HomeMy WebLinkAboutCC Agenda Packet 01-24-2017NOTICE OF CANCELLATION
OF CLOSED SESSION
CITY COUNCIL OF THE CITY
OF LAKE ELSINORE
NOTICE IS HEREBY GIVEN that the regularly scheduled Closed Session of the City Council of
the City of Lake Elsinore for 5:00 p.m. on Tuesday, January 24, 2017, is cancelled.
Date: January 24, 2017 - \
usan M. Domen, City Clerk
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STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE ) SS AFFIDAVIT OF POSTING
CITY OF LAKE ELSINORE )
I, Susan M. Domen, declare as follows:
That 1 am the City Clerk of the City of Lake Elsinore and that I caused to be posted this Notice
of Cancellation of the regularly Closed Session of the City Council meeting for 5:00 p.m. on
Tuesday, January 24, 2017, in a conspicuous place at City Hall, 130 S. Main Street, Lake
Elsinore, and at the Cultural Center.
I declare under penalty of perjury that the f
Dated: January 24, 2017
oing is true and correct.
usan M. Domen, City Clerk
CITY OF ice.
LADE �p LSINORE
DREAM EJCTREME-
REPORT TO CITY COUNCIL
To: Honorable Mayor and Members of the City Council
From: Grant Yates, City Manager
Prepared by: Nancy Lassey, Finance Administrator
Approved by: Jason Simpson, Assistant City Manager
Date: January 24, 2017
Subject: Annual Financial Reports for the Fiscal Year Ended June 30, 2016
Recommendation
Receive and file the Comprehensive Annual Financial Report for the Fiscal Year Ended June 30,
2016 and related year end reports.
Background and Discussion
The Comprehensive Annual Financial Report (CAFR) is the summarization of the City's financial
activity for the previous fiscal year ending June 30, 2016. The report includes summarization of
significant milestones that were accomplished during the year by department, fiscal policies,
and statistical information.
Also included, please find copies of the Auditor's SAS 114 Conclusion Letter, the Auditor's
Appropriations Report, and the Auditor's Internal Control Report. The Financial Statements for
the City's Component Units Lake Elsinore Public Finance Authority and Lake Elsinore
Recreation Authority are included as well.
Fiscal Impact
No fiscal impact.
Exhibits
A: City's CAFR for the Fiscal Year Ended June 30, 2016
B: Auditor's SAS 114 Conclusion Letter
C: Auditor's Appropriation Limit Report
D: Auditor's Internal Control Report
E: Financial Statements for the Lake Elsinore Public Finance Authority
F: Financial Statements for the Lake Elsinore Recreation Authority
City of Lake Elsinore 130 South Main Street
q Lake Elsinore, CA 92530
w .lake-elsinore.org
I AU
Text File
File Number: ID# 17-047
Agenda Date: 1/24/2017 Version: 1 Status: Consent Agenda
In Control: City Council File Type: Report
Agenda Number: 3)
City of Lake Elsinore Page 1 Printed on 1/19/2017
Reso No. 2017 -
Page 5 of 5
STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE ) ss.
CITY OF LAKE ELSINORE )
ATTACHMENT A
I, Susan M. Domen, MMC, City Clerk of the City of Lake Elsinore, California, do hereby
certify that Resolution No. was adopted by the City Council of the City of Lake
Elsinore, California, at the regular meeting of , and that the same was adopted
by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
Susan M. Domen, MMC
City Clerk
Reso No. 2017 - _ ATTACHMENT A
Page 4 of 5
Prolonged Lake Closure. In the event of a prolonged lake closure (more than consecutive 30
days), the City Manager may offer a 10% discount to annual pass holders for their pass purchase
the immediate following year.
Lost Pass. City of Lake Elsinore is not responsible for lost or stolen pass. Replacement of a lost
or stolen pass can be obtained for the above noted fees.
Vessel Ownership Pass Transfer. In the event that a vessel's ownership is transferred, and the
pass needs to be transferred to a new vessel, the annual pass holder must submit the old pass
to the City of Lake Elsinore and request a new pass for a fee of 10% of the original pass purchase
price. In this circumstance, the pass holder will be required to provide the new vessel's valid
registration documentation.
Proof of Address. Valid proof of address documentation shall include resident name and address
(i.e. valid government issued ID and utility bill).
Section 2: City Staff shall implement the Lake Use and La Laguna Resort and Boat Launch
Regulations and Fees as described above in Section 1. Annual passes shall depict the year in
which they are valid and shall be color coded according to pass type.
Section 3: City Staff shall post signage, update marketing materials, and update all related
websites and social media pages with the above described regulations and fees.
Section 4: This Resolution shall take effect immediately upon its adoption
Passed and Adopted this 24th day of January, 2017.
Robert Magee, Mayor
Attest:
Susan M. Domen, MMC
City Clerk
Reso No. 2017 -
Page 3 of 5
ATTACHMENT A
than 4 people per vehicle are subject to the $2 Per Person fee for all passengers over the
4 person limit.
Annual Resort Use Pass $100 per Vehicle up to 4 people for Residents,
$150 per Vehicle up to 4 people for Non-residents
Annual Resort Use Passes are available for use of day use area and parking at La Laguna
Resort and Boat Launch. An Annual Resort Use Pass is purchased per household address
and is non -transferable. Pass must be maintained in the possession of the owner at all
times. Pass is valid during La Laguna Resort and Boat Launch open hours for unlimited
use January 1 st to December 31 st. Two forms of proof of address are required for resident
discount. Military and senior (55+ years old) discounts of ten percent (10%) off are
available with valid ID. All Annual Launch Pass holders with more than 4 people per
vehicle are subject to the $2 Per Person fee for all passengers over the 4 person limit.
Annual Fishing Pass $25 per Licensed Individual for Residents
$50 per Licensed Individual for Non-residents
Annual Fishing Passes are available for fishing at La Laguna Resort and Boat Launch
only. Fishing passes are non -transferable and are required for each individual wishing to
fish with a valid State Fishing License. Pass must be displayed on licensed individual.
Passes are valid during La Laguna Resort and Boat Launch open hours for unlimited use.
Pass expires 365 days from date of purchase. Two forms of proof of address are required
for resident discount. Military and senior (55+ years old) discounts of ten percent (10%)
off are available with valid ID. All Annual Launch Pass holders with more than 4 people
per vehicle are subject to the $2 Per Person fee for all passengers over the 4 person limit.
Pass Fee Waiver. Annual Pass fees shall be waived for the following:
• Vessels owned by the City of Lake Elsinore, County, State, and Federal agencies; and,
• Active Lake Elsinore Marine Search and Rescue (LEMSAR) members (with ID proof of
membership).
Boating Safety Discount Program. The City shall provide an equivalent price discount on Annual
Lake Use Pass to boaters voluntarily taking a local (Flotilla 114-11-05 Tri Lakes) USCG Auxiliary
Boating Safety Course and receiving a certificate of completion. The Course fee is $75. This
discount would be available to individual boaters once every three (3) years. This program shall
be capped at 100 discount passes at $75 each or $7,500 per year.
Court ordered boaters taking the Boating Safety Course are NOT eligible for this discount;
however, the City will provide them one FREE Daily Lake Use Pass. This program shall be capped
at 100 FREE Passes per year. The City will issue a maximum of 100 FREE Daily Lake Use
Passes to the USCG Auxiliary Boating Safety Instructor for distribution to boaters passing said
course.
The City shall provide one (1) FREE Daily Lake Use Pass to boaters who consent and pass an
annual courtesy Boat Inspection conducted by the USCG Auxiliary. This program shall be capped
at 500 FREE Passes per year. The City will incrementally issue a maximum of 500 FREE Daily
Lake Use Passes to the USCG Auxiliary for distribution to boaters passing the inspection. The
USCG Auxiliary shall maintain a record of Boater CF#s passing the inspection.
The Boating Safety Discount Program is available based on City budgetary availability and may
be terminated at any time by the City Manager.
Non -fundable. All annual passes are non-refundable.
Reso No. 2017 -
Page 2 of 5
ATTACHMENT A
Daily Fishing Pass $5 per Licensed Individual
Daily Fishing Passes are required for fishing only at La Laguna Resort and Boat Launch
(unless Annual Fishing Pass presented). Fishing passes are non -transferable and are
required for each individual wishing to fish with a valid State Fishing License. Pass must
be displayed on licensed individual. Passes are valid during La Laguna Resort and Boat
Launch open hours for one day use only.
Regulations and Fees for Annual Passes. The following regulations shall apply and the following
non-refundable fees shall be charged to City residents and non-residents in accordance with Lake
Elsinore Municipal Code Chapters 8.40, 8.44, and 9.96 for the annual use of Lake Elsinore, City
owned launching facilities, and La Laguna Resort and Boat Launch:
Annual Lake Use Pass $100 per Motorized Vessel for Residents
$150 per Motorized Vessel for Non-residents
Annual Lake Use Passes are available for all motorized vessels using Lake Elsinore. Pass
is non -transferable and must be affixed to port (left) side of vessel, within 4" of CF#s. Pass
is valid from sunrise to sunset for unlimited use January 1st to December 31st. Vessel
registration is required. Two forms of proof of address are required for resident discount.
Military and senior (55+ years old) discounts of ten percent (10%) off are available with
valid ID.
Annual Lakefront Use Pass $100 per Motorized Vessel for Residents
$150 per Motorized Vessel for Non-residents
Annual Lakefront Use Passes are available to shoreline property owners/tenants for
motorized vessels using Lake Elsinore. An Annual Lakefront Use Pass permits launching
from own property and overnight mooring. Pass must be affixed to port (left) side of vessel,
within 4" of CF#s. A maximum four (4) non -transferable passes may be purchased per
resident address. Pass valid for unlimited use January 1st to December 31st. Grant
deed proving ownership or verification of legal tenancy and vessel registration(s) are
required to purchase pass(es). Military and senior (55+ years old) discounts of ten percent
(10%) off are available with valid ID.
Annual Commercial Lake Use Pass $350 per Pass for Resident Businesses
$500 per Pass for Non-resident Businesses
Annual Commercial Lake Use Passes are available for lake related businesses and/or
concessionaires that operate motorized vessels on Lake Elsinore. Annual Commercial
Lake Use Passes are transferable between vessels or affixed to port (left) side of vessel
within 4" of CF#s. Passes are valid sunrise to sunset for unlimited use January 1st to
December 31st. Proof of business address is required for resident business discount. In
addition, the following volume discounts are available:
5 <_ Passes = 10% Discount
• 10 5 Passes = 20% Discount
• 15 5 Passes = 30% Discount
• 20 5 Passes = 40% Discount
Annual Launch Pass $100 per Vessel
$150 per Vessel for Non-residents
Annual Launch Passes are available for launching and parking at City owned launching
facilities. An Annual Launch Pass is purchased per vessel and is non -transferable. Pass
must be affixed to port (left) side of vessel, within 4" of CF#s. Pass is valid during facility
open hours for unlimited use January 1 st to December 31 st. Two forms of proof of address
are required for resident discount. Military and senior (55+ years old) discounts of ten
percent (10%) off are available with valid ID. All Annual Launch Pass holders with more
Reso No. 2017 -
Page 1 of 5
RESOLUTION NO. 2017 -
ATTACHMENT A
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE,
CALIFORNIA, LAKE USE AND LA LAGUNA RESORT AND BOAT LAUNCH
REGULATIONS AND FEES
Whereas, the City of Lake Elsinore is required by the State of California to maintain the Lake for
public park and recreation purposes in perpetuity;
Whereas, the City Council of the City of Lake Elsinore is desirous of providing adequate services
for operating and maintaining Lake Elsinore for the benefit of the boating public;
Whereas, the City Council is desirous of increasing tourism, economic development and
enjoyment of Lake Elsinore by boaters;
Whereas, the fees collected pursuant to this resolution shall be used for operating and
maintaining the Lake for use by the public;
WHEREAS, the City Council now desires to modify the use fees for the Lake by adopted the
Schedule of Fees as set forth herein.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DOES
HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS:
Section 1: Regulations and Fees for Daily Passes. The following regulations shall apply and the
following non-refundable fees shall be charged to City residents and non-residents in accordance
with Lake Elsinore Municipal Code Chapters 8.40, 8.44, and 9.96 for the use of Lake Elsinore,
City owned launching facilities, and La Laguna Resort arid'Boat Launch:
Daily Lake Use Pass $10 per Motorized Vessel
A Daily Lake Use Pass is required for all motorized vessels using Lake Elsinore (unless
Annual Lake Use Pass presented). Non -motorized vessels are not required to purchase
or maintain a lake use pass on the vessel. Passes are non -transferable and must be kept
on the vessel at all times while on Lake Elsinore. Passes are valid sunrise to sunset for
one day use only.
Daily Launch Pass $10 per Vehicle up to 4 people,
$2 per Person over 4 people
A Daily Launch Pass is required for launching and parking at City owned launching
facilities (unless Annual Launch Pass presented). Daily Launch Passes are required for
each tow vehicle. Passes are non -transferable and must remain in vehicle dashboard at
all times. Passes are valid during facility open hours for one day use only.
Daily Resort Use Pass $10 per Vehicle up to 4 people,
$2 per Person over 4 people
$3 per Person Walk-in
A Daily Resort Use Pass is required for use of day use area and parking at La Laguna
Resort and Boat Launch only (unless Annual Resort Pass presented). Daily Resort Use
Passes are required for each vehicle or individual walk-in. Passes are non -transferable
and must remain in vehicle dashboard, or on the person if a walk-in. Passes are valid
during La Laguna Resort and Boat Launch open hours for one day use only.
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(Subject Matter 1-4 words only)
Volume Discounts:
Annual Launch Pass
Annual Resort Use Pass
Annual Fishing Pass
• 5 5 Passes = 10% Discount
• 10 < Passes = 20% Discount
15 <_ Passes = 30% Discount
20 <_ Passes = 40% Discount
$100 per Vessel for Residents
$150 per Vessel for Non-residents
$100 per Vehicle up to 4 people for Residents,
$150 per Vehicle up to 4 people for Non-residents
$25 per Licensed Individual for Residents
$50 per Licensed Individual for Non-residents
The proposed Resolution also details the proposed actions regarding regulations and fees in
situations of special circumstances, such as lost pass, prolonged lake closure, etc.
City Staff are supportive of this proposal and are prepared to implement the detailed regulations
and fees. Staff would prepare the applicable passes for sale, post signage, update marketing
materials, and update all related websites and social media pages.
Fiscal Impact
Due to the request of these additional pass options being requested by the public, Staff
anticipates increased lake use and use of La Laguna Resort and Boat Launch. Although
unquantifiable at this time, Staff anticipates this additional lake use and facility use to result in
increased revenue to the City.
Exhibits
A — Resolution
B — Summary of Lake Use and La Laguna Resort and Boat Launch Regulations and
Fees
Page 2 of 2
CITY OF
LADE Cog, LSI110RE
DREAM EXTREME
REPORT TO CITY COUNCIL
To: Honorable Mayor and Members of the City Council
From: Grant Yates, City Manager
Prepared by: Audrey Young
Date: January 24, 2017
Subject: Lake Use and La Laguna Resort and Boat Launch Regulations and Fees
Recommendation
It is Recommended that the City Council Adopt RESOLUTION No. 2017 -XXX Approving
Adjustments and Additions to the LAKE USE AND LA LAGUNA RESORT AND BOAT LAUNCH
REGULATIONS AND FEES Per Chapters 8.40, 8.44, And 9.96 of the Lake Elsinore Municipal
Code.
Background
On March 22, 2016, the City Cnuncil adopted Ordinance Numbers 2016-1352, 2016-1353, and
2016-1354, amending Chapters 8.40, 8.44, and 9.96 of the Municipal Code. The Ordinances
were updated to accommodate for new lake use laws that are reflective of the public's desires
regarding lake use, parks and beaches, and fishing. In order to better serve the public's desires,
one of the components of the Ordinances that was amended and added is the types of lake use,
launching, and day use passes offered for lake use and use of La Laguna Resort and Boat
Launch.
Discussion
The City hereby proposes the regulations and fees, as detailed in the Exhibit A and summarized
in Exhibit B. Previously existing regulations and fees were not revised, however new additional
volume discounts, pass options, and the associated fees are proposed as follows:
Daily Resort Use Pass $10 per Vehicle up to 4 people,
$2 per Person over 4 people
$3 per Person Walk-in
Daily Fishing Pass $5 per Licensed Individual
Annual Commercial Lake Use Pass $350 per Pass for Resident Businesses
$500 per Pass for Non-resident Businesses
Page 1 of 2
UlKEOLYhOlU
Agenda Date: 1/24/2017
In Control: City Council
Agenda Number: 2)
City of Lake Elsinore
Text File
File Number: RES 2014-008
Version: 1
130 South Main Street
Lake Elsinore, CA 92530
w lake-elsinore.org
Status: Consent Agenda
File Type: Resolution
City of Lake Elsinore Page 1 Printed on 111912017
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City of Lake Elsinore, California
Statistical Section Contents
June 30, 2016
The City of Lake Elsinore's comprehensive annual financial report presents detailed information as a context for
understanding what the information in the financial statements, note disclosures, and required supplementary information
say about the government's overall financial health. The statistical section offers operational, economic, and historical data
that provide a context for assessing the City's economic condition.
CONTENTS
PAGES
Financial Trends
These schedules contain trend information to help the reader understand how the government's
financial performance and financial health have changed over time. 166- 175
Revenue Capacity
These schedules contain information to help the reader assess the government's most significant local
revenue sources, sales taxes and property tax. 176- 183
Debt Capacity
These schedules present information to help the reader assess the affordability of the government's
current levels of outstanding debt and the government's ability to issue additional debt in the future. 184- 189
Demographic and Economic Information
These schedules offer demographic and economic indicators to help the reader understand the
environment within which the government's financial activities take place. 190- 191
Operating Information
These schedules contain service and infrastructure data to help the reader understand how the
information in the government's financial report relates to the services the government provides
and the activities it performs.
192- 195
165
GOVERNMENTAL ACTIVITIES
Net Investment in
Capital Assets
Restricted
Unrestricted
Total Governmental
Activities Net Position
Source: City Finance Department
City of Lake Elsinore, California
Net Position By Component
Last Ten Fiscal Years
(accrual basis of accounting)
Fiscal Year
2007 2008 2009 2010
97,3697896 $ 125,539,928 $ 141,550,858 $ 142,968,348
173,307,658 151,937,522 122,099,858 110,984,917
(92,504,071) (96,240,481) (96,792,528) (93,859,128)
$ 178,173,483 $ 181236,969 $ 166,858,188 $ 160.094,137
166
2011
2013
Fiscal Year
2014
2015 2016
$ 14L427,875
$ 134,976,102
$ 147,176,443
$ 131,965,428
$ 137,914,627
$ 145,170,561
134,777,767
14L619,986
75,129,411
74,462,124
90,537,124
75,054,285
(110,573,961)
(48,524,474)
(2,804,065)
7,500,328
(11503,489)
(10,180,146)
$ 165,631,681
$ 228,071,614
$ 219,501,789
$ 213,927.880
$ 215,948,262
$ 210,044,700
167
City of Lake Elsinore, California
Changes in Net Position
Expenses and Program Revenues
Last Ten Fiscal Years
(accrual basis of accounting)
Source: City Finance Department
168
Fiscal Year
2007
2008
2009
2010
EXPENSES
Governmental Activities:
General Government
$ 10,414,729
$ 8,195,897
$ 10,561122
$ 10,252,727
Public Safety
11,686,158
14,293,269
11139,389
11,022,531
Community Development
21,514,552
32,342,175
31,976,146
15,847,532
Public Services
9,867,133
10,861,673
14,123,738
14,811199
Community Services
6,801,741
6,013,006
4,732856
4,295,719
Interest on Long-term Debt
11,531.570
10,145,830
10.168,917
10,509.806
Total Governmental Activities
Expenses
71,815,883
81,851,850
84,708.168
66,740,514
PROGRAM REVENUES
Governmental Activities:
Charges for Services:
General Government
9,204,517
6,885,167
4,828,438
3,181,706
Public Safety
_
_
_
_
Community Development
4,362,650
3,960,353
1,064,036
924,493
Public Services
-
_
_
_
Community Services
1,364,513
1,422,754
1,482,146
1,578,779
Operating Grants and Contributions
57043,547
4,109,188
6,482,888
4,561,669
Capital Grants and Contributions
42,085,516
2,159,798
-
-
Tnlal Gnvet'mnenlal Activities
Program Revenues
62,060,743
18,537,260
13,857.508
10,246.647
NET REVENUES (EXPENSES)
Governmental Activities
(9,755,140)
(63,314,590)
(70.850,660)
(56,493,867)
Total Net Revenues (Expenses)
$ (9,755,140)
$ (63,314,590)
_L__(70,850,660)
$ (56,493.867)
Source: City Finance Department
168
Fiscal Yeas
2011
2012
2013
2014
2015
2016
$ 11,079,707
$ 11,944,507
$ 8,831983
$ 7,836,775
$ 8,617,841
$ 6,477,776
11,212,605
11, 91 1.363
12,684,631
14,485, 711
18, 626,488
19.098,659
16,060,065
4,989,313
10,242,652
9,079,863
7,391,688
4,005,355
8,145,956
9,834,764
10,359,134
10,610,540
11,162,854
18,668,180
4,704,242
7,OIQ026
4,416,500
4,819,153
4,652,536
5,411,152
71674,342
8.835312
6,451,470
6,330,889
809Z248
11,204.357
58.876,917 54525,285 52,988.370 53.162,931 58,548,655 64.865.479
3,167,346
1035,324
456,760
46U08
1,464,689
734,034
-
-
700,069
1,067,440
1,427,632
1,922,602
1,508,526
1,247,117
4,381,899
5,018,102
3,905,472
4,660,580
-
-
1,117,800
1,574,245
2329,172
2,977,138
1,586,602
1,578,318
2,8^2,458
3,112,662
2,405,100
2,977,699
3,292,972
3,306,452
12,172,208
20,954,573
20,141,320
19,883,338
6,573,426
4.539.293
9,587,008
6,485,279
21.044.552
5.901.491
16,128,872
13.706.504
31,238,202
38,673,109
52.717,937
39,056,882
(42,748,045)
(40,818,781)
(21,750,168)
(14,489,822)
(5,830,718)
(25,808,597)
$ (42,748,045)
$ (40.818.781)
$ (21,750.168)
$ (14,489.822)
$ (5,830,718)
$ (257808,597)
169
City of Lake Elsinore, California
Changes in Net Position
General Revenues, Special and Extraordinary Items
Last Ten Fiscal Years
(accrual basis of accounting)
Somme: City Finance Department
170
Fiscal Year
2007
2008
2009
2010
GENERAL REVENUES
Governmental Activities
Taxes
Property Taxes
$ 26,685,369
$ 33307,785
$ 31,590,868
$ 25,904,948
Sales Taxes
7,836,334
8,148,355
6,414,419
6,236,748
Franchise Taxes
L688,010
1,768,178
1,824,890
1,792,699
Other Taxes
1,020,788
770,024
751,794
519,001
Fines, Forfeitures and Penalties
599,894
918,619
937,506
733,792
Investment Earnings
17,220,975
14,271,312
9,334,141
7,470,635
Miscellaneous
5,839,608
7,193,803
5,768,257
6,661,239
Special Item
Loss on CFD and AD Investments
-
-
-
_
Extraordinary Item
Gain on Dissolution of
Redevelopment Agency
-
-
-
-
Total General Revenues, Special
and Extraordinary Items
60.890,978
66.378.076
56.621,875
49,319,062
CHANGES IN NET POSITION
Governmraaai Activities
51,135,838
3,063.486
(14,228,78::p
- =(7,1 74,805)
Total Changes in Net Position
$ 51,135,838
$ 3.063.486
$ (74,228.785)
$ (7,174,805)
Somme: City Finance Department
170
Fiscal Year
2011 2012 2013 2014 2015 2016
$ 24,237,023
$ 14,698,032
$ 5,804,265
$ 5,487,743
$ 6,276,548 $
6,537,540
7,190,695
7,444,947
6,935,215
8,031,486
8,572,066
9,939,637
1,913,807
2,002,550
2,097,081
2,275,619
2,389,413
2,423,707
481556
538,402
567,560
760,203
767,058
838,364
972,457
17850,398
591185
507,265
683,573
-
7,782,639
8,031,256
689,149
574,477
966,365
925,517
5,705,412
67992,813
688,105
1,054,958
1,022,472
706,094
-
-
-
(9,88U91)
(4,502385)
-
61.700,316 - - - -
48,285589 103.258.714 17,373,560 8,810,860 16. 175,110 21.370.859
5,537,544 62.439.933 (4,376.008) (5,678,962) 10,344,392 (4,437,738)
$ 5.537.544 $ 62.439.933 $ (4376,008) $ (5.678,962) $ 10344392 $ (4,437,738)
171
City of Lake Elsinore, California
Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
ALL OTHER GOVERNMENTAL
FUNDS
Reserved
Unreserved, Reported In
Special Revenue Funds
Debt Service Funds
Capital Projects Funds
Total All Other Governmental Fund;
GENERALFUND
Nonspendable
Unassigned
Total General Fund
ALL OTHER GOVERNMENTAL
FUNDS
Nonspendable
Restricted
Assigned
Unassigned
$ 215,008,475 $ 188,270,868 $ 163,768,859 $ 161,473,544
7,921,415
10,731,428
Fiscal Year
6,999,090
(10,006,673)
(5,375,005)
2007
2008
2009
2010
GENERALFUND
5,497,137
$ 225,964,727
$ 202,451565
Reserved
$ 9,936,859
$ 9,476,355 $
8,58004 $
8,589,723
Unreserved
10,496,356
9,285,492
8.762.248
6327.596
Total General Fund
$ 20.433.215
$ 18,761.847 $
17342,932 $
14,917,319
ALL OTHER GOVERNMENTAL
FUNDS
Reserved
Unreserved, Reported In
Special Revenue Funds
Debt Service Funds
Capital Projects Funds
Total All Other Governmental Fund;
GENERALFUND
Nonspendable
Unassigned
Total General Fund
ALL OTHER GOVERNMENTAL
FUNDS
Nonspendable
Restricted
Assigned
Unassigned
$ 215,008,475 $ 188,270,868 $ 163,768,859 $ 161,473,544
7,921,415
10,731,428
5,241,416
6,999,090
(10,006,673)
(5,375,005)
(3,841,954)
(283051645)
13.041,510
8,824,274
2,966,273
5,497,137
$ 225,964,727
$ 202,451565
$ 168.134,594
$ 145,664,126
$
11
Total All Other Governmental Fundi $ - $ $ - $ -
Note: GASB 54 was implemented in fiscal year 2011, prim years have no comparable data for these categories of fund balance.
Source: City Finance Department
172
Fiscal Year
2011 2012 2013 2014 2015 2016
$ 4,027,179 $ 2,505,503 $ 1,821,906 $ 1,264392 $ 1,016,468 $ 1,029,015
10,788,602 Q6,885 ' 12,017,317 10,488.843 10.954,475 11.365.894
$ 14,815.781 $ 14.332.388 $ 13,839.223 $ 11.753,235 $ 11,970M3 $ 12,394.909
$ 84,348,929
$ 76,688,811
$ 20,003
$ 20,003
$ 132,037 $
124,177
105,281,543
797291713
201134,812
199,162,404
335,415,122
303,860,121
11,255,852
12,548,403
1,034,681
1,232,105
1,929,497
1,548,764
(38,062,318)
(987,601)
(905-426)
(1,014,226)
(1,316,398)
(891)
$ 162,824,006
$ 167.542,326
$ 202.284,070
$ 199.400.286
$ 336.160,258 $
305.532.171
173
City of Lake Elsinore, California
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
REVENUES
Property Taxes
Other Faxes
Licenses, Permits and Fees
Intergovernmental Revenues
Charges for Services
Fines, Forfeitures and Penalties
Investment Iarnings
Special Assessments
Contributions from Property Owners
Miscellaneous
Total Revenues
EXPENDITURES
Current:
General Government
Public Safety
Community Development
Public Services
Community Services
Pass-through Payments
Set Aside Suspension
SEIiAI Payments
Capital Outlay
Debt Service:
Payment to Escrow Agent
Bond Issuance Costs
Principal Retirement
Interest and F;iscal_Cha%es
'Ictal Expenditures
Excess(Deficiency)of Revenues
Ovcr(Under) Expenditures
OTHER FINANCING SOURCES (USES)
Transfers In
'fmnsfers Out
Debt Issuance
Loans Issued
Loan Payments
Premiums
Discounts
Refunding Bonds Issued
Certiticales of Participation Issued
'fax Allocation Bonds Issued
Capital Debt Issued
Sale of Capital Assets
Payment to Refunded Bond Escrow Agent
Toto] Other Financing Sources (Uses)
Not Change in Fund Balances before
Special and Extraordinary Items
Extraordinary/Special hems
Net Change in Fund Balances
Debt Service as a Percentage of
Noncapital B,xpendihues
Fiscal Yeai
2007
2008
2009
2010
$ 26,685,369
$ 33307,785
$ 31,590.,868
$ 25,429,344
10,503,108
10,741,363
9,071,246
8,517,826
7,775,477
6,266,086
2,267,568
2,587,918
2,700,185
4,109,188
3,630,144
7,322,908
5,791,690
4,579,433
3,548,413
1,594,774
599,894
918,619
937,506
733,792
17,268,845
14,237,891
9,445,099
7,928,611
1,364,513
1,422354
1,482,146
1,578,779
42,085,516
2,159,798
-
-
5 839,608
7,193 803
5,768,257
6,910,516
120,614,205
84 936,720
67,741,247
62,604,468
8,548,606
6,190,346
6,479,795
6,797,320
11,686,158
14,293,269
13,139,389
11,022,531
3,481,278
4,549,297
4,662,003
3,049,501
8,431,702
9,321,939
12,202,971
12,901,064
6,063,747
5,221,331
3,750,267
3,313,082
7,006,699
9,878,294
9,647,322
7,782,513
-
-
-
3,750,000
-
-
-
6,976,853
25,236,661
49,056,332
38,113,875
4,394,834
-
-
-
1,987,745
-
1,213,789
-
1,584,965
4,979,674
3,872,984
5,469,538
6,037,770
11,492,802
10,132679
10,066,977
_10,318,720
86,927327
113,730,260
103,532137
79,916,898
33,686,878
(28393,540)
(35.790,890)
(17,312,430)
7,089,415 6,412,891
4,386,162 4,500,694
(7,0897415) (6,412,891)
(4,386,162) (4,500,694)
- -
- 26,290,000
- -
- (23,235,000)
- 274,026
- -
- (3,117)
- (166,785)
- 22,295,000
- 26,290,000
- 3,265,000
-
- (22,221,899)
(22,082 648)
- 3,609,010
7,095,567
33,686,878 (25, 1 8,L530)
(35,790,890) (10,216,863)
$ 33-686,878 $ (25.184,530) $ (35,790,890)
$ (10,216,863)
27% 24% 24% 26%
"Phe City of Lake Elsinore tins elected to show ten years of data for this schedule. The fiscal year of2012 takes into account the
dissolution of the Redevelopment Agency ofllre City of Lake Elsinore.
Source: City Finance Department
174
Fiscal Year
2011 2012 2013 2014 2015 2016
$ 24,443,046
$ 14,738,584
9,557,873
9,911,400
3,291,938
2,908,091
4,680,095
6,193,777
1,383,934
1,374,351
972,457
1,850,398
7,147,497
7,180,018
1,586,602
1,578,318
5,352,614
1,221,184
5,608,837
7,384.749
64,024M3
54,340,870
5,844,498
$ 5,495,091
9,572,675
11,043,792
4,999,154
5,936,900
5,055,511
5,582,705
1,746,713
2.409,558
927,315
931,168
12,122,739
10,315,842
1,585,606
1,641,557
8,079,739
5,985,053
3,469,837
3,545,812
53,403.787
52,887478
$ 6,249,786
11,705,293
4,655,325
5,812,486
3,189,138
1,088,411
7,972,858
1,671,595
22,535,167
4,099,189
68,979,248
$ 6,551,939
13,178,135
6,894,107
6,807,169
2,453,380
1,103,154
11,117,857
1,680,980
6,219,934
3,574,278
59,580,933
8,904,165
7,467,755
5,871,649
4,788,505
4,611,722
5,318,933
11,212,605
11,911,364
12,339,592
14,093,095
18,163,150
18,614,077
18,805,484
1,608,782
2,925,329
3,407,415
6,200,761
4,164,059
6,221,286
7,800,095
6,772,010
7,107,120
6,551,578
6,345,398
3.714,646
5,963,873
4,281,401
4363,257
4,174,545
4,984,422
7,655,170
3,542,473
-
-
-
-
1,436,411
-
-
-
-
-
2,931,038
10,268,753
m889,810
8,992,686
11,123,256
20,106,238
1,832,080
-
-
-
-
982,386
1,874,527
238,290
1,26U59
1,485,399
2,445,261
6,515
6,928,822
6,091,578
5,725,000
18.385,000
7,165,000
7,375,000
- ` 9,046,095
7.951-971
6,081,766
6,091,389
6,2 C581
17,468,287
80,562,329
62,844934
56.146,616
68,713-866
66,666,854
79,365315
(16,537.436)
(8,504,064)
(2,742,829)
(15 826,388)
2,312,394
(19,784382)
6,186,205
2,509,613
2,235,297
1,851,084
10,947,946
18,142,559
(6,186,205)
(2,509,613)
(2,235,297)
(1,851,084)
(10,947,946)
(19,791,262)
47,780,000
-
-
-
-
-
(27,495,000)
-
-
-
-
-
-
-
IM640
14,460,000
12,151,673
-
(621302)
(30,000)
(23,125)
(149,044)
(96,307)
-
29,435,000
1,405,000
27,760,000
25,335,000
137.845,000
-
-
-
-
-
7,965,000
-
10,160,000
-
-
-
-
-
-
-
-
-
13,362
14,743
(25,662,920)
(1,345,000)
(3,244386)
(19,013,502)
(1$542,280)
33,595,778
30,000
24,613.129
20,632,454
139.336,448
(1,633,960)
17,058,342
(8,474,064)
21,870,300
4,806,066
141,648,842
(21,418,342)
11.708,991
(9,880.891)
(4,502385)
(7319.955)
$ 17.058342 $
3.234.927 $
21,870300
$ (5,074,825) $
137,146,457
$ (28,738,297)
25%
27%
29%
40%
24%
28%
175
City of Lake Elsinore, California
Governmental Activities Tax Revenues by Source
Last Ten Fiscal Years
Fiscal
Year Ended
Property
Franchise
.lune 30
Taxes
Sales Taxes
Taxes
Other Taxes
Total
2007
$ 26,685,369
$ 7,836,334
$ 1,688,010
$ 1,020,788
$ 37,230,501
2008
33307,785
8,148355
1,768178
770,024
43,994,342
2009
31,590,868
6,414,419
1,824,890
751,794
40,581,971
2010
25,904,948
6,236,748
1,792,699
519,001
34,453,396
2011
24,237,023
7,190,695
1,913,807
483,556
33,825,081
2012
14,698,032
7,444,947
1002,550
538,402
24,683,931
2013
5,804,265
6,935,215
2,097,081
567,560
15,404,121
2014
5,487,743
8,031,486
2,275,619
760,203
16,555,051
2015
6,276,548
8,572,066
2,389,413
767,058
18,005,085
2016
6,537,540
9,939,637
2,423,707
838,364
19,739,248
Note: Property taxes significantly decreased in 2012 and in subsequent years duc to the dissolution
of the Lake Elsinoro Rodtvelupwcut Agency on February 1, 2012.
Sources: City of Lake Elsinore Finance Department
176
City of Lake Elsinore, California
Taxable Sales by Major Industry Groups
Last Ten Fiscal Years
Fiscal
General
Autos
Business
Restaurants
Building
Year Ended
Consumer
and
and
and
and
June 30
Goods
Transportation
Industry
Hotels
Construction
2007
$ 2,154,666
$ 1,592,920
$ 435,066
$ 646,488
$ 800,687
2008
2,317,488
1,436,593
363,034
684,387
739,634
2009
2,221,776
895,720
253,028
682,798
644,591
2010
2,235,363
794,700
167,078
651,995
596,944
2011
2,361,769
890,865
175,895
641,608
602,028
2012
2,419,664
962,971
253,830
678,111
618,795
2013
2,528,412
1,014,135
213,857
711,110
650,148
2014
2,473,302
1,040,650
406,542
783,964
768,931
2015
2,547,975
1,428,726
430,417
857,198
838,876
2016
2,634,703
1,614,074
426,315
903,775
923,941
Note: Due to confidentiality issues, the names of the ten largest revenue payers are not available. The categories
presented are intended to provide alternative information regarding the sources of the City's revenue.
Sources: State Board of Equalization and Hdl, Companies
177
Fuel
Food
and
and
Service Stations
Drugs
-
$ 952,793
$ 504,832
1,070,889
492,445
1.,030,792
446,255
964,291
444,685
1,033,721
437,268
1,046,935
558,890
990,747
656,593
1,023,468
622,414
925,698
641,504
901,585
633,606
Other
and
Transfers
Total
$ 133
$ 7,087,585
35,556
7,140,026
-
6,174,960
4,209
5,859,265
4,073
6,147,227
5,759
6,544,955
5,279
6,770,281
(138)
7,119,133
133
7,670,527
(3,586)
8,034,413
178
City of Lake Elsinore, California
Direct and Overlapping Property Tax Rates
Last Ten Fiscal Years
(rate per $100 of taxable value)
AGENCY
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
City Basic Levy'
1.00000
1.00000
1.00000
1.00000
1.00000
1.00000
1.00000
1.00000
1.00000
1.00000
Menifee School Dist,
0.00578
0.00549
0.02370
0.03254
0.03436
0.03486
0.03543
0.03421
0.03275
0.03010
Mello Water East
0.00470
000450
0.00430
0.00430
0.00370
000370
0.00350
0.00350
0.00350
000350
Metro Water West
0.00470
0.00450
0.00430
0.00430
0.00370
0.00370
000350
0.00350
0.00350
0.00350
Mt San Jacinto Jr. College
0.00000
0.00000
0.00000
0.00000
0.00000
0.00000
0,00000
0.00000
0.00000
0.01394
Perris School Dist.
0.00000
0.02999
0.02894
0.02485
0,01983
0.01983
0.01800
0.02524
0,05588
0.04699
Perris Union High School
0.03222
0,02110
0.02031
0.02686
0.03126
0.03429
0.03429
0.06970
0.063(13
0.06236
'total Direct &
Overlapping' Tax Rates
1.04740
1.06558
1.08155
1,09285
1.09285
1.09638
1.09472
1.13615
1.15866
1,16039
City's Share of 1%
Levy Per Prop 13'
0.17415
0.17415
0.17415
0.17415
0.17415
0.17415
0.17415
0.17415
0.17415
0.17415
GENERAL OBLIGA'T'ION DEB'r RATE
RDA Basic Rate' 1.00470 1,00450 1.00430 1.00430 1.00370 1.00370 0.00000 0.00000 0.00000 000000
I and Direct Rates 0.54010 0.51623 0.51775 0.53513 0.53306 0.52110 451923 0.08908 008528 0.08349
Notes:
11a,19,78, the voters of the State of California passed Proposition 13 which set the property tax rate at a 1.00% fixed amount. This 1.00% is
shared by all taxing agencies for which the subject property resides within. In addition to the , 0l%fixed amount, property owners are
charged taxes as a percentage of assessed property values lot the payment of any voter approved bonds.
'Overlapping rates are those of local and county governments that apply to property owners within the City. Not all overlapping rates
apply to all city property owners.
'City's Share of 1% levy is based on the City's share of the general fund tax rate area with die largest net taxable value within the city.
ERAF general find tax shifts may not be included in tax ratio figures.
4Redevelopment Rate is based on the largest RDA tax rate area and only includes rates) from indebtedness
adopted prior to 1989 per California State statute. RDA direct and overlapping rates are applied only to the incremental property values.
The approval of ABXI 26 eliminated Redevelopment from the State of California for the fiscal year 2012/13 and years thereafter.
'Total Direct Rate is the weighted average ofall individual direct rates applied by the government preparing the statistical section
information and excludes revenues derived from aircraft. Beginning in 2013/14 theTotal Direct Rate no longer includes revenue generated
from the former redevelopment tax rate ueas. Challenges to recognized enforceable obligations are assumed to have been resolved during
2012/13, For the purposes of this report, residual revenue is assumed to be distributed to the City in the same proportions as
general fund revenue.
Source: Riverside County Assessor 2006/07 - 2015/16 Tax Rate'I-able
179
City of Lake Elsinore, California
Principal Property Tax Payers
Current Year Compared to 2007
Source: Riverside County Assessor 2015/16 and 2006/07 Combined Tax Rolls and the S13E Non Unitary Tax Roll
180
2016
2007
Percent of
Percent of
Total City
Total City
'Taxable
Taxable
Taxable
Taxable
Assessed
Assessed
Assessed
Assessed
TAXPAYER
Value
Value(l)
Value
Value (2)
Plaza Apartments Investment
$
48,322,624
1.00%
$ -
0.00%
Pacific Aggregates, Inc.
31,154,009
0.64"/
-
0.00%
Rivers Edge Apartments LLC
24,582,856
0.51%
-
0.00%
Iletf Canyon Hills Market Place
23,485,000
0.48%
-
0.00%
Mohr Affinity, LLC
23,236,130
0.48%
-
0.00%
Walmart Sores Inc.
22,936,165
047%
-
0.00%
Lake Elsinore Marketplace
20,826,854
0.43%
-
0.00%
Costeo Wholesale Corporation
2U32,089
0.42%
-
0.00%
Castle & Cooke Lake Elsinore West Inc.
17,593,627
0.36°%
-
0.00%
Elsinore VETO
17,424,711
0.36"%
14,674,040
0.40°%
Pulte Home Corporation
- - -
0-00%
8Q.213,563
2.19%
Centex I Iomes
-
0-00%
73,198,266
1.99%
MCG Outlet Centers, LP
-
0.00%
40,131,240
1.09%
Pardee Homes
-
0.00°%
27,226,927
0.74%
Wasson Canyon Moldings
-
0.00%
19,364,700
0.53%
Castle and Cooke Alberhill Ranch
-
0.00%
18,605,021
0.51%
Laing CP Lake Elsinore
-
0.00°%
17,626.602
0.48%
K6 Homes Coastal ]tic
-
0.00%
16,061.880
0.44%
Albertson lire
-
0.00%
16,047,564
0.44%
$
249,794065
5.15%
$ 323,149,803
8.80%
(1) 2015-16 Local Seemed Assessed Valuation:
$
4,848,355,214
(2) 2006-07 Local Secured Assessed Valuation:
$
3,670,623,178
Source: Riverside County Assessor 2015/16 and 2006/07 Combined Tax Rolls and the S13E Non Unitary Tax Roll
180
City of Lake Elsinore, California
Property Tax Levies and Collections
Last Ten Fiscal Years
Note. The amounts picsented include City of Lake Elslirore property taxes only (excludes Redevelopment Agency taxes).
Sources: County of Riverside. Auditor -Controller
City of Lake Elsinore Finance Department
181
Collected within the
Fiscal
'Taxes Levied
Fiscal Year of Levy
Collections in
Total Collections
to Date
Year Ended
for the
Percent
Subsequent
Percent
.lune 30
Fiscal Year
Amount
of Levy
Years
Amount
of Levy
2007
$ 1,714,890
$ 1,485,890
86.65%
$ 80,918
$ 1,566,808
91.36%
2008
2,208,181
1,797,013
81.38%
157,326
1,954,340
88.50%
2009
2,230,658
1,650,569
73.99%
250,474
1,901,043
85.22%
2010
1,894,552
1,643,583
86.75%
209,977
1,853,560
97.84%
2011
1,900,256
1,767,798
93.03%
121,988
1,889,786
99.45%
2012
1,874,319
1,770,492
94.46%
67,549
1,838,040
98.06%
2013
1,844,800
1,767,808
95.83%
64,528
1,832,336
99.32%
2014
1,935,629
1,822,844
94.17%
50,284
1,873,128
96.77%
2015
2,171,126
2,074,751
95.56%
43,741
2,118,492
97.58%
2016
2308,803
2,300,196
99.63%
61,115
2,361,311
102.27%
Note. The amounts picsented include City of Lake Elslirore property taxes only (excludes Redevelopment Agency taxes).
Sources: County of Riverside. Auditor -Controller
City of Lake Elsinore Finance Department
181
VLSI.--
City of Lake Elsinore, California
Assessed Value and Estimated Actual Value
of Taxable Property
Last Ten Fiscal Years
Notes:
n/a =not available
In 1978 the voters of the State of California passed Proposition 13 which limited property taxes to a total maximum
rate of 1% based upon the assessed value of the property being taxed. Each year, the assessed value of property
may be increased by an "inflation factor" (limited to a maximum increase of 2%). With few exceptions, property
is only reassessed at the time that it is sold to a new owner. At that point, the new assessed value is reassessed
at the purchase price of the property sold, The assessed valuation data shown above represents the only data
currently available with respect to the actual market value of taxable property and is subject to the limitations
described above.
'In accordance with the timeline set' forth in Assembly Bill 1X 26 (as modified by the California Supreme Court on
December 29, 2011) all redevelopment agencies in the State of California were dissolved and ceased to operate
as a legal entity as of February 1, 2012.
''fatal Direct Rate is the weighted average of all individual direct rates. Beginning on 201314, the Direct Rate no
longer includes revenue generated from the former redevelopment tax rate areas.
Source: Riverside County Assessor 2015/16 Combined "Fax Rolls
182
City
Fiscal Year
Taxable
Ended
Less:
Assessed
,June 30
Secured
Unsecured
Exemptions
Value
2007
$ 3,586,250,650
$ 84372,528
n/a
$ 3,670,623,178
2008
4,805,770,856
119,986,192
n/a
4,925,757,048
2009
4,813,251,955
114,156,049
n/a
4,927,408,004
2010
3,957,216,079
104,903,811
n/a
4,062,119,890
2011
3,780,316,703
148,435,245
n/a
3,928,751,948
2012
3,777,595,058
145,931,118
11/a
3,923,526,176
2013
3,666,499,221
1677898,562
n/a
1834397,783
2014
3,888,934,354
142,565,053
n/a
4,031,499,407
2015
4,463,835,597
136,300,859
(105,231,318)
4,494,905,138
'x)16
4,768,722,323
129,261,454
(93,034,816)
-. '' 4,804,948,961
Notes:
n/a =not available
In 1978 the voters of the State of California passed Proposition 13 which limited property taxes to a total maximum
rate of 1% based upon the assessed value of the property being taxed. Each year, the assessed value of property
may be increased by an "inflation factor" (limited to a maximum increase of 2%). With few exceptions, property
is only reassessed at the time that it is sold to a new owner. At that point, the new assessed value is reassessed
at the purchase price of the property sold, The assessed valuation data shown above represents the only data
currently available with respect to the actual market value of taxable property and is subject to the limitations
described above.
'In accordance with the timeline set' forth in Assembly Bill 1X 26 (as modified by the California Supreme Court on
December 29, 2011) all redevelopment agencies in the State of California were dissolved and ceased to operate
as a legal entity as of February 1, 2012.
''fatal Direct Rate is the weighted average of all individual direct rates. Beginning on 201314, the Direct Rate no
longer includes revenue generated from the former redevelopment tax rate areas.
Source: Riverside County Assessor 2015/16 Combined "Fax Rolls
182
183
Successor Agency for the Redevelopment Agency
Taxable
Total
Less:
Assessed
Direct Tax
Secured
Unsecured
Exemptions
Value
Rate
$ 7,977,886,856
$ 79,195,924
n/a $
1,997,082,780
0.54010%
2,393,710398
100,647,142
n/a
2,494,357,540
0.51623%
2,417,198,603
91,268,375
n/a
2,502,466,978
0.51775%
2,077.411,999
83,367,167
n/a
2,760,779,166
0.53513%
7.998,889,644
79,994,003
n/a
2,078,881647
0.53306%
1.955,649,172
78,927,893
n/a
2,034,577,065
0.52110%
1,880,967,030
110,109,381
n/a
1,991,076,411
0.51923%
1,938,704,040
89,830,332
n/a
2,028,534372
0.08908%
2,135,333,435
83,968,122
(71,673,963)
1147,627,594
0.08528""%
n/a
n/a
n/a
n/a
0.08349%
183
City of Lake Elsinore, California
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements.
Source: City Finance Department; California State Department of Finance
184
Governmental Activities
Fiscal Year
Local
Tax
Subordinate
Revenue/
Developer/
Ended
Agency
Allocation
Tax Allocation
Revenue Refunding
Owner
June 30
Revenue Bonds
Bunds
Bonds
Bonds
Agreements
2007
$ 55,845,000
$ 55,175,000
$ -
$ 14,760,000
$ 3,933,650
2008
58.755,000
54,010,000
-
14,435,000
3,635,257
2009
56,745,000
52,785,000
-
14,095,000
3,441,041
2010
53,725,000
54,545,000
-
13,740,000
3,263,574
2011
64,220,000
60,080,000
4,610,000
13,365,000
3,070,763
2012
61,835,000
58,580,000
-
12,975.000
-
2013
83,470,000
56,125,000
-
12,565,000
-
2014
807570,000
53,605,000
-
13,895,000
-
2015
205,598,458
50,450,128
-
13,295,152
-
2016
196,377,233
44,262,600
-12,717,253
-
Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements.
Source: City Finance Department; California State Department of Finance
184
185
Governmental Activities (Continued)
Certificates
Total
Percentage
Debt
of
Notes/ Loans
Capitalized
Governmental
orPersonal
per
Participation
Payable
Lease
Activities
Income
Capita
$ -
$ 403,126
$ 166,532
$ 130,283,308
15.30%
3,165
-
356,589
93,478
131,285,324
12.75%
2,760
-
307,542
20,316
127,393,899
11.76%
2,572
-
256,720
-
125,530,294
11.78%
2,494
-
204,046
-
145,549,809
14.79%
2,855
-
-
-
133,390,000
12.40%
2,516
-
-
-
152,160,000
13.95%
2,745
-
-
-
148,070,000
13.49%
2,611
2859,283
-
272203,022
25.55%
4,890.
7.644,938
-
-
261,002,024
22.08%
4,278
185
City of Lake Elsinore, California
Direct and Overlapping Bonded Debt
June 30, 2016
2015-16 Assessed Valuation
915,000.00
$ 4,804,948,961
562,414
Riverside County Flood Control District, Zone No. 4 0,676%
20,650,000
City's Share of
Metropolitan Water District 0.198%
Percentage
Outstanding
Overlapping
Perris Union High School District 2.313%
Applicable (1)
Debt 6/30/16
Debt 6/30/16
OVERLAPPING TAX AND ASSESSMENT DEBT;
44,004,640
1,667,776
DIRECT OVERLAPPING TAX AND ASSESSMENT DEBT
23,361,242
68,448
City of Lake Elsinore 1915 Act Bonds
100,000%
S 14,100,000
$ 14,100,000
City of Lake Elsinore Community Facilities Ditricts
100.000%
182,510,000
182,510,000
TOTAL DIRECT OVERLAPPING TAX AND ASSESSMENT DEBT
3,418,000
$ 196,610,000
OTHER OVERLAPPING TAX AND ASSESSMENT DEBT
Riverside County Flood Control District, Zone No. 3 Benefit AD 61,466% $
915,000.00
$
562,414
Riverside County Flood Control District, Zone No. 4 0,676%
20,650,000
139,594
Metropolitan Water District 0.198%
92,865,000
183,873
Perris Union High School District 2.313%
114,315,877
2,644,126
Menifee Union School District 3.790%
44,004,640
1,667,776
Perris School District 0293%
23,361,242
68,448
Lake Elsinore Unified School District CFDs 100000%
33,321,327
33,321,327
Perris Union High School District CFD No. 92-1 7.476%
35,625,000
2,663,325
Elsinore Volley Metropolitan Water District CFD No. 2003-1 100.000%
3,418,000
3,418,000
TOTAL OTHER OVERLAPPINGTAX AND ASSESSMENT DEIST
.$
44,668,883
'TOTAL OVERLAPPINGTAX AND ASSESSMENT DEBT'
$
241,278,883
DIRECT AND OVERLAPPING GENERAL FUND DEBT:
DIRECT GENERAL FUND DEBT
City of Lake Elsinore General Fund Obligations 100.000% $
12,750,000
$
12,750,000
City of Lake Elsinore Certificates of Participation 100.000%
7,430,000
7,430,000
TOTAL DIRECT GENERAL FUND DEBT
.$
20,180,000
OVERLAPPING GENERAL FUND DEBT
Riverside County General Fund Obligations 2.037% $
889,831,745
$
18,125,873
Riverside County Pension Obligations 2.037%
304,520,000
6,203,072
Riverside County Board of Education Certificates of Participation 2.037%
935,000
19,046
MI. San .Jacinto Community College District General Fund Obligations 6 34R, =
70,1:00,000
4,441,500
Lake Elsinore Unified School District Certificates of Participation 42.916%
34,075,496
14,623840
Perris Union high School District General Fund Obligations 2.313%
8,331 366
192.704
Menifee and Per 111 District Certificates of Participation 3.790&0293%
36,508,400
1,122617
TOTAL OVERLAPPING GENERAL FUND DEBT
$
44,728,652
'TOTAL GROSS DIRECT AND OVERLAPPING GENERAL FUND DEBT
$
64,908,652
Less'. River side County General Fund Self-supporting Obligations
127046
TOTAL D RECT AND OVERLAPPING GENERAL FUND DEBT
$
64,781,606
OVERLAPPINGTAX INCREMENTDEBT(SUCCESSOR AGENCY): 100.000% $
52,770,000
$
52,770,000
'Total Direct Debt
$
20,180,000
'Total Gross Overlapping Debt
$
338,777,535
'Total Net Over Debt
S
338,650,489
Gross Combined Total Debt (2)
$
358,957,535
Net Combined Total Debt
S
358,830,489
Notes:
(1) For debt repaid with property taxes, the percentage o1'overlapping debt applicable is estimated using taxable
assessed
property values. Applicable percentages were estimated by determining the portion of another governmental unit's
taxable
assessed value that is within the city's boundaries and dividing it by each unit's total taxable assessed value.
(2) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and non -bonded capital
lease
obligations Qualified Zone Academy Bonds are included based on principal due at ranuity.
*Overlapping govenunents are those that coincide, at least in part, with the geographic boundaries of the City.
This
schedule estinnates the portion of One outstanding debt of thox overlapping governments that is borne by the residents
and businesses ofthe City. This process recognizes that, when considering the City's ability to issue and repay
long-term debt, the entire debt burden borne by the residents and businesses should be taken into account, However.
this does not imply that evcry taxpayer is a resident, and therefore responsible for repaying the debt, ofeach overlapping
government.
Source Cahfnrna Municipal Statistics
186
VLSI
City of Lake Elsinore, California
Legal Debt Margin Information
Last Ten Fiscal Years
The Government Code of the State of California provides for a legal debt limit of 15% of gross assessed value.
However, this provision was enacted when assessed valuation was based upon 25% of market value.
Effective with the 1981-82 fiscal year, each parcel is now assessed at 100% of market value (as of the
most recent change in ownership for that parcel). The computations shown above reflect a conversion
of assessed valuation data for each fiscal year that was in effect at the time that the legal debt margin
was enacted by the State of California for local governments located within the state.
Sources: I WE Companies and Riverside County Assessor Tax Roll
187
Fiscal Year
2007
2008
2009
2010
Assessed Valuation
$ 3,670,623,178
$ 4,925,757,048
$ 4,927,408,004
$ 4,062,119,890
Conversion Percentage
25%
25%
25%
25%
Adjusted Assessed Valuation
912,155,265
1,221,818,006
1,221,544,416
1,015,529,973
Debt Limit Percentage
15%
15%
15%
15%
Debt Limit
136,823,290
183,272,701
183,231,662
152,329,496
Total Net Debt Applicable
to Limitation
-
_
Legal Debt Margin
$ 136,823,290
$ 183.272,701
$ 183.231,662
$ 152,329,496
Total Debt Applicable to the Limit
as a Percentage of Debt Limit
0.0%
0.0%
0.0%
0.0%
The Government Code of the State of California provides for a legal debt limit of 15% of gross assessed value.
However, this provision was enacted when assessed valuation was based upon 25% of market value.
Effective with the 1981-82 fiscal year, each parcel is now assessed at 100% of market value (as of the
most recent change in ownership for that parcel). The computations shown above reflect a conversion
of assessed valuation data for each fiscal year that was in effect at the time that the legal debt margin
was enacted by the State of California for local governments located within the state.
Sources: I WE Companies and Riverside County Assessor Tax Roll
187
Fiscal Yeai
2011
2012
2013
2014
2015
2016
$ 3,928,751,948
$ 1923,526,176
$ 3,834,397,783
$ 4,031,499,407
$ 4,494,905,138
$ 4,804,948,961
25%
25%
25%
25%
25%
25%
982,187,987
980,881,544
958,599,446
1,007,874,852
1,201,237,240
1,201,237,240
15%
15%
15%
15%
15%
15%
147,328,198
147,132,232
143,789,917
151,181,228
180,185,586
180,185,586
$ 147,328198 $ 147,132,232 $ 143.789,917 $ 151,181,228 $ 180.185.586 $ 180,185.586
0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
188
City of Lake Elsinore, California
Pledged -Revenue Coverage
Last Ten Fiscal Years
Tax Allocation Bonds
Note: Details regarding the City's outstanding debt can be found iu the notes to the financial statements.
Source: City Finance Department
189
Successor
Fiscal Year
Redevelopment
Tax
Ended
Tax Increment
Debt Service
Allocation
June 30
Revenue
Principal
Interest
Coverage
Bonds
2007
$ 21,112,545
$ 2,307,832
$ 4,108,847
3.29 $
55,175,000
2008
26,484,367
1,688,978
3,663,448
4.95
54,010,000
2009
24,892,412
1,761,323
31558,405
4.68
52,785,000
2010
19,877,054
1,295,000
3,304,802
4.32
54,545,000
2011
19,004,495
1,195,000
2,315,314
5.41
60,080,000
2012
9,451,004
1,500,000
1,071,681
3.68
58,580,000
2013
10,090,329
2,455,000
1,050,131
2.88
56,125,000
2014
10,864,084
2,520,000
2,333,745
2.24
53,605,000
2015
10,070,883
2,590,000
2,262,351
2.08
51,015,000
2016
12,245,313
2360,000
2,361,749
2.39
52,770,000
Note: Details regarding the City's outstanding debt can be found iu the notes to the financial statements.
Source: City Finance Department
189
City of Lake Elsinore, California
Demographic and Economic Statistics
Last Ten Fiscal Yeats
Sources:
HDL, Coren & Cone
( I ) Population: California State Department of Finance
( 2, 3 ) Income Data: SSRI - Dennographie Estimates are based on the last available Census. Projections
are developed by incorporating all of the prior census data released to date.
( 4 ) Unemployment Date: California State Employment Development Department
190
Personal
Per Capita
Fiscal Year
Income
Personal
Unemployment
Ended
Population
(In Thousands)
Income
Rate
June 30
(lj
(2)
(3)
(4)
2007
41,164
$ 851,375
$ 20,683
4.9%
2008
47,567
1,029,928
21,652
5.8%
2009
49,528
1,083,488
21,876
8.2%
2010
50,324
1,065,544
21,174
13.2%
2011
50,983
984,074
19,302
14.3%
2012
53,024
1,075,380
20,281
13.2%
2013
55,430
1,090,807
19,679
9.3%
2014
56,718
1,097,663
19,353
8.1%
2015
56,688
1,085,008
19,140
8.8%
2016
61,006
1,182,026
_... 19,375
7.2%
Sources:
HDL, Coren & Cone
( I ) Population: California State Department of Finance
( 2, 3 ) Income Data: SSRI - Dennographie Estimates are based on the last available Census. Projections
are developed by incorporating all of the prior census data released to date.
( 4 ) Unemployment Date: California State Employment Development Department
190
City of Lake Elsinore, California
Principal Employers
Current Year Compared to 2007
EMPLOYMENT
Estimated Total Employment
EMPLOYER
Lake Elsinore Unified School District
M & M Framing
Stater Bros (3 locations)
Lake Elsinore Hotel & Casino
Costco
Walmat't Store
Riverside County - Department of Social Services
EVMWD (Elsinore Valley Mun Water Dist)
Home Depot
Target
Total -Cop 10 Employers
2016 2007
Percent of Percent of
Number of Total Number of Total
Employees Employment* Employees Employment*
26,900 (q (1) 21,600
2,618
9.73%
1,060
4.91%
500
1.86%
-
(2)
0.00%
299
1.11%
165
0.76%
253
0.94%
-
(2)
0.00%
236
0.88%
250
1.16%
235
0.87%
228
1.06%
196
0.73%
-
(2)
0.00%
" -154
0.57%
-
(2)
0.00%
143
0.53%
200
0.93%
140
0.52%
-
(2)
0.00%
4,774
17.75%
1,903
8.81%
Notes:
(1) Total City Labor Force provided by EDD Labor Force Data.
(2) Data Dot available or Company not in business for 2007
Source:
MuniServices, LLC
Results based on direct correspondence with City's local businesses.
191
City of Lake Elsinore, California
Full-time and Part-time City Employees
by Function
Last Ten Fiscal Years
Source: City Finance Departtuent
192
Fiscal Year
FUNCTION
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
General
Government
26
26
20
20
17
24
22
24
20
20
Community
Services
52
52
41
42
47
42
43
47
45
51
(Includes Public Works)
Community
Development
23
23
21
14
11
10
14
14
18
20
Total
101
101
82
76
75
76
79
85
83
91
Note: Police and Fire services are provided
by
the County
of Riverside.
Source: City Finance Departtuent
192
City of Lake Elsinore, California
Operating Indicators
by Function
Last Ten Fiscal Years
FUNCTION
Police
Lake Related Boating Enforcement Citations
1-lazardous Traffic Violations
DUI Arrests
Fire
Calls
Fire Suppression Equipment
Public Works
Centerline Miles of Paved Surface Streets Maintained
Centerline Miles of Dirt Surface Streets Maintained
Weed Abatement -Lots Cleaned
Community Development
Construction Permits Issued
Property Value Per Permits (Estimated in 000's)
New Home Building Permits Issued
Parks and Recreation
Daily Lake Use Passes Sold
n/a—not available
Source: City of Lake Elsinore, Various Departments
193
Fiscal Year
2007 2008 2009 2010
625 100 n/a 444
2,500 5,000 n/a 1,561
n/a n/a n/a 261
3,567 3,778 3,876 4,007
3 3 3 3
143 155 174 173
12 10 9 9
700 581 390 365
2,527 1,604 505 771
$ 153,013 $ 78,680 $ 21,474 $ 42,848
450 74 43 211
32,018 36,000 25,230 23,765
Fiscal Year
2011 2012 2013 2014 2015 2016
244 384 204 425 419 597
1,200 1,358 2,155 2,848 3,338 3,711
n/a 241 216 197 179 137
3,950
3,944
4,554
4,484
4,456
5,110
3
3
4
4
4
4
173
174
189
189
189
254
9
9
9
9
9
9
470
452
360
414
227
204
829
760
909
972
735
2,022
$ 50,899
$ 43,381
$ 124,755
$ 121,773
$ 71,664
$ 104,923
223
210
660
626
346.
410
19,577
20,702
21,413
20,183
14,996
11,427
194
City of Lake Elsinore, California
Capital Asset Statistics
by Function
Last Ten Fiscal Years
Source: City of Lake Elsinore, Varions Departments
195
fiscal Year
FUNCTION
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Police
Stations
1
1
1
1
1
I
1
1
1
1
Fire
Fire Stations
3
3
3
3
3
3
4
4
4
4
Public Works
Street Miles
157
157
157
157
157
157
157
157
157
254
Lake, Parks, & Recreation
Parks and River Walk
16
16
16
17
17
17
17
17
17
18
Beaches and Recreation
Facilities
8
8
8
10
10
10
10
10
10
10
Libraries
2
2
2
2
2
2
2
2
2
2
Stadium Amphitheater
Seats
6,600
6,600
6,600
6,600
6,600
63600
6,600
6,600
6,600
6,600
Lake Surface Acres
3,300
3,300
3,300
3,300
3,300
3,300
3,300
3,300
3,300
3,300
Lakeshore Miles
10.5
lU
lU
10.5
10.5
10.5
10.5
10.5
10.5
10.5
Source: City of Lake Elsinore, Varions Departments
195
TEAMAN, RAMIREZ & SMITH, INC.
*7 CERTIFIED POBLIC
A N
TS
December 30, 2016
Budget/Audit Committee
City of Lake Elsinore
Lake Elsinore, California
We have audited the financial statements of the governmental activities, each major fund and the aggregate remaining fund
information of the City of Lake Elsinore, California (the "City") for the year ended June 30, 2016. Professional standards require
that we provide you with information about our responsibilities under generally accepted auditing standards, Government
Auditing Standards, as well as certain information related to the planned scope and timing of our audit. We have
communicated such information in our letter to you dated May 6, 2016. Professional standards also require that we
communicate to you the following information related to our audit.
Significant Audit Findings
Qualitative Aspects ofAccountirng Practices
Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used
by the City are described in Note 1 to the financial statements. As described in Note I to the financial statements, the City
changed accounting policies related to Statement of Governmental Accounting Standards (GASB Statement) No. 72, Fair Value
Measurement and Application, in the 2016 fiscal year. Accordingly, there is all additional note disclosure on fair value
measurements in the financial stah:ments. We noted no transactions entered into by the City during the year for which there is a
lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements, in the
proper period.
Accounting estimates are an integral part of the financial statements prepared by management and are based on management's
knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are
particularly sensitive because of their significance to the financial statements and because of the possibility that future events
affecting them may differ significantly from those expected. The most sensitive estimates affecting the financial statements were:
Management's estimate of the fair value of investments is based on information provided by financial institutions. We
evaluated the key factors and assumptions used to develop the fair value of investments in determining that it is
reasonable in relation to the financial statements taken as a whole.
Management's estimate of capital assets depreciation is based on historical estimates of each capitalized item's useful
life. We evaluated the key factors and assumptions used to develop the capital assets depreciation in determining that it
is reasonable in relation to the financial statements taken as a whole.
Management's estimate of the net pension liability and related pension deferred outflows and inflows of resources are
based on an actuarial valuation and pension contributions made during the year. We evaluated the key factors and
assumptions used to develop the net pension liability and related pension deferred outflows and inflows of resources in
determining that it is reasonable in relation to the financial statements taken as a whole.
G:^�"+CCSR518dY� � 'T3SRh u: .:
Richard A. Teaman, CPA a David M. Ramirez, CPA 4 Javier EL Carrillo, CPA O Bryan P. Daugherty, CPA e Joshua J. Calhoun, CPA
4201 Brockton Avenue Suite 100 Riverside CA 92501 951.274.9500 TEL 951.274.7828 FAX www.trscpas.com
Management's estimate of net other postemployment benefits (OPEB) obligation is based on an actuarial valuation.
We evaluated the key factors and assumptions used to develop the net OPEB obligation in determining that it is
reasonable in relation to the financial statements taken as a whole.
Management's estimate of developer agreement obligations owed by the Successor Agency is based on the terms of
those developer agreements. We evaluated the key factors and assumptions used to develop those obligations in
determining that it is reasonable in relation to the financial statements taken as a whole.
Certain financial statement disclosures are particularly sensitive because of their significance to financial statement users. The
most sensitive disclosures affecting the financial statements were:
The disclosure of the fair value of investments in Notes 2 and 3 to the financial statements represents amounts
susceptible to market fluctuation.
The disclosure of capital assets in Note 7 to the financial statements is based on historical information which could
differ from actual useful lives of each capitalized item.
The disclosure of the pension plans, net pension liability and related pension deferred outflows/inflows of resources in
Note 15 to the financial statements represents management's estimates based on an actuarial valuation and pension
contributions made during the year. Actual results could differ depending on the key factors and assumptions used to]-
the
orthe actuarial valuation.
The disclosure of other postemployment benefits and the net OPEB obligation in Note 16 to the financial statements
represents management's estimate based on an actuarial valuation. Actual results could differ depending on the key
factors and wswuptions used for the actuarial valuation. ....
The disclosure of developer agreement obligations owed by the Successor Agency in Note 20 to the financial
statements represents management's estimate based on the terms of those developer agreements. Actual results could
differ depending if the terms of those agreements are met.
The financial statement disclosures are neutral, consistent and clear.
Difficulties Encountered in Perfbrnning the Audit
We encountered no significant difficulties in dealing with management in performing and completing our audit.
Corrected and Uncorrected A9isstaternents
Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those
that are clearly trivial, and communicate them to the appropriate level of management. Management has corrected all such
misstatements. The following material misstatements detected as a result of audit procedures were corrected by management:
transactions relating to longterm debt, cash with fiscal agent, deposits, accounts receivable and deferred revenues.
Disagreernews with A9anagcment
For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not
resolved to our satisfaction, that could be significant to the financial statements or the auditors' report. We are pleased to report
that no such disagreements arose during the course of our audit.
Management Representations
We have requested certain representations from management that are included in the management representation letter dated
December 30, 2016.
Management Consultations with Other Independent Accountants
In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to
obtaining a "second opinion" on certain situations. If a consultation involves application of an accounting principle to the City's
financial statements or a determination of the type of auditors' opinion that may be expressed on those statements, our professional
standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our
knowledge, there were no such consultations with other accountants.
OtherArudit Findings or Issues
We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with
management each year prior to retention as the City's auditors. however, these discussions occurred in the normal course of our
professional relationship and our responses were not a condition to our retention.
Other Matters
We applied certain limited procedures to management's discussion and analysis, and the required supplementary information
section, which are required supplementary information (RSI) that supplements the basic financial statements. Our procedures
consisted of inquiries of management regarding the methods of preparing the information and comparing the information for
consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during
our audit of the basic financial statements. We did not audit the RSI and do not express an opinion or provide any assurance on the
RSI.
We were engaged to report on the supplementary information section, which accompany the financial statements but are not RSI.
With respect to this supplementary information, we made certain inquiries of management and evaluated the form, content, and
methods of preparing the information to determine that the information complies with accounting principles generally accepted in
the United States of America, the method of preparing it has not changed from the prior period, and the information is appropriate
and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the
underlying accounting records used to prepare the financial statements or to the financial statements themselves.
We were not engaged to report on the introductory and statistical section, which accompany the financial statements but are not
RSI. Such information has not been subjected to the auditing procedures applied in the audit of the basic financial statements, and
accordingly, we do not express an opinion or provide any assurance on it.
Restrictions on Use
This information is intended solely for the use of the City Council and management of the City and is not intended to be and
should not be used by anyone other than these specified parties.
Very truly yours,
EAMAN, RAMIREZ &SMITH, INC.
AMBAC EiAN
TS
INDEPENDENT ACCOUNTANT'S REPORT ON AGREED-UPON PROCEDURES
APPLIED TO APPROPRIATIONS LIMIT WORKSHEETS
City Council
City of Lake Elsinore
Lake Elsinore, California
We have performed the procedures enumerated below to the accompanying Appropriations Limit documents of the City of
Lake Elsinore, California, for the year ended June 30, 2016. These procedures, which were agreed to by the City of Lake
Elsinore, California and the League of California Cities (as presented in the publication entitled Agreed-upon Procedures
Applied to the Appropriations Limitation Prescribed by Article A711B of the California Constitution), were performed solely
to assist the City in meeting the requirements of Section 1.5 of Article XIIIB of the California Constitution. The City of Lake
Elsinore's management is responsible for the Appropriations Limit worksheet. This agreed-upon procedures engagement
was conducted in accordance with attestation standards established by the American Institute of Certified Public
Accountants. The sufficiency of the procedures is solely the responsibility of those parties specified in this report.
Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purpose
for which this report has been requested or for any other purpose.
The procedures performed and our findings were as follows:
1. We obtained the completed worksheets and compared the limit and annual adjustment factors included in those
worksheets to the limit and annual adjustment factors that were adopted by resolution of the City Council. We also
compared the population and inflation options included in the aforementioned documents to those that were selected by a
recorded vote of the City Council.
Finding: No exceptions were noted as a result of our procedures.
2. For the accompanying Appropriations Limit worksheet, we added last year's limit to total adjustments and agreed the
resulting amount to this year's limit.
Finding: No exceptions were noted as a result of our procedures.
3. We agreed the current year information presented in the accompanying Appropriations Limit worksheet to the other
documents referenced in #1 above.
Finding: No exceptions were noted as a result of our procedures.
4. We agreed the prior year appropriations limit presented in the accompanying Appropriations Limit worksheet to the prior
year appropriations limit adopted by the City Council during the prior year.
Finding: No exceptions were noted as a result of our procedures.
We were not engaged to, and did not, conduct an audit, the objective of which would be the expression of an opinion on the
accompanying Appropriations Limit worksheet. Accordingly, we do not express such an opinion. Had we performed
additional procedures, other matters might have come to our attention that would have been reported to you. No procedures
have been performed with respect to the determination of the appropriation limit for the base year, as defined by Article X11113
of the California Constitution.
This report is intended solely for the use of the City Council and management of the City of Lake Elsinore, California and is
not intended to be and should not be used by anyone other than these specified parties. However, this report is a matter of
public record and its distribution is not limited.
December 30, 2016
zx
Richard A. Teaman, CPA + David M. Ramirez, CPA n Javier IT Carrillo, CPA a Bryan P. Daugherty, CPA Joshua J. Calhoun, CPA
4201 Brockton Avenue Suite 100 Riverside CA 92501 951.274.9500 TEL 951.274.7528 FAX www.trscpas.com
CITY OF LAKE ELSINORE
APPROPRIATIONS LIMIT COMPUTATION
2015-2016
Per Capital Personal Income Change
Population Change
City Population Growth
CPI Change Converted to a Ratio
Population Change Converted to a Ratio
Calculation of Growth Factor
2014-2015 Appropriations Limit
2015-2016 Appropriations Limit
($74,581,324 x 1.0701)
$ __74$81.324
79.809.475
2015-2016
3.82%
3.07%
1.0382
1.0307
1.0701
07
R S TEAMAN. FlAMiREZ A SMITH, INC.
T E A M I E O PARK & SMITH,
,INC.
Independent Auditors' Report on Internal Control Over Financial Reporting and on
Compliance and Other Matters Based on an Audit of Financial Statements
performed in Accordance with Governrnent Atediting Standards
City Council
City of Lake Elsinore
Lake Elsinore, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the
standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General
of the United States, the financial statements of the governmental activities, each major fund, and the aggregate
remaining find information of the City of Lake Elsinore, California (the "City"), as of and for the year ended June 30,
2016, and the related notes to the financial statements, which collectively comprise the City's basic financial statements,
and have issued our repot thereon dated December 30, 2016.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City's internal control over financial
reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of
expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness
of the City's internal control. Accordingly, we do not express an opinion on the effectiveness of the City's internal
control.
A deficiency in internal control exists whrs:the design or operation of a control does not allow management o' ,
employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements
on a timely basis. A inaterial weakness is a deficiency, o a combination of deficiencies, in internal control, such that
there is a reasonable possibility that a material misstatement of the City's financial statements will not be prevented, or
detected and corrected on a timely basis. A significant defzcieney is a deficiency, or a combination of deficiencies, in
internal control that is less severe than a material weakness, yet important enough to merit attention by those charged
with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was
not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies.
Given these limitations, during our audit, we did not identify any deficiencies in internal control that we consider to be
material weaknesses. However, material weaknesses may exist that have not have been identified.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City's financial statements are free of material
misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant
agreements, noncompliance with which could have a direct and material effect on the determination of financial
statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our
audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of
noncompliance or other matters that are required to be reported under Government Auditing Standards.
Richard A. Teaman, CPA e David M. Ramirez, CPA w Javier H. Carrillo, CPA a Bryan P. Daugherty, CPA Joshua J. Calhoun, CPA
4201 Brockton Avenue Suite 100 Riverside CA 92501 951.274.9500 TEL 951.274.7828 FAX www.trscpas.com
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results
of that testing, and not to provide an opinion on the effectiveness of the City's internal control or on compliance. This
repot is an integral part of an audit performed in accordance with Government Auditing Standards in considering the
City's internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
Riverside, California
December 30, 2016
LAKE ELSINORE
PUBLIC FINANCING AUTHORITY
FINANCIAL STATEMENTS
Year Ended June 30, 2016
Lake Elsinore Public Financing Authority
Financial Statements
Year Ended June 30, 2016
TABLE OF CONTENTS
PAGE
Independent Auditors' Report 1 - 2
Basic Component Unit Financial Statements:
Government -wide Financial Statements:
Statement of Net Position 3
Statement of Activities 4
Fund Financial Statements
Balance Sheet - Governmental Funds 5 - 6
Reconciliation of the Governmental Funds Balance Sheet to the
Statement of Net Position 9
Statement of Revenues, Expenditures and Changes in
Fund Balances - Governmental Funds 8 - 9
Reconciliation of the Statement of Revenues, Expenditures and Changes in
Fund Balances to the Statement of Activities 10
Notes to Financial Statements
11 -35
Supplementary Schedules:
Other Governmental Funds: -
Combining Balance Sheet 36-38
Combining Statement of Revenues, Expenditures and Changes in Fund Balances 39-41
TEAMAN, RAMIREZ &SMITH, INC.
PUBLIC N
TS
INDEPENDENT AUDITORS' REPORT
The Board of Directors
Lake Elsinore Public Financing Authority
Lake Elsinore, California
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate
remaining fund information of the Lake Elsinore Public Financing Authority (the "Authority"), a component unit of the City
of Lake Elsinore, as of and for the year ended June 30, 2016, and the related notes to the financial statements, which
collectively comprise the Authority's basic financial statements as listed in the table of contents.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with
accounting principles generally accepted in the United States of America; this includes the design, implementation, and
maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from
material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We c�nductcd our audit in
accordance with auditing standards generally accepted in the United States of America and the standards applicable to
financial audits contained in Governmery Auditing Standards, issued by the Comptroller General of the United States. Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements
are tree from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material
misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Authority's preparation and fair presentation of the financial statements in order to
design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Authority's internal control. Accordingly, we express no such opinion. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made
by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial
position of the governmental activities, each major fund, and the aggregate remaining fund information of the Authority, as
of June 30, 2016, and the respective changes in financial position for the year then ended in accordance with accounting
principles generally accepted in the United States of America.
Richard A. Teaman, CPA n David M. Ramirez, CPA I Javier E. Carrillo, CPA > Bryan P. Daugherty, CPA e Joshua J. Calhoun, CPA
4201 Brockton Avenue Suite 100 Riverside CA 92501 951.274.9500 TEL 951.274.7828 FAX www.trscpas.com
City of Lake Elsinore, California
Comprehensive Annual Financial Report
Year Ended June 30, 2016
TABLE OF CONTENTS
11. FINANCIAL SECTION
Independent Auditors' Repot
PAGE
1. INTRODUCTORY SECTION
3 - 11
Letter of Transmittal
i - viii
Government Finance Officers Association Certificate of Achievement
ix
Organization Chart
x
Directory of Officials
xi
11. FINANCIAL SECTION
Independent Auditors' Repot
1 - 2
Management Discussion & Analysis
3 - 11
Basic Financial Statements:
89
Government -wide Financial Statements:
98-99
Statement of Net Position
12
Statement of Activities
13
Fund Financial Statements:
92
Balance Sheet - Governmental Funds
14 - 15
Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position
16
Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds
17 - 18
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances
of Govensn..^nfal Funds'tu the Statement of Activities
Statement of Net Position - Proprietary Funds
20
Statement of Revenues, Expenses and Changes in Net Position - Proprietary Funds
21
Statement of Cash Flows - Proprietary Funds
22-23
Statement of Fiduciary Net Position - Fiduciary Funds
24
Statement of Changes in Fiduciary Net Position - Fiduciary Funds
25
Notes to Financial Statements
26 - 88
Required Supplementary Information:
95
Schedule of the City's Proportionate Share of the Net Pension Liability
96
CaIPERS Pension Plan
89
Schedule of Contributions
98-99
CalPERS Pension Plan
90
Schedule of Funding Progress
91
Budgetary Comparison Schedule Budget and Actual - General Fund
92
Budgetary Comparison Schedule Budget and Actual - Special Revenue Fund -
Low and Moderate Income Housing
93
Notes to Required Supplementary Information
94
Supplementary Schedules
Other Governmental Funds:
95
Combining Balance Sheet
96
Combining Statement of Revenues, Expenditures and Changes in Ford Balances
97
Other Special Revenue Funds:
98-99
Combining Balance Sheet
100- 104
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
105- 109
Schedules of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual
110- 129
City of Lake Elsinore, California
Comprehensive Annual Financial Report
Year Ended ,Tune 30, 2016
TABLE OF CONTENTS - Continued
III. STATISTICAL, SECTION
Description of Statistical Section Contents
PAGE
Supplementary Schedules - Continued
Other Capital Projects Funds:
130
Combining Balance Sheet
131 - 133
Combining Statement of Revenues. Expenditures and Changes in Fund Balances
134- 136
Schedules of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual
137- 147
Budgetary Comparison Schedule - Capital Projects Fund - Assessment Districts
148
Budgetary Comparison Schedule - Capital Projects Fund - Capital Improvement Plan
149
Permanent Fund:
150
Schedule of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual -
176
Endowment Trust Permanent Fund
151
Internal Service Funds:
152
Combining Statement of Net Position
153-154
Combining Statement of Revenues, Expenses, and Changes in Net Position
155- 156
Combining Statement of Cash Flows
157- 160
Agency Funds:
161
Combining Statement of Assets and Liabilities
162
Combining Statement of Changes in Assets and Liabilities
163- 164
III. STATISTICAL, SECTION
Description of Statistical Section Contents
165
Financial Trends:
Nr!,Position-by Component - Last Ten Fiscal Years -.
- 166 - 1'7,
Changes in Net Position - Expenses and Program Revenues - Last Ten Fiscal Years
168-169
Changes in Net Position - General Revenues, Special and Extraordinary Items -
Last Ten Fiscal Years
170- 171
Fund Balances of Governmental Funds - Last Ten Fiscal Years
172-173
Changes in Fund Balances of Governmental Funds - Last Ten Fiscal Years
174- 175
Revenue Capacity:
Governmental Activities Tax Revenue by Source
176
Taxable Sales by Major Industry Groups
177- 178
Direct ad Overlapping Property Tax Rates - Last Ten Fiscal Years
179
Principal Property Taxpayers - Current Year and Nine Years Ago
180
Property Tax Levies and Collections - Last Ten Fiscal Years
181
Assessed Value and Estimated Actual Value of Taxable Property - Last Ten Fiscal Years
182 - 183
Debt Capacity:
Ratios of Outstanding Debt by Type - Last Ten Fiscal Years
184- 185
Direct and Overlapping Debt
186
Legal Debt Margin Information - Last Ten Fiscal Years
187 - 188
Pledged Revenue Coverage - Last Ten Fiscal Years
189
Demographic and Economic Information:
Demographic and Economic Statistics - Last Ten Fiscal Years
190
Principal Employers - Current Year and Nine Years Ago
191
Operating Information:
Full -Time and Part -Time City Employees by Function - Last Ten Fiscal Years
192
Operating Indicators by Function - Last Ten Fiscal Years
193 - 194
Capital Asset Statistics by Function - Last Ten Fiscal Years
195
IIIIJ 24O� U c� �? S:..�;C�TI� !\.�'
CITY OF
LAKE �LSIHO TE
j� Dt�' M EXTREmr_
December 30, 2016
To the Honorable Mayor, Members of the Governing Council and Citizens of the City of Lake Elsinore:
We are pleased to submit the June 30, 2016 Comprehensive Annual Financial Report (CAFR) for the City of Lake Elsinore
(City). This report is published in accordance with local ordinance and state law requirements that financial statements be
presented in conformity with generally accepted accounting principles (GAAP) and audited in accordance with generally
accepted auditing standards by an independent public accounting first of licensed certified public accountants.
This report contains management's representations concerning the City's finances. Management assumes full responsibility
for the completeness and reliability of the information presented and that it is reported in a manner that fairly presents the
financial position and operations of the City. Because the cost of internal control should not exceed anticipated benefits, the
objective is to provide reasonable, rather than absolute, assurance that the financial statements are free of any material
misstatements. To provide a reasonable basis for making these representations, and assurance that the financial statements
will be free from material misstatement, City management has established a comprehensive internal control framework
designed both to protect its assets and to compile sufficient reliable information to prepare the City's financial statement in
conformity with GAAP.
The significant accounting por,c:es of the City are described in the notes to the financial statements. These accounting '
policies have been reviewed by the City's independent certified public accountants and are in conformance with the
recommendations of the Governmental Accounting Standards Board (GASB).
As required by GAAP, the Management's Discussion and Analysis (MD&A) immediately follows the independent auditor's
report and provides a narrative introduction, overview, and analysis of the basic financial statements. MD&A complements
this letter of transmittal and should be read in conjunction with it.
Independent Audit
State statutes require an annual audit by independent certified public accountants. Teaman Ramirez & Smith, Inc., a first of
licensed certified public accountants, has audited the City's financial statements. The goal of the independent audit was to
provide reasonable assurance that the City's financial statements are free of material misstatement. The independent auditor
concluded that there was a reasonable basis for rendering an unqualified opinion that the City of Lake Elsinore's financial
statements for the year ended June 30, 2016, are fairly presented in conformity with GAAP. Their report is presented as the
first component of the financial section of this report.
Reporting Standards
For reporting purposes, the City has adopted the provisions of GASB Statement No. I, which established the authoritative
status of the pronouncements of its predecessor, the National Council on Governmental Accounting (NCGA), and of the
accounting and financial reporting guidance contained in the Industry Audit Guide, Audits gfStafe and Local Governmental
Units, issued by the American Institute of Certified Public Accountants. Through widespread acceptance, pronouncements of
the NCGA, GASB and the AICPA through its Industry Audit Guide, have long been acknowledged as the primary
authoritative statements of GAAP applicable to state and local government.
Honorable Mayor and City Council
December 30, 2016
Financial Reporting Entity
For financial reporting purposes, in conformance with the criteria of GASB "Defining the Governmental Repotting Entity,"
this report includes the operating statements and statements of financial position of the City of Lake Elsinore, the Lake
Elsinore Public Financing Authority, and the Lake Elsinore Recreation Authority. While each is a separate legal entity, the
City Council, acting as Council and Board of Directors, exercises oversight responsibility for each. Each was organized for
the benefit of the City and its residents and conducts all activity within its boundaries. They are therefore shown as blended
Component Units, The Public Financing Authority and the Recreation Authority are reported as Debt Service Funds.
Because of the dissolution of the Redevelopment Agency of the City of Lake Elsinore, the agency is not shown as a
component unit of the City of Lake Elsinore's financial statements. The City, as the Successor Agency to the Redevelopment
Agency, continues to carry out remaining activities of the Redevelopment Agency until activities are complete. Successor
Agency trust information is disclosed in the notes to the financial statements (Note No, 20).
Profile of the City
The City of Lake Elsinore was incorporated in 1888 and is located in the Elsinore Valley, in Western Riverside County. The
Elsinore Valley is centralized with about an hour to two homy' drive between major anchor cities such as San Diego, Los
Angeles, Orange County, Palm Springs, and Big Bear. Serving a population of 61,006, the city limits fall on the Easterly
shores of Lake Elsinore, the largest natural freshwater lake of Southern California. The City currently occupies 42 square
miles with 5 square miles being water. Residents enjoy perfect climate, blue sky, clean air, world-famous thermal winds for
aerial sports, water sports, and off-road motor sports. All of this is set against the spectacular Cleveland National Forest,
providing opportunities for hiking, biking, bird watching or relaxing in the beauty that abounds in this outdoor recreation
destination.
The City is incorporated as a general law city with a council/manager form of municipal government, which consists of five
council members who are elected to four-year staggered terms. The mayor and mayor pro tem are honorary positions filled
by council members for one-year terms. The Council is responsible for setting policy and approving actions to carry out the
functions of municipal government. The City is empowered to levy property tax on real property located within the city
limits. It also is empowered by state statute to extend its corporate limits by annexation, which it has done from time to time.
Termed the "Action Sports Capital of the World", management works to support sports on and around the lake. Centrally
located within the city limits, lays our 3,000 surface acre recreational lake with campgrounds and boat launches where water
sport players can play. Within the city limits, citizens and visitors can play at the: Lake Elsinore Motorsports Park, a motor -
cross track for off-road riding and racing; Skylark Field Airport (CA89), an airport for skydiving and flying: and the Links at
Snnmerly, an 18 -hole golf course. Owned by the City, residents can visit our Diamond Stadium, a state -of -the -aril baseball
facility with the capacity of 14,000 spectators. Home base for the Minor League Storm team, other events are held at the
Stadium such as high school graduations for schools throughout the valley, music concerts, and other various events.
Services Provided
The City provides a range of municipal services for citizens throughout the community that include maintenance of 18 parks,
fire prevention, animal services, planning and development, building inspections, licenses and permits, construction and
maintenance of streets, right-of-way landscaping maintenance, traffic and street lighting, capital improvements, general
administration, recreational services, cultural activities, and lake services. Police services are contracted from the Riverside
Sheriff Department. Fire services are contracted from Cal Fire. The Lake Elsinore Unified School District provides 24
schools for 21,559 students within the city limits and sphere of influence areas. Water and sewer services are provided by the
Elsinore Valley Municipal Water District.
Honorable Mayor and City Council
December 30, 2016
Local Economy
The City of Lake Elsinore is reported as one of the fastest growing cities in California today. The. City offers easy access to
major freeways, available industrial and commercial land, quality labor force of both skilled and semi -skilled workers, and an
economic philosophy of assisting local businesses for future growth. The region's geographic location, competitive cost
structure and sophisticated logistics facilitates one of the fastest growing communities in the area. The City's median age is
29.5 with a per capital personal income of $19,375. This is a slight increase from the prior year of $19,140 with the
unemployment rate at 7.2%, which is down from the prior year of 8.8%. The median housing price in the City is
approximately $320,000 which is a median increase of 4.92% from the prior year, while the statewide median is in the
$448,800 range. With the City's arena for varied sports activities and increased growth, the City has experienced an increase
in the 10% transient occupancy tax (TOT) revenues.
Chart 1.
City of Lake Elsinore
Transient Occupancy Tax Revenues for the Last Ten Years
$600
m $400.._'-
$200
c
$0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Fiscal Year
The City's Economic Development Department works with the Chamber of Commerce and the Visitor's Bureau in its effort
to encourage the expansion and relocation of industries that generate local sales tax and employment opportunities. The
City's sales tax revenue, the largest general fund revenue, experienced increased sales overall of 7.3% with auto sales from
the auto mall, general consumer goods, restaurants, and hotels as the top producers.
Chart 2.
City of Lake Elsinore
Sales Tax Revenues for the Last Ten Years
$10,000
i
$8,000 i _-----
_ $6,000
E $4,000
c_
$2,000 ( -
$0 .
2006 2008 2010 2012 2014 2016 2018
Fiscal Year
The City's net position continues to recover from losses experienced after the end of the 2008-2009 recession and local
housing market drop. The chart below shows the dramatic losses and slow recovery, which extends to increased jobs,
development, building permit issuance, construction, and home sales. However, Public Safety costs continue to increase
even though general government expenditures have significantly decreased.
Honorable Mayor and City Council
December 30, 2016
Chart 3.
$140,000
$120,000
$100,000 4
N I
o $80,000
E $60,000
c
$40,000 j
$20,000 7
$0
2006
City of Lake Elsinore
Revenues and Expenditures of Governmental Funds
2008 2010 2012 2014 2016 2018
Fiscal Year
—Q, --Revenues --@,— Expenditures
Taxable property values are on the upswing with only a little more than 1/3 built out. The 2/3 of vacant land includes open
frontage along California's Interstate 15 Highway available for commercial development.
Chart 4.
City of Lake Elsinore
Taxable Property Net Assessed Value
6,000,000 r
5,000,000 - --
c 4,000,000
0
3,000,000
a
c
2,000,000
1,000,000
0
2006 2008 2010 2012 2014 2016 2018
Fiscal Year
Vision Statement and Major Initiatives
The City Council's visionary statement guides Council and Staffs focus with Council's budgetary initiatives:
The City ofLake Elsinore ivill be the ultimate lake destination where all can live, work, play, build.1Wures,
and,ftlflll dreams.
iv
Honorable Mayor and City Council
December 30, 2016
Council's "Dream Extreme" motto coupled with economic development will facilitate goals to becoming an ultimate lake
destination. After all, we are the Action Sports Capital of the World where our residents and visitors can Dream Extreme.
The City Council's budgetary and legislative priorities are updated annually and are included in the Operating Budget. With
the vision statement of focus on the "lake" and "play," Council's directive includes building recreation facilities and
supporting sport venues. Listed below are the Council's established strategic key initiatives.
• Public Safety
• Transportation
• Economic Development
• Image
• Education
• Services
Things to Come
This fiscal year the City embarked on a capital improvement plan to transform the existing City owned La Laguna RV Resort
and Campground. Located on the North shore of the Lake, the resort includes the recently constructed boat launch. The
transformation plans will create new amenities and renovate the campground for use by the community, residents, and
visitors. improvements will include picnic and shade structures, activity areas, new campsites, RV hookups, parking,
concession stand, bait & tackle shop, new entry way, and administrative buildings.
After the close of the 2016 fiscal year, the City's Rosetta Canyon Sports Park celebrated Opening Day with the newly
reconstructed park that was transformed from an 8 acre park to a full-fledged 22 acre sports venue. The park offers five
championship quality ball fields, a combination f6btball/soccer field, and a two-story concession stand with observation deck,
In the new fiscal year, Council approved the proposed development of a 520,000 square foot indoor commercial sports
facility that will be located adjacent the Diamond Stadium. The sports facility is proposed for two levels with approximately
58 indoor volleyball courts or 33 basketball courts and stadium style seating. The second level will provide team rooms for
rent, and suites around the main court. The facility will also include three restaurant facilities.
Budgetary Control and Accounting Basis
The objective of budgetary control is to ensure compliance with legal provisions embodied in the annual appropriated budget
approved by the City Council and various Boards. Budgets are adopted for the General Fund, Special Revenue Funds and
Capital Project Funds. The level of budgetary control is maintained at the expenditure object level for fixed assets.
Each fiscal year, the annual operating budget is proposed after a considerable review process in which staff and Council
identify budget priorities, immediate and future fiscal issues, community needs, and the resources required to enhance capital
programs and services within the City in order to maintain a strong community. The five-year revenue and expenditure
projections are developed to identify future impacts of proposed staffing and program changes, as well as, the impact of
capital improvement projects. The annual budget serves not only as a financial plan for the immediate future, but also as a
management and communications tool outlining the City Council's vision and key initiatives for the year that make the City
the desirable place as our vision statement outlines. The annual budget is presented to Council for adoption at the start of
each fiscal year. The budget is prepared by fiord, function (e.g. community services), and department (e.g., recreation).
Department heads may transfer funds within a department as they see fit. Transfers between departments; however, need
special approval from the Council.
Honorable Mayor and City Council
December 30, 2016
In developing and modifying the City's accounting system, consideration was given to the adequacy of internal accounting
controls. Internal accounting controls are designed to provide reasonable, but not absolute, assurance regarding the
safeguarding of assets and the reliability of financial records and maintaining accountability of assets. To facilitate reporting,
budgetary control is maintained through computer approval paths for all financial transactions of all funds as well as
computer-generated reports. Capital Project expenditures are also controlled at the project level. Encumbrance accounting is
utilized to assure effective budgetary control; purchase orders and contracts are reviewed and a determination is made that
valid and sufficient appropriations exist for payment for ordered goods and services. Encumbrances outstanding at year-end
do not constitute expenditures or liabilities. Unencumbered appropriations lapse at year-end, and encumbrances outstanding
at that time are reported as a reserve of fund balance for subsequent year expenditures.
The concept of reasonable assurance recognizes that the cost of control should not exceed its benefits. The evaluation of this
cost benefit relationship rests with management. To provide a reasonable basis for making these representations,
management of the City has established a comprehensive internal control framework designed both to protect the
government's assets from loss, theft, or misuse, and to compile sufficient reliable information for the preparation of the
financial statements in conformity with GAAP.
All internal control evaluations occur within the bounds as described. We believe that the City's internal accounting controls
adequately safeguard assets and provide reasonable assurance of proper recording of financial transactions.
Fund Descriptions
The various fund types used by the City and included in this report are listed below and a description of them is included in
the Notes to the Financial Statements.
Fund Category _ Fund Type
Government Funds , General Fund '..
Special Revenue Funds
Debt Service Funds
Capital Project Fund
i Permanent Fund
Proprietary Funds Insurance Service
Information Systems Services
Support Service
Fleet Service
Facilities Service
Fiduciary Funds _ Private -purpose Trust Funds
Agency Funds
Cash Management
On an annual basis, the City review's and adjusts its Investment Policy. The investment policies and practices of the City
are, in every case, subject to and limited by applicable provisions of state law and to prudent money management principles.
All funds are invested in accordance with the City's Investment Policy. The investment policy applies to all financial assets,
except bond proceeds and retirement fluids. Cash during the year was invested in State Local Agency Investment Fund and
Govermnent-backed securities throughout the year. A portion of invested cash is managed by the PFM Asset Management,
LLC. The City's portfolio at the close of the fiscal year is shown below.
vi
Honorable Mayor and City Council
December 30, 2016
Tvne ofSecurity
U.S. Treasuries
Federal Agencies
Municipal Bonds
Certificate of Deposit
Federal Agency CMO
Corporate Notes
CAMP - Pooled Sweep Account
Local Agency Investment Fund
%of Portfolio %PermittedbyPolic
29.93%
100%
8.04%
100%
0.56%
100%
8.66%
25%
1.15%
40%
15.14%
30%
0.17%
100%
36.36%
100%
The City's investment policy continues to rely on safety and liquidity as primary concerns. The following table represents a
summary of the investment policy limitations.
Tvue of Security
U.S. Treasury Bills
U.S. Treasury Bond / Note
Municipal Bond /Note
Federal Agency Collaterized Mortgage Obligation
Federal Agency Bond / Note
Banker's Acceptance
Certificates of Deposit
Negotiable Certificates of Deposit
Commercial Paper
Corporate Note
Repurchase Agreements
Reverse Repurchase Agreements
LAW (Local Agency Investment Fund)
CAMP -Pooled Sweep Account
Maximum Percentaee
Unlimited
Unlimited
Unlimited
40%
Unlimited
40%
25%
30%
J S.N
30%
Unlimited
20%
Unlimited
Unlimited
"No more than 40% in any one federal agency
*Investment in LAIF may not exceed $65 million in each entity
Risk Management
The City is a member of the California Joint Powers Insurance Authority, which provides administration of the pooling of
self-insured members funding. Through membership, the City receives coverage for liability, facility, automobile, and
workers compensation protection. The Authority utilizes a staff of risk managers to assist member agencies in all aspects of
coverage and safety issues. More information on this insurance is disclosed in the notes to the financial statements (Note No.
18).
Debt Administration
The City of Lake Elsinore, not including the component units, has no outstanding bond debt as of June 30, 2013, The City's
Financing Authority, a joint powers authority between the City and Redevelopment Agency, was put in place to provide an
economical and cost effective pool of funds to acquire authorized local public obligations. Certain bonds issued and sold
through the Financing Authority were authorized under the Marks -Roos Local Bond Pooling Act of 1985.
vii
Honorable Mayor and City Council
December 30, 2016
Awards and Acknowledgements
The Government Finance Officers Association (GFOA) of the United States and Canada awarded a Certificate of
Achievement for Excellence in Financial Reporting to the City for its Comprehensive Annual Financial Repot (CAFR) for
the fiscal year ended June 30, 2015. In order to be awarded a Certificate of Achievement, the government published a CAFR
that goes beyond the minimum requirement of GAAP and demonstrates the spirit of transparency and full disclosure that
provides the user with the financial information they need to assess the City's financial health. A Certificate of Achievement
is valid for one year only and management believes that the current CAFR continues to meet the program's requirements; as
a result, management has submitted the current CAFR for consideration of the award.
The preparation and development of this report would not have been possible without the special efforts of the entire
Administrative Services Department. We wish to express gratitude to all those staff members of both the City and
independent auditors who were associates with the preparation of this report. Additionally, we express our appreciation to the
Finance Division staff for their dedicated service and contribution to the department during the fiscal year. Their efforts are
reflected in this report and in other documents resulting from the annual financial management process. We would like to
thank the City Manager, Mayor, City Council, and City Treasurer for their interest and support in planning and conducting
the financial operations of the City.
Respectfully submitted,
Jason Simpson
Assistant City Manager
viii
Honorable Mayor and City Council
December 30, 2016
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial.
Reporting
Presented to
City of Lake Elsinore
California
For its Comprehensive Annual
Financial Report
for the Fiscal Year Ended
.Tune 30, 2015
Executive Director/CED
ix
CITY OF LAKE ELSINORE
ORGANIZATION CHART
CITY OF LAKE ELSINORE
DIRECTORY OF OFFICIALS*
ELECTED OFFICIALS
City Council members are elected to four-year staggered terms
ADMINISTRATION
Grant Yates
City Manager
Jason Simpson
Robert Magee
Mayor
Natasha Johnson
Mayor Pro Tem
Daryl Hickman
Councilmember
Steve Manes
Councilmember
Brian Tisdale
Councilmember
Allen Baldwin
Treasurer
ADMINISTRATION
Grant Yates
City Manager
Jason Simpson
Assistant City Manager
Barbara Leibold
City Attorney
Susan Domen
City Clerk
Vacant
Director of Administrative Services
Johnathan Skinner
Director of Community Services
Grant Taylor
Director of Community Development
Leonard Hollingsworth
Chief of Police Services
Sean Dakin
Fire Battalion Chief
*AI December 31, 2016
xi
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VRS TEAMAN, RAMIKiEZ A SMITH, TEAMA e o v M RE &SMI H, INC.IN .
INDEPENDENT AUDITORS' REPORT
Members of the City Council
City of Lake Elsinore
Lake Elsinore, California
Report on Financial Statements
We have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate
remaining fund information of the City of Lake Elsinore, California (the "City") as of and for the year ended June 30, 2016, and
the related notes to the financial statements, which collectively comprise the City's basic financial statements as listed in the
table of contents.
Management's Responsibility for the financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting
principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of
internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement,
whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance
with auditing standards generally accepted in the United States of America and the standards applicable to financial audits
contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require
that we plan and perform the audit to obtain reasonable assturanr„e whetb^rthe financial statements are free from material
misstatement. ”
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.
The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the
financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control
relevant to the City's preparation and fair presentation of the financial statements in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City's internal
control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies
used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position
of the governmental activities, each major fund, and the aggregate remaining fund information of the City of Lake Elsinore,
California, as of June 30, 2016, and the respective changes in financial position and, where applicable, cash flows thereof for the
year then ended in accordance with accounting principles generally accepted in the United States of America.
Emphasis of Matter
Change in Accounting Principle
As described in Note 1 to the financial statements, in 2016 the City adopted new accounting guidance, GAS13 Statement No.
72, Fair Vab+e Measurement and Application. Our opinion is not modified with respect to this matte'.
Richard A. Tea man, CPA w David M. Ramirez, CPA e Javier H. Carrillo, CPA a Bryan P. Daugherty, CPA + Joshua J. Calhoun, CPA
4201 Brockton Avenue Suite 100 Riverside CA 92501 951.274.9500 TEL 951.274.7828 FAX www.trscpas.com
Other Matters
Required Supplementary Irfonnation
Accounting principles generally accepted in the United States of America require that the management's discussion and
analysis and required supplementary information on pages 3 though 11 and 89 through 94 be presented to supplement the
basic financial statements. Such information, although not a part of the basic financial statements, is required by the
Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the
basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited
procedures to the required supplementary information in accordance with auditing standards generally accepted in the United
States of America, which consisted of inquiries of management about the methods of preparing the information and
comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and
other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any
assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion
or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's
basic financial statements. The introductory section, supplementary section, and statistical section are presented for purposes
of additional analysis and are not a required part of the basic financial statements.
The supplementary section is the responsibility of management and was derived from and relate directly to the underlying
accounting and other records used to prepare the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including
comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic
financial statements or to the basic financial statements themselves, and other additional procedures in accordance with
auditing standards generally accepted in the United States of America. In our opinion, the supplementary section is fairly
stated in all material respects in relation to the basic financial statements as a whole.
The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic
financial statements and, accordingly, we do not express an opinion or provide any assurance on them.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated December 30, 2016, on our
consideration of the City's internal control over financial reporting and on our tests of its compliance with certain provisions
of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of
our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an
opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in
accordance with Government Auditing Standards in considering the City's internal control over financial reporting and
compliance.
Riverside, California
December 30, 2016
City of Lake Elsinore, California
Management's Discussion and Analysis
June 30, 2016
As management of the City of Lake Elsinore (City), we offer readers of the City's financial statements this narrative overview
and analysis of the financial activities of the City for the fiscal year ended June 30, 2016. We encourage readers to consider
the information presented here in conjunction with the additional information that we have furnished in our letter of
transmittal, which is in the introductory section already presented. This report is organized into three sections: introductory,
financial, and statistical.
FINANCIAL HIGHLIGHTS
• The City's capital assets, net of depreciation, increased by $6.7 million as a result of increased community parks and
infrastructure improvements.
• Capital expenditures increased as a result of an increase in capital improvement project construction. This follows the
City council's initiatives of transportation, economic development, image, and services.
• At the end of the current fiscal year, unassigned fund balance for the General Fund was $11.4 million or 31% of total
General Fund expenditures. City Council has designated 17.5% or $2 million of the $11.4 million for future
contingencies.
• The City of Lake Elsinore's total long-term debt had a net decrease of $13 million during the current fiscal year. The net
decrease includes bond defeasance and capital improvement reimbursements.
• The City's assets and deferred outflows of resources exreeded:its liabilities -and deferred inflows of resources at the close
of the most recent fiscal year by $210,044,700.
OVERVIEW OF THE FINANCIAL. STATEMENTS
This discussion and analysis section is intended to serve as an introduction to the City's basic financial statement, designed to
communicate the information in an easily readable form. The City's Comprehensive Annual Financial Report (CAFR) is
intended to provide the reader with information of the City's financial condition, results of operation, and accountability.
The City's basic financial statements comprise of three components: (I) government -wide financial statements, (2)fund
financial statements, and (3) notes to the basic financial statements. This report also contains other supplementary
information in addition to the basic financial statements themselves.
Government -wide Financial Statements
The government -wide financial statements are designed to provide reader with a broad overview of the City's finances, in a
manner similar to a private -sector business. These statements are presented in the accrual basis to reveal if resources were
used efficiently and effectively to meet operating objectives.
The statement of nel position presents information on all of the City's assets, liabilities and deferred inflows/outflows of
resources, with the difference reported as net position. Over time, increases or decreases in net position may serve as a useful
indicator of whether the financial position of the City of Lake Elsinore is improving or deteriorating.
3
City of Lake Elsinore, California
Management's Discussion and Analysis
June 30, 2016
Government -wide Financial Statements - Continued
The statement of activities presents information showing how the government's net position changed during the most recent
fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless
of the tiering of related cash.flows. Thus, revenues and expenses are reported in this statement for some items that will only
result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave). The governmental
activities of the City include general government, public safety, community development, public services and community
services.
The government -wide financial statements include not only the City itself (known as the primary government), but also two
legally separate entities, the Lake Elsinore Public Financing Authority and the Lake Elsinore Recreation Authority, The City
is financially accountable for these entities and financial information for these blended component units is reported within the
financial information presented for the primary government itself. The government -wide financial statements can be found
on pages 12 - 13 of this report.
Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific
activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate
compliance with finance -related legal requirements. All of the funds of the City of Lake Elsinore can be divided into three
categories: governmental funds, proprietary funds, and fiduciary funds.
Governmental Funds
Governmental.londs are used to account for essentially the same functions reported as governmental activities in the
government -wide financial statements. However, unlike the government -wide financial statements, governmental funds
financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable
resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near-term
financing requirements.
Because the focus of governmental funds is narrower that that of the govenunent-wide financial statements, it is useful to
compare the information presented for governmenialEnds with similar information presented for governmental activities in
the government -wide financial statements. By doing so, readers may better understand the long-term impact of the
government's near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement
of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between
govermuental,junds and governmental activities. The basic governmental fund financial statements can be found on pages 14
- 19 of this report.
The City maintains various individual governmental funds. Information is presented separately in the governmental fund
balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the
General Fund, Low and Moderate Income Housing Special Revenue Fund, Public Financing Authority Debt Service Fund,
Recreation Authority Debt Service Fund, Assessment Districts Capital Projects Fund, and Capital Improvement Plan Capital
Project fund. which are considered to be major funds. Data from other governmental funds are combined into a single,
aggregated presentation. Individual fund data for each of these other governmental finds is provided in the form of
combining statements elsewhere in this report.
City of Lake Elsinore, California
Management's Discussion and Analysis
June 30, 2016
Governmental Funds - Continued
The City adopts an annual appropriated budget for its General Fund, certain Special Revenue Funds, and certain Capital
Projects Funds. A budgetary comparison statement has been provided for the General Fund and certain Special Revenue
Funds to demonstrate compliance with this budget.
Proprietary funds. The City maintains various internal service,finds. Internal service funds are an accounting device used to
accumulate and allocate costs internally among the City's various functions. The City uses internal service funds to account
for its self-insurance activities, information technology systems, support systems, fleet services, and facilities services. The
basic proprietary fund financial statements can be found on pages 20 - 23 of this report.
Because these services benefit governmental functions, they have been included within governmental activities in the
government -wide financial statements. The internal services funds are combined in a single, aggregated presentation in the
proprietary fluid financial statements. Individual fund data for the internal service funds is provided in the form of combining
statements on pages 152 -160 of this report.
fiduciary finds. Fiduciary funds are used to account for resources held for the benefits of parties outside the government.
Fiduciary funds are not reflected in the government -wide financial statement because the resources of those funds are not
available to support the City of Lake Elsinore's own programs. The accounting used for the fiduciary fund is much like that
used by the proprietary funds, accrual basis of accounting. The basic fiduciary fund financial statements call be found on
pages 24 - 25 of this report.
Notes to the Basic Financial Statements
The notes to the basic financial statements provide additional information that is essential to a fill understanding of the data
provided in the government -wide and fund financial statements. The notes to the basic financial statements can be found on
pages 26 - 88 of this report.
Other Information
In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary
information. Required supplementary information can be found starting on pages 89 - 94 of this report. Immediately
following the required supplementary information, the supplementary schedules present the governmental fund statements.
Combining and individual fund statements and schedules can be found on pages 95 - 164 of this report.
GOVERNMENT -WIDE FINANCIAL. ANALYSIS
As noted earlier, net position may serve over time as a useful indicator of a government's financial position. ht the case of
the City, assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $210 million at
the close of the most recent fiscal year. For the City, 69.1% of the net position reflects its investment in capital assets (e.g.,
land, buildings, machinery, equipment, and infrastructure); less any related debt used to acquire those assets that is still
outstanding. The City uses these capital assets to provide services to citizens; consequently, these assets are not available to]-
future
orfuture spending. Although the City's investment in its capital assets is reported net of related debt, it should be noted that the
resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used
to liquidate these liabilities.
City of Lake Elsinore, California
Management's Discussion and Analysis
June 30, 2016
Condensed Statements of Net Position
An additional portion of the City's net position, 35.7%, represents resources that are subject to external restrictions on how
they may be used. The deficit balance of approximately ($10.1) million is unrestricted net positron reflect the fact that
governmental activities raise resources based on when liabilities are expected to be paid, rather than when they are incurred.
Most governments do not have sufficient current resources on hand to cover current and long-term liabilities. The deficit in
and of itself should not be considered an economic or financial difficulty: however, it does measure how far the City has
committed the government's future tax revenues for purposes other than capital acquisition.
The City's total net position decreased by $5.9 million primarily resulting from a decrease in cash and investments and an
increase in pension related items. The decrease in cash and investments is a result of increased capital improvement costs,
which also resulted in increased capital depreciation. The most significant decrease in revenues was for Capital grants and
contributions which decreased by $15.1 million. In fiscal year 2015, the City received proceeds from special assessment
bonds to construct certain public facilities and improvements. Expenses in public safety increased by $7.5 million because of
increased costs for law enforcement and fire services provided by the County of Riverside and CAL Fire respectfully. The
City also reported prior period adjustments on Community Facility District (CFD) investments of $1.5 million as a result of
restructuring investments from the advanced refunding of certain bonds.
Governmental Activities
2016
2015
Assets:
Current and other assets
$ 368,715,948
$ 396,135,556
Capital assets
156.562,992
149.920,933
Total Assets
525,278,940
546.008,120
Total Deferred Outflows of Resources
5.149,726
4.327,750
Liabilities:
Long -terra debt outstanding
280,728,181
293,942,992
Other liabilities
38,851,639
38.632,534
Total Liabilities
319,579,820
332.575 526
Total Deferred Inflows of Resources
804,146
1.812,082
Net Position:
Net investment in capital assets
145,170,561
137,914,627
Restricted
75,054,285
90,537,124
Unrestricted
(10,180,146)
(12,503,489)
Total Net Position
$ 210.044.ZQ0
$ 215.948.262
An additional portion of the City's net position, 35.7%, represents resources that are subject to external restrictions on how
they may be used. The deficit balance of approximately ($10.1) million is unrestricted net positron reflect the fact that
governmental activities raise resources based on when liabilities are expected to be paid, rather than when they are incurred.
Most governments do not have sufficient current resources on hand to cover current and long-term liabilities. The deficit in
and of itself should not be considered an economic or financial difficulty: however, it does measure how far the City has
committed the government's future tax revenues for purposes other than capital acquisition.
The City's total net position decreased by $5.9 million primarily resulting from a decrease in cash and investments and an
increase in pension related items. The decrease in cash and investments is a result of increased capital improvement costs,
which also resulted in increased capital depreciation. The most significant decrease in revenues was for Capital grants and
contributions which decreased by $15.1 million. In fiscal year 2015, the City received proceeds from special assessment
bonds to construct certain public facilities and improvements. Expenses in public safety increased by $7.5 million because of
increased costs for law enforcement and fire services provided by the County of Riverside and CAL Fire respectfully. The
City also reported prior period adjustments on Community Facility District (CFD) investments of $1.5 million as a result of
restructuring investments from the advanced refunding of certain bonds.
City of Lake Elsinore, California
Management's Discussion and Analysis
June 30, 2016
GOVERNMENT -WIDE FINANCIAL ANALYSIS - Continued
Condensed Statements of Revenues,
Expenses and Changes in Net Position
Special Item —Loss on CPD and AD Investments
Change in net position
Net position at beginning of year
Prior period adjustment
Net position at beginning of year, as restated
Net position at end of year
7
(4,502,385)
(4,437,73 8) 10,344,392
215,948,262 213,927,880
(1,465,824) (8,324,010)
214,482,438 205,603 870
$ 210,044,700 S 2 5 9_4$ 2_02
Governmental Activities
2016
2015
Revenues:
Program Revenues:
Charges for services
$ 13,272,053
$ 12,215,638
Operating grants and contributions
19,883,338
20,141,320
Capital grants and contributions
5,901,491
21,044,552
General Revenues:
Taxes:
Property taxes
6,537,540
6,276,548
Sales taxes
9,939,637
8,572,066
Franchise taxes
2,423,707
2,389,413
Other taxes
838,364
767,058
Investment earnings
925,517
966,365
Miscellaneous
706,094
1,022,472
Total Revenues
60,427,741
73,395,432
Expenses:
General government
6,477,776
8,617,841
Public safety
19,098,659
18,626,488
Community development
4,005,355
7,391,688
Public services
18,668,180
11,162,854
Community services
5,411,152
4,652,536
Interest on long-term debt
11.204357
8,097,248
Total Expenses
64 865,479
58 548655
Change in net Position, before Special Item
(4,437,738)
14,846,777
Special Item —Loss on CPD and AD Investments
Change in net position
Net position at beginning of year
Prior period adjustment
Net position at beginning of year, as restated
Net position at end of year
7
(4,502,385)
(4,437,73 8) 10,344,392
215,948,262 213,927,880
(1,465,824) (8,324,010)
214,482,438 205,603 870
$ 210,044,700 S 2 5 9_4$ 2_02
City of Lake Elsinore, California
Management's Discussion and Analysis
June 30, 2016
City of Lake Elsinore
Expenses and Program Revenues - Governmental Acitivities
$35,000 $30,000
$25,000 _...
$20,000
E $15,000 _..
$10,000
$5,000
$O rt
\`o�9SP e`o 6`erw \`tya�etiJ \o Fec` c� e`�;
Q Q
6o QJp e° Q�e eye o�
e�¢ay\ o��o oc��aO e�es�o
V CP CP `cw
0 Expenses IN Program Revenues
Other Taxes,
838,364
IVY
2,423,707,4%
Sales Taxes,_.
9,939,637, 16%
Property Taxes,
6,537,540, 11%
Capital Grants and
Contributions,
5,901,491,10%
Investment Income,
925,517,2%
Miscellaneous,
706,094, 1%
Charges for Services,
13,272,614, 22%
Operating Grants and
Contributions,
19,883,338, 33%
City of Lake Elsinore
Revenues by Sources - Governmental Activities
8
City of Lake Elsinore, California
Management's Discussion and Analysis
June 30, 2016
FINANCIAL ANALYSIS OF THE GOVERNMENT'S FUNDS
As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance -related legal
requirements.
Governmental Funds
The focus of the City's governmental funds is to provide information on near -terns inflows, outflows, and balances of
spendable resources. Such information is useful in assessing the City's financing requirements. In particular, unassigned
fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal
year.
As of the end of the current fiscal year, the City's governmental funds reported combined ending fund balances of $317.9
million, a decrease of $30 million in comparison with the prior year. Of the $317.9 million ending fund balance, a net $11.4
million, constitutes unassigned fund balance, which is available for spending at the government's discretion. The remainder
of fund balance is either nonspendable, $1.2 million; restricted, $303.9 million; or assigned, $1.5 million for particular
purposes.
The General Fund is the chief operating fund of the City of Lake Elsinore. At the end of the current fiscal year, unassigned
fund balance of the General Fund was $11.4 million, while total fund balance was $12.4 million. As a measure of the
General Fund's liquidity, it may be useful to compare both unassigned fund balance and total fund balance to total fund
expenditures. Unassigned general fund balance represents 30.80% of total General Fund expenditures, while total fund
balance represents 33.59% of that same amount.
The fund balance of the City's General Fund increased by $423,966 during the current fiscal year. The primary factor is an
increase from contributions from property owners, which relates to community facilities districts bond proceeds for
infrastructure and improvements.
For the major funds, the Public Financing Authority Debt Service Fund's restricted fund balance decreased by $16.6 million
partly as the result of the defeasance of 2011 A Summerly and 2011 A Boat Launch bonds. The low and Moderate Income
Housing Fund had a decrease of $127,883 in fund balance from more program spending than investment earnings. The
Recreation Authority had an insignificant decrease of $2,366 in fund balance. For the major capital projects funds, the
Assessment Districts Capital Project Fund had a decrease of $11.2 million for park, sewer, water and other public
improvements from revenues received in the prior year. For the Capital Improvement Plan Capital Project Fund, the increase
of $1.8 million was from amounts transferred and collected that will be used on completing construction projects in 2017.
GENERAL FUND BUDGETARY HIGHLIGHTS
Original - versus - Final: The difference between the original budget and the final amended budget reflects $317,302 net
decrease in appropriations, including transfers, mainly as a result in the City's continued efforts to cut costs and remain
fiscally responsible to constituents. Original budget was increased by $262,965 net in licenses, permits and fees,
intergovernmental revenues, charges for services, fines and penalty type revenues. Original budget was decreased by
$409,767 net in contributions from property owners and miscellaneous revenues. Original budget was increased by $165,481
net in governmental services expenditures and $30,984 net decrease in public works, community development and lake
service expenditures. Finally, budget was increased by $38,500 net in non -departmental services and capital outlay
expenditures.
9
City of Lake Elsinore, California
Management's Discussion and Analysis
June 30, 2016
GENERAL FUND BUDGETARY HIGHLIGHTS - Continued
Revenue Variances: Property and other tax revenues were higher than budget by $706,024 resulting from increased sales tax
in general consumer goods. Licenses, permits, fees, intergovernmental revenues, charges, and fine revenues combined were
higher than budgeted by $551,375 resulting from less permits issued than anticipated offset by increased intergovernmental
revenues. Investment earnings, contributions from property owners and miscellaneous revenues were higher than budgeted
by $1,077,474 as a result of bond refunding and issuance activities.
Expenditure Variances: General government expenditures were lower than budgeted by $286,519 resulting from a decrease
in spending. Public safety, fire, and animal services expenditures were less than the final budget by $401,097 resulting from
reduction of contracted services and close monitoring of spending. Community Development expenditures were less than
budgeted by $185,670 because less plan checks were needed. Community Services Department were less than final budget
due to less spending $311,833. Finally, Public Works and Lake Maintenance combined were higher than budgeted by
$40,022 because of a reduction of staff in the lake division that was not filled.
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets
The City's investment in capital assets for its governmental activities as of June 30, 2016 amounts to $156.6 million (net of
accumulated depreciation). This investment in capital assets includes land, construction in progress, buildings,
improvements, machinery and equipment, and infrastructure. The total decrear.;2 in the City of Lake Elsinore's investment in
capital assets for the current fiscal year was 1%, Major or notable capital asset events during the current fiscal year included
the following:
• Rosetta Canyon Hills Street Improvements
• I-15/Railroad Canyon Deceleration Lane -
• Gvnnerson Street Rehabilitation
• Serenity Park Improvements
• Rosetta Canyon Hills Sports Park
Capital Assets at Year -End
(Net of Depreciation)
Land
Construction in progress
Buildings and structures
Improvements other than buildings
Machinery and equipment
Furniture and fixtures
Automotive equipment
Technology Equipment & Software
Infrastructure
Totals
Governmental Activities
2016
2015
$ 2,926,422
$ 2,926,422
8,274,206
7,296,848
13,490,789
13,911,547
10,852,753
11,479,450
531,587
589,243
144,300
221,023
1,238,451
1,094,685
522,699
306,037
118,581,785
112.047,309
15L) 562 L92
$ _ 142$22 564
Additional information on the City of Lake Elsinore's capital assets can be found in note 7 of this report.
10
City of Lake Elsinore, California
Management's Discussion and Analysis
June 30, 2016
CAPITAL ASSETS AND DEBT ADMINISTRATION - Continued
Long -'term Debt
At year-end, the City has a number of debt issues outstanding. These issues include $185.2 million of local agency revenue
bonds, $44.7 million of tax allocation bonds, $12.7 million of revenue refunding bonds, and $10 million in other post -
employment benefit (OPEB) obligation. Changes in long-term obligations resulted from the reduction of debt through
principal and interest payments and an increase in the OPEB obligation, which resulted in a net decrease of debt by $13
million. The reduction of debt included the defeasance of 2011 Series A Sumnierly and 2011 Series A Boat launch bonds.
Local agency revenue bonds
'fax allocation bonds
Deferred amounts
Revenue refunding bonds
Certificate of participation bonds
Net pension liability
Other post -employment benefit obligation
Compensated absences
Totals
Outstanding Debt
Governmental Activities
2016
2015
$ 185,235,000
$ 193,965,000
44,705,000
51,015,000
10,699,833
11,068,587
12,717,253
13,295,152
7,644,938
7,859,283
8,943,640
7,292,642
10,009,953
8,707,294
772,564
740 034
$ 280 728 18.1. $ 293 942.992
Additional information on the City of Lake Elsinore's long-term debt can be found in note 8 of this report.
ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES
• Property taxes are estimated to increase slightly for the next fiscal year due to an assumed increase of assessed
valuations.
• Because of the City's marketing and economic development efforts, retail sales taxes are anticipated to increase.
• Community facility district's (CFD) assessments are estimated to increase as a result of the increased annexations of
developments. Some CFD revenues are earmarked for services such as law, fire, and paramedic that will offset the
increased costs of those services. All new development must annex into these service type CFDs.
These factors were considered in preparing the City of Lake Elsinore's budget for fiscal year 2015-16.
REQUEST FOR INFORMATION
This financial report is designed to provide a general overview of the City of Lake Elsinore's finances for all those with an
interest in the government's finances. Questions concerning any of the information provided in this report or requests for
additional financial information should be addressed to the City of Lake Elsinore, Department of Administrative Services,
130 South Main Street, Lake Elsinore, California, 92530 or isimpson(a_lake-elsinore.M.
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City of Lake Elsinore, California
Statement of Net Position
June 30, 2016
DEFERRED OUTFLOWS OF RESOURCES
Deferred Charges on Refunding 2,920,817
Pension Related Items 1228,909
Total Deferred Outflows of Resources 5.149,726
LIABILITIES
Accounts Payable '' '""
Governmental
Other Accrued Liabilities
Activities
ASSETS
23,882,664
Cash and Investments
$ 49,214,688
Restricted Cash and Investments
222,472,430
Accounts Receivable
1,090,309
Accrued Interest Receivable
3,67402
Loans Receivable from Successor Agency
74,346,411
Notes Receivable
11,837,000
Interest Receivable on Notes
1,516,458
Due from Other Governments
3,453,891
Prepaid Items
599,724
Land Held for Resale
510,435
Capital Assets, Not Depreciated
11,200,628
Capital Assets, Net of Accumulated Depreciation
145.362,364
'total Assets
525,278.940
DEFERRED OUTFLOWS OF RESOURCES
Deferred Charges on Refunding 2,920,817
Pension Related Items 1228,909
Total Deferred Outflows of Resources 5.149,726
LIABILITIES
Accounts Payable '' '""
8,317,901
Other Accrued Liabilities
1,199,594
Deposits and Other Liabilities
23,882,664
Interest Payable
3,785,764
Unearned Revenue
1,665,716
Noncurrent Liabilities:
8,947,460
Due Within One Year
8,312,256
Due in More Than One Year
272,415,925
Total Liabilities
319,579,820
DEFERRED INFLOWS OF RESOURCES
Pension Related items 804,146
Total Deferred Inflows of Resources 804,146
NET POSITION
Net Investment in Capital Assets
145,170,561
Restricted for:
Debt Service
7,442,047
Low and Moderate Income Housing
55,037,688
'Transportation and Public Works
1,973,170
Public Facilities and Improvements
8,947,460
Other Purposes
1,653,920
Unrestricted
(10, 1801 146)
Total Net Position
S 210.044 700
The accompanying notes are an integral part of this statement.
12
Functions/Programs
Governmental Activities:
General Government _
Public Safety
Community Development
Public Services
Community Services
Interest on Long-term Debt
Total Governmental
Activities
City of Lake Elsinore, California
Statement of Activities
Year Ended June 30, 2016
Program Revenues
$ 64,865,479 $13,272,053 $ 19,883,338 $ 5,901,491
Charges
Operating
Capital
Net
Taxes:
for
Grants and
Grants and
(Expense)
Expenses
Services
Contributions
Contributions
Revenue
$ 6,477,776
$ 734,034
$ 49,145
$
$ (5,694,597)
19,098,659
1,922,602
2,437,225
(14,738,832)
4,005,355
4,660,580
470,116
2,760,479
3,885,820
18,668,180
2,977,138
5,985,991
3,141,012
(6,564,039)
5,411,152
2,977,699
23,861
(2,409,592)
11,204,357
10,917,000
(287,357)
$ 64,865,479 $13,272,053 $ 19,883,338 $ 5,901,491
(25,808,597)
General Revenues:
Taxes:
Property Taxes
6,537,540
Sales Taxes
9,939,637
Franchise Taxes
2,423,707
Other Taxes
838,364
Investment Earnings
925,517
Miscellaneous
706,094
Total General Revenues
21,370,859
Change in Net Position
(4,437,738)
Net Position - Beginning of Year, As Previously Reported
215,948,262
Prior Period Adjustment
(1,465,824)
Net Position - Beginning of Year, As Restated
214,482,438
Net Position - End of Year
$ 210 044,700
'Phe accompanying notes are an integral part of this statement.
13
City of Lake Elsinore, California
Balance Sheet
Governmental Funds
June 30, 2016
ASSETS
Cash and Investments
Cash and Investments with Fiscal Agent
Accounts Receivable
Accrued Interest Receivable
Loans Receivable from Successor Agency
Notes Receivable
Interest Receivable on Notes
Due from Other Funds
Prepaid Items
Due from Other Governments
Land Held for Resale
Total Assets
LIABILITIES
Accounts Payable
Other Accrued Liabilities
Deposits and Other Liabilities
Due to Other Funds
Unearned Revenue - Other
Total Liabilities
DEFERRED INFLOWS OF RESOURCES
Unavailable Revenue - Interest on Loans Receivable
Unavailable Revenue - Interest on Notes Receivable
Unavailable Revenue - Property Taxes and
Assessments
Unavailable Revenue - Intergovernmental
Total Deferred Inflows of Resources
FUND BALANCES
Nonspendable
Restricted
Assigned
Unassigned
Total Fund Balances
Total Liabilities, Deferred Inflows of
Resources and Fund Balances
23,880,964
69,573
30,686' _.
6,071,343 1,204,810 23,880,964
8,659,352
180,000 1,336,458
134,440
314,440 9,995,810 0
1,029,015 18,787
42,297,549 237,030,643
11,365,894
12,394,909 42,297,549 237,049,430
$ 18,780,692 $ 53,498,169 $ 260,930,394
14
Special Revenue
Debt Service
Low and
Public
General
Moderate Income
Financing
Fund
Housing
Authority
$ 13,849,616
$ 11,617,805
$ 502,537
215,703,623
726,880
40,337
17,126
447
29,641,411
44,705,000
1,000,000
10,837,000
180,000
1,336,458
32,987
29,015
18,787
2,921,857
48,369
$ 1.8,780,692
$ 53,498,169
$ 260,930394
$ 5,046,491
$ 1,204,810
$
924,593
23,880,964
69,573
30,686' _.
6,071,343 1,204,810 23,880,964
8,659,352
180,000 1,336,458
134,440
314,440 9,995,810 0
1,029,015 18,787
42,297,549 237,030,643
11,365,894
12,394,909 42,297,549 237,049,430
$ 18,780,692 $ 53,498,169 $ 260,930,394
14
Debt Service Capital Projects
Other Total
Recreation Assessment Capital Governmental Governmental
Authority Districts Improvement Plan Funds Funds
$ $ 126,473 $ 2,728,831 $ 19,062,002 $ 47,887,264
1,726,806 843,558 4,198,443 222,472,430
147,861 214,287 1,089,028
2,772 70,840 131,522
74,346,411
11,837,000
1,516,458
71,076 104,063
85,387 133,189
532,034 3,453,891
462,066 510,435
$ 1,812,193 $ 972,803 $ 3,338.758 $ 24,148,682 $ 363,481,691
0
$ $ 1,831986 $ 181,347 $ 8,265,634
263,000 L187,593
1,700 23,882,664
34,490 104,063
360,664 1,274.366 1,665,716
0 2,456,650 1,491,903 35,105,670
8,659,352
1,516,458
66,731 201,171
71,960 71.960
0 0 0 138,691 10,448,941
85,387 20,003 1,153,192
1,726,806 972,803 21,832,320 303,860,121
882,108 666,656 1,548,764
(891) 11,365,003
1,812,193 972,803 882,108 22,518,088 317,927,080
$ 1,812,193 $ 972,803 $ 3,338,758 $ 24,148,682 $ 363,481,691
15
r
r
AAAA
City of Lake Elsinore, California
Reconciliation of the Balance Sheet of Governmental Funds
to the Statement of Net Position
June 30, 2016
Fund Balances of Governmental Funds
Amounts reported for governmental activities in the Statement of Net Position are
different because:
Capital assets used in governmental activities are not financial resources and,
therefore, are not reported in the funds.
Other long-term assets are not available to pay for current period expenditures
and, therefore, are reported as unavailable revenue in the funds.
Unavailable Revenue - Interest
Unavailable Revenue - Property Taxes and Assessments
Unavailable Revenue - Intergovernmental
Other long-term assets are not available to pay for current period expenditures
and, therefore, are not reported in the funds.
Interest on Loans and Investments
317,927,080
156,171,870
10,175,810
201,171
71,960
3,542,062
Internal service funds are used by management to charge the cost of risk
managcment, information systems, support services, fleet services and facilities
- to individual funds. The assets and liabilities of the internal service funds are
included in the governmental activities in the Statement of Net Position. 2,213,852
Deferred outflows and inflows of resources related to pensions that are required
to be recognized over a defined closed period.
Pension Related Deferred Outflows of Resources 2,138,169
Pension Related Deferred Inflows of Resources (804,146)
Long-term liabilities, including bonds payable, are not due and payable in the
current period and, therefore, are not reported in the finds.
Deferred Charges on Refunding 2,920,817
Interest Payable (3,785,764)
Long-term Liabilities (280,728,181)
Net Position of Governmental Activities $ 210,044,700
The accompanying notes we an integral part of this statement.
16
City of Lake Elsinore, California
Statement of Revenues, Expenditures and Changes in Fund Balances
Governmental Folds
Year Ended June 30, 2016
REVENUES
Properly Taxes
Other Taxes
Licenses, Pennits and Fees
Intergovernmental Revenues
Charges for Services
Fines, Forfeitures and Penalties
Investment Earnings
Special Assessments
Contributions from Property Owners
Miscellaneous
Total Revenues
EXPENDITURES
Current:
General Government
Public Safety
Community Development
Public Services
Community Services
Capital Outlay
Debt Service:
Issuance Costs
_Principal Retirement
Payment to Escrow Agent
Interest and Fiscal Charges
Total Expenditures
Excess of Revenues Over (Under) Expenditures
OTHER FINANCING SOURCES (USES)
Transfers In
'frausfers Out
Sale of Capital Assets
'Molal Other Financing Sources (Uses)
SPECIAL ITEM - Loss on Loans Receivable
Net Change in Fund Balances
Fund Balances - Beginning of Year, As Previously Reported
Piira Period Adjustments
Fund Balances - Beginning of Year, As Restated
Fund Balances - End of Year
The accompanying notes are an integral part of this statement.
5,290,862
18,614,077
3,671.788
5,058,394
4,262,184
10,990
314,712
6,515
6,590,000
- 982,386
10.630,500
36,897,305 314.712 18,220,391
(526,625) (127.883) (7,981,675)
3,096,593
(2,160,745)
14.743
950.591 0 0
(7,319955)
423,966 (127.883) (15,301,630)
11,970,943 42,425,432 253,663,600
(1,312,540)
11.970,943 42425.432 252,351,060
$ 12394,909 $ 42,297,549 $ 237,049,430
17
Special Revenue
Debt Service
Low and
Public
General
Moderate Income
Financing
Fund
Housing
Authority
$ 6,551,939
$
$
13,178,135
4,232,849
2,015,151
2,4.53,380
713,056
231,526
186,829
10,238,716
3,459,454
3,535,190
36,370,680
186.829
10,238,716
5,290,862
18,614,077
3,671.788
5,058,394
4,262,184
10,990
314,712
6,515
6,590,000
- 982,386
10.630,500
36,897,305 314.712 18,220,391
(526,625) (127.883) (7,981,675)
3,096,593
(2,160,745)
14.743
950.591 0 0
(7,319955)
423,966 (127.883) (15,301,630)
11,970,943 42,425,432 253,663,600
(1,312,540)
11.970,943 42425.432 252,351,060
$ 12394,909 $ 42,297,549 $ 237,049,430
17
Debt Service
Capital projects
Other
"Total
Recreation
Assessment
Capital
Governmental
Governmental
Authority
Districts
Improvement Plan
Funds
Funds
$
$
$
$
$ 6,551,939
13,178,135
2,661,258
6,894,107
1,952,572
2,839,446
6,807,169
2,453,380
390,098
1,103,154
227
5.161
455,398
11,117,857
1,680,980
1,680,980
2,557,860
202,620
6,219,934
570
8,160
30,358
3,574,278
797
2.563.021
2,163,352
8,057.538
59.580,933
3,163
13,918
5,318,933
18,614,077
167,559
10,000
4,164,059
1,287,004
6,345,398
722,238
4,984,422
6,662,949
11443,289
20,106,238
6,515
580,000
205,000
7,375,000
982,386
547.100
290,687
11,468.287
1,130,263
6,830,508
11443,289
2528,847
79.365,315
(1,129,466)
(4,267,487)
(11,279937)
5,528,691
(19,784,382)
1,127,100
11101,591
817,275
18,142,559
(6,994,131)
(10,636,386)
(19,791,262)
14,743
1,127.100
(6,994.131)
13,101,591
(9,819,111)
(1,633,960)
(7,319,955)
(2,366)
(11,261,618)
1,821,654
(4,294420)
(28,738,297)
1,814,559
12,234,421
(939,546)
26,961,792
348,131,201
(153,284)
(1,465,824)
1.814,559
12,234.421
(939,546)
26.808 508
346.665,377
1.812.193
$ 972,803
$ 882.108
$ 22,518.088
$ 317.927.080
The accompanying notes are an integral pan ofIhis statement
18
City of Lake Elsinore, California
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances
of Governmental Funds to the Statement of Activities
Year Ended .Tune 30, 2016
Net change in fund balances - total governmental funds $ (28,738,297)
Amounts reported for governmental activities in the Statement of Activities are different because:
Governmental funds report capital outlay as an expenditure in the full amount as current financial
resources are used. However, in the Statement of Activities the cost of these assets is allocated
over the estimated useful life as depreciation expense.
Capital Outlay 12,391,803
Depreciation (6,059,700)
Gain (Loss) on Sale of Capital Assets (32,797)
The issuance of long-term debt provides current financial resources to governmental funds,
while the repayment of the principal of long-term debt consumes the current financial
resources of governmental fiords. Neither transaction, however, has any effect on net position.
These amounts are the effect of these differences in the treatment of long-term debt.
Long-term Debt Principal Payments 7,375,000
Bonds Refunded by Successor Agency 8,450,000
Some expenses reported in the Statement of Activities do not require the use of current
financial resources and are not reported as governmental fund expenditures.
A-moruzation of Deferred Charges on Refunding
- (255.W7)
Net Change in Deferred Outflows and Inflows of Resources
Related to Pensions
1,994,949
Amortization of Bond and Certificates of Participation Premiums
579,096
Amortization of Bond Discount
(203,098)
Interest and Fiscal Charges
(13390)
Net Change in the Net Pension Liability
(1,650,998)
Net Change in the Other Post -Employment Benefit Obligation
(1,302,659)
Compensated Absences
(32,530)
Some revenues reported in Statement of Activities are not considered to be available to finance
current expenditures. These are the net effect of amounts accrued in the Statement of
Activities in the prior year and revenues not reported in the governmental funds.
Property Taxes (14399)
Intergovernmental Revenue - 43,110
Investment Earnings 795,500
Special Assessments 22,597
Internal service funds are used by management to charge the cost of risk management,
information systems, support services, fleet services and facilities to individual
funds. The net revenue of certain activities of internal service funds is reported
with governmental activities. 2,213,852
Change in Net Position of Governmental Activities$ (4,437,738)
'lire accompanying notes arc an integral part ofthis statement.
19
City of Lake Elsinore, California
Statement of Net Position
Proprietary Funds
June 30, 2016
ASSETS
Current Assets
Governmental
Activities -
Internal
Service Funds
Cash and Cash Equivalents
$ 1327,424
Accounts Receivable
1,281
Accrued Interest Receivable
1,018
Prepaid Items
- 466,535
Total Current Assets
- 1,796,258
Noncurrent Assets:
12,001
Capital Assets, Net of Depreciation
391,122
Total Noncurrent Assets
391,122
Total Assets
2,187,380
DEFERRED OUTFLOWS OF RESOURCES
Pension ReLaed Items
-� -. 90,740
Total Deferred Outflnws of Resources
90,740
LIABILITIES
Current Liabilities:
Accounts Payable
52,267
Other Accrued Liabilities
12,001
Total Current Liabilities
64,268
Total Liabilities
64,268
NET POSITION
Net Investment in Capital Assets
Unrestricted
Total Net Position
20
391,122
1,822,730
$ 2,213,852
City of Lake Elsinore, California
Statement of Revenues, Expenses and Changes in Net Position
Proprietary Funds
Year Ended June 30, 2016
OPERATING REVENUES
Charges for Services
Other Revenues
Total Operating Revenues
OPERATING EXPENSES
Personnel Services
Contractual Services
Utilities
Maintenance and Operation
Insurance
Depreciation
Total Operating Expenses
Operating Income (Loss)
NONOPERATING REVENUES
(EXPENSES)
Investment Earnings
Income (Loss) Before Transfers
Transfers In
Change in Net Position
Net Position - Beginning of Year
Net Position - End of Year
21
Governmental
Activities -
Internal
Service Funds
$ 2,659,782
30,601
2,690,383
795,094
158,538
187,295
586,369
377,960
22,155
2.127.411
562,972
177
565,149
1,648,703
2,213,852
0
$ 2,213,852
City of Lake Elsinore, California
Statement of Cash Flows
Proprietary Funds
Year Ended June 30, 2016
CASH FLOWS FROM OPERATING ACTIVITIES
Cash Received from Customers and Users
Cash Payments to Employees for Services
Cash Payments to Suppliers for Goods and Services
Other Receipts
Net Cash Provided by (Used for) Operations
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES
Advances from (to) Other Funds
Net Cash Provided by (Used for) Noncapital
Financing Activities
CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIE;3
Acquisition of Capital Assets
Net Cash Provided by (Used for) Capital and
Related Financing Activities
CASH FLAWS FROM INVESTING ACTIVITIES
Interest on Investments
Net Cash Provided by (Used for) Investing Activities
Net Increase (Decrease) in Cash and Cash Equivalents
Cash Equivalents
Cash and Equivalents - Beginning of Year
Cash and Equivalents - End of Year
22
Governmental
Activities -
Internal
Service Funds
$ 2,658,501
(883,941)
(1,714,322)
30,601
90,839
1,648,703
1,648,703
(413,277)
(413,277)
1,159
1,159
1,327,424
0
$ 1,327,424
City of Lake Elsinore, California
Statement of Cash Flows - Continued
Proprietary Funds
Year Ended June 30, 2016
NET CASH PROVIDED BY (USED FOR) OPERATING
ACTIVITIES $ 90,839
23
Governmental
Activities -
Internal
-
Service Funds
Reconciliation of Operating. Income (Loss) To Net
Cash Provided by (Used for) Operating Activities
Operating Income (Loss)
$ 562,972
Adjustments to Reconcile Operating Income to
Net Cash Provided (Used) by Operating Activities:
Depreciation
22,155
Changes in Operating Assets and Liabilities:
Accounts Receivable (Increase)
(1,281)
Prepaid Items (Increase)
(466,535)
Pension Related Deferred Outflows (Increase)
(90,740)
Accounts Payable (Decrease)
52,267
Other Accrued Liabilities (Decrease)
12,001
NET CASH PROVIDED BY (USED FOR) OPERATING
ACTIVITIES $ 90,839
23
City of Lake Elsinore, California
Statement of Fiduciary Net Position
Fiduciary Funds
June 30, 2016
ASSETS
Cash and Investments
Cash and Investments with Fiscal Agent
Accounts Receivable
Interest Receivable
Due from Other Governments
Deposits with Other Agencies
Prepaid Expenses
Land Held for Resale
Capital Assets:
Land
Buildings and Structures
Improvements Other than Buildings
Machinery and Equipment
Furniture and Fixtures
Less Accumulated Depreciation
Total Assets
DLPkRYtEDM FLOWS OF RESOURCES
Deferred Charges on Refunding
Total Deferred Outflows of Resources
LIABILITIES
Accounts Payable
Deposits and Other Liabilities
Due to Other Governments
Due to Bondholders
Interest Payable
Loans Payable
Bonds Payable
Other Long-term Liabilities
Total Liabilities
NET POSITION
Net Position Held in Trust for Redevelopment (Deficit)
Total Net Position
The accompanying notes are an integral part of this statement.
24
Successor Agency
Private -purpose
Trust Fund
$ 8,995,191
508,616
810
17,458
6,732,828
80,715
6,088,480
2,426,392
17,226,669
568,927
1,271,178
53,972
(8,572,736)
Total
Agency Funds
$ 7,209,766
22,439,390
17,188
339,095
17,150,518
35,398,500 47,155,957
1,055,141
1,055,141 0
63,062
645,959
73,904,011
8,329.075
1,146,127
63,372
2,517,961
3,850,291
40,724,333
84,088,234 $ 47,155,957
(47,634,593)
$ (47,634,593)
City of Lake Elsinore, California
Statement of Changes in Fiduciary Net Position
Fiduciary Funds
Year Ended June 30, 2016
ADDITIONS
Property Taxes
Investment Earnings
Debt Forgiveness
Other income
Total Additions
DEDUCTIONS
Contractual/Professional Services
Project Costs
Loss on Disposal of Capital Assets
Issuance Costs
Interest Expense
Depreciation Expense
Total Deductions
�`-�- Change in Net Position
Net Position - Beginning
Net Position (Deficit) - End of Year
The accompanying notes are an integml part of this statement.
25
Successor Agency
Private -purpose
Trust Fund
$ 12,245,313
207,240
2,798,104
380
15,251,037
3,375,647
164,714
9,147
315,727
2,756,742
549,742
7,171,719
8,079,318
(55,713,911)
$ (47 634,593)
r
ff
A �
t
City of Lake Elsinore, California
Notes to Financial Statements
Year Ended June 30, 2016
NOTE
DESCRIPTION
PAGE
I
Reporting Entity and Summary of Significant Accounting Policies
27-36
2
Cash and Investments
37-43
3
Fair Value Measurements
43-44
4
Loans Receivable from Successor Agency
44-45
5
Notes Receivable
46
6
Land Held for Resale
46
7
Capital Assets
47-48
8
Long-term Liabilities
48-66
9
Special Assessment District Bonds
66
10
Community Facilities District Bonds
67
11
Mortgage Revenue Bonds
68
12
Inter -fund Receivables, Payables and Transfers
68-69
13
Fund Balance and Net Position
69-71
14
Other Required Individual Fund Disclosures
71
15
Pension Plan
72-77
16
Other Post -Employment Benefits
77-78
17
Deferred Compensation
79
18
Liability, Property and Protection
79-81
19
Litigation _
81
20
Successor Agency Trust Disclosures
81 -87
21
Joint Powers Agreements
87-88
22
Special Item
88
23
Prior Period AdjIusttuents
88
24
Subsequent Events
88
26
City of Lake Elsinore, California
Notes to Financial Statements
Year Ended June 30, 2016
1) REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A) Reporting Entity
The City of Lake Elsinore ("City") was incorporated April 23, 1888 under the General Laws of the State of California.
The City operates under a Council -Member form of government and provides the following services: public safety
(law enforcement) highways and streets, cultural recreation, public improvements, planning and zoning, and general
administrative services.
The financial statements of the City of Lake Elsinore include the financial activities of the City, the Successor Agency
to the Lake Elsinore Redevelopment Agency, the Lake Elsinore Public Financing Authority and the Lake Elsinore
Recreation Authority. In accordance with GASB Statement No. 14, the basic criteria for including an agency,
institution, authority or other organization in a governmental unit's financial reporting entity is financial accountability.
Financial accountability includes, but is not limited to 1) selection of the governing body, 2) imposition of will, 3)
ability to provide a financial benefit to or impose financial burden on and 4) fiscal dependency.
There may, however, be factors other than financial accountability that are so significant that exclusion of a particular
agency from a reporting entity's financial statements would be misleading. These other factors include scope of public
service and special financing relationships.
Based upon the application of these criteria, air agency, institution or authority, may be included as a component unit in
the primary government's financial statements. Blended component units, although legally separate entities, are, in
substance, part of the government's operations and so data from these units are combined with data of the primary
government. A discretely presented component unit, on the other hand, is reported in a separate column in the
combined financial statements to emphasize it is legally separate from the government. There are no discretely
presented component units in these financial statements. Each blended component unit presented has a June 30, 2016
year end. All the component units are blended in these financial statements. The governing bodies of these component
units are comprised of the City Council and the services they provide almost exclusively benefits the City of Lake
Elsinore. A component unit financial statement for each component unit previously described may be obtained at 130
S. Main Street, Lake Elsinore, California 92530. The following is a brief review of each component unit included in
the primary government's reporting entity.
The Lake Elsinore Public Financing Authority
The "Authority" is a joint exercise of powers between the City and the Lake Elsinore Redevelopment Agency created
by a joint powers agreement dated July 25, 1989. The purpose of the Authority is to provide, through the issuance of
revenue bonds, a financing pool to fund capital improvement projects. These revenues bonds are to be repaid solely
fio n the revenues of certain public obligations. The Authority does not have taxing power. The City Council also acts
as the governing body of the Authority. The Authority's activities are blended with those of the City in these financial
statements and are reported as a debt service fund. On February 1, 2012, the Lake Elsinore Redevelopment Agency
was dissolved and the City became the Successor Agency to the Lake Elsinore Redevelopment Agency.
27
City of Lake Elsinore, California
Notes to Financial Statements
Year Ended June 30, 2016
1) REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES- Continued
A) Reporting Entity - Continued
The Lake Elsinore Recreation Authority
The "Recreation Authority" is a joint exercise of powers between the City and the Lake Elsinore Redevelopment
Agency created by a joint powers agreement dated December 1, 1996. The purpose of the Recreation Authority is to
provide, through the issuance of revenue bonds, a financing pool to fund capital improvement projects. These revenues
bonds are to be repaid solely from the revenues of certain public obligations. The Recreation Authority does not have
taxing power. The City Council also acts as the governing body of the Recreation Authority. The Recreation
Authority's activities are blended with those of the City in these financial statements and are repotted as a debt service
fund. On February 1, 2012, the Lake Elsinore Redevelopment Agency was dissolved and the City became the
Successor Agency to the Lake Elsinore Redevelopment Agency.
B) Implementation of Governmental Accounting Standards Board (GASB) Pronouncements
Governmental Accounting Standard Board Statement No. 72
In February of 2015, GASB issued Statement No. 72, Fair Value Measurement and Application. This Statement
addresses accounting and financial reporting issues related to fair value measurements. The definition of fair value
is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurepvent date. This Statement provides guidance for determining a fair value
measurement for financial reporting purposes. This Statement also provides guidance for applying fair value to
certain investments and disclosures related to all fair value measurements. Statement No. 72 is effective for periods
beginning after June 15, 2015. The City has implemented GASB No. 72, which is reflected in the City's financial
statements.
Governmental Accounting Standard Board Statement No. 73
In June of 2015, GASB issued Statement No. 73, Accounting and Financial Reporting for Pensions and Related
Assets That Are Not within the Scope of GASB Statement 68, and Amendments to Certain Provisions of GASB
Statements 67 and 68. This Statement was issued to improve the usefulness of information about pensions for
making decisions and assessing accountability. This Statement establishes requirements for defined benefit
pensions that are not within the scope of Statement No. 68, Accounting and Financial Reporting for Pensions, as
well as for the assets accumulated for purposes of providing those pensions. In addition, it establishes requirements
for defined contribution pensions that are not within the scope of Statement 68 and also amends certain provisions of
Statement No. 67, Financial Reporting for Pension Plans, and Statement 68 for pension plans and pensions that are
within their respective scopes. Statement No. 73 requirements that addresses accounting and financial reporting by
employers and governmental nonemployer contributing entities is effective for fiscal years beginning after June 15,
2016, except those provisions that address financial reporting for assets accumulated for purposes of providing those
pensions which are effective for fiscal years beginning after June 15, 2015. Statement No. 73 requirements for
pension plans that are within the scope of Statement 67 or for pensions that are within the scope of Statement 68, are
effective for fiscal years beginning after June 15, 2015. Currently, this statement has no effect on the City's
financial statements.
28
City of Lake Elsinore, California
Notes to Financial Statements
Year Ended June 30, 2016
1) REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -Continued
B) implementation of Governmental Accounting Standards Board (GASB) Pronouncements -Continued
Governmental Accounting Standard Board Statement No 74
In June of 2015, GASB issued Statement No. 74, Financial Reporting fa• Postemployment Benefit Plans Other
Than Pension Plans. This Statement was issued to improve the usefulness of information about postemployment
benefits other than pensions (other postemployment benefits or OPEB) for making decisions and assessing
accountability. This Statement replaces Statements no. 43, Financial Reporting for Post -employment Benefit Plans
Other Than Pension Plans, as amended, and No. 57, OPEB Measurements by Agent Employers and Agent Multiple -
Employer Plans. It also includes requirements for defined contribution OPEB plans that replace the requirements for
those OPEB plans in Statement No. 25, Financial Reporting for Defined Benefit Pension Plans and Note
Disclosures for Defined Contribution Plans, as amended, Statement 43, and Statement No. 50, Pension Disclosures.
Statement No. 74 is effective for fiscal years beginning after June 15, 2016. The City has elected not to early
implement GASB No. 74 and has not determined its effect on the City's financial statements.
Governmental Accounting Standard Board Statement No 75
In June of 2015, GASB issued Statement No. 75, Accounting and Financial Reporting for Postennployment Benefits
Other Than Pensions. This Statement was issued to improve accounting and financial reporting for postemployment
benefits other than pensions (other postemployment benefits or OPER). It also improves information provided by
governmental employers about financial support for OPEB that is provided by other entities. This Statement
replaces the requi:;'went'§ of SY'ffients No. 45, Accounting and Financial Reporting by Employers fir, ^-
Postemployment Benefits Other Than Pensions, as amended, and No. 57, OPFB Measurements by Agent Ennplgyers
and Agent Multiple-Ennployer Plans, for OPEB. Statement No. 74, Financial Reporling for Postemployment Benefit
Plans Other Than Pension Plans, establishes new accounting and financial reporting requirements for OPEB plans.
Statement No. 75 is effective for fiscal years beginning after June 15, 2017. The City has elected not to early
implement GASB No. 75 and has not determined its effect on the City's financial statements.
Governmental Accounting Standard Board Statement No 76
In June of 2015, GASB issued Statement No. 76, The Hierarchy of Generally Accepted Accounting Principles for
State and Local Governments. This Statement was issued to identify, in the context of the current governmental
financial reporting environment, the hierarchy of generally accepted accounting principles (GAAP). The "GAAP
hierarchy" consists of the sources of accounting principles used to prepare financial statements for state and local
governmental entities in conformity with GAP and the framework for selecting those principles. This Statement
reduces the GAAP hierarchy to two categories of authoritative GAAP and addresses the use of authoritative and
nonauthoritative literature in the event that the accounting treatment for a transaction or other event is not specified
within a source of authoritative GAAP. This Statement supersedes Statement No. 55, The Hierarchy of Generally
Accepted Accounting Principles for State and Local Governments. Statement No. 76 is effective for periods
beginning after June 15, 2015 and should be applied retroactively. The City has elected not to early implement
GASB No. 76 and has not determined its effect on the City's financial statements.
29
City of Lake Elsinore, California
Notes to Financial Statements
Year Ended June 30, 2016
1) REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
B) Implementation of Governmental Accounting Standards Board (GASB) Pronouncements- Continued
Governmental Accounting Standard Board Statement No 77
In August of 2015, GASB issued Statement No. 77, Tax Abatement Disclosures. This Statement is intended to
provide financial statement users needed information about certain limitations on a government's ability to raise
resources and for financial reporting purposes requires disclosure on tax abatement information about (1) a reporting
government's own tax abatement agreements and (2) those that are entered into by other governments that reduce
the reporting government's tax revenues. Statement No. 77 is effective for periods beginning atter December 15,
2015. The City has elected not to early implement GASB No. 77 and has not determined its effect on the City's
financial statements.
Governmental Accounting Standard Board Statement No. 79
In December of 2015, GASB issued Statement No. 79, Certain External Investment Pools and Pool Participants.
This statement addresses accounting and financial reporting for certain external investment pools and pool
participants. Specifically, it establishes criteria for an external investment pool to qualify for making the election to
measure all of its investments at amortized cost for financial reporting purposes. An external investment pool
qualifies for that reporting if it meets all of the applicable criteria established in this Statement. The specific criteria
address (1) how the external investment pool transacts with participants; (2) requirements for portfolio maturity,
� mality, diversification, and liquidity; and (3) calculation and requirements o£,a shadwx--price. Significant
noncompliance prevents the external investment pool from measuring all of its investments at amortized cost for
financial reporting purposes. Professional judgment is required to determine if instances of noncompliance with the
criteria established by this Statement during the reporting period, individually or in the aggregate, were significant.
The requirements of this Statement are effective for reporting periods beginning after June 15, 2015. The City has
implemented GASB No. 79 which is reflected on the City's financial statements.
Governmental Accounting Standard Board Statement No. 80
In January of 2016, GASB issued Statement No. 80, Blending Requirements for Certain Component Units — An
Amendment of GASB Statement No. 14. This statement was issued to improve financial reporting by clarifying the
financial statement presentation requirements for certain component units. This Statement amends the blending
requirements established in paragraph 53 of Statement No. 14, The Financial Reporting Entity, as amended. This
Statement amends the blending requirements for the financial statement presentation of component units of all state
and local governments. The additional criterion requires blending of a component unit incorporated as a not-for-
profit corporation in which the primary government is the sole corporate member. The additional criterion does not
apply to component units included in the financial reputing entity pursuant to the provisions of Statement No. 39,
Delerrnining Whether Certain Organisations Are Component Units. The requirements of this Statement are
effective for reporting periods beginning after June 15, 2016. The City has elected not to early implement GASB
No. 80 and has not determined its effect on the City's financial statements.
30
City of Lake Elsinore, California
Notes to Financial Statements
Year Ended June 30, 2016
1) REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
B) Implementation of Governmental Accounting Standards Board (GASB) Pronouncements - Continued
Governmental Accounting Standard Board Statement No 81
In March of 2016, GASB issued Statement No. 81, Irrevocable Split Interest Agreements. This statement was
issued to improve accounting and financial reporting for irrevocable split -interest agreements by providing
recognition and measurement guidance for situations in which a government is a beneficiary of the agreement.
Split -interest agreements are a type of giving agreement used by donors to provide resources to two or more
beneficiaries, including governments. Split -interest agreements can be created through trusts—or other legally
enforceable agreements with characteristics that are equivalent to split -interest agreements—in which a donor
transfers resources to an intermediary to hold and administer for the benefit of a government and at least one other
beneficiary. This Statement requires that a government that receives resources pursuant to an irrevocable split -
interest agreement recognize assets, liabilities, and deferred inflows of resources at the inception of the agreement.
Furthermore, this Statement requires that a government recognize assets representing its beneficial interests in
irrevocable split -interest agreements that are administered by a third party, if the government controls the present
service capacity of the beneficial interests. This Statement requires that a government recognize revenue when the
resources become applicable to the reporting period. The requirements of this Statement are effective for reporting
periods beginning after December 15, 2016. The City has elected not to early implement GASB No. 81 and has not
determined its effect on the City's financial statements.
Governmental Accounting Standard Board Statement No. 82
In March of 2016, GASB issued Statement No. 82, Pension Issues — An Amendment of GASB Statements No. 67,
No. 68, and No. 73. This statement was issued to address certain issues that have been raised with respect to
Statements No. 67, Financial Reporting for Pension Plans, No. 68, Accounting and Financial Reporting for
Pensions, and No. 73, Accounting and Financial Reportingfor Pensions and Related Assets That Are Not within the
Scope of GASB Statement 68, and Amendments to Certain provisions of GASB Statements 67 and 68. Specifically,
this Statement addresses issues regarding (1) the presentation of payroll -related measures in required supplementary
information, (2) the selection of assumptions and the treatment of deviations from the guidance in an Actuarial
Standard of Practice for financial reporting purposes, and (3) the classification of payments made by employers to
satisfy employee (plan member) contribution requirements. Prior to the issuance of this Statement, Statements 67
and 68 required presentation of covered -employee payroll, which is the payroll of employees that are provided with
pensions through the pension plan, and ratios that use that measure, in schedules of required supplementary
information. This Statement amends Statements 67 and 68 to instead require the presentation of covered payroll,
defined as the payroll on which contributions to a pension plan are based, and ratios that use that measure. This
Statement also clarifies the term deviation used in Actuarial Standards of Practice and payments made by the
employer to satisfy contribution requirements. The requirements of this Statement are effective for reporting
periods beginning after June 15, 2016, except for the requirements of this Statement for the selection of assumptions
in a circumstance in which an employer's pension liability is measured as of a date other than the employer's most
recent fiscal year-end. In that circumstance, the requirements for the selection of assumptions are effective for that
employer in the first reporting period in which the measurement date of the pension liability is on or after June 15,
2017. The City has elected not to early implement GASB No. 82 and has not determined its effect on City's
financial statements.
31
City of Lake Elsinore, California
Notes to Financial Statements
Year Ended June 30, 2016
1) REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
C) Basis of Presentation
The City's basic financial statements are prepared in conformity with accounting principles generally accepted in the
United States of America. The Government Accounting Standards Board is the acknowledged standard setting body
for establishing accounting and financial reporting standards followed by governmental entities in the United States of
America.
Govermnent-wide Statements: The government -wide financial statements (i.e.. the Statement of Net Position and the
Statement of Activities) report information about the reporting government as a whole, except for its fiduciary
activities. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are
reported separately from business -type activities, which rely to a significant extent on fees and charges for support.
Likewise, the primary government (including its blended component units) is reported separately from discretely
presented component units for which the primary government is financially accountable. The City has no business -
type activities or discretely presented component units. For the most part, the effect of interf aid activity has been
removed from the government -wide financial statements. Direct payments have not been eliminated from the
functional categories. Internal expenses and internal payments have been eliminated.
The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segment are
offset by program revenues. Direct expenses are expenses that are clearly identifiable with a specific program, project,
function or segment. Program revenues of the City include: 1) charges to customers or applicants who purchase, use,
or directly benefit from goods, services, ar nrivilegcs provided by a given function or segment and 2) grants and
contributions that are restricted to meeting the operational or capital requirements of a particular function or segment.
Taxes and other items that are properly not included among program revenues are reported instead as general revenues.
The underlying accounting system of the City is organized and operated on the basis of separate funds, each of which is
considered to be a separate accounting entity. The operations of each fund are accounted for with a separate set of self -
balancing accounts that comprise its assets, liabilities, deferred outflows/inflows of resources, fund equity, revenues
and expenditures or expenses, as appropriate. Governmental resources are allocated to and accounted for in individual
fiords based upon the purposes for which they are to be spent and the means by which spending activities are
controlled.
Separate financial statements for the government's governmental finds, proprietary funds and fiduciary funds are
presented after the government -wide financial statements. These statements display information about major funds
individually and nonmajor funds in the aggregate for governmental funds. Fiduciary statements, even though excluded
from the government -wide financial statements, represents private purpose trust funds and agency funds.
D) Measurement Focus, Basis of Accounting, and Financial Statement Presentation
The government -wide financial statements are reported using the economic resources measuremew focus and the
accrual basis ofaccoanfing, as are the proprietary funds and private -purpose trust fund financial statements. Revenues
are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related
cash flows.
When both restricted and unrestricted resources are available for use, it is the government's policy to use restricted
resources first, then unrestricted resources as they are needed.
32
City of Lake Elsinore, California
Notes to Financial Statements
Year Ended June 30, 2016
1) REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
D) Measurement Focus, Basis of Accounting, and Financial Statement Presentation - Continued
Governmental fund financial statements are reported using the current financial resources measurement focus and the
modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available.
Revenues are considered to be available when they are collectible within the current period or soon enough thereafter
to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are
collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is
incurred, except for principal and interest on general long-term liabilities and compensated absences which are
recognized as expenditures to the extent they have matured. General capital asset acquisitions are reported as
expenditures in governmental funds. Proceeds of general long -tern liabilities are reported as other financing sources.
Property taxes, firanchise taxes, intergovernmental revenues, licenses, and interest associated with the current fiscal
period are all considered to be susceptible to accrual, and are therefore recognized as revenues of the current fiscal
period. Only the portion of special assessments receivable due within the current fiscal period is considered to be
susceptible to accrual as revenue of the current period. All other revenue items are considered to be measurable and
available only when cash is received by the government.
Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and
expenses generally result from providing services and producing and delivering goods in connection with a
proprietary fund's in ongoing operations. All revenues and expenses not meeting this definition are reported
as nonoperating revenues and expenses.
The City's fiduciary funds consist of private purpose trust funds which are reported using the economic resources
measurement focus and the agency funds which have no measurement focus, but utilizes the accrual basis for
reporting its assets, deferred outflows/inflows of resources, and liabilities.
The City reports the following major governmental funds:
The General Fund is used to account for all financial resources of the City, except for those required to be
accounted for in another fund.
The Lou, and A4oderate Income Housing Special Revenue Fund is used to account for funds to be used for low and
moderate income projects. Expenditures for this fund are restricted to low and moderate income housing projects.
The Public Financing Authority Debt Service Fend is used to account for the accumulation of resources for, and
the repayment of, long-term debt principal, interest and related costs of the Authority.
The Recreation Authority Debt Service Fund is used to account for debt service transactions including revenue
collections and payments of principal and interest on long-term obligations of the component unit.
The Assessment Districts Capital Project Fund is used to account for transactions related to proceeds from
assessment bonds and other resources used to acquire and construct certain capital facilities.
The Capital Improvement Plan Capital Project Fund is used to account for capital improvement plan projects,
financed by grants, resources from other funds and miscellaneous revenues.
33
City of Lake Elsinore, California
Notes to Financial Statements
Year Ended .Tune 30, 2016
1) REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -Continued
D) Measurement Focus, Basis of Accounting, and Financial Statement Presentation - Continued
Additionally, the City reports the following fund types:
The Internal Service Funds are used to account for goods or services provided by one department to other
departments on a cost -reimbursement basis.
The Private jou pose Trust Fund is used to account for activities of the Successor Agency to the Lake Elsinore
Redevelopment Agency.
The Agency Funds are used to account for money received by the City as an agent for individuals, other
governments and other entities.
E) Encumbrances
Encumbrances represent commitments related to unperformed contracts for goods or services. Encumbrance
accounting, under which purchase orders, contracts, and other commitments for the expenditure of resources are
recorded to reserve that portion of the applicable appropriation, is employed as an extension of formal budgetary
integration in the General Fund, Special Revenue Funds, and Capital Project Funds. Unexpended and unencumbered
appropriations of the governmental funds automatically lapse at the end of the fiscal year.
F ..
F) bnvestments
Investments are reported at fair value, except for the investments in local obligations, which are reported at cost,
because the investments are not transferable and the fair values are not affected by changes in interest rates.
Investment earnings includes interest earnings, changes in fair value, any gains or losses related to the liquidation or
sale of the investment.
G) Employee Compensated Absences
In accordance with GASB Statement No. 16, a liability is recorded for unused vacation, sick, holiday benefits and
compensatory leave balances since the employees' entitlement to these balances are attributable to services already
rendered and it is probable that virtually all of these balances will be liquidated by either paid time off or payment upon
termination or retirement. The amount recorded in accordance with GASB No. Statement 16 at June 30, 2016 was
$772,564.
R) Inter -fund Activity
Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal
year are referred to as either "due to/from other funds" (i.e.. the current portion of interfund loans) or "advances
to/from other funds" (i.e., the noncurrent portion of interfund loans).
Noncurrent portions of long-term interfund loan receivables are reported as advances and such amounts are offset
equally by a nonspendable fund balance which indicates that they do not constitute expendable available financial
resources and therefore are not available for appropriation.
34
City of Lake Elsinore, California
Notes to Financial Statements
Year Ended June 30, 2016
1) REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
I) Risk Management
The City's Workers' Compensation losses are covered by a policy with the California State Compensation Board. The
City's liability losses are covered under their participation in the California Joint Powers Insurance Authority (` JPIA").
J) Capital Assets
Capital assets, which include land, structures, equipment, and infrastructure assets, are reported in the government -wide
financial statements. Capital assets are recorded at cost where historical records are available and at an estimated
historical cost where no historical records exist. Assets purchased in excess of $5,000 are capitalized if they have an
expected useful life of 2 years or more. Infrastructure is capitalized if cost is in excess of $50,000 and it has an
expected useful life of 2 years or more. Capital assets acquired through lease obligations are valued at the present value
of future lease payments at the date acquired. Donated capital assets are valued at their estimated fair market value at
the date of donation. The cost of normal maintenance and repairs that do not add to the value of the asset's lives are not
capitalized.
Capital assets used in operations are depreciated over their estimated useful lives using the straight-line method in the
government -wide financial statements. Depreciation is charged as an expense against operations and accumulated
depreciation is reported on the Statement of Net Position. The range of lives used for depreciation purposes for each
capital asset class is as follows:
Buildings and Structures
Improvements Other Than Buildings
Machinery and Equipment
Furniture and Fixtures
Automotive Equipment
Infrastructure
K) Property Tax Revenue
4.01,,r;i.s _..
25 years
5 - 8 years
5 years
5 years
35 - 100 years
Property tax in California is levied according to Article 13-A of the California Constitution. The County of Riverside,
California (tine County) is permitted by State law (Proposition 13) to levy taxes at 1% of full market value (at time of
purchase) as determined by the County Assessor.
Property taxes are levied by the County and shared with all other political jurisdictions within the County. These
political jurisdictions and the County may levy an additional property tax override only after two-thirds approval of Tile
jurisdictions' voters.
The County bills and collects the property taxes and remits them to the City in installments during the year. City
property tax revenues are recognized when levied provided that the revenue is collected during the year or within 60
days of year-end. Property taxes attach as an enforceable lien on property as of January 1. Taxes are levied on July 1,
and are payable in two installments on Novennber 1 and February
and April 10, respectively.
35
Such taxes become delinquent on December 10
City of Lake Elsinore, California
Notes to Financial Statements
Year Ended June 30, 2016
1) REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES- Continued
L) Miscellaneous Revenues
Included in miscellaneous revenues for the governmental funds is $2,288,085 of fire service tax credits, $919,831
reimbursement revenues and $366,362 other revenues. Miscellaneous revenues for the Statement of Activities include
$498,034 reimbursed revenues and $208,060 other revenues.
M) Deferred Outflows/Inflows of Resources
In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows
of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of
net position that applies to a future period(s) and so will not be recognized as an outflow of resources
(expense/expenditure) until then. The City only has two items that qualify for reporting in this category. One is the
deferred charge on refunding reported in the government -wide statement of net position. A deferred charge on
refunding results from the difference in the carrying value of refunded debt and its reacquisition price. This amount is
deferred and amortized over the shorter of the life of the refunding or refunding debt. The City also has deferred
outflows related to pensions, which arises only under a full accrual basis of accounting. Accordingly, this item
(pension related items), is reported only in the government -wide statement of net position. This includes pension
contributions subsequent to the measurement date of the net pension liability and other amounts (see Note 15), which
are amortized by an actuarial determined period.
In addition to liabilities, the statement of financial position will so.=times report a separate section for deferred inflows
of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net
position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that
time. The City has one type of item, which arises only under a modified accrual basis of accounting that qualifies for
reporting in this category. Accordingly, the item, unavailable revenue, is reported only in the governmental funds
balance sheet. The governmental funds report unavailable revenues from interest on loans and notes receivable. These
amounts are deferred and recognized as all inflow of resources in the period that the amounts become available. The
City also has deferred inflows of resources related to pensions, which arises only under a full accrual basis of
accounting. Accordingly, this item (pension related items), is repotted only in the government -wide statement of net
position. These amounts (see Note 15) are amortized by an actuarial determined period.
N) Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United
States of America requires management to make estimates and assumptions that affect the reported amounts of assets,
liabilities, deferred outflows/inflows of resources and disclosure of contingent assets and liabilities at the date of the
financial statements and the repotted amounts of revenues and expenditures/expenses during the reporting period.
Actual results could differ from those amounts.
36
City of Lake Elsinore, California
Notes to Financial Statements
Year Ended June 30, 2016
2) CASH AND INVESTMENTS
Cash and Investments are classified in the accompanying financial statements as follows:
Statement of Net Position
Cash and Investments $ 49,214,688
Restricted Cash and Investments 222,472,430
Statement of Fiduciary Net Position:
Cash and Investments 16,204,957
Cash and Investments with Fiscal Agent 22,948,006
Total Cash and Investments $_31,0 840 081
Cash and investments consist of the following:
Petty Cash $ 1,300
Deposits with Financial Institutions 1,668,292
Investments 309,170,489
Total Cash and Investments $ 310.840981
Investments Authorized by the California Government Code and the City's Investment Policy
The table below identifies the investment types. that are authorized for the City by the California Government Code (or.
the City's investment policy, where more restrictive). The table also identifies certain provisions of the California
Government Code (or the City's investment policy, where more restrictive) that address interest rate risk, credit risk, and
concentration of credit risk. This table does not address investments of debt proceeds held by bond trustee that are
governed by the provisions of debt agreements of the City, rather than the general provisions of the California
Government Code or the City's investment policy.
*Excluding amounts held by bond trustee that ale not subject to Cali lornia Government Code Restrictions.
37
Maximum
Maximum
Authorized
Maximum
Percentage
Investment
Investment Type
Maturity
Of Portfolio*
In One Issuer
U.S. Treasury Obligations
5 years
None
None
U.S. Government Sponsored Agency Securities
5 years
None
40%
State and Local Agency Obligations
5 years
None
5%
Banker's Acceptances
180 days
40%
30%
Insured or Collateralized Time Certificate of Deposits
5 years
None
5%
Commercial Paper
270 days
25%
10%
Negotiable Certificates of Deposit
5 years
30%
5%
Repurchase Agreements
30 days
None
5%
Reverse Repurchase Agreements
92 days
10%
5%
Medium -Term Corporate Notes
5 years
30%
5%
Local Agency Investment Fund (LAIF)
N/A
None
$50,000,000
California Asset Management Program (CAMP)
N/A
None
5%
Money Market Fund
N/A
20%
5%
*Excluding amounts held by bond trustee that ale not subject to Cali lornia Government Code Restrictions.
37
City of Lake Elsinore, California
Notes to Financial Statements
Year Ended June 30, 2016
2) CASH AND INVESTMENTS - Continued
Investments Authorized by Debt Agreements
Investments of debt proceeds held by bond trustee are governed by provisions of the debt agreements, rather than the
general provisions of the California Government Code or the City's investment policy. Investments authorized for funds
held by bond trustee include, United States Treasury Obligations, United States Government Sponsored Agency
Securities, Guaranteed Investment Contracts, Commercial Paper, Local Agency Bonds, Banker's Acceptance and Money
Market Mutual Funds. There were no limitations on the maximum amount that can be invested in one issuer, maximum
percentage allowed or the maximum maturity of an investment, except for the maturity of Commercial Paper which is
limited to 92 days and of Banker's Acceptances which are limited to one year.
Disclosures Relating to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment.
Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market
interest rates. One of the ways that the City manages its exposure to interest rates risk is by purchasing a combination of
shorter term and longer term investments and by timing cash flows from maturities so that a portion of the portfolio is
maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for
operations.
Information about the sensitivity of the fair values of the City's investments (including investments held by bond trustee)
to market interest..rate --fluctuations is provided by the following table that shows the distribution, .of. -the
.Ciz;'s
investments by maturity:
Investment Type
Local Agency Investment Fund
Corporate Notes
Federal Agency Securities
U.S. Treasury Notes
Municipal Bonds
Certificate of Deposit
California Asset Management
Program Pool (CAMP)
Held by Bond Trustee:
Money Market Mutual Funds
Local Obligation Bonds
Total
12 Months 13 to 24 25 to 60 More Than
or Less Months Months 60 Months
$ 22,905,566 $ 22,905,566 $ $
9,624,781 1,765,558 2,562,328 5,296,895
5,839,053 150,610 2,294,980 3,393,463
19,173,453 175,474 1,201,898 17,796,081
357,370 357,370
5,739,980 100,050 5,639,930
109,850 109,850
53,707,297 53,707,297
191,713139 5496,082 5,881,08220,048,244 160,287,731
$
309,170,489 ;"67 R57 $ 17 s8o z18 $34Sz$3 $—)0 287.73]
38
City of Lake Elsinore, California
Notes to Financial Statements
Year Ended June 30, 2016
2) CASH AND INVESTMENTS - Continued
Disclosures Relating to Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the
investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization.
Presented below is the minimum rating required by (where applicable) the California Government Code, the City's
investment policy, or debt agreements, and the actual rating, by Standard and Poor's as of year-end for each investment
type.
The City's investment in local obligation bonds are secured by property taxes on the subordinate tax allocation bonds
and special assessment taxes on property owned within the Community Facilities Districts or Special Assessment
Districts. Due to the decline in property values and general economic conditions, there has been an increase in
delinquent special assessment collections, resulting in foreclosures on property secured by the special assessments. The
City may not be able to recover its investment in these local obligations bonds if collections of special assessments
decline and foreclosure proceeds are not adequate to cover the investment balances.
The ratings for the other above are as follows:
Other:
Minimum
$ 1,087,548
AA-
4,414,626
Not
775,419
A-1
Legal
A+
1,880,373
Not
Required to
A-
1,205,063
Ratine
AAA
AA+ Other
Rated
be Rated
Local Agency Investment Fund
$ 22,905,566
N/A
$
$ $
$ 22,905,566
$
Corporate Notes
9,624,781
AA
706,789 8,917,992
Federal Agency Securities
5,839,053
N/A
5,839,053
U.S. Trcasmy Note'ss'
19,173,453
N/A
'- ' "
19,173,453
Municipal Bonds
357,370
357,369
Certificale of Deposit
5,739,980
5.462398
277,582
California Asset Management
Program Pool (CAMP)
109,850
N/A
109,850
Held by Bond Trustee:
Money Market Mutual Funds
53,707,297
53,707,297
Local Obligation Bonds
191,713,139
191,713,139
Total
309,170,489
i131—B=R
(,.Safi I J1.7 -K
$214.896,297
The ratings for the other above are as follows:
Other:
AA
$ 1,087,548
AA-
4,414,626
A-1+
775,419
A-1
2,503,857
A+
1,880,373
A
2,310,703
A-
1,205,063
BBB+
560.170
S IN X37759
39
City of Lake Elsinore, California
Notes to Financial Statements
Year Ended June 30, 2016
2) CASH AND INVESTMENTS - Continued
Concentration of Credit Risk
The investments policy of the City contains no limitations on the amount that can be invested in any one issuer beyond that
stipulated by the California Government Code. Investments in any one issuer (other than U.S. Treasury securities, mutual
funds, and external investment pools) that represent 5% or more of total City's investments are as follows:
Investment Type Reported Amount
CFD 2003-2, 2014 Series (Improvement Areas A & C)
Local Obligation Bond
$
18,282,696
CFD 2003-2, 2015 Series (improvement Area B)
Local Obligation Bond
$
27,574,750
CFD 2004-3-1, 2015 Series (Improvement Area 1)
Local Obligation Bond
$
22,310,344
CFD 2004-3-2, 2015 Series (Improvement Area 2)
Local Obligation Bond
$
24,675,801
CFD 2005-2, 2015 Series (Improvement Area 2)
Local Obligation Bond
$
22,432,523
Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government
will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an
outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g.,
broker-dealer) to a transaction, a government will not be able to reroverthe val,_e of its investment or collateral securities
that are in the possession of another party.
The California Government Code and the City's investment policy do not contain legal or policy requirements that would
limit the exposure to custodial credit risk for deposits or investments, other than the following provision for deposits: The
California Government Code requires that a financial institution secure deposits made by state or local government units by
pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the
governmental unit). The market value of the pledged securities in the collateral pool must equal at least 110% of the total
amount deposited by the public agencies. California law also allows financial institutions to secure City deposits by
pledging first trust deed mortgage notes having a value of 150% of the secured public deposits. As of June 30, 2016,
$1,258,198 of the City's deposits with financial institutions in excess of federal depository insurance limits were held in
collateralized accounts.
Local Agency Investment Fund
The LAIF is a special fund of the California State Treasury through which local governments may pool investments. The
Authority may invest up to $50,000,000 in the fund. Investments in LAIF are highly liquid, as deposits can be converted to
cash within twenty-four hours without loss of interest. Investments with LAIF are secured by the full faith and credit of the
State of California. The yield of LAIF during the quarter ended June 30, 2016 was 0.55%. The carrying value and
estimated market value of the LAIF Pool at June 30, 2016 was $75,395,751,048 and $75,442,588,513, respectively. 'fire
City's share of the Pool at June 30, 2016 was approximately 0.0303 percent.
Hil
City of Lake Elsinore, California
Notes to Financial Statements
Year Ended June 30, 2016
2) CASH AND INVESTMENTS - Continued
Local Agency Investment Fund - Continued
The fair value of the City's investment in this pool is reported in the accompanying financial statements at amounts based
upon the City's pro -rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized
cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which
are recorded on an amortized cost basis. Included in LAIF's investment portfolio are certain derivative securities or similar
products in the form of structured notes totaling $400,000,000 and asset-backed securities totaling $1,447,948,000. LAIF's
and the Authority's exposure to risk (credit, market or legal) is not currently available.
The LAIF has oversight by the Local Investment Advisory Board. The LAIF Board consists of five members as designated
by Statute. LAIF is also regulated by California Government Code Section 16429.
Investment in California Asset Management Program
The California Asset Management Program (the CAMP) is a publicjoint powers authority which provides California Public
Agencies with investment management services for surplus funds and comprehensive investment management, accounting
and arbitrage rebate calculation services for proceeds of tax-exempt financings. The CAMP currently offers the Cash
Reserve Portfolio, a short-term investment portfolio, as a means for Public Agencies to invest these funds. Public Agencies
that invest in the Pool (Participants) purchase shares of beneficial interest. Participants may also establish individual,
professionally managed investment accounts (Individual Portfolios) by separate agreement with the Investment Advisor.
The City has a separate account in the Investment Advisor to manage part of the CAMP portfolio.
Investments in the Pools and Individual Portfolios are made only in investments in which Public Agencies generally are
permitted by California statute. The CAMP may reject any investment and may limit the size of a Participant's account.
The Pool seeks to maintain, but does not guarantee, a constant net asset value of $1.00 per share. A Participant may
withdraw funds from its Pool accounts at any time by check or wire transfers. Requests for wire transfers must be made by
9:00 a.m. that day. Fair value of the Pool is determined by the fair value per share of the Pool's underlying portfolio.
Investment in Bonds
The Lake Elsinore Public Financing Authority has purchased various Assessment District (AD) and Community Facilities
District (CPD) bonds from the proceeds of revenue bonds issued by the Authority to facilitate the respective bond issues of
the Districts. The CPD and Assessment District Bonds are secured solely by assessments on property owners within the
Districts. The repayment schedules of the bonds, and interest thereon, to the Authority are concurrent and sufficient to
satisfy the debt service requirements of the respective Authority revenue bonds.
EF
City of Lake Elsinore, California
Notes to Financial Statements
Year Ended June 30, 2016
2) CASH AND INVESTMENTS - Continued
Investment in Bonds - Continued
The CFD and Assessment District Bonds investments are summarized below.
AD 93-I Refunding Improvement Bonds, 2012 Series A
CFD 2005-5 Special Tax Bonds, 2012 Series A
CFD 2003-2 Special Tax Bonds, 2012 Series (Improvement Area C)
CFD 2006-1 Special Tax Bonds, 2013 Series (Improvement Area A)
CFD 88-3 Special Tax Bonds, 2013 Series B
CFD 98-1 Special Tax Bonds, 2013 Series C
CFD 2003-2 Special Tax Bonds, 2014 Series A (Improvement Area D)
CFD 2003-2 Special Tax Bonds, 2014 Series (Improvement Areas A and C)
CPD 95-1 Special Tax Bonds, 2015 Series
CFD 2003-2 Special Tax Bonds, 2015 Series (Improvement Area B)
CFD 2004-3-1 Special Tax Bonds, 2015 Series (Improvement Area 1)
CPD 2004-3-2 Special Tax Bonds, 2015 Series (Improvement Area 2)
CFD 2005-1 Special Tax Bonds, 2015 Series
CFD 2005-2 Sp.?eid Tax B ,,i,ds; 2015 Series (Improvement Area 2)
CFD 2005-6 Special Tax Bonds, 2015 Series
CFD 2006-2 Special Tax Bonds, 2015 Series
CFD 2006-1 Special Tax Bonds, 2015 Series (Improvement Area B)
CFD 88-3 Special Tax Bonds, 2015 Series
42
Fair Value
$ 13,604,374
2,992,267
5,197,712
3,366,015
2,656,392
12,051,208
7,193,346
18,282,696
1,103,090
27,574,750
22,310,344
24,675,801
8,611,235
22,432,523
2,989,522
6,194,598
2,887,266
7.590,000
$ 191.713 ,132
City of Lake Elsinore, California
Notes to Financial Statements
Year Ended June 30, 2016
2) CASH AND INVESTMENTS - Continued
Cash and Investment by Entity
Cash and investments held by entity at June 30, 2016 are as follows:
Petty Cash and Change Drawer
Deposits at Carrying Amount (1)
Local Agency Investment Fund
Corporate Notes
Federal Agency Securities
U.S. Treasury Notes
Municipal Bonds
Certificate of Deposits
California Asset Management
Program Pool (CAMP)
Meld by Bond Trustee:
Money Market Mutual Bonds
Local Obligation Bonds
Total Cash and Investments
Public
City of Successor Financing Recreation
Lake Elsinore Agency Authority Authority Total
$ 1,300 $
1,495,742
18,899,050
3,676,529
8,495,173
1,129,608
4,826,966
1,012,087
16,443,247
2,730,206
326.767
30,603
5,338,990
400,990
94,682 15,168
$ $ $ 1,300
172,550 1,668,292
329,987 22,905,566
9,624,781
5,839,053
19,173,453
357,370
5,739,980
109,850
27,481,391 508,616 23,990,484 1,726,806 53,707,297
191.713,139 191.713,139
$ 83 4403.308 -$===_9-503 .802j2jk20y, I60 L-_ 1 726.806 $ 31 Q�&4,0081
('Net of deposits in transit and outstanding warrants.
3) FAIR VALUE MEASUREMENTS
Governmental Accounting Standards Board (GASB) Statement No. 72, Fair Value Measurements and Application,
provides the framework for measuring fair value. The framework provides a fair value hierarchy that prioritizes the
inputs to valuation techniques used to measure fair value with Level I given the highest priority and Level 3 the lowest
priority. The three levels of the fair value hierarchy are as follows:
Level l inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the organization has
the ability to access at the measurement date,
Level 2 inputs are inputs other than quoted prices included within Level I that are observable for the asset or liability,
either directly or indirectly. Level inputs include the following:
a. Quoted prices for similar assets or liabilities in active markets.
b. Quoted prices for identical or similar assets or liabilities in markets that are not active.
43
City of Lake Elsinore, California
Notes to Financial Statements
Year Ended June 30, 2016
3) FAIR VALUE MEASUREMENTS - Continued
c. Inputs other than quoted prices that are observable for the asset or liability (for example, interest rates and yield
curves observable at commonly quoted intervals, volatilities, prepayment speeds, loss severities, credit risks,
and default rates),
d, hrputs that are derived principally from or corroborated by observable market data by correlation or other means
(market -corroborated inputs).
Level 3 inputs are unobservable inputs for the asset or liability.
Fair value of assets measured on a recurring basis at June 30, 2016, are as follows:
Local Agency Investment Fund
Corporate Notes
Federal Agency Securities
U.S. Treasury Notes
Municipal Bonds
Certificates of Deposit
California Asset Management
Program Pool (CAMP)
Held by Bond Trustees
Money Market Mutual Funds
Local Obligation Bonds
Total
5,739,980
109,850
53,707,297
191,713339
5„739,980,
109,850
53,707,297
191,713,139
$ 309,170,489 $ 232,447,776 $ 76,722,713
Fair values for investments are determined by using a matrix pricing technique. Matrix pricing is used to value securities
based on the security's relationship to benchmark quoted prices. Uncategorized investments do not fall under the fair
value hierarchy as there is no active market for the investments. Land held for resale was acquired for the purpose of
redevelopment rather than for income and profit. Therefore, land for resale is exempt under GASB 72 fair value
measurements.
4) LOANS RECEIVABLE FROM SUCCESSOR AGENCY
Management believes, in consultation with legal counsel, that the obligations of the dissolved Redevelopment Agency due
to the City are valid enforceable obligations payable by the Successor Agency under the requirements of the Dissolution Act
and AB 1484. Accordingly, the City has not recorded an allowance for uncollectible advances. The State of California
Department of Finance (DOF) has audited the 1995 Loan from the Housing Fund and the City Bond Debt Service Advances
as part of its review of the Recognized Obligation Payments Schedule (BOPS), and has not objected to the Successor
Agency's repayment of those loans in accordance with the approved ROPS and applicable loan agreements. However, it is
reasonably possible that a legal determination or a determination by DOF may be made at a later date that would be
unfavorable to the City.
44
Significant Other
Observable
Inputs
Fair Value
(Level 2) Uncategorized
22,905,566
$ $ 22,905,566
9,624,781
9,624,781
5,839,053
5,839,053
19,173,453
19,173,453
357,370
357,370
5,739,980
109,850
53,707,297
191,713339
5„739,980,
109,850
53,707,297
191,713,139
$ 309,170,489 $ 232,447,776 $ 76,722,713
Fair values for investments are determined by using a matrix pricing technique. Matrix pricing is used to value securities
based on the security's relationship to benchmark quoted prices. Uncategorized investments do not fall under the fair
value hierarchy as there is no active market for the investments. Land held for resale was acquired for the purpose of
redevelopment rather than for income and profit. Therefore, land for resale is exempt under GASB 72 fair value
measurements.
4) LOANS RECEIVABLE FROM SUCCESSOR AGENCY
Management believes, in consultation with legal counsel, that the obligations of the dissolved Redevelopment Agency due
to the City are valid enforceable obligations payable by the Successor Agency under the requirements of the Dissolution Act
and AB 1484. Accordingly, the City has not recorded an allowance for uncollectible advances. The State of California
Department of Finance (DOF) has audited the 1995 Loan from the Housing Fund and the City Bond Debt Service Advances
as part of its review of the Recognized Obligation Payments Schedule (BOPS), and has not objected to the Successor
Agency's repayment of those loans in accordance with the approved ROPS and applicable loan agreements. However, it is
reasonably possible that a legal determination or a determination by DOF may be made at a later date that would be
unfavorable to the City.
44
City of Lake Elsinore, California
Notes to Financial Statements
Year Ended June 30, 2016
4) LOANS RECEIVABLE FROM SUCCESSOR AGENCY - Continued
1995 Loan from Housing Fund
As of June 30, 2016, the Successor Agency owed the City, in its capacity as housing successor agency, $26,194,304. The
loans were made from the Low and Moderate Income Housing Special Revenue Fund from the 1995 Series A and 1999
Series C bond proceeds pursuant to that certain Housing Fund Loan Agreement dated December 1, 1995. The loan
proceeds were deposited into the Rancho Laguna Special Revenue Fund, and then subsequently loaned to each of the three
project areas as interfund loans in accordance with the loan agreement. The 1995 Series A and 1999 Series C bonds were
refunded in fiscal year 2010 with the issuance of the 2010 Series A and 2010 Series B bonds. The loans payable include an
original amount of $18,040,440 and accrued interest of $8,659,352. During the fiscal year, accrued interest of $505,488
was earned on the outstanding loans. The loans from the Low and Moderate Income Housing Special Revenue Fund are
repayable from all available revenues of the Successor Agency after payment of senior indebtedness in accordance with the
governing loan agreement.
The issuer of the bonds sought court validation of the actions taken in connection with the 1995 Bonds under Code of Civil
Procedure Section 869, et seq. On November 14, 1995, the Superior Court of the State of California in and for the County
of Riverside validated the 1995 bond issues and the interfund and housing fund loan agreements relating to payment of the
bond debt.
SERAF Advances from Horsing Fund
Advances due to the City, in its capacity as housing successor agency, include a loan of $3,750,000 as a result of the
suspension of a portion of the 20% set aside requirement to assist in the payment of the SERAF obligation for fiscal year
2010. This advance is to be repaid by the Successor Agency in installments beginning fiscal year 2014-2015. Repayment
of the SERAF advances are limited by a formula set forth in AB 1484, have a priority over repayment of curtain other
advances, and shall not be made prior to the 2013-2014 fiscal year. The balance of the loan as of June 30, 2016 is
$2,941,619.
Public Finance Authority Loan Agreements
The Lake Elsinore Public Financing Authority ("Authority") entered into loan agreements with the former Redevelopment
Agency ("Agency") whereby the Authority loaned the proceeds of 2010 Series A, B and C Tax Allocation Revenue Bonds
and the 2011 Series A Tax Allocation Bonds issued by the Authority to the Agency to retire debt and provide funds for
certain public improvements in Agency project areas. As a result of the dissolution of the Agency, the obligation to pay the
loans to the Authority was transferred to the Successor Agency to the Redevelopment Agency of the City of Lake Elsinore
("Successor Agency"). The principal and interest are payable in installment payments payable not less than three days to
the due date on the related bonds payable (see Note 8).
The following table represents the outstanding balance of loans receivable from the Successor Agency at June 30, 2016:
Total44.705.000
45
Loans
Tax Allocation
Receivable
Revenue Bonds
Balance
2010 Series A Issue
$ 13,170.000
2010 Series B Issue
7,460,000
2010 Series C Issue
24.075.000
Total44.705.000
45
City of Lake Elsinore, California
Notes to Financial Statements
Year Ended June 30, 2016
5) NOTES RECEIVABLE
The City has a note receivable in the amount of $1,000,000 from Pottery Court Housing Associates, L.P. dated December 9,
2009. The proceeds of the loan assisted with the development of the Pottery Court Affordable Housing Project. This loan
was funded with HOPE VI grant funds from the United States Department of Housing and Urban Development. The loan
is to be repaid with interest in arrears in annual installments on July 1, commencing on July I in the calendar year
immediately following the calendar year in which the deed of trust securing the permanent loan is recorded in the official
records of Riverside County. Absent prepayment or acceleration, the Borrower agrees to pay the loan in annual payments
equal to 75 percent of the residual receipts as defined in the loan agreement. Notwithstanding any other provision, unless
the loan is paid earlier, the outstanding principal and accrued unpaid interest is payable 55 years from the date of recording
of the release of construction covenants. The release of construction covenants was recorded on August 8, 2012. At June
30, 2016, the total outstanding balance of $1,180,000 includes accrued interest of $180,000.
The City's Low and Moderate Income Housing Asset Special Revenue Fund has a note receivable in the amount of
$9,737,000 from Pottery Court Housing Associates, L.P. dated March 10, 2011. The proceeds of the loan assisted with the
acquisition of property and development of the Pottery Court Affordable Housing Project. The loan is to be repaid with
interest in arrears in annual installments on Judy 1, commencing July 1 in the calendar year immediately following the
calendar year in which the deed of trust securing the permanent loan is recorded in the official records of Riverside County.
Absent prepayment or acceleration, the Borrower agrees to pay the loan in annual payments equal to 67.5 percent of the
residual receipts as defined in the loan agreement. Notwithstanding any other provision, unless the loan is paid earlier, the
outstanding principal and accrued unpaid interest is payable 55 years from the date of recording of the release of
construction covenants. The release of construction covenants was recorded on August 8, 2012. At June 30, 2016, the total
outstanding balance of $11,011 .125 includes-festerest of $1,274,125.
The City's Low and Moderate income Housing Asset Special Revenue Fund has a note receivable in the amount of
$1,100,000 from LMV 11 Affordable, LP dated October 12, 2010. The proceeds of the loan assisted with the rehabilitation
of 64 units of affordable housing for families of the Lakeview 11 Affordable Housing Project. The loan is to be repaid with
interest in arrears in annual installments on July 1, commencing July 1 in the calendar year immediately following the
calendar year in which the deed of trust securing the second permanent loan is recorded in the official records of Riverside
County. Absent prepayment or acceleration, the Borrower agrees to pay the loan in annual payments equal to 30 percent of
the residual receipts as defined in the loan agreement. Notwithstanding any other provision, unless the loan is paid earlier,
the outstanding principal and accrued unpaid interest is payable 55 years from the date of recording of the release of
construction covenants evidencing completion of the rehabilitation. The release of construction covenants was recorded on
August 8, 2012. At June 30, 2016, the total outstanding balance of $1,162,333 includes interest of $62,333.
6) LAND HELD FOR RESALE
The former Redevelopment Agency of the City of Lake Elsinore ("Agency") acquired land for development. As a result of
the dissolution of the Agency, $6,088,480 in land held for resale was transferred to the Successor Agency to the
Redevelopment Agency of the City of Lake Elsinore's private -purpose fiduciary trust fund and $48,369 was retained by the
City and reported in the Low and Moderate Income Housing Asset Special Revenue Fund. The land is being carried at the
lower of cost or net realizable value.
46
City of Lake Elsinore, California
Notes to Financial Statements
Year Ended June 30, 2016
7) CAPITAL ASSETS
The following is a summary of changes in the Governmental Activities Capital Assets:
47
Beginning
Ending
Balance
Additions
Deletions
Balance
Capital Assets, Not Being Depreciated
Land
$ 2,926,422
$
$
$ 2,926,422
Construction in Progress
7,296,848
8.983,237
(8,005,879)
8,274,206
Total Capital Assets,
Not Being Depreciated
10,223,270
8,983,237
(8,005,879)
11.200,628
Capital Assets, Being Depreciated
Building and Structures
19,039,494
(3,525)
19,035,969
Improvements Other Than Buildings
17,593,990
5,737
(19,180)
17,580,547
Machinery and Equipment
2,829,367
81,121
(20,292)
2,890,196
Furniture and Fixtures
976,679
9,408
986,087
Automotive Equipment
3,207,306
289,653
(189,889)
3,307,070
Technology Equipment and Software
322,035
287,421
609,456
Infrastructure
191,907,919
11,154,381
203.062,300
Total Capital Assets, _
Being Depreciated
235,876,790
11,827,721
(232,886)
247Ai1,625
Less Accumulated Depreciation:
Building and Structures
(5,127,947)
(418,943)
1,710
(5,545,180)
Improvements Other Than Buildings
(6,114,540)
(625,481)
12,227
(6,727,794)
Machinery and Equipment
(2,240,124)
(136,941)
18,456
(2,358,609)
Furniture and Fixtures
(755,656)
(86,131)
(841,787)
Automotive Equipment
(2,112,621)
(123,694)
167,696
(2,068,619)
Technology Equipment and Software
(15,998)
(70,759)
(86,757)
Infrastructure
(79 860,610)
(4,619,905)
(84,480,515)
Total Accumulated Depreciation
(96,227496)
(6,081,854)
200,089
(102,109,261)
Total Capital Assets,
Being Depreciated, Net
139.649 294
5,745,867
(32,797)
145,362,364
Total Governmental Activities
Capital Assets, Net
$ 149.872.564_
14.729.104
51 (8,038,676)
$-.-, L�.562 992
47
City of Lake Elsinore, California
Notes to Financial Statements
Year Ended June 30, 2016
7) CAPITAL ASSE'T'S - Continued
Depreciation expense was charged to functions/programs in the Statement of Activities as follows:
Governmental Activities:
General Government
Public Safety
Public Services
Community Services
Total Depreciation Expense
8) LONG-TERM LIABILITIES
$ 307,293
467,657
4,848,885
458,019
$ _AAL 854
48
Date of
Years of
Rate of
Amount
Issue
Maturity
Interest
Authorised
Local Agency Revenue Bonds:
2012 Series A
7/12
2014-2039
1.50%-5.25%
3,450,000
2012 Series B
11/12
2015-2031
2.00%-
5.125%
15,345,000
2012 Series C
12/12
2016-2043
2.00% -
5.00%
5,345,000
2013 Series A
5/13
2016-2044
1.75%-
5.00%
3,620,000
2013Series B
7/13
2015-2021
2.00%-'3.25%
4,215,000
2013 Series C
7/13
2014-2034
2.00% -
5.25%
13,615,000
2014 Series A
1/14
2017-2045
2.25% -
5.75%
7,505,000
2014 Series B
7/14
2016-2041
3.00% -
5.00%
18,210,000
2015 Series
2/15
2016-2041
2.00% -
5.00%
108,845,000
2015 Series A
2/15
2017-2045
2.00% -
3.65%
3,200,000
2015 Series B
5/15
2017-2021
2.00% -
5.00%
7,590,000
Tax Allocation Revenue Bonds:
2010 Series A
2/10
2011-2034
2.00%-
5.25%
$ 15.435,000
2010Series B
5/10
2011-2026
2.00%-4.75%
10,855,000
2010 Series C
10/10
2012-2031
2.00%-
5.00%
29.435,000
Revenue Refunding Bonds:
2013 Series A
9/13
2014-2032
3.00%-
5.00%
$ 14,460,000
Certificates of Participation:
2014 Series A
10/4
2015-2039
2.00%-
5.00%
$ 7,965,000
48
City of Lake Elsinore, California
Notes to Financial Statements
Year Ended June 30, 2016
8) LONG-TERM LIABILITIES- Continued
The following is summary of changes in long-term obligations:
(p Includes bond defcasance of $4,800.000.
Includes bond defeasance of $3,650,000.
49
Beginning
Ending
Due Within
Balance
Additions
Deletions
Balance
One Year
Public Financing Authority:
Local Agency Revenue Bonds:
2011 Series
$ 4,945,000
$
$ (4,945,000)(')$
0
$
2012 Series A
3,325,000
(45,000)
3,280,000
55,000
2012 Series B
14,730,000
(630,000)
14,100,000
655,000
2012 Series C
5,345,000
(5,000)
5,340,000
5,000
2013 Series A
3,620,000
(15,000)
3,605,000
20,000
2013 Series B
3,510,000
(685,000)
2,825,000
650,000
2013 Series C
13,140,000
(485,000)
12,655,000
495,000
2014 Series A
7,505,000
7,505,000
10,000
2014 Series B
18,210,000
(260,000)
17,950,000
370,000
2015 Series
108,845,000
(1,660,000)
107,185,000
1,645,000
2015 Series A
3,200,000
3,200,000
30,000
2015 Series B
7,590,000
7,590,000
1,270,000
Tax Allocation Revenue Bonds:
2010 Series A
13,500,000
(330,000)
13,170,000
345,000
2010 Series B
8,070,000
(610,000)
7,460,000
630,000
2010 Series C
25,290,OQO
(1,215,000)
24,075,000
1,240,000
2011 Series
4,155,000
(4,155,000)1`)
0
Subtotal
244,980,000
0
(15,040,000)
229,940,000
7,420,000
Add (Less) Deferred Amounts:
Bond Premiums
11,897,987
(569,751)
11,328,236
Bond Discounts
(829,400)
200,997
(628,403)
Subtotal
256,048,587
0
(15,408,754)
240,639,833
7,420,000
Revenue Refunding Bonds:
2013 Series A
13,330,000
(580,000)
12,750,000
600,000
Bond Discount
(34,848)
2,101
(32,747)
Certificates of Participation:
2014 Series A
7,635,000
(205,000)
7,430,000
215,000
Premiums
224,283
(9,345)
214,938
Net Pension Liability
7,292,642
2,573,010
(922,012)
8,943,640
Other Post -Employment
Benefit Obligation (Note 15)
8,707,294
1,872,558
(569,899)
10,009,953
Compensation Absences
740.034
106,533
(74,003)
772,564
77,256
Total
$293942.994.2
4 552 101
] 669 )
280 72 a I
�8,312>256
(p Includes bond defcasance of $4,800.000.
Includes bond defeasance of $3,650,000.
49
City of Lake Elsinore, California
Notes to Financial Statements
Year Ended June 30, 2016
8) LONG-TERMLIABILITIES-Continued
12) Local Agency Revenue Bonds
In February 1990, the Public Financing Authority was authorized to issue $500,000,000 in revenue bonds for the
purpose of enabling the Public Financing Authority to acquire certain qualified obligations (the "Local Obligations") of
the City or the former Redevelopment Agency for whose benefit the program has been designed, or of any other local
agencies in the State of California, including Community Facilities District and Special Assessment District (the "Local
Agencies"). The Bonds were issued to provide funds to finance the acquisition or construction of land, buildings,
equipment and other capital improvements. The bonds will constitute special obligations of the Public Financing
Authority and will be issued in Series from time to time pursuant to Supplemental Indentures. These bonds will be
payable solely from the repayment by Local Agencies of their obligations and any available surplus revenues.
2012 Series A
In July 2011 $3,450,000 principal amount of 2012 Local Agency Revenue Bonds, Series A, was issued in accordance
with the indenture described above. The bonds are due in annual installments of $25,000 to $255,000 from September
1, 2013 through September 1, 2038. Interest payments ranging from 1.5% to 5.25% are due from March 1, 2013
through September 1, 2038. The bonds are subject to call and redemption prior to their stated maturity commencing
September 1, 2012 at specified redemption prices. At June 30, 2016, the Authority has a cash reserve balance for debt
service of $264,342, which is sufficient to cover the Bond Indenture Reserve Requirement of $264,325.
Future debt requirements for the 2012 Ses-ies A Local Ae^ncy Revenue Bonds are as follows:
Year Ending
June 30
Principal
Interest
Total
2017
$ 55,000
$ 157,881
$ 212,881
2018
60,000
156,369
216369
2019
65,000
154,569
219,569
2020
75,000
152,328
227.328
2021
80,000
149,613
229,613
2022-2026
520,000
693,012
1,213,012
2027-2031
745,000
542,719
1,287,719
2032-2036
970,000
318,937
1,288,937
2037-2039
710,000
57,225
767,225
Total
3.280.000
$_ 2182653
L --- S 662
50
City of Lake Elsinore, California
Notes to Financial Statements
Year Ended June 30, 2016
8) LONG-TERM LIABILITIES- Continued
12) Local Agency Revenue Bonds - Continued
2012 Series B
In November 2012, $15,345,000 principal amount of 2012 Local Agency Revenue Bonds, Series B, was issued in
accordance with the indenture described above. The bonds are due in annual installments of $615,000 to $1,360,000
from September 2, 2014 through September 2, 2030. Interest payments ranging from 2.0% to 5.125% are due from
March 2, 2013 through September 2, 2030. The bonds are subject to call and redemption prior to their stated maturity
commencing March 2, 2013 at specified redemption prices. At June 30, 2016, the Authority has a cash reserve balance
for debt service of $1,429,792, which is sufficient to cover the Bond Indenture Restive Requirement of $1,429,700.
Future debt requirements for the 2012 Series B Local Agency Revenue Bonds are as follows:
Year Ending
June 30,
2017
2018
2019
2020
2021
2022-202:
2027-2031
Total
Principal
$ 655,000
675,000
705,000
735,000
770,000
4,510,000
6,050,000
$ 14,100,000
51
Interest
$ 638,319
619,187
597,166
571,947
543,706
2,141,713
812,312
Total
$ 1,293,319
1,294,1.87
1,302,166
1,306,947
1,313,706
6,651,713
6.862.312
S IQ ,024 &
City of Lake Elsinore, California
Notes to Einaneial Statements
Year Ended June 30, 2016
8) LONG-TERM LIABILITIES - Continued
12) Local Agency Revenue Bonds - Continued
2012 Series C
In December 2012, $5,345,000 principal amount of 2012 Local Agency Revenue Bonds, Series C, was issued in
accordance with the indenture described above. The bonds are due in annual installments of $5,000 to $1,200,000 from
September 1, 2015 through September 1, 2042. Interest payments ranging from 2.0% to 5.0% are due from March 1,
2013 through September 1, 2042. The bonds are subject to call and redemption prior to their stated maturity
commencing March 1, 2013 at specified redemption prices. At June 30, 2016, the Authority has a cash reserve balance
for debt service of $534,500, which is sufficient to cover the Bond Indenture Reserve Requirement of $534,500.
Future debt requirements for the 2012 Series C Local Agency Revenue Bonds are as follows:
Year Ending
,lune 30, Principal Interest Total
2017
$ 5,000
$ 261,019
$ 266,019
2018
15,000
260,766
275,766
2019
20,000
260,281
280,281
2020
25,000
259,588
284,588
_ - 2021
30,000
258,656
288,656
2022-2026
270,000
1,267,434
1,537,434
2027-2031
510,000
1,184,219
1,694,219
2032-2036
845,000
1,018,375
1,863,375
2037-2041
1,300,000
752,500
2,052,500
2042-2043
2,320,000
118.000
2.438,000
Total$
._ 5.340994
�—S.fz44.8M
$—_ 10 980 838
52
City of Lake Elsinore, California
Notes to Financial Statements
Year Ended June 30, 2016
8) LONG-TERM LIABILITIES- Continued
12) Local Agency Revenue Bonds - Continued
2013 Series A
In May 2013, $3,620,000 principal amount of 2013 Local Agency Revenue Bonds, Series A, was issued in accordance
with the indenture described above. The bonds are due in annual installments of $15,000 to $310,000 from September
1, 2015 through September 1, 2043. Interest payments ranging from 1.75% to 5.0% are due from March 1, 2014
through September 1, 2043. The bonds are subject to call and redemption prior to their stated maturity commencing
September 1, 2014 at specified redemption prices. At June 30, 2016, the Authority has a cash reserve balance for debt
service of $325,521, which is sufficient to cover the Bond Indenture Reserve Requirement of $325,500.
Future debt requirements for the 2013 Series A Local Agency Revenue Bonds are as follows:
Year Ending
June 30,
2017
2018
2019
2020
2021
2022-2026
2027-2031
2032-2036
2037-2041
2042-2044
Total
Principal
$ 20,000
25,000
30,000
35,000
40,000
285,000
480,000
735,000
1,085,000
870,000
$ 3.605900
53
Interest Total
$ 169,169
168,672
168,000
167,100
165,925
802,628
723,050
584,022
361,375
67,250
&==_3 37Z -19-t
$ 189,169
193,672
198,000
202,100
205,925
1,087,628
1,203,050
1,319,022
1,446,375
937.250
�. 6.982.191
City of Lake Elsinore, California
Notes to Financial Statements
Year Ended June 30, 2016
S) LONG-TERM LIABILITIES - Continued
12) Local Agency Revenue Bonds - Continued
2013 Series B
In July 2013, $4,215,000 principal amount of 2013 Local Agency Revenue Bonds, Series B, was issued in accordance
with the indenture described above. The bonds are due in annual installments of $425,000 to $705,000 from September
1, 2014 through September 1, 2020. Interest payments ranging from 2.00% to 3.25% are due from September I, 2013
through September 1, 2020. The bonds are subject to call and redemption prior to their stated maturity commencing
September 1, 2013 at specified redemption prices. At June 30, 2016, the Authority has a cash reserve balance for debt
service of $421,527, which is sufficient to cover the Bond Indenture Reserve Requirement of $421,500.
Future debt requirements for the 2013 Series B Local Agency Revenue Bonds are as follows:
Year Ending
June 30, Principal Interest Total
2017
$ 650,000
$ 68,262
$ 718,262
2018
620,000
54,012
674,012
2019
580,000
38,288
618,288
2020
550,000
22,063
572,063
2021
42`_+.600
6,906
431,906
Total
$ 2.825,400
$ 189 531
_ _3 014 Sal
54
City of Lake Elsinore, California
Notes to Financial Statements
Year Ended June 30, 2016
8) LONG-TERM LIABILITIES - Continued
12) Local Agency Revenue Bonds - Continued
2013 Series C
In July 2013, $13,615,000 principal amount of 2013 Local Agency Revenue Bonds, Series C, was issued in accordance
with the indenture described above. The bonds are due in annual installments of $475,000 to $1,025,000 from
September 1, 2014 through September 1, 2033. Interest payments ranging from 2.00% to 5.25% are due from
September 1, 2013 through September 1, 2033. The bonds are subject to call and redemption prior to their stated
maturity commencing September 1, 2033 at specified redemption prices. At June 30, 2016, the Authority has a cash
reserve balance for debt service of $1,082,926, which is sufficient to cover the Bond Indenture Reserve Requirement of
$1,082,856.
Future debt requirements for the 2013 Series C Local Agency Revenue Bonds are as follows:
Year Ending
June 30
Principal
interest
Total
2017
$ 495,000
$ 579,194
$ 1,074,194
2018
505,000
565,431
1,070,431
2019
525,000
549,981
1,074,981
2020
540,000
532,994
1,072,994
2021
555,000
514,169
1,069,169
2022-2026
3,125,000
2,205,041
51330,041
2027-2031
3,985,000
1,311,844
5,296,844
2032-2034
2,925,000
235,594
3,160,594
Total
$ 12 65$ 000
$ 6 494.248
$ 19.149.248
55
City of Lake Elsinore, California
Notes to Financial Statements
Year Ended June 30, 2016
8) LONG-TERM LIABILITIES - Continued
12) Local Agency Revenue Bonds - Continued
2014 Series A
In January 2014, $7,505,000 principal amount of 2014 Local Agency Revenue Bonds, Series A, was issued in
accordance with the indenture described above. The bonds are due in annual installments of $10,000 to $705,000 from
September 1, 2016 through September 1, 2044. Interest payments ranging from 2.25% to 5.75% are due from
September 1, 2014 through September 1, 2044. The bonds are subject to call and redemption prior to their stated
maturity commencing September 1, 2023 at specified redemption prices. At June 30, 2016, the Authority has a cash
reserve balance for debt service of $705,056, which is sufficient to cover the Bond Indenture Reserve Requirement of
$705,011.
Future debt requirements for the 2014 Series A Local Agency Revenue Bonds are as follows:
Year Ending
June 30,
Principal
Interest
Total
2017
$ 10,000
$ 415,956
$ 425,956
2018
20,000
415,594
435,594
2019
30,000
414,856
444,856
-� 2020
40,000
413,669
453,669
2021
50,000
411,969
461,969
2022-2026
430,000
2,013,678
2,443,678
2027-2031
830,000
1,863,875
2,693,875
2032-2036
1.390,000
1,565,375
2,955,375
2037-2041
2,190,000
1,059,438
3,249,438
2042-2045
2.515,000
303,456
2.818,456
Total
17 505 000
S_8,877 866
1(,382 866
56
City of Lake Elsinore, California
Notes to Financial Statements
Year Ended June 30, 2016
8) LONG-TERM LIABILITIES - Continued
12) Local Agency Revenue Bonds - Continued
2014 Series B
In July 2014, $18,210,000 principal amount of 2014 Local Agency Revenue Bonds, Series B, was issued in accordance
with the indenture described above. The bonds are due in annual installments of $260,000 to $660,000 from September
1, 2015 through September 1, 2040. Interest payments ranging from 3.00% to 5.00% are due from March 1, 2015
through September 1, 2040. The bonds are subject to call and redemption prior to their stated maturity commencing
September 1, 2024 at specified redemption prices. At June 30, 2016, the Authority has a cash reserve balance for debt
service of $1,467,999, which is sufficient to cover the Bond Indenture Reserve Requirement of $1,467,905.
Future debt requirements for the 2014 Series B Local Agency Revenue Bonds are as follows:
Year finding
June 30,
Principal
Interest
Total
2017
$ 370,000
$ 798,238
$ 1,168,238
2018.
400,000
785,688
1.185,688
2019
435,000
771,075
1,206,075
2020
480,000
753,863
1,233,863
2021
530,000
733,662
1,263 662
2022-2026
3,360,000
3.225,028
6,585,028
2027-2031
4,475,000
2,438,934
6.913934
2032-2036
5,050,000
1,258,019
6,308,019
2037-2041
2,850,000
375.662
3,225,662
Total
17.950.E
22090 169
57
City of Lake Elsinore, California
Notes to Financial Statements
Year Ended June 30, 2016
8) LONG-TERM LIABILITIES -Continued
12) Local Agency Revenue Bonds - Continued
2015 Series
In February 2015, $108,845,000 principal amount of 2015 Series Local Agency Revenue Bonds, was issued in
accordance with the indenture described above. The bonds are due in annual installments of $655,000 to $8,405,000
from September 1, 2015 through September 1, 2040. Interest payments ranging fiom 2.0% to 5.0% are due from
September 1, 2015 through September 1, 2040. The bonds are subject to call and redemption prior to their stated
maturity commencing September 1, 2025 at specified redemption prices. At June 30, 2016, the Authority has a cash
reserve balance for debt service of $9,268,335, which is sufficient to cove the Bond Indenture Reserve Requirement of
$9,267,239.
Future debt requirements for the 2015 Series Local Agency Revenue Bonds are as follows:
Year Ending
June 30, Principal Interest Total
2017
$ 1,645,000
$ 5,149,100
$ 6,794,100
2018
1,825,000
5,103,175
6,928,175
2019
2,040,000
5,034,250
7,074,250
2020
2,250,000
4,948,450
7,198,450
2021
2,500,000
4,841,975
7341,975
2022-2026
16,7701000
21,992,025
38,762,025
2027-2031
25,085,000
16,887,625
41,972,625
2032-2036
36,710.000
9,337,525
46,047,525
3037-2041
18,360,000
1,623,375
19.983,375
Total
$ lOZ,IJ85 000
L 74,2LZ,5-00
$ 182.102500
58
City of Lake Elsinore, California
Notes to Financial Statements
Year Ended June 30, 2016
8) LONG-TERM LIABILITIES -Continued
12) Local Agency Revenue Bonds- Continued
2015 Series A
In February 2015, $3,200,000 principal amount of 2015 Local Agency Revenue Bonds, Series A, was issued in
accordance with the indenture described above. The bonds are due in annual installments of $30,000 to $235,000 from
September 1, 2016 through September 1, 2044. Interest payments ranging from 2.0% to 3.625% are due from
September 1, 2015 through September 1, 2044. The bonds are subject to call and redemption prior to their stated
maturity commencing September 1, 2023 at specified redemption prices. At June 30, 2016, the Authority has a cash
reserve balance for debt service of $230,163, which is sufficient to cover the Bond Indenture Reserve Requirement of
$230,148.
Future debt requirements for the 2015 Series A Local Agency Revenue Bonds are as follows:
Year Ending
June 30.
Principal
Interest
Total
2017
$ 30,000
$ 106,569
$ 136,569
2018
35,000
105,919
140,919
2019
40,000
105,169
145,169
2020
40,000
104,369
144,369
2021
45,000
103,519
148,519
2022-2026
300,000
498;506
798,506
2027-2031
430,000
444,566
874,566
2032-2036
595,000
359,822
954,822
2037-2041
825,000
234,266
1,059,266
2042-2045
860.000
64,706
924.706
Total
13,200 000
5 2.127.41 1
5 127411
59
City of Lake Elsinore, California
Notes to Financial Statements
Year Ended .Tune 30, 2016
8) LONG-TERM LIABILITIES - Continued
12) Local Agency Revenue Bonds - Continued
2015 Series B
In May 2015,. $7,590,000 principal amount of 2015 Local Agency Revenue Bonds, Series B, was issued in accordance
with the indenture described above. The bonds are due in annual installments of $1,270,000 to $1,810,000 from
September 1, 2016 through September 1, 2020. Interest payments ranging from 2.0% to 5.0% are due from March 1,
2016 through September 1, 2020. The bonds are not subject to call and redemption prior to their stated maturity. At
,lune 30, 2016, the Authority has a cash reserve balance for debt service of $285,112, which is sufficient to cover the
Bond Indenture Reserve Requirement of $285,075.
Future debt requirements for the 2015 Series B Local Agency Revenue Bonds are as follows:
Year Ending
June 30, principal Interest Total
2017
$ 1,270,000
$ 285,500
$ 1,555,500
2018
1,410,000
251,650
1,661,650
2019
1,500,000
200,500
1,700,500
2020
1,600,000
130,500
1,730,500
2021
1,810,000
45,250
1,855,250 "
Total
S- _ 7,590,000
S _ 913.400
8.503.400
60
City of Lake Elsinore, California
Notes to Financial Statements
Year Ended June 30, 2016
8) LONG-TERM LIABILITIES - Continued
B) Tax Allocation Revenue Bonds
2010 Series A
In February 2010, $15,435,000 principal amount of Tax Allocation Revenue Bonds, Series A, was issued in
accordance with the indenture described in Note 7A. The term bonds are due in annual installments of $305,000 to
$2,910,000 from September 1, 2010 through September 1, 2033; interest at 2.00% to 5.25%. The bonds are subject
to call and redemption prior to their stated maturity commencing September I, 2019, at specified redemption prices.
At June 30, 2016, the Authority has a cash reserve balance for debt service of $1,494,247, which is sufficient to
cover the Bond Indenture Reserve Requirement of $1,469,480.
Future debt requirements for the 2010 Series A Tax Allocation Revenue Bonds are as follows:
Year Ending
June 30,
Principal Interest
Total
2017
$ 345,000 $
641,806 $
986,806
2018
350,000
630,944
980,944
2019
365,000
618,869
983,869
2020
380,000
605,356
985,356
2021.,
395,000
590,331
985,331
2022-2026
2,225,000
2,676,153
4,901,153
2027-2031
2,830,000
2,034,638
4,864,638
2032-2034
6,280,000
431.025
6,711,02.5
Total
$ 13 170 000 $
8, _? $
21x329 122
61
City of Lake Elsinore, California
Notes to Financial Statements
Year Ended June 30, 2016
8) LONG-TERM LIABILITIES - Continued
B) Tax Allocation Revenue Bonds - Continued
2010 Series B
In May 2010, $10,855,000 principal amount of Tax Allocation Revenue Bonds, Series B, was issued in accordance
with the indenture described in Note 7A. The term bonds are due in annual installments of $515,000 to $895,000
from September 1, 2010 through September 1, 2025; interest at 2.00% to 4.75%. The bonds are subject to call and
redemption prior to their stated maturity commencing September 1, 2019, at specified redemption prices. At June
30, 2016, the Authority has a cash reserve balance for debt service of $939,598, which is sufficient to cover the
Bond Indenture Reserve Requirement of $939,538.
Future debt requirements for the 2010 Series B Tax Allocation Revenue Bonds are as follows:
Year Ending
June 30,
Principal
interest
Total
2017
$ 630,000
$ 299,950
$ 929,950
2018
645,000
280.019
925,019
2019
670,000
257,394
927,394
2020
690,000
231,450
921,450
2021
720,000
202,,1 �
922,350
2022-2026
4,105,000
490,350
4,595350
Total
S_ 7,460,Q0�
$ 1.761,$13$
_ 9.221.513
62
City of Lake Elsinore, California
Notes to Financial Statements
Year Ended June 30, 2016
8) LONG-TERM LIABILITIES -Continued
B) Tax Allocation Revenue Bonds - Continued
2010 Series C
In October 2010, $29,435,000 principal amount of Tax Allocation Revenue Bonds, Series C, was issued in
accordance with the indenture described in Note 7A. The tern bonds are due in annual installments of $650,000 to
$2,115,000 from September 1, 2011 through September 1, 2030; interest at 2.00% to 5.00%. The bonds are subject
to call and redemption on or after their stated maturity commencing September 1, 2020, at specified redemption
prices. At June 30, 2016, the Authority has a cash reserve balance for debt service of $2,221,538, which is not
sufficient to cover the Bond Indenture Reserve Requirement of $2,222,395.
Future debt requirements for the 2010 Series C Tax Allocation Revenue Bonds are as follows:
Year Ending
June 30,
Principal Interest
Total
2017
$ 1,240,000 $
965,995
$ 2,205,995
2018
1,270,000
931,445
2,201,445
2019
1,310,000
891,926
2,201,926
2020
1,350,000
848,676
2,198,676
2021
1,395,000
_ $00,611.
_ 2,195,611
2022-2026
7,825,000
3,104,009
10,929,009
2027-2031
9-685.000
1.189 834
10,874,834
Total
24 075 000 &===—==&L32
,4$
32 807 496
63
City of Lake Elsinore, California
Notes to Financial Statements
Year Ended June 30, 2016
8) LONG-TERM LIABILITIES- Continued
C) Revenue Refunding Bonds
2013 Series A
In September 2013, $14,460,000 principal amount of 2013 Revenue Refunding Bonds, Series A, was issued in
accordance with the indenture to provide funds to advance refund the 2000 Revenue Refunding Bonds, Series A.
The original purpose of the prior bonds was to finance the Authority's lease of certain City recreation facilities from
the City for lease back to the City. The term bonds are due in annual installments of $565,000 to $1,075,000 from
February 1, 2014 through February 1, 2032; interest rates varying from 3.00% to 5.00%. The bonds are subject to
call and redemption prior to their stated maturity commencing February 1, 2024, at specified redemption prices. At
June 30, 2016, the Authority has a cash reserve balance for debt service of $1,131,700, which is sufficient to cover
the Bond Indenture Reserve Requirement of $1,131,700.
Future debt requirements for the 2013 Series A Revenue Refunding Bonds are as follows:
Year Ending
June 30,
Principal
Interest
Total
2017
$ 600,000
$ 529,700
$ 1,129,700
2018
620,000
511,700
1,131,700
2019
635,000
493,100
1,128,100
2020
655,000
474,050
1,129,050
2021
675,000
454,400
1,129,400
2022-2026
3,800,000
1,844,012
5,644,012
2027-2031
4,690,000
955,988
5,645,988
2032
1.075,000
53,750
1.128,750
Total
�_ 12 750.000
S__ .. 5.316.700
18 066.700
64
City of Lake Elsinore, California
Notes to Financial Statements
Year Ended June 30, 2016
8) LONG-TERM LIABILITIES - Continued
D) Certificates of Participation
In October 2014, $7,965,000 principal amount of Certificates of Participation, Series 2014A, was issued for various
street improvement projects. The certificates are due in annual installments of $205,000 to $480,000 from June 1, 2015
through .lune 1, 2039. Interest payments ranging from 2.00% to 5.00% are due from June 1, 2015 through June 1,
2039. The certificates are subject to call and redemption prior to their stated maturity commencing June 1, 2032 at
specified redemption prices. The reserve requirement is covered by an insurance policy.
Future debt requirements for the Certificates of Participation, Series 2014A, are as follows:
Year Ending
June 30,
2017
2018
2019
2020
2021
2022-2026
2027-2031
2032-2036
2037-2039
Total
Revenues Pledged
Principal Interest Total
$ 215,000
220,000
235,000
240,000
250,000
1,335,000
1,580,000
1,975,000
1.380,000
$ 284,537
275,938
264,937
255,537
245,938
1,145,925
909,200
519,000
112,000
$ 4AUX12
$ 499,.537
495,938
499,937
495,537
495,938
2,480,925
2,489,200
2,494,000
1.492 000
x_._.11.443.014
The City has pledged a portion of future Measure A revenues to repay the Certificates of Participation 2014 Series
A. The City's certificates of participation is payable solely from the Measure A revenues. Total principal and
interest remaining on the certificates of participation is $11,443,012, payable through fiscal year 2039. For the
current year, principal and interest paid by Measure A revenues were $205,000 and $290,688, respectively.
E) Compensated Absences
Compensated absences are liquidated by the General Fund and are reported as a liability of the governmental activities.
65
City of Lake Elsinore, California
Notes to Financial Statements
Year Ended June 30, 2016
8) LONG-TERM LIABILITIES - Continued
E) Advance Refunding
Lake Elsinore Public Financing Authority 2011 Local Agency Revenue Bonds, Series A, and 2011 Tax Allocation
Revenue Bonds, Series A.
In August 2015, the Successor Agency to the Redevelopment Agency of the City of Lake Elsinore (Successor
Agency) issued $8,065,000 in Subordinated Tax Allocation Refunding Bonds, Series 2015, with interest rates of
2.00% to 5.00% to advance refund $4,800,000 of the Lake Elsinore Public Financing Authority 2011 Local Agency
Revenue Bonds, Series A, and $3,650,000 of the Lake Elsinore Public Financing Authority 2011 Tax Allocation
Revenue Bonds, Series A. The net proceeds, along with $982,387 of prior funds, of $8,905,829 (after payments for
reserves, underwriting fees and other issuance costs) were deposited in an irrevocable trust to provide funds for the
future debt service payment on the refunded bonds. As a result, the Lake Elsinore Public Financing Authority 2011
Local Agency Revenue Bonds, Series A, and 2011 Tax Allocation Revenue Bonds, Series A, are considered to be
defeased and the liabilities of these bonds have been removed from the long-term debt of the Authority.
The reacquisition price exceeded the net carrying amount of the old debts by $543,007 (includes $87,178 remaining
discount on the 2011A Tax Allocation Revenue bond). This amount is being amortized by the Successor Agency
over the remaining life of its refunding debt as a deferred amount on refunding. The advance refunded the Lake
Elsinore Public Financing Authority 2011 Local Agency Revenue Bonds, Series A, and 2011 Tax Allocation
Revenue Bonds, Series A, to reduce its total debt service payments over 23 years by $2,461,520 and to obtain an
economic gain (difference between the present values of the debt service payments or the old and nc-:w, debt) of
$1,911,831.
9) SPECIAL ASSESSMENT DISTRICT BONDS
The payment of these bonds is secured by valid assessment liens upon certain lands in each district and are not direct
liabilities of the City. Reserves have been established to meet delinquencies should they occur. Neither the faith and credit
nor the taxing power of the City of Lake Elsinore is pledged to the payment of the bonds. If delinquencies occur beyond the
amounts held in those reserves, the City has no duty to pay those delinquencies out of any other available funds. Therefore,
the outstanding balances of these bonds are not reflected in these financial statements. A summary of Special Assessment
Bonds outstanding, for which the City has no liability or commitment, or as follows;
Assessment District No. 93-1 Refunding Improvement
Bonds, 2012 Series B
Total Assessment District Bonds
66
Bonds
Outstanding at
Original Issue June 30, 2016
15,345,000 $ 14,100,000
$_...... ..... 14 1 00000
City of Lake Elsinore, California
Notes to Financial Statements
Year Ended June 30, 2016
10) COMMUNITY FACILITIES DISTRICT BONDS
These bonds are authorized pursuant to the Mello -Roos Community Facilities District Act of 1982 as amended, and are
payable from special taxes levied on property within the Community Facility Districts according to a methodology
approved by the voters within the District and by the City Council of the City of Lake Elsinore. Neither the faith and credit
nor taxing power of the City of Lake Elsinore is pledged to the payment of the bonds. Reserves have been established from
the bond proceeds to meet delinquencies should they occur. If delinquencies occur beyond the amounts held in those
reserves, the City has no duty to pay the delinquency out of any available funds of the City. Therefore, the outstanding
balances of these bonds are not reflected in these financial statements. A summary of Mello -Roos Bonds outstanding are as
follows:
Community Facilities District 90-2 Tuscany Hills
Public Improvements (2002 Series)
Community Facilities District 90-2 Tuscany Hills
Public Improvement (2007A Series )
Community Facilities District 2005-5 Wasson Canyon (2012A Series)
Community Facilities District 2006-1 Summerly
Improvement Area A (2013 Series)
Community Facilities District 2003-2 Canyon Hills
Improvement Area C (2013 Series)
Community Facilities District 88-3 West Lake Elsinore (2013B Series)
Community Facilities District 98-1 Summerhill Public
I—.rprovenents (2013C Series)
Community Facilities District 2003-2 Canyon Hills
Improvement Area D (2014A Series)
Community Facilities District 2003-2 IA -A Canyon Hills (2014 Series)
Community Facilities District 2003 -21A -C Canyon Hills (2014 Series)
Community Facilities District 95-1 Lake Elsinore City Center
Public Improvements (2015 Series)
Community Facilities District 2003-2 Improvement Area B
Canyon Hills (2015 Series)
Community Facilities District 2004-3-1 Improvement Area 1
Rosetta Canyon (2015 Series)
Community Facilities District 2004-3-1 Improvement Area 2
Rosetta Canyon (2015 Series)
Community Facilities District 2005-1 Serenity (2015 Series)
Community Facilities District 2005-2 Improvement Area A
Alberhill Ranch (2015 Series)
Community Facilities District 2005-6 City Center Townhomes
(2015 Series)
Community Facilities District 2006-2 Viscaya (2015 Series)
Community Facilities District 2006-1 Improvement Area B
Summerly (2015 Series)
Community Facilities District 88-3 West Lake Elsinore (2015 Series)
Community Facilities District 2006-1 Improvement Area CC (2016A Series)
Total Community Facilities District Bonds
67
Original Issue
14,470,000
7,340,000
3,450,000
3,620,000
5,345,000
4,215,000
11615,000 ,„.
7,505,000
10,895,000
7,315,000
1,030,000
25,795,000
21,005,000
23,115,000
8,165,000
21,095,000
2,815,000
5,825,000
3,200,000
Bonds
Outstanding at
June 30, 2016
$ 1,035,000
7,340,000
3,280,000
3,605,000
5,340,000
2,825,000
12,655,000
7,505.000
10,650,000
7,300,000
1,025,000
2.5,500,000
20,635,000
22,820,000
7,960,000
20,750,000
2,765,000
5,730,000
3,200,000
7,590,000 7,590,000
3,000,000 3,000,000
$ 182,510,000
City of Lake Elsinore, California
Notes to Financial Statements
Year Ended .lune 30, 2016
11) MORTGAGE REVENUE BONDS
The City and Agency have entered into a bond and loan program to assist low and moderate income homebuyers of
multi -family residential developments within the City limits. Although the City has arranged the financing program,
these debts are not payable from any revenues or assets of the City. Neither the faith and credit nor the taxing power of
the City, or any political subdivision of the City, is pledged to repay the indebtedness. Accordingly, since these debts do
not constitute an obligation of the City, they are not reflected in the accompanying financial statements. They are as
follows:
Bonds
Outstanding at
Original Issue June 30, 2016
Lakeside Village Project - Due January 1, 2031 $__...,. 5,000.000 $__. - _3,544 229
12) INTER -FUND RECEIVABLES, PAYABLES AND TRANSFERS
During the course of normal operations, the City entered into numerous transactions between funds, including expenditures
and transfers of resources to provide services, construct assets, and service debt. The accompanying governmental fund
financial statements generally reflect such transactions as operating transfers. Nonrecurring or nonroutine permanent
transfers of equity are reported as residual equity transfers. Inter -fund transactions and inter -fund payables/receivables at
year-end are not eliminated in the governmental fund financial statements.
Due To/From
Due to and from other funds are as follows:
Receivable Fund
General Fund
Other Governmental Funds
Other Governmental Funds
Payable Fund Amount
Other Governmental Funds
General Fund
Other Governmental Funds
Total
The outstanding balances above between funds are to provide cash flows for expenditures.
Transfers In/Out
The compositions of the City's interhntd transfer balances are as follows:
Transfers In Transfers Out
General Fund
Recreation Authority Debt Service Fund
Capital Improvement Plan Capital Project Fund
Capital Improvement Plan Capital Project Fund
Other Governmental Funds
Other Governmental Funds
Internal Service Funds
Internal Service Funds
Other Governmental Funds
General Fund
Assessment Districts Capital Project Fund
Other Governmental Funds
General Fund
Other Governmental Funds
General Fund
Other Governmental Funds
68
Total
32,987
69,573
�. 194.063
Amount
$ 3,096,593
1,127,100
6,994,131
6,10T460
33,745
783,530
1,000,000
648,703
L____._t 9 791.262
City of Lake Elsinore, California
Notes to Financial Statements
Year Ended June 30, 2016
12) INTER -FUND RECEIVABLES, PAYABLES AND TRANSFERS - Continued
The transfers between the General Fund, Internal Service Funds and the Other Governmental Funds were made to provide
cash flows for expenditures. The transfers between the Recreation Authority Debt Service Fund and the General Fund were
made to provide lease payments on long-term debt. The transfers between Other Governmental Funds, Capital
Improvement Plan Capital Project Fund and the Assessment Districts Capital Project Fund were made for capital related
projects.
13) FUND BALANCE AND NET POSITION
The fund balances reported on the fund statements consist of the following categories:
Nonspendable Fund Balance - Includes amounts that cannot be spent because they are either not in spendable form, or,
for legal or contractual reasons, must be kept intact.
Restricted Fund Balance - Constraints placed on the use of these resources are either externally imposed by creditors
(such as through debt covenants), grantors, contributors or other governments; or are imposed by law (through
constitutional provisions or enabling legislation).
Conunifted Fund Balance - Amounts that can only be used for specific purposes because of a formal action (ordinance)
by the government's highest level of decision-making authority. The City Council is the highest level of decision-
making authority for the 0-p-4hat can, by' -adoption of an ordinance prior to the end of the fiscal year, commit fund ---
balance. Once adopted, the limitation imposed by the ordinance remains in place until a similar action is taken to
remove or revise the limitation.
Assigned Fund Balance - Amounts that are constrained by the City's intent to be used for specific purposes, but that do
not meet the criteria to be classified as restricted or committed. Intent can be stipulated by the governing body, another
body, or by an official to whom the authority has been given. The City Council assigns fund balance, however, unlike
commitments, assignments generally only exist temporarily. In other words, an additional action does not normally have
to be taken for the removal of an assignment.
Unassigned Fund Balance - These are either residual positive net resources of the General Fund in excess of what can
properly be classified in one of the other categories, or negative balances in all other funds.
When au expenditure is incurred for proposes for which both restricted and unrestricted fund balances are available, the
City's policy is to apply restricted fund balance first. When an expenditure is incurred for purposes for which committed,
assigned or unassigned fund balances are available, the City's policy is to apply committed fund balance fust, then assigned
fund balance, and finally unassigned fund balance.
69
City of Lake Elsinore, California
Notes to Financial Statements
Year Ended June 30, 2016
13) FUND BALANCE AND NET POSITION - Continued
The details of the fund balances as of June 30, 2016 are presented below:
70
Low and Moderate
Public Financing
Recreation
Income Housing
Authority
Authority
General
Special Revenue
Debt Service
Debt Service
Fund
Fund
Fund
Fund
Fund Balances
Nonspendable:
Prepaid Items
$ 29,015
$
$ 18,787
$ 85,387
Notes Receivable
1,000,000
Hndowment Principal
Restricted fm•:
Debt Service
237,030,643
1,726,806
Low & Moderate Income Housing
42,297,549
Transportation & Public Works
Development
Lighting & Landscape Maintenance
Public Facilities & Improvements
Other Purposes
Assigned:
Construction
Scholarships
Unassigned
11.365.894
Total Fund Balance
$__ 12.394.909
$ 42,297.549
i_232.049.430
$ 1.812 193
Assessment
Capital
Districts
Improvement Plan
Other
'Total
Capital Project
Capital Project
Govemmental
Governmental
Fund
Fund
Funds
Funds
Fund Valances
Nonspendable:
Prepaid Items
$
$
$
$ 133,189
Notes Receivable
1,000,000
Endowment Principal
20,003
20,003
Restricted for:
Debt Service
238,757,449
Low & Moderate Income Housing
2,744,329
45,041,878
Transportation & Public Works
9,583,627
9,583,627
Development
1,042,880
1,042,880
Lighting & Landscape Maintenance
460.817
460,817
Public Facilities & Improvements
972,803
7,974,657
8,947,460
Other Purposes
26,010
26,010
Assigned:
Construction
882,108
655,312
1,537,420
Scholarships
11344
11,344
Unassigned
11,365,003
__(891)
Total Fund Balance
972103
R 882.19.$
$ 22.5 1 S 088
_111.9,27-M
70
City of Lake Elsinore, California
Notes to Financial Statements
Year Ended June 30, 2016
13) FUND BALANCE AND NET POSITION - Continued
The details of other restricted purposes in the Statement of Net Position as of June 30, 2016 are presented below:
Development
Lighting and Landscape Maintenance
Community Development
Nonexpendable
Expendable
Law Enforcement
Geothermal
Education
Total Net Position - Other
Restricted Purposes
14) OTHER REQUIRED INDIVIDUAL FUND DISCLOSURES
$ 1,042,880
527,548
20,003
8,155
29,324
20,312
5.698
$ 1.653 97Q
It is the City's intention to seek authority from the City Council to realign the current year's budget to reflect priority
changes in the goals and objectives of the City. This realignment did not take place in the current year budget; therefore,
expenditures exceeded appropriations in the following funds:
Low and Moderate InCoil7e Housing - Special Revenue Fund
Assessment District - Capital Project Fund
Other Governmental Funds:
Geothermal - Special Revenue Fund
AB2766 Air Pollution - Special Revenue Fund
CDBG - Special Revenue Fund
Lake Side Facilities - Special Revenue Fund
Camino Del Norte - Special Revenue Fund
Miscellaneous General Projects - Capital Project Fund
Storm Drains - Capital Project Fund
Expenditures_ r Appropriations Difference
$ 314,712 $
4,002
$ (310,710)
(6,830,508)
0
(6,830,508)
17
0
(17)
6,000
0
(6,000)
10,000
0
(10,000)
9,106
0
(9,106)
770
0
(110)
13,765
0
(13,765)
153
0
(153)
The following funds had a deficit fund balance at June 30, 2016. These deficits are expected to be eliminated through future
revenues and transfers.
Other Governmental Funds:
Animal Shelter - Special Revenue Fund
71
Amount
$ (891)
City of Lake Elsinore, California
Notes to Financial Statements
Year Ended June 30, 2016
15) PENSION PLAN
A) General Information about the Pension Plans
Plena Description - All qualified permanent and probationary employees are eligible to participate in the Public
Agency Cost -Sharing Multiple -Employer Defined Benefit Pension Plan (Plan) administered by the California Public
Employees' Retirement System (CaIPERS). The Plan consists of individual rate plans (benefit tiers) within a safety
risk pool (police and fire) and a miscellaneous risk pool (all other). Plan assets may be used to pay benefits for any
employer rate plan of the safety and miscellaneous pools. Accordingly, rate plans within the safety or miscellaneous
pools are not separate plans under GASB Statement No. 68. Individual employers may sponsor more than one rate
plan in the miscellaneous or safety risk pools. The City sponsors four rate plans (three miscellaneous and one
safety). Benefit provisions under the Plan are established by State statute and City resolution. CalPERS issues
publicly available reports that include a full description of the pension plans regarding provisions, assumptions and
membership information that can be found on the CalPERS website.
Benefits Provider! - CalPERS provides service retirement and disability benefits, annual cost of living adjustments
and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years
of credited service, equal to one year of fulltime employment. Members with five years of total service are eligible
to retire at age 50 with statutorily reduced benefits. All members are eligible for non -duty disability benefits after
10 years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit,
or the Optional Settlement 2W Death Benefit. The cost of living adjustments for each plan are applied as specified
by the Public Employees' Retirement Law.
The rate plan provisions and benefits in effect at Jw c 30; 2016, are summarized as follows:
Hire Date
Benefit Formulas
Benefit Vesting Schedule
Benefit Payments
Retirement Age
Monthly Benefits, as a % of Eligible Compensation
Required Employee Contribution Rates
Required Employer Contribution Rates
I -lire Date
Benefit Formulas
Benefit Vesting Schedule
Benefit Payments
Retirement Age
Monthly Benefits, as a % of Eligible Compensation
Required Employee Contribution Rates
Required Employer Contribution Rates
72
Miscellaneous
Prior to On or After
January 1, 2013 January 1, 2013(')
2.0% at 55 2.0% at 62
5 Years Service
5 Years Service
Monthly for Life
Monthly for Life
50-55+
52-67+
1.46% to 2.418%
1.0% to 2.5%
8%
6.25%
1.0.612%
6.237%
Miscellaneous 2" a Tier
Prior to
On or After
January 1, 2013
January 1,2013t"
2.0% at 60
2% at 62
5 Years Service
5 Years Service
Monthly for Life
Monthly for Life
55 - 60+
52-67+
1.092%-2.418%
1.0%-2.5%
1.5%
6.25%
6.709%
6.237%
City of Lake Elsinore, California
Notes to Financial Statements
Year Ended June 30, 2016
15) PENSION PLAN -Continued
A. General Information about the Pension Plans -Continued
Hire Date
Benefit Formulas
Benefit Vesting Schedule
Benefit Payments
Retirement Age
Monthly Benefits, as a % of Eligible Compensation
Required Employee Contribution Rates
Required Employer Contribution Rates
Safety(,)
Prior to
On or After
January 1, 2013
January 1, 2013('1
0.5% at 55
N/A
5 Years Service
N/A
Monthly for Life
N/A
50+
N/A
0.5%
N/A
N/A
N/A
N/A
N/A
(n For employees hired on or after January 1, 2013, they are included in their respective PEPRA (California Public
Employees' Pension Reform Act) rate plan with the above provisions and benefits,
(')Note, the City currently does not have any safety employees. The safety rate plan represents former safety
employees.
Contributions - Section 20814(c) of the California Public Employees' Retirement Law requires that the employer
contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on
the July I following notice of a change in th. rate. Fording contributions for both Plans are determined annually on
an actuarial basis as of June 30 by CalPERS. The actuarially determined rate is the estimated amount necessary to
finance the costs of benefits earned by employees during the year, with an additional amount to finance any
unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate
and the contribution rate of employees.
The contributions to the Plan for the year ended June 30, 2016 were $1,129,573.
As of lime 30, 2016, the City reported a net pension liability for its proportionate share of the net pension liability of
the Plan of $8,943,640.
B. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions
The City net pension liability for the Plan is measured as the proportionate share of the net pension liability. The net
pension liability of each of the Plan is measured as of June 30, 2015, and the total pension liability for the Plan used
to calculate the net pension liability was determined by an actuarial valuation as of Jute 30, 2014 rolled forward to
June 30, 2015 using standard update procedures. The City's proportion of the net pension liability was based on a
projection of the City's long-term share of contributions to the pension plans relative to the projected contributions
of all participating employers, actuarially determined.
73
City of Lake Elsinore, California
Notes to Financial Statements
Year Ended .lune 30, 2016
15) PENSION PLAN -Continued
B. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions -
Continued
The City's proportionate share of the net pension liability for the Plan measured as of June 30, 2014 and 2015 was
as follows:
June 30, 2015
n Change
June 30, 2014 Increase (Decrease)
0.32568% 0.29477% 0.03091%
For the year ended June 30, 2016, the City recognized pension expense (credit) of $392,040. At June 30, 2016, City
reported deferred outflows of resources and deferred inflows of resources related to pensions from the following
sources:
Pension contributions subsequent to measurement date
Differences between actual and expected experience
Changesin assum;-«ions
Change in employer's proportion and differences between
the employer's contributions and the employer's
Proportionate share of contributions
Net differences between projected and actual earnings on
plan investments
Total
Deferred Outflows Deferred Inflows
of Resources of Resources
$ 1,129,573 $
54,903 (219)
.. (.5,20,438).,..,,._
1,044,433 (22,581)
(260,908)
$ 2,228,909 $ (804,146)
The $1,129,573 reported as deferred outflows of resources related to contributions subsequent to the measurement
date will be recognized as a reduction of the net pension liability in the year ended June 30, 2017. Other amounts
reported as deferred outflows of resources and deferred inflow of resources related to pensions will be recognized as
pension expense as follows:
Year Ended
.time 30
2017
$ 20,403
2018
9,245
2019
(67,935)
2020
333,477
74
City of Lake Elsinore, California
Notes to Financial Statements
Year Ended June 30, 2016
15) PENSION PLAN -Continued
B. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions -
Continued
Actuarial Assumptions - The total pension liabilities in the June 30, 2014 actuarial valuations were determined
using the following actuarial assumptions:
Valuation Date
Measurement Date
Actuarial Cost Method
Actuarial Assumptions:
Discount Rate
Inflation
Payroll Growth
Projected Salary Increase
Investment Rate of Return
Mortality
Miscellaneous
June 30, 2014
June 30, 2015
Entry Age Normal
7.65%
2.75%
3.0%
3.3%- 14.2%
7.65% (21
CAPERS Membership Data (3)
o� Depending on age, service and type of employment
t�1 Net of pension plan investment expenses, including inflation
(')The Mortality Rate Table was derived using CaIPERs' membership data for all funds. The table ino)ndes 20
years of mortality improvements using Society of Actuaries Scale BB. For more details on this table, please
refer to the 2014 experience study report from the CaIPERS website.
The underlying mortality assumptions and all other actuarial assumptions used in the June 30, 2014 valuation were
based on the results of an actuarial experience study for the period 1997 to 2011 including updates to salary
increase, mortality and retirement rates. Further details of the Experience Study can be found on the CaIPERS
website.
Discount Rate - The discount rate used to measure the total pension liability was 7.65%. To determine whether the
municipal bond rate should be used in the calculation of a discount rate for the Plan, CaIPERS stress tested plans
that would most likely result in a discount rate that would be different firm the actuarially assumed discount rate.
Based on the testing, none of the tested plans run out of assets. Therefore, the current 7.65 percent discount rate is
adequate and the use of the municipal bond rate calculation is not necessary. The long term expected discount rate
of 7.65 percent will be applied to all plans in the Public Employees Retirement Fund (PERF). The stress test results
are presented in a detailed report that can be obtained from the CaIPERS website.
The long-term expected rate of return on pension plan investments was determined using a building-block method in
which best -estimate ranges of expected future real rates of return (expected returns, net of pension plan investment
expense and inflation) are developed for each major asset class.
75
City of Lake Elsinore, California
Notes to Financial Statements
Year Ended June 30, 2016
15) PENSION PLAN - Continued
B. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions -
Continued
In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term
market return expectations as well as the expected pension fund cash flows. Using historical returns of all the funds'
asset classes, expected compound returns were calculated over the short-term (first 10 years) and the long-term (11-
60 years) using a building-block approach. Using the expected nominal returns for both short-term and long-term,
the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the
single equivalent expected return that arrived at the same present value of benefits for cash flows as the one
calculated using both short-term and long-term returns. The expected rate of return was then set equivalent to the
single equivalent rate calculated above the rounded down to the nearest one quarter of one percent.
The table below reflects the long-term expected real rate of return by asset class. The rate of return was calculated
using the capital market assumptions applied to determine the discount rate and asset allocation. The target
allocation shown was adopted by the CalPERS Board effective on July 1, 2014.
An expected inflation of 2.5% used for this period.
Nl An expected inflation of 3.0% used for this period.
Real Return
Years 11+tb)
5.71%
2.43%
3.36%
6.95%
5.1.1%
5.09%
-I.OS%
Smsitirity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate - The
following presents the City's proportionate share of the net pension liability for the Plan, calculated using the
discount rate for the Plan, as well as what the City's proportionate share of the net pension liability would be if it
were calculated using a discount rate that is 1 -percentage point lower or 1 -percentage point higher than the current
rate:
1 % Decrease 6.65%
Net Pension Liability $ 13,832,688
Current Discount Rate 7.65%
Net Pension Liability $ 8,943,640
I% Increase 8.65%
Net Pension Liability $ 4,907,196
76
New Strategic
Real Return
Asset Class
Allocation
Years 1 - 10(')
Global Equity
51.0%
5.25%
Global Fixed Income
19.0%
0.99%
'- Inflation Sensitive
6.t1,44:
0.45%
Private Equity
10.0%
6.83%
Real Estate
10.0%
4.50%
Infrastructure and Forestland
2.0%
4.50%
Liquidity
2.0%
-0.55%
Total
100%
An expected inflation of 2.5% used for this period.
Nl An expected inflation of 3.0% used for this period.
Real Return
Years 11+tb)
5.71%
2.43%
3.36%
6.95%
5.1.1%
5.09%
-I.OS%
Smsitirity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate - The
following presents the City's proportionate share of the net pension liability for the Plan, calculated using the
discount rate for the Plan, as well as what the City's proportionate share of the net pension liability would be if it
were calculated using a discount rate that is 1 -percentage point lower or 1 -percentage point higher than the current
rate:
1 % Decrease 6.65%
Net Pension Liability $ 13,832,688
Current Discount Rate 7.65%
Net Pension Liability $ 8,943,640
I% Increase 8.65%
Net Pension Liability $ 4,907,196
76
City of Lake Elsinore, California
Notes to Financial Statements
Year Ended June 30, 2016
15) PENSION PLAN -Continued
B. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions -
Continued
Pension Plan Fiduciary Net Position - Detailed information about each pension plan's fiduciary net position is
available in the separately issued CalPERS financial reports.
C. Payable to the Pension Plan
At June 30, 2016, the City reported a payable of $13,896, which is included in accounts payable and accrued
liabilities, for the outstanding amount of contributions to the pension plan required for the year ended June 30, 2016.
16) OTHER POST -EMPLOYMENT BENEFITS
Plan Description
In addition to providing pension benefits, the City provides post -employment benefits for retired employees. In accordance
with City Resolution 89-42 dated September 1989, the City provides health insurance premiums costs to qualifying
employees. Employees who began employment with the City prior to January 1, 2013 and who retire from the City on or
after attaining age 55, with at least 5 years of service with the City, qualify to receive the post -employment benefit. The
City pays 100% of the retirees' and authorized dependents monthly medical premiums.
Funding Policy
The contribution requirements of the plan members and the City are established and may be amended by the City, the City's
City Council, and/or the employee associations. Currently, contributions are not required from plan members.
Contributions are funded on a pay-as-you-go basis. During the fiscal year ended June 30, 2016, the City elected to fund
$569,899 towards the unfunded accrued liability related to this benefit.
The City's annual OPEB cost (expense) is calculated based on the annual required contribution of the employer (ARC), an
amount actuarially determined in accordance with parameters of GASB Statement 45. The ARC represents a level of
funding that, if paid on an ongoing basis, is projected to cover normal cost each year and to amortize any unfunded
liabilities of the plan over a period not to exceed thirty years. The ARC for fiscal year 2015-16 was $1,502,498.
The following table shows the components of the City's annual OPEB cost for the year, the amount actually contributed to
the plan, and changes in tine City's net OPEB obligation.
Annual Required Contribution (ARC) $ 1,502,498
Interest on Net OPEB Obligation 370,060
Annual OPEB Cost 1,872,558
Contributions Made (569,899)
Increase (Decrease) in Net OPEB Obligation 1,302,659
Net OPEB Obligation - Beginning of Year 8,707,294
Net OPEB Obligation - End of Year S] 0.009.953
77
City of Lake Elsinore, California
Notes to Financial Statements
Year Ended June 30, 2016
16) OTHER POST -EMPLOYMENT' BENEFITS - Cmttinued
Three -Year Trend Information
For fiscal year 2016, the City's annual OPEB cost (expense) of $1,872,558 was equal to the ARC and interest on Not OPEB
Obligation. Information on the annual OPEB cost, percentage of Annual OPEB cost contributed, and Net OPEB Obligation
is presented below:
Annual OPEB Cost and Net OPEB Obligation
Funded Status and Funding Progress
As of July 1, 2014, the second actuarial valuation date, the plan was zero percent funded. The actuarial accrued liability
for benefits was $12,711.047and the actuarial value of assets was zero, resulting in an unfunded actuarial accrued
liability (UAAL) of $12,'/ii,047. The covered payroll (annual payroll of active employees covered by the plan) was
$4,597,240 and the ratio of the UAAL, to the covered payroll was 276.49%.
Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the
probability of occurrence of events far into the future. Examples include assumptions about future employment,
mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual
required contributions of the employer are subject to continual revision as actual results are compared with past
expectations and new estimates are made about the future. 'Phe schedule of funding progress, presented as required
supplementary information following the notes to the basic financial statements, presents multi-year trend information
about whether the actuarial value of the plan assets is increasing or decreasing over time relative to the actuarial accrued
liabilities for benefits.
Actuarial Methods and Assumptions
Projections of benefits for financial reporting proposes are based on the substantive plan (the plan as understood by the
employer and plan members) and include the types of benefits provided at the time of each valuation and the historical
pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and
assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued
liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations.
In the July I, 2014 actuarial valuation, the frozen entry age method (closed period) was used. The actuarial assumptions
includes an inflation rate of 4.25% per annum and medical cost trend rates ranging from 4.7% to 9.0% for the first four
years and an ultimate rate of 5.0% after four years, dental cost trend is 4% per year. The City's unfunded actuarial
accrued liability is being amortized by level dollar contributions over twenty year's as a level dollar amount.
78
Actual
Percentage of
Fiscal
Annual
Contributions (Net
Annual OPER
Net OPEB
Year
OPEB Cost
of Adjustments)
Cost Contributed
Obligation
6/30/14
$
1,802,032
$ 494,945
27.47%
$ 7,444,027
6/30/15
$
1,818,869
$ 555,602
30.55%
$ 8,707,294
6/30/16
$
1,872,558
$ 569,899
30.43%
$ 10,009,953
Annual OPEB Cost and Net OPEB Obligation
Funded Status and Funding Progress
As of July 1, 2014, the second actuarial valuation date, the plan was zero percent funded. The actuarial accrued liability
for benefits was $12,711.047and the actuarial value of assets was zero, resulting in an unfunded actuarial accrued
liability (UAAL) of $12,'/ii,047. The covered payroll (annual payroll of active employees covered by the plan) was
$4,597,240 and the ratio of the UAAL, to the covered payroll was 276.49%.
Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the
probability of occurrence of events far into the future. Examples include assumptions about future employment,
mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual
required contributions of the employer are subject to continual revision as actual results are compared with past
expectations and new estimates are made about the future. 'Phe schedule of funding progress, presented as required
supplementary information following the notes to the basic financial statements, presents multi-year trend information
about whether the actuarial value of the plan assets is increasing or decreasing over time relative to the actuarial accrued
liabilities for benefits.
Actuarial Methods and Assumptions
Projections of benefits for financial reporting proposes are based on the substantive plan (the plan as understood by the
employer and plan members) and include the types of benefits provided at the time of each valuation and the historical
pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and
assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued
liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations.
In the July I, 2014 actuarial valuation, the frozen entry age method (closed period) was used. The actuarial assumptions
includes an inflation rate of 4.25% per annum and medical cost trend rates ranging from 4.7% to 9.0% for the first four
years and an ultimate rate of 5.0% after four years, dental cost trend is 4% per year. The City's unfunded actuarial
accrued liability is being amortized by level dollar contributions over twenty year's as a level dollar amount.
78
City of Lake Elsinore, California
Notes to Financial Statements
Year Ended June 30, 2016
17) DEFERRED COMPENSATION
The City offers its employees a deferred compensation plan created in accordance with Internal Revenue Code 457. On
August 20, 1996 the provisions of Internal Revenue Code (IRC) Section 457 were amended to require new plans to place all
assets and income of the plans in trust for the exclusive benefit of participants and their beneficiaries. Plans in existence as
of the date of this change must place the Plan assets and income in trust by January 1, 1999. Once the assets and income are
placed in trust the City no longer owns the amounts deferred by employees and related income. Prior to this IRC Section
457 Amendment, the deferred amounts and related income remained as property of the City until withdrawn by the
employee.
During the 1997-98 fiscal year, the City placed its Deferred Compensation Plan assets and related income in trust as
allowed by IRC Section 457 and as a result the asset and corresponding liability are no longer presented in these financial
statements. This change had no impact on the City's fund equity.
18) LIABILITY, PROPERTY AND PROTECTION
The City is a member of the California Joint Powers Insurance Authority (Insurance Authority). The Insurance Authority is
composed of 116 California public entities and is organized under a joint powers agreement pursuant to California
Government Code §6500 et seq. The purpose of the Insurance Authority is to arrange and administer programs for the
pooling of self-insured losses, to purchase excess insurance or reinsurance, and to arrange for group -purchased insurance for
the property and other lines of coverage. The Insurance Authority's pool began covering claims of its members in 1978.
Each member government has an elected official as its representative on the Board of Directors. The Board operates
through a nine -member Executive Committee.
Self-insurance Programs of the Insurance Authority
Each member pays an annual contribution at the beginning of the coverage period. A retrospective adjustment is then
conducted annually thereafter, for coverage years 2012-13 and prior. Retrospective adjustments are scheduled to continue
indefinitely on coverage years 2012-13 and prior, until all claims incurred during those coverage years are closed, on a pool -
wide basis. This subsequent cost reallocation among members based on actual claim development can result in adjustments
of either refunds or additional deposits required. Coverage years 2013-14 and forward are not subject to routine annual
retrospective adjustment.
The total refunding requirement for self-insurance program is estimated using actuarial models and prefunded through the
annual contribution. Costs are allocated to individual agencies based on exposure (payroll) and experience (claims) relative
to other members of the risk -sharing pool. Additional information regarding the cost allocation methodology is provided
below.
General Liability Insurance
In the liability program claims are pooled separately between police and non -police exposures. (1) The payroll of each
member is evaluated relative to the payroll of other members. A variable credibility factor is determined for each member,
which establishes the weight applied to payroll and the weight applied to losses with the formula. (2) The first layer of
losses includes incurred costs up to $30,000 for each occurrence and is evaluated as a percentage of the pool's total incurred
costs within the first layer. (3) The second layer of losses includes incurred costs from $30,000 to $750,000 for each
occurrence and is evaluated as a percentage of the pool's total ittcurred costs within the second layer. (4) Incurred costs in
excess of $750,000 to $50 million are distributed based on the outcome of cost allocation within the first and second loss
layer.
79
City of Lake Elsinore, California
Notes to Financial Statements
Year Ended June 30, 2016
18) LIABILITY, PROPERTY AND PROTECTION - Continued
Self-insurance Programs of the Insurance Authority
General Liability Insurance - Continued
For 2015-16 the Insurance Authority's pooled retention is $2 million per occurrence, with reinsurance to $20 million, and
excess insurance to $50 million. The Authority's reinsurance contracts are subject to the following additional pooled
retentions: (a) 2.5 million annual aggregate deductible in the $3 million x/s $2 million layer, (b) $3 million annual
aggregate deductible in the $5 million x/s $10 million layer. There is a third annual aggregate deductible in the amount of
$2.5 million in the $5 million x/s $5 million layer, however, it is fully covered under a separate policy and therefore not
retained by the Insurance Authority,
The overall coverage limit for each member, including all layers of cove -age is $50 million per occurrence. Costs of
covered claims for subsidence losses have a sub -limit of $30 million per occurrence.
Workers' Compensation
In the workers' compensation program claims are pooled separately between public safety (police and fire) and non-public
safety exposures. (1) The payroll of each member is evaluated relative to the payroll of other members. A variable
credibility factor is determined for each member, which establishes the weight applied to payroll and the weight applied to
losses with the fommla. (2) The first layer of losses includes incurred costs up to $50,000 for each occurrence and is
evaluated as a percentage of the pool's total incurred costs within the first layer. (3) The second layer of losses includes
incurred costs from $50,000 to $100,000 for each occurrence and is evaluated as a percentage of the pool's total incurred
costs within the second layer. (4) Incurred costs fi-om $100,000 to statutory limits are distributed based on the outcome of
cost allocation within the first and second loss layer.
For 2015-16 the Insurance Authority's pooled retention is $2 million per occurrence, with reinsurance to statutory limits
under California Worker' Compensation Law.
Employer's liability losses are pooled among members to $2 million. Coverage from $2 million to $5 million is purchased
as part of a reinsurance policy, and Employer's liability losses from $5 million to $10 million are pooled among members.
Purchased Insurance
Property Insurance
The City participates in the all-risk property protection program of the Insurance Authority. This insurance protection is
underwritten by several insurance companies. The City's property is currently insured according to a schedule of covered
property submitted by the City to the Insurance Authority. The City's property currently has all-risk property protection in
the amount of $41,623,755. Thee is a $5,000 deductible per occurrence except for non -emergency vehicle insurance which
has a $1,000 deductible. Premiums for the coverage are paid annually and are not subject to retroactive adjustments.
Crime Insurance
The City purchases crime insurance covet -age in the amount of $1,000,000 with a $2,500 deductible. The fidelity coverage
is provided through the Insurance Authority. Premiums are paid annually and are not subject to retroactive adjustments.
90
City of Lake Elsinore, California
Notes to Financial Statements
Year Ended June 30, 2016
18) LIABILITY, PROPERTY AND PROTECTION - Continued
Adequacy of Protection
During the past three fiscal years none of the above programs of protection experienced settlements or judgments that
exceeded pooled or insured coverage. There were also no significant reductions in pooled or insured liability coverage in
2015-I6.
19) LITIGATION
The City is defendant in several other pending lawsuits of a nature common to many similar jurisdictions. City
management estimates that the potential claims against the City not covered by insurance resulting from such litigation
would not materially affect the basic financial statements of the City.
20) SUCCESSOR AGENCY TRUST DISCLOSURES
On December 29, 2011, the California Supreme Court upheld Assembly Bill 1X 26 ("the Bill") that provides for the
dissolution of all redevelopment agencies in the State of California. This action impacted the reporting entity of the City of
Lake Elsinore (City) that previously had reported a redevelopment agency within the reporting entity as a blended
component unit. The Bill provides that upon dissolution of a redevelopment agency, either the City or another unit of local
government will agree to serve as the "successor agency" to hold the assets until they are distributed to other units of state
and local government. On January 24, 2012, the City Council elected to become the Successor Agency for the former
redevelopment agency in accordance with the Bill. In accordance with the timeline set forth in the Bill (as modified by the
California Supreme Court on December 29, 2011) all redevelopment agencies in the State of California were dissolved and
ceased to operate as a legal entity as of February 1, 2012.
After enactment of the law, which occurred on June 28, 2011, redevelopment agencies in the State of California cannot
enter into new projects, obligations, or commitments. Subject to the control of a newly established oversight board,
remaining assets can only be used to pay enforceable obligations in existence at the date of dissolution (including the
completion of any unfinished projects that were subject to legally enforceable contractual commitments). in future fiscal
years, successor agencies will only be allocated revenue in the amount that is necessary to pay the estimated annual
installment payments on enforceable obligations of the former redevelopment agency until all enforceable obligations of the
prior redevelopment agency have been paid in full and all assets have been liquidated.
81
City of Lake Elsinore, California
Notes to Financial Statements
Year Ended June 30, 2016
20) SUCCESSOR AGENCY TRUST DISCLOSURES - Continued
Successor Agency Capital Assets
Capital assets activity was as follows:
Beginning Ending
Balance Additions Deletions Balance
Capital Assets, Not Depreciated
Land $ 2,426,392 $ $ $ 2,426,392
Total Capital Assets
Not Depreciated
Capital Assets, Depreciated
2,426 392 0 0 2,426,392
Building and Structures
15,299,757
1,944,932 (18,020) 17,226,669
Improvements Other Than Buildings
571,037
(2,110) 568,927
Machinery and Equipment
1,152,209
118,969 1,271,178
Furniture and Fixtures
996
53,972 (996) 53,972
Total Capital Assets, Depreciated
Less Accumulated Depreciation:.. -
Building and Structures
Improvements Other'fhan Buildings
Machinery and Equipment
Furniture and Fixtures
Total Accumulated Depreciation
12023,999 2,117,873 (21,126) 19,120,746
(6,742,844) (482,947) 10,561 (7,215,230)
(276,049) (35,923) 422 (311,550)
(1,015,085) (26,636) (1,041,721)
(996) (4,235) 996 (4,235)
(8,034 974) (549,741) 11,979 (8,572,736)
Total Capital Assets, Depreciated, Net
8,989,025
1,568,132
(9,147)
10,548,010
Capital Assets, Net
$.,--11,4-15,417 $__..._1.,568,132
`[; (9,147)
$ 121974,402
82
City of Lake Elsinore, California
Notes to Financial Statements
Year Ended June 30, 2016
20) SUCCESSOR AGENCY TRUST DISCLOSURES - Continued
Successor Agency Long -Term Liabilities
Loans Payable:
City of Lake Elsinore
Lake Elsinore Public Financing Authority
Subordinate Tax
Allocation Revenue Bonds:
2011 Series Project Area II
2011 Series Project Area III
Developer Agreements:
Oak Grove Equities
Outlet Center
McMillin Summerly, LLC
Long-term liability activity was as follows:
Date of
Years of
Rate of
Amount
Issue
Maturitv
Interest
Authorized
3/93
1995 -2014
7.00%
1,800,000
Various
Various
Various
Various
Various
Various
Various
$ 61,275,000
4/11
2011 -2034
3.60%- 7.65%
3,260,000
4/11
2011-2039
3.60% -7.75%
1,350,000
3/93
1995 -2014
7.00%
1,800,000
12/89
1996-2015
N/A
2,140,000
12/02
N/A
N/A
19,000,000
Subtotal
Subordinate Tax Allocation Bonds:
2011 Series Project Area II
2011 Series Project Area III
2015 Series
Premiums
Subtotal
Developer Agreements:
Oak Grove Equities
McMillin Summerly, LLC
Subtotal
Total
80,148,177 505,488 (6,749,654) 73,904,011
3,035,000 (3,035,000) (') 0
1,290,000 (1,290,000) (3) 0
0 8,065,000 8,065,000
0 274,002 (9,927) 264.075
4,325 000 8,339,002 (4,334,927) 8,329,075
2,798,104 (2,798,104) 0
862,755 283.372 1,146,127
3.660,859 283,372 (2,798,104) 1,146,127
L_8x_...2,127.862 L(13.882.685) $_ 83.379.213
nn Additions to loans payable to the City of lake Elsinore reflect accrued interest on the loans during the fiscal year.
t2) Includes loan defeasance of $3,650,000.
(3) Includes bond defeasance of $2,955,000 for 2011 Series Project Area 11 and $1,270,000 for 2011 Series Project Area 111.
83
Beginning
Ending
Balance
Additions Deletions
Balance
Loans Payable: . .... .... ...
City of Lake Elsinore (see Note 4)
$ 29,698,048
$ 505,488 fu $ (562,125)
_
$ 29,641,411
Lake Elsinore Public Financing Authority
51,015,000
(6,3105000) a)
44,705,000
Discounts
(564,871)
121471
(442,400)
Subtotal
Subordinate Tax Allocation Bonds:
2011 Series Project Area II
2011 Series Project Area III
2015 Series
Premiums
Subtotal
Developer Agreements:
Oak Grove Equities
McMillin Summerly, LLC
Subtotal
Total
80,148,177 505,488 (6,749,654) 73,904,011
3,035,000 (3,035,000) (') 0
1,290,000 (1,290,000) (3) 0
0 8,065,000 8,065,000
0 274,002 (9,927) 264.075
4,325 000 8,339,002 (4,334,927) 8,329,075
2,798,104 (2,798,104) 0
862,755 283.372 1,146,127
3.660,859 283,372 (2,798,104) 1,146,127
L_8x_...2,127.862 L(13.882.685) $_ 83.379.213
nn Additions to loans payable to the City of lake Elsinore reflect accrued interest on the loans during the fiscal year.
t2) Includes loan defeasance of $3,650,000.
(3) Includes bond defeasance of $2,955,000 for 2011 Series Project Area 11 and $1,270,000 for 2011 Series Project Area 111.
83
City of Lake Elsinore, California
Notes to Financial Statements
Year Ended June 30, 2016
20) SUCCESSOR AGENCY TRUST DISCLOSURES - Continued
A) Loans Payable
Public Financing Authority
Periodically the City of Lake Elsinore's Public Financing Authority (the "Authority") issued Tax Allocation Revenue
Bonds for financing projects of the former Redevelopment Agency and to provide funds for the various debt
obligations of the Agency. The proceeds of the bonds were loaned to the former Agency pursuant to loan agreements
with the Authority in the principal amount of the bonds. Principal and interest are payable in installment payments not
less than three business days prior to the due date on the bonds.
As a result of the dissolution of the Agency, the obligation to pay these loans was transferred to the Successor Agency
to the Redevelopment Agency of the City of Lake Elsinore ("Successor Agency"). The loans made from proceeds of
the tax agency allocation bonds issued by the Public Financing Authority are shown as debt of the Successor Agency.
Redevelopment property tax increment is pledged for payment of the debt issued. The Department of Finance has not
objected to these loans as enforceable obligations of the Successor Agency. Redevelopment property tax trust fund
monies (formerly known as property tax increment), continues to be distributed to the Successor Agency to pay the
debt service on these bonds.
At June 30, 2016, outstanding principal under loan agreements between the Successor Agency and the Authority totaled
$44,705,000 based on 2010 Series A, Series B and Series C Tax Allocation Revenue Bonds.
2010 Series A
In February 2010, $15,435,000 principal amount of Tax Allocation Revenue Bonds, Series A, was issued by the
Authority. Concurrently with this issuance of the bonds, the principal amount was loaned to the Agency. The proceeds
were used to advance refund $13,170,000 of outstanding 1995 Series C Tax Allocation Revenue Bonds. The loan is
payable in annual installments of $305,000 to $2,910,000 from September 1, 2010 through September 1, 2033; interest
at 2.00% to 5.25%. The loan balance at June 30, 2016 is $13,170,000. At June 30, 2016, the Authority has a cash
reserve balance for debt service of $1,494,247, which is sufficient to cover the Bond Indenture Reserve Requirement.
2010 Series B
In May 2010, $10,855,000 principal amount of Tax Allocation Revenue Bonds, Series B, was issued by the Authority.
Concurrently with this issuance of the bonds, the principal amount was loaned to the Agency. The proceeds were used
to advance refund $10,065,000 of outstanding 1995 Series A Tax Allocation Revenue Bonds. The advance refunding
resulted in an economic gain of $757,319 and a decrease in cash flow expenditures of $893,956. Proceeds from the
2010 Series B bonds were invested in an escrow fund with a trustee, which together with earnings, will pay interest and
principal on the bonds until fully retired. The 1995 Series A bonds are legally defeased and are no longer a liability of
the Agency. The Series B loan is payable in annual installments of $515,000 to $895,000 from September 1, 2010
through September 1, 2025; and bears interest at 2.00% to 4.75%. The loan balance at June 30, 2016 is $7,460,000. At
June 30, 2016, the Authority has a cash reserve balance for debt service of $939,598, which is sufficient to cover the
Bond Indenture Reserve Requirement.
84
City of Lake Elsinore, California
Notes to Financial Statements
Year Ended June 30, 2016
20) SUCCESSOR AGENCY TRUST DISCLOSURES - Continued
A) Loans Payable- Continued
2010 Series C
In November 2010, $29,435,000 principal amount of Tax Allocation Revenue Bonds, Series C, was issued by the
Authority. Concurrently with the bond issuance, the principal amount was loaned to the Agency. The proceeds were
used to advance refund $27,495,000 of outstanding 1999 Series A Tax Allocation Revenue Bonds. Tax revenues from
Project Areas 1 and 2 are pledged for the repayment of the loan. In the event that tax revenues are not sufficient from
Project Areas 1 and 2, the Agency covenanted to make interfund loans from Project Area 3 and the Low and Moderate
Income Housing Fund to make the loan payment. The loan is payable in annual installments of $650,000 to
$2,115,000 from September 1, 2011 through September 1, 2030; and bears interest at 2.00% to 5.00%. The loan
balance at June 30, 2016 is $24,075,000. At June 30, 2016, the Authority has a cash reserve balance for debt service of
$2,221,395, which is sufficient to cover the Bond Indenture Reserve Requirement.
Future debt requirements for the loans payable to the Public Financing Authority are as follows:
Year Ending
Total
June 30,
Principal
$ 1,907,751
2017
$ 2,215,000
2018
1265,000
2019
2,345,000
2020
2,420,000
2021
2,510,000
2022-2026
14,155,000
2027-2031
12,515,000
2032-2034
6.280,000
Total
2015 Series
Interest
Total
$ 1,907,751
$ 4,122,751
1,842,408
4,107,408
1,768,189
4,113,189
1,685,482
4,105.482
1,593,292
4,103,292
6,270,512
20,425,512
3,224,472
15,739,472
431.025
6.711.025
3 1 ]
63.428.1.3,E
In August 2015, $8,065,000 principal amount of Subordinate Tax Allocation Refunding Bonds, Series 2015 were
issued to advance refund the 2011 Launch Ramp Project and 2011 Summerly Project Lake Elsinore Public Financing
Authority bonds. The term bonds are due in annual installments of $35,000 to $805,000 from September 1, 2016
through September 1, 2038; interest at 1.625% to 5%. The bonds are subject to call and redemption prior to their stated
maturity at specified redemption prices.
85
City of Lake Elsinore, California
Notes to Financial Statements
Year Ended June 30, 2016
20) SUCCESSOR AGENCY TRUST DISCLOSURES - Continued
B) Subordinate Tax Allocation Revenue Bonds
Future debt requirements for the Subordinate Tax Allocation Refunding Bonds Series 2015 are as follows:
Year Ending
Total
June 30,
Principal
227,094
2017
$ 730,000
2018
730,000
2019
740,000
2020
760,000
2021
790.000
2022-2026
1,740,000
2027-2031
1,410,000
2032-2036
1,035,000
2037-2039
130,000
Total
$__x.065 000
C) Developer Agreements
Interest
Total
$ 241,694
$ 971,694
227,094
957,094
212,394
952,394
189,794
949,794
168,175
958,175
591,181
2,331,181
326,012
1,736,012
85,434
1,120,434
7,250
137,250
$____2.049 028
_. -Q J_J_4A2_8
The former Redevelopment Agency sof the City of Lake Elsinore ("Agency") entered into several developer agreements
for development within the City (project areas). The Agency's significant commitments with certain developers
consist of following:
McMillin Smnmerly LLC
On or about December 26, 2002, the Agency entered into a Disposition and Development Agreement (DDA) with
Laing CP Lake Elsinore LLC and Civic Partners Elsinore LLC, as developer and master developer, respectively,
covering an area of approximately 3,000 acres located in Project Areas 11 and BI. As a result of the bankruptcy of the
managing member of Laing CP Lake Elsinore LLC, Bank of America foreclosed on the property and later sold to
McMillin Sunnnerly LLC, who assumed the rights and obligations of the developer under the DDA pursuant to an
Amended and Restated DDA entered into as of March 8, 2011. In the DDA, the Agency pledged 100% of the net tax
increment generated by the property subject to the DDA to the developer and master developer, excluding, without
limitation, moneys to be set aside in the former low and moderate income housing fund and funds payable under pass
through agreements.
Property taxes accrued for payment as of June 30, 2016, is $1,146,127 to the developer and master developer upon
satisfaction of the terms of the DDA. A portion of the tax increment pledge reimburses the developer for construction
of certain extraordinary infrastructure associated with the project. Developer's reimbursement for construction of
certain extraordinary infrastructure is limited to $19,000,000, as adjusted in accordance with the terms of the DDA.
The Agency issued two subordinate tax allocation bonds 2011 Series totaling $4,610,000, the proceeds of which were
used to reimburse the developer for construction of certain extraordinary infrastructure. Any unpaid reimbursement of
extraordinary infrastructure is to be forgiven upon the expiration of the Agency's right to receive tax increment under
its Redevelopment Plans for Project Areas 11 and 111. The DDA prohibits Further bonded indebtedness secured by tax
increment generated by the project site, other than for specified project purposes.
86
City of Lake Elsinore, California
Notes to Financial Statements
Year Ended June 30, 2016
20) SUCCESSOR AGENCY TRUST DISCLOSURES - Continued
D) Commitments and Contingencies
The Successor Agency has succeeded to the rights and obligations of the former Redevelopment Agency. The
following represents the Successor Agency's significant commitments.
Lake Elsinore Stadium
The Successor Agency has succeeded to the Agency as the owner of Diamond Stadium. Diamond Stadium will require
significant capital maintenance in future years. In addition, the Successor Agency will incur costs to operate and
regularly maintain the Stadium. The cost of ongoing operation maintenance of the Stadium will vary based on how
long the Successor Agency owns the Stadium, how much costs to operate and maintain the Stadium vary over time,
and what kind of capital outlay is required over time to maintain the Stadium in its current condition. Capital expenses
could be substantial and cannot be estimated at this time.
The Successor Agency and the Lake Elsinore Storm entered into a Stadium Interim Management Agreement dated
January 1, 2013 to provide for the performance by the Lake Elsinore Storm of certain maintenance, upkeep, and
operations of Diamond Stadium. The Management Agreement provides that the Successor Agency pay an aggregate
management and maintenance fee to the Lake Elsinore Storm in the amount of $694,692 for the 2017 fiscal year and
$356,030 for the 2018 fiscal year. This amount is net of payments owed to the Successor Agency pursuant to a License
Agreement, as amended, and includes payments by the Successor Agency due pursuant to a Stadium Field and
Maintenance Agreement, as amended, and assignment of revenues pursuant to a Concession License Agreement, as
amended. The Manage what A"greenteift'was amended and expires on June 30, 2018.
Other Matters
Management believes, in consultation with legal counsel, that the obligations of the former redevelopment agency due to the City are valid enforceable obligations payable by the successor agency trust under the requirements of the Bill.
The City's position on this issue is not a position of settled law and there is considerable legal uncertainty regarding this
issue. It is reasonably possible that a legal determination may be made at a later date by an appropriate judicial
authority that would resolve unfavorable to the City.
21) JOINT POWERS AGREEMENTS
On March 28, 2000, the City agreed to enter into a joint powers agreement under Proposition 13 with Elsinore Valley
Municipal Water District and the Santa Ana Watersheds Project Authority to form the fake Elsinore and San Jacinto
Watersheds Authority. The Authority is due to receive $15 million in Proposition 13 water bond proceeds to improve the
Lake Elsinore and San Jacinto Watersheds Authority lake water quality. As of June 30, 2015, the Authority had minimal
activity and according to the criteria in Note IA, the Authority is not included in these financial statements.
In November 2010, the City agreed to enter into a joint powers agreement with the County of Riverside, City of Canyon
Lake, City of Murrieta, City of Temecula and City of Wildomar to form the Southwest Communities Financing Authority
(the Authority) to provide animal shelter services. The City contributes a prorated share of the Authority's debt service
payments, costs of administrative services and operation of animal shelter. The City does not have measurable equity
interest in the Authority. According to criteria in Note IA, the Authority is not included in these financial statements.
87
City of Lake Elsinore, California
Notes to Financial Statements
Year Ended June 30, 2016
21) JOINT POWERS AGREEMENTS - Continued
In January 2004, the City entered into a joint powers agreement with the County of Riverside, the Cities of Banning,
Beaumont, Calimesa, Canyon Lake, Corona, Hemet, Moreno Valley, Murrieta, Norco, Perris, Riverside, San Jacinto and
Temecula to form the Western Riverside County Regional Conservation Authority (the Conservation Authority). The
purposes of the Conservation Authority are to acquire, administer, operate and maintain land and facilities for ecosystem
conservation and habitat reserve for certain endangered species. The City's contributions to the Conservation Authority
consist of a development mitigation fee imposed on all new development. The City does not have measurable equity
interest in the Conservation Authority. According to criteria in Note IA, the Conservation Authority is not included in
these financial statements.
22) SPECIAL ITEM
The Successor Agency to the Lake Elsinore Redevelopment Agency issued bonds to advance refund the Authority's 2011
Local Agency Revenue Bonds, Series A, and 2011 Tax Allocation Revenue Bonds, Series A (see Note 8F). As part of the
refunding, the related loans receivable were cancelled which created a loss on loans receivable in the governmental foods.
23) PRIOR PERIOD ADJUSTMENTS
Included in the Statement of Activities and the Statement of Revenues, Expenditures, and Changes in Fund Balances is a
priorperiod adjustment of $1,312,540. This adjustment was to record bond issue deposits withheld-bythe. Authority.
There was also a prior period adjustment of $153,284 to reverse the prior year accrual of the July 2015 gas tax payment
as recommended by the California State Controller's Office (SCO). in prior years, the SCO had recommended accruing
the July gas tax payments to the previous fiscal year.
24) SUBSEQUENT EVENTS
On August 23, 2016, the City of Lake Elsinore adopted resolution number 2016-102 forming the Parking Authority of
the City of Lake Elsinore.
On September 1, 2016, the City of Lake Elsinore and the Parking Authority of the City of Lake Elsinore entered into a
joint exercise of powers agreement to form the Lake Elsinore Facilities Financing Authority.
In November 2016, $10,410,000 principal amount of Lease Revenue Bonds, Series 2016A, was issued by the Lake Elsinore
Facilities Financing Authority to finance the acquisition, construction and installation of certain capital improvements
owned by the City. The bonds are due in annual installments of $80,000 to $540,000 from April 1, 2017 through April 1,
2046. Interest payments ranging fiom 1.25% to 4.00% are due from April 1, 2017 through April 1, 2046. The bonds are
subject to call and redemption prior to their stated maturity commencing April 1, 2037 at specified redemption prices.
88
X ` f.AM ARE
,
Vi
City of Lake Elsinore, California
Schedule of the City's Proportionate Share of the Net Pension Liability
CalPERS Pension Plan
Last Ten Years*
As of June 30, 2016
Notes to Schedule:
Benefit Changes. In 2015, there was no benefit terns modified.
Changes in Assumptions. In 2016, changes in assumptions resulted primarily from the following:
GASB 68, paragraph 68 states that the long-term expected rate of return should be determined net of pension plan investment
expense but without reduction for pension plan administrative expense. The discount rate of 7.50 percent used for the June
30, 2014 measurement date was net of administrative expenses. The discount rate of 7.65 percent used for the June 30, 2015
measurement date is without reduction of pension plan administrative expense.
Plan's Fiduciary Net Position. The Plan's Fiduciary Net Position is based on the City's proportionate share of the CaIPERS
Miscellaneous Risk Pool.
"- Fiscal year 2015 was the I" year of implementation, therefore only two years are shown.
89
Proportionate Share
Plan Fiduciary
of the Net Pension
Net Position as a
Propel tion of the
Proportionate Share
Liability as a
Perecntage of the
Fiscal
Net Pension
of One Net Pension
Covered-
Percentage of Covered
Total Pension
Year
Liability
Liability
Employee Payroll
Employee Payroll
Liability
2015
0.29477%
$ 7,292,642
$ 4,537,860
160.70%
77.95%
2016
0.32568%
$ 8,943,640
$ 4,751,199
188.24%
75.09%
Notes to Schedule:
Benefit Changes. In 2015, there was no benefit terns modified.
Changes in Assumptions. In 2016, changes in assumptions resulted primarily from the following:
GASB 68, paragraph 68 states that the long-term expected rate of return should be determined net of pension plan investment
expense but without reduction for pension plan administrative expense. The discount rate of 7.50 percent used for the June
30, 2014 measurement date was net of administrative expenses. The discount rate of 7.65 percent used for the June 30, 2015
measurement date is without reduction of pension plan administrative expense.
Plan's Fiduciary Net Position. The Plan's Fiduciary Net Position is based on the City's proportionate share of the CaIPERS
Miscellaneous Risk Pool.
"- Fiscal year 2015 was the I" year of implementation, therefore only two years are shown.
89
Contractually
Required
Contribution
Fiscal (Actuarially
Year Determined)
City of Lake Elsinore, California
Schedule of Contributions
CalPERS Pension Plan
Last Ten Years*
As of June 30, 2016
Contributions in
Relation to the
Actuarially
Determined
Contribution
Contributions as a
Percentage of
Contribution Covered -Employee Covered -Employee
Deficiency (Excess) Payroll Payroll
2015 $ 890,999 $ (890,999) $ 0 $ 4,751,199 18.75%
2016 $ 1,049,049 $ (1,049,049) $ 0 $ 3.804.985 27.57%
*- Fiscal year 2015 was the I" year of implementation, therefore only two years are shown.
90
City of Lake Elsinore, California
Schedule of Funding Progress
Year Ended June 30, 2016
Other Post -Employment Benefits Plan
91
UAALasa
Percentage of
Funded Covered Covered
Ratio Payroll Payroll
(A/B) (C) [(B-A)/C]
0% $ 5,280,551 166.49%
0% $ 4,220,232 334.00%
0% $ 4,597,240 276.49%
Actuarial
Accrued
Actuarial
Actuarial
Liability
Unfunded
Valuation
Value of
(AAL)-
AAL
Date
Assets
Entry Age
(UAAL)
(A)
(B)
(B - A)
07/01/08
$ -
$ 8,791,806
$ 8,791,806
07/01/11
$ -
$ 14,095,692
$ 14,095,692
07/01/14
$ -
$ 12,711,047
$ 12,711,047
91
UAALasa
Percentage of
Funded Covered Covered
Ratio Payroll Payroll
(A/B) (C) [(B-A)/C]
0% $ 5,280,551 166.49%
0% $ 4,220,232 334.00%
0% $ 4,597,240 276.49%
City of Lake Elsinore, California
Budgetary Comparison Schedule
Budget and Actual - General Fund
Year Ended June 30, 2016
REVENUES
Property'Faxes
Other "faxes
Licenses, Permits and Fees
Intergovernmental Revenues
Charges for Services
Fines, Forfeitures and Penalties
Investment Earnings
Contributions fiom Property owners
Miscellaneous
Total Revenues
EXPENDITURES
Current:
City Council
City Attorney
City Clerk
City Manager
Administrative Services
Public Safety
Fire Services
Animal Control
Community Development
Public Works
Lake Maintenance
Community Services
Non -Departmental
Total Expenditures
Excess (Deficiency) of Revenues
over Expenditures
OTHER FINANCING SOURCES (USES)
Transfers In
'Transfers Out
Sale of Capital Assets
Total Other Financing
Sources (Uses)
Net Changes in Fund Balance
Fund Balance- Beginning of Year
Fund Balance - End of Year
Variance with
Final Budget
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
$ 6,643,912
$ 6,609,512
$ 6,551,939
$ (57,573)
11272,492
12,414,538
13,178,135
763,597
3,466,647
3,830,621
L232.849
402,228
1,691,835
1,981,135
2,015,151
34,016
2,845,064
2,432.805
2,453,380
20,575
596,550
618,500
713,056
94,556
105,000
110,000
231,526
121,526
814,820
814,820
3,459,454
3,459,454
6,448,463
6,038,696
3,535,190
(2.503,506)
34,069,963 34.035,807 36,370,680 2334,873
308,318
310,318
306,827
3,491
525,000
525,000
587,691
(62,691)
583,438
579,438
466,215
113,223
522,030
554,030
592,217
(38,187)
1,798,355
1,933,836
1,663,155
270,681
11,797,370
11,709,520
11,462.440
247,080
'/;155,018
7,295,018
7,151,637
143,381
814,820
814,820
804,184
10,636
3,504,568
3,504,568
3,318,898
185.670
5,314,292
5,348,876
5,411,285
(62,409)
1,523,881
1,520,281
1,497,894
22,387
2,246,939
1271,939
1,960,106
311,833
1,681,970
1.720,470
1,674,756
45,714
37,775.999 38,088,114 36.892305 1,190,809
(3,706,036) (4,052,307) (526,625) 3.525.682
107,698 1096,593 2,988,895
(425,000) (2,160,745) (1,735,745)
14.743 14.743
0 (317,302) 950,591 1.267.893
(3,706,036) (4,369,609) 423,966 4,793,575
9,566.315 9.678.475 11.970,943 (2.292,468)
$ 5,860,279 $ 5,308,866 $ 12,394,909 $ 2,501.107
92
City of Lake Elsinore, California
Schedule of Revenues, Expenditures and Changes in Fund Balances
Budget and Actual - Special Revenue Fund
Low and Moderate Income Housing
Year Ended June 30, 2016
REVENUES
Investment Earnings
Total Revenues
EXPENDITURES
Current:
Community Development
Total Expenditures
Excess (Deficiency) of Revenues
over Expenditures
Fund Balance - Beginning of Year
Fund Balance - End af'`ear
93
Variance with
Final Budget
Budgeted
Amounts
Actual
Positive
Original
Final
Amounts
(Negative)
$ 73,161
$ 73,161
$ 186,829
$ 113,668
73,161
73,161
186,829
113,668
4,002
314,712
(310,710)
0
4,002
314,712
(310,710)
73,161
69,159
(127,883)
(197,042)
42,425,432
42,425,432
42,425,432
0
--- - $ 42,498,593
$ 42,494,591
$ 42,297,549
$ 1.97;0.2_
93
City of Lake Elsinore, California
Notes to Required Supplementary Information
June 30, 2016
1. BUDGETS AND BUDGETARY DATA
The City follows these procedures in establishing the budgetary data reflected in the financial statements:
1) In May, the City Manager submits to the City Council a proposed operating budget for the fiscal year commencing July
1. The operating budget includes proposed expenditures and estimated revenues and other means of financing.
2) Public hearings are conducted at City Council meetings to obtain public input.
3) Prior to July 1, the budget is adopted by Council action.
4) The City Manager is authorized to transfer funds appropriated with respect to those classifications designed as other
services and material and supplies within the same department. The City Manager may transfer appropriated funds
fiom any classification within other expenditure categories to the capital outlay classification within the same
department only. For budgeting purposes, the General Fund is composed of several departments while all other
budgeted funds are considered a single department. Revenues are budgeted on a line item basis.
5) The legal level of budgetary control is maintained at the departmental level. Formal budgetary integration is employed
as a management control devise during the year for the Genual and Special Revenue Fund types to assist in controlling
expenditures and enforcing revenue provisions. Capital Projects Fund types are budgeted on a project by project basis.
All appropriations lapse at the end of the fiscal year, except for capital projects which are carried forward until such
time as the project is completed or terminated.
6) =Budgets lot the General, certain Special Revenue and certain Capital Projects Funds are adopic.d on a -basis consistent
with accounting principles generally accepted in the United States of America. Budgeted amounts are as originally
adopted and as further amended by the City Council.
7) Budget information is presented for the General, certain Special Revenue and certain Capital Projects Fund types.
Formal budgeting policies are not required for the Debt Service Fund and, therefore, the financial statement of those
fiords are not included in the Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual.
94
e �,
x
h
�r:`
T
i,
i�"��
City of Lake Elsinore, California
Other Governmental Funds
June 30, 2016
Special Revenue Funds are used to account for the proceeds of special revenue sources that are restricted by law or City
Council resolution to expenditure for specific purposes.
Capital Projects Funds are used to account for financial resources to be used for the acquisition or construction of
redevelopment projects and administrative expenses.
Permanent Fund - Endowment Trust is used to account for receipts used for payment of high school scholarships.
95
City of Lake Elsinore, California
Combining Balance Sheet
Other Governmental Funds
June 30, 2016
ASSETS
Cash and Investments
Cash and Investments with Fiscal Agent
Accounts Receivable
Accrued Interest Receivable
Due from Other Funds
Due from Other Governments
Total Assets
LIABILITIES
Accounts Payable
Deposits and Other Liabilities
Due to Other Funds
Unearned Revenue - Other
Total Liabilities
DEFERRED INFLOWS OF RESOURCES
Unavailable Revenue -
Special Assessments
Unavailable Revenue -
Intergovernmental
Total Deferred Inflows of Resources
FUND BALANCES
Nonspendable
Restricted
Assigned
Unassigned
Total Fund Balances
Total Liabilities, Deferred Inflows of
Resources and Fund Balances
1,467,581 24,322
66,731
0 1.,491,903
66,731
71,960
Permanent
71,960
138,691
0
Fund
138,691
Special
Capital
20,003
Total Other
Revenue
Projects
Endowment
Governmental
Funds
Funds
Trust
Funds
(891)
(891)
$ 9,832,359
$ 9,1.98,386
$ 31,257
$ 19,062,002
$ ]0.659,515
4,198,443
31,347
4,198,443
214,287
214,287
34,081
36,669
90
70,840
70,464
612
71,076
508,324
23,710
532,034
$ 10,659,515
$ 13,457,820
$ 31,347
$ 24,148,682
$ 181,347
$
$
$ 181,347
1,700
1,700
33,878
612
34,490
1,250,656
23,710
1,274,366
1,467,581 24,322
66,731
0 1.,491,903
66,731
71,960
71,960
138,691
0
0
138,691
20,003
20,003
9,054,134
12,778,186
21, 832,320
655,312
11,344
666,656
(891)
(891)
9,053,243
13,433,498
31,347
22,518,088
$ ]0.659,515
$ 13,457,820 $
31,347
$ 24,148,682
96
City of Lake Elsinore, California
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
Other Governmental Funds
For the Year Ended June 30, 2016
REVENUES
Licenses, Permits, Fees
Intergovernmental Revenues
Fines. Forfeitures and Penalties
Investment Earnings
Special Assessments
Miscellaneous
Total Revenues
EXPENDITURES
Current:
General Government
Community Development
Public Services
Community Services
Debt Service:
Principal Retirement
Interest and Fiscal Charges
Total Expenditures
Excess (Deficiency) of Revenues
over Expenditures
OTHER FINANCING SOURCES (USES)
Transfers In
Transfers Out
Total Other Financing Sou ces (Uses)
Net Change in Fund Balances
Fund Balances - Beginning of Year,
As Previously Reported
Prior Period Adjustments
Fund Balances - Beginning of Ycar, As Restated
Fund Balances - End of Year
Permanent
Fund
Special Capital Total Other
Revenue Projects Endowment Governmental
Funds Funds Trust Eunds
$ 1,712,817 $ 948,441 $ $ 2,661,258
2.839,446 2,839,446
390,098 390,098
211,751 243,308 339 455,398
1,680,980 1,680,980
6,236 24.122 30,358
6,841.328 1,215,871 339 8,057,538
13,918 13,918
10,000 10,000
1,286,854 150 1,287,004
722,238 722,238
205,000 205,000
2908`7 290,687
2.019,092 509.755 0 2,528,847
4,822,236 706.116 339 5,528,691
15.369
(3,956,594)
801,906
(6,679,792)
817,275
(10,636,386)
(3,941,225)
(5,877,886)
0 (9,819,111)
881,011 (5,171,770) 339 (4,290,420)
8,325,516 18,605,268 31,008 26,961,792
(153,284) (153,284)
8,172.232 18.605,268 31,008 26.808,508
$ 9.053.243 $ 13.433.498 $ 31,347 $ 22,518,088
97
City of Lake Elsinore, California
Other Special Revenue Funds
June 30, 2016
Supplemental Law Enforcement Service - to account for receipts and expenditures of money related to the citizens option for
public safety grant.
Traffic Offender - to account for administrative fees generated from charges to drivers who have been arrested for DUI, who
are driving on suspended/revoked licenses, or have never been issued a driver's license. These funds may only be used to
father the traffic safety goals of the City of Lake Elsinore and are subject to OTS audit.
Gas Tax - to account for receipts and expenditures of money apportioned under the Street and Highway Code of the State of
California.
Transportation - Measure A - to account for revenues derived from half -cert sales tax and for expenditures to improve the
City's transportation system in response to traffic congestion.
SB 1186 CAS Education - to account for required state fees imposed on business licenses for the development of educational
resources on federal and state disability laws for businesses.
Traffic Safety - to account for expenditures financed by revenue generated from enforcement of California vehicle codes and
City ordinances. These restricted funds may be used only for traffic signals, school crossing guards, and other related traffic
safety expenditures.
City-wide LiehtinV and 1 andscape - to account for revenues derived from annual assessments which are used to pay the costs
incurred by the City for landscape maintenance and street light maintenance.
Lighting and Landscape Maintenance District (L L M D No 1) - to account for revenues derived from annual assessments
which are used to pay the costs incurred by the City for landscape maintenance and street light maintenance within the
District.
Geothermal - to account for cash bond held by the City, as required by the State, for the City owned geothermal well.
Interest earned is available for City use.
AB2766 Air Pollution - to account for South Coast Air Quality Board receipts, representing revenues collected by the
Department of Motor Vehicles. The City is committed to spend revenues to reduce air pollution from mobile sources.
Community Development Block Grant (C D B G) - to account for grant monies received from a federal pass-through agency
not accounted for in the other funds.
Cost Recovery System - to account for receipts of deposits. Deposits may be paid by developers used to pay for plans and
permits or by citizens for facility rentals.
Developer Agreement Revenue/Trust - to account for development fees based on developer agreements.
Affordable Housing in Lieu - to account for collection of fees assessed to developers and for expenditures made on affordable
housing projects.
Citv Hall/Public Works - to account for collection of fees assessed to developers and for expenditures made on City Hall and
Public Works facilities projects.
98
City of Lake Elsinore, California
Other Special Revenue Funds
June 30, 2016
Community Center - to account for collection of fees assessed to developers and for expenditures made on Community
Center facilities projects.
Lake Side Facilities - to account for collection of fees assessed to developers and for expenditure made on Lake Side
facilities projects.
Animal Shelter - to account for collection of fees assessed developers and for expenditures made on animal shelter facilities
projects.
Camino del Norte - to account for fees assessed to developers and for expenditures made on the Camino del Norte projects.
National Pollutant Discharge System (N.P.D.E.S.) - to account for fees assessed to property owners for the N.P.D.E.S., which
is mandated by the federal government. This requires cities to clean up storm water runoff.
PEG Grant - to account for public access cable channel grant revenue provided by cable franchisees based on subscribers.
Funds are used for PEG access equipment, production equipment, as well as renovation or construction of PEG access
facilities.
99
City of Lake Elsinore, California
Combining Balance Sheet
Other Special Revenue Funds
June 30, 2016
ASSETS
Cash and Investments
Accounts Receivable
Accrued Interest Receivable
Due from Other Funds
Due from Other Governments
Total Assets
LIABILITIES
Accounts Payable
Deposits and Other Liabilities
Due to Other Funds
Unearned Revenue - Other
Total Liabilities
DEFERRED INFLOWS OF RESOURCES
Unavailable Revenue - "pedal Assessinents
Unavailable Revenue - Intergovernmental
Total Deferred Inflows of Resources
FUND BALANCES
Restricted
Unassigned
Total Fund Balances
Total Liabilities, Deferred Inflows of
Resources and Fund Balances
Supplemental
Law
Enforcement Traffic Gas 'Transportation
Service Offender Tax Measure A
$ $ $ 1,039,542 $ 936,072
51 6,183 2,826
29324 221,364
$ 29,324 $ 51 $ 1,045,725 $ 1,160,262
$ $ $ 22,005 $
51
0 51 22,005 0
29,324 34,481
29,324 0 0 34,481
1,023,720 1,125,781
0 0 1,023,720 1,125,781
$ 29,324 $ 51. $ 1,045,725 $ 1,160,262
100
SBI 186 City-wide
CAS Traffic Lighting and L.L.M.D.
Education Safety Landscaping No. t Geothermal
$ 5,679 $ $ $ 460,051 $ 21.,943
19 498 1,582 69
70,464
32,401 102,400 4,251
$ 5,698 $ 32,899 $ 172,864 $ 465,884 $ 22,012
$ $ $ 106,133 $ 5,067 $
1,700
32,899
0 32,899 106,133 5,067 1,700
66,731
0 0 66,731 0 0
5,698
460,817 20,312
5,698 0 0 460.817 20,312
$ 5,698 $ 32,899 $ 172,864 $ 465,884 $ 22,012
Continued
101
City of Lake Elsinore, California
Combining Balance Sheet
Other Special Revenue Funds - Continued
June 30, 2016
ASSETS
Cash and Investments
Accounts Receivable
Accrued Interest Receivable
Due from Other Funds
Due from Other Governments
Total Assets
LIABILITIES
Accounts Payable
Deposits and Other Liabilities
Due to Other Funds
Unearned Revenue - Other
Total Liabilities
DEFERRED INFLOWS OF RESOURCES
Unavailable Revenue - Special Assessments
Unavailable Revenue - Intergovernmental
Total Deferred Inflows of Resources
FUND BALANCES
Restricted
Unassigned
Total Fund Balances
'total Liabilities, Deferred Inflows of
Resources and Fund Balances
AB2766 Developer
Air Cost Recovery Agreement
Pollution C.D.B.G. System Revenue/Trust
$ 223,503 $ $ 1,100,132 $ 1,037,889
198,666
753 4,991
19,990 8.192
$ 244,246 $ 8,192 S 1,298,798 $ 1,042.880
$ $ $ 48,142 $
37
1,250.656
0 37 L298,798 0
8,155
0 8,155 0 0
244,246 1,042,880
244,246 0 0 1,042,880
$ 244,246 $ 8,192 $ 1,298,798 $ 1,042,880
102
Affordable
Housing City Hall / Community Lake Side
In -Lieu Public Works Center Facilities
$ 2,730,793 $ 1,152,749 $ 492,455 $ 598,253 $
4,342
9,1.94 3,848 1,714 2,002
Animal
Shelter
$ 2,744,329 $ 1,156,597 $ 494,169 $ 600,255 $ 0
891
0
0
0
0 891
0
0
0 0
0
2,744,329
1,156;597
494,169
600,255
(891)
1744329 1,156,597 494,169 600,255 (891)
$ 2,744,329 $ 1,156,597 $ 494,169 $ 600,255 $ 0
Continued
103
City of Lake Elsinore, California
Combining Balance Sheet
Other Special Revenue Funds - Continued
June 30, 2016
LIABILITIES
Accounts payable $ $ $ $ 181,347
Deposits and Other Liabilities 1.700
Due to Other Funds 33,878
Unearned Revenue - Other 1,250.656
Total Liabilities 0 0 0 1,467,581
DEFERRED INFLOWS OF RESOURCES
Unavailable Revenue - Special ASSCSSMUht5 66.731
Unavailable Revenue - Intergovernmental 71.960
Total Deferred Inflows of Resources 0 0 0 138.691
FUND BALANCES
Restricted 111,655 23,675 9,054,134
Unassigned (891)
Total Fund Balances 0 111,655 23,675 9,053,243
Total Liabilities. Deferred Inflows of
Resources and Fund Balances $ 0 $ 111,655 $ 23,675 $ 10,659.515
104
Total
Camino del
PFG
Other Special
Norte N.P.D.F.S.
Grant
Revenue Funds
ASSETS
Cash and Investments
$ $ 20,902
$ 12,396
$ 9,832,359
Accounts Receivable
11,279
214,287
Accrued Interest Receivable
351
34.081
Due from Other Funds
70.464
Due from Other Governments
90,402
508,324
Total Assets
$ 0 $ 111,655
$ 23,675
$ 10,659.515
LIABILITIES
Accounts payable $ $ $ $ 181,347
Deposits and Other Liabilities 1.700
Due to Other Funds 33,878
Unearned Revenue - Other 1,250.656
Total Liabilities 0 0 0 1,467,581
DEFERRED INFLOWS OF RESOURCES
Unavailable Revenue - Special ASSCSSMUht5 66.731
Unavailable Revenue - Intergovernmental 71.960
Total Deferred Inflows of Resources 0 0 0 138.691
FUND BALANCES
Restricted 111,655 23,675 9,054,134
Unassigned (891)
Total Fund Balances 0 111,655 23,675 9,053,243
Total Liabilities. Deferred Inflows of
Resources and Fund Balances $ 0 $ 111,655 $ 23,675 $ 10,659.515
104
®_ !kRFAM F,RF.MF
City of Lake Elsinore, California
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Other Special Revenue Funds
Year Ended June 30, 2016
REVENUES
Licenses, Permits and Fees
Intergovernmental Revenues
Fines, Forfeitures and Penalties
Investment Earnings
Special Assessments
Miscellaneous
Total Revenues
EXPENDITURES
Con cut:
Community Development
Public Services
Community Services
Total Expenditures
Excess (Deficiency) of Revenues
Over Expenditures
OTHER FINANCING SOURCES (USES)
Transfers In
Transfers Out
Total Other Financing Sources (Uses)
Net Change in Fund Balances
Fund Balances - Beginning of Year,
As Previously Reported
Prior Period Adjustments
Fund Balances - Beginning of Year, As Restated
Fund Balances - End of Year
Supplemental
Law
Enforcement Traffic Gas Transportation
Service Offender Tax Measure A
$ $ 56,577 $ $
114,618 1,265,626 1,163,010
421 36,794 19,798
114,618 56,998 1,302,420 1,182,808
352,449
0
0
352,449
0
114,618
56,998
949,971
1,182,808
(114,618)
(57,017)
(1,216,439)
(987,327)
(114,618)
(57,017)
(1,216,439)
(987,327)
0
(19)
(266,468)
195,481
0
19
1,443,472
930,300
(153,284)
0
19
1,290,188
930,300
$ 0
$ 0
$ 1,023,720
$ 1,125,781
105
SBL 186 City-wide
CAS Traffic Lighting and L.L..M.D.
Education Safety Landscaping No.l Geothermal
$ 2,448 $ $ $ $
390,098
110 2,310 98 9,250 440
1,374,928 306,052
6,236
2,558 392,408 1,381,262 315302 440
620 811,588
46,948 17
545,787
167,235
620 0 1,357,375
214,183 17
1,938 392,408 23,887
101,119 423
15,369
(392,458)
0 (392,458) 15369 0 0
1,938 (50) 39,256 101,119 423
3,760 50 (39,256) 359,698 19,889
3,760 50 (39,256) 359,698 19,889
$ 5,698 $ 0 $ 0 $ 460,817 $ 20,31.2
Continued
106
City of Lake Elsinore, California
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Other Special Revenue Funds - Continued
Year Ended June 30, 2016
REVENUES
Licenses, Permits and Fees
Intergovernmental Revenues
Fines, Forfeitures and Penalties
Investment Earnings
Special Assessments
Miscellaneous
Total Revenues
EXPENDITURES
Current:
Community Development
Public Services
Community Services
Total Expenditures
Excess (Deficiency) of Revenues
Over Expenditures
OTHER FINANCING SOURCES (USES)
Transfers In
Transfers Out
Total Other Financing Sources (Uses)
Net Change in Fund Balances
Fund Balances - Beginning of Year,
As Previously Reported
Prim' Period Adjustments
Fund Balances - Beginning of Year, As Restated
Fund Balances - End of Year
Developer
AB2766 Cost Recovery Agreement
Air Pollution C.D.B.G. System Revenue/Trust
$ $ R 322,300
74,306 221,886
4,236 30,295
78.542 221,886 0 352.595
10,000
6,000
6.000 10.000 0 0
72,542 211,886 0 352,595
(61,631) (449,509)
0 (61,631) 0 (449,509)
72,542 150,255 0 (96,914)
171,704 (150,255) 0 1,139,794
171,704 (150,255) 0 1,139,794
$ 244.246 $ 0 $ 0 $ 1.042.880
107
Affordable
Housing City Hall/ Community Lake Side Animal
In -Lieu Public Works Center Facilities Shelter
$ 508,363 $ 215,399 $ 135,159 $ 191192 $ 86,304
58,638 23,211 10,020 13,805
567,001 238,610 145,179 206,997 86,304
9,106
0 0 0 9,106 0
567,001 238,610 145,179 197,891 86,304
(200,000)
(32,275)
(42,479)
(280,738)
(200,000)
(32,275)
(42,479)
(280,738)
0
367,001
206,335
101700
(82,847)
86304
2,377,328
950,262
391,469
683,102
(87,195)
2377328
950,262
391,469
683,102
(87,195)
$ 2,744,329
$ 1,156597 $
494,169
$ 600,255
$ (891)
Continued
108
City of Lake Elsinore, California
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Other Special Revenue Funds - Continued
Year Ended June 30, 2016
Fund Balances - Beginning of Year,
As Previously Reported 36,519 111,944 (17,088) 8,325,516
Prior Period Adjusmtcnts (153,284)
Fund Balances - Beginning, As Restated 36.519 111,944 (17,088) 8,172,232
Fund Balances - End of Year $ 0 $ 111,655 $ 23,675 $ 9,053,243
109
Total
Cainino
PEG
Other Special
del Norte
N.P.D.E.S
Grant
Revenue Funds
REVENUES
Licenses, Permits and Fees
$
$ 141,387
51,688
$ 1,712,817
Intergovernmental Revenues
2,839,446
Fines, Forfeitures and Penalties
390,098
Investment Earnings
143
2,182
211,751
Special Assessments
1,680,980
Miscellaneous
6,236
Total Revenues
143
143,569
51,688
6,841.328
EXPENDITURES
Current:
Conununity Development
10,000
Public Services
64,765
4,467
1,286,854
Community Services
110
722,238
Total Expenditures
110
64,765
4,467
2,019,092
Excess (Deficiency) of Revenues
Over Expenditures
33
78.804
47,221
4,822,236
OTHER FINANCING SOURCES (USES)
Transfers In
15,369
Transfers Out
(36,552)
(79,093)
(6,458)
(3,956,594)
Total Other Financing Sources (Uses)
(36,552)
(79,093)
(6.458)
(3,941,225)
Net Change in Fund Balances
(36,519)
(289)
40,763
881.01 I
Fund Balances - Beginning of Year,
As Previously Reported 36,519 111,944 (17,088) 8,325,516
Prior Period Adjusmtcnts (153,284)
Fund Balances - Beginning, As Restated 36.519 111,944 (17,088) 8,172,232
Fund Balances - End of Year $ 0 $ 111,655 $ 23,675 $ 9,053,243
109
City of Lake Elsinore, California
Schedule of Revenues, Expenditures and Changes in Fund Balances
Budget and Actual - Special Revenue Fund
Supplemental Law Enforcement Service
Year Ended June 30, 2016
REVENUES
Intergovernmental Revenues
Total Revenues
EXPENDITURES
Current:
Public Safety
Total Expenditures
Excess (Deficiency) of Revenues
over Expenditures
OTHER FINANCING SOURCES (USES)
Transfers Out
Total Other Financing Sources (Uses)
Net Change in Fund Balance
Fund Balance - Beginning of Year
Fund Balance - End of Year
Variance with
Final Budget
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
$ 100,000 $ 100,000 $ 114,618 $ 14,618
100,000 100,000 114,618 14,618
0 0 0 0
100,000 100,000 114,618 14,618
(100,000) (114,618) (14,618)
0 (100,000) (114,618) (14,618)
100,000 0 0 0
0 0 0 0
$ 100,000 $ 0 $ 0 $ 0
110
City of Lake Elsinore, California
Schedule of Revenues, Expenditures and Changes in Fund Balances
Budget and Actual - Special Revenue Fund
Traffic Offender
Year Ended June 30, 2016
Variance with
Final Budget
Budgeted Amounts
Actual
Positive
Original
Final
Amounts
(Negative)
REVENUES
Licenses, Permits and Fees
$ 121,000
$ 121,000
$ 56,577
$ (64,423)
Investment Earnings
421
421
Total Revenues
121,000
121,000
56,998
(64,002)
EXPENDITURES
Current:
Public Safety
0
Total Expenditures
0
0
0
0
Excess (Deficiency) of Revenues
over Expenditures
121,000
121,000
56,998
(64,002)
OTHER FINANCING SOURCES (USES)
Transfers Out
(121,000)
(57,017)
63,983
Total Other Financing Sources (Uses)
0
(121,000)
(57,017)
63,983
Net Change in Fund Balance
121,000
0
(19)
(19)
Fund Balance - Beginning of Year
19
19
19
0
Fund Balance - End of Year
$ 121,019
$ 19
$ 0
—L -----Ll 9)
City of Lake Elsinore, California
Schedule of Revenues, Expenditures and Changes in Fund Balances
Budget and Actual - Special Revenue Fund
Gas Tax
Year Ended June 30, 2016
EXPENDITURES
Current:
Public Services 369,530 369,530 352,449 17,081
Total Expenditures 369,530 369,530 352,449 17,081
Excess (Deficiency) of Revenues
over Expenditures (369,530) 860,518 949,971 89,453
OTHER FINANCING SOURCES (USES)
Transfers Out -
(793,817)
Variance with
(422,622)
Total Other Financing Sources (Uses)
0
Final Budget
(1,216,439)
Budgeted Amounts
Actual
Positive
66,701
Original Final
Amounts
(Negative)
REVENUES
Intergovernmental Revenues
$ $ 1,230,048
$ 1,265,626
$ 35,578
Investment Earnings
Prior Period Adjustment
36,794
36,794
Total Revenues
0 1,230,048
1,302,420
72,372
EXPENDITURES
Current:
Public Services 369,530 369,530 352,449 17,081
Total Expenditures 369,530 369,530 352,449 17,081
Excess (Deficiency) of Revenues
over Expenditures (369,530) 860,518 949,971 89,453
OTHER FINANCING SOURCES (USES)
Transfers Out -
(793,817)
(1,216,439)
(422,622)
Total Other Financing Sources (Uses)
0
(793,817)
(1,216,439)
(422,622)
Net Change in Fund Balance
(369,530)
66,701
(266,468)
(333,169)
Fund Balance - Beginning of Year,
As Previously Reported
1,443,472
1,443,472
1,443,472
0
Prior Period Adjustment
(153,284)
(153,284)
Fund Balance - Beginning of Year, As Restated
1-443,472
1.443,472
1,290,188
(153,284)
Fund Balance - End of Year
$ 1,073,942
$ 1,510,173
$L 1,023,720
$(486,453)
112
City of Lake Elsinore, California
Schedule of Revenues, Expenditures and Changes in Fund Balances
Budget and Actual - Special Revenue Fund
Transportation Measure A
Year Ended June 30, 2016
113
Variance with
Final Budget
Budgeted Amounts
Actual
Positive
Original
Final
Amounts
(Negative)
REVENUES
Intergovernmental Revenues
$ 1,159,000
$ 1,159,000
$ 1,163,010
$ 4,010
Investment Earnings
19.798
19,798
Total Revenues
1,159,000
1,159,000
1,182,808
23,808
EXPENDITURES
Current:
Public Services
0
Total Expenditures
0
0
0
0
Excess (Deficiency) of Revenues
over Expenditures
1,159,000
1,159,000
1,182,808
23,808
OTHER FINANCING SOURCES (USES)
Transfers Out
(1,166,183)
(1,166,183)
(987327)
178,856
Total Other Financing Sources (Uses)
(1,166,183)
(1,166,183)
(987,327)
178,856
Net Change in Fund Balance
(7,183)
(7,183)
195,481
202,664
Fund Balance- Beginning of'Year
930,300
930,300
930,300
0
Fund Balance - End of Year
$ 923.117
$ 923,117
$ 1,125,781
$ 202,664
113
City of Lake Elsinore, California
Schedule of Revenues, Expenditures and Changes in Fund Balances
Budget and Actual - Special Revenue Find
SB 1186 CAS Education
Year Ended .lune 30, 2016
114
Variance with
Final Budget
Budgeted Amounts
Actual
Positive
Original
Final
Amounts
(Negative)
REVENUES
Licenses, Permits and Fees
$ 2,294 $
2,294
$ 2,448
$ 154
Investment Earnings
110
110
Total Revenues
2,294
2,294
2,558
264
EXPENDITURES
Current:
Public Services
4,533
4,533
620
3,913
Total Expenditures
4,533
4,533
620
3,913
Excess (Deficiency) of Revenues
over Expenditures
(2,239)
(2,239)
1,938
4,177
Fund Balance - Beginning of Year
3.760
3,760
3,760
0
Fund Balance - End of Year
$ 1,521 $
1,521
$ 5.698
$ 4 177
114
City of Lake Elsinore, California
Schedule of Revenues, Expenditures and Changes in Fund Balances
Budget and Actual - Special Revenue Fund
Traffic Safety
Year Ended June 30, 2016
115
Variance with
Final Budget
Budgeted Amounts
Actual
Positive
Original
Final
Amounts
(Negative)
REVENUES
Fines, Forfeitures and Penalties
$ 475,000 $
475,000
$ 390,098
$ (84,902)
Investment Earnings
2,310
2,310
Total Revenues
475,000
475,000
392,408
(82,592)
EXPENDITURES
Current:
Public Safety
0
Total Expenditures
0
0
0
0
Excess (Deficiency) of Revenues
over Expenditures
475,000
475,000
392,408
(82,592)
OTHER FINANCING SOURCES (USES)
Transfers Out
(475,000)
(392,458)
82,542
Total Other Financing Sources (Uses)
0
(475,000)
(392,458)
82,542
Net Change in Fund Balance
475,000
0
(50)
(50)
Fund Balance - Beginning of Year
50
50
50
0
Fund Balance - End of Year
$ 475,050 $
50
$ 0
$ (50)
115
City of Lake Elsinore, California
Schedule of Revenues, Expenditures and Changes in Fund Balances
Budget and Actual - Special Revenue Fund
City -Wide Lighting and Landscaping
Year Ended June 30, 2016
Budgeted Amounts Actual
Original Final Amounts
Variance with
Final Budget
Positive
(Negative)
REVENUES
Investment Earnings
$
$
$ 98
$ 98
Special Assessments
1,388,223
1,408,545
1,374,928
(33,617)
Miscellaneous
6,236
6,236
Total Revenues
1,388,223
1,408,545
1,381.262
(27,283)
EXPENDITURES
Current:
Public Services
969,500
969,500
811,588
157,912
Community Services
643,610
643,610
545,787
97,823
Total Expenditures
1,613,110
1,613,110
1,357,375
255,735
Excess (Deficiency) ofRevenues
over Expenditures
(224,887)
(204,565)
23,887
228,452
OTHER FINANCING SOURCES (USES)
Transfers In
213.538
15.369
(198.169)
Total Other Financing Sources (Uses)
0
213,538
15.369
(198,169)
Net Change in Fund Balance
(224,887)
8,973
39,256
30,283
Fund Balance - Beginning of Year
(39,256)
(39,256)
(39256)
0
Fund Balance - End of Year
$ (264 143)
$ (30,283)
$ 0
$ 30.283
116
City of Lake Elsinore, California
Schedule of Revenues, Expenditures and Changes in Fund Balances
Budget and Actual - Special Revenue Fund
L.L.M.D. No. 1
Year Ended June 30, 2016
REVENUES
Investment Earnings
Special Assessments
Total Revenues
EXPENDITURES
Current:
Public Services
Community Services
Total Expenditures
Excess (Deficiency) of Revenues
over Expenditures
OTHER FINANCING SOURCES (USES)
Transfers Lt
Total Other Financing Sources (Uses)
Net Change in Fund Balance
Fund Balance - Beginning of Year
Fund Balance - End of Year
Variance with
Final Budget
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
$ $ $ 9,250 $ 9,250
271,451 305,154 306,052 898
271,451 305,154 315,302 10,1.48
172,400 179,400 46,948 132,452
201.280 201,280 167,235 34,045
373,680 380,680 214,183 166,497
(102,229) (75,526) 101,119 176,645
95,864
(95,86:)
0
95,864
0
(95,864)
(102,229)
20,338
101,119
80,781
359,698
359,698
359,698
0
$ 257,469 $
380,036
$ 460,817 $
65,698
117
City of Lake Elsinore, California
Schedule of Revenues, Expenditures and Changes in Fund Balances
Budget and Actual - Special Revenue Fund
Geothermal
Year Ended .Tune 30, 2016
118
Variance with
Final Budget
Budgeted Amounts
Actual
Positive
Original Final
Amounts
(Negative)
REVENUES
Investment Earnings
$ $
$ 440
$ 440
Total Revenues
0 0
440
440
EXPENDITURES
Public Services
17
(17)
Total Expenditures
0 0
17
(17)
Excess (Deficiency) of Revenues
over Expenditures
0 0
423
423
Fund Balance - Beginning of Year
19,889 19,889
19.889
0
Fund Balance - End of Year
$ I9,889 $ I9 889
$ 20,312
$ 423
118
City of Lake Elsinore, California
Schedule of Revenues, Expenditures and Changes in Fund Balances
Budget and Actual - Special Revenue Fund
AB2766 Air Pollution
Year Ended June 30, 2016
REVENUES
Intergovernmental Revenues
Investment Earnings
Tood Revenues
EXPENDITURES
Current:
Public Services
Total Expenditures
Excess (Deficiency) of Revenues
over Expenditures
OTHER FINANCING SOURCES (USES)
Transfers Out
Total Other Financing Sources (Uses)
Net Change In Fund Balances
Variance with
Final Budget
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
$ 42,890 $ 42,890 $ 74,306 $ 31,416
4,236 4,236
42,890 42,890 78,542 35,652
6,000 (6,000)
0
0
6,000
(6,000)
0
Fund Balance - End of Year
42,890
42,890
72,542
29,652
(42,890)
(42,890
0
42,890
(42,890)
(42,890)
0
42,890
0
0
72,542
72,542
Fund Balance - Beginning of Year
171,704
171,704
171,704
0
Fund Balance - End of Year
$ 171,704
$ 177,704
$ 244,246 $
72,542
119
City of Lake Elsinore, California
Schedule of Revenues, Expenditures and Changes in Fund Balances
Budget and Actual - Special Revenue Fund
C.D.B.G
Year Ended .Tune 30, 2016
Variance with
Final Budget
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Intergovernmental Revenues $ 340,397 $ 340,397 $ 221,886 $ (118,511)
Total Revenues 340,397 340,397 221,886 (118,511)
EXPENDITURES
Current:
Community Development 10,000 (10,000)
Total Expenditures 0 0 10,000 (10,000)
Excess (Deficiency) of Revenues
over Expenditures
340,397
340,397
211,886
(128,511)
OTHER FINANCING SOURCES (USES)
Transfers Out
(340,397)
(340,397)
(61,631)
278,766
Total Other Financing Sources (Uses)
(340,397)
(340,397)
(61,631)
278,766
Net Change In Fund Balances
0
0
150,255
150,255
Fund Balance- Beginning of Year
(150,225)
(150,255)
(150,255)
0
FundBalance- EndofYear$
(150,225)
$ (150,255)
$ 0
$ 150,255
120
City of Lake Elsinore, California
Schedule of Revenues, Expenditures and Changes in Fund Balances
Budget and Actual - Special Revenue Fund
Developer Agreement Revenue/Trust
Year Ended June 30, 2016
121
Variance with
Final Budget
Budgeted Amounts
Actual
Positive
Original
Final
Amounts
(Negative)
REVENUES
Licenses, Permits and Fees
$ 188,810
$ 188,810
$ 322,300
$ 133,490
Investment Earnings
30,295
30,295
Total Revenues
188,810
188,810
352,595
163,785
EXPENDITURES
Capital Outlay
0
Total Expenditures
0
0
0
0
Excess (Deficiency) of Revenues
over Expenditures
188,810
188,810
352,595
163,785
OTHER FINANCING SOURCES (USES)
Transfers Out
(410,000)
(449,509)
39,509
Total Other Financing Sou acs=(Uses) "-'----
0
(410,000)
(449,509)
39,509
Net Change In Fund Balances
188,810
(221,190)
(96,914)
203,294
Fund Balance- Beginning of Year
1,139,794
1,139,794
1,139,794
0
Fund Balance - End of Year
$ 1,328,604
$ 918,604
$ 1,042,880
$ 203,294
121
City of Lake Elsinore, California
Schedule of Revenues, Expenditures and Changes in Fund Balances
Budget and Actual - Special Revenue Fund
Affordable Housing In -Lieu
Year Ended June 30, 2016
EXPENDITURES
Current
Public Services 30,000 30.000
Total Expenditures 0 30,000 0 30,000
Excess (Deficiency) of Revenues
over Expenditures 263,500 567,001 303.501
OTHER FINANCING SOURCES (USES)
Trail fors Out
(200,000)
Variance with
0
Total Othcr Financing Sources (Uses)
0
Final Budget
(200,000)
Budgeted Amounts
Actual
Positive
63,500
Original Final
Amounts
(Negative)
2,377,328
2,377,328
REVENUES
0
Fund Balance - End of Year
$ 2,377,328
Licenses, Permits and Fees
$ 293,500 $ 293,500
$ 508,363
$ 214,863
Investment Earnings
58,638
58,638
Total Revenues
293,500 293,500
567,001
273,501
EXPENDITURES
Current
Public Services 30,000 30.000
Total Expenditures 0 30,000 0 30,000
Excess (Deficiency) of Revenues
over Expenditures 263,500 567,001 303.501
OTHER FINANCING SOURCES (USES)
Trail fors Out
(200,000)
(200,00,,)
0
Total Othcr Financing Sources (Uses)
0
(200,000)
(200,000)
0
Net Change In Fund Balances
0
63,500
367,001
303,501
Fund Balance - Beginning of Year
2,377,328
2,377,328
2,377,328
0
Fund Balance - End of Year
$ 2,377,328
$ 2,304,328
$ 2,744,329 $
607,002
122
City of Lake Elsinore, California
Schedule of Revenues, Expenditures and Changes in Fund Balances
Budget and Actual - Special Revenue Fund
City Hall/Public Works
Year Ended June 30, 2016
123
Variance with
Final Budget
Budgeted Amounts
Actual
Positive
Original
Final
Amounts
(Negative)
REVENUES
Licenses, Permits and Fees
$ 159,350 $
159,350
$ 215,399
$ 56,049
Investment Earnings
23,211
23,211
Total Revenues
159,350
159,350
238,610
79,260
EXPENDITURES
Current:
Public Services
0
Total Expenditures
0
0
0
0
Excess (Deficiency) of Revenues
over Expenditures
159,350
159,350
238,610
79,260
OTHER FINANCING SOURCES (USES)
Transfers Out
(159,350)
(159,350)
(32,275)
127,075
- Total Other Financing Sources (Uses)
(159,350)
(159,350)
(32,275)
127,075
Net Change in Fund Balance
0
0
206,335
206,335
Fund Balance - Beginning of Year
950,262
950,262
950,262
0
Fund Balance - End of Year
$ 950,262 $
950,262
$ 1,156,597
$ 206,335
123
City of Lake Elsinore, California
Schedule of Revenues, Expenditures and Changes in Fund Balances
Budget and Actual - Special Revenue Fund
Community Center
Year Ended June 30, 2016
REVENUES
Licenses, Permits and Fees
Investment Earnings
Total Revenues
EXPENDITURES
Current:
Community Services
Total Expenditures
Excess (Deficiency) of Revenues
over Expenditures
OTHER FINANCING SOURCES (USES)
Transfers Out
Total Other Financing Sources (Uses)
Net Change in Fund Balance
Fund Balance - Beginning of Year
Fund Balance - End of Year
Variance with
Final Budget
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
$ 92,920 $ 92,920 $ 135,159 $ 42,239
10,020 10,020
92,920 92,920 145,179 52,259
0
0
0
0
0
92,920
92,920
145,179
52,259
(92,s20)''-`—
— (92,920)
(42,479)
50,441
(92,920)
(92,920)
(42,479)
50.441
0
0
102,700
102,700
391,469
391,469
391,469
0
$ 391,469 $
391,469 $
494,169 $
102,700
124
City of Lake Elsinore, California
Schedule of Revenues, Expenditures and Changes in Fund Balances
Budget and Actual - Special Revenue Fund
Lake Side Facilities
Year Ended .Tune 30, 2016
REVENUES
Licenses, Permits and Fees
Investment Earnings
Total Revenues
EXPENDITURES
Current:
Community Services
Total Expenditures
Excess (Deficiency) of Revenues
over Expenditures
OTHER FINANCING SOURCES (USES)
Transfers Out
Total Other Financing Sources (Uses)
Net Change in Fund Balance
Fund Balance - Beginning of Year
Fund Balance - End of Year
Variance with
Final Budget
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
$ 123,890 $ 123,890 $ 193,192 $ 69,302
13,805 13,805
123,890 123,890 206,997 83,107
9,106 (9,106)
0 0 9,106 (9,106)
123,890 123,890 197,891 74,001
(123,890) (123,890) (280,738) (156,848)
(123,890) (123,890) (280,738) (156,848)
0 0 (82,847) (82,847)
683,1.02 683,102 683,102 0
$ 683,102 $ 683,102 $ 600,255 $(82,847)
125
City of Lake Elsinore, California
Schedule of Revenues, Expenditures and Changes in Fund Balances
Budget and Actual - Special Revenue Find
Animal Shelter
Year Ended June 30, 2016
REVENUES
Licenses, Permits and Fees
Total Revenues
EXPENDITURES
Current:
Community Services
Total Expenditures
Excess (Deficiency) of Revenues
over Expenditures
OTHER FINANCING SOURCES (USES)
Transfers In
Total Other Financing Sources (Uses)
Net Change in Fund Balance
Fund Balance - Beginning of Year
Fund Balance - End of Year
Variance with
Final Budget
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
$ 51,780 $ 51,780 $ 86,304 $ 34,524
51,780 51,780 86,304 34,524
0
0
0
0
0
51,780
51,780
86,304
34,524
85,527
(85,527)
0
85,527
0
(85,527)
51,780
137,307
86,304
(51,003)
(87,195)
(87,195)
(87,195)
0
$ 16,365 $
272,946
$ (891)
$ (187,533)
126
City of Lake Elsinore, California
Schedule of Revenues, Expenditures and Changes in Fund Balances
Budget and Actual - Special Revenue Fund
Camino Del Norte
Year Ended June 30, 2016
127
Variance with
Final Budget
Budgeted Amounts
Actual
Positive
Original
Final
Amounts
(Negative)
REVENUES
lnvestntentEarnings
$ 400 $
400
$ 143
$ 467
Total Revenues
400
400
143
(257)
EXPENDITURES
Conununity Services
110
(110)
Total Expenditures
0
0
110
(110)
Excess (Deficiency) of Revenues
over Expenditures
400
400
33
(367)
OTHER FINANCING SOURCES (USES)
Transfers Out
(36,552)
(36,552)
Total Other Financing Sources (Uses)
0
0
(36;552)
(36,552)
Net Change in Fund Balance
400
400
(36,519)
(36,919)
Fund Balance - Beginning of Year
36,519
36,519
36,519
0
Fund Balance - End of Year
$ 36,919 S
36,919
$ 0
$ (36,919)
127
City of Lake Elsinore, California
Schedule of Revenues, Expenditures and Changes in Fund Balances
Budget and Actual - Special Revenue Fund
N.P.D.E.S.
Year Ended June 30, 2016
REVENUES
Licenses, Permits and Fees
Investment Earnings
Total Revenues
EXPENDITURES
Current:
Public Services
Total Expenditures
Excess (Deficiency) of Revenues
over Expenditures
OTHER FINANCING SOURCES (USES)
Transfers Out
Total Otber Financing Sources (Uses)
Net Change in Fund Balance
Fund Balance - Beginning of Year
Fund Balance - End of Year
Variance with
Final Budget
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
$ 231,760 $ 369,358 $ 141,387 $ (227,971)
2,182 2,182
231360 369,358 143,569 (225,789)
293,880 293,880 64,765 229,115
293,880 293,880 64,765 229,115
(62,120) 75,478 78,804 3,326
(87,120) (79,093) (79,093)
(87,120) 0 (79,093) (79,093)
(149,240) 75,478 (289) (75,767)
111,944 111,944 111,944 0
$ (37,296) $ 187,422 $ 111,655 $ (75,767)
128
City of Lake Elsinore, California
Schedule of Revenues, Expenditures and Changes in Fund Balances
Budget and Actual - Special Revenue Fund
PEG Grant
Year Ended June 30, 2016
REVENUES
Licenses, Permits and Fees
Total Revenues
EXPENDITURES
Current:
Public Services
Total Expenditures
Excess (Deficiency) of Revenues
over Expenditures
OTHER FINANCING SOURCES (USES)
Transfers Out
Total Other Financing Sources (Uses)
Net Change in Fund Balance
Fund Balance - Beginning of Year
Fund Balance - End of Year
Variance with
Final Budget
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
$ 34,420 $ 34,420 $ 51,688 $ 17,268
34,420 34,420 51,688 17,268
157,183 157,183 4,467 152,716
157,183 157,183 4,467 152,716
(122,763) (122,763) 47,221 169,984
(6,458) (6,458)
0 0 (6,458) (6,458)
(122,763) (122,763) 40,763 163,526
(17,088) (17,088) (17,088) 0
$ (139,8511
129
—L—L39
,851) $ 23,675 $ 163,526
City of Lake Elsinore, California
Other Capital Projects Funds
June 30, 2016
Miscellaneous General Project - to account for miscellaneous general projects of the City.
Park Improvement and Development nent - to account for the improvement and development of parks that are financed by
developer fees.
Street Capital Improvements - to account for general capital improvements of streets within the City that are financed by
development fees.
Storm Drains - to account for the capital improvements of upgrading the storm drains within the City that are financed by the
development fees.
Library Capital Improvement - to account for general capital improvements necessary for the upgrade and maintenance of the
Public Libraries within the City. Financed by development fees, upgrades include the purchase of reading material.
Signalization Improvement - to account for general improvements and repairs to signal lights within the City that are
financed by development fees.
Traffic Impact - to account for projects related to traffic improvements, financed by development fees.
City Fire Protection - to account for the construction of fire facilities financed by development fees.
Public Improvement ht -Lieu - to account for special designated improvements to City property, financed by development
fees.
Road Improvement Program - to account for projects related to road improvements, financed by debt proceeds.
Transportation Uniform Mitigation Fee (TUMF) - to account for multi -jurisdictional development impact fee paid for by new
development to provide the transportation infrastructure necessary to accommodate new development.
130
City of Lake Elsinore, California
Combining Balance Sheet
Other Capital Projects Funds
June 30, 2016
ASSETS
Cash and Investments
Cash and Investments with Fiscal Agent
Accrued Interest Receivable
Due from Other Funds
Due from Other Governments
Total Assets
LIABILITIES
Due to Other Funds
Unearned Revenue - Other
Total Liabilities
FUND BALANCES
Restricted
Assigned
Total Fund Balances
Total Liabilities and Fund
Balances
Park
Miscellaneous Improvement
General and Street Capital Storm
Project Development Improvements Drains
$ 651,819 $ 11,945 $ $ 2,389,969
2,881 55 11,818
612
$ 655,312 $ 12,000 $ 0 $ 2,401,787
0 0 0 0
12,000 0 2,401,787
655,312
655,312 11000 0 2,401,787
$ 655,312 $ 12,000 $ 0 $ 2,401,787
131
Library Public
Capital Signalization Traffic City Fire Improvement
Improvement Improvement Impact Protection In -Lieu
$ 1,674,871 $ $ 3,618,990 $ $ 847,970
5,878 12,506 612 2,919
$ 1,680,749 $ 0 $ 3,631,496 $ 612 $ 850,889
$ $ $ $ 612 $
0 0 0 612 0
1,680,749 0 3,631,496 0 850,889
1,680,749 0 1631,496 0 850,889
$ 1,680,749 $ 0 $ 3,631,496 $ 612 $ 850,889
Continued
132
City of Lake Elsinore, California
Combining Balance Sheet
Other Capital Projects Funds - Continued
June 30, 2016
ASSETS
Cash and Investments
Cash and Investments with Fiscal Agent
Accrued Interest Receivable
Due from Other Funds
Due from Other Governments
Total Assets
LIABILITIES
Due to Other Funds
Unearned Revenue- Other
Total Liabilities
FUND BALANCES
Restricted
Assigned
Total Fund Balances
Total Liabilities and Fund
Balances
133
Road Total
Improvement Other Capital
Program Fund TUMF Projects Funds
$ 127 $ 2,695 $ 9,198,386
4,198,443 4,198,443
36,669
612
23,710 23,710
$ 4,198,570 $ 26,405 $ 13,457,820
$ $ $ 612
23,710 23,710
0 23,710 24,322
4,198,570 2,695 12,778,186
655,312
4,198,570 2,695 13,433,498
$ 4,198,570 $ 26,405 $ 13,457,820
:.=mAW»� R FAM
City of Lake Elsinore, California
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Other Capital Projects Funds
Year Ended June 30, 2016
REVENUES
Licenses, Permits and Fees
Investment Earnings
Miscellaneous
Total Revenues
EXPENDITURES
Current:
General Government
Public Services
Debt Service:
Principal Retirement
Interest and Fiscal Charges
Total Expenditures
Excess (Deficiency) of Revenues
Over Expenditures '
OTHER FINANCING SOURCES (USES)
Transfers In
Transfers Out
Total Other Financing
Sources (Uses)
Net Change in Fund Balances
Fund Balances - Beginning of Year
Fund Balances - End of Year
Park
Miscellaneous Improvement
General and Street Capital Storm
Project Development Improvements Drains
$ $ 16,423 $
29,451 371
29,451 16,794
13.765
13,765 0
$ 122,451
76,038
0 198,489
153
0 153
15,686 16,794 0 198,336
202,943
(1,481,809) (26,850) (97) (1,231,000)
(1,278,866)
(26,850)
(97)
(1,231,000)
(1,263,180)
(10,056)
(97)
(1,032,664)
1,918,492
22,056
97
3,434,451
$ 655,312
$ 12,000 $
0
$ 2,401,787
134
Library Public
Capital Signalization Traffic City Fire Improvement
Improvement Improvement Impact Protection In -Lieu
$ 61,350 $ $ 505,055 $ 191,969 $ 51,193
37.255 3 76,201 1467 18,241
98,605 3 5817256 194,436 69,434
0
0
0
0
0
98,605
3
581,256
194,436
69,434
(39,370)
(805)
(119,319)
(202,943)
(3,967)
(39,370)
(805)
(119,319)
(202,943)
(3,967)
59,235
(802)
461,937
(8,507)
65,467
1,621,514
802
3,169,559
8,507
785,422
$ 1,680,749
$ 0
$ 3,631,496
$ 0
$ 850,889
Continued
135
City of Lake Elsinore, California
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Other Capital Projects Funds - Continued
Year Ended .Tune 30, 2016
REVENUES
Licenses, Permits and Fees
Investment Earnings
Miscellaneous
Total Revenues
EXPENDITURES
Current:
General Government
Public Services
Debt Service:
Principal Retirement
Interest and Fiscal Charges
Total Expenditures
Excess (Deficiency) of Revenues
Over Expenditures
OTHER FINANCING SOURCES (USES)
Transfers In
Transfers Out
Total Other Financing
Sources (Uses)
Net Change in Fund Balances
Fund Balances - Beginning of Year
Fund Balances - End of Year
136
Road Total
Improvement Other Capital
Program Fund TUMF Projects Funds
$ $ $ 948,441
3,281 243,308
24,122 24,122
3,281 24,122 1,215,871
13,918
150 150
205,000
290,687
205,000
290,687
495,837
0 509,755
(492,55(,,)- : - 24,122 706,116
518,064 80,899 801,906
(3,554,364) (19,268) (6,679,792)
(3,036,300) 61,631 (5,877,886)
(3,528,856) 85,753 (5,171,770)
7,727,426 (81058) 18,605,268
$ 4,198,570 $ 1695 $ 13,433,498
City of Lake Elsinore, California
Schedule of Revenues, Expenditures and Changes in Fund Balances
Budget and Actual - Capital Project Fund
Miscellaneous General Projects
Year Ended June 30, 2016
Variance with
Final Budget
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Investment Earnings $ $ $ 29,451 $ 29,451
Total Revenues 0 0 29,451 29,451
EXPENDITURES
Current:
General Government 13,765 (13,765)
Total Expenditures 0 0 13,765 (13365)
Excess (Deficiency) of Revenues
over Expendiriues
0
0
15,686
15,686
OTHER FINANCING SOURCES (USES)
Transfers In
202,943
202,943
Transfers Out
-
(1,481,809)
(1,481,809)
Total Other Financing Sources (Uses)
0
0
(1,278,866)
(1,278,866)
Net Change in Fund Balance
0
0
(1,263,180)
(1,261180)
Fund Balance - Beginning of Year
1,918,492
1,918,492
1,918,492
0
Fund Balance - End of Year
$ 1,918,492
$ 1,918,492
$ 655,312
$ (1,263,180)
137
City of Lake Elsinore, California
Schedule of Revenues, Expenditures and Changes in Fund Balances
Budget and Actual - Capital Projects Fund
Park Improvement and Development
Year Ended June 30, 2016
138
Variance with
Final Budget
Budgeted Amounts
Actual
Positive
Original
Final
Amounts
(Negative)
REVENUES
Licenses, Permits, and Fees
$ 6,980
$ 6,980
$ 16,423
$ 9,443
Investment Earnings
371
371
Total Revenues
6,980
6,980
16,794
9,814
EXPENDITURES
Current:
Community Development
0
Total Expenditures
0
0
0
0
Excess (Deficiency) of Revenues
over Expenditures
6,980
6,980
16,794
9,814
OTHER FINANCING SOURCES (USES)
Transfers Out
(104,126)
(104,126)
(26,850)
77,276
Total Other Financing Sources(Uses)
(104,126)
(104,126)
(26,850)
77,276
Net Change in Fund Balance
111,106
(97,146)
(10,056)
87,090
Fund Balance - Beginning of Year
22,056
22,056
22,056
0
Fund Balance End of Year
$ 133,162
$ (75,090)
$ 12,000
$ 87,090
138
City of Lake Elsinore, California
Schedule of Revenues, Expenditures and Changes in Fund Balances
Budget and Actual - Capital Projects Fund
Street Capital Improvements
Year Ended June 30, 2016
REVENUES
Investment Earnings
Total Revenues
EXPENDITURES
Capital Outlay
Total Expenditures
Excess (Deficiency) of Revenues
over Expenditures
OTDER FINANCING SOURCES (USES)
Transfers Out
Tct,; Gther Financing Sources (Uses)
Net Change in Fund Balance
Fund Balance - Beginning of Year
Fund Balance - End of Year
Budgeted Amounts Actual
Original Final Amounts
$ 50 $ 50 $
50 50
0 0
Variance with
Final Budget
Positive
(Negative)
$ (50)
0 (50)
0
0 0
0 (50)
(50)
(50)
(97)
(47)
(50)
(50)
(97
(47)..
0
0
(97)
(97)
97
97
97
0
$ 97 $
97 $
0
$ (97)
139
City of Lake Elsinore, California
Schedule of Revenues, Expenditures and Changes in Fund Balances
Budget and Actual - Capital Projects Fund
Storm Drains
Year Ended June 30, 2016
140
Variance with
Final Budget
Budgeted Amounts
Actual
Positive
Original
Final
Amounts
(Negative)
REVENUES
Licenses, Permits, and Fees
$ 135,270
$ 135,270
$ 122,451
$ (11819)
Investment Earnings
76,038
76,038
Total Revenues
135,270
135,270
198,489
63,219
EXPENDITURES
General Government
153
(153)
Total Expenditures
0
0
153
(153)
Excess (Deficiency) of Revenues
over Expenditures
135,270
135,270
198,336
63,066
OTHER FINANCING SOURCES (USES)
Transfers Out
(900,000)
(900,000)
(1,231,000)
(331,000)
Total Other Financing Sources (Uses)
(900,000)
(900,000)
(1,231,000)
(331,000)
Net Change in Fund Balance
(764,730)
(764330)
(1,032,664)
(267,934)
Fund Balance - Beginning of Year
3,434,451
3,434,451
3,434,451
0
Fund Balance End of Year
$ 2,669,721
$ 2,669,721
$ 2,401,787$
(267,934)
140
City of Lake Elsinore, California
Schedule of Revenues, Expenditures and Changes in Fund Balances
Budget and Actual - Capital Projects Fund
Library Capital Improvement
Year Ended .Tune 30, 2016
REVENUES
Licenses, Permits, and Fees
Investment Earnings
Total Revenues
EXPENDITURES
Current:
Conuuunity Services
Total Expenditures
Excess (Deficiency) of Revenues
over Expenditures
OTHER FINANCING SOURCES (USES)
Transfers Out
Total Other Financing Sources (Uses)
Net Change in Fund Balance
Fund Balance - Beginning of Year
Fund Balance End of Year
Variance with
Final Budget
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
$ 66,330 $ 66,330 $ 61,350 $ (4,980)
37,255 37,255
66,330 66,330 98,605 32,275
0
0 0 0 0
66,330 66,330 98,605 32,275
(66,330'), : (66,330) (39,370) 26,960
(66,330) (66,330) (39370) 26,960
0 0 59,235 59,235
1,621,514 1,621,514 1,621,514 0
$ 1,621,514 $L 1,621,514 $ 1,680,749 $ 59,235
141
City of Lake Elsinore, California
Schedule of Revenues, Expenditures and Changes in Fund Balances
Budget and Actual - Capital Projects Fund
Signalization Improvement
Year Ended June 30, 2016
142
Variance with
Final Budget
Budgeted
Amounts
Actual
Positive
Original
Final
Amounts
(Negative)
REVENUES
Licenses, Permits and Fees
$ 18,120
$ 18,120
$
$ (18,120)
Investment Earnings
3
$ 3
Total Revenues
18,120
18,120
3
(18,117)
EXPENDITURES
Capital Outlay
0
Total Expenditures
0
0
0
0
Excess (Deficiency) of Revenues
over Expenditures
18,120
18,120
3
(18,117)
OTHER FINANCING SOURCES (USES)
Transfers Out
(93,504)
(93,504)
(805)
92,699
Total Other Financing Sources (Uses)
- (93,504)_
(93,504)
(805)
92,699
Net Change in Fund Balance
(75,384)
(75,384)
(802)
74,582
Fund Balance - Beginning of Year
802
802
802
0
Fund Balance - End of Year
$ (74,582)
$ (74,582)
$ 0
$ 74,582
142
City of Lake Elsinore, California
Schedule of Revenues, Expenditures and Changes in Fund Balances
Budget and Actual - Capital Projects Fund
Traffic Impact
Year Ended June 30, 2016
REVENUES
Licenses, Permits and Fees
Investment Earnings
Total Revenues
EXPENDITURES
Current:
Public Services
Budgeted Amounts Actual
Original Final Amounts
Variance with
Final Budget
Positive
(Negative)
$ 348,780 $ 348,780 $ 505,055 $ 156,275
76,201 76,201
348,780 348,780 581,256 232,476
0
Total Expenditures
0
0
0
0
Excess (Deficiency) of Revenues
over Expenditures
348,780
348,780
581,256
232,476
OTHER FINANCING SOURCES (USES)
Transfers Out
(374,638)
(374,638)
(119,319)
25 19,
Total Other Financing Sources (Uses)
(374,638)
(374,638)
(119,319)
255,319
Net Change in Fund Balance
(25,858)
(25,858)
461,937
487,795
Fund Balance - Beginning of Year
3,169,559
3,169,559
3,169,559
0
Fund Balance - End of Year
$ 3,143,701
$ 3,143,701
$ 3,631,496 $
487,795
143
City of Lake Elsinore, California
Schedule of Revenues, Expenditures and Changes in Fund Balances
Budget and Actual - Capital Projects Fund
City Fire Protection
Year Ended June 30, 2016
REVENUES
Licenses, Permits and Fees
Investment Earnings
Total Revenues
EXPENDITURES
Current:
Public Services
Total Expenditures
Excess (Deficiency) of Revenues
over Expenditures
OTHER FINANCING SOURCES (USES)
Transfer's Out
Total Other Financing Sources (Uses)
Net Change in Fund Balance
Fund Balance - Beginning of Year
Fund Balance - End of Year
Variance with
Final Budget
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
$ 116,380 $ 116,380 $ 191,969 $ 75,589
2,467 2,467
116,380 116,380 194,436 78,056
El
0
0
0
0
116,380
116,380
194,436
78,056
(116,380)
(116,380)
(202,943)
_ (86,563)
(116,380)
(116,380)
(202,943)
(86,563)
0
0
(8,507)
(8,507)
8,507
8,507
8,507
0
$ 8,507 $
8,507
$ 0
$ (8,507)
144
City of Lake Elsinore, California
Schedule of Revenues, Expenditures and Changes in Fund Balances
Budget and Actual - Capital Project Fund
Public Improvement In -Lieu
Year Ended June 30, 2016
REVENUES
Licenses, Permits and Fees
Investment Earnings
Total Revenues
EXPENDITURES
Cm rent:
Public Services
Total Expenditures
Excess (Deficiency) of Revenues
over Expenditures
OTHER FINANCING SOURCES (USES)
Transfers Out
Total Other Financing Sources (Uses)
Net Change in Fund Balance
Fund Balance - Beginning of Year
Fund Balance - End of Year
Variance with
Final Budget
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
$ 13,400 $ 13,400 $ 51,193 $ 37,793
18,241 18,241
13,400 13,400 69,434 56,034
0
0 0 0 0
13,400 13,400 69,434 56,034
(834,603)
= x(834,603)
(3,967)
830,636
(834,603)
(834,603)
(3,967)
830,636
(821,203)
(821,203)
65,467
886,670
785,422
785,422
785,422
0
$ (35,78])
$ (35,781)$
850,889 $
886,670
145
City of Lake Elsinore, California
Schedule of Revenues, Expenditures and Changes in Fund Balances
Budget and Actual - Capital Project Fund
Road ILnprovement Program Fund
Year Ended June 30, 2016
146
Variance with
Final Budget
Budgeted Amounts
Actual
Positive
Original
Final
Amounts
(Negative)
REVENUES
Investment Earnings
$
$
$ 3,281
$ 3,281
Total Revenues
0
0
3,281
3,281
EXPENDITURES
Current:
Public Services
5,000
150
4,850
Debt Service:
Principal Retirement
205,000
205,000
0
Interest and Fiscal Charges
290,687
290,687
0
Total Expenditures
0
500,687
495,837
4,850
Excess (Deficiency) of Revenues
over Expenditures
0
(500,687)
(492,556)
8,131
OTHER FINANCING SOURCES (USES)
Transfers In
518,064
518,064
Transfers Out
(1,256,825)
(1,256,825)
(3,554,364)
(2,297,539)
Total Other Financing Sources (Uses)
(1,256,825)
(15256,825)
(3,036,300)
(1,779,475)
Net Change in Fund Balance
(1,256,825)
(1,757,512)
(3,528,856)
(1,771,344)
Fund Balance - Beginning of Year
7,727,426
7,727,426
7,727,426
0
Fund Balance - End of Year
$ 6,470,601
$ 5,969,914
$ 4,198,570
$ (1,771,344)
146
City of Lake Elsinore, California
Schedule of Revenues, Expenditures and Changes in Fund Balances
Budget and Actual - Capital Project Fund
TUMF
Year Ended June 30, 2016
REVENUES
Intergovernmental Revenues
Miscellaneous
Total Revenues
EXPENDITURES
Current:
Puhlic Services
Total Expenditures
Excess (Deficiency) of Revenues
over Expenditures
OTHER FINANCING SOURCE,S.(USES) --
Transfers In
'Transfers Out
'Coral Other Financing Sources (Uses)
Net Change in Fund Balance
Fund Balance - Beginning of Year
Fund Balance - End of Year
Variance with
Final Budget
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
$ 1,474,875 $ 1,474,875 $ $ (1,474,875)
24.122 24,122
1,474,875 1,474,875 24,122 (1.450,753)
0
0 0 0 0
1,474,875 1.474,875 24,122 (1,450,753)
80,899 80,899
(1,474,875) (1,474,875) (19,268) 1.45507
(1,474,875) (1,474,875) 61,631 1,536.506
0 0 85,753 85,753
(83,058) (83,058) (83,058) 0
$ (83.058) $ 83.058) $ 1695 $ 85,753
147
City of Lake Elsinore, California
Schedule of Revenues, Expenditures and Changes in Fund Balances
Budget and Actual - Capital Projects Fund
Assessment Districts
Year Ended June 30, 2016
148
Variance with
Final Budget
Budgeted Amounts
Actual
Positive
Original
Final
Amounts
(Negative)
REVENUES
Investment Earnings
$
$
$ 5,161
$ 5,161
Contributions from Property Owners
2.557,860
2.557.860
Total Revenues
0
0
2,563,021
2,563.021
EXPENDITURES
Current:
Community Development
167,559
(167,559)
Capital Outlay
6.662,949
(6,662,949)
Total Expenditures
0
0
6.830.508
(6.830.508)
Excess (Deficiency) of Revenues
over Expenditures
0
0
(4.267.487)
(4.267,487)
OTHERFINANCINC SOURCES(USES)
--
Transfers Out
(6,994,131)
(6.994.131)
Total Other Financing Sources (Uses)
0
0
(6,994.131)
(6,994.131)
Net Change in Fund Balance
0
0
(11,261,618)
(11,261,618)
Fund Balance - Beginning of Year
12.234,421
12,234,421
12.234.421
0
Fund Balance - End of Year
$ 12.234,421
$ 12,234,421
$ 972,803
$ (11,261,618)
148
City of Lake Elsinore, California
Schedule of Revenues, Expenditures and Changes in Fund Balances
Budget and Actual - Capital Project Fund
Capital Improvement Plan
Year Ended June 30, 2016
149
Variance with
Final Budget
Budgeted Amounts
Actual
Positive
Original
Final
Amounts
(Negative)
REVENUES
Intergovernmental Revenues
$
$
$ 1,952,572
$ (1,952,572)
Contributions from Property Owners
202,620
(202,620)
Miscellaneous
8,160
(8,160)
Total Revenues
0
0
2.163.352
2,163,352
EXPENDITURES
Capind Outlay
48.052,760
13,443,289
34,609,471
Total E'xpendihnes
0
48,052760
13,443,289
34.609.471
Excess (Deficiency) of Revenues
over Expenditures
0
(48,052.760)
(11.279.937)
36.772,823
_ OTHERFINANCINGSOURCES (USES)
._ ;..
Transfers In
13,101,591
13,101,591
Total Other Financing Sources (Uses)
0
0
13.101591
13,101.591
Net Change in Fund Balance
0
(48,052,760)
1,821,654
49,874,414
Fund Balance - Beginning
(939,546)
(939,546)
(939,546)
0
Fund Balance - End of Year
$ (939.546)
$ (48,992,306)
8882,108
$ 49.874,414
149
City of Lake Elsinore, California
Permanent Fund
June 30, 2016
Endowment Trust - to account for assets held by the City as a trustee capacity for the Adolph Korn Estate. Money is held for
the propose of building a nurses home for a proposed hospital within the City. Until that time, interest earnings from the
estate are used as a scholarship fund for college tuition for students seeking a degree in the nursing field.
150
City of Lake Elsinore, California
Schedule of Revenues, Expenditures and Changes in Fund Balances
Budget and Actual - Permanent Fund
Endowment Trust
Year Ended June 30, 2016
REVENUES
Investment Earnings
Total Revenues
EXPENDITURES
Current:
General Government
Total Expenditures
Excess (Deficiency) of Revenues
Over Expenditures
Fund Balance - Beginning of Year
Fund Balance - End of Year -
Variance with
Final Budget
Budgeted Amounts Actual Positive
Original Final Amounts (Negative)
$ 100 $ 100 $ 339 $ 239
100 100 339 239
0
0
0
0
0
100
100
339
239
31,008
31,008
31.008
0
31,108 $
31,108 $
31,347 $
239
151
City of Lake Elsinore, California
Internal Service Funds
June 30, 2016
Internal service funds are used to account for services provided to other departments or agencies of the government, or to
other governments on a cost -reimbursement basis.
Insurance Fund - this fund is used to finance and account for the City's risk management and insurance programs.
Info Systems Fund - this fund is used to account for the cost of providing electronic data processing equipment, software and
central telephone services.
Support Services Fund - this fund is used to account for the cost of proving central mailing and reprographic services.
Fleet Services Fund - this fund is used to account for the replacement of the City's vehicles.
Facilities Fund - this fund is used to account for the operations and maintenance of City Hall and the City's maintenance
facilities.
152
City of Lake Elsinore, California
Combining Statement of Net Position
Internal Service Funds
,Tune 30, 2016
ASSETS
Current Assets:
Cash and Cash Equivalents
Accounts Receivable
Accrued Interest Receivable
Prepaid Items
Total Current Assets
Noncurrent Assets:
Capital Assets, Net of Depreciation
Total Noncurrent Assets
Total Assets
DEFERRED OUTFLOWS OF RESOURCES
Pension Related Items
Total Deferred Outflows of Resources
LIABILITIES
Current Liabilities:
Accounts Payable
Other Accrued Liabilities
Total Current Liabilities
Total Liabilities
NET POSITION
Net Investment in Capital Assets
Unrestricted
Total Net Position
Support
Insurance Info Systems Services Fleet Services
$ 302,886 $ 133,007 $ 14,554 $ 158,201
1,281
1,018
466,535
769,421 133,007 15,572 159,482
39,280 9,895 341,947
0 39,280 9,895 341,947
769,421 172,287 25,467 501,429
35,076 40,979
0 - "35,076 0 40,979
153
7,707
5,416
31,244
7,887
2,221
0
15,594
5,416
33,465
0
15,594
5,416
33,465
39,280
9,895
341,947
769,421
152,489
10,156
166,996
$ 769,421
$ 191,769 $
20,051
$ 508,943
153
Peril ;tire Tntnl
$ 718,776 $ 1,327,424
1,281
1,018
d(,(, 5"35
718,776 1,796,258
391,122
0 391,122
71 R 77(. 7 I R7 IRA
14,685 90,740
14,685 90,740
7,900 52,267
1,893 12,001
0 701 (,d 9/,R
9,793 64,268
391,122
791 h/,R 1 R99 71n
$ 723,668 $ 2,213,852
154
City of Lake Elsinore, California
Combining Statement of Revenues, Expenses and Changes in Net Position
Internal Service Funds
Year Ended June 30, 2016
155
Support
Insurance
Info Systems
Services
Fleet Services
OPERATING REVENUES
Charges for Services
$ 894,978
$ 794,667
$ 97,738
$ 530,620
Other Revenues
30,601
Total Operating Revenues
894,978
794,667
97,738
561,221
OPERATING EXPENSES
Personnel Services
197,359
347,880
174,117
Contractual Services
238
37,349
28,594
13,374
Utilities
104,099
Maintenance and Operation
219,888
50,370
246,021
Insurance
377,960
Depreciation
3,223
900
18,032
Total Operating Expenses
575,557
712,439
79,864
451,544
Operating Income (Loss)
319,421
82,228
17,874
109,677
NONOPERATING REVENUES
(EXPENSES)
-
Investment Earnings
2,177
Intone (Loss) Before Transfers
319,421
82,228
20,051
109,677
Transfers In
450,000
109,541
399.266
Change in Net Position
769,421
191,769
20,051
508,943
Net Position - Beginning of Year
0
0
0
0
Net Position - End of Year
$ 769 421
$ 191,769
$ 20,051
$ 508,943
155
r --:c.:,,,. r_._,
$ 341,779 $ 2,659,782
30,601
341,779
75,738
78,983
83,196
70,090
o cnn 101
795,094
158,538
187,295
586,369
377,960
22,155
308,007 2,127,411
33,772 562,972
156
2,177
33,772
565,149
689,896
1,648,703
723,668
2,213,852
0
0
$ 723,668
$ 2,213,852
156
City of Lake Elsinore, California
Combining Statement of Cash Flows
Internal Service Funds
Year Ended June 30, 2016
CASH FLOWS FROM OPERATING ACTIVITIES
Cash Received from Customers and Users
Cash Payments to Employees for Services
Cash Payments to Suppliers for Goods and Services
Other Receipts
Net Cash Provided by (Used for) Operations
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES
Advances from (to) Other Funds
Net Cash Provided by (Used for) Noncapital
Financing Activities
CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES
Acquisition of Capital Assets
Net Cash Provided by (Used for) Capital and
Related Financing Activities
CASH FLOWS FROM INVESTING ACTIVITIES
Interest on Investments
Net Cash Provided by (Used for) Investing Activities
Net Increase (Decrease) in Cash and Cash Equivalents
Cash Equivalents
Cash and Equivalents - Beginning of Year
Cash and Equivalents - End of Year
157
Support
Insurance Info Systems Services
$ 894,978 $ 794,667 $ 97,738
(197,359) (382,956)
(844,733) (345,742) (73,548)
(147,114) 65,969 24,190
450,000 109,541
450,000 109,541 0
(42,503) (10,795)
0 (42,503) (10,795)
1,159
0 0 1,159
302,886 133,007 14,554
0 0 0
$ 302,886 $ 133,007 $ 14,554
Fleet Services Facilities Total
$ 529,339 $ 341,779 $ 2,658,501
(215,096) (88,530) (883,941)
(225,930) (224,369) (1,7141322)
30,601 30,601
118,914 28,880 90,839
399,266 689,896 1,648,703
399,266 689,896 1,648,703
(359,979) (413,277)
(359,979) 0 (413,277)
1,159
0 0 1,159
158,201 718,776 1,327,424
0 0 0
$ 758,201 $ 718,776 $ 1,327,424
Continued
158
City of Lake Elsinore, California
Combining Statement of Cash Flows - Continued
Internal Service Funds
Year Ended June 30, 2016
Reconciliation of Operating Income (Loss) To Net
Cash Provided by (Used for) Operating Activities
Operating Income (Loss)
Adjustments to Reconcile Operating Income to
Net Cash Provided (Used) by Operating Activities:
Depreciation
Changes in Operating Assets and Liabilities:
Accounts Receivable (Increase)
Prepaid Items (Increase)
Pension Related Deferred Outflows (Increase)
Accounts Payable (Decrease)
Other Accrued Liabilities (Decrease)
NET CASH PROVIDED BY (USED FOR) OPERATING
ACTIVITIES
159
Support
Insurance Info Systems Services
$ 319,421 $ 82,228 $ 17,874
3,223 900
(466,535)
(35,076)
7,707 5,416
7,887
$ (147,114) $ 65,969 $ 24,190
Fleet Services Facilities Total
$ 109,677 $
33,772
$ 562,972
18,032
22,155
(1,281)
(1,281)
(466,535)
(40,979)
(14,685)
(90,740)
31,244
7,900
52,267
2,221
1,893
12,001
$ 118,914 $
28,880
$ 90,839
160
City of Lake Elsinore, California
Agency Funds
June 30, 2016
Developer Deposit Trust - to account for receipts of deposits paid by Developers
Assessment Districts - to account for receipts of special assessments and taxes that will be used to pay interest and principal
on Community Facilities and Assessment Districts bonds.
Lake Maintenance - to account for receipts made by Elsinore Valley Municipal Water District and the City to jointly fund the
purchase of water to keep the lake level stabilized.
Destiatificatimn Equipment Replacement Fund - to account for receipts made by Elsinore Valley Municipal Water District,
Riverside County and the City to replace equipment for the axial flow pump destnatification system in the lake.
161
City of Lake Elsinm•e, California
Combining Statement of Fiduciary Assets and Liabilities
Agency Funds
June 30, 2016
162
Developer
Destratifieation
Total
Deposit
Assessment
Lake
Equipment
Agency
Trust
Districts
Maintenance
Replacement
Funds
ASSETS
Cash and Investments
$ 5,320,039
$ 1,658,311
$
$ 231,416
$ 7,209,766
Cash and Investments with
Fiscal Agent
21,880,362
559,028
22,439,390
Accrued Interest Receivable
16,511
677
17,188
Due from Other Governments
339,095
339,095
Deposits with Other Agencies
17,150,518
17,150,518
Total Assets
$ 5,320,039
$ 41,044,797
$
559,028
$ 232,093
$ 47,155,957
LIABILITIES
Accounts Payable
$
$ 63372
$
$
$ 63,372
Deposits and Other Liabilities
1,4697748
257,092
559,028
232,093
2,517,961
Due to Other Governments
3,850,291
3,850,291
Due to Bondholders
40,724333
40,724,333
Total Liabilities
$ 5,320,039
$ 41,044,797
$
559 028
$ 232,093
$ 47,155,957
162
City of Lake Elsinore, California
Combining Statement of Changes in Assets and Liabilities
Agency Funds
Year Ended June 30, 2016
Beginning
Balance
Additions
Ending
Deletions Balance
DEVELOPER DEPOSIT TRUST
ASSETS
Cash and Investments $ 1,407,674 $ 3,912,365 $ $ 5,320,039
'Dotal Assets
LIABILITIES
Accounts Payable
Deposits and Other Liabilities
Due to Other Governments
Total Liabilities
ASSESSMENT DISTRICTS
ASSET'S
Cash and Investments
Cash and Investments with Fiscal Agent
Accrued interest Receivable
Due from Other Governments
Deposits with Other Agencies
't'olal Assets
LIABILrrlES
Accounts Payable
Deposits and Other Liabilities
Due to Bondholders
Total Liabilities
LAKE MAINTENANCE
ASSETS
Cash and Investments with Fiscal Agent
Total Assets
LIABILITIES
Deposits and Other Liabilities
Total Liabilities
$ 1,407,674 $ 3,912,365 $ 0 $ 5320.039
$ 53,775 $ $ 53,775 $
1,353,899 115,849 1,469,748
3,850,291 3,850,291
$ 1,407,674 $ 3,966,140 $ 53,775 $ 5,320,039
$ 3,572,178
$ 33,644,022
$ 35,557,889
$ 1,658,311
15,561,508
25,672,948
19354,094
21,880,362
8,722
16,510
8,721
16,511
0
339,095
339,095
15,898,020
17,829,495
16,5767997
17,150.518
_$L 35,040,428
$ 77,502,070
$ 71,497.701$
41.044 797
$ 81,020
$ 20,095,364
$ 20,113,012
$ 63,372
123,931
11,435,202
11,302,041
257,092
34,835,477
105,773,963
99,885,107
40,724,333
$ 35,040,428 $ 137,304,529 $ 131,300.160 $ 41,044,797
$ 459,427 $ 99,601 $ $ 559,028
$ 459,427 $ 99,601 $ 0 $ 559,028
$ 459,427 $ 99,601 $
$ 459,427 $ 99,601 $
163
$ 559,028
0 $ 559,028
City of Lake Elsinore, California
Combining Statement of Changes in Assets and Liabilities
Agency Funds - Continued
Year Ended June 30, 2016
Beginning
Balance
Additions
Ending
Deletions Balance
DESTRATIFICATION EQUIPMENT
ASSETS
Cash and Investments
$
160,884
$
70,532
$
$
231,416
Accrued Interest Receivable
500
177
677
Due from Other Governments
16,667
16,667
0
Total Assets
$
178,051
$
70,709
$
16,667
$
232,093
LIABILITIES
Deposits and Other Liabilities
$
178051
$
70,709
$
16,667
$
232,093
Total Liabilities
$
178,051
$
70,709
$
] 6,667
$
232 093
TOTAL - ALL AGENCY FUNDS
ASSETS
Cash and Investments
$
5.140.736
$
37,626,919
$
35,557,889
$
7,209,766
Cash and Investments with Fiscal Agent
16,020,935
25,772,549
19,354,094
22,439,390
Accrued Interest Receivable
9,222
16,687
8,721
17,188
Due from Other Governments"
16,667
339,095
16,667
'339,095
Deposits with Other Agencies
15,898.020
17,829,495
16.576.997
17,150,518
Total Assets
$
37,085,580
$
81,584,745
$
71,514,368
$
47,155,957
LIABILITIES
Accounts Payable
$
134,795
$
24095,364
$
20,166,787
$
63,372
Deposits and Other Liabilities
2,115,308
11,721,361
11,318,708
2,517,961
Due to Other Governments
0
3.850,291
3,850,291
Due to Bondholders
34,835,477
105373,963
99,885,107
40.724.333
Total Liabilities
$
37,085580
$
141,440,979
$
131,370,602
$
47,155,957
164
Emphasis of Matter
Change in Accounting Principle
As described in Note 1 to the financial statements, in 2016, the Authority adopted new accounting guidance, GASB
Statement No. 72, Fair Value Measurement and Application. Our opinion is not modified with respect to this matter
Other Matters
Required Supplementaiy Information
Management has omitted Management's Discussion and Anal.Ysis that accounting principles generally accepted in the United
States of America require to be presented to supplement the basic financial statements. Such missing information, although
not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to
be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic,
or historical context. Our opinion on the basic financial statements is not affected by this missing information.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the
Authority's basic financial statements. The supplementary schedules are presented for the purpose of additional analysis and
is not a required part of the basic financial statements.
The supplementary schedules are the responsibility of management and was derived from and relate directly to the underlying
accounting and other records used to prepare the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including
comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic
financial statements or to the basic financial statements themselves, and other additional procedures in accordance with
auditing standards generally accepted in the United States of America. In our opinion, the supplementary schedules are fairly
stated and all material respects in relation to the basic financial statements as a whole.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated December 30, 2016, on our
consideration of the City of Lance Elsinore's internal control over financial reporting and on our tests of its compliance with
certain provisions of laws, regulations, contracts, and grant agrcements and other matters. The purpose of that report is to
describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and
not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an
audit performed in accordance with Government Auditing Standards in considering the Authority's internal control over
financial reporting and compliance.
Riverside, California
December 30, 2016
BASIC COMPONENT UNIT FINANCIAL STATEMENTS
Lake Elsinore Public Financing Authority
Statement of Net Position
June 30, 2016
ASSETS
Cash and Investments
Cash and Investments with Fiscal Agent
Interest Receivable
Loans Receivable from Successor Agency
Interest Receivable from Successor Agency
Prepaid Items
Total Assets
DEFERRED OUTFLOWS OF RESOURCES
Deferred Charges on Refunding
Total Deferred Outflows of Resources
LIABILITIES
Deposits Payable
Interest Payable
Noncurrent Liabilities:
Due Within One Year
Due in More Than One Year
Total Liabilities
NET POSITION
Unrestricted
Total Net Position
The accompanying notes are an integral part ofthis statement.
3
Governmental
Activities
$ 502,537
215,703,623
2,896,549
44,705,000
645,959
18,787
264,472,455
2,727,695
2,727,695
23,880,964
3,542,061
7,420,000
233,219,833
268,062,858
(862,708)
$ 862,708)
This page intentionally left blank
Lake Elsinore Public Financing Authority
Statement of Activities
Year Ended .Tune 30, 2016
General Revenues:
Investment Earnings
Total General Revenues
Change in Net Position
Net Position, Beginning of Year - As Previously Reported
Prior Period Adjustments
Net Position, Beginning of Year - As Restated
Net Position, End of Year
The accompanying notes are an integral part of this statement.
4
(109,315)
(109,315)
(136,260)
586,092
(1,312,540)
(726,448)
$ (862,708)
Program Revenues
Charges Operating Capital
Net
for Grants and Grants and
(Expense)
Functions/Programs
Expenses
Services Contributions Contributions
Revenue
Governmental Activities:
General Government
$ 26,945
$ $ $
$ (26,945)
Interest on Long-term Debt
10,369,900
10,369,900
0
Total Governmental Activities
$ 10,396,845
$ 0 $ 10,369,900 $ 0
(26,945)
General Revenues:
Investment Earnings
Total General Revenues
Change in Net Position
Net Position, Beginning of Year - As Previously Reported
Prior Period Adjustments
Net Position, Beginning of Year - As Restated
Net Position, End of Year
The accompanying notes are an integral part of this statement.
4
(109,315)
(109,315)
(136,260)
586,092
(1,312,540)
(726,448)
$ (862,708)
Lake Elsinore Public Financing Authority
Balance Sheet
Governmental Funds
June 30, 2016
ASSETS
Cash and Investments
Cash and Investments with Fiscal Agent
Interest Receivable
Loans Receivable from Successor Agency
Prepaid Items
Total Assets
LIABILITIES
Deposits Payable
Total Liabilities
FUND BALANCES
Nonspendable for Prepaid Items
Restricted for Debt Service
Total Fund Balances
Total Liabilities and Fund Balances
Debt Service
2008 2010 2010
General Series A Series A Series C
Fund LARB TAB TAB
$ 93,402 $
83
1,990,239
13,170,000
3,333,288
24,075,000
$ 93,485 $ 0 $ 15,160,239 $ 27,408,288
$ $ 1,990,238 $ 3,333,286
0 0 1,990,238 3,333,286
93,485 13,170,001 24,075,002
93,485 0 13,170,001 24,075,002
$ 93,485 $ 0 $ 15,160,239 $ 27,408,288
The accompanying notes are an integral part of this statemcnt.
5
Debt Service
2012 2014 2015 Other Total
Series B Series B Series Governmental Governmental
LARB LARB LARB Funds Funds
$ $ $ $ 409,135 $ 502,537
15,319,291 19,972,430 125,186,078 49,902,297 215,703,623
364 447
7,460,000 44,705,000
18,787 18,787
$ 15,319,291 $ 19,972,430 $ 125,186,078 $ 57 790,583 $ 260,930,394
$ 1,644,247 $ 1,689,409 $ 9,268,335 $ 5,955,449 $ 23,880,964
1,644,247 1,689,409 9,268,335 5,955,449 23,880,964
18,787 18,787
]3,675,044 18,283,021 115,917,743 51,816,347 237.030,643
13,675,044 18,283,021 115,917,743 51,835,134 237,049,430
$ 15,319,291 $ 19,972,430 $ 125,186,078 $ 57,790,583 $ 260,930,394
The accompanying notes are an integral part of this statement.
6
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Lake Elsinore Public Financing Authority
Reconciliation of the Balance Sheet of the Governmental Funds to the
Statement of Net Position
Tune 30, 2016
Fund Balances for Governmental Funds
Amounts reported for governmental activities in the statement of activities are different because:
Long-term assets are not available to pay for current period expenditures and, therefore,
are not reported in the fund financial statements.
Interest Receivable on Investments
Interest Receivable from Successor Agency
Long-term liabilities and related items are not due and payable in the current period and
are not reported as fund liabilities. Interest on long-term liabilities is not accrued in
governmental funds, but rather is recognized as an expenditure when due. All liabilities,
both current and long-term, are reported in the Statement of Net Position.
Interest Payable
Deferred Amount on Refunding
Bond Premiums
Bond Discounts
Long-term Liabilities
Net Position of Governmental Activities
'rhe accompanying notes are an integral part of this statement.
$ 237,049,430
2,896,102
645,959
(3,542,061)
2,727,695
(11,328,236)
628,403
(229,940,000)
_L__1862.708
Lake Elsinore Public Financing Authority
Statement of Revenues, Expenditures, and Changes in Fund Balances
Governmental Funds
Year Ended June 30, 2016
REVENUES
Investment Earnings
Total Revenues
EXPENDITURES
Current:
Professional Services
Debt Service:
Bond Issuance Costs
Principal Retirement
Payment to Escrow Agent
Interest and Fiscal Charges
Total Expenditures
Excess (Deficiency) of Revenues
Over Expenditures
SPECIAL ITEM
Gain (Loss) on Loans Receivable
Net Change in Fund Balances
Fund Balances, Beginning of Year -
As Previously Reported
Prior Period Adjustment
Fund Balances, Beginning of Year -
As Restated
Fund Balances, End of Year
Debt Service
2008 2010 2010
General Series A Series A Series C
Fund LARB TAB TAB
$ 254 $ 8 $ 651,103 $ 981,190
254 8 651,103 981,190
3,588
330,000 1,215,000
651,106 994,403
0 3,588 981,106 2,209,403
254 (3580) (330,003) (1,228,213)
254 (3,580) (330,003) (1,228,213)
93,231 3,580 13,500,004 25,303,215
93,231 3,580 13,500,004 25,303,215
$ 93,485 $ 0 $ 13,170,001 $ 24,075,002
"Ihe acccompany notes arc an integral part of this statement.
8
Debt Service
2012 2014 2015 Other Total
Series B Series B Series Governmental Governmental
LARB LARB LARB Funds Funds
$ 672,069 $ 780,548 $ 4,517,427 $ 2,636,117 $ 10,238,716
672,069 780,548 4,517,427 2,636,117 10,238,716
7,402 10,990
6,515 6,515
630,000 260,000 1,660,000 2,495,000 6,590,000
982,386 982,386
654,413 807,687 4,939,072 2,583,819 10,630,500
1,284,413 1,067,687 6,599,072 6,075,122 18,220,391
(612,344) (287,139) (2,081,645) (3,439,005) (7,981,675)
(7,319,955) (7,319,955)
(612,344) (287,139) (2,081,645) (10,758,960) (15,301,630)
14,742,803 18,570,160 117,999,388 63,451,219 253,663,600
(455,415) (857,125) (1,312,540)
14,287388 18,570,160 117,999,388 62,594,094 252,351,060
$ 13,675,044 $ 18,283,021 $ 115,917,743 $ 51,835,134 $ 237,049,430
'I lie acecompany notes are an integral partotthis statement.
9
Lake Elsinore Public Financing Authority
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances
of Governmental Funds to the Statement of Activities
Year Ended June 30, 2016
Net change in fund balances -total governmental funds $ (15,301,630)
Amounts repotted for governmental activities in the Statement of Activities are different because:
The issuance of long-term debt provides current financial resources to governmental
funds, while the repayment of the principal of long-term debt consumes the current
financial resources of governmental funds. Neither transactions, however, has any
effect on net position. These amounts are the net effect of these differences in the
treatment of long-term debt.
Payment to Refunding Bond Escrow Agent
Gain (Loss) on Loans Receivable
Governmental fiords report the effect of premiums, discounts, and similar items when
debt is first issued, whereas these amounts are deferred and amortized in the
Statement of Activities.
Amortization of Bond Premiums
Amortization of Bond Discounts
Amortization of Deferred Charges on Refunding
Some expenses reported in the Statement of Activities do not require the use of
current financial resources and are not reported as governmental fund expenditures.
Interest and Fiscal Charges
Revenues in the Statement of Activities that do not provide current financial
resources are not reported as revenues in the governmental funds.
Investment Earnings
Change in Net Position of Governmental Activities
The accompanying notes are an integral part of this statement.
10
982,386
7330,515
569,751
(43,898)
(243,384)
(21,869)
21,869
$(136,260)
Lake Elsinore Public Financing Authority
Notes to Financial Statements
Year Ended June 30, 2016
NOTE DESCRIPTION
1 Repaling Entity and Summary of Significant Accounting Policies
2 Cash and Investments
3 Fair Value Measurements
4 Loans Receivable
5 Long-term Liabilities
6 Liability, Property and Protection
7 Contingencies
8 Special Item
9 Prior Period Adjustment
PACE
12- 15
15- 19
20
21
22-33
33 -35
35
35
35
Lake Elsinore Public Financing Authority
Notes to Financial Statements
Year Ended June 30, 2016
1) REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A) Reporting Entity
The Lake Elsinore Public Financing Authority (the "Authority") is a joint exercise of powers between the City of Lake
Elsinore (the "City") and the Lake Elsinore Redevelopment Agency (the "Agency"), created by a joint power
agreement dated July 25, 1989. On February 1, 2012, the Lake Elsinore Redevelopment Agency was dissolved by
legislation from the California State Legislature and a decision by the California Supreme Court. The City of Lake
Elsinore is the Successor Agency of the Lake Elsinore Redevelopment Agency which oversees the remaining activities
of the former Lake Elsinore Redevelopment Agency. The purpose of the Authority is to provide financing for public
capital improvements for the City and the former Redevelopment Agency, the acquisition by the Authority of such
public capital improvements and/or the purchase by the Authority of local obligations within the meaning of the Bond
Law under the Marks -Roos Bond Pool Act of 1985. Under the Bond Law, the Authority has the power to issue special
revenue bonds to pay the cost of any public capital improvement.
The Authority office and records are located at City Hall at 130 South Main Street, Lake Elsinore, California.
The Authority is a component unit of the City of Lake Elsinore and, accordingly, the financial statements of the
Authority are included in the financial statements of the City. The Authority is an integral part of the reporting entity of
the City. The funds of the Authority have been blended within the financial statements of the City because the City
Council of the City of Lake Elsinore is the governing board of the Authority and exercises control over the operations
of the Authority. Only the funds of the Authority are included herein, therefore, these financial statements do not
purport to represent the financial position o'results of operations of the City of Lake Elsinore.
B) Implementation of Governmental Accounting Standards Board (GASB) Pronouncements
Governmental Accounting, Standard Board Statement No. 72
In February of 2015, GASB issued Statement No. 72, Fair Value Measurement and Application. This Statement
addresses accounting and financial reporting issues related to fair value measurements. The definition of fair value is
the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date. This Statement provides guidance for determining a fair value measurement for
financial reporting purposes. This Statement also provides guidance for applying fair value to certain investments and
disclosures related to all fair value measurements. Statement No. 72 is effective for periods beginning after June 15,
2015. The Authority implemented GASB No. 72 and is reflected on the Authority's financial statements.
C) Basis of Presentation
The accounting policies of the Authority conform to accounting principles generally accepted in the United States of
America as they are applicable to governmental units. The Governmental Accounting Standard Board (GASB) is the
accepted standard setting body for establishing governmental accounting and financial reporting principles.
Government -wide Financial Statements: The Government -wide financial statements (i.e., the Statement of Net
Position and the Statement of Activities) repot information on all of the nonfidueiary activities of the primary
government (the Authority). Governmental activities, which normally are supported by income and intergovernmental
revenues, are reported separately form business -type activities, which rely to a significant extent on fees and charges
for support. All Authority activities are governmental; no business -type activities are reported in the statements.
12
Lake Elsinore Public Financing Authority
Notes to Financial Statements
Year Ended June 30, 2016
1) REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -Continued
C) Basis of Presentation - Continued
The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segment are
offset by program revenues. Direct expenses are expenses that are clearly identifiable with a specific program, project,
function or segment. Program revenues of the Authority include: 1) charges to customers or applicants who purchase,
use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and
contributions that are restricted to meeting the operational or capital requirements of a particular function or segment.
Taxes and other items that are properly not included among program revenues are reported instead as general revenues.
Separate fund financial statements are provided for governmental funds. Major individual governmental finds are
reported as separate columns in the fund financial statements. All remaining governmental funds are aggregated and
reported as other governmental funds.
D) Measurement Focus, Basis of Accounting, and Financial Statement Presentation
The government -wide financial statements are reported using the economic resources measurement focus and the
accrual basis of accounting. Under the economic resources measurement focus, all assets, liabilities and deferred
inflows/outflows of resources (whether current or noncurrent) associated with their activity are included on their
balance sheets. Operating statements present increases (revenues) and decreases (expenses) in total net position.
Under the accrual basis of accounting, revenues are recorded when earned and expense are recorded when a liability is
incurred, regardless of the noting of related cash flows.
Governmental fund financial statements are reported using the current financial resources measurement focus and the
rnoebfled accrual basis of accounting. Under the current financial resources measurement focus, only current assets
and current liabilities are generally included on their balance sheets. The reported fund balance (net current assets) is
considered to be a measure of "available spendable resources". Governmental fund operating statements present
increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current
assets. Accordingly, they are said to present a summary of sources and uses of"available spendable resources" during
a period.
Under the modified accrual basis of accounting, revenues are considered to be available when they are collectible
within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the
government considers revenues to be available if they are collected within 60 days of the end of the current fiscal
period. Expenditures generally are recorded when a liability is incurred, except for principal and interest on long -tern
liabilities which are recognized as expenditures to the extent they have matured. Proceeds of long -tern liabilities are
reported as other financing sources.
Interest associated with the current fiscal period is considered to be susceptible to accrual, and are therefore recognized
as revenues of the current fiscal period.
13
Lake Elsinore Public Financing Authority
Notes to Financial Statements
Year Ended June 30, 2016
1) REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
D) Measurement Focus, Basis of Accounting, and Financial Statement Presentation - Continued
The Authority reports the following major governmental funds:
The following Debt Service Funds are used to account for the accumulation of resources for, and the repayment of,
long-term debt principal, interest and related costs: 2008 Series A Local Agency Revenue Bonds, 2010 Series A
Tax Allocation Bonds, 2010 Series C Tax Allocation Bonds, 2012 Series B Local Agency Revenue Bonds, 2014
Series B Local Agency Revenue Bonds and the 2015 Series Local Agency Revenue Bonds.
As a general rule, the effect of inter -fund activity has been eliminated from the government -wide financial statements.
Direct expenses have not been eliminated from the functional categories; indirect expenses and internal payments have
been eliminated.
When both restricted and unrestricted resources are available for use, it is the Authority's policy to use restricted
resources first, and then use unrestricted resources as they are needed.
E) Investments
Investments are reported at fair value, except for the investment in local obligations, which are reported at cost, because
the investments are not transferable and the fair values are not affected by the changes in interest rates. Investment
earnings include interest earnings, changes in fair value, and any gains or losses related to the Iiquidaton or sale of the
investment.
F) Deferred Outflows/Inflows of Resources
In addition to assets, the statement of financial position will sometimes report a separate section for deferred
outflows of resources. This separate financial statement element, deferred outflows of resources, represents a
consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of
resources (expense/expenditure) until then. The government only has one item that qualifies for reporting in this
category. It is the deferred charges on refunding reported in the government -wide statement of net position. A
deferred charge on refunding results from the difference in the carrying value of refunded debt and its reacquisition
price. This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt.
In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred
inflows of resources. This separate financial statement element, deferred inflows of resources, represents an
acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources
(revenue) until that time. Currently, the Authority does not report any deferred inflows of revenues.
G) Net Position
GASB No. 63 requires that the difference between assets, liabilities and deferred outflows/inflows of resources be
reported as net position. Net position is classified as either net investment in capital assets, restricted, or
unrestricted.
14
Lake Elsinore Public Financing Authority
Notes to Financial Statements
Year Ended June 30, 2016
1) REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
G) Net Position - Continued
Net position classified as net investment in capital assets consists of capital assets, net of accumulated depreciation
and reduced by the outstanding principal of related debt. Restricted net position is the net position that has external
constraints placed on them by creditors, grantors, contributors, laws, or regulations of other governments, or through
constitutional provisions, or enabling legislation. Unrestricted net position consists of net position that does not
meet the definition of net investment in capital assets or restricted net position.
H) Fund Balance
In the governmental fund financial statements, governmental fund types report nonspendable and restricted fund
balance for amounts that are not available for appropriation or are legally restricted by outside parties for use fou a
specific purpose.
1) Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United
States of America requires management to make estimates and assumptions that affect the repotted amounts of assets
and liabilities, deferred outflows/inflows of resources, and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenditures/expenses during the reported period.
Actual results could differ from those estimates.
2) CASHANDINVESTMENTS
Cash and Investments are classified in the accompanying financial statements as follows:
Statement of Net Position:
Cash and Investments
Cash and Investments with Fiscal Agent
Total Cash and Investments
Cash and investments consist of the following:
City of Lake Elsinore Investment Pool
Local Agency Investment Fund (LAIF)
Investments with Fiscal Agency
Total Cash and Investments
15
$ 502,537
215,703,623
$__216.206 160
$ 172,550
329,987
215,703 623
216.206 160
Lake Elsinore Public Financing Authority
Notes to Financial Statements
Year Ended June 30, 2016
2) CASH AND INVESTMENTS - Continued
Investments Authorized by the California Government Code and the Authority's Investment Policy
The table below identifies the investment types that are authorized for the Authority by the Authority's investment policy.
The table also identifies certain provisions of the California Government Code (or the Authority's investment policy, where
more restrictive) that address interest rate risk, credit risk, and concentration of credit risk. This table does not address
investments of debt proceeds held by bond trustee that are governed by the provisions of debt agreements of the Authority,
rather than the general provisions of the California Government Code or the Authority's investment policy.
Authorized Maximum
Investment Type _ Maturit
U.S. Treasury Obligations
U.S. Agency Securities
State and Local Agency Obligations
Banker's Acceptances
Insured or Collateralized Time
Certificate of Deposits
Commercial Paper
Negotiable Certificates of Deposit
Repurchase Agreements --
Reverse Repurchase Agreements
Medium -Term Corporate Notes
Local Agency Investment Fund (LAIF)
California Assets Management Program (CAMP)
Money Market Fund
Maximum
Percentage
Of Portfolio*
Maximum
Investment
In One Issuer
5 years
None
None
5 years
None
40%
5 years
None
5%
180 days
40%
10%
5 years
None
5%
270 days
25%
10%
5 years
30%
5%
'e days
None
5%
92 days
10%
5%
5 years
30%
5%
N/A
None
$50,000,000
N/A
None
5%
N/A
20%
5%
*Excluding amounts held by bond trustee that are not subject to California Government Code restrictions.
Investments Authorized by Debt Agreements
Investment of debt proceeds held by bond trustee are governed by provisions of the debt agreements, rather than the general
provisions of the California Government Code or the Authority's investment policy. Investments authorized for funds hold
by bond trustee include, United States Treasury Obligations, United States Government Sponsored Agency Securities,
Guaranteed Investment Contracts, Commercial Paper, Local Agency Bonds, Banker's Acceptance and Money Market
Mutual Funds. There were no limitations on the maxinnun amount that can be invested in one issuer, no ximum percentage
allowed or the maximum maturity of an investment, except for the maturity of Banker's Acceptance which are limited to
one year.
16
Lake Elsinore Public Financing Authority
Notes to Financial Statements
Year Ended June 30, 2016
2) CASH AND INVESTMENTS - Continued
Disclosures Relating to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment.
Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest
rates. One of the ways that the Authority manages its exposure to interest rates risk is by purchasing a combination of
shorter term and longer term investments and by timing cash flows from maturities so that a portion of the portfolio is
maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for
operations.
Information about the sensitivity of the fair values of the Authority's investments to market interest rate fluctuations is
provided by the following table that shows the distribution of the Authority's investments by maturity:
Remaininy, Maturity (in Months)
12 Months 13 to 24 25 to 60 More Than
InvestmentTvue Or Less Months Months 60 Months
City of Lake Elsinore Investment Pool $ 172,550 $ 172,550 $ $ $
LAW 329,987 329,987
Held By Bond Trustee:
Local Obligation Bonds 191,713,139 5,496,082 5,881,082 20,048,244 160,287,731
Money Market Mutual Funds 23.990,484 23,990,484
Total 1216206.160 29.989.103 5.881.082 $ 20,048 244 $ ] 60.287 731
Disclosures Relating to Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment.
This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is
the minimum rating required by (where applicable) the California Government Code or the Authority's investment policy
and the actual rating as of year-end for each investment type.
17
Minimum
Legal
InvestmentType
Rating
AAA Unrated
City of Lake Elsinore Investment Pool
$ 172,550
N/A
$ $ 172,550
LAW
329,987
N/A
329,987
Held By Bond Trustee:
Local Obligation Bonds
191,713,139
N/A
191,713,139
Money Market Mutual Funds
23.990,484
A
23,990,484
Total
$21660
L23 99�0484 LM,; 15.676
17
Lake Elsinore Public Financing Authority
Notes to Financial Statements
Year Ended .Tune 30, 2016
2) CASH AND INVESTMENTS - Continued
Concentration of Credit Risk
The investment policy of the Authority contains no limitations on the amount that can be invested in any one issuer beyond
that stipulated by the California Government Code. Investments in any one issuer (other than U.S. Treasury securities,
mutual funds, and external investment pools) that represent 5% or more of total Authority's investments are as follows:
Investment Type Repotted Amount
AD 93-1, 2012 Series A
Local Agency Bond
$
13,604,374
CFD 98-1, 2013 Series C
Local Agency Bond
$
12,051,208
CPD 2003-2, 2014 Series (Improvement Areas A & C)
Local Agency Bond
$
18,282,696
CFD 2003-2, 2015 Series (Improvement Area B)
Local Agency Bonds
$
27,574,750
CFD 2004-3-1, 2015 Series (Improvement Area 1)
Local Agency Bonds
$
22,310344
CPD 2004-3-2, 2015 Series (Improvement Area 2)
Local Agency Bonds
$
24,675,801
CFD 2005-2, 2015 Series (Improvement Area 2)
Local Agency Bonds
$
22,431523
Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government
will not be abls,to recover its deposits or will not be able to recover collateral securities that are in- the .possrssion of an
outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g.,
broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities
that are in the possession of another party. The California Government Code and the Authority's investment policy do not
contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other
than the following provision for deposits: The California Government Code requires that a financial institution secure
deposits made by state or local government units by pledging securities in an undivided collateral pool held by a depository
regulated under state law (unless so waived by the governmental unit). The market value of the pledged securities in the
collateral pool must equal at least 110% of the total amount deposited by the public agencies. California law also allows
financial institutions to secure Authority deposits by pledging first trust deed mortgage notes having a value of 150% of the
secured public deposits. As of June 30, 2016, none of the Authority's deposits (bank balances) that are in excess of federal
depository insurance limits were held in uncollateral ized accounts.
Local Agency Investment Fund
The LAW is a special fund of the California State Treasury through which local governments may pool investments. The
Authority may invest up to $50,000,000 in the fund. Investments in LAW are highly liquid, as deposits can be converted to
cash within twenty-four homy without loss of interest. Investments with LAW are secured by the full faith and credit of the
State of California. The yield of LAW during the quarter ended June 30, 2016 was 0.55%. The carrying value and
estimated market value of the LAIF Pool at Jute 30, 2016 was $75,395,751,048 and $75,442,588,513, respectively. The
Authority's share of the Pool at June 30, 2016 was approximately 0.0004 percent.
18
Lake Elsinore Public Financing Authority
Notes to Financial Statements
Year Ended June 30, 2016
2) CASH AND INVES'rMENTS - Continued
Local Agency Investment Fund - Continued
The fair value of the Authority's investment in this pool is reported in the accompanying financial statements at amounts
based upon the Authority's pro -rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the
amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by
LAIF, which are recorded on an amortized cost basis. Included in LAIF 's investment portfolio are certain derivative
securities or similar products in the form of structured notes totaling $400,000,000 and asset-backed securities totaling
$1,718,918,000. LAIP's and the Authority's exposure to risk (credit, market or legal) is not currently available.
The LAIF has oversight by the Local Investment Advisory Board. The LAIF Board consists of five members as designated
by Statute. LAIF is also regulated by California Government Code Section 16429.
Investment in Bonds
The Lake Elsinore Public Financing Authority has purchased subordinate tax allocation bonds and various Assessment
District (AD) and Community Facilities District (CFD) bonds from the proceeds of revenue bonds issued by the Authority
to facilitate the respective bond issues of the former Lake Elsinore Redevelopment Agency and the Districts.
The CFD and Assessment District Bonds are secured solely by assessments on property owners within the Districts. The
subordinate tax allocation bonds are secured based upon an allocation of taxes from the former redevelopment agency's
project areas. The repayment schedules of the bonds, and interest thereon, to the Authority are concurrent and sufficient to
satisfy the debt service requirements of the respective Authority revenue bonds.
The CPD and Assessment District Bonds investments are summarized below.
Investment
Fair Value
All 93-1 Refunding Improvement Bonds, 2012 Series A
$ 13,604,374
CFD 2005-5 Special Tax Bonds, 2012 Series A
2,992,267
CFD 2003-2 Special Tax Bonds, 2012 Series (Improvement Area C)
5,197,712
CFD 2006-1 Special Tax Bonds, 2013 Series (Improvement Area A)
3,366,015
CFD 88-3 Special Tax Bonds, 2013 Series B
2,656,392
CFD 98-1 Special Tax Bonds, 2013 Series C
12,051;208
CFD 2003-2, Special Tax Bonds, 2014 Series (Improvement Area D)
7,193,346
CFD 2003-2, Special Tax Bonds, 2014 Series (Improvement Areas A & C)
18,282,696
CPD 95-1, Special Tax Bonds, 2015 Series
1,103,090
CFD 2003-2 Special Tax Bonds, 2015 Series (Improvement Area B)
27,574,750
CFD 2004-3-1, Special Tax Bonds, 2015 Series (Improvement Area 1)
22,310,344
CFD 2004-3-2, Special Tax Bonds, 2015 Series (Improvement Area 2)
24,675,801
CFD 2005-1, Special Tax Bonds, 2015 Series
8,611,235
CFD 2005-2, Special Tax Bonds, 2015 Series (Improvement Area 2)
22,432,523
CFD 2005-6, Special Tax Bonds, 2015 Series
2,989,522
CFD 2006-2, Special Tax Bonds, 2015 Series
6,194,598
CFD 2006-1, Special Tax Bonds, 2015 Series (Improvement area B)
2,887,266
CFD 88-3, Special Tax Bonds, 2015 Series
7,590,000
I 1J j9 13,139
19
Lake Elsinore Public Financing Authority
Notes to Financial Statements
Year Ended June 30, 2016
3) FAIR VALUE MEASUREMENTS
Governmental Accounting Standards Board (GASB) Statement No. 72, Fair Value Measurements and Application,
provides the framework for measuring fair value. The framework provides a fair value hierarchy that prioritizes the
inputs to valuation techniques used to measure fair value with Level I given the highest priority and Level 3 the lowest
priority. The three levels of the fair value hierarchy are as follows:
Level I inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the organization has
the ability to access at the measurement date.
Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly or indirectly. Level 2 inputs include the following:
a. Quoted prices for similar assets or liabilities in active markets.
b. Quoted prices for identical or similar assets or liabilities in markets that are not active.
a Inputs other than quoted prices that are observable for the asset or liability (for example, interest rates and yield
curves observable at commonly quoted intervals, volatilities, prepayment speeds, loss severities, credit risks,
and default rates).
d. Inputs that are derived principally from or corroborated by observable market data by correlation or other means
(market -corroborated inputs).
Level 3 inputs are unobservable inputs for the asset or liability.
Fair value of assets measured on a recurring basis at June 30, 2016, are as follows:
Investments:
City of Lake Elsinore Investment Pool
LAIF
Held by Fiscal Agent:
Local Obligation Bonds
Money Market Mutual Funds
Total Investments
Fair Value Uncategorized
172,550 $ 172,550
329,987 329,987
191,711139
23,990,484 23,990,484
Significant Other
Observable Inputs
(Level 2)
191,713,139
$ 216,206,160 $ 24,493,021 $ 191,713,139
The City of Lake Elsinore Investment Pool are uneategorized under the fair value hierarchy. The money market mutual
funds are exempt under GASB No. 72 fair value measurements. Local Obligation Bonds under Level 2 are valued based
on their current maturity schedules.
20
Lake Elsinore Public Financing Authority
Notes to Financial Statements
Year Ended .Tune 30, 2016
4) LOANS RECEIVABLE
The Lake Elsinore Public Financing Authority ("Authority") entered into loan agreements with the former Redevelopment
Agency of the City of Lake Elsinore ("Agency") whereby the Authority loaned the proceeds of the 2010 Series A, B and C
Tax Allocation Revenue Bonds and the 2011 Series A Tax Allocation Bonds issued by the Authority to the Agency to retire
debt and provide funds for certain public improvements in Agency project areas. As of February 1, 2012, the Agency was
dissolved (see Note IA) and as a result of the dissolution of the Agency, the obligation to pay the loans to the Authority was
transferred to the Successor Agency to the Redevelopment Agency of the City of Lake Elsinore ("Successor Agency"). The
principal and interest are payable in installment payments payable not less than three days prior to the due date on the
related bonds payable. These loans are recorded as a receivable in the Authority's Debt Service Fund on the Governmental
Fund Balance Sheet.
The following table represents the balance of amounts loaned to the Successor Agency at June 30, 2016:
Tax Allocation
Revenue Bonds
2010 Series A Issue
2010 Series B Issue
2010 Series C Issue
Total
Loan
Receivable
Balance
$ 13,170,000
7,460.000
24,075,000
44.7Q5.000
The loans have not been challenged as enforceable obligations of the Successor Agency by the California Department of
Finance. The Authority expects repayment of these loans from property tax revenues allocated to the Successor Agency.
21
Lake Elsinm-e Public Financing Authority
Notes to Financial Statements
Year Ended June 30, 2016
5) LONG-TERM LIABILITIES
The following is a summary of changes in long-term liabilities for the year ended June 30,2016:
22
Date of
Years of
Rates of
Amount
Issue
Maturity
Interest
Authorized
Local Agency
Revenue Bonds:
2012 Series A
7/12
2014-2039
1.50%-
5.25% $
3,450,000
2012 Series B
11/12
2015-2031
2.00%-
5.125%
15,345,000
2012 Series C
12/12
2016-2043
2.00%-
5.00%
5,345,000
2013 Series A
5/13
2016-2044
1.75%-
5.00%
3,620,000
2013 Series B
7/13
2015-2021
2.00%-
3.25%
4,215,000
2013 Series C
7/13
2015-2034
2.00%-
5.25%
13,615,000
2014Series A
1/14
2017-2045
2.25%-5.75%
7,505,000
2014 Series B
7/14
2016-2041
3.00% -
5.00%
18,210,000
2015 Series
2/15
2016-2041
2.00%-5.00%
108,845,000
2015 Series A
2/15
201.7-2045
2.00%-
3.625%
3,200,000
2015 Series B
5/15
2017-2021
2.00%-
5.00%
7,590,000
Tax Allocation
Revenue Bonds:
2010 Series A
2/10
2011-2034
2.00%-
5.25% $
15,435,000
2010 Series B,
5/10
2011-2026
2.00%-
4.75%
10,855,000
2010 Series C
10/10
2012-2031
2.00%-
5.00%
29,435,000
Beginning
Ending
Due Within
Balance
Additions Deletions
Balance
One Year
Local Agency
Revenue Bonds:
2011 Series A $
4,945,000
(4,945,000)(') $
0
$
2012 Series A
3,325,000
(45,000)
3,280,000
55,000
2012 Series B
14,73Q000
(630,000)
14,100,000
655,000
2012 Series C
5,345,000
(5,000)
5,340,000
5,000
2013 Series A
3,620,000
(15,000)
3,605,000
20,000
2013 Series B
3,510,000
(685,000)
2,825,000
650,000
2013 Series C
13,140,000
(485,000)
12,655,000
495,000
2014 Series A
7,505,000
7,505,000
10,000
2014 Series B
18210,000
(260,000)
17,950,000
370,000
2015 Se ies
108,845,000
(1,660,000)
107,185,000
1,645,000
2015 Series A
3,200,000
3,200,000
30,000
2015 Series B
7,590,000
7,590,000
1,270,000
22
Lake Elsinore Public Financing Authority
Notes to Financial Statements
Year Ended June 30, 2016
5) LONG-TERM LIABILITIES -Continued
Tax Allocation
Revenue Bonds:
2010 Series A
2010 Series B
2010 Series C
2011 Series A
Subtotal
Add ('less) Deferred Amounts:
Bond Premiums
Bond Discounts
Total
Beginning
Balance
$ 13,500,000 $
8,070,000
25,290,000
4,155,000 _
244,980,000
11,897,987
(829,400)
Additions
$�LS) 048 587 $ Q
in Includes bond defeasance of $4,800,000.
(2) Includes bond defeasance of $3.650,000.
A) Local Agency Revenue Bonds
$JU,408.754) &240,639.833 $ 7 420,000
In February 1990, the Authority was authorized to issue $500,000,000 in revenue bonds for the purpose of enabling the
Authority to acquire certain qualified obligations (the "Local Obligations") of the City or the Agency for whose benefit
the program has been designed, or of any other local agencies in the State of California (the "Local Agencies"). The
bonds were issued to provide funds to finance the acquisition or construction of land, buildings, equipment and other
capital improvements. The bonds will constitute special obligations of the Authority and will be issued in Series from
time to time pursuant to Supplemental Indentures. These bonds will be payable solely from the repayment by local
Agencies of their obligations and any available surplus revenues.
2012 Series A
In July 2012, $3,450,000 principal amount of 2012 Local Agency Revenue Bonds, Series A, was issued in accordance
with the indenture described above. The bonds are due in annual installments of $25,000 to $255,000 from September
1, 2013 through September 1, 2038. Interest payments ranging from 1.5% to 5.25% are due from March 1, 2013
through September 17 2038. The bonds are subject to call and redemption prior to their stated maturity commencing
September 1, 2012 at specified redemption prices. At Jute 30, 2016, the Authority has a cash reserve balance for debt
service of $264,342, which is sufficient to cover the Bond Indenture Reserve Requirement of $264,325.
23
Ending
Due Within
Deletions
Balance
One Year
$ (330,000)
$ 13,170,000
$ 345,000
(610,000)
7,460,000
630,000
(1,215,000)
24,075,000
1,240,000
(4,155,000)(2)
(15,040,000)
229,940,000
7,420,000
(569,751)
11,328,236
200,997
(628,403)
$JU,408.754) &240,639.833 $ 7 420,000
In February 1990, the Authority was authorized to issue $500,000,000 in revenue bonds for the purpose of enabling the
Authority to acquire certain qualified obligations (the "Local Obligations") of the City or the Agency for whose benefit
the program has been designed, or of any other local agencies in the State of California (the "Local Agencies"). The
bonds were issued to provide funds to finance the acquisition or construction of land, buildings, equipment and other
capital improvements. The bonds will constitute special obligations of the Authority and will be issued in Series from
time to time pursuant to Supplemental Indentures. These bonds will be payable solely from the repayment by local
Agencies of their obligations and any available surplus revenues.
2012 Series A
In July 2012, $3,450,000 principal amount of 2012 Local Agency Revenue Bonds, Series A, was issued in accordance
with the indenture described above. The bonds are due in annual installments of $25,000 to $255,000 from September
1, 2013 through September 1, 2038. Interest payments ranging from 1.5% to 5.25% are due from March 1, 2013
through September 17 2038. The bonds are subject to call and redemption prior to their stated maturity commencing
September 1, 2012 at specified redemption prices. At Jute 30, 2016, the Authority has a cash reserve balance for debt
service of $264,342, which is sufficient to cover the Bond Indenture Reserve Requirement of $264,325.
23
Lake Elsinore Public Financing Authority
Notes to Financial Statements
Year Ended June 30, 2016
5) LONG-TERM LIABILITIES - Continued
A) Local Agency Revenue Bonds - Continued
2012 Series A - Continued
Future debt requirements for the 2012 Series A Local Agency Revenue Bonds are as follows:
Year Ending
June 30,
Principal
Interest
Total
2017
$ 55,000
$ 157,881
$ 212,881
2018
60,000
156,369
216,369
2019
65,000
154,569
219,569
2020
75,000
152,328
227,328
2021
80,000
149,613
229,613
2022-2026
520,000
693,012
1,213,012
2027-2031
745,000
542,719
1287,719
2032-2036
970,000
318,937
1,288,937
2037-2039
710.000
57,225
767,225
Total
S .__ 3.280 004.
R 2.382.653
$.__. 5 662.653
2012 Series B
In November 2012, $15,345,000 principal amount of 2012 Local Agency Revenue Bonds, Series B, was issued in
accordance with the indenture described above. The bonds are due in amoral installments of $615,000 to $1,360,000
from September 2, 2014 through September 2, 2030. Interest payments ranging from 2.0% to 5.125% are due from
March 2, 2013 through September 2, 2030. The bonds are subject to call and redemption prior to their stated maturity
commencing September 2, 2013 at specified redemption prices. At June 30, 2016, the Authority has a cash reserve
balance for debt service of $1,429,792, which is sufficient to cover the Bond Indenture Reserve Requirement of
$1,429,700.
Future debt requirements for the 2012 Series B Local Agency Revenue Bonds are as follows:
Year Ending
June 30,
2017
2018
2019
2020
2021
2022-2026
2027-2031
Total
Principal Interest Total
$ 655,000
675,000
705,000
735,000
770,000
4,510,000
6,050 000
$ 638,319
619,187
597,166
571,947
543,706
2,141,713
812,312
$ 1,293,319
1.294,187
1,302,166
1,306,947
1,313,706
6,651,713
6,862,312
,.--.._...14 L00..(0 924 50 $___=_r 4
24
Lake Elsinore Public Financing Authority
Notes to Financial Statements
Year Ended ,Tune 30, 2016
5) LONG-TERM LIABILITIES- Continued
A) Local Agency Revenue Bonds - Continued
2012 Series C
In December 2012, $5,345,000 principal amount of 2012 Local Agency Revenue Bonds, Series C. was issued in
accordance with the indenture described above. The bonds are due in amoral installments of $5,000 to $1,200,000 from
September 1, 2015 through September 1, 2042. Interest payments ranging from 2.0% to 5.0% are due from March 1,
2013 through September 1, 2042. The bonds are subject to call and redemption prior to their stated maturity
commencing September 1, 2013 at specified redemption prices. At June 30, 2016, the Authority has a cash reserve
balance for debt service of $534,500, which is sufficient to cover the Bond Indenture Reserve Requirement of
$514,416.
Future debt requirements for the 2012 Series C Local Agency Revenue Bonds are as follows:
Year Ending
June 30, Principal Interest Total
2017
$ 5,000
$ 261,019
$ 266,019
2018
15,000
260,766
275,766
2019
20,000
260,281
MUM
2020
25,000
259,588
284,588
2021
30,000
258,656
288,656
2022-2026
270,000
1,267,434
1,532434
2027-2031
510,000
1,184,219
1,694,219
2032-2036
845,000
1,018,375
1,863,375
2037-2041
1,300,000
752,500
2,052,500
2042-2043
2.320,000
118.000
2,438,000
Total
$ 5,340,00
838
$ 1- 980 838
2013 Series A
In May 2013, $3,620,000 principal amount of 2013 Local Agency Revenue Bonds, Series A, was issued in accordance
with the indenture described above. The bonds are due in annual installments of $15,000 to $310,000 from September
1, 2015 through September I, 2043. Interest payments ranging from 1.75% to 5.0% are due from March 1, 2014
through September 1, 2043. The bonds are subject to call and redemption prior to their stated maturity commencing
September 1, 2014 at specified redemption prices. At June 30, 2016, the Authority has a cash reserve balance for debt
service of $325,521, which is sufficient to cover the Bond Indenture Reserve Requirement of $315,485.
25
Lake Elsinore Public Financing Authority
Notes to Financial Statements
Year Ended June 30, 2016
5) LONG-TERM LIABILITIES - Continued
A) Local Agency Revenue Bonds - Continued
2013 Series A - Continued
Future debt requirements for the 2013 Series A Local Agency Revenue Bonds are as follows:
Year Ending
June 30,
Principal
Interest Total
2017
$ 20,000 $
169,169 $
189,169
2018
25,000
168,672
193,672
2019
30,000
168,000
198,000
2020
35,000
167,100
202,100
2021
40,000
165,925
205,925
2022-2026
285,000
802,628
1,087,628
2027-2031
480,000
723,050
1.203,050
2032-2036
735,000
584,022
1,319,022
2037-2041
1,085,000
361,375
1,446,375
2042-2044
870,000
67,250
937,250
Total $ 3.605.000
2013 Series B
In July 2013, $4,215,000 principal amount of 2013 Local Agency Revenue Bonds, Series B, was issued in accordance
with the indenture described above. The bonds are due in annual installments of $425,000 to $705,000 from September
1, 2014 through September 1, 2020. Interest payments ranging from 2.00% to 3.25% are due from September 1, 2013
through September 1, 2020. The bonds are subject to call and redemption prior to their stated maturity commencing
September 1, 2013 at specified redemption prices. At June 30, 2016, the Authority has a cash reserve balance for debt
service of $421,527, which is sufficient to cover the Bond Indenture Reserve Requirement of$421,500.
Future debt requirements for the 2013 Series B Local Agency Revenue Bonds are as follows:
Year Ending
June 30,
Principal
Interest
Total
2017
$ 650,000
$ 68,262
$ 718,262
2018
620,000
54,012
674,012
2019
580,000
38,288
618,288
2020
550,000
21063
572,063
2021
425,000
6,906
431,906
Total2.8250
$_82531
�__ 3114,31
26
Lake Elsinore Public Financing Authority
Notes to Financial Statements
Year Ended June 30, 2016
5) LONG-TERM LIABILITIES- Continued
A) Local Agency Revenue Bonds- Continued
2013 Series C
In July 2013,. $13,615,000 principal amount of 2013 Local Agency Revenue Bonds, Series C, was issued in accordance
with the indenture described above. The bonds are due in annual installments of $475,000 to $1,025,000 from
September 1, 2014 through September 1, 2033. Interest payments ranging from 2.00% to 5.25% are due from
September 1, 2013 through September 1, 2033. The bonds are subject to call and redemption prior to their stated
maturity commencing September 1, 2033 at specified redemption prices. At June 30, 2016, the Authority has a cash
reserve balance for debt service of $1,082,926 which is sufficient to cover the Bond Indenture Reserve Requirement of
$1,082,856.
Future debt requirements for the 2013 Series C Local Agency Revenue Bonds are as follows:
Year Ending
June 30, Principal Interest Total
2017
$ 495,000 $
579,194
$ 1,074,194
2018
505,000
565,431
1,070,431
2019
525,000
549,981
1,074,981
2020
540,000
532,994
1,072,994
2021
555,000
514,169
1,069.169
2022-2026
3,125,000
2,205,041
5,330,041
2027-2031
3,985,000
1,311,844
5,296,844
2032-2034
2,925 000
235,594
3,160,594
Total
$_ _ _ _12 655 000 $._„____6_,494
248
$ .... 1,142,248
2014 Series A
In January 2014, $7,505,000 principal amount of 2014 Local Agency Revenue Bonds, Series A, was issued in
accordance with the indenture described above. The bonds are due in annual installments of $10,000 to $705,000 from
September 1, 2016 through September 1, 2044. Interest payments ranging from 2.25% to 5.75% are due from
September 1, 2014 through September 1, 2044. The bonds are subject to call and redemption prior to their stated
maturity commencing September 1, 2023 at specified redemption prices. At June 30, 2016, the Authority has a cash
reserve balance for debt service of $705,056, which is sufficient to cover the Bond Indenture Reserve Requirement of
$705,011.
27
Lake Elsinore Public Financing Authority
Notes to Financial Statements
Year Ended June 30, 2016
5) LONG-TERM LIABILITIES- Continued
A) Local Agency Revenue Bonds - Continued
2014 Series A - Continued
Future debt requirements for the 2014 Series A Local Agency Revenue Bonds are as follows:
Year Ending
$ 370,000
$ 798,238
$ 1,168,238
June 30,
Principal
Interest
Total
2019
435,000
._
2017
$ 10,000
$ 415,956
$ 425,956
2018
20.000
415,594
435,594
2019
30,000
414,856
444,856
2020
40,000
413,669
453,669
2021
50,000
411,969
461,969
2022-2026
430,000
2,013,678
2,443,678
2027-2031
830,000
1,863,875
2,693,875
2032-2036
1,390,000
1,565,375
2,955,375
2037-2041
2,190,000
1,059,438
3,249,438
2042-2045
2.515,000
303,456
2,818,456
Total
$ 7 505 00
$ 8.877.866
&---1 U-81 fZ
2014 Series B
In July 2014, $18,210,000 principal amount of 2014 Local Agency Revenue Bonds, Series B, was issued in accordance
with the indenture described above. The bonds are due in annual installments of $260,000 to $660,000 from September
1, 2015 through September 1, 2040. Interest payments ranging from 3.00% to 5.00% are due from March 1, 2015
through September 1, 2040. The bonds are subject to call and redemption prior to their stated maturity commencing
September 1, 2024 at specified redemption prices. At June 30, 2016, the Authority has a cash reserve balance for debt
service of $1,467,999, which is sufficient to cover the Bond Indenture Reserve Requirement of $1,467,905.
Future debt requirements for the 2014 Series B Local Agency Revenue Bonds are as follows:
Year Ending
June 30, Principal Interest Total
2017
$ 370,000
$ 798,238
$ 1,168,238
2018
400,000
785,688
1,185,688
2019
435,000
771,075
1,206,075
2020
480,000
753,863
1,233,863
2021
530,000
733,662
1,263,662
2022-2026
3,360,000
3,225,028
6,585,028
2027-2031
4,475,000
2,438,934
6,913,934
2032-2036
5,050,000
1,258,019
6,308,019
2037-2041
2,850,000
375,662
3.225 662
Total12,
59 O0 00
�. 11_„140 109
$___ 29.090 169
28
Lake Elsinore Public Financing Authority
Notes to Financial Statements
Year Ended June 30, 2016
5) LONG-TERM LIABILITIES - Continued
A) Local Agency Revenue Bonds- Continued
2015 Series
In February 2015, $108,845,000 principal amount of 2015 Series Local Agency Revenue Bonds, was issued in
accordance with the indenture described above. The bonds are due in annual installments of $655,000 to $8,405,000
from September 1, 2015 through September 1, 2040. Interest payments ranging train 2.0% to 5.0% are due from
September 1, 2015 through September 1, 2040. The bonds are subject to call and redemption prior to their stated
maturity commencing September 1, 2025 at specified redemption prices. At June 30, 2016, the Authority has a cash
reserve balance for debt service of $9,268,335, which is sufficient to cover the Bond Indenture Reserve Requirement of
$9,234,298.
Future debt requirements for the 2015 Series Local Agency Revenue Bonds are as follows:
Year Ending
June 30, Principal Interest Total
2017
$ 1,645,000
$ 5,149,100
6,794,100
2018
1,825,000
5,103,175
6,928,175
2019
2,040,000
5,034,250
7,074,250
2020
2,250,000
4,948,450
7,198,450
2021
2,500,000
4,841,975
7,341,975
2022-2026
16,770,000
21,992,025
38,762,025
2027-2031
25,085,000
16,8871625
41,972,625
2032-2036
36,710,000
9,337,525
46,047,525
2037-2041
18,360,000
1,623,375
19,983,375
Total
��07185.000
$ 74912500
$ 182.102-50(�
2015 Series A
In February 2015, $3,200,000 principal amount of 2015 Local Agency Revenue Bonds, Series A, was issued in
accordance with the indenture described above. The bonds are due in annual installments of $30,000 to $235,000 from
September 1, 2016 through September 1, 2044. Interest payments ranging from 2.0% to 3.625% are due from
September 1, 2015 through September 1, 2044. The bonds are subject to call and redemption prior to their stated
maturity commencing September 1, 2023 at specified redemption prices. At June 30, 2016, the Authority has a cash
reserve balance for debt service of $230,163, which is sufficient to cover the Bond Indenture Reserve Requirement of
$230,148.
29
Lake Elsinore Public Financing Authority
Notes to Financial Statements
Year Ended June 30, 2016
5) LONG-TERM LIABILITIES- Continued
A) Local Agency Revenue Bonds - Continued
2015 Series A - Continued
Future debt requirements for the 2015 Series A Local Agency Revenue Bonds are as follows:
Year Ending
June 30,
Principal
Interest
Total
2017
$ 30,000
$ 106,569
$ 136,569
2018
35,000
105,919
140,919
2019
40,000
105,169
145,169
2020
40,000
104,369
144,369
2021
45,000
103,519
148,519
2022-2026
300,000
498,506
798,506
2027-2031
430,000
444,566
874,566
2032-2036
595,000
359,822
954,822
2037-2041
825,000
234,266
1,059,266
2042-2045
860,000
64,706
924,706
Total
$ 3,200,000
$ 2.127-4] 1
$ 5.327 411
2015 Series B
In May 2015, $7,590,000 principal amount of 2015 Local Agency Revenue Bonds, Series B, was issued in accordance
with the indenture described above. The bonds are due in annual installments of $1,270,000 to $1,810,000 from
September 1, 2016 through September 1, 2020. Interest payments ranging from 2.0% to 5.0% are due from March 1,
2016 through September 1, 2020. The bonds are not subject to call and redemption prior to their stated maturity. The
reserve requirement is covered by a bond insurance policy.
Future debt requirements for the 2015 Series B Local Agency Revenue Bonds are as follows:
Year Ending
June 30,
Principal
Interest
Total
2017
$ 1,270,000
$ 285,500
$ 1,555,500
2018
1,410,000
251,650
1,661,650
2019
1,500,000
200,500
1,700,500
2020
1,600,000
130,500
1,730,500
2021
1,810 000
45,250
1.855,250
Total
7 590,0
S___ 913,4_.00
$ __8,5Q3,404
30
Lake Elsinore Public Financing Authority
Notes to Financial Statements
Year Ended June 30, 2016
5) LONG-TERM LIABILITIES- Continued
B) Tax Allocation Revenue Bonds
2010 Series A
In February 2010, $15,435,000 principal amount of Tax Allocation Revenue Bonds, Series A, was issued in
accordance with the indenture described in Note 4A. The term bonds are due in annual installments of $305,000 to
$2,910,000 from September 1, 2010 through September I, 2033; interest at 2.00% to 5.25%. The bonds are subject
to call and redemption prior to their stated maturity commencing September 1, 2019, at specified redemption prices.
At June 30, 2016, the Authority has a cash reserve balance for debt service of $1,494,247, which is sufficient to
cover the Bond Indenture Reserve Requirement of $1,471,914.
Future debt requirements for the 2010 Series A Tax Allocation Revenue Bonds are as follows:
Year Ending
June 30,
Principal
Interest
2017
$ 345,000
$ 641,806
2018
350,000
630,944
2019
365,000
618,869
2020
380,000
605,356
2021
395,000
590,331
2022-2026
2,225,000
2,676,153
2027-2031
2,830,000
2,034,638
2032-2034
6,280,000
431.025
Total
Lj3120_,QQQ
$ 8.2292
2010 Series B
Total
986,806
980,944
983,869
985,356
985,331
. ;4,901.153
4,864,638
6.71 1,025
$ 21 399 122
In May 2010, $10,855,000 principal amount of Tax Allocation Revenue Bonds, Series B, was issued in accordance
with the indenture described in Note 4A. The term bonds are due in annual installments of $515,000 to $895,000
from September 1, 2010 through September 1, 2025; interest at 2.00% to 4.75%. The bonds are subject to call and
redemption prior to their stated maturity commencing September 1, 2019, at specified redemption prices. At June
30, 2016, the Authority has a cash reserve balance for debt service of $939,598, which is sufficient to cover the
Bond Indenture Reserve Requirement of $939,538,
31
Lake Elsinore Public Financing Authority
Notes to Financial Statements
Year Ended June 30, 2016
5) LONG-TERM LIABILITIES - Continued
B) Tax Allocation Revenue Bonds - Continued
2010 Series B - Continued
Future debt requirements for the 2010 Series B Tax Allocation Revenue Bonds are as follows:
Year Ending
June 30,
2017
2018
2019
2020
2021
2022-2026
Principal
$ 630,000
645,000
670,000
690,000
720,000
4,105,000
Interest
$ 299,950
280,019
257,394
231,450
202,350
490,350
Total
$ 929,950
925,019
927,394
921,450
922,350
4,595,350
Total $ 7.460.000 $ 1J61=513 $ 9.221.513
2010 Series C
In October 2010, $29,435,000 principal amount of Tax Allocation Revenue Bonds, Series C, was issued in
accordance with the indenture described in Note 4A. The term bonds are due in annual installments of $650,000 to
$2,115,000 from September 1, 2011 through September 1, 2030; interest at 2.00% to 5.00%. The bonds are subject
to call and redemption on or after their stated maturity commencing September 1, 2020, at specified redemption
prices. At June 30, 2016, the Authority has a cash reserve balance for debt service of $2,222,538, which is sufficient
to cover the Bond Indenture Reserve Requirement of $2,222,395.
Future debt requirements for the 2010 Series C Tax Allocation Revenue Bonds are as follows:
Year Ending
June 30, Principal
2017
2018
2019
2020
2021
2022-2026
2027-2031
Total
$ 1,240,000
1,270,000
1,310,000
1,350,000
1,395,000
7,825,000
9,685,000
32
Interest
$ 965,995
931,445
891,926
848,676
800,611
3,104,009
1,189,834
Total
$ 2,205,995
2,201,445
2,201,926
2,198,676
2,195,611
10,929,009
10,874,834
7322_ $ 32.807.496
Lake Elsinore Public Financing Authority
Notes to Financial Statements
Year Ended June 30, 2016
5) LONG-TERM LIABILITIES- Continued
C) Advance Refunding
Lake Elsinore Public Financing Authority 2011 Local Agency Revenue Bonds, Series A, and 2011 Tax Allocation
Revenue Bonds, Series A.
In August 2015, the Successor Agency to the Redevelopment Agency of the City of Lake Elsinore (Successor
Agency) issued $8,065,000 in Subordinated Tax Allocation Refunding Bonds, Series 2015, with interest rates of
2.00% to 5.00% to advance refund $4,800,000 of the Lake Elsinore Public Financing Authority 2011 Local Agency
Revenue Bonds, Series A, and $3,650,000 of the Lake Elsinore Public Financing Authority 2011 Tax Allocation
Revenue Bonds, Series A. The net proceeds, along with $982,387 of prior funds, of $8,905,829 (after payments for
reserves, underwriting tees and other issuance costs) were deposited in an irrevocable trust to provide funds for the
future debt service payment on the refunded bonds. As a result, the Lake Elsinore Public Financing Authority 2011
Local Agency Revenue Bonds, Series A, and 2011 Tax Allocation Revenue Bonds, Series A, are considered to be
defeased and the liabilities of these bonds have been removed from the long-term debt of the Authority.
The reacquisition price exceeded the net carrying amount of the old debts by $543,007 (includes $87,178 remaining
discount on the 2011A Tax Allocation Revenue bond). This amount is being amortized by the Successor Agency
over the remaining life of its refunding debt as a deferred amount on refunding. The advance refunded the Lake
Elsinore Public Financing Authority 2011 Local Agency Revenue Bonds, Series A, and 2011 Tax Allocation
Revenue Bonds, Series A, to reduce its total debt service payments over 23 years by $2,461,520 and to obtain an
economic gain (difference between the present values of the debt service payments on the old and new debt) of
$1,911,831.
6) LIABILITY, PROPERTY AND PROTECTION
A) Description Self -Insurance Pool Pursuant to Joint Powers Agreement
To account for risks of Toss and liability claims, the Authority participates in the City's liability, property and
protection policy. The City of Lake Elsinore is a member of the California Joint Powers insurance Authority
(Authority). The Authority is composed of 116 California public entities and is organized under a joint powers
agreement pursuant to California Government Code §6500 et seq. The purpose of the Authority is to arrange and
administer programs for the pooling of self-insured losses, to purchase excess insurance or reinsurance, and to
arrange for group -purchased insurance for property and other lines of coverage. The California JPIA began
covering claims of its members in 1978. Each member government has an elected official as its representative on
the Board of Directors. The Board operates through a nine -member Executive Committee.
B) Self-insurance Programs of the Insurance Authority
Each member pays an annual contribution at the beginning of the coverage period. A retrospective adjustment is
then conducted annually thereafter, for coverage years 2012-13 and prior, until all claims incurred during those
coverage years are closed, on a pool -wide basis. This subsequent cost re -allocation among members, based on
actual claim development, can result in adjustments of either refunds or additional deposits required. Coverage
years 2013-14 and forward are not subject to routine annual retrospective adjustment.
33
Lake Elsinore Public Financing Authority
Notes to Financial Statements
Year Ended June 30, 2016
6) LIABILITY, PROPERTY AND PROTECTION - Continued
B) Self-insurance Programs of the lnsm,anee Authm•ity - Continued
The total funding requirement for self-insurance programs is estimated using actuarial models and pre -funded
through the annual contribution. Costs are allocated to individual agencies based on exposure (payroll) and
experience (claims) relative to other members of the risk -sharing pool. Additional information regarding the cost
allocation methodology is provided below.
Liability - In the liability program claims are pooled separately between police and general government police
exposures. (1) The payroll of each member is evaluated relative to the payroll of other members. A variable
credibility factor is determined for cacti member, which establishes the weight applied to payroll and the weight
applied to losses with the formula. (2) The first layer of losses includes incurred costs up to $30,000 for each
occurrence and is evaluated as a percentage of the pool's total incurred costs within the first layer. (3) The second
layer of losses includes incurred costs from $30,000 to $750,000 for each occurrence and is evaluated as a
percentage of the pool's total incurred costs within the second layer. (4) Incurred costs in excess of $750,000 to $50
million are distributed based on the outcome of cost allocation within the first and second loss layers.
For 2015-16 the Authority's pooled retention is $2 million per occurrence, with reinsurance to $20 million, and
excess insurance to $50 million. The Authority's reinsurance contracts are subject to the following additional
pooled retentions: (a) $2.5 million annual aggregate deductible in the $3 million x/s $2 million layer, b) $3 million
annual aggregate deductible in the $5 million x/s $10 million layer. There is a third annual aggregate deductible in
the amount of $2,5 million in the $5 million x/s $5 million layer, however it is fully covered under a separa!: policy
. -
and therefore not retained by the Authority.
The overall coverage limit for each member, including all layers of coverage, is $50 million per occurrence. Costs
of covered claims for subsidence losses have a sub -limit of $30 million per occurrence.
Workers' Compensation - In the workers' compensation program claims are pooled separately between public safety
(police and fire) and general government exposures. (1) The payroll of each member is evaluated relative to the
payroll of other members. A variable credibility factor is determined for each member, which establishes the weight
applied to payroll and the weight applied to losses within the formula. (2) The first layer of losses includes incurred
costs up to $50,000 for each occurrence and is evaluated as a percentage of the pool's total incurred costs within the
first layer. (3) The second layer of losses includes incurred costs from $50,000 to $100,000 for each occurrence and
is evaluated as a percentage of the pool's total incurred costs within the second layer. (4) Incurred costs from
$100,000 to statutory limits are distributed based on the outcome of cost allocation within the first and second loss
layers.
For 2015-16 the Authority's pooled retention is $2 million per occurrence, with reinsurance to statutory limits under
California Workers' Compensation Law.
Employer's Liability losses are pooled among members to $2 million. Coverage from $2 million to $5 million is
purchased as part of a reinsurance policy, and Employer's Liability losses from $5 million to $10 million are pooled
among members.
34
Lake Elsinore Public Financing Authority
Notes to Financial Statements
Year Ended June 30, 2016
6) LIABILITY, PROPERTY AND PROTECTION - Continued
C) Purchased Insurance
Property Insurance - The City of Lake Elsinore participates in the all-risk property protection program of the
Authority. This insurance protection is underwritten by several insurance companies. City of Lake Elsinore
property is currently insured according to a schedule of covered property submitted by the City of Lake Elsinore to
the Authority. City of Lake Elsinore property currently has all-risk property insurance protection in the amount of
$41,623,755. There is a $5,000 deductible per occurrence except for non -emergency vehicle insurance which has a
$1,000 deductible. Premiums for the coverage are paid annually and are not subject to retroactive adjustments.
Crime Insurance - The City purchases crime insurance coverage in the amount of $1,000,000 with a $2,500
deductible. The fidelity coverage is provided through the Authority. Premiums are paid annually and are not
subject to retroactive adjustments.
D) Adequacy of Protection
During the past three fiscal years, none of the above programs of protection experienced settlements or judgments
that exceeded pooled or insured coverage, There were also no significant reductions in pooled or insured liability
coverage in 2015-16.
7) CONTINGENCIES
As of June 30, 2016, in the opinion of the Authority's management, there are no outstanding matters which would have a
significant effect on the financial condition of the funds orthe Authority.
8) SPECIAL ITEM
The Successor Agency to the Lake Elsinore Redevelopment Agency issued bonds to advance refund the Authority's
2011 Local Agency Revenue Bonds, Series A, and 2011 Tax Allocation Revenue Bonds, Series A (see Note 5C). As
part of the refunding, the related loans receivable were cancelled which created a loss on loans receivable.
9) PRIOR PERIOD ADJUSTMENT
Included in the Statement of Activities and the Statement of Revenues, Expenditures, and Changes in Fund Balances is a
prior period adjustment of $1,312,540. This adjustment was to record bond issue deposits withheld by the Authority.
35
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SUPPLEMENTARY SCHEDULES
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Lake Elsinore Public Financing Authority
Combining Balance Sheet
Other Governmental Funds
June 30, 2016
Debt Service
2010 2011 2011 2011
Series B Series A Series A Series B
TAB TAB LARB LARB
ASSETS
Cash and Investments $ $ $ $
Cash and Investments with Fiscal Agent 1,409,305 155 5,847
Interest Receivable
Loans Receivable from Successor Agency 7,460,000
Prepaid Items
Total Assets $ 8,869,305 $ 155 $ 5,847 $ 0
LIABILITIES AND FUND BALANCES
Liabilities:
Deposits Payable $ 1,409,298 $ 6 $ $
Total Liabilities 1,409,298 6 0 0
Fund Balances:
Nonspendable for Prepaid Items
Restricted for Debt Service 7,460,007 149 5,847
Total Fund Balances 7,460,007 149 5,847 0
Total Liabilities and
Fund Balances $ 8,869,305 $ 155 $ 5,847 $ 0
36
Debt Service
2012 2012 2013 2013 2013
Series A Series C Series A Series B Series C
LARB LARB LARB LARB LARB
$ $ $ 20 $ $ 409,115
3,296,292 5,921,315 3,740,401 3,186,685 13,296,687
364
$ 3,296,292 $ 5,921,315 $ 3,740,421 $ 3,186,685 $ 13,706,166
$ 303,995 $ 723,507 $ 374,348 $ 530,241 $ 1,245,354
303,995 723,507 374,348 530,241 1,245,354
2,992,297 5,197,808 3,366,073 2,656,444 12,460,812
2,992,297 5,197,808 3,366,073 2,656,444 12,460,812
$ 3,296,292 $ 5,921,315 $ 3,740,421 $ 3,186,685 $ 13,706,166
Continued
37
Lake Elsinore Public Financing Authority
Combining Balance Sheet - Continued
Other Governmental Funds
June 30, 2016
Debt Service
Total
2014 2015
2015 Other
Series A Series A
Series B Governmental
LARB LARB
LARB Funds
ASSETS
Cash and Investments $ $ $ $ 409,135
Cash and Investments with Fiscal Agent 8,010,431 3,155,626 7,879,553 49,902,297
Interest Receivable 364
Loans Receivable from Successor Agency 7,460,000
Prepaid Items 18,787 18787
Total Assets $ 8,010,431 $ 3,155,626 $ 7,898,340 $ 57,790,583
LIABILITIES AND FUND BALANCES
Liabilities:
Deposits Payable $ 816,895 $ 266,693 $ 285,112 $ 5,955,449
Total Liabilities 816,895 266,693 285,112 5,955,449
Fund Balances:
Nonspendable for Prepaid Items
18,787
18,787
Restricted for Debt Service
7,193,536
2,888,933 7,594,441
51,816,347
Total Fund Balances
7,193,536
2,888,933 7,613,228
51,835,134
Total Liabilities and
Fund Balances
$ 8,010,431
$ 3,155,626 $ 7,898,340
$ 57,790,583
38
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Lake Elsinore Public Financing Autbority
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
Other Governmental Funds
Year Ended June 30, 2016
REVENUES
Investment Earnings
Total Revenues
EXPENDITURES
Current:
Professional Services
Debt Service:
Bond Issuance Costs
Principal Retirement
Payment to Escrow Agent
Interest and Fiscal Charges
Total Expenditures
Excess (Deficiency) of Revenues
over Expenditures
SPECIAL ITEM
Gain (Loss) on Loans Receivable
Net Change in Fund Balances
Fund Balances, Beginning of Year -
As Previously Reported
Prior Period Adjustment
Fund Balances, Beginning of Year - As Restated
Fund Balances, Lind of Year
Debt Service
2010 2011 2011 2011
Series B Series A Series A Series B
TAB TAB LARB LARB
$ 266,096 $ 108,280 $ 161,384 $
266,096 108,280 161,384 0
2,705
610,000 505,000
145,000
555,045
427,341
318,550 118,088
137,675
928,550 1,178,133 710,016 2,705
(662,454) (1,069,853) (548,632) (2,705)
(3,0947955) (4,225,000)
(662,454) (4,164,808) (4,773,632) (2,705)
8,122,461 4,164,957 4,779,479 2,705
&122,461 4,164,957 4,779.479 2,705
$ 7,460,007 $ 149 $ 5,847 $ 0
39
153,632 266,556 178,291 121,288 610,346
45,000 5,000 15,000 685,000 485,000
159,075 261,125 169,500 81,613 590,231
204,075 266,125 184,500 766,613 1,075,231
(50,443) 431 (6,209) (645,325) (464,885)
(50,443) 431 (6,209) (645,325) (464,885)
3,083,679 5,411,003 3,429,287 3,445,544 13,031135
(40,939) (213,626) (57,005) (143,775) (106,438)
3,041740 5,197,377 3,372,282 3,301,769 12,925,697
$ 2,992,297 $ 5,197,808 $ 3,366,073 $ 2,656,444 $ 12,460,812
Continued
40
Debt Service
2012
2072
2013
2013
2013
Series A
Series C
Series A
Series B
Series C
LARB
LARB
LARB
LARB
LARB
$ 153,632
$ 266.556
$ 178,291
$ 121,288
$ 610,346
153,632 266,556 178,291 121,288 610,346
45,000 5,000 15,000 685,000 485,000
159,075 261,125 169,500 81,613 590,231
204,075 266,125 184,500 766,613 1,075,231
(50,443) 431 (6,209) (645,325) (464,885)
(50,443) 431 (6,209) (645,325) (464,885)
3,083,679 5,411,003 3,429,287 3,445,544 13,031135
(40,939) (213,626) (57,005) (143,775) (106,438)
3,041740 5,197,377 3,372,282 3,301,769 12,925,697
$ 2,992,297 $ 5,197,808 $ 3,366,073 $ 2,656,444 $ 12,460,812
Continued
40
Lake Elsinore Public Financing Authority
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - Continued
Other Governmental Funds
Year Ended June 30, 2016
REVENUES
Investment Earnings
Total Revenues
EXPENDITURES
Current:
Professional Services
Debt Service:
Bond Issuance Costs
Principal Retirement
Payment to Escrow Agent
Interest and Fiscal Charges
Total Expenditures
Excess (Deficiency) of Revenues
over Expenditures -
SPECIAL ITEM
Gain (Loss) on Loans Receivable
427,355 121,724 221,165 2,636,117
4,697 7,402
6,515 6,515
2,495,000
982386
416,069 110,728 221,165 2,583,819
416,069 110,728 232,377 6,075,122
11,286 10,996 (11,212) (3,439.005)
(7,319,955)
Net Change in Fund Balances
Debt Service
10,996
Total
2014
2015
2015
Other
Series A
Series A
Series B
Governmental
LARB
LARB
LARB
Funds
2,877,937
7,909,516
63,451,219
Prior Period Adjustment
$ 427,355
$ 121,724
$ 221,165
$ 2,636,117
427,355 121,724 221,165 2,636,117
4,697 7,402
6,515 6,515
2,495,000
982386
416,069 110,728 221,165 2,583,819
416,069 110,728 232,377 6,075,122
11,286 10,996 (11,212) (3,439.005)
(7,319,955)
Net Change in Fund Balances
11,286
10,996
(11,212)
(10,758,960)
Fund Balances, Beginning of Year -
As Previously Repotted
7,192,516
2,877,937
7,909,516
63,451,219
Prior Period Adjustment
(10,266)
(285,076)
(857.125)
Fund Balances, Beginning of Year - As Restated
7,182,250
2,877.937
7,624,440
62,594,094
Fund Balances, End of Year
$ 7,193,536L
2,888,933
$ 7,613,228
$ 51.835.134
41
LAKE ELSINORE,
RECREATION AUTHORITY
FINANCIAL STATEMENTS
Year Ended June 30, 20] 6
Lake Elsinore Recreation Authority
Financial Statements
Year Ended June 30, 2016
TABLE OF CONTENTS
PAGE
Independent Auditors' Report I - 2
Basic Component Unit Financial Statements:
Government -wide Financial Statements:
Statement of Net Position 3
Statement of Activities 4
Fund Financial Statements
Balance Sheet - Governmental Fund 5
Reconciliation of the Balance Sheet to the
Statement of Net Position - Governmental Fund 6
Statement of Revenues, Expenditures and Changes in
Fund Balance - Governmental Fund 9
Reconciliation of the Statement of Revenues, Expenditures
and Changes in Fund Balance to the Statement of
Activities - Governmental Fund g
Notes to Financial Statements 9-16
07RSTEAMAN, RAMIREZ & SMITH, INC.
CFRTIFIF0 PUBLIC AC CN N N TA NTB
INDEPENDENT AUDITORS' REPORT
Board of Directors
Lake Elsinore Recreation Authority
Lake Elsinore, California
Report on the Financial Statements
We have audited the accompanying financial statements of the govermnental activities and the major fund of the Lake Elsinore
Recreation Authority (the "Authority"), a component unit of the City of Lake Elsinore, as of and for the year ended June 30,
2016, and the related notes to the financial statements, which collectively comprise the Authority's basic financial statements as
listed in the table of contents.
Munagcment's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting
principles generally accepted in the United Slates of America; this includes the design, implementation, and maintenance of
internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement,
whether due to fraud or error.
Auditor's ResponsibiIIty
Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance
with auditing standards generally accepted in the United States of America and the standards applicable to financial audits
contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.
The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the
financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control
relevant to the Authority's preparation and fair presentation of the financial statements in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Authority's
internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting
policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position
of the governmental activities and the major fimd of the Authority, as of June 30, 2016, and the respective changes in financial
position for the year Bien ended in accordance with accounting principles generally accepted in the United States of America.
r saw
.w..vx. zcas-v,.... ...
Richard A. Tea man, CPA b David M. Ramirez, CPA + Javier F. Carrillo, CPA 7 Bryan P. Daugherty, CPA a Joshua J. Calhoun, CPA
4201 Brockton Avenue Suite 100 Riverside CA 92501 951.274.9500 TEL 951.274.7828 FAX www.trscpas.com
Emphasis of Matter
Change in Accounting Principle
As described in Note I to the financial statements, in 2016, the Authority adopted new accounting guidance, GASB Statement
No. 72, Fair Value Measurement and Application. Our opinion is not modified with respect to this matter.
Other Matters
Required Supplementary Information
Management has omitted Management's Discussion and Analysis that accounting principles generally accepted in the United
States of America require to be presented to supplement the basic financial statements. Such missing information, although not
a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an
essential pail of financial reporting for placing the basic financial statements in an appropriate operational, economic, or
historical context. Our opinion on the basic financial statements is not affected by this missing information.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated December 30, 2016, on our
consideration of the City of Lake Elsinore's internal control over financial reporting and on our tests of its compliance with
certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to
describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and
not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an
audit performed in accordance with Government Auditing Standards in considering the Authority's internal control over
financial reputing and compliance.
Riverside, California
December 30, 2016
Lake Elsinore Recreation Authority
Statement of Net Position
June 30, 2016
ASSETS
Cash and Investments with Fiscal Agent
Prepaids
Interest Receivable
Lease Receivable
Total Assets
DEFERRED OUTFLOWS OF RESOURCES
Deferred Charge on Refunding
Total Deferred Outflows of Resources
LIABILITIES
Deposits Payable
Interest Payable
Noncurrent:
Due Within One Year
Due in More Than One Year
Total Liabilities
NET POSITION
Restricted for Debt Service
Total Net Position
The accompanying notes are an integral part of this statement.
3
Governmental
Activities
$ 1,726,806
85,387
220,708
12,750,000
14,782,901
193,122
193,122
1,131,700
220,708
600,000
12,117,253
14,069,661
906,362
$ 906,362
Lake Elsinore Recreation Authority
Statement of Activities
Year Ended June 30, 2016
General Revenues:
Investment Earnings
Miscellaneous
Total General Revenues
Change in Net Position
Total Net Position - Beginning
Total Net Position - Ending
'rhe accompanying notes are an integral part of this statement.
4
328
570
898
(16,759)
923,121
$ 906,362
Program Revenues
Charges Operating Capital
Net
for Grants and Grants and
(Expense)
Functions/Programs
Expenses
Services Contributions Contributions
Revenue
Governmental Activities:
General Government
$ 3,163
$ $ $
$ (3,163)
Interest on Long-term Debt
554,344
539,850
(14,494)
Total Governmental
Activities
$ 557,507
$ 0 $ 539,850 $ 0
(17,657)
General Revenues:
Investment Earnings
Miscellaneous
Total General Revenues
Change in Net Position
Total Net Position - Beginning
Total Net Position - Ending
'rhe accompanying notes are an integral part of this statement.
4
328
570
898
(16,759)
923,121
$ 906,362
Lake Elsinore Recreation Authority
Balance Sheet - Governmental Fund
June 30, 2016
ASSETS
Cash and Investments with Fiscal Agent
Prepaids
Total Assets
LIABILITIES AND FUND BALANCE
Liabilities:
Accounts Payable
Total Liabilities
Fund Balance:
Nonspendable for Prepaids
Restricted for Debt Service
Total Fund Balance
Total Liabilities and
Fund Balance
The "ecompanying notes are an integral part of this statement.
5
Debt
Service
$ 1.726,806
85,387
$ ],812,193
0
85,387
1,726,806
1,812,193
$ 1,812,193
Lake Elsinore Recreation Authority
Reconciliation of the Balance Sheet to the Statement of Net Position
Governmental Fund
June 30, 2016
Fund Balance (Deficit) for Governmental Fund
Amounts reported for governmental activities in the Statement of Net Position
are different because:
Long-term assets which are not considered to be current financial resources
are not reported in the governmental fund.
Interest Receivable
Lease Receivable
Long -tern liabilities are not due and payable in the current period and are
not reported in the governmental fund.
Deferred Charges on Refunding
Deposits Payable
Interest Payable
Long-term Liabilities
Net Position of Governmental Activities
1 he accompanying notes me an integral part of this statement.
6
$ 1,812,193
220,708
12,750,000
193,122
(1,131,700)
(220,708)
(12,717,253)
$ 906,362
Lake Elsinore Recreation Authority
Statement of Revenues, Expenditures, and Changes in Fund Balance
Governmental Fund
Year Ended June 30, 2016
REVENUES
Lease Revenue
Investment Earnings
Miscellaneous
Total Revenues
EXPENDITURES
Current:
Professional Services
Debt Service:
Principal Retirement
Interest and Fiscal Charges
Total Expenditures
Excess (Deficiency) of Revenues
over Expenditures
Net Change in Fund Balance
Fund Balance, Beginning
Fund Balance, Ending
The accompanying notes are an integral part of this statement.
7
Debt
Service
$ 1,127,100
227
570
1,127,897
3.163
580,000
547,100
1,130,263
(2,366)
(2,366)
1,814,559
$ 1,812,193
Lake Elsinore Recreation Authority
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balance
Governmental Fund
Year Ended June 30, 2016
Net Change in Fund Balance (Deficit) - Total Governmental Fund $ (2,366)
Amounts repotted for governmental activities in the Statement of Activities
are different because:
The governmental fund reports the receipt of lease principal payments
as revenue, but repayments of the principal are included as a reduction
of the lease receivable in the Statement of Net Position.
Interest on Lease Receivable (7,250)
Principal Lease Payments (580,000)
The issuance of long-term debt provides current financial resources to
governmental funds, while the repayment of the principal of long-term
debt consumes the current financial resources of governmental funds.
Neither transaction, however, has any effect on net postion. These amounts
are the effect of these differences in the treatment of long-term debt.
Long -tarn Debt Principal Payments 580,000
Investment earnings on long-term deposits payable are reported as
governmental fund revenues but these amounts increase long -tern
deposits payable reported on the Statement of Net Position.
Investment Earnings on Deposits Payable 101
Some expenses reported in the Statement of Activities do not require the use
of current financial resources and are not reported as governmental fund
expenses.
Amortization of Deferred Charges on Refunding (12,393)
Amortization of Bond Discount (2,101)
Interest and Fiscal Charges 7,250
Change in Net Position of Governmental Activities $ (16,759)
the accompanying notes are an integral part of this statement.
Lake Elsinore Recreation Authority
Notes to Financial Statements
Year Ended June 30, 2016
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A) Reporting Entity
The Lake Elsinore Recreation Authority (the "Authority") is a joint exercise of powers between the City of Lake
Elsinore (the "City") and the Lake Elsinore Redevelopment Agency (the "Agency"), which was dissolved effective
February 1, 2012, created by ajoint powers agreement dated December 1, 1996. The Recreation Authority continues
to function without the Agency. The purpose of the Authority is to provide, through the issuance of revenue bonds, a
financing pool to fund capital improvement projects. These revenue bonds are to be repaid solely from the revenues of
certain public obligations. The Authority does not have taxing power. The City Council also acts as the governing
body of the Authority. The Authority's activities in these financial statements are reported as a debt service fund.
The Authority is a component unit of the City and, accordingly, the financial statements of the Authority are included
in the financial statements of the City of Lake Elsinore. The Authority is an integral part of the reporting entity of the
City of Lake Elsinore. The funds of the Authority have been blended within the financial statements of the City
because the City Council of the City of Lake Elsinore is the governing board of the Authority and exercises control
over the operations of the Authority. Only the funds of the Authority are included herein, therefore, these financial
statements do not purport to represent the financial position or results of operations of the City of Lake Elsinore.
B) Implementation of Governmental Accounting Standards Board (GASB) Pronouncements
Governmental Accounting Standard Board Statement No. 72
In February of 2015, GASB issued Statement No. 72, Fair Value Measurement and Application. This State: nu it -
addresses accounting and financial reporting issues related to fair value measurements. The definition of fair value is
the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date. This Statement provides guidance for determining a fair value measurement for
financial reporting purposes. This Statement also provides guidance for applying fair value to certain investments and
disclosures related to all fair value measurements. Statement No. 72 is effective for periods beginning after June 15,
2015. The Authority implemented GASB No. 72 and is reflected on the Authority's financial statements.
C) Basis of Presentation
The accounting policies of the Authority conform to accounting principles generally accepted in the United States of
America as they are applicable to governmental units. The Governmental Accounting Standard Board (GASB) is the
accepted standard setting body for establishing governmental accounting and financial reporting principles. The more
significant accounting policies reflected in the financial statements are summarized as follows:
Government -wide Financial Statements: The Government -wide financial statements (i.e., the Statement of Net
Position and the Statement of Activities) report information on all of the nonfiduciary activities of the primary
government (the Authority). Governmental activities, which normally are supported by taxes and intergovernmental
revenues, are reported separately from business -type activities, which rely to a significant extent on fees and charges
for support. All Authority activities are governmental; no business -type activities are reported in the statements.
The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segment are
offset by program revenues. Direct expenses are expenses that are clearly identifiable with a specific program, project,
function or segment. Taxes and other items that are properly not included among program revenues are reported
instead as general revenues.
Lake Elsinore Recreation Authority
Notes to Financial Statements
Year Ended June 30, 2016
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
C) Basis of Presentation - Continued
As part of the basic financial statements, separate fund financial statements are provided for governmental funds. The
Authority has only one governmental fund, which is reported as a major fund.
D) Measurement Focus, Basis of Accounting, and Financial Statement Presentation
The government -wide financial statements are reported using the economic resources measurement focus and the fill]
accrual basis of accounting. Under the economic resources measurement focus, all assets and liabilities (whether
current or noncurrent) associated with their activity are included on their balance sheets. Operating statements present
increases (revenues) and decreases (expenses) in total net assets. Under the accrual basis of accounting, revenues are
recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash
flows.
Governmental fund financial statements are reported using the current financial resources measurement focus and the
modified accrual basis of accounting. Under the current financial resources measurement focus, only current assets
and current liabilities are generally included on their balance sheets. The reported fund balance (net current assets) is
considered to be a measure of "available spendable resources". Governmental fund operating statements present
increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current
assets. Accordingly, they are said to present a summary of sources and uses of"available spendable resources" during
a period. -
Under the modified accrual basis of accounting, revenues are considered to be available when they are collectible
within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the
government considers revenues to be available if they are collected within 60 days of the end of the current fiscal
period. Expenditures generally are recorded when a liability is incurred, except for principal and interest on general
long-term liabilities which are recognized as expenditures to the extent they have matured. Proceeds of general long-
term liabilities are reported as other financing sources. Interest associated with the current fiscal period is considered to
be susceptible to accrual, and therefore recognized as revenues on the current fiscal period.
The Authority reports the following major governmental fund:
The Debt Service /Fund is used to account for the accumulation of resources for, and the payment of, long -tern
debt principal, interest and related costs.
When both restricted and unrestricted resources are available for use, it is the Authority's policy to use restricted
resources first, and then unrestricted resources as they are needed.
E) Investments
Investments are stated at fair value.
10
Lake Elsinore Recreation Authority
Notes to Financial Statements
Year Ended June 30, 2016
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
F) Prepaids
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaids in both
the governnient-wide and fund financial statements. The cost of prepaid items is recorded as expenditures/expenses
when consumed rather than when purchased. The Authority's prepaids represent bond insurance being allocated over
the life of the related debt.
G) Deferred Outflows/Inflows of Resources
In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows
of resources. 'Phis separate financial statement element, deferred outflows of resources, represents a consumption of
net position that applies to a future period(s) and so will not be recognized as an outflow of resources
(expense/expenditure) until then. The Authority only has one item that qualifies for reporting in this category. It is the
deferred charge on refunding reported in the government -wide statement of net position. A deferred charge on
refunding results from the difference in the carrying value of refunded debt and its reacquisition price. This amount is
deferred and amortized over the shot -ter of the life of the refunded or refunding debt.
In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows
of resources. This separate financial statement element, deferred inflows ofresources, represents an acquisition of net
position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that
time. Currently, the Authority does not report any deferred inflows.
H) Net Position
GASB No. 63 requires that the difference between assets, liabilities and deferred inflows/outflows of resources be
reported as net position. Net position is classified as either net investment in capital assets, restricted, or unrestricted.
Net position classified as net investment in capital assets consists of capital assets, net of accumulated depreciation and
reduced by the outstanding principal of related debt. Restricted net position is the net position that has external
constraints placed on them by creditors, grantors, contributors, laws, or regulations of other governments, or through
constitutional provisions, or enabling legislation. Unrestricted net position consists of net position that does not meet
the definition of net investment in capital assets or restricted net position.
1) Fund Balance
In the governmental fund financial statements, governmental fund types report nonspendable and restricted fund
balance for amounts that are not available for appropriation or are legally restricted by outside parties for use for a
special purpose. Assigned fund balance represents tentative management plans that are subject to change.
J) Use of Estimates
The preparation of financial statement's in conformity with accounting principles generally accepted in the United
States of America requires management to make estimates and assumptions that affect the reported amounts of assets
and liabilities, deferred outflows/inflows of resources, and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenditures/expenses during the reporting period.
Actual results could differ fi-om those estimates.
Lake Elsinore Recreation Authority
Notes to Financial Statements
Year Ended June 30, 2016
2) CASH AND INVESTMENTS
The Authority's cash and investments are held by outside fiscal agents under the provisions of bond indentures. Investment
of cash with fiscal agents is governed by the trust indenture.
Investments Authorized by Debt Agreements
Investments of debt proceeds held by bond trustee are governed by provisions of the debt agreements, rather than the
general provisions of the California Government Code. Investments authorized for funds held by bond trustee include U.S.
Treasury Obligations, U.S. Government Sponsored Agency Securities, Commercial Paper, Local Agency Bonds, Banker's
Acceptance and Money Market Funds. There were no limitations on the maximum amount that can be invested in one
issuer, maximum percentage allowed or the maximum maturity of an investment.
Disclosures Relating to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment.
Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest
rates. One of the ways that the Authority manages its exposure to interest rate risk is by purchasing shorter tern
investments to provide the cash flow and liquidity needed for operations. The Authority's cash and investments of
$1,726,806 consisted of mutual fluids, and the fair value of the mutual funds is not affected by changes in interest rates.
Disclosures Relating to Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment.
This is measured by the assignment of a rating by a nationally recognized statistical rating organization. At June 3Q 2016,
the minimum required rating for the investment in mutual funds is A. The actual rating by Standard and Poor's of the
investment was AAA.
3) FAIR VALUE MEASUREMENTS
Governmental Accounting Standards Board (GASB) Statement No, 72, Fair Value Measurements and Application,
provides the framework for measuring fair value. The framework provides a fair value hierarchy that prioritizes the inputs
to valuation techniques used to measure fair value with Level 1 given the highest priority and Level 3 the lowest priority.
'Che three levels of the fair value hierarchy are as follows:
Level l inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the organization has the
ability to access at the measurement date.
Leve/2 inputs are inputs other than quoted prices included within Level l that are observable for the asset or liability, either
directly or indirectly. Level inputs include the following:
a. Quoted prices for similar assets or liabilities in active markets.
b. Quoted prices for identical or similar assets or liabilities in markets that are not active.
12
Lake Elsinore Recreation Authority
Notes to Financial Statements
Year Ended June 30, 2016
3) FAIR VALUE MEASUREMENTS - Continued
c. Inputs other than quoted prices that are observable for the asset or liability (for example, interest rates and yield
curves observable at commonly quoted intervals, volatilities, prepayment speeds, loss severities, credit risks, and
default rates).
d. Inputs that are derived principally from or corroborated by observable market data by correlation or other means
(market -corroborated inputs).
Level 3 inputs are unobservable inputs for the asset or liability.
Fair value of assets measured on a recurring basis at June 30, 2016, are as follows:
Fair Value Uncategorized
Investments:
Held by Fiscal Agent:
Money Market Funds $ 1,726,806 $ 1,726,806
Total Investments $ 1,726,806 $ 1,726,806
The above investments are uncategorized under the fair value hierarchy. The money market funds are exempt under GASB
No. 72 fair value measurements.
4) LEASE RECEIVABLE AND DEPOSITS PAYABLE
The Authority has entered into a lease agreement with the City to lease certain recreation facilities financed with the
proceeds of the 2013 Series A Revenue Refunding Bonds. Under the lease agreement, the Authority receives lease
payments in an amount to pay the debt service on the 2013 Series A Revenue Refunding Bonds (see Note 4). The lease
receivable balance at June 30, 2016 amounted to $12,750,000. As part of the bond issuance related to the lease, the
Authority retained amounts for a reserve account. The amounts retained are reflected as deposits payable in the Statement
of Net Position. The deposits payable balance at June 30, 2016 is $1,131,700.
5) LONG-TERM LIABILITIES
The following is a summary of changes in long-term liabilities for governmental activities:
Date of Years of Rates of Amount
Issue Maturity Interest Authorized
2013 Revenue Refrutding Bonds,
Series A 9/13 2013-2032 3% to 5% $ 14,460,000
13
Lake Elsinore Recreation Authority
Notes to Financial Statements
Year Ended June 30, 2016
5) LANG -TERM LIABILITIES - Continued
6) REVENUE BONDS
2013 Series A
In September 2013, $14,460,000 principal amount of 2013 Revenue Refunding Bonds, Series A, was issued in accordance
with the indenture to provide funds to advance refund the 2000 Revenue Refunding Bonds, Series A. The original purpose
of the prior bonds was to finance the Authority's lease of certain City recreation facilities from the City for lease back to the
City. The term bonds are due in annual installments of $565,000 to $1,075,000 from February 1, 2014 through February 1,
2032: interest rates varying from 3.00% to 5.00%. The bonds are subject to call and redemption prior to their stated
maturity commencing February 1, 2024, at specified redemption prices. At June 30, 2016, the Authority has a cash reserve
balance for debt service of $1,131,700, which is sufficient to cover the Bond Indenture Reserve Requirement of $1,131,700.
Future debt requirements for the Revenue Bonds are as follows:
2013 Series A
Year Ending June 30, Principal Interest Total
2017
Beginning
529,700 $
Ending
Due Within
620,000
Balance Additions
Retirements
Balance
One Year
2013 Revenue Refunding Bonds,
1,128,100
2020
655,000
474,050
Series A
$ 13,330,000 $
$ 580,000
$ 12,750,000
$ 600,000
Bond Discount
(34,848)
(1101)
(32,747)
2027-2031
4,690,000
_
5,645,988
Total
$ 13.295.152 0
�
$ 12.717.253
$ 600.000
6) REVENUE BONDS
2013 Series A
In September 2013, $14,460,000 principal amount of 2013 Revenue Refunding Bonds, Series A, was issued in accordance
with the indenture to provide funds to advance refund the 2000 Revenue Refunding Bonds, Series A. The original purpose
of the prior bonds was to finance the Authority's lease of certain City recreation facilities from the City for lease back to the
City. The term bonds are due in annual installments of $565,000 to $1,075,000 from February 1, 2014 through February 1,
2032: interest rates varying from 3.00% to 5.00%. The bonds are subject to call and redemption prior to their stated
maturity commencing February 1, 2024, at specified redemption prices. At June 30, 2016, the Authority has a cash reserve
balance for debt service of $1,131,700, which is sufficient to cover the Bond Indenture Reserve Requirement of $1,131,700.
Future debt requirements for the Revenue Bonds are as follows:
2013 Series A
Year Ending June 30, Principal Interest Total
2017
$ 600,000 $
529,700 $
1,129,700
2018
620,000
511,700
1,131,700
2019
635,000
493,100
1,128,100
2020
655,000
474,050
1,129,050
2021
675,000
454,400
1,129,400
2022-2026
3,800,000
1,844,012
5,644,012
2027-2031
4,690,000
955,988
5,645,988
2032
1,075,000
53,750
1,128-7.50
Total $ 12.75.0„000 $ 5316 M $18066,700
14
Lake Elsinore Recreation Authority
Notes to Financial Statements
Year Ended .lune 30, 2016
7) LIABILITY, PROPERTY AND PROTECTION
Description Self -Insurance Pool Pursuant to Joint Powers Agreement
To account for risks of loss and liability claims, the Authority participates in the City's liability, property and protection
policy. The City of Lake Elsinore is a member of the California Joint Powers Insurance Authority (Authority). The
Authority is composed of 116 California public entities and is organized under a joint powers agreement pursuant to
California Government Code §6500 et seq. The purpose of the Authority is to arrange and administer programs for the
pooling of self-insured losses, to purchase excess insurance or reinsurance, and to arrange for group -purchased insurance for
property and other lines of coverage. The California JPIA began covering claims of its members in 1978. Each member
government has an elected official as its representative on the Board of Directors. The Board operates through a nine -
member Executive Committee.
Self-insurance Programs of the Insurance Authority
Each member pays an annual contribution at the beginning of the coverage period. A retrospective adjustment is then
conducted annually thereafter, for coverage years 2012-13 and prior, until all claims incurred during those coverage years
are closed, on a pool -wide basis. This subsequent cost re -allocation among member, based on actual claim development,
call result in adjustments of either refunds or additional deposits required. Coverage years 2013-14 and forward are not
subject to routine annual retrospective adjustment.
The total funding requirement for self-insurance programs is estimated using actuarial models and pre -funded through the
annual contribution. Costs are allocated to individual agencies based on exposure (payroll) and experience (claims) relative
to other members of the risk -sharing pool. Additional information regarding the cost r..'iocation methodology is provided
below.
Liahili - In the liability program claims are pooled separately between police and general goverment exposures. (1) The
payroll of each member is evaluated relative to the payroll of other members. A variable credibility factor is determined for
each member, which establishes the weight applied to payroll and the weight applied to losses with the formula. (2) The
first layer of losses includes incurred costs up to $30,000 for each occurrence and is evaluated as a percentage of the pool's
total incurred costs within the first layer. (3) The second layer of losses includes incurred costs from $30,000 to $750,000
for each occurrence and is evaluated as a percentage of the pool's total incurred costs within the second layer. (4) Incurred
costs in excess of $750,000 to $50 million are distributed based on the outcome of cost allocation within the first and second
loss layers.
For 2015-16 the Authority's pooled retention is $2 million per occurrence, with reinsurance to $20 million, and excess
insurance to $50 million. The Authority's reinsurance contracts are subject to the following additional pooled retentions:
(a) $2.5 million annual aggregate deductible in the $3 million x/s $2 million layer, b) $3 million annual aggregate deductible
in the $5 million x/s $10 million layer. There is a third annual aggregate deductible in the amount of $2.5 million in the $5
million x/s $5 million layer, however it is fully covered under a separate policy and therefore not retained by the Authority.
The overall coverage limit for each member, including all layers of coverage, is $50 million per occurrence. Costs of
covered claims for subsidence losses have a sub -limit of $30 million per occurrence.
15
Lake Elsinore Recreation Authority
Notes to Financial Statements
Year Ended June 30, 2016
7) LIABILITY, PROPERTY AND PROTECTION - Continued
Self-insurance Programs of the Insurance Authority - Continued
Workers' Compensation - In the workers' compensation program claims are pooled separately between public safety (police
and fire) and general government exposures. (1) The payroll of each member is evaluated relative to the payroll of other
members. A variable credibility factor is determined for each member, which establishes the weight applied to payroll and
the weight applied to losses within the formula. (2) The first layer of losses includes incurred costs up to $50,000 for each
occurrence and is evaluated as a percentage of the pool's total incurred costs within the first layer. (3) The second layer of
losses includes incurred costs from $50,000 to $100,000 for each occurrence and is evaluated as a percentage of the pool's
total incurred costs within the second layer. (4) Incurred costs from $100,000 to statutory fruits are distributed based on the
outcome of cost allocation within the first and second loss layers.
For 2015-16 the Authority's pooled retention is $2 million per occurrence, with reinsurance to statutory limits under
California Workers' Compensation Law.
Employer's Liability losses are pooled among members to $2 million. Coverage from $2 million to $5 million is purchased
as part of a reinsurance policy, and Employer's Liability losses from $5 million to $10 million are pooled among members.
Purchased Insurance
Property Insurance - The City of Lake Elsinore participates in the all-risk property protection program of the Authority.
This insurance protection is underwritten by several insurance companies. City of Lake Elsinore property is currently
insured according to a schedule of covered property submitted by the City of Lake Elsinore to the Authority. City of Lake
Elsinore property currently has all-risk property insurance protection in the amount of $41,623,755. There is a $5,000
deductible per occurrence except for non -emergency vehicle insurance which has a $1,000 deductible. Premiums for the
coverage are paid annually and are not subject to retroactive adjustments.
Crime Insurance - The City purchases crime insurance coverage in the amount of $1,000,000 with a $2,500 deductible. The
fidelity coverage is provided through the Authority. Premiums are paid annually and are not subject to retroactive
adjustments.
Adequacy of Protection
During the past three fiscal years, none of the above programs of protection experienced settlements or judgments that
exceeded pooled or insured coverage. There were also no significant reductions in pooled or insured liability coverage in
2015-16.
8) CONTINGENCIES
As of June 30, 2016, in the opinion of the Authority's management, there are no outstanding matters which would have a
significant effect on the financial condition of the funds of the Authority.
16
I iiKI: . &rt tillYs?IZIi
..—.
Agenda Date: 1/24/2017
In Control: City Council
Agenda Number: 4)
City of Lake Elsinore
Text File
File Number: ID# 17-048
Version: 1
130 South Main Street
Lake Elsinore, CA 92530
w .lake-elsinore.org
Status: Consent Agenda
File Type: Report
City of Lake Elsinore Page 1 Printed on 111912017
CITY OF
LADE C LSIN0RE
DREAM EXTREME -
REPORT TO CITY COUNCIL
To: Honorable Mayor and Members of the City Council
From: Grant Yates, City Manager
Prepared by: Nancy Lassey, Finance Administrator
Approved by: Jason Simpson, Assistant City Manager
Date: January 24, 2017
Subject: Measure A Independent Accountant's Report for the Fiscal Year 2015-2016
Recommendation
Receive and file the Measure A Independent Accountant's Report for the Fiscal Year 2015-
2016.
Background and Discussion
On an annual basis the Riverside County Transportation Commission enlists an independent
auditing firm to visit City Hall and perform agreed-upon procedures to determine if the City is in
compliance with managing the Measure A Local Streets and Roads Program. The auditing firm
typically reviews the City's documents and reports related to the receipt and spending of
Measure A funding for the Fiscal Year.
The Measure A Independent Accountant's Report is a report provided to the City from the
auditing firm, Macias Gini & O'Connell LLP, and presents the purpose, procedures followed, and
findings of their audit. The Measure A Independent Account's Report for the Fiscal Year 2015-
2016 delivers favorable results.
Fiscal Impact
No fiscal impact.
Exhibits
A: Measure A Independent Accountant's Report for the Fiscal Year 2015-2016
Certified
MGOPublic Century City
'- Accountants
Los Angeles
Newport Beach
Oakland
Sacramento
Independent Accountant's Report an rAego
On Applying Agreed -Upon Procedures S.rhan°,t°
Walnut Creek
The Board of Commissioners
Riverside County Transportation Commission Woodland His
Riverside, California
We have performed the procedures enumerated below, which were agreed to by the Riverside County
Transportation Commission (ROTC), solely to assist RCTC in determining whether the City of Lake
Elsinore, California (the City), was in compliance with the Measure A Local Streets and Roads Program
grant terms and conditions for the fiscal year ended June 30, 2016. The City's management is responsible
for the compliance with the grant terms and conditions of the Measure A Local Streets and Roads
Program. This agreed-upon procedures engagement was conducted in accordance with attestation
standards established by the American Institute of Certified Public Accountants. The sufficiency of these
procedures is solely the responsibility of those parties specified in the report. Consequently, we make no
representation regarding the sufficiency of the procedures described below; either for the purpose for
which this report has been requested, or for any other purpose.
Our procedures and related findings are as follows:
1. Review the 2009 Measure A (Ordinance 02-001) compliance requirements. Western County
jurisdictions are required to participate in the Transportation Uniform Mitigation Fee (TUMF)
program and in the Multi -Species Habitat Conservation Plan (MSHCP), which are adtninistered_by
the Western Riverside Council of Governments (WRCOG) and the Western Riverside County
Regional Conservation Authority (RCA), respectively. Coachella Valley jurisdictions are required to
participate in the TUMF program administered by the Coachella Valley Association of Governments
(CVAG). Indicate participation in TUMF and/or MSHCP programs.
Finding: No exceptions were noted as a result of applying this procedure. The City participates in
the TUMF program administered by WRCOG and the MSHCP administered by RCA.
2. Obtain from RCTC the approved Five -Year Capital Improvement Plan (CiP) for the fiscal year.
Finding: No exceptions were noted as a result of applying this procedure.
3. Obtain from the jurisdiction a detail general ledger and balance sheet for the fiscal year.
a. Identify the amount of Measure A cash and investments recorded at the end of the fiscal year.
Compare amount to Measure A fund balance and provide an explanation for any differences
greater than 25% of fund balance.
Finding: Measure A cash and investments were $936,072 at June 30, 2016. The difference
between Measure A cash and investments of $936,072 and fund balance of $1,125,781 was
$189,709, or 16.9% of the fund balance.
Macias Gini & O'Connell LLP
4675 MacArthur Court, Suite 600
Newport Beach, CA 92660 www.mgocpa.com
b. Identify any amounts due from other funds.
Finding: There were no amounts due from other funds at June 30, 2016.
c. Identify the components of ending fund balance for the Measure A activity (e.g., nonspendable,
restricted, assigned, committed, unassigned) and [for County only] by geographic area.
Finding: The ending fund balance for Measure A activity was restricted in the amount of
$1,125,781 at June 30, 2016.
d. Identify the existence of any restatement of Measure A fund balance; inquire of management as
to the reason for any restatement and provide a summary of the restatement items.
Finding: We noted no restatement of the Measure A fund balance reported at June 30, 2015.
4. Obtain an operating statement for the Measure A activity for the fiscal year, including budget
amounts; include the operating statement as an exhibit to the report.
a. Review the revenues in the operating statement.
i. Inquire of management as to what fund is used to record Measure A revenues received from
RCTC and identify what the total revenues were for the fiscal year.
Finding: The City accounts for Measure A revenues in its Measure A Fund (Fund # 112).
The City recorded total revenues in the amount of $1,182,808 for the fiscal year ended
June 30, 2016 (refer to Exhibit A).
ii. Obtain from RCTC a listing of Measure A payments to the jurisdiction. Compare the
Measure A sales tax revenues recorded by the jurisdiction to the listing of payments made by
RCTC.
Finding: We identified a variance of $5,631 between the Measure A revenues recorded by
the City and the RCTC Measure A payment schedule. The difference is due to a fiscal year
2015 clean-up adjustment payment from RCTC, in the amount of $28,850, recorded by the
City in fiscal year 2016, and a fiscal year 2016 clean-up adjustment payment by RCTC in the
amount of $34,481 to be recorded by the City in fiscal year 2017. The following schedule
summarizes these differences.
City of
RCTC Lake Elsinore
Measure A revenues recorded $ 1,168,641 $ 1,163,010
2015 clean-up adjustment payment - (28,850)
2016 clean-up adjustment payment 34,481
Measure A revenues reconciled $ 1,168,641 $ 1,168,641
iii. Obtain from thejurisdiction an interest allocation schedule for the fiscal year.
2
Identify the allocation amount of interest income to Measure A activity and what the
amount of interest income was for the fiscal year. If no interest was allocated, inquire of
management as to reason for not allocating interest income.
Finding: The City allocated interest in the amount of $10,018 to Measure A activity for the
fiscal year ended June 30, 2016.
b. Review the expenditures in the operating statement.
i. Inquire of management as to what fund is used to record Measure A expenditures and what
the total expenditures were for the fiscal year.
Finding: The City accounts for Measure A expenditures in its Measure A Fund (Fund #112).
The City recorded total Measure A expenditures in the amount of $987,327 for the fiscal year
ended June 30, 2016 (refer to Exhibit A).
ii. Select expenditures for testing that comprise at least 20% of the total Measure A
expenditures.
Finding: The City recorded Measure A expenditures in the amount of $987,327. We selected
expenditures in the amount of $209,418 or 21.2%, for testing.
E For the expenditures selected for testing, compare the dollar amount listed on the general
ledger to the supporting documentation.
Finding: No exceptions were noted as a result of applying this procedure.
2. For the expenditures selected for testing, review the Five -Year CIP and note if the project
is included in the Five -Year CIP and is an allowable cost.
Finding: The expenditures selected for testing were included in the Five -Year CIP and
were allowable costs. No exceptions were noted as a result of applying this procedure.
iii. Inquire of management as to the nature of any transfers in or out recorded in the Measure A
Fund. For any transfers out, determine if nature of transfer out was included in the Five -Year
CIP.
Finding: Per discussion with City management, the City recorded transfers out of the
Measure A Fund in the amount of $499,865 to the Total Road Improvement Program (TRIP)
Debt Service Fund and $487,462 to the CIP Fund. The transfer to the TRIP Debt Service
Fund represents debt service on the 2014A Certificates of Participation (COPS) that is
included on the Five -Year CIP. The transfer to the CIP Fund is for projects included in the
Five -Year CIP.
iv. Inquire of management as to the amount of general or non -project -related indirect costs, if
any, included in expenditures. If indirect costs exceed 8% of Measure A revenue, inquire of
management as to the basis for indirect costs charged to Measure A. If indirect costs are
identified, determine if such costs are included in the Five -Year CIP.
Finding: Per discussion with City management, there were no general or non -project -related
indirect costs allocated to the Measure A Fund for the fiscal year ended June 30, 2016.
v. Inquire of management as to the amount of debt service expenditures recorded in the Measure
A fund.
Finding: Per discussion with City management, the City recorded transfers out of the
Measure A Fund in the amount of $499,865 to the TRIP Debt Service Fund. This transfer
represents debt service on the 2014A COPS that is included on the Five -Year CIP.
For cities with advance funding agreements with RCTC, compare debt service
expenditures to Measure A payments withheld by RCTC.
Finding: There was no advance funding agreement with RCTC noted.
2. For cities with other indebtedness, determine if such costs are included in the Five -Year
CIP.
Finding: The City recorded Debt Service expenditures on the 2014A COPS totaling
$499,865 that is included in the Five -Year CIP.
5. Compare the budgeted expenditures to actual amounts; inquire of management as to the nature of
significant budget variances.
Finding: The following schedule compares budgeted expenditures to actual amounts.
Budget Actual Variance
Transfers out $ 1.166,183 $ 987,327 $ 178,856
Per discussion with City management, projects not yet started or not yet completed are to continue
into fiscal year 2017.
6. Obtain from RCTC a listing of jurisdictions who participate in the Western County or Coachella
Valley TUMF programs.
a. If the jurisdiction is a participant in the TUMF program, select at least one disbursement for
validation as to the amount remitted to WRCOG or CVAG, as applicable.
Finding: We selected one disbursement in the amount of $186,333. The payment selected for
testing indicated that TUMF was collected and remitted to WRCOG, as required.
b. Indicate the total amount of TUMF fees collected and remitted during the fiscal year.
Finding: The total amount of TUMF fees collected and remitted during the fiscal year ended
June 30, 2016, was $2,362,183.
7. Obtain from RCTC a listing of jurisdictions who participate in the Western County MS HCP program.
a. If the jurisdiction is a participant in the MSHCP program, select at least one disbursement for
validation as to the amount remitted to RCA, as applicable.
2
Finding: We selected one disbursement in the amount of $32,428. The payment selected for
testing indicated that MSHCP was collected and remitted to RCA, as required.
b. Inquire of management as to the existence of any fees collected in prior years and not remitted to
RCA as of the end of the fiscal year.
Finding: Per discussion with City management, there were no fees collected in prior years and
not remitted to RCA as of the end of the fiscal year.
c. Indicate the total amount of MSHCP fees collected and remitted during the fiscal year.
Finding: The total amount of MSHCP fees collected and remitted during the fiscal year ended
June 30, 2016, were $68,134 and 68,178, respectively. The difference of $44 was due to fees in
the amount of $44 being remitted but uncollected. The fees have been billed by Accounts
Receivable.
S. Obtain from RCTC the Maintenance of Effort (MOE) base year requirement, including supporting
detail of the calculations for the City, and the carryover amount allowed as of the beginning of the
fiscal year.
a. Obtain from the City a calculation of its current year MOE amount in the format similar to its
base year calculation. Attach a copy of the calculation worksheet provided by the City as an
exhibit to the report.
Finding: No exceptions were noted as a result of applying this procedure. Refer to Exhibit 13 for a
copy of the City's MOE calculation.
b. Compare the current year MOE amounts from the General Fund to the general ledger.
Finding: No exceptions were noted as a result of applying this procedure.
c. Review the General Fund general ledger to determine if there were any transfers in to fund any
MOE amounts.
Finding: No transfers in were noted as a result of applying this procedure.
d. Compare the amount of current year MOE expenditures to the MOE base requirement and add
any excess to, or subtract any deficiency from, the carryover amount.
Finding: We noted that current year MOE expenditures of $3,395,420 were greater than the
MOE base requirement of $960,771 resulting in an excess MOE of $2,434,649 for the fiscal
year ended ,lune 30, 2016.
e. If the amount of discretionary funds spent is less than the MOE base requirement (MOE
deficiency), determine the amount of any prior year MOE carryover using the information
obtained from RCTC, and reduce the MOE deficiency by any available MOE carryover to
determine an adjusted current year expenditure amount.
Finding: No exceptions were noted as a result of applying this procedure. The City's
discretionary funds spent during the fiscal year ended .lune 30, 2016 exceeded the MOE base year
requirement. The City's MOE carryover at June 30, 2016 is calculated as follows:
MOE excess at July 1, 2015 $ 5,649,772
Current year MOE expenditures 3,395,420
Less: MOE base year requirement (960,771)
MOE excess for the fiscal year ended June 30, 2016 2,434,649
MOE excess at June 30, 2016
$ 8,084,421
We were not engaged to and did not conduct an examination, the objective of which would be the
expression of an opinion on the City's compliance with the grant terms and conditions of the Measure A
Local Streets and Roads Program. Accordingly, we do not express such an opinion. Had we performed
additional procedures, other matters might have come to our attention that would have been reported to
you.
This report is intended solely for the information and use of the Board of Commissioners and
management of RCTC and the City Council and management of the City of Lake Elsinore and is not
intended to be and should not be used by anyone other than these specified parties.
i
�a ocs
i
Newport Beach, California
December 27. 2016
CITY OF LAKE ELSINORE, CALIFORNIA
Measure A Operating Statement
For the Fiscal Year Ended June 30, 2016
(Unaudited)
Revenues:
Measure A
GASB 31
Investment earnings
Total revennes
Expenditures:
Transfers out
Excess (deficiency) of revenues
over (under) expenditures
Exhibit A
Budget
Actual
Variance
$ 1,159,000
$ 1,163,010
$ 4,010
-
9,780
9,780
-
10,018
10,018
1,159,000
1,182,808
23,808
1,166,183
987,327
178,856
$ (7,183) $ 195,481 $ 202,664
7
7 A KE'l5 5Imk-- ll
Agenda Date: 1/24/2017
In Control: City Council
Agenda Number: 5)
City of Lake Elsinore
Text File
File Number: ID# 17-049
Version: 1
130 South Main Street
Lake Elsinore, CA 92530
w .lake-elsinore.org
Status: Consent Agenda
File Type: Report
City o/ Lake Elsinore Page 7 Printed on 1119/2017
CITY OF i��
LADE LSII`IOR.E
DREAM EXTREME,
REPORT TO CITY COUNCIL
To: Honorable Mayor and Members of the City Council
From: Grant Yates, City Manager
Approved by: Johnathan O. Skinner, Community Services Director
Date: January 24, 2017
Subject: Professional Services Agreement (PSA) for Operational Management of La
Laguna Resort and Boat Launch
Recommendation
Authorize the City Manager to execute the PSA with Williams Bait and Tackle Inc. in an amount
not to exceed $145,000, as to form approved by the City Attorney.
Background
In 2015, the City of Lake Elsinore approved the Agreement for Operational I".Ganagemei ii of La
Laguna Resort and Boat Launch with William's Bait and Tackle, Inc. The Agreement was set to
expire November 30, 2015, with the option of one six-month extension. On December 1, 2015,
Amendment No. 1 activated the extension and the Agreement remained in place until May 31,
2016. Amendment No. 2 established an extension term of seven months. In December 2016,
the City of Lake Elsinore approved Amendment No. 3 to discuss short and long term operations
of La Laguna with William's Bait and Tackle, Inc.
Discussion
As Amendment No. 3 reaches its expiration at the end of January 2017, staff negotiated a
subsequent operating agreement during the anticipated construction and rehabilitation of the
entire site. As the rehabilitation will be a phased approach, William's Bait and Tackle, Inc.
submitted a tiered operational proposal for future operations. As the campground will be
operational through the fiscal year, the Professional Services Agreement will reflect operations
through June 30, 2017 for both campground and Boat Launch operations.
William's Bait and Tackle, Inc. has been a good partner with the City and has worked in concert
with City staff and officials to increase the positive standing of Lake Elsinore and the
campground to the community and visitors alike. City staff hereby present the Professional
Services Agreement for Operational Management of La Laguna Resort and Boat Launch for
review and approval.
Page 1 of 2
Fiscal Impact
The fiscal impact will be $145,000 as identified in the Professional Services Agreement for
Operational Management of La Laguna Resort and Boat Launch.
Exhibits
A — Professional Services Agreement for Operational Management of La Laguna
Resort and Boat launch
B — Agreement for Operational Management of La Laguna Resort and Boat Launch
Amendment No. 3
C — Agreement for Operational Management of La Laguna Resort and Boat Launch
Amendment No. 2
D — Agreement for Operational Management of La Laguna Resort and Boat Launch
Amendment No. 1
E — Agreement for Operational Management of La Laguna Resort and Boat Launch
Page 2 of 2
PROFESSIONAL SERVICES AGREEMENT
WILLIAM'S BAIT AND TACKLE
OPERATIONAL MANAGEMENT OF LA LAGUNA RESORT AND BOAT LAUNCH
This Agreement for Professional Services (the "Agreement") is made and entered
into as of FEBRUARY 1, 2017, by and between the City of Lake Elsinore, a municipal
corporation ("City") and William's Bait and Tackle, Inc., a California Corporation
("Operator").
RECITALS
A. The Lake Elsinore Recreation Area ("LERA") was established by the State
of California for the purpose of making available to the people for their enjoyment the
natural, cultural, and recreational values of the largest natural lake in Southern California.
B. The function of the City at the LERA is to manage, protect, and, where
necessary, to restore its natural and cultural resources and values for their perpetuation in
accordance with the public park and recreational purpose; to interpret these values
effectively; and to provide facilities and services, consistent with the purpose of the park,
that are necessary for the full enjoyment of the park.
C. The City has determined that it requires the following professional services:
operation and routine maintenance of La Laguna Resort and Boat Launch that promote the
above stated purposes of LERA and to promote the safety and convenience of the general
public in the use and enjoyme;it of, and the enhancement of recreational and park
experiences.
D. Operator possesses the skill, experience, ability, background, certification
and knowledge to perform the services described in this Agreement on the terms and
conditions described herein.
E. City desires to retain Operator to perform the services as provided herein
and Operator desires to provide such professional services as set forth in this Agreement.
AGREEMENT
Scope of Services.
1.1 License to Utilize Premises. Operator understands and agrees that
this Agreement is by license and not lease; confers only permission to
occupy and use the Premises of La Laguna Resort and Boat Launch,
depicted in Exhibit 'A," and located at 32040 Riverside Drive in Lake
Elsinore, California (Area Parcel Numbers: 379100002, 379100015,
379120007, 379120008) for the prescribed purposes in accordance with the
terms and conditions hereinafter specified without granted or reserving to
Operator any interest or estate there in; the expenditure of capital and/or
labor in the course of use and occupancy thereunder shall not confer any
interest or estate in the premises by virtue of said use, occupancy and/or
expenditure of money thereon; and it is the intention of the parties to limit the
Professional Services Agreement William's Bait and Tackle, Inc.
Operational Management of La Laguna Resort and Boat Launch
February 1, 2017
right of use granted here in to a personal, revocable and assignable privilege
of use in the Premises for the license granted here in.
1.2 Operate Boat Launch. Campground and Day Use Areas Operator
shall operate the boat launch, campground and day use areas by operating
gate house, selling lake use passes and launch passes, fishing passes,
monitoring the launching of vessels into Lake Elsinore, renting campsites,
allowing entry of public into designated day -use areas, and selling camping
related concession items. Operator shall require that all vessel operators
utilizing the boat launch to access Lake Elsinore have purchased a City Lake
Use Pass. Operator shall be supplied with Lake Use Passes from the City
and shall offer such Lake Use Passes for sale to the public at all time during
operation of the Premises. Tent camping is restricted to no more than three
(3) consecutive days and must vacate the premises for a minimum of two
days prior to any future stays. Under no circumstances shall a campsite be
rented to any individual entity for more than six (6) months.
1.3 Operate William's Bait and Tackle. Operator shall operate William's
Bait and Tackle store by selling bait, tackle, boat and water ski parts and
accessories, charging fees for rental of vessels, and selling prepackaged
food and non-alcoholic beverages. Operator must maintain an inventory of
all merchandise required to meet the reasonable needs of the public. All
vessels offered for rental shall fully comply with the any and all safety
equipment requirements of the State of California, Department of Boating
and Waterways, and the United States Coast Guard. All vessels used for
commercial purposes (rentals) shall maintain a valid Annual Commercial
Lake Use Pass_. All food and beverages sold shall conform to federal, state,
and local food laws and regulations. Operator may utilize up to two secured
storage areas for vessel rentals and other patron services, at the sole cost
and expense of the Operator. If such areas are utilized, they may be moved
or removed within 30 days at City Manager's request.
1.4 Staffing
1.4.1 Operator shall maintain an adequate and proper staff for its
authorized operations based on commercially reasonable
budget parameters and reasonable needs. Operator shall
designate one member of the staff as an Operations Manager
with whom City may deal on a daily basis. Operations
Manager shall be skilled in the management of businesses
similar to the campground/boat launch operations and shall
be subject to reasonable approval by the City Manager or
their designee. The Operations Manager shall devote
substantial time and attention to the operation of the Premises
and the Campground and render such services and
convenience to the public as are required. The Operations
Manager shall be fully acquainted with the operations of the
Premises, familiar with the terms and conditions prescribed
therefore by this Agreement, and authorized to act in the day-
to-day operations thereof.
Professional Services Agreement William's Bait and Tackle, Inc.
Operational Management of La Laguna Resort and Boat Launch
February 1, 2017
1.4.2 If an employee of the Operator is found to be detrimental to
the interest of the public, the City reserves the right to provide
the Operator with written notice and Operator shall transfer or
reassign any such employee within a reasonable period of
time and such employee shall not be assigned to any other
City Premises.
1.4.3 Operator warrants that it fully complies with all laws regarding
employment of aliens and others, and that all its employees
performing services herein meet the citizens hip or a lien
status requirements contained in federal and state statutes
and regulations including, but not limited to, the Immigration
Reform and Control Act of 1986 (P.L. 99-603). Operator shall
obtain, from all covered employees performing services here
in, all verification and other documentation of employment
eligibility status required by federal statutes and regulations
as they currently exist and as they may be hereafter
amended. Operator shall retain such documentation for all
covered employees for the period prescribed by law.
Operator shall indemnify, defect, and hold harmless, the City,
its agents, officers and employees from employer sanctions
and any other liability which may be assessed against
Operator or City or both in connection with any alleged
violation of federal statutes or regulations pertaining to the
eligibility for employment of persons performing services
under this Agreement.
1.4.4 Operator shall file with the City Manager a certificate for each
member of the food and beverage staff showing that within
the last two (2) years, such person has been examined and
has been found to be free of communicable tuberculosis.
"Certificate" means a document signed by the examining
physician and surgeon who is licensed under Chapter 5
(commencing with Section 2000), Division 2 of the California
Business and Professions Code, or a notice from a public
health agency or unit of the Tuberculosis Association which
indicates freedom from active tuberculosis.
1.5 Open Hours. Operator agrees to operate the Premises and maintain
open hours daily from sunrise to sunset, and provide staffing as needed for
campground operations between sunset and sunrise.
1.6 Schedule of Fees. Operator shall maintain and post a complete
schedule of prices for all fees, charges, goods, rentals, and services supplied
to the public on or from the Premises. The City reserves the right to review
and approve said fees and charges. Prices shall comply with the
requirements under any grant agreement with the Department of Boating &
Waterways concerning launch fees and such other prices shall be fair and
reasonable based upon the following considerations: that the campground
and boat operation is intended to serve the needs of the public for the goods
Professional Services Agreement William's Bait and Tackle, Inc.
Operational Management of La Laguna Resort and Boat Launch
February 1, 2017
and/or services supplied at a fair and reasonable cost; comparability with
prices charged for similar goods and/or services supplied in the Riverside
Metropolitan Area; and reasonableness of profit margins in view of the cost
of providing same in compliance with the obligations assumed in this
Agreement. In the event that the City notifies Operator that prices being
charged are not fair and reasonable, Operator shall have the right to confer
with the City Manager and justify the prices. Following reasonable
conference and consultation thereon, Operator shall make such price
adjustments as may be ordered by the City Manager. Operator may appeal
the determination of the City Manager to the City Council, whose decision
thereon shall be final and conclusive.
1.7 Quality of Services. Service to the public, with goods, services, and
merchandise of a high quality and at reasonable charges, is of prime concern
to the City and is considered a part of the consideration for this Agreement.
Therefore, Operator agrees to operate and conduct its operation In a first-
class manner, and comparable to other first-class facilities providing similar
activities, programs and services. Where such facilities are provided,
Operator shall maintain a high standard of service at least equal to that of
similar events and programs conducted on City parks and/or adjacent
communities and to those prevailing in such areas for similar products and
services, and without discrimination. Operator, following receipt of written
notification thereof, shall immediately remove or withdraw from sale of any
goods or services which may be found objectionable to the City Manager
based on findings that the provision of such goods or services is harmful to
the public welfare.
1.8 Utilities. With respect to the Premises, City shall provide and pay for
any necessary utilities, including telephone, water and electricity, consumed
by Operator in the operation of the Premises. Operator waives any and all
claims against City for compensation for loss or damage caused by a defect,
deficiency or impairment of any utility system, water system, water supply
system, drainage system, waste system, heating or gas system, electrical
apparatus or wires serving the Premises. City shall pay for any new
connections to the existing utility services necessary for the operation of the
Premises, provided, however that Operator shall for any new connection to
existing utility services necessary for the operation of the General Store.
1.9 Maintenance and Repair of Premises. During the term of this
Agreement, City shall be responsible at its sole cost and expense, for
conducting all Maintenance and Repair of the Premises in order to assure
that the Premises are maintained in a reasonable good state of repair and
preserve the Premises and the improvements thereon are preserved for a
reasonable useful life. Notwithstanding the foregoing, the City shall have no
obligation to maintain or repair the William's Bait and Tackle Store nor any
equipment owned by Operator (including rentals equipment such as vessels)
related to the operation thereof. Maintenance and repairs shall include but
not be limited to, maintaining fire clearance, tree trimming and removal,
repair of broken fixtures and facilities, plumping and electrical fixtures, and
campground equipment.
Professional Services Agreement William's Bait and Tackle, Inc.
Operational Management of La Laguna Resort and Boat Launch
February 1, 2017
1.10 Housekeeping. During the term of this Agreement, Operator shall be
responsible for conducting all Housekeeping duties of the Premises in order
to assure that the Premises are in good and substantial condition, and kept
in a clean, safe, wholesome and sanitary condition free of trash, garbage, or
obstructions of any kind. City shall provide all necessary equipment,
materials and supplies used for housekeeping purposes, such as but not
limited to, sanitary, landscaping, and cleaning supplies. Housekeeping shall
include but not be limited to, cleaning of public restrooms and showers, trash
pick-up, campsite preparation, minor repairs/replacement to campground
equipment, pest inspection and control, landscape mowing and edging,
shrub trimming and non -reoccurring removal of hanging tree limbs,
vacuuming, wiping, and cleaning of all adjacent grounds and walks.
1.11 Sanitation. No offensive matter, refuse, or substance constituting an
unnecessary, unreasonable or unlawful fire hazard, or material detrimental
to the public health, shall be permitted or remain on the Premises and within
a distance of fifty (50) feet thereof, and Operator shall prevent any
accumulation thereof from occurring. Operator shall furnish all equipment
and materials necessary, including trash receptacles of the size, type, color
and number required by the City Manager, to maintain the Premises and the
area within a distance of fifty (50) feet thereof in a sanitary condition. City
shall provide that all refuse is collected no less than once a week by its
existing franchise hauler.
1.12 Office and Service Supplies. During the term of this Agreement,
Operator shall be responsible at its sole cost and expense, for purchasing
and maintaining all necessary criice supplies, employee uniforms and other
supplies required to perform services.
1.13 Vehicles and golf carts. City agrees to provide two vehicles and two
golf carts for use only on the Premises in order to perform duties associated
with the scope provided herein. Operator shall ensure that each driver of the
vehicle has a valid California Drivers' License and is listed on the Operator's
insurance policy. City shall be responsible for sole cost and expense of
maintenance and fuel costs associated with the vehicles.
1.14 Concessions. City shall provide at its sole cost and expense
campground related concessions, such as firewood and ice, where the City
receives the total revenue generated from such concessions sales.
1.15 Advertising and Promotions. Operator shall work in conjunction with
the City on advertising related to the campground and day use areas of the
Premises. All advertising and promotional materials shall receive approval
from the City Manager or designee prior to being distributed. Any advertising
or promotional materials promulgated by the Operator shall include the
words "Lake Elsinore" as part of the name or identification of the Premises.
1.16 Events. Operator shall not promote or sponsor private or public
events on the Premises, unless authorized by a special event permit issued
by the City of Lake Elsinore.
Professional Services Agreement William's Bait and Tackle, Inc.
Operational Management of La Laguna Resort and Boat Launch
February 1, 2017
1.17 Security. City, at its own expense, may provide any legal devices or
equipment and the installation thereof, designated for the purpose of
protecting the Premises from theft, burglary or vandalism, provided written
approval for installation thereof is first obtained from the City Manager,
1.18 Safety. Operator shall immediately correct any unsafe condition of
that portion of the Premises designated as the campground and Boat Launch
area, as well as any unsafe practices occurring thereon. Operator shall
immediately notify City of any unsafe condition on the Premises and correct
any unsafe practices occurring thereon. Operator shall obtain emergency
medical care for any member of the public who is in need thereof, because
of illness or injury occurring on the Premises. Operator shall cooperate fully
with City in the investigation of any accidental injury or death occurring on
the Premises, including a prompt report thereof to the City Manager.
Operator shall cooperate and comply fully with county, state, municipal,
federal or any other regulatory agency having jurisdiction there over,
regarding any safety inspections and certifications of any and all Operator's
structures, enclosures, vehicles, booths, equipment and rides.
1.19 Disorderly Conduct. Operator agrees to exercise every reasonable
effort to not allow any loud boisterous or disorderly persons about the
Premises.
1.20 Illegal Activity. Operator shall not permit any illegal activities to be
conducted upon the Premises.
1.21. Maximize Use Operator shall use its best efforts to maximize the
public use of the Premises and the facilities thereon in accordance with the
conditions herein. However, Operator shall not interfere with public use of
the remaining areas of LERA.
1.22 Construction. In the event City constructs or causes to be constructed
new facilities and/or improvements for the licensed operations at the
Premises, this Agreement shall continue in full force and effect., Operator
agrees to cooperate with City in the event the construction affects the
Premises by vacating and removing therefrom all items of inventory,
containers, equipment and furnishings for such periods as are required by
the construction of the new facilities. Operator further agrees to cooperate in
the determination of the abatement and/or other relief to be provided by
furnishing all information requested relative to the operation and permitting
examination and audit of all accounting records kept in connection with the
conduct thereof.
1.23 Right of Entry. Any officers and/or authorized employees of the City
may entre upon the Premises at any and all reasonable times for the purpose
of determining whether or not Operator is complying with the terms and
conditions hereof, or for any other purpose incidental to the rights of the City.
Additional, City has the right to use the boat launch at any time at no cost to
the City orthe public. In the event of an unauthorized abandonment, vacation
or discontinuance of operations for a period in excess of twenty-four (24)
Professional Services Agreement William's Bait and Tackle, Inc.
Operational Management of La Laguna Resort and Boat Launch
February 1, 2017
hours, Operator hereby irrevocably appoints City as an agent for continuing
operation of the license granted herein, and in connection therewith
authorizes the officers and employees thereof to (1) take possession of the
such licensed area, including all improvements, equipment and inventory
thereon; (2) remove any and all persons or property on said area and place
any such property in storage for the account of and at the expense of
Operator; (3) sublease or sublicense the Premises; and (4) after payment of
all expenses of such subleasing or sublicensing, apply all payments realized
therefrom to the satisfaction and/or mitigation of all damages arising from
Operator's breach of this Agreement.
2. Term. Unless earlier terminated as provided elsewhere in this Agreement,
this Agreement shall continue in full force and effect for a period of five (5) months,
commencing on February 1, 2017 and ending on June 30, 2017. The City may, at its sole
discretion, extend the term of this Agreement on a 6 -month basis not to exceed two (2)
additional six (6) month renewal terms by giving written notice thereof to Operator not less
than thirty (30) days before the end of the contract term, such notice to be exercised by the
City Manager.
3. Compensation. Compensation to be paid to Operator shall exceed $145,000
for the period designated February 1 through June 30, 2017, without additional written
authorization from the City. Out of pocket expenses shall be approved by City prior to being
expended and will be reimbursed at cost without an inflator or administrative charge.
Compensation to Operator shall be withheld in the event that the Operator has failed to
make a timely payment of the Revenues, as described in Section 5.
4. ^° Method of Payment. Operator shall promptly submit billings to the C:i''.y
describing the services and related work performed during the preceding week to the extent
that such services and related work were performed. Operator's bills shall include a brief
description of the services performed, the date the services were performed, the number of
hours spent and by whom, and a description of any reimbursable expenditures such as but
not limited to payroll, insurance and other expenses incurred by operations.. City shall pay
Operator no later than forty-five (45) days after receipt of the weekly invoice by City staff.
5. Revenues. Operator shall pay and remit boat launch fees, lake use pass
fees, campground fees, and concessions revenue to the City daily. In addition, Operator
shall pay the City a sum equal to four (4%) of William's Bait and Tackle store gross receipts
on the first (151) day, or first business day, of the calendar month. Payment shall be by check
or draft made payable to City of Lake Elsinore, Attention: Finance Department, 130 South
Main Street, Lake Elsinore, California 92530. A late payment charge of two percent (2%)
per month shall be added to any late payment received. Online campground reservation
fees shall be collected at the point of sale.
6. Suspension or Termination.
a. The City may at any time, for any reason, with or without cause,
suspend or terminate this Agreement, or any portion hereof, by serving upon the Operator
at least ten (10) days prior written notice. Upon receipt of such notice, the Operator shall
immediately cease all work under this Agreement, unless the notice provides otherwise. If
Professional Services Agreement William's Bait and Tackle, Inc.
Operational Management of La Laguna Resort and Boat Launch
February 1, 2017
the City suspends or terminates a portion of this Agreement such suspension or termination
shall not make void or invalidate the remainder of this Agreement.
b. In the event this Agreement is terminated pursuant to this Section,
the City shall pay to Operator the actual value of the work performed up to the time of
termination, provided that the work performed is of value to the City. Upon termination of
the Agreement pursuant to this Section, the Operator will submit an invoice to the City,
pursuant to Section entitled "Method of Payment" herein.
7. Ownership of Documents. All documents, receipts, and reports prepared by
the Operator, its officers, employees and agents and subcontractors in the course of
implementing this Agreement, except working notepad internal documents, shall become
the property of the City upon payment to Operator for such work, and the City shall have
the sole right to use such materials in its discretion without further compensation to Operator
or to any other party. Operator shall, at Operator's expense, provide such reports, plans,
studies, documents and other writings to City upon written request. City acknowledges that
any use of such materials in a manner beyond the intended purpose as set forth herein
shall be at the sole risk of the City. City further agrees to defend, indemnify and hold
harmless Operator, its officers, officials, agents, employees and volunteers from any claims,
demands, actions, losses, damages, injuries, and liability, direct or indirect (including any
and all costs and expenses in connection therein), arising out of the City's use of such
materials in a manner beyond the intended purpose as set forth herein.
a. Licensing of Intellectual Property, This Agreement creates a
nonexclusive and perpetual license for City to copy, use, modify, reuse, or sublicense any
and all copyrights, designs, and other intellectual property embodied in plans,
specifications, studies, drawings, estimates, and other documents or works of authorship
fixed in any tangible medium of expression, including but not lirniied'to, physical drawings
or data magnetically or otherwise recorded on computer diskettes, which are prepared or
caused to be prepared by Operator under this Agreement ("Documents & Data"). Operator
shall require that all subcontractor agree in writing that City is granted a nonexclusive and
perpetual license for any Documents & Data the subcontractor prepares under this
Agreement. Operator represents and warrants that Operator has the legal right to license
any and all Documents & Data. Operator makes no such representation and warranty in
regard to Documents & Data which were prepared by design professionals other than
Operator or provided to Operator by the City. City shall not be limited in any way in its use
of the Documents & Data at any time, provided that any such use not within the purposes
intended by this Agreement shall be at City's sole risk.
b. Confidentiality. All ideas, memoranda, specifications, plans,
procedures, drawings, descriptions, computer program data, input record data, written
information, and other Documents & Data either created by or provided to Operator in
connection with the performance of this Agreement shall be held confidential by Operator.
Such materials shall not, without the prior written consent of City, be used by Operator for
any purposes other than the performance of the services under this Agreement. Nor shall
such materials be disclosed to any person or entity not connected with the performance of
the services under this Agreement. Nothing furnished to Operator which is otherwise known
to Operator or is generally known, or has become known, to the related industry shall be
deemed confidential. Operator shall not use City's name or insignia, photographs relating
to project for which Operator's services are rendered, or any publicity pertaining to the
Professional Services Agreement William's Bait and Tackle, Inc.
Operational Management of La Laguna Resort and Boat Launch
February 1, 2017
Operator's services under this Agreement in any magazine, trade paper, newspaper,
television or radio production or other similar medium without the prior written consent of
City.
8. Operator's Books and Records.
a. Operator shall maintain any and all ledgers, books of account,
invoices, vouchers, canceled checks, and other records or documents evidencing or relating
to charges for services, or expenditures and disbursements charged to City for a minimum
period of three (3) years, or for any longer period required by law, from the date of final
payment to Operator to this Agreement.
b. Operator shall maintain all documents and records which
demonstrate performance under this Agreement for a minimum period of three (3) years, or
for any longer period required by law, from the date of termination or completion of this
Agreement.
C. Any records or documents required to be maintained pursuant to this
Agreement shall be made available for inspection or audit, at any time during regular
business hours, upon written request by the City Manager, City Attorney, City Auditor or a
designated representative of these officers. Copies of such documents shall be provided
to the City for inspection at City Hall when it is practical to do so. Otherwise, unless an
alternative is mutually agreed upon, the records shall be available at Operator's address
indicated for receipt of notices in this Agreement.
d. Where City has reason to believe that such records or documents
may be lost or discarded due to dissolution, disbandlrerit or ter nination of Operator's
business, City may, by written request by any of the above-named officers, require that
custody of the records be given to the City and that the records and documents be
maintained in City Hall. Access to such records and documents shall be granted to any
party authorized by Operator, Operator's representatives, or Operator's successor -in -
interest.
9. Independent Operator. It is understood that Operator, in the performance of
the work and services agreed to be performed, shall act as and be an independent Operator
and shall not act as an agent or employee of the City.
10. PERS Eligibility Indemnification. In the event that Operator or any employee,
agent, or subcontractor of Operator providing services under this Agreement claims or is
determined by a court of competent jurisdiction or the California Public Employees
Retirement System (PERS) to be eligible for enrollment in PERS as an employee of the
City, Operator shall indemnify, defend, and hold harmless City for the payment of any
employee and/or employer contributions for PERS benefits on behalf of Operator or its
employees, agents, or subcontractors, as well as for the payment of any penalties and
interest on such contributions, which would otherwise be the responsibility of City.
Notwithstanding any other federal, state and local laws, codes, ordinances
and regulations to the contrary, Operator and any of its employees, agents, and
subcontractors providing service under this Agreement shall not qualify for or become
entitled to, and hereby agree to waive any claims to, any compensation, benefit, or any
incident of employment by City, including but not limited to eligibility to enroll in PERS as an
Professional Services Agreement William's Bait and Tackle, Inc.
Operational Management of La Laguna Resort and Boat Launch
February 1, 2017
employee of City and entitlement to any contribution to be paid by City for employer
contribution and/or employee contributions for PERS benefits.
11. Interests of Operator. Operator (including principals, associates and
professional employees) covenants and represents that it does not now have any
investment or interest in real property and shall not acquire any interest, direct or indirect,
in the area covered by this Agreement or any other source of income, interest in real
property or investment which would be affected in any manner or degree by the
performance of Operator's services hereunder. Operator further covenants and represents
that in the performance of its duties hereunder no person having any such interest shall
perform any services under this Agreement.
Operator is not a designated employee within the meaning of the Political Reform
Act because Operator:
a. will conduct research and arrive at conclusions with respect to his/her
rendition of information, advice, recommendation or counsel independent of the control and
direction of the City or of any City official, other than normal agreement monitoring; and
b. possesses no authority with respect to any City decision beyond
rendition of information, advice, recommendation or counsel. (FPPC Reg. 18700(a)(2).)
12. Professional Ability of Operator. City has relied upon the professional
training and ability of Operator to perform the services hereunder as a material inducement
to enter into this Agreement. Operator shall therefore provide properly skilled professional
and technical personnel to perform all services under this Agreement. All work performed
by Operator under this Agreement shall be in accordance with applicable legal requirements
and shall meet the standard of qu lity ordinarily to be expected of competent professionals
in Operator's field of expertise.
13. Compliance with Laws. Operator shall use the standard of care in its
profession to comply with all applicable federal, state and local laws, codes, ordinances and
regulations.
14. Licenses. Operator represents and warrants to City that it has the licenses,
permits, qualifications, insurance and approvals of whatsoever nature which are legally
required of Operator to practice its profession. Operator represents and warrants to City
that Operator shall, at its sole cost and expense, keep in effect or obtain at all times during
the term of this Agreement, any licenses, permits, insurance and approvals which are legally
required of Operator to practice its profession. Operator shall maintain a City of Lake
Elsinore business license.
15. Indemnity. Operator shall indemnify, defend, and hold harmless the City and
its officials, officers, employees, agents, and volunteers from and against any and all losses,
liability, claims, suits, actions, damages, and causes of action arising out of any personal
injury, bodily injury, loss of life, or damage to property, or any violation of any federal, state,
or municipal law or ordinance, to the extent caused, in whole or in part, by the willful
misconduct or negligent acts or omissions of Operator or its employees, subcontractors, or
agents, by acts for which they could be held strictly liable, or by the quality or character of
their work. The foregoing obligation of Operator shall not apply when (1) the injury, loss of
life, damage to property, or violation of law arises from the sole negligence or willful
Professional Services Agreement William's Bait and Tackle, Inc.
Operational Management of La Laguna Resort and Boat Launch
February 1, 2017
misconduct of the City or its officers, employees, agents, or volunteers and (2) the actions
of Operator or its employees, subcontractor, or agents have contributed in no part to the
injury, loss of life, damage to property, or violation of law. It is understood that the duty of
Operator to indemnify and hold harmless includes the duty to defend as set forth in Section
2778 of the California Civil Code. Acceptance by City of insurance certificates and
endorsements required under this Agreement does not relieve Operator from liability under
this indemnification and hold harmless clause. This indemnification and hold harmless
clause shall apply to any damages or claims for damages whether or not such insurance
policies shall have been determined to apply. By execution of this Agreement, Operator
acknowledges and agrees to the provisions of this Section and that it is a material element
of consideration.
16. Insurance Requirements.
a. Insurance. Operator, at Operator's own cost and expense, shall
procure and maintain, for the duration of the contract, unless modified by the City's Risk
Manager, the following insurance policies.
i. Workers' Compensation Coveraqe. Operator shall maintain
Workers' Compensation Insurance and Employer's Liability Insurance for his/her
employees in accordance with the laws of the State of California. In addition,
Operator shall require each subcontractor to similarly maintain Workers'
Compensation Insurance and Employer's Liability Insurance in accordance with the
laws of the State of California for all of the subcontractor's employees. Any notice
of cancellation or non -renewal of all Workers' Compensation policies must be
received by the City at least thirty (30) days prior to such change. The insurer shall
agree to waive all rights of subrogation against City, its officers, agents employees
and volunteers for losses arising from work performed by Operator for City. In the
event that Operator is exempt from Worker's Compensation Insurance and
Employer's Liability Insurance for his/her employees in accordance with the laws of
the State of California, Operator shall submit to the City a Certificate of Exemption
from Workers Compensation Insurance in a form approved by the City Attorney.
ii. General Liability Coverage. Operator shall maintain
commercial general liability insurance in an amount not less than one million dollars
($1,000,000) per occurrence for bodily injury, personal injury and property damage.
If a commercial general liability insurance form or other form with a general
aggregate limit is used, either the general aggregate limit shall apply separately to
the work to be performed under this Agreement or the general aggregate limit shall
be at least twice the required occurrence limit. Required commercial general liability
coverage shall be at least as broad as Insurance Services Office Commercial
General Liability occurrence form CG 0001 (ed. 11/88) or Insurance Services Office
form number GL 0002 (ed. 1/73) covering comprehensive General Liability and
Insurance Services Office form number GL 0404 covering Broad Form
Comprehensive General Liability. No endorsement may be attached limiting the
coverage.
iii. Automobile Liability Coverage. Operator shall maintain
automobile liability insurance covering bodily injury and property damage for all
activities of the Operator arising out of or in connection with the work to be performed
Professional Services Agreement William's Bait and Tackle, Inc.
Operational Management of La Laguna Resort and Boat Launch
February 1, 2017
under this Agreement, including coverage for owned, hired and non -owned vehicles,
in an amount of not less than one million dollars ($1,000,000) combined single limit
for each occurrence. Automobile liability coverage must be at least as broad as
Insurance Services Office Automobile Liability form CA 0001 (ed. 12/90) Code 1
("any auto"). No endorsement may be attached limiting the coverage.
iv. Watercraft Liability Coverage. Operator shall maintain
watercraft liability insurance appropriate for occurrence for bodily injury, personal
injury and property damage, and cover such services whether they are provided by
the Operator or by its employees, subcontractors, or subcontractors. The amount
of this insurance shall not be less than one million dollars ($1,000,000) on a claims -
made annual aggregate basis, or a combined single limit per occurrence basis.
b. Endorsements. Each general liability and automobile liability
insurance policy shall be with insurers possessing a Best's rating of no less than
A:VII and shall be endorsed with the following specific language:
i. The City, its elected or appointed officers, officials,
employees, agents and volunteers are to be covered as additional insured with
respect to liability arising out of work performed by or on behalf of the Operator,
including materials, parts or equipment furnished in connection with such work or
operations.
ii. This policy shall be considered primary insurance as respects
the City, its elected or appointed officers, officials, employees, agents and
volunteers. Any insurance maintained by the City, including any self-insured
retention the City may have, shall be considered excess insurance only and shall
not contribute with it.
iii. This insurance shall act for each insured and additional
insured as though a separate policy had been written for each, except with respect
to the limits of liability of the insuring company.
V. The insurer waives all rights of subrogation against the City,
its elected or appointed officers, officials, employees or agents.
V. Any failure to comply with reporting provisions of the policies
shall not affect coverage provided to the City, its elected or appointed officers,
officials, employees, agents or volunteers.
vi. The insurance provided by this Policy shall not be suspended,
voided, canceled, or reduced in coverage or in limits except after thirty (30) days
written notice has been received by the City.
C. Deductibles and Self -Insured Retentions. Any deductibles or self-
insured retentions must be declared to and approved by the City. At the City's option,
Operator shall demonstrate financial capability for payment of such deductibles or self-
insured retentions.
d. Certificates of Insurance. Operator shall provide certificates of
insurance with original endorsements to City as evidence of the insurance coverage
Professional Services Agreement William's Bait and Tackle, Inc.
Operational Management of La Laguna Resort and Boat Launch
February 1, 2017
required herein. Certificates of such insurance shall be filed with the City on or before
commencement of performance of this Agreement. Current certification of insurance shall
be kept on file with the City at all times during the term of this Agreement.
17, Notices. Any notice required to be given under this Agreement shall be in
writing and either served personally or sent prepaid, first class mail. Any such notice shall
be addressed to the other party at the address set forth below. Notice shall be deemed
communicated within 48 hours from the time of mailing if mailed as provided in this section.
If to City: City of Lake Elsinore
Attn: City Manager
130 South Main Street
Lake Elsinore, CA 92530
With a copy to: City of Lake Elsinore
Attn: City Clerk
130 South Main Street
Lake Elsinore, CA 92530
If to Operator:
Attn:
18. Entire Agreement. This Agreement constitutes the complete and exclusive
statement of Agreement between the City and ,Operatoi. All prior written and oral
communications, including correspondence, drafts, memoranda, and representations, are
superseded in total by this Agreement.
19. Amendments. This Agreement may be modified or amended only by a
written document executed by both Operator and City and approved as to form by the City
Attorney.
20. Assignment and Subcontracting. The parties recognize that a substantial
inducement to City for entering into this Agreement is the professional reputation,
experience and competence of Operator. Assignments of any or all rights, duties or
obligations of the Operator under this Agreement will be permitted only with the express
written consent of the City. Operator shall not subcontract any portion of the work to be
performed under this Agreement without the written authorization of the City. If City
consents to such subcontract, Operator shall be fully responsible to City for all acts or
omissions of those subcontractors. Nothing in this Agreement shall create any contractual
relationship between City and any subcontractor nor shall it create any obligation on the
part of the City to pay or to see to the payment of any monies due to any such subcontractor
other than as otherwise is required by law.
21. Waiver. Waiver of a breach or default under this Agreement shall not
constitute a continuing waiver of a subsequent breach of the same or any other provision
under this Agreement.
Professional services Agreement William's Bait and Tackle, Inc.
Operational Management of La Laguna Resort and Boat Launch
February 1, 2017
22. Severability. If any term or portion of this Agreement is held to be invalid,
illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining
provisions of this Agreement shall continue in full force and effect.
23. Controlling Law Venue. This Agreement and all matters relating to it shall
be governed by the laws of the State of California and any action brought relating to this
Agreement shall be held exclusively in a state court in the County of Riverside.
24. Litigation Expenses and Attorneys' Fees. If either party to this Agreement
commences any legal action against the other party arising out of this Agreement, the
prevailing party shall be entitled to recover its reasonable litigation expenses, including court
costs, expert witness fees, discovery expenses, and attorneys' fees.
25. Mediation. The parties agree to make a good faith attempt to resolve any
disputes arising out of this Agreement through mediation prior to commencing litigation.
The parties shall mutually agree upon the mediator and share the costs of mediation
equally. If the parties are unable to agree upon a mediator, the dispute shall be submitted
to JAMS or its successor in interest. JAMS shall provide the parties with the names of five
qualified mediators. Each party shall have the option to strike two of the five mediators
selected by JAMS and thereafter the mediator remaining shall hear the dispute. If the
dispute remains unresolved after mediation, either party may commence litigation.
26. Execution. This Agreement may be executed in several counterparts, each
of which shall constitute one and the same instrument and shall become binding upon the
parties when at least one copy hereof shall have been signed by both parties hereto. In
approving this Agreement, it shall not be necessary to produce or account for more than
one such counterpart.
27. Authority to Enter Agreement. Operator has all requisite power and authority
to conduct its business and to execute, deliver, and perform the Agreement. Each party
warrants that the individuals who have signed this Agreement have the legal power, right,
and authority to make this Agreement and to bind each respective party. The City Manager
is authorized to enter into an amendment or otherwise take action on behalf of the City to
make the following modifications to the Agreement: (a) a name change; (b) grant
extensions of time; (c) non-monetary changes in the scope of services; and/or (d) suspend
or terminate the Agreement.
28, Prohibited Interests. Operator maintains and warrants that it has not
employed nor retained any company or person, other than a bona fide employee working
solely for Operator, to solicit or secure this Agreement. Further, Operator warrants that it
has not paid nor has it agreed to pay any company or person, other than a bona fide
employee working solely for Operator, any fee, commission, percentage, brokerage fee, gift
or other consideration contingent upon or resulting from the award or making of this
Agreement. For breach or violation of this warranty, City shall have the right to rescind this
Agreement without liability. For the term of this Agreement, no member, officer or employee
of City, during the term of his or her service with City, shall have any direct interest in this
Agreement, or obtain any present or anticipated material benefit arising therefrom.
29. Equal Opportunity Employment. Operator represents that it is an equal
opportunity employer and it shall not discriminate against any subcontractor, employee or
applicant for employment because of race, religion, color, national origin, handicap,
Professional Services Agreement William's Bait and Tackle, Inc.
Operational Management of La Laguna Resort and Boat Launch
February 1, 2017
ancestry, sex or age. Such non-discrimination shall include, but not be limited to, all
activities related to initial employment, upgrading, demotion, transfer, recruitment or
recruitment advertising, layoff or termination.
30. Prevailing Wages. Operator is aware of the requirements of California Labor
Code Section 1720, et seq., and 1770, et seq., as well as California Code of Regulations,
Title 8, Section 16000, et seq., ("Prevailing Wage Laws"), which require the payment of
prevailing wage rates and the performance of other requirements on "public works" and
"maintenance" projects. Operator agrees to fully comply with all applicable federal and
state labor laws (including, without limitation, if applicable, the Prevailing Wage Laws). It is
agreed by the parties that, in connection with the Work or Services provided pursuant to
this Agreement, Operator shall bear all risks of payment or non-payment of prevailing wages
under California law, and Operator hereby agrees to defend, indemnify, and hold the City,
and its officials, officers, employees, agents, and volunteers, free and harmless from any
claim or liability arising out of any failure or alleged failure to comply with the Prevailing
Wage Laws. The foregoing indemnity shall survive termination of this Agreement.
31. Execution. This Agreement may be executed in several counterparts, each
of which shall constitute one and the same instrument and shall become binding upon the
parties when at least one copy hereof shall have been signed by both parties hereto. In
approving this Agreement, it shall not be necessary to produce or account for more than
one such counterpart.
[Signatures on next page]
Professional Services Agreement William's Bait and Tackle, Inc.
Operational Management of La Laguna Resort and Boat Launch
February 1, 2017
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
on the date first written above.
"CITY"
CITY OF LAKE ELSINORE, a municipal
corporation
Grant Yates, City Manager
ATTEST:
City Clerk
APPROVED AS TO FORM:
City Attorney
Attachments: Exhibit A —Premises Map
"OPERATOR"
William's Bait and Tackle, Inc., a California
Corporation
By:
Its:
Professional Services Agreement William's Bait and Tackle, Inc.
Operational Management of La Laguna Resort and Boat Launch
February 1, 2017
AMENDMENT NO.3 TO AGREEMENT FOR OPERATIONAL MANAGMENT
OF LA LAGUNA RESORT AND BOAT LAUNCH
THIS AMENDMENT NO. 3 TO AGREEMENT FOR OPERATIONAL
MANAGEMENT OF LA LAGUNA RESORT AND BOAT LAUNCH ("Amendment No. 3
"), dated for identification purposes as of January 1, 2017, is made by and between the CITY
OF LAKE ELSINORE. a municipal corporation (hereinafter referred to as "City") and
WILLIAMS BAIT & TACKLE, INC., a California corporation, doing business as William's
Bait, Tackle and Boat Rental (hereinafter referred to as "Operator").
RECITALS
This Amendment No. 3 is made with reference to the following facts which are a
substantive part hereof:
A. City and Operator have entered into that certain agreement entitled "Agreement
for Operational Management of La Laguna Resort and Boat Launch" dated as of June 1, 2015
(the "Original Agreement") and that certain Amendment No. 1 to Agreement for Operational
Management of La Laguna Resort and Boat Launch dated December 1, 2015 (as amended,
"Amendment No. I") and that certain Amendment No. 2 to Agreement for Operational
Management of La Laguna Resort and Boat Launch dated May 31, 2016 (as amended,
"Amendment No. 2"). The Original Agreement, AmIndment No. 1 and Amendment No. 2 are
collectively referred to herein as the "Amended Agreement." Except as otherwise defined
herein, all capitalized terms used herein shall have the meanings set forth for such terms in the
Amended Agreement.
B. The City and Operator now desire to extend the term of the Amended
Agreement with respect to the Premises for one (1) month, through January 31, 2017, while the
parties negotiate a subsequent operating agreement during the anticipated construction and
rehabilitation of the entire site.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
conditions set forth herein, the parties hereto agree as follows:
I. Section 3.2 , Term, of the Amended Agreement is hereby amended in its
entirety to read as follows:
"3.2 Provided Operator is not then in default under the terms of this Agreement, at the
expiration of the extension term under Amendment No.2, the term of this Agreement with
respect to the Premises shall be extended to January 31, 2017 on the same terms and
conditions as contained in the Amended Agreement.
2. Exhibit "B", "Amended Schedule of Fees and Hours" as attached to
Amendment No. 2 are ratified and shall be applicable through January 31, 2017.
3. Except for the changes specifically set forth herein, all other terms and
conditions of the Amended Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Amendment No. 3 on the
respective dates set forth below.
WILLIAMS BAIT & "TACKLE, INC., a
California corporation, doing business as
WILLIAMS BAIT, TACKLE, and BOAT
RENTAL
Dated: 2016 By:
William Johnson, President
CITY OF LAKE ELSINORE, a municipal
corporation
Dated: 12016 By:
Grant Yates, City Manager
ATTEST:
Susan M. Domen, MMC, City Clerk
APPROVED AS TO FORM:
Barbara Leibold, City Attorney
AMENDMENT NO. 2 TO AGREEMENT FOR OPERA'T'IONAL MANAGEMENT
OF LA LAGUNA RESORT AND BOAT LAUNCH
THIS AMENDMENT NO. 2 TO AGREEMENT FOR OPERATIONAL.
MANAGEMENT OF LA LAGUNA RESORT AND BOAT LAUNCH ("Amendment No.
2"), dated for identification purposes as of May 31, 2016, is made by and between the CITY OF
LAKE ELSINORI, a municipal corporation (hereinafter referred to as "City") and WILLIAMS
BAIT & TACICI,E, INC., a California corporation, doing business as William's Bait, Tackle and
Boat: Rental (hereinafter referred to as "Operator").
RECITALS
This Amendment No. 2 is made with reference to the following facts which are a
substantive part hereof:
A. City and Operator have entered into that certain agreement entitled "Agreement
for Operational Management of La Laguna Resort and Boat Launch" dated as of ,lune 1, 2015
and that certain Amendment No. 1 to Agreement for Operational Management of La Laguna
Resort And Boat Launch dated December 1, 2015 (as amended, the Amended Agreement").
Except as otherwise defined herein, all capitalized terms used herein shall have the meanings set
forth for such terms in the Amended Agreement.
NOW, THEREFORE, in consideration of the mutual promises, covenants and conditions
set forth herein, the Parties hereto agree as follows:
Section 3.2, Term, of the Amended Agreement is hereby amended to read in its
entirety as follows:
3.2 Provided Operator is not then in default under the terms of this
Agreement, at the expiration of the Initial Operating Term, the City (acting through its
City Manager) and Operator may, upon both party's mutual agreement, extend the term
of this Agreement with respect to the Premises as follows:
a. for one (1) six (6) month term, on the same terms and conditions as
contained in this Agreement (the "First Extension"). The parties have previously agreed
to the First Extension pursuant to Amendment No. 1;
b. for one (1) seven (7) month term (commencing on June 1, 2016),
on the same terms and conditions as contained in this Agreement (the "Second
Extension"). 'f lie parties agree to the Second Extension pursuant to Amendment No. 2;
C. for one (1) six (6) month term, on the same terms and conditions as
contained in this Agreement (the "Third Extension");
d. for one (1) six (6) month term, on the same terms and conditions as
contained in this Agreement (the "Fourth Third Exiension");
Second Amendmert to Ln Laguna OpUnlionS Agreement 052416
e. for one (1) six (6) month term, on the sable terms and conditions as
contained in this Agreement (the "Fifth Extension").
The First, Second, Third, Fourth and Fifth Extensions, if exercised upon
the mutual agreement by the City and the Operator as provided herein, are hereinafter
referred to as the "Extension Term."
2. The third sentence of Section 4.5, Revenues and Payments, of the Amended
Agreement is hereby amended to provide that any check or draft be made payable to Williams Bait &
Tackle, Inc.
3. Exhibit "B", "Schedule of Fees and Ilours" is hereby replaced with the exhibit
attached to this Amendment No. 2 and identified as Exhibit "B", "Amended Schedule of Fees
and Hours (Effective 6/1/2016)."
4. Except for the changes specifically set forth herein, all other terms and conditions
of the Amended Agreement shall remain in full force and effect.
second Amendment to La LAgunn Opeintiom Agicemunl 052416 2
IN WI`T'NESS WHEREOF, the parties have executed this Amendment No. 2 on the
respective dates set forth below.
WILLIAMS BAIT & TACKLE, INC., a
California corporation, doing business as
WILLIAMS BATT, TACKLE AND BOAT
RVNTAL
DATED: _ ✓/ 2016 By:..._�
William Johnson, Pr _idem
DATED: _V21 %
4---,2016
ATTEST:
City Cleric
APPROVED AS TO
Attorney
Second Amcminwilt to La hipma Opandion., Agwemcnl 0S24I6 3
CITY OF LAKE ELSINORE, a municipal
corporation
S
'31a L -ales City Manager
EXHIBIT "B"
AMENDED SCIIEDULE OF FEES AND HOURS (Effective 6/1/2015)
During the months of .lune through October the following services will be provided from the
hours of 6:00 am until 8:00 p.m.:
Management services
Weekly Supervision of Gatehouse and Grounds Staff 35 hrs
Grounds and Gatebouse Staff 210 lus
Weekly Billing $7,995
During the months of November through March the following services will be provided from the
hours of 7:00 a.m. until 5:00 p.m.:
Management services
Weekly Supervision of Gatehouse and Grounds Staff 30 hrs
Grounds and Gatehouse Staff 110 hrs
Weekly Billing $4,782
During the months of April and May the following services will be provided 7:00 a.m. until 6:00
P.111,:
Management services
Weekly Supervision of Gatehouse and Grounds Staff 35 his
Grounds and Gatehouse Staff 120 hrs
Weekly Billing $5,061
Billing rate is subject to change based on applicable changes to federal, stats and local
employment laws.
Increased 11ol13-s of service will be available on written request from the City of Lake Flsinore.
Increased fees will be based upon a percentage of additional hours of service.
Week or Weekly means Monday through Sunday.
COMMERCIAL CERTIFICATE OF INSURANCE Issue Date (Ml
AGENCY ROBERT DAPPER INSURANCGAGENCY
06/03/2016
Maine
176321RVINEDLVDIM00
This certificate is issued as a matter of information only and confers no rights
&
upon the certificate holder. This certificate does not amend, extend or alter the
Address TUST(N, CA 92)80
coverage afforded by the policies shown below.
Busll657-600.8106 FRxf714-8761449
COMPANIES PROVIDING INSURANCE
LETTER tETIEfl
COMn.WV
A: Scottsdale Insurance Company
INSURED William .fohnson.
Name
DBA. Williams Bait and Tackle and [foal Rentals
e
32040 Riverside Drive
eonluurr
mneu
Address Lake Elsinore„ CA 92530
COVERAGES
THILIC
1. ...Illy TNPT'1Nf; 111. IIRTED
u- -C nFrt, 1•.0 nOY W,YHSI PNUING
ANY NN�NN,yj—
1.MCONYIII.R OY ANY U .l l IGEN NFl.,. mnY tlE EVPD Ort RAY pCRT/:Ilu. YHI: IN9lIRnlYGi:
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04/10/2016
04/10/2017
AGGNE�AT=
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1,000,000
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omecns a courRAcrorss PRO r
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EACH OCCURRENCE
$ 1,000,000
FIRE DAMAGE (Any one FNO
$ 100,000
MEDICAL EXPENSE
(Anyonepareon)
S 5,000
COMBINED
❑
AUTOMOBILE LIABILITY
SINGLE LIMIT
$
❑
ALL OWNED COMMERCIAL AUTOS
BODILY INJURY
(Poi PERSON)
$
❑
SCHEDULED ADIOS
VOOIIY INJURY
❑
HIRED AUTOS
(PERACCIDENT)
$
❑
NON OWNNI)AUTOS
PROPERTY DAMAGE
$
❑
GARAGE LIABILITY
GARAGE AGGREGATE
$
❑
UMBRELLA LIABILITY
LIMIT
$
STATUTORY
_
❑
WORKERS'COMPENSATI O N
EACH ACCor.m
$
AND
DISEASE—EACH EMPLOYEE
s
EMPLOYERS'LIBILITY
DISEASE POLICY LIMIT
$
DESCRIPTION OF OPERATI ONSNEHICIESIRESTRICTIONSISPECIAL ITEMS: Eisbing boats and tackle rentals and bait suppf les, City Of Lake Elsirl0i'e N Included as
additional
insured for the facility Iocal'ed at 32040 Riverside Dr.
Lake Elsinore, CA 92530
CANCELLATION '
CERTIFICATE 10 LOER
SII OULU ANY OF THE ABOVE DESCRIBED POLICIES RE CANCELLED BEFORE THE EXPIRATION DAT F. THEREOF.
THE ISSUING COMPANY WILL LNAAVOR TO MAIL 90 DAYS WRn TCN NOTICE TO TI HE CERTIFICATE HOLDS
NAME TO THE I FFT RUT FAILURE 1'O MAI I. SUCH NOTICE SHALL IMPOSE NO Out IGNU ON OR LIABILITY OF
City of Lake Elsinore
ANY KIND UPON THE 00 (APANY, ITS AGENTS OR REPRESENTATIVES.
Name
130 South brain Street
$
Address
Lake Elsinore, CA 92530
Ph': (951) G74-3124
AUilIORIZEO REPRESEN A VE
Affinity Affiliation: Dodge
For Service:
__._.„_ �_..-_................._ ___ _-__..___.,-.....-
1.800-2.25-8286
Vehicles Covered by Your Policy
Lif eny Mutual
VEI I YEAR MAKE MODEL VEHICLE 10 NUMBER
l.thet ty
__-_....—DODGE__....__,_............._—.Dl1..R__.._ANG0_.__-__.........._._._7C4R...17HDG3EC500797-
.._.._.,�..__2011 ... _4 -
1
Policy Declarations
2 2009 DODGE RAM 1 D31-1131 BKX9S807739
ir�sunnuce
Each Person
LlbartyMutual.com
Coverage Details
$
Your total annual policy prernium for all covered vehicles is shown below. A premium
A summary of your auto insurance coverage
Is shown for each type of coverage you have purchased for each vehicle. Where no
GO PAPERLESS
Iftim
premium is shown, you have not purchased the indicated coverage for thatvo
Thank you for renewing with us.
Each Accidom
,
Coverage Inff'or'rinatiorl ���
Your declarations are effective as of 0470312016.
INSURANCE INFORMATION
Y
ACTION
teach Person
Named Insured: Christina Johnson
$77
REQUIRED:
William Johnson
Uninsured Motorists $
250,000
Fach Person
Please review and '
$239
Policy Number: A02-268.113374-'706 6
500,000
haap for your records.
Policy Period: 04103/2016-04103/2017 12:01 AM
standard time at the address of the
Named Insured as stated below.
.__..___..... ...... ...... ..... _.........
OUFSFIONS ABOUT
Malting Address: 198 S Nebraska St
YOUR POLICY?
Lake Elsinore CA 92530-1853
--------- ._-_..__...__...—_..__.
By Phone
Affinity Affiliation: Dodge
For Service:
__._.„_ �_..-_................._ ___ _-__..___.,-.....-
1.800-2.25-8286
Vehicles Covered by Your Policy
Lif eny Mutual
VEI I YEAR MAKE MODEL VEHICLE 10 NUMBER
PO Box 970
__-_....—DODGE__....__,_............._—.Dl1..R__.._ANG0_.__-__.........._._._7C4R...17HDG3EC500797-
.._.._.,�..__2011 ... _4 -
1
Mishawaka IN 46546
2 2009 DODGE RAM 1 D31-1131 BKX9S807739
Malt us online
Each Person
LlbartyMutual.com
Coverage Details
$
Your total annual policy prernium for all covered vehicles is shown below. A premium
Each Accident
Is shown for each type of coverage you have purchased for each vehicle. Where no
GO PAPERLESS
Iftim
premium is shown, you have not purchased the indicated coverage for thatvo
,.�.,hicle. Manage your policy 2417
Each Accidom
on $Service
Coverage Inff'or'rinatiorl ���
berxyAAunrar.co:n/ruglater
rotal Annual Policy Premium 53,540.50
Your discounts and benefits have been applied. Includes state sales tax and local surcharge
rvhore applicable.
COVERAGE LIMITS
PREMIUM PER VEHICLE
To report a claim
By Phone
1-800.2CLAIMS
11-800-22.5-24671
Online
Libertymutual.com/claims
AUt"0 3079 10 09 Page 1 of 4
VEH 1
VEH 2
A. Liability
5364
$1.357
BodfV Injury $
250,000
Each Person
Yes
Yes
$
600,000
Each Accident
Property Damage $
100,000
Each Accidom
B. Medical Payments
$
1,000
teach Person
$17
$77
C. Uninsured Motorists
Uninsured Motorists $
250,000
Fach Person
655
$239
Bodily Injury $
500,000
Each Accident
To report a claim
By Phone
1-800.2CLAIMS
11-800-22.5-24671
Online
Libertymutual.com/claims
AUt"0 3079 10 09 Page 1 of 4
CALIFORNIA EVIDENCE OF
LIABILITY INSURANCE
„k Liberty
Nklxfxeal.
POLICY INFORMATION �' VEHICLE INFOIIMA I -[ON
INSIIIIapCf:
�' CONTACT US
Polley Numb., V." 2.009
Ta mport n Gnlm
1-BOO.2CLAIMS
A02.268-1133'74-70 6 6
M. a OOUGE
H1 BOO.225.24071
Policy EM.IID%.
04/03/2016 Iw a.l RAM
Cast.mm..M..
1-800-225-8285
Policy C.,],rll.n Onto vabM.I rllft.6.. Numb"
04/03/2017 1 U3I-IB 181CX 9 5807739
Ila.d.W. As.l.t"m.
1-800-426.9898
Nam. of 1,, e -b
. .... -........ —
CHRISTINA JOHNSON
card etman.. nma
WILLIAM JOHNSON
04/03/2016
198 S NEBRASKA S7
LAKE ELSINORC CA 92530.1853
04 n oay.
QA//033/20/20 17
C.rn'., N.m.: JB12R1'Y MUTUAL f ME INSURANCE CO.
NAIC Nbmb.r: 23035
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Y
ENDORSEMENT AGREEMENT
e 9136156-16
RENEWAL
SP
HOME OFFICE
SAN FRANCISCO PAGE 1 OF 1
ALL EFFECTIVE DATES ARE
AT 12:01 AM PACIFIC EFFECTIVE JUNE 26, 2016 AT 12.01 A.M.
STANDARD TIME OR THE
TIME INDICATED AT
PACIFIC STANDARD TIME
WILLIAMS BAIT & TACKLE, INC.
32040 RIVERSIDE DR
LAKE ELSINORE, CA 92530
ANY CONTRADICTION BETWEEN THE POLICY AND THIS ENDORSEMENT
WILL BE CONTROLLED BY THIS ENDORSEMENT.
IT IS AGREED THAT THE DEPOSIT PREMIUM FOR THIS POLICY IS
CHANGED TO -
$1,568.00
NOTHING IN THIS ENDORSEMENT CONTAINED SHALL BE HELD TO VARY, ALTER, WAIVE
OR EXTEND ANY OF THE TERMS, CONDITIONS, AGREEMENTS, OR LIMITATIONS OF THIS
POLICY OTHER THAN AS STATED. NOTHING ELSEWHERE IN THIS POLICY SHALL BE
HELD TO VARY, ALTER, WAIVE OR LIMIT THE TERMS, CONDITIONS, AGREEMENTS OR
LIMITATIONS OF THIS ENDORSEMENT,
COUNTERSIGNED AND IISS�UED ATSAN
/FRANCISCO! JULY If 22016
AUTHORIZED REPRESEN�ttiWflVE PRESIDENT AND CEO
SCIF FORM 10217 IREV.7.20141 OLD OF 217
ENDORSEMENT AGREEMENT
9136158-16
RENEWAL
SP
HOME OFFICE
SAN FRANCISCO PAGE 1 OF 1
ALL EFFECTIVE DATES ARE
AT 12:01 AM PACIFIC EFFECTIVE JUNE 26, 2016 AT 12.01 A.M.
STANDARD TIME OR TI4E
TIME INDICATED AT
PACIFIC STANDARD TIME
WILLIAM'S BAIT, TACKLE & BOAT
32040 RIVERSIDE DR
LAKE ELSINORE, CA 92539
ANY CONTRADICTION BETWEEN THE POLICY AND THIS ENDORSEMENT
WILL BE CONTROLLED BY THIS ENDORSEMENT.
IT IS AGREED TIiAT THE DEPOSIT PREMIUM FOR THIS POLICY IS
CHANGED TO -
$1,426.00
NOTHING IN THIS ENDORSEMENT CONTAINED SHALL BE HELD TO VARY, ALTER, WAIVE
OR EXTEND ANY OF THE TERMS, CONDITIONS, AGREEMENTS, OR LIMITATIONS OF THIS
POLICY OTHER THAN AS STATED. NOTHING ELSEWHERE IN THIS POLICY SHALL BE
HELD TO VARY, ALTER, WAIVE OR LIMIT THE TERMS, CONDITIONS, AGREEMENTS OR
LIMITATIONS OF THIS ENDORSEMENT.
COUNTERSIGNED AND ISSUED AT SAN FRANCISCO: JULY 1, 2016 9935
AUfHORiZED REPRESENT IVE PRESIDENT" AND CEO
SCIF FORM 10217 (REV,7.2014) OLD DP 217
AMENDMENT NO. 1 TO AGREEMENT FOR OPERATIONAL MANAGEMENT
OF LA LAGUNA RESORT AND BOAT LAUNCH
TI -IIS AMENDMENT NO. 1 TO AGREEMENT FOR OPERATIONAL
MANAGEMENT OF LA LAGUNA RESORT AND BOAT LAUNCH ("Amendment No. 1 "),
dated for identification purposes as of December 1, 2015, is made by and between the CITY OF
LAKE ELSINORE, a municipal corporation (hereinafter referred to as "City") and WILLIAMS
BAIT & TACKLE, INC., a California corporation, doing business as William's Bait, 'I'ackle and
Boat Rental (hereinafter referred to as "Operator").
RECITALS
This Amendment No. I is made with reference to the following facts which are a
substantive part hereof:
A. City and Operator have entered into that certain agreement entitled "Agreement for
Operational Management of La Laguna Resort and Boat Launch" dated as of June 1, 2015 (the
"Original Agreement"). Except as otherwise defined herein, all capitalized terms used herein shall
have the meanings set forth for such terms in the Original Agreement.
B. Section 3.2 of the Original Agreement provides, in pertinent part, that "the City
(acting through its City Manager) and Operator may, upon both party's mutual agreement, extend
the term of this Agreement with respect to the Premises for one (1) six (6) month terms ......
The parties now desire to extend the term of the Original Agrcc nt; It by six (r`i)
months as provided in Section 3.2 of the Original Agreement.
NOW, THEREFORE, in consideration of the mutual promises, covenants and conditions
set forth herein, the parties hereto agree as follows:
1. Pursuant to Section 3.2 of the Original Agreement, City and Operator agree to
extend the term of the Original Agreement by six (6) months.
[Signatures on next page]
First Amendment to La 15grma Operations Agreement 0120415
2. H,xcept for the changes specifically set forth herein, all other terms and conditions
of the Original Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Amendment No. 1 on the
respective dates set forth below.
WILLIAMS BAIT & TACKLE, INC., a
California corporation, doing business as
WILLIAMS BAIT, TACKLE, AND BOAT
RENTAL
DATED: ,rte`- � � '2015 By;
William Johnson, 11 sident
CI'T'Y OF LAKE ELSINORE, a municipal
corporation j
DATED: ! �"2�c5' , 2015 by: �._ --
Gr2 ates, City Manager
APPROVED AS TO FORM:
"Attorney
First Amendment to La Laguua Operations Agreement 0120415 2
AGREEMENT POR OPERATIONAL MANAGEMENT
OF LA LAGUNA RESORT AND BOAT LAUNCH
THIS AGREEMENT FOR OPERATIONAL MANAGEMENT OF LA LAGUNA
RIIISOWF AND BOAT LAUNCH (the "Agreement"), dated for identification purposes as of
June 1, 2015, is made by and between the CITY OF LAKE P;LSINORE, a municipal corporation
(liercinafter referred to as "City") and WILLIAMS BAIT & 'TACKLE, INC., a California
corporation, doing business as William's Bait, Tackle and Boat Rental (hereinafter referred to as
"Operator"),
RECITALS
This Agreement is made with reference to tine following facts which are a substantive part
hereof;
A. The Lake Elsinore Recreation Area ("LFRA") was established by the State of
California for the purpose of making available to the people for their egjoyment the natural,
cultural, and recreational valuesofthe largest natural lake in Southern California.
B. The function of the City at the LYRA is to manage, protect, and, where necessary,
to restore its natural and cultural resources and values for their perpetuation in accordance with
the public pari. and recreational purpose; to interpret these values effectively; and to provide
facilities and services, consistent with the purpose of the park, that are necessary for the full
enjoyment of the part..
C. The City and Operator wish to set forth the terms and conditions by which the
Premises will be maintained and operated.
D. The City Council finds that it is appropriate that this Agreement is entered into to
achieve the above stated purposes and to promote the safety and convenience of the general
Public in the use and enjoyment of, and the enhancement of recreational and park experiences at
the Premises, that the Agreement is not being entered into solely for its revenue producing
potential, that the proposed operating plan is compatible with the Lake Elsinore Recreation Area
General Plan, and that the operating plan will not result in the loss of public park space.
NOW. TIiTREEORI, in consideration of the munual promises, covenants and conditions
set forth herein, the parties hereto agree as follows:
USE GRANTED
1.1 Operator is hereby authorized to operate and maintain the Premises including
authority to (i) roll' campsites; (ii) allow the litunching of boats and personal water craft onto
Lake Elsinore; (iii) sell bait, tackle and boat and water .ski parts and accessories; (iv) charge fees
fir' rental of boats including, but not limited to, sailboards (powered and unpowered) and
personal water craft vessels; (v) sell prepackaged food and non-alcoholic beverages; and (vi)
allow entry by individuals and groups into designated day -use only areas.
Ia Larqum Operan..nx Ag, mmmt 061715 rinntdo" Pagc I
1.2 Operator Understands and agrees that this Agreement is by license and not lease;
confers only permission to occupy and use the Premises described for prescribed purposes in
accordance with the terms and conditions hereinafter specified without granted or reserving to
Operator any interest or estate therein; the expenditure of capital and/or labor in the course of use
and occupancy thereunder shall not confer any interest or estate in the premises by virtue of said
use, occupancy and/or expenditure of money thereon; and it is the intention of the parties to limit
the right of use granted herein to a personal, revocable and assignable privilege of use in the
Premises for the license granted herein.
2. PROPERTY
2.1 file operation shall be conducted on the real property referred to herein as the
Premises and commonly known as the La Laguna Resort and Boat Launch as shown in the
attached 1xhibit "A" attached hereto and incorporated by reference herein.
2,2 The Premises shall be used only and exclusively for purposes authorized herein,
and such other purposes as are related thereto provided express approval therefore is granted by
the City Manager or his/her designee, and for no other purposes whatsoever.
2.3 Operator acknowledges personal inspection of the Premises and the surrounding
area and evaluation o1' the extent to which the physical condition thereof will affect its
operations. Operator accepts the Premises in its present physical condition and agrees to make
no demands upon City for any improvements or alterations thereof.
2.4 Any improvements, additions, alterations, or changes to the Premises shall be
subject to prior approval by the City Manager, and applicable permits shall be secured in
compliance with such terms and conditions as may be imposed by the City. Any construction
shall be at Operator's expense.
2.5 The temporary trailer/building designated as "William's Bait, Tackle and Boat
Rental" (the "General Store") is owned by and is the property of Operator. Improvements,
equipment and inventory related to the General Store shall owned by and be the property of the
Operator, provided however that and equipment and software related to the campground
reservation system shall be the property of and owned by the City and/or its reservation software
vendor. Ownership of all other structeres, buildings or improvements constructed by Operator
upon the Premises and all alterations, additions or betterments thereto, shall become the property
Of the City without compensation being paid therefor, subject to the rights granted to the
Operator hereinabove.
3. TERM
3.1 The Initial Perm of this Agreement with respect to the Premises shall commence
on the Commencement Date for a period of six (6) months.
Ln Laaiuna Ojvm li onz Aercemenl 061715 FuritdmN Paget
3.2 provided Operator is not then in default under the terms of this Agreement, at the
expiration of tire Initial Operating'term, the City (acting through its City Manager) and Operator
may, upon both party's mutual agreement, extend the term of this Agreement with respect to the
Promises for one (1) six (6) month terms, on the same terms and conditions as contained in this
Agreement (the "Extension
3.3 Ili the event the Operator holds over heyond the term herein provided with the
consent, expressed or implied of City, such holding shall be from month to month only, subject
to the conditions of this Agreement; shall not be a renewal thereof, and shall be at the monthly
compensation provided herein.
4. REVEN_lJ[3S AND PAYMENTS
4.1 Campground and Boat launch Operations Revenues. Operator shall pay and
remit to City Clic Campground and Boat Launch Operations Revenues.
4.2 General Store Concession Fee. hi consideration for the use granted herein,
Operator shall pay the City a sum equal to four percent (4%) of General Store Gross Receipts.
4.3 La Laguna Operating Pee. In consideration for the Operator's operational
responsibilitics, City shall pay to Operator the La Laguna Operating Fee.
4.4. Payments to the City of the Campground and Boat Launch Operations Revenues
and the General Store Concession pee shall be made on or before the fifteenth (15"i) day of the
calendar month following each month of the term of this Agreement, with the first payment to be
made no later than July 15, 2015. payment shall be by check or draft. made payable to the City
of Lake Elsinore shall be mailed or otherwise delivered to the City of Lake Elsinore, Attention:
Director of Administrative Services, 130 ,South Main Street, Lake Elsinore, California 92530. A
late payment charge of two percent (2%,) per month shall be added to any late payment received
after the last day of the calendar month in which payment is due, Flowever, the tate payment
charge herein provided may be waived, whenever the City Manager finds the late payment
excusable by reason of extenuating circumstances. At no time during the term of this Agreement
shall the City be obligated to notify the Operator of the accumulation of late payment chargcs.
4.5 The La Laguna Operating Fee shall be paid by City to Operator in advance on a
biweekly basis during the term of this Agreement and will be based on the Schedule of Fees and
1 fours set forth in Exhibit "I3," which is incorporated herein. The City agrees to pay $16,000 on
or about ,lune 10, 2015, or a Reasonably practical thereafter, for the La Laguna Operating Fee for
the weeks of June 1 through June 7 ($6,717.00) and June 8 throagll .lune 14 ($6,717), provided
that a credit in the amount of $2,566.00 shall be applied to the La Laguna Operating Pee for the
week of J1171e 15 through June 22. Payment shall be by check or draft made payable to William
Johnson dba William's Bait, Tackle and Boat Rental and shall be mailed or otherwise delivered
to Williams Bait c& Tackle, Ina, 198 S. Nebraska Street, Lake Elsinore, CA 92530. The
Payment of' the La Laguna Operating Fee shall be withheld in the event that the Operator has
failed to make a timely payment of the Campground and Boat Launch Operations Revenues and
the General Store Concession Pee as provided in Section 4.4.
A I:pmntu opermnns Agrccmcau 1761715 ISn;d dor< Page 3
5. ACCOUNTING RECORDS
5.1 All sales shall be recorded by mcans of cash registers which publicly display the
amount of each sale and automatically issue a customer's receipt or certify the amount recorded
on a sales slip. Said cash registers shall in all cases have locked -in sales totals and transaction
counters which are constantly accumulating and which cannot, in either case, be reset. In
addition, such cash registers must have a tape located within the register upon which transaction
numbers and sales details are imprinted. Beginning and ending cash register readings shall be
made a matter of daily records. In the event of a technical or electrical failure of the cash
registers, Operator shall record by hand all collections, and issue a sequentially pre -numbered
customer receipt in a like manner.
5.2 Operator shall maintain a method of accounting which shall, to the satisfaction of
the City Manager, correctly and accurately reflect the gross receipts and disbursements of
Operator in connection with the operation. 'file method of accounting, including bank accounts
established for said operation shall be separate from the accounting system used for any other
business operated by Operator or far recording Operator's personal financial affairs. Such
method shall include the keeping of the following documents:
5.2.1 Regular books of accounting such as general ledgers;
5.2.2 Journals including any supporting and underlying documents such as
vouchers, checks, tickets, batik statements, etc.;
5.2.3 State and federal income tax returns and sales tax returns and checks and
other documents providing payment of sums shown which shall be kept in confidence by City;
5.2.4 Cash register tapes (daily tapes may be separated but shall be retained so
that from day to day the sales and/or rentals can be identified);
5.2.5 Any other accounting records that the City Manager deems necessary for
proper reporting of recei pts;
5.3 All documents, books and accounting records shall be open for inspection and re-
inspection al any reasonable time during the term of this Agreement and for twelve (12) months
thereafter. In addition, the City may from time to time conduct an audit and re -audit of the books
and business conducted by Operator and observe the operation ofthe business so that accuracy
of the above records can be confirmed.
5.4 Operator shall furnish the City Manager with a monthly gross receipts report
showing the amount payable therefrom to the City. Such a report shall accompany each
minimum rent or percentage rent payment required to be made as provided herein. The monthly
reporting period shall be by calendar month rather than monthly anniversary date of the effective
date of this Agreement. In addition thereto, Operator shall furnish a semi-annual profit and loss
statement and a balance sheet prepared by a person and in a form acceptable to the City. The
lei I,avuna Operations Apeemenl 6G171:i Final doex Page 4
semi-annual profit and loss statement shall be submitted within sixty (60) days of the close of the
Initial Term and Extension Term. Said closing date shall be determined by reference to the date
torcommcncement ofthe term herein provided.
5.5 In the event that an audit or review conducted by the City's Director of
Administrative Services and/or City Manager finds that, due to Operator's non-compliance with
its obligation to report gross receipts received in connection with its operations authorized
herein, an actual loss and/or a projected loss of revenue to City can be determined, the City
Manager may, at his option, (1) bill Operator for said losses, said amount to be paid to City
within thirty (:30) days following billing therefor unless otherwise specified by City Manager;
and/or (2) use the Security deposit as provided for herein; and/or, (3) assess liquidated damages.
The parties agree that it will be impracticable or extremely difficult to fix the extent of actual
damages resulting from the failure of the Operator to correctly report gross receipts, and a
projected loss of revenue duc to City. The parties hereby agree that Under the current
circumstances a reasonable estimate of such damages is Fifty Dollars ($50.00) per day for each
day ofthe loss period as determined by City for liquidated damages in said amount.
Should the City Manager find that the additional rental payment due to City exceeds two
percent (2%) of the total amount which should have been paid as determined by such review or
audit and observation, and there being no reasonable basis for the failure to report and pay
thereon, Operator shall also pay the cost of the audit as determined by City and pay any penalty
heretofore provided tar the delinquent payments.
5.6 Operator shall cause all of its sub-operators to comply with these requirements
except that a sub-operator shall only be required to establish and maintain those accounting
records that the City Manager downs necessary to examine the reported gross receipts in
accordance with generally accepted auditing standards.
6. OPERATIONAL RF.SPONSII3II I'fIPS
6.1 Operator shall conform to and abide by all municipal and City ordinances, and all
state and federal laws and regulations, insofar as the same or any of them are applicable; and
where permits and/or licenses are required for the operation of the Premises, any related activity
and/or any construction authorized herein, the same must be first obtained from the regulatory
agency having jurisdiction thereover. In particular, Operator shall require that all boat operators
utilising the Boat Launch to access lake Elsinore have purchase] a City Lake Use Pass.
Operator shall pre-purchase Lake Use Passes from the City and shall offer such Lake Use Passes
for sale to the public at all time during operation of the Premises. Further, Operator shall
conform to and abide by all rules and regulations and policies of the City.
6.2 Operator agrees to exercise every reasonable effort to not allow any loud,
boiSICI'0119 or disorderly persons about the Premises.
6.3 Operator shall not Knowingly permit any illegal activities to be conducted upon
the Promises.
Ia La-mum Opemuons iAgrcomem 061715 19n;d Auc: Page 5
6.4 Operator shall not post signs upon any City property or improvements thereon
unless prior approval therefor is obtained Prom the City Manager.
6.5 Operator shall use its best efforts to maxhnize the public use ofthe Premises and
the facilities thereon in accordance with the conditions herein. however, Operator shall not
interfere with the public use Of (Ile remaining areas ofthe lake Elsinore Recreation Area.
6.6 Operator's Staff
6.6.1 Operator shall maintain an adequate and proper staff for its authorized
operations based on commercially reasonable budget parameters and Reasonable needs.
Operator shall designate one member ofthe staff as an Operations Manager with whom City may
deal on a daily basis. Any person selected by Operator as Operations Manager shall be skilled in
the management of businesses similar to the campground/boat launch operations and shall be
subject to reasonable approval by the City Manager. fhe Operations Manager shall devote
substantial time and attention to tine operation of the Premises and the Campground and render
such services and convenience to the public as are required. The Operations Manager shall be
fully acquainted with the operations of the Premises, familiar with the terms and conditions
prescribed therefore by this Agreement, and authorized to act in the day-to-day operations
thereof.
6.6.2 The City Manager may at any time give Operator written notice to the
effect that the conduct or action of a designated employee of Operator is, in the reasonable belief
of the City Manager, detrimental to the interest of the public patronizing the Premises. Operator
shall trarlObr or reassign any such employee within a reasonable period of time following r r2tiee
therefor from the City Manager, and such employee shall not be assigned to any other City
ftcility.
6.6.3 Operator warrants that it fully complies with all laws regarding
employment of aliens and others, and that all its employees performing services herein meet the
citizenship or alien status requirennents contained in federal and state statutes and regulations
including, but not limited to, the Immigration Reform and Control Act of 1986 (PJ— 99-603).
Operator shall obtain, from all covered employees performing services herein, all verification
and other documentation of employment eligibility status required by federal statutes and
regulations as they currently exist and as they may be hereafter amended. Operator shall retain
such documentation f'or all covered employees for the period prescribed by law. Operator shall
indernnity, defect, and hold hanuless, the City, its agents, officers and employees from employer
sanctions and any other liability which may be assessed against Operator or City or both in
connection with any alleged violation of federal statutes or regulations pertaining to the
eligibility for employment of persons performing services under this Agreement.
6.6.4 Operator shall file with the City Manager a certificate for each nnember of'
the food and beverage staff showing that within the last two (2) years, such person has been
examined and has been found to be free of communicable tuberculosis. "Certificate" means a
document signed by the examining physician and surgeon who is licensed under Chapter 5
(conunencing with Section 2.000), Division 2. ofthe California Business and Professions Code, or
La kwtwn Opcmtroixv A„u.uncN 001715 Final docx Pa$e 6
a notice fi-om a public health agency or unit of the Tuberculosis Association which indicates
freedom front active tuberculosis.
6.7 Minimum Days and Mows ofOneration and Pees
6.7.1 The Premises shall operate during all days and hours that the I_.alce
Elsinore Recreation Area is open to the public. Operator shall contact the Director no less than
once a month to obtain the upcoming month's days and hours of operation. Any changes in days
or hours of operations must receive prior approval of the Director.
6.7.2 'rhe Boat Launch shall operate as follows:
a. Daily from sundsc to sunset from April I st to October 31st each
year.
b. Friday, Saturday and Sunday from sunrise to sunset from
November I st to March 31 st each year,
C. Monday through Thursday from sunrise to sunset from November
1st to March 31" each year.
d. Subject to consent from the City Manager and compliance with the
Lake Elsinore Municipal Code, the Operator may operate the Boat Launch alter sunset.
6.7.3 The hour of service provided by the Operator are set forth in the Schedule
ofFees and flours, Exhibit "B" attached hereto.
6.8 Prices. Operator shall at all times maintain a complete list or schedule of the
prices for all fees, charges, goods, rentals, and services, or combinations thereof, supplied to the
public on or from the premises. The City Manager hereby reserves the right to review and
approve said fees and charges. Prices shall comply with the requirements under any grant
agreement with the Department of floating & Waterways concerning launch Pees and such other
prices shall be fair and reasonable based upon the following considerations: that the campground
and boat operation is intended to serve the needs of the public for the goods and/or services
supplied at a fair and reasonable cost comparability with prices charged for similar goods and/or
services supplied in the Riverside Metropolitan Area; and reasonableness of profit margins in
view of the cost of providing same in compliance with the obligations assumed in this
Agreement. In the event City notifies Operator that prices being charged are not fair and
reasonable, Operator shall have the right to confer with the City Manager and justify the prices.
Following reasonable conference and consultation thereon. Operator shall make such price
adjustments as may be ordered by the City Manager. Operator may appeal the determination of`
the City Manager to the City Council, whose decision thereon shall be final and conclusive.
6.9 Quality of Goods and Services. Service to the public, with goods, services, and
merchandise of a high quality and at reasonable charges, is of prinnc concern to the City and is
considered a part or the consideration for this Agreement. Therefore, Operator agrees to operate
I.a lagmra opaat Ions AgNemenl 061715 FinalAncx Page7
and conduct its operation in a first-class manner, and comparable to other first-class facilities
providing similar activities, programs and services. Where such facilities are provided, Operator
shall maintain a high standard of service at least equal to that of similar events and programs
conducted on City parks and/or adjacent communities and to those prevailing in such areas for
similar products and services, and without discrimination. Operator, following receipt of written
notification therefor, shall immediately remove or withdraw from sale of any goods or services
which may be found objectionable to the City Manager based oil findings that the provision of
such goods or services is harmful to the public welfare.
6JO Utilities. With respect to the Premises, City shall provide and pay for any
necessary utilities, including telephone, water and electricity, consumed by Operator in the
operation of the Premises. Operator waives any and all claims against City for compensation for
loss or damage caused by a defect, deficiency or impairment of any utility system, water system,
water .supply system, drainage system, waste system, heating or gas system, electrical apparatus
or wires serving the Premises. City shall pay for any new connections to the existing utility
services necessary for the operation of the Premises, provided, however that Operator shall for
any new connection to existing utility services necessary for the operation of the General Store.
6.11 Sanitation. No offensive matter, refuse, or substance constituting an unnecessary,
Unreasonable or Unlawful tare hazard, or material detrimental to the public health, shall be
permitted or remain on the Premises and within a distance of fifty (50) feet thereof, and Operator
shall prevent any accumulation thereof from occurring. Operator shall furnish all equipment and
materials necessary, including trash receptacles of the size, type, color and number required by
the City Manager, to maintain the Premises and the area within a distance of fifty (50) feet
thereof in a sanitary condition. City shall moyide thnt all refuse is collected no less than once a
week by its existing franchise hauler.
6.12 lfousekeepina and Maintenance
6.12. ( Housekeeping
of Premises. During the term of this Agreement, Operator
shall be responsible at is sole cost and expense, for conducting all housekeeping of the Premises
in order to assure that the Promises is in good and substantial condition, and kept in a clean, safe,
wholesome and .sanitary condition free of trash, garbage, or obstructions of any kind.
6.12.2 Maintenance and Repair of Premises. Dut ing the term of this Agreement,
City shall be responsible at is sole cost and expense, for conducting all Maintenance and Repair
of the Premises in order to assure that the Premises is maintained in a Reasonable good state of
repair and preserve the Premises and the improvements thereon are preserved for an Reasonable
useful life. Notwithstanding the foregoing, the City shall have no obligation to maintain or
repair the Gencral Store nor any equipment owned by Operate]- (including rentals equipment
such as vessels) related to the operation thereof.
6. 12.3 Default. Cither party may core the default of the other party hereto with
respect to the obligations assumed in this Section 6.12, and upon performance thereof shall
acquh-e a right of reimbursement therefrom for the actual costs of same, including, but not
limited to, the cost of labor, materials and equipment furnished in the correction thereof,
La Iaguna 01mation,'U "Im"I 061715 1 naldops Page 8
provided there is prior mutual agreement between the City Manager and Operator upon the
nature and scope of the work to be performed and Nie costs to be incurred thereby. Any demand
of City for reimbursement hereunder shall be satisfied by Licensee through a credit against the
monthly La Laguna Operating Pee, connmencing with the month next succeeding the date of
completion of the Housekeeping performed, and for each and every other month of the
remaining term of this Agreement, until a total credit has been provided of the actual costs of
cure. Any demand of Licensee for reimbursement hereunder shall be satisfied by City through a
credit against the monthly Revenue, commencing with the month next succeeding the date of
completion of the Maintenance and Repairs performed, and for each and every other month of
the remaining term of this Agreement, until a total credit has been provided of the actual costs of
cmc. City and Licensee waive all rights to payment on their respective rights to reimbursement
for the actual costs of cure of the default of the other with respect to the maintenance obligations
assumed herein, except in the manner and amounts heretofore provided.
6.13 Security Devices. City, at its own expense, may provide any legal devices or
equipment and the installation thereof, designated for the purpose of protecting the Premises
from theft, burglary or vandalism, provided written approval for installation thereof is first
obtained from the City Manager,
6.14 Safety. Operator shall immediately correct any unsafe condition of that portion of
the Premises designated as the campground and Boat Launch area, as well as any unsafe
practices occurring thereon. Operator shall immediately notify City of any unsafe condition at
the Boat Launch and correct any unsafe practices occurring thereon. Operator shall obtain
emergency medical care for any member of the public who is in need thereof, because of illness
or injury occurring on the Premises. Operator shall cooperate fully with City in the investigation
of any accidental injury or deathoccurringon the Premises, including a prompt report thereof to
the City Manager. Operator shall cooperate and comply frilly with county, state, municipal,
federal or any other regulatory agency having jurisdiction thereover, regarding any safety
inspections and certifications of any and all Operator's structures, enclosures, vehicles, booths,
equipment and rides.
6.15 Trade Fixtures
Operator has provided the General Store and may provide storage containers or
other temporary minor structures in connection with for the operation of the vessel rentals and
other patron services at Premises. Within the last thirty (30) days preceding the termination of
this Agreement, Operator shall remove same from the Premises, other than for those items of
personal property which have been furnished by City t>r so affixed that their- removal therefrom
cannot be accomplished without damage to the realty. Should Operator fail to so remove said
appliances, furniture, fixtures, equipment, door locks and padlocks within said thirty (30) day
period, Operator shall lose all right, title alnd interest in and thereto, and City may elect to keep
same upon the Premises or to sell, remove or demolish sane. Operator shall reimburse City fin•
any cost as determined by the City Manage incurred in excess of any consideration received
from tine sale, removal or demolition thereof.
La Lacuna Operamns Agicenianl 061715 Ihnrd docz Page 9
6.16 Merchandisc✓Food Products. Operator shall provide and maintain an inventory of
merchandise required to meet the Reasonable needs of the public therefor. All food and
beverages sold or kept for sale by Operator shall conform to the federal, state and county food
laws, ordinances and regulations in all respects. No adulterated, misbranded or impure articles
shall knowingly be sold or kept for sale by Operator and all merchandise kept on hand by
Operator shall be stored and handled with Reasonable regard for safety and sanitation. In the
event that the City Manager determines that any merchandise does not meet the requirements 01'
this section, the City Manager shall have the right to order the improvement of the quality of any
such items kept or offered for sale. The City Manager shall have the right to prohibit the sale at-
rental
rrental of any item of merchandise on finding(s) that the item is reasonably determined to be of
inferior quality and/or that the item is detrimental to the public.
6.17 Cauipment/Annual Lake Use Pass. All boats and non -powered personal water
craft, hereinafter referred to as equipment, offered for rental shall be of a design and make
approved by the City Manager prior to use. Equipment offered for rental must be of a design
which will fully comply with any and all safety requirements o1' the State of California,
Department of Boating and Waterways and the United States Coast Guard. Life jackets or
17oatable safety cushions must also be supplied for all persons utilizing unpowered and powered
Personal water craft. Said floatation devices must meet acceptable safety standards as
determined by the appropriate federal and state agencies. Equipment offered for rent shall be
numbered in accordance with applicable regulations established by the Department of Motor
Vehicles, State of California. Operator shall provide, at all times that boat rental operation is
open to the public, a powered boat which shalt be available for use by Operator or his employees
for emergency purposes in retrieving rental boats or in patrolling the lake to ascertain that rental
boats are complying, with all safety regulations. Operator shall include a disclaimer in rental
agreement that the City is not responsible to tow rental boats if they run out of gas, mechanical
failure or cause an accident.
Each rental vessel shall display a City Commercial Lake Use Pass sticker at all times.
The sticker shall be affixed to the vessel within four inches of the vessel's C.F. numbers on the
port side. The Commercial Lake Use Pass shall be valid for the calendar year (January t through
December 31). The Commercial Lake Use Pass stickers 16r Operator's rental vessels shall be
provided to Operator at no cost to Operator in recognition that the General Store Concession Fee
is applicable to the rental of vessels by Operator.
6.18 Programmed Events. Operator shall not promote or sponsor private or public
events requiring the use of any other areas of the Lake Elsinore Recreation Area other than the
Premises unless authorized by the City Manager. However, this provision shall not prohibit
Operator from generally advertising or encouraging public use of Lake Elsinore Recreation Area.
6.19 Ca ulliln
6.19.1 Except as provided herein, under no circumstances shall a campsite be
rented to any individual, entity or organization a period of more fourteen (14 ) consecutive days
in any twenty-one (21) day period.
La (manna Operations Aercemmv 061715 Final do, Page 10
6.19.2 Exception for Off-season Camping. City and Operattor recognize that
following the Labor Day weekend and prior to the Memorial Day weekend each year, utilization
of tile Lance Flsinore Recreation Area is substantially reduced. ht order to economize operations
at reduced levels and allow for completion of deferred maintenance to restroom facilities,
Operator shall be allowed to restrict camping on the premises to fully self-contained recreational
vehicles for long-term camping as determined by Operator. Notwithstanding the foregoing, City
and Operator agree that no occupancy of the Premises shall be allowed for a period of six (6)
months or more that would result in any person becoming a "resident" of the Premises as that
term is defined by Civil Code section 799.31, and as it may be subsequently amended.
Moreover, the parties agree that Operator shall conduct its operations as to prevent establishment
of a mobile home park on the Premises.
6.20 Advertisine and Promotional Materials. Operator shall not promulgate nor cause
In be distributed any advertising, or promotional materials unless prior approval thereof is
obtained from City Manager. Such approval shall not be unreasonably withheld or delayed and
shall be deemed to be given if no objection is made within thirty (30) days following the request
for approval. Such materials include, but are not limited to: advertising in newspapers, flyers,
newsletters, magazines and trade journals, and radio and/or television commercials.
6.21 Credit promotional Materials. Operator agrees that any advertising or
promotional materials promulgated by Operator shall include the words "L,ake Elsinore" as part
of the name or identification of the Premises.
TRANSFERS
— 7.1 Operator shall not, without written consent of the City Maager, transfer, assign,
sublicense, hypothecate or mortgage this Agreement. Any attempted transfer, assignment,
sublicense, hypos hccation or mortgage without the written consent of the City Manager shall be
null and void, and shall constitute a material breach of this Agreement.
7.2 Each and all of the provisions, agreements, terms, covenants and conditions
herein contained to be performed by Operator shall be binding upon tory transferee thereof,
7.3 `file license shrill not be transferable by testamentary disposition or the state laws
of intestate succession, as the rights, privileges, and use conferred by this Agreement shall
terminate prior to the date for expiration thereof in the event of the death of Operator occurring
within the term herein provided. Additionally, neither this Agreement nor any interest therein
shall be transferable in proceedings in attachment or execution against Operator, or in voluntary
or involuntary proceedings in bankruptcy or insolvency or receivership taken by or against
Operator, or by any process or flaw including proceedings under Chapter X or X1 of the
Bankruptcy Act.
7.4 Shareholders and/or partners of Operator may transfer, sell, exchange, assign or
divest themselves of any interest they may have therein. However, in the event any such sale,
transfer, exchange, assignment or divestment is affected in such a way as to give majority control
of Operator to any persons, corporation, partnership or legal entity other than the majority
La Laguna 01mation, Agreement 061 71 i Final &wx page I I
controlling interest therein at the time of the execution of this Agreement, the City Manager's
approval thereof shall be required. Consent to any such transfer shall be refused if Che City
Manager finds that the transferee is lacking in experience and/or financial ability to operate the
Premises.
7.5 The prohibition herein contained shall not be applicable with respect to transfers
of this Agreement arising from the exercise of a power ol'sale or,judicial foreclosure pursuant to
the terms and conditions of a hypothecation or mortgage previously approved by the City
Manager.
7.6 In the event Operator shall request the prior written consent of City Manager to
give, assign, transfer or grant control of this Agreement, and City Manager gives written consent
to the assignment, a translbr fee equal to two percent (2%) of the Gross Sales Price shall be paid
to City. Said sum shall be payable to City in full either within thirty (30) days after said consent
is given or prior to the close of any escrow, whichever occurs first. Prior to City Manager's
consent to such assignment, the assignor shall first deliver to assignee a written schedule of all
SUMS due and owing to City from the assignor with such schedule in a form subject to the
approval of the City Manager in all respects, and second, shall deliver to City Manager, as part of
the acceptance of the assignment, a written acknowledgment by the assignee that the assignee (a)
affirms the sums due and owing to City and (b) accepts responsibility for payment of such sums
directly to City. Exempted from said transfer fee shall be the following:
7.6.1 A transter of an undivided interest in the license between or among co-
workers or affiliated entities which results in a change in method of holding title but does not
result in a change to the proportional interests held by the co-owners or affiliated entities prior to
the transfer;
7.6.2 An assignment which serves as security for the repayment of a loan from
any lender but which does not entitle the assignee to an immediate right to use, occupy, possess
or receive the rents or profits from the operation of the Premises for so long as the assignor
makes the required periodic payments and complies with other provisions of the loan;
7.6.3 A transfer of title of the license to a lender purchaser at the foreclosure
sale under a deed of trust on the property or by assignment to the lender or its nominee in lieu of
foreclosure;
7.6.4 Such other assignment for which the City Manager determines that the
ownership interests in the license have remained unchanged, such as a change in the legal or
fictitious name of the Operator without any other change in the equity, in beneficial use of, or
legal title to the license as an asset, or the income produced thereby. The City Manager's
decision in such cases shall be appealable to the City Council within ten (10) days after receipt of
written notice oPthe City Manager's decision. Any such appeal request shall be accompanied by
a Certificate of Deposit filed with City Manager in the full amount of the h-anafer fee; the
Certificate of Deposit shall be payable to City, and the interest thereon shall accumulate, bill the
principal sum and interest shall remain the property of Operator in the event the City Manager's
decision is reversed.
I_a kwin)a Ormimims Agruemcn1061715 FIW,I (Loan Page 12
8. LJOLD HARMLESS AND INDEMNIFICATION
8.1 Operator shall defend, indemnify and hold harmless City, its employees, agents
and officials, front any liability, claims, suits, actions, arbitration proceedings, administrative
proeeedings, regulatory proceedings, losses, expenses or costs of any kind, whether actual,
alleged or threatened, actual attorney fees incurred by City, court costs, interest, defense costs
including expert witness Pecs and any other costs or expenses of any kind whatsoever 5vithout
restriction or limitation arising out of or in any way attributable in whole or in part to the
performance of this Agreement, except as may be provided in Sections 8.2 and 8.3.
"Performance of this Agreement" includes responsibility for water related activities within the
Boat Launch area used by invitees or any others. The Boat Launch area is generally that area of
the Premises designated for the launching and mooring of any water craft and any improvements
on the Premises for such purposes. All obligations under this provision are to be paid by
Operator as they are incurred by the City.
8.2 Without affecting the rights of City tinder any provisions of this Agreement or
this section, notwithstanding any other provision contained herein, Operator shall not be required
to indemnify and hold harmless City as set forth above for liability attributable to the sole fault
ot'City, provided such sole 'fault is determined by agreement between the parties or the findings
of a court of competent jurisdiction. Injury or death during water activities within the boat
launch area is not the fault of City. This exception will apply only in instances where the City is
shown to have been at litult to the percentage ofthe liability of tate City. In those instances, the
obligation of Operator will be all and City will be indemnified for all liability incurred,
even though a percentage of the liability is attributable to conduct of'the City.
8.3 Without affecting the rights of City under any provisions of this Agreement or
this section, notwithstanding any other provision contained herein, Operator shall not be required
to indemnifv and hold harmless City as set forth above for liability attributable to water related
activities occurring at or beyond the actual waterline of Lake Elsinore along the public beach
area (such public beach area being a separate area from the boat launch area referenced in
Section 8.1) and the main body of Lake Elsinore beyond the public beach and boat launch areas,
unless such liability is the sole fault of Operator, provided such sole fault is determined by
agreement between the parties or the findings of a court of competent jurisdiction. This
exception will apply only in instances where the Operator is shown to have been solely at fault
and not in instances where the City is percentage of the liability involved.
8.4 The obligations of Operator under this or any other provision of this Agreement
will not be limited by the provisions of any workers' compensation act or similar act. Operator
expressly waives its statutory immunity Under such statutes or haws as to City, its ennployees and
officials.
8.5 Operator agrees to obtain executed indemnity agreements with provisions
identical to those set forth here in this section fi,ont each and every sub -operator, sub -tier
contactor or any other person or entity involved oil behalf of Operator in the performance or
subject (natter of this Agreement. In the event Operator fails to obtain such indemnity
I n I „tuna Opemt,.m Agtcanem 061715 Final Boca Page 13
obligations from others as required here, Operator agrees to be Fully responsible according to the
terms ofthis section.
8.6 Failure of City to monitor compliance with these requirements imposes no
additional obligations on City and will in no way act as a waiver of any rights hereunder. This
obligation to indemnify and defend City is binding on the successors, assigns, or heirs of
Operator and shall survive the termination of this Agreement or this section.
8.7 Without affecting the rights of City under any provisions of this Agreement or
this Section 8, Operator has the right, in its sole discretion, to tender the delense for any and all
claims under which Operator is obligated to indemnify City to the Operator's insurance carrier
under the provisions of this Section 8, including but not limited to, selecting legal counsel.
9. INSURANCI
9.1 Without limiting Operator's indemnification of City, Operator shall provide and
maintain at its own expense during the term of this Agreement the hereinafter listed program(s)
of insurance covering its operations hcreuunder. Such insurance shall be provided by an
insner(s) satisfactory to City's Risk Manager and certificates or other evidence of insurance and
certified copy(ies) of additional insured endorsernent(s) shall be delivered to the City Manager
on or before the Commencement Date.
9.2 Operator, at Operator's own cost and expense, shall procure and maintain, for the
duration of the Agreement, unless modified by the City's Risk Manager, the following insurance
policies:
a. Worl<ers' Compensation Coverage. Operator shall maintain Workers'
Compensation Insurance and l nnployer's Liability Insurance for his/her employees in
accordance with the laws of the State of California. In addition, Operator shall require each
subcontractor to similarly maintain Workers' Compensation Insurance and Bmploycr's Liability
Insurance in accordance with the laws of the State of California for all of the subcontractor's
employees. Any notice of cancellation or non -renewal of all Workers' Compensation policies
must be received by the City at least thirty (30) days prior to such change. The insurer shall
agree to waive all rights of subrogation against City, its officers, agents, employees and
volunteers for losses arising front work performed by Operator f`or City. In the event that
Operator is exempt from Worker's Compensation Insurance and Employer's Liability lnsurance
for his/her employees in accordance with the laws of the State of California, Operator shall
submit to the City a CcrtiScate ol'Exemption from Wor9<ers Compensation Insurance in it form
approved by the City Attorney.
b. Commercial GencralLiability Coverage. Operator shall maintain
commercial general liability insurance in an amount not less than two mullion dollars
($2,000,000) per occurrence for bodily injury, personal injury and property damage. If a
commercial general liability insurance form or other form with a general aggregate limit is used,
either the general aggregate limit shall apply separately to the work to be performed under this
Agreement or the general aggregate limit shall be at least twice the required occurrence limit.
La Laguna OperatIom AgIcanent 01,1715 rinaI docx ]age I ZI
Required commercial general liability coverage shall be at least as broad as Insurance Services
Office Commercial General Liability occurrence form CG 0001 (ed. 11188) or Insurance
Services Office form number GL 0002 (cd. im) covering comprehensive General Liability and
Insurance Services office form number GL 0404 covering Broad Form Comprehensive General
Liability. No endorsement may be attached limiting the coverage.
C, Autonnobilc Liability Coyeraee. Operator shall maintain automobile
liability insurance covering bodily injury and property damage for all activities of the Operator
arising out of or in connection with the performance of this Agreement, including coverage for
owned, hired and non -owned vehicles, in an amount of not less than five hundred thousand
dollars ($500,000) combined single limit for each occurrence. Automobile liability coverage
must be at least as broad as Insurance Services Office Automobile Liability form CA 0001 (cd.
12/90) Code I ("any auto"). No endorsement may be attached limiting the coverage.
d. Watercraft Liability. In the event that Commercial General Liability
Coverage policy provided by Operator pursuant to Section 9.2,1). does excludes coverage for all
owned, non -owned, and hired watercraft vehicles, Operator shall maintain separate Watercraft
Liability coverage endorsed for all owned, non -owned, and hired watercraft vehicles with a
combined single limit of not Tess than Five Hundred Thousand Dollars ($500,000) per
occurrence.
9.3. Endorsements. Each general commercial liability, automobile liability insurance
and watercraft liability policy shall be with insurers possessing a Best's rating of no less than
A:VII and shall be endorsed in substantially the following form:
i. The City, its elected or appointed officers, officials, �rlployccs. agents and
volunteers are to be covered as additional insured with respect to liability arising out of work
performed by or on behalf of the Contractor, including materials, parts or equipment furnished in
connection with such work or operations.
ii. This policy shall be considered primary insurance as respects the City, its
elected or appointed officers, officials, employees, agents and volunteers. Any insurance
maintained by the City, including any self insured retention the City may have, shall be
considered excess insurance only and shall not contribute with it.
iii. This insurance shall act for each insured and additional insured as though
a separate policy had been written for each, except with respect to the limits of liability of the
insuring company.
iv, The insurer waives all rights of subrogation against the City, its elected or
appointed officers, officials, employees or agents.
V. Any failure to comply with reporting provisions of the policies shall not
affect coverage provided to the City, its elected or appointed officers, officials, employees,
agents or volunteers.
vi. The insurance provided by this Policy shall not be suspended, voided,
I Laguna 01mations Ag,eemenr 061715 Final docx page 15
canceled, or reduced in coverage or in limits except after thirty (30) clays written notice has been
received by the City.
9.2 Operator's performance under this Agreement shall riot commence until Operator
has complied with the aforementioned insurance requirements. Operator's operations, whether
in whole or in part, shall be subject to suspension by the City Manager during any period that
Operator Pails to maintain said policies in full force and effect.
9.3 failure on the part of the Operator to provide or maintain required programs of
insurance shall constitute a material breach of contract upon which City may immediately
terminate this Agreement.
9.4 No cancellation provision in any insurance policy shall be construed in derogation
of the continuous duty of Operator to furnish insurance during the term of this Agreement. At
least thirty (30) days prior to the expiration of any such policy, a signed and complete certificate
of insurance, with all endorsements required herein, showing that such insurance coverage has
been renewed or extended, shall be filed with City Manager.
10. DAMAGE AND DESTRUCTION
10.1 If during the term of this Agreement, the buildings or improvements or such
fixtures or equipment, on, below, above or appurtenant to the Premises and/or the Boat Launch at
the commencement of the term or thereafter erected, installed or placed thereon or therein shall
be destroyed or damaged in whole or in part by fire or any other cause, Operator shall give the
City Manager immediate notice thereof. Operator shall immediately secure the area to prevent
injury, vandalism, and further damage to persons, improvements, and t contents thereof. City
and Operator shall meet and confer to reach a mutually agreeable method and cost allocation to
promptly restore same to the condition existing immediately prior to such occurrence. If such
agreement is not reach in view of the damage sustained and availability of funds with which to
rebuild, either party may terminate this Agreement.
I L COMTRUCTION ACTIVI'T'IES
I LI in the event City constructs or causes to be constructed new facilities and/or
improvements for the licensed operations at the Promises, this Agreement shall continue in full
force and effect, except that the payments to be made by Operator shall be abated and/or other
relief afforcled to the extent that the City Manager may determine the construction interferes with
the authorized operations, provided a claim therefor is filed with the City Manager within one
hundred (100) days of commencement of construction.
11.2 Operator agrees to cooperate with City in the event the consuvction affects the
Premises by vacating and removing therefrom all items of inventory, trade fixtures, equipment
and furnishings for such periods as are required by the construction of the new facilities.
Operator further agrees to cooperate in the determination of the abatement and/or other relief to
be provided by furnishing all information requested relative to the operation and permitting
examination and audit ofall accounting records kept in connection with the conduct thereof.
I.aLatkum, 01maum, Amebnon1061'/1$I'uwl.doce Page 16
11.3 hollowing completion of any new facility and or improvement, Operator shall
rosume its operations therefrom within thirty (30) days of written notice fi-otn the City Manager.
11.4 The aforementioned provisions ofthis section shall also be applicable in the event
of performance of work at Lake Elsinore Recreation Area that requires a partial or total closure
thereof', except that the abatement and/or other relief to be provided shall be based upon the
extent the City Manager may determine that the reduction in the public's use due to the partial or
total closure thereof; has affected the Operator's operations.
11.5 Operator agrees to accept the remedy heretofore provided in the event of
construction upon the Premises and/or Lake Elsinore Recreation Area and hereby waives any
and all additional rights and remedies for relief or compensation that are presently available or
may be made available hereafter under the laws and statutes ofthis state.
12. EASE—MI-NIS AND USE 91BBOA'C 1 _AUNCI-1 FACILITY
12.1 City reserves the right to establish, grant or utilize casements or rights of' way
over, under, along and across the Premises for utilities and/or public access provided that City
shall exercise such rights in a manner as will avoid any substantial interference with the
operations to be conducted hereunder, Should the establishment of such easements permanently
deprive Operator of the use of a portion of the licensed operations, an abatement of payments
shall be provided in an amount proportional to the total area in the before and after conditions.
Operator also agrees to allow the City, the Lake Elsinore Police Department, the Riverside
County Sheriff's Department and any other public agency providing public safety to enter onto
the Premises and utilize the Boat launch andparking facilities without charge.
13. TAXES AND ASSP.SSMt3NTS
13.1 The property interest conveyed herein may be subject to real property taxation
and/or assessment thercon, and in the event thereof, Operator shall pay before delinquency all
lawful taxes, including but not limited to possessory interest taxes, assessments, fees or charges
which at any time may be levied by the State, County, City or any other tax or assessment -
levying body upon the Premises and any improvements located thereon.
13.2 Operator shall also pay all taxes, assessments, fees and charges on goods,
merchandise, fixtures, appliances and equipment owned or used therein.
14. NON-DISCRIMINATION
14.1 Operator hereby certifies and agrees that it will comply with 'I VI of the Civil
Rights Act of 1964, Section 504 of the Rehabilitation Act of 1973, the Age Discrimination Act
of 1975, Title XI of the Education Amendments of 1972, where applicable, and Title 43, part 17
of tile Code of hederal Regulations Subparts A and 13, and the Amcricaurs with Disabilities Act of
1990, to the end that no persons shall, on the grounds of race, creed, color, national origin.
La 1J1rUIW OpelaI mis Agmmnmit 001715 FinaI docx Page 17
political affiliation, marital status, sex, age or disability, be subject to discrimination under the
privileges and use granted by this Agreement or under any project, program or activity supported
by this Agreement.
142 Operator certifies and agrees that all persons employed thereby, are and shall be
treated equally without regard to or because of race, creed, color, national origin, sex, age,
marital status, or disability, and in compliance with all federal and state laws prohibiting
discrimination in employment, including, but not limited to, the Federal Civil Rights Act of
1964, the Unruh Civil Rights Act, the Cartwright Act, and the State Fair ,Employment practices
Act.
14.3 Operator certifies and agrees that subcontractors; bidders and vendors thereof'' are
and .shall be selected without regard to or because of race, creed, color, national origin, sex, age,
marital status, or disability.
14.4 All employment records shall be open for inspection and re -inspection at any
reasonable time during the term of this Agreement for the purpose of verifying the practice of
non-discrintrination by Operator in the areas heretofore described.
14.5 If City finds that any of the above provisions have been violated, the same shall
constitute a material breach of contract upon which City may determine to cancel, terminate, or
suspend this Agreement. City reserves the right to determine independently that the non-
discrimination provisions of this Agreement have been violated. Ln addition, a determination by
the California fair Employment and Housing Commission or the Federal Equal Employment
Opportunity Commission that the Operator has violated state or federal non-discrimination laws
or regulations shall constitute a finding by City that Operator has violated the non-discrimination
provisions of this Agreement.
14.6 The parties agree that in the event Operator violates the non-discrimination
provisions contained herein, City shall, at its option, be entitled to a sum of Two Hundred
Dollars ($200) pursuant to California Civil Code 1671 as liquidated damages in Lieu of
canceling, terminating or suspending this Agreement. Operator finthcr agrees that Two Hundred
Dollars ($200) is a reasonable sum under all of the circumstance existing at the time of the
execution of this Agreement.
15. AR13ffRAl"ION
15.1 Any controversy arising under paragraph 4.2 of Section 4 - (Payment); and
paragraph 6.8 - (Prices) of Section 6 - (Operating Responsibilities) shall be submitted to
arbitration by it single arbitrator under the Commercial Arbitration Rules of the American
Arbitration Association, as the rules now exist or may be subsequchtly amended, except as
hereinafter modified; the locale for the arbitration shall be within the County of Riverside; the
sole issue(s) for determination shall be the specific issue(s) submitted; and the expenses subject
to assessment by the arbitrator shall be bone equally by the parties.
La anma Opamtlons Aayeement 061715 hmitdoc% page 18
15.1.1 The sole issue fbr determination Of a controversy submitted nuclei'
paragraph 4.2 shall be the fair rental value for this Agreement based upon a consideration of the
factors specified in said paragraph.
15.1.2 The sole issue for determination of a controversy submitted under
paragraph 6.8 shall be the price(s) charged for the good(s) or service(s) in dispute based upon a
consideration of the factors specified in said paragraph.
15.2 City and Operator acknowledge and agree that paragraph 15.1 constitutes an
enforceable agreement to submit the controversy to arbitration under the enforcement provisions
of the California Arbitration Act, as the law now exists or may be subsequently amended,
16. RESERVED
17. CANCELLATION
17.1 'Phis Agreement may be terminated without cause by either party upon sixty (60)
days written notice to the other party.
17.2 Upon the occurrence of any one or more of the events of default hereinafter
described, this Agreement shall be subject to cancellation. As a condition precedent thereto, the
City Manager shall give Operator ten (10) days notice by registered or certified mail of the state
set for cancellation thereof; the grounds therefore; and that an opportunity to be heard thereon
will be afforded on or before said date, if request is made therefor.
17:3 ippon cancellation, City shall have the right to take possession of the Pi miises and
the Campground, including all improvements, equipment, and inventory located thereon, and use
satuc for the purpose of satisfying and/or mitigating all damages arising iiom a breach of this
Agreement.
17.4 Action by City to effectuate a cancellation and forfeiture of possession shall be
Without prejudice to the exercise of any other rights provided herein or by law to remedy a
breach ofthis Agreement.
17.5 Any trustee, beneficiary, mortgagee or lender (hereinafter "Lender") under a
hypothecation or mortgage previously approved by the City Manager shall have the right al any
time during the term of this Agreement to undertake any and all action that may be required in
order to prevent a cancellation of this Agreement and a forfeiture of the license. Accordingly,
the City Manager .shall send a copy of any intended cancellation of this Agreement to any such
Lender whose security would be affected thereby, provided that such Lender shall have
previously registered with the City Manager by written notice specifying the name and address
of said Lender; and upon request thereof f'or postponement, extend the date set therefor by such
Time as the City Manager finds reasonable in order to allow said parties to correct the grounds
therefor or to provide a new Operator under a bower 01' sale or foreclosure contained in the
hypothecation or mortgage, who upon transfer thereto shall become responsible for the
correction thereof within such time as may be allowed by the City Manager.
I.a Lergmu(,)peratmns Aemcmcw 06 17 1 i I: inaldocs Page 19
18. EVENTS OF DETAUL f
The following shall constitute an event of default under this Agreement;
18.1 The unauthorized abandonment, vacation or discontinuance of operations for
more than twenty-four (211) consecutive hours.
18.2 The failure of Operator to punctually pay or make the payments required herein
when due, where the delinquency continues beyond ten (10) clays following written notice for
payment thereof.
18.3 The failure of Operator to operate in the manner required by this Agreement,
where such failure continues for more than ten (10) clays after written notice from the City
Manager to correct the condition.
18.4 The failure to maintain the Premises and the improvements constructed thereon in
the state of repair required herein, and in a clean, sanitary, safe and satisfactory condition, where
such failure continues for more than ten (10) days after written notice from the City Manager to
correct the condition.
18.5 The failure of'Operator to keep, perform and observe all of the other promises,
covenants, conditions and agreemcnts set forth in this Agreement, where such failure continues
f;or more than thirty (30) days after written notice from the City Manager for correction thereof',
provided that where fulfillment of such obligation requires_ activity over a period of time and
Operator shall have commenced to perform whatever may be required to cure the particular
clei'ault within ten (10) days after such notice and continues such performance diligently, said
time limit may be waived in the manner and to the extent allowed by the City Manager.
18.6 The filing of a voluntary petition in bankruptcy by Operator; the adjudication of
Operator as a bankrupt; the appointment of any receiver of Operator's assels; the making of a
genet -at assignment for the benefit oi'crocluors, a petition or answer seeking an arrangement for
the reorganization of Operator under any federal Reorganization Act, including petitions or
answers under Chapter XI of the Bankruptcy Act; the occurrence of any act which operates to
deprive Operator permanently of the rights, powers and privileges necessary for the property
Conduct and operation of the Premises, the levy of any attachment or execution which
substantially interferes with Operator's operations under this Agreement and which attachment
or execution is not vacated, dismissed, stayed or set aside within a period of sixty (60) days.
18.7 Determination by the City, the California Pair Employment and Housing
Commission. or the Federal Equal Employment Opportunity Commission of discrimination
having been practiced by Operator in violation of state and/or federal laws thereon.
18.8 Failure of Operator to keep, perform and observe all other promises, covenants,
conditions and agreements set forth herein.
la Laguna operations Agw meat )6171 I maLdocx Page 20
19. IMPROPE?R CONSIDERATION
City may, by written notice to Operator, immediately terminate the right of Operator to
proceed under this Agreement if it is found that consideration, in any norm, was offered or given
by Operator, either directly or through an intermediary, to any City officer, employee or agent
with the intent of securing the Agreement or securing favorable treatment with respect to the
award, amendment or extension of the Agreementor the making of any determinations with
respect to the Operator's performance pursuant to the Agreement in the event of such
termination. City shall be entitled to pursue the same remedies against Operator as it could
Pursue in the event of default by the Operator. Operator shall immediately report any attempt by
a City officer or employee to solicit such improper consideration. The report shall be made to
the City Manager,
20. TERMINATION UPONTRANSFER R OF Tfl-l' F OR PARD CLOSURF
20.1 Notwithstanding any other provision of this Agreement, in the event the City
transfers its interest in the Lake Elsinore ]recreation Area (including the Premises) to a
governmental agency (assignee), the City reserves the right to: terminate this Agreement; or
provided there is a consent by all assignee, assign the City's interest in this Agreement to said
assignee. City shall provide the Operator with notice of termination or assignment of this
Agreement pursuant to this provision.
M2 Notwithstanding any other provision of this Agreement, in the event the City
closes the Lake Elsinore Recreation Area, this Agreement shall be terminated upon the effective
date of such closure. Upon the effective date of park closure, Operator shall immediately cease
its operations, and within fifteen (15) days therefhorn remove all items of its personal property,
equipment, and inventory. City shall provide advance notice to the Operator of such pari:
closure.
21. OPERATOR'S NON-COMPLIANCE AND I IOUIDATF'D DAMAGES
21.1 In the event the City Manager determines that there are deFciencies in Operator's
operations authorized and required herein, the City Manager will provide, as specified herein in
the section of this Agreement entitled Events of Default, a written notice to the Operator to
correct said deficiencies within specified time frames.
25.2 In the event that Operator fails to correct the deficiencies within the prescribed
tinne fiames the City Manager may, at his/her option: (1) exercise its rights under the Section
hereinafter entitled Right of Entry and/or (2) assess liquidated damages. The parties agree that it
would be impracticable or extremely difficult to fix tine extent of actual damages resulting from
the failure of the Operator to comply with the obligations for operations herein authorized and
required. The parties hereby agree that under [Ire current eircunnstances a reasonable estimate of
such damage is $250.00 per clay for each day of the period oftime that the deficiencies exist, and
that Operator shall be liable to City for liquidated damages in said amount.
Lx I.nguna OpmIlion, Mimnivnt 05171> i mntdocs Page 21
22. PUBLIC RECORDS ACT
22.1 Any documents submitted by Operator; all information obtained in connection
with the City's right to audit and inspect Operator's documents, books, and accounting records
pursuant to Section 5.3 (ACCOrnting Records) of this Agreement become the exclusive property
of the City. All such dOelllnenlS become a matter of public record and shall be regarded as
public records. Exceptions will be those elements in the California Government Code Section
6250 el sey. (Public Records Act) and which are marked "trade secret", "confidential", or
`'proprietary". The City shall not in any way be liable or responsible for the disclosure of any
Stich records including, without limitation, those so marked, if disclosure is required by law, or
by an order of covet of contpetcnt jw-isdiction.
22.2 In the event the City is required to defend an action on a Public Records Act
request for any of the aforementioned documents, information, books, records, and/or contents of
a proposal marked "trade secret", `confidential", or "proprietary", the Operator agrees to defend
and indemnify the City from all costs and expenses, including reasonable attorneys' fees, in any
action or liability arising under the Public Records Act.
23. WAIVER
23.1 Any waiver by City of' any breach of any one or more of the covenants,
conditions, terms and agreements herein contained shall not be construed to be a waiver of any
subsequent or other breach of the same or of any other covenant, condition, term or agreement
herein contained, nor shall failure on the part of City to require exact, full and complete
compliance with any of the covenants, conditions, terms or agreements herein contained be
construed as in any manner changing the terms of this Agreement or estopping City from
enforcing the Bull provisions thereof.
23.2 No delay, failure, or omission of City to re -anter the Premises, or to exercise any
right, power, privilege or option, arising from any default, nor any subsequent acceptance of
payments then or thereafter accrued shall impair any such right, power, privilege or option, or be
construed as a waiver of or acquiescence in such default or as a relinquishment of any right,
23.3 No notice to Operator shall be required to restore or revive "time of the essence"
after the waiver by City ofany default.
23.4 No option, right, power, remedy or privilege of City shall be construed as being
exhausted by the exercise thereof in one or more instances. The rights, powers, options and
remedies given City by this At shall be cumulative.
24. SURRENDER
24.1 Upon expiration of the term hereof, or cancellation thereof as herein provided,
Operator shall peaceably vacate the Premises and any anti all improvements located thereon and
deliver up the same to City in a reasonably good condition, ordinary wear and tear excepted,
l Laguna Opeiutinns Agieonem 061715 Puml docs Palle 22
subject to the right of Cily to demand removal thereof to the extent that Section 2.6 hereinbefore
may be applicable thereto.
24.2 Upon expiration of' the term, Operator shall execute and deliver to City within
thirty (30) clays after service of written demand, a good and sufficient quitclaim deed of the
Operator's interest in this Agreement and the Premises. Should Operator fail or refuse to deliver
to City a quitclaim deed as aforesaid, a written notice by City reciting the failure of the Operator
to execute and deliver the quitclaim deed shall, after ten (10) days from the date of recordation of
the notice, be conclusive evidence against Operator and all persons claiming under Operator, of
the termination of this Agreement.
25. DEFINITIONS AND IN'f 'RPRETA'fION
25.1 The following words as used herein shall be construed to have the following
meaning, unless otherwise apparent from the context in which they are used:
"Boat launch" means the boat launch at the La Laguna Resort.
"Campground and Boat Launch Operations Revenues" means Revenues collected by the
Operator related to the campground and boat launch operations (and excluding General Store
(cross Receipts).
"City" means the City of Lake Elsinore, a municipal corporation.
"City Manager' means the City Manager of the City of Lake Elsinore or his/her designee.
"Coin men coin ent Date" means June 1, 2015.
"'Designated Holidays" means Memorial Day, July 4th (unless .July 4th falls on a
Saturday in which case Friday, July 3rd shall be treated as a Designated Holiday, or unless duly
4th falls on a Sunday in which case July 5th shall be treated as a Designated I loliday), and Labor
Day.
"General Store" means the temporary building located at the Premises in which Operator
sells various merchandise including food, beverages, recreation supplies along with recreational
rentals, including boats, kayaks and other watercraft.
"General Store Gross Receipts" means Gross Receipts generated from the operating the
General Store (which includes rental of boats, kayaks and other watercraft).
"Gross Receipts" means:
u. The term "gross rcecipts" as used in this Agreement, is defined to be all
money, cash receipts, assets, property or other things of value, including but not limited to gross
charges, sales, rentals, fees and coin missions made or earned by Operator and/or all the
assignees, sub -operators, permittees or concessionaires thereof; whether collected or acorued
Ip ragunn Uperuliom Agiowww O6I115 I'inaLdo"v page 23
from any business, use or occupation, or any combination thereof, originating, transacted or
perfornned in whole or in part, at the General Store, including but not limited to boat rentals,
recreational equipment rental, the rendering or supplying of services and the sale of goods, wares
or merchandise.
b There shall be no deduction from gross receipts for any overhead or cost
or expense of operations, such as, but without limitation to salaries, usages, costs of goods,
interest, debt amortization, credit, collection costs, discount from credit card operations,
insurance and taxes. Bona fide bad debts actually incurred by Operator or its sub -operators,
assignees, concessionaires and permittees may be deducted from gross receipts. ]'here shall,
however, be no deduction for bad debts based on past experience or transfers to a bad debt
reserve. Subsequent collection of bad debts previously not reported as gross receipts shall be
included in gross receipts at the time they are collected.
C. Gross receipts reported by Operator and its sub -operators, assignees,
Operators, concessionaires and permittees, must include the fill usual charges for any services,
goods, rentals or facilities provided by Operator or its sub -operators, assignees, concessionaires
or permittees. Gross receipts shall not include direct taxes imposed upon the consumer and
collected therefiom by Operator such as, but not limited to, retail sales taxes, excise taxes, or
related direct taxes, which are direct taxes paid periodically by Operator to a governmental
agency accompanied by a tax return statement and, further, shall not include the sale or resale of
City Lake Use Passes purchased from the City.
d. The City Manager, consistent with recognized and accepted business and
accounting practices may further interpret the term `gross receipts" as used to this Agrecmcnt.
"Gross Sales Price" mcans the total consideration resulting from tine transfer of
Operator's interest in the operations of the Premises, or portion thereof, determined by the total
cash payments and the market value of all non-cash consideration, including, but not limited to,
stocks, bonds, deferred payments, secured and unsecured notes, and forbearances regarding
claims and judgments.
"l lousel<eepiag" means activities relating to keeping the Premises clean, neat, orderly and
includes but not limited to, cleaning of public restrooms and showers (excluding supplies which
shall be provided by City), trash pickup and consolidating geubage into centralized dumpsters,
use OfIll inor to medium equipment for Clean-up (such as use of a small tractor to rcnnove rubbish
in the yard area), campsite preparation, irrigating and sprinkler repairs, minor
repairs/replacement to campground equipment (picnic tables, grills and fire rings), pest
inspection and control, landscape mowing and edging, shrub trimming and non-recurring
removal ofhanging tree limbs, raking, sweeping, vacuuming, wiping, washing, hosing, and other
general care and cleaning of interior and exterior floors, walls, ceilings, doors, windows, facility
fixtures, and all adjacent grounds and walks.
"La Laguna Operating Fee" means the weekly fee paid by the City to Operator for the
reasonable cost incurred by Operator related to Operator's operational responsibilities exclusive
4a Laguna Ope,auons Agieamcnt 06 171 5 I naIdocx Page)A
o1'the General Store, as set forth in Exhibit "B", for the Initial Terill and the L'xtension Tenn (if
exercised).
"Maintenance anal Repairs" means all repairs and preservation work that is necessary to
maintain the Premises in a 'Rcas<»nble good state of repair, including: fire clearance around
Premises; free trimming and removal; repair of broken doors, windows, plumbing and electrical
fixtures, major repairs/replacement of campground equipment (picnic tables, grills and fire
rings), and windows, vandalism, painting, sewer lines, asphalt patching, water Tines or valves,
roofing, fences, septic tanks, public restroom and shower supplies, and such other maintenance
that is not Housekeeping.
"Operational Year" means each one-year period of time which commences on June 1 and
ends on May 31 throughout the Initial Term and the Extension Tenn, if exercised, of this
Agreement.
"Operator" means Williams Bait & Tackle, Inc., a California corporation, dba William's
Bait, Tackle and Boat Rental.
"Premises" means the real property described in the attached Exhibit "A."
"Reasonable" and variations thereof meads what is commercially reasonable under
reasonably anticipated circumstances.
"Reveilles" means:
a. The term "revenues" as used in this Agreement, is defined to be all
money, cash receipts, assets, property or other things of value, including but not limited to gross
charges, sales, rentals, fees and collected by Operator and/or all the assignees, sub -operators,
permittees or concessionaires thereof, related to the recreational use of the Premises by the
public, including but not limited to, boat launch fees, Lake Day Use Passes, premises
entry/parking fees for beach/day-use area patron, campground reservation deposits and rental
fees, campsite related charges, storage fees, any other access/use fees, and all other City imposed
fees and charges.
b Operator may deduct 'from revenues lake Day Use Passes and any other
required acquired access passes purchased in advance fiom the City. There shall be no deduction
Iron revenues fOr any overhead or cost or expense of operations, such as, but without lialitation
to salaries, wages, costs of goods, interest,, debt amortization, credit, collection costs, discount
from credit card operations, insurance and taxes.
C. Revenues reported by Operator and its sub -operators, assignees,
Operators, concessionaires and permittees, must include the full usual charges for any services,
goods, rentals or facilities provided by Operator or its sub -operators, assignees, concessionaires
or pernnittees. Revenues shall not include direct taxes imposed upon the consumer and collected
therefrom by Operator such as, but not limited to, retail sales taxes, excise taxes, or related direct
taxes, which are direct taxes paid periodically by Operator to a governmental agency
I;l lOJM211n11s A�v"nwnt 06171.1 rmatdocx Page 25
accompanied by a tax retw'n statement and, further, shall not include the sale or resale of City
Lake Use Passes purchased from the City.
d. The City Manager, consistent with recognized and accepted business and
accounting practices may further interpret the term `revenues" as used in this Agreement.
"Sub -operators" means any lease, license, permit, concession or other interest in the
Premises which is granted by Operator to a third party.
25.2 This Agreement shall be interpreted according 10 the rules which govern the
interpretation of contracts, as prescribed in Part 2 of Division 3 of the California Civil Code,
commencing with Section 1635.
25.3 The headings herein contained are i'or convenience and reference only and are not
intended to define or limit the scope of any provision thereof.
26. RIGHT OP ENTRY
26.1 Any officers and/or authorized employees of the City may enter upon the
Premises at any and all reasonable times for the purpose of determining whether or not Operator
is complying with the terms and conditions hereof, or for ally other purpose incidental to the
rights of the City, Additionally, City has the right to use the Boat Launch during non-operating
bows for special events, such as boat parades, at no cost to the City or the public.
26.2 In the event of an,unapthnrized abandonment, vacation or discontinuance of
operations for a period in excess of twenty-four (24) hours, Operator hereby irrevocably appoints
City as an agent for continuing operation of the license granted herein, and in connection
therewith authorizes the officers and employees thereof to (1) take possession of the such
licensed area, including all improvements, equipment and inventory thereon; (2) remove any and
all persons or property on said area and place any such property in storage for the account of and
at the expense of Operator; (3) sublease or sublicense the Premises; and (4) after payment of all
expenses of such subleasing or sublicensing, apply all payments realized therefrom to the
satisfaction and/or mitigation of all damages arising from Operator's breach of this Agreement.
Lntry by the officers and employees of City upon any licensed area for the purpose of exercising
the authority conferred hereon as agent of Operator shall be without prejudice to the exercise of
any other rights provided herein or by law to remedy a breach ofthis Agreement.
26.3 No re -envy or taking of the any licensed area by City pursuant to paragraph 30.2
of this section shall be construed as an election to terminate this Agreement unless a written
notice of such intention be given to Operator or unless the termination thereof be decreed by a
court of Coll) petentjurisdiction.
27. tNDLPGNDI3NTC:ONTRAC:TOR
This Agreement is by and between the City of Lake Elsinore and Operator and is not
intended and shall not be construed to create the relationship of agent, servant, employee,
I I awma Opciauown .,%po;mem 06 17 1 FumI nux Page 26
partnership, joint venture or association, as between City and Operator. Operator understands
and agrees that all persons furnishing services oil behalf of Operator pursuant to this Agreement
are, for purposes of Worker's Compensation Liability, employees solely of Operator and not of
City. Operator shall bear the sole responsibility and liability for furnishing 'Workers'
Compensation benefits to any person for injuries arising from or connected with services on
behalf of Operator pursuant to this Agreement.
28. CONTRACT LNPORC EMENT AND AMENDMENT'S 'ro'I'1113 ACiRFEIVM NTT
28.1 'Che City Manager shall be responsible for the enforcement of this Agreement on
behalf of City and shall be assisted therein by those officers and employees of City having duties
in connection with the administration thereof.
28.2 'Chis dOCnTtent may be modified only by further written agreement between the
parties. Any such modification shall not be effective unless and until executed by Operator and
in the case of City, until approved by the City Manager,
29. CITY'S OItALrCY ASSfIRANCL' PI
The City or its agent will evaluate Licensor's peri'ormance under this Agreement at such
reasonable intervals as determined by City. Such evaluation will include assessing Operator's
compliance with all contract terms and performance standards. Operator deficiencies which City
determines are severe or continuing and that may place performance of the agreement in
jeopardy if not corrected will be reported to the City Council. The report will include
iriprovennenticorrective action measures taken by the City and Operator. If improvement does
not occur consistentwith'Tne corrective action measures, City may terminate this Agreement rpt
impose other penalties as specified in this Agreement.
30. NOTICES
Any notice required to be given under the terms of this Agreement or any law applicable
thereto may be: (1) delivered by personal service; or (2) placed in a sealed envelope, with
postage paid, return receipt requester!, addressed to the person on whom it is to be served, and
deposited in a post office, mailbox, sub -post office, substation or mail chute, or other like facility
regularly maintained by the United States Postal Service. The address to be used for any notice
served by mail upon Operator shall be 198 S. Nebraska Street, Lake Elsinore, CA 92530 or such
other place as may hereafter be designated in writing to the City Manager by Operator. The
address to be used for any notice served by mail upon the City shall be City of Lake Elsinore,
Attention: City Manager, 130 South Main Street, Lake Elsinore, CA 92530, or such other place
as may hereaflar be designated in writing to Operator by the City Manager. Service by mail shall
be deemed complete upon deposit in the above mentioned manner.
32. SEVERABILITY
Ill J 021,Mti UperaI,om A,, Iunlenl0G171i Pmat,ducx Page 27
If any provision of this Agreement is determined to be illegal, invalid or unenforceable
by a court of competent jurisdiction, the remaining provisions hereof shall not be affected
thereby and shall remain in full force and effect.
33. FNITIREiAGREEMENT
Accordingly, the Agreement and the G'xhibit(s) attached hereto, constitute the entire
agreement between City and Operator for the Uses granted herein. All other agreements,
promises and representations with respect thereto, other than contained herein, are expressly
revolted, as it has been the intention of the parties to provide for a complete integration within
the provisions of this document, and the Exhibit(s) attached hereto, the terms, conditions,
promises and covenants relating to the operation of the Premises and to be used in the conduct
thereof. The unenforceability, invalidity, or illegality of any provision of this Agreement shall
not render the other provisions thereof unenforceable, invalid or illegal.
34. AUTHORIZATION WARRANTY
Operator represents and warrants that the signatory to this Agreement is fully authorized
to obligate Operator hereunder and that all corporate acts necessary to the completion of this
Agreement have been accomplished.
1 n I iiguna Opembons Ag, cement 061715 Final dots Page 2
IN WITNESS WHEREOF, the parties have executed this Agreement on the respective
dates set forth below.
DATED:2015
DA'I E,,D: 2015
AT11 ST:
U
_.: City Clerk
APPRpOVED AS TO FORM:
C y Attorney
Ln 1aguna 01Mill I ms,4greemmiltO6171.5 IaLduex Page 29
WILLIAMS RAPT & TACKLE., INC., a
California corporation, doing business as
WILLIAMS BAIT, TACICI.T AND BOAT
Riwml,
r
BY: __kill
m .iohn. n, President
CITY OF LAKE ELSINORE, a municipal
corporation
CtraPit
City Managcr
by:
EXHIBIT"A"
PREMISIsS MAI'
EXIIIBIT "B"
SCHE'DIJLF, OF FEES AND HOOKS
During the months of June through October the following services will be provided from the
howl of 6:00 am until 8:00 p.m.:
Management services
Weekly Supcivision of Gatehouse and Grounds Staff 35 hrs
Grounds and Gatehouse Staff 210 hrs
Weekly Billing $6,717.00
During the months ofNovember through March the following services will be provided frau the
howl of 7:00 a.m. until 5:00 p,rn.;
Management services
Weekly Supervision of Gatehouse and Grounds Staff 30 hrs
Grounds and Gatehouse Staff 110 hrs
Weekly Billing $3,657.00
During the months of April and -May the rli'llowing services will be provided 7:00 a.m. until 6:00
p.m.:
Management services
Weekly Supervision of Gatehouse and Grounds Staff 35 hrs
Grounds and Gatehouse Staff 120 hrs
Weekly Billing $.3,733.00
Billing rate is subject to change based at applicable changes to federal, state and local
employment laws.
Increased hours of service will be available on written request front the City of Lake Elsinore.
Increased fees will be based upon a percentage of additional hours of'service.
Week nr Weekly means Monday tlurough Sunday.
POLICY NUMBER; CPS2215870
COMMERCIAL GENERAL LIABILITY
CG 201'1 0413
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
LESSORSOF PREMISES
This endorsement modifies insurance provided under the following:
COMMERCIAL GENERAL LIABILITY COVERAGE PART
SCHEDULE
Designation Of Premises (Part Leased To You):
32040 RIVERSIDE DRIVE
LAKE ELSINORE, CA 92532
Name OfPersnn(s) Or Organizations) (Additional Insurod):
CITY OF LAKE ELSINORE
I30 SOUTH MAIN STREET
LAKE ELSINORE, CA 92530
Additional Premium: $
Information required to complete this Schedule, K not shown above, will be shown in the Declarations.
A. Section II -Who Is An Insured is amended to in-
clude as an additional insured the person(s) or
organization(s) shown in the schedule, but
only with respect to liability arising out of the
ownership, maintenance or use of that part of
the premises leased to you and shown in the
Schedule and subject to the following additional
exclusions:
This insurance does not apply to:
1. Arty "occurrence" which takes place after you
cease to be a tenant in that premises.
2, Structural alterations, new construction or
demolition operations performed by or on be-
half of the person(s) or organlzatlon(s) shown
in the Schedule.
However:
1. The insurance afforded to such additional in-
sured only applies to the extent permitted by
law; and
2, if coverage provided to the additional insured
is required by a contract or agreement, the
insurance affordec to such addiiigrial insured
will not be broader than that which you are
required by the contract or agreement to pro-
vide for such additional insured.
a. With respect to the insurance afforded to these
additional insureds, the following is added to
section III - Limits Of Insurance:
If coverage provided to the additional Insured is
required by a contract or agreement, the most we
will pay on behalf of the additional insured is the
amount of insurance:
1, Required by the contract or agreement; or
2, Available under the applicable limits of Insur-
ance shown in the Declarations;
whichever is less.
This endorsement shall not increase the applica-
ble Limits of Insurance shown in the Declarations.
CG 20 110413 Copyright, Insurance Services Office, Inc., 2012 Page 1 of 1
INSURED c920110413. Ean
1 nreSrlrinAre no IPiCItOAAICl^ Issue Date (MMIDDIYY)
AUTHOR17. RFPRESGNTAR E
flu 11111vir-MI.,itiL. WoFN TIT Ivn I" WI uwv,,.-.,..�.. r
AGENCY ROBERT DAPPFRINSURANCEAOFNCY
07/01/2015
Name
176321RVINFBLVD 11100
This cediilcate is issued as a matter of information only and confers no right,
&
upon the certificate holder. This certificate does not amend, EXtend or alter the
Address
TUSTIN, CA 92780
coverage afforded by the policies shown below.
BusA657.600-8106 Fw11714.876-1499
COMPANIES PROVIDING INSURANC E
Courulx
Uncfl
COMFMV
wrrER
Scottsdale Insurance Company
INSURED William Johnson
A:
Name
DBA Williams Bait and Tackle and Boat Rentals
ONPFN
L n,eA
a
32040 Riverside Drive
0OWANY
ISM
Address
Lake Elsinore, CA 92530
COVERAGES
IO
YO OtlRTI¢V THATTH6 hOLICIP.R OV INtlVRANC4 LIET¢D 68LDW FIAVS 6¢HN
Itltlll GU l'V TN6INRIIN6D NAM60 AEOV8 POR THC POLICY PERIOD INOIVATED NOTWITH6TANDINO
ANY REQ
VIREMCN'f, TERM OR CONDI}ION a?P ANY CONTRACT OR OTHNR DOCUN.6NT
WYfM R .PELT TO WHICN TNIR O6R,MCATC MAY OE IS.L6D OR MAY PGRTAIN, TIIG INDIL AMLE
All .... 0 OY 1H6 POLIO'E0 O@DO DOCV H@REIN IB Y V EJGC T TO ALL TNl' T... L. CXOLVa,ON¢ ANo CONDIT,ONM1 OP 4V OH POUCICIX. LIMITH 6HO WN MAY HAVO OEEN RCDUOGD
UY PAID CLAIM..
OLIOY ¢PPFOiIV9
POLICY 6%PIRATION
POLICY UMIYC
CO
LTN.
T'P.OF INBLRANLC
POLICY NVMCCR
DATO WMIO.NYI
OAT6 (MMIpONYI
A
1'8149
N.RAL LIA¢ILITY
CPS2215870
04/10/2015
04/10/2016
���*P ^*@
: 2,000,000
fCOMMERC!AL
RENEWAL I,IADILNV
PCODNf.Te.COMPftlpO
AOORCOATR
y,
2,000,000
❑
-OCOURR.NO[YERIXION
y
rl
CONTRAOTVAL-INOICGNTALONIY
PERIONAL8
yt 000,000
>
❑
OWNERS 8 6ONTRACTORS PRO T.
nDv6RnymD INmnY
EACH OCCURRENCE
$ 1,000,000
FIRE DAMAGE (My Me Piro)
$ 100,000
MEDICAL EXPENSE
-_..'
(AAY One Person)
$ 5,000
C 0 BBIRED
❑
AUTOMOBILE LIABILITY
SINGLE LIMIT
s
_
❑
ALL OWNED COMMERCIAL AUTOS
BODILY INJURY
(PERP
5
[3
SCHEDULED AUTOS
Y INJURY
AOOILYI
❑
NIREU AUiOtl
(PER ACCIDENT)
$
❑
NON-OYRJEDAUIOS
PROPERTY DAMAGE
IS
❑
GARAGE MABILMY
GARAGE AGGREGATE
$
❑
UMBRELLA DADILITY
LIMIT
$
C3
O N
STATUTORY
_
WORKERS'COMPENSATI
EACHACCIDENT
$
AND
DISEASE—EACH EMPLOYEE
$
EMPLOYERs1 LIBiLITY
DISEASE POLDYUMIT
$
DESCRIPTION OFOPERAN ONSNEKKNESRLESTRICTIONSISPECIAL ITEMS; Fishing boats and tackle rentals and bait supplies. City of Lake ElsiILore Is included as
additional insured for the facility located at 32040 Riverside Dr, Lake Elsinore CA 92530
CERTIFICATE H 0 LDER
CANCELLATION
SH BUILD ANY OF THE ABOVE DESCRIOBD POLICIES BE CANCELLED DEFORE THE EXPIRATION DATE THEREOF,
THE ISSUING COMPANY WILL ENDEAVOR TO MAIL SO DAYS WRITTEN NOTICE TO TTIE CERTIFICATE HOLDER
NAMED TO THE LEFT BUT SUCHNO OBLIGATI ON OR LIABILITY OF
TS
City of Lake Elsinore
R REPRES NTATNES�GE
ANY KIND U PON THE C 0 MPANYFAILURE
AGENTS
Namc
&
130 South Main Street
Addreas Lake Elsinore, CA 92530
Ph: (951)674-3124
AUTHOR17. RFPRESGNTAR E
Date: June 17, 2015
Dear Christina & William,
Please see the enclosed form(s) from Liberty Mutual.
9 Certificate of Automobile Insurance (Binder)
Thank you for insuring with Liberty Mutual. !^. e took forvaard to
providing you with quality coverage and outstanding service.
Sincerely,
Liberty Mutual
3
10�Liberty
mutuat
---,
INSURANCE
NJIU j s90 i,4L
ACTION
REQUIRED:
Please review and keep
with your insurance
documents.
CONTACT US
For questions, please
call us at
1-800-225-13285.
10�
Lib(I-tv
ml,lttmj
N3URABGF.
CERTIFICATE OF AUTOMOBILE INSURANCE
THIS IS TO CERTIFY THAT the named insured is, at the date of this certificate, insured by the company
with respect to the automobiles hereinafter described for the types of insurance and respective
coverages hereinafter designated by entry of the limits of liability or a statement that the coverage is in
effect and in accordance with the provisions of the Automobile Policy in use by said company.
This Certificate of Insurance neither affirmatively nor negatively amends, extends or alters the coverage
afforded by the policy.
INSURED'S NAME AND ADDRESS FOR LIEN HOLDER INQUIRIES, CALL OR WRITE
Christina Johnson 1-800-409-0733
William Johnson P O BOX 29017
198 S Nebraska St PHOENIX, AZ 85038
Lake Elsinore, CA 92530-1853
DESCRIPTION OF THE INSURANCE FOR WHICH THIS CERTIFICATE IS ISSUED
Policy Number: A02-268-113374-70 Effective Date: 04/03/2015 Expiration Date: 04/03/2016
DESCRIPTION OF AUTOMOBILES
Year of Model
PART A
PART B
PART D— DAMAGE'r0 YOUR AUTO COVERAGE
COVERAGES:
LIABILITY
MEDICAL
COVERAGEFOR
DEDUCTIBLE AMOUNT APPLICABLE TO EACH LOSS
COVERAGE
PAYMENTS
LOSS CAUSED
IN DOLLARS
COVERAGE
BY COLLISION
Loss Caused by Collision
Loss Other Than Loss
INCLUDED
_
Caused by Collision
Limits of
250/500/100
1000
Yes
"ACV" indicates Actual
"ACV" indicates Actual
Liability
Cash Value ACV Less
Cash Value ACV Less
$500Deductible
$500 Deductible
* Includes
Medical
Accidental Death Benefit: $
Protection Against Uninsured Motorists Coverage — Limit Selected: $250/500
Expense
POLICY INCLUDES: ❑ BASIC NO-FAULT COVERAGE ❑ OPTIONAL NO FAULT COVERAGE
DESCRIPTION OF AUTOMOBILES
Year of Model
Trade Name
Bod Typa
Identification or Serial Number
2009
DOUG
PKP4X24D
1D3HB18KX9S807739
ADDITIONAL INTEREST
Such insurance as is afforded under the
Liability Coverage of the policy shall also
apply, with respect to covered autos, to
each interest hereinafter named, as an
insured; but such inclusion of additional
interest or interests shall not operate to
increase the limit of the company's liability.
NAME AND ADDRESS:
The insurance described herein is in effect on the date of this certificate and shall remain in force until
canceled in accordance with the terms of the policy.
(� �,✓��
Loss PAYEE and ADDRESS Secretary Presid t
Schools First Federal Credit Union
PO Box 11547
Santa Ana CA 92711-1547
Dated: 06/17/2015 at: 12:34 AM
00 Countersigned
AUTHORIZED REPRESENTATIVE
PS485 12 10 Liberty Mutual Fire Insurance Company Page 1 of 2
z
�,[
10�Iliberiv
Y1utua,l:
INSURANGB
LOSS PAYEE
Such insurance as is afforded by the policy for loss of or damage to the automobile is payable, as
interest may appear, to the named insured and the Loss Payee indicated on the previous page in
accordance with the terms of the Loss Payable Clause.
Term of Loan: From: 01/20/2013 To: 01/19/2016
LOSS PAYABLE CLAUSE
Loss or damage, under this policy, shall be paid as interest may appear to you and the loss payee
shown on the front of this certificate. This insurance covering the interest of the loss payee shall not
become invalid because of your fraudulent acts or omissions, unless the loss results from your
conversion, secretion or embezzlement of your covered auto. However, we reserve the right to cancel
the policy as permitted by policy terms, and the cancellation shall terminate this agreement as to the
loss payee's interest. We will give the same advance notice of cancellation to the loss payee as we give
to the named insured shown in the declarations.
When we pay the loss payee, we shall, to the extent of payment, be subrogated to the loss payee's
rights of recovery.
NOTICE TO OTHERS IF CANCELLATION OCCURS
"We" will not cancel "Your" Policy or reduce the insurance under any of its coverages until at least 10
days after we have mailed a written notice of such cancellation or reduction to the person(s) named as
additional interest on reverse side.
AS 1019 (ed 12-89)
PS485 12 10 Page 2 of 2
CERTIFICATE OF LIABILITY INSURANCE I °A;E`MM;°°'YYY
THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS
CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES
BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED
REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER.
IMPORTANT., If the cortiticate holder Is an ADDITIONAL INSURED, thepollcyges) must be endorsed If SUBROGATION IS WAIVED, subject to
the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certlficate does not confer rights to the
PRODUCER CONTACT
27710 Jefferson
Insurance Agency, Inc. - Tomec PHONE -
27710 Sefferson Ave., Sts. 100 _(AU,NCExp_--- U
EMAIL
Temecula CA 92590 n°gRESS..
6
INSURED
William's Hate s Tackle, Inc.
32040 Riverside Drive
Lake Elsinore CA 92530
COVERAGES CERTIFICATE NUMRER- Vere To z7zi RFVISION NIIMRFR-
THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD
INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS
CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS,
EXCLUSIONSAND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAYHAVE BEEN REDUCED BY PAID CLAIMS,
IM 9R POLICY EFF POLICY FNP - _ --
LTR TYPEOFINSURANCE POLICY NUMBER mmIDDIYYYY MIAIDDIYYVV LIMITS
--
COMMERCIAL GENERAL LIABILITY
CLAIM&M4DE OCCUR
Ll
[ICH OCCURRENCE
R
' MAV KN
PREMISES E� OL<umO .Lc
5
EXP(My we e010 )
_MED
PERSONAL a MW iN..OPY
_
5
l
L AGGREGATE LIMITAPrPL�
POLICY 1:1IElS PEEP
QCT t _ J LOC
GEN
Gf.NERN. AGGRECATE
$
PRODUCTS,COMPIOPAGG
5
_
$
OTHER.
AUTOMOBILE
LIABILITY
COMBINED SINGLE;JMIi
IPo
$
ANY AUTO
BODILYINJURY
N
BODI6Y IIJJURY(PorpOrson)
$
ALL
UTO$MNEO AUTODULED
BODILY INJURY (Pe as d¢nU
$
HIREOAUTOS NON-OKNED
... AUTO$
PR OP[R1'Y DNAAGE
_iPet flcLid¢ntl
,$
UhiaftELLA LIAB
__
OCCUR
LACII OCCURRENCE
EXCESS LIAB
"INS MAOE
AGGPLOATE
3
DED RETENTION$
_
$
A
WORKERS COMPENSATION
AND EMPLOYERS'LIABILITY
AM ,'kiOPRIETORIPARTNERIEXECUTIVE YIN
OFRCER;MEMLEREXCLUDEllv
NIA
400295978
6/26/2015
6/26/2016
PER OTH-
STA1'VTE ER
_
EL CACHACCIDf NT
$ 1,000,000
E.LDISLASE-EAEMPLOYLE
- _
$ 1,000,000
(Mmaalory In NH)
Ifw s. b¢ antler
FL DIS[ASE-POLICY LIMIT
$ 11000,000
RI1PTI1TI
DESCON OP OPERAfiONS U¢bw
DESORPTION OF OPERATIONS) LOCATIONS /VEHICLES Remarks Sebedule, may bo aVactad If mora space Is required)
R:
Re: Comp Ground Facility Maintenance OParatione.
e operations,
Evidence of Coverage
SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE
THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN
ACCORDANCE Willi THE POLICY PROVISIONS.
AUTHORIZED REPRESENTATIVE
ACORD 25 (2014101) The ACORD name and logo are registered marks of ACORD
Page 1 of 7.
CERTIFICATE OF LIABILITY INSURANCE I DATE 6/ 25/2 (25/2 IY5
6015
THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS
CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES
BELOW. THIS CERTIFICATE OF INSURANCE. DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED
REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER.
IMPORTANT: If the certificate holder Is an ADDITIONAL INSURED, the policy(los) must be endorsed. It SUBROGATION IS WAIVED, subject to
the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the
certificate holder In lieu of such ondorsementis).
Strachota Insurance Agency, Inc. - Temec PHONE
__-
27710 Jefferson AVG., ate. 100 tg'N
MAlCL
INg EM9-
T6meCUla CA 92590 .ADDRESS:__.,,,
INSURED
William's Bate & Tackle, Inc.
32040 Riverside Drive
Lake Elsinore CA 92530
rc wmnoco........ RFVISfON NLIMRFR-
THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD
INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS
CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES. DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS,
EXCLUSIONSAND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAYHAVE BEEN REDUCED BY PAID CLAIMS.
INSR ._.,_.._.___._. ACD. SUBR POLICY EFF POLICY-E%P _. .._._..___.__
LIMITS
LTR TYPE Of INSURANCE M&D_ POLICY NUMBER MMIDDIYYYY MMIODIYYYY
COMMERCIALGENERALLIABILITY
VhCI i OCCURREENCE'rrw
S
CLAIMS MADE1:1 OCCUR
PRLMISES IHa w,wur�
9
MED F' P(fty one p......
$
PLREONAL&AOVINjURY
S
OE_MLAGGREGATF.UMHAPPLFSPER.
GENERA. AGGRICATF _
S
POLICYI� PRO a LOC
.ECT'
PRODUCTS, COMPIOP AGG
OTHER
CDM -WEO S' LC LIM-IT
AUTOMOBILE LIABILITYEa
BODILY INJURY (Pn I e wO
§
JJJYfNTO
_
BODILY INJURY (Po accronnll
S
-OWNED
PI OP RTl'DAMAGF
$
4SAUOSIJLED
OS
OCCUR
LACI I OCCURRr HCr
S
CLAIMS-WMDE
AC rEOATE
DED RETENTIONS
a
A
WORD ERS COMPENSATION
400295970
6/26/2015
6/26/2016
rTAi UIE FRH
AND EMPLOYERS' LIABILITY YIN
ANY PROPRILTORIPARTNERIFXFCVIPR_
CL f/U I ACCIDENT
c 1 00
0,090_
OrFICCRIMEMDf) FXttUC[D9 ❑N/A
(Mandatoryln NN)
f L DI LA C.� LP L /fLOYEf:
S 1,000,000
Ryas. describe under
DESCRIPTION Or OPFRATIONS blow
-
C L. DISFAGC- POLICY LIMIT
6 11000,000
DESCRIPTION OF OPERATIONS I LOCATIONS I VEHICLES {ACORO 101, Adtlltlonal Remarks Schedule, maybe attacfleU f more space Is requirod)
RE: Camp Ground Facility Maintenance Operations.
Evidence of Coverage
SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE
THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN
ACCORDANCE WITH THE POLICY PROVISIONS.
U ) IORIZED REPRESENTATIVE.
reserved.
ACORD 25 (2014101) The ACORD name and logo are registered marks of ACORD
Page 1 of 1
Agenda Date: 1/24/2017
In Control: City Council
Agenda Number: 6)
City of Lake Elsinore
Text File
File Number: ID# 17-050
Version: 1
130 South Main Street
Lake Elsinore, CA 92530
w .lake-elsinore.org
Status: Consent Agenda
File Type: Report
City of Lake Elsinore Page l Printed on 1119/2017
cl,ry Of' fes.
LADE LSMO E
d DREAM EXTIUML
REPORT TO CITY COUCIL
To: Honorable Mayor and Members of the City Council
From: Grant Yates, City Manager
Prepared By: Jason Simpson, Assistant City Manager
Date: January 24, 2017
Subject: Acquisition of City Fleet Replacement Vehicle
Recommendations
Authorize the purchase of one (1) 2017 Chevy Silverado 3500HD 4WD Regular Cab with 9ft
Dump Body from National Auto Fleet Group (Contract Number 102811) member dealership in
the total amount of $52,938.84.
Backaround
The City of Lake Elsinore has an inventory of 125 pieces of equipment, which includes
vehicles, off-road equipment, multiple watercrafts, and other various machinery. Presently, the
City has a need to replace the dump truck which has long exceeded its useful life is requiring
significant repairs to keep it functional. Staff has researched the purchase of these vehicles
from local dealerships as well as cooperative government vehicle purchase contracts. The result
has yielded the most favorable pricing is from National Auto Fleet Group, Contract Number
102811. These contracts are nationally solicited, competitively bid and awarded on behalf of
National Joint Powers Authorities (NJPA) current and potential government and education
member agencies. This national contract has been assigned to area Dealerships for vehicle sale
and delivery at the competitive contracted price. The State statute authorizes "public
agencies" to participate in cooperative purchasing agreements like those established by NJPA.
Therefore, all City's and Governmental agencies may take advantage of this pricing when it is
determined to be cost effective.
Staff posted an RFP on the City's website and opened the pricing up to all dealers including local
dealers for fleet pricing but received only one response. The below chart lists the results of the
purchase outcome:
Acquisition of City Fleet Replacement Vehicle
January 24, 2017
Dealership
Truck 4x4 - Price
National Auto Fleet Group
1 @ $52,938.84
Fiscal Impact
Vehicle and equipment replacement is funded in the Internal Service Fund with sufficient funds for
Fiscal Year 2016-17.
Exhibits
A — Quote from NAFG
National Auto Fleet Group
A Division of Chevrolet of Watsonville
490 Auto Center Drive, Watsonville, CA 95076
(855) 289-6572 • (855) BUY-NJPA • (831) 480-8497 Fax
Fleet@NationalAutoFleetGroup,com
12/16/2016
Francisco Diaz
City of Lake Elsinore
521 North Langstaff St
Lake Elsinore, CA 92530
Dear Francisco Diaz,
Quote ID#2822
National Auto Fleet Group is pleased to quote the following vehicle(s) for your consideration.
One (1) New/Unused (2017 Chevrolet Silverado 350OHD (CK36003) 4WD Reg Cab 137.5"
WB 59.06" CA with 9ft Dump Body,) delivered to your department yard, each for
(1)One Unit
Base Price $ 31,162.34
9ft Dump Body $ 17,847.00
Tax (8.00%) $ 3,920.75
CA Tire Fee $ 8.75
Total $ 52,938.84
-per your attached specifications:
Additional Available Options:
1. FORD CD Service Manual $400.00
2. 1 additional Ford Key $200.00 each
This vehicle(s) is available under the National Joint Powers Alliance Bid Number 102811.
Please reference this Bid Number on all Purchase Orders to National Auto Fleet Group.
Payment terms are Net 30 days after receipt of vehicle.
Thank you in advance for your consideration. Should you have any questions, please do not
hesitate to call.
Sincerely,
ope
National Fleet Manager
Office (855) 289-6572/
Fax (831) 480-8497
cis�irocErry)c� NISSANTOYOTA
City of Lake Elsinore 130 South Main Street
Lake Elsinore, CA 92530
` w .lake-elsinore.org
I tKt;
Text File
File Number: RES 2014-009
Agenda Date: 1/24/2017 Version: 1 Status: Consent Agenda
In Control: City Council File Type: Resolution
Agenda Number: 7)
City of Lake Elsinore Page 1 Printed on 111912017
CITY
LAKE f�LSIIR�E
`�_ I3R1i:AA1 F: 1'REMt
REPORT TO CITY COUCIL
To: Honorable Mayor and Members of the City Council
From: Grant Yates, City Manager
Prepared By: Jason Simpson, Assistant City Manager
Date: January 24, 2017
Subject: Fiscal Year 2016-17 Mid -Year Operating Budget Status Report — General
Fund
adopt A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE,
CALIFORNIA, AMENDING THE FY 2016-17 ANNUAL OPERATING BUDGET FOR MID -YEAR
ADJUSTMENTS
BACKGROUND
The City is presenting its FY2016-17 Mid -Year Budget review of the General Fund. The City's
Budget Committee reviewed the FY2016-17 Mid -Year Revised budget for the General Fund.
Please note that a review and status report update for Special Revenue Funds, Capital Project
Funds, and other funds will be a part of the process for the FY2017-18 Operating Budget and
Capital Improvement Plan Budget, which includes a comprehensive workshop in May 2017.
The downturn in the economy continues to challenge many cities throughout the state and Lake
Elsinore is no exception. While the economy is showing continuing signs of improving and the
development activity momentum is building within the City, it is critical that we continue to operate
in a fiscally prudent manner, maintain current public safety service levels, and continue providing
key services that our citizens have come to expect. As such, the FY2016-17 Mid -Year Operating
Budget Status Report proposes to maintain current services through June 30, 2017, maintains
the Uncertainty Reserve at 17.5%, and establishes a path towards development of the FY2017-
18 Operating Budget and the Five (5) Year General Fund Financial Plan. Included as attachments
to this report are several schedules illustrate (in a tabular format) the current status of the FY2016-
17 Mid -Year Budget for the General Fund, as follows:
Exhibit A — Resolution 2017- _ including the attached financial schedules
Summary of Revenues, Expenditures, and Change in Fund Balances — General
Fund - FY2016-17 Mid -Year Annual Operating Budget
Fiscal Year 2016-17 Mid -Year Operating Budget
January 24, 2017
Page 2 of 4
DISCUSSION
Revenues:
At mid -year, the City is anticipating a net increase in recurring operating revenues of $462,251
from $41,083,642 to $41,545,893. The estimated revenue adjustments are as follows:
Estimated Adjustments to Revenue:
Amount
Building Permit Fee
$ 275,000
Other Licenses & Permits
226,350
Transient Occupancy Tax
150,000
Fines and Forfeitures
45,150
Reimbursements and Other
44,048
Traffic Safety, Offender & Enforcement
29,010
Property Transfer Tax
25,000
Intergovernmental
3,000
Fees
(1,581)
Franchise Tax
(61,901)
Special Assessments
(271,825)
Total Revenues
$ 462,251
The largest revenue decrease of $271,825 is a result of levy adjustment in development
agreement special assessments on undeveloped land. All of the remaining revenue adjustments
reflect projections to year-end upon activity year-to-date.
Expenditures:
Appropriations: The total increase for mid -year appropriations is $370,382. Departments were
requested to reduce or maintain costs within their existing appropriations, except for minor
changes within individual line items.
Estimated Appropriation Adjustments:
Building & Safety/Fire Prevention $ 10,500
Public Works/Weed Abatement 99,550
Community Center 95,000
Campground 145,000
Non -Departmental 20,332
$ 370,382
The FY2016-17 Mid -Year changes include:
0 An increase in Fleet chargebacks for equipment in Fire Prevention ($10,500)
Fiscal Year 2016-17 Mid -Year Operating Budget
January 24, 2017
Page 3 of 4
• A reclassification of the Chamber of Commerce agreement to the Economic
Development Division from the City Council budget (no impact). The City has
eliminated the GIS Analysis position and contracting out some of our GIS
services.
• An increase for temporary staffing and related materials costs in Public Works
to handle increase in park activities at Rosetta Canyon Sports Park and
Serenity Park ($99,550)
• An increase in temporary recreation staffing at Rosetta Canyon Sports Park to
manage the "outdoor" community center daily and weekend use ($95,000)
• An increase in campground costs for contract management through June 2017
($145,000) since the facility will remain open while construction gets underway
Regarding Police and Fire Services appropriations, the City is maintaining existing levels of
service, nevertheless, the modifications noted directly relate to effectively managing the operating
expenditures within budget line items including training, fees, supplies, and other line items. In
addition, the City Manager will be working closely with the departments to further reduce
expenditures before June 30, 2017.
General Fund Balance Reserves
The General Fund Balance Reserves at June 30, 2017 would reflect the following as a result of
the proposed Mid -Year adjustments, as follows:
Detail of Fund Balance
Nonspendable:
Deposits and prepaid items
$ 25,000
Loans Receivable
1,000,000
Assigned
Uncertainty reserve (17.5%)
7,458,267
Unassigned
Unallocated reserve
2,919,754
Total Fund Balance (net)
$ 11,403,020
Fiscal Impact
While the City is beginning to benefit from the improving economy, the development of an
accurate, balanced and achievable budget is critical to establishing a solid foundation to manage
the anticipated growth and demand for services within and by the community. In developing and
implementing a comprehensive operating budget plan, the factors impacting the City's operations
and financial condition are numerous, and while the City's General Fund is still in a vulnerable
condition, efforts will continue to monitor operating activities closely to ensure the General Fund's
resources are programmed appropriately.
Fiscal Year 2016-17 Mid -Year Operating Budget
January 24, 2017
Page 4 of 4
The FY2016-17 Mid -Year Budget Report is one of the first steps in beginning the FY2017-18
budget preparation process. The City Manager will be proactively working with each department
to develop and present a balanced budget to the Mayor and City Council that moves the City
forward in achieving its financial goals as part of the FY2017-18 Budget process. The overall fiscal
impact of the FY2016-17 Mid -Year Operating Budget for the General Fund is as follows:
Revenue adjustments
462,251
Appropiration adjustments 370,382
Net change/(impact) - FY2016-17 Mid -Year $ 91,869
Exhibit
A- Resolution (includes Exhibit A to the Resolution)
RESOLUTION NO. 2017-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE,
CALIFORNIA, AMENDING THE FY 2016-17 ANNUAL OPERATING BUDGET
FOR MID -YEAR ADJUSTMENTS
Whereas, the City Council has a policy of adopting an annual operating budget to plan
expenditures and to match anticipated revenues available in various City accounts in order to
make the most efficient use of the City's limited resources for each fiscal year; and
Whereas, the City of Lake Elsinore Municipal Code Section 3.04.010 defines the fiscal year for
the City of Lake Elsinore as extending from July 1st of each year to and including June 30th of
the following year.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA,
DOES HEREBY RESOLVE AS FOLLOWS:
Section 1. The City of Lake Elsinore FY2016-17 Mid -Year Annual Operating Budget is hereby
approved as amended for the 2016-17 fiscal year per attached Exhibit A.
Section 2. This Resolution shall take effect from and after the date of its passage and adoption.
Passed, Approved And Adopted on this 24th day of January, 2017.
Robert E. Magee, Mayor
ATTEST:
Susan M. Domen, MMC
City Clerk
Sales Tax
CITY OF LAKE ELSINORE, CALIFORNIA
8,572,066
$
9,939,637
SUMMARY OF REVENUES,EXPENDITURES, AND CHANGE IN FUND
BALANCE
$'.
.9,720,300
2016-17 MIDYEAR ANNUAL OPERATING BUDGET
0.00%
Property Tax
6,221,584
FY 16-17
FY 16-17
FY 14-15 FY 15-16
CURRENT
- MIDYEAR %
-
ACTUALS ACTUALS
BUDGET
BUDGET $Inc/(Dec) Inc/(Dec)
Revenues:
2,423,707
Sales Tax
$
8,572,066
$
9,939,637
$
9,720,300
$'.
.9,720,300
$ -
0.00%
Property Tax
6,221,584
6,523,663
7,068,582
7,068,582
-
0.00%
Franchise Tax
2,389,413
2,423,707
2,712,101
2,650,200
(61,901)
-2.28%
Building Permit Fee
1,496,211
1,953,331
2,000,000
2,275,000
275,000
117S06,
PropertyTransfer Tax
292,324
327,367
302,656
'327,656
25,000
8.26%
Transient Occupancy Tax
451,490
487,423
330,000
: 480,000.
150,000
45.45%
Other Licenses & Permits
823,567
1,738,911
1,054,211
' 1,280,561
226,350
21.47%
Intel gavel muental
157,077
151,526
86,500
: 89,500
3,000
3.47%
Fees
3,609,823
3,569,065
3,540,768
3,539,187
(1,581)
-0.04%
Fines and Forfeitures
566,983
,546,861
510,450
: -555,600.
45,150
8.85%
Fire Service Tax Credit
2,193,315
2,288,085
2,478,981
2,478,981
-
0.00%
Investment Earnings
156,420
231,526
105,000
105,000
-
0.00%
Reimbursements and Other
4,250,470
4,151,929
5,799,289
5,843,337
44,048
0.76%
Special Assessments
3,636,515
3,791,923
3,870,804
3,598,979.
(271,825)
-7.0206,
Traffic Safety, Offender & Labor cement
569,291
564,024
705,500
734,510
29,010
4.11%
Reimbursements for Sri eet Prato am
1,730,669
798,5(70
798,500
'798,500
-
0.00%
Total Revenues
$
37,117,218
$
39,487,480
$
41,083,642
$
41,545,893
$ 462,251
1.13%
Expenditures by Department:
General Government:
City Council
$
276,871
$
306,828
$
233,864
$_.
233,864
$ -
0.00%
Community Support
-
33,534
89,200
89,200
-
0.0006,
City Treasure,
-
-
-
-
-
0.00%
City Clerk
391,313
432,681
603,973
603,973
-
0.00%
City Attorney
431,103
587,691
500,000
500,000
-
0.00%
City Manager
461,453
592,447
758,121
758,121
-
0.00%
Administrative Services
Finance
1,035,529
1,355,936
1,736,024
1,736,024
Human Resomees
236,463
307,684
293,185
293,185
-
0.00%
Public Safety:
Police Services
10,830,422
11,462,439
12,431,410
12,431,410
Fire Services
7,190,361
6,913,288
7,597,637
7,597,637
-
0.00%
Auhual Services
788,635
804,184
839,200
.839,200
-
0.0006,
Community Development:
Planning
930,492
1,176,424
1,243,418
1,243,418
-
0.00%
Economic Development
204,SS9
373,533
440,896
440,896
-
0.00%
Building &Safety/Fire Prevention
1,057,782
1,361,712
1,711,526
1,722,026
10,500
0.61%
Code Enforcement/Graffiti
556,456
624,055
745,926
f 745,926
-
0.00%
Public Services:
Engineering
1,838,447
2,082,484
1,799,224
:1,799,224
-
0,00%
Public Warks/Weed Abatement
1,436,557
1,741,231
2,467,668
2,567,218
99,550
4.03%
Park Maintenance
1,394,701
1,590,228
2,041,631`2,041,631
-
0.00%
Lake Maintenance
1,317,837
1,498,080
1,376,069
1,376,069
-
0.00%
Community Services:
Recreation
714,603
692,706
926,806
926,806
-
0.00%
Community Center
4.57,542
610,588
834,773
929,773
95,000
11..38%
Semon Center
165,191
246,965
301,844
301,844
-
0.00%
Campground
34,017
410,502
337,630
482,630
145,000
42.95%
Internal Service:
Insurance
434,974
-
-
-
0.00%
Information Systems
584,010
-
-
-
-
0,000/
Support Ser vices
5,992
-
-
-
-
0.00%
Fleet
383,293
-
-
-
-
0.00%
Facility Maintenance
236,290
-
-
-
-
0.0006,
Non -Departmental - Operating
2,796,940
2,801,932
2.,678,260
2,698,592
20,332
0.76%
Total Expenditures
$
36,191,836
$
38,007,153
$
41,988,285
$
42,358,667
$ 370,382
0.88%
Fxcess of Revenues Over (Under)
Expenditures
925,381
1,480,327
(904,643)
(812,774)
91,869
Opel ating'Fransfers In
-
-
80,885
80,885
-
Opel atingTrausfersout
(186,489)
(1,056,361)
(260,000)
(260,000)
Fxcess of Revenues Over (Under)
Expenditures &Op Transfers In/(Out)
738,892
423,966
(1,083,758)
(991,889)
91,869
Fand Balance, Beg. ofYear
11,232,051
11,970,943
12,394,909
12,394,909
Fund Balance, End ofYear
$
11,970,943
$
12,394,909
$
11,311,151
$
11,403,020
yyy CITY OF LAKE ELSINORE, CALIFORNIA
SUMMARY OF REVENUES, EXPENDITURES, AND CHANGE IN FUND BALANCE
`v 2016-17 MIDYEAR ANNUAL OPERATING BUDGET
FY 16-17 FY 16-17
FY 14-15 FY 1546 CURRENT MIDYEAR %
ACTUALS ACTUALS BUDGET BUDGET $Inc/(Dec) Inc/(Dec)
Detail of Fund Balance
Nonspendable:
Deposits and prepaid items
Loans Receivable
Assigned
Uncertainty reserve (17.5^/x)
Unassigned
Unallocated reserve
Total Fund Balance (net)
16,468 $ 29,015 $
1,000,000 1,000,000
6,366,207 6,836,115
25,000 $
25,000
1,000,000
1,000,000
7,393,450
.7,458,267
4,588,268 4,529,780 2,892,702 2,919,754
$ 11,970,943 $ 12,394,909 $ 11,311,151 $ 11,403,020
LAKf.. �.v'I.SII'itll?,L
Agenda Date: 1/24/2017
In Control: City Council
Agenda Number: 8)
City of Lake Elsinore
Text File
File Number: ID# 17-051
Version: 1
130 South Main Street
Lake Elsinore, CA 92530
w .lake-elsinore.org
Status: Consent Agenda
File Type: Agreement
City of Lake Elsinore Page 1 Printed on 111912017
CITY OF inn
LAKE LSII`IOKE
DREAM EXTREME -
REPORT TO CITY COUNCIL
To: Honorable Mayor and Members of the City Council
From: Grant Yates, City Manager
Prepared by: Jason Simpson, Assistant City Manager
Date: January 24, 2017
Subject: Agreement for Mechanical, Electrical and Plumbing Engineering
Services for the Rehabilitation of La Laguna Recreation Vehicle (RV)
Park with T -Squared Professional Engineers Inc.
Recommendation
Authorize the City Manager to execute a Professional Services Agreement for Mechanical,
Electrical and Plumbing Engineering Services for the Rehabilitation of La Laguna Recreation
Vehicle (RV) Park with T -Squared Professional Engineers Inc. in the amount of $58,500.00,
subject to approval as to form by the City Attorney.
Background and Executive Summary
Over the past several months staff has been working with STK Architecture, Inc. to develop and
provide design and construction documents for the La Laguna RV Park. Atthis time it is necessary
to bring into the construction document development process Mechanical, Electrical and
Plumbing Engineering services. With this agreement mechanical, electrical and plumbing
engineering services will be contracted and will include the below design and construction
documentation elements:
Plumbing Fixture Specifications Sewer and Water Piping System Design
Electrical Design and Power Distribution Interior Lighting
Security and Street lighting Lighting Fixture Specification
Air Conditioning and Heating Systems Fire Alarm and Sprinkler Systems
Title 24 Compliance Documentation Communication Systems Coordination
All of these functional areas will be included in the final construction and specification
documentation utilized to construct the entire project. Close professional services coordination
and project management oversight during the design and construction documentation
development is needed to ensure clear, accurate and seamless documents for the biding and
construction of the project.
Agreement for T -Squared Professional Engineers Inc.
January 24, 2017
Page 2
Fiscal Impact
The services will be funded within the CIP Project budget for the Campground.
Exhibits
Attachment A: T -Squared Professional Engineers Inc. Agreement
Attachment B: Proposal Dated December 22, 2016
AGREEMENT FOR PROFESSIONAL SERVICES
BETWEEN THE CITY OF LAKE ELSINORE AND
T -SQUARED PROFESSIONAL ENGINEERS INC.
LA LAGUNA RV RESORT REHABILITATION PROJECT
This Agreement for Professional Services (the "Agreement") is made and entered into as
of January 23, 2017, by and between the City of Lake Elsinore, a municipal corporation ("City")
and T -Squared Professional Engineers Inc. ("Consultant").
RECITALS
A. The City has determined that it requires the following professional services: La
Laguna RV Resort Rehabilitation Project (Mechanical, Electrical and Plumbing Engineers).
B. Consultant has submitted to City a proposal, attached hereto as Exhibit A
("Consultant's Proposal") and incorporated herein, to provide professional services to City
pursuant to the terms of this Agreement.
C. Consultant possesses the skill, experience, ability, background, certification and
knowledge to perform the services described in this Agreement on the terms and conditions
described herein.
D. City desires to retain Consultant to perform the services as provided herein and
Consultant desires to provide such professional services as set forth in this Agreement.
AGREEMENT
1. ScoLe _of Services. Consultant shall perform the services described in
Consultant's Proposal (Exhibit A). Consultant shall provide such services at the time, place, and
in the manner specified in Consultant's Proposal (Exhibit A), subject to the direction of the City
through its staff that it may provide from time to time.
Time of Performance.
a. Time of Essence. Time is of the essence in the performance of this
Agreement. The time for completion of the professional services to be performed by Consultant
is an essential condition of this Agreement, Consultant shall prosecute regularly and diligently
the professional services contemplated pursuant to this Agreement according to the agreed
upon performance schedule in Consultant's Proposal (Exhibit A).
b. Performance Schedule. Consultant shall commence the services
pursuant to this Agreement upon receipt of a written notice to proceed and shall perform all
services within the time period(s) established in the Consultant's Proposal (Exhibit A). When
requested by Consultant, extensions to the time period(s) specified may be approved in writing
by the City Manager.
T -Squared T -squared flrofcsslonaI Services Agmt 2017.dccx Page 1
C. Term.
The term of this Agreement shall commence upon execution of this
Agreement and shall continue until the services and related work are completed in accordance
with the Consultant's Proposal (Exhibit A).
3. Compensalion. Compensation to be paid to Consultant shall be in accordance
with the fees set forth in Consultants' Proposal (Exhibit A), which is attached hereto and
incorporated herein by reference. In no event shall Consultant's compensation exceed fifty
eight thousand five hundred dollars and cents ($58,500.00) without additional written
authorization from the City. Notwithstanding any provision of Consultant's Proposal to the
contrary, out of pocket expenses set forth in Exhibit A shall be reimbursed at cost without an
inflator or administrative charge. Payment by City under this Agreement shall not be deemed a
waiver of defects, even if such defects were known to the City at the time of payment.
4. Method of Payment. Contractor shall promptly submit billings to the City
describing the services and related work performed during the preceding month to the extent
that such services and related work were performed. Contractor's bills shall be segregated by
project task, if applicable, such that the City receives a separate accounting for work done on
each individual task for which Contractor provides services. Contractor's bills shall include a
brief description of the services performed, the date the services were performed, the number of
hours spent and by whom, and a description of any reimbursable expenditures. City shall pay
Contractor no later than forty-five (45) days after receipt of the monthly invoice by City staff..
5, Sysi�ension or Termination.
a, The City may at any time, for any reason, with or without cause, suspend
or terminate this Agreement, or any portion hereof, by serving upon the Consultant at least ten
(10) days prior written notice. Upon receipt of such notice, the Consultant shall immediately
cease all work under this Agreement, unless the notice provides otherwise. If the City suspends
or terminates a portion of this Agreement such suspension or termination shall not make void or
invalidate the remainder of this Agreement.
b. In the event this Agreement is terminated pursuant to this Section, the
City shall pay to Consultant the actual value of the work performed up to the time of termination,
provided that the work performed is of value to the City. Upon termination of the Agreement
pursuant to this Section, the Consultant will submit an invoice to the City, pursuant to Section
entitled "Method of Payment" herein,
6. Ownership of Documents. All plans, studies, documents and other writings
prepared by and for Consultant, its officers, employees and agents and subcontractors in the
course of implementing this Agreement, except working notepad internal documents, shall
become the property of the City upon payment to Consultant for such work, and the City shall
have the sole right to use such materials in its discretion without further compensation to
Consultant or to any other party. Consultant shall, at Consultant's expense, provide such
reports, plans, studies, documents and other writings to City upon written request. City
acknowledges that any use of such materials in a manner beyond the intended purpose as set
forth herein shall be at the sole risk of the City. City further agrees to defend, indemnify and
hold harmless Consultant, its officers, officials, agents, employees and volunteers from any
claims, demands, actions, losses, damages, injuries, and liability, direct or indirect (including
Page 2
any and all costs and expenses in connection therein), arising out of the City's use of such
materials in a manner beyond the intended purpose as set forth herein.
a. Licensing of _ Intelleetual Prot�e��. This Agreement creates a
nonexclusive and perpetual license for City to copy, use, modify, reuse, or sublicense any and
all copyrights, designs, and other intellectual property embodied in plans, specifications, studies,
drawings, estimates, and other documents or works of authorship fixed in any tangible medium
of expression, including but not limited to, physical drawings or data magnetically or otherwise
recorded on computer diskettes, which are prepared or caused to be prepared by Consultant
under this Agreement ("Documents & Data"), Consultant shall require that all subcontractors
agree in writing that City is granted a nonexclusive and perpetual license for any Documents &
Data the subcontractor prepares under this Agreement. Consultant represents and warrants
that Consultant has the legal right to license any and all Documents & Data. Consultant makes
no such representation and warranty in regard to Documents & Data which were prepared by
design professionals other than Consultant or provided to Consultant by the City. City shall not
be limited in any way in its use of the Documents & Data at any time, provided that any such
use not within the purposes intended by this Agreement shall be at City's sole risk.
b. Confidentiality. All ideas, memoranda, specifications, plans, procedures,
drawings, descriptions, computer program data, input record data, written information, and other
Documents & Data either created by or provided to Consultant in connection with the
performance of this Agreement shall be held confidential by Consultant. Such materials shall
not, without the prior written consent of City, be used by Consultant for any purposes other than
the performance of the services under this Agreement. Nor shall such materials be disclosed to
any person or entity not connected with the performance of the services under this Agreement.
Nothing furnished to Consultant which is otherwise known to Consultant or is generally known,
or has become known, to the related industry shall be deemed confidential. Consultant shall not
use City's name or insignia, photographs relating to project for which Consultant's services are
rendered, or any publicity pertaining to the Consultant's services under this Agreement in any
magazine, trade paper, newspaper, television or radio production or other similar medium
without the prior written consent of City.
Consultant's Books and Records.
a. Consultant shall maintain any and all ledgers, books of account, invoices,
vouchers, canceled checks, and other records or documents evidencing or relating to charges
for services, or expenditures and disbursements charged to City for a minimum period of three
(3) years, or for any longer period required by law, from the date of final payment to Consultant
to this Agreement.
b. Consultant shall maintain all documents and records which demonstrate
performance under this Agreement for a minimum period of three (3) years, or for any longer
period required by law, from the date of termination or completion of this Agreement.
C. Any records or documents required to be maintained pursuant to this
Agreement shall be made available for inspection or audit, at any time during regular business
hours, upon written request by the City Manager, City Attorney, City Auditor or a designated
representative of these officers. Copies of such documents shall be provided to the City for
inspection at City Hall when it is practical to do so, Otherwise, unless an alternative is mutually
agreed upon, the records shall be available at Consultant's address indicated for receipt of
notices in this Agreement.
Page 3
d. Where City has reason to believe that such records or documents may be
lost or discarded due to dissolution, disbandment or termination of Consultant's business, City
may, by written request by any of the above-named officers, require that custody of the records
be given to the City and that the records and documents be maintained in City Hall. Access to
such records and documents shall be granted to any party authorized by Consultant,
Consultant's representatives, or Consultant's successor -in -interest.
8. Independent Contractor. It is understood that Consultant, in the performance of
the work and services agreed to be performed, shall act as and be an independent contractor
and shall not act as an agent or employee of the City.
9. P RB Eliaib litylndbninifigation. In the event that Consultant or any employee,
agent, or subcontractor of Consultant providing services under this Agreement claims or is
determined by a court of competent jurisdiction or the California Public Employees Retirement
System (PERS) to be eligible for enrollment in PERS as an employee of the City, Consultant
shall indemnify, defend, and hold harmless City for the payment of any employee and/or
employer contributions for PERS benefits on behalf of Consultant or its employees, agents, or
subcontractors, as well as for the payment of any penalties and interest on such contributions,
which would otherwise be the responsibility of City.
Notwithstanding any other federal, state and local laws, codes, ordinances and
regulations to the contrary, Consultant and any of its employees, agents, and subcontractors
providing service under this Agreement shall not qualify for or become entitled to, and hereby
agree to waive any claims to, any compensation, benefit, or any incident of employment by City,
including but not limited to eligibility to enroll in PERS as an employee of City and entitlement to
any contribution to be paid by City for employer contribution and/or employee contributions for
PERS benefits.
10. Interests of Consultant. Consultant (including principals, associates and
professional employees) covenants and represents that it does not now have any investment or
interest in real property and shall not acquire any interest, direct or indirect, in the area covered
by this Agreement or any other source of income, interest in real property or investment which
would be affected in any manner or degree by the performance of Consultant's services
hereunder. Consultant further covenants and represents that in the performance of its duties
hereunder no person having any such interest shall perform any services under this Agreement.
Consultant is not a designated employee within the meaning of the Political Reform Act
because Consultant:
a. will conduct research and arrive at conclusions with respect to his/her
rendition of information, advice, recommendation or counsel independent of the control and
direction of the City or of any City official, other than normal agreement monitoring; and
b, possesses no authority with respect to any City decision beyond rendition
of information, advice, recommendation or counsel. (FPPC Reg. 18700(a)(2).)
11. Professional Ability. of Consultant. City has relied upon the professional training
and ability of Consultant to perform the services hereunder as a material inducement to enter
into this Agreement. Consultant shall therefore provide properly skilled professional and
technical personnel to perform all services under this Agreement. All work performed by
Consultant under this Agreement shall be in accordance with applicable legal requirements and
Page 4
shall meet the standard of quality ordinarily to be expected of competent professionals in
Consultant's field of expertise.
12Laws. Consultant shall use the standard of care in its
profession to comply with all applicable federal, state and local laws, codes, ordinances and
regulations.
13. Licenses. Consultant represents and warrants to City that it has the licenses,
permits, qualifications, insurance and approvals of whatsoever nature which are legally required
of Consultant to practice its profession. Consultant represents and warrants to City that
Consultant shall, at its sole cost and expense, keep in effect or obtain at all times during the
term of this Agreement, any licenses, permits, insurance and approvals which are legally
required of Consultant to practice its profession. Consultant shall maintain a City of Lake
Elsinore business license.
14. Indemnit . Consultant shall indemnify, defend, and hold harmless the City and
its officials, officers, employees, agents, and volunteers from and against any and all losses,
liability, claims, suits, actions, damages, and causes of action arising out of any personal injury,
bodily injury, loss of life, or damage to property, or any violation of any federal, state, or
municipal law or ordinance, to the extent caused, in whole or in part, by the willful misconduct or
negligent acts or omissions of Consultant or its employees, subcontractors, or agents, by acts
for which they could be held strictly liable, or by the quality or character of their work. The
foregoing obligation of Consultant shall not apply when (1) the injury, loss of life, damage to
property, or violation of law arises from the sole negligence or willful misconduct of the City or its
officers, employees, agents, or volunteers and (2) the actions of Consultant or its employees,
subcontractor, or agents have contributed in no part to the injury, loss of life, damage to
property, or violation of law. It is understood that the duty of Consultant to indemnify and hold
harmless includes the duty to defend as set forth in Section 2778 of the California Civil Code.
Acceptance by City of insurance certificates and endorsements required under this Agreement
does not relieve Consultant from liability under this indemnification and hold harmless clause.
This indemnification and hold harmless clause shall apply to any damages or claims for
damages whether or not such insurance policies shall have been determined to apply. By
execution of this Agreement, Consultant acknowledges and agrees to the provisions of this
Section and that it is a material element of consideration.
15. Insurance Requirements.
a, Insurance. Consultant, at Consultant's own cost and expense, shall
procure and maintain, for the duration of the contract, unless modified by the City's Risk
Manager, the following insurance policies.
i. Workes'_Comensation Coverane. Consultant shall maintain
Workers' Compensation Insurance and Employer's Liability Insurance for his/her
employees in accordance with the laws of the State of California. In addition, Consultant
shall require each subcontractor to similarly maintain Workers' Compensation Insurance
and Employer's Liability Insurance in accordance with the laws of the State of California
for all of the subcontractor's employees. Any notice of cancellation or non -renewal of all
Workers' Compensation policies must be received by the City at least thirty (30) days
prior to such change. The insurer shall agree to waive all rights of subrogation against
City, its officers, agents, employees and volunteers for losses arising from work
performed by Consultant for City. In the event that Consultant is exempt from Worker's
Page 5
Compensation Insurance and Employer's Liability Insurance for his/her employees in
accordance with the laws of the State of California, Consultant shall submit to the City a
Certificate of Exemption from Workers Compensation Insurance in a form approved by
the City Attorney.
General Liability Coverage. Consultant shall maintain commercial
general liability insurance in an amount not less than one million dollars ($1,000,000) per
occurrence for bodily injury, personal injury and property damage. If a commercial
general liability insurance form or other form with a general aggregate limit is used,
either the general aggregate limit shall apply separately to the work to be performed
under this Agreement or the general aggregate limit shall be at least twice the required
occurrence limit. Required commercial general liability coverage shall be at least as
broad as Insurance Services Office Commercial General Liability occurrence form CG
0001 (ed. 11/88) or Insurance Services Office form number GL 0002 (ed. 1/73) covering
comprehensive General Liability and Insurance Services Office form number GL 0404
covering Broad Form Comprehensive General Liability. No endorsement may be
attached limiting the coverage.
iii. Automobile Liability Coverage, Consultant shall maintain
automobile liability insurance covering bodily injury and property damage for all activities
of the Consultant arising out of or in connection with the work to be performed under this
Agreement, including coverage for owned, hired and non -owned vehicles, in an amount
of not less than one million dollars ($1,000,000) combined single limit for each
occurrence. Automobile liability coverage must be at least as broad as Insurance
Services Office Automobile Liability form CA 0001 (ed. 12/90) Code 1 ("any auto"). No
endorsement may be attached limiting the coverage.
iv. Professional Liability Coverage. Consultant shall maintain
professional errors and omissions liability insurance appropriate for Consultant's
profession for protection against claims alleging negligent acts, errors or omissions
which may arise from Consultant's services under this Agreement, whether such
services are provided by the Consultant or by its employees, subcontractors, or sub
consultants. The amount of this insurance shall not be less than one million dollars
($1,000,000) on a claims -made annual aggregate basis, or a combined single limit per
occurrence basis.
b. Endorsements. Each general liability and automobile liability insurance
policy shall be with insurers possessing a Best's rating of no less than A:VII and shall be
endorsed with the following specific language:
i. The City, its elected or appointed officers, officials, employees,
agents and volunteers are to be covered as additional insured with respect to liability
arising out of work performed by or on behalf of the Consultant, including materials,
parts or equipment furnished in connection with such work or operations.
ii. This policy shall be considered primary insurance as respects the
City, its elected or appointed officers, officials, employees, agents and volunteers.
Any insurance maintained by the City, including any self-insured retention the City may
have, shall be considered excess insurance only and shall not contribute with it.
Page 6
iii. This insurance shall act for each insured and additional insured as
though a separate policy had been written for each, except with respect to the limits of
liability of the insuring company.
iv. The insurer waives all rights of subrogation against the City, its
elected or appointed officers, officials, employees or agents.
V. Any failure to comply with reporting provisions of the policies shall
not affect coverage provided to the City, its elected or appointed officers, officials,
employees, agents or volunteers.
vi. The insurance provided by this Policy shall not be suspended,
voided, canceled, or reduced in coverage or in limits except after thirty (30) days written
notice has been received by the City.
C. Deductibles and Self -Insured Detentions, Any deductibles or self-insured
retentions must be declared to and approved by the City. At the City's option, Consultant shall
demonstrate financial capability for payment of such deductibles or self-insured retentions.
d. Certificates of Insurance. Consultant shall provide certificates of
insurance with original endorsements to City as evidence of the insurance coverage required
herein. Certificates of such insurance shall be filed with the City on or before commencement of
performance of this Agreement. Current certification of insurance shall be kept on file with the
City at all times during the term of this Agreement.
16, Notices Any notice required to be given under this Agreement shall be in writing
and either served personally o- sent prepaid, first class mail. Any such notice shall be
addressed to the other party at the address set forth below. Notice shall be deemed
communicated within 48 hours from the time of mailing if mailed as provided in this section.
If to City: City of Lake Elsinore
Attn: City Manager
130 South Main Street
Lake Elsinore, CA 92530
With a copy to: City of Lake Elsinore
Attn: City Clerk
130 South Main Street
Lake Elsinore, CA 92530
If to Consultant: T -Squared Professional Engineers Inc.
1340 Specialty Drive Ste. E
Vista, CA 92081
Ph # 760.560.0100
17, Entire Agreement. This Agreement constitutes the complete and exclusive
statement of Agreement between the City and Consultant. All prior written and oral
Page 7
communications, including correspondence, drafts, memoranda, and representations, are
superseded in total by this Agreement.
18. An-iendit>yents. This Agreement may be modified or amended only by a written
document executed by both Consultant and City and approved as to form by the City Attorney.
19. Assignment and Subcontracting. The parties recognize that a substantial
inducement to City for entering into this Agreement is the professional reputation, experience
and competence of Consultant and the subcontractors listed in Exhibit B. Consultant shall be
fully responsible to City for all acts or omissions of any subcontractors. Assignments of any or
all rights, duties or obligations of the Consultant under this Agreement will be permitted only with
the express consent of the City. Consultant shall not subcontract any portion of the work to be
performed under this Agreement except as provided in Exhibit B without the written
authorization of the City. If City consents to such subcontract, Consultant shall be fully
responsible to City for all acts or omissions of those subcontractors. Nothing in this Agreement
shall create any contractual relationship between City and any subcontractor nor shall it create
any obligation on the part of the City to pay or to see to the payment of any monies due to any
such subcontractor other than as otherwise is required by law.
20. Waiver. Waiver of a breach or default under this Agreement shall not constitute
a continuing waiver of a subsequent breach of the same or any other provision under this
Agreement.
21. Severability. If any term or portion of this Agreement is held to be invalid, illegal,
or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions of this
Agreement shall continue in full force and effect.
22. ControllingLav Venire. This Agreement and all matters relating to it shall be
governed by the laws of the State of California and any action brought relating to this
Agreement shall be held exclusively in a state court in the County of Riverside.
23. Litigattan, ExrLenses and Atton7eys' (^ees. If either party to this Agreement
commences any legal action against the other party arising out of this Agreement, the prevailing
party shall be entitled to recover its reasonable litigation expenses, including court costs, expert
witness fees, discovery expenses, and attorneys' fees.
24, Mediation. The parties agree to make a good faith attempt to resolve any
disputes arising out of this Agreement through mediation prior to commencing litigation. The
parties shall mutually agree upon the mediator and share the costs of mediation equally. If the
parties are unable to agree upon a mediator, the dispute shall be submitted to JAMS or its
successor in interest. JAMS shall provide the parties with the names of five qualified mediators.
Each party shall have the option to strike two of the five mediators selected by JAMS and
thereafter the mediator remaining shall hear the dispute. If the dispute remains unresolved after
mediation, either party may commence litigation.
25. Execution. This Agreement may be executed in several counterparts, each of
which shall constitute one and the same instrument and shall become binding upon the parties
when at least one copy hereof shall have been signed by both parties hereto. In approving this
Agreement, it shall not be necessary to produce or account for more than one such counterpart.
Page 8
26. Authoritv to Enter Agreement. Consultant has all requisite power and authority to
conduct its business and to execute, deliver, and perform the Agreement. Each party warrants
that the individuals who have signed this Agreement have the legal power, right, and authority to
make this Agreement and to bind each respective party. The City Manager is authorized to
enter into an amendment or otherwise take action on behalf of the City to make the following
modifications to the Agreement: (a) a name change; (b) grant extensions of time; (c) non -
monetary changes in the scope of services; and/or (d) suspend or terminate the Agreement.
27, Prohibited Interests. Consultant maintains and warrants that it has not employed
nor retained any company or person, other than a bona fide employee working solely for
Consultant, to solicit or secure this Agreement. Further, Consultant warrants that it has not paid
nor has it agreed to pay any company or person, other than a bona fide employee working
solely for Consultant, any fee, commission, percentage, brokerage fee, gift or other
consideration contingent upon or resulting from the award or making of this Agreement. For
breach or violation of this warranty, City shall have the right to rescind this Agreement without
liability. For the term of this Agreement, no member, officer or employee of City, during the term
of his or her service with City, shall have any direct interest in this Agreement, or obtain any
present or anticipated material benefit arising therefrom.
28. Kqua1 Opportunity fj-nployment. Consultant represents that it is an equal
opportunity employer and it shall not discriminate against any subcontractor, employee or
applicant for employment because of race, religion, color, national origin, handicap, ancestry,
sex or age. Such non-discrimination shall include, but not be limited to, all activities related to
initial employment, upgrading, demotion, transfer, recruitment or recruitment advertising, layoff
or termination.
29. Pievailin WaUes. Consultant is aware of the requirements crf California Labor
Code Section 1720, et seq., and 1770, et seq., as well as California Code of Regulations, Title
8, Section 16000, et seq., ('Prevailing Wage Laws"), which require the payment of prevailing
wage rates and the performance of other requirements on "public works" and "maintenance"
projects. Consultant agrees to fully comply with all applicable federal and state labor laws
(including, without limitation, if applicable, the Prevailing Wage Laws). It is agreed by the parties
that, in connection with the Work or Services provided pursuant to this Agreement, Consultant
shall bear all risks of payment or non-payment of prevailing wages under California law, and
Consultant hereby agrees to defend, indemnify, and hold the City, and its officials, officers,
employees, agents, and volunteers, free and harmless from any claim or liability arising out of
any failure or alleged failure to comply with the Prevailing Wage Laws. The foregoing indemnity
shall survive termination of this Agreement.
30. Execution. This Agreement may be executed in several counterparts, each of
which shall constitute one and the same instrument and shall become binding upon the parties
when at least one copy hereof shall have been signed by both parties hereto. In approving this
Agreement, it shall not be necessary to produce or account for more than one such counterpart.
Page 9
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed on
the date first written above.
"CITY"
CITY OF LAKE ELSINORE, a municipal
corporation
Grant Yates, City Manager
ATTEST:
City Clerk
APPROVED AS TO FORM
City Attorney
"CONSULTANT"
T -Squared Professional Engineers Inc.
Farzad Tadayon, President
Attachments: Exhibit A — Consultant's Initial Proposal Dated December 22, 2016
Page 10
EXHIBIT A
CONSULTANT'S PROPOSAL
[ATTACHED]
January 17, 2017
1340 S)< acil'y I)rivi Ste E - Vi0c, C/A 920&1 - (T) 760.560 O c0 ^ (�) 760.5160.0101 ^ www.lsgeng.com
CONSULTING MECHANICAL & ELECTRICAL ENGINEERS
Mr. Jason Simpson
Assistant City Manager
City of Lake Elsinore, California
RE: MECHANICAL/ELECTRICAL/PLUMBING ENGINEERING
LA LAGUNA RV RESORT AND RECREATIONAL PARK
LAKE ELSINORE, CALIFORNIA
Mr. Simpson:
Thank you for considering T -SQUARED PROFESSIONAL ENGINEERS, INC. as consultants for the
above project. Based on the information received from Mr. G.V. Salts at STK, the following is a list of
our proposed services along with the respective fees:
HVA CIELECTRICAL/PLUMBING $58,500.00
The above fees include the following:
1) Plumbing to include plumbing fixture specifications, sewer, and water piping system design and
specifications. All system are limited to inside enclosed buildings and 5 feet outside of each
building.
2) Electrical Design to include lighting, and power distribution systems.
3) HVAC design to include HVAC systems within enclosed buildings.
4) Specifications in the same format as the Architect's specifications.
5) All plan check comments and review comments by the Architect, the Owner, and the Plan Check
Authority.
6) Maximum of 2 meetings with the Architect and/or the Owner's representative during design.
7) Construction Administration services to include response to all vendors' questions during bid,
response to RFI letters, review of shop submittals, and two site visits during construction.
The above fees do not include the following:
1) Plan Changes due to architectural changes after the completion of the Design Development Stage.
2) LEED certification calculation and support services.
3) Fire Sprinkler system design and specifications.
4) Fire Alarm system design and specifications.
5) Telephone and Communication systems design and specifications.
6) Security system design and specifications.
7) Utility Company Coordination.
8) Any commissioning services.
134-0 Sped, Drive, ,'e. F - Vi�fc CA 92081 - (T) 760.560,010C ^ (t j 7G:1 5(0.0 X01 n w�ww'Sa(;ng.corn
CONSULTING MECHANICAL & ELECTRICAL ENGINEERS
lighting control certification or certification services (CALCTP).
10) Printing, plotting, reproductions.
11) Shipping and messenger service.
This proposal is an exhibit to the main service agreement between T -Squared Professional Engineers,
Inc. and the City of Lake Elsinore and is subject to the provisions of that contract.
Payment is due based on the payment received from the owner. Final invoice will be due upon
completion of our punch list visit. if you agree with the above, please sign in the space provided. We will
commence our work upon your written authorization.
Thank you for your consideration.
Sincerely, Approved
Z�y
Farzad Tadayon, P.E., C.I.P.E., N.C.E.E.S. ----------------------
LEEDR Accredited _Professional Date:
President
�,�• a ._., �._.,
Agenda Date: 1/24/2017
In Control: City Council
Agenda Number: 9)
City of Lake Elsinore
Text File
File Number: ID# 17-052
Version: 1
130 South Main Street
Lake Elsinore, CA 92530
w .lake-elsinore.org
Status: Consent Agenda
File Type: Report
City of Lake Elsinore Page 1 Printed on 111912017
C1 'y OF i/`�\
LADE �LSINOZE
"Z—
DxcaM EXI RLML.
REPORT TO CITY COUNCIL
To: Honorable Mayor and Members of the City Council
From: Grant Yates, City Manager
Prepared by: Jason Simpson, Assistant City Manager
Date: January 24, 2017
Subject:
Recommendation
1. Accept the improvements into the City Maintained System for the project, and,
2. Authorize staff to file the Notice of Completion with the County Recorder for the project; and,
3. Authorize final costs and staff to release all retention monies 35 days after the filing of the
Notice of Completion for Schindler Elevator Corp $65,600
Background
The City Council awarded a contract to Schindler Elevator Corp for the work specified in the
above table. All of this work has been completed per the plans this project. Final billing and
invoicing has been received by the City and contractor paid in full less the retention amount.
Discussion
This contractor has completed the corresponding scope of work for the subject project and the
State of California has completed the elevator inspection and issued the certification.
Fiscal Impact
Funding for these projects were allocated under the City's CIP adopted budget for the Fiscal
Year 2016/2017.
Exhibits
A - Notice of Completion - Rosetta Canyon Sports Park Phase 11 (Schindler Elevator Corp)
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
Name City of Lake Elsinore
Street 130 S. Main Street
Address
citya state Lake Elsinore CA 92530
Notice is hereby given that:
M
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EXAM
NOTICE OF COMPLETION
1. The undersigned is owner or corporate officer of the owner of the interest or estate stated below in the property hereinafter described:
2. The full name of the owner is City of Lake Elsinore
3. The full address of the owner is130 S. Main Street Lake Elsinore CA 92530
4. The nature of the interest or estate of the owner is in fee.
Roseffa Canyon Snorts Park Phase II
(II the, pph fee, sluke'in Foe` and Insert, far example ,'purchaser under con Ir act of purcher se, or ossao)
5. The full names and full addresses of all persons, if any, who hold title with the undersigned asjoint tenants or as tenants in common are:
NAMES ADDRESSES
6. A work of improvement on the property hereinafter described was completed on December 31. 2016 . The work done was:
Rosetta Canyon Sports Park Phase 11 Elevator
7. The name of the contractor, if any, for such work of improvement was Scbiarfler Plevafnr Corp
3585 Cadillac Avenue Ste B Costa Mesa CA 92626
(it he conuanm far wok of olil—moll as a who le, 1usarl'nono"( (Oats of Conlrad)
8. The property on which said work of improvement was completed is in the City of Lake Elsinore
County of Riverside , State of California, and is described as follows: Rosetta Canyon Sports Park Phase II Elevator
9. The street address of said property is 39423 Ardenwood Way, Lake Elsinore CA 92532
pt no slosh address has hash o6dally assigned, insen'nona'(
Dated:
Susan Damen
(City Clerk City of Lake Elsinore)
VERIFICATION
1, the undersigned, say: I am the the declarant of the foregoing
(`PmnJonh ol; "Mana9orair. 'q palmar ol,^Owner ol'alc)
notice of completion; I have read said notice of completion and know the contents thereof; the same is true of my own knowledge. I
declare under penalty of perjury that the foregoing is true and correct.
Executed on January 24 20 17 at City of Lake . Ici note California.
(Data al allusion) (Qty whom o,rn l
(Personal Bishopric of the Individual who in swea Ing first he contents of to nouco of
chapter on are I ee)
F AKt:: elt.si i11 C
'��
Agenda Date: 1/24/2017
In Control: City Council
Agenda Number: 10)
City of Lake Elsinore
Text File
File Number: ID# 17-053
Version: 1
130 South Main Street
Lake Elsinore, CA 92530
w lake-elsinore.org
Status: Consent Agenda
File Type: Report
City of Lake Elsinore Page 1 Printed on 111912017
CITY OF �f..
LASE ) LSII` OKE
DREAM EXTREML
Report to City Council
To: Honorable Mayor and Members of the City Council
From: Barbara Leibold, City Attorney
Date: January 24, 2017
Subject: Purchase and Sale Agreement for the Purchase of Real Property for
Affordable Housing Purposes
Recommendation
Adopt A RESOLUTION OF THE CITY OF LAKE ELSINORE, ACTING AS SUCCESSOR TO
THE HOUSING ASSETS AND FUNCTIONS OF THE FORMER REDEVELOPMENT
AGENCY OF THE CITY OF LAKE ELSINORE UNDER HEALTH & SAFETY CODE
SECTION 34176(a)(1), APPROVING A PURCHASE AND SALE AGREEMENT FOR THE
PURCHASE OF REAL PROPERTY FOR AFFORDABLE HOUSING PURPOSES FROM
THE SUCCESSOR AGENCY TO THE FORMER REDEVELOPMENT AGENCY OF THE
CITY OF LAKE ELSINORE
Background
The Successor Agency to the Redevelopment Agency of the City of Lake Elsinore
("Successor Agency") is a public body corporate and politic, organized and operating
under Parts 1.8 and 1.85 of Division 24 of the California Health and Safety Code
("HSC"), and the successor to the former Redevelopment Agency of the City of Lake
Elsinore ("former Agency") that was previously a community redevelopment agency
organized and existing pursuant to the Community Redevelopment Law, Health and
Safety Code Section 33000, et seq..
As of February 1, 2012 the former Agency was dissolved pursuant to Assembly Bill A 26
("AB A 26"), as amended further by Assembly Bill 1484 ("AB 1484") (together with AB A
26, as amended to date, the "Dissolution Law") and, as a separate public entity,
corporate and politic, the Successor Agency administers the enforceable obligations of
the former Agency and otherwise unwinds the former Agency's affairs, all subject to the
review and approval of a seven -member oversight board ("Oversight Board").
As of February 1, 2012, the City of Lake Elsinore ("City") elected to act as the successor
to the housing assets and functions of the former Agency in accordance with Health &
Safety Code Section 34176.1(a)(3)(A) ("Housing Successor"). The City is required to
comply with applicable law in its role as Housing Successor.
Purchase of Properties for Affordable Housing Purposes
January 24, 2017
Page 2
Discussion
As part of the dissolution of the former Redevelopment Agency, Health & Safety Code
Section 34177(e) requires the Oversight Board to direct the Successor Agency to dispose of
the real property held by the Successor Agency. By Resolution No. 2016-007, approved on
June 28, 2016, the Successor Agency approved the sale of Properties (as hereinafter
defined) to the City for affordable housing purposes and a form of Purchase and Sale
Agreement for the sale. By Resolution No. 2016-004, approved on July 7, 2016, the
Oversight Board approved the sale of the Properties to the City for affordable housing
purposes and the form of Purchase and Sale Agreement. On August 16, 2016, the California
Department of Finance also approved the proposed sale and form of Purchase and Sale
Agreement. Those properties proposed to be sold to the City for affordable housing
purposes are as follows (collectively, the "Properties"):
Four Parcels located at Pottery and Spring - Assessor's Parcel Numbers 374-062-
005; 374-062-006; 374-062-015; and [374-062-020].
Twelve Parcels located on Spring between Heald and Sumner - Assessor's Parcel
Numbers 374-162-039; 374-162-041; 374-162-043; 374-162-045; 374-162-047; 374-
162-049; 374-162-051; 374-162-053; 374-162-055; 374-162-057; 374-162-059; and
374-162-061.
Staff has identified the Properties as appropriate sites for the future development of
affordable housing. Additionally, the Housing Successor's Low and Moderate Income
Housing Fund (LMIHAF), established by law in connection with the dissolution of the former
Agency, contains monies which can only be utilized to develop affordable housing. The
LMIHAF currently has sufficient funds to purchase the Properties. Accordingly, staff
recommends that the City, in its capacity as Housing Successor, purchase the Properties for
fair market value with monies from the LMIHAF. The Properties shall be utilized by the
Housing Successor in accordance with the Community Redevelopment Law (Part
1(commencing with Section 33000)), as amended by Health & Safety Code Section 34176. 1,
and, in particular, for the development of affordable housing in accordance with Health &
Safety Code Section 34176.1(a)(3)(A).
Attached is the proposed form of Purchase and Sale Agreement previously approved by the
Successor Agency, Oversight Board and Department of Finance. The Purchase and Sale
Agreement requires the purchase and sale of the Properties at a total purchase price of
$720,000, which is equal to fair market value of the Properties, as determined by a third
party, licensed appraiser. Based upon such appraisals, the four parcels at Pottery and
Spring appraised at $370,000 and the twelve parcels located on Spring between Heald and
Sumner appraised at $350,000.
In addition to approving the form of Purchase and Sale Agreement for the purchase of the
Properties, the attached Resolution authorizes the City Manager to accept a grant deed for
the Properties and to take any action and execute any documents as may be necessary to
implement the purchase of the Properties by the City.
Purchase of Properties for Affordable Housing Purposes
January 24, 2017
Page 3
Fiscal Impact
The City will utilize approximately $720,000 from the LMIHAF to purchase the Properties for
affordable housing purposes. Funds in the LMIHAF can only be used for affordable housing
purposes in accordance with applicable law.
Exhibits
Exhibit A - Resolution No
Exhibit B — Purchase and Sale Agreement
Exhibit C - Property Maps
RESOLUTION NO. 2017-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE
ELSINORE, CALIFORNIA, ACTING AS SUCCESSOR TO THE HOUSING
ASSETS AND FUNCTIONS OF THE FORMER REDEVELOPMENT AGENCY
OF THE CITY OF LAKE ELSINORE UNDER HEALTH & SAFETY CODE
SECTION 34176(a)(1), APPROVING A PURCHASE AND SALE
AGREEMENT FOR THE PURCHASE OF REAL PROPERTY FOR
AFFORDABLE HOUSING PURPOSES FROM THE SUCCESSOR AGENCY
TO THE FORMER REDEVELOPMENT AGENCY OF THE CITY OF LAKE
ELSINORE
WHEREAS, the City of Lake Elsinore ("City") is a municipal corporation organized and
operating under the laws of the State of California; and
WHEREAS, the Successor Agency to the Redevelopment Agency of the City of Lake
Elsinore ("Successor Agency") is a public body corporate and politic, organized and
operating under Parts 1.8 and 1.85 of Division 24 of the California Health and Safety Code
("HSC"), and the successor to the former Redevelopment Agency of the City of Lake
Elsinore ("former Agency') that was previously a community redevelopment agency
organized and existing pursuant to the Community Redevelopment Law, Health and
Safety Code Section 33000, et seq. ("CRL"); and
WHEREAS, Assembly Bill A 26 ("AB A 26") added Parts 1.8 and 1.85 to Division 24 of the
California Health & Safety Code and which laws were modified, in part, and determined
constitutional by the California Supreme Court in the petition California Redevelopment
Association. el al. v. Ana Matosantos, et al., Case No. S194861 ("Matosantos Decision'),
which laws and court opinion caused the dissolution of all redevelopment agencies and
winding down of the affairs of former redevelopment agencies: thereafter, such laws were
amended further by Assembly Bill 1484 ("AB 1484") (together AB A 26, the Matosantos
Decision, and AB 1484, as amended to date, referred to as the "Dissolution Law"); and
WHEREAS, as of February 1, 2012, the former Agency was dissolved pursuant to the
Dissolution Law and as a separate public entity, the Successor Agency administers the
enforceable obligations of the former Agency and otherwise unwinds the former Agency's
affairs, all subject to the review and approval of a seven -member oversight board
("Oversight Board"); and
WHEREAS, as of February 1, 2012, the City elected to act as the successor to the housing
assets and functions of the former Agency in accordance with HSC Section 34176.1(a)(3)(A)
("Housing Successor"); and
WHEREAS, the Successor Agency completed the Due Diligence Reviews ("DDRs") required
under HSC Section 34179.5 and submitted them for approval to the Oversight Board and the
California Department of Finance ("DOF"); and
WHEREAS, the Oversight Board and the DOF reviewed and approved the DDRs; and
WHEREAS, as a result of the approval of the DDRs and resulting payments of funds to the
county auditor -controller, DOF issued the Successor Agency a "Finding of Completion" as
described in HSC Section 34179.7; and
RESOLUTION NO. 2017 -
Page 2
WHEREAS, as a result of its receipt of Finding of Completion, the Successor Agency was
required to (i) prepare a "Long Range Property Management Plan" ("LRPMP") meeting the
requirements of HSC Section 34191.5(c), and (ii) submit the LRPMP to the Oversight Board and
the DOF for approval within six months of the date of the Finding of Completion; and
WHEREAS, the Successor Agency prepared its LRPMP in accordance with HSC Section
34191.5(c) and submitted it to the Oversight Board for approval; and
WHEREAS, the Oversight Board approved the LRPMP and directed that it be submitted to the
DOF for approval in accordance with HSC Section 34191.5(c); and
WHEREAS, notwithstanding the timely approval and submission of the LRPMP by the
Oversight Board, DOF did not approve the LRPMP by December 31, 2015; and
WHEREAS, as a result, the statutory requirements for disposition of real property set forth in
HSC Sections 34181(a) and 34177(e) currently apply to the disposition of property by the
Successor Agency; and
WHEREAS, the Successor Agency has proposed to sell to the City, in its capacity as Housing
Successor, certain properties owned by the Successor Agency identified as Assessor's Parcel
Numbers 374-062-005; 374-062-006; 374-062-015; [374-062-020]; 374-162-039; 374-162-041;
374-162-043; 374-162-045; 374-162-047; 374-162-049; 374-162-051; 374-162-053; 374-162-
055; 374-162-057; 374-162-059; 374-162-061 (collectively, the "Properties") for affordable
housing purposes; and
WHEREAS, the Successor Agency and its Oversight Board, after being provided .with
appraisals for the Disposition Properties and a form of Purchase and Sale Agreement between
the City and the Successor Agency, approved the sale of the Properties to the City for
consideration equal to fair market value, and the California Department of Finance subsequently
approved the Oversight Board resolution approving the sale and the form of Purchase and Sale
Agreement; and
WHEREAS, the Properties have an aggregate fair market value of not less than $720,000, as
determined by an appraisal prepared by a third party, licensed appraiser, which constitutes the
purchase price set forth in the form of Purchase and Sale Agreement; and
WHEREAS, in accordance with the Dissolution Law, the Housing Successor has established a
Low and Moderate Income Housing Asset Fund ("LMIHAF"), the proceeds of which can only be
used for affordable housing purposes; and
WHEREAS, there are sufficient funds in the LMIHAF to purchase the Properties in accordance
with the Purchase and Sale Agreement; and
WHEREAS, the City has been allocated 1,196 very low income units, 801 low income units and
897 moderate income units as part of its regional housing allocation for the current Housing
Element period (2014 — 2021); and
WHEREAS, the existing developments for low income households in the City are not likely to
meet the projected need for low income housing in the Lake Elsinore community; and
RESOLUTION NO. 2017 -
Page 3
WHEREAS, purchase of the Properties for affordable housing purposes serves the common
benefit by assisting the City in meeting the State mandate to provide very low income, low
income and moderate income housing; and,
WHEREAS, the City Council of the City has duly considered all of the terms and conditions of the
Purchase and Sale Agreement, as set forth in the agenda report presented to it and as attached
hereto and any testimony received at the meeting at which this matter was considered, and
believes that the acquisition of the Properties is in the best interests of the City and the health,
safety, morals and welfare of its residents, and in accord with the public purposes and provisions of
applicable State and local law requirements; and
WHEREAS, by authorizing acquisition of the Properties, the City Council hereby finds and
determines that it is not committing itself to or agreeing to undertake any other acts or activities
requiring the subsequent independent exercise of discretion by the City Council or any
representative or department thereof. Any disposition of the Properties or future use thereof
shall be preceded by, and is conditional and contingent upon, environmental assessment and
review under, and in compliance with, the California Environmental Quality Act ("CEQA"); and
WHEREAS, the City, in its capacity as Housing Successor, desires to approve a Purchase and
Sale Agreement substantially in the form attached hereto to be entered into by the City and
Successor Agency for the purchase and sale of the Properties for an aggregate purchase price
of $720,000; and
WHEREAS, the City in its capacity as Housing Successor, proposes to purchase the Properties
utilizing funds from the LMIHAF; and
WHEREAS, the City, in its capacity as Housing Successor, proposes to purchase the Properties
for affordable housing purposes in accordance with applicable sections of the Dissolution Law;
and
WHEREAS, all other legal prerequisites to the adoption of this Resolution have occurred.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, ACTING AS
SUCCESSOR TO THE HOUSING ASSETS AND FUNCTIONS OF THE FORMER
REDEVELOPMENT AGENCY OF THE CITY OF LAKE ELSINORE UNDER HEALTH &
SAFETY CODE SECTION 34176(a)(1), DOES HEREBY RESOLVE, DETERMINE AND
ORDER AS FOLLOWS:
SECTION 1. The Recitals set forth above are true and correct and incorporated herein by
reference.
SECTION 2. The City, in its capacity as Housing Successor, hereby approves the purchase of
the Properties for an aggregate purchase price of $720,000. The terms and provisions of the
Purchase and Sale Agreement between the City and Successor Agency with respect to the
acquisition of the Properties in the form attached hereto is hereby approved, with such changes
as may be mutually agreed upon by the City Manager (or his duly authorized representative), in
consultation with the City Attorney, as are minor and in substantial conformance with the form of
the Purchase and Sale Agreement submitted herewith.
SECTION 3. The City, in its capacity as successor to the housing assets and functions of the
former Agency under Health & Safety Code Section 34176(a)(1), hereby appropriates funds
RESOLUTION NO. 2017 -
Page 4
from the Low and Moderate Income Housing Asset Fund to fund the purchase price for the
Properties and other costs as set forth in the Purchase and Sale Agreement.
SECTION 4. The acquisition of the Property by the City pursuant to the Purchase and Sale
Agreement is exempt from the provisions of CEQA under Section 15004(b)(2)(A) of the State
CEQA Guidelines because any subsequent disposition or action taken by the City Council with
respect to the future use of the Properties shall be preceded by, and is conditional and
contingent upon, environmental assessment and review under, and in compliance with, CEQA.
SECTION 5. The City Manager is hereby authorized and directed to execute, and the City
Clerk is hereby authorized and directed to attest, the Purchase and Sale Agreement on behalf
of the City, including the acceptance in the name and on behalf of the City of a grant deed
conveying to this City the above-described interest in the Properties. In such regard, the City
Manager is authorized to sign the final version of the Purchase and Sale Agreement after
completion of any such non -substantive, minor revisions. Copies of the final form of the
Agreement, when duly executed and attested, shall be placed on file in the office of the City
Clerk.
SECTION 6. In addition, the City Manager is authorized and directed to do any and all things,
and to execute any and all additional documents, which he may deem necessary or advisable to
effectuate this Resolution, including all escrow instructions and documents, which in
consultation with the City Attorney, he may deem necessary or advisable in order to carry out
and implement the Purchase and Sale Agreement and otherwise effectuate the purposes of this
Resolution and to administer the City's obligations, responsibilities and duties to be performed
under the Purchase and Sale Agreement, The City Manager is further authorized and directed
to do any and all things, and to execute any and all documents, to insure that the Properties
shall be utilized by the City in accordance with the Community Redevelopment Law (Part
1(commencing with Section 33000)), as amended by Health and Safety Code Section 34176. 1,
and, in particular, for the development of affordable housing in accordance with Health and
Safety Code Section 34176.1(a)((3)(A). Any previously -taken acts or previously -executed
documents in furtherance of the subject matter hereof are hereby ratified.
SECTION 7. If any provision of this Resolution or the application thereof to any person or
circumstance is held invalid, such invalidity shall not affect other provisions or applications of
this Resolution which can be given effect without the invalid provision or application, and to this
end the provisions of this Resolution are severable. The City Council hereby declares that it
would have adopted this Resolution irrespective of the invalidity of any particular portion thereof.
SECTION 8. The City Clerk shall certify to the passage and adoption of this Resolution and
enter it into the book of original resolutions.
RESOLUTION NO. 2017-_
Page 5
SECTION 9. This Resolution shall take effect immediately upon its adoption.
PASSED AND ADOPTED this 10th day of January 2017.
ATTEST:
E. Magee, Mayor
APPROVED AS TO FORM:
Susan M. Domen, MMC Barbara Leibold
City Clerk City Attorney
Attachment: Purchase and Sale Agreement
RESOLUTION NO. 2017 -
Page 6
STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE ) ss.
CITY OF LAKE ELSINORE )
I, Susan M. Domen, MMC, City Clerk of the City of Lake Elsinore, California, do hereby certify
that Resolution No. was adopted by the City Council of the City of Lake Elsinore,
California, at the regular meeting of January 10, 2017, and that the same was adopted by the
following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
Susan M. Domen, MMC
City Clerk
OWNER: SUCCESSOR AGENCY TO THE REDEVELOPMENT
AGENCY OF THE CITY OF LAKE ELSINORE, a public
body, corporate and politic
APN(S): 374-062-005; 374-062-006; 374-062-015; [374-062-020]; 374-
162-039;374-162-041;374-162-043;374-162-045;374-162-047;
374-162-049; 374-162-051; 374-162-053; 374-162-055; 374-162-
057;374-162-059;374-162-061
ESCROW/TITLE NO.: First American Title Insurance Company
AGREEMENT AND ESCROW INSTRUCTIONS FOR
PURCHASE AND SALE OF REAL PROPERTY
THIS AGREEMENT AND ESCROW INSTRUCTIONS FOR PURCHASE AND
SALE OF REAL PROPERTY (this "Agreement"), dated for identification purposes only as of
January _, 2017, is made by and between the CITY OF LAKE ELSINORE, a California
municipal corporation, in its capacity as the successor to the housing assets and functions of the
former Redevelopment Agency of the City of Lake Elsinore under Health and Safety Code
Section 34176(a)(1) ("Buyer"), on the one hand, and the SUCCESSOR AGENCY TO THE
REDEVELOPMENT AGENCY OF THE CITY OF LAKE ELSINORE, a public body,
corporate and politic (collectively, the "Seller"), on the other hand. This Agreement is for
acquisition by the Buyer of certain real property hereinafter set forth in Attachment No. I to
Exhibit "A" and is made on the basis of the following facts, intentions_and understandings.
RECITALS
A. Seller is the present owner of that certain unimproved real property located in the
City of Lake Elsinore, California, generally described as Assessor's Parcel Nos. 374-062-005;
374-062-006; 374-062-015:[374-062-020]; 374-162-039; 374-162-041; 374-162-043; 374-162-
045; 374-162-047; 374-162-049; 374-162-051; 374-162-053; 374-162-055; 374-162-057; 374-
162-059; 374-162-061 and more particularly described in Attachment No. 1 to Exhibit "A"
(collectively, the "Property").
B. Seller is charged with implementing recognized enforceable obligations and
winding down of the affairs of the former Redevelopment Agency of the City of Lake Elsinore
(the "Agency") in accordance with the California Health and Safety Code.
C. California Health & Safety Code Sections 34177(e) and 34181(a) require Seller to
dispose of all assets and properties of the former Agency expeditiously and in a manner aimed at
maximizing value.
D. Buyer has proposed to purchase the Property at the value identified in two
appraisals dated June 20, 2016, which Seller believes to be the highest and best value for the
Property.
E. Seller desires to convey fee simple absolute title in the Property to Buyer in
accordance with the terms and conditions of this Agreement, and Buyer desires to acquire the
Property in accordance with this Agreement.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, receipt of which is
acknowledged, the parties agree as follows:
ARTICLE I
PURCHASE AND SALE; PURCHASE PRICE• AFFORDABLE HOUSING PURPOSE;
USE OF PROCEEDS
1.1 Purchase and Sale. Buyer agrees to purchase the Property from Seller and Seller
agrees to sell the Property to Buyer, on and subject to the conditions, covenants and terns
contained in this Agreement.
1.2 Purchase Price. The purchase price shall be Seven Hundred Twenty Thousand
Dollars ($720,000.00) (the "Purchase Price"). The Purchase Price of the Property is the fair
market value of the Property, as determined by appraisals prepared by a third party, licensed
appraiser.
1.3 Affordable Housing Purpose. Buyer desires to purchase the Property for
affordable housing purposes. Buyer will utilize funds held in the Low and Moderate Income
Housing Asset Fund created in accordance with Health and Safety Code Section 34176 (d) for
payment of the Purchase Price. The Property shall be utilized by Buyer in accordance with the
Community Redevelopment Law (Part ](commencing with Section 33000)), as amended by
Health and Safety Code Section 34176.1, and, in particular, for the development of affordable
housing in accordance with Health and Safety Code Section 34176.1(a)((3)(A).
1.4 Use of Sale Proceeds by Seller. In accordance with California Health & Safety
Code Sections 34177(e) and 34181(a), the net proceeds of the Purchase Price, after reduction for
the costs of sale of the Property such as appraisal, title and escrow fees, shall be used to pay
enforceable obligations on an approved Recognized Obligation Payment Schedule. Any excess
shall be transferred to the Riverside County Auditor -Controller for distribution as property tax
proceeds.
ARTICLE II
ESCROW
2.1 Open Escrow. Within five (5) days after the execution of this Agreement by
both parties, Seller and Buyer shall open escrow ("Escrow") with First American Title Insurance
Company (the "Escrow/Title Company") located at 43620 Ridge Park Drive, Suite 200,
Temecula, CA 92590, Attention: Debra Fritz.
2.2 Close of Escrow. The "Close of Escrow" shall mean the time and day the Grant
Deeds are filed for record with the Riverside County Recorder, which shall be on or before forty -
a BCL a 30050689 2
five (45) days after the opening of Escrow ("Closing Date"). The Close of Escrow shall be in
accordance with Article IV of this Agreement.
2.3 Escrow Instructions. This Agreement shall constitute joint primary escrow
instructions to the Escrow/Title Company; provided, however, that the parties shall execute such
additional instructions as requested by the Escrow/Title Company not inconsistent with the
provisions hereof. In the event of any inconsistency between such escrow instructions and this
Agreement, this Agreement shall control the rights and obligations of the parties.
ARTICLE III
CONDITIONS PRECEDENT
The purchase and sale under this Agreement shall be subject to the satisfaction of the
conditions precedent set forth in this Article III (unless waived in writing by the party to whom
the benefit of such condition runs) on or before the Closing Date or such earlier date as is
specified in this Agreement, each of which conditions shall be a covenant of the party required to
perform such condition.
3.1 Conditions to Buyer's Obligations and Due Diligence Period.
A. Delivery of Title and Title Insurance. Seller shall convey title to the
Property to Buyer at the Close of Escrow, subject only to Permitted Exceptions. The tern
"Permitted Exceptions" shall mean: (i) liens for real property taxes shown as exceptions in the
Title Report provided that the taxes are not delinquent; (ii) the standard exclusions to coverage
under Escrow/Title Company's At.TA :Extended Coverage Owner's Policy of Title Insurance
("Title Policy"); and (iii) any other lien, encumbrance, title exception or defect that appears in
the Title Report which Buyer has approved or which is caused by Buyer prior to the Close of
Escrow. Notwithstanding the foregoing, in no event shall the following be considered Permitted
Exceptions: deeds of trust or mortgages; judgments; mechanics' and materiahncn's liens; tax
liens; or liens, encumbrances or other title matters created by Seller after the date of this
Agreement without the prior written consent of Buyer. Buyer agrees that Seller's obligation to
convey title to Buyer shall be deemed satisfied upon Escrow/Title Company's willingness to
issue the Title Policy subject only to the Permitted Exceptions.
B. Delivery of Title Report. Within five (5) days following the opening of
Escrow and at Buyer's expense, Escrow/Title Company shall deliver to Buyer a preliminary title
report for the Property ("Title Report") together with copies of any exceptions referred to in
Schedule B of the Title Report.
C. Due Diligence Period. Buyer shall have thirty (30) days after the opening
of Escrow (the "Due Diligence Period") to review the exceptions, legal descriptions and other
matters contained in the Title Report. Seller shall deliver to Buyer during the Due Diligence
Period any other documents relating to the Property to the extent they are requested by Buyer
and reasonably available to Seller. Buyer shall promptly provide to Seller a copy of all reports.
If the Buyer reasonably determines within the Due Diligence Period that the condition of title or
the condition of the Property is not satisfactory for any reason, Buyer may elect to terminate this
0�13ci3O)300501389 3
Agreement by promptly notifying the Seller and Escrow/Title Company in writing of its decision
to terminate.
D. Representations and Warranties. Each of the representations and
warranties by Seller contained in Section 8.1 was true and correct in all material respects as of
the date made and continues to be true and correct in all material respects as of the Close of
Escrow.
E. Delivery of Close of Escrow Documents. Execution, delivery and
acknowledgement as appropriate by Seller of the Close of Escrow documents set forth in
Section 4.1 B(i) and other necessary Close of Escrow documents as may be reasonably requested
by Buyer or Escrow/Title Company.
P. No Material Change. No material change in the status of the use, title,
occupancy or physical condition of the Property, unless caused by Buyer or its agents, shall have
occurred with respect to the Property prior to Close of Escrow that has not been approved in
writing by Buyer, which approval can be withheld in Buyer's sole discretion. Additionally,
Seller shall (i) maintain its existing insurance policies in full force and effect; (ii) provide prompt
written notice to Buyer of any casualty or condemnation affecting any portion of the Property
after the date of this Agreement; (iii) deliver to Buyer, promptly after receipt by Seller, copies of
all notices of violation issued by any governmental authority with respect to the Property
received by Seller after the date of this Agreement; (iv) advise Buyer promptly of any litigation,
arbitration or other judicial or administrative proceeding which concerns or affects the Property;
and (v) comply in material respects with the requirements of all contracts, licenses, permits,
approvals, guaranties and warranties.
G. Seller Performance. Seller shall have performed each and every
undertaking, covenant and agreement required to be performed by Seller under this Agreement
prior to or at the Close of Escrow.
3.2 Conditions to Seller's Obligations.
A. Delivery of Purchase Price. Buyer shall have deposited the Purchase Price
with Escrow/Title Company.
B. Representations and Warranties. Each of the representations and
warranties by Buyer contained in Section 8.2 below shall be determined to have been true and
correct in all material respects as of the date made and shall continue to be true and correct in all
material respects as of the Close of Escrow.
C. Delivery of Close of Escrow Documents. Execution, delivery and
acknowledgement as appropriate by Buyer of the Close of Escrow documents set forth in
Section 4.1B(ii) and other necessary Close of Escrow documents as may be reasonably requested
by Buyer with Escrow/Title Company.
D. Buyer Performance. Buyer shall have performed each and every
undertaking, covenant and agreement required to be performed by Buyer under this Agreement
prior to or at the Close of Escrow.
@BCL @30050689
3.3 Failure of Conditions. The failure of Seller or Buyer to satisfy any of the
conditions precedent contained in this Article III within the times specified in this Agreement
shall constitute a default hereunder and unless such conditions are waived or the time for
satisfaction extended by the party to whose benefit the conditions run, the party to whose benefit
the conditions run shall have the right to terminate this Agreement by delivering written notice to
the other party and Escrow/Title Company.
ARTICLE IV
CLOSE OF ESCROW
4.1 Close of Escrow. The purchase and sale of the Property shall be consummated
on or prior to the Closing Date in accordance with the following:
A. Time. When Escrow/Title Company is in a position to issue the Title
Policy and all required documents and funds have been deposited with Escrow/Title Company,
and Buyer and Seller have advised the Escrow/Title Company in writing that the Conditions of
Close of Escrow set forth herein have been satisfied or waived, Escrow/Title Company shall
immediately close Escrow as provided below.
B. Close of Escrow Documents.
(i) Seller. No later than the day prior to the Closing Date, Seller shall
duly execute and acknowledge as appropriate and deliver- to Escrow/Title Company the
following:
(a) One or more grant deeds ("Deeds") conveying the Property
to Buyer in substantially the form attached to this Agreement as Exhibit A;
(b) A Non -foreign Entity Affidavit ("Affidavit"), in the form
attached to this Agreement as Exhibit B, pursuant to Section 10.2; and
(c) Such documents and instruments as Escrow/Title Company
may reasonably require to evidence the due authorization and execution of the docm»ents and
instruments to be delivered by Seller under this Agreement and to issue the Title Policies.
The obligations of Seller to deliver documents and instruments into Escrow in accordance
with this Section 4.1130) are separate, independent covenants of Seller and shall not be
conditioned upon Buyer's deliveries in accordance with Section 4.1 B(ii).
(ii) Buyer. No later than the day prior to the Closing Date, Buyer shall
duly execute and acknowledge as appropriate and deliver to the Escrow/Title Company the
following:
(a) The amount of the Purchase Price, less the Deposit, if any;
(b) A Change of Ownership Statement, as required by
Escrow/Title Company or Escrow/Title Company;
13CL ar 300501389 5
(c) Such documents and instruments as Escrow/Title Company
may reasonably require to evidence the due authorization and execution of the documents and
instruments to be delivered by Buyer under this Agreement and to issue the Title Policy.
The obligations of Buyer to deliver funds, documents and instruments into Escrow under
this Section4.1B(ii) shall be separate, independent covenants of Buyer and shall not be
conditioned upon Seller's deliveries in accordance with Section 4.113(i).
C. Close of Escrow Procedure. At such time as the Escrow/Title Company
has received all of the items specified in Section 4.111, and at such time as Escrow/Title
Company is prepared to issue the Title Policy in accordance with Section 3.11, Buyer and Seller
hereby authorize and instruct Escrow/Title Company to: (i) cause Escrow/Title Company to
record the Deeds, and issue the Title Policies to Buyer; (ii) pay any applicable recordation fees
and transfer taxes; (iii) compute pro -rations relating to the Property for the accounts of Seller and
Buyer; (vi) pay to Seller an amount equal to the Purchase Price, less any pro -rations chargeable
to Seller and any amounts payable by Seller to Escrow/Title Company for its services and
expenditures in connection with this Agreement; (iv) pay to Buyer the balance of the funds then
held by Escrow/Title Company, less any pro -rations chargeable to Buyer and any amounts
payable by Buyer to Escrow/Title Company for its services and expenditures in connection with
this Agreement; and (vii) deliver to Buyer and Seller a conformed copy of the Deeds showing the
recording information.
4.2 Fees; Expenses; Prorations.
A. Pees, Expenses, Transfer Taxes.
(i) Seller. Seller shall pay or satisfy, as applicable: (a) all
documentary transfer taxes imposed in connection with the recording of the Deed; (b) Escrow
fees; (c) the cost of the Title Policy for Buyer in the amount of the Purchase Price; (d) the
reasonable expenses previously incurred by Seller for purposes of obtaining an appraisal or
similar market comparison analysis; (c) the cost of recording the Deed and all other documents
recorded at the Close of Escrow; and (d) any other customary fees and charges and expenditures
authorized by Buyer; and (e) any other customary fees and charges and expenditures authorized
by Seller.
(ii) Buyer. Buyer shall have the right to procure an ALTA Extended
Coverage Owner's Policy of Title Insurance ("ALTA Policy") and Buyer shall pay for the
increased cost of such ALTA Policy above the cost of the Title Policy, the cost of any survey
that the Escrow/Title Company requires for issuance of an ALTA Policy and for the cost of any
other increase in the amount or scope of title insurance if Buyer elects to increase the amount or
scope of title insurance coverage or to obtain endorsements to the Title Policy or ALTA Policy.
All other costs, if any, shall be apportioned between Buyer and Seller in the customary manner
for real estate transactions in the County of Riverside, State of California.
B. Real Property Taxes and Assessments. All real property taxes and
assessments for the fiscal years of the taxing and assessing authorities in which the Close of
Escrow occas shall be prorated on the basis of a three hundred sixty-five (365) day year at the
(,N3CL a 300501489
Close of Escrow with appropriate debits and credits to the accounts of Buyer and Seller so that
Seller shall be responsible for paying all of the same, to the extent duly allocable to the period
ending on the day immediately prior to the Closing Date and Buyer shall be responsible for
paying all of the same (if any shall be due), to the extent duly allocable to the period
commencing upon the Closing Date.
C. Commissions. Buyer and Seller represent and warrant to each other that
no person or entity may claim or is entitled to a real estate commission, finder's fees or any
similar payments with respect to this Agreement or the sale of the Property. Buyer and Seller
shall each protect, defend, indemnify and hold the other harmless from and against all such
claims for real estate commissions, finder's fees or any similar payments with respect to the sale
of the Property in accordance with this Agreement.
ARTICLE V
BREACH
5.1 General. If either party breaches its obligations under this Agreement prior to the
Close of Escrow, then the other party may, without terminating this Agreement, suspend
performance by giving written notice to the other party until such breach is cured by the other
party. Except for Seller's and Buyer's respective delivery obligations under Article 1V,
including, without limitation. Buyer's delivery to the Escrow/Title Company of the Purchase
Price, neither party shall be in default under this Agreement unless it fails to cure a breach of
such party's obligations under this Agreement within twenty-four (24) hours after receipt of
written notice of such breach from the non -breaching party. Nothing contained in this
Agreement is intended nor shall pl-n-mii any party in default to terminate this Agreement or the
Escrow provided for in this Agreement as a result of such default.
5.2 Termination. if either party breaches any of its obligations under this Agreement
prior to the Close of Escrow and fails to cure such breach within twenty-four (24) hours after
receipt of written notice from the other party, then the non -defaulting party may terminate this
Agreement by written notice to the defaulting party and to the Escrow/Title Company.
Termination of this Agreement shall be without prejudice as to whatever legal rights the party
may have against the other arising out of this Agreement. If neither party has fully complied
with the provisions of Escrow and notice has not been delivered pursuant to Section 5.1, then
Escrow/Title Company shall proceed with the Close of Escrow as soon as possible.
ARTICLE VI
CONDITION OF PROPERTY
6.1 "As Is" Condition. The Property is purchased and sold in "AS IS" condition.
Buyer, as specified in Section 3.1C, has or shalt have inspected and conducted tests, inspections,
investigations and studies of the Property as Buyer, in Buyer's discretion, deems necessary.
Buyer represents that it is acting and will act only upon information obtained by it from its own
inspection and investigation of the Property and upon the express representations of Seller
contained in this Agreement.
Pz I3CL n 300501389 7
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
7.1 Seller's Representations and Warranties. In consideration of Buyer's entering
into this Agreement and as an inducement to Buyer to purchase the Property, Seller makes the
following covenants, representations and warranties, each of which is material and is being relied
upon by Buyer (and the continued truth and accuracy of which shall constitute a condition
precedent to Buyer's obligations hereunder):
A. Authority. Seller has the full power and authority to sell the Property, and
this Agreement has been duly and validly authorized, executed and delivered by Seller and no
other authorization or third party consent is requisite to the valid and binding execution, delivery
and performance of this Agreement by Seller.
B. Encumbrances. Seller is the owner of the fee interest in the Property free
and clear of all liens, encumbrances and other matters other than those set forth in the Title
Policy and the Property is not subject to any outstanding contract of sale, right of first refusal or
purchase option, in favor of any person or entity, except Buyer. Seller will not sell, lease,
sublease, assign, mortgage or otherwise encumber the Property without Buyer's prior written
approval, which may be withheld in Buyer's sole discretion.
C. Representations. All representations and warranties of Seller set forth in
this Agreement shall be true on and as of the Close of Escrow as if those representations and
warranties were made on and as of such time.
D. Leaal" fower. The individuals executing this Agreement and the
instruments referenced herein on behalf of Seller, have the legal power, right and actual authority
to bind Seller to the terms and conditions hereof and thereof.
E. No Breach. There are no contracts or agreements relating to the leasing,
operation and maintenance of the Property which will be effective as to the Property following
the Close of Escrow. There are no agreements, rights or agreements under which any third
person or party has any right or option to purchase the Property. This Agreement and all
documents required hereby to be executed by Seller are and shall be valid, legally binding
obligations of and enforceable against Seller in accordance with their terms, subject only to the
applicable bankruptcy, insolvency, reorganization, moratorium laws or similar laws or equitable
principles effecting or limiting the rights of contracting parties generally. To Seller's
knowledge, neither the execution and delivery of this Agreement and the documents referenced
herein, nor the incurrence of the obligations set forth herein, nor the consummation of the
transactions herein contemplated, nor compliance with the terms of this Agreement and the
documents reference herein, result in the breach of any terms, conditions or provisions of, or
constitute a default under, any bond, note, or other evidence of indebtedness or any contract,
indenture, mortgage, deed of trust, loan, partnership agreement, lease, or other agreements or
instruments to which Seller is a party or effecting the Property.
@a BCL@30050699 8
F. Litigation. There are no suits, claims, foreclosure proceedings, property
tax protests, zoning or other administrative proceedings that are pending or, to the best of
Seller's knowledge, threatened with respect to or in any manner affecting the Property.
G. Condemnation; Eminent Domain. Seller has neither received any written
notice from a governmental authority, nor has any knowledge of any action regarding eminent
domain proceedings for the condemnation of all or any portion of the Property. To Seller's
knowledge, Seller has not received any written notices of violations, including, without
limitation, any environmental law violations, that still exist frau any municipal or governmental
bodies regarding the Property.
H. Due Diligence. Seller has delivered to Buyer complete legible copies of
all the material documents pursuant to Section 11C. concerning the Property in Seller's
Possession or under its control.
1. Environmental Laws. To Seller's knowledge, Seller has not received
written notice from any governmental authority that the Property or the use or operation thereof
are in violation of any Environmental Laws, and to Seller's knowledge, no such written notice
has been issued and, to Seller's knowledge, no violation of any Environmental Laws has
occurred. To Seller's knowledge, no part of the Property has ever been used by any person or
entity to refine, produce, use, store, handle, transfer, process, transport or dispose of any
Hazardous Substances.
7.2 Buyer's Representations, Warranties and Covenants. In consideration of
Seller, entering into this Agreement and as an inducement to Seller to sell the Pr, -petty to Bayer,
Buyer makes the following representations, warranties and covenants, each of which is material
and is being relied upon by Seller (the continued truth and accuracy of which shall constitute a
condition precedent to Seller's obligations hereunder):
A. Authority. Buyer has the full power and authority to buy the Property, and
this Agreement has been duly and validly authorized, executed and delivered by Buyer and no
other authorization or third party consent is requisite to the valid and binding execution, delivery
and performance of this Agreement by Buyer.
B. Representations. All representations and warranties of Buyer set forth in
this Agreement shall be true on and as of the Close of Escrow as if those representations and
warranties were made on and as of such time.
ARTICLE VIII
CONDEMNATION, DAMAGE AND DESTRUCTION
8.1 Condemnation. If, between the date of this Agreement and the Closing Date,
condemnation or eminent domain proceedings affecting any portions of the Property are initiated
or are threatened to be initiated by any entity other than Buyer, then, Buyer shall have the right to
either: (i) affirm this Agreement, which shall remain in full force and effect without any
diminution of the Purchase Price and Seller shall assign to Buyer upon the Closing Date all of
Seller's rights to any condemnation awards by depositing an assignment of said award with the
Escrow/Title Company; or (ii) subject to and conditioned on Buyer's compliance with the
BCL,, 30050B89 9
remaining provisions of this Section 8.1, terminate this Agreement and neither party shall have
any further obligations or liabilities to each other, except that Buyer's indemnity obligations
under this Agreement shall survive any such termination. Buyer shall not propose, institute,
cooperate with or permit any condemnation of all or any part of the Property prior to the Close of
Escrow.
8.2 Damage and Destruction. If, between the date of this Agreement and the
Closing Date, any portion of the Property is materially damaged or destroyed, then Buyer shall
have the option by written notice to Seller to: (i) terminate this Agreement and Buyer shall have
no obligation to purchase the Property and Seller shall have no obligation to sell the Property to
or (ii) affirm this Agreement, which shall remain in full force and effect without delaying the
Close of Escrow and without diminution of the Purchase Price.
ARTICLE IX
MISCELLANEOUS
9.1 No Foreign Investors. Seller warrants and represents to Buyer that Seller is not a
foreign individual, foreign corporation, foreign partnership, foreign trust, or foreign estate (as
those terms are defined in the Internal Revenue Code and Income Tax Regulations). Seller shall
execute and deliver to Buyer at the Close of Escrow the Affidavit certifying the representations
and warranties made pursuant to this Section.
9.2 Attorneys' Fees. if any action, proceeding or arbitration is brought to interpret or
enforce the terms of this Agreement, the prevailing party shall be entitled to recover from the
other party, in addition to all other damages, all costs and expenses of such action, proceeding or
arbitration, including but not limited to actual attorneys' fees (including the allocated costs of in-
house counsel), witness fees' and court costs. The phrase "prevailing party" as used in this
Section shall mean the party who receives substantially the relief desired whether by dismissal,
summary judgment or otherwise. The terms of this Section shall survive the Close of Escrow
and shall not be merged with the Deed.
9.3 Notices. All notices and requests under this Agreement shall be in writing and
shall be sent by personal delivery, facsimile or e-mail (with hard copy to follow the next business
day by overnight mail), by nationally recognized overnight mail carrier such as FedEx or
delivered in person to the following street addresses:
SELLER: Successor Agency to the
Redevelopment Agency
of the City of Lake Elsinore
130 S. Main Street
Lake Elsinore. CA 92530
Attn: Grant Yates, City Manager
Telephone: (95 1) 674-3124 ext. 361
Facsimile: (95 1) 674-2392
E -Mail: gyates@Lake-Elsinore.org
@130LQ300501389 10
With a copy to: Leibold McClendon & Mann PC
9841 Irvine Center Drive, Suite 230
Irvine, CA 92618
Attention: Barbara Leibold
Telephone: (949) 585-6300 ext. 101
Facsimile: (949) 585-6305
E -Mail: barbara@cega.com
BUYER: City of Lake Elsinore
130 S. Main Street
Lake Elsinore, CA 92530
Attn: Grant Yates, City Manager
Telephone: (951) 674-3124 ext. 361
Facsimile: (951) 674-2392
E -Mail: gyates@Lake-Elsinore.org
With a copy to: Leibold McClendon & Mann PC
9841 Irvine Center Drive, Suite 230
Irvine, CA 92618
Attention: Barbara Leibold
Telephone: (949) 585-6300 ext. 101
Facsimile: (949) 585-6305
E -Mail: barbara@cega.com
Escrow/Title Company: First American Ti'ile Insurance Company
43620 Ridge Park Drive, Suite 200
Temecula, CA 92590
Attention: Debra Fritz
Telephone: (951) 296-2948
E -Mail: dfritz@firstam.com
All notices shall be effective upon the earlier of personal delivery or receipt of a facsimile
confirmation statement, if sent by facsimile, or receipt of confirmation of delivery, if delivered
by e-mail or a nationally recognized overnight mail carrier. Either party may change its address
or designate a new street address for notices under this Agreement by notice complying with the
terms of this Section.
9.4 Cooperation. Buyer and Seller shall reasonably cooperate with the other in
connection with the requirements imposed by this Agreement and agree to cooperate with each
other by executing such other documents or taking such other action as may be reasonably
necessary in accordance with the intent of the parties as evidenced by this Agreement, provided
such documents do not create any additional liability or expense for such party not contemplated
by this Agreement.
9.5 Survival. Buyer's and Seller's representations, warranties and obligations under
this Agreement shall survive the Close of Escrow and shall not be merged into or defeated by the
execution, delivery or recordation of the Deed given in connection with this Agreement.
(MBC q.300501389 11
9.6 Interpretation. This Agreement shall be construed and enforced in accordance
with the laws of the State of California as applicable to contracts entered into in California
among parties doing business therein. This Agreement contains the entire agreement between
the parties respecting the purchase and sale of the Property and supersedes all prior negotiations,
discussions, understandings and agreements, both oral and written, between the parties with
respect to such (natters. This Agreement shall not be effective between the parties until the date
this Agreement is executed and delivered into Escrow by both Seller and Buyer. This
Agreement may not be modified or amended in any way except by a writing executed by both
Buyer and Seller. The section headings of this Agreement are for convenience only and are not
to be construed as part of this Agreement and do not in any way amplify or define the terms,
conditions, and covenants of this Agreement and shall not be used in construction or
interpretation of this Agreement. There are no third -party beneficiaries to this Agreement.
Unless the context otherwise indicates, whenever used in this Agreement, the word "party" or
"parties" means Buyer or Seller or both, as the context may require. Time is of the essence in
the performance of each term of this Agreement.
9.7 Successors and Assigns. This Agreement shall be binding upon and inure to the
benefits of the successors and assigns of the parties to this Agreement. In no event shall Buyer
have any right to delay or postpone the Close of Escrow to create a partnership, corporation or
other form of business association or to obtain financing to acquire title to the Property or to
coordinate with any other sale, transfer, exchange or conveyance.
9.8 Severability. If any term or provision of this Agreement is determined to be
invalid or unenforceable, the remaining terms and provisions shall not be affected thereby and
shall remain in full force and effect to the maximum extent permitted by law.
9.9 Dates. Whenever any determination is to be made or action is to be taken on a
date specified in this Agreement, if such date shall fall on Saturday, Sunday or legal holiday
under the laws of the State of California, then in such event said date shall be extended to the
next day which is not a Saturday, Sunday or legal holiday.
9.10 Counterparts; Telefacsimile Execution. This Agreement may be executed in
counterparts, all of which shall constitute the same Agreement, notwithstanding that all parties to
this Agreement are not signatory to the same or original counterpart.
9.11 No Assumption of Seller's Liabilities. Buyer is acquiring only the Property
from Seller and is not the successor of Seller. Except only for the obligations accruing after the
Closing Date or assumed in writing by Buyer, Buyer does not assume or agree to pay, or
indemnify Seller or any person or entity against any liability, obligation or expense of Seller or
relating to the Property.
9.12 Limitation of Liability. No advisor, trustee, director, officer, partner, member,
employee, beneficiary, shareholder, participant or agent of or in Seller or Buyer shall have any
personal liability, directly or indirectly, under or in connection with this Agreement or any
agreement made or entered into under or pursuant to the provisions of this Agreement, or any
amendment or amendments to any of the foregoing made at any time or times, heretofore or
hereafter. The terms of this Section survive the Close of Escrow or termination of this
Agreement.
0F,BCI�ii_,300501389 12
9.13 Indemnification; Limitation on Liability. Seller hereby agrees to indemnify,
defend and hold Buyer harmless from and against any claims, damages, demands, liabilities,
losses, judgments, expenses and attorneys' fees and/or costs resulting from any material breach
of this Agreement by Seller, including, without limitation, the falsity of any representation or
warranty made by Seller contained in this Agreement. Neither Buyer nor Seller shall in any
event be entitled to, and each hereby waives, any right to seek consequential damages of any
kind or nature from the other party arising out of or in connection with this Agreement.
9.14 Tax and legal advice. Seller represents and warrants that the buyer has not
provided tax or legal advice to seller in connection with this agreement. Seller further represents
and warrants that they have been advised of their right to legal counsel and tax advice and have
either obtained the advice of independent legal counsel or a tax advisor with respect to the terns
of this agreement and all attachments hereto and other agreements required hereby, or have
knowingly and voluntarily decided not to consult with legal counsel or a tax advisor of his/her
choosing.
9.15 Time of Essence. Time is expressly made of the essence with respect to the
performance by Buyer and Seller of each and every obligation and condition of this Agreement
including, without limitation, the Close of Escrow.
9.16 Exhibits Incorporated by Reference. All exhibits attached to this Agreement
are incorporated in this Agreement by this reference. This Agreement is executed in three (3)
duplicate originals, each of which is deemed to be an original. This Agreement includes
thirteen (13) pages, a signature page (Page 14) and two (2) exhibits including Exhibit "A", form
of Grant Deed, and Exhibit `B", Seller's form of Certification of Non -Foreign Staters.
[Signatures on next page]
a) BCI,, i, 3(70501389 13
IN WITNESS WHEREOF, the Buyer and the Seller have signed this Agreement and
Escrow hnstructions for Purchase and Sale of Real Property on the date set forth below.
"SELLER"
SUCCESSOR AGENCY TO THE
REDEVELOPMENT AGENCY OF THE
CITY OF LAKE ELSINORE, a public body,
corporate and politic
Dated: By:
Its:
"BUYER"
CITY OF LAKE ELSINORE, a California
municipal corporation, in its capacity as successor
to the housing assets and functions of the former
Redevelopment Agency of the City of Lake
Elsinore under Health and Safety Code Section
34176(a)(1)
Dated:
Mayor
APPROVED AS TO FORM:
LEIBOLD McCLENDON & MANN, P.C.
By:
Barbara Leibold, City Attorney
[signatures continued on next page]
(q)3CUM30050B89 14
ESCROW/TITLE COMPANY'S CONSENT: Escrow/Title Company hereby acknowledges
receipt of this Agreement and consents to the terms and conditions set forth herein.
"ESCROW/TITLE COMPANY"
By:
Name:
Its:
Dated:
2 BCLiLN005oB89 15
WHEN RECORDED MAIL AND
MAIL TAX STATEMENTS TO:
CITY OF LAKE ELSINORE
130 So. Main Street
Lake Elsinore, CA 92530
EXHIBIT "A"
GRANT DEED
GRANT DEED
ARY TRANSFER TAX
TO GOVT CODE SEC 1'ION 27383
FOR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, the
SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF
LAKE ELSINORE, a public body, corporate and politic ("Seller"), hereby GRANT(S) to the
CITY OF LAKE ELSINORE, a California municipal corporation (`Buyer"), the real property
referred to as APN No. 374-062-005; 374-062-006; 374-062-015; [374-062-020]; 374-162-039;
374-162-041; 374-162-043; 374-162-045; 374-162-047; 374-162-049; 374-162-051; 374-162-
053; 374-162-055; 374-162-057; 374-162-059; 374-162-061 and described as:
Dated:
SEE ATTACHMENT NO. 1 TO EXHIBIT "A"
ATTACHED HERETO AND INCORPORATED HEREIN BY REFERENCE
"SELLER"
SUCCESSOR AGENCY TO THE
REDEVELOPMENT AGENCY OF THE
CITY OF LAKE ELSINORE, a public body,
corporate and politic
By:
Its:
OWL(d30050B89 Exhibit "A"
ATTACHMENT NO. 1
TO
EXHIBIT "A"
LEGAL DESCRIPTION
The land referred to herein is situated in the State of California, County of Riverside, City of
Lake Elsinore, described as follows:
Property Identification
The subject property is a 1.37+ net acre parcel (59,534+ square feet, according to the assessor's
map) of residential zoned land identified as Riverside County Assessor's Parcel Number 374-
062-005, 006, 015 and 020 and located at 401 N. Spring Street in the City of Lake Elsinore. The
site is vacant land. The proposed acquisition is for the entire site (total taking).
Legal Description and Ownership
APN 374-062-005, 006, 015 and 020 is under the ownership of the Redevelopment Agency of
the City of Lake Elsinore. The legal description (from the Grant Deed) is:
Parcel 1:
Lots 2, 4, 6, 8 and 10 in Block 82 of Heald's Resubdivision of Blocks 51 and 54 to 86 inclusive
of Elsinore as shown by map on file in Book 8 page 378 of maps, San Diego County Records.
EXCEPTING therefi-om the following described property:
Beginning at the Southwest corner of Lot 2, Block 82 as said lot and block are shown on Heald's
Resubdivision of Blocks 51 and 54 thru 86 inclusive of Elsinore as shown by map on said
resubdivision on file in Book 8 page 378 of maps, San Diego County Records: THENCE
Easterly along the Southerly line of said Lot 2 and along the Northerly line of Pottery Street, as
shown on said maps, a distance of 110 feet; THENCE Northerly to a point in the Southerly line
of Lot 12 of Block 82 as shown on said map, said point being distant 80 feet Easterly, as
measured along the Southerly line of said Lot 12 from the Easterly line of Riley Street, as shown
on said map; THENCE continuing Northerly to the Northwest corner of Lot 24 as shown on said
map; THENCE Southerly along the Easterly line of said Riley Street to the point of beginning.
Parcel 2
Lot 7 in Block 82 of Heald's resubdivision of Blocks 51 and 54 to 86 inclusive of Elsinore as
shown by map on file in Book 8 page 378 of maps, San Diego County Records.
EXCEPTING therefrom that portion as described in the deed to the Elsinore, Pomona and Los
Angeles Railway Company, recorded April 11, 1896 in Book 48 page 148 of deeds, Riverside
County Records.
(aW1,msoo5ous9 Attachment No. l to Exhibit
Parcel 3
Lot 9 in Block 82 of Heald's resubdivision of Block 51 and 54 to 86 inclusive of Elsinore as
shown by map on file in Book 8 page 378 of maps, San Diego County Records.
EXCEPTING therefrom that portion as described in the deed to the Elsinore, Pomona and Los
Angeles Railway Company, recorded February 27, 1896 in Book 32 page 371 of deeds,
Riverside County Records.
Parcel 4:
Lots 1, 3, and 5 in Block 82 of the Townsite of Elsinore, as per map of Heald's Resubdivision of
said Block 82 in the City of Elsinore, County of Riverside, State of California, as per map
recorded in Book 8 page 378 of maps, in the office of the county recorder of San Diego County.
EXCEPT that portion included in the right of way of the Elsinore, Pomona and Los Angeles
Railroad Company, as per deed recorded in Book 50 page 235 of deeds, records of Riverside
County, California.
ALSO EXCEPTING from Lot 1 the Southerly 10 feet as granted to the City of Lake Elsinore by
deed recorded February 28, 1985 as Instrument No. 412321.
Excepting therefrom all oil, gas and other hydrocarbons, geothermal resources as defined in
Section 6903 of the California Public Resources Code and all other mineral, whether similar to
those herein specified or not, within or that may be produced from said real property; provided
however, that all rights and interest in the surface of said real property are her, by, conveyed to
grantee, no right or interest of any kind to use the surface, expressed or implied, being excepted
or reserved to grantor; and will damage the surface of said real property or any structures
thereon, and shall not conduct any drilling or other operations of any kind in the first five
hundred (500) feet below the surface of said real property.
And further excepting the sole and exclusive right fi-om time to time to drill and maintain wells
or other works into or through said real property and the adjoining streets, roads, and highways
below a depth of five hundred (500) feet and to produce, inject, store and remove from and
through such wells or works, oil, gas, water and other substances of whatever nature, including
the right to perform below said depth any and all operations deemed by grantor necessary or
convenient for the exercise of such rights as reserved in deed recorded September 28, 1976 as
Instrument No. 144761, Official Records.
Also Excepting therefrom all water rights incident and appurtenant as conveyed to the City of
Lake Elsinore by deed recorded February 28, 1985,
Property Identification
The subject property is a 1.30+ net acre parcel (56,630± square feet, according to the assessor's
map) of commercial mixed use zoned land identified as Riverside Comity Assessor's Parcel
Number 374-162-039, 041, 043, 045, 047, 049, 051, 053, 055, 057, 059 and 061 and located at
135 Stunner Avenue in the City of Lake Elsinore. The site is vacant land. The proposed
acquisition is for the entire site (total taking).
Ca) BCr.(a?30050B89 Attachment No. 1 to Exhibit A
2
Legal Description and Ownership
APN 374-162-039, 041, 043, 045, 047, 049, 051, 053, 055, 057, 059 and 061 is under the
ownership of the Redevelopment Agency of the City of Lake Elsinore. The legal description
(from the Assessor's Office) is:
Portion of Lots 1, 3, 5, 7, 9, 11, 13, 15, 17, 19, 21 and 23, Block 51 of Heald's resubdivision of
blocks 51 and 54-86 of Elsinore as shown by map on file in Book 8 page 378 of maps, San
Diego County Records.
(,,Wlfi��3oo5ons9 Attachment No. 1 to Exhibit A
A notary public or other officer completing this
certificate verifies only the identity of the individual
who signed the document to which this certificate is
attached, and not the truthfulness, accuracy, or
validity of that document.
STATE OF CALIFORNIA
County of
In
before me,
Notary Public, personally appeared who proved to me on
the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the
within instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or
the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct
WITNESS my hand and official seal.
Signature of Notary
(4I1CL�,300S0n89
(Affix seal here)
A notary public or other officer completing this
certificate verifies only the identity of the individual
who signed the document to which this certificate is
attached, and not the truthfulness, accuracy, or
validity of that document.
STATE OF CALIFORNIA
County of
On
before me,
Notary Public, personally appeared who proved to me on
the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the
within instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or
the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct
WITNESS my hand and official seal.
Signature of Notary
a.BC1_@30050B89
(Affix seal here)
A notary public or other officer completing this
certificate verifies only the identity of the individual
who signed the document to which this certificate is
attached, and not the truthfulness, accuracy, or
validity of that document.
STATE OF CALIFORNIA )
County of )
On
before me,
Notary Public, personally appeared who proved to me on
the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the
within instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or
the entity upon behalf of which the person(s) acted, executed the instrument.
1 certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct
WITNESS my hand and official seal.
Signature of Notary
(r7BCLCa)300501389
(Affix seal here)
ATTACHMENT NO. 2
to
EXHIBIT "A"
CERTIFICATE OF ACCEPTANCE
Government Code, Section 27281
THIS IS TO CERTIFY that the CITY OF LAKE ELSINORE, a California municipal
corporation, acting through the Lake Elsinore City Council, hereby accepts for public purposes
the real property, or interest therein, conveyed by Grant Deed executed by the SUCCESSOR
AGENCY OF THE REDEVELOPMENT AGENCY OF THE CITY OF LAKE ELSINORE, a
public body, corporate and politic and dated 2017 and consents to the
recordation thereof.
IN WITNESS WHEREOF, 1 have hereunto set my hands and affixed the City's official seal, this
day of
CITY OF LAKE ELSINORE,
a municipal corporation
@NnC1,,4 300501389 Attachment No. 2 to Exhibit A
A notary public or other officer completing this
certificate verifies only the identity of the individual
who signed the document to which this certificate is
attached, and not the truthfulness, accuracy, or
validity of that document.
STATE OF CALIFORNIA
County of
On , before me, a
Notary Public, personally appeared who proved to me on
the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the
within instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or
the entity upon behalf of which the persons) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct
WITNESS my hand and official seal.
Signature of Notary
@aCr.�300501389
(Affix seal here)
EXHIBIT "B"
SELLER'S CERTIFICATION OF NON -FOREIGN STATUS
FIRST AMERICAN TRUST
To inform the CITY OF LAKE ELSINORE, a California municipal corporation
("Transferee") that withholding of tax under Section 1445 of the Internal Revenue Code of 1986,
as amended ("Code") will not be required upon the transfer of certain real property described as
Assessor's Parcel Nos. 374-062-005; 374-062-006; 374-062-015; [374-062-020]; 374-162-039;
374-162-041; 374-162-043; 374-162-045; 374-162-047; 374-162-049; 374-162-051; 374-162-
053; 374-162-055; 374-162-057; 374-162-059; 374-162-061 located in the City of Lake
Elsinore, California to the Transferee by the SUCCESSOR AGENCY TO THE
REDEVELOPMENT AGENCY OF THE CITY OF LAKE ELSINORE, a public body,
corporate and politic ("Transferor"), the undersigned hereby certifies the following:
I/we am/are not a nonresident alien for purposes of United States income taxation;
2. My/our United States taxpayer identifying number (Social Security Number) is
My/our address is
Transferor understands that this Certification may be disclosed to the Internal Revenue
Service by the Transferee and that any false statement contained herein could be punished by
fine, imprisonment, or both.
Under penalty of perjury, I/we declare that I/we have examined this Certification and to
the best of imy/our knowledge and belief it is true, correct, and complete, and we further declare
that I/we have authority to sign this document on behalf of the Transferor.
Dated:
"TRANSFEROR"
SUCCESSOR AGENCY TO THE
REDEVELOPMENT AGENCY OF THE
CITY OF LAKE ELSINORE, a public body,
corporate and politic
By:
Its:
(encL(,3ao5on89 Exhibit "B"
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SUCcESSOR AGENCY PROP ,
Agenda Date: 1/24/2017
In Control: City Council
Agenda Number: 11)
City of Lake Elsinore
Text File
File Number: ID# 17-054
130 South Main Street
Lake Elsinore, CA 92530
w .lake-elsinore,org
Version: 1 Status: Consent Agenda
File Type: Report
City of Lake Elsinore Page 1 Printed on 111912017
CITY OF
LAKE LS11.10KE
DREAM FXTRF".MF
M
Report to City Council
To: Honorable Mayor and Members of the City Council
From: Grant Yates, City Manager
Prepared by: Barbara Leibold, City Attorney
Date: January 24, 2017
Subject: Settlement Agreement (Pardee Homes)
Recommendation
Authorize the City Manager to execute the Settlement Agreement among the City, CFD No.
2003-2, CFD No. 2016-2 and Pardee Homes.
Background
A dispute arose between the Western Piverside Council of Governments ("WRCOG") and the
City in connection with WRCOG's audit of the City's collection of Transportation Uniform
Mitigation Fees ("TUMF") related to specific developments within the City of Lake Elsinore.
Pardee's Canyon Hills project was among the "disputed projects." The parties agreed to
submit the matter to non-binding arbitration and have actively engaged in settlement
negotiations. On January 10, 2017, the City Council approved the Settlement and Release
Agreement between the City and WRCOG.
Discussion
The Settlement Agreement with Pardee Homes is the second part of the resolution of the
dispute regarding the collection and payment of TUMF fees. Under the proposed Settlement
Agreement, Pardee shall be responsible for the payment of TUMF within Canyon Hills as of
January 10, 2017 and shall fully satisfy the entire remaining TUMF obligation for Canyon Hills
through the initial funding and construction of all or a portion of the following TUMF
Improvements:
(i) improvements to Camino del Norte consisting generally of 4 lanes of
street, curb, gutter, right of way acquisition and other per SCES Engineering design plans, as
more specifically described in Exhibit A to this Agreement;
(ii) widening of Railroad Canyon Road to three lanes each direction from
the 1-15 Interchange to the City limits at Canyon Lake, including all costs of design and
engineering, curb and gutter as to be mutually agreed to by the parties and as more specifically
described in Exhibit B to this Agreement, and
Purchase of Properties for Affordable Housing Purposes
January 24, 2017
Page 2
(iii) extension of Camino del Norte from Old Franklin Bridge where it begins
as Canyon Estates Drive and realigns as an extension of Camino Del Norte towards
Summerhill Drive to where it blends in by the temporary storage business per SCES
Engineering design plans, as more specifically described in Exhibit C to this Agreement.
In consideration of Pardee's obligation to provide the initial funding for, and manage the
construction of the specified TUMF Improvements, the City and Pardee will enter into a TUMF
Credit Agreement for these TUMF Improvements consistent with the TUMF Administrative
Plan..
Fiscal Impact
The Settlement Agreement provides a mechanism for Pardee Homes to construct $6,751,391
in TUMF eligible improvements and delivers those to the City to satisfy their remaining TUMF
obligation.
Exhibit
A- Settlement Agreement
SETTLEMENT AGREEMENT
']'his SETTLEMENT AGREEMENT ("Agreement") is made and effective this 10th day
of January, 2017 ("Effective Date"), by and among the CITY OF LAKE ELSINORE, a
municipal corporation organized and existing under the laws and Constitution of the State of
California ("City"), COMMUNITY FACILITIES DISTRICT NO. 2003-2 OF THE CITY ("CFD
No. 2003-2"), a community facilities district created in accordance with Section 53311 et. seq. of
the Government Code of the State of California (the "Mello -Roos Act"), COMMUNITY
FACILITIES DISTRICT NO. 2016-2 OF THE CITY ("CFD No. 2016-2"), a community
facilities district created in accordance with the Mello -Roos Act, and PARDEE HOMES, a
California corporation ("Pardee") (collectively, the "Parties," and individually, a "Party").
RECITALS
A. Pardee is the master developer of a master -planned community in the City
commonly referred to as "Canyon Hills." Canyon Hills is located within Improvement Areas A,
B, C and D of CFD No. 2003-2. A portion of Canyon Hills referred to as "Phase 8," which is
included in Improvement Area B, is also included in CFD No. 2016-2.
B. The Canyon Hills property is subject to a Development Agreement between the
City and Pardee's predecessor -in -interest, Pardee-Grossman/Cottonwood Canyon, recorded with
the Riverside Comity Recorder on July 19, 1990 as Document No. 265632, as amended by a
First Amendment to Development Agreement between the City, Pardee and Richmond American
::Homes of -Maryland, Inc. recorded with the Riverside County Recorder or. r,-+ nary 19-,,2010 as
Document No. 2010-0078164 (together, the "Development Agreement").
C. The City and Pardee entered into a Funding, Construction and Acquisition
Agreement dated as of February 1, 2004 with respect to CFD No. 2003-2 (the "Funding
Agreement") and also entered into a Joint Community Facilities Agreement with Elsinore Valley
Municipal Water District ("EVMWD") dated as of January 13, 2004 (the "JCFA") with respect
to the financing of "EVMWD Charges" and "Acquisition Facilities" (as defined in the JCFA)
through CFD No. 2003-2.
D. In 2016, the City, at Pardee's request, completed proceedings to annex certain
property into CFD No. 2003-2 that is adjacent to Canyon Hills, which property now is included
in Improvement Area E of CFD No. 2003-2.
E. On December 13, 2016, the City, at Pardee's request, completed proceedings to
establish CFD No. 2016-2 encompassing Phase 8 of Canyon Hills.
F. The City has issued bonds of CPD No. 2003-2 ("CFD No. 2003-2 Bonds") for
Improvement Areas A, B, C and D. There is additional authorized indebtedness available for the
issuance of up to $7,975,000 in principal amount of additional CFD No. 2003-2 Bonds for
Improvement Area B and $3,000,000 in CFD No. 2003-2 Bonds for Improvement Area E.
G. CFD No. 2016-2 is expected to have capacity for the issuance of up to
$19,000,000 in bonds (the "CPD No. 2016-2 Bonds"), the proceeds of which will be available to
0 168386 0 40002 12/19/2016
(i) repay the outstanding indebtedness of CFD No. 2003-2 Bonds and satisfy the CFD No.
2003-2 special tax obligation with respect to all property within Phase 8, and (ii) fund authorized
facilities of CFD No. 2016-2.
H. The Western Riverside Council of Governments ("WRCOG") has commenced
enforcement proceedings and investigations (the "Action") against the City in connection with a
dispute over the City's collection of Transportation Uniform Mitigation Fees ("TUMF") related
to development occurring within Canyon Hills. The Action has resulted in the City having to
consent to that certain Memorandum of Agreement ("MOA") in which City and WRCOG have
engaged in a voluntary non-binding arbitration (the "Arbitration"). Pardee is neither a party to
the MOA nor the Arbitration and is not bound by nor involved in either. The MOA, among other
things, provides that at the conclusion of the non-binding arbitration, either the City or WRCOG
may elect to file an action in Superior Court seeking a declaration, among other things, as to
whether the development occurring within Canyon Hills is exempt from TUMF (the "Future
Litigation"). Because Pardee continues to own property within Canyon Hills, Pardee is an
interested party in such Future Litigation.
L WRCOG asserts that the City owes past due TUMF relating to building permits
issued by the City in connection with Canyon Hills. The City and Pardee dispute WRCOG's
position and maintain that no such TUMF are due in connection with past or future building
permits for Canyon Hills. In order to resolve various uncertainties related to the outcome of the
Action, Arbitration and Future Litigation, the City and Pardee entered into a Cooperation
Agreement as of October 1, 2015 (the "Cooperation Agreement") which set forth the allocation
of TUMF responsibility among the City and Pardee, depending on the outcome of the Action,
Arbitration or Future Litigation and pursuant to which Pardee has he;en tender4ag payment of
TUMF within Canyon Hills under protest. The City and Pardee also entered into a Joint Defense
Agreement as of July 15, 2015 (the ",Joint Defense Agreement") relating to the Future Litigation.
J. In order to assist the City with its settlement with WRCOG of the Action,
Arbitration and Future Litigation and in settlement of Pardee's claims against the City relating to
TUMF, including, without limitation, the TUMF Recovery Litigation (as defined in the
Cooperation Agreement) (the "Pardee Claims") and any claims the City may have against Pardee
relating to the payment of TUMF for Canyon Hills, the Action, Arbitration and Future Litigation
(the "City Claims"), the City and Pardee now desire to enter into this Agreement.
K. Without any admissions of any type or nature concerning the Pardee Claims and
City Claims, the Parties hereby desire to resolve the dispute and to settle and compromise the
Pardee Claims and City Claims upon the terms and conditions hereinafter set forth solely in
order to avoid the risk, expense and uncertainty of litigation.
AGREEMENT
NOW, THEREFORE, in consideration of the covenants and conditions contained herein
and for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties agree as follows
11168386v5 4000.2 12/19/2016 2
I. Recitals Incorporated. The Recitals set forth above are incorporated by this
reference as though fully set forth herein.
2. Satisfaction of TUMF Obligation.
a. Satisfaction of TUMF Prior to Effective Date. Notwithstanding anything in
the Cooperation Agreement to the contrary, City shall assume all obligations for TUMF that are
claimed owing by WRCOG with respect to any development within Canyon Hills prior to the
Effective Date. Within thirty (30) days following City's and Pardee's execution of the "TUMF
Credit Agreement" described in Section 2.e. below, City shall return to Pardee all TUMF paid
under protest by Pardee prior to the Effective Date.
b. Satisfaction of TUMF on and following Effective Date. Pardee shall be
responsible for the payment of TUMF within Canyon Hills on and following the Effective Date
and shall fully satisfy the entire remaining TUMF obligation for Canyon Hills through the initial
funding and construction of all or a portion of the "TUMF Improvements," as defined in, and
pursuant to Section 3 below. Consequently, all TUMF paid under protest for Canyon Hills prior
to the Effective Date shall be returned to Pardee as provided in Section 2.a. above and no TUMF
shall be required to be paid following the Effective Date.
C. TUMF Credit Agreement. In consideration of Pardee's obligation to provide
the initial funding for, and manage the construction of the TUMF Improvements pursuant to this
Agreement, within thirty (30) days following the Effective Date, the City and Pardee shall enter
into a TUMF Credit Agreement with respect to the TUMF Improvements in the form set forth in
WRCOG's TUMF Administrative Plan subject to those changes necessary to conform to the
terms of this Agreement.
3. Funding and Construction of TUMF Improvements.
a. Scope of TUMF Improvements. The TUMF Improvements shall consist of
the following:
(i) improvements to Camino del Norte consisting generally of 4 lanes of
street, curb, gutter, right of way acquisition and other per SCES Engineering design plans, as
more specifically described in Exhibit A to this Agreement (the "Camino del Norte
Improvements");
(ii) widening of Railroad Canyon Road to three lanes each direction from the
1-15 Interchange to the City limits at Canyon Lake, including all costs of design and engineering,
curb and gutter as to be mutually agreed to by the parties and as more specifically described in
Exhibit B to this Agreement (the "Railroad Canyon Road Improvements"); and
(iii) extension of Camino del Norte from Old Franklin Bridge where it begins
as Canyon Estates Drive and realigns as an extension of Camino Del Norte towards Summerhill
Drive to where it blends in by the temporary storage business per SCES Engineering design
plans, as more specifically described in Exhibit C to this Agreement (the "Camino del Norte
Extension").
4168386 v5 40002 12/19/2016
If by reason of permitting, design or engineering issues the construction of the foregoing TUMF
Improvements becomes impractical or prohibitive, or if the costs will exceed the Funding Cap
(defined below), the Parties agree to cooperate in good faith to identify and agree upon substitute
TUMF-eligible improvements provided the total costs to be incurred by Pardee for the TUMF
Improvements and substitute improvements will not exceed the Funding Cap.
b. Construction of TUMF Improvements. Subject to (i) the City's acquisition
and receipt of all necessary rights-of-way, easements, licenses, permits and approvals required
for the construction of the applicable TUMF Improvement, (ii) the City's approval of the plans
and specifications for the applicable TUMF Improvement, (iii) the City's and Pardee's execution
of the TUMF Credit Agreement, and (iv) the City's and Pardee's execution of the Funding
Agreement Amendment (defined below), Pardee shall solicit bids for the construction of the
TUMF Improvement and award the construction contract(s) for the TUMF Improvement in
accordance with the same bidding and contracting requirements that would apply to the City if it
were to award such contract(s). The City and Pardee will endeavor to commence construction of
each TUMF Improvement in accordance with the following performance schedule:
TUMF hnprovemenC Commence Construction
Camino del Norte Improvements By the end of 2017
Railroad Canyon Road Improvements Within 180 days following execution of TUMF
Credit Agreement
Camino del Norte Extension IBy the end of 2017
Each TUMF Improvement will be constructed in accordance with a construction schedule to be
included in the applicable construction contract(s).
C. Reimbursement of Actual Costs of TUMF Improvements. Pardee agrees to
provide the initial funding for all "Actual Costs" (as defined in the Funding Agreement) of the
TUMF Improvements, not to exceed $6,751,391 (the "Funding Cap"). In connection with the
construction of the TUMF Improvements, Pardee shall not charge the City for construction
management or general contractor feesfor constructing or managing the construction and/or
design and engineering of the TUMF Improvements. Under no circumstances, and
notwithstanding anything in this Agreement or the TUMF Credit Agreement to the contrary,
shall Pardee be required to incur Actual Costs for the TUMF hnprovements in excess of the
Funding Cap. If Pardee determines at any time based upon Actual Costs incurred to date and
estimated Actual Costs to be incurred that the total Actual Costs of the TUMF Improvements
will exceed the Funding Cap, Pardee shall provide written notice to City describing such
estimated Actual Costs. Upon City's receipt of such written notice, the City and Pardee shall
schedule a meeting to discuss the information and mutually determine whether there are
reductions in the scope of work for the TUMF Improvements that may be made, or substitute
TUMF-eligible improvements that can be identified in order to remain within the Funding Cap.
All Actual Costs incurred by Pardee for the TUMF Improvements shall be reimbursed by the
City according to the following process:
#168386v5 40002 12/19/2016 4
(i) Pardee may submit monthly invoices to the City for reimbursement of
Actual Costs incurred by Pardee relating to a TUMF Improvement that are not construction
costs. Such invoices shall include copies of the bills or invoices received by Pardee from third
parties evidencing the Actual Costs. Such invoices from Pardee shall be paid by the City within
thirty (30) days of receipt.
(ii) Pardee may submit periodic invoices to the City for reimbursement of
Actual Costs incurred by Pardee pursuant to the construction contract(s) for a TUMF
Improvement in accordance with the applicable construction contract, including all change
orders. Such invoices from Pardee shall be paid to Pardee by the City within thirty (30) days of
receipt.
(iii) All change orders under any construction contract for a TUMF
Improvement shall be approved by the City Manager.
4. Special Taxes and Bonds of CFD Nos. 2003-2 and 2016-2.
a. Within thirty (30) days following the Effective Date, the City and Pardee shall
enter into an amendment to the Funding Agreement (the "Funding Agreement Amendment') to
add CFD No. 2016-2 and Improvement Area E of CFD No. 2003-2 to the Funding Agreement so
as to permit the funding of the eligible facilities and fees with the special taxes of CFD No.
2016-2 and Improvement Area E collected prior to the issuance of Bonds and the proceeds of the
CPD No. 2016-2 Bonds and CFD No. 2003-2 Bonds issued for Improvement Area E. With the
approval of EVMWD, the City and Pardee also agree to amend the JCFA to include CfD No.
2016-2 and Improvement Area E. After the issuance of bonds for CFD No. 2016-2 or
Improvement Area E, as applicable, the City shall be entitled to retain the proceeds of any
special taxes not required to pay debt service on bonds from CFD No. 2016-2 or Improvement
Area E, as applicable.
b. The City shall proceed with the issuance of a principal amount of $7,975,000 in
CFD No. 2003-2 Bonds for Improvement Area B as soon as reasonably possible following the
Effective Date. Such CFD No. 2003-2 Bonds shall be issued with a premium in order to
maximize the available amount of net proceeds. Of the proceeds of such CFD No. 2003-2 Bonds
remaining after funding the reserve fund, costs of issuance and capitalized interest, if any, the
first $6,800,000 shall be available to fund Fees and Public Facilities in accordance with the
Funding Agreement, as amended, and all amounts in excess of the first $6,800,000 shall be
available to the City for eligible facilities.
C. As soon as reasonably possible following the buildout of all residential property
within CFD No. 2016-2, the City shall proceed with the issuance of the CFD No. 2016-2 Bonds
in an estimated par amount of $19,000,000. Of the proceeds of the CPD No. 2016-2 Bonds
remaining after funding the reserve fund, costs of issuance and the amount necessary to pay,
repay or defease the obligation to pay, or any indebtedness secured by the CFD No. 2003-2,
Improvement Area B special tax for all property within CFD No. 2016-2, the first $4,000,000
shall be available to fund Fees and Public Facilities in accordance with the Funding Agreement,
9168386 v5 4000.2 12/19/2016 5
as amended, and all amounts in excess of the first $4,000,000 shall be available to the City for
eligible facilities.
5. Release of All Pardee Claims by Pardee. Except for the warranties provided in
this Agreement as well as covenants and obligations created by this Agreement, Pardee, on behalf
of itself and its officers, successors, affiliates, agents, attorneys and assigns, forever releases and
discharges the City, and their respective officers, successors, affiliates, agents, attorneys and
assigns from any and all claims, demands, disputes, damages, liabilities, actions, causes of action,
and other rights to relief, both legal and equitable, of every kind and nature, whether known or
unknown, past or present, which Pardee has, had or may have against any one or more of the City,
arising out of or related in any way to the Pardee Claims. The foregoing release is expressly
conditioned upon the occurrence of each of the following events (the "Pardee Release
Conditions"):
a. The formation of CFD No. 2016-2 and the City's and Pardee's execution of the
Funding Agreement Amendment and the amendment to the JCFA described in
Section 4.a. above; and
The execution of a TUMF Credit Agreement as described in Section 2.c. above.
In the event that any of the foregoing Pardee Release Conditions fail to occur, the release
contained in this section shall be deemed void ab initio.
6. Release of All City Claims by City. Except for the warranties provided in this
Agreement as well as covenants and obligations created by this Agreement, Citv, on behalf of
itself CFD No. 2003-2 and CFD No. 2016-2, its officers, successors, affiliates, agents, attorneys
and assigns, forever releases and discharges Pardee and its officers, successors, affiliates, agents,
attorneys and assigns from any and all claims, demands, disputes, damages, liabilities, actions,
courses of action, and other rights of relief, both legal and equitable, of every kind and nature,
whether known or unknown, past or present, which City has had, or may have, against the City,
arising out of or related to the City Claims. The foregoing release is expressly conditioned upon
the occurrence of each of the following events (the "City Release Conditions"):
a. The earlier of (i) the completion and dedication of the TUMF Improvements or
(ii) Pardee's submittal of invoices to the City in a total amount equal to the
Funding Cap; and
b. The execution of a TUMF Credit Agreement as described in Section 2.c. above
7. Waiver of Civil Code Section 1542. Pardee and City, each on behalf of itself and
its officers, successors, affiliates, agents, attorneys and assigns, expressly waives all rights they
may have, or claim to have, under the provisions of Civil Code Section 1542 which provides in
relevant part:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER
FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN
#168386v5 40002 12/192016
BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER
SETTLEMENT WITH THE DEBTOR."
S. Default. Failure by either party to perform any material action or covenant
required by this Agreement within the time periods provided herein following notice and failure
to cure as described hereafter, constitutes a "Default" under this Agreement. A party claiming a
Default shall give written notice of Default to the other party specifying the Default complained
of. Except as otherwise expressly provided in this Agreement, the claimant shall not institute
any proceeding against any other party, and the other party shall not be in Default, if such party
within thirty (30) days from receipt of such notice cures such default, or if the nature of such
Default is such that it cannot reasonably be cured within such thirty (30) day period, then the
claimant shall not institute any proceeding against any other party, and the other party shall not
be in Default, if such party shall, with due diligence, commence to cure, correct or remedy such
failure or delay and shall complete such cure, correction or remedy with diligence, as soon as
reasonably possible.
9. Dispute Resolution and Mediation. The Parties agree that differences of opinion
regarding the obligations of the Parties under this Agreement shall be discussed as soon as
practically possible following awareness of a conflict. Before commencing any legal action, the
Parties shall attempt early resolution of conflicts through mediation administered through the
rules and procedures of the American Arbitration Association. The Parties agree that
documented willingness to participate in mediation is a condition precedent of any later legal
action.
10. Notices. Any document or notice requited "or permitted under this Agreement shall
be in writing and shall be deemed duly delivered if delivered or addressed as set forth below:
(a) Upon personal delivery; or (b) as of the third day after depositing such document or notice in
the United States mail, certified mail, return receipt requested, postage prepared; or (c) as of the
first business day after depositing such notice with a nationally recognized overnight courier
services expenses prepaid. All documents and notices shall be addressed as follows:
To the City:
With a Copy to:
City of Lake Elsinore, CFD No. 2003-2 Leibold, McClendon & Mann
and CFD No. 2016-2 9841 Irvine Center Drive, Suite 230
130 South Main Street Irvine, CA 92618
Lake Elsinore, CA 92530 Attention: Barbara Leibold
Attention: City Manager, City Clerk
4168396 v5 40002 12/19/2016
To Pardee:
Pardee Homes
1250 Corona Pointe Court, Suite 600
Corona, CA 92879
Attention: Mike Taylor, Jeff Chambers
With a Copy to:
O'Neil LLP
19900 MacArthur Blvd., Suite 1050
Leine, CA 92612
Attention: John P. Yeager, Esq.
11. No Assignment of Rights. Pardee represents and warrants that it is the true holder
of all rights and remedies released by this Agreement, and that it has not assigned not, transferred
any of those rights or remedies to any other individual or entity.
12. Exclusive Remedy. By executing this Agreement, the parties agree that, except as
otherwise stated herein, the rights and remedies provided in this Agreement shall be the sole and
exclusive rights and remedies surviving as between them relating to the Claims.
13. Authority to Execute. By signature below, each signatory signifies that he or she
is an authorized signatory of the Party on behalf of whom he or she executes this Agreement.
14. Duplicate Originals. This Agreement may be signed in counterparts and the
executed counterparts thereof shall together form the executed Agreement. A copy of a fully
executed counterpart of this Agreement, including an electronic or facsimile transmission of a
fully executed counterpart, may serve as an original, fully executed counterpart.
15. Governing Law. This Agreement is entered into in the State of California and is
governed by the laws of the State of California
16. No Admission of Liability. The Parties agree that neither the execution of this
Agreement nor the terms of the Agreement shall be construed as an admission of liability by any
Party or an admission of any claim against a Party.
17. No Representation by Parties. This Agreement contains the sole and entire
agreement and understanding of the Parties with respect to the entire subject matter of the
Agreement, and any and all prior discussions, negotiations, commitments, or understandings
related to this Agreement, if any, are merged in this Agreement. No representations, oral or
otherwise, express or implied, other than those contained in this Agreement, have been or shall
be deemed to have been made by any Party. No other agreement shall be deemed to exist or to
bind the Parties with respect to the subject matter of this Agreement.
18. Amendments/Modifications. No provision of this Agreement may be amended or
modified except by a writing executed by each Party.
19. Successors. This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and to their respective heirs, executors, administrators, successors and
permitted assigns.
20. No Third Party Beneficiaries. ]'here shall be no third party beneficiaries of this
9168386v5 40002 12/19/2016
Agreement
21. Headings. The headings of the paragraphs of this Agreement are inserted solely for
convenience of reference and are not a part of and are not intended to govern, limit or aid in the
construction of any terms or provision hereof.
22. No Waiver. Failure or delay on the part of the Parties to enforce any right,
power, or privilege under this Agreement shall not be deemed to constitute a waiver of such
right, power, or privilege, or of any other right, power, or privilege.
23. Provisions Equally Construed. This Agreement was drafted by the mutual
enterprise of the Parties and shall not be construed in favor of or against any party, but shall be
construed equally as to both parties.
24. Consultation with Counsel. The undersigned hereto declare and represent that
each has had the opportunity to consult with legal counsel of their own choosing concerning the
advisability of entering into this Agreement; that they have read and understood the contents of
this Agreement; and that they execute the same of their own free will. Each party's attorney has
reviewed this Agreement and has approved this Agreement as to form and substance.
25. Force Majeure. Whenever performance is required of a Party hereunder, that
Party shall use all due diligence and take all necessary measures in good faith to perform, but if
completion of performance is delayed by reasons of floods, earthquakes, inclement weather or
other acts of God, war, civil commotion, riots, strikes, acts of terrorism, picketing, other labor
disputes, damage to work in progress by casualty, government shutdowns, moratoria or other
restrictive laws or regulations, or the acts, omissions or breach of agreement by the other Party to
this Agreement or its agents, contractors or subcontractors, or by other cause beyond the
reasonable control of the Party (financial inability excepted), then the specified time for
performance shall be extended by the amount of the delay actually so caused.
26. Termination of Cooperation Agreement and Joint Defense Agreement. Upon
the Effective Date, both the Cooperation Agreement and Joint Defense Agreement shall be
deemed terminated by the Parties; provided, however, any amounts due and payable by Pardee to
the City pursuant to Section 2.13 of the Joint Defense Agreement as of the Effective Date shall
remain due and payable.
[Signature Page Follows]
#1683860 4000.2 12/19/2016
CITY OF LAKE ELSINORE
By:
City Manager
ATTEST:
By:
City Cleric
PARDEE HOMES, a California corporation
By: Mike Taylor
Division President
APPROVED AS TO FORM:
O'NEIL LLP
COMMUNITY FACILITIES DISTRICT
NO. 2003-2 OF THE CITY OF LAKE
ELSINORE
By:
City Manager
COMMUNITY FACILITIES DISTRICT
NO. 2016-2 OF THE CITY OF LAKE
ELSINORE
By:
City Manager
APPROVED AS TO FORM:
By: John P. Yeager, Esq, By:
Attorneys for Pardee
9168386v5 40002 12/19/2016 10
EXHIBIT A
Detailed Scope of Camino del Norte Improvements
#168386v5 4000.2 12/19/2016 A-7
EXHIBIT B
Detailed Scope of Railroad Canyon Road Improvements
N16E386v5 40002 12/19/2016 B-1
EXHIBIT C
Detailed Scope of Camino del Norte Extension
111683860 40002 12/19/2016 C-1
t4h—"t;till'iC71�1;
'.,11..1...,1...,,
Agenda Date: 1/24/2017
In Control: City Council
Agenda Number: 12)
City of Lake Elsinore
Text File
File Number: ID# 17-055
Version: 1
130 South Main Street
Lake Elsinore, CA 92530
w .lake-elsinore.org
Status: Approval Final
File Type: Report
City of Lake Elsinore Page 1 Printed on 1119/2017
CITY OF
LADE ,LSII`IOI,E
DREAM EXTREME
REPORT TO CITY COUNCIL
To: Honorable Mayor and Members of the City Council
From: Grant Yates, City Manager
Prepared by: Brad Fagrell, City Engineer
Date: January 24, 2017
Subject: State Relinquishment of Route 74 between Interstate 15 and Mauricio
Avenue
Recommendation
adopt A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE,
CALIFORNIA, CONSENTING TO THE RELINQUISHMENT OF A PORTION OF ROUTE 74,
TO THE CITY OF LAKE ELSINORE, FROM INTERSTATE 15 TO MAURICIO AVENUE AT
THE EASTERNMOST CITY LIMITS, AS AUTHORIZED BY ASSEMBLY BILL NO. 1915 (2008),
AND TO WAIVE THE 90 -DAY NOTIFICATION PERIOD PURSUANT TO STREETS AND
HIGHWAYS CODE SECTION 73; and,
adopt A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE,
CALIFORNIA, DECLARING SUPPORT OF THE JOINT RELINQUISHMENT OF AN
ADJOINING PORTION OF ROUTE 74, TO THE COUNTY OF RIVERSIDE, FROM THE
EASTERNMOST LAKE ELSINORE CITY LIMITS AT MAURICIO AVENUE TO 7TH STREET AT
THE WESTERLY LIMITS OF THE CITY OF PERRIS, AS AUTHORIZED BY ASSEMBLY BILL
NO. 218 (2015); and,
adopt A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE,
CALIFORNIA, PURSUANT TO STREETS AND HIGHWAYS CODE SECTION 1806 (b),
DECLARING ITS INTENT TO ACCEPT INTO THE CITY STREET SYSTEM THOSE
PORTIONS OF ROUTE 74 RIGHT-OF-WAY, RELINQUISHED TO THE CITY OF LAKE
ELSINORE BY THE CALIFORNIA TRANSPORTATION COMMISSION, UPON
RECORDATION OF THE COMMISSION'S RESOLUTION FINALIZING SAID
RELINQUISHMENT IN ACCORDANCE TO AB 1915 (2008); and,
adopt A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE,
CALIFORNIA, DECLARING AN INTENT TO ACCEPT INTO THE CITY STREET SYSTEM
THOSE PORTIONS OF ROUTE 74 RIGHT-OF-WAY, JOINTLY RELINQUISHED BY THE
COMMISSION TO THE COUNTY OF RIVERSIDE IN ACCORDANCE TO AB 218 (2015), AND
SUBSEQUENTLY DETERMINED BY THE BOARD OF SUPERVISORS OF SAID COUNTY,
TO BE UNNECESSARY FOR COUNTY HIGHWAY PURPOSES, AND THUS CONVEYED TO
THE CITY OF LAKE ELSINORE PURSUANT TO GOVERNMENT CODE SECTION 25365;
and,
State Relinquishment of Route 74 between Interstate 15 and Mauricio Avenue
Page 2 of 3
adopt A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE,
CALIFORNIA, PURSUANT TO STREETS AND HIGHWAYS CODE SECTION 1806 (b),
ACCEPT INTO THE CITY STREET SYSTEM, THOSE PORTIONS OF RELINQUISHED
ROUTE 74 RIGHT-OF-WAY, CONVEYED TO THE CITY OF LAKE ELSINORE BY THE
BOARD OF SUPERVISORS OF THE COUNTY OF RIVERSIDE, UPON NOTIFICATION
THEREOF BY THE CLERK OF SAID BOARD OF SUPERVISORS, PURSUANT TO
GOVERNMENT CODE SECTION 6061; and,
Background
Assembly Bill ("AB") 1915, enacted by the California Legislature in 2008, amended Streets and
Highways Code Section 374 to authorize the California Transportation Commission ("CTC") to
relinquish to the City of Lake Elsinore portions of Route 74 located within the city's municipal
boundaries. However, subsequent efforts by CalTrans and the City reached an impasse in 2010
that remains unresolved.
AB 1915 (2008), amending Section 374 also authorized the CTC to relinquish to the City of
Perris ("Perris"), portions of Route 74 located within Perris' city limits. This relinquishment has
been completed and Route 74, from Interstate 215 (1-215) at Redlands Avenue to 7th Street at
the westerly Perris city limits, is now under local control.
In 2015, Section 374 was again amended by AB 218 to authorize the CTC to relinquish to the
County of Riverside ("County'), additional portions of Route 74 falling within unincorporated
County territory, between the cities of Lake Elsinore and Perris.
- Discussion
This recent change to Section 374 provided an opportunity for the County to collaborate with
Lake Elsinore to extend the local authority currently benefitting Perris, further west along the
County and City portions of Route 74 to Interstate 15 (1-15). (See Exhibit A.) The transfer of
Route 74 to the local control of the County and Lake Elsinore will facilitate the joint study and
ultimate development of a upgraded transportation corridor currently under consideration
between 1-15 and 215. Staff believes that development of a modern transportation corridor
between the 1-215 and 1-15 is a critical element to continuing economic growth in the City. The
relinquishment of the remaining sections to the City and the County, respectively, will place that
decision-making process squarely at the local level.
Local authority may be obtained by seeking the CTC's approval of relinquishment of these
adjoining segments of Route 74 to the County and Lake Elsinore, as authorized by AB 1915 and
AB 218
Discussions between Lake Elsinore, the County, and CalTrans have led to the preparation of a
relinquishment agreement, which is required as part of the CTC's approval of the relinquishment
to both Lake Elsinore and the County. The City Council's approval of the Resolutions as
recommended will document the Council's support and consent for joint relinquishment of Route
74 in conformance to AB 1915 and AB 218. Once executed, the relinquishment agreement will
serve as an attachment to the relinquishment agenda package that CalTrans will submit to the
CTC for action. The relinquishment payment to be made to the City is expected to be
$2,200,000.
Assuming approval by the CTC, the CTC's Relinquishment Resolution of Approval will be
recorded by the County Recorder's Office.
State Relinquishment of Route 74 between Interstate 15 and Mauricio Avenue
Page 3 of 3
The CTC resolution, in addition to providing for the relinquishment, will also provide for a more
symmetrical jurisdictional boundary that will positively impact the delivery of maintenance and
operational services of both Lake Elsinore and the County. Within the R/W segment defined by
Cambern Avenue and Rachel Way, the Route 74 highway centerline once coincided with the
shared Lake Elsinore/County jurisdictional boundary. Highway widening and realignment of
Route 74, completed in 2006 by the Riverside County Transportation Commission (RCTC) in a
Lead Agency role, separated this shared highway centerline -jurisdictional boundary. (See
Exhibit A.)
To achieve a more logical distribution of relinquished Route 74 RNV, between 1-15 and the
easternmost Lake Elsinore city limits near Mauricio Avenue, the County will consider
transferring to Lake Elsinore, the County's interests in that real property.
Accordingly, the County will consider a resolution documenting the County intent to convey fee
simple and permanent easement interest in this portion of Route 74 RNV (which will first be
relinquished to the County by the CTC as authorized by AB 218), to the City of Lake Elsinore.
Fiscal Impact
Increased costs to the City of Lake Elsinore for highway maintenance and operational services
are expected to result for those portions of relinquished Route 74 RNV adopted into the city
street system pursuant to Streets and Highways Code Section 1806 (b). However, the
relinquishment payment to be made to the City by the state in the amount of $2,200,000, is
consistent with negotiations and is considered sufficient to offset expenses incurred by the City.
Alternatives
1) Upon recordation of the CTC's resolution finalizing the relinquishment of Route 74, and
pursuant to Streets and Highways Code Section 1810, adopt a resolution declaring an intent
to purchase or acquire from the County portions of relinquished Route 74 RNV determined
to be necessary for city street purposes.
2) Upon recordation of the CTC's resolution finalizing the relinquishment of Route 74, and
pursuant to Streets and Highways Code Section 1807, adopt a resolution declaring an intent
to enter into mutual maintenance agreement with the County, in the event the RNV as
relinquished by the CTC must be perpetuated.
3) Provide staff with further direction
Exhibits
A — Reso — Consent to Relinquish
B — Reso — Declare Support
C — Reso — Intent to Accept from State
D — Reso — Intent to Accept from Joint
E — Reso — Intent to Accept from County
F — Agreement
G — Exhibit "A" for Resolutions and Agreement
RESOLUTION NO. 2017-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE
ELSINORE, CALIFORNIA, CONSENTING TO THE
RELINQUISHMENT BY THE STATE OF CALIFORNIA TO THE
CITY OF LAKE ELSINORE, PORTIONS OF ROUTE 74 IN
ACCORDANCE TO STREETS AND HIGHWAYS CODE 374, AS
AMENDED BY ASSEMBLY BILL 1915, AND TO WAIVE THE 90 -
DAY NOTIFICATION PERIOD PURSUANT TO STREETS AND
HIGHWAYS CODE 73.
WHEREAS, Route 74 was adopted into the State Highway System in 1933 and served as
an interregional link between Orange and Riverside Counties during the succeeding
decades; and
WHEREAS, Route 74 also served sub -regionally to connect Old Highways 71 and 72, now
Interstates 15 and 215, (1-15 and 215), respectively, to link the Elsinore and Perris valleys
and the growing populations within those communities; and
WHEREAS, this interregional and sub -regional access once available along Route 74 has
been supplanted during more'rccent decades by improvements to Interstates 15 and 215,
as well as to several local arterial roadways; and
WHEREAS, in light of this change in function, Assembly Bill ("AB") No. 1915 (2008), is an
act that amends California Streets and Highways Code § 374, and authorizes the California
Transportation Commission ("CTC'), to relinquish portions of Route 74 to the cities of
Lake Elsinore ("Lake Elsinore"), and Perris ("Perris"); and
WHEREAS, the CTC, as authorized by AB 1915 (2008), via Resolution R-3739 approved on
August 12, 2009, relinquished to Perris that portion of Route 74, from 7th Street at the
westerly city limits to Redlands Avenue at 1-215; and
WHEREAS, negotiations previously undertaken to relinquish the corresponding portion of
Route 74 to the City of Lake Elsinore reached an impasse in 2010; and
WHEREAS, Assembly Bill ("AB") No. 218 (2015), further amends California Streets and
Highways Code § 374, to authorize relinquishment of Route 74 within the unincorporated
territory of the County of Riverside ("County"), located between the Cities of Lake Elsinore
and Perris; and
Page 1 of 3
WHEREAS, AB 218 (2015) presents an opportunity for collaboration between the County
and Lake Elsinore to extend local control of Route 74 from the westerly Perris city limits
at 7th Street, further west to the 1-15; and
WHEREAS, as the interdependency of these adjoining segments is fundamental to
establishing local control throughout Route 74 from 1-15 to 1-215; and,
WHEREAS, the City Council of Lake Elsinore ("Council"), consents to the relinquishment
of portions of Route 74 between 1-15 to Mauricio Avenue, as amended by AB 1915 (2008);
and
WHEREAS, the Council waives the statutory 90 -day notice of intention to relinquish,
pursuant to California Streets and Highways Code § 73; and
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DOES HEREBY
RESOLVE, DETERMINE AND ORDER AS FOLLOWS:
Section 1. Recitals. The foregoing recitals are true and correct.
Section 2. Findings Regarding Consent to Route Relinquishment. The City Council-finds-
and
ouncilfindsand consents to the relinquishment by the State of California to the City of Lake Elsinore
of that portion of Route 74, as depicted on Exhibit "A" between Interstate 15 and
Mauricio Avenue, in accordance to AB 1915 (2008).
Section 3 Findings Regarding Waiver of Ninety -Day Notice Period. The City Council finds
and waives the statutory 90 -day notice of intention to relinquish, pursuant to California
Streets and Highways Code § 73.
Page 2 of 3
Dated: January 24, 2017
PASSED AND ADOPTED by the City Council of Lake Elsinore at a regular meeting held on
this 24'h day of January, 2017 by the following vote:
ATTEST:
SUSAN M DOMEN, CMC
CITY CLERK
APPROVED AS TO FORM:
BARBARA ZEID LEIBOLD
CITY AT'I ORNEY
APPROVED:
ROBERT E MAGEE
MAYOR
Page 3 of 3
RESOLUTION NO. 2017-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE
ELSINORE, CALIFORNIA, DECLARING SUPPORT OF THE JOINT
RELINQUISHMENT OF AN ADJOINING PORTION OF ROUTE 74
BY THE STATE OF CALIFORNIA TO THE COUNTY OF RIVERSIDE
IN ACCORDANCE TO STREETS AND HIGHWAYS CODE 374, AS
AMENDED BY ASSEMBLY BILL 218.
WHEREAS, Route 74 was adopted into the State Highway System in 1933 and served as
an interregional link between Orange and Riverside Counties during the succeeding
decades; and
WHEREAS, Route 74 also served sub -regionally to connect Old Highways 71 and 72, now
Interstates 15 and 215, (1-15 and 215), respectively, to link the Elsinore and Perris valleys
and the growing populations within those communities; and
WHEREAS, this interregional and sub -regional access once available along Route 74 has
been supplanted during more recent decades by improvements to Interstates 15 and 215,
as well as to several local arterial roadways; and
WHEREAS, in light of this change, Assembly Bills ("AB") No. 1915 (2008) and AB 218 (2015)
were approved to amend California Streets and Highways Code § 374, to authorize the
California Transportation Commission ("CTC'), to relinquish portions of Route 74 to the
cities of Lake Elsinore ('lake Elsinore"), and Perris ("Perris"), and to the County of
Riverside ("County"), as depicted on Exhibit "A"; and
WHEREAS, the CTC, via Resolution R-3739 approved on August 12, 2009, relinquished to
Perris that portion of Route 74, from 7th Street at the westerly city limits to Redlands
Avenue at 1-215; and
WHEREAS, together, AB 1915 (2008) and AB 218 (2015) present an opportunity for
collaboration between the County and Lake Elsinore to extend local control of Route 74
from the westerly Perris city limits at 7th Street, further west to the 1-15; and
WHEREAS, as the interdependency of these adjoining segments is fundamental to
establishing local control throughout the Route 74 segment located between 1-15 and 1-
215; and,
Page 1 of 4
WHEREAS, in recognition of the need for collaboration between all involved parties, the
County requested the California Department of Transportation ("Department"), to
initiate relinquishment proceedings in accordance to AB 218 (2015); and
WHEREAS, upon relinquishment, intervention between Lake Elsinore and the County will
be required to offset an asymmetrical jurisdictional boundary disparity that will be
revealed within the Route 74 right-of-way ("R/W") resulting from highway widening and
realignment completed in 2006; and
WHERAS, approval of joint relinquishment by the CTC as authorized by AB 1915 (2008)
and AB 218 (2015), will facilitate the post -relinquishment R/W conveyance between the
County and Lake Elsinore that will remedy the jurisdictional boundary disparity; and
WHEREAS, preliminary negotiations between the Department, the County, and Lake
Elsinore, have reached a satisfactory consensus, such that preparation of a
relinquishment agreement may commence immediately; and
WHEREAS, the City Council's approval and execution of such an agreement, will
document the multi -agency support of the relinquishment of these adjoining segments
of Route 74; and
WHEREAS, a single CTC resolution of approval directing the joint relinquishment of these
Route 74 segments will facilitate the recordation of such CTC resolution at the County
Recorder's Office of the County of Riverside, ("Recorder's").
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DOES HEREBY
RESOLVE, DETERMINE AND ORDER AS FOLLOWS:
Section 1. Recitals. The foregoing recitals are true and correct.
Section 2 Findings Regarding the Interdependency of Route 74 Segments The City
Council finds that relinquishment of the adjoining Route 74 segments as depicted on
Exhibit "A", by the State of California to the City of Lake Elsinore and to the County of
Riverside, in accordance to AB 1915 (2008) and AB 218 (2015), is essential to extending
local control contiguously between 1-15 and 1-215.
Section 3. Findings Declaring Support of Joint Relinquishment. The City Council finds and
declares its support for the joint approval of relinquishment, by the State of California, of
the adjoining portions of Route 74 as authorized by AB 1915 (2008) and AB 218 (2015).
Page 2 of 4
Section 4. Findings Regarding Terms of Negotiation and Relinquishment Agreement. The
City Council finds the preliminary terms of negotiations, to be sufficient to warrant
finalization of the agreement; and upon completion thereof, designates the City Manager
as the Official authorized to execute the relinquishment agreement on behalf of the City
Council.
Section 5. Findings Supporting Recordation of the Resolution of Relinquishment. The
City Council supports the recordation by the Department, of the CTC's resolution
approving the joint relinquishment of the adjoining portions of Route 74 to the County
and Lake Elsinore.
Page 3 of 4
Dated: January 24, 2017
PASSED AND ADOPTED by the City Council of Lake Elsinore at a regular meeting held on
this 24" day of January, 2017 by the following vote:
ATTEST:
SUSAN M DOMEN, CMC
CITY CLERK
APPROVED AS TO FORM:
BARBARA HID LEIBOLD
CIT'y A`fTORNEY
APPROVED:
ROBERT E MAGEE
MAYOR
Page 4 of 4
RESOLUTION NO. 2017-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE
ELSINORE, CALIFORNIA, AND PURSUANT TO STREETS AND
HIGHWAYS CODE SECTION 1806 (b) DECLARING ITS INTENT
TO ACCEPT INTO THE CITY STREET SYSTEM, PORTIONS OF
ROUTE 74 RELINQUISHED BY THE STATE OF CALIFORNIA TO
THE CITY OF LAKE ELSINORE, IN ACCORDANCE TO STREETS
AND HIGHWAYS CODE SECTION 374, AS AMENDED BY
ASSEMBLY BILL 1915 (2008).
WHEREAS, Route 74 was adopted into the State Highway System in 1933 and served as
an interregional link between Orange and Riverside Counties during the succeeding
decades; and
WHEREAS, Route 74 also served sub -regionally to connect Old Highways 71 and 72, now
Interstates 15 and 215, (1-15 and 215), respectively, to link the Elsinore and Perris valleys
and the growing populations within those communities; and
WHEREAS, this interregional and sub -regional access once available along Route 74 has
been supplanted during more recent decades by improvements to Interstates 15 and 215,
as well as to several local arterial roadways; and
WHEREAS, in light of this change, Assembly Bills ("AB") No. 1915 (2008) and AB 218 (2015)
were approved to amend California Streets and Highways Code Section 374, to authorize
the California Transportation Commission ("CTC"), to relinquish portions of Route 74 to
the cities of Lake Elsinore ("Lake Elsinore"), and Perris ("Perris"), and to the County of
Riverside ("County"), as depicted on Exhibit "A"; and
WHEREAS, the CTC, via Resolution R-3739 approved on August 12, 2009, relinquished to
Perris that portion of Route 74, from 7th Street at the westerly city limits to Redlands
Avenue at 1-215; and
WHEREAS, upon the CTC's approval of its Resolution of Relinquishment Approval of the
adjoining portions of Route 74 to the County (AB 218/2015) and Lake Elsinore (AB
1915/2008), the California Department of Transportation ("Department") will ensure the
recordation of said CTC Resolution, at the Office of the County Recorder, County of
Riverside, to conclude relinquishment to the County and to Lake Elsinore; and
Page 1 of 3
WHEREAS, upon recordation of the CTC's Resolution by the Department, and pursuant to
Streets and Highways Code Section 1806 (b), the City Council hereby declares its intent to
accept into the City Street System, those portions of Route 74 as relinquished by the CTC
to Lake Elsinore, in accordance to AB 1915 (2008).
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DOES HEREBY
RESOLVE, DETERMINE AND ORDER AS FOLLOWS:
Section 1. Recitals. The foregoing recitals are true and correct.
Section 2. Findings Regarding Consent to Route Relinquishment. The City Council finds
and consents to the relinquishment, by the State of California, to the City of Lake Elsinore,
those portions of Route 74, specifically located between 1-15 and Mauricio Avenue, in
accordance to AB 1915 (2008), and as depicted on Exhibit "A".
Section 3. Acceptance of Relinquished R/W into City Street System. Pursuant to Section
1806 (b) of the Streets and Highways Code, the City Council hereby declares its intent to
accept the Route 74 right-of-way relinquished by the CTC to the City of Lake Elsinore, into
the City Street System, and to record conveyances thereof with the certifications as
required for recordation purposes.
Page 2 of 3
Dated: January 24, 2017
PASSED AND ADOPTED by the City Council of Lake Elsinore at a regular meeting held on
this 24th day of January, 2017 by the following vote:
ATTEST:
SUSAN M DOMEN, CMC
CITY CLERK
APPROVED AS TO FORM:
BARBARA ZEID LEIBOLD
CITY ATTORNEY
APPROVED:
ROBERT E MAGEE
MAYOR
Page 3 of 3
RESOLUTION NO. 2017-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE
ELSINORE, CALIFORNIA, AND PURSUANT TO STREETS AND
HIGHWAYS CODE SECTION 1806 (b), DECLARING ITS INTENT
TO ACCEPT INTO THE CITY STREET SYSTEM, THOSE PORTIONS
OF ROUTE 74 RIGHT-OF-WAY, CONVEYED BY THE COUNTY
OF RIVERSIDE PURSUANT TO GOVERNMENT CODE 25365.
WHEREAS, Route 74 was adopted into the State Highway System in 1933 and served as
an interregional link between Orange and Riverside Counties during the succeeding
decades; and
WHEREAS, Route 74 also served sub -regionally to connect Old Highways 71 and 72, now
Interstates 15 and 215, (1-15 and 215), respectively, to link the Elsinore and Perris valleys
and the growing populations within those communities; and
WHEREAS, this interregional and sub -regional access once available along Route 74 has
been supplanted during more recent decades by improvements to Interstates 15 and 215,
as well as to several local arterial roadways; and
WHEREAS, in light of this change, Assembly Bills ("AB") No. 1915 (2008) and AB 218 (2015;
were approved to amend California Streets and Highways Code Section 374, to authorize
the California Transportation Commission ("CTC'), to relinquish portions of Route 74 to
the cities of Lake Elsinore ("Lake Elsinore"), and Perris ("Perris"), and, to the County of
Riverside ("County"), as depicted on Exhibit "A"; and
WHEREAS, the CTC, via Resolution R-3739 approved on August 12, 2009, relinquished to
Perris that portion of Route 74, from 71h Street at the westerly city limits to Redlands
Avenue at 1-215; and
WHEREAS, upon relinquishment of the adjoining portions of Route 74 to Lake Elsinore
and to the County, intervention will be required to offset an asymmetrical jurisdictional
boundary disparity resulting from highway widening and realignment completed in 2006,
that will be revealed within the Route 74 right-of-way ("R/W") upon relinquishment; and
WHERAS, approval of joint relinquishment by the CTC as authorized by AB 1915 (2008)
and AB 218 (2015), will facilitate the post -relinquishment R/W conveyance between the
County and Lake Elsinore that will remedy the jurisdictional boundary disparity; and
Page 1 of 3
WHEREAS, the City Council, in its Resolution No. 2017- , declared its intent to adopt
into the City Street System those portions of Route 74 relinquished to Lake Elsinore by
the CTC, pursuant to Streets and Highways Code Section 1806 (b), and in accordance to
AB 1915 (2008); and
WHEREAS, pursuant to Government Code Section 25365, the Board of Supervisors of the
County of Riverside intends to convey to Lake Elsinore, portions of relinquished Route 74,
from east of Cambern Avenue to Rachel Way, determined by said Board to be
unnecessary for County Highway Purposes; and
WHEREAS, pursuant to Streets and Highways Code Section 1806 (b), the City Council
hereby declares its intent to adopt into the City Street System, those portions of Route 74
R/W from east of Cambern Avenue to Rachel Way determined to be unnecessary for
County Highway Purposes, upon notification of the Clerk of the Board of Supervisors, in
accordance to Government Code 6061.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DOES HEREBY
RESOLVE, DETERMINE AND ORDER AS FOLLOWS:
Section 1. Recitals. The foregoing recitals are true and correct.
Section 2. Findings Regarding Consent to Property Conveyance by County. The City
Council finds and consents to a Resolution of Intent of the Board of Supervisors of the
County of Riverside, Conveying to the City of Lake Elsinore, Real Property and Easement
Interests of those portions of Route 74 relinquished by the State to the County, located
from east of Cambern Avenue to Rachel Way, that have subsequently been determined
to be unsuitable for county highway purposes by said Board, pursuant to Government
Code Section 25365.
Section 3. Acceptance of Property Conveyance into City Street System. Pursuant to
Section1806 (b) of the Streets and Highways Code, the City Council declares its intent to
accept into the City Street System, portions of Route 74 R/W relinquished by the State to
the County of Riverside, that has subsequently been determined by the Board of
Supervisors, to be unsuitable for county highway purposes, upon receipt of notification
thereof by the Clerk of the Board, pursuant to Government Code 6061.
Page 2 of 3
Dated: January 24, 2017
PASSED AND ADOPTED by the City Council of Lake Elsinore at a regular meeting held on
this 24th day of January, 2017 by the following vote:
ATTEST:
SUSAN M DOMEN, CMC
CITY CLERK
APPROVED AS TO FORM:
BARBARA ZEID LEIBOLD
CITY ATTORNEY
APPROVED:
ROBERT E MAGEE
MAYOR
Page 3 of 3
RESOLUTION NO. 2017-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE
ELSINORE, CALIFORNIA, AND PURSUANT TO STREETS AND
HIGHWAYS CODE SECTION 1806 (b) ACCEPTING INTO THE
CITY STREET SYSTEM, PORTIONS OF ROUTE 74 CONVEYED BY
THE COUNTY OF RIVERSIDE, UPON NOTIFICATION OF THE
CLERK OF THE BOARD PURSUANT TO GOVERNMENT CODE
SECTION 6061.
WHEREAS, the City Council on January 24, 2017 duly adopted Resolution 2017 -
(the "Resolution of Intention") declaring its intention to adopt into the City Street System,
portions of Route 74 R/W located between 1-15 and Mauricio Avenue, relinquished to the
County of Riverside, and subsequently determined by the Board of Supervisors of said
County to be unnecessary for County Highway Purposes; and
WHEREAS, said adoption will remediate an asymmetrical jurisdictional boundary disparity
within Route 74 R/W, revealed with relinquishment to the County of Riverside and the
City of Lake Elsinore, by Resolution No. R -XYZ, approved by the California Transportation
Commission ("CTC') on , 2017; and
WHEREAS, on , 2017, the Clerk of the Board of Supervisors of the County
of Riverside, duly published notification of the conveyance of Relinquished Route 74
Right -of -Way ("R/W"), to the City of Lake Elsinore, pursuant to Government Code 6061.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DOES HEREBY
RESOLVE, DETERMINE AND ORDER AS FOLLOWS:
Section 1. Recitals. The foregoing recitals are true and correct.
Section 2 Conformation of Finding in Resolution of Intention. The City Council
reconfirms all of its findings and determinations asset forth in the Resolution of Intention.
Section 3. Findings Regarding Prior Proceedings. The City Council finds and determines
that all prior proceedings had and taken by the City Council with respect to
Relinquishment of Route 74 by the State of California, in accordance to Assembly Bill 1915
(2008), are valid and in conformity with applicable statutes of the Streets and Highways
Code.
Page 1 of 3
Section 4. Acceptance of Property Conveyance into City Street System Pursuant to
Section1806 (b) of the Streets and Highways Code, the City Council hereby accepts into
the City Street System, portions of relinquished Route 74 R/W as conveyed to Lake
Elsinore by the Board of Supervisors, of the County of Riverside, as notified thereof by the
Clerk of the Board, pursuant to Government Code 6061.
Page 2of3
Dated: January 24, 2017
PASSED AND ADOPTED by the City Council of Lake Elsinore at a regular meeting held on
this 241h day of January, 2017 by the following vote:
ATTEST:
SUSAN M DOMEN, CMC
CITY CLERK
APPROVED AS TO FORM:
BARBARA HID LEIBOLD
CITY ATTORNEY
APPROVED:
ROBERT E MAGEE
MAYOR
Page 3 of 3
District Agreement No. 08-1637
08-Riv-74-PM 17.35/19.62
From Dexter Avenue to
Mauricio Avenue
EA IH171
Project Number 0817000022
District Agreement No. 08-1637
RELINQUISHMENT AGREEMENT
This Agreement, entered into effective on , is between the STATE OF
CALIFORNIA, acting by and through its Department of Transportation, referred to herein as
"CALTRANS", and the
CITY OF LAKE ELSINORE, a body politic
and a municipal corporation of the State of
California, referred to herein as "CITY."
RECITALS
1. CALTRANS and CITY, pursuant to Streets and I lighways Code sections 73 and 374, are
authorized to enter into a Cooperative Agreement in order to relinquish to CITY a portion
of a State Highway within CITY's jurisdiction.
2. CALTRANS intends to relinquish to CITY that portion of State Route 74 (SR 74) from
Dexter Avenue to Mauricio Avenue between Post Miles 17.35 to 19.62, within CITY
jurisdiction and as shown in Exhibit A, attached to and made a part of this Agreement,
referred to hereinafter as "RELINQUISHED FACILITIES". This relinquishment is based
on legislation enacted in 2008 as Assembly Bill 1915 that amended Streets and Highways
Code Section 374 to authorize relinquishment. CITY is willing to accept said
RELINQUISHED FACILITIES upon approval by the California Transportation
Commission (CTC) of a Resolution of Relinquishment and CALTRANS's recording of
said Resolution in the County Recorder's Office.
3. CALTRANS and CITY agree that RELINQUISHED FACILITIES are currently in a
state of good repair. CALTRANS and CITY have negotiated an understanding that CITY
will accept and assume full maintenance, ownership, responsibility, control and liability
in perpetuity over the RELINQUISHED FACILITIES in exchange for the payment of
$2,200,000 an allocation deemed by CTC. to be in the best interest for CALTRANS.
4. The parties hereto intend to define herein the terms and conditions under which
RELINQUISHED FACILITIES is to be accomplished.
SECTION I
CITY AGREES:
District Agreement No. 08-1637
L Execution of this Agreement constitutes CITY's waiver of CALTRANS's obligation to
provide ninety (90) days prior notice of CALTRANS's "Intention to Relinquish" as set
forth in Streets and Highways Code section 73.
2. To accept that allocation, determined by the CTC to be in the best interest of
CALTRANS, as CALTRANS's only payment obligation for this RELINQUISHED
FACILITIES.
3. To accept ownership, including all of CALTRANS's current obligations, rights, title and
interest in RELINQUISHED FACILITIES upon recordation of the CTC's Resolution of
Relinquishment in the County Recorder's Office and to thereafter operate, maintain, and
be liable for RELINQUISHED FACILITIES at no additional cost to CALTRANS.
4. To accept RELINQUISHED FACILITIES in their current environmental condition and
setting, including, but not limited to, the presence of hazardous materials as described in
the Initial Site Assessment (ISA) Checklist and ISA Memo for Right of Way
Relinquishment dated December 8, 2016 and the Categorical Exemption/Categorical
Exclusion (CE/CE) Form dated December 13, 2016. CITY has received and reviewed a
copy of the above -referenced ISA Checklist and ISA Memo dated December 8, 2016 and
the CE/CE Re -Validation Form dated December 13, 2016. Upon recordation of the
OTC's Resolution of Relinquishment iq the CoWny Recorder's Office, CALTRANS will
not be responsible for any present or future remediation of said hazardous materials.
5. To administer the operation and maintenance of the RELINQUISHED FACILITIES in a
manner consistent with professional traffic engineering standards.
6. To ensure that appropriate traffic studies or analyses be performed to substantiate any
decisions affecting the RELINQUISHED FACILITIES.
7. To provide for public notice and the consideration of public input on the proximate
effects of any proposed decision on traffic flow, residences, or businesses, affecting the
RELINQUISHED FACILITIES, other than a decision on routine maintenance.
8. To ensure the continuity of traffic flow along the RELINQUISHED FACILITIES,
including any traffic signal progression.
9. To maintain signs along the RELINQUISHED FACILITIES directing motorists to the
continuation of SR -74.
2
SECTION II
CALTRANS AGRE ES:
District Agreement No. 08-1637
To relinquish, upon the approval of the CTC's Resolution of Relinquishment, the
RELINQUISHED FACILITIES.
2. To forward and support CITY's request to CTC for the allocation of $2,200,000 with the
expectation that CTC will determine that this allocation is in the best interest of
CALTRANS.
3. To submit the CTC Resolution of Relinquishment to the County Recorder's Office for
recording.
4. To pay CITY, within thirty (30) days of approval of funding by CTC, the amount of
$2,200,000 as approved by the CTC. . The payment of those funds will represent
CALTRANS's only payment obligation for the purpose of the RELINQUISHED
FACILITIES.
5. Thereafter, upon CITY's specific request, to transfer to CITY within sixty (60) days of
such request, copies of available CALTRANS records and files for RELINQUISHED
FACILITIES, such as plans, survey data and right of way information.
' SECTION III
IT IS MUTUALLY AGREED:
1. All obligations of CALTRANS under the terns of this Agreement are subject to the
appropriation of resources by the Legislature, State Budget Act authority, and the
allocation of any funds by the CTC.
2. CALTRANS reserves the right to enter, at no cost to CALTRANS, RELINQUISHED
FACILITIES, to modify or add signage, drainage, and other improvements necessary for
State Highway operations. CITY agrees to allow CALTRANS access to operate,
maintain, add, remove, or modify CALTRANS's facilities retained in those collateral
facilities.
3. CITY shall fully defend, indemnify and save harmless CALTRANS and all its officers
and employees from all claims, suits or actions related to environmental theories or
assertions of liability, including, but not limited to, claims or lawsuits related to the
presence of hazardous materials as described in the ISA Checklist and ISA Memo for
Right of Way Relinquishment dated December 8, 2016 and the CE/CE Re -Validation
Form dated December 13, 2016, provided that the actions, events, injuries, damages, or
losses giving rise to any claims, suits or actions occurred on or arise after the date of the
recordation of the CTC's Resolution of Relinquishment.
I
District Agreement No. 08-1637
4. CALTRANS shall fully defend, indemnify and save harmless CITY and all its officers
and employees from all claims, suits or actions related to environmental theories or
assertions of liability, including, but not limited to, claims or lawsuits related to the
presence of hazardous materials as described in the ISA Checklist and ISA Memo for
Right of Way Relinquishment dated December 8, 2016 and the CE/CE Re -Validation
Form dated December 13, 2016 provided that the actions, events, injuries, damages, or
losses giving rise to any claims, suits or actions occurred or arose before the date of
recordation of the CTC's Resolution of Relinquishment.
5. Neither CALTRANS nor any officer or employee thereof is responsible for any injury,
damage, or liability occurring by reason of anything done or omitted to be done by CITY,
and/or its agents under or in connection with any work, authority, or jurisdiction
conferred upon CITY under this Agreement. It is understood and agreed that CITY, to
the extent permitted by law, will defend, indemnify, and save harmless CALTRANS and
all of its officers and employees from all claims, suits, or actions of every name, kind,
and description brought forth under, but not limited to, tortious, contractual, inverse
condemnation, or other theories and assertions of liability occurring by reason of
anything done or omitted to be done by CITY, and/or its agents under this Agreement.
6. Neither CITY nor any officer or employee thereof is responsible for any injury, damage
or liability occurring by reason of anything done or omitted to be done by CALTRANS,
and/or its agents under or in connection with any work, authority, or jurisdiction
conferred upon CALTRANS under this Agreement. It is understood and agreed that
CALY�RANS, to the extent permitted by law, will defend, indemnify, and save h.lvmlcss
CITY and all of its officers and employees from all claims, suits, or actions of every
name, ]rind, and description brought forth under, but not limited to, tortious, contractual,
inverse condemnation, or other theories and assertions of liability occurring by reason of
anything done or omitted to be done by CALTRANS and/or its agents under this
Agreement.
7. No alteration of the terns of this Agreement shall be valid unless made in writing and
signed by the parties hereto and no oral understanding or agreement not incorporated
herein shall be binding on any of the parties hereto.
This Agreement shall terminate upon recordation of the CTC's Resolution of
Relinquishment for RELINQUISHED FACILITIES in the County Recorder's Office and
payment by CALTRANS of $2,200,000 to CITY except for those provisions as stated
wider Item 3 of Recitals and Item 3 of Section I, which relate to indemnification,
ownership, operation, and maintenance, which shall remain in effect until terminated or
modified in writing by mutual agreement.
4
District Agreement No. 08-1637
SIGNATURES
PARTIES declare that:
1. Each PARTY is an authorized legal entity under California state law.
2. Each PARTY has the authority to enter into this agreement.
3. The people signing this agreement have the authority to do soon behalf of their public agencies.
STATE OF CALIFORNIA
DEPARTMENT OF TRANSPORTATION
John Bulinski
District Director
APPROVED AS TO FORM AND
PROCEDURE:
Meera Danday<. _
Deputy Attorney
Department of Transportation
CERTIFIED AS TO FUNDS
Lisa Pacheco
District Budget Manager
CERTIFIED AS TO FINANCIAL TERMS
AND POLICIES:
Accounting Administrator
CITY OF LAKE ELSINORE
Mayor
ATTEST:
CITY Clerk
APPROVED AS TO FORM:
CITY Attorney
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Agenda Date: 1/24/2017
In Control: City Council
Agenda Number: 15)
City of Lake Elsinore
Text File
File Number: ID# 17-057
Version: 1
130 South Main Street
Lake Elsinore, CA 92530
w .lake-elsinore.org
Status: Business
File Type: Report
City of Lake Elsinore Page 1 Printed on 1/1912017
Cl"rY Jr rn
LAI LSI1` 0 P
REPORT TO CITY COUNCIL
TO: HONORABLE MAYOR AND CITY COUNCILMEMBERS
FROM: GRANT YATES, CITY MANAGER
DATE: JANUARY 24, 2017
SUBJECT: Purchase of a Tax Defaulted Parcel for Area Drainage and Flood Control for
APN 379-050-024 in the Amount of $33,878.50
Recommendation
adopt A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE,
CALIFORNIA, APPROVING THE TAX -DEFAULTED PURCHASE OF PARCEL 2 OF THE
COTTAGE LANE RESIDENTIAL PROJECT FOR DRAINAGE AND DETENTION BASIN
FUNCTIONS AT THE TERMINUS OF ULLA STREET, ASSESSOR PARCEL NUMBER 379-050-
024
Background
The City Council approved the 48 -unit single-family residential Cottage Lane project on August
23, 2005, that included a Specific Plan, Zone Change, Tentative Tract Map 32996 and Residential
Design Review (RDR). The project included five model homes which have been sold, and the
remaining subdivision has deve',oped streets, underground utilities, street lights, some perimeter
block walls, and has completed some engineering conditions of approval. The project is located
south of Lakeside High School, north of Grand Avenue, east of Machado Street and west of
Riverside Drive.
The original owner, Cottage Lane LLC has been an inactive company. Ambient Communities
purchased the property in 2012/2013, but did not purchase Parcel 2, which is to integral the
project's drainage flows down Ulla Lane. Parcel 2 was designed to be a part of the Cottage Lane
project but Parcel 2 was not part of Tract Map 32996 that was recorded in 2006. Parcel 2 is
located at the terminus of Ulla Lane and south boundary of Lakeside High School.
Parcel 2 is a 0.98 parcel that was constructed to serve as a detention basin including an access
road for maintenance. The parcel became very overgrown with vegetation due to the lack of
maintenance and code enforcement conducted a nuisance abatement in an amount of just under
$5,000 to remove the significant overgrown debris. Parcel 2 has been a tax -defaulted parcel
since 2010 and recent tax records show a tax deficiency of $21,103 through 2015.
Ambient Communities sold the Cottage Lane project to Frontier Communities.. The Residential
Design Review (RDR) approval of the original project has expired and a new RDR must be
processed Updated architecture has been required to update and improve the previous design to
the City's current design requirements.
Discussion and Analysis
It would be beneficial to both the City and Frontier Communities to have Parcel 2 provide the
intended drainage and detention basin functions for not only the Cottage Lane project but for
properties in the area on Ulla Lane and Tiller Lane. The City proposes to purchase Parcel 2 and
provide Frontier Communities with an access easement and requirement that the HOA maintain
the parcel for drainage and detention basin functions in perpetuity and abide by the attached
Retention Basin Agreement.
Staff notified the Riverside County Treasurer of the City's desire to obtain Parcel 2 and filed an
application on September 6, 2016 and provided a second letter on October 5, 2016. On
December 15, 2016, the City received notice from the County Treasurer that the parcel is available
for City purchase at a price of $33,878.50. The County Treasurer has a request that a City Council
resolution be submitted by February 1, 2017, that includes the following provisions:
1) A City Council Resolution that includes an offer to purchase, purchase price, legal
description, Assessor Parcel Number, and specific public purpose of parcel. In addition,
the resolution should include a statement that the costs of giving notice shall be paid by
the City.
2) A separate City Mission Statement on official City letterhead.
3) A Notice of the Agreement to Purchase Tax -defaulted property must be given to the parties
of interest and the City shall pay the cost.
4) A Notice of the Agreement to Purchase Tax -defaulted property must be published in the
Press Enterprise at the City's expense.
Staff inquired about the cost breakdown of the delinquent tax payments. The Chapter 8 sales
can be a lengthy process so the County Treasurer quotes out three years that include penalty
fees and tax sales processing fees and costs. Following is the cost breakdown.
Delinquent taxes through June 2017 $23,898.38
Current taxes estimates through 2019 $ 8,748.87
Fees and cost associated with sale $ 1,231.25
TOTAL $33,878.50
The City Attorney has drafted a Detention Basin Agreement which Frontier Communities has
agreed to and signed. Frontier Communities is eager to develop the Cottage Lane project and
has submitted the RDR application to develop 41 detached single-family residences that will be
before the Planning Commission on January 17, 2017 with anticipated final City Council
consideration on February 28, 2017.
Exhibits:
A. City Council Resolution
B. Letter from County Treasurer dated 12/15/16 (Parcel Availability)
C. Email from County Treasurer dated 1/10/16 (Parcel Cost Breakdown)
D. Parcel 2 Owner Information
E. Parcel 2 Treasurer -Tax Collector Records
F. County Treasurer Application to Purchase Tax -Defaulted Property
G. Letters from City of Lake Elsinore dated 10/5/16 and 9/6/16
H. Parcel 2 Retention Basin Agreement
I. Vicinity Map,
J. Aerial Map
K. Assessor Parcel Map
Page 2 of 2
RESOLUTION NO. 2017-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE,
CALIFORNIA, APPROVING THE TAX -DEFAULTED PURCHASE OF PARCEL 2 OF
THE COTTAGE LANE RESIDENTIAL PROJECT FOR DRAINAGE AND DETENTION
BASIN FUNCTIONS AT THE TERMINUS OF ULLA STREET, ASSESSOR PARCEL
NUMBER 379-050-024-4
Whereas, the City of Lake Elsinore (City) on behalf of development applicant Frontier
Communities is requesting City Council (Council) approval to purchase Parcel 2 (APN 379-050-
024-4) a tax -defaulted parcel for the Cottage Lane project and properties in the area; and,
Whereas, the Cottage Lane project was approved by the Council on August 23, 2005, for a 48 -
unit single-family residential project pursuant to a Specific Plan, Zone Change, Tentative Tract
Map 32996 and Residential Design Review (RDR); and,
Whereas, the Specific Plan and Zone Change are still valid, Tentative Tract Map 32996 was
recorded in 2006, but the RDR has expired and new property owner Frontier Communities has
applied for a new RDR; and,
Whereas, the City applied for first right of refusal to purchase the tax -defaulted Parcel 2 pursuant
to a Riverside County Treasurer application and letters from the City dated October 5, 2016, and
September 6, 2016; and,
Whereas, pursuant to a letter dated December 15, 2016, the Riverside County Treasurer notified
the City the availability of Parcel 2 for purchase at a price of $33,878.50; and,
Whereas, purchase of Parcel 2 would benefit the City, the developer and properties in the vicinity
of Ulla Lane and Tiller Lane by providing drainage control, detention basin, and an access for
road maintenance; and,
Whereas, the property owner Frontier Communities has agreed to enter into a Retention Basin
Agreement where the City would retain ownership of Parcel 2, grant Frontier Communities and
successors an access easement, and Frontier Communities HOA or successor would
permanently maintain Parcel 2; and,
Whereas, on January 24, 2017, at a duly noticed Regular meeting, the Council has considered
the recommendation of staff as well as evidence presented by staff and other interested parties
with respect to this item.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DOES HEREBY
RESOLVE, DETERMINE AND ORDER AS FOLLOWS:
Section 1. The Council has considered the proposed purchase of the Cottage Lane Parcel 2 tax -
defaulted parcel APN 379-050-024-4 in the amount of $33,878.50 and has found it acceptable.
The Council has reviewed and analyzed the proposed sale and determined the proposal is
consistent with the California Planning and Zoning Laws (Cal. Gov. Code §§ 65000 et seq.), the
Lake Elsinore General Plan, and the Lake Elsinore Municipal Code (LEMC).
Reso No. 2017 -
Page 2 of 3
Section 2. The Council has considered oral and written testimony offered at the regular meeting
and determined that the purchase of the Cottage Lane Parcel 2 is in compliance with the California
Environmental Quality Act (CEQA) Guidelines.
Section 3. The Council finds that the purchase of the tax -defaulted parcel legal description of
0.98 acres M/L in portion of parcels A & B and Parcel 2 of Parcel Map 023/075 and Parcel Map
7361 Lot A is in the best interest of the City and properties in the vicinity.
Section 4. The Council pursuant to the attached Exhibit A, includes the City Mission Statement
on official City Letterhead.
Section 5. The Council agrees that the City shall pay all costs for giving mailed notice to interested
persons and paying for such notice in the Press Enterprise newspaper of such sale.
Section 6. Based upon all of the evidence presented, the above findings, and consistency with
the Lake Elsinore General Plan and LEMC, the City Council of the City of Lake Elsinore hereby
approves the purchase of tax -defaulted Cottage Lane Parcel 2, APN 379-050-024-4 in the amount
of $33,878.50.
Section 5. This Resolution shall take effect from and after the date of its passage and adoption
Passed and Adopted this 24'h day of January, 2017.
Robert Magee, Mayor
Attest:
Susan M. Domen, MMC
City Clerk
Reso No. 2017 -
Page 3 of 3
STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE ) ss
CITY OF LAKE ELSINORE )
I, Susan M. Domen, MMC, City Clerk of the City of Lake Elsinore, California, do hereby certify
that Resolution No. 2017-_ was adopted by the City Council of the City of Lake Elsinore,
California, at the Regular meeting held on the 24'" day of January, 2017, by the following vote:
Ayes:
Noes:
Abstain:
Absent:
Susan M. Domen, MMC
City Clerk
JON CHRISTENSEN
ASIRSTANT TREASURER -TAX COLLECTOR
DEBBIE BASHE
INFORMATION TECHNOLOGY OFFICER
GIOVANE PIZANO
INVESTMENT MANAOER
KIEU NGO
F,..AL MANAGER
December 15, 2016 DON KENT
TREASURER
City of Lake Elsinore,
a municipal corporation within Riverside County, as a Taxing Agency
Attn: Grant Taylor
130 South Main Street
Lake Elsinore, CA 92530
Re: Assessment Number 379050024-4
Dear Mr, Taylor:
MATT JENNINGS
CHIEF DEPUTY TR EAB. REP -TA. COLLECTOR
MELISSA JOHNSON
CHIEF DEPUTY TREA..PER-TA% COLLECTOR
ADRIANNA GOMEZ
Aum URSTRATIVE SERVICQ9 MANACER I
RL _._.,t a ICU
DEC t 9 NIB
CITY OF lF SINO62E
PLANNIN._.�A ..._ x°JN
We are in receipt of your inquiry regarding acquiring tax -defaulted property.
The above referenced tax -defaulted parcel may be acquired by the City of Lake Elsinore, a municipal
corporation within Riverside County, as a Taxing Agency under a Chapter 8 Agreement to Purchase Tax -
Defaulted Property for the minimum purchase price as follows:
Assessment Number Purchase Price
379050024-4 $33,878.50
This purchase price was determined in keeping with Section 3793.1 of the California Revenue and Taxation
Code and Riverside County Office of the Treasurer -Tax Collector policy number 98-1. You may also
purchase this parcel through a Chapter 7 Auction.
Property taxes may be applied to parcels that are outside the City of Lake Elsinore, a municipal
corporation within Riverside County, as a Taxing Agency's purchasing boundaries. Please verify with
your legal council that the parcel is within your purchasing boundaries.
In order for the City of Lake Elsinore, a municipal corporation within Riverside County, as a Taxing
Agency to enter into an Agreement to Purchase this parcel, we would need a Resolution from your City
Council. The Resolution should show an offer to purchase the property, including the purchase price,
legal description, Assessor's 10 digit parcel number, and the specific public purpose for which the parcel
is to be devoted. It should also include a statement that the costs of giving notice shall be paid by the City
of Lake Elsinore, a municipal corporation within Riverside County, as a Taxing Agency. In addition
to the Resolution, the State now requires a separate Mission Statement to be submitted as part of the
Agreement. This must be on official letterhead.
Notice of the Agreement to Purchase Tax -Defaulted Property must be given. Pursuant to Section 3799 of
the California Revenue and Taxation Code, the Tax Collector shall make reasonable efforts to ascertain
the identity and address of parties of interest. Notifications of the pending sale to the parties of interest
must be sent by registered mail and/or certified mail. Also, in compliance with California Revenue and
Taxation Code 3800, the cost of giving notice shall be paid by the City of Lake Elsinore, a municipal
corporation within Riverside County, as a Taxing Agency.
Notice of the Agreement to Purchase Tax -Defaulted Property will also be published in the Press Enterprise
newspaper in accordance with Section 3798 of the California Revenue and Taxation Code. Should the
Agreement to Purchase be nullified after the first publication, the City of Lake Elsinore, a municipal
corporation within Riverside County, as a Taxing Agency would still be responsible for the publication
costs incurred.
COUNTY OR RIVERSIOE, TREASURER -TAX COLLECTOR
4080 LEMON STREET, 4TH FLOOR * P.O. BOX 12005 * RIVERSIDE, CALIFORNIA 92502
W W W.COUNTYTREASURER.ORG * (951) 955.3900 * I (B77) 748-2669 * FAX (951) 955-3923
City of Lake Elsinore,
a municipal corporation within Riverside County, as a Taxing Agency
Page 2
December 15, 2016
We would appreciate receiving the Resolution to purchase this property from your Council by February 1,
2017 to ensure that we have time to review the Resolution for any changes required and to pull the
property from the tax sale, if needed. It would be advisable to contact our office and confirm that the
Resolution has been received; Properties scheduled to be sold at auction will not be removed from
the public auction tax sale unless your Resolution has been received in our office no later than
April 26, 2017.
Once the Resolution has been received by our office, an Agreement to Purchase Tax -Defaulted Property will
be prepared and sent to you for signing. Once you have signed and returned the Agreement to us, we will
obtain authorization from our Board of Supervisors and from the State Controller. Upon authorization by the
State Controller's Office, we will proceed by setting the effective date of the Agreement, ordering the title
report, preparing the certified mailing to all parties of interest and the 3 week published notification in the
newspaper. Once these steps have been completed and if the property has not been redeemed or removed
for legal reasons, correspondence will be sent to you requesting that payment be sent within 14 days of the
effective date of the Agreement. Should payment not be received within the time allowed the Agreement
would be void.
If your City Council decides against offering to purchase this parcel, we would appreciate a letter stating
that fact in order to close our file on this matter. Should you elect not to purchase by Chapter 8
Agreement, the law does not restrict you from bidding on the property at public auction.
If you have any further questions regarding this matter, please feel free to contact me.
Yours truly,
7&"e4QC
Michelle Bryant August
Tax Sales Operations Unit
(951) 955-3948
COUNTY OR RIVERSIDE, TREASu RER-TAx COLLECTOR
4080 LEMON STREET, 4TH FLOOR * P.O. BOX 12005 * RIVERSIDE, CALIFORNIA 92502
WWW.COUNTYTREASURER.ORG * (951) 955-3900 * 1 (877) 748-2689 *FAX (951) 955-3923
Grant Taylor
From: Bryant -August, Michelle <MBryant-August@RivcoTTC.org>
Sent: Tuesday, January 10, 2017 3;54 PM
To: Grant Taylor
Cc: Finley, Sandy; Taylor, Desiree; Potenciano, Adrian
Subject: Parcel 379050024-4
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From: Grant Taylor [mailto:gtaylor@Lake-Elsinore.org]
Sent: Tuesday, January 03, 2017 11:29 AM
To: Bryant -August, Michelle <MBryant-August@RivcoTTC.org>
Subject: RV: Attached Image
__ .. Page 1 of 12
Scaach Tyr: Real Paop W „
- — ..
Reterenee:
Record I out of 3 (Tax roll)
OWNER INFORMATION
Mailing Address: 20100 S S WES'T'ERN AVE �
TORRANCE, CA 90501
Owner: COTTAGE LANE
Additional Name: COTTAGE LANE
Owner Ownersbip Rights Code: CORPORATION
PROPERTY INFORMATION
FIPS Code:
RIVERSIDE
FIDS Sub Code:
000
FIPS State Code:
CALIFORNIA
APN Sequence Number:
1
Unformatted APN:
379050024
Formatted APN:
379-050-024
Original APN:
379050024
Property Indicator:
VACANT
Land Use:
RESIDENTIAL LOT
Zoning:
RI
Land Square Footage:
42689
Acres:
0.9800
Municipality Name: CITY OF LAKE EL,SINORE
Legal Description: .98 ACRES M/L IN POR PARS A& BAND PAR 2 PM 023/075 PM 7361
Lot Number: A
TAX ASSESSOR INFORMATION
Tax Year: 2014 Total Value Calculated Indicator: ASSESSED
Tax Amount: $2,089.06
Tax Code Area: 005028
Calculated Land Value: $208,760.00
Calculated Total Value: $208,760.00
Assessed Land Value: $208,760.00
8/24/2016
OFFICE OF THE TREASURER—TAX COLLECTOR
RIVERSIDE COUNTY, CALIFORNIA
Property Tax Payments - Property Tax Details
.. t
0
Riverside County Property Tax I
Power to Sell -blot on a Payment Plan - Nut eligible for PaVmeilt Plan
Thi G m IV 11&Jefal'Aed taxe.,� for moti,.a q tol ¢i yu hj-'ror s3w iii, 'pub.''ic
au(%"n if not Pfea,onta"'; o-r o.ffit,'-e ift 961-966 3�,wo
:379050024-4
Cijrfent Mailing Address
201 00 S WESTERN MIE TORRANCE CA
90501
Tax Area
1105-028
Tax Surnmary(These
...
amounts do not MCIUde (110fithly
........... _accrued
interest orany additional fees)
Tax& , Year
Assessment Number
I axes
Coscs
e naftles I
Total
20 10
37905 24-4
S1 ids 10
X31 bU�
�45 8;
$2 215 6£
11
379050D24-4
S:2 J00 81,
S31 ON
$2 231 82
2-
37qmc)b24_ 4
S2,039,701
$37.5
3,941
'0'
$2281 14
3
-- -----
379M004_i_'_'_
------
Ob
I
$2,32524
2014
3� 300024-4
S2 089 061
S38 J
------ -
379o.job24
S2 154 181
S38 631
$;215,90
$2 413 71
f.: 0
OFFICE OF THE TREASURER -TAX COLLECTOR
RIVERSIDE COUNTY, CALIFORNIA
Property Tax Payments - Property Tax Details
. I
ry
Riverside County Property Tax I
Power to Sell - Not on a Payment Pian - 1,11cA eligible for Payment Plan
�Ia�, laxet, for u,�wt� flv�� V ars in,
13 Ej i 3j
ol'o, offlt1,6 1-96t) 3!?Oz) fc,�, -,ul,7ho;
379050024-4
Current Mailing Address
20100 'S VVESTERNAVE TORIRANCZ CA46501
I ax Area
Tax Summary, These amounts do not Include monthly accrue
tax Year Assessment Number
Taxes
2010 37-90500241-41 --- S 1,01616.1 11, c
2011 37-P050024-4 I S2,000.78
2012 37905OC124-4 S2.039.70
R7201
3 379050024-4 f S2,07
20114 379050()24-4 S2 08,9,06
2015 3791050024 1 _- 4 S2 1,59 18
merest or ariv additional fees!
Costs I
Penalties 1
_o
Toot
931 001
$198 G
$2 215 6&
S31 -bbi
201 D 06,
$2.23164'
S17, 501
$203 94,
$2281 14;
537 50'
$20-7 96;
$2 325 24"
S3 86 3
$2()8 8 8'
$21 336 57'
S M 6'3
$215 901
$2 413 71
Application to Purchase Tax -Defaulted Property from County__
- --._— _ -
1 lus applic tGon rnusl be completed by eligible pwchasing entity to commence Pwrchase of tax -defaulted property by
AgicemAht sale from the county under applicable provisions of the California Revenue and Taxation Code. Complete the
following sections and suPPly suppoting (IoenlTlentatlon accordingly. Completion of this application does not guarantee Purchase
a > nrAvaL
A. Purchaser Information%
I.NamccifOrganization. _ L.,-�y_p f �{CQ..,,..,"^i�itno✓'�
2, Mailing Address: _.1 o lwT� . to ,s
3. Contact Person: __..vntn......_._Phone U_/-_�"70 -3; 2.y )r_270
4, Corpm•ate Structure-- check the approPriate box below and provide the corresponding information; /
❑ Nonprofit Organization- provide ;trlit' es of Ltcnrporaiinn (if more than ten years old an update is required)
XPublic Agency- provide Mivvion vhrueiucart ort Lviter/ternd and if Redevelopment Agency or Special District,
also provide,fork(lieti)n Mit f
.5. Agency is to acquire title "As" and the taxing status: G
(D✓a/ a jVe/✓r Gddti 4-y 9-e 4 I G K r rKr noy�
-- y— _
(fusing snnus example. City of A17l lsoncillr, a nnnlicipal corporation, as a Ta.xiog'Ag ney or sneramento C.t ani) flocul Cwm dA ni,stric6
ay 8 ReVenlle Olstl'ict)
Purchasing Information
Check the appropriate box as it relates to the purchasing Entity's Co'Porate SULMUI'e and the intended
Use of the Parcel:
I. Is the parcel currently approved for it Chapter 7 Tax Sale? ❑ YesNo
2. The purchase is by (tihoos� c�onhl of the 3) t 1n;ich 1_.iLli,liy_,Iru�u rlhji•rltut.,_fo a C'aa id�tci iEiy+lh r I_ tl?c,arai�cl
Purchase h • Paxing Agene Revenne District Or Special District (circle oah (tile)
❑ Purchase by State or Count
•y (c; rale ooh um:)
. ❑ .Purchasc lby Nonprofit
3. The purpose of the Pu rchasc is: (check only ono Pio>) If additional space is needed attach separate sheet as an exhibit
❑ To preserve a lien ❑ for low income housing (sell 01rent)circle one
I
Por public Pw pose to �/�Ii'Cu fq_ t
_Disuihc ui61i ^J ¢/'4''�tlflnP~� ❑ To Preserve open space toi
C. Property Inforination
Provide the fol lowing information. If thereismore kale otle parcel_ol, %,ou need mote suaae for any of the criteria. consolidate the
information into a separate "Exhibit" document and attach it to this application:
L County where the Parcel is located: K1 ve/ jt 4 6
2. Assessors Parcel Number (if only one, Inst here more than one list on separate shee0:3�
3 State the Pm Pose and intended use for the PaNel:
��vM'Q ,,,fiJ�Gj,tYlttO'1 (,��t Q){.���i'+Y� ✓i••r'l(�.k'l'lG � �✓b}>.Q(�^{-t1A..i.
v, fcctcnotvteagement -
Provide the signature Of the purchasing entity's authorized officer
•v� Q p/"
3 z 2.
Name _.r _. __. _.. �`� t� 7'-/--?
� __..-� � ....l.Y. C �.
Print . __.
- ,® Contact Number
s!�� �QVF.I�iwF � lot. �l•'✓'
__ ...... .Date -..
16)(2016)
CITY C v
LAl E LSIf101I,E
-----
DREAM E,)�YREME
October 5, 2016
Michelle Bryant -August
Riverside County
Treasurer -Tax Collector
Atten: Tax Sale Operations
P.O. Box 12005
Riverside, CA 92502
RE: City of Lake Elsinore Request for Tax Default Purchase of APN 379050024-4
Follow Up for Property located on Ulla Lane, Lake Elsinore CA 92530
Dear Ms. Bryant -August:
Thank you very much for your assistance and follow up on the City of Lake Elsinore
request to purchase the above -identified parcel. Attached is the original application
packet with applicable information.
You had requested additional information to include the City's Mission Statement and
also why the City of Lake Elsinore objects to L,a:_ceI379050024-4 being sold under Chapter
7 tax sale. Following is the information.
'The City Council adopted the City's Mission Statement that says "The City of Lake
Elsinore will be the ultimate lake destination where all can live, work, and play, building
futures and fulfill dreams."
'The City objects to the sale of the property under Chapter 7 tax sale as the parcel was
identified and currently is designed for drainage and flood control. 'The adjacent
properties called the "Cottage Lane" subdivision was approved for 48 residential units
under Tract Map 32996 and the subject parcel was designed to not only address drainage
and flood control on that property but also currently accepts drainage and flood control
for existing residential properties on Ulla Lane. 'The parcel is graded with rip rap to
function as a drainage and flood control channel. In addition, due to the current property
owner's lack of maintenance the City conducted a nuisance abatement to remove all
overgrown vegetation that was interfering with the drainage and flood control function,
When the Cottage Lane project was sold the subject parcel was inadvertently removed.
Sale of the parcel for development of a residence cannot be done unless the current
drainage and flood control function were replaced.
9S 7.674, 3124
f,30 ti_ MAIN S,R:I I
,'Ki:11D:,I-l0M, CA92530
WYVV : I AIJ _ L I SIM)R! OR0.G
The City of Lake Elsinore respectfully requests to purchase this property as soon as
possible to provide drainage and flood control to existing and future residences on Ulla
Lane. Please contact me at 951-674-3124, Ext, 270 or email at <<>IorCa?leke-elsin�re.orf>,,
Sincerely,
Grant Tai<lor,
Community Development Director
Enclosures
C'i-ry (5F
LAIAF e"') LSI1`iO
September 6, 2016
Michelle Bryant -August
Riverside Countv
Treasurer -Tax Collector
Attcn: Tax Sale Operations
P.O. Box 12005
Riverside, CA 92502
RE: City of Lake Elsinore Request for Tax Default Purchase of APN 379050024-4
Property located on Ulla Lane, Lake Elsinore CA 92530
Dear Ms. Bryant -August:
Thank you very much for your assistance in directing me to the procedures of acquiring
the tax default property identified above. Attached is the application and pertinent
information.
This parcel is vacant and currently a drainage facility that serves current and future
residences on. Ulla Lane. Tract Map 32996 (attached) when originally approved included.
this parcel for drainage on the 48 -unit residential project as well as existing properties on
Ulla Lane, The Tract Map and project went bankrupt and when purchased the drainage
lot was somehow not included in the sale. APN 379050024-4 is critical for area drainage
purposes on Ulla Lane.
The City of Lake Elsinore respectfully requests to purchase this property as soon as
possible to provide drainage to existing and future residences on Ulla Lane. Thank you
for your consideration. Please contact me at 951-674-3124, Ext. 270 or email at
,t.t� toy ni(t�ke c]sni�g� grr,
Sincerely,
<;ra n tTay
Community Development Director
Enclosures
130 Po1i.IN s, 1,1,1 F
IAkl FJLSJJORL CA 92S,M
WWW LAKE -C IS,'Otkf.01 i
CFCY CI on
('1TY Oh LAKE LI_S1NORi
130 $.avium Sheet
C.akc I;IsillON, CR 92..530
Aun: City clerk
WHEN i2EC:6?RI)Ivl):4111z: "1'fT:
Space above tris 1h, f, ra,aerned for Rocorr("', is u.ve
I.XIi,fAl'1 I ROM RI {_ORDIN(i I LL'—
iOVi3RN FA6LN(=Y BUSINESS
I'et' GM (:wiles 6103 and 27383
C-CyVEV AATF TO 1410104 URSK (TrV OF LAKE 1 Y INO1RK MR M A1NTENANCI, OF
OFFAITE 1 ETENTUM BASIN
This COVENANTToI Rh:1�-MU16F, CITY OF I AKFi 1-;1 51NOR FOR
MA1'V i FiVAN('F Oi' t)k!-Rl`l'h ttl "! l�:Ar1 it)� 15!1511 ! r � `o:,er;c zf") ie da'�d s oFFloe antic,.
21, 2010 by 11, C0l"1AGI: [,ANL. LLC, a Cel ilot a a Inr.iied IiabiIhyColl parly {"Doveloper„)
and the CITY OF LAK1- hi,SiNORlq a nuunii;ipal corporation t"My"j. Developer turd City ane
reter'red fo herein individually as tt "Perrrry"and cirllectively ..ts "Parii2.c"
13RB.Aiv1@31,1L
A. Developer is the ownew o1't'he planned residcntiai dcvzlopmeent conunnrAy known
as (Vitt -: o Lane ("Project"). 1Melted in the ( ity all akc 110 noN, (Manly oRiverside, Siete. ;,f
i thlornia, tt(:ich real property is lc_all) des(iihed as Hollows:
WAS I to 46 and 49 fo 5Q inclusive, of"1 ract, No, ;52996, in the
(. ty of I fe f_iisiflo;c, as per Map filed in Look =l1 , Palos 94 to
)(i nclu_ ive,, pf M mpt;, in ilre (Whne of the County P. -corder of
Rivet'side Couniv
(hcrc;inatw,thw "Propcgj,")
It. The I''rojQct, is aubjc(t to I lose Cert un Conditions of ' 1 pl oval for (V I ge, Larne
Specil o Plan No 200542, I'crntatnc Ilact Map leo. 3: ,Ki, and R: ttid:nfi,il Dc i,rn kcvicwNW.
2005-06 (tire "F'aruli/ions oj<A pprowrl" ). ,k Apy of the Condition~ ol'iApproval are on file as a
r' t . ':'dtt `;1; 1 t7 t ,s I. L .0 i l nein I 1 11, 1 dol. POP! I
puhlic rccord and available Iia inspection at the Office of the City Clerk, City of Lakc i'lsino'c,
130 S. Nbin Sheet. Lake. hlsinore, CA 92530.
C. Conditions of Approval No. 15 providers, in pertinent part, that:
Prior to approval of the Pinar Map or ifcieemed appropriate by the City
1 :nghwen prior to issuance of huilc mg perrn" the applicant shall initiate
and complete the fonliaiion ora tlonteoa-ner's Associalion. approved by
Man City, recorded, and in place. All Association documents shall be
approved by City Planning and Quivering and the City Attorney and
recorded, such as the Articles of Incorporation for the Association; stud
Covenants. Conditions and Restrictions (CQ&P.$).
1). Ctnditionsoi"ApprovalNo. 51provides that:
I'he lionu.owner's .Association shall maintain all project improverncnts
and sacilrhes, including the fm4ect steet,, landscaping, pail: facilities,
and drainage improverneins.
1 R 1'Ire Project is sn"ject to that Declaration of Covenants, Conditions, Restrictions
and Reservation of ISaycnlncnts ittr Cottage. I one --"Fred No_ 32996 ("Declarratiorr"). recorded on
l)e�,etnber 1 i MOM as Document TV 2006409 1 8325, in the. Official Records of Riverside.
C alifnrnia. 'I he Declaration provides for the formation of the "Coinage lane I[omc.s I RiA''
(hcrcinafter the "flanmowner's Association"): however, as of the h ffectivc Date, thi^
Iloracowner's As,eociation hers not been lermed.
1� llte drainage plan for the Project includes an adjacent off-site parcel, which is
dc,sci ibed as Parcel 2 of 11roel Map P& 736 [ recorded in Book 20 Page 75 of rMaps, in the
Mce of the County Recorder of Rivet_side ("Rete"dota Basin"). The Retention Basin consists
o apprnsirnatcly )6,100 square. Icct Willi various improved features. including, riprap, consistent
Wnh a 1510perty designed RV use as a retention basin.
G. At the t roti of Cite approval of fennaive'hrar.f No. 3,2996. the� Proper!); and
Rc:mahn Bain Were under ulMd ownership. lkwevcr, the Property was (o rc(ose:d upon b,' a
h:ndOT and &,,hMa(luentli required by Developer herein.
1i. 1rti ic11 cntided t,ssoeiation_Section '2.Q5,.r't IMdaration
provides certain ntaintcnancc obligratioo on die-DechuAm" (mirrcndy, the Developer herein)
and. upon oc, Iminali n, the I Iomeowner's Assatialion, including the following:
(h) Mah9ain and repair Mini 2 and Lettered Lot'A" ofParc.el wrap
No. 7,301 , in the City of Lake F lAnom, as shown by nwp of AN in
Book 21 Page(s) 75 of farce( fvlap;, in the Office oFf l� CoulM
Recordtr o1 Kivrode County_ California ("Adjac-eat Lot") and the
i nnrovemems thmann until such tinge as the AdOwnf I of owner
be ;ins construction of a house, rc,idence, ca oth,'�r dwelling unit on
rhe .y ijecoat. Lot and/or the Adjacent Loi is no longer t scc is e
catch basin IYA the Property.
ti` '>I] z J 1 "AYM06 L Mq da.,, 0 n 1 ICA 0 P .nen 143c 2
'The"Adjacent Lat" as identified A Section 105 is the some read property as the R tem% HUM
hcrarr-
Neither Cite Developer nor the t lonae-onVner's Association have the legal right or
pormission of [ill, current o�^ tier ol, Me Retention Basin to enter onto To Reteu(ion Basin [anti
per linrm the ntahlicl ane e and nalmir requhTd by To Conditions of Approval and the Decimation,
I. As a result orthis inability, the Retention E3ttsin, which provides a critical
di ninage improven)cnt, Yell into ditiepnirand Menu Nino conditions therein posed a risk to the
public's heath, ;afeiy arut welfare. Upon coinoykg mAh the Cit)' of Lake Elshom Municipal
Code and all other legal roquirennents, tlse City has previously entered the Retention Basin on
and rnmediated The nuisartru conditions thereon.
IC. Developer and the (My desire to enter into an agreement Well clarifies the
ohl actions under the Conditions ofApprowd and the Doclaru cal vinh respect to Retar-wrr
Basin Nand until such time as the Developer and/or Ifomeowner'v Association may ranor the
Retention Basin for the purposes of connplying with the Conditions of Approval and the
Welarwion, and m further provide, as neees try. alta( the Cite will he reinahursed for the cost.
n,so iuted with re.rrtedi allu., nuisance conditions within dw Retention Basin as such Conditions
m0a,
L. blit, Parties hove do t,st'mined (hat mahitenance and repuir costs associated ev,ith
elf vle hesins like the Retention H.tw based oil current indust{)%staadatds. location ,and similar
projcats. is $0.18 pet. square Foot.
I I H',RI:PC)RF,, ill consideration at r .niees one tined ha'em, Developer and the Cit;
spree as.. hollows:
i.Vlauaten stet :tn 1 Itcp,tu Irl Rete iu on B in Cay Shall, to the exlh legally
uncal-cci in the c ci t r :e of the n s h„hee lower. e „ter unto the Retemron Hashl under IaasAl
authority as may lic authorized by a court of laevo and perAn n such activities )._ wccssary to
renwdiale inusance and other conch ons :hot post a risk to the puhlic's health Und sajoy, Which
ecUvrties Aatl include maintenance and repsir of the, Reteruiou Basin.
Roma tnscrnc,m. When the Cny IWI f0flin. Sell maintenance; and repuir of the
Rea ninon Boon purmant to Paragraph 1, Hien I), ve.loprrshall leinbt rscthe City for costs
c sonrthly inclined f'or'alch actinm ,s fthc" ar.nua! Fee") as fitlluevs�
R, Ref'-inninr, Jrinuary 1, 2x)17. the P lI1CS tir;rec that the rcnnbwsahle Annual
Pt c shall npt e m eed $8008 par year provided. mwevcr. bconnhig January I. 2018 and
annually nacre ancr, tine Annual Pec ,uahlishrd by this Scrtton shall Cx revised ,annually by
snx o.ns of an autonvnic ,iditminent al the in.:gtn n n ofctault rear based on the average p,mcntagte
eh nee over thc previons calendar v^at wt forth in the Consumer Pr ice Index lot ,dl urban
w
cou,au:rs in the 1,os Ar ;elo,-An to int -R vusrde, area, mclsurcd as o1 the month of Dccernher
in thea, calendar year which ends in rbc, hrcvio�is thcal year.
1) 1 he amount of the os, ie asontdnl> insured by (Ile Cit} shall inelttde, bll.
not be limited to aeasonallic adn)iw, naive cast including the; cost of code l nnxcentent
eI , ,�r,, . .r, �..r,,,\
Pee 3
penuuIle I, out of poclsi. cost ler Cold Moon pe:rformin„ main Instance and tapair and Uu cost of
Cay Inaincenancc: a-cws for niauuenance and repair; and cost of aq uohion of the Retembn
faun should the laity electro do so irrespective ofthe }ear such awl is inclosed, provided,
however. that in no event shall (i) The ceirnbuncruent cxcecd the Annual foo n ie.slaictis c ofthe
total cos: incurred by the Cite; and (ii) that the: coil for thw acquisition of mu Retention Bass that
is included as It coMpOrt of dlo cool reasonably incurse'd by the City shall not cumulatively
exceed '02(1.(100.
3.Gi,p}_,10c unsiic�n i>i_IZ�t ntipn lasm. afar any time the City clam in its sole and
absohnc AsMon, to ti, yuim We Ratention Basin, then lite City sh it iso later than 24 months
tollcsaing, the is rotten request oldie Developer or ids successor havo, inuludi ily 14,
I Ina criwnei s Association, towou(c. at no further cost ui Develops t except Hn c 0wrwivc provided
in Section 2 an tenement, to be reegrded in to which grants Devcloper or the Fiume°owner's
A:,,ucitiiion. ars applicahle, the right to maintain and rcp�!r the Retention Haoin pursuant to the
requncmcnts of the Conditions ol'Approval mrd the Doclaiation. I hereafter, the Developer or
Hv I-hinemcnci's Association. as applicable, shall be responsible for tlx: mann oiancc. allol repair
of mo, R, wenn on Moban, and the Annn it Icee .shall no longer be paid to the City.
41. Assc(mfxum nl C' vcuant h) 1 lrn let)% ori ,1 nci.ttuxi, G_onJnuan> cil�,Approtial.
t'pon the close e of escrow on Dcvr.lopur'i, sale of the Ibr nicth (40°i) in idernial rot in the Plojcct.
rho• I lorn"okenci s Arssociation shall auttnnaticady become responsible Rir all Developer
ohherkjioncd(iscribedhcicin. NotrvithwaroingThe Wil,going. Developer shall hava die riphtat
ani rime prior to the occurronct, of such autornntic shift of iesponsilnlitvtit tip iful, and cause the
F rkworsvuasAssociationInvmMtenintummnttoassume;Developer'sohhcanonsunderOn,
Cover,eIf. II a irtinnxtnt arta asr;ITT) ption, I)c)elo(,crshall ICrouirr
IQipons blc lbI hit, above IciInbuiserttenls to the City until the canner TO occur ol: (a) the ",seance
of cc I I fl iIIe� of, oei:nl:rant- 1ix oil homes iu he Peon-cn or (h) the (les (if ofwl s dem :Isn;aIoil n)
ow icrastoslbiti saosovion orthe t q %kcia ,cr ikon the iI uwov. i„ r , Association ponsr.s::cs
sur( Ami, Ristding 1hur assessmonts to homeowners to call fv llu;, reimburstan inn obli! ahon set
Awth in Section 2. So lona. as Developer is not in dofauh of this Covcuana, the t U% ;hall
cor cider 17eMoper to be in comisliance w4h the Conchtuins of ipprovei conc,ci niog the.
Rutarrhork Basin.
Amendment ofihe Dcckmfiion "Ike City shall coarsen: to teras orman now to (hc
13c. inraiion •.\ hit Ir flee c lop, i dose, s a;nnnbh .lar cssary to condo m to the t _ i , ME)
Ct)t ;n;mt
ii. Notice. All notices, QuIta urnts, or ulhm docuan¢ius which any pan, shall he
rcqu recd or d can c^ to give to any Wirt puny hereunder must be h { a icing and s ial l he ! v, by
On fwo% oms ur MW tight fn!lowin ways: (i) ht personal "over" pr 00 by atoning nits
udie, odd (t6ow. and by depositing it registered or testified mai, posit prapaid, in the boar's
Sows cs mail 11 so delivered or marled, each such nolicc <taternum. or War trot uncut shrill bc.
couch .;iveh� deenaci to have been given M'cn personally dellecrt. i or tort)dight (48) hours
a".tc. the da;e Ofmailinr, (e>:cluding ` ,1iurdd Srmday and f:xlss al hol-days> an tie ruse may
bc. "I'Ile adr.iosscs Arlumosmv other conununica[ions, until fudtcrnoticc. ere:
u ; i , . �a u ' rs:: !NYC 'I
Dowkyer: 1 E CO'T'TAGI LANG, IA,C
179 Calle Magdalena 0201
Encinitas, CA 92024
Attn: Lake C:lsinorc Project
cit -y: CITY OF LAKE GC,Sl;NORk,
130 S. Main Street
Lake 1- sinore, CA 92730
AUn: City (Jerk
7. lthitr_,ytTttn of I)i:pnncs. Any dispute between the Parties concunnu;this
Covenant ah 311 be settled huvveen them by Whig arbAntirnt in so o otdance with the.
C(lnuncrcial Arbitration rules of the American ArbW*don Association- dudsnant upon tyre
aec a d rende 3d by the a&dmwqq may be entered in any wart havi ngjurisdwtion thereof. If
the eantutoversv is rel to WhAcin, any be to initiate arbitration shall be paid by the
int "N't party, Lau the cost of arbitration shall ultimately he horns as de- ermined by wo
Ao I:iabdnv 1 ; r 9, _Culure to Fxr Terse ('ulice Powcr_5. ncveloper ockiRn ,�ieuves that
the City does not a uroul) possess a properiy door t in One Rewil on Basin and that tlu Cily's
Wily to emer urno The Retention Haan as of the. Effective: Date arises directly Crum the Cily
cxo ise ofwG polite p oal`; to protea the health and safety of people. and property within Ine
C'uys municipal bonndar is Aeaordilit" ly, to elle extent zhat Conditions within the Retention
Basin do not , ere n hazani to the public's health and so W or, if the City is nnaWc to secure the
naee ,nary pal n Kim I from a court of laev to enter the Retention Basin, or either the Developer or
he C Innsot:ne� _s tssoc�; t'ar her: t.r,r,d to orae h,�rac the `.'.ity as provided llocin, Cllr City tifrail
have no obligminn to enter unto the Retention Loin as othcrwisc provided in Section 1.
0. `v i,�n�nur,ll to Bullus Cent i)evti lerpe+r, 'The City ackvimv ledges that Developer
intends to «s m,t its rights and ob14;;lions under this Covenam to a thkdyarty developer in
c otionction wide D vc.loper',; sr.rle ordw Project. Provided drat Che subsequent rlcvel.oper shall
C.ccutc n wa ittol asstnnp6on of tlu • Covenant in such font as reasonably anccptabhc to counsel
Wor the US, the City hcteh)eonsa u . to sucl: assirnIrunt.
%. R le e of (r,v cnalit t 1p m iItt n su nptivn of C ovarian Provided th tt the
D, velol er is not in default of this (nv ur urs and the h tn-tsr;urned the
L7evefoper s trbCeation an provided in Section 4. City shall promptly upon slier r quest of
Developer, deliver out monument, duly acknowledged, releasing rhes ('overwa as an excelninn to
title to lite Properly. provided, howevor, dost the Covenant shall reattain mini ceable as to the
Parties and successors therato in nil other respects.
11, 'No Obliestunt nl,l knncownor�. Only the Ileveloper and/or Honteorvnor's
;association and ally assrpecs of th, Developer wal/ur I lonteotvno Association.sltal! !tc Kahle
for the Developerobhgaiions desoibed herein. The tru ster arany portion of lite Io1yect to a
C'!,Ii __. . , r( 1 , ❑.yc I :,i a H,II tricot n ' �, ) oraev 1',rhC j
inside iii al purchase- shall not cueatc any obligations for such resutentinI Ianchaser under (Itis
Covenant,
2, tvlorin, t t' hrotucltpg. No portion ofthis Agreement orany ancndrncnt or
vioLaion the!cofshall operalc to defeat or r,Iudcr invalid, in whole a in pon 1, the rights of the
hcncficiary ins uror, guarantor, or holder of any mortgage or deed of out owumberin_; any
pUrh(in ofChe Project,
13. 1'i eciis e `>ttc_ This Covenant shall become effective upon A recordation in the.
Office': of Tic Court, Recorder of Iv.rers & County.
It (evenenus Ketimine, with the I .utd. The kens and conditions of Chis f Ovenani
shall constitute a covenant running with and bulling uta land to accordance with the provisions
ofCatifornia Civil Code Section 1468, Accmdhgly. the PNWuM and catch Ielgal hof therein shall
hereafter the held, sold conveyed toot lgagcd, eneumhr read, leased. rented, used, occupied and
mipmvod subject to the, aforornentioned amdidons, all of (which shrill inn with rbcs Property and
ac h le�.,tal let shall be binding on all parties s, I:avin any rie,ht. title or interest, in the
Property tend each legal lot therein w an)part tlicwofl the a Puss, stw(X"SOrS zed assigns.
15. Mis_ceHaineous. An used in this Covenant. all \vords in the masculino . leminina or
hooter Bend and tine 1 lural or singular number shall each he construed to include the others
whenever the context so requirees. This Covenant shall be hinding upon and more to the AnoOl.
of the mza}?ecuve successors and assigns of the partics hereto. "Phis Covenant shall be rove ned
b} and" construed in accror(anee tt'th the la"A orwe State ornui wins. Time is ni'Ve essonec
of this Covenant. Nothing herein shall be consnued Co m zkc any 011e, part) a joint venturer or
partner wills Developer for any purpose whatsoever. No change in or addition to, or waiver or
n t nJ n pion ,+I is Covenant or any part thereof, shall In valid unlc s in writing and signed on
be half of each o0he parties hereto ',very provision of this Covenant is hat n d to be
sa yerahla. It airy awrn or IproAsion hereof is illepal for any reason wfiatsoover. such illegality or
unenfnrccahility shall not affect the validity ofthe remainder of this Covenant.
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IN WITNESS WH LR I Orit the Parties hereto haveoxecuted ods Uvonm nn the day and
year set halls below.
AT FEST:
MY Clerk
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VICINITY MAP
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CITY COUNCIL
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City of Lake Elsinore 130 South Main Street
Lake Elsinore, CA 92530
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LAKE:'.{ �LSIIIOROk
""— Text File
File Number: RES 2014-010
Agenda Date: 1/24/2017 Version: 1 Status: Public Hearing
In Control: City Council File Type: Resolution
Agenda Number: 13)
City of Lake Elsinore Page 1 Printed on 111912017
AOL
CITY OF
LAKE LS1 I` ORE.
D IUAM rXTREMI41
REPORT TO CITY COUNCIL
To: Honorable Mayor and Members of the City Council
From: Grant Yates, City Manager
Prepared by: Jason Simpson, Assistant City Manager
Date: January 24, 2017
Subject: Annexation Proceedings for Community Facilities District No. 2015-1
(Safety Services)
Recommendation
adopt A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE,
CALIFORNIA, ACTING AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES
DISTRICT NO. 2015-1 OF THE CITY OF LAKE ELSINORE (SAFETY SERVICES),
ANNEXING TERRITORY TO COMMUNITY FACILITIES DISTRICT NO. 2015-1 OF
THE CITY OF LAKE ELSINORE (SAFETY SERVICES), AND CALLING ELECTIONS
THEREIN, and,
adopt A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE,
CALIFORNIA, ACTING AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES
DISTRICT NO. 2015-1 OF THE CITY OF LAKE ELSINORE (SAFETY SERVICES)
CERTIFYING THE RESULTS OF THE JANUARY 24, 2017 ANNEXATION AND
SPECIAL TAX ELECTIONS
Background
The City of Lake Elsinore (the "City') formed the City of Lake Elsinore Community Facilities
District No. 2007-4 (MaKenna Court) (the "District") in 2007 pursuant to the Mello -Roos
Community Facilities District Act of 1982. The District consists of Tract No. 33846 and is located
south of Lakeshore Drive, west of Machado, east of Terra Cotta Road and North of Zieglinder
Drive. SAM-MaKenna, LLC, is the landowner within the District (the "Developer").The
development within the District is expected to include approximately 81 single family homes at
build -out.
While the District was formed in 2007, homebuilding has not yet commenced. Due to revisions
in the proposed product mix within the District, the Developer requested and the District
undertook proceedings to amend the Rate and Method of Apportionment of Special Taxes,
increase the amount of bonded indebtedness authorized to be incurred by the District and
revise the term of the special tax levy to be 40 years from fiscal year 2017-18. In connection
therewith, the Developer has agreed to annex its property into Community Facilities District No.
2015-1 of the City of Lake Elsinore (Safety Services) ("CFD 2015-1") (the "Annexation").The
District is currently in CFD 2007-1 (Law Enforcement, Fire and Paramedic Services). In
Annexation to CFD 2015-1
January 24, 2017
Page 2 of 2
connection with the Annexation, the City will cancel the existing special tax lien of CFD 2007-1
within the District. On December 13, 2016, the City Council, acting as the legislative body of
CFD 2015-1, adopted a resolution declaring its intention to annex the District into CFD 2015-1.
The proceedings to undertaken at this meeting will complete the proposed Annexation of
property to CFD 2015-1.
Documents to be Approved
Following the public hearing to be held, approval of the first resolution will call for an election to
be held with respect to the Annexation. The City has received a certificate of the Registrar of
Voters certifying that there are less than 12 Registered Voters residing with the District during
the 90 days prior to the time of the public hearing. Accordingly, the election to be held will be a
landowner election pursuant to which the landowners are the sole eligible voters within the
District. SAM-Mckenna LLC has also executed a consent and waiver to certain election law
requirements and to allow the election to be conducted immediately following the public hearing.
Following the holding of the election, the City Council will be asked to certify the election results
and assuming the passage of the propositions, the property within the District will be annexed to
CFD 2015-1 and the City Clerk will be instructed to record a notice of special tax lien of CFD
2015-1 on the property within the District. The property within the District will thereafter be
subject to the special tax levy of CFD 2015-1.
Fiscal Impact
The Developer has made a deposit to pay for the costs of the Annexation.
CFD 2015-1 will annually levy special taxes on all of the taxable property within the District in
accordance with the Rate and Method of Apportionment in order to pay for the costs of services
and administration of CFD 2015-1.
Exhibits
A. Resolution - Annexing to CFD 2015-1
B. Resolution - Certifying Election Results Annexation to CFD 2015-1
C. RMA CFD 2015-1 (Safety Services)
RESOLUTION NO. 2017 -
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE,
CALIFORNIA, ACTING AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES
DISTRICT NO. 2015-1 OF THE CITY OF LAKE ELSINORE (SAFETY SERVICES),
ANNEXING TERRITORY TO COMMUNITY FACILITIES DISTRICT NO. 2015-1 OF THE
CITY OF LAKE ELSINORE (SAFETY SERVICES), AND CALLING ELECTIONS
THEREIN
Whereas, on March 8, 2016, the City Council (Council) of the City of Lake Elsinore adopted
Resolution No. 2016-022, declaring its intention to establish Community Facilities District No.
2015-1 of the City of Lake Elsinore (Safety Services) (CFD No. 2015-1" or the District) pursuant
to the Mello -Roos Community Facilities Act of 1982, as amended, being Chapter 2.5 of Part 1 of
Division 2 of Title 5 of the Government Code of the State of California (Act); and,
Whereas, after a duly noticed public hearing, the City Council adopted Resolution No. 2016-035
(the "Resolution of Formation") establishing CFD No. 2015-1 and calling a special election therein
to authorize (i) the levy of special taxes pursuant to the rate and method of apportionment of the
special tax, as set forth in Attachment "A" attached to the Resolution No. 2016-022 (the "Original
Rate and Method"), and (ii) the establishment of an appropriations limit for CFD No. 2015-1; and,
Whereas, pursuant to a petition signed by SAM-MCKENNA, LLC, an Oregon limited liability
company (the "Owner"), on December 13, 2016, the City Council adopted Resolution No. 2016-
119 (the "Resolution of Intention"), stating its intention to annex the territory described in
Attachment "A" to the Resolution of Intention (the "Annexation Territory") to the District; and,
Whereas, a notice of a public hearing to be held on January 24, 2017, was published and mailed
to all landowners of the land proposed to be included within the Annexation Territory as required
by law relative to the intention of the City Council to annex the Annexation Territory to the District
and to levy a special tax in accordance with the Rate and Method (as defined below); and,
Whereas, on January 24, 2017, this City Council held a noticed public hearing as required by law
relative to the proposed annexation of the Annexation Territory, the levy of special taxes therein
in accordance with the attached as Attachment "B" to the Resolution of Intention (the "Rate and
Method"), which Rate and Method is identical to the Original Rate and Method in all respects
except that Appendix A thereto has been updated in accordance with the terms of the Original
Rate and Method to reflect the annexation described herein; and,
Whereas, at the January 24, 2017, public hearing all persons desiring to be heard on all matters
pertaining to the proposed annexation of the Annexation Territory to the District and the levy of
the special taxes within the Annexation Territory in accordance with the Rate and Method were
heard and a full and fair hearing was held; and,
Whereas, the Annexation Territory is currently located within City of Lake Elsinore Community
Facilities District No. 2007-1 (Law Enforcement, Fire and Paramedic Services) ("CFD No. 2007-
1") and the Owner and the District desire to cancel the special tax lien of CFD No. 2007-1 on the
Annexation Territory upon its annexation to the District;
CC Reso No. 2017
Page 2 of 6
Whereas, at the public hearing, evidence was presented to the City Council on the matters before
it, and the proposed annexation of the Annexation Territory to the District and the levy of special
taxes within the Annexation Territory in accordance with the Rate and Method was not precluded
by a majority protest of the type described in Section 53339.6 of the Act, and this City Council at
the conclusion of the hearing is fully advised as to all matters relating to the annexation of the
Annexation Territory and the levy of the special taxes in accordance with the Rate and Method;
and,
Whereas, the City Council has determined that there have been fewer than twelve registered
voters residing in the Annexation Territory for the period of 90 days prior to January 24, 2017, and
that the qualified electors in Annexation Territory are the landowners therein; and,
Whereas, on the basis of all of the foregoing, the City Council has determined at this time to
proceed with the annexation of the Annexation Territory to the District and to call an election within
the Annexation Territory to authorize the levy of special taxes pursuant to the Rate and Method;
NOW, THEREFORE, THE CITY COUNCIL OF CITY OF LAKE ELSINORE, ACTING AS THE
LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 2015-1 OF THE CITY OF
LAKE ELSINORE (SAFETY SERVICES) DOES HEREBY RESOLVE, DETERMINE AND
ORDER AS FOLLOWS:
Section 1. Each of the above recitals is true and correct
Section 2. The City Council hereby finds and determines that all prior proceedings taken with
respect to the establishment of the District and the proposed annexation of the Annexation
Territory to the District were valid and in conformity with the requirements of law, including the
Act.
Section 3. The map showing the original boundaries of the District designated as "Map of
Proposed Boundaries of CFD No. 2015-1 of the City of Lake Elsinore (Safety Services)," which
map is on file in the office of the City Clerk and was recorded pursuant to Sections 3111 and 3113
of the Streets and Highways Code in the City of County Book of Maps of Assessment and
Community Facilities Districts in the Assessor -County Clerk -Recorder's office of the County of
Riverside in Book No. 79 Page Nos. 45-46, on March 14, 2016, as Instrument No. 2016-
00978338.
The map showing the Annexation Territory proposed to be annexed to the District and be
made subject to taxation are as shown which map is on file in the office of the City Clerk and was
recorded pursuant to Sections 3111 and 3113 of the Streets and Highways Code in the City of
County Book of Maps of Assessment and Community Facilities Districts in the Assessor -County
Clerk -Recorder's office of the County of Riverside in Book No. 80 Page No. 31, on December 15,
2016, as Instrument No. 2016-0560596.
Section 4. The City Council hereby adopts the Rate and Method attached as Attachment "A" to
the Resolution of Intention as the applicable rate and method for the Annexation Territory. Except
where funds are otherwise available, it is the intention of the City Council, subject to the approval
of the eligible voters within the Annexation Territory, to levy the proposed special taxes at the
rates within the Annexation Territory set forth in the Rate and Method on all non-exempt property
within the Annexation Territory sufficient to pay for (i) the Services (as defined in the Rate and
Method), (ii) fund an operating reserve for the costs of Services as determined by the City, and
(v) Administrative Expenses (as defined in the Rate and Method). The District expects to incur,
2
CC Reso No. 2017
Page 3 of 6
and in certain cases has already incurred, Administrative Expenses in connection with the
annexation of the Annexation Territory to the District. The rate and method of apportionment of
the special tax applicable to the Annexation Territory is described in detail in Attachment "A" to
the Resolution of Intention which is incorporated herein by this reference, and the Council hereby
finds that Attachment "A" to the Resolution of Intention contains sufficient detail to allow each
landowner within the Annexation Territory to estimate the maximum amount that may be levied
against each parcel. The special tax is apportioned to each parcel on the foregoing bases
pursuant to Section 53325.3 of the Act and such special tax is not on or based upon the ownership
of real property.
Section 5. The Assistant City Manager will be responsible for preparing annually, or authorizing
a designee to prepare, a current roll of special tax levy obligations by assessor's parcel number
and will be responsible for estimating future special tax levies pursuant to Section 53340.2 of the
Act. The special tax may be levied for such period as the Services are needed, as further
described in Attachment "B" hereto.
Section 6. Upon recordation of a notice of special tax lien pursuant to Section 3114.5 of the
Streets and Highways Code, a continuing lien to secure each levy of the special tax shall attach
to all non-exempt real property in the Annexation Territory and this lien shall continue in force and
effect until the levy of the special tax by the District ceases in accordance with the Rate and
Method.
Section 7. Consistent with Section 53325.6 of the Act, the Council finds and determines that the
land within the Annexation Territory, if any, devoted primarily to agricultural, timber or livestock
uses and being used for the commercial production of agricultural, timber or livestock products is
contiguous to other land within the Annexation Territory and will be benefited by the Services
proposed to be provided within CFD No. 2015-1 and the Annexation. Territory..
Section 8. It is hereby further determined that there is no ad valorem property tax currently being
levied on property within the Annexation Territory for the exclusive purpose of paying for the same
services as are proposed to be provided by CFD No. 2015-1.
Section 9. Written protests against the annexation of the Annexation Territory to the District and
the levy of the special tax therein have not been filed by one-half or more of the registered voters
within the boundaries of the Annexation Territory to the District or by the property owners of one-
half or more of the area of land within the boundaries of the Annexation Territory. The City Council
hereby finds that the proposed special tax for the Annexation Territory has not been precluded by
a majority protest pursuant to Section 53324 of the Act.
Section 10. An election is hereby called for the Annexation Territory on the propositions of
annexation to the District and the levying the special tax on the property within such Annexation
Territory, pursuant to Section 53339.7 of the Act. The propositions to be placed on the ballot for
the Annexation Territory are attached hereto as Attachments "A." Following certification of a
landowner vote in favor of the annexation of the Annexation Territory to the District and the levy
of the special tax therein, the District shall record a notice of cancellation of special tax lien with
respect to CFD No. 2007-1 for the Annexation Territory.
Section 11. The date of the foregoing elections for each Proposed Annexation Territory shall be
January 24, 2017, or such later date as is consented to by the City Clerk and the landowners
within the Annexation Territory. The City Clerk shall conduct the elections. Except as otherwise
provided by the Act, the elections shall be conducted by personally delivered or mailed ballot and,
CC Reso No. 2017
Page 4 of 6
except as otherwise provided by the Act, the elections shall be conducted in accordance with the
provisions of law regulating elections of the City insofar as such provisions are determined by the
City Clerk to be applicable.
Section 12. It is hereby found that there are not more than twelve registered voters within the
territory of the Annexation Territory, and, pursuant to Section 53339.7 of the Act, each landowner
who is the owner of record on the date hereof, or the authorized representative thereof, shall have
one vote for each acre or portion thereof that he or she owns within the Annexation Territory.
Section 13. This Resolution shall be effective upon its adoption.
Passed and Adopted this 24`" day of January, 2017,
Robert M. Magee, Mayor
Attest:
Susan M. Domen, MMC
City Clerk
STATE OF CALIFORNIA)
COUNTY OF RIVERSIDE)ss.
CITY OF LAKE ELSINORE)
I, Susan M. Domen, MMC, City Clerk of the City of Lake Elsinore, California, do hereby certify
that Resolution No. was adopted by the City Council of the City of Lake Elsinore,
California, at the Regular meeting of January 24, 2017, and that the same was adopted by the
following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
rd
Susan M. Domen, MMC
City Clerk
CC Reso No. 2017
Page 5 of 6
ATTACHMENT"A"
SAMPLE
BALLOT
COMMUNITY FACILITIES DISTRICT NO. 2015-1
OF CITY OF LAKE ELSINORE (SAFETY SERVICES)
ANNEXATION AND SPECIAL TAX ELECTION
January 24, 2017
This ballot represents _ votes.
To vote, write or stamp a cross ("+° or "X") in the voting square after the word "YES" or
after the word "NO". All marks otherwise made are forbidden. All distinguishing marks are
forbidden and make the ballot void.
If you wrongly mark, tear or deface this ballot, return it to the City Clerk of City of Lake
Elsinore and obtain another.
PROPOSITION A: Shall the territory described in Attachment "A" of
Resolution No. 2016-119 of the City Council of the City of Lake Elsinore be
annexed to Community Facilities District No. 2015-1 of the City of Lake YES
Elsinore (Safety Services)?
NO
PROPOSITION B: Shall a special tax with a rate and method of
apportionment as provided in Attachment "C" to Resolution No. 2016-119 YES
of the City Council of the City of Lake Elsinore be levied to pay for the
Services and other purposes described in Resolution No. 2016-035? NO
ATTACHMENT A
RESOLUTION NO. 2017 -
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE,
CALIFORNIA, ACTING AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES
DISTRICT NO. 2015-1 OF THE CITY OF LAKE ELSINORE (SAFETY SERVICES)
CERTIFYING THE RESULTS OF THE JANUARY 24, 2017 ANNEXATION AND
SPECIAL TAX ELECTIONS
Whereas, the City Council (the "City Council") of City of Lake Elsinore (the "City') called and duly
held consolidated elections on January 24, 2017 within the boundaries of certain territory (the
"Annexation Territory") described in Attachment "A" to Resolution No. 2016-119 adopted by the
City Council on December 13, 2016, which territory is to be annexed to Community Facilities
District No. 2015-1 (Safety Services) of the City of Lake Elsinore ("Community Facilities District
No. 2015-1" or the "District') pursuant to Resolution No. for the purpose of presenting to
the qualified electors within the Annexation Territory the propositions attached hereto as
Attachment A; and,
Whereas, there has been presented to this City Council a certificate of the City Clerk canvassing
the results of the election, a copy of which is attached hereto as Attachment B;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, ACTING AS
THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 2015-1 OF THE CITY
OF LAKE ELSINORE (SAFETY SERVICES), DOES HEREBY RESOLVE, DETERMINE AND
ORDER AS FOLLOWS:
Section 1. Each of the above recitals is true and correct and is adopted by the legislative body
of the District.
Section 2. Propositions A and B presented to the qualified electors of the Annexation Territory
on January 24, 2017 were approved by more than two-thirds of the votes cast at the election held
for the Annexation Territory and Propositions A and B each has carried. The City Council, acting
as the legislative body of the District, is hereby authorized to levy on the land within the Annexation
Territory, which is hereby annexed to the District in accordance with Proposition A, the special
tax described in Proposition B for the purposes described therein.
Section 3. The City Council, acting as the legislative body of the District, is hereby authorized
to take the necessary steps to levy the special tax authorized by Proposition B in accordance with
Ordinance No. 2016-1356 approved by the City Council, acting as the legislative body of the
District.
Section 4. The City Clerk is hereby directed to record in the Office of the County Recorder
within fifteen days of the date hereof a notice of special tax lien for the Annexation Territory which
Bond Counsel to the District shall prepare in the form required by Streets and Highways Code
Section 3114.5.
CC Reso No. 2017
Page 2 of 4
Passed and Adopted this 241h day of January, 2017.
Robert M. Magee, Mayor
Attest:
Susan M. Domen, MMC
City Clerk
STATE OF CALIFORNIA)
COUNTY OF RIVERSIDE) ss.
CITY OF LAKE ELSINORE)
I, Susan M. Domen, MMC, City Clerk of the City of Lake Elsinore, California, do hereby certify
that Resolution No. was adopted by the City Council of the City of Lake Elsinore,
California, at the regular meeting of January 24, 2017, and that the same was adopted by the
following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
PA
Susan M. Domen, MMC
City Clerk
ATTACHMENT"A"
SAMPLE
BALLOT
COMMUNITY FACILITIES DISTRICT NO. 2015-1
OF CITY OF LAKE ELSINORE (SAFETY SERVICES)
ANNEXATION AND SPECIAL TAX ELECTION
January 24, 2017
This ballot represents _ votes.
To vote, write or stamp a cross ('Y' or "X") in the voting square after the word "YES" or
after the word "NO". All marks otherwise made are forbidden. All distinguishing marks are
forbidden and make the ballot void.
If you wrongly mark, tear or deface this ballot, return it to the City Clerk of City of Lake
Elsinore and obtain another.
PROPOSITION A: Shall the territory described in Attachment "A" of
Resolution No. 2016-119 of the City Council of the City of Lake Elsinore be
annexed to Community Facilities District No. 2015-1 of the City of Lake YES
Elsinore (Safety Services)?
NO
PROPOSITION B: Shall a special tax with a rate and method of
apportionment as provided in Attachment "C" to Resolution No. 2016-119 YES
of the City Council of the City of Lake Elsinore be levied to pay for the
Services and other purposes described in Resolution No. 2016-035? NO
ATTACHMENT A
ATTACHMENT"B"
CERTIFICATE OF CITY CLERK
AS TO THE RESULTS OF THE CANVASS OF THE ELECTION RETURNS
I, Susan M. Domen, MMC, City Clerk of the City of Lake Elsinore, do hereby certify that I
have examined the returns of the Annexation and Special Tax Election for City of Lake Elsinore
Community Facilities District No. 2015-1 (Safety Services) (the "District'). The election was held
in the Lake Elsinore Cultural Center at 183 North Main Street, Lake Elsinore, California, on
December 13, 2016. 1 caused to be delivered ballots to each qualified elector. (_) ballots
were returned.
I further certify that the results of said election and the number of votes cast for and against
Propositions A and B are as follows:
PROPOSITION A
PROPOSITION B
YES:
YES:
NO:
NO:
TOTAL:
TOTAL:
Dated this 24`h day of.!anuary, 2017.
Susan M. Domen, MMC
Susan M. Domen, MMC, City Clerk
City of Lake Elsinore
ATTACHMENT B
RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX FOR
COMMUNITY FACILITIES DISTRICT NO. 2015-1 (SAFETY SERVICES)
OF THE CITY OF LAKE ELSINORE
A Special Tax (the "Special Tax') shall be levied on and collected from each Assessor's Parcel (defined
below) in Community Facilities District No. 2015-1 (Safety Services) (the "CFD No. 2015-1" or "CFD";
defined below), in each Fiscal Year, (defined below), commencing in the Fiscal Year beginning July 1, 2016,
in an amount determined by the City Council of the City of Lake Elsinore, acting in its capacity as the
legislative body of CFD No. 2015-1, by applying the rate and method of apportionment set forth below.
All of the real property in CFD No. 2015-1, unless exempted by law or by the provisions herein, shall be
taxed to the extent and in the manner provided herein.
A. DEFINITIONS
"Administrative Expenses" means the actual or reasonably estimated costs directly related to the
formation, annexation, and administration of CFD No. 2015-1 including, but not limited to: the costs
of computing the Special Taxes and preparing the annual Special Tax collection schedules (whether
by the City or designee thereof or both); the costs to the City, CFD No. 2015-1, or any designee thereof
associated with fulfilling the CFD No. 2015-1 reporting requirements; the costs associated with
responding to public inquiries regarding the Special Taxes; the costs of the City, CFD No. 2015-1 or
any designee thereof related to an appeal of the Special Tax; and the City's annual administration fees
and third party expenses. Administrative Expenses shall also include amounts estimated or advanced
by the City or CFD No. 2015-1 for any other administrative purposes of CFD No. 2015-1, including
attorney's fees and other costs related to commencing and pursuing to completion any foreclosure of
delinquent Special Taxes.
"Administrator" means the City Manager of the City of Lake Elsinore, or his or her designee.
"Assessor's Parcel" means a lot or parcel of land that is identifiable by an Assessor's Parcel Number
by the County Assessor of the County of Riverside.
"Assessor's Parcel Map" means an official map of the Assessor of the County designating parcels by
Assessor's Parcel Number.
"Assessor's Parcel Number" means the identification number assigned to a parcel by the County
Assessor of the County of Riverside.
"CFD" or "CFD No. 2015-1" means the City of Lake Elsinore Community Facilities District No. 2015-1
(Safety Services).
"City" means the City of Lake Elsinore.
"County" means the County of Riverside.
"Developed Property" means all Assessor's Parcels of Taxable Property for which a building permit
for new construction has been issued on or prior to March 1 preceding the Fiscal Year in which the
Special Tax is being levied.
City of Lake Elsinore Page 1
Community Facilities District No. 2015-1 (Safety Services)
"Developed Multi -Family Property" means all Assessor's Parcels of Developed Property for which a
building permit or use permit for the construction of a residential structure with two or more
Residential Units that share a single Assessor's Parcel Number, as determined by the Administrator,
has been issued prior to March 1 preceding the Fiscal Year in which the Special Tax is being levied.
"Developed Single Family Property" means any residential property other than a Developed Multi -
Family Property on an Assessor's Parcel for which a building permit for new construction has been
issued by the City on or prior to March 1 preceding the Fiscal Year in which the Special Tax is being
levied.
"Exempt Property" means all Assessors' Parcels designated as being exempt from the Special Tax as
provided for in Section E.
"Fiscal Year" means the period from and including July V of any year to and including the following
June 30`n
"Maximum Special Tax" means the Maximum Special Tax, as applicable, levied within the CFD for
any Fiscal Year.
"Future Annexation Area" means any area included inside the boundaries of the proposed boundary
map included in Appendix C.
"Proportionately" means for Taxable Property, that the ratio of the actual Special Tax levy to the
Maximum Special Tax is the same for all Assessor's Parcels.
"Residential Unit" or "RU" means a residential unit that is used or intended to be used as a domicile
by one or more persons, as determined by the Administrator.
"Residential Property" means all Assessor's Parcels of Taxable Property upon which completed
Residential Units have been constructed or for which building permits have been or may be issued for
purposes of constructing one or more Residential Units.
"Services" means services permitted under the Mello -Roos Community Facilities Act of 1982
including, without limitation, those services authorized to be funded by CFD No. 2015-1 as set forth
in Appendix B.
"Special Tax" means the Special Tax to be levied in each Fiscal Year on each Assessor's Parcel of
Taxable Property.
"Special Tax Requirement" means the amount to be collected in any Fiscal Year to pay for certain
costs as required to meet the public safety needs of CFD No. 2015-1 in both the current Fiscal Year
and the next Fiscal Year. The costs to be covered shall be the direct costs for (i) police protection
services, (ii) fire protection and suppression services, (iii) paramedic services, (iv) fund an operating
reserve forthe costs of Services as determined by the Administrator, and (v) Administrative Expenses.
Under no circumstances shall the Special Tax Requirement include funds for bonds.
"Taxable Property" means all Assessor's Parcels within CFD No. 2015-1, which are not Exempt
Property.
City of Lake Elsinore Page 2
Community Facilities District No. 2015-1 (Safety Services)
"Taxable Unit" means a Residential Unit.
B. RATE AND METHOD OF APPORTIONMENT OF MAXIMUM SPECIAL TAX RATES
As of July 1 of each Fiscal Year, commencing July 1, 2016, the Council shall determine the Special Tax
Requirement and shall levy the Special Tax upon each of the Assessor's Parcels within the CFD which
constitute a Developed Single Family Property or a Developed Multi -Family Property until the
aggregate amount of Special Tax equals the Special Tax Requirement. The Special Tax shall be levied
Proportionately on all Assessor's Parcels of Developed Property up to 100% of the applicable
Maximum Special Tax to satisfy the Special Tax Requirement.
The Maximum Special Tax for Fiscal Year 2016-2017 for a Developed Single Family Property and
Developed Multi -Family Property are shown below in Table 1.
TABLE 1
MAXIMUM SPECIAL TAX RATES
FISCAL YEAR 2016-2017
Description
Taxable
Unit
Maximum
Special Tax
Developed Single Family Property
RU
$685
Developed Multi -Family Property
RU
$419
Increase in the Maximum Special Tax
On each July 1, commencing on July 1, 2017 the Maximum Special Tax for Developed Property shall
increase by i) the percentage increase in the Consumer Price Index (All Items) for Los Angeles -
Riverside - Orange County (1982-84 = 100) since the beginning of the preceding Fiscal Year, or ii) by
four percent (4.0%), whichever is greater.
No Special Tax shall be levied on property which, at the time of adoption of the Resolution of
Formation for CFD No. 2015-1 is an Exempt Property.
C. FUTURE ANNEXATIONS
It is anticipated that additional properties will be annexed to CFD No. 2015-1 from time to time.
Pursuant to California Government Code section 53339 et seq., the rate and method adopted for the
annexed property shall reflect the Maximum Special Tax rate at the then current year's Maximum
Special Tax rate as set forth in Appendix A.
D. TERM OF SPECIAL TAX
For each Fiscal Year, the Maximum Special Taxes shall be levied as long as the Services are being
provided within the boundaries of CFD No, 2015-1.
City of Lake Elsinore Page 3
Community Facilities District No. 2015-1 (Safety Services)
E. EXEMPTIONS
The City shall classify as Exempt Property within CFD No. 2015-1, any Assessor's Parcel in any of the
following categories; (i) Assessor's Parcels which are owned by, irrevocably offered for dedication,
encumbered by or restricted in use by any public entity; (ii) Assessor's Parcels with public or utility
easements making impractical their utilization for other than the purposes set forth in the easement;
(iii) Assessor's Parcels which are privately owned but are encumbered by or restricted solely for public
uses; (iv) any Assessor's Parcel which is in use in the performance of a public function as determined
by the Administrator; or (v) any Assessor's Parcel which is not a Developed Single Family Property or
a Developed Multi -Family Property.
F. APPEALS
Any property owner claiming that the amount or application of the Special Taxes are not correct may
file a written notice of appeal with the City not later than twelve months after having paid the first
installment of the Special Tax that is disputed. The Administrator shall promptly review the appeal,
and if necessary, meet with the property owner, consider written and oral evidence regarding the
amount of the Special Tax, and rule on the appeal. If the Administrator's decision requires that the
Special Tax for an Assessor's Parcel be modified or changed in favor of the property owner, a cash
refund shall not be made, but an adjustment shall be made to the Special Tax on that Assessor's Parcel
in the subsequent Fiscal Year(s).
G. MANNER OF COLLECTION
The Maximum Special '(axes levied in each Fiscal Year shall be collected in the same manner as
ordinary ad valorem property taxes are collected and shall be subject to the same penalties and the
same procedure, sale, and lien priority in case of delinquency as is provided for ad valorem taxes.
However, the District may collect the Special Tax at a different time or in a different manner if
necessary to meet its financial obligations.
The Maximum Special Taxes when levied shall be secured by the lien imposed pursuant to Section
3115.5 of the Streets and Highways Code. This lien shall be a continuing lien and shall secure each
levy of Maximum Special Taxes. The lien of Maximum Special Taxes shall continue in force and effect
until the Special Tax ceases to be levied in the manner provided by Section 53330.5 of the Government
Code.
City of Lake Elsinore Page 4
Community Facilities District No. 2015-1 (Safety Services)
APPENDIX A
CITY OF LAKE ELSINORE
COMMUNITY FACILITIES DISTRICT NO. 2015-1
(SAFETY SERVICES)
ANNEXATION SUMMARY
Safety Services -It is estimated that the cost of providing police, fire protection, and paramedic services
being funded by the Special Tax for the Community Facilities District No. 2015-1 (Safety Services) will be
as follows for the Fiscal Year 2016-2017:
$685 per residential unit for Developed Single Family Residential Property
$419 per residential unit for Developed Multi -Family Residential Property
Annual Escalation - On each July 1, commencing on July 1, 2017 the Maximum Special Tax for Developed
Property shall increase by i) the percentage increase in the Consumer Price Index (All Items) for Los
Angeles - Riverside - Orange County (1982-84 = 100) since the beginning of the preceding Fiscal Year, or
ii) by four percent (4.0%), whichever is greater.
City of Lake Elsinore Page 5
Community Facilities District No. 2015-1 (Safety Services)
No. of
Maximum
Annex.
Fiscal
Development
Taxable
Land Use
Special
N
Year
Tract
Name
Units
Category
Tax at Annex.
Subdivider
Terracina Investors,
Developed Single
LLC & C/O Spectrum
Original
2016-17
36557
Terracina
452
Family Property
$685
Communities
Developed Single
Original
2016-17
36682
Senterra
74
Family Property
$685
Pardee Homes
Developed Single
1
2016-17
1 33486
Makenna Court
1 81
Family Property
$685
SAM -McKenna
City of Lake Elsinore Page 5
Community Facilities District No. 2015-1 (Safety Services)
APPENDIX B
CITY OF LAKE ELSINORE
COMMUNITY FACILITIES DISTRICT NO. 2015-1
(SAFETY SERVICES)
DESCRIPTION OF AUTHORIZED SERVICES
The services which may be funded with proceeds of the special tax of CFD No. 2015-1, as provided by
Section 53313 of the Act, will include some or all of the costs attributable to public safety.
These services include police protection services (including but not limited to criminal justice services),
fire protection and suppression services, and paramedic services.
In addition to payment of the cost and expense of the forgoing services, proceeds of the special tax may
be expended to pay "Administrative Expenses" as said term is defined in the Rate and Method of
Apportionment and to establish an operating reserve for the costs of services as determined by the
Administrator.
The above services shall be limited to those provided within the boundaries of CFD No. 2015-1 and the
Future Annexation Area of CFD No. 2015-1 or for the benefit of the properties within the boundaries of
CFD No. 2015-1 and the Future Annexation Area of CFD No. 2015-1, as the boundary is expanded from
time to time by anticipated annexations, and said services may be financed by proceeds of the special tax
of CFD No. 2015-1 only to the extent that they are in addition to those provided in the territory of CFD
No. 2015-1 before CFD No. 2015-1 was created.
City of Lake Elsinore Page 6
Community Facilities District No. 2015-1 (Safety Services)
APPENDIX C
CITY OF LAKE ELSINORE
COMMUNITY FACILITIES DISTRICT NO. 2015-1 (SAFETY SERVICES)
PROPOSED BOUNDARIES AND BOUNDARIES - FUTURE ANNEXATION AREA
City of Lake Elsinore Page 7
Community Facilities District No. 2015-1 (Safety Services)
Agenda Date: 1/24/2017
In Control: City Council
Agenda Number: 14)
City of Lake Elsinore
Text File
File Number: ID# 17-056
Version: 1
130 South Main Street
Lake Elsinore, CA 92530
w .lake-elsinore.org
Status: Approval Final
File Type: Agreement
City of Lake Elsinore Page 1 Printed on 1/19/2017
C I `I'Y C11= .
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REPORT TO CITY COUNCIL
TO: Honorable Mayor and Members of the City Council
FROM: Grant Yates, City Manager
PREPARED BY: Farid Dost, Senior Civil Engineer
DATE: January 24, 2017
SUBJECT: PURCHASE AND SALE AGREEMENT — ACQUISITION OF SOUTHERN
CALIFORNIA EDISON (SCE) STREET LIGHTS WITHIN CITY
BOUNDARY
RECOMMENDATION
Staff recommends that the City Council:
1. Approve the Purchase and Sale Agreement, including the No -Fee Light Pole License
Agreement in substantially the form attached hereto, with Southern California Edison to
acquire approximately 3,186 sellable streetlights and authorize the City Manager to
execute the required documents subject to City Attorney's final approval.
2. Approve and Authorize the City Manager to execute the necessary documents with Bank
of America Public Capital Corporation ("BofA") to provide financing for the acquisition and
retrofit of streetlights to LED technology. The BofA option provides a "direct placement
lease" which is secured by the streetlights.
3. Direct the staff to complete the following items;
a. Determine new Street Light Standards
b. Determine LED retro -fitting options to reduce energy consumption
c. Determine the Operation and Maintenance (O&M) responsibilities
BACKGROUND
In March of 2012, SCE announced a streetlight purchase program in response to a coalition of
local cities concerns over the rising cost to provide street lighting services and cities' inability to
control cost. Three years later, SCE announced the end of the program, but agreed to honor the
program with those cities that requested a purchase price prior to August 2015 and entered into
SCE's Purchase and Sale Agreement within 1 -year of receiving the purchase price. Lake
Elsinore's deadline to enter into a Purchase and Sale Agreement is February 28, 2017,
Agenda Item No. _
Purchase and Sale Agreement — Acquisition of Street Lights from SCE
January24, 2017
Page 2 of 5
In December of 2014, the Western Riverside Council of Governments (WRCOG) Executive
Committee directed staff to pursue the development and administration of a Regional Streetlight
Program on behalf of its member jurisdictions. WRCOG for the last year has worked with local
Jurisdictions including the City of Lake Elsinore identify the feasibility of, and to assist the City
acquire the current SCE -owned streetlights. Currently, the streetlights are a high utility cost for
the City of Lake Elsinore and other local Jurisdictions, and the cost continues to increase. Since
2001, the SCE facilities charge component of the SCE -owned streetlight rates has increased by
nearly 55%.
Presently, SCE owns approximately 3,590 streetlights within the City; these streetlights are within
Schedule LS -1 (Lighting —Street and Highway — Unmetered Service Company -Owned System).
Under this Schedule, SCE maintains the street lighting equipment and associated facilities that
cost the City approximately $12 per month per streetlight. Retrofit of the streetlights to LED under
this scenario would cost the City approximately $4.91 per month per streetlight, resulting in an
estimated $7.09 of savings per streetlight.
Of the 3,590 streetlights, 3,186 are eligible for acquisition by the City. The remaining 404 poles
are non -sellable as these streetlights reside on SC's electrical transmission or distribution poles..
The City currently pays nearly $476,978 annually for lighting the 3,186 streetlights Retrofit of the
streetlights to LED under this scenario would cost the City approximately $194,618 annually,
achieving an estimated $282,360 of savings annually.
Acquisition of the SCE street lights provides the City with an opportunity to control certain costs,
create revenue generation opportunities, increase public safety and assist in meeting local and
statewide energy and greenhouse gas goals (AB 32 and SB 350).
DISCUSSION
This report recommends the approval of the Purchase and Sale Agreement with SCE, which
includes the No -Fee Light Pole License Agreement (Collectively the "AGREEMENT"), in
substantially the form included as attachment 1 and 2.
AGREEMENT
SCE agrees to sell, convey, assign, transfer and deliver to the City the sellable streetlights, and
the City agrees to purchase and acquire from SCE, all of SCE's rights, title and interest for the
sellable streetlight facilities. This Purchase and Sale Agreement allows for the City to
purchasing approximately 3,186 streetlights from SCE for a purchase price of approximately
$2,515,252, which includes taxes and transition costs. The sellable streetlights and purchasing
price is subject to adjustment as the City and SCE shall mutually agree on the final sellable
streetlights and the associated purchasing costs. The sellable streetlight facilities are "as is" sale
and SCE does not provide any warranties of any kind to the City.
The No -Fee Light Pole License Agreement allows SCE to continue to retain an easement on
certain poles that are currently equipped with SCE operation related communication devices.
These communication devices include wireless devices, which collect and relay data from meters,
Agenda Item No. _
Purchase and Sale Agreement — Acquisition of Street Lights from SCE
January 24, 2017
Page 3 of 5
and to collect, relay and communicate with SCE distribution equipment. Final approval of the
Agreement and the sale of the streetlights are subject to approval from the California Public Utility
Commission (CPUC) and approval of a financing plan by the City Manager.
Currently, streetlights installed within the City are dedicated to the utility provider (SCE). SCE will
effectively own the streetlights and becomes responsible for O&M, risk management, knockdown
replacement, and energizing the streetlights. These streetlights will become part of the LS -1
Schedule for which the City pays SCE.
Upon approval, the monthly tariff for the existing streetlights will change from the LS -1 Schedule
to the lower LS -2 Schedule (Lighting — Street and Highway Customer -owned installation —
unmetered service). The LS -2 Schedule will cover the SCE's cost to transmit the energy to the
streetlights and the cost of energy. Any future streetlight installations will be dedicated to the City
and added to SCE's billing under the LS -2 Schedule. Under LS -2 Schedule, the City will own the
streetlight equipment including, but not limited to, the pole, mast arm, luminaire and lamp, all
connecting cables in a streetlight system. In addition, the City will be responsible for O&M, risk
management, knockdown replacement and customer service.
It is important to note; the Council's approval of the AGREEMENT does not necessarily obligate
the City to purchasing the streetlights. It does however obligate SCE to leave the door open for
the City to purchase the streetlights pending the City Managers approval of the financing plan and
the final approval of the AGREEMENT by the City Attorney.
Operation and Maintenance
The additional responsibilities associated with the ownership of the streetlights are part of the
WRCOG's regional program and will be provided by a contractor selected via a competitive
procurement process. The contractor will provide routine O&M and will handle customer service
related calls on behalf of those cities participating in the regional program.
Ownership of the streetlights provides the City with greater control over O&M costs. If the City
elects to upgrade the streetlights to an energy efficient lighting system (e.g. LED), there is an
estimated 60% additional savings in the energy consumption.
Financing
WRCOG's staff recommends selecting Bank of America Public Capital Corporation ("BofA') to
provide financing for the acquisition and retrofit of streetlights to LED technology. The BofA option
provides a "direct placement lease" which is secured by the streetlights, no additional City
collateral is needed. The selection of BofA was identified after WRCOG conducted a transparent
and competitive bidding process, due to their competitive pricing, and experience and flexibility in
energy financing.
Litigation Risk
The Purchase and Sale Agreement specifies the street lights are sold as -is, and generally
includes the pole, light and mast arm, wiring within the pole, and the base. The indemnification
Agenda Item No. _
Purchase and Sale Agreement — Acquisition of Street Lights from SCE
January 24, 2017
Page 4 of 5
section of the Purchase and Sale Agreement requires the City to release SCE of liability for
environmental hazards associated with any poles, including hazards associated with the time
period prior to the City's acquisition and into the future. It also imposes an indemnification
obligation on the City. The indemnification section of the agreement includes claims relating to
the chemical treatment of the poles and facilities applied to protect against weatherization and
bug infestation.
SCE has been adamant that they will not allow modification of the Purchase and Sale language.
SCE was requested to disclose any claims or litigation involving its wooden poles. As of the
preparation of this report, SCE has not provided that disclosure. However, other cities
considering the purchase of wood poles have indicated that SCE is currently involved in a
lawsuit involving its wood poles, having been sued under California Proposition 65 for failure to
warn about the chemicals that it uses to treat its poles.
If the City Council approves the Purchase and Sale Agreement, the acquisition of the 134 wood
poles from SCE will pose an ongoing risk, as there could be claims similar to SCE's current
Proposition 65 litigation. The City will mitigate this potential risk by expediting the replacement of
the wood poles through the annual CIP process.
Additional Opportunities
Ownership of the streetlights also provides an opportunity to take advantage of emerging
technologies. The network of real estate the streetlights provide enables their use for additional
services that can benefit our community and can create opportunities to generate additional
revenue. Some example of uses includes electric vehicle charging stations, wireless mesh
network of radio nodes. The nodes are for smart cities applications and position a city for
developing a communication network. Examples of these applications include the ability to collect
data on traffic mobility, sense movement on the streets, and turn off streetlights when sidewalks
and road are empty, detect ground shifts and send earthquake warnings, and act as Wi-Fi
hotspots.
FISCAL IMPACT
The purchase and LED retrofit net savings are $262,000 in the first year and net savings over 20
years is approximately $2.7 million, however, new revenue opportunities includes electric vehicle
charging stations and wireless mesh network of radio nodes which would further widen the
savings to be realized from the transaction. See Exhibit 3 for further details.
Multiple options for the financing of the purchase and LED retrofit are as follows:
Option 1: Participate with WRCOG through its approved financing structure or examine our own
independent structure with BofA. If the City chooses to proceed under the WRCOG agreement,
the terms of the financing structure will be determined at that time.
Option 2: Use the City's Financing Team to seek an independent bond financing structure. This
option would allow us to proceed independently from WRCOG under a similar structure, with
Agenda Item No. _
Purchase and Sale Agreement — Acquisition of Street Lights from SCE
January 24, 2017
Page 5 of 5
terms to be determined.
Option 3: Borrow from the General Fund, with terms to be determined
In addition to the potential savings from the purchase of the streetlights, additional savings is
possible by converting the streetlights (SCE and City) to LED technology. The conversion cost
estimate is $1,300,590. Furthermore, the project may be eligible for energy rebates provided
through SCE for approximately $363,682, leaving an estimated conversion cost of just over
$936,909. The conversion cost is available for funding through options similar to the financing
options for the purchase of the streetlights.
• SCE Streetlights to be purchased — 3,186
• City owned Streetlights to be LED retro -fitted — 300
• Total LED retro -fitting — 3,486
• Streetlight Ownership cost - $2,580,252
• Retrofit cost — $936,909
• Total Ownership + Retrofit - $3,517,161
See attachment 3 (Cash Flow - Exhibit 3) generated by The PFM Group on behalf of WRCOG to
the City of Lake Elsinore for the most updated cash flow analysis.
Exhibits
1. Purchase Agreement - Exhibit 1
2. Light Pole Agreement - Exhibit 2
3. Cash Flow - Exhibit 3
4. Observatory Letter - Exhibit 4
Agenda Item No. _
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this "Agreement') is made and
entered into as of , 2017 ("Effective Date"), by and between SOUTHERN
CALIFORNIA EDISON, a California corporation ("SCE"), and the City of Lake Elsinore,
a California municipal corporation ("Buyer'). SCE and Buyer are referred to herein
individually as a "Party," and together as "Parties".
RECITALS
A. SCE currently owns Three Thousand Five Hundred Ninety (3,590) LS -1 electric
streetlight facilities located in the City of Lake Elsinore, of which, Three Thousand
One Hundred Eighty -Six (3,186) are to be purchased by Buyer.
B. Buyer has expressed a desire to purchase the Facilities (defined below) from SCE,
and SCE is willing to sell the Facilities to Buyer, on the terms and conditions set forth
in this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the respective covenants and agreements
contained in this Agreement, SCE and Buyer each agree as follows:
1. DEFINITIONS. The following terms shall have the meanings ascribed to them__
below for purposes of this Agreement.
"Agreement" has the meaning given in the first paragraph.
"Applicable Requirements" means all laws, statutes, ordinances, rules,
regulations, requirements or orders of any Governmental Authority now in force or
that may later be in force, and the terms and conditions of any permit, certificate,
license or other requirement.
"Bill of Sale" means a document setting forth the Purchase Price and Transition
Costs as well as any Taxes for which Buyer is responsible with respect to the
Facilities specified to be transferred to Buyer (including Reconfigured Facilities),
which document shall be substantially in the form of Exhibit B attached hereto.
"Business Day" means a day other than Saturday, Sunday or a day on which (i)
banks are legally closed for business in the State of California, or (ii) SCE is closed
for business.
"Buyer" has the meaning given in the preamble paragraph.
"CEQA" has the meaning given in Section 5.1.
"Claims" has the meaning given in Section 7.1.
Page 1 of 24
"Closing Date" means the day on which the closing of the purchase and sale of the
Facilities shall occur.
"Commencement Date" has the meaning in Section 6.1.
"CPUC" means the California Public Utilities Commission, or its regulatory
successor, as applicable.
"CPUC Approval" means a final, unconditional and unappealable decision of the
CPUC under Section 851 of the Public Utilities Code (including exhaustion of all
administrative and judicial remedies or the running of time periods and statutes of
limitation for rehearing and judicial review without rehearing or judicial review being
sought) approving this Agreement and the transactions contemplated hereby on
terms and conditions acceptable to SCE and Buyer, in their good faith discretion,
including approval of SCE's proposed accounting and rate making treatment of the
sale in accordance with CPUC's decisions.
"CPUC Approval Date" means the date on which the CPUC Approval occurs.
"Effective Date" has the meaning given in the preamble paragraph.
"Environmental Requirements" means any applicable federal, state and local
statutes, regulations or ordinances now in force or that may later be in force relating
to the protection of human health or safety, or regulating or relating to industrial
hygiene or environmental conditions, or the protection of the environment, or
pollution or contamination of the air, soil, surface water or ground water; including
federal, state and local laws, requirements and regulations pertaining to reporting,
licensing, permitting, investigating and remediating emissions, discharges, releases
or threatened releases of such substances into air, surface water or land, or relating
to the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of such substances. Environmental Requirements include
without limitation: the Comprehensive Environmental Response, Compensation,
and Liability Act (42 U.S.C. 9601 et sea.); the Hazardous Materials Transportation
Act (49 U.S.C. 5101 et sec.); and the Resource Conservation and Recovery Act (42
U.S.C. 6901et seq.)
"Excluded Taxes" means (a) taxes (other than any sales, use, gross receipts, or
any taxes in the nature of sales, use or gross receipts taxes) imposed on SCE that
are capital gains taxes, minimum or alternative minimum taxes, accumulated
earnings taxes, franchise taxes or taxes on or measured by gross or net income,
capital or net worth of SCE; and (b) personal property taxes to the extent the
payment is addressed in Section 3.4(b), and is not required to be reimbursed to SCE
by Buyer.
"Facilities" has the meaning given in Section 2.2 and further described in
Exhibit A.
Page 2 of 24
"Governmental Authority" means any federal, state, local or other governmental,
regulatory or administrative agency, commission, department, board, subdivision,
court, tribunal, or other governmental arbitrator, arbitral body or other authority, but
excluding Buyer.
"Hazardous Substances" means any hazardous or toxic material or waste, which
is or becomes regulated by Environmental Requirement. Without limiting the
generality of the foregoing, Hazardous Substances includes any material or
substance: (a) now or hereafter defined as a "hazardous substance, " "hazardous
waste," "hazardous material," " extremely hazardous waste," " restricted hazardous
waste" or "toxic substance" or words of similar import under any applicable
Environmental Requirements; or (b) which is toxic, explosive, corrosive, flammable,
infectious, radioactive, carcinogenic, mutagenic or otherwise hazardous, and is now
or hereafter regulated as Hazardous Substance by the United States, the State of
California, any local governmental authority or any political subdivision thereof, or
which cause or are listed by the State of California as being known to the State of
California to cause, cancer or reproductive toxicity; or (c) the presence of which
poses or threatens to pose a hazard to the health or safety of persons or the
environment; or (d) which contains gasoline, diesel fuel or other petroleum
hydrocarbons; or (e) which contains lead-based paint or other lead contamination,
polychlorinated biphenyls ("PCBs"), or asbestos or asbestos -containing materials or
urea formaldehyde foam insulation; or (f) which contains radon gas; or (g) fuel or
chemical storage tanks, energized electrical conductors or equipment, or natural gas
transmission or distribution pipelines; and (h) other potentially hazardous
substances, materials, products or conditions.
"Inventory Inspection Activities" means the activities referenced in Section 6.2(a)
and set forth in Exhibit C to be performed by Buyer and SCE during the Inventory,
Planning and Inspection Period.
"Inventory Inspection Period" has the meaning set forth in Section 6.2(a). "
"Land" means the real property on which the Facilities are located, together with
any other real property that is encumbered by Land Rights.
"Land Rights" means the easements, leases, permits, franchise agreements or
other agreements that grant SCE the right to locate the Facilities on the Land and/or
permit access to the Facilities by SCE.
"Local Service Planning Office" means SCE's local service planning office located
at
"Potential Environmental Hazards" means electric fields, magnetic fields,
electromagnetic fields, electromagnetic radiation, power frequency fields, and
extremely low frequency fields, however designated, and whether emitted by electric
transmission lines, other distribution equipment or otherwise.
Page 3 of 24
"Purchase Price" has the meaning given in Section 3.1.
"Reconfigured Facilities" means any additional facilities the Parties identify during
the Inventory Inspection Period which serve purposes in addition to street lighting,
which the Parties agree that SCE will reconfigure to remove such other (non -street
light) uses, and which will be purchased by Buyer from SCE. Buyer shall coordinate
all activities relating to Reconfigured Facilities with SCE's Local Service Planning
Office.
"SCE Parties" means SCE, its affiliates, and each of their respective past, present
and future officers, directors, partners, employees, agents, representatives,
shareholders, attorneys, affiliates, parent and subsidiary corporations, divisions,
insurance carriers, heirs, legal representatives, beneficiaries, executors,
administrators, predecessors, transferees, successors and assigns.
"Transition Activities" means the activities referenced in Section 6.2(a) and set
forth in Exhibit C to be performed by SCE and Buyer. (after the applicable Inventory
and Inspection Period expires) with respect to the Facilities to be transferred from
SCE to Buyer.
"Transition Costs" has the meaning in Section 3.3.
"Tax Claim" has the meaning given in Section 3.4(e).
"Taxes" mean all federal, state, local or foreign income, ad valorem, gross receipts,
license, payroll, employment, excise, stamp;occupation, premium, windfall profits,
environmental, customs duties, capital stock, franchise, profits, withholding, social
security (or similar), unemployment, disability, real property including assessments,
special assessments, special district assessments, escape assessments, benefit
assessments and maintenance assessments, fees or other charges or surcharges of
any nature based on the use or ownership of real property), personal property,
sales, use, documentary transfer, registration, value added, alternative and add-on
minimum, estimated taxes, and all other taxes of any kind whatsoever, including all
interest, penalties, fines and additions thereto, whether disputed or not, including all
items for which liability arises as a transferee or successor -in -interest.
2. PURCHASE AND SALES OF FACILITIES.
2.1 Purchase and Sale. Subject to the terms and conditions of this Agreement,
SCE agrees to sell, convey, assign, transfer and deliver to Buyer, and Buyer
agrees to purchase and acquire from SCE, all of SCE's right, title and interest in
the Facilities.
2.2 Description of Facilities. The "Facilities" consist of Three Thousand One
Hundred Eighty -Six (3,186) electric streetlight facilities owned by SCE and
located within the Buyer's service territory. A detailed description and listing of
the Facilities to be purchased and sold is provided Exhibit A. The Parties
Page 4 of 24
believe that Exhibit A contains a reasonably accurate inventory and map of the
LS -1 streetlight facilities owned by SCE within the Buyer's service territory that
are considered for sale.
3. PURCHASE PRICE AND OTHER COSTS.
3.1 Purchase Price. Subject to adjustment as provided in this Section 3.1, the
purchase price for all Facilities described in Exhibit A ("Purchase Price")
$2,321,303. The Purchase Price is exclusive of Transition Costs and Taxes.
(a) Prior to the Closing Date, the Parties shall mutually agree on the final
Purchase Price, and any additional costs for any Reconfigured Facilities
transferred to Buyer in accordance with Section 6.2 (b).
(b) Prior to the Closing Date, if the number of Facilities does not equal Three
Thousand One Hundred Eighty Six (3,186) then, the Parties will amend the Bill of
Sale to increase or decrease the Purchase Price, as appropriate, using the dollar
amount of SCE's average price for each type of streetlight facility in the Buyer's
municipality (concrete poles will be valued at SCE's average price for concrete
poles, steel poles will be valued at SCE's average price for steel poles, wood
poles will be valued at SCE's average price for wood poles, and fiberglass poles
will be valued at SCE's average price for fiberglass poles).
3.2!j USED)
3.3 Transition Costs. In addition to the Purchase Price, Buyer shall pay to SCE
thirty dollars ($30.00) for every sellable pole to be transferred listed in the final bill
of sale, which shall represent SCE's good faith estimate of the cost of SCE's
Transition Activities with respect to the Facilities ("Transition Costs"). The
estimated Transition Costs is set forth in Exhibit A.
3.4 Taxes.
(a) Except for any Excluded Taxes for which Buyer will have no liability, Buyer
shall pay all Taxes arising in connection with the sale and transfer of the
Facilities, this Agreement or the transactions contemplated herein, or the receipt
of the Purchase Price or other amounts hereunder, which Taxes are levied or
imposed on or with respect to SCE, Buyer or all or any part of the Facilities or
any use thereof on or after the Closing Date. The estimate of the Buyer's Taxes
is set forth in Exhibit A.
(b) State and local personal property Taxes relating to the Facilities for the tax
year (ending June 30) will be prorated between Buyer and SCE on the following
basis: SCE is to be responsible for all such Taxes for the period up to the
Closing Date for such Facilities; and Buyer is responsible for all such Taxes for
the period on and after the Closing Date. All Taxes assessed on an annual basis
Page 5 of 24
will be prorated on the assumption that an equal amount of Taxes applies to
each day of the year, regardless of how many payments are billed or made,
except that Buyer will bear all supplemental or other state and local personal
property Taxes which arise out of change in ownership of the Facilities. In
addition, Buyer acknowledges that the Facilities are assessed by the California
State Board of Equalization as of January 1 of each year, and, if the Closing Date
occurs between January 1 and June 30, SCE must pay personal property taxes
arising out of the ownership of the Facilities for the subsequent fiscal year. If the
Closing Date occurs between January 1 and June 30, Buyer will deposit with
SCE the full amount to pay personal property taxes for the tax year beginning on
July 1, in addition to the prorated amount of personal property taxes for the
current tax year (ending June 30), and SCE will pay the personal property taxes
for these tax years before they become delinquent; provided however, SCE may
pay such taxes in installments as permitted by law. If the personal property tax
amounts owing for the tax year beginning on July 1 are not available as of the
Closing Date, then the amount due from Buyer to SCE for such tax year will be
estimated on the basis of the prior year's personal property taxes and such
amount will be subject to adjustment after the Closing Date. If the Closing Date
occurs between July 1 and December 31, Buyer will deposit with SCE the
prorated amount of personal property taxes for the tax year in which the Closing
Date occurs and SCE will pay the personal property taxes for such tax year
before they become delinquent; provided however, SCE may pay such taxes in
installments as permitted by law.
(c) SCE will be entitled to any refunds or credits of Taxes relating tc ,the
Facilities that are allocable to the period prior to the Closing Date. Buyer will
promptly notify and forward to SCE the amounts of any such refunds or credits to
SCE within five (5) Business Days after receipt thereof. Buyer will be entitled to
any refund or credit of Taxes relating to the Facilities that are allocable to the
period on and after the Closing Date. SCE agrees to reasonably cooperate with
Buyer's efforts to obtain such refund or credit.
(d) After the Closing Date, Buyer will notify SCE in writing, within five (5)
Business Days after Buyer's receipt of any correspondence, notice or other
communication from a taxing authority or any representative thereof, of any
pending or threatened tax audit, or any pending or threatened judicial or
administrative proceeding that involves Taxes relating to the Facilitates for the
period prior to the Closing Date, and furnish SCE with copies of all
correspondence received from any taxing authority in connection with any audit
or information request with respect to any such Taxes relating to the Facilities for
the period prior to the Closing Date.
(e) Notwithstanding any provision of this Agreement to the contrary, with
respect to any claim for refund, audit, examination, notice of deficiency or
assessment or any judicial or administrative proceeding that involves Taxes
relating to the Facilities for the period either entirely prior to the Closing Date or
Page 6 of 24
both prior to and after the Closing Date (collectively, "Tax Claim"), the Parties
will reasonably cooperate with each other in contesting any Tax Claim, including
making available original books, records, documents and information for
inspection, copying and, if necessary, introduction as evidence to any such Tax
Claim contest and making employees available on a mutually convenient basis to
provide additional information or explanation of any material provided hereunder
with respect to such Tax Claim or to testify at proceedings relating to such Tax
Claim. SCE will control all proceedings taken in connection with any Tax Claim
that pertains entirely to the period prior to the Closing Date, and SCE and Buyer
will jointly control all proceedings taken in connection with any Tax Claim
pertaining to the period both prior to and after the Closing Date. Buyer has no
right to settle or otherwise compromise any Tax Claim which pertains entirely to
the period prior to the Closing Date; and neither Party has the right to settle or
otherwise compromise any Tax Claim which pertains to the periods both prior to
and after the Closing Date without the other Party's prior written consent.
(f) The obligations of the Parties pursuant to the Section 3.4 shall survive the
termination of this Agreement.
4. CONDITIONS PRECEDENT
4.1 Conditions to Buyer's Obligations. Buyer's obligation under this Agreement to
purchase the Facilities is subject to the fulfillment or waiver of each of the
following conditions precedent:
(a) SCE shall have performed or complied in all material respects with all
covenants, agreements and conditions contained in this Agreement to be
performed or complied with by SCE at or prior to the Commencement Date and
the Closing Date,
(b) The City Council shall have identified, approved and obtained structured
financing to pay the Purchase Price, Transistion Cost and Taxes. The acceptable
terms of a feasible financing shall be determined solely by the City Council.
(c) No suit, action or other proceeding shall be pending before any court or
Governmental Authority which seeks to restrain or prohibit any of the
transactions contemplated by this Agreement or to obtain material damages or
other material relief in connection with this Agreement or the transactions
contemplated hereby.
4.2 Conditions to SCE's Obligations SCE's obligation under this Agreement to sell
the Facilities to Buyer is subject to the fulfillment or waiver of each of the
following conditions precedent:
(a) Buyer shall have performed or complied in all material respects with all
covenants, agreements and conditions contained in this Agreement to be
Page 7 of 24
performed by Buyer at or prior to the Commencement Date and the Closing
Date.
(b) No suit, action or other proceeding shall be pending before any court or
Governmental Authority which seeks to restrain or prohibit any of the
transactions contemplated by this Agreement or to obtain material damages or
other material relief in connection with this Agreement or the transactions
contemplated hereby.
4.3 CPUC Approval. The obligation of each Party to consummate the purchase and
the sale of the Facilities is conditioned upon obtaining CPUC Approval. If the
purchase and sale must be submitted to the CPUC through a full application,
SCE agrees to make reasonable efforts to draft and file an application seeking
CPUC approval within ninety (90) days following the Effective Date of this
Agreement. If the purchase and sale may be submitted to the CPUC through an
advice letter filing, SCE agrees to draft and file an application seeking CPUC
approval no later than ninety (90) days following the Effective Date of this
Agreement. Buyer agrees to cooperate with SCE's efforts to obtain CPUC
Approval, including by promptly reviewing and commenting on the application for
CPUC Approval. Buyer acknowledges and agrees that SCE makes no
representation or warranty with respect to the likelihood of obtaining CPUC
Approval, and Buyer hereby waives all Claims against SCE that may arise as a
result of the need for CPUC Approval or SCE's failure to obtain CPUC Approval.
The application seeking CPUC Approval will request such approval within six
months of the date the application is filed. SCE, makes n6 representations as to
when or in what manner the CPUC will act on the application.
4.4 Satisfaction or Waiver of Conditions Precedent. Buyer may waive in writing
any of the conditions precedent set forth in Section 4.1, and SCE may waive in
writing any of the conditions precedent set forth in Section 4.2. Neither Party
shall have the right to waive the condition precedent set forth in Section 4.3.
Subject to the foregoing, in the event that any of the conditions precedent set
forth in this Section 4.1 or Section 4.2 have not been satisfied or waived on or
before the Commencement Date or the Closing Date (as the same may be
extended), then the Party whose obligations are subject to such condition
precedent shall have the right to rescind this Agreement ab initio upon written
notice to the other Party, and SCE and Buyer shall thereupon return to the other
Party all performances received from the other Party (except for the Transition
Costs actually paid), and each Party shall be released from all other obligations
under this Agreement, except those which expressly survive termination.
5. CONDITION OF FACILITIES AND LAND RIGHTS
5.1 Compliance with Applicable Requirements and Governmental Approvals.
Except for CPUC Approval, Buyer is solely responsible for complying, at Buyer's
sole expense, with all Applicable Requirements and obtaining all authorizations,
Page 8 of 24
consents, licenses, permits and approvals of Governmental Authorities and third
persons in connection with the consummation of the transactions contemplated
by this Agreement and with Buyer's operation of the Facilities, whether as result
of the PCB content or otherwise. Without limiting the foregoing, Buyer is
responsible for any costs of complying with the California Environmental Quality
Act ("CEQA"), if and to the extent applicable to the sale and transfer of the
Facilities, and satisfying, at Buyer's sole expense, any and all mitigation
measures under CEQA that may apply to Buyer's acquisition or operation of the
Facilities. Buyer shall promptly notify SCE of any and all mitigation measures that
may affect SCE. If SCE determines in good faith that any such mitigation
measures may adversely affect SCE, SCE shall have the right without liability to
Buyer to terminate this Agreement upon written notice to Buyer. In the event of
such termination, SCE and Buyer shall each be released from all obligations
under this Agreement, except those that expressly survive termination. Buyer's
obligations under this Section 5.1 shall survive the termination of this Agreement.
5.2 Disclosure Regarding Hazardous Substances. SCE hereby discloses to
Buyer that Potential Environmental Hazards and Hazardous Substances,
including PCBs, may be present at, in, on, under, about, contained in, or
incorporated in the Facilities. Buyer represents that it is purchasing the Facilities
for Buyer's own use, and not for resale (provided that Buyer contemplates that
Buyer may transfer title to the Facilities in connection with financing and/or
refinancing of the Facilities). If Buyer sells the Facilities, or any part thereof, it
shall disclose, in writing, to all potential Buyers, prior to the sale, that Potential
Environmental Hazards"and Hazardous Substances, including PCBs, may be
present at, in, on, under, about, contained in, or incorporated in the Facilities, or
portions thereof. Further, in the event the Facilities (or any portion thereof) are
sold, conveyed or transferred in any manner to a person other than SCE, Buyer
shall incorporate in the agreement effectuating such transfer, language
substantially in the same form as this paragraph. Buyer's obligations under this
Section 5.2 shall survive the termination of this Agreement. Notwithstanding
anything to the contrary set forth in this Agreement, SCE approval shall not be
required for any conveyance of the Facilities, whether or not such conveyance is
made in connection with a financing or refinancing of the Facilities or any part
thereof.
5.3 Disclaimers Regardinq the Facilities and the Land. BUYER
ACKNOWLEDGES THAT IT IS RELYING UPON ITS OWN INDEPENDENT
INVESTIGATION IN DECIDING TO PURCHASE THE FACILITIES. BUYER
EXPRESSLY DISCLAIMS RELIANCE ON ANY REPRESENTATIONS,
WARRANTIES OR GUARANTIES, EITHER EXPRESS OR IMPLIED, BY SCE,
ITS OFFICERS, DIRECTORS, COUNSEL, REPRESENTATIVES OR AGENTS.
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, SCE
EXPRESSLY DISCLAIMS ANY REPRESENTATIONS OR WARRANTIES OF
ANY KIND OR NATURE, EXPRESS OR IMPLIED, AS TO THE CONDITION,
VALUE OR QUALITY OF THE FACILITIES, THE PROSPECTS (FINANCIAL
Page 9 of 24
AND OTHERWISE) OF THE FACILITIES, THE QUALITY OF WORKMANSHIP
OF THE FACILITIES, OR THE ABSENCE OF ANY DEFECTS THEREIN,
WHETHER LATENT OR PATENT. SCE FURTHER SPECIFICALLY
DISCLAIMS ANY REPRESENTATION OR WARRANTY REGARDING
POTENTIAL ENVIRONMENTAL HAZARDS, THE PRESENCE OF
HAZARDOUS SUBSTANCES, COMPLIANCE OF THE FACILITIES OR THE
LAND WHERE THE FACILITIES ARE LOCATED WITH ENVIRONMENTAL
REQUIREMENTS, OR LIABILITY OR POTENTIAL LIABILITY ARISING UNDER
ENVIRONMENTAL REQUIREMENTS. NO SCHEDULE OR EXHIBIT TO THIS
AGREEMENT, NOR ANY OTHER MATERIAL OR INFORMATION PROVIDED
BY OR COMMUNICATIONS MADE BY SCE, WILL CAUSE OR CREATE ANY
REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED. WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, SCE EXPRESSLY
DISCLAIMS: (A) ANY IMPLIED OR EXPRESS WARRANTY OF
MERCHANTABILITY; (B) ANY IMPLIED OR EXPRESS WARRANTY OF
FITNESS FOR A PARTICULAR PURPOSE; AND (C) ANY IMPLIED OR
EXPRESS WARRANTY OF CONFORMITY TO MODELS OR MATERIALS.
5.4 "AS IS" SALE. THE FACILITIES ARE BEING TRANSFERRED "AS IS, WHERE
IS, AND WITH ALL FAULTS" IN THEIR EXISTING CONDITION, WITHOUT ANY
REPRESENTATIONS OR WARRANTIES OF ANY KIND BY SCE, EXPRESS,
IMPLIED OR STATUTORY, AND WITHOUT RECOURSE AGAINST SCE.
5.5 Specific Disclaimer Regarding Land Rights. BUYER SPECIFICALLY
ACKNOWLEDGES AND AGREES THAT SCE IS NOT ASSIGNING OrZ
OTHERWISE TRANSFERRING ITS RIGHT, TITLE AND INTEREST IN AND TO
ANY LAND RIGHTS (OR ANY CLAIM, RIGHT OR BENEFIT ARISING UNDER
OR RESULTING FROM SUCH LAND RIGHTS) IN CONNECTION WITH ITS
SALE OF THE FACILITIES TO BUYER, AND BUYER ASSUMES ANY AND ALL
RISKS AND LIABILITIES IN CONNECTION WITH THE ABSENCE OF
ADEQUATE OR APPROPRIATE LAND RIGHTS.
5.6 Maintenance of Facilities Prior to Closing. From the Effective Date until the
Closing Date, SCE will, at its expense, operate and maintain the Facilities in
accordance with SCE's rate "Schedule LS -1 LIGHTING - STREET AND
HIGHWAY - UNMETERED SERVICE COMPANY-OWNED SYSTEM," and
consistent with SCE's custom and past practices.
5.7 New Facilities. Until the Commencement Date, SCE may continue to install
new streetlights in the City of Lake Elsinore in accordance with SCE's standard
practices and tariffs and CPUC rules and regulations.
6. COMMENCEMENT AND POST -COMMENCEMENT ACTIVITIES.
6.1 Commencement Date. The "Commencement Date' shall be the date that is
sixty (60) days after the CPUC Approval Date or after the approval of a financing
Page 10 of 24
plan by the City Council, whichever occurs later. The application seeking CPUC
Approval will request such approval within six months of the date the application
is filed. SCE makes no representations as to when or in what manner the CPUC
will act on the application.
6.2 Actions on Commencement Date. On the Commencement Date, the Parties
shall commence the following actions for the Facilities to be transferred to Buyer:
(a) For a period not to exceed four (4) months following the Commencement
Date an "Inventory Inspection Period" shall occur, the Parties will perform
their respective Inventory Inspection Activities set forth in Exhibit C, including
identifying any Reconfigured Facilities. During the Inventory Inspection
Period, SCE's Local Service Planning office shall provide written notice to
Buyer before the expiration of the Inventory Inspection Period identifying any
potential Reconfigured Facilities and stating the work necessary to
reconfigure such facilities for sale to Buyer and the estimated time and cost to
complete the work ("Reconfigured Facilities Notice").
(b) For a period of ten (10) Business Days following Buyer's receipt of the
Reconfigured Facilities Notice, Buyer shall have the right to accept or reject
the Reconfigured Facilities described in the Reconfigured Facilities Notice,
which acceptance or rejection shall be evidenced by a written notice delivered
to SCE's Local Service Planning Office.
(c) At any time during the Inventory Inspection Period, each Party shall perform
and complete its respective Transition Activities for all Facilities, excepting
only the Reconfigured Facilities identified in the Reconfigured Facilities
Notice, which Reconfigured Facilities shall be invoiced for following the
Closing Date. Notwithstanding the foregoing, prior to or during the Inventory
Inspection Period, each Party shall perform and complete its respective
Transition Activities for any Reconfigured Facilities.
(d) Not later than thirty (30) days prior to the Closing Date, SCE shall deliver to
Buyer the final Bill of Sale duly executed by SCE. The Parties agree that
delivery of the Bill of Sale shall be effective upon the earlier of (i) delivery to
Buyer by hand of an original Bill of Sale or (ii) Buyer's receipt of a facsimile or
other electronic transmission of the Bill of Sale. If delivery is made by
facsimile or other electronic transmission, SCE shall concurrently send the
original Bill of Sale to Buyer by registered or certified mail or overnight
courier.
(e) At any time prior to delivery of the final Bill of Sale, Buyer may elect at its sole
and absolute discretion to remove any of the Facilities (except for
Reconfigured Facilities) and deduct on a pro rata basis the value of such
Facilities from the Purchase Price consistent with the valuation set forth in
Exhibit A.
Page 11 of 24
(f) On the Closing Date, Buyer shall pay to SCE in US Dollars the Purchase
Price, Transition Costs, and the Taxes (but not Excluded Taxes) for the
Facilities to be transferred to Buyer.
(g) Following the Closing Date, SCE's Local Service Planning Office will invoice
Buyer separately for any duly accepted Reconfigured Facilities.
6.3 Assumption of Liabilities. Beginning on the Closing Date, Buyer will assume
all obligations and liabilities of any kind or nature whatsoever related to, arising
from, or associated with ownership or possession of the Facilities transferred to
Buyer.
6.4 Post -Inventory Inspection Period Activities.
(a) As soon as practicable after the Closing Date, but effective as of the Closing
Date, SCE will formally change the charge for facilities and electricity
furnished to the Facilities transferred to Buyer from the Streetlight Rate
Schedule LS -1 to the Streetlight Rate Schedule "LS -2 LIGHTING - STREET
AND HIGHWAY CUSTOMER -OWNED INSTALLATION - UNMETERED
SERVICE" Multiple Service — Rate B and provide written notice to Buyer of
such change ("Notice of Rate Change"). At the next available billing period
following the Notice of Rate Change, SCE shall pay to Buyer, in the form of a
bill credit, an amount equal to the difference between the amount charged to
Buyer for facilities and electricity under the I_S-1,;-Schedule and the amount
that would have been charged to Buyer for the same facilities and electricity
under the LS -2 Schedule for the period beginning with the Closing Date and
ending on the date SCE's billing system is adjusted to reflect the rate change.
(b) Within ninety (90) days after Closing Date, SCE shall provide an updated
map and inventory of the Facilities to Buyer.
6.5 Prohibition on Connecting Non -Conforming Load. Buyer acknowledges and
agrees that Buyer's purchase of the Facilities does not entitle Buyer to connect
non -conforming load to the Facilities or supporting circuits beyond SCE's initial
point of connection. If Buyer wishes to connect such non -conforming load, Buyer
agrees to comply with SCE's applicable filed tariffs.
6.6 Closing Date. The Closing Date shall occur no later than the first working day
immediately following the completion of the Inventory Inspection Period. The
exact Closing Date shall be determined by the mutual consent of the Parties.
7. RELEASE.
7.1 Release. Buyer, for itself, and for any future owners of all or a part of the
Facilities, and each of their respective predecessors, successors, assigns,
licensees, officers, directors, employees, agents, partners, shareholders,
Page 12 of 24
transferees, parent and subsidiary corporations, legal representatives, heirs,
beneficiaries, executors and administrators hereby fully and forever releases,
discharges and covenants not to sue the SCE Parties of, from or for any and all
losses (including diminution in the value of the Land) and all other costs, claims,
demands, actions, suits, orders, causes of action, obligations, controversies,
debts, expenses, accounts, damages (including consequential or direct
damages), judgments and liabilities of whatever kind or nature (including fines
and civil penalties), and by whomsoever asserted, in law, equity or otherwise,
whether known or unknown, (each a "Claim" and, collectively, "Claims") arising
from or in any way connected with the Facilities, Claims relating to Potential
Environmental Hazards, and Claims relating to the presence of PCBs or any
other Hazardous Substances in the Facilities, and/or in, on or about the Land.
7.2 Waiver of Civil Code 4 1542. With respect to the matters being released in
Paragraph 7, and as to those matters only, Buyer does knowingly, after having
first obtained the advice of its attorneys, waive all of the provisions of California
Civil Code § 1542 ("Section 1542"). Section 1542 reads as follows:
"A general release does not extend to claims which the creditor does not
know or suspect to exist in his or her favor at the time of executing the
release, which if known by him or her must have materially affected his or
her settlement with the debtor."
Buyer acknowledges and agrees that: (a), the releases set forth in Paragraph 7 are
intended to extend to and extinguish all claims, causes of action, etc. that are
encompassed within the terms of the releases, including those that are not presently
known to or suspected by Buyer and (b) it may hereafter discover facts in addition to or
different from those which it now believes concerning the subject matter of this
Agreement, and that notwithstanding any such new or different facts, the releases
contained herein will remain effective. Buyer further acknowledges and agrees that the
foregoing waiver of Section 1542 is an essential and material term of this Agreement,
without which said consideration would not have been given. Buyer has been advised
by its legal counsel regarding this release and waiver and understands and
acknowledges the significance and consequences of this release and waiver of
Section 1542.
8. INDEMNITY. Buyer shall, at its sole cost and expense, indemnify, protect,
defend and hold the SCE Parties harmless, to the fullest extent permitted by law, from
and against any and all Claims (including the payments of damages, both actual and
consequential, the payment of penalties and fines, the payment of the actual fees and
expenses of experts, attorneys and others, and the payment of the cost of
environmental investigations, monitoring, containment, abatement, removal, repair,
cleanup, restoration, remedial work and other "response costs" under CERCLA or any
other Environmental Requirements) arising from or in any way connected with: (a) any
activities or failures to act in connection with this Agreement by Buyer, its employees,
agents, or contractors; or (b) the ownership, possession, use or operation of the
Facilities transferred to Buyer from and after the Closing Date applicable to such
Page 13 of 24
Facilities; or (c) Potential Environmental Hazards relating to the Facilities or the
presence, disposal, dumping, escape, seepage, leakage, spillage, discharge, emission,
pumping, emptying, injecting, leaching, pouring, release or threatened release of PCBs
or any other Hazardous Substances in connection with the Facilities, to the extent such
Hazardous Substances were present or affecting the Facilities and/or in, on, or about
the Land as of the Closing Date; or (d) the failure of the Facilities to comply with any
Applicable Requirements following the Closing Date; or (e) Buyer's breach of any of its
obligations under this Agreement. In no event shall Buyer be required to indemnify SCE
for any claims to the extent related to the gross negligence or willful misconduct of SCE.
If any action or proceeding is brought against any one or more SCE Parties for any
Claim against which Buyer is obligated to indemnify or provide a defense hereunder,
Buyer, upon written notice from SCE, shall defend the SCE Parties. Buyer's obligation
to defend includes the obligation to defend claims and participate in administrative
proceedings, even if they are false or fraudulent. The indemnity, defense and other
obligations of Buyer in this Section 8 shall survive the termination of this Agreement.
Notwithstanding any provision of this Section 8 to the contrary, the indemnity, defense
and other obligations of Buyer in this Section 8 shall not include any Claim pending
against SCE as of the Closing Date.
9. MISCELLANEOUS.
9.1 Time of Essence. Time is of the essence of this Agreement and each and every
provision hereof.
9.2 Force Majeure. Except for the payment of money when due, performance by
either Party hereunder shall not be deemed to be in default, or considered to be
a default, where delays or defaults are due to force majeure events beyond the
control of such Party, including, without limitation, war, insurrection, strikes,
lockouts, riots, floods, earthquakes, fires, casualties, acts of God, acts of the
public enemy, epidemics, quarantine restrictions, government imposed
moratorium legislation, actions of failures to act by any regulatory authority with
jurisdiction over SCE (including the CPUC), freight embargoes, lack of
transportation, weather -caused delays, inability to secure necessary labor,
materials or tools, delays of any contractor, subcontractor or supplier, that are not
attributable to the fault of the Party claiming an extension of time. An extension
of time for any such force majeure cause shall be for the period of the enforced
delay and shall commence to run from the date of occurrence of the delay;
provided, however, that the Party claiming the existence of the delay first
provides the other party with written notice of the occurrence of the delay, within
ten (10) days of the commencement of such occurrence of a force majeure event
and, thereafter, takes prompt and reasonable action within its control to remedy
such force majeure event.
9.3 Further Assurances. Each Party hereto agrees to execute and deliver to the
other Party such further documents or instruments as may be necessary or
Page 14 of 24
appropriate in order to carry out the intentions of the Parties as contained in this
Agreement.
9.4 Binding Effect; Assignment. This Agreement shall be binding upon, and shall
inure to the benefit of, the heirs, successors and assigns of the Parties hereto.
Notwithstanding the foregoing, Buyer shall have no right to assign this
Agreement or any of its rights or obligations under this Agreement.
9.5 Severability. If any provision of this Agreement shall be unenforceable or
invalid, the same shall not affect the remaining provisions of this Agreement and
the provisions of this Agreement are intended to be and shall be severable.
9.6 Survival. The covenants, agreements, obligations, indemnities and releases
contained in Sections 3.4 5 6.3 6.4 6.5, 7 and 8 of this Agreement shall survive
the termination of this Agreement.
9.7 Governing Laws, This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of California without reference
to its conflicts of laws provisions.
9.8 Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and the
same instrument.
'9.9Notices. Any notice or other communication required or perp hied under this
Agreement shall be in writing and shall be either personally delivered or
transmitted by registered or certified mail, return receipt requested, postage
prepaid, or by a nationally recognized overnight courier, such as FedEx or
Airborne Express, addressed to the Parties as follows:
If to SCE:
If to Buyer: City of Lake Elsinore
Attn: City Manager
130 S. Main Street
Lake Elsinore, CA 92530
The date of any notice or communication shall be deemed to be the date of
receipt if delivered personally, or the date of the receipt or refusal of delivery if
transmitted by mail or overnight courier. Any Party may change its address for
notice by giving notice to the other Party in accordance with this Section 9.9.
9.10 Limitation on Liability. Buyer expressly agrees that the obligations and
liabilities of SCE under this Agreement and any document referenced herein
shall not constitute personal obligations of the officers, directors, employees,
Page 15 of 24
agents, affiliates, members, representatives, stockholders or other principals or
representatives of SCE. SCE expressly agrees that the obligations and liabilities
of Buyer under this Agreement and any document referenced herein shall not
constitute personal obligations of the officers, directors, employees, agents,
affiliates, members, representatives, stockholders or other principals or
representatives of Buyer. The limitations contained in this Section 9.10 shall
survive the termination of this Agreement.
9.11 Exhibits. The following Exhibits are attached hereto and incorporated by
reference into this Agreement.
Exhibit A Description of the Facilities
Exhibit B Form of Bill of Sale
Exhibit C Inventory and Inspection Activities
Exhibit D Communications Equipment
Exhibit E Point of Demarcation Diagrams
Exhibit F No -Fee Light pole License Agreement for Wireless
Attachment
9.12 Dispute Resolution. In the event any dispute arises concerning the
enforcement and/or interpretation of this Agreement, the Parties agree to attempt
initially to settle such claims or disputes in good faith between themselves. Said
obligation to discuss settlement of such claims or disputes shall be initiated by
written notice of such claim or dispute. Should the Parties not settle such claims
or disputes within thirty (30) days of the date of mailing of -uch notice or within
such additional time period to which the Parties agree in writing (the "Negotiation
Period"), the Parties may mutually agree to submit any such claim or dispute to
mediation. In such case, the Parties will select an independent mediator within
thirty (30) days of the expiration of the Negotiation Period (the "Selection
Period"), either by mutual agreement or, in the absence of agreement on a
mediator, by requesting during the Selection Period that the American Arbitration
Association in Los Angeles, California appoint a mediator. The mediation shall
be commenced within thirty (30) days of the selection of a mediator by the
Parties or the American Arbitration Association. Except as provided herein or by
written agreement of the Parties, the mediation shall be conducted in Los
Angeles pursuant to the rules of the American Arbitration Association. If the
Parties are unable to settle the dispute through discussions or in mediation, each
Party shall have the right to pursue all of its remedies at law or in equity. The
covenants of Buyer and SCE contained in this Section 9.12 shall survive the
termination of this Agreement.
9.13 Communications Equipment. Buyer acknowledges that the Facilities have
certain SCE -owned and operated radio equipment, used for the collection and
relay of data from SCE meters and the collection, relay, and communication with
SCE distribution systems, attached to them as identified in Exhibit D
("Communications Equipment'). Concurrently with the Closing Date, Buyer shall
Page 16 of 24
grant to SCE a cost-free license to leave in place, operate, maintain, replace and
remove any Communications Equipment attached to Facilities pursuant to a Pole
Attachment License Agreement.
9.14 Interpretation. The language in all parts of this Agreement shall be construed
according to its normal and usual meaning and not strictly for or against either
SCE or Buyer. The headings of the paragraphs of this Agreement are inserted
solely for convenience of reference and are not a part of and are not intended to
govern, limit or aid in the construction of any terms or provisions hereof. The
words "include," "includes," and "including" shall be deemed to be followed by the
phrase "without limitation."
9.15 Authority. Each Party represents and warrants that the execution, delivery and
performance of this Agreement has been duly authorized by such Party and each
person signing this Agreement on its behalf is duly and validly authorized to do
so.
9.16 Prior Agreements. This Agreement and the exhibits hereto contain the entire
agreement and understating of the Parties relating to the subject matter hereto
and shall supersede any prior written or oral agreements or communications
between the Parties pertaining to such subject matter.
IN WITNESS WHEREOF, the Parties hereto have caused this agreement to be duly
executed as of the date and year first written above.
[SIGNATURES APPEAR ON FOLLOWING PAGE]
Page 17 of 24
ATTEST:
City Clerk
APPROVED AS TO FORM
City Attorney
SCE:
SOUTHERN CALIFORNIA EDISON,
a California corporation
0
I; 1y"-
CITY OF LAKE ELSINORE,
a California municipal corporation
0
Exhibit A-1
Exhibit A
Description of Facilities and Valuation
Exhibit A-2
Exhibit B
Form of Bill of Sale
BILL OF SALE
Pursuant to that certain Purchase And Sale Agreement, dated , 2017
("Agreement"), by and between Southern California Edison, a California corporation
("SCE"), and the City of Lake Elsinore, a California municipal corporation ("Buyer"),
effective as of , 20_ SCE hereby sells, assigns, transfers and delivers
to Buyer all of SCE's right, title and interest in and to the property described in
Attachment A ("Facilities"), attached hereto and hereby incorporated herein by this
reference. All capitalized terms not defined in this Bill of Sale shall have the meanings
given them in the Agreement.
THE FACILITIES ARE BEING TRANSFERRED "AS IS, WHERE IS, AND WITH ALL
FAULTS" IN THEIR EXISTING CONDITION, WITHOUT ANY REPRESENTATIONS
OR WARRANTIES OF ANY KIND BY SCE, EXPRESS, IMPLIED OR STATUTORY,
AND WITHOUT RECOURSE AGAINST SCE. WITHOUT LIMITING THE
GENERALITY OF THE FOREGOING, SCE EXPRESSLY DISCLAIMS ANY
REPRESENTATIONS OR WARRANTIES OF ANY KIND OR NATURE, EXPRESS OR
IMPLIED, AS TO THE CONDITION, VALUE OR QUALITY OF THE FACILITIES, THE
PROSPECTS (FINANCIAL AND OTHERWISE) OF THE FACILITIES, THE QUALITY
OF WORKMANSHIP OF THE FACILITIES, OR THE ABSENCE OF ANY DEFECTS
THEREIN, WHETHER LATENT OR PATENT. SCE FURTHER SPECIFICALLY
DISCLAIMS ANY REPRESENTATION OR WARRANTY REGARDING POI ENTIAL
ENVIRONMENTAL HAZARDS, THE PRESENCE OF HAZARDOUS SUBSTANCES,
COMPLIANCE OF THE FACILITIES OR THE LAND WHERE THE FACILITIES ARE
LOCATED WITH ENVIRONMENTAL REQUIREMENTS, OR LIABILITY OR
POTENTIAL LIABILITY ARISING UNDER ENVIRONMENTAL REQUIREMENTS.
BUYER SPECIFICALLY ACKNOWLEDGES AND AGREES THAT SCE IS NOT
ASSIGNING OR OTHERWISE TRANSFERRING ITS RIGHT, TITLE AND INTEREST
IN AND TO ANY LAND RIGHTS (OR ANY CLAIM, RIGHT OR BENEFIT ARISING
UNDER OR RESULTING FROM SUCH LAND RIGHTS) IN CONNECTION WITH ITS
SALE OF THE FACILITIES TO BUYER, AND BUYER ASSUMES ANY AND ALL
RISKS AND LIABILITIES IN CONNECTION WITH THE ABSENCE OF ADEQUATE OR
APPROPRIATE LAND RIGHTS.
This Bill of Sale is executed pursuant to the authorization contained in the order of the
California Public Utilities Commission in its Decision No. , dated
and is subject to all the terms and conditions of the Agreement,
including the provisions set forth above.
Exhibit B-1
The parties represent that they are duly authorized to execute this Bill of Sale.
SOUTHERN CALIFORNIA EDISON COMPANY,
a California corporation
By:
(Name of Business Unit VP)
(Title of VP)
Accepted and Agreed:
BUYER:
CITY OF LAKE ELSINORE,
a California municipal corporation
A
Name:
Title:
Attachment A: Facilities and Valuation [setting forth final Purchase Price, Transition
Costs, and Taxes]
Exhibit B-2
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Exhibit D
Communications Equipment
Exhibit E
Point of Demarcation Diagrams
NO -FEE
LIGHT POLE LICENSE AGREEMENT
FOR WIRELESS ATTACHMENT
BETWEEN
THE CITY OF LAKE ELSINORE
AND
SOUTHERN CALIFORNIA EDISON
This No -Pee Light Pole License Agreement ("Agreement") is made as of
2017 ("Effective Date"), by and between the City of Lake Elsinore, a
Municipal Corporation ("Licensor"), and Southern California Edison Company, a California
corporation ("Licensee"), individually "Party" and collectively "Parties."
Licensor herein provides Licensee a no -fee license to attach certain wireless
communication equipment to light poles that are owned by Licensor and used by Licensor to
provide street lighting services to customers.
The terms and conditions of this Agreement are as follows:
1. DEFINITIONS
Terms with the initial letter or letters capitalized, whether in the singular or plural, shall
have the following meanings:
a. Applicable Requirement: Any law, code, regulation, ordinance, statute or
requirement of a governmental or quasi -governmental authority, regulatory agency or any other
similar authority with jurisdiction or control over access to or use of the Light Pole, an
Attachment, Work on a Light Pole or operation of an Attachment.
b. Attachment: A wireless communicating device used solely in connection with
SCE's utility operations together with all of its associated ancillary equipment which are owned
by Licensee and serve the purpose(s) presently served by those fixtures identified in Exhibit A
hereto. For the avoidance of doubt, an Attachment may not be a wireless communicating device
or associated ancillary equipment sublicensed by Licensee to a third party for the third party's
use.
C. Custom Light Pole: A specialized light pole, owned and installed by Licensor and
paid for by Licensee, for the purposes of accommodating Licensee's Attachment and for
Licensor to provide street lighting services.
d. Equipment: All ancillary equipment owned and utilized by Licensee in connection
with an Attachment, and installed on third party property.
C. Light Pole: A Licensor Light Pole or a Custom Light Pole.
f. Licensor Light Pole: A standard light pole purchased by Licensor from Licensee,
under the Purchase and Sale Agreement dated as of 2017, used to provide
street lighting services.
g. )YA: Any work performed by Licensee relating to an Attachment, including the
installation, repair, removal or replacement of the Attachment or Equipment.
2. TERM
The initial term of this Agreement shall be ten (10) years, with automatic renewal terms
of ten (10) years each, provided, however, that either Party may terminate this Agreement by
written notice to the other Party given not more than one year and not less than ninety (90) days
prior to the expiration of the initial term or any succeeding term ("Termination Notice"). Upon
the issuance of a Termination Notice by either Party, only Licensee's rights to install Future
Attachments as described in this Agreement shall terminate, but Licensee's rights under this
Agreement with regard to then -installed Attachments and Upgraded Attachments shall not
terminate.
3. ATTACHMENTS
The installed Attachments are listed in Exhibit A hereto. During the term hereof, Licensee
shall have the right (i) to upgrade Attachments to new technology that serves the same purpose
as the Attachments listed on Exhibit A ("Upgraded Attachments"), and (ii) to install new
Attachments that are not listed in Exhibit A ("Futut�e Attachments"), so long as such Upgraded
Attachments and Future Attachments serve the same purpose as the Attachments listed on
Exhibit A and do not interfere in any manner with any then -existing Licensor equipment. All
installations of Upgraded Attachments and Future Attachments shall be performed in in a good
and workmanlike manner.
4. LICENSEE'S ATTACHMENT RIGHTS
Licensee shall have a no -fee license to use the Attachment for wireless communications,
and to maintain, remove, repair or replace the Attachment, as described herein (collectively, the
"Attachment Rights"). All costs and expenses incurred by Licensee as a result of Licensee's
exercise of its Attachment rights hereunder shall be the sole responsibility of Licensee.
5. CONDITIONS AND RESTRICTIONS ON LICENSE RIGHTS
In addition to the other terms and conditions of this Agreement, Licensee's exercise of its
Attachment Rights shall be subject to the following conditions and restrictions:
a. Licensee shall operate its Attachment for wireless communication equipment.
b. Licensee shall be solely responsible for separately obtaining any electric utility or
other services required for operation of its Attachment, if secondary power from the streetlight is
inaccessible.
-2-
C. Licensor shall not be required to modify the Light Pole to accommodate use by
the Licensee.
d. Licensor shall not install any Equipment for the Licensee. Licensee shall be solely
responsible for the installation of any Equipment.
e. Licensee's rights regarding Upgraded Attachments and/or Future Attachments
shall not interfere with Licensor's street lighting operations. If an Attachment made under this
Agreement interferes with Licensor's ability to use a Light Pole for street lighting purposes, then
Licensor will inform the Licensee and Licensee shall remedy the interference in a reasonably
prompt period of time after receiving notice of the interference from Licensor.
f. Licensor may install and may permit third parties to install new devices. However,
Licensor shall not install any new devices, and Licensor shall not allow third parties to install
any new devices that interfere with Licensee's Attachment. If Licensor's or a third party's
installation of a new device interferes with Licensee's wireless communication, then Licensee will
inform the Licensor and Licensor shall remedy the interference in a reasonably prompt period of
time after receiving notice of the interference from Licensee.
g. Prior to commencing any work or activity affecting any Light Pole, Licensee
shall provide Licensor with not less than three (3) business days prior written notice.
6. ATTACHMENT
a. Licensee shall be allowed to install Future Attachments at additional locations
under this Agreement upon fifteen (15) days prior written notice to Licensor; provided,
however, Licensor may disapprove proposed Future Attachments in the event Licensor
reasonably determines the proposed Future Attachments may interfere with any municipal
operations or Licensor equipment. Licensee shall provide Licensor the structure number and
address or location description where the Attachment will be installed. It is the intent of the
Parties, that Licensee, before installing a Future Attachment on a Licensor Light Pole, shall use
reasonable efforts to find another suitable, already existing Licensee -owned pole on which to
place Future Attachments.
b. Licensee shall use commercially reasonable efforts to perform any Work in a
manner which will not cause any interruption of Licensor's street -lighting services or other
equipment, or damage Light Poles or Licensor's existing Light Pole attachments or equipment.
C. All Work shall be performed at Licensee's sole risk and cost and shall be
performed in a good and workmanlike manner and Licensee shall indemnify, defend and hold
harmless Licensor, its elected officials, staff, directors, invitees, employees, agents, contractors,
successors and assigns, from any and all costs, liabilities, claims and expenses, including those
from death or injury to any person or from a loss or damage to any real, personal or other
property, arising out of or pertaining to any Work, or any act or failure to act by Licensee or any
of Licensee's employees, agents, or contractors in relation to the Upgraded Attachments and
Future Attachments.
-3-
d. The performance of any Work shall comply with the requirements for such Work
as contained in applicable industry standards, specific work requirements imposed by Licensor
or a third party, or in any Applicable Requirements associated with the Work.
e. Upon written notification from Licensor or a government authority that the
Attachment or any Equipment is out of compliance with any Applicable Requirement or is
unsafe or hazardous, Licensee shall promptly take whatever actions are necessary to come into
full compliance with such Applicable Requirements or to remedy the unsafe or hazardous
condition, as the case may be. Notwithstanding any other provision of this Agreement, if at any
time, in Licenser's sole judgment, an unsafe or dangerous condition exists, Licensor shall
immediately notify Licensee and Licensee shall have twenty -Pour (24) hours from such notice to
remedy the unsafe or dangerous condition. If Licensee does not remedy the unsafe or dangerous
condition within such twenty-four (24) hour period, then Licensor may correct such condition
and notify Licensee of such correction within three (3) business days. If at any time, in
Licensor's sole judgment, an imminent threat to human life or safety exists, Licensor may
correct such condition and notify Licensee of such correction within three (3) business days. In
the event SCE fails to correct an unsafe or dangerous condition after receiving 24 -hours prior
notice under this subsection, and as a result Licensor is required to correct the unsafe or
dangerous condition, Licensee shall reimburse Licensor for the actual costs incurred by Licensor
of making such correction.
f Licensee shall not drill, burn or punch any holes in a Light Pole, without first
obtaining written consent from Licensor, which consent shall not be unreasonably withheld.
Licensee shall reimburse Licensor for any damage to any Licensor Light Pole in connection -.Zth:,
the use, repair, restoration or replacement of a Light Pole by Licensee.
g. Licensee shall follow Licensor's established procedures to request Licensor to
replace a Licensor Light Pole with a Custom Light Pole, and Licensee shall be solely
responsible for all costs of such request and any resulting replacement.
7. REMOVAL OF AN ATTACHMENT FROM A LIGHT POLE
a. Licensee may at any time remove an Attachment from any Light Pole.
b. Nothing in this Agreement shall be construed to limit Licensor's rights, at any
time, to remove a Light Pole from service or to require Licensee to remove its Attachment from
a Light Pole that is being removed from service. In the event Licensor requires Licensee to
remove its Attachment from a Light Pole that is being removed from service, then Licensor will
notify Licensee ninety (90) days prior to the removal and use reasonable efforts to supply
Licensee with an alternative Light Pole for such Attachment. Licensee shall complete removal
of its Attachment within ninety (90) days of Licensor's request to do so.
C. Whenever Licensee removes an Attachment, Licensee shall restore the Light Pole
to its original condition, reasonable wear and tear excepted, except where Licensor notifies
Licensee that restoration is unnecessary because the Light Pole is being removed from service or
Licensor agrees otherwise.
-4-
d. When a Light Pole that contains an existing Attachment is relocated or replaced
by Licensor, and there is a suitable other location for a new Light Pole or an existing Light Pole
which could be used by Licensee for its Attachment, then Licensor and the Licensee may agree
that Licensee may so use the other location or Light Pole and amend Exhibit A to reflect the
transfer of Licensee's Attachment Rights. Except in emergency situations. Licensor will notify
Licensee ninety (90) days prior to relocation or replacement of Light Pole.
8. RISK OF LOSS; RESTORATION OR REPAIR OF LIGHT POLE
In the event a Light Pole is damaged or destroyed, restoration of Licensor's use of a Light Pole
shall take priority over Licensee's restoration of its use; provided, however, that Licensor shall
not unreasonably delay Licensee's opportunity to restore the use of its Attachment. Licensor
shall permit Licensee to make repairs to restore use of the Attachment, as long as such
restoration efforts do not interfere with Licensor's restoration activities. In addition, Licensee
shall fully cooperate with Licensor if Licensor performs any repairs or other work on the Light
Pole, which work may require a temporary shutdown of Licensee's Attachment. The Licensor
shall notify the Licensee at least 48 homy prior to planned repairs that will require a shutdown of
the Licensee's Attachment.
9. REGULATORY MATTERS
To the extent that this Agreement is subject to the jurisdiction of any regulatory
authority, Licensor and Licensee acknowledge that this Agreement may be subject to such
changes, modifications or termination as that regulatory authority may direct from time to time
in the exercise of its jurisdiction.
10. INDEMNIFICATION AND LIMITATION OF LIABILITY
a. Licensee shall indemnify, defend and hold harmless Licensor, its elected
officials, staff, directors, invitees, employees, agents, contractors, successors and assigns, from
any and all costs, liabilities, claims and expenses, including those from death or injury to any
person or from a loss or damage to any real, personal or other property, to the extent arising
from any negligent act or omission by Licensee, or by any of Licensee's employees, agents, or
contractors in performing this Agreement.
b. Licensor shall indemnify, defend and hold harmless Licensee, its elected
officials, staff, directors, invitees, employees, agents, contractors, successors and assigns, from
any and all costs, liabilities, claims and expenses, including those from death or injury to any
person or from a loss or damage to any real, personal or other property, to the extent arising
from any negligent act or omission by Licensor, or by any of Licensor's employees, agents, or
contractors in performing this Agreement.
C. The indemnified Party shall promptly notify indemnifying Party of the existence
of any matters to which indemnifying Party's indemnity obligations apply. Upon demand by
indemnified Party, the indemnifying Party shall defend at its own expense with mutually
acceptable counsel any such matter; provided that the indemnified Party shall at all times also
5-
have the right to fully participate in the defense and the right to consent to any settlement or
compromise.
d. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER
PARTY FOR ANY INCIDENTAL, INDIRECT, SPECIAL, CONSEQUENTIAL, OR
PUNITIVE DAMAGES (INCLUDING LOSS OF THE OTHER PARTY'S CUSTOMERS OR
GOOD WILL, OR LOST REVENUE OR PROFITS), FOR ANY CAUSE OF ACTION,
WHETHER IN CONTRACT OR TORT, ARISING IN ANY MANNER FROM THIS
AGREEMENT OR THE PERFORMANCE OR NON PERFORMANCE OF OBLIGATIONS
HEREUNDER, REGARDLESS OF THE CAUSE OR FORESEEABILITY THEREOF.
11. TITLE AND RISK OF LOSS
a. Licensor shall have and retain sole and exclusive ownership of all Light Poles,
and Licensor's ownership shall not be affected by Licensee's Attachment to the Light Pole.
b. Except as otherwise provided for herein, Licensee shall retain its ownership of
the Attachment and any Equipment at all times.
12. INSURANCE
At all times during the term of this Agreement, Licensee shall maintain and shall require
its subcontractors that perform any Work pursuant to this Agreement to maintain insurance
coverage as described below:
a. Worker's Compensation Insurance with statutory limits, in accordance with the
laws of the State of California, and Employer's Liability Insurance with limits of not less than
one million dollars ($1,000,000). Licensee shall require its insurer to waive all rights of
subrogation against Licensor, its officers, agents and employees.
b. Comprehensive Bodily Injury and Property Damage Liability Insurance,
including owner's and contractor's protective liability, product/completed operations liability,
contractual liability and automobile liability, with a combined single limit of not less than two
million dollars ($2,000,000) for each occurrence. Such insurance shall (i) name Licensor, its
officers, agents, and employees as additional insureds, but only for Licensee's acts or omissions:
(ii) be primary for all purposes; and (iii) contain standard cross -liability provisions.
Written proof of compliance with the requirements of this Section, consisting of
Certificates of Insurance and a copy of the Additional Insured Endorsement to Licensee's
insurance policy(s), in a form acceptable to Licensor, shall be provided to and approved by
Licensor prior to any Attachment or the installation of any Equipment upon a Light Pole and
prior to the expiration of each policy year thereafter. The Certificates of Insurance shall provide
that this insurance shall not be terminated, canceled or reduced except on thirty days' prior
written notice to Licensor. Failure to provide and maintain such insurance shall constitute a
default under this Agreement.
-6-
13. REMEDIES IN THE EVENT OF DEFAULT
If either Party fails to comply with a material term or condition of this Agreement, the
non -breaching party shall provide written notice to the defaulting party of such non-compliance.
The breaching party shall then have thirty (30) days (except in the case of health and safety
issues , which shall require cure within forty-eight (48) hours) from receipt of such notice to
reasonably cure such non-compliance. If such a cure is not completed within the thirty (30) day
period (or 48 hour period as provided above), or if a cure is not possible within such period and
the breaching party has not taken steps to effect such cure, then the non -breaching party may
pursue its legal remedies relating to such non-compliance.
14. DISPUTE RESOLUTION
a. Except as may otherwise be set forth expressly herein, all disputes arising under
this Agreement shall be resolved as set forth in this Section 14. To be eligible for resolution
under this Section 14, all disputes concerning payments must be invoked within sixty (60)
business days of the payment due date.
b. Licensor and Licensee shall attempt in good faith to resolve any dispute arising
out of or relating to this Agreement promptly by negotiations between an authorized
representative of each of the Parties. Any dispute which cannot be resolved between the
authorized representative shall be referred to an officer or designee of Licensee and the City
Manager of Licensor. Licensor or Licensee shall give the other Party written notice of any
dispute following expiration of the applicable cure period pursuant to Section 13. Within twenty
(20) days after delivery of such notice, the designated parties shall meet at a mutually acceptable
time and place, and thereafter as often as they reasonably deem necessary to exchange
information and to attempt to resolve the dispute. If the matter has not been resolved within
thirty (30) days of the first meeting, the Parties will consider and decide whether the dispute
should be submitted to JAMS, or its successor, for mediation.
C. All negotiations and any mediation conducted pursuant to this Section 14 shall be
confidential and shall be treated as compromise and settlement negotiations, to which Section
1152 of the California Evidence Code shall apply, which section is incorporated in this
Agreement by reference.
d. Notwithstanding the foregoing provisions, either Licensor or Licensee may seek
immediate equitable relief, a preliminary injunction or other provisional judicial remedy.
e. Licensor and Licensee shall continue to perform their obligations under this
Agreement pending final resolution of any dispute arising out of or relating to this Agreement.
f If Licensor and Licensee, after good faith efforts to resolve a dispute under the
terms of this Agreement (as provided in Subpart b above), cannot agree to a resolution of the
dispute, either party may pursue whatever legal remedies may be available to such party, at law
or in equity. before a court of competent jurisdiction and with venue in Riverside County,
California.
7-
1s. TAXES AND LIENS
Licensee shall pay when due any and all taxes or assessment resulting from any
Attachment on any Light Pole including, but not limited to, special assessments and
governmental fees of any kind whatsoever which may be levied or assessed upon any personal
property which Licensee has caused to be placed or maintained upon Licensor's facilities, or
against Licensee's business and shall keep Licensor's property and facilities, including any
Light Poles, free from all liens, including but not limited to mechanics liens, and encumbrances
by reason of the use, occupancy, or maintenance of Licensor's facilities or property by Licensee
or by any person claiming under Licensee. It is further agreed that in the event Licensee fails to
pay the above-mentioned taxes, assessments, or liens when due, Licensor shall have the right to
pay the same and invoice Licensee for the amount thereof and Licensee shall pay the same upon
demand together with interest at the maximum rate allowed by law from the date of such
expenditure by Licensor.
16. NOTICES
Notices hereunder must be in writing and transmitted by United States mail or by
personal delivery to Licensor. Such notices shall be deemed given: (a) upon receipt in the case
of personal delivery or confirmed facsimile transmittal; (b) two (2) days after it is sent by
certified mail, with a return receipt requested, (c) three (3) days after deposit in the mail, or the
next day in the event of overnight delivery.
If to Licensor: City of Lake Elsinore
Attn: City Manager
130 S. Main Street
Lake Elsinore, CA 92530
Tel: (951) 674-3124
Fax: (951) 674-2392
If to Licensee: Southern California Edison Company
[Insert address]
Attn: Phone: Fax:
17. DISCLAIMER
LICENSOR MAKES NO REPRESENTATION OR WARRANTY WHATSOEVER
CONCERNING THE SUITABILITY OR CONDITION OF ANY LIGHT POLE.
FURTHERMORE, IT IS SPECIFICALLY UNDERSTOOD AND HEREBY
ACKNOWLEDGED BY LICENSEE THAT ANY LIGHT POLE MADE AVAILABLE
HEREUNDER, TO TI3E MAXIMUM EXTENT PERMISSIBLE BY LAW, WILL BE
PROVIDED BY LICENSOR ONLY ON AN "AS -IS" BASIS AND WITHOUT ANY
-8-
WARRANTY BY LICENSOR ABOUT THE CONDITION OF THE LIGHT POLE OR
ITS SUITABILITY FOR LICENSEE'S PURPOSES. FURTHER, LICENSEE'S RIGHTS
HEREUNDER SHALL BE SUBORDINATE TO LICENSOR'S USE OF THE LIGHT
POLE FOR STREET LIGHTING SERVICES.
18. GENERAL PROVISIONS
a. California Law. This Agreement, and performance pursuant to it, shall be governed,
interpreted, construed, and regulated by the laws of the State of California, without reference to
its conflicts of laws provisions.
b. Assignment. Neither Party may assign, transfer, sublease, or sublet any right,
obligation, or privilege given to it hereunder without the prior written consent of the other Party.
Subject to the foregoing, this Agreement shall inure to the benefit of and be binding upon the
respective successors and assigns of the Parties hereto.
c. interpretation. The language of each part of this Agreement shall be construed simply
and according to its fair meaning, and shall never be construed either for or against either Party,
regardless of which Party may have drafted the provision.
d. Nature of Rights. Nothing in this Agreement shall preclude Licensor from granting
any third -party permission to use available capacity on a Light Pole in ways that do not interfere
with the rights granted to Licensee under this Agreement.
e. Invalidity of Provisions. To the extent that any terms or provisions of this Agreement
shall be finally determined by a court of competent jurisdiction to be invalid, (i) such invalidity
shall not affect, release or modify any other terms or provisions, and (ii) in lieu of each such
provision which is invalid, illegal or unenforceable, there shall be substituted or added as part of
this Agreement a legal, valid and enforceable provision which shall be selected to be as similar
as possible, in achieving the economic and business objectives of the Parties, to such illegal,
invalid or unenforceable provision.
f Waiver. The failure of either Party to enforce any provision of this Agreement or the
waiver thereof in any instance, including but not limited to the right to terminate, shall not be
construed as a general waiver or relinquishment on its part of any such provision but the same
shall nevertheless be and remain in full force and effect.
g. Incorporation Clause, This Agreement, including attached Exhibits, incorporate all
the covenants and understandings between Licensor- and Licensee regarding the subject matter
of this Agreement. No other verbal agreements or understandings exist between the Parties nor
shall any be binding upon either Licensor or Licensee unless reduced to writing and signed by
the Parties. Any addition, variation or modification to this or any other Agreement shall be
ineffective unless made in writing and signed by the Patties.
h. Radio Frequency Emission ("RFE") Compliance Licensee shall be responsible, at
its sole cost and expense, for ensuring compliance with all regulations relating to RI -E, Licensor
9-
will cooperate with Licensee, where possible, to allow Licensee to place required signage on a
Light Pole where this is necessary to comply with RFE regulations. in addition. Licensee shall
use its best efforts to minimize the RFE impact on health of workers and on future uses of the
Light Pole,
i. Exhibits. Exhibits referenced herein are incorporated by said reference. Licensee
shall provide any updates of Exhibit A to Licensor within thirty (30) days of Licensor's written
request, delivered pursuant to Section 16 of this Agreement, but not more often than once each
calendar quarter. Specifically included as exhibits to this Agreement hereto are:
Exhibit A: List of Installed Attachments
j. Confidentiality. Notwithstanding any language to the contrary in any applicable
nondisclosure or confidentiality agreement between the Parties, Licensor may, without the prior
consent of the Licensee, provide confidential or proprietary information related to this
Agreement to a governmental or regulatory entity that requests such information. In addition,
Licensee recognizes that Licensor is a public agency subject to the California Public Records
Act and that disclosures may be required thereunder.
®1
SIGNATURES
By signing below, the signatories hereto represent and warrant that they have been duly
authorized to sign this Agreement on behalf of the Party for whom they sign.
SOUTHERN CALIFORNIA EDISON,
a California corporation
CITY OF LAKE ELSINORE,
a California municipal corporation
0
ATTEST:
City Clerk
APPROVED AS TO FORM
City Attorney
EXHIBIT A
List of Installed Attachments
-12-
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The PFM Group
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December 16, 2016
Memorandum
To: City of Lake Elsinore
cc: Tyler Masters
Western Riverside Council of Governments
From: Laura Franke
Topher Lancaster
Public Financial Management, Inc.
Re: Streetlight Project Cash Flow Updates
PFM Financial Advisors, LLC ("PFM") submits this memorandum on behalf of the Western Riverside
Council of Governments ("WRCOG") to the City of Lake Elsinore ("City") in order to provide an update
regarding developments on the cash flow analysis for the City's potential streetlight acquisition and
retrofit.
Background
October 2015, WRCOG initiated the Regional Streetlight Program to identify the feasibility of streetlight
acquisition (from Southern California Edison) and subsequent LED retrofit support. This program began
working to facilitate the development of a multi -city project that would utilize economies of scale to
provide a more cost-effective and energy efficient municipal streetlight solution. A regional approach
allows for greater savings, fewer engagement efforts, and less duplicative documentation and fees. Over
the past year, PFM has worked alongside WRCOG, Southern Contracting and Muni -Fed Energy to
determine acquisition and retrofit costs, assess technology and equipment requirements, and model
project savings.
As participants' needs are fleshed out, assumptions are refined and new utility policies implemented, the
cash flow analysis forthis project has undergone multiple iterations. In the interest of maintaining positive
momentum on a project with so many moving pieces, it is important to keep City officials informed of the
latest developments and the impact they have on potential economic outcomes. In the sections below we
will summarize the latest projected savings foryourCity, the majorfactors that have impacted the analysis
and the variables still under consideration as we continue working through this process.
z3rn�.
WRCOG Regional Streetlight Program
December 16, 2016
Page 2
Latest Project Economics
Our last cash flow analysis for Lake Elsinore was completed in August 2016. Due to the factors outlined
below, expected net savings over 20 years have increased.
Financing Relamp Net
(2) (3) _. ._.
Previous savings 20Year Total: 8,967,676 (5263197) (1257206) 24472741
Latest Savings (1) 20Year Total: 8,931,384 (4,963,234) (1,210,570) 27757,580
Difference 20 year Total: (36,292) 299,962 46,636 310,306
Includes _53 lamps in retrofit
LI Financi ng, net of incentives
13' includes earnings on reserves
Although small adjustments have been made in terms of modeling assumptions and calculation
methodologies, two major factors have most affected the cash flow analysis of this project:
SCE Utility Tariff Rates:
At the outset of this project, cash flow calculations were still based on SCE's October 2015 tariff rates.
Since then our models have been updated to take into account the latest SCE utility tariff rates that went
into effect as of June 1, 2016, and were further modified effective October 1, 2016. Based on ourstandard
financing assumptions of a 15 -year term and a 4.65% taxable interest rate, the new tariff rates negatively
impacted; most cities' savings. The new tariff rate schedule lowered rates for most lamp *vp@s meani.rg _
the potential savings of transitioning to city -owned Light -Emitting Diode (LED) streetlights was reduced.
SCE Incentive Structure:
SCE incentives were originally based on a tiered incentive structure that calculated rebates according to
the number of kWh's saved for all city -owned streetlights retrofitted with an LED lamp. Since
implementing a new tariff rate schedule, SCE has also initiated a new incentive structure aimed at
simplifying the rebate calculation by establishing a flat per-unit incentive payment for all High -Pressure
Sodium (HPS)-type lamps. Depending on each jurisdiction's specific lamp -type distribution, this has
resulted in many cities qualifying for significantly larger project rebates. This improvement, however, has
been tempered by additional incentive structure changes implemented by SCE that both lower the base
incentive rate under the new express solution and reduce bonus incentives awarded based on each city's
designated partnership incentive tier. However, the City's incentive still increased from $211,592 to
$363,682. Because the City's lamp distribution is dominated by HPS-type lamps, incentive reductions were
minimized compared to most other program participants and the improvement in eligible incentives
improved the overall cash flow and expected net savings of the project.
Including City -owned LS3 Lamps•
The latest cash flow analysis includes the retrofit of LS3 streetlights (lights currently owned and operated
by the City) with LED lights. The updated analysis includes 75 traffic intersections where these LS3 lamps
are located. Our models assume 4 lamps per intersection (for a total of 300 LS3 lights) assuming a
conversion from a 250W HPS (most common) lamp to a 150W LED. The inclusion of these additional lamps
for retrofit also helps offset the negative impact of the new SCE tariff updates.
Pending Issues
WRCOG Regional Streetlight Program
December 16, 2016
Page 3
Structuring Reserves and O&M Services:
We are in continuing discussions with the lending partner to determine how to organize and structure
reserve funds and Operations and Maintenance (0&M) expenses on a program -wide basis. Our goal will
be for each individual participating city to make a single payment that will cover debt service payments,
re -lamp reserve fund, a credit -enhancing reserve fund and O&M services. As financial structuring details
are solidified, revisions will be made to the cash flow analysis to fully incorporate these changes.
Throughout this process, we have deliberately used conservative assumptions. This maintains flexibility
in light of a changing rate environment, requires a higher threshold to demonstrate economic feasibility
and gives all Program participants reasonable expectations as we work through this process. That said,
there are a number of areas that have the potential to further impact cash flows:
LED Efficiency:
Pending the final results of the LED Streetlight Testbed currently in progress, there could be lower than
expected post -retrofit energy costs. Based on what we are experiencing so far at the demonstration area
in Hemet, there is potential that projects will be able to utilize lower replacement lamp wattages than
those currently assumed in our financial modeling. Final analysis will allow for the selection of equipment
and technologies that maximize functionality as well as savings for the City.
Lower Product Costs:
Based on economies of scale in purchasing large quantities of equipment for a region -wide program as
well as the continuing downward trend in manufacturer pricing, retrofit project costs could improve
between now and closing, thus reducing the total amount borrowed and debt service payments made by
program participants.
Incentive Structure Updates:
SCE has communicated its intention to expand the new Express Solution for calculating retrofit incentives
to include LPS lamps. Based on each city's lamp -type distribution, this could significantly improve rebates.
As we have seen over the last six months, however, SCE policies have the potential to change significantly
for better and for worse so we will continue to monitor new developments and update financial
projections accordingly.
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PALOMAR OBSERVATORY
CALIFORNIA iNS"I'i'Pt I'I'I: 01"'1'BCI-iNOLO<iY
11.0. Box 200 / 35899 Canfield Road Palomar MouNain. CA 92060
Telephone (760) 742-2100 /Fax (760) 742-1728
astro.c;ihcch.edu!prinnry
January 10, 2017
Tyler Masters
Program Manager
W RCOG
Riverside, CA 4080 Lemon St, 92501-3609
Dear Tyler,
I am writing you today on behalf of Palomar Observatory to express our support for your initiative
regarding the Riverside County Regional Streetlight Program that seeks to replace 63,000 streetlights in
.the County with full consideration of all stakeholders. Further i war, *ed to exprc s our gratitude for
including us in the discussions of this initiative: you and your team were very gracious to include the
Observatory among the interested parties in this initiative.
Under your leadership, the assembled stellar team consisting of Riverside and Hemet staff, the
engineering consulting of Christian Monrad, James Benya, and Jim Filanc, who are well versed in the
issues concerning artificial night sky brightness, created and implemented a series of night street scenes
and information packets that helped inform participants in your tour groups and produce relevant
survey results. On three tours that I attended, I witnessed the professional manner which the tours were
conducted. Your novel use of OR codes placed on demonstration light poles allowing the public to enter
survey data with smartphones is truly innovative.
Palomar Observatory has been, and continues to be an internationally prominent astronomical
observatory, producing world class science and cutting edge innovation in instrumentation and data
processing. The Observatory is focused on discovery and follow-up as a matter of principle intent. Our
48 inch Samuel Oschin Schmidt Telescope with its wide -field capabilities surveys the sky, and interesting
objects it finds are then analyzed in detail by the Hale 200 inch telescope, the largest in the world for the
four decades after its construction. The Observatory is world renowned for the design and engineering
of its construction, In the days before modern computer-based methods were available. Today the
combination of Palomar Observatory, Caltech, JPL and other partners continues in the tradition of
cutting edge research. In partnership with the US National Science Foundation we are developing a
state of the art 10 Million dollar camera system that will be able to obtain hundreds of images per night
with a quality far exceeding historical photographic techniques, Modern data processing and machine
learning methods will yield an unprecedented discovery rate, and the collected data harvested by an
international science team. The Observatory also continues to equip the 200 inch Hale and 60 inch Oscar
Mayer telescopes with modern instrumentation and from collaborations that make the highest use of
these systems and resulting data. Included with this letter is a copy of a statement from the National
Science Foundation outlining why Palomar Observatory continues to be a national strategic investment
in the US science portfolio.
We believe our common interests in the control of Riverside County night sky brightness are well -
aligned. Your leadership in Riverside County lighting strategy clearly serves public safety, nighttime
environment, and environmental sustainability objectives for county residents. That these shared goals
can also lead to reduced sky brightness for astronomy research and public enjoyment is a positive
alignment of our interests. Riverside County residents will be able to take pride in being responsible
stewards of the environment and in their partnership with the Observatory in exploring humankind's
connection to our universe. Your effort to help others appreciate and balance needs of community
with the impact of night lighting will allow the Observatory to continue producing world class science
that will inspire generations to come and makes all involved, a member of the extended Palomar family.
We urge you to consider promoting using lights with the lowest blue content, color temperatures less
than 3,000K, and the use of distributed controlled dimming to enhance public safety, reduce energy
costs and extend the life of the LEDs. The ability to dim allows the use of condition dependent
brightness programming to balance the needs of the County with the reduction of artificial night sky
brightness and can aid law enforcement and public safety,
Sincerely,
V(�h`/�
Dan McKenna
Palomar Observatory Scientist
City of Lake Elsinore 130 South Main Street
Lake Elsinore, CA 92530
w .lake-elsinore.org
—_
—";'f;"" """ Text File
File Number: ID# 17-058
Agenda Date: 1/24/2017 Version: 1 Status: Approval Final
In Control: City Council File Type: Report
Agenda Number: 16)
City of Lake Elsinore Page 1 Printed on 1/19/2017
C i't`Y OF
LAU LSINORE
"%-'- DREAM EXTI ME
REPORT TO CITY COUNCIL
To: Honorable Mayor and Members of the City Council
From: Grant Yates, City Manager
Prepared by: Jason Simpson, Assistant City Manager
Date: January 24, 2017
Subject: Formation of Improvement Areas JJ and KK within City of Lake Elsinore
Community Facilities District No. 2006-1 (Summerly)
Recommendation
adopt A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE,
CALIFORNIA, ACTING AS THE LEGISLATIVE BODY OF CITY OF LAKE ELSINORE
COMMUNITY FACILITIES DISTRICT NO. 2006- 1 (SUMMERLY), DECLARING ITS
INTENTION TO CONSIDER ESTABLISHING IMPROVEMENT AREAS JJ AND KK FROM
TERRITORY CURRENTLY WITHIN THE BOUNDARIES OF IMPROVEMENT AREAS DD AND
GG OF CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2006-1
(SUMMERLY), RESPECTIVELY, AND TO INCUR BONDED INDEBTEDNESS WITHIN
PROPOSED IMPROVEMENT AREAS JJ AND KK, and,
adopt A RESOLUTION OF INTENTION OF THE CITY COUNCIL OF THE CITY OF LAKE
ELSINORE, CALIFORNIA, ACTING AS THE LEGISLATIVE BODY OF CITY OF LAKE
ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2006- 1 (SUMMERLY), TO INCUR
BONDED INDEBTEDNESS WITHIN PROPOSED IMPROVEMENT AREAS JJ AND KK OF
CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2006-1 (SUMMERLY)
Background
The City of Lake Elsinore (the "City") formed the City of Lake Elsinore Community Facilities
District No. 2006-1 (Summerly) (the "District') in 2006 pursuant to the Mello -Roos Community
Facilities District Act of 1982. The District generally encompasses the development within the
City known as "Summerly." McMillin Summerly, LLC, a Delaware limited liability company (the
"Developer") is currently the master developer of the Summerly development. Since the District
was formed in 2006, the planned product mix within the various portions of the Summerly has
changed. To accommodate such changes in product mix and planned development, the
Developer has requested, and the City has undertaken proceedings relating to the
reorganization of improvement areas within the District and the tax rates within such
improvement areas.
CFD 2006-1 Summerly Formation
January 24, 2017
Page 2 of 2
Discussion
As a result of further changes in the development plan within the Summerly project, the City has
received a petition from the Developer requesting the current formation proceedings, which if
approved, will form Improvement Areas JJ and KK from the property currently within
Improvement Areas DD and GG of the District, respectively. The Developer has also requested
the approval of a new rate and method of apportionment for each of Improvement Area JJ and
KK and the authorization of bonded indebtedness for Improvement Areas JJ and KK (together,
the "Formation Proceedings"). The types of facilities and services to be provided by the District
within proposed Improvement Areas JJ and KK will be the same as those approved for the
District when it was originally formed. Upon the completion of the Formation Proceedings,
Improvement Areas DD and GG of the District will be dissolved and the notices of special tax
lien of such improvement areas will be cancelled.
Documents to be Approved
Approval of the attached resolutions is the first step in the process to effectuate the formation
discussed above. The attached resolutions declares the District's intention to consider the
formation of Improvement Areas JJ and KK, calls a public hearing on the proposed formation,
approves the form of a reimbursement agreement with the Developer (the "Reimbursement
Agreement") relating to the costs of the proceedings necessary to accomplish such
proceedings, and declares the intention of the District to incur bonded indebtedness for
Improvement Areas JJ and KK.
Fiscal Impact
The Developer has made a deposit to pay for the costs of the formation proceedings. The
Reimbursement Agreement provides that the Developer will be reimbursed for such costs if and
when bonds are issued for Improvement Areas JJ and KK.
The District will annually levy special taxes on all of the taxable property within proposed
Improvement Areas JJ and KK in accordance with the applicable rate and method of
apportionment in order to pay for the costs of facilities, debt service on bonds, the services and
administration of the District. Any bonds issued by the District are not obligations of the City and
will be secured solely by the special taxes levied in Improvement Areas JJ or KK, as applicable.
Exhibits
A - Resolution- Intention Re -2006-1 IA JJ and KK Formation
B - Resolution- Intention to Incur Debt Lake Elsinore IA JJ and KK
C - Reimbursement Agreement- Summerly Change Proceedings
D - RMA CFD No. 2006-1 Improvement Area JJ
E - RMA CFD No. 2006-1 Improvement Area KK
F - Second Amended Boundary Map of CFD No. 2006-1
RESOLUTION NO. 2017 -
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE,
CALIFORNIA, ACTING AS THE LEGISLATIVE BODY OF CITY OF LAKE ELSINORE,
COMMUNITY FACILITIES DISTRICT NO. 2006-1 (SUMMERLY), DECLARING ITS
INTENTION TO CONSIDER ESTABLISHING IMPROVEMENT AREAS JJ AND KK
FROM TERRITORY CURRENTLY WITHIN THE BOUNDARIES OF IMPROVEMENT
AREAS DD AND GG OF CITY OF LAKE ELSINORE COMMUNITY FACILITIES
DISTRICT NO. 2006-1 (SUMMERLY), RESPECTIVELY, AND TO INCUR BONDED
INDEBTEDNESS WITHIN PROPOSED IMPROVEMENT AREAS JJ AND KK
Whereas, after a public hearing, on February 28, 2006, the City Council (the "City Council') of
the City of Lake Elsinore (the "City") adopted Resolution Nos. 2006-30 (the "Original Resolution
of Formation") and 2006-31 which formed City of Lake Elsinore Community Facilities District No.
2006-1 (Summerly) (the "District' or "Community Facilities District No. 2006-1") and Improvement
Area Nos. 1 through 3 therein, and called special elections on February 28, 2006 within
Improvement Area Nos. 1 through 3 of the District on three propositions relating to the levying of
a special tax, the incurring of bonded indebtedness and the establishment of an appropriations
limit for the District, which were approved by more than two-thirds vote by the qualified electors
on February 28, 2006; and,
Whereas, subsequent to the formation of the District, the District received a petition signed by
owners of the land within the boundaries of the District to dissolve Improvement Area Nos. 1
through 3 therein and to establish Improvement Areas A through F of the District, to authorize the
levy of the special tax in accordance with rates and methods of appurtiohment of special taxes
for Improvement Areas A through F and to authorize the District to incur bonded indebtedness for
Improvement Areas A through F, and,
Whereas, on January 25, 2011, the City Council, acting as the legislative body of the District,
adopted Resolution Nos. 2011-005 and 2011-006, dissolving Improvement Area Nos. 1 through
3 therein, establishing Improvement Areas A through F of the District and declaring the intention
to incur bonded indebtedness of the District for Improvement Areas A through F; and,
Whereas, after a public hearing, on March 8, 2011, the City Council adopted Resolution
Nos. 2011-119 and 2011-120, which called special elections on March 8, 2011 within
Improvement Areas A through F of the District on three propositions relating to the levying of a
special tax, the incurring of bonded indebtedness and the establishment of an appropriations limit
for the District, which were approved by more than two-thirds vote by the qualified electors on
March 8, 2011 (collectively, the "2011 Change Proceedings"); and,
Whereas, subsequent to the 2011 Change Proceedings, the District received a petition signed
by owners of the land within Improvement Areas C through F of the District to dissolve
Improvement Areas C through F and to establish Improvement Areas CC, DD, EE, FF, GG, HH
and II of the District from the areas within Improvement Areas C through F of the District; and,
Whereas, on February 25, 2014, the City Council, acting as the legislative body of the District,
adopted Resolution Nos. 2014-2010 and 2011-2011, dissolving Improvement Areas C through F
therein, establishing Improvement Areas CC, DD, EE, FF, GG, HH and 11 of the District and
CC Reso No. 2017
Page 2 of 40
declaring the intention to incur bonded indebtedness of the District for Improvement Areas CC,
DD, EE, FF, GG, HH and II; and,
Whereas, after a public hearing, on April 8, 2014, the City Council adopted Resolution Nos. 2014-
016 and 2014-017, which called special elections on April 8, 2014 within Improvement Areas CC,
DD, EE, FF, GG, HH and II of the District on three propositions relating to the levying of a special
tax, the incurring of bonded indebtedness and the establishment of an appropriations limit for the
District for Improvement Areas CC, DD, EE, FF, GG, HH and Il, which were approved by more
than two-thirds vote by the qualified electors on April 8, 2014 (collectively, the "2014 Change
Proceedings"); and,
Whereas, the District has received a petition signed by McMillin Summerly, LLC, a Delaware
limited liability company, (the "Owner") which owns land within Improvement Area DD and GG of
the District, which the Owner desires to establish as Improvement Areas JJ and KK of the District,
respectively ("Proposed Improvement Area JJ" and "Proposed Improvement Area KK" and
together, the "Proposed Improvement Areas"), the boundaries of which are described herein in
Attachment "A" hereto and to approve new rates and methods of apportionment for each of
Proposed Improvement Area JJ and Proposed Improvement Area KK attached hereto as
Attachments "B" and "C," respectively (the "Proposed Rates and Methods'); and,
Whereas, the Owner desires the District incur bonded indebtedness on behalf of the Proposed
Improvement Areas in the amount not to exceed $7,000,000 for Proposed Improvement Area JJ
and $5,700,000 for Proposed Improvement Area KK, for the purpose of financing the Facilities
and Incidental Expenses described in the Original Resolution of Formation and as further set forth
in Attachment "D" hereto;
Whereas, it is the intention of the City .uuncil to consider financing the Facilities, the Services
and the Incidental Expenses (each as defined in Attachment "D" hereto) through the
establishment of the Proposed Improvement Areas and the issuance of bonded indebtedness in
an amount not to exceed $7,000,000 for Proposed Improvement Area JJ and $5,700,000 for
Proposed Improvement Area KK with respect to the Facilities and the Facilities Incidental
Expenses (as defined in Attachment "D"), and the levy of a special tax to pay for the Facilities (the
"Facilities Special Tax"), the Services (the "Services Special Tax") and the Services Incidental
Expenses and to pay debt service on the bonded indebtedness, provided that the bond sale and
such special tax levy are approved at elections to be held within the boundaries of each Proposed
Improvement Area; and,
Whereas, the City desires to enter into a reimbursement agreement with the Owner, the form of
which is on file with the City Clerk (the "Reimbursement Agreement"), to provide for the
reimbursement of certain amounts advanced by the Owner in connection with the establishment
of the Proposed Improvement Areas;
Whereas, the City Council and the Owner desire that upon, and in consideration for, completion
of the formation of the Proposed Improvement Areas that the special tax obligation and lien with
respect to Improvement Area DD and GG shall be fully satisfied, a notice of cancellation shall be
recorded with respect to such property and Improvement Areas DD and GG shall be dissolved;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, ACTING HAS
THE LEGISLATIVE BODY OF CITY OF LAKE ELSINORE COMMUNITY FACILITIES
DISTRICT NO. 2006-1 (SUMMERLY) DOES HEREBY RESOLVE, DETERMINE AND ORDER
AS FOLLOWS:
2
CC Reso No. 2017
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Section 1. Each of the above recitals is true and correct and is adopted by the legislative body
of the District.
Section 2. The City Council declares its intention to conduct proceedings pursuant to Article 3.5
of the Mello -Roos Community Facilities Act of 1982, as amended, commencing with Section
53311 of the Government Code (the "Act') for the designation of Proposed Improvement Areas
JJ and Proposed Improvement Area KK.
Section 3. The City Council hereby designates, pursuant to Section 53350 of the Act, an area
which shall be known as "Improvement Area JJ of Community Facilities District No. 2006-1 ", and
an area which shall be known as "Improvement Area KK of Community Facilities District No. 2006-
1" (each individually, an 'Improvement Area", and, together with the previously established
improvement areas of the District pursuant to the 2011 Change Proceedings, and modified by the
2014 Change Proceedings, collectively, the "Improvement Areas'). It is further proposed that the
boundaries of Community Facilities District No. 2006-1 shall be the legal boundaries as described
in Attachment "A" hereto (which consist of the combined boundaries of the Improvement Areas
and which shall, upon recordation of the amended boundary map for Community Facilities District
No. 2006-1, include the entirety of any parcel subject to taxation by Community Facilities District
No. 2006-1) and as depicted on the proposed amended boundary map of Community Facilities
District No. 2006-1 which is on file with the City Clerk of the City Council. The City Clerk of the
City Council is hereby directed to sign the amended boundary map of Community Facilities District
No. 2006-1 and record it with all proper endorsements thereon with the County Recorder of the
County of Riverside within 15 days after the adoption of this resolution, all as required by Section
3111 of the Streets and Highways Code of the State of California.
Section 4. The Facilities proposed to be provided within the Improvement Areas are public
facilities as defined in the Act. The Facilities and Facilities Incidental Expenses authorized to be
financed by the Improvement Areas are described in the Original Resolution of Formation and are
set forth in Attachment "D" hereto. The City is authorized by law to construct, acquire, own and
operate the City facilities to be financed by the District and Elsinore Valley Municipal Water District
(the "Water District') is authorized by law to construct and maintain the water and sewer facilities
for the benefit of each Improvement Area. The City Council hereby finds that the proposed
Facilities are necessary to meet increased demands placed upon the City as a result of
development occurring in Community Facilities District No. 2006-1. The Facilities may be
acquired from one or more of the property owners as completed public improvements or may be
constructed from bond proceeds or proceeds of the Facilities Special Tax. All or a portion of the
Facilities may be purchased with Community Facilities District No. 2006-1 funds, as completed
public facilities and/or constructed with Community Facilities District No. 2006-1 funds. Any
portion of the Facilities may be financed through a lease or lease -purchase arrangement if the
City hereafter determines that such arrangement is of benefit to the City.
The Services proposed to be provided for the benefit of the Proposed Improvement Areas
are public services as defined in the Act, and this City Council finds and determines that the
Services to be financed are in addition to those provided in the territory of the Proposed
Improvement Areas at the present time and do not supplant services already available within the
territory of the Proposed Improvement Areas. The City Council hereby finds and determines that
the description of the Services herein is sufficiently informative to allow taxpayers within the
Proposed Improvement Areas, to understand what the funds of the District may be used to
finance. The Services Incidental Expenses expected to be incurred include the costs of planning
the Services, the costs of forming the Proposed Improvement Areas, the cost of levying and
CC Reso No. 2017
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collecting the Services Special Tax within the Proposed Improvement Areas and the cost of
administration.
Section 5. Except where funds are otherwise available, it is the intention of the City Council
to levy annually in accordance with the procedures contained in the Act the Facilities Special Tax,
secured by a continuing lien against all non-exempt real property in Proposed Improvement Area
JJ and Proposed Improvement Area KK, sufficient to pay for: (i) the Facilities and Facilities
Incidental Expenses attributable to the Proposed Improvement Area JJ and Proposed
Improvement Area KK and (ii) the principal and interest and other periodic costs on bonds or other
indebtedness issued to finance the Facilities and Incidental Expenses, including the
establishment and replenishment of any reserve funds deemed necessary by the District, and any
remarketing, credit enhancement and liquidity facility fees (including such fees for instruments
which serve as the basis of a reserve fund in lieu of cash) attributable to the respective Proposed
Improvement Area. The Proposed Rates and Methods and manner of collection of the Facilities
Special Tax in Proposed Improvement Area JJ and Proposed Improvement Area KK are
described in detail in Attachments "B" and "C' attached hereto, respectively (which attachments
are incorporated herein by this reference). Attachments "B" and "C' allow each landowner within
Proposed Improvement Area JJ and Proposed Improvement Area KK to estimate the maximum
amount that may be levied against each parcel. In the first year in which such Facilities Special
Tax is levied, the levy shall include an amount sufficient to repay to the District all amounts, if any,
transferred to Community Facilities District No. 2006-1 pursuant to Section 53314 of the Act and
interest thereon.
The Facilities Special Tax may be increased by two percent (2%) per year, to the extent
permitted in the Rate and Method. If Facilities Special Taxes of Community Facilities District No.
2006-1 for the Proposed Improvement Areas are levied against any parcel used for private
residential purposes, (i) the maximum Facilities Special Tax rate shall not be increasedi over time
except that it may be increased by an amount not to exceed two percent per year to the extent
permitted in the rate and method, (ii) such tax shall not be levied later than the 2058-59 Fiscal
Year and (iii) under no circumstances will the Facilities Special Tax levied against any such parcel
used for private residential uses be increased in any fiscal year as a consequence of delinquency
or default by the owner or owners of any other parcel or parcels within the applicable Proposed
Improvement Area by more than ten percent above the amount that would have been levied in
that fiscal year had there never been any such delinquencies or defaults.
The Facilities Special Tax is based on the expected demand that each parcel of real
property within Proposed Improvement Area JJ and Proposed Improvement Area KK will place
on the Facilities and on the benefit that each parcel derives from the services to be provided by
the Facilities. The City Council hereby determines that the proposed Facilities are necessary to
meet the increased demand placed upon the City and the existing infrastructure in the City as a
result of the development of the territory within Community Facilities District No. 2006-1. The City
Council hereby determines the Proposed Rates and Methods set forth in Attachments "B" and "C"
to be reasonable. The Facilities Special Tax is apportioned to each parcel on the foregoing basis
pursuant to Section 53325.3 of the Act; and such Facilities Special Tax is not on or based upon
the value or ownership of real property. In the event that a portion of the property within Proposed
Improvement Area JJ and Proposed Improvement Area KK shall become for any reason exempt,
wholly or partially, from the levy of the Facilities Special Tax specified in Attachments "B" and "C,"
respectively, the City Council shall, on behalf of such Improvement Area cause the levy to be
increased, subject to the limitation of the maximum special tax for a parcel as set forth in
Attachments "B" and "C," respectively to the extent necessary upon the remaining property within
such Proposed Improvement Area JJ and Proposed Improvement Area KK which is not exempt
D
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in order to yield the Facilities Special Tax revenues required for the purposes described in this
Section. The obligation to pay Facilities Special Taxes may be prepaid as provided in the rates
and methods of apportionment set forth in Attachments B" and "C," respectively as such rates
and methods of apportionment may be amended hereafter.
Section 6. Except where funds are otherwise available, it is the intention of the City Council
to levy annually in accordance with the procedures contained in the Act the Services Special Tax,
secured by recordation of a continuing lien against all nonexempt real property in the Proposed
Improvement Areas, sufficient to pay for the Services and the Services Incidental Expenses. The
rate and method of apportionment and manner of collection of the Services Special Tax are
described in detail in Attachments "B" and "C hereto. Attachments "B" and "C" allows each
landowner within Proposed Improvement Area JJ and Proposed Improvement Area JJ,
respectively, to estimate the maximum amount of the Services Special Tax that may be levied
against each parcel therein.
The Services Special Tax may be increased by two percent (2%) per year, to the extent
permitted in the Rate and Method. The Services Special Tax may be levied for such period as
the Services are needed, as further described in Attachments "B" and "C" hereto.
The Services Special Tax is based on the expected demand that each parcel of real
property within each Proposed Improvement Area will place on the Services. The City Council
hereby determines that the proposed Services are necessary to meet the increased demand
placed upon the City and the maintenance of parks, open space and storm drain improvements
as a result of the development of the land within the Proposed Improvement Areas. The City
Council hereby determines the rate and method of apportionment of the special taxes set forth in
Attachments "B" and "C" to be reasonable. The Services Special Tax is apportioned to each
;parcel. on the foregoing basis pursuant to Section 53325.3 of the Act and such Services Special
Tax is not on or based upon the value or ownership of real property.
Section 7. It is necessary to incur bonded indebtedness within the boundaries of Proposed
Improvement Area JJ in an amount not to exceed $7,000,000 and within the boundaries of
Proposed Improvement Area KK in an amount not to exceed $5,700,000, in order to finance
certain of the costs of the Facilities and Facilities Incidental Expenses, as permitted by the Act for
the benefit of the respective Proposed Improvement Area.
Section 8. The indebtedness will be incurred for the purpose of financing the costs of the
Facilities and the Facilities Incidental Expenses, including, but not limited to, the funding of
reserve funds for the bonds, the financing of costs associated with the issuance of the bonds and
all other costs and expenses necessary to finance the Facilities which are permitted to be financed
pursuant to the Act.
Section 9. It is the intent of the City Council to authorize the sale of bonds of each Proposed
Improvement Area in one or more series, which bonds may be issued to fund Facilities costs and
Facilities Incidental Expenses for that Proposed Improvement Area in the respective maximum
amounts set forth in Section 6, and which bonds may bear interest at a rate not in excess of the
maximum rate permitted by law at the time that the bonds are issued. The term of the bonds of
each series shall be determined pursuant to a resolution of this City Council authorizing the
issuance of the bonds of such series, but such term shall in no event exceed 40 years from the
date of issuance of the bonds of such series, or such longer term as is then permitted by law.
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Section 10. Combined public hearings (the "Hearing") on the establishment of the Proposed
Improvement Areas within Community Facilities District No. 2006-1, the levying of special taxes
in each Proposed Improvement Area in accordance with the Proposed Rates and Methods and
the proposed issuance of bonds with respect to each Proposed Improvement Area to finance the
Facilities and the Facilities Incidental Expenses shall be held at 7:00 p.m., or as soon thereafter
as practicable, on February 28, 2017, at the City Cultural Center, 183 North Main Street, Lake
Elsinore, California. Should the City Council determine to establish the Proposed Improvement
Areas within Community Facilities District No. 2006-1, special elections will be held for each
Proposed Improvement Area to authorize the issuance of the bonds and the levy of the special
tax for the respective Proposed Improvement Area in accordance with the procedures contained
in Government Code Section 53326. If such elections are held, the proposed voting procedure
at the elections will be a landowner vote with each landowner who is the owner of record of land
within the applicable Proposed Improvement Area at the close of the Hearing, or the authorized
representative thereof, having one vote for each acre or portion thereof owned within such
Proposed Improvement Area. Ballots for the special election may be distributed by mail or by
personal service.
Section 11. At the time and place set forth above for the Hearing, the City Council will receive
testimony as to whether each Proposed Improvement Area within Community Facilities District
No. 2006-1 shall be established and shall consider:
(a) if an ad valorem property tax is currently being levied on property within the Proposed
Improvement Areas for the exclusive purpose of paying principal of or interest on bonds, lease
payments or other indebtedness incurred to finance construction of capital facilities; and
(b) if the capital facilities to be financed and constructed by Community Facilities District No.
2006-1 within the Proposed Improvement Areas wilFprovide the same services as were provided
by the capital facilities mentioned in subsection (a); and
(c) if the City Council makes the findings specified in subsections (a) and (b) above, it will
consider appropriate action to determine that the total annual amount of ad valorem property tax
revenue due from parcels within the Proposed Improvement Areas, for purposes of paying
principal and interest on the debt identified in subsection (a) above, shall not be increased after
the date on which the Proposed Improvement Areas are created, or after a later date determined
by the City Council with the concurrence of the legislative body which levied the property tax in
question.
Section 12. At the time and place set forth above for the Hearing, any interested person,
including all persons owning lands or registered to vote within any of the Proposed Improvement
Areas, may appear and be heard.
Section 13. Each City officer who is or will be responsible for providing the Facilities and the
Services within the Proposed Improvement Areas, if established, is hereby directed to study the
Proposed Improvement Areas of Community Facilities District No. 2006-1 and the Proposed
Rates and Methods and, at or before the time of the above-mentioned Hearing, file a report with
the City Council containing a brief description of the public improvements and services by type
which will in his or her opinion be required to meet adequately the needs of Community Facilities
District No. 2006-1 and an estimate of the cost of providing those public improvements and
services, including the cost of environmental evaluations of such improvements and an estimate
of the fair and reasonable cost of any Incidental Expenses to be incurred.
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Section 14. The City may accept advances of funds or work -in-kind from any source, including,
but not limited to, private persons or private entities, for any authorized purpose, including, but
not limited to, paying any cost incurred by the City in creating the Proposed Improvement Areas
within Community Facilities District No. 2006-1. The City may enter into an agreement with the
person or entity advancing the funds or work -in-kind, to repay all or a portion of the funds
advanced, or to reimburse the person or entity for the value, or cost, whichever is less, of the
work -in-kind, as determined by the City Council, with or without interest.
Section 15. The City Clerk of the Board is hereby directed to publish a notice (the "Notice') of
the Hearing pursuant to Section 6061 of the Government Code in a newspaper of general
circulation published in the area of the Proposed Improvement Areas within Community Facilities
District No. 2006-1. The City Clerk of the Board is further directed to mail a copy of the Notice to
each of the landowners within the boundaries of the Proposed Improvement Areas at least 15
days prior to the Hearing. The Notice shall contain the text or a summary of this Resolution, the
time and place of the Hearing, a statement that the testimony of all interested persons or
taxpayers will be heard, a description of the protest rights of the registered voters and landowners
in the proposed district and a description of the proposed voting procedure for the election
required by the Act. Such publication shall be completed at least seven (7) days prior to the date
of the Hearing.
Section 16. The reasonably expected maximum principal amount of the bonded debt within
Proposed Improvement Area JJ is Seven Million Dollars ($7,000,000) and within Proposed
Improvement Area KK is Five Million Seven Hundred Thousand Dollars ($5,700,000).
Section 17. Except to the extent limited in any bond resolution or trust indenture related to the
issuance of bonds, the City Council hereby reserves to itself all rights and powers set forth in
Section 53344.1 of the Act (relating to tenders -in full or partial payment).
Section 18. The form of the Reimbursement Agreement is hereby approved. The Mayor, the
City Manager, the Assistant City Manager, or their written designees are hereby authorized and
directed to execute and deliver the Reimbursement Agreement in the form on file with the City
Clerk with such changes, insertions and omissions as may be approved by the officer or officers
executing such agreement, said execution being conclusive evidence of such approval.
Section 19. This Resolution shall be effective upon its adoption.
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Passed and Adopted this 241" day of January, 2017.
Robert E. Magee, Mayor
Attest:
Susan M. Domen, MMC
City Clerk
STATE OF CALIFORNIA)
COUNTY OF RIVERSIDE) ss.
CITY OF LAKE ELSINORE)
I, Susan M. Domen, MMC, City Clerk of the City of Lake Elsinore, California, do hereby certify
that Resolution No. 2017- was adopted by the City Council of the City of Lake Elsinore,
California, at the regular meeting of January 24, 2017, and that the same was adopted by the
following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
Susan M. Domen, MMC
City Clerk
CC Reso No. 2017
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ATTACHMENT"A"
PROPOSED AMENDED BOUNDARY MAP
OF COMMUNITY FACILITIES DISTRICT NO. 2006-1 (SUMMERLY)
OF THE CITY OF LAKE ELSINORE
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With respect to Assessor's Parcel No. 371-270-054, the portion referenced as No. 5 in Parcel 1
and as further described in Notice of Lot Line Adjustment No. 16-416, recorded in the Official
Records of the County of Riverside as Document No. 2016-0281439 on July 7, 2016 is included
within the boundaries of Improvement Area JJ.
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ATTACHMENT"B"
PROPOSED RATE AND METHOD OF APPORTIONMENT
CITY OF LAKE ELSINORE
COMMUNITY FACILITIES DISTRICT NO. 2006-1 (SUMMERLY)
(PROPOSED IMPROVEMENT AREA JJ)
A Special Tax shall be levied on all Assessor's Parcels in City of Lake Elsinore Community
Facilities District No. 2006-1 (Summerly) Improvement Area JJ ("CFD No. 2006-1 IA JJ") and
collected each Fiscal Year commencing in Fiscal Year 2017-2018, in an amount determined
through the application of this Rate and Method of Apportionment as described below. All of the
real property in CFD No. 2006-1 IA JJ, unless exempted by law or by the provisions hereof, shall
be taxed for the purposes, to the extent and in the manner herein provided.
IATN1Ii! I1>iL00
The terms hereinafter set forth have the following meanings
"Acre or Acreage" means the land area of an Assessor's Parcel as shown on an Assessor's
Parcel Map, or if the land area is not shown on an Assessor's Parcel Map, the land area shown
on the applicable final map, parcel map, condominium plan, or other recorded County parcel map.
"Act" means the Mello -Roos Community Facilities Act of 1982, as amended, being Chapter 2.5
(commencing with Section 53311) of Part 1 of Division 2 of Title 5 of the Government Code of the
State of California.
"Administrative Expenses" means the following actual or reasonably estimated costs directly
related to the administration-ofCFD Nc.. 2006-1 IA JJ: the costs of computing the Special Taxes
and preparing the annual Special Tax collection schedules (whether by the City or designee
thereof or both); the costs of collecting the Special Taxes (whether by the City or otherwise); the
costs of remitting the Special Taxes to the Trustee; the costs of the Trustee (including its legal
counsel) in the discharge of the duties required of it under the Indenture; the costs to the City,
CFD No. 2006-1 IA JJ or any designee thereof of complying with arbitrage rebate requirements;
the costs to the City, CFD No. 2006-1 IA JJ or any designee thereof of complying with disclosure
requirements of the City, CFD No. 2006-1 IA JJ or obligated persons associated with applicable
federal and state securities laws and the Act; the costs associated with preparing Special Tax
disclosure statements and responding to public inquiries regarding the Special Taxes; the costs
of the City, CFD No. 2006-1 IA JJ or any designee thereof related to an appeal of the Special Tax;
the costs associated with the release of funds from an escrow account; and the City's annual
administration fees and third party expenses. Administrative Expenses shall also include amounts
estimated by the CFD Administrator or advanced by the City or CFD No. 2006-1 IA JJ for any
other administrative purposes of CFD No. 2006-1 IA JJ, including attorney's fees and other costs,
and attorney's fees and other costs related to commencing and pursuing to completion any
foreclosure of delinquent Special Taxes.
"Approved Property" means all Assessor's Parcels of Taxable Property: (i) that are included in
a Final Map that was recorded prior to the January 1 st preceding the Fiscal Year in which the
Special Tax is being levied, and (ii) that have not been issued a building permit on or before May
1 st preceding the Fiscal Year in which the Special Tax is being levied.
"Assessor's Parcel" means a lot or parcel of land designated on an Assessor's Parcel Map with
an assigned Assessor's Parcel Number.
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"Assessor's Parcel Map" means an
parcels by Assessor's Parcel Number.
"Assessor's Parcel Number" means
County for purposes of identification.
official map of the Assessor of the County designating
that number assigned to an Assessor's Parcel by the
"Assigned Special Tax for Facilities" means the Special Tax for Facilities for each Land Use
Class of Developed Property, as determined in accordance with Section C.1.(b) below.
"Authorized Facilities" means those authorize improvements, as listed in an exhibit to the
Resolution of Formation.
"Backup Special Tax for Facilities" means the Special Tax for Facilities applicable to each
Assessor's Parcel of Developed Property, as determined in accordance with Section C.1.(c)
below.
"CFD Administrator" means an official of the City, or designee thereof, responsible for
determining the Special Tax Requirement for Facilities, the Special Tax Requirement for Services
as determined in accordance with Section I below, and providing for the levy and collection of the
Special Taxes.
"CFD" or "CFD No. 2006-1 IA JJ" means Improvement Area JJ of CFD No. 2006-1 as identified
on the boundary map for CFD No. 2006-1.
"CFD No. 2006-1" means City of Lake Elsinore Community Facilities District No. 2006-1
(Summerly) established by the City under the Act.
"CFD No. 2006-1 IA JJ Bonds" means any obligation to repay a sum of money, including
obligations in the form of borids,- notes, certificates of participation, long-term leases, loans from.
government agencies, or loans from banks, other financial institutions, private businesses, or
individuals, or long-term contracts, or any refunding thereof, to which Special Tax for Facilities
within CFD No. 2006-1 IA JJ have been pledged.
"City" means the City of Lake Elsinore.
"City Council" means the City Council of the City of Lake Elsinore, acting as the Legislative Body
of CFD No. 2006-1 IA JJ, or its designee.
"County" means the County of Riverside.
"Developed Property" means, with respect to the Special Tax for Facilities, for each Fiscal Year,
all Taxable Property, 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 and 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 for Facilities is being levied. Once
an Assessor's Parcel has been designated Developed Property, the Maximum Special Tax for
Facilities cannot be reduced for any reason unless a prepayment in full or partial prepayment is
made pursuant to Section G.
"Final Subdivision" means (i) a final map, or portion thereof, approved by the City pursuant to
the Subdivision Map Act (California Government Code Section 66410 et seq.) that creates
individual lots for which building permits may be issued, or (ii) for condominiums, a final map, or
No
CC Reso No. 2017
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portion thereof, approved by the City and a condominium plan recorded pursuant to California
Civil Code Section 1352 that creates individual lots for which building permits may be issued.
"Fiscal Year" means the period commencing on July 1s' of any year and ending the following
June 30'h.
"Funding Agreement" means the Funding, Construction and Acquisition Agreement entered into
by the City, on behalf of CFD No. 2006-1, as it may be amended.
"Indenture" means the indenture, fiscal agent agreement, resolution or other instrument
pursuant to which CFD No. 2006-1 IA JJ Bonds are issued, as modified, amended and/or
supplemented from time to time, and any instrument replacing or supplementing the same.
"Land Use Class" means any of the classes listed in Table 1 below.
"Maximum Special Tax for Facilities" means the maximum Special Tax for Facilities,
determined in accordance with Section C below, that can be levied in any Fiscal Year on any
Assessor's Parcel.
"Non -Residential Property" means all Assessor's Parcels of Developed Property for which a
building permit permitting the construction of one or more non-residential units or facilities has
been issued by the City.
"Outstanding Bonds" means all CFD No. 2006-1 IA JJ Bonds which are deemed to be
outstanding under the Indenture.
"Property Owner's Association Property" means, for each Fiscal Year, any property within the
boundaries of CFD No. 2006-1 IA JJ that was owned by a property ,owner association, including
any master or sub -association, as of January 1 of the prior Fiscal Year.
"Proportionately" means for Developed Property that the ratio of the actual Special Tax for
Facilities levy to the Assigned Special Tax for Facilities is equal for all Assessor's Parcels of
Developed Property. For Undeveloped Property, "Proportionately" means that the ratio of the
actual Special Tax for Facilities levy per Acre to the Maximum Special Tax for Facilities per Acre
is equal for all Assessor's Parcels of Undeveloped Property. The term "Proportionately" may
similarly be applied to other categories of Taxable Property as listed in Section D below.
"Public Property" means , for each Fiscal Year, (i) any property within the boundaries of CFD
No. 2006-1 IA JJ owned by, irrevocably offered or dedicated to, or over, through or under which
an easement for purposes of public use has been granted, to the federal government, the State,
the County, the City, the Lake Elsinore Unified School District, or any local government or other
public agency as of January I of the previous Fiscal Year, provided that any property leased by a
public agency to a private entity and subject to taxation under Section 53340.1 of the Act shall be
taxed and classified according to its use; or (ii) any property within the boundaries of CFD No.
2006-1 IA JJ that was encumbered, as of January I of the previous Fiscal Year, by an unmanned
utility easement making impractical its utilization for other than the purpose set forth in the
easement.
"Residential Floor Area" means all of the square footage of living area within the perimeter of a
residential structure, not including any carport, walkway, garage, overhang, patio, enclosed patio,
or similar area. The determination of Residential Floor Area for an Assessor's Parcel shall be
made by reference to the building permit(s) issued for such Assessor's Parcel.
m
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"Residential Property" means all Assessor's Parcels of Developed Property for which a building
permit permitting the construction thereon of one or more residential dwelling units has been
issued by the City.
"Resolution of Formation" means the resolution of formation for CFD No. 2006-1 IA JJ.
"Special Tax(es)" means any of the special taxes authorized to be levied within CFD No. 2006-
1 IA JJ pursuant to the Act.
"Special Tax for Facilities" means the special tax to be levied in each Fiscal Year on each
Assessor's Parcel of Developed Property, Taxable Property Owner Association Property, Taxable
Public Property, and Undeveloped Property to fund the Special Tax Requirement for Facilities.
Special Tax for Facilities Requirement " means that amount required in any Fiscal Year for
CFD No. 2006-1 IA JJ to: (i) pay debt service on all Outstanding Bonds due in the calendar year
commencing in such Fiscal Year; (ii) pay periodic costs on the CFD No. 2006- 1 IA JJ Bonds,
including but not limited to, credit enhancement and rebate payments on the CFD No. 2006-1 IA
JJ Bonds due in the calendar year commencing in such Fiscal Year; (iii) pay Administrative
Expenses; (iv) pay any amounts required to establish or replenish any reserve funds for all
Outstanding Bonds; (v) pay for reasonably anticipated Special Tax for Facilities delinquencies;
(vi) pay directly for acquisition or construction of Authorized Facilities to the extent that the
inclusion of such amount does not increase the Special Tax for Facilities levy on Approved
Property and Undeveloped Property; less (vii) a credit for funds available to reduce the annual
Special Tax for Facilities levy, as determined by the CFD Administrator pursuant to the Indenture.
"State" means the State of California.
"Taxable Property" means all of the Assessor's Farce!-, within the boundaries of CFD No. 2006-
1 IA JJ which are not exempt from the Special Tax for Facilities pursuant to law or Section E
below.
"Trustee" means the trustee, fiscal agent, or paying agent under the Indenture.
"Undeveloped Property" means, for each Fiscal
Developed Property, Approved Property, Taxable
Taxable Public Property.
B. ASSIGNMENT TO LAND USE CATEGORIES
Year, all Taxable Property not classified as
Property Owner Association Property, or
Each Fiscal Year, all Taxable Property within CFD No. 2006-1 IA JJ shall be classified as
Developed Property, Approved Property, Taxable Public Property, Taxable Property Owner
Association Property, or Undeveloped Property, and shall be subject to Special Taxes in
accordance with this Rate and Method of Apportionment determined pursuant to Sections C and
D below. Residential Property shall be assigned to Land Use Classes 1 through 5 as listed in
Table 1 below based on the Residential Floor Area for each unit. Non -Residential Property shall
be assigned to Land Use Class 6. With respect to Residential Property, the Residential Floor Area
shall be determined from the most recent building permit issued for such Assessor's Parcel.
C. MAXIMUM SPECIAL TAX FOR FACILITIES
1. Developed Property
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CC Reso No. 2017
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(a) Maximum Special Tax for Facilities
The Maximum Special Tax for Facilities for each Assessor's Parcel classified as Developed
Property shall be the greater of (i) the amount derived by application of the Assigned Special
Tax for Facilities or (ii) the amount derived by application of the Backup Special Tax for
Facilities.
(b) Assigned Special Tax for Facilities
The Fiscal Year 2017-2018 Assigned Special Tax for Facilities for each Land Use Class is
shown below in Table 1.
TABLE 1
ASSIGNED SPECIAL TAX FOR FACILITIES FOR DEVELOPED PROPERTY
COMMUNITY FACILITIES DISTRICT NO. 2006-1 IMPROVEMENT AREA JJ
FISCAL YEAR 2017-2018
Land
Use
Class
Description
Residential Floor Area
Assigned Special
Tax for Facilities
1
Residential Property
Less than 1,700 sq. ft
$1,280 per unit
2
Residential Property
1,700 - 1,999 sq. ft
$1,320 per unit
3
Residential Property
2,000 - 2,299 sq, ft
$1,570 per unit
4
Residential Propertyr
,: ,
-2,300 - 2,599 sq. ft
$1,580 per unit
5
Residential Property
Greater than 2,599 sq. ft.
$1,590 per unit
6
Non -Residential Property
N/A
$12,032 per Acre
(c) Backup Special Tax for Facilities
The Fiscal Year 2017-2018 Backup Special Tax for Facilities attributable to a Final Subdivision
will equal $12,032, multiplied by the Acreage of all Taxable Property, exclusive of any Taxable
Property Owner Association Property and Taxable Public Property, therein. The Backup
Special Tax for Facilities for each Assessor's Parcel of Residential Property shall be computed
by dividing the Backup Special Tax for Facilities attributable to the applicable Final Subdivision
by the number of Assessor's Parcels for which building permits for residential construction
have or may be issued (i.e., the number or residential lots). The Backup Special Tax for
Facilities for each Assessor's Parcel of Non -Residential Property therein shall equal $12,032
multiplied by the Acreage of such Assessor's Parcel.
If a Final Subdivision includes Assessor's Parcels of Taxable Property for which building
permits for both residential and non-residential construction may be issued, exclusive of
Taxable Property Owner Association Property and Taxable Public Property, then the Backup
Special Tax for Facilities for each Assessor's Parcel of Residential Property shall be computed
exclusive of the Acreage and Assessor's Parcels of property for which building permits for
non-residential construction may be issued.
Notwithstanding the foregoing, if all or any portion of the Final Subdivision(s) described in the
preceding paragraphs is subsequently changed or modified by recordation of a lot line
adjustment or similar instrument, and only if the CFD Administrator determines that such
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change or modification results in a decrease in the number of Assessor's Parcels of Taxable
Property for which building permits for residential construction have or may be issued within
such Final Subdivision, then the Backup Special Tax for Facilities for each Assessor's Parcel
of Developed Property that is part of the lot line adjustment or similar instrumentfor such Final
Subdivision shall be a rate per Acre as calculated below. The Backup Special Tax for Facilities
previously determined for an Assessor's Parcel of Developed Property that is not a part of the
lot line adjustment or similar instrument for such Final Subdivision shall not be recalculated.
Determine the total Backup Special Tax for Facilities anticipated to apply to the
changed or modified portion of the Final Subdivision area prior to the change or
modification.
2. The result of paragraph I above shall be divided by the Acreage of Taxable Property
which is ultimately expected to exist in such changed or modified portion of the Final
Subdivision area, as reasonably determined by the CFD Administrator.
3. The result of paragraph 2 above shall be the Backup Special Tax for Facilities per
Acre which shall be applicable to Assessor's Parcels of Developed Property in such
changed or modified portion of the Final Subdivision area for all remaining Fiscal
Years in which the Special Tax for Facilities may be levied.
(d) Release of Obligation to Pay and Disclose Backup Special Tax
All Assessor's Parcels within CFD No. 2006-1 IA JJ will be relieved simultaneously and
permanently from the obligation to pay and disclose the backup Special Tax if the CFD
Administrator determines that the annual debt service required for the Outstanding Bonds,
when compared to the Assigned Special Taxes for Facilities that may be levied against all
Assessor's Parcels -of -Developed Property results in 110% debt service coverage (i.e., the
aggregate Assigned Special Taxes for Facilities that may be levied against all Developed
Property in each remaining Fiscal Year based on then existing development in CFD No. 2006-
1 IA JJ is at least equal to the sum of (i) the Administrative Expenses and (ii) 1.10 times
maximum annual debt service, in each remaining Fiscal Year on the Outstanding Bonds).
(e) Increase in the Assigned Special Tax for Facilities and Backup Special Tax for Facilities
The Fiscal Year 2017-2018 Assigned Special Tax for Facilities, identified in Table 1 above,
and Backup Special Tax for Facilities shall increase thereafter, commencing on July 1, 2018
and on July 1 of each Fiscal Year thereafter, by an amount equal to two percent (2%) of the
amount in effect for the previous Fiscal Year.
(f) Multiple Land Use Classes
In some instances, an Assessor's Parcel of Developed Property may contain more than one
Land Use Class. The Maximum Special Tax for Facilities levied on an Assessor's Parcel shall
be the sum of the Maximum Special Tax for Facilities for all Land Use Classes located on that
Assessor's Parcel. The CFD Administrator's allocation to each type of property shall be final.
2.
The Fiscal Year 2017-2018 Maximum Special Tax for Facilities for Approved Property, Taxable
Property Owner Association Property, Taxable Public Property, and Undeveloped Property shall
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be $12,032 per Acre and shall increase thereafter, commencing on July 1, 2018 and on July 1 of
each Fiscal Year thereafter, by an amount equal to two percent (2%) of the Maximum Special Tax
for Facilities in effect for the previous Fiscal Year.
D. METHOD OF APPORTIONMENT OF THE SPECIAL TAX FOR FACILITIES
Commencing with Fiscal Year 2017-2018 and for each following Fiscal Year, the City
Council shall determine the Special Tax Requirement for Facilities and levy the Special Tax for
Facilities until the amount of Special Tax for Facilities levy equals the Special Tax Requirement
for Facilities. The Special Tax for Facilities shall be levied each Fiscal Year as follows:
Step One: The Special Tax for Facilities shall be levied on each Assessor's
Parcel of Developed Property in an amount equal to 100% of the applicable
Assigned Special Tax for Facilities;
Step Two: If additional monies are needed to satisfy the Special Tax Requirement for
Facilities after the first step has been completed, the Special Tax for Facilities shall
be levied Proportionately on each Assessor's Parcel of Approved Property at up to
100% of the Maximum Special Tax for Facilities for Approved Property;
Step Three: If additional monies are needed to satisfy the Special Tax Requirement for
Facilities after the first two steps has been completed, the Special Tax for Facilities
shall be levied Proportionately on each Assessor's Parcel of Undeveloped
Property at up to 100% of the Maximum Special Tax for Facilities for Undeveloped
Property;
Step Four: If -additional monies are needed to satisfy the Special Tax Requirement, for
Facilities after the first three steps have been completed, then the levy of the
Special Tax for Facilities on each Assessor's Parcel of Developed Property whose
Maximum Special Tax for Facilities is determined through the application of the
Backup Special Tax for Facilities shall be increased in equal percentages from the
Assigned Special Tax for Facilities up to the Maximum Special Tax for Facilities
for each such Assessor's Parcel;
Step Five: If additional monies are needed to satisfy the Special Tax Requirement for
Facilities after the first four steps have been completed, then the Special Tax for
Facilities shall be levied Proportionately on each Assessor's Parcel of Taxable
Property Owner Association Property and Taxable Public Property at up to 100%
of the Maximum Special Tax for Facilities for Taxable Property Owner Association
Property or Taxable Public Property.
Notwithstanding the above, the City Council may, in any Fiscal Year, levy Proportionately less
than 100% of the Assigned Special Tax for Facilities in step one (above), when (i) the City Council
is no longer required to levy the Special Tax for Facilities pursuant to steps two through four above
in order to meet the Special Tax Requirement for Facilities; (ii) all authorized CFD No. 2006-1 IA
JJ Bonds have already been issued or the City Council has covenanted that it will not issue any
additional CFD No. 2006-1 IA JJ Bonds (except refunding bonds) to be supported by the Special
Tax for Facilities; and (iii) all Authorized Facilities have been constructed and/or acquired.
Further notwithstanding the above, under no circumstances will the Special Tax for Facilities
levied against any Assessor's Parcel of Residential Property be increased by more than ten
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percent as a consequence of delinquency or default by the owner of any other Assessor's Parcel
within CFD No. 2006-1 IA JJ.
E. EXEMPTIONS
No Special Tax for Facilities shall be levied on up to 12.82 Acres of Property Owner Association
Property and/or Public Property in CFD No. 2006-1 IA JJ. Tax-exempt status will be assigned by
the CFD Administrator in the chronological order in which property becomes Property Owner
Association Property or Public Property. However, should an Assessor's Parcel no longer be
classified as Property Owner Association Property or Public Property, its tax-exempt status will
be revoked.
Property Owner Association Property or Public Property that is not exempt from Special Tax for
Facilities under this section shall be subject to the levy of the Special Tax for Facilities and shall
be taxed Proportionately as part of the fourth step in Section D above, at up to 100% of the
Maximum Special Tax for Facilities for Taxable Property Owner Association Property or Taxable
Public Property.
F. MANNER OF COLLECTION
The Special Tax for Facilities shall be collected in the same manner and at the same time as
ordinary ad valorem property taxes, provided, however, that CFD No. 2006-1 IA JJ may collect
Special Tax for Facilities at a different time or in a different manner if necessary to meet its
financial obligations, and may covenant to foreclose and may actually foreclose on delinquent
Assessor's Parcels as permitted by the Act.
G. PREPAYMENT OF SPECIAL TAX FOR FACILITIES
The following additional definitions apply to this Section G:
"Buildout" means, for CFD No. 2006-1 IA JJ, that all expected building permits have been issued.
"CFD Public Facilities Costs" means either $5,125,000 in 2017 dollars, which shall increase by
the Construction Inflation Index on July 1, 2018, and on each July I thereafter, or such lower
number as (i) shall be determined by the CFD Administrator as sufficient to fund the Authorized
Facilities to be provided by CFD No. 2006-1 IA JJ under the authorized bonding program for CFD
No. 2006-1 IA JJ, or (ii) shall be determined by the City Council concurrently with a covenant that
it will not issue any more CFD No. 2006-1 IA JJ Bonds (except refunding bonds) to be supported
by the Special Tax for Facilities levy under this Rate and Method of Apportionment as described
in Section D above.
"Construction Inflation Index" means the annual percentage change in the Engineering News
Record Building Cost Index for the City of Los Angeles, measured as of the calendar year which
ends in the previous Fiscal Year. In the event this index ceases to be published, the Construction
Inflation Index shall be another index as determined by the CFD Administrator that is reasonably
comparable to the Engineering News Record Building Cost Index for the City of Los Angeles.
"Future Facilities Costs" means the CFD Public Facilities Costs minus (i) public facility costs
previously paid from the Improvement Fund, (ii) moneys currently on deposit in the Improvement
M-
CC Reso No. 2017
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Fund, and (iii) moneys currently on deposit in an escrow fund established pursuant to the
Indenture that are expected to be available to finance the cost of Authorized Facilities.
"Improvement Fund" means an account specifically identified in the Indenture to hold funds
which are currently available for expenditure to acquire or construct Authorized Facilities eligible
under the Act.
"Previously Issued Bonds" means, for any Fiscal Year, all Outstanding Bonds that are deemed
to be outstanding under the Indenture after the first interest and/or principal payment date
following the current Fiscal Year.
Prepayment in Full
Only an Assessor's Parcel of Developed Property, or Undeveloped Property for which a
building permit has been issued, may be prepaid. The obligation of the Assessor's Parcel to pay
the Special Tax for Facilities may be permanently satisfied as described herein, provided that a
prepayment may be made with respect to a particular Assessor's Parcel only if there are no
delinquent Special Taxes with respect to such Assessor's Parcel at the time of prepayment. An
owner of an Assessor's Parcel intending to prepay the Special Tax for Facilities obligation shall
provide the CFD Administrator with written notice of intent to prepay. Within 30 days of receipt of
such written notice, the CFD Administrator shall notify such owner of the prepayment amount for
such Assessor's Parcel. The CFD Administrator may charge a reasonable fee for providing this
service. Prepayment must be made not less than 45 days prior to the next occurring date that
notice of redemption of CFD No. 2006-1 IA JJ Bonds from the proceeds of such prepayment may
be given by the Trustee pursuant to the Indenture.
The Special Tax for Facilities Prepayment Amount (defined below) shall be calculated
as summarized below (capitalized terms as defined below):
follows:
The Prepayment Amount shall be determined as of the proposed prepayment date as
1. Confirm that no Special Tax delinquencies apply to such Assessor's Parcel.
2. For Assessor's Parcels of Developed Property, compute the Assigned Special Tax
for Facilities and Backup Special Tax for Facilities. For Assessor's Parcels of Undeveloped
Property for which a building permit has been issued, compute the Assigned Special Tax for
MM
Bond Redemption Amount
plus
Redemption Premium
plus
Future Facilities Amount
plus
Defeasance Amount
plus
Administrative Fees and Expenses
less
Reserve Fund Credit
less
Capitalized Interest Credit
Equals:
Prepayment Amount
The Prepayment Amount shall be determined as of the proposed prepayment date as
1. Confirm that no Special Tax delinquencies apply to such Assessor's Parcel.
2. For Assessor's Parcels of Developed Property, compute the Assigned Special Tax
for Facilities and Backup Special Tax for Facilities. For Assessor's Parcels of Undeveloped
Property for which a building permit has been issued, compute the Assigned Special Tax for
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CC Reso No. 2017
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Facilities and Backup Special Tax for Facilities for that Assessor's Parcel as though it was
already designated as Developed Property, based upon the building permit which has already
been issued for that Assessor's Parcel.
3. (a) Divide the Assigned Special Tax for Facilities computed pursuant to paragraph
2 by the total estimated Assigned Special Tax for Facilities for the entire CFD No. 2006-1 IA
JJ based on the Developed Property Special Tax for Facilities which could be levied in the
current Fiscal Year on all expected development through Buildout of CFD No. 2006-1 IA JJ,
excluding any Assessor's Parcels which have been prepaid, and
(b) Divide the Backup Special Tax for Facilities computed pursuant to paragraph 2 by
the total estimated Backup Special Tax for Facilities at Buildout for the entire CFD No. 2006-
1 IA JJ, excluding any Assessor's Parcels which have been prepaid.
4. Multiply the larger quotient computed pursuant to paragraph 3(a) or 3(b) by the
Previously Issued Bonds to compute the amount of Previously Issued Bonds to be retired and
prepaid (the "Bond Redemption Amount")
5. Multiply the Bond Redemption Amount computed pursuant to paragraph 4 by the
applicable redemption premium (e.g., the redemption price -100%), if any, on the Previously
Issued Bonds to be redeemed (the "Redemption Premium").
6. Compute the current Future Facilities Costs.
7. Multiply the larger quotient computed pursuant to paragraph 3(a) or 3(b) by the
amount determined pursuahi bc-paragraph 6 to compute the amount of Future Facilities Costs
to be prepaid (the "Future Facilities Amount").
8. Compute the amount needed to pay interest on the Bond Redemption Amount
from the first bond interest and/or principal payment date following the current Fiscal Year
until the earliest redemption date for the Previously Issued Bonds.
9. Determine the Special Tax for Facilities levied on the Assessor's Parcel in the
current Fiscal Year which has not yet been paid.
10. Compute the minimum amount the CFD Administrator reasonably expects to
derive from the reinvestment of the Special Tax for Facilities Prepayment Amount less the
Future Facilities Amount and the Administrative Fees and Expenses (defined below) from the
date of prepayment until the redemption date for the Previously Issued Bonds to be redeemed
with the prepayment.
11. Add the amounts computed pursuant to paragraphs 8 and 9 and subtract the
amount computed pursuant to paragraph 10 (the "Defeasance Amount").
12. The administrative fees and expenses of CFD No. 2006-1 IA JJ are as calculated
by the CFD Administrator and include the costs of computation of the prepayment, the costs
to invest the prepayment proceeds, the costs of redeeming CFD No. 2006-1 IA JJ Bonds, and
the costs of recording any notices to evidence the prepayment and the redemption (the
"Administrative Fees and Expenses").
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13. The reserve fund credit (the "Reserve Fund Credit") shall equal the lesser of: (a)
the expected reduction in the reserve requirement (as defined in the Indenture), if any,
associated with the redemption of Previously Issued Bonds as a result of the prepayment, or
(b) the amount derived by subtracting the new reserve requirement (as defined in the
Indenture) in effect after the redemption of Previously Issued Bonds as a result of the
prepayment from the balance in the reserve fund on the prepayment date, but in no event
shall such amount be less than zero. No Reserve Fund Credit shall be granted if the amount
then on deposit in the reserve fund for the Previously Issued Bonds is below 100% of the
reserve requirement (as defined in the Indenture).
14. If any capitalized interest for the Previously Issued Bonds will not have been
expended as of the date immediately following the first interest and/or principal payment
following the current Fiscal Year, a capitalized interest credit shall be calculated by multiplying
the larger quotient computed pursuant to paragraph 3(a) or 3(b) by the expected balance in
the capitalized interest fund or account under the Indenture after such first interest and/or
principal payment (the "Capitalized Interest Credit").
15. The Special Tax for Facilities prepayment is equal to the sum of the amounts
computed pursuant to paragraphs 4, 5, 7, 11 and 12, less the amounts computed pursuant to
paragraphs 13 and 14 (the "Special Tax for Facilities Prepayment Amount").
From the Special Tax for Facilities Prepayment Amount, the amounts computed
pursuant to paragraphs 4, 5, 11, 13 and 14 shall be deposited into the appropriate fund as
established under the Indenture and be used to retire CFD No. 2006-1 IA JJ Bonds or make
debt service payments. The amount computed pursuant to paragraph 7 shall be deposited
into the Improvement Fund. The amount computed pursuant to paragraph 12 shall be retained
by C;FD'No. 2006-1 IA JJ.
The Special Tax for Facilities Prepayment Amount may be insufficient to redeem a full
$5,000 increment of CFD No. 2006-1 IA JJ Bonds. In such cases, the increment above $5,000
or integral multiple thereof will be retained in the appropriate fund established under the
Indenture to be used with the next prepayment of CFD No. 2006-1 IA JJ Bonds or to make
debt service payments.
As a result of the payment of the current Fiscal Year's Special Tax for Facilities levy
as determined under paragraph 9 (above), the CFD Administrator shall remove the current
Fiscal Year's Special Tax for Facilities levy for such Assessor's Parcel from the County tax
rolls. With respect to any Assessor's Parcel that is prepaid, the City Council shall cause a
suitable notice to be recorded in compliance with the Act, to indicate the prepayment of the
Special Tax for Facilities and the release of the Special Tax for Facilities lien on such
Assessor's Parcel, and the obligation of such Assessor's Parcel to pay the Special Tax for
Facilities shall cease.
Notwithstanding the foregoing, no Special Tax for Facilities prepayment shall be
allowed unless, at the time of such proposed prepayment, the amount of Maximum Special
Tax for Facilities that may be levied on Taxable Property within CFD No. 2006-1 IA JJ (after
excluding 12.82 Acres of Property Owner Association Property and/or Public Property in CFD
No. 2006-1 IA JJ as set forth in Section E) both prior to and after the proposed prepayment is
at least equal to the sum of (i) the Administrative Expenses, as defined in Section A above,
and (ii) 1.10 times maximum annual debt service, in each remaining Fiscal Year on the
Outstanding Bonds.
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2. Prepayment in Part
The Special Tax for Facilities on an Assessor's Parcel of Developed Property or an
Assessor's Parcel of Undeveloped Property for which a building permit has been issued may be
partially prepaid. The amount of the prepayment shall be calculated as in Section GA.; except
that a partial prepayment shall be calculated according to the following formula:
PP = ((PE —A) x F) +A
These terms have the following meaning:
PP = Partial Prepayment Amount
PE = the Prepayment Amount calculated according to Section G.1
F = the percent by which the owner of the Assessor's Parcel(s) is partially
prepaying the Maximum Special Tax for Facilities obligation
A = the Administrative Fees and Expenses determined pursuant to Section GA
The owner of any Assessor's Parcel who desires such prepayment shall notify the CFD
Administrator of such owner's intent to partially prepay the Special Tax for Facilities and the
percentage by which the Special Tax for Facilities shall be prepaid. The CFD Administrator shall
provide the owner with a statement of the amount required for the partial prepayment of the
Special Tax for Facilities for an Assessor's Parcel within 30 days of the request and may charge
a reasonable fee for providing this service. With respect to any Assessor's Parcel that is partially
prepaid, the City Council shall (i) distribute the funds remitted to it according to Section G.1, and
(ii) indicate in the records of CFD No. 2006-1 IA JJ that there has been a partial prepayment of
the Special Tax for Facilities and that a portion of the Special Tax for Facilities with respect to
such Assessor's Parcel, equal to the outstanding percentage (1.00 - F) of the remaining Maximum
Special Tax.for Facilities, shall continue to be levied on such Assessor's Parcel.pumuant to
Section D above.
H. TERM OF SPECIAL TAX FOR FACILITIES
The Special Tax for Facilities shall be levied until Fiscal Year 2058-2059, provided however that
the Special Tax for Facilities will cease to be levied in an earlier Fiscal Year if the CFD
Administrator has determined (i) that all required interest and principal payments on the CFD No.
2006-1 IA JJ Bonds have been paid; (ii) all Authorized Facilities have been acquired and all
reimbursements required by the Funding Agreement have been paid; and (iii) all other obligations
of CFD No, 2006-1 IA JJ have been satisfied. Bonds shall not be issued after eighteen (18)
months have elapsed following the final inspection of the last Residential Property within CFD No.
2006-1 IA JJ, except as otherwise provided in the Funding Agreement.
SPECIAL TAX FOR SERVICES
The following additional definitions apply to this Section I:
"Developed Multifamily Unit" means a residential dwelling unit within a building in which
each of the individual dwelling units has or shall have at least one common wall with another
dwelling unit and a building permit has been issued by the City for such dwelling unit on or prior
to May 1 preceding the Fiscal Year in which the Special Tax for Services is being levied.
"Developed Single Family Unit" means a residential dwelling unit other than a
Developed Multifamily Unit on an Assessor's Parcel for which a building permit has been issued
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CC Reso No. 2017
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by the City on or prior to May 1 preceding the Fiscal Year in which the Special Tax for Services
is being levied.
"Maximum Special Tax for Services" means the maximum Special Tax for Services
that can be levied by CFD No. 2006-1 IA JJ in any Fiscal Year on any Assessor's Parcel.
"Operating Fund" means a fund that shall be maintained for CFD No. 2006-1 IA JJ for
any Fiscal Year to pay for the actual costs of maintenance related to the Service Area, and the
applicable Administrative Expenses.
"Operating Fund Balance" means the amount of funds in the Operating Fund at the end
of the preceding Fiscal Year.
"Service Area" means parks, open space, and storm drains.
"Special Tax for Services" means any of the special taxes authorized to be levied within
CFD No. 2006-1 IA JJ pursuant to the Act to fund the Special Tax Requirement for Services.
"Special Tax Requirement for Services" means the amount determined in any Fiscal
Year for CFD No. 2006-1 IA JJ equal to (i) the budgeted costs directly related to the Service Area,
including maintenance, repair and replacement of certain components of the Service Area which
have been accepted and maintained or are reasonably expected to be accepted and maintained
during the current Fiscal Year, (ii) Administrative Expenses, and (iii) anticipated delinquent
Special Taxes for Services based on the delinquency rate in CFD No. 2006-1 IA JJ for the
previous Fiscal Year, less (iv) the Operating Ful,tJ Balance; as determined by the CFD
Administrator.
1. Rate and Method of Apportionment of the Special Tax for Services
Commencing Fiscal Year 2017-2018 and for each subsequent Fiscal Year, the City Council
shall levy Special Taxes for Services on (i) all Assessor's Parcels containing a Developed
Single Family Unit or Developed Multifamily Unit and (ii) all Assessor's Parcels of Non -
Residential Property, up to the applicable Maximum Special Tax for Services to fund the
Special Tax Requirement for Services.
The Maximum Special Tax for Services for Fiscal Year 2017-2018 shall be $306.91 per
Developed Single Family Unit, $153.47 per Developed Multifamily Unit, and $691 per Acre for
each Assessor's Parcel of Non -Residential Property.
On each July 1, commencing July 1, 2018, the Maximum Special Tax for Services shall be
increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year.
J. DURATION OF SPECIAL TAX FOR SERVICES
The Special Tax for Services shall be levied in perpetuity to fund the Special Tax for Services
Requirement, unless no longer required as determined at the sole discretion of the City Council.
K. APPEALS AND INTERPRETATIONS
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Any landowner or resident who feels that the amount of the Special Tax levied on their Assessor's
Parcel is in error may submit a written appeal to CFD No. 2006-1 IA JJ. The CFD Administrator
shall review the appeal and if the CFD Administrator concurs, the amount of the Special Tax
levied shall be appropriately modified.
The City Council may interpret this Rate and Method of Apportionment for purposes of
clarifying any ambiguity and make determinations relative to the annual administration of the
Special Tax and any landowner or resident appeals. Any decision of the City Council shall be final
and binding as to all persons.
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ATTACHMENT"C"
PROPOSED RATE AND METHOD OF APPORTIONMENT
CITY OF LAKE ELSINORE
COMMUNITY FACILITIES DISTRICT NO. 2006-1 (SUMMERLY)
(PROPOSED IMPROVEMENT AREA KK)
A Special Tax shall be levied on all Assessor's Parcels in City of Lake Elsinore Community
Facilities District No. 2006-1 (Summerly) Improvement Area KK ("CFD No. 2006-1 IA KK") and
collected each Fiscal Year commencing in Fiscal Year 2017-2018, in an amount determined
through the application of this Rate and Method of Apportionment as described below. All of the
real property in CFD No. 2006-1 IA KK, unless exempted by law or by the provisions hereof, shall
be taxed for the purposes, to the extent and in the manner herein provided.
B. DEFINITIONS
The terms hereinafter set forth have the following meanings
"Acre or Acreage" means the land area of an Assessor's Parcel as shown on an Assessor's
Parcel Map, or if the land area is not shown on an Assessor's Parcel Map, the land area shown
on the applicable final map, parcel map, condominium plan, or other recorded County parcel map.
"Act" means the Mello -Roos Community Facilities Act of 1982, as amended, being Chapter 2.5
(commencing with Section 53311) of Part 1 of Division 2 of Title 5 of the Government Code of the
State of California.
"Administrative Expenses" means the following actual or reasonably estimated costs directly
related to the adMinistraticr, of CFD No. 2006-1 IA KK: the costs of computing the Special Taves.
and preparing the annual Special Tax collection schedules (whether by the City or designee
thereof or both); the costs of collecting the Special Taxes (whether by the City or otherwise); the
costs of remitting the Special Taxes to the Trustee; the costs of the Trustee (including its legal
counsel) in the discharge of the duties required of it under the Indenture; the costs to the City,
CFD No. 2006-1 IA KK or any designee thereof of complying with arbitrage rebate requirements;
the costs to the City, CFD No. 2006-1 IA KK or any designee thereof of complying with disclosure
requirements of the City, CFD No. 2006-1 IA KK or obligated persons associated with applicable
federal and state securities laws and the Act; the costs associated with preparing Special Tax
disclosure statements and responding to public inquiries regarding the Special Taxes; the costs
of the City, CFD No. 2006-1 IA KK or any designee thereof related to an appeal of the Special
Tax; the costs associated with the release of funds from an escrow account; and the City's annual
administration fees and third party expenses. Administrative Expenses shall also include amounts
estimated by the CFD Administrator or advanced by the City or CFD No. 2006-1 IA KK for any
other administrative purposes of CFD No. 2006-1 IA KK, including attorney's fees and other costs,
and attorney's fees and other costs related to commencing and pursuing to completion any
foreclosure of delinquent Special Taxes.
"Approved Property" means all Assessor's Parcels of Taxable Property: (i) that are included in
a Final Map that was recorded prior to the January 1st preceding the Fiscal Year in which the
Special Tax is being levied, and (ii) that have not been issued a building permit on or before May
1st preceding the Fiscal Year in which the Special Tax is being levied.
"Assessor's Parcel" means a lot or parcel of land designated on an Assessor's Parcel Map with
an assigned Assessor's Parcel Number.
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"Assessor's Parcel Map" means an official map of the Assessor of the County designating
parcels by Assessor's Parcel Number.
"Assessor's Parcel Number" means that number assigned to an Assessor's Parcel by the
County for purposes of identification.
"Assigned Special Tax for Facilities" means the Special Tax for Facilities for each Land Use
Class of Developed Property, as determined in accordance with Section C.1.(b) below.
"Authorized Facilities" means those authorize improvements, as listed in an exhibit to the
Resolution of Formation.
"Backup Special Tax for Facilities" means the Special Tax for Facilities applicable to each
Assessor's Parcel of Developed Property, as determined in accordance with Section C.1.(c)
below.
"CFD Administrator" means an official of the City, or designee thereof, responsible for
determining the Special Tax Requirement for Facilities, the Special Tax Requirement for Services
as determined in accordance with Section I below, and providing for the levy and collection of the
Special Taxes.
"CFD" or "CFD No. 2006-1 IA KK" means Improvement Area KK of CFD No. 2006-1 as identified
on the boundary map for CFD No. 2006-1.
"CFD No. 2006-1" means City of Lake Elsinore Community Facilities District No. 2006-1
(Summerly) established by the City under the Act.
"CFD No. 2006-1 IA KK Bonds" means any obligation to repay a sum of money, including
obligationsinthe form of bonds, notes, certificates of participation, long-term leases. Igans from -
government agencies, or loans from banks, other financial institutions, private businesses, or
individuals, or long-term contracts, or any refunding thereof, to which Special Tax for Facilities
within CFD No. 2006-1 IA KK have been pledged.
"City" means the City of Lake Elsinore.
"City Council" means the City Council of the City of Lake Elsinore, acting as the Legislative Body
of CFD No. 2006-1 IA KK, or its designee.
"County" means the County of Riverside.
"Developed Property" means, with respect to the Special Tax for Facilities, for each Fiscal Year,
all Taxable Property, 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 and 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 for Facilities is being levied. Once
an Assessor's Parcel has been designated Developed Property, the Maximum Special Tax for
Facilities cannot be reduced for any reason unless a prepayment in full or partial prepayment is
made pursuant to Section G.
"Final Subdivision" means (i) a final map, or portion thereof, approved by the City pursuant to
the Subdivision Map Act (California Government Code Section 66410 et seq.) that creates
individual lots for which building permits may be issued, or (ii) for condominiums, a final map, or
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portion thereof, approved by the City and a condominium plan recorded pursuant to California
Civil Code Section 1352 that creates individual lots for which building permits may be issued.
"Fiscal Year" means the period commencing on July 15' of any year and ending the following
June 30"
"Funding Agreement" means the Funding, Construction and Acquisition Agreement entered into
by the City, on behalf of CFD No. 2006-1, as it may be amended.
"Indenture" means the indenture, fiscal agent agreement, resolution or other instrument
pursuant to which CFD No. 2006-1 IA KK Bonds are issued, as modified, amended and/or
supplemented from time to time, and any instrument replacing or supplementing the same.
"Land Use Class" means any of the classes listed in Table 1 below.
"Maximum Special Tax for Facilities" means the maximum Special Tax for Facilities,
determined in accordance with Section C below, that can be levied in any Fiscal Year on any
Assessor's Parcel.
"Non -Residential Property" means all Assessor's Parcels of Developed Property for which a
building permit permitting the construction of one or more non-residential units or facilities has
been issued by the City.
"Outstanding Bonds" means all CFD No. 2006-1 IA KK Bonds which are deemed to be
outstanding under the Indenture.
"Property Owner's Association Property" means, for each ,`iscal Yea any property within the
boundaries of CFD No. 2006-1 IA KK that was owned by a property owner association, including
any master or sub -association, as of January 1 of the prior Fiscal Year.
"Proportionately" means for Developed Property that the ratio of the actual Special Tax for
Facilities levy to the Assigned Special Tax for Facilities is equal for all Assessor's Parcels of
Developed Property. For Undeveloped Property, "Proportionately" means that the ratio of the
actual Special Tax for Facilities levy per Acre to the Maximum Special Tax for Facilities per Acre
is equal for all Assessor's Parcels of Undeveloped Property. The term "Proportionately" may
similarly be applied to other categories of Taxable Property as listed in Section D below.
"Public Property" means , for each Fiscal Year, (i) any property within the boundaries of CFD
No. 2006-1 IA KK owned by, irrevocably offered or dedicated to, or over, through or under which
an easement for purposes of public use has been granted, to the federal government, the State,
the County, the City, the Lake Elsinore Unified School District, or any local government or other
public agency as of January I of the previous Fiscal Year, provided that any property leased by a
public agency to a private entity and subject to taxation under Section 53340.1 of the Act shall be
taxed and classified according to its use; or (ii) any property within the boundaries of CFD No.
2006-1 IA KK that was encumbered, as of January I of the previous Fiscal Year, by an unmanned
utility easement making impractical its utilization for other than the purpose set forth in the
easement.
"Residential Floor Area" means all of the square footage of living area within the perimeter of a
residential structure, not including any carport, walkway, garage, overhang, patio, enclosed patio,
or similar area. The determination of Residential Floor Area for an Assessor's Parcel shall be
made by reference to the building permit(s) issued for such Assessor's Parcel.
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"Residential Property" means all Assessor's Parcels of Developed Property for which a building
permit permitting the construction thereon of one or more residential dwelling units has been
issued by the City.
"Resolution of Formation" means the resolution of formation for CFD No. 2006-1 IA KK.
"Special Tax(es)" means any of the special taxes authorized to be levied within CFD No. 2006-
1 IA KK pursuant to the Act.
"Special Tax for Facilities" means the special tax to be levied in each Fiscal Year on each
Assessor's Parcel of Developed Property, Taxable Property Owner Association Property, Taxable
Public Property, and Undeveloped Property to fund the Special Tax Requirement for Facilities.
"Special Tax for Facilities Requirement " means that amount required in any Fiscal Year for
CFD No. 2006-1 IA KK to: (i) pay debt service on all Outstanding Bonds due in the calendar year
commencing in such Fiscal Year; (ii) pay periodic costs on the CFD No. 2006- 1 IA KK Bonds,
including but not limited to, credit enhancement and rebate payments on the CFD No. 2006-1 IA
KK Bonds due in the calendar year commencing in such Fiscal Year; (iii) pay Administrative
Expenses; (iv) pay any amounts required to establish or replenish any reserve funds for all
Outstanding Bonds; (v) pay for reasonably anticipated Special Tax for Facilities delinquencies;
(vi) pay directly for acquisition or construction of Authorized Facilities to the extent that the
inclusion of such amount does not increase the Special Tax for Facilities levy on Approved
Property and Undeveloped Property; less (vii) a credit for funds available to reduce the annual
Special Tax for Facilities levy, as determined by the CFD Administrator pursuant to the Indenture.
"State" means the State of California.
"Taxable Property" means all of the Assessor's Parcels within the boundaries of CFD No. 2006-
1 IA KK which are not exempt from the Special Tax for Facilities pursuant to law or Section E
below.
"Trustee" means the trustee, fiscal agent, or paying agent under the Indenture
"Undeveloped Property" means, for each Fiscal Year, all Taxable Property not classified as
Developed Property, Approved Property, Taxable Property Owner Association Property, or
Taxable Public Property.
B. ASSIGNMENT TO LAND USE CATEGORIES
Each Fiscal Year, all Taxable Property within CFD No. 2006-1 IA KK shall be classified as
Developed Property, Approved Property, Taxable Public Property, Taxable Property Owner
Association Property, or Undeveloped Property, and shall be subject to Special Taxes in
accordance with this Rate and Method of Apportionment determined pursuant to Sections C and
D below. Residential Property shall be assigned to Land Use Classes 1 through 4 as listed in
Table 1 below based on the Residential Floor Area for each unit. Non -Residential Property shall
be assigned to Land Use Class 5. With respect to Residential Property, the Residential Floor Area
shall be determined from the most recent building permit issued for such Assessor's Parcel.
C. MAXIMUM SPECIAL TAX FOR FACILITIES
1. Developed Property
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(a) Maximum Special Tax for Facilities
The Maximum Special Tax for Facilities for each Assessor's Parcel classified as Developed
Property shall be the greater of (i) the amount derived by application of the Assigned Special
Tax for Facilities or (ii) the amount derived by application of the Backup Special Tax for
Facilities.
(b) Assigned Special Tax for Facilities
The Fiscal Year 2017-2018 Assigned Special Tax for Facilities for each Land Use Class is
shown below in Table 1.
TABLE 1
ASSIGNED SPECIAL TAX FOR FACILITIES FOR DEVELOPED PROPERTY
COMMUNITY FACILITIES DISTRICT NO. 2006-1 IMPROVEMENT AREA KK
FISCAL YEAR 2017-2018
Land
Use
Class
Description
Residential Floor Area
Assigned Special
Tax for Facilities
1
Residential Property
Less than 1,600 sq. ft
$1,740 per unit
2
Residential Property
1,600 — 1,799 sq. ft
$1,850 per unit
3
Residential Property
1,800 — 1,999 sq. ft
$1,916 per unit
4
Residential Property
Greater than 1,999 sq. ft.
$1,990 per unit
5
Non -Residential Property
N/A
$15,099 per Acre
(c) Backup Special Tax for Facilities
The Fiscal Year 2017-2018 Backup Special Tax for Facilities attributable to a Final Subdivision
will equal $15,099, multiplied by the Acreage of all Taxable Property, exclusive of any Taxable
Property Owner Association Property and Taxable Public Property, therein. The Backup
Special Tax for Facilities for each Assessor's Parcel of Residential Property shall be computed
by dividing the Backup Special Tax for Facilities attributable to the applicable Final Subdivision
by the number of Assessor's Parcels for which building permits for residential construction
have or may be issued (i.e., the number or residential lots). The Backup Special Tax for
Facilities for each Assessor's Parcel of Non -Residential Property therein shall equal $15,099
multiplied by the Acreage of such Assessor's Parcel.
If a Final Subdivision includes Assessor's Parcels of Taxable Property for which building
permits for both residential and non-residential construction may be issued, exclusive of
Taxable Property Owner Association Property and Taxable Public Property, then the Backup
Special Tax for Facilities for each Assessor's Parcel of Residential Property shall be computed
exclusive of the Acreage and Assessor's Parcels of property for which building permits for
non-residential construction may be issued.
Notwithstanding the foregoing, if all or any portion of the Final Subdivision(s) described in the
preceding paragraphs is subsequently changed or modified by recordation of a lot line
adjustment or similar instrument, and only if the CFD Administrator determines that such
change or modification results in a decrease in the number of Assessor's Parcels of Taxable
Property for which building permits for residential construction have or may be issued within
such Final Subdivision, then the Backup Special Tax for Facilities for each Assessor's Parcel
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of Developed Property that is part of the lot line adjustment or similar instrument for such Final
Subdivision shall be a rate per Acre as calculated below. The Backup Special Tax for Facilities
previously determined for an Assessor's Parcel of Developed Property that is not a part of the
lot line adjustment or similar instrument for such Final Subdivision shall not be recalculated.
Determine the total Backup Special Tax for Facilities anticipated to apply to the
changed or modified portion of the Final Subdivision area prior to the change or
modification.
2. The result of paragraph I above shall be divided by the Acreage of Taxable Property
which is ultimately expected to exist in such changed or modified portion of the Final
Subdivision area, as reasonably determined by the CFD Administrator.
3. The result of paragraph 2 above shall be the Backup Special Tax for Facilities per
Acre which shall be applicable to Assessor's Parcels of Developed Property in such
changed or modified portion of the Final Subdivision area for all remaining Fiscal
Years in which the Special Tax for Facilities may be levied.
(d) Release of Obligation to Pay and Disclose Backup Special Tax
All Assessor's Parcels within CFD No. 2006-1 IA KK will be relieved simultaneously and
permanently from the obligation to pay and disclose the backup Special Tax if the CFD
Administrator determines that the annual debt service required for the Outstanding Bonds,
when compared to the Assigned Special Taxes for Facilities that may be levied against all
Assessor's Parcels of Developed Property results in 110% debt service coverage (i.e., the
aggregate Assigned Special Taxes for Facilities that may be levied against all Developed
Property in each remaining Fiscal Year based on then existing development in CFD No. 2006-
1 IA KK is at least equal to the sum of (i) the Administrative Expenses and (ii) 1.10 times -
maximum annual debt service, in each remaining Fiscal Year on the Outstanding Bonds).
(e) Increase in the Assiqned Special Tax for Facilities and Backup Special Tax for Facilities
The Fiscal Year 2017-2018 Assigned Special Tax for Facilities, identified in Table 1 above,
and Backup Special Tax for Facilities shall increase thereafter, commencing on July 1, 2018
and on July 1 of each Fiscal Year thereafter, by an amount equal to two percent (2%) of the
amount in effect for the previous Fiscal Year.
(f) Multiple Land Use Classes
In some instances, an Assessor's Parcel of Developed Property may contain more than one
Land Use Class. The Maximum Special Tax for Facilities levied on an Assessor's Parcel shall
be the sum of the Maximum Special Tax for Facilities for all Land Use Classes located on that
Assessor's Parcel. The CFD Administrator's allocation to each type of property shall be final.
2.
The Fiscal Year 2017-2018 Maximum Special Tax for Facilities for Approved Property, Taxable
Property Owner Association Property, Taxable Public Property, and Undeveloped Property shall
be $15,099 per Acre and shall increase thereafter, commencing on July 1, 2018 and on July 1 of
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each Fiscal Year thereafter, by an amount equal to two percent (2%) of the Maximum Special Tax
for Facilities in effect for the previous Fiscal Year.
D. METHOD OF APPORTIONMENT OF THE SPECIAL TAX FOR FACILITIES
Commencing with Fiscal Year 2017-2018 and for each following Fiscal Year, the City
Council shall determine the Special Tax Requirement for Facilities and levy the Special Tax for
Facilities until the amount of Special Tax for Facilities levy equals the Special Tax Requirement
for Facilities. The Special Tax for Facilities shall be levied each Fiscal Year as follows:
Step One: The Special Tax for Facilities shall be levied on each Assessor's
Parcel of Developed Property in an amount equal to 100% of the applicable
Assigned Special Tax for Facilities;
Step Two: If additional monies are needed to satisfy the Special Tax Requirement for
Facilities after the first step has been completed, the Special Tax for Facilities shall
be levied Proportionately on each Assessor's Parcel of Approved Property at up to
100% of the Maximum Special Tax for Facilities for Approved Property;
Step Three: If additional monies are needed to satisfy the Special Tax Requirement for
Facilities after the first two steps has been completed, the Special Tax for Facilities
shall be levied Proportionately on each Assessor's Parcel of Undeveloped
Property at up to 100% of the Maximum Special Tax for Facilities for Undeveloped
Property;
Step Four: If additional monies are needed to satisfy the Special Tax Requirement for
Facilities after the first three steps have been completed, then the levy of the
Special Tax for Facilities on each Assessor's Parcel of Developed Property whose
Maximum Special Tax for Facilities is determined through the application of the
Backup Special Tax for Facilities shall be increased in equal percentages from the
Assigned Special Tax for Facilities up to the Maximum Special Tax for Facilities
for each such Assessor's Parcel;
Step Five: If additional monies are needed to satisfy the Special Tax Requirement for
Facilities after the first four steps have been completed, then the Special Tax for
Facilities shall be levied Proportionately on each Assessor's Parcel of Taxable
Property Owner Association Property and Taxable Public Property at up to 100%
of the Maximum Special Tax for Facilities for Taxable Property Owner Association
Property or Taxable Public Property.
Notwithstanding the above, the City Council may, in any Fiscal Year, levy Proportionately less
than 100% of the Assigned Special Tax for Facilities in step one (above), when (i) the City Council
is no longer required to levy the Special Tax for Facilities pursuant to steps two through four above
in order to meet the Special Tax Requirement for Facilities; (ii) all authorized CFD No. 2006-1 IA
KK Bonds have already been issued or the City Council has covenanted that it will not issue any
additional CFD No, 2006-1 IA KK Bonds (except refunding bonds) to be supported by the Special
Tax for Facilities; and (iii) all Authorized Facilities have been constructed and/or acquired.
Further notwithstanding the above, under no circumstances will the Special Tax for Facilities
levied against any Assessor's Parcel of Residential Property be increased by more than ten
percent as a consequence of delinquency or default by the owner of any other Assessor's Parcel
within CFD No. 2006-1 IA KK.
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E. EXEMPTIONS
No Special Tax for Facilities shall be levied on up to 7.13 Acres of Property Owner Association
Property and/or Public Property in CFD No. 2006-1 IA KK. Tax-exempt status will be assigned by
the CFD Administrator in the chronological order in which property becomes Property Owner
Association Property or Public Property. However, should an Assessor's Parcel no longer be
classified as Property Owner Association Property or Public Property, its tax-exempt status will
be revoked.
Property Owner Association Property or Public Property that is not exempt from Special Tax for
Facilities under this section shall be subject to the levy of the Special Tax for Facilities and shall
be taxed Proportionately as part of the fourth step in Section D above, at up to 100% of the
Maximum Special Tax for Facilities for Taxable Property Owner Association Property or Taxable
Public Property.
F. MANNER OF COLLECTION
The Special Tax for Facilities shall be collected in the same manner and at the same time as
ordinary ad valorem property taxes, provided, however, that CFD No. 2006-1 IA KK may collect
Special Tax for Facilities at a different time or in a different manner if necessary to meet its
financial obligations, and may covenant to foreclose and may actually foreclose on delinquent
Assessor's Parcels as permitted by the Act.
G. PREPAYMENT OF SPECIAL TAX FOR FACILITIES
The following additional definitions apply to this Section G:
"Buildout" means, for CFD No. 2006-1 IA KK, that all expected building permits have been
issued.
"CFD Public Facilities Costs" means either $4,125,000 in 2017 dollars, which shall increase by
the Construction Inflation Index on July 1, 2018, and on each July I thereafter, or such lower
number as (i) shall be determined by the CFD Administrator as sufficient to fund the Authorized
Facilities to be provided by CFD No. 2006-1 IA KK under the authorized bonding program for CFD
No. 2006-1 IA KK, or (ii) shall be determined by the City Council concurrently with a covenant that
it will not issue any more CFD No. 2006-1 IA KK Bonds (except refunding bonds) to be supported
by the Special Tax for Facilities levy under this Rate and Method of Apportionment as described
in Section D above.
"Construction Inflation Index" means the annual percentage change in the Engineering News
Record Building Cost Index for the City of Los Angeles, measured as of the calendar year which
ends in the previous Fiscal Year. In the event this index ceases to be published, the Construction
Inflation Index shall be another index as determined by the CFD Administrator that is reasonably
comparable to the Engineering News Record Building Cost Index for the City of Los Angeles.
"Future Facilities Costs" means the CFD Public Facilities Costs minus (i) public facility costs
previously paid from the Improvement Fund, (ii) moneys currently on deposit in the Improvement
Fund, and (iii) moneys currently on deposit in an escrow fund established pursuant to the
Indenture that are expected to be available to finance the cost of Authorized Facilities.
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"Improvement Fund" means an account specifically identified in the Indenture to hold funds
which are currently available for expenditure to acquire or construct Authorized Facilities eligible
under the Act.
"Previously Issued Bonds" means, for any Fiscal Year, all Outstanding Bonds that are deemed
to be outstanding under the Indenture after the first interest and/or principal payment date
following the current Fiscal Year.
1. Prepayment in Full
Only an Assessor's Parcel of Developed Property, or Undeveloped Property for which a
building permit has been issued, may be prepaid. The obligation of the Assessor's Parcel to pay
the Special Tax for Facilities may be permanently satisfied as described herein, provided that a
prepayment may be made with respect to a particular Assessor's Parcel only if there are no
delinquent Special Taxes with respect to such Assessor's Parcel at the time of prepayment. An
owner of an Assessor's Parcel intending to prepay the Special Tax for Facilities obligation shall
provide the CFD Administrator with written notice of intent to prepay. Within 30 days of receipt of
such written notice, the CFD Administrator shall notify such owner of the prepayment amount for
such Assessor's Parcel. The CFD Administrator may charge a reasonable fee for providing this
service. Prepayment must be made not less than 45 days prior to the next occurring date that
notice of redemption of CFD No. 2006-1 IA KK Bonds from the proceeds of such prepayment may
be given by the Trustee pursuant to the Indenture.
The Special Tax for Facilities Prepayment Amount (defined below) shall be calculated
as summarized below (capitalized terms as defined below):
follows:
The Prepayment Amount shall be determined as of the proposed prepayment date as
1. Confirm that no Special Tax delinquencies apply to such Assessor's Parcel.
2. For Assessor's Parcels of Developed Property, compute the Assigned Special Tax
for Facilities and Backup Special Tax for Facilities. For Assessor's Parcels of Undeveloped
Property for which a building permit has been issued, compute the Assigned Special Tax for
Facilities and Backup Special Tax for Facilities for that Assessor's Parcel as though it was
already designated as Developed Property, based upon the building permit which has already
been issued for that Assessor's Parcel.
C-9
Bond Redemption Amount
plus
Redemption Premium
plus
Future Facilities Amount
plus
Defeasance Amount
plus
Administrative Fees and Expenses
less
Reserve Fund Credit
less
Capitalized Interest Credit
Equals:
Prepayment Amount
The Prepayment Amount shall be determined as of the proposed prepayment date as
1. Confirm that no Special Tax delinquencies apply to such Assessor's Parcel.
2. For Assessor's Parcels of Developed Property, compute the Assigned Special Tax
for Facilities and Backup Special Tax for Facilities. For Assessor's Parcels of Undeveloped
Property for which a building permit has been issued, compute the Assigned Special Tax for
Facilities and Backup Special Tax for Facilities for that Assessor's Parcel as though it was
already designated as Developed Property, based upon the building permit which has already
been issued for that Assessor's Parcel.
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3. (a) Divide the Assigned Special Tax for Facilities computed pursuant to paragraph
2 by the total estimated Assigned Special Tax for Facilities for the entire CFD No. 2006-1 IA
KK based on the Developed Property Special Tax for Facilities which could be levied in the
current Fiscal Year on all expected development through Buildout of CFD No. 2006-1 IA KK,
excluding any Assessor's Parcels which have been prepaid, and
(b) Divide the Backup Special Tax for Facilities computed pursuant to paragraph 2 by
the total estimated Backup Special Tax for Facilities at Buildout for the entire CFD No. 2006-
1 IA KK, excluding any Assessor's Parcels which have been prepaid.
4. Multiply the larger quotient computed pursuant to paragraph 3(a) or 3(b) by the
Previously Issued Bonds to compute the amount of Previously Issued Bonds to be retired and
prepaid (the "Bond Redemption Amount")
5. Multiply the Bond Redemption Amount computed pursuant to paragraph 4 by the
applicable redemption premium (e.g., the redemption price -100%), if any, on the Previously
Issued Bonds to be redeemed (the "Redemption Premium").
6. Compute the current Future Facilities Costs.
7. Multiply the larger quotient computed pursuant to paragraph 3(a) or 3(b) by the
amount determined pursuant to paragraph 6 to compute the amount of Future Facilities Costs
to be prepaid (the "Future Facilities Amount").
8. Compute the amount needed to pay interest on the Bond Redemption Amount
from the first bond interest and/or principal payment date following the current Fiscal Year
until the earliest redemption date for the Previously Issued Bonds.
9. Determine the Special Tax for Facilities levied on the Assessor's Parcel in the
current Fiscal Year which has not yet been paid.
10. Compute the minimum amount the CFD Administrator reasonably expects to
derive from the reinvestment of the Special Tax for Facilities Prepayment Amount less the
Future Facilities Amount and the Administrative Fees and Expenses (defined below) from the
date of prepayment until the redemption date for the Previously Issued Bonds to be redeemed
with the prepayment.
11. Add the amounts computed pursuant to paragraphs 8 and 9 and subtract the
amount computed pursuant to paragraph 10 (the "Defeasance Amount").
12. The administrative fees and expenses of CFD No. 2006-1 IA KK are as calculated
by the CFD Administrator and include the costs of computation of the prepayment, the costs
to invest the prepayment proceeds, the costs of redeeming CFD No. 2006-1 IA KK Bonds,
and the costs of recording any notices to evidence the prepayment and the redemption (the
"Administrative Fees and Expenses"),
13. The reserve fund credit (the "Reserve Fund Credit") shall equal the lesser of: (a)
the expected reduction in the reserve requirement (as defined in the Indenture), if any,
associated with the redemption of Previously Issued Bonds as a result of the prepayment, or
(b) the amount derived by subtracting the new reserve requirement (as defined in the
Indenture) in effect after the redemption of Previously Issued Bonds as a result of the
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prepayment from the balance in the reserve fund on the prepayment date, but in no event
shall such amount be less than zero. No Reserve Fund Credit shall be granted if the amount
then on deposit in the reserve fund for the Previously Issued Bonds is below 100% of the
reserve requirement (as defined in the Indenture).
14. If any capitalized interest for the Previously Issued Bonds will not have been
expended as of the date immediately following the first interest and/or principal payment
following the current Fiscal Year, a capitalized interest credit shall be calculated by multiplying
the larger quotient computed pursuant to paragraph 3(a) or 3(b) by the expected balance in
the capitalized interest fund or account under the Indenture after such first interest and/or
principal payment (the "Capitalized Interest Credit").
15. The Special Tax for Facilities prepayment is equal to the sum of the amounts
computed pursuant to paragraphs 4, 5, 7, 11 and 12, less the amounts computed pursuant to
paragraphs 13 and 14 (the "Special Tax for Facilities Prepayment Amount").
From the Special Tax for Facilities Prepayment Amount, the amounts computed
pursuant to paragraphs 4, 5, 11, 13 and 14 shall be deposited into the appropriate fund as
established under the Indenture and be used to retire CFD No. 2006-1 IA KK Bonds or make
debt service payments. The amount computed pursuant to paragraph 7 shall be deposited
into the Improvement Fund. The amount computed pursuant to paragraph 12 shall be retained
by CFD No. 2006-1 IA KK.
The Special Tax for Facilities Prepayment Amount may be insufficient to redeem a full
$5,000 increment of CFD No. 2006-1 IA KK Bonds. In such cases, the increment above
$5,000 or integral multiple thereof will be retained in the appropriate fund established under
tke lridenture to be used with the next prepayment of CFD No. 2006-1 IA KKZ30ds-or co'
make debt service payments.
As a result of the payment of the current Fiscal Year's Special Tax for Facilities levy
as determined under paragraph 9 (above), the CFD Administrator shall remove the current
Fiscal Year's Special Tax for Facilities levy for such Assessor's Parcel from the County tax
rolls. With respect to any Assessor's Parcel that is prepaid, the City Council shall cause a
suitable notice to be recorded in compliance with the Act, to indicate the prepayment of the
Special Tax for Facilities and the release of the Special Tax for Facilities lien on such
Assessor's Parcel, and the obligation of such Assessor's Parcel to pay the Special Tax for
Facilities shall cease.
Notwithstanding the foregoing, no Special Tax for Facilities prepayment shall be
allowed unless, at the time of such proposed prepayment, the amount of Maximum Special
Tax for Facilities that may be levied on Taxable Property within CFD No. 2006-1 IA KK (after
excluding 12.85 Acres of Property Owner Association Property and/or Public Property in CFD
No. 2006-1 IA KK as set forth in Section E) both prior to and after the proposed prepayment
is at least equal to the sum of (i) the Administrative Expenses, as defined in Section A above,
and (ii) 1.10 times maximum annual debt service, in each remaining Fiscal Year on the
Outstanding Bonds.
2. Prepayment in Part
The Special Tax for Facilities on an Assessor's Parcel of Developed Property or an
Assessor's Parcel of Undeveloped Property for which a building permit has been issued may be
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partially prepaid. The amount of the prepayment shall be calculated as in Section GA.; except
that a partial prepayment shall be calculated according to the following formula:
PP = ((PE —A) x F) +A
These terms have the following meaning:
PP = Partial Prepayment Amount
PE = the Prepayment Amount calculated according to Section G.1
F = the percent by which the owner of the Assessor's Parcel(s) is partially
prepaying the Maximum Special Tax for Facilities obligation
A = the Administrative Fees and Expenses determined pursuant to Section G.1
The owner of any Assessor's Parcel who desires such prepayment shall notify the CFD
Administrator of such owner's intent to partially prepay the Special Tax for Facilities and the
percentage by which the Special Tax for Facilities shall be prepaid. The CFD Administrator shall
provide the owner with a statement of the amount required for the partial prepayment of the
Special Tax for Facilities for an Assessor's Parcel within 30 days of the request and may charge
a reasonable fee for providing this service. With respect to any Assessor's Parcel that is partially
prepaid, the City Council shall (i) distribute the funds remitted to it according to Section G.1, and
(ii) indicate in the records of CFD No. 2006-1 IA KK that there has been a partial prepayment of
the Special Tax for Facilities and that a portion of the Special Tax for Facilities with respect to
such Assessor's Parcel, equal to the outstanding percentage (1.00 - F) of the remaining Maximum
Special Tax for Facilities, shall continue to be levied on such Assessor's Parcel pursuant to
Section D above.
H. TERM OF SPECIAL TAX FOR FACILITIES
The Special Tax for Facilities shall be levied until Fiscal Year 2058-2059, provided however
that the Special Tax for Facilities will cease to be levied in an earlier Fiscal Year if the CFD
Administrator has determined (i) that all required interest and principal payments on the CFD
No. 2006-1 IA KK Bonds have been paid; (ii) all Authorized Facilities have been acquired and
all reimbursements required by the Funding Agreement have been paid; and (iii) all other
obligations of CFD No. 2006-1 IA KK have been satisfied. Bonds shall not be issued after
eighteen (18) months have elapsed following the final inspection of the last Residential
Property within CFD No. 2006-1 IA KK, except as otherwise provided in the Funding
Agreement.
C-12
CC Reso No. 2017
Page 13 of 40
I. SPECIAL TAX FOR SERVICES
The following additional definitions apply to this Section I:
"Developed Multifamily Unit" means a residential dwelling unit within a building in which
each of the individual dwelling units has or shall have at least one common wall with another
dwelling unit and a building permit has been issued by the City for such dwelling unit on or prior
to May 1 preceding the Fiscal Year in which the Special Tax for Services is being levied.
"Developed Single Family Unit" means a residential dwelling unit other than a
Developed Multifamily Unit on an Assessor's Parcel for which a building permit has been issued
by the City on or prior to May 1 preceding the Fiscal Year in which the Special Tax for Services
is being levied.
"Maximum Special Tax for Services" means the maximum Special Tax for Services
that can be levied by CFD No. 2006-1 IA KK in any Fiscal Year on any Assessor's Parcel.
"Operating Fund" means a fund that shall be maintained for CFD No. 2006-1 IA KK for
any Fiscal Year to pay for the actual costs of maintenance related to the Service Area, and the
applicable Administrative Expenses.
"Operating Fund Balance" means the amount of funds in the Operating Fund at the end
of the preceding Fiscal Year.
"Service Area" means parks, open space, and storm drains.
"Special Tax for Services" means ,Aly of the special taxes authorized to be levied within
CFD No. 2006-1 IA KK pursuant to the Act to fund the Special Tax Requirement for Services.
"Special Tax Requirement for Services" means the amount determined in any Fiscal
Year for CFD No. 2006-1 IA KK equal to (i) the budgeted costs directly related to the Service
Area, including maintenance, repair and replacement of certain components of the Service Area
which have been accepted and maintained or are reasonably expected to be accepted and
maintained during the current Fiscal Year, (ii) Administrative Expenses, and (iii) anticipated
delinquent Special Taxes for Services based on the delinquency rate in CFD No. 2006-1 IA KK
for the previous Fiscal Year, less (iv) the Operating Fund Balance, as determined by the CFD
Administrator.
1. Rate and Method of Apportionment of the Special Tax for Services
Commencing Fiscal Year 2017-2018 and for each subsequent Fiscal Year, the City Council shall
levy Special Taxes for Services on (i) all Assessor's Parcels containing a Developed Single Family
Unit or Developed Multifamily Unit and (ii) all Assessor's Parcels of Non -Residential Property, up
to the applicable Maximum Special Tax for Services to fund the Special Tax Requirement for
Services.
The Maximum Special Tax for Services for Fiscal
Developed Single Family Unit, $153.47 per Developed
each Assessor's Parcel of Non -Residential Property.
C-13
Year 2017-2018 shall be $306.91 per
Multifamily Unit, and $691 per Acre for
CC Reso No. 2017
Page 14 of 40
On each July 1, commencing July 1, 2018, the Maximum Special Tax for Services shall be
increased by two percent (2.00%) of the amount in effect in the prior Fiscal Year.
J. DURATION OF SPECIAL TAX FOR SERVICES
The Special Tax for Services shall be levied in perpetuity to fund the Special Tax for Services
Requirement, unless no longer required as determined at the sole discretion of the City Council.
K. APPEALS AND INTERPRETATIONS
Any landowner or resident who feels that the amount of the Special Tax levied on their Assessor's
Parcel is in error may submit a written appeal to CFD No. 2006-1 IA KK. The CFD Administrator
shall review the appeal and if the CFD Administrator concurs, the amount of the Special Tax
levied shall be appropriately modified.
The City Council may interpret this Rate and Method of Apportionment for purposes of
clarifying any ambiguity and make determinations relative to the annual administration of the
Special Tax and any landowner or resident appeals. Any decision of the City Council shall be final
and binding as to all persons.
C-14
CC Reso No. 2017
Page 1 of 40
ATTACHMENT"D"
AUTHORIZED IMPROVEMENTS AND INCIDENTAL EXPENSES
The facilities proposed to be financed for each of Improvement Area JJ and Improvement
Area KK are public infrastructure facilities and other governmental facilities with an estimated
useful life of five years or longer, which the District is authorized by law to construct, own or
operate and that are necessary to meet increased demands placed upon the City as a result of
development or rehabilitation occurring within the District, including but not limited to streets,
streetscape, park and recreation facilities, storm drain, other City facilities and fees, water and
sewerfacilities and fees of the Elsinore Valley Municipal Water District, and related costs including
designs, inspections, professional fees, annexation fees, connection fees and acquisition costs
(the "Facilities'), and all appurtenances and appurtenant work in connection with the foregoing
Facilities, including the cost of engineering, planning, designing, materials testing, coordination,
construction staking, construction management and supervision for such Facilities, and to finance
the incidental expenses to be incurred, including (together the "Facilities Incidental Expenses'):
a. The cost of engineering, planning and designing the Facilities;
b. All costs, including costs of the property owner petitioning to form the District,
associated with the creation of the District, the issuance of the bonds, the determination of the
amount of special taxes to be levied and costs otherwise incurred in order to carry out the
authorized purposes of the District; and
C. Any other expenses incidental to the construction, acquisition, modification, rehabilitation,
completion .rid inspection of the Facilities. -
Such Facilities need not be physically located within the District.
AUTHORIZED SERVICES AND INCIDENTAL EXPENSES
The services which may be funded with proceeds of the Services Special Tax, as provided
by Section 53313 of the Act, will include all costs attributable to maintaining, servicing, cleaning,
repairing and/or replacing parks, open space and storm drains (may include reserves for
replacement) (collectively, the "Services").
In addition to payment of the cost and expense of the forgoing services, proceeds of
Services Special Tax may be expended to pay "Administrative Expenses," as said term is defined
in the Rate and Method of Apportionment (together, the "Services Incidental Expenses').
D-1
RESOLUTION NO. 2017 -
RESOLUTION OF INTENTION OF THE CITY COUNCIL OF THE CITY OF LAKE
ELSINORE, CALIFORNIA, ACTING AS THE LEGISLATIVE BODY OF CITY OF
LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2006-1 (SUMMERLY),
TO INCUR BONDED INDEBTEDNESS WITHIN PROPOSED IMPROVEMENT
AREAS JJ AND KK OF CITY OF LAKE ELSINORE COMMUNITY FACILITIES
DISTRICT NO. 2006-1 (SUMMERLY)
Whereas, the City Council of the City of Lake Elsinore (the "City Council") upon receipt of a
petition as provided in Section 53318 of the Government Code of the State of California
established City of Lake Elsinore Community Facilities District No. 2006-1 (Summerly)
("Community Facilities District No. 2006-1" or the "District') and Improvement Area DD and
Improvement Area GG therein, pursuant to the Mello -Roos Community Facilities Act of 1982
(the "Act'), as amended; and,
Whereas, upon receipt of a petition as provided in Section 53318 of the Government Code of
the State of California, the City Council instituted proceedings to establish Improvement Area JJ
and Improvement Area KK from the areas within Improvement Area DD and Improvement Area
GG, respectively, of the District, pursuant to Resolution No. _ adopted by the City Council
on the date hereof to finance (1) the purchase, construction, modification, expansion,
improvement or rehabilitation of public facilities identified in Attachment "A" hereto and
incorporated herein by this reference, including all furnishings, equipment and supplies related
thereto (collectively, the "Facilities"); and (2) the incidental expenses to be incurred in financing
the Facilities and forming and administering the District (the "Incidental Expenses"); and,
Whereas, the City Council estimates that the maximum amount required to finarode the Facilities
and Incidental Expenses is approximately Seven Million Dollars ($7,000,000) for Improvement
Area JJ and Five Million Seven Hundred Thousand Dollars ($5,700,000) for Improvement Area
KK; and,
Whereas, in order to finance the Facilities and Incidental Expenses, the City Council intends to
authorize the issuance of bonds in the maximum aggregate principal amount for each of
Improvement Area JJ and Improvement Area KK that is set forth in the preceding recital, the
repayment of which is to be secured by special taxes levied in accordance with Section 53328
of the Act on all property in the respective proposed Improvement Area, other than those
properties exempted from taxation in the rate and method of apportionment set forth in
Attachment "B" and "C to Resolution No. ;
NOW, THEREFORE, THE CITY COUNCIL OF CITY OF LAKE ELSINORE, ACTING HAS THE
LEGISLATIVE BODY OF CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT
NO. 2006-1 (SUMMERLY) HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS:
Section 1. The above recitals are true and correct.
Section 2. It is necessary to incur bonded indebtedness of Community Facilities District
No. 2006-1 in a maximum aggregate principal amount not to exceed $7,000,000 for the benefit
of Improvement Area JJ and $5,700,000 for the benefit of Improvement Area KK to finance the
costs of the Facilities and Incidental Expenses, as permitted by the Act.
CC Reso No. 2017
Page 2 of 4
Section 3. The indebtedness will be incurred for the purpose of financing the costs of the
Facilities and the Incidental Expenses, including, but not limited to, the funding of reserve funds
for the bonds, the financing of costs associated with the issuance of the bonds and all other
costs and expenses necessary to finance the Facilities which are permitted to be financed
pursuant to the Act.
Section 4. It is the intent of the City Council to authorize the sale of bonds in one or more
series, in the maximum aggregate principal amount of $7,000,000 for Improvement Area JJ and
$5,700,000 for Improvement Area KK, and at a maximum interest rate not in excess of 12
percent per annum, or a higher rate not in excess of the maximum rate permitted by law at the
time that the bonds are issued. The term of the bonds of each series shall be determined
pursuant to a resolution of this City Council acting in its capacity as the legislative body of the
District authorizing the issuance of the bonds of such series, but such term shall in no event
exceed 40 years from the date of issuance of the bonds of such series, or such longer term as
is then permitted by law.
Section 5. A public hearing (the "Hearing") on the proposed issuance of bonded
indebtedness shall be held at 7:00 p.m. or as soon thereafter as practicable, on February 28,
2017, at the City Cultural Center, 183 North Main Street, Lake Elsinore, California.
Section 6. At the time and place set forth in this Resolution for the Hearing, any interested
persons, including all persons owning land or registered to vote within proposed Community
Facilities District No. 2006-1, may appear and be heard.
Section 7. The Clerk of the Board is hereby directed to publish a notice (the "Notice") of the
Hearing pursuant to Section 6061 of the Government Code in a newspaper of general
circulation published in the area of Community Facilities :istrict No. 2006-1. Such publication
shall be completed at least seven days prior to the date of the Hearing. The Clerk of the Board
is further directed to mail a copy of the Notice to each of the landowners within the boundaries
of proposed Improvement Area JJ and Improvement Area KK at least 15 days prior to the
Hearing.
CC Reso No. 2017
Page 3 of 4
Passed and Adopted this 241h day of January, 2017.
Robert M. Magee, Mayor
Attest:
Susan M. Domen, MMC
City Clerk
STATE OF CALIFORNIA)
COUNTY OF RIVERSIDE) ss
CITY OF LAKE ELSINORE)
I, Susan M. Domen, MMC, City Clerk of the City of Lake_ Elsinore, California, do hereby certify
that Resolution No, was adopted by t to City Council of the City of Lake Elsinore,
California, at the Regular meeting of January 24, 2017, and that the same was adopted by the
following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
Susan M. Domen, MMC
City Clerk
ATTACHMENT A
Types of Facilities To Be
Financed By Community
Facilities District No. 2006-1
The facilities proposed to be financed for each of Improvement Area JJ and
Improvement Area KK are public infrastructure facilities and other governmental facilities with an
estimated useful life of five years or longer, which the District is authorized by law to construct,
own or operate and that are necessary to meet increased demands placed upon the City as a
result of development or rehabilitation occurring within the District, including but not limited to
streets, streetscape, park and recreation facilities, storm drain, other City facilities and fees,
water and sewer facilities and fees of the Elsinore Valley Municipal Water District, and related
costs including designs, inspections, professional fees, annexation fees, connection fees and
acquisition costs (the "Facilities"), and all appurtenances and appurtenant work in connection
with the foregoing Facilities, including the cost of engineering, planning, designing, materials
testing, coordination, construction staking, construction management and supervision for such
Facilities, and to finance the incidental expenses to be incurred, including (together the
"Facilities Incidental Expenses"):
a. The cost of engineering, planning and designing the Facilities;
b. All costs, including costs of the property owner petitioning to form the District,
associated with the creation of the District, the issuance of the bonds, the determination of the
amount of special taxes to be levied and costs otherwise incurred in order to carry out the
authorized purposes afthc District; and
C. Any other expenses incidental to the construction, acquisition, modification,
rehabilitation, completion and inspection of the Facilities.
Such Facilities need not be physically located within the District.
REIMBURSEMENT AGREEMENT
CITY OF LAKE ELSINORE (SUMMERLY)
COMMUNITY FACILITIES DISTRICT NO. 2006-1
IMPROVEMENT AREA JJ AND IMPROVEMENT AREA KK
FORMATION PROCEEDINGS
THIS REIMBURSEMENT AGREEMENT (this "Agreement') dated as of January 1, 2017
is entered into by and between the City of Lake Elsinore, a general law city organized and existing
underthe laws and constitution of the State of California (the "City"), and McMillin Summerly, LLC,
a California limited liability company (the "Owner").
RECITALS:
A. The Owner owns approximately 24.66 acres of land described in Exhibit A
attached hereto, which land is consists of the land within Improvement Area DD of City of Lake
Elsinore Community Facilities District No. 2006-1 (the "District');
B. The Owner owns approximately 37.55 acres of land described in Exhibit B
attached hereto, which land is consists of the land within Improvement Area GG of the District;
B. The Owner desires to (i) form Improvement Areas JJ and KK of the District from
the property currently within the boundaries of Improvement Areas DD and GG, respectively; (ii)
authorize the District to incur bonded indebtedness for Improvement Areas JJ and KK and (iii)
upon the completion of the proceedings described in the forgoing subsections (i) and (ii), dissolve
Improvement Areas DD and GG, all pursuant to the Mello -Roos Community Facilities Act of 1982
(Government Code Section 53311 et seq.) (the "Act') (such proceedings referred to herein as the
"Formation Proceedings").
B. The City and the Owner are desirous of entering into this Agreement in order to
provide a mechanism by which the Owner may advance certain funds related to the cost of the
Formation Proceedings, such costs to be reimbursed to the Owner for the amounts advanced
hereunder, from proceeds of bonds issued by the District for Improvement Area JJ and
Improvement Area KK, if any.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises and covenants set forth
herein, the parties hereto agree as follows:
Recitals. Each of the above recitals is incorporated herein and is true and correct.
2. Formation Proceedings and Issuance of Bonds.
(a) At the request of the Owner, the City will undertake to complete the
Formation Proceedings. The City will retain, at the Owner's expense, the necessary consultants
to analyze the proposed Formation Proceedings and issuance of bonds, including an engineer,
special tax consultant, financial advisor, bond counsel, market absorption consultant, appraiser
and other consultants deemed necessary by the City. In addition, City staff time spent in
connection with the Formation Proceedings and the issuance of bonds shall be at Owner's
expense.
(b) In order to begin the process of analyzing the Formation Proceedings, the
Owner has advanced to the City a sum totaling $35,000. From time to time, the Owner shall make
additional advances to the City within 15 days following receipt from the City of a request for an
additional advance to cover the costs of the Formation Proceedings and/or issuing bonds. In the
event the Owner does not deliver the requested amount to the City within such 15 -day period, the
City will have no obligation to proceed with the analysis or bond issue unless and until such
additional advance is received. The Owner shall have the right to notify the City at any time, in
writing, of its intention to abandon the Formation Proceedings or the issuance of bonds. Upon
receipt of such notice, the City shall instruct its consultants to cease work as soon as practicable.
The Owner shall be responsible to pay all costs and expenses incurred by the City or any City
consultant or advisor prior to the date on which the City's consultants are notified of the Owner's
notice of abandonment. Notwithstanding a decision of the Owner to abandon the Formation
Proceedings or the issuance of bonds, the City may, in its sole discretion, elect to proceed with
the Formation Proceedings and/or the issuance of bonds with funds other than those of the
Owner; provided, however, that, in executing this Agreement, the Owner shall not be deemed to
have waived their right to object to the Formation Proceedings or the issuance of bonds.
(c) The City will provide to the Owner on request a summary of how the
advances have been spent and the unexpended balance remaining. The amounts advanced by
the Owner will be reimbursable to the Owner, without interest, from the proceeds of bonds issued
by the District for Improvement Area JJ and Improvement Area KK, if any. In the event that bonds
are not issued to provide a source of reimbursement to the Owner, the City shall have no liability
to the Owner to reimburse them for any of amounts previously advanced by the Owner and
expended by the City in accordance with this Agreement.
3. Reimbursement Procedure. The City shall return any funds which have been
- - "advanced by the Owner which are not expended on the purpm es -set forth in Section 2 above.
Such returned funds shall be without interest.
4. Abandonment of Formation Proceedings. The Owner understands that the
undertaking of the Formation Proceedings shall be in the sole discretion of the City. No provision
of this Agreement shall be construed as a promise, warranty or agreement by the City to
undertake the Formation Proceedings or to issue any bonds. The City shall have no liability to
Owner for its decision not to undertake the Formation Proceedings or issue bonds.
5. Indemnification and Hold Harmless. The Owner hereby assumes the defense of,
and indemnifies and saves harmless, jointly and severally, the City and each of its officers,
directors, employees and agents, from and against all actions, damages, claims, losses or
expenses of every type and description to which they may be subjected or put, by reason of, or
arising out of any acts or omissions taken by the Owner or any of the Owner's officers, employees,
contractors and agents with respect to the Formation Proceedings.
6, Notices. Any notice to be provided pursuant to this Agreement shall be delivered
to the following addresses:
Owner McMillin Summerly, LLC c/o Pacific Ventures Management
LLC, a Delaware limited liability company
4343 Von Karman Avenue, Suite 350
Attention: Jason Perrin, CFO/CIO
Telephone: 949-955-0984
Email: jperrin@pacv.com
City: City of Lake Elsinore
130 South Main Street
Lake Elsinore, CA 92530
Attn: Assistant City Manager
Telephone: (951) 674-3124
Email: jsimpson@lake-elsinore.org
With a copy to: Stradling Yocca Carlson & Rauth
660 Newport Center Drive, Suite 1600
Newport Beach, CA 92660
Attention: Brian Forbath, Esq.
Telephone: (949) 725-4193
Email: bforbath@sycr.com
Each party may change its address for delivery of notice by delivering written notice of
such change of address to the other party.
7. Assignment. The Owner may not assign its interest in this Agreement without the
prior written consent of the City.
8. Severability. If any part of this Agreement is held to be illegal or unenforceable by
a court of competent jurisdiction, the remainder of this Agreement shall be given effect to the
fullest extent permitted by law.
9. Entire Agreement. This Agreement contains the entire agreement between the
parties with respect to the matters provided for herein.
10. Amendments. This Agreement may be amended or modified only by written
instrument signed by all parties.
11. Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed an original.
12. Governing Law. This Agreement and any dispute arising hereunder shall be
governed by and interpreted in accordance with the laws of the State of California.
13. No Third Party Beneficiaries. No person or entity shall be deemed to be a third
party beneficiary hereof, and nothing in this Agreement (either express or implied) is intended to
confer upon any person or entity, other than the City and the Owner, any rights, remedies,
obligations or liabilities under or by reason of this Agreement.
14. Singular and Plural: Gender. As used herein, the singular of any word includes
the plural, and terms in the masculine gender shall include the feminine.
15. Termination. This Agreement shall terminate and be of no further force and effect
on January 1, 2021 unless expressly amended by the parties; provided, however, that the
Owner's obligations under Section 5 shall survive the termination and the City's obligation to
provide reimbursement in accordance with Section 3 for expenses incurred prior to the termination
date shall also survive termination.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year
first above written.
ATTEST:
M
usan M. Domen, City Clerk
APPROVED AS TO FORM:
CITY ATTORNEY
M
CITY OF LAKE ELSINORE, a political subdivision
of the State of California
0
Assistant City Manager
McMillin Summerly, LLC, a Delaware limited liability
company
By: PV Development Management LLC, a
Delaware limited liability company, as property
manager
By: Pacific Ventures Management LLC, a
Delaware limited liability company, its Manager
By:
Name:
Title:
S-1
EXHIBIT A
DESCRIPTION OF IMPROVEMENT AREA DD PROPERTY
Real property in the City of Lake Elsinore, County of Riverside, State of California, described as
follows:
Assessor's Parcel Nos:
371-270-049
371-270-020
[WAM11_lYiy
DESCRIPTION OF IMPROVEMENT AREA GG PROPERTY
Real property in the City of Lake Elsinore, County of Riverside, State of California, described as
follows:
Assessor's Parcel Nos:
371-040-015
371-040-016
371-270-022
371-270-004
371-270-054 (portion referenced as No. 5 in Parcel 1 below and as further described in Notice of
Lot Line Adjustment No. 16-416, recorded in the Official Records of the County of Riverside as
Document No. 2016-0281439 on July 7, 2016)
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SECOND AMENDED BOUNDARY MAP OF
COMMUNITY FACILITIES DISTRICT NO. 2006A (SUMMERLY)
OF THE CITY OF LAKE ELSINORE,
COUNTY OF RIVERSIDE, STATE OF CALIFORNIA
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B-1
X,le„fi11nNI'll
RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES FOR
CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2006-1
(SUMMERLY)
IMPROVEMENT AREA JJ
A Special Tax shall be levied on all Assessor's Parcels in City of Lake Elsinore Community Facilities District
No. 2006-1 (Summerly) Improvement Area JJ ("CFD No. 2006-1 IA JJ") and collected each Fiscal Year
commencing in Fiscal Year 2017-2018, in an amount determined through the application of this Rate and
Method of Apportionment as described below. All of the real property in CFD No. 2006-1 IA JJ, unless
exempted by law or by the provisions hereof, shall be taxed for the purposes, to the extent and in the
manner herein provided.
A. DEFINITIONS
The terms hereinafter set forth have the following meanings:
"Acre or Acreage" means the land area of an Assessor's Parcel as shown on an Assessor's Parcel Map, or
if the land area is not shown on an Assessor's Parcel Map, the land area shown on the applicable final
map, parcel map, condominium plan, or other recorded County parcel map.
"Act" means the Mello -Roos Community Facilities Act of 1982, as amended, being Chapter 2.5
(commencing with Section 53311) of Part 1 of Division 2 of Title 5 of the Government Code of the State of
California.
"Administrative Expenses" means the following actual or reasonably estimated costs directly related to
the administration of CFD No. 2006-1 IA JJ: the costs of computing the Special Taxes and preparing the
annual Special Tax collection schedules (whether by the City or designee thereof or both); the costs of
collecting the Special Taxes (whether by the City or otherwise); the co,;ts of remitting the Special Taxes to
the Trustee; the costs of the Trustee (including its legal counsel) in the discharge of the duties required of
it under the Indenture; the costs to the City, CFD No. 2006-1 IA JJ or any designee thereof of complying
with arbitrage rebate requirements; the costs to the City, CFD No. 2006-1 IA J1 or any designee thereof of
complying with disclosure requirements of the City, CFD No. 2006-1 IA JJ or obligated persons associated
with applicable federal and state securities laws and the Act; the costs associated with preparing Special
Tax disclosure statements and responding to public inquiries regarding the Special Taxes; the costs of the
City, CFD No. 2006-1 IA JJ or any designee thereof related to an appeal of the Special Tax; the costs
associated with the release of funds from an escrow account; and the City's annual administration fees
and third party expenses. Administrative Expenses shall also include amounts estimated by the CFD
Administrator or advanced by the City or CFD No. 2006-1 IA 1J for any other administrative purposes of
CFD No. 2006-1 IA JJ, including attorney's fees and other costs, and attorney's fees and other costs related
to commencing and pursuing to completion any foreclosure of delinquent Special Taxes.
"Approved Property" means all Assessor's Parcels of Taxable Property: (i) that are included in a Final Map
that was recorded prior to the January 1st preceding the Fiscal Year in which the Special Tax is being
levied, and (ii) that have not been issued a building permit on or before May 1st preceding the Fiscal Year
in which the Special Tax is being levied.
"Assessor's Parcel" means a lot or parcel of land designated on an Assessor's Parcel Map with an assigned
Assessor's Parcel Number.
"Assessor's Parcel Map" means an official map of the Assessor of the County designating parcels by
Assessor's Parcel Number.
City of Lake Elsinore
Community Facilities District No, 2006-1 IA JJ (Summerly) Page 1
"Assessor's Parcel Number" means that number assigned to an Assessor's Parcel by the County for
purposes of identification.
"Assigned Special Tax for Facilities" means the Special Tax for Facilities for each Land Use Class of
Developed Property, as determined in accordance with Section C.1.(b) below.
"Authorized Facilities" means those authorize improvements, as listed in an exhibit to the Resolution of
Formation.
"Backup Special Tax for Facilities" means the Special Tax for Facilities applicable to each Assessor's Parcel
of Developed Property, as determined in accordance with Section C.1.(c) below.
"CFD Administrator" means an official of the City, or designee thereof, responsible for determining the
Special Tax Requirement for Facilities, the Special Tax Requirement for Services as determined in
accordance with Section I below, and providing for the levy and collection of the Special Taxes.
"CFD" or "CFD No. 2006-1 IA 1J" means Improvement Area JJ of CFD No. 2006-1 as identified on the
boundary map for CFD No. 2006-1.
"CFD No. 2006-1" means City of Lake Elsinore Community Facilities District No. 2006-1 (Summerly)
established by the City under the Act.
"CFD No. 2006-1 IA JJ Bonds" means any obligation to repay a sum of money, including obligations in the
form of bonds, notes, certificates of participation, long-term leases, loans from government agencies, or
loans from banks, other financial institutions, private businesses, or individuals, or long-term contracts,
or any refunding thereof, to which Special Tax for Facilities within CFD No. 2006-1 IA 1J have been pledged.
"City" means the City of Lake Elsinore.
"City Council" means the City Council of the City of Lake Elsinore, acting as the Legislative Body of CFD
No. 2006-1 IA JJ, or its designee.
"County" means the County of Riverside.
"Developed Property" means, with respect to the Special Tax for Facilities, for each Fiscal Year, all Taxable
Property, 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 and 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 for Facilities is being levied. Once an Assessor's Parcel has been designated
Developed Property, the Maximum Special Tax for Facilities cannot be reduced for any reason unless a
prepayment in full or partial prepayment is made pursuant to Section G.
"Final Subdivision" means (i) a final map, or portion thereof, approved by the City pursuant to the
Subdivision Map Act (California Government Code Section 66410 et seq.) that creates individual lots for
which building permits may be issued, or (ii) for condominiums, a final map, or portion thereof, approved
by the City and a condominium plan recorded pursuant to California Civil Code Section 1352 that creates
individual lots for which building permits may be issued.
"Fiscal Year" means the period commencing on July 1" of any year and ending the following June 30t".
"Funding Agreement" means the Funding, Construction and Acquisition Agreement entered into by the
City, on behalf of CFD No. 2006-1, as it may be amended.
City of Lake Elsinore
Community Facilities District No. 2006-1 IA JJ (Summerly) Page 2
"Indenture" means the indenture, fiscal agent agreement, resolution or other instrument pursuant to
which CFD No. 2006-1 IA A Bonds are issued, as modified, amended and/or supplemented from time to
time, and any instrument replacing or supplementing the same.
"Land Use Class" means any of the classes listed in Table 1 below.
"Maximum Special Tax for Facilities" means the maximum Special Tax for Facilities, determined in
accordance with Section C below, that can be levied in any Fiscal Year on any Assessor's Parcel.
"Non -Residential Property" means all Assessor's Parcels of Developed Property for which a building
permit permitting the construction of one or more non-residential units or facilities has been issued by
the City.
"Outstanding Bonds" means all CFD No. 2006-1 IA 1J Bonds which are deemed to be outstanding under
the Indenture.
"Property Owner's Association Property" means, for each Fiscal Year, any property within the boundaries
of CFD No. 2006-1 IA A that was owned by a property owner association, including any master or sub -
association, as of January 1 of the prior Fiscal Year.
"Proportionately" means for Developed Property that the ratio of the actual Special Tax for Facilities levy
to the Assigned Special Tax for Facilities is equal for all Assessor's Parcels of Developed Property. For
Undeveloped Property, "Proportionately" means that the ratio of the actual Special Tax for Facilities levy
per Acre to the Maximum Special Tax for Facilities per Acre is equal for all Assessor's Parcels of
Undeveloped Property. The term "Proportionately" may similarly be applied to other categories of
Taxable Property as listed in Section D below.
"Public Property" means , for each Fiscal Year;'(i) any property within the boundaries of CFD No. 2006-1
IA 1J owned by, irrevocably offered or dedicated to, or over, through or under which an easement for
purposes of public use has been granted, to the federal government, the State, the County, the City, the
Lake Elsinore Unified School District, or any local government or other public agency as of January I of the
previous Fiscal Year, provided that any property leased by a public agency to a private entity and subject
to taxation under Section 53340.1 of the Act shall be taxed and classified according to its use; or (ii) any
property within the boundaries of CFD No. 2006-1 IA J1 that was encumbered, as of January I of the
previous Fiscal Year, by an unmanned utility easement making impractical its utilization for other than the
purpose set forth in the easement.
"Residential Floor Area" means all of the square footage of living area within the perimeter of a
residential structure, not including any carport, walkway, garage, overhang, patio, enclosed patio, or
similar area. The determination of Residential Floor Area for an Assessor's Parcel shall be made by
reference to the building permit(s) issued for such Assessor's Parcel.
"Residential Property" means all Assessor's Parcels of Developed Property for which a building permit
permitting the construction thereon of one or more residential dwelling units has been issued by the City.
"Resolution of Formation" means the resolution of formation for CFD No. 2006-1 IA JJ.
"Special Tax(es)" means any of the special taxes authorized to be levied within CFD No. 2006-1 IA JJ
pursuant to the Act.
"Special Tax for Facilities" means the special tax to be levied in each Fiscal Year on each Assessor's Parcel
of Developed Property, Taxable Property Owner Association Property, Taxable Public Property, and
Undeveloped Property to fund the Special Tax Requirement for Facilities.
City of Lake Elsinore
Community Facilities District No. 2006-1 IA JJ (Summerly) Page 3
"Special Tax for Facilities Requirement" means that amount required in any Fiscal Year for CFD No. 2006-
1 IA A to: (i) pay debt service on all Outstanding Bonds due in the calendar year commencing in such Fiscal
Year; (ii) pay periodic costs on the CFD No. 2006- 1 IA A Bonds, including but not limited to, credit
enhancement and rebate payments on the CFD No. 2006-1 IA A Bonds due in the calendar year
commencing in such Fiscal Year; (iii) pay Administrative Expenses; (iv) pay any amounts required to
establish or replenish any reserve funds for all Outstanding Bonds; (v) pay for reasonably anticipated
Special Tax for Facilities delinquencies; (vi) pay directly for acquisition or construction of Authorized
Facilities to the extent that the inclusion of such amount does not increase the Special Tax for Facilities
levy on Approved Property and Undeveloped Property; less (vii) a credit for funds available to reduce the
annual Special Tax for Facilities levy, as determined by the CFD Administrator pursuant to the Indenture.
"State" means the State of California
"Taxable Property" means all of the Assessor's Parcels within the boundaries of CFD No. 2006-1 IA JJ
which are not exempt from the Special Tax for Facilities pursuant to law or Section E below.
"Trustee" means the trustee, fiscal agent, or paying agent under the Indenture.
"Undeveloped Property" means, for each Fiscal Year, all Taxable Property not classified as Developed
Property, Approved Property, Taxable Property Owner Association Property, or Taxable Public Property.
B. ASSIGNMENT TO LAND USE CATEGORIES
Each Fiscal Year, all Taxable Property within CFD No. 2006-1 IAJJ shall be classified as Developed Property,
Approved Property, Taxable Public Property, Taxable Property Owner Association Property, or
Undeveloped Property, and shall be subject to Special Taxes in accordance with this Rate and Method of
Apportionment determined pursuant to Sections C and D below. Residential Property shall be assigned to
Land Use Classes 1 through 5 as listed in Table 1 below based on the Residential Floor Area "for each unit.
Non -Residential Property shall be assigned to Land Use Class 6. With respect to Residential Property, the
Residential Floor Area shall be determined from the most recent building permit issued forsuch Assessor's
Parcel.
C. MAXIMUM SPECIAL TAX FOR FACILITIES
1. Developed Property
(a) Maximum Special Tax for Facilities
The Maximum Special Tax for Facilities for each Assessor's Parcel classified as Developed Property
shall be the greater of (i) the amount derived by application of the Assigned Special Tax for Facilities
or (ii) the amount derived by application of the Backup Special Tax for Facilities.
(b) Assigned Special Tax for Facilities
The Fiscal Year 2017-2018 Assigned Special Tax for Facilities for each Land Use Class is shown below
in Table 1.
City of Lake Elsinore
Community Facilities District No. 2006-1 IA 1J (Summerly) Page 4
TABLE 1
ASSIGNED SPECIAL TAX FOR FACILITIES FOR DEVELOPED PROPERTY
COMMUNITY FACILITIES DISTRICT NO. 2006-1 IMPROVEMENT AREAJJ
FISCAL YEAR 2017-2018
Land Use
Class
Description
Residential Floor Area
Assigned Special fax
for Facilities
1
Residential Property
Less than 1,700 sq. ft
$1,280 per unit
2
Residential Property
1,700 —1,999 sq. ft
$1,320 per unit
3
Residential Property
2,000-2,299 sq. ft
$1,570 per unit
4
Residential Property
2,300— 2,599 sq. ft
$1,580 per unit
5
Residential Property
Greater than 2,599 sq. ft.
$1,590 per unit
6
Non -Residential Property
N/A
$12,032 per Acre
(c) Backup Special Tax for Facilities
The Fiscal Year 2017-2018 Backup Special Tax for Facilities attributable to a Final Subdivision will equal
$12,032, multiplied by the Acreage of all Taxable Property, exclusive of any Taxable Property Owner
Association Property and Taxable Public Property, therein. The Backup Special Tax for Facilities for
each Assessor's Parcel of Residential Property shall be computed by dividing the Backup Special Tax
for Facilities attributable to the applicable Final Subdivision by the number of Assessor's Parcels for
which building permits for residential construction have or may be issued (i.e., the number or
residential lots). The Backup Special Tax for Facilities for each Assessor's Parcel of Non -Residential
Property therein shall equal $12,032 multiplied by the Acreage of such Assessor's Parcel.
If a Final Subdivision includes Assessor's Parcels of Taxable Property for which building permits for
both residential and non-residential construction may be issued, exclusive of Taxable Property Owner
Association Property and Taxable Public Property, then the Backup Special I wt for Facilities for each
Assessor's Parcel of Residential Property shall be computed exclusive of the Acreage and Assessor's
Parcels of property for which building permits for non-residential construction may be issued.
Notwithstanding the foregoing, if all or any portion of the Final Subdivision(s) described in the
preceding paragraphs is subsequently changed or modified by recordation of a lot line adjustment or
similar instrument, and only if the CFD Administrator determines that such change or modification
results in a decrease in the number of Assessor's Parcels of Taxable Property for which building
permits for residential construction have or may be issued within such Final Subdivision, then the
Backup Special Tax for Facilities for each Assessor's Parcel of Developed Property that is part of the
lot line adjustment or similar instrument for such Final Subdivision shall be a rate per Acre as
calculated below. The Backup Special Tax for Facilities previously determined for an Assessor's Parcel
of Developed Property that is not a part of the lot line adjustment or similar instrument for such Final
Subdivision shall not be recalculated.
1. Determine the total Backup Special Tax for Facilities anticipated to apply to the changed or
modified portion of the Final Subdivision area prior to the change or modification.
2. The result of paragraph I above shall be divided by the Acreage of Taxable Property which
is ultimately expected to exist in such changed or modified portion of the Final Subdivision
area, as reasonably determined by the CFD Administrator.
3. The result of paragraph 2 above shall be the Backup Special Tax for Facilities per Acre which
shall be applicable to Assessor's Parcels of Developed Property in such changed or modified
City of Lake Elsinore
Community Facilities District No. 2006-1 IA JJ (Summerly) Page 5
portion of the Final Subdivision area for all remaining Fiscal Years in which the Special Tax
for Facilities may be levied.
(d) Release of Obligation to Pay and Disclose Backup Special Tax
All Assessor's Parcels within CFD No. 2006-1 IA 1J will be relieved simultaneously and permanently
from the obligation to pay and disclose the backup Special Tax if the CFD Administrator determines
that the annual debt service required for the Outstanding Bonds, when compared to the Assigned
Special Taxes for Facilities that may be levied against all Assessor's Parcels of Developed Property
results in 110% debt service coverage (i.e., the aggregate Assigned Special Taxes for Facilities that may
be levied against all Developed Property in each remaining Fiscal Year based on then existing
development in CFD No. 2006-1 IA JJ is at least equal to the sum of (i) the Administrative Expenses
and (ii) 1.10 times maximum annual debt service, in each remaining Fiscal Year on the Outstanding
Bonds).
(e) Increase in the Assigned Special Tax for Facilities and Backup Special Tax for Facilities
The Fiscal Year 2017-2018 Assigned Special Tax for Facilities, identified in Table 1 above, and Backup
Special Tax for Facilities shall increase thereafter, commencing on July 1, 2018 and on July 1 of each
Fiscal Yearthereafter, by an amount equal totwo percent (2%) of the amount in effect forthe previous
Fiscal Year.
(f) Multiple Land Use Classes
In some instances, an Assessor's Parcel of Developed Property may contain more than one Land Use
Class. The Maximum Special Tax for Facilities levied on an Assessor's Parcel shall be the sum of the
Maximum Special Tax for Facilities for all Land Use Classes located on that Assessor's Parcel. The CFD
Administrator's allocation to each type of property shall be final.
2. Approved Property. Taxable Property Owner Association Property. Taxable Public Property. and
Undeveloped Property
The Fiscal Year 2017-2018 Maximum Special Tax for Facilities for Approved Property, Taxable Property
Owner Association Property, Taxable Public Property, and Undeveloped Property shall be $12,032 per
Acre and shall increase thereafter, commencing on July 1, 2018 and on July 1 of each Fiscal Yearthereafter,
by an amount equal to two percent (2%) ofthe Maximum Special Tax for Facilities in effect for the previous
Fiscal Year.
D. METHOD OF APPORTIONMENT OF THE SPECIAL TAX FOR FACILITIES
Commencing with Fiscal Year 2017-2018 and for each following Fiscal Year, the City Council shall
determine the Special Tax Requirement for Facilities and levy the Special Tax for Facilities until the amount
of Special Tax for Facilities levy equals the Special Tax Requirement for Facilities. The Special Tax for
Facilities shall be levied each Fiscal Year as follows:
Step One: The Special Tax for Facilities shall be levied on each Assessor's Parcel of Developed
Property in an amount equal to 100% of the applicable Assigned Special Tax for Facilities;
Step Two: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after
the first step has been completed, the Special Tax for Facilities shall be levied
Proportionately on each Assessor's Parcel of Approved Property at up to 100% of the
Maximum Special Tax for Facilities for Approved Property;
City of Lake Elsinore
Community Facilities District No. 2006-1 IA A (Summerly) Page 6
Step Three: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after
the first two steps has been completed, the Special Tax for Facilities shall be levied
Proportionately on each Assessor's Parcel of Undeveloped Property at up to 100% of the
Maximum Special Tax for Facilities for Undeveloped Property;
Step Four: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after
the first three steps have been completed, then the levy of the Special Tax for Facilities
on each Assessor's Parcel of Developed Property whose Maximum Special Tax for
Facilities is determined through the application of the Backup Special Tax for Facilities
shall be increased in equal percentages from the Assigned Special Tax for Facilities up to
the Maximum Special Tax for Facilities for each such Assessor's Parcel;
Step Five: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after
the first four steps have been completed, then the Special Tax for Facilities shall be levied
Proportionately on each Assessor's Parcel of Taxable Property Owner Association
Property and Taxable Public Property at up to 100% of the Maximum Special Tax for
Facilities for Taxable Property Owner Association Property or Taxable Public Property.
Notwithstanding the above, the City Council may, in any Fiscal Year, levy Proportionately less than 100%
of the Assigned Special Tax for Facilities in step one (above), when (i) the City Council is no longer required
to levy the Special Tax for Facilities pursuant to steps two through four above in order to meet the Special
Tax Requirement for Facilities; (ii) all authorized CFD No. 2006-1 IA 1J Bonds have already been issued or
the City Council has covenanted that it will not issue any additional CFD No. 2006-1 IA 1J Bonds (except
refunding bonds) to be supported by the Special Tax for Facilities; and (iii) all Authorized Facilities have
been constructed and/or acquired.
Further notwithstanding the above, under no circumstances will the Special Tax for Facilities levied against
any Assessor's Parcel of Residential Property be increased by more than ten percent as a consequence of
delinquency or default by the owner of any other Assessor's Parcel within CFD No. 2006-1 IA JJ.
E. EXEMPTIONS
No Special Tax for Facilities shall be levied on up to 12.82 Acres of Property Owner Association Property
and/or Public Property in CFD No. 2006-1 IA JJ. Tax-exempt status will be assigned by the CFD
Administrator in the chronological order in which property becomes Property Owner Association Property
or Public Property. However, should an Assessor's Parcel no longer be classified as Property Owner
Association Property or Public Property, its tax-exempt status will be revoked.
Property Owner Association Property or Public Property that is not exempt from Special Tax for Facilities
under this section shall be subject to the levy of the Special Tax for Facilities and shall be taxed
Proportionately as part of the fourth step in Section D above, at up to 100% of the Maximum Special Tax
for Facilities for Taxable Property Owner Association Property or Taxable Public Property.
F. MANNER OF COLLECTION
The Special Tax for Facilities shall be collected in the same manner and at the same time as ordinary ad
valorem property taxes, provided, however, that CFD No. 2006-1 IA11 may collect Special Tax for Facilities
at a different time or in a different manner if necessary to meet its financial obligations, and may covenant
to foreclose and may actually foreclose on delinquent Assessor's Parcels as permitted by the Act.
City of Lake Elsinore
Community Facilities District No. 2006-1 IA 1J (Summerly) Page 7
G. PREPAYMENT OF SPECIAL TAX FOR FACILITIES
The following additional definitions apply to this Section G:
"Buildout" means, for CFD No. 2006-1 IA JJ, that all expected building permits have been issued.
"CFD Public Facilities Costs" means either $5,125,000 in 2017 dollars, which shall increase by the
Construction Inflation Index on July 1, 2018, and on each July I thereafter, or such lower number as (i)
shall be determined by the CFD Administrator as sufficient to fund the Authorized Facilities to be provided
by CFD No. 2006-1 IA JJ under the authorized bonding program for CFD No. 2006-1 IA J1, or (ii) shall be
determined by the City Council concurrently with a covenant that it will not issue any more CFD No. 2006-
1 IA JJ Bonds (except refunding bonds) to be supported by the Special Tax for Facilities levy under this
Rate and Method of Apportionment as described in Section D above.
"Construction Inflation Index" means the annual percentage change in the Engineering News Record
Building Cost Index for the City of Los Angeles, measured as of the calendar year which ends in the
previous Fiscal Year. In the event this index ceases to be published, the Construction Inflation Index shall
be another index as determined by the CFD Administrator that is reasonably comparable to the
Engineering News Record Building Cost Index for the City of Los Angeles.
"Future Facilities Costs" means the CFD Public Facilities Costs minus (i) publicfacility costs previously paid
from the Improvement Fund, (ii) moneys currently on deposit in the Improvement Fund, and (iii) moneys
currently on deposit in an escrow fund established pursuant to the Indenture that are expected to be
available to finance the cost of Authorized Facilities.
"Improvement Fund" means an account specifically identified in the Indenture to hold funds which are
currently availabiefor expenditure to acquire or construct Authorized Facilities eligible under the Au:' "
"Previously Issued Bonds" means, for any Fiscal Year, all Outstanding Bonds that are deemed to be
outstanding under the Indenture after the first interest and/or principal payment date following the
current Fiscal Year.
1. Prepayment in Full
Only an Assessor's Parcel of Developed Property, or Undeveloped Property for which a building permit
has been issued, may be prepaid. The obligation of the Assessor's Parcel to pay the Special Taxfor Facilities
may be permanently satisfied as described herein, provided that a prepayment may be made with respect
to a particular Assessor's Parcel only if there are no delinquent Special Taxes with respect to such
Assessor's Parcel at the time of prepayment. An owner of an Assessor's Parcel intending to prepay the
Special Tax for Facilities obligation shall provide the CFD Administrator with written notice of intent to
prepay. Within 30 days of receipt of such written notice, the CFD Administrator shall notify such owner of
the prepayment amount for such Assessor's Parcel. The CFD Administrator may charge a reasonable fee
for providing this service. Prepayment must be made not less than 45 days prior to the next occurring
date that notice of redemption of CFD No. 2006-1 IA11 Bonds from the proceeds of such prepayment may
be given by the Trustee pursuant to the Indenture.
The Special Tax for Facilities Prepayment Amount (defined below) shall be calculated as summarized
below (capitalized terms as defined below):
City of Lake Elsinore
Community Facilities District No, 2006-1 IA 1J (Summerly) Page 8
The Prepayment Amount shall be determined as of the proposed prepayment date as follows:
1. Confirm that no Special Tax delinquencies apply to such Assessor's Parcel.
2. For Assessor's Parcels of Developed Property, compute the Assigned Special Tax for Facilities
and Backup Special Tax for Facilities. For Assessor's Parcels of Undeveloped Property for which a
building permit has been issued, compute the Assigned Special Tax for Facilities and Backup Special
Tax for Facilities forthat Assessor's Parcel as though it was already designated as Developed Property,
based upon the building permit which has already been issued for that Assessor's Parcel.
3. (a) Divide the Assigned Special Tax for Facilities computed pursuant to paragraph 2 by the total
estimated Assigned Special Tax for Facilities for the entire CFD No. 2006-1 IA JJ based on the
Developed Property Special Tax for Facilities which could be levied in the current Fiscal Year on all
expected development through Buildout of CFD No. 2006-1 IA JJ, excluding any Assessor's Parcels
which have been prepaid, and
(b) Divide the Backup Special Tax for Facilities computed pursuant to paragraph 2 by the total
estimated Backup Special Tax for Facilities at Buildout for the entire CFD, No: 2006- 1A JJ, excluding
any Assessor's Parcels which have been prepaid.
4. Multiply the larger quotient computed pursuant to paragraph 3(a) or 3(b) by the Previously
Issued Bonds to compute the amount of Previously Issued Bonds to be retired and prepaid (the "Bond
Redemption Amount")
5. Multiply the Bond Redemption Amount computed pursuant to paragraph 4 by the applicable
redemption premium (e.g., the redemption price -100%), if any, on the Previously Issued Bonds to be
redeemed (the "Redemption Premium").
6. Compute the current Future Facilities Costs.
7. Multiply the larger quotient computed pursuant to paragraph 3(a) or 3(b) by the amount
determined pursuant to paragraph 6 to compute the amount of Future Facilities Costs to be prepaid
(the "Future Facilities Amount").
8. Compute the amount needed to pay interest on the Bond Redemption Amount from the first
bond interest and/or principal payment date following the current Fiscal Year until the earliest
redemption date for the Previously Issued Bonds.
9. Determine the Special Tax for Facilities levied on the Assessor's Parcel in the current Fiscal Year
which has not yet been paid.
10. Compute the minimum amount the CFD Administrator reasonably expects to derive from the
City of Lake Elsinore
Community Facilities District No. 2006-1 IA A (Summerly) Page 9
Bond Redemption Amount
plus
Redemption Premium
plus
Future Facilities Amount
plus
Defeasance Amount
plus
Administrative Fees and Expenses
less
Reserve Fund Credit
less
Capitalized Interest Credit
Equals:
Prepayment Amount
The Prepayment Amount shall be determined as of the proposed prepayment date as follows:
1. Confirm that no Special Tax delinquencies apply to such Assessor's Parcel.
2. For Assessor's Parcels of Developed Property, compute the Assigned Special Tax for Facilities
and Backup Special Tax for Facilities. For Assessor's Parcels of Undeveloped Property for which a
building permit has been issued, compute the Assigned Special Tax for Facilities and Backup Special
Tax for Facilities forthat Assessor's Parcel as though it was already designated as Developed Property,
based upon the building permit which has already been issued for that Assessor's Parcel.
3. (a) Divide the Assigned Special Tax for Facilities computed pursuant to paragraph 2 by the total
estimated Assigned Special Tax for Facilities for the entire CFD No. 2006-1 IA JJ based on the
Developed Property Special Tax for Facilities which could be levied in the current Fiscal Year on all
expected development through Buildout of CFD No. 2006-1 IA JJ, excluding any Assessor's Parcels
which have been prepaid, and
(b) Divide the Backup Special Tax for Facilities computed pursuant to paragraph 2 by the total
estimated Backup Special Tax for Facilities at Buildout for the entire CFD, No: 2006- 1A JJ, excluding
any Assessor's Parcels which have been prepaid.
4. Multiply the larger quotient computed pursuant to paragraph 3(a) or 3(b) by the Previously
Issued Bonds to compute the amount of Previously Issued Bonds to be retired and prepaid (the "Bond
Redemption Amount")
5. Multiply the Bond Redemption Amount computed pursuant to paragraph 4 by the applicable
redemption premium (e.g., the redemption price -100%), if any, on the Previously Issued Bonds to be
redeemed (the "Redemption Premium").
6. Compute the current Future Facilities Costs.
7. Multiply the larger quotient computed pursuant to paragraph 3(a) or 3(b) by the amount
determined pursuant to paragraph 6 to compute the amount of Future Facilities Costs to be prepaid
(the "Future Facilities Amount").
8. Compute the amount needed to pay interest on the Bond Redemption Amount from the first
bond interest and/or principal payment date following the current Fiscal Year until the earliest
redemption date for the Previously Issued Bonds.
9. Determine the Special Tax for Facilities levied on the Assessor's Parcel in the current Fiscal Year
which has not yet been paid.
10. Compute the minimum amount the CFD Administrator reasonably expects to derive from the
City of Lake Elsinore
Community Facilities District No. 2006-1 IA A (Summerly) Page 9
reinvestment of the Special Tax for Facilities Prepayment Amount less the Future Facilities Amount
and the Administrative Fees and Expenses (defined below) from the date of prepayment until the
redemption date for the Previously Issued Bonds to be redeemed with the prepayment.
11. Add the amounts computed pursuant to paragraphs 8 and 9 and subtract the amount computed
pursuant to paragraph 10 (the "Defeasance Amount").
12. The administrative fees and expenses of CFD No. 2006-1 IA 1J are as calculated by the CFD
Administrator and include the costs of computation of the prepayment, the costs to invest the
prepayment proceeds, the costs of redeeming CFD No. 2006-1 IA JJ Bonds, and the costs of recording
any notices to evidence the prepayment and the redemption (the "Administrative Fees and
Expenses").
13. The reserve fund credit (the "Reserve Fund Credit") shall equal the lesser of: (a) the expected
reduction in the reserve requirement (as defined in the Indenture), if any, associated with the
redemption of Previously Issued Bonds as a result of the prepayment, or (b) the amount derived by
subtracting the new reserve requirement (as defined in the Indenture) in effect after the redemption
of Previously Issued Bonds as a result of the prepayment from the balance in the reserve fund on the
prepayment date, but in no event shall such amount be less than zero. No Reserve Fund Credit shall
be granted if the amount then on deposit in the reserve fund forthe Previously Issued Bonds is below
100% of the reserve requirement (as defined in the Indenture).
14. If any capitalized interest for the Previously Issued Bonds will not have been expended as of the
date immediately following the first interest and/or principal payment following the current Fiscal
Year, a capitalized interest credit shall be calculated by multiplying the larger quotient computed
pursuant to paragraph 3(a) or 3(b) by the expected balance in the capitalized interest fund or account
under the Indenture after such first interest and/or princiNal payment (the "Capitalized Interest
Credit").
15. The Special Tax for Facilities prepayment is equal to the sum of the amounts computed pursuant
to paragraphs 4, 5, 7, 11 and 12, less the amounts computed pursuant to paragraphs 13 and 14 (the
"Special Tax for Facilities Prepayment Amount").
From the Special Tax for Facilities Prepayment Amount, the amounts computed pursuant to
paragraphs 4, 5, 11, 13 and 14 shall be deposited into the appropriate fund as established under the
Indenture and be used to retire CFD No. 2006-1 IA A Bonds or make debt service payments. The
amount computed pursuant to paragraph 7 shall be deposited into the Improvement Fund. The
amount computed pursuant to paragraph 12 shall be retained by CFD No. 2006-1 IA JJ.
The Special Tax for Facilities Prepayment Amount may be insufficient to redeem a full $5,000
increment of CFD No. 2006-1 IA A Bonds. In such cases, the increment above $5,000 or integral
multiple thereof will be retained in the appropriate fund established under the Indenture to be used
with the next prepayment of CFD No. 2006-1 IA 1J Bonds or to make debt service payments.
As a result of the payment of the current Fiscal Year's Special Tax for Facilities levy as determined
under paragraph 9 (above), the CFD Administrator shall remove the current Fiscal Year's Special Tax
for Facilities levy for such Assessor's Parcel from the County tax rolls. With respect to any Assessor's
Parcel that is prepaid, the City Council shall cause a suitable notice to be recorded in compliance with
the Act, to indicate the prepayment of the Special Tax for Facilities and the release of the Special Tax
for Facilities lien on such Assessor's Parcel, and the obligation of such Assessor's Parcel to pay the
Special Tax for Facilities shall cease.
City of Lake Elsinore
Community Facilities District No. 2006-1 IA J1 (Summerly) Page 10
Notwithstanding the foregoing, no Special Tax for Facilities prepayment shall be allowed unless, at
the time of such proposed prepayment, the amount of Maximum Special Tax for Facilities that may
be levied on Taxable Property within CFD No. 2006-1 IA JJ (after excluding 12.82 Acres of Property
Owner Association Property and/or Public Property in CFD No. 2006-1 IA J1 as set forth in Section E)
both priorto and after the proposed prepayment is at least equal to the sum of (i) the Administrative
Expenses, as defined in Section A above, and (ii) 1.10 times maximum annual debt service, in each
remaining Fiscal Year on the Outstanding Bonds.
2. Prepayment in Part
The Special Tax for Facilities on an Assessor's Parcel of Developed Property or an Assessor's Parcel of
Undeveloped Property for which a building permit has been issued may be partially prepaid. The amount
of the prepayment shall be calculated as in Section GA.; except that a partial prepayment shall be
calculated according to the following formula:
PP = ((PE —A) x F) +A
These terms have the following meaning:
PP = Partial Prepayment Amount
PE = the Prepayment Amount calculated according to Section G.1
F = the percent by which the owner of the Assessor's Parcel(s) is partially prepaying the
Maximum Special Tax for Facilities obligation
A = the Administrative Fees and Expenses determined pursuant to Section G.1
The owner of any Assessor's Parcel who desires such prepayment shall notify the CFD Administrator of
such owner's intent to partially prepay the Special Tax for Facilities and the percentage by which the
Special Taxfor Facilities shall be prepaid. The CFD Admi^istrator shall provide the ownerwith a statement
of the amount required for the partial prepayment of the Special Tax for Facilities for an Assessor's Parcel
within 30 days of the request and may charge a reasonable fee for providing this service. With respect to
any Assessor's Parcel that is partially prepaid, the City Council shall (i) distribute the funds remitted to it
according to Section G.1, and (ii) indicate in the records of CFD No. 2006-1 IA JJ that there has been a
partial prepayment of the Special Tax for Facilities and that a portion of the Special Tax for Facilities with
respect to such Assessor's Parcel, equal to the outstanding percentage (1.00 - F) of the remaining
Maximum Special Tax for Facilities, shall continue to be levied on such Assessor's Parcel pursuant to
Section D above.
H. TERM OF SPECIAL TAX FOR FACILITIES
The Special Tax for Facilities shall be levied until Fiscal Year 2058-2059, provided however that the Special
Tax for Facilities will cease to be levied in an earlier Fiscal Year if the CFD Administrator has determined
(i) that all required interest and principal payments on the CFD No. 2006-1 IAJJ Bonds have been paid; (ii)
all Authorized Facilities have been acquired and all reimbursements required by the Funding Agreement
have been paid; and (iii) all other obligations of CFD No. 2006-1 IA JJ have been satisfied. Bonds shall not
be issued after eighteen (18) months have elapsed following the final inspection of the last Residential
Property within CFD No. 2006-1 IA 1J, except as otherwise provided in the Funding Agreement.
City of Lake Elsinore
Community Facilities District No. 2006-1 IA 1J (Summerly) Page 11
I. SPECIAL TAX FOR SERVICES
The following additional definitions apply to this Section I:
"Developed Multifamily Unit" means a residential dwelling unit within a building in which each of the
individual dwelling units has or shall have at least one common wall with another dwelling unit and a
building permit has been issued by the City for such dwelling unit on or prior to May 1 preceding the Fiscal
Year in which the Special Tax for Services is being levied.
"Developed Single Family Unit" means a residential dwelling unit other than a Developed Multifamily
Unit on an Assessor's Parcel for which a building permit has been issued by the City on or prior to May 1
preceding the Fiscal Year in which the Special Tax for Services is being levied.
"Maximum Special Tax for Services" means the maximum Special Tax for Services that can be levied by
CFD No. 2006-1 IA 1J in any Fiscal Year on any Assessor's Parcel.
"Operating Fund" means a fund that shall be maintained for CFD No. 2006-1 IA A for any Fiscal Year to
pay for the actual costs of maintenance related to the Service Area, and the applicable Administrative
Expenses.
"Operating Fund Balance" means the amount of funds in the Operating Fund at the end of the preceding
Fiscal Year.
"Service Area" means parks, open space, and storm drains
"Special Tax for Services" means any of the special taxes authorized to be levied within CFD No. 2006-1
IA JJ puisuam to the Act to fund the Special Tax Requirement for Services.
"Special Tax Requirement for Services" means the amount determined in any Fiscal Year for CFD No.
2006-1 IA 1J equal to (i) the budgeted costs directly related to the Service Area, including maintenance,
repair and replacement of certain components of the Service Area which have been accepted and
maintained or are reasonably expected to be accepted and maintained during the current Fiscal Year, (ii)
Administrative Expenses, and (iii) anticipated delinquent Special Taxes for Services based on the
delinquency rate in CFD No. 2006-1 IAJJ for the previous Fiscal Year, less (iv) the Operating Fund Balance,
as determined by the CFD Administrator.
1. Rate and Method of Apportionment of the Special Tax for Services
Commencing Fiscal Year 2017-2018 and for each subsequent Fiscal Year, the City Council shall levy
Special Taxes for Services on (i) all Assessor's Parcels containing a Developed Single Family Unit or
Developed Multifamily Unit and (ii) all Assessor's Parcels of Non -Residential Property, up to the
applicable Maximum Special Tax for Services to fund the Special Tax Requirement for Services.
The Maximum Special Tax for Services for Fiscal Year 2017-2018 shall be $306.91 per Developed Single
Family Unit, $153.47 per Developed Multifamily Unit, and $691 per Acre for each Assessor's Parcel of
Non -Residential Property.
On each July 1, commencing July 1, 2018, the Maximum Special Tax for Services shall be increased by
two percent (2.00%) of the amount in effect in the prior Fiscal Year.
City of Lake Elsinore
Community Facilities District No. 2006-1 IA A (Summerly) Page 12
J. DURATION OF SPECIAL TAX FOR SERVICES
The Special Tax for Services shall be levied in perpetuity to fund the Special Tax for Services Requirement,
unless no longer required as determined at the sole discretion of the City Council.
K. APPEALS AND INTERPRETATIONS
Any landowner or resident who feels that the amount of the Special Tax levied on their Assessor's Parcel
is in error may submit a written appeal to CFD No. 2006-1 IA JJ. The CFD Administrator shall review the
appeal and if the CFD Administrator concurs, the amount of the Special Tax levied shall be appropriately
modified.
The City Council may interpret this Rate and Method of Apportionment for purposes of clarifying any
ambiguity and make determinations relative to the annual administration of the Special Tax and any
landowner or resident appeals. Any decision of the City Council shall be final and binding as to all persons.
City of Lake Elsinore
Community Facilities District No. 2006-1 IA JJ (Summerly) Page 13
RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES FOR
CITY OF LAKE ELSINORE COMMUNITY FACILITIES DISTRICT NO. 2006-1
(SUMMERLY)
IMPROVEMENT AREA KK
A Special Tax shall be levied on all Assessor's Parcels in City of Lake Elsinore Community Facilities District
No. 2006-1 (Summerly) Improvement Area KK ("CFD No. 2006-1 IA KK") and collected each Fiscal Year
commencing in Fiscal Year 2017-2018, in an amount determined through the application of this Rate and
Method of Apportionment as described below. All of the real property in CFD No. 2006-1 IA KK, unless
exempted by law or by the provisions hereof, shall be taxed for the purposes, to the extent and in the
manner herein provided.
A. DEFINITIONS
The terms hereinafter set forth have the following meanings:
"Acre or Acreage" means the land area of an Assessor's Parcel as shown on an Assessor's Parcel Map, or
if the land area is not shown on an Assessor's Parcel Map, the land area shown on the applicable final
map, parcel map, condominium plan, or other recorded County parcel map.
"Act" means the Mello -Roos Community Facilities Act of 1982, as amended, being Chapter 2.5
(commencing with Section 53311) of Part 1 of Division 2 of Title 5 of the Government Code of the State of
California.
"Administrative Expenses" means the following actual or reasonably estimated costs directly related to
the administration of CFD No. 2006-1 IA KK: the costs of computing the Special Taxes and preparing the
annual Special Tax collection schedules (whether by the City or des ignPe, thereof or both); the costs of
collecting the Special Taxes (whether by the City or otherwise); the costs of remitting the Special Taxes to
the Trustee; the costs of the Trustee (including its legal counsel) in the discharge of the duties required of
it under the Indenture; the costs to the City, CFD No. 2006-1 IA KK or any designee thereof of complying
with arbitrage rebate requirements; the costs to the City, CFD No. 2006-1 IA KK or any designee thereof
of complying with disclosure requirements of the City, CFD No. 2006-1 IA KK or obligated persons
associated with applicable federal and state securities laws and the Act; the costs associated with
preparing Special Tax disclosure statements and responding to public inquiries regarding the Special
Taxes; the costs of the City, CFD No. 2006-1 IA KK or any designee thereof related to an appeal of the
Special Tax; the costs associated with the release of funds from an escrow account; and the City's annual
administration fees and third party expenses. Administrative Expenses shall also include amounts
estimated by the CFD Administrator or advanced by the City or CFD No. 2006-1 IA KK for any other
administrative purposes of CFD No. 2006-1 IA KK, including attorney's fees and other costs, and attorney's
fees and other costs related to commencing and pursuing to completion any foreclosure of delinquent
Special Taxes.
"Approved Property" means all Assessor's Parcels of Taxable Property: (i) that are included in a Final Map
that was recorded prior to the January 1st preceding the Fiscal Year in which the Special Tax is being
levied, and (ii) that have not been issued a building permit on or before May 1st preceding the Fiscal Year
in which the Special Tax is being levied.
"Assessor's Parcel" means a lot or parcel of land designated on an Assessor's Parcel Map with an assigned
Assessor's Parcel Number.
"Assessor's Parcel Map" means an official map of the Assessor of the County designating parcels by
Assessor's Parcel Number.
City of Lake Elsinore
Community Facilities District No. 2006-1 IA KK (Summerly) Page 1
"Assessor's Parcel Number" means that number assigned to an Assessor's Parcel by the County for
purposes of identification.
"Assigned Special Tax for Facilities" means the Special Tax for Facilities for each Land Use Class of
Developed Property, as determined in accordance with Section C.1.(b) below.
"Authorized Facilities" means those authorize improvements, as listed in an exhibit to the Resolution of
Formation.
"Backup Special Tax for Facilities" means the Special Taxfor Facilities applicable to each Assessor's Parcel
of Developed Property, as determined in accordance with Section C.1.(c) below.
"CFD Administrator" means an official of the City, or designee thereof, responsible for determining the
Special Tax Requirement for Facilities, the Special Tax Requirement for Services as determined in
accordance with Section I below, and providing forthe levy and collection of the Special Taxes.
"CFD" or "CFD No. 2006-1 IA KK" means Improvement Area KK of CFD No. 2006-1 as identified on the
boundary map for CFD No. 2006-1.
"CFD No. 2006-1" means City of Lake Elsinore Community Facilities District No. 2006-1 (Summerly)
established by the City under the Act.
"CFD No. 2006-1 IA KK Bonds" means any obligation to repay a sum of money, including obligations in
the form of bonds, notes, certificates of participation, long-term leases, loans from government agencies,
or loans from banks, otherfinancial institutions, private businesses, or individuals, or long-term contracts,
or any refunding thereof, to which Special Tax for Facilities within CFD No. 2006-1 IA KK have been
pledged.
"City" means the City of Lake Elsinore.
"City Council" means the City Council of the City of Lake Elsinore, acting as the Legislative Body of CFD
No. 2006-1 IA KK, or its designee.
"County" means the County of Riverside.
"Developed Property" means, with respect tothe Special Tax for Facilities, for each Fiscal Year, all Taxable
Property, 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 and 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 for Facilities is being levied. Once an Assessor's Parcel has been designated
Developed Property, the Maximum Special Tax for Facilities cannot be reduced for any reason unless a
prepayment in full or partial prepayment is made pursuant to Section G.
"Final Subdivision" means (i) a final map, or portion thereof, approved by the City pursuant to the
Subdivision Map Act (California Government Code Section 66410 et seq.) that creates individual lots for
which building permits may be issued, or (ii) for condominiums, a final map, or portion thereof, approved
by the City and a condominium plan recorded pursuant to California Civil Code Section 1352 that creates
individual lots for which building permits may be issued.
"Fiscal Year" means the period commencing on July 1" of any year and ending the following June 30`".
City of Lake Elsinore
Community Facilities District No. 2006-1 IA KK (Summerly) Page 2
"Funding Agreement" means the Funding, Construction and Acquisition Agreement entered into by the
City, on behalf of CFD No. 2006-1, as it may be amended.
"Indenture" means the indenture, fiscal agent agreement, resolution or other instrument pursuant to
which CFD No. 2006-1 IA KK Bonds are issued, as modified, amended and/or supplemented from time to
time, and any instrument replacing or supplementing the same.
"Land Use Class" means any of the classes listed in Table 1 below.
"Maximum Special Tax for Facilities" means the maximum Special Tax for Facilities, determined in
accordance with Section C below, that can be levied in any Fiscal Year on any Assessor's Parcel.
"Non -Residential Property" means all Assessor's Parcels of Developed Property for which a building
permit permitting the construction of one or more non-residential units or facilities has been issued by
the City.
"Outstanding Bonds" means all CFD No. 2006-1 IA KK Bonds which are deemed to be outstanding under
the Indenture.
"Property Owner's Association Property" means, for each Fiscal Year, any property within the boundaries
of CFD No. 2006-1 IA KK that was owned by a property owner association, including any master or sub -
association, as of January 1 of the prior Fiscal Year.
"Proportionately" means for Developed Property that the ratio of the actual Special Tax for Facilities levy
to the Assigned Special Tax for Facilities is equal for all Assessor's Parcels of Developed Property. For
Undeveloped Property, "Proportionately" means that the ratio of the actual Special Tax for Facilities levy
per Acre to the Maximum Special Tax for Facilities per Acre is equal for all Assessor's Parcels of
Undeveloped Property. The term "Proportionately" may similarly be applied to other categories of
Taxable Property as listed in Section D below.
"Public Property" means , for each Fiscal Year, (i) any property within the boundaries of CFD No. 2006-1
IA KK owned by, irrevocably offered or dedicated to, or over, through or under which an easement for
purposes of public use has been granted, to the federal government, the State, the County, the City, the
Lake Elsinore Unified School District, or any local government or other public agency as of January I of the
previous Fiscal Year, provided that any property leased by a public agency to a private entity and subject
to taxation under Section 53340.1 of the Act shall be taxed and classified according to its use; or (ii) any
property within the boundaries of CFD No. 2006-1 IA KK that was encumbered, as of January I of the
previous Fiscal Year, by an unmanned utility easement making impractical its utilization for other than the
purpose set forth in the easement.
"Residential Floor Area" means all of the square footage of living area within the perimeter of a
residential structure, not including any carport, walkway, garage, overhang, patio, enclosed patio, or
similar area. The determination of Residential Floor Area for an Assessor's Parcel shall be made by
reference to the building permit(s) issued for such Assessor's Parcel.
"Residential Property" means all Assessor's Parcels of Developed Property for which a building permit
permitting the construction thereon of one or more residential dwelling units has been issued by the City.
"Resolution of Formation" means the resolution of formation for CFD No. 2006-1 IA KK.
"Special Tax(es)" means any of the special taxes authorized to be levied within CFD No. 2006-1 IA KK
pursuant to the Act.
City of Lake Elsinore
Community Facilities District No. 2006-1 IA KK (Summerly) Page 3
"Special Tax for Facilities" means the special tax to be levied in each Fiscal Year on each Assessor's Parcel
of Developed Property, Taxable Property Owner Association Property, Taxable Public Property, and
Undeveloped Property to fund the Special Tax Requirement for Facilities.
"Special Tax for Facilities Requirement " means that amount required in any Fiscal Year for CFD No. 2006-
1 IA KK to: (i) pay debt service on all Outstanding Bonds due in the calendar year commencing in such
Fiscal Year; (ii) pay periodic costs on the CFD No. 2006- 1 IA KK Bonds, including but not limited to, credit
enhancement and rebate payments on the CFD No. 2006-1 IA KK Bonds due in the calendar year
commencing in such Fiscal Year; (iii) pay Administrative Expenses; (iv) pay any amounts required to
establish or replenish any reserve funds for all Outstanding Bonds; (v) pay for reasonably anticipated
Special Tax for Facilities delinquencies; (vi) pay directly for acquisition or construction of Authorized
Facilities to the extent that the inclusion of such amount does not increase the Special Tax for Facilities
levy on Approved Property and Undeveloped Property; less (vii) a credit for funds available to reduce the
annual Special Tax for Facilities levy, as determined by the CFD Administrator pursuant to the Indenture.
"State" means the State of California
"Taxable Property" means all of the Assessor's Parcels within the boundaries of CFD No. 2006-1 IA KK
which are not exempt from the Special Tax for Facilities pursuant to law or Section E below.
"Trustee" means the trustee, fiscal agent, or paying agent under the Indenture.
"Undeveloped Property" means, for each Fiscal Year, all Taxable Property not classified as Developed
Property, Approved Property, Taxable Property Owner Association Property, or Taxable Public Property.
B. ASSIGNMENT TO LAND USE CATEGORIES
Each Fiscal 'tear, all Taxable Property within CFD No. 2006-1 IA KK shall be classified as Dc.v(Auped
Property, Approved Property, Taxable Public Property, Taxable Property Owner Association Property, or
Undeveloped Property, and shall be subject to Special Taxes in accordance with this Rate and Method of
Apportionment determined pursuant to Sections C and D below. Residential Property shall be assigned to
Land Use Classes 1 through 4 as listed in Table 1 below based on the Residential Floor Area for each unit.
Non -Residential Property shall be assigned to Land Use Class 5. With respect to Residential Property, the
Residential Floor Area shall be determined from the most recent building permit issued forsuch Assessor's
Parcel.
C. MAXIMUM SPECIAL TAX FOR FACILITIES
1. Developed Property
(a) Maximum Special Tax for Facilities
The Maximum Special Tax for Facilities for each Assessor's Parcel classified as Developed Property
shall be the greater of (i) the amount derived by application of the Assigned Special Tax for Facilities
or (ii) the amount derived by application of the Backup Special Tax for Facilities.
(b) Assigned Special Tax for Facilities
The Fiscal Year 2017-2018 Assigned Special Tax for Facilities for each Land Use Class is shown below
in Table 1.
City of Lake Elsinore
Community Facilities District No. 2006-1 IA KK (Summerly) Page 4
TABLE 1
ASSIGNED SPECIAL TAX FOR FACILITIES FOR DEVELOPED PROPERTY
COMMUNITY FACILITIES DISTRICT NO. 2006-1 IMPROVEMENT AREA KK
FISCAL YEAR 2017-2018
Land Use
Class
Description
Residential Floor Area
Assigned Special Tax
for Facilities
1
Residential Property
Less than 1,600 sq. ft
$1,740 per unit
2
Residential Property
1,600 —1,799 sq. ft
$1,850 per unit
3
Residential Property
1,800 —1,999 sq. ft
$1,916 per unit
4
Residential Property
Greater than 1,999 sq. ft.
$1,990 per unit
5
Non -Residential Property
N/A
$15,099 per Acre
(c) Backup Special Tax for Facilities
The Fiscal Year 2017-2018 Backup Special Tax for Facilities attributable to a Final Subdivision will equal
$15,099, multiplied by the Acreage of all Taxable Property, exclusive of any Taxable Property Owner
Association Property and Taxable Public Property, therein. The Backup Special Tax for Facilities for
each Assessor's Parcel of Residential Property shall be computed by dividing the Backup Special Tax
for Facilities attributable to the applicable Final Subdivision by the number of Assessor's Parcels for
which building permits for residential construction have or may be issued (i.e., the number or
residential lots). The Backup Special Tax for Facilities for each Assessor's Parcel of Non -Residential
Property therein shall equal $15,099 multiplied by the Acreage of such Assessor's Parcel.
If a Final Subdivision includes Assessor's Parcels of Taxable Property for which building permits for
both residential and non-residential construction may be issued, exclusive of Taxable Property Owner
Association Property and Taxable Public Property, then the Pcl<up Specia!dax for Facilities for each
Assessor's Parcel of Residential Property shall be computed exclusive of the Acreage and Assessor's
Parcels of property for which building permits for non-residential construction may be issued.
Notwithstanding the foregoing, if all or any portion of the Final Subdivision(s) described in the
preceding paragraphs is subsequently changed or modified by recordation of a lot line adjustment or
similar instrument, and only if the CFD Administrator determines that such change or modification
results in a decrease in the number of Assessor's Parcels of Taxable Property for which building
permits for residential construction have or may be issued within such Final Subdivision, then the
Backup Special Tax for Facilities for each Assessor's Parcel of Developed Property that is part of the
lot line adjustment or similar instrument for such Final Subdivision shall be a rate per Acre as
calculated below. The Backup Special Tax for Facilities previously determined for an Assessor's Parcel
of Developed Property that is not a part of the lot line adjustment or similar instrument for such Final
Subdivision shall not be recalculated.
1. Determine the total Backup Special Tax for Facilities anticipated to apply to the changed or
modified portion of the Final Subdivision area prior to the change or modification.
2. The result of paragraph I above shall be divided by the Acreage of Taxable Property which
is ultimately expected to exist in such changed or modified portion of the Final Subdivision
area, as reasonably determined by the CFD Administrator.
3. The result of paragraph 2 above shall be the Backup Special Tax for Facilities per Acre which
shall be applicable to Assessor's Parcels of Developed Property in such changed or modified
City of Lake Elsinore
Community Facilities District No. 2006-1 IA KK (Summerly) Page 5
portion of the Final Subdivision area for all remaining Fiscal Years in which the Special Tax
for Facilities may be levied.
(d) Release of Obligation to Pay and Disclose Backup Special Tax
All Assessor's Parcels within CFD No. 2006-1 IA KK will be relieved simultaneously and permanently
from the obligation to pay and disclose the backup Special Tax if the CFD Administrator determines
that the annual debt service required for the Outstanding Bonds, when compared to the Assigned
Special Taxes for Facilities that may be levied against all Assessor's Parcels of Developed Property
results in 110% debt service coverage (i.e., the aggregate Assigned Special Taxes for Facilities that may
be levied against all Developed Property in each remaining Fiscal Year based on then existing
development in CFD No. 2006-1 IA KK is at least equal to the sum of (i) the Administrative Expenses
and (ii) 1.10 times maximum annual debt service, in each remaining Fiscal Year on the Outstanding
Bonds).
(e) Increase in the Assigned Special Tax for Facilities and Backup Special Tax for Facilities
The Fiscal Year 2017-2018 Assigned Special Tax for Facilities, identified in Table 1 above, and Backup
Special Tax for Facilities shall increase thereafter, commencing on July 1, 2018 and on July 1 of each
Fiscal Year thereafter, by an amount equal to two percent (2%) of the amount in effect forthe previous
Fiscal Year.
(f) Multiple Land Use Classes
In some instances, an Assessor's Parcel of Developed Property may contain more than one Land Use
Class. The Maximum Special Tax for Facilities levied on an Assessor's Parcel shall be the sum of the
Maximum Special Tax for Facilities for all Land Use Classes located on that Assessor's Parcel. The CFD
Administrator's allocation to each type of property shall be final.
2. Approved Property. Taxable Property Owner Association Property. Taxable Public Property. and
Undeveloped Property
The Fiscal Year 2017-2018 Maximum Special Tax for Facilities for Approved Property, Taxable Property
Owner Association Property, Taxable Public Property, and Undeveloped Property shall be $15,099 per
Acre and shall increase thereafter, commencing on July 1, 2018 and on July 1 of each Fiscal Year thereafter,
by an amount equal to two percent (2%) of the Maximum Special Taxfor Facilities in effect forthe previous
Fiscal Year.
D. METHOD OF APPORTIONMENT OF THE SPECIAL TAX FOR FACILITIES
Commencing with Fiscal Year 2017-2018 and for each following Fiscal Year, the City Council shall
determine the Special Tax Requirement for Facilities and levy the Special Tax for Facilities until the amount
of Special Tax for Facilities levy equals the Special Tax Requirement for Facilities. The Special Tax for
Facilities shall be levied each Fiscal Year as follows:
Step One: The Special Tax for Facilities shall be levied on each Assessor's Parcel of Developed
Property in an amount equal to 100% of the applicable Assigned Special Tax for Facilities;
Step Two: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after
the first step has been completed, the Special Tax for Facilities shall be levied
Proportionately on each Assessor's Parcel of Approved Property at up to 100% of the
Maximum Special Tax for Facilities for Approved Property;
City of Lake Elsinore
Community Facilities District No. 2006-1 IA KK (Summerly) Page 6
Step Three: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after
the first two steps has been completed, the Special Tax for Facilities shall be levied
Proportionately on each Assessor's Parcel of Undeveloped Property at up to 100% of the
Maximum Special Tax for Facilities for Undeveloped Property;
Step Four: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after
the first three steps have been completed, then the levy of the Special Tax for Facilities
on each Assessor's Parcel of Developed Property whose Maximum Special Tax for
Facilities is determined through the application of the Backup Special Tax for Facilities
shall be increased in equal percentages from the Assigned Special Tax for Facilities up to
the Maximum Special Tax for Facilities for each such Assessor's Parcel;
Step Five: If additional monies are needed to satisfy the Special Tax Requirement for Facilities after
the first four steps have been completed, then the Special Tax for Facilities shall be levied
Proportionately on each Assessor's Parcel of Taxable Property Owner Association
Property and Taxable Public Property at up to 100% of the Maximum Special Tax for
Facilities for Taxable Property Owner Association Property or Taxable Public Property.
Notwithstanding the above, the City Council may, in any Fiscal Year, levy Proportionately less than 100%
of the Assigned Special Tax for Facilities in step one (above), when (i) the City Council is no longer required
to levy the Special Tax for Facilities pursuant to steps two through four above in order to meet the Special
Tax Requirement for Facilities; (ii) all authorized CFD No. 2006-1 IA KK Bonds have already been issued or
the City Council has covenanted that it will not issue any additional CFD No. 2006-1 IA KK Bonds (except
refunding bonds) to be supported by the Special Tax for Facilities; and (iii) all Authorized Facilities have
been constructed and/or acquired.
Further notwithstanding the above, under no circumstances will the Special Tax for Facilities levied against
any Assessor's Parcel of Residential Property be increased by more than ten percent as a consequence of
delinquency or default by the owner of any other Assessor's Parcel within CFD No. 2006-1 IA KK.
E. EXEMPTIONS
No Special Tax for Facilities shall be levied on up to 7.13 Acres of Property Owner Association Property
and/or Public Property in CFD No. 2006-1 IA KK. Tax-exempt status will be assigned by the CFD
Administrator in the chronological order in which property becomes Property Owner Association Property
or Public Property. However, should an Assessor's Parcel no longer be classified as Property Owner
Association Property or Public Property, its tax-exempt status will be revoked.
Property Owner Association Property or Public Property that is not exempt from Special Tax for Facilities
under this section shall be subject to the levy of the Special Tax for Facilities and shall be taxed
Proportionately as part of the fourth step in Section D above, at up to 100% of the Maximum Special Tax
for Facilities for Taxable Property Owner Association Property or Taxable Public Property.
F. MANNER OF COLLECTION
The Special Tax for Facilities shall be collected in the same manner and at the same time as ordinary ad
valorem propertytaxes, provided, however, that CFD No. 2006-1 IA KK may collect Special Taxfor Facilities
at a different time or in a different manner if necessaryto meet its financial obligations, and may covenant
to foreclose and may actually foreclose on delinquent Assessor's Parcels as permitted by the Act.
City of Lake Elsinore
Community Facilities District No. 2006-1 IA KK (Summerly) Page 7
G. PREPAYMENT OF SPECIAL TAX FOR FACILITIES
The following additional definitions apply to this Section G:
"Buildout" means, for CFD No. 2006-1 IA KK, that all expected building permits have been issued.
"CFD Public Facilities Costs" means either $4,125,000 in 2017 dollars, which shall increase by the
Construction Inflation Index on July 1, 2018, and on each July I thereafter, or such lower number as (i)
shall be determined by the CFD Administrator as sufficient to fund the Authorized Facilities to be provided
by CFD No, 2006-1 IA KK under the authorized bonding program for CFD No. 2006-1 IA KK, or (ii) shall be
determined by the City Council concurrently with a covenant that it will not issue any more CFD No. 2006-
1 IA KK Bonds (except refunding bonds) to be supported by the Special Tax for Facilities levy under this
Rate and Method of Apportionment as described in Section D above.
"Construction Inflation Index" means the annual percentage change in the Engineering News Record
Building Cost Index for the City of Los Angeles, measured as of the calendar year which ends in the
previous Fiscal Year. In the event this index ceases to be published, the Construction Inflation Index shall
be another index as determined by the CFD Administrator that is reasonably comparable to the
Engineering News Record Building Cost Index forthe City of Los Angeles.
"Future Facilities Costs" means the CFD Public Facilities Costs minus (i) public facility costs previously paid
from the Improvement Fund, (ii) moneys currently on deposit in the Improvement Fund, and (iii) moneys
currently on deposit in an escrow fund established pursuant to the Indenture that are expected to be
available to finance the cost of Authorized Facilities.
"Improvement Fund" means an account specifically identified in the Indenture to hold funds which are
currently available fo, xpenditurc, to acquire or construct Authorized Facilities eligible under the Act.
"Previously Issued Bonds" means, for any Fiscal Year, all Outstanding Bonds that are deemed to be
outstanding under the Indenture after the first interest and/or principal payment date following the
current Fiscal Year.
1. Prepayment in Full
Only an Assessor's Parcel of Developed Property, or Undeveloped Property for which a building permit
has been issued, may be prepaid. The obligation of the Assessor's Parcel to pay the Special Tax for Facilities
may be permanently satisfied as described herein, provided that a prepayment may be made with respect
to a particular Assessor's Parcel only if there are no delinquent Special Taxes with respect to such
Assessor's Parcel at the time of prepayment. An owner of an Assessor's Parcel intending to prepay the
Special Tax for Facilities obligation shall provide the CFD Administrator with written notice of intent to
prepay. Within 30 days of receipt of such written notice, the CFD Administrator shall notify such owner of
the prepayment amount for such Assessor's Parcel. The CFD Administrator may charge a reasonable fee
for providing this service. Prepayment must be made not less than 45 days prior to the next occurring
date that notice of redemption of CFD No. 2006-1 IA KK Bonds from the proceeds of such prepayment
may be given by the Trustee pursuant to the Indenture.
The Special Tax for Facilities Prepayment Amount (defined below) shall be calculated as summarized
below (capitalized terms as defined below):
City of Lake Elsinore
Community Facilities District No. 2006-1 IA KK (Summerly) Page 8
The Prepayment Amount shall be determined as of the proposed prepayment date as follows:
1. Confirm that no Special Tax delinquencies apply to such Assessor's Parcel.
2. For Assessor's Parcels of Developed Property, compute the Assigned Special Tax for Facilities
and Backup Special Tax for Facilities. For Assessor's Parcels of Undeveloped Property for which a
building permit has been issued, compute the Assigned Special Tax for Facilities and Backup Special
Tax for Facilities forthat Assessor's Parcel as though it was already designated as Developed Property,
based upon the building permit which has already been issued for that Assessor's Parcel.
3. (a) Divide the Assigned Special Tax for Facilities computed pursuant to paragraph 2 by the total
estimated Assigned Special Tax for Facilities for the entire CFD No. 2006-1 IA KK based on the
Developed Property Special Tax for Facilities which could be levied in the current Fiscal Year on all
expected development through Buildout of CFD No. 2006-1 IA KK, excluding any Assessor's Parcels
which have been prepaid, and
(b) Divide the Backup Special Tax for Facilities computed pursuant to paragraph 2 by the total
estimated Backup Special Tax for Facilities at Buildout for the entire CFD No. 2006-1 IA KK, excluding
any Assessor's Parcels which have been prepaid.
4. Multiply the larger quotient computed pursuant to paragraph 3(a) or 3(b) by the Previously
Issued Bonds to compute the amount of Previously Issued Bonds to be retired and prepaid (the "Bond
Redemption Amount")
5. Multiply the Bond Redemption Amount computed pursuant to paragraph 4 by the applicable
redemption premium (e.g., the redemption price -100%), if any, on the Previously Issued Bonds to be
redeemed (the "Redemption Premium").
6. Compute the current Future Facilities Costs.
7. Multiply the larger quotient computed pursuant to paragraph 3(a) or 3(b) by the amount
determined pursuant to paragraph 6 to compute the amount of Future Facilities Costs to be prepaid
(the "Future Facilities Amount").
8. Compute the amount needed to pay interest on the Bond Redemption Amount from the first
bond interest and/or principal payment date following the current Fiscal Year until the earliest
redemption date for the Previously Issued Bonds.
9. Determine the Special Tax for Facilities levied on the Assessor's Parcel in the current Fiscal Year
which has not yet been paid.
10. Compute the minimum amount the CFD Administrator reasonably expects to derive from the
City of Lake Elsinore
Community Facilities District No. 2006-1 IA KK (Summerly) Page 9
Bond Redemption Amount
plus
Redemption Premium
plus
Future Facilities Amount
plus
Defeasance Amount
plus
Administrative Fees and Expenses
less
Reserve Fund Credit
less
Capitalized Interest Credit
Equals:
Prepayment Amount
The Prepayment Amount shall be determined as of the proposed prepayment date as follows:
1. Confirm that no Special Tax delinquencies apply to such Assessor's Parcel.
2. For Assessor's Parcels of Developed Property, compute the Assigned Special Tax for Facilities
and Backup Special Tax for Facilities. For Assessor's Parcels of Undeveloped Property for which a
building permit has been issued, compute the Assigned Special Tax for Facilities and Backup Special
Tax for Facilities forthat Assessor's Parcel as though it was already designated as Developed Property,
based upon the building permit which has already been issued for that Assessor's Parcel.
3. (a) Divide the Assigned Special Tax for Facilities computed pursuant to paragraph 2 by the total
estimated Assigned Special Tax for Facilities for the entire CFD No. 2006-1 IA KK based on the
Developed Property Special Tax for Facilities which could be levied in the current Fiscal Year on all
expected development through Buildout of CFD No. 2006-1 IA KK, excluding any Assessor's Parcels
which have been prepaid, and
(b) Divide the Backup Special Tax for Facilities computed pursuant to paragraph 2 by the total
estimated Backup Special Tax for Facilities at Buildout for the entire CFD No. 2006-1 IA KK, excluding
any Assessor's Parcels which have been prepaid.
4. Multiply the larger quotient computed pursuant to paragraph 3(a) or 3(b) by the Previously
Issued Bonds to compute the amount of Previously Issued Bonds to be retired and prepaid (the "Bond
Redemption Amount")
5. Multiply the Bond Redemption Amount computed pursuant to paragraph 4 by the applicable
redemption premium (e.g., the redemption price -100%), if any, on the Previously Issued Bonds to be
redeemed (the "Redemption Premium").
6. Compute the current Future Facilities Costs.
7. Multiply the larger quotient computed pursuant to paragraph 3(a) or 3(b) by the amount
determined pursuant to paragraph 6 to compute the amount of Future Facilities Costs to be prepaid
(the "Future Facilities Amount").
8. Compute the amount needed to pay interest on the Bond Redemption Amount from the first
bond interest and/or principal payment date following the current Fiscal Year until the earliest
redemption date for the Previously Issued Bonds.
9. Determine the Special Tax for Facilities levied on the Assessor's Parcel in the current Fiscal Year
which has not yet been paid.
10. Compute the minimum amount the CFD Administrator reasonably expects to derive from the
City of Lake Elsinore
Community Facilities District No. 2006-1 IA KK (Summerly) Page 9
reinvestment of the Special Tax for Facilities Prepayment Amount less the Future Facilities Amount
and the Administrative Fees and Expenses (defined below) from the date of prepayment until the
redemption date for the Previously Issued Bonds to be redeemed with the prepayment.
11. Add the amounts computed pursuant to paragraphs 8 and 9 and subtract the amount computed
pursuant to paragraph 10 (the "Defeasance Amount"),
12. The administrative fees and expenses of CFD No. 2006-1 IA KK are as calculated by the CFD
Administrator and include the costs of computation of the prepayment, the costs to invest the
prepayment proceeds, the costs of redeeming CFD No. 2006-1 IA KK Bonds, and the costs of recording
any notices to evidence the prepayment and the redemption (the "Administrative Fees and
Expenses").
13. The reserve fund credit (the "Reserve Fund Credit") shall equal the lesser of: (a) the expected
reduction in the reserve requirement (as defined in the Indenture), if any, associated with the
redemption of Previously Issued Bonds as a result of the prepayment, or (b) the amount derived by
subtracting the new reserve requirement (as defined in the Indenture) in effect afterthe redemption
of Previously Issued Bonds as a result of the prepayment from the balance in the reserve fund on the
prepayment date, but in no event shall such amount be less than zero. No Reserve Fund Credit shall
be granted if the amount then on deposit in the reserve fund forthe Previously Issued Bonds is below
100% of the reserve requirement (as defined in the Indenture).
14. If any capitalized interest for the Previously Issued Bonds will not have been expended as of the
date immediately following the first interest and/or principal payment following the current Fiscal
Year, a capitalized interest credit shall be calculated by multiplying the larger quotient computed
pursuant to paragraph 3(a) or 3(b) by the expected balance in the capitalized interest fund or account
under the Indenture after such first interest -and/or principal payment (the "Capitalized Interest
Credit").
15. The Special Tax for Facilities prepayment is equal to the sum of the amounts computed pursuant
to paragraphs 4, 5, 7, 11 and 12, less the amounts computed pursuant to paragraphs 13 and 14 (the
"Special Tax for Facilities Prepayment Amount").
From the Special Tax for Facilities Prepayment Amount, the amounts computed pursuant to
paragraphs 4, 5, 11, 13 and 14 shall be deposited into the appropriate fund as established under the
Indenture and be used to retire CFD No. 2006-1 IA KK Bonds or make debt service payments. The
amount computed pursuant to paragraph 7 shall be deposited into the Improvement Fund. The
amount computed pursuant to paragraph 12 shall be retained by CFD No. 2006-1 IA KK.
The Special Tax for Facilities Prepayment Amount may be insufficient to redeem a full $5,000
increment of CFD No. 2006-1 IA KK Bonds. In such cases, the increment above $5,000 or integral
multiple thereof will be retained in the appropriate fund established under the Indenture to be used
with the next prepayment of CFD No. 2006-1 IA KK Bonds or to make debt service payments.
As a result of the payment of the current Fiscal Year's Special Tax for Facilities levy as determined
under paragraph 9 (above), the CFD Administrator shall remove the current Fiscal Year's Special Tax
for Facilities levy for such Assessor's Parcel from the County tax rolls. With respect to any Assessor's
Parcel that is prepaid, the City Council shall cause a suitable notice to be recorded in compliance with
the Act, to indicate the prepayment of the Special Tax for Facilities and the release of the Special Tax
for Facilities lien on such Assessor's Parcel, and the obligation of such Assessor's Parcel to pay the
Special Tax for Facilities shall cease.
City of Lake Elsinore
Community Facilities District No. 2006-1 IA KK (Summerly) Page 10
Notwithstanding the foregoing, no Special Tax for Facilities prepayment shall be allowed unless, at
the time of such proposed prepayment, the amount of Maximum Special Tax for Facilities that may
be levied on Taxable Property within CFD No. 2006-1 IA KK (after excluding 12.85 Acres of Property
Owner Association Property and/or Public Property in CFD No. 2006-1 IA KK as set forth in Section E)
both priorto and after the proposed prepayment is at least equal to the sum of (i) the Administrative
Expenses, as defined in Section A above, and (ii) 1.10 times maximum annual debt service, in each
remaining Fiscal Year on the Outstanding Bonds.
2. Prepayment in Part
The Special Tax for Facilities on an Assessor's Parcel of Developed Property or an Assessor's Parcel of
Undeveloped Property for which a building permit has been issued may be partially prepaid. The amount
of the prepayment shall be calculated as in Section G.1.; except that a partial prepayment shall be
calculated according to the following formula:
PP = ((PE —A) x F) +A
These terms have the following meaning:
PP = Partial Prepayment Amount
PE = the Prepayment Amount calculated according to Section G.1
F = the percent by which the owner of the Assessor's Parcel(s) is partially prepaying the
Maximum Special Tax for Facilities obligation
A = the Administrative Fees and Expenses determined pursuant to Section G.1
The owner of any Assessor's Parcel who desires such prepayment shall notify the CFD Administrator of
such owner's intent to partially prepay the Special Tax for Facilities and the percentage by which the
Special Tax for Facilities shall be prepaid. ncc CFD -Administrator shall provide the owner with a statement
of the amount required for the partial prepayment of the Special Tax for Facilities for an Assessor's Parcel
within 30 days of the request and may charge a reasonable fee for providing this service. With respect to
any Assessor's Parcel that is partially prepaid, the City Council shall (i) distribute the funds remitted to it
according to Section G.1, and (ii) indicate in the records of CFD No. 2006-1 IA KK that there has been a
partial prepayment of the Special Tax for Facilities and that a portion of the Special Tax for Facilities with
respect to such Assessor's Parcel, equal to the outstanding percentage (1.00 - F) of the remaining
Maximum Special Tax for Facilities, shall continue to be levied on such Assessor's Parcel pursuant to
Section D above.
H. TERM OF SPECIAL TAX FOR FACILITIES
The Special Tax for Facilities shall be levied until Fiscal Year 2058-2059, provided however that the Special
Tax for Facilities will cease to be levied in an earlier Fiscal Year if the CFD Administrator has determined
(i) that all required interest and principal payments on the CFD No. 2006-1 IA KK Bonds have been paid;
(ii) all Authorized Facilities have been acquired and all reimbursements required by the Funding
Agreement have been paid; and (iii) all other obligations of CFD No. 2006-1 IA KK have been satisfied.
Bonds shall not be issued after eighteen (18) months have elapsed following the final inspection of the
last Residential Property within CFD No. 2006-1 IA KK, except as otherwise provided in the Funding
Agreement.
City of Lake Elsinore
Community Facilities District No. 2006-1 IA KK (Summerly) Page 11
I. SPECIAL TAX FOR SERVICES
The following additional definitions apply to this Section I
"Developed Multifamily Unit" means a residential dwelling unit within a building in which each of the
individual dwelling units has or shall have at least one common wall with another dwelling unit and a
building permit has been issued by the City for such dwelling unit on or priorto May 1 precedingthe Fiscal
Year in which the Special Tax for Services is being levied.
"Developed Single Family Unit" means a residential dwelling unit other than a Developed Multifamily
Unit on an Assessor's Parcel for which a building permit has been issued by the City on or prior to May 1
preceding the Fiscal Year in which the Special Tax for Services is being levied.
"Maximum Special Tax for Services" means the maximum Special Tax for Services that can be levied by
CFD No. 2006-1 IA KK in any Fiscal Year on any Assessor's Parcel.
"Operating Fund" means a fund that shall be maintained for CFD No. 2006-1 IA KK for any Fiscal Year to
pay for the actual costs of maintenance related to the Service Area, and the applicable Administrative
Expenses.
"Operating Fund Balance" means the amount of funds in the Operating Fund at the end of the preceding
Fiscal Year.
"Service Area" means parks, open space, and storm drains.
"Special Tax for Services" means any of the special taxes authorized to be levied within CFD No. 2006-1
IA KK p'urs •ant to the Au to fund the Special Tax Requirement for Services.
"Special Tax Requirement for Services" means the amount determined in any Fiscal Year for CFD No.
2006-1 IA KK equal to (i) the budgeted costs directly related to the Service Area, including maintenance,
repair and replacement of certain components of the Service Area which have been accepted and
maintained or are reasonably expected to be accepted and maintained during the current Fiscal Year, (ii)
Administrative Expenses, and (iii) anticipated delinquent Special Taxes for Services based on the
delinquency rate in CFD No. 2006-1 IA KK forthe previous Fiscal Year, less (iv) the Operating Fund Balance,
as determined by the CFD Administrator.
1. Rate and Method of Apportionment of the Special Tax for Services
Commencing Fiscal Year 2017-2018 and for each subsequent Fiscal Year, the City Council shall levy
Special Taxes for Services on (i) all Assessor's Parcels containing a Developed Single Family Unit or
Developed Multifamily Unit and (ii) all Assessor's Parcels of Non -Residential Property, up to the
applicable Maximum Special Tax for Services to fund the Special Tax Requirement for Services.
The Maximum Special Tax for Services for Fiscal Year 2017-2018 shall be $306.91 per Developed Single
Family Unit, $153.47 per Developed Multifamily Unit, and $691 per Acre for each Assessor's Parcel of
Non -Residential Property.
On each July 1, commencing July 1, 2018, the Maximum Special Tax for Services shall be increased by
two percent (2.00%) of the amount in effect in the prior Fiscal Year.
City of Lake Elsinore
Community Facilities District No. 2006-1 IA KK (Summerly) Page 12
J. DURATION OF SPECIAL TAX FOR SERVICES
The Special Tax for Services shall be levied in perpetuity to fund the Special Tax for Services Requirement,
unless no longer required as determined at the sole discretion of the City Council.
K. APPEALS AND INTERPRETATIONS
Any landowner or resident who feels that the amount of the Special Tax levied on their Assessor's Parcel
is in error may submit a written appeal to CFD No. 2006-1 IA KK. The CFD Administrator shall review the
appeal and if the CFD Administrator concurs, the amount of the Special Tax levied shall be appropriately
modified.
The City Council may interpret this Rate and Method of Apportionment for purposes of clarifying any
ambiguity and make determinations relative to the annual administration of the Special Tax and any
landowner or resident appeals. Any decision of the City Council shall be final and binding as to all persons.
City of Lake Elsinore
Community Facilities District No. 2006-1 IA KK (Summerly) Page 13
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