack sufficient registered voters to
conduct an election among registered voters. Accordingly, this case should have no effect on
the levy of the Special Taxes.
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. See "SPECIAL RISK FACTORS —
Limitations on Remedies."
Ballot Initiatives
Articles XIII A, XIII B, XIII C and XIII D, all of which placed certain limitations on the
power of local agencies to tax, collect and expend revenues, were adopted pursuant to
measures 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
legislature. The adoption of any such initiative or legislation might place limitations on the ability
of the State, the City, or the Districts to increase revenues or to increase appropriations or on
the ability of the landowners within the Districts to complete proposed future development.
LEGAL MATTERS
Tax Matters
In the opinion of Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport
Beach, California ( "Bond Counsel "), under existing statutes, regulations, rulings and judicial
decisions, and assuming the accuracy of certain representations and compliance with certain
covenants and requirements described herein, interest on the Bonds is excluded from gross
income for federal income tax purposes and is not an item of tax preference for purposes of
calculating the federal alternative minimum tax imposed on individuals and corporations. In the
further opinion of Bond Counsel, interest on the Bonds is exempt from State of California
personal income tax. Bond Counsel notes that, with respect to corporations, interest on the
Bonds may be included as an adjustment in the calculation of alternative minimum taxable
income which may affect the alternative minimum tax liability of such corporations.
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The difference between the issue price of a Bond (the first price at which a substantial
amount of the Bonds of the same maturity is to be sold to the public) and the stated redemption
price at maturity with respect to such Bond constitutes original issue discount. Original issue
discount accrues under a constant yield method, and original issue discount will accrue to a
Bond Owner before receipt of cash attributable to such excludable income. The amount of
original issue discount deemed received by the Bond Owner will increase the Bond Owner's
basis in the Bond. In the opinion of Bond Counsel, the amount of original issue discount that
accrues to the owner of a Bond is excluded from the gross income of such owner for federal
income tax purposes, is not an item of tax preference for purposes of the federal alternative
minimum tax imposed on individuals and corporations, and is exempt from State of California
personal income tax.
Bond Counsel's opinion as to the exclusion from gross income of interest (and original
issue discount) on the Bonds is based upon certain representations of fact and certifications
made by the City and others and is subject to the condition that the Districts comply with all
requirements of the Internal Revenue Code of 1986, as amended (the "Code'), that must be
satisfied subsequent to the issuance of the Bonds to assure that interest (and original issue
discount) on the Bonds will not become includable in gross income for federal income tax
purposes. Failure to comply with such requirements of the Code might cause the interest (and
original issue discount) on the Bonds to be included in gross income for federal income tax
purposes retroactive to the date of issuance of the Bonds. The Districts have covenanted to
comply with all such requirements.
The amount by which a Bond Owner's original basis for determining loss on sale or
exchange in the applicable Bond (generally, the purchase price) exceeds the amount payable
on maturity (or on an earlier call date) constitutes amortizable Bond premium, which must be
amortized under Section 171 of the Code; such amortizable Bond premium reduces the Bond
Owner's basis in the applicable Bond (and the amount of tax - exempt interest received), and is
not deductible for federal income tax purposes. The basis reduction as a result of the
amortization of Bond premium may result in a Bond Owner realizing a taxable gain when a
Bond is sold by the Owner for an amount equal to or less (under certain circumstances) than the
original cost of the Bond to the Owner. Purchasers of the Bonds should consult their own tax
advisors as to the treatment, computation and collateral consequences of amortizable Bond
premium.
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 other similar bonds). No assurance can
be given that in the course of an audit, as a result of an audit, or otherwise, Congress or the IRS
might not change the Code (or interpretation thereof) subsequent to the issuance of the Bonds
to the extent that it adversely affects the exclusion from gross income of interest (and original
issue discount) on the Bonds or their market value.
SUBSEQUENT TO THE EXECUTION AND DELIVERY OF THE BONDS, THERE
MIGHT BE FEDERAL, STATE OR LOCAL STATUTORY CHANGES (OR JUDICIAL OR
REGULATORY INTERPRETATIONS OF FEDERAL, STATE OR LOCAL LAW) THAT AFFECT
THE FEDERAL, STATE OR LOCAL TAX TREATMENT OF THE INTEREST ON THE BONDS
OR THE MARKET VALUE OF THE BONDS, LEGISLATIVE CHANGES HAVE BEEN
PROPOSED IN CONGRESS, WHICH, IF ENACTED, WOULD RESULT IN ADDITIONAL
FEDERAL INCOME TAX BEING IMPOSED ON CERTAIN OWNERS OF TAX - EXEMPT STATE
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OR LOCAL OBLIGATIONS, SUCH AS THE BONDS. THE INTRODUCTION OR ENACTMENT
OF ANY OF SUCH CHANGES COULD ADVERSELY AFFECT THE MARKET VALUE OR
LIQUIDITY OF THE BONDS. NO ASSURANCE CAN BE GIVEN THAT, SUBSEQUENT TO
THE EXECUTION AND DELIVERY OF THE BONDS, SUCH CHANGES (OR OTHER
CHANGES) WILL NOT BE INTRODUCED OR ENACTED OR INTERPRETATIONS WILL NOT
OCCUR. BEFORE PURCHASING ANY OF THE BONDS, ALL POTENTIAL PURCHASERS
SHOULD CONSULT THEIR TAX ADVISORS REGARDING POSSIBLE STATUTORY
CHANGES OR JUDICIAL OR REGULATORY CHANGES OR INTERPRETATIONS, AND
THEIR COLLATERAL TAX CONSEQUENCES RELATING TO THE BONDS.
Bond Counsel's opinions may be affected by actions taken (or not taken) or events
occurring (or not occurring) after the date of issuance of the Bonds. Bond Counsel has not
undertaken to determine, or to inform any person, whether any such actions or events are taken
or do occur. The Indenture, the Local Obligation Bond Indentures and the Tax Certificate
relating to the Bonds permit certain actions to be taken or to be omitted if a favorable opinion of
Bond Counsel is provided with respect thereto. Bond Counsel expresses no opinion as to the
exclusion from gross income of interest (and original issue discount) on the Bonds for federal
income tax purposes with respect to any Bond if any such action is taken or omitted based upon
the advice of counsel other than Stradling Yocca Carlson & Rauth, a Professional Corporation.
Although Bond Counsel has rendered an opinion that interest (and original issue
discount) on the Bonds is excluded from gross income for federal income tax purposes provided
that the Districts continue to comply with certain requirements of the Code, the ownership of the
Bonds and the accrual or receipt of interest (and original issue discount) with respect to the
Bonds may otherwise affect the tax liability of certain persons. Bond Counsel expresses no
opinion regarding any such tax consequences. Accordingly, before purchasing any of the
Bonds, all potential purchasers should consult their tax advisors with respect to collateral tax
consequences relating to the Bonds.
Should interest on the Bonds (including any original issue discount) become includable
in gross income for federal income tax purposes, the Bonds are not subject to early redemption
and will remain outstanding until maturity or until redeemed in accordance with the Indenture.
See Appendix E — "FORM OF BOND COUNSEL OPINION" for a form of the opinion to
be provided by Bond Counsel on the date of issuance of the Bonds.
Absence of Litigation
The Authority. The Authority will certify at the time the Bonds are issued that no
litigation is pending or threatened concerning the validity of the Bonds and that no action, suit or
proceeding is known by the Authority to be pending that would restrain or enjoin the delivery of
the Bonds, or contest or affect the validity of the Bonds or any proceedings of the Authority
taken with respect to the Bonds or the Local Obligations.
The Districts. Each of the Districts will certify at the time the Bonds are issued that no
litigation is pending or threatened concerning the validity the Local Obligations and that no
action, suit or proceeding is known by such District to be pending that would restrain or enjoin
the delivery of the Local Obligations, or contest or affect the validity of the Local Obligations or
any proceedings of such District taken with respect to the Local Obligations.
-46-
Legal Opinion
Certain proceedings in connection with the issuance of the Bonds are subject to the
approval as to their legality of Stradling Yocca Carlson & Rauth, a Professional Corporation,
Newport Beach, California, Bond Counsel for the Authority in connection with the issuance of
the Bonds. The opinion of Bond Counsel approving the validity of the Bonds substantially in the
form attached as Appendix E hereto will be attached to each Bond. Bond Counsel's
employment is limited to a review of legal procedures required for the approval of the Bonds and
to rendering an opinion as to the validity of the Bonds and the exemption of interest on the
Bonds from income taxation. Bond Counsel expresses no opinion to the Owners of the Bonds
as to the accuracy, completeness or fairness of this Official Statement or other offering
materials relating to the Bonds and expressly disclaims any duty to do so.
Payment of the fees of Bond Counsel, Disclosure Counsel and Underwriters' Counsel is
contingent upon issuance of the Bonds.
MISCELLANEOUS
Verification of Mathematical Accuracy
Causey Demgen & Moore, P.C., independent accountants, upon delivery of the Bonds,
will deliver a report on the mathematical accuracy of certain computations, contained in
schedules provided to them which were prepared by the Underwriters, relating to the sufficiency
of moneys and securities deposited into the Escrow Funds to pay, when due, the principal,
whether at maturity or upon prior prepayment, interest and prepayment premium requirements
of the Prior Bonds.
The report of Causey Demgen & Moore, P.C. will include the statement that the scope of
its engagement is limited to verifying the mathematical accuracy of the computations contained
in such schedules provided to it, and that it has no obligation to update its report because of
events occurring, or data or information coming to its attention, subsequent to the date of its
report.
Underwriting
The Bonds are being purchased by Stifel, Nicolaus & Company, Incorporated and
Brandis Tallman LLC (collectively, the "Underwriters ") at a purchase price of $ ,
(representing the par amount of the Bonds, less underwriters' discount of $ and plus
net original issue premium of $ ).
The purchase contract relating to the Bonds among the Authority, the Districts and the
Underwriters provides that all Bonds will be purchased if any are purchased, and that the
obligation to make such purchase is subject to certain terms and conditions set forth in said
purchase contract, including, but not limited to, the approval of certain legal matters by counsel.
Continuing Disclosure
Authority Continuing Disclosure. The Authority will execute a continuing disclosure
certificate in the form attached hereto as Appendix F for the benefit of the Owners and
Beneficial Owners of the Bonds to provide certain financial information and operating data
relating to the Authority and the Taxing Jurisdictions (the "Annual Report ") and to provide
-47-
notices of the occurrence of certain enumerated events (the "Listed Events "). The Annual
Report and notices of Listed Events will be filed by [Urban Futures, Inc.] as the initial
dissemination agent (the "Dissemination Agent') on the Electronic Municipal Market Access
System of the Municipal Securities Rulemaking Board ( "EMMA "). The specific nature of the
information to be included in the Annual Reports and the notices of Listed Events is set forth in
Appendix F — "FORM OF CONTINUING DISCLOSURE CERTIFICATE." The Continuing
Disclosure Certificate will be executed and delivered by the Authority in order to assist the
Underwriter in complying with SEC Rule 15c2- 12(b)(5) (the 'Rule "). The Annual Reports are to
be filed by the Authority no later than February 15 of each year. The first Annual Report will be
due February 1, 2016.
It should be noted that the Authority is required to file certain financial statements with
the Annual Reports. This requirement has been included in the certificate solely to satisfy the
provisions of the Rule. The inclusion of this information does not mean that the Bonds are
secured by any resources or property of the Authority other than as described in this Official
Statement. See "SECURITY FOR THE BONDS," "SECURITY FOR THE LOCAL
OBLIGATIONS" and "SPECIAL RISK FACTORS." It should also be noted that the Listed
Events that the Authority has agreed to report includes items which have absolutely no
application whatsoever to the Bonds. These items have been included in the list solely to
satisfy the requirements of the Rule. Thus, any implication from the inclusion of these items in
the list to the contrary notwithstanding, there are no credit enhancements applicable to the
Bonds, and there are no credit or liquidity providers with respect to the Bonds.
The Continuing Disclosure Certificate will inure solely to the benefit of any Dissemination
Agent, the Underwriters and Owners or Beneficial Owners from time to time of the Bonds. A
default under the Continuing Disclosure Certificate is not a default under the Indenture and the
sole remedy following a default is an action to compel specific performance by the Authority with
the terms of the Continuing Disclosure Certificate.
No Property Owner Continuing Disclosure. None of the property owners in the
Taxing Jurisdictions will provide continuing disclosure.
History of Continuing Disclosure Compliance. The Authority and the City have
existing continuing disclosure undertakings. In the previous five years, the Authority and the
City have failed to make certain required filings under their existing undertakings. Specifically,
[TO COME UPON RECEIPT OF CONTINUING DISCLOSURE AUDIT].
Additional Information
References are made herein to certain documents and reports which are brief
summaries thereof which do not purport to be complete or definitive, and reference is made to
such documents and reports for full and complete statements of the contents thereof.
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 Authority and the
purchasers or Owners of any of the Bonds.
The execution and delivery of this Official Statement has been duly authorized by the
Authority and the Districts.
LAKE ELSINORE PUBLIC FINANCING
AUTHORITY
0
COMMUNITY FACILITIES DISTRICT NO. 95-
1 (LAKE ELSINORE CITY CENTER PUBLIC
IMPROVEMENTS)
la
COMMUNITY FACILITIES DISTRICT NO
2004 -3 (ROSETTA CANYON)
m
COMMUNITY FACILITIES DISTRICT NO.
2005 -2 (ALBERHILL RANCH)
COMMUNITY FACILITIES DISTRICT NO.
2006 -2 (VISCAYA)
0
CITY OF LAKE ELSINORE COMMUNITY
FACILITIES DISTRICT NO. 2003 -2 (CANYON
HILLS)
m
COMMUNITY FACILITIES DISTRICT NO.
2004 -3 (ROSETTA CANYON)
0
COMMUNITY FACILITIES DISTRICT NO.
2005 -6 (CITY CENTER TOWNHOMES)
By: By:
myl
APPENDIX A
INFORMATION REGARDING THE COMMUNITY FACILITIES DISTRICTS
CFD NO. 95 -1
Location and Description. CFD No. 95 -1 was formed by the City in November, 1995.
CFD No. 95 -1 includes 7 taxable parcels, all of which are commercial properties.
Assigned Special Taxes. Table 1 below sets forth the current Assigned Special Taxes
that may be levied on the property within CFD No. 95 -1 in fiscal year 2015 -16. The Rate and
Method for CFD No. 95 -1 provides that a parcel will not be subject to Special Taxes for more
than 40 years. The seven taxable parcels in CFD No. 95 -1 will not be subject to the Special Tax
after fiscal year The final maturity of the Local Obligations of CFD No. 95 -1 is
September 1, 2037,
TABLE A -1
LAKE ELSINORE PUBLIC FINANCE AUTHORITY
COMMUNITY FACILITIES DISTRICT NO. 95 -1
ASSIGNED SPECIAL TAXES
(1) Maximum Tax Rate for Building Floor Area is $2.60 for fiscal year 2015 -16.
(2) Maximum Tax Rate for Land Area is $1.34 for fiscal year 2015 -16.
(3) Includes an estimated $25,000 in administrative fees.
Source: Albert A. Webb Associates.
For the complete text of the Rate and Method for CFD No. 95 -1, see Appendix D -
"RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES FOR EACH TAXING
JURISDICTION."
Estimated Direct and Overlapping Indebtedness. Within the boundaries of CFD No.
95 -1 are numerous overlapping local agencies providing public services. The approximate
amount of the direct and overlapping debt secured by a tax or assessment on the parcels within
CFD No. 95 -1 for Fiscal Year 2014 -15 is shown in Table A -2 below,
In
Total
Projected
Maximum Tax
Fiscal Year
Rate for
Maximum Tax
Maximum Special
2015 -16
Percent
Owner
Name
Building
Building Floor
Rate for Land
Tax for Fiscal
Special Tax
of Zone
APN
Floor Area
Land Area
Amain
Area �2I
Year 2015 -16
Levyl'i
Total
363530004
Elsinore
Veto
4,800
36,591
-
$12,480
$49,032
$61,512
_
$4,613
3.16°
363530005
Elsinore
Veto II
12,897
57,064
33,532
76,466
109,998
11,328
7.75
363530007
Elsinore
Veto
17,191
220,414
44,697
295,355
340,051
18,834
12.88
363530008
Elsinore
Veto
103,750
329,750
269,750
441,865
711,615
87,783
60.04
363530011
Elsinore
Veto
2,680
20,909
6,968
28,018
34,986
2,588
1.77
363530012
World Svgs & Loan
3,400
28,750
8,840
38,525
47,365
3,341
2.29
(1) Maximum Tax Rate for Building Floor Area is $2.60 for fiscal year 2015 -16.
(2) Maximum Tax Rate for Land Area is $1.34 for fiscal year 2015 -16.
(3) Includes an estimated $25,000 in administrative fees.
Source: Albert A. Webb Associates.
For the complete text of the Rate and Method for CFD No. 95 -1, see Appendix D -
"RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES FOR EACH TAXING
JURISDICTION."
Estimated Direct and Overlapping Indebtedness. Within the boundaries of CFD No.
95 -1 are numerous overlapping local agencies providing public services. The approximate
amount of the direct and overlapping debt secured by a tax or assessment on the parcels within
CFD No. 95 -1 for Fiscal Year 2014 -15 is shown in Table A -2 below,
In
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11
Value -To -Lien Ratios. The Authority has obtained the assessed values of all of the
taxable property in CFD No. 95 -1 (7 developed parcels in total), as established by the County
Assessor for Fiscal Year 2014 -15, which total is $18,243,216. The direct and overlapping land
secured special tax and assessment bonded indebtedness (excluding general obligation
bonded indebtedness) within CFD No. 95 -1 as of January 13, 2015 was approximately
$1,144,365. The assessed value -to -lien ratio of the property within CFD No. 95 -1, based on the
Fiscal Year 2014 -15 assessed values, the aggregate principal amount of the CFD No. 95 -1
Bonds and the estimated direct and overlapping land secured special tax and assessment
bonded indebtedness (excluding general obligation bonded indebtedness) within CFD No. 95 -1
($1,143,323) equals approximately 15.9- to -1.* [confirm]
Value -to -lien Ratios by Category. The following table summarizes the assessed
value -to -lien ratios within CFD No. 95 -1 by value -to -lien category.
TABLE A -3
LAKE ELSINORE PUBLIC FINANCE AUTHORITY
COMMUNITY FACILITIES DISTRICT NO. 95 -1
DISTRIBUTION OF ASSESSED VALUE -TO- SPECIAL TAX BURDEN RATIOS
* Preliminary; subject to change.
(')Special Tax Burden includes Outstanding Overlapping Land Secured Debt.
(2) Includes an estimated $25,000 in administrative fees.
Source: Albert A. Webb Associates.
Historical Assessed Valuation. The following table represents the historical assessed
valuation of the taxable property in CFD No. 95 -1 as shown on the County Assessor's roll for
fiscal years 2010 -11 through 2014 -15.
Preliminary; subject to change.
A -3
Total
Estimated Fiscal Year
Assessed
Percent of
2015 -16 Special Tax
Percent
APN
Owner Name
Value
Total
Levy(2)
of Total
363530008
Elsinore Veto
$6,934,903
38.01%
$87,783
60.04%
363530007
Elsinore Veto
3,479,490
19.07
18,834
12.88
363530019
Elsinore Veto
2,406,644
13.19
17,712
12.12
363530005
Elsinore Veto II
1,884,722
10.33
11,328
7.75
363530004
Elsinore Veto
1,217,813
6.68
4,613
3.16
363530011
Elsinore Veto
1,159,823
636
2,588
1.77
363530012
World Svgs & Loan
1,159,821
636
3,341
2.29
Total
$18,243,216
100.00%
$146,200
100.00%
* Preliminary; subject to change.
(')Special Tax Burden includes Outstanding Overlapping Land Secured Debt.
(2) Includes an estimated $25,000 in administrative fees.
Source: Albert A. Webb Associates.
Historical Assessed Valuation. The following table represents the historical assessed
valuation of the taxable property in CFD No. 95 -1 as shown on the County Assessor's roll for
fiscal years 2010 -11 through 2014 -15.
Preliminary; subject to change.
A -3
TABLE A -4
LAKE ELSINORE PUBLIC FINANCE AUTHORITY
COMMUNITY FACILITIES DISTRICT NO. 95 -1
ASSESSED VALUATION HISTORY
(FISCAL YEARS 2010 -11 THROUGH 2014 -15)
Fiscal Year
Land Assessed
Valuation
Structure Assessed
Valuation
Total Assessed
Valuation
2010 -11
$6,660,682
$10,664,462
$17,325,144
2011 -12
6,710,829
10,744,759
17,455,588
2012 -13
6,845,041
10,959,651
17,804,692
2013 -14
6,981,939
11,178,841
18,160,780
2014 -15
7,013,630
11,229,586
18,243,216
Source: Albert A. Webb Associates.
Estimated Value -to -Lien Ratios for Top Taxpayers. The following table summarizes
the assessed value -to -lien ratios within CFD No. 95 -1 for its top taxpayers.
TABLE A -5
LAKE ELSINORE PUBLIC FINANCE AUTHORITY
COMMUNITY FACILITIES DISTRICT NO. 95 -1
ESTIMATED VALUE -TO -LIEN FOR TOP TAXPAYERS
* Preliminary; subject to change.
(n Excludes General Obligation Bonded indebtedness applicable within CFD No. 95 -1.
Source: Albert A. Webb Associates.
The land within CFD No. 95 -1 consists of a community shopping center known as Lake
Elsinore City Center. The portion of the shopping center located within the boundaries of CFD
No. 95 -1 is owned by the three property owners in the table above. The remainder of the
shopping center is owned by Wal -Mart Stores, Inc. and is located outside the boundaries of
CFD 95 -1. [more detail to come]
ME
Percent
of
Projected
Total
Fiscal
Projected
Year
Fiscal Year
Estimated
Fiscal Year
2015 -16
2014 -15
Overlapping Land
Value -
2015-16
Special
Assessed
Secured Bonded
to -Lien
Property Owner
Parcels
Special Tax
Tax
Value
Debt(')*
Ratio*
ELSINORE VETO
5
$131,531
89.97%
$15,198,673
$1,028,608
14.78:1
ELSINORE VETO II
1
11,328
7.75
1,884,722
88,588
21.28:1
WORLD SVGS & LOAN ASSN
1
3,341
2.29
1,159,821
26,127
44.39:1
Totals
7
$146,200
100.00%
$18,243,216
$1,143,323
15.96:1
* Preliminary; subject to change.
(n Excludes General Obligation Bonded indebtedness applicable within CFD No. 95 -1.
Source: Albert A. Webb Associates.
The land within CFD No. 95 -1 consists of a community shopping center known as Lake
Elsinore City Center. The portion of the shopping center located within the boundaries of CFD
No. 95 -1 is owned by the three property owners in the table above. The remainder of the
shopping center is owned by Wal -Mart Stores, Inc. and is located outside the boundaries of
CFD 95 -1. [more detail to come]
ME
Delinquencies. The following table is a summary of Special Tax levies, collections and
delinquency rates in CFD No. 95 -1 for Fiscal Years 2010 -11 through the first installment of
Fiscal Year 2014 -15.
TABLE A -6
LAKE ELSINORE PUBLIC FINANCE AUTHORITY
COMMUNITY FACILITIES DISTRICT NO. 95 -1
SPECIAL TAX LEVIES, DELINQUENCIES AND DELINQUENCY RATES
FISCAL YEARS 2010 -11 THROUGH 2014 -15
Delinquencies at Fiscal Year Delinquencies as of November 19,
End r')(') 2014 (2)
Fiscal Amount Parcels Parcels Amount Percent Parcels Amount
Percent
Year Levied Levied Delinquent Delinquent Delinquent Delinquent Delinquent Delinquent
2010 -11 $112,650 7 0 $0 0.00% $0 0.00%
$112,650
2011 -12 154,800 7 0 $0 0.00 0 0.00
154,800
2012 -13 147,850 7 0 $0 0.00 0 0.00
147,850
2013 -14 154,246 7 0 $0 0.00 0 0.00
154,246
2014 -15 153,471 7 N/A N/A N/A N/A N/A
153,471
111 As of fiscal year end of year levied as provided by the continuing disclosure reports.
(z) Delinquency data as of November 19, 2014 provided by the County and Albert A. Webb Associates. Information
for fiscal year 2010 -2011 through fiscal year 2013 -14 for CFD No. 95 -1 provided by the continuing disclosure reports
provided as of June 30 of fiscal year levied.
131 Fiscal Year 2014 -15 fiscal year end data is not yet available.
Source.: The Riverside County Assessor's Office; the City and Albert A. Webb Associates (as noted).
A -5
CFD NO. 2003 -2 AND IMPROVEMENT AREA B
Location and Description. CFD No. 2003 -2 and Improvement Area B therein were
formed by the City in January, 2004 to finance the acquisition and construction of public streets,
streetscape, park and recreation facilities, storm drain, fire station, and other city facilities,
including water and sewer facilities and fees of the Elsinore Valley Municipal Water District.
Improvement Area B of CFD No. 2003 -2 includes 806 taxable parcels. Improvement Area B of
CFD No. 2003 -2 is 95% "Developed Property." A parcel is "Developed Property' when it has
been issued a building permit on or before March 1 preceding the fiscal year in which the
Special Tax was levied. 700 completed single - family detached homes have been conveyed to
individual homeowners. There are 34 parcels with building permits issued after March 1, 2014
that will be levied as "Developed Property" for fiscal year 2015 -16. Those 34 parcels have been
included in all fiscal year projected levy information contained in the tables related to
Improvement Area B of CFD No. 2003 -2. For the complete text of the Rate and Method of
Improvement Area B of CFD No. 2003 -2, see Appendix D — "RATE AND METHOD OF
APPORTIONMENT OF SPECIAL TAXES FOR EACH TAXING JURISDICTION. "Assigned
Special Taxes. Table A -7 below sets forth the current Assigned Special Taxes that may be
levied on the property within Improvement Area B of CFD No. 2003 -2 in fiscal year 2015 -16
based on the development status within Improvement Area B of CFD No. 2003 -2 as of
December 16, 2014. The Special Taxes in Improvement Area B of CFD No. 2003 -2 may not be
levied after the 2037 -38 fiscal year. The final maturity of the Local Obligations of Improvement
Area B of CFD No. 2003 -2 is September 1, 2037.
W.
TABLE A -7
LAKE ELSINORE PUBLIC FINANCE AUTHORITY
COMMUNITY FACILITIES DISTRICT NO. 2003 -2
IMPROVEMENT AREA B
ASSIGNED SPECIAL TAXES
For the complete text of the Rate and Method of Improvement Area B of CFD No. 2003-
2, see Appendix D - "RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES FOR
EACH TAXING JURISDICTION."
Estimated Direct and Overlapping Indebtedness. Within the boundaries of
Improvement Area B of CFD No. 2003 -2 are numerous overlapping local agencies providing
public services. The approximate amount of the direct and overlapping debt secured by a tax or
assessment on the parcels within Improvement Area B of CFD No. 2003 -2 for Fiscal Year 2014-
15 is shown in Table A -8 below.
A -7
Projected
Total Projected
Assigned
Fiscal Year
Fiscal Year
Tax
Special
2015 -16
2015 -16
Percent
Clas
Residential
No. of
Tax Per
Special Tax
Special Tax
of Zone
ZONE 2 Land Use
s
Floor Area
Units
Unit
Levy per Unit
LevyllI
Total
Single Family Unit
D1
Less than 1,175
0
$1,300
$0
$0
0.00%
Single Family Unit
D2
1,175 -1,324
0
1,415
0
0
0.00
Single Family Unit
D3
1,325 - 1,549
0
1,603
0
0
0.00
Single Family Unit
D4
1,550 - 1,649
27
1,718
1,558
42,063
3.69
Single Family Unit
D5
1,650 - 1,749
15
1,833
1,661
24,921
2.19
Single Family Unit
D6
1,750 - 1,949
192
1,899
1,721
330,468
28.99
Single Family Unit
D7
1,950 -2,199
28
1,963
1,780
49,835
4.37
Single Family Unit
D8
2,200 -2,449
98
2,194
1,989
194,929
17.10
Single Family Unit
D9
2,450 - 2,699
52
2,309
2,094
108,873
9.55
Single Family Unit
D10
2,700 - 2,949
40
2,426
2,199
87,979
7.72
2,950 or
Single Family Unit
D11
greater
125
2,656
2,408
300,947
26.40
Apartment Unit
APT1
N/A
0
761
0
0
0.00
Non - Residential
Unit
NR1
N/A
0
6,341
0
0
0.00
577
$1,140,016
100.00%
ZONE 3 Single Family Unit
D1
Less than 1,175
0
$1,023
$0
$0
0.00%
Single Family Unit
D2
1,175- 1,324
0
1,139
0
0
0.00
Single Family Unit
D3
1,325 - 1,549
0
1,327
0
0
0.00
Single Family Unit
D4
1,550 - 1,649
0
1,442
0
0
0.00
Single Family Unit
D5
1,650 - 1,749
3
1,556
11411
4,232
1.03
Single Family Unit
D6
1,750 - 1,949
28
1,622
1,471
41,175
10.02
Single Family Unit
D7
1,950 -2,199
39
1,669
11513
59,457
14.47
Single Family Unit
D8
2,200 -2,449
37
1,888
1,712
63,343
15.41
Single Family Unit
D9
2,450 -2,699
35
1,997
1,811
63,380
15.42
Single Family Unit
D10
2,700 -2,949
42
2,162
1,960
82,334
20.03
2,950 or
Single Family Unit
D11
greater
45
2,379
2,157
97,063
23.62
Apartment Unit
APT1
N/A
0
761
0
0
0.00
Non - Residential
Unit
NR1
N/A
0
6,341
0
0
0.00
229
$410,984
100.00%
Grand Total
806
$1,551,000
(1) Includes an estimated $55,000 in administrative
fees.
Source: Albert
A. Webb Associates.
For the complete text of the Rate and Method of Improvement Area B of CFD No. 2003-
2, see Appendix D - "RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES FOR
EACH TAXING JURISDICTION."
Estimated Direct and Overlapping Indebtedness. Within the boundaries of
Improvement Area B of CFD No. 2003 -2 are numerous overlapping local agencies providing
public services. The approximate amount of the direct and overlapping debt secured by a tax or
assessment on the parcels within Improvement Area B of CFD No. 2003 -2 for Fiscal Year 2014-
15 is shown in Table A -8 below.
A -7
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Value -To -Lien Ratios. The Authority has obtained the assessed values of all of the
taxable property in Improvement Area B of CFD No. 2003 -2 (806 parcels in total), as
established by the County Assessor for Fiscal Year 2014 -15, which total is $208,234,239. The
direct and overlapping land secured special tax and assessment bonded indebtedness
(excluding general obligation bonded indebtedness) within Improvement Area B of CFD
No. 2003 -2 as of December 10, 2014 was approximately $36,395,953. The assessed value -to-
lien ratio of the property within Improvement Area B of CFD No. 2003 -2, based on the Fiscal
Year 2014 -15 assessed values, the aggregate principal amount of the CFD No. 2003 -2 Bonds
and the estimated direct and overlapping land secured special tax and assessment bonded
indebtedness (excluding general obligation bonded indebtedness) within Improvement Area B of
CFD No. 2003 -2 equals approximately 6.18- to -1.*
Value -to -lien Ratios by Category. The following table summarizes the assessed
value -to -lien ratios within Improvement Area B of CFD No. 2003 -2 by value -to -lien category.
TABLE A -9
LAKE ELSINORE PUBLIC FINANCE AUTHORITY
COMMUNITY FACILITIES DISTRICT NO. 2003 -2
IMPROVEMENT AREA B
DISTRIBUTION OF ASSESSED VALUE -TO- SPECIAL TAX BURDEN RATIOS
* Preliminary; subject to change.
(u Special Tax Burden includes Outstanding Overlapping Land Secured Debt.
(2) Fiscal year 2014 -15 assessed value.
(3) Includes an estimated $55,000 in administrative fees.
141 Includes 10 developer -owned parcels with assessed values ranging from $1,270 to $6,152.
Source. Albert A. Webb Associates.
Historical Assessed Valuation. The following table represents the historical assessed
valuation of the taxable property in Improvement Area B of CFD No. 2003 -2 as shown on the
County Assessor's roll for fiscal years 2010 -11 through 2014 -15.
Preliminary; subject to change.
I *]
Total
Estimated Fiscal
Assessed Value to
No. of
Percent of
Assessed
Percent of
Year 2015 -16
Percent
Special Tax Burden(')*
Parcels
Total
Value 12)
Total
Special Tax Levy(l)
of Total
Less than 1141
10
1.24%
$39,059
0.02%
$17,049
1.10%
Between 1 - 2.99:1
56
6.95
4,114,130
1.98
93,590
6.03
Between 3 - 4.99:1
62
7.69
13,092,847
6.29
132,230
8.53
Between 5 - 6.99:1
412
51.12
102,534,691
49.24
787,657
50.78
Between 7 - 8.99:1
257
31.89
85,402,409
41.01
506,064
32.63
Between 9- 9.99:1
9
1.12
3,051,103
1.47
14,411
0.93
Total
806
100.00%
$208,234,239
100.00%
$1,551,000
100.00%
* Preliminary; subject to change.
(u Special Tax Burden includes Outstanding Overlapping Land Secured Debt.
(2) Fiscal year 2014 -15 assessed value.
(3) Includes an estimated $55,000 in administrative fees.
141 Includes 10 developer -owned parcels with assessed values ranging from $1,270 to $6,152.
Source. Albert A. Webb Associates.
Historical Assessed Valuation. The following table represents the historical assessed
valuation of the taxable property in Improvement Area B of CFD No. 2003 -2 as shown on the
County Assessor's roll for fiscal years 2010 -11 through 2014 -15.
Preliminary; subject to change.
I *]
TABLE A -10
LAKE ELSINORE PUBLIC FINANCE AUTHORITY
COMMUNITY FACILITIES DISTRICT NO. 2003 -2
IMPROVEMENT AREA B
ASSESSED VALUATION HISTORY
(FISCAL YEARS 2010 -11 THROUGH 2014 -15)
Source: Albert A. Webb Associates.
Estimated Value -to -Lien Ratios for Top Ten Taxpayers. The following table
summarizes the assessed value -to -lien ratios within Improvement Area B of CFD No. 2003 -2 for
its top ten taxpayers.
TABLE A -11
LAKE ELSINORE PUBLIC FINANCE AUTHORITY
COMMUNITY FACILITIES DISTRICT NO. 2003 -2
IMPROVEMENT AREA B
ESTIMATED VALUE -TO -LIEN FOR TOP 10 TAXPAYERS
Land Assessed
Structure Assessed
Total Assessed
Fiscal Year
Valuation
Valuation
Valuation
2010 -11
$40,056,993
$64,041,242
$104,098,235
2011 -12
43,811,127
69,267,792
113,078,919
2012 -13
44,392,880
74,539,980
118,932,860
2013 -14
48,115,560
94,056,716
142,172,276
2014 -15
60,369,377
147,864,862
208,234,239
Source: Albert A. Webb Associates.
Estimated Value -to -Lien Ratios for Top Ten Taxpayers. The following table
summarizes the assessed value -to -lien ratios within Improvement Area B of CFD No. 2003 -2 for
its top ten taxpayers.
TABLE A -11
LAKE ELSINORE PUBLIC FINANCE AUTHORITY
COMMUNITY FACILITIES DISTRICT NO. 2003 -2
IMPROVEMENT AREA B
ESTIMATED VALUE -TO -LIEN FOR TOP 10 TAXPAYERS
RICHMOND AMERICAN HOMES OF MARYLAND INC
Percent
$122,409
7,89%
$8,676,996
$2,491,754
of
PARDEE HOMES
35
$59,099
3.81%
Projected
$1,203,006
3.95:1
FLYNN FRANK F
4
Total
0.61
Estimated
191,798
Projected
Fiscal
2
Overlapping
0.22
Fiscal
Year
Fiscal Year
Land
Value -
Year 2015-
2015 -16
2014 -15
Secured
to-
16 Special
Special
Assessed
Bonded
Lien
RICHMOND AMERICAN HOMES OF MARYLAND INC
71
$122,409
7,89%
$8,676,996
$2,491,754
3.48:1
PARDEE HOMES
35
$59,099
3.81%
$4,753,492
$1,203,006
3.95:1
FLYNN FRANK F
4
9,422
0.61
988,694
191,798
5.15:1
LASH JON EDWARD
2
3,442
0.22
454,592
70,073
6.49:1
IH2 PROP WEST
2
3,442
0.22
472,571
70,073
6.74:1
DUDZIAK EDWARD D
2
4,815
0.31
772,789
98,017
7.88:1
INDIVIDUAL OWNER
1
2,408
0.16
256,156
49,008
5.23:1
INDIVIDUAL OWNER
1
2,094
0.13
326,000
42,619
7.65:1
INDIVIDUAL OWNER
1
2,094
0.13
310,000
42,619
7.27:1
INDIVIDUAL OWNER
1
2108
0.16
288881
49008
5.89:1
Subtotal
120
$211,633
13.64%
$17,300,171
$4,307,983
4.02:1
All Others
686
$1,339,367
8636%
$190,934,068
$27,264,019
7.00:1
Totals
806
$1,551,000
100.00%
$208,234,239
$31,572,002
6.60:1
* Preliminary; subject to change.
nI Excludes General Obligation Bonded indebtedness applicable within Improvement Area B of CFD No. 2003 -2.
Source: Albert A. Webb Associates.
As of February 1, 2015, Richmond American owns 24 lots in Improvement Area B of
CFD No. 2003 -2, each of which is developed with a residential unit or is under construction with
a residential unit.
A -10
Delinquencies. The following table is a summary of Special Tax levies, collections and
delinquency rates in Improvement Area B of CFD No. 2003 -2 for Fiscal Years 2010 -11 through
the first installment of Fiscal Year 2014 -15.
TABLE A -12
LAKE ELSINORE PUBLIC FINANCE AUTHORITY
COMMUNITY FACILITIES DISTRICT NO. 2003 -2
IMPROVEMENT AREA B
SPECIAL TAX LEVIES, DELINQUENCIES AND DELINQUENCY RATES
FISCAL YEARS 2010 -11 THROUGH 2014 -15
Delinquencies at Fiscal Year End (1)(5) Delinquencies as of November 19, 2014 1 2l
Fiscal
Amount Parcels Parcels Amount Percent Parcels Amount
Percent
Year
Levied Levied Delinquent Delinquent Delinquent Delinquent Delinquent Delinquent
2010 -11
$1,314,879 655 9 $19,441 1.48% 0 $0
0.00%
2011 -12
1,333,116 655 11 29,556 2.22 0 0
0.00
2012 -13
1,309,063 655 5 8,760 0.67 2 31646
0.28
2013 -14
1,462,764 724 18 32,534 2.22 4 7,986
0.55
2014 -15
1,615,065 772 N/A N/A N/A N/A N/A
N/A
(i1 As of fiscal year end of year levied as provided by the continuing disclosure reports.
(2) Delinquency data as of November 19, 2014 provided by the County and Albert A. Webb Associates. Information
for fiscal year 2010 -2011 through fiscal year 2013 -14 for Improvement Area B of CFD No. 2003 -2 provided by the
continuing disclosure reports provided as of June 30 of fiscal year levied.
(3) Fiscal Year 2014 -15 fiscal year end data is not yet available.
Source: The Riverside County Assessor's Office; the City and Albert A. Webb Associates (as noted).
A -11
CFD NO. 2004 -3 AND IMPROVEMENT AREA 1
Location and Description. CFD No. 2004 -3 and Improvement Area 1 therein were
formed by the City in March, 2005 to finance the acquisition and construction of public streets,
streetscape, storm drain, sewer, domestic water, reclaimed water, fire station and other city
facilities, including City fees and fees of the Elsinore Valley Municipal Water District.
Improvement Area 1 of CFD No. 2004 -3 includes 509 taxable parcels. Improvement Area 1 of
CFD No. 2004 -2 consists of 100% "Developed Property." A parcel is "Developed Property'
when, exclusive of taxable public property and taxable property owner association property for
which the final subdivision was recorded on or before January 1 of the prior fiscal year,a
building permit for new construction was issued after January 1, 2004 and on or before May 1 of
the fiscal year preceding the most recent fiscal year for which the Special Taxes were levied.
497 completed single - family detached homes have been conveyed to individual homeowners.
For the complete text of the Rate and Method of Improvement Area 1 of CFD No. 2004 -3, see
Appendix D — 'RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES FOR
EACH TAXING JURISDICTION."
Assigned Special Taxes. Table A -13 below sets forth the current Assigned Special
Taxes that may be levied on the property within Improvement Area 1 of CFD No. 2004 -3 in
fiscal year 2015 -16 based on the development status within Improvement Area 1 of CFD No.
2004 -3 as of December 16, 2014. The Special Taxes in Improvement Area 1 of CFD No. 2004-
3 may not be levied after the 2045 -46 fiscal year. The final maturity of the Local Obligations of
Improvement Area B of CFD No. 2003 -2 is September 1, 2035.
A -12
TABLE A -13
LAKE ELSINORE PUBLIC FINANCE AUTHORITY
COMMUNITY FACILITIES DISTRICT NO. 2004 -3
IMPROVEMENT AREA 1
ASSIGNED SPECIAL TAXES
Residential
ZONE 1 Land
Projected
Fiscal Year
2015 -16
Special Tax
Assigned
D1
Less than 1,700
Special
$2,519
Percent
No, of Tax Per
6.02%
of Zone
Units Unit
Levy per Unit
Tax Levy(') Total
Total Projected
Fiscal Year
2015 -16 Special
Single Family Unit
D1
Less than 1,700
18
$2,519
$2,309
$41,562
6.02%
Single Family Unit
D2
1,700- 1,950
0
2,585
0
0
0.00
Single Family Unit
D3
1,951 - 2,200
17
2,651
2,429
41,299
5.98
Single Family Unit
D4
2,201 -2,450
41
2,851
2,612
107,110
15.52
Single Family Unit
D5
2,451 - 2,700
1
2,928
2,683
2,683
0.39
Single Family Unit
D6
2,701 - 2,950
111
3,004
2,753
305,626
44.27
Single Family Unit
D7
2,951 -3,200
66
3,175
2,910
192,078
27.82
Single Family Unit
D8
3,200 -3,450
0
31285
0
0
0.00
Single Family Unit
D9
3,451 - 31700
0
3,394
0
0
0.00
Single Family Unit
D10
3,701 - 3,950
0
3,504
0
0
0.00
Single Family Unit
Dl l
3,950 or greater
0
3,613
0
0
0.00
Non - Residential
Unit
NR1
N/A
0
17,477
0
0
0.00
264
$690,3$0
100.00%
ZONE 2 Single Family Unit
9 Y
D1
Less than 1,700
0
$2,839
$0
$0
0.00%
Single Family Unit
D2
1,700 - 1,950
0
2,951
0
0
0.00
Single Family Unit
D3
1,951 -2,200
25
3,050
2,795
69,881
8.60
Single Family Unit
D4
2,201 -2,450
23
3,133
2,871
66,032
8.13
Single Family Unit
D5
21451 -2,700
56
3,280
3,006
168,348
20.72
Single Family Unit
D6
2,701 -2,950
45
3,368
3,087
138,901
17.09
Single Family Unit
D7
2,951 -3,200
0
3,510
3,510
0
0.00
Single Family Unit
D8
3,200 - 3,450
40
3,652
3,347
133,863
16.47
Single Family Unit
D9
3,451 -3,700
31
3,822
3,503
108,596
13.36
Single Family Unit
D10
3,701 - 3,950
0
3,890
0
0
0.00
Single Family Unit
Dl l
3,950 or greater
35
3,958
3,628
126,971
15.63
Non - Residential
Unit
NR1
N/A
0
17,118
0
0
0.00
255
$812,592
_
100.00%
Grand Total
509
$1,502,950
(') Includes an estimated $55,000 in administrative fees.
Source: Albert A. Webb Associates.
For the complete text of the Rate and Method of Improvement Area 1 of CFD No. 2004-
3, see Appendix D - "RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES FOR
EACH TAXING JURISDICTION."
Estimated Direct and Overlapping Indebtedness. Within the boundaries of
Improvement Area 1 of CFD No. 2004 -3 are numerous overlapping local agencies providing
public services. The approximate amount of the direct and overlapping debt secured by a tax or
assessment on the parcels within Improvement Area 1 of CFD No. 2004 -3 for Fiscal Year 2014-
15 is shown in Table A -14 below.
A -13
TABLE A -14
LAKE ELSINORE PUBLIC FINANCE AUTHORITY
COMMUNITY FACILITIES DISTRICT NO. 2004 -3
IMPROVEMENT AREA 1
DIRECT AND OVERLAPPING DEBT
AS OF DECEMBER 10, 2014
I. Assessed Value
$122,670,463
2014 -2015 Equalized Roll Assessed Valuation
II. Land Secured Bond Indebtedness
Outstanding Direct and
Parcels in
Amount
Overlapping Bonded Debt
Type
Issued
Outstanding
%Applicable
CFD 2004 -31A 40)
Applicable
LAKE ELSINORE USD CFD 2005 -1 IA A
CFD
$6,480,000
$6,125,000
100%
509
$6,125,000
CFD 98 -1 TEMESCAL VALLEY PROJECT
CFO
25,890,013
24,476,459
6
509
1,535,647
RIVERSIDE COUNTY FLOOD CONTROL BENEFIT
ASSESSMENT ZONE NO. 3
AD
5,715,000
1,705,000
0
144
7,763
CFD 2004 -3 IMP AREA 1
CFD
22,635,000
22,000,000
100
509
22,000,000
TOTAL LAND SECURED BONDED DEBT Or
$29,668,410
Authorized but Unissued Direct and
Parcels in
Amount
Overlapping Indebtedness
Type
Authorized
Unissued
%Applicable
CFD 2004 -3 IA 10)
Applicable
LAKE ELSINORE USD CFD 2005 -1 IA A
CFD
$10,500,000
$4,020,000
100%
509
$4,020,000
CFD 98 -1 TEMESCAL VALLEY PROJECT
CFD
25,890,013
0
6
509
0
RIVERSIDE COUNTY FLOOD CONTROL BENEFIT
ASSESSMENT ZONE NO. 3
AD
8,000,000
2,285,000
0
144
10,403
CFD 2004 -3 IMP AREA 1
CFD
23,000,000
0 (a
100
509
0
TOTAL UNISSUED LAND SECURED
INDEBTEDNESS OI
$10,403
TOTAL OUTSTANDING AND UNISSUED LAND
SECURED INDEBTEDNESS
$29,678,813
III. General Obligation Bond Indebtedness
Outstanding Direct and
Parcels in
Amount
Overlapping Bonded Debt
Type
Issued
Outstanding
%Applicable
CFD 2004 -3 IA 10)
Applicable
METROPOLITAN WATER DEBT SERVICE
GO
$850,000,000
$132,275,000
0,005%
509
$7,009
TOTAL GENERAL OBLIGATION BONDED DEBT nl
$7,009
Authorized but Unissued Direct and
Parcels in
Amount
Overlapping Indebtedness
Type
Authorized
Unissued
%Applicable
CFD 2004 -3 IA 10)
Applicable
METROPOLITAN WATER DEBT SERVICE
GO
$850,000,000
$0
0.005%
509
$0
TOTAL UNISSUED GENERAL OBLIGATION
INDEBTEDNESS 01
$0
TOTAL OUTSTANDING AND UNISSUED GENERAL
OBLIGATION INDEBTEDNESS
$7,009
TOTAL OF ALL OUTSTANDING DIRECT AND
OVERLAPPING BONDED DEBT $29,675,419
TOTAL OF ALL OUTSTANDING AND UNISSUED
DIRECT AND OVERLAPPING INDEBTEDNESS $29,685,822
IV. Ratios to 2014 -2015 Assessed Valuation
Outstanding Land Secured Bonded Debt" 4.131
Total Outstanding Bonded Debt" 4.13:1
" Preliminary; subject to change.
Ill Albert A. Webb Associates is not aware of any additional bonded debt for parcels in Improvement Area 1 of CFD No. 2004 -3 for
fiscal year 2014 -2015.
cal Additional bonds will be issued for refunding only.
I'IAII parcels have subdivided into 509 individual parcels for fiscal year 2014 -15.
Source: Albert A. Webb Associates.
Value -To -Lien Ratios. The Authority has obtained the assessed values of all of the
taxable property in Improvement Area 1 of CFD No. 2004 -3 (509 parcels in total), as established
by the County Assessor for Fiscal Year 2014 -15, which total is $122,670,463. The direct and
overlapping land secured special tax and assessment bonded indebtedness (excluding general
obligation bonded indebtedness) within Improvement Area 1 of CFD No. 2004 -3 as of
December 10, 2014 was approximately $29,685,822. The assessed value -to -lien ratio of the
property within Improvement Area 1 of CFD No. 2004 -3, based on the Fiscal Year 2014 -15
assessed values, the aggregate principal amount of the CFD No. 2004 -3 Bonds and the
A -14
estimated direct and overlapping land secured special tax and assessment bonded
indebtedness (excluding general obligation bonded indebtedness) within Improvement Area 1 of
CFD No. 2004 -3 equals approximately 4.13- to -1.*
Value -to -lien Ratios by Category. The following table summarizes the assessed
value -to -lien ratios within Improvement Area 1 of CFD No. 2004 -3 by value -to -lien category.
TABLE A -15
LAKE ELSINORE PUBLIC FINANCE AUTHORITY
COMMUNITY FACILITIES DISTRICT NO. 2004 -3
IMPROVEMENT AREA 1
DISTRIBUTION OF ASSESSED VALUE -TO- SPECIAL TAX BURDEN RATIOS
Assessed Value to Total Estimated Fiscal
Special Tax No. of Percent of Assessed Percent Year 2015 -16 Percent of
Burden(') Parcels Total Value( �) of Total Special Tax LeW(3) Total
Between 1 - 1.99:1(°)
Land Assessed
12
2.36%
Fiscal Year
$819,421
0.67%
$35,316
2.35%
Between 2 - 2.99:2
$71,727,320
1
0.20
32,800,827
196,522
0.16
3,347
0.22
Between 3 - 3.99:1
105,742,647
222
43.61
76,047,795
45,883,558
37.40
645,539
42.95
Between 4 - 4.99:1
203
39.88
54,346,295
44.30
611,429
40.68
Between 5 - 5.99:1
71
13.95
21,424,667
17.47
207,318
13.79
Total
509
100.00%
$122,670,463
100.00%
$1,502,950
100.00%
` Preliminary; subject to change.
(') Special Tax Burden includes outstanding overlapping land secured debt,
(Z) Fiscal year 2014 -15 assessed value.
(3) Includes an estimated $55,000 in administrative fees.
(4) Includes 12 developer -owned parcels with assessed values of $68,289 per parcel.
Source: Albert A. Webb Associates.
Historical Assessed Valuation. The following table represents the historical assessed
valuation of the taxable property in Improvement Area 1 of CFD No. 2004 -3 as shown on the
County Assessor's roll for fiscal years 2010 -11 through 2014 -15.
TABLE A -16
LAKE ELSINORE PUBLIC FINANCE AUTHORITY
COMMUNITY FACILITIES DISTRICT NO. 2004 -3
IMPROVEMENT AREA 1
ASSESSED VALUATION HISTORY
(FISCAL YEARS 2010 -11 THROUGH 2014 -15)
Source; Albert A. Webb Associates.
Preliminary; subject to change.
A -15
Land Assessed
Structure Assessed
Total Assessed
Fiscal Year
Valuation
Valuation
Valuation
2010 -11
$32,391,828
$71,727,320
.$104,119,148
2011 -12
32,800,827
73,469,492
106,270,319
2012 -13
33,113,773
72,628,874
105,742,647
2013 -14
34,658,022
76,047,795
110,705,817
2014 -15
37,808,143
84,862,320
122,670,463
Source; Albert A. Webb Associates.
Preliminary; subject to change.
A -15
Estimated Value -to -Lien Ratios for Top Ten Taxpayers. The following table
summarizes the assessed value -to -lien ratios within Improvement Area 1 of CFD No. 2004 -3 for
its top ten taxpayers.
TABLE A -17
LAKE ELSINORE PUBLIC FINANCE AUTHORITY
COMMUNITY FACILITIES DISTRICT NO. 2004 -3
IMPROVEMENT AREA 1
ESTIMATED VALUE -TO -LIEN FOR TOP 10 TAXPAYERS
* Preliminary; subject to change.
M Excludes General Obligation Bonded indebtedness applicable within Improvement Area 1 of CFD No. 2004 -3.
Source: Albert A. Webb Associates.
As of February 1, 2015, each of the lots owned by Richmond American is either
developed with a completed residential unit or under construction with a residential unit.
ME
Percent
of
Projected
Total
Projected
Fiscal
Estimated
Fiscal
Year
Fiscal Year
Overlapping
Year 2015-
2015 -16
2014 -15
Land Secured
Value -to-
16 Special
Special
Assessed
Bonded
Lien
Property Owner
Parcels
Tax
Tax
Value
Debt0)
Ratio*
RICHMOND AMERICAN HOMES OF
MARYLANDINC
12
$35,316
2,35%
$819,421
$697,149
1.18:1
THR CALIF
4
11,125
0.74
841,298
219,617
3.83:1
2013 1 IN BORROWER
2
5,840
0.39
409,929
115,284
3.56:1
BUTTAR SURJIT
2
5,507
0.37
536,115
108,704
4.93:1
EIDER FERAS
2
6,381
0.42
688,000
125,964
5.46:1
WU PO YUN
2
5,549
0.37
416,946
109,531
3.81:1
INDIVIDUAL OWNER
1
3,006
0.20
223,197
59,343
3.76:1
INDIVIDUAL OWNER
1
2,795
0.19
194,337
55,179
3.52:1
INDIVIDUAL OWNER
1
3,087
0.21
245,603
60,932
4.03:1
INDIVIDUAL OWNER
1
2910
0.19
236356
57449
4.11:1
Subtotal
28
81,517
5.42
4,611,202
1,609,152
2.87:1
All Others
499
1,421,433
94.58
118,059,261
28,059,258
4.21:1
Totals
509
$1,502,950
100.00%
$122,670,463
$29,668,410
4.13:1
* Preliminary; subject to change.
M Excludes General Obligation Bonded indebtedness applicable within Improvement Area 1 of CFD No. 2004 -3.
Source: Albert A. Webb Associates.
As of February 1, 2015, each of the lots owned by Richmond American is either
developed with a completed residential unit or under construction with a residential unit.
ME
Delinquencies. The following table is a summary of Special Tax levies, collections and
delinquency rates in Improvement Area B of CFD No. 2003 -2 for Fiscal Years 2010 -11 through
the first installment of Fiscal Year 2014 -15,
TABLE A -18
LAKE ELSINORE PUBLIC FINANCE AUTHORITY
COMMUNITY FACILITIES DISTRICT NO. 2004 -3
IMPROVEMENT AREA 1
SPECIAL TAX LEVIES, DELINQUENCIES AND DELINQUENCY RATES
FISCAL YEARS 2010 -11 THROUGH 2014 -15
Delinquencies as of November 19, 2014 (1)
Parcels
Amount
Percent
Delinquencies at Fiscal Year End r�1rs1
Fiscal
Amount
Parcels
Parcels
Amount
Percent
Year
Levied
Levied
Delinquent
Delinquent
Delinquent
2010 -11
$1,418,597
509
11
$39,493
2.78%
2011 -12
1,477,910
509
16
55,140
3.73
2012 -13
1,477,914
509
10
37,562
2.54
2013 -14
1,505,271
509
15
28,068
1.86
2014 -15
1,550,601
509
N/A
N/A
N/A
Delinquencies as of November 19, 2014 (1)
Parcels
Amount
Percent
Delinquent
Delinquent
Delinquent
0
$0
0,00%
0
0
0.00
1
2,708
0.18
4
8,266
0.55
N/A
N/A
N/A
111 As of fiscal year end of year levied provided by the continuing disclosure reports.
(3) Delinquency data as of November 19, 2014 provided by the County and Albert A. Webb Associates. Information
for Fiscal Year 2010 -2011 through Fiscal Year 2013 -14 for Improvement Area 1 of CFD 2004 -3 provided by the
continuing disclosure reports provided as of June 30 of fiscal year end levied.
131 Fiscal Year 2014 -15 data is not yet available.
Source: The Riverside County Assessor's Office; the City and Albert A. Webb Associates (as noted).
A -17
CFD NO. 2004 -3 AND IMPROVEMENT AREA 2
Location and Description. CFD No. 2004 -3 and Improvement Area 2 therein were
formed by the City in March, 2005 to finance the acquisition and construction of public streets,
streetscape, storm drain, sewer, domestic water, reclaimed water, fire station and other city
facilities, including City fees and fees of the Elsinore Valley Municipal Water District.
Improvement Area 2 of CFD No. 2004 -3 includes 562 taxable parcels. Improvement Area 2 of
CFD No. 2004 -3 consists of 100% "Developed Property." A parcel is "Developed Property"
when, exclusive of taxable public property and taxable property owner association property for
which the final subdivision was recorded on or before January 1 of the prior fiscal year, a
building permit for new construction was issued after January 1, 2004 and on or before May 1 of
the fiscal year preceding the most recent fiscal year for which the Special Taxes were levied.
512 completed single - family detached homes have been conveyed to individual homeowners.
For the complete text of the Rate and Method of Improvement Area 2 of CFD No. 2004 -3, see
Appendix D — 'RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES FOR
EACH TAXING JURISDICTION."
Assigned Special Taxes. Table A -19 below sets forth the current Assigned Special
Taxes that may be levied on the property within Improvement Area 2 of CFD No. 2004 -3 in
fiscal year 2015 -16 based on the development status within Improvement Area 2 of CFD No.
2004 -3 as of December 16, 2014. The Special Taxes in Improvement Area 2 of CFD No. 2004-
3 may not be levied after the 2045 -46 fiscal year. The final maturity of the Local Obligations of
Improvement Area 2 of CFD No. 2004 -3 is September 1, 2037.
AWQ
TABLE A -19
LAKE ELSINORE PUBLIC FINANCE AUTHORITY
COMMUNITY FACILITIES DISTRICT NO. 2004 -3
IMPROVEMENT AREA 2
ASSIGNED SPECIAL TAXES
Single Family Unit
D1
Total
0
Projected
Projected
$0
Fiscal
Fiscal
D2
Year
Year
Assigned
2015 -16
2015 -16
Special
Special
Special Percent
Tax Residential No. of Tax Per
Tax Levy
Tax of Zone
ZONE 1 Land Use Class Floor Area Units(n Unit
per Unit
Levvl �1 Total
Single Family Unit
D1
Less than 1,700
0
$2,797
$0
$0
0.00%
Single Family Unit
D2
1,700 - 1,950
0
2,868
0
0
0.00
Single Family Unit
D3
1,951 - 2,200
23
2,940
2,143
49,297
7.44
Single Family Unit
D4
2,201 - 2,450
34
3,158
2,302
78,274
11.81
Single Family Unit
D5
2,451 -2,700
44
3,242
2,363
103,977
15.69
Single Family Unit
D6
2,701 -2,950
93
3,325
2,424
225,439
34.03
Single Family Unit
D7
2,951 -3,200
56
3,512
2,560
143,355
21.64
Single Family Unit
D8
3,200 - 3,450
8
3,631
2,647
21,174
3.20
Single Family Unit
D9
3,451 - 3,700
15
3,750
21734
41,005
6.19
Single Family Unit
D10
3,701 - 3,950
0
3,869
0
0
0.00
Single Family Unit
D11
3,950 or greater
0
3,988
0
0
0.00
Non - Residential Unit
NR1
_ N/A
0
21,719
0
0
0.00
273
$662,521
100.00%
ZONE 2 Single Family Unit
D1
Less than 1,700
0
3,158
$0
$0
0.00%
Single Family Unit
D2
1,700 - 11950
0
3,277
0
0
0.00
Single Family Unit
D3
1,951 -2,200
0
3,377
0
0
0.00
Single Family Unit
D4
2,201 - 2,450
21
3,467
2,527
53,075
6.32
Single Family Unit
D5
2,451 - 2,700
27
3,627
2,644
71,399
8.50
Single Family Unit
D6
2,701 - 2,950
44
3,724
2,715
119,453
14.22
Single Family Unit
D7
2,951 - 3,200
1
3,867
2,819
2,819
0.34
Single Family Unit
D8
3,200 - 3,450
86
4,011
2,924
251,480
29.94
Single Family Unit
D9
3,451 -3,700
64
4,198
3,060
195,857
23.32
Single Family Unit
D10
3,701 - 31950
0
4,272
0
0
0.00
Single Family Unit
D11
3,950 or greater
46
4,346
3,168
145,747
17.35
Non - Residential Unit
NR1
N/A
0
20,423
0
0
0.00
289
$839,829
100.00%
Grand Total
562
$1,502,350
(1) One parcel (APN 349550003 -1) prepaid Special Taxes on November 4, 2012
t �1 Includes an estimated $55,000 in administrative fees.
Source: Albert A. Webb Associates.
For the complete text of the Rate and Method of Improvement Area 2 of CFD No. 2004-
3, see Appendix D - "RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES FOR
EACH TAXING JURISDICTION."
Estimated Direct and Overlapping Indebtedness. Within the boundaries of
Improvement Area 2 of CFD No. 2004 -3 are numerous overlapping local agencies providing
public services. The approximate amount of the direct and overlapping debt secured by a tax or
assessment on the parcels within Improvement Area 2 of CFD No. 2004 -3 for Fiscal Year 2014-
15 is shown in Table A -20 below.
A -19
TABLE A -20
LAKE ELSINORE PUBLIC FINANCE AUTHORITY
COMMUNITY FACILITIES DISTRICT NO. 2004 -3
IMPROVEMENT AREA 2
DIRECT AND OVERLAPPING DEBT
AS OF DECEMBER 10, 2014
I. Assessed Value
2014 -2015 Equalized Roll Assessed Valuation
II. Land Secured Bond Indebtedness
Outstanding Direct and
Overlapping Bonded Debt
LAKE ELSINORE USD CFD 2005 -1 IA B
CFD 98 -1 TEMESCAL VALLEY PROJECT
RIVERSIDE COUNTY FLOOD CONTROL BENEFIT
ASSESSMENT ZONE NO 3
CFD 2004 -3 IMP AREA 2
TOTAL LAND SECURED BONDED DEBT0)
Authorized but Unissued Direct and
Overlapping Indebtedness
LAKE ELSINORE USD CFD 2005 -1 IA B
CFD 98 -1 TEMESCAL VALLEY PROJECT
RIVERSIDE COUNTY FLOOD CONTROL BENEFIT
ASSESSMENT ZONE NO.3
CFD 2004 -3 IMP AREA 2
TOTAL UNISSUED LAND SECURED INDEBTEDNESS Or
TOTAL OUTSTANDING AND UNISSUED LAND
SECUREDINDEBTEDNESS
III. General Obligation Bond Indebtedness
Outstanding Direct and
Overlapping Bonded Debt
METROPOLITAN WATER DEBT SERVICE
TOTAL GENERAL OBLIGATION BONDED DEBT 01
Authorized but Unissued Direct and
Overlapping Indebtedness
METROPOLITAN WATER DEBT SERVICE
TOTAL UNISSUED GENERAL OBLIGATION
INDEBTEDNESSI'I
TOTAL OUTSTANDING AND UNISSUED GENERAL
$142,339,275
Outstanding Land Secured Bonded Debt" 5.42:1
Total Outstanding Bonded Debt' 5 42:1
` Preliminary; subject to change.
0) Albert A. Webb Associates is not aware of any additional bonded debt for parcels in Improvement Area 2 of CFD No. 2004 -3 for fiscal
year 2014 -2015.
(2) Additional bonds will be issued for refunding only. [confirm]
I'I All parcels have subdivided into 563 individual parcels for fiscal year 2014 -15 for Improvement Area 2. One parcel (APN 349550003-
1) prepaid Special Taxes on November 4, 2012.
Source: Albert A. Webb Associates.
Value -To -Lien Ratios. The Authority has obtained the assessed values of all of the
taxable property in Improvement Area B of CFD No. 2004 -3 (562 parcels total), as established
by the County Assessor for Fiscal Year 2014 -15, which total is $142,339,275. The direct and
overlapping land secured special tax and assessment bonded indebtedness (excluding general
obligation bonded indebtedness) within Improvement Area 2 of CFD No. 2004 -3 as of
December 10, 2014 was approximately $26,288,631. The assessed value -to -lien ratio of the
property within Improvement Area 2 of CFD No. 2004 -3, based on the Fiscal Year 2014 -15
assessed values, the aggregate principal amount of the CFD No. 2004 -3 Bonds and the
estimated direct and overlapping land secured special tax and assessment bonded
Parcels in
Amount
Type
Issued
Outstanding
% Applicable
CFD 2004 -31A 201
Applicable
CFD
$0
$0
100%
562
$0
CFD
25,890,013
24476,459
6
495
1,499,300
AD
5,715,000
1,705,000
2
538
28,288
CFD
23,460,000
24,715,000
100
562
24,715,000
$26,242,588
Parcels in
Amount
Type
Authorized
Unissued
%Applicable
CFD 2004 -31A 21'I
Applicable
CFD
$11,500,000
$11,500,000
100%
562
$11,500,000
CFD
25,890,013
0
6
495
0
AD
8,000,000
2,285,000
2
538
37,910
CFD
33,000,000
1
100
562
0
$37,910
$26,280,496
Parcels in
Amount
Tvpe
Issued
Outstanding
%Applicable
CFD 2004 -31A 2r`I
Applicable
GO
$850,000,000
$132,275,000
0.006%
562
$8,133
$8,133
Parcels in
Amount
Type
Authorized
Unissued
% Applicable
CFD 2004 -31A 20
Applicable
GO
$850,000,000
$0
0.006%
562
$0
$0
Outstanding Land Secured Bonded Debt" 5.42:1
Total Outstanding Bonded Debt' 5 42:1
` Preliminary; subject to change.
0) Albert A. Webb Associates is not aware of any additional bonded debt for parcels in Improvement Area 2 of CFD No. 2004 -3 for fiscal
year 2014 -2015.
(2) Additional bonds will be issued for refunding only. [confirm]
I'I All parcels have subdivided into 563 individual parcels for fiscal year 2014 -15 for Improvement Area 2. One parcel (APN 349550003-
1) prepaid Special Taxes on November 4, 2012.
Source: Albert A. Webb Associates.
Value -To -Lien Ratios. The Authority has obtained the assessed values of all of the
taxable property in Improvement Area B of CFD No. 2004 -3 (562 parcels total), as established
by the County Assessor for Fiscal Year 2014 -15, which total is $142,339,275. The direct and
overlapping land secured special tax and assessment bonded indebtedness (excluding general
obligation bonded indebtedness) within Improvement Area 2 of CFD No. 2004 -3 as of
December 10, 2014 was approximately $26,288,631. The assessed value -to -lien ratio of the
property within Improvement Area 2 of CFD No. 2004 -3, based on the Fiscal Year 2014 -15
assessed values, the aggregate principal amount of the CFD No. 2004 -3 Bonds and the
estimated direct and overlapping land secured special tax and assessment bonded
indebtedness (excluding general obligation bonded indebtedness) within Improvement Area 2 of
CFD No. 2004 -3 equals approximately 5.42- to -1.*
Value -to -lien Ratios by Category. The following table summarizes the assessed
value -to -lien ratios within Improvement Area 2 of CFD No. 2004 -3 by value -to -lien category.
TABLE A -21
LAKE ELSINORE PUBLIC FINANCE AUTHORITY
COMMUNITY FACILITIES DISTRICT NO. 2004 -3
IMPROVEMENT AREA 2
DISTRIBUTION OF ASSESSED VALUE -TO- SPECIAL TAX BURDEN RATIOS
Preliminary; subject to change.
0) Special Tax Burden includes outstanding overlapping land secured debt.
(2) One parcel (APN 349550003 -1) prepaid Special Taxes on November 4, 2012.
(3) Fiscal year 2014 -15 assessed value.
(4) Includes an estimated $55,000 in administrative fees.
(5) Includes 26 developer -owned parcels with assessed values ranging from $58,660 to $83,283.
Source: Albert A. Webb Associates.
Historical Assessed Valuation. The following table represents the historical assessed
valuation of the taxable property in Improvement Area 2 of CFD No. 2004 -3 as shown on the
County Assessor's roll for fiscal years 2010 -11 through 2014 -15.
Preliminary; subject to change.
A -21
Estimated
Fiscal Year
2015 -16
Assessed Value to
No. of
Percent of
Total Assessed
Percent of
Special Tax
Percent of
Special Tax Burden_(')*
Parcels 12)
Total
Value(3)
Total
Levy(4)
Total
Between 1 - 2.99:1(5t
26
4.63%
$1,723,105
1.21%
$65,560
4.36%
Between 3- 4.991
117
20.82
23,605,018
16.58
312,185
20.78
Between 5- 6.99:1
317
56.41
84,888,955
59.64
861,739
57.36
Between 7-8.99 1
98
17.44
30,650,748
21,53
2513,413
16.87
Between 9 - 10.99:1
4
0.71
1,471,449
1.03
9,452
0.63
Total
562
100.00%
_
$142,339,275
100.00%
$1,502,350
100.00%
Preliminary; subject to change.
0) Special Tax Burden includes outstanding overlapping land secured debt.
(2) One parcel (APN 349550003 -1) prepaid Special Taxes on November 4, 2012.
(3) Fiscal year 2014 -15 assessed value.
(4) Includes an estimated $55,000 in administrative fees.
(5) Includes 26 developer -owned parcels with assessed values ranging from $58,660 to $83,283.
Source: Albert A. Webb Associates.
Historical Assessed Valuation. The following table represents the historical assessed
valuation of the taxable property in Improvement Area 2 of CFD No. 2004 -3 as shown on the
County Assessor's roll for fiscal years 2010 -11 through 2014 -15.
Preliminary; subject to change.
A -21
A- 22
LAKE ELSINORE PUBLIC FINANCE AUTHORITY
COMMUNITY FACILITIES DISTRICT NO. 2004 -3
IMPROVEMENT AREA 2
ASSESSED VALUATION HISTORY
(FISCAL YEARS 2010 -11 THROUGH 2014 -15)
Source: Albert A. Webb Associates.
Estimated Value -to -Lien Ratios for Top Ten Taxpayers. The following table
summarizes the assessed value -to -lien ratios within Improvement Area 2 of CFD No. 2004 -3 for
its top ten taxpayers.
TABLE A -23
LAKE ELSINORE PUBLIC FINANCE AUTHORITY
COMMUNITY FACILITIES DISTRICT NO. 2004 -3
IMPROVEMENT AREA 2
ESTIMATED VALUE -TO -LIEN FOR TOP 10 TAXPAYERS
Percent of
Projected
Projected Total
Fiscal Fiscal
Year2015- Year2015-
16 Special 16 Special
Estimated
Overlapping
Fiscal Year Land Value
2014 -15 Secured to-
Assessed Bonded Lien
Property Owner
Land Assessed
Structure Assessed
Total Assessed
Fiscal Year
Valuation
Valuation
Valuation
2010 -11
$35,617,522
$67,575,263
$103,192,785
2011 -12
36,550,450
70,410,851
106,961,301
2012 -13
35,947,659
69,703,536
105,651,195
2013 -14
36,643,145
74,838,566
111,481,711
2014 -15
43,306,178
99,033,097
142,339,275
Source: Albert A. Webb Associates.
Estimated Value -to -Lien Ratios for Top Ten Taxpayers. The following table
summarizes the assessed value -to -lien ratios within Improvement Area 2 of CFD No. 2004 -3 for
its top ten taxpayers.
TABLE A -23
LAKE ELSINORE PUBLIC FINANCE AUTHORITY
COMMUNITY FACILITIES DISTRICT NO. 2004 -3
IMPROVEMENT AREA 2
ESTIMATED VALUE -TO -LIEN FOR TOP 10 TAXPAYERS
Percent of
Projected
Projected Total
Fiscal Fiscal
Year2015- Year2015-
16 Special 16 Special
Estimated
Overlapping
Fiscal Year Land Value
2014 -15 Secured to-
Assessed Bonded Lien
Property Owner
Parcels
Tax
Tax
Value
Debt"'*
Ratio'
RICHMOND AMERICAN HOMES OF MARYLAND INC
50
$127,217
8.47%
$9,086,273
$2,222,185
4.09:1
SECRETARY HOUSING & URBAN DEV OF WASH DC
2
5,571
0.37
508,000
97,312
5.22:1
HSU LIN HUA
2
6,093
0.41
507,926
106,424
4.77:1
WU JIUN TSONG
2
6,121
0.41
525,649
106,911
4.92:1
INDIVIDUAL OWNER
1
2,715
0.18
210,048
47,422
4.43:1
INDIVIDUAL OWNER
1
2,302
0.15
229,022
40,214
5,70:1
INDIVIDUAL OWNER
1
3,168
0.21
331,286
55,345
5.99:1
INDIVIDUAL OWNER
1
2,560
0.17
295,000
44,716
6.60:1
INDIVIDUAL OWNER
1
2,302
0.15
215,346
40,214
5.36'.1
INDIVIDUAL OWNER
1
3 060
0.20
281262
53 456
5.26:1
Subtotal
62
161,109
10.72
12,189,812
2,814,198
4.33:1
All Others
500
1,341,241
89.28
130,149,463
23,428,390
5.56:1
Totals
562
$1,502,350
100.00%
$142,339,275
$26,242,588
5.42:1
' Preliminary; subject to change.
I'I Excludes general obligation bonded indebtedness applicable within Improvement Area 2 of CFD No. 2004 -3.
Source: Albert A. Webb Associates.
As of February 1, 2015, each of the lots owned by Richmond American is either
developed with a completed residential unit or under construction with a residential unit.
Delinquencies. The following table is a summary of Special Tax levies, collections and
delinquency rates in Improvement Area 2 of CFD No. 2004 -3 for Fiscal Years 2010 -11 through
the first installment of Fiscal Year 2014 -15.
A -22
TABLE A -24
LAKE ELSINORE PUBLIC FINANCE AUTHORITY
COMMUNITY FACILITIES DISTRICT NO. 2004 -3
IMPROVEMENT AREA 2
SPECIAL TAX LEVIES, DELINQUENCIES AND DELINQUENCY RATES
FISCAL YEARS 2010 -11 THROUGH 2014 -15
Delinquencies as of November 19, 2014 (3)
Parcels
Amount
Percent
Delinquencies at Fiscal Year End r11(2)
Fiscal
Amount
Parcels
—
Parcels
Amount
Percent
Year
Levied
Levied(4)
Delinquent
Delinquent
Delinquent
2010 -11
$1,740,740
522
8
$30,873
1.77%
2011 -12
1,740,741
522
20
69,418
3.99
2012 -13
1,771,681
521
8
43,856
2.48
2013 -14
1,810,426
563
11
27,817
1.54
2014 -15
1,548,043
562
N/A
N/A
N/A
Delinquencies as of November 19, 2014 (3)
Parcels
Amount
Percent
Delinquent
Delinquent
Delinquent
0
$0
0.00%
0
0
0.00
3
4,813
0.27
2
6,643
0.37
N/A
N/A
N/A
11) As of fiscal year end of year levied provided by the continuing disclosure reports.
(I) Fiscal year 2014 -15 data is not yet available.
(3) Delinquency data as of November 19, 2014 provided by the County and Albert A. Webb Associates. Information
for fiscal year 2010 -2011 through fiscal year 2013 -14 provided by the continuing disclosure reports provided as of
June 30 of fiscal year levied.
(4) One parcel (APN 349550003 -1) prepaid Special Taxes on November 4, 2012.
Source: The Riverside County Assessor's Office; the City and Albert A. Webb Associates (as noted).
2m]
CFD NO. 2005 -1
Location and Description. CFD No. 2005 -1 was formed by the City in January, 2005
to finance the acquisition and /or construction of streets, streetscape, parks, City fees, and fees
of the Elsinore Valley Municipal Water District. CFD No. 2005 -1 includes 233 taxable parcels.
CFD No. 2005 -1 consists of 100% Developed "Property," meaning all County Assessor's
parcels of taxable property in CFD No. 2005 -1 were issued a building permit on or before March
1 preceding the most recent fiscal year in which the Special Tax was levied.; 233 completed
single - family detached homes have been conveyed to individual homeowners. For the
complete text of the Rate and Method of CFD No. 2005 -1, see Appendix D — "RATE AND
METHOD OF APPORTIONMENT OF SPECIAL TAXES FOR EACH TAXING JURISDICTION."
Assigned Special Taxes. Table A -25 below sets forth the current Assigned Special
Taxes that may be levied on the property within CFD No. 2005 -1 in fiscal year 2015 -16 based
on the development status within CFD No. 2005 -1 as of December 16, 2014. The Special
Taxes in CFD No. 2005 -1 may not be levied after the 2043 -44 fiscal year. The final maturity of
the Local Obligations of CFD No. 2005 -1 is September 1, 2036.
TABLE A -25
LAKE ELSINORE PUBLIC FINANCE AUTHORITY
COMMUNITY FACILITIES DISTRICT NO. 2005 -1
ASSIGNED SPECIAL TAXES
Single Family Unit
D1
Total
24
Projected
Projected
Assigned
Fiscal Year
Fiscal Year
Special
2015-16
2015 -16
Tax Residential Floor No. of Tax Per
Special Tax
Special Tax Percent
Land Use Class Area Units Unit
Levy per Unit
Levvl'l of Total
Single Family Unit
D1
Less than 1,801
24
$2,372
$2,129
$51,096
7.84%
Single Family Unit
D2
1,801 - 2,050
75
2,590
2,325
174,364
26.76
Single Family Unit
D3
2,051 -2,300
55
3,167
2,842
156,329
23.99
Single Family Unit
D4
2,301 - 2,550
40
3,559
3,195
127,785
19.61
Single Family Unit
D5
Greater than 2,551
39
4,060
3,644
142,127
21.81
Non - Residential Unit
NR1
N/A
0
21,649
0
0
0.00
Totals
233
$651,700
100.00%
(') Includes an estimated $40,000 in administrative fees.
Source: Albeit A. Webb Associates.
For the complete text of the Rate and Method of CFD No. 2005 -1, see Appendix D —
"RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES FOR EACH TAXING
JURISDICTION."
Estimated Direct and Overlapping Indebtedness. Within the boundaries of CFD No.
2005 -1 are numerous overlapping local agencies providing public services. The approximate
amount of the direct and overlapping debt secured by a tax or assessment on the parcels within
CFD No. 2005 -1 for Fiscal Year 2014 -15 is shown in Table A -26 below.
F-AVZ
TABLE A -26
LAKE ELSINORE PUBLIC FINANCE AUTHORITY
COMMUNITY FACILITIES DISTRICT NO. 2005 -1
DIRECT AND OVERLAPPING DEBT
AS OF DECEMBER 10, 2014
I. Assessed Value
2014 -2015 Equalized Roll Assessed Valuation
II. Land Secured Bond Indebtedness
Outstanding Direct and
Overlapping Bonded Debt
RIVERSIDE COUNTY FLOOD CONTROL BENEFIT
ASSESSMENT ZONE NO.3
CFD 2005 -1 SERENITY
TOTAL LAND SECURED BONDED DEBT111
Authorized but Unissued Direct and
Overlapping Indebtedness
RIVERSIDE COUNTY FLOOD CONTROL BENEFIT
ASSESSMENT ZONE NO.3
CFD 2005 -1 SERENITY
TOTAL UNISSUED LAND SECURED
INDEBTEDNESS 111
TOTAL OUTSTANDING AND UNISSUED LAND
SECUREDINDEBTEDNESS
Ill. General Obligation Bond Indebtedness
Outstanding Direct and
Overlapping Bonded Debt
METROPOLITAN WATER DEBT SERVICE
TOTAL GENERAL OBLIGATION BONDED DEBT 111
Authorized but Unissued Direct and
Overlapping Indebtedness
METROPOLITAN WATER DEBT SERVICE
TOTAL UNISSUED GENERAL OBLIGATION
INDEBTEDNESS 111
TOTAL OUTSTANDING AND UNISSUED GENERAL
$51,970,691
OBLIGATION INDEBTEDNESS $2,970
TOTAL OF ALL OUTSTANDING DIRECT AND
OVERLAPPING BONDED DEBT $8,520,024
TOTAL OF ALL OUTSTANDING AND UNISSUED
DIRECT AND OVERLAPPING INDEBTEDNESS $77,35fi,178
IV. Ratios to 2014 -2015 Assessed Valuntinn
Outstanding Land Secured Bonded Debt" 6.101
Total Outstanding Bonded Debt" 6.10.1
' Preliminary; subject to change.
ru Albert A. Webb Associates is not aware of any additional bonded debt for parcels in CFD No. 2005 -1 for fiscal year 2014 -2015.
(2)Additional bonds will be issued for refunding only. [confirmp'IAII parcels have subdivided into 233 individual parcels for fiscal year
2014 -15.
Source: Albert A. Webb Associates.
Value -To -Lien Ratios. The Authority has obtained the assessed values of all of the
taxable property in CFD No. 2005 -1 (233 parcels in total), as established by the County
Assessor for Fiscal Year 2014 -15, which total is $51,970,691. The direct and overlapping land
secured special tax and assessment bonded indebtedness (excluding general obligation
bonded indebtedness) within CFD No. 2005 -1 as of December 10, 2014 was approximately
$11,356178. The assessed value -to -lien ratio of the property within CFD No. 2005 -1, based on
the Fiscal Year 2014 -15 assessed values, the aggregate principal amount of the CFD No. 2005-
1 Bonds and the estimated direct and overlapping land secured special tax and assessment
bonded indebtedness (excluding general obligation bonded indebtedness) within CFD No.
2005 -1 equals approximately 6.10- to -1.*
Preliminary, subject to change.
A -25
Parcels in
Amount
Type
Issued
Outstanding
%Applicable
CFD 2005 -11'1
Applicable
AD
$5,715,000
$1,705,000
1%
233
$12,054
CFD
9,180,000
8,505,000
100
233
8,505000
$8,517,054
Parcels in
Amount
Tvpe
Authorized
Unissued
%Applicable
CFD 2005 -1 01
Applicable
AD
$8,000,000
$2,285,000
1%
233
$16,154
CFD
12,000,000
2,820,0000
100
233
2,820,000
$2,836,154
$11,353,208
Parcels in
Amount
Tvpe
Issued
Outstanding
%Applicable
CFD 2005 -11'1
Applicable
GO
$850,000,000
$132,275,000
0.002%
233
$2,970
$2,970
Parcels in
Amount
Type
Authorized
Unissued
%Applicable
CFD 2005 -101
Applicable
GO
$850,000,000
$0
0.002%
233
$0
$0
OBLIGATION INDEBTEDNESS $2,970
TOTAL OF ALL OUTSTANDING DIRECT AND
OVERLAPPING BONDED DEBT $8,520,024
TOTAL OF ALL OUTSTANDING AND UNISSUED
DIRECT AND OVERLAPPING INDEBTEDNESS $77,35fi,178
IV. Ratios to 2014 -2015 Assessed Valuntinn
Outstanding Land Secured Bonded Debt" 6.101
Total Outstanding Bonded Debt" 6.10.1
' Preliminary; subject to change.
ru Albert A. Webb Associates is not aware of any additional bonded debt for parcels in CFD No. 2005 -1 for fiscal year 2014 -2015.
(2)Additional bonds will be issued for refunding only. [confirmp'IAII parcels have subdivided into 233 individual parcels for fiscal year
2014 -15.
Source: Albert A. Webb Associates.
Value -To -Lien Ratios. The Authority has obtained the assessed values of all of the
taxable property in CFD No. 2005 -1 (233 parcels in total), as established by the County
Assessor for Fiscal Year 2014 -15, which total is $51,970,691. The direct and overlapping land
secured special tax and assessment bonded indebtedness (excluding general obligation
bonded indebtedness) within CFD No. 2005 -1 as of December 10, 2014 was approximately
$11,356178. The assessed value -to -lien ratio of the property within CFD No. 2005 -1, based on
the Fiscal Year 2014 -15 assessed values, the aggregate principal amount of the CFD No. 2005-
1 Bonds and the estimated direct and overlapping land secured special tax and assessment
bonded indebtedness (excluding general obligation bonded indebtedness) within CFD No.
2005 -1 equals approximately 6.10- to -1.*
Preliminary, subject to change.
A -25
Value -to -lien Ratios by Category. The following table summarizes the assessed
value -to -lien ratios within CFD No. 2005 -1 by value -to -lien category.
TABLE A -27
LAKE ELSINORE PUBLIC FINANCE AUTHORITY
COMMUNITY FACILITIES DISTRICT NO. 2005 -1
DISTRIBUTION OF ASSESSED VALUE -TO- SPECIAL TAX BURDEN RATIOS
* Preliminary; subject to change.
(')Special Tax Burden includes outstanding overlapping land secured debt.
M Fiscal year 2014 -15 assessed value.
(3) Includes an estimated $40,000 in administrative fees.
Source: Albert A. Webb Associates.
A -26
Estimated
Fiscal Year
Total
2015 -16
Assessed Value to
No. of
Percent of
Assessed
Percent
Special Tax
Percent
Special Tax Burden(')*
Parcels
Total
Value(�)
of Total
Levy(3)
of Total
Between 3- 4.99:1
38
16.31%
$7,454,953
14.34%
$125,869
19.31%
Between 5 - 6.99:1
141
60.52
31,596,868
60.80
403,227
61.87
Between 7 - 8.99:1
54
23.18
12,918,870
24.86
122,604
18.81
Total
233
100.00%
$51,970,691
100.00%
$651,700
100.00%
* Preliminary; subject to change.
(')Special Tax Burden includes outstanding overlapping land secured debt.
M Fiscal year 2014 -15 assessed value.
(3) Includes an estimated $40,000 in administrative fees.
Source: Albert A. Webb Associates.
A -26
Historical Assessed Valuation. The following table represents the historical assessed
valuation of the taxable property in CFD No. 2005 -1 as shown on the County Assessor's roll for
fiscal years 2010 -11 through 2014 -15.
TABLE A -28
LAKE ELSINORE PUBLIC FINANCE AUTHORITY
COMMUNITY FACILITIES DISTRICT NO. 2005 -1
ASSESSED VALUATION HISTORY
(FISCAL YEARS 2010 -11 THROUGH 2014 -15)
Source: Albert A. Webb Associates.
Estimated Value -to -Lien Ratios for Top Ten Taxpayers. The following table
summarizes the assessed value -to -lien ratios within CFD No. 2005 -1 for its top ten taxpayers.
TABLE A -29
LAKE ELSINORE PUBLIC FINANCE AUTHORITY
COMMUNITY FACILITIES DISTRICT NO. 2005 -1
ESTIMATED VALUE -TO -LIEN FOR TOP 10 TAXPAYERS
Land Assessed
Structure Assessed
Total Assessed
Fiscal Year
Valuation
Valuation
Valuation
2010 -11
$12,022,540
$27,887,141
$39,909,681
2011 -12
12,811,113
30,510,520
43,321,633
2012 -13
12,651,510
30,128,446
42,779,956
2013 -14
13,163,451
31,564,592
44,728,043
2014 -15
15,335,477
36,635,214
51,970,691
Source: Albert A. Webb Associates.
Estimated Value -to -Lien Ratios for Top Ten Taxpayers. The following table
summarizes the assessed value -to -lien ratios within CFD No. 2005 -1 for its top ten taxpayers.
TABLE A -29
LAKE ELSINORE PUBLIC FINANCE AUTHORITY
COMMUNITY FACILITIES DISTRICT NO. 2005 -1
ESTIMATED VALUE -TO -LIEN FOR TOP 10 TAXPAYERS
Individual Owner
Percent of
$3,195
0.49%
Projected
Projected Total
Fiscal Year
Estimated
Fiscal Year
Fiscal Year
2014 -15
Overlapping Land Value -to-
2015-16 Special
2015 -16 Special
Assessed
Secured Bonded Lien
Tax
Tax
Value
Debt')* Ratio*
Individual Owner
1
$3,195
0.49%
$288,000
$41,749
6.90:1
Individual Owner
1
3,644
0.56
287,000
47,627
6.031
Individual Owner
1
3,195
0.49
283,000
41,750
6.78:1
Individual Owner
1
3,644
0.56
281,000
47,627
5.90:1
Individual Owner
1
3,195
0.49
281,000
41,750
6.73:1
Individual Owner
1
3,195
0.49
279,000
41,750
6.681
Individual Owner
1
3,644
0.56
278,000
47,627
5.84:1
Individual Owner
1
3,195
0.49
278,000
41,750
6.661
Individual Owner
1
3,195
0.49
278,000
41,750
6.66:1
Individual Owner
1
3 195
0.49
278 000
41_,750
6.66:1
Subtotal
10
33,295
5.11
2,811,000
435,132
6.461
All Others
223
618,405
94.89
49,159,691
8,081,922
6.08:1
Totals
233
$651,700
100.00%
$51,970,691
$8,517,054
6.10:1
* Preliminary; subject to change.
Itl Excludes general obligation bonded indebtedness applicable within CFD No. 2005 -1.
Source: Albert A. Webb Associates.
Delinquencies. The following table is a summary of Special Tax levies, collections and
delinquency rates in CFD No. 2005 -1 for Fiscal Years 2010 -11 through the first installment of
Fiscal Year 2014 -15.
A -27
TABLE A -30
LAKE ELSINORE PUBLIC FINANCE AUTHORITY
COMMUNITY FACILITIES DISTRICT NO. 2005 -1
SPECIAL TAX LEVIES, DELINQUENCIES AND DELINQUENCY RATES
FISCAL YEARS 2010 -11 THROUGH 2014 -15
Delinquencies at Fiscal Year End i1l(3)
Fiscal
Amount
Parcels
Parcels
Amount
Percent
Year
Levied
Levied
Delinquent
Delinquent
Delinquent
2010 -11
$645,145
233
5
$12,227
1.90%
2011 -12
670,830
233
8
26,214
3.91
2012 -13
670,832
233
3
4,947
0.74
2013 -14
668,253
233
15
28,068
4.20
2014 -15
689,417
233
N/A
N/A
N/A
Delinquencies as of November 19, 2014 (2)
Parcels
Amount
Percent
Delinquent
Delinquent
Delinquent
0
$0
0.00%
0
0
0.00
1
1,463
0.22
2
3,841
0.57
N/A
N/A
N/A
(1) As of fiscal year end of year levied provided by the continuing disclosure reports as of end of fiscal year levied.
(Z) Delinquency data as of November 19, 2014 provided by the County and Albert A. Webb Associates. Information
for fiscal year 2010 -2011 through fiscal year 2013 -14 provided by the continuing disclosure reports provided as of
June 30 of year levied.
(1) Fiscal year 2014 -15 year end data is not yet available.
Source: The Riverside County Assessor's Office, the City and Albert A. Webb Associates (as noted).
A -28
CFD NO. 2005 -2 AND IMPROVEMENT AREA A
Location and Description. CFD No. 2005 -2 and Improvement Area A therein were
formed by the City in September, 2005 to the acquisition and /or construction of street,
streetscape, and storm drain improvements and park /recreational improvements, City fees, and
fees and improvements of the Elsinore Valley Municipal Water District and improvements of the
California Department of Transportation. Improvement Area A of CFD No. 2005 -2 includes 389
taxable parcels. Improvement Area A of CFD No. 2005 -2 consists of 86% "Developed
"Property." A parcel is 'Developed Property when (i) it is included in a final map that was
recorded prior to January 1 preceding the most recent fiscal year in which the Special Taxes
were levied, and (ii) a building permit for new construction was issued on or before May 1
preceding the most recent fiscal year in which the Special Taxes were levied. 340 completed
single - family detached homes have been conveyed to individual homeowners. For the
complete text of the Rate and Method of CFD No. 2005 -2, see Appendix D — "RATE AND
METHOD OF APPORTIONMENT OF SPECIAL TAXES FOR EACH TAXING JURISDICTION."
Assigned Special Taxes. Table A -31 below sets forth the current Assigned Special
Taxes that may be levied on the property within Improvement Area A of CFD No. 2005 -2 in
fiscal year 2015 -16 based on the development status within Improvement Area A of CFD No.
2005 -2 as of December 16, 2014. The Special Taxes in Improvement Area A of CFD No. 2005-
2 may not be levied after the 2041 -42 fiscal year. The final maturity of the Local Obligations of
Improvement Area A of CFD No. 2005 -2 is September 1, 2036.
TABLE A -31
LAKE ELSINORE PUBLIC FINANCE AUTHORITY
COMMUNITY FACILITIES DISTRICT NO. 2005 -2
IMPROVEMENT AREA A
ASSIGNED SPECIAL TAXES
(') Includes an estimated $55,000 in administrative fees.
Scarce: Albert A. Webb Associates.
For the complete text of the Rate and Method of Improvement Area A of CFD No. 2005-
2, see Appendix D — "RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES FOR
EACH TAXING JURISDICTION."
A -29
Total
Projected
Projected Fiscal
Fiscal Year
Assigned
Year 2015 -16
2015 -16
Tax
Residential Floor
No. of
Special Tax
Special Tax
Special Tax
Percent of
Land Use
Class
Area
Units
Per Unit
Levy per Unit
Levy(')
Total
Single Family Unit
D1
Less than 1,850
14
$3,290
$2,955
$41,375
2.88%
Single Family Unit
D2
1,851 -2,050
36
3,461
3,109
111,921
7.79
Single Family Unit
D3
21051 -2,550
76
3,848
3,457
262,711
18.30
Single Family Unit
D4
2,551 -3,150
205
41031
3,621
742,301
51.70
Single Family Unit
D5
3,151 - 3,650
22
5,115
4,595
101,082
7.04
Single Family Unit
D6
Greater than 3,650
36
5,457
4,902
176,460
12.29
Approved
A
Approved property
53
25,492
0
0
0.00
Apartment Unit
APT1
N/A
0
25,492
0
0
0.00
Non - Residential Unit
NR1
N/A
0
25,4920
0
0.00
(') Includes an estimated $55,000 in administrative fees.
Scarce: Albert A. Webb Associates.
For the complete text of the Rate and Method of Improvement Area A of CFD No. 2005-
2, see Appendix D — "RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES FOR
EACH TAXING JURISDICTION."
A -29
Estimated Direct and Overlapping Indebtedness. Within the boundaries of
Improvement Area A of CFD No. 2005 -2 are numerous overlapping local agencies providing
public services. The approximate amount of the direct and overlapping debt secured by a tax or
assessment on the parcels within Improvement Area A of CFD No. 2005 -2 for Fiscal Year 2015-
16 is shown in Table A -32 below.
A -30
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Value -To -Lien Ratios. The Authority has obtained the assessed values of all of the
taxable property in Improvement Area A of CFD No. 2005 -2 (442 parcels in total), as
established by the County Assessor for Fiscal Year 2014 -15, which total is $102,100,614. The
direct and overlapping land secured special tax and assessment bonded indebtedness
(excluding general obligation bonded indebtedness) within Improvement Area A of CFD
No. 2005 -2 as of December 10, 2014 was approximately $24,569,544. The assessed value -to-
lien ratio of the property within Improvement Area A of CFD No. 2005 -2, based on the Fiscal
Year 2014 -15 assessed values, the aggregate principal amount of the CFD No. 2005 -2 Bonds
and the estimated direct and overlapping land secured special tax and assessment bonded
indebtedness (excluding general obligation bonded indebtedness) within Improvement Area A of
CFD No. 2005 -2 equals approximately 4.16- to -1.*
Value -to -lien Ratios by Category. The following table summarizes the assessed
value -to -lien ratios within Improvement Area A of CFD No. 2005 -2 by value -to -lien category.
TABLE A -33
LAKE ELSINORE PUBLIC FINANCE AUTHORITY
COMMUNITY FACILITIES DISTRICT NO. 2005 -2
IMPROVEMENT AREA A
DISTRIBUTION OF ASSESSED VALUE -TO- SPECIAL TAX BURDEN RATIOS
* Preliminary; subject to change.
(u Special Tax Burden includes outstanding overlapping land secured debt.
(2) Fiscal year 2014 -15 assessed value.
(3) Includes an estimated $55,000 in administrative fees.
141 Includes 12 developer -owned parcels with assessed values of $51,030 per parcel.
Source: Albert A. Webb Associates.
Preliminary, subject to change.
NW
Estimated
Total
Fiscal Year
Assessed Value to
No. of
Percent of
Assessed
Percent of
2015 -16 Special
Percent of
Special Tax Burdentll*
Parcels
Total
Value(2)
Total
Tax Levy(3)
Total
Less than 1(4)
12
3.08%
$612,360
0.60%
$47,130
3.28%
Between 1 - 2.99:1
29
7.46
3,294,770
3.23
104,055
7.25
Between 3 - 4.99:1
249
64.01
66,769,022
65.40
936,474
65.22
Between 5- 6.99:1
99
25.45
31,424,462
30.78
348,191
24.25
Total
389
100.00%
$102,100,614
100.00%
$1,435,850
100.00%
* Preliminary; subject to change.
(u Special Tax Burden includes outstanding overlapping land secured debt.
(2) Fiscal year 2014 -15 assessed value.
(3) Includes an estimated $55,000 in administrative fees.
141 Includes 12 developer -owned parcels with assessed values of $51,030 per parcel.
Source: Albert A. Webb Associates.
Preliminary, subject to change.
NW
Historical Assessed Valuation. The following table represents the historical assessed
valuation of the taxable property in Improvement Area A of CFD No. 2005 -2 as shown on the
County Assessor's roll for fiscal years 2010 -11 through 2014 -15.
TABLE A -34
LAKE ELSINORE PUBLIC FINANCE AUTHORITY
COMMUNITY FACILITIES DISTRICT NO. 2005 -2
IMPROVEMENT AREA A
ASSESSED VALUATION HISTORY
(FISCAL YEARS 2010 -11 THROUGH 2014 -15)
Source: Albert A. Webb Associates.
Estimated Value -to -Lien Ratios for Top Ten Taxpayers. The following table
summarizes the assessed value -to -lien ratios within Improvement Area A of CFD No. 2005 -2 for
its top ten taxpayers.
TABLE A -35
LAKE ELSINORE PUBLIC FINANCE AUTHORITY
COMMUNITY FACILITIES DISTRICT NO. 2005 -2
IMPROVEMENT AREA A
ESTIMATED VALUE -TO -LIEN FOR TOP 10 TAXPAYERS
Land Assessed
Structure Assessed
Total Assessed
Fiscal Year
Valuation
Valuation
Valuation
2010 -11
$16,179,423
$45,424,031
$61,603,454
2011 -12
21,588,464
46,908,629
68,497,093
2012 -13
23,142,438
47,491,456
70,633,894
2013 -14
24,417,861
57,784,979
82,202,840
2014 -15
27,749,771
74,350,843
102,100,614
Source: Albert A. Webb Associates.
Estimated Value -to -Lien Ratios for Top Ten Taxpayers. The following table
summarizes the assessed value -to -lien ratios within Improvement Area A of CFD No. 2005 -2 for
its top ten taxpayers.
TABLE A -35
LAKE ELSINORE PUBLIC FINANCE AUTHORITY
COMMUNITY FACILITIES DISTRICT NO. 2005 -2
IMPROVEMENT AREA A
ESTIMATED VALUE -TO -LIEN FOR TOP 10 TAXPAYERS
KYLANU HUMES OF CALIF INC
Percent of
$134,657
9.38%
$5,533,727
Projected
2.40:1
Estimated
Projected
Total
3.02
Overlapping
Fiscal
Fiscal Year
Fiscal Year
Land
Year 2015-
2015 -16
2014 -15
Secured Value -
16 Special
Special
Assessed
Bonded to -Lien
Parcels Tax
Tax
Value
Debt(')* Ratio*
KYLANU HUMES OF CALIF INC
36
$134,657
9.38%
$5,533,727
$2,303,630
2.40:1
KB HOME COASTAL INC
13
43,384
3.02
953,485
742,190
1.28:1
BANYAS MICHAEL
2
7,078
0.49
516,333
121,081
4.26:1
LUNA EDMO L
2
71078
0.49
532,943
121,081
4.40:1
THR CALIF
2
6,576
0.46
450,031
112,505
4,00:1
INDIVIDUAL OWNER
1
3,457
0.24
205,929
59,136
3.48:1
INDIVIDUAL OWNER
1
3,109
0.22
272,000
53,185
5.11:1
INDIVIDUAL OWNER
1
3,621
0.25
311,980
61,946
5.04:1
INDIVIDUAL OWNER
1
3,621
0.25
240,788
61,946
3.89:1
INDIVIDUAL OWNER
1
3 621
0.25
352.500
61 946
5.69:1
Subtotal
60
216,201
15.06
9,369,716
3,698,645
2.53:1
All Others
329
1,219,649
84.94
92,730,875
20,865,065
4.441
Totals
389
$1,435,850
100.00%
$102,100,591
$24,563,710
4.16:1
* Preliminary; subject to change.
n1 Excludes general obligation bonded indebtedness applicable within Improvement Area A of CFD No. 2005 -2,
Source: Albert A. Webb Associates.
A -33
[Describe Ryland development status]
Delinquencies. The following table is a summary of Special Tax levies, collections and
delinquency rates in Improvement Area A of CFD No. 2005 -2 for Fiscal Years 2010 -11 through
the first installment of Fiscal Year 2014 -15.
TABLE A -36
LAKE ELSINORE PUBLIC FINANCE AUTHORITY
COMMUNITY FACILITIES DISTRICT NO. 2005 -2
IMPROVEMENT AREA A
SPECIAL TAX LEVIES, DELINQUENCIES AND DELINQUENCY RATES
FISCAL YEARS 2010 -11 THROUGH 2014 -15
Fiscal Amount
Year Levied
2010 -11 $1,629,057
2011 -12 1,659,130
2012 -13 1,695,398
2013 -14 1,655,268
2014 -15 1,707,591
Delinquencies at Fiscal Year End (1)(3)
Parcels Parcels Amount Percent
Levied Delinquent Delinquent Delinquent
427 3 $15,753 0.97%
427 9 39,367 2.37
427 17 123,208 7.27
442 14 38,529 2.33
442 N/A N/A N/A
Delinquencies as of November 19, 2014 (2)
Parcels
Amount
Percent
Delinquent
Delinquent
Delinquent
0
$0
0.00%
0
0
0.00
4
12,739
0.75
3
12,994
0.79
N/A
N/A
N/A
(1) As of fiscal year end of year levied provided by the continuing disclosure reports.
(2) Delinquency data as of November 19, 2014 provided by the County and Albert A. Webb Associates. Information
for fiscal year 2010 -2011 through fiscal year 2013 -14 provided by the continuing disclosure reports provided as of
June 30 of year levied.
(3) Fiscal year 2014 -15 data is not yet available.
Source: The Riverside County Assessor's Office; the City and Albert A. Webb Associates (as noted).
will
CFD NO. 2005 -6
Location and Description. CFD No. 2005 -6 was formed by the City in September,
2005 to finance the acquisition and construction of public streets, streetscape, park and
recreation facilities, storm drain, fire station, and other city facilities, including City fees and
water and sewer facilities and fees of the Elsinore Valley Municipal Water District. CFD
No. 2005 -6 includes 144 taxable parcels. CFD No. 2005 -6 is 100% "Developed Property." A
parcel is "Developed Property" when (i) it is included in a final map that was recorded prior to
January 1 preceding the most recent fiscal year in which the Special Taxes were levied, and (ii)
a building permit for new construction was issued on or before May 1 preceding the most recent
fiscal year in which the Special Taxes were levied. 144 completed single - family detached
homes have been conveyed to individual homeowners. For the complete text of the Rate and
Method of CFD No. 2005 -6, see Appendix D — "RATE AND METHOD OF APPORTIONMENT
OF SPECIAL TAXES FOR EACH TAXING JURISDICTION."
Assigned Special Taxes. Table A -37 below sets forth the current Assigned Special
Taxes that may be levied on the property within CFD No. 2005 -6 in fiscal year 2015 -16 based
on the development status within CFD No. 2005 -6 as of December 16, 2014. The Special
Taxes in CFD No. 2005 -6 may not be levied after the 2042 -43 fiscal year. The final maturity of
the Local Obligations of CFD No. 2005 -6 is September 1, 2036.
TABLE A -37
LAKE ELSINORE PUBLIC FINANCE AUTHORITY
COMMUNITY FACILITIES DISTRICT NO. 2005 -6
ASSIGNED SPECIAL TAXES
I'I Includes an estimated $35,000 in administrative fees.
Source: Albert A. Webb Associates.
For the complete text of the Rate and Method of CFD No. 2005 -6, see Appendix D —
"RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES FOR EACH TAXING
JURISDICTION."
Estimated Direct and Overlapping Indebtedness. Within the boundaries of CFD
No. 2005 -6 are numerous overlapping local agencies providing public services. The
approximate amount of the direct and overlapping debt secured by a tax or assessment on the
parcels within CFD No. 2005 -6 for Fiscal Year 2014 -15 is shown in Table A -38 below.
A -35
Total
Projected
Projected
Fiscal
Fiscal
Year
Year
Assigned
2015 -16
2015 -16
Special
Special
Special
Residential Floor
No. of
Tax Per
Tax Levy
Tax
Percent
Land Use _
Tax Class
Area
Uni
f Total
Single Family Unit
D1
Less than 1,000
0
$1,441
$0
$0
0.00%
Single Family Unit
D2
1,000- 1,199
48
1,625
1,334
64,047
27.98
Single Family Unit
D3
1,200 - 1,399
48
2,025
1,663
79,807
34.87
Single Family Unit
D4
1,400 - 1,499
48
2,158
11772
85,045
37.15
Single Family Unit
D5
Greater than 1,449
0
2,242
0
0
0.00
Apartment Unit
APT
N/A
0
23,529
0
0
0.00
Non - Residential Unit
NR1
N/A
0
23,529
0
0
0.00
Totals
144
$228,900
100.00%
I'I Includes an estimated $35,000 in administrative fees.
Source: Albert A. Webb Associates.
For the complete text of the Rate and Method of CFD No. 2005 -6, see Appendix D —
"RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES FOR EACH TAXING
JURISDICTION."
Estimated Direct and Overlapping Indebtedness. Within the boundaries of CFD
No. 2005 -6 are numerous overlapping local agencies providing public services. The
approximate amount of the direct and overlapping debt secured by a tax or assessment on the
parcels within CFD No. 2005 -6 for Fiscal Year 2014 -15 is shown in Table A -38 below.
A -35
A -36
OBLIGATION INDEBTEDNESS $1,075
TOTAL OF ALL OUTSTANDING DIRECT AND
OVERLAPPING BONDED DEBT $3,076,075
TOTAL OF ALL OUTSTANDING AND UNISSUED
DIRECT AND OVERLAPPING INDEBTEDNESS $3 076 075
IV. Ratios to 2014 -2015 Assessed Valuation
Outstanding Land Secured Bonded Debt'
Total Outstanding Bonded Debt`
6.12'.1
6.121
` Preliminary; subject to change.
m Albert A. Webb Associates is not aware of any additional bonded debt for parcels in CFD No. 2005 -6 for Fiscal Year 2014 -15.
(')Additional bonds will be issued for refunding only. [confirm]
NAZI parcels have subdivided into 144 individual parcels for fiscal year 2014 -15.
Source. Albert A. Webb Associates.
Value -To -Lien Ratios. The Authority has obtained the assessed values of all of the
taxable property in CFD No. 2005 -6 (144 parcels in total), as established by the County
Assessor for Fiscal Year 2014 -15, which total is $18,813,823. The direct and overlapping land
secured special tax and assessment bonded indebtedness (excluding general obligation
bonded indebtedness) within CFD No. 2005 -6 as of December 10, 2014 was approximately
$3,076,075. The assessed value -to -lien ratio of the property within CFD No. 2005 -6, based on
the Fiscal Year 2014 -15 assessed values, the aggregate principal amount of the CFD No. 2005-
6 Bonds and the estimated direct and overlapping land secured special tax and assessment
bonded indebtedness (excluding general obligation bonded indebtedness) within CFD
No. 2005 -6 equals approximately 6.12- to -1.`
Preliminary, subject to change.
A -37
TABLE A -38
LAKE ELSINORE PUBLIC FINANCE AUTHORITY
COMMUNITY FACILITIES DISTRICT NO. 2005 -6
DIRECT AND OVERLAPPING DEBT
AS OF DECEMBER 10, 2014
I. Assessed Value
$18,813,823
2014 -2015 Equalized Roll Assessed Valuation
Il. Land Secured Bond Indebtedness
Outstanding Direct and
Parcels in
Amount
Overlapping Bonded Debt
Type Issued Outstanding
%Applicable
CFD 2005 -6(3)
Applicable
CFD 2005 -6 CITY CENTER TOWNHOMES
CFD $3,525,000 $3,075,000
100%
144
$3,075,000
TOTAL LAND SECURED BONDED DEBT(')
—$3,075,000
Authorized but Unissued Direct and
Parcels in
Amount
Amount
Overlapping Indebtedness
Type Authorized Unissued
%Applicable
CFD 2005 -6(')
Applicable
CFD 2005 -6 CITY CENTER TOWNHOMES
CFD $5,000,000 $0 Q)
100%
144
$0
TOTAL UNISSUED LAND SECURED INDEBTEDNESS M
$0
TOTAL OUTSTANDING AND UNISSUED LAND
SECURED INDEBTEDNESS
$3,075,000
III. General Obligation Bond Indebtedness
Outstanding Direct and
Parcels in
Amount
Overlapping Bonded Debt
Tvpe Issued Outstanding
%Applicable
CFD 200543)
Applicable
METROPOLITAN WATER DEBT SERVICE
GO $850,000,000 $132,275,000
0.001%
144
$1,075
TOTAL GENERAL OBLIGATION BONDED DEBT (1)
$1,075
Authorized but Unissued Direct and
Parcels in
Amount
Overlapping Indebtedness
Tvpe Authorized Unissued
%Applicable
CFD 2005 -60)
Applicable
METROPOLITAN WATER DEBT SERVICE
GO $850,000,000 $0
0.001%
144
$0
TOTAL UNISSUED GENERAL OBLIGATION
INDEBTEDNESS(')
$0
TOTAL OUTSTANDING AND UNISSUED GENERAL
OBLIGATION INDEBTEDNESS $1,075
TOTAL OF ALL OUTSTANDING DIRECT AND
OVERLAPPING BONDED DEBT $3,076,075
TOTAL OF ALL OUTSTANDING AND UNISSUED
DIRECT AND OVERLAPPING INDEBTEDNESS $3 076 075
IV. Ratios to 2014 -2015 Assessed Valuation
Outstanding Land Secured Bonded Debt'
Total Outstanding Bonded Debt`
6.12'.1
6.121
` Preliminary; subject to change.
m Albert A. Webb Associates is not aware of any additional bonded debt for parcels in CFD No. 2005 -6 for Fiscal Year 2014 -15.
(')Additional bonds will be issued for refunding only. [confirm]
NAZI parcels have subdivided into 144 individual parcels for fiscal year 2014 -15.
Source. Albert A. Webb Associates.
Value -To -Lien Ratios. The Authority has obtained the assessed values of all of the
taxable property in CFD No. 2005 -6 (144 parcels in total), as established by the County
Assessor for Fiscal Year 2014 -15, which total is $18,813,823. The direct and overlapping land
secured special tax and assessment bonded indebtedness (excluding general obligation
bonded indebtedness) within CFD No. 2005 -6 as of December 10, 2014 was approximately
$3,076,075. The assessed value -to -lien ratio of the property within CFD No. 2005 -6, based on
the Fiscal Year 2014 -15 assessed values, the aggregate principal amount of the CFD No. 2005-
6 Bonds and the estimated direct and overlapping land secured special tax and assessment
bonded indebtedness (excluding general obligation bonded indebtedness) within CFD
No. 2005 -6 equals approximately 6.12- to -1.`
Preliminary, subject to change.
A -37
Value -to -lien Ratios by Category. The following table summarizes the assessed
value -to -lien ratios within CFD No. 2005 -6 by value -to -lien category.
TABLE A -39
LAKE ELSINORE PUBLIC FINANCE AUTHORITY
COMMUNITY FACILITIES DISTRICT NO. 2005 -6
DISTRIBUTION OF ASSESSED VALUE -TO- SPECIAL TAX BURDEN RATIOS
* Preliminary; subject to change.
(')Special Tax Burden includes outstanding overlapping land secured debt.
(2) Fiscal year 2014 -15 assessed value.
(3) Includes an estimated $35,000 in administrative fees.
Source: Albert A. Webb Associates,
Historical Assessed Valuation. The following table represents the historical assessed
valuation of the taxable property in CFD No. 2005 -6 as shown on the County Assessor's roll for
fiscal years 2010 -11 through 2014 -15.
TABLE A -40
LAKE ELSINORE PUBLIC FINANCE AUTHORITY
COMMUNITY FACILITIES DISTRICT NO. 2005 -6
ASSESSED VALUATION HISTORY
(FISCAL YEARS 2010 -11 THROUGH 2014 -15)
Land Assessed
Structure Assessed
Total Assessed
Fiscal Year
Estimated Fiscal
Valuation
Assessed Value to
2010 -11
$4,651,310
Total
$16,521,691
Year 2015 -16
51177,733
Special Tax
No. of
Percent of
Assessed
Percent of
Special Tax
Percent of
Burden *I'I
Parcels
Total
Value(2)
Total
Levyl3l
Total
Between 4 - 5.99:1
83
57.64%
$9,964,424
52.96%
$134,925
58.95%
Between 6 - 7.99:1
61
42.36
8,849,399
47.04
93,975
41.05
Total
144
100.00%
$18,813,823
100.00%
$228,900
100.00%
* Preliminary; subject to change.
(')Special Tax Burden includes outstanding overlapping land secured debt.
(2) Fiscal year 2014 -15 assessed value.
(3) Includes an estimated $35,000 in administrative fees.
Source: Albert A. Webb Associates,
Historical Assessed Valuation. The following table represents the historical assessed
valuation of the taxable property in CFD No. 2005 -6 as shown on the County Assessor's roll for
fiscal years 2010 -11 through 2014 -15.
TABLE A -40
LAKE ELSINORE PUBLIC FINANCE AUTHORITY
COMMUNITY FACILITIES DISTRICT NO. 2005 -6
ASSESSED VALUATION HISTORY
(FISCAL YEARS 2010 -11 THROUGH 2014 -15)
Source: Albert A. Webb Associates.
WWI
Land Assessed
Structure Assessed
Total Assessed
Fiscal Year
Valuation
Valuation
Valuation
2010 -11
$4,651,310
$11,870,381
$16,521,691
2011 -12
51177,733
11,574,409
16,752,142
2012 -13
5,257,339
11,183,761
16,441,100
2013 -14
5,523,563
11,882,115
17,405,678
2014 -15
5,818,417
12,995,406
18,813,823
Source: Albert A. Webb Associates.
WWI
Estimated Value -to -Lien Ratios for Top Ten Taxpayers. The following table
summarizes the assessed value -to -lien ratios within CFD No. 2005 -6 for its top ten taxpayers.
TABLE A -41
LAKE ELSINORE PUBLIC FINANCE AUTHORITY
COMMUNITY FACILITIES DISTRICT NO. 2005 -6
ESTIMATED VALUE -TO -LIEN FOR TOP 10 TAXPAYERS
monvidual owner
$1,772
0.77%
Overlapping
$23,802
Percent of
1
Land Secured
1,772
Projected
182,000
Bond Debt
Projected
Total Fiscal
Fiscal Year
Estimated
Fiscal Year
Year 2015-
2014 -15
CFD No. Value -
2015-16
16 Special
Assessed
2006.6 to -Lien
Special Tax
Tax
Value
Debt(')* Ratio*
monvidual owner
$1,772
0.77%
$182,000
$23,802
7.65:1
1
Individual Owner
1,772
0.77
182,000
23,802
7.65:1
1
Individual Owner
1,772
0.77
182,000
23,802
7.65:1
1
Individual Owner
1,772
0.77
182,000
23,802
7.65:1
1
Individual Owner
1,772
0.77
182,000
23,802
7.65:1
1
Individual Owner
1,772
0.77
182,000
23,802
7.65:1
1
Individual Owner
1,772
0.77
182,000
23,802
7.65:1
1
Individual Owner
1,772
0.77
182,000
23,802
7.65:1
1
Individual Owner
1,772
0.77
178,578
23,802
7.50:1
1
Individual Owner
1 772
0.77
178,578
23 802
7.50:1
1
Subtotal
17,718
7.74
1,813,156
238,016
7.62:1
10
All Others
211,182
92.26
17,000,667
2,836,984
5.991
134
Totals
$228,900
100.00%
$18,813,823
$3,075,000
6.12:1
144
* Preliminary; subject to change.
Ili Excludes General Obligation Bonded indebtedness applicable within CFD No. 2005 -6.
Source: Albert A. Webb Associates.
F-AWOJ
Delinquencies. The following table is a summary of Special Tax levies, collections and
delinquency rates in CFD No. 2005 -6 for Fiscal Years 2010 -11 through the first installment of
Fiscal Year 2014 -15.
TABLE A -42
LAKE ELSINORE PUBLIC FINANCE AUTHORITY
COMMUNITY FACILITIES DISTRICT NO. 2005 -6
SPECIAL TAX LEVIES, DELINQUENCIES AND DELINQUENCY RATES
FISCAL YEARS 2010 -11 THROUGH 2014 -15
Delinquencies as of November 19, 2014 (2)
Parcels
Amount
Percent
Delinquencies at Fiscal Year End (1)t91
Fiscal
Amount
Parcels
Parcels
Amount
Percent
Year
Levied
Levied
Delinquent
Delinquent
Delinquent
2010 -11
$254,346
144
4
$6,141
2.41%
2011 -12
259,539
144
5
10,373
4.00
2012 -13
262,668
144
2
10,320
3.93
2013 -14
257,706
144
7
9,618
373
2014 -15
261.518
144
N/A
N/A
N/A
Delinquencies as of November 19, 2014 (2)
Parcels
Amount
Percent
Delinquent
Delinquent
Delinquent
0
$0
0.00%
0
0
0,00
0
0
0.00
4
6,613
2.57
N/A
N/A
N/A
(1) As of fiscal year end of year levied provided by the continuing disclosure reports.
czr Delinquency data as of November 19, 2014 provided by the County and Albert A. Webb Associates. Information
for fiscal year 2010 -2011 through fiscal year 2013 -14 provided by the continuing disclosure reports provided as of
June 30 of year levied.
(3) Fiscal year 2014 -15 fiscal year end data is not yet available.
Source: The Riverside County Assessor's Office; the City and Albert A. Webb Associates (as noted).
A -40
CFD NO. 2006 -2
Location and Description. CFD No. 2006 -2 was formed by the City in April, 2006 to
finance the acquisition and construction of street, streetscape, and flood control improvements,
City fees, and fees and improvements of the Elsinore Valley Municipal Water District. CFD
No. 2006 -2 includes 168 taxable parcels. CFD No. 2006 -2 consists of 100% "Developed
Property." A parcel is "Developed Property" when, exclusive of taxable public property and
taxable property owner association property for which the final subdivision was recorded on or
before January 1 of the prior fiscal year, a building permit for new construction was issued on or
before May 1 of the fiscal year preceding the fiscal year for which the Special Tax was most
recently levied. 155 completed single - family detached homes have been conveyed to individual
homeowners. For the complete text of the Rate and Method of CFD No. 2006 -2, see
Appendix D — 'RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES FOR
EACH TAXING JURISDICTION."
Assigned Special Taxes. Table A -43 below sets forth the current Assigned Special
Taxes that may be levied on the property within CFD No. 2006 -2 in fiscal year 2015 -16 based
on the development status within CFD No. 2006 -2 as of December 16, 2014. The Special
Taxes in CFD No. 2006 -2 may not be levied after the 2045 -46 fiscal year. The final maturity of
the Local Obligations of Improvement Area B of CFD No. 2003 -2 is September 1, 2036.
TABLE A -43
LAKE ELSINORE PUBLIC FINANCE AUTHORITY
COMMUNITY FACILITIES DISTRICT NO. 2006 -2
ASSIGNED SPECIAL TAXES
(1) Includes an estimated $35,000 in administrative fees.
Source: Albert A. Webb Associates.
For the complete text of the Rate and Method of CFD No. 2006 -2, see Appendix D —
"RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES FOR EACH TAXING
JURISDICTION."
Estimated Direct and Overlapping Indebtedness. Within the boundaries of CFD
No. 2006 -2 are numerous overlapping local agencies providing public services. The
approximate amount of the direct and overlapping debt secured by a tax or assessment on the
parcels within CFD No. 2006 -2 for Fiscal Year 2014 -15 is shown in Table A -44 below.
A -41
Projected
Fiscal
Total
Year
Projected
Assigned
2015 -16
Fiscal Year
Special
Special
2015 -16
Tax
Residential Floor
No. of
Tax Per
Tax Levy
Special Tax
Percent
Land Use
Class
Area
Units
Unit
per Unit
Levy0)
of Total
Single Family Unit
D1
Less than 1,550
26
$2,923
$2,393
$62,216
13.76°/
Single Family Unit
D2
1,550 - 1,949
35
3,141
2,572
90,004
19.90
Single Family Unit
D3
1,950 - 2,349
53
3,305
2,705
143,379
31.70
Single Family Unit
D4
Greater than 2,349
54
3,545
2,902
156,700
34.65
Non - Residential Unit
NR1
N/A
0
35,424
0
0
0.00
(1) Includes an estimated $35,000 in administrative fees.
Source: Albert A. Webb Associates.
For the complete text of the Rate and Method of CFD No. 2006 -2, see Appendix D —
"RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES FOR EACH TAXING
JURISDICTION."
Estimated Direct and Overlapping Indebtedness. Within the boundaries of CFD
No. 2006 -2 are numerous overlapping local agencies providing public services. The
approximate amount of the direct and overlapping debt secured by a tax or assessment on the
parcels within CFD No. 2006 -2 for Fiscal Year 2014 -15 is shown in Table A -44 below.
A -41
TOTAL OUTSTANDING AND UNISSUED
GENERAL OBLIGATION INDEBTEDNESS $1,834
TOTAL OF ALL OUTSTANDING DIRECT AND
OVERLAPPING BONDED DEBT $6,681,666
TOTAL OF ALL OUTSTANDING AND
UNISSUED DIRECT AND OVERLAPPING
INDEBTEDNESS $6,688,142
IV. Ratios to 2014 -2015 Assessed
Valuation
Outstanding Land Secured Bonded Debt* 4.81:1
Total Outstanding Bonded Debt* 4.81:1
* Preliminary; subject to change.
(')Albert A. Webb Associates is not aware of any additional bonded debt for parcels in CFD No. 2006 -2 for fiscal year 2014 -2015.
'')Additmnal bonds will be issued for refunding only. [confirm]
l'iAll parcels have subdivided into 168 individual parcels for fiscal year 2014 -15.
Source: Albert A. Webb Associates.
Value -To -Lien Ratios. The Authority has obtained the assessed values of all of the
taxable property in CFD No. 2006 -2 (168 parcels in total), as established by the County
Assessor for Fiscal Year 2014 -15, which total is $32,097,689. The direct and overlapping land
secured special tax and assessment bonded indebtedness (excluding general obligation
bonded indebtedness) within CFD No. 2006 -2 as of December 10, 2014 was approximately
$6,688,142. The assessed value -to -lien ratio of the property within CFD No. 2006 -2, based on
the Fiscal Year 2014 -15 assessed values, the aggregate principal amount of the CFD No. 2006-
2 Bonds and the estimated direct and overlapping land secured special tax and assessment
MEN
TABLE A -44
LAKE ELSINORE PUBLIC FINANCE AUTHORITY
COMMUNITY FACILITIES DISTRICT NO. 2006 -2
DIRECT AND OVERLAPPING DEBT
AS OF DECEMBER 10, 2014
I. Assessed Value
$32,097,689
2014 -2015 Equalized Roll Assessed
Valuation
II. Land Secured Bond Indebtedness
Outstanding Direct and
Parcels in
Amount
Overlapping Bonded Debt
Type Issued Outstanding
% Applicable
CFD 2006 -20'
Applicable
RIVERSIDE COUNTY FLOOD CONTROL
BENEFIT ASSESSMENT ZONE NO. 3
AD $5,715,000 $1,705,000
0%
155
$4,832
CFD 2006 -2 VISCAYA
CFD 7,290,000 6,675,000
100
168
6,675,000
TOTAL LAND SECURED BONDED DEBTO"
$6,679,832
Authorized but Unissued Direct and
Parcels in
Amount
Overlapping Indebtedness
Type Authorized Unissued
% Applicable
CFD 2006 -2 0I
Applicable
RIVERSIDE COUNTY FLOOD CONTROL
BENEFIT ASSESSMENT ZONE NO. 3
AD $8,000,000 $2,285,000
0%
155
$6,476
CFD 2006 -2 VISCAYA
CFD 7,500,000 0 (2)
100
168
0
TOTAL UNISSUED LAND SECURED
INDEBTEDNESS O)
$6,476
TOTAL OUTSTANDING AND UNISSUED
LAND SECURED INDEBTEDNESS
$6,686,308
III. General Obligation Bond Indebtedness
Outstanding Direct and
Parcels in
Amount
Overlapping Bonded Debt
Type Issued Outstanding
% Applicable
CFD 2006 -20l
Applicable
METROPOLITAN WATER DEBT SERVICE
GO $850,000,000 $132,275,000
0.001%
168
$1,834
TOTAL GENERAL OBLIGATION BONDED
DEBT
$1,834
Authorized but Unissued Direct and
Parcels in
Amount
Overlapping Indebtedness
Two Authorized Unissued
% Applicable
CFD 2006 -2'I
Applicable
METROPOLITAN WATER DEBT SERVICE
GO $850,000,000 $0
0.001%
168
$0
TOTAL UNISSUED GENERAL OBLIGATION
INDEBTEDNESS("
$0
TOTAL OUTSTANDING AND UNISSUED
GENERAL OBLIGATION INDEBTEDNESS $1,834
TOTAL OF ALL OUTSTANDING DIRECT AND
OVERLAPPING BONDED DEBT $6,681,666
TOTAL OF ALL OUTSTANDING AND
UNISSUED DIRECT AND OVERLAPPING
INDEBTEDNESS $6,688,142
IV. Ratios to 2014 -2015 Assessed
Valuation
Outstanding Land Secured Bonded Debt* 4.81:1
Total Outstanding Bonded Debt* 4.81:1
* Preliminary; subject to change.
(')Albert A. Webb Associates is not aware of any additional bonded debt for parcels in CFD No. 2006 -2 for fiscal year 2014 -2015.
'')Additmnal bonds will be issued for refunding only. [confirm]
l'iAll parcels have subdivided into 168 individual parcels for fiscal year 2014 -15.
Source: Albert A. Webb Associates.
Value -To -Lien Ratios. The Authority has obtained the assessed values of all of the
taxable property in CFD No. 2006 -2 (168 parcels in total), as established by the County
Assessor for Fiscal Year 2014 -15, which total is $32,097,689. The direct and overlapping land
secured special tax and assessment bonded indebtedness (excluding general obligation
bonded indebtedness) within CFD No. 2006 -2 as of December 10, 2014 was approximately
$6,688,142. The assessed value -to -lien ratio of the property within CFD No. 2006 -2, based on
the Fiscal Year 2014 -15 assessed values, the aggregate principal amount of the CFD No. 2006-
2 Bonds and the estimated direct and overlapping land secured special tax and assessment
MEN
bonded indebtedness (excluding general obligation bonded indebtedness) within CFD
No. 2006 -2 equals approximately 4.81- to -1.*
Value -to -lien Ratios by Category. The following table summarizes the assessed
value -to -lien ratios within CFD No. 2006 -2 by value -to -lien category.
TABLE A -45
LAKE ELSINORE PUBLIC FINANCE AUTHORITY
COMMUNITY FACILITIES DISTRICT NO. 2006 -2
DISTRIBUTION OF FISCAL YEAR 2015 -16
ASSESSED VALUE -TO- SPECIAL TAX BURDEN RATIOS
" Preliminary; subject to change.
OISpecial Tax Burden includes outstanding overlapping land secured debt.
(2) Fiscal year 2014 -15 assessed value.
131 Includes an estimated $35,000 in administrative fees.
141 Includes 13 developer -owned parcels with assessed values ranging from $31,931 to $32,730.
Source: Albert A. Webb Associates.
Historical Assessed Valuation. The following table represents the historical assessed
valuation of the taxable property in CFD No. 2006 -2 as shown on the County Assessor's roll for
fiscal years 2010 -11 through 2014 -15.
TABLE A -46
LAKE ELSINORE PUBLIC FINANCE AUTHORITY
COMMUNITY FACILITIES DISTRICT NO. 2006 -2
ASSESSED VALUATION HISTORY
(FISCAL YEARS 2010 -11 THROUGH 2014 -15)
Land Assessed
Structure Assessed
Total Assessed
Fiscal Year
Estimated Fiscal
Valuation
Assessed Value
2010 -11
$8,450,189
Total
$26,282,867
Year 2015 -16
9,402,178
to Special Tax
No. of
Percent of
Assessed
Percent of
Special Tax
Percent of
— Burden(')*
Parcels
Total
Valuelzl
Total
Levy(3)
Total
Less than 1:1141
13
7.74%
$421,495
1.31%
$34,420
7.61%
Between 1 - 2.99:1
0
0.00
0
0.00
0
0.00
Between 3- 4.99:1
80
47.62
14,345,722
44.69
215,404
47.62
Between 5 - 6.99:1
_ 75
44.64
17,330,472
53.99
202,476
44.77
Total
168
100.00%
$32,097,689
100.00%
$452,300
100.00%
" Preliminary; subject to change.
OISpecial Tax Burden includes outstanding overlapping land secured debt.
(2) Fiscal year 2014 -15 assessed value.
131 Includes an estimated $35,000 in administrative fees.
141 Includes 13 developer -owned parcels with assessed values ranging from $31,931 to $32,730.
Source: Albert A. Webb Associates.
Historical Assessed Valuation. The following table represents the historical assessed
valuation of the taxable property in CFD No. 2006 -2 as shown on the County Assessor's roll for
fiscal years 2010 -11 through 2014 -15.
TABLE A -46
LAKE ELSINORE PUBLIC FINANCE AUTHORITY
COMMUNITY FACILITIES DISTRICT NO. 2006 -2
ASSESSED VALUATION HISTORY
(FISCAL YEARS 2010 -11 THROUGH 2014 -15)
Source: Albert A. Webb Associates.
Preliminary, subject to change.
A -43
Land Assessed
Structure Assessed
Total Assessed
Fiscal Year
Valuation
Valuation
Valuation
2010 -11
$8,450,189
$17,832,678
$26,282,867
2011 -12
9,402,178
17,945,087
27,347,265
2012 -13
91783,027
17,634,870
27,417,897
2013 -14
10,429,715
18,528,500
28,958,215
2014 -15
11,355,508
20,742,181
32,097,689
Source: Albert A. Webb Associates.
Preliminary, subject to change.
A -43
Estimated Value -to -Lien Ratios for Top Ten Taxpayers. The following table
summarizes the assessed value -to -lien ratios within CFD No. 2006 -2 for its top ten taxpayers.
TABLE A -47
LAKE ELSINORE PUBLIC FINANCE AUTHORITY
COMMUNITY FACILITIES DISTRICT NO. 2006 -2
ESTIMATED VALUE -TO -LIEN FOR TOP 10 TAXPAYERS
* Preliminary; subject to change.
M Excludes general obligation bonded indebtedness applicable within CFD No. 2006 -2.
Source: Albert A. Webb Associates.
[Describe Corman development status]
WE
Percent of
Projected
Estimated
Total
Overlapping
Projected
Fiscal
Fiscal Year
Land
Fiscal Year
Year 2015-
2014 -15
Secured
Value -
2015-16
16 Special
Assessed
Bonded
to -Lien
Property Owner
Parcels
Special Tax
Tax
Value
Debt(')*
Ratio*
CORMAN LEIGH TOZAI LAKESHORE
13
$34,420
7.61%
$421,495
$508,336
0.83:1
MONDINO RODNEY
2
4,964
1.10
317,634
73,318
4.33:1
GAM RESOURCES
2
5,411
1.20
391,769
79,906
4.90:1
INDIVIDUAL OWNER
1
2,705
0.60
204,398
39,953
5.12:1
INDIVIDUAL OWNER
1
2,705
0.60
251,134
39,953
6.29:1
INDIVIDUAL OWNER
1
2,572
0.57
173,739
37,978
4.57:1
INDIVIDUALOWNER
1
2,902
0.64
221,125
42,856
5.16:1
INDIVIDUALOWNER
1
2,705
0.60
209,044
39,953
5.23:1
INDIVIDUALOWNER
1
2,705
0.60
165,748
39,953
4.15:1
INDIVIDUAL OWNER
1
2 802
0.64
231,103
42 856
5.391
Subtotal
24
63,991
14.15
2,587,189
945,064
2.74:1
All Others
144
388,309
85.85
29,510,500
5,734,769
5.15:1
Totals
168
$452,300
100.00%
$32,097,689
$6,679,832
4.81:1
* Preliminary; subject to change.
M Excludes general obligation bonded indebtedness applicable within CFD No. 2006 -2.
Source: Albert A. Webb Associates.
[Describe Corman development status]
WE
Delinquencies. The following table is a summary of Special Tax levies, collections and
delinquency rates in CFD No. 2006 -2 for Fiscal Years 2010 -11 through the first installment of
Fiscal Year 2014 -15.
TABLE A -48
LAKE ELSINORE PUBLIC FINANCE AUTHORITY
COMMUNITY FACILITIES DISTRICT NO. 2006 -2
SPECIAL TAX LEVIES, DELINQUENCIES AND DELINQUENCY RATES
FISCAL YEARS 2010 -11 THROUGH 2014 -15
Delinquencies at Fiscal Year End 11 /(3) Delinquencies as of November 19, 2014 I21
Fiscal Amount Parcels Parcels Amount Percent Parcels Amount
Percent
Year Levied Levied Delinquent Delinquent Delinquent Delinquent Delinquent
Delinquent
2010 -11 $497,477 168 14 $76,435 15.36% 0 $0
0.00%
2011 -12 510,443 168 17 123,208 24.14 0 0
0.00
2012 -13 520,652 168 17 123,208 23.66 0 0
0.00
2013 -14 531,773 168 18 53,577 10.08 14 43,883
8.25
2014 -15 541,683 168 N/A N/A N/A N/A N/A
N/A
(1) As of fiscal year end of year levied provided by the continuing disclosure reports.
(2) Delinquency data as of November 19, 2014 provided by the County and Albert A. Webb Associates. Information for
fiscal year 2010 -2011 through fiscal year 2013 -14 provided by the continuing disclosure reports provided as of
June 30
of year levied.
(3) Fiscal Year 2014 -15 fiscal year end data is not yet available.
Source: The Riverside County Assessor's Office; the City and Albert A. Webb Associates (as noted).
A -45
APPENDIX B
SUMMARY OF PRINCIPAL LEGAL DOCUMENTS
m
APPENDIX C
DEMOGRAPHIC INFORMATION REGARDING THE CITY OF LAKE ELSINORE
AND THE COUNTY OF RIVERSIDE
The Bonds do not represent a lien or charge against the funds or property of the City of
Lake Elsinore (the "City') or the County of Riverside (the "County'). The following information
is provided only to give prospective investors an overview of the general economic condition of
the City and the County.
The City
Background information. The City was founded in 1883 and incorporated as a general
law city effective April 23, 1888 in San Diego County, In 1893, the Elsinore Valley, previously
located in San Diego County, became part of the County. The City encompasses approximately
43 square miles, with over 10 miles of Lake Shore, and is located at the southwestern end of
the County, 73 miles east of downtown Los Angeles and 74 miles north of downtown San
Diego. As of June 30, 2014, the City of Lake Elsinore's population was approximately 56,718.
Organization. The City operates under a Council- Manager form of municipal
government. policy- making and legislative authority are vested in the City Council consisting 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 Council appoints a 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 members and the expiration dates of their respective
terms are as follows:
Name Office Term Expires
Steve Manos Mayor November 2016
Brian Tisdale Mayor Pro Tern November 2018
Daryl Hickman Council Member November 2018
Natasha Johnson Council Member November 2016
Robert E. Magee Council Member November 2016
The County
Background Information. The County was organized in 1893 from territory in San
Bernardino and San Diego Counties and encompasses over 7,200 square miles. The County is
bordered on the north by San Bernardino County, on the east by the State of Arizona, on the
South by San Diego and Imperial Counties and on the west by Orange and Los Angeles
Counties. The County is the fourth largest county in California and there are 21 incorporated
cities in the County.
Organization. The County is a general law county divided into five supervisorial
districts on the basis of registered voters and population. The County is governed by a five
member Board of Supervisors who serve alternating four -year terms. The chairman is elected
by the Board members.
County administration includes appointed and elected officials, boards, commissions,
and committees which assist the Board of Supervisors. The County provides a wide range of
C -1
services to residents, including police and fire protection, medical and health services,
education, library services, judicial institutions, and public assistance programs.
Services. Some municipal services are provided by the County on a contract basis to
incorporated cities within its boundaries. These services are designed to allow cities to contract
for certain municipal services such as police and fire protection without incurring the cost of
creating city departments and facilities. Services are provided to the cities at cost by the
County.
C -2
Population
The population of the City as of June 30, 2014 was approximately 56,718. The largest
cities in the County are the cities of Riverside, Moreno Valley, Corona, Temecula, Hemet, Indio,
Murrieta, Cathedral City and Palm Springs. The areas of most rapid population growth continue
to be those more populated and industrialized cities in the western and central regions of the
County and the southwestern unincorporated region of the County between Sun City and
Temecula.
The table below sets forth annual population figures for cities located within the County
for each of the years listed.
COUNTY OF RIVERSIDE
POPULATION OF CITIES (AS OF JANUARY 1)
Calendar Years 2010 through 2014
City
2010
2011
2012
2013
2014
Banning
_
29,492
29,723
30,051
30,177
30,325
Beaumont
36,468
38,034
38,967
39,787
40,876
Blythe
20,882
20,063
20,440
19,609
18,992
Calimesa
7,847
7,910
8,022
8,096
81231
Canyon Lake
10,550
10,606
10,721
10,771
10,826
Cathedral City
51,093
51,400
52,108
52,350
52,595
Coachella
40,508
41,339
42,030
42,795
43,633
Corona
151,858
153,047
154,986
156,864
159,132
Desert Hot Springs
25,886
27,277
27,721
27,835
28,001
Eastvale
0
54,090
55,770
57,266
59,185
Hemet
78,295
79,309
80,330
80,899
81,537
Indian Wells
4,947
4,990
5,050
5,083
5,137
Indio
75,263
76,817
78,299
81,415
82,398
Jurupa Valley
0
0
96,746
97,272
97,774
Lake Elsinore
51,448
52,294
53,183
55,444
56,718
La Quinta
37,044
37,688
38,190
38,412
39,032
Menifee
77,902
79,139
80,832
82,314
83,716
Moreno Valley
192,599
194,451
197,088
198,183
199,258
Murrieta
103,066
104,051
105,301
105,860
106,425
Norco
27,069
26,968
27,123
26,632
26,582
Palm Desert
48,215
48,920
49,619
49,962
50,417
Palm Springs
44,480
44,829
45,415
45,724
46,135
Perris
67,607
69,506
70,392
70,983
72,103
Rancho Mirage
17,165
17,399
17,556
17,643
17,745
Riverside
302,597
306,069
309,409
312,035
314,034
San Jacinto
43,881
44,421
44,938
45,229
45,563
Temecula
99,757
101,255
103,404
104,907
106,289
Wildomar
32,393
32,414
32,818
33,182
33,718
Balance of County
501,380
451,722
357,700
358,924
363,590
Incorporated
1.678.312
1,754.009
1.876.509
1896.729
1.916.377
County Total
2,179,692
2,205,731
2,234,209
2,255,653
2,279,967
Source. State of California Department of Finance, Demographic Research Unit
C -3
Effective Buying Income
"Effective Buying Income" is defined as personal income less personal tax and nontax
payments, a number often referred to as "disposable" or "after -tax" income. Personal income is
the aggregate of wages and salaries, other labor- related income (such as employer
contributions to private pension funds), proprietor's income, rental income (which includes
imputed rental income of owner - occupants of non -farm dwellings), dividends paid by
corporations, interest income from all sources, and transfer payments (such as pensions and
welfare assistance). Deducted from this total are personal taxes (federal, state and local),
nontax payments (fines, fees, penalties, etc.) and personal contributions to social insurance.
According to U.S. government definitions, the resultant figure is commonly known as
"disposable personal income."
The following table summarizes the total effective buying income for the City, the
County, the State and the United States for the period 2009 through 2013.
Effective Buying Income
For Calendar Years 2009 through 2013
Total Effective Median Household
Buying Income Effective Buying
Year Area (000's Omitted) Income
2009
City of Lake Elsinore
$ 860,328
$45,826
County of Riverside
41,337,770
47,080
California
844,823,319
49,736
United States
6,571,536,768
43,252
2010
City of Lake Elsinore
$ 887,513
$43,665
County of Riverside
38,492,225
44,253
California
801,393,028
47,177
United States
6,365,020,076
41,368
2011
City of Lake Elsinore
$ 823,005
$43,961
County of Riverside
39,981,683
44,116
California
814,578,458
47,062
United States
6,438,704,664
41,253
2012
City of Lake Elsinore
$ 846,888
$45,195
County of Riverside
40,157,310
43,860
California
864,0881828
47,307
United States
6,737,867,730
41,358
2013
City of Lake Elsinore
$ 852,698
$45,712
County of Riverside
40,293,518
44,784
California
858,676,636
48,340
United States
61982,757,379
43715
Source: The Nielsen Company (US), inc
C -4
Principal Employers
The tables below show the principal employers located in the City and the County for
fiscal year 2012 -13.
CITY OF LAKE ELSINORE
PRINCIPAL EMPLOYERS
Source: City of Lake Elsinore `Comprehensive Annual Financial Report' for the
year ending June 30, 2013,
COUNTY OF RIVERSIDE
PRINCIPAL EMPLOYERS
Percentage of
Number of
Total
Employer
Employees
Employment
Lake Elsinore Unified School District
2,429
13.65%
M & M Framing
350
1.97
Stater Brothers
314
1.76
Costco
244
1.37
Walmart
225
1.26
Elsinore Valley Municipal Water District
160
0.90
Home Depot
135
0.76
Target
134
0.75
Cardenas Market
125
0.70
Lowe's
109
0.61
Totals
4,225
23.74%
Source: City of Lake Elsinore `Comprehensive Annual Financial Report' for the
year ending June 30, 2013,
COUNTY OF RIVERSIDE
PRINCIPAL EMPLOYERS
Source: County of Riverside 'Comprehensive Annual Financial Report' for the
year ending June 30, 2013.
C -5
Percentage of
Number of
Total
_ Employer
Employees
Employment
County of Riverside
18,728
2.23%
March Air Reserve Base
9,000
1.07
Stater Brothers Market
6,900
0.82
Walmart
5,681
0.68
University of California Riverside
5,497
0.65
Riverside Unified School District
5,000
0.60
Corona -Norco Unified School District
4,633
0,55
Kaiser Permanente Riverside Medical Center
4,500
0.54
Moreno Valley Unified School District
3,355
0.40
Hemet Unified School District
3,270
0.39
Total
66,564
8.65%
Source: County of Riverside 'Comprehensive Annual Financial Report' for the
year ending June 30, 2013.
C -5
Commercial Activity
In 2009, the State Board of Equalization converted the business codes of sales and use
tax permit holders to North American Industry Classification System codes. As a result of the
coding change, retail stores data for 2009 and 2010 is not comparable to that of prior years.
Commercial activity is an important factor in the County's economy. Much of the County's
commercial activity is concentrated in central business districts or small neighborhood
commercial centers in cities. There are eight regional shopping malls in the County: Riverside
Plaza, Galleria at Tyler (Riverside), Palm Springs Mall, Desert Fashion Mall, Indio Fashion Mall,
Hemet Valley Mall, Palm Desert Town Center and Moreno Valley Mall at Towngate. There are
also two factory outlet malls (Desert Hills Factory Stores and Lake Elsinore Outlet Center) and
over 200 area centers in the County. Summaries of historic taxable sales within the City and
the County during the past five years in which data is available are shown in the following
tables.
Total taxable sales during the first two quarters of calendar year 2013 in the City were
reported to be $336,759,000, a 3.79% increase over the total taxable sales of $324,468,000
reported during the first two quarters of calendar year 2012.
CITY OF LAKE ELSINORE
Taxable Retail Sales
Number of Permits and Valuation of Taxable Transactions
(Dollars in thousands)
Total All Outlets
Number
Retail Stores
of Permits
Number
Taxable
$639,732
of Permits
Transactions
2008
653
$588,697
2009111
778
514,746
20101'1
863
546,623
2011111
897
578,301
2012111
923
604,846
Total All Outlets
Number
Taxable
of Permits
Transactions
1,173
$639,732
1,112
560,924
1,197
599,836
1,248
634,553
1,274
665,409
(1) Not comparable to prior years. "Retail" category now includes "Food Services."
Source: California State Board of Equalization, Taxable Sales in California (Sales & Use Tax).
Total taxable sales during the first two quarters of calendar year 2013 in the County
were reported to be $14,760,926,000, a 8.47% increase over the total taxable sales of
$13,608,623,000 reported during the first two quarters of calendar year 2012.
COUNTY OF RIVERSIDE
Taxable Retail Sales
Number of Permits and Valuation of Taxable Transactions
(Dollars in thousands)
Total All Outlets
Number
Retail Stores
of Permits
Number
Taxable
$26,003,595
of Permits
Transactions
2008
23,604
$18,689,249
2009 0)
29,829
16,057,488
20100)
32,534
16,919,500
2011 111
33,398
18,576,285
201211
34,683
20,016,668
Total All Outlets
Number
Taxable
of Permits
Transactions
46,272
$26,003,595
42,765
22,227,877
45,688
23,152,780
46,886
25,641,497
48,316
28,096,009
(1) Not comparable to prior years. "Retail" category now includes "Food Services."
Source: California State Board of Equalization, Taxable Sales in California (Sales & Use Tax).
C -6
Construction Trends
Provided below are the building permits and valuations for the City and the County, for
calendar years 2009 through 2013.
CITY OF LAKE ELSINORE
Total Building Permit Valuations
(Valuations in thousands)
Source: Construction Industry Research Board, Building Permit Summary
COUNTY OF RIVERSIDE
Total Building Permit Valuations
(Valuations in thousands)
2009
2010
2011
2012
2013
Permit Valuation
New Single- family
$18,730.1
$57,633.7
$12,168.7
$71,061.9
$113,359.4
New Multi- family
1,170.1
0.0
8,020.6
0.0
0.0
Res. Alterations /Additions
3.850.1
704.7
1,872.4
858.0
502.0
Total Residential
23,750.3
58,338.4
22,061.7
71,919.9
113,86144
New Commercial
0.0
0.0
206.8
4,701.2
2,520.7
New Industrial
0.0
0.0
0.0
0.0
0.0
New Other
1,299.7
1,591.4
0.0
40.0
440.8
Com. Alterations /Additions
136.6
370.9
1.859.0
3.300.5
1 310.5
Total Nonresidential
1,43644
1,962.3
2,065.8
8,0413
4,272.0
New Dwelling Units
Single Family
106
318
67
401
685
Multiple Family
11
0
113
0
0
TOTAL
117
318
180
401
685
Source: Construction Industry Research Board, Building Permit Summary
COUNTY OF RIVERSIDE
Total Building Permit Valuations
(Valuations in thousands)
Source: Construction Industry Research Board, Building Permit Summary
C -7
2009
2010
2011
2012
2013
Permit Valuation
New Single- family
$892,790.0
$914,057.4
$647,070.8
$904,156.2
$1,138,738.1
New Multi- family
75,756.1
71,151.9
113,170.4
87,878.6
138,636.0
Res, Alterations /Additions
85.148.0
94.427.5
188,468.9
87.370.5
98.219.3
Total Residential
1,053,694.1
1,079,636.8
948,710.1
1,079,405.3
1,375,593.4
New Commercial
94,651.4
191,323.7
166,714.4
508,192.8
263,837.7
New Industrial
12,277.6
6,685.5
10,000.0
26,432.5
141,184.4
New Other
107,332.1
98,104.6
16,576.8
11,115.5
109,795.2
Com. Alterations /Additions
162.557.5
243.265.5
297.356.4
171.263.2
369.502.4
Total Nonresidential
376,818.7
539,379.4
490,647.6
717,004.0
884,319.7
New Dwelling Units
Single Family
3,431
4,031
2659
3,720
4,716
Multiple Family
759
526
1 061
909
1 427
TOTAL
4,190
4,557
3,720
4,629
6,143
Source: Construction Industry Research Board, Building Permit Summary
C -7
Agriculture
Agriculture remains a leading source of income in the County. Principal agricultural
products are nursery, milk, table grapes, hay, bell peppers, eggs, lemons, avocados and dates.
There are four areas in the County that account for all the agricultural activity: the
Riverside /Corona and San Jacinto/Temecula Valley Districts in the western portion of the
County, the Coachella Valley in the central portion and the Palo Verde Valley near the County's
eastern border.
The climate and soil in Temecula /Rancho California are particularly favorable for
growing avocado, grapes, and citrus crops. Avocados are produced on the majority of the
agricultural land in the Santa Rosa Division. Grapes occupy approximately one -half of the
agricultural land in the Rancho California Division and citrus occupies approximately one -third of
agricultural land in the Rancho California Division.
The table below summarizes the value of agricultural production in the County for the
years 2009 through 2013.
COUNTY OF RIVERSIDE
VALUE OF AGRICULTURAL PRODUCTION
Easy access to job opportunities in the County and nearby Los Angeles, Orange and
San Diego Counties is important to the County's employment figures. Several major freeways
and highways provide access between the County and all parts of Southern California. The
Riverside Freeway (State Route 91) extends southwest through Corona and connects with the
Orange County freeway network in Fullerton. Interstate 10 traverses the width of the County, the
western -most portion of which links up with major cities and freeways in the eastern part of Los
Angeles County and the southern part of San Bernardino County. Interstate 15 and 215 extend
north and then east to Las Vegas, and south to San Diego. The Moreno Valley Freeway (U.S.
60) provides an alternate (to Interstate 10) east -west link to Los Angeles County.
Currently, Metrolink provides commuter rail service to Los Angeles and Orange Counties
from several stations in the County. Freight service to major west coast and national markets is
provided by two transcontinental railroads — Burlington Northern /Santa Fe and Union Pacific.
INN
2009
2010
2011
2012
2013
Citrus
$101,652,000
$140,500,922
$119,942,513
125,711,000
142,404,000
Trees and Vine
191,682,600
164,993,960
232,649,262
217,214,000
232,536,000
Vegetables, Melons,
Miscellaneous
221,286,700
292,002,337
278,628,295
286,234,000
340,407,000
Field and Seed
Crops
69,699,800
81,328,229
149,198,052
147,352,000
154,582,000
Nursery
206,499,900
169,341,300
200,154,964
190,878,000
191,215,000
Total Crop Valuation
801,082,500
857,720,124
990,225,736
976,577,000
1,068,121,000
Livestock and
Poultry Valuation
214.672 800
235.926 225
292.030,380
276.553 000
259.683,000
Grand Total
$1,015,755,300
$1,093,646,349
$1,282,256,116
$1,253,130,000
$1,327,804,000
Source: County of Riverside, 2013 Agricultural Production
Report.
Transportation
Easy access to job opportunities in the County and nearby Los Angeles, Orange and
San Diego Counties is important to the County's employment figures. Several major freeways
and highways provide access between the County and all parts of Southern California. The
Riverside Freeway (State Route 91) extends southwest through Corona and connects with the
Orange County freeway network in Fullerton. Interstate 10 traverses the width of the County, the
western -most portion of which links up with major cities and freeways in the eastern part of Los
Angeles County and the southern part of San Bernardino County. Interstate 15 and 215 extend
north and then east to Las Vegas, and south to San Diego. The Moreno Valley Freeway (U.S.
60) provides an alternate (to Interstate 10) east -west link to Los Angeles County.
Currently, Metrolink provides commuter rail service to Los Angeles and Orange Counties
from several stations in the County. Freight service to major west coast and national markets is
provided by two transcontinental railroads — Burlington Northern /Santa Fe and Union Pacific.
INN
Truck service is provided by several common carriers, making available overnight delivery
service to major California cities.
Transcontinental bus service is provided by Greyhound Lines. Intercounty, intercity and
local bus service is provided by the Riverside Transit Agency to western County cities and
communities. The SunLine Transit Agency provides local bus service throughout the Coachella
Valley, including the cities of Palm Springs and Indio. The City of Banning also operates a local
bus system.
The County seat, located in the City of Riverside, is within 20 miles of the Ontario
International Airport in neighboring San Bernardino County. This airport is operated by the Los
Angeles Department of Airports. Four major airlines schedule commercial flight service at Palm
Springs Regional Airport. County- operated general aviation airports include those in Thermal,
Hemet, Blythe and French Valley. The cities of Riverside, Corona and Banning also operate
general aviation airports. There is a military base at March Air Force Base, which converted
from an active duty base to a reserve -only base on April 1, 1996. Plans for joint military and
civilian use of the base thereafter are presently being formulated by the March AFB Joint
Powers Authority, comprised of the County and the Cities of Riverside, Moreno Valley and
Perris.
Education
There are four elementary school districts, one high school district, eighteen unified
(K -12) school districts and four community college districts in the County. Ninety -five percent of
all K -12 students attend schools in the unified school districts. The three largest unified districts
are Riverside Unified School District, Moreno Valley Unified School District and Corona -Norco
Unified School District.
There are eight two -year community college campuses located in the communities of
Riverside, Moreno Valley, Norco, San Jacinto, Menifee, Coachella Valley and Palo Verde
Valley. There are also two universities and a four -year college located in the City of Riverside —
the University of California, Riverside, La Sierra University and California Baptist College.
C -9
APPENDIX D
RATE AND METHOD OF APPORTIONMENT
OF SPECIAL TAXES FOR
EACH TAXING JURISDICTION
D -1
APPENDIX E
FORM OF BOND COUNSEL OPINION
E -1
APPENDIX F
FORM OF CONTINUING DISCLOSURE CERTIFICATE
THIS CONTINUING DISCLOSURE CERTIFICATE ( "Disclosure Certificate "), dated as of
June 1, 2013, is executed and delivered by the LAKE ELSINORE PUBLIC FINANCING
AUTHORITY (the "Issuer ") in connection with the issuance of $ aggregate principal
amount the Lake Elsinore Public Financing Authority Local Agency Revenue Refunding Bonds,
Series 2015 (the 'Bonds "). The Bonds are being issued pursuant to an Indenture of Trust,
dated as of March 1, 2015 (the "Indenture "), by and between MUFG Union Bank, N.A., as
trustee (the "Trustee "), and the Issuer.
The Issuer covenants and agrees as follows:
Section 1. Purpose of the Disclosure Agreement. This Disclosure Certificate is
being executed and delivered by the Issuer for the benefit of the Owners and Beneficial Owners
of the Bonds and in order to assist the Underwriters in complying with Rule 15c2- 12(b)(5) of the
Securities and Exchange Commission.
Section 2. Definitions. In addition to the definitions set forth in the Indenture, which
apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this
Section, the following capitalized terms shall have the following meanings:
"Annual Report" shall mean any Annual Report provided by the Issuer pursuant to, and
as described in, Section 3 and 4 of this Disclosure Certificate.
"Annual Report Date" means not later than December 31 of each year.
"City" means the City of Lake Elsinore.
"Dissemination Agent" means or any successor Dissemination Agent
designated in writing by the City and which has filed with the City a written acceptance of such
designation.
"Districts" means, collectively, the following:
(a)
Community Facilities District No.
95 -1 (Lake Elsinore City Center Improvements)
of the City,
(b)
Community Facilities District No.
2003 -02 (Canyon Hills) of the City,
(c)
Community Facilities District No.
2004 -3 (Rosetta Canyon) of the City,
(d)
Community Facilities District No.
2005 -1 (Serenity) of the City,
(e)
Community Facilities District No.
2005 -2 (Alberhill Ranch) of the City,
(f)
Community Facilities District No.
2005 -6 (City Center Townhomes) of the City,
(g)
Community Facilities District No.
2006 -2 (Viscaya) of the City ,
F -1
"Listed Events" means any of the events listed in Section 5(a) of this Disclosure
Certificate.
"Local Obligations" means, collectively, the following:
(a) Community Facilities District No. 95 -1 (Lake Elsinore City Center Improvements)
of the City,
(b) Community Facilities District No. 2003 -2 (Canyon Hills) Improvement Area B
2015 Special Tax Refunding Bonds,
(c) Community Facilities District No. 2004 -3 (Rosetta Canyon) Improvement Area
No. 1 2015 Special Tax Refunding Bonds,
(d) Community Facilities District No. 2004 -3 (Rosetta Canyon) Improvement Area
No. 2 2015 Special Tax Refunding Bonds,
(e) Community Facilities District No. 2005 -1 (Serenity) 2015 Special Tax Refunding
Bonds,
(f) Community Facilities District No. 2005 -2 (Alberhill Ranch) Improvement Area A
2015 Special Tax Refunding Bonds,
(g) Community Facilities District No. 2005 -6 (City Center Townhomes) 2015 Special
Tax Refunding Bonds,
(h) Community Facilities District No. 2006 -2 (Viscaya) 2015 Special Tax Refunding
Bonds.
"MSRB" means the Municipal Securities Rulemaking Board, which has been designated
by the Securities and Exchange Commission as the sole repository of disclosure information for
purposes of the Rule, or any other repository of disclosure information that may be designated
by the Securities and Exchange Commission as such for purposes of the Rule in the future.
"Official Statement" means the final official statement executed by the City in connection
with the issuance of the Bonds.
"Participating Underwriter" means, collectively, Stifel, Nicolaus & Company, Incorporated
and Brandis Tallman LLC, the original underwriters of the Bonds required to comply with the
Rule in connection with offering of the Bonds.
"Rule" means Rule 15c2- 12(b)(5) adopted by the Securities and Exchange Commission
under the Securities Exchange Act of 1934, as it may be amended from time to time.
Section 3. Provision of Annual Reports.
(a) The Issuer shall, or shall cause the Dissemination Agent to, not later than the
Annual Report Date, commencing February 15, 2016, with the report for the 2014 -15 fiscal year,
provide to the MSRB, in an electronic format as prescribed by the MSRB, an Annual Report that
is consistent with the requirements of Section 4 of this Disclosure Certificate. The filing of the
Official Statement shall serve as the first Annual Report. Not later than 15 Business Days prior
IMS
to the Annual Report Date, the Issuer shall provide the Annual Report to the Dissemination
Agent (if other than the Issuer). If by 15 Business Days prior to the Annual Report Date the
Dissemination Agent (if other than the Issuer) has not received a copy of the Annual Report, the
Dissemination Agent shall contact the Issuer to determine if the Issuer is in compliance with the
previous sentence. The Annual Report may be submitted as a single document or as separate
documents comprising a package, and may include by reference other information as provided
in Section 4 of this Disclosure Certificate; provided that the audited financial statements of the
Issuer may be submitted separately from the balance of the Annual Report, and later than the
Annual Report Date, if not available by that date. If the Issuer's fiscal year changes, it shall give
notice of such change in the same manner as for a Listed Event under Section 5(c). The Issuer
shall provide a written certification with each Annual Report furnished to the Dissemination
Agent to the effect that such Annual Report constitutes the Annual Report required to be
furnished by the Issuer hereunder.
(b) If the Issuer does not provide (or cause the Dissemination Agent to provide) an
Annual Report by the Annual Report Date, the Issuer shall provide (or cause the Dissemination
Agent to provide) to the MSRB, in an electronic format as prescribed by the MSRB, a notice in
substantially the form attached as Exhibit A.
(c) With respect to each Annual Report, the Dissemination Agent shall:
(i) determine each year prior to the Annual Report Date the then - applicable
rules and electronic format prescribed by the MSRB for the filing of annual continuing
disclosure reports; and
(ii) if the Dissemination Agent is other than the City, file a report with the City
certifying that the Annual Report has been provided pursuant to this Disclosure
Certificate, and stating the date it was provided.
Section 4. Content of Annual Reports. The Issuer's Annual Report shall contain or
incorporate by reference the following:
(a) Financial Statements. The Issuer's audited financial statements prepared in
accordance with generally accepted accounting principles as promulgated to apply to
governmental entities from time to time by the Governmental Accounting Standards Board. If
the Issuer's audited financial statements are not available by the Annual Report Date, the
Annual Report shall contain unaudited financial statements in a format similar to the financial
statements contained in the final Official Statement, and the audited financial statements shall
be filed in the same manner as the Annual Report when they become available.
(b) Financial and Operating Data. Unless otherwise provided in the audited financial
statements filed on or before the Annual Report Date, financial information and operating data
with respect to the City for the preceding fiscal year, substantially similar to that provided in the
corresponding tables in the Official Statement:
(i) the principal amount of the Bonds outstanding as of the September 2
preceding the filing of the Annual Report,
(ii) the balance in each fund under the Indenture and the Reserve
Requirement as of the September 2 preceding the filing of the Annual Report;
F -3
(iii) any changes to the Rates and Methods of Apportionment of the Special
Taxes approved or submitted to the qualified electors for approval prior to the filing of the
Annual Report and a description of any parcels for which the Special Taxes have been
prepaid in the Fiscal Year for which the Annual Report is being prepared;
(iv) if the assessed valuation of a District has decreased from the amount
stated in the Official Statement, an update of the estimated assessed value -to -lien ratio
for the Districts (and with respect to the applicable Improvement Area) substantially in
the form of Table 4 in the Official Statement based upon the most recent Special Tax
levy preceding the date of the Annual Report and on the assessed values of property for
the current fiscal year;
(v) the percentage of the maximum Special Taxes levied by the Districts with
respect to each series of Local Obligations;
(vi) the status of any foreclosure actions being pursued by the Districts with
respect to delinquent Special Taxes;
(vii) a table showing by District (and with respect to the applicable
Improvement Area) the total Special Taxes levied and the total Special Taxes collected
for the prior fiscal year and the total Special Taxes that remain unpaid for each prior
fiscal year in which Special Taxes were levied and the number of delinquent parcels in
each District (and with respect to the applicable Improvement Area); and
(viii) any information not already included under (i) through (viii) above that the
Issuer is required to file in its annual report to the California Debt and Investment
Advisory Commission pursuant to the provisions of the Mello -Roos Community Facilities
Act of 1982, as amended.
(c) In addition to any of the information expressly required to be provided under this
Disclosure Certificate, the Issuer shall provide such further material information, if any, as may
be necessary to make the specifically required statements, in the light of the circumstances
under which they are made, not misleading.
(d) 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 Issuer or related public entities,
which are available to the public on the MSRB's Internet web site or filed with the Securities and
Exchange Commission. The Issuer shall clearly identify each such other document so included
by reference.
Section 5. Reporting of Significant Events.
(a) The Issuer shall give, or cause to be given, notice of the occurrence of any of the
following Listed Events with respect to the Bonds:
(1) Principal and interest payment delinquencies.
(2) Non - payment related defaults, if material.
(3) Unscheduled draws on debt service reserves reflecting financial
difficulties.
F -4
(4) Unscheduled draws on credit enhancements reflecting financial
difficulties.
(5) Substitution of credit or liquidity providers, or their failure to perform.
(6) Adverse tax opinions, the issuance by the Internal Revenue Service of
proposed or final determinations of taxability, Notices of Proposed Issue
(IRS Form 5701 -TEB) or other material notices or determinations with
respect to the tax status of the security, or other material events affecting
the tax status of the security.
(7) Modifications to rights of security holders, if material.
(8) Bond calls, if material, and tender offers.
(9) Defeasances.
(10) Release, substitution, or sale of property securing repayment of the
securities, if material.
(11) Rating changes.
(12) Bankruptcy, insolvency, receivership or similar event of the Issuer or
other obligated person.
(13) The consummation of a merger, consolidation, or acquisition involving the
Issuer or an obligated person, or the sale of all or substantially all of the
assets of the Issuer or an obligated person (other than in the ordinary
course of business), the entry into a definitive agreement to undertake
such an action, or the termination of a definitive agreement relating to any
such actions, other than pursuant to its terms, if material.
(14) Appointment of a successor or additional trustee or the change of name
of a trustee, if material.
(b) Whenever the Issuer obtains knowledge of the occurrence of a Listed Event, the
Issuer shall, or shall cause the Dissemination Agent (if not the Issuer) to, file a notice of such
occurrence with the MSRB, in an electronic format as prescribed by the MSRB, in a timely
manner not in excess of 10 business days after the occurrence of the Listed Event.
Notwithstanding the foregoing, notice of Listed Events described in subsections (a)(8) and (9)
above 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 under the Indenture.
(c) The Issuer acknowledges that the events described in subparagraphs (a)(2),
(a)(7), (a)(8) (if the event is a bond call), (a)(10), (a)(13), and (a)(14) of this Section 5 contain
the qualifier "if material" and that subparagraph (a)(6) also contains the qualifier "material" with
respect to certain notices, determinations or other events affecting the tax status of the Bonds.
The Issuer shall cause a notice to be filed as set forth in paragraph (b) above with respect to
any such event only to the extent that it determines the event's occurrence is material for
purposes of U.S. federal securities law. Whenever the Issuer obtains knowledge of the
F -5
occurrence of any of these Listed Events, the Issuer will as soon as possible determine if such
event would be material under applicable federal securities law. If such event is determined to
be material, the Issuer will cause a notice to be filed as set forth in paragraph (b) above.
(d) For purposes of this Disclosure Certificate, any event described in paragraph (a)(12)
above is considered to occur when any of the following occur: the appointment of a receiver,
fiscal agent, or similar officer for the Issuer in a proceeding under the United States Bankruptcy
Code or in any other proceeding under state or federal law in which a court or governmental
authority has assumed jurisdiction over substantially all of the assets or business of the Issuer,
or if such jurisdiction has been assumed by leaving the existing governing body and officials or
officers in possession but subject to the supervision and orders of a court or governmental
authority, or the entry of an order confirming a plan of reorganization, arrangement, or
liquidation by a court or governmental authority having supervision or jurisdiction over
substantially all of the assets or business of the Issuer.
Section 6. Identifying Information for Filings with the MSRB. All documents provided to
the MSRB under the Disclosure Certificate shall be accompanied by identifying information as
prescribed by the MSRB.
Section 7. Termination of Reporting Obligation. The Issuer's obligations under this
Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment in
full of all of the Bonds. If such termination occurs prior to the final maturity of the Bonds, the
Issuer shall give notice of such termination in the same manner as for a Listed Event under
Section 5(c).
Section 8. Dissemination Agent. The Issuer may, from time to time, appoint or engage a
Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate,
and may discharge any Dissemination Agent, with or without appointing a successor
Dissemination Agent. The initial Dissemination Agent shall be . Any
Dissemination Agent may resign by providing 30 days' written notice to the Issuer.
Section 9. Amendment: Waiver. Notwithstanding any other provision of this Disclosure
Certificate, the Issuer may amend this Disclosure Certificate, and any provision of this
Disclosure Certificate 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 type of business conducted;
(b) the undertakings herein, as proposed to be amended or waived, would, in
the opinion of nationally recognized bond counsel, have complied with the requirements
of the Rule at the time of the primary offering of the Bonds, after taking into account any
amendments or interpretations of the Rule, as well as any change in circumstances; and
(c) the proposed amendment or waiver either (i) is approved by holders of
the Bonds in the manner provided in the Indenture for amendments to the Indenture 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.
F -6
If the annual financial information or operating data to be provided in the Annual Report
is amended pursuant to the provisions hereof, the first Annual Report filed pursuant hereto
containing the amended operating data or financial information shall explain, in narrative form,
the reasons for the amendment and the impact of the change in the type of operating data or
financial information being provided.
If an amendment is made to this Disclosure Certificate modifying the accounting
principles to be followed in preparing financial statements, the Annual Report for the year in
which the change is made shall present a comparison between the financial statements or
information prepared on the basis of the new accounting principles and those prepared on the
basis of the former accounting principles. The comparison shall include a qualitative discussion
of the differences in the accounting principles and the impact of the change in the accounting
principles on the presentation of the financial information, in order to provide information to
investors to enable them to evaluate the ability of the Issuer to meet its obligations. To the
extent reasonably feasible, the comparison shall be quantitative.
A notice of any amendment made pursuant to this Section 9 shall be filed in the same
manner as for a Listed Event under Section 5(c).
Section 10. Additional Information. Nothing in this Disclosure Certificate shall be deemed
to prevent the Issuer from disseminating any other information, using the means of
dissemination set forth in this Disclosure Certificate or any other means of communication, or
including any other information in any Annual Report or notice of occurrence of a Listed Event,
in addition to that which is required by this Disclosure Certificate. If the Issuer chooses to
include any information in any Annual Report or notice of occurrence of a Listed Event in
addition to that which is specifically required by this Disclosure Certificate, the Issuer shall have
no obligation under this Disclosure Certificate to update such information or include it in any
future Annual Report or notice of occurrence of a Listed Event.
Section 11. Default. If the Issuer fails to comply with any provision of this Disclosure
Certificate, the Participating Underwriter 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 Issuer to comply with its obligations under this
Disclosure Certificate. A default under this Disclosure Certificate shall not be deemed an Event
of Default under the Indenture, and the sole remedy under this Disclosure Certificate in the
event of any failure of the Issuer to comply with this Disclosure Certificate shall be an action to
compel performance.
Section 12. Duties Immunities and Liabilities of Dissemination Agent. (a) The
Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure
Certificate, and the Issuer 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 have no duty or obligation to review any information
provided to it by the Issuer hereunder, and shall not be deemed to be acting in any fiduciary
capacity for the Issuer, the Bond holders or any other party. The obligations of the Issuer under
this Section shall survive resignation or removal of the Dissemination Agent and payment of the
Bonds.
F -7
(b) The Dissemination Agent shall be paid compensation by the Issuer for its services
provided hereunder in accordance with its schedule of fees as amended from time to time, and
shall be reimbursed for all expenses, legal fees and advances made or incurred by the
Dissemination Agent in the performance of its duties hereunder.
Section 13. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of
the Issuer, the Dissemination Agent, the Participating Underwriter and the 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 Certificate may be executed in several
counterparts, each of which shall be regarded as an original, and all of which shall constitute
one and the same instrument.
Date: 2015
AGREED AND ACCEPTED:
as Dissemination Agent
0
Name:
Title:
W.
LAKE ELSINORE PUBLIC FINANCING
AUTHORITY
M
Name:
Title:
EXHIBIT A
NOTICE OF FAILURE TO FILE ANNUAL REPORT
Name of Issuer: Lake Elsinore Public Financing Authority
Name of Issue: Lake Elsinore Public Financing Authority Local Agency Revenue
Bonds, Series 2015
Date of Issuance: _'2015
NOTICE IS HEREBY GIVEN that the City has not provided an Annual Report with
respect to the above -named Bonds as required by the Indenture, dated as of
1, 2015, by and between the Issuer and MUFG Union Bank, N.A. , as trustee. The City
anticipates that the Annual Report will be filed by
Dated:
F -9
DISSEMINATION AGENT:
By:
Its:
APPENDIX G
DTC AND THE BOOK - ENTRY -ONLY SYSTEM
The information in this section concerning DTC and DTC's book -entry only system has
been obtained from sources that the Authority believes to be reliable, but the Authority takes no
responsibility for the completeness or accuracy thereof. The following description of the
procedures and record keeping with respect to beneficial ownership interests in the Bonds,
payment of principal, premium, if any, accreted value and interest on the Bonds to DTC
Participants or Beneficial Owners, confirmation and transfers of beneficial ownership interests in
the Bonds and other related transactions by and between DTC, the DTC Participants and the
Beneficial Owners is based solely on information provided by DTC to the Authority which the
Authority believes to be reliable, but the Authority and the Underwriters do not and cannot make
any independent representations concerning these matters and do not take responsibility for the
accuracy or completeness thereof. Neither the DTC, Direct Participants, Indirect Participants
nor the Beneficial Owners should rely on the foregoing information with respect to such matters,
but should instead confirm the same with DTC or the DTC Participants, as the case may be.
The Depository Trust Company ( "DTC "), New York, New York, will act as securities
depository for the Bonds. The Bonds will be issued as fully- registered securities registered in
the name of Cede & Co. (DTC's partnership nominee) or such other name as may be
requested by an authorized representative of DTC. One fully- registered Bond will be issued for
each annual maturity of the Bonds, each in the aggregate principal amount of such maturity,
and will be deposited through the facilities of DTC.
DTC, the world's largest securities depository, is a limited - purpose trust company
organized under the New York Banking Law, a "banking organization" within the meaning of the
New York Banking Law, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the New York Uniform Commercial Code, and a "clearing agency'
registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934.
DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non -U.S. equity
issues, corporate and municipal debt issues, and money market instruments (from over 100
countries) that DTC's participants ( "Direct Participants ") deposit with DTC. DTC also facilitates
the post trade settlement among Direct Participants of sales and other securities transactions in
deposited securities, through electronic computerized book -entry transfers and pledges
between Direct Participants' accounts. This eliminates the need for physical movement of
securities certificates. Direct Participants include both U.S. and non -U.S. securities brokers and
dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is
a wholly -owned subsidiary of The Depository Trust & Clearing Corporation ( "DTCC "). DTCC is
the holding company for DTC, National Securities Clearing Corporation and Fixed Income
Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the
users of its regulated subsidiaries. Access to the DTC system is also available to others such
as both U.S. and non -U.S. securities brokers and dealers, banks, trust companies, and clearing
corporations that clear through or maintain a custodial relationship with a Direct Participant,
either directly or indirectly ( "Indirect Participants "). DTC has a Standard & Poor's rating of AA +.
The DTC Rules applicable to its Participants are on file with the Securities and Exchange
Commission. More information about DTC can be found at www.dtcc.com.
Purchases of Bonds under the DTC system must be made by or through Direct
Participants, which will receive a credit for the Bonds on DTC's records. The ownership interest
of each actual purchaser of each Bond ( "Beneficial Owner ") is in turn to be recorded on the
Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation
G -1
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 Bonds representing their ownership interests in
Bonds, except in the event that use of the book -entry system for the Bonds is discontinued.
To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC
are registered in the name of DTC's partnership nominee, Cede & Co., or such other name as
may be requested by an authorized representative of DTC. The deposit of Bonds with DTC and
their registration in the name of Cede & Co. or such other DTC nominee do not effect any
change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the
Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such
Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect
Participants will remain responsible for keeping account of their holdings on behalf of their
customers.
Conveyance of notices and other communications by DTC to Direct Participants, by
Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to
Beneficial Owners will be governed by arrangements among them, subject to any statutory or
regulatory requirements as may be in effect from time to time. Beneficial Owners of Bonds may
wish to take certain steps to augment the transmission to them of notices of significant events
with respect to the Bonds, such as prepayments, tenders, defaults, and proposed amendments
to the Bond documents. For example, Beneficial Owners of Bonds may wish to ascertain that
the nominee holding the Bonds for their benefit has agreed to obtain and transmit notices to
Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and
addresses to the registrar and request that copies of notices be provided directly to them.
Redemption notices shall be sent to DTC. If less than all of the Bonds within a maturity
are being prepaid, DTC's practice is to determine by lot the amount of the interest of each Direct
Participant in such maturity to be redeemed.
Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with
respect to Bonds unless authorized by a Direct Participant in accordance with DTC's MMI
Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the District as soon
as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or
voting rights to those Direct Participants to whose accounts Bonds are credited on the record
date (identified in a listing attached to the Omnibus Proxy).
Redemption proceeds, distributions, and dividend payments on the Bonds will be made
to Cede & Co., or such other nominee as may be requested by an authorized representative of
DTC. DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of funds and
corresponding detail information from the District or the Trustee, on payable date in accordance
with their respective holdings shown on DTC's records. Payments by Participants to Beneficial
Owners will be governed by standing instructions and customary practices, as is the case with
securities held for the accounts of customers in bearer form or registered in "street name," and
will be the responsibility of such Participant and not of DTC, the Trustee, or the District, subject
to any statutory or regulatory requirements as may be in effect from time to time. Payment of
redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other
nominee as may be requested by an authorized representative of DTC) is the responsibility of
the District or the Trustee, disbursement of such payments to Direct Participants will be the
G -2
responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the
responsibility of Direct and Indirect Participants.
A Bond Owner shall give notice to elect to have its Bonds purchased or tendered,
through its Participant, to the Trustee, and shall effect delivery of such Bonds by causing the
Direct Participant to transfer the Participant's interest in the Bonds, on DTC's records, to the
Trustee. The requirement for physical delivery of Bonds in connection with an optional tender or
a mandatory purchase will be deemed satisfied when the ownership rights in the Bonds are
transferred by Direct Participants on DTC's records and followed by a book -entry credit of
tendered Bonds to the Trustee's DTC account.
DTC may discontinue providing its services as depository with respect to the Bonds at
any time by giving reasonable notice to the District or the Trustee. Under such circumstances,
in the event that a successor depository is not obtained, physical certificates are required to be
printed and delivered.
The District may decide to discontinue use of the system of book -entry only transfers
through DTC (or a successor securities depository). In that event, Bonds will be printed and
delivered to DTC.
G -3
Stradling Yocca Carlson & 2auai
Drgfi of 213115
RESOLUTION NO. 2015 -
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
LAKE ELSINORE, ACTING AS THE LEGISLATIVE BODY
OF CITY OF LAKE ELSINORE COMMUNITY FACILITIES
DISTRICT NO. 2005 -2 (ALBERHILL RANCH),
AUTHORIZING THE ISSUANCE OF ITS IMPROVEMENT
AREA A 2015 SPECIAL TAX REFUNDING BONDS IN A
PRINCIPAL AMOUNT NOT TO EXCEED TWENTY -SIX
MILLION DOLLARS ($26,000,000) AND APPROVING
CERTAIN DOCUMENTS AND TAKING CERTAIN OTHER
ACTIONS IN CONNECTION THEREWITH
WHEREAS, the City Council of the City of Lake Elsinore (the "City "), located in
Riverside County, California (hereinafter sometimes referred to as the "legislative body
of the District'), has heretofore undertaken proceedings to form City of Lake Elsinore
Community Facilities District No. 2005 -2 (Alberhill Ranch) (the "District') and designate
Improvement Area A therein ( "Improvement Area A ") 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 District has previously issued its $24,680,000 Special Tax Bonds
(Improvement Area A) 2005 Series A (the "Prior Bonds ") to finance certain public
improvements; and
WHEREAS, the legislative body of the District now desires to refund the Prior
Bonds through the issuance of bonds in an aggregate principal amount not to exceed
$26,000,000 designated as the "City of Lake Elsinore Community Facilities District
No. 2005 -2 (Alberhill Ranch) Improvement Area A 2015 Special Tax Refunding Bonds"
(the "2015 Bonds "); and
WHEREAS, in order to effect the issuance of the 2015 Bonds, the legislative
body of the District desires to enter into a Bond Indenture (the "Local Obligation Bond
Indenture "), with MUFG Union Bank, N.A., as Trustee, in substantially the form
presented herewith; and
WHEREAS, in order to effect the refunding and redemption of the Prior Bonds,
the legislative body of the District desires to enter into an Escrow Agreement (the
"Escrow Agreement'), with MUFG Union Bank, N.A., as Escrow Bank, in substantially
the form presented herewith; and
WHEREAS, the legislative body of the District has determined in accordance
with Section 53360.4 of the Code that a negotiated sale of the 2015 Bonds to the Lake
Elsinore Public Financing Authority (the "Authority ") in accordance with the terms of the
Local Obligations Purchase Agreement to be entered into by and among the Authority,
City Council Resolution No 2015 -_
Page 2
the District and certain other community facilities districts of the City participating in the
financing, (the "Bond Purchase Agreement') approved as to form by this legislative
body herein will result in a lower overall cost to the District than a public sale; and
WHEREAS, the legislative body of the District has determined that it is prudent in
the management of its fiscal affairs to issue the 2015 Bonds; and
WHEREAS, the Authority will issue its bonds (the "Authority Bonds ") to provide
funds for its purchase of the 2015 Bonds;
NOW, THEREFORE, the City Council, acting as the legislative body of the
District, does hereby resolve, order and determine as follows:
Section 1. Each of the above recitals is true and correct.
Section 2. The legislative body of the District is authorized pursuant to the Act
to issue the 2015 Bonds for the benefit of the District for purposes set forth herein and
to take the necessary steps to refund and redeem the Prior Bonds.
Section 3. The issuance of the 2015 Bonds in an aggregate principal amount
not to exceed $26,000,000 is hereby authorized with the exact principal amount to be
determined by the official signing the Bond Purchase Agreement in accordance with
Section 6 below. The legislative body of the District hereby determines that it is prudent
in the management of its fiscal affairs to issue the 2015 Bonds, The 2015 Bonds shall
mature on the dates and pay interest at the rates set forth in the Bond Purchase
Agreement to be executed on behalf of the District in accordance with Section 6 hereof.
The 2015 Bonds shall be governed by the terms and conditions of the Local Obligation
Bond Indenture presented at this meeting. The Local Obligation Bond Indenture shall
be prepared by Bond Counsel to the District and executed by one or more of the Mayor,
the City Manager, the Director of Administrative Services, or their written designees
(collectively, the "Authorized Officers ") substantially in the form presented at this
meeting, with such additions thereto and changes therein as the officer or officers
executing the same deem necessary to cure any ambiguity or defect therein, to insert
the offering price(s), interest rate(s), selling compensation, principal amount per
maturity, redemption dates and prices and such other related terms and provisions as
limited by Section 6 hereof, to conform any provisions therein to the Bond Purchase
Agreement and the Official Statement for the Authority Bonds. Approval of such
changes shall be conclusively evidenced by the execution and delivery of the Local
Obligation Bond Indenture by one or more Authorized Officers. Capitalized terms used
in this Resolution which are not defined herein have the meanings ascribed to them in
the Local Obligation Bond Indenture.
In satisfaction of the requirements contained in Section 53363.2 of the Act, the
legislative body of the District hereby determines that (1) it is anticipated that the
purchase of the 2015 Bonds will occur on or about March 17, 2015, (2) the 2015 Bonds
shall bear the date, be in the denominations, have the maturity dates (which do not
exceed the latest maturity date of the Prior Bonds being refunded), and be payable at
City Council Resolution No 2015 -_
Page 3
the place and be in the form specified in the Local Obligation Bond Indenture, (3) the
2015 Bonds will bear interest at the minimum rate of 0.5% per annum, and (4) the
designated cost of issuing the 2015 Bonds being used to refund the Prior Bonds, as
defined by Section 53363.8 of the Act, shall include all of the costs specified in
Section 53363.8(a), (b)(2) and (c).
In satisfaction of the requirements contained in Section 53364.2 of the Act, the
legislative body of the District hereby determines that any savings achieved through the
issuance of the 2015 Bonds shall be used to reduce special taxes of Improvement Area
A, and such reductions shall be made in accordance with the Act.
Section 4. The 2015 Bonds shall be executed on behalf of the District by the
manual or facsimile signature of the Mayor of the City, and the seal of the District, or a
facsimile thereof, shall be impressed or imprinted thereon and attested with the manual
or facsimile signature of the City Clerk. MUFG Union Bank, N.A. is hereby appointed to
act as Trustee for the 2015 Bonds.
Section 5. The covenants set forth in the Local Obligation Bond Indenture to
be executed in accordance with Section 3 above are hereby approved, shall be deemed
to be covenants of the City Council in its capacity as the legislative body of the District
and shall be complied with by the District and its officers.
Section 6. The form of the Bond Purchase Agreement presented herewith is
hereby approved; and any one of the Authorized Officers is hereby authorized and
directed, for and in the name of the District, to execute and the City Clerk, or her written
designee, is authorized to attest to the Bond Purchase Agreement substantially in the
form approved, with such additions thereto and changes therein as may be approved or
required by an Authorized Officer, including changes relating to dates and numbers as
are necessary to conform the Bond Purchase Agreement to the dates, amounts and
interest rates applicable to the 2015 Bonds as of the sale date. Approval of such
additions and changes shall be conclusively evidenced by the execution and delivery of
the Bond Purchase Agreement; provided, however, that the Bond Purchase Agreement
shall be signed only if the interest rate on the 2015 Bonds is such that the principal and
total net interest cost to maturity on the 2015 Bonds is less than the principal and total
net interest cost to maturity on the Prior Bonds.
Section 7. The form of the Escrow Agreement presented at this meeting is
hereby approved; and any one of the Authorized Officers is hereby authorized and
directed, for and in the name of the District, to execute and the City Clerk, or her written
designee, is authorized to attest to the Escrow Agreement, with such additions thereto
and changes therein as may be approved or required by an Authorized Officer,
including changes to conform to the final pricing of the escrow investments and to clarify
any ambiguities, provided that the form of Escrow Agreement may be modified to
conform to federal tax law requirements or to achieve further savings, with the advice
and assistance of Bond Counsel, such approval to be conclusively evidenced by the
execution of the Escrow Agreement by an Authorized Officer. MUFG Union Bank, N.A.
is hereby appointed to act as Escrow Agent under the Escrow Agreement.
City Council Resolution No 2015 -
Page 4
Section 8. In accordance with the requirements of Section 53345.8 of the Act,
the legislative body of the District hereby determines that the assessed value of the real
property in Improvement Area A subject to the special tax to pay debt service on the
2015 Bonds is at least three times the principal amount of the 2015 Bonds and the
principal amount of all other bonds outstanding that are secured by a special tax levied
pursuant to the Act or a special assessment levied on property within Improvement Area
A.
Section 9. The form of the Preliminary Official Statement for the Authority
Bonds presented at this meeting is hereby approved, and the underwriters of the
Authority Bonds are hereby authorized to distribute the Preliminary Official Statement to
prospective purchasers of the Authority Bonds in the form hereby approved, together
with such additions thereto and changes therein as are determined necessary or
desirable by the Authorized Officers to make such Preliminary Official Statement final as
of its date for purposes of Rule 15c2 -12 of the Securities and Exchange Commission,
including, but not limited to, such additions and changes as are necessary to make all
information set forth therein accurate and not misleading. Any one of the Authorized
Officers is hereby authorized to execute a final Official Statement in the form of the
Preliminary Official Statement, together with such changes as are determined
necessary by the Authorized Officers to make such Official Statement complete and
accurate as of its date. The underwriters of the Authority Bonds are further authorized
to distribute the final Official Statement for the Authority Bonds and any supplement
thereto to the purchasers thereof upon its execution on behalf of the District as
described above.
Section 10. The Authorized Officers are authorized to provide for all services
necessary to effect the issuance of the 2015 Bonds. Such services shall include, but
not be limited to, obtaining legal services, trustee services and any other services
deemed appropriate as set forth in a certificate of any one of the Authorized Officers.
The Authorized Officers are authorized to pay for the cost of such services, together
with other Costs of Issuance from 2015 Bond proceeds.
Section 11. The Authorized Officers and all other officers of the City are hereby
authorized and directed to take any actions and execute and deliver any and all
documents as are necessary to accomplish the issuance, sale and delivery of the 2015
Bonds in accordance with the provisions of this Resolution and the fulfillment of the
purposes of the 2015 Bonds as described in the Local Obligation Bond Indenture. Any
document authorized herein to be signed by the City Clerk may be signed by a duly
appointed deputy clerk.
Section 12. This Resolution shall take effect immediately upon its adoption.
City Council Resolution No 2015 -,
Page 5
PASSED, APPROVED AND ADOPTED at a regular meeting of the City Council
of the City of Lake Elsinore, California, this 10th day of February, 2015.
STEVEN MANOS
MAYOR
ATTEST:
VIRGINIA BLOOM
CITY CLERK
APPROVED AS TO FORM:
BARBARA ZEID LEIBOLD
CITY ATTORNEY
Stradling Pocea Carlson R Ravth
Drali gj213115
RESOLUTION NO. 2015 -
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
LAKE ELSINORE, ACTING AS THE LEGISLATIVE BODY
OF CITY OF LAKE ELSINORE COMMUNITY FACILITIES
DISTRICT NO. 95 -1 (LAKE ELSINORE CITY CENTER
PUBLIC IMPROVEMENTS), AUTHORIZING THE
ISSUANCE OF ITS 2015 SPECIAL TAX REFUNDING
BONDS IN A PRINCIPAL AMOUNT NOT TO EXCEED
ONE MILLION FIVE HUNDRED THOUSAND DOLLARS
($1,500,000) AND APPROVING CERTAIN DOCUMENTS
AND TAKING CERTAIN OTHER ACTIONS IN
CONNECTION THEREWITH
WHEREAS, the City Council of the City of Lake Elsinore (the "City "), located in
Riverside County, California (hereinafter sometimes referred to as the "legislative body
of the District'), has heretofore undertaken proceedings to form City of Lake Elsinore
Community Facilities District No. 95 -1 (Lake Elsinore City Center Public Improvements)
(the "District') 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 District has previously issued its $1,375,000 Special Tax Bonds
2011 Series (the "Prior Bonds ") to refinance certain public improvements; and
WHEREAS, the legislative body of the District now desires to refund the Prior
Bonds through the issuance of bonds in an aggregate principal amount not to exceed
$1,500,000 designated as the "City of Lake Elsinore Community Facilities District
No. 95 -1 (Lake Elsinore City Center Public Improvements) 2015 Special Tax Refunding
Bonds" (the "2015 Bonds "); and
WHEREAS, in order to effect the issuance of the 2015 Bonds, the legislative
body of the District desires to enter into a Bond Indenture (the "Local Obligation Bond
Indenture "), with MUFG Union Bank, N.A., as Trustee, in substantially the form
presented herewith; and
WHEREAS, in order to effect the refunding and redemption of the Prior Bonds,
the legislative body of the District desires to enter into an Escrow Agreement (the
"Escrow Agreement'), with MUFG Union Bank, N.A., as Escrow Bank, in substantially
the form presented herewith; and
WHEREAS, the legislative body of the District has determined in accordance
with Section 53360.4 of the Code that a negotiated sale of the 2015 Bonds to the Lake
Elsinore Public Financing Authority (the "Authority ") in accordance with the terms of the
Local Obligations Purchase Agreement to be entered into by and among the Authority,
the District and certain other community facilities districts of the City participating in the
City Council Resolution No 2015 -_
Page 2
financing, (the "Bond Purchase Agreement') approved as to form by this legislative
body herein will result in a lower overall cost to the District than a public sale; and
WHEREAS, the legislative body of the District hereby determines that it is
prudent in the management of its fiscal affairs to issue the 2015 Bonds and that the
issuance of the 2015 Bonds will result in significant public benefits of the type described
in Government Code Section 6586; and
WHEREAS, the Authority will issue its bonds (the "Authority Bonds') to provide
funds for its purchase of the 2015 Bonds;
NOW, THEREFORE, the City Council, acting as the legislative body of the
District, does hereby resolve, order and determine as follows:
Section 1. Each of the above recitals is true and correct.
Section 2. The legislative body of the District is authorized pursuant to the Act
to issue the 2015 Bonds for the benefit of the District for purposes set forth herein and
to take the necessary steps to refund and redeem the Prior Bonds.
Section 3. The issuance of the 2015 Bonds in an aggregate principal amount
not to exceed $1,500,000 is hereby authorized with the exact principal amount to be
determined by the official signing the Bond Purchase Agreement in accordance with
Section 6 below. The legislative body of the District hereby determines that it is prudent
in the management of its fiscal affairs to issue the 2015 Bonds. The 2015 Bonds shall
mature on the dates and pay interest at the rates set forth in the Bond Purchase
Agreement to be executed on behalf of the District in accordance with Section 6 hereof.
The 2015 Bonds shall be governed by the terms and conditions of the Local Obligation
Bond Indenture presented at this meeting. The Local Obligation Bond Indenture shall
be prepared by Bond Counsel to the District and executed by one or more of the Mayor,
the City Manager, the Director of Administrative Services, or their written designees
(collectively, the "Authorized Officers ") substantially in the form presented at this
meeting, with such additions thereto and changes therein as the officer or officers
executing the same deem necessary to cure any ambiguity or defect therein, to insert
the offering price(s), interest rate(s), selling compensation, principal amount per
maturity, redemption dates and prices and such other related terms and provisions as
limited by Section 6 hereof, to conform any provisions therein to the Bond Purchase
Agreement and the Official Statement for the Authority Bonds. Approval of such
changes shall be conclusively evidenced by the execution and delivery of the Local
Obligation Bond Indenture by one or more Authorized Officers. Capitalized terms used
in this Resolution which are not defined herein have the meanings ascribed to them in
the Local Obligation Bond Indenture.
In satisfaction of the requirements contained in Section 53363.2 of the Act, the
legislative body of the District hereby determines that: (1) it is anticipated that the
purchase of the 2015 Bonds will occur on or about March 17, 2015, (2) the 2015 Bonds
shall bear the date, be in the denominations, have the maturity dates (which do not
City Council Resolution No 2015 -_
Page 3
exceed the latest maturity date of the Prior Bonds being refunded), and be payable at
the place and be in the form specified in the Local Obligation Bond Indenture, (3) the
2015 Bonds will bear interest at the minimum rate of 0.5% per annum, and (4) the
designated cost of issuing the 2015 Bonds being used to refund the Prior Bonds, as
defined by Section 53363.8 of the Act, shall include all of the costs specified in
Section 53363.8(a), (b)(2) and (c).
In satisfaction of the requirements contained in Section 53364.2 of the Act, the
legislative body of the District hereby determines that any savings achieved through the
issuance of the 2015 Bonds shall be used to reduce special taxes of the District, and
such reductions shall be made in accordance with the Act.
Section 4. The 2015 Bonds shall be executed on behalf of the District by the
manual or facsimile signature of the Mayor of the City, and the seal of the District, or a
facsimile thereof, shall be impressed or imprinted thereon and attested with the manual
or facsimile signature of the City Clerk. MUFG Union Bank, N.A. is hereby appointed to
act as Trustee for the 2015 Bonds.
Section 5. The covenants set forth in the Local Obligation Bond Indenture to
be executed in accordance with Section 3 above are hereby approved, shall be deemed
to be covenants of the City Council in its capacity as the legislative body of the District
and shall be complied with by the District and its officers.
Section 6. The form of the Bond Purchase Agreement presented herewith is
hereby approved; and any one of the Authorized Officers is hereby authorized and
directed, for and in the name of the District, to execute and the City Clerk, or her written
designee, is authorized to attest to the Bond Purchase Agreement substantially in the
form approved, with such additions thereto and changes therein as may be approved or
required by an Authorized Officer, including changes relating to dates and numbers as
are necessary to conform the Bond Purchase Agreement to the dates, amounts and
interest rates applicable to the 2015 Bonds as of the sale date. Approval of such
additions and changes shall be conclusively evidenced by the execution and delivery of
the Bond Purchase Agreement; provided, however, that the Bond Purchase Agreement
shall be signed only if the interest rate on the 2015 Bonds is such that the principal and
total net interest cost to maturity on the 2015 Bonds is less than the principal and total
net interest cost to maturity on the Prior Bonds.
Section 7. The form of the Escrow Agreement presented at this meeting is
hereby approved; and any one of the Authorized Officers is hereby authorized and
directed, for and in the name of the District, to execute and the City Clerk, or her written
designee, is authorized to attest to the Escrow Agreement, with such additions thereto
and changes therein as may be approved or required by an Authorized Officer,
including changes to conform to the final pricing of the escrow investments and to clarify
any ambiguities; provided that the form of Escrow Agreement may be modified to
conform to federal tax law requirements or to achieve further savings, with the advice
and assistance of Bond Counsel, such approval to be conclusively evidenced by the
City Council Resolution No 2015 -_
Page 4
execution of the Escrow Agreement by an Authorized Officer. MUFG Union Bank, N.A.
is hereby appointed to act as Escrow Agent under the Escrow Agreement.
Section 8. In accordance with the requirements of Section 53345.8 of the Act,
the legislative body of the District hereby determines that the assessed value of the real
property in the District subject to the special tax to pay debt service on the 2015 Bonds
is at least three times the principal amount of the 2015 Bonds and the principal amount
of all other bonds outstanding that are secured by a special tax levied pursuant to the
Act or a special assessment levied on property within the District.
Section 9. The form of the Preliminary Official Statement for the Authority
Bonds presented at this meeting is hereby approved, and the underwriters of the
Authority Bonds are hereby authorized to distribute the Preliminary Official Statement to
prospective purchasers of the Authority Bonds in the form hereby approved, together
with such additions thereto and changes therein as are determined necessary or
desirable by the Authorized Officers, to make such Preliminary Official Statement final
as of its date for purposes of Rule 15c2 -12 of the Securities and Exchange
Commission, including, but not limited to, such additions and changes as are necessary
to make all information set forth therein accurate and not misleading. Any one of the
Authorized Officers is hereby authorized to execute a final Official Statement in the form
of the Preliminary Official Statement, together with such changes as are determined
necessary by the Authorized Officers to make such Official Statement complete and
accurate as of its date. The underwriters of the Authority Bonds are further authorized
to distribute the final Official Statement for the Authority Bonds and any supplement
thereto to the purchasers thereof upon its execution on behalf of the District as
described above.
Section 10. The Authorized Officers are authorized to provide for all services
necessary to effect the issuance of the 2015 Bonds. Such services shall include, but
not be limited to, obtaining legal services, fiscal agent services and any other services
deemed appropriate as set forth in a certificate of any one of the Authorized Officers.
The Authorized Officers are authorized to pay for the cost of such services, together
with other Costs of Issuance from 2015 Bond proceeds.
Section 11. The Authorized Officers and all other officers of the City are hereby
authorized and directed to take any actions and execute and deliver any and all
documents as are necessary to accomplish the issuance, sale and delivery of the 2015
Bonds in accordance with the provisions of this Resolution and the fulfillment of the
purposes of the 2015 Bonds as described in the Local Obligation Bond Indenture. Any
document authorized herein to be signed by the City Clerk may be signed by a duly
appointed deputy clerk.
Section 12. This Resolution shall take effect immediately upon its adoption.
City Council Resolution No 2015 -_
Page 5
PASSED, APPROVED AND ADOPTED at a regular meeting of the City Council
of the City of Lake Elsinore, California, this 10th day of February, 2015.
STEVEN MANOS
MAYOR
ATTEST:
VIRGINIA BLOOM
CITY CLERK
APPROVED AS TO FORM:
BARBARA ZEID LEIBOLD
CITY ATTORNEY
Sb adling Yocea Carlson & Runth
Dryf n1'213/15
CITY OF LAKE ELSINORE
COMMUNITY FACILITIES DISTRICT NO. (
2015 SPECIAL TAX REFUNDING BONDS
ESCROW AGREEMENT
This ESCROW AGREEMENT (the "Escrow Agreement'), made and entered into as of
January 1, 2015, by and between City of Lake Elsinore Community Facilities District No. _
( ) (the "District'), and MUFG Union Bank, N.A. (the "Escrow Agent'), a
national banking association organized and existing under the laws of the United States of America
and being qualified to accept and administer the escrow hereby created.
WITNESSETH.
WHEREAS, the District has heretofore issued its City of Lake Elsinore Community
Facilities District No. (_ ) Special Tax Bonds, Series (the
"Prim Bonds "), pursuant to the terms of that certain Fiscal Agent Agreement dated as of _ (the
"Prior Fiscal Agent Agreement'), by and between the District and MUFG Union Bank, N.A.
(formerly known as Union Bank of California, N.A.). as fiscal agent (the "Prior Fiscal Agent'); and
WHEREAS, the District has determined to cause the issuance and sale of its 2015 Special
Tax Refunding Bonds (tile "CFD Bands "), in connection with the issuance of the Lake Elsinore
Public financing Authority Local Agency Revenue Bonds, Series 2015 (the "Authority Bonds ") for
the purpose of providing moneys to the Escrow Agent, which will be sufficient (when combined with
moneys to be provided from other sources) to redeem on 2015 (the "Redemption
Date ") the Prior Bonds maturing on and after September 1, 2015 at a redemption price equal to 100%
of the principal amount to be redeemed, together with accrued interest to the Redemption Date (the
"Redemption Price "); and
WHEREAS, pursuant to Section 2 of this Escrow Agreement, the District will cause a
prescribed potion of the proceeds of the CFD Bonds to be set aside with the Escrow Agent, together
with certain funds held by the Prior Fiscal Agent with respect to the Prior Bonds to be set aside with
the Escrow Agent, in order to provide for the payment of the Redemption Price of the Prior Bonds,
such proceeds and funds to be deposited in an escrow fund to be created hereunder to be maintained
by the Escrow Agent to be held uninvested in the Escrow Fund, and such amount has been certified
by to be sufficient to pay when and as due the Redemption Price of the Prior Bonds
set forth in Schedule 11 hcreto;
NOW, THEREFORE, the District and the Escrow Agent hereby agree as follows:
SECTION 1. Establishment and Maintenance of Escrow Fund. The Escrow Agent agrees
to establish and maintain, until the Prior Bonds have been paid in full, a fund designated as the "City
of Lake Elsinore Community Facilities District No. Escrow Fund" (the "Escrow Fund "),
and to hold the moneys therein at all times as a special and separate escrow fund (wholly segregated
from all other securities, investments or moneys on deposit with the Escrow Agent). All moneys in
the Escrow Fund are hereby irrevocably pledged, subject to the provisions of Section 2 hereof, to
secure the payment when due of the Redemption Price of the Prior Bonds.
SECTION 2. Funding of the Escn-ow Fund.
(a) The District agrees that, not later than ____,2015 (the "Closing
Date "), the District will cause to be transferred to the Escrow Agent for deposit in the Escrow Fund:
(i) from MIJFG Union Batik, N.A., as fiscal agent (the "Fiscal Agent ")
under the Bond Indenture (the "Indenture ") dated as of January 1, 2015, between the District and the
Fiscal Agent, the amount of $ from the proceeds of sale of the CFD Bonds; and
(ii) from the Prior Fiscal Agent the sum of $ front amounts
held under the Prior Fiscal Agent Agreement on account of the Prior Bonds.
(b) The District hereby directs the Escrow Agent to hold such funds uninvested
in the Escrow Fund.
SECTION 3. onds. The District hereby requests
and irrevocably instructs the Escrow Agent to transfer, subject to the provisions of Section 2 hereof,
all moneys deposited in the Escrow Fund, to the Prior Fiscal Agent to pay the Redemption Price of
the remaining outstanding Prior Bonds on the Redemption Date. Upon payment in full of the Prior
Bonds, the Escrow Agent shall transfer any moneys remaining in the Escrow Fund to the District
and, after provision for payment of amounts due the Prior Fiscal Agent and the Escrow Agent
pursuant to Section 6 and 11 hereof, this Escrow Agreement shall terminate. The Escrow Fund cash
flow for the Escrow Fund is set forth in Schedule 11 attached hereto.
SECTION 4. Notices of Defeasance and Redemption of the Prior Bonds. The District
hereby instructs the Escrow Agent to mail, first class, postage prepaid, a notice to the Prior
Bondowners in the form attached hereto as Schedule I -A stating that the defeasance of the Prior
Bonds has occurred. The District further instructs the Escrow Agent to mail, first class, postage
prepaid, by not later than 30 days prior to the Redemption Date a notice in substantially the form
attached hereto as Schedule 1 -B of redemption with respect to the Prior Bonds in accordance with the
procedures set forth in Section 4.3 of the Prior Fiscal Agent Agreement.
SECTION 5. Notice of Possible Deficiencies. If at any time the Escrow Agent has actual
knowledge that the moneys in the Escrow Fund will not be sufficient to make all payments required
by Section 3 hereof, the Escrow Agent shall notify the District in writing as soon as is reasonably
practicable, of such fact, the amount of such deficiency and if known, the reason therefor; provided,
however, that the District shall have no liability for any such deficiency.
SECTION 6. Fees and Costs. The Escrow Agent shall receive its reasonable fees and
expenses as previously agreed to by the Escrow Agent and the District and any other reasonable fees
and expenses of the Escrow Agent approved by the District. The parties hereto agree that the duties
and obligations of the Escrow Agent shall be as expressly provided hercin, and no implied duties or
obligations shall be read into this Escrow Agreement against the Escrow Agent. The 'fees of and the
costs incurred by the Escrow Agent shall in no event be deducted or payable from, or constitute a lien
against, the Escrow Fund.
SECTION 7. Merger or Consolidation. Any company into which the Escrow 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 Escrow
Agent may sell or transfer all or substantially all of its corporate trust business, provided such
company shall be eligible under this Escrow Agreement, shall be the successor of such Escrow Agent
without the execution or filing of any paper or any further act, notwithstanding anything herein to the
contrary.
SECTION 8. Severability. If any section, paragraph, sentence, clause or provision of this
Escrow Agreement shall for any reason be held to be invalid or unenforceable, the invalidity or
unenforceability of such section, paragraph, sentence, clause or provisions shall not affect any of the
remaining provisions of this Escrow Agreement.
SECTION 9. Execution of Counterparts. This Escrow Agreement may be executed in any
number of counterparts, each of which shall for all proposes be deemed to be an original and all of
which shall together constitute but one and the same instrument.
SECTION 10. Applicable Law. This Escrow Agreement shall be governed by and construed
in accordance with the laws of the State of California.
SECTION 11. Indemnification. The District agrees to indemnify, hold harmless and defend
the Escrow Agent, its officers, employees, directors, and agents, to the extent permitted by law from
and against any and all losses, damages, claims, actions, liabilities, costs and expenses of whatever
nature, kind or character (including, without limitation, attorneys' fees, litigation and court costs,
amounts paid in settlement and amounts paid to discharge judgments) which may be imposed on, or
incurred by or asserted against the Escrow Agent directly or indirectly arising out of or related to any
claim, suit, investigation, proceeding or action commenced or threatened as a result the execution by
the Escrow Agent of this Escrow Agreement, the performance of its obligations hereunder, or of the
payment of the Prior Bonds; provided, however, that this indemnification shall not cover any losses
or expenses incurred by Tire Escrow Agent as a result of its negligence or willful misconduct. The
agreements of the District hereunder shall survive the discharge of the Prior Fiscal Agent Agreement
and the payment of the Redemption Price and the resignation or removal of the Prior Fiscal Agent.
SECTION 12. Immunities and Liability of Escrow Agent.
(a) The Escrow Agent undertakes to perform only such duties as are expressly
and specifically set forth in this Escrow Agreement, and no implied duties or obligations shall be
read into this Escrow Agreement against Escrow Agent.
(b) The Escrow Agent shall not have any liability hereunder except to the extent
of its own negligence or willful misconduct. In no event shall the Escrow Agent be liable for any
special, indirect or consequential damages, even if the Escrow Agent or the District knows of the
possibility of such damages. The Escrow Agent shall have no duty or responsibility under this
Escrow Agreement in the case of any default in the performance of the covenants or agreements
contained in the resolutions and fiscal agent agreements relating to the Prior Bonds. The Escrow
Agent is not required to resolve conflicting demands to money or property in its possession under
this Escrow Agreement.
(c) The Escrow Agent may consult with counsel of its own choice, and the
opinion of such counsel shall be full and complete authorization to take or suffer in good faith any
action hereunder in accordance with such opinion of counsel.
3
(d) The Escrow Agent shall not be responsible for any of the recitals or
representations contained herein.
(e) The Escrow Agent may become the owner of, or acquire any interest in, any
of the Prior Bonds with the saute rights that it would have if it were not the Escrow Agent and may
engage or be interested in any financial or other transaction with the District.
(f) The Escrow Agent shall not be liable for the accuracy of any calculations
provided as to the sufficiency of the moneys deposited with it to pay the prescribed Prior Bonds.
(g) The Escrow Agent shall not be liable for any action or omission of the
District under this Escrow Agreement.
(h) Whenever in the administration of this Escrow Agreement the Escrow 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 negligence or willful misconduct on the part of the Escrow Agent,
be deemed to be conclusively proved and established by a certificate of any authorized representative
of the District, and such certificate shall, in the absence of negligence or willful misconduct on the
part of the Escrow Agent, be full warrant to the Escrow Agent for any action taken or suffered in
good faith by it under the provisions of this Escrow Agreement.
(i) The Escrow Agent may conclusively rely, as to the truth and accuracy of the
statements and correctness of the opinions and the calculations provided to it in connection with this
Escrow Agreement and shall be protected in acting, or refraining from acting, upon any written
notice, instruction, request, certificate, document or opinion furnished to the Escrow Agent in
compliance with this Escrow Agreement and reasonably believed by the Escrow Agent to have been
signed or presented by the proper party, and it need not investigate any fact or matter stated in such
notice, instruction, request, certificate or opinion.
(j) The Escrow Agent shall incur no liability for losses arising from any
investment made pursuant to this Agreement.
(k) No provision of this Agreement shall require the Escrow Agent to expend or
risk its own funds or otherwise incur any financial liability in the performance or exercise of any of
its duties hereunder, or in the exercise of its rights or powers.
(1) The liability of the Escrow Agent to make the payments required by this
Agreement shall be limited to the moneys in the Escrow Fund.
(m) The Escrow Agent shall furnish the District periodic cash transaction
statements which include detail for all investment transactions effected by the Escrow Agent or
brokers selected by the District. Upon the District's election, such statements will be delivered via
the Escrow Agent's online service and upon electing such service, paper statements will be provided
only upon request. The District waives the right to receive brokerage confirmations of security
transactions effected by the Escrow Agent as they occur, to the extent permitted by law. The District
Further understands that trade confirmations for securities transactions effected by the Escrow Agent
will be available upon request and at no additional cost and other trade confirmations may be
obtained from the applicable broker.
SECTION 13. Termination and Modification of Agreement Upon final payment in full of
the principal of and interest on the Prior Bonds pursuant to this Escrow Agreement, all obligations of
the Escrow Agent under this Escrow Agreement shall cease and terminate, except for the obligation
of the Escrow Agent to pay or cause to be paid to the owners of the Prior Bonds not presented for
payment all sums due thereon and the obligation of the District to pay to the Escrow Agent any
amounts due and owing to the Escrow Agent hereunder. This Escrow Agreement may not be
amended or modified in any manner which is materially adverse to the Owners of the Prim Bonds
without the unanimous prior written consent of the Owners of the Prior Bonds.
5
IN WITNESS WHEREOF, City of Lake Elsinore Community Facilities District No.
and MUFG Union Bank, N.A., as Escrow Agent, have caused this Escrow
Agreement to be executed each on its behalf by duly authorized officers as of the day and year first
above written.
ATTEST:
City Clerk of the City of Lake Elsinore
CITY OF LAKE ELSINORE COMMUNITY
FACILITIES DISTRICT NO.
Mayor of the City of Lake Elsinore
MUFG UNION BANK, N.A., as Escrow Agent
By:
Its: Authorized Officer
S -1
SCHEDULE I -A
FORM OF NOTICE OF DEFEASANCE
NOTICE OF DEFEASANCE OF
$
CITY OF LAKE ELSINORE
COMMUNITY FACILITIES DISTRICT NO.
SPECIAL TAX BONDS, SERIES _
Notice is hereby given to the holders of all of the outstanding $ City of Lake
Elsinore Community Facilities District No. _ ( ) Special Tax Bonds,
Series maturing on and after September 1, 2015 (the "Refunded Bonds ") (i) that there has
been deposited with MUFG Union Bank, N.A., as Escrow Agent (the "Escrow Agent "), moneys
under the Escrow Agreement, dated as of January 1, 2015 (the "Escrow Agreement'), between City
of Lake Elsinore Community Facilities District No. _ ( ) (the
"District ") and the Escrow Agent, which shall be sufficient and available to redeem on
2015 the Refunded Bonds at a redemption price (expressed as a percentage of the principal amount
of the Refunded Bonds to be redeemed) equal to 100 %; (ii) that the Escrow Agent has been
irrevocably instructed to redeem on 2015 such Refunded Bonds; and (iii) that the
Refunded Bonds are deemed to be paid in accordance with Section 9.1 of the Fiscal Agent
Agreement by and between the District and MUFG Union Bank, N.A. (formerly known as Union
Bank of California, N.A.), as fiscal agent, dated as of , pursuant to which the Refunded
Bonds were issued.
Dated this day of 2015.
CITY OF LAKE EI,SINORE COMMUNITY
FACILITIES DISTRICT NO.
MUFG UNION BANK, N.A.
as Escrow Agent
SCHEDULE I -A
SCHEDULE I -B
FORM OF NOTICE OF REDEMPTION
NOTICE OF REDEMPTION OF
$
CITY OF LAKE ELSINORE
COMMUNITY FACILITIES DISTRICT NO.
SPECIAL TAX BONDS, _ SERIES _
NOTICE IS HEREBY GIVEN to the owners of the above - captioned Special Tax Bonds, _
Series (the "Bonds ") of the City of Lake Elsinore Community Facilities District No.
( ) (the "District ") pursuant to the Fiscal Agent Agreement, dated as of
(the "__ Trust Agreement'), by and between the District and MUFG Union Bank, N.A. (formerly
known as Union Bank of California, N.A.), as fiscal agent (the " Fiscal Agent'), that the Bonds in
the principal amount of $ listed below (the "Refunded Bonds ") have been called for
redemption on , 2015 (the "Redemption Date").
Maturity Date
CUSIP (September 1) Rate Amount Price
The Refunded Bonds will be payable on the Redemption Date at a redemption price of 100% of
the principal amount plus accrued interest to such date (the "Redemption Price "). The Redemption Price
of the Refunded Bonds will became due and payable on the Redemption Date. Interest with respect to the
Refunded Bonds will cease to accrue on and after the Redemption Date, and such Refunded Bonds will be
surrendered to the Fiscal Agent.
All Refunded Bonds are required to be surrendered to the principal corporate office of the
Fiscal Agent, on the Redemption Date at the following locations. If the Refunded Bonds are mailed, the
use of registered, insured mail is recommended:
By Hand: By Registered or Certified By Air Courier:
Mail:
If the Owner of any Refunded Bond subject to optional redemption fails to deliver such Refunded
Bond to the Fiscal Agent on the Redemption Date, such Refunded Bond shall nevertheless be
deemed redeemed on the Redemption Date and the Owner of such Refunded Bond shall have no rights in
respect thereof except to receive payment of the Redemption Price from funds held by MUFG Union
SCI IEDULE I -B
Bank, N.A., as escrow agent (the "Escrow Agent") under the Escrow Agreement dated as of January I,
2015, by and between the Escrow Agent and the District, for such payment.
DATED this day of _ 2015.
MUM UNION BANK, N.A., as Escrow Agent
SCHEDULE ] -A
SCHEDULEII
REDEMPTION PRICE OF PRIOR BONDS
Payment Principal Debt
Date Redeemed Interest Premium Payment
/2015 $ $
Cash deposited on , 2015 in the Escrow Fund in the amount of $_ and held
uninvested in the Escrow Fund.
SCHEDULE II
SD-adling Yocca Carlson & Raulh
Draft gj213115
BONDINDENTURE
Between
CITY OF LAKE ELSINORE
COMMUNITY FACILITIES DISTRICT NO. ( )
and
MUFG UNION BANK, N.A.,
as Trustee
CITY OF LAKE ELSINORE
COMMUNITY FACILITIES DISTRICT NO. (_
2015 SPECIAL TAR REFUNDING BONDS
Dated as of 1, 2015
Table of Contents
ARTICLE 1
DEFINITIONS
Section I.1. Definit ions ......... ...............................
Pa �
................ ............................... 2
ARTICLE II
GENERAL AUTHORIZATION AND BOND TERMS
Section 2.1.
Amount, Issuance, Propose and Nature of Bonds and Parity Bonds ..........................
12
Section 2.2.
Type and Nature of Bonds and Parity Bonds ............................... ...............................
12
Section 23.
Equality of Bonds and Parity Bonds and Pledge of Net Special Taxes ......................
13
Section 2.4.
Description of Bonds; Interest Rates ........................................... ...............................
13
Section 2.5.
Place and Form of Payment ......................................................... ...............................
15
Section 2.6.
Form of Bonds and Parity Bonds ................................................. ...............................
16
Section 2.7.
Execution and Authentication ...................................................... ...............................
16
Section2.8.
Bond Register ............................................................................... ...............................
17
Section 2.9.
Registration of Exchange or Transfer ............................................ .............................17
Section 2.10.
Mutilated, Lost, Destroyed or Stolen Bonds or Parity Bonds ...... ...............................
17
Section 2.11.
Validity of Bonds and Parity Bonds ............................................ ...............................
18
ARTICLE Bl
CREATION OF FUNDS AND APPLICATION OF PROCEEDS
Section 3.1.
Creation of Funds; Application of Proceeds ................................ ...............................
18
Section 3.2.
Deposits to and Disbursements from Special Tax Fund .............. ...............................
19
Section 3.3.
Administrative Expense Fund ........................................................ .............................20
Section 3.4.
Interest Account and Principal Account of the Special Tax Fund ..............................
21
Section 3.5.
Redemption Account of the Special Tax Fund ............................ ...............................
21
Section3.6.
Surplus Fund .................................................................................. .............................22
Section 3.7.
Improvement Fund ......................................................................... .............................22
Section3.8.
Investments .................................................................................. ...............................
23
ARTICLE IV
REDEMPTION OF BONDS AND PARITY BONDS
Section 4.1. Redemption of Bonds .................................................................... .............................24
Section 4.2. Selection of Bonds and Parity Bonds for Redemption .................. .............................25
Section 4.3. Notice of Redemption... ............................................. ..... .... ..... .. ............................ 26
Section 4.4. Partial Redemption of Bonds or Parity Bonds ............................... .............................27
Section 4.5. Effect ofNotice and Availability of Redemption Money .............. .............................27
ARTICLE' V
COVENANTSAND WARRANTY
Section5.1. Warrantv ........................................................................................ .............................28
Section5.2. Covenants ....................................................................................... .............................28
Table of Contents
(continued)
Pane
ARTICLE VI
AMENDMENTS TO INDENTURE
Section 6.1. Supplemental Indentures or Orders Not Requiring Bondowner Consent ................... 31
Section 6.2. Supplemental Indentures or Orders Requiring Bondowner Consent .......................... 32
Section 6.3. Notation of Bonds or Parity Bonds; Delivery of Amended Bonds or Parity
Bonds........................................................................................... ............................... 33
ARTICLE VII
FISCAL AGENT
Section7.1.
Ilustee ............................................................................................
.............................34
Section 7.2.
Removal of Trustee ........................................................................
.............................34
Section 7.3.
Resignation of Trustee ...................................................................
.............................35
Section 7.4.
Liability of Trustee ........................................................................
.............................35
Section 7.5.
Merger or Consolidation ................................................................
.............................36
ARTICLE Vill
EVENTS OF DEFAULT; REMEDIES
Section8.1.
Events of Default ........................................................................... .............................37
Section8.2.
Remedies of Owners ...................................................................... .............................37
Section 8.3.
Application of Revenues and Other Funds After Default .............. .............................38
Section 8.4.
Power of Trustee to Control Proceedings ...................................... .............................38
Section 8.5.
Appointment of Receivers ........................................................... ...............................
39
Section8.6.
Non- Waiver .................................................................................... .............................39
Section 8.7.
Limitations on Rights and Remedies of Owners ......................... ...............................
39
Section 8.8.
Termination of Proceedings ........................................................... .............................40
ARTICLE IX
DEFEASANCE AND PARITY BONDS
Section9.1. Defeasance ..................................................................................... .............................40
Section 9.2. Conditions for the Issuance of Parity Bonds and Other Additional
Indebtedness................................................................................. ............................... 41
ARTICLE X
MI SC]?.LLAN EOU S
Section 10.1. Cancellation of Bonds and Parity Bonds ............. ...............................
Section 10.2. Execution of Documents and Proof of Ownership .............................
Section 10.3. Unclaimed Monevs .............................................. ...............................
Section 10.4. Provisions Constitute Contract ............................ ...............................
Section 10.5. Future Contracts ................................................... ...............................
Section 10.6. Further Assurances ............................................... ...............................
Section10.7. Severability .......................................................... ...............................
Section10.8. Notices ................................................................. ...............................
Table of Contents
(continued)
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EXl1IB1T A FORM OP 2015 SPECIAL TAX REFUNDING BOND ............. ............................A -1
BONDINDENTURE
THIS BOND INDENTURE dated as of 1, 2015 (the "Indenture "), is made and
entered into by the City of Lake Elsinore Community Facilities District No. _
( ) and MUFG Union Bank, N.A., as fiscal agent, and governs the terms of the
Community Facilities District No. ( ) 2015 Special Tax Refunding Bonds and
any Parity Bonds issued in accordance herewith from time to time.
RECITALS:
WHEREAS, the City Council of the City of Lake Elsinore, located in Riverside County,
California (hereinafter sometimes referred to as the `legislative body of the District'), has heretofore
undertaken proceedings to form the City of Lake Elsinore Community Facilities District
No. ( _� (the "District') 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 (tile "Act'); and
[WHEREAS, the District is authorized to 'finance certain public facilities and other
governmental facilities that are necessary to meet increased demands placed upon the City of Lake
Elsinore as a result of development or rehabilitation occurring within the District, which facilities
may be physically located outside the boundaries of the District; and]
WHEREAS, the District has previously issued its Prior Bonds (as defined herein) to finance
certain public improvements [and certain public improvement's authorized to be financed remain
uncompleted and without an adequate funding source]; and
WHEREAS, on 2015, the legislative body of the District adopted Resolution
No. (the "Resolution') authorizing the issuance and sale of special tax bonds for the District
pursuant to this Indenture designated as the "City of Lake Elsinore Community Facilities District
No. ( ) 2015 Special Tax Refunding Bonds" (the "Bonds "); and
WHEREAS, it is in the public interest and for the benefit of the District, the persons
responsible for the payment of special taxes and the owners of the Bonds that the District enter into
this Indenture to provide for the issuance of the Bonds, the disbursement of proceeds of the Bonds,
the disposition of the special taxes securing the bonds, and the administration and payment of the
Bonds; and
WHEREAS, all things necessary to cause the Bonds, when authenticated by the Trustee and
issued as provided in the Act, the Resolution and this Indenture, to be legal, valid and binding and
limited obligations in accordance with their terms, and all things necessary to cause the creation,
authorization, execution and delivery of this Indenture and the creation, authorization, execution and
issuance of the Bonds, subject to the teens hereof, have in all respects been duly authorized;
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 nurtual 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 District does hereby
covenant and agree, for the benefit of the Owners of the Bonds as follows:
ARTICLE I
DEFINITIONS
Section 1.1. Definitions. Unless the context otherwise requires, the following terms shall
have the following meanings:
"Account" means any account created pursuant to this Indenture.
"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 Trustee, any fees and related costs for credit enhancement for Bonds or which
are not otherwise paid as Costs of Issuance, any costs related to the District's compliance with state
and federal laws requiring continuing disclosure of information concerning the Bonds, the District,
and any other costs otherwise incurred by the City on behalf of the District in order to carry out the
purposes of the District as set forth in the Resolution of Formation and any obligation of the District
hereunder. Administrative Expenses shall also include the administrative costs with respect to the
collection of Delinquency Proceeds.
"Administrative Expense Fund" means the fund by that name created and established
pursuant to Section 3.1 hereof.
"Administrative Expense Requirement" means $ provided that at its option, the
District may establish the Administrative Expense Requirement for any Bond Year subsequent to the
initial Bond Year at any amount larger than $ that is not in excess of the lesser of (a) 102% of
the Administrative Expense Requirement applicable in the immediately preceding Bond Year or
(b) the remainder of (i) the sum of the Maximunn Special Tax applicable to each Parcel of Taxable
Properly in the Fiscal Year that ends in such Bond Year minus (ii) 110% of Annual Debt Service for
such Bond Year.
"Annual Debt Service" means the principal amount of any Outstanding Bonds or Parity
Bonds payable in a Bond Year either at maturity or pursuant to a Sinking Fund Payment and any
interest payable on any Outstanding Bonds or Parity Bonds in such Bond Year, if the Bonds and any
Parity Bonds are retired as scheduled.
"Authority" means the Lake Elsinore Public Financing Authority.
"Authority Bonds" means any bonds outstanding under the Authority Indenture, which are
secured by payments made on the Bonds.
"Authority hndenh 'e" means that certain Indenture of Trust, dated as of _ 1, 2015,
by and between the Authority and the Authority Trustee, pursuant to which the Authority Bonds are
issued.
"Authority Trustee" means MUFG Union Bank, N.A. or any successor thereto appointed
pursuant to the Authority Indenture.
"Authorized Investments" means any of the following investments, if and to the extent the
same are at the time legal for investment of the District's funds (the Trustee is entitled to rely upon
investment direction from the District as a certification that such investment is an Authorized
Investment):
1. Cash (insured at all times by the Federal Deposit Insurance Corporation or
collateralized by Authorized Investments described in clause (2) of the definition thereof).
2. (a) Direct obligations (other than an obligation subject to variation in
principal repayment) of the United States of America ( "United States Treasury Obligations "),
(b) obligations fully and unconditionally guaranteed as to timely payment of principal and
interest by the United States of America, (c) obligations fully and unconditionally guaranteed
as to timely payment of principal and interest by any agency or instrumentality of the United
States of America when such obligations are backed by the full faith and credit of the United
States of America, or (d) evidences of ownership of proportionate interests in future interest
and principal payments on obligations described above held by a bank or trust company as
custodian, under which the owner of the investment is the real party in interest and has the
right to proceed directly and individually against the obligor and the underlying government
obligations are not available to any person claiming through the custodian or to whom the
custodian may be obligated.
Federal Housing Administration debentures.
4. The listed obligations of government - sponsored agencies which are not
backed by the full faith and credit of the United States of America:
(a) Federal Home Loan Mortgage Corporation (FHLMC)
(i) Participation certificates (excluded are stripped mortgage
securities which are purchased at prices exceeding their principal
amounts)
(ii) Senior Debt obligations
(b) Farm Credit Banks (formerly: Federal Land Banks, Federal
(i) Intermediate Credit Banks and Banks for Cooperatives)
(ii) Consolidated system -wide bonds and notes
(c) Federal Home Loan Banks (FHL Banks)
(i) Consolidated debt obligations
(d) Federal National Mortgage Association (FNMA)
(i) Senior debt obligations
(ii) Mortgage - backed securities (excluded are stripped mortgage
securities which are purchased at prices exceeding their principal
amounts)
(c) Financing Corporation (FICO)
(i) Debt obligations
(0 Resolution Funding Corporation (REFCORP)
(i) Debt obligations
5. Unsecured certificates of deposit, time deposits, demand deposits, and
bankers' acceptances (having maturities of not more than 30 days) of any bank (including the
Trustee and any affiliate) the short -term obligations of which are rated "A -I" or better by
Standard & Poor's.
6. Deposits the aggregate amount of which are fully insured by the Federal
Deposit Insurance Corporation (FDIC), in banks (including the Trustee and ally affiliate)
which have capital and surplus of at least $5 million.
7. Commercial paper (having original maturities of not more than 270 days rated
"A -1 +" by Standard & Poor's and "Prime -I" by Moody's.
8. Money market funds rated "AAm" or "AAm -G" by Standard & Poor's, or
better (including those of the Trustee or its affiliates).
9. "State Obligations," which means
(a) Direct general obligations of any state of the United States of
America or any subdivision or agency thereof to which is pledged the full faith and
credit of a state the unsecured general obligation debt of which is rated "A3" by
Moody's and "A" by Standard & Poor's, or better, or any obligation fully and
unconditionally guaranteed by any state, subdivision or agency whose unsecured
general obligation debt is so rated.
(b) Direct general short -term obligations of any state agency or
subdivision or agency thereof described in (A) above and rated "A -I +" by Standard
& Poor's and "Prime -I" by Moody's.
(c) Special Revenue Bonds (as defined in the United States Bankruptcy
Code) of any state, state agency or subdivision described in (A) above and rated
"AA" or better by Standard & Poor's and "Aa" or better by Moody's.
10. Pre - refunded municipal obligations rated "AAA" by Standard & Poor's and
"Aaa" by Moody's meeting the following requirements:
(a) the municipal obligations are (1) not subject to redemption prior to
maturity or (2) the paying agent for the municipal obligations has been given
irrevocable instructions concerning their call and redemption and the issuer of the
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municipal obligations has covenanted not to redeem such municipal obligations other
than as set forth in such instructions;
(b) the municipal obligations are secured by cash or United States
Treasury Obligations which may be applied only to payment of the principal of,
interest and premium on such municipal obligations;
(c) the principal of and interest on the United States Treasury Obligations
(plus any cash in the escrow) has been verified by the report of independent certified
public accountants to be sufficient to pay in full all principal of, interest, and
premium, if any, due and to become due on the municipal obligations
( "Verification ");
(d) the cash or United States Treasury Obligations serving as security for
the municipal obligations are held by an escrow agent or paying agent in trust for
owners of the municipal obligations;
(e) no substitution of a United States Treasury Obligation shall be
permitted except with another United States Treasury Obligation and upon delivery
of a new Verification; and
(f) the cash or United States Treasury Obligations are not available to
satisfy any other claims, including those by or against the paying agent or escrow
agent.
Repurchase agreements
With (1) any domestic bank, or domestic branch of a foreign bank, the long term debt
of which is rated at least "A" by Standard & Poor's and Moody's; or (2) any broker - dealer
with "retail customers" or a related affiliate thereof which broker- dealer has, or the parent
company (which guarantees the provider) of which has, long -term debt rated at least "A" by
Standard & Poor's and Moody's, which broker - dealer falls under the jurisdiction of the
Securities Investors Protection Corporation; or (3) any other entity rated "A" or better by
Standard & Poor's and Moody's, provided that:
(a) The market value of the collateral is maintained at levels equal to
104% of the amount of cash transferred by the Trustee or the District to the provider
of the repurchase agreement plus accrued interest with the collateral being valued
weekly and marked -to- market at one current market price plus accrued interest;
(b) The Trustee or a third party acting solely as agent therefor or for the
District (the "Holder of the Collateral ") has possession of the collateral or the
collateral has been transferred to the Holder of the Collateral in accordance with
applicable state and federal laws (other than by means of entries on the transferor's
books);
(c) The repurchase agreement shall state and an opinion of counsel shall
be rendered at the time such collateral is delivered that the Holder of the Collateral
has a perfected first priority security interest in the collateral, any substituted
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collateral and all proceeds thereof (in the case of bearer securities, this means the
Holder of the Collateral is in possession);
(d) The repurchase agreement shall provide that if during its term the
provider's rating by either Moody's or Standard & Poor's is withdrawn or suspended
or falls below "A " by Standard & Poor's or "A3" by Moody's, as appropriate, the
provider must, at the direction of Trustee or the District, within 10 days of receipt of
such direction, repurchase all collateral and terminate the agreement, with no penalty
or premium to the Trustee or the District.
Notwithstanding the above, if a repurchase agreement has a term of 270 days or less
(with no evergreen provision), collateral levels need not be as specified in (a) above, so long
as such collateral levels are 103% or better and the provider is rated at least "A" by Standard
& Poor's and Moody's, respectively.
12. Investment agreements with a domestic or foreign bank or corporation (other
than a life or property casualty insurance company) the long -term debt of which or, in the
case of a guaranteed corporation the Tong -term debt, or, in the case of a monoline financial
guaranty insurance company, claims paying ability, of the guarantor is rated at least "AA" by
Standard & Poor's and "Aa" by Moody's; provided that, by the terms of the investment
agreement:
(a) interest payments are to be made to the Trustee or the District at times
and in amounts as necessary to pay debt service (or, if the investment agreement is
for the Improvement Fund, construction draws) on the Bonds;
(b) the invested funds are available for withdrawal without penalty or
premium, at any time upon not more than seven days' prior notice, the Trustee or the
District hereby agrees to give or cause to be given notice in accordance with the
terms of the investment agreement so as to receive funds thereunder with no penalty
or premium paid;
(c) the investment agreement shall state that is the unconditional and
general obligation of, and is not subordinated to any other obligation of, the provider
thereof, or, in the case of a bank, that the obligation of the bank to make payments
under the agreement ranks pari passu with the obligations of the bank to its other
depositors and its other unsecured and unsubordinated creditors;
(d) the Trustee or the District receives the opinion of domestic counsel
(which opinion shall be addressed to Trustee or the District) that such investment
agreement is legal, valid, binding and enforceable upon the provider in accordance
with its terms and of foreign counsel (if applicable) in form and substance acceptable,
and addressed to, the Trustee or the District;
(e) the investment agreement shall provide that if during its term
(i) the provider's rating by either Standard & Poor's or Moody's
falls below "AA -" or "Aa3 ", respectively, the provider shall, at its option,
within 10 days of receipt of publication of such downgrade, either (y)
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collateralize the investment agreement by delivering or transferring in
accordance with applicable state and federal laws (other than by means of
entries on the provider's books) to the District, the Trustee or a third party
acting solely as agent therefor (the "Holder of the Collateral ") collateral free
and clear of any third -party liens or claims the market value of which
collateral is maintained at levels and upon such conditions as would be
acceptable to Standard & Poor's and Moody's to maintain an "A" rating in an
"A" rated structured financing (with a market value approach); or (z) repay
the principal of and accrued but unpaid interest on the investment; and
(ii) the provider's rating by either Standard & Poor's or Moody's
is withdrawn or suspended or falls below "A -" or "A3 ", respectively, the
provider must, at the direction of the Trustee or the District, within 10 days of
receipt of such direction, repay the principal of and accrued but unpaid
interest on the investment, in either case with no penalty or premium to the
Trustee or District; and
(f) the investment agreement shall state and an opinion of counsel shall
be rendered, in the event collateral is required to be pledged by the provider under the
terms of the investment agreement at the time such collateral is delivered, that the
Holder of the Collateral has a perfected first priority security interest in the collateral,
any substituted collateral and all proceeds thereof (in the case of bearer securities, this
means the Holder of the Collateral is in possession);
(g) the investment agreement must provide that if during its germ
(i) the provider shall default in its payment obligations, the
provider's obligations under the investment agreement shall, at the direction
of the Trustee or the District, be accelerated and amounts invested and
accrued but unpaid interest thereon shall be repaid to the Trustee or the
District, and
(ii) the provider shall become insolvent, not pay its debts as they
become due, be declared or petition to be declared bankrupt, etc. ( "event of
insolvency "), the provider's obligations shall automatically be accelerated
and amowrts invested and accrued but unpaid interest thereon shall be repaid
to the Trustee or the District.
13. The State of California Local Agency Investment Fund.
"Authorized Representative of the City" means the means the Mayor, City Manager,
Assistant City Manager, Director of Administrative Services, Finance Manager or City Clerk of the
City, or any other officer or employee authorized by the City Council of the City or by an Authorized
Officer to undertake the action referenced in this Agreement as required to be undertaken by an
Authorized Representative of the City.
"Bond Counsel" means an attorney at law or a firm of attorneys selected by the District of
nationally recognized standing in matters pertaining to the tax - exempt nature of interest on bonds
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issued by states and their political subdivisions duly admitted to the practice of law before the highest
court o'f any state of the United States of America or the District of Columbia.
"Bond Register" means the books which the Trustee shall keep or cause to be kept on which
the registration and transfer of the Bonds and any Parity Bonds shall be recorded.
"Bondowner" or "Owner" means the person or persons in whose name or names any Bond or
Parity Bond is registered.
"Bonds" means the $ City of Lake Elsinore Community Facilities District
No. ( _) 2015 Special Tax Refunding Bonds.
"Bond Year" means the twelve month period commencing on September 1 of each year and
ending on September I of the following year, except that the first Bond Year for the Bonds or an
issue of Parity Bonds shall begin on the Delivery Date and end on 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 Trustee is located, are not required or authorized to remain closed.
"Certificate of au Authorized Representative" means a written certificate or warrant request
executed by an Authorized Representative of the City.
"City" means the City of Lake Elsinore, County of Riverside, California.
"City Council" means the City Council of the City.
"Code" means the Internal Revenue Code of 1986, as amended, 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" shall have the meaning set forth in the Authority Indenture.
"Defeasance Securities" means non - callable, non - prepayable obligations of the type set forth
in clauses (1) and (2) of the definition of Authorized Investments.
"Delinquency Proceeds" means the amounts collected from the redemption of delinquent
Special Taxes including the penalties and interest thereon and from the sale of property sold as a
result of the foreclosure of the lien of the Special Tax resulting from the delinquency in the payment
of Special Taxes due and payable on such property.
"Delivery Date" means, with respect to the Bonds and each issue of Parity Bonds, the date on
which the bonds of such issue were issued and delivered to the initial purchasers thereof.
"District" means the City of Lake Elsinore Community Facilities District No.
( ) established pursuant to the Act and the Resolution of Formation.
[ "Developed Property" shall have the meaning ascribed to it in the Rate and Method of
Apportionment.]
"Escrow Agent" means MUFG Union Bank, N.A., acting as escrow agent pursuant to the
Fscrow Agreement.
"Escrow Agreement" means that Escrow Agreement, dated as of 1, 2015, between
the District and the Escrow Agent relating to the defeasance and refunding of the Prior Bonds.
"Trustee" means MUFG Union Bank, N.A., a national banking association duly organized
and existing under the laws of the United States of America, at its corporate trust office in Los
Angeles, California, and its successors or assigns, or any other bank, association 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 Year" means the period beginning on July I of each year and ending on the next
following June 30.
"Gross Special Taxes" means the amount of all Special Taxes received by the District,
together with the proceeds collected from the sale of property pursuant to the foreclosure provisions
of this Indenture for the delinquency of such Special Taxes remaining after the payment of all costs
related to such foreclosure actions.
[`Improvement Fund" means the funds by that name established pursuant to Section 3.1.]
"Independent Financial Consultant" means a financial consultant or firm of such consultants
generally recognized to be well qualified in the financial consulting field, appointed and paid by the
District, who, or each of whom:
(1) is in fact independent and not under the domination of the District or the City;
(2) does not have any substantial interest, direct or indirect, in the District or the
City; and
(3) is not connected with the District or the City as a member, officer or
employee of the District or the City, but who may be regularly retained to make annual or other
reports to the District or the City.
"Indenture" means this Bond Indenture, together with any Supplemental Indenture approved
pursuant to Article 6 hereof.
"Interest Payment Date" means each March I and September 1, commencing [September 1,
2015], and the final maturity date of the Bonds; provided, however, that, if any such day is not a
Business Day, interest up to the Interest Payment Date, and in the case of the 'final Interest Payment
Date to and including such date, will be paid on the Business Day next preceding such date.
"Maximum Annual Debt Service" means the maximum sum obtained for any Bond Year
prior to the final maturity of the Bonds and any Parity Bonds by adding the following for each Bond
Year:
(1) the principal amount of all Outstanding Bonds and Parity Bonds payable in
such Bond Year either at maturity or pursuant to a Sinking Fund Payment; and
9
(2) the interest payable on the aggregate principal amount of all Bonds and Parity
Bonds Outstanding in such Bond Year if the Bonds and Parity Bonds are retired as scheduled.
" Moody's" means Moody's Investors Service, its successors and assigns.
"Net Special Taxes" means Gross Special Taxes minus amounts set aside to pay
Administrative Expenses.
"Ordinance" means Ordinance No. 1139 adopted by the legislative body of the District on
February 8, 2005, providing for the levying of the Special Tax.
"Outstanding" or "Outstanding Bonds and Parity Bonds" means all Bonds and Parity Bonds
theretofore issued by the District, except:
(1) Bonds and Parity Bonds theretofore cancelled or surrendered for cancellation
in accordance with Section 10.1 hereof;
(2) Bonds and Parity Bonds for payment or redemption of which moneys shall
have been theretofore deposited in trust (whether upon or prior to the maturity or the redemption date
of such Bonds or Parity Bonds), provided that, if such Bonds or Parity Bonds are to be redeemed
prior to the maturity thereof, notice of such redemption shall have been given as provided in this
Indenture or any applicable Supplemental Indenture for Parity Bonds; and
(3) Bonds and Parity Bonds which have been surrendered to the Trustee for
transfer or exchange pursuant to Section 2.9 hereof or for which a replacement has been issued
pursuant to Section 2.10 hereof.
"Parity Bonds" mean bonds or other securities issued by the District and secured by a lien on
the Net Special Taxes which is on parity with the lien thereon securing the Bonds.
"Person" means natural persons, firms, corporations, partnerships, associations, trusts, public
bodies and other entities.
"Prepay in cuts" means any amounts paid by the District to the Trustee and designated by the
District as a prepayment of Special Taxes for one or more parcels in the District made in accordance
with the Rate and Method of Apportionment.
"Principal Office of the Trustee" means the corporate trust office of the Trustee in Los
Angeles, California, provided that for purposes of payment, redemption, exchange, transfer,
surrender and cancellation of Bonds and Parity Bonds, such term means the corporate trust office of
the 'Trustee in Los Angeles, California, or such other office as the 'Trustee may from time to time
designate in writing to the District and the Owners.
"Prior Bonds" means the District's Special Tax Bonds, 2006 Series A currently outstanding
in the aggregate principal amount of $8,330,000.
"Prior Fiscal Agent" means MUFG Union Bank, N.A. (formerly known as Union Bank of
California, N.A.), as fiscal agent Under the Prior Fiscal Agent Agreement.
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"Prior Fiscal Agent Agreement" means the Fiscal Agent Agreement dated as of February 1,
2006 by and between the Prior Fiscal Agent and the District.
" Projject" means those public facilities described in the Resolution of Formation which have
been acquired or constructed within and outside of 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 District 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, Trustee and other fees and expenses relating to
the issuance of the Bonds or the formation of the District, and to pay any other "incidental expenses"
of the District, as such term is defined in the Act.]
"Proportionate Share" means, with respect to the calculation set forth in Section 3.2(b)(4), as
of the date of calculation, a fraction equal to (A) the principal amount of the Bonds Outstanding
divided by (B) the sum of the principal amount of all of the Local Obligations (as defined in the
Authority Indenture) Outstanding.
"Rate and Method of Apportionment" means that certain Rate and Method of Apportionment
of Special Tax approved pursuant to the Resolution of Formation, as amended in accordance with the
Act and this Indenture.
"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 Account" means the District's Account of the Reserve Fund established under the
Authority Indenture.
"Reserve Fund" means the fund by that name established by the Authority Indenture.
"Reserve Requirement" shall have the meaning given such term in the Authority Indenture.
"Resolution of Formation" means Resolution No. 2005 -20 adopted by the City Council on
January 25, 2005, pursuant to which the City formed the District.
"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 any annual sinking fund payment
schedule to retire any Parity Bonds which are designated as Term Bonds.
"Special Tax Fund" means the fund by that name created and established pursuant to
Section 3.1 hereof.
"Special Taxes" means the taxes authorized to be levied by the District on property within
the District in accordance with the Ordinance, the Resolution of Formation, the Act and the voter
approval obtained at the January 25, 2005 election in the District.
"Standard & Poor's" means Standard & floor's Ratings Group, a division of McGraw -Hill,
its successors and assigns.
"Supplemental Indenture" means any supplemental indenture amending or supplementing
this indenture.
"Surplus Fund" means the fund by that name created and established pursuant to Section 3.1
hereof.
"Term Bonds" means the Bonds maturing on September 1, 20
"Treasurer" means the person who is acting in the capacity as finance director or
administrative services director to the City
ARTICLE II
GENERAL AUTHORIZATION AND BOND TERMS
Section 2.1. Amount, Issuance, Purpose and Nature of Bonds and Parity Bonds.
Under and pursuant to the Act, the Bonds in the aggregate principal amount of $ shall be
issued for the purposes of (a) refunding and defeasing the Prior Bonds, [(b) financing the Project],
(c) funding the District's share of the Costs of Issuance and (d) funding the Reserve Account.
Section 2.2. Type and Nature of Bonds and Parity 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 District is pledged to the payment of the Bonds or any Parity Bonds. Except for the Net
Special Taxes, no other taxes are pledged to the payment of the Bonds and Parity Bonds. The Bonds
and any Parity Bonds are not general or special obligations of the City nor general obligations of the
District, but are limited obligations of the District payable solely from certain amounts deposited by
the District in the Special Tax Fund, as more fully described herein. The District's limited obligation
to pay the principal of, premium, if any, and interest oil the Bonds and any Parity Bonds from
amounts in the Special "Tax Fund is absolute and unconditional, free of deductions and without any
abatement, offset, recoupment, diminution or set -off whatsoever. No Owner of the Bonds or any
Parity Bonds may compel the exercise of the taxing power by the District (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 any Parity 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 and any Parity Bonds are not a legal
or equitable pledge, charge, lien, or encumbrance upon any of the District's property, or upon any of
its income, receipts or revenues, except the Net Special Taxes and other amounts in the Special Tax
Fund which are, under the terns of this Indenture and the Act, set aside for the payment of the Bonds
and interest thereon and neither the members of the legislative body of the District or the City
Council no' any persons executing the Bonds are liable personally on the Bonds by reason of their
issuance.
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Notwithstanding anything to the contrary contained in this Indenture, the District shall not be
required to advance any money derived from any source of income other than the Net Special Taxes
for the payment of the interest on or the principal of or premium on the Bonds or any Parity Bonds,
or for the performance of any covenant's contained herein. The District 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 Parity Bonds and Pledge of Net Special Taxes.
Subject only to the provisions of this Indenture permitting the application thereof for the purposes
and on the Terms and conditions set forth herein, in order to secure the payment of the principal of
and interest on the Bonds and any Parity Bonds in accordance with their terms, the provisions of this
Indenture and the Act, the District hereby pledges to the Owners, and grants thereto a lien on and a
security interest in, all of the Net Special Taxes and any other amounts held in the Special Tax Fund.
Said pledge shall constitute a fast lien on and security interest in such assets, which shall
immediately attach to such assets and be effective, binding and enforceable against the District, its
successors, purchasers of any of such assets, creditors and all others asserting rights therein, to the
extent set forth in, and in accordance with, this Indenture, irrespective of whether those parties have
notice of the pledge of, lien on and security interest in such assets and without the need for any
physical delivery, recordation, filing or 'further act. Pursuant to the Act and this Indenture, the Bonds
and any Parity Bonds shall be equally payable from the Net Special Taxes and other amounts in the
Special Tax Fund, without priority for number, date of the Bonds or Parity 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 Parity Bonds and any premiums upon the redemption thereof, shall be exclusively paid from the
Net Special Taxes and other amounts in the Special Tax Fund, which are hereby set aside for the
payment of the Bonds and any Parity Bonds. Amounts in the Special Tax Fund 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 any Parity Bonds and so long as any of the Bonds and any Parity Bonds or
interest thereon remain Outstanding shall not be used for any other purpose, except as permitted by
this Indenture or any Supplemental Indenture. Notwithstanding any provision contained in this
Indenture to the contrary, Net Special Taxes deposited in the Rebate Fund and the Surplus Fund shall
no longer be considered to be pledged to the Bonds or any Parity Bonds, and none of the Rebate
Fund, the Surplus Fund, [the Improvement Fund] or the Administrative Expense Fund shall be
construed as a trust fund held for the benefit of the Owners.
Nothing in this Indenture or any Supplemental Indenture shall preclude; (a) subject to the
limitations herein, the redemption prior to maturity of any Bonds or Parity Bonds subject to call and
redemption and payment of said Bonds or Parity Bonds 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 of
California; or (b) the issuance, subject to the limitations contained herein, of Parity Bonds which
shall be payable from Net Special Taxes.
Section 2.4. Description of Bonds; Interest Rates. 'File Bonds and any Parity Bonds
shall be issued in fully registered form in denominations of $5,000 or any integral multiple thereof.
The Bonds and any Parity Bonds of each issue shall be numbered as desired by the Trustee.
The Bonds shall be designated "CITY OF LAKE ELSINORE COMMUNITY FACILITIES
DISTRICT NO. ( ) 2015 SPECIAL TAX REFUNDING BONDS." The
Bonds shall be dated as of their Delivery Date and shall mature and be payable on September 1 in the
years and in the aggregate principal amounts and shall be subject to and shall bear interest at the rates
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set forth in the table below payable on [September 1, 2015] and each Interest Payment Date
thereafter:
14
Maturity Date
(September I) Principal Amount Interest Rate
Interest shall be payable on each Bond and Parity Bond fi-om the date established in
accordance with Section 2.5 below on each Interest Payment Date thereafter until the principal sum
of that Bond or Parity Bond has been paid; provided, however, that if at the maturity date of any
Bond funds are available for the payment or redemption thereof in full, in accordance with the terms
of this Indenture, such Bonds and Parity Bonds shall then cease to bear interest. Interest due on the
Bonds and Parity Bonds shall be calculated on the basis of a 360 -clay year comprised of twelve
30 -day months.
Section 2.5. Place and Form of Payment. The Bonds and Parity Bonds shall be payable
both as to principal and interest, and as to any preuiums upon the redemption thereof, in lawful
money of the United States of America. The principal of the Bonds and Parity Bonds and any
premiums due upon the redemption thereof shall be payable upon presentation and surrender thereof
at the Principal Office of the Trustee, or at the designated office of any successor Trustee; provided
that so long as the Authority or the Authority Trustee on its behalf is the registered owner of all the
Bonds, such presentment is not required. hrterest 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 Date occurring after the issuance of such Bond or Parity
Bond, in which event interest shall be payable from the dated date of such Bond or Parity Bond;
provided, however, that if at the time of authentication of such Bond or Parity Bond, interest is in
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default, interest on that Bond or Parity 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 or Parity Bond, interest on that Bond or Parity Bond shall
be payable from its dated date. Interest on any Bond or Parity Bond shall be paid to the person
whose name shall appear in the Bond Register as the Owner of such Bond or Parity Bond as of the
close of business on the Record Date. Such interest shall be paid by check of the Trustee mailed on
the applicable 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
Trustee 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 designated by such Owner.
Section 2.6. Form of Bonds and Parity 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 any Parity Bonds and of the certificate of
authentication.
Notwithstanding any provision in this Indenture to the contrary, the District may, in its sole
discretion, elect to issue the Bonds and any Parity Bonds in book entry form.
Until definitive Bonds or Parity Bonds shall be prepared, the District may cause to be
executed and delivered in lieu of such definitive Bonds or Parity 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 or Parity Bonds, except
that they may be in any denominations authorized by the District. Until exchanged for definitive
Bonds or Parity Bonds, any temporary bond shall be entitled and subject to the same benefits and
provisions of this Indenture as definitive Bonds and Parity Bonds. If the District issues temporary
Bonds, it shall execute and furnish definitive Bonds or Parity Bonds, as applicable, without
unnecessary delay and thereupon any temporary Bond or Parity Bond may be surrendered to the
Trustee at its office, without expense to the Owner, in exchange for a definitive Bond or Parity Bond
of the same issue, maturity, interest rate and principal amount in any authorized denomination. All
temporary Bonds and Parity Bonds so surrendered shall be cancelled by the Trustee and shall not be
reissued.
Section 2.7. Execution and Authentication. The Bonds and Parity Bonds shall be signed
on behalf of the District by the manual or facsimile signature of the Mayor of the City and by the
manual or facsimile signature of the City Clerk, or any duly appointed deputy clerk, in their capacity
as officers of the District, and the seal of the District (or a facsimile thereof) shall be impressed,
imprinted, engraved or otherwise reproduced thereon, and attested by the signature of the City Clerk.
In case any one or more of the officers who shall have signed or sealed any of the Bonds or Parity
Bonds shall cease to be such officer before the Bonds or Parity Bonds so signed and sealed have been
authenticated and delivered by the Trustee (including new Bonds or Parity Bonds delivered pursuant
to the provisions hereof with re'rerence to the transfer and exchange of Bonds or Parity Bonds or to
lost, stolen, destroyed or mutilated Bonds), such Bonds or Parity 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.
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Only the Bonds as shall bear thereon such certificate of authentication in the form set forth in
Exhibit A attached hereto shall be entitled to any right or benefit under this Indenture, and no Bond
shall be valid or obligatory for any purpose until such certificate of authentication shall have been
duly executed by the trustee.
Section 2.8. Bond Register. The Trustee will keep or cause to be kept, at its office,
sufficient books for the registration and transfer of the Bonds and any Parity Bonds which shall upon
reasonable prior notice be open to inspection by the District during all regular business hours, and,
subject to the limitations set forth in Section 2.9 below, upon presentation for such purpose, the
Trustee shall, under such reasonable regulations as it may prescribe, with reasonable notice, register
or transfer or cause to be transferred on said Bond Register, Bonds and any Parity Bonds as herein
provided.
The District and the Trustee may treat the Owner of any Bond or Parity Bond whose name
appears on the Bond Register as the absolute Owner of that Bond or Parity Bond for any and all
Purposes, and the District and the Trustee shall not be affected by any notice to the contrary. The
District and the Trustee 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 Trustee
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 or Parity 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 or Parity Bond for
cancellation at the office of the Trustee, accompanied by delivery of written instrument of transfer in
a form acceptable to the Trustee and duly executed by the Bondowner or his or her duly authorized
attorney.
Bonds or Parity Bonds may be exchanged at the office of the Trustee for a like aggregate
principal amount of Bonds or Parity Bonds for other authorized denominations of the same maturity
and issue. The Trustee shall not collect from the Owner any charge for any new Bond or Parity 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. The cost of printing Bonds and any services rendered or expenses incurred by
the Trustee in connection with any transfer or exchange shall be paid by the District. Whenever any
Bonds or Parity Bonds shall be surrendered for registration of transfer or exchange, the District shall
execute and the Trustee shall authenticate and deliver a new Bond or Bonds or a new Parity Bond or
Parity Bonds, as applicable, of the same issue and maturity, for a like aggregate principal amount;
provided that the Trustee shall not be required to register transfers or make exchanges of (i) Bonds or
Parity Bonds for a period of 15 days next preceding any selection of the Bonds or Parity Bonds to be
redeemed, or (ii) any Bonds or Parity Bonds chosen for redemption.
Section 2.10. Mutilated, Lost, Destroyed or Stolen Bonds or Parity Bonds. if any Bond
or Parity Bond shall become mutilated, the District shall execute, and the Trustee shall authenticate
and deliver, a new Bond or Parity Bond of like tenor, date, issue and maturity in exchange and
substitution for the Bond or Parity Bond so mutilated, but only upon surrender to the Trustee of the
Bond or Parity Bond so mutilated. Every mutilated Bond or Parity Bond so surrendered to the
Trustee shall be cancelled by the Trustee pursuant to Section 10.1 hereof. If any Bond or Parity
Bond shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted
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to the Trustee and, if such evidence is satisfactory to the Trustee and, if any indemnity satisfactory to
the Trustee shall be given, the District shall execute and the Trustee shall authenticate and deliver, a
new Bond or Parity Bond, as applicable, of like tenor, maturity and issue, numbered and dated as the
"Trustee shall determine in lieu of and in substitution for the Bond or Parity Bond so lost, destroyed or
stolen. Any Bond or Parity Bond issued in lieu of any Bond or Parity Bond alleged to be mutilated,
lost, destroyed or stolen, shall be equally and proportionately entitled to the benefits hereof with all
other Bonds or Parity Bonds issued hereunder. The Trustee shall not treat both the original Bond or
Parity Bond and any replacement Bond or Parity Bond as being Outstanding for the propose of
determining the principal amount of Bonds or Parity Bonds which may be executed, authenticated
and delivered hereunder or for the purpose of determining any percentage of Bonds or Parity Bonds
Outstanding hereunder, but both the original and replacement Bond or Parity Bond shall be treated as
one and the same. Notwithstanding any other provision of this Section, in lieu of delivering a new
Bond or Parity Bond which has been mutilated, lost, destroyed or stolen, and which has matured, the
Trustee may make payment with respect to such Bonds or Parity Bonds
Section 2.11. Validity of Bonds and Parity Bonds. The validity of the authorization and
issuance of the Bonds and any Parity Bonds shall not be affected in any way by any defect in any
proceedings taken by the District for the financing of the Project, the refunding of the Prior Bonds,
and the recital contained in the Bonds or any Parity 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.
ARTICLE III
CREATION OF FUNDS AND APPLICATION OF PROCEEDS
Section 3.1. Creation of Funds; Application of Proceeds.
(a) There is hereby created and established and shall be maintained by the
Trustee the following funds and accounts:
(1) The Community Facilities District No. Special Tax Fund
(the "Special Tax Fund ") (in which there shall be established and created an Interest Account, a
Principal Account and a Redemption Account);
(2) The Community Facilities District No. Administrative
Expense Fund (the "Administrative Expense Fund ");
(3) [The Community Facilities District No. _ Improvement Fund
(the "Improvement Fund "); and]
(4) The Community Facilities District No. _ Surplus Fund (the
`Surplus Fund ").
The amounts on deposit in the foregoing funds and accounts shall be held by the Trustee on
behalf of the District and shall be invested and disbursed in accordance with the provisions of this
Article 3. The investment earnings thereon shall be disbursed in accordance with the provisions of
Section 3.8 hereof.
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(b) Proceeds 'from the sale of the Bonds in the amount of $ , together
with moneys transferred from the Prior Fiscal Agent under the Prior Fiscal Agent Agreement in the
amount of $ shall be received by the Trustee and deposited or transferred on the Delivery
Date as follows:
(]) $ (comprised of $ of the proceeds of the sale of
the Bonds, together with $ of the moneys received from the Prior Fiscal Agent under the
Prior Fiscal Agent Agreement) shall be transferred to the Escrow Agent for deposit in the escrow
fund created under the Escrow Agreement,
(2) $ _ of the proceeds of the sale of the Bonds representing the
District's share of the Costs of Issuance shall be immediately transferred to the Authority Trustee for
deposit in the Cost of Issuance Fund (as such term is defined in the Authority Indenture),
(3) $ of the proceeds of the sale of the Bonds shall be transferred
to the Authority Trustee for deposit in the Reserve Account, and
(4) [$ of the proceeds of the sale of the Bonds shall be
deposited in the Improvement Fund.]
The Trustee may, in its discretion, establish a temporary fund or account in its books and
records to facilitate such transfers.
Section 3.2. Deposits to and Disbursements from Special Tax Fund.
(a) The Trustee shall deposit Delinquency Proceeds as follows:
(1) the amount specified by the District as representing past due interest
on the Bonds shall be deposited to the Interest Account of the Special Tax Fund; and
(2) the amount specified by the District as representing past due principal
of the Bonds shall be deposited to the Principal Account of the Special Tax Fund.
(b) [The portion of any Prepayment received by the District that is the "Future
Facilities Amount" thereof (as defined in the Rate and Method of Apportionment) shall be identified
as such by the District and transferred to the Trustee for deposit in the Improvement Fund.] The
portion of any Prepayment received by the District that is to be applied to the redemption of Bonds
shall be identified as such by the District and transferred to the Trustee for deposit in the Redemption
Account. Except for the foregoing portion of any Prepayment to be deposited to the Redemption
Account [or the Improvement Fund, as applicable,] the District shall, as soon as practicable, transfer
the Special Taxes received by the District to the Trustee for deposit in the Special Tax Fund to be
held by the Trustee for the Owners. The Trustee shall transfer the Special Taxes 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:
(1) the District for deposit in the Administrative Expense Fund an amount
equal to the Administrative Expense Requirement or, if the Trustee receives written direction from
the District to transfer a lesser amount, then such lesser amount, provided that not more than one -half
of the Administrative Expense Requirement shall be so transferred in any Fiscal Year prior to the
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date on which the balance on deposit in the Interest Account of the Special Tax Fund is at least equal
to the interest payable on the Bonds on March 1;
(2) the Interest Account of the Special Tax Fund the amount necessary to
cause the balance on deposit therein to be equal to the interest on the Bonds payable on the next
succeeding Interest Payment Date;
(3) the Principal Account of the Special Tax Fund the amount necessary
to cause the balance on deposit therein to be equal to the principal amount of the Bonds and /or the
Sinking Fund Payment payable on the next succeeding September 1; provided that not more than
one -half of the principal amount and /or the Sinking Fund Payment payable on the next succeeding
September 1 shall be deposited in the Principal Account prior to March I until (i) the balance on
deposit in the Administrative Expense Fund equals the Administrative Expense Requirement, or such
lesser amount directed by the District in writing to the Trustee, and (ii) the balance on deposit in the
Interest Account equals the interest payable on the Bonds through September I ;
(4) transfer to the Authority Trustee for deposit in the Reserve Account
the amount necessary to cause the balance on deposit therein to equal the District's Proportionate
Share of the Reserve Requirement;
(5) the Redemption Account of the Special Tax Fund; and
(6) the Surplus Fund.
At least ten (10) Business Days prior to each Interest Payment Date, the Trustee shall notify
the District in writing the amount of Special Taxes required to pay the principal of and interest on the
Bonds on the next succeeding Interest Payment Date and the amount necessary to cause the balance
on deposit in the Reserve Account to equal the District's Proportionate Share, if any. The Trustee
shall notify the Authority Trustee at least five (5) Business Days prior to each Interest Payment Date
if there is not on deposit with the Trustee, after making all of the transfers required hereunder,
moneys sufficient to pay the principal of and interest on the Bonds.
Section 3.3. Administrative Expense Fund. The Trustee shall transfer from the first
available Special Taxes in the Special "fax Fund to the District for deposit in the Administrative
Expense Fund an amount such that the total amounts so transferred to the District in any Bond Year
do not exceed the Administrative Expense Requirement. In the event Administrative Expenses
exceed the Administrative Expense Requirement in any Bond Year, the total amount transferred in a
Bond Year shall not exceed the Administrative Expense Requirement until such time as there has
been deposited to the Interest Account and the Principal Account an amount, together with any
amounts already on deposit therein, that is sufficient to pay the interest and principal on all Bonds
and Parity Bonds due in such Bond Year and to restore the Reserve Account to the Proportionate
Share of the Reserve Requirement. Notwithstanding the foregoing, at the direction of the District,
amounts in excess of the Administrative Expense Requirement may be transferred to the
Administrative Expense Fund prior to the transfers to the Interest Account, the Principal Account and
the Redemption Account pursuant to Sections 3.4 and 3.5 below to the extent necessary to collect
delinquent Special Taxes. Following the required transfers pursuant to Sections 3A and 3.5 below of
amounts sufficient to pay the interest and principal on all Bonds due in a Bond Year and to restore
the Reserve Account to the Proportionate Share of the Reserve Requirement, an Authorized
Representative of the City may direct the Trustee, in writing, to transfer additional amounts 'from the
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Special Tax Fund to the District for deposit into the Administrative Expense Fund. Moneys in the
Administrative Expense Fund may be invested in any Authorized Investments.
Section 3.4. Interest Account and Principal Account of the Special Tax Fund. The
principal of and interest due on the Bonds and any Parity Bonds until maturity, other than principal
due upon redemption, shall be paid by the Trustee 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 and any Parity Bonds will be made when due, after making the
transfer required by Section 3.3, at least five Business Days prior to each March I and September 1,
the Trustee 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, any Parity Bonds, or otherwise, the transfer from the Special Tax Fund need not be made. At
least fifteen (15) days prior to an Interest Payment Date, the Trustee shall notify the Authority and
the Authority Trustee if there are insufficient funds to provide for the payment of principal and
interest due on the Bonds on such Interest Payment Date.
Section 3.5. Redemption Account of the Special Tax Fund.
(a) After making the transfers and deposits required by Sections 3.3 and 3.4
above, and in accordance with the District's election to call Bonds for optional redemption as set
forth in Section 4.1 (a) hereof, or to call Parity Bonds for optional redemption as set forth in any
Supplemental Indenture for Parity Bonds, the Trustee shall transfer from the Special Tax Fund and
deposit in the Redemption Account moneys available for the purpose and sufficient to pay the
principal and the premiums, if any, payable on the Bonds or Parity Bonds called for optional
redemption; provided, however, that amounts in the Special Tax Fund may be applied to optionally
redeem Bonds and Parity Bonds only if immediately following such redemption the amount in the
Reserve Account will equal the Proportionate Share of the Reserve Requirement.
(b) Prepayments deposited to the Redemption Account shall be applied on the
redemption date established pursuant to Section 4.1(c) hereof for the use of such Prepayments to the
payment of the principal o'f, premium, and interest on the Bonds and Parity Bonds to be redeemed
with such Prepayments.
(c) Moneys set aside in the Redemption Account shall be used solely for the
purpose of redeeming Bonds and Parity Bonds and shall be applied on or after the redemption date to
the payment of principal of and premium, if any, on the Bonds or Parity Bonds to be redeemed upon
presentation and surrender of such Bonds or Parity Bonds and in the case of an optional redemption
or an extraordinary redemption from Prepayments 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, other than Prepayments, may be used to purchase Outstanding Bonds or Parity Bonds in the
manner hereinafter provided. Purchases of Outstanding Bonds or Parity Bonds may be made by the
District at public or private sale as and when and at such prices as the District 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(a)
hereof, or in the case of Parity Bonds the premium established in any Supplemental Indenture. Any
accrued interest payable upon the purchase of Bonds or Parity Bonds may be paid from the amount
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reserved in the Interest Account of the Special Tax Fund for the payment of interest on the next
following Interest Payment Date.
Section 3.6. Surplus Fund. After making the transfers required by Sections 3.3 and 3.4
hereof, as soon as practicable after each September I, and in any event prior to each October 1, the
Trustee shall transfer all remaining amounts in the Special Tax Fund to the Surplus Fund, unless on
or prior to such date, it has received a Certificate of an Authorized Representative directing that
certain amounts be retained in the Special Tax Fund because the District has included such amounts
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(b) hereof. Moneys deposited in the Surplus Fund will be
transferred by the Trustee at the direction of an Authorized Representative of the City (i) to the
Interest Account, the Principal Account or the Redemption Account of the Special Tax Fund to pay
the principal of, including Sinking Fund Payments, premium, if any, and interest on the Bonds and
any Parity Bonds when due in the event that moneys in the Special Tax Fund and the Reserve
Account are insufficient therefor, (ii) to the Reserve Account in order to replenish the Reserve
Account to the Proportionate Share of the Reserve Requirement, (iii) to the Administrative Expense
Fund to pay Administrative Expenses to the extent that the amounts on deposit in the Administrative
Expense Fund are insufficient to pay Administrative Expenses, (iv) for any other lawful purpose of
the District.
The amounts in the Surplus Fund are not pledged to the repayment of the Bonds or the Parity
Bonds and may be used by the District for any lawful propose. In the event that the District
reasonably expects to use any portion of the moneys in the Surplus Fund to pay debt service on any
Outstanding Bonds or Parity Bonds, the District will notify the Trustee in a Certificate of an
Authorized Representative and the Trustee will segregate such amount into a separate subaccount
and the moneys on deposit in such subaccount of the Surplus Fund shall be invested at the written
direction of the District 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 oil the issue of Bonds or
Parity 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 or any Parity Bonds which were issued on a tax - exempt
basis for federal income tax purposes.
Section 3.7. Improvement Fund.
(a) [The moneys in the Improvement Fund shall be applied exclusively to pay
Project Costs and shall be disbursed by the Trustee, as directed by the District, in accordance with a
Certificate of an Authorized Representative.
(b) Upon receipt of a Certificate of all Authorized Representative of the District
stating that all or a specified portion of the amount remaining in the Improvement Fund is no longer
needed to pay Project Costs, the Trustee shall: (i) transfer all or such specified portion, as applicable,
of the moneys remaining on deposit in the Improvement Fund to the Interest Account, the Principal
Account or Redemption Account of the Special Tax Fund or to t'he Surplus Fund, as directed in such
certificate, provided that in connection with any direction to transfer amounts to the Surplus Fund
there shall have been delivered to the Trustee 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
22
income for federal income tax purposes of interest on the Bonds or any Parity Bonds which were
issued on a tax exempt basis for federal income tax proposes; and (ii) thereafter, close the
Improvement Fund.]
Section 3.8. Investments. Moneys held in any of the Accounts under this Indenture shall
be invested by the Trustee or the District, as applicable, 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
Accounts. Any loss resulting from such Authorized Investments shall be credited or charged to tine
Account from which such investment was made, and any investment earnings on amounts deposited
in the Special Tax Fund, and each Account therein, and of the Surplus Fund shall be deposited in
those respective Funds and Accounts. Moneys in the Accounts held under this Indenture may be
invested by the District or the 'Trustee as directed in writing by the District, as applicable from time
to time, in Authorized Investments subject to the following restrictions:
(a) 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 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.
(b) [Moneys in the Improvement 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 District estimates the moneys
represented by the particular investment will be needed for withdrawal from the Improvement Fund.
Notwithstanding anything herein to the contrary, the District shall instruct the Trustee that amounts
in the Improvement Fund three years after the Delivery Date for the Bonds shall be invested only in
Authorized Investments the interest on which is excluded 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, unless in the opinion of Bond
Counsel such restriction is not necessary to prevent interest oil the Bonds from being included in
gross income for federal income tax purposes.]
(c) In the absence of written investment directions from the District, the Trustee
shall hold monies uninvested.
The District or the Trustee, as applicable, shall sell, 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 Accounts or from such Accounts to which such Authorized
Investments is credited. For the purpose of determining at any given time the balance in any such
Accounts, any such investments constituting a part of such Accounts shall be valued at the lower of
the cost or the market value thereof, exclusive of accrued interest, at least semiannually. In making
any valuations hereunder, the District or the Trustee, as applicable, may utilize such computerized
securities pricing services as may be available to it, including, without limitation, those available
through its regular accowrting system, and conclusively rely thereon. Notwithstanding anything
herein to the contrary, the District or the Trustee, as applicable, shall not be responsible for any loss
fi'om investments, sales or transfers undertaken in accordance with the provisions of this Indenture.
The Trustee or the District, as applicable, may act as principal or agent in the making or
disposing of any investment. The Trustee or the District, as applicable, may sell, or present for
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redemption, any Authorized Investment so purchased whenever it shall be necessary to provide
moneys to meet any required payment, transfer, withdrawal or disbursement from the fund or
account to which such Authorized Investment is credited, and, subject to the provisions of
Section 7.4, the Trustee or the District, as applicable, shall not be liable or responsible for any loss
resulting from such investment. For investment purposes, the Trustee or the District, as applicable,
may commingle the funds and accounts established hereunder, but shall account for each separately.
The District acknowledges that, to the extent regulations of the Comptroller of the Currency
or other applicable regulatory entity grant the District the right to receive brokerage confirmations of
security transactions effected by the Trustee as they occur, the District specifically waives receipt of
such confirmations to the extent permitted by law. The District further understands that trade
confirmations for securities transactions effected by the Trustee will be available upon request and at
no additional cost and other trade confirmations may be obtained from the applicable broker. The
Trustee will furnish the District periodic cash transaction statements which shall include detail for all
investment transactions made by the Trustee hereunder or brokers selected by the District. Upon the
District's election, such statements will be delivered via the Trustee's online service and upon
electing such service, paper statements will be provided only upon request. The Trustee and its
affiliates may act as sponsor, advisor, depository, principal or agent in the holding, acquisition or
disposition of any investment.
ARTICLE IV
REDEMPTION OF BONDS AND PARITY BONDS
Section 4.1. Redemption of Bonds.
(a) Optional Redemption.
The Bonds maturing on or after September 1, 20 may be redecmed, at the option of
the District fi -om any source of funds on any date on or after September 1, 20 , in whole, or in part
from such maturities as are selected by the District and by lot within a maturity, at a redemption price
equal to the principal amount to be redeemed, together with accrued interest to the date of
redemption, without premium.
In the event the District elects to redeem Bonds as provided above, the District shall
give written notice to the Trustee of its election to so redeem, the redemption date and the principal
amount of the Bonds to be redeemed. The notice to the Trustee shall be given at least 60 but no more
than 90 days prior to the redemption date, or by such later date as is acceptable to the Trustee, in its
sole discretion. So Tong as the Bonds are owned by the Authority, the Bonds may be redeemed
pursuant to this Section 4.1(a) only with the prior consent of the Authority as set forth in the
Authority indenture.
(b) Mandatory Sinkitn� Fund Redemption.
The Term Bonds maturing on September 1, 20_ shall be called before maturity and
redeemed, from the Sinking Fund Payments that have been deposited into the Principal Account, on
September 1, 20 , and on each September 1 thereafter prior to maturity, in accordance with the
schedule of Sinking Fund Payments set forth below. The Term Bonds so called for redemption shall
be selected by the Trustee by lot and shall be redeemed at a redemption price for each redeemed
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Term Bond equal to the principal amount thereof, plus accrued interest to the redemption date,
without premium, as follows:
BONDS MATURING SEPTEMBER 1, 20
Redemption Dales
(September ]) Principal Amomrt
(maturity)
If the District purchases Term Bonds and delivers them to the Trustee at least 45 days prior to
an applicable redemption date, the principal amount of the Tenn Bonds so purchased shall be
credited to reduce the Sinking Fund Payment due on such redemption date for the applicable maturity
of the "term Bonds. All Term Bonds purchased pursuant to this subsection shall be cancelled
pursuant to Section 10.1.
In the event of a partial optional redemption or extraordinary mandatory redemption of Term
Bonds, each of the remaining Sinking Fund Payments for such Term Bonds, as described above, will
be reduced, as nearly as practicable, on a pro rata basis.
(c) Extraordinary Redemption.
The Bonds are subject to extraordinary redemption as a whole, or in part on a pro rata
basis among maturities, on any Interest Payment Date, and shall be redeemed by the Trustee, from
Prepayments deposited to the Redemption Account pursuant to Section 3.2 at the following
redemption prices, expressed as a percentage of the principal amount to be redeemed, together with
accrued interest to the redemption date:
Premium
(d) The redemption provisions for Parity Bonds shall be set forth in a
Supplemental Indenture.
Section 4.2. Selection of Bonds and Parity Bonds for Redemption. If less than all of
the Bonds or Parity Bonds Outstanding are to be redeemed, the portion of any Bond or Parity 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 or Parity Bonds for redemption, the
Trustee shall treat such Bonds or Parity Bonds, as applicable, as representing that number of Bonds
or Parity Bonds of $5,000 denominations which is obtained by dividing the principal amount of such
Bonds or Parity Bonds to be redeemed in part by $5,000. The procedure for the selection of Parity
Bonds for redemption may be modified as set forth in the Supplemental Indenture for such Parity
Bonds. The Trustee shall promptly notify the District, in writing, of the Bonds or Parity Bonds, or
portions thereof, selected for redemption.
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Section 4.3. Notice of Redemption. When Bonds or Parity Bonds are due for redemption
under Section 4.1 above or under another redemption provision set forth in a Supplemental Indenture
relating to any Parity Bonds, the Trustee shall give notice, in the name of the District, of the
redemption of such Bonds or Parity Bonds; provided, however, that a notice of a redemption to be
made from other than from Sinking Fund Payments may be conditioned on there being on deposit on
the redemption date sufficient money to pay the redemption price of the Bonds or Parity 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 or Parity Bonds selected for redemption, except
that where all of the Bonds or all of an issue of Parity Bonds are subject to redemption, or all the
Bonds or Parity 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 or Parity Bonds to be
redeemed; (c) state the redemption price; (d) state the place or places where the Bonds or Parity
Bonds are to be redeemed; (e) in the case of Bonds or Parity Bonds to be redeemed only in part, state
the portion of such Bond or Parity Bond which is to be redeemed; (t) state the date of issue of the
Bonds or Parity Bonds as originally issued; (g) state the rate of interest bane by each Bond or Parity
Bond being redeemed: and (h) state any other descriptive information needed to identify accurately
the Bonds or Parity Bonds being redeemed as shall be specified by the Trustee. Such notice shall
further state that on the date fixed for redemption, there shall become due and payable on each Bond,
Parity 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
thereon shall cease to accrue and be payable. At least 30 days but no more than 45 days prior to the
redemption date, the Trustee shall send a copy of such notice to the respective Owners thereof at
their addresses appearing on the Bond Register, and to the original purchaser of the Bonds or Parity
Bonds, as applicable. The actual receipt by the Owner of any Bond or Parity Bond or the original
purchaser of any Bond or Parity 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 Parity Bonds, or the cessation of interest on
the redemption date. A certificate by the Trustee 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. Notwithstanding the foregoing, so long as
the Authority or the Authority Trustee on the Authority's behalf is the registered owner of the Bonds,
no such notices need be provided.
]n addition to the foregoing notice, further notice shall be given by the Trustee as set out
below if the Bonds or Purity Bonds are not owned by the Authority at the time the notice of
redemption is given pursuant to this Section 4.3, provided that 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 father notice of redemption shall be sent at least two days before notice of redemption
is mailed to the Bondowners pursuant to the first paragraph of this Section by registered or certified
mail, overnight delivery service or any other means acceptable to the registered securities depository
listed below and to any other registered securities depositories then in the business of holding
substantial amounts of obligations of types comprising the Bonds and Parity Bonds as shall be
specified by the Trustee and to any national information services that disseminate notice of
redemption of obligations such as the Bonds and Parity Bonds as determined by the Trustee:
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Reeistered Securities Deoositories
The Depository Trust Company
55 Water Street
New York, New York 10041
Attention: Redemption Area
Telecopy: (212) 855 -7232 or (212) 855 -7233
Any notice of optional redemption shall be cancelled and annulled if for any reason funds
will not be or are not available on the date fixed for redemption for the payment in full of the Bonds
then called for redemption, and such cancellation shall not constitute an Event of Default under this
Indenture. The District and the Trustee shall have no liability to the Owners or any other party
related to or arising from such rescission of redemption. The Trustee shall mail notice of such
rescission of redemption in the same manner as the original notice of redemption was sent.
Upon the payment of the redemption price of any Bonds and Parity Bonds being redeemed,
each check or other transfer of funds issued for such propose shall to the extent practicable bear the
CUSIP number, if any, identifying, by issue and maturity, the Bonds and Parity Bonds being
redeemed with the proceeds of such check or other transfer.
Section 4.4. Partial Redemption of Bonds or Parity Bonds. Upon surrender of any
Bond or Parity Bond to be redeemed in part only, the District shall execute and the Trustee shall
authenticate and deliver to the Bondowner, at the expense of the District, a new Bond or Bonds or a
new Parity Bond or Parity Bonds of authorized denominations equal in aggregate principal amount to
the unredeemed portion of the Bonds surrendered, with the same interest rate and the same maturity
or, in the case of surrender of a Parity Bond, a new Parity Bond or Parity Bonds subject to the
foregoing limitations.
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:
(a) The Bonds and Parity 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 Indenture or in any Supplemental Indenture with respect to any Parity Bonds,
anything in this Indenture or in the Bonds or the Parity Bonds to the contrary notwithstanding;
(b) Upon presentation and surrender thereof at the office of the Trustee, the
redemption price of such Bonds and Parity Bonds shall be paid to the Owners thereof, provided that
so long as the Authority or the Authority 'Trustee on the Authority's behalf is the registered owner of
the Bonds no such presentment is required;
(c) As of the redemption date the Bonds or the Parity Bonds, or portions thereof
so designated for redemption shall be deemed to be no longer Outstanding and such Bonds or Parity
Bonds, or portions thereof, shall cease to bear further interest; and
(d) As of the date fixed for redemption no Owner of any of the Bonds, Parity
Bonds or portions thereofso designated for redemption shall be entitled to any of the benefits of this
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Indenture or any Supplemental Indenture, 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 District shall preserve and protect the security pledged
hereunder to the Bonds and any Parity Bonds against all claims and demands of all persons.
Section 5.2. Covenants. So long as any of the Bonds or Parity Bonds issued hereunder
are Outstanding and unpaid, the District makes the following covenants with the Bondowners under
the provisions of the Act and this Indenture (to be performed by the District or its proper officers,
agents or employees), which covenants are necessary and desirable to secure the Bonds and Parity
Bonds and tend to make them more marketable; provided, however, that said covenants do not
require the District to expend any funds or moneys other than the Special Taxes and other amounts
deposited to the Special Tax Fund:
(a) Punctual Payment; Against Encumbrances. The District covenants that it will
receive all Special Taxes in trust for the Owners and will instruct the Treasurer to deposit all Special
Taxes with the Trustee immediately upon their apportionment to the District, and the District shall
have no beneficial right or interest in the amounts so deposited except as provided by this Indenture.
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 District.
The District covenants that it will duly and punctually pay or cause to be paid the
principal of and interest on every Bond and Parity 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 the
Parity Bonds and in accordance with this Indenture to the extent that Net Special Taxes and other
amounts pledged hereunder 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, any
Parity Bonds, and this Indenture, and that it will faithfully observe and perform all of the conditions,
covenants and requirements of this Indenture and all Supplemental Indentures and of the Bonds and
any Parity Bonds issued hereunder.
The District will not mortgage or otherwise encumber, pledge or place any charge
upon any of the Net Special Taxes except as provided in this Indenture, and will not issue any
obligation or security having a lien or charge upon the Net Special Taxes superior to or on a parity
with the Bonds, other than Parity Bonds. Nothing herein shall prevent the District from issuing or
incurring indebtedness which is payable from a pledge of Net Special Taxes which is subordinate in
all respects to the pledge of Net Special Taxes to repay the Bonds and the Parity Bonds.
(b) Levy of Special Tax. So long as any Bonds or Parity Bonds issued under this
Indenture are Outstanding, the legislative body of the District covenants to levy the Special Tax in an
amount sufficient, together with other amounts on deposit in the Special Tax Fund and available for
such purpose, to pay (1) the principal of and interest on the Bonds and any Parity Bonds when due,
(2) the Administrative Expenses, and (3) any amounts required to replenish the Reserve Account
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resulting from the delinquency in the payment of scheduled debt service on the Bonds or any Parity
Bonds (collectively, the "Special Tax Requirement "). The District further covenants that it will take
no actions that would discontinue or cause the discontinuance of the Special Tax levy or the
District's authority to levy the Special Tax for so long as the Bonds and any Parity Bonds are
Outstanding.
(c) Commence Foreclosure Proceedings. The District covenants for the benefit
of the Owners of the Bonds and any Parity Bonds that it (i) will commence judicial foreclosure
proceedings against parcels with delinquent Special Taxes in excess of $ by the October I
following the close of each Fiscal Year in which such Special Taxes were due and (ii) will
commence judicial foreclosure proceedings against all parcels with delinquent Special Taxes by the
October I following the close of each Fiscal Year in which it receives Special Taxes in an amount
which is less than 95% of the total Special Tax levied and the amount on deposit in the Reserve
Account is at less than the Proportionate Share of the Reserve Requirement, and (iii) will diligently
pursue such foreclosure proceedings until the delinquent Special Taxes are paid; provided that,
notwithstanding the foregoing, the District may elect to defer foreclosure proceedings on any parcel
so long as the amount in the Reserve Account is at least equal to the Proportionate Share of the
Reserve Requirement. The District may, but shall not be obligated to, advance 'funds from any
source of legally available funds in order to maintain the Reserve Account.
The District covenants that it will deposit the net proceeds of any foreclosure and any
other Delinquency Proceeds in the Special Tax Fund and will apply such proceeds remaining after
the payment of Administrative Expenses to pay any delinquent installments of principal or interest
due on the Bonds and any Parity Bonds, to make current payments of principal and interest on the
Bonds and any Parity Bonds and to replenish any draw on the Reserve Account resulting from the
delinquency in the payment of scheduled debt service on the Bonds or any Parity Bonds.
(d) Payment of Claims. The District 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 Net
Special Taxes or other funds in the Special Tax Fund, or which might impair the security of the
Bonds or any Parity Bonds then Outstanding; provided that nothing herein contained shall require the
District to make any such payments so long as the District in good faith shall contest the validity of
any such claims.
(e) Books and Accounts. The District will keep proper books of records and
accounts, separate from all other records and accounts of the District, in which complete and correct
entries shall be made of all transactions relating to the Project, 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 Trustee or of the Owners of not less than 10% of
the principal amount of the Bonds or the Owners of not less than 10% of any issue of Parity Bonds
then Outstanding or their representatives authorized in writing.
(f) Federal Tax Covenants. Notwithstanding any other provision of this
Indenture, absent an opinion of Bond Counsel that the exclusion from gross income of interest on the
Authority Bonds issued on a tax- exempt basis for federal income tax purposes will not be adversely
affected for federal income tax proposes, the District covenants to comply with all applicable
requirements of the Code necessary to preserve such exclusion from gross income and specifically
covenants, without limiting the generality of the foregoing, as follows:
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(1) Private Activity. The District will take no action or refrain from
taking any action or make any use of the proceeds of the Bonds or any Parity Bonds or of any other
moneys or property which would cause the Authority Bonds issued on a tax - exempt basis for federal
income tax purposes to be "private activity bonds" within the meaning of Section 141 of the Code;
(2) Arbitrage. The District will make no use of the proceeds of the Bonds
or any Parity Bonds or of any other amounts or property, regardless of the source, or take any action
or refrain from taking any action which will cause the Authority Bonds issued on a tax - exempt basis
for federal income tax purposes to be "arbitrage bonds" within the meaning of Section 148 of the
Code;
(3) Federal Guaranty. The District will make no use of the proceeds of
the Bonds or any Parity Bonds or take or omit to take any action that would cause the Authority
Bonds issued on a tax- exempt basis for federal income tax purposes to be "federally guaranteed"
within the meaning of Section 149(b) of the Code;
(4) Hedge Bonds, The District will make no use of the proceeds of the
Bonds or any Parity Bonds or any other amounts or property, regardless of the source, or take any
action or refrain from taking any action that would cause the Authority Bonds issued on a tax - exempt
basis for federal income tax purposes to be considered "hedge bonds" within the meaning of
Section 149(8) of the Code unless the District takes all necessary action to assure compliance with
the requirements of Section 149(g) of the Code to maintain the exclusion from gross income for
federal income tax purposes of interest on the Authority Bonds; and
(5) Other Tax Exempt Issues, The District will not use proceeds of other
tax exempt securities to redeem any Bonds or Parity Bonds without first obtaining the written
opinion of Bond Counsel that doing so will not impair the exclusion from gross income for federal
income tax purposes of interest on the Authority Bonds issued on a tax- exempt basis.
(g) Reduction of Maximum Special Taxes. The District 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 District hereby determines that a reduction in the maximum Special Tax rates
authorized to be levied on parcels in the District below the levels provided in this Section 5.2(g)
would interfere with the timely retirement of the Bonds and Parity Bonds. The District determines it
to be necessary in order to preserve the security for the Bonds and Parity Bonds to covenant, and, to
the maximum extent that the law permits it to do so, the District hereby does covenant, that it shall
not initiate proceedings to reduce the maximum Special "lax rates for the District, unless, in
connection therewith, (i) the District receives a certificate from one or more Independent Financial
Consultants which, when taken together, certify that, on the basis of the parcels of land and
improvements existing in the District as of the July 1 preceding the reduction, the maximum amount
of the Special "Pax which may be levied on then existing Developed Property (as defined in the Rate
and Method of Apportionment then in effect in the District) in each Bond Year for any Bonds and
Parity Bonds Outstanding will equal at least 110% of the sum of the estimated Administrative
Expenses and gross debt service in each Bond Year on all Bonds and Parity Bonds to remain
Outstanding after the reduction is approved, (ii) the District finds that any reduction made under such
conditions will not adversely affect the interests of the Owners of the Bonds and Parity Bonds, and
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(iii) the District is not delinquent in the payment of the principal of or interest on the Bonds or any
Parity Bonds. For purposes of estimating Administrative Expenses for the foregoing calculation, the
Independent Financial Consultants shall compute the Administrative Expenses for the current Fiscal
Year and escalate that amount by two percent (2 %) in each subsequent Fiscal Year.
(h) Covenants to Defend. The District covenants that, in the event that any
initiative is adopted by the qualified electors in the District which purports to reduce the minimum or
the maximum Special Tax below the levels specified in Section 5.2(g) above or to limit the power of
the District to levy the Special Taxes for the proposes set forth in Section 5.2(b) above, it will
commence and pursue legal action in order to preserve its ability to comply with such covenants.
(i) Limitation on Right to Tender Bonds. The District hereby covenants that it
will not adopt any policy pursuant to Section 53344.1 of the Act permitting the tender of Bonds or
Parity Bonds in full payment or partial payment of any Special Taxes unless the District shall have
first received a certificate from an Independent Financial Consultant that the acceptance of such a
tender will not result in the District having insufficient Special Tax revenues to pay the principal of
and interest on the Bonds and Parity Bonds when due.
(j) Further Assurances. The District shall make, execute and deliver any and all
such further agreements, instruments and assurances as may be reasonably necessary or proper to
carry out the intention or to facilitate the performance of this Indenture and for the better assuring
and confirming unto the Owners of the Bonds and any Parity Bonds of the rights and benefits
provided in this Indenture.
(k) Subordinate Debt. Any indebtedness of the District evidenced by ally
subordinated debt and any renewals or extensions thereof (herein called "Subordinated
Indebtedness "), shall at all times be wholly subordinate and junior in right of payment to any and all
indebtedness of the District under this Indenture (herein called "Superior Indebtedness"), Following
an event of default under this Indenture, no Subordinated Indebtedness shall be paid prior to any
Superior Indebtedness in any fiscal year of the District. If the holder of the Subordinated
Indebtedness is a commercial bank, savings bank, savings and loan association or other financial
institution which is authorized by law to accept and hold deposits of money or issue certificates of
deposit, such holder must agree to waive any common law or statutory right of setoff with respect to
any deposits of the District maintained with or held by such holder.
(1) Pledged Net Spccial Taxes. "File District represents it has not heretofore made
a pledge of, granted at a Tien on or security interest in, or made an assignment or sale of the Net
Special Taxes that ranks on a parity with or prior to the pledge granted under this Indenture. The
District, except as may be provided otherwise in this Indenture, shall not hereafter make any pledge
or assignment of, lien on, or security interest in the Net Special Taxes payable senior to or on a parity
with the pledge of Net Special Taxes established under this Indenture.
ARTICLE VI
AMENDMENTS TO INDENTURE
Section 6.1. Supplemental Indentures or Orders Not Requiring Bondowner Consent,
The District may from time to time, and at any time, without notice to or consent of any of the
Bondowners, adopt Supplemental Indentures for any of the following purposes:
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(a) 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 Indenture or in any additional resolution or order, provided
that such action is not materially adverse to the interests of the Bondowners;
(b) to add to the covenants and agreements of and the limitations and the
restrictions upon the District contained in this Indenture, other covenants, agreements, limitations and
restrictions to be observed by the District which are not contrary to or inconsistent with this
Indenture as theretofore in effect or which further secure Bond or Parity Bond payments;
(c) to provide for the issuance of any Parity Bonds, and to provide the terms and
conditions under which such Parity Bonds may be issued, subject to and in accordance with the
provisions of this Indenture;
(d) to modify, amend or supplement this Indenture 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 or any Parity
Bonds then Outstanding; or
(e) 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 District to an amount which is less than 110% of the sum
of estimated Administrative Expenses and principal and interest due in each corresponding future
Bond Year with respect to the Bonds and Parity Bonds Outstanding as of the date of such
amendment; or
(f) to modify, alter, amend or supplement this Indenture in any other respect
which is not materially adverse to the Bondowners.
Section 6.2. Supplemental Indentures or Orders Requiring Bondowner Consent.
Exclusive of the Supplemental Indentures described in Section 6.1, the Owners of not less than a
majority in aggregate principal amount of the Bonds and Parity Bonds Outstanding shall have the
right to consent to and approve the adoption by the District of such Supplemental Indentures as shall
be deemed necessary or desirable by the District, for the purpose of waiving, modifying, altering,
amending, adding to or rescinding, in any particular, any of the terms or provisions contained in this
Indenture; provided, however, that nothing herein shalt 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 or Parity
Bond, (b) a reduction in the principal amount of, or redemption premium on, any Bond or Parity
Bond or the rate of interest thereon, (c) a preference or priority of any Bond or Parity Bond over any
other Bond or Parity Bond, or (d) a reduction in the aggregate principal amount of the Bonds and
Parity Bonds the Owners of which are required to consent to such Supplemental Indenture, without
the consent of the Owners of all Bonds and Parity Bonds then Outstanding,
If at any time the District shall desire to adopt a Supplemental Indenture, which pursuant to
the terms of this Section shall require the consent of the Bondowners, the District shall so notify the
Trustee and shall deliver to the Trustee a copy of the proposed Supplemental Indenture. The Trustee
shalt, at the expense of the District, cause notice of the proposed Supplemental Indenture to be
32
mailed, by first class mail, postage prepaid, to all Bondowners at their addresses as they appear in the
Bond Register (if the Authority or the Authority Trustee on the Authority's behalf is the owner of all
the Bonds, such amendment may be delivered by other communication methods). Such notice shall
briefly set forth the nature of the proposed Supplemental Indenture and shall state that a copy thereof
is on file at the office of the Trustee for inspection by all Bondowners. The failure of any
Bondowners to receive such notice shall not affect the validity of such Supplemental Indenture when
consented to and approved by the Owners of not less than a majority in aggregate principal amount
of the Bonds and Parity Bonds Outstanding as required by this Section. Whenever at any time within
one year after the date of the fast mailing of such notice, the Trustee shall receive an instrument or
instruments purporting to be executed by the Owners of not less than a majority in aggregate
principal amount of the Bonds and Parity Bonds Outstanding, which instrument or instruments shall
refer to the proposed Supplemental Indenture described in such notice, and shall specifically consent
to and approve the adoption thereof by the District substantially in the form of the copy referred to in
such notice as on file with the Trustee, such proposed Supplemental Indenture, when duly adopted by
the District, shall thereafter become a part of the proceedings for the issuance of the Bonds and any
Parity Bonds. In determining whether the Owners of a majority of the aggregate principal amount of
the Bonds and Parity Bonds have consented to the adoption of any Supplemental Indenture, Bonds or
Parity Bonds which are owned by the District or by any person directly or indirectly controlling or
controlled by or under the direct or indirect common control with the District, 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 Indenture and the receipt of consent to any such
Supplemental Indenture from the Owners of not less than a majority in aggregate principal amount of
the Outstanding Bonds and Parity Bonds in instances where such consent is required pursuant to the
provisions of this section, this Indenture shall be, and shall be deemed to be, modified and amended
in accordance therewith, and the respective rights, duties and obligations under this Indenture of the
District and all Owners of Outstanding Bonds and Parity Bonds shall thereafter be determined,
exercised and enforced hereunder, subject in all respects to such modifications and amendments.
The Trustee may in its discretion, but shall not be obligated to, enter into any such
Supplemental Indenture authorized by Sections 6.1 and 6.2 which affects the Trustee's own rights,
duties or immunities under this Indenture or otherwise.
Section 6.3. Notation of Bonds or Parity Bonds; Delivery of Amended Bonds or
Parity Bonds. After the effective date of any action taken as hereinabove provided, the District may
determine that the Bonds or any Parity Bonds may bear a notation, by endorsement in form approved
by the District, as to such action, and in that case upon demand of the Owner of any Outstanding
Bond or Parity Bond at such effective date and presentation of his Bond or Parity Bond for the
purpose at the office of the Trustee or at such additional offices as the Trustee may select and
designate for that purpose, a suitable notation as to such action shall be made on such Bonds or Parity
Bonds. If the District shall so determine, new Bonds or Parity Bonds so modified as, in the opinion
of the District, 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 or Parity Bond at such effective date
such new Bonds or Parity Bonds shall be exchanged at the office of the Trustee or at such additional
offices as the Trustee may select and designate for that purpose, without cost to each Owner of
Outstanding Bonds or Parity Bonds, upon surrender of such Outstanding Bonds or Parity Bonds.
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ARTICLE VII
FISCAL AGENT
Section 7.1. Trustee. MUPG Union Bank, N.A., shall be the Trustee for the Bonds and
any Parity Bonds unless and until another Trustee is appointed by the District hereunder. The
District may, at any dine, appoint a successor Trustee satisfying the requirements of Section 7.2
below for the purpose of receiving all money which the District is required to deposit with the
Trustee hereunder and to allocate, use and apply the same as provided in this Indenture; provided,
however, that the Trustee shall be at all times the same entity as the Authority Trustee.
The Trustee 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
and Parity Bonds for redemption, and to maintain the Bond Register. The Trustee is hereby
authorized to pay the principal of and premium, if any, on the Bonds and Parity 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 and Parity Bonds presented to it for such purposes, to
provide for the cancellation of Bonds and Parity Bonds all as provided in this Indenture, and to
provide for the authentication of Bonds and Parity Bonds, and shall perform all other duties assigned
to or imposed on it as provided in this Indenture. The Trustee shall keep accurate records of all funds
administered by it and all Bonds and Parity Bonds paid, discharged and cancelled by it.
The Trustee is hereby authorized to redeem the Bonds and Parity Bonds when duly presented
for payment at maturity, or on redemption prior to maturity. The Trustee shall cancel all Bonds and
Parity Bonds upon payment thereof in accordance with the provisions of Section 10.1 hereof.
The District shall from time to time, subject to any agreement between the District and the
Trustee then in force, pay to the Trustee compensation for its services, reimburse the 'Trustee for all
its advances and expenditures, including, but not limited to, advances to and fees and expenses of
independent accountants or counsel employed by it in the exercise and performance of its powers and
duties hereunder, and indemnify and save the Trustee, its officers, directors, employees and agents,
harmless from and against costs, damages, claims, expenses and liabilities, including, without
limitation, fees and expenses of its attorneys, not arising from its own negligence or willful
misconduct which it may incur in the exercise and performance of its powers and duties hereunder.
In no event shall the Trustee be liable for any consequential, punitive or special damages. The
foregoing obligation of the District to indemnify the Trustee shall survive the removal or resignation
of the Trustee or the discharge of the Bonds.
Section 7.2. Removal of Trustee. The District may at any time at its sole discretion
remove the Trustee initially appointed, and any successor thereto, by delivering to the Trustee a
written notice of its decision to remove the Trustee and may appoint a successor or successors
thereto; provided that any such successor shall be a bank, association or trust company having a
combined capital (exclusive of borrowed capital) and surplus of at least $75,000,000, and subject to
supervision or examination by federal or state authority. Any removal shall become effective only
upon acceptance of appointment by the successor Trustee. if any bank, association or trust company
appointed as a successor publishes a report of condition at ]cast 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, association or trust company shall be
deemed to be its combined capital and surplus as set forth in its most recent report of condition so
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published. Any removal of the Trustee and appointment of a successor Trustee shall become
effective only upon acceptance of appointment by the successor Trustee and notice being sent by the
successor Trustee to the Bondowners of the successor Trustee's identity and address.
Section 7.3. Resignation of Trustee. The Trustee may at any time resign by giving
written notice to the District and by giving to the Owners notice of such resignation, which notice
shall be sent to the Owners at their addresses appearing in the registration books in the office of the
Trustee. Upon receiving such notice of resignation, the District shall promptly appoint a successor
Trustee satisfying the criteria in Section 7.2 above by an instrument in writing. Any resignation or
removal of the Trustee and appointment of a successor Trustee shall become effective only upon
acceptance of appointment by the successor Trustee. If no successor Trustee shall have been
appointed and have accepted appointment within forty-five (45) days of giving notice of removal or
notice of resignation as aforesaid, the resigning Trustee or any Owner (on behalf of itself and all
other Owners) may petition any court of competent jurisdiction for the appointment of a successor
Trustee, and such court may thereupon, after such notice (if any) as it may deem proper, appoint such
successor Trustee.
Section 7.4. Liability of Trustee. The recitals of 'fact and all promises, covenants and
agreements contained herein and in the Bonds and any Parity Bonds shall be taken as statements,
promises, covenants and agreements ofthe District, and the Trustee assumes no responsibility for the
correctness of the same and makes no representations as to the validity or sufficiency of this
Indenture, the Bonds or any Parity 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 and any
Parity Bonds, or in the certificate of authentication assigned to or imposed upon the Trustee. The
'Trustee shall be under no responsibility or duty with respect to the issuance of the Bonds or any
Parity Bonds for value. The Trustee shall not be liable in connection with the performance of its
duties hereunder, except for its own negligence or willful misconduct.
The Trustee shall be protected in acting upon any notice, resolution, request, consent, order,
certificate, report, Bond, Parity 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 Trustee may consult with counsel,
who may be counsel to the District, 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 Trustee shall not be bound to recognize any person as the Owner of a Bond or Parity
Bond unless and until such Bond or Parity Bond is submitted for inspection, if required, and his title
thereto satisfactorily established, if disputed.
Whenever in the administration of its duties under this Indenture the Trustee 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 Trustee, be deemed to be conclusively proved and
established by a written certificate of the District, and such certificate shall be full warrant to the
Trustee for any action taken or suffered under the provisions of this Indenture upon the faith thereof,
but in its discretion the Trustee may, in lieu thereof, accept other evidence of such matter or may
require such additional evidence as to it may seem reasonable.
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The Trustee 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 Bond Indenture shall require the Trustee 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.
The Trustee shall not be deemed to have knowledge of any default or event of default until an
officer at the Trustee's corporate trust office responsible for the administration of its duties hereunder
shall have actual knowledge thereof or the Trustee shall have received written notice thereof at its
corporate trust office.
The Trustee shall not be considered in breach of or in default in its obligations hereunder or
progress in respect thereto in the event of enforced delay ( "unavoidable delay ") in the performance of
such obligations due to unforeseeable causes beyond its control and without its fault or negligence,
including, but not limited to, Acts of God or of the public enemy or terrorists or acts of a
government.
The Trustee shall have no responsibility or liability with respect to airy information,
statements or recital in any offering memorandum or outer disclosure material prepared or distributed
with respect to the issuance of the Bonds.
The Trustee shall be Under no obligation to exercise any of the rights or powers vested in it
by this Indenture at the request, order or direction of any of the Owners pursuant to the provisions of
this Indenture unless such Owners shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which may be incurred therein or thereby.
The Trustee, prior to the occurrence of an Event of Default and after the curing or waiver of
all Events of Default which may have occurred, undertakes to perform such duties and only such
duties as are specifically set forth in the indenture. In case an Event of Default has occurred (which
has not been cured or waived) the Trustee shall exercise such of the rights and powers vested in it by
the Indenture, and use the same degree of care and skill in accordance with corporate trust industry
standards.
The Trustee agrees to accept and act upon facsimile or electronic transmission of written
instructions and /or directions pursuant to this Indenture provided, however, that: (a) such originally
executed instructions and /or directions shall be signed by a person as may be designated and
authorized to sign for the party signing such instructions and /or directions, and (b) the Trustee shall
have received a current incUmtbeney certificate containing the specimen signature of such designated
person. Any such instructions and directions furnished by electronic transmission shall be in the form
of attachment's in PDP format.
Section 7.5. Merger or Consolidation. Any company into which the Trustee 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 Trustee
may sell or transfer all or substantially all of its corporate trust business, shall be the successor to the
Trustee without the execution or filing of any paper or further act, anything herein to the contrary
notwithstanding.
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ARTICLE VIII
EVENTS OF DEFAULT; REMEDIES
Section 8.1. Events of Default. Any one 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 or Parity 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 or Parity
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 District in the
observance of any of the agreements, conditions or covenants on its part contained in this Indenture,
the Bonds or any Parity Bonds, and such default shall have continued for a period of 30 days after the
District shall have been given notice in writing of such default by the Trustee or the Owners of 25%
in aggregate principal amount of the Outstanding Bonds and Parity Bonds.
The Trustee agrees to give notice to the Owners immediately upon the occurrence of an event
of default under (a) or (b) above and within 30 days of the Trustee's knowledge of an event of default
under (c) above.
Section 8.2. Remedies of Owners. Upon the occurrence of an Event of Default, the
Trustee may pursue any available remedy at law or in equity to enforce the payment of the principal
of, premium, if any, and interest on the Outstanding Bonds and Parity Bonds, and to enforce any
rights of the Trustee under or with respect to this Indenture, including:
(a) By mandamus or other suit or proceeding at law or in equity to enforce his
rights against the District and any of the members, officers and employees of the District, and to
compel the District or any such members, officers or employees to perform and cant' out their duties
under the Act and their agreements with the Owners as provided in this hrdenhure;
(b) By suit in equity to enjoin any actions or things which are unlawful or violate
the rights of the Owners; or
(c) By a suit in equity to require the District and its members, officers and
employees to account as the trustee of an express trust.
If an Event of Default shall have occurred and be continuing and if requested so to do by the
Owners of at least twenty -five percent (25 %) in aggregate principal amount Outstanding Bonds and
Parity Bonds and is indemnified to its satisfaction, the Trustee shall be obligated to exercise such one
or more of the rights and powers conferred by this Article VIII, as the Trustee, being advised by
counsel, shall deem most expedient in the interests of the Owners of the Bonds and Parity Bonds.
No remedy herein conferred upon or reserved to the Trustee or 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
IRA
otherwise, and may be exercised without exhausting and without regard to any other remedy
conferred by the Act or any other law.
The Bonds and any Parity Bonds are not subject to acceleration prior to maturity.
Section 8.3. Application of Revenues and Other Foods After Default. All amounts
received by the Trustee pursuant to any right given or action taken by the Trustee under the
provisions of this Indenture relating to the Bonds and Parity Bonds shall be applied by the Trustee in
the following order upon presentation of the several Bonds and Parity Bonds:
First, to the payment of the fees, costs and expenses of the Trustee in declaring such
Event of Default and in carrying out the provisions of this Article V111, including reasonable
compensation to its agents, attorneys and counsel, and to the payment of all other outstanding fees
and expenses of the Trustee; and
Second, to the payment of the whole amount of interest on and principal of the Bonds
and Parity Bonds then due and unpaid, with interest on overdue installments of principal and interest
to the extent permitted by law at the net effective rate of interest then borne by the Outstanding
Bonds and Parity Bonds; provided, however, that in the event such amounts shall be insufficient to
pay in full the full amount of such interest and principal, then such amounts shall be applied in the
following order of priority:
(a) first to the payment of all installments of interest on the Bonds and Parity
Bonds then due and unpaid on a pro rata basis based on the total amount then due and owing,
(b) second, to the payment of all installments of principal, including Sinking
Fund Payments, of the Bonds and Parity Bonds then due and unpaid on a pro rata basis based on the
total amount then due and owing, and
(c) third, to the payment of interest on overdue installments of principal and
interest on the Bonds and Parity Bonds on a pro rata basis based on the total amount then due and
owing.
Section 8.4. Power of Trustee to Control Proceedings. hi the event that the Trustee,
upon the happening of an Event of Default, shall have taken any action, by judicial proceedings or
Otherwise, pursuant to its duties hereunder, whether upon its own discretion or upon the request of
the Owners of twenty-five percent (25 %) in aggregate principal amount of the Bonds and Parity
Bonds then Outstanding, it shall have full power, in the exercise of its discretion for the best interests
of the Owners of the Bonds and Parity Bonds, with respect to the continuance, discontinuance,
withdrawal, compromise, settlement or other disposal of such action; provided, however, that the
Trustee shall not, unless there no longer continues an Event of Default, discontinue, withdraw,
compromise or settle, or otherwise dispose of any litigation pending at law or in equity, if at the time
there has been filed with it a written request signed by the Owners of a majority in aggregate
principal amount of the Outstanding Bonds and Parity Bonds hereunder opposing such
discontinuance, withdrawal, compromise, settlement or other such litigation. Any suit, action or
proceeding which any Owner of Bonds or Parity Bonds shall have the right to bring to enforce any
right or remedy hereunder may be brought by the Trustee for the equal benefit and protection of all
Owners of Bonds and Parity Bonds similarly situated and the Trustee is hereby appointed (and the
successive respective Owners of the Bonds and Parity Bonds issued hereunder, by taking and holding
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the same, shall be conclusively deemed so to have appointed it) the true and lawful attorney in fact of
the respective Owners of the Bonds and Parity Bonds for the purposes of bringing any such suit,
action or proceeding and to do and perform any and all acts and things for and on behalf of the
respective Owners of the Bonds and Parity Bonds as a class or classes, as may be necessary or
advisable in the opinion of the Trustee as such attorney -in -fact.
Section 8.5. Appointment of Receivers. Upon the occurrence of an Event of Default
hereunder, and upon the filing of a suit or other commencement ofjudicial proceedings to enforce the
rights of the Trustee and of the Owners of the Bonds and Parity Bonds under this Indenture, the
Trustee shall be entitled, as a matter of right, to the appointment of a receiver or receivers of the Net
Special Taxes and other amounts pledged hereunder, pending such proceedings, with such powers as
the court making such appointment shall confer.
Section 8.6. Non - Waiver. Nothing in this Article VIII or in any other provision of this
Indenture, or in the Bonds or the Parity Bonds, shall affect or impair the obligation of the District,
which is absolute and unconditional, to pay the interest on and principal of the Bonds and Parity
Bonds to the respective Owners of the Bonds and Parity Bonds at the respective dates of maturity, as
herein provided, out of the Net Special Taxes and other moneys herein pledged for such payment.
A waiver of any default or breach of duty or contract by the Trustee or any Owners 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 of the Trustee or any Owner of any of the
Bonds or Parity Bonds 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 Trustee or the Owners by the Act or by this
Article VIII may be enforced and exercised fronn time to time and as often as shall be deemed
expedient by the Trustee or the Owners, as the case may be.
Section 8.7. Limitations on Rights and Remedies of Owners. No Owner of any Bond
or Parity Bond issued hereunder shall have the right to institute any suit, action or proceeding at law
or in equity, for any remedy under or upon this Indenture, unless (a) such Owner shall have
previously given to the Trustee written notice of the occurrence of an Event of Default; (b) the
Owners of a majority in aggregate principal annount of all the Bonds and Parity Bonds then
Outstanding shall have made written request upon the Trustee to exercise the powers hereinbefore
granted or to institute such action, suit or proceeding in its own name; (c) said Owners shall have
tendered to the Trustee indemnity reasonably acceptable to the Trustee against the costs, expenses
and liabilities to be incurred in compliance with such request; and (d) the Trustee shall have refused
or omitted to comply with such request for a period of sixty (60) days after such written request shall
have been received by, and said tender of indemnity shall have been made to, the Trustee.
Such notification, request, tender of indemnity and refusal or omission are hereby declared,
in every case, to be conditions precedent to the exercise by any Owner of Bonds and Parity Bonds of
any remedy hereunder; it being understood and intended that no one or more Owners of Bonds and
Parity Bonds shall have any right in any manner whatever by his or their action to enforce any right
under this Indenture, except in the manner herein provided, and that all proceedings at law or in
equity to enforce any provision of this Indenlw-e shall be instituted, had and maintained in the
manner herein provided and for the equal benefit of all Owners of the Outstanding Bonds and Parity
Bonds.
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The right of any Owner of any Bond and Parity Bond to receive payment of the principal of
and interest and premium (if any) on such Bond and Parity Bond as hcrein provided or to institute
suit for the enforcement of any such payment, shall not be impaired or affected without the written
consent of such Owner, notwithstanding the foregoing provisions of this Section or any other
provision of this Indenture.
Section 8.8. Termination of Proceedings. In case the Trustee shall have proceeded to
enforce any right under this Indenture by the appointment of a receiver or otherwise, and such
proceedings shall have been discontinued or abandoned for any reason, or shall have been
determined adversely, then and in every such case, the District, the Trustee and the Owners shall be
restored to their former positions and rights hereunder, respectively, with regard to the property
subject to this Indenture, and all rights, remedies and powers of the Trustee shall continue as if no
such proceedings had been taken.
ARTICLE IX
DEFEASANCE AND PARITY BONDS
Section 9.1. Defeasance. If the District shall pay or cause to be paid, or there shall
otherwise be paid, to the Owner of an Outstanding Bond or Parity Bond the interest due thereon and
the principal thereof, at the times and in the manner stipulated in this Indenture or any Supplemental
Indenture, then the Owner of such Bond or Parity Bond shall cease to be entitled to the pledge of Net
Special Taxes, and, other than as set forth below, all covenants, agreements and other obligations of
the District to the Owner of such Bond or Parity Bond under this Indenture and any Supplemental
Indenture relating to such Parity Bond shall thereupon cease, terminate and become void and be
discharged and satisfied. In the event of a defeasance of all Outstanding Bonds and Parity Bonds
pursuant to this Section, the Trustee shall execute and deliver to the District all such instruments as
may be desirable to evidence such discharge and satisfaction, and the Trustee shall pay over or
deliver to the District's general fund all money or securities held by it pursuant to this Indenture
which are not required for the payment of the principal of, premium, if any, and interest due on such
Bonds and Parity Bonds.
Any Outstanding Bond or Parity Bond shall be deemed to have been paid within the meaning
expressed in the first paragraph of this Section if such Bond or Parity Bond is paid in any one 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 or Parity Bond, as and when the same become due and payable;
(b) by depositing with the Trustee, in trust, at or before maturity, money which,
together with the amounts then on deposit in the Special Tax Fund (exclusive of the Administrative
Expense Fund) and available for such purpose, is fully sufficient to pay the principal of, premium, if
any, and interest on such Bond or Parity Bond, as and when the same shall become due and payable;
or
(c) by depositing with the Trustee or another escrow bank appointed by the
District, in trust, Defeasance Securities, in which the District may lawfully invest its money, in such
amount as will be sufficient, together with the interest to accrue thereon and moneys then on deposit
in the Special Tax Fund (exclusive of the Administrative Expense Fund) and available for such
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purpose, together with the interest to accrue thereon, to pay and discharge the principal of', premium,
if any, and interest on such Bond or Parity Bond, as and when the same shall become due and
payable;
then, at the election of the District, and notwithstanding that any Outstanding Bonds and Parity
Bonds shall not have been surrendered for payment, all obligations of the District under this
Indenture and any Supplemental Indenture with respect to such Bond or Parity Bond shall cease and
terminate, except for the obligation of the Trustee to pay or cause to be paid to the Owners of any
such Bond or Parity Bond not so surrendered and paid, all suns due thereon. Notice of such election
shall be filed with the Trustee not Tess than ten days prior to the proposed defeasance date, or such
shorter period of time as may be acceptable to the Trustee. In connection with a defeasance under (b)
or (c) above, there shall be provided to the District 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 Trustee or the escrow bank to pay and discharge the principal
of, premium, if any, and interest on all Outstanding Bonds and Parity 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 or Parity Bonds being defeased have been legally defeased in accordance with this
Indenture and any applicable Supplemental Indenture.
Upon a defeasance, the Trustee, upon request of the District, shall release the rights of the
Owners of such Bonds and Parity Bonds which have been defeased under this Indenture and any
Supplemental Indenture and execute and deliver to the District all such instruments as may be
desirable to evidence such release, discharge and satisfaction. Iu the case of a defeasance hereunder
of all Outstanding Bonds and Parity Bonds, the Trustee shall pay over or deliver to the District any
funds held by the Trustee at the time of a defeasance, which are not required for the purpose of
paying and discharging the principal of or interest on the Bonds and Parity Bonds when due. The
Trustee shall, at the written direction of the District, mail, first class, postage prepaid, a notice to the
Bondowners whose Bonds or Parily Bonds have been defeased, in the form directed by the District,
stating that the defeasance has occurred.
Section 9.2. Conditions for the Issuance of Parity Bonds and Other Additional
Indebtedness. [The District may at any time after the issuance and delivery of the Bonds hereunder
issue Parity Bonds payable from the Net 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 and any other Parity Bonds theretofore issued hereunder or under any
Supplemental lndenture; provided, however, that Parity Bonds may only be issued for the purpose of
refunding all or a portion of the Bonds or any Parity Bonds then Outstanding. The District shall not
incur any additional bonded indebtedness payable from Net Special Taxes, including any additional
bonded indebtedness subordinate to the Bonds, except for Parity Bonds which satisfy the
requirements of this Indenture set forth in Section 9.2 thereof. Parity Bonds which may only be
issued to effect a partial refunding will be issued subject to the following additional specific
conditions, which are hereby made conditions precedent to the issuance of any such Parity Bonds:
(a) The District shall be in compliance with all covenants set forth in this
Indenture and any Supplemental Indenture then in effect and a certificate of the District to that effect
shall have been filed with the Trustee; provided, however, that Parity Bonds may be issued
notwithstanding that the District is not in compliance with all such covenants so long as immediately
41
following the issuance of such Parity Bonds the District will be in compliance with all such
covenants.
(b) The issuance of such Parity Bonds shall have been duly authorized pursuant
to the Act and all applicable laws, and the issuance of such Parity Bonds shall have been provided for
by a Supplemental hndenture duly adopted by the District which shall specify the following:
(1) The purpose for which such Parity Bonds are to be issued and the
fund or funds into which the proceeds thereof are to be deposited, including a provision requiring the
proceeds of such Parity Bonds to be applied solely for the purpose of refunding any Outstanding
Bonds or Parity Bonds, including payment of all costs and the funding of all reserves incidental to or
connected with such refunding;
(2) The authorized principal amount of such Parity Bonds;
(3) The date and the maturity date or dates of such Parity Bonds;
provided that (i) each maturity date shall fall oil a September 1, (ii) all such Parity Bonds of like
maturity shall be identical in all respects, except as to number, and (iii) fixed serial maturities or
Sinking Fund Payments, or any combination thereof, shall be established to provide for the
retirement of all such Parity Bonds on or before their respective maturity dates;
(4) The description of the Parity Bonds, the place of payment thereof and
the procedure for execution and authentication;
(5) The denominations and method of numbering of such Parity Bonds;
(6) The amount and due date of each mandatory Sinking Fund Payment,
if any, for such Parity Bonds;
(7) The amount, if any, to be deposited from the proceeds of such Parity
Bonds in the Reserve Account to increase the amount therein to the Proportionate Share;
(8) The form of such Parity Bonds; and
(9) Such other provisions as are necessary or appropriate and not
inconsistent with this Indenture.
(c) The District shall have received the following documents or money or
securities, all of such documents dated or certified, as the case may be, as of the date of delivery of
such Parity Bonds by the Trustee (unless the Trustee shall accept any of such documents hearing a
prior date):
(1) A certified copy of the Supplemental Indenture authorizing the
issuance of such Parity Bonds;
(2) A written request of the District as to the delivery of such Parity
Bonds;
(3) An opinion of Bond Counsel and /or general counsel to the District to
the effect that (a) the District has the right and power under the Act to adopt this Indenture and the
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Supplemental Indentures relating to such Parity Bonds, and this indenture and all such Supplemental
Indentures have been duly and lawfully adopted by the District, are in lull force and effect and are
valid and binding upon the District and enforceable in accordance with their terms (except as
enforcement may be limited by bankruptcy, insolvency, reorganization and other similar laws
relating to the enforcement of creditors' rights); (b) this Indenture creates the valid pledge which it
purports to create of the Net Special Taxes and other amounts as provided in this Indenture, subject
to the application thereof to the purposes and on the conditions permitted by this Indenture; and
(c) such Parity Bonds are valid and binding limited obligations of the District, enforceable in
accordance with their terms (except as enforcement may be limited by bankruptcy, insolvency,
reorganization and other similar laws relating to the enforcement of creditors' rights) and the terms of
this Indenture and all Supplemental Indentures thereto and entitled to the benefits of this Indenture
and all such Supplemental Indentures, and such Parity Bonds have been duly and validly authorized
and issued in accordance with the Act (or other applicable laws) and this Indenture and all such
Supplemental Indentures.
(4) A certificate of the District containing such statements as may be
reasonably necessary to show compliance with the requirements of this Indenture;
(5) A certificate of an Independent Financial Consultant certifying that in
each Bond Year the Annual Debt Service on the Bonds and Parity Bonds to remain Outstanding
following the issuance of the Parity Bonds proposed to be issued is less than the Annual Debt Service
on the Bonds and Parity Bonds Outstanding prior to the issuance of such Parity Bonds;
(6) Such further documents, money and securities as are required by the
provisions of this Indenture and the Supplemental Indenture providing for the issuance of such Parity
Bonds and
(d) No Event of Default shall have occurred and be continuing with respect to the
Bonds or the Authority Bonds.]
ARTICLE X
MISCELLANEOUS
Section 10.1. Cancellation of Bonds and Parity Bonds. All Bonds and Parity Bonds
surrendered to the Trustee for payment upon maturity or for redemption shall be upon payment
therefor, and any Bond or Parity Bond purchased by the District as authorized herein and delivered to
the Trustee for such purpose shall be, cancelled forthwith and shall not be reissued. The Trustee
shall destroy such Bonds and Parity Bonds, as provided by law, and furnish to the District 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 Indenture
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 or Parity Bonds shall be sufficient for the purposes of this
Indenture (except as otherwise herein provided), if made in the following manner:
43
(a) 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 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.
(b) As to any Bond or Parity 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 or Parity 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 or Parity Bond and the interest thereon to the extent of the sum or sums to
be paid. Neither the District nor the Trustee shall be affected by any notice to the contrary.
Nothing contained in this Indenture shall be construed as limiting the Trustee or the District
to such proof, it being intended that the Trustee or the District may accept any other evidence of the
matters herein stated which the Trustee or the District may deem sufficient. Any request or consent
of the Owner of any Bond or Parity Bond shall bind every future Owner of the same Bond or Parity
Bond in respect of anything done or suffered to be done by the Trustee or the District in pursuance of
such request or consent.
Section 10.3. Unclaimed Moneys. Anything in this Indenture to the contrary
notwithstanding, any money held by the Trustee or the Trustee in trust for the payment and discharge
of any of the Outstanding Bonds and Parity Bonds which remain unclaimed for two years after the
date when such Outstanding Bonds or Parity Bonds have become due and payable, if such money
was held by the Trustee or the Trustee in trust at such date, or for two years after the date of deposit
of such money if deposited with the Trustee or the Trustee in trust after the date when such
Outstanding Bonds or Parity Bonds become due and payable, shall be repaid by the Trustee or the
Trustee to the District, as its absolute property and free from trust, and the Trustee or the Trustee
shall thereupon be released and discharged with respect thereto and the Owners shall look only to the
District for the payment of such Outstanding Bonds or Parity Bonds; provided, however, that, before
being required to make any such payment to the District, the Trustee at the written request of the
District or the Trustee shall, at the expense of the District, cause to be mailed by first -class mail,
postage prepaid, to the registered Owners of such Outstanding Bonds or Parity Bonds at their
addresses as they appear on the registration books of the Trustee 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 District.
Section 10.4. Provisions Constitute Contract. The provisions of this Indenture shall
constitute a contract between the District and the Bondowners and the provisions hereof shall be
construed in accordance with the Taws of the State of California.
It) 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 Trustee, then the District, the Trustee 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.
44
After the issuance and delivery of the Bonds this Indenture shall be irrepealable, but shall be
subject to modifications to the extent and in the manner provided in this Indenture, 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 District from making contracts or creating bonded or other indebtedness payable from a
pledge of the Net Special Taxes which is subordinate to the pledge hereunder, or which is payable
from the general fund of the District or from taxes or any source other than the Net Special Taxes and
other amounts pledged hereunder.
Section 10.6. Further Assurances. The District will adopt, make, execute and deliver any
and all such further resolutions, instruments and assurances as may be reasonably necessary or proper
to cant' out the intention or to facilitate the performance of this Indenture, and for the better assuring
and confirming unto the Owners of the Bonds or any Parity Bonds the rights and benefits provided in
this Indenture.
Section 10.7. Severability. If any covenant, agreement or provision, or any portion
thereof, contained in this Indenture, or the application thereof to any person or circumstance, is held
to be unconstitutional, invalid or unenforceable, the remainder of this Indenture 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 Indenture, the Bonds and any
Parity 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 District with respect to the
Bonds or this Indenture shall be mailed, first class , postage prepaid, or personally delivered to the
Director of Administrative Services of the City, 130 South Main Street, Lake Elsinore, CA 92530,
and all notices to the Trustee shall be sent via courier or fax or electronic transmission or mailed,
first class, postage prepaid, or personally delivered to the Trustee, MUFG Union Bank, N.A., 120
South San Pedro Street, 4th Floor, Los Angeles, CA 90012, Attention: Corporate Trust Services,
fax: 213- 972 -5694, email: melonee.young@unionbank.com with a copy to: AeeountAdminishation-
CoruorateTrusta unionbank.com. Any such notices or other communications furnished by electronic
transmission shall be in the form of attachments in PDT format.
45
IN WITNESS WHEREOF, CITY OF LAKE ELSINORE COMMUNITY FACILITIES
DISTRICT NO. L ) has caused this Bond Indenture to be signed by its Mayor
and Clerk, and MUFG UNION BANK, N.A. in token of its acceptance of the duties of the 'trustee
created hereunder, has caused this Bond Indenture to be signed in its corporate name by its officer
identified below, all as of the day and year first above written.
ATTEST:
City Clerk of the City of Lake Elsinore
CITY OF LAKE ELSINORE COMMUNITY
FACILITIES DISTRICT NO.
Mayor of the City of Lake Elsinore
MUFG UNION BANK, N.A., as Trustee
By:
Its:
S -1
Authorized Officer
EXHIBIT A
FORM OF 2015 SPECIAL TAX REFUNDING BOND
No. $[PRINCIPAL AMOUNT]
UNITED STATES OF AMERICA
STATE OF CALIFORNIA
COUNTY OF RIVERSIDE
CITY OF LAKE ELSINORE
COMMUNITY FACILITIES DISTRICT NO. (_
2015 SPECIAL TAX REFUNDING BOND
INTEREST RATE: MATURITY DATE: DATED DATE:
% September 1, 20 2015
REGISTERED OWNER: MUFG UNION BANK, N.A., as Trustee under that certain Indenture
of Trust dated as of 1, 2015 by and between the Lake
Elsinore Public Financing Authority and MUFG Union Bank, N.A.
PRINCIPAL AMOUNT:
NO /100 DOLLARS
ND
CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO.
( ) (the "District') situated in the County of Riverside, State of California, FOR
VALUE RECEIVED, hereby promises to pay, solely from certain amounts held under the Indenture
(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 I and the
final maturity date of the Bonds (each an "Interest Payment Date"). commencing [September 1,
2015] at the Interest Rate set forth above, until the Principal A111onllt hereof is paid or made available
for payment. Except as otherwise provided in the Indenture, the principal of and premium, if any, on
L"
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 the Trustee (as such
term is defined in the Indentwre), initially MUFG Union Bank, N.A. (the "Trustee "). Interest on this
Bond shall be paid by check of the Trustee mailed, by first class mail, postage prepaid, or in certain
circumstances described in the Indenture by wire transfer to an account within the United States of
America, to the Registered Owner hereof as of the close of business 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 Trustee.
This Bond is one of a duly authorized issue of "City of Lake Elsinore Community Facilities
District No. _ ( ) 2015 Special Tax Refunding Bonds" (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 certain public facilities], refinancing outstanding special tax bonds of
the District, funding a reserve account and paying certain costs related to the issuance of the Bonds.
The issuance of tite Bonds and the terms and conditions thereof are provided for by a resolution
adopted by the City Council of the City, acting in its capacity as the legislative body of the District
(the "Legislative Body "), on , 2015, and a Bond Indenture, dated as of_ 1, 2015, by
and between the District and the Trustee, executed in connection therewith (the "Indenture "), and this
reference incorporates the Indenture herein, and by acceptance hereof the Registered Owner of this
Bond assents to said terms and conditions. The Indenture is adopted under and this Bond is issued
under, and both are to be construed in accordance with, the laws of the State of California.
Pursuant to the Act and the Indenture, the principal of, premium, if any, and interest on this
Bond are payable solely from the portion (the "Net Special Taxes ") of the annual special taxes
authorized under the Act to be levied and collected within the District (the "Special Taxes ") and
certain other amounts pledged to the repayment of the Bonds as set forth in the Indenture. Any
amounts for the payment hereof shall be limited to the Net Special Taxes pledged and collected,
which include foreclosure proceeds received following a default in payment of the Special Taxes and
other amounts deposited to the Special Tax Fund established under the Indenture, except to the extent
that other provision for payment has been made by the Legislative Body, as may be permitted by law.
The District has covenanted for the benefit of the owners of the Bonds that under certain
circumstances described in the Indenture it will commence and diligently pursue to completion
appropriate foreclosure proceedings in the event of delinquencies of Special 'fax installments levied
for payment of principal and interest on the Bonds.
The Bonds may be redeemed, at the option of the District from any source of funds, on any
Interest Payment Date on or after September 1, 20 , in whole, or in part from such maturities as are
selected by the District and by lot within a maturity, at the a redemption price equal to the principal
amount thereof, together with accrued interest to the date of redemption, without premium.
The Bonds maturing on September 1, 20 shall be called before maturity and redeemed,
from Sinking Fund Payments deposited into the Principal Account, on September 1, 20 , on each
September I thereafter prior to maturity, in accordance with the schedule of Sinking Fund Payments
set forth in the Indenture at a redemption price equal to the principal amount thereof, plus accrued
interest to the redemption date, without premium.
The Bonds are subject to extraordinary redemption as a whole, or in part on a pro rata basis
among maturities, on any Interest Payment Date, and shall be redeemed by tine Trustee, from
FAIM
Prepayments deposited to the Redemption Account at the following redemption prices, expressed as
a percentage of the principal amount to be redeemed, together with accrued interest to the redemption
date:
Redemption Dates Premium
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 45 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 Trustee 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 District and the Trustee 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
Indenture. 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 Trustee, but only in the manner, subject to
the limitations and upon payment of the charges provided in the Indenture, 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 Trustee 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 District 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 Indenture.
THE BONDS DO NOT CONSTITUTE OBLIGATIONS OF THE CITY OF LAKE
ELSINORE OR OF THE DISTRICT FOR WHICH THE CITY OF LAKE ELSINORE OR THE
DISTRICT 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 DISTRICT PAYABLE FROM
THE PORTION OF THE SPECIAL TAXES AND OTHER AMOUNTS PLEDGED UNDER THE
INDENTURE BUT ARE NOT A DEBT OF THE CITY OF LAKE ELSINORE, THE STATE OF
A -3
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 Trustee.
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 amount of this Bond, together with all other indebtedness of the District, does not
exceed any debt limit prescribed by the laws or Constitution of the State of California.
IN WITNESS WHEREOF, City of Lake Elsinore Community Facilities District No.
( ._ ) has caused this Bond to be dated as of , 2015, to be signed on behalf of
the District by the Mayor by his facsimile signature and attested by the facsimile signature of the City
Clerk.
Mayor of the City of Lake Elsinore
ATTEST:
City Clerk of the City of Lake Elsinore
[FORM OF FISCAL AGENT'S CERTIFICATE
OF AUTHENTICATION AND REGISTRATION]
This is one of the Bonds described in the within - defined Indenture.
Dated: .21015 MUFG UNION BANK, N.A., as Trustee
By:
Its: Authorized Officer
A -4
(FORM OF LEGAL OPINION]
The following is a true copy of the opinion rendered by Stradling Yocca Carlson & Rauth, a
Professional Corporation, in connection with the issuance of, and dated as of the date of the original
delivery of, the Bonds. A signed copy is on file in my office.
City Clerk of the City of Lake Elsinore
[FORM OF ASSIGNMENT]
For value received the undersigned do(es) hereby sell, assign and transfer unto
whose tax identification number is
the within - mentioned registered Bond and hereby irrevocably constitute(s) and appoint(s)
attorney to transfer the same on the books of the Trustee with full power of substihrtion in the
premises.
Dated:
Signature guaranteed:
NOTE: Signature guarantee shall be made by a
guarantor institution participating in the
Securities "Transfer Agents Medallion Program or
in such other guarantee program acceptable to
the Trustee.
NOTE: The signatures(s) on this Assignment
must correspond with the name(s) as written on
the face of the within Bond in every particular
without alteration or enlargement or any change
whatsoever.
A -5
S7radling Yocca Carlson & Rmah
Diafi (?1'213115
LOCAL OBLIGATIONS PURCHASE AGREEMENT
This LOCAL OBLIGATIONS PURCHASE AGREEMENT (this "Purchase Agreement "),
dated _, 2015, is by and among the following parties:
(i) Lake Elsinore Public Financing Authority, a joint exercise of powers authority
duly organized and existing under and by virtue of the laws of the State of California (the
"Authority "),
(ii) City of Lake Elsinore Community Facilities District No. 2004 -3 (Rosetta
Canyon) ( "CFD No. 2004 -3 "), a community facilities district organized and existing under the
Mello -Roos Act Community Facilities Act of 1982, (the "Mello -Roos Act") with respect to its
Improvement Area No. 1;
(iii) CFD No. 2004 -3 with respect to its Improvement Area No. 2;
(iv) City of Lake Elsinore Community Facilities District No. 2005 -6 (City Center
Townhomes) (`CFD No. 2005 -6 "), a community facilities district organized and existing under the
Mello -Roos Act;
(v) City of Lake Elsinore Community Facilities District No. 2005 -1 (Serenity) (`CFD
No. 2005 -1 "), a community facilities district organized and existing under the Mello -Roos Act;
(vi) City of Lake Elsinore Community Facilities District No. 2005 -2 (Alberhill
Ranch) ( "CFD No. 2005 -2 "), a community facilities district organized and existing under the Mello -
Roos Act with respect to its Improvement Area A:
(vii) City of Lake Elsinore Community Facilities District No. 2006 -2 (Viscaya) (`CFD
No. 2006 -2 "), a community facilities district organized and existing under the Mello -Roos Act;
(viii) City of Lake Elsinore Community Facilities District No. 2003 -2 (Canyon Hills)
(`CFD No. 2003 -2 "), a community facilities district organized and existing under the Mello -Roos
Act;
(ix) City of Lake Eslinore Community Facilities District No. 95 -1 (Lake Elsinore
City Center Public Improvements) (`CFD No. 95 -1" and collectively with CFD No. 2004 -3, CFD
No. 2005 -6, CFD No. 2005 -1, CFD No. 2005 -2, CFD No. 2006 -2 and CFD No. 2003 -2, the
"CI-Ds"), a community facilities district organized and existing under the Mello -Roos Act;
IVITNESSETH:
WHEREAS, the Authority is a joint exercise of powers authority duly organized and
existing under the provisions of Articles 1 through 4 (commencing with Section 6500) of Chapter 5
of Division 7 of Title 1 of the Government Code of the State of California (the "Act'), and is
authorized pursuant to Article 4 of the Act (the "Bond Law ") to borrow money for the purpose of
financing the acquisition of bonds, notes and other obligations to provide financing or refinancing for
public capital improvements of local agencies within the State of California;
WHEREAS, the CFDs are issuing the following bonds (each referred to herein as a series of
"CFD Bonds" and together as the "Local Obligations ") pursuant to the following Bond Indentures
(each, a `Bond Indenture," and collectively for all CFDs, the `Bond Indentures, ") to refund the
following outstanding bonds (the "Prior Bonds') and to finance certain public improvements, as
applicable:
(a) $ City of Lake Elsinore Community Facilities District No. 2004 -3
(Rosetta Canyon) Improvement Area No. 1 2015 Special Tax Refunding Bonds (the "CFD No. 2004-
3-1 Bonds ") being issued by CFD No. 2004 -3 to advance refund the outstanding City of Lake
Elsinore Community Facilities District No. 2004 -3 (Rosetta Canyon) Special Tax Bonds
(Improvement Area No. 1) 2005 Series A and to finance certain public improvements, pursuant to a
Bond Indenture, dated as of 1, 2015, by and between CFD No. 2004 -3 and MUFG Union
Bank, N.A.;
(b) $ City of Lake Elsinore Community Facilities District No. 2004 -3
(Rosetta Canyon) Improvement Area No. 2 2015 Special Tax Refunding Bonds (the "CFD No. 2004-
3-2 Bonds ") being issued by CFD No. 2004 -3 to refund the outstanding City of Lake Elsinore
Community Facilities District No. 2004 -3 (Rosetta Canyon) Special Tax Bonds (Improvement Area
No. 2) 2006 Series A and to finance certain public improvements, pursuant to a Bond Indenture,
dated as of 1, 2015, by and between CFD No. 2004 -3 and MUFG Union Bank, N.A.;
(e) $ City of Lake Elsinore Community Facilities District No. 2005 -6 (City
Center Townhomes) 2015 Special Tax Refunding Bonds (the "CFD No. 2005 -6 Bonds ") being
issued by CFD No. 2005 -6 to refund the outstanding City of Lake Elsinore Community Facilities
District No. 2005 -6 (City Center Townhomes) Special Tax Bonds 2006 Series A pursuant to a Bond
Indenture, dated as of 1, 2015, by and between CFD No. 2005 -6 and MUFG Union Bank,
N.A.;
(d) $ City of Lake Elsinore Community Facilities District No. 2005 -1
(Serenity) 2015 Special Tax Refunding Bonds (the "CFD No. 2005 -1 Bonds ") being issued by CFD
No. 2005 -1 to refund the outstanding City of Lake Elsinore Community Facilities District No. 2005-
1 (Serenity) Special Tax Bonds 2006 Series A and to finance certain public improvements, pursuant
to a Bond Indenture, dated as of 1, 2015, by and between CFD No. 2005 -1 and MUFG Union
Bank, N.A.;
(e) $ City of Lake Elsinore Community Facilities District No. 2005 -2
(Alberhill Ranch) Improvement Area A 2015 Special Tax Refunding Bonds (the "CFD No. 2005 -2
Bonds ") being issued by CFD No. 2005 -2 to refund the outstanding City of Lake Elsinore
Community Facilities District No. 2005 -2 (Alberhill Ranch) Special Tax Bonds (Improvement Area
A) 2005 Series A pursuant to a Bond Indenture, dated as of 1, 2015, by and between CFD No.
2005 -2 and MUFG Union Bank, N.A.;
(f) $ City of Lake Elsinore Community Facilities District No. 2006 -2
(Viscaya) 2015 Special Tax Refunding Bonds (the "CFD No. 2006-2 Bonds') being issued by CFD
No. 2006 -2 to refund the outstanding City of Lake Elsinore Community Facilities District No. 2006-
2 (Viscaya) Special Tax Bonds 2006 Series A pursuant to a Bond Indenture, dated as of 1,
2015, by and between CFD No. 2006 -2 and MUFG Union Bank, N.A.;
2
(g) $_ _ City of' Lake Elsinore Community Facilities District No. 2003 -2
(Canyon Hills) Improvement Area B 2015 Special Tax Refunding Bonds (the "CFD No. 2003 -2
Bonds ") being issued by CFD No. 2003 -2 to refund the outstanding City of Lake Elsinore
Community Facilities District No. 2003 -2 (Canyon Hills) Special Tax Bonds (Improvement Area B)
2006 Series A and to finance certain public improvements, pursuant to a Bond Indenture, dated as of
1, 2015, by and between CTD No. 2003 -2 and MUFG Union Bank, N.A.;
(h) $___ City of Lake Elsinore Community Facilities District No. 95 -1 (Lake
Elsinore City Center Public Improvements) 2015 Special Tax Refunding Bonds (the "CPD No. 95 -1
Bonds ") being issued by CFD No. 95 -1 to refund the outstanding City of Lake Elsinore Community
Facilities District No. 95 -1 (Lake Elsinore City Center Public Improvements) Special Tax Bonds
2011 Series, pursuant to a Bond Indenture, dated as of L 2015, by and between CFD No. 95-
1 and MUFG Union Banl<, N.A.;
WHEREAS, the Authority has authorized the issuance of its Lake Elsinore Public Financing
Authority Local Agency Revenue Refmding Bonds Series 2015 (the "Authority Bonds "), under an
Indenture of Trust dated as of 1, 2015 (the "Authority Bond Indenture "), by and between
the Authority and MUFG Union Bank, N.A., as trustee (the "Trustee ") and under the Bond Law for
the propose of providing the funds required to acquire the Local Obligations; and
WHEREAS, the Authority and the CFDs desire to enter into this Local Obligations Purchase
Agreement providing for the purchase and sale of the Local Obligations by the CFDs to the
Authority and containing the other agreements herein set forth.
NOW, THEREFORE, in consideration of the mutual agreements herein contained, and for
other good and valuable consideration, the receipt of which is hereby acknowledged, the Authority
and the CFDs agree as follows:
1. Upon the terms and conditions and upon the basis of the representations, warranties
and agreements hereinafter set forth, the CFDs hereby commit to sell to the Authority and do hereby
sell to the Authority, and the Authority hereby commits to purchase from the CFDs and does hereby
purchase from the CFDs with the proceeds of the Authority Bonds all of the $ aggregate
principal amount of the Local Obligations. The Local Obligations will bear the annual interest rates
and mature at the times set forth in Exhibit A attached hereto and hereby made a part hereof. The
aggregate purchase price of the Local obligations is set forth below and the individual purchase price
of each issue of the Local Obligations shall be as set forth in Exhibit A.
2. All terms not herein defined shall have the meanings given such terms in the
Authority Bond Indenture.
3. The CFDs confirm that there are no substantial conditions precedent to the issuance
by the CFDs and to the sale (as provided herein) and the delivery to the Authority of the Local
Obligations.
4. The parties hereto hereby specify [March 171, 2015, as the date of closing of the
purchase of the Local Obligations hereunder (the "Closing Date "). The Local Obligations shall be
registered in the name of the Trustee, as assignee of the Authority. On the Closing Date, the CFDs
shall issue and deliver the Local Obligations to the Trustee upon payment by the Trustee of the
purchase price of the Local Obligations in the aggregate amount of $ (being the
aggregate principal amount of $ plus /less net premium /discount of $ and
less Underwriter's Discount of _ ). Said purchase price shall be paid from the proceeds of
sale of the Authority Bonds, and shall be paid by the Trustee from the Purchase Fund established
under the Authority Bond Indenture.
5. The Local Obligations shall be as described in the Official Statement dated as of the
date hereof relating to the Authority Bonds (the "Official Statement') and shall be issued and secured
under the provisions of the various resolutions adopted by the CFDs (collectively, the "CFD
Resolutions," as more specifically defined below) and the Bond Indentures. The Local Obligations
and interest thereon will be payable from Special Taxes levied and collected in accordance with the
CFD Resolutions and the Bond Indentures.
A portion of the proceeds of the Local Obligations will be used to refund the Prior Bonds in
accordance with seven Escrow Agreements, each dated as of 1, 2015 (each, an "Escrow
Agreement" and collectively the "Escrow Agreements "), by and between the CFDs and MUFG
Union Bank, N.A., as escrow agent (the "Escrow Agent ").
6. Any action under this Purchase Agreement taken by the Authority, including
payment for and acceptance of the Local Obligations, and delivery and execution of any receipt for
the Local Obligations and any other instruments in connection with the closing on the Closing Date,
shall be valid and sufficient for all purposes and binding upon the Authority, provided that any such
action shall not impose any obligation or liability upon the Authority other than as may arise as
expressly set forth in this Purchase Agreement.
7. It is a condition to the CFDs' sale and delivery of the Local Obligations to the
Authority, and to the Authority's purchase of the Local Obligations and the obligations of the
Authority to accept delivery of and to pay for the Local Obligations, that the entire aggregate
principal amount of the Local Obligations set forth in Exhibit A shall be delivered by the CFDs, and
accepted and paid for by the Authority, on the Closing Date.
8. The CFDs have furnished some, but not all, of the information contained in the
Official Statement and hereby authorize the use of that information by the Authority in connection
with the public offering and sale of the Authority Bonds.
Each of the CFDs represents and warrants to the Authority that:
(a) It is a community facilities district formed under the Mello -Roos Community
Facilities Act of 1982, duly organized and existing under the Constitution and laws of the State of
California, and has, and on the Closing Date will have, full legal right, power and authority (i) to
enter into this Purchase Agreement, the Escrow Agreement relating to its Prior Bonds and the Bond
Indenture relating to its CFD Bonds (the Bond Indentures, this Purchase Agreement and the Escrow
Agreements are referred to collectively herein as the "CFD Documents "), (ii) to adopt or enter into
the resolution relating to its CFD Bonds (each, a "CFD Resolution," and, together for all CFDs, the
"CFD Resolutions "), (iii) to issue, sell and deliver its CFD Bonds to the Authority as provided
herein, and (iv) to carry out and consummate the transactions contemplated by its CFD Documents,
its CFD Resolution and the Official Statement;
(b) It has complied, and will on the Closing Date be in compliance in all respects,
with the CFD Documents 10 which it is a party and its CFD Resolution;
(c) By official action of the City Council of the City of Lake Elsinore (the
"City"), as legislative body of the CFD, it has duly adopted its CFD Resolution, has duly authorized
and approved the execution and delivery of, and the performance of its obligations contained in, its
CFD Bonds and the CFD Documents to which it is a party, and the consummation by it of all other
transactions contemplated by the Official Statement:
(d) The execution and delivery of the CFD Documents to which it is a party and
its CFD Bonds and compliance with the provisions of each thereof, and the carrying out and
consummation of the transactions contemplated by the Official Statement, will not conflict with or
constitute a breach of or a default under any applicable law or administrative regulation of the State
of California or the United States, or any applicable judgment, decree, agreement or oilier instrument
to which it is a party or are otherwise subject;
(e) To its knowledge, at the time of its acceptance hereof and at all times
subsequent thereto up to and including the Closing Date, with respect to information describing the
CFD, its CFD Resolution and the CFD Documents to which it is a party, the Official Statement does
not and will 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;
(t) Except as described in the Official Statement, there is no action, suit,
proceeding or investigation before or by any court, public board or body pending or, to its
knowledge, threatened, wherein an unfavorable decision, ruling or finding would: (i) affect its
creation, organization, existence or powers or the titles of its members and officers to their respective
offices, (ii) enjoin or restrain the issuance, sale and delivery of its CFD Bonds, the levy and receipt of
the Special Taxes which secure its CFD Bonds, or the pledge thereof, (iii) in any way question or
affect any of its rights, powers, duties or obligations with respect to the moneys pledged or to be
pledged to pay the principal of, premium, if any, or interest on its CFD Bonds, (iv) in any way
question or affect any authority for the issuance of its CFD Bonds, or the validity or enforceability of
its CFD Bonds, its CFD Resolution or the CFD Documents to which it is a party, or (v) in any way
question or affect this Purchase Agreement or the transactions contemplated by the CFD Documents
to which it is a party, the Official Statement, its CFD Resolution, the other documents referred to in
the Official Statement, or any other agreement or instrument to which it is a party relating to its CFD
Bonds;
(g) It will furnish such information, execute such instruments and take such other
action in cooperation with the Authority, as the Authority may reasonably request, to qualify the
Authority 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 Authority may designate, and will
assist, if necessary therefor, in the continuance of such qualifications in effect as long as required for
the distribution of the Authority Bonds; provided, however, that it shall not be required to qualify as
a foreign corporation or to file any general consents to service of process under the laws of any state;
(h) The issuance and sale of its CFD Bonds is not subject to any transfer or other
documentary stamp taxes of the State of California or any political subdivision thereof,
(i) Any certificate signed by any official of the City authorized to do so on its
behalf shall be deemed a representation and warranty by the CFD to the Authority as to the
statements made therein.
5
10. If between the date of this Purchase Agreement and the date ninety (90) days after the
Closing Date an event occurs which is materially adverse to the purpose for which the Official
Statement is to be used which is not disclosed in the Official Statement, the CFDs shall notify file
Authority of such fact.
11. At 9:00 a.m., Pacific Time, on the Closing Date, or at such other time or oil such
other date as is mutually agreed by the City and the Authority, (a) the CFDs will deliver the Local
Obligations to the Trustee in definitive form, duly executed, together with the other documents
hereinafter mentioned, (b) subject to the terms and conditions hereof, the Trustee solely from moneys
held under the Authority Bond Indenture will accept such delivery and pay the purchase price of the
Local Obligations as referenced in paragraph I hereof by wire transfer or other funds which are good
funds on the Closing Date and (c) the Escrow Agent shall deposit into the Escrow Funds established
under the Escrow Agreements the amounts described in the Escrow Agreements. Delivery and
payment, as aforesaid, shall be made at such place as shall have been mutually agreed upon by the
City, the Escrow Agent and the Authority.
L) The Authority has entered into this Purchase Agreement in reliance upon the
representations, warranties and agreements of the CFDs contained herein and to be contained in the
documents and instruments to be delivered on the Closing Date, and upon the performance by the
CFDs of their respective obligations hereunder, both as of the date hereof and as of the Closing Date.
Accordingly, the Authority's obligations under this Purchase Agreement to purchase, to accept
delivery of and to pay for the Local Obligations shall be subject to the performance by the CFDs of
their respective obligations to be performed hereunder and under such documents and instruments at
or prior to the Closing Date, and shall also be subject to tile following conditions:
(a) The representations and warranties of the CFDs contained herein shall be
true, complete and correct on the date hereof and on and as of the Closing Date, as if made on the
Closing Date;
(b) On the Closing Date, the CFD Resolutions and the CFD Documents shall be
in full force and effect, and shall not have been amended, modified or supplemented, and the Official
Statement shall not have been amended, modified or supplemented, except in either case as may have
been agreed to by both the Authority and the Underwriter;
(c) As of the Closing Date, all official action of the CFDs relating to the Local
Obligations, including but not limited to the CFD Resolutions, shall be in full force and effect, and
there shall have been taken all such actions as, in the opinion of Stradling Yocca Carlson & Rauth, a
Professional Corporation (`Bond Counsel "), shall be necessary or appropriate in connection
therewith, with the issuance of the Authority Bonds and the Local Obligations, and with the
transactions contemplated hereby, all as described in the Official Statement;
(d) The Authority shall have the right to terminate the Authority's obligations
under this Purchase Agreement to purchase, to accept delivery of and to pay for the Local
Obligations by notifying the CFDs of its election to do so if, after the execution hereof and prior to
the Closing: (i) either the marketability of the Authority Bonds or the market price of the Authority
Bonds, in the opinion of the Authority, has been materially and adversely affected by any decision
issued by a court of the United States (including the United States Tax Court) or of the State of
California, by any ruling or regulation (final, temporary or proposed) issued by or on behalf of the
Department of the Treasury of the United States, the Internal Revenue Service, or other
6
governmental agency of the United States, or any governmental agency of the State of California, or
by a tentative decision with respect to legislation reached by a committee of the House of
Representatives or the Senate of the Congress of the United States, or by legislation enacted by,
pending in, or favorably reported to either the House of Representatives or the Senate of the
Congress of the United States or either house of the Legislature of the State of California, or formally
proposed to the Congress of the United States by the President of the United States or to the
Legislature of the State of California by the Governor of the State of California in an executive
communication, affecting the tax status of the Authority or the City, their property or income, their
bonds (including the Authority Bonds) or the interest thereon, or any tax exemption granted or
authorized by the Bond Law; (ii) the United States shall have become engaged in: hostilities which
have resulted in a declaration of war or national emergency, or there shall have occurred any other
outbreak of hostilities, or a local, national or international calamity or crisis, financial or otherwise,
the effect of such outbreak, calamity or crisis being such as, in the reasonable opinion of the
Authority, would affect materially and adversely the ability of the Authority to market the Authority
Bonds (it being agreed by the Authority that there is no outbreak, calamity or crisis of such a
character as of the date hereo'o) (iii) there shall have occurred a general suspension of trading on the
New York Stock Exchange or the declaration of a general banking moratorium by the United States,
New York State or California State authorities; (iv) there shall have occurred a withdrawal or
downgrading of any rating assigned to the Authority Bonds; (v) any Federal or California court,
authority or regulatory body shall take action materially and adversely affecting the ability of a
developer to proceed with the development as contemplated by the Official Statement; (vi) an event
described in paragraph (d) hereof occurs which in the opinion of the Authority requires a supplement
or amendment to the Official Statement, and such supplement or amendment is not agreed to by the
City; and
(e) On or prior to the Closing Date, the Authority shall have received each of the
following documents:
(1) All documents and opinions required to be received by the Trustee
prior to the application of proceeds of the Authority Bonds to the purchase of the Local Obligations;
(2) Opinions, in form and substance satisfactory to the City and the
Authority, dated as of the Closing Date, of Bond Counsel, approving, without qualification, the
validity of the Local Obligations;
(3) A letter of Bond Counsel, dated the date of the Closing and addressed
to the Authority and the Underwriter, to the effect that the opinion referred to in the preceding
subparagraph (2) may be relied upon by the Authority to the same extent as if such opinion were
addressed to it;
(4) A supplemental opinion, dated the date of the Closing and addressed
to the Authority and the Underwriter, of Bond Counsel to the effect that this Purchase Agreement has
been duly authorized, executed and delivered by, and, assuming due authorization, execution and
delivery by the Authority, constitutes a legal, valid and binding agreement of the CFDs enforceable
in accordance with its terms, except as such enforceability may be limited by the application of
equitable principles if equitable remedies are sought, and that the statements contained in the Official
Statement (including the cover page and the Appendices thereto), insofar as such statements purport
to summarize certain provisions of the Local Obligations, the CFD Documents or the CFD
Resolutions, are accurate in all material respects;
(5) A certificate dated the Closing Date, addressed to the Authority and
the Underwriter, signed by an official of the CFDs having knowledge of the facts, to the effect that:
(i) The representations and warranties of the CFDs contained
herein are true and correct in all material respects on and as of the Closing Date as if made on the
Closing Date;
(ii) Except as described in the Official Statement, there is no
action, suit, proceeding or investigation 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 of the CFDs, or the titles of its members and officers to their
respective offices, (B) enjoin or restrain the issuance, sale and delivery of the Local Obligations, the
levy or collection of the Special Taxes or any other moneys or property pledged or to be pledged
under the CFD Resolutions or the Bond Indentures, or the pledge thereof, (C) in any way question or
affect any of the rights, powers, duties or obligations of the CFDs with respect to the moneys and
assets pledged or to be pledged to pay the principal of premium, if any, or interest on the Local
Obligations, (D) in any way question or affect any authority for the issuance of the Local
Obligations, or the validity or enforceability of the Local Obligations, the CFD Resolutions or the
CFD Documents, or (L) in any way question or affect this Purchase Agreement or the transactions
contemplated by the CFD Resolutions, the CFD Documents, the Official Statement or the documents
referred to in the Official Statement;
(iii) The CFDs have complied with all agreements, covenants and
arrangements, and satisfied all conditions, on its part to be complied with or satisfied on or prior to
the Closing Date; and
(iv) To the best of its knowledge, no event affecting the City or
the CFDs has occurred since the date of the Official Statement which should be disclosed in the
Official Statement for the purposes for which it is necessary to disclose therein in order to make the
statements not misleading in any respect;
(6) An opinion, dated the date of Closing and addressed to the Authority
and the Underwriter, of the City Attorney, as counsel to the CFDs, to the effect that (A) the CFD
Documents have been duly authorized, executed and delivered by the CFDs, and, assuming due
authorization, execution and delivery by the other parties thereto, constitute the legal, valid and
binding agreement of the CFDs enforceable in accordance with their terms, except as such
enforceability may be limited by the application of equitable principles if equitable remedies are
sought, (B) the CFD Resolutions have been duly adopted, are in full force and effect and have not
been modified, amended or rescinded, and (C) except as described in the Official Statement, there is
no action, suit, proceeding or investigation before or by any court, public board or body pending or
threatened, wherein all unfavorable decision, ruling or finding would: (i) affect the creation,
organization, existence or powers of the CFDs, or the authority of the City Council as the legislative
body for the CFDs; (ii) enjoin or restrain the issuance, sale and delivery of the Local Obligations, the
receipt of any other moneys or property pledged or to be pledged under the CFD Resolutions or the
Bond Indentures or the pledge thereof; (iii) in any way question or affect any of the rights, powers,
duties or obligations of the CFDs with respect to the moneys and assets pledged or to be pledged to
pay the principal of, premium, if any, or interest on the Local Obligations; (iv) in any way question
or affect any authority for the issuance of the Local Obligations, or the validity or enforceability of
the Local Obligations, the CFD Resolutions or the CFD Documents; (v) in any way question or affect
8
this Purchase Agreement or the transactions contemplated by the CUD Documents. the Official
Statement or the documents referred to in the Official Statement and (vi) the statements in the
Official Statements relating to the CFDs are true and accurate;
(7) Such additional legal opinions, certificates, instruments and
documents as the Authority or the Underwriter may reasonably request to evidence the truth and
accuracy, as of the date hereof and as of the Closing Date, of the CFDs' representations and
warranties contained herein and of the statements and information contained in the Official
Statement;
(8) Executed copies of the Escrow Agreements and the Bond Indentures;
and
(9) Any opinions or certificates required by the authorizing documents
relating to the Prior Bonds to demonstrate defeasance of the Prior Bonds including without limitation
an escrow verification report of _ (the "Verification Agent").
(10) The CFD Resolutions, certified by authorized officers as true copies
and /or as having been adopted or executed (as applicable), with only such amendments,
modifications or supplements as may have been agreed to by the Authority and the Underwriter.
All of the opinions, letters, certificates, instruments and other documents mentioned above or
elsewhere in this Purchase Agreement shall be deemed to be in compliance with the provisions
hereof if, but only if, they are in form and substance satisfactory to the Authority and the
Underwriter, but the approval of the Authority and the Underwriter shall not be unreasonably
withheld. Receipt of, and payment for, the Local Obligations shall constitute evidence of the
satisfactory nature of such as to the Authority and the Underwriter. The performance of any and all
obligations of the CFDs hereunder and the performance of any and all conditions contained herein
for the benefit of the Authority and the Underwriter may be waived by the Authority and the
Underwriter in their sole discretion.
If the CFDs shall be unable to satisfy the conditions to the obligations of the Authority to
purchase, accept delivery of and pay for the Local Obligations contained in this Purchase Agreement,
or if the obligations of the Authority to purchase, accept delivery of and pay for the Authority Bonds
shall be terminated for any reason permitted by this Purchase Agreement, this Purchase Agreement
shall terminate, and neither the Authority nor the CFDs shall be under further obligation hereunder,
except that the respective obligations of the CFDs and the Authority set forth in paragraphs 13 and 14
hereof shall continue in full force and effect.
13. The Authority shall be under no obligation to pay, and the CFDs shall pay their
allocable portions of the expenses incurred in connection with issuance of the Authority Bonds and
the Local Obligations.
14. This Purchase Agreement is made solely for the benefit of the Underwriter, the CFDs
and the Authority (including their successors and assigns), and no other person shall acquire or have
any right hereunder or by virtue hereof. All of the CFDs' representations, warranties and agreements
contained in this Purchase Agreement shall remain operative and in full force and effect regardless
of: (i) any investigations made by or on behalf of the Authority and the Underwriter or (ii) delivery
9
of and payment for the Authority Bonds pursuant to the Authority Bond Indenture. The agreements
contained in this paragraph shall survive any termination of this Purchase Agreement.
15. This Purchase Agreement may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original, but all such
counterparts shall together constitute but one and the same instrument.
16. In case any one or more of the provisions contained herein shall for any reason be
held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision hereof.
17. The validity, interpretation and performance of this Purchase Agreement shall be
governed by the laws of the State of California.
10
IN WITNESS WHEREOF, the Authority and the CFDs have each caused this Purchase
Agreement to be executed by their duly authorized officers all as of the date first above written.
LAKE ELSINORE PUBLIC FINANCING AUTHORITY
By
Authorized Officer
CITY OF LAKE ELSINORE COMMUNITY
FACILITIES DISTRICT NO. 2004 -3 (ROSETTA
CANYON)
By
Director of Administrative Services of the City of Lake
Elsinore, on behalf of City of Lake Elsinore Community
Facilities District No. 2004 -3 (Rosetta Canyon)
CITY OF LAKE ELSINORE COMMUNITY
FACILITIES DISTRICT NO. 2005 -6 (CITY CENTER
TOWNHOMES)
By
Director of Administrative Services of the City of Lake
Elsinore, on behalf of City of Lake Elsinore Community
Facilities District No. 2005 -6 (City Center Townhomes)
CITY OF LAKE ELSINORE COMMUNITY
FACILITIES DISTRICT NO. 2005-1 (SERENITY)
By _
Director of Administrative Services of the City of Lake
Elsinore, on behalf of City of Lake Elsinore Community
Facilities District No. 2005 -1 (Serenity)
S -1
CITY OF LAKE ELSINORE COMMUNITY
FACILITIES DISTRICT NO. 2005 -2 (ALBERHILL
RANCH)
By
Director of Administrative Services of the City of Lake
Elsinore, on behalf of City of Lake Elsinore Community
Facilities District No. 2005 -2 (Alberhill Ranch)
CITY OF LAKE ELSINORE COMMUNITY
FACILITIES DISTRICT NO. 2006 -2 (VISCAYA)
By
Director of Administrative Services of the City of Lake
Elsinore, on behalf of City of Lake Elsinore Community
Facilities District No. 2006 -2 (Viscaya)
CITY OF LAKE ELSINORE COMMUNITY
FACILITIES DISTRICT NO. 2003 -2 (CANYON HILLS)
By
Director of Administrative Services of the City of Lake
Elsinore, on behalf of City of Lake Elsinore Community
Facilities District No. 2003 -2 (Canyon Hills)
CITY OF LAKE ELSINORE COMMUNITY
FACILITIES DISTRICT NO. 95-1 (LAKE ELSINORE
CITY CENTER PUBLIC IMPROVEMENTS)
By
Director of Administrative Services of the City of Lake
Elsinore, on behalf of City of Lake Elsinore Community
Facilities District No. 95 -1 (Lake Elsinore City Center Public
Improvements)
S2
EXHIBIT A
MATURITY SCHEDULE
CFD 2004 -3 -1 BONDS
Purchase Price:
Principal
Maturity Date Maturity Interest Rate Yield Price
A -1
MATURITY SCHEDULE
CFI) 2004 -3 -2 BONDS
PLffchase Price:
Maturity Date Principal
(September 1) Maturity Interest Rate Yield Price
A -2
MATURITY SCHEDULE
CFD 2005 -6 13ONDS
Purchase Price:
Principal
Maturity Date Maturity Interest Rate Yield Price
A -3
MATURITY SCHEDULE
CI' D 2005 -1 BONDS
Purchase Price:
Principal
Maturity Date Maturity Interest Rate Yield Price
A -4
MATURITY SCHEDULE
CPD 2005 -2 BONDS
Purchase Price:
Principal
Maturity Date Maturity Interest Rate Yield Price
A -5
MATURITY SCHEDULE
ChD 2006 -2 BONDS
Purchase Price:
Principal
Maturity Date Maturity Interest Rate Yield Price
A -6
MATURITY SCHEDULE
CFD 2003 -2 BONDS
Purchase Price:
Principal
Maturity Date Maturity Interest Rate Yield Price
A -7
MATURITY SCHEDULE
CFD 95 -1 BONDS
Purchase Price:
Principal
Maturity Date Maturity Interest Rate Yield Price
A -s
Sti (0 mg Yucca Carlson & Rawh
Di yfi of 213115
RESOLUTION NO. 2015 -
RESOLUTION OF THE BOARD OF DIRECTORS OF THE
LAKE ELSINORE PUBLIC FINANCING AUTHORITY,
RIVERSIDE COUNTY, CALIFORNIA, AUTHORIZING THE
PREPARATION AND DISTRIBUTION OF THE
PRELIMINARY OFFICIAL STATEMENT IN CONNECTION
WITH THE ISSUANCE OF ITS LOCAL AGENCY
REFUNDING REVENUE BONDS SERIES 2015,
APPROVING CERTAIN DOCUMENTS AND TAKING
CERTAIN OTHER ACTIONS IN CONNECTION
THEREWITH
WHEREAS, the Lake Elsinore Public Financing Authority (the "Authority ") is a
joint exercise of powers authority duly organized and existing under the provisions of
Articles 1 through 4 (commencing with Section 6500) of Chapter 5 of Division 7 of Title
1 of the Government Code of the State of California (the "Act'), and is authorized
pursuant to Article 4 of the Act (the "Bond Law ") to borrow money for the purpose of
financing the acquisition of bonds, notes and other obligations to provide financing and
refinancing for capital improvements of member entities of the Authority and other local
agencies; and
WHEREAS, the Authority previously authorized the issuance of its Local Agency
Revenue Refunding Bonds Series 2015 (the "Authority Bonds ") pursuant to Resolution
No. PFA- 2015 -001, adopted by the Board of Directors of the Authority (the "Board of
Directors ") on January 13, 2015; and
WHEREAS, the City of Lake Elsinore Community Facilities District No. 95 -1
(Lake Elsinore City Center Public Improvements) ( "CFD No. 95 -1 ") previously issued
the $1,375,000 City of Lake Elsinore Community Facilities District No. 95 -1 (Lake
Elsinore City Center Public Improvements) Special Tax Bonds, 2011 Series (the "Prior
CFD No. 95 -1 Bonds ") to refinance certain public improvements; and
WHEREAS, the Authority previously issued the $1,405,000 Lake Elsinore Public
Financing Authority Local Agency Revenue Bonds (1996 Series E Refunding), 2011
Series B (the "Prior Authority Bonds ") to purchase the Prior CFD No. 95 -1 Bonds; and
WHEREAS, the Authority Bonds are being issued for the purpose of acquiring
special tax refunding bonds of certain community facilities districts of the City of Lake
Elsinore identified in Resolution No. PFA- 2015 -001, including CFD No. 95 -1, the
proceeds of which will be utilized (1) to defease and refund certain outstanding bonds of
such community facilities districts, (2) to defease and refund the Prior Authority Bonds
and (3) in certain instances to finance additional public improvements, and
WHEREAS, the Board of Directors desires to approve certain other documents
related to the issuance of the Authority Bonds;
Public Finance Authority Resolution No 2015 -_
Page 2
NOW, THEREFORE, the Board Of Directors of the Lake Elsinore Public
Financing Authority does hereby resolve, determine and order as follows:
Section 1. Each of the above recitals is true and correct and is adopted by the
Board of Directors.
Section 2. The form of the Preliminary Official Statement presented at this
meeting is hereby approved, and the underwriters of the Authority Bonds are hereby
authorized to distribute the Preliminary Official Statement to prospective purchasers of
the Authority Bonds in the form hereby approved, together with such additions thereto
and changes therein as are determined necessary or desirable by the Mayor, the City
Manager, the Director of Administrative Services, or their written designees (collectively,
the "Authorized Officers "), to make such Preliminary Official Statement final as of its
date for purposes of Rule 15c2 -12 of the Securities and Exchange Commission,
including, but not limited to, such additions and changes as are necessary to make all
information set forth therein accurate and not misleading. Each of the Authorized
Officers is hereby authorized to execute a final Official Statement in the form of the
Preliminary Official Statement, together with such changes as are determined
necessary by the Authorized Officers to make such Official Statement complete and
accurate as of its date. The underwriters of the Authority Bonds are further authorized
to distribute the final Official Statement for the Authority Bonds and any supplement
thereto to the purchasers thereof upon its execution on behalf of the Authority as
described above.
Section 3. The form of the Escrow Agreement relating to the refunding of the
Prior Authority Bonds (the "Escrow Agreement'), with MUFG Union Bank, N.A., as
Escrow Bank, in substantially the form presented herewith is hereby approved; and any
one of the Authorized Officers is hereby authorized and directed, for and in the name of
the Authority, to execute and the Secretary, or her written designee, is authorized to
attest to the Escrow Agreement, with such additions thereto and changes therein as
may be approved or required by an Authorized Officer, including changes to conform to
the final pricing of the escrow investments and to clarify any ambiguities; provided that
the form of Escrow Agreement may be modified to conform to federal tax law
requirements or to achieve further savings, with the advice and assistance of Bond
Counsel, such approval to be conclusively evidenced by the execution of the Escrow
Agreement by an Authorized Officer. MUFG Union Bank, N.A. is hereby appointed to
act as Escrow Agent under the Escrow Agreement.
Section 4. The Authorized Officers are hereby authorized and directed, to do
any and all things and to execute and deliver any and all documents which they may
deem necessary or advisable in order to consummate the issuance and sale of the
Authority Bonds and otherwise to effectuate the purposes of this Resolution.
Section 5. This Resolution shall take effect immediately upon its adoption.
Public Finance Authority Resolution No 2015 -
Page 3
PASSED, APPROVED AND ADOPTED at a regular meeting of the Board of
Directors of the Lake Elsinore Public Financing Authority this 10t" day of February,
2015.
NATASHA JOHNSON
CHAIR
ATTEST:
VIRGINIA BLOOM
SECRETARY
APPROVED AS TO FORM:
BARBARA ZEID LEIBOLD
COUNSEL TO AUTHORITY
.Slradling Pocca Carlson R Ravlh
Drgfl q12 13115
RESOLUTION NO. 2015 -
RESOLUTION OF 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),
AUTHORIZING THE PREPARATION AND DISTRIBUTION
OF A PRELIMINARY OFFICIAL STATEMENT IN
CONNECTION WITH THE ISSUANCE OF THE LOCAL
AGENCY REFUNDING REVENUE BONDS SERIES 2015
OF THE LAKE ELSINORE PUBLIC FINANCING
AUTHORITY AND TAKING CERTAIN OTHER ACTIONS IN
CONNECTION THEREWITH
WHEREAS, the City Council of the City of Lake Elsinore (the "City "), located in
Riverside County, California (hereinafter sometimes referred to as the "legislative body
of the District "), has heretofore undertaken proceedings to form City of Lake Elsinore
Community Facilities District No. 2005 -6 (City Center Townhomes) (the "District ")
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 legislative body of the District previously authorized the issuance
of the "City of Lake Elsinore Community Facilities District No. 2005 -6 (City Center
Townhomes) 2015 Special Tax Refunding Bonds" (the "2015 Bonds ") to refund the
District's $3,525,000 Special Tax Bonds 2006 Series A; and
WHEREAS, the Lake Elsinore Public Financing Authority (the "Authority "), for the
purpose of acquiring special tax refunding bonds of certain community facilities districts
of the City, including the 2015 Bonds, the proceeds of which will be utilized to defease
and refund outstanding bonds of such community facilities districts, including the
District, and in certain instances to finance additional public improvements, has
authorized the issuance of its Local Agency Revenue Refunding Bonds Series 2015
(the "Authority Bonds "); and
WHEREAS, in connection with the issuance of the Authority Bonds, the Board of
Directors of the Authority has approved the preparation and distribution of the
Preliminary Official Statement in substantially the form on file with the City Clerk, which
Preliminary Official Statement includes certain information relating to the 2015 Bonds
and the District;
NOW, THEREFORE, the City Council, acting as the legislative body of the
District, does hereby resolve, order and determine as follows:
Section 1. Each of the above recitals is true and correct.
City Council Resolution No 2015 -
Page 2
Section 2. The form of the Preliminary Official Statement for the Authority
Bonds presented at this meeting is hereby approved, and the underwriters of the
Authority Bonds are hereby authorized to distribute the Preliminary Official Statement to
prospective purchasers of the Authority Bonds in the form hereby approved, together
with such additions thereto and changes therein as are determined necessary or
desirable by the Mayor, the City Manager, the Director of Administrative Services, or
their written designees (collectively, the "Authorized Officers "), to make such Preliminary
Official Statement final as of its date for purposes of Rule 15c2 -12 of the Securities and
Exchange Commission, including, but not limited to, such additions and changes as are
necessary to make all information set forth therein accurate and not misleading. Any
one of the Authorized Officers is hereby authorized to execute a final Official Statement
in the form of the Preliminary Official Statement, together with such changes as are
determined necessary by the Mayor, the City Manager, the Director of Administrative
Services, and their written designees, to make such Official Statement complete and
accurate as of its date. The underwriters of the Authority Bonds are further authorized
to distribute the final Official Statement for the Authority Bonds and any supplement
thereto to the purchasers thereof upon its execution on behalf of the District as
described above.
Section 3. This Resolution shall take effect immediately upon its adoption.
PASSED, APPROVED AND ADOPTED at a regular meeting of the City Council
of the City of Lake Elsinore, California, this 1011' day of February, 2015.
STEVEN MANOS
MAYOR
ATTEST:
VIRGINIA BLOOM
CITY CLERK
APPROVED AS TO FORM:
BARBARA ZEID LEIBOLD
CITY ATTORNEY
Stradling Yocca Carlson c@ Ranth
Draft oJ2 13 115
RESOLUTION NO. 2015 -
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
LAKE ELSINORE, ACTING AS THE LEGISLATIVE BODY
OF CITY OF LAKE ELSINORE COMMUNITY FACILITIES
DISTRICT NO. 2004 -3 (ROSETTA CANYON),
AUTHORIZING THE PREPARATION AND DISTRIBUTION
OF A PRELIMINARY OFFICIAL STATEMENT IN
CONNECTION WITH THE ISSUANCE OF THE LOCAL
AGENCY REFUNDING REVENUE BONDS SERIES 2015
OF THE LAKE ELSINORE PUBLIC FINANCING
AUTHORITY AND TAKING CERTAIN OTHER ACTIONS IN
CONNECTION THEREWITH
WHEREAS, the City Council of the City of Lake Elsinore (the "City "), located in
Riverside County, California (hereinafter sometimes referred to as the "legislative body
of the District "), has heretofore undertaken proceedings to form City of Lake Elsinore
Community Facilities District No. 2004 -3 (Rosetta Canyon) (the "District ") and
Improvement Area Nos. 1 and 2 therein, 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 legislative body of the District previously authorized the issuance
of the "City of Lake Elsinore Community Facilities District No. 2004 -3 (Rosetta Canyon)
Improvement Area No. 1 2015 Special Tax Refunding Bonds" (the "Improvement Area
No. 1 Bonds ") to refund the District's $22,635,000 Special Tax Bonds (Improvement
Area No. 1) 2005 Series A and to finance additional public improvements; and
WHEREAS, the legislative body of the District previously authorized the issuance
of the "City of Lake Elsinore Community Facilities District No. 2004 -3 (Rosetta Canyon)
Improvement Area No. 2 2015 Special Tax Refunding Bonds (the "Improvement Area
No. 2 Bonds" and, together with the Improvement Area No. 1 Bonds, the "2015 Bonds ")
to refund the District's $23,460,000 Special Tax Bonds (Improvement Area No. 2) 2006
Series A and to finance additional public facilities; and
WHEREAS, the Lake Elsinore Public Financing Authority (the "Authority "), for the
purpose of acquiring special tax refunding bonds of certain community facilities districts
of the City, including the 2015 Bonds, the proceeds of which will be utilized to defease
and refund outstanding bonds of such community facilities districts, including the
District, and in certain instances to finance additional public improvements, has
authorized the issuance of its Local Agency Revenue Refunding Bonds Series 2015
(the "Authority Bonds "); and
WHEREAS, in connection with the issuance of the Authority Bonds, the Board of
Directors of the Authority has approved the preparation and distribution of the
Preliminary Official Statement in substantially the form on file with the City Clerk, which
City Council Resolution No 2015 -_
Page 2
Preliminary Official Statement includes certain information relating to the 2015 Bonds
and Improvement Area Nos. 1 and 2 of the District,
NOW, THEREFORE, the City Council, acting as the legislative body of the
District, does hereby resolve, order and determine as follows:
Section 1. Each of the above recitals is true and correct.
Section 2. The form of the Preliminary Official Statement for the Authority
Bonds presented at this meeting is hereby approved, and the underwriters of the
Authority Bonds are hereby authorized to distribute the Preliminary Official Statement to
prospective purchasers of the Authority Bonds in the form hereby approved, together
with such additions thereto and changes therein as are determined necessary or
desirable by the Mayor, the City Manager, the Director of Administrative Services, or
their written designees (collectively, the "Authorized Officers "), to make such Preliminary
Official Statement final as of its date for purposes of Rule 15c2 -12 of the Securities and
Exchange Commission, including, but not limited to, such additions and changes as are
necessary to make all information set forth therein accurate and not misleading. Any
one of the Authorized Officers is hereby authorized to execute a final Official Statement
in the form of the Preliminary Official Statement, together with such changes as are
determined necessary by the Mayor, the City Manager, the Director of Administrative
Services, and their written designees, to make such Official Statement complete and
accurate as of its date. The underwriters of the Authority Bonds are further authorized
to distribute the final Official Statement for the Authority Bonds and any supplement
thereto to the purchasers thereof upon its execution on behalf of the District as
described above.
Section 3. This Resolution shall take effect immediately upon its adoption.
City Council Resolution No 2015 -_
Page 3
PASSED, APPROVED AND ADOPTED at a regular meeting of the City Council
of the City of Lake Elsinore, California, this 10th day of February, 2015.
STEVEN MANOS
MAYOR
ATTEST:
VIRGINIA BLOOM
CITY CLERK
APPROVED AS TO FORM:
BARBARA ZEID LEIBOLD
CITY ATTORNEY